SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________
FORM N-CSR
___________
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-2815
COPLEY FUND, INC.
(Exact name of registrant as specified in charter)
___________
c/o Gallet Dreyer & Berkey, LLP
845 Third Avenue - 5th Floor
New York, NY 10022
(Address of principal executive offices) (Zip code)
Registered Agent, Inc.
769 Basque Way, Suite 300
Carson City, NV 09706
(Name and address of agent for service)
REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: 212-935-3131
DATE OF FISCAL YEAR END: FEBRUARY 29, 2020
DATE OF REPORTING PERIOD: FEBRUARY 29, 2020
FOR THE YEAR ENDING
FEBRUARY 29, 2020
Title | | | Page | | |||
| | | | 1 | | | |
| | | | 3 | | | |
| | | | 4 | | | |
| | | | 4 | | | |
| | | | 5 | | | |
| | | | 6 – 8 | | | |
| | | | 10 | | | |
| | | | 11 | | | |
| | | | 12 | | | |
| | | | 13 – 14 | | | |
| | | | 15 | | | |
| | | | 16 – 21 | | | |
| | | | 22 | | | |
| | | | 23 | | | |
| | | | 24 – 25 | | | |
| | | | 24 | | | |
| | | | 24 | | | |
| | | | 24 | | | |
| | | | 24 – 25 | | | |
| | | | 26 | | |
| 1984 | | | | | +23.90% | | | | | |
| 1985 | | | | | +25.00% | | | | | |
| 1986 | | | | | +18.00% | | | | | |
| 1987 | | | | | -8.00% | | | | | |
| 1988 | | | | | +20.00% | | | | | |
| 1989 | | | | | +16.00% | | | | | |
| 1990 | | | | | -2.00% | | | | | |
| 1991 | | | | | +18.00% | | | | | |
| 1992 | | | | | +18.00% | | | | | |
| 1993 | | | | | +10.00% | | | | | |
| 1994 | | | | | -7.00% | | | | | |
| 1995 | | | | | +26.00% | | | | | |
| 1996 | | | | | +5.00% | | | | | |
| 1997 | | | | | +25.00% | | | | | |
| 1998 | | | | | +14.00% | | | | | |
| 1999 | | | | | -6.86% | | | | | |
| 2000 | | | | | +22.50% | | | | | |
| 2001 | | | | | -9.30% | | | | | |
| 2002 | | | | | -13.90% | | | | | |
| 2003 | | | | | +14.31% | | | | | |
| 2004 | | | | | +12.99% | | | | | |
| 2005 | | | | | +5.89% | | | | | |
| 2006 | | | | | +19.70% | | | | | |
| 2007 | | | | | -10.83% | | | | * SEC mandated change to tax reserve | |
| 2008 | | | | | -15.60% | | | | * | |
| 2009 | | | | | +2.36% | | | | * | |
| 2010 | | | | | +7.04% | | | | * | |
| 2011 | | | | | +13.00% | | | | * | |
| 2012 | | | | | +4.79% | | | | * | |
| 2013 | | | | | +18.08% | | | | * | |
| 2014 | | | | | +14.24% | | | | * | |
| 2015 | | | | | -1.98% | | | | * | |
| 2016 | | | | | +15.55% | | | | * | |
| 2017 | | | | | +9.68% | | | | * | |
| 2018 | | | | | +15.65% | | | | * | |
| 2019 | | | | | +24.33% | | | | * | |
| 2020 | | | | | -19.11% | | | | * Ended March 31, 2020 | |
PER SHARE VALUE
PERIOD ENDED MARCH 31, 2020
COMPARATIVE PERFORMANCE
Periods Ended 2/29 | | | 1 Year | | | 5 Years | | | 10 Years | | |||||||||
Copley Fund | | | | | 6.70% | | | | | | 10.98% | | | | | | 11.32% | | |
S&P 500 | | | | | 8.19% | | | | | | 9.23% | | | | | | 12.65% | | |
Dow Jones Wilshire 5000 | | | | | 6.26% | | | | | | 8.51% | | | | | | 12.33% | | |
Copley Fund, Inc.
