- --------------------------------------------------------------------------------
ANNUAL REPORT
- --------------------------------------------------------------------------------
March 31, 1998
- --------------------------------------------------------------------------------
Value Line
U.S.
Multinational
Company
Fund, Inc.
[LOGO]
---------------------
VALUE LINE
No-Load
Mutual
Funds
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
To Our Value Line
================================================================================
To Our Shareholders:
The positive relative performance that the Value Line U.S. Multinational Company
Fund posted in the first half of this fiscal year, which ended on March 31,
1998, was reversed in the second half. For the six months ended March 31, 1998,
your Fund returned 6.21% (including reinvested dividends), versus a 17.22% total
return for the benchmark Standard & Poor's 500 Index. Fund performance for the
full fiscal year stands at a respectable 39.17%, though this trails the
spectacular 48.01% benchmark total return.
The fourth quarter of 1997 and the first quarter of 1998, of course, was the
period when the Asian currency crises unfolded. As a result of a wave of
currency devaluations in Thailand, Indonesia, and neighboring countries, the
economies across southeast Asia and as far north as Korea have been extremely
soft over the past six months. Early in the period, there were also concerns
that the Asian problems could spread to other emerging markets, such as Latin
America, but that has not happened. Finally, the Japanese economy has been very
weak. Some first-class financial institutions in Japan have collapsed.
This set of conditions has been especially hard on companies that have prominent
operations outside of the U.S., like those whose stocks are specifically
selected for the Value Line U.S. Multinational Company Fund. Though the effect
on most of the companies represented in your Fund has been much less severe than
initially feared last October, there has been some weakness, especially in the
semiconductor area. As a defensive measure, your Fund raised cash aggressively
at the end of 1997 as a cushion against declining stock prices. Today most of
that cash has been reinvested.
Though we are continuing to watch the situation overseas very closely, it
appears that the worst is behind us in terms of the damage to stock prices, and
your Fund management is carefully looking for bargains among stocks that have
seen especially severe price declines. As always, our primary stock-selection
tool is the Value Line Timeliness Ranking System, which has an unparalleled
long-term record of identifying stocks that perform better than the average
equity.
Thank you for your continued confidence in Value Line.
Sincerely,
/s/ JEAN BERNHARD BUTTNER
Jean Bernhard Buttner
Chairman and President
May 6, 1998
- --------------------------------------------------------------------------------
2
<PAGE>
Value Line U.S. Multinational Company Fund ,Inc.
U.S. Multinational Company Fund Shareholders
================================================================================
Economic Observations
The business expansion continues to proceed at a healthy clip, as we make our
way through the second quarter of the year. True, the uptrend is unlikely to be
as uniformly strong in the current period and during the second half of the year
as it was in the opening quarter, when growth exceeded 4%. But, with most of the
key consumer and industrial indicators still in relatively good shape, and with
inflation continuing to be under control, growth could still average a solid
2.5%, or so, over the balance of the year. What's more, we would expect both
producer (or wholesale) and consumer prices to evidence little upward pressure.
The wild card in this forecast, of course, remains the Pacific Rim, which
continues to face the daunting task of turning itself around economically.
Obviously, the problems afflicting that part of the globe will lead to gradual
reductions in demand for goods and services produced in the United States.
Nonetheless, assuming that the affected nations take corrective actions in a
timely fashion, so that the situation eventually starts to stabilize, little
more than minor dislocations should be apparent here. At this juncture, we feel
that the current long business expansion can go on for several more years.
COMPARISON OF THE CHANGE IN VALUE OF A $10,000
INVESTMENT IN THE VALUE LINE U.S. MULTINATIONAL COMPANY
FUND AND THE S&P 500 INDEX
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Value Line U.S.
Multinational Company Fund, Inc. S & P 500
-------------------------------- ---------
11/30/95 $10,000 $10,000
11/30/95 $10,060 $10,088
12/31/95 $9,890 $10,282
1/31/96 $10,161 $10,633
2/28/96 $10,653 $10,731
3/31/96 $10,593 $10,835
4/30/96 $11,245 $10,994
5/31/96 $11,788 $11,277
6/30/96 $11,436 $11,321
7/31/96 $10,924 $10,821
8/31/96 $11,526 $10,478
9/30/96 $12,500 $11,671
10/31/96 $12,541 $11,993
11/30/96 $13,374 $12,899
12/31/96 $13,106 $12,644
1/31/97 $13,858 $13,434
2/28/97 $13,360 $13,539
3/31/97 $12,537 $12,981
6/30/97 $14,711 $15,247
9/30/97 $16,428 $16,390
12/31/97 $15,592 $16,861
3/31/98 $17,448 $19,213
From November 17, 1995+ to March 31, 1998
The Standard & Poor's 500 Index is an unmanaged index that is representative of
the larger capitalization stocks traded in the United States.
