UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-21576
Stock Dividend Fund, Inc.
(Exact name of registrant as specified in charter)
8150 N. Central Expressway #M1120 Dallas, Texas 75206
(Address of principal executive offices)
Laura S. Adams
8150 N. Central Expressway #M1120 Dallas, Texas 75206
(Name and address of agent for service)
Registrants telephone number, including area code: 800-704-6072
Date of fiscal year end: December 31
Date of Reporting Period: June 30, 2012
Item 1. Report to Shareholders.
STOCK DIVIDEND FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 2012
Stock Dividend Fund, Inc.
8150 N. Central Expressway #M1120
Dallas, Texas 75206
1-800-704-6072
Fund Symbol: SDIVX
Dear shareholders of Stock Dividend Fund, Inc.,
The Fund ended the first six months of 2012 with a Net Asset Value per
share of $23.74, up from a Net Asset Value per share of $21.80 at the
beginning of the year.
For the period December 31, 2011 through June 30, 2012 the Fund's total
return was up 8.90% versus the S&P 500 up 9.49%.
The Fund's portfolio continues to be weighted toward large companies that on
average have very little debt, low pension and post-retirement liabilities,
high dividend income, strong dividend coverage and stable cash flows.
Whether the economy weakens or strengthens, and especially if interest
rates stay low as we
expect, this should be a rewarding combination as investment allocation
decisions are being forced into this category for income and growth.
Our top holdings and industry group exposures, as of June 30, 2012, are listed
below.
Regardless of general market volatility in the short term, we are strongly
encouraged with the valuation levels, dividend income and prospects of our
portfolio and hope to complete the year with excellent absolute and relative
returns utilizing our value strategy.
Sincerely,
Steven Adams
Portfolio Manager
STOCK DIVIDEND FUND, INC.
Top Ten Holdings and Asset Allocation
June 30, 2012
Top Ten Holdings*
(% of Net Assets)
Phillip Morris Intl. 5.69%
Verizon Communications, Inc. 5.29%
Intel 5.16%
Pfizer 4.96%
Chevron 4.95%
Walmart 4.60%
General Electric 4.56%
Freeport-McMoran Copper and Gold 4.46%
AT&T 4.34%
Home Depot 4.29%
------
48.30%
Asset Allocation
(% of Net Assets)
Petroleum Refining 12.97%
Pharmaceutical Preparations 12.22%
Cigarettes 9.81%
Telephone Communications, Except Radiotelephone 9.63%
Semi Conductors and Related Devices 5.16%
Department Stores 4.60%
Electric and other Electrical Equipment and Components 4.56%
Metal Mining Services 4.46%
Lumber and Other Building Materials Dealers 4.29%
Industrial, Inorganic Chemicals 4.23%
National Commercial Banks 4.05%
Railroads, Line-Haul Operating 3.90%
Drilling, Oil & Gas Wells 3.58%
Electric Services 3.56%
Groceries, General Line 3.49%
Chewing and Smoking Tobacco and Snuff 3.31%
Computer and Office Equipment 3.26%
Refuse Systems 1.79%
Other Assets, Less Liabilities, Net 1.14%
-----
100.00%
*Portfolio holdings are subject to change and are not recommendations of
individual stocks
STOCK DIVIDEND FUND, INC.
EXPENSES
JUNE 30, 2012
As a shareholder of the Fund you incur ongoing costs including
management fees and other operating expenses. This example is intended
to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing
in other mutual funds. This example is based on an investment of
$1,000 invested at the beginning of the period and held for the entire
six month period of December 31, 2011 to June 30, 2012.
Actual Expenses
The first line of the 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 at the beginning of
the period, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,500
account value divided by $1,000 equals 8.5), then multiply this result
by the number in the first line under the heading "Expenses Paid During
Period" to estimate the expenses you paid on your account during the
period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about
hypothetical account values and hypothetical expenses based on the
Fund's actual expense ratio and an assumed rate of return of 5% per
year before expenses, which is not the Fund's actual return. The
hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing
in the Fund to other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the
shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs such
as sales charges (loads), redemption fees, or exchange fees.
Therefore, the second line of the table is useful in comparing ongoing
costs only.
