FORM N-CSR
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: 12/31/08
Date of reporting period: 01/01/08 to 06/30/08
Item 1. Report to Shareholders.
Valley Forge Fund
1375 Anthony Wayne Dr.
Wayne PA 19087
June 30, 2008
Dear Fellow Shareholder:
Your Fund started 2008 at $9.35 per share. Results show that our net asset
value per share closed at $8.98. This represents a decrease in value of 4.1%
the first half of this year as compared to the Dow Jones Industrial Average that
decreased 14.4%.
The secret (that everyone knows) of making money in the stock market in a
conservative fashion is to buy low and sell high. Every one would most probably
agree that the market is approaching levels where even great securities are
reaching bargin basement levels. All that is required to get excellent returns
is to have cash available to take advantage of the situation.
Management has patiently maintained a cash position that has now reached 67.5%
of the Fund's total assets. This cash will be invested to await times when most
investors agree that the market is approaching levels where even great secuities
are fairly priced and go through the cycle again.
Financial Statements for the six months ended June 30, 2008 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 -
FUND UNAUDITED EXPENSES JUNE 30, 2008 - 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 January 1, 2008 that
is held for the entire six-month period to June 30, 2008.
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 account 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 *
01/01/2008 06/30/2008 01/01/08 to 06/30/2008
Actual $ 1,000.00 $ 959.36 $ 5.85
Hypothetical ** $ 1,000.00 $ 1,018.90 6.02
* Expenses are equal to the Fund's annualized expense ratio of 1.20%
multiplied by 182/366 to reflect the one=half year period.
** With a 5% return before expenses
TOP TEN HOLDINGS AND ASSET ALLOCATION -
Top Ten Holdings, % of Net Asset Asset Allocation, % of Net Assets
General Electric Corp. 6.26 Basic Materials 0.4
Supervalu Inc. 5.43 Communications 5.2
Kimberly-Clark Corp. 3.50 Consumers 20.6
Federal Argi Mtg Corp. 3.48 Industrials 6.3
Time Warner Inc. 3.43 Cash & Cash Equivalents 67.0
AT&T Corp. 3.08 Other Assets Less Liabilities 0.5
Target Corp. 2.72 ______
ADC Telecommunications Inc. 2.02 100.0%
Pep Boys Manny Moe & Jack 2.00
Coeur D'Alene Mines Corp. 0.44
_____
32.36%
The above portfolio holdings are subject to change and are not recommendations
of individual stocks.
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 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 DC
Information on the operation of this Public Reference Room may be obtained by
calling (1-800-732-0330).
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.
Information published by the Fund contains additional information 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 Officers and Directors: *
Name and Age Position Time Served Principal Occupation
with Fund Past 5 Years
Bernard B. Klawans Director Inception 05/15/1972 Chief Executive Officer
Age 87 Chief Executive & to Present Chief Financial Officer
Chief Financial of the Fund
Officer
Sandra K. Texter Secretary 01/30/2003 - Present System Analyst
Age 57 Lockheed Martin
Independent Directors:
Donald A. Peterson Director and 08/15/1974 - Present Program Manager
Age 67 Board Chairman DRS Technologies
Victor J. Belanger Director 08/18/1980 - Present Retired Chief Financial
Age 65 Officer Linearizer Tech
Dr. James P. King Director Inception 05/15/1972 President
Age 74 to Present Desilube Tech Inc
C. William Majer Director 06/21/2005 - Present President
Age 71 MajerPlus LTD
* "Interested persons" in the Fund as defined in the Investment Company Act of
1940 are Mr. Klawans because he owns the Fund's Investment Adviser and Sandra
Texter because she is the daughter of Mr. Klawans and Secretary of the Fund.
