UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSRS CERTIFIED SHAREHOLDER REPORT 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, 2009 Date of reporting period: June 30, 2009 Item 1. Reports to Stockholders. ================================================================================ -------------------------------------------------------------------------------- CENTRAL SECURITIES CORPORATION ---------- SEMI-ANNUAL REPORT JUNE 30, 2009 -------------------------------------------------------------------------------- ================================================================================ 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 (loss) of investments ---- ------ ----------- ----- ---------- -------- --------- ------------ -------------- 1998 $476,463,575 $8,986,125 $31.43 $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 2004 529,468,675 -- 26.44 .11 .11 1.21 25,103,157 271,710,179 2005 573,979,905 -- 27.65 .28 .28 1.72 31,669,417 302,381,671 2006 617,167,026 -- 30.05 .36 .58 1.64 36,468,013 351,924,627 2007 644,822,724 -- 30.15 .38 .52 1.88 42,124,417 356,551,394 2008 397,353,061 -- 17.79 .39 .36 2.10 43,582,234 94,752,477 Six mos. to June 30, 2009** 429,428,422 -- 19.27 .15 .09 .01 (451,241) 126,642,273 ---------- 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 NYSE-Amex under the symbol CET. On June 30, 2009 the market quotations were: $15.12 low, $15.35 high and $15.28 last sale. [ 2 ] To the Stockholders of CENTRAL SECURITIES CORPORATION: Financial statements for the six months ended June 30, 2009 reviewed by our independent registered public accounting firm and other pertinent information are submitted herewith. Comparative net assets are as follows: June 30, 2009 December 31, (Unaudited) 2008 ----------- ---- Net assets ................................... $429,428,422 $397,353,061 Net assets per share of Common Stock ......... 19.27 17.79 Shares of Common Stock outstanding .... 22,282,413 22,331,813 Comparative operating results are as follows: Six months ended June 30, ----------------------------------- 2009 2008 (Unaudited) (Unaudited) ----------- ----------- Net investment income .............................................................. $ 3,457,135 $ 4,703,564 Per share of Common Stock ...................................................... .15* .22* Net realized gain (loss) on sale of investments .................................... (451,241) 24,660,810 Increase (decrease) in net unrealized appreciation of investments .................. 31,889,796 (31,265,811) Increase (decrease) in net assets resulting from operations ........................ 34,895,690 (1,901,437) ---------- * Per-share data are based on the average number of Common shares outstanding. A distribution of $.10 per share of Common Stock was paid on June 19, 2009. Stockholders will be sent a notice concerning the taxability of all 2009 distributions in January 2010. During the first six months of 2009 the Corporation repurchased 49,400 shares of its Common Stock at an average price per share of $11.99. The Corporation may from time to time purchase Common Stock in such amounts and at such prices as the Board of Directors deem advisable in the best interests of stockholders. Purchases may be made on the NYSE-Amex or in transactions directly with stockholders. We are very pleased to report that on June 15, 2009, Mr. David C. Colander was elected to the Board of Directors. He is a Professor of Economics at Middlebury College, and is the author of numerous books and articles including a widely used economics textbook which has been translated into several languages. Stockholders' inquiries are welcome. CENTRAL SECURITIES CORPORATION WILMOT H. KIDD, President 630 Fifth Avenue New York, NY 10111 July 23, 2009 [ 3 ] TEN LARGEST INVESTMENTS June 30, 2009 (Unaudited) Percent of Year First Cost Value Net Assets Acquired ---- ----- ---------- -------- (millions) The Plymouth Rock Company, Inc. ................................ $ 2.2 $140.0 32.6% 1982 Brady Corporation .............................................. 2.5 21.9 5.1 1984 The Bank of New York Mellon Corporation ........................ 12.2 19.8 4.6 1993 Murphy Oil Corporation ......................................... 1.4 18.8 4.4 1974 Agilent Technologies, Inc. ..................................... 21.9 18.7 4.4 2005 Coherent, Inc. ................................................. 22.9 17.2 4.0 2007 Convergys Corporation .......................................... 24.8 15.8 3.7 1998 Intel Corporation .............................................. 0.3 13.2 3.1 1986 Dover Corporation .............................................. 13.0 13.2 3.1 2003 Devon Energy Corporation ....................................... 14.9 10.9 2.5 2007 PRINCIPAL PORTFOLIO CHANGES April 1 to June 30, 2009 (Unaudited) (Common Stock unless specified otherwise) Number of Shares ----------------------------------------- Held June 30, Purchased Sold 2009 --------- ---- ---- Abbott Laboratories................................................. 