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 Copy to:
Service)
Michael Holland State Street Bank and Trust Company
President and Treasurer Julie Tedesco, Esq.
Holland Series Fund, Inc. 2 Avenue de Lafayette, 6th Floor
375 Park Avenue Boston, Massachusetts 02111
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, 2006
ITEM 1: SHAREHOLDER REPORT
HOLLAND BALANCED FUND
SEMI - ANNUAL REPORT
MARCH 31, 2006 (UNAUDITED)
[PICTURE]
- ------------------------------------------------
<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
</Table>
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - LETTER FROM THE PRESIDENT
- --------------------------------------------------------------------------------
March 31, 2006
- --------------------------------------------------------------------------------
[Michael Holland photo]
Dear Fellow Shareholder:
As our Fund's largest individual shareholder, I can report to you that an
original investment of $10,000 at our Fund's inception has grown to $18,834,
despite a very lackluster recent few years for our blue chip stock holdings. Our
companies' profit performance and financial strength have been extraordinary. In
fact, during the past year alone, the cash dividends from our investee companies
have increased well in excess of 10%, which is often a reliable indication of
the companies' positive view of their prospects.
Our Fund's cumulative total return since inception (October 2, 1995 through
March 31, 2006) is 88.34%. For the twelve months ended March 31, 2006, our
Fund's total return is 3.85%.
With a healthy global economy and reasonably attractive global interest rates
and inflation, our Fund's fixed income and equity holdings look attractive.
With Bullish Regards,
/s/ Michael F. Holland
Michael F. Holland
President and Founder
1
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - CUMULATIVE PERFORMANCE
- --------------------------------------------------------------------------------
March 31, 2006
- --------------------------------------------------------------------------------
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 & Poor's 500 Index, Salomon 10 Year Government
Bond 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.
[LINE GRAPH]
<Table>
<Caption>
SALOMON 10 YEAR 90 DAY U.S.
HOLLAND BALANCED LIPPER BALANCED STANDARD & POOR'S GOVERNMENT TREASURY BILL
FUND(A) FUND INDEX(B) 500 INDEX(B) BOND INDEX(B) RATE(B)
---------------- --------------- ----------------- --------------- -------------
Inception 10000 10000 10000 10000 10000
3/97 12582 11703 12955 10412 10790
9/97 14192 13758 16209 11618 11067
3/98 14772 15037 18852 12562 11351
9/98 14537 14442 17402 14153 11628
3/99 16417 16363 22011 13431 11887
9/99 16554 16390 21949 13060 12167
3/00 19373 18076 25643 13757 12500
9/00 18976.2 18215 24580 14310 12874
3/01 16823 17074 19855 15592 13226
9/01 15981 16333 17812 16350 13453
3/02 17024 17496 19633 15788 13545
9/02 14561.6 14725 13951 18776 13405
3/03 15385.5 15246 14514 19069 13760
9/03 16727.5 17256 17042 19509 13826
3/04 17902 19076 19271 20331 13889
9/04 17583 19033 19073 20504 13979
3/05 18136 19991 20202 20957 14144
9/05 18371 20945 21027 21993 14369
3/06 18834 21995 22156 21434 14670
</Table>
INVESTMENT PERFORMANCE
For the Periods Ended March, 2006
- --------------------------------------------------------------------------------
<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) 3.85% 2.28% 6.22% 88.34%
Lipper Balanced Fund
Index (b) 10.02% 5.25% 7.79% 119.95%
Standard & Poor's 500
Index (b) 9.68% 2.22% 7.87% 121.56%
Salomon 10 Year Gov't
Bond Index (b) 2.28% 6.57% 7.53% 114.34%
90 Day US Treasury Bill
(b) 3.74% 2.09% 3.72% 46.70%
</Table>
2
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - MANAGEMENT DISCUSSION OF FUND PERFORMANCE (UNAUDITED)
- --------------------------------------------------------------------------------
March 31, 2006
- --------------------------------------------------------------------------------
Since inception (October 2, 1995 through March 31, 2006), our Fund's total
return was 88.34% compared to 119.95% for the Lipper Balanced Fund Index, which
is an unmanaged index with no direct investment costs. For the past six months
ended March 31, 2006, our Fund's total return was 2.52% compared to 5.01% for
the Lipper Index.
Our Fund's exclusive investment in the largest and highest quality companies was
outperformed by stock price increases of small and mid-size companies, even
though we enjoyed positive results.
