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: September 30, 2008
ITEM 1: SHAREHOLDER REPORT
HOLLAND BALANCED FUND
Annual Report
September 30,2008
[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
Report of Independent
Registered Public
Accounting Firm.......... 16
Unaudited Information...... 17
Directors and Officers..... 22
</Table>
Holland Series Fund, Inc.
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Holland Balanced Fund - LETTER FROM THE PRESIDENT
- --------------------------------------------------------------------------------
September 30, 2008
- --------------------------------------------------------------------------------
Dear Fellow Shareholders:
What a year! Since our Fund's birth in 1995 we have been tested periodically.
But the events of this past year have dramatically shown the common sense of
holding investment assets in U.S. Treasury obligations and in the equities of
some of the world's strongest companies.
Our Fund's cumulative total
(M. HOLLAND PHOTO)
return since inception (October 2, 1995 through September 30, 2008) is 104.31%.
For the twelve months ended September 30, 2008, our Fund's total return was
- -7.42%.
As our Fund's largest individual shareholder, I have been pleased by our Fund's
performance during our most recent challenging period.
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
- --------------------------------------------------------------------------------
September 30, 2008
- --------------------------------------------------------------------------------
Set forth below are the cumulative total return figures for the periods
indicated and a graph showing a hypothetical $10,000 investment made in the
Holland Balanced Fund, Standard & Poor's 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 September 30, 2008 is 1.63%.
(LINE GRAPH)
INVESTMENT PERFORMANCE
For the Periods Ended September 30, 2008
<Table>
<Caption>
Average Total Return
Annualized Cumulative
Average Average Total Return SINCE SINCE
Annualized Annualized Cumulative INCEPTION INCEPTION
Return over the period One Year Five Year Ten Year Ten Year (10/2/95) (10/2/95)
- -----------------------------------------------------------------------------------------------------------
HOLLAND BALANCED FUND
(A) -7.42% 4.08% 3.46% 40.55% 5.65% 104.31%
Lipper Balanced Fund
Index (b) -15.11% 4.78% 4.20% 50.89% 6.30% 121.26%
Standard & Poor's 500
Index (b) -23.61% 3.21% 1.38% 14.69% 5.46% 99.58%
90 Day US Treasury Bill
(b) 2.12% 3.06% 3.29% 38.27% 3.72% 60.79%
- -----------------------------------------------------------------------------------------------------------
</Table>
2
Holland Series Fund, Inc.
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Holland Balanced Fund - MANAGEMENT DISCUSSION OF
FUND PERFORMANCE
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September 30, 2008
- --------------------------------------------------------------------------------
Since inception (October 2, 1995 through September 30, 2008), our Fund's total
return was 104.31% compared to 121.26% for the Lipper Balanced Fund Index, which
is an unmanaged index. For the past twelve months ended September 30, 2008, our
Fund's total return was -7.42% compare to -15.11% for the Lipper Balanced Fund
Index.
Our Fund's exclusive investment in U.S. Treasury debt obligations (Treasury
Inflation Protection Securities -TIPS and Treasury Notes) and U.S. equities of
only the strongest and most successful companies has continued to be rewarded
during the period.
Our portfolio composition by sector, which is detailed below, was favored
primarily by the relatively positive results of our large capitalization
holdings, as well as our U.S. Treasury holdings. As riskier investment holdings
became relatively unattractive, our "all weather" portfolio was in a favorable
position.
Portfolio composition by sector
(AS A% OF TOTAL NET ASSETS) - UNAUDITED
- --------------------------------------------------------------------------------
(LINE GRAPH)
3
Holland Series Fund, Inc.
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Holland Balanced Fund - MANAGEMENT DISCUSSION OF
FUND PERFORMANCE (continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 90-Day U.S. Treasury Bill rate is the average return on
three month U.S. Treasury Bills. The Standard & Poor's 500 Index is
unmanaged and does not reflect the actual cost of investing in the
instruments that comprise the index. You cannot invest directly in an index.
