<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
TRUSTEES
Jean Bernhard Buttner
John W. Chandler Charles E. Reed
Leo R. Futia Paul Craig Roberts
OFFICERS
Jean Bernhard Buttner
CHAIRMAN
Raymond S. Cowen Milton Schlein
PRESIDENT VICE PRESIDENT
David T. Henigson
VICE PRESIDENT AND SECRETARY/TREASURER
Jack M. Houston Stephen La Rosa
ASSISTANT ASSISTANT
SECRETARY/TREASURER SECRETARY/TREASURER
This report is issued for the information of shareholders. It is not
authorized for distribution to prospective investors unless preceded or
accompanied by a currently effective prospectus of the Trust (obtainable from
the Distributor).
VL.F 5111222
-------------------
ANNUAL REPORT
February 29, 1996
-------------------
VALUE LINE
NEW YORK
TAX EXEMPT
TRUST
[LOGO]
VALUE LINE
MUTUAL FUNDS
<PAGE>
[LOGO] TO OUR VALUE LINE NEW YORK
- -------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to send you this Value Line New York Tax Exempt Trust annual
report for the 12 months ended February 29, 1996. In contrast to calendar
1994, arguably the worst year in modern bond-market history, 1995 was
decidedly favorable -- for the bond markets in general and for holders of
shares in long-term municipal bond funds in particular. In March of 1995,
the beginning of the Trust's last fiscal year, 25-year benchmark, A-rated New
York State municipal bonds were yielding about 6.4%. In February of 1996, 12
months later, the yield on bonds of the same maturity and quality had
declined by one full percentage point, to approximately 5.4%, and their
prices (moving in the opposite direction to yields) had climbed
proportionately.
To take advantage of the drop in yields over the past year, your Trust has
maintained an average portfolio maturity of slightly over 15 years for most
of the period. Shareholders therefore participated fully in the bond-market
rise, with the Trust's net asset value moving up from $9.81 a share at the
beginning of the fiscal year to $10.28 at the end, an increase of 4.8%.
Adding income distributions to the asset-value growth, the total return for
the fiscal year ended February 29, 1996, was 10.0% -- in sharp contrast to
the slightly negative return of the previous year. For the same period, the
total return on the Lehman Brothers Municipal Bond Index (National) was
11.1%. We achieved this performance while maintaining the high quality of our
portfolio holdings. As in the past, your Trust has avoided securities ranked
below investment grade (defined as Baa or higher by Moody's Investors Service
and as BBB or higher by Standard & Poor's Corporation). At the end of the
latest fiscal year, 49.7% (by market value) of the securities held carried
ratings of AA or higher (as determined by Moody's or Standard & Poor's, or by
both). The Trust holds no risky derivatives and never has. At this time we
are continuing a slightly aggressive portfolio stance while maintaining the
high quality of our holdings.
At February 29, 1996, the Trust's annualized, triple-tax-free, 30-day
dividend yield, based on actual distributions to shareholders, was 4.85%.
The annualized 30-day yield, calculated by using the yield-to-maturity
formula mandated by the Securities and Exchange Commission, was 4.40%.
We appreciate your continued confidence in Value Line, and we look forward to
serving your investment needs in the future.
Sincerely,
/s/Jean Bernhard Buttner
Jean Bernhard Buttner
CHAIRMAN
March 22, 1996
- -------------------------------------------------------------------------------
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX IS A TOTAL-RETURN PERFORMANCE
BENCHMARK FOR THE LONG-TERM, INVESTMENT-GRADE, TAX-EXEMPT BOND MARKET.
INVESTMENT-GRADE BONDS ARE RATED BAA OR HIGHER BY MOODY'S OR BBB OR HIGHER BY
STANDARD & POOR'S. RETURNS AND ATTRIBUTES FOR THE INDEX ARE CALCULATED
SEMI-MONTHLY USING APPROXIMATELY 25,000 MUNICIPAL BONDS, WHICH ARE PRICED BY
MULLER DATA CORPORATION. THE RETURNS FOR THE INDEX DO NOT REFLECT EXPENSES,
WHICH ARE DEDUCTED FROM THE TRUST'S RETURNS.