Our portfolio composition by sector, as detailed below, was helpful in two
respects: We continued to have an energy sector holding larger than that of the
overall market, despite some reduction in our holdings during the period; also,
our fixed income holdings have a relatively short duration, or maturity, and are
less affected by increasing interest rates.
PORTFOLIO COMPOSITION BY SECTOR
(AS A % OF TOTAL NET ASSETS)
- --------------------------------------------------------------------------------
[PIE CHART]
<Table>
U.S. Government 31.2
Energy 17.7
Diversified Manufacturing 12.8
Finance 9.7
Technology 7.4
Repurchase Agreement 2.2
Multi Media 6.0
Consumer Basics 5.6
Retail 3.9
Food & Beverages 3.4
</Table>
3
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - MANAGEMENT DISCUSSION OF FUND PERFORMANCE (UNAUDITED)
(concluded)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 Index 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
Standard & Poor's 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 Index 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 rate 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.
4
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
March 31, 2006 (Unaudited) Shares Value(+)
- ----------------------------------------------------------------------
COMMON STOCKS-66.5%
COMPUTERS-2.2%
International Business Machines Corp. 12,800 $ 1,055,616
-----------
ELECTRONICS-7.6%
3M Co. 26,200 1,983,078
Intel Corp. 83,800 1,621,530
-----------
3,604,608
-----------
ENTERTAINMENT & LEISURE-2.7%
The Walt Disney Co. 46,000 1,282,940
-----------
FINANCIAL-7.6%
American Express Co. 35,000 1,839,250
Citigroup, Inc. 22,500 1,062,675
JPMorgan Chase & Co. 17,000 707,880
-----------
3,609,805
-----------
FOOD & BEVERAGES-3.4%
PepsiCo, Inc. 28,500 1,647,015
-----------
INSURANCE-2.1%
Berkshire Hathaway, Inc. Class A* 11 993,850
-----------
OIL/GAS-17.7%
Burlington Resources, Inc. 22,000 2,022,020
ChevronTexaco Corp. 23,000 1,333,310
Exxon Mobil Corp. 41,100 2,501,346
Schlumberger, Ltd. 20,200 2,556,714
-----------
8,413,390
-----------
PHARMACEUTICALS-5.6%
Johnson & Johnson 28,500 1,687,770
Pfizer, Inc. 40,000 996,800
-----------
2,684,570
-----------
PRODUCER GOODS-5.2%
General Electric Co. 71,100 2,472,858
-----------
RETAIL-3.9%
Home Depot Inc 21,000 888,300
Wal-Mart Stores, Inc. 20,000 944,800
-----------
1,833,100
-----------
SOFTWARE-5.2%
Microsoft Corp. 91,000 2,476,110
-----------
TELECOMMUNICATIONS-3.3%
Comcast Corp. Class A* 60,000 1,569,600
-----------
Total Common Stocks (Cost-$26,064,739) 31,643,462
-----------
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
5
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
March 31, 2006 (Unaudited) Principal Value(+)
- ----------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES-31.2%
U.S. TREASURY NOTES-31.2%
United States Treasury Note, 5.000%
due 2/15/11 $ 4,000,000 $ 4,032,500
United States Treasury Note**, 3.500%
due 1/15/11 8,827,870 9,331,677
United States Treasury Note, 2.000%
due 5/15/06 1,500,000 1,495,371
-----------
Total U.S. Government Securities
(Cost-$14,480,115) 14,859,548
-----------
REPURCHASE AGREEMENT-2.2%
State Street Bank and Trust Co. Repurchase
Agreement 2.30% due 4/03/06 in the
amount of $1,034,198; issued 3/31/06
(Collateralized by $1,065,000, FNMA,
4.25% due 5/15/09 with a market value of
$1,055,641) (Cost-$1,034,000) 1,034,000 1,034,000
-----------
Total Investments-99.9%
(Cost-$41,578,854) 47,537,010
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES-0.1% 65,486
-----------
NET ASSETS-100%
Applicable to 3,036,786 outstanding $0.01
par value shares (authorized
1,000,000,000) $47,602,496
===========
Net asset value, offering price and
redemption price per share $ 15.68
===========
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
6
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS (concluded)
- --------------------------------------------------------------------------------
<Table>
<Caption>
March 31, 2006 (Unaudited)
- ---------------------------------------------------------------------
COMPONENTS OF NET ASSETS AS OF MARCH 31, 2006
Capital stock at par value ($0.01) $ 30,368
Capital stock in excess of par value 42,211,030
Undistributed net investment income 57,759
Net accumulated realized loss on investments (654,817)
Net unrealized appreciation on investments 5,958,156
-----------
