N-CSR24.SUB
FORM N-CSR/A
CERTIFIED SHAREHOLDERS REPORT OF REGISTERED MANAGEMENT INESTMENT COMPANIES
Investment Company Act file number 811-2287
Exact name of registrant as specified in charter Valley Forge Fund, Inc.
Address of principal executive offices 1375 Anthony Wayne Dr
Wayne PA 19087
Name and address of agent for service Bernard B. Klawans
1375 Anthony Wayne Dr
Wayne PA 19087
Registrants telephone number, including area code 610-688-6839
Date of fiscal year end: 12/31/04
Date of reporting period: 01/01/04 to 12/31/04
The registrant is filing this amendment to its Certified Shareholder Report
on Form N-CSR filed with the Securities and Exchange Commission on November
12, 2007 in order to restate certain financial disclosure information about
The Valley Forge Fund, Inc. ("the Fund"). Additional information about
such restatement is contained in Note 6 to the financial statements of the
Fund.
Item 1. Report to Shareholders.
Valley Forge Fund
1375 Anthony Wayne Dr.
Wayne PA 19087
December 31, 2004
Dear Shareholder:
Your Fund started 2004 at $8.89 per share. Results show that our net asset
value per share advanced to $9.24 after paying a $0.13 dividend. This
represents an increase in value of 5.4% this year as compared to the Dow Jones
Industrial Average that has advanced 3.1%.
The Fund spent another $500,000 in the October November period to bring security
holdings to 84 percent of its portfolio. It is expected that the market has
somewhat further to go over the next two or three months. Our holdings will
then be reduced and the cash will be held for future disciplined purchases as
opportunities occur.
Financial figures for the year ended December 31, 2004 are attached.
Respectfully submitted,
Bernard B. Klawans
President
2004 PERFORMANCE DISCUSSION
The Fund increased 5.4% in value in 2004 compared to the Dow Jones Industrial
Average increase of 3.1%. Our communication securities including ADC
Telecommunications, AT&T Corp. and Comcast Corp. about broke even. The same
was true with regard to our basic material securities including Aleris
International, Barrick Gold and Coeur D' Alene Mines. Our consumer stocks
increased nicely,including Federal Agric Mtg Corp., Home Depot, McDonald's
Corp., Pep Boys - Manny,Moe & Jack, Supervalue and Time Warner. Our
industrials also performed well including Alexander & Baldwin, Duke Energy,
Hercules Inc. and General Electric. Our manufacturing stocks including Abitibi
Consolidated, Fedders Inc., General Motors and Newell Rubbermaid about broke
even. Technology stocks including Arrow Electronics, Cisco Systems and EMC
Corp. ended up about even.
- 1 -
VALLEY FORGE FUND
EXPENSES - DECEMBER 31, 2004
As a shareholder of the Fund, you incur two types of costs: direct ones, such as
wire and low balance fees; and indirect (ongoing) costs that include manage-
ment fees and other operating expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in this Fund as compared
to the ongoing costs of investing in any other mutual fund.
Actual Expenses: The first line of the following table provides actual values
and expenses for a $1,000 account over the period July 1 to December 31, 2004.
Simply divide your account value on July 1, 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 calculate the
expenses you actually paid on your account over the past six months.
Hypothetical Example for Comparison Purposes: The second line of the table pro-
vides hypothetical account values & expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses. These hypo-
thetical value and expenses may not be used for anything but comparison of on-
going costs of investing in this Fund with an assumed rate of return of 5% hy-
pothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any direct costs, such as wire or low bal-
ance fees. Therefore, the second line of the table is useful in paring ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. In addition, if these direct costs were included, your cost
would be higher.
Beginning Account Ending Account Expenses Paid
Value Value During Period *
July 1, 2004 December 31, 2004 July 1, 2004
December 31, 2004
Actual $1,000.00 $1,069.35 $6.33
Hypothetical ** 1,000.00 1,019.90 6.29
* Expenses are equal to the Fund's annualized expense ratio of 1.22% multiplied
by the average account value over the period, multiplied by 184/366 (to reflect
the one half year period).
