<PAGE>
- --------------------------------------------------------------------------------
Fellow Shareholders
- --------------------------------------------------------------------------------
It was a terrific year for common stock investors. Your fund returned more than
30% for the second time in the past 10 years. The last decade was exceptional
for shareholders, with positive returns in 9 of 10 years. The most recent 5- and
10-year periods generated average annual compound total returns of 16.7% and
13.3%, respectively (see table on page 6).
Your fund's returns for the 6- and 12-month periods ended December 31,
1995, slightly surpassed the peer group benchmark shown below but trailed the
unmanaged Standard & Poor's 500 Stock Index. For the second consecutive year,
domestic stocks representing roughly two-thirds of fund assets provided better
returns than foreign holdings, which were about one-quarter of total fund assets
(cash reserves accounted for the rest).
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Performance Comparison
- ------------------------------------------------------------------------------
Periods Ended 12/31/95
6 Months 12 Months
-------- ---------
<S> <C> <C>
Growth Stock Fund 12.6% 31.0%
S&P 500 14.5 37.6
Lipper Growth Fund Average 11.1 30.8
- ------------------------------------------------------------------------------
</TABLE>
YEAR-END DISTRIBUTIONS
On December 26, your Board of Directors declared a $0.23 per share net income
dividend, a $0.87 per share long-term capital gain, and a $0.10 per share short-
term capital gain, payable to shareholders of record on that date. These
distributions were reflected in either a check or statement mailed to you early
in January and were also reported on Form 1099-DIV mailed to you later in the
month.
MARKET ENVIRONMENT
For the U.S. stock market, 1995 will go down as one of the best years ever. The
U.S. economy grew at a modest pace during the year. Alan Greenspan, Chairman of
the Federal Reserve, appears to have successfully engineered a soft landing for
the economy through a series of moves designed to combat inflation without
choking off growth. The resulting slower-growth, stable-inflation environment
triggered a massive rally in bonds that made up for the losses suffered in 1994.
The surprise element fueling the rally in U.S. equities was corporate
profits, which soared on solid sales growth. Much of this was due to
productivity gains, which stand at an all-time high. Companies have become more
productive through better management, restructuring, and the use of technology
to lower costs.
Areas of particular strength in the domestic market included financial
stocks, which benefited from falling interest rates; technology stocks, whose
earnings growth consistently surprised on the upside; and health care stocks,
which rallied from the depressed levels of early 1994 when concerns about health
care reform began to fade. Pockets of weakness included cyclical commodity
companies whose earnings growth potential slowed with the economy. Consumer
stocks such as retailers and restaurants also underperformed.
Foreign markets generally did well in 1995, although not well enough to
keep up with U.S. equities. European stocks were strong in local currency terms
and stronger yet in U.S. dollar terms as investors anticipated a revival of
economic growth. Recently, central banks began the process of monetary easing on
the Continent, which should help European stock and bond markets.
Latin America was the worst-performing foreign area in 1995. The collapse
of the Mexican peso and subsequent contraction of the local economy led to
weaker currencies and lower investor confidence throughout the region. Far
Eastern stocks were generally lackluster, since
<PAGE>
most Asian markets were flat or down due to fears of inflation caused by
overheating economies. However, tight monetary policies reduced concerns about
runaway inflation and put these markets on more stable footing.
PORTFOLIO MANAGEMENT
Financial stocks were a featured group with issues such as Federal Home Loan
Mortgage Corporation (Freddie Mac), Federal National Mortgage Association
(Fannie Mae), and ACE contributing mightily to performance. We still like this
sector because of its low relative valuations and prospects for further Fed
accommodation.
The technology sector outperformed the general market in each of the last
five years. In 1995, stocks such as Intuit, Maxim Integrated Products, and
Oracle delivered outstanding returns to the portfolio. We have been gradually
trimming certain technology stocks, including Microsoft, and eliminated Northern
Telecom and Sprint in the second half. Consequently, your fund owned fewer
technology stocks than many other growth-oriented funds. These reductions are
not a repudiation of the longer-term case for above-average growth for
technology companies, but rather reflect our concerns about near-term
cyclicality and extended valuations.
The fundamentals point to a tougher year for technology in 1996: global
economic growth is slow, the personal computer market will be between major
product cycles, telecommunications reform has created uncertainty, and the
wireless market is beginning the transition from analog to digital. As investors
focused on these weaker fundamentals, technology stocks corrected sharply in the
fourth quarter of 1995, and many stocks with solid long-term potential suffered
price declines of 30% to 50%. Because of their more attractive valuations and
long-term potential, we began to accumulate selected issues such as cisco
Systems and Cirrus Logic and added to existing positions in Xilinx and
Vodaphone. Overall, we are still underexposed to technology but closing the gap.
The weak showing of retail stocks for the third consecutive year caused us
to reevaluate our holdings in this sector. The dominant niche companies have
seen their price/earnings ratios decline substantially. We took advantage of
this development to sell shares in slower-growing, value-oriented stocks such as
Federated Department Stores and Dayton Hudson and replace them with dominant
niche retailers with better growth prospects such as Circuit City and Home
Depot.
A notable transaction benefiting your fund in the second half was the
merger between First Financial Management and First Data, two large data service
companies. The fund had a large position in the first company, which was
acquired at a premium price by the second. We not only held on to the new First
Data shares but also purchased additional shares of the combined enterprise.
INVESTMENT OUTLOOK
U.S. stocks benefited enormously in 1995 from low inflation, positive economic
growth, and higher-than-expected corporate earnings growth. The first two
conditions are likely to remain intact in 1996. However, above-expectation
profit growth will be harder to maintain. Slower economic growth increasingly
puts pressure on sales, and companies may find it difficult to produce strong
bottom-line results from lackluster top-line revenues.
The Federal Reserve reversed its previously tight monetary policy by easing
twice last year to ensure continued growth. While this was beneficial for U.S.
stocks, some domestic equities are expensive by many historical valuation
measures: price/earnings, price/cash flow, dividend yield, and price/book value.
Nevertheless, we remain positive overall in our outlook for domestic stocks.