Expenses Paid
Beginning Ending During Period*
Account Value Account Value December 31, 2011
December 31, 2011 June 30, 2012 to June 30, 2012
----------------- ------------- -----------------
Actual $ 1,000 $ 1,089 $ 4.43
Hypothetical** $ 1,000 $ 1,025 $ 4.29
*Expenses are equal to the Fund's annualized expense ratio of 0.85%,
multiplied by the average account value over the period, multiplied by
182 days/365 days to reflect the one-half year period.
** Hypothetical return assumes 5% return before expenses.
STOCK DIVIDEND FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES (Unaudited)
JUNE 30, 2012
ASSETS
Investment securities, at
fair value(cost $24,666,308) $ 30,518,671
Cash 316.720
Dividends Earned 57,903
Accrued Interest 1
-----------
Total assets 30,893,296
-----------
LABILITIES
Advisory fees payable 21,190
-----------
Total liabilities 21,190
-----------
NET ASSETS -
(Equivalent to $23.74 per
share based on 1,300,565 shares
of common stock issued and outstanding;
100,000,000 shares authorized,
$0.001 par value $ 30,872,106
============
NET ASSETS CONSIST OF:
Common stock $ 1,301
Paid-in capital 27,419,664
Net unrealized appreciation
of investments 6,284,511
Undistributed net investment income 399,311
Undistributed net realized gain on
investments (inc 2008 carryover) (3,232,681)
------------
Net assets $ 30,872,106
============
See accompanying notes to these financial statements.
STOCK DIVIDEND FUND, INC.
SCHEDULE OF INVESTMENTS (Unaudited)
JUNE 30, 2012
DESCRIPTION SHARES MARKET VALUE
----------- ------ -------
COMMON STOCKS ? 98.86%
Metal Mining Services-4.46%
Freeport-McMoran Copper and Gold 40,400 1,376,428
Electric and other Electrical Equipment
and Components-4.56%
General Electric 67,485 1,406,387
Industrial Inorganic Chemicals-4.23%
Olin 62,545 1,306,565
Lumber and Other Building Materials
Dealers-4.29%
Home Depot 25,000 1,324,750
Cigarettes-9.81%
Altria 36,785 1,270,922
Philip Morris Intl 20,141 1,757,504
-------
3,028,426
Chewing and Smoking Tobacco and Snuff-3.31%
Universal Corp 22,030 1,020,650
Railroads, Line-Haul Operating-3.90%
Norfolk Southern 16,756 1,202,578
Petroleum Refining-12.97%
Chevron Corp 14,494 1,529,117
ConocoPhillips 20,639 1,153,307
Valero 40,480 977,592
Phillips 66 10,319 343,003
--------
4,003,019
Refuse Systems-1.79%
Waste Management 16,560 553,104
- Continued -
STOCK DIVIDEND FUND, INC.
SCHEDULE OF INVESTMENTS, continued
(Unaudited)
JUNE 30, 2012
DESCRIPTION SHARES MARKET VALUE
----------- ------ -------
Pharmaceutical Preparations-12.22%
Pfizer 66,606 1,531,938
Merck 22,000 918,500
Eli Lilly 30,777 1,320,641
--------
3,771,079
Semi Conductors and Related Devices-5.16%
Intel Corp 59,732 1,591,858
Telephone Communications, Except
Radiotelephone-9.63%
Verizon 36,783 1,634,637
AT&T 37,562 1,339,461
--------
2,974,098
Groceries, General Line-3.49%
Sysco 36,134 1,077,154
Department Stores-4.60%
Walmart 20,389 1,421,521
Electric Services-3.56%
Excelon 29,200 1,098,504
Drilling, Oil & Gas Wells-3.58%
Diamond Offshore Drilling 18,713 1,106,500
Computer and Office Equipment-3.26%
Hewlett Packard 50,000 1,005,500
National Commercial Banks-4.05%
JPMorgan Chase 35,000 1,250,550
Total common stocks (cost $24,234,160) 30,518,671
--------
- Continued -
STOCK DIVIDEND FUND, INC.
SCHEDULE OF INVESTMENTS, continued
(Unaudited)
JUNE 30, 2012
SHARES FAIR VALUE
SHORT-TERM INVESTMENTS ? 0.01% ------ --------
Schwab Money Market Fund
-current interest at 0.01% 316,720 $ 316,720
--------
Total short-term investments (cost $316,720) 316,720
--------
Total investment securities ? 99.88% (cost $24,550,880) 30,835,391
Other assets less liabilities - 0.12% 36,714
--------
Net assets - 100.00% $ 30,872,106
============
See accompanying notes to these financial statements.
