N-CSRS 1 e18388_ncsr.txt SEMI-ANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REOPRT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act File Number 811-179 Name of registrant as specified in charter: Central Securities Corporation Address of principal executive offices: 630 Fifth Avenue Suite 820 New York, New York 10111 Name and address of agent for service: Central Securities Corporation, Wilmot H. Kidd, President 630 Fifth Avenue Suite 820 New York, New York 10111 Registrant's telephone number, including area code: 212-698-2020 Date of fiscal year end: December 31, 2004 Date of reporting period: June 30, 2004 Item 1. Reports to Stockholders. ================================================================================ CENTRAL SECURITIES CORPORATION ---------- SEMI-ANNUAL REPORT JUNE 30, 2004 ================================================================================ 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 ------------------------------------------------------------------------------- Total Convertible Net Net Net realized Unrealized net Preference asset investment Divi- Distribu- investment appreciation Year assets Stock(A) value income(B) dends(C) tions(C) gain of investments ---- ------ -------- ----- ------------------ -------- ---- -------------- 1993 $218,868,360 $9,960,900 $17.90 $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 2000 596,289,086 -- 32.94 .32 .32 4.03 65,921,671 363,263,634 2001 539,839,060 -- 28.54 .18 .22 1.58* 13,662,612 304,887,640 2002 361,942,568 -- 18.72 .14 .14 1.11 22,869,274 119,501,484 2003 478,959,218 -- 24.32 .09 .11 1.29 24,761,313 229,388,141 Six mos. to June 30, 2004** 526,780,137 -- 26.87 .08 .05 .10 23,778,997 256,585,611
---------- A - At liquidation preference. B - 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. C - Computed on the basis of the Corporation's status as a "regulated investment company" for Federal income tax purposes. Dividends are from undistributed net investment income. Distributions are from long-term investment gains. * Includes a non-taxable return of capital of $.55. ** Unaudited. The Common Stock is listed on the American Stock Exchange. On June 30, 2004 the market quotations were as follows: Common Stock................................ $22.87 low, $23.25 high and last sale [2] To the Stockholders of CENTRAL SECURITIES CORPORATION: Financial statements for the six months ended June 30, 2004 reviewed by our independent accountants and other pertinent information are submitted herewith. Comparative net assets are as follows: June 30, 2004 December 31, (Unaudited) 2003 ---------- ------------ Net assets..................................... $526,780,137 $478,959,218 Net assets per share of Common Stock........... 26.87 24.32 Shares of Common Stock outstanding......... 19,606,477 19,692,777 Comparative operating results are as follows: Six months ended June 30, ----------------------------- 2004 2003 (Unaudited) (Unaudited) ----------- ----------- Net investment income............................ $ 1,648,747 $ 1,325,898 Per share of Common Stock.................... .08* .07* Net realized gain on sale of investments......... 23,778,997 15,999,401 Increase in net unrealized appreciation of investments................................. 27,197,470 48,583,044 Increase in net assets resulting from operations..................................... 52,625,214 65,908,343 ---------- * Per-share data are based on the average number of Common shares outstanding. A dividend of $.15 per share was paid on June 25, 2004 to holders of Common Stock. Stockholders will be sent a notice concerning the taxability of all 2004 distributions in January 2005. During the first six months of 2004 the Corporation repurchased 86,300 shares of its Common Stock at an average price per share of $21.59. These shares were purchased on the American Stock Exchange. 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 630 Fifth Avenue New York, NY 10111 July 28, 2004 [3] TEN LARGEST INVESTMENTS June 30, 2004 (Unaudited)
% of Year First Cost Value Net Assets Acquired ----- ----- --------- -------- (millions) The Plymouth Rock Company, Inc................. $ 2.2 $93.0 17.7% 1982 Intel Corporation.............................. .4 27.0 5.1 1986 Capital One Financial Corporation.............. 1.8 25.0 4.7 1994 Brady Corporation.............................. 2.3 23.7 4.5 1984 Murphy Oil Corporation......................... 3.1 22.1 4.2 1974 Analog Devices, Inc............................ .5 20.2 3.8 1987 Flextronics International Ltd.................. 3.8 19.3 3.7 1996 Convergys Corporation.......................... 22.1 18.8 3.6 1998 Unisys Corporation............................. 11.9 15.3 2.9 1999 SunGard Data Systems Inc....................... 6.4 14.8 2.8 1999
