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. 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, 2007
ITEM 1: SHAREHOLDER REPORT
Holland Balanced Fund
Semi-Annual Report
March 31, 2007 (Unaudited)
- ------------------------------------------------
<Table>
CONTENTS
Letter from the President.................... 1
Cumulative Performance....................... 2
Management Discussion of Fund Performance and
Notes to Performance....................... 3
Statement of Net Assets...................... 5
Statement of Operations...................... 8
Statements of Changes in Net Assets.......... 9
Financial Highlights......................... 10
Notes to Financial Statements................ 11
</Table>
Holland Series Fund, Inc.
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Holland Balanced Fund - LETTER FROM THE PRESIDENT
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March 31, 2007
- --------------------------------------------------------------------------------
[Michael Holland photo]
Dear Fellow Shareholder:
As our Fund's largest individual shareholder, I am pleased to report that an
investment of $10,000 at our Fund's inception has grown to $20,254. We have been
invested in the highest quality companies, and they have produced superb revenue
earnings and dividend growth. This blue chip sector has been accorded a lower
valuation level as this long-term superior performance has been achieved, thus
making the reward/risk attraction to this sector compelling.
Our Fund's cumulative total return since inception (October 2, 1995 through
March 31, 2007) is 102.54%. For the twelve months ended March 31, 2007, our
Fund's total return is 7.54%. Please see standardized performance on the next
page.
Healthy global economic growth and reasonable global inflation and interest rate
levels all augur well for our Fund's fixed income and equity holdings.
With Bullish Regards,
/s/ Michael F. Holland
Michael F. Holland
President and Founder
1
Holland Series Fund, Inc.
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Holland Balanced Fund - CUMULATIVE PERFORMANCE (UNAUDITED)
- --------------------------------------------------------------------------------
March 31, 2007
- --------------------------------------------------------------------------------
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, Citigroup Treasury &
Government Sponsored 10 Year Sector Index, 90 Day US Treasury Bill and the
Lipper Balanced Fund Index on October 2, 1995. The cumulative and annualized
total return figures and the information in the graph represent past performance
and are not indicative of future results. The total returns reflect changes in
price of the Fund's shares and assume that any income dividends and/or capital
gain distributions made by the Fund during the period were reinvested in
additional shares of the Fund. Investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. Fund annual operating expenses
gross of Advisory fee waivers as of March 31, 2007 is 1.66%. Fund performance
reflects waiver of fees and reimbursement of expenses by the investment advisor.
Without the absorption of fee waivers and expense reimbursements, total return
figures would have been lower. Current performance may be lower or higher than
the performance quoted. Call 800-304-6552 for current month-end performance.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
(LINE GRAPH)
<Table>
<Caption>
CITIGROUP
TREASURY & GOV'T
HOLLAND BALANCED LIPPER BALANCED STANDARD & POOR'S 10+ YR SECTOR 90 DAY U.S.
FUND(A) FUND INDEX(B) 500 INDEX(B) INDEX(B) TREASURY BILL(B)
---------------- --------------- ----------------- ---------------- ----------------
Inception 10000 10000 10000 10000 10000
3/97 12582 11703 12955 10412 10790
3/98 14772 15037 18852 12562 11351
3/99 16417 16363 22011 13431 11887
3/00 19373 18076 25643 13757 12500
3/01 16823 17074 19855 15592 13226
3/02 17024 17496 19633 15788 13545
3/03 15385.5 15246 14514 19069 13760
3/04 17902 19076 19271 20331 13889
3/05 18136 19991 20202 20957 14144
3/06 18834 21995 22156 21434 14670
3/07 20254 24145 24313 22886 15398
</Table>
INVESTMENT PERFORMANCE
For the Periods Ended March 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE TOTAL RETURN
Average Average Annualized Cumulative
Annualized Annualized Since Inception Since Inception
RETURN OVER THE PERIOD One Year Five Year Ten Year (10/2/95) (10/2/95)
- -------------------------------------------------------------------------------------------------------------
HOLLAND BALANCED FUND (a) 7.54% 3.54% 4.88% 6.33% 102.54%
Lipper Balanced Fund Index
(b) 9.76% 6.71% 7.55% 7.97% 141.45%
Standard & Poor's 500 Index
(b) 9.73% 4.37% 6.49% 8.03% 143.13%
Citigroup Treasury & Gov't
10+ Yr Sector Index (b) 6.78% 7.72% 8.19% 7.46% 128.86%
90 Day US Treasury Bill (b) 4.97% 2.56% 3.62% 3.82% 53.98%
</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, 2007
- --------------------------------------------------------------------------------
Since inception (October 2, 1995 through March 31, 2007), our Fund's total
return was 102.54% compared to 141.45% for the Lipper Balanced Fund Index, which
is an unmanaged index with no direct investment costs. For the past six months
ended March 31, 2007, our Fund's total return was 2.18% compared to 6.71% for
the Lipper Index.
