Value Line Aggressive Income Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The primary investment objective of the Trust is to maximize current income through investment in a diversified portfolio of high-yield fixed-income securities. As a secondary investment objective, the Trust will seek capital appreciation but only when consistent with its primary objective. Lower rated or unrated (i.e., high-yield) securities are more likely to react to developments affecting market risk (general market liquidity) and credit risk (issuers’ inability to meet principal and interest payments on their obligations) than are more highly rated securities, which react primarily to movements in the general level of interest rates. The ability of issuers of debt securities held by the Trust to meet their obligations may be affected by economic developments in a specific industry. The following significant accounting policies are in conformity with generally accepted accounting principles for investment companies. Such policies are consistently followed by the Trust in the preparation of its financial statements. Generally accepted accounting principles may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. Management is currently evaluating the impact the adoption of SFAS No. 157 will have on the Trust’s financial statement disclosures.
Value Line Aggressive Income Trust
July 31, 2007
(C) Distributions. It is the policy of the Trust to distribute all of its net investment income to shareholders. Dividends from net investment income will be declared daily and paid monthly. Net realized capital gains, if any, are distributed to shareholders annually or more frequently if necessary to comply with the Internal Revenue Code. Income dividends and capital gains distributions are automatically reinvested in additional shares of the Trust unless the shareholder has requested otherwise. Income earned by the Trust on weekends, holidays and other days on which the Trust is closed for business is declared as a dividend on the next day on which the Trust is open for business.
(D) Federal Income Taxes. It is the Trust’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.
In July 2006, the Financial Accounting Standards Board issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109” (the “Interpretation”). The Interpretation establishes for all entities, including pass-through entities such as the Trust, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006, and is to be applied to all open tax years as of the date of effectiveness. As of July 31, 2007, management has reviewed the tax positions for the tax years still subject to tax audit under the statute of limitations, evaluated the implication of FIN 48, and determined that there is no impact to the Trust’s financial statements at this time.
(E) Foreign Currency Translation. The books and records of the Trust are maintained in U.S. dollars. Assets and liabilities which are denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. The Trust does not isolate changes in the value of investments caused by foreign exchange rate differences from the changes due to other circumstances.
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 fluctuations realized between the trade and settlement dates on securities transactions, the differences between the U.S. dollar amounts of dividends, interest, and foreign withholding taxes recorded by the Trust 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 fiscal period, resulting from changes in the exchange rates. The effect of the change in foreign exchange rates on the value of investments is included in realized gain/loss on investments and change in net unrealized appreciation/(depreciation) on investments.
(F) Representations and Indemnifications. In the normal course of business, the Trust enters into contracts that contain a variety of representations and warranties which provide general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that maybe made against the Trust that have not yet occurred. However, based on experience, the Trust expects the risk of loss to be remote.
(G) Security Transactions. Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified-cost basis. Interest income, adjusted for amortization of discount and premium, is earned from settlement date and recognized on the accrual basis. Dividend income is recorded on the ex-dividend date. Dividends received in excess of income are recorded as a reduction of cost of
13
Value Line Aggressive Income Trust
Notes to Financial Statements (unaudited)
investments and/or realized gain on Real Estate Investment Trusts (REITs).
(H) Redemption Fees. The Trust charges a 2% redemption fee on shares held for less than 120 days. Such fees are retained by the Trust and accounted for as paid in capital.
2. | | Trust Share Transactions and Distributions to Shareholders |
Transactions in shares of beneficial interest in the Trust were as follows:
| | | | Six Months Ended
July 31, 2007
(unaudited)
|
| Year Ended
January 31, 2007
|
|---|
| Shares sold | | | | | 185,378 | | | | 477,167 | |
| Shares issued to shareholders in reinvestment of dividends | | | | | 178,035 | | | | 393,013 | |
| Shares repurchased | | | | | (696,145 | ) | | | (2,233,473 | ) |
| Net decrease | | | | | (332,732 | ) | | | (1,363,293 | ) |
| Dividends per share from net Investment income | | | | $ | 0.1695 | | | $ | 0.3245 | |
Redemption fees of $2,691 and $3,979 were retained by the Trust for the six months ended July 31, 2007 and the year ended January 31, 2007, respectively.
