ANNUAL REPORT
STATE FARM GROWTH FUND, INC.
ONE STATE FARM PLAZA - BLOOMINGTON, ILLINOIS 61710
For Account Information and Shareowner
Services:(309) 766-2029
For Price Information ONLY:
1-800/447-0740
November 30, 1996
This report is not to be distributed unless preceded or accompanied by a
prospectus.
<PAGE>
STATE FARM GROWTH FUND, INC.
Dear Shareowner:
Another good year has passed for owners of common stocks and investors in
the Growth Fund. Your Fund produced a total return of 20.1% over its past
fiscal year, while the S&P 500, which tends to be the most widely followed of
the broadly based stock market indices, yielded 27.9%. We again observe that
returns earned by common stocks over the last two years are very satisfying but
are not sustainable over long periods of time.
The following graph compares a $10,000 investment in the Growth Fund over
the last ten years to a theoretical investment of the same amount in the S&P
500 Index:
COMPARISON OF CHANGE IN VALUE OF
$10,000 INVESTMENT FOR THE YEARS
ENDED NOVEMBER 30
Fund's Avg Annual Total Return
1 YEAR 5 YEAR 10 YEAR
20.09% 13.89% 14.57%
GROWTH
FUND S&P 500*
- ---------------------------------------------------
1986 $10,000 $10,000
1987 9,806 9,541
1988 11,517 11,755
1989 15,031 15,373
1990 15,674 14,830
1991 20,343 17,851
1992 23,493 21,140
1993 23,340 23,271
1994 24,277 23,521
1995 32,452 32,202
1996 38,971 41,172
Past performance is not predictive of future performance.
* The S&P 500 Index is a capitalization - weighted measure of 500
widely held common stocks listed on the New York and American Stock
Exchanges and traded in the Over-The-Counter Market.
The S&P 500 Index represents an unmanaged group of stocks that differs from
the composition of the Growth Fund. Unlike an investment in the Growth Fund,
a theoretical investment in the Index does not reflect any expenses.
The investment portfolio of the Fund has more or less been carried upward
in value by the same factors which have pulled general common stock prices
higher over the course of the year. These factors include a reasonably healthy
domestic economy, numerous corporate mergers, good growth in corporate profits
and strong demand for common stocks generated by record flows of monies into
equity mutual funds. Towards the end of the year, common stock prices sprinted
ahead as a positive spin was put on election results and market interest rates
declined.
The shares of companies generally classified in the financial, computer,
pharmaceutical, consumer product, energy and telecommunication supplier sectors
tended to perform most strongly over the past twelve months. The stocks of
telephone, utility, metals and construction companies did not do as well.
The general composition of the Fund's portfolio was changed somewhat over
the last twelve months. A discussion of alterations which we consider most
significant follows. Early in the year, the Fund received approximately equal
amounts of cash and Disney stock when Capital Cities/ABC was merged into Disney,
2
<PAGE>
and the cash was redeployed in the shares of companies which we feel are quite
sensitive to general global economic growth. In a move to make the portfolio
more diversified, all or portions of nine holdings were sold later in the year
with proceeds from the sales used to establish new investment positions in
shares of 23 different companies. Some of the sales involved companies that are
not meeting our expectations, while in other instances holdings were reduced as
we reacted to high market valuations placed on the stocks or to portfolio
weightings which had grown to uncomfortable levels. Additions to the portfolio
include stocks of companies which we feel are growing satisfactorily and have
prospects for earning good long-term returns.
The general mood of investors is quite upbeat at the moment. We must admit
that we are bothered by the rapid rise of stock prices after some market
difficulties in the middle of the year. Again, investors have seen
reinforcement of the belief that any indigestion in the market merely presents
an opportunity to pour money into stocks. Times like these remind us that
market dynamics change over time, but the basic human characteristics of greed
and fear, which tend to drive securities markets to extremes in both
directions, are timeless. Investor perceptions will ultimately change, we just
don't know when or what will cause the change.
As always we encourage you to view your investment in the Fund as a truly
long term commitment. Its assets are invested in good quality securities which
over time should provide you with satisfactory investment results.
The directors have declared a capital gain distribution of $2.305 per
Growth Fund share which will be paid on December 31, 1996. A semi-annual income
dividend of $.290 per share will also be paid on December 31, 1996. Both will
be used to purchase additional shares for your account unless you have elected
to receive payments directly by check.
Sincerely,
Paul N. Eckley Kurt G. Moser
Vice President Vice President
December 17, 1996
3
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareowners
State Farm Growth Fund, Inc.