4
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
September 30, 2008 Shares Value(+)
- -----------------------------------------------------------------------
COMMON STOCKS-62.0%
COMPUTERS-4.1%
International Business Machines Corp. 12,800 $ 1,497,088
----- -----
ELECTRONICS-7.9%
3M Co. 21,200 1,448,172
Intel Corp. 77,800 1,457,194
----- -----
2,905,366
----- -----
ENTERTAINMENT & LEISURE-4.6%
The Walt Disney Co. 55,000 1,687,950
----- -----
FINANCIAL-5.0%
American Express Co. 30,000 1,062,900
JPMorgan Chase & Co. 17,000 793,900
----- -----
1,856,800
----- -----
FOOD & BEVERAGES-4.3%
PepsiCo, Inc. 22,500 1,603,575
----- -----
INSURANCE-6.1%
Berkshire Hathaway, Inc. Class A* 11 1,436,600
Chubb Corp 15,000 823,500
----- -----
2,260,100
----- -----
OIL/GAS-7.8%
Exxon Mobil Corp. 19,000 1,475,540
Schlumberger, Ltd. 18,200 1,421,238
----- -----
2,896,778
----- -----
PHARMACEUTICALS-5.8%
Johnson & Johnson 25,500 1,766,640
Pfizer, Inc. 20,000 368,800
----- -----
2,135,440
----- -----
PRODUCER GOODS-3.6%
General Electric Co. 52,900 1,348,950
----- -----
RETAIL-4.7%
Home Depot, Inc. 21,000 543,690
Wal-Mart Stores, Inc. 20,000 1,197,800
----- -----
1,741,490
----- -----
SOFTWARE-4.1%
Microsoft Corp. 56,400 1,505,316
----- -----
TELECOMMUNICATIONS-4.0%
Comcast Corp. Class A 75,000 1,472,250
----- -----
Total Common Stocks
(Cost-$19,591,412) 22,911,103
----- -----
</Table>
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
5
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
September 30, 2008 Principal Value(+)
- -----------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES-35.5%
U.S. TREASURY NOTES-35.5%
United States Treasury Note, 5.00%
due 2/15/11 $4,000,000 $ 4,277,500
United States Treasury Note**, 3.50%
due 1/15/11 8,529,368 8,869,877
----- -----
Total U.S. Government Securities
(Cost-$12,590,479) 13,147,377
----- -----
REPURCHASE AGREEMENT-2.4%
State Street Bank and Trust Co.
Repurchase Agreement, 0.30% due
10/01/08 in the amount $875,007;
issued 09/30/08 (Collateralized by
$875,000, FNMA,
5.30% due 05/07/12 with a market
value of $894,688)
(Cost $875,000) 875,000 875,000
----- -----
Total Investments-99.9%
(Cost-$33,056,891) 36,933,480
----- -----
OTHER ASSETS IN EXCESS OF
LIABILITIES-0.1% 33,277
----- -----
NET ASSETS-100%
Applicable to 2,418,128 outstanding
$0.01 par value shares (authorized
1,000,000,000) $36,966,757
===== =====
Net asset value, offering price and
redemption price per share $ 15.29
===== =====
</Table>
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
6
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENT OF NET ASSETS (concluded)
- --------------------------------------------------------------------------------
<Table>
<Caption>
September 30, 2008
- ----------------------------------------------------------------
COMPONENTS OF NET ASSETS AS OF SEPTEMBER 30, 2008
Capital stock at par value ($0.01) $ 24,181
Capital stock in excess of par value 32,062,337
Undistributed net investment income 233,104
Net accumulated realized gain on investments in
securities 770,546
Net unrealized appreciation on investments in
securities 3,876,589
-----------
Net Assets $36,966,757
===========
</Table>
- --------------------------------------------------------------------------------
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>
Year Ended September 30, 2008
- -----------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 931,259
Dividends 506,553
-----------
Total investment income 1,437,812
-----------
EXPENSES:
Investment advisory fees (Note 3) 300,605
Administration and custody fees (Note 4) 141,068
Transfer agent fees 58,399
Shareholder reports 56,243
Audit fees 28,201
Registration fees 21,966
Insurance fees 20,054
Directors' fees 12,492
Legal fees 10,224
Miscellaneous expenses 4,995
-----------
Total operating expenses 654,247
Waiver of investment advisory fee (Note 3) (53,037)
-----------
Net Expenses 601,210
-----------
Net investment income 836,602
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments 1,178,153
Net change in unrealized appreciation (5,117,934)
-----------
Net realized and unrealized loss on investments (3,939,781)
-----------
Net decrease in net assets resulting from
operations $(3,103,179)
===========
</Table>
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
8
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Year Ended Year Ended
September 30, September 30,
2008 2007
- -------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income $ 836,602 $ 610,442
Net realized gain 1,178,153 1,064,205
Net change in unrealized appreciation on
investments (5,117,934) 3,217,666
----------- -----------
Increase/(Decrease) in net assets from