Our Fund's holdings of what I believe are the largest, well-known, and least
risky equities and fixed income securities have been outperformed by other
sectors, our positive results notwithstanding. This performance gap has been
reduced in recent quarters.
Our portfolio composition by sector, as detailed, has continued to benefit from
our healthy energy exposure, particularly energy services (Schlumberger in
particular).
PORTFOLIO COMPOSITION BY SECTOR
(AS A % OF TOTAL NET ASSETS)
- --------------------------------------------------------------------------------
(PIE CHART)
<Table>
U.S. Government 30.4
Diversified Manufacturing 13.7
Finance 11.5
Energy 9.7
Multi Media 9.0
Technology 7.7
Consumer Basics 6.1
Food & Beverages 4.1
Repurchase Agreement 3.8
Retail 3.8
</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
- --------------------------------------------------------------------------------
(a) Reflects waiver of fees and reimbursement of expenses by investment
advisor. 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 & 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 Citigroup Treasury and Government Sponsored 10+ Year Sector
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. The Standard & Poor's 500 Index and the Citigroup Treasury
and Government Sponsored 10+ Year Sector Index 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, 2007 (Unaudited) Shares Value(+)
- ----------------------------------------------------------------------
COMMON STOCKS-65.6%
COMPUTERS-2.7%
International Business Machines Corp. 12,800 $ 1,206,528
-----------
ELECTRONICS-8.1%
3M Co. 26,200 2,002,466
Intel Corp. 83,800 1,603,094
-----------
3,605,560
-----------
ENTERTAINMENT & LEISURE-4.7%
The Walt Disney Co. 61,000 2,100,230
-----------
FINANCIAL-8.8%
American Express Co. 35,000 1,974,000
Citigroup, Inc. 22,500 1,155,150
JPMorgan Chase & Co. 17,000 822,460
-----------
3,951,610
-----------
FOOD & BEVERAGES-4.1%
PepsiCo, Inc. 28,500 1,811,460
-----------
INSURANCE-2.7%
Berkshire Hathaway, Inc. Class A* 11 1,198,890
-----------
OIL/GAS-9.7%
Exxon Mobil Corp. 26,600 2,006,970
Schlumberger, Ltd. 33,400 2,307,940
-----------
4,314,910
-----------
PHARMACEUTICALS-6.1%
Johnson & Johnson 28,500 1,717,410
Pfizer, Inc. 40,000 1,010,400
-----------
2,727,810
-----------
PRODUCER GOODS-5.6%
General Electric Co. 71,100 2,514,096
-----------
RETAIL-3.8%
Home Depot, Inc. 21,000 771,540
Wal-Mart Stores, Inc. 20,000 939,000
-----------
1,710,540
-----------
SOFTWARE-5.0%
Microsoft Corp. 81,000 2,257,470
-----------
TELECOMMUNICATIONS-4.3%
Comcast Corp. Class A* 75,000 1,946,250
-----------
Total Common Stocks (Cost-$23,058,791) 29,345,354
-----------
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
5
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
March 31, 2007 (Unaudited) Principal Value(+)
- ----------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES-30.4%
U.S. TREASURY NOTES-30.4%
United States Treasury Note, 5.000%
due 2/15/11 $4,000,000 $ 4,068,592
United States Treasury Note**, 3.500%
due 1/15/11 9,012,398 9,515,470
-----------
Total U.S. Government Securities
(Cost-$13,133,945) 13,584,062
-----------
REPURCHASE AGREEMENT-3.8%
State Street Bank and Trust Co. Repurchase
Agreement, 2.50% due 4/2/07 in the amount
of $1,685,351; issued
3/30/07(Collateralized by $1,695,000,
FNMA, 5.625% due 11/15/21 with a market
value of $1,722,544) (Cost $1,685,000) 1,685,000 1,685,000
-----------
Total Investments-99.8%
(Cost-$37,877,736) 44,614,416
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES-0.2% 77,730
-----------
NET ASSETS-100.0%
Applicable to 2,769,905 outstanding $0.01
par value shares (authorized
1,000,000,000) $44,692,146
===========
Net asset value, offering price and
redemption price per share $ 16.13
===========
</Table>
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See Notes to the Financial Statements
6
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS (concluded)
- --------------------------------------------------------------------------------
<Table>
<Caption>
March 31, 2007 (Unaudited)
- ---------------------------------------------------------------------
COMPONENTS OF NET ASSETS AS OF MARCH 31, 2007
Capital stock at par value ($0.01) $ 27,699
Capital stock in excess of par value 37,929,327
