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 811-09174
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Aegis Value Fund, Inc.
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(Exact name of Registrant as specified in charter)
1100 N. Glebe Road, Suite 1040, Arlington, VA 22201
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(Address of principal executive offices) (Zip code)
William S. Berno, 1100 N. Glebe Road., Suite 1040, Arlington, VA 22201
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(Name and address of agent for service)
Registrant's telephone number, including area code: (703) 528-7788
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Date of fiscal year end: 08/31
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Date of reporting period: 08/31/07
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Item 1. Reports to Stockholders
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AEGIS / VALUE FUND
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ANNUAL REPORT
AUGUST 31, 2007
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AEGIS / VALUE FUND
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Shareholders' Letter
October 18, 2007
To the shareholders of the Aegis Value Fund:
We are pleased to present the Aegis Value Fund's annual report for the twelve
month period ended August 31, 2007.
We take this opportunity to provide a brief overview of the objectives and
strategy of the Fund.
The Aegis Value Fund seeks to achieve long-term, above market returns while
minimizing risk of capital loss. Our strategy is to invest in a well-researched
portfolio of small-cap equities trading at a fraction of intrinsic worth. We
believe the equity markets are often inefficient, and we employ a contrarian,
company-focused approach, selecting each stock individually on its own merit.
We purchase shares in companies when we judge share prices to be fundamentally
undervalued, focusing on stocks trading at low price-to-book or price-to-cash
flow ratios. Low multiple stocks are a segment of the market where academic
research shows historical returns have significantly outpaced the overall
market. We often invest in companies when they are misunderstood, out of favor,
or neglected. We hold investments until market prices reach our estimate of
intrinsic value.
Since inception of the Aegis Value Fund on May 15, 1998, performance has been
strong relative to benchmark indices. The Fund has posted a cumulative gain of
236.8 percent through September 30, 2007, compared to cumulative gains of 139.2
percent in our primary small-cap benchmark, the Russell 2000 Value Index.
During this period, the Russell 2000 Index of small-cap stocks posted
cumulative gains of 91.8 percent, and the S&P 500 posted cumulative gains of
59.8 percent.*
For the twelve month period ended August 31, 2007, the Aegis Value Fund posted
a gain of 13.6 percent, versus a gain of 6.6 percent for the Russell 2000 Value
Index. The Russell 2000 Index returned 11.4 percent, while the S&P 500 Index
returned 15.1 percent.
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ANNUAL REPORT
AUGUST 31, 2007
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Shareholders' Letter - (continued)
Our relative performance versus the Russell 2000 Value Index was favorably
impacted by strong equity performance during the year, somewhat offset by
modest absolute returns achieved on the Fund's defensive position in cash and
Treasury bills. We strongly recommend that you read our Annual Advisor's
Report, which provides extensive investment commentary. For those of you who do
not automatically receive the Advisor's Report in the mail from your broker, it
is available on our website at www.aegisvaluefund.com or by calling us at
800-528-3780. However, please be aware that the Advisor's Report is not a part
of the SEC mandated Annual Report contained in this booklet.
We look forward to serving as your investment partner in the coming year.
Aegis Financial Corporation
Scott L. Barbee, CFA
Managing Director, Portfolio Manager
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* Aegis Value Fund's one-year, three-year, five-year, and since inception
(5/15/1998) average annual returns for the period ending September 30, 2007 are
11.7%, 9.1%, 14.6%, and 13.8% respectively. Returns include reinvestment of
dividends and capital gains. Russell 2000 Value Index one-year, three-year,
five-year, and since inception (AVALX-5/15/1998) average annual returns for the
period ending September 30, 2007 are 6.1%, 12.5%, 18.7%, and 9.8%. All
historical performance returns shown in this shareholders' letter for the Aegis
Value Fund Inc. are pre-tax returns. This report does not constitute an offer
or solicitation of any transaction in any securities. The Aegis Value Fund is
offered by prospectus only.
Investors are advised to consider the fund's investment objectives, risks,
charges and expenses carefully before investing. The prospectus contains this
and other information about the Aegis Value Fund. For a prospectus and more
complete information, including charges and expenses, please call 800-528-3780
or visit our website at www.aegisvaluefund.com, where an online prospectus is
provided. The prospectus should be read carefully before investing.
Performance data quoted represents past performance. Past performance does not
guarantee future results. Investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. Current performance may be lower
or higher than the performance data quoted. Please call 800-528-3780 to obtain
performance data current to the most recent month-end.
3
AEGIS / VALUE FUND
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Disclosure of Fund Expenses
August 31, 2007
As a shareholder of the Fund, you incur ongoing costs, including management
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 ongoing costs of investing in other mutual funds. The example is
based on an investment of $1,000 invested and held for the entire semi-annual
period, March 1, 2007 - August 31, 2007.
Actual expenses
The table below provides information about actual account values and actual
expenses.
Beginning Expenses Paid
Account Value Ending Account Annualized During Period
Fund 3/1/2007 Value 8/31/2007 Expense Ratio 3/1/07-8/31/07(2)
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Aegis Value Fund
Actual ............... $ 1,000.00 $ 932.00(1) 1.3877% $ 6.76
Hypothetical ......... 1,000.00 1,018.00 1.3877% 7.06
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(1) The actual ending account value is based on the actual total return of the
Fund for the period March 1, 2007 to August 31, 2007 after actual expenses
and will differ from the hypothetical ending account value which is based
on the Fund's actual expense ratio and a hypothetical annual return of 5%
before expenses. The actual cumulative return at net asset value for the
period March 1, 2007 to August 31, 2007 was (6.8 %).
(2) Expenses are equal to the Fund's annualized expense ratio (1.39%)
multiplied by the average account value over the period, multiplied by
184/365 (to reflect the period between 3/1/2007 and 8/31/2007)
Please see performance data disclosure on page 3
You may use the information in this table, 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 table under the
heading entitled "Actual Expenses Paid During Period" to estimate the expenses
you paid on your account during this period.
Hypothetical example for comparison purposes
The table above also 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
4
ANNUAL REPORT
AUGUST 31, 2007
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shown in the table are meant to highlight your ongoing costs only. The Fund is
a pure no-load fund and does not charge any sales charges (loads), distribution
or service fees, or redemption fees.
