-----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, FKwAo2KOpsbY8vnH0xcGrpl0yOV4YWJER58/BvnCkip+bVzOUEmXMPLFVMAtORrx PCK46Ws9yQ/K0N2jKAQOlA== 0000950144-04-008686.txt : 20040827 0000950144-04-008686.hdr.sgml : 20040827 20040827144602 ACCESSION NUMBER: 0000950144-04-008686 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040827 DATE AS OF CHANGE: 20040827 EFFECTIVENESS DATE: 20040827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST CAROLINA INVESTORS INC CENTRAL INDEX KEY: 0000811040 STANDARD INDUSTRIAL CLASSIFICATION: LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES) [6552] IRS NUMBER: 561005066 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-08942 FILM NUMBER: 041002168 BUSINESS ADDRESS: STREET 1: 9347A FOUNDERS STREET CITY: FORT MILL STATE: SC ZIP: 29708 BUSINESS PHONE: 8028020890 MAIL ADDRESS: STREET 1: P O BOX 1827 CITY: FORT MILL STATE: SC ZIP: 29716 N-CSRS 1 g90421nvcsrs.txt FIRST CAROLINA INVESTORS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF RETGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number : 811-8942 First Carolina Investors, Inc ------------------------------------------------------- (Exact name of registrant as specified in charter) 9374 A Founders Street Fort Mill, South Carolina 29708 ------------------------------------------------------ (Address of principal executive offices) Brent D. Baird First Carolina Investors, Inc. 9374 A Founders Street Fort Mill, South Carolina 29708 ------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: 803-802-0890 Date of fiscal year end: December 31 Date of reporting period: June 30, 2004 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-l). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden to Secretary, Securities and Exchange Commission, 450 Fifth Street NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S. C. ss. 3507. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. Item 1. Report to Stockholders. First Carolina Investors, Inc. Report to Shareholders at June 30, 2004 is attached to the filing of N-CSR. FIRST CAROLINA INVESTORS, INC. REPORT TO SHAREHOLDERS JUNE 30, 2004 FIRST CAROLINA INVESTORS, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 2004 AND 2003 (UNAUDITED)
2004 2003 ----------- ------------ ASSETS Investments in securities, at value (cost of $42,894,670 in 2004 and $64,831,824 in 2003)............................. $68,051,556 $ 84,018,472 Short term money market investments......................... 27,741,536 19,158,882 Accrued dividend and interest receivable.................... 90,136 569,427 Amount due from sale of security............................ 338,606 -- Other assets................................................ 2,245,736 2,333,455 ----------- ------------ Total assets...................................... $98,467,570 $106,080,236 ----------- ------------ LIABILITIES Accounts payable and accrued liabilities.................... $ 2,320,534 $ 2,703,614 Federal and state income taxes payable...................... 3,955,171 4,723,742 Deferred income taxes payable............................... 8,466,253 3,864,221 ----------- ------------ Total liabilities................................. 14,741,958 11,291,577 ----------- ------------ Net Assets.................................................. $83,725,612 $ 94,788,659 =========== ============ Net assets per share (3,500,000 no par value common shares authorized, 886,679 shares issued, 886,579 and 892,279 shares outstanding in 2004 and 2003, respectively)........ $ 94.44 $ 106.23 =========== ============
See accompanying notes to consolidated financial statements. The consolidated financial statements should be read in conjunction with the 2003 Annual Report. 1 FIRST CAROLINA INVESTORS, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (UNAUDITED)
2004 2003 ----------- ----------- INCOME Dividends................................................... $ 519,175 $ 465,831 Interest.................................................... 1,364,897 4,289,325 Other....................................................... 400 86,523 ----------- ----------- Total income...................................... 1,884,472 4,841,679 ----------- ----------- EXPENSES General and administrative.................................. 42,359 43,066 Director fees and expenses.................................. 105,159 42,651 Professional fees........................................... 77,322 209,097 State and local taxes....................................... 7,020 49,500 Other....................................................... 11,062 15,714 ----------- ----------- Total expenses.................................... 242,922 360,028 ----------- ----------- Earnings before income taxes and realized and unrealized appreciation on investments............................... 1,641,550 4,481,651 Provision for income taxes.................................. (513,000) (1,663,000) ----------- ----------- Investment income, net...................................... 1,128,550 2,818,651 Gain realized on investments in other companies (net of income tax provision of $1,372,000 in 2004 and $1,887,000 in 2003).................................................. 2,236,167 2,945,322 Change in unrealized appreciation (depreciation) of investments for the period, net of deferred taxes......... (1,504,880) 1,975,166 ----------- ----------- Net increase in net assets resulting from operations..................................... $ 1,859,837 $ 7,739,139 =========== ===========
