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: 811-9060
----------
HOLLAND SERIES FUND, INC.
(Exact name of registrant as specified in charter)
375 PARK AVENUE
NEW YORK, NEW YORK 10152
(Address of principal executive offices)(Zip code)
(Name and Address of Agent for Service) Copy to:
Michael Holland State Street Bank and Trust Company
President and Treasurer David James, Esq.
Holland Series Fund, Inc. 4 Copley Place, 5th Floor
375 Park Avenue Boston, Massachusetts 02116
New York, New York 10152
and
Timothy Diggins, Esq.
Ropes & Gray
One International Place
Boston, Massachusetts 02110
Registrant's telephone number, including area code: (800) 304-6552
Date of fiscal year end: September 30th
Date of reporting period: March 31, 2010
ITEM 1: SHAREHOLDER REPORT
[IMAGE]
HOLLAND BALANCED FUND
Semi - Annual Report
March 31, 2010 (Unaudited)
- ----------------------------
<Table>
CONTENTS
Letter from the President.. 1
Cumulative Performance..... 2
Management Discussion of
Fund Performance and
Notes to Performance..... 3
Statement of Net Assets.... 5
Statement of Operations.... 8
Statements of Changes in
Net Assets............... 9
Financial Highlights....... 10
Notes to Financial
Statements............... 11
Unaudited Information...... 17
</Table>
Holland Series Fund, Inc.
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Holland Balanced Fund - LETTER FROM THE PRESIDENT
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March 31, 2010
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(M. HOLLAND PHOTO)
Dear Fellow Shareholders:
Our Fund has continued, in the current environment, to reap the benefits of our
investment policy.
In a challenging world, select equity holdings in some of the world's strongest
and most competitive companies afforded us the opportunity to "sleep well" when
things looked bleakest... but also to be rewarded when things moved to a more
normal mode. I believe the same characteristics apply to our fixed income
holdings which are primarily U.S. Treasury quality, short maturity, and
inflation-protected.
Our Fund's cumulative total return since inception (October 2, 1995 through
March 31, 2010) is 112.30%. For the six months ended March 31, 2010, our Fund's
total return is 8.21%, compared to 7.63% for the Lipper Balanced Fund Index and
10.63% for the S&P 500 Index.
With Bullish Regards,
/s/ Michael F. Holland
Michael F. Holland
President and Founder
Performance data quoted represents past performance. Past performance does not
guarantee future results. All performance assumes reinvestment of dividends and
capital gains. The investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. Current performance may be lower or higher than the
performance data quoted. Performance data current to the most recent month-end
may be obtained by calling: 1-800-304-6552.
1
Holland Series Fund, Inc.
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Holland Balanced Fund - CUMULATIVE PERFORMANCE (UNAUDITED)
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March 31, 2010
- --------------------------------------------------------------------------------
Set forth below are the cumulative total return figures for the periods
indicated and a graph showing a hypothetical $10,000 investment made in the
Holland Balanced Fund, Standard & Poors 500 Index, 90 Day US Treasury Bill and
the Lipper Balanced Fund Index on October 2, 1995. The cumulative and annualized
total return figures and the information in the graph represent past performance
and are not indicative of future results. The total returns reflect changes in
price of the Fund's shares and assume that any income dividends and/or capital
gain distributions made by the Fund during the period were reinvested in
additional shares of the Fund. Investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. Fund annual operating expenses net
of advisory fee waivers as of March 31, 2010 is 1.50%.
(LINE GRAPH)
INVESTMENT PERFORMANCE
For the Periods Ended March, 2010
<Table>
<Caption>
Average Total Return
Annualized Cumulative
Average Average SINCE SINCE
Annualized Annualized INCEPTION INCEPTION
Return over the period One Year Five Year Ten Year (10/2/95) (10/2/95)
- ---------------------------------------------------------------------------------------------------
HOLLAND BALANCED FUND (A) 28.82% 3.20% 0.92% 5.33% 112.30%
Lipper Balanced Fund Index (b) 36.03% 3.68% 2.88% 6.34% 143.73%
Standard & Poor's 500 Index (b) 45.48% -0.34% -2.52% 4.84% 98.62%
90 Day US Treasury Bill (b) 0.11% 2.64% 2.57% 3.34% 61.15%
- ---------------------------------------------------------------------------------------------------
</Table>
2
Holland Series Fund, Inc.
