<PAGE>
INVESTMENT ADVISER
Value Line, Inc.
220 East 42nd Street, New York, NY 10017-5891
DISTRIBUTOR
Value Line Securities, Inc.
220 East 42nd Street, New York, NY 10017-5891
CUSTODIAN BANK
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
SHAREHOLDER SERVICING AGENT
State Street Bank and Trust Company c/o NFDS
P.O. Box 419729, Kansas City, MO 64141-6729
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas, New York, NY 10036
LEGAL COUNSEL
Peter D. Lowenstein, Esq.
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830
BOARD OF DIRECTORS
Jean Bernhard Buttner Leo R. Futia
Charles E. Reed Paul Craig Roberts
John W. Chandler
OFFICERS
Jean Bernhard Buttner David T. Henigson
CHAIRMAN AND PRESIDENT VICE PRESIDENT,
SECRETARY/TREASURER
Charles Heebner John W. Risner
VICE PRESIDENT VICE PRESIDENT
Jack M. Houston Stephen La Rosa
ASSISTANT ASSISTANT
SECRETARY/TREASURER SECRETARY/TREASURER
An investment in The Value Line Cash Fund, Inc. is not guaranteed or insured by
the U.S. Government and there is no assurance that the Fund will maintain its
per-share net asset value.
The financial statements included herein have been taken from the records of the
Fund without examination by the independent accountants and accordingly they do
not express an opinion thereon.
This unaudited report is issued for information of shareholders. It is not
authorized for distribution to prospective investors unless preceded or
accompanied by a currently effective prospectus of the Fund (obtainable from the
Distributor).
------------------
SEMI-ANNUAL REPORT
JUNE 30, 1995
------------------
THE VALUE LINE CASH FUND, INC.
[Logo]
VALUE LINE MUTUAL FUNDS
<PAGE>
[Logo] TO OUR VALUE LINE
- --------------------------------------------------------------------------------
DEAR SHAREHOLDER:
We are pleased to send you this Value Line Cash Fund semi-annual report for the
six months ended June 30, 1995. The total net assets of your Fund at the end of
June were $358 million; the average maturity of the Fund's holdings was 54
days.
INVESTMENTS AND RESULTS
The Cash Fund's annualized yield for the six months ended June 30, 1995, was
5.41%. For both the 7-day and the 30-day periods ended June 30th, the Fund's
yield was 5.35%. The Fund ranked 135th out of 270 Money Market Instrument Funds
for year-to-date, annualized return--slightly above the average money market
instrument fund's return as measured by Lipper Analytical Services. Given our
focus on credit quality, the Fund's performance continues to fulfill
successfully its investment objective of securing as high a level of current
income as is consistent with liquidity and preservation of capital.
The composition of your Fund has changed very little in the last six months. We
continue to invest in a blend of U.S. Government Agency securities (67% of the
portfolio) and first-tier securities. First-tier securities are those that have
been assigned the highest rating by two nationally recognized debt-rating
organizations -- P-1 by Moody's Investor Services or A-1 by Standard and Poor's.
No investments below first-tier securities are currently being considered.
In purchasing corporate securities for your Fund, we continue to focus on the
commercial paper issues of publicly traded companies that, at a minimum, are
ranked 3 for Safety and B for Financial Strength by The Value Line Investment
Survey. The decline in interest rates year-to-date has afforded many companies
the opportunity to extend their average debt maturities by issuing long-term
bonds to replace their short-term commercial paper borrowings. A corporation
with commercial paper rated A1/P1 and long-term ratings of A1/A+ can now issue
10-year notes at yields approximating those on six-month commercial paper issued
last December. As this trend continues, the supply of quality commercial paper
can be expected to shrink.
The average maturity of your Fund has ranged from 38 to 60 days over the past
six months. In contrast to 1994, when the average maturity was relatively more
volatile (reflecting volatility in interest rates), this year has seen it remain
in a fairly narrow band of 45 to 55 days. With the short-term yield curve flat
(i.e., one-month rates roughly equal to one-year rates), we see little
advantage, at this time, in holding securities with longer maturities.