REMUNERATION OF FUND OFFICERS, DIRECTORS AND ASSOCIATED PERSONS - The Fund Inde-
pendent Directors and an Associated Person are paid for travel expenses associ-
ated with attending Fund meetings and/or performing Fund services. Their
remuneration for the six months ended June 30, 2008 was:
Bernard B. Klawans $ 0 Victer J. Belanger $258 Donald A. Peterson $ 149
Sandra K. Texter 0 Dr. James P. King 99 C. William Majer 99
Ellen Klawans 0
Since Bernard Klawans and Sandra Texter are officers of the Fund, they may not
receive compensation from the Fund outside of a management fee paid to the
Adviser. Everone else except Ellen Klawans is an Independent Director of the
Fund. She is an Associated Person because she is Mr. Klawans daughter in law
who does all the Edgar electronic SEC filings and provides other support
concerned with shareholder servicing.
SECURITIES & EXCHANGE COMMISSION EXAMINATION - The Securities and Exchange
Commission ("SEC") performes local examinations of all Registered mutual funds.
Their most recent one of the Valley Forge Fund discussed certain previous
operational practices by Fund Management. These practices have also been
examined by an independent accounting hired by the Fund. Both the SEC and
the independent accountant suggested that these practices were not in line with
modern business practices and were best discontinued even though they had not
affected Fund performance, per share pricing or shareholder values as presented
in the originally filled Fund financial statements.
The Valley Forge Fund Board of Directors has addressed and caused corrective
action to be taken to ensure that Fund operations and reporting procedures
have been brought up to the level required in the modern financial operational
environmemt. Practices that have ceased included, among other things, interest
free loans from management to meet unexpected large shareholder redemptions and
personal banking accounts by management in the same banking instutions as used
by the Fund. In addition, the Fund's annual and semi-annual reports for the
years 2004, 2005 and 2006 were reissued in Novmber 2007 to disclose these prac-
tices and the corrective action taken to ensure their discontinuance.
VALLEY FORGE FUND PERFORMANCE SUMMARY - All returns in this report represent
past performance that is not a guarantee of future results achieved by the Fund.
The Fund's current performance may be lower or higher than future performance.
In addition, by using the Fund's trading symbol VAFGX, past performance is also
available from various financial websites and current information is available
at any brokerage firm. Please note that both investment returns and principal
value may fluctuate widely, so that an investor'shares, when sold, could be
worth more or less than your original cost. The returns shown do not reflect
taxes that a shareholder would pay on Fund distributions or on the sale of Fund
shares. The following is a line graph comparing the inital and subsequent
account values at the end of each of the past ten years of a $10,000 investment
in the Fund and in the Dow Jones Industrial Aversge.
I X
17,000 I X = VALLEY FORGE FUND
I O = DOW JONES INDUSTRIAL AVERAGE
16,000 I
I X
15,000 I O
I X
14,000 I X
I
13,000 I
I O X 0 O
12,000 I O X
I O X O 0
11,000 I X X
I O
10,000 I___0X___________X_________________O__________________________________
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Another measure of performance is the Fund's Average Annual Total Returns for
the past 1, 5 and 10 year periods compared with the Dow Jones Averages.
A table presenting these values follows.
1 Year 5 years 10 years
Valley Forge Fund - 9.1% 2.7% 5.6%
Dow Jones Industrial Average -15.4% 5.2% 2.4%
FUND FINANCIAL HIGHLIGHTS FOR A SHARE OF CAPITAL STOCK HELD THROUGH THE PERIOD
Ended 06/30/08 Year Ended December 31
unaudited 2007 2006 2005 2004
PER SHARE DATA:
Net Asset Value, Start of Year $ 9.35 $ 9.53 $ 8.89 $ 9.24 $ 8.89
Income from Investment Operations: _______________________________________
Net Investment Income (**) 0.14 0.16 0.25 0.18 0.13
Net Real & Unrealized Gain (Loss) (0.52) 0.11 0.64 (0.35) 0.35
_______________________________________
Total From Investment Operations. (0.38) 0.27 0.89 (0.17) 0.48
_______________________________________
Less Distributions 0.00 (0.45) (0.25) (0.18) (0.13)
_______________________________________
Net Asset Value, End of Period 8.97 $ 9.35 $ 9.53 $ 8.89 $ 9.24
Total Return (***) (4.06)% 2.83% 10.12% (1.84)% 5.40%
RATIOS TO AVERAGE NET ASSETS:
Expenses (*)1.19% 1.56% 1.27% 1.36% 1.22%
Net Investment Income 1.30% 1.75% 1.14% 0.55% 0.69%
SUPPLEMENTAL DATA:
Net Assets in Thousands $ 8,532 $ 9,108 $ 9,698 $ 9,510 $10,070
Portfolio Turnover Rate 0.8% 8.3% 10.3% 18.3% 15.0%
* Annualized
** 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.
- 4 -
VALLEY FORGE FUND
UNAUDITED SCHEDULE OF INVESTMENTS - JUNE 30, 2008
COMMON STOCKS: 32.5% Shares Cost Value
Basic Materials 0.4%
Coeur D'Alene Mines Corp. (*) 13,000 $ 221,935 $ 37,700
__________ __________
221,935 37,700
Communications 5.2%
ADC Telecommunications (*) 12,000 190,021 177,240
AT&T Corp. 7,794 236,687 262,580
__________ __________
426,708 439,820
Consumers 20.6%
Federal Agic Mtg Corp. Class C Non Voting 12.000 294,069 297,360
Kimbery-Clark Corp 5,000 295,455 298,900
Pep Boys - Manny, Moe & Jack 20,000 542,916 174,400
Supervalu Inc. 15,000 162,719 463,350
Target Corp. 5,000 299,605 232,450
Time Warner Inc. 20,000 332,670 296,000
__________ __________
1,927,434 1,762,460
Industrials 6.3%
General Electric Company 20,000 752,373 533,800
__________ __________
752,373 533,800
__________ ___________
Total Common Stocks $ 3,328,450 $ 2,773,780
___________ ___________
SHORT-TERM INVESTMENTS: 67.0%
Commerce Bank Saving Act 4.8% (**) $ 5,722,195 $ 5,722,195
___________ ___________
Total Short-Term Investments $ 5,722,195 $ 5,722,195
___________ ___________
TOTAL INVESTMENTS 99.5% $ 9,050,645 $ 8,495,975
___________
OTHER ASSETS LESS LIABILITIES - NET 0.5 % 41,091
___________
NET ASSETS 100.0% $ 8,537,066
===========
* Non-income producing during the period
** Only $100,000 of this amount is insured by the Federal Government. Fund
Management believes that the risk of loss is small but, nevertheless should
be disclosed. Funds may be withdrawn from this account without penalty at
any time.
- 5 -
VALLEY FORGE FUND
UNAUDITED STATEMENT OF ASSETS & LIABILITIES - JUNE 30, 2008
Assets: Investments in securities at value (cost $ 9,050,645) $ 8,495,975
Cash and cash equivalents 9,973
Dividends and interest receivable 30,100
Delta retained earnings 2007 1,018
___________
Total Assets 8,537,066
___________
Liabilities:Accrued expenses 0
___________
Net Assets: $ 8,537,066
===========
Composition of Net Assets:
Common stock $ 951
Paid in capital 8,890,100
Accumulated undistributed net investment income 200,685
Net unrealized depreciation of investments (554,670)
___________
Net Assets: (equivalent to $ 8.97 per share based on
951,359 shares outstading) (Note 4) $ 8,537,066
===========
UNAUDITED STATEMENT OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2008
Investment Income:
Dividends: $ 42,925
Interest 123,449
__________
Total Income: 166,374
__________
Expenses:
Investment advisory fee (Note 2) 43,719
Non-interested directors' fees and expenses 555
Fees 8,017
Communications 738
Other (4,896)
P & M 2,173
Taxes 1,995
________
Total expenses: 52,301
__________
Net Investment Income: $ 114,073
__________
Realized and Unrealized Gain (Loss) From Investments:
Net realized gain on investment securities 39,521
Net change in unrealized depreciation on investment securities (514,748)
__________
Net Realized and Unrealized Gain (Loss) from Investments: (479,227)
__________
Net Decrease in Net Assets Resulting from Operations: $ (361,154)
==========
The accompanying notes are an integral part of these unaudited financial
statements
- 6 -
VALLEY FORGE FUND STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, 2008, AND YEAR ENDED DECEMBER 31, 2007
06/30/08 12/31/07
Unaudited
Increase (decrease) in Net Assets from Operations:
Investment income - net $ 114,073 $ 170,780
Net realized gain from investments 39,521 255,628
Unrealized appreciation of investment (514,748) (143,875)
___________ ___________
Net Increase in net assets fron operations (361,154) 282,533
___________ ___________
Distributions to shareholders 0 (422,586)
Capital share transactions (Note 4) (209,769) (450,417)
___________ ___________
Total increase (decrease) (570,923) (590,470)
Net Assets:
Beginning of period $ 9,107,989 $ 9,698,459
___________ ___________
End of period $ 8,537,066 $ 9,107,989
=========== ===========
UNAUDITED NOTES TO FINANCIAL STATEMENTS - JUNE 30, 2008
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.