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Holland Balanced Fund - MANAGEMENT DISCUSSION OF
FUND PERFORMANCE (UNAUDITED)
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March 31, 2010
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Since inception (October 2, 1995 through March 31, 2010), our fund's cumulative
total return was 112.30% compared to 143.73% for the Lipper Balanced Fund Index,
which is an unmanaged index. For the past six months ended March 31, 2010, our
fund's total return was 8.21% compared to 7.63% for the Lipper Index.
During the period, small and mid-sized companies' equity prices outperformed the
overall market as aversion to risk diminished. Nevertheless, many of our large
capitalization equity holdings kept pace. This was evident in the financial
sector, for example, with American Express Co.
On the negative side, our investment in Exxon Mobil Corp., which has been very
rewarding over the years, was among the lowest positive investment returns
during the period.
Portfolio composition by sector
(AS A % OF TOTAL NET ASSETS) - UNAUDITED
- --------------------------------------------------------------------------------
(PIE CHART)
3
Holland Series Fund, Inc.
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Holland Balanced Fund - MANAGEMENT DISCUSSION OF
FUND PERFORMANCE (UNAUDITED) (concluded)
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NOTES TO PERFORMANCE
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(a) Reflects waiver of fees and reimbursement of expenses by investment adviser.
Absent such waiver and reimbursement, the Fund's total return would have
been lower.
(b) The Lipper Balanced Fund Index is an index of open-end mutual funds whose
primary objective is to conserve principal by maintaining at all times a
balanced portfolio of both stocks and bonds. Typically, the stock/bond ratio
ranges around 60%/40%. The Standard & Poors 500 Index is a capitalization-
weighted index of 500 widely held stocks recognized by investors to be
representative of the stock market in general. The 90-Day U.S. Treasury Bill
rate is the average return on three month U.S. Treasury Bills. The Standard
& Poors 500 Index is unmanaged and does not reflect the actual cost of
investing in the instruments that comprise each index. You cannot invest
directly in an index.
4
Holland Series Fund, Inc.
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Holland Balanced Fund - STATEMENT OF NET ASSETS
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<Table>
<Caption>
March 31, 2010 (Unaudited) Shares Value(+)
- -----------------------------------------------------------------------
COMMON STOCKS-68.7%
COMPUTERS-4.6%
International Business Machines Corp. 11,500 $ 1,474,875
-----------
ELECTRONICS-9.7%
3M Co. 16,100 1,345,477
Intel Corp. 77,800 1,731,828
-----------
3,077,305
-----------
ENTERTAINMENT & LEISURE-5.1%
The Walt Disney Co. 46,000 1,605,860
-----------
FINANCIAL-6.4%
American Express Co. 27,500 1,134,650
JPMorgan Chase & Co. 20,000 895,000
-----------
2,029,650
-----------
FOOD & BEVERAGES-4.2%
PepsiCo, Inc. 20,000 1,323,200
-----------
INSURANCE-8.0%
Berkshire Hathaway, Inc. Class A* 11 1,339,800
Chubb Corp. 23,000 1,192,550
-----------
2,532,350
-----------
OIL/GAS-8.6%
Exxon Mobil Corp. 19,000 1,272,620
Schlumberger, Ltd. 22,800 1,446,888
-----------
2,719,508
-----------
PHARMACEUTICALS-4.4%
Johnson & Johnson 21,500 1,401,800
-----------
PRODUCER GOODS-3.0%
General Electric Co. 52,900 962,780
-----------
RETAIL-5.6%
Home Depot, Inc. 21,000 679,350
Wal-Mart Stores, Inc. 20,000 1,112,000
-----------
1,791,350
-----------
SOFTWARE-4.7%
Microsoft Corp. 51,000 1,492,770
-----------
TELECOMMUNICATIONS-4.4%
Comcast Corp. Class A 75,000 1,411,500
-----------
Total Common Stocks
(Cost-$18,599,097) 21,822,948
-----------
</Table>
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See Accompanying Notes to the Financial Statements.
