-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G72K7K8bDN8sPOx8aFpElXAY1yHKZXGZmqdScgllSURp/ipRMZ+mOTSmH9NX+0B7 c/Q/PJzZnNA3ndPmAvTyOQ== 0000910647-04-000013.txt : 20040109 0000910647-04-000013.hdr.sgml : 20040109 20040109105503 ACCESSION NUMBER: 0000910647-04-000013 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031031 FILED AS OF DATE: 20040109 EFFECTIVENESS DATE: 20040109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VLC TRUST CENTRAL INDEX KEY: 0000798524 IRS NUMBER: 056080569 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-04788 FILM NUMBER: 04516895 BUSINESS ADDRESS: STREET 1: ONE REGENCY PLZ STE ONE CITY: PROVIDENCE STATE: RI ZIP: 02903 BUSINESS PHONE: 4014211411 MAIL ADDRESS: STREET 1: ONE REGENCY PLAZA STREET 2: STE ONE CITY: PROVIDENCE STATE: RI ZIP: 02903 N-CSR 1 ocea-oct.txt FORM N-CSR FOR OCTOBER 31, 2003 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: October 31, 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 OCTOBER 31, 2003 Item 1 1 Report of the President 1 Investment Preformance 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 Report of Independent Auditors 14 Federal Income Tax Information 15 Trustees and Officers 15 Items 2 - 10 20 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 [LOGO] Report of the President October 31, 2003 Another solid year for the municipal bond market, yet questions still abound. Is the economy really bouncing back? Will the mutual fund scandal affect investment performance? Most importantly, how will this changing environment affect my stake in the Ocean State Tax Exempt Fund ("the Fund")? During the fiscal year ended October 31, 2003 the Fund's net asset value declined from $10.54 to $10.48 while the dividend distribution dipped from $0.45 to $0.42. Interest rates continued their downward trend in 2003 but that may not be the case in 2004. Many prognosticators are predicting where the economy is headed next. At Ocean State Tax Exempt Fund we strive to manage a fund that will achieve it's stated investment objective in any kind of market. The Fund's goal is to provide as high a level of current income as is consistent with the preservation of principal. It's by design that our fund does not experience drastic price moves either up or down. Interest rates and bond yields are cyclical. They rise and fall with the perceived peaks and dips in the economy. Are we at a low for interest rates? We're not sure. However, rates have certainly fallen to historically low levels these past few years helping to spur an unprecedented rally in the bond market. Is it bad for a bond investor if rates rise? Common wisdom says yes but it's not necessarily true. Remember, the real advantage of the Ocean State Tax Exempt Fund is earning income that is free from both state and federal taxes for a Rhode Island investor. This tax advantage exists in any economic climate. Ocean State strives to reduce downside volatility through its holdings of higher coupon shorter-term debt, which should fare better in a rising rate environment than would longer-term lower coupon bonds. Also, if inflation became a risk to the economy, a vigilant Federal Reserve Bank would be wise to raise rates to temper what could potentially grow into a greater problem. We appreciate being entrusted with the safeguarding and management of your assets while the mutual fund industry is under much scrutiny. We will continually work to retain your confidence. Thank you. 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 October 31, 2003
Prior November 1, 2002 Fiscal Year November 1, 1998 November 1, 1993 through Ended through through October 31, 2003 October 31, 2002 October 31, 2003 October 31, 2003 ---------------- ---------------- ---------------- ---------------- Total Rate of Return(b) Based on: Net Asset Value 3.60% 4.21% 4.23% 5.00% Offering Price -0.55% 0.04% 3.37% 4.57% As of As of October 31, 2003 October 31, 2002 ---------------- ---------------- 30-day Current Yield Based on: Net Asset Value 3.38% 3.87% Offering Price 3.25% 3.72% 30-day Tax-Equivalent Yield (a) Based on: Net Asset Value 5.71% 7.01% Offering Price 5.49% 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 10.6 years as of October 31, 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 10/31/03 10/31/02 ------ -------- -------- Aaa/AAA 75.13% 72.43% Aa/AA 22.95% 23.09% A 1.05% 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 35% and a Rhode Island tax rate of 9% of federal taxable income. For 2002, shareholders subject to a maximum Federal tax rate of 38.60% and a Rhode Island tax rate of 25%. All dividend income is exempt from local, Federal and Rhode Island taxes for Rhode Island residents. Capital gains taxes will apply to any distributed capital gains. (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. The offering price reflects a maximum sales charge of 4.00%. 