Undistributed net investment income 134,059
Net accumulated realized loss on investments in
securities (135,619)
Net unrealized appreciation on investments in securities 6,736,680
-----------
Net Assets $44,692,146
===========
</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, 2007 (Unaudited)
- ---------------------------------------------------------------------
INTEREST INCOME:
Dividends $ 280,909
Interest 217,780
Other income 5,082
----------
Total investment income 503,771
----------
EXPENSES:
Investment advisory fees (Note 3) 173,875
Administration and custody fees (Note 4) 71,964
Transfer agent fees 47,472
Audit fees 23,435
Shareholder reports 21,746
Insurance fees 12,832
Directors' fees 12,477
Registration fees 12,165
Legal fees 7,351
Miscellaneous expenses 2,674
----------
Total operating expenses 385,991
----------
Waiver of investment advisory fee (Note 3) (38,241)
----------
Net Expenses 347,750
----------
Net investment income 156,021
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments (58,633)
Net change in unrealized appreciation 959,823
----------
Net realized and unrealized gain on investments 901,190
----------
Net increase in net assets resulting from operations $1,057,211
==========
</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
2007 September 30,
(Unaudited) 2006
- -------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income $ 156,021 $ 748,349
Net realized gain (loss) (58,633) 2,892,473
Net change in unrealized
appreciation/(depreciation) on
investments 959,823 28,331
----------- -----------
Increase in net assets from operations 1,057,211 3,669,153
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (178,312) (714,372)
Net realized gains (1,559,157) --
CAPITAL SHARE TRANSACTIONS, NET (NOTE
9): (1,218,205) (6,818,113)
----------- -----------
Decrease in net assets (1,898,463) (3,863,332)
----------- -----------
NET ASSETS:
Beginning of period 46,590,609 50,453,941
----------- -----------
End of period $44,692,146 $46,590,609
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME,
END OF YEAR $ 134,059 $ 156,350
=========== ===========
</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, 2007 For the Year Ended
throughout each period (Unaudited) 9/30/06 9/30/05 9/30/04 9/30/03 9/30/02
- -----------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value, beginning of
period $ 16.38 $ 15.41 $ 15.04 $ 14.50 $ 12.78 $ 14.21
------- ------- ------- ------- ------- -------
INCREASE/DECREASE FROM
INVESTMENT OPERATIONS:
Net investment income 0.06 0.25 0.29 0.21 0.17 0.17
Net realized and unrealized
gain (loss) on investments 0.31 0.95 0.38 0.53 1.72 (1.42)
------- ------- ------- ------- ------- -------
Total income (loss) from
Operations 0.37 1.20 0.67 0.74 1.89 (1.25)
------- ------- ------- ------- ------- -------
LESS DIVIDENDS AND
DISTRIBUTIONS FROM:
Net investment income (0.06) (0.23) (0.30) (0.20) (0.17) (0.18)
Net realized gain on
investments (0.56) -- -- -- -- --
------- ------- ------- ------- ------- -------
Total dividends and
distributions (0.62) (0.23) (0.30) (0.20) (0.17) (0.18)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 16.13 $ 16.38 $ 15.41 $ 15.04 $ 14.50 $ 12.78
======= ======= ======= ======= ======= =======
TOTAL RETURN 2.18%(a)(b) 7.90%(a) 4.48% 5.12% 14.87% (8.88)%(a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) $44,692 $46,591 $50,454 $62,422 $60,928 $49,322
Ratio of expenses to average
net assets before fee waivers
and reimbursement of other
expenses 1.66%(c) 1.71% 1.45% 1.33% 1.46% 1.53%
Ratio of expenses to average
net assets after fee waivers
and reimbursement of other
expenses 1.50%(c) 1.50% 1.45% 1.33% 1.46% 1.50%
Ratio of net investment income
to average net assets after
fee waivers and reimbursement
of other expenses 0.67%(c) 1.57% 1.89% 1.42% 1.21% 1.17%
Portfolio turnover 1.20% 2.94% 7.60% 8.89% 9.92% 39.86%
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
<Table>
(a) Total return would have been lower had certain expenses not
been waived or reimbursed.
(b) Not annualized
(c) Annualized
</Table>
10
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
March 31, 2007 (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, 2007 (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 in accordance with procedures approved by
the Directors of the Fund.
