<PAGE> PAGE 1
000 A000000 05/31/96
000 C000000 0000858998
000 D000000 N
000 E000000 NF
000 F000000 Y
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000 I000000 3.0
000 J000000 A
001 A000000 THE GROWTH FUND OF SPAIN, INC.
001 B000000 811-6022
001 C000000 3127811121
002 A000000 120 SOUTH LASALLE STREET
002 B000000 CHICAGO
002 C000000 IL
002 D010000 60603
003 000000 N
004 000000 N
005 000000 N
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007 A000000 N
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007 C010300 3
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007 C010600 6
007 C010700 7
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007 C011000 10
008 A000001 ZURICH KEMPER INVESTMENTS, INC.
008 B000001 A
008 C000001 801-6634
008 D010001 CHICAGO
008 D020001 IL
008 D030001 60603
008 A000002 BSN GESTION DE PATRIMONIOS, S.A., S.G.C.
008 B000002 S
008 C000002 801-36291
008 D010002 MADRID
008 D050002 SPAIN
008 D060002 23006
012 A000001 KEMPER SERVICE COMPANY
012 B000001 84-1713
012 C010001 KANSAS CITY
012 C020001 MO
012 C030001 64105
013 A000001 ERNST & YOUNG LLP
013 B010001 CHICAGO
<PAGE> PAGE 2
013 B020001 IL
013 B030001 60606
014 A000001 KEMPER DISTRIBUTORS, INC.
014 B000001 8-47765
014 A000002 GRUNTAL SECURITIES, INC.
014 B000002 8-31022
014 A000003 THE GMS GROUP, INC.
014 B000003 8-23936
015 A000001 INVESTORS FIDUCIARY TRUST COMPANY
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<PAGE> PAGE 3
020 B000008 FOREIGN
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022 A000001 BANCO EX
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022 C000001 223186
022 D000001 224284
022 A000002 J.P. MORGAN SECURITIES INC.
022 B000002 13-3224016
022 C000002 186822
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022 A000003 CAIXA CATALUNYA
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 8
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SIGNATURE JEROME L. DUFFY
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1996
SEMI-ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000858998
<NAME> GROWTH FUND OF SPAIN, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> MAY-31-1996
<INVESTMENTS-AT-COST> 189,954
<INVESTMENTS-AT-VALUE> 227,430
<RECEIVABLES> 352
<ASSETS-OTHER> 7,230
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 235,012
<PAYABLE-FOR-SECURITIES> 586
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 257
<TOTAL-LIABILITIES> 843
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 189,532
<SHARES-COMMON-STOCK> 17,022
<SHARES-COMMON-PRIOR> 17,099
<ACCUMULATED-NII-CURRENT> 2,536
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,662
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 37,439
<NET-ASSETS> 234,169
<DIVIDEND-INCOME> 2,799
<INTEREST-INCOME> 1,369
<OTHER-INCOME> 0
<EXPENSES-NET> (1,490)
<NET-INVESTMENT-INCOME> 2,678
<REALIZED-GAINS-CURRENT> 5,623
<APPREC-INCREASE-CURRENT> 10,819
<NET-CHANGE-FROM-OPS> 19,120
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7,157)
<DISTRIBUTIONS-OF-GAINS> (4,942)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> (77)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 6,172
<ACCUMULATED-NII-PRIOR> 7,015
<ACCUMULATED-GAINS-PRIOR> 3,981
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,148
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,490
<AVERAGE-NET-ASSETS> 230,309
<PER-SHARE-NAV-BEGIN> 13.33
<PER-SHARE-NII> .16
<PER-SHARE-GAIN-APPREC> .98
<PER-SHARE-DIVIDEND> (.42)
<PER-SHARE-DISTRIBUTIONS> (.29)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.76
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Exhibit 77C
The Growth Fund of Spain, Inc.
Form N-SAR for the period ended 05/31/96
File No. 811-6022
A special meeting of Registrant's shareholders was held on May
29, 1996. Votes regarding the items submitted to shareholder
vote are set forth below.
