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. 4 Copley Place, 5th Floor
375 Park Avenue Boston, Massachusetts 02116
New York, New York 10152
and
Timothy Diggins, Esq.
Ropes & Gray
One International Place
Boston, Massachusetts 02110
Registrant's telephone number, including area code: (800) 304-6552
Date of fiscal year end: September 30th
Date of reporting period: March 31, 2008
ITEM 1: SHAREHOLDER REPORT
HOLLAND BALANCED FUND
Semi - Annual Report
March 31, 2008 (Unaudited)
(GRAPHIC)
- ----------------------------
<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
- --------------------------------------------------------------------------------
March 31, 2008
- --------------------------------------------------------------------------------
[Michael Holland photo]
Dear Fellow Shareholder:
As our Fund's largest individual shareholder, I am pleased to report that an
original investment of $10,000 at our Fund's inception has grown to $21,219,
including the recent challenges of the credit market turmoil. Our Fund's mission
to invest exclusively in the highest quality fixed income securities and highest
quality companies' equities is well rewarded at times such as these. Just as the
sturdiest ships are the choice place to be in stormy weather at sea, our U.S.
Treasury holdings and blue chip company equities have provided a common sense
investment posture for these volatile markets.
Our Fund's cumulative total return since inception (October 2, 1995 through
March 31, 2008) is 112.19%. For the twelve months ended March 31, 2008, our
Fund's total return is 4.76%. For the past six months ended March 31, 2008, our
Fund's total return was -3.85% compared to -6.34% for The Lipper Index, a period
during which many of the world markets experienced declines.
With Bullish Regards,
- -s- Michael F. Holland
Michael F. Holland
President and Founder
Performance data quoted represents past performance. Past performance does not
guarantee future results. All performance assumes reinvestment of dividends and
capital gains. The investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. Current performance may be lower or higher than the
performance data quoted. Performance data current to the most recent month-end
may be obtained by calling: 1-800-304-6552.
1
Holland Series Fund, Inc.
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Holland Balanced Fund - CUMULATIVE PERFORMANCE (UNAUDITED)
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March 31, 2008
- --------------------------------------------------------------------------------
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, 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, 2008 IS 1.67%.
(Line Graph)
<Table>
<Caption>
STANDARD & 90 DAY
HOLLAND BALANCED LIPPER BALANCED POOR'S 500 U.S. TREASURY
FUND(A) FUND INDEX(B) INDEX(B) BILL(B)
---------------- --------------- ---------- -------------
Inception 10000.00 10000.00 10000.00 10000.00
3/97 12582.00 11703.00 12955.00 10790.00
3/98 14772.00 15037.00 18852.00 11351.00
3/99 16417.00 16363.00 22011.00 11887.00
3/00 19373.00 18076.00 25643.00 12500.00
3/01 16823.00 17074.00 19855.00 13226.00
3/02 17024.00 17496.00 19633.00 13545.00
3/03 15385.50 15246.00 14514.00 13760.00
3/04 17902.00 19076.00 19271.00 13889.00
3/05 18136.00 19991.00 20202.00 14144.00
3/06 18834.00 21995.00 22156.00 14670.00
3/07 20254.00 24145.00 24313.00 15398.00
3/08 21219.00 23992.00 22633.00 15957.00
</Table>
INVESTMENT PERFORMANCE
For the Periods Ended March 31, 2008
<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) 4.76% 6.64% 3.69% 6.21% 112.19%
Lipper Balanced Fund Index
(b) -0.66% 9.54% 4.76% 7.40% 144.10%
Standard & Poor's 500 Index
(b) -6.91% 9.28% 1.84% 6.75% 126.33%
90 Day US Treasury Bill (b) 3.63% 3.00% 3.46% 3.81% 59.57%
</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, 2008
- --------------------------------------------------------------------------------
Since inception (October 2, 1995 through March 31, 2008), our Fund's total
return was 112.19% compared to 144.10% for the Lipper Balanced Fund Index, which
is an unmanaged index with no direct investment costs. For the past six months
ended March 31, 2008, our Fund's total return was -3.85% compared to -6.34% for
The Lipper Index.
