N-CSRS 1 d22970.htm

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 _811-03171_

 

Value Line U.S. Government Securities Fund, Inc.  

(Exact name of registrant as specified in charter)

 

220 East 42nd Street, New York, N.Y. 10017

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: 212-907-1500

 

Date of fiscal year end: August 31, 2008

 

Date of reporting period: February 29, 2008

 


Item I. Reports to Stockholders.

 

     A copy of the Semi-Annual Report to Stockholders for the period ended 2/29/08 is included with this Form.


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
SERVICING AGENT
           
State Street Bank and Trust Co.
c/o BFDS
P.O. Box 219729
Kansas City, MO 64121-9729
INDEPENDENT
REGISTERED PUBLIC
ACCOUNTING FIRM
           
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
LEGAL COUNSEL
           
Peter D. Lowenstein, Esq.
496 Valley Road
Cos Cob, CT 06807-0272
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
David T. Henigson
Vice President, Secretary/
Chief Compliance Officer

Stephen R. Anastasio
Treasurer
Howard A. Brecher
Assistant Secretary/
Assistant Treasurer

 

This unaudited report is issued for information to 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).

 

#541514



SEMI-ANNUAL REPORT

February 29, 2008

Value Line
U.S. Government
Securities
Fund, Inc.





Value Line U.S. Government Securities Fund, Inc.

To Our Value Line U.S. Government

To Our Shareholders:

Bond prices rallied as interest rates fell during the six-month period ended February 29, 2008.

The decline in interest rates resulted from an economic slowdown along with a global credit crisis triggered by a meltdown in subprime mortgages. This situation prompted the Federal Reserve Board to reduce interest rates, bringing the fed funds rate from 5.25% to 3.00% during the period. In addition, the Federal Reserve instituted other measures to safeguard the financial system, as the financial health of the major banks and brokerages was threatened by the credit crisis.

During the period, interest rates fell across all maturities. Short-term rates experienced the largest drop. Because of the credit crisis and the problems within the financial sector, short-maturity high quality bonds rallied strongly, as investors flocked to the safety of these securities. The two-year Treasury note’s rate fell from 4.13% to 1.62%. Longer maturities also participated in the rally and the 10-year Treasury note declined in yield from 4.53% to 3.51%.

Your Fund benefited from the bond rally generating a total return for the six months ended February 29, 2008 of 6.25%. The return was less than the 7.68% return for its benchmark, the Lehman Brothers Intermediate U.S. Government Bond Index. (1) The underperformance can be explained by the relative differences in the Fund’s portfolio versus the unmanaged Lehman Index. Your Fund holds a substantial position in AAA rated U.S. Government sponsored mortgage-backed securities, which have historically provided a higher level of income than all other U.S. Government debt securities. In contrast, the Lehman Index does not contain any of these securities.

The widely publicized credit problems affecting the subprime mortgage market have hurt all mortgage-related securities, even those backed by the U.S. Government. Rather than taking comfort in the security of owning bonds that are backed by the Federal Government, many bond buyers have, instead, rushed to invest in short-term U.S. Treasury securities driving their yields down and their prices up. While we believe that this is a short-term phenomenon, it nevertheless did boost the total return of the Lehman Index and hurt the Fund’s performance.

In our judgment, the Fund’s shareholders would be best-served by avoiding the stampede into low-yielding U.S. Treasury securities. Rather we believe that our strategy of investing part of the Fund’s assets in a well diversified, yet highly rated, portfolio of mortgage-backed securities issued by U.S. Government agencies is in the best long-term interests of the Fund and its shareholders. Additionally, by limiting the average maturity to no more than ten years, we provide a counterweight against gyrating interest rates.

Thank you for your confidence in Value Line; we appreciate your continued support.

Sincerely,

 

Jean Bernhard Buttner
Chairman and President

April 9, 2008     


(1)    
  The Lehman Brothers Intermediate U.S. Government Bond Index represents the intermediate maturities (1-10 years) of the U.S. Treasury and U.S. Agency segment of the fixed-income market. The returns for the Index do not reflect charges, expenses, or taxes, and it is not possible to directly invest in this Index.


2



Value Line U.S. Government Securities Fund, Inc.

Securities Fund Shareholders

Economic Observations

The year-ahead economic outlook is growing increasingly guarded, with weakness now present in the major consumer and industrial markets. What’s more, there is no quick or easy cure for what ails the economy, with softness likely to continue in housing, retailing, and employment. The economy, which began to slow noticeably during the final quarter of 2007, when gross domestic product growth slowed to a minuscule 0.6%, is likely to weaken further through at least midyear. Indeed, we believe that the country is already in a recession.

Meanwhile, even with a somewhat better second half, a modest rate of business growth for the year as a whole is about the best that we can now expect. In fact, even that cautious forecast assumes that there will be no exogenous shocks to the system, such as a worsening of the situation in the Middle East or a further surge in oil prices. Either of these events, along with a worsening of the housing slump or a serious miscalculation by the Federal Reserve on the monetary front, might prove sufficiently troubling to almost assure that the mild business downturn that we believe is in place would become a fairly serious recession.

