N-CSR 1 d22592.htm VALUE LINE CENTURION FUND, INC.

 

 

 

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 _811-3835_

 

Value Line Centurion 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: December 31, 2007

 

Date of reporting period: December 31, 2007

 

Item I. Reports to Stockholders.

 

A copy of the Annual Report to Stockholders for the period ended 12/31/07 is included with this Form.

 

 

  Annual Report  
n  Value Line Centurion Fund, Inc.  To Contractowners



 
Kathy Bramlage,
Portfolio Manager

Objective:
Long-term growth of capital

Inception Date:
November 15, 1983

Net Assets at December 31, 2007:
$291,948,575

Portfolio Composition at December 31, 2007:
(Percentage of Total Net Assets)



 

An Update from Fund Management (Unaudited)

In 2007, the Fund returned 20.72% versus the total return of 5.49% for the S&P 500 Index. Since the Fund’s inception more than 24 years ago, the annual total return has been 10.40%.

Over the past year, the Fund’s quantitative-based model had strong performance during what turned out to be a fairly volatile year. An underweighted position in the financial sector, one of the worst performing areas for the year due to problems in the housing market from subprime mortgage loans, was one of the reasons for the Fund’s strong performance. In addition, the Fund was overweighted in semiconductor and technology sectors, which were strong performers for the year.

In selecting stocks, we rely on the Value Line Timeliness Ranking System, purchasing stocks that are ranked the highest for price appreciation over the next six to twelve months. The system favors stocks that have above-average earnings and stock-price momentum compared with those of the roughly 1,700 stocks in the Value Line Investment Survey. We generally buy stocks when their Timeliness ranking rises to the top category and sell them when their ranking drops out of it.

The views expressed above are those of the Fund’s portfolio manager(s) as of December 31, 2007 and are subject to change without notice. They do not necessarily represent the views of Value Line. The views expressed herein are based on current market conditions and are not intended to predict or guarantee the future performance of any Fund, any individual security, any market or market segment. The composition of the Fund’s portfolio is subject to change. No recommendation is made with any respect to any security discussed herein.

Top Ten Common Stock Holdings (As of 12/31/2007)

Company
  
 Percentage of
Total Net Assets
Potash Corporation of Saskatchewan, Inc.
                  1.13 %  
Agrium, Inc.
                  1.11 %  
Monsanto Co.
                  1.07 %  
McDermott International, Inc.
                  1.05 %  
ANSYS, Inc.
                  1.05 %  
Textron, Inc.
                  1.05 %  
Amazon.com, Inc.
                  1.05 %  
Robbins & Myers, Inc.
                  1.04 %  
Fresh Del Monte Produce, Inc.
                  1.04 %  
FTI Consulting, Inc.
                  1.03 %  

 

About information in this report:

•  
   It is important to consider the Fund’s investment objectives, risks, fees and expenses before investing. All funds involve some risk, including possible loss of the principal amount invested.

•  
   The S&P 500 Index is an unmanaged index of 500 primarily large cap U.S. stocks that is generally considered to be representative of U.S. stock market activity. Index returns are provided for comparative purposes. Please note that the index is unmanaged and not available for direct investment and its returns do not reflect the fees and expenses that have been deducted from the Fund.

VALUE LINE CENTURION FUND, INC.
1

 

  Annual Report  
n  Value Line Centurion Fund, Inc.  To Contractowners

Sector Weightings vs. Index (As of 12/31/2007) (Unaudited)

 

Average Annual Total Returns (For periods ended 12/31/2007)
  
 1
Yr
   
 3
Yrs
   
 5
Yrs
   
 10
Yrs
   
 Since Inception
11/15/1983
   
   
   
Value Line Centurion Fund, Inc.
                  20.72 %            11.01 %            12.76 %            5.33 %            10.40 %                              
S&P 500 Index
                  5.49 %            8.62 %            12.83 %            5.91 %            12.23 %                  

All performance data quoted is historical and the results represent past performance and neither guarantee nor predict future investment results. To obtain performance data current to the most recent month (available within 7 business days of the most recent month end), please call us at (800) 221-3253 or visit our website at www.guardianinvestor.com. Current performance may be higher or lower than the performance quoted here. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost.