5
Holland Series Fund, Inc.
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Holland Balanced Fund - STATEMENT OF NET ASSETS (continued)
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<Table>
<Caption>
March 31, 2010 (Unaudited) Principal Value(+)
- -----------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES-29.0%
U.S. TREASURY NOTES-29.0%
United States Treasury Note, 5.000%
due 2/15/11 $ 500,000 $ 520,136
United States Treasury Note**, 3.500%
due 1/15/11 8,402,873 8,700,259
-----------
Total U.S. Government Securities
(Cost-$8,932,922) 9,220,395
-----------
REPURCHASE AGREEMENT-2.2%
State Street Bank and Trust Co.
Repurchase Agreement, 0.00% due
04/01/10 in the amount of
$699,000; issued 03/31/10
(Collateralized by $700,000
FHLB, 0.28% due 09/17/10
with a market value of $714,350)
(Cost $699,000) 699,000 699,000
-----------
Total Investments-99.9%
(Cost-$28,231,019) 31,742,343
-----------
OTHER ASSETS IN EXCESS OF
LIABILITIES-0.1% 24,191
-----------
NET ASSETS-100%
Applicable to 2,114,501 outstanding
$0.01 par value shares (authorized
1,000,000,000) $31,766,534
===========
Net asset value, offering price and
redemption price per share $ 15.02
===========
</Table>
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See Accompanying Notes to the Financial Statements.
6
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS (concluded)
- --------------------------------------------------------------------------------
<Table>
<Caption>
March 31, 2010 (Unaudited)
- ----------------------------------------------------------------
COMPONENTS OF NET ASSETS AS OF MARCH 31, 2010
Capital stock at par value ($0.01)................. $ 21,145
Capital stock in excess of par value............... 28,019,114
Undistributed net investment income................ 96,369
Net accumulated realized gain on investments in
securities....................................... 118,582
Net unrealized appreciation on investments in
securities....................................... 3,511,324
-----------
Net Assets.................................... $31,766,534
===========
</Table>
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See Accompanying Notes to the Financial Statements.
* Non-income producing
** Treasury Inflation-Protected Security (TIPS)
+ See Note 2 to Financial Statements
7
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Six Months Ended March 31, 2010 (Unaudited)
- ----------------------------------------------------------------
INVESTMENT INCOME:
Dividends........................................... $ 228,706
Interest income (Note 2)............................ 190,765
----------
Total investment income........................ 419,471
----------
EXPENSES:
Investment advisory fees (Note 3)................... 118,480
Administration and custody fees (Note 4)............ 70,529
Transfer agent fees................................. 35,781
Shareholder reports................................. 25,479
Registration fees................................... 13,605
Insurance fees...................................... 11,710
Audit fees.......................................... 10,946
Legal fees.......................................... 8,350
Directors' fees..................................... 8,296
Miscellaneous expenses.............................. 831
----------
Total operating expenses....................... 304,007
Waiver of investment advisory fee (Note 3)..... (67,048)
----------
Net Expenses................................... 236,959
----------
Net investment income............................... 182,512
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments.................... 237,337
Net change in unrealized appreciation............... 2,083,679
----------
Net realized and unrealized gain on
investments.................................. 2,321,016
----------
Net increase in net assets resulting from
operations................................... $2,503,528
==========
</Table>
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See Accompanying Notes to the Financial Statements.
8
Holland Series Fund, Inc.