PRINCIPAL PORTFOLIO CHANGES April 1 to June 30, 2004 (Unaudited) (Common Stock unless specified otherwise)
Number of Shares ------------------------------------------ Held June 30, Purchased Sold 2004 --------- ---- ---- Affymetrix, Inc................................... 100,000 -- American Management Systems, Inc.................. 364,502 -- Apple Computer Inc................................ 100,000 -- Capital One Financial Corporation................. 5,000 365,000 Ceridian Corporation.............................. 110,000 210,000 Fifth Third Bancorp............................... 200,000 200,000 Hospira, Inc...................................... 10,000* 10,000 -- Laboratory Corporation of America Holdings........ 10,000 100,000 Marsh & McLennan Companies, Inc................... 100,000 -- Solectron Corporation............................. 200,000 1,000,000 Unisys Corporation................................ 50,000 1,100,000 Unocal Corporation................................ 100,000 250,000 Wind River Systems, Inc........................... 60,000 440,000
---------- * Shares received in a distribution from Abbott Laboratories. [4] STATEMENT OF ASSETS AND LIABILITIES June 30, 2004 (Unaudited)
ASSETS: Investments: General portfolio securities at market value (cost $206,612,835) (Note 1).............................. $369,457,486 Securities of affiliated companies (cost $3,462,486) (Notes 1, 5 and 6)........................................ 97,203,446 Short-term investments (cost $59,120,200)................... 59,120,200 $525,781,132 ----------- Cash, receivables and other assets: Cash and dividends receivable............................... 540,978 Office equipment and leasehold improvements, net............ 553,964 Other assets................................................ 175,802 1,270,744 ----------- ----------- Total Assets............................................ 527,051,876 LIABILITIES: Payable, accrued expenses and reserves.......................... 271,739 ----------- Total Liabilities....................................... 271,739 ----------- NET ASSETS.......................................................... $526,780,137 =========== NET ASSETS are represented by: Common Stock $1 par value: authorized 30,000,000 shares; issued 19,692,777 (Note 2)................. $19,692,777 Surplus: Paid-in..................................................... $227,838,315 Undistributed net gain on sales of investments.............. 23,776,213 Undistributed net investment income......................... 750,544 252,365,072 ----------- Net unrealized appreciation of investments...................... 256,585,611 Treasury stock, at cost (86,300 shares of Common Stock) (Note 2)...................................................... (1,863,323) ----------- NET ASSETS.......................................................... $526,780,137 =========== NET ASSET VALUE PER COMMON SHARE (19,606,477 shares outstanding)................................... $26.87 ======
See accompanying notes to financial statements and independent accountants' review report. [5] STATEMENT OF OPERATIONS For the six months ended June 30, 2004 (Unaudited) INVESTMENT INCOME Income: Dividends (net of foreign withholding taxes of $4,787).................................... $ 2,565,267 Interest........................................ 227,712 $2,792,979 ---------- Expenses: Administration and operations................... 263,099 Investment research............................. 253,625 Rent and utilities.............................. 170,036 Franchise and miscellaneous taxes............... 90,740 Insurance....................................... 62,785 Listing, software and sundry fees............... 57,155 Directors' fees................................. 50,000 Stationery, supplies, printing and postage...... 30,737 Legal, auditing and tax fees.................... 25,392 Publications.................................... 24,463 Transfer agent and registrar fees and expenses.. 23,579 Travel and telephone............................ 20,749 Custodian fees.................................. 14,287 Employees' retirement plans..................... 7,250 Miscellaneous................................... 50,335 1,144,232 ---------- ---------- Net investment income............................... 1,648,747 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from security transactions........ 23,778,997 Net increase in unrealized appreciation of investments.................................... 27,197,470 ---------- Net gain on investments......................... 50,976,467 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................................ $52,625,214 ========== 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, 2004 and the year ended December 31, 2003