Total return figures are historical and assume the reinvestment of dividends and distributions and the deduction of all Fund expenses. The actual total returns for owners of variable annuity contracts or variable life insurance policies that provide for investment in the Fund will be lower to reflect separate account and contract/policy charges. The return figures shown do not reflect the deduction of taxes that a contractowner may pay on distributions or redemption of units.

Growth of a Hypothetical $10,000 Investment

To give you a comparison, this chart shows you the performance of a hypothetical $10,000 investment made 10 years ago in the Fund and in the S&P 500 Index. Index returns do not include the fees and expenses of the Fund, but do include the reinvestment of dividends.


 

2
VALUE LINE CENTURION FUND, INC.

 

  Annual Report  
n  Value Line Centurion Fund, Inc.  To Contractowners

Fund Expenses (Unaudited)

By investing in the Fund, you incur two types of costs: (1) transaction costs, including, as applicable, sales charges on purchase payments, reinvested dividends, or other distributions; redemption fees and exchange fees; and (2) ongoing costs, including, as applicable, management fees; distribution and/or 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 examples are based on an investment of $1,000 invested on July 1, 2007 and held for six months ended December 31, 2007.

Actual Expenses

The first line in the table 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 entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line in the table 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
July 1, 2007
   
 Ending
Account Value
December 31, 2007
   
 Expenses
Paid During
Period*
   
 Annualized
Expense Ratio
Actual
               $ 1,000          $ 1,083.71          $ 4.15             0.79 %  
Hypothetical (5% return before expenses)
               $ 1,000          $ 1,021.22          $ 4.02             0.79 %  

* 
   Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the Fund’s most recent fiscal half-year). This expense ratio may differ from the expense ratio shown in the financial highlights.

VALUE LINE CENTURION FUND, INC.
3

 

     
n  Value Line Centurion Fund, Inc.   

Schedule of Investments

December 31, 2007

Common Stocks — 96.8%

  
Shares
  
  
                   Value
Aerospace/Defense — 1.9%
            
441,000            
Bombardier, Inc. Class B *
       $ 2,646,888   
21,000            
Precision Castparts Corp.
          2,912,700   
             
 
          5,559,588   
Auto Parts — 0.9%
            
125,000            
LKQ Corp. *
          2,627,500   
Beverage–Soft Drink — 2.0%
            
48,000            
Coca-Cola Co. (The)
          2,945,760   
90,000            
PepsiAmericas, Inc.
          2,998,800   
             
 
          5,944,560   
Biotechnology — 0.9%
            
29,000            
Invitrogen Corp. *
          2,708,890   
Building Materials — 2.8%
            
46,000            
Dynamic Materials Corp.
          2,709,400   
18,000            
Fluor Corp.
          2,622,960   
29,000            
Jacobs Engineering Group, Inc. *
          2,772,690   
             
 
          8,105,050   
Chemical–Basic — 2.3%
            
45,000            
Agrium, Inc.
          3,249,450   
23,000            
Potash Corporation of Saskatchewan, Inc.
          3,311,080   
             
 
          6,560,530   
Chemical–Diversified — 1.1%
            
28,000            
Monsanto Co.
          3,127,320   
Chemical–Specialty — 1.0%
            
31,000            
Mosaic Co. (The) *
          2,924,540   
Computer & Peripherals — 4.7%
            
15,000            
Apple, Inc. *
          2,971,200   
147,000            
EMC Corp. *
          2,723,910   
115,000            
Seagate Technology
          2,932,500   
43,000            
Sigma Designs, Inc. *
          2,373,600   
87,000            
Western Digital Corp. *
          2,628,270   
             
 
          13,629,480   
Computer Software & Services — 5.8%
            
74,000            
ANSYS, Inc. *
          3,068,040   
75,000            
BMC Software, Inc. *
          2,673,000   
106,000            
CA, Inc.
          2,644,700   
104,000            
Jack Henry & Associates, Inc.
          2,531,360   
81,000            
Microsoft Corp.
          2,883,600   
132,000            
Oracle Corp. *
          2,980,560   
             