Our economic outlook has important implications for the types of growth
stocks your fund owns. Established growth stocks, out of favor from 1992 to
1994, outperformed value stocks modestly last year. We believe the steady,
stable earnings patterns of these companies should benefit from increasing
investor demand if economic growth decelerates.
2
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Weighted Portfolio Characteristics
- -------------------------------------------------------------------------------
As of 12/31/95
-------------------------
Growth Stock
Domestic
Portfolio S&P 500
------------ -------
<S> <C> <C>
Earnings Growth Rate
Past 5 years 10.2% 5.0%
Projected 5 years 16.9 7.0
Dividend Growth Rate
Past 5 years 6.7 3.4
Projected 5 years 11.2 7.0
Return on Equity
Past 5 years 13.0 10.5
Projected 5 years 17.8 14.0
Long-Term Debt as Percent
of Capital 21.4 23.8
P/E Ratio (12-month forward
projected earnings) 16.6x 15.8x
- -------------------------------------------------------------------------------
</TABLE>
On average, portfolio stocks at year-end sold at a modest premium to the
market. The table indicates that our domestic holdings represent good value
relative to the broad market. Because of this, as well as our expectation that
established growth companies will continue to attract increasing investor
attention, we believe the fund's prospects are good for strong relative
performance in 1996.
Foreign stocks, which lagged U.S. stocks by a wide margin over the past two
years, appear poised for a period of outperformance. Interest rates seem to be
headed lower in Europe as central banks try to stimulate economies that never
rebounded vigorously from the 1991 global recession. The major productivity
gains that fueled U.S. earnings growth have yet to be achieved by European
firms.
Latin American countries such as Argentina and Brazil appear to have put
their economic houses in order, setting the stage for a rebound in share prices.
Fears of overheating in Far Eastern nations seem to be abating. These economies
are growing at several times the real growth rates of the U.S. and Europe. Both
Latin America and the Far East have strong long-term growth potential as well as
improving near-term prospects.
We welcome new shareholders, and we will continue to search for promising
opportunities in the more challenging environment we foresee in the year ahead.
Respectfully submitted,
/s/ John Gillespie
John Gillespie
President and Chairman of the
Investment Advisory Committee
January 19, 1996
3
<PAGE>
- --------------------------------------------------------------------------------
Growth Stock Fund P/E Ratio Relative to the S&P 500 P/E Ratio
- --------------------------------------------------------------------------------
[GRAPH APPEARS HERE]
- --------------------------------------------------------------------------------
This chart is intended to show the history of the average (unweighted) P/E
ratio of the fund's U.S. portfolio companies compared with the P/E ratio of
the S&P 500 Stock Index. Earnings per share are estimated by the fund's
investment manager at each quarter-end.
- --------------------------------------------------------------------------------
A Word on Market Corrections
- --------------------------------------------------------------------------------
After the stock market's spectacular run in 1995, concerns about a "correction"
have intensified. Most market observers consider a correction to be a short and
sometimes steep decline following a period of rising prices. Moderate
corrections of around 10% have been quite common, occurring on average about
once every two years over the last half-century, according to Ned Davis
Research.
The market as measured by the Dow Jones Industrial Average has not
experienced a moderate correction since early 1994. Furthermore, the Dow last
hit a bear market bottom - defined as a drop of at least 20% - in October 1990.
Therefore, it would not be surprising to see a modest pullback in 1996, on the
order of 5% to 10%. In fact, as we write, the market has gotten off to a rocky
start.
Corrections not only are common, but can be beneficial for long-term
investors, especially those who invest in regular amounts through dollar cost
averaging. In a correction, overall stock prices decline, often leading to more
attractive valuations and good buying opportunities. History has shown that
investors who continue to buy through a downturn fare quite well. In fact, the
Dow has proven resilient in the aftermath of past corrections of around 10%,
taking an average of just six months to recover its losses, according to Ned
Davis. (To realize the benefits of dollar cost averaging, you should be prepared
to continuously purchase securities over a period of time, in up and down
markets. This approach does not assure a gain nor protect you from a loss in
declining markets.)
We raise the issue of a market correction not as a prediction, but as a
reminder that stock prices do not move in only one direction. If you are
satisfied that your investments are appropriate for your various objectives, we
recommend that you stay the course when a correction eventually occurs.
4
<PAGE>
- --------------------------------------------------------------------------------
Twenty-Five Largest Holdings
- --------------------------------------------------------------------------------
December 31, 1995
<TABLE>
<CAPTION>
Percent of
Company Net Assets
- ------------------------------------------------------------------ ----------
<S> <C>
Freddie Mac 4.7%
GE 2.6
Berkshire Hathaway 2.3
First Data 1.9
Great Lakes Chemical 1.8
Schlumberger 1.8
UNUM 1.7
Vodafone 1.7
Royal Dutch Petroleum 1.7
Hutchison Whampoa 1.5
Fannie Mae 1.4
Intuit 1.4
PartnerRe Holdings 1.3
Boston Scientific 1.2
Reuters 1.2
ACE Limited 1.2
Kimberly-Clark 1.2
Danaher 1.1
Pfizer 1.1
AlliedSignal 1.0
Norwest 1.0
Viacom 1.0
Elsevier 1.0
Merck 1.0
Adobe Systems 0.9
- --------------------------------------------------------------------------------
Total 38.7%
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Major Portfolio Changes
- --------------------------------------------------------------------------------
Six Months Ended December 31, 1995
Listed in descending order of size.