3. | | Purchases and Sales of Securities |
Purchases and sales of investment securities, excluding short-term securities, were as follows:
| | | | Six Months Ended
July 31, 2007
(unaudited)
|
|---|
Purchases:
| | | |
|---|
| Investment Securities | | | | | $5,027,180 | |
Sales:
| | | | | | |
| Investment Securities | | | | | $6,517,860 | |
4. | | Income Taxes (unaudited) |
At July 31, 2007, information on the tax components of capital is as follows:
| Cost of investments for tax purposes | | | | $ | 34,633,193 | |
| Gross tax unrealized appreciation | | | | $ | 552,517 | |
| Gross tax unrealized depreciation | | | | | (938,721 | ) |
| Net tax unrealized depreciation on investments | | | | $ | (386,204 | ) |
| Capital loss carryforward, expires January 31, 2008 | | | | $ | (17,303,550 | ) |
| Capital loss carryforward, expires January 31, 2009 | | | | | (20,922,783 | ) |
| Capital loss carryforward, expires January 31, 2010 | | | | | (20,653,696 | ) |
| Capital loss carryforward, expires January 31, 2011 | | | | | (5,624,767 | ) |
| Capital loss carryforward, at January 31, 2007 | | | | $ | (64,504,796 | ) |
To the extent future capital gains are offset by capital losses, the Trust does not anticipate distributing any such gains to the shareholders. It is uncertain whether the Trust will be able to realize the benefits of the losses before they expire.
5. | | Investment Advisory Fee, Service and Distribution Fees and Transactions With Affiliates |
An advisory fee of $136,382 was paid or payable to Value Line, Inc., the Trust’s investment adviser, (the “Adviser”), for the six months ended July 31, 2007. This was computed at an annual rate of 0.75 of 1% per year on the first $100 million of the Trust’s average daily net assets for the year, and 0.50 of 1% on the average daily net assets in excess thereof. The Adviser provides research, investment programs and supervision of the investment portfolio and pays costs of administrative services and office space. The Adviser also provides persons, satisfactory to the Trust’s Trustees, to act as officers of the Trust and pays their salaries and wages. Direct expenses of the Trust are charged
14
Value Line Aggressive Income Trust
July 31, 2007
to the Trust while common expenses of the Value Line Funds are allocated proportionately based upon the funds’ respective net assets. The Trust bears all other costs and expenses. Effective March 7, 2006, the Adviser voluntarily waived 0.40% of the advisory fee. Effective June 1, 2007, the Adviser contractually agreed to continue to waive 0.40% of the Trust’s advisory fee for a one year period. The fee waiver amounted to $72,737 for the six months ended July 31, 2007. The Adviser has no right to recoup previously waived amounts.
The Trust has a Service and Distribution Plan (the “Plan”). The Plan, adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, compensates Value Line Securities, Inc., a subsidiary of the Adviser (the “Distributor”) for advertising, marketing and distributing the Trust’s shares and for servicing the Trust’s shareholders at an annual rate of 0.25% of the Trust’s average daily net assets. Fees amounting to $45,461, before fee waivers, were accrued under the Plan for the six months ended July 31, 2007. Effective March 7, 2006, the Distributor voluntarily waived 0.10% of the fee under the Plan. Effective June 1, 2007, the Distributor contractually agreed to continue to waive 0.10% of the fee for a one year period. The fee waiver amounted to $18,184 for the six months ended July 31, 2007. The Distributor has no right to recoup previously waived amounts.
For the six months ended July 31, 2007, the Trust’s expenses were reduced by $2,514 under a custody credit arrangement with the custodian.
Certain officers and a director of the Adviser and Value Line Securities, Inc., are also officers and a Trustee of the Trust. At July 31, 2007, the officers and Trustee as a group owned 1,608 shares of beneficial interest in the Trust, representing less than 1% of the outstanding shares.