2 OCEAN STATE TAX EXEMPT FUND STATEMENT OF ASSETS AND LIABILITIES as of October 31, 2003 ASSETS Investments at value (identified cost $31,116,117) (Note 1A) $32,771,380 Cash 29,581 Interest receivable 397,788 Receivable for Capital Stock Sold 21,594 ----------- TOTAL ASSETS $33,220,343 LIABILITIES Distribution payable to shareholders $ 43,381 Payable for Capital Stock Redeemed 40,598 Accrued Expenses 4,385 Accrued management fees 17,098 ----------- TOTAL LIABILITIES 105,462 =========== NET ASSETS $33,114,881 =========== Net Assets consist of: Shares of beneficial interest at par ($.01/share) $ 31,588 Additional paid-in capital 31,321,523 Accumulated net realized gain on investment transactions 105,754 Undistributed net investment income 753 Net unrealized appreciation of investments 1,655,263 ----------- TOTAL-REPRESENTING NET ASSETS AT VALUE FOR 3,158,805 SHARES OUTSTANDING $33,114,881 =========== COMPUTATION OF NET ASSET VALUE & OFFERING PRICE: Net Assets $33,114,881 Divided by number of shares outstanding 3,158,805 Net asset value $ 10.48 =========== Offering price $ 10.92 ===========
See Notes to Financial Statements. 3 OCEAN STATE TAX EXEMPT FUND STATEMENT OF OPERATIONS For the year ended October 31, 2003 Investment Income Interest income (Note 1B) $1,684,028 Expenses: Adviser fees (Note 2) $120,832 Administrator fees (Note 2) 86,309 Transfer agent fees 36,557 Auditing fees 35,232 Legal fees and expenses 24,672 Trustees fees and expenses 24,000 Distribution expenses (Note 5) 12,832 Custody 10,147 Shareholder reports 7,451 Pricing fees 3,208 Miscellaneous expenses 2,694 Insurance 1,377 Registration fees 950 -------- $366,261 ---------- Net Investment Income $1,317,767 Realized and Unrealized Gain/(Loss) on Investments Net Realized Gain on Investments 90,977 Net Change in Unrealized Depreciation of Investments (161,791) -------- Net Realized and Unrealized Loss on Investments (70,814) ---------- Net Increase in Net Assets Resulting from Operations $1,246,953 ==========
See Notes to Financial Statements. 4 OCEAN STATE TAX EXEMPT FUND STATEMENTS OF CHANGES IN NET ASSETS
Fiscal Year Fiscal Year Ended Ended October 31, 2003 October 31, 2002 ---------------- ---------------- Increase (Decrease) in Net Assets Resulting from: Operations: Net investment income $ 1,317,767 $ 1,532,639 Net realized gain on investments 90,977 106,579 Change in unrealized depreciation of investments (161,791) (145,641) ----------- ----------- Net increase in net assets resulting from operations $ 1,246,953 $ 1,493,577 Dividends and distributions to shareholders from: Net investment income ($.42 per share in 2003 and $.45 per share in 2002) (1,317,766) (1,532,647) Net realized gains ($.03 per share in 2003) (105,799) 0 Net decrease from fund share transactions (Note 4) (2,797,165) (175,574) ----------- ----------- Total decrease in net assets (2,973,777) (214,644) NET ASSETS: Beginning of year 36,088,658 36,303,302 ----------- ----------- End of year $33,114,881 $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 Fiscal Year Year Year Year Year Ended Ended Ended Ended Ended 10/31/03 10/31/02 10/31/01 10/31/00 10/31/99 -------- -------- -------- -------- -------- Per Share Operating Performance: Net Asset Value, Beginning of Year $ 10.54 $ 10.55 $ 10.25 $ 10.12 $ 10.71 Net investment income .42 .45 .47 .49 .53 Net realized and unrealized gain (loss) on securities (.03) (.01) .30 .13 (.58) ------- ------- ------- ------- ------- Total from Investment Operations .39 .44 .77 .62 (.05) ------- ------- ------- ------- ------- Less Distributions: Dividends from net investment income (.42) (.45) (.47) (.49) (.53) Distribution from net realized gains (.03) (.00) (.00) (.00) (.01) ------- ------- ------- ------- ------- Total Distributions (.45) (.45) (.47) (.49) (.54) ------- ------- ------- ------- ------- Net Asset Value, End of Year $ 10.48 $ 10.54 $ 10.55 $ 10.25 $ 10.12 ======= ======= ======= ======= ======= Total investment return at Net Asset Value (a) 3.60% 4.21% 7.63% 6.22% (.66)% Ratios and Supplemental Data: Net Assets, End of Year (000"s omitted) $33,115 $36,089 $36,303 $37,526 $39,954 Ratio of expenses to average net assets 1.06% 1.04% 1.19% 1.12% .94% Ratio of net investment income to average net assets 3.82% 4.25% 4.52% 4.76% 4.91% Portfolio turnover 19% 17% 4% 5% 13% Fund expenses per share .12 .11 .13 .12 .10 Net investment income per share .42 .45 .47 .49 .53 (a) Total investment return does not reflect sales load.
