UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED AMENDED REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-04875
Name of Registrant: Royce Value Trust, Inc.
Address of Registrant: 1414 Avenue of the Americas
New York, NY 10019
Name and address of agent for service: John E. Denneen, Esquire
1414 Avenue of the Americas
New York, NY 10019
Registrant's telephone number, including area code: (212) 486-1445
Date of fiscal year end: December 31
Date of reporting period: January 1, 2002 - December 31, 2002
ITEM 1: REPORTS TO SHAREHOLDERS
ROYCE VALUE TRUST, INC.
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SCHEDULE OF INVESTMENTS DECEMBER 31, 2002
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COMMON STOCKS - 94.2%
SHARES VALUE
------ -----
CONSUMER PRODUCTS - 7.4%
Apparel and Shoes - 2.6%
Jones Apparel Group (a) 81,500 $ 2,888,360
K-Swiss Cl. A 119,000 2,583,490
Nautica Enterprises (a) 85,700 952,127
Oshkosh B'Gosh Cl. A 104,300 2,925,615
Polo Ralph Lauren Cl. A (a) 150,000 3,264,000
Timberland Company Cl. A (a) 15,000 534,150
Weyco Group 127,664 4,381,428
Wolverine World Wide 99,400 1,501,934
------------
19,031,104
------------
Collectibles - 0.3%
The Boyds Collection (a,d) 210,100 1,397,165
Enesco Group (a) 117,200 829,776
------------
2,226,941
------------
Food/Beverage/Tobacco - 0.6%
800 JR Cigar (a,e) 172,400 2,241,200
Hain Celestial Group (a) 37,800 574,560
Hershey Creamery 709 1,311,650
------------
4,127,410
------------
Home Furnishing/Appliances - 1.0%
Bassett Furniture Industries 116,675 1,670,786
Falcon Products (a) 377,000 1,526,850
La-Z-Boy (d) 68,200 1,635,436
Lifetime Hoan 295,327 1,408,710
Natuzzi ADR (b) 62,200 631,952
------------
6,873,734
------------
Publishing - 0.6%
Marvel Enterprises (a) 304,400 2,733,512
Scholastic Corporation (a) 35,000 1,258,250
------------
3,991,762
------------
Sports and Recreation - 1.2%
Callaway Golf 35,000 463,750
Coachmen Industries 67,700 1,069,660
Fleetwood Enterprises (a,d) 234,300 1,839,255
Monaco Coach (a) 123,950 2,051,372
Sturm, Ruger & Co. 258,400 2,472,888
Thor Industries (d) 22,100 760,903
------------
8,657,828
------------
Other Consumer Products - 1.1%
Burnham Corporation Cl. B 18,000 648,000
Fossil (a) 15,000 305,100
Lazare Kaplan International (a) 103,600 563,584
Matthews International Cl. A 196,000 4,376,876
Oakley (a) 175,000 1,797,250
Scotts (The) Cl. A (a) 10,000 490,400
------------
8,181,210
------------
TOTAL (Cost $39,087,482) 53,089,989
============
CONSUMER SERVICES - 5.4%
Leisure/Entertainment - 0.8%
Ascent Media Group Cl. A (a) 380,900 426,608
Corus Entertainment Cl. B (a) 22,000 262,900
Hasbro 50,000 577,500
Hearst-Argyle Television (a) 11,000 265,210
+Magna Entertainment Cl. A (a,d) 140,800 872,960
Shuffle Master (a,d) 15,000 286,650
Ticketmaster Cl. B (a) 121,200 2,571,864
+TiVo (a,d) 70,000 366,100
------------
5,629,792
------------
Restaurants/Lodgings - 1.0%
+Benihana Cl. A (a,d) 2,500 33,750
Four Seasons Hotels 80,000 2,260,000
IHOP Corporation (a) 161,700 3,880,800
Prime Hospitality (a) 106,100 864,715
Ryan's Family Steak Houses (a) 40,900 464,215
------------
7,503,480
------------
Retail Stores - 2.5%
Big Lots (a) 307,200 4,064,256
Charming Shoppes (a,d) 753,400 3,149,212
Claire's Stores 127,700 2,818,339
PAYLESS SHOESOURCE (a) 93,200 4,797,004
Stein Mart (a) 192,800 1,176,080
Urban Outfitters (a) 83,800 1,975,166
------------
17,980,057
------------
Other Consumer Services - 1.1%
ITT Educational Services (a) 120,000 2,826,000
SOTHEBY'S HOLDINGS CL. A (a) 500,200 4,501,800
Strayer Education 10,000 575,000
------------
7,902,800
------------
TOTAL (Cost $39,910,757) 39,016,129
============
FINANCIAL INTERMEDIARIES - 10.0%
Banking - 2.2%
BOK Financial (a) 121,904 3,948,471
Farmers & Merchants Bank of Long
Beach 1,266 4,000,560
First National Bank Alaska 2,130 2,886,150
Mechanics Bank 200 3,320,000
Oriental Financial Group 63,800 1,568,204
------------
15,723,385
------------
Insurance - 7.4%
Argonaut Group 187,000 2,758,250
Erie Indemnity Company Cl. A (d) 107,900 3,912,454
Everest Re Group 25,300 1,399,090
Fidelity National Financial 13,275 435,818
First American 31,700 703,740
Leucadia National 57,900 2,160,249
Markel Corporation (a) 4,200 863,100
NYMAGIC (a) 60,200 1,170,890
Navigators Group (a) 83,200 1,909,440
+PICO Holdings (a) 151,100 2,029,273
PMA Capital Cl. A (d) 241,700 3,463,561
PXRE Group 176,551 4,325,499
The Phoenix Companies 81,900 622,440
PROASSURANCE (a) 430,170 9,033,570
RLI 118,724 3,312,400
Reinsurance Group of America (d) 30,000 812,400
Trenwick Group (d) 212,260 152,827
Wesco Financial 11,990 3,716,301
WHITE MOUNTAINS INSURANCE GROUP (d) 25,600 8,268,800
Zenith National Insurance 106,900 2,514,288
------------
53,564,390
------------
Securities Brokers - 0.4%
E*TRADE Group (a) 575,000 2,794,500
------------
TOTAL (Cost $48,682,808) 72,082,275
============
FINANCIAL SERVICES - 6.3%
Information and Processing - 2.0%
+Advent Software (a,d) 33,000 449,790
BARRA (a,d) 42,200 1,279,926
eFunds Corporation (a) 177,675 1,618,619
+FactSet Research Systems (d) 140,000 3,957,800
26
ROYCE VALUE TRUST, INC.