2
<PAGE>
TAX EXEMPT TRUST SHAREHOLDERS
- -------------------------------------------------------------------------------
ECONOMIC OBSERVATIONS
The pace of economic growth is quickening once again, in a clear reversal in
form from the very early part of the year. Back then, declining retail
activity, a faltering industrial sector, and an assortment of weather-related
dislocations had combined to almost bring the long-lived business expansion
to a halt. Now, by comparison, the construction markets are firming,
employment is improving, the nation's factories are somewhat busier, and the
American public is a touch more upbeat. To be sure, pockets of weakness
still exist, with chain-store sales, for example, still rather sluggish. On
the whole, though, the positives would seem to outweigh the negatives,
suggesting that GDP growth in the opening half of this year will comfortably
exceed the tepid 0.9% rate of increase recorded during the final three months
of 1995.
Moreover, we think the business uptrend will remain on track during the
second half and into 1997. The current improvement and the prospective
growth over the next several quarters, meanwhile, suggest that fears
expressed earlier this year about a widespread reversal in corporate profits
were exaggerated, although some selective weakness is likely over the next
couple of months.
Thus far, the modest increases in business activity has not generated havoc
on the pricing front. There had been some concern earlier that a pickup in
the economy -- even a limited one -- would lead to the labor and
raw-materials shortages that often precede a rise in inflation. To date,
this has not been the case. In fact, neither wholesale nor consumer
inflation shows any major signs of heating up. We caution, though, that
commodity prices have worked their way higher recently and that this uptrend
will need to be watched closely to determine whether a more worrisome pricing
scenario will eventually evolve.
3
<PAGE>
[Graph]
(Period covered is from 7/2/87 to 2/29/96)
PERFORMANCE DATA
AVERAGE ANNUAL TOTAL RETURN
12/31/95 2/29/96
---------------------------
1 year ended 17.30% 10.00%
5 years ended 9.07% 8.66%
From 7/2/87* to 8.00% 7.79%
* COMMENCEMENT OF OPERATIONS.
THE PERFORMANCE DATA QUOTED REPRESENT PAST PERFORMANCE AND ARE NO GUARANTEE
OF FUTURE PERFORMANCE. THE AVERAGE ANNUAL TOTAL RETURN INCLUDES DIVIDENDS
REINVESTED AND CAPITAL GAINS DISTRIBUTIONS ACCEPTED IN SHARES. THE INVESTMENT
RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN
INVESTMENT, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN ITS ORIGINAL COST.
4
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This page intentionally left blank.
5
<PAGE>
VALUE LINE NEW YORK TAX EXEMPT TRUST
SCHEDULE OF INVESTMENTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT RATING VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES (93.0%)
NEW YORK STATE (69.0%)
$1,000,000 Albany County, General Obligations, 5.75%, 6/1/11 ................ Aaa $ 1,039,970
500,000 City University, Certificates of Participation, Refunding,
John Jay College, 6.00%, 8/15/06 ................................. Baa1 518,060
Dormitory Authority, Revenue:
City University System:
1,990,000 Crossover Refunding, Ser. D, 5.75%, 7/1/07 ..................... Baa1 2,029,700
625,000 Ser. A, 5.625%, 7/1/16 ......................................... Baa1 618,600
1,250,000 Department of Health, 5.75%, 7/1/17.............................. Baa1 1,218,425
New York University, Refunding:
1,385,000 Ser. B, 5.00%, 7/1/09 .......................................... Aaa 1,368,976
575,000 Ser. A, 5.00%, 7/1/11 .......................................... Aaa 550,022
State University Educational Facilities:
1,500,000 Ser. A, 5.50%, 5/15/08 ......................................... Baa1 1,494,585
1,250,000 Ser. A, 5.50%, 5/15/13 ......................................... Baa1 1,224,038
1,250,000 Upstate Community Colleges,
Ser. A, 6.20%, 7/1/15 .......................................... Baa1 1,288,912
1,000,000 Energy Research and Development Authority, Service Contract Revenue,
Refunding, Western New York Nuclear Service Center, 5.375%, 4/1/04 Aaa 1,051,810
1,250,000 Environmental Facilities Corp., Revenue, Water Pollution Control,
Revolving Fund, Ser. A, 5.20%, 12/15/16 ......................... Aaa 1,205,275
1,090,000 Housing Finance Agency, Revenue, Multi-Family, Mortgage Housing,
Ser. C, Refunding, 6.45%, 8/15/14 ............................... Aa 1,127,245