Performance Data:*
Total
Return
-----
1 year ended March 31, 1998......................... 39.17%
From November 17, 1995+ to
March 31, 1998.................................... 26.51%
+ Commencement of operations.
* The performance data quoted represent past performance and are no guarantee
of future performance. The average annual total return 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.
- --------------------------------------------------------------------------------
3
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Schedule of Investments
================================================================================
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (88.8%)
ADVERTISING (1.5%)
9,200 Omnicom Group, Inc............................... $ 432,975
AIR TRANSPORT (1.6%)
12,300 Airborne Freight Corp............................ 462,788
AUTO PARTS--
REPLACEMENT (0.9%)
12,000 Wynns International, Inc......................... 273,000
BANK (3.1%)
5,000 BankBoston Corp.................................. 551,250
2,500 Citicorp......................................... 355,000
----------
906,250
BEVERAGE--SOFT
DRINK (1.9%)
15,000 Coca-Cola Enterprises, Inc....................... 550,312
COAL/ALTERNATE
ENERGY (1.6)
9,000 AES Corp.*....................................... 471,938
COMPUTER &
PERIPHERALS (13.4%)
10,500 Cisco Systems, Inc.*............................. 717,938
15,000 Compaq Computer Corp.*........................... 388,125
16,000 Dell Computer Corp.*............................. 1,084,000
18,000 EMC Corp.*....................................... 680,625
4,000 International Business
Machines Corp................................. 415,500
8,000 Sun Microsystems, Inc.*.......................... 333,750
10,000 3Com Corp.*...................................... 359,375
----------
3,979,313
COMPUTER SOFTWARE &
SERVICES (10.2%)
6,500 BMC Software, Inc.*.............................. $ 544,781
15,750 Computer Associates
International, Inc............................ 909,562
6,000 Microsoft Corp.*................................. 537,000
5,500 Networks Associates Inc.*........................ 364,375
20,000 Parametric Technology Corp.*..................... 666,250
----------
3,021,968
DRUG (6.5%)
6,500 Lilly (Eli) & Co................................. 387,563
3,000 Merck & Co., Inc................................. 385,125
6,000 Pfizer, Inc...................................... 598,125
7,000 Schering-Plough Corp............................. 571,812
----------
1,942,625
ELECTRICAL
EQUIPMENT (1.6%)
5,500 General Electric Co.............................. 474,031
FINANCIAL SERVICES (1.1%)
6,400 Franklin Resources, Inc.......................... 339,200
FOREIGN
TELECOMMUNICATIONS
(1.6%)
7,200 Northern Telecom Ltd............................. 465,300
HOTEL/GAMING (1.1%)
10,000 Hilton Hotels Corp............................... 318,750
HOUSEHOLD
PRODUCTS (2.7%)
5,000 Colgate-Palmolive Co............................. 433,125
4,400 Procter & Gamble Co.............................. 371,250
----------
804,375
- --------------------------------------------------------------------------------
4
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
March 31, 1998
================================================================================
Shares Value
- --------------------------------------------------------------------------------
INSURANCE--
DIVERSIFIED (1.5%)
3,600 American International
Group, Inc.................................... $ 453,375
MACHINERY (3.8%)
8,000 Caterpillar, Inc................................. 440,500
7,500 Deere & Co....................................... 464,531
8,000 PRI Automation Inc.*............................. 209,500
----------
1,114,531
MEDICAL SUPPLIES (7.8%)
8,000 Boston Scientific Corp.*......................... 540,000
9,000 Guidant Corp..................................... 660,375
8,000 Johnson & Johnson................................ 586,500
10,000 Medtronic Inc.................................... 518,750
----------
2,305,625
METAL FABRICATING (1.1%)
6,000 SPS Technologies, Inc.*.......................... 323,625
OILFIELD SERVICES/
EQUIPMENT (9.1%)
20,000 BJ Services Co.*................................. 728,750
7,500 ENSCO International, Inc. ....................... 208,125
6,000 Smith International, Inc.*....................... 330,375
8,000 Tidewater, Inc................................... 350,500
12,000 Transocean Offshore, Inc......................... 617,250
6,000 Western Atlas, Inc.*............................. 464,250
----------
2,699,250
PACKAGING &
CONTAINER (1.7%)
12,000 Owens-Illinois, Inc.*............................ 519,000
RETAIL-SPECIAL
LINES (1.6%)
10,000 Tiffany & Co..................................... 486,875
SEMICONDUCTOR (3.6%)
28,500 Cirrus Logic Inc.*............................... 288,563
10,000 Intel Corp....................................... 780,625
----------
1,069,188
SHOE (1.7%)
18,000 Wolverine World Wide, Inc........................ 508,500
TELECOMMUNICATIONS
EQUIPMENT (2.4%)
15,000 Andrew Corp.*.................................... 297,188
6,400 Tellabs, Inc.*................................... 429,600
----------
726,788
TELECOMMUNICATION
