UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file Number 811-568
Value Line Fund, Inc.
---------------------
(Exact name of registrant as specified in charter)
220 East 42nd Street, New York, N.Y. 10017
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-907-1500
Date of fiscal year end: December 31, 2005
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Date of reporting period: December 31, 2005
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Item 1. Reports to Stockholders.
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ANNUAL REPORT
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December 31, 2005
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The Value Line
Fund, Inc.
[LOGO
VALUE LINE
No-Load
Mutual
Funds]
The Value Line Fund, Inc.
To Our Value Line
--------------------------------------------------------------------------------
To Our Shareholders:
The Value Line Fund had a total return of 10.40% in 2005, compared with the
4.91% return of the S&P 500 index(1).
The equity market had a strong month in November, which accounted for the
majority of the year's returns. This lackluster performance was somewhat
surprising considering the strong earnings growth that was posted by
corporations during the year in combination with solid economic data for the
U.S. Several factors have contributed to this subpar return environment. First,
higher oil prices have concerned consumers and investors alike as they have
recently broached the $60-a-barrel level again, up roughly 50% from a year ago.
Higher energy prices can have a two-fold effect as they weaken consumer's
purchasing power as well as reduce the profit margins of certain industries.
Second, while it appears the Federal Reserve is approaching an end to its
year-and-a-half long tightening cycle, a new Chairman will soon be replacing
Alan Greenspan as the head of the Federal Reserve, which creates a sense of
uncertainty for both the fixed income and equity markets. Lastly, given the
strong operating margin improvement and the resulting strong earnings growth
that U.S. corporations have delivered over the last several years, it would
appear that going forward these gains will likely be more moderate.
The Value Line Fund generally invests in stocks that are ranked in the highest
category for price performance over the next six to twelve months by the Value
Line Timeliness(TM) Ranking System. The system favors stocks with strong price
and earnings momentum relative to those of all other companies in the Value Line
Investment Survey of approximately 1,700 stocks. Currently, the Fund has
significant weightings in the Industrial and Information Technology (IT)
sectors. The largest holdings are in the IT area, which has not done well over
the past few years and many investors are expecting some pent up demand to
surface in 2006. Investors should keep in mind, however, that this sector is one
of the most volatile in the S&P 500 Index. The Fund is also significantly
underweighted in the Financial sector due to the slowing growth of earnings that
we expect from this sector due to higher short-term interest rates and the
relatively flat yield curve.
Looking forward, we expect 2006 to be similar to the past year with support for
the equity market coming from U.S. corporations, which currently have high
levels of cash holdings and merger and acquisition activity that looks like it
will continue to increase.
As always, we appreciate your continued investment.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman and President
January 23, 2006
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(1) The Standard & Poor's 500 Index consists of 500 stocks which are traded on
the New York Stock Exchange, American Stock Exchange and the NASDAQ
National Market System and is representative of the broad stock market.
This is an unmanaged index and does not reflect charges, expenses or
taxes, and it is not possible to directly invest in this index.
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2
The Value Line Fund, Inc.
Fund Shareholders
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Economic Observations
The business expansion is likely to proceed at a somewhat slower pace of
3.0%-3.5% during the latter stages of 2005 than we had expected earlier,
reflecting the major damage done to the Gulf Coast's economic underpinnings by
the recent hurricanes in that region. As before, the economic up cycle should be
sustained by healthy levels of construction spending and capital goods demand.
Moreover, recent trends suggest that the economy will continue to grow at a
stable 3.0%-3.5% in 2006.
Helping to sustain this upturn next year are likely to be solid levels of
activity in the manufacturing area and the service sector. In fact, the need to
rebuild portions of the hurricane-ravaged Gulf area should give the economy a
modest boost. Such growth will probably be accompanied by still moderate, but
somewhat higher, rates of inflation. The wild card in this equation, and one
reason that we are not likely to see a higher level of business growth, is the
high price of oil. Should that commodity stabilize in price over the next
several months, as we assume, the sustainability of the long economic expansion,
as well as the prolonged period of comparative price stability, probably would
continue. Any material and sustained increase in oil prices from these recent
levels would logically threaten this economic and inflation stability.
A continuing steady rate of gross domestic product growth and the accompanying
stable rates of inflation that we expect would have positive ramifications for
the financial markets. That's because this combination would logically allow the
Federal Reserve to bring its cycle of monetary tightening to a close over the
next several months--if not sooner--without undue harm to the lengthy economic
and corporate earnings up cycles.
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3
The Value Line Fund, Inc.
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The following graph compares the performance of The Value Line Fund, Inc. to
that of the S&P 500 Stock Index. The Value Line Fund, Inc. is a professionally
managed mutual fund, while the Index is not available for investment and is
unmanaged. The returns for the Index do not reflect charges, expenses or taxes
but do include the reinvestment of dividends. The comparison is shown for
illustrative purposes only.
