N-CSR
1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-4788
VLC TRUST
(Exact name of registrant as specified in charter)
ONE REGENCY PLAZA, PROVIDENCE, RHODE ISLAND 02903
(Address of principal executive offices)
MARGARET D. FARRELL, ESQ.
SECRETARY
HINCKLEY, ALLEN & SNYDER LLP
1500 FLEET CENTER
PROVIDENCE, RHODE ISLAND 02903
(Name and address of agent for service)
Registrant's telephone number, including area code: (401) 421-1411
Date of fiscal year end: October 31
Date of reporting period: April 30, 2003
Form N-CSR is to be used by management investment companies to file
reports with the Commission not later than 10 days after the transmission
to stockholders of any report that is required to be transmitted to
stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17
CFR 270.30e-1). The Commission may use the information provided on Form N-
CSR in its regulatory, disclosure review, inspection, and policymaking
roles.
A registrant is required to disclose the information specified by
Form N-CSR, and the Commission will make this information public. A
registrant is not required to respond to the collection of information
contained in Form N-CSR unless the Form displays a currently valid Office
of Management and Budget ("OMB") control number. Please direct comments
concerning the accuracy of the information collection burden estimate and
any suggestions for reducing the burden to Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The
OMB has reviewed this collection of information under the clearance
requirements of 44 U.S.C. Section 3507.
- -----------------------------------------------------------------------
TABLE OF CONTENTS APRIL 30, 2003
Item 1 1
Report of the President 1
Investment Performance Review 2
Statement of Assets and Liabilities 3
Statement of Operations 4
Statement of Changes 5
Financial Highlights 6
Notes to Financial Statements 7
Portfolio of Investments 10
Trustees and Officers 14
Items 2 - 10 21
ITEM 1
The following is a copy of the report transmitted to shareholders
pursuant to Rule 30e-1 under the Investment Company Act of 1940 (17 CFR
270.30e-1)
OCEAN STATE TAX EXEMPT FUND
REPORT OF THE PRESIDENT
April 30, 2003
Over the past six months it appears the economy has started to slowly
regain it's footing back on the road to recovery. The Federal Reserve has
continued to maintain an expansionary policy by reducing rates in support
of both our fragile economy and the stock market. As a result, yields on
treasuries are bouncing at four decade lows. Fixed income investments like
the Ocean State Tax Exempt Fund ("the Fund") have benefited in this
environment. When will this bond market rally end? Nobody knows for sure
but it appears that although the bulk of the rate decline is over, real
pressure for rising rates will not come until the economy turns much
stronger, perhaps early next year.
During these six months ended April 30, 2003 the Fund's net asset
value rose from $10.54 to $10.58. The Fund's dividend distribution slipped
to $0.22 per share in tax-free income for Rhode Island residents reflective
of the decline in market interest rates. Ocean State continues to be
managed with conservative Rhode Island investors in mind, those investors
who want to reduce their tax burden while receiving steady income. The
Fund's stated objective remains to provide as high a level of current
income, exempt from Rhode Island and Federal taxes, as is consistent with
preservation of principal.
Ocean State's investment portfolio has been structured with an
intermediate maturity of 11.7 years. Management strives to balance the
interest rate risk of extending the Fund's average maturity with the
increased yield that may result from longer-term investments. However,
longer-term investments can also result in greater volatility and, thus,
wider swings in investment value in a fluctuating interest rate
environment.
The Fund's investment portfolio is 71.50% Aaa/AAA (rated by either
Moody's or S&P). A rating of Aaa/AAA indicates that an issue has bond
insurance, a credit enhancement which reduces the potential loss due to
issuer default. Historically the default rates among municipal bonds have
been quite low. The greatest risk bond investors face is interest rate risk
or the loss of principal value from rising rates.
At Ocean State we strive to limit both default and interest rate risk
through investing in high quality investments and structuring maturities to
maximize return while minimizing risk. Often, the portfolio manager selects
municipal bonds that are not Aaa/AAA rated as they may offer a higher
comparable yield, potential return and a stable credit.
Going forward nobody knows for certain how fixed-income investments
will perform. However, management of the Ocean State Tax Exempt Fund
continually adjusts the portfolio in response to ever changing market
conditions. The goal of your fund's management is an investment that will
produce results in any environment.
Very truly yours,
/s/ Alfred B. Van Liew
Alfred B. Van Liew
President and Chairman of the
Board of Trustees
1
OCEAN STATE TAX EXEMPT FUND
INVESTMENT PERFORMANCE REVIEW
as of April 30, 2003
(unaudited)
Prior
November 1, 2002 Fiscal Year May 1, 1998 May 1, 1993
through Ended through through
April 30, 2003 October 31, 2002 April 30, 2003 April 30, 2003
---------------- ---------------- -------------- --------------
<s> <c> <c> <c> <c>
Total Rate of Return (b)
Based on:
Net Asset Value 1.36% 4.21% 4.81% 5.54%
Offering Price (0.70)% 0.04% 3.94% 5.11%
As of As of
April 30, 2003 October 31, 2002
-------------- ----------------
<s> <c> <c>
30-day Current Yield
Based on:
Net Asset Value 3.95% 3.87%
Offering Price 3.79% 3.72%
30-day Tax-Equivalent Yield (a)
Based on:
Net Asset Value 7.14% 7.01%
Offering Price 6.85% 6.72%
The Ocean State Tax Exempt Fund has placed a high priority on capital
preservation while at the same time striving for competitive after-tax
investment returns. The Fund has maintained the weighted average maturity
of the portfolio at 11.7 years as of April 30, 2003.
The average quality rating of the investments, in the following table
was Aaa/AAA (Moody's and Standard & Poor's bond rating services).
Portfolio Quality Analysis
% of Total Portfolio
--------------------
as of as of
Rating 4/30/03 10/31/02
------ ------- --------
<s> <c> <c>
Aaa/AAA 71.50% 72.43%
Aa/AA 24.97% 23.09%
A 2.66% 3.68%
Baa/BBB 0.87% 0.80%
Not Rated 0% 0%
The Fund will continue its policy of seeking the highest tax
advantaged yields available, consistent with maintaining quality and
diversification objectives.