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Holland Balanced Fund - STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Six Months Ended
March 31, Year Ended
2010 September 30,
(Unaudited) 2009
- --------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income................... $ 182,512 $ 207,773
Net realized gain....................... 237,337 322,878
Net change in unrealized
appreciation/(depreciation) on
investments........................... 2,083,679 (2,448,944)
----------- -----------
Increase/(Decrease) in net assets from
operations............................ 2,503,528 (1,918,293)
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................... (219,420) (307,600)
Net realized gains...................... (415,970) (796,209)
----------- -----------
Total distributions..................... (635,390) (1,103,809)
----------- -----------
CAPITAL SHARE TRANSACTIONS, NET (NOTE
9).................................... (1,397,192) (2,649,067)
----------- -----------
Increase/(Decrease) in Net Assets....... 470,946 (5,671,169)
----------- -----------
NET ASSETS:
Beginning of period................ 31,295,588 36,966,757
----------- -----------
End of period...................... $31,766,534 $31,295,588
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME,
END OF PERIOD......................... $ 96,369 $ 133,277
=========== ===========
</Table>
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See Accompanying Notes to the Financial Statements.
9
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Six Months
For a capital share Ended March 31,
outstanding 2009 For the Year Ended
throughout each period (Unaudited) 9/30/09 9/30/08 9/30/07 9/30/06 9/30/05
- -----------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value,
beginning of period $ 14.16 $ 15.29 $ 17.39 $ 16.38 $ 15.41 $ 15.04
------- ------- ------- ------- ------- -------
INCREASE/ DECREASE FROM
INVESTMENT OPERATIONS:
Net investment income 0.09 0.09 0.35 0.23 0.25 0.29
Net realized and
unrealized gain (loss)
on investments 1.06 (0.76) (1.60) 1.58 0.95 0.38
------- ------- ------- ------- ------- -------
Total income (loss)
from operations 1.15 (0.67) (1.25) 1.81 1.20 0.67
------- ------- ------- ------- ------- -------
LESS DIVIDENDS AND
DISTRIBUTIONS FROM:
Net investment income (0.10) (0.13) (0.29) (0.24) (0.23) (0.30)
Net realized gain on
investments (0.19) (0.33) (0.56) (0.56) -- --
------- ------- ------- ------- ------- -------
Total dividends and
distributions (0.29) (0.46) (0.85) (0.80) (0.23) (0.30)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 15.02 $ 14.16 $ 15.29 $ 17.39 $ 16.38 $ 15.41
======= ======= ======= ======= ======= =======
TOTAL RETURN 8.21%(a),(b) (3.97)%(a) (7.42)%(a) 11.33%(a) 7.90%(a) 4.48%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's) $31,767 $31,296 $36,975 $44,348 $46,591 $50,454
Ratio of expenses to
average net assets
before fee waivers and
reimbursement of other
expenses 1.92%(c) 1.88% 1.63% 1.66% 1.71% 1.45%
Ratio of expenses to
average net assets
after fee waivers and
reimbursement of other
expenses 1.50%(c) 1.50% 1.50% 1.50% 1.50% 1.45%
Ratio of net investment
income to average net
assets after fee
waivers and
reimbursement of other
expenses 1.16%(c) 0.69% 2.09% 1.34% 1.57% 1.89%
Portfolio turnover 0.00%(b) 2.54% 1.96% 1.22% 2.94% 7.60%
</Table>
- --------------------------------------------------------------------------------
See Accompanying Notes to the Financial Statements.
(a) Total return would have been lower had certain expenses not been waived or
reimbursed.
(b) Not annualized.
(c) Annualized.
10
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
March 31, 2010 (Unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Holland Series Fund, Inc. (the "Company") was organized as a Maryland
corporation on June 26, 1995 and is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end, management investment
company. The Company currently has one portfolio, the Holland Balanced Fund (the
"Fund").
Investment Objective
The Fund is designed to provide investors with a convenient and professionally
managed vehicle for seeking a high total investment return. Total investment
return is the aggregate of dividend and interest income and realized and
unrealized capital gains/losses on investments, less expense. The Fund seeks to
achieve its objective through a combined portfolio of equity and investment
grade fixed-income securities.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements as well as the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from those
estimates.