Comparison of a Change in Value of a $10,000 Investment
in the Value Line Fund and the S&P 500 Stock Index*
[THE FOLLOWING WAS DEPICTED BY A LINE CHART IN THE PRINTED MATERIAL]
01/96 $10,000 $10,000
$10,862 $10,537
$11,452 $11,010
$11,972 $11,350
12/96 $12,253 $12,296
$11,912 $12,624
$13,699 $14,828
$15,261 $15,940
12/97 $14,898 $16,398
$16,230 $18,685
$16,652 $19,302
$14,461 $17,382
12/98 $17,916 $21,083
$19,664 $22,134
$20,225 $23,694
$19,331 $22,214
12/99 $22,705 $25,520
$23,769 $26,105
$22,575 $25,411
$22,567 $25,165
12/00 $19,219 $23,196
$16,854 $20,446
$17,879 $21,643
$14,947 $18,466
12/06 $16,755 $20,439
$16,773 $20,496
$14,598 $17,750
$12,650 $14,683
12/06 $12,507 $15,922
$12,416 $15,420
$13,568 $17,794
$13,751 $18,265
12/06 $14,543 $20,489
$14,706 $20,836
$14,757 $21,194
$14,390 $20,798
12/06 $16,302 $22,717
$16,008 $22,229
$16,724 $22,534
$17,779 $23,346
12/06 $17,997 $23,833
* The Standard and Poor's 500 Index (S&P 500 Index) is an unmanaged index
that is representative of the larger-capitalization stocks traded in the
United States.
The return for the index does not reflect expenses which are deducted from
the Fund's returns.
Performance Data:**
Average Annual Growth of an Assumed
Total Return Investment of $10,000
---------------- ----------------------
1 year ended 12/31/05 .......... 10.40% $11,040
5 years ended 12/31/05 ......... -1.31% $ 9,361
10 years ended 12/31/05 ......... 6.05% $17,996
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** The performance data quoted represent past performance and are no
guarantee of future performance. The average annual total returns 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. The
performance data and graph do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
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4
The Value Line Fund, Inc.
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FUND EXPENSES (unaudited):
Example
As a shareholder of the Fund, you incur ongoing costs, including management
fees; distribution and service (12b-1) fees; and other Fund expenses. This
Example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2005 through December 31, 2005).
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example an $8,600
account value divided by $1,000=8.6), then multiply the result by the number in
the first line under the heading "Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees. Therefore, the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if transactional
costs were included, your costs would have been higher.
Expenses*
paid during
Beginning Ending period
account account 7/1/05
value value thru
7/1/05 12/31/05 12/31/05
-------------- -------------- ------------
Actual ........................................... $ 1,000.00 $ 1,076.10 $ 5.86
Hypothetical (5% return before expenses) ......... $ 1,000.00 $ 1,019.55 $ 5.70
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* Expenses are equal to the Fund's annualized expense ratio of 1.12%
multiplied by the average account value over the period, multiplied by
184/365 to reflect the one-half period.
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5
The Value Line Fund, Inc.
Portfolio Highlights at December 31, 2005 (unaudited)
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Ten Largest Holdings
Value Percentage of
Issue Shares (in thousands) Net Assets
----------------------------------------------------------------------------------------
Marvell Technology Group Ltd. ......... 74,800 $ 4,196 1.96%
NVIDIA Corp. .......................... 111,000 4,058 1.90
Itron, Inc. ........................... 97,200 3,892 1.82
EOG Resources, Inc. ................... 52,000 3,815 1.79
McDermott International, Inc. ......... 79,000 3,524 1.65
Corning, Inc. ......................... 177,700 3,494 1.63
Guess?, Inc. .......................... 96,000 3,418 1.60
Brightpoint, Inc. ..................... 121,500 3,369 1.58
Accenture, Ltd. Class A ............... 115,000 3,320 1.55
Hewlett-Packard Co. ................... 112,000 3,207 1.50
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Asset Allocation -- Percentage of Net Assets
[THE FOLLOWING WAS DEPICTED BY A PIE CHART IN THE PRINTED MATERIAL]
Common Stocks 95.6%
Cash & Other 4.4%
--------------------------------------------------------------------------------
Sector Weightings -- Percentage of Total Investment Securities
[THE FOLLOWING WAS DEPICTED BY A BAR CHART IN THE PRINTED MATERIAL]
Consumer, Non-Cyclical 21.0%
Industrial 19.5%
Technology 17.1%
Consumer, Cyclical 14.1%
Communications 11.4%
Energy 10.4%
Financial 6.5%
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6
The Value Line Fund, Inc.
