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 Julie Tedesco, Esq.
Holland Series Fund, Inc. One Federal Street, 9th Floor
375 Park Avenue Boston, Massachusetts 02110
New York, New York 10152
and
Brynn Peltz, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Registrant's telephone number, including area code: (800) 304-6552
Date of fiscal year end: September 30th
Date of reporting period: March 31, 2004
Item 1.
HOLLAND BALANCED FUND
SEMI-ANNUAL REPORT
MARCH 31, 2004 (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...................... 4
Statement of Operations...................... 7
Statements of Changes in Net Assets.......... 8
Financial Highlights......................... 9
Notes to Financial Statements................ 10
</Table>
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - LETTER FROM THE PRESIDENT
- --------------------------------------------------------------------------------
March 31, 2004
- --------------------------------------------------------------------------------
[Michael Holland photo]
Dear Fellow Shareholder:
Our Fund's cumulative total return
since inception (October 2, 1995
through March 31, 2004) was 79.02%.
For the six months ended March 31,
2004, our Fund's total return was
7.02%.
To put these numbers in perspective, an investor who placed $10,000 in the Fund
at the 1995 inception has $17,902 in the Fund on March 31, 2004. The structure
of our Fund, with 60% in large blue-chip companies' stocks and 40% in
high-quality fixed income, has produced less volatility in turbulent markets.
As the Fund's largest individual investor, I continue to have confidence in our
Fund's structure as well as its future.
With Bullish Regards,
[Michael F. Holland Signature]
Michael F. Holland
President and Founder
1
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - CUMULATIVE PERFORMANCE
- --------------------------------------------------------------------------------
March 31, 2004
- --------------------------------------------------------------------------------
Set forth below are the cumulative total return figures for the periods
indicated and a graph showing the hypothetical $10,000 investment made in the
Holland Balanced Fund, Standard & Poors 500 Index, Salomon 10 Year Government
Bond Index, 90 Day U.S. 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.
[LINE GRAPH]
<Table>
<Caption>
HOLLAND LIPPER SALOMON 10
BALANCED BALANCED STANDARD & YEAR 90 DAY U.S.
FUND(A) FUND POOR'S 500 GOVERNMENT TREASURY BILL
-------- INDEX(B) INDEX(B) BOND INDEX(B) RATE(B)
-------- ------------ ------------- -------------
Inception 10000 10000 10000 10000 10000
Mar-97 12582 11703 12955 10412 10790
Sep-97 14192 13758 16209 11618 11067
Mar-98 14772 15037 18852 12562 11351
Sep-98 14537 14442 17402 14153 11628
Mar-99 16417 16363 22011 13431 11887
Sep-99 16554 16390 21949 13060 12167
Mar-00 19373 18076 25643 13757 12500
Sep-00 18976 18215 24580 14310 12874
Mar-01 16823 17074 19855 15592 13226
Sep-01 15981 16333 17812 16350 13453
Mar-02 17024 17496 19633 15788 13545
Sep-02 14562 14725 13951 18776 13405
Mar-03 15386 15246 14514 19069 13760
Sep-03 16728 17256 17042 19509 13826
Mar-04 17902 19076 19271 20331 13889
</Table>
INVESTMENT PERFORMANCE
For the Periods Ended March, 2004
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE TOTAL RETURN
Average Annualized Cumulative
Annualized Since Inception Since Inception
One Year Five Year (10/2/95) (10/2/95)
- ----------------------------------------------------------------------------------------------
HOLLAND BALANCED FUND
(a) 16.36% 1.74% 7.09% 79.02%
Lipper Balanced Fund
Index (b) 25.10% 3.11% 7.89% 90.76%
Standard & Poor's 500
Index (b) 32.78% -2.63% 8.02% 92.71%
Salomon 10 Year
Government Bond Index
(b) 6.62% 8.63% 8.70% 103.31%
90 Day U.S. Treasury
Bill (b) 0.93% 3.16% 3.94% 38.89%
</Table>
2
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - MANAGEMENT DISCUSSION OF FUND PERFORMANCE
- --------------------------------------------------------------------------------
March 31, 2004
- --------------------------------------------------------------------------------
Since inception (October 2, 1995 through March 31, 2004), our Fund's total
return was 79.02% compared to 90.76% for the Lipper Balanced Fund Index, which
is an unmanaged index with no actual investment costs.
Our blue-chip equity holdings and U.S. Treasury Inflation-Indexed bonds, also
known as TIPS, were recently outperformed by low-rated fixed income securities
and small capitalization equities.