Management has evaluated the impact of all events or transactions occurring
after period end through the date these financial statements were issued, and
has determined that there were no subsequent events requiring recognition or
disclosure.
Securities
Securities transactions are accounted for as of the trade date. Interest income
and expenses are recorded on an accrual basis. The Fund amortizes discount or
premium using the yield-to-maturity method on a daily basis, except for
securities having a maturity date of sixty days or less at the time of
acquisition which are amortized on a straight-line basis. Dividend income is
recorded on the ex-dividend date. The Fund uses the specific identification
method for determining gain or loss on sales of securities.
The Fund may invest in Treasury Inflation-Protected Securities (TIPS). The
principal value and interest payout of TIPS are periodically adjusted according
to the rate of inflation based on the Consumer Price Index. The adjustments for
interest income due to the inflation are reflected in interest income in the
Statement of Operations.
Indemnifications
Under the Fund's organizational documents, its Officers and Directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, in the normal course of business the Fund
enters into contracts that provide general indemnifications to other parties.
The Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Fund that have not yet
occurred. However, based on experience, the Fund does not expect any significant
claims.
11
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2010 (Unaudited)
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Tax
There is no provision for federal income or excise tax since the Fund continues
to qualify as a regulated investment company ("RIC") and intends to comply with
the requirements of Subchapter M of the Internal Revenue Code of 1986, as
ammended, applicable to RICs and to distribute substantially all of its taxable
income and realized gains.
Valuation
Securities traded on an exchange are valued at their last sales price on that
exchange. Securities for which over-the-counter market quotations are available
are valued at the latest bid price. The Fund uses the NASDAQ Official Closing
Price. Debt securities purchased with sixty days or less remaining to maturity
are valued at amortized cost which approximates fair value.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by or under the procedures adopted by the
Board of the Directors of the Fund.
In accordance with the authoritative guidance on fair value measurements and
disclosures under GAAP, the Fund discloses the fair value of its investments in
a hierarchy that prioritizes the inputs to valuation techniques used to measure
the fair value. The three-tier hierarchy of inputs is summarized in the three
broad levels listed below. The Fund's hierarchy can be found below.
The three-tier hierarchy of inputs is summarized in the three broad levels
listed below.
- Level 1 - quoted prices in active markets for identical investments
- Level 2 - other significant observable inputs (including quoted prices
for similar investments, interest rates, prepayment speeds, credit risk,
etc.)
- Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used as of March 31, 2010 in valuing
the Fund's investments carried at value:
<Table>
<Caption>
- ---------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
- ---------------------------------------------------------------------------------
Investments in Securities
Common Stocks $21,822,948 $ -- $ -- $21,822,948
Short Term Investments -- 699,000 -- 699,000
U.S. Government
Securities -- 9,220,395 -- 9,220,395
----------- ---------- ---------- -----------
TOTAL $21,822,948 $9,919,395 $-- $31,742,343
=========== ========== ========== ===========
- ---------------------------------------------------------------------------------
</Table>
12
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2010 (Unaudited)
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Distributions to Shareholders
The Fund distributes income quarterly and capital gains annually. Distributions
from net short-term capital gains and net long-term capital gains, if any, will
typically be declared and paid in December. To the extent that a net realized
capital gain can be reduced by a capital loss carryover, such gain will not be
distributed.
Distributions to shareholders are recorded on the ex-date of the dividend or the
distribution. Distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations, which
may differ from those amounts determined under accounting principles generally
accepted in the United States of America. These book/tax differences are either
temporary or permanent in nature. To the extent these differences are permanent
in nature, such amounts are reclassified within the capital accounts based on
their federal tax-basis treatment; temporary differences do not require
reclassification. Distributions that exceed net investment income or net
realized capital gains for financial reporting purposes, but not for tax
purposes, are reported as distributions in excess of net investment income or
distributions in excess of net realized gains on investments. To the extent they
exceed net investment income or net realized gains for tax purposes, they are
reported as distributions of capital.