Currently, inflation is trending higher due to rising energy, food, and commodity costs. Adequate supplies of raw materials should help keep the costs of production under some control, though, suggesting that a major surge in pricing is not in the offing just yet. We caution, however, that as the pace of economic growth accelerates after 2008 and 2009, an increase in pricing pressures may emerge. Absent a stronger long-term business expansion than we now forecast, or a ratcheting up in oil prices, inflation should be held in relative check through the early years of the next decade.


3



Value Line U.S. Government Securities Fund, Inc.

    


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 (September 1, 2007 through February 29, 2008).

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.

        Beginning
account
value
9/1/07
    Ending
account
value
2/29/08
    Expenses*
paid during
period
9/1/07
thru
2/29/08
Actual
              $ 1,000.00          $ 1,062.50          $ 3.79   
Hypothetical (5% return before expenses)
              $ 1,000.00          $ 1,021.18          $ 3.72   
 

*
  Expenses are equal to the Fund’s annualized expense ratio of 0.74% multiplied by the average account value over the period, multiplied by 182/366 to reflect the one-half period. This expense ratio may differ from the expense ratio shown in the Financial Highlights.


4



Value Line U.S. Government Securities Fund, Inc.

Portfolio Highlights at February 29, 2008 (unaudited)

Ten Largest Holdings

Issue


  
Principal
Amount
  
Value
  
Percentage
of Fund’s
Net Assets
Morgan Stanley Repurchase Agreement, 1.65%, 3/3/08
              $ 4,600,000          $ 4,600,000             5.1 %  
Federal Home Loan Bank, 7.45%, 2/3/20
              $ 3,000,000          $ 3,822,972             4.2 %  
Federal Farm Credit Bank, 5.70%, 7/3/17
              $ 3,000,000          $ 3,341,358             3.7 %  
U.S. Treasury Notes, 4.63%, 7/31/12
              $ 2,000,000          $ 2,187,344             2.4 %  
U.S. Treasury Notes, 4.63%, 10/31/11
              $ 2,000,000          $ 2,177,344             2.4 %  
Federal Home Loan Mortgage Corporation, 4.50%, 7/15/13
              $ 2,000,000          $ 2,104,274             2.3 %  
2.Federal Home Loan Mortgage Corporation, 5.50%, 9/15/11
              $ 1,500,000          $ 1,628,556             1.8 %  
Federal Home Loan Mortgage Corporation Gold PC Pool #G12381, 5.00%, 9/1/21
              $ 1,590,875          $ 1,612,986             1.8 %  
Federal Home Loan Mortgage Corporation Gold PC Pool #C77717, 6.00%, 3/1/33
              $ 1,561,426          $ 1,602,179             1.8 %  
U.S. Treasury Notes, 8.75%, 5/15/17
              $ 1,000,000          $ 1,405,000             1.6 %  
 


Asset Allocation — Percentage of Fund’s Net Assets

 


Coupon Distribution




  
Percentage of
Fund’s investments
Less than 4%
                 7.1 %  
4–4.99%
                 34.1 %  
5–5.99%
                 41.4 %  
6–6.99%
                 9.2 %  
7–7.99%
                 6.6 %  
8–8.99%
                 1.6 %  
 


5



Value Line U.S. Government Securities Fund, Inc.

Schedule of Investments (unaudited)

 

Principal
Amount


  

  
Rate
  
Maturity
Date

  
Value
U.S. TREASURY OBLIGATIONS (10.0%)
                                           
$2,000,000
           
U.S. Treasury Notes
         4.63 %            10/31/11          $ 2,177,344   
2,000,000
           
U.S. Treasury Notes
         4.63             7/31/12             2,187,344   
1,000,000
           
U.S. Treasury Notes
         4.00             11/15/12             1,069,063   
1,100,010
           
U.S. Treasury Notes(1)
         1.63             1/15/15             1,164,894   
1,000,000
           
U.S. Treasury Notes
         4.13             5/15/15             1,065,157   
1,000,000
           
U.S. Treasury Notes
         8.75             5/15/17             1,405,000   
8,100,010
 
           
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $8,349,541)
                                       9,068,802   
 
U.S. GOVERNMENT AGENCY OBLIGATIONS (83.3%)
                                           
 
           
FEDERAL FARM CREDIT BANK (7.2%)
                                               
1,000,000
           
Federal Farm Credit Bank
         6.82             3/16/09             1,045,946   
1,000,000
           
Federal Farm Credit Bank
         4.85             10/25/12             1,068,054   
1,000,000
           
Federal Farm Credit Bank
         5.30             6/22/15             1,000,221   
3,000,000
           
Federal Farm Credit Bank
         5.70             7/3/17             3,341,358   
6,000,000
 
           
TOTAL FEDERAL FARM CREDIT BANK
(Cost $6,085,581)
                                       6,455,579   
 
           
FEDERAL HOME LOAN BANK (11.1%)
                                               
1,000,000
           
Federal Home Loan Bank
         4.10             6/13/08             1,003,666   
1,000,000
           
Federal Home Loan Bank
         5.25             11/14/08             1,018,960   
1,000,000
           
Federal Home Loan Bank
         4.38             3/17/10             1,040,677   
1,000,000
           
Federal Home Loan Bank
         4.38             9/17/10             1,044,999   
1,000,000
           
Federal Home Loan Bank
         4.88             11/18/11             1,067,484   
1,000,000
           