Medical Care Facilities Finance Agency, Revenue, Refunding:
490,000 Hospital and Nursing Home, Ser. B, 5.50%, 2/15/22 ............... AAA* 479,387
1,000,000 Mental Health, Ser. F, 5.25%, 2/15/19 ........................... Aaa 950,110
700,000 Saint Mary's Hospital, Ser. A, 6.00%, 11/1/09 ................... Aaa 746,473
1,000,000 Niagara Falls, Water Treatment Plant, 7.25%, 11/1/11 .............. Aaa 1,190,320
890,000 Onondaga County, General Obligations, Ser. A, 5.85%, 5/1/10 ....... Aa 942,670
1,675,000 Power Authority, Revenue and General Purpose Refunding,
Ser. W, 6.50%, 1/1/08 ........................................... Aa 1,898,914
</TABLE>
6
<PAGE>
FEBRUARY 29, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT RATING VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
$2,000,000 Thruway Authority, Highway and Bridge Trust Fund,
Ser. B, 5.125%, 4/1/15 .......................................... Aaa $ 1,914,220
Triborough Bridge and Tunnel Authority, Revenue:
1,500,000 Convention Center Project, Ser. E, 6.00%, 1/1/11................. Baa1 1,552,140
1,200,000 General Purpose, Refunding, Ser. Y, 6.00%, 1/1/12 ............... Aa 1,293,192
Urban Development Corp., Revenue:
800,000 State Facilities, 5.60%, 4/1/15 ................................. Baa1 790,720
1,250,000 University Facilities Grant, 5.50%, 1/1/19 ...................... Baa1 1,213,525
-----------
TOTAL NEW YORK STATE .............................................. $27,707,289
-----------
NEW YORK CITY (16.9%)
General Obligation:
1,000,000 Ser. F, 6.50%, 2/15/08 ........................................... Baa1 1,049,340
500,000 Ser. E, 6.20%, 8/1/08 ............................................ Aaa 557,950
1,000,000 Ser. D, 6.00%, 2/15/14 ........................................... Baa1 979,540
1,000,000 Ser. F, 5.75%, 2/1/19 ............................................ Baa1 939,460
1,400,000 Ser. G, 5.75%, 2/1/20 ............................................ Baa1 1,313,606
Industrial Development Agency:
Civic Facilities Revenue:
420,000 New School for Social Research Project, 6.00%, 9/1/09 ........... Aaa 447,632
500,000 USTA National Tennis Center Project, 6.40%, 11/15/08 ............. Aaa 555,780
1,000,000 Municipal Water Finance Authority, Water and Sewer System, Revenue,
Ser. A, 5.50%, 6/15/20 ........................................... A 954,820
-----------
TOTAL NEW YORK CITY ................................................ 6,798,128
-----------
PUERTO RICO (7.1%)
Aqueduct and Sewer Authority, Revenue, Refunding:
750,000 6.25%, 7/1/12 .................................................... Baa1 805,852
500,000 5.00%, 7/1/15 .................................................... Baa1 464,800
1,500,000 Electric Power Authority, Power Revenue,
Ser. T, 6.125%, 7/1/09 ........................................... Baa1 1,593,720
-----------
TOTAL PUERTO RICO .................................................. 2,864,372
-----------
TOTAL LONG-TERM MUNICIPAL SECURITIES ............................... 37,369,789
-----------
</TABLE>
7
<PAGE>
VALUE LINE NEW YORK TAX EXEMPT TRUST
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT RATING VALUE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES (6.1%)
NEW YORK STATE (4.4%)
$ 750,000 Huntington, Union Free School District, Suffolk County,
Tax Anticipation Notes, dated 8/2/95, 4.25%, 6/27/96 ............ MIG1 $ 751,815
1,000,000 Nassau County, Bond Anticipation Notes, Ser. E, dated 6/30/95,
4.25%, 3/15/96 .................................................. MIG1 1,000,450
-----------
TOTAL NEW YORK STATE .............................................. 1,752,265
-----------
NEW YORK CITY (1.7%)
700,000 Municipal Water Finance Authority, Water and Sewer System, Revenue,
Ser. C, 3.35%, 6/15/23 .......................................... VMIG1(1) 700,000
-----------
TOTAL SHORT-TERM MUNICIPAL SECURITIES ............................. 2,452,265
-----------
TOTAL MUNICIPAL SECURITIES (99.1%)
(Cost $38,378,211) ................................................ 39,822,054
EXCESS OF CASH AND OTHER ASSETS OVER LIABILITIES (.9%) ............ 347,378
-----------
NET ASSETS (100.0%) ............................................... $40,169,432
-----------
-----------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE,
PER OUTSTANDING SHARE ........................................... $ 10.28
-----------
-----------
</TABLE>
Rated by Moody's Investors Service except for those marked by an asterisk
(*), which are rated by Standard & Poor's.