Net Assets $47,602,496
===========
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
* Non-income producing
** Treasury Inflation-Protection Security (TIPS)
+ See Note 2 to Financial Statements
FNMA - Federal National Mortgage Association
7
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Six Months Ended March 31, 2006 (Unaudited)
- ---------------------------------------------------------------------
INTEREST INCOME:
Interest $ 407,594
Dividends 273,878
----------
Total investment income 681,472
----------
EXPENSES:
Investment advisory fees (Note 3) 185,958
Administration and custody fees (Note 4) 71,437
Transfer agent fees 40,053
Shareholder reports 32,819
Audit fees 22,692
Directors' fees 12,195
Insurance fees 14,192
Registration fees 11,260
Legal fees 6,577
Miscellaneous expense 1,888
----------
Total operating expenses 399,071
----------
Waiver of investment advisory fee (Note 3) (27,585)
----------
Net expenses 371,486
----------
Net investment income 309,986
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments 755,485
Net change in unrealized depreciation on investments 209,630
----------
Net realized and unrealized gain on investments 965,115
----------
Net increase in net assets resulting from operations $1,275,101
==========
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
8
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Six Months
Ended
March 31, Year Ended
2006 September 30,
(Unaudited) 2005
- ------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income $ 309,986 $ 1,070,457
Net realized gain on investments 755,485 2,293,048
Net change in unrealized
appreciation/(depreciation) on
investments 209,630 (753,370)
----------- -----------
Net increase in net assets resulting from
operations 1,275,101 2,610,135
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income (374,600) (1,125,010)
CAPITAL SHARE TRANSACTIONS, NET (NOTE 9) (3,751,946) (13,453,448)
----------- -----------
Total increase/decrease in net assets (2,851,445) (11,968,323)
NET ASSETS
Beginning of year 50,453,941 62,422,264
----------- -----------
End of year $47,602,496 $50,453,941
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME,
END OF YEAR $ 57,759 $ 122,373
=========== ===========
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
9
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Six months ended
For a capital share outstanding March 31, 2006 For the Year Ended
throughout each period (Unaudited) 9/30/05 9/30/04 9/30/03 9/30/02 9/30/01
- -----------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value, beginning of
year $ 15.41 $ 15.04 $ 14.50 $ 12.78 $ 14.21 $ 17.19
------- ------- ------- ------- ------- -------
INCREASE/DECREASE FROM
INVESTMENT OPERATIONS
Net investment income 0.10 0.29 0.21 0.17 0.17 0.24
Net realized and unrealized
gain (loss) on investments 0.29 0.38 0.53 1.72 (1.42) (2.92)
------- ------- ------- ------- ------- -------
Total from investment
operations 0.39 0.67 0.74 1.89 (1.25) (2.68)
------- ------- ------- ------- ------- -------
LESS DIVIDENDS AND
DISTRIBUTIONS FROM:
Net investment income (0.12) (0.30) (0.20) (0.17) (0.18) (0.25)
Net realized gain on
investments -- -- -- -- -- (0.05)
------- ------- ------- ------- ------- -------
Total dividends and
distributions (0.12) (0.30) (0.20) (0.17) (0.18) (0.30)
------- ------- ------- ------- ------- -------
Net asset value, end of year $ 15.68 $ 15.41 $ 15.04 $ 14.50 $ 12.78 $ 14.21
======= ======= ======= ======= ======= =======
TOTAL RETURN 2.52%(a) 4.48% 5.12% 14.87% (8.88)%(a) (15.78)%(a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) $47,602 $50,454 $62,422 $60,928 $49,322 $59,728
Ratio of expenses to average
net assets after fee waivers
and reimbursement of other
expenses 1.50% 1.45% 1.33% 1.46% 1.50% 1.50%
Ratio of expenses to average
net assets before fee waivers
and reimbursement of other
expenses 1.61% 1.45% 1.33% 1.46% 1.53% 1.59%
Ratio of net investment income
to average net assets after
fee waivers and reimbursement
of other expenses 1.25% 1.89% 1.42% 1.21% 1.17% 1.49%
Ratio of net investment income
to average net assets before
fee waivers and reimbursement
of other expenses 1.14% 1.89% 1.42% 1.21% 1.14% 1.40%
Portfolio turnover 1.87% 7.60% 8.89% 9.92% 39.86% 19.63%
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
<Table>
(a) Total return would have been lower had certain expenses not
been waived or reimbursed.