Our Fund's exclusive investment in the largest and highest quality companies and
U.S. Treasury securities outperformed riskier investment positions.
Our portfolio composition by sector, as detailed below, was helpful in two
respects: Our large position in U.S. Treasury inflation-indexed securities and
our underweighted exposure to the financial sector. The relative performance of
our blue chip sector compared to small and medium sized company equities was
likewise a positive factor.
PORTFOLIO COMPOSITION BY SECTOR
(AS A% OF TOTAL NET ASSETS) - UNAUDITED
- --------------------------------------------------------------------------------
(PIE CHART)
<Table>
U.S. Government 33.80
Diversified Manufacturing 14.10
Finance 10.70
Energy 8.60
Multi Media 8.00
Technology 7.70
Consumer Basics 5.70
Food & Beverages 4.10
Retail 4.10
</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
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 & Poors 500 Index is a capitalization-weighted index of 500 widely
held stocks recognized by investors to be representative of the stock market
in general. The 90-Day U.S. Treasury Bill rate is the average return on
three month U.S. Treasury Bills. The Standard & Poors 500 Index is unmanaged
and does not reflect the actual cost of investing in the instruments that
comprise each index. You cannot invest directly in an index.
4
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
March 31, 2008 (Unaudited) Shares Value(+)
- ---------------------------------------------------------------------
COMMON STOCKS-63.0%
COMPUTERS-3.7%
International Business Machines Corp. 12,800 $ 1,473,792
-----------
ELECTRONICS-9.2%
3M Co. 23,700 1,875,855
Intel Corp. 83,800 1,774,884
-----------
3,650,739
-----------
ENTERTAINMENT & LEISURE-4.3%
The Walt Disney Co. 55,000 1,725,900
-----------
FINANCIAL-5.1%
American Express Co. 30,000 1,311,600
JPMorgan Chase & Co. 17,000 730,150
-----------
2,041,750
-----------
FOOD & BEVERAGES-4.1%
PepsiCo, Inc. 22,500 1,624,500
-----------
INSURANCE-5.6%
Berkshire Hathaway, Inc. Class A* 11 1,467,400
Chubb Corp 15,000 742,200
-----------
2,209,600
-----------
OIL/GAS-8.6%
Exxon Mobil Corp. 20,000 1,691,600
Schlumberger, Ltd. 19,700 1,713,900
-----------
3,405,500
-----------
PHARMACEUTICALS-5.7%
Johnson & Johnson 28,500 1,848,795
Pfizer, Inc. 20,000 418,600
-----------
2,267,395
-----------
PRODUCER GOODS-4.9%
General Electric Co. 52,900 1,957,829
-----------
RETAIL-4.1%
Home Depot, Inc. 21,000 587,370
Wal-Mart Stores, Inc. 20,000 1,053,600
-----------
1,640,970
-----------
SOFTWARE-4.0%
Microsoft Corp. 56,400 1,600,632
-----------
TELECOMMUNICATIONS-3.7%
Comcast Corp. Class A 75,000 1,450,500
-----------
Total Common Stocks (Cost-$19,968,832) 25,049,107
-----------
</Table>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements
5
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
March 31, 2008 (Unaudited) Principal Value(+)
- -----------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES-33.8%
U.S. TREASURY NOTES-33.8%
United States Treasury Note, 5.000%
due 2/15/11 $4,000,000 4,363,752
United States Treasury Note**, 3.500%
due 1/15/11 8,185,050 9,051,511
-----------
Total U.S. Government Securities
(Cost-$12,259,305) 13,415,263
-----------
REPURCHASE AGREEMENT-3.1%
State Street Bank and Trust Co. Repurchase
Agreement, 0.75% due 04/01/08 in the
amount of $1,235,026; issued 03/31/08
(Collateralized by $1,155,000, U.S.