SERVICES (3.7%)
10,000 AirTouch
Communications Inc.*.......................... 489,375
14,400 WorldCom, Inc.*.................................. 620,100
----------
1,109,475
TOILETRIES/
COSMETICS (2.0%)
5,000 Gillette Co...................................... 593,437
----------
TOTAL COMMON STOCKS
AND TOTAL INVESTMENT
SECURITIES (88.8%)
(Cost $17,317,967) ............................ 26,352,494
----------
- --------------------------------------------------------------------------------
5
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Schedule of Investments March 31, 1998
================================================================================
Principal
Amount Value
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT (14.2%)
(including accrued interest)
$4,200,000 Collateralized by $4,000,000
U.S. Treasury Notes 7.625%,
due 2/15/07, with a value
of $4,280,822 (with Morgan
Stanley & Co., Inc. 5.92%,
dated 3/31/98, due 4/1/98,
delivery value
$4,200,691)..................................... $ 4,200,691
EXCESS OF LIABILITIES OVER
CASH AND OTHER
ASSETS (-3.0%) ................................................ (877,965)
-----------
NET ASSETS (100%) ............................................. $29,675,220
-----------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE, PER
OUTSTANDING SHARE
($29,675,220 / 1,824,110
shares outstanding) .......................................... $ 16.27
===========
* Non-income producing.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
6
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Statement of Assets and Liabilities
at March 31, 1998
================================================================================
Assets:
Investment securities, at value
(Cost-$17,317,967) ...................................... $26,352,494
Repurchase agreement
(Cost-$4,200,691) ....................................... 4,200,691
Cash ...................................................... 53,349
Deferred organization costs (note 2) ...................... 27,362
Dividends receivable ...................................... 6,265
Receivable for capital shares sold ........................ 200
-----------
Total Assets .......................................... 30,640,361
-----------
Liabilities:
Payable for securities purchased .......................... 903,992
Payable for capital shares repurchased .................... 12,075
Accrued expenses:
Advisory fee payable .................................... 18,492
Service and distribution plan
fee payable ........................................... 6,169
Other ................................................... 24,413
-----------
Total Liabilities ..................................... 965,141
-----------
Net Assets ................................................ $29,675,220
===========
Net Assets consist of:
Capital stock, at $.01 par value
(authorized 50,000,000,
outstanding 1,824,110 shares) ........................... $ 18,241
Additional paid-in capital ................................ 20,622,452
Unrealized net appreciation
of investments .......................................... 9,034,527
-----------
Net Assets ................................................ $29,675,220
===========
Net Asset Value, Offering and
Redemption Price, per
Outstanding Share
($29,675,220 / 1,824,110
shares outstanding) ................................... $ 16.27
===========
Statement of Operations
for the year ended March 31, 1998
================================================================================
Investment Income:
Interest income .......................................... $ 158,798
Dividend income (Net of foreign
withholding taxes of $324) ............................. 109,381
-----------
Total Income ......................................... 268,179
-----------
Expenses:
Advisory fee ............................................. 188,194
Service and distribution plan fee ........................ 62,731
Auditing and legal fees .................................. 31,349
Accounting and bookkeeping
expense ................................................ 29,700
Custodian fees ........................................... 26,954
Registration and filing fees ............................. 25,011
Directors' fees and expenses ............................. 20,418
Printing ................................................. 12,989
Amortization of deferred organization
costs (note 2) ......................................... 10,399
Insurance, dues and other ................................ 10,258
Transfer agent fees ...................................... 2,591
-----------
Total Expenses before
Custody Credits .................................... 420,594
Less: Custody Credits ................................ (2,687)
-----------
Net Expenses ......................................... 417,907
-----------
Investment Loss-Net ...................................... (149,728)
-----------
Realized and Unrealized Gain
on Investments--Net:
Realized Gain-Net .................................... 378,803
Change in Unrealized
Appreciation ....................................... 7,314,985
-----------
Net Realized Gain and
Net Unrealized Appreciation
of Investments ......................................... 7,693,788
