- --------------------------------------------------------------------------------
ANNUAL REPORT
- --------------------------------------------------------------------------------
March 31, 2000
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Value Line
Emerging
Opportunities
Fund, Inc.
[LOGO]
----------------
VALUE LINE
No-Load
Mutual
Funds
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
To Our Value Line Emerging
================================================================================
To Our Shareholders:
The Value Line Emerging Opportunities Fund completed a very strong fiscal year.
For the 12 months ended March 31, 2000, the Fund earned a total return of
93.59%, compared with a total return of 37.29% for the unmanaged Russell 2000
Index, the benchmark of small-capitalization stocks.
Your Fund invests in companies with strong operating momentum and strong stock
price momentum. In the latest fiscal year, that meant a heavy emphasis on
technology stocks, such as those in computer software, telecommunications,
semiconductors, and the internet. Biotechnology issues also contributed. Only a
small part (2% to 3%) of the performance was attributable to initial public
offerings (IPOs).
The Fund has investments in over 400 different stocks in a wide variety of
industries. We don't make large bets on any particular holding--indeed, only
three stocks make up as much as 1% of assets. Our style, rather, is to bet on
our investment process, content to hit singles and doubles that keep us in the
game. We invest primarily in companies with market capitalizations of under $2
billion. But we don't sell a stock merely because it has grown into a large-cap
company, as many of our holdings have over the past year. Currently, about half
of the Fund's holdings have a market cap under $1 billion.
The stock market turbulence in March and April highlighted the potential
volatility of this and similar funds. Investment in small-cap stocks,
particularly those of fast-growing companies, carries greater-than-average risk.
For the long pull, however, we believe the great growth potential of these
companies will make them fruitful investments.
Thank you for investing with us.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
April 15, 2000
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2
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Opportunities Fund Shareholders
================================================================================
Economic Observations
The American economy continues to perform well as we proceed through the second
quarter of 2000. Evidence of this healthy level of business activity can be
found in the strong pace of manufacturing, continued healthy gains in personal
income, and high levels of employment. Overall, we estimate that GDP growth will
approach 4% in the second quarter and average that level, or slightly better,
for the year as a whole. That would make 2000 the tenth year in a row of
sustained economic growth in this country.
Inflationary pressures, meanwhile, continue to be held in check for the most
part, with strong increases in productivity and ongoing technological
innovations being at least partially responsible for this comparative pricing
stability. Nevertheless, an increase in cost pressures could still evolve over
the next several quarters, particularly if the expected late-2000 moderation in
GDP growth does not evolve. The Federal Reserve, taking note of this potential
for higher prices, is likely to chart a fairly restrictive monetary course in
the months ahead. As such, we now expect the lead bank to vote two additional
modest interest rate increases over the course of the current year.
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3
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
================================================================================
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL]
COMPARISON OF THE CHANGE IN VALUE OF A $10,000
INVESTMENT IN THE VALUE LINE EMERGING OPPORTUNITIES
FUND, INC. AND THE RUSSELL 2000 STOCK INDEX**
Value Line Emerging Russell 2000
Opportunities Fund, Inc. Stock Index
------------------------ -----------
6/23/93 $ 10,000 $ 10,000
9/30/93 $ 11,200 $ 11,142
12/31/93 $ 12,106 $ 11,431
3/31/94 $ 11,835 $ 11,127
6/30/94 $ 11,504 $ 10,691
9/30/94 $ 12,086 $ 11,434
12/31/94 $ 12,029 $ 11,233
3/31/95 $ 12,731 $ 11,741
6/30/95 $ 13,639 $ 12,841
9/30/95 $ 15,622 $ 14,110
12/31/95 $ 14,921 $ 14,415
3/31/96 $ 15,733 $ 15,151
6/30/96 $ 16,149 $ 15,909
9/30/96 $ 16,735 $ 15,963
12/31/96 $ 16,465 $ 16,793
3/31/97 $ 15,408 $ 15,969
6/30/97 $ 18,095 $ 18,558
9/30/97 $ 21,305 $ 21,319
12/31/97 $ 18,365 $ 20,606
3/31/98 $ 19,644 $ 22,678
6/30/98 $ 18,410 $ 21,621
9/30/98 $ 14,869 $ 17,264
12/31/98 $ 19,213 $ 20,080
3/31/99 $ 19,842 $ 18,991
6/30/99 $ 22,944 $ 21,944
9/30/99 $ 23,559 $ 20,557
12/31/99 $ 32,782 $ 24,349
3/31/2000 $ 38,412 $ 26,073
From 6/23/93+ to 3/31/2000.
** The Russell 2000 Stock Index is an unmanaged index that is representative
of the smaller capitalization stocks traded in the United States. The
presentation includes reinvested dividends.
Performance Data:*
Average
Annual Total
Return
---------
1 year ended March 31, 2000 ................................. 93.59%
5 years ended March 31, 2000 ................................ 24.72%
From June 23, 1993+ to
March 31, 2000 ............................................ 21.99%
+ Commencement of operations.
* The performance data quoted represent past performance and are no guarantee
of future performance. The average annual total return and growth of an
assumed investment of $10,000 include 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.
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4
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Schedule of Investments March 31, 2000
================================================================================
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (97.0%)
ADVERTISING (1.1%)
3,500 ADVO, Inc.*............................ $ 87,500
2,200 Getty Images, Inc.*.................... 79,062
1,600 Lamar Advertising Co.
Class "A"*.......................... 72,800
3,600 Modem Media Poppe Tyson,
Inc. Class "A"* .................... 116,550
1,700 Omnicom Group, Inc..................... 158,844
1,600 True North
Communications, Inc................. 62,900
----------
577,656
AEROSPACE/DEFENSE
(0.3%)
2,500 Aeroflex Inc.*......................... 123,750
500 Alliant Techsystems, Inc.*............. 29,438
----------
153,188
AIR TRANSPORT (0.1%)
2,200 EGL, Inc.*............................. 51,425
APPAREL (0.7%)
3,000 Columbia Sportswear Co.*............... 73,500
5,000 Gildan Activewear, Inc.
Class "A"*.......................... 163,125
3,700 Guess ? Inc.*.......................... 118,400
----------
355,025
BANK--MIDWEST (0.1%)
800 Fifth Third Bancorp.................... 50,400
BEVERAGE--
ALCOHOLIC (0.2%)
1,800 Canandaigua Brands, Inc.