operations (3,103,179) 4,892,313
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (713,371) (656,920)
Net realized gains (1,394,825) (1,559,157)
CAPITAL SHARE TRANSACTIONS, NET (NOTE 9) (2,169,437) (4,919,276)
----------- -----------
Decrease in Net Assets (7,380,812) (2,243,040)
----------- -----------
NET ASSETS:
Beginning of year 44,347,569 46,590,609
----------- -----------
End of year $36,966,757 $44,347,569
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME, END
OF YEAR $ 233,104 $ 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 Year Ended Year Ended Year Ended Year Ended Year Ended
outstanding September 30, September 30, September 30, September 30, September 30,
throughout each year 2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value, beginning
of year $ 17.39 $ 16.38 $ 15.41 $ 15.04 $ 14.50
------- ------- ------- ------- -------
INCREASE/ DECREASE FROM
INVESTMENT OPERATIONS:
Net investment income 0.35 0.23 0.25 0.29 0.21
Net realized and unrealized
gain (loss) on investments (1.60) 1.58 0.95 0.38 0.53
------- ------- ------- ------- -------
Total income (loss)
from operations (1.25) 1.81 1.20 0.67 0.74
------- ------- ------- ------- -------
LESS DIVIDENDS AND
DISTRIBUTIONS FROM:
Net investment income (0.29) (0.24) (0.23) (0.30) (0.20)
Net realized gain on
investments (0.56) (0.56) -- -- --
------- ------- ------- ------- -------
Total dividends and
distributions (0.85) (0.80) (0.23) (0.30) (0.20)
------- ------- ------- ------- -------
Net asset value, end of year $ 15.29 $ 17.39 $ 16.38 $ 15.41 $ 15.04
======= ======= ======= ======= =======
TOTAL RETURN (7.42)%(a) 11.33%(a) 7.90%(a) 4.48% 5.12%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(000's) $36,967 $44,348 $46,591 $50,454 $62,422
Ratio of expenses to average
net assets before fee
waivers and reimbursement
of other expenses 1.63% 1.66% 1.71% 1.45% 1.33%
Ratio of expenses to average
net assets after fee
waivers and reimbursement
of other expenses 1.50% 1.50% 1.50% 1.45% 1.33%
Ratio of net investment
income to average net
assets after fee waivers
and reimbursement of other
expenses 2.09% 1.34% 1.57% 1.89% 1.42%
Portfolio turnover 1.96% 1.22% 2.94% 7.60% 8.89%
</Table>
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
(a) Total return would have been lower had certain expenses not been waived or
reimbursed.
10
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
September 30, 2008
- --------------------------------------------------------------------------------
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 expense. 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 Directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, in the normal course of business the Fund
enters into contracts that provide general indemnifications to other parties.
The Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Fund that have not yet
occurred.
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)
- --------------------------------------------------------------------------------
September 30, 2008
- --------------------------------------------------------------------------------
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.
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 year ended
September 30, 2008, the Investment Adviser waived $53,037 in advisory fees. The
Investment Adviser is controlled by Michael F. Holland, its managing member and
owner of 99% interest in the Investment Adviser.
12
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
September 30, 2008
- --------------------------------------------------------------------------------
3. INVESTMENT ADVISORY AGREEMENT (continued)
As of September 30, 2008, Michael F. Holland and affiliates owned 113,730 shares
(4.70% 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 September 30, 2008, the Fund had the following liabilities:
<Table>
Payable for Capital Shares repurchased.......... $ 3,721
Investment Advisory fee payable................. 25,983
Directors fee payable........................... 1,077
Administration fees payable..................... 8,278
Other payable and accrued expenses.............. 41,778
-------
Total liabilities............................. $80,837
=======
</Table>
13
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
September 30, 2008
- --------------------------------------------------------------------------------
7. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities, other than short-term investments
and U.S. Government Securities, for the year ended September 30, 2008 aggregated
$761,807 and $3,655,468 respectively. There were no purchases and sales of U.S.
Government Securities for the year ended September 30, 2008.