- --------------------------------------------------------------------------------
TEN LARGEST PURCHASES
- --------------------------------------------------------------------------------
Circuit City Stores*
Royal Dutch Petroleum
Eastman Kodak*
Varity*
Olsten*
Cirrus Logic*
cisco Systems*
First Data*
Kinnevik*
DSC Communications*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST SALES
- --------------------------------------------------------------------------------
Abbott Laboratories**
International Flavors & Fragrances**
Hercules**
Dayton Hudson**
Microsoft
Exide
Franklin Quest**
Sprint**
Halliburton
Northern Telecom**
- --------------------------------------------------------------------------------
* Position added
** Position eliminated
5
<PAGE>
- --------------------------------------------------------------------------------
Performance Comparison
- --------------------------------------------------------------------------------
[GRAPH APPEARS HERE]
- --------------------------------------------------------------------------------
Average Annual Compound Total Return
- --------------------------------------------------------------------------------
Periods Ended December 31, 1995
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C>
30.97% 16.71% 13.29%
- --------------------------------------------------------------------------------
</TABLE>
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Sector Diversification
- --------------------------------------------------------------------------------
12/31/95
--------
<S> <C>
Common Stocks 91.6%
Convertibles 0.1
Preferred Stocks 0.4
Reserves 7.9
--------
Total Net Assets 100.0%
- --------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
- --------------------------------------------------------------------------------
Investment Record
T. Rowe Price Growth Stock Fund
- --------------------------------------------------------------------------------
The table below shows the investment record of one share of the T. Rowe Price
Growth Stock Fund purchased at the initial offering price of $1.97 for the
period 4/11/50 through 12/31/95. Over this time, stock prices in general have
risen. The results shown should not be considered as a representation of the
income or capital gain or loss which may be realized from an investment made in
the fund today.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Per Share Data/1/
- ----------------------------------------------------------------------------------------------------------------
5 Years Net Capital With Capital Gain With Dividends
Ended Asset Gain Income Distributions and Capital Gains
12/31 Value Distributions/2/ Dividends Reinvested Reinvested
------- ------- ---------------- --------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
1955/3/ $ 4.91 $ 0.41 $ 0.55 $ 5.38 $ 6.42
1960 7.08 1.17 0.59 9.46 12.46
1965 10.58 0.99 0.73 15.81 22.69
1970 11.55 1.20 0.89 19.06 29.51
Year Ended
12/31
-------
1971 14.81 0.20 0.15 24.85 38.92
1972 16.66 0.32 0.12 28.51 44.99
1973 11.91 0.54 0.14 21.13 33.66
1974 7.65 0.23 0.22 13.86 22.54
1975 10.19 -- 0.13/4/ 18.46 30.51
1976 11.26 -- 0.23 20.40 34.47
1977 10.25 -- 0.23 18.57 32.03
1978 11.12 -- 0.28 20.14 35.76
1979 12.02 -- 0.33 21.77 39.80
1980 15.08 -- 0.42 27.31 51.77
1981 12.72 0.04 0.50 23.11 45.33
1982 14.07 0.09 0.53 25.76 52.88
1983 15.21 -- 0.50 27.85 59.22
1984 14.20 0.45 0.36 26.80 58.36
1985 17.95 0.64 0.34 35.44 78.95
1986 16.96 4.18 0.38 42.24 96.18
1987 14.27 2.66 0.63 42.22 99.73
1988 14.55 0.26 0.32 43.83 105.78
1989 16.27 1.58 0.34 53.92 132.68
1990 14.71 0.43 0.43 50.17 126.98
1991 18.75 0.62 0.25 66.22 169.89
1992 18.66 1.03 0.18 69.55 180.08
1993 20.42 0.99 0.14 79.84 208.10
1994 18.75 1.66 0.18 79.84 209.94
1995 23.35 0.97 0.23 103.58 274.95
- ----------------------------------------------------------------------------------------------------------------
Total $20.66 $10.32
================================================================================================================
</TABLE>
1. Per share figures reflect the following stock splits: 2-for-1 September 17,
1954; 3-for-1 October 9, 1959; 2-for-1 May 1, 1973.
2. Includes short-term capital gains of $0.03 in 1986; $0.29 in 1987; $0.04 in
1988; $0.30 in 1989; and $0.10 in 1995.
3. From inception 4/11/50 to 12/31/55.
4. In 1975, the dividend schedule was shifted from semi-annual to annual by
consolidating the August 1975 dividend into the January 1976 payment.
7
<PAGE>
- --------------------------------------------------------------------------------
Statement of Net Assets
T. Rowe Price Growth Stock Fund / December 31, 1995
- --------------------------------------------------------------------------------
(values in thousands)
<TABLE>
<CAPTION>
Value
----------
<C> <S> <C>
- ------------------------------------------------------------------------------------------------------
Common Stocks & Warrants-- 91.6%
- ------------------------------------------------------------------------------------------------------
FINANCIAL -- 20.0%
- ------------------------------------------------------------------------------------------------------
BANK AND TRUST -- 5.5%
24,931,997 shs * Banco Bradesco, new............................................. $ 41
5,000,000 * Banca Fideuram (ITL)............................................ 5,777
609,886 * Cho Hung Bank (KRW)............................................. 7,099
257,140 * Deutsche Bank (DEM)............................................. 12,207
5,910 wts * Deutsche Bank, 6/30/97,
(DEM)........................................................ 91
2,000,000 shs * Lippo Bank (IDR)................................................ 3,083
97,941,200 * Lojas American (BRL)............................................ 2,136
250,000 Mellon Bank..................................................... 13,438
300,000 NationsBank..................................................... 20,888
394,700 Northern Trust.................................................. 21,980
825,000 Norwest......................................................... 27,225
140 * Seoul Access Trust (IDR)........................................ 2,170
55,000 * Societe Generale de
France ADR (FRF)............................................. 6,795
8,320 * Societe Generale de
Surveillance (CHF)........................................... 16,445
750,000 Toronto-Dominion
Bank (CAD)................................................... 13,182
152,557
INSURANCE -- 5.8%
825,000 ACE Limited..................................................... 32,794
79,100 * CapMac Holdings................................................. 1,987
210,000 Citizens Corp................................................... 3,911
50,000 Erie Indemnity.................................................. 2,850
169,500 Foremost........................................................ 8,645
200,000 * LaSalle Re Holdings............................................. 4,550
1,055,409 # PartnerRe Holdings.............................................. 25,943
100,000 PartnerRe Holdings.............................................. 2,731
531,665 wts *# PartnerRe Holdings,
11/04/00..................................................... 6,218
850,000 shs UNUM............................................................ 46,750
752,000 Zurich Reinsurance.............................................. 22,842
159,221
FINANCIAL SERVICES -- 8.7%
400,000 AMBAC........................................................... 18,750