15
Value Line Aggressive Income Trust
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout each period:
| | | | | | Years Ended January 31,
| |
|---|
| | | | Six Months
Ended
July 31, 2007
(unaudited)
|
| 2007
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
|---|
Net asset value, beginning
of year | | | | $ | 5.06 | | | $ | 5.01 | | | $ | 5.16 | | | $ | 5.06 | | | $ | 4.35 | | | $ | 4.74 | |
Income from investment operations:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | | 0.17 | | | | 0.32 | | | | 0.31 | | | | 0.33 | | | | 0.34 | | | | 0.41 | |
| Net gains or losses on securities (both realized and unrealized) | | | | | (0.15 | ) | | | 0.05 | | | | (0.15 | ) | | | 0.09 | | | | 0.70 | | | | (0.40 | ) |
| Total from investment operations | | | | | 0.02 | | | | 0.37 | | | | 0.16 | | | | 0.42 | | | | 1.04 | | | | 0.01 | |
| Redemption fees | | | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.01 | | | | 0.01 | | | | 0.01 | |
Less distributions:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dividends from net investment income | | | | | (0.17 | ) | | | (0.32 | ) | | | (0.31 | ) | | | (0.33 | ) | | | (0.34 | ) | | | (0.41 | ) |
Net asset value, end of period | | | | $ | 4.91 | | | $ | 5.06 | | | $ | 5.01 | | | $ | 5.16 | | | $ | 5.06 | | | $ | 4.35 | |
Total return | | | | | 0.34 | %(4) | | | 7.80 | % | | | 3.32 | % | | | 8.55 | % | | | 25.01 | % | | | 0.40 | % |
Ratios/Supplemental Data:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period
(in thousands) | | | | $ | 34,596 | | | $ | 37,340 | | | $ | 43,761 | | | $ | 59,919 | | | $ | 64,101 | | | $ | 53,006 | |
Ratio of expenses to average
net assets(1) | | | | | 1.38 | %(5) | | | 1.50 | % | | | 1.45 | % | | | 1.39 | % | | | 1.43 | % | | | 1.37 | % |
Ratio of expenses to average
net assets(2) | | | | | 0.86 | %(5) | | | 1.05 | % | | | 1.45 | % | | | 1.39 | % | | | 1.43 | % | | | 1.37 | % |
| Ratio of net investment income to average net assets | | | | | 6.73 | %(5) | | | 6.54 | % | | | 6.19 | % | | | 6.28 | % | | | 6.98 | % | | | 9.12 | % |
| Portfolio turnover rate | | | | | 15 | %(4) | | | 31 | % | | | 27 | % | | | 69 | % | | | 76 | % | | | 59 | % |
(1) | | Ratio reflects expenses grossed up for custody credit arrangement and grossed up for the waiver of a portion of the advisory fee by the Adviser and a portion of the service and distribution plan fees by the Distributor. The ratio of expenses to average net assets, net of custody credits, but exclusive of the waiver of a portion of the advisory fee by the Adviser and the waiver of the service and distribution plan fees by the Distributor, would have been 1.36% (annualized) for the six months ended July 31, 2007, 1.49% for the year ended January 31, 2007 and would not have changed for the other years shown. |
(2) | | Ratio reflects expenses net of the waiver of a portion of the advisory fee by the Adviser and a portion of the service and distribution plan fees by the Distributor and net of the custody credit arrangement. |
(3) | | Amount is less than $0.01 per share. |
See Notes to Financial Statements.
16
Value Line Aggressive Income Trust
Factors Considered by the Board in Approving the Investment Advisory
Agreement for Value Line Aggressive Income Trust (unaudited)
The Investment Company Act of 1940 (the “1940 Act”) requires the Board of Trustees, including a majority of Trustees who are not interested persons of the Trust, as that term is defined in the 1940 Act (the “Independent Trustees”), annually to consider the investment advisory agreement (the “Agreement”) between the Trust and its investment adviser, Value Line, Inc. (“Value Line”). As required by the 1940 Act, the Board requested and Value Line provided such information as the Board deemed to be reasonably necessary to evaluate the terms of the Agreement. At meetings held throughout the year, including the meeting specifically focused upon the review of the Agreement held on March 8, 2007, the Independent Trustees met in executive sessions separately from the non-Independent Trustee of the Trust and any officers of Value Line. In selecting Value Line and approving the continuance of the Agreement, the Independent Trustees relied upon the assistance of counsel to the Independent Trustees.