Schedule of Investments December 31, 2005
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Value
Shares (in thousands)
--------------------------------------------------------------------------------
COMMON STOCKS (95.6%)
ADVERTISING (1.0%)
53,000 Monster Worldwide, Inc.* .................................... $ 2,163
AEROSPACE/DEFENSE (1.0%)
90,000 AAR Corp.* .................................................. 2,156
APPAREL (2.6%)
96,000 Guess?, Inc.* ............................................... 3,418
38,000 Oxford Industries, Inc. ..................................... 2,079
--------
5,497
BIOTECHNOLOGY (2.9%)
37,500 Amgen, Inc.* ................................................ 2,957
34,000 Genentech, Inc.* ............................................ 3,145
--------
6,102
BUILDING MATERIALS (0.7%)
28,000 Universal Forest Products, Inc. ............................. 1,547
CHEMICAL -- SPECIALTY (0.7%)
35,000 Ceradyne, Inc.* ............................................. 1,533
COAL (0.7%)
20,000 Arch Coal, Inc. ............................................. 1,590
COMPUTER & PERIPHERALS (3.5%)
37,000 Apple Computer, Inc.* ....................................... 2,660
112,000 Hewlett-Packard Co. ......................................... 3,207
83,000 Ingram Micro, Inc.* ......................................... 1,654
--------
7,521
COMPUTER SOFTWARE & SERVICES (6.4%)
115,000 Accenture Ltd. Class A ...................................... 3,320
138,000 BMC Software, Inc.* ......................................... 2,828
42,000 Fair Isaac Corp. ............................................ 1,855
50,000 Intergraph Corp.* ........................................... 2,491
55,000 ManTech International Corp.* ................................ 1,532
44,000 Paychex, Inc. ............................................... 1,677
--------
13,703
DIVERSIFIED COMPANIES (2.2%)
79,000 McDermott International, Inc.* .............................. 3,524
84,000 Oakley, Inc. ................................................ 1,234
--------
4,758
DRUG (4.4%)
18,000 Allergan, Inc. .............................................. 1,943
31,000 Barr Pharmaceuticals, Inc.* ................................. 1,931
104,000 Biovail Corp. ............................................... 2,468
30,000 Gilead Sciences, Inc.* ...................................... 1,579
25,000 Pharmaceutical Product Development, Inc. .................... 1,549
--------
9,470
E-COMMERCE (0.9%)
94,000 Internet Security Systems, Inc.* ............................ 1,969
ELECTRICAL EQUIPMENT (3.8%)
64,000 Belden CDT, Inc. ............................................ 1,564
177,700 Corning, Inc.* .............................................. 3,494
53,000 Lamson & Sessions Co. (The)* ................................ 1,326
40,000 Thomas & Betts Corp.* ....................................... 1,678
--------
8,062
ELECTRONICS (2.4%)
70,000 Jabil Circuit, Inc.* ........................................ 2,597
107,000 Plexus Corp.* ............................................... 2,433
--------
5,030
ENVIRONMENTAL (0.7%)
23,500 Stericycle, Inc.* ........................................... 1,384
FINANCIAL SERVICES -- DIVERSIFIED (0.7%)
16,500 Franklin Resources, Inc. .................................... 1,551
FURNITURE/HOME FURNISHINGS (0.8%)
107,000 Steelcase, Inc. ............................................. 1,694
See Notes to Financial Statements.
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7
The Value Line Fund, Inc.
Schedule of Investments
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Value
Shares (in thousands)
--------------------------------------------------------------------------------
HEALTH CARE INFORMATION SYSTEMS (2.0%)
89,000 Allscripts Healthcare Solutions, Inc.* ...................... $ 1,193
23,800 Cerner Corp.* ............................................... 2,164
118,000 Emdeon Corp.* ............................................... 998
--------
4,355
HUMAN RESOURCES (0.7%)
114,000 MPS Group, Inc.* ............................................ 1,558
INDUSTRIAL SERVICES (2.8%)
42,000 C.H. Robinson Worldwide, Inc. ............................... 1,555
25,000 Expeditors International of Washington, Inc. ................ 1,688
200,000 Quanta Services, Inc.* ...................................... 2,634
--------
5,877
INFORMATION SERVICES (1.2%)
51,500 Advisory Board Co. (The)* ................................... 2,455
INSURANCE -- LIFE (0.7%)
20,000 Prudential Financial, Inc. .................................. 1,464
INSURANCE -- PROPERTY & CASUALTY (0.7%)
500 Hanover Insurance Group, Inc. ............................... 21
33,000 W.R. Berkley Corp. .......................................... 1,571
--------
1,592
INTERNET (2.5%)
33,000 CheckFree Corp.* ............................................ 1,515
112,000 E*Trade Financial Corp.* .................................... 2,336
40,000 Yahoo!, Inc.* ............................................... 1,567
--------
5,418
MACHINERY (2.6%)
52,000 JLG Industries, Inc. ........................................ 2,374
42,000 MSC Industrial Direct Co., Inc. ............................. 1,689
27,000 Tennant Co. ................................................. 1,404
--------
5,467
MANUFACTURED HOUSING/RECREATIONAL VEHICLE (0.7%)
112,000 Champion Enterprises, Inc.* ................................. 1,525
MEDICAL SUPPLIES (6.0%)
13,500 Alcon, Inc. ................................................. 1,749
54,000 ArthroCare Corp.* ........................................... 2,275
36,000 LCA-Vision, Inc. ............................................ 1,710
28,500 Medtronic, Inc. ............................................. 1,641
76,000 Molecular Devices Corp.* .................................... 2,199
46,000 ResMed, Inc.* ............................................... 1,762
30,000 Varian Medical Systems, Inc.* ............................... 1,510
--------
12,846
METALS FABRICATING (1.2%)
60,000 Trinity Industries, Inc. .................................... 2,644
NATURAL GAS -- DIVERSIFIED (5.0%)
52,000 EOG Resources, Inc. ......................................... 3,815
18,000 Questar Corp. ............................................... 1,363
82,000 Southwestern Energy Co.* .................................... 2,947
24,000 Western Gas Resources, Inc. ................................. 1,130
34,000 XTO Energy, Inc. ............................................ 1,494
--------
10,749
OILFIELD SERVICES/EQUIPMENT (4.2%)
62,000 BJ Services Co. ............................................. 2,274
80,000 Cal Dive International, Inc.* ............................... 2,871
24,000 Schlumberger Ltd. ........................................... 2,332
33,000 Tidewater, Inc. ............................................. 1,467
--------
8,944
PHARMACY SERVICES (0.8%)
20,600 Express Scripts, Inc.* ...................................... 1,726
PRECISION INSTRUMENT (1.5%)
45,000 Agilent Technologies, Inc.* ................................. 1,498
95,000 Veeco Instruments, Inc.* .................................... 1,646
--------
3,144
RAILROAD (0.6%)
25,000 CSX Corp. ................................................... 1,269
See Notes to Financial Statements.
