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, 2003 - June 30, 2003
ITEM 1: REPORTS TO SHAREHOLDERS
ROYCE VALUE TRUST, INC.
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SCHEDULE OF INVESTMENTS JUNE 30, 2003 (UNAUDITED)
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COMMON STOCKS - 91.1%
SHARES VALUE
------ -----
CONSUMER PRODUCTS - 7.0%
Apparel and Shoes - 2.5%
Jones Apparel Group (a) 81,500 $ 2,384,690
K-Swiss Cl. A 119,000 4,107,880
Nautica Enterprises (a) 83,700 1,073,871
Oshkosh B'Gosh Cl. A 104,300 2,816,100
Polo Ralph Lauren Cl. A 150,000 3,868,500
Timberland Company Cl. A (a) 10,000 528,600
WEYCO GROUP 112,664 5,183,671
Wolverine World Wide 94,400 1,818,144
---------------
21,781,456
---------------
Collectibles - 0.2%
The Boyds Collection (a) 234,200 1,103,082
Enesco Group (a) 117,200 867,280
---------------
1,970,362
---------------
Food/Beverage/Tobacco - 0.6%
800 JR Cigar (a,e) 172,400 2,241,200
Hain Celestial Group (a) 37,800 604,422
Hershey Creamery 709 1,772,500
Lancaster Colony 16,900 653,354
---------------
5,271,476
---------------
Home Furnishing/Appliances - 1.1%
Bassett Furniture Industries 116,675 1,549,444
Falcon Products (a,c) 782,600 3,310,398
La-Z-Boy (d) 68,200 1,526,316
Lifetime Hoan (d) 295,327 2,250,392
Natuzzi ADR (b) 62,200 498,844
---------------
9,135,394
---------------
Publishing - 0.5%
Martha Stewart Living Omnimedia Cl. A (a,d) 6,000 56,340
Scholastic Corporation (a) 130,000 3,871,400
---------------
3,927,740
---------------
Sports and Recreation - 0.7%
Callaway Golf 35,000 462,700
Coachmen Industries 67,700 809,015
Fleetwood Enterprises (a,d) 234,300 1,733,820
Monaco Coach (a) 141,050 2,162,296
Thor Industries 22,100 902,122
---------------
6,069,953
---------------
Other Consumer Products - 1.4%
Blyth 54,700 1,487,840
Burnham Corporation Cl. B 18,000 859,500
Fossil (a) 15,000 353,400
Lazare Kaplan International (a) 103,600 600,880
Matthews International Cl. A 196,000 4,852,960
Oakley (a) 243,100 2,861,287
Scotts (The) Cl. A (a) 20,000 990,000
---------------
12,005,867
---------------
TOTAL (Cost $42,721,425) 60,162,248
===============
CONSUMER SERVICES - 5.1%
Leisure/Entertainment - 0.5%
Ascent Media Group Cl. A (a,d) 380,900 472,316
Corus Entertainment Cl. B (a,d) 22,000 370,920
Gemstar-TV Guide International (a) 215,100 1,094,859
Hasbro 50,000 874,500
Magna Entertainment Cl. A (a) 198,800 994,000
Shuffle Master (a,d) 5,000 146,950
TiVo (a) 17,000 209,950
---------------
4,163,495
---------------
Restaurants/Lodgings - 1.4%
Benihana Cl. A (a,d) 57,500 759,000
CEC Entertainment (a) 30,000 1,107,900
Four Seasons Hotels (d) 80,000 3,460,800
IHOP CORPORATION (d) 161,700 5,104,869
Jack in the Box (a) 10,000 223,000
Prime Hospitality (a,d) 106,100 711,931
Ryan's Family Steak Houses (a,d) 48,900 684,600
---------------
12,052,100
---------------
Retail Stores - 2.3%
Big Lots (a) 307,200 4,620,288
Charming Shoppes (a,d) 803,400 3,992,898
Claire's Stores 127,700 3,238,472
Payless ShoeSource (a) 289,600 3,620,000
Stein Mart (a) 192,800 1,154,872
Urban Outfitters (a,d) 83,800 3,008,420
---------------
19,634,950
---------------
Other Consumer Services - 0.9%
ITT Educational Services (a) 120,000 3,510,000
Sotheby's Holdings Cl. A (a,d) 540,200 4,019,088
Strayer Education 10,000 794,500
---------------
8,323,588
---------------
TOTAL (Cost $42,102,506) 44,174,133
===============
FINANCIAL INTERMEDIARIES - 9.3%
Banking - 2.3%
BOK Financial (a) 125,561 4,842,888
Farmers & Merchants Bank of Long Beach 1,266 4,665,210
First National Bank Alaska 2,130 3,197,130
Mechanics Bank 200 3,500,000
Mercantile Bankshares 20,000 787,600
NetBank 70,000 921,200
Oriental Financial Group 79,750 2,048,777
---------------
19,962,805
---------------
Insurance - 6.3%
Argonaut Group (a) 187,000 2,305,710
ERIE INDEMNITY COMPANY CL. A 169,900 7,008,375
Everest Re Group 12,600 963,900
Fidelity National Financial 12,843 395,051
First American 31,700 835,295
Leucadia National 51,500 1,911,680
Markel Corporation (a) 4,200 1,075,200
Montpelier Re Holdings (a) 53,000 1,674,800
NYMAGIC 85,200 1,726,152
Navigators Group (a) 83,200 2,481,024
PICO Holdings (a) 154,300 2,005,900
PMA Capital Cl. A (d) 231,700 2,912,469
PXRE Group 176,551 3,495,710
Philadelphia Consolidated Holding (a) 35,000 1,414,000
The Phoenix Companies (d) 81,900 739,557
PROASSURANCE CORPORATION (a) 202,070 5,453,869
RLI 118,724 3,906,020
Reinsurance Group of America (d) 30,000 963,000
Trenwick Group (a,d) 212,260 65,801
Wesco Financial 9,850 3,073,200
38
ROYCE VALUE TRUST, INC.
