<PAGE>
HOLLAND BALANCED FUND
Annual Report
September 30, 1998
[GRAPHIC]
<PAGE>
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CONTENTS
Letter from the President............................................ 1
Cumulative Performance............................................... 2
Management Discussion of Fund Performance............................ 3
Statement of Net Assets.............................................. 4
Statement of Operations.............................................. 7
Statement of Changes in Net Assets................................... 8
Financial Highlights................................................. 9
Notes to Financial Statements........................................ 10
Report of Independent Accountants.................................... 13
General Information.................................................. 14
<PAGE>
Holland Series Fund, Inc.
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Holland Balanced Fund . LETTER FROM THE PRESIDENT
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October 5, 1998
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Dear Fellow Shareholder: [PHOTO]
I am pleased to report that our Fund has performed as it was expected to during
challenging times. Through September 30, 1998 our Fund achieved a positive
return of 5.3% for the calendar year to date (and a return of 2.4% for the past
12 months). The Fund's total return since its inception (10/2/95) has been
45.4%, which is incidentally a 13.3% annualized return.
Our investment portfolio of approximately 60% top quality "blue chip" stocks,
30% U.S. Treasury notes and bonds, and 10% cash equivalents has produced a more
than satisfactory return to date, with much less volatility than a lot of other
things.
Our capital gains tax experience has also been quite positive, since our
turnover has been predictably minimal, resulting in capital growth rather than
capital distribution to Uncle Sam.
While it appears that a lot of headline-grabbing world events will continue to
ruffle market feathers for a while, I continue to "sleep well" -- as one wag put
it -- with our boring but bountiful long term investment.
With Bullish Regards,
/s/ Michael F. Holland
Michael F. Holland
President and Founder
1
<PAGE>
Holland Series Fund, Inc.
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Holland Balanced Fund . CUMULATIVE PERFORMANCE
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September 30, 1998
- --------------------------------------------------------------------------------
Set forth below is the cumulative total return figure for the period indicated
and a graph showing the hypothetical $10,000 investment made in the Holland
Balanced Fund on October 2, 1995. The cumulative total return figures and the
information in the graph represent past performance; they reflect changes in the
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.
Comparison of Change in Value of $10,000 Investment
in the Holland Balanced Fund and the Lipper Balanced Fund Index
Lipper
Holland Balanced
Balanced Fund
Fund Index
---- -----
10/2/95 10,000 10,000
10/31/95 10,010 10,001
11/30/95 10,340 10,312
12/31/95 10,570 10,474
1/31/96 10,781 10,630
2/29/96 10,781 10,635
3/31/96 10,993 10,675
4/30/96 11,149 10,678
5/31/96 11,401 10,807
6/30/96 11,331 10,843
7/31/96 11,139 10,523
8/31/96 11,302 10,667
9/30/96 11,566 11,040
10/31/96 11,890 11,274
11/30/96 12,411 11,800
12/31/96 12,315 11,653
1/31/97 12,829 12,009
2/28/97 12,818 12,054
3/31/97 12,582 11,703
4/30/97 12,819 12,055
5/31/97 13,149 12,549
6/30/97 13,541 12,923
7/31/97 14,254 13,664
8/31/97 13,767 13,230
9/30/97 14,192 13,758
10/31/97 13,578 13,508
11/30/97 13,849 13,757
12/31/97 13,808 13,958
1/31/98 13,923 14,055
2/28/98 14,499 14,613
3/31/98 14,772 15,037
4/30/98 14,971 15,165
5/31/98 15,002 15,051
6/30/98 15,034 15,324
7/31/98 15,076 15,150
8/31/98 13,902 13,844
9/30/98 14,537 14,442
INVESTMENT PERFORMANCE
(For the Periods Ended September 30, 1998
- -------------------------------------------------------------------------------
Total Return
Cumulative Since Average 12 months
Inception (10/2/95) Annualized Ended
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Holland Balanced Fund(a) 45.37% 13.29% 2.43%
Lipper Balanced Fund Index 44.42% 13.05% 4.97%
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(a) Reflects waiver of fees and reimbursement of expenses by the investment
advisor. Absent such waiver and reimbursement, the Fund's total return would
have been lower.
2
<PAGE>
Holland Series Fund, Inc.