Federal Home Loan Bank
         4.50             9/16/13             1,050,908   
3,000,000
           
Federal Home Loan Bank
         7.45             2/3/20             3,822,972   
9,000,000
 
           
TOTAL FEDERAL HOME LOAN BANK
(Cost $9,337,377)
                                       10,049,666   
 
           
FEDERAL HOME LOAN MORTGAGE CORPORATION (40.6%)
           
1,000,000
           
Federal Home Loan Mortgage Corporation
         4.25             7/15/09             1,026,813   
1,000,000
           
Federal Home Loan Mortgage Corporation
         4.00             12/15/09             1,029,695   
1,000,000
           
Federal Home Loan Mortgage Corporation
         4.13             7/12/10             1,037,233   
1,500,000
           
Federal Home Loan Mortgage Corporation
         5.50             9/15/11             1,628,556   
1,000,000
           
Federal Home Loan Mortgage Corporation
         4.50             5/14/12             1,004,001   
1,000,000
           
Federal Home Loan Mortgage Corporation
         5.13             7/15/12             1,080,106   
1,000,000
           
Federal Home Loan Mortgage Corporation
         5.50             8/20/12             1,094,828   
1,000,000
           
Federal Home Loan Mortgage Corporation
         4.75             5/6/13             1,003,402   
1,000,000
           
Federal Home Loan Mortgage Corporation
         4.00             6/12/13             1,028,345   
2,000,000
           
Federal Home Loan Mortgage Corporation
         4.50             7/15/13             2,104,274   

See Notes to Financial Statements.


6



Value Line U.S. Government Securities Fund, Inc.

February 29, 2008

Principal
Amount


  

  
Rate
  
Maturity
Date

  
Value
$1,312,218
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 3197 Class AB
         5.50 %            8/15/13          $ 1,343,269   
1,000,000
           
Federal Home Loan Mortgage Corporation
         5.00             1/30/14             1,073,485   
1,000,000
           
Federal Home Loan Mortgage Corporation
         4.50             1/15/15             1,042,339   
738,506
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 2849 Class VA
         5.00             8/15/15             768,725   
806,672
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series R003 Class AG
         5.13             10/15/15             824,641   
1,070,864
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 2767 Class CA
         4.00             9/15/17             1,074,268   
20,920
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #E92226
         5.00             11/1/17             21,271   
1,000,000
           
Federal Home Loan Mortgage Corporation
         5.13             11/17/17             1,067,413   
353,600
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #E93499
         5.00             12/1/17             359,533   
23,773
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #E92829
         5.00             12/1/17             24,171   
623,620
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 2892 Class DC
         4.50             12/15/17             630,287   
22,318
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #E98960
         5.00             9/1/18             22,661   
54,425
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #B12822
         5.00             3/1/19             55,262   
52,214
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #B17398
         4.50             12/1/19             52,390   
396,622
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #G18044
         4.50             3/1/20             396,487   
185,692
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #B18034
         4.50             4/1/20             185,629   
57,740
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #J00118
         5.00             10/1/20             58,542   
568,752
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #J00139
         5.00             10/1/20             576,657   
55,032
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #G11986
         5.00             4/1/21             55,731   
68,799
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #G12319
         5.00             6/1/21             69,756   
226,593
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #J03233
         5.00             8/1/21             229,469   
1,590,875
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #G12381
         5.00             9/1/21             1,612,986   
782,661
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 2773 Class DA
         5.00             6/15/22             802,632   

See Notes to Financial Statements.


7



Value Line U.S. Government Securities Fund, Inc.

Schedule of Investments (unaudited)

Principal
Amount


  

  
Rate
  
Maturity
Date

  
Value
$503,014
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 2937 Class JC
         5.00 %            9/15/22          $ 507,764   
611,043
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #C90684
         4.50             5/1/23             595,641   
736,803
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 3132 Class MA
         5.50             12/15/23             759,637   
848,588
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 3147 Class YE
         5.50             7/15/24             875,979   
1,000,000
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 2690 Class OE
         5.00             11/15/28             1,032,022   
1,000,000
           
Federal Home Loan Mortgage Corporation
         6.75             3/15/31             1,241,722   
820,656
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 3061 Class HA
         5.50             4/15/31             840,348   
529,481
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 2645 Class NA
         3.50             9/15/31             521,967   
383,333
 
           
Federal Home Loan Mortgage Corporation
REMIC Trust Series 2594 Class OR
         4.25             6/15/32             385,394   
1,561,426
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #C77717
         6.00             3/1/33             1,602,179   
942,777
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #A29526
         5.00             1/1/35             930,442   
539,772
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #A29633
         5.00             1/1/35             532,710   
593,609
 
           
Federal Home Loan Mortgage Corporation
Pool #783022 (2)
         4.42             2/1/35             605,178   
588,436
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #A56491
         5.00             1/1/37             579,804   
380,663
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #G08184
         5.00             1/1/37             375,079   
950,909
 
           
Federal Home Loan Mortgage Corporation
Gold PC Pool #A56467
         5.50             1/1/37             957,211   
35,502,406
 
           
TOTAL FEDERAL HOME LOAN MORTGAGE CORPORATION
(Cost $35,534,824)
                                       36,727,934   
 
           
FEDERAL NATIONAL MORTGAGE ASSOCIATION (22.3%)
                           
