<PAGE>
February 8, 1996
Dear Shareholder:
We are pleased to report that the net asset value of your shares of the
Hilliard Lyons Growth Fund increased, including income, by 31.1% in 1995.
Though we did not succeed in surpassing the Standard & Poor's 500 Index which
appreciated by 37.6% for the year, including income, our absolute return far
exceeded our long term goal of mid-teens annual growth. In the fourth quarter
the Hilliard Lyons Growth Fund appreciated 6.7% compared to 6.0% for the S&P
500 Index. A more detailed review of what shaped our results for 1995 appears
below.
Unless you are a very new shareholder of the Fund, you received a letter from
us in early January notifying you of our intention to seek shareholder approval
to change the Fund's regulatory status from diversified to non-diversified. We
believe such a change is important to provide portfolio flexibility more
suitable to our investment style. Our "bottom-up" approach to investing
emphasizes individual stock selection, an approach which lends itself to more
concentrated positions. We have considered this proposal carefully and believe
the change would be significant and positive for shareholders. Such a change is
considered fundamental and is therefore subject to shareholder vote. In March,
you will receive proxy material which will describe the ways in which the
change may affect the Fund's portfolio. Also, with the proxy material we will
present in detail our reasons for proposing the conversion.
1995
The appreciation in the Fund's portfolio of over 30% was driven in great part
by earnings gains by portfolio companies. Further appreciation was the result
of sharply declining long-term interest rates which often have the effect of
increasing P/E ratios. A generally stable economic climate and increasing
public enthusiasm for investing in common stocks through mutual funds were also
factors which played an important part in the substantial gains in 1995, the
third biggest year of market equity appreciation in the last fifty.
The Hilliard Lyons Growth Fund participated in the stock market rally
primarily through its concentration in financial stocks and in the strong
performance of two of its larger holdings, Johnson & Johnson and Walgreen.
These companies made significant earnings progress, in most cases greater than
we had expected. The rest of the portfolio produced more varied economic and
stock market performance, but on balance achieved good absolute gains in market
value, though below those of the S&P 500 Index.
1996 AND BEYOND
Many people fear that after such a substantial advance the stock market must
pause or retrace some of its gains. In our view, it is not logical to assume
that one fine year necessarily begets a poor year. History suggests this is not
the case either. It is, however, important to test valuations with extra
scrutiny after such a powerful advance. Some statistics lend perspective.
Though 1995 was undoubtedly an extraordinary year, the 1990s have produced
average returns of 13.1%, not far above the stock market long-term average
return of 10% to 11%. The P/E ratio of the Standard & Poor's 500 finished 1995
at 17, compared to the long term average of 13.5. This 25% premium presents
some cause for concern but must be examined in light of the lowest interest
rates and inflation that we have seen since the early 70's.
There are factors which suggest that intense optimism is reflected in today's
stock prices. Corporate directors are paying out the lowest percentage of
earnings in dividends in the last fifty years, suggesting confidence that the
profits derived from the investment of retained earnings will result in stock
appreciation. Equity mutual funds have become enormously popular with $112.1
billion flowing into funds in the first 11
<PAGE>
months of 1995. Perhaps most worrisome is the fourth quarter surge in initial
public offerings to a record $12.6 billion. The public's appetite for untested
companies is often most voracious at stock market peaks.
Despite ebullient signs all around, we feel comfortable with the Fund's
holdings and think that sufficient opportunities will appear to keep the Fund
substantially invested. Our optimism arises from the conviction that the course
of a company's earnings will determine the course of its stock price. Our
analysis has led us to conclude that the business prospects of our companies
are strong. The impediment that lavish market prices impose on near term market
appreciation is not great enough to entice us to give up ownership in
outstanding enterprises. But if we have another 30% up year . . . we hope to
have such a dilemma.
We appreciate the loyalty of our shareholders and are pleased that the Fund
did well this past year. We are proceeding in 1996 with optimism and
enthusiasm, seeking to discover extraordinary investments for the Fund.