700,000 Countrywide Credit.............................................. 15,225
109,400 * Fairfax Financial (CAD)......................................... 7,851
305,100 Fannie Mae...................................................... 37,871
1,554,600 Freddie Mac..................................................... 129,809
250,000 Fund American Enterprises....................................... 18,625
<CAPTION>
Value
----------
<C> <S> <C>
200,000 shs Leucadia National............................................... $ 5,000
337,500 Quick & Reilly.................................................. 6,919
240,050
TOTAL FINANCIAL 551,828
- ------------------------------------------------------------------------------------------------------
UTILITIES -- 0.8%
- ------------------------------------------------------------------------------------------------------
TELEPHONE -- 0.8%
2,000,000 * Telecom Italia (ITL)............................................ 3,111
2,900,000 * Telecom Italia Mobile,
savings shares (ITL)......................................... 3,049
2,000,000 * Telecom Italia Mobile (ITL)..................................... 3,520
2,900,000 * Telecom Italia,
savings shares (ITL)......................................... 3,546
1,250,000 * Telekom Malaysia (MYR).......................................... 9,745
TOTAL UTILITIES 22,971
- ------------------------------------------------------------------------------------------------------
CONSUMER NONDURABLES -- 15.3%
- ------------------------------------------------------------------------------------------------------
BEVERAGES -- 1.6%
350,000 * Grolsch (NLG)................................................... 12,170
50,000 * LVMH (FRF)...................................................... 10,415
375,000 PepsiCo......................................................... 20,953
43,538
FOOD PROCESSING -- 0.6%
550,000 Sara Lee........................................................ 17,531
HOSPITAL SUPPLIES/HOSPITAL
MANAGEMENT -- 1.9%
52,800 * Apria Healthcare................................................ 1,505
700,000 * Boston Scientific............................................... 34,300
375,000 * St. Jude Medical................................................ 16,078
51,883
PHARMACEUTICALS -- 6.9%
100,000 * Amgen........................................................... 5,931
15,000 * Ares-Serono (CHF)............................................... 10,533
500,000 * Astra (Class B) (SEK)........................................... 19,805
400,000 * Genentech....................................................... 21,200
2,174,246 Medeva (GBP).................................................... 9,117
80,000 * Medeva ADR...................................................... 1,360
400,000 Merck........................................................... 26,300
850,000 Mylan Laboratories.............................................. 19,975
500,000 Pfizer.......................................................... 31,500
22,000 Sandoz (CHF).................................................... 20,140
65,000 * Schwarz Pharma AG (DEM)......................................... 3,195
400,000 SmithKline Beecham ADR.......................................... 22,200
191,256
</TABLE>
8
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
----------
<C> <S> <C>
MISCELLANEOUS CONSUMER
PRODUCTS -- 4.3%
500,000 shs American Greetings
(Class A).................................................... $ 13,844
337,500 * CUC International............................................... 11,517
500,000 * Department 56................................................... 19,188
200,000 First Brands.................................................... 9,525
475,000 Hasbro.......................................................... 14,725
600,000 Newell.......................................................... 15,525
150,000 Philip Morris................................................... 13,575
1,200,000 * Tomkins......................................................... 5,246
100,000 Unilever N.V. ADR............................................... 14,075
117,220
TOTAL CONSUMER NONDURABLES 421,428
- ------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 14.5%
- ------------------------------------------------------------------------------------------------------
GENERAL MERCHANDISERS -- 0.5%
485,000 Circuit City Stores............................................. 13,398
SPECIALTY MERCHANDISERS -- 2.0%
200,000 * adidas (144a) ADR............................................... 5,325
100,000 * adidas Ag....................................................... 5,263
200,000 * AutoZone........................................................ 5,775
200,000 Home Depot...................................................... 9,575
414,100 J. Baker........................................................ 2,304
100,100 * Kohl's.......................................................... 5,255
300,000 * Revco........................................................... 8,475
600,000 * Toys "R" Us..................................................... 13,050
55,022
ENTERTAINMENT AND LEISURE -- 4.2%
400,000 Disney.......................................................... 23,600
7,000,000 * Hutchison Whampoa (HKD)......................................... 42,638
269,900 Reader's Digest (Class A),
non-voting................................................... 13,833
218,100 Reader's Digest (Class B)....................................... 10,305
174,000 * Viacom (Class A)................................................ 7,982
395,444 * Viacom (Class B)................................................ 18,734
117,092
MEDIA AND COMMUNICATIONS -- 7.2%
200,000 Capital Cities/ABC.............................................. 24,675
2,000,000 Elsevier (NLG).................................................. 26,672
625,000 Gaylord Entertainment........................................... 17,344
1,400,000 * Granada (GBP)................................................... 14,024
325,000 * Kinnevik (SEK).................................................. 10,157
650,000 Time Warner..................................................... 24,619
100,000 Turner Broadcasting Systems
(Class B).................................................... 2,600
700,000 * United International Holdings
(Class A).................................................... 10,237
60,000 * VNU (NLG)....................................................... 8,237
2,600,000 Vodafone (GBP).................................................. 9,328
<CAPTION>
Value
----------
<C> <S> <C>
1,050,000 shs Vodafone ADR.................................................... $ 37,012
150,176 * Wolters Kluwer (NLG)............................................ 14,206
199,111
RESTAURANTS -- 0.6%
350,000 McDonald's...................................................... 15,794
TOTAL CONSUMER SERVICES 400,417
- ------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS -- 2.2%
- ------------------------------------------------------------------------------------------------------
AUTOMOBILES AND RELATED -- 0.5%
83,900 Ek Chor China Motorcycle........................................ 976
330,000 * Varity.......................................................... 12,251
13,227
BUILDING AND REAL ESTATE -- 0.8%
93,500 DeBartolo Realty, REIT.......................................... 1,215
700,000 + Starwood Lodging, REIT.......................................... 20,825
22,040
MISCELLANEOUS CONSUMER