** With a 5% return before expenses
TOP TEN HOLDINGS AND ASSET ALLOCATION
Top Ten Holdings, % of Net Assets Asset Allocation, % of Net Assets
Comcast Corp. New Class A 6.61 Basic Materials 6.01
General Motors 5.97 Communications 11.18
Supervalu Inc. 5.14 Consumer Orientated 24.42
Newell Rubbermaid Inc. 4.80 Industrials 14.77
Cisco Systems 4.80 Manufacturing 16.34
McDonalds Corp. 4.78 Technology 11.64
EMC Corporation 4.43 Cash & Cash Equivalents 14.90
Hercules Incorporated 4.42 Other Assets Net of Liabilities 0.74
The Home Depot Incorporated 4.24 _______
Alexander & Baldwin Inc. 4.21 100.00%
______ =======
49.40%
======
- 2 -
VALLEY FORGE FUND
SCHEDULE OF INVESTMENTS - DECEMBER 31, 2004
COMMON STOCKS: 84.36% Shares Value
Basic Materials 6.01%
Aleris International Inc. * 21,300 $ 360,396
Barrick Gold Corp (Canadian) 8,000 193,760
Coeur D'Alene Mines Corporation * 13,000 51,220
___________
605,376
Communications 11.18%
ADC Telecommunications * 100,000 269,000
AT&T Corp. 10,000 190,600
Comcast Corp. New Class A * 20,000 665,600
___________
1,125,200
Consumers 24.42%
Federal Agic Mtg Corp. Class C Non Voting 13,000 302,900
The Home Depot Incorporated, Inc. 10,000 427,400
McDonalds Corp. 15,000 480,900
Pep Boys - Manny, Moe & Jack 20,000 341,400
Supervalu Inc. 15,000 517,800
Time Warner Inc. * 20,000 389,000
___________
2,459,400
Industrials 14.77%
Alexander & Baldwin Inc. 10,000 424,200
Duke Energy Corp. 10,000 253,300
Hercules Incorporated * 30,000 445,200
General Electric Company 10,000 365,000
__________
1,487,700
Manufacturing 16.34%%
Abitibi Consolidated (Canadian) 60,000 415,800
Fedders Corp. 40,000 145,200
General Motors Corp. 15,000 600,900
Newell Rubbernaid Inc. 20,000 483,800
___________
1,645,700
Technology 11.64%
Arrow Electronics * 10,000 243,000
Cisco Systems * 25,000 483,000
EMC Corporation * 30,000 446,400
___________
1,172,400
___________
Total Common Stocks (COST $ 8.671,882) $ 8,495,776
___________
SHORT TERM INVESTMENT: 14.90%
Commerce Bank Certtificate of Deposit 3.443%s11/2009 ** 1,500,000
_________
Total Short-Term Investment (COST $ 1,500,000) $ 1,500,000
___________
Total Investments 99.26% (COST $10,171,882) 9,995,776
Other Assets Less Liabilitits - Net 0.74% 74,294
___________
NET ASSETS 100.00% $10,070,070
===========
* Non-income producing during the year ** Redeemable upon request
The accompanying notes are an integral part of these financial statements
- 3 -
VALLEY FORGE FUND
STATEMENT OF ASSETS & LIABILITIES - DECENBER 31, 2004
ASSETS: Investments in securities at value (cost $10,171,882) $ 9,995,776
Cash and cash equivalents 65,230
Dividends and interest receivable 9,651
Receivable for investment sold 161,618
___________
Total Assets 10,232,275
___________
LIABILITIES:
Payable for inestments purchased 162,205
__________
Total Liabilities 162,205
___________
NET ASSETS: $10,070,070
===========
COMPOSITION OF NET ASSETS:
Common stock $ 1,090
Paid in capital 10,201,845
Undistributed net investment income 43,241
Net unrealized depreciation of investments ( 176,106)
___________
Net Assets (Equivalent to $9.24 per share based on
1,090,282 shares outstading) (Note 4) $10,070,070
===========
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 2004
INVESTMENT INCOME:
Dividens: (net of foreign taxes of $1,648)) $ 100.639
Interest 79,074
__________
Total Income: 179,713
__________
EXPENSES:
Communications 1,639
Insurance expense 1,541
Investment advisory fee (Note 2) 93,376
Non-interested directors' fees and expenses 1,814
Other expenses 1,618
Printing and mailing expenses 3,903
Professional fees 8,000
Registration fees 1,720
Taxes 1,350
__________
Total Expenses: 114,961
__________
NET INVESTMENT INCOME: $ 64,752
__________
REALIZED AND UNREALIZED GAIN FROM INVESTMENTS:
Net realized gain on investment securities 78,617
Net change in unrealized appreciation on investment securities 372,440
__________
Net realized and unrealized gain from investments: 451,057
__________
NET INCREASE IN NET ASSETS RESULTING FROM OPERAIONS: $ 515,809
==========
The accompanying notes are an integral part of these financial statements
- 4 -
VALLEY FORGE FUND
STATEMENTS OF CHANGES IN NET ASSETS - YEARS ENDED DECEMJBER 31, 2004 & 2003
2004 2003
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Investment income - net $ 64,752 $ 104,954
Net realized gain from investment transactions 78,617 197.164
Unrealized appreciation on investments 372,440 1,657,118
___________ ___________
Net increase in net assets resulting fron operations 515,809 1,959,236
___________ ___________
Distributions to shareholders (143,368) (157,198)
Capital share transactions (Note 4) 174,120 387,474
___________ ___________
Total Increase 546,561 2,189,512
NET ASSETS:
Beginning of year $ 9,523,509 $ 7,333,997
___________ ___________
End of year $10,070,070 $ 9,523,509
=========== ===========
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 2004
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - Organization: The Valley
Forge Fund, Inc. (the "Fund"), is a non-diversified open-end management invest-
ment company registered under the Investment Company Act of 1940, as amended.
