-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VjoLQ7qyhTeOKSJSPHPM7lwhp9VWhcWoI53SK7m5/vtbiaGAHeNu5pf6ky2milwp xJ/KSmApUngCN+dBhDywhw== /in/edgar/work/20000802/0000891092-00-000658/0000891092-00-000658.txt : 20000921 0000891092-00-000658.hdr.sgml : 20000921 ACCESSION NUMBER: 0000891092-00-000658 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL SECURITIES CORP CENTRAL INDEX KEY: 0000018748 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] IRS NUMBER: 131875970 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-00179 FILM NUMBER: 684103 BUSINESS ADDRESS: STREET 1: 375 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10152 BUSINESS PHONE: 2126883011 MAIL ADDRESS: STREET 1: 375 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10152 FORMER COMPANY: FORMER CONFORMED NAME: TRANS CENTRAL SECURITIES CORP DATE OF NAME CHANGE: 19700722 FORMER COMPANY: FORMER CONFORMED NAME: BUERGER LADET & RADINSKY INC DATE OF NAME CHANGE: 19671026 N-30D 1 0001.txt FORM N-30D ================================================================================ CENTRAL SECURITIES CORPORATION ---------- SEMI-ANNUAL REPORT JUNE 30, 2000 ================================================================================ CENTRAL SECURITIES CORPORATION (Organized on October 1, 1929 as an investment company, registered as such with the Securities and Exchange Commission under the provisions of the Investment Company Act of 1940.) TEN YEAR HISTORICAL DATA
Per Share of Common Stock ------------------------- Distribu- Convertible Divi- tions(B) Preference dends(B) from Total Stock at Net Net from net long-term Net realized Unrealized net liquidation asset investment investment investment investment appreciation Year assets preference value income(A) income gains gains (losses) of investments - ---- ------ ---------- ----- --------- ------ ----- -------------- -------------- 1989 $129,376,703 $10,034,925 $12.24 $ 38,661,339 1990 111,152,013 10,027,050 10.00 $.17 $.20 $ .50* $(2,643,394) 25,940,819 1991 131,639,511 10,022,100 11.87 .14 .14 .56* 7,321,233 43,465,583 1992 165,599,864 10,019,000 14.33 .12 .20 .66 8,304,369 70,586,429 1993 218,868,360 9,960,900 17.90 .14 .18 1.42 16,407,909 111,304,454 1994 226,639,144 9,687,575 17.60 .23 .22 1.39 16,339,601 109,278,788 1995 292,547,559 9,488,350 21.74 .31 .33 1.60 20,112,563 162,016,798 1996 356,685,785 9,102,050 25.64 .27 .28 1.37 18,154,136 214,721,981 1997 434,423,053 9,040,850 29.97 .24 .34 2.08 30,133,125 273,760,444 1998 476,463,575 8,986,125 31.43 .29 .29 1.65 22,908,091 301,750,135 1999 590,655,679 -- 35.05 .26 .26 2.34 43,205,449 394,282,360 6 mos. to June 30, 2000** 671,107,396 -- 39.84 .18 .06 .44 49,004,346 431,361,596
- ---------- A - Excluding gains or losses realized on sale of investments and the dividend requirement on the Convertible Preference Stock, which was redeemed on August 1, 1999. B - Computed on the basis of the Corporation's status as a "regulated investment company" for Federal income tax purposes. * Includes a non-taxable return of capital of $.47 in 1990 and $.11 in 1991. ** Unaudited. The Common Stock is listed on the American Stock Exchange. On June 30, 2000, the market quotations were as follows: Common Stock................................. 35 3/4 high, 35 5/16 low and 35 1/2 last sale [ 2 ] To the Stockholders of CENTRAL SECURITIES CORPORATION: Financial statements for the six months ended June 30, 2000 reviewed by our independent accountants and other pertinent information are submitted herewith. Comparative market values of net assets are as follows:
June 30, 2000 December 31, (Unaudited) 1999 ----------- ---- Net assets ....................................................... $671,107,396 $590,655,679 Net assets per share of Common Stock ............................. 39.84 35.05 Shares of Common Stock outstanding ........................... 16,844,197 16,850,745 Comparative operating results are as follows: Six months ended June 30, ------------------------- 2000 1999 (Unaudited) (Unaudited) ----------- ----------- Net investment income ............................................ $ 2,997,695 $ 2,655,468 Per share of Common Stock .................................... .18* .14* Net realized gain on sale of investments ......................... 49,004,346 13,267,720 Increase in net unrealized appreciation of investments ........... 37,079,236 40,475,558 Increase in net assets resulting from operations ................. 89,081,277 56,398,746