33,576
           
Federal National Mortgage Association Pool #254243
         6.00             2/1/09             34,248   
73,390
           
Federal National Mortgage Association Pool #254273
         5.00             3/1/09             74,013   
1,000,000
           
Federal National Mortgage Association
         4.50             2/15/11             1,048,063   
295,919
           
Federal National Mortgage Association Pool #255325
         4.50             7/1/11             297,094   
99,063
           
Federal National Mortgage Association Pool #511823
         5.50             5/1/16             101,816   
93,567
           
Federal National Mortgage Association Pool #615289
         5.50             12/1/16             96,167   
214,258
           
Federal National Mortgage Association Pool #622373
         5.50             12/1/16             220,211   
129,836
           
Federal National Mortgage Association Pool #631328
         5.50             2/1/17             133,396   

See Notes to Financial Statements.


8



Value Line U.S. Government Securities Fund, Inc.

February 29, 2008

Principal
Amount


  

  
Rate
  
Maturity
Date

  
Value
$182,388
           
Federal National Mortgage Association Pool #623503
         6.00 %            2/1/17          $ 189,006   
17,779
           
Federal National Mortgage Association Pool #643277
         5.50             4/1/17             18,266   
16,294
           
Federal National Mortgage Association Pool #638247
         5.50             5/1/17             16,741   
350,773
           
Federal National Mortgage Association Pool #254684
         5.00             3/1/18             356,289   
112,413
           
Federal National Mortgage Association Pool #685183
         5.00             3/1/18             114,180   
125,634
           
Federal National Mortgage Association Pool #703936
         5.00             5/1/18             127,609   
539,045
           
Federal National Mortgage Association Pool #790984
         5.00             7/1/19             546,832   
553,028
           
Federal National Mortgage Association Pool #786915
         5.00             8/1/19             561,017   
378,523
 
           
Federal National Mortgage Association
REMIC Trust Series 2003-28 Class KA
         4.25             3/25/22             380,363   
948,676
 
           
Federal National Mortgage Association
REMICS Trust Series 2003-17 Class ED
         4.25             9/25/22             949,783   
369,019
 
           
Federal National Mortgage Association
REMIC Trust Series 2003-38 Class TC
         5.00             3/25/23             380,058   
185,565
           
Federal National Mortgage Association Pool #412682
         6.00             3/1/28             191,249   
63,293
           
Federal National Mortgage Association Pool #424691
         6.50             4/1/28             66,273   
186,022
           
Federal National Mortgage Association Pool #425239
         6.50             4/1/28             194,781   
923,371
 
           
Federal National Mortgage Association
REMIC Trust Series 2003-26 Class AW
         4.00             4/25/30             925,149   
1,000,000
 
           
Federal National Mortgage Association
REMIC Trust Series 2006-102 Class PB
         5.00             4/25/30             1,027,000   
1,000,000
           
Federal National Mortgage Association
         7.25             5/15/30             1,303,576   
1,322
           
Federal National Mortgage Association Pool #568625
         7.50             1/1/31             1,430   
100,299
           
Federal National Mortgage Association Pool #571090
         7.50             1/1/31             108,455   
1,898
           
Federal National Mortgage Association Pool #573935
         7.50             3/1/31             2,052   
48,612
           
Federal National Mortgage Association Pool #629297
         6.50             2/1/32             50,770   
481,912
           
Federal National Mortgage Association Pool #626440
         7.50             2/1/32             519,587   
53,487
           
Federal National Mortgage Association Pool #634996
         6.50             5/1/32             55,848   
78,552
           
Federal National Mortgage Association Pool #254383
         7.50             6/1/32             84,693   
329,909
           
Federal National Mortgage Association Pool #254476
         5.50             9/1/32             333,356   
10,081
           
Federal National Mortgage Association Pool #688539
         5.50             3/1/33             10,181   
456,303
           
Federal National Mortgage Association Pool #650386
         5.00             7/1/33             451,565   
494,797
           
Federal National Mortgage Association Pool #726889
         5.50             7/1/33             499,704   
478,663
           
Federal National Mortgage Association Pool #759028
         5.50             1/1/34             483,410   
235,618
           
Federal National Mortgage Association Pool #761913
         5.50             2/1/34             237,626   
282,419
           
Federal National Mortgage Association Pool #763393
         5.50             2/1/34             285,220   
271,864
           
Federal National Mortgage Association Pool #769862
         5.50             2/1/34             274,180   
27,151
           
Federal National Mortgage Association Pool #769682
         5.00             3/1/34             26,841   
947,780
 
           
Federal National Mortgage Association
REMIC Trust Series 2004-60 Class LB
         5.00             4/25/34             973,720   
21,829
           
Federal National Mortgage Association Pool #778141
         5.00             5/1/34             21,579   
404,719
           
Federal National Mortgage Association Pool #773586
         5.50             6/1/34             408,167   
439,143
           
Federal National Mortgage Association Pool #255311
         6.00             7/1/34             450,159   

See Notes to Financial Statements.


9



Value Line U.S. Government Securities Fund, Inc.

