FORM N-CSR/A
CERTIFIED SHAREHOLDERS REPORT OF REGISTERED MANAGEMENT INESTMENT COMPANIES
Investment Company Act file number 811-01932
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: 12/31/05
Date of reporting period: 01/01/05 to 12/31/05
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, 2005
Dear Shareholder:
Your Fund started 2005 at $9.24 per share. Results show that our net asset
value per share closed at $8.89 after paying $.18 dividend. This represents
a decrease in value of 1.8% this year as compared to the Dow Jones Industrial
Average that declined 0.6%.
Last year was not easy. However, adjustments to the portfolio have improved
performance in the last quarter that should continue through the first quarter
of 2006. New purchases include Abbott Laboratories, Peabody Energy Corp. and
Kimberly Clark Corp., all of which have done well. McDonalds Corp. has been
sold and Fedders Corp. is about to be.
Financial figures for the year ended December 31, 2005 are attached.
Respectfully submitted,
s/Bernard B. Klawans
President
This report and the financial statements contained herein are submitted for the
general information of shareholders and are not authorized for distribution to
prospective investors unless preceeded or accompanied by an effective prospect-
us. Nothing herein contained is to be considered an offer of sale or solicita-
tion or an offer to buy shares of the Valley Forge Fund, Inc. Such offering is
made only by prospectus, which includes details as to offering price and materi-
al information
- 1 -
2005 PERFORMANCE DISCUSSION
The Fund decreased 1.8% in value in 2005 compared to the Dow Jones Industrial
Average decrease of 0.6%. Our communications securities including ADC Tele-
communications, AT&T Corp., and Comcast Corp. about broke even. Our basic
material securities including Barrick Gold, Coeur D'Alene Mines and Peabody
Energy increased slightly. Our consumer stocks also increased slightly,
including Abbott Laboratories, Federal Agric Mtg Corp., Home Depot, Kimberly
Clark Corp., Pep Boys - Manny, Moe & Jack, Supervalue and Time Warner. Our
industrials, including Alexander and Baldwin, Duke Energy, Hercules Inc.
General Electric and Granger (W.W.) Inc. broke about even. Our manufacturing
stocks including Abitibi Consolidated, Fedders Inc. and Newell Rubbermaid
performed poorly. Technology stocks including Arrow Electronics, Cisco
Systems and EMC Corporation ended up slightly.
VALLEY FORGE FUND
EXPENSES - DECEMBER 31, 2005
As a shareholder of the Fund, you incur ongoing costs that include management
fees and other Fund 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 other mutual funds. It is based on a
$1,000 investment made on July 1, 2005 that is held for the entire six-month
period to December 31, 2005.
Actual Expenses: The first line of the following table provides actual values &
expenses. 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 cal-
ulate 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 which is not
the Fund's actual return. These hypothetical acount values and expenses may not
be used for anything but comparison of ongoing costs of investing in this Fund
with an assumed rate of return of 5% hypothetical 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 di-
rect costs, such as wire or low balance 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, 2005 December 31, 2005 July 1, 2005 to
December 31, 2005
Actual $1,000.00 $1,027.18 $ 6.95
Hypothetical ** $1,000.00 $1,018.35 6.92
* Expenses are equal to the Fund's annualized expense ratio of 1.34% multiplied
by 184/365 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
Alexander & Baldwin Inc. 5.70 Basic Materials 3.7
Federal Agric Mtg. Corp. 5.63 Communications 10.8
Time Warner Inc. 5.50 Consumers 28.9
Comcast Corp. New Class A 5.45 Industrials 19.5
Cisco Systems 5.40 Manufacturing 8.3
Supervalu Inc. 5.12 Technology 13.1
Newell Rubbermaid Inc. 5.00 Short Term Investments 15.0
EMC Corporation 4.30 Other Assets Less Liabilities 0.7
The Home Depot Incorporated 4.26 _____
Granger (W. W.) Inc. 3.74 100.0%
_____
50.10%
=====
- 2 -
VALLEY FORGE FUND
SCHEDULE OF INVESTMENTS - DECEMBER 31, 2005
COMMON STOCKS: 84.3% Shares Value
Basic Materials 3.7%
Barrick Gold Corp (Canadian) 8,000 222,960
Coeur D'Alene Mines Corporation * 13,000 52,000
Peabody Enengy Corporation 1,000 82,420
___________
357,380
Communications 10.8%
ADC Telecommunications * 14,285 318,841
AT&T Corp. 7,794 190,880