INTEREST RATES YEAR TO DATE
The Federal Reserve Board raised the Federal Funds rate .50% in late January,
from the 5.50% set in November 1994. Soon after this last increase, the rate of
economic growth began to fall. That decline in the rate of growth, coupled with
a relatively benign inflation outlook, moved the Fed to begin easing by late
June, with a .25% cut in the Federal Funds rate. Short-term market rates peaked
in mid-January and have continued to fall since then.
Further declines from current levels will depend on additional Federal Reserve
action to lower rates. Should anticipated rate cuts not be forthcoming,
short-term rates are likely to rise modestly. Given current economic
information, we can easily envision a stable Federal Funds rate for the
remainder of the year.
We appreciate your confidence in The Value Line Cash Fund and look forward to
serving your investment needs in the future.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
CHAIRMAN AND PRESIDENT
July 16, 1995
2
<PAGE>
CASH FUND SHAREHOLDERS
ECONOMIC OBSERVATIONS
The economy slowed to a virtual crawl in the second quarter, with real,
inflation-adjusted gross domestic product rising by a scant 0.5%. This narrow
increase in growth, which follows much healthier expansion rates of 5.1% and
2.7% in the final quarter of 1994 and the first three months of this year,
respectively, was fueled principally by a mild pickup in consumer spending.
Sharply lower levels of housing construction and somewhat weaker auto production
numbers were the quarter's main depressants.
The recent slowing in business activity, however, is likely to prove short-lived
as recent data show that consumer spending is continuing to pick up, while the
sharp reduction in mortgage rates over the past several months seems to be
injecting some life into the housing market. Assuming that these positive trends
persist, we would expect economic growth to accelerate in the third and fourth
quarters. A moderate carryover effect is likely through at least the opening
months of 1996. The risk of recession, which seemed very real just a short time
ago, has lessened noticeably, in the past month or two.
But the news isn't all good. For example, the pending improvement on the
economic front is likely to dissuade the Federal Reserve Board from trimming
interest rates aggressively in the months ahead, since the added stimulus of
substantially lower borrowing costs would, presumably, not be needed. If that's
the case, the stock market, which continues to be partially underpinned by the
expectation of further interest-rate reductions, would have a key support
mechanism removed.
3
<PAGE>
THE VALUE LINE CASH FUND, INC
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY VALUE
(IN THOUSANDS) YIELD DATE (IN THOUSANDS)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (67.5%)
$ 5,000 Federal Farm Credit Banks . . . . . . . . . . . . . . . . . . 5.70% 1/26/96 $ 5,000
18,000 Federal Farm Credit Banks . . . . . . . . . . . . . . . . . . 6.15 (1) 5/9/96 17,996
10,000 Federal Farm Credit Banks . . . . . . . . . . . . . . . . . . 6.08 (1) 5/24/96 9,994
1,000 Federal Farm Credit Banks . . . . . . . . . . . . . . . . . . 4.29 (3) 2/12/97 991
10,000 Federal Home Loan Banks . . . . . . . . . . . . . . . . . . . 6.02 (1) 10/20/95 9,999
25,000 Federal Home Loan Banks . . . . . . . . . . . . . . . . . . . 5.94 (3) 12/15/95 24,998
25,000 Federal Home Loan Banks . . . . . . . . . . . . . . . . . . . 5.82 (3) 8/5/96 24,968
5,000 Federal Home Loan Banks . . . . . . . . . . . . . . . . . . . 5.61 (2) 9/12/96 5,000
16,925 Federal Home Loan Mortgage Corp. (discount note) . . . . . . 6.19 7/3/95 16,919
10,000 Federal Home Loan Mortgage Corp. . . . . . . . . . . . . . . 6.36 (2) 9/1/95 10,006
20,000 Federal National Mortgage Association . . . . . . . . . . . . 6.05 (1) 8/25/95 19,999
5,000 Federal National Mortgage Association . . . . . . . . . . . . 5.75 7/1/96 4,992
10,000 Federal National Mortgage Association . . . . . . . . . . . . 4.20 (4) 9/4/96 10,021