 
          16,781,260   
Diversified Companies — 3.1%
            
52,000            
McDermott International, Inc. *
          3,069,560   
43,000            
Textron, Inc.
          3,065,900   
32,000            
Valmont Industries, Inc.
          2,851,840   
             
 
          8,987,300   
Drug — 6.7%
            
31,000            
Covance, Inc. *
          2,685,220   
67,000            
LifeCell Corp. *
          2,888,370   
47,000            
Merck & Co., Inc.
          2,731,170   
46,000            
Novo Nordisk A/S ADR
          2,983,560   
47,000            
Onyx Pharmaceuticals, Inc. *
          2,614,140   
60,000            
OSI Pharmaceuticals, Inc. *
          2,910,600   
81,000            
Perrigo Co.
          2,835,810   
             
 
          19,648,870   
Educational Services — 3.6%
            
36,000            
Apollo Group, Inc. Class A *
       $ 2,525,400   
53,000            
DeVry, Inc.
          2,753,880   
120,000            
Learning Tree International, Inc. *
          2,755,200   
15,000            
Strayer Education, Inc.
          2,558,700   
             
 
          10,593,180   
Electrical Equipment — 1.8%
            
88,000            
FLIR Systems, Inc. *
          2,754,400   
26,000            
Garmin Ltd.
          2,522,000   
             
 
          5,276,400   
Electronics — 1.9%
            
77,000            
Cubic Corp.
          3,018,400   
30,000            
MEMC Electronic Materials, Inc. *
          2,654,700   
             
 
          5,673,100   
Entertainment Technology — 2.0%
            
60,000            
Dolby Laboratories, Inc. Class A *
          2,983,200   
127,000            
Zoran Corp. *
          2,858,770   
             
 
          5,841,970   
Environmental — 1.0%
            
48,000            
Stericycle, Inc. *
          2,851,200   
Financial Services–Diversified — 2.0%
            
88,000            
Janus Capital Group, Inc.
          2,890,800   
59,000            
Nasdaq Stock Market, Inc. *
          2,919,910   
             
 
          5,810,710   
Food Processing — 1.0%
            
90,000            
Fresh Del Monte Produce, Inc. *
          3,022,200   
Health Care Information Systems — 1.0%
            
117,000            
Eclipsys Corp. *
          2,961,270   
Industrial Services — 1.0%
            
49,000            
FTI Consulting, Inc. *
          3,020,360   
Information Services — 0.9%
            
43,000            
IHS, Inc. Class A *
          2,604,080   
Insurance–Life — 1.0%
            
46,000            
AFLAC, Inc.
          2,880,980   
Internet — 5.0%
            
33,000            
Amazon.com, Inc. *
          3,057,120   
85,000            
eBay, Inc. *
          2,821,150   
106,700            
Global Sources Ltd. *
          3,011,074   
4,000            
Google, Inc. Class A *
          2,765,920   
25,000            
Priceline.com, Inc. *
          2,871,500   
             
 
          14,526,764   
Machinery — 7.9%
            
41,000            
AGCO Corp. *
          2,787,180   
30,000            
Bucyrus International, Inc. Class A
          2,981,700   
44,000            
CNH Global N.V.
          2,896,080   
32,000            
Deere & Co.
          2,979,840   
29,000            
Flowserve Corp.
          2,789,800   
38,000            
Lindsay Corp.
          2,686,220   
61,000            
Manitowoc Company, Inc. (The)
          2,978,630   
40,000            
Robbins & Myers, Inc.
          3,025,200   
             
 
          23,124,650   
Medical Services — 0.9%
            
31,000            
WellPoint, Inc. *
          2,719,630   

4
See notes to financial statements.
     
n  Value Line Centurion Fund, Inc.   

