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
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HOLLAND SERIES FUND, INC.
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(Exact name of registrant as specified in charter)
375 PARK AVENUE
NEW YORK, NEW YORK 10152
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(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, 2011
ITEM 1: SHAREHOLDER REPORT
----------------------------
<Table>
CONTENTS
Letter from the President.. 1
Cumulative Performance..... 2
Management Discussion of
Fund 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, 2011
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Dear Fellow Shareholders:
As our Fund's largest individual shareholder, I am pleased to report continuing
positive results for our Fund as the global economy continues to make progress.
Our equity investments are concentrated in U.S. companies who have been
successful in identifying attractive growth areas outside the U.S. More than
half of our companies' revenues come from outside the U.S. This diversification
has buttressed our companies' profitability during the period while the U.S.
economy has been slowly recovering.Our Fund's fixed income holdings, primarily
U.S. Treasuries, are currently only short maturities, well under two years. We
no longer own our favored long-term holding of U.S. Treasury Inflation Indexed
bonds, the so-called TIPS, as the prices of all U.S. Treasuries have risen to
levels we find unattractive, if not risky.
The cumulative total return since inception for our Fund (October 2, 1995
through March 31, 2011) is 127.27% compared to 117.23% for the S&P 500 and
167.50% for the Lipper Balanced Fund Index, an unmanaged index. For the six
months ended March 31, 2011, our Fund's total return is 9.85%, compared to
13.04% for the S&P 500 Index and 10.17% for the Lipper Balanced Fund Index.
With Bullish Regards,
/s/ Michael F. Holland
Michael F. Holland
President and Founder
INVESTING INVOLVES RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
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 less than
their original cost. Current performance may be lower than the performance data
quoted. Performance figures do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or redemption of fund shares.
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, 2011
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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, Lipper Balanced Fund Index, Standard & Poor's 500 Index,
and the 90 Day US Treasury Bill 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. Cumulative performance is
the aggregate amount that an investment has gained or lost over the specified
time period. 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 less than their original cost.
Fund annual operating expenses gross of Advisory Fee waivers as of March 31,
2011 is 1.92%.
(LINE GRAPH)
<Table>
<Caption>
LIPPER BALANCED STANDARD & 90 DAY
HOLLAND BALANCED FUND INDEX POOR'S 500 US TREASURY
FUND (A) (B) INDEX (B) BILL (B)
---------------- --------------- ---------- -----------
Inception 10000 10000 10000 10000
Mar-97 12582 11703 12955 10790
Mar-98 14772 15037 18852 11351
Mar-99 16417 16363 22011 11887
Mar-00 19373 18076 25643 12500
Mar-01 16823 17074 19855 13226
Mar-02 17024 17496 19633 13545
Mar-03 15385.5 15246 14514 13760
Mar-04 17902 19076 19271 13889
Mar-05 18136 19991 20202 14144
Mar-06 18834 21995 22156 14670
Mar-07 20254 24145 24313 15398
Mar-08 21219 23992 22633 15957
Mar-09 16480 17607 13653 16179
Mar-10 21230 23953 19862 16115
Mar-11 22727 26750 21723 16136
</Table>
INVESTMENT PERFORMANCE
For the Periods Ended March 31, 2011
<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) 7.05% 3.83% 3.05% 5.44% 127.27%
Lipper Balanced Fund Index (b) 11.96% 4.04% 4.64% 6.55% 167.50%
Standard & Poor's 500 Index (b) 9.37% -0.39% 0.90% 5.13% 117.23%
90 Day US Treasury Bill (b) 0.13% 1.92% 2.01% 3.13% 61.36%
----------------------------------------------------------------------------------------------
</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, 2011
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Since inception (October 2, 1995 through March 31, 2011), our Fund's cumulative
total return is 127.27% compared to 117.23% for the S&P 500 and 167.50% for the
Lipper Balanced Fund Index, which is an unmanaged index. For the past six months
ended March 31, 2011, our Fund's total return was 9.85% compared to 13.04% for
the S&P 500 Index and 10.17% for the Lipper Balanced Fund Index.
During the period, smaller companies' equity prices did even better than those
of large companies. Nevertheless, a number of our holdings were standouts,
including Exxon Mobil, IBM, and Comcast.
On the negative side, our investment in Johnson & Johnson, which has been a
rewarding investment over the years, was an underperformer in recent quarters as
product recalls weighed on the stock price.
Our Fund's greater exposure to equities than fixed income was beneficial during
the recent stock market move up while our shorter maturity U.S. Treasury
holdings were stable.
