<PAGE>
HOLLAND BALANCED FUND
Annual Report
September 30, 1999
[GRAPHIC APPEARS HERE]
<PAGE>
-----------------------------------------
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
Reporting of Independent Accountants.................................. 14
General Information................................................... 15
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund . Letter from the President
--------------------------------------------------------------------------------
September 30, 1999
--------------------------------------------------------------------------------
Dear Fellow Shareholder:
I am pleased to report that our Fund has achieved a return of 13.9% for the past
twelve months ended September 30, 1999. The Fund's aggregate total return since
inception (October 2, 1995 through September 30, 1999) has been 65.5%, versus
63.9% for the Lipper Balanced Fund Index. Our funds annualized return during the
period was 13.4%.
[PHOTO APPEARS HERE]
During this volatile twelve-month time frame, our Fund has produced a
satisfactory return with relatively low volatility.
Additionally, our Fund's portfolio turnover has been predictably modest,
resulting in a favorable capital gains tax distribution experience.
With Bullish Regards,
/s/ Michael F. Holland
Michael F. Holland
President and Founder
1
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund . Cumulative Performance
--------------------------------------------------------------------------------
September 30, 1999
--------------------------------------------------------------------------------
Set forth below are cumulative total return figures for the periods indicated
and a graph showing a hypothetical $10,000 investment made in the Holland
Balanced Fund, Lipper Balanced Fund Index and Composite Index 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.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
-------------------------------------------------------------------------------------------------------
Holland Balanced Fund/(a)/ Lipper Balanced Fund Index Composite Index/*/
<S> <C> <C> <C>
10/2/95 10,000 10,000 10,000
12/95 10,570 10,474 10,587
3/96 10,993 10,675 10,686
6/96 11,331 10,843 10,953
9/96 11,566 11,040 11,184
12/96 12,315 11,653 11,894
3/97 12,582 11,703 11,976
6/97 13,541 12,923 13,476
9/97 14,192 13,758 14,318
12/97 13,807 13,958 14,794
3/98 14,772 15,037 16,215
6/98 15,034 15,324 16,734
9/98 14,537 14,442 15,850
12/98 16,072 16,103 18,001
3/99 16,417 16,363 18,425
6/99 17,148 17,098 19,217
9/99 16,554 16,390 18,304
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
Investment Performance
(For the Periods Ended September 30, 1999)
---------------------------------------------------------------------------------------------------------------
Total Return Average Annualized
Cumulative Since Since Inception 12 months
Inception (10/2/95) (10/2/95) Ended
<S> <C> <C> <C>
Holland Balanced Fund(a) 65.54% 13.44% 13.87%
Lipper Balanced Fund Index 63.90% 13.16% 13.49%
Composite Index * 83.04% 16.33% 13.05%
</TABLE>
* The Composite Index Return is a blended return composed of 60% of the
Standard & Poor's 500 Index, 30% of the Salomon 10 Year Government Bond
Index, and 10% of the 90 Day US Treasury Bill rate of return.
(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.
--------------------------------------------------------------------------------
Management Discussion of Fund Performance
--------------------------------------------------------------------------------
September 30, 1999
Since inception (October 2, 1995 through September 30, 1999), our Fund's total
return has been 65.5% compared to 63.9% for the Lipper Balanced Fund index. The
past year has seen a confluence of low inflation, high economic growth and
excellent corporate profitability which we expect to continue for some time.
This environment has favored our Fund's "blue chip" equity investments. The
positive performance, attributed to our "blue chip" equity holdings during the
past year, more than offset the negative contribution from U.S. Treasury
obligations.
Our Fund's long-term approach is characterized by minimal trading: This has the
effect of minimizing capital gains tax distributions, a growing mutual fund
industry objective. Our Fund's "after-tax" returns will therefore also compare
favorably.
3
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund.