Schedule of Investments (Continued)

December 31, 2007

  
Shares
  
  
                   Value
Medical Supplies — 4.7%
            
55,000            
ArthroCare Corp. *
       $ 2,642,750   
42,000            
Charles River Laboratories
International, Inc. *
          2,763,600   
46,000            
IDEXX Laboratories, Inc. *
          2,696,980   
9,000            
Intuitive Surgical, Inc. *
          2,920,500   
51,000            
Kinetic Concepts, Inc. *
          2,731,560   
             
 
          13,755,390   
Metals & Mining Diversified — 2.9%
            
83,000            
AMCOL International Corp.
          2,990,490   
37,000            
BHP Billiton Ltd. ADR
          2,591,480   
27,000            
Southern Copper Corp.
          2,838,510   
             
 
          8,420,480   
Natural Gas–Diversified — 2.0%
            
50,000            
Southwestern Energy Co. *
          2,786,000   
83,000            
Williams Companies, Inc. (The)
          2,969,740   
             
 
          5,755,740   
Oilfield Services/Equipment — 2.9%
            
62,000            
Cameron International Corp. *
          2,984,060   
22,000            
Core Laboratories N.V. *
          2,743,840   
39,000            
National-Oilwell Varco, Inc. *
          2,864,940   
             
 
          8,592,840   
Packaging & Container — 1.9%
            
61,000            
Owens-Illinois, Inc. *
          3,019,500   
93,000            
Packaging Corp. of America
          2,622,600   
             
 
          5,642,100   
Paper & Forest Products — 0.8%
            
155,000            
Glatfelter
          2,373,050   
Pharmacy Services — 1.0%
            
41,000            
Express Scripts, Inc. *
          2,993,000   
Power — 1.0%
            
22,000            
SunPower Corp. Class A *
          2,868,580   
Precision Instrument — 2.8%
            
68,000            
Axsys Technologies, Inc. *
          2,492,200   
85,000            
National Instruments Corp.
          2,833,050   
35,000            
Waters Corp. *
          2,767,450   
             
 
          8,092,700   
Retail–Automotive — 1.0%
            
66,000            
Copart, Inc. *
          2,808,300   
Retail–Special Lines — 2.8%
            
51,000            
Best Buy Co., Inc.
          2,685,150   
65,000            
Fossil, Inc. *
          2,728,700   
45,000            
GameStop Corp. Class A *
          2,794,950   
             
 
          8,208,800   
Securities Brokerage — 1.0%
            
117,000            
Charles Schwab Corp. (The)
          2,989,350   
Semiconductor — 3.0%
            
80,000            
Cypress Semiconductor Corp. *
          2,882,400   
87,500            
NVIDIA Corp. *
          2,976,750   
85,000            
Texas Instruments, Inc.
          2,839,000   
             
 
          8,698,150   
Shoe — 1.0%
            
18,000            
Deckers Outdoor Corp. *
          2,791,080   
Telecommunication Services — 1.0%
            
30,000            
Telefonica S.A. ADR
          2,927,700   
Telecommunications Equipment — 1.9%
            
162,000            
Foundry Networks, Inc. *
       $ 2,838,240   
70,000            
Nokia Oyj ADR
          2,687,300   
             
 
          5,525,540   
Wireless Networking — 0.9%
            
24,000            
Research In Motion Ltd. *
          2,721,600   
             
Total Common Stocks And Total Investment Securities — 96.8%
(Cost $244,431,588)
       $ 282,675,782   
 
 
Principal
Amount
  
  
                                    Value
Repurchase Agreements — 3.1%
$9,100,000            
With Morgan Stanley, 0.95%, dated 12/31/07, due 1/2/08, delivery value $9,100,480 (collateralized by $6,515,000 U.S. Treasury Notes 9.125%, due 5/15/18, with a value of $9,291,817)
       $ 9,100,000   
             
Total Repurchase Agreements
(Cost $9,100,000)
          9,100,000   
Cash And Other Assets In Excess
Of Liabilities — (0.1%)
      172,793   
Net Assets — 100.0%
   $ 291,948,575   
Net Asset Value Per Outstanding Share
($291,948,575 ÷ 13,670,817 shares outstanding)
   $ 21.36   
 
*
   Non-income producing.
ADR
   American Depositary Receipt

See notes to financial statements.
5

n  Value Line Centurion Fund, Inc.