10,000 110,000 AT&T Inc............................................................ 200,000 200,000 The Bank of New York Mellon Corporation............................. 25,000 675,000 Convergys Corporation............................................... 30,800 1,700,000 Intel Corporation................................................... 9,600 800,000 Medtronic, Inc...................................................... 100,000 100,000 Murphy Oil Corporation.............................................. 4,300 345,700 Nexen Inc........................................................... 60,000 240,000 Roper Industries, Inc............................................... 20,000 230,000 [ 4 ] DIVERSIFICATION OF INVESTMENTS June 30, 2009 (Unaudited) Percent of Net Assets ----------------------- June 30, December 31, Issues Cost Value 2009 2008 ------ ---- ----- ---- ---- Common Stocks: Insurance .............................. 2 $ 2,610,297 $140,357,600 32.7% 31.8% Electronics ............................ 9 90,038,152 82,140,500 19.1 17.5 Manufacturing .......................... 6 43,869,923 59,966,700 14.0 15.2 Energy ................................. 6 50,957,090 46,644,624 10.8 11.8 Information Technology ................. 2 38,221,824 21,802,400 5.1 4.7 Banking and Finance .................... 2 13,065,868 20,070,750 4.7 8.0 Other .................................. 8 29,131,387 23,554,238 5.5 3.6 Short-Term Investments .................... 4 33,972,559 33,972,559 7.9 5.8 FINANCIAL HIGHLIGHTS Six Mos. Ended June 30, 2009 (Unaudited) 2008 2007 2006 2005 2004 ----------- ---- ---- ---- ---- ---- Per Share Operating Performance Net asset value, beginning of period ......... $17.79 $30.15 $30.05 $27.65 $26.44 $24.32 Net investment income* ....................... .15 .39 .38 .36 .28 .11 Net realized and unrealized gain (loss) on securities* ............................ 1.43 (10.29) 2.12 4.26 2.93 3.33 -------- -------- -------- -------- -------- -------- Total from investment operations ....... 1.58 (9.90) 2.50 4.62 3.21 3.44 Less: Dividends from net investment income ......... .09 .36 .37 .36 .28 .11 Distributions from capital gains ............. .01 2.10 2.03 1.86 1.72 1.21 -------- -------- -------- -------- -------- -------- Total distributions .................... .10 2.46 2.40 2.22 2.00 1.32 -------- -------- -------- -------- -------- -------- Net asset value, end of period ............... $19.27 $17.79 $30.15 $30.05 $27.65 $26.44 ======== ======== ======== ======== ======== ======== Per share market value, end of period ........ $15.28 $14.40 $26.84 $26.65 $23.80 $22.85 Total investment return, market(%) ........... 4.55 (39.63) 9.86 21.31 14.04 16.16 Total investment return, NAV(%) .............. 8.88 (32.66) 9.35 18.55 13.75 15.40 Ratios/Supplemental Data: Net assets, end of period(000) ............... $429,428 $397,353 $644,823 $617,167 $573,980 $529,469 Ratio of expenses to average net assets(%) ................................. .83+ .66 .59 .53 .54 .55 Ratio of net investment income to average net assets(%) ..................... 1.02+ 1.43 1.21 1.23 1.02 .41 Portfolio turnover rate(%) ................... 2.53 11.04 19.58 17.55 15.83 16.72 ---------- * Per-share data are based on the average number of shares outstanding during the period. + Annualized, not necessarily indicative of full year ratio. See accompanying notes to financial statements. [ 5 ] STATEMENT OF INVESTMENTS June 30, 2009 (Unaudited) PORTFOLIO SECURITIES 91.9% STOCKS (COMMON UNLESS SPECIFIED OTHERWISE) Prin. Amt. or Shares Value --------- ----- Banking and Finance 4.7% 675,000 The Bank of New York Mellon Corporation.............. $ 19,784,250 150,000 Newstar Financial, Inc. (a).......................... 286,500 ------------ 20,070,750 ------------ Business Services 0.3% 100,000 Heritage-Crystal Clean Inc. (a)...................... 1,215,000 ------------ Communications 1.5% 1,000,000 Arbinet-thexchange, Inc. (a)......................... 1,740,000 200,000 AT&T Inc............................................. 4,968,000 ------------ 6,708,000 ------------ Electronics 19.1% 920,000 Agilent Technologies, Inc. (a)....................... 18,685,200 370,000 Analog Devices, Inc.................................. 9,168,600 830,000 Coherent, Inc. (a)................................... 17,164,400 630,000 Flextronics International Ltd. (a)................... 2,614,500 800,000 Intel Corporation.................................... 13,240,000 300,000 Maxim Integrated Products, Inc....................... 4,707,000 350,000 Motorola, Inc. (a)................................... 2,320,500 1,000,000 Radisys Corporation (a).............................. 9,040,000 3,230,000 Sonus Networks, Inc. (a)............................. 