Variable-rate demand notes are considered short-term obligations. Interest
rates change every (1) day. These securities are secured by either letters of
credit or other credit-support agreements from banks. The rates listed are as
of February 29, 1996.
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
VALUE LINE NEW YORK TAX EXEMPT TRUST
STATEMENT OF ASSETS AND LIABILITIES AT
FEBRUARY 29, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Dollars
(IN THOUSANDS EXCEPT
PER-SHARE AMOUNT)
--------------------
<S> <C>
ASSETS:
Investment securities, at value (Cost $38,378) ........... $39,822
Cash ...................................................... 39
Interest receivable ....................................... 496
Receivable for Trust shares sold .......................... 18
-------
TOTAL ASSETS ............................................ 40,375
-------
LIABILITIES:
Payable for Trust shares repurchased ...................... 84
Dividends payable to shareholders ......................... 44
Accrued expenses:
Advisory fee ............................................ 19
Other ................................................... 59
-------
TOTAL LIABILITIES .................................... 206
-------
NET ASSETS ........................................... $40,169
-------
-------
NET ASSETS:
Capital stock, at $.01 par value (authorized unlimited,
outstanding 3,908,889 shares of beneficial interest)..... $ 39
Additional paid-in capital ................................ 38,262
Distribution in excess of net investment income ........... (25)
Accumulated net realized gain on investments .............. 449
Unrealized net appreciation of investments ................ 1,444
-------
NET ASSETS ........................................... $40,169
-------
-------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE,
PER OUTSTANDING SHARE ................................ $ 10.28
-------
-------
</TABLE>
STATEMENT OF OPERATIONS FOR THE YEAR ENDED
FEBRUARY 29, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Dollars
(IN THOUSANDS)
--------------
<S> <C>
INVESTMENT INCOME:
Interest Income ........................................... $2,298
------
EXPENSES:
Advisory fee .............................................. 238
Auditing and legal fees ................................... 44
Printing and stationery ................................... 20
Transfer agent fees ....................................... 15
Custodian fees ............................................ 14
Trustees' fees and expenses ............................... 12
Other ..................................................... 23
------
TOTAL EXPENSES ....................................... 366
------
NET INVESTMENT INCOME ..................................... 1,932
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net Realized Gain .................................... 1,405
Change in Unrealized Appreciation .................... 430
------
NET REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION
ON INVESTMENTS ........................................... 1,835
------
NET INCREASE IN NET ASSETS FROM OPERATIONS ................ $3,767
------
------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
VALUE LINE NEW YORK TAX EXEMPT TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED FEBRUARY 29, 1996, AND FEBRUARY 28, 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
----------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATIONS:
Net investment income ............................................ $ 1,932 $ 2,124
Net realized gain (loss) on investments .......................... 1,405 (956)
Change in net unrealized appreciation ............................ 430 (1,643)
------- -------
Net increase (decrease) in net assets from operations ............ 3,767 (475)
------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ............................................ (1,932) (2,124)
Net realized gains ............................................... -- (273)
------- -------
Net decrease in net assets from distributions .................... (1,932) (2,397)
------- -------
TRUST SHARE TRANSACTIONS:
Net proceeds from sale of shares ................................. 3,247 4,958
Net proceeds from reinvestment of distributions to shareholders .. 1,393 1,761
Cost of shares repurchased ....................................... (5,445) (8,898)
------- -------
Net decrease in net assets from Trust share transactions ......... (805) (2,179)
------- -------
TOTAL INCREASE (DECREASE) IN NET ASSETS ............................ 1,030 (5,051)
NET ASSETS:
Beginning of year ................................................ 39,139 44,190
------- -------
End of year ...................................................... $40,169 $39,139
------- -------
------- -------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
VALUE LINE NEW YORK TAX EXEMPT TRUST
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996
- -------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Value Line New York Tax Exempt Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The investment objective of the Trust is to
provide New York taxpayers with the maximum income exempt from New York
State, New York City, and federal individual income taxes, while avoiding
undue risk to principal. The Trust will invest primarily in New York State
municipal and public-authority debt obligations. The ability of the issuers
of the securities held by the Trust to meet their obligations may be affected
by economic or political developments in New York State and New York City.