- ---------- * Per-share data are based on the average number of Common shares outstanding during the six-month period and in 1999 are after recognition of the dividend requirement on the Convertible Preference Stock. A dividend of $.50 per share was paid on June 23, 2000 to holders of Common Stock. Stockholders will be sent a notice concerning the taxability of all 2000 distributions in January 2001. During the first six months of 2000 the Corporation repurchased 6,548 shares of its Common Stock at an average price per share of $31.68. These shares were purchased on the American Stock Exchange and in a private transaction with a stockholder. The Corporation may from time to time purchase Common Stock in such amounts and at such prices as the Board of Directors may deem advisable in the best interests of stockholders. Stockholders' inquiries are welcome. CENTRAL SECURITIES CORPORATION WILMOT H. KIDD, President 375 Park Avenue New York, NY 10152 August 2, 2000 [ 3 ] PRINCIPAL PORTFOLIO CHANGES* April 1 to June 30, 2000 (Unaudited) (Common Stock unless specified otherwise)
Number of Shares ----------------------------------------- Held June 30, Purchased Sold 2000 --------- ---- ---- Analog Devices, Inc. ............................... 120,000 810,000 Flextronics, Inc. .................................. 756,700(a) 6,700 750,000 Intel Corporation .................................. 45,000 655,000 Internet SportStations, Inc. ....................... 100,000 -- MGI Pharma, Inc. ................................... 10,000 70,000 Meritor Automotive, Inc. ........................... 670,000 670,000 Nextel Communications, Inc. Class A ................ 140,000(b) 280,000 Novell, Inc. ....................................... 100,000 -- ProBusiness Services, Inc. ......................... 45,000 120,000 The Progressive Corporation ........................ 20,000 20,000 SunGard Data Systems Inc. .......................... 50,000 300,000 Unisys Corporation ................................. 100,000 1,000,000 UNUMProvident Corporation .......................... 39,400 290,600
- ---------- * Excludes stocks listed under "Miscellaneous -- Other investments" in the Statement of Investments. (a) Received in exchange for 470,000 shares of Common Stock of The DII Group Incorporated. (b) Stock split. [ 4 ] STATEMENT OF ASSETS AND LIABILITIES June 30, 2000 (Unaudited)
ASSETS: Investments: General portfolio securities at market value (cost $177,151,976) (Note 1) ............................. $568,068,504 Securities of affiliated companies (cost $3,462,486) (Notes 1, 5 and 6) ....................................... 43,929,421 Short-term investments (cost $59,744,269) .................. 59,722,403 $671,720,328 ------------ Cash, receivables and other assets: Cash ....................................................... 25,441 Dividends receivable ....................................... 121,575 Interest receivable ........................................ 92,031 Prepaid expenses ........................................... 95,425 Office equipment net ....................................... 13,278 347,750 ------------ ------------ Total Assets 672,068,078 LIABILITIES: Payable for securities purchased ............................... 746,675 Accrued expenses and reserves .................................. 214,007 ------------ Total Liabilities ...................................... 960,682 ------------ NET ASSETS ......................................................... $671,107,396 ============ NET ASSETS are represented by: Common Stock at par value, $1.00 per share, authorized 30,000,000 shares; issued 17,060,093 (Note 2) ................ $17,060,093 Surplus: Paid-in .................................................... $177,226,185 Undistributed net gain on sales of investments ............. 48,977,758 Undistributed net investment income ........................ 2,137,782 228,341,725 ------------ Net unrealized appreciation of investments ..................... 431,361,596 Treasury stock, at cost (215,896 shares of Common Stock) (Note 2) ..................................................... (5,656,018) ------------ NET ASSETS ......................................................... $671,107,396 ============ NET ASSET VALUE PER COMMON SHARE ................................... $39.84 ======
See accompanying notes to financial statements and independent accountants' review report. [ 5 ] STATEMENT OF OPERATIONS For the six months ended June 30, 2000 (Unaudited)