Portfolio composition by sector
(AS A % OF TOTAL NET ASSETS) - UNAUDITED
--------------------------------------------------------------------------------
(LINE GRAPH)
<Table>
U.S. Government 28.7
Finance 15.8
Diversified Manufacturing 12.1
Energy 10.3
Technology 8.7
Multi Media 8.2
Retail 5.8
Consumer Basics 4.1
Food & Beverages 4.1
Other Assets in Excess of
Liabilities 2.2
</Table>
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 by investment adviser. Absent such waiver, 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
& Poor's 500 Index is unmanaged and does not reflect the actual cost of
investing in the instruments that comprise the 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, 2011 (Unaudited) Shares Value(+)
-----------------------------------------------------------------------
COMMON STOCKS-69.1%
COMPUTERS-4.6%
International Business Machines Corp. 8,800 $ 1,435,016
----- -----
ELECTRONICS-8.7%
3M Co. 15,100 1,411,850
Intel Corp. 65,300 1,317,101
----- -----
2,728,951
----- -----
ENTERTAINMENT & LEISURE-4.7%
The Walt Disney Co. 33,900 1,460,751
----- -----
FINANCIAL-6.9%
American Express Co. 27,500 1,243,000
JPMorgan Chase & Co. 20,000 922,000
----- -----
2,165,000
----- -----
FOOD & BEVERAGES-4.1%
PepsiCo, Inc. 20,000 1,288,200
----- -----
INSURANCE-8.9%
Berkshire Hathaway, Inc. Class A* 11 1,378,300
Chubb Corp. 23,000 1,410,130
----- -----
2,788,430
----- -----
OIL/GAS-10.3%
Exxon Mobil Corp. 19,000 1,598,470
Schlumberger, Ltd. 17,300 1,613,398
----- -----
3,211,868
----- -----
PHARMACEUTICALS-4.1%
Johnson & Johnson 21,500 1,273,875
----- -----
PRODUCER GOODS-3.4%
General Electric Co. 52,900 1,060,645
----- -----
RETAIL-5.8%
Home Depot, Inc. 21,000 778,260
Wal-Mart Stores, Inc. 20,000 1,041,000
----- -----
1,819,260
----- -----
SOFTWARE-4.1%
Microsoft Corp. 51,000 1,293,360
----- -----
TELECOMMUNICATIONS-3.5%
Comcast Corp. Class A 45,000 1,112,400
----- -----
Total Common Stocks
(Cost-$17,158,515) 21,637,756
----- -----
</Table>
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See Accompanying Notes to 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, 2011 (Unaudited) Principal Value(+)
-----------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES-28.7%
U.S. TREASURY NOTES-28.7%
United States Treasury Note, 0.375% due
10/31/12 (Cost-$8,979,415) $9,000,000 $ 8,971,524
----- -----
Total Investments-97.8%
(Cost-$26,137,930) 30,609,280
----- -----
OTHER ASSETS IN EXCESS OF
LIABILITIES-2.2% 679,074
----- -----
NET ASSETS-100%
Applicable to 2,005,291 outstanding
$0.01 par value shares (authorized
1,000,000,000) $31,288,354
===== =====
Net asset value, offering price and
redemption price per share $ 15.60
===== =====
</Table>
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See Accompanying Notes to Financial Statements.
6
Holland Series Fund, Inc.
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Holland Balanced Fund - STATEMENT OF NET ASSETS (concluded)
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<Table>
<Caption>
March 31, 2011 (Unaudited)
----------------------------------------------------------------
COMPONENTS OF NET ASSETS AS OF MARCH 31, 2011
Capital stock at par value ($0.01)................. $ 20,053
Capital stock in excess of par value............... 26,382,152
Undistributed net investment income................ 27,527
Net accumulated realized gain on investments in
securities....................................... 387,272
Net unrealized appreciation on investments in
securities....................................... 4,471,350
-----------
Net Assets.................................... $31,288,354
===========
</Table>
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See Accompanying Notes to Financial Statements.
* Non-income producing
+ See Note 2 to Financial Statements
7
Holland Series Fund, Inc.
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Holland Balanced Fund - STATEMENT OF OPERATIONS
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<Table>
<Caption>
Six Months Ended March 31, 2011 (Unaudited)
----------------------------------------------------------------
INVESTMENT INCOME:
Dividends........................................... $ 230,610
Interest income (Note 2)............................ 120,903
----------
Total investment income........................ 351,513
----------
EXPENSES:
Investment advisory fees (Note 3)................... 116,027
Administration and custody fees (Note 4)............ 69,350
Transfer agent fees................................. 29,934
Shareholder reports................................. 25,007
Audit fees.......................................... 11,480
Registration fees................................... 10,948
Legal fees.......................................... 9,504
Insurance fees...................................... 7,937
Directors' fees..................................... 7,142
Miscellaneous expenses.............................. 2,931
----------
Total operating expenses....................... 290,260
Waiver of investment advisory fee (Note 3)..... (58,207)
----------
Net Expenses................................... 232,053
----------
Net investment income............................... 119,460
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments.................... 387,273
Net change in unrealized appreciation............... 2,406,833
----------
Net realized and unrealized gain on
investments.................................. 2,794,106
----------
Net increase in net assets resulting from
operations................................... $2,913,566
==========
</Table>
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See Accompanying Notes to Financial Statements.