| May 13, 2020 | | | |
SCHEDULE OF INVESTMENTS
February 29, 2020
| | | Shares | | | Value | | ||||||
COMMON STOCK – 119.86% | | | | | | | | | | | | | |
Aerospace/Defense – 3.65% | | | | | | | | | | | | | |
Harris Corp. | | | | | 6,000 | | | | | $ | 1,186,380 | | |
Lockheed Martin Corp. | | | | | 3,000 | | | | | | 1,109,610 | | |
Raytheon Co. | | | | | 6,000 | | | | | | 1,131,360 | | |
| | | | | | | | | | | 3,427,350 | | |
Apparel – 1.24% | | | | | | | | | | | | | |
NIKE, Inc. | | | | | 13,000 | | | | | | 1,161,940 | | |
Banking – 7.95% | | | | | | | | | | | | | |
JPMorgan Chase & Company | | | | | 37,000 | | | | | | 4,296,070 | | |
PNC Financial Services Group, Inc. | | | | | 25,000 | | | | | | 3,160,000 | | |
| | | | | | | | | | | 7,456,070 | | |
Chemicals – 1.17% | | | | | | | | | | | | | |
Air Products & Chemicals, Inc. | | | | | 5,000 | | | | | | 1,098,050 | | |
Commercial Services – 2.41% | | | | | | | | | | | | | |
Moody’s Corp. | | | | | 5,000 | | | | | | 1,200,150 | | |
S&P Global, Inc. | | | | | 4,000 | | | | | | 1,063,640 | | |
| | | | | | | | | | | 2,263,790 | | |
Computers – 2.27% | | | | | | | | | | | | | |
Apple, Inc. | | | | | 7,800 | | | | | | 2,132,208 | | |
Consumer Products – 2.10% | | | | | | | | | | | | | |
Kimberly-Clark Corp. | | | | | 15,000 | | | | | | 1,967,850 | | |
Cosmetics/Personal Care – 1.21% | | | | | | | | | | | | | |
Procter & Gamble Co. | | | | | 10,000 | | | | | | 1,132,300 | | |
Diversified Financial Services – 3.68% | | | | | | | | | | | | | |
BlackRock, Inc. | | | | | 2,400 | | | | | | 1,111,224 | | |
Mastercard, Inc. | | | | | 4,000 | | | | | | 1,161,000 | | |
Visa, Inc. | | | | | 6,500 | | | | | | 1,181,440 | | |
| | | | | | | | | | | 3,453,664 | | |
Diversified Utility Companies – 18.41% | | | | | | | | | | | | | |
Alliant Energy Corp. | | | | | 40,000 | | | | | | 2,084,800 | | |
DTE Energy Co. | | | | | 35,000 | | | | | | 3,908,450 | | |
Dominion Energy, Inc. | | | | | 60,000 | | | | | | 4,690,800 | | |
Duke Energy Corp. | | | | | 53,033 | | | | | | 4,863,126 | | |
WEC Energy Group, Inc. | | | | | 18,612 | | | | | | 1,718,446 | | |
| | | | | | | | | | | 17,265,622 | | |
SCHEDULE OF INVESTMENTS – Continued
February 29, 2020
| | | Shares | | | Value | | ||||||
COMMON STOCK – 119.86% – (continued) | | | | | | | | | | | | | |
Drug Companies – 6.32% | | | | | | | | | | | | | |
Bristol-Myers Squibb Co. | | | | | 80,000 | | | | | $ | 4,724,800 | | |
Zoetis, Inc. | | | | | 9,000 | | | | | | 1,199,070 | | |
| | | | | | | | | | | 5,923,870 | | |
Electric & Gas – 11.64% | | | | | | | | | | | | | |
American Electric Power Company, Inc. | | | | | 35,000 | | | | | | 3,124,100 | | |
FirstEnergy Corp. | | | | | 40,000 | | | | | | 1,781,200 | | |
Public Service Enterprise Group, Inc. | | | | | 30,000 | | | | | | 1,539,300 | | |
Sempra Energy | | | | | 32,000 | | | | | | 4,472,960 | | |
| | | | | | | | | | | 10,917,560 | | |
Electric Power Companies – 18.43% | | | | | | | | | | | | | |
Ameren Corp. | | | | | 12,500 | | | | | | 987,500 | | |
Eversource Energy | | | | | 55,000 | | | | | | 4,755,300 | | |
Exelon Corp. | | | | | 23,200 | | | | | | 1,000,152 | | |
NextEra Energy, Inc. | | | | | 21,500 | | | | | | 5,434,340 | | |
PPL Corp. | | | | | 100,000 | | | | | | 3,001,000 | | |
The Southern Co. | | | | | 35,000 | | | | | | 2,112,600 | | |