Schedule of Investments (unaudited)

Principal
Amount


  

  
Rate
  
Maturity
Date

  
Value
$22,724
           
Federal National Mortgage Association Pool #258149
         5.50 %            9/1/34          $ 22,918   
4,371
           
Federal National Mortgage Association Pool #789150
         5.00             10/1/34             4,321   
647,339
           
Federal National Mortgage Association Pool #255496
         5.00             11/1/34             639,946   
63,851
           
Federal National Mortgage Association Pool #797154
         5.50             11/1/34             64,395   
140,246
           
Federal National Mortgage Association Pool #801063
         5.50             11/1/34             141,441   
259,074
           
Federal National Mortgage Association Pool #803675
         5.50             12/1/34             261,282   
273,474
           
Federal National Mortgage Association Pool #804683
         5.50             12/1/34             275,804   
576,888
           
Federal National Mortgage Association Pool #815813(2)
         4.58             2/1/35             590,427   
48,370
           
Federal National Mortgage Association Pool #255580
         5.50             2/1/35             48,782   
643,907
           
Federal National Mortgage Association Pool #735224
         5.50             2/1/35             650,293   
826,039
           
Federal National Mortgage Association Pool #896016
         6.00             8/1/36             844,612   
951,879
           
Federal National Mortgage Association Pool #901561
         5.50             10/1/36             958,183   
971,479
           
Federal National Mortgage Association Pool #919584
         6.00             6/1/37             993,195   
19,487,431
 
           
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION (Cost $19,603,693)
                                       20,127,322   
 
           
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (2.1%)
           
218,872
           
Government National Mortgage Association Pool #003645
         4.50             12/20/19             219,183   
11,164
           
Government National Mortgage Association Pool #541349
         6.00             4/15/31             11,596   
14,481
           
Government National Mortgage Association Pool #557681
         6.00             8/15/31             15,040   
136,400
           
Government National Mortgage Association Pool #548880
         6.00             12/15/31             141,673   
99,454
           
Government National Mortgage Association Pool #551762
         6.00             4/15/32             103,253   
48,943
           
Government National Mortgage Association Pool #582415
         6.00             11/15/32             50,813   
319,193
           
Government National Mortgage Association Pool #604485
         6.00             7/15/33             331,285   
164,209
           
Government National Mortgage Association Pool #622603
         6.00             11/15/33             170,429   
8,515
           
Government National Mortgage Association Pool #429786
         6.00             12/15/33             8,838   
376,128
           
Government National Mortgage Association Pool #605025
         6.00             2/15/34             390,135   
10,393
           
Government National Mortgage Association Pool #626480
         6.00             2/15/34             10,780   
87,467
           
Government National Mortgage Association Pool #610944
         5.50             4/15/34             89,584   
109,517
           
Government National Mortgage Association Pool #605245
         5.50             6/15/34             112,167   
252,693
           
Government National Mortgage Association Pool #583008
         5.50             6/15/34             258,809   
1,857,429
 
           
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (Cost $1,884,587)
                                       1,913,585   
71,847,266
 
           
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $72,446,062)
                                       75,274,086   
 
           
TOTAL INVESTMENT SECURITIES (93.3%)
(Cost $80,795,603)
                                       84,342,888   
 

See Notes to Financial Statements.


10



Value Line U.S. Government Securities Fund, Inc.

 

February 29, 2008

Principal
Amount


  

  
Value
REPURCHASE AGREEMENT (5.1%)
           
$4,600,000
 
 
           
With Morgan Stanley, 1.650%, dated 2/29/08, due 3/3/08, delivery value
$4,600,632 (collateralized by $4,630,000 U.S. Treasury Notes 4.875%,
due 8/31/08 with a value of $4,698,727) (Cost $4,600,000)
      $ 4,600,000   
 
           
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES (1.6%)
         1,475,240   
 
           
NET ASSETS (100.0%)
      $ 90,418,128   
 
           
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER OUTSTANDING SHARE ($90,418,128 ÷ 7,620,623 shares outstanding)
      $ 11.86   
 
(1)
  Treasury Inflation Protected Security (TIPS).

(2)
  Adjustable rate security. The rate shown is as of February 29, 2008.

See Notes to Financial Statements.


11



Value Line U.S. Government Securities Fund, Inc.

Statement of Assets and Liabilities
at February 29, 2008 (unaudited)

Assets:
                      
Investment securities, at value
(Cost — $80,795,603)
              $ 84,342,888   
Repurchase agreements
(Cost — $4,600,000)
                 4,600,000   
Cash
                 40,679   
Receivable for securities sold
                 903,263   
Interest receivable
                 666,391   
Receivable for capital shares sold
                 19,684   
Prepaid expenses
                 7,210   
Total Assets
                 90,580,115   
Liabilities:
                       
Payable for capital shares repurchased
                 99,977   
Accrued expenses:
                       
Advisory fee
                 35,626   
Directors’ fees and expenses
                 2,343   
Other
                 24,041   
Total Liabilities
                 161,987   
Net Assets
              $ 90,418,128   
Net assets consist of:
                       
Capital stock, at $1 par value
(authorized 100,000,000, outstanding 7,620,623 shares)
              $ 7,620,623   
Additional paid-in capital
                 81,702,425   
Undistributed net investment income
                 614,072   
Accumulated net realized loss on investments
                 (3,066,277 )  
Net unrealized appreciation of investments
                 3,547,285   
Net Assets
              $ 90,418,128   
Net Asset Value, Offering and Redemption Price per Outstanding Share ($90,418,128 ÷ 7,620,623
shares outstanding)
              $ 11.86   
 