The following significant accounting policies are in conformity with
generally accepted accounting principles for investment companies. Such
policies are consistently followed by the Trust in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
(A) SECURITY VALUATIONS: The Trust's investments are valued each business day
by an independent pricing service ("Service") approved by the Trustees.
Investments for which quoted bid prices in the judgement of the Service are
readily available and are representative of the bid side of the market are
valued at quotations obtained by the Service from dealers in such securities.
Other investments (which constitute a majority of the portfolio securities)
are valued by the Service, based on methods that include consideration of
yields or prices of municipal securities of comparable quality, coupon,
maturity, and type; indications as to values from dealers; and general market
conditions.
Short-term instruments maturing within 60 days will be valued at amortized
cost, which approximates value. Other assets and securities for which no
quotations are readily available will be valued in good faith at their fair
value using methods determined by the Trustees.
(B) DISTRIBUTIONS: It is the policy of the Trust to distribute all of its
investment income to shareholders. Dividends from net investment income will
be declared daily and paid monthly. Net realized capital gains, if any, are
distributed to shareholders annually. Income dividends and capital-gains
distributions are automatically reinvested in additional shares of the Trust
unless the shareholder has requested otherwise. Income earned by the Trust on
weekends, holidays, and other days on which the Trust is closed for business
is declared as a dividend on the next day on which the Trust is open for
business.
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income-tax
regulations, which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax-
basis treatment. Temporary differences do not require reclassification.
(C) FEDERAL INCOME TAXES: It is the policy of the Trust to qualify as a
regulated investment company, which can distribute tax-exempt dividends, by
complying with the provisions available to certain investment companies, as
defined in applicable sections of the Internal Revenue Code, and to
distribute all of its investment income and capital gains to its
shareholders. Therefore, no federal income-tax or excise-tax provision is
required.
(D) INVESTMENTS: Securities transactions are recorded on a trade-date basis.
Realized gains and losses from securities transactions are recorded on the
identified-cost basis. Interest income, adjusted for amortization of premium
and accretion of original-issue discounts on investments in accordance with
federal income-tax regulations, is earned from settle-
11
<PAGE>
ment date and recognized on the accrual basis. Additionally, when
appropriate, the Trust recognizes market discount when the securities are
disposed of. Securities purchased or sold on a when-issued or
delayed-delivery basis may be settled a month or more after the trade date.
2. TRUST SHARE TRANSACTIONS
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
1996 1995
-------------------
(IN THOUSANDS)
<S> <C> <C>
Shares sold .................................... 322 509
Shares issued to shareholders in
reinvestment of distributions ................ 138 183
--- ----
460 692
Shares repurchased ............................. 539 (918)
--- ----
Net (decrease) increase ........................ (79) (226)
--- ----
--- ----
</TABLE>
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of municipal securities were as follows:
<TABLE>
<CAPTION>
1996
-------------
(IN THOUSANDS)
<S> <C>
PURCHASES:
Long-term obligations ................. $43,149
Short-term obligations ................ 31,256
-------
$74,405
-------
-------
MATURITIES OR SALES:
Long-term obligations ................. $43,964
Short-term obligations ................ 33,200
-------
$77,164
-------
-------
</TABLE>
At February 29, 1996, the aggregate cost of investments for federal
income-tax purposes was $38,378,211. The aggregate appreciation and
depreciation of investments at February 29, 1996, based on a comparison of
investment values and their costs for federal income-tax purposes, was
$1,662,123 and $218,280, respectively, resulting in a net appreciation of
$1,443,843.