8
Holland Series Fund, Inc.
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Holland Balanced Fund - STATEMENTS OF CHANGES IN NET ASSETS
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<Table>
<Caption>
Six Months Ended
March 31, Year Ended
2011 September 30,
(Unaudited) 2010
--------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income................... $ 119,460 $ 354,323
Net realized gain....................... 387,273 697,448
Net change in unrealized appreciation on
investments........................... 2,406,833 636,872
----------- -----------
Increase in net assets from operations.. 2,913,566 1,688,643
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................... (149,511) (430,022)
Net realized gains...................... (578,694) (415,970)
----------- -----------
Total distributions..................... (728,205) (845,992)
----------- -----------
CAPITAL SHARE TRANSACTIONS, NET (NOTE
9).................................... (946,301) (2,088,945)
----------- -----------
Increase/(Decrease) in Net Assets....... 1,239,060 (1,246,294)
----------- -----------
NET ASSETS:
Beginning of period................ 30,049,294 31,295,588
----------- -----------
End of period...................... $31,288,354 $30,049,294
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME,
END OF PERIOD......................... $ 27,527 $ 57,578
=========== ===========
</Table>
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See Accompanying Notes to Financial Statements.
9
Holland Series Fund, Inc.
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Holland Balanced Fund - FINANCIAL HIGHLIGHTS
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<Table>
<Caption>
For a capital share Six Months Ended
outstanding March 31, 2011 For the Year Ended
throughout each period (Unaudited) 9/30/10 9/30/09 9/30/08 9/30/07 9/30/06
------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value,
beginning of period $ 14.54 $ 14.16 $ 15.29 $ 17.39 $ 16.38 $ 15.41
------- ------- ------- ------- ------- -------
INCREASE/ DECREASE FROM
INVESTMENT OPERATIONS:
Net investment income 0.06 0.17 0.09 0.35 0.23 0.25
Net realized and
unrealized gain (loss)
on investments 1.35 0.60 (0.76) (1.60) 1.58 0.95
------- ------- ------- ------- ------- -------
Total income (loss)
from operations 1.41 0.77 (0.67) (1.25) 1.81 1.20
------- ------- ------- ------- ------- -------
LESS DIVIDENDS AND
DISTRIBUTIONS FROM:
Net investment income (0.07) (0.20) (0.13) (0.29) (0.24) (0.23)
Net realized gain on
investments (0.28) (0.19) (0.33) (0.56) (0.56) --
------- ------- ------- ------- ------- -------
Total dividends and
distributions (0.35) (0.39) (0.46) (0.85) (0.80) (0.23)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 15.60 $ 14.54 $ 14.16 $ 15.29 $ 17.39 $ 16.38
======= ======= ======= ======= ======= =======
TOTAL RETURN(A) 9.85%(b) 5.46% (3.97)% (7.42)% 11.33% 7.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's) $31,288 $30,049 $31,296 $36,975 $44,348 $46,591
Ratio of expenses to
average net assets
before fee waivers 1.88%(c) 1.92% 1.88% 1.63% 1.66% 1.71%
Ratio of expenses to
average net assets
after fee waivers 1.50%(c) 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of net investment
income to average net
assets after fee
waivers 0.77%(c) 1.14% 0.69% 2.09% 1.34% 1.57%
Portfolio turnover 4.41%(b) 0.00% 2.54% 1.96% 1.22% 2.94%
</Table>
--------------------------------------------------------------------------------
See Accompanying Notes to 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.
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Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
March 31, 2011 (Unaudited)
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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 objective of the Fund is to provide a high total investment return. The
total investment return is a combination of, among other things, 1) income from
interest and dividends on securities owned by the Fund, and 2) capital gains and
losses on securities owned by the Fund. In seeking this objective, Holland &
Company, L.L.C., the Fund's investment adviser (the "Investment Adviser"), gives
consideration to risk and volatility.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP"), 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 effective 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-Protection 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 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.
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Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------
March 31, 2011 (Unaudited)
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Tax
The Fund has made 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 amended, 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
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.