Key Statistics
[The following data represents the line graph depicted in the printed material.]
5/15/98 5/31/98 8/31/98 8/31/99 8/31/00 8/31/01 8/31/02 8/31/03 8/31/04 8/31/05 8/31/06 8/31/07
------------------------------------------------------------------------------------------------------------
Aegis Value Fund $10,000 $9,970 $8,210 $11,009 $11,960 $16,517 $17,755 $21,948 $25,597 $28,077 $30,119 $34,218
Rus. 2000 Val. Index $10,000 $9,786 $7,564 $ 8,629 $ 9,811 $11,581 $10,933 $13,521 $16,157 $19,810 $22,330 $23,812
Average Annual Total Returns (As of August 31, 2007)
AVALX Rus. 2000 Val.
--------------------------
Trailing 5 Year ....................... 14.0% 16.9%
Trailing 3 Year ....................... 10.2% 13.8%
Trailing 1 Year ....................... 13.6% 6.6%
Since inception (May 15,1998) ......... 14.1% 9.8%
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See performance data disclosure on page 3.
5
AEGIS / VALUE FUND
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Industry Breakdown
% of the Fund's
Net Assets
---------------
Common Stock .......................... 84.4%
Consumer Discretionary .............. 29.8%
Consumer Staples .................... 0.9%
Energy .............................. 5.2%
Financials .......................... 20.2%
Health Care ......................... 0.0%
Industrials ......................... 15.0%
Information Technology .............. 4.2%
Materials ........................... 8.9%
Telecommunication Services .......... 0.2%
Utilities ........................... 0.0%
Warrants .............................. 0.3%
Investment Companies* ................. 4.5%
Short-Term Investments ................ 11.3%
Liabilities Less Other Assets ......... (0.5)%
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Total Net Assets .................... 100.0%
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* Please refer to page 12 for further details.
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ANNUAL REPORT
AUGUST 31, 2007
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Schedule of Portfolio Investments
August 31, 2007
Shares Market Value
-----------------------------
Common Stock - 84.4%
Consumer Discretionary - 29.8%
Auto Components - 4.8%
Exide Technologies(1) ............................... 499,316 $ 3,320,451
Superior Industries International, Inc. ............. 680,600 13,530,328
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16,850,779
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Automobiles - 0.5%
Coachmen Industries, Inc. ........................... 183,500 1,211,100
National R.V. Holdings, Inc.(1)(2) .................. 719,995 575,996
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1,787,096
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Distributors - 4.5%
Audiovox Corp.(1)(2) ................................ 1,055,193 11,026,767
Handleman Co.(2) .................................... 1,381,500 5,001,030
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16,027,797
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Hotels, Restaurants & Leisure - 1.9%
Archon Corp.(1) ..................................... 13,000 585,000
Bowl America, Inc. .................................. 9,481 156,437
J. Alexander's Corp. ................................ 130,620 1,704,591
Lodgian, Inc.(1) .................................... 158,300 1,936,009
Luby's, Inc.(1) ..................................... 8,367 95,886
Nathan's Famous, Inc.(1) ............................ 132,400 2,317,000
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6,794,923
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Household Durables - 9.0%
Bassett Furniture Industries, Inc.(2) ............... 626,532 7,230,179
Beazer Homes USA, Inc. .............................. 446,800 4,722,676
Comstock Homebuilding Companies, Inc.(1)(2) ......... 1,120,385 2,845,778
Dominion Homes, Inc.(1)(2) .......................... 768,527 1,667,704
M/I Homes, Inc. ..................................... 277,000 5,049,710
Meritage Homes Corp.(1) ............................. 426,500 7,728,180
National Presto Industries, Inc. .................... 15,000 827,400
WCI Communities, Inc.(1) ............................ 149,900 1,397,068
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31,468,695
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Leisure Equipment & Products - 2.1%
Head NV ............................................. 1,881,000 7,429,950
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See Notes to the Financial Statements.
7
AEGIS / VALUE FUND
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Schedule of Portfolio Investments
August 31, 2007 - (continued)
Shares Market Value
-----------------------------
Common Stock - Continued
Consumer Discretionary - Continued
Multiline Retail - 3.3%
Dillard's, Inc. ..................................... 262,700 $ 6,236,498
Duckwall-ALCO Stores, Inc.(1) ....................... 140,100 5,270,562
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11,507,060
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Specialty Retail - 0.6%
Books-A-Million, Inc. ............................... 129,108 1,719,719
Pep Boys - Manny, Moe & Jack ........................ 21,200 347,468
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2,067,187
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Textiles, Apparel & Luxury Goods - 3.1%
Delta Apparel, Inc. ................................. 337,700 5,852,341
Tandy Brands Accessories, Inc. ...................... 295,918 3,210,710
Unifi, Inc.(1) ...................................... 699,500 1,692,790
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10,755,841
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Total Consumer Discretionary ........................ 104,689,328
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Consumer Staples - 0.9%
Food Products - 0.9%
John B. Sanfilippo & Son, Inc.(1) ................... 325,238 3,174,323
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Energy - 5.2%
Energy Equipment & Services - 0.1%
Leader Energy Services Ltd.(1) ...................... 696,000 208,800
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Oil, Gas & Consumable Fuels - 5.1%
Brigham Exploration Co.(1) .......................... 425,000 2,146,250
Callon Petroleum Co.(1) ............................. 820,000 9,946,600
Meridian Resource Corp.(1) .......................... 2,525,000 5,858,000
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17,950,850
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Total Energy ........................................ 18,159,650
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Financials - 20.2%
Capital Markets - 0.2%
BKF Capital Group, Inc.(1) .......................... 331,200 783,288
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Commercial Banks - 0.0%
Citizens Bancshares Corp. ........................... 2,300 23,966
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See Notes to the Financial Statements.