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8
The Value Line Fund, Inc.
December 31, 2005
--------------------------------------------------------------------------------
Value
Shares (in thousands)
--------------------------------------------------------------------------------
RETAIL -- SPECIAL LINES (1.9%)
32,200 Dress Barn, Inc. (The)* ..................................... $ 1,243
120,000 Gymboree Corp. (The)* ....................................... 2,808
--------
4,051
RETAIL BUILDING SUPPLY (2.1%)
5,500 Building Material Holding Corp. ............................. 375
40,000 Fastenal Co. ................................................ 1,568
60,000 Home Depot, Inc. (The) ...................................... 2,429
--------
4,372
RETAIL STORE (1.1%)
64,000 Nordstrom, Inc. ............................................. 2,394
SECURITIES BROKERAGE (3.0%)
200,000 Charles Schwab Corp. (The) .................................. 2,934
5,000 Chicago Mercantile Exchange Holdings, Inc. .................. 1,837
14,000 Legg Mason, Inc. ............................................ 1,676
--------
6,447
SEMICONDUCTOR (6.3%)
113,000 Intersil Corp. .............................................. 2,811
47,000 Microchip Technology, Inc. .................................. 1,511
104,000 Motorola, Inc. .............................................. 2,349
111,000 NVIDIA Corp.* ............................................... 4,058
85,000 Texas Instruments, Inc. ..................................... 2,726
--------
13,455
TELECOMMUNICATIONS EQUIPMENT (5.1%)
100,000 ADTRAN, Inc. ................................................ 2,974
76,000 Juniper Networks, Inc.* ..................................... 1,695
74,800 Marvell Technology Group Ltd.* .............................. 4,196
46,000 QUALCOMM, Inc. .............................................. 1,982
--------
10,847
TIRE & RUBBER (1.2%)
144,600 Goodyear Tire & Rubber Co. (The)* ........................... 2,513
TRUCKING/TRANSPORTATION LEASING (0.7%)
41,000 Forward Air Corp. ........................................... 1,503
WIRELESS NETWORKING (5.6%)
121,500 Brightpoint, Inc.* .......................................... 3,369
97,200 Itron, Inc.* ................................................ 3,892
242,000 Powerwave Technologies, Inc.* ............................... 3,042
64,000 ViaSat, Inc.* ............................................... 1,711
--------
12,014
--------
TOTAL COMMON STOCK AND TOTAL INVESTMENT SECURITIES (95.6%)
(Cost $180,614) ........................................... 204,359
========
Value
Principal (in thousands
Amount except per
(in thousands) share amount)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS (4.5%)
$ 4,700 With Morgan Stanley & Co., 3.34%, dated 12/30/05,
due 1/3/06, delivery value $4,701,744
(collaterized by $4,860,000 U.S. Treasury Notes
3.125%, due 5/15/07, with a value of $4,795,348) .......... $ 4,700
5,000 With UBS Warburg, LLC, 3.47%, dated 12/30/05,
due 1/3/06, delivery value $5,001,928
(collaterized by $3,846,000 U.S. Treasury Notes
7.125%, due 2/15/23, with a value of $5,083,788) .......... 5,000
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $9,700) ............................................. 9,700
--------
EXCESS OF LIABILITIES OVER CASH
AND OTHER ASSETS (-0.1%) ........................................... (344)
--------
NET ASSETS (100%) .................................................... $213,715
========
NET ASSET VALUE OFFERING AND REDEMPTION PRICE,
PER OUTSTANDING SHARE ($213,715,352 [divided by]
16,259,583 shares outstanding) ..................................... $ 13.14
========
* Non-income producing security
See Notes to Financial Statements.
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9
The Value Line Fund, Inc.