Six months ended June 30, Year ended 2004 December 31, (Unaudited) 2003 --------- ---- FROM OPERATIONS: Net investment income........................................... $ 1,648,747 $ 1,740,024 Net realized gain on investments................................ 23,778,997 24,761,313 Net increase in unrealized appreciation of investments...... 27,197,470 109,886,657 ----------- ----------- Increase in net assets resulting from operations............ 52,625,214 136,387,994 ----------- ----------- DISTRIBUTIONS TO STOCKHOLDERS FROM: Net investment income........................................... (938,275) (2,050,627) Net realized gain from investment transactions.................. (2,002,697) (24,612,727) ----------- ----------- Decrease in net assets from distributions................... (2,940,972) (26,663,354) ----------- ----------- FROM CAPITAL SHARE TRANSACTIONS: (Note 2) Distribution to stockholders reinvested in Common Stock......... -- 12,692,986 Cost of shares of Common Stock repurchased...................... (1,863,323) (5,400,976) ----------- ----------- Increase (decrease) in net assets from capital share transactions........................................ (1,863,323) 7,292,010 ----------- ----------- Total increase in net assets............................ 47,820,919 117,016,650 NET ASSETS: Beginning of period............................................. 478,959,218 361,942,568 ----------- ----------- End of period (including undistributed net investment income of $750,544 and $40,072, respectively)........................ $526,780,137 $478,959,218 =========== ===========
See accompanying notes to financial statements and independent accountants' review report. [7] STATEMENT OF INVESTMENTS June 30, 2004 (Unaudited) PORTFOLIO SECURITIES 88.6% STOCKS (COMMON UNLESS SPECIFIED OTHERWISE) Prin.Amt. or Shares Value -------- ----- Banking and Finance 9.6% 500,000 The Bank of New York Company, Inc............. $ 14,740,000 365,000 Capital One Financial Corporation............. 24,958,700 200,000 Fifth Third Bancorp........................... 10,756,000 ------------ 50,454,700 ------------ Chemicals 3.1% 1,372,400 PolyOne Corporation(a)........................ 10,210,656 150,000 Rohm and Haas Company......................... 6,237,000 ------------ 16,447,656 ------------ Communications 0.8% 1,000,000 Cincinnati Bell Inc.(a)....................... 4,440,000 ------------ Electronics 15.1% 430,000 Analog Devices, Inc........................... 20,244,400 1,210,000 Flextronics International Ltd.(a)............. 19,299,500 180,000 Ingram Micro Inc. Class A(a).................. 2,604,600 980,000 Intel Corporation............................. 27,048,000 200,000 Motorola, Inc................................. 3,650,000 1,000,000 Solectron Corporation(a)...................... 6,470,000 ------------ 79,316,500 ------------ Energy 9.6% 160,000 EnCana Corporation............................ 6,905,600 220,000 Kerr-McGee Corporation........................ 11,829,400 300,000 Murphy Oil Corporation........................ 22,110,000 250,000 Unocal Corporation............................ 9,500,000 ------------ 50,345,000 ------------ Health Care 4.7% 100,000 Abbott Laboratories........................... 4,076,000 490,000 Impath Inc.(a)................................ 2,695,000 100,000 Laboratory Corporation of America Holdings(a). 3,970,000 100,000 Merck & Co. Inc............................... 4,750,000 450,000 Schering-Plough Corporation................... 8,316,000 150,000 Vical Inc.(a)................................. 868,500 ------------ 24,675,500 ------------ Information Technology Services 14.5% 400,000 Accenture Ltd.(a)............................. 10,992,000 210,000 Ceridian Corporation(a)....................... 4,725,000 1,220,000 Convergys Corporation(a)...................... 18,788,000 570,000 SunGard Data Systems Inc. (a)................. 14,820,000 1,000,000 TriZetto Group, Inc.(a)....................... 6,660,000 1,100,000 Unisys Corporation(a)......................... 15,268,000 440,000 Wind River Systems, Inc.(a)................... 5,174,400 ------------ 76,427,400 ------------ [8] Prin.Amt. or Shares Value -------- ----- Insurance 20.5% 150,000 American International Group, Inc............. $ 10,692,000 100,000 Arch Capital Group Ltd.(a).................... 3,988,000 10,000 Erie Indemnity Co. Class A.................... 467,800 70,000 The Plymouth Rock Company, Inc. Class A(b)(c)................................. 