3,000 Federal National Mortgage Association . . . . . . . . . . . . 4.51 (3) 10/25/96 3,000
5,000 Federal National Mortgage Association (discount note) . . . . 5.94 8/3/95 4,973
5,000 Federal National Mortgage Association (discount note) . . . . 6.27 9/6/95 4,944
500 Nebraska Higher Education Loan Program . . . . . . . . . . . 6.04 12/1/95 499
5,000 Student Loan Marketing Association. . . . . . . . . . . . . . 5.48 (2) 7/13/95 5,000
5,000 Student Loan Marketing Association . . . . . . . . . . . . . 5.54 (2) 8/10/95 5,000
15,500 Student Loan Marketing Association. . . . . . . . . . . . . . 5.56 (2) 9/14/95 15,500
5,000 Student Loan Marketing Association. . . . . . . . . . . . . . 5.59 (2) 10/12/95 4,999
10,000 Student Loan Marketing Association. . . . . . . . . . . . . . 5.66 (2) 11/9/95 10,000
13,500 Student Loan Marketing Association. . . . . . . . . . . . . . 5.89 (3) 12/1/95 13,498
4,100 Student Loan Marketing Association. . . . . . . . . . . . . . 6.08 7/1/96 4,102
8,950 Student Loan Marketing Association. . . . . . . . . . . . . . 4.51 (3) 10/1/96 8,918
--------- ---------
241,475 TOTAL U. S. GOVERNMENT AGENCY OBLIGATIONS . . . . . . . . . . 241,316
--------- ---------
COMMERCIAL PAPER (19.8%)
AUTO & TRUCK (2.0%)
7,250 Ford Credit Europe PLC. . . . . . . . . . . . . . . . . . . . 6.11 7/24/95 7,222
--------- ---------
CHEMICAL (SPECIALTY) (1.8%)
6,500 Lubrizol Corp.. . . . . . . . . . . . . . . . . . . . . . . . 6.06 7/31/95 6,468
--------- ---------
FINANCIAL SERVICES (2.0%)
7,250 Hertz Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 6.10 7/26/95 7,220
--------- ---------
4
<PAGE>
JUNE 30, 1995
- -------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL
AMOUNT MATURITY VALUE
(IN THOUSANDS) YIELD DATE (IN THOUSANDS)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FOOD PROCESSING (2.0%)
$ 7,200 Unilever Corp.. . . . . . . . . . . . . . . . . . . . . . . . 5.88 % 10/15/95 $ 7,091
--------- ---------
INSURANCE (DIVERSIFIED) (2.0%)
7,200 Travelers Insurance Co. . . . . . . . . . . . . . . . . . . . 6.09 8/2/95 7,162
--------- ---------
MACHINERY (2.0%)
7,100 Deere (John) & Co.. . . . . . . . . . . . . . . . . . . . . . 6.01 7/19/95 7,079
--------- ---------
PACKAGING & CONTAINER (2.0%)
7,200 Sonoco Products Co. . . . . . . . . . . . . . . . . . . . . . 6.07 7/11/95 7,188
--------- ---------
PAPER & FOREST PRODUCTS (2.0%)
7,200 Weyerhauser Real Estate Co. . . . . . . . . . . . . . . . . . 6.08 7/28/95 7,168
--------- ---------
RAILROAD (2.0%)
7,250 Consolidated Rail Corp. . . . . . . . . . . . . . . . . . . . 6.05 9/22/95 7,152
--------- ---------
TELECOMMUNICATION SERVICES (2.0%)
7,200 U.S. West Communications Corp.. . . . . . . . . . . . . . . . 6.00 7/10/95 7,189
--------- ---------
71,350 TOTAL COMMERCIAL PAPER. . . . . . . . . . . . . . . . . . . . 70,939
--------- ---------
CORPORATE SECURITIES (4.9%)
BANK (2.0%)
7,000 Wachovia Bank of North Carolina, N.A. . . . . . . . . . . . . 5.94 (3) 5/13/96 7,000
--------- ---------
DIVERSIFIED CO. (2.0%)
4,500 General Electric Capital Corp.. . . . . . . . . . . . . . . . 6.21 (1) 6/6/96 4,500
2,500 General Electric Capital Corp.. . . . . . . . . . . . . . . . 6.20 (1) 6/7/96 2,500
--------- ---------
7,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000
--------- ---------
FINANCIAL SERVICES (0.9%)
3,250 Associates Corp. N.A. . . . . . . . . . . . . . . . . . . . . 6.15 2/1/96 3,297
--------- ---------
17,250 TOTAL CORPORATE SECURITIES. . . . . . . . . . . . . . . . . . 17,297
--------- ---------
TAXABLE MUNICIPAL SECURITIES (5.1%)
3,670 Mississippi Business Corp., Taxable
--------- Industrial Development Revenue Bonds,
Series 1994, Bryan Foods, Inc. Project (Weekly Put). . . . . 6.10 (2) 2/1/19 3,670
---------
5
<PAGE>
SCHEDULE OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL VALUE
AMOUNT MATURITY (IN THOUSANDS EXCEPT
(IN THOUSANDS) YIELD DATE PER SHARE AMOUNT)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 2,000 New York City, Series B, FGIC Insured,