Class "A"*.......................... 91,800
BUILDING MATERIALS
(0.7%)
2,000 Dayton Superior Corp.
Class "A"*.......................... 50,375
5,000 Insituform Technologies, Inc.
Class "A"*.......................... 153,125
1,000 Simpson Manufacturing
Co., Inc.*.......................... 39,500
2,000 Trex Co., Inc.*........................ 76,500
700 USG Corp............................... 29,356
----------
348,856
CABLE TV (1.5%)
2,337 Adelphia Communications
Corp. Class "A"*.................... 114,513
1,300 Cablevision Systems Corp.
Class "A"*.......................... 78,975
3,600 EchoStar Communications
Corp. Class "A"*.................... 284,400
4,100 LodgeNet Entertainment
Corp.*.............................. 82,256
1,200 Pegasus Communications
Corp. Class "A"*.................... 168,900
2,800 Youthstream Media Networks,
Inc.*............................... 36,750
----------
765,794
CHEMICAL--
DIVERSIFIED (0.4%)
1,500 Brady Corp. Class "A".................. 46,781
2,400 Cambrex Corp........................... 104,400
2,000 Spartech Corp.......................... 68,750
----------
219,931
CHEMICAL--
SPECIALTY (0.3%)
1,600 Celgene Corp.*......................... 159,300
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5
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
COMPUTER &
PERIPHERALS (5.9%)
4,400 Aspeon Inc.*........................... $ 89,100
6,000 Blue Wave Systems, Inc.*............... 96,000
2,700 Brooktrout, Inc.*...................... 78,300
3,600 Cybex Computer Products
Corp.*.............................. 135,450
2,000 Emulex Corp.*.......................... 218,250
3,200 In Focus Systems, Inc.*................ 114,600
2,400 Interface Systems, Inc.*............... 159,600
2,200 Interphase Corp.*...................... 55,825
5,000 Ion Network, Inc.*..................... 168,125
1,600 M-Systems Flash Disk
Pioneers Ltd.*...................... 84,800
1,400 MRV Communications, Inc.*.............. 128,275
5,600 Media 100, Inc.*....................... 195,300
4,000 Mercury Computer Systems,
Inc.*............................... 195,500
1,200 MICROS Systems, Inc.*.................. 75,525
2,000 Network Peripherals Inc.*.............. 71,000
4,500 NYFIX, Inc.*........................... 226,687
3,000 ODS Networks, Inc.*.................... 72,000
100 Palm, Inc.*............................ 4,487
5,600 Pinnacle Systems, Inc.*................ 186,200
4,000 PSW Technologies Inc.*................. 159,000
2,000 Silicon Storage Technology,
Inc.*............................... 147,750
3,000 Splash Technology Holdings,
Inc.*............................... 37,500
2,280 Sun Microsystems, Inc.*................ 213,643
2,000 Zebra Technologies Corp.
Class "A"*.......................... 100,000
----------
3,012,917
COMPUTER SOFTWARE
& SERVICES (12.4%)
4,000 Actuate Corp.*......................... 215,250
1,600 Adobe Systems, Inc..................... 178,100
3,600 Advanced Digital Information
Corp.*.............................. 123,300
2,200 Advent Software, Inc.*................. 100,925
4,000 AremisSoft Corp.*...................... 136,000
2,300 Aspen Technology, Inc.*................ 92,862
1,900 Brio Technology, Inc.*................. 71,725
2,400 Business Objects S.A. (ADR)*........... 238,800
4,000 CACI International, Inc.
Class "A"*.......................... 119,750
6,000 CAM Data Systems, Inc.*................ 96,750
2,000 Citrix Systems, Inc.*.................. 132,500
1,700 Clarus Corporation*.................... 120,063
3,200 ClickAction Inc.*...................... 158,800
2,800 Cognizant Technology
Solutions Corp. Class "A"* ........ 175,000
1,700 Cognos Inc.*........................... 106,356
1,000 Comverse Technology, Inc.*............. 189,000
5,300 Datastream Systems, Inc.*.............. 153,700
3,750 Dendrite International, Inc.*.......... 78,516
1,400 Documentum, Inc.*...................... 109,200
10,000 Eidos PLC (ADR)*....................... 63,750
2,500 Eletronics For Imaging Inc.*........... 150,000
1,700 Exchange Applications, Inc.*........... 89,968
4,000 4Front Technologies, Inc.*............. 83,000
4,000 Hall Kinion & Associates, Inc.*........ 96,250
3,000 Harbinger Corp.*....................... 87,375
3,200 Henry (Jack) & Associates, Inc......... 118,000
2,900 InfoCure Corp.*........................ 50,387
1,800 Integral Systems, Inc.*................ 81,000
3,000 Interleaf, Inc.*....................... 141,000
1,600 IONA Technologies PLC
(ADR)*.............................. 118,400
3,000 ISG International Software
Group, Ltd.*........................ 62,625
5,000 Loronix Information Systems,
Inc.*............................... 181,563
2,000 Manugistics Group, Inc.*............... 100,500
2,800 MapInfo Corp.*......................... 109,200
4,200 Mercury Interactive Corp.*............. 332,850
1,000 Micromuse Inc.*........................ 138,812
1,400 MicroStrategy Inc. Class "A"*.......... 121,888
2,000 National Instruments Corp.*............ 93,875
2,000 NVIDIA Corp.*.......................... 168,969
1,800 Packeteer, Inc.*....................... 63,000
1,200 Paychex, Inc........................... 62,850
1,700 Remedy Corp.*.......................... 71,613
5,700 S3 Incorporated*....................... 119,700
1,000 Saga Systems, Inc.*.................... 35,750
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6
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
March 31, 2000
================================================================================
Shares Value
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE
& SERVICES (12.4%)
(Continued)
3,000 Sagent Technology, Inc.*............... 86,438
5,000 Sapiens International Corp.
