<PAGE>
CENTRAL SECURITIES CORPORATION
------------
INTERIM REPORT TO STOCKHOLDERS
AS OF SEPTEMBER 30, 1996
<PAGE>
To the Stockholders of
CENTRAL SECURITIES CORPORATION:
Financial data for the quarter ended September 30, 1996 and other pertinent
information prepared by management without audit by independent auditors are
submitted herewith.
Comparative market values of net assets are as follows:
<TABLE>
<CAPTION>
Sept. 30, June 30, Dec. 31,
1996 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Net assets.............................. $337,684,967 $321,908,144 $292,547,559
Convertible Preference Stock at
liquidation preference................ (9,301,500) (9,437,375) (9,488,350)
------------ ------------ ------------
Net assets applicable to Common Stock... $328,383,467 $312,470,769 $283,059,209
------------ ------------ ------------
------------ ------------ ------------
Net asset coverage per share of
Convertible Preference Stock.......... $ 907.61 $ 852.75 $ 770.81
Net assets per share of Common Stock.... 25.18 23.99 21.74
Pro forma net assets per share,
reflecting conversion of the
Convertible Preference Stock.......... 23.78 22.67 20.60
Shares of Convertible Preference
Stock outstanding................. 372,060 377,495 379,534
Shares of Common Stock outstanding.. 13,041,700 13,024,744 13,018,389
</TABLE>
Comparative operating results are as follows:
<TABLE>
<CAPTION>
Nine months ended September
30,
------------------------------
<S> <C> <C>
1996 1995
----------- -----------
Net investment income............................ $ 3,574,380 $ 3,594,215
Number of times Preferred dividend earned.... 6.3 6.2
Per share of Common Stock.................... .23* .24*
Net realized gain on sale of investments......... 13,525,604 18,979,614
Increase in net unrealized appreciation
of investments................................. 31,209,728 49,622,284
Increase in net assets resulting from
operations....................................... 48,309,712 72,196,113
</TABLE>
- ---------
* Per-share data are based on the average number of Common shares outstanding
during the nine-month period and are after recognition of the dividend
requirement on the Convertible Preference Stock.
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<PAGE>
PRINCIPAL PORTFOLIO CHANGES
July 1 to September 30, 1996
(Common Stock unless specified otherwise)
<TABLE>
<CAPTION>
Number of Shares
-----------------------------------------
<S> <C> <C> <C>
Held
September 30,
Purchased Sold 1996
--------- ------- -------------
The Bank of New York Company, Inc. ...... 300,000(a) 600,000
Cliffs Drilling Company.................. 55,757 --
The DII Group, Inc. ..................... 200,000 200,000
Frontier Corporation..................... 27,461 --
GTE Corporation.......................... 60,000 40,000
Gallagher (Arthur J.) & Co. ............. 30,000 50,000(b)
Hanna (M.A.) Company..................... 25,000 1,000,000
Hilb, Rogal and Hamilton Company......... 50,000 --
MGI Pharma, Inc. ........................ 100,000 100,000
Murphy Oil Corporation................... 10,000 195,000
Peerless Systems Corporation............. 181,132(c) 181,132
The Reynolds and Reynolds Company
Class A................................ 330,000(a) 60,000(d) 630,000
Santa Fe Energy Resources, Inc. ......... 130,000 220,000
Tidewater Inc. .......................... 20,000 80,000
Vesta Insurance Group, Inc. ............. 8,900 160,000
</TABLE>
- ------------
<TABLE>
<C> <S>
(a) Stock split.
(b) Includes shares listed under "Miscellaneous" in the Statement of Investments
at 6/30/96.
(c) 133,254 of which were received in exchange for 197,302 shares of Series B
Conv. Pfd. Stock and 47,878 of which were received upon exercise of Warrants
to purchase Common Stock.
(d) 30,000 of which were before stock split.
</TABLE>
------------------------
In the quarter ended September 30, 1996 the Corporation did not repurchase
any of its Common or Preference Stock. However, it may from time to time
purchase Common or Preference Stock in such amounts and at such prices as the
Board of Directors may deem advisable in the best interests of stockholders.
Stockholders' inquiries are welcome.
CENTRAL SECURITIES CORPORATION
WILMOT H. KIDD, President
375 Park Avenue
New York, N.Y. 10152
October 23, 1996
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<PAGE>
BOARD OF DIRECTORS
DONALD G. CALDER DUDLEY D. JOHNSON
Partner President
G. L. Ohrstrom & Co. Young & Franklin Inc.
New York, N. Y. Liverpool, N. Y.
JAY R. INGLIS WILMOT H. KIDD
Executive Vice President President
Holt Corporation
New York, N. Y.
C. CARTER WALKER, JR.
Washington, CT
GARDINER S. ROBINSON
Director Emeritus
OFFICERS
WILMOT H. KIDD, President
CHARLES N. EDGERTON, Vice President and Treasurer
KAREN E. RILEY, Secretary
OFFICE
375 Park Avenue, New York, N. Y. 10152
212-688-3011
CUSTODIAN
The Chase Manhattan Bank, N.A.
770 Broadway, New York, N. Y. 10003
TRANSFER AGENT AND REGISTRAR
First Chicago Trust Company of New York
P.O. Box 2500, Jersey City, N. J. 07303-2500
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
345 Park Avenue, New York, N. Y. 10154
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