Sincerely,
/s/ Donald F. Kohler /s/ Samuel C. Harvey
DONALD F. KOHLER SAMUEL C. HARVEY
Chairman President
Comparison of Change in Value of $10,000 Investment on
HILLIARD LYONS GROWTH FUND, INC. AND THE S&P 500
February 1, 1992 through December 31, 1995
<TABLE>
[GRAPH APPEARS HERE]
<CAPTION>
Measurement Period GROWTH
(Fiscal Year Covered) FUND S&P 500
- ------------------- ---------- ---------
<S> <C> <C>
Measurement Pt-1991 $ 9,525 $10,000
FYE 12/31/92* $10,185 $10,966
FYE 12/31/93 $10,606 $12,071
FYE 12/31/94 $10,882 $12,230
FYE 12/31/95 $14,269 $16,826
</TABLE>
Past performance is not predictive of future performance.
* Annualized for the period 2-1-92 through 12-31-92.
AVERAGE ANNUAL TOTAL RETURN*
- ----------------------------
1 Year Since Inception
- ----------------------------
24.87% 9.29%
- ----------------------------
* Returns have been reduced
by the maximun sales charge
of 4.75%.
2
<PAGE>
HILLIARD LYONS GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
COMMON STOCKS -- 84.5%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Company Cost Value
------ ------- ---- ------
BASIC INDUSTRY -- 3.6%
----------------------------------------------------------------------
<C> <S> <C> <C>
27,700 Nalco Chemical Co. ............................ $ 910,845 $ 834,462
7,350 Sonoco Products Co. ........................... 136,910 192,938
---------- ----------
1,047,755 1,027,400
CAPITAL GOODS -- 12.2%
----------------------------------------------------------------------
26,000 Dover Corp. ................................... 630,550 958,750
14,000 General Electric Co. .......................... 565,278 1,008,000
8,400 Hubbell Inc. CL B ............................. 408,960 552,300
4,000 Minnesota Mining & Manufacturing Co. .......... 186,952 265,000
12,000 Nordson Corp. ................................. 664,500 675,000
---------- ----------
2,456,240 3,459,050
CONSUMER NON-DURABLE -- 13.7%
----------------------------------------------------------------------
25,500* Bush Boake Allen Inc. ......................... 708,904 698,062
8,000 CPC International Inc. ........................ 339,924 549,000
14,000 International Flavors & Fragrances ............ 477,681 672,000
24,000 PepsiCo Inc. .................................. 886,525 1,341,000
7,500 Procter & Gamble Co. .......................... 365,983 622,500
---------- ----------
2,779,017 3,882,562
FINANCIAL -- 29.4%
----------------------------------------------------------------------
18,000 American International Group Inc. ............. 869,512 1,665,000
23* Berkshire Hathaway Inc. ....................... 208,980 738,300
22,000 Cincinnati Financial Corp. .................... 1,148,724 1,435,500
12,000 Federal Home Loan Mortgage Corp. .............. 554,652 1,002,000
16,000 Fifth Third Bancorp ........................... 816,000 1,172,000
51,500 Synovus Financial Corp. ....................... 983,277 1,467,750
18,000 Wachovia Corp. ................................ 655,830 823,500
---------- ----------
5,236,975 8,304,050
</TABLE>
See notes to financial statements.