The Fund's investment objective is to provide appreciation through investment
in common stocks and securities convertible into common stocks. The following
summarizes significant accounting policies followed by the Fund.
Security Valuation: Securities are valued at the last reported sales price or
in the case of securities where there is no reported last sale, the closing bid
price. Securities for which market quotations are not readily available are
valued at their fair values as determined in good faith by or under the super-
vision of the Company's Board of Directors in accordance with methods that have
been authorized by the Board. Short-term investments (maturities of 60 days
or less) are valued at amortized cost which approximates market value.
Securities Transactions & Investment Income: Security transactions are recorded
on the dates transactions are entered into (the trade dates). Realized gains
& losses on security transactions are determined on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income is deter-
mined on the accrual basis. Discount on fixed income securities is amortized.
Dividends and Distributions to Shareholders: The Fund records all dividends and
distributions payable to shareholders on the ex-dividend date. Permanent book
and tax differences relating to shareholder distributions may result in re-
classifications to paid in capital and may affect the per-share allocation be-
tween net investment income and realized and unrealized gain/loss. Undistribu-
ted net investment income and accumulated undistributed net realized gain/loss
on investment transactions may include temporary book and tax differences which
reverse in subsequent periods. Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
Federal Income Taxes: It is the Fund's intention to qualify as a regulated in-
vestment company and distribute all of its taxable income. The Fund has com-
plied to date with the provisions of the Internal Revenue Code applicable to
investment companies and accordingly, no provision for Federal income taxes is
required in the financial statements.
- 5 -
VALLEY FORGE FUND
NOTES TO FINANCIAL STATEMENTS (Continued) - DECEMBER 31, 2004
Use of Estimates: 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 increases and decreases in net assets
from operations during the reporting period. Actual results may differ from
those estimates.
Concentration of credit risk: The Company maintains its cash in bank deposit
accounts at one financial institution. The balances, at times, may exceed
depositor's insurance provided by the applicable guaranty agency.
2. MANAGEMENT FEE AND TRANSACTIONS WITH AFFILIATES - Under the terms of the
investment management agreement, Valley Forge Management Corp. ("the Manager")
has agreed to provide the Fund investment management services and be responsible
for the day to day operations of the Fund. The Manager will receive a fee, pay-
able monthly, for proiding investment advice at anannual rate of 1% based on the
average daily assets of the Fund. The fee will be accrued daily and paid month-
ly. A management fee of $93,376 was paid for the year ended December 31, 2004.
The Manager also provided transfer agency, portfolio pricing, administration,
accounting, financial reporting, tax accounting, and compliance services to the
Fund at no charge for the year ended December 31, 2004. Mr. Bernard Klawans is
the sole owner, director and officer of the Manager and is also President of the
Fund.
In addition, the Manager engaged in the following related party transactions
during the year ended December 31, 2004. The sole shareholder of the Manager
personally made various short-term loans to the Fund in order to assist the Fund
in meeting redemption requests without having to sell portfolio investments.
These loans were repaid without interest by the Fund. During the year ended
December 31, 2004, $14,000 of loans were made to the Fund and repaid to the sole
shareholder of the Manager without interest.