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 September 30, 2008, there were 1,000,000,000 shares of $.01 par value
capital stock authorized. Transactions in capital stock were as follows:
<Table>
<Caption>
- ----------------------------------------------------------------------------
Year Ended Year Ended
9/30/08 9/30/07
- ----------------------------------------------------------------------------
Shares Amount Shares Amount
- ----------------------------------------------------------------------------
Shares Sold 62,953 $ 1,016,663 116,494 $ 1,937,924
Shares Reinvested 114,277 1,863,405 114,317 1,906,912
-------- ----------- -------- -----------
177,230 2,880,068 230,811 3,844,836
Shares Redeemed (309,106) (5,049,505) (525,014) (8,764,112)
-------- ----------- -------- -----------
NET DECREASE (131,876) $(2,169,437) (294,203) $(4,919,276)
======== =========== ======== ===========
- ----------------------------------------------------------------------------
</Table>
14
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
September 30, 2008
- --------------------------------------------------------------------------------
10. INCOME TAXES
The components of net unrealized appreciation/ (depreciation) of investments
based on federal tax cost at September 30, 2008 for the Fund were as follows:
<Table>
<Caption>
- ---------------------------------------------------------------------
Cost for Federal
Appreciation Depreciation Net Appreciation Tax Purposes
- ---------------------------------------------------------------------
$5,348,663 $1,497,736 $3,850,927 $33,082,553
</Table>
As of September 30, 2008 the components of distributable earnings on a tax basis
were $233,104 for undistributed ordinary income and $796,208 of undistributed
long term capital gains.
The tax character of distributions paid during the year ended September 30, 2008
was $713,371 for distributions paid for ordinary income and $1,394,825 for long
term capital gains. The tax character of distributions paid during the year
ended September 30, 2007 was $656,920 for distributions paid for ordinary income
and $1,559,157 for long term capital gains.
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48").
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is
required for fiscal years beginning after December 15, 2006 and is to be applied
to all open tax years as of the effective date. Recent SEC guidance allows
implementing FIN 48 in fund asset calculations as late as the fund's last net
asset value calculation in the first required financial statement reporting
period. Accordingly the Fund implemented FIN 48 on March 31, 2008. Management
has evaluated the application of FIN 48 and has determined there is no impact on
the Fund's financial statements.
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. As of
September 30, 2008, the Fund does not believe the adoption of SFAS No. 157 will
impact the amounts reported in the financial statements, however, additional
disclosures will be required about the inputs used to develop the measurements
and the effect of certain of the measurements reported on the statement of
changes in net assets for a fiscal period.
15
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
(BRIGGS, BUNTING & DOUGHERTY, LLP)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS OF HOLLAND SERIES FUND, INC. AND THE SHAREHOLDERS
OF HOLLAND BALANCED FUND
We have audited the accompanying statement of net assets of the Holland Balanced
Fund, a series of shares of Holland Series Fund, Inc., as of September 30, 2008,
and the related statement of operations for the year then ended and the
statements of changes in net assets and the financial highlights for each of the
years in the two-year period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for each of
the years through September 30, 2006 were audited by other auditors whose report
dated November 6, 2006 expressed an unqualified opinion on such financial
highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of September 30, 2008 by correspondence with
the custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Holland Balanced Fund as of September 30, 2008, the results of its operations
for the year then ended and the changes in its net assets and its financial
highlights for each of the years in the two-year period then ended, in
conformity with accounting principles generally accepted in the United States of
America.
(BRIGGS, BUNTING & DOUGHERTY, LLP)
BRIGGS, BUNTING & DOUGHERTY, LLP
PHILADELPHIA, PENNSYLVANIA
NOVEMBER 21, 2008
16
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, 2008 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.
APPROVAL OF CONTINUATION OF INVESTMENT ADVISORY AGREEMENT
General Background. On May 7, 2008, the Board of Directors, including all of
the Independent Directors, approved renewal of the Fund's Advisory Agreement
with Holland and Company LLC (the "Adviser") for an additional one-year term.
During the course of each year, the Directors receive a wide variety of
materials relating to the services provided by the Adviser, including reports on
the Fund's investment results, portfolio composition, compliance with applicable
regulations, portfolio trading practices, and shareholder services. In
determining whether to renew the Advisory Agreement, the Board also reviewed
additional information provided by the Adviser in accordance with Section 15(c)
of the Investment Company Act of 1940, as amended.
The information below summarizes the Board's considerations and conclusions in
connection with its approving the renewal of the Advisory Agreement. In
considering the continuation of the Agreement, the Directors did not identify
any particular information that was all-important or controlling and each
Director attributed different weights to various factors. In considering these
matters, the Directors were advised with respect to relevant legal standards by
counsel to the Fund.
Quality of Services. In reviewing the services that the Adviser provides to the
Fund, the Directors considered Michael Holland's extensive experience in the
securities and investment management industries. They noted that Mr. Holland is
the largest shareholder of the Fund. The Directors also noted that the Adviser
has no clients other than the Fund and thus devotes all its research and energy
to managing the Fund.