--------- Taxable (Commercial Paper) . . . . . . . . . . . . . . . . . 6.05 % 7/6/95 $ 2,000
---------
5,500 New York City, General Obligation Bonds, Fiscal 1995
--------- Series G, Taxable Adjustable Rate, LOC Societe
Generale (Weekly Put). . . . . . . . . . . . . . . . . . . . 6.05 (2) 2/15/19 5,500
---------
7,000 State of Texas, Veterans Housing Assistance, Refunding
--------- Bonds, Series 1994 A-2, (Weekly Put) . . . . . . . . . . . . 6.10 (2) 12/1/33 7,000
---------
18,170 TOTAL TAXABLE MUNICIPAL SECURITIES. . . . . . . . . . . . . . 18,170
--------- ---------
OTHER SECURITIES (3.5%)
7,500 Carco Auto Loan Master Trust, Class A-1, Money Market
--------- Extendible Certificates, Series 1993-2 . . . . . . . . . . . 6.14 (3) 4/15/96 7,500
---------
5,255 John Deere Owner Trust, 1995-A, Class A-1, Floating Rate
--------- Asset Backed Notes (Monthly Paydown Interest and
Principal) . . . . . . . . . . . . . . . . . . . . . . . . . 6.00 5/15/96 5,255
---------
12,755 TOTAL OTHER SECURITIES. . . . . . . . . . . . . . . . . . . . 12,755
--------- ---------
$ 361,000 TOTAL INVESTMENTS (100.8%). . . . . . . . . . . . . . . . . . 360,477
---------
---------
EXCESS OF LIABILITIES OVER CASH AND OTHER ASSETS (-0.8%). . . (2,851)
---------
NET ASSETS (100.0%) . . . . . . . . . . . . . . . . . . . . . $ 357,626
---------
---------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER OUTSTANDING SHARE . . . . . . . . . . . . . . . . . $ 1.00
---------
---------
<FN>
Rate frequency for floating rate notes at June 30, 1995: (1) Daily (2) Weekly
(3) Monthly (4) Quarterly
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES AT JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DOLLARS
(IN THOUSANDS EXCEPT
PER SHARE AMOUNT)
--------------------
<S> <C>
ASSETS:
Investments at value:
(Amortized cost - $360,477). . . . . . . . . . . . . . . . $ 360,477
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Receivable for securities sold . . . . . . . . . . . . . . . 2,600
Interest receivable. . . . . . . . . . . . . . . . . . . . . 2,287
Receivable for capital shares sold . . . . . . . . . . . . . 499
---------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . 365,943
---------
LIABILITIES:
Payable for securities purchased . . . . . . . . . . . . . . 7,500
Payable for capital shares repurchased . . . . . . . . . . . 475
Accrued expenses:
Advisory fee. . . . . . . . . . . . . . . . . . . . . . . 118
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 224
---------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . 8,317
---------
NET ASSETS:
Capital Stock, at $.10 par value (authorized
2 billion shares, outstanding 357,858,346
shares). . . . . . . . . . . . . . . . . . . . . . . . . . 35,786
Additional paid-in capital . . . . . . . . . . . . . . . . . 322,072
Accumulated net realized loss on investments . . . . . . . . (232)
---------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . $ 357,626
---------
---------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER OUTSTANDING SHARE . . . . . . . . . . . . . . . . $ 1.00
---------
---------
</TABLE>
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DOLLARS
(IN THOUSANDS )
---------------
<S> <C>
INVESTMENT INCOME:
Interest income. . . . . . . . . . . . . . . . . . . . . . . $ 10,437
---------
EXPENSES:
Advisory fee . . . . . . . . . . . . . . . . . . . . . . . . 706
Transfer agent . . . . . . . . . . . . . . . . . . . . . . . 164
Postage and insurance. . . . . . . . . . . . . . . . . . . . 49
Telephone and wire charges . . . . . . . . . . . . . . . . . 24
Printing, checks and stationery. . . . . . . . . . . . . . . 14
Registration and filing fees . . . . . . . . . . . . . . . . 13
Auditing and legal . . . . . . . . . . . . . . . . . . . . . 9
Directors' fees and expenses . . . . . . . . . . . . . . . . 6
Custodian fees and other expenses . . . . . . . . . . . . . 3
---------
TOTAL EXPENSES . . . . . . . . . . . . . . . . . . . . . 988
---------
NET INVESTMENT INCOME. . . . . . . . . . . . . . . . . . . . 9,449
---------
NET REALIZED GAIN ON INVESTMENTS . . . . . . . . . . . . . . 94