5,200,300 ------------ 82,140,500 ------------ Energy 10.8% 300,000 Berry Petroleum Company Class A...................... 5,577,000 200,000 Devon Energy Corporation............................. 10,900,000 2,000,000 GeoMet, Inc. (a)(b).................................. 2,200,000 670,000 McMoRan Exploration Co. (a).......................... 3,993,200 345,700 Murphy Oil Corporation............................... 18,778,424 240,000 Nexen Inc............................................ 5,196,000 ------------ 46,644,624 ------------ Health Care 2.2% 110,000 Abbott Laboratories.................................. 5,174,400 100,000 Medtronic, Inc....................................... 3,489,000 260,000 Vical Inc. (a)....................................... 702,000 ------------ 9,365,400 ------------ Information Technology Services 5.1% 1,700,000 Convergys Corporation (a)............................ 15,776,000 930,000 Xerox Corporation.................................... 6,026,400 ------------ 21,802,400 ------------ [ 6 ] Prin. Amt. or Shares Value --------- ----- Insurance 32.7% 10,000 Erie Indemnity Co. Class A........................... $ 357,600 70,000 The Plymouth Rock Company, Inc. Class A (b)(d)..................................... 140,000,000 ------------ 140,357,600 ------------ Manufacturing 14.0% 870,000 Brady Corporation Class A............................ 21,854,400 200,000 Carlisle Companies Inc............................... 4,808,000 400,000 Dover Corporation.................................... 13,236,000 200,000 General Electric Company............................. 2,344,000 100,000 Precision Castparts Corp............................. 7,303,000 230,000 Roper Industries, Inc................................ 10,421,300 ------------ 59,966,700 ------------ Retailing 1.5% 28,751 Aerogroup International, Inc. (a)(d)................. 385,838 200,000 Walgreen Co.......................................... 5,880,000 ------------ 6,265,838 ------------ Total Portfolio Securities (cost $267,894,539)(e)........................... $394,536,812 ------------ SHORT-TERM INVESTMENTS 7.9% Money Market Fund 0.3% 1,463,673 Fidelity Institutional Money Market Government Portfolio............................... 1,463,673 U.S. Treasury Bills 7.6% 32,521,000 U.S. Treasury Bills 0.08% - 0.26% due 7/23/09 - 10/22/09 (c)......................... 32,508,886 ------------ Total Short-Term Investments (cost $33,972,559)(e)......................... 33,972,559 ------------ Total Investments (99.8%)....................... 428,509,371 Cash, receivables and other assets less liabilities (0.2%)....................... 919,051 ------------ Net Assets (100%)............................... $429,428,422 ============ ---------- (a) Non-dividend paying. (b) Affiliate as defined in the Investment Company Act of 1940. (c) Value based on Level 2 inputs - see Note 2. (d) Valued at estimated fair value based on Level 3 inputs - see Note 2. (e) Aggregate cost for Federal tax purposes is substantially the same. See accompanying notes to financial statements. [ 7 ] STATEMENT OF ASSETS AND LIABILITIES June 30, 2009 (Unaudited) ASSETS: Investments: General portfolio securities at market value (cost $252,035,621)........................................................ $252,336,812 Securities of affiliated companies (cost $15,858,918) (Notes 6 and 7)............................................................ 142,200,000 Short-term investments (cost $33,972,559).................................... 33,972,559 $428,509,371 ------------ Cash, receivables and other assets: Cash......................................................................... 170,397 Dividends and interest receivable............................................ 49,111 Receivable for securities sold............................................... 611,140 Office equipment and leasehold improvements, net............................. 202,926 Other assets................................................................. 97,005 1,130,579 ------------ ------------ Total Assets............................................................. 429,639,950 LIABILITIES: Accrued expenses and reserves.................................................... 211,528 ------------ Total Liabilities........................................................ 211,528 ------------ NET ASSETS........................................................................... $429,428,422 ============ NET ASSETS are represented by: Common Stock $1 par value: authorized 30,000,000 shares; issued 22,336,013 (Note 3).................................. $22,336,013 Surplus: Paid-in...................................................................... $279,078,341 Accumulated net loss on sales of investments................................. (451,241) Undistributed net investment income.......................................... 2,474,140 281,101,240 ------------ Net unrealized appreciation of investments....................................... 