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MANAGEMENT DISCUSSION OF FUND PERFORMANCE
- --------------------------------------------------------------------------------
September 30, 1998
Since inception (October 2, 1995 through September 30, 1998), the Fund
outperformed the Lipper Balanced Fund Index by 1.0% (45.4% vs. 44.4%). The
Fund's performance is attributable to many factors including its long-term
investment strategy of holding 60% of its assets in "blue chip" equities, 30%
in U.S. Treasury fixed income securities and 10% in money market instruments.
The Fund's "blue chip" equity holdings are generally common stocks of companies
with large market capitalizations that are leaders in their respective
industries.
During the second half of the fiscal year the Fund's "blue chip" equities
produced better returns than the broader group of equity holdings of certain
funds included in the Lipper Balanced Fund Index. The Fund has outperformed the
Lipper Balanced Fund Index for the period from its inception through September
30, 1998 largely due to the performance of the Fund's selected "blue chip"
equities during such period.
We made no significant changes in the Fund's holdings during the year,
reflecting our long-term approach to the Fund's investments and our continued
belief that the Fund's current holdings will deliver acceptable future returns
despite market volatility. The Fund's investments are selected based on
potential returns for the long-term rather than on a short-term basis.
3
<PAGE>
Holland Series Fund, Inc.
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Holland Balanced Fund.
STATEMENT OF NET ASSETS
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<TABLE>
<CAPTION>
Shares September 30, 1998 Value+
- -----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS-59.3%
AUTOS-6.9%
26,400 Chrysler Corp. $ 1,263,900
14,400 General Motors Corp. 787,500
-----------
2,051,400
-----------
BANKS-2.9%
10,400 J.P. Morgan & Company, Inc. 880,100
-----------
CHEMICALS-3.2%
17,300 DuPont (E.I.) de Nemours & Company 970,963
-----------
COMPUTERS-7.7%
37,000 Compaq Computer Corp. 1,170,125
8,900 International Business Machines Corp. 1,139,200
-----------
2,309,325
-----------
ELECTRONICS-6.9%
18,800 Hewlett-Packard Co. 995,225
12,700 Intel Corp. 1,089,025
-----------
2,084,250
-----------
FINANCIAL-1.3%
8,500 Merrill Lynch & Company 402,687
-----------
INSURANCE-2.9%
13,800 Chubb Corp. 869,400
-----------
OIL/GAS-9.9%
14,300 Exxon Corp. 1,003,681
18,400 Schlumberger, Ltd. 925,750
16,700 Texaco, Inc. 1,046,881
-----------
2,976,312
-----------
PHARMACEUTICALS-7.7%
14,600 Johnson & Johnson 1,142,450
9,000 Merck & Company, Inc. 1,166,063
-----------
2,308,513
-----------
PRODUCER GOODS-6.7%
12,700 General Electric Co. 1,010,444
13,700 Minnesota Mining & Manufacturing Co. 1,009,519
-----------
2,019,963
-----------
- -----------------------------------------------------------
</TABLE>
See Notes to the Financial Statements
4
<PAGE>
Holland Series Fund, Inc.
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Holland Balanced Fund.
STATEMENT OF NET ASSETS (continued)
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<TABLE>
<CAPTION>
September
Shares 30, 1998 Value+
- -----------------------------------
<C> <S> <C>
COMMON STOCKS--
CONCLUDED
TELECOMMUNICATIONS-
3.2%
16,700 AT&T Corp. $ 975,906
-----------
Total Common Stocks
(Cost-$15,384,318) 17,848,819
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
----------
<C> <S> <C>
U.S. GOVERNMENT SECURITIES-32.0%
$ 500,000 U.S. Treasury Note, 5.500% due 11/15/98 500,625
500,000 U.S. Treasury Note, 6.000% due 8/15/99 505,782
1,000,000 U.S. Treasury Note, 5.625% due 11/30/00 1,025,313
1,000,000 U.S. Treasury Note, 5.625% due 2/28/01 1,028,125
1,000,000 U.S. Treasury Note, 6.375% due 8/15/02 1,070,313
3,500,000 U.S. Treasury Note, 5.875% due 2/15/04 3,755,937
1,500,000 U.S. Treasury Bond, 6.250% due 8/15/23 1,717,500
-----------
Total U.S. Government Securities (Cost-$8,866,885) 9,603,595
-----------
REPURCHASE AGREEMENTS-8.1%
Investors Bank & Trust Co. Repurchase Agreement,
5.010% due 10/1/98 in the amount of $2,419,558;
Issued 9/30/98 (Collaterized by $2,456,411,
FNMA ARM, 7.418% due 5/1/23 with a market value
2,419,221 of $2,540,188) (Cost-$2,419,221) 2,419,221
-----------
Total Investments-99.4% (Cost-$26,670,424) 29,871,635
Other assets in excess of liabilities--0.6% 169,824
-----------
NET ASSETS-100.0%
Applicable to 2,186,449 outstanding $0.01 par
value shares (authorized 1,000,000,000) $30,041,459
===========
Net asset value, offering price and redemption
price per share $ 13.74
===========
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</TABLE>
See Notes to the Financial Statements
5
<PAGE>
Holland Series Fund, Inc.