6 OCEAN STATE TAX EXEMPT FUND NOTES TO FINANCIAL STATEMENTS October 31, 2003 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 October 31, 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 October 31, 2003, 96.46% 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 October 31, 2003, 81.40% 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 25.87% of the portfolio. The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 are frequently 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, trading characteristics, broker quotes and other local market conditions. Valuations developed through pricing techniques may vary from the actual amounts realized upon sale of the securities, and the potential variation may be greater for those securities valued using fundamental analysis. 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) NOTE 1 Significant Accounting Policies (continued) 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. The tax character of distributions as reported on the Statements of Changes in Net Assets for the years ended October 31, 2003 and 2002 was as follows:
2003 2002 ---- ---- Tax-Exempt Income $1,317,766 $1,532,647 Long-Term Capital Gains 105,799 -
As of October 31, 2003, the components of distributable earnings on a tax basis were as follows: Undistributed Long-Term Capital Gain $ 96,783 Unrealized Appreciation 1,664,234
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. NOTE 2 ADVISORY AND ADMINSTRATIVE 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 October 31, 2003 was $2,000. Legal fees and expenses of $24,672 were paid to a firm of which the Fund's Secretary is a partner. For the fiscal year ended October 31, 2003, the Distributor received $11,060 in commissions as a result of Fund share sales. 8 OCEAN STATE TAX EXEMPT FUND NOTES TO FINANCIAL STATEMENTS-(Continued) NOTE 3 INVESTMENT TRANSACTIONS For the fiscal year ended October 31, 2003 purchases and sales of investment securities, other than short-term investments, aggregated $6,393,950 and $9,268,914, respectively. The aggregate cost of investments for Federal income tax purposes is substantially the same as the aggregate cost for financial statement purposes. At October 31, 2003, gross unrealized appreciation on investment securities was $1,707,753 and gross unrealized depreciation on investment securities was $52,490. 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 ------ ------ 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 224,010 2,360,385 Shares issued in reinvestment of dividends 77,128 812,802 Shares redeemed (567,847) (5,970,352) --------- ----------- Net decrease (266,709) (2,797,165) --------- ----------- Balance at 10/31/03 3,158,805 $31,405,299 ========= ===========
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 $12,832 under the Plan during fiscal 2003. 9 OCEAN STATE TAX EXEMPT FUND PORTFOLIO OF INVESTMENTS as of October 31, 2003