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SCHEDULE OF INVESTMENTS DECEMBER 31, 2002
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SHARES VALUE
------ -----
FINANCIAL SERVICES (CONTINUED)
Information and Processing (continued)
Fair, Isaac and Co. 5,190 $ 221,613
Global Payments 61,500 1,968,615
Moody's Corporation 50,000 2,064,500
National Processing (a) 20,000 321,000
SEI Investments 93,200 2,533,176
------------
14,415,039
------------
Insurance Brokers - 1.4%
Brown & Brown 20,000 646,400
Crawford & Co. Cl. A 297,350 1,219,135
Crawford & Co. Cl. B 75,300 376,500
Gallagher (Arthur J.) & Company 106,200 3,120,156
HILB, ROGAL & HAMILTON 115,350 4,717,815
------------
10,080,006
------------
Investment Management - 2.7%
Affiliated Managers Group (a,d) 60,000 3,018,000
Alliance Capital Management
Holding L.P. (d) 139,000 4,309,000
BKF Capital Group (a) 94,000 1,659,100
BlackRock Cl. A (a) 35,000 1,379,000
Eaton Vance (d) 80,200 2,265,650
Federated Investors Cl. B 15,000 380,550
John Nuveen Company Cl. A 119,200 3,021,720
+Neuberger Berman 105,000 3,516,450
------------
19,549,470
------------
Other Financial Services - 0.2%
PRG-Schultz International (a) 123,800 1,101,820
------------
TOTAL (Cost $33,842,910) 45,146,335
============
HEALTH - 8.3%
Commercial Services - 1.6%
IDEXX Laboratories (a) 104,100 3,466,530
PAREXEL International (a) 277,700 3,051,923
Pharmaceutical Product
Development (a) 10,000 292,700
Quintiles Transnational (a) 180,300 2,181,630
Sybron Dental Specialties (a) 21,000 311,850
The TriZetto Group (a) 190,200 1,167,828
Young Innovations (a) 57,550 1,339,188
------------
11,811,649
------------
Drugs and Biotech - 2.1%
Abgenix (a) 38,000 280,060
Affymetrix (a) 86,600 1,982,274
+Albany Molecular Research (a,d) 40,000 591,640
Antigenics (a,d) 38,500 394,240
Applera Corporation-
Celera Genomics Group (a,d) 199,200 1,902,360
Biopure Corporation Cl. A (a,d) 43,200 160,704
BioSource International (a) 1,600 9,582
Celgene Corporation (a) 40,000 858,800
Cerus Corporation (a,d) 21,700 466,550
Chiron Corporation (a,d) 21,800 819,680
Gene Logic (a) 308,100 1,937,949
Genzyme Corporation - General
Division (a) 28,000 827,960
IDEC Pharmaceuticals (a) 28,100 932,077
Lexicon Genetics (a) 256,200 1,211,826
Millennium Pharmaceuticals (a) 24,000 190,560
Perrigo (a,d) 169,900 2,064,285
Shire Pharmaceuticals
Group ADR (a,b,d) 20,853 393,913
------------
15,024,460
------------
Health Services - 0.9%
Covance (a) 132,700 3,263,093
Gentiva Health Services (a) 30,150 265,621
Health Management Associates Cl. A 27,400 490,460
Lincare Holdings (a) 24,600 777,852
Manor Care (a) 38,300 712,763
MedQuist (a) 73,893 1,497,072
------------
7,006,861
------------
Personal Care - 0.6%
Ocular Sciences (a,d) 177,500 2,754,800
Regis 57,200 1,486,628
------------
4,241,428
------------
Surgical Products and Devices - 3.1%
ARROW INTERNATIONAL (d) 180,600 7,345,002
CONMED (a) 38,500 754,215
Datascope 37,000 917,637
Diagnostic Products Corporation 25,000 965,500
Haemonetics (a,d) 92,900 1,993,634
Invacare 100,000 3,330,000
Novoste (a,d) 66,500 480,130
STERIS (a) 48,600 1,178,550
Varian Medical Systems (a) 75,800 3,759,680
Zoll Medical (a) 20,200 720,534
------------
21,444,882
------------
TOTAL (Cost $54,015,112) 59,529,280
============
INDUSTRIAL PRODUCTS - 14.1%
Building Systems and Components - 1.2%
Decker Manufacturing 6,022 218,298
Preformed Line Products Company 131,600 2,193,772
SIMPSON MANUFACTURING (a) 190,400 6,264,160
------------
8,676,230
------------
Construction Materials - 1.9%
ASH GROVE CEMENT COMPANY CL. B 50,518 6,377,897
FLORIDA ROCK INDUSTRIES 158,800 6,042,340
Oregon Steel Mills (a) 247,900 996,558
------------
13,416,795
------------
Industrial Components - 1.5%
Bel Fuse Cl. A (a) 6,300 114,030
Belden (d) 47,800 727,516
Donaldson Company 26,000 936,000
Kaydon Corporation 161,200 3,419,052
Penn Engineering & Manufacturing 251,600 2,679,540
Penn Engineering & Manufacturing
Cl. A 77,600 869,120
PerkinElmer 135,000 1,113,750
Powell Industries (a) 32,400 553,360
Woodhead Industries 45,400 513,020
------------
10,925,388
------------
Machinery - 3.4%
COHERENT (a) 233,700 4,662,315
Federal Signal (d) 58,600 1,138,012
Graco 26,550 760,658
LINCOLN ELECTRIC HOLDINGS 237,880 5,506,922
National Instruments (a,d) 41,100 1,335,339
Nordson Corporation 172,200 4,275,726
Oshkosh Truck 5,000 307,500
PAXAR (a) 175,100 2,582,725
Woodward Governor 83,600 3,636,600
------------
24,205,797
------------
Paper and Packaging - 0.4%
Peak International (a) 408,400 1,547,836
Sealed Air (a) 34,000 1,268,200
------------
2,816,036
------------
27
ROYCE VALUE TRUST, INC.