8
ANNUAL REPORT
AUGUST 31, 2007
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Schedule of Portfolio Investments
August 31, 2007 - (continued)
Shares Market Value
-----------------------------
Common Stock - Continued
Financials - Continued
Diversified Financial Services - 3.0%
California First National Bancorp.(2) ............... 569,683 $ 7,736,295
Medallion Financial Corp. ........................... 250,140 2,749,039
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10,485,334
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Insurance - 14.2%
Old Republic International Corp. .................... 233,200 4,241,908
PMA Capital Corp.(1)(2) ............................. 2,300,516 23,120,185
Quanta Capital Holdings Ltd.(1) ..................... 2,652,613 7,135,529
Safety Insurance Group, Inc. ........................ 50,000 1,707,000
SCPIE Holdings, Inc.(1) ............................. 390,826 7,621,107
Specialty Underwriters' Alliance, Inc.(1)(2) ........ 832,330 5,967,806
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49,793,535
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Real Estate Investment Trusts - 0.8%
BRT Realty Trust .................................... 20,000 423,400
Friedman, Billings, Ramsey Group, Inc. Class A ...... 440,000 2,063,600
Luminent Mortgage Capital, Inc. ..................... 120,000 211,200
Vestin Realty Mortgage I, Inc. ...................... 18,809 99,688
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2,797,888
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Real Estate Management & Development - 1.2%
Consolidated-Tomoka Land Co. ........................ 5,900 405,507
MI Developments, Inc. ............................... 123,000 3,886,800
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4,292,307
-------------
Thrifts & Mortgage Finance - 0.8%
B of I Holding, Inc.(1) ............................. 305,183 2,233,940
Beverly Hills Bancorp Inc. .......................... 64,456 398,983
First Federal of Northern Michigan Bancorp, Inc. .... 34,540 276,320
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2,909,243
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Total Financials .................................... 71,085,561
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Health Care - 0.0%
Health Care Providers & Services - 0.0%
OCA, Inc.(1)(3) ..................................... 579,400 0
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See Notes to the Financial Statements.
9
AEGIS / VALUE FUND
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Schedule of Portfolio Investments
August 31, 2007 - (continued)
Shares Market Value
-----------------------------
Common Stock - Continued
Industrials - 15.0%
Aerospace/Defense - 0.6%
Allied Defense Group, Inc.(1) ....................... 368,651 $ 1,658,930
Sypris Solutions, Inc. .............................. 35,008 284,265
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1,943,195
-------------
Airlines - 6.0%
Air France-KLM-ADR(4) ............................... 96,700 4,019,819
Frontier Airlines Holdings, Inc.(1) ................. 275,804 1,635,518
MAIR Holdings, Inc.(1)(2) ........................... 1,210,922 7,640,918
Mesa Air Group, Inc.(1) ............................. 1,384,309 7,807,503
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21,103,758
-------------
Machinery - 6.8%
Quipp, Inc.(2) ...................................... 78,300 352,350
Tecumseh Products Co., Class A(1)(2) ................ 1,025,881 17,696,446
Tecumseh Products Co., Class B(1)(2) ................ 411,321 6,173,928
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24,222,724
-------------
Marine - 1.1%
International Shipholding Corp.(1) .................. 176,897 3,753,754
-------------
Road & Rail - 0.4%
Covenant Transport, Inc.(1) ......................... 226,321 1,430,349
-------------
Trading Companies & Distributors - 0.1%
Huttig Building Products, Inc.(1) ................... 69,100 415,291
-------------
Total Industrials ................................... 52,869,071
-------------
Information Technology - 4.2%
Internet Software & Services - 0.0%
LQ Corp., Inc.(1) ................................... 52,115 47,425
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IT Services - 0.1%
Technology Solutions Co.(1) ......................... 41,429 190,573
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Semiconductors & Semiconductor Equipment - 4.1%
ChipMOS TECHNOLOGIES Bermuda LTD.(1) ................ 472,600 2,986,832
Spansion, Inc.(1) ................................... 1,265,200 11,513,320
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14,500,152
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Total Information Technology ........................ 14,738,150
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See Notes to the Financial Statements.
10
ANNUAL REPORT
AUGUST 31, 2007
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Schedule of Portfolio Investments
August 31, 2007 - (continued)
Shares Market Value
-----------------------------
Common Stock - Continued
Materials - 8.9%
Chemicals - 2.9%
American Pacific Corp.(1)(2) ........................ 665,768 $ 10,352,693
Terra Industries, Inc.(1) ........................... 1,300 33,761
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10,386,454
-------------
Containers & Packaging - 1.1%
Mod-Pac Corp.(1)(2) ................................. 159,725 1,570,097
Peak International Ltd.(1)(2) ....................... 881,401 2,177,060
-------------
3,747,157
-------------
Metals & Mining - 2.6%
Amerigo Resources Ltd. .............................. 447,000 1,045,980
Northern Orion Resources, Inc.(1) ................... 28,400 134,616
Olympic Steel, Inc. ................................. 12,842 313,730
Ryerson Tull, Inc. .................................. 232,900 7,764,886
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9,259,212
-------------
Paper & Forest Products - 2.3%
Canfor Corp.(1) ..................................... 690,900 8,069,712
Pope & Talbot, Inc.(1) .............................. 27,721 6,930
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8,076,642
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Total Materials ..................................... 31,469,465
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Telecommunication Services - 0.2%
Diversified Telecommunication - 0.2%
IDT Corp. ........................................... 10,000 82,700
IDT Corp. Class B ................................... 86,000 774,000
Integrated Telecom Express, Inc.(1)(3) .............. 308,300 3,083
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859,783
-------------
Utilities - 0.0%
Electric Utilities - 0.0%
Commerce Energy Group, Inc.(1) ...................... 86,000 161,680
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Total Common Stock
(Cost $299,052,330) ................................... 297,207,011
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See Notes to the Financial Statements.