3
<PAGE>
HILLIARD LYONS GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Market
Shares Company Cost Value
------ ------- ---- ------
HEALTH CARE -- 11.0%
----------------------------------------------------------------------
<C> <S> <C> <C>
38,500 Allergan Inc. ................................. 926,295 1,251,250
21,500 Johnson & Johnson.............................. 919,321 1,840,938
----------- ----------
1,845,616 3,092,188
RETAIL & SERVICES -- 13.4%
----------------------------------------------------------------------
16,500 Brady WH Co. CL A.............................. 270,375 445,500
12,000 Gannett Inc. .................................. 654,720 736,500
20,000 May Department Stores Co. ..................... 622,663 845,000
59,000 Walgreen Co. .................................. 1,074,435 1,762,625
----------- ----------
2,622,193 3,789,625
TECHNOLOGY -- 1.2%
----------------------------------------------------------------------
8,000 Teleflex Inc. ................................. 227,310 328,000
----------- ----------
227,310 328,000
TOTAL COMMON STOCKS............................ $16,215,106 23,882,875
</TABLE>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 16.7%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Purchase Maturity Market
Amount Description Yield Date Value
---------- ----------- -------- -------- -----------
<C> <S> <C> <C> <C>
$4,710,000 Federal Farm Credit Bank .......... 5.884% 01/02/96 4,709,241
-----------
TOTAL U. S. GOVERNMENT AGENCY
OBLIGATIONS (COST -- $4,709,241)... 4,709,241
-----------
TOTAL INVESTMENTS (COST --
$20,924,347) (101.2%)............. $28,592,116
===========
</TABLE>
The percentage shown for each investment category is the total value of that
category as a percentage of the total net assets of the Fund.
*Non-income producing security.
See notes to financial statements.
4
<PAGE>
HILLIARD LYONS GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments at market value:
Common stocks (cost $16,215,106)................................ $23,882,875
U.S. Government Agency Obligations at value (amortized cost
$4,709,241).................................................... 4,709,241
------------
Total investments.............................................. 28,592,116
Cash............................................................. 3,035
Receivables:
Dividends....................................................... 53,620
Shares sold..................................................... 42,242
Deferred organizational expenses -- Note A....................... 23,691
Prepaid expenses................................................. 1,326
------------
Total Assets................................................... $28,716,030
============
LIABILITIES:
Payables:
Investments..................................................... $ 284,254
Due to advisor -- Note B........................................ 57,280
Organizational expenses -- Note A............................... 29,550
Dividends payable............................................... 15,947
Shares redeemed................................................. 3,258
Accrued expenses................................................. 66,520
------------
Total Liabilities.............................................. 456,809
------------
CAPITAL:
Common stock ($.001 par value; 150,000,000 shares authorized and
1,399,281 shares issued and outstanding)........................ 1,400
Paid-in surplus.................................................. 20,591,377
Net unrealized appreciation on investments....................... 7,667,769
Distributions in excess of net investment income -- Note A....... ( 1,325)
------------
Total Capital (Net Assets) (equivalent to $20.20 per share).... 28,259,221
------------
Total Liabilities and Capital.................................. $28,716,030
============
</TABLE>
See notes to financial statements.
5
<PAGE>
HILLIARD LYONS GROWTH FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends........................................................ $ 422,766
Interest......................................................... 196,517
-----------
Total investment income........................................ 619,283
EXPENSES:
Management fees -- Note B........................................ 193,004
Custodian fees................................................... 50,630
Audit fees....................................................... 37,680
12b-1 expenses -- Note B......................................... 37,325
Transfer Agent fees.............................................. 30,970
Directors' fees.................................................. 23,900
Organizational expenses -- Note A................................ 23,243
Legal fees....................................................... 16,315
Insurance expense................................................ 15,122
Shareholder reports.............................................. 12,830
Filing fees...................................................... 4,120
Trade Association................................................ 1,840
-----------
446,979
Waiver of management fee by Adviser -- Note B.................... ( 24,783)
-----------
Total expenses................................................. 422,196
-----------
Net investment income........................................ 197,087
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments -- Note A....................... 919,975
Change in unrealized appreciation on investments................. 5,335,064
-----------
Net gain on investments........................................ 6,255,039
-----------
Net increase in net assets resulting from operations......... $6,452,126
===========
</TABLE>
See notes to financial statements.