DURABLES -- 0.9%
300,000 Corning......................................................... 9,600
250,000 Eastman Kodak................................................... 16,750
26,350
TOTAL CONSUMER CYCLICALS 61,617
- ------------------------------------------------------------------------------------------------------
TECHNOLOGY -- 7.2%
- ------------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS -- 2.6%
200,000 * Altera.......................................................... 9,937
150,000 AVX............................................................. 3,975
450,000 * Cirrus Logic.................................................... 8,916
300,000 Linear Technology............................................... 11,812
640,000 * Maxim Integrated Products....................................... 24,640
375,000 * Xilinx.......................................................... 11,391
70,671
ELECTRONIC SYSTEMS -- 0.4%
135,600 Hewlett-Packard................................................. 11,357
SPECIALIZED COMPUTER -- 0.3%
300,000 * Silicon Graphics................................................ 8,250
TELECOMMUNICATIONS -- 2.2%
124,300 * Cisco Systems................................................... 9,284
225,000 * DSC Communications.............................................. 8,325
480,000 LM Ericsson (Class B) ADR....................................... 9,360
350,000 * Mobile Telecommunication
Technologies................................................. 7,481
300,000 * PanAmSat........................................................ 6,638
38,000 Telecomunicacoes Brasilias
ADR.......................................................... 1,800
3,000,000 * Telmex (Class A) (MXN).......................................... 4,806
4,500,000 * Telmex (Class L) (MXN).......................................... 7,209
</TABLE>
9
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
----------
<C> <S> <C>
700,000 shs * Total Access Communication
(144a)....................................................... $ 4,550
59,453
AEROSPACE AND DEFENSE -- 1.7%
600,000 AlliedSignal.................................................... 28,500
250,000 Boeing.......................................................... 19,594
48,094
TOTAL TECHNOLOGY 197,825
- ------------------------------------------------------------------------------------------------------
CAPITAL EQUIPMENT -- 6.9%
- ------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT -- 3.6%
100,000 Emerson Electric................................................ 8,175
300,000 Exide........................................................... 13,763
1,000,000 GE.............................................................. 72,000
155,743 * Getronics (NLG)................................................. 7,279
101,217
MACHINERY -- 3.3%
1,000,000 Danaher......................................................... 31,750
100,000 Greenfield Industries........................................... 3,113
39,500 * Mannesmann (DEM)................................................ 12,576
9,300 * SIG Schweis..................................................... 19,430
307,500 Teleflex........................................................ 12,607
600,000 TriMas.......................................................... 11,325
90,801
TOTAL CAPITAL EQUIPMENT 192,018
- ------------------------------------------------------------------------------------------------------
BUSINESS SERVICES AND TRANSPORTATION -- 12.9%
- ------------------------------------------------------------------------------------------------------
COMPUTER SERVICE AND
SOFTWARE -- 8.7%
400,000 Adobe Systems................................................... 24,850
300,000 Automatic Data Processing....................................... 22,275
100,000 * Baan Company.................................................... 4,525
425,000 * BMC Software.................................................... 18,116
200,000 * BroadBand Technologies.......................................... 3,225
100,000 * Broderbund Software............................................. 6,088
550,000 * Ceridian........................................................ 22,687
300,000 * Cerner.......................................................... 6,150
94,200 * DST Systems..................................................... 2,685
300,000 * Electronic Arts................................................. 7,856
785,571 First Data...................................................... 52,535
484,000 * Intuit.......................................................... 37,812
150,000 * Microsoft....................................................... 13,172
350,000 * Oracle Systems.................................................. 14,831
187,200 * PLATINUM technology............................................. 3,452
240,259
MISCELLANEOUS BUSINESS
SERVICES -- 3.8%
40,000 * APAC TeleServices............................................... 1,335
350,000 Assa-Abloy (SEK)................................................ 3,268
400,000 Interpublic Group............................................... 17,350
<CAPTION>
Value
----------
<C> <S> <C>
176,400 shs Mutual Risk Management.......................................... $ 8,070
350,000 Olsten.......................................................... 13,825
202,500 Paychex......................................................... 10,062
600,000 Reuters ADR..................................................... 33,187
350,000 * Securitas (Class B) (SEK)....................................... 16,605
103,702
AIRLINES -- 0.4%
1,500,000 * Swire Pacific
(Class A) (HKD).............................................. 11,639
TOTAL BUSINESS SERVICES AND TRANSPORTATION 355,600
- ------------------------------------------------------------------------------------------------------
ENERGY -- 4.5%
- ------------------------------------------------------------------------------------------------------
ENERGY SERVICES -- 2.7%
452,000 * BJ Services..................................................... 13,108
238,800 Halliburton..................................................... 12,089
700,000 Schlumberger.................................................... 48,475
73,672
INTEGRATED PETROLEUM -
DOMESTIC -- 0.1%
200,000 Union Texas Petroleum........................................... 3,875
INTEGRATED PETROLEUM -
INTERNATIONAL -- 1.7%
325,000 Royal Dutch Petroleum ADR....................................... 45,866
TOTAL ENERGY 123,413
- ------------------------------------------------------------------------------------------------------
PROCESS INDUSTRIES -- 3.7%
- ------------------------------------------------------------------------------------------------------
SPECIALTY CHEMICALS -- 2.0%
200,000 A. Schulman..................................................... 4,475
700,000 Great Lakes Chemical............................................ 50,400
54,875
PAPER AND PAPER PRODUCTS -- 1.7%
400,000 Albany International
(Class A).................................................... 7,250
390,000 Kimberly-Clark.................................................. 32,272
510,000 * Kimberly-Clark Mexico
(Class A) (MXN).............................................. 7,695
47,217
TOTAL PROCESS INDUSTRIES 102,092
- ------------------------------------------------------------------------------------------------------
BASIC MATERIALS -- 0.8%
- ------------------------------------------------------------------------------------------------------