| | | | | | | | | | | 17,290,892 | | |
Environmental Control – 1.30% | | | | | | | | | | | | | |
Waste Management, Inc. | | | | | 11,000 | | | | | | 1,218,910 | | |
Food – 1.07% | | | | | | | | | | | | | |
Sysco Corp. | | | | | 15,000 | | | | | | 999,750 | | |
Gas Utilities & Supplies – 5.00% | | | | | | | | | | | | | |
New Jersey Resources Corp. | | | | | 62,000 | | | | | | 2,189,220 | | |
Northwest Natural Holding Co. | | | | | 38,000 | | | | | | 2,499,260 | | |
| | | | | | | | | | | 4,688,480 | | |
Healthcare – Services – 1.36% | | | | | | | | | | | | | |
Quest Diagnostics, Inc. | | | | | 12,000 | | | | | | 1,272,720 | | |
Home Builders – 1.25% | | | | | | | | | | | | | |
DR Horton, Inc. | | | | | 22,000 | | | | | | 1,171,940 | | |
Insurance – 7.86% | | | | | | | | | | | | | |
Allstate Corp. | | | | | 11,000 | | | | | | 1,157,750 | | |
Arthur J. Gallagher & Co. | | | | | 52,000 | | | | | | 5,069,480 | | |
Hartford Financial Services Group, Inc. | | | | | 23,000 | | | | | | 1,148,850 | | |
| | | | | | | | | | | 7,376,080 | | |
SCHEDULE OF INVESTMENTS – Continued
February 29, 2020
| | | Shares | | | Value | | ||||||
COMMON STOCK – 119.86% – (continued) | | | | | | | | | | | | | |
Oil – 7.75% | | | | | | | | | | | | | |
Chevron Corp. | | | | | 42,800 | | | | | $ | 3,994,952 | | |
ExxonMobil Corp. | | | | | 63,700 | | | | | | 3,276,728 | | |
| | | | | | | | | | | 7,271,680 | | |
Retail – 2.18% | | | | | | | | | | | | | |
Wal-Mart Stores, Inc. | | | | | 19,000 | | | | | | 2,045,920 | | |
REIT – 1.21% | | | | | | | | | | | | | |
American Tower Corp. | | | | | 5,000 | | | | | | 1,134,000 | | |
Software – 2.59% | | | | | | | | | | | | | |
Microsoft Corp. | | | | | 15,000 | | | | | | 2,430,150 | | |
Telephone – 7.81% | | | | | | | | | | | | | |
AT&T, Inc. | | | | | 95,000 | | | | | | 3,345,900 | | |
Verizon Communications, Inc. | | | | | 73,400 | | | | | | 3,975,344 | | |
| | | | | | | | | | | 7,321,244 | | |
TOTAL COMMON STOCK (Cost – $46,641,146) | | | | | | | | | | | 112,422,040 | | |
SHORT-TERM INVESTMENT* – 2.12% | | | | | | | | | | | | | |
Fidelity Investments Money Market Funds Government Portfolio – Class I, 1.52%(a) | | | | | 1,986,572 | | | | | | 1,986,572 | | |
TOTAL SHORT-TERM INVESTMENT (Cost – $1,986,572) | | | | | | | | | | | | | |
TOTAL INVESTMENTS (Cost $48,627,718) − 121.98% | | | | $ | 114,408,612 | | | ||||||
Liabilities in Excess of Other Assets – (21.98%) | | | | | (20,612,506) | | | ||||||
NET ASSETS – 100.00% | | | | $ | 93,796,106 | | | ||||||
|
As of February 29, 2020
(Unaudited)
| | | % of Net Assets | | |||
Common Stock | | | | | 119.86% | | |
Electric Power Companies | | | | | 18.43% | | |
Diversified Utility Companies | | | | | 18.41% | | |
Electric & Gas | | | | | 11.64% | | |
Banking | | | | | 7.95% | | |
Insurance | | | | | 7.86% | | |
Telephone | | | | | 7.81% | | |
Oil | | | | | 7.75% | | |
Drug Companies | | | | | 6.32% | | |
Gas Utilities & Supplies | | | | | 5.00% | | |
Diversified Financial Services | | | | | 3.68% | | |
Other Common Stock | | | | | 25.01% | | |
Short-Term Investment | | | | | 2.12% | | |
Liabilities in Excess of Other Assets | | | | | (21.98)% | | |
Total Net Assets | | | | | 100.00% | | |
STATEMENT OF ASSETS AND LIABILITIES
February 29, 2020
| Assets: | | | | | | | |