Statement of Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares September 30, 1999 Value+
-----------------------------------------------------------
<C> <S> <C>
Common Stocks-54.0%
Banks-3.1%
12,200 J.P. Morgan & Company, Inc. $ 1,393,850
-----------
Chemicals-2.8%
21,100 DuPont (E.I.) de Nemours & Company 1,284,462
-----------
Computers-4.8%
17,800 International Business Machines Corp. 2,160,475
-----------
Electronics-11.4%
18,800 Hewlett-Packard Co. 1,729,600
25,400 Intel Corp. 1,887,537
34,000 Oracle Corp. (a) 1,547,000
-----------
5,164,137
-----------
Food & Beverages-2.4%
23,000 Coca Cola Company 1,105,438
-----------
Financial-2.7%
18,500 Merrill Lynch & Company 1,242,969
-----------
Insurance-2.6%
23,800 Chubb Corp. 1,185,538
-----------
Oil/Gas-8.4%
14,300 Exxon Corp. 1,085,906
24,500 Schlumberger, Ltd. 1,526,656
18,700 Texaco, Inc. 1,180,438
-----------
3,793,000
-----------
Pharmaceuticals-6.1%
14,600 Johnson & Johnson 1,341,375
21,900 Merck & Company, Inc. 1,419,394
-----------
2,760,769
-----------
Producer Goods-6.8%
12,700 General Electric Co. 1,505,744
16,300 Minnesota Mining & Manufacturing Co. 1,565,818
-----------
3,071,562
-----------
Telecommunications-2.9%
30,850 AT&T Corp. 1,341,975
-----------
Total Common Stocks (Cost-$17,855,764) 24,504,175
-----------
-----------------------------------------------------------
</TABLE>
See Notes to the Financial Statements
4
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund.
Statement of Net Assets (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal September 30, 1999 Value+
-----------------------------------------------------------------------------
<C> <S> <C>
U.S. Government Securities-29.2%
$1,500,000 United States Treasury Bond,
6.250% due 8/15/23 $ 1,475,625
1,000,000 United States Treasury Note,
5.625% due 11/30/00 1,001,563
1,000,000 United States Treasury Note,
5.625% due 2/28/01 1,000,313
1,000,000 United States Treasury Note,
6.375% due 8/15/02 1,016,250
2,500,000 United States Treasury Note,
5.375% due 6/30/03 2,463,283
2,800,000 United States Treasury Note,
5.250% due 8/15/03 2,744,876
3,500,000 United States Treasury Note,
5.875% due 2/15/04 3,514,221
-----------
Total U.S. Government Securities (Cost-$13,204,238) 13,216,131
-----------
Repurchase Agreements-13.7%
State Street Bank & Trust Co. Repurchase Agreement,
4.500% due 10/1/99 in the amount of $6,219,777;
issued 9/30/99 (Collateralized by $6,250,000,
FFCB, 5.20% due 10/20/00 with a market value of
6,219,000 $6,348,331) (Cost-$6,219,000) 6,219,000
-----------
Total Investments-96.9% (Cost-$37,279,002) 43,939,306
Other assets in excess of liabilities--3.1% 1,404,466
-----------
Net Assets-100%
Applicable to 2,969,455 outstanding $0.01 par value shares
(authorized 1,000,000,000) $45,343,772
===========
Net asset value, offering price and redemption price per share $ 15.27
===========
-----------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements
5
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund.
Statement of Net Assets (concluded)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, 1999 Value+
--------------------------------------------------------------
<S> <C>
Components of Net Assets as of September 30, 1999
Capital stock at par value ($0.01) $ 29,695
Capital stock in excess of par value 38,300,708
Undistributed net investment income 190,844
Accumulated net realized gain on investments 162,221
Net unrealized appreciation on investments 6,660,304
-----------
Net Assets $45,343,772
===========
--------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements
+ See Note 2 to the Financial Statements
FFCB Federal Farm Credit Banks
(a) Non-income producing
6
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund.
Statement of Operations
--------------------------------------------------------------------------------
Year Ended September 30, 1999
<TABLE>
-------------------------------------------------------------------
<S> <C>
Investment Income
Interest $ 882,768
Dividends 379,641
----------
Total investment income 1,262,409
----------
Expenses
Investment advisory fees (Note 3) 306,059
Administration and custody fees (Note 4) 76,064
Shareholder account maintenance 70,130
Legal fees 45,669
Amortization of organizational costs 33,545
Registration fees 30,859
Audit fees 27,882
Shareholder reports 27,138
Directors fees 20,869
Insurance expense 14,248
Miscellanous expense 9,788
----------
Total operating expenses 662,251
Waiver of investment advisory fees (Note 3) (51,042)
----------
Net expenses 611,209
----------
Net investment income 651,200
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on investments 162,221
Net change in unrealized appreciation on investments 3,459,093
----------
Net realized and unrealized gain on investments 3,621,314
----------
Net increase in net assets resulting from operations $4,272,514
==========
-------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements
7
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund.