Treasury Bond, 2.00% due 01/15/26 with a
market value of $1,261,158) (Cost
$1,235,000) 1,235,000 1,235,000
-----------
Total Investments-99.9%
(Cost-$33,463,137) 39,699,370
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES-0.1% 35,589
-----------
NET ASSETS-100%
Applicable to 2,470,603 outstanding $0.01
par
value shares (authorized 1,000,000,000) $39,734,959
===========
Net asset value, offering price and
redemption
price per share $ 16.08
===========
</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, 2008 (Unaudited)
- -----------------------------------------------------------------
COMPONENTS OF NET ASSETS AS OF MARCH 31, 2008
Capital stock at par value ($0.01) $ 24,706
Capital stock in excess of par value 32,923,169
Undistributed net investment income 184,698
Net accumulated realized gain on investments in
securities 366,153
Net unrealized appreciation on investments in
securities 6,236,233
-----------
Net Assets $39,734,959
===========
</Table>
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See Accompanying Notes to Financial Statements
* Non-income producing
** Treasury Inflation-Protection Security (TIPS)
+ See Note 2 to Financial Statements
7
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Six Months Ended March 31, 2008 (Unaudited)
- ------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 347,815
Dividends 268,836
-----------
Total investment income 616,651
-----------
EXPENSES:
Investment advisory fees (Note 3) 155,858
Administration and custody fees (Note 4) 71,041
Transfer agent fees 40,357
Shareholder reports 24,292
Directors' fees 12,492
Registration fees 10,966
Audit fees 10,532
Insurance fees 10,027
Legal fees 8,824
Miscellaneous expenses 2,495
-----------
Total operating expenses 346,884
-----------
Waiver of investment advisory fee (Note 3) (35,169)
-----------
Net Expenses 311,715
-----------
Net investment income 304,936
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments 773,760
Net change in unrealized depreciation (2,758,290)
-----------
Net realized and unrealized loss on investments (1,984,530)
-----------
Net decrease in net assets resulting from
operations $(1,679,594)
===========
</Table>
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements
8
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Six Months
Ended
March 31, Year Ended
2008 September 30,
(Unaudited) 2007
- ------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income $ 304,936 $ 610,442
Net realized gain 773,760 1,064,205
Net change in unrealized
appreciation/(depreciation) on
investments (2,758,290) 3,217,666
----------- -----------
Increase/(Decrease) in net assets from
operations (1,679,594) 4,892,313
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (230,111) (656,920)
Net realized gains (1,394,825) (1,559,157)
CAPITAL SHARE TRANSACTIONS, NET (NOTE 9) (1,308,080) (4,919,276)
----------- -----------
Decrease in Net Assets (4,612,610) (2,243,040)
NET ASSETS:
Beginning of period 44,347,569 46,590,609
----------- -----------
End of period $39,734,959 $44,347,569
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME,
END OF PERIOD $ 184,698 $ 109,873
=========== ===========
</Table>
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements
9
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
For a capital share Six months ended Year Ended Year Ended Year Ended Year Ended Year Ended
outstanding March 31, 2008 September 30, September 30, September 30, September 30, September 30,
throughout each period (Unaudited) 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value,
beginning of period $ 17.39 $ 16.38 $ 15.41 $ 15.04 $ 14.50 $ 12.78
------- ------- ------- ------- ------- -------
INCREASE/ DECREASE
FROM INVESTMENT
OPERATIONS:
Net investment income 0.12 0.23 0.25 0.29 0.21 0.17
Net realized and
unrealized gain
(loss) on
investments (0.78) 1.58 0.95 0.38 0.53 1.72
------- ------- ------- ------- ------- -------
Total income
(loss) from
operations (0.66) 1.81 1.20 0.67 0.74 1.89
------- ------- ------- ------- ------- -------
LESS DIVIDENDS AND
DISTRIBUTIONS FROM:
Net investment income (0.09) (0.24) (0.23) (0.30) (0.20) (0.17)
Net realized gain on
investments (0.56) (0.56) -- -- -- --
------- ------- ------- ------- ------- -------
Total dividends and
distributions (0.65) (0.80) (0.23) (0.30) (0.20) (0.17)
------- ------- ------- ------- ------- -------