- 7 -
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: As of June 30, 2008, the Fund maintains its cash
in bank deposit accounts at one federally insured financial instution. The
balance at times may exceed depositor's insurance provided by the applikcable
quaranty 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 receives a fee, payable
monthly, for providing investment advice at an annual rate of 1% based on the
average daily net assets of the Fund. The fee is accrued daily and paid
monthly. A management fee of $43,719 was paid for the six months ended
June 30, 2008. The Manager also provides transfer agency, portfolio pricing,
administration, accounting, financial reporting, tax accounting, and compliance
services to the Fund at no charge. Mr. Bernard Klawans is the sole owner,
director and officer of the Manager and is also President, Chief Executive
Officer and Chief Financial Officer of the Fund.
3. INVESTMENT TRANSACTIONS - Purchases and sales of investment securities
(excluding short-term securities) for the six months ended June 30, 2008 were
$146,053 and $1,145,166 respectively. At June 30, 2008 net unrealized
depreciation for Federal income tax puposes aggregated $(558,670) of which
$307,367 related to unrealized appreciation of securities and $636,611
related to unrealized depreciation of securities. The cost of investments at
June 30, 2008 for Federal income tax purposes was $3,328,450 excluding
short-term investments.
4. CAPITAL SHARE TRANSACTIONS - As of June 30, 2008, there were 10,000,000
shares of $.001 per value capital stock authorized. The total par value plus
paid-in capital equaled 8,891,051. Share transactions totaled:
Six months ended 6/30/08 Year - 2007
Shares Amount Shares Amount
------------------ ------------------
Shares sold 7,580 $ 70,283 15,842 $ 159,140
Shares issued in dividend reinvestment 0 0 43,040 403,669
Shares redeemed (30,432) (280,052) (101,964) (1,013,246)
_________________________________________
Net increase (decrease) (22,852) $(209,769) (43,082) ($450,437)
=========================================
5. FEDERAL INCOME TAXES - Income and long-term capital gain distributions are
determined in accordance with Federal income tax regulations, which may differ
from accounting principles generally accepted in the United States. As of June
30, 2008, the taxable components of distributable earnings were as follows:
Undistributed ordinary income $ 27,083
Uudistributed qualified dividend income $ 32,625
Undistributed long-term capital gain $ 111,277
Undistributed net depreciation $ (200,685)
The tax character of distributions paid during the years ended December 31, 2007
and 2006 were as follows:
2007 2006
Qualified dividends $ 216,074 $ 168,592
Long-term capital gains $ 210,324 $ 80,625
--------- ---------
$ 426,408 $ 249,217
- 8 -
6. NEW ACCOUTING PRONOUNCEMENTS - In March 2008, the Financial Accounting
Standard Board ("FASB") issued Statement of Financial Accounting Standards
No.11, "Disclosures about Derivative Instruments and Hedging Activities." FAS
161 is intended to improve financial reporting about derivative instruments and
hedging activities by requiring enhanced disclosures to enable investors to
better understand their efforts on an entity's financial position, financial
performance and cash flows. FAS 161 is effective for financial statements
issued for fiscal years and interm periods beginning after November 15, 2008
with early application encouraged. Management does not expect the adaption of
FAS 161 to have an effect on its financial statements.