METALS -- 0.8%
36,700 * Ashanti Goldfields
(144a) GDR................................................... 727
325,000 Nucor........................................................... 18,566
105,000 Pohang Iron & Steel ADR......................................... 2,297
21,590
MISCELLANEOUS -- 0.0%
225,000 Cemex SA ADR.................................................... 1,582
TOTAL BASIC MATERIALS 23,172
</TABLE>
10
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
----------
<C> <S> <C>
- ------------------------------------------------------------------------------------------------------
MISCELLANEOUS -- 2.8%
- ------------------------------------------------------------------------------------------------------
CONGLOMERATES -- 2.7%
55,466 shs * AGAB (DEM)...................................................... $ 5,800
6,400 wts * AGAB Finance Bv (DEM)........................................... 7
1,970 shs * Berkshire Hathaway.............................................. 63,237
121,186 * Hagemeyer (NLG)................................................. 6,328
25,000 * Maculan (ATS)................................................... 484
75,856
MISCELLANEOUS -- 0.1%
35,000 * Hennes & Mauritz
(Class B).................................................... 1,950
TOTAL MISCELLANEOUS 77,806
TOTAL COMMON STOCKS & WARRANTS
(COST $1,573,395) 2,530,187
- ------------------------------------------------------------------------------------------------------
Preferred Stocks -- 0.4%
- ------------------------------------------------------------------------------------------------------
1,066,289,693 * Banco Bradesco (BRL)............................................ 9,324
591 * Deutsche Bank, 8.75%,
participating certificates
(DEM)........................................................ 470
357 Deutsche Bank, 9.00%,
participating certificates
(DEM)........................................................ 290
55,966,400 * Lojas Americanas (BRL).......................................... 1,313
35,000 * Maculan (ATS)................................................... 653
TOTAL PREFERRED STOCKS (COST $10,910) 12,050
- ------------------------------------------------------------------------------------------------------
Convertible Preferred Stocks -- 0.0%
- ------------------------------------------------------------------------------------------------------
229 * Comptronix, 6.00%,
Series A..................................................... 1
TOTAL CONVERTIBLE PREFERRED STOCKS (COST $0) 1
- ------------------------------------------------------------------------------------------------------
Convertible Bonds -- 0.1%
- ------------------------------------------------------------------------------------------------------
$ 2,000,000 * Reliance Industries,
3.50%, 11/3/99............................................... 2,010
TOTAL CONVERTIBLE BONDS (COST $2,075) 2,010
- ------------------------------------------------------------------------------------------------------
Corporate Bonds -- 0.0%
- ------------------------------------------------------------------------------------------------------
1,600,000 DEM AB, 8.875%, 4/9/96.............................................. 1,126
TOTAL CORPORATE BONDS (COST $929) 1,126
<CAPTION>
Value
----------
<C> <S> <C>
- ------------------------------------------------------------------------------------------------------
Short-Term Investments -- 7.4%
- ------------------------------------------------------------------------------------------------------
BANK NOTES -- 0.7%
$10,000,000 Comerica Bank, 6.18%,
5/28/96...................................................... $ 10,021
10,000,000 NBD Bank, N.A., 6.125%,
6/3/96....................................................... 10,022
20,043
COMMERCIAL PAPER -- 6.3%
10,000,000 Ameritech, 5.58%, 2/9/96........................................ 9,930
10,000,000 Asset Securitization Cooperative,
5.70%, 1/24/96............................................... 9,857
10,000,000 AT&T, 5.53%, 3/8/96............................................. 9,888
11,000,000 Becton Dickinson,
5.80%, 1/18/96............................................... 10,938
10,000,000 Bell Atlantic Network Funding,
5.50%, 2/23/96............................................... 9,914
10,000,000 Cargill Global Funding,
5.47%, 3/19/96............................................... 9,863
10,000,000 Chemical Banking,
5.72%, 1/31/96............................................... 9,854
10,000,000 Ciesco L.P., 4(2),
5.53%, 2/27/96............................................... 9,895
10,000,000 Falcon Asset Securitization,
5.75%, 1/18/96............................................... 9,909
10,000,000 Ford Motor Credit,
5.76%, 1/25/96............................................... 9,930
10,000,000 Great Lakes Chemical,
5.65%, 1/23/96............................................... 9,947
4,247,651 Investments in Commercial Paper
through a joint account,
5.90-6.05%, 1/2/96........................................... 4,245
10,000,000 Metlife Funding,
5.66%, 2/7/96................................................ 9,901
10,000,000 Norfolk Southern, 4(2),
5.55%, 2/8/96................................................ 9,923
10,000,000 PHH, 5.76%, 1/9/96.............................................. 9,944
10,000,000 Preferred Receivables Funding,
5.73%, 1/22/96............................................... 9,900
10,000,000 Raytheon, 4(2), 5.92%, 1/4/96................................... 9,967
10,000,000 U.S. Bancorp, 5.55%, 2/23/96.................................... 9,914
173,719
MEDIUM-TERM NOTES -- 0.4%
10,000,000 Wells Fargo, VR,
5.8125%, 9/16/96............................................. 9,997
TOTAL SHORT-TERM INVESTMENTS (COST $203,759) 203,759
</TABLE>
11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
----------
<S> <C>
- ------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 99.5% OF
NET ASSETS (COST $1,791,068) $2,749,133
- ------------------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES.......................................................... 12,695
<CAPTION>
NET ASSETS CONSIST OF: Value
----------
<S> <C> <C>
Accumulated net investment
income - net of distributions.................................. $ 582
Accumulated net realized gain/loss
- net of distributions......................................... 54,160
Net unrealized gain (loss)........................................ 958,070
Paid-in-capital applicable to
118,266,470 shares of $1.00 par
value capital stock outstanding;
200,000,000 shares authorized.................................. 1,749,016
----------
NET ASSETS........................................................ $2,761,828
==========
NET ASSET VALUE PER SHARE......................................... $23.35
======
- ------------------------------------------------------------------------------------------------------
</TABLE>
+ Affiliated company
* Non-income producing
# Securities contain some restrictions as to public resale--total of such
securities at year-end amounts to 1.16% of net assets.
REIT Real Estate Investment Trust
VR Variable rate
4(2) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under section 4.2 of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or other
"accredited investors."
144a Security was purchased pursuant to Rule 144a under the Securities Act of
1933 and may not be resold subject to that rule except to qualified
institutional buyers -- total of such securities at year-end amounts to
.38% of net assets.