Statement of Assets and Liabilities
December 31, 2007

ASSETS:
                        
Investment securities, at value
(cost — $244,431,588)
               $ 282,675,782   
Repurchase agreements
(cost — $9,100,000)
                  9,100,000   
Cash
                  31,114   
Receivable for securities sold
                  8,315,176   
Interest and dividends receivable
                  160,369   
Receivable for capital shares sold
                  39,240   
Total Assets
                  300,321,681   
LIABILITIES:
                        
Payable for securities purchased
                  7,935,651   
Payable for capital shares repurchased
                  235,809   
Accrued expenses:
                        
Advisory fee
                  124,999   
Service and distribution plan fees
                  62,507   
Directors’ fees and expenses
                  5,035   
Other
                  9,105   
Total Liabilities
                  8,373,106   
Net Assets
               $ 291,948,575   
NET ASSETS CONSIST OF:
                        
Capital stock, at $1.00 par value
                        
(authorized 50,000,000, outstanding
                        
13,670,817 shares)
               $ 13,670,817   
Additional paid-in capital
                  195,794,775   
Accumulated net realized gain on investments
                  44,238,789   
Net unrealized appreciation of investments
                  38,244,194   
Net Assets
               $ 291,948,575   
Net Asset Value Per Outstanding Share
                        
($291,948,575 ÷ 13,670,817 shares outstanding)
               $ 21.36   
 

Statement of Operations

For the Year Ended
December 31, 2007

INVESTMENT INCOME:
                        
Dividends(net of foreign withholding tax of $25,947)
               $ 1,642,688   
Interest
                  364,221   
Total Income
                  2,006,909   
Expenses:
                        
Advisory fee
                  1,441,520   
Service and distribution plan fees
                  1,153,216   
Auditing and legal fees
                  81,225   
Custodian fees
                  50,291   
Directors’ fees and expenses
                  21,699   
Printing
                  2,600   
Other
                  4,401   
Total Expenses Before Custody Credits
and Waivers
                  2,754,952   
Less: Service and Distribution Plan Fees Waived
                  (486,071 )  
Less: Custody Credits
                  (4,590 )  
Net Expenses
                  2,264,291   
Net Investment Loss
                  (257,382 )  
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND FOREIGN EXCHANGE TRANSACTIONS:
                        
Net realized gain
                  44,471,759   
Change in net unrealized appreciation/(depreciation)
                  9,887,849   
Net Realized Gain and Change in Net Unrealized Appreciation/(Depreciation) on Investments and Foreign Exchange Transactions
                  54,359,608   
NET INCREASE IN NET ASSETS FROM OPERATIONS
               $ 54,102,226   

6
See notes to financial statements.

n  Value Line Centurion Fund, Inc.

Statement of Changes in Net Assets

        Years Ended December 31,
    
        2007
     2006
Operations:
                                        
Net investment loss
               $ (257,382 )         $ (742,963 )  
Net realized gain on investments
                  44,471,759             21,464,140   
Change in net unrealized appreciation/(depreciation)
                  9,887,849             (9,100,122 )  
Net increase in net assets from operations
                  54,102,226             11,621,055   
Distributions to Shareholders:
                                        
Net realized gains
                  (19,936,538 )            (25,263,799 )  
Capital Share Transactions:
                                        
Proceeds from sale of shares
                  10,351,433             7,978,268   
Proceeds from reinvestment of dividends and distributions to shareholders
                  19,936,538             25,263,799   
Cost of shares repurchased
                  (56,341,129 )            (61,580,675 )  
Net decrease from capital share transactions
                  (26,053,158 )            (28,338,608 )  
Total Increase/(Decrease) in Net Assets
                  8,112,530             (41,981,352 )  
 
NET ASSETS:
                                        
Beginning of year
                  283,836,045             325,817,397   
End of year
               $ 291,948,575          $ 283,836,045   

See notes to financial statements.
7

n  Value Line Centurion Fund, Inc.

Financial Highlights

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

        Years Ended December 31,
    
  
 2007
   
 2006
   
 2005
   
 2004
   
 2003
Net asset value, beginning of year
               $ 18.96          $ 20.07          $ 20.24          $ 18.15          $ 15.19   
Income from investment operations:
                                                                                        
Net investment loss
                  (0.02 )            (0.05 )            (0.08 )            (0.05 )            (0.03 )  
Net gain/(loss) on securities (both realized and unrealized)
                  3.89             0.63             1.88             2.14             2.99   
Total from investment operations
                  3.87             0.58             1.80             2.09             2.96   
Less distributions:
                                                                                        