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SCHEDULE OF INVESTMENTS JUNE 30, 2003 (UNAUDITED)
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SHARES VALUE
------ -----
FINANCIAL INTERMEDIARIES (CONTINUED)
Insurance (continued)
WHITE MOUNTAINS INSURANCE GROUP (d) 16,900 $ 6,675,500
Zenith National Insurance (d) 106,900 3,046,650
---------------
54,128,863
---------------
Securities Brokers - 0.6%
E*TRADE Group (a) 575,000 4,887,500
Knight Trading Group (a) 115,000 715,300
---------------
5,602,800
---------------
Other Financial Intermediaries - 0.1%
Chicago Mercantile Exchange (d) 10,000 696,300
---------------
TOTAL (Cost $50,876,045) 80,390,768
===============
FINANCIAL SERVICES - 6.2%
Information and Processing - 2.1%
BARRA (a) 42,200 1,506,540
eFunds Corporation (a) 167,675 1,933,293
FACTSET RESEARCH SYSTEMS (d) 140,000 6,167,000
Fair Isaac 5,190 267,025
Global Payments 61,500 2,183,250
Moody's Corporation 50,000 2,635,500
National Processing (a,d) 20,000 321,600
SEI Investments 93,200 2,982,400
---------------
17,996,608
---------------
Insurance Brokers - 1.0%
Brown & Brown 20,000 650,000
Crawford & Co. Cl. A 297,350 1,442,147
Crawford & Co. Cl. B 75,300 369,723
Gallagher (Arthur J.) & Company 106,200 2,888,640
Hilb, Rogal & Hamilton 105,550 3,592,922
---------------
8,943,432
---------------
Investment Management - 2.7%
Affiliated Managers Group (a,d) 60,000 3,657,000
Alliance Capital Management Holding L.P. 139,000 5,073,500
BKF Capital Group (a) 94,000 2,052,020
BlackRock Cl. A (a,d) 35,000 1,576,400
Eaton Vance 80,200 2,534,320
Federated Investors Cl. B 35,000 959,700
Neuberger Berman (d) 105,000 4,190,550
Nuveen Investments Cl. A 119,200 3,247,008
---------------
23,290,498
---------------
Other Financial Services - 0.4%
PRG-Schultz International (a,d) 284,200 1,676,780
Van der Moolen Holding ADR (b) 119,000 1,642,200
---------------
3,318,980
---------------
TOTAL (Cost $37,351,067) 53,549,518
===============
HEALTH - 8.1%
Commercial Services - 1.5%
IDEXX Laboratories (a) 104,100 3,506,088
PAREXEL International (a,d) 277,700 3,873,915
Pharmaceutical Product Development (a) 10,000 287,300
Quintiles Transnational (a) 130,300 1,848,957
Sybron Dental Specialties (a,d) 21,000 495,600
The TriZetto Group (a) 190,200 1,148,808
Young Innovations (a) 77,550 2,210,175
---------------
13,370,843
---------------
Drugs and Biotech - 2.3%
Abgenix (a,d) 38,000 398,620
Affymetrix (a,d) 96,600 $ 1,903,986
Antigenics (a,d) 38,500 443,520
Applera Corporation - Celera
Genomics Group (a) 199,200 2,055,744
Biopure Corporation Cl. A (a,d) 43,200 263,952
BioSource International (a) 1,600 11,040
Celgene Corporation (a) 40,000 1,216,000
Cephalon (a) 4,900 201,684
Cerus Corporation (a) 21,700 163,401
Chiron Corporation (a) 21,800 953,096
DUSA Pharmaceuticals (a) 79,700 200,047
Endo Pharmaceuticals Holdings (a) 120,000 2,030,400
Genzyme Corporation - General Division (a) 28,000 1,170,400
Human Genome Sciences (a) 90,000 1,144,800
IDEC Pharmaceuticals (a,d) 28,100 955,400
Invitrogen Corporation (a) 40,000 1,534,800
Lexicon Genetics (a) 256,200 1,719,102
Millennium Pharmaceuticals (a) 50,000 786,500
Perrigo Company 169,900 