6
<PAGE>
HILLIARD LYONS GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the year ended
December 31,
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income............................. $ 197,087 $ 149,934
Net realized gain on investments.................. 919,975 117,418
Net change in unrealized appreciation on
investments...................................... 5,335,064 265,872
------------ ------------
Net increase in net assets from operations...... 6,452,126 533,224
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income............................. ( 196,792) ( 149,934)
Realized gain from investment transactions........ ( 811,088) ( 0)
Distributions in excess of net investment income.. ( 0) ( 1,071)
------------ ------------
Total distributions............................. ( 1,007,880) ( 151,005)
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 49,498 and 9,146 shares issued in
reinvestment of dividends, respectively.......... 991,935 146,516
Proceeds from 446,320 and 107,940 shares sold,
respectively..................................... 8,924,169 1,688,277
Cost of 377,902 and 350,126 shares repurchased,
respectively..................................... ( 7,576,898) ( 5,499,786)
------------ ------------
Net increase (decrease) in net assets from
capital share transactions..................... 2,339,206 ( 3,664,993)
------------ ------------
Total increase (decrease) in net assets........ 7,783,452 ( 3,282,774)
NET ASSETS:
Beginning of year................................. 20,475,769 23,758,543
------------ ------------
End of year (includes distributions in excess of
net investment income of ($1,325) and ($1,621),
respectively).................................... $28,259,221 $20,475,769
============ ============
</TABLE>
See notes to financial statements.
7
<PAGE>
HILLIARD LYONS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE A -- ACCOUNTING POLICIES
Hilliard Lyons Growth Fund, Inc. (the "Fund") is a diversified open-end
management investment company registered under the Investment Company Act of
1940, as amended. The Fund was incorporated under the laws of the state of
Maryland and commenced operations on January 6, 1992. The following is a
summary of significant accounting policies followed by the Fund in preparation
of its financial statements.
SECURITY VALUATION: Securities traded on a national securities exchange or
traded over-the-counter and quoted on the NASDAQ System are valued at last
sales prices. Securities so traded for which there were no sales and other
securities are valued at the mean of the most recent bid-asked quotations
except that bonds not traded on a securities exchange nor quoted on the NASDAQ
System will be valued at prices provided by a recognized pricing service unless
the Adviser believes that such price does not represent a fair value. Each
money market instrument having a maturity of 60 days or less from the valuation
date is valued on an amortized cost basis. Other securities and assets will be
valued at fair value, as determined in good faith by the Adviser under
procedures established by, and under the supervision and responsibility of, the
Fund's Board of Directors.
Normally, repurchase agreements are not subject to trading. U.S. Government
obligations pledged as collateral for repurchase agreements are held by the
Fund's custodian bank until maturity of the repurchase agreement. Provisions of
the agreement provide that the market value of the collateral is sufficient in
the event of default; however, in the event of default or bankruptcy by the
other party to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings.
FEDERAL INCOME TAXES: It is the policy of the Fund to qualify under the
Internal Revenue Code as a regulated investment company and to distribute all
of its taxable income to shareholders, thereby relieving the Fund of federal
income tax liability. The Fund intends to utilize provisions of Federal income
tax laws which allow a realized capital loss to be carried forward for eight
years following the year of loss and offset such losses against any future
realized gains. At December 31, 1995, the Fund did not have a tax-basis capital
loss carryforward. In addition, from November 1, 1995 through December 31,
1995, the Fund did not incur any net realized capital losses. If the Fund had
incurred net capital losses during this period, as permitted by tax
regulations, the Fund would elect to defer these losses and treat them as
arising in the fiscal year ended December 31, 1996.
DIVIDEND POLICY: It is the policy of the Fund to make distributions annually of
its net investment income and its net realized capital gains, if any, at the
end of the year in which earned or at the beginning of the next year. Dividends
and capital gain distributions will normally be reinvested in additional shares
at net asset value without a sales charge, unless otherwise elected at
purchase.
DEFERRED ORGANIZATIONAL EXPENSES: Deferred organizational expenses included on
the statement of assets and liabilities include organizational costs incurred
during the start up of the Fund that J. J. B. Hilliard, W. L. Lyons, Inc., the
Distributor, had paid for the Fund. It is the policy of the Fund that the Fund
will reimburse these organizational expenses. These expenses are being
amortized using the straight-line method over sixty (60) months.