93,030,000 ------------ 108,177,800 ------------ Manufacturing 9.4% 600,000 ArvinMeritor, Inc............................. 11,742,000 515,000 Brady Corporation Class A..................... 23,741,500 170,000 Dover Corporation............................. 7,157,000 124,700 Roper Industries, Inc......................... 7,095,430 ------------ 49,735,930 ------------ Retail Trade 0.5% 100,000 CarMax Inc.(a)................................ 2,187,000 Grumman Hill Investments, L.P.(a)(c).......... 280,000 ------------ 2,467,000 ------------ Transportation 0.8% 533,757 Transport Corporation of America, Inc. Class B(a)(b)............................... 4,173,446 ------------ Total Portfolio Securities (cost $210,075,321)..................... 466,660,932 ------------ SHORT-TERM INVESTMENTS 11.2% Commercial Paper 6.5% $25,827,000 American Express Credit Corp. 0.8809% - 1.0011% due 7/7/04 - 8/4/04....... 25,813,446 8,418,000 General Motors Acceptance Corp. 1.0512% - 1.0813% due 7/14/04............... 8,414,766 ------------ 34,228,212 ------------ U.S. Treasury Bills 4.7% 24,957,000 U.S. Treasury Bills 0.8859% - 1.2201% due 9/23/04 - 10/7/04..... 24,891,988 ------------ Total Short-Term Investments (cost $59,120,200)...................... 59,120,200 ------------ Total Investments......................... 525,781,132 Cash, receivables and other assets less liabilities (0.2%)................. 999,005 ------------ Net Assets (100%)......................... $526,780,137 ============ ---------- (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. [9] 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 accounting principles generally accepted in the United States of America. Security Valuation -- Securities are valued at the last sale price 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 accounting principles generally accepted in the United States of America 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. Common Stock -- The Corporation repurchased 86,300 shares of its Common Stock in the first six months of 2004 at an average price of $21.59 per share, representing an average discount from net asset value of 13.59%. 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, used in optional stock distributions, or retired. 3. Investment Transactions -- The aggregate cost of securities purchased and the aggregate proceeds of securities sold during the six months ended June 30, 2004 (excluding short-term investments), were $35,829,049 and $63,659,330, respectively. As of June 30, 2004, based on cost for Federal income tax purposes, the aggregate gross unrealized appreciation and depreciation for all securities were $272,872,264 and $16,286,653, respectively. 4. Operating Expenses -- The aggregate remuneration paid during the six months ended June 30, 2004 to officers and directors amounted to $552,500, of which $50,000 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, 2004. [10] NOTES TO FINANCIAL STATEMENTS -- continued (unaudited) 5. Affiliates -- The Plymouth Rock Company, Inc. and Transport Corporation of America, Inc. are affiliates as defined in the Investment Company Act of 1940. The Corporation received dividends of $1,066,100 from affiliates during the six months ended June 30, 2004. Unrealized appreciation related to affiliates increased by $34,393,708 for the six months ended June 30, 2004 to $93,740,960. 6. Restricted Securities -- The Corporation from time to time invests in securities the resale of which is restricted. On June 30, 2004 such investments had an aggregate value of $93,310,000, which was equal to 17.7% of the Corporation's net assets. Investments in restricted securities at June 30, 2004, including acquisition dates and cost, were:
Company Shares Security Date Purchased Cost ---------------------------------- ---------- ------------------- ------------- ---------- Grumman Hill Investments, L.P. Limited Partnership 9/11/85 $ 18,190 Interest The Plymouth Rock 70,000 Class A Common 12/15/82 1,500,000 Company, Inc. Stock 6/9/84 699,986
The Corporation does not have the right to demand registration of the restricted securities. Unrealized appreciation related to restricted securities increased by $34,227,572 for the six months ended June 30, 2004 to $91,091,824. 7. Operating Lease Commitment -- The Corporation has entered into an operating lease for office space which expires in 2014 and provides for future minimum rental payments in the aggregate amount of approximately $3.3 million. The lease agreement contains escalation clauses relating to operating costs and real property taxes. Future minimum rental commitments under the lease for the next five years are $157,121 for 2004 and $314,241 for 2005 through 2008. [11] FINANCIAL HIGHLIGHTS