In reviewing the quality of services provided to the Fund, the Directors
reviewed the performance of the Fund compared with the returns of the S&P 500
Index, the 90 Day US Treasury Bill, the Lipper Balanced Fund Index and the
average returns of all funds in the balanced funds category of Lipper Inc. (the
"Lipper Performance Universe") and of a group balanced funds considered to be
comparable to the Fund
17
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - UNAUDITED INFORMATION (continued)
- --------------------------------------------------------------------------------
APPROVAL OF CONTINUATION OF INVESTMENT ADVISORY AGREEMENT (continued)
by Lipper Inc. (the "Lipper Performance Group"). The funds comprising the Lipper
Performance Universe and the Lipper Performance Group had been selected by
Lipper Inc. with no input from the Adviser. The Directors observed that the
Fund's returns for the one-year period ended March 31, 2008 exceeded the return
of the other indexes and the average returns of the universes and peer groups.
They further observed that the Fund's returns for the three-year period exceeded
the return of the S&P 500 Index and the 90 Day US Treasury Bill. The Directors
noted that the Fund has historically been positioned for a market that favors
large capitalization growth stocks, and considered that such stocks had
performed poorly in the past six-years, a period of underperformance for the
Fund. They observed that the Fund appeared unusual among balanced funds because
the allocation of assets among asset categories (equity securities vs.
investment grade fixed-income securities and money market instruments) is fixed
under ordinary market conditions thereby limiting the Adviser's ability to take
advantage of out-performance, or to avoid underperformance, in a particular
asset category. They noted that such an approach might generally be expected to
lead to periods of underperformance and that the Fund is intended as a long-term
investment.
The Directors noted that, although there had been a number of redemption in the
recent periods, the shareholder base appeared generally to be made up of people
who desire Mr. Holland's expertise and judgment and are committed to the Fund's
investment mandate.
Advisory Fees and Total Expenses. In reviewing the advisory fees borne by the
Fund, the Directors reviewed information regarding the advisory fees of funds
included in a group of balanced funds considered to be comparable to the Fund by
Lipper Inc. (the "Lipper Expense Group"), and all funds in the retail no-load
balanced fund category of Lipper Inc. (the "Lipper Expense Universe"). They
noted that the Fund's advisory fees were greater than the average fees of the
Lipper Expense Group and the Lipper Expense Universe and that the total expenses
were greater than the average expense ratios of the other funds in the Lipper
Expense Group and the Lipper Expense Universe.
The Directors observed that in the interest of limiting the expenses of the
Fund, the Adviser had voluntarily capped the Fund's total expenses at 1.50% of
the Fund's average daily net assets since the Fund's inception. Under the
voluntary cap, the Adviser reimburses the Fund when the actual expenses of the
Fund exceed this cap and thus, so long as the voluntary cap remains in place,
the total expenses paid by the Fund's shareholders never exceed 1.5%. They noted
that the Fund's total expense ratio was comparable to the total expense ratios
of other similar funds.
Profitability and Economies of Scale. The Directors considered information
prepared by the Adviser with respect to the profitability of its relationship
with the Fund, the extent to which economies of scale are realized by the
Adviser in managing the Fund, and whether the Fund should implement advisory fee
breakpoints to reflect any such economies of scale.
The Directors discussed in detail the analysis presented regarding the Adviser's
profitability. The Directors determined that the Adviser's profitability
appeared reasonable.
18
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - UNAUDITED INFORMATION (continued)
- --------------------------------------------------------------------------------
APPROVAL OF CONTINUATION OF INVESTMENT ADVISORY AGREEMENT (continued)
The Directors agreed that due to the Fund's small asset size and the fact that
the Adviser only manages the Fund, the Fund has not to date realized appreciable
economies of scale. They agreed generally with the Adviser's views that (i)
while there is no uniformity or pattern in the fees and asset levels at which
breakpoints occur, the first breakpoint is generally at an asset level higher
than that of the Fund; (ii) it is unlikely that the Fund's assets will grow to a
level at which economies of scale would be realized; and (iii) unlike the
Adviser, a substantial number of the advisers of competing products manage
assets across a variety of products and services, resulting in potential
economies of scale to an adviser from non-mutual fund products. On that basis,
the Directors determined not to require implementation of breakpoint at this
time.
Ancillary Benefits and Other Factors. The Directors also considered that the
Adviser and its affiliates appear to receive no significant benefits other than
investment advisory fees as a result of the Adviser's relationship with the
Fund. The Directors observed that the Adviser had never entered into soft
dollar, revenue sharing or directed brokerage arrangements.