Statement of Operations for the
Six Months Ended February 29, 2008 (unaudited)



Investment Income:
                      
Interest
              $ 2,149,668   
Expenses:
                       
Advisory fee
                 220,988   
Service and distribution plan fees
                 110,494   
Transfer agent fees
                 29,673   
Printing and postage
                 19,989   
Auditing and legal fees
                 18,147   
Custodian fees
                 17,739   
Registration and filing fees
                 11,952   
Directors’ fees and expenses
                 3,398   
Insurance
                 3,216   
Telephone
                 2,852   
Other
                 2,054   
Total Expenses Before Custody Credits and Fees Waived
                 440,502   
Less: Service and Distribution Plan
Fees Waived
                 (110,494 )  
Less: Custody Credits
                 (1,428 )  
Net Expenses
                 328,580   
Net Investment Income
                 1,821,088   
Net Realized and Unrealized Gain/(Loss) on Investments:
                       
Net Realized Gain
                 81,972   
Change in Net Unrealized Appreciation/(Depreciation)
                 3,562,691   
Net Realized Gain and Change
in Net Unrealized Appreciation/(Depreciation) on Investments
                 3,644,663   
Net Increase in Net Assets
From Operations
              $ 5,465,751   
 

See Notes to Financial Statements.


12



Value Line U.S. Government Securities Fund, Inc.

Statement of Changes in Net Assets
for the Six Months Ended February 29, 2008 (unaudited) and for the Year Ended August 31, 2007

        Six Months Ended
February 29, 2008
(unaudited)
  
Year Ended
August 31, 2007

Operations:
                                       
Net investment income
              $ 1,821,088          $ 3,932,844   
Net realized gain/(loss) on investments
                 81,972             (324,815 )  
Change in net unrealized appreciation/(depreciation)
                 3,562,691             704,073   
Net increase in net assets from operations
                 5,465,751             4,312,102   
Distributions to Shareholders:
                                       
Net investment income
                 (2,002,306 )            (3,962,359 )  
Capital Share Transactions:
                                       
Proceeds from sale of shares
                 2,648,943             2,701,583   
Proceeds from reinvestment of distributions to shareholders
                 1,722,428             3,390,260   
Cost of shares repurchased
                 (6,302,462 )            (14,761,153 )  
Decrease from capital share transactions
                 (1,931,091 )            (8,669,310 )  
Total Increase (Decrease) in Net Assets
                 1,532,354             (8,319,567 )  
Net Assets:
                                       
Beginning of period
                 88,885,774             97,205,341   
End of period
              $ 90,418,128          $ 88,885,774   
Undistributed net investment income, at end of period
              $ 614,072          $ 795,290   
 

See Notes to Financial Statements.


13



Value Line U.S. Government Securities Fund, Inc.

Notes to Financial Statements (unaudited)

1.  
  Significant Accounting Policies

Value Line U.S. Government Securities Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company whose primary investment objective is to obtain maximum income without undue risk to principal. Capital preservation and possible capital appreciation are secondary objectives.

The following significant accounting principles are in conformity with generally accepted accounting principles for investment companies. Such policies are consistently followed by the Fund in the preparation of its financial statements. Generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

(A)  Security Valuation: The Fund’s investments are carried at value. With assistance from an independent pricing service (the “Service”), portfolio securities are valued at the midpoint between the latest available and representative asked and bid prices on the basis of valuations provided by dealers in such securities. Some of the general factors which may be considered by the dealers in arriving at such valuations include the fundamental analytic data relating to the security and an evaluation of the forces which influence the market in which these securities are purchased and sold. Determination of values may involve subjective judgment, as the actual market value of a particular security can be established only by negotiation between the parties in a sales transaction. The values for other portfolio securities are determined on the valuation date by reference to valuations obtained from the Service which determines valuations for normal institutional-size trading units of debt securities, without exclusive reliance upon quoted prices. The Service takes into account appropriate factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data in determining valuations. Short-term instruments with maturities of 60 days or less at the date of purchase are valued at amortized cost, which approximates market value. Other assets and securities for which market valuations are not readily available will be valued at fair value by the Adviser pursuant to policies and procedures adopted by the Board of Directors.

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 Fund’s financial statement disclosures.

(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 and capital gains to its shareholders. Therefore, no federal income tax provision is required.


14



Value Line U.S. Government Securities Fund, Inc.

February 29, 2008

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 Fund, 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 February 29, 2008, management has reviewed the tax positions for the tax years still subject to tax audit under the statute of limitations, evaluated the implications of FIN 48, and does not currently anticipate a material impact to the Fund’s financial statements.

(D)  Security Transactions and Related Income: Security transactions are accounted for on the date the securities are purchased or sold. Realized gains and losses on securities transactions are determined using the identified cost method. Interest income, adjusted for amortization of discount and premium, is earned from settlement date and recognized on the accrual basis. Gains and losses realized on prepayments received on mortgage-related securities are recorded as interest income.

The Fund may invest in Treasury Inflation-Protection Securities (TIPS). The principal value and interest payout of TIPS are periodically adjusted according to the rate of inflation based on the Consumer Price Index. The adjustments for principal and income due to the inflation are reflected in interest income in the Statement of Operations.