Comcast Corp. New Class A * 20,000 518,400
___________
1,028,121
Consumers 28.9%
Abbott Laboratories 5,000 197,150
Federal Agic Mtg Corp. Class C Non Voting 17,900 535,747
The Home Depot Incorporated, Inc. 10,000 404,800
Kimbery-Clark Corp 5,000 298,250
Pep Boys - Manny, Moe & Jack 20,000 297,800
Supervalu Inc. 15,000 487,200
Time Warner Inc. 30,000 523,200
___________
2,744,147
Industrials 19.5%
Alexander & Baldwin Inc. 10,000 542,400
Duke Energy Corp. 10,000 274,500
Hercules Incorporated * 30,000 339,000
General Electric Company 10,000 350,500
Granger (W. W.) Inc. 5,000 355,500
__________
1,861,900
Manufacturing 8.3%
Abitibi Consolidated (Canadian) 60,000 242,400
Fedders Corp. 40,000 68,800
Newell Rubbernaid Inc. 20,000 475,600
___________
786,800
Technology 13.1%
Arrow Electronics * 10,000 320,300
Cisco Systems * 30,000 513,600
EMC Corporation * 30,000 408,600
___________
1,242,500
___________
Total Common Stocks (Cost $ 8,577,284) $ 8,020,848
___________
SHORT-TERM INVESTMENTS: 15.0%
Citizens Bank Money Market 3.92% 1,426,800
_________
Total Short-Term Investments (Cost $ 1,426,800) $ 1,426,800
___________
TOTAL INVESTMENTS 99.3% (Cost $10,005,084 9,447,648
Other Assets Less Liabilitits - Net 0.7 % 62,452
___________
NET ASSETS 100.00% $ 9,510,100
===========
* Non-income producing during the year
The accompanying notes are an integral part of these financial statements
- 3 -
VALLEY FORGE FUND
STATEMENT OF ASSETS & LIABILITIES - DECENBER 31, 2005
Assets: Investments in securities at value (cost $10,005,084) $ 9,447,648
Cash and cash equivalents 74,640
Dividends and interest receivable 4.750
___________
Total Assets 9,527,038
___________
Liabilities: Due to Adviser 8,386
Accrued expenses 8,552
___________
Total Liabilities: 16,938
___________
Net Assets: $ 9,510,100
===========
Composition of Net Assets:
Common stock $ 1,069
Paid in capital 10,023,226
Accumulated undistributed net investment income 43,241
Net unrealized depreciation of investments ( 557,436)
___________
Net Assets: (equivalent to $8.89 per share based on
1,069,398 shares outstading) (Note 4) $ 9,510,100
===========
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 2005
Investment Income:
Dividens: (net of foreign taxes of $1003) $ 123,060
Interest 58,772
__________
Total Income: 181,832
__________
Expenses:
Investment advisory fee (Note 2) 95,380
Professional fees 9,000
Printing and mailing expenses 5,960
Non-interested directors' fees and expenses 2,070
Registration fees 9,675
Insurance expense 1,357
Communications 1,239
Taxes 850
Other expenses 4,316
__________
Total expenses: 129,847
__________
Net Investment Income: $ 51,985
__________
Realized and Unrealized Gain (Loss) From Investments:
Net realized gain on investment securities 138,874
Net change in unrealized appreciation on investment securities (381,334)
__________
Net Realized and Unrealized Gain (Loss) from Investments: (242,460)
__________
Net Decrease in Net Assets Resulting from Operations: $ (190,475)
==========
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, 2005 & 2004
2005 2004
Increase (Decrease) in Net Assets from Operations:
Investment income - net $ 51,985 $ 64,752
Net realized gain from investments 138,874 78,617
Unrealized appreciation (depreciation) of investments (381,334) 372,440
___________ ___________
Net inc. (decrease) in net assets fron operations (190,475) 515,809
___________ ___________
Distributions to shareholders (190,847) (143,368)
Capital share transactions (Note 4) (178,648) 174,120
___________ ___________
Total increase (decrease) (559,970) 546,561
Net Assets:
Beginning of year $10,070,070 $ 9,523,509
___________ ___________
End of year $ 9,510,100 $10,070,070
=========== ===========
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 2005
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 that 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 reclass-
ifications to paid in capital and may affect the per-share allocation between
net investment income and realized and unrealized gain/loss. Undistributed net
investment income and accumulated undistributed net realized gain/loss on in-
vestment 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, 2005
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 & liabilities & dis-
closure of contingent assets & liabilities at the date of the financial state-
ments & reported amounts of increases & 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 $95,380 was paid for the year ended December 31, 2005.