N.V.*............................... 61,250
2,200 ScanSource, Inc.*...................... 78,100
5,200 Serena Software, Inc.*................. 165,750
1,700 Siebel Systems, Inc.*.................. 203,044
700 SilverStream Software, Inc.*........... 51,712
4,300 Sybase, Inc.*.......................... 87,344
2,700 Tecnomatix Technologies Ltd.*.......... 117,112
7,000 Versant Corp.*......................... 94,063
----------
6,283,735
DIVERSIFIED
COMPANIES (0.2%)
700 Textron, Inc........................... 42,612
1,400 Tyco International Ltd................. 69,825
----------
112,437
DRUG (8.3%)
3,000 AVI BioPharma, Inc.*................... 37,500
1,800 Albany Molecular Research,
Inc.*............................... 105,075
1,800 Andrx Corp.*........................... 207,900
4,000 Aurora Biosciences Corp.*.............. 163,500
8,000 AxyS Pharmaceuticals, Inc.*............ 61,500
2,000 Biogen, Inc.*.......................... 139,750
2,200 Biovail Corporation
International*...................... 97,488
4,000 Bone Care International, Inc.*......... 69,000
2,000 CV Therapeutics, Inc.*................. 100,375
2,200 Cerus Corp.*........................... 106,150
7,000 Corvas International, Inc.*............ 77,000
2,200 CuraGen Corp.*......................... 102,850
8,000 Cytoclonal Pharmaceutics Inc.*......... 82,500
3,800 DUSA Pharmaceuticals, Inc.*............ 90,962
5,200 Embrex, Inc.*.......................... 81,900
3,000 Enzon, Inc.*........................... 113,063
1,400 Forest Laboratories, Inc.*............. 118,300
3,300 Gene Logic, Inc.*...................... 138,806
1,000 Genentech, Inc.*....................... 152,000
2,800 Hyseq, Inc.*........................... 124,950
1,100 IDEC Pharmaceuticals Corp.*............ 108,075
1,400 ImClone Systems, Inc.*................. 107,625
5,550 Ivax Corp.*............................ 151,237
3,375 Jones Pharma Incorporated.............. 102,516
5,250 King Pharmaceuticals, Inc.*............ 165,375
3,000 Kos Pharmaceuticals, Inc.*............. 42,750
4,000 LifeCell Corp.*........................ 27,500
800 MGI Pharma, Inc.*...................... 32,250
1,900 Medicis Pharmaceutical Corp.
Class "A"*.......................... 76,000
1,100 Millennium Pharmaceuticals,
Inc.*............................... 142,862
5,400 NPS Pharmaceuticals, Inc.*............. 81,338
4,000 Neurocrine Biosciences, Inc.*.......... 93,000
7,000 Orphan Medical, Inc.*.................. 76,125
5,500 PenWest Pharmaceuticals Co.*........... 67,719
2,000 Pharmacopeia, Inc.*.................... 98,000
7,000 SciClone Pharmaceuticals,
Inc.*............................... 107,625
3,232 Shire Pharmaceuticals Group
PLC (ADR)*.......................... 165,640
4,000 SpectRx, Inc.*......................... 56,500
6,500 Targeted Genetics Corp.*............... 90,187
5,300 Taro Pharmaceutical Industries,
Ltd.*............................... 56,975
4,700 Titan Pharmaceuticals, Inc.*........... 146,288
6,500 Valentis, Inc.*........................ 73,937
----------
4,240,093
EDUCATIONAL
SERVICES (0.4%)
3,000 Learning Tree International,
Inc.*............................... 106,500
2,300 National Computer Systems,
Inc................................. 116,725
----------
223,225
ELECTRIC UTILITY--
CENTRAL (0.2%)
1,000 AES Corp. (The)*....................... 78,750
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7
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
ELECTRIC UTILITY--
WEST (0.7%)
3,800 Calpine Corp.*......................... $ 357,200
ELECTRICAL
EQUIPMENT (1.5%)
4,000 AAON, Inc.*............................ 70,250
2,000 C&D Technologies, Inc.................. 118,000
3,600 Cable Design Technologies
Corp.*.............................. 122,175
3,300 GaSonics International Corp.*.......... 130,866
1,300 Kopin Corp.*........................... 89,375
2,200 Power-One, Inc.*....................... 132,825
1,500 Technitrol, Inc........................ 87,375
----------
750,866
ELECTRONICS (9.0%)
1,100 Alpha Industries, Inc.*................ 104,500
1,300 Amphenol Corp. Class "A"*.............. 132,925
2,250 ANADIGICS, Inc.*....................... 148,500
1,800 Anaren Microwave, Inc.*................ 172,575
4,000 CTS Corp............................... 228,000
2,400 Cree, Inc.*............................ 270,900
1,500 DII Group, Inc.*....................... 169,594
6,000 Daktronics, Inc.*...................... 60,750
1,400 Exar Corp.*............................ 100,187
4,500 FEI Company*........................... 133,875
2,000 Gemstar International
Group Ltd.*......................... 172,000
800 Gilat Satellite Networks Ltd.*......... 93,800
6,000 Herley Industries, Inc.*............... 109,125
4,500 Interlink Electronics*................. 429,188
1,856 JDS Uniphase Corp.*.................... 223,764
1,300 Micrel, Inc.*.......................... 124,800
5,000 Nu Horizons Electronics Corp.*......... 110,625
1,600 Plexus Corp.*.......................... 106,600
1,900 Rogers Corp.*.......................... 119,225
1,800 Sawtek Inc.*........................... 94,612
5,300 Signal Technology Corp.*............... 138,463
2,600 Symbol Technologies, Inc............... 214,013
2,666 Three-Five Systems, Inc.*.............. 159,960
6,000 Titan Corp.*........................... 306,000
5,000 Universal Electronics Inc.*............ 121,250
3,000 Valence Technology, Inc.*.............. 70,687
2,800 Varian Medical Systems, Inc.*.......... 127,750
5,000 Viasystems Group, Inc.*................ 77,500
1,500 Virata Corporation*.................... 149,813
5,300 Xicor, Inc.*........................... 74,862
----------
4,545,843
ENTERTAINMENT (1.4%)
1,200 CBS Corp.*............................. 67,950
800 Clear Channel
Communications, Inc.*............... 55,250
1,200 Cox Radio, Inc. Class "A"*............. 100,800
2,000 Cumulus Media, Inc.
Class "A"*.......................... 28,750
2,000 Emmis Communications Corp.