The Distributor has agreed that in the event that any of the initial 34,990
shares that it purchased are redeemed during the period of amortization of the
Fund's organizational and start-up expenses, the redemption proceeds will be
reduced by any such unamortized organizational expenses in the same proportion
as the number of initial shares being redeemed bears to the number of initial
shares outstanding at the time of redemption.
8
<PAGE>
OTHER: The accounts of the Fund are kept on the accrual basis of accounting.
Security transactions are recorded on the trade date. Realized gains or losses
from sales of securities are determined on the specific identified cost basis.
Dividend income is recognized on the ex-dividend date.
NOTE B -- INVESTMENT ADVISORY AGREEMENT
The investment adviser, Hilliard Lyons Investment Advisors (the "Adviser") is
a division of J. J. B. Hilliard, W. L. Lyons, Inc. which owns 37,098 shares of
the Fund. Under the Investment Advisory Agreement, the Adviser receives a fee,
accrued daily and paid quarterly, at an annual rate of .80% of the Fund's
average daily net assets. The Adviser has voluntarily agreed to reduce the fee
payable to it under the Advisory Agreement and, if necessary, reimburse the
Fund on a quarterly basis, by the amount by which the Fund's total annualized
operating expenses (exclusive of taxes, interest, brokerage commissions and
extraordinary expenses but including the Adviser's compensation) for the
fiscal year ending December 31, 1995 exceed 1.75% of the first $50 million of
average daily net assets and 1.50% of average daily net assets in excess of
$50 million. For the year ended December 31, 1995, there was no reimbursement
necessary from the Adviser and the waiver of the management fee amounted to
$24,783.
The Fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "Plan"). Under the Plan, the
Fund reimburses the Distributor quarterly at an annualized rate of up to .25%
of the Fund's average daily net assets for distribution expenses actually
incurred provided the expenses for which reimbursement is made are primarily
intended to result in the sale of Fund shares and are approved by the Fund's
Board of Directors. Expenses for which the Distributor may be reimbursed under
the Plan include, but are not limited to, payments to investment brokers of
the Distributor and to authorized dealers for distribution of shares of the
Fund and for promotion of the maintenance of holdings by established
stockholders and stockholder servicing.
For transactions executed during the year ended December 31, 1995, the Fund
incurred brokerage commissions of $14,643 of which $405 was paid to J. J. B.
Hilliard, W. L. Lyons, Inc., an affiliated corporation. Additionally, J. J. B.
Hilliard, W. L. Lyons, Inc., the Distributor, received sales charges of
approximately $48,601. The Hilliard Lyons profit sharing plan, as directed by
each participant, owns 310,542 shares of the Fund as of December 31, 1995.
No compensation is paid by the Fund to officers and directors of the Fund who
are affiliated with the Adviser or Hilliard Lyons. The Fund pays each
unaffiliated director an annual retainer of $5,000 and a fee of $500 for each
Board or Committee meeting attended and certain expenses the directors incur
in attending meetings.
NOTE C -- PORTFOLIO TRANSACTIONS
For the year ended December 31, 1995, purchases and proceeds from sale of
investment securities (excluding short-term securities) were $5,702,325 and
$6,332,153, respectively.
The cost of investments for Federal income tax purposes and financial
reporting is the same. At December 31, 1995, the gross unrealized appreciation
and depreciation on investments was $7,754,993 and $87,224, respectively,
resulting in net unrealized appreciation of $7,667,769.
9
<PAGE>
FINANCIAL HIGHLIGHTS
The following table includes selected data for a share of capital stock
outstanding throughout each period and other performance information derived
from the financial statements. It should be read in conjunction with the
financial statements and notes thereto.