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 Advisor. For its services as investment advisor, the Company
pays the Investment Advisor a monthly fee at an annual rate of 0.75% of the
Fund's average daily net assets. Holland & Company L.L.C. (the "Investment
Advisor") 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 month ended
March 31, 2007, the Investment Advisor waived $38,241 in advisory fees. The
Investment Advisor is controlled by Michael F. Holland, its managing member and
owner of 99% interest in the Investment Advisor.
As of March 31, 2007, Michael F. Holland and affiliates owned 106,875 shares
(3.9% of the shares outstanding) of the Fund.
12
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2007 (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, 2007, the Fund had the following liabilities:
<Table>
Payable for Capital Shares repurchased $ 3,838
Investment Advisory fee payable 28,373
Administration fees payable 7,965
Other payable and accrued expenses 9,465
-------
Total liabilities $49,641
=======
</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, 2007,
aggregated $529,810 and $2,141,880 respectively.
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,
13
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2007 (Unaudited)
- --------------------------------------------------------------------------------
8. REPURCHASE AGREEMENTS (continued)
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, 2007, 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 3/31/07 9/30/2006
- ------------------------------------------------------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
Shares Sold 84,519 $ 1,390,883 240,919 $ 3,709,697
Shares Reinvested 90,046 1,492,055 39,458 612,233
-------- ------------ --------- ------------
174,565 2,882,938 280,377 4,321,930
Shares Redeemed (248,866) (4,101,143) (710,431) (11,140,043)
-------- ------------ --------- ------------
NET INCREASE/(DECREASE) (74,301) $ (1,218,205) (430,054) $ (6,181,113)
======== ============ ========= ============
</Table>
10. INCOME TAXES
During the year ended September 30, 2006, the Fund utilized $1,333,315 of prior
year capital loss carry-forwards against net taxable capital gains. As of
September 30, 2006, the Fund has utilized all of its capital loss
carry-forwards.
The components of net unrealized appreciation/ (depreciation) of investments
based on federal tax cost at March 31, 2007 for the Fund were as follows:
<Table>
<Caption>
- -----------------------------------------------------------------
Cost for Federal
Appreciation Depreciation Net Appreciation Tax Purposes
- -----------------------------------------------------------------
$7,843,155 $1,106,475 $6,736,680 $37,877,736
</Table>
11. RECENT ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board issued Interpretation No.
48, "Accounting for Uncertainty in Income Taxes -- an Interpretation of
14
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
March 31, 2007 (Unaudited)
- --------------------------------------------------------------------------------
11. RECENT ACCOUNTING PRONOUNCEMENTS (continued)
FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes
for all entities, including pass-through entities such as the Funds, a minimum
threshold for financial statement recognition of the benefit of positions taken
in filing tax returns (including whether an entity is taxable in a particular
jurisdiction), and requires certain expanded tax disclosures. The Interpretation
is effective for fiscal years beginning after December 15, 2006, and is to be
applied to all open tax years as of the date of effectiveness. Management has
recently begun to evaluate the application of the Interpretation to the Fund,
and is not in a position at this time to estimate the significance to its
impact, if any, on the Fund's financial statements.
In September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which
clarifies the definition of fair value and requires companies to expand their
disclosure about the use of fair value to measure assets and liabilities in
interim and annual periods subsequent to initial recognition.
Adoption of SFAS 157 requires the use of the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. SFAS 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. At this time, management is the
process of reviewing the Standard against its current valuation policies to
determine future applicability.
12. CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTANT
On December 21, 2006, the Fund's Board of Directors (the "Directors"), upon the
recommendation of the Audit Committee, appointed Briggs, Bunting & Dougherty,
LLP as the Fund's independent registered public accountant.
15
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, 2006 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, 2007.
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, 2007
- -------------------------------------------------------------------------
Value of a
$1,000 Expenses*
Investment at Paid During
Actual End of Period the Period
- -------------------------------------------------------------------------
$1,021.79 $7.56
</Table>
<Table>
<Caption>
- ------------------------------------------------------------------------------
For the Six Months Ended
March 31, 2007
- ------------------------------------------------------------------------------
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.
2 Lafayette Avenue
Boston, MA 02111
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
One International Place
Boston, MA 02110
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Briggs, Bunting & Dougherty, LLP
Two Penn Center Plaza, Suite 820
Philadelphia, PA 19102
- ------------------------------------
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.
HOL000114 11/30/07
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 to the Registrant.
ITEM 6. SCHEDULE OF INVESTMENTS
Schedule of Investments is included as part of Item 1 of the Form N-CSR.
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 Registrant
(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 Registrant
(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, 2007
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, 2007