| Investments in securities at fair value (identified cost $46,641,146) | | | | $ | 112,422,040 | | |
| Cash and cash equivalents | | | | | 2,148,011 | | |
| Receivables: | | | | | | | |
| Dividends and interest | | | | | 384,432 | | |
| Subscriptions | | | | | 202 | | |
| Other | | | | | 10,069 | | |
| Prepaid expenses and other assets | | | | | 22,466 | | |
| Total Assets | | | | | 114,987,220 | | |
| Payables: | | | | | | | |
| Fund shares redeemed | | | | | 4,980 | | |
| Taxes | | | | | 7,150,987 | | |
| Investment advisory fees | | | | | 129,589 | | |
| Accrued professional fees | | | | | 36,014 | | |
| Accrued expenses | | | | | 15,363 | | |
| Deferred income taxes | | | | | 13,854,181 | | |
| Total Liabilities | | | | | 21,191,114 | | |
| Commitments and Contingencies (Note 6) | | | | | | | |
| Net assets | | | | $ | 93,796,106 | | |
| Net Asset Value, Offering and Redemption Price Per Share (5,000,000 shares authorized, 798,215 shares outstanding of $1.00 par value capital stock outstanding) | | | | $ | 117.51 | | |
| Net assets consist of: | | | | | | | |
| Capital paid in | | | | $ | 798,215 | | |
| Accumulated earnings (losses) | | | | | 92,997,891 | | |
| Net assets | | | | $ | 93,796,106 | | |
STATEMENT OF OPERATIONS
For the Year Ended February 29, 2020
| Investment Income: | | | | | | | |
| Dividend | | | | $ | 3,874,329 | | |
| Interest | | | | | 21,046 | | |
| Other Income | | | | | 15,069 | | |
| Total Investment Income | | | | | 3,910,444 | | |
| Expense: | | | | | | | |
| Investment advisory fees, net | | | | | 470,626 | | |
| Legal fees | | | | | 138,553 | | |
| Audit fees | | | | | 82,127 | | |
| Accounting and shareholder services | | | | | 52,416 | | |
| Insurance | | | | | 43,934 | | |
| Directors fees and expenses | | | | | 24,161 | | |
| Printing | | | | | 15,629 | | |
| Custodian fees | | | | | 14,163 | | |
| Blue Sky fees | | | | | 9,726 | | |
| Postage and shipping | | | | | 3,120 | | |
| Miscellaneous fees | | | | | 1,295 | | |
| Total Expense | | | | | 855,750 | | |
| Less: Investment advisory fee waived | | | | | (60,000) | | |
| Net Expense | | | | | 795,750 | | |
| Net Investment Income Before Tax Expense | | | | | 3,114,694 | | |
| Tax Expense | | | | | 254,523 | | |
| Net Investment Income | | | | | 2,860,171 | | |
| Operating Income | | | | | | | |
| Gross profit | | | | | 1,691 | | |
| Operating expense | | | | | (31,995) | | |
| Net Operating Loss | | | | | (30,304) | | |
| Net Investment and Operating Income | | | | | 2,829,867 | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | | | | |
| Realized gain from investment transactions, net of tax expense of $6,751,072 | | | | | 25,396,892 | | |
| Net change in unrealized appreciation of investments, including deferred income tax benefit of $5,658,579 | | | | | (21,287,036) | | |
| Net Realized and Unrealized Gain on Investments | | | | | 4,109,856 | | |
| Net Increase in Net Assets Resulting From Operations | | | | $ | 6,939,723 | | |
STATEMENTS OF CHANGES IN NET ASSETS
| | | Year Ended February 29, 2020 | | | Year Ended February 28, 2019 | | ||||||
Increase in Net Assets from Operations | | | | | | | | | | | | | |
Net investment and operating income, net of income tax (benefit)/expense | | | | $ | 2,829,867 | | | | | $ | 1,899,562 | | |
Net realized gain from investment transactions, net of income tax expense | | | | | 25,396,892 | | | | | | 3,634,684 | | |