Statement of Assets and Liabilities
at December 31, 2005
--------------------------------------------------------------------------------
(In thousands
except per
share amount)
--------------
Assets:
Investment securities, at value (Cost -- $180,614) .............. $204,359
Repurchase agreements (Cost -- $9,700) .......................... 9,700
Cash ............................................................ 122
Receivable for securities sold .................................. 7,018
Interest and dividends receivable ............................... 71
Prepaid expense ................................................. 39
Receivable for capital shares sold .............................. 6
--------
Total Assets ............................................... 221,315
--------
Liabilities:
Payable for securities purchased ................................ 7,148
Payable for capital shares repurchased .......................... 150
Accrued expenses:
Advisory fee ................................................. 125
Service and distribution plan fees ........................... 47
Directors' fees .............................................. 1
Dividends payable ............................................ 1
Other ........................................................ 128
--------
Total Liabilities .......................................... 7,600
--------
Net Assets ...................................................... $213,715
========
Net assets consist of:
Capital stock, at $1.00 par value (authorized
50,000,000, outstanding 16,259,583 shares) ................... $ 16,260
Additional paid-in capital ...................................... 165,712
Accumulated net realized gain on investments .................... 7,998
Net unrealized appreciation of investments ...................... 23,745
--------
Net Assets ...................................................... $213,715
========
Net Asset Value, Offering and Redemption
Price Per Outstanding Share ($213,715,352
[divided by] 16,259,583 shares outstanding) .................. $ 13.14
========
Statement of Operations
for the Year Ended December 31,
--------------------------------------------------------------------------------
(In thousands)
---------------
Investment Income:
Interest ........................................................ $ 279
Dividends (Net of foreign withholding tax of $9) ................ 999
--------
Total Income ................................................. 1,278
--------
Expenses:
Advisory fee .................................................... 1,416
Service and distribution plan fees .............................. 525
Transfer agent fees ............................................. 146
Auditing and legal fees ......................................... 64
Printing ........................................................ 44
Custodian fees .................................................. 46
Postage ......................................................... 38
Directors' fees and expenses .................................... 24
Registration and filing fees .................................... 23
Insurance ....................................................... 22
Telephone ....................................................... 21
Miscellaneous ................................................... 4
--------
Total Expenses Before Custody Credits ........................ 2,373
Less: Custody Credits ........................................ (4)
--------
Net Expenses ................................................. 2,369
--------
Net Investment Loss ............................................. (1,091)
--------
Net Realized and Unrealized Gain on Investments:
Net Realized Gain ............................................ 30,382
Change in Net Unrealized Appreciation/(Depreciation) ......... (8,532)
--------
Net Realized Gain and Change in Net
Unrealized Appreciation/(Depreciation)
on Investments ............................................... 21,850
--------
Net Increase in Net Assets from Operations ...................... $ 20,759
========
See Notes to Financial Statements.
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10
The Value Line Fund, Inc.
Statement of Changes in Net Assets for the
Year Ended December 31, 2005 and for the Year Ended December 31, 2004
--------------------------------------------------------------------------------
Year Ended Year Ended
December 31, December 31,
2005 2004
------------------------------
(In thousands)
Operations:
Net investment loss ........................................... $ (1,091) $ (1,185)
Net realized gain on investments .............................. 30,382 24,093
Change in net unrealized appreciation/(depreciation) .......... (8,532) 635
------------------------------
Net increase in net assets from operations .................... 20,759 23,543
------------------------------
Distributions to Shareholders:
Net realized gain from investment transactions ................ (31,361) (28,186)
------------------------------
Capital Share Transactions:
Proceeds from sale of shares .................................. 8,142 7,470
Proceeds from reinvestment of distributions to shareholders ... 29,593 26,514
Cost of shares repurchased .................................... (28,443) (30,363)
------------------------------
Increase from capital share transactions ...................... 9,292 3,621
------------------------------
Total Decrease in Net Assets ................................... (1,310) (1,022)
Net Assets:
Beginning of year ............................................. 215,025 216,047
------------------------------
End of year ................................................... $ 213,715 $ 215,025
==============================
Undistributed net investment income, at end of year ............ $ -- $ 8
==============================
See Notes to Financial Statements.
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11
The Value Line Fund, Inc.
Notes to Financial Statements
--------------------------------------------------------------------------------
1. Significant Accounting Policies
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 preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
(A) Security Valuation. Securities listed on a securities exchange are valued at
the closing sales prices on the date as of which the net asset value is being
determined. Securities traded on the NASDAQ Stock Market are valued at the
NASDAQ Official Closing Price. 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. Short-term instruments with maturities of
60 days or less at the date of purchase are valued at amortized cost, which
approximates market value. Short-term instruments with maturities greater than
60 days at the date of purchase are valued at the mid point between the latest
available and representative asked and bid prices, and commencing 60 days prior
to maturity such securities are valued at amortized cost. Securities for which
market quotations are not readily available or that 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. In addition, the Fund may use the fair
value of a security when the closing market price on the primary exchange where
the security is traded no longer accurately reflects the value of a security due
to factors affecting one or more relevant securities markets or the specific
issuer.
(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, it is the Fund's policy to mark-to-market
the collateral 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 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.
(E) Foreign Currency Translation. Assets and liabilities which are denominated
in foreign currencies are translated to U.S. dollars at the prevailing rates of
exchange. The Fund does not isolate changes in the value of investments caused
by foreign exchange rate differences from the changes due to other
circumstances.
--------------------------------------------------------------------------------
12
The Value Line Fund, Inc.
December 31, 2005
--------------------------------------------------------------------------------
Income and expenses are translated to U.S. dollars based upon the rates of
exchange on the respective dates of such transactions.
Net realized foreign exchange gains or losses arise from currency gains or
losses realized between the trade and settlement dates on securities
transactions, the differences between the amounts of dividends, interest, and
foreign withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities, other than investments, at the end of the fiscal period, resulting
from changes in the exchange rates.
(F) Representations and Idemnifications. In the normal course of business the
Fund enters into contract that contain a variety of representations and
warranties which provide general indemnifications. The Fund's maximum exposure
under these arrangements is unknown, as this would involve future claims that
may be made against the Fund that have not yet occurred. However, based on
experience, the Fund expects the risk of loss to be remote.