11
AEGIS / VALUE FUND
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Schedule of Portfolio Investments
August 31, 2007 - (continued)
Shares Market Value
-----------------------------
Warrants - 0.3%
Air France ADW 11/05/07(1) .......................... 101,200 $ 1,047,420
-------------
Total Warrants
(Cost $159,896) ....................................... 1,047,420
-------------
Investment Companies - 4.5%
Canfor Pulp Income Fund ............................. 79,349 996,623
Federated Prime Obligations Fund, 4.97% ............. 14,857,865 14,857,865
-------------
Total Investment Companies
(Cost $15,169,247) .................................... 15,854,488
-------------
Principal
Value
-------------
Short-Term Investments - 11.3%
U.S. Treasury Bill 11/01/07 (2.80% Discount Rate) ... $ 10,000,000 $ 9,952,556
U.S. Treasury Bill 9/06/07 (4.68% Discount Rate) .... 15,000,000 14,990,249
U.S. Treasury Bill 9/27/07 (4.64% Discount Rate) .... 15,000,000 14,949,734
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Total Short-Term Investments
(Cost $39,892,539) .................................... 39,892,539
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Total Investments - 100.5%
(Cost $354,274,012) ................................... 354,001,458
Liabilities less other Assets - (0.5)% ................ (1,719,554)
-------------
Net Assets - 100.0% ................................... $ 352,281,904
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(1) Non-income producing securities
(2) Affiliated Company - The fund is owner of more than 5% of the outstanding
voting securities. See Notes to the Financial Statements for additional
information on Investments in Affiliated Companies.
(3) Company is in liquidation and security is being fair valued according to
policies and procedures approved by the Aegis Value Fund board of
directors.
(4) ADR - American Depositary Receipt
See Notes to the Financial Statements.
12
ANNUAL REPORT
AUGUST 31, 2007
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Statement of Assets and Liabilities
August 31, 2007
Assets
Investments in unaffiliated companies/securities at market value (cost $234,596,821) ... $242,866,226
Investments in affiliated companies*/securities at market value (cost $119,677,191) .... 111,135,232
------------
Total investment securities at market value (cost $354,274,012) ........................ 354,001,458
Cash ................................................................................... 141
Receivable for fund shares sold ........................................................ 24,122
Receivable for investment securities sold .............................................. 236,258
Interest and dividends receivable ...................................................... 828,908
Prepaid assets ......................................................................... 42,032
------------
Total assets ......................................................................... 355,132,919
------------
Liabilities
Payable for investment securities purchased ............................................ 1,277,636
Payable for fund shares redeemed ....................................................... 1,091,356
Payable to Investment Advisor .......................................................... 379,716
Other payables ......................................................................... 102,307
------------
Total liabilities .................................................................... 2,851,015
------------
Net Assets ............................................................................... $352,281,904
============
Net assets consist of:
Paid-in capital ........................................................................ $335,804,297
Undistributed net investment income .................................................... 2,356,265
Accumulated net realized gain .......................................................... 14,393,896
Net unrealized depreciation ............................................................ (272,554)
------------
Net assets ............................................................................... $352,281,904
============
Capital Shares
Authorized (Par value $0.001 per share) ................................................ 100,000,000
============
Outstanding ............................................................................ 24,238,106
============
Net asset value per share $ 14.53
============
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* Please refer to Note 6 for additional details
See Notes to the Financial Statements.
13
AEGIS / VALUE FUND
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Statement of Operations
For the Year Ended August 31, 2007
Investment Income
Dividends from unaffiliated companies* .................................. $ 2,730,816
Dividends from affiliated companies ..................................... 856,019
Interest income ......................................................... 5,243,452
-------------
Total investment income ............................................... 8,830,287
-------------
Expenses
Investment advisory fees ................................................ 4,804,393
Fund servicing fees ..................................................... 380,293
Legal fees .............................................................. 105,000
Printing and postage fees ............................................... 70,000
Transfer agent & custody fees ........................................... 57,351
Registration fees ....................................................... 30,426
Insurance fees .......................................................... 26,718
Audit fees .............................................................. 22,000
Director fees ........................................................... 15,750
Miscellaneous fees ...................................................... 10,370
-------------
Net expenses .......................................................... 5,522,301
-------------
Net investment income ..................................................... 3,307,986
-------------
Realized and unrealized gain/(loss) on investments
Net realized gain on investments - unaffiliated companies ................. 65,005,250
Net realized (loss) on investments - affiliated companies ................. (39,395,416)
Change in unrealized depreciation of investments - unaffiliated companies (18,198,214)
Change in unrealized appreciation of investments - affiliated companies ... 39,169,602
-------------
Net realized and unrealized gain on investments ........................... 46,581,222
-------------
Net increase in net assets resulting from operations ...................... $ 49,889,208
=============
- ----------
* Net of foreign tax withholding of $53,178.
See Notes to the Financial Statements.
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ANNUAL REPORT
AUGUST 31, 2007
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Statements of Changes in Net Assets
For the Years Ended August 31st
2007 2006
--------------------------------
Increase in net assets from operations
Net investment income .......................................... $ 3,307,986 $ 4,080,700
Net realized gain from investments ............................. 25,609,834 129,839,294
Change in unrealized appreciation/(depreciation) ............... 20,971,388 (102,482,282)
--------------------------------
Net increase in net assets resulting from operations ......... 49,889,208 31,437,712
--------------------------------
Distributions
Net investment income .......................................... (2,700,146) (5,250,475)
Net realized capital gains ..................................... (104,913,848) (46,148,914)
--------------------------------
Total distributions to shareholders .......................... (107,613,994) (51,399,389)
--------------------------------
Capital share transactions*
Subscriptions .................................................. 78,894,823 31,713,238
Distributions reinvested ....................................... 100,860,238 47,217,395
Redemptions .................................................... (163,582,559) (341,031,958)
--------------------------------
Total capital share transactions ............................. 16,172,502 (262,101,325)
--------------------------------
Net decrease in net assets ..................................... (41,552,284) (282,063,002)
Net assets at beginning of year ................................ 393,834,188 675,897,190
--------------------------------
Net assets at end of year ...................................... $ 352,281,904 $ 393,834,188
================================
Undistributed net investment income at end of year ............. $ 2,356,265 $ 1,748,633
================================
* - Share information
Subscriptions .................................................. 5,044,683 1,783,813
Distributions reinvested ....................................... 7,148,139 2,844,421
Redemptions .................................................... (10,182,813) (19,202,271)
--------------------------------
Net increase/(decrease) in shares ............................ 2,010,009 (14,574,037)
================================
See Notes to the Financial Statements.