---------
NET INCREASE IN NET ASSETS FROM OPERATIONS . . . . . . . . . $ 9,543
---------
---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) 12/31/94
---------------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATIONS:
Net investment income. . . . . . . . . . . . . $ 9,449 $ 12,663
Net realized gain (loss) on investments. . . . 94 (1,875)
--------- ---------
Net Increase in Net Assets from Operations . . 9,543 10,788
--------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income. . . . . . . . . . . . . ( 9,497) (12,615)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares.. . . . . . . 243,990 402,557
Net proceeds from reinvestment of dividends. . 9,497 12,615
--------- ---------
253,487 415,172
Cost of shares repurchased . . . . . . . . . . (237,539) (419,032)
--------- ---------
Increase (decrease) from capital share
transactions. . . . . . . . . . . . . . . . . 15,948 (3,860)
--------- ---------
Increase due to voluntary capital
contribution from Adviser (note 4). . . . . . -- 1,550
--------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS . . . . 15,994 (4,137)
NET ASSETS:
Beginning of period. . . . . . . . . . . . . . 341,632 345,769
--------- ---------
End of period. . . . . . . . . . . . . . . . . $ 357,626 $ 341,632
--------- ---------
--------- ---------
UNDISTRIBUTED NET INVESTMENT INCOME AT END OF
PERIOD . . . . . . . . . . . . . . . . . . . . $ -- $ 48
--------- ---------
--------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940, as amended, as
an open-end, diversified management investment company. The following is a
summary of significant accounting policies consistently followed by the Fund in
the preparation of its financial statements.
(A) SECURITY VALUATION. Securities held by the Fund are valued on the basis of
amortized cost, which approximates market value and does not take into account
unrealized gains or losses. This involves valuing an instrument at cost and
thereafter assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument.
The valuation of securities based upon their amortized cost is permitted by Rule
2a-7 under the Investment Company Act of 1940. The rule requires that the Fund
maintain a dollar-weighted averaged portfolio maturity of 90 days or less,
purchase instruments which have remaining maturities of 13 months or less only,
and invest only in securities determined by the Board of Directors to be of good
quality with minimal credit risks. The Directors have established procedures
designed to achieve this objective.
(B) REPURCHASE AGREEMENTS. In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying collateral
securities, the value of which exceeds the principal amount, including accrued
interest, of the repurchase transaction. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. In
the event of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
(C) SECURITY TRANSACTIONS. Security transactions are accounted for on the date
the securities are purchased or sold. In computing net investment income,
premiums and discounts on portfolio securities are amortized. Realized gains and
losses on securities transactions are determined on the identified cost method.
(D) FEDERAL INCOME TAXES. It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies, including the distribution requirements of the Tax Reform Act of
1986, and to distribute, on a daily basis, all of its taxable income to its
shareholders. Therefore, no Federal income tax or excise tax provision is
required.
2. DIVIDENDS, DISTRIBUTIONS TO SHAREHOLDERS AND CAPITAL SHARE TRANSACTIONS
The Fund earns interest daily on its investments and will distribute daily on
each day the Fund is open for business all of its net investment income. Net
realized gains, if any, will be distributed once a year. Earnings for Saturdays,
Sundays and holidays are paid as a dividend on the next business day. All such
distributions are automatically credited to shareholder accounts in additional
shares at net asset value of the day declared.