Both in the meeting that specifically addressed the approval of the Agreement and at other meetings held during the course of the year, the Board, including the Independent Trustees, received materials relating to Value Line’s investment and management services under the Agreement. These materials included information on (i) the investment performance of the Trust over various periods of time compared to the performance of a peer group of funds consisting of the Trust and all retail and institutional high current yield funds regardless of asset size or primary channel of distribution (the “Performance Universe”), as classified by Lipper Inc., an independent evaluation service (“Lipper”), and to the Trust’s benchmark index; (ii) sales and redemption data with respect to the Trust; (iii) the general investment outlook in the markets in which the Trust invests; (iv) arrangements with respect to the distribution of the Trust’s shares; (v) the allocation of the Trust’s brokerage (none of which was effected through any affiliate of Value Line); and (vi) the overall nature, quality and extent of services provided by Value Line.
As part of the review of the continuance of the Agreement, the Board requested, and Value Line provided, additional information in order to evaluate the quality of Value Line’s services and the reasonableness of its fees under the Agreement. In a separate executive session, the Independent Trustees engaged in an extensive review of information, which included data comparing: (i) the Trust’s management fees, transfer agent/custodian fees, service fees (including 12b-1 fees), and other non-management fees, to those incurred by a peer group of funds consisting of the Trust and 12 other retail no-load high current yield funds, as selected objectively by Lipper (the “Expense Group”), and a peer group of funds consisting of the Trust, the Expense Group and all other retail no-load high current yield funds, as selected objectively by Lipper (the “Expense Universe”); (ii) the Trust’s average expense ratio to those of its Expense Group and Expense Universe; (iii) the Trust’s investment performance over various time periods to the average performance of the Performance Universe as well as the 10 or 30 (depending upon availability) largest retail high current yield funds as selected by Lipper (the “Lipper Index”); (iv) Value Line’s financial results and condition, including Value Line’s and its affiliates’ profitability from the services that have been performed for the Trust as well as the Value Line family of funds; (v) the Trust’s current investment management staffing; and (vi) the Trust’s potential for achieving economies of scale. In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the Expense Group, the Expense Universe and the Performance Universe to prepare its information.
The following summarizes matters considered by the Board in connection with its renewal of the Agreement. However, the Board did not identify any single factor as all-important or controlling, and the summary does not detail all the matters that were considered.
17
Value Line Aggressive Income Trust
Factors Considered by the Board in Approving the Investment Advisory
Agreement for Value Line Aggressive Income Trust (unaudited)
Investment Performance. The Board reviewed the Trust’s overall investment performance and compared it to its Performance Universe and the Lipper Index. The Board noted that the Trust’s performance for the one-year, three-year, five-year and ten-year periods ended December 31, 2006 was below the performance of both the Performance Universe average and the Lipper Index.
Value Line’s Personnel and Methods. The Board reviewed the background of the portfolio manager responsible for the daily management of the Trust’s portfolio, achieving the Trust’s investment objective and adhering to the Trust’s investment strategy. The Independent Trustees also engaged in discussions with Value Line’s senior management who are responsible for the overall functioning of the Trust’s investment operations. Based on this review, the Board concluded that the Trust’s management team and Value Line’s overall resources were well developed and that Value Line had investment management capabilities and personnel essential to performing its duties under the Agreement.
Management Fee and Expenses. The Board considered Value Line’s fee under the Agreement relative to the management fees charged by its Expense Group and Expense Universe averages. The Board noted that, effective March 7, 2006, Value Line voluntarily agreed to waive a portion of the Trust’s management fee, effectively reducing the management fee rate from 0.75% to 0.35% of the Trust’s average daily net assets. As a result of this voluntary management fee waiver, the Board noted that, for the most recent fiscal year, the Trust’s management fee rate (after giving effect to the voluntary management fee waiver) was less than that of both the Expense Group average and the Expense Universe average. In addition, the Board and Value Line agreed that the management fee waiver, as described above, for a one-year period effective June 1, 2007, would be contractually imposed so that it could not be changed without the Board’s approval during such period. Based on these factors, the Board determined that the Trust’s management fee rate payable to Value Line under the Agreement does not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the management fee rate under the Agreement is fair and reasonable.