-----------
Net Increase in Net Assets from
Operations ............................................. $ 7,544,060
===========
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
7
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Statement of Changes in Net Assets
for the years ended March 31, 1998 and 1997
================================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, March 31,
1998 1997
----------------------------
<S> <C> <C>
Operations:
Investment (loss) income--net ............................. $ (149,728) $ 140,782
Realized gain on investments--net ......................... 378,803 986,627
Net change in unrealized appreciation of investments ...... 7,314,985 988,551
----------------------------
Net increase in net assets from operations ................ 7,544,060 2,115,960
----------------------------
Distributions to Shareholders:
Investment income--net .................................... -- (179,489)
Realized gains--net ....................................... (1,344,034) (13,147)
----------------------------
Total distributions ....................................... (1,344,034) (192,636)
----------------------------
Capital Share Transactions:
Proceeds from sale of shares .............................. 5,038,730 4,016,641
Proceeds from reinvestment of distributions to shareholders 1,339,403 192,342
Cost of shares repurchased ................................ (983,899) (498,959)
----------------------------
Increase from capital share transactions .................. 5,394,234 3,710,024
----------------------------
Total Increase .............................................. 11,594,260 5,633,348
Net Assets:
Beginning of year ......................................... 18,080,960 12,447,612
----------------------------
End of year ............................................... $ 29,675,220 $ 18,080,960
============================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Notes to Financial Statements March 31, 1998
================================================================================
1. Significant Accounting Policies
Value Line U.S. Multinational Company 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 maximum
total return. The Fund invests primarily in common stock or securities
convertible into common stock of U.S. companies that have significant sales from
international operations.
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 price.
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 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. Net investment loss, net realized gain (loss), and net assets are
not affected. In the current year the net investment loss of $149,728 and
distributions in excess of realized gain from investment transactions of
$240,911 were reclassified within the composition of net assets to additional
paid in capital.
(E) Amortization. Discounts on debt securities are amortized to interest income
over the life of the security with a corresponding increase to the security's
cost basis; premiums on debt securities are not amortized.
- --------------------------------------------------------------------------------
9
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Notes to Financial Statements March 31, 1998
================================================================================
2. Organization Cost
Costs of $52,030 incurred in connection with the Fund's organization and initial
registration have been deferred and are being amortized on a straight-line basis
over 60 months, beginning at the commencement of operations of the Fund. In the
event any of the initial shares of the Fund are redeemed by the holder thereof
during the five-year amortization period, the redemption proceeds will be
reduced by a pro rata portion of any unamortized, deferred organizational
expenses in the same proportion as the number of initial shares being redeemed
bears to the number of initial shares outstanding at the time of redemption.
3. Capital Share Transactions
Transactions in capital stock were as follows:
Year Ended Year Ended
March 31, March 31,
1998 1997
-------------------------
Shares sold ............................ 328,824 311,397
Shares issued to shareholders in
reinvestment of dividends
and distributions..................... 94,724 14,727
-------------------------
423,548 326,124
Shares repurchased ..................... 65,153 40,083
-------------------------
Net increase ........................... 358,395 286,041
=========================
4. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, were as
follows:
Year Ended
March 31, 1998
--------------
PURCHASES:
Investment Securities .......................... $13,046,400
===========
SALES:
Investment Securities .......................... $10,920,675
===========
At March 31, 1998, the aggregate cost of investment securities and repurchase
agreements for federal income tax purposes was $21,518,658. The aggregate
appreciation and depreciation of investments at March 31, 1998, based on a
comparison of investment values and their costs for federal income tax purposes
was $9,511,341 and $476,814, respectively, resulting in a net appreciation of
$9,034,527.