<TABLE>
<CAPTION>
Period from
January 6,
For the year ended 1992* to
December 31, December 31,
1995 1994 1993 1992
-------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period.... $ 15.98 $ 15.69 $ 15.19 $ 14.29
-------- -------- -------- --------
Net investment income... 0.15 0.12 0.13 0.10
Net realized and change
in unrealized gain on
investments............ 4.82 0.29 0.50 0.90
-------- -------- -------- --------
Total from investment
operations............. 4.97 0.41 0.63 1.00
-------- -------- -------- --------
Less dividends from net
investment income...... ( 0.15) ( 0.12) ( 0.13) ( 0.10)
Less dividends from net
realized capital gains. ( 0.60) ( 0.00) ( 0.00) ( 0.00)
-------- -------- -------- --------
Total distributions..... ( 0.75) ( 0.12) ( 0.13) ( 0.10)
-------- -------- -------- --------
Net asset value:
End of period.......... $ 20.20 $ 15.98 $ 15.69 $ 15.19
======== ======== ======== ========
Total Investment
Return(1).............. 31.10% 2.60% 4.13% 7.09%**
SIGNIFICANT RATIOS AND
SUPPLEMENTAL DATA
Operating expenses to
average net assets..... 1.75%(c) 1.75%(b) 1.75% 1.71%**(a)
Net investment income to
average net assets..... .82%(c) .68%(b) .75% 1.07%**(a)
Portfolio turnover rate. 27.50% 20.10% 59.64% 19.63%
Net assets, end of
period (000s omitted).. $28,259 $20,476 $23,758 $22,404
</TABLE>
(a) Net of voluntary expense reimbursement and management fee waiver by the
Adviser. If the Fund had borne all expenses that were assumed by the
Adviser and paid the full management fee, the annualized ratios of expenses
and net investment income to average net assets would have been 2.76% and
0.02%, respectively, for the period January 6, 1992 through December 31,
1992.
(b) Net of voluntary management fee waiver by the Adviser. If the Fund had paid
the full management fee, the annualized ratios of expenses and net
investment income to average net assets would have been 1.94% and 0.50%,
respectively, for the year ended December 31, 1994.
(c) Net of voluntary management fee waiver by the Adviser. If the Fund had paid
the full management fee, the annualized ratios of expenses and net
investment income to average net assets would have been 1.85% and 0.71%,
respectively, for the year ended December 31, 1995.
(1) Excludes maximum sales charge of 4.75%.
* Commencement of operations
** Annualized
10
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Directors and Shareholders
Hilliard Lyons Growth Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Hilliard Lyons Growth Fund, Inc., including the schedule of investments, as of
December 31, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the three years in the
period then ended, and for the period from January 6, 1992 (commencement of
operations) to December 31, 1992. 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 securities 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
Hilliard Lyons Growth Fund, Inc. at December 31, 1995, the results of its
operations for the year ended, the changes in its net assets for each of the
two years in the period then ended, and financial highlights for each of the
three years in the period then ended, and for the period from January 6, 1992
(commencement of operations) to December 31, 1992, in conformity with generally
accepted accounting principles.
LOGO SIGNATURE OF Ernst & Young LLP
Louisville, Kentucky
January 12, 1996
11
<PAGE>
LOGO
ANNUAL REPORT
DECEMBER 31, 1995
LOGO
DIRECTORS
William A. Blodgett, Jr. Gilbert L. Pamplin
Donald F. Kohler Dillman A. Rash
John C. Owens
OFFICERS
Donald F. Kohler -- Chairman
Samuel C. Harvey -- President
Thomas A. Corea -- Vice President and Secretary
Joseph C. Curry, Jr. -- Vice President and Treasurer
Dianna P. Wengler -- Vice President
DISTRIBUTOR
J.J.B. Hilliard, W.L. Lyons, Inc.
Hilliard Lyons Center
P.O. Box 32760
Louisville, Kentucky 40232-2760
(502) 588-9145
(800) 444-1854
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02266
AUDITORS
Ernst & Young LLP
400 West Market Street
Louisville, Kentucky 40202
LEGAL COUNSEL
Hirn Doheny Reed & Harper
2000 Meidinger Tower
Louisville, Kentucky 40202
This report is intended for the information of shareholders of the Hilliard
Lyons Growth Fund, Inc., but it may also be used as sales literature when pre-
ceded or accompanied by the current prospectus, which gives details about
charges, expenses, investment objectives and operating policies of the Fund.
ANNUAL REPORT
DECEMBER 31, 1995