</Table>
10
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
March 31, 2006 (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.
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 the inflation are reflected in interest income in the
Statement of Operations.
Indemnifications
Under the Fund's organizational documents, its Officers and Trustees 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.
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.
11
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2006 (Unaudited)
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 is 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.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by or under the direction of the
Directors of the Fund.
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
daily net assets. During the six months ended March 31, 2006, the Investment
Adviser waived $27,585 in 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. Currently, the Investment Adviser is voluntary
waiving a portion of its fee. 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, 2006, Michael F. Holland and affiliates owned 102,234 shares
(3.4% of the shares outstanding) of the Fund.
12
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2006 (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, 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 at no cost to the Fund or its
shareholders. The Investment Advisor 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, 2006, the Fund had the following liabilities:
<Table>
Payable for Capital Shares repurchased $ 68,043
Investment Advisory fee payable 30,573
Administration fees payable 6,998
Other payable and accrued expenses 3,537
--------
Total liabilities $109,151
========
</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, 2006
aggregated $877,252 and $2,660,893 respectively. There were no purchases and
sales of U.S. Government Securities, for the six months ended March 31, 2006.
13
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
March 31, 2006 (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 subject to legal proceedings.
9. CAPITAL SHARE TRANSACTIONS
As of March 31, 2006, 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 3/31/06 9/30/05
- ------------------------------------------------------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
Shares Sold 245,305 $ 3,758,173 184,026 $ 2,817,694
Shares Reinvested 20,811 319,391 59,640 909,358
-------- ------------ ---------- -------------
266,116 4,077,564 243,666 3,727,052
Shares Redeemed (503,591) (7,829,510) (1,120,645) (17,180,500)
-------- ------------ ---------- -------------
NET INCREASE/(DECREASE) (237,475) $ (3,751,946) (876,979) $ (13,453,448)
======== ============ ========== =============
</Table>
10. INCOME TAXES
During the year ended September 30, 2005, the Fund utilized $1,660,891 of prior
year capital loss carry- forwards against net taxable capital gains. As of
September 30, 2005 the Fund had a net tax basis capital loss carryforward, for
federal income tax purpose of $1,333,315 that may be applied against future
taxable capital gains until its expiration date on September 30, 2011.
The components of net unrealized appreciation/ (depreciation) of investments
based on federal tax cost at March 31, 2006 for the Fund were as follows:
<Table>
<Caption>
- -----------------------------------------------------------------
Cost for Federal
Appreciation Depreciation Net Appreciation Tax Purposes
- -----------------------------------------------------------------
$7,589,427 $1,631,271 $5,958,156 $41,578,854
</Table>
14
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - UNAUDITED INFORMATION
- --------------------------------------------------------------------------------
PROXY VOTING POLICIES
The Funds have filed with the Securities and Exchange Commission their proxy
voting records for the 12-month period ending June 30, 2005 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
Beginning December 31, 2004, a Portfolio of Investments will be 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
Commissions 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.
SHAREHOLDER EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments and redemption fees
and (2) ongoing costs, including management fees, distribution (12b-1) fees,
shareholder services 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, 2006.
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.
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - UNAUDITED INFORMATION (concluded)
- --------------------------------------------------------------------------------
<Table>
<Caption>
- -------------------------------------------------------------------------
For the Six Months Ended
March 31, 2006
- -------------------------------------------------------------------------
Value of a
$1,000 Expenses*
Investment at Paid During
Actual End of Period the Period
- -------------------------------------------------------------------------
$1,025.20 $7.57
</Table>
<Table>
<Caption>
- ------------------------------------------------------------------------------
For the Six Months Ended
March 31, 2006
- ------------------------------------------------------------------------------
Value of a
$1,000 Expenses*
Hypothetical (assuming a 5% return Investment at Paid During
before 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.
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
Ropes & Gray
One International Place
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
- ------------------------------------
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. CODE OF ETHICS
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.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
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
(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
(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 Holland
------------------
Michael Holland
President and Treasurer of Holland Series Fund, Inc.
Date: June 2, 2006
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 2, 2006