Net asset value, end
of period $ 16.08 $ 17.39 $ 16.38 $ 15.41 $ 15.04 $ 14.50
======= ======= ======= ======= ======= =======
TOTAL RETURN (3.85)%(a)(b) 11.33%(a) 7.90%(a) 4.48% 5.12% 14.87%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of
period (000's) $39,735 $44,348 $46,591 $50,454 $62,422 $60,928
Ratio of expenses to
average net assets
before fee waivers
and reimbursement of
other expenses 1.67%(c) 1.66% 1.71% 1.45% 1.33% 1.46%
Ratio of expenses to
average net assets
after fee waivers
and reimbursement of
other expenses 1.50%(c) 1.50% 1.50% 1.45% 1.33% 1.46%
Ratio of net
investment income to
average net assets
after fee waivers
and reimbursement of
other expenses 1.47%(c) 1.34% 1.57% 1.89% 1.42% 1.21%
Portfolio turnover 1.89%(b) 1.22% 2.94% 7.60% 8.89% 9.92%
</Table>
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements
(a) Total return would have been lower had certain expenses not been waived or
reimbursed.
(b) Not annualized
(c) Annualized
10
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
March 31, 2008 (Unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Holland Series Fund, Inc. (the "Company") was organized as a Maryland
corporation on June 26, 1995 and is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end, management investment
company. The Company currently has one portfolio, the Holland Balanced Fund (the
"Fund").
Investment Objective
The Fund is designed to provide investors with a convenient and professionally
managed vehicle for seeking a high total investment return. Total investment
return is the aggregate of dividend and interest income and realized and
unrealized capital gains/losses on investments, less expenses. 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.
11
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2008 (Unaudited)
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Tax
There is no provision for federal income or excise tax since the Fund continues
to qualify as a regulated investment company ("RIC") and intends to comply with
the requirements of Subchapter M of the Internal Revenue Code applicable to RICs
and to distribute substantially all of its taxable income and realized gains.
Valuation
Securities traded on an exchange are valued at their last sales price on that
exchange. Securities for which over-the-counter market quotations are available
are valued at the latest bid price. The Fund 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.
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. 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, 2008, the Investment Advisor waived $35,169 in advisory fees.
The
12
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2008 (Unaudited)
- --------------------------------------------------------------------------------
3. INVESTMENT ADVISORY AGREEMENT (continued)
Investment Adviser is controlled by Michael F. Holland, its managing member and
owner of 99% interest in the Investment Adviser.
As of March 31, 2008, Michael F. Holland and affiliates owned 112,313 shares
(4.55% of the shares outstanding) of the Fund.
4. ACCOUNTING, CUSTODY, ADMINISTRATION AND DISTRIBUTION AGREEMENTS
State Street Bank and Trust Company ("State Street"), pursuant to its
Administration Agreement, provides or arranges for the provision of, certain
administrative and accounting services for the Company, including maintaining
the books and records of the Company, and preparing certain reports and other
documents required by federal and / or state laws and regulations.
For these services, the Company pays State Street a fee at the annual rate of
0.10% of the Fund's average daily net assets up to $100 million, 0.08% of the
next $100 million, and 0.06% of those assets in excess of $200 million, subject
to certain minimum requirements, and reimbursement for out-of-pocket expenses
pursuant to the Administration Agreement. Pursuant to the Administration
Agreement, the Administrator is entitled to a minimum fee of $7,500 per month
unless waived by the Administrator. State Street also serves as the Fund's
custodian and accounting agent. Fees paid for custody and accounting services
rendered by State Street are based upon assets of the Fund and on transactions
entered into by the Fund during the period and are included in the
administration and custody fees in the Statement of Operations.