(E)  Representations and Indemnifications: In the normal course of business, the Fund enters into contracts 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.  
  Investment Risks

Securities issued by U.S. Government agencies or government-sponsored enterprises may not be guaranteed by the U.S. Treasury. The Government National Mortgage Association (“GNMA” or “Ginnie Mae”), a wholly-owned U.S. Government corporation, is authorized to guarantee, with the full faith and credit of the U.S. Government, the timely payment of principal and interest on securities issued by institutions approved by GNMA and backed by pools of mortgages insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. Government-related guarantors (i.e., not backed by the full faith and credit of the U.S. Government) include the Federal National Mortgage Association (“FNMA” or “Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“FHLMC” or “Freddie Mac”). Pass-through securities issued by FNMA are guaranteed as to timely payment of principal and interest by FNMA but are not backed by the full faith and credit of the U.S. Government. FHLMC guarantees the timely payment of interest and ultimate collection of principal, but its participation certificates are not backed by the full faith and credit of the U.S. Government.


15



Value Line U.S. Government Securities Fund, Inc.

Notes to Financial Statements (unaudited)

3.  
  Capital Share Transactions and Dividends
to Shareholders

Transactions in capital stock were as follows:

        Six Months
Ended
February 29,
2008
(unaudited)
  
Year
Ended
August 31,
2007
Shares sold
                 228,144             237,939   
Shares issued in reinvestment of dividends
                 150,750             299,774   
Shares repurchased
                 (544,616 )            (1,299,287 )  
Net decrease
                 (165,722 )            (761,574 )  
Dividends per share from net investment income
              $ 0.2625          $ 0.4900   
 

Dividends and distributions to shareholders are recorded on the ex-dividend date.

4.  
  Purchases and Sales of Securities

Purchases and sales of investment securities, excluding short-term investments, were as follows:

        Six Months
Ended
February 29,
2008
(unaudited)
Purchases:
                       
U.S. Treasury Obligations
              $ 2,016,172   
U.S. Government Agency Obligations
                 4,126,147   
 
              $ 6,142,319   
Sales:
                       
U.S. Treasury Obligations
              $ 1,013,437   
U.S. Government Agency Obligations
                 6,611,982   
 
              $ 7,625,419   
 
5.  
  Income Taxes (unaudited)

At February 29, 2008, information on the tax basis of investments is as follows:

Cost of investments for tax purposes
              $ 85,395,603   
Gross tax unrealized appreciation
              $ 3,647,998   
Gross tax unrealized depreciation
                 (100,713 )  
Net tax unrealized appreciation
on investments
              $ 3,547,285   
Undistributed ordinary income
              $ 614,072   
Capital loss carryforward, expires August 31, 2008
              $ 2,132,091   
Capital loss carryforward, expires August 31, 2012
                 11,348   
Capital loss carryforward, expires August 31, 2014
                 39,865   
Capital loss carryforward, expires August 31, 2015
                 781,920   
Capital loss carryforward, at August 31, 2007
              $ 2,965,224   
 

During the year ended August 31, 2007, as permitted under federal income tax regulations, the Fund elected to defer $183,025 of post-October net capital losses to the next taxable year.

To the extent that current or future capital gains are offset by capital losses, the Fund does not anticipate distributing any such gains to shareholders.

6.  
  Investment Advisory Fees, Service and Distribution Fees and Transactions With Affiliates

An advisory fee of $220,988 was paid or payable to Value Line, Inc., the Fund’s investment adviser (“Adviser”), for the six months ended February 29, 2008. This was computed at the rate of 1/2 of 1% of the Fund’s average daily net assets during the year and was paid monthly.

The Adviser provides research, investment programs, and supervision of the investment portfolio and pays costs of


16



Value Line U.S. Government Securities Fund, Inc.

February 29, 2008


administrative services, office space, equipment and compensation of administrative, bookkeeping, and clerical personnel necessary for managing the affairs of the Fund. The Advisor 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. Direct expenses of the Fund are charged to the Fund while common expenses of the Value Line Funds, are allocated proportionately based upon the Funds’ respective net assets. 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. The Plan compensates Value Line Securities, Inc., a wholly-owned subsidiary of the Adviser (the “Distributor”), for advertising, marketing and distributing the Fund’s shares and for servicing the Fund’s shareholders at an annual rate of 0.25% of the Fund’s average daily net assets. Fees amounting to $110,494, before fee waivers, were accrued under this Plan for the six months ended February 29, 2008. Effective March 7, 2006, the Distributor voluntarily reduced the Fund’s 12b-1 Fee by 0.10% under the Plan. Effective February 20, 2007, the Distributor voluntarily reduced the Fund’s 12b-1 Fee by 0.15% under the Plan. The fees waived amounted to $110,494 for the six months ended February 29, 2008. The Distributor has no right to recoup previously waived amounts.

For the six months ended February 29, 2008 the Fund’s expenses were reduced by $4,238 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 at February 29, 2008 owned 51,207 shares of the Fund’s capital stock, representing less than 1% of the outstanding shares. In addition, certain officers and directors of the Fund owned 679 shares, representing less than 1% of the outstanding shares.


17



Value Line U.S. Government Securities Fund, Inc.