15
AEGIS / VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
The table below sets forth financial data for a share outstanding in the Fund
throughout each year presented:
For the Years Ended August 31st
---------------------------------------------------------------------------
2007 2006 2005 2004 2003
---------------------------------------------------------------------------
Per share data:
Net asset value - beginning of year .................. $ 17.72 $ 18.37 $ 17.56 $ 15.44 $ 12.99
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Income from investment operations:
Net investment income/(loss) ....................... 0.16 0.19 0.08 (0.06) 0.04
Net realized and unrealized gains on
investments ...................................... 2.09 1.02 1.60 2.59 2.92
---------------------------------------------------------------------------
Total from investment operations ................. 2.25 1.21 1.68 2.53 2.96
---------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income .............................. (0.14) (0.19) 0.00 (0.01) (0.02)
Net realized capital gains ......................... (5.30) (1.67) (0.87) (0.40) (0.49)
---------------------------------------------------------------------------
Total distributions .............................. (5.44) (1.86) (0.87) (0.41) (0.51)
---------------------------------------------------------------------------
Net asset value - end of year ........................ $ 14.53 $ 17.72 $ 18.37 $ 17.56 $ 15.44
===========================================================================
Total investment return .............................. 13.61% 7.27% 9.70% 16.60% 23.70%
Ratios (to average net assets)/ supplemental data:
Expenses after reimbursement/recapture and fees
paid indirectly(1) ................................. 1.38% 1.41% 1.41% 1.50% 1.50%
Expenses before reimbursement/recapture and
fees paid directly ................................. 1.38% 1.42% 1.41% 1.51% 1.56%
Net investment income/(loss) ......................... 0.83% 0.83% 0.39% (0.34)% 0.31%
Portfolio turnover ................................... 56% 18% 29% 27% 15%
Net assets at end of year (000's) .................... $ 352,282 $ 393,834 $ 675,897 $ 702,237 $ 294,199
- ----------
(1) Ratio after expense reimbursements/recapture, before fees paid
indirectly, is 1.38% in 2007, 1.42% in 2006, 1.42% in 2005, 1.50% in 2004
and 1.51% in 2003.
See Notes to the Financial Statements.
16
ANNUAL REPORT
AUGUST 31, 2007
- --------------------------------------------------------------------------------
Notes to Financial Statements
August 31, 2007
1. The Organization
Aegis Value Fund, Inc. (the "Fund") is registered under the Investment Company
Act of 1940 as a diversified open-end management company. The Fund was
incorporated October 22, 1997 in the State of Maryland and commenced operations
May 15, 1998. The Fund's principal investment goal is to seek long-term capital
appreciation by investing primarily in common stocks that are believed to be
significantly undervalued relative to the market based on a company's book
value, revenues, or cash flow. Refer to a current Prospectus for additional
information about the Fund.
2. Summary of Significant Accounting Policies
Security valuation. Investments in securities traded on a national securities
exchange (or reported on the NASDAQ National Market) are stated at the last
reported sales price or a market's official close price on the day of
valuation; other securities traded in the over-the-counter market and listed
securities for which no sale was reported on that date are stated at the last
close price, or the average of bid and ask price for NASDAQ National Market
securities. Short-term notes are stated at amortized cost, which is equivalent
to value. Restricted securities, securities for which market quotations are not
readily available, and securities with market quotations the Advisor does not
believe are reflective of market value are valued at fair value as determined
by the Advisor under the supervision of the Board of Directors. The valuation
assigned to fair valued securities for purposes of calculating the Fund's NAV
may differ from the security's most recent closing market price and from the
prices used by other mutual funds to calculate their NAVs.
Federal income and excise taxes. The Fund's policy is to comply with the
requirements of Subchapter M of the Internal Revenue Code that are applicable
to regulated investment companies and to distribute substantially all
investment company taxable income and net capital gain to shareholders in a
manner which results in no tax cost to the Fund. Therefore, no federal income
tax provision is required.
Distributions to shareholders. Distributions to Fund shareholders, which are
determined in accordance with income tax regulations, are recorded on the
ex-dividend date. Distributions of net investment income, if any, are made at
least annually. Net realized gains from investment transactions, if any, will
be distributed to shareholders at least annually. The character of
distributions made during the year from net investment income or net realized
gain may differ from the characterization for federal income tax purposes due
to differences in the recognition of income, expense, and gain/(loss) items for
financial statement and tax purposes. Where appropriate, reclassifications
between net asset accounts are made for such differences that are permanent in
nature.
17
AEGIS / VALUE FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements
August 31, 2007
2. Summary of Significant Accounting Policies - (continued)
Use of estimates. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
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 period. Actual results could differ from those
estimates.
Other. The Fund records security transactions based on the trade date. Gains
and losses on security transactions are determined on a specific identification
basis. Divided income is recognized on the ex-dividend date, and interest
income is recognized on the accrual basis and includes accretion of discounts
and amortization of premiums. Withholding taxes on foreign dividends have been
provided for in accordance with the Fund's understanding of the applicable
country's tax rules and rates.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations, 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.
3. Advisory Fees and Other Transactions with Affiliates
The Fund entered into an investment management and advisory services agreement
(the "Agreement") with Aegis Financial Corporation, (the "Advisor") that
provides for fees to be computed at an annual rate of 1.20% of the Fund's
average daily net assets. The Agreement provides for an expense reimbursement
from the Advisor if the Fund's expenses, exclusive of taxes, interest, fees
incurred in acquiring or disposing of portfolio securities, and extraordinary
expenses, exceed 1.50% of the Fund's average daily net assets. The Agreement
shall remain in force through March 31, 2008. Either party may terminate the
Agreement anytime upon sixty (60) days written notice to the other party.
During the year ended August 31, 2007, there were no Advisor reimbursements.
As part of the expense limitation agreement, the Fund has agreed to repay the
Advisor for amounts waived or reimbursed by the Advisor provided that such
repayment does not cause the Fund's expenses, exclusive of taxes, interest,
fees incurred in acquiring or disposing of portfolio securities, and
extraordinary expenses, to exceed 1.50% and the repayment is made within three
years after the year in which the Advisor incurred the expense. There are no
allowable recapturable amounts as of August 31, 2007.