Class "A"*.......................... 93,000
1,500 Entercom Communications
Corp.*.............................. 76,500
4,700 TCI Satellite Entertainment,
Inc. Class "A"* .................... 89,888
4,000 USA Networks, Inc.*.................... 90,250
800 Univision Communications,
Inc. Class "A"*..................... 90,400
----------
692,788
FINANCIAL SERVICES--
DIVERSIFIED (0.8%)
4,000 Ace Cash Express, Inc.*................ 68,500
3,000 Administaff, Inc.*..................... 117,750
100 Digitas Inc.*.......................... 2,450
2,300 Investment Technology
Group, Inc.*........................ 81,075
1,400 Metris Companies Inc................... 54,425
900 Providian Financial Corp............... 77,962
----------
402,162
FOOD PROCESSING (0.4%)
3,300 Hain Food Group, Inc.*................. 93,431
1,500 Keebler Foods Co....................... 43,031
1,800 McCormick & Co., Inc................... 58,050
----------
194,512
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8
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
March 31, 2000
================================================================================
Shares Value
- --------------------------------------------------------------------------------
FOREIGN
TELECOMMUNICATIONS
(1.2%)
1,600 AT&T Canada, Inc. Class "B"
(ADR)*.............................. $ 97,600
3,800 Euro99.Com A/S (ADR)*.................. 79,325
1,860 Nortel Networks Corp................... 234,360
1,900 Rogers Cantel Mobile
Communications, Inc.
Class "B"* ......................... 76,831
3,000 Vimpel-Communications,
Open Joint Stock Co.
(ADR)* ............................. 126,937
----------
615,053
FURNITURE/HOME
FURNISHINGS (0.1%)
2,250 Ethan Allen Interiors, Inc............. 56,250
HEALTHCARE INFORMATION
SYSTEMS (0.5%)
7,000 Hooper Holmes, Inc..................... 240,188
HOTEL/GAMING (0.2%)
4,000 Argosy Gaming Company*................. 57,000
2,600 Station Casinos, Inc.*................. 56,712
----------
113,712
HOUSEHOLD
PRODUCTS (0.8%)
3,600 Church & Dwight Co., Inc............... 61,875
800 Kimberly-Clark Corp.................... 44,800
6,000 Salton, Inc.*.......................... 260,250
1,500 Scotts Company (The)
Class "A"*.......................... 63,000
----------
429,925
INDUSTRIAL
SERVICES (1.7%)
5,800 Actrade International, Ltd.*........... 93,525
600 Catalina Marketing Corp.*.............. 60,750
2,200 Quanta Services, Inc.*................. 133,512
4,000 SCP Pool Corp.*........................ 122,500
2,300 SmartForce PLC (ADR)*.................. 105,513
2,800 TeleTech Holdings, Inc*................ 96,600
3,700 URS Corp.*............................. 48,563
2,000 Volt Information Sciences,
Inc.*............................... 71,875
1,800 WebTrends Corp.*....................... 129,600
----------
862,438
INTERNET (2.7%)
200 Be Free, Inc.*......................... 4,400
1,300 Datalink.net, Inc.*.................... 82,794
2,600 Exodus Communications, Inc.*........... 365,300
200 FirstWorld Communications
Inc. Class "B"*..................... 4,075
2,800 IntraNet Solutions, Inc.*.............. 128,800
100 iPrint.com, Inc.*...................... 1,925
2,000 Macromedia, Inc.*...................... 180,625
1,400 Netopia, Inc.*......................... 100,712
500 Netpliance, Inc.*...................... 7,250
4,000 Netsol International, Inc.*............ 259,000
100 OTG Software, Inc.*.................... 4,031
100 Onvia.com, Inc.*....................... 2,113
1,500 Primus Knowledge Solutions,
Inc.*............................... 129,000
1,400 S1 Corp.*.............................. 119,963
100 Selectica, Inc.*....................... 8,825
----------
1,398,813
MACHINERY (0.5%)
1,000 Briggs & Stratton Corp................. 41,125
2,700 Donaldson Co., Inc..................... 60,919
1,500 Dover Corp............................. 71,812
1,600 Helix Technology Corp.................. 96,100
----------
269,956
MANUFACTURED HOUSING/
RECREATIONAL
VEHICLE (0.4%)
3,375 Monaco Coach Corp.*.................... 64,125
1,500 Oshkosh Truck Corp..................... 46,594
4,000 Winnebago Industries, Inc.............. 72,250
----------
182,969
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9
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
MARITIME (0.2%)
3,600 A.C.L.N. Ltd.*......................... $ 93,600
MEDICAL SERVICES
(0.9%)
2,400 Accredo Health, Inc.*.................. 79,500
2,800 Advance Paradigm, Inc.*................ 33,250
7,000 Interleukin Genetics, Inc.*............ 70,437
800 Myriad Genetics, Inc.*................. 48,200
2,200 Quest Diagnostics, Inc.*............... 87,450
2,000 Syncor International Corp.*............ 66,000
1,300 Wellpoint Health
Networks, Inc.*..................... 90,838
----------
475,675
MEDICAL SUPPLIES (4.7%)
6,000 Advanced Neuromodulation
Systems, Inc.*...................... 114,000
2,000 Allergan, Inc.......................... 100,000
2,800 Alpharma Inc. Class "A"................ 102,900
16,000 Aradigm Corp.*......................... 334,000
4,533 Bindley Western Industries,
Inc................................. 61,479
6,000 Candela Corp.*......................... 82,500
3,000 Cytyc Corp.*........................... 144,750
4,000 Digene Corp.*.......................... 184,000
3,000 Genzyme Corp.-Surgical
Products Division*.................. 35,250
2,000 Inamed Corp.*.......................... 99,000
500 Johnson & Johnson...................... 35,031
4,542 Medtronic, Inc......................... 233,629
8,600 Paradigm Medical Industries,
Inc.*............................... 86,000
2,000 Patterson Dental Co.*.................. 76,500
4,000 PolyMedica Corp.*...................... 235,000
2,800 Techne Corp.*.......................... 193,200
2,000 X-ceed, Inc.*.......................... 48,000
4,000 Zoll Medical Corp.*.................... 205,000
----------
2,370,239
METAL FABRICATING (0.3%)
4,000 Shaw Group, Inc.*...................... 141,000
NEWSPAPER (0.4%)
1,800 Central Newspapers, Inc.