Conclusions. After reviewing various materials and reports provided, the
Directors concluded that (i) the Adviser and Mr. Holland were sufficiently
experienced and qualified to provide investment advisory services for the Fund;
(ii) the Adviser is committed to the Fund, as evidenced by the fee cap and the
fact that the Fund is the Adviser's sole client; (iii) Mr. Holland is committed
to the Fund, as evidenced by his large ownership in the Fund; (iv) although the
Fund's advisory fee is higher than that paid by many other comparable funds, the
Fund's overall expense ratio is generally comparable to those of other funds
with similar investment objectives and similar asset sizes, and the investment
limitation appeared adequate to maintain that comparability; (v) the Fund's
performance appears unfavorable when compared to its relevant benchmarks and
other funds with similar investment objectives and similar asset sizes
reflecting the fact that the Fund's assets are concentrated in stocks that are
currently out of favor in the marketplace, but the Directors noted that the
performance of stock sectors is cyclical and that the Fund's investments may
return to favor in the future; (vi) the profitability of the Adviser for
providing services to the Fund appears reasonable; (vii) the Fund's expense
ratios and performance are disclosed in the Fund's registration statement and/or
reports to shareholders, allowing investors to make informed decisions about
investment in the Fund; (viii) the Fund's small asset size limits the Fund's
potential to generate economies of scale; (ix) the lack of breakpoints in the
Fund's advisory fees is reasonable given the Fund's anticipated continued small
asset size; and (x) although the Fund has experienced substantial redemptions,
there remains a substantial core of investors who wish to remain with the Fund
and the Adviser.
The Directors also noted generally that the Fund had been in existence for the
substantial period of time, that investors in the Fund appear to appreciate the
expertise and judgment Mr. Holland brings to the Fund from his long experience
in the securities and investment management industries, and that, from their
apparent commitment to the Fund, shareholders appear satisfied with the level of
fees charged by the Adviser to access Mr. Holland's expertise and judgment.
19
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - UNAUDITED INFORMATION (continued)
- --------------------------------------------------------------------------------
APPROVAL OF CONTINUATION OF INVESTMENT ADVISORY AGREEMENT (continued)
In light of the information presented to them and the other factors described
above, the Directors concluded, in the exercise of their business judgment, that
the fee paid by the Fund under the Advisory Agreement generally appeared
reasonable and voted to approve the continuation of the Agreement for the coming
year.
FEDERAL TAX INFORMATION
Certain tax information for the Fund is required to be provided to shareholders
based on the Fund's income and distributions for the taxable year ended
September 30, 2008. The amounts shown may differ from those elsewhere in this
report due to differences between tax and financial reporting requirements. In
January 2009, shareholders will receive Form 1099-DIV which will include their
share of qualified dividends, and capital gains distributed during the calendar
year 2008. Shareholders are advised to check with their tax advisors for
information on the treatment of these amounts on their individual income tax
returns.
The Holland Balanced Fund designated 62.77% of ordinary income dividends as
income qualifying for dividends received deduction for the fiscal year ended
September 30, 2008.
Under Section 854(b)(2) of the Internal Revenue Code, the Holland Balanced Fund
designates $491,324 as qualified dividends received by the Fund and $1,394,825
for long term capital gains, for the fiscal year ended September 30, 2008.
SHAREHOLDER EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs and (2) ongoing costs, including management fees, and other Fund expenses.
This example is intended to help you understand your ongoing costs of investing
in the Fund and to compare these costs with the ongoing costs of investing in
other mutual funds. It is based on an investment of $1,000 invested at the
beginning of the period and held for the entire six-month period ended September
30, 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.
20
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - UNAUDITED INFORMATION (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
- --------------------------------------------------------
For the Six Months Ended September 30, 2008
- --------------------------------------------------------
Value of a
$1,000 Expenses*
Investment at Paid During
Actual End of Period the Period
- --------------------------------------------------------
$962.87 $7.36
</Table>
<Table>
<Caption>
- --------------------------------------------------------
For the Six Months Ended September 30, 2008
- --------------------------------------------------------
Hypothetical Value of a
(assuming a 5% $1,000 Expenses*
return before Investment at Paid During
expenses) End of Period the Period
- --------------------------------------------------------
$1,017.50 $7.57
</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 183/366
to reflect the one-half year period.
21
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund - DIRECTORS AND OFFICERS (UNAUDITED)
- --------------------------------------------------------------------------------
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN OTHER
NAME, POSITION(S) TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
ADDRESS, HELD WITH AND LENGTH OF PRINCIPAL OCCUPATION OVERSEEN BY HELD BY
AND AGE FUND TIME SERVED DURING PAST FIVE YEARS DIRECTOR DIRECTOR
- ----------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR:
Michael F. Director, Term: Unlimited Holland & Company 1 Chairman and
Holland Chairman of the Elected: 9/95 L.L.C., Chairman, 1995 - Trustee,
375 Park Board, President present. Scottish Widows
Avenue and Treasurer Investment
New York, Partnership
NY 10152 Trust; Trustee,
Age: 64 State Street
Master Funds and
State Street
Institutional
Investment
Trust; and
Director, The
China Fund,
Inc., The Taiwan
Fund, Inc. and
Reaves Utility
Income Fund.
