ThZeal - The Zeal

N-CSRS 1 d75647_n-csrs.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-3056 TRIDAN CORP. (Exact name of registrant as specified in charter) 51 East 42nd Street, 17th floor, New York, NY 10017 (Address of principal executive offices) I. Robert Harris, c/o Kantor, Davidoff, Wolfe, Mandelker & Kass, P.C. 51 East 42nd Street, New York, NY 10017 (Name and address of agent for service) Registrant's telephone number, including area code: (212) 239-0515 Date of fiscal year end: April 30, 2009 Date of reporting period: October 31, 2008 Item 1. Reports to Stockholders. Attached on the following pages is a copy of the registrant's semi-annual report as of October 31, 2008 transmitted to stockholders. TRIDAN CORP. -------------------------------------------------------------------------------- P.O. Box 634, New City, N.Y. 10956 (212) 239-0515 SEMI-ANNUAL REPORT December 26, 2008 Dear Shareholder: This semi-annual report of Tridan Corp. covers the six-month period from May 1, 2008 to October 31, 2008. As part of this report, we enclose the unaudited financial report for that six-month period and for the corresponding period in 2007. A schedule of the company's portfolio holdings at October 31, 2008, consisting entirely of municipal obligations, is included in the financial report. The company invests exclusively in non-voting securities. The company files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The company's Forms N-Q are available on the Commission's website at http://www.sec.gov. They may be reviewed and copied at the Commission's Public Reference Room in Washington D.C., and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The net asset value per share at October 31, 2008 was $11.62, compared with $12.00 at October 31, 2007. Net investment income per share was $.19 for the six-month period ended October 31, 2008, compared with $.19 for the six-month period ended October 31, 2007. At the company's last annual meeting on June 17, 2008, the reappointment of Weiser LLP as the company's auditors for the fiscal year ending April 30, 2009 was ratified by the shareholders as follows: Shares Voted For 2,793,406 Shares Voted Against None Shares Abstaining None Tridan Corp. December 26, 2008 Page - 2 - Also at the last annual meeting, the incumbent directors, all of whom are named below, were all reelected to serve as directors until the next annual meeting of shareholders, or until their successors are elected and have qualified. Shares Voted For Shares Withheld ---------------- --------------- Mark Goodman 2,793,406 None Peter Goodman " " Paul Kramer " " Jay S. Negin " " Warren F. Pelton " " Russell J. Stoever " " During the six-month period ended October 31, 2008, no director or officer received any compensation from the company except for fees of $6,000 paid to each director, plus an additional $2,500 to Paul Kramer as chairman of the audit committee. All executive officers of the company as a group (two persons) received compensation (comprised solely of said directors' fees) aggregating $12,000 during said period (which excludes professional fees paid to the law firm of which I. Robert Harris, secretary of the company, is a member). At its meeting on May 22, 2008, the Board of Directors unanimously approved the renewal of the company's investment advisory agreement with J.P. Morgan Investment Management Inc. for the period July 1, 2008 to June 30, 2009 . The board considered a variety of material factors and conclusions with respect thereto that formed the basis for the board's approval, as discussed below. Throughout the year, the directors received and analyzed a substantial quantity of comprehensive information and written materials, including ongoing analysis of Tridan's existing portfolio and Morgan's recommendations in light of its forecasts for the economy, employment trends, business conditions, federal rate moves, interest trends including comparisons between tax-exempt and taxable bonds, appropriate maturities, quality, yields, diversification, etc. The directors subject Morgan's portfolio management to scrutiny at each board meeting, including examination of transactions completed since the prior meeting and an overview of the entire portfolio. Written materials received by the directors before and during each meeting include reports, statistics, charts, graphs, performance records, comparisons with other funds and the like. Morgan is constantly questioned at great length regarding its views, its recommendations and its performance. In addition to the foregoing, as requested by Tridan's corporate counsel pursuant to Section 15(c) of the Investment Company Act of 1940, Morgan submitted its audited Tridan Corp. December 26, 2008 Page - 3 - financial statements and detailed information regarding Morgan's business, personnel and operations, advisory services, compensation matters, portfolio strategy, investment performance, sources of information, fee comparisons, compliance programs, and other matters of significance to the relationship between Tridan and its investment adviser, all of which material was furnished to each director. The directors reviewed all of this material and discussed the same at length, as well as their own views on Morgan's previous performance and relationship with Tridan, with particular attention to the following areas: Investment Performance At each meeting, the directors receive, review and discuss with Morgan's