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of State Farm Growth Fund, Inc.
as of November 30, 1996, the related statements of operations and
changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the fiscal years since
1987. 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 November 30, 1996, by
correspondence with the custodian. 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 State Farm Growth Fund, Inc. at November 30, 1996,
the results of its operations and changes in its net assets for each of
the two years in the period then ended, and the financial highlights for
each of the fiscal years since 1987, in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 13, 1996
4
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
November 30, 1996
<TABLE>
<CAPTION>
SHARES VALUE
COMMON STOCKS (93.6%)
AGRICULTURE & FOOD (9.0%):
<C> <S> <C>
2,724,715 Archer-Daniels-Midland Company $ 59,943,730
46,000 Campbell Soup Company 3,800,750
320,000 The Coca-Cola Company 16,360,000
465,000 Kellogg Company 31,561,875
97,000 Pioneer Hi-Bred International, Inc. 6,765,750
104,000 Sara Lee Corporation 4,082,000
------------
122,514,105
BANKS (11.4%):
382,537 Bancorp Hawaii, Inc. 16,688,177
1,058,058 Banponce Corporation 34,386,885
74,000 J.P. Morgan & Co. Incorporated 6,983,750
349,850 National Commerce Bancorporation 12,769,525
490,000 Norwest Corporation 22,907,500
810,000 Wachovia Corporation 48,600,000
48,200 Wells Fargo & Company 13,718,925
------------
156,054,762
CHEMICALS (8.8%):
415,000 Air Products and Chemicals, Inc. 28,842,500
81,000 The Dow Chemical Company 6,783,750
364,300 Great Lakes Chemical Corporation 19,535,587
561,000 International Flavors & Fragrances Inc. 25,525,500
630,600 Sigma-Aldrich Corporation 39,412,500
------------
120,099,837
COMPUTERS AND SOFTWARE (7.7%):
1,437,000 Hewlett-Packard Company 77,418,375
124,100 International Business Machines Corporation 19,778,438
47,000 (a) Microsoft Corporation 7,373,125
------------
104,569,938
CONSUMERS AND MARKETING (5.4%):
719,600 Hon Industries Inc. 22,307,600
177,728 Jostens, Inc. 3,776,720
173,200 Minnesota Mining and Manufacturing Company 14,505,500
589,000 Rubbermaid Incorporated 14,136,000
250,000 The Gillette Company 18,437,500
------------
73,163,320
ELECTRONIC MANUFACTURING (2.3%):
68,000 AMP Incorporated 2,601,000
140,100 General Electric Company 14,570,400
111,000 Intel Corporation 14,083,125
------------
31,254,525
HEALTH CARE (15.5%):
820,000 Ballard Medical Products 15,375,000
1,550,000 Biomet, Inc. 25,575,000
1,240,800 Johnson & Johnson 65,917,500
473,600 Eli Lilly and Company 36,230,400
166,000 Medaphis Corporation 1,722,250
20,000 Medtronic, Inc. 1,322,500
182,000 Merck & Co., Inc. 15,106,000
480,000 Pfizer Inc. 43,020,000
89,794 Rhone-Poulenc Rorer Inc. 6,678,429
------------
210,947,079
</TABLE>
5
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
November 30, 1996
<TABLE>
<CAPTION>
SHARES VALUE
MEDIA (6.0%):
<C> <S> <C>
873,180 The Walt Disney Company $ 64,397,025
153,500 Reuters Holdings PLC (ADR) 11,147,937
360,181 (a) Scandinavian Broadcasting System SA 6,258,145
------------
81,803,107
MINING AND METALS (1.7%):
195,000 Nucor Corporation 10,603,125
185,000 The RTZ Corporation PLC (ADR) 12,510,625
------------
23,113,750
NON-ELECTRIC MANUFACTURING (1.3%):
185,000 Caterpillar Inc. 14,638,125
35,000 Illinois Tool Works Inc. 3,001,250
------------
17,639,375
OIL AND GAS (8.3%):
122,000 Amoco Corporation 9,470,250
440,400 (a) Barrett Resources Corporation 17,946,300
530,000 Chevron Corporation 35,510,000
290,000 Exxon Corporation 27,441,250
237,100 Pennzoil Company 13,336,875
59,000 Royal Dutch Petroleum Company (ADR) 10,022,625
------------
113,727,300
RETAILING (.3%):
169,000 Wal-Mart Stores, Inc. 4,309,500
TELECOMMUNICATIONS & EQUIPMENT(9.7%):
450,000 (a) ADC Telecommunications, Inc. 16,312,500
400,000 AT&T Corp. 15,700,000
86,000 (a) Airtouch Communications, Inc. 2,203,750
116,000 Ameritech Corporation 6,829,500
290,200 Deutsche Telekom (ADR) 6,203,025
246,000 LM Ericsson Telephone Company (ADR) 7,595,250
129,633 Lucent Technologies Inc. 6,643,691
823,000 MCI Communications Corporation 25,101,500
264,000 Motorola, Inc. 14,619,000
596,100 SBC Communications Inc. 31,369,762
------------
132,577,978
UTILITIES - ELECTRIC (1.9%):
248,000 Central and South West Corporation 6,634,000
132,000 Duke Power Company 6,121,500
305,000 Pacificorp 6,405,000
288,000 Southern Company 6,408,000
------------
25,568,500
</TABLE>
6
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
November 30, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