Distributions from net realized gains
                  (1.47 )            (1.69 )            (1.97 )            —              —    
Net asset value, end of year
               $ 21.36          $ 18.96          $ 20.07          $ 20.24          $ 18.15   
Total return*
                  20.72 %            3.85 %            9.13 %            11.51 %            19.49 %  
Ratios/supplemental data:
                                                                                        
Net assets, end of year (in thousands)
               $ 291,949          $ 283,836          $ 325,817          $ 350,409          $ 355,435   
Ratio of expenses to average net assets (1)
                  0.96 %            0.98 %            0.96 %            0.95 %            0.99 %  
Ratio of expenses to average net assets (2)
                  0.79 %            0.89 %            0.96 %            0.95 %            0.99 %  
Ratio of net investment loss to average net assets
                  (0.09 )%            (0.24 )%            (0.39 )%            (0.27 )%            (0.19 )%  
Portfolio turnover rate
                  200 %            220 %            219 %            187 %            129 %  

 *     
   Total returns do not reflect the effects of charges deducted under the terms of GIAC’s variable contracts. Including such charges would reduce the total returns for all years shown.
(1)    
   Ratio reflects expenses grossed up for custody credit arrangement and grossed up for the waiver of 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 service and distribution plan fees by the Distributor, would have been 0.95% for the year ended December 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 service and distribution plan fees by the Distributor and net of the custody credit arrangement.


8
See notes to financial statements.

n  Value Line Centurion Fund, Inc.

Notes to Financial Statements

December 31, 2007

1.    Significant Accounting Policies

Value Line Centurion Fund, Inc. (the “Fund”) is an open-end diversified management investment company registered under the Investment Company Act of 1940, as amended, whose primary investment objective is long-term growth of capital. The Fund’s portfolio will usually consist of common stocks ranked 1 or 2 for year-ahead performance by the Value Line Investment Survey, one of the nation’s major investment advisory services.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.

(A) Security Valuation

Securities listed on a securities exchange are valued at the closing sales prices on the date as of which the net asset value is being determined. Securities traded on the NASDAQ Stock market are valued at the NASDAQ Official Closing Price. In the absence of closing sales prices for such securities and for securities traded in the over-the-counter market, the security is valued at the midpoint between the latest available and representative asked and bid prices. Short-term instruments with maturities of 60 days or less at the date of purchase are valued at amortized cost which approximates market value. Short-term instruments with maturities greater than 60 days at the date of purchase, are valued at the midpoint between the latest available and representative asked and bid prices, and commencing 60 days prior to maturity such securities are valued at amortized cost. Securities for which market quotations are not readily available or that are not readily marketable and all other assets of the Fund are valued at fair value as the Board of Directors may determine in good faith. In addition, the Fund may use the fair value of a security when the closing market price on the primary exchange where the security is traded no longer accurately reflects the value of a security due to factors affecting one or more relevant securities markets or the specific issuer.

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 and to distribute all of its taxable income to its shareholders. Therefore, no provision for federal income tax 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” or “FIN 48”). 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 December 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 Fund’s financial statements at this time.

(D) Dividends and Distributions

It is the Fund’s policy to distribute to its shareholders, as dividends and as capital gains distributions, all the net investment income for the year and all the net capital gains realized

9


n  Value Line Centurion Fund, Inc.

Notes to Financial Statements (Continued)

December 31, 2007


by the Fund, if any. Such distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. All dividends or distributions will be payable in shares of the Fund at the net asset value on the ex-dividend date. This policy is, however, subject to change at any time by the Board of Directors.

(E) Securities Transactions and Income

Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Interest income on investments, adjusted for amortization of discount and premium, if applicable, is earned from settlement date and recognized on the accrual basis. Dividend income is recorded on the ex-dividend date.

(F) Foreign Currency Translation

The books and records of the Fund 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 on the valuation date. The Fund 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 Fund, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, other than investments, at the end of the fiscal period, resulting from changes in the exchange rates. The effect of the change in foreign exchange rates on the value of investments is included in realized gain/ (loss) on investments and changes in unrealized appreciation/(depreciation) on investments.

(G) 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.

(H) Foreign Taxes

The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.