STOCK DIVIDEND FUND, INC.
STATEMENT OF OPERATIONS (Unaudited)
FOR THE SIX MONTHS ENDED JUNE 30, 2012
INVESTMENT INCOME:
Dividends $ 527,051
Interest 77
Accrued Interest 1
------------
Total investment income 527,129
EXPENSES -
Advisory fees 127,817
Misc fees,foreign tax paid 0
--------
127,817
Net investment income 399,312
------------
GAINS ON INVESTMENTS -
Net realized gain on investments 844,946
Net change in unrealized appreciation of securities 1,357,231
------------
Net realized and unrealized gain on investments 2,202,177
------------
Net increase in net assets resulting from operations $ 2,601,489
============
See accompanying notes to these financial statements.
STOCK DIVIDEND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS (Unaudited)
Six Months Ended Year Ended
June 30, 2012 Dec. 31, 2011
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 399,312 $ 845,802
Net realized gain on investments 844,946 678,871
Net change in unrealized appreciation
of securities 1,357,231 740,841
----------- ----------
Net increase(decrease) in net assets
resulting from operations 2,601,489 2,265,514
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income 0 (845,802)
Net realized gains 0 0
----------- ------------
Total Distributions 0 (845,802)
CAPITAL SHARE TRANSACTIONS-NET (1,405,797) (1,732,776)
----------- ------------
TOTAL INCREASE(DECREASE) IN NET ASSETS 1,195,692 (313,064)
NET ASSETS, beginning of period 29,676,414 29,989,478
----------- ------------
NET ASSETS, end of period 30,872,106 $ 29,676,414
=========== ============
See accompanying notes to these financial statements.
STOCK DIVIDEND FUND, INC.
FINANCIAL HIGHLIGHTS (Unaudited)
PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH
PERIOD ENDING:
PERIOD YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/12 2011 2010 2009 2008 2007
----- ------ ------ ------ ------ -------
Net asset value,
beginning of period $21.80 $20.76 $17.94 $15.56 $25.35 $24.87
------ ------- ------ ------ ------ -------
Income from investment
operations:
Net investment income 0.30 0.64 0.47 0.33 0.67 1.49
Net realized and
unrealized gains
(losses)on investments 1.64 1.04 2.84 2.55 (9.79) (0.21)
---- ------ ----- ----- ------ ------
Total income(loss)from
investment operations 1.94 1.68 3.31 2.88 (9.12) 1.28
---- ------ ------ ----- ------ ------
Less distributions from:
Net investment income 0.00 (0.64) (0.49) (0.50) (0.67) (0.79)
Net realized gains 0.00 (0.00) (0.00) (0.00) (0.00) (0.01)
---- ------ ------ ------ ------ ------
Total distributions 0.00 (0.64) (0.49) (0.50) (0.67) (0.80)
---- ------ ------ ------ ------ ------
Net asset value,
end of period $23.74 $21.80 $20.76 $17.94 $15.56 $25.35
------ ------ ------ ------ ------ ------
Total Return 8.90% 8.09% 18.43% 18.51% (35.96)% 5.14%
Net assets, end of
period(in 1000's) $30,872 $29,676 $29,989 $22,863 $12,367 $11,061
Ratio of expenses to
average net
asset(a) 0.85% 0.84% 0.85% 0.81% 0.83% 0.85%
Ratio of net investment
income to average net
assets 2.64% 2.74% 2.69% 3.16% 3.30% 2.88%
Portfolio turnover
rate (annualized) 22.77% 14.94% 14.43% 29.29% 15.19% 28.19%
(a) The Fund's actual expenses are calculated daily at 0.85% of net
asset value (NAV).
See accompanying notes to these financial statements
STOCK DIVIDEND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Stock Dividend Fund, Inc. (the "Fund") was incorporated in the
State of Texas on April 6, 2004 and is registered under the
Investment Company Act of 1940 as a non-diversified, open-end
management investment company. The investment objective of the
Fund is to achieve growth and income by investing primarily in
dividend paying common stocks. The effective date of the Fund's
registration with the SEC was November 29, 2004.
2. SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could
differ from these estimates.
Security Valuation
Securities listed on a national securities exchange or in the over-
the-counter market are valued at the last quoted sales price on the
day of valuation, or if no quoted sales price was reported on that
date, the last quoted bid price. Short-term investments are valued
at cost which approximates fair value. Securities for which
quotations are not readily available are valued at their estimated
fair value as determined in good faith by the Fund's Board of
Directors.