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended
-------------------------------------------------------------------------------
9/30/99 9/30/98
-------------------------------------------------------------------------------
<S> <C> <C>
Net Increase in Net Assets Resulting from Operations
Net investment income $ 651,200 $ 588,764
Net realized gain on investments 162,221 293,130
Net change in unrealized appreciation/(depreciation)
on investments 3,459,093 (232,961)
----------- -----------
Net increase in net assets resulting from operations 4,272,514 648,933
----------- -----------
Dividends and Distributions to Shareholders From
Net investment income (710,954) (594,129)
Net realized gain on investments (180,379) -
----------- -----------
Total dividends and distributions (891,333) (594,129)
----------- -----------
Capital Share Transactions, Net (Note 7) 11,921,132 3,198,799
----------- -----------
Total increase in net assets 15,302,313 3,253,603
Net Assets
Beginning of period 30,041,459 26,787,856
----------- -----------
End of period $45,343,772 $30,041,459
=========== ===========
Undistributed Net Investment Income, end of period $ 190,844 $ 217,031
=========== ===========
-------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements
8
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund.
Financial Highlights
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended Period
For a capital share outstanding 10/2/95*
throughout the period 9/30/99 9/30/98 9/30/97 to 9/30/96
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Data
Net asset value, beginning of period $ 13.74 $ 13.70 $ 11.39 $10.00
------- ------- ------- ------
Increase/Decrease from Investment
Operations
Net investment income 0.23 0.28 0.26 0.23
Net realized and unrealized gain on
investment 1.66 0.05 2.30 1.33
------- ------- ------- ------
Total from investment operations 1.89 0.33 2.56 1.56
------- ------- ------- ------
Less Dividends and Distributions From:
Net investment income (0.28) (0.29) (0.25) (0.17)
Net realized gain on investments (0.08) - (0.00)# -
------- ------- ------- ------
Total dividends and distributions (0.36) (0.29) (0.25) (0.17)
------- ------- ------- ------
Net asset value, end of period $ 15.27 $ 13.74 $ 13.70 $11.39
======= ======= ======= ======
Total Return(c) 13.87% 2.43% 22.71% 15.65%(a)
Ratios/Supplemental Data
Net assets, end of period (000's) $45,344 $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% 1.50%(b)
Ratio of expenses to average net assets
before fee waivers and reimbursement
of other expenses 1.62% 1.83% 2.55% 4.81%(b)
Ratio of net investment income to
average net assets after fee waivers
and reimbursement of other expenses 1.59% 2.05% 2.31% 2.36%(b)
Ratio of net investment income to
average net assets before fee waivers
and reimbursement of other expenses 1.47% 1.72% 0.31% 0.96%(b)
Portfolio turnover 15.76% 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, 1999
--------------------------------------------------------------------------------
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, 1999 was
$34,060.
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 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 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 continues
to qualify as a regulated investment company ("RIC") and intends to comply with
the requirements of Subchapter M of the Internal Revenue Code applicable to
RICs and to distribute substantially all of its taxable income and realized
gains.
Valuation
Securities traded on an exchange are valued at their last sales price on that
exchange. Securities for which over-the-counter market quotations are available
are valued at the latest bid price. 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)
--------------------------------------------------------------------------------
2. Summary of Significant Accounting Policies (continued)
daily net assets. During the year ended September 30, 1999, the Investment
Adviser voluntarily waived $51,042 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.
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 generally
accepted accounting principles. 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 dividends 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 stock.
During the year ended September 30, 1999, the fund reclassified $33,545 from
capital stock in excess of par value 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
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 Adviser.
As of September 30, 1999, Michael F. Holland and affiliates owned 59,650 shares
(2% of the shares outstanding) of the Fund.
11
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund.