18
ANNUAL REPORT
AUGUST 31, 2007
- --------------------------------------------------------------------------------
Notes to Financial Statements
August 31, 2007
3. Advisory Fees and Other Transactions with Affiliates - (continued)
Certain officers and directors of the Fund are also officers and directors of
the Advisor. The Fund pays each director not affiliated with the Advisor fees
in cash or Fund shares of $1,000 for each attended board meeting and $500 for
each attended committee meeting.
4. Investment Transactions
Purchases and sales of long-term investment securities (excluding short-term
investments) were $164,240,164 and $217,860,577, respectively, for the year
ended August 31, 2007.
5. Distributions to Shareholders and Tax Components of Net Assets
At August 31, 2007, gross unrealized appreciation and depreciation of
investments, based on cost of federal income tax purposes were as follows:
Cost of investments ................... $ 355,140,890
=============
Gross unrealized appreciation ......... $ 55,468,657
Gross unrealized depreciation ......... $ (56,608,089)
-------------
Net unrealized depreciation ......... $ (1,139,432)
=============
The difference between cost amounts for financial statement and federal income
tax purposes is due primarily to timing differences in recognizing certain
gains and losses in security transactions.
The tax character of distributions paid during the tax years ended August 31,
2007 and 2006 were as follows:
2007 2006
---------------------------
Distribution paid from:
Ordinary income ................. $ 20,610,105 $ 7,737,542
Long-term capital gains ......... 87,003,889 43,661,847
---------------------------
Total distributions ........... $107,613,994 $51,399,389
===========================
For the tax year ended August 31, 2007, the components of net assets on a tax
basis were as follows:
Undistributed ordinary income .................. $ 9,901,609
Undistributed long-term gains .................. 7,715,430
============
Tax accumulated earnings ....................... 17,617,039
Unrealized depreciation on investments ......... (1,139,432)
------------
Total accumulated earnings ................... $ 16,477,607
============
19
AEGIS / VALUE FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements
August 31, 2007
5. Distributions to Shareholders and Tax Components of Net Assets - (continued)
Primarily as a result of the deduction of equalization debits for tax purposes,
on August 31, 2007, accumulated net realized gain was decreased by $3,995,097,
undistributed net investment income was decreased by $208, and additional
paid-in capital was increased by $3,995,305. This reclassification had no
effect on the net assets of the Fund.
6. Investments in Affiliated Companies
An affiliated company is a company in which the Fund has ownership of at least
5% of the voting securities. Companies which are affiliates of the Fund at
year-end are noted in the Fund's schedule of portfolio investments.
Transactions during the year with companies which are or were affiliates are as
follows:
Value Dividends
Beginning Sales Credited Value End
of Period Purchases Proceeds to Income of Period
------------------------------------------------------------------------
Alliance One International, Inc.* ........ $ 27,253,682 $ -- $ 45,527,901 $ -- $ --
Allied Defense Group, Inc.* .............. 4,874,733 1,088,185 -- -- 1,658,930
American Pacific Corp. ................... 4,660,211 -- 77,273 -- 10,352,693
Audiovox Corp. ........................... 15,169,809 376,811 93,277 -- 11,026,767
Bassett Furniture Industries, Inc. ....... 7,360,606 2,981,996 -- 420,712 7,230,179
California First National Bancorp ........ 7,982,576 -- 7,539 262,054 7,736,295
Comstock Homebuilding Companies,
Inc .................................... -- 3,884,924 -- -- 2,845,778
CPAC, Inc.* .............................. 2,100,302 -- 3,187,300 25,793 --
Delta Woodside Industries, Inc.* ......... 68,592 -- 1,343 -- --
Dominion Homes, Inc. ..................... 4,633,000 -- 159,371 -- 1,667,704
Enesco Group, Inc.* ...................... 309,393 -- 19,737 -- --
Handleman Co. ............................ 3,243,838 5,605,583 -- 131,800 5,001,030
MAIR Holdings, Inc. ...................... 6,139,375 -- -- -- 7,640,918
Marsh Supermarkets, Inc.* ................ 2,709,559 -- 2,727,950 -- --
MIIX Group, Inc.* ........................ 6,840 -- 2,260 -- --
Mod-Pac Corp. ............................ 240,617 1,430,940 -- -- 1,570,097
National R.V. Holdings, Inc. ............. 2,224,440 330,683 -- -- 575,996
Peak International Ltd. .................. -- 2,435,620 -- -- 2,177,060
PMA Capital Corp. ........................ 25,897,807 -- 4,503,468 -- 23,120,185
20
ANNUAL REPORT
AUGUST 31, 2007
- --------------------------------------------------------------------------------
Notes to Financial Statements
August 31, 2007
6. Investments in Affiliated Companies - (continued)
Value Dividends
Beginning Sales Credited Value End
of Period Purchases Proceeds to Income of Period
------------------------------------------------------------------------
Pope & Talbot, Inc.* ..................... $ 4,857,050 $ 152,653 $ 280,173 $ -- $ 6,930
Quaker Fabric Corp.* ..................... 2,464,000 86,440 106,140 -- --
Quipp, Inc. .............................. 630,315 -- -- 15,660 352,350
SCPIE Holdings, Inc.* .................... 12,457,677 -- 3,406,708 -- 7,621,107
Sea Containers Ltd.* ..................... 4,885,356 -- 875,946 -- --
Specialty Underwriters' Alliance, Inc. ... 3,016,466 3,312,868 -- -- 5,967,806
Tecumseh Products Co., Class A ........... -- 12,110,807 68,527 -- 17,696,446
Tecumseh Products Co., Class B ........... -- 5,739,922 -- -- 6,173,928
------------------------------------------------------------------------
Total .................................... $143,186,244 $ 39,537,432 $ 61,044,913 $ 856,019 $120,422,199
========================================================================
- ----------
* No longer affiliated as of August 31, 2007.
7. Recent Accounting Pronouncements
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax provisions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is
required for the fiscal years beginning after December 15, 2006 and is to be
applied to all open tax years as of the date of effectiveness. The fund is
required to implement FIN 48 no later than February 29, 2008. Management
continues to evaluate the application of FIN 48 to the Fund, and is not in a
position to estimate the significance of its impact, if any, on the Fund's
financial statements at this time.