MISCELLANEOUS (4.3%):
<C> <S> <C>
428,200 Corning Incorporated $ 17,342,100
337,500 (a) Osmonics, Inc. 7,171,875
425,000 Pall Corporation 11,103,125
346,400 Vulcan Materials Company 21,563,400
81,250 Other 1,482,813
--------------
58,663,313
--------------
Total common stocks (cost: $582,264,846) 1,276,006,389
SHORT-TERM INVESTMENTS (6.3%)
$30,000,000 U.S. Treasury bills, 5.005% to 5.155% effective yield,
due 12-1996 to 2-1997 29,823,300
6,515,000 Ford Motor Credit Co., 5.40%, 12-3-1996 6,517,933
19,545,000 General Electric Capital Corp., 5.25%, 12-3-1996 19,576,404
1,470,000 General Motors Acceptance Corp., 5.30%, 12-3-1996 1,471,083
330,000 General Motors Acceptance Corp., 5.28%, 12-3-1996 330,485
27,805,000 General Motors Acceptance Corp., 5.31%, 12-10-1996 27,821,414
--------------
Total short-term investments (cost: $85,529,481) 85,540,619
--------------
TOTAL INVESTMENTS (99.9%)(cost: $667,794,327) 1,361,547,008
CASH AND OTHER ASSETS, LESS
LIABILITIES (.1%) 1,362,246
--------------
NET ASSETS (100.0%) $1,362,909,254
==============
</TABLE>
Notes: (a) Non-income producing security.
(b) At November 30, 1996, net unrealized appreciation of $693,752,681
consisted of gross unrealized appreciation of $697,539,352 and
gross unrealized depreciation of $3,786,671 based on cost of
$667,794,327 for federal income tax purposes.
See accompanying notes to financial statements.
7
<PAGE>
STATE FARM GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
Investments, at value (cost: $667,794,327) $1,361,547,008
Cash 1,245,069
Receivable for:
Dividends $2,830,970
Securities sold 228,726
Shares of the Fund sold 103,035
Sundry 8,859 3,171,590
----------
Prepaid expenses 47,586
--------------
Total assets 1,366,011,253
LIABILITIES AND NET ASSETS
Payable for:
Shares of the Fund redeemed 2,657,982
Other accounts payable (including $406,313 to Manager) 444,017
----------
Total liabilities 3,101,999
--------------
Net assets applicable to 39,451,935 shares outstanding of
$.50 par value common stock (100,000,000 shares
authorized) $1,362,909,254
==============
Net asset value, offering price and redemption price per share $ 34.55
==============
ANALYSIS OF NET ASSETS
Excess of amounts received from sales of shares over amounts
paid on redemptions of shares on account of capital $ 562,315,130
Undistributed net realized gain on sales of investments 90,788,938
Net unrealized appreciation of investments 693,752,681
Undistributed net investment income 16,052,505
--------------
Net assets applicable to shares outstanding $1,362,909,254
==============
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
STATE FARM GROWTH FUND, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
1996 1995
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of
$83,607 in 1996 and $104,425 in 1995) $ 18,232,750 $ 15,895,757
Interest 5,377,917 3,218,409
----------------------------
Total investment income 23,610,667 19,114,166
EXPENSES:
Investment advisory and management fee 1,325,421 1,068,973
Professional fees 35,869 39,104
ICI dues 41,711 39,917
Registration fees 30,249 17,758
Fidelity bond expense 7,951 7,334
Directors' fees 9,000 6,600
Reports to shareowners 21,876 47,298
Franchise taxes 10,078 9,876
Custodian fees 32,062 35,212
Other 1,933 276
----------------------------
Total expenses 1,516,150 1,272,348
Less: custodian fees paid indirectly 31,713 35,064
----------------------------
Net expenses 1,484,437 1,237,284
----------------------------
Net investment income 22,126,230 17,876,882
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on sales of investments 90,788,938 6,015,663
Change in net unrealized appreciation 111,162,700 238,933,861
----------------------------
Net realized and unrealized gain on investments 201,951,638 244,949,524
----------------------------
Net change in net assets resulting from operations $224,077,868 262,826,406
============================
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
STATE FARM GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
1996 1995
<S> <C> <C>
From operations:
Net investment income $ 22,126,230 17,876,882
Net realized gain on sales of investments 90,788,938 6,015,663
Change in net unrealized appreciation 111,162,700 238,933,861
----------------------------------
Net change in net assets resulting
from operations 224,077,868 262,826,406
Undistributed net investment income included in
price of shares issued and redeemed 718,903 407,527
Distributions to shareowners from:
Net investment income (per share $.53 in 1996 and
$.52 in 1995) (18,174,400) (18,125,076)