(a) For 2003, shareholders subject to a maximum Federal tax rate of
38.60% and a Rhode Island tax rate of 25.00%.
(b) Past performance is no guarantee of future results. Total return does
not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of Fund shares.
2
OCEAN STATE TAX EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES
as of April 30, 2003
(unaudited)
ASSETS
<s> <c>
Investments at value (identified cost $31,605,953) (Note 1A) $33,575,538
Cash 537,956
Interest receivable 407,681
Prepaid expense 11,775
-----------
Total Assets $34,532,950
LIABILITIES
Distribution payable to shareholders $ 50,808
Payable for securities purchased 199,162
Accrued management fees 16,788
-----------
Total Liabilities 266,758
-----------
Net Assets $34,266,192
===========
Net Assets consist of:
Shares of beneficial interest at par ($.01/share) $ 32,386
Additional paid-in capital 32,171,132
Accumulated net realized gain on investment transactions 93,089
Net unrealized appreciation of investments 1,969,585
-----------
Total-Representing Net Assets at Value for 3,238,597 Shares Outstanding $34,266,192
===========
Computation of Net Asset Value & Offering Price:
Net Assets $34,266,192
Divided by number of shares outstanding 3,238,597
Net asset value $ 10.58
===========
Offering price $ 11.02
===========
See Notes to Financial Statements.
3
OCEAN STATE TAX EXEMPT FUND
STATEMENT OF OPERATIONS
For the period ended April 30, 2003
(unaudited)
<s> <c> <c>
Investment Income
Interest income (Note 1B) $869,879
Expenses:
Adviser fees (Note 2) 60,232
Administrator fees (Note 2) 43,023
Transfer agent fees 12,825
Auditing fees 9,453
Legal fees and expenses 13,125
Trustees fees and expenses 11,500
Distribution expenses (Note 5) 6,000
Custody 7,737
Shareholder reports 4,114
Pricing fees 1,567
Miscellaneous expenses 1,295
Insurance 689
Registration fees 475
-------
172,035
--------
Net Investment Income $697,844
Realized and Unrealized Gain/(Loss) on Investments
Net Realized Gain on Investments 95,212
Net Change in Unrealized Appreciation of Investments 152,531
-------
Net Realized and Unrealized Gain on Investments 247,743
--------
Net Increase in Net Assets Resulting from Operations $945,587
========
See Notes to Financial Statements.
4
OCEAN STATE TAX EXEMPT FUND
STATEMENTS OF CHANGES IN NET ASSETS
Six-Month Period Fiscal Year
Ended Ended
April 30, 2003 October 31, 2002
---------------- ----------------
(unaudited)
<s> <c> <c>
Increase (Decrease) in Net Assets Resulting from:
Operations:
Net investment income $ 697,844 $ 1,532,639
Net realized gain on investments 95,212 106,579
Change in unrealized appreciation/(depreciation) of
investments 152,531 (145,641)
----------- -----------
Net increase in net assets resulting from operations 945,587 1,493,577
Dividends and distributions to shareholders from:
Net investment income ($.22 per share in 2003 and $.45 per
share in 2002) (697,843) (1,532,647)
Capital gain ($.03 per share in 2003) (105,799) 0
Net decrease from fund share transactions (Note 4) (1,964,411) (175,574)
----------- -----------
Total decrease in net assets (1,822,466) (214,644)
NET ASSETS:
Beginning of period 36,088,658 36,303,302
----------- -----------
End of period $34,266,192 $36,088,658
=========== ===========
See Notes to Financial Statements.
5
OCEAN STATE TAX EXEMPT FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period.
The following data includes selected data and other performance
information derived from the financial statements.
Fiscal Fiscal Fiscal Fiscal
Six Months Year Year Year Year
Ended Ended Ended Ended Ended
4/30/03 10/31/02 10/31/01 10/31/00 10/31/99
---------- -------- -------- -------- --------
(unaudited)
<s> <c> <c> <c> <c> <c>
Per Share Operating Performance:
Net Asset Value, Beginning of Year $ 10.54 $ 10.55 $ 10.25 $ 10.12 $ 10.71
Net investment income .22 .45 .47 .49 .53
Net realized and unrealized gain (loss) on
securities .07 (.01) .30 .13 (.58)
------- ------- ------- ------- -------
Total from Investment Operations .29 .44 .77 .62 (.05)
------- ------- ------- ------- -------
Less Distributions:
Dividends from net investment income (.22) (.45) (.47) (.49) (.53)
Distribution from net realized gains (.03) (.00) (.00) (.00) (.01)
------- ------- ------- ------- -------
Total Distributions (.25) (.45) (.47) (.49) (.54)
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 10.58 $ 10.54 $ 10.55 $ 10.25 $ 10.12
======= ======= ======= ======= =======
Total investment return at Net Asset
Value (a) 1.36% 4.21% 7.63% 6.22% (.66)%
Ratios and Supplemental Data:
Net Assets, End of Year (000's omitted) $34,266 $36,089 $36,303 $37,526 $39,954
Ratio of expenses to average net assets 0.50% 1.04% 1.19% 1.12% .94%
Ratio of net investment income to average
net assets 2.01% 4.25% 4.52% 4.76% 4.91%
Portfolio turnover 7.00% 17.00% 4.00% 5.00% 13.00%
Fund expenses per share .05 .11 .13 .12 .10
Net investment income per share .22 .45 .47 .49 .53
<FN>
(a) Total investment return does not reflect sales load.
</FN>
See Notes to Financial Statements.
6
OCEAN STATE TAX EXEMPT FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 2003
(unaudited)
NOTE 1 Significant Accounting Policies
VLC Trust (the Trust) is a Massachusetts business trust organized on
August 1, 1986 and registered under the Investment Company Act of 1940, as
amended, as a non diversified, open-end management investment company. The
Declaration of Trust permits the Trustees to create additional portfolios
(funds). As of April 30, 2003 there is only one fund, Ocean State Tax
Exempt Fund (the Fund). The objective of the Fund is to seek to provide as
high a level of current income, exempt from Rhode Island and Federal income
taxes, as is consistent with preservation of capital. The Fund invests
primarily in obligations which pay interest exempt from Rhode Island and
Federal income taxes. The Fund commenced operations on December 8, 1986.