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SCHEDULE OF INVESTMENTS DECEMBER 31, 2002
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SHARES VALUE
------ -----
INDUSTRIAL PRODUCTS (CONTINUED)
Pumps, Valves and Bearings - 0.8%
Baldor Electric (d) 62,900 $ 1,242,275
ConBraCo Industries (a) 7,630 572,250
Denison International ADR (a,b) 89,400 1,430,400
Franklin Electric 23,600 1,133,036
NN 127,100 1,269,729
------------
5,647,690
------------
Specialty Chemicals and Materials - 1.2%
Arch Chemicals 38,200 697,150
CFC International (a) 123,500 549,575
Hawkins 301,278 2,708,489
MACDERMID 211,631 4,835,768
------------
8,790,982
------------
Textiles - 0.3%
Fab Industries (a) 67,700 551,755
Unifi (a) 265,100 1,391,775
------------
1,943,530
------------
Other Industrial Products - 3.4%
BHA Group Holdings (a) 187,252 3,211,372
Brady Corporation Cl. A 79,400 2,647,990
Diebold 100,000 4,122,000
IMPCO Technologies (a,d) 15,500 72,695
KIMBALL INTERNATIONAL CL. B 334,880 4,772,040
Maxwell Technologies (a,d) 26,500 160,325
Myers Industries 52,727 564,179
Peerless Mfg. (a,c) 158,600 1,316,380
Steelcase Cl. A 82,500 904,200
Trinity Industries (d) 20,000 379,200
VELCRO INDUSTRIES 525,800 4,811,070
Wescast Industries Cl. A 56,000 1,394,400
------------
24,355,851
------------
TOTAL (Cost $73,264,335) 100,778,299
============
INDUSTRIAL SERVICES - 12.9%
Advertising/Publishing - 0.8%
Catalina Marketing (a,d) 60,000 1,110,000
Grey Global Group 3,817 2,332,569
Interpublic Group of Companies 180,000 2,534,400
------------
5,976,969
------------
Commercial Services - 4.2%
ABM Industries 119,200 1,847,600
ALLIED WASTE INDUSTRIES (a) 594,800 5,948,000
Carlisle Holdings (a) 204,900 563,475
Central Parking 89,200 1,682,312
+Convergys Corporation (a) 144,000 2,181,600
Cornell Companies (a,d) 124,400 1,119,600
iGATE Corporation (a) 139,500 365,490
Iron Mountain (a) 127,450 4,207,125
Korn/Ferry International (a) 87,400 653,752
Learning Tree International (a,d) 53,400 731,580
MPS Group (a) 294,300 1,630,422
Manpower 55,800 1,780,020
+Metro One Telecommunications (a,d) 25,000 161,250
New Horizons Worldwide (a) 136,500 539,175
On Assignment (a) 78,800 671,376
RemedyTemp Cl. A (a) 78,500 1,099,000
+Renaissance Learning (a,d) 10,000 189,000
Spherion Corporation (a) 109,000 730,300
+TRC Companies (a,d) 52,000 682,760
TMP Worldwide (a) 149,000 1,685,190
West Corporation (a) 75,000 1,245,000
------------
29,714,027
------------
Engineering and Construction - 0.4%
Clayton Homes (d) 25,000 304,500
EMCOR Group (a) 15,000 795,150
Jacobs Engineering Group (a,d) 20,000 712,000
McDermott International (a) 71,000 310,980
Washington Group International (a) 50,000 797,500
------------
2,920,130
------------
Food/Tobacco Processors - 1.3%
FARMER BROS. 22,000 6,798,000
MGP Ingredients 321,200 2,505,360
------------
9,303,360
------------
Industrial Distribution - 1.0%
Central Steel & Wire 3,699 1,764,423
RITCHIE BROS. AUCTIONEERS (a,d) 155,200 5,020,720
------------
6,785,143
------------
Printing - 1.5%
BOWNE & CO. 383,100 4,578,045
Ennis Business Forms 62,700 728,574
Moore Corporation (a) 90,700 825,370
New England Business Service 178,300 4,350,520
------------
10,482,509
------------
Transportation and Logistics - 3.1%
Airborne 100,000 1,483,000
AirNet Systems (a) 219,000 1,077,480
Atlas Air Worldwide Holdings (a,d) 165,000 249,150
C. H. Robinson Worldwide 40,000 1,248,000
CNF 62,600 2,080,824
Continental Airlines Cl. B (a,d) 150,000 1,087,500
EGL (a) 198,525 2,828,981
+Forward Air (a) 95,000 1,843,950
Frozen Food Express Industries (a) 306,635 796,331
Hub Group Cl. A (a) 77,000 369,600
Landstar System (a,d) 35,800 2,089,288
Patriot Transportation Holding (a) 136,300 3,775,510
Pittston Brink's Group 137,278 2,536,897
UTI Worldwide (d) 45,000 1,181,250
------------
22,647,761
------------
Other Industrial Services - 0.6%
Landauer 117,900 4,097,025
Republic Services (a) 18,600 390,228
------------
4,487,253
------------
TOTAL (Cost $81,661,251) 92,317,152
============
NATURAL RESOURCES - 6.4%
Energy Services - 2.4%
Carbo Ceramics 105,600 3,558,720
ENSCO International 6,443 189,746
Global Industries (a) 119,500 498,315
Helmerich & Payne 98,400 2,746,344
Input/Output (a) 540,100 2,295,425
Precision Drilling (a) 37,500 1,220,250
Tidewater 21,600 671,760
+Universal Compression Holdings (a) 115,000 2,199,950
Willbros Group (a) 460,600 3,786,132
------------
17,166,642
------------
28
ROYCE VALUE TRUST, INC.