3. INVESTMENT ADVISORY AGREEMENT
The Company's Board of Directors has approved an investment advisory agreement
with Holland & Company L.L.C. (the "Investment Adviser"). For its services as
Investment Adviser, the Company pays the Investment Adviser a monthly fee at an
annual rate of 0.75% of the Fund's average daily net assets. The Investment
Adviser has agreed to voluntarily waive its fee and to reimburse the Fund for
expenses exceeding 1.50% of average daily net assets. The Adviser may
discontinue this cap on total expenses at any time, in its sole discretion.
During the period ended March 31, 2010, the Investment Adviser waived $67,048 in
advisory fees. The Investment Adviser is controlled by Michael F. Holland, its
managing member and owner of 99% interest in the Investment Adviser.
As of March 31, 2010, Michael F. Holland and affiliates owned 125,571 shares
(5.94% of the shares outstanding) of the Fund.
4. ACCOUNTING, CUSTODY,
ADMINISTRATION AND DISTRIBUTION AGREEMENTS
State Street Bank and Trust Company ("State Street"), pursuant to its
Administration Agreement, provides or arranges for the provision of certain
administrative and accounting services for the Company, including maintaining
the books and records of the Company and preparing certain reports and other
documents required by federal and/or state laws and regulations.
13
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2010 (Unaudited)
- --------------------------------------------------------------------------------
4. ACCOUNTING, CUSTODY,
ADMINISTRATION AND DISTRIBUTION AGREEMENTS (continued)
For these services, the Company pays State Street a fee at the annual rate of
0.10% of the Fund's average daily net assets up to $100 million, 0.08% of the
next $100 million, and 0.06% of those assets in excess of $200 million, subject
to certain minimum requirements, and reimbursement for out-of-pocket expenses
pursuant to the Administration Agreement. Pursuant to the Administration
Agreement, the Administrator is entitled to a minimum fee of $7,500 per month
unless waived by the Administrator. State Street also serves as the Fund's
custodian and accounting agent. Fees paid for custody and accounting services
rendered by State Street are based upon assets of the Fund and on transactions
entered into by the Fund during the period and are included in the
administration and custody fees in the Statement of Operations.
ALPS Distributors Inc. pursuant to a distribution agreement with the Fund
provides distribution of the Fund's shares. The Investment Adviser bears the
distribution cost.
5. DIRECTORS' FEES
The Fund pays each Independent Director an annual fee, paid quarterly, of $3,000
plus $500 per meeting attended and pays all Directors' actual out-of-pocket
expenses relating to attendance at meetings. The Fund does not provide any
pension or retirement benefits to its Directors or Officers.
6. LIABILITIES
At March 31, 2010, the Fund had the following liabilities:
<Table>
Payable for Capital Shares repurchased.......... $35,802
Investment Advisory fee payable................. 20,189
Directors fee payable........................... 1,174
Administration and custody fees payable......... 12,658
Other payables and accrued expenses............. 11,806
-------
Total liabilities............................. $81,629
=======
</Table>
7. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities, other than short-term investments
and U.S. Government Securities, for the six months ended March 31, 2010
aggregated $0 and $1,972,025 respectively. There were no purchases and sales of
U.S. Government Securities for the six months ended March 31, 2010.
8. REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements under which a bank or securities
firm that is a primary or reporting dealer in U.S. Government securities agrees,
upon entering into a contract, to sell U.S. Government securities to the Fund
and repurchase such securities from the Fund at a mutually agreed upon price and
date. The Fund will engage in repurchase transactions with parties selected on
the basis
14
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2010 (Unaudited)
- --------------------------------------------------------------------------------
8. REPURCHASE AGREEMENTS (continued)
of such party's creditworthiness. The collateral on repurchase agreements must
have an aggregate market value greater than or equal to the repurchase price
plus accrued interest at all times. If the value of the underlying securities
falls below the value of the repurchase price plus accrued interest, the Fund
will require the seller to deposit additional collateral by the next business
day. If the request for additional collateral is not met, or the seller defaults
on its repurchase obligation, the Fund maintains the right to sell the
underlying securities at market value and may claim any resulting loss against
the seller. However, in the event of default or bankruptcy by the counterparty
to the agreement, realization and/or retention of the collateral may be subject
to legal proceedings.