ATS Austrian schilling
BRL Brazilian real
CAD Canadian dollar
CHF Swiss franc
DEM German deutschemark
FRF French franc
GBP British sterling
HKD Hong Kong dollar
IDR Indonesian rupia
ITL Italian lira
KRW S. Korean won
MXN Mexican peso
MYR Malaysian ringgit
NLG Dutch guilder
SEK Swedish krona
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations
- --------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund / Year Ended December 31, 1995
(in thousands)
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividend.......................................................................... $ 34,754
Interest.......................................................................... 10,868
--------
Total income...................................................................... 45,622
--------
Expenses
Investment management............................................................. 14,222
Shareholder servicing............................................................. 4,151
Custody and accounting............................................................ 427
Prospectus and shareholder reports................................................ 258
Registration...................................................................... 50
Directors......................................................................... 44
Legal and audit................................................................... 40
Miscellaneous..................................................................... 37
--------
Total expenses.................................................................... 19,229
--------
Net investment income................................................................ 26,393
--------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities........................................................................ 134,717
Foreign currency transactions..................................................... (137)
--------
Net realized gain (loss).......................................................... 134,580
--------
Change in net unrealized gain or loss on:
Securities........................................................................ 486,934
Other assets and liabilities denominated in foreign currencies.................... 3
--------
Change in net unrealized gain or loss............................................. 486,937
--------
Net realized and unrealized gain (loss).............................................. 621,517
--------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS.................................... $647,910
========
- ---------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund
(in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1995 1994
---------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income............................................................... $ 26,393 $ 18,277
Net realized gain (loss)............................................................ 134,580 193,195
Change in net unrealized gain or loss............................................... 486,937 (195,749)
---------- ----------
Increase (decrease) in net assets from operations................................... 647,910 15,723
---------- ----------
Distributions to shareholders
Net investment income............................................................... (25,931) (18,157)
Net realized gain................................................................... (109,405) (167,419)
---------- ----------
Decrease in net assets from distributions........................................... (135,336) (185,576)
---------- ----------
Capital share transactions*
Shares sold......................................................................... 343,600 316,804
Distributions reinvested............................................................ 128,459 175,609
Shares redeemed..................................................................... (290,325) (230,594)
---------- ----------
Increase (decrease) in net assets from capital share transactions................... 181,734 261,819
---------- ----------
Increase (decrease) in net assets...................................................... 694,308 91,966
NET ASSETS
Beginning of period.................................................................... 2,067,520 1,975,554
---------- ----------
End of period.......................................................................... $2,761,828 $2,067,520
========== ==========
- ------------------------------------------------------------------------------------------------------------------------
* Share information
Shares sold......................................................................... 16,103 15,480
Distributions reinvested............................................................ 5,530 9,421
Shares redeemed..................................................................... (13,638) (11,357)
---------- ----------
Increase (decrease) in shares outstanding........................................... 7,995 13,544
========== ==========
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
- --------------------------------------------------------------------------------
Notes To Financial Statements
- --------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund / December 31, 1995
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Growth Stock Fund (the fund) is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
A) Valuation - Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price at the time the valuations
are made. A security which is listed or traded on more than one exchange is
valued at the quotation on the exchange determined to be the primary market for
such security. Listed securities that are not traded on a particular day and
securities that are regularly traded in the over-the-counter market are valued
at the mean of the latest bid and asked prices. Other equity securities are
valued at a price within the limits of the latest bid and asked prices deemed by
the Board of Directors, or by persons delegated by the Board, best to reflect
fair value.
Debt securities are generally traded in the over-the-counter market and are
valued at a price deemed best to reflect fair value as quoted by dealers who
make markets in these securities or by an independent pricing service. Short-
term debt securities are valued at their cost which, when combined with accrued
interest, approximates fair value.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
B) Currency Translation - Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such transactions.
The effect of changes in foreign exchange rates on realized and unrealized
security gains and losses is reflected as a component of such gains and losses.
C) Other - Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
accepted accounting principles.
NOTE 2 - INVESTMENT TRANSACTIONS
A) Commercial Paper Joint Account - The fund, and other affiliated funds, may
transfer uninvested cash into a commercial paper joint account, the daily
aggregate balance of which is invested in high-grade commercial paper. All
securities purchased by the joint account satisfy the fund's criteria as to
quality, yield, and liquidity.
B) Other - Purchases and sales of portfolio securities, other than short-term
securities, aggregated $976,582,000 and $950,725,000, respectively, for the year
ended December 31, 1995.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of its
taxable income.
At December 31, 1995, the aggregate cost of investments for federal income
tax and financial reporting purposes was $1,791,068,000 and net unrealized gain
aggregated $958,065,000, of which $992,639,000 related to appreciated
investments and $34,574,000 to depreciated investments.
15
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the Manager) provides for an annual investment management fee,
of which $1,356,000 was payable at December 31, 1995. The fee is computed daily
and paid monthly, and consists of an Individual Fund Fee equal to 0.25% of
average daily net assets and a Group Fee. The Group Fee is based on the combined
assets of certain mutual funds sponsored by the Manager or Rowe Price-Fleming
International, Inc. (the Group). The Group Fee rate ranges from 0.48% for the
first $1 billion of assets to 0.31% for assets in excess of $34 billion. At
December 31, 1995, and for the year then ended, the effective annual Group Fee
rate was 0.34%. The fund pays a pro rata share of the Group Fee based on the
ratio of its net assets to those of the Group.
In addition, the fund has entered into agreements with the Manager and two
wholly owned subsidiaries of the Manager, pursuant to which the fund receives
certain other services. The Manager computes the daily share price and maintains
the financial records of the fund. T. Rowe Price Services, Inc. (TRPS), is the
fund's transfer and dividend disbursing agent and provides shareholder and
administrative services to the fund. T. Rowe Price Retirement Plan Services,
Inc., provides subaccounting and recordkeeping services for certain retirement
accounts invested in the fund. Additionally, the fund is one of several T. Rowe
Price mutual funds (the Underlying Funds) in which the T. Rowe Price Spectrum
Growth Fund (Spectrum) invests. In accordance with an Agreement among Spectrum,
the Underlying Funds, the Manager, and TRPS, expenses from the operation of
Spectrum are borne by the Underlying Funds based on each Underlying Fund's
proportionate share of assets owned by Spectrum. The fund incurred expenses
pursuant to these related party agreements totaling approximately $3,733,000 for
the year ended December 31, 1995, of which $383,000 was payable at period-end.