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SCHEDULE OF INVESTMENTS DECEMBER 31, 2002
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SHARES VALUE
------ -----
NATURAL RESOURCES (CONTINUED)
Oil and Gas - 2.0%
Tom Brown (a) 76,000 $ 1,907,600
+Cimarex Energy (a) 138,170 2,473,243
DENBURY RESOURCES (a) 402,600 4,549,380
EOG Resources (d) 5,000 199,600
Holly Corporation 20,000 437,000
Husky Energy 75,000 781,952
PetroCorp (a) 155,400 1,592,850
3TEC Energy (a) 124,200 1,762,398
Toreador Resources (a) 100,300 251,753
Vintage Petroleum 48,300 509,565
------------
14,465,341
------------
Precious Metals and Mining - 0.8%
AngloGold ADR (b) 111,900 3,833,694
+Glamis Gold (a,d) 70,000 793,800
Gold Fields ADR (b) 57,800 806,888
MK Gold (a) 517,900 220,108
------------
5,654,490
------------
Real Estate - 1.2%
Alico 52,000 1,383,200
Chelsea Property Group 55,000 1,832,050
Consolidated-Tomoka Land 13,564 261,107
Public Storage 45,000 1,453,950
Trammell Crow Company (a) 432,400 3,891,600
------------
8,821,907
------------
TOTAL (Cost $36,026,788) 46,108,380
============
TECHNOLOGY - 18.5%
Aerospace/Defense - 1.2%
Curtiss-Wright (d) 58,300 3,720,706
Ducommun (a) 182,300 2,889,455
Herley Industries (a) 30,000 522,240
Integral Systems (a) 74,800 1,499,740
------------
8,632,141
------------
Components and Systems - 5.2%
Adaptec (a) 99,500 562,175
Advanced Digital Information (a) 90,000 603,900
American Power Conversion (a,d) 231,200 3,502,680
Analogic 5,000 251,440
Cognex Corporation (a) 163,400 3,011,462
DDi Corporation (a) 20,000 4,400
Dionex (a) 96,000 2,852,160
Excel Technology (a) 168,500 3,014,465
Imation Corporation (a) 35,700 1,252,356
InFocus Corporation (a) 79,000 486,640
KEMET (a) 135,000 1,179,900
Kronos (a) 35,850 1,326,092
Newport (a,d) 102,600 1,288,656
Pemstar (a,d) 245,000 553,700
Perceptron (a) 397,400 854,410
Radiant Systems (a) 57,500 553,725
Rainbow Technologies (a) 116,900 838,173
REMEC (a) 214,200 831,096
Scitex (a) 245,700 346,437
Storage Technology (a) 90,000 1,927,800
Symbol Technologies 304,900 2,506,278
TTM Technologies (a) 280,500 928,175
TECHNITROL 285,900 4,614,426
Vishay Intertechnology (a) 73,900 826,202
Zebra Technologies Cl. A (a) 62,500 3,581,250
------------
37,697,998
------------
Distribution - 2.4%
Anixter International (a) 41,900 974,175
Arrow Electronics (a) 326,100 4,170,819
Avnet (a) 405,355 4,389,995
Benchmark Electronics (a,d) 45,400 1,301,164
Plexus (a) 269,600 2,367,088
Tech Data (a) 151,500 4,084,440
------------
17,287,681
------------
Internet Software and Services - 0.5%
CNET Networks (a) 379,400 1,028,174
CryptoLogic (a,d) 202,000 955,460
DoubleClick (a) 196,700 1,113,322
RealNetworks (a) 85,400 325,374
Vastera (a) 15,000 84,765
------------
3,507,095
------------
IT Services - 3.7%
American Management Systems (a) 331,900 3,979,481
Answerthink (a) 655,000 1,637,500
+BearingPoint (a) 340,000 2,346,000
CGI Group Cl. A (a,d) 106,700 466,279
Covansys Corporation (a) 251,600 945,513
DiamondCluster International
Cl. A (a) 233,900 734,446
Forrester Research (a) 91,500 1,424,655
Gartner Cl. A (a) 166,000 1,527,200
Keane (a) 467,000 4,198,330
MAXIMUS (a,d) 88,000 2,296,800
Perot Systems Cl. A (a) 115,100 1,233,872
QRS Corporation (a) 57,500 379,500
Sapient Corporation (a,d) 1,099,400 2,253,770
Syntel (a) 65,300 1,371,953
Unisys Corporation (a) 215,000 2,128,500
------------
26,923,799
------------
Semiconductors and Equipment - 2.2%
BE Semiconductor Industries (a) 58,000 255,200
Credence Systems (a) 10,600 98,898
Cymer (a,d) 14,500 467,625
DuPont Photomasks (a) 35,000 813,750
Electroglas (a,d) 281,700 433,818
Exar (a) 87,300 1,082,520
Fairchild Semiconductor Cl. A (a) 175,000 1,874,250
Helix Technology 51,900 581,280
+Integrated Circuit Systems (a) 140,600 2,565,950
Intevac (a) 191,850 765,482
Kulicke & Soffa Industries (a,d) 105,800 605,176
Lam Research (a) 45,000 486,000
Lattice Semiconductor (a) 264,000 2,315,280
Mentor Graphics (a) 225,700 1,774,002
National Semiconductor (a) 23,200 348,232
Novellus Systems (a) 12,000 336,960
NVIDIA Corporation (a,d) 35,000 402,850
Veeco Instruments (a,d) 65,000 751,400
------------
15,958,673
------------
Software - 1.8%
Adobe Systems 30,000 744,030
ANSYS (a,d) 45,500 919,100
Aspen Technology (a,d) 27,100 76,693
Autodesk 251,000 3,589,300
Business Objects ADR (a,d) 25,500 382,500
29
ROYCE VALUE TRUST, INC.
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SCHEDULE OF INVESTMENTS DECEMBER 31, 2002
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SHARES VALUE
------ -----
TECHNOLOGY (CONTINUED)
Software (continued)
JDA Software Group (a) 149,900 $ 1,448,034
MRO Software (a) 46,000 558,670
MSC.Software (a) 42,600 328,872
Macromedia (a) 61,600 656,040
Manugistics Group (a,d) 49,200 118,080
Novell (a) 90,000 300,600
Phoenix Technologies (a) 40,900 235,993
Progress Software (a) 50,500 653,975
SPSS (a) 107,500 1,503,925
Transaction Systems Architects
Cl. A (a) 237,300 1,542,450
------------
13,058,262
------------
Telecommunications - 1.5%
ADC Telecommunications (a) 113,000 236,170
+ADTRAN (a,d) 40,000 1,316,000
Allegiance Telecom (a,d) 2,516,700 1,686,189
+Andrew Corporation (a,d) 30,000 308,400
Globecomm Systems (a) 243,700 913,875
IDT Corporation (a) 25,000 432,250
IDT Corporation Cl. B (a) 40,000 620,400
Inet Technologies (a) 65,000 396,500
Level 3 Communications (a,d) 488,400 2,393,160
Liberty Satellite & Technology
Cl. A (a,d) 116,530 308,804
PECO II (a) 93,600 59,904
Plantronics (a) 55,100 833,663
Time Warner Telecom Cl. A (a,d) 242,000 510,620
+Tollgrade Communications (a,d) 35,500 416,415
------------
10,432,350
------------
TOTAL (Cost $161,093,372) 133,497,999
============
MISCELLANEOUS - 4.9%
TOTAL (Cost $39,674,965) 35,529,837
============
TOTAL COMMON STOCKS
(Cost $607,259,780) 677,095,675
============
PREFERRED STOCKS - 0.1%
+Aristotle Corporation 11.00% Conv. 4,800 38,160
SVB Capital I 8.25% 20,000 484,000
------------
TOTAL PREFERRED STOCKS
(Cost $531,005) 522,160
============
PRINCIPAL
AMOUNT
---------
CORPORATE BONDS - 0.2%
Dixie Group 7.00%
Conv. Sub. Deb. due 5/15/12 $ 584,000 297,840
Richardson Electronics 7.25% (c)
Conv. Sub. Deb. due 12/15/06 1,319,000 1,055,200
------------
TOTAL CORPORATE BONDS
(Cost $1,555,818) 1,353,040
============
U.S. TREASURY OBLIGATIONS - 4.3%
U.S. Treasury Notes
4.25%, due 3/31/03 25,000,000 25,185,550
+7.50%, due 2/15/05 5,000,000 5,606,640
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $30,461,424) 30,792,190
============
REPURCHASE AGREEMENT - 1.2%
State Street Bank & Trust Company,
0.50% dated 12/31/02, due 1/2/03,
maturity value $8,646,240
(collateralized by U.S. Treasury Bonds,
6.00% due 2/15/26, valued at $8,820,698)
(Cost $8,646,000) 8,646,000
============
TOTAL INVESTMENTS - 100.0%
(Cost $648,454,027) 718,409,065
CASH AND OTHER ASSETS
LESS LIABILITIES 2,366,558
PREFERRED STOCK (160,000,000)
------------
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS $560,775,623
============
--------------------------------------------------------------------------------
(a) Non-income producing.