- --------------------------------------------------------------------------------
NOTES TO PERFORMANCE
- --------------------------------------------------------------------------------
(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 is an index 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 S&P
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 Salomon 10 Year Government Bond is a subsector of the Broad
Investment-Grade (BIG) Index. At present, this sector contains U.S. Treasury
securities with at least $1 billion public amount outstanding and U.S.
Agency and supranational issues with at least $100 million outstanding. All
securities in this index have a remaining maturity of at least 10 years and
carry a fixed rate coupon. The 90-Day U.S. Treasury Bill is the average
return on three month U.S. Treasury Bills. These indices are unmanaged and
do not reflect the actual cost of investing in the instruments that comprise
each index.
3
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
March 31, 2004 (Unaudited) Shares Value(+)
- ----------------------------------------------------------------------
COMMON STOCKS-60.0%
BANKS-2.2%
The Bank of New York Co., Inc. 45,000 $ 1,417,500
-----------
COMPUTERS-3.5%
International Business Machines Corp. 24,800 2,277,632
-----------
ELECTRONICS-7.3%
3M Co. 30,600 2,505,222
Intel Corp. 83,800 2,279,360
-----------
4,784,582
-----------
FOOD & BEVERAGES-2.8%
Coca Cola Co. 35,900 1,805,770
-----------
FINANCIAL-7.4%
American Express Co. 50,000 2,592,500
Citigroup, Inc. 43,000 2,223,100
-----------
4,815,600
-----------
INSURANCE-5.8%
American International Group, Inc. 32,000 2,283,200
Berkshire Hathaway, Inc. Class A* 16 1,492,800
-----------
3,776,000
-----------
OIL/GAS-10.7%
ChevronTexaco Corp. 11,500 1,009,470
Exxon Mobil Corp. 82,600 3,435,334
Schlumberger, Ltd. 39,500 2,522,075
-----------
6,966,879
-----------
PHARMACEUTICALS-9.4%
Johnson & Johnson 50,500 2,561,360
Merck & Co., Inc. 32,200 1,422,918
Pfizer, Inc. 60,000 2,103,000
-----------
6,087,278
-----------
PRODUCER GOODS-3.3%
General Electric Co. 71,100 2,169,972
-----------
RETAIL TRADE-4.1%
Wal-Mart Stores, Inc. 45,000 2,686,050
-----------
SOFTWARE-3.5%
Microsoft Corp. 91,000 2,272,270
-----------
Total Common Stocks (Cost-$34,272,581) 39,059,533
-----------
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
4
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
March 31, 2004 (Unaudited) Principal Value(+)
- ----------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES-36.5%
GOVERNMENT TREASURIES-36.5%
United States Treasury Note, 6.500%
due 5/15/05 $ 2,000,000 $ 2,117,734
United States Treasury Note, 2.000%
due 5/15/06 4,000,000 4,032,032
United States Treasury Note, 3.500%
due 1/15/11** 10,373,220 12,097,768
United States Treasury Note, 5.000%
due 2/15/11 5,000,000 5,519,530
-----------
Total U.S. Government Securities
(Cost-$21,638,485) 23,767,064
-----------
REPURCHASE AGREEMENTS-3.2%
State Street Bank and Trust Co. Repurchase
Agreement 0.35% due 4/1/04 in the
amount of $2,127,021; issued 3/31/04
(Collateralized by $2,150,000, FHLMC,
2.450% due 08/25/06 with a market
value of $2,171,500)(Cost-$2,127,000) 2,127,000 2,127,000
-----------
Total Investments-99.7%
(Cost-$58,038,066) 64,953,597
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES-0.3% 165,350
-----------
NET ASSETS-100%
Applicable to 4,218,175 outstanding $0.01
par value shares (authorized
1,000,000,000) $65,118,947
===========
Net asset value, offering price and
redemption price per share $ 15.44
===========
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
5
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS (concluded)
- --------------------------------------------------------------------------------
<Table>
<Caption>
March 31, 2004 (Unaudited)
- ---------------------------------------------------------------------
COMPONENTS OF NET ASSETS AS OF MARCH 31, 2004
Capital stock at par value ($0.01) $ 42,182
Capital stock in excess of par value 60,412,079
Undistributed net investment income 160,690
Net accumulated realized loss on investments (2,411,535)
Net unrealized appreciation on investments 6,915,531
-----------
Net Assets $65,118,947
===========
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
* Non-income producing
** Treasury Inflation-Protection Security (TIPS)
+See Note 2 to Financial Statements
FHLMC Federal Home Loan Mortgage Corp.