Because the Fund has maintained a $1.00 net asset value per share from
inception, the number of shares sold, shares issued to shareholders in
reinvestment of dividends declared, and shares repurchased, are equal to the
dollar amounts shown in the Statement of Changes in Net Assets for the
corresponding capital share transactions.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities, excluding repurchase transactions,
were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1995
(UNAUDITED)
----------------
(DOLLARS IN THOUSANDS)
<S> <C>
PURCHASES:
U.S. Treasury and Government
Agency Obligations . . . . . . . . . . . . . . . $ 916,335
Other Investment Securities. . . . . . . . . . . . . . 417,516
-----------
$ 1,333,851
-----------
MATURITIES OR SALES:
U.S. Treasury and Government
Agency Obligations. . . . . . . . . . . . . . . $ 907,275
Other Investment Securities. . . . . . . . . . . . . . 409,277
-----------
$ 1,316,552
-----------
</TABLE>
At June 30, 1995, the aggregate cost of investments in securities for Federal
income tax purposes is approximately $360,477,000. At June 30, 1995, there is no
appreciation or depreciation of investments.
4. INVESTMENT ADVISORY CONTRACT, MANAGEMENT FEES, AND TRANSACTIONS WITH
AFFILIATES
An advisory fee of $706,490 was paid or payable to Value Line, Inc. (the
"Adviser"), the Fund's investment adviser, for the six months ended June 30,
1995. This was computed at the rate of 4/10 of 1% per year of the average daily
net asset value of the Fund during the period and paid monthly. The Adviser
provides research, investment programs and supervision of the investment
portfolio and pays costs of administrative services, office space, equipment and
compensation of administrative, bookkeeping, and clerical personnel necessary
for managing the affairs of the Fund. The Adviser also provides persons,
satisfactory to the Fund's Board of Directors, to act as officers of the Fund
and pays their salaries and wages. The Fund bears all other costs and expenses.
If the aggregate expenses of the Fund, other than taxes, interest, brokerage
commissions and extraordinary expenses, exceed the expense limitation imposed by
any state in which the Fund sells its shares, the management fee will be reduced
by the amount of such excess, or the amount of such excess will be refunded.
Presently, the most restrictive limitation is 2.5% of the first $30 million of
the average daily net assets, 2% of the next $70 million and 1.5% on any excess
over $100 million.
A fee of $1,960 for printing services was payable to the Adviser for the period
ended June 30, 1995.
Certain officers and directors of the Adviser and its subsidiary, Value Line
Securities, Inc. (the Fund's distributor and a registered broker/dealer), are
also officers and directors of the Fund.
The Adviser and/or affiliated companies and the Value Line, Inc. Profit Sharing
and Savings Plan owned 58,279,316 shares of the Fund's capital stock,
representing 16.29% of the outstanding shares at June 30, 1995. In addition,
certain officers and directors of the Fund owned 59,543 shares of the Fund,
representing .02% of the outstanding shares.
During the year ended December 31, 1994, the market value of certain of the
Fund's securities declined as interest rates rose. In order to maintain a $1.00
net asset value per share and continue valuing the Fund's portfolio in
accordance with Rule 2a-7, certain securities were purchased from the Fund by
the Adviser. The Adviser purchased such securities from the Fund at their
market value of $38,612,000, and reimbursed the Fund for losses of $1,550,337
resulting from the difference between the market value of the securities and
their amortized cost of $40,162,337. For tax purposes, these reimbursements were
applied against the realized losses for the year ended December 31, 1994.
Accordingly, such amount has been reclassified from additional paid-in capital
to accumulated net realized loss on investments in the Statement of Assets and
Liabilities.
10
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 -------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . . $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------ ------
Net investment income. . . . . . . . . . . . . . . . .027 .037 .031 .037 .059 .079
Dividends from net investment income . . . . . . . . (.027) (.037) (.031) (.037) ( .059) (.079)
------ ------ ------ ------ ------ ------
Net realized loss on securities . . . . . . . . . . -- (.005) -- -- -- --
Voluntary capital contribution from
Adviser (note 4). . . . . . . . . . . . . . . . . . -- .005 -- -- -- --
------ ------ ------ ------ ------ ------
Change in net asset value. . . . . . . . . . . . . . -- -- -- -- -- --
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . 2.70%+ 3.69% 3.06% 3.74% 5.89% 7.91%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) . . . . . . . $357,626 $341,632 $345,769 $415,190 $438,218 $499,203
Ratio of expenses to average net assets. . . . . . . . .56%* .61% .60% .60% .58% .65%
Ratio of net investment income to
average net assets . . . . . . . . . . . . . . . . . 5.35%* 3.63% 3.02% 3.67% 5.74% 7.57%
<FN>
* Annualized
+ Not annualized; for six month period only.