3. INVESTMENT TRANSACTIONS - Purchases and sales of investment securities
(excluding short-term securities) for the year ended December 31, 2004 were
$2,698,688 and $1,016,759 respectively. At December 31, 2004, net unrealized
depreciation for Federal income tax purposes aggregated $176.106 of which
$890,734 related to unrealized appreciation of securities and $1,066,840 related
to unrealized depreciation of securities. The cost of investments at December
31, 2004 for Federal income tax purposes was $8,671,882, excluding short-term
investments.
4. CAPITAL SHARE TRANSACTIONS - As of December 31, 2004, there were 10,000,000
shares of $.001 per value capital stock authorized. The total par value plus
paid-in capital equaled $10,202,935. Transactions in capital stock were as
follows for the years ended:
December 31, 2004 December 31, 2003
Shares Amount Shares Amount
------------------ ------------------
Shares sold 87,857 $ 769,318 96,699 $ 749,201
Shares issued in dividend reinvestment 14,726 136,020 16,707 148,539
Shares redeemed (83,179) (731,218) (64,623) (510,266)
_________________________________________
Net increase 19,404 $ 174,120 48,783 $ 387,474
=========================================
5. FEDERAL INCOME TAXES - Income and long-term capital gsain distributions are
determined in accordance with Federal income tax regulations, which may differ
from accounting principles generally accepted in the United States. As of
December 31, 2004 the taxable components of distributable earnings were:
Undistributed ordinary income $ 43,241
Undistributed long-term capital gain $ 0
Undistributed depreciation $ (176,106)
The tax character of distributions paid during the years ended December 31, 2004
and 2003 were as follows:
2004 2003
Qualified dividends $ 74,427 $104,992
Long-term capital gains $ 68,941 $ 52,206
6. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - The Fund's previously
issued financial statements omitted disclosures in Note 1 regarding
concentrations of credit risk and disclosures in Note 2 regarding related party
transactions whereby the sole shareholder of the Manager made various short-term
loans to the Fund in order to assist the Fund in meeting redemption requests
without having to sell portfolio investments.
- 6 -
VALLEY FORGE FUND
FINANCIAL HIGHLIGHTS
For a share of stock outstanding throughout the period
For the Year Ended December 31
2004 2003 2002 2001 2000
PER SHARE DATA:
Net Asset Value, Beginning of Year $ 8.89 $ 7.18 $ 7.98 $ 7.00 $ 7.83
Income from Investment Operations:
Net Investment Income 0.13 0.14 0.15 0.31 0.36
Net Realized & Unrealized Gain (Loss) 0.35 1.72 (0.78) 0.99 (0.32)
________________________________________
Total From Investment Operations 0.48 1.86 (0.63) 1.30 0.04
Less Distributions (0.13) <0.15> (0.17) (0.32) (0.87)
_______________________________________
Net Asset Value, End of Year 9.24 8.89 $ 7.18 $ 7.98 $ 7.00
Total Return 5.40% 25.91% (7.89)% 18.57% 0.51%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.22% 1.32% 1.24% 1.26% 1.40%
Net Investment Income 0.69% 1.31% 2.30% 3.90% 4.30%
SUPPLEMENTAL DATA:
Net Assets, End of Year in Thousands $10,070 $ 9,524 $ 7,334 $ 7,182 $ 6,234
Portfolio Turnover Rate 14.99% 16.27% 43.10% 75.45% 59.90%
ADDITIONAL INFORMATION
PROXY VOTING GUIDLINES:
The Fund's proxy voting policies and procedures, and information regarding how
the Fund voted proxies relating to security securities is available without
charge by calling 1-800-552-1948 or by visiting the Securities and Exchange
Commission ("SEC") web site (http://www.sec.gov.
QUARTERLY PORTFOLIO SCHEDULE:
The Fund now files a complete schedule of investments with the SECn for the
first and third quarters of each year on Form N-Q. These forms are available on
the SEC's website at http://sec.gov or may be reviewed and copied at the SEC's
Public Reference Room in Washington DC. Information concerning the operation of
this Public Reference Room may be obtained by calling 1-800-723-0330.