126,642,273 Treasury stock, at cost (53,600 shares of Common Stock) (Note 3)....................................................................... (651,104) ------------ NET ASSETS........................................................................... $429,428,422 ============ NET ASSET VALUE PER COMMON SHARE (22,282,413 shares outstanding).................................................... $19.27 ====== See accompanying notes to financial statements. [ 8 ] STATEMENT OF OPERATIONS For the six months ended June 30, 2009 (Unaudited) INVESTMENT INCOME Income: Dividends (net of foreign withholding taxes of $3,519).................................. $ 5,019,495 Interest................................................................................ 52,734 $ 5,072,229 ----------- Expenses: Investment research..................................................................... 449,375 Administration and operations........................................................... 399,125 Occupancy costs......................................................................... 225,689 Franchise and miscellaneous taxes....................................................... 102,637 Insurance............................................................................... 82,265 Directors' fees......................................................................... 80,750 Stationery, supplies, printing and postage.............................................. 67,270 Listing, software and sundry fees....................................................... 57,625 Legal, auditing and tax fees............................................................ 38,862 Travel and telephone.................................................................... 26,225 Transfer agent and registrar fees and expenses.......................................... 22,640 Custodian fees.......................................................................... 10,496 Miscellaneous........................................................................... 52,135 1,615,094 ----------- ----------- Net investment income....................................................................... 3,457,135 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized loss from investment transactions.............................................. (451,241) Net increase in unrealized appreciation of investments...................................... 31,889,796 ----------- Net gain on investments................................................................. 31,438,555 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................................................ $34,895,690 =========== See accompanying notes to financial statements. [ 9 ] STATEMENTS OF CHANGES IN NET ASSETS For the six months ended June 30, 2009 and the year ended December 31, 2008 Six months ended Year ended June 30, 2009 December 31, (Unaudited) 2008 ----------- ---- FROM OPERATIONS: Net investment income ......................................................... $ 3,457,135 $ 8,254,733 Net realized gain (loss) on investments ....................................... (451,241) 43,582,234 Net increase (decrease) in unrealized appreciation of investments ................................................ 31,889,796 (261,798,917) ------------- ------------- Increase (decrease) in net assets resulting from operations ............................................ 34,895,690 (209,961,950) ------------- ------------- DISTRIBUTIONS TO STOCKHOLDERS FROM: Net investment income ......................................................... (1,944,635) (7,791,012) Net realized gain from investment transactions ................................ (283,606) (44,387,916) ------------- ------------- Decrease in net assets from distributions ............................... (2,228,241) (52,178,928) ------------- ------------- FROM CAPITAL SHARE TRANSACTIONS: (Note 3) Distribution to stockholders reinvested in Common Stock ....................... -- 20,932,558 Cost of shares of Common Stock repurchased .................................... (592,088) (6,261,343) ------------- ------------- Increase (decrease) in net assets from capital share transactions ................................................... (592,088) 14,671,215 ------------- ------------- Total increase (decrease) in net assets ........................... 32,075,361 (247,469,663) NET ASSETS: Beginning of period ........................................................... 397,353,061 644,822,724 ------------- ------------- End of period (including undistributed net investment income of $2,474,140 and $961,640, respectively) .................................. $ 429,428,422 $ 397,353,061 ============= ============= See accompanying notes to financial statements. [ 10 ] STATEMENT OF CASH FLOWS For the six months ended June 30, 2009 (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net increase in net assets from operations.............................................. $34,895,690 Adjustments to net increase in net assets from operations: Purchase of securities................................................................ ($ 8,894,331) Proceeds from securities sold......................................................... 13,817,451 Net purchase of short-term investments................................................ (10,785,959) Net realized loss from investments.................................................... 451,241 Increase in unrealized appreciation................................................... (31,889,796) Depreciation and amortization......................................................... 41,419 Changes in operating assets and liabilities: Decrease in dividends and interest receivable....................................... 85,798 Increase in office equipment and leasehold improvements.......................................................... (1,497) Increase in other assets............................................................ (15,037) Increase in receivable for securities sold.......................................... (611,140) Decrease in accrued expenses and reserves........................................... (95,149) ------------ Total adjustments..................................................................... (37,897,000) ----------- Net cash used by operating activities....................................................... (3,001,310) CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid.......................................................................... (5,354,696) Treasury shares repurchased............................................................. (592,088) ------------ Cash flows used in financing activities..................................................... (5,946,784) ----------- Net decrease in cash........................................................................ (8,948,094) Cash at beginning of period................................................................. 9,118,491 ----------- Cash at end of period....................................................................... $ 170,397 =========== See accompanying notes to financial statements. [ 11 ] NOTES TO FINANCIAL STATEMENTS -- (unaudited) 1. Significant Accounting Policies -- Central Securities Corporation (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. These policies are in conformity with generally accepted accounting principles. Subsequent events have been evaluated through July 23, 2009, the date the financial statements were available to be issued. Security Valuation -- Marketable securities are valued at the last or closing sale price or, if unavailable, at the closing bid price. Investments in money market funds are valued at net asset value per share. Other short-term investments are valued at amortized cost, which approximates market value. Securities for which no ready market exists 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 may differ from such estimates. Other -- Security transactions are accounted for as of the trade date, and cost of securities sold is determined by specific identification. Dividend income and distributions to stockholders are recorded on the ex-dividend date. Interest income is accrued daily. 2. Fair Value Measurements -- The Corporation's investments are categorized below in three broad hierarchical levels based on market price observability as follows: o Level 1 -- Quoted prices in active markets for identical investments. The Corporation's Level 1 investments consist of securities listed on a national securities exchange or NASDAQ national market and money market funds; o Level 2 -- Other significant observable data obtained from independent sources; for example quoted prices for similar investments or the use of models or other valuation methodologies. The Corporation's Level 2 investments consist of short-term investments, carried at amortized cost; o Level 3 -- Significant unobservable inputs including the Corporation's own assumptions based upon the best information available. Investments categorized as Level 3 include securities in which there is little, if any, market activity. The Corporation's Level 3 investments consist of The Plymouth Rock Company, Inc. and Aerogroup International, Inc. The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities. The Corporation's investments as of June 30, 2009 are classified as follows: Valuation Inputs Investments in Securities ---------------- ------------------------- Level 1 $255,614,647 Level 2 32,508,886 Level 3 140,385,838 ------------ Total $428,509,371 ============ [ 12 ] NOTES TO FINANCIAL STATEMENTS -- continued (unaudited) The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value: Balance as of December 31, 2008 $126,385,838 Net increase in unrealized appreciation of investments 14,000,000 ------------ Balance as of June 30, 2009 $140,385,838 ============ No Level 3 investments were purchased, sold or transferred to Level 1 or Level 2 during the six months ended June 30, 2009. The Corporation's Level 3 investments are valued by the Board of Directors. This valuation is primarily based on a comparable company valuation analysis and review of independent appraisals. In addition, consideration is given to corporate governance, private transactions, company and industry outlooks and general market conditions. 