representatives various data showing Tridan's portfolio characteristics, including market value, average duration, credit quality, coupon, estimated annual income and yield statistics, and breakdown information regarding duration, credit, and investment sectors. Morgan's quarterly presentation also includes the portfolio performance over three months, year to date, one year, three years, five years and ten years, compared with the Lipper NY Intermediate Muni Debt Funds, JPMorgan NY Tax Free Bond Fund, Sanford Bernstein NY Muni Fund, and Lehman 1-17 Year NY Muni Bond Index. Based on their review, the directors all agreed that Tridan's relative investment performance has been satisfactory. Nature, Extent and Quality of Service The board's analysis of the nature, extent and quality of Morgan's services to Tridan was based on knowledge gained over time from discussions with management and at the board's regular meetings. In addition, the directors reviewed materials contained in Morgan's response to Tridan's 15(c) Questionnaire pursuant to the Investment Company Act of 1940, and its Form ADV under the Investment Advisers Act of 1940 concerning, among much other information, the qualifications, education and experience of Morgan's personnel involved in rendering those services. As Tridan's investment adviser, Morgan manages the investment of the Company's assets, including purchases and sales of securities, and arranges for the periodic transfer of cash required to pay expenses and make distributions to shareholders. Morgan also provides clerical and bookkeeping services, and prepares and issues periodic reports and statements. Its affiliate maintains custody of Tridan's securities and provides access thereto upon request. The board considered its adviser's performance of these administrative and support services, including monitoring adherence to the company's investment policies, guidelines and restrictions, Morgan's responsiveness to requests by Tridan's counsel for periodic information, reports and certifications required for compliance with securities laws and regulations, and maintaining and monitoring their respective compliance programs in light of today's extensive regulatory requirements. The board concluded that the nature, extent Tridan Corp. December 26, 2008 Page - 4 - and quality of the services provided by Morgan to the company have been and continue to be appropriate and beneficial. Fees Under its Investment Advisory Agreement with Morgan, Tridan pays an annual fee, computed and payable quarterly, equal to 0.28% of its net assets under management. The agreement requires Morgan to bear all expenses incurred by it in connection with its activities under the agreement, without any reimbursement from the company. In addition, there is no charge made to Tridan for maintaining custody of the company's securities and for custodial-related services rendered by Morgan and its affiliates. In light of the nature, extent and quality of the services received by Tridan from Morgan and its affiliated companies, and comparing the management fees charged by Morgan to other fixed-income investment companies managed by it, all of which are many times larger than Tridan, the Board considers Morgan's management fee to Tridan to be reasonable. After full consideration of the above factors, the board concluded unanimously that renewal of the investment advisory agreement with J.P. Morgan Investment Management Inc. was in the best interest of Tridan and its shareholders. Sincerely TRIDAN CORP. Peter Goodman, President TRIDAN CORP. FINANCIAL REPORT (Unaudited) OCTOBER 31, 2008 AND 2007 TRIDAN CORP. (Unaudited) TABLE OF CONTENTS -------------------------------------------------------------------------------- ------- P a g e ------- Accountant's Report 1 Financial Statements Statements of Assets and Liabilities 2 Schedules of Investments in Municipal Obligations 3 Statements of Operations 7 Statements of Changes in Net Assets 8 Notes to Financial Statements 9 [Letterhead of Scialo & Company CPA, P.C.] To the Shareholders and Board of Directors Tridan Corp. We have compiled the accompanying statements of assets and liabilities, and schedules of investments in municipal obligations of Tridan Corp. as of October 31, 2008 and 2007, the related statements of operations for the six months then ended and changes in net assets for the six months ended October 31, 2008, and financial highlights (Note 6 to the financial statements) for each period in the six months ended October 31, 2004 through 2008, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. A compilation is limited to presenting in the form of financial statements information that is the representation of management. We have not audited or reviewed the aforementioned financial statements and financial highlights and, accordingly, do not express an opinion or any other form of assurance on them. The statement of changes in net assets for the year ended April 30, 2008 was derived from financial statements that were audited by another accounting firm. Their report, dated May 30, 2008, expressed an unqualified opinion thereon, but they have not performed any auditing procedures since that date. We are not independent with respect to Tridan Corp. Scialo & Company CPA, P.C. Ramsey, New Jersey December 4, 2008 TRIDAN CORP. STATEMENTS OF ASSETS AND LIABILITIES -------------------------------------------------------------------------------- (Unaudited)