During the year ended December 31, 1995, the fund, in the ordinary course
of business, paid commissions of $130,000 to, and placed security purchase and
sale orders aggregating $21,077,000 with, certain affiliates of the Manager in
connection with the execution of various portfolio transactions.
16
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund
<TABLE>
<CAPTION>
For a share outstanding throughout each period
--------------------------------------------------------------
Year Ended December 31,
--------------------------------------------------------------
1995 1994 1993 1992 1991
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............. $18.75 $20.42 $18.66 $18.75 $14.71
------ ------ ------ ------ ------
Investment Activities
Net investment income.......................... 0.23 0.18 0.17 0.18 0.24
Net realized and unrealized gain (loss)........ 5.57 (0.01) 2.72 0.94 4.67
------ ------ ------ ------ ------
Total from Investment Activities............... 5.80 0.17 2.89 1.12 4.91
------ ------ ------ ------ ------
Distributions
Net investment income.......................... (0.23) (0.18) (0.14) (0.18) (0.25)
Net realized gain.............................. (0.97) (1.66) (0.99) (1.03) (0.62)
------ ------ ------ ------ ------
Total Distributions............................ (1.20) (1.84) (1.13) (1.21) (0.87)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD.................... $23.35 $18.75 $20.42 $18.66 $18.75
====== ====== ====== ====== ======
- ---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Total Return...................................... 31.0% 0.9% 15.6% 6.0% 33.8%
Ratio of Expenses to Average Net Assets........... 0.80% 0.81% 0.82% 0.83% 0.85%
Ratio of Net Investment Income
to Average Net Assets.......................... 1.09% 0.91% 0.86% 0.94% 1.40%
Portfolio Turnover Rate........................... 42.5% 54.0% 35.3% 27.4% 31.8%
Net Assets, End of period (in thousands).......... $2,761,828 $2,067,520 $1,975,554 $1,946,250 $1,846,016
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
- --------------------------------------------------------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
T. Rowe Price Growth Stock Fund, Inc.
We have audited the accompanying statement of net assets of T. Rowe Price
Growth Stock Fund, Inc. as of December 31, 1995, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
December 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights, referred
to above, present fairly, in all material respects, the financial position of
T. Rowe Price Growth Stock Fund, Inc. as of December 31, 1995, the results of
its operations, the changes in its net assets and financial highlights for
each of the respective periods stated in the first paragraph in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
January 18, 1996
18
<PAGE>
- --------------------------------------------------------------------------------
Shareholder Services
- --------------------------------------------------------------------------------
To help shareholders monitor their current investments and make decisions that
accurately reflect their financial goals, T. Rowe Price offers a wide variety of
information and services--at no extra cost.
KNOWLEDGEABLE SERVICE REPRESENTATIVES
BY PHONE--Shareholder service representatives are available from 8:00 a.m. to
10:00 p.m., Monday - Friday, and weekends from 8:30 a.m. to 5 p.m ET. Call
1-800-225-5132 to speak directly with a representative who will be able to
assist you with your accounts.
IN PERSON--Visit one of our investor center locations to meet with a
representative who will be able to assist you with your accounts. While there,
you can drop off applications or obtain prospectuses and other literature.
AUTOMATED 24-HOUR SERVICES
Tele*Access(R) (1-800-638-2587) provides information such as account
balance, date and amount of your last transaction, latest dividend payment, and
fund prices and yields. Additionally, you have the ability to request
prospectuses, statements, account and tax forms; reorder checks; and initiate
purchase, redemption, and exchange orders for identically registered accounts.
PC*Access(R) provides the same information as Tele*Access, but on a
personal computer via dial-up modem.
ACCOUNT SERVICES
Checking--Write checks for $500 or more on any money market and most bond
fund accounts (except the High Yield Fund and Emerging Markets Bond Fund).
Automatic Investing--Build your account over time by investing directly
from your bank account or paycheck with Automatic Asset Builder. Additionally,
Automatic Exchange enables you to set up systematic investments from one fund
account into another, such as from a money fund into a stock fund. A low, $50
minimum makes it easy to get started.
Automatic Withdrawal--If you need money from your fund account on a regular
basis, you can establish scheduled, automatic redemptions.
Dividend and Capital Gains Payment Options--Reinvest all or some of your
distributions, or take them in cash. We give you maximum flexibility and
convenience.
INVESTMENT INFORMATION
Combined Statement--A comprehensive overview of your T. Rowe Price
accounts. The summary page gives your earnings by tax category, provides total
portfolio value, and lists your investments by type--stock, bond, and money
market. Detail pages itemize account transactions by fund.
Shareholder Reports--Portfolio managers review the performance of the funds
in plain language and discuss T. Rowe Price's economic outlook.
The T. Rowe Price Report--A quarterly newsletter with relevant articles on
market trends, personal financial planning, and T. Rowe Price's economic
perspective.
Performance Update--A quarterly report reviewing recent market developments
and providing comprehensive performance information for every T. Rowe Price
fund.
Insights--A library of information that includes reports on mutual fund tax
issues, investment strategies, and financial markets.
Detailed Investment Guides--Our widely acclaimed Asset Mix Worksheet,
College Planning Kit, Retirees Financial Guide, Retirement Planning Kit (also
available on disk for PC use), and Guide to Risk-Adjusted Performance can help
you determine and reach your investment goals.
DISCOUNT BROKERAGE
You can trade stocks, bonds, options, precious metals, and other securities at a
substantial savings over regular commission rates. Call a shareholder service
representative for more information.
19
<PAGE>
- --------------------------------------------------------------------------------
ANNUAL REPORT
- --------------------------------------------------------------------------------
T. Rowe Price
- -------------
GROWTH STOCK FUND
DECEMBER 31, 1995
[LOGO APPEARS HERE]
FOR YIELD, PRICE, LAST TRANSACTION,
AND CURRENT BALANCE, 24 HOURS,
7 DAYS A WEEK, CALL:
1-800-638-2587 toll free
625-7676 Baltimore area
FOR ASSISTANCE WITH YOUR EXISTING
FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
T. ROWE PRICE
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus of the T. Rowe Price Growth Stock
Fund/(R)/.
Invest With Confidence/(R)/ [LOGO APPEARS HERE]
T. Rowe Price
GSF