INDEPENDENT DIRECTORS:
Desmond G. Director Term: Unlimited Chairman, North American 1 Chairman, U.S.
FitzGerald Elected: 9/95 Properties Group (Real Guaranteed
375 Park Estate), Finance Corp.;
Avenue 1987 - present. Advisory
New York, Director, Bank
NY 10152 of New York;
Age: 64 Director,
Hilliard Farber
& Co., Inc.; and
Trustee,
Williams Capital
Management
Trust.
James Lee Director Term: Unlimited Investment Adviser, Director,
900 South Elected: 5/08 James Lee Investment Scholarship Fund
Bay View Advisers LLC, 1996 - for Inner City
Avenue present. Children.
Seaside
Park, NJ
08752
Age: 67
Jeff C. Director Term: Unlimited Chairman, Junction 1 None
Tarr Elected: 9/95 Advisors (Financial
Junction Services), 1981 -
Advisors present.
Apartment
25C
145 Central
Park West
New York,
NY 10023
Age: 64
OFFICERS:
Tana Vice President Term: Unlimited Consultant to Holland & -- Member of the
Tselepis Chief Compliance Elected Vice Company, LLC, 1997 - Board of
375 Park Officer President: 5/02 1999. Governors of
Avenue Elected Chief Tufts Medical
New York, Compliance Center; Director
NY 10152 Officer: 9/04 and Treasurer of
Age: 73 YWCAMalden
Julie A. Secretary Term: Indefinite Senior Vice President -- --
Tedesco Elected: 5/02 and Senior Counsel of
4 Copley State Street Bank and
Place, 5th Trust Company (2000 -
Floor present).
Boston, MA
02116
Age: 51
</Table>
* Michael F. Holland is an interested person of the Fund because of his
employment relationship with Holland & Company L.L.C., the Investment Adviser.
The Statement of Additional Information for the Fund includes additional
information about the Fund's Directors and Officers and is available without
charge, upon request, by calling 1-800-30-HOLLAND.
22
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 Mutual 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
1835 Market St., 26th Floor
Philadelphia, PA 19103
- ---------------------
Holland & Company L.L.C.
375 Park Avenue
New York, New York 10152
Phone 800-30-HOLLAND
Email mike@thehollandfund.com
Website www.thehollandfund.com
This report has been prepared for the
Holland Balanced Fund's Shareholders
and may be distributed to others only
if preceded or accompanied by a prospectus.
ITEM 2. CODE OF ETHICS
(a) Holland Series Fund, Inc. (the "Fund") adopted a Code of Ethics for
Principal Executive and Senior Financial Officers (the "Code of Ethics") on
November 6, 2003.
(c) There have been no amendments to the Fund's Code of Ethics since its
adoption.
(d) There have been no waivers granted by the Fund to individuals covered by the
Fund's Code of Ethics since its adoption.
(f) A copy of the Fund's Code of Ethics has been posted on
www.hollandbalancedfund.com, the Fund's website.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
(a)(1) The Board of Directors of the Fund has determined that the Fund has one
Board member serving on the Fund's Audit Committee that possess the attributes
identified in Instructions 2(b) of Item 3 to Form N-CSR to qualify as an "audit
committee financial expert."
(2) Desmond G. FitzGerald is the Fund's audit committee financial expert.
The Board also determined that Mr. FitzGerald was "independent" as that term is
defined in the Sarbanes-Oxley Act of 2002.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The Fund changed independent registered public accounting firms for the fiscal
year ended September 30, 2007.
(a) Audit Fees
For the fiscal year ending September 30, 2008 and September 30, 2007,
the aggregate audit fees billed for professional services rendered by
Briggs, Bunting & Dougherty ("Briggs, Bunting"), the Fund's principal
accountant, for the audit of the Fund's annual financial statements
and services normally provided by Briggs, Bunting in connection with
the Fund's statutory and regulatory filings or engagement were $19,000
and $18,000.
(b) Audit-Related Fees
For the fiscal year ending September 30, 2008 and September 30, 2007,
there were no fees for assurance and related services by Briggs,
Bunting reasonably related to the performance of the audit of the
Fund's financial statements that were not reported under (a) of this
Item.