Six Mos. Ended June 30, 2004 (Unaudited) 2003 2002 2001 2000 1999 ---------- ---- ---- ---- ---- ----- Per Share Operating Performance Net asset value, beginning of period $ 24.32 $ 18.72 $ 28.54 $ 32.94 $ 35.05 $ 31.43 Net investment income*............. .08 .09 .14 .18 .32 .30 Net realized and unrealized gain (loss) on securities............. 2.62 6.91 (8.71) (2.78) 1.92 5.96 -------- -------- -------- -------- -------- -------- Total from investment operations................. 2.70 7.00 (8.57) (2.60) 2.24 6.26 Less: Dividends from net investment income** To Preference Stockholders..... -- -- -- -- -- .04 To Common Stockholders......... .05 .11 .14 .22 .32 .26 Distributions from capital gains** To Common Stockholders......... .10 1.29 1.11 1.03 4.03 2.34 Return of Capital** To Common Stockholders......... -- -- -- .55 -- -- -------- -------- -------- -------- -------- -------- Total distributions.......... .15 1.40 1.25 1.80 4.35 2.64 -------- -------- -------- -------- -------- -------- Net asset value, end of period..... $ 26.87 $ 24.32 $ 18.72 $ 28.54 $ 32.94 $ 35.05 ======== ======== ======== ======== ======== ======== Per share market value, end of period.................... $ 23.25 $ 20.89 $ 16.28 $ 25.31 $ 28.25 $ 27.25 Total investment return, market(%)........................ 11.98+ 36.22 (31.23) (2.42) 17.75 22.96 Total investment return, NAV(%).... 11.11+ 39.32 (29.43) (6.54) 7.02 31.79 Ratios/Supplemental Data: Net assets, end of period(000)..... $526,780 $478,959 $361,943 $539,839 $596,289 $590,656 Ratio of expenses to average net assets for Common(%)............. .46++ .56 .50 .45 .38 .45 Ratio of net investment income to average net assets for Common(%)........................ .45++ .42 .57 .60 .83 .89 Portfolio turnover rate(%)......... 8.07 12.90 19.50 10.32 13.54 12.06
---------- * Per-share data are based on the average number of Common Shares outstanding during the period. ** 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. [12] -------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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, 2004, and the related statements of operations, changes in net assets and financial highlights for the six-month period ended June 30, 2004. These financial statements are the responsibility of the management of Central Securities Corporation. We have conducted our review in accordance with standards established by the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), 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 financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles. We have previously audited, in accordance with standards established by the Public Company Accounting Oversight Board (United States), the statement of changes in net assets for the year ended December 31, 2003, and financial highlights for each of the five years in the period ended December 31, 2003, and in our report dated January 28, 2004 we expressed an unqualified opinion on those financial statements. KPMG LLP New York, NY July 28, 2004 -------------------------------------------------------------------------------- [13] ANNUAL MEETING OF STOCKHOLDERS The annual meeting of stockholders of the Corporation was held on March 10, 2004. 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, 18,188,305 shares in favor, 255,130 shares withheld; Jay R. Inglis, 18,179,159 shares in favor, 264,276 shares withheld; Dudley D. Johnson, 18,193,350 shares in favor, 250,085 shares withheld; Wilmot H. Kidd, 18,042,833 shares in favor, 400,602 shares withheld; and C. Carter Walker, Jr., 18,174,980 shares in favor, 268,455 shares withheld. In addition, the selection of KPMG LLP as independent auditors of the Corporation for the year 2004 was ratified by the following vote of the holders of the Common Stock: 18,177,212 shares in favor, 232,604 shares against, 33,619 shares abstaining. PROXY VOTING POLICIES AND PROCEDURES The policies and procedures used by the Corporation to determine how to vote proxies relating to portfolio securities are available: (1) without charge, upon request, by calling us at our toll-free telephone number (1-866-593-2507), (2) on the Corporation's website at www.centralsecurities.com and (3) on the Securities and Exchange Commission's website at www.sec.gov in the Corporation's most recent Form N-CSR filing. [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 National Marine Underwriters, Inc. New York, NY C. CARTER WALKER, JR. Washington, CT OFFICERS WILMOT H. KIDD, President CHARLES