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Holland Balanced Fund.
STATEMENT OF NET ASSETS (concluded)
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<TABLE>
<CAPTION>
September 30, 1998 Value+
- --------------------------------------------------------------
<S> <C>
COMPONENTS OF NET ASSETS AS OF SEPTEMBER 30, 1998
Capital stock at par value ($0.01) $ 21,864
Capital stock in excess of par value 26,420,952
Undistributed net investment income 217,031
Net accumulated realized gain on investments 180,401
Net unrealized appreciation on investments 3,201,211
-----------
Net Assets $30,041,459
===========
- --------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements
+ See Note 2 to Financial Statements
ARM Adjustable Rate Mortgage
FNMA Federal National Mortgage Association
6
<PAGE>
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund.
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
Year Ended September 30, 1998
<TABLE>
- -----------------------------------------
<S> <C>
INVESTMENT INCOME
Interest $ 692,763
Dividends 326,523
----------
Total investment income 1,019,286
----------
EXPENSES
Investment advisory fees
(Note 3) 215,261
Shareholder account
maintenance 61,361
Administration fees (Note
3) 50,000
Amortization of
organizational costs 33,453
Registration fees 32,808
Legal fees 25,573
Directors fees 24,500
Shareholder reports 23,756
Audit fees 20,000
Insurance expense 13,932
Custodian fees 12,287
Miscellaneous expenses 13,648
----------
Total operating expenses 526,579
Fee Waivers (Note 3) (96,057)
----------
Net expenses 430,522
----------
Net investment income 588,764
----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain on
investments 293,130
Net change in unrealized
appreciation/(depreciation)
on investments (232,961)
----------
Net realized and
unrealized gain on
investments 60,169
----------
Net increase in net
assets resulting from
operations $ 648,933
==========
- -----------------------------------------
</TABLE>
See Notes to the Financial Statements
7
<PAGE>
Holland Series Fund, Inc.
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Holland Balanced Fund.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended
- -------------------------------------------------------------------------------
9/30/98 9/30/97
- -------------------------------------------------------------------------------
<S> <C> <C>
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
Net investment income $ 588,764 $ 364,765
Net realized gain (loss) on investments 293,130 (112,729)
Net change in unrealized appreciation/(depreciation)
on investments (232,961) 2,896,694
----------- -----------
Net increase in net assets resulting from operations 648,933 3,148,730
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income (594,129) (258,314)
Net realized gain on investments -- (447)
----------- -----------
Total dividends and distributions (594,129) (258,761)
----------- -----------
CAPITAL SHARE TRANSACTIONS, NET (NOTE 6) 3,198,799 16,292,039
----------- -----------
Total increase in net assets 3,253,603 19,182,008
NET ASSETS
Beginning of period 26,787,856 7,605,848
----------- -----------
End of period $30,041,459 $26,787,856
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME,
END OF PERIOD $ 217,031 $ 189,295
=========== ===========
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</TABLE>
See Notes to the Financial Statements
8
<PAGE>
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund.