The Board also considered that the Trust’s total expense ratio relative to its Expense Group and Expense Universe averages. The Board noted that, effective March 7, 2006, Value Line Securities, Inc., the Trust’s principal underwriter, voluntarily agreed to waive a portion of the Trust’s Rule 12b-1 fee, effectively reducing the Trust’s Rule 12b-1 fee rate from 0.25% to 0.15% of the Trust’s average daily net assets. As a result of this voluntary Rule 12b-1 fee waiver and the management fee waiver, the Board noted that the Trust’s total expense ratio (after giving effect to these waivers) was only slightly higher than that of both the Expense Group average and the Expense Universe average and concluded that the average expense ratio was satisfactory for the purpose of approving the continuance of the Agreement for the coming year. The Board also noted that Value Line Securities, Inc. contractually agreed to waive a portion of the Trust’s Rule 12b-1 fee, as described above, for a one-year period effective June 1, 2007 so that such waiver could not be changed without the Board’s approval during such period.
Nature and Quality of Other Services. The Board considered the nature, quality, cost and extent of other services provided by Value Line and its affiliate, Value Line Securities, Inc., the Trust’s principal underwriter. At meetings held throughout the year, the Board reviewed the effectiveness of Value Line’s overall compliance program, as well as the services provided by Value Line Securities, Inc. The Board also reviewed the services provided by Value Line and its affiliate in supervising third party service providers. Based on this review, the Board concluded that the nature, quality, cost and extent of such other services provided by Value Line and its affiliate were satisfactory, reliable and beneficial to the Trust’s shareholders.
18
Value Line Aggressive Income Trust
Factors Considered by the Board in Approving the Investment Advisory
Agreement for Value Line Aggressive Income Trust (unaudited)
Profitability. The Board considered the level of Value Line’s profits with respect to the management of the Trust, including the impact of certain actions taken during 2005, 2006 and 2007. These actions included Value Line’s review of its methodology in allocating certain of its costs to the management of each fund, the reduction of management and/or Rule 12b-1 fees for certain funds (both of which type of reductions may be changed by Value Line or Value Line Securities, Inc. (as the case may be) for certain funds or, for other funds, may not be changed during a set term unless approved by the Board), Value Line’s termination of the use of soft dollar research, and the cessation of trading through Value Line Securities, Inc. Based on a review of these actions and Value Line’s overall profitability, the Board concluded that Value Line’s profits from management of the Trust, including the financial results derived from the Trust, bear a reasonable relationship to the services rendered and are fair for the management of the Trust in light of the business risks involved.
Other Benefits. The Board also considered the character and amount of other direct and incidental benefits received by Value Line and its affiliates from their association with the Trust. The Board concluded that potential “fall-out” benefits that Value Line and its affiliates may receive, such as greater name recognition, appear to be reasonable, and may in some cases benefit the Trust.
Economies of Scale. The Board noted that, given the current and anticipated size of the Trust, any perceived and potential economies of scale were not yet a relevant consideration for the Trust and additional break points in the management fee was determined not to be necessary at this time.
Conclusion. The Board, in light of Value Line’s overall performance and actions taken with respect to the rate at which the management fees and Rule 12b-1 fees are charged, considered it appropriate to continue to retain Value Line as the Trust’s investment adviser. Based on their evaluation of all material factors deemed relevant, and with the advice of independent counsel, the Board concluded that the Trust’s Agreement is fair and reasonable and voted to approve the continuation of the Agreement for another year.
19
Value Line Aggressive Income Trust
Management of the Trust
MANAGEMENT INFORMATION
The business and affairs of the Trust are managed by the Trust’s officers under the direction of the Board of Trustees. The following table sets forth information on each Trustee and Officer of the Trust. Each Trustee serves as a director or trustee of each of the 14 Value Line Funds. Each Trustee serves until his or her successor is elected and qualified.