The Fund owed the fee for December ($8,386) as of the year end. 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, 2005. 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, 2005. 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.
The loans were repaid without interest by the Fund. During the year ended
December 31, 2005, $100,155 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, 2005 were
$1,429,332 and $1,661,803 respectively. At December 31, 2005 net unrealized
depreciation for Federal income tax puposes aggregated $557,436 of which
$1,019,249 related to unrealized appreciation of securities and $1,576,685
related to unrealized depreciation of securities. The cost of investments at
December 31, 2005 for Federal income tax purposes was $8,578,284 excluding
short-term investments.
4. CAPITAL SHARE TRANSACTIONS - As of December 31, 2005, there were 10,000,000
shares of $.001 per value capital stock authorized. The total par value plus
paid-in capital equaled $10,024,295. Transactions in capital stock were as
follows for the years ended:
December 31, 2005 December 31, 2004
Shares Amount Shares Amount
------------------ ------------------
Shares sold 26,847 $ 235,573 87,857 $ 769,318
Shares issued in dividend reinvestment 20,325 182,277 14,726 136,020
Shares redeemed (68,056) (596,498) (83,179) (731,218)
_________________________________________
Net increase (decrease) (20,884) $(178,648) 19,404 $ 174,120
=========================================
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 Dec-
ember 31, 2005, the taxable components of distributable earnings were as
follows:
Undistributed ordinary income $ 43,241
Undistributed long-term capital gain $ 0
Undistributed depreciation $ (557,436)
The tax character of distributions paid during the years ended December 31, 2005
and 2004 were as follows:
2005 2004
Ordinary income $ 51,982 $ 74,427
Long-term capital gain $ 138,866 $ 68,941
6. RESTATEMENT OF PREVIOUSLY ISSUES 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 redemotion requests
without having to sell portfolio investments.
- 6 -
VALLEY FORGE FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout the period
For the Years Ended December 31
2005 2004 2003 2002 2001
PER SHARE DATA:
Net Asset Value, Beginning of Year $ 9.24 $ 8.89 $ 7.18 $ 7.98 $ 7.00
Income from Investment Operations:
Net Investment Income (*) 0.18 0.13 0.14 0.15 0.31
Net Realized & Unrealized Gain (Loss) (0.35) 0.35 1.72 (0.78) 0.99
________________________________________
Total From Investment Operations (0.17) 0.48 1.86 (0.63) 1.30
Less Distributions (0.18) (0.13) <0.15> (0.17) (0.32)
_______________________________________
Net Asset Value, End of Year $ 8.89 $ 9.24 $ 8.89 $ 7.18 $ 7.98
Total Return (**) (1.84)% 5.40% 25.91% (7.89)% 18.57%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.36% 1.22% 1.32% 1.24% 1.26%
Net Investment Income 0.55% 0.69% 1.31% 2.30% 3.90%
SUPPLEMENTAL DATA:
Net Assets, End of Year in Thousands $ 9,510 $10,070 $ 9,523 $ 7,334 $ 7,183
Portfolio Turnover Rate 18.31% 14.99% 16.27% 43.10% 75.45%
* Per share net investment income has been determined on the basis of
average number of shares outstanding during the period.