Alps Distributors Inc. pursuant to a distribution agreement with the Fund
provides distribution of the Fund's shares. The Investment 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, 2008, the Fund had the following liabilities:
<Table>
Payable for Capital Shares repurchased $32,805
Investment Advisory fee payable 25,107
Administration and custody fees payable 16,243
Directors fee payable 8,577
Other payable and accrued expenses 13,781
-------
Total liabilities. $96,513
=======
</Table>
13
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2008 (Unaudited)
- --------------------------------------------------------------------------------
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, 2008
aggregated $761,807 and $2,873,655 respectively. Purchases and sales of U.S.
Government Securities, for the six months ended aggregated $0 and $0
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,
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, 2008, 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 3/31/08 9/30/07
- ------------------------------------------------------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
Shares Sold 30,947 $ 511,221 116,494 $ 1,937,924
Shares Reinvested 87,009 1,431,888 114,317 1,906,912
-------- ----------- -------- -----------
117,956 1,943,109 230,811 3,844,836
Shares Redeemed (197,357) (3,251,189) (525,014) (8,764,112)
-------- ----------- -------- -----------
NET INCREASE/(DECREASE) (79,401) $(1,308,080) (294,203) $(4,919,276)
======== =========== ======== ===========
</Table>
10. INCOME TAXES
The components of net unrealized appreciation/ (depreciation) of investments
based on federal tax cost at March 31, 2008 for the Fund were as follows:
<Table>
<Caption>
- --------------------------------------------------------------------
Cost for Federal
Appreciation Depreciation Net Appreciation Tax Purposes
- --------------------------------------------------------------------
$7,246,858 $1,010,625 $6,236,233 $33,463,137
</Table>
14
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
March 31, 2008 (Unaudited)
- --------------------------------------------------------------------------------
In July, 2006, Financials Accounting Standards Board Interpretation No. 48,
Accounting for Uncertainty in Income Taxes -- an interpretation of FASB
Statement 109 ("FIN 48"), was issued and is effective for years beginning after
December 15, 2006. FIN 48 determines a threshold for financial statement
recognition, measurement and disclosure of a tax position taken (or expected to
be taken) on a tax return. The Fund's financial statements have not been
impacted by the adoption of FIN 48. However, the conclusions regarding FIN 48
may be subject to review and adjustment at a later date based on factors
including, but not limited to, further implementation guidance expected from
FASB, and on-going analysis of tax laws, regulations, and interpretations
thereof.
11. RECENT ACCOUNTING PRONOUNCEMENTS
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 in the
process of reviewing the Standard against its current valuation policies to
determine future applicability.
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, 2007 on Form N-PX, which
must be filed each year by August 31. Once filed, the most recent Form N-PX will
be available without charge, upon request, by calling 1-800-30-HOLLAND or on the
Securities and Exchange Commission's website at http://www.sec.gov.
QUARTERLY PORTFOLIO OF INVESTMENTS
A Portfolio of Investments is filed as of the end of the first and third quarter
of each fiscal year on Form N-Q and is available on the Security Exchange
Commission's website at http://www.sec.gov. Additionally, the Portfolio of
Investments may be reviewed and copied at the 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 ongoing costs, including management fees
and other Fund expenses. This example is intended to help you understand your
ongoing costs of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. It is based on an investment
of $1,000 invested at the beginning of the period and held for the entire six-
month period ended March 31, 2008.
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, 2008
- ---------------------------------------------------------------------------------
Value of a
$1,000 Expenses*
Investment at Paid During
Actual End of Period the Period
- ---------------------------------------------------------------------------------
$961.51 $7.36
</Table>
<Table>
<Caption>
- ---------------------------------------------------------------------------------
For the Six Months Ended
March 31, 2008
- ---------------------------------------------------------------------------------
Value of a
Hypothetical (assuming a 5% $1,000 Expenses*
return Investment at Paid During
before expenses) End of Period the Period
- ---------------------------------------------------------------------------------
$1,017.50 $7.57
</Table>
- --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio of 1.50%
multiplied by the average account value over the period multiplied by 183/366
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.
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 3, 2008
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 3, 2008