Financial Highlights

Selected data for a share of capital stock outstanding throughout each period:

        Six Months
Ended
February 29, 2008
    Years Ended August 31,
  
        (unaudited)
  
2007
  
2006
  
2005
  
2004
  
2003
Net Asset Value, beginning of period
              $ 11.42          $ 11.37          $ 11.74          $ 11.87          $ 11.84          $ 12.00   
Income (loss) from
Investment Operations:
                                                                                                      
Net investment income
                 0.24             0.51             0.47             0.52             0.41             0.44   
Net gains or (losses) on securities
(both realized and unrealized)
                 0.46             0.03             (0.32 )            (0.19 )            0.03             (0.15 )  
Total income from
investment operations
                 0.70             0.54             0.15             0.33             0.44             0.29   
Less dividends and distributions:
                                                                                                       
Dividends from net
investment income
                 (0.26 )            (0.49 )            (0.52 )            (0.46 )            (0.41 )            (0.45 )  
Net Asset Value, end of period
              $ 11.86          $ 11.42          $ 11.37          $ 11.74          $ 11.87          $ 11.84   
Total return
                 6.25 %(3)            4.86 %            1.33 %            2.86 %            3.79 %            2.35 %  
Ratios/Supplemental Data:
                                                                                                       
Net assets, end of period (in thousands)
              $ 90,418          $ 88,886          $ 97,205          $ 112,140          $ 121,444          $ 144,264   
Ratio of operating expenses to average
net assets(1)
                 1.00 %(2), (4)            0.93 %(2)            1.05 %(2)            1.04 %            0.98 %            0.96 %  
Ratio of net investment income
to average net assets
                 4.12 %(4)            4.28 %            3.88 %            3.60 %            3.40 %            3.57 %  
Portfolio turnover rate
                 7 %(3)            38 %            22 %            60 %            35 %            65 %  
 
(1)
  Ratio reflects expenses grossed up for custody credit arrangement. The ratio of expenses to average net assets, net of custody credits would have been 0.99% (annualized) for the six months ended February 29, 2008, 0.92% for the year ended August 31, 2007, 1.04% for the year ended August 31, 2006 and would not have changed for the years ended August 31, 2005, August 31, 2004 and August 31, 2003.

(2)
  Ratio reflects expenses grossed up for the voluntary fee waiver of a portion of the service fee and distribution plan fees by the Distributor. The ratio of expenses to average net assets net of the voluntary fee waiver, but exclusive of the custody credit arrangement would have been 0.75% (annualized) for the six months ended February 29, 2008, 0.75% for the year ended August 31, 2007 and 1.00% as of August 31, 2006.

(3)
  Not annualized.

(4)
  Annualized.

See Notes to Financial Statements.


18



Value Line U.S. Government Securities Fund, Inc.

    

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.


19



Value Line U.S. Government Securities 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.

Name, Address, and Age


  
Position
  
Length of
Time Served
  
Principal Occupation
During the Past 5 Years
  
Other
Directorships
Held by Director
Interested Director*
                                                                       
Jean Bernhard Buttner
Age 73
           
Chairman of the Board of Directors and President
   
Since 1983
   
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 Directors
                                                                       
John W. Chandler
416 North Hemlock Lane
Williamstown, MA 01267
Age 84
           
Director (Lead Independent Director since 2007)
   
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 66
           
Director
   
Since 2000
   
Retired; Customer Support Analyst, Duke Power Company until 2007.
   
None
Francis C. Oakley
54 Scott Hill Road
Williamstown, MA 01267
Age 76
           
Director
   
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 72
           
Director
   
Since 1997
   
Visiting Professor of Classics, Williams College, since 1999; President Emeritus, Skidmore College since 1999 and President, 1987–1998.
   
None


20



Value Line U.S. Government Securities Fund, Inc.

Management of the Fund

Name, Address, and Age


  
Position
  
Length of
Time Served
  
Principal Occupation
During the Past 5 Years
  
Other
Directorships
Held by Director
Paul Craig Roberts
169 Pompano St.
Panama City Beach, FL 32413
Age 68
           
Director
   
Since 1983
   
Chairman, Institute for Political Economy.
   
None
Nancy-Beth Sheerr
1409 Beaumont Drive
Gladwyne, PA 19035
Age 58
           
Director
   
Since 1996
   
Senior Financial Advisor, Veritable L.P. (investment adviser) since 2004; Senior Financial Advisor, Hawthorn, 2001–2004.
   
None
Officers
                                                                       
David T. Henigson
Age 50
           
Vice President, Secretary and
Chief Compliance Officer
   
Since 1994
   
Director, Vice President and Chief Compliance Officer of the Adviser. Director, Vice President and Chief Compliance Officer 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 since 2005.
   
 
Howard A. Brecher
Age 53
           
Assistant Treasurer/
Assistant Secretary
   
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 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.


21



Value Line U.S. Government Securities Fund, Inc.

    

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22



Value Line U.S. Government Securities Fund, Inc.

    

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23



Value Line U.S. Government Securities 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 — 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, 9 am – 5 pm 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.

 

By

/s/ Jean B. Buttner                                                                  

 

Jean B. Buttner, President

 

 

Date:

April 29, 2008                 

 

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:

April 29, 2008