(b) American Depository Receipt.
(c) At December 31, 2002, the Fund owned 5% or more of the Company's
outstanding voting securities thereby making the Company an Affiliated
Company as that term is defined in the Investment Company Act of 1940.
(d) A portion of these securities were on loan at December 31, 2002. Total
market value of loaned securities at December 31, 2002 was $23,072,285.
(e) A security for which market quotations are no longer readily available
represents 0.3% of investments. This security has been valued at its
fair value under procedures established by the Fund's Board of
Directors.
+ New additions in 2002.
BOLD INDICATES THE FUND'S LARGEST 20 EQUITY HOLDINGS IN TERMS OF
DECEMBER 31, 2002 MARKET VALUE.
INCOME TAX INFORMATION: The cost of total investments for Federal income tax
purposes was $652,067,259. At December 31, 2002, net unrealized appreciation for
all securities was $66,341,806, consisting of aggregate gross unrealized
appreciation of $170,833,078 and aggregate gross unrealized depreciation of
$104,491,272. The primary differences in book and tax basis cost is the timing
of the recognition of losses on securities sold and amortization of discount for
book and tax purposes.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
30
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2002
--------------------------------------------------------------------------------
ASSETS:
Investments at value (identified cost $639,808,027) $709,763,065
Repurchase agreement (at cost and value) 8,646,000
Cash 32
Collateral from brokers on securities loaned 25,147,370
Receivable for investments sold 6,380,230
Receivable for dividends and interest 1,011,806
Prepaid expenses 23,624
--------------------------------------------------------------------------------
Total Assets 750,972,127
--------------------------------------------------------------------------------
LIABILITIES:
Payable for collateral on securities loaned 25,147,370
Payable for investments purchased 3,821,040
Payable for investment advisory fee 802,926
Preferred dividends accrued but not yet declared 266,225
Accrued expenses 158,943
--------------------------------------------------------------------------------
Total Liabilities 30,196,504
--------------------------------------------------------------------------------
PREFERRED STOCK:
7.80% Cumulative Preferred Stock - $0.001 par value,
$25 liquidation value per share; 2,400,000 shares outstanding 60,000,000
7.30% Tax-Advantaged Cumulative Preferred Stock - $0.001 par
value, $25 liquidation value per share; 4,000,000 shares
outstanding 100,000,000
--------------------------------------------------------------------------------
Total Preferred Stock 160,000,000
--------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS $560,775,623
--------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:
Par value of Common Stock - $0.001 per share;
42,417,362 shares outstanding (150,000,000 shares authorized) $ 42,417
Additional paid-in capital 496,006,603
Accumulated net realized loss on investments (3,813,147)
Net unrealized appreciation on investments 69,955,038
Preferred dividends accrued but not yet declared (266,224)
--------------------------------------------------------------------------------
Net Assets applicable to Common Stockholders
(net asset value per share - $13.22) $560,775,623
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
Year ended Year ended
December 31, December 31,
2002 2001
------------ ------------
INVESTMENT OPERATIONS:
Net investment income (loss) $ (583,347) $ 2,247,245
Net realized gain on investments 62,933,497 53,961,553
Net change in unrealized appreciation
on investments (156,381,089) 46,195,029
--------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from investment operations (94,030,939) 102,403,827
--------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS:
Net investment income (581,030) (370,182)
Net realized gain on investments (11,398,970) (11,609,818)
--------------------------------------------------------------------------------
Total distributions to Preferred
Stockholders (11,980,000) (11,980,000)
--------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE
TO COMMON STOCKHOLDERS RESULTING FROM
INVESTMENT OPERATIONS (106,010,939) 90,423,827
--------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON STOCKHOLDERS:
Net investment income (2,981,664) (1,768,474)
Net realized gain on investments (58,496,049) (55,464,014)
--------------------------------------------------------------------------------
Total distributions to Common Stockholders (61,477,713) (57,232,488)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Reinvestment of distributions to Common
Stockholders 39,123,307 32,687,267
--------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
APPLICABLE TO COMMON STOCKHOLDERS (128,365,345) 65,878,606
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:
Beginning of year 689,140,968 623,262,362
--------------------------------------------------------------------------------
End of year (including undistributed net
investment income of $2,116,678 in 2001) $ 560,775,623 $689,140,968
--------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
31
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2002
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Dividends $ 7,614,855
Interest 2,842,281
--------------------------------------------------------------------------------
Total income 10,457,136
--------------------------------------------------------------------------------
Expenses:
Investment advisory fees 10,689,280
Stockholder reports 306,974
Administrative and office facilities expenses 210,877
Custody and transfer agent fees 213,265
Directors' fees 115,005
Professional fees 68,790
Other expenses 101,360
--------------------------------------------------------------------------------
Total expenses 11,705,551
Fees waived by investment advisor (665,068)
--------------------------------------------------------------------------------
Net expenses 11,040,483
--------------------------------------------------------------------------------
Net investment income (loss) (583,347)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 62,933,497
Net change in unrealized appreciation on investments (156,381,089)
--------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (93,447,592)
--------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM INVESTMENT OPERATIONS (94,030,939)
--------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS (11,980,000)
--------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS APPLICABLE TO
COMMON STOCKHOLDERS RESULTING FROM INVESTMENT OPERATIONS $(106,010,939)
--------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
32
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
This table is presented to show selected data for a share of Common Stock
outstanding throughout each period, and to assist stockholders in evaluating the
Fund's performance for the periods presented.