Net realized gain (per share $.12 in 1996 and
$.175 in 1995) (6,015,663) (5,860,346)
----------------------------------
Total distributions to shareowners (24,190,063) (23,985,422)
From Fund share transactions:
Proceeds from shares sold 177,516,771 110,543,974
Reinvestment of ordinary income dividends
and capital gain distributions 23,554,851 23,301,462
----------------------------------
201,071,622 133,845,436
Less payments for shares redeemed 107,416,790 76,138,727
----------------------------------
Net increase in net assets from Fund share
transactions 93,654,832 57,706,709
----------------------------------
Total increase in net assets 294,261,540 296,955,220
Net assets:
Beginning of year 1,068,647,714 771,692,494
----------------------------------
End of year (including undistributed net
investment income of $16,052,505 in 1996
and $11,381,772 in 1995) $1,362,909,254 1,068,647,714
==================================
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
STATE FARM GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION -- Investments are stated at value. Stocks traded
on securities exchanges, or in the over-the-counter market in which
transaction prices are reported, are valued at the last sales prices on
the day of valuation or, if there are no reported sales on that day, at
the mean of the last bid and asked quotations. Other stocks traded
over-the-counter are valued at the mean of the last bid and asked
prices. Long-term debt securities and U.S. Treasury bills are valued
using quotations provided by an independent pricing service. Short-term
debt securities, other than U.S. Treasury bills, are valued on an
amortized cost basis. Any securities not valued as described above are
valued at fair value as determined in good faith by the Board of
Directors or its delegate.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date (date the order to buy or sell is
executed) and dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis. Realized gains and
losses from security transactions are reported on an identified cost
basis.
FUND SHARE VALUATION -- Fund shares are sold and redeemed on a
continuous basis at net asset value. Net asset value per share is
determined as of 3:00 p.m. Bloomington, Illinois time on each business
day other than customary weekend and holiday closings, except that the
Fund need not compute a net asset value on any day when no purchase or
redemption order has been received by the Fund. The net asset value per
share is computed by dividing the total value of the Fund's investments
and other assets, less liabilities, by the number of Fund shares
outstanding.
FEDERAL INCOME TAXES, DIVIDENDS AND DISTRIBUTIONS TO SHAREOWNERS -- It
is the Fund's policy to comply with the special provisions of the
Internal Revenue Code available to investment companies and, in the
manner provided therein, to distribute all of its taxable income, as
well as any net realized gain on sales of investments reportable for
federal income tax purposes. The Fund has complied with this policy and,
accordingly, no provision for federal income taxes is required.
On December 13, 1996, an ordinary income dividend of $.29 per share and
a capital gain distribution of $2.305 per share were declared, payable
December 31, 1996 (reinvestment date December 31, 1996) to shareowners
of record December 13, 1996.
Dividends and distributions payable to its shareowners are recorded by
the Fund on the ex-dividend date.
EQUALIZATION ACCOUNTING -- A portion of proceeds from sales and payments
on redemptions of Fund shares is credited or charged to undistributed
net investment income. As a result, undistributed net investment income
per share is unaffected by sales or redemptions of Fund shares.
RECLASSIFICATION -- Certain reclassifications have been made to the
Statement of Operations for 1995 to conform with 1996 presentation.
2. TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory and management services agreement
with State Farm Investment Management Corp. (Manager) pursuant to which
the Fund pays the Manager an annual fee (computed on a daily basis and
paid quarterly) of .20% of the first $100 million of average net assets,
.15% of the next $100 million of average net assets and .10% of the
average net assets in excess of $200 million. The Manager guarantees
that all expenses of the Fund, including the compensation of the Manager
but excluding franchise taxes, interest, extraordinary litigation
expenses, brokerage commissions and other portfolio transaction costs,
shall not exceed .40% of average net assets annually.