-------------------------------------------------------------------------------- See accompanying notes and accountant's report. - 2 - TRIDAN CORP. SCHEDULES OF INVESTMENTS IN MUNICIPAL OBLIGATIONS -------------------------------------------------------------------------------- (Unaudited)

-------------------------------------------------------------------------------- See accompanying notes and accountant's report. - 3 - TRIDAN CORP. SCHEDULES OF INVESTMENTS IN MUNICIPAL OBLIGATIONS -------------------------------------------------------------------------------- (Unaudited)

-------------------------------------------------------------------------------- See accompanying notes and accountant's report. - 4 - TRIDAN CORP. SCHEDULES OF INVESTMENTS IN MUNICIPAL OBLIGATIONS -------------------------------------------------------------------------------- (Unaudited)

-------------------------------------------------------------------------------- See accompanying notes and accountant's report. - 5 - TRIDAN CORP. SCHEDULES OF INVESTMENTS IN MUNICIPAL OBLIGATIONS -------------------------------------------------------------------------------- (Unaudited)

-------------------------------------------------------------------------------- See accompanying notes and accountant's report. - 6 - TRIDAN CORP. STATEMENTS OF OPERATIONS -------------------------------------------------------------------------------- (Unaudited)

-------------------------------------------------------------------------------- See accompanying notes and accountant's report. - 7 - TRIDAN CORP. STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------