Securities Transactions and Investment Income
Securities transactions are recorded on a trade-date basis.
Dividend income is recorded on the ex-dividend date and interest
income is recorded on the accrual basis. Realized gains and losses
are determined on a specific identification basis of the securities
sold. Unrealized gains and losses resulting from the appreciation
and depreciation of securities carrying values are included in the
statements of operations.
Distribution of Income and Gains
The Fund declares and pays dividends annually from net investment
income and from net realized gains, if any. Distributions from
realized gains for book purposes may include short-term capital
gains, which are included in ordinary income for tax purposes.
Dividends are paid upon Board approval by the end of each calendar year.
STOCK DIVIDEND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Federal Income Taxes
The Fund's policy is to continue to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment
companies and to distribute all of its taxable income, including
any realized gains on investments, to its shareholders. The Fund also intends
to distribute sufficient net investment income and net capital gains,
if any, so
that it will not be subject to excise tax on undistributed income and gains.
Therefore, no federal income tax or excise provision is required.
Net investment income (loss), net realized gains (losses) and the
cost of investments in securities may differ for financial
statement and income tax purposes. The character of distributions
from net investment income (loss) or net realized gains (losses) may
differ from
their ultimate characterization for income tax purposes. At June
30, 2012, there were no material differences. Also, due to the
timing of dividend distributions, the fiscal year in which amounts
are distributed may differ from the year that the income or
realized gains were recorded by the Fund.
Subsequent Events
Subsequent events were evaluated through August 17, 2012, the date in which
these financials were available to be issued.
STOCK DIVIDEND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
3. FAIR VALUE OF INVESTMENTS
In accordance with U.S. generally accepted accounting principles (?GAAP?), fair
value is defined as the price that the Fund would receive to sell an asset or
pay to transfer a liability in an orderly transaction between market
participants at the measurement date. GAAP also establishes a framework for
measuring fair value, and a three-level hierarchy for fair value measurements
based upon the transparency of inputs to the valuation of an asset or
liability.
Inputs may be observable or unobservable and refer broadly to the assumptions
that market participants would use in pricing the asset or liability.
Observable
inputs reflect the assumptions market participants would use in pricing the
asset or liability based on market data obtained from sources independent of the
Fund. Unobservable inputs reflect the Fund's own assumptions about the
assumptions that market participants would use in pricing the asset or liability
developed based on the best information available in the circumstances. Each
investment is assigned a level based upon the observability of the inputs which
are significant to the overall valuation. The three-tier hierarchy of inputs is
summarized below.
Level 1 - quoted prices in active markets for identical investments.
Level 2 - observable inputs other than quoted prices(including quoted prices for
similar investments, interest rates, prepayment speeds, credit risk, etc.)
Level 3 - significant unobservable inputs (including the Fund's own assumptions
in determining the fair value of investments)
The following table summarizes the valuation of the Fund's investments by the
above fair value hierarchy levels as of June 30, 2012:
Investments Other
in Financial
Level Securities Instruments *
----- ---------- -----------
Level 1:
Common Stock $30,581,671 $ 0
Short term investments 316,720 0
----------- ------------
Total Level 1: 30,898,391 0
Level 2 0 0
Level 3 0 0
----------- ------------
Total $30,898,391 $ 0
=========== ============
* Other financial instruments are derivative instruments not reflected
in the Portfolio of Investments, such as futures forwards and swap contracts,
which are valued at the unrealized appreciation / depreciation on the
instrument. As of June 30, 2012, the Fund did not own any other financial
instruments.
STOCK DIVIDEND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
4. CAPITAL SHARE TRANSACTIONS
Capital share transactions in the Fund's $0.001 par value common
stock were as follows:
Year Ended Year Ended
June 30, 2012 December 31, 2011
----------------------- -----------------------
Shares Amount Shares Amount
Shares sold 115,152 $ 2,622,815 214,655 $ 4,647,804
Shares issued in
reinvestment of
dividends 0 0 38,807 841,742
---------- ---------- ---------- -----------
253,462 5,489,546
Shares redeemed (175,771) (4,028,603) (336,819) (7,222,322)
---------- ---------- ---------- -----------
Net increase
(decrease) (60,619) (1,405,798) (83,357) (1,732,776)
Beginning of year 1,361,184 28,826,761 1,444,541 $30,559,537
---------- ---------- ---------- -----------
End of year 1,300,565 27,420,963 1,361,184 $28,826,761
========== ========== ========== ===========
5. INVESTMENT TRANSACTIONS
The aggregate cost of purchases and proceeds from sales of investment
securities, excluding short-term investments, aggregated $3,419,006
and $6,542,557, respectively, for the Period ended June 30, 2012.