Net change in unrealized appreciation (depreciation) of investments, including deferred income tax (benefit)/expense | | | | | (21,287,036) | | | | | | 5,778,752 | | |
Net Increase in Net Assets Resulting From Operations | | | | | 6,939,723 | | | | | | 11,312,998 | | |
Capital Share Transactions | | | | | | | | | | | | | |
Proceeds from shares sold | | | | | 992,771 | | | | | | 820,458 | | |
Payments for shares redeemed | | | | | (10,629,684) | | | | | | (8,617,305) | | |
Net Decrease in Net Assets From Shares of Beneficial Interest | | | | | (9,636,913) | | | | | | (7,796,847) | | |
Net Increase (Decrease) in Net Assets | | | | | (2.697,190) | | | | | | 3,516,151 | | |
Net Assets: | | | | | | | | | | | | | |
Beginning of Year | | | | | 96,493,296 | | | | | | 92,977,145 | | |
End of Year | | | | $ | 93,796,106 | | | | | $ | 96,493,296 | | |
FINANCIAL HIGHLIGHTS
| | | Fiscal Years Ending February 28 or 29, | | |||||||||||||||||||||||||||
| | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | |||||||||||||||
Net Asset Value, Beginning of Year | | | | $ | 110.13 | | | | | $ | 97.69 | | | | | $ | 82.46 | | | | | $ | 71.23 | | | | | $ | 69.81 | | |
Income From Operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment gain | | | | | 3.31 | | | | | | 2.14 | | | | | | 2.61 | | | | | | 2.78 | | | | | | 2.20 | | |
Net gain (loss) from securities (both realized and unrealized) | | | | | 4.07 | | | | | | 10.30 | | | | | | 12.62 | | | | | | 8.45 | | | | | | (0.78) | | |
Total from operations | | | | | 7.38 | | | | | | 12.44 | | | | | | 15.23 | | | | | | 11.23 | | | | | | 1.42 | | |
Net Asset Value, End of Year | | | | $ | 117.51 | | | | | $ | 110.13 | | | | | $ | 97.69 | | | | | $ | 82.46 | | | | | $ | 71.23 | | |
Total Return(b) | | | | | 6.70% | | | | | | 12.73% | | | | | | 18.47% | | | | | | 15.77% | | | | | | 2.03% | | |
Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of year (in 000’s) | | | | $ | 93,796 | | | | | $ | 96,493 | | | | | $ | 92,977 | | | | | $ | 82,429 | | | | | $ | 72,547 | | |
Ratio of total expenses, including net regular and deferred taxes, to average net assets* | | | | | 2.20%(c) | | | | | | 3.93% | | | | | | (12.89)%(d) | | | | | | 7.07% | | | | | | 1.15% | | |
Ratio of net investment and operating income (loss) including net regular and deferred taxes to average net assets | | | | | 1.65%(c) | | | | | | 0.32% | | | | | | 17.43% | | | | | | (2.37)% | | | | | | 3.77% | | |
Portfolio turnover rate | | | | | 24.64% | | | | | | 0.00% | | | | | | 0.97% | | | | | | 0.00% | | | | | | 0.00% | | |
Number of shares outstanding at end of period/year (in thousands) | | | | | 798 | | | | | | 876 | | | | | | 952 | | | | | | 1,000 | | | | | | 1,018 | | |
| Ratio of total expenses, including net regular and deferred taxes, to average net assets* | | | | | 2.14% (c) | | | | | | 3.86% | | | | | | (12.96)%(d) | | | | | | 6.99% | | | | | | 1.06% | | |
| Ratio of net investment and operating income (loss) including net regular and deferred taxes to average net assets | | | | | 1.71%(c) | | | | | | 0.38% | | | | | | 17.50% | | | | | | (2.30)% | | | | | | 3.86% | | |
FINANCIAL HIGHLIGHTS
| Ratio of total expenses including regular to average net assets: | | | | | 1.63% | | |