During its fiscal year ended February 29, 1996, the Trust Portfolio utilized
prior fiscal-year carryover losses of $882,100 to offset net realized gains
during the year.
4. INVESTMENT ADVISORY CONTRACT AND TRANSACTIONS WITH AFFILIATES
An advisory fee of $238,206 was paid or payable to Value Line, Inc. (the
Adviser) for the year ended February 29, 1996. This was computed at the rate
of 0.6 of 1% per year of the Trust's average daily net assets for the period.
The Adviser provides research, investment programs, and supervision of the
investment portfolio and pays the costs of administrative services, office
space, and compensation of administrative, bookkeeping, and clerical
personnel necessary for managing the affairs of the Trust. The Adviser also
provides persons, satisfactory to the Trustees, to act as officers of the
Trust and pays their salaries and wages. The Trust bears all other costs and
expenses in its operation. During the year ended February 29, 1996, $5,760
was paid or payable to the Adviser for printing services.
Certain officers and directors of the Adviser and its subsidiary, Value Line
Securities, Inc. (the Trust's distributor and a registered broker/dealer),
are also officers and a Trustee of the Trust.
At February 29, 1996, Value Line, Inc. owned 368,990 shares of beneficial
interest in the Trust, representing 9.4% of the outstanding shares. In
addition, certain officers and Trustees owned 18,661 shares of beneficial
interest in the Trust, representing 0.5% of the outstanding shares.
12
<PAGE>
VALUE LINE NEW YORK TAX EXEMPT TRUST
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR:
<TABLE>
<CAPTION>
YEAR ENDED ON LAST DAY OF FEBRUARY,
-------------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ...................... $ 9.81 $ 10.49 $ 10.84 $ 9.90 $ 9.50
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... .491 .523 .570 .596 .634
Net gains or losses on securities
(both realized and unrealized) .................... .470 (.611) .062 1.080 .400
------- ------- ------- ------- -------
Total from investment operations .................. .961 (.088) .632 1.676 1.034
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (.491) (.523) (.570) (.596) (.634)
Distributions from capital gains .................... -- (.069) (.412) (.140) --
------- ------- ------- ------- -------
Total distributions ............................... (.491) (.592) (.982) (.736) (.634)
------- ------- ------- ------- -------
Net asset value, end of year ............................ $ 10.28 $ 9.81 $ 10.49 $ 10.84 $ 9.90
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Total return ............................................ 10.00% (.58%) 5.98% 17.56% 11.18%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in thousands) .................. $40,169 $39,139 $44,190 $41,528 $35,478
Ratio of expenses to average net assets ................. .92% .86% .87% .85% .92%
Ratio of net investment income to average
net assets ............................................ 4.87% 5.36% 5.21% 5.82% 6.50%
Portfolio turnover rate ................................. 119% 105% 54% 137% 124%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
VALUE LINE NEW YORK TAX EXEMPT TRUST
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Value Line New
York Tax Exempt Trust (the "Trust") at February 29, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each
of the five years in the period then ended, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at February 29, 1996 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
April 19, 1996
FEDERAL TAX NOTICE (unaudited)
During the year ended February 29, 1996, the Trust paid to shareholders
$0.491 per share from net investment income. All of the Trust's dividends
from net investment income were exempt-interest dividends, excludable from
gross income for regular Federal income-tax purposes.
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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 the 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 -- VALUE LINE INTERMEDIATE BOND 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.
1995 -- VALUE LINE U.S. MULTINATIONAL COMPANY FUND'S investment objective is
maximum total return. It invests primarily in securities of U.S. companies
that have significant sales from international operations.
*AVAILABLE ONLY THROUGH THE PURCHASE OF THE GUARDIAN INVESTOR, A TAX-DEFERRED
VARIABLE ANNUITY, OR VALUE PLUS, A VARIABLE LIFE INSURANCE POLICY.
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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.
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