The accompaning notes are an integral part of these financial statement
- 7 -
VALLEY FORGE FUND
ADDITIONA INFORMATION (Continued)
BOARD OF DIRECTORS:
The Fund's business and affairs are managed under the direction of Directors
that are elected annually to servr for oneyear. Information pertaining to them
is set forth below. The SAI published by the Fund contains additional informa-
tion about these Directors, and is available without charge, by calling
1-800-548-1942. Each Director may be contacted by writing to the director
c/o Valley Forge Fund, P.O. Box 262, Valley Forge, PA 19481.
INTERESTED DIRECTORS & OFFICERS:
Name abd Age Position Term of Office Principal Other
with Fund and Length of Occupation Director-
Time Served Past 5 Years ships
Bernard B. Klawans Director Elected for One Year President of None
Age 83 President Served Since Incep- Valley Forge
tion 12/15/1972 Fund
Sandra K. Texter Treasurer Elected for One Year System Analyst None
Age 54 Served Since Lockeed Martin
Jan 30, 2001
INDEPENDENT DIRECTORS:
Victor J. Belanger Director Elected for One Year Retired Chief None
Age 64 Served Since Financial Off
08/18/1980 Linearizer Tech
Dr. James P. King Director Elected for One Year President None
Age 72 Served Since Incep- Desilube Tech Inc
tion 12/15/1972
Donald A. Peterson Director Elected for One Year Program Manager 1 None
Age 64 and Served Since DRS Technologies
Chairman 08/15/1974
"Interested persons" in the Fund as defined in the Investment Company Act of
1940. Mr. Klawans is an "Interested Person" through his ownership of the Fund's
Investment Adviser. Sandra Texter because she is the daughter of Mr. Klawans.
The accompaning notes are an integral part of these financial statements
- 8 -
VALLEY FORGE FUND
PRIVACY POLICY
The Federal Securities and Exchange Commission has adopted a ruling regarding
the "Privacy of Consumer Financial Information" known as Regulation S-P. This
ruling states that financial institutions such as the Valley Forge Fund must
provide you with this notice of our privacy policies and practices on an annual
basis. The Fund is pleased to report that:
A. Information We Collect - The Fund's application forms contain names, address-
es, phone numbers, W9 status, birth dates and social security or tax ID numbers
for regular accounts. IRA application forms also contain beneficiary informa-
tion. In addition, the Fund retains records of all of your security transac-
tions such as your account balances and transaction histories.
B. Our Disclosure Statement - The Fund only discloses personal information about
you while you are a shareholder or if you have left the Fund as required by law.
And, since all transactions are handled internally, the number of employees that
even see your information is limited. However, funds cannot be IRA trusees.
Your Fund now uses Delaware Charter & Gurantee Corporation to provide this
service that requires disclosure of your IRA shareholder name, address and
account information to them. In this regard, the Fund has forwarded a letter
requiring Delaware Charter to get permission from you if they wish to use such
information other than that required by law.
You should call 1-800-548-1942 if there are any questions about the Fund's Reg-
ulation S-P status.
- 9 -
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
of the Valley Forge Fund, Inc.
We have audited the accompanying statement of assets and liabilities of The
Valley Forge Fund,Inc. ("the "Fund") including the schedule of investments , as
of December 31,2004 and the related statement of operations for the year then
ended, the statements ofchanges in net assets for each of the two years in the
period then ended, andthe financial highlights for each of the four years then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements based on our audits. The financial
highlights for the year ended December 31,2000 was audited by other auditors
whose report dated January 16, 2001 expressed an unqualified opinion on this
information.
We conducted our audits 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 and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 2004, verified by
examination and by correspondence with brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position
of the Valley Forge Fund, Inc. as of December 31, 2004, 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 four years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
As discussed in Note 6 to the financial statements, the accompanying financial
statements have been restated.
Abington Pennsylvania s/ Sanville & Company
January 26, 2005, except for the information in
Note 6, as to which the date is November 2, 2007
- 10 -
Item 2. Code of Ethics.
CODE OF ETHICS
Pursuant to the requirements of Sections 406 and 407 of the Sarbanes-Oxley Act
of 2002 the Vally Forge Fund, (the "Fund"), hereby adopts the following Code of
Ethics that applies to the Fund's principal executive, financial and accounting
officers or persons performing similar functions regardless of whether these
individuals are employed by the Fund or a third party in order to prepare these
written standards that are reasonably designed to deter wrongdoing and to
a) Honest and ethical conduct, including the sthical handling of actual or
apparent conflicts of interest between personal and professional relationships;
b) Full, fair, accurate, timely and understandable disclosure in reports and
documents that the Fund files with, or submits to, the Securities & Exchange
Commission and in all public communications;
c) Compliance with all applicable governmental laws, rules and regulations;
d) Prompt internal reporting of violations of the code, should any ever occur,
to all principal officers of the Fund and all appropriate persons identified in
the code; and
e) The principal executive officer of the Fund will be held accountable for
adherence to the code as presented above.