| Ratio of net investment and operating income to average net assets: | | | | | 2.91% | | |
| With waiver included: | | | | | | | |
| Ratio of total expenses including regular to average net assets: | | | | | 1.55% | | |
| Ratio of net investment and operating income to average net assets: | | | | | 2.98% | | |
STATEMENT OF CASH FLOWS
For the Year Ended February 29, 2020
| Increase (Decrease) in Cash and cash equivalents | | | | | | | |
| Cash flows from operating activities | | | | | | | |
| Dividends and interest received | | | | $ | 4,014,997 | | |
| Other income received | | | | | 5,000 | | |
| Proceeds from disposition of long-term portfolio investments | | | | | 36,020,592 | | |
| Receipts from customers | | | | | 60,901 | | |
| Expense Reimbursement paid by Advisor | | | | | 200,000 | | |
| Expenses paid | | | | | (1,108,591) | | |
| Purchase of long-term portfolio investments | | | | | (29,566,413) | | |
| Payments to suppliers | | | | | (7,504) | | |
| Net cash provided by operating activities | | | | | 9,618,982 | | |
| Cash flows from financing activities | | | | | | | |
| Fund shares issued | | | | | 992,671 | | |
| Fund shares redeemed | | | | | (10,625,234) | | |
| Net cash used in financing activities | | | | | (9,632,563) | | |
| Net decrease in cash and cash equivalents | ��� | | | | (13,581) | | |
| Cash and cash equivalents at beginning of year | | | | | 2,161,592 | | |
| Cash and cash equivalents at end of year | | | | $ | 2,148,011 | | |
| RECONCILIATION OF NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES | | | | | | | |
| Net increase in net assets resulting from operations | | | | $ | 6,939,723 | | |
| Decrease in investments | | | | | 1,251,831 | | |
| Decrease in dividends and interest receivable | | | | | 119,556 | | |
| Increase in other receivable | | | | | (10,069) | | |
| Decrease in trade receivables | | | | | 3,779 | | |
| Decrease in inventory | | | | | 47,994 | | |
| Increase in taxes payable | | | | | 6,822,210 | | |
| Decrease in prepaid expenses and other assets | | | | | 29,614 | | |
| Decrease in accrued expenses | | | | | (4,027) | | |
| Increase in investment advisory fee payable | | | | | 82,905 | | |
| Increase in professional fees payable | | | | | 6,650 | | |
| Decrease in deferred income taxes | | | | | (5,671,184) | | |
| Total adjustments | | | | | 2,679,259 | | |
| Net cash provided by operating activities | | | | $ | 9,618,982 | | |
NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
Assets* | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Common Stock | | | | $ | 112,422,040 | | | | | $ | — | | | | | $ | — | | | | | $ | 112,422,040 | | |
Short-term Investment** | | | | | 1,986,572 | | | | | | — | | | | | | — | | | | | | 1,986,572 | | |
Total | | | | $ | 114,408,612 | | | | | $ | — | | | | | $ | — | | | | | $ | 114,408,612 | | |
NOTES TO FINANCIAL STATEMENTS
| Aggregate gross unrealized appreciation for all investments for which there was an excess of value over cost, net of $14,478,422 tax effect | | | | $ | 54,466,443 | | |
| Aggregate gross unrealized depreciation for all investments for which there was an excess of cost over value, net of $664,434 tax effect | | | | | (2,499,537) | | |
| Net unrealized appreciation net of tax effect | | | | $ | 51,966,906 | | |
|
NOTES TO FINANCIAL STATEMENTS