3. Common Stock -- The Corporation repurchased 49,400 shares of its Common Stock in the first six months of 2009 at an average price of $11.99 per share, representing an average discount from net asset value of 23.6%. It may from time to time purchase Common Stock in such amounts and at such prices as the Board of Directors 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. 4. Investment Transactions -- The aggregate cost of securities purchased and the aggregate proceeds of securities sold during the six months ended June 30, 2009, excluding short-term investments, were $8,894,331 and $13,817,451, respectively. As of June 30, 2009, based on cost for Federal income tax purposes, the aggregate gross unrealized appreciation and depreciation for all securities were $213,647,047 and $87,004,774, respectively. 5. Operating Expenses -- The aggregate remuneration paid during the six months ended June 30, 2009 to officers and directors amounted to $829,500, of which $80,750 was paid as fees to directors who were not officers. Employees also participate in 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 of employment. No contributions were made to the plan for the six months ended June 30, 2009. 6. Affiliates -- The Plymouth Rock Company, Inc. and GeoMet, Inc., are affiliates as defined in the Investment Company Act of 1940. During the six months ended June 30, 2009, the Corporation received dividends of $2,970,800 from affiliates. Unrealized appreciation related to affiliates increased by $12,760,000 for the six months ended June 30, 2009 to $126,341,082. The President of the Corporation is a director of Plymouth Rock. 7. Restricted Securities -- The Corporation from time to time invests in securities the resale of which is restricted. On June 30, 2009 such investments had an aggregate value of $140,385,838, which was equal to 32.7% of the Corporation's net assets. Investments in restricted securities at June 30, 2009, including acquisition dates and cost, were: Company Shares Security Date Acquired Cost ------------------------------ ------ ------------- ------------- ---------- Aerogroup International, Inc. 28,751 Common Stock 6/21/05 $ 17,200 The Plymouth Rock Company, Inc. 60,000 Class A Stock 12/15/82 1,500,000 The Plymouth Rock Company, Inc. 10,000 Class A Stock 6/9/84 699,986 The Corporation does not have the right to demand registration of the restricted securities. 8. 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 $1.9 million. The lease agreement contains escalation clauses relating to operating costs and real property taxes. Future minimum rental commitments under the lease are $170,903 remaining for 2009 and $341,806 annually thereafter. [ 13 ] -------------------------------------------------------------------------------- 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, 2009, and the related statements of operations, changes in net assets, cash flows and financial highlights for the six-month period ended June 30, 2009. These interim financial statements and financial highlights are the responsibility of Central Securities Corporation's management. We conducted our review in accordance with the standards of 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 interim financial statements and financial highlights referred to above for them to be in conformity with U.S. generally accepted accounting principles. We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the statement of changes in net assets for the year ended December 31, 2008 and financial highlights for each of the years in the five-year period ended December 31, 2008, and in our report dated February 2, 2009 we expressed an unqualified opinion on such statement of changes in net assets and financial highlights. KPMG LLP New York, NY July 23, 2009 -------------------------------------------------------------------------------- [ 14 ] OTHER STOCKHOLDER INFORMATION Direct Registration The Corporation utilizes direct registration, a system that allows for book-entry ownership and the electronic transfer of the Corporation's shares. Stockholders may find direct registration a convenient way of managing their investment. Stockholders wishing certificates may request them. A pamphlet which describes the features and benefits of direct registration, including the ability of shareholders to deposit