2.    
   Capital Share Transactions, Dividends and Distributions

Shares of the Fund are available to the public only through the purchase of certain contracts issued by The Guardian Insurance and Annuity Company, Inc. (GIAC). Transactions in capital stock were as follows:

        Year Ended
December 31, 2007
     Year Ended
December 31, 2006
Shares sold
                  507,061             392,891   
Shares issued in reinvestment of dividends and distributions
                  971,566             1,482,617   
Shares repurchased
                  (2,781,422 )            (3,135,375 )  
Net decrease
                  (1,302,795 )            (1,259,867 )  
Distributions per share from net realized gains
               $ 1.47          $ 1.69   
 

3.    Purchases and Sales of Securities

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

        Year Ended
December 31, 2007
PURCHASES:
                       
Investment Securities
               $ 559,875,423   
SALES:
                        
Investment Securities
               $ 607,414,412   
 

10


n  Value Line Centurion Fund, Inc.

Notes to Financial Statements (Continued)

December 31, 2007

4.    Income Taxes

At December 31, 2007, information on the tax components of capital is as follows:

Cost of investments for tax purposes
               $ 253,534,763   
Gross tax unrealized appreciation
               $ 41,773,737   
Gross tax unrealized depreciation
                  (3,532,718 )  
Net tax unrealized appreciation on investments
               $ 38,241,019   
Undistributed ordinary income
               $ 33,768,915   
Undistributed long-term gains
               $ 10,473,049   
 

The differences between book and tax basis unrealized appreciation/(depreciation) on investments is primarily attributed to wash sale loss deferrals.

The tax composition of distributions to shareholders for the year ended December 31, 2007 and December 31, 2006 were as follows:

        2007
     2006
Ordinary income
               $ 1,921,030          $ 8,593,152   
Long-term capital gain
                  18,015,508             16,670,647   
 
               $ 19,936,538          $ 25,263,799   
 

Permanent book-tax differences relating to the current year were reclassified within the composition of the net asset accounts. The Fund decreased accumulated net investment loss on investments by $257,382 and decreased accumulated net realized gain on investments by $257,382. Net assets are not affected by this reclassification. These reclasses were primarily due to differing treatments of net operating losses for tax purposes.

5.    
   Investment Advisory Fee, Service and Distribution Fees and Transactions with Affiliates

An advisory fee of $1,441,520 was paid or payable to Value Line, Inc. (the “Adviser”), the Fund’s investment adviser, for the year ended December 31, 2007. This was computed at the rate of 1/2 of 1% of the average daily net assets of the Fund during the period and paid monthly. The Adviser provides research, investment programs, supervision of the investment portfolio and pays costs of administrative services, office space, equipment and compensation of administrative, bookkeeping, and clerical personnel necessary for managing the affairs of the Fund. The Adviser also provides persons, satisfactory to the Fund’s Board of Directors, to act as officers and employees of the Fund and pays their salaries and wages. 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, for the payment of certain expenses incurred by Value Line Securities, Inc. (the “Distributor”), a wholly-owned subsidiary of the Adviser, in advertising marketing and distributing the Fund’s shares and for servicing the Fund’s shareholders at an annual rate of 0.40% of the Fund’s average daily net assets. For the year ended December 31, 2007, fees amounting to $1,153,216, before fee waivers, were accrued under the Plan. Effective May 23, 2006 the Distributor voluntarily waived 0.15% of the 12b-1 fee. Effective May 1, 2007, the Distributor contractually agreed to continue to waive 0.15% of the Fund’s 12b-1 fee for a one year period. The fees waived amounted to $486,071. The Distributor has no right to recoup previously waived amounts.

For the year ended December 31, 2007, the Fund’s expenses were reduced by $4,590 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.

11


n  Value Line Centurion Fund, Inc.

Report of Independent Registered
Public Accounting Firm

To the Board of Directors and Shareholders of
Value Line Centurion Fund, Inc.

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Value Line Centurion Fund, Inc. (the “Fund”) at December 31, 2007, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
February 15, 2008

12


n  Value Line Centurion Fund, Inc.