Class "A"........................... 60,525
1,100 Dow Jones & Co., Inc................... 78,994
1,500 McClatchy Co. (The)
Class "A"........................... 49,125
----------
188,644
OFFICE EQUIPMENT &
SUPPLIES (0.2%)
1,000 Pitney Bowes, Inc...................... 44,687
2,250 Staples, Inc.*......................... 45,000
----------
89,687
OILFIELD SERVICES/
EQUIPMENT (0.3%)
2,300 Hanover Compressor Co.*................ 130,812
PACKAGING &
CONTAINER (0.0%)
100 IFCO Systems N.V.*..................... 2,288
PRECISION
INSTRUMENT (2.9%)
2,000 Cognex Corp.*.......................... 115,375
1,900 II-VI Inc.*............................ 72,200
2,600 Keithley Instruments, Inc.............. 123,825
2,400 LTX Corp.*............................. 108,450
3,700 Measurement Specialties,
Inc.*............................... 93,656
2,400 Mettler Toledo International,
Inc.*............................... 98,250
1,200 Newport Corp........................... 162,000
4,500 Odetics, Inc. Class "A"*............... 61,875
2,250 Orbotech Ltd.*......................... 191,250
1,600 PerkinElmer, Inc....................... 106,400
3,000 Varian, Inc.*.......................... 115,125
2,400 Waters Corp.*.......................... 228,600
----------
1,477,006
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10
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Value Line Emerging Opportunities Fund, Inc.
March 31, 2000
================================================================================
Shares Value
- --------------------------------------------------------------------------------
PUBLISHING (0.4%)
6,750 Advanced Marketing
Services, Inc....................... $ 140,062
1,300 Readers Digest Association,
Inc. Class "A" ..................... 45,988
----------
186,050
R.E.I.T. (0.2%)
2,000 Pinnacle Holdings, Inc.*............... 110,500
RECREATION (0.5%)
1,000 Harley-Davidson, Inc................... 79,375
4,500 JAKKS Pacific, Inc.*................... 97,031
1,200 Royal Caribbean Cruises Ltd............ 33,600
3,300 THQ, Inc.*............................. 58,987
----------
268,993
RESTAURANT (1.2%)
1,700 Applebee's International, Inc.......... 47,813
3,300 Brinker International, Inc.*........... 97,969
2,900 Cheesecake Factory, Inc. (The)*........ 120,712
2,500 Darden Restaurants, Inc................ 44,531
4,200 Jack In The Box, Inc.*................. 89,513
4,000 RARE Hospitality
International, Inc.*................ 77,750
4,800 Ruby Tuesday, Inc...................... 84,000
2,200 Sonic Corp.*........................... 59,950
----------
622,238
RETAIL BUILDING
SUPPLY (0.1%)
1,280 Lowe's Companies, Inc.................. 74,720
RETAIL--SPECIAL
LINES (5.3%)
2,000 Abercrombie & Fitch Co.
Class "A"*.......................... 32,000
2,800 American Eagle Outfitters, Inc.* 106,225
4,000 Audiovox Corp. Class "A"*.............. 174,500
4,800 Braun's Fashions Corp.*................ 121,200
4,500 Charlotte Russe Holding, Inc.*......... 77,062
7,000 Chico's FAS, Inc.*..................... 118,672
1,600 Circuit City Stores, Inc.-
Circuit City Group ................. 97,400
2,250 Cost Plus, Inc.*....................... 76,078
2,300 Damark International, Inc.
Class "A"*.......................... 87,688
2,500 Deb Shops, Inc......................... 34,375
1,200 Dollar Tree Stores, Inc.*.............. 62,550
3,750 Fossil, Inc.*.......................... 87,891
4,000 Haverty Furniture Companies,
Inc................................. 42,500
1,600 Insight Enterprises, Inc.*............. 58,300
4,500 Intertan, Inc.*........................ 61,875
2,835 Intimate Brands, Inc. Class "A"........ 116,235
2,000 Linens `N' Things, Inc.*............... 68,500
2,500 Lithia Motors, Inc. Class "A"*......... 38,125
3,200 Michaels Stores, Inc.*................. 130,400
2,700 PC Connection, Inc.*................... 76,275
3,750 Quiksilver, Inc.*...................... 65,859
3,000 Ross Stores, Inc....................... 72,187
4,000 Sonic Automotive, Inc.
Class "A"*.......................... 37,750
1,200 Talbots, Inc. (The).................... 70,650
1,200 Tandy Corp............................. 60,900
2,000 Tiffany & Co........................... 167,250
2,400 Tweeter Home Entertainment
Group, Inc.*........................ 106,200
3,700 Ultimate Electronics, Inc.*............ 80,938
2,400 ValueVision International, Inc.
Class "A"* ......................... 99,300
3,450 Whitehall Jewellers, Inc.*............. 81,075
5,850 Wilsons The Leather
Experts Inc.*....................... 78,975
2,000 Zale Corp.*............................ 94,375
----------
2,683,310
RETAIL STORE (0.8%)
3,000 Ames Dept Stores, Inc.*................ 73,688
2,500 BJ's Wholesale Club Inc.*.............. 96,562
3,000 Family Dollar Stores, Inc.............. 62,438
1,000 Kohl's Corp.*.......................... 102,500
800 Target Corp............................ 59,800
----------
394,988
- --------------------------------------------------------------------------------
11
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
SEMICONDUCTOR (10.9%)
3,600 ASM International N.V.*................ $ 104,400
2,200 ATMI, Inc.*............................ 105,050
4,000 Applied Micro Circuits Corp.*.......... 600,250
2,400 Applied Science &
Technology, Inc.*................... 72,600
2,000 Asyst Technologies, Inc.*.............. 117,000
2,200 Conexant Systems, Inc.*................ 156,200
1,600 Cymer, Inc.*........................... 80,000
2,200 Dallas Semiconductor Corp.............. 77,275
2,600 Electroglas, Inc.*..................... 89,050
1,900 IBIS Technology Corp.*................. 171,000
3,600 ICOS Vision Systems
Corporation N.V.*................... 120,600
2,500 International Rectifier Corp.*......... 95,312
15,000 Mattson Technology, Inc.*.............. 639,375
2,500 Nanometrics, Inc.*..................... 121,875
3,100 Pericom Semiconductor Corp.*........... 110,631
2,000 PMC-Sierra, Inc.*...................... 407,375
2,000 QLogic Corp.*.......................... 271,000
2,000 RF Micro Devices Inc.*................. 268,750
8,000 Semitool, Inc.*........................ 145,500
1,000 Silicon Image, Inc.*................... 71,625
100 Silicon Laboratories Inc.*............. 8,850
2,400 Siliconix, Inc.*....................... 228,150
26,200 TelCom Semiconductor, Inc.*............ 792,550
2,700 TranSwitch Corp.*...................... 259,537
3,700 TriQuint Semiconductor,
Inc.*............................... 271,950
2,500 Varian Semiconductor
Equipment Associates,
Inc.* .............................. 159,062
----------
5,544,967
SEMICONDUCTOR
CAPITAL
EQUIPMENT (0.6%)
2,400 Electro Scientific Industries,
Inc.*............................... 139,200
2,900 Kulicke & Soffa
Industries Inc.*.................... 185,781
----------
324,981
SHOE (0.6%)
2,250 Kenneth Cole Productions,
Inc. Class "A"* .................... 88,313
4,400 Madden (Steven), Ltd.*................. 83,600
2,400 Timberland Co. Class "A"*.............. 122,400
----------
294,313
TELECOMMUNICATIONS
EQUIPMENT (7.0%)
3,500 Andrew Corp.*.......................... 80,063
5,000 Arguss Holdings, Inc.*................. 111,875
1,600 Black Box Corp.*....................... 110,775
3,800 C-Cor.net Corp.*....................... 186,200