** Total return assumes reinvestment of dividends.
The accompaning notes are an integral part of these financial statements.
ADDITIONAL INFORMATION - UNAUDITED
PROXY VOTING GUIDLINES - The Fund's proxy voting policies and procedures, and in
formation regarding how the Fund voted proxies relating to portfolio securities
is available without charge by calling the Fund at 1-800-548-1942 or by visiting
the Securities and Exchange's ("SEC") website (http://www.sec.gov).
QUARTERLY PORTFOLIO SCHEDULE - The Fund now files a complete schedule of invest-
ments with the SEC for the first and third quarters of each fiscal year on Form
N-Q. These forms are available at the SEC's website (http://www.sec.gov) & may
be reviewed at the SEC's Public Reference Room in Washington DC. Information on
the operation of this Public Reference Room may be obtained by calling
(1-800-732-0330)
INVESTMENT MANAGER REVIEW - At its regularly scheduled in-person meeting on
08-16-2005, the Board of Directors unaminously approved continuance of an in-
vestment contract with the Manager.
BOARD OF DIRECTORS - The Fund's business and affairs are managed under the di-
rection of Directors that are elected annually to serve for one year. Informa-
tion pertaining to them is set forth below. The SAI published by thr Fund con-
tains additional information about these Directors, and is available without
charge by calling 1-800-548-1942. Eachmay be contacted by writing to the di-
rector c/o Valley Forge Fund, P.O. Box 262, Valley Forge, PA 19481.
- 7 -
VALLEY FORGE FUND
ADDITIONAL INFORMATION - UNAUDITED (continued)
Name and Age Position Term of Office Principal Other
with Fund and Length of Occupation Director-
Time Served Past 5 Years ships
INTERESTED DIRECTORS & OFFICERS - *
Bernard B. Klawans Director Elected for One Year President of None
Age 84 President Served Since Incep- Valley Forge
tion 12/15/1972 Fund
Sandra K. Texter Treasurer Elected for One Year System Analyst None
Age 55 Served Since Lockeed Martin
Jan 30, 2001
INDEPENDENT DIRECTORS:
Donald A. Peterson Director Elected for One Year Program Manager 1 None
Age 65 and Board Served Since DRS Technologies
Chairman 08/15/1974
Victor J. Belanger Director Elected for One Year Retired Chief None
Age 65 Served Since Financial Off
08/18/1980 Linearizer Tech
Dr. James P. King Director Elected for One Year President None
Age 73 Served Since Incep- Desilube Tech Inc
tion 12/15/1972
C. William Majer Director Elected for One Year President None
Age 69 Served Since 06/21/05 Majerplus Limited
* "Interested persons" in the Fund as defined in the Investment Company Act of
1940 are Mr. Klawans because his ownership of the Fund's Investment Adviser and
Sandra Texter because she is the daughter of Mr. Klawans.
- 8 -
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, ("the "Fund") including the schedule of investments, as
of December 31, 2005 and the related statement of operations for the year then
ended, the statements of changes in 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. 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.
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 confirma-
tion of securities owned as of December 31, 2005, 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, 2005, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
As discussed in Note 6 to the financial statements, the accompanying financial
statements have been restated.
Abington Pennsylvania s/ Sanville & Company
January 30, 2006, except for the information in
Note 6, as to which the date is November 2, 2007
- 9 -
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 35
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 35 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 acted as Transfer Agent "pro bono" to the Fund. He
has provided the additional control of requiring the signatures of either the
Treasurer, 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.
- 10 -
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 35
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: 12/31/05
/s/ Bernard B. Klawans
President
- 11 -
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 12/31/05