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<PAGE> PAGE 3
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SIGNATURE AMY J. LEE
TITLE SECRETARY
EXHIBIT 77Q-1
RESOLVED, that the Bylaws of SBL Fund, Security Equity Fund, Security Ultra
Fund, Security Growth and Income Fund, Security Cash Fund, Security Income
Fund, Security Municipal Bond Fund, and Advisor's Fund are hereby amended to
allow shareholders to vote, in addition to voting in person or by proxy, by
telephone or through the Internet.
EXHIBIT 77B: Accountant's Report on Internal Control
Report of Independent Auditors
To the Shareholders and
Board of Directors of
Security Growth and Income Fund
In planning and performing our audit of the financial statements of Security
Growth and Income Fund for the year ended September 30, 1999, we considered its
internal control, including control activities for safeguarding securities, in
order to determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the requirement of Form
N-SAR and not to provide assurance on the internal control.
The management of Security Growth and Income Fund is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally, controls that are
relevant to an audit pertain to the entity's objective of preparing financial
statements for external purposes that are fairly presented in conformity with
generally accepted accounting principles. Those controls include the
safeguarding of assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and not be detected. Also, projection of any evaluation of internal control to
future periods is subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the design and operation may
deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of one or more
of the specific internal control components does not reduce to a relatively low
level the risk that misstatements caused by error or fraud in amounts that would
be material in relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters involving
internal control and its operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above at
September 30, 1999.
This report is intended solely for the information and use of the Board of
Directors of Security Growth and Income Fund, and the Securities and Exchange
Commission and is not intended to be and should not be used by anyone other than
these specified parties.
Ernst & Young LLP
Kansas City, Missouri
November 12, 1999
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EXHIBIT 77D: Policies with respect to security investments
WHEREAS, certain states formerly imposed restrictions on the investments
which could be made by registered investment companies, which restrictions
were not required by the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the National Securities Market Improvement Act of 1996 pre-empted
the states' ability to impose investment restrictions on investment companies
registered under the 1940 Act; and
WHEREAS, the Board of Directors of Security Equity Fund, Security Growth and
Income Fund, Security Ultra Fund, SBL Fund, Security Income Fund, Security
Municipal Bond Fund and Security Cash Fund has determined that it is in the
best interests of the Security Funds and their respective shareholders to
remove the state law investment limitations from their respective
registration statements;
NOW THEREFORE, BE IT RESOLVED, that the appropriate officers of the Security
Funds are authorized and directed to remove the following investment
limitations from the registration statements of the Security Fund:
The investment limitation that (i) a Fund limit the aggregate market value of
all securities or currencies covering call or put options to 25% of the
market value of the Fund's net assets, (ii) a Fund will not write a covered
put option if as a result, the aggregate market value of all portfolio
securities or currencies covering put or call options exceeds 25% of the
market value of the Fund's net assets, and (iii) a Fund not commit more than
5% of its assets to premiums when purchasing call and put options.