INVESTMENT INCOME Income: Dividends .................................................. $ 2,154,935 Interest ................................................... 1,653,613 Miscellaneous income ....................................... 1,157 $ 3,809,705 ----------- Expenses: Investment research ........................................ 166,300 Administration and operations .............................. 198,108 Employees' retirement plans ................................ 7,510 Custodian fees ............................................. 16,023 Franchise and miscellaneous taxes .......................... 71,238 Transfer agent and registrar fees and expenses ............. 19,069 Rent and utilities ......................................... 80,389 Listing, software and sundry fees .......................... 47,605 Legal, auditing and tax fees ............................... 34,257 Stationery, supplies, printing and postage ................. 29,045 Travel and telephone ....................................... 18,011 Directors' fees ............................................ 41,500 Insurance .................................................. 48,962 Publications and miscellaneous ............................. 33,993 812,010 ----------- ----------- Net investment income .......................................... 2,997,695 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from security transactions ................... 49,004,346 Net increase in unrealized appreciation of investments ......... 37,079,236 ----------- Net gain on investments .................................... 86,083,582 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................................... $89,081,277 ===========
See accompanying notes to financial statements and independent accountants' review report. [ 6 ] STATEMENTS OF CHANGES IN NET ASSETS For the six months ended June 30, 2000 and the year ended December 31, 1999
Six months ended June 30, 2000 (Unaudited) 1999 ----------- ---- FROM OPERATIONS: Net investment income ........................................... $ 2,997,695 $ 4,517,918 Net realized gain on investments ................................ 49,004,346 43,205,449 Net increase in unrealized appreciation of investments ...... 37,079,236 92,532,225 ------------ ------------ Increase in net assets resulting from operations ............ 89,081,277 140,255,592 ------------ ------------ DIVIDENDS TO STOCKHOLDERS FROM: Net investment income: Preference Stock ............................................ -- (538,855) Common Stock ................................................ (966,934) (3,982,045) Net realized gain from investment transactions .................. (7,455,165) (37,367,455) ------------ ------------ Decrease in net assets from distributions ................... (8,422,099) (41,888,355) ------------ ------------ FROM CAPITAL SHARE TRANSACTIONS: (Note 2) Distribution to stockholders reinvested in Common Stock ......... -- 20,643,984 Cost of shares of Common Stock repurchased ...................... (207,461) (4,683,567) Conversion: Preference Stock prior to redemption ........................ -- (8,867,550) Into Common Stock ........................................... -- 8,867,550 Other capital transactions ...................................... -- (135,550) ------------ ------------ Increase (decrease) in net assets from capital share transactions ........................................ (207,461) 15,824,867 ------------ ------------ Total increase in net assets ............................. 80,451,717 114,192,104 NET ASSETS: Beginning of period .............................................. 590,655,679 476,463,575 ------------ ------------ End of period (including undistributed net investment income of $2,137,782 and $107,021, respectively) ...................... $671,107,396 $590,655,679 ============ ============
See accompanying notes to financial statements and independent accountants' review report. [ 7 ] STATEMENT OF INVESTMENTS June 30, 2000 (Unaudited) PORTFOLIO SECURITIES 91.2% STOCKS (COMMON UNLESS SPECIFIED OTHERWISE)
Prin. Amt. Market or Shares Value --------- ----- Banking and Finance 11.9% 600,000 The Bank of New York Company, Inc. ........... $ 27,900,000 600,000 Capital One Financial Corporation ............ 26,775,000 300,000 First Union Corporation ...................... 7,500,000 430,000 Household International, Inc. ................ 17,871,875 ------------ 80,046,875 ------------ Business Services 1.7% 200,000 Gartner Group, Inc. Class A(a) ............... 2,400,000 200,000 MSC Industrial Direct Company Class A(a) ..... 4,187,500 120,000 ProBusiness Services, Inc.(a) ................ 3,187,500 170,000 UniFirst Corporation ......................... 1,338,750 ------------ 11,113,750 ------------ Chemicals 2.9% 1,000,000 Hanna (M. A.) Company ........................ 9,000,000 300,000 Rohm and Haas Company ........................ 