11
<PAGE>
STATE FARM GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
Under the terms of this agreement, the Fund incurred fees of
$1,325,421 for 1996 and $1,068,973 for 1995. The Fund pays no fees for
transfer agent services provided by the Manager. The Fund does not pay
any discount, commission or other compensation for underwriting services
provided by the Manager.
Certain officers and/or directors of the Fund are also officers
and/or directors of the Manager. The Fund made no payments to its
officers or directors during the two years ended November 30, 1996,
except for directors' fees of $9,000 for 1996 and $6,600 for 1995, paid
to the Fund's independent directors.
3. INVESTMENT TRANSACTIONS
Investment transactions (exclusive of short-term investments) for
each of the two years ended November 30 were as follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Purchases $255,225,023 46,164,857
Proceeds from sales 172,902,528 22,290,487
============================
</TABLE>
4. FUND SHARE TRANSACTIONS
Proceeds and payments on Fund shares as shown in the statement of
changes in net assets are in respect of the following number of shares:
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
1996 1995
<S> <C> <C>
Shares sold 5,839,467 4,289,306
Shares issued in reinvestment of ordinary income
dividends and capital gain distributions 788,486 966,452
-------------------------
6,627,953 5,255,758
Less shares redeemed 3,526,507 3,008,177
-------------------------
Net increase in shares outstanding 3,101,446 2,247,581
=========================
</TABLE>
12
<PAGE>
STATE FARM GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS
Per Share Income and Capital Changes (For a share outstanding throughout each
year)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
year $ 29.40 22.63 22.21 23.05 20.33 16.77 16.90 13.34 11.96 13.50
Income from Invest-
ment Operations
Net investment
income .63 .50 .44 .45 .43 .42 .47 .41 .43 .38
Net gain or loss on
securities (both
realized and
unrealized) 5.17 6.97 .43 (.60) 2.70 4.32 .26 3.57 1.62 (.61)
---------------------------------------------------------------------------------------------------
Total from investment
operations 5.80 7.47 .87 (.15) 3.13 4.74 .73 3.98 2.05 (.23)
Less Distributions
Net investment
income (.53) (.52) (.45) (.45) (.41) (.54) (.40) (.42) (.39) (.38)
Capital gain (.12) (.18) -- (.24) -- (.64) (.46) -- (.28) (.93)
---------------------------------------------------------------------------------------------------
Total distributions (.65) (.70) (.45) (.69) (.41) (1.18) (.86) (.42) (.67) (1.31)
Net asset value, end of
year $ 34.55 29.40 22.63 22.21 23.05 20.33 16.77 16.90 13.34 11.96
===================================================================================================
Total Return 20.09% 33.67% 4.02% (.65%) 15.42% 29.79% 4.27% 30.51% 17.45% (1.83%)
Ratios/Supplemental Data
Net assets, end of year
(millions) $1,362.9 1,068.6 771.7 725.1 696.1 558.4 414.3 383.0 295.5 253.6
Ratio of expenses to
average net assets .13% .14%(a) .14% .14% .16% .19% .21% .21% .24% .26%
Ratio of net investment
income to average
net assets 1.88% 1.95% 2.00% 2.05% 1.99% 2.22% 2.84% 2.69% 3.32% 2.75%
Portfolio turnover rate 16% 3% 3% 2% 2% 1% 16% 9% 5% 12%
Number of shares out-
standing at end of
year (millions) 39.5 36.4 34.1 32.7 30.2 27.5 24.7 22.7 22.1 21.2
</TABLE>
Average commission rate paid per share on stock transactions for the year ended
November 30, 1996 was $.0599.
Note: (a) The ratio based on net custodian expenses would have been .13%
in 1995.
_________________________
STATE FARM GROWTH FUND, INC.
TAX INFORMATION
The Fund paid ordinary income dividends of $.265 per share in June
1996 and $.29 per share in December 1996. Of these dividends, 73%
qualifies for the 70% deduction for dividends received by corporations
as provided by the Internal Revenue Code.
In December 1996, the Fund made a capital gain distribution of $2.305
per share, 100% of which was paid from long-term capital gain and is
designated as a capital gain dividend.
NOTE: Dividends and distributions paid to you must be included in your
federal income tax return and must be reported by the Fund to the
Internal Revenue Service in accordance with the provisions of the
Internal Revenue Code.
13
<PAGE>
(This page intentionally left blank.)
14
<PAGE>
(This page intentionally left blank.)
15
<PAGE>
ANNUAL
REPORT
November 30, 1996
STATE
FARM
GROWTH
FUND, INC.
ONE STATE FARM PLAZA
BLOOMINGTON, ILLINOIS 61710
TELEPHONE (309) 766-2029
G 4031.06