Item 3. Audit Committee Financial Expert.
The Fund is small and has had a flawless financial record since inception 34
years ago. The current principal executive officer has prepared all financial
documents ever issued by the Fund, and has been doing so since the Fund's for-
mation. The current Fund auditor is Michael Baranowsky of Sanville & Company,
whose reports and communications indicate total satisfacation with the reports
he has received. Victor Belanger, retired Chief Financial Officer, Linearizer
Technology Inc. in Hamilton NJ is an "independent" member of the Board of
Directors of the Valley Forge Fund who has performed several independent audits
including those of the Fund's securities held in self custodianship in the past
twenty years. He always reported satisfactory findings to the Board of Direct-
ors. This 34 year record is believed to be sufficient rational to preclude the
need for an Audit Committee or an Audit Committee Financial Expert to monitor
future Fund finances unless the Fund should exceed 15 million in total assets.
Items 4-8. (Reserved)
Item 9. Controls and Procedures.
Bernard B. Klawans is the president of the Fund. He handles all financial mat-
ters of the Fund and has provided excellent internal control procedures to pro-
duce accuracy and safety in all financial matters involving Fund operations. He
is also president and owner of the Investment Adviser, the Valley Forge Manage-
ment Corporation that has provided the function of Transfer Agent "pro bono" to
the Fund. He has provided the additional control of requiring the signatures of
either the Treasureer, Sandra Texter or Ellen Klawans that holds no position in
the Fund or Adviser as well as his on all checks issued by the Fund.
Auditors have reviewed the Internal Control exercised by the Fund every year
since it was installed as a filing requirement by the Securities & Exchange
Commission and found it to be satisfactory for a small (less that 15 million
dollars in total assets) fund.
- 11 -
Item 10. Exhibits.
A. Code of Ethics.
Filed under Item 2 Code of Ethics above
B. Certification.
CERTIFICATIONS
I, Bernard B. Klawans certify that:
1. I have prepared this report on Form N-CSR of the Valley Forge Fund, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement, a
material fact or omit to state a material fact necessary to make the statement
made, in light of the circumstances under which such statements were made, mis-
leading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial infor-
mation presented, fairly show in all material respects as of, and for the peri-
ods included in this report. Cash flow information is not considered pertainent
to this document or the registrant;
4. The Fund is small being under 15 million dollars in total assets. Mr.
Klawans is the certifying officer of the Fund. The Board, in view of the small
size of the Fund determined that the clean operation by him over the past 33
years, the continuing history of certified audits and the auditors satisfaction
as stated in their statement of internal control exercised by the Fund, made it
unnecessary to have more certifying officers. Mr. Klawans therefore is respons-
ible for establishing and maintaining disclosure controls and procedures (as
defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the re-
gistrant and has:
a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant is made known to him by all others
associated with the Fund, particularly during the period which this report is
being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
report (the "Eveluation Date"); and
c) Evaluated and believes that the effectiveness of the disclosure controls
and procedures produces a satisfactory evaluation of the Fund's financials
reported in the audited annual report given above as of the Evaluation Date;
5. The Board of Directors and Mr. Klawans have discused, based on their most
recent evaluation, that:
a) They were satisfied that there were no significant deficiencies in
the design or operation of internal controls which could adversly affect the
registrrant's ability to record, process, summarize, and report financial
data; and
b) There was no fraud, whether or not material, that involves management
or other employees who might have a role in internal controls;
6. The registrant's Board of Directors and Mr. Klawans hereby state in this re-
port that there are no changes in internal controls or other factors that signi-
ficantly affect internal controls subsequent to the date our most recent evalua-
tion, including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: 12/31/04
/s/ Bernard B. Klawans
President
- 12 -
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Invsstment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Valley Forge Fund, Inc.
By (Signature and Title) /s/ Bernard B. Klawans
Bernard B. Klawans
President
Date 12/31/04