Federal Tax Status of Distributions (Unaudited)

For corporate taxpayers 50.79% of the ordinary income distributions paid during the calendar year 2007, qualify for the corporate dividends received deductions. During the calendar year 2007, 54.44% of the ordinary income distribution are treated as qualified dividends. During the calendar year 2007, the Fund distributed $18,015,508 of long-term capital gain to its shareholders.

13


n  Value Line Centurion Fund, Inc.

Form N-Q

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.

Proxy Voting

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.

14


n  Value Line Centurion Fund, Inc.

Management Information

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
116 North Hemlock Lane
Williamstown, MA 01267
Age 84
            
Director
(Lead Independent
Director
Since 2007)
    
Since 1991
    
Consultant, Academic Search Consultation Service, Inc. (1994-2004); 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 April 2007.
    
None
   
Francis 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. Professor 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
   
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 Advisor) Since 2004; Senior Financial Advisor, Hawthorn, (2001-2004).
    
None

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 1-800-221-3532.

*  
   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.

15


n  Value Line Centurion Fund, Inc.

Management Information (Continued)

Name, Address, and Age
  
 Position
   
 Length of
Time Served
   
 Principal Occupation
During the Past 5 Years
   
   
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 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
    
Corporate 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.
                

16

 

Item 2. Code of Ethics

 

(a) The Registrant has adopted a Code of Ethics that applies to its principal executive officer, and principal financial officer and principal accounting officer.

 

(f) Pursuant to item 12(a), the Registrant is attaching as an exhibit a copy of its Code of Ethics that applies to its principal executive officer, and principal financial officer and principal accounting officer.

 

Item 3. Audit Committee Financial Expert.

 

(a)(1)The Registrant has an Audit Committee Financial Expert serving on its Audit Committee.

(2) The Registrant’s Board has designated John W. Chandler, a member of the Registrant’s Audit Committee, as the Registrant’s Audit Committee Financial Expert. Mr. Chandler is an independent director who is a senior consultant with Academic Search Consultation Service. He spent most of his professional career at Williams College, where he served as a faculty member, Dean of the Faculty, and President (1973-85). He

 

 

also served as President of Hamilton College (1968-73), and as President of the Association of American Colleges and Universities (1985-90). He has also previously served as Trustee Emeritus and Chairman of the Board of Trustees of Duke University.

 

A person who is designated as an “audit committee financial expert” shall not make such person an "expert" for any purpose, including without limitation under Section 11 of the Securities Act of 1933 or under applicable fiduciary laws, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification.

 

Item 4. Principal Accountant Fees and Services

 

 

(a) Audit Fees 2007 - $53,877

 

 

(b) Audit-Related fees – None.

 

 

(c) Tax Preparation Fees 2007 -$3,507

 

 

(d) All Other Fees – None

 

  (e) (1) Audit Committee Pre-Approval Policy. All services to be performed for the Registrant by PricewaterhouseCoopers LLP must be pre-approved by the audit committee. All services performed were pre-approved by the committee.

 

 

(e) (2) Not applicable.

 

 

(f) Not applicable.

 

 

(g) Aggregate Non-Audit Fees 2007 -$3,507

 

 

(h) Not applicable.

 

 

Item 11. Controls and Procedures.

 

 

(a) 

The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in rule 30a-2(c) under the Act (17 CFR 270.30a-2(c) ) based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report, are appropriately designed to ensure that material information relating to the registrant is made known to such officers and are operating effectively.

 

 

 

(b) 

The registrant’s principal executive officer and principal financial officer have determined that there have been no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including corrective actions with regard to significant deficiencies and material weaknesses.

 

Item 12. Exhibits.

 

 

(a) 

Code of Business Conduct and Ethics for Principal Executive and Senior Financial Officers attached hereto as Exhibit 100.COE

 

 

(b) 

(1) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2) attached hereto as Exhibit 99.CERT.

 

 

 

(2) 

Certification persuant 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

Jean B. Buttner                                        

 

Jean B. Buttner, President

 

 

Date:           February 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:

Jean B. Buttner                                                                                 

 

Jean B. Buttner, President, Principal Executive Officer

 

 

By:

 Stephen R. Anastasio                                                                          

 

Stephen R. Anastasio, Treasurer, Principal Financial Officer

 

 

Date:           February 29, 2008