2. Capital Share Transactions, Dividends and Distributions to Shareholders
Transactions in capital stock were as follows (in thousands except per share
amounts):
Year Ended Year Ended
December 31, December 31,
2005 2004
---------------------------
Shares sold ..................................... 572 512
Shares issued to shareholders in
reinvestment of dividends and
distributions ................................ 2,235 1,910
---------------------------
2,807 2,422
Shares repurchased .............................. (2,014) (2,117)
---------------------------
Net increase .................................... 793 305
===========================
Distributions per share from net
realized gains ................................ $ 2.22 $ 2.07
===========================
3. Purchases and Sales of Securities
Purchases and sales of investment securities, excluding short-term securities,
were as follows:
Year Ended
December 31,
2005
---------------
(in thousands)
PURCHASES:
Investment Securities ................................. $450,810
========
SALES:
Investment Securities ................................. $473,590
========
4. Income Taxes
At December 31, 2005, information on the tax components of capital is as
follows:
(in thousands)
Cost of investments for tax purposes ........................ $190,750
--------
Gross tax unrealized appreciation ........................... $ 26,739
Gross tax unrealized depreciation ........................... (3,430)
--------
Net tax unrealized appreciation
on investments ........................................... $ 23,309
========
Undistributed ordinary income ............................... $ 6,059
========
Undistributed long-term gains ............................... $ 2,374
========
Permanent book-tax differences relating to the current year were reclassified
within the composition of the net asset accounts. The Fund decreased accumulated
net investment loss by approximately $1,083,000 and decreased accumulated net
realized gain by approximately $1,083,000. Net assets were not affected by this
reclassification.
Net realized gains/losses differ for financial statement and tax purposes
primarily due to differing treatments of wash sales.
--------------------------------------------------------------------------------
13
The Value Line Fund, Inc.
Notes to Financial Statements December 31, 2005
--------------------------------------------------------------------------------
The tax composition of distributions to shareholders for the years ended
December 31, 2005 and December 31, 2004 were as follows:
2005 2004
---------- ---------
(in thousands)
Ordinary income .................................... $24,008 $ --
Long-term capital gain ............................. 7,353 28,186
------- -------
$31,361 $28,186
5. Investment Advisory Fee, Service and Distribution Fees and Transactions
With Affiliates
An advisory fee of $1,415,512 was paid or payable to Value Line, Inc., the
"Adviser"), for the year ended December 31, 2005. This was computed at the rate
of .70% of the first $100 million of the Fund's average daily net assets plus
..65% on the excess thereof, and paid monthly. The Adviser provides research,
investment programs, supervision of the investment portfolio and pays costs of
administrative services, office space, equipment and compensation of
administrative, bookkeeping and clerical personnel necessary for managing the
affairs of the Fund. The Adviser also provides persons, satisfactory to the
Fund's Board of Directors, to act as officers and employees 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. For the year ended
December 31, 2005, fees amounting to $525,198 were paid or payable to the
Distributor under this Plan.
For the year ended December 31, 2005, the Fund's expenses were reduced by $3,692
under a custody credit arrangement with the Custodian.
Certain officers and directors of the Adviser and the Distributor are also
officers and directors of the Fund.
The Adviser and/or affiliated companies and the Value Line, Inc. Profit Sharing
and Savings Plan owned 596,819 shares of the Fund's capital stock, representing
3.67% of the outstanding shares at December 31, 2005. In addition, officers and
directors of the Fund as a group owned 1,791 shares of the Fund, representing
..01% of the outstanding shares.
--------------------------------------------------------------------------------
14
The Value Line Fund, Inc.
Financial Highlights
--------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each year:
Years Ended December 31,
-------------------------------------------------------------------------
2005 2004 2003 2002 2001
-------------------------------------------------------------------------
Net asset value, beginning of year ........ $ 13.90 $ 14.25 $ 13.67 $ 18.49 $ 21.37
-------------------------------------------------------------------------
Income (loss) from Investment Operations:
Net investment loss ...................... (0.07) (.08) (.03) (.05) (.04)
Net gain or loss on securities (both
realized and unrealized) ............... 1.53 1.80 2.24 (4.64) (2.70)
-------------------------------------------------------------------------
Total from investment operations ......... 1.46 1.72 2.21 (4.69) (2.74)
-------------------------------------------------------------------------
Less distributions:
Distributions from net realized gains .... (2.22) (2.07) (1.63) (.13) (.14)
-------------------------------------------------------------------------
Net asset value, end of year .............. $ 13.14 $ 13.90 $ 14.25 $ 13.67 $ 18.49
=========================================================================
Total return .............................. 10.40% 12.09% 16.28% (25.35)% (12.82)%
=========================================================================
Ratios/Supplemental Data:
Net assets, end of year (in thousands) .... $ 213,715 $ 215,025 $ 216,047 $ 206,338 $ 303,034
Ratio of expenses to average
net assets(1) ............................ 1.13% 1.13% 1.13% 1.11% 1.04%
Ratio of net investment loss to average
net assets ............................... (0.52)% (0.58)% (0.19)% (0.31)% (0.18)%
Portfolio turnover rate ................... 224% 297% 129% 33% 45%
(1) Ratios reflect expenses grossed up for custody credit arrangement. The
ratio of expenses to average net assets net of custody credits would have
been 1.03% for the year ended December 31, 2001, and unchanged for the
years ended December 31, 2005, 2004, 2003, and 2002.
See Notes to Financial Statements. See Notes to Financial Statements.