10,350,000 ------------ 19,350,000 ------------ Computer Software & Services 14.4% 975,000 American Management Systems, Inc.(a) ......... 32,007,422 200,000 Cabletron Systems, Inc.(a) ................... 5,100,000 680,000 Convergys Corporation(a) ..................... 35,275,000 395,000 Peerless Systems Corporation(a) .............. 765,313 300,000 SunGard Data Systems Inc.(a) ................. 9,300,000 1,000,000 Unisys Corporation(a) ........................ 14,562,500 ------------ 97,010,235 ------------ Data Processing 1.5% 555,000 The Reynolds and Reynolds Company Class A .... 10,128,750 ------------ Electronics 32.0% 810,000 Analog Devices, Inc.(a) ...................... 61,560,000 450,000 Arrow Electronics, Inc.(a) ................... 13,950,000 750,000 Flextronics International Ltd.(a) ............ 51,515,625 655,000 Intel Corporation ............................ 87,565,313 ------------ 214,590,938 ------------
[ 8 ]
Prin. Amt. Market or Shares Value --------- ----- Energy 3.6% 100,000 Conoco Inc. Class A .......................... $ 2,200,000 70,000 Kerr-McGee Corporation ....................... 4,125,625 300,000 Murphy Oil Corporation ....................... 17,831,250 ----------- 24,156,875 ----------- Engineering and Construction 0.8% 700,000 Morrison Knudsen Corporation(a) .............. 5,075,000 ----------- Health Care 2.3% 250,000 Impath, Inc.(a) .............................. 13,562,500 70,000 MGI Pharma, Inc.(a) .......................... 2,013,594 ----------- 15,576,094 ----------- Household Products 1.3% 470,000 Church & Dwight Co., Inc. .................... 8,460,000 ----------- Industrial Equipment 0.3% 200,000 JLG Industries, Inc. ......................... 2,375,000 ----------- Insurance 7.7% 240,000 Mutual Risk Management Ltd ................... 4,155,000 70,000 The Plymouth Rock Company, Inc. Class A(b)(c) .............................. 40,460,000 20,000 The Progressive Corporation .................. 1,480,000 290,600 UNUMProvident Corporation .................... 5,830,163 ----------- 51,925,163 ----------- Manufacturing 3.9% 570,000 Brady Corporation Class A .................... 18,525,000 670,000 Meritor Automotive, Inc. ..................... 7,370,000 ----------- 25,895,000 ----------- Paper and Forest Products 0.3% 100,000 Fort James Corporation ....................... 2,312,500 ----------- Telecommunications 6.0% 884,217 Broadwing Inc.(a) ............................ 22,934,377 280,000 Nextel Communications, Inc. Class A(a) ....... 17,132,500 ----------- 40,066,877 ----------- Transportation 0.5% 533,757 Transport Corporation of America, Inc. Class B(a)(b) ........................... 3,469,420 -----------
[ 9 ]
Prin. Amt. Market or Shares Value --------- ----- Miscellaneous 0.1% Grumman Hill Investments, L.P.(a)(c) ............. $ 432,498 5,000 Southeast Publishing Ventures, Inc. Series A Pfd.(a)(b)(c) .................... 0 Steuart Petroleum Company Warrant to Purchase Common Stock(a)(c) ............... 0 Other investments ................................ 12,950 ------------ 445,448 ------------ Total Portfolio Securities (cost $180,614,462) ............... 611,997,925 ------------ SHORT-TERM DEBT INVESTMENTS 8.9% $ 9,928,000 American Express Credit Corp. 6.54% due 7/26/00 ............................... $ 9,883,738 28,405,000 Ford Motor Credit Corp. 6.37% -- 6.45% due 7/06/00 -- 7/12/00 .................... 28,363,201 12,029,000 General Motors Acceptance Corp. 6.52% due 7/19/00 ............................... 11,990,507 9,500,000 U.S. Treasury Note 5.75% due 10/31/00 .............................. 9,484,957 ------------ Total Short-Term Investments (cost $59,744,269) ................ 59,722,403 ------------ Total Investments (cost $240,358,731) (100.1%) ...... 671,720,328 ------------ Liabilities, less cash, receivables and other assets (0.1%) ........... (612,932) ------------ Net Assets (100%) .................... $671,107,396 ============
- ---------- (a) Non-dividend paying. (b) Affiliate as defined in the Investment Company Act of 1940. (c) Valued at estimated fair value. See accompanying notes to financial statements and independent accountants' review report. [ 10 ] NOTES TO FINANCIAL STATEMENTS -- (unaudited) 1. Significant Accounting Policies -- The Corporation is registered under the Investment Company Act of 1940, as amended, as a non-diversified, closed-end management investment company. The following is a summary of the significant accounting policies consistently followed by the Corporation in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. Security Valuation -- Securities are valued at the last sale price on June 30, 2000 or, if