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
4. Accounting, Custody and Administration Agreements
Pursuant to its Administration Agreement effective June 1, 1999, State Street
Bank and Trust Company ("State Street") 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 will be paid a minimum fee of $5,000 per month for
the first year of services are provided to the Company, and a minimum fee of
$7,000 per month thereafter 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.
Prior to June 1, 1999, Investors Capital Services, Inc. ("ICS"), served as
Administrator for the Company. Certain employees of ICS were officers of the
Company. The Company paid ICS 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,
subject to a minimum fee of $50,000, unless otherwise waived by ICS. In
addition Investors Bank and Trust Company ("IBT"), an affiliate of ICS, served
as the Fund's custodian and accounting agent. During the year ended September
30, 1999, administration fees include $38,046 paid to ICS as Administrator
through May 31, 1999 and administration and custody fees include $9,510 paid to
IBT as custodian and accounting agent.
5. Investment Transactions
Purchases and sales of investment securities, other than short-term
investments, for the year ended September 30, 1999 aggregated $12,159,937 and
$5,537,321 respectively.
The components of net unrealized appreciation/(depreciation) of investments
based on Federal tax cost at September 30, 1999 for the Fund were as follows:
<TABLE>
-------------------------------------------------------------------------------------
<CAPTION>
Cost for Federal
Appreciation Depreciation Net Appreciation Tax Purposes
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
$7,099,390 $(439,086) $6,660,304 $37,279,002
</TABLE>
6. 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
12
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund.
Notes to Financial Statements (concluded)
--------------------------------------------------------------------------------
6. Repurchase Agreements (continued)
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.
7. Capital Share Transactions
As of September 30, 1999, 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 9/30/99 Year Ended 9/30/98
-----------------------------------------------------------------
Shares Amount Shares Amount
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Sold 1,162,789 $17,656,300 540,996 $ 7,471,474
Shares Reinvested 55,096 830,190 42,207 579,433
--------- ----------- -------- -----------
1,217,885 18,486,490 583,203 8,050,907
Shares Redeemed (434,879) (6,565,358) (351,772) (4,852,108)
--------- ----------- -------- -----------
Net Increase 783,006 $11,921,132 231,431 $ 3,198,799
========= =========== ======== ===========
</TABLE>
13
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund.
Report of Independent Accountants
--------------------------------------------------------------------------------
To the Board of Directors
and Shareholders of
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
Holland Balanced Fund (the "Fund") at September 30, 1999, 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
principals. 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, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
New York, New York
November 2, 1999
14
<PAGE>
Holland Series Fund, Inc.
--------------------------------------------------------------------------------
Holland Balanced Fund.
General Information (Unaudited)
--------------------------------------------------------------------------------
Year 2000
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 has implemented steps
intended to ensure that its computer systems are capable of Year 2000
processing. In addition, the Fund has inquired with third parties to assess the
adequacy of their Year 2000 compliance efforts. The Fund and its service
providers are in the process of developing 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 its ability to continue its operations.
The Year 2000 issue could adversely affect companies in which the Fund invests,
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.
Tax Information
The following tax information represents year-end disclosures of various
benefits passed through to shareholders.
The amount of long-term capital gain paid was $180,401.
Of the distributions made by the Fund, 49.07% represents the amount of
distributions which qualifies for the dividends received deduction available to
corporate shareholders.
The above figures may differ from those cited elsewhere in this report due to
differences in the calculations of income and capital gains for Securities and
Exchange Commission (book) purposes and Internal Revenue Service (tax)
purposes.
15
<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 Holdings, Inc.
Herbert S. Winokur, Jr.
Director
Managing General Partner,
Capricorn Holdings, Inc.
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
[email protected]
websitewww.thehollandfund.com
Fund Administrator, Custodian and Fund Accounting Agent
State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02110
Distributor
ALPS Mutual Fund Services
370 17th Street, Suite 3100
Denver, CO 80202
Transfer Agent and
Dividend Disbursing Agent
Unified Fund Advisers, Inc.
429 N. Pennsylvania Street
Indianapolis, IN 46204
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
<PAGE>
-----------------------------------
Holland & Company L.L.C.
375 Park Avenue
New York, New York 10152
Phone 800-891-6181
212-486-2002
Fax 212-486-0744
Email [email protected]
Website www.thehollandfund.com