See accompanying notes to consolidated financial statements. The consolidated financial statements should be read in conjunction with the 2003 Annual Report. 2 FIRST CAROLINA INVESTORS, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (UNAUDITED)
2004 2003 ----------- ----------- Increase in net assets from operations Investment income, net.................................... $ 1,128,550 $ 2,818,651 Realized gain on investments, net......................... 2,236,167 2,945,322 Change in unrealized appreciation (depreciation), net..... (1,504,880) 1,975,166 ----------- ----------- Net increase in net assets resulting from operations... 1,859,837 7,739,139 Distributions to shareholders of $1.00 per share from investment income, net.................................... (886,679) (908,293) Capital share transactions.................................. -- (1,648,772) ----------- ----------- Total increase......................................... 973,158 5,182,074 Net assets Beginning of period....................................... 82,752,454 89,606,585 ----------- ----------- End of period............................................. $83,725,612 $94,788,659 =========== ===========
See accompanying notes to consolidated financial statements. The consolidated financial statements should be read in conjunction with the 2003 Annual Report. 3 FIRST CAROLINA INVESTORS, INC. & SUBSIDIARIES INVESTMENTS IN SECURITIES JUNE 30, 2004 AND 2003 (UNAUDITED)
2004 2003 ------------------------- ------------------------- PRINCIPAL PRINCIPAL AMOUNT OR AMOUNT OR NO. SHARES FAIR VALUE NO. SHARES FAIR VALUE ----------- ----------- ----------- ----------- Common and Preferred Stocks -- 78.1% in 2004 and 53.7% in 2003 Financial Services -- 64.2% in 2004 and 67.2% in 2003 Aon Corporation........................................... 100,000 $ 2,847,000 -- $ -- Coast Financial Holdings, Inc............................. 7,148 104,361 100,000 1,100,000 Evans Bancorp, Inc........................................ 67,257 1,599,371 51,280 1,123,032 Finova Group, Inc......................................... 2,000,000 300,000 -- -- Keycorp................................................... 100,000 2,989,000 -- -- M & T Bank Corporation.................................... 225,000 19,642,500 250,000 21,055,000 Mercantile Bankshares Corporation......................... 70,000 3,277,400 114,750 4,515,412 Merchants Group, Inc...................................... 121,100 3,118,325 122,100 2,496,945 Ravensource Income Fund................................... 48,600 227,448 -- -- Manufacturing -- 18.9% in 2004 and 11.1% in 2003 Allied Healthcare Products, Inc........................... 850,000 4,369,000 850,000 3,034,500 Amcast Industrial Corporation............................. 1,087,900 3,730,629 1,087,900 1,044,384 Halterm Income Fund....................................... 123,300 470,143 -- -- Sun-Rype Products Ltd..................................... 177,200 1,523,388 177,200 924,807 Services -- 6.6% in 2004 and 8.4% in 2003 Barrister Global Services Network, Inc.................... 159,810 1,598 159,810 63,924 Call-Net Enterprises, Inc................................. -- -- 111,889 290,911 Ecology & Environment, Inc................................ 369,200 3,507,400 399,300 3,433,980 High Falls Brewery Company, LLC........................... 193,900 -- 185,000 -- Diversified -- 10.3% in 2004 and 13.3% in 2003 Alderwoods Group, Inc..................................... 265,745 3,242,089 598,088 3,199,771 First Union Real Estate Equity & Mortgage Investments Preferred Conv Ser A.................................... 91,000 2,214,030 134,600 2,806,410 ----------- ----------- Total Common and Preferred Stocks -- (cost of $33,303,839 in 2004 and $34,353,748 in 2003)............................. $53,163,682 $45,089,076 ----------- ----------- Debentures -- 21.9% in 2004 and 46.3% in 2003 Alderwoods Group, Inc. 11% Senior Secured Notes due 2007.................................................... $ -- -- $ 4,963,258 5,025,299 Alderwoods Group, Inc. 12.25% Senior Unsecured Notes due 2009.................................................... 1,824,700 2,016,294 1,824,700 1,906,812 Call-Net Enterprises, Inc. 10.625% Senior Secured Notes due 2009................................................ 10,000,000 9,950,000 12,328,177 10,232,387 Finova Group, Inc. 7.5% Senior Notes due 2009............. -- -- 20,000,000 8,700,000 First Union Real Estate Equity & Mortgage Investments 8.875% Senior Notes due 2003............................ -- -- 2,000 1,980 High Falls Brewery Company, Inc. LLC 12% Notes due 2008... 1,110,00 -- 1,110,000 555,000 Lindsey Morden Group 7% DEB due 2008...................... 4,500,000 2,725,020 -- -- Malan Realty Investments, Inc. 9.5% Conv Sub Notes due 2004.................................................... -- -- 3,597,000 3,601,496 Moran Energy, Inc 8.75% Sub Notes due 2008................ 22,000 21,560 22,000 21,422 Rose Hills Company 9.5% Senior Sub Notes due 2004......... -- -- 8,885,000 8,885,000 St. Paul Associates, LLC 12% Note due 2009................ 175,000 175,000 -- -- ----------- ----------- Total Debentures (cost of $9,590,831 in 2004 and $30,478,076 in 2003).................................................. $14,887,874 $38,929,396 ----------- ----------- Total -- 100% (cost of $42,894,670 in 2004 and $64,831,824 in 2003).................................................. $68,051,556 $84,018,472 =========== ===========
See accompanying notes to consolidated financial statements. The consolidated financial statements should be read in conjunction with the 2003 Annual Report. 4 FIRST CAROLINA INVESTORS, INC. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2004 AND 2003 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, FINANCIAL STATEMENT PRESENTATION AND ORGANIZATION. (a) Organization First Carolina Investors, Inc. was organized December 2, 1971 and subsequently incorporated in the State of Delaware July 1, 1987. On January 3, 1995, First Carolina Investors, Inc. registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940. (b) Principles of consolidation and financial statement presentation The accompanying consolidated financial statements include First Carolina Investors, Inc. and its subsidiaries (the Company), all of which are wholly-owned. In consolidation, all significant intercompany accounts and transactions have been eliminated. (c) Investments in Securities The Company records security transactions based on the trade date. Investments in securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales 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 quoted bid price. Securities of privately-held issuers or for which market quotations are not readily available are valued at fair value as determined in good faith by the Company's Pricing Committee of the Board of Directors. In determining fair value, the Pricing Committee of the Board of Directors may consider, if available, financial statements; business and strategic plans; evaluations of major assets; quality of management; legal, contractual or market restrictions or limitations on sale of the securities; and other factors which the directors deem relevant. Realized gains and losses are determined based on the average cost of the securities sold. Interest income is recognized on the accrual basis. Dividend income is recognized on the ex-dividend date. Discounts and premiums on debentures are amortized to cost over the life of the debentures at the effective rate of interest. (d) Income taxes The Company is subject to federal and state corporate income taxes. The Company files a consolidated federal income tax return. The Company accounts for deferred income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income taxes payable have been increased to reflect the estimated federal and state income tax liabilities on investments in securities in the accompanying Consolidated Statement of Assets and Liabilities. (e) Distributions to Shareholders Dividends payable to shareholders are recorded on the record date. (f) Management's use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and 5 FIRST CAROLINA INVESTORS, INC. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) JUNE 30, 2004 AND 2003 (UNAUDITED) liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of increase and decrease in net assets from operations during the reporting period. Actual results may differ from these estimates. (g) Reclassification Certain amounts included in the 2003 consolidated statement of operations have been reclassified to conform to the 2004 presentation. 2. INVESTMENT TRANSACTIONS Cost of purchases and proceeds from sales of investment securities were $6,938,420 and $12,635,590 during 2004 and $4,906,351 and $9,180,698 during 2003. The net gain on sale of investments in other companies was $2,236,167 for 2004 and $2,945,322 for 2003. Net gains are computed using the average cost method. 3. OTHER ASSETS The components of other assets at June 30, 2004 and 2003 are as follows:
2004 2003 ---------- ---------- Deferred compensation, funded............................... $2,236,170 $2,319,686 Miscellaneous............................................... 9,566 13,769 ---------- ---------- $2,245,736 $2,333,455 ========== ==========
The deferred compensation includes amounts owed to affiliated persons pursuant to a deferred compensation plan. The deferred compensation has accrued over twenty years. Contributions are no longer being made to the plan. 4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES The components of accounts payable and accrued liabilities at June 30, 2004 and 2003 are as follows:
2004 2003 ---------- ---------- Overdrafts.................................................. $ 3,952 $ 6,945 Trade accounts payable...................................... 48,616 4,765 Accounts payable for securities............................. 27,819 356,486 Deferred compensation (note 3).............................. 2,236,170 2,319,686 Miscellaneous accruals and payable.......................... 3,977 15,732 ---------- ---------- $2,320,534 $2,703,614 ========== ==========
5. NET ASSETS PER SHARE Net assets per share are based on the number of shares of common stock and common stock equivalents outstanding, which, after deducting treasury stock, are 886,579 and 892,279 at June 30, 2004 and 2003, respectively. 6. SHARE REPURCHASE PROGRAM During the six months ended June 30, 2004 no shares were repurchased. For the six months ended June 30, 2003 the Company repurchased 18,702 shares at an average cost of $88.16 per share. At June 30, 6 FIRST CAROLINA INVESTORS, INC. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) JUNE 30, 2004 AND 2003 (UNAUDITED) 2004, 639,202 of the 639,302 treasury shares authorized were cancelled and retired. As of June 30, 2004 the Company repurchased a total of 639,302 treasury shares at a cost of $22,498,467. 7. DISTRIBUTIONS TO SHAREHOLDERS Two dividends totaling $1.00 per share were declared during the six months ended June 30, 2004 and 2003. The dividends are taxable to shareholders as dividend income. The Company's directors have adopted a dividend policy to reflect the Company's intention to distribute to shareholders as dividends not less than all undistributed personal holding company income of the Company as defined in the Internal Revenue Code. In the Company's case, the sources of such income are primarily dividends and interest received. In the fourth quarter an adjusting dividend is declared, if necessary, to effect a distribution of all undistributed personal holding company income for the fiscal year. 8. DIRECTOR FEES Each Director receives fees of $2,500 per directors' meeting attended and $1,000 per audit committee meeting attended. Effective September, 2003 each Director will also receive an additional $10,000 yearly fee. For the six months ended June 30, 2004 and 2003 directors' fees totaled $99,000 and $36,000, respectively. 9. RELATED PARTY TRANSACTIONS The Company paid brokerage fees of $17,450 and $8,997 for the six months ended June 30, 2004 and 2003, respectively. Trubee, Collins & Co., Inc. received $3,625 and $1,904 during the six months ended June 30, 2004 and 2003, respectively. The Company has executed securities transactions through the brokerage firm of Trubee, Collins and Co., Inc., of which Brent D. Baird, President and an affiliated person of the Company, is a registered person. 7 FIRST CAROLINA INVESTORS, INC. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) COMPUTATION OF NET ASSET VALUE PER SHARE FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (UNAUDITED)
2004 2003 ----------- ----------- Net Asset................................................... $83,725,612 $94,788,659 =========== =========== Shares Outstanding.......................................... 886,579 892,279 =========== =========== Net Asset Value per Share................................... $ 94.44 $ 106.23 =========== ===========
Annual Meeting Summary On May 19, 2004 the annual shareholders meeting was held in Rock Hill, South Carolina. At the meeting, five directors, constituting the entire Board of Directors, were elected to serve a one year term. The votes were as follows:
DIRECTORS NAME FOR WITHHELD - -------------- ------- -------- Bruce C. Baird.............................................. 810,953 2,166 Theodore E. Dann, Jr........................................ 813,119 0 Patrick W. E. Hodgson....................................... 813,119 0 James E. Traynor............................................ 810,951 2,168 H. Thomas Webb III.......................................... 810,953 2,166
To ratify the appointment of KPMG LLP, the votes were as follows:
FOR AGAINST ABSTAIN - ------- ------- ------- 812,769 0 350
8 FIRST CAROLINA INVESTORS, INC. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) FINANCIAL HIGHLIGHTS FOR THE FIVE SIX-MONTH PERIODS ENDED JUNE 30, 2004, 2003, 2002, 2001, AND 2000 (UNAUDITED)