(c) Tax Fees
For the fiscal year ending September 30, 2008 and September 30, 2007,
the aggregate tax fees billed for professional services rendered by
Brigg, Bunting for tax compliance, tax advice, and tax planning were
$2,500 and $2,500. Services included the review of income and excise
tax returns for the Fund.
(d) All Other Fees
For the fiscal year ending September 30, 2008 and September 30, 2007,
there were no fees billed for professional services rendered by
Briggs, Bunting for products and services provided by Briggs, Bunting,
other than the services reported in (a) through (c).
For the fiscal year ended September 30, 2008 and September 30, 2007,
there were no fees billed for professional services rendered by
Briggs, Bunting for products and services provided by Briggs, Bunting
to Holland & Company, L.L.C. (the "Adviser") and any entity
controlling, controlled by, or under common control with the Adviser
that provides ongoing services to the Fund that (i) relate directly to
the operations and financial reporting of the Fund and (ii) were
pre-approved by the Fund's audit committee.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
The Fund's Audit Committee Charter states the following with respect
to pre-approval procedures:
Pre-Approval Requirements. Before the independent accountants are
engaged by the Fund to render audit or non-audit services,
either:
1. The Audit Committee shall pre-approve all auditing
services and permissible non-audit services (e.g., tax
services) provided to the Fund. The Audit Committee may
delegate to one or more of its members the authority to
grant pre-approvals. Any decision of any member to whom
authority is delegated under this section shall be
presented to the full Audit Committee at its next
regularly scheduled meeting;
or
2. The engagement to render the auditing service or
permissible non-audit service is entered into pursuant
to pre-approval policies and procedures established by
the Audit Committee. Any such policies and procedures
must (1) be detailed as to the particular service and
(2) not involve any delegation of the Audit Committee's
responsibilities to the investment adviser. The Audit
Committee must be informed of each service entered into
pursuant to the policies and procedures. A copy of any
such policies and procedures shall be attached as an
exhibit to the Audit Committee Charter.
De Minimis Exceptions to Pre-Approval Requirements. Pre-Approval
for a service provided to the Fund other than audit, review or
attest services is not required if: (1) the aggregate amount of
all such non-audit services provided to the Fund constitutes not
more than 5 percent of the total amount of revenues paid by the
Fund to the independent accountants during the fiscal year in
which the non-audit services are provided; (2) such services were
not recognized by the Fund at the time of the engagement to be
non-audit services; and (3) such services are promptly brought to
the attention of the Audit Committee and are approved by the
Audit Committee or by one or more members of the Audit Committee
to whom authority to grant such approvals has been delegated by
the Audit Committee prior to the completion of the audit.
Pre-Approval of Non-Audit Services Provided to the Adviser and
Certain Control Persons. The Audit Committee shall pre-approve
any non-audit services proposed to be provided by the independent
accountants to (a) the investment adviser and (b) any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the Fund, if
the independent accountants' engagement with the investment
adviser or any such control persons relates directly to the
operations and financial reporting of the Fund. It shall be the
responsibility of the independent accountants to notify the Audit
Committee of any non-audit services that need to be pre-approved.
Application of De Minimis Exception: The De Minimis exception set
forth above applies to pre-approvals under this Section as well,
except that the "total amount of revenues" calculation is based
on the total amount of revenues paid to the independent
accountants by the Fund and any other entity that has its
services approved under this Section (i.e., the investment
adviser or any control person).
(e)(2) Percentages of Services
None of the services described in paragraphs (b) through (d) of this
Item were performed in reliance on paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X during the period for time for which such was
effective.
(f) Not applicable.
(g) Total Fees Paid By Adviser and Certain Affiliates
For the fiscal year ending September 30, 2008 and September 30, 2007,
the aggregate non-audit fees billed by Briggs, Bunting for services
rendered to the Fund and Holland & Company, L.L.C. (the "Adviser") and
any entity controlling, controlled by, or under common control with
the Adviser that provided ongoing services to the Fund were $0 and $0.
(h) Not applicable.
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 Filing.
(a)(2) The certifications required by Rule 30a-2 of the Investment Company Act
of 1940, as amended (the "1940 Act") are attached hereto.
(a)(3) Not applicable to the Filing.
(b) The certifications required by Rule 30a-2(b) of the 1940 Act and Sections
906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
HOLLAND SERIES FUND, INC.
By: /s/ Michael F. Holland
-------------------------------
Michael Holland
President and Treasurer of
Holland Series Fund, Inc.
Date: December 2, 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: December 2, 2008