3. Disclosure of the provisions for income taxes, reconciliation of statutory rate to effective rate, and significant components of deferred tax assets and liabilities. – (continued)
| | | Year Ended February 29, 2020 | | |||
Current: | | | | | | | |
Federal | | | | $ | 7,017,200 | | |
State | | | | | 1,000 | | |
| | | | $ | 7,018,200 | | |
Deferred*: | | | | | | | |
Federal | | | | $ | (5,671,184) | | |
State | | | | | — | | |
| | | | $ | (5,671,184) | | |
Net provision (benefit) for income taxes | | | | $ | 1,347,016 | | |
| Deferred tax liability: | | | | | | | |
| Unrealized gain on investments | | | | $ | 13,813,988 | | |
| Other | | | | $ | 40,193 | | |
| | | | | $ | 13,854,181 | | |
NOTES TO FINANCIAL STATEMENTS
| | | Year Ended February 29, 2020 | | | Year Ended February 28, 2019 | | ||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Shares sold | | | | | 8,561 | | | | | $ | 992,771 | | | | | | 7,908 | | | | | $ | 820,458 | | |
Shares redeemed | | | | | (86,497) | | | | | | (10,629,684) | | | | | | (83,471) | | | | | | (8,617,305) | | |
Net change | | | | | (77,936) | | | | | $ | (9,636,913) | | | | | | (75,563) | | | | | $ | (7,796,847) | | |
| Sales | | | | $ | 57,122 | | |
| Cost of goods sold | | | | | (55,498) | | |
| Gross profit | | | | | 1,624 | | |
| General & administrative expenses | | | | | (6,981) | | |
| Net loss from operations | | | | | (5,357) | | |
| Other income (dividends and interest) | | | | | 67 | | |
| Loss on abandoned assets | | | | | (25,014) | | |
| Net Loss | | | | $ | (30,304) | | |
NOTES TO FINANCIAL STATEMENTS
DISCLOSURE OF FUND EXPENSES
| | | Beginning Account Value (9/1/19) | | | Ending Account Value (2/29/20) | | | Annualized Expense Ratios* | | | Expenses Paid During Period** (9/1/19 – 2/29/20) | | ||||||||||||
Actual Fund Return | | | | $ | 1,000.00 | | | | | $ | 996.52 | | | | | | -0.08% | | | | | $ | (0.42) | | |
Hypothetical 5% Return | | | | $ | 1,000.00 | | | | | $ | 1,025.28 | | | | | | -0.08% | | | | | $ | (0.42) | | |
PRIVACY POLICY
SUPPLEMENTAL DATA
SUPPLEMENTAL DATA – Continued
ABOUT THE FUND'S DIRECTORS AND OFFICERS
Name (Date of Birth) Year Elected | | | Principal Occupations(s) During Past 5 Years and Other Directorships of Public Companies | |
Gary S. Gaines (July 28, 1937) 2009 | | | President of Gary Gaines, Inc., a bag manufacturer since 1965 No Other Directorships | |
Name (Date of Birth) Year Elected (Number of Copley Portfolios Overseen) | | | Principal Occupations(s) During Past 5 Years and Other Directorships of Public Companies | |
David I. Faust, Esq. (February 24, 1941) Counsel and Secretary | | | Partner in Gallet Dreyer & Berkey, LLP, since October 2016. Former partner in Faust Oppenheim LLP, a law firm, since 1979. Counsel to Copley Fund since 2010, Secretary since 2016. Director and President of Copley Financial Services Corp. | |
Roy G. Hale (July 24, 1938) 2011 | | | Certified Public Accountant since 1979 Former Director, Bank of Southern Maryland | |
Name (Date of Birth) Title | | | Principal Occupations(s) During Past 5 Years and Other Directorships of Public Companies | |
Roy G. Hale David I. Faust, Esq. | | | President, Treasurer See above | |
Adam Berkey (November 15, 1988) Assistant Secretary | | | Attorney at Gallet Dreyer & Berkey, LLP No Directorships | |
Copley Financial Services Corp.