At April 30, 2003, 94.68% of the Fund's net assets are invested in
Rhode Island municipal securities. Economic changes effecting the state in
certain of its public bodies and municipalities may affect the ability of
the issuer to pay the required principal and interest payments of the
municipal securities. In order to reduce risk associated with such factors
on April 30, 2003, 76.13% of the portfolio of investments have credit
enhancements backing them which the Fund relies on, such as: letters of
credit, insurance, or guarantees. MBIA provides the largest total
enhancements for the Fund, representing 22.39% of the portfolio.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
A) Security Valuation: Debt securities are valued on the basis of
valuations furnished by a pricing service since such valuations are
believed to reflect the fair value of such securities. Valuations used by
the Fund may be determined without exclusive reliance on quoted prices and
take into account appropriate factors such as institutional-size trading in
similar groups of securities, yield, quality, coupon rate, maturity, type
of issue and other local market conditions. Securities having an original
maturity of less than sixty days are valued at cost adjusted for
amortization of premiums and accretion of discounts. Other securities are
appraised in good faith at fair value using methods determined by the
Trustees and applied on a consistent basis. The Trustees monitor the
valuation of the Fund's municipal bonds through receipt of periodic reports
from the Adviser.
B) Security Transactions and Related Investment Income: Security
transactions are accounted for on a trade date basis (date the order to buy
or sell is executed). Interest income is recorded on the accrual basis. The
specific identification method is used for determining net realized gains
and losses for both financial statement and Federal income tax purposes.
7
OCEAN STATE TAX EXEMPT FUND
NOTES TO FINANCIAL STATEMENTS-(Continued)
(unaudited)
C) Federal Income Taxes: The Fund's policy is to comply with the
provisions of subchapter M of the Internal Revenue Code available to
regulated investment companies and distribute to shareholders all of its
net income, including any net realized gain on investments. Accordingly, no
provision for Federal income tax or excise tax is necessary. Dividends paid
by the Fund from net interest on tax-exempt municipal bonds are not
includable by shareholders as gross income for Federal income tax purposes,
because the Fund intends to meet certain requirements of the Internal
Revenue Code applicable to regulated investment companies which will enable
the Fund to pay tax-exempt interest dividends. The portion of such
interest, if any, earned on private activity bonds issued after August 7,
1986 may be considered a tax preference item to shareholders.
D) Distributions to Shareholders: Dividends from net investment
income are declared daily and distributed monthly. Capital gains
distributions, if any, are declared and distributed annually. For the
period ended April 30, 2003, the Fund paid $105,799 in capital gains. 100%
of the income dividends paid by the Fund are exempt from Federal and Rhode
Island income taxes.
NOTE 2 Advisory and Administrative Services and Other Affiliated
Transactions
Van Liew Capital Inc. is the Adviser and the Administrator to the
Fund. The Fund pays Van Liew Capital Inc. at the following annual rates for
the adviser and administrator services, respectively:
.35 and .25 of 1% of the first $200 million of average daily
net assets.
.30 and .20 of 1% of average daily net assets over $200
million.
The Fund does not pay fees to Trustees affiliated with the Adviser or
to any of its officers. The Fund pays Trustees who are not interested
persons of the Fund an annual retainer plus $250 per meeting attended. The
annual retainer at April 30, 2003 was $2,000.
Legal fees and expenses of $13,125 were paid to a firm of which the
Fund's Secretary is a partner.
During the period November 1, 2002 through April 30, 2003, the
Distributor received $3,931 in commissions as a result of Fund share sales.
NOTE 3 Investment Transactions
During the period ended April 30, 2003 purchases and sales of
investment securities, other than short-term investments, aggregated
$2,614,090 and $4,997,736, respectively. The aggregate cost of investments
for Federal income tax purposes is substantially the same as the aggregate
cost for financial statement purposes. At April 30, 2003, gross unrealized
appreciation on investment securities was $1,997,541 and gross unrealized
depreciation on investment securities was $27,956.
8
OCEAN STATE TAX EXEMPT FUND
NOTES TO FINANCIAL STATEMENTS-(Continued)
(unaudited)
NOTE 4 Shares of Beneficial Interest
The authorized capital of the Fund consists of unlimited number of
shares of beneficial interest with par value of one cent per share.
Transactions in shares of beneficial interest and in dollars were as
follows:
Shares Amount
------ ------
<s> <c> <c>
Balance at 10/31/01 3,441,769 $34,378,038
Shares sold 266,726 2,789,854
Shares issued in reinvestment of dividends 90,689 949,525
Shares redeemed (373,670) (3,914,953)
--------- -----------
Net decrease (16,255) (175,574)
--------- -----------
Balance at 10/31/02 3,425,514 $34,202,464
========= ===========
Shares sold 63,121 $ 665,753
Shares issued in reinvestment of dividends 46,377 488,575
Shares redeemed (296,415) (3,118,739)
--------- -----------
Net decrease (186,917) (1,964,411)
--------- -----------
Balance at 4/30/03 3,238,597 $32,238,053
========= ===========
NOTE 5 Distribution Plan
The Fund has adopted a Distribution Plan (the Plan) pursuant to Rule
12b-1 (the Rule) of the Investment Company Act of 1940 (the Act). The Rule
provides in substance that the Fund may not engage directly or indirectly
in financing any activity which is primarily intended to result in the sale
of its shares except pursuant to a plan adopted under the Rule. Under the
Plan, the Fund is authorized to pay for the printing of all prospectuses,
statements of additional information and reports and notices to
shareholders, even those which are not sent to existing shareholders. The
Fund paid $6,000 under the Plan during fiscal 2003.
9
OCEAN STATE TAX EXEMPT FUND
PORTFOLIO OF INVESTMENTS
as of April 30, 2003
(unaudited)
Ratings
Principal Moody's/ Value
Amount Standard & Poor's (b) (Note 1)
--------- --------------------- --------
<s> <c> <c>
MUNICIPAL SECURITIES (97.98%) (a)
Rhode Island General Obligation and Revenue (59.57%) (a)
$ 500,000 Barrington School District 5.00%, 10/1/14 Aa-2/NR $ 545,625
200,000 Burrillville General Obligation FGIC Insured 5.70%, 5/1/11 Aaa/AAA 219,000
300,000 East Providence General Obligation MBIA Insured
5.70%, 5/15/10 Aaa/AAA 328,875
250,000 Kent County Water Auth. MBIA Insured 6.35%, 7/15/14 Aaa/AAA 269,063
355,000 Lincoln General Obligation MBIA Insured 5.50%, 8/15/10 Aaa/AAA 363,055
300,000 Lincoln General Obligation FGIC Insured 5.60%, 8/1/12 Aaa/NR 330,750
225,000 Middletown General Oblgation 4.00%, 7/15/12 Aa-3/NR 235,406
210,000 Newport General Obligation MBIA Insured 6.50%, 8/15/06 Aaa/AAA 213,144
75,000 North Kingstown General Obligation 6.70%, 12/15/05 Aa-3/NR 84,750
80,000 North Kingstown General Obligation 6.80%, 12/15/06 Aa-3/NR 93,800
200,000 North Kingstown General Obligation FGIC Insured
5.70%, 10/1/18 Aaa/AAA 221,250
120,000 North Providence General Obligation MBIA Insured
6.00%, 10/1/09 Aaa/AAA 122,820
250,000 North Smithfield General Obligation FGIC Insured
4.00%, 10/15/12 Aaa/NR 259,063
500,000 Pawtucket General Obligation AMBAC Insured
5.00%, 4/15/09 Aaa/NR 556,875
500,000 Pawtucket General Obligation CGIC Insured 6.00%, 3/15/15 Aaa/AAA 546,875
500,000 Pawtucket General Obligation CGIC Insured 6.00%, 3/15/11 Aaa/AAA 546,875
500,000 Pawtucket General Obligation CGIC Insured 6.00%, 3/15/13 Aaa/AAA 546,875
500,000 Pawtucket General Obligation CGIC Insured 6.00%, 3/15/12 Aaa/AAA 546,875
200,000 Providence Public Bldg. Auth. FSA Insured 5.10%, 12/15/08 Aaa/AAA 224,500
150,000 Providence Public Bldg. Auth. MBIA Insured
5.50%, 12/15/13 Aaa/AAA 168,375
500,000 Providence Public Bldg. Auth. AMBAC Insured
5.125%, 12/15/14 Aaa/AAA 545,000
185,000 Providence Public Bldg. Auth. FSA Insured 5.00%, 12/15/18 Aaa/AAA 194,713
250,000 Providence Public Bldg. Auth. AMBAC Insured
5.25%, 12/15/15 Aaa/AAA 273,750
250,000 Providence Public Bldg. Auth. FSA Insured 5.50%, 12/15/10 Aaa/AAA 288,438
500,000 Providence Redevelopment Auth. AMBAC Insured
5.30%, 4/1/12 Aaa/NR 556,250
200,000 Providence Redevelopment Radian Insured 4.25%, 9/1/13 NR/AA 202,750
100,000 South Kingston General Obligation AMBAC Insured
5.00%, 11/15/08 Aaa/AAA 102,250
700,000 Warwick General Obligation MBIA Insured 6.60%, 11/15/06 Aaa/AAA 716,926
250,000 Warwick General Obligation FSA Insured 4.00%, 7/15/11 Aaa/AAA 261,250
250,000 Warwick General Obligation FSA Insured 4.125%, 7/15/13 Aaa/AAA 259,688
10
OCEAN STATE TAX EXEMPT FUND
PORTFOLIO OF INVESTMENTS-(Continued)
(unaudited)
Ratings
Principal Moody's/ Value
Amount Standard & Poor's (b) (Note 1)
--------- --------------------- --------
<s> <c> <c>
MUNICIPAL SECURITIES (a)-(Continued)
Rhode Island General Obligation and Revenue (59.57%) (a)
$ 35,000 Westerly Dunn's Corner Fire District Unlimited Tax
Assessment 7.80%, 6/1/03 A-1/NR $ 35,166
35,000 Westerly Dunn's Corner Fire District Unlimited Tax
Assessment 7.85%, 6/1/04 A-1/NR 37,056
145,000 Rhode Island Clean Water Pre-refunded U.S. T MBIA Insured
6.50%, 10/1/06 Aaa/AAA 149,465
150,000 Rhode Island Clean Water MBIA Insured 5.30%, 10/1/07 Aaa/AAA 169,875
100,000 Rhode Island Clean Water AMBAC Insured 4.75%, 10/1/18 Aaa/AAA 103,125
650,000 Rhode Island Depositors Economic Protection Corp.
MBIA Insured Escrowed to Maturity 6.55%, 8/1/10 Aaa/AAA 788,731
215,000 Rhode Island Depositors Economic Protection Corp.
CAPMAC Guaranteed Escrowed to Maturity 6.375%, 8/1/22 Aaa/AAA 271,437
250,000 Rhode Island Depositors Economic Protection Corp.
Escrowed to Maturity 5.75%, 8/1/21 Baa-1/NR 293,125
500,000 Rhode Island Economic Development Corp. Airport Revenue
FSA Insured 5.25%, 7/1/12 Aaa/AAA 543,750
395,000 Rhode Island Economic Development Corp. Airport Revenue
FSA Insured 5.25%, 7/1/13 Aaa/AAA 427,587
545,000 Rhode Island Economic Development Corp. Airport Revenue
FSA Insured 5.25%, 7/1/14 Aaa/AAA 587,237
450,000 Rhode Island Economic Development Corp. Airport Revenue
FSA Insured 5.00%, 7/1/18 Aaa/AAA 471,937
400,000 Rhode Island Economic Development Corp. Providence Place
Radian Insured 6.125%, 7/1/20 NR/AA 451,500
100,000 RI COPS MBIA Insured 5.375%, 10/1/16 Aaa/AAA 110,875
300,000 Rhode Island Lease Participation Certificate Shepard Bldg.
AMBAC Insured 5.125%, 6/1/12 Aaa/AAA 331,500
500,000 Rhode Island Turnpike Authority 5.35%, 12/1/17 NR/A 511,520
125,000 Rhode Island Public Building Auth. AMBAC Insured
5.20%, 2/1/06 Aaa/AAA 127,812
150,000 Rhode Island Public Building Auth. AMBAC Insured
5.25%, 2/1/10 Aaa/AAA 153,375
150,000 Rhode Island Port Auth. Pre-refunded U.S. T AMBAC Insured
6.50%, 6/1/08 Aaa/AAA 161,813
500,000 Rhode Island Refunding Bond Authority AMBAC Insured
5.25%, 2/1/10 Aaa/AAA 555,625
750,000 Rhode Island General Obligation MBIA Insured 5.00%, 9/1/18 Aaa/AAA 801,562
300,000 Rhode Island General Obligation FGIC Insured
5.125%, 7/15/14 Aaa/AAA 324,750
480,000 Rhode Island General Obligation FGIC Insured 5.00%, 9/1/14 Aaa/AAA 520,800
11
OCEAN STATE TAX EXEMPT FUND
PORTFOLIO OF INVESTMENTS-(Continued)
(unaudited)
Ratings
Principal Moody's/ Value
Amount Standard & Poor's (b) (Note 1)
--------- --------------------- --------
<s> <c> <c>
MUNICIPAL SECURITIES (a)-(Continued)
Rhode Island General Obligation and Revenue (59.57%) (a)
$ 500,000 Rhode Island General Obligation MBIA Insured 5.75%, 8/1/15 Aaa/AAA $ 569,375
1,000,000 Rhode Island General Obligation FGIC Insured 5.50%, 9/1/16 Aaa/AAA 1,107,500
400,000 Rhode Island Cons. Cap. Dev. FGIC Insured 5.40%, 9/1/14 Aaa/AAA 444,500
250,000 Rhode Island Cons. Cap. Dev. FGIC Insured 5.00%, 9/1/16 Aaa/AAA 267,813
250,000 Rhode Island Cons. Cap. Dev. FGIC Insured 5.00%, 9/1/15 Aaa/AAA 268,750
Total Rhode Island General Obligation and Revenue $20,412,427
Rhode Island Health & Education Building Corporation (24.76%) (a)
$ 100,000 University of Rhode Island AMBAC Insured 5.20%, 9/15/15 Aaa/AAA $ 108,500
300,000 University of Rhode Island AMBAC Insured 5.20%, 9/15/16 Aaa/AAA 324,375
100,000 Bryant College AMBAC Insured 4.60%, 6/1/12 Aaa/AAA 108,125
100,000 Brown University 4.75%, 9/1/12 Aa-1/AA+ 106,750
200,000 Brown University 5.90%, 9/1/14 Aa-1/AA+ 222,000
780,000 Brown University 5.25%, 9/1/16 Aa-1/AA+ 852,150
400,000 Brown University 5.00%, 9/1/19 Aa-1/AA+ 416,000
500,000 Brown University 5.00%, 9/1/23 Aa-1/AA+ 513,750
195,000 Roger Williams College Connie Lee Insured 6.50%, 11/15/08 Aaa/AAA 199,623
195,000 Roger Williams College Connie Lee Insured 6.625%, 11/15/11 Aaa/AAA 199,641
250,000 Salve Regina College Radian Insured 5.25%, 3/15/18 NR/AA 266,875
825,000 Johnson & Wales College Connie Lee Insured 5.75%, 4/1/12 NR/AAA 844,594
750,000 Johnson & Wales College MBIA Insured 5.00%, 4/1/29 Aaa/AAA 766,875
500,000 Johnson & Wales College XL Capital 5.25%, 4/1/14 Aaa/AAA 558,750
250,000 Rhode Island School of Design MBIA Insured 4.40%, 6/1/15 Aaa/AAA 260,312
585,000 Rhode Island School of Design MBIA Insured 4.60%, 6/1/17 Aaa/AAA 609,131
500,000 St. Antoine Residence Pre-refunded U.S. T. 6.75%, 11/15/18 Aa-3/NR 525,295
500,000 St. Antoine Residence LOC-Allied Irish Bank
6.125%, 11/15/18 Aa-3/NR 529,375
300,000 Lifespan MBIA Insured 5.75%, 5/15/23 Aaa/AAA 321,750
200,000 Memorial Hospital MBIA Insured 6.50%, 7/1/04 Aaa/AAA 204,848
300,000 Rhode Island Hospital FGIC Insured 6.70%, 8/15/04 Aaa/AAA 304,890
100,000 United Methodist Elder Care LOC-Fleet Bank 7.50%, 11/1/14 NR/A+ 105,750
125,000 New England Tech Inst. Connie Lee Insured 6.00%, 3/1/15 NR/AAA 134,687
Total Rhode Island Health & Education Building Corporation $ 8,484,046
Rhode Island Housing & Mortgage Finance Corporation (10.35%) (a)
$ 5,000 9.30%, 7/1/04, FGIC Insured Aaa/AAA $ 4,999
200,000 5.65%, 10/1/07 NR/A 204,500
200,000 5.70%, 4/1/15 Aa-2/AA+ 209,500
400,000 5.00%, 10/1/16 Aa-2/AA+ 412,000
500,000 5.75%, 4/1/17 Aa-2/AA+ 513,210
200,000 6.25%, 4/1/17 Aa-2/AA+ 208,250
12
OCEAN STATE TAX EXEMPT FUND
PORTFOLIO OF INVESTMENTS-(Continued)
(unaudited)
Ratings
Principal Moody's/ Value
Amount Standard & Poor's (b) (Note 1)
--------- --------------------- --------
<s> <c> <c>
MUNICIPAL SECURITIES (a)-(Continued)
Rhode Island Housing & Mortgage Finance Corporation (10.35%) (a)
$ 300,000 6.50%, 10/1/22 Aa-2/AA+ $ 304,308
250,000 5.40%, 10/1/16 Aa-2/AA+ 260,625
405,000 6.15%, 4/1/17 Aa-2/AA+ 423,731
750,000 5.40%, 10/1/17 Aa-2/AA+ 786,563
215,000 6.50%, 4/1/27 Aa-2/AA+ 218,879
Total Rhode Island Housing & Mortgage Finance Corporation $ 3,546,565
TOTAL RHODE ISLAND BONDS (94.68%) (a) $32,443,038
Puerto Rico Bonds (3.31%) (a)
$ 500,000 Puerto Rico Municipal Finance Auth. FSA Insured
5.50%, 7/1/17 Aaa/AAA $ 549,375
500,000 Puerto Rico Commonwealth MBIA Insured 5.50%, 7/1/16 NR/AAA 583,125
TOTAL PUERTO RICO BONDS (3.31%) (a) $ 1,132,500
TOTAL INVESTMENTS (Cost $31,605,953)(97.98%) (a) $33,575,538
<FN>
(a) Percentages indicated are based on net assets of $34,266,192 at April
30, 2003 (total investments plus cash and receivables less
liabilities) which corresponds to a net asset value per share of
$10.58.
(b) These municipal securities meet the four highest ratings assigned by
Moody's Investors Service, Inc. or Standard & Poor's Corp. or where
not rated, are determined by the Fund to be of comparable quality
within the guidelines approved by the directors and are unaudited.
The ratings indicated are the most current available and are
unaudited. When bonds are rated differently by Moody's and S&P, the
higher rating has been reported. The rating NR means it is not rated
by Moody's or S&P. Certain securities have credit enhancement
features backing them. Without these enhancement features the
securities may or may not meet the quality standards of other
securities purchased by the Fund. (See Note 1)
(c) Abbreviations used:
AMBAC-American Municipal Bond Assurance Corp.
CGIC-Capital Guaranty Insurance Co.
FGIC-Financial Guaranty Insurance Co.
FSA-Financial Security Assurance Inc.
MBIA-Municipal Bond Investors Assurance Corp.
LOC-Letter of Credit
CAPMAC-Capital Markets Assurance Corp.
Radian-Radian Insurance Co.
</FN>
13
Trustees and Officers (unaudited)
The Trustees of the Fund are responsible for the management and
direction of the business and affairs of the Fund. The Trustees and
officers of the Fund, their affiliations, if any, with the Adviser, and
their principal occupations during at least the last five years are set
forth below. Trustees who are "interested persons" of the Fund as the term
is defined in the 1940 Act are designated with an (*) asterisk. Age of the
Trustees is in parentheses ( ). The VLC Trust consists of one investment
portfolio. The Fund's Statement of Additional Information includes
additional information about Trustees and is available, without charge and
upon request, by calling 401-421-1411.
Trustees Background
Name, Address and Age Position(s) Held with Fund Principal Occupation(s) During Past Five Years
- --------------------- -------------------------- ----------------------------------------------
<s> <c> <c>
Alfred B. Van Liew *(68) President (since 1987) Managing Partner of the Adviser, since 1984;
One Regency Plaza and Trustee (since Director of the Distributor since May 1990;
Suite One 1986) Chairman and Chief Executive Officer of Van
Providence, Rhode Island 02903 Liew Trust Company, a Rhode Island chartered
trust company, since 1984; Executive Vice
President in charge of the trust and investment
management businesses of Rhode Island Hospital
Trust National Bank (1981-1984); President &
Chief Executive Officer of Hospital Trust of
Florida (1982-1984); Chairman and Chief Executive
Officer of HT Advisers, Inc. (1980-1984) and
Director of HT Investors, Inc. (1981-1984),
registered investment counseling firms affiliated
with RIHT Financial Corp.; Trustee of RI School
of Design (1974-1992); Board Member, Rhode Island
Water Resources Board and Rhode Island Water
Resources Board Corp. (1991-1994); Trustee of
Preserve Rhode Island since 1971; Adviser to the
National Trust for Historic Preservation since
1983; Trustee of St. Andrew's School since 1984;
Trustee of the Museum of Yachting since 1988; and
Trustee of the Seamen's Institute, Newport, Rhode
Island since 1994.
Mary Ann Altrui (60) Trustee (since 2001) Ms. Altrui has worked for facilities associated
10 Rhodes Avenue with the Diocese of Providence since 1964.
North Smithfield, Rhode Island Since 1988, Ms. Altrui has served as Adminis-
02896 trator of St. Antoine Residence (a nursing
facility). Since 1977, Ms. Altrui has been a
Director of Diocesan Elder Care Services. Since
1997, Ms. Altrui has also had oversight
responsibility for St. Clare Home (a 44-bed
nursing facility in Newport, Rhode Island). Ms.
Altrui acted as Administrator for St. Clare Home
(1982-1988). Ms. Altrui also acted as
Administrator for the Garrettson Memorial
Children's
14
Name, Address and Age Position(s) Held with Fund Principal Occupation(s) During Past Five Years
- --------------------- -------------------------- ----------------------------------------------
<s> <c> <c>
Day Care, a program of the St. Clare Home
Corporation (1984-1988). She held various social
work and administrative positions in adoption and
residential care (1964-1982). Ms. Altrui is a
founding member with St. Elizabeth Community,
Scandinavian Home, and Steere House of
"CareLink", a management service organization
incorporated in 1997. CareLink was formed to
create a post acute network of services and is
the only one of its kind in the State of Rhode
Island. Ms. Altrui is a member of the American
College of Health Care Administrators, the
Diocesan Biomedical Ethics Commission of the
North Smithfield Advisory Council. She is a
Director of Woonsocket Industrial Development
Corporation and WIDC Realty Corporation, and
serves on advisory committees for the Diocese of
Providence, the State of Rhode Island, and the
Nonprofit Association of Facilities and Services
for the Aging.
Milton C. Bickford, Jr. (71) Trustee (since 1987) Private investor since 1989; Director (Chairman
147 Beavertail Road 1999-2002) of AAA Southern New England;
Jamestown, Rhode Island 02835 CEO, National Bickford Foremost, Inc. (national
color printing firm) (1980-1989); CEO, National
Bickford Graphics, Inc. (1972-1980); CEO,
Bickford Engraving & Electrotype Company
(1959-1972); President Rotary Club of Providence
(1970-1971); Vice President Rhode Island
Philharmonic Orchestra (1972-1976); Vice
President Greater Providence Chamber of Commerce
(1976-1979); Trustee, Museum of Yachting
(1990-1995); Trustee, National Traffic Safety
Foundation (1999-2002); Chairman (1999-2002) of
AAA of Southern New England.
Meredith A. Curren (43) Trustee (since 2001) Since 1990, Chief Financial Officer, Pease &
75 Pennsylvania Avenue Curren, Inc. (refiners of precious metals). Ms.
Warwick, Rhode Island 02888 Curren serves as Board Vice President of New
England Women's Jewelry Association (1995-1998);
Advisory Council Member, Manufacturing Jewelers
and Silversmiths of America; Member, Providence
Jewelers Club; Advisory Board Member of Big
Brothers of Rhode Island; Board Secretary
(1996-1998) and Membership Committee Member of
the University Club; Board Member Providence
Chamber of Commerce; Director of Bancorp Rhode
Island, Inc. and Bank Rhode Island.
15
Name, Address and Age Position(s) Held with Fund Principal Occupation(s) During Past Five Years
- --------------------- -------------------------- ----------------------------------------------
<s> <c> <c>
Michael E. Hogue (60) Trustee (since 1989) President, VIAcorp. since June 1994; Managing
116 Chestnut Street Director, Chairman and Chief Executive Officer
Providence, Rhode Island 02903 of PW Group Inc. (insurance) and Chairman and
Chief Executive Officer of Providence Washington
Insurance Group (1986-1993); Chairman and
Managing Director of Philadelphia Insurance
Research Group (1975-1986) and Assistant
Professor of Insurance at the Wharton School,
University of Pennsylvania; Trustee of Trinity
Repertory Company (1997-), and President of the
Jewelry District Association (1998-); Director,
Fleet Bank (1991-1993); Trustee, Greater
Providence Chamber of Commerce (1987-1993);
Director and Chair of the Finance Committee,
Insurance Services Office (1990-1993); Trustee,
The Providence Foundation (1991-1993); Director,
American Insurance Association (1986-1993);
Trustee, American Institute of Chartered Property
Casualty Underwriters (1992-1993); Trustee, Rhode
Island Public Expenditure Council (1992-1993);
and Trustee, First Night Providence (1993-1997).
Arthur H. Lathrop (48) Trustee (since 2001) In practice as a Certified Public Accountant (sole
28 Spruce Street proprietor) in Westerly, RI (since 1991); Tax
Westerly, Rhode Island 02891 Manager of former Saniveri, Ryan, Sullivan &
Co., Providence and Westerly (1982-1991); Tax
Accountant of former Arthur Andersen & Co.,
Boston (1977-1982). Member of the American
Institute of Certified Public Accontants. Trustee
(since 1993) and Chairman of the Audit Committee
of Westerly Savings Bank; Trustee and Assistant
Treasurer (since 1990) of River Bend Cemetery
Company; Corporator (since 1989) of Community
Health of Westerly, Inc.; Professional Advisory
Council Member (1995-2000) of The Rhode Island
Foundation.
16
Name, Address and Age Position(s) Held with Fund Principal Occupation(s) During Past Five Years
- --------------------- -------------------------- ----------------------------------------------
<s> <c> <c>
Alice M. Macintosh (81) Trustee (since 1986) Marketing consultant since 1991; Chief
861 Stratford Lane Supervisory Clerk of the State's Superior Court
Warwick, Rhode Island 02886 (1986-1991); previously a Marketing Consult-
ant and Vice-President of Marketing at Hospital
Trust National Bank. Mrs. Macintosh is an
honorary director of Narragansett Electric
Company, a former director of Bay Loan &
Investment Company (a subsidiary of FPL Group,
Inc., a subsidiary of Florida Power and Light)
and The Convention Authority of the City of
Providence and is also past Chairman of the Board
of AAA Auto Club of Southern New England, and
past President of the Rhode Island Bankers
Association, the Business and Professional Women
of Rhode Island and past Regional Vice President
of the National Association of Bank Women (NABW)
and co-founder of the Rhode Island Chapter.
Lawrence B. Sadwin (59) Trustee (since 2001) President, Lifestyle Security, LLC (since August
18 Oyster Point 2002), Division Marketing Leader for General
Warren, Rhode Island 02885 Electric (2000-2002); Chief Operating Officer
(1999-2000), Regional Manager (1998-1999),
Recruiter (1997-1998) and Long-Term Care
Specialist (1997) for Travelers/NET Plus, Inc.;
Consultant (1994-1997) for MGS Holding
Corporation; CEO of Sadwin Curtain Manufacturing
Company, Inc. (1964-1994). Mr. Sadwin serves as
a Member-At-Large, National Board of Directors,
American Heart Association; Member, National
Leadership Council, Research America; Vice-
Chairman, Landmark Health Systems, Inc.; Vice-
Chairman, Rehabilitation Hospital of Rhode
Island; former member, Woonsocket, Rhode Island
Redevelopment Agency; former Director,
Woonsocket, RI Chamber of Commerce; former Vice
President, Woonsocket Junior Chamber of Commerce;
former President, Congregation B'nai Israel;
former Member of Board of Directors, Jewish
Federation of Rhode Island; former member of
Board of Directors, New England Region, Anti-
Defamation League; former member of Board of
Directors, Woonsocket Chapter, B'nai B'rith;
former member of Board of Directors, Providence,
RI Hebrew Day School; Former Campaign Leader
Catholic Charities Campaign, Chairman of the
Board, American Heart Association (2001-2002).
17
Name, Address and Age Position(s) Held with Fund Principal Occupation(s) During Past Five Years
- --------------------- -------------------------- ----------------------------------------------
<s> <c> <c>
John St. Sauveur (69) Trustee (since 1992) President and CEO, WestBank Realty Corpora-
219 Great Road tion; Senior Vice President (governmental and
North Smithfield, Rhode Island consumer relations) of Valley Resources, Inc. (a
02896 natural gas distributor) and its subsidiary
companies (1956-1994). He is a Director of the
Community College of Rhode Island Foundation;
Chairman of the Board of Directors of the
Woonsocket Industrial Development Corporation;
Chairman of the Greater Woonsocket Industrial
Development Foundation; Vice Chairman of the
North Smithfield Industrial Development
Commission; a vice president and director of the
Rhode Island Chamber of Commerce Federation and
member of the Rhode Island State Job Training
Coordinating Council; also Finance Chairman,
Landmark Health System and Trustee, Landmark
Medical Center; Commissioner of the Rhode Island
Resource Recovery Corporation since 1992;
Chairman of The Rehabilitation Hospital of Rhode
Island; Director and Corporate Secretary of
Gooding Realty Corporation.
Samuel H. Hallowell, Jr. (55) Vice President (since Partner of the Adviser and Vice President
One Regency Plaza 1989) of Van Liew Trust Company since 1984;
Suite One formerly Vice President and Senior Portfolio
Providence, Rhode Island 02903 Manager at Rhode Island Hospital Trust National
Bank, specializing in the management of large
personal portfolios, and a member of the Strategy
Committee (1981-1984); previously with Bay Bank
Harvard Trust with responsibilities that included
portfolio management, investment consulting,
trading, and investment research, and a member of
its Trust Investment and Administrative
Committee; prior thereto, he was associated with
the brokerage firm of Moseley, Hallgarten,
Estabrook & Weeden, Inc.
Joseph J. Healy (35) Vice President (since Investment Officer, Fund Controller and primary
One Regency Plaza 1996) trader of the Adviser since 1992; General
Suite One Securities Principal of the Distributor since
Providence, Rhode Island 02903 1993; previously a Senior Mutual Fund Accoun-
tant with The Boston Company Advisers, Inc.
(September 1989 to August 1992).
18
Name, Address and Age Position(s) Held with Fund Principal Occupation(s) During Past Five Years
- --------------------- -------------------------- ----------------------------------------------
<s> <c> <c>
Kevin M. Oates (43) Vice President and Partner of the Adviser since 1996; Chief
One Regency Plaza Treasurer (since 1991) Operating Officer of the Adviser (since April,
Suite One 2000) and Van Liew Trust Company, and Vice
Providence, Rhode Island 02903 President and Treasurer of the Distributor, since
1991; Vice President-Administration of the
Adviser (1991-2000); Director of Business
Administration (August 1988 to April 1991) and
Manager (August 1985 to October 1987) at Finkel,
DiSanto, Fine & Co. (certified public
accountants); previously a Senior Tax Consultant
with Ernst & Whinney.
Margaret D. Farrell (53) Secretary (since 1986) Partner, Hinckley, Allen & Snyder LLP, general
1500 Fleet Center legal counsel to the Fund, since November
Providence, Rhode Island, 02903 1981; Director and Secretary of Bancorp Rhode
Island, Inc. and Bank Rhode Island; Director of
Care New England Health System; Director and Vice
Chairman of Women & Infants Corporation; Trustee
of Women & Infants Hospital of Rhode Island;
Trustee of Butler Hospital; Trustee and Member of
Executive Committee of Hospital Association of
Rhode Island; and Secretary of Astro-Med, Inc.
(manufacturer of graphic recording and printing
systems).
19
Investment Adviser & Administrator
Van Liew Capital Inc.
One Regency Plaza, Suite One
Providence, Rhode Island 02903
Distributor
Van Liew Securities, Inc. OCEAN STATE TAX EXEMPT FUND
One Regency Plaza, Suite One
Providence, Rhode Island 02903 (The Portfolio of VLC Trust)
Custodian
PFPC Trust Company
Airport Business Center
200 Stevens Drive, Suite 440
Lester, Pennsylvania 19113
Transfer Agent
PFPC, Inc.
P.O. Box 8871
Wilmington, Delaware 19899-8871 Semi-Annual Report
Independent Auditors April 30, 2003
Ernst & Young LLP (unaudited)
200 Clarendon Street
Boston, MA 02116-5072
Counsel
Hinckley, Allen & Snyder LLP
1500 Fleet Center
Providence, Rhode Island 02903
Trustees
Alfred B. Van Liew, Chairman
Mary Ann Altrui
Milton C. Bickford, Jr.
Meredith A. Curren
Michael E. Hogue
Arthur H. Lathrop
Alice M. Macintosh Interest income exempt
Lawrence B. Sadwin from Federal and Rhode
John H. St. Sauveur Island income taxes
from quality municipal
Officers bonds.
Alfred B. Van Liew, President
Samuel H. Hallowell, Vice President
Joseph J. Healy, Vice President
Kevin M. Oates, Treasurer
Margaret D. Farrell, Secretary
20
ITEM 2. CODE OF ETHICS. Not applicable at this time. Applicable for
annual reports filed for fiscal years ending on or after July 15, 2003.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable at this time.
Applicable for annual reports for the first fiscal year ending after December
15, 2003.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this
time. Applicable for annual reports filed for the first fiscal year ending
after December 15, 2003.
ITEM 5-6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES. Not applicable. Registrant is an open-
end management investment company.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure
controls and procedures conducted within 90 days of the filing date of this
report, the President and Treasurer have concluded that those controls and
procedures (as defined in rule 30a-2(c) under the Investment Company Act of
1940) provide reasonable assurance that material information required to be
disclosed by the registrant in this Form N-CSR has been recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms.
(b) There were no significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation described above,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
ITEM 10. EXHIBITS.
(a) Any Code of Ethics, or amendment thereto, that is subject
to the disclosure required by Item 2, to the extent that the registrant
intends to satisfy the Item 2 requirements through filing of an exhibit.
Not applicable.
(b) A separate certification for each principal executive
officer and principal financial officer of the registrant as required by
Rule 30a-2(a) under the Investment Company Act of 1940.
(i) EX-99.CERT - Certifications pursuant to Section 302
of the Sarbanes - Oxley Act of 2002 (filed herewith).
(ii) EX-99.906 CERT - Certifications pursuant to Section
906 of the Sarbanes - Oxley Act of 2002 (filed herewith).
21
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.
(Registrant) VLC Trust
ON BEHALF OF
OCEAN STATE TAX EMEMPT FUND
Date: July 1, 2003 By /s/ Alfred B. Van Liew
---------------------------------
Alfred B. Van Liew
President
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed below
by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
Date: July 1, 2003 By /s/ Alfred B. Van Liew
---------------------------------
Alfred B. Van Liew
President
Date: July 1, 2003 By /s/ Kevin M. Oates
---------------------------------
Kevin M. Oates
Vice President & Treasurer