In September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157, "Fair Value Measurements." The
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles (GAAP), and expands disclosures
about fair value hierarchy that distinguishes between (1) market participant
assumptions developed based on market data obtained from sources independent of
the reporting entity
21
AEGIS / VALUE FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements
August 31, 2007
7. Recent Accounting Pronouncements - (continued)
(observable inputs) and (2) the reporting entity's own assumptions about market
participant assumptions developed based on the best information available in
the circumstances (unobservable inputs). The statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and is to be applied prospectively as of the beginning of the fiscal year in
which this Statement is initially applied. Management has recently begun to
evaluate the application of the Statement to the Fund, and is not in a position
at this time to evaluate the significance of its impact, if any, on financial
statements of the Fund.
22
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
Aegis Value Fund, Inc.
We have audited the accompanying statement of assets and liabilities of Aegis
Value Fund, Inc., including the schedule of portfolio investments, as of August
31, 2007, and the related statement of operations for the year then ended, the
statement of changes in 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. 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 and financial highlights based on our
audits. The financial highlights for the year ended August 31, 2003 have been
audited by other auditors, whose report dated October 24, 2003 expressed an
unqualified opinion on such financial highlights.
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 audits 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 August 31, 2007 by
correspondence with the custodian and brokers. Where brokers have not replied
to our confirmation requests, we performed other appropriate auditing
procedures. 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 Aegis
Value Fund, Inc. as of August 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 its 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.
/s/ BRIGGS, BUNTING & DOUGHERTY, LLP
------------------------------------
BRIGGS, BUNTING & DOUGHERTY, LLP
Philadelphia, Pennsylvania
October 18, 2007
AEGIS / VALUE FUND
- --------------------------------------------------------------------------------
Directors and Officers
Business Experience and Directorship
Name, Age, and Address Position During the Past 5 Years
- --------------------------------- ------------ ----------------------------------------------------
William S. Berno* (53) President, President and Managing Director of Aegis Finan-
1100 North Glebe Road Director cial Corporation since 1994; President and
Suite 1040 Trustee of the Aegis Funds since 2003; President
Arlington, Virginia 22201 and Director of the Fund since 1997.
Scott L. Barbee* (36) Treasurer, Treasurer and Managing Director of Aegis Finan-
1100 North Glebe Road Director cial Corporation since 1997; Secretary of Aegis
Suite 1040 Financial Corporation since 2007; Treasurer and
Arlington, Virginia 22201 Trustee of the Aegis Funds since 2003; Treasurer
and Director of the Fund since 1997; Secretary of
each Fund since 2006.
David A. Giannini (54) Director Institutional equity sales and research with Scars-
30 Rockefeller Plaza dale Equities since 2006; Institutional equity sales
Suite 4250 and research with Sanders Morris Harris,
New York, NY 10112 1997-2006; Trustee of the Aegis Funds since
2006; Director of the Fund since 2006.
Eskander Matta (37) Director Senior VP of Internet Services Group, Wells
Wells Fargo & Co. Fargo & Co. since 2002; Director of Strategic
550 California Street 2nd Floor Consulting with Cordiant Communications,
San Francisco, California 94111 2001-2002; Trustee of the Aegis Funds since
2003; Director of the Fund since 1997.
V. Scott Soler (38) Director Managing Director of Quantum Energy Partners
Quantum Energy Partners since 2006; Research Analyst and Managing
777 Walker Street Suite 2530 Director of Morgan Stanley 1996-2006.
Houston, Texas 77002
- ----------
* Indicates persons who are affiliated with Aegis Financial Corporation,
the Fund's investment advisor, and are therefore considered to be
"interested persons" under the Investment Company Act of 1940, Section
(2)(a).
The Fund's Statement of Additional Information includes additional information
about Fund directors and is available, without charge, by calling the Fund's
toll-free phone number, (800) 528-3780.
24
ANNUAL REPORT
AUGUST 31, 2007
- --------------------------------------------------------------------------------
Other Information
(Unaudited)
Shareholder Tax Information:
For the year ended August 31, 2007, 26.59% of dividends paid from net
investment income including short-term capital gains, qualifies for the
dividends received deduction available to corporate shareholders of the Fund.
For the year ended August 31, 2007, 30.45% of dividends paid from net
investment income, including short-term capital gains from the Fund is
designated as qualified dividend income.
The Fund hereby designates approximately $91,073,085 as capital gain dividends,
or, if subsequently determined to be different, the net capital gain of such
year, for the purpose of the dividends paid deduction, which includes
$4,069,196 of earnings and profits distributed to shareholders on redemptions.
The Fund may utilize earnings and profits distributed to shareholders on
redemption of shares as part of the dividends paid deduction for income tax
purposes.
Fund Holdings:
The complete schedules of Fund holdings for the second and fourth quarters of
each fiscal year are contained in the Fund's semi-annual and annual shareholder
reports, respectively. The Fund files complete schedules of Fund holdings with
the SEC for the first and third quarters of each fiscal year on Form N-Q within
60 days after the end of the period. Copies of the Fund's Form N-Q are
available without charge, upon request, by contacting the Fund at
1-800-528-3780 and on the SEC's website at http://www.sec.gov. You may also
review and copy Form N-Q at the SEC's Public Reference Room in Washington, D.C.
For more information about the operation of the Public Reference Room, please
call the SEC at 1-800-SEC-0330.
Code of Ethics:
The Fund has adopted a code of ethics applicable to its principal executive
officer and principal financial officer. A copy of this code is available
without charge, by calling the Fund at 800-528-3780.
Proxy Voting:
A description of the policies and procedures that the Fund uses to determine
how to vote proxies relating to portfolio securities is available without
charge, by calling the Fund at 800-528-3780. Information regarding how the Fund
voted proxies, if any, relating to portfolio securities during the most recent
12-month period ended June 30, 2007 is available upon request, without charge,
by calling 800-528-3780. The Fund's proxy voting policies and procedures and
voting record are also available on the Commission's website at
http://www.sec.gov.