N. EDGERTON, Vice President and Treasurer MARLENE A. KRUMHOLZ, Secretary OFFICE 630 Fifth Avenue, New York, NY 10111 212-698-2020 866-593-2507 (toll free) www.centralsecurities.com CUSTODIAN UMB Bank, N. A. P.O. Box 419226, Kansas City, MO 64141-6226 TRANSFER AGENT AND REGISTRAR EquiServe Trust Company P.O. Box 43069, Providence, RI 02940-3069 781-575-2724 www.equiserve.com INDEPENDENT AUDITORS KPMG LLP 757 Third Avenue, New York, NY 10017 [15] Item 2. Code of Ethics. The information required by this Item is only required in an annual report on this Form N-CSR. Item 3. Audit Committee Financial Experts. The information required by this Item is only required in an annual report on this Form N-CSR. Item 4. Principal Accountant Fees and Services. The information required by this Item is only required in an annual report on this Form N-CSR. Item 5. Audit Committee of Listed Registrants. The information required by this Item is only required in an annual report on this Form N-CSR. Item 6. Schedule of Investments. Schedule is included as a part of the report to shareholders filed under Item 1 of this Form. Item 7. Disclose Proxy Voting Policies and Procedures for Closed-End Management Companies. The information required by this Item is only required in an annual report on this Form N-CSR. Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
---------------------------------------------------------------------------------------------------------------- (d) Maximum Number (or (c) Total Number of Approximate Dollar (a) Total Shares (or Units) Value) of Shares (or Period Number of (b) Average Purchased as Part of Units) that May Yet Be Shares (or Price Paid per Publicly Announced Purchased Under the Units) Purchased Share (or Unit) Plans or Programs Plans or Programs ---------------------------------------------------------------------------------------------------------------- Month #1 (January 1 14,300 $21.64 NA NA through January 31) ---------------------------------------------------------------------------------------------------------------- Month #2 (February 1 23,100 $21.79 NA NA through February 29) ---------------------------------------------------------------------------------------------------------------- Month #3 (March 1 through 24,100 $21.46 NA NA March 31) ---------------------------------------------------------------------------------------------------------------- Month #4 (April 1 through 17,600 $21.85 NA NA April 30) ---------------------------------------------------------------------------------------------------------------- Month #5 (May 1 through 7,200 $20.66 NA NA May 31) ---------------------------------------------------------------------------------------------------------------- Month #6 (June 1 through 0 $0.00 NA NA June 30) ---------------------------------------------------------------------------------------------------------------- Total 86,300 $21.59 NA NA ----------------------------------------------------------------------------------------------------------------
All shares purchased were made in open market transactions as authorized by the Board of Directors. Item 9. Submission of Matters to a Vote of Security Holders. There have been no changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors since such procedures were last described in the Corporation's proxy statement dated February 5, 2004. Item 10. Controls and Procedures. (a) The Principal Executive Officer and Principal Financial Officer of Central Securities Corporation (the "Corporation") have concluded that the Corporation's Disclosure Controls and Procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. (b) There have been no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 that occurred during the last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Corporation's internal control over financial reporting. Item 11. Exhibits. (a) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit. The information required by this Item is only required in an annual report on this Form N-CSR. (b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act. Attached hereto. (c) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not Applicable. 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. Central Securities Corporation By: /s/ Wilmot H. Kidd ------------------------ Wilmot H. Kidd President August 10, 2004 Date 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 capabilities and on the dates indicated. By: /s/ Wilmot H. Kidd ------------------------ Wilmot H. Kidd President August 10, 2004 Date By: /s/ Charles N. Edgerton ------------------------ Charles N. Edgerton Treasurer August 10, 2004 Date