9. CAPITAL SHARE TRANSACTIONS
As of March 31, 2010, there were 1,000,000,000 shares of $.01 par value capital
stock authorized. Transactions in capital stock were as follows:
<Table>
<Caption>
- ----------------------------------------------------------------------------
Six Months Ended Year Ended
3/31/10 9/30/09
- ----------------------------------------------------------------------------
Shares Amount Shares Amount
- ----------------------------------------------------------------------------
Shares Sold 15,597 $ 225,703 76,148 $ 978,120
Shares Reinvested 41,663 602,014 79,415 1,001,351
-------- ----------- -------- -----------
57,260 827,717 155,563 1,979,471
Shares Redeemed (152,449) (2,224,909) (364,001) (4,628,538)
-------- ----------- -------- -----------
NET DECREASE (95,189) $(1,397,192) (208,438) $(2,649,067)
======== =========== ======== ===========
- ----------------------------------------------------------------------------
</Table>
10. INCOME TAXES
The components of net unrealized appreciation/ (depreciation) of investments
based on federal tax cost at March 31, 2010 for the Fund were as follows:
<Table>
<Caption>
- ---------------------------------------------------------------------
Cost for Federal
Appreciation Depreciation Net Appreciation Tax Purposes
- ---------------------------------------------------------------------
$4,613,220 $1,101,896 $3,511,324 $28,231,019
</Table>
The Fund recognizes the tax benefits of uncertain tax positions only where the
position is "more likely than not" to be sustained assuming examination by tax
authorities. Management has analyzed the Fund's tax positions, and has concluded
that no liability for unrecognized tax benefits should be recorded related to
uncertain tax positions taken on returns filed for open tax years (2007-2009),
or expected to be taken in the Fund's 2010 tax returns. The Fund remains subject
to review by its major tax jurisdictions, which include the United States of
America and the State of Maryland.
15
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
March 31, 2010 (Unaudited)
- --------------------------------------------------------------------------------
11. NEW ACCOUNTING PRONOUNCEMENT
In January 2010, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update "Improving Disclosures about Fair Value
Measurements" that requires additional disclosures regarding fair value
measurements. Certain required disclosures are effective for interim and annual
reporting periods beginning after December 15, 2009, and other required
disclosures are effective for fiscal years beginning after December 15, 2010,
and for interim periods within those fiscal years. Management is currently
evaluating the impact that these additional requirements will have on the Funds'
financial statements.
16
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - UNAUDITED INFORMATION
- --------------------------------------------------------------------------------
PROXY VOTING POLICIES
The Fund has filed with the Securities and Exchange Commission its proxy voting
record for the 12-month period ending June 30, 2009 on Form N-PX, which must be
filed each year by August 31. Once filed, the most recent Form N-PX will be
available without charge, upon request, by calling 1-800-30-HOLLAND or on the
Securities and Exchange Commission's website at http://www.sec.gov.
QUARTERLY PORTFOLIO OF INVESTMENTS
A Portfolio of Investments is filed as of the end of the first and third quarter
of each fiscal year on Form N-Q and is available on the Security Exchange
Commission's website at http://www.sec.gov. Additionally, the Portfolio of
Investments may be reviewed and copied at the Commission's Public Reference Room
in Washington, DC. Information on the operation of the Public Reference Room may
be obtained by calling 1.800.SEC.0330. The quarterly Portfolio of Investments
will be made available with out charge, upon request, by calling 1-800-30-
HOLLAND.
17
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - UNAUDITED INFORMATION (concluded)
- --------------------------------------------------------------------------------
SHAREHOLDER EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs and (2) ongoing costs, including management fees and other Fund expenses.
This example is intended to help you understand your ongoing costs of investing
in the Fund and to compare these costs with the ongoing costs of investing in
other mutual funds. It is based on an investment of $1,000 invested at the
beginning of the period and held for the entire six-month period ended March 31,
2010.