Ratings Principal Moody's/ Value Amount Standard & Poor's (b) (Note 1) --------- --------------------- -------- MUNICIPAL SECURITIES (98.96%) (a) Rhode Island General Obligation and Revenue (63.82%) (a) $ 500,000 Barrington School District 5.00%, 10/1/14 Aa-2/NR $ 542,500 200,000 Burrillville General Obligation FGIC Insured 5.70%, 5/1/11 Aaa/AAA 215,500 300,000 East Providence General Obligation MBIA Insured 5.70%, 5/15/10 Aaa/AAA 323,625 200,000 East Providence General Obligation MBIA Insured 3.125%, 3/15/11 Aaa/AAA 196,750 250,000 Kent County Water Auth. MBIA Insured 6.35%, 7/15/14 Aaa/AAA 263,485 300,000 Lincoln General Obligation FGIC Insured 5.60%, 8/1/12 Aaa/NR 328,500 225,000 Middletown General Obligation 4.00%, 7/15/12 Aa-3/NR 231,469 210,000 Newport General Obligation MBIA Insured 6.50%, 8/15/06 Aaa/AAA 210,788 75,000 North Kingstown General Obligation 6.70%, 12/15/05 Aa-3/NR 82,969 80,000 North Kingstown General Obligation 6.80%, 12/15/06 Aa-3/NR 91,900 200,000 North Kingstown General Obligation FGIC Insured 5.70%, 10/1/18 Aaa/AAA 222,500 120,000 North Providence General Obligation MBIA Insured 6.00%, 10/01/09 Aaa/AAA 121,706 250,000 North Providence General Obligation FSA Insured 3.85%, 10/15/16 Aaa/AAA 244,375 500,000 North Providence General Obligation FSA Insured 4.00%, 10/15/17 Aaa/AAA 490,625 250,000 North Smithfield General Obligation FGIC Insured 4.00%, 10/15/12 Aaa/NR 257,813 500,000 Pawtucket General Obligation AMBAC Insured 5.00%, 4/15/09 Aaa/NR 558,750 500,000 Pawtucket General Obligation CGIC Insured 6.00%, 3/15/15 Aaa/AAA 538,125 500,000 Pawtucket General Obligation CGIC Insured 6.00%, 3/15/11 Aaa/AAA 538,125 500,000 Pawtucket General Obligation CGIC Insured 6.00%, 3/15/13 Aaa/AAA 538,125 500,000 Pawtucket General Obligation CGIC Insured, 6.00%, 3/15/12 Aaa/AAA 538,125 200,000 Providence Public Bldg. Auth. FSA Insured 5.10%, 12/15/08 Aaa/AAA 225,000 150,000 Providence Public Bldg. Auth. MBIA Insured 5.50%, 12/15/13 Aaa/AAA 166,875 500,000 Providence Public Bldg. Auth. AMBAC Insured 5.125%, 12/15/14 Aaa/AAA 548,125 185,000 Providence Public Bldg. Auth. FSA Insured 5.00%, 12/15/18 Aaa/AAA 193,788 250,000 Providence Public Bldg. Auth. AMBAC Insured 5.25%, 12/15/15 Aaa/AAA 276,250 250,000 Providence Public Bldg. Auth. FSA Insured 5.50%, 12/15/10 Aaa/AAA 288,125 500,000 Providence Redevelopment Auth. AMBAC Insured, 5.30%, 4/1/12 Aaa/NR 551,875 200,000 Providence Redevelopment Radian Insured 4.25%, 9/1/13 NR/AA 202,000 250,000 Smithfield General Obligation MBIA Insured 5.00%, 10/15/07 Aaa/AAA 277,812 10 OCEAN STATE TAX EXEMPT FUND PORTFOLIO OF INVESTMENTS-(Continued) Ratings Principal Moody's/ Value Amount Standard & Poor's (b) (Note 1) --------- --------------------- -------- MUNICIPAL SECURITIES (98.96%)(a)-(Continued) Rhode Island General Obligation and Revenue (63.82%)(a)-(Continued) $ 250,000 Warwick General Obligation MBIA Insured 4.60%, 11,15,05 Aaa/AAA $ 265,937 700,000 Warwick General Obligation MBIA Insured 6.60%, 11/15/06 Aaa/AAA 708,967 250,000 Warwick General Obligation FSA Insured 4.00%, 7/15/11 Aaa/AAA 261,562 250,000 Warwick General Obligation FSA Insured 4.125%, 7/15/13 Aaa/AAA 257,187 200,000 West Warwick General Obligation AMBAC Insured 4.625%, 3/1/03 Aaa/AAA 212,750 35,000 