Years ended December 31,
------------------------------------------------------------------
2002 2001 2000 1999 1998
----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $17.31 $16.56 $15.77 $15.72 $16.91
----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income (loss) (0.02) 0.05 0.18 0.26 0.17
Net realized and unrealized gain (loss) on investments (2.25) 2.58 2.58 1.65 0.67
----------------------------------------------------------------------------------------------------------------------------------
Total investment operations (2.27) 2.63 2.76 1.91 0.84
----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS:
Net investment income (0.01) (0.01) (0.03) (0.04) (0.03)
Net realized gain on investments (0.28) (0.30) (0.30) (0.32) (0.26)
----------------------------------------------------------------------------------------------------------------------------------
Total distributions to Preferred Stockholders (0.29) (0.31) (0.33) (0.36) (0.29)
----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO
COMMON STOCKHOLDERS RESULTING FROM INVESTMENT OPERATIONS (2.56) 2.32 2.43 1.55 0.55
----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON STOCKHOLDERS:
Net investment income (0.07) (0.05) (0.13) (0.15) (0.16)
Net realized gain on investments (1.44) (1.44) (1.35) (1.22) (1.38)
----------------------------------------------------------------------------------------------------------------------------------
Total distributions to Common Stockholders (1.51) (1.49) (1.48) (1.37) (1.54)
----------------------------------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Effect of reinvestment of distributions by Common Stockholders (0.02) (0.08) (0.16) (0.13) (0.09)
Effect of Preferred Stock offering - - - - (0.11)
----------------------------------------------------------------------------------------------------------------------------------
Total capital stock transactions (0.02) (0.08) (0.16) (0.13) (0.20)
----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.22 $17.31 $16.56 $15.77 $15.72
----------------------------------------------------------------------------------------------------------------------------------
MARKET VALUE, END OF PERIOD $13.25 $15.72 $14.438 $13.063 $13.75
----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (a):
Market Value (6.9)% 20.0% 22.7% 5.7% 1.5%
Net Asset Value (15.6)% 15.2% 16.6% 11.7% 3.3%
RATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO
COMMON STOCKHOLDERS:
Total expenses (b,c) 1.72% 1.61% 1.43% 1.39% 1.31%
Management fee expense 1.56% 1.45% 1.25% 1.18% 1.10%
Other operating expenses 0.16% 0.16% 0.18% 0.21% 0.21%
Net investment income (loss) (0.09)% 0.35% 1.18% 1.47% 1.11%
SUPPLEMENTAL DATA:
Net Assets Applicable to Common Stockholders,
End of Period (in thousands) $560,776 $689,141 $623,262 $552,928 $516,963
Liquidation Value of Preferred Stock, End of Period
(in thousands) $160,000 $160,000 $160,000 $160,000 $160,000
Portfolio Turnover Rate 35% 30% 36% 41% 43%
PREFERRED STOCK:
Total shares outstanding 6,400,000 6,400,000 6,400,000 6,400,000 6,400,000
Asset coverage per share $112.62 $132.68 $122.38 $111.40 $105.78
Liquidation preference per share $25.00 $25.00 $25.00 $25.00 $25.00
Average market value per share:
7.80% Cumulative (d) $26.37 $25.70 $23.44 $24.98 $25.91
7.30% Tax-Advantaged Cumulative (d) $25.82 $25.37 $22.35 $24.24 $25.43
----------------------------------------------------------------------------------------------------------------------------------
(a) The Market Value Total Return is calculated assuming a purchase of Common
Stock on the opening of the first business day and a sale on the closing of
the last business day of each period reported. Dividends and distributions,
if any, are assumed for the purposes of this calculation, to be reinvested
at prices obtained under the Fund's Distribution Reinvestment and Cash
Purchase Plan. Net Asset Value Total Return is calculated on the same basis,
except that the Fund's net asset value is used on the purchase and sale
dates instead of market value.
(b) Expense ratios based on total average net assets including liquidation value
of Preferred Stock were 1.38%, 1.30%, 1.12%, 1.06% and 1.06% for the periods
ended December 31, 2002, 2001, 2000, 1999 and 1998, respectively.
(c) Expense ratios based on average net assets applicable to Common Stockholders
before waiver of fees by the investment adviser would have been 1.82%,
1.65%, 1.51%, 1.48% and 1.34% for the periods ended December 31, 2002, 2001,
2000, 1999 and 1998, respectively.
(d) The average of month-end market values during the period.
33
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Royce Value Trust, Inc. ("the Fund") was incorporated under the laws
of the State of Maryland on July 1, 1986 as a diversified closed-end
investment company. The Fund commenced operations on November 26, 1986.
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 the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
VALUATION OF INVESTMENTS:
Securities listed on an exchange or on the Nasdaq National Market
System (NMS) are valued on the basis of the last reported sale prior to
the time the valuation is made or, if no sale is reported for such day,
at their bid price for exchange-listed securities and at the average of
their bid and asked prices for Nasdaq NMS securities. Quotations are
taken from the market where the security is primarily traded. Other
over-the-counter securities for which market quotations are readily
available are valued at their bid price. Securities for which market
quotations are not readily available are valued at their fair value under
procedures established by the Fund's Board of Directors. Bonds and other
fixed income securities may be valued by reference to other securities
with comparable ratings, interest rates and maturities, using established
independent pricing services.
INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME:
Investment transactions are accounted for on the trade date. Dividend
income is recorded on the ex-dividend date and any non-cash dividend
income is recorded at the fair market value of the securities received.
Interest income is recorded on the accrual basis. Realized gains and
losses from investment transactions are determined on the basis of
identified cost for book and tax purposes.