FINANCIAL HIGHLIGHTS
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<TABLE>
<CAPTION>
For the Period from
Year Ended 10/2/95*
For a capital share outstanding throughout the period 9/30/98 9/30/97 to 9/30/96
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of period $ 13.70 $ 11.39 $ 10.00
------- ------- -------
INCREASES FROM INVESTMENT OPERATIONS
Net investment income 0.28 0.26 0.23
Net realized and unrealized gains on
investments 0.05 2.30 1.33
------- ------- -------
Total from investment operations 0.33 2.56 1.56
------- ------- -------
LESS DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income (0.29) (0.25) (0.17)
Net realized gain on investments - (0.00)# -
------- ------- -------
Total dividends and distributions (0.29) (0.25) (0.17)
------- ------- -------
Net asset value, end of period $ 13.74 $ 13.70 $ 11.39
======= ======= =======
TOTAL RETURN(c) 2.43% 22.71% 15.65%(a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) $30,041 $26,788 $ 7,606
Ratio of expenses to average net assets after
fee waivers and reimbursement of other
expenses 1.50% 1.50% 1.50%(b)
Ratio of expenses to average net assets before
fee waivers and reimbursement of other
expenses 1.83% 2.55% 4.81%(b)
Ratio of net investment income to average net
assets after fee waivers and reimbursement of
other expenses 2.05% 2.31% 2.36%(b)
Ratio of net investment income to average net
assets before fee waivers and reimbursement of
other expenses 1.72% 0.31% 0.96%
Portfolio turnover 16.49% 5.07% 5.04%
- --------------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements
(a)Not annualized
(b)Annualized
(c)Total return would have been lower had certain expenses not been waived or
reimbursed.
#Rounds to less than $0.01
*Commencement of Investment Operations
9
<PAGE>
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Holland Series Fund, Inc. (the "Company") was organized as a Maryland
corporation on June 26, 1995 and is registered under the Investment Company Act
of 1940, as amended, as an open-end, management investment company. The Company
currently has one portfolio, the Holland Balanced Fund (the "Fund"). The costs
incurred by the Company in connection with the organization and initial
registration of shares are being amortized on a straight-line basis by the Fund
over a sixty-month period beginning with commencement of its operations. The
unamortized balance of organizational expenses at September 30, 1998 was
$67,605.
Investment Objective
The Fund is designed to provide investors with a convenient and professionally
managed vehicle for seeking a high total investment return. Total investment
return is the aggregate of dividend and interest income and realized and
unrealized capital gains/losses on investments. The Fund seeks to achieve its
objective through a combined portfolio of equity and investment grade fixed-
income securities.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles 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 recorded on a trade date basis. 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 less than sixty days 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.
Income Tax
There is no provision for Federal income or excise tax since the Fund intends
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 all of its taxable income.
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. Debt securities purchased with sixty days
or less remaining to maturity are valued at amortized cost which approximates
fair value.
Expenses
Holland & Company L.L.C. (the "Investment Adviser") has agreed to voluntarily
waive its fee and to reimburse the Fund for expenses exceeding 1.50% of average
10
<PAGE>
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund.
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
daily net assets. During the period ended September 30, 1998, the Investment
Adviser voluntarily waived $92,289 of advisory fees.
Dividends and Distributions to Shareholders
It is the policy of the Fund to declare dividends according to the following
schedule:
<TABLE>
- --------------------------------------------------
<CAPTION>
Dividends from Net Capital Gain
Investment Income Distributions
- --------------------------------------------------
<S> <C>
Quarterly Annually
April, July, October and December December
</TABLE>
Distributions from net short-term capital gains and net long-term capital
gains, if any, are normally declared and paid annually, 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.
Income and capital gain distributions are determined in accordance with federal
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. Permanent book and tax differences
relating to shareholder distributions will result in reclassifications to paid-
in capital and may affect the distributable amount of net investment income per
share. Undistributed net investment income, accumulated net investment loss, or
distributions in excess of net investment income may include temporary book and
tax differences which may reverse in a subsequent period.
During the year ended September 30, 1998, the fund reclassified $33,101 from
paid in capital to undistributed net investment income relating to permanent
book/tax differences attributable to non-deductible organization expenses. Net
assets of the Fund were not affected by this reclassification.
3. INVESTMENT ADVISORY AGREEMENT AND ADMINISTRATION AGREEMENT
The Company's Board of Directors has approved an investment advisory agreement
with the Investment Adviser. For its services as investment adviser, the
Company pays the Investment Adviser a monthly fee at an annual rate of 0.75% of
the Fund's average daily net assets. Currently, the Investment Adviser is
voluntarily waiving a portion of its fee. The Investment Adviser is controlled
by Michael F. Holland, its managing member and owner of 99% interest in the
Investment Advisor.
Pursuant to its Administration Agreement, Investors Capital Services, Inc.
(formerly AMT Capital Services, Inc., the "Administrator"), two employees of
which serve as officers of the Company, earns a fee for providing fund
administration services to the Company. The Company pays the Administrator a
monthly fee at the annual rate of 0.15% of the Fund's average daily net assets
and reimbursement for out-of-pocket expenses pursuant to the Administration
Agreement. Pursuant to the
11
<PAGE>
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund.
NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
Administration Agreement, the Administrator will be paid a minimum fee of
$50,000 for services provided to the Company, unless otherwise waived by the
Administrator. During the period ended September 30, 1998, the Administrator
voluntarily waived $3,768 of administration fees.
4. INVESTMENT TRANSACTIONS
Purchase cost and proceeds from sales of investment securities, other than
short-term investments, for the year ended September 30, 1998 were as follows:
<TABLE>
- ---------------------------------------------------------------------------------
<CAPTION>
Purchases Purchases Sales Sales
U.S. Government Other Securities U.S. Government Other Securities
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
- $7,038,676 $550,000 $3,693,631
</TABLE>
The components of net unrealized appreciation (depreciation) of investments
based on Federal tax cost at September 30, 1998 for the Fund were as follows:
<TABLE>
- --------------------------------------------------------------------------------------
<CAPTION>
Cost for Federal
Appreciation Depreciation Net Appreciation Tax Purposes
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
$3,916,948 $(715,737) $3,201,211 $26,670,424
</TABLE>
5. 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.
6. CAPITAL SHARE TRANSACTIONS
As of September 30, 1998, 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 9/30/98 Year Ended 9/30/97
- --------------------------------------------------------------------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Sold 540,996 $ 7,471,474 1,366,431 $17,319,459
Shares Reinvested 42,207 579,433 20,140 252,436
-------- ----------- --------- -----------
583,203 8,050,907 1,386,571 17,571,895
Shares Redeemed (351,772) (4,852,108) (99,083) (1,279,856)
-------- ----------- --------- -----------
Net Increase 231,431 $ 3,198,799 1,287,488 $16,292,039
======== =========== ========= ===========
</TABLE>
12
<PAGE>
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund.
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors
and Shareholders of the
Holland Balanced Fund
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material aspects, the financial position of
the Holland Balanced Fund (the "Fund") at September 30, 1998, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended and the financial highlights for each
of the periods presented, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 1998 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
October 27, 1998
13
<PAGE>
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
Holland Balanced Fund.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
YEAR 2000 PROCESSING ISSUE
Many computer programs employed throughout the world use two digits rather than
four to identify the year. These programs, if not adapted, may not correctly
handle the change from "99" to "00" on January 1, 2000, and may not be able to
perform necessary functions. The year 2000 issue affects virtually all
companies and organizations.
The Investment Adviser has advised the Fund that it is implementing steps
intended to ensure that its computer systems are capable of Year 2000
processing. In addition, the Fund is inquiring with third parties to assess the
adequacy of their Year 2000 compliance efforts. The Fund intends to develop
contingency plans intended to ensure that third-party noncompliance will not
materially affect the Fund's operations. The Fund does not currently anticipate
that the Year 2000 issue will have an adverse effect on it's ability to
continue its operations.
Companies in which the Fund invests could be adversely affect by the Year 2000
issue, but the Fund cannot predict the consequential effect on its investment
return. To the extent the impact on a portfolio holding is negative, the Fund's
investment return could be adversely affected.
14
<PAGE>
Holland Series Fund, Inc.
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
Michael F. Holland*
Director and President
Chairman,
Holland & Company L.L.C.
Sheldon S. Gordon
Director
Chairman,
Union Bancaire
Privee International, Inc.
Herbert S. Winokur, Jr.
Director
Managing General Partner,
Capricorn Investors, L.P.
Desmond G. FitzGerald
Director
Chairman,
North American Properties Group
Jeff C. Tarr
Director
Chairman,
Junction Advisors
*interested person as defined in the Investment Company Act of 1940
ADVISER
Holland & Company L.L.C.
375 Park Avenue
New York, NY 10152
phone(212) 486-2002
fax(212) 486-0744
FUND ADMINISTRATOR
AND DISTRIBUTOR
Investors Capital Services, Inc.
600 Fifth Avenue
New York, NY 10020
phone(800) 304-6552
CUSTODIAN AND
FUND ACCOUNTING AGENT
Investors Bank & Trust Company
P.O. Box 1537
Boston, MA 02205
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Unified Advisers, Inc.
429 N. Pennsylvania Street
Indianapolis, IN 46204
phone(800) 249-0763
LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
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Holland & Company L.L.C.
375 Park Avenue
New York, New York 10152
Phone 800-891-6181
212-486-2002
Fax 212-486-0744