6
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Six Months Ended March 31, 2004 (Unaudited)
- ---------------------------------------------------------------------
INTEREST INCOME:
Interest $ 468,144
Dividends 306,576
----------
Total investment income 774,720
----------
EXPENSES:
Investment advisory fees (Note 3) 236,288
Administration and custody fees (Note 4) 65,239
Shareholder account maintenance 38,430
Shareholder reports 20,130
Audit fees 20,862
Directors fees 10,065
Registration fees 6,405
Legal fees 8,418
Miscellaneous expense 12,382
----------
Total operating expenses 418,219
----------
Net investment income 356,501
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 659,657
Net change in unrealized appreciation on investments 3,214,263
----------
Net realized and unrealized gain on investments 3,873,920
----------
Net increase in net assets resulting from operations $4,230,421
==========
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
7
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Six Months
Ended
March 31, Year Ended
2004 September 30,
(Unaudited) 2003
- ------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income $ 356,501 $ 647,903
Net realized gain/(loss) on investments 659,657 (1,312,967)
Net change in unrealized appreciation on
investments 3,214,263 7,920,643
----------- -----------
Net increase in net assets resulting from
operations 4,230,421 7,255,579
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income (312,356) (650,886)
CAPITAL SHARE TRANSACTIONS, NET (NOTE 7) 272,416 5,002,197
----------- -----------
Total increase in net assets 4,190,481 11,606,890
NET ASSETS
Beginning of year 60,928,466 49,321,576
----------- -----------
End of year $65,118,947 $60,928,466
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME, END OF
YEAR $ 160,689 $ 116,546
=========== ===========
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
8
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Six Months Ended
For a capital share outstanding 3/31/04 For the Year Ended
throughout the period (Unaudited) 9/30/03 9/30/02 9/30/01 9/30/00 9/30/99
- -----------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value, beginning of
period $ 14.50 $ 12.78 $ 14.21 $ 17.19 $ 15.27 $ 13.74
---------------- ------- -------- --------- ------- ----------
INCREASE/DECREASE FROM
INVESTMENT OPERATIONS
Net investment income 0.09 0.17 0.17 0.24 0.24 0.23
Net realized and unrealized
gain (loss) on investments 0.92 1.72 (1.42) (2.92) 2.00 1.66
---------------- ------- -------- --------- ------- ----------
Total increase/(decrease)
from investment
operations 1.01 1.89 (1.25) (2.68) 2.24 1.89
---------------- ------- -------- --------- ------- ----------
LESS DIVIDENDS AND
DISTRIBUTIONS FROM:
Net investment income (0.07) (0.17) (0.18) (0.25) (0.26) (0.28)
Net realized gain on
investments -- -- -- (0.05) (0.06) (0.08)
---------------- ------- -------- --------- ------- ----------
Total dividends and
distributions (0.07) (0.17) (0.18) (0.30) (0.32) (0.36)
---------------- ------- -------- --------- ------- ----------
Net asset value, end of period $ 15.44 14.50 $ 12.78 $ 14.21 $ 17.19 $ 15.27
================ ======= ======== ========= ======= ==========
TOTAL RETURN(a) 7.02% 14.87% (8.88)% (15.78)% 14.63% 13.87%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's) $ 65,119 $60,928 $ 49,322 $ 59,728 $68,298 $ 45,344
Ratio of expenses to average
net assets after fee waivers
and reimbursement of other
expenses 1.33%(b) 1.46% 1.50% 1.50% 1.50% 1.50%
Ratio of expenses to average
net assets before fee waivers
and reimbursement of other
expenses 1.33%(b) 1.46% 1.53% 1.59% 1.56% 1.62%
Ratio of net investment income
to average net assets after
fee waivers and reimbursement
of other expenses 1.13%(b) 1.21% 1.17% 1.49% 1.46% 1.59%
Ratio of net investment income
to average net assets before
fee waivers and reimbursement
of other expenses 1.13%(b) 1.21% 1.14% 1.40% 1.40% 1.47%
Portfolio turnover 4.07% 9.92% 39.86% 19.63% 17.99% 15.76%
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
<Table>
(a) Total return would have been lower had certain expenses not
been waived or reimbursed.
(b) Annualized
</Table>
9
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
March 31, 2004 (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, 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. 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
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
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.
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 applicable to RICs
and to distribute substantially all of its taxable income and realized gains.
As of September 30, 2003 the Fund had a net tax basis capital loss carryforward,
for federal income tax purposes of $1,102,688 and $1,891,518, that may be
applied against future taxable capital gains until its expiration date on
September 30, 2010 and September 30, 2011, respectively.
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. Effective April 14, 2003, the Fund began
using 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.
Expenses
Holland & Company L.L.C. (the "Investment Adviser") has agreed to voluntarily
waive its fee and to reimburse the Fund for expenses exceeding 1.50% of average
10
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2004 (Unaudited)
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
daily net assets. During the year ended March 31, 2004, the Investment Adviser
did not waive any portion of the advisory fees.