unavailable, at the closing bid price. Corporate discount notes are valued at amortized cost, which approximates market value. Securities for which no ready market exists, including The Plymouth Rock Company, Inc. Class A Common Stock, are valued at estimated fair value by the Board of Directors. Federal Income Taxes -- It is the Corporation's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its stockholders. Therefore, no Federal income taxes have been accrued. Use of Estimates -- The preparation of the financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates. Other -- Security transactions are accounted for on the date the securities are purchased or sold, and cost of securities sold is determined by specific identification. Dividend income and distributions to stockholders are recorded on the ex-dividend date. 2. Preference Stock and Common Stock -- The Corporation redeemed its outstanding Preference Stock on August 1, 1999. Pursuant to its fundamental policy regarding the issuance of senior securities, the Corporation may issue senior securities in the future when and if, in the judgment of its directors, such action is deemed advisable. The Corporation repurchased 6,548 shares of its Common Stock in the first six months of 2000 at an average price of $31.68 per share representing an average discount from net asset value of 18.4%. It may from time to time purchase Common Stock in such amounts and at such prices as the Board of Directors may deem advisable in the best interests of the stockholders. Purchases will only be made at less than net asset value per share, thereby increasing the net asset value of shares held by the remaining stockholders. Shares so acquired may be held as treasury stock, available for optional stock distributions, or may be retired. 3. Investment Transactions -- The aggregate cost of securities purchased and the aggregate proceeds of securities sold during the six months ended June 30, 2000, excluding short-term investments, were $50,725,390 and $82,175,082, respectively. As of June 30, 2000, based on cost for Federal income tax purposes, the aggregate gross unrealized appreciation and depreciation for all securities were $452,357,383 and $20,995,787, respectively. See independent accountants' review report. [ 11 ] NOTES TO FINANCIAL STATEMENTS -- continued (unaudited) 4. Operating Expenses -- The aggregate remuneration paid during the six months ended June 30, 2000 to officers and directors amounted to $348,300, of which $40,500 was paid as fees to directors who were not officers. Benefits to employees are provided through a profit sharing retirement plan. Contributions to the plan are made at the discretion of the Board of Directors, and each participant's benefits vest after three years. No contributions were made to the plan for the six months ended June 30, 2000. 5. Affiliates -- The Plymouth Rock Company, Inc., Southeast Publishing Ventures, Inc., and Transport Corporation of America, Inc. are affiliates as defined in the Investment Company Act of 1940. The Corporation received dividends of $204,400 from affiliates during the six months ended June 30, 2000. Unrealized appreciation related to affiliates increased by $3,130,818 for the six months ended June 30, 2000 to $40,466,935. 6. Restricted Securities -- The Corporation from time to time invests in securities the resale of which is restricted. On June 30, 2000 such investments had an aggregate value of $41,937,805, which was equal to 6.2% of the Corporation's net assets. Investments in restricted securities at June 30, 2000, including acquisition dates and cost, were:
Company Shares Security Date Purchased Cost - ------------------------------ ------- ------------------- -------------- ---------- Broadwing Inc. 40,301 Common Stock 11/24/99 $ 3 Grumman Hill Investments, L.P. Limited Partnership 09/11/85 33,975 Interest The Plymouth Rock 70,000 Class A Common 12/15/82 1,500,000 Company, Inc. Stock 06/09/84 699,986 Southeast Publishing 5,000 Series A Pfd. 04/05/89 0 Ventures, Inc. Stock Steuart Petroleum Company Warrant 06/08/93 52,500
In general, the Corporation does not have the right to demand registration of the restricted securities. Unrealized appreciation related to restricted securities increased by $5,728,302 for the six months ended June 30, 2000 to $39,651,341. See independent accountants' review report. [ 12 ] FINANCIAL HIGHLIGHTS