2004 2003 2002 2001 2000 ---------- ---------- ---------- ---------- ---------- FINANCIAL HIGHLIGHTS* Investment income $ 2.12 $ 5.35 $ 3.61 $ 2.17 $ 1.30 Expenses (including income taxes) (.85) (2.24) (1.39) (0.83) (0.52) ---------- ---------- ---------- ---------- ---------- Investment income - net 1.27 3.11 2.22 1.34 0.78 Net realized and unrealized gain on real estate and investments .82 5.44 0.06 4.68 1.82 ---------- ---------- ---------- ---------- ---------- Total from investment operations 2.09 8.55 2.28 6.02 2.60 Distributions from investment income - net (1.00) (1.00) (1.00) (1.00) (0.50) Capital share transactions .01 0.32 0.10 0.06 0.30 ---------- ---------- ---------- ---------- ---------- Net increase in net asset value 1.10 7.87 1.38 5.08 2.40 Net asset value: Beginning of period 93.34 98.36 101.05 95.48 74.92 ---------- ---------- ---------- ---------- ---------- End of period 94.44 106.23 102.43 100.56 77.32 ========== ========== ========== ========== ========== Market value end of period 76.30 90.65 88.50 80.00 61.00 Total Net Assets 75,433,298 94,788,659 94,566,523 95,688,028 73,911,997 RATIOS Ratio of expenses to average net assets .29% 0.39% 0.21% 0.23% 0.24% Ratio of investment income - net to average net assets 1.34% 3.03% 2.10% 1.26% 0.90% Portfolio turnover 9.20% 6.08% 20.35% 22.38% 3.22% Total return based on market price 1.77% 9.14% 9.04% 9.48% (3.18)% AVERAGE SHARES OUTSTANDING 886,579 904,480 924,288 952,203 964,555
* Per share data is based upon the average number of shares outstanding for the period. The computation assumes that all outstanding stock options were exercised and the proceeds used to purchase common stock. 9 DIRECTORS Bruce C. Baird President, Belmont Contracting Co., Inc. Patrick W.E. Hodgson+ President, Cinnamon Investments Ltd. and Chairman, Todd Shipyards Corporation Theodore E. Dann, Jr.+ Executive Vice President, Advance Foam Plastics, Inc. James E. Traynor+ President, Clear Springs Development Co., LLC H. Thomas Webb III++ Senior Vice-President, Crescent Resources, Inc. OFFICERS Brent D. Baird President Bruce C. Baird Vice President, Secretary Cynthia Raby Assistant Secretary REGISTRAR, TRANSFER AND DISBURSING AGENT Continental Stock Transfer and Trust Company 17 Battery Place New York, NY 10004 INDEPENDENT AUDITORS KPMG LLP 401 South Tryon Street Charlotte, NC 28202 + Member of the Audit Committee ++ Member of Pricing Committee 10 Item 2. Code of Ethics First Carolina Investors, Inc. adopted its Code of Ethics in October, 2002 and amended the reporting requirements set forth in the Code of Ethics in September, 2003. A copy of the Code of Ethics may be obtained free of charge by contacting First Carolina Investors, Inc. in writing and requesting the same. The address is P.O. Box 1897, Fort Mill, SC 29716. Item 3. Audit Committee Financial Expert. Disclosure is not applicable for Semi-annual Report. The information is required for the Annual Report. Item 4. Principal Accountant Fees and Services. (a) Audit Fees (b) Audit Related Fees (c) Tax Fees (d) All Other Fees Disclosure is not applicable for Semi-annual Report. The information is required for the Annual Report. Item 5. Audit Committee of Listed Registrants First Carolina Investors, Inc. has a separately-designated standing audit committee consisting James E. Traynor (Chairman), Patrick W. E. Hodgson, and Theodore E. Dann, Jr. Item 6. Schedule of Investments. The schedule of investments is included as a part of the Report to Shareholders at June 30, 2004. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Disclosure is not applicable for Semi-annual Report. The information is required for the Annual Report. Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. The Company no longer repurchases it's equity shares. Item 9. Submission of Matters to a Vote of Security Holders. Shareholders having proposals which they desire to present at next year's annual meeting should, if they desire that such proposals be included the Board of Directors' proxy and proxy statement relating to such meeting, submit such proposals in time to be received by the Company and its independent directors at its principal executive office in Fort Mill, South Carolina, not later than December 24, 2004. To be included, all such submissions must comply with the requirements set forth in Rule 14a-8 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. The Board of Directors directs the close attention of interested shareholders to such rule. Item 10. Controls and Procedures. The registrant's principal executive officer has concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under The Act (17 CFR 270.30a-3(c)) are adequate and satisfactory based on their evaluations of these controls and procedures at June 30, 2004. No significant changes in the internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses, has been deemed necessary. Item 11. Exhibits EX 99 Certification 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. (Registrant) FIRST CAROLINA INVESTORS, INC. By /s/ Brent D. Baird Brent D. Baird, Chief Executive Officer Date August 25, 2004 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 Date The Company has no designated Chief Financial Officer at this time. EX-99.CERT 2 g90421exv99wcert.txt FCII CERTIFICATION CERTIFICATIONS I, Bruce D. Baird, certify that: 1. I have reviewed this report on Form N-CSR of First Carolina Investors, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's 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; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 25, 2004 /s/ Brent D. Baird ----------------------- Brent D. Baird Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----