25
AEGIS / VALUE FUND
- --------------------------------------------------------------------------------
Other Information - Continued
(Unaudited)
Special Meeting of Shareholders:
A joint special meeting of shareholders of the Fund, along with shareholders of
the Aegis Funds, Inc., was held April 20, 2007 in Washington, DC. At the
meeting, shareholders of the Fund were asked to elect two individuals to the
Fund's Board, and shareholders were also asked to approve the Fund's New
Advisory Agreement.
Mr. David A. Giannini and Mr. V. Scott Soler, nominees to the Board, were
elected by shareholders to the Fund's Board. Mr. Giannini and Mr. Soler
received votes in favor from 20,044,891 and 20,032,021 shares respectively
(including 7,016,630 broker non-votes on behalf of each candidate), zero shares
voted against, and 815,842 and 828,712 shares abstaining respectively.
Mr. William S. Berno, Mr. Scott L. Barbee and Mr. Eskander Matta, elected by
shareholders in 2003, continue to serve as Directors of the Fund.
Shareholders approved the New Advisory Agreement, with 12,779,354 shares voted
in favor, 389,465 shares voted against and 675,284 shares abstaining.
26
============================================
AEGIS / VALUE FUND
c/o UMB Fund Services, Inc.
P.O. Box 2175
Milwaukee, Wisconsin 53201-2175
Phone: (800) 528-3780
www.aegisvaluefund.com
Board of Directors
Scott L. Barbee
William S. Berno
David A. Giannini
Eskander Matta
V. Scott Soler
Officers
William S. Berno, President/Chief Compliance Officer
Scott L. Barbee, Treasurer/Secretary
Investment Advisor
Aegis Financial Corporation
1100 North Glebe Road, Suite 1040
Arlington, Virginia 22201
Custodian
UMB Bank, n.a.
928 Grand Boulevard
Kansas City, Missouri 64106
Independent Auditors
Briggs, Bunting & Dougherty, LLP
Two Penn Center Plaza, Suite 820
Philadelphia, Pennsylvania 19102-1732
Counsel
Seward & Kissel, LLP
1200 G Street, N.W., Suite 350
Washington, D.C. 20005
============================================
Item 2. Code of Ethics
(a)The Registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the Registrant's principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the Registrant or a third party. A copy of the code
is attached.
(b)There have been no amendments, during the period covered by this report, to a
provision of the code of ethics that applies to the Registrants principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the Registrant or a third party, and that relates to
any element of the code of ethics description.
(c)The Registrant has not granted any waivers, including an implicit waiver,
from a provision of the code of ethics that applies to the Registrants principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the Registrant or a third party, that relates to one
or more of the items set forth in paragraph (b) of this item's instructions.
Item 3. Audit Committee Financial Expert
(a)(1) The Registrant's board of directors has determined that the Registrant
does not have an audit committee financial expert serving on its audit
committee.
(a)(2)Not applicable.
(a)(3) The Registrant's board of directors has determined that an audit
committee financial expert is unnecessary at this time. The Registrants Audit
Committee has determined that it will retain the services of an independent
expert when and if such need arises.
Item 4. Principal Accountant Fees and Services
(a) AUDIT FEES: The aggregate fees billed for each of the last two fiscal years
for professional services rendered by the principal accountant for the audit of
the registrant annual financial statements or services that are normally
provided by the accountant in connection with statutory and regulatory filings
or engagements for those fiscal years are $19,000 in 2007 and $18,500 in 2006.
(b) AUDIT-RELATED FEES: The aggregate fees billed in each of the last two fiscal
years for assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant financial
statements and are not reported under paragraph (a) of this Item are NONE.
(c) TAX FEES: The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax compliance,
tax advice, and tax planning are $2,000 in 2007 and $2,000 in 2006.
Tax Fees represent tax compliance services and tax consultation provided in
connection with the preparation of the Registrants federal income tax and excise
tax returns and compliance with IRS regulations.
(d) ALL OTHER FEES: The aggregate fees billed in each of the last two fiscal
years for products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are NONE in
2007 and NONE in 2006.
(e)(1) Disclose the audit committee pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
Audit Committee Pre-Approval Policy. The Audit Committee's policies and
procedures require the pre-approval of all audit and non-audit services provided
to the Registrant by the independent registered public accounting firm. The
Audit Committee's policies and procedures also require pre-approval of all audit
and non-audit services provided to the Registrant's investment adviser and any
entity affiliated with the adviser to the extent that these services are
directly related to the operations or financial reporting of the Registrant. All
services described in this Item 4 performed during 2006 and 2007 were
pre-approved by the Audit Committee.
(e)(2) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) Not applicable
(c) 100%
(d) 100%
(f) The percentage of hours expended on the principal accountant s engagement to
audit the registrant s financial statements for the most recent fiscal year that
were attributed to work performed by persons other than the principal accountant
s full-time, permanent employees was NONE.
(g) The aggregate non-audit fees billed by the registrant s accountant for
services rendered to the registrant, and rendered to the registrant s investment
adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser),
and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant for each of the last
two fiscal years of the registrant was NONE in 2007 and $14,000 in 2006.
(h) The registrant s audit committee of the board of directors has considered
whether the provision of non-audit services that were rendered to the registrant
s investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal accountant s
independence.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
The schedule of investments in securities of unaffiliated issuers is
included as part of the report to shareholders filed under Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
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-3(c) under the Investment Company Act of 1940, as amended)
are effective based on their evaluation of these disclosure controls and
procedures within 90 days of the filing date of this document.
(b) There were no changes in the registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940,
as amended) that occurred during the last fiscal half-year (the registrant
second fiscal half-year in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
Item 12. Exhibits
(a)(1) Code of Ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certification for each principal executive and principal financial
officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR
270.30a-2(a)) (Exhibits (a) and (b)).
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the Investment Company Act of 1940, as amended, that was sent or given during
the period covered by the report by or on behalf of the registrant to 10 or more
persons.
Not applicable.
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) - Filed as an attachment to this filing
(Exhibits (c) and (d)).
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.
Aegis Value Fund, Inc.
By: /s/ William S. Berno
-------------------------------
William S. Berno, President
Date: October 31, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ William S. Berno
-------------------------------
William S. Berno, President
Date: October 31, 2007
By: /s/ Scott L. Barbee
-------------------------------
Scott L. Barbee, Treasurer
Date: October 31, 2007