--------------------------------------------------------------------------------
15
The Value Line Fund, Inc.
Report of Independent Registered Public Accounting Firm
--------------------------------------------------------------------------------
To the Board of Directors and Shareholders
of The Value Line 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 The Value Line Fund, Inc. (the
"Fund") at December 31, 2005, 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 of America. 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 the standards of the
Public Company Accounting Oversight Board (United States). Those standards
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 December 31, 2005 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 21, 2006
--------------------------------------------------------------------------------
16
The Value Line Fund, Inc.
Federal Tax Notice (unaudited)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
For corporate taxpayers 4.02% of the ordinary income distribution paid during
the calendar year ended December 31, 2005 qualify for the corporate dividends
received deductions.
During the calendar year ended December 31, 2005, 4.18% of the ordinary income
distribution are treated as qualified dividends.
During the calendar year ended December 31, 2005, the Fund distributed
$7,352,654 of long-term capital gain to its shareholders.
--------------------------------------------------------------------------------
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at
http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference
Room in Washington, D.C. Information on the operation of the Public Reference
Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that the Fund uses to determine
how to vote proxies relating to portfolio securities, and information regarding
how the Fund voted these proxies during the most recent 12-month period ended
June 30 is available through the Fund's website at http://www.vlfunds.com and
on the SEC's website at http://www.sec.gov. The description of the policies and
procedures is also available without charge, upon request, by calling
1-800-243-2729.
--------------------------------------------------------------------------------
17
The Value Line Fund, Inc.
Management of the Fund
--------------------------------------------------------------------------------
MANAGEMENT INFORMATION
The business and affairs of the Fund are managed by the Fund's officers under
the direction of the Board of Directors. The following table sets forth
information on each Director and Officer of the Fund. Each Director serves as a
director or trustee of each of the 14 Value Line Funds. Each Director serves
until his or her successor is elected and qualified.
Principal
Occupation Other
Length of During the Directorships
Name, Address, and Age Position Time Served Past 5 Years Held by Director
--------------------------------------------------------------------------------------------------------------------
Interested Director*
--------------------
Jean Bernhard Buttner Chairman of the Since 1983 Chairman, President and Chief Value Line, Inc.
Age 71 Board of Directors Executive Officer of Value Line,
and President Inc. (the "Adviser") and Value
Line Publishing, Inc. Chairman
and President of each of the 14
Value Line Funds and Value
Line Securities, Inc. (the
"Distributor").
--------------------------------------------------------------------------------------------------------------------
Non-Interested Directors*
-------------------------
John W. Chandler Director Since 1991 Consultant, Academic None
18 Victoria Lane Search Consultation Service,
Lanesboro, MA 01237 Inc. 1992-2004; Trustee Emeritus
Age 82 and Chairman (1993-1994) of
the Board of Trustees of Duke
University; President Emeritus,
Williams College.
--------------------------------------------------------------------------------------------------------------------
Frances T. Newton Director Since 2000 Customer Support Analyst, None
4921 Buckingham Drive Duke Power Company.
Charlotte, NC 28209
Age 64
--------------------------------------------------------------------------------------------------------------------
Francis C. Oakley Director Since 2000 Professor of History, Berkshire Life
54 Scott Hill Road Williams College, 1961 to present. Insurance
Williamstown, MA 01267 President Emeritus since 1994 and Company of
Age 74 President, 1985-1994; Chairman America
(1993-1997) and Interim President
(2002) of the American Council of
Learned Societies. Trustee since
1997 and Chairman of the Board
since 2006, National Humanities
Center.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
18
The Value Line Fund, Inc.
Management of the Fund
--------------------------------------------------------------------------------
Principal
Occupation Other
Length of During the Directorships
Name, Address, and Age Position Time Served Past 5 Years Held by Director
-----------------------------------------------------------------------------------------------------------------------
David H. Porter Director Since 1997 Visiting Professor of Classics, None
5 Birch Run Drive Williams College, since 1999;
Saratoga Springs, NY 12866 President Emeritus, Skidmore
Age 70 College since 1999 and President,
1987-1998.
-----------------------------------------------------------------------------------------------------------------------
Paul Craig Roberts Director Since 1987 Chairman, Institute for Political A. Schulman Inc.
169 Pompano St. Economy. (plastics)
Panama City Beach, FL 32413
Age 67
-----------------------------------------------------------------------------------------------------------------------
Nancy-Beth Sheerr Director Since 1996 Senior Financial Advisor, None
1409 Beaumont Drive Veritable L.P. (investment adviser)
Gladwyne, PA 19035 since 2004; Senior Financial
Age 57 Advisor, Hawthorne, 2001-2004.
-----------------------------------------------------------------------------------------------------------------------
Officers
--------
Bradley Brooks Vice President Since 2001 Portfolio Manager with
Age 43 the Adviser.
-----------------------------------------------------------------------------------------------------------------------
David T. Henigson Vice President, Since 1994 Director, Vice President and
Age 48 Secretary and Compliance Officer of the
Chief Compliance Adviser. Director and Vice
Officer President of the Distributor. Vice
President, Secretary and Chief
Compliance Officer of each of
the 14 Value Line Funds.
-----------------------------------------------------------------------------------------------------------------------
Stephen R. Anastasio Treasurer Since 2005 Controller of the Adviser until
Age 46 2003; Chief Financial Officer of
the Adviser, 2003-2005; Treasurer
of the Adviser since 2005.