EXPENSES:
The Fund incurs direct and indirect expenses. Expenses directly
attributable to the Fund are charged to the Fund's operations, while
expenses applicable to more than one of the Royce Funds are allocated in
an equitable manner. Allocated personnel and occupancy costs related to
The Royce Funds are included in administrative and office facilities
expenses. The Fund has adopted a deferred fee agreement that allows the
Fund's Directors to defer the receipt of all or a portion of Directors'
Fees otherwise payable. The deferred fees remain invested in certain
Royce Funds until distributed in accordance with the agreement.
TAXES:
As a qualified regulated investment company under Subchapter M of the
Internal Revenue Code, the Fund is not subject to income taxes to the
extent that it distributes substantially all of its taxable income for
its fiscal year. The Schedule of Investments includes information
regarding income taxes under the caption "Income Tax Information".
DISTRIBUTIONS:
The Fund currently has a policy of paying quarterly distributions on
the Fund's Common Stock. Distributions are currently being made at the
annual rate of 9% of the rolling average of the prior four calendar
quarter-end NAVs of the Fund's Common Stock, with the fourth quarter
distribution being the greater of 2.25% of the rolling average or the
distribution required by IRS regulations. Distributions to Preferred
Stockholders are recorded on an accrual basis and paid quarterly.
Distributions are determined in accordance with income tax regulations
that may differ from accounting principles generally accepted in the
United States of America. Permanent book and tax basis differences
relating to stockholder distributions will result in reclassifications
within the capital accounts. Undistributed net investment income may
include temporary book and tax basis differences, which will reverse in a
subsequent period. Any taxable income or gain remaining undistributed at
fiscal year end is distributed in the following year.
REPURCHASE AGREEMENTS:
The Fund enters into repurchase agreements with respect to its
portfolio securities solely with State Street Bank and Trust Company
("SSB&T"), the custodian of its assets. The Fund restricts repurchase
agreements to maturities of no more than seven days. Securities pledged
as collateral for repurchase agreements, which are held by SSB&T until
maturity of the repurchase agreements, are marked-to-market daily and
maintained at a value at least equal to the principal amount of the
repurchase agreement (including accrued interest). Repurchase agreements
could involve certain risks in the event of default or insolvency of
SSB&T, including possible delays or restrictions upon the ability of the
Fund to dispose of the underlying securities.
34
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
2. SECURITIES LENDING:
The Fund loans securities to qualified institutional investors for the
purpose of realizing additional income. This income is included in interest
income. Collateral on all securities loaned for the Fund is accepted in cash
and is invested temporarily, typically, and specifically at December 31,
2002, in a registered money market fund, by the custodian. The collateral is
equal to at least 100% of the current market value of the loaned securities.
3. CAPITAL STOCK:
The Fund currently has two issues of Preferred Stock outstanding: 7.80%
Cumulative Preferred Stock and 7.30% Tax-Advantaged Cumulative Preferred
Stock. Both issues of Preferred Stock have a liquidation preference of
$25.00 per share.
Under the Investment Company Act of 1940, the Fund is required to
maintain an asset coverage of at least 200% for the Preferred Stock. In
addition, pursuant to the Rating Agency Guidelines established by Moody's,
the Fund is required to maintain a certain discounted asset coverage. The
Fund has met these requirements since issuing Preferred Stock.
The Fund is required to allocate long-term capital gain distributions
and other types of income proportionately to distributions made to holders
of shares of Common Stock and Preferred Stock. To the extent that
distributions are not paid from long-term capital gains, net investment
income or net short-term capital gains, they will represent a return of
capital. The Fund issued 2,615,641 and 2,167,201 shares of Common Stock as
reinvestment of distributions by Common Stockholders for the years ended
December 31, 2002 and 2001, respectively.
4. INVESTMENT ADVISORY AGREEMENT:
As compensation for its services under the Investment Advisory
Agreement, Royce & Associates, LLC ("Royce") receives a fee comprised of a
Basic Fee ("Basic Fee") and an adjustment to the Basic Fee based on the
investment performance of the Fund in relation to the investment record of
the S&P 600 SmallCap Index ("S&P 600").
The Basic Fee is a monthly fee equal to 1/12 of 1% (1% on an annualized
basis) of the average of the Fund's month-end net assets attributable to
common stockholders plus liquidation value of Preferred Stock for the
rolling 60-month period ending with such month. The Basic Fee for each month
is increased or decreased at the rate of 1/12 of .05% for each percentage
point that the investment performance of the Fund exceeds, or is exceeded
by, the percentage change in the investment record of the S&P 600 for the
performance period by more than two percentage points. The maximum increase
or decrease in the Basic Fee for any month may not exceed 1/12 of .5%.
Accordingly, for each month, the maximum monthly fee rate as adjusted for
performance is 1/12 of 1.5% and is payable if the investment performance of
the Fund exceeds the percentage change in the investment record of the S&P
600 by 12 or more percentage points for the performance period, and the
minimum monthly fee rate as adjusted for performance is 1/12 of .5% and is
payable if the percentage change in the investment record of the S&P 600
exceeds the investment performance of the Fund by 12 or more percentage
points for the performance period.
Notwithstanding the foregoing, Royce is not entitled to receive any fee
for any month when the investment performance of the Fund for the rolling
36-month period ending with such month is negative. In the event that the
Fund's investment performance for such a performance period is less than
zero, Royce will not be required to refund to the Fund any fee earned in
respect of any prior performance period. Royce has voluntarily committed to
waive the portion of its investment advisory fee attributable to an issue of
the Fund's Preferred Stock for any month in which the Fund's average annual
NAV total return since issuance of the Preferred Stock fails to exceed the
applicable Preferred Stock dividend rate. For the year ended December 31,
2002, the Fund accrued and paid Royce advisory fees totaling $10,024,212,
which is net of $665,068 voluntarily waived by Royce.
5. DISTRIBUTIONS TO STOCKHOLDERS:
The tax character of distributions paid to stockholders during 2002 and
2001 was as follows:
---------------------------------------------------------------------
Distributions paid from: 2002 2001
---- ----
Ordinary income $ 6,028,029 16,631,761
Long-term capital gain 67,429,684 52,580,727
---------- ----------
$73,457,713 $69,212,488
=========== ===========
---------------------------------------------------------------------
As of December 31, 2002, the tax basis components of distributable
earnings included in stockholders' equity were as follows:
----------------------------------------------
Post October Loss $ (199,915)
Unrealized appreciation 66,341,806
Accrued preferred distributions (266,224)
-----------
$65,875,667
===========
----------------------------------------------
35
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
6. PURCHASES AND SALES OF INVESTMENT SECURITIES:
For the year ended December 31, 2002, the cost of purchases and
proceeds from sales of investment securities, other than short-term
securities, amounted to $290,458,749 and $274,219,404, respectively.