Westerly Dunn's Corner Fire District Unlimited Tax Assessment 7.80%, 6/1/03 A-1/NR 36,130 145,000 Rhode Island Clean Water Pre-refunded U.S. T MBIA Insured 6.50%, 10/1/06 Aaa/AAA 149,425 150,000 Rhode Island Clean Water MBIA Insured 5.30%, 10/1/07 Aaa/AAA 168,188 100,000 Rhode Island Clean Water AMBAC Insured 4.75%, 10/1/18 Aaa/AAA 102,500 225,000 Rhode Island Clean Water MBIA Insured 5.00%, 10/1/18 Aaa/AAA 236,250 650,000 Rhode Island Depositors Economic Protection Corp. MBIA Insured Escrowed to Maturity 6.55%, 8/1/10 Aaa/AAA 772,906 215,000 Rhode Island Depositors Economic Protection Corp. CAPMAC Guaranteed Escrowed to Maturity 6.375%, 8/1/22 Aaa/AAA 265,256 250,000 Rhode Island Depositors Economic Protection Corp. Escrowed to Maturity 5.75%, 8/1/21 Baa-1/NR 286,563 500,000 Rhode Island Economic Development Corp. Airport Revenue FSA Insured 5.25%, 7/1/12 Aaa/AAA 545,625 395,000 Rhode Island Economic Development Corp. Airport Revenue FSA Insured 5.25%, 7/1/13 Aaa/AAA 429,069 545,000 Rhode Island Economic Development Corp. Airport Revenue FSA Insured 5.25%, 7/1/14 Aaa/AAA 588,600 450,000 Rhode Island Economic Development Corp. Airport Revenue FSA Insured 5.00%, 7/1/18 Aaa/AAA 473,625 400,000 Rhode Island Economic Development Corp. Providence Place Radian Insured 6.125%, 7/1/20 NR/AA 448,000 100,000 RI COPS MBIA Insured 5.375%, 10/1/16 Aaa/AAA 110,250 300,000 Rhode Island Lease Participation Certificate Shepard Bldg. AMBAC Insured 5.125%, 6/1/12 Aaa/AAA 331,125 150,000 Rhode Island Port Auth. Pre-refunded U.S. T AMBAC Insured 6.50%, 6/1/08 Aaa/AAA 157,695 500,000 Rhode Island Refunding Bond Authority AMBAC Insured 5.25%, 2/1/10 Aaa/AAA 560,625 750,000 Rhode Island General Obligation MBIA Insured 5.00%, 9/1/18 Aaa/AAA 792,187 300,000 Rhode Island General Obligation FGIC Insured 5.125%, 7/15/14 Aaa/AAA 323,250 480,000 Rhode Island General Obligation FGIC Insured 5.00%, 9/1/14 Aaa/AAA 511,800 500,000 Rhode Island General Obligation MBIA Insured 5.75%, 8/1/15 Aaa/AAA 560,625 1,000,000 Rhode Island General Obligation FGIC Insured 5.50%, 9/1/16 Aaa/AAA 1,110,000 11 OCEAN STATE TAX EXEMPT FUND PORTFOLIO OF INVESTMENTS-(Continued) Ratings Principal Moody's/ Value Amount Standard & Poor's (b) (Note 1) --------- --------------------- -------- MUNICIPAL SECURITIES (98.96%)(a)-(Continued) Rhode Island General Obligation and Revenue (63.82%)(a)-(Continued) $ 200,000 Rhode Island Cons. Cap. Dev. MBIA Insured 5.25%, 11/1/10 Aaa/AAA $ 227,250 400,000 Rhode Island Cons. Cap. Dev. FGIC Insured 5.40%, 9/1/14 Aaa/AAA 441,500 250,000 Rhode Island Cons. Cap. Dev. FGIC Insured 5.00%, 9/1/16 Aaa/AAA 266,875 250,000 Rhode Island Cons. Cap. Dev. FGIC Insured 5.00%, 9/1/15 Aaa/AAA 267,813 ----------- Total Rhode Island General Obligation and Revenue $21,135,140 ----------- Rhode Island Health & Education Building Corporation (24.38%)(a) $ 500,000 University of Rhode Island MBIA Insured 2.375%, 9/15/08 Aaa/AAA $ 496,250 100,000 University of Rhode Island AMBAC Insured 5.20%, 9/15/15 Aaa/AAA 108,125 300,000 University of Rhode Island AMBAC Insured 5.20%, 9/15/16 Aaa/AAA 