</TABLE>
11
<PAGE>
THE VALUE LINE FAMILY OF FUNDS
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1950 -- THE VALUE LINE FUND seeks long-term growth of capital along with modest
current income by investing substantially all of its assets in common stocks or
securities convertible into common stock.
1952 -- THE VALUE LINE INCOME FUND'S primary investment objective is income, as
high and dependable as is consistent with reasonable growth. Capital growth to
increase total return is a secondary objective.
1956 -- THE VALUE LINE SPECIAL SITUATIONS FUND seeks to obtain long-term growth
of capital by investing not less than 80% of its assets in "special situations."
No consideration is given to achieving current income.
1972 -- VALUE LINE LEVERAGED GROWTH INVESTORS' sole investment objective is to
realize capital growth by investing substantially all of its assets in common
stocks. The Fund may borrow up to 50% of its net assets to increase its
purchasing power.
1979 -- THE VALUE LINE CASH FUND, a money market fund, seeks high current income
consistent with preservation of capital and liquidity.
1981 -- VALUE LINE U.S. GOVERNMENT SECURITIES FUND seeks maximum income without
undue risk to principal. Under normal conditions, at least 80% of the value of
its assets will be invested in issues of the U.S. Government and its agencies
and instrumentalities.
1983 -- VALUE LINE CENTURION FUND seeks long-term growth of capital as its sole
objective by investing primarily in stocks ranked 1 or 2 by Value Line for
year-ahead relative performance. The Fund is available to investors only through
the purchase of Guardian Investor, a tax deferred variable annuity, or Value
Plus, a variable life insurance policy.
1984 -- THE VALUE LINE TAX EXEMPT FUND seeks to provide investors with maximum
income exempt from federal income taxes while avoiding undue risk to principal.
The Fund offers investors a choice of two portfolios: a Money Market Portfolio
and a High-Yield Portfolio.
1985 -- VALUE LINE CONVERTIBLE FUND seeks high current income together with
capital appreciation primarily from convertible securities ranked 1 or 2 for
year-ahead performance by the Value Line Convertible Ranking System.
1986 -- VALUE LINE AGGRESSIVE INCOME TRUST seeks to maximize current income by
investing in high-yielding, lower-rated, fixed-income securities.
1987 -- VALUE LINE NEW YORK TAX EXEMPT TRUST seeks to provide New York taxpayers
with maximum income exempt from New York State, New York City and federal income
taxes while avoiding undue risk to principal.
1987 -- VALUE LINE STRATEGIC ASSET MANAGEMENT TRUST invests in stocks, bonds and
cash equivalents according to computer trend models developed by Value Line. The
objective is to professionally manage the optimal allocation of these
investments at all times. The Fund is available to investors only through the
purchase of the Guardian Investor, a tax deferred variable annuity, or Value
Plus, a variable life insurance policy.
1992 -- THE VALUE LINE ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND seeks
high current income consistent with low volatility of principal by investing
primarily in adjustable rate U.S. Government securities.
1993 -- VALUE LINE SMALL-CAP GROWTH FUND invests primarily in common stocks or
securities convertible into common stock, with its primary objective being
long-term growth of capital.
1993 -- VALUE LINE ASSET ALLOCATION FUND seeks high total investment return,
consistent with reasonable risk. The Fund invests in stocks, bonds and money
market instruments utilizing quantitative modeling to determine the correct
asset mix.
- --------------------------------------------------------------------------------
FOR MORE COMPLETE INFORMATION ABOUT ANY OF THE VALUE LINE FUNDS, INCLUDING
CHARGES AND EXPENSES, SEND FOR A PROSPECTUS FROM VALUE LINE SECURITIES, INC.,
220 EAST 42ND STREET, NEW YORK, NEW YORK 10017-5891 OR CALL 1-800-223-0818, 24
HOURS A DAY, 7 DAYS A WEEK. READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR
SEND MONEY.
12