Name, Address, and Age
|
|
|
| Position
|
| Length of
Time Served
|
| Principal Occupation
During the Past 5 Years
|
| Other
Directorships
Held by Trustee
|
|---|
Interested Trustee* | | | | | | | | | | | | | | | | |
Jean Bernhard Buttner
Age 72 | | | | Chairman of the Board of Trustees and President | | Since 1987 | | Chairman, President and Chief Executive Officer of Value Line, 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”). | | Value Line, Inc. |
Non-Interested Trustees | | | | | | | | | | | | | | | | |
John W. Chandler
1611 Cold Springs Road
Williamstown, MA 01267
Age 83 | | | | Trustee | | Since 1991 | | Consultant, Academic Search Consultation Service, Inc. 1992–2004; Trustee Emeritus and Chairman (1993–1994) of the Board of Trustees of Duke University; President Emeritus, Williams College. | | None |
Frances T. Newton
4921 Buckingham Drive
Charlotte, NC 28209
Age 65 | | | | Trustee | | Since 2000 | | Customer Support Analyst,
Duke Power Company. | | None |
Francis C. Oakley
54 Scott Hill Road
Williamstown, MA 01267
Age 75 | | | | Trustee | | Since 2000 | | Professor of History, Williams College, 1961 to 2002; Professor Emeritus since 2002; President Emeritus since 1994 and President, 1985–1994; Chairman (1993–1997) and Interim President (2002–2003) of the American Council of Learned Societies. Trustee since 1997 and Chairman of the Board since 2005, National Humanities Center. | | None |
David H. Porter
5 Birch Run Drive
Saratoga Springs, NY 12866
Age 71 | | | | Trustee | | Since 1997 | | Visiting Professor of Classics, Williams College, since 1999; President Emeritus, Skidmore College since 1999 and President, 1987–1998. | | None |
20
Value Line Aggressive Income Trust
Management of the Trust
Name, Address, and Age
|
|
|
| Position
|
| Length of
Time Served
|
| Principal Occupation
During the Past 5 Years
|
| Other
Directorships
Held by Trustee
|
|---|
Paul Craig Roberts
169 Pompano St.
Panama City Beach, FL 32413
Age 68 | | | | Trustee | | Since 1987 | | Chairman, Institute for Political Economy. | | None |
Nancy-Beth Sheerr
1409 Beaumont Drive
Gladwyne, PA 19035
Age 58 | | | | Trustee | | Since 1996 | | Senior Financial Advisor, Veritable L.P. (investment adviser) since 2004; Senior Financial Advisor, Hawthorn, 2001–2004. | | None |
Officers | | | | | | | | | | | | | | | | |
David T. Henigson
Age 49 | | | | Vice President/
Secretary/Chief Compliance Officer | | Since 1994 | | Director, Vice President and Compliance Officer of the Adviser. Director and Vice President of the Distributor. Vice President, Secretary and Chief Compliance Officer of each of the 14 Value Line Funds. | | |
Stephen R. Anastasio
Age 48 | | | | Treasurer | | Since 2005 | | Controller of the Adviser until 2003; Chief Financial Officer of the Adviser 2003–2005; Treasurer of the Adviser since 2005. Treasurer of each of the 14 Value Line Funds. | | |
Howard A. Brecher
Age 53 | | | | Assistant Secretary/
Assistant Treasurer | | Since 2005 | | Director, Vice President and 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 Trust’s Statement of Additional Information (SAI) includes additional information about the Trust’s Trustees and is available, without charge, upon request by calling 1-800-243-2729. |
21
Value Line Aggressive Income Trust
The Trust 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 Trust’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 Trust uses to determine how to vote proxies relating to portfolio securities, and information regarding how the Trust voted these proxies during the most recent 12-month period ended June 30 is available through the Trust’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.
22
Value Line Aggressive Income Trust
[This page is intentionally left blank.]
23
Value Line Aggressive Income Trust
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 — The 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 Larger Companies Fund’s 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, 9am – 5pm CST, Monday – Friday, or visit us at www.vlfunds.com. Read the prospectus carefully before you invest or send money.
24
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) | (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.
| Jean B. Buttner, President |
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.
| Jean B. Buttner, President, Principal Executive Officer |
By: | /s/ Stephen R. Anastasio |
| Stephen R. Anastasio, Treasurer, Principal Financial Officer |
Date: September 28, 2007