The Fund adapted the FASB Statement of Financial Accounting Standards No.
157 ("FAS 157") Fair Value Measurements effective January 1, 2008. which
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles ("GAAP"), and expands disclosures about
fair value measurements. The Fund found that adaption of FAS 157 had no effect
on its financial statements. All securities purchased by the Fund trade on
national stock exchanges, are liquid and have closing prices that are readily
available for use in pricing the Fund securities on a daily basis.
The three-tier hirearcy of inputs along with evaluation of the Fund's
investments in securities as of June 30, 2008 are summarized below.
Valley Forge Fund
Investments Other Financial
in Securities Instruments *
Level 1 Quoted prices in active narkets for
identical investments. $2,773,780 $ 0
Level 2 Other significant observable inputs
(including quoted prices for similar
investments, interest rates, prepayments,
speeds, credit risk, etc. 0 0
Level 3 Significant unobservable inputs (including
the Fund's own assumptions in deteremining
the fair value of investments) 0 0
__________ ____________
Total Value of Commom Stocks 06/30/08 $2,773,780 $ 0
* Other financial instruments are derivative instruments not reflected in the
portfolio of investments, such as forwards and swap contracts, which are valued
at the realized appreciation/deprecition on the instrument.
In June 2006, FASB issued Interpretation No. 48 ("FIN"), Accounting for
Uncertanty in Income Taxes". FIN 48 established the minimum threshold for
recognizing, and a system for measuring the benefits of tax-return positions in
financial statements, effective for the fund's current fiscal year. Management
found that adaption of FIN 48 had an effect on its financial statements and has
concluded that no provision for income tax is required in the Fund's financial
statements.
7. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - In November 2007. the
Fund's independent registered public accounting firm at that time, Sanville &
Company, reissued their firm's audit reports under Form N-CSR/A for the years
ended December 31, 2006, 2005 and 2004 to disclose tnat there were omitted
disclosures regarding concentration of credit risk and disclosures regarding
related party transactions wherein the sole shareholder of the Manager of the
Fund made various no interest short- term loans to the Fund to assist the Fund
in meeting redemption requests without having to sell portfolio investments.
For the six months ended June 30, 2008, the Manager of the Fund made no short
term, interest-free loans to the Fund in order to assist the Fund in meeting
redemption requests.
- 9 -
Item 2. Code of Ethics
CODE OF ETHICS
Pursuant to the requirements of Sections 406 & 407 of the Sarbanes Oxley Act of
2002, the Vally Forge Fund, (the "Fund"), hereby adopts the following Code of
Ethics that applies to Bernard Klawans who is the Fund's principal executive,
financial and accounting officer 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 ethical 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.
Mr. Klawans has prepared all financial documens issued by the Fund, is still
responsible for their preparation. The current Fund auditor is Kevi
n Conner
of Conner & Associates
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 examinations including those
of the Fund's securities held in self custodianship in the past thirty five
years. He always reported satisfactory findings to the Board of Directors.
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 along wuth support from the Fund's Board of Directors
instituted additional internal control procedures to not only improve accuracy
and safety in all financial matters involved in running the Fund but also
properly publish disclosures of Fund Operations. He is also president and owner
of the Investment Adviser, the Valley Forge Management Corporation that has
acted as Transfer Agent "pro bono" to the 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. Mr. Klawans is the certifying officer of the Fund who is responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant 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 unaudited semi- 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 have been changes in internal controls or other factors that
do not deminish the accuracy of the financial results but significantly affect
internal controls subsequent to the date our most recent evaluation, including
corrective actions with regard to deficiencies and material weaknesses.
Date: 07/28/08
/s/ Bernard B. Klawans
President and
Chief Financial Officer
- 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 07/28/08
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