2,900 California Amplifier, Inc.*............ 89,900
5,600 Comdial Corp.*......................... 73,500
3,000 CommScope, Inc.*....................... 136,875
3,000 Communications Systems,
Inc................................. 52,500
2,400 DSP Group, Inc.*....................... 158,400
600 Efficient Networks, Inc.*.............. 93,450
5,000 Glenayre Technologies Inc.*............ 87,813
2,000 Harmonic, Inc.*........................ 166,500
3,800 International Fibercom, Inc.*.......... 90,250
3,800 InterVoice-Brite, Inc.*................ 109,725
1,700 MasTec, Inc.*.......................... 151,300
1,400 Natural MicroSystems Corp.*............ 120,050
8,000 NETRIX Corp.*.......................... 161,500
1,700 NICE Systems Ltd. (ADR)*............... 121,125
5,500 Oak Technology, Inc.*.................. 105,875
3,000 Polycom, Inc.*......................... 237,563
2,000 Powerwave Technologies,
Inc.*............................... 250,000
2,800 Scientific-Atlanta, Inc................ 177,625
4,500 SpectraSite Holdings, Inc.*............ 127,406
2,600 Tekelec Inc.*.......................... 96,525
4,000 Tollgrade Communications,
Inc.*............................... 212,000
5,000 Westell Technologies, Inc.
Class "A"*.......................... 159,375
1,800 Xeta Corp.*............................ 81,900
----------
3,550,070
- --------------------------------------------------------------------------------
12
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
March 31, 2000
================================================================================
Shares Value
- --------------------------------------------------------------------------------
TELECOMMUNICATION
SERVICES (4.0%)
7,000 ACT Teleconferencing, Inc.*............ $ 87,937
1,350 Allegiance Telecom, Inc.*.............. 108,844
1,500 Celeritek, Inc.*....................... 94,875
2,400 CoreComm Ltd.*......................... 105,600
4,500 Corsair Communications,
Inc.*............................... 86,063
3,900 DyCom Industries, Inc.*................ 190,125
5,000 FiberNet Telecom Group,
Inc.*............................... 90,000
2,400 FirstCom Corp.*........................ 82,050
1,600 Global Crossing Ltd.*.................. 65,500
2,600 LCC International, Inc.
Class "A"*.......................... 103,025
1,100 Leap Wireless
International, Inc.*................ 108,556
1,000 Level 3 Communications,
Inc.*............................... 105,750
1,500 MGC Communications, Inc.*.............. 107,250
2,000 Metromedia Fiber Network,
Inc. Class "A"* .................... 193,375
2,300 Network Access Solutions
Corp.*.............................. 50,600
2,400 Performance Technologies,
Inc.*............................... 104,250
2,300 Primus Telecommunications
Group, Inc.*........................ 118,881
3,000 Puma Technology, Inc.*................. 151,875
1,800 Qwest Communications
International, Inc.*................ 87,300
-----------
2,041,856
THRIFT (0.1%)
3,100 W Holding Company, Inc................. 29,741
TOILETRIES/
COSMETICS (0.1%)
1,000 Estee Lauder Companies, Inc.
(The) Class "A" .................... 50,063
TRUCKING/
TRANSPORTATION
LEASING (0.5%)
4,000 Celadon Group, Inc.*................... 103,500
1,500 Forward Air Corp.*..................... 35,531
2,000 Landstar System, Inc.*................. 109,500
-----------
248,531
WATER UTILITY (0.1%)
4,500 Southwest Water Co..................... 48,375
-----------
TOTAL COMMON STOCKS
AND TOTAL INVESTMENT
SECURITIES (97.0%)
(Cost $31,301,241) .................... 49,279,854
-----------
REPURCHASE AGREEMENT (3.0%)
(Including accrued interest)
$1,500,000 Collateralized by $1,188,000
U.S. Treasury Bonds
8.875%, due 08/15/17,
with a value of $1,529,590
(with Warburg Dillon
Read LLC 6.25%,
dated 3/31/00, due
4/3/00, delivery
value $1,500,781)............... 1,500,260
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES (0.0%) ..................... 4,340
-----------
NET ASSETS (100%) .................................. $50,784,454
===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE, PER
OUTSTANDING SHARE
($50,784,454 / 2,033,425
shares outstanding) .............................. $ 24.97
===========
* Non-income producing
(ADR) American Depositary Receipts
See Notes to Financial Statements
- --------------------------------------------------------------------------------
13
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Statement of Assets and Liabilities
at March 31, 2000
================================================================================
Assets:
Investment securities, at value
(Cost--$31,301,241) ........................... $49,279,854
Repurchase agreement
(Cost--$1,500,260) ............................ 1,500,260
Cash ........................................... 154,188
Receivable for securities sold ................. 596,536
Receivable for capital shares sold ............. 433,300
Dividends receivable ........................... 3,974
-----------
Total Assets ............................. 51,968,112
-----------
Liabilities:
Payable for securities purchased ............... 1,084,666
Payable for capital shares repurchased ......... 9,709
Accrued expenses:
Advisory fee payable ......................... 34,401
Service and distribution plan
fees payable ............................... 11,467
Other ........................................ 43,415
-----------
Total Liabilities ........................ 1,183,658
-----------
Net Assets ..................................... $50,784,454
===========
Net Assets consist of:
Capital stock, at $.001 par value
(authorized 300,000,000,
outstanding 2,033,425 shares) ................ $ 2,034
Additional paid-in capital ..................... 26,257,434
Undistributed net realized gain
on investments ............................... 6,546,373
Net unrealized appreciation
of investments ............................... 17,978,613
-----------
Net Assets ..................................... $50,784,454
===========
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share
($50,784,454 / 2,033,425
shares outstanding) .......................... $ 24.97
===========
Statement of Operations
for the year ended March 31, 2000
================================================================================
Investment Income:
Interest income ................................ $ 65,657
Dividend income (net of foreign
withholding tax of $296) ..................... 48,887
-----------
Total Income ............................. 114,544
-----------
Expenses:
Advisory fee (note 4) .......................... 238,589
Service and distribution plan fee
(note 4) ..................................... 79,529
Custodian fees ................................. 61,839
Auditing and legal fees ........................ 40,378
Accounting and bookkeeping expense ............. 32,400
Registration and filing fees ................... 23,044
Directors' fees and expenses ................... 23,004
Printing ....................................... 20,619
Insurance, dues and other ...................... 9,949
Transfer agent fees ............................ 8,299
-----------
Total expenses before fees waived
and custody credits ...................... 537,650
Less: advisory and service and