- 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, 2011 in valuing
the Fund's investments at value:
<Table>
<Caption>
---------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
---------------------------------------------------------------------------------
Investments in Securities
Common Stocks $21,637,756 $ -- $ -- $21,637,756
U.S. Government Securities -- 8,971,524 -- 8,971,524
----------- ---------- ---------- -----------
Total $21,637,756 $8,971,524 $-- $30,609,280
=========== ========== ========== ===========
---------------------------------------------------------------------------------
</Table>
In January 2010, the Financial Accounting Standards Board issued Accounting
Standards Update No. 2010-06, "Improving disclosures about fair value
measurements" ("ASU 2010-06"). ASU 2010-06 requires new disclosures regarding
12
Holland Series Fund, Inc.
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Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------
March 31, 2011 (Unaudited)
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
transfers in and out of Levels 1 and 2 effective for interim and annual
reporting periods beginning after December 15, 2009. The Fund discloses
significant transfers between levels based on evaluations at the end of the
reporting period. For the period ended March 31, 2011, there were no transfers
between Levels 1 and 2. ASU 2010-06 will also require additional details
regarding Level 3 transaction activity effective for interim and annual periods
beginning after December 15, 2010. Management is currently evaluating the effect
that this additional requirement will have on the Fund's financial statements.
Distributions to Shareholders
The Fund distributes income dividends 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 GAAP. 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 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 to the extent necessary to keep the Fund's expenses
from exceeding 1.50% of average daily net assets. The Investment Adviser may
discontinue this cap on total expenses at any time, in its sole discretion.
During the six months ended March 31, 2011, the Investment Adviser waived
$58,207 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, 2011, Michael F. Holland and affiliates owned 124,001 shares
(6.18% of the shares outstanding) of the Fund.
13
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------
March 31, 2011 (Unaudited)
--------------------------------------------------------------------------------
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.
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, State Street is entitled to a minimum fee of $7,500 per month unless
waived by State Street. 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,
acts as distributor 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, 2011, the Fund had the following liabilities:
<Table>
Investment Advisory fee payable................. $19,814
Administration and custody fees payable......... 8,998
Other payable and accrued expenses.............. 26,931
-------
Total liabilities............................. $55,743
=======
</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, 2011
aggregated $0 and $1,328,053 respectively. Purchases and sales of U.S.
Government securities for the six months ended March 31, 2011 aggregated
$8,977,188 and $0.
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Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------
March 31, 2011 (Unaudited)
--------------------------------------------------------------------------------
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 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 difficult or impossible.
9. CAPITAL SHARE TRANSACTIONS
As of March 31, 2011, 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
3/31/2011 9/30/2010
-----------------------------------------------------------------------------
Shares Amount Shares Amount
-----------------------------------------------------------------------------
Shares Sold 39,262 $ 596,514 85,839 $ 1,243,608
Shares Reinvested 45,842 690,324 55,149 801,415
-------- ----------- -------- -----------
85,104 1,286,838 140,988 2,045,023
Shares Redeemed (146,421) (2,233,139) (284,070) (4,133,968)
-------- ----------- -------- -----------
NET DECREASE (61,317) $ (946,301) (143,082) $(2,088,945)
======== =========== ======== ===========
-----------------------------------------------------------------------------
</Table>
10. INCOME TAXES
The components of net unrealized appreciation/(depreciation) of investments
based on federal tax cost at March 31, 2011 for the Fund were as follows:
<Table>
<Caption>
---------------------------------------------------------------------
Cost for Federal
Appreciation Depreciation Net Appreciation Tax Purposes
---------------------------------------------------------------------
$5,705,469 $1,234,119 $4,471,350 $26,137,930
</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 (2008-2010),
or
15
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (concluded)
--------------------------------------------------------------------------------
March 31, 2011 (Unaudited)
--------------------------------------------------------------------------------
10. INCOME TAXES (continued)
expected to be taken in the Fund's 2011 tax returns. The Fund remains subject to
review by its major tax jurisdictions, which include as the United States of
America and the State of Maryland.
16
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund - UNAUDITED INFORMATION
--------------------------------------------------------------------------------
PROXY VOTING POLICIES
Information regarding how the Fund voted proxies related to portfolio securities
during the most recent 12 month period ending June 30 is filed with the
Securities and Exchange Commission on Form N-PX 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, D.C. 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 without 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,
2011.
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, 2011
--------------------------------------------------------
Value of a
$1,000 Expenses*
Investment at Paid During
Actual End of Period the Period
--------------------------------------------------------
$1,098.45 $7.85
</Table>
<Table>
<Caption>
--------------------------------------------------------
For the Six Months Ended March 31, 2011
--------------------------------------------------------
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 Fund's 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.
4 Copley Place
Boston, MA 02116
DISTRIBUTOR
ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, CO 80203
TRANSFER AGENT & DIVIDEND
DISBURSING AGENT
ALPS Fund Services, Inc.
1290 Broadway, Suite 1100
Denver, CO 80203
LEGAL COUNSEL
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199
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: June 1, 2011
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: June 1, 2011