The aggregate cost of investment securities, excluding short term investments,
for federal income tax purposes was $24,234,160 as of June 30, 2012. There were
no differences between the financial reporting basis and the income tax basis in
the cost or net unrealized appreciation (depreciation) of the Fund?s investments
as of June 30, 2012.
STOCK DIVIDEND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
As of December 31, 2011 and the Period ended June 30, 2012, the aggregate
unrealized appreciation and depreciation of investment securities was as
follows:
Description June 30, 2012 2011
----------- --------- --------
Unrealized appreciation $ 7,116,198 $ 5,768,478
Unrealized depreciation (831,687) ( 841,198)
---------- ----------
Net unrealized
appreciation $ 6,284,511 $ 4,927,280
============== ============
6. DISTRIBUTION TO SHAREHOLDERS
No distributions have been made as of June 30, 2012
7. ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund and the Advisor are under common control and the existence
of that control may create operating results and financial position
different than if they were autonomous.
The Fund has an investment advisory agreement with Adams Asset Advisors,
LLC (the "Advisor") to provide investment advisory services to the
Fund. Laura S. Adams is a member of the Advisor and is also
an officer, director and shareholder of the Fund. Under the terms
of the agreement, the Fund will pay the Advisor a monthly fee at
the annual rate of 0.85% of the Fund's average daily net assets.
The fee is computed daily and payable monthly. The Advisor has
contractually agreed to pay all operating expenses of the Fund,
except brokerage fees and commissions, interest, taxes and
extraordinary expenses.
The advisory fee for the six months ended June 30, 2012, as computed
pursuant to
the investment advisory agreement, totaled $127,817, of which $21,190 was
payable on June 30, 2012.
The Advisor acts as the transfer agent for the Fund, with Fidelity Investments
as the sub-transfer agent. There are no fees associated with these services.
The Fund acts as it own custodian, effective September 1, 2008, and is in
compliance per requirements of Rule 17f-2. There are no fees associated with
these services.
8. Redemption Fee
To discourage short-term trades by investors and to compensate the Fund for
costs that may be incurred by such trades, the Fund may impose a redemption fee
of 2% of the total redemption amount if shares are held less than 365 days. For
the Period ended June 30, 2012, there were no redemption fees received by the
Fund.
9. ACCOUNTING FOR UNCERTAIN TAX POSITIONS
As of December 31, 2011, open Federal tax years, subject to examination, include
the tax years ended December 31, 2008 through December 31, 2010. The Fund has
no examination in progress.
ADDITIONAL INFORMATION
PROXY VOTING INFORMATION
Stock Dividend Fund, Inc. management is responsible for exercising the
voting rights associated with the securities held by the Fund. A
description of our philosophy on fulfilling this responsibility is
available without charge, upon request, by calling 1-800-704-6072.
QUARTERLY FILING OF PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission (SEC) for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website
athttp://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied
atthe SEC's Public Reference Room in Washington DC. Information on the
operation of the Public Reference Room may be obtained by calling 1-800-SEC-
0330.
APPROVAL OF INVESTMENT ADVISORY AGREEMENT
At an in-person meeting held on January 30, 2012, the Board of Directors,
including a majority of Directors that are not "interested" persons of the
Fund(as the term is defined in the 1940 Act), re-approved the Advisory
Agreement based upon its review of the qualitative and quantitative
information provided by the Investment Advisor. The Directors
considered, among other things, the following information regarding the
Investment Advisor.
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY THE INVESTMENT ADVISOR
The Directors reviewed the nature, quality and scope of current and anticipated
services provided by the Investment Advisor under the Advisory Agreement. This
includes portfolio management, supervision of Fund operations and compliance
and regulatory matters.
INVESTMENT PERFORMANCE
The Directors reviewed the performance of the Fund, as compared to other mutual
funds and market benchmarks. This review focused on the long-term performance
of the Fund.
COST OF SERVICES TO THE FUND AND PROFITABILITY OF ADVISOR
The Directors considered the Fund's management fee and total expense ratio
relative to industry averages. The Directors determined that the Advisor is
operating profitably, is viable and should remain as an ongoing entity.