distribution plan fees waived............. (109,244)
Less: custody credits ...................... (7,957)
-----------
Net Expenses ............................... 420,449
-----------
Net Investment Loss ............................ (305,905)
-----------
Net Realized and Unrealized Gain
on Investments:
Net Realized Gain .......................... 8,847,788
Change in Net Unrealized
Appreciation ............................. 13,241,090
-----------
Net Realized Gain and Change in
Net Unrealized Appreciation
on Investments ............................... 22,088,878
-----------
Net Increase in Net Assets
from Operations .............................. $21,782,973
===========
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Statement of Changes in Net Assets
for the years ended March 31, 2000 and 1999
================================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 2000 March 31, 1999
-------------------------------
<S> <C> <C>
Operations:
Net investment loss ............................................... $ (305,905) $ (183,035)
Net realized gain (loss) on investments ........................... 8,847,788 (1,060,364)
Change in net unrealized appreciation ............................. 13,241,090 1,539,399
-------------------------------
Net increase in net assets from operations......................... 21,782,973 296,000
-------------------------------
Distributions to Shareholders:
Net realized gain from investment transactions .................... (919,488) (374,217)
-------------------------------
Capital Share Transactions:
Proceeds from sale of shares ...................................... 24,072,879 3,510,733
Proceeds from reinvestment of distributions to shareholders........ 916,146 365,602
Cost of shares repurchased ........................................ (16,628,899) (3,726,932)
-------------------------------
Net increase from capital share transactions....................... 8,360,126 149,403
-------------------------------
Total Increase in Net Assets ........................................ 29,223,611 71,186
Net Assets:
Beginning of year ................................................. 21,560,843 21,489,657
-------------------------------
End of year ....................................................... $ 50,784,454 $ 21,560,843
===============================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
15
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Notes to Financial Statements
================================================================================
1. Significant Accounting Policies
Value Line Emerging Opportunities Fund, Inc., formerly Value Line Small-Cap
Growth Fund, Inc., (the "Fund") is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end management investment company
whose primary investment objective is long-term growth of capital. The Fund
invests primarily in "small-cap" common stocks.
The following significant accounting policies are in conformity with generally
accepted accounting principles for investment companies. Such policies are
consistently followed by the Fund 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 Valuation. Securities listed on a securities exchange and
over-the-counter securities traded on the NASDAQ national market are valued at
the closing sales price on the date as of which the net asset value is being
determined. In the absence of closing sales prices for such securities and for
securities traded in the over-the-counter market, the security is valued at the
midpoint between the latest available and representative asked and bid prices.
Securities for which market quotations are not readily available or which are
not readily marketable and all other assets of the Fund are valued at fair value
as the Board of Directors may determine in good faith. Short-term instruments
with maturities of 60 days or less at the date of purchase are valued at
amortized cost, which approximates market value.
(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 of the repurchase
transaction, including accrued interest. 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) 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 all of its taxable income to its shareholders.
Therefore, no federal income tax or excise tax provision is required.
(D) Security Transactions and Distributions. Security transactions are accounted
for on the date the securities are purchased or sold. Interest income is accrued
as earned. Realized gains and losses on sales of securities are calculated for
financial accounting purposes and federal income tax purposes on the identified
cost basis. Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Distributions are determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
Permanent book-tax differences relating to shareholder distributions have been
reclassified within the composition of the net asset accounts. In the current
year the Fund reclassified $305,905 from accumulated net investment loss to
undistributed net realized gain on investments. Net investment loss, net
realized gain, and net assets were not affected by this reclassification.
- --------------------------------------------------------------------------------
16
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
March 31, 2000
================================================================================
2. Capital Share Transactions
Transactions in capital stock, were as follows:
Year Ended Year Ended
March 31, March 31,
2000 1999
-------------------------
Shares sold ......................... 1,193,793 304,372
Shares issued to shareholders
in reinvestment of
distributions ..................... 48,041 32,070
-------------------------
1,241,834 336,442
Shares repurchased .................. 837,228 314,846
-------------------------
Net increase ........................ 404,606 21,596
=========================
3. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, were as
follows:
Year Ended
March 31, 2000
--------------
PURCHASES:
Investment Securities ............... $38,653,045
===========
SALES:
Investment Securities ............... $32,078,748
===========
At March 31, 2000, the aggregate cost of investment securities and repurchase
agreement for federal income tax purposes was $32,801,501. The aggregate
appreciation and depreciation of investments at March 31, 2000, based on a
comparison of investment values and their costs for federal income tax purposes
was $19,908,822 and $1,930,209, respectively, resulting in a net appreciation of
$17,978,613.
4. Advisory Fees, Service and Distribution Plan Fees and Transactions With
Affiliates
An advisory fee of $143,291 was paid or payable to Value Line, Inc., the Fund's
investment adviser (the "Adviser") for the period from October 7, 1999 to March
31, 2000. Advisory fees amounting to $95,298 from April 1, 1999 to October 6,
1999 were voluntarily waived by the Adviser. The fee was computed at the annual
rate of .75 of 1% of the daily net assets. The Adviser provides research,
investment programs and supervision of the investment portfolio and pays costs
of certain administrative services and office space. 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.