Item 1: Election of Members to the Board
Arthur R. Gottschalk
Vote Number
---- -----------
FOR 11,520,280
WITHHELD 1,681,966
Dominique P. Morax
Vote Number
---- -----------
FOR 11,466,151
WITHHELD 1,736,095
Stephen B. Timbers
Vote Number
---- -----------
FOR 11,460,870
WITHHELD 1,741,376
John G. Weithers
Vote Number
---- -----------
FOR 11,520,280
WITHHELD 1,681,966
Item 2: Selection of Independent Auditors
Vote Number
---- -----------
FOR 12,793,945
AGAINST 234,784
ABSTAIN 173,517
Item 3: Conversion of the Fund from a Closed-End Investment
Company to an Open-End Investment Company
Vote Number
---- -----------
FOR 5,206,907
AGAINST 2,364,803
ABSTAIN 163,304
Item 4: Shareholder Proposal to recommend that the Board
approve and submit to shareholders for approval at the
earliest practical date, a fundamental policy requiring
the Fund to make periodic offers to repurchase its
shares
Vote Number
---- -----------
FOR 4,664,385
AGAINST 2,769,964
ABSTAIN 300,666
LKW|W:\FUNDS\NSAR.EXH\GSP\GSP-596.77C|061396
Exhibit 77Q1(e)
The Growth Fund of Spain, Inc.
Form N-SAR for the period ended 05/31/96
File No. 811-6022
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 4th day of January, 1996, by and between THE
GROWTH FUND OF SPAIN, INC., a Maryland corporation (the "Fund"),
and KEMPER FINANCIAL SERVICES, INC., a Delaware corporation (the
"Adviser").
WHEREAS, the Fund is a closed-end management investment company
registered under the Investment Company Act of 1940, the shares
of common stock, ("Shares") of which are registered under the
Securities Act of 1933; and
WHEREAS, the Fund desires to retain the Adviser to render
investment advisory and management services, and the Adviser is
willing to render such services;
NOW THEREFORE, in consideration of the mutual covenants
hereinafter contained, it is hereby agreed by and between the
parties hereto as follows:
1. The Fund hereby employs the Adviser to act as the investment
adviser and to manage the investment and reinvestment of the
assets in accordance with the Fund's investment objectives and
policies and limitations, and to administer its affairs to the
extent requested by and subject to the supervision of the Board
of Directors of the Fund for the period and upon the terms herein
set forth. The investment of funds shall be subject to all
applicable restrictions of the Articles of Incorporation and
By-Laws of the Fund as may from time to time be in force.
The Adviser accepts such employment and agrees during such period
to render such services, to furnish office facilities and
equipment and clerical, bookkeeping and certain administrative
services for the Fund, to permit any of its officers or employees
to serve without compensation as directors or officers of the
Fund if elected to such positions and to assume the obligations
herein set forth for the compensation herein provided. The
Adviser shall for all purposes herein provided be deemed to be an
independent contractor and, unless otherwise expressly provided
or authorized, shall have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the Fund.
It is understood and agreed that the Adviser, by separate
agreements with the Fund, may also serve the Fund in other
capacities.
2. For the services and facilities described in Section 1, the
Fund will pay to the Adviser at the end of each calendar month,
an investment management fee computed at an annual rate of 1.00
of 1% of the average weekly net assets. For the month and year
in which this Agreement becomes effective or terminates, there
shall be an appropriate proration on the basis of the number of
days that the Agreement is in effect during the month and year,
respectively.
3. The services of the Adviser to the Fund under this Agreement
are not to be deemed exclusive, and the Adviser shall be free to
render similar services or other services to others so long as
its services hereunder are not impaired thereby.