certificates with our transfer agent, can be obtained by calling Computershare Trust Company at 1-800-756-8200, calling the Corporation at 1-866-593-2507 or visiting our website: www.centralsecurities.com under Contact Us. Annual Meeting of Stockholders The annual meeting of stockholders of the Corporation was held on March 11, 2009. At the meeting all of the directors of the Corporation were reelected by the following vote of the holders of the Common Stock: Simms C. Browning, 20,312,173 shares in favor, 606,414 withheld; Donald G. Calder, 20,313,992 shares in favor, 604,595 shares withheld; Jay R. Inglis, 20,301,700 shares in favor, 616,887 shares withheld; Dudley D. Johnson, 20,314,331 shares in favor, 604,256 shares withheld; Wilmot H. Kidd, 20,311,008 shares in favor, 607,579 shares withheld; and C. Carter Walker, Jr., 20,310,217 shares in favor, 608,370 shares withheld. In addition, the selection of KPMG LLP as independent auditors of the Corporation for the year 2009 was ratified by the following vote of the holders of the Common Stock: 20,356,349 shares in favor, 487,583 shares against, 74,655 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 and the Corporation's proxy voting record for the twelve-month period ended June 30, 2009 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. Quarterly Portfolio Information The Corporation files its complete schedule of portfolio holdings with the sec for the first and the third quarter of each fiscal year on Form N-Q. The Corporation's Form N-Q filings are available on the SEC's website at www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. [ 15 ] BOARD OF DIRECTORS Simms C. Browning, Chairman Donald G. Calder David C. Colander Jay R. Inglis Dudley D. Johnson Wilmot H. Kidd C. Carter Walker, Jr. 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 TRANSFER AGENT AND REGISTRAR Computershare Trust Company, N.A. P.O. Box 43069, Providence, RI 02940-3069 800-756-8200 www.computershare.com CUSTODIAN UMB Bank, N. A. Kansas City, MO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM KPMG LLP New York, NY [ 16 ] 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. Portfolio Managers of Closed-End Management Investment Companies. The information required by this Item is only required in an annual report on this Form N-CSR. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. ---------------------------------------------------------------------------------------------------------------------------------- (d) Maximum Number (or (c) Total Number of Shares (or Approximate Dollar Value) of Period (a) Total Number of (b) Average Price Units) Purchased as Part of Shares (or Units) that May Yet Shares (or Units) Paid per Share (or Publicly Announced Plans or Be Purchased Under the Plans Purchased Unit) Programs or Programs ---------------------------------------------------------------------------------------------------------------------------------- Month #1 (January 1 0 NA NA NA through January 31) ---------------------------------------------------------------------------------------------------------------------------------- Month #2 (February 1 0 NA NA NA through February 28) ---------------------------------------------------------------------------------------------------------------------------------- Month #3 (March 1 28,600 $10.913 NA NA through March 31) ---------------------------------------------------------------------------------------------------------------------------------- Month #4 (April 1 20,800 $13.461 NA NA through April 30) ---------------------------------------------------------------------------------------------------------------------------------- Month #5 (May 1 0 NA NA NA through May 31) ---------------------------------------------------------------------------------------------------------------------------------- Month #6 (June 1 0 NA NA NA through June 30) ---------------------------------------------------------------------------------------------------------------------------------- Total 49,400 $11.986 NA NA ---------------------------------------------------------------------------------------------------------------------------------- Item 10. 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, 2009. Item 11. 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-2(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 Corporation's internal control over financial reporting (as defined in Rule 30a-3(d)) under the Investment Company Act of 1940 that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Corporation's internal control over financial reporting. Item 12. 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 July 30, 2009 ------------- 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 July 30, 2009 ------------- Date By: /s/ Charles N. Edgerton ------------------------------- Charles N. Edgerton Treasurer July 30, 2009 ------------- Date