ECONOMIES OF SCALE
The Directors considered information regarding economies of scale with respect
to the management of the Fund.
CONCLUSIONS
Based on the above review and discussions, the Directors concluded that it
is in the best interest of the Fund and its shareholders to approve the
Advisory Agreement.
Board of Directors Information
Stock Dividend Fund, Inc.
June 30, 2012
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Directors. Information pertaining to the Directors of the Fund
are set forth below. The Fund's Statement of Additional Information includes
additional information about the Fund's Directors, and is available without
charge, by calling 1-800-704-6072. Each director may be contacted by
writing to the director c/o Stock Dividend Fund, Inc, 8150 N. Central
Expressway, Suite M1120, Dallas, Texas, 75206.
INDEPENDENT DIRECTORS
Name and Age Position Term Principal Occupation Other Public
Past five years Directorships
------------------- -------- ---- --------------------- -------------
Vicky L. Hubbard Director 1 Yr Private investor Small Cap
Age 54 since 2000, Tech Co. Value Fund, Inc.
Manager prior
Yolawnde F. Malone Director 1 Yr Tax Mngr-Cain Waters, Small Cap
Age 48 Tolleson Wealth Mgmt Value Fund, Inc.
prior, Self Emp Tax
Consultant prior
Melissa D. Gordon, Director 1 Yr Pathologist, North Small Cap
M.D. Dallas Pathology Value Fund, Inc.
Age 48
INTERESTED DIRECTORS
Laura S. Adams Director, 1 Yr President, Adams Small Cap
Age 51 President Asset Advisors Value Fund, Inc.
Secretary
Treasurer
This report and the financial statements contained herein are submitted for the
general information of shareholders and are not authorized for distribution to
prospective investors unless preceded or accompanied by an effective
prospectus. Nothing herein contained is to be considered an offer of sale or
solicitation of an offer to buy shares of Stock Dividend Fund, Inc. Such
offering is made only by prospectus, which includes details as to offering
price and material information.
Item 2. Code of Ethics. The registrant, as of the end of the period
covered by this report, has adopted a code of ethics that applies to
all officers and employees of the Fund. The registrant has not made
any amendments to its code of ethics or granted any waivers or
exceptions to the code during the covered period.
Item 3. Audit Committee Financial Expert. The entire Board of
Directors, in effect, acts as the audit committee. The Board has two
financial experts serving on the Board. Laura Adams and Yolawnde
Malone are the financial experts. Mrs. Adams is an "interested"
Director and Mrs. Malone is an "independent" Director.
Item 4. Principal Accountant fees and services. As part of the
Registrants contract with the Investment Advisor of the Fund, the
Investment Advisor is responsible for paying all accountant and related
audit fees as part of the Advisory fee paid by the Fund.
Item 5. Audit Committee of listed Registrants. (Not applicable for
semi-annual reports)
Item 6. Schedule of Investments. Schedule of Investments is included
as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of proxy voting policies and procedures for closed-
end management investment companies. (Not applicable)
Item 8. Portfolio Managers of Closed-End Management Investment
Companies. Not Applicable to open-end investment companies.
Item 9. Purchase of equity securities by closed-end management
investment companies. (Not applicable)
Item 10. Submission of Matters to a vote of security holders. (None)
Item 11. Controls and Procedures
a) The Fund's President has concluded that the Fund's disclosure
controls and procedures are sufficient to ensure that information
required to be disclosed by the Fund in this Form N-CSR was
recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and
forms, based upon such officers' evaluation of these controls and
procedures as of a date within 90 days of the filing date of the
report.
b) There were no significant changes or corrective actions with
regard to deficiencies or material weaknesses in the Fund's internal
controls or in other factors that could significantly affect the
Fund's internal controls subsequent to the date of their evaluation.
Item 12. Exhibits.
a) (1)Code of Ethics-Not applicable for semi-annual reports.
(2)Certifications pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002- Attached
b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002- Attached
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.
Stock Dividend Fund
By /s/ Laura S. Adams
--------------------------------------
Laura S. Adams
President
Principal Executive Officer and Principal Financial Officer
Date 8/17/12
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 dates indicated.
Stock Dividend Fund
By /s/ Laura S. Adams
--------------------------------------
Laura S. Adams
President
Principal Executive Officer and Principal Financial Officer
Date 8/17/12