4. In addition to the fee of the Adviser, the Fund shall assume
and pay any expenses for services rendered by a custodian for the
safekeeping of the Fund's securities or other property, for
keeping its books of account, for any other charges of the
custodian, and for calculating the net asset value of the Fund as
provided in the prospectus of the Fund. The Adviser shall not be
required to pay and the Fund shall assume and pay the charges and
expenses of its operations, including compensation of the
directors (other than those affiliated with the Adviser), charges
and expenses of independent auditors, of legal counsel, of any
transfer or dividend disbursing agent, any registrar of the Fund,
costs of acquiring and disposing of portfolio securities,
interest, if any, on obligations incurred by the Fund, costs of
share certificates and of reports, membership dues in the
Investment Company Institute or any similar organization, reports
and notices to shareholders, other like miscellaneous expenses
and all taxes and fees payable to federal, state or other
governmental agencies on account of the registration of
securities issued by the Fund, filing of trust documents or
otherwise. The Fund shall not pay or incur any obligation for
any expenses for which the Fund intends to seek reimbursement
from the Adviser as herein provided without first obtaining the
written approval of the Adviser. The Adviser shall arrange, if
desired by the Fund, for officers or employees of the Adviser to
serve, without compensation from the Fund, as directors, officers
or agents of the Fund if duly elected or appointed to such
positions and subject to their individual consent and to any
limitations imposed by law.
The net asset value of the Fund shall be calculated in accordance
with the provisions of the Fund's prospectus or at such other
time or times as the directors may determine in accordance with
the provisions of the Investment Company Act of 1940. On each
day when net asset value is not calculated, the net asset value
shall be deemed to be the net asset value as of the close of
business on the last day on which such calculation was made for
the purpose of the foregoing computations.
5. Subject to applicable statutes and regulations, it is
understood that directors, officers or agents of the Fund are or
may be interested in the Adviser as officers, directors, agents,
shareholders or otherwise, and that the officers, directors,
shareholders and agents of the Adviser may be interested in the
Fund otherwise than as a director, officer or agent.
6. The Adviser shall not be liable for any error of judgment or
of law or for any loss suffered by the Fund in connection with
the matters to which this Agreement relates, except loss
resulting from willful misfeasance, bad faith or gross negligence
on the part of the Adviser in the performance of its obligations
and duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
7. This Agreement shall become effective on the date hereof and
shall remain in full force until April 1, 1996, unless sooner
terminated as hereinafter provided. This Agreement shall
continue in force from year to year thereafter, but only as long
as such continuance is specifically approved at least annually in
the manner required by the Investment Company Act of 1940 and the
rules and regulations thereunder; provided, however, that if the
continuation of this Agreement is not approved, the Adviser may
continue to serve in such capacity in the manner and to the
extent permitted by the Investment Company Act of 1940 and the
rules and regulations thereunder.
This Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment
of any penalty by the Fund or by the Adviser on sixty (60) days
written notice to the other party. The Fund may effect
termination by action of the Board of Directors, or by vote of a
majority of the outstanding voting securities.
This Agreement may be terminated at any time without the payment
of any penalty by the Board of Directors, or by vote of a
majority of the outstanding voting securities in the event that
it shall have been established by a court of competent
jurisdiction that the Adviser or any officer or director of the
Adviser has taken any action which results in a breach of the
covenants of the Adviser set forth herein.
The terms "assignment" and "vote" of a majority of the
outstanding voting securities shall have the meanings set forth
in the Investment Company Act of 1940 and the rules and
regulations thereunder.
Termination of this Agreement shall not affect the right of the
Adviser to receive payments on any unpaid balance of the
compensation described in Section 2 earned prior to such
termination.
8. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
9. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
10. The Adviser may delegate or subcontract some or all of its
duties hereunder to a sub-adviser subject to the approval of the
Board of Directors of the Fund and the requirements of the
Investment Company Act of 1940. In such event, the Adviser will
be responsible for the payment of any compensation of any such
sub-adviser.
11. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Illinois.
12. This Agreement is the entire contract between the parties
relating to the subject matter hereof and supersedes all prior
agreements between the parties relating to the subject matter
hereof.
IN WITNESS WHEREOF, the Fund and the Adviser have caused
this Agreement to be executed as of the day and year first above
written.
THE GROWTH FUND OF SPAIN, INC.
By: /s/ John E. Peters
----------------------------
Title: Vice President
ATTEST:
By: Philip J. Collora
----------------------------
Title: Secretary
KEMPER FINANCIAL SERVICES, INC.
By: /s/ Patrick Dudasik
----------------------------
Title: Senior Vice President
ATTEST:
By: /s/ David F. Dierenfeldt
----------------------------
Title: Assistant Secretary
MRB|W:\FUNDS\NSAR.EXH\GSP-596.77Q|041196