Six Mos. Ended 6/30/00 (Unaudited) 1999 1998 1997 1996 1995 ---------- ---- ---- ---- ---- ---- Per Share Operating Performance Net asset value, beginning of period .. $ 35.05 $ 31.43 $ 29.97 $ 25.64 $ 21.74 $ 17.60 Net investment income ................. .18 .30 .34 .29 .33 .37 Net realized and unrealized gain on securities ....................... 5.11 5.96 3.11 6.51 5.28 5.76 -------- -------- -------- -------- -------- -------- Total from investment operations .................... 5.29 6.26 3.45 6.80 5.61 6.13 Less: Dividends from net investment income* To Preference Stockholders ........ -- .04 .05 .05 .06 .06 To Common Stockholders ............ .06 .26 .29 .34 .28 .33 Distributions from capital gains* To Common Stockholders ............ .44 2.34 1.65 2.08 1.37 1.60 -------- -------- -------- -------- -------- -------- Total distributions ............. .50 2.64 1.99 2.47 1.71 1.99 -------- -------- -------- -------- -------- -------- Net asset value, end of period ........ $ 39.84 $ 35.05 $ 31.43 $ 29.97 $ 25.64 $ 21.74 ======== ======== ======== ======== ======== ======== Per share market value, end of period ....................... $ 35.50 $ 27.25 $ 24.38 $ 29.69 $ 24.13 $ 20.88 Total investment return, market(%) ........................... 31.53+ 22.96 (11.57) 35.60 22.35 45.65 Total investment return, NAV(%) ....... 15.06+ 31.79 13.75 26.08 25.97 34.59 Ratios/Supplemental Data: Net assets, end of period(000) ........ $671,107 $590,656 $476,464 $434,423 $356,686 $292,548 Ratio of expenses to average net assets for Common(%) ................ .25++ .45 .51 .54 .57 .64 Ratio of net investment income to average net assets for Common(%) ........................... .92++ .89 1.09 .99 1.36 1.75 Portfolio turnover rate(%) ............ 8.41+ 12.06 6.21 10.92 9.89 8.27
- ---------- * Computed on the basis of the Corporation's status as a "regulated investment company" for Federal income tax purposes. + Not annualized. ++ Annualized, not necessarily indicative of full year ratio. See accompanying notes to financial statements and independent accountants' review report. [ 13 ] - -------------------------------------------------------------------------------- INDEPENDENT ACCOUNTANTS' REVIEW REPORT TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF CENTRAL SECURITIES CORPORATION We have reviewed the accompanying statement of assets and liabilities, including the statement of investments, of Central Securities Corporation as of June 30, 2000, and the related statements of operations, changes in net assets and financial highlights for the six-month period ended June 30, 2000, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Central Securities Corporation. A review consists principally of inquiries of Company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the statement of changes in net assets for the year ended December 31, 1999, and financial highlights for each of the five years in the period ended December 31, 1999, and in our report dated January 25, 2000 we expressed an unqualified opinion on such statement of changes in net assets and financial highlights. KPMG LLP New York, NY July 26, 2000 - -------------------------------------------------------------------------------- ANNUAL MEETING OF STOCKHOLDERS -- (unaudited) The annual meeting of stockholders of the Corporation was held on March 8, 2000. At the meeting all of the directors of the Corporation were reelected by the following vote of the holders of the Common Stock: Donald G. Calder, 15,553,345 shares in favor, 51,125 shares withheld; Jay R. Inglis, 15,544,156 shares in favor, 60,314 shares withheld; Dudley D. Johnson, 15,552,764 shares in favor, 51,706 shares withheld; Wilmot H. Kidd, 15,552,250 shares in favor, 52,220 shares withheld; and C. Carter Walker, Jr., 15,552,383 shares in favor, 52,087 shares withheld. In addition, the selection of KPMG LLP as independent auditors of the Corporation for the year 2000 was ratified by the following vote of the holders of the Common Stock: 15,523,144 shares in favor, 29,367 shares against, 51,959 shares abstaining. [ 14 ] BOARD OF DIRECTORS DONALD G. CALDER DUDLEY D. JOHNSON President President G. L. Ohrstrom & Co., Inc. Young & Franklin Inc. New York, NY Liverpool, NY JAY R. INGLIS WILMOT H. KIDD Executive Vice President President Holt Corporation New York, NY C. CARTER WALKER, JR. Washington, CT OFFICERS WILMOT H. KIDD, President CHARLES N. EDGERTON, Vice President and Treasurer KAREN E. RILEY, Secretary OFFICE 375 Park Avenue, New York, NY 10152 212-688-3011 www.centralsecurities.com CUSTODIAN UMB Bank, N. A. P.O. Box 419226, Kansas City, MO 64141-6226 TRANSFER AGENT AND REGISTRAR EquiServe, First Chicago Trust Division P.O. Box 2500, Jersey City, NJ 07303-2500 INDEPENDENT AUDITORS KPMG LLP 345 Park Avenue, New York, NY 10154 [ 15 ] -----END PRIVACY-ENHANCED MESSAGE-----