-----------------------------------------------------------------------------------------------------------------------
Howard A. Brecher Assistant Secretary/ Since 2005 Director, Vice President and
Age 51 Assistant Treasurer Secretary of the Adviser. Director
and Vice President of the
Distributor.
-----------------------------------------------------------------------------------------------------------------------
* Mrs. Buttner is an "interested person" as defined in the Investment
Company Act of 1940 by virtue of her positions with the Adviser and her
indirect ownership of a controlling interest in the Adviser.
Unless otherwise indicated, the address for each of the above is 220 East 42nd
Street, New York, NY 10017.
--------------------------------------------------------------------------------
The Fund's Statement of Additional Information (SAI) includes additional
information about the Fund's directors and is available, without charge, upon
request by calling 1-800-243-2729.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
19
The Value Line 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 and Growth 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 Premier Growth 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. An investment in the Fund is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
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 the 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 may be subject to state and local taxes and the Alternative
Minimum Tax (if applicable).
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 the maximum income exempt from New York State, New York City and federal
income taxes while avoiding undue risk to principal. The Trust may be subject to
state and local taxes and the Alternative Minimum Tax (if applicable).
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.
* 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 1-800-243-2729, 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.
--------------------------------------------------------------------------------
20
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 BFDS
P.O. Box 219729
Kansas City, MO 64121-9729
INDEPENDENT PricewaterhouseCoopers LLP
REGISTERED PUBLIC 300 Madison Avenue
ACCOUNTING FIRM New York, NY 10017
LEGAL COUNSEL Peter D. Lowenstein, Esq.
Two Sound View Drive, Suite 100
Greenwich, CT 06830
DIRECTORS Jean Bernhard Buttner
John W. Chandler
Frances T. Newton
Francis C. Oakley
David H. Porter
Paul Craig Roberts
Nancy-Beth Sheerr
OFFICERS Jean Bernhard Buttner
Chairman and President
Bradley Brooks
Vice President
David T. Henigson
Vice President/Secretary
Stephen R. Anastasio
Treasurer
Howard A. Brecher
Assistant Secretary/
Assistant 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).
#534698
Item 2. Code of Ethics
(a) The Registrant has adopted a Code of Ethics that applies to its
principal executive officer, and principal financial officer and principal
accounting officer.
(f) Pursuant to item 12(a), the Registrant is attaching as an exhibit a
copy of its Code of Ethics that applies to its principal executive officer, and
principal financial officer and principal accounting officer.
Item 3. Audit Committee Financial Expert.
(a)(1)The Registrant has an Audit Committee Financial Expert serving on
its Audit Committee.
(2) The Registrant's Board has designated John W. Chandler, a member of
the Registrant's Audit Committee, as the Registrant's Audit Committee Financial
Expert. Mr. Chandler is an independent director who is a senior consultant with
Academic Search Consultation Service. He spent most of his professional career
at Williams College, where he served as a faculty member, Dean of the Faculty,
and President (1973-85). He also served as President of Hamilton College
(1968-73), and as President of the Association of American Colleges and
Universities (1985-90). He has also previously served as Trustee Emeritus and
Chairman of the Board of Trustees of Duke University.
A person who is designated as an "audit committee financial expert" shall not
make such person an "expert" for any purpose, including without limitation under
Section 11 of the Securities Act of 1933 or under applicable fiduciary laws, as
a result of being designated or identified as an audit committee financial
expert. The designation or identification of a person as an audit committee
financial expert does not impose on such person any duties, obligations, or
liabilities that are greater than the duties, obligations, and liabilities
imposed on such person as a member of the audit committee and Board of Trustees
in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services
(a) Audit Fees 2005 - $32,709
(b) Audit-Related fees - None.
(c) Tax Preparation Fees 2005 -$7,200
(d) All Other Fees - None
(e)(1) Audit Committee Pre-Approval Policy. All services to be
performed for the Registrant by PricewaterhouseCoopers LLP must be
pre-approved by the audit committee. All services performed were
pre-approved by the committee.
(e)(2) Not applicable.
(f) Not applicable.
(g) Aggregate Non-Audit Fees 2005 -$7,200
(h) Not applicable.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Act (17 CFR
270.30a-2(c) ) based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this
report, are appropriately designed to ensure that material
information relating to the registrant is made known to such
officers and are operating effectively.
(b) The registrant's principal executive officer and principal financial
officer have determined that there have been no significant changes
in the registrant's internal controls or in other factors that could
significantly affect these controls subsequent to the date of their
evaluation, including corrective actions with regard to significant
deficiencies and material weaknesses.
Item 12. Exhibits.
(a) Code of Business Conduct and Ethics for Principal Executive and
Senior Financial Officers attached hereto as Exhibit 100.COE
(b)(1) Certification pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2) attached hereto as Exhibit
99.CERT.
(2) Certification pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
By /s/ Jean B. Buttner
---------------------------------
Jean B. Buttner, President
Date: 3/10/06
------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Jean B. Buttner
-------------------------------------------------------
Jean B. Buttner, President, Principal Executive Officer
By: /s/ Stephen R. Anastasio
------------------------------------------------------------
Stephen R. Anastasio, Treasurer, Principal Financial Officer
Date: 3/10/06
--------------