The Fund has a Service and Distribution Plan (the "Plan"), adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, for the payment of certain
expenses incurred by Value Line Securities, Inc. (the "Distributor"), a
wholly-owned subsidiary of the Adviser, in advertising, marketing and
distributing the Fund's shares and for servicing the Fund's shareholders, at an
annual rate of 0.25% of the Fund's average daily net assets. Fees amounting to
$65,583 for the period June 29, 1999 to March 31, 2000 were paid or payable to
the Distributor, and fees amounting to $13,946 for the period April 1, 1999 to
June 28, 1999, were voluntarily waived by the Distributor.
For the year ended March 31, 2000, the Fund's expenses were reduced by $7,957
under a custody credit arrangement with the Custodian.
Certain officers and directors of the Adviser and the Distributor are also
officers and a director of the Fund. During the period ended March 31, 2000, the
Fund paid brokerage commissions totaling $14,865 to the Distributor, a
registered broker/dealer, which clears its transactions through unaffiliated
brokers.
At March 31, 2000, the Adviser and/or affiliated companies and the Value Line,
Inc., Profit Sharing and Savings Plan owned 1,426,468 shares of the Fund's
capital stock, representing 70.2% of the outstanding shares. In addition,
certain officers and directors of the Fund owned 72,786 shares of capital stock,
representing 3.6% of the outstanding shares.
- --------------------------------------------------------------------------------
17
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Years Ended March 31,
------------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ...... $ 13.24 $ 13.37 $ 12.67 $ 15.11 $ 12.33
------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss ................... (.15)(3) (.11)(3) (.15) (.13) (.18)
Net gains or (losses) on securities
(both realized and unrealized) ...... 12.39 .21 3.34 (.08) 3.08
------------------------------------------------------------------------
Total from investment operations ...... 12.24 .10 3.19 (.21) 2.90
------------------------------------------------------------------------
Less distributions:
Distributions from realized gains ..... (.51) (.23) (2.49) (2.23) (.12)
------------------------------------------------------------------------
Total distributions ................... (.51) (.23) (2.49) (2.23) (.12)
------------------------------------------------------------------------
Net asset value, end of year ............ $ 24.97 $ 13.24 $ 13.37 $ 12.67 $ 15.11
========================================================================
Total return ............................ 93.59% 1.01% 27.50% (2.07)% 23.58%
========================================================================
Ratios/Supplemental Data:
Net assets, end of year (in thousands) .. $ 50,784 $ 21,561 $ 21,490 $ 16,974 $ 19,106
Ratio of operating expenses to
average net assets .................... 1.34%(2)(3) 1.34%(2)(3) 1.81%(1) 1.87%(1) 2.15%(1)
Ratio of net investment loss to
average net assets .................... (0.96%)(3) (0.90)%(3) (1.10)% (1.07)% (1.27)%
Portfolio turnover rate ................. 104% 203% 149% 100% 57%
</TABLE>
(1) Before offset of custody credits.
(2) Ratio reflects expenses grossed up for custody credit arrangement. The
ratio of expenses to average net assets net of custody credits would have
been 1.32% in the year ended 3/31/2000 and 1.29% in the year ended
3/31/1999.
(3) Net of waived advisory fee and service and distribution plan fees. Had
these expenses been fully paid by the Fund for the years ended March 31,
2000 and March 31, 1999, net investment loss per share would have been
$(.21) and $(.18), the ratio of expenses to average net assets would have
been 1.69% and 1.91%, and the ratio of net investment loss to average net
assets would have been 1.31% and (1.47)%, respectively.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
Report of Independent Accountants
================================================================================
To the Shareholders and Board of Directors
of Value Line Emerging Opportunities Fund, Inc.
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 Emerging Opportunities
Fund, Inc., formerly Value Line Small Cap Growth Fund, Inc., (the "Fund") at
March 31, 2000, 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 accounting principles generally accepted in the United States.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund'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 auditing standards generally accepted in the United States, 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 March 31, 2000 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
May 1, 2000
- --------------------------------------------------------------------------------
Federal Tax Notice (unaudited)
The amount of long term capital gain paid by the Fund for the fiscal year
ended March 31, 2000 was $200,284.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
19
<PAGE>
Value Line Emerging Opportunities Fund, Inc.
The Value Line Family of Funds
================================================================================
1950--The Value Line Fund seeks long-term growth of capital. Current income is a
secondary objective.
1952--Value Line Income Fund's primary investment objective is income, as high
and dependable as is consistent with reasonable risk. Capital growth to increase
total return is a secondary objective.
1956--Value Line Special Situations Fund
seeks long-term growth of capital. No consideration is given to current income
in the choice of investments.
1972--Value Line Leveraged Growth Investors' sole investment objective is to
realize capital growth.
1979--The Value Line Cash Fund, a money market fund, seeks to secure as high a
level of current income as is consistent with maintaining liquidity and
preserving capital.
1981--Value Line U.S. Government Securities Fund seeks maximum income without
undue risk to capital. Under normal conditions, at least 80% of the value of its
net assets will be invested in securities issued or guaranteed by U.S.
Government and its agencies and instrumentalities.
1983--Value Line Centurion Fund* seeks long-term growth of capital.
1984--The Value Line Tax Exempt Fund seeks to provide investors with the 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 the National Bond 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.
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* seeks to achieve a high total
investment return consistent with reasonable risk.
1993--Value Line Emerging Opportunities 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 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.
* Only available through the purchase of Guardian Investor, a tax deferred
variable annuity, or ValuePlus, a variable life insurance policy.
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, or visit us at www.valueline.com. Read the
prospectus carefully before you invest or send money.
<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 Co.
225 Franklin Street
Boston, MA 02110
SHAREHOLDER State Street Bank and Trust Co.
SERVICING AGENT c/o NFDS
P.O. Box 219729
Kansas City, MO 64121-9729
INDEPENDENT PricewaterhouseCoopers LLP
ACCOUNTANTS 1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL Peter D. Lowenstein, Esq.
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830
DIRECTORS Jean Bernhard Buttner
Francis C. Oakley
Marion N. Ruth
Frances T. Newton
OFFICERS Jean Bernhard Buttner
Chairman and President
Stephen E. Grant
Vice President
David T. Henigson
Vice President and
Secretary/Treasurer
Jack M. Houston
Assistant Secretary/Treasurer
Stephen La Rosa
Assistant Secretary/Treasurer
Small-Cap investments entail special risk considerations including liquidity and
volatility.
This 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).