-------------------------------------------------------------------------------- See accompanying notes and accountant's report. - 8 - TRIDAN CORP. NOTES TO FINANCIAL STATEMENTS SIX MONTHS ENDED OCTOBER 31, 2008 AND 2007 -------------------------------------------------------------------------------- 1. Significant Accounting Policies The following is a summary of the significant policies followed by Tridan Corp. (the "Company"), a closed-end, non-diversified management investment company registered under the Investment Company Act of 1940, in the preparation of its financial statements. Acquisition and Valuation of Investments Investment transactions are accounted for on the date the securities are purchased/sold (trade date) and interest on securities acquired/sold is included in income from/to the settlement date. Investments are carried at amortized cost in the Company's accounting records but are shown at market value in the accompanying financial statements. Short-term investments are stated at cost, which is equivalent to market value. Fair values for the Company's investments in municipal obligations have been determined based on the bid price of the obligation, if available; if not available, such value is based on a yield matrix for similarly traded municipal obligations. Securities for which quotations are not readily available are valued at fair value as determined by the Board of Directors. There were no securities valued by the Board of Directors, which quotations were not readily available as of October 31, 2008 and 2007. Amortization of Bond Premium or Discount In determining investment income, bond premiums or discounts are amortized over the remaining term of the obligation. Income Taxes It is the Company's policy to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no income tax provision is required; however, the Company is subject to minimum New York State and local franchise taxes. Interest income from municipal investments are exempt from Federal and state income taxes. Cash and Cash Equivalents The Company considers all investments that can be liquidated on demand to be cash equivalents. October 31, 2008 2007 ---------- ---------- Cash $ 8,317 $ 2,971 Cash equivalents - demand bonds and notes 467,625 63,046 ---------- ---------- $ 475,942 $ 66,017 ========== ========== -------------------------------------------------------------------------------- See accountant's report. - 9 - TRIDAN CORP. NOTES TO FINANCIAL STATEMENTS SIX MONTHS ENDED OCTOBER 31, 2008 AND 2007 -------------------------------------------------------------------------------- 1. Significant Accounting Policies (continued) The Company maintains all of its cash and cash equivalents in one financial institution. At times, such balances may be in excess of amounts insured by the Federal Deposit Insurance Corporation. 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 liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Significant estimates are used when accounting for the valuation of securities and the realization of investment. Concentration of Credit Risk The value of the Company's investments may be subject to possible risks involving, among other things, the continued creditworthiness of the various state and local government agencies and public financing authorities underlying its investments. The Company and its investment advisor periodically consider the credit quality of the Company's investments, and the Company adheres to its investment objective of investing only in investment grade securities. 2. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following at: October 31, 2008 2007 ---------- ---------- Accrued investment advisory fees (a) $ 25,000 $ 26,000 Accrued fee - affiliate (b) 24,123 50,185 Accrued accounting fees and other 20,360 20,000 ---------- ---------- $ 69,483 $ 96,185 ========== ========== (a) The Company utilizes the services of J.P. Morgan Investment Management, Inc. ("J.P Morgan") as its investment advisor and custodian for its investments. The annual advisory fee is .28 of one percent of the net assets under management. The fee is computed and payable quarterly, based on the aggregate fair value of the net assets on the last day of each fiscal quarter. -------------------------------------------------------------------------------- See accountant's report. - 10 - TRIDAN CORP. NOTES TO FINANCIAL STATEMENTS SIX MONTHS ENDED OCTOBER 31, 2008 AND 2007 -------------------------------------------------------------------------------- 2. Accounts Payable and Accrued Liabilities (continued) (b) For the six months ended October 31, 2008 and 2007, the Company incurred legal fees of approximately $50,400 and $49,050, respectively, paid to the law firm of which an officer of the Company is a Member. (c) For the six months ended October 31, 2008 and 2007, the Company incurred audit fees of approximately $20,000 for each period. 3. Investment Transactions Purchases and sales of investments in municipal obligations (excluding short-term and demand investments) amounted to approximately $4,154,561 and $3,457,872, respectively, for the six months ended October 31, 2008 and $2,215,929 and $2,135,420, respectively, for the six months ended October 31, 2007. The U.S. Federal income tax basis of the Company's investments, at October 31, 2008 and 2007, was approximately $35,695,432 and $36,168,600, respectively, and net unrealized appreciation (depreciation) at October 31, 2008 and 2007, for U.S. Federal income tax purposes was approximately $(542,999) and $665,841, respectively (gross unrealized appreciation of approximately $448,325 and $684,224, respectively, gross unrealized depreciation of approximately $991,324 and $18,383, respectively. 4. Common Stock, Net Asset Values and Share Redemption Plan At October 31, 2008 and 2007, there were 6,000,000 shares of $0.02 par value common stock authorized of which 3,199,100 had been issued aggregating $63,982, and additional paid-in capital aggregating $312,787. The Company's share redemption plan permits "eligible shareholders" or their estates to have their shares redeemed upon reaching age 65 or upon death. Shares are redeemed at the net asset value per share as of the end of the Company's fiscal quarter in which the request for redemption is received. At October 31, 2008 and 2007, $1,085,376 (92,338.3216 shares), $1,067,546 (90,843.7219 shares), respectively, had been redeemed under this plan. The net asset value per share is calculated by dividing the value of all assets less total liabilities by the number of common shares outstanding at the end of the period. The net asset value per share and the shares outstanding were as follows: October 31, 2008 2007 ----------- ----------- Net asset value: - at market value of the underlying investments $ 11.62 $ 12.00 - at amortized cost $ 11.79 $ 11.78 -------------------------------------------------------------------------------- See accountant's report. - 11 - TRIDAN CORP. NOTES TO FINANCIAL STATEMENTS SIX MONTHS ENDED OCTOBER 31, 2008 AND 2007 -------------------------------------------------------------------------------- 4. Common Stock, Net Asset Values and Share Redemption Plan (continued) Shares outstanding at: October 31, 2008 3,106,761.6784 October 31, 2007 3,108,256.2781 5. Distributions During the six months ended October 31, 2008 and 2007, distributions of $714,720 ($.23 per share) and $715,722 ($.23 per share), respectively, were declared and paid to shareholders, which, except for capital gains of $0 in 2008 and $0 in 2007, were exempt from Federal income taxes. Distributions for the year ended April 30, 2008 were $1,181,986 ($.38 per share) and were exempt from Federal income taxes except for $0 of capital gains. The tax character of distributions paid during the six months ended October 31, 2008 and 2007 and the year ended April 30, 2008 were as follows:

As of October 31, 2008 and 2007 and April 30, 2008, the components of distributable earnings on a tax basis were as follows:

The Company has $37,501 of capital loss carry forwards as of October 31, 2008. The Company had no capital reclassification related to permanent book/tax differences for the six months ending October 31, 2008 and 2007. -------------------------------------------------------------------------------- See accountant's report. - 12 - TRIDAN CORP. NOTES TO FINANCIAL STATEMENTS SIX MONTHS ENDED OCTOBER 31, 2008 AND 2007 -------------------------------------------------------------------------------- 6. Financial Highlights Selected per share data and ratios

-------------------------------------------------------------------------------- See accountant's report. - 13 - Item 2. Code of Ethics Not required in this report. Item 3. Audit Committee Financial Expert Not required in this report. Item 4. Principal Accountant Fees and Services Not required in this report. Item 5. Audit Committee of Listed Registrants. Not required in this report. Item 6. Investments. (a) A schedule of registrant's investments in securities of unaffiliated issuers as of October, 31, 2008 is included as part of the financial statement filed under Item 1 of this Form. (b) Not applicable Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable, because the registrant invests exclusively in non-voting securities. Item 8. Portfolio Managers of Closed-End Management Investment Companies. No change in the portfolio managers identified in the registrant's most recent annual report on Form N-CSR. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable, because the registrant has no equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934 Item 10. Submission of Matters to a Vote of Security Holders. The registrant does not have in place procedures by which shareholders may recommend nominees to the registrant's board of directors. Item 11. Controls and Procedures (a) The registrant's principal executive and principal financial officers have evaluated the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)) as of the end of the period covered by this report. Based on that evaluation, said officers have concluded that the registrant's disclosure controls and procedures are effective to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported within the required time periods. (b) There was no change in the registrant's internal control over financial reporting that occurred during its 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 (a) The following exhibits are filed herewith: (2) The separate certifications for the registrant's principal executive and principal financial officers. SIGNATURES Pursuant to the requirements of 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) Tridan Corp. -------------------------------------------------------------------- By (Signature and Title) /S/ Peter Goodman -------------------------------------------------------- Peter Goodman, President and Chief Executive Officer Date: December 26, 2008 Pursuant to the requirements of 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 (Signature and Title) /S/ Peter Goodman -------------------------------------------------------- Peter Goodman, President and Chief Executive Officer Date: December 26, 2008 By (Signature and Title) /S/ Warren F. Pelton -------------------------------------------------------- Warren F. Pelton, Treasurer and Chief Financial Officer Date: December 26, 2008