5. Advisory Fees, Service and Distribution Plan Fees and Transactions With
Affiliates
An advisory fee of $188,194 was paid or payable to Value Line, Inc. the Fund's
investment adviser (the"Adviser") for the year ended March 31, 1998. The fee is
computed at the rate of .75 of 1% of the daily net assets during the period and
paid monthly. 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 in its
organization and operation.
The Fund has a Service and Distribution Plan (the "Plan"), adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended, 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
$62,731 for the year ended March 31, 1998 were paid or payable to the
Distributor under this Plan.
Certain officers and directors of the Adviser and the Distributor, are also
officers and a director of the Fund. During the year ended March 31, 1998, the
Fund paid brokerage commissions totaling $13,913 to the Distributor, which
clears its transactions through unaffiliated brokers.
At March 31, 1998, the Adviser and/or affiliated companies and the Value Line,
Inc. Profit Sharing and Savings Plan owned 1,545,239 shares of the Fund's
capital stock, representing 84.7% of the outstanding shares. In addition,
officers and directors of the Fund owned 119,447 shares of capital stock,
representing 6.5% of the outstanding shares.
- --------------------------------------------------------------------------------
10
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
November 17, 1995
Years Ended March 31, (commencement of
----------------------------- operations) to
1998 1997 March 31, 1996
------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period ............. $ 12.34 $ 10.55 $ 10.00
------------------------------------------------
Income from investment operations:
Net investment (loss) income ................... (.08) .12(1) .07(1)
Net gains or losses on securities (both realized
and unrealized) .............................. 4.80 1.82 .52
------------------------------------------------
Total from investment operations ............... 4.72 1.94 .59
------------------------------------------------
Less distributions:
Dividends from net investment income ........... -- (.14) (.04)
Distributions from capital gains ............... (.79) (.01) --
------------------------------------------------
Total distributions ............................ (.79) (.15) (.04)
------------------------------------------------
Net asset value, end of period ................... $ 16.27 $ 12.34 $ 10.55
================================================
Total return ..................................... 39.17% 18.36% 5.93%+
================================================
Ratios/Supplemental Data:
Net assets end of period (in thousands) .......... $ 29,675 $ 18,081 $ 12,448
Ratio of operating expenses to average net assets 1.69%(5) 1.97%(2)(4) 2.45%*(2)(4)
Ratio of net investment (loss) income to
average net assets ............................. (0.60)% (0.64)%(2)(4) (0.32)%*(2)(4)
Portfolio turnover rate .......................... 49% 56% 17%+
Average commission rate paid per share of
common stock investments purchased/ sold ....... $ .0491 $ .0495(3) --
</TABLE>
(1) Net of custody fee credits, expense reimbursement and fees waived by the
Adviser. Had these expenses been fully paid by the Fund for the periods
ended March 31, 1997 and 1996 investment loss- net per share would have
been $(.07) and $(.001) respectively.
(2) Due to the reimbursement of expenses and waiver of fees by the Adviser,
data are not indicative of future periods.
(3) Disclosure effective for fiscal years beginning on or after September 1,
1995.
(4) Before custody fee credits, expense reimbursement and fees waived by the
Adviser. After expense reimbursement and fees waived for the periods ended
March 31, 1997 and 1996 ratio of expenses to average net assets was 0.40%
and 0%* respectively; and ratio of net investment income to average net
assets was 0.93% and 2.13%* respectively.
(5) Before offset of custody credits.
+ Not annualized.
* Annualized.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
11
<PAGE>
Value Line U.S. Multinational Company Fund, Inc.
Report of Independent Accountants
================================================================================
To the Shareholders and Board of Directors
of Value Line U.S. Multinational Company 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 U.S. Multinational
Company Fund, Inc. (the "Fund") at March 31, 1998, 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 two years
in the period then ended and for the period November 17, 1995 (commencement of
operations) through March 31, 1996, in conformity with generally accepted
accounting principles. 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 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 March 31, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036
May 15, 1998
- --------------------------------------------------------------------------------
12
<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 419729
Kansas City, MO 64141-6729
INDEPENDENT Price Waterhouse 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
Alan N. Hoffman
Vice President
Nancy Bendig
Vice President
David T. Henigson
Vice President and
Secretary/Treasurer
Jack M. Houston
Assistant Secretary/Treasurer
Stephen La Rosa
Assistant Secretary/Treasurer
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).
VLF18A398