c/o Gallet Dreyer & Berkey, LLP
845 Third Ave., 5th Floor
New York, New York 10022
MUFG Union Bank, N.A.
400 California Street
San Francisco, California 94104
Gemini Fund Services
4221 North 203rd Street
Suite 100
Elkhorn, Nebraska 68022
Tel. (402) 493-4603
(877) 881-2751
Fax: (402) 963-9094
Gallet Dreyer & Berkey, LLP
845 Third Avenue, 5th Floor
New York, New York 10022
EisnerAmper LLP
750 Third Avenue
New York, New York 10017
ITEM 2. CODE OF ETHICS
The registrant has adopted a Code of Ethics that applies to the registrant's principal executive officer and principal financial officer. The registrant has not made any amendments to its Code of Ethics during the covered period. The registrant has not granted any waivers from any provisions of the Code of Ethics during the covered period. The registrant undertakes to provide to any person without charge, upon request, a copy of its Code of Ethics by mail when they call the registrant toll free at (212) 935-3131.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
(a)(1) The registrant's Board of Directors function as an audit committee. They have determined that the Board does not have an "audit committee financial expert", as the Securities and Exchange Commission has defined that term. After carefully considering all of the factors involved in the definition of "audit committee financial expert", the Board determined that none of the members of the Board met all five qualifications in the definition, although some members of the Board met some of the qualifications. The Board also determined that while the members have general financial expertise, given the size and type of the Copley Fund, Inc., (the "Fund") and in light of the nature of the accounting and valuation issues that the Fund has presented over the past several years, it did not appear that the members lacked any necessary skill to serve as persons performing functions similar to those who serve on an Audit Committee.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
2020 | 2019 | |
(a) Audit Fees | $53,000* | $51,000* |
(b) Audit Related Fees | None | None |
(c) Tax Fees | $19,500 | $39,000 |
(d) All Other Fees | None | None |
* Audit fee consist principally of fees for audit of the annual financial statements and services related to the semi-annual report. |
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end investment management companies.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end investment management companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable to open-end investment management companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable to open-end investment management companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have evaluated the registrant's disclosure controls and procedures within 90 days of this report. In their opinion, based on their evaluation, the registrant's disclosure controls and procedures are adequately designed, and are operating effectively to ensure, that information required to be disclosed by the registrant in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no significant changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
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.
Copley Fund, Inc. | |||
By: | /s/ Roy Hale | ||
Name: | Roy Hale | ||
Title: | President (Principal Executive Officer) Treasurer (Principal Financial and Accounting Officer) |
Date: May 13, 2020
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.
Copley Fund, Inc. | |||
By: | /s/ Roy Hale | ||
Name: | Roy Hale | ||
Title: | President (Principal Executive Officer) Treasurer (Principal Financial and Accounting Officer) |
Date: May 13, 2020