7. TRANSACTIONS IN SHARES OF AFFILIATED COMPANIES:
An "Affiliated Company", as defined in the Investment Company Act of
1940, is a company in which a Fund owns 5% or more of the company's
outstanding voting securities. The Fund effected the following
transactions in shares of such companies during the year ended December
31, 2002:
------------------------------------------------------------------------------------------------------------------------------------
Purchases Sales
------------------- --------------------
Affiliated Company Shares Cost Shares Cost Realized Gain (Loss) Dividend Income
------------------ ------ ---- ------ ---- -------------------- ---------------
Open Plan Systems -- -- 376,000 $ 927,874 $ (924,114) --
PCD 5,300 $ 2,756 482,900 2,705,721 (2,659,433) --
Patriot Transportation Holdings -- -- 30,000 558,200 100,805 --
Peerless Mfg. -- -- -- -- -- --
Richardson Electronics 10,000 106,750 190,300 1,375,899 (190,330) $22,036
Richardson Electronics
7.25% Conv. due 12/15/06 -- -- -- -- -- --
RockShox -- -- 1,141,400 537,508 (69,534) --
------------------------------------------------------------------------------------------------------------------------------------
8. PREFERRED STOCK PRESENTATION
To reflect recent accounting guidance from the Securities and
Exchange Commission, the Statement of Assets and Liabilities has been
modified to present the liquidation value of Preferred Stock below
Liabilities and above Net Assets Applicable to Common Stockholders. As
revised, Preferred Stock is no longer included as a component of net
assets of the Fund. Likewise, the Statement of Operations, the Statement
of Changes in Net Assets, and the Financial Highlights have been revised
to show distributions to Preferred Stockholders as a component of the net
decrease in net assets applicable to Common Stockholders resulting from
investment operations. These modifications do not change the amount of
net assets applicable to Common Stockholders, the net asset value per
share of Common Stock, or the total return per share of Common Stock.
36
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF ROYCE VALUE TRUST, INC.
We have audited the accompanying statement of assets and liabilities of Royce
Value Trust, Inc., including the schedule of investments, as of December 31,
2002, and the related statement of operations for the year then ended, and the
statement of changes in net assets for the two years in the period then ended
and the 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 audit in accordance with generally accepted auditing
standards. 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 and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 2002, by correspondence with the custodian
and brokers. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above and audited by us present fairly, in all material respects, the financial
position of Royce Value Trust, Inc. at December 31, 2002, 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 generally accepted
accounting principles.
TAIT, WELLER & BAKER
Philadelphia, PA
January 15, 2003, except for Note 8, as to which the date is
September 12, 2003.
37
ITEM 2: CODE(S) OF ETHICS - NOT APPLICABLE TO THIS AMENDED ANNUAL REPORT.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT - NOT APPLICABLE TO THIS AMENDED ANNUAL
REPORT.
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT APPLICABLE TO THIS AMENDED
ANNUAL REPORT.
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS. NOT APPLICABLE TO THIS AMENDED
ANNUAL REPORT.
ITEM 6: RESERVED.
ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES -
In June 2003, in response to rules adopted by the Commission, Royce
adopted written proxy voting policies and procedures (the "Proxy Voting
Procedures") for itself, the Fund, and all The Royce Funds and clients accounts
for which Royce is responsible for voting proxies. The Board of Directors of the
Fund has delegated all proxy voting decisions to Royce. In voting proxies, Royce
is guided by general fiduciary principles. Royce's goal is to act prudently,
solely in the best interest of the beneficial owners of the accounts it manages.
Royce attempts to consider all factors of its vote that could affect the value
of the investment and will vote proxies in the manner it believes will be
consistent with efforts to enhance and/or protect stockholder value.
Royce personnel are responsible for monitoring receipt of all proxies
and ensuring that proxies are received for all securities for which Royce has
proxy voting responsibility. Royce divides proxies into "regularly recurring"
and "non-regularly recurring" matters. Examples of regularly recurring matters
include non-contested elections of directors and non-contested approvals of
independent auditors. Regularly recurring matters are usually voted as
recommended by the issuer's board of directors or management. Non-regularly
recurring matters are brought to the attention of portfolio manager(s) for the
applicable account(s) and, after giving consideration to advisories provided by
an independent third party research firm, the portfolio manager(s) directs that
such matters be voted in a way that he believes should better protect or enhance
the value of the investment. If the portfolio manager determines that
information relating to a proxy requires additional analysis, is missing, or is
incomplete, the portfolio manager will give the proxy to an analyst or another
portfolio manager for review and analysis. Under certain circumstances, Royce
may vote against a proposal from the issuer's board of directors or management.
Royce's portfolio managers decide these issues on a case-by-case basis. A Royce
portfolio manager may, on occasion, decide to abstain from voting a proxy or a
specific proxy item when such person concludes that the potential benefit of
voting is outweighed by the cost or when it is not in the client's best interest
to vote.
In furtherance of Royce's goal to vote proxies in the best interests of
its clients, Royce follows specific procedures outlined in the Proxy Voting
Procedures to identify, assess and address material conflicts that may arise
between Royce's interests and those of its clients before voting proxies on
behalf of such clients. In the event such a material conflict of interest is
identified, the proxy will be voted by Royce in accordance with the
recommendation given by an independent third party research firm.
ITEM 8: RESERVED.
ITEM 9: CONTROLS AND PROCEDURES.
(a) Disclosure Controls and Procedures. The Principal Executive and Financial
Officers concluded that the Registrant's Disclosure Controls and Procedures are
effective based on their evaluation of the Disclosure Controls and Procedures as
of a date within 90 days of the filing date of this amended report.
(b) Internal Controls. There were no significant changes in Registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
ITEM 10: EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)
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.
ROYCE VALUE TRUST, INC.
BY: /s/ Charles M. Royce
CHARLES M. ROYCE
PRESIDENT
Date: October 1, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this amended report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
ROYCE VALUE TRUST, INC.
BY: /s/ Charles M. Royce
CHARLES M. ROYCE
PRESIDENT
Date: October 1, 2003
ROYCE VALUE TRUST, INC.
BY: /s/ John D. Diederich
JOHN D. DIEDERICH
CHIEF FINANCIAL OFFICER
Date: October 1, 2003