Dividends and Distributions to Shareholders
The Fund distributes 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, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that a net realized
capital gain can be reduced by a capital loss carryover, such gain will not be
distributed.
Dividends and 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. Dividends and 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 is controlled by Michael
F. Holland, its managing member and owner of 99% interest in the Investment
Adviser.
As of March 31, 2004, Michael F. Holland and affiliates owned 99,809 shares
(2.4% of the shares outstanding) of the Fund.
4. ACCOUNTING, CUSTODY AND
ADMINISTRATION 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,
11
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2004 (Unaudited)
- --------------------------------------------------------------------------------
4. ACCOUNTING, CUSTODY AND ADMINISTRATION AGREEMENTS (continued)
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 $7,000 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.
5. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities, other than short-term investments
and U.S. Government Securities, for the year ended March 31, 2004 aggregated
$2,619,643 and $2,495,096, respectively. Purchases and sales of U.S. Government
Securities, for the year ended March 31, 2004 aggregated $0 and $0,
respectively.
The components of net unrealized appreciation/(depreciation) of investments
based on federal tax cost at March 31, 2004 for the Fund were as follows:
<Table>
<Caption>
- -----------------------------------------------------------------
Cost for Federal
Appreciation Depreciation Net Appreciation Tax Purposes
- -----------------------------------------------------------------
$8,244,101 $(1,328,570) $6,915,531 $58,038,066
</Table>
6. 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 subject to legal proceedings.
12
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
March 31, 2004 (Unaudited)
- --------------------------------------------------------------------------------
7. CAPITAL SHARE TRANSACTIONS
As of March 31, 2004, 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 Year Ended
Ended 3/31/04 9/30/03
- ---------------------------------------------------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------
Shares Sold 334,937 $ 5,085,672 775,454 $11,014,822
Shares Reinvested 16,430 243,243 38,491 530,809
-------- ----------- -------- -----------
351,367 5,328,915 813,945 11,545,631
Shares Redeemed (335,766) (5,056,499) (469,383) (6,543,434)
-------- ----------- -------- -----------
NET INCREASE/(DECREASE) 15,601 $ 272,416 344,562 $ 5,002,197
======== =========== ======== ===========
- ---------------------------------------------------------------------------
</Table>
13
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - PROXY VOTING PROCEDURES
- --------------------------------------------------------------------------------
The Fund has adopted proxy voting procedures pursuant to which the Fund
delegates the responsibility for voting proxies relating to portfolio securities
held by the Fund to the Investment Adviser as part of the Investment Adviser's
general agreement with the Fund, subject to the Board's continuing oversight. A
copy of the Fund's proxy voting procedures is available without charge, upon
request, by calling 1-800-30-HOLLAND and on the SEC's website at www.sec.gov.
Beginning August 1, 2004, shareholders may receive information regarding how the
Fund voted proxies relating to portfolio securities during the most recent
12-month period ending June 30, 2004 (i) by calling 1-800-30-HOLLAND or (ii) on
the SEC's website at www.sec.gov.
(This page intentionally left blank)
(This page intentionally left blank)
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.
225 Franklin Street
Boston, MA 02110
DISTRIBUTOR
ALPS Distributors, Inc.
1625 Broadway, Suite 2200
Denver, CO 80202
TRANSFER AGENT & DIVIDEND
DISBURSING AGENT
ALPS Mutual Fund Services, Inc.
1625 Broadway, Suite 2200
Denver, CO 80202
LEGAL COUNSEL
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
- ------------------------------------
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. DISCLOSURE OF AUDIT COMMITTEE FOR LISTED COMPANIES
Not applicable to the Registrant.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required for this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not applicable to the Registrant.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable to the Registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board of Directors during the period
covered by this Form N-CSR filing.
ITEM 10. CONTROLS AND PROCEDURES
(a) Within 90 days of the filing date of this Form N-CSR, Michael Holland, the
Registrant'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 Registrant 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 Registrant's internal control over
financial reporting that occurred during the Registrant's last fiscal-half year
that has materially affected, or is reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
ITEM 11. EXHIBITS
(a)(1) Not applicable to this filing.
(a)(2) The certification required by Rule 30a-2 of the Investment Company Act of
1940, as amended (the "1940 Act") is attached hereto.
(b) The certification required by Rule 30a-2(b) of the 1940 Act and Sections 906
of the Sarbanes-Oxley Act of 2002 is 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 Holland
---------------
Michael Holland
President and Treasurer of Holland Series Fund, Inc.
Date: June 4, 2004
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 Holland
---------------
Michael Holland
President and Treasurer of Holland Series Fund, Inc.
Date: June 4, 2004