ACTUAL EXPENSES
The first table below provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you incurred over the period.
Simply divide your account value at the end of the period by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number under the heading entitled "Expenses Paid during the
Period" to estimate the expenses attributable to your investment during this
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second table below provides information about hypothetical account values
and hypothetical expenses based on the Fund's actual expense ratios and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. Thus, you should not use the hypothetical account values and
expenses to estimate the actual ending account balance or your expenses for the
period. Rather, these figures are provided to enable you to compare the ongoing
costs of investing in the Funds and other funds. To do so, compare the 5%
hypothetical examples with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
<Table>
<Caption>
- --------------------------------------------------------
For the Six Months Ended March 31, 2010
- --------------------------------------------------------
Value of a
$1,000 Expenses*
Investment at Paid During
Actual End of Period the Period
- --------------------------------------------------------
$1,082.10 $7.79
</Table>
<Table>
<Caption>
- --------------------------------------------------------
For the Six Months Ended March 31, 2010
- --------------------------------------------------------
Hypothetical Value of a
(assuming a 5% $1,000 Expenses*
return before Investment at Paid During
expenses) End of Period the Period
- --------------------------------------------------------
$1,017.45 $7.54
</Table>
* Expenses are equal to the Funds' annualized net expense ratio of 1.50%
multiplied by the average account value over the period multiplied by 182/365
to reflect the one-half year period.
18
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
ADVISER
Holland & Company L.L.C.
375 Park Avenue
New York, NY 10152
email mike@thehollandfund.com
website www.thehollandfund.com
FUND ADMINISTRATOR,
CUSTODIAN AND FUND
ACCOUNTING AGENT
State Street Bank and Trust Co.
2 Avenue de Lafayette
Boston, MA 02111
DISTRIBUTOR
ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, CO 80203
TRANSFER AGENT & DIVIDEND
DISBURSING AGENT
ALPS Mutual Fund Services, Inc.
1290 Broadway, Suite 1100
Denver, CO 80203
LEGAL COUNSEL
Ropes & Gray LLP
One International Place
Boston, MA 02110
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
BBD, LLP
1835 Market St., 26th Floor
Philadelphia, PA 19103
- ---------------------------------
Holland & Company L.L.C.
375 Park Avenue
New York, New York 10152
Phone 800-30-HOLLAND
Email mike@thehollandfund.com
Website www.thehollandfund.com
This report has been prepared for the
Holland Balanced Fund's Shareholders
and may be distributed to others only
if preceded or accompanied by a prospectus.
ITEM 2. CODE OF ETHICS
Not required for this filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not required for this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not required for this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable to the Registrant.
ITEM 6. SCHEDULE OF INVESTMENTS
(a) Schedule of Investments is included as part of Item 1 of the Form N-CSR.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the Registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no materials changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Within 90 days of the filing date of this Form N-CSR, Michael Holland, the
Fund's President and Treasurer, reviewed the registrant's disclosure controls
and procedures (the "Procedures") and evaluated their effectiveness. Based on
his review, Mr. Holland determined that the Procedures adequately ensure that
information required to be disclosed by the Fund in its periodic reports is
recorded, processed, summarized and reported within the time periods required by
the Securities and Exchange Commission's rules and regulations.
(b) There were no significant changes in the Fund's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
ITEM 12. EXHIBITS
(a)(1) Not applicable to the Filing.
(a)(2) The certifications required by Rule 30a-2 of the Investment Company Act
of 1940, as amended (the "1940 Act") are attached hereto.
(a)(3) Not applicable to the Filing.
(b) The certifications required by Rule 30a-2(b) of the 1940 Act and Sections
906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
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.
HOLLAND SERIES FUND, INC.
By: /s/Michael F. Holland
------------------------------------
Michael Holland
President and Treasurer of Holland
Series Fund, Inc.
Date: May 27, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/Michael F. Holland
--------------------------------------------
Michael Holland
President and Treasurer of Holland
Series Fund, Inc.
Date: May 27, 2010