323,250 100,000 Bryant College AMBAC Insured 4.60%, 6/1/12 Aaa/AAA 107,375 100,000 Brown University 4.75%, 9/1/12 Aa-1/AA+ 105,875 200,000 Brown University 5.90%, 9/1/14 Aa-1/AA+ 218,500 780,000 Brown University 5.25%, 9/1/16 Aa-1/AA+ 845,325 400,000 Brown University 5.00%, 9/1/19 Aa-1/AA+ 417,500 500,000 Brown University 5.00%, 9/1/23 Aa-1/AA+ 509,375 195,000 Roger Williams College Connie Lee Insured 6.50%, 11/15/08 Aaa/AAA 197,488 195,000 Roger Williams College Connie Lee Insured 6.625%, 11/15/11 Aaa/AAA 197,500 250,000 Salve Regina College Radian Insured 5.25%, 3/15/18 NR/AA 264,375 750,000 Johnson & Wales College MBIA Insured 5.00%, 4/1/29 Aaa/AAA 762,188 500,000 Johnson & Wales College XL Capital 5.25%, 4/1/14 Aaa/AAA 555,000 250,000 Rhode Island School of Design MBIA Insured 4.40%, 6/1/15 Aaa/AAA 258,750 585,000 Rhode Island School of Design MBIA Insured 4.60%, 6/1/17 Aaa/AAA 604,012 500,000 St. Antoine Residence Pre-refunded U.S. T. 6.75%, 11/15/18 Aa-3/NR 510,805 500,000 St. Antoine Residence LOC-Allied Irish Bank 6.125%, 11/15/18 Aa-3/NR 525,000 300,000 Lifespan MBIA Insured 5.75%, 5/15/23 Aaa/AAA 320,250 200,000 Memorial Hospital MBIA Insured 6.50%, 7/1/04 Aaa/AAA 204,764 300,000 Rhode Island Hospital FGIC Insured 6.70%, 8/15/04 Aaa/AAA 304,725 100,000 United Methodist Elder Care LOC-Fleet Bank 7.50%, 11/1/14 NR/A+ 104,455 125,000 New England Tech Inst. Connie Lee Insured 6.00%, 3/1/15 NR/AAA 132,188 ----------- Total Rhode Island Health & Education Building Corporation $ 8,073,075 ----------- Rhode Island Housing & Mortgage Finance Corporation (8.26%)(a) $ 5,000 9.30%, 7/1/04, FGIC Insured Aaa/AAA $ 5,005 200,000 5.65%, 10/1/07 NR/A 204,250 250,000 4.00%, 4/1/13 Aa-2/AA+ 248,750 200,000 5.70%, 4/1/15 Aa-2/AA+ 208,250 400,000 5.00%, 10/1/16 Aa-2/AA+ 409,500 350,000 5.75%, 4/1/17 Aa-2/AA+ 357,000 10,000 6.50%, 10/1/22 Aa-2/AA+ 10,104 250,000 5.40%, 10/1/16 Aa-2/AA+ 258,750 12 OCEAN STATE TAX EXEMPT FUND PORTFOLIO OF INVESTMENTS-(Continued) Ratings Principal Moody's/ Value Amount Standard & Poor's (b) (Note 1) --------- --------------------- -------- MUNICIPAL SECURITIES (98.96%)(a)-(Continued) Rhode Island Housing & Mortgage Finance Corporation (8.26%)(a) $ 240,000 6.15%, 4/1/17 Aa-2/AA+ $ 249,000 750,000 5.40%, 10/1/17 Aa-2/AA+ 778,125 5,000 6.50%, 4/1/27 Aa-2/AA+ 5,056 ----------- Total Rhode Island Housing & Mortgage Finance Corporation $ 2,733,790 ----------- TOTAL RHODE ISLAND BONDS (96.46%) (a) $31,942,005 =========== Puerto Rico Bonds (2.50%) (a) $ 250,000 Puerto Rico Electric Power Authority MBIA Insured, 5.00%, 7/1/10 Aaa/AAA $ 278,750 500,000 Puerto Rico Municipal Finance Auth. FSA Insured, 5.50%, 7/1/17 Aaa/AAA 550,625 ----------- TOTAL PUERTO RICO BONDS (2.50%) (a) $ 829,375 ----------- TOTAL INVESTMENTS (Cost $31,116,117)(93.96%)(a) $32,771,380 =========== (a) Percentages indicated are based on net assets of $33,114,881 at October 31, 2003 (total investments plus cash and receivables less liabilities) which corresponds to a net asset value per share of $10.48. (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.
See Notes to Financial Statements. 13 OCEAN STATE TAX EXEMPT FUND REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS To the Trustees of VLC Trust and Shareholders of Ocean State Tax Exempt Fund We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Ocean State Tax Exempt Fund (the "Fund") (a portfolio of the VLC Trust), as of October 31, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets for the two years in the period then ended, and financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2003, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Ocean State Tax Exempt Fund, at October 31, 2003, 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Boston, Massachusetts December 10, 2003 14 Federal Income Tax Information (unaudited) For the year ended October 31, 2003, the amount of long-term capital gain designated by the Fund was $105,799. The amount of tax exempt interest dividends distributed by the Fund was $1,317,766. Trustees and Officers 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 past five years are set forth below. Trustees who are "interested persons" of the Fund as that term is defined in the 1940 Act are designated with an (*) asterisk. Age of the Trustee 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 - --------------------- -------------------------- ---------------------------------------------- Alfred B. Van Liew *(69) 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; 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 (61) Trustee (since 2001) Administrator of St. Antoine Residence (a 10 Rhodes Avenue nursing facility) (1988-present); Director of North Smithfield, Rhode Island Diocesan Elder Care Services (1997-present); 02896 oversight responsibility for St. Clare Home (a 44-bed nursing facility in Newport, Rhode Island); founding member with St. Elizabeth Community, Scandinavian Home, and Steere House of "CareLink", a management service organization incorporated in 1997; member of the American College of Health Care Administra- tors, the Diocesan Biomedical Ethics Commis- sion of the North Smithfield Advisory Council; 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. 15 Name, Address and Age Position(s) Held with Fund Principal Occupation(s) During Past Five Years - --------------------- -------------------------- ---------------------------------------------- Milton C. Bickford, Jr. (72) 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); Trustee, National Traffic Safety Foundation (1999- 2002). Meredith A. Curren (44) 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, Manufactur- ing 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 Com- merce; Director of Bancorp Rhode Island, Inc. and Bank Rhode Island. Michael E. Hogue (61) Trustee (since 1989) Managing Partner, eTime (since February 2002); 116 Chestnut Street President, VIAcorp. since June 1994; Assistant Providence, Rhode Island 02903 Professor of Insurance at the Wharton School, University of Pennsylvania; Trustee of Trinity Repertory Company (1997-), and President of the Jewelry District Association (1998-). Arthur H. Lathrop (49) Trustee (since 2001) In practice as a Certified Public Accountant (sole 28 Spruce Street proprietor) in Westerly, RI (since 1991); Westerly, Rhode Island 02891 Member of the American Institute of Certified Public Accountants. 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. Alice M. Macintosh (82) 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. 16 Name, Address and Age Position(s) Held with Fund Principal Occupation(s) During Past Five Years - --------------------- -------------------------- ---------------------------------------------- Lawrence B. Sadwin (60) 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; 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; Chairman of the Board, American Heart Association (2001- 2002). John St. Sauveur (70) Trustee (since 1992) President and CEO, WestBank Realty Corpora- 219 Great Road tion; Director of the Community College of North Smithfield, Rhode Island Rhode Island Foundation; Chairman of the 02896 Woonsocket Industrial Development Corpor- ation; 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; Finance Chairman, Landmark Health System and Trustee, Landmark Medical Center; Commis- sioner 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. (56) Vice President (since Partner of the Adviser and Vice President One Regency Plaza 1989) of Van Liew Trust Company since 1984; Suite One Secretary and Past President of the Audubon Providence, Rhode Island 02903 Society of Rhode Island. Joseph J. Healy (36) Vice President (since Investment Officer, Fund Controller and primary One Regency Plaza 1996) trader of the Adviser since 1992; President and Suite One General Securities Principal of the Distributor Providence, Rhode Island 02903 1993. 17 Name, Address and Age Position(s) Held with Fund Principal Occupation(s) During Past Five Years - --------------------- -------------------------- ---------------------------------------------- Kevin M. Oates (44) 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). Margaret D. Farrell (54) 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 Chairman of Women & Infants Corporation; Trustee of Butler Hospital; and Secretary of Astro-Med, Inc. (manufacturer of graphic recording and printing systems).
PRIVACY POLICY The Van Liew Companies, Van Liew Securities, Inc. and Ocean State Tax Exempt Fund have always been committed to ensuring your financial privacy. We do not sell personal information to anyone. We recognize and respect the privacy of our customers. This notice is being sent to comply with the privacy regulations of the Securities and Exchange Commission. Each of the above financial institutions has in effect the following policy with respect to nonpublic personal information about its customers. * Only such information received from you, through application forms or otherwise, and information about your transactions will be collected. * None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees necessary to service your account). We do not disclose nonpublic personal information about you to non-affiliated third parties. * Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. 18 Investment Adviser & Administrator Van Liew Capital Inc. OCEAN STATE TAX EXEMPT FUND One Regency Plaza, Suite One Providence, Rhode Island 02903 (The Portfolio of VLC Trust) Distributor Van Liew Securities, Inc. One Regency Plaza, Suite One Providence, Rhode Island 02903 Custodian PFPC Trust Company Airport Business Center 200 Stevens Drive, Suite 440 Lester, Pennsylvania 19113 Transfer Agent Ocean State Tax Exempt Fund C/O PFPC, Inc. P.O. Box 9839 Annual Report Providence, Rhode Island 02903 October 31, 2003 Independent Auditors Ernst & Young LLP 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 Interest income exempt Arthur H. Lathrop from Federal and Rhode Alice M. Macintosh Island income taxes Lawrence B. Sadwin from quality municipal John H. St. Sauveur bonds. Officers Alfred B. Van Liew, President Samuel H. Hallowell, Vice President Joseph J. Healy, Vice President Kevin M. Oates, Treasurer Margaret D. Farrell, Secretary ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics applicable to its President (as the registrant's principal executive officer), the Treasurer (as the registrant's principal financial and accounting officer) and any other person or persons performing the functions of these offices or the functions of a controller. The registrant undertakes to provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-330-1116. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's board has designated Arthur H. Lathrop, an independent trustee, as its audit committee financial expert. Mr. Lathrop is a practicing certified public accountant and sole proprietor in Westerly, Rhode Island. Previously, Mr. Lathrop served as Tax Manager of Sansiveri, Ryan, Sullivan & Co. of Providence and Westerly, Rhode Island. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. Effective for the first fiscal year ending after December 15, 2003. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. Registrant is not a listed issuer as defined in Rule 10A-3 of the Securities Exchange Act of 1934. ITEM 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. See Item 2. (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). 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: January 9, 2004 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: January 9, 2004 By: /s/ Alfred B. Van Liew -------------------------------- Alfred B. Van Liew President Date: January 9, 2004 By: /s/ Kevin M. Oates -------------------------------- Kevin M. Oates Vice President & Treasurer EX-99 3 oce-o991.txt EXHIBIT 99 EX - 99. CERT Certification under Investment Company Act Rule 30a-2 and Section 302 of the Sarbanes - Oxley Act of 2002 I, Alfred B. Van Liew, certify that: 1. I have reviewed this report on Form N-CSR of VLC Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 9, 2004 By: /s/ Alfred B. Van Liew ____________________________ President EX - 99. CERT Certification under Investment Company Act Rule 30a-2 and Section 302 of the Sarbanes - Oxley Act of 2002 I, Kevin M. Oates, certify that: 1. I have reviewed this report on Form N-CSR of VLC Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 10. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 9, 2004 By: /s/ Kevin M. Oates __________________________ Vice President & Treasurer EX-99 4 oce-o992.txt EXHIBIT 99.906 EX-99.906 CERT Exhibit (b) CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of VLC Trust on behalf of the Ocean State Tax Exempt Fund (the "Company"), hereby certifies, to the best of his knowledge, that the Company's Report on Form N-CSR for the period ended October 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company Dated: January 9, 2004 By: /s/ Alfred B. Van Liew __________________________ Alfred B. Van Liew President A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request. EX-99.906 CERT Exhibit (b) CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of VLC Trust on behalf of the Ocean State Tax Exempt Fund (the "Company"), hereby certifies, to the best of his knowledge, that the Company's Report on Form N-CSR for the period ended October 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company Dated: January 9, 2004 By: /s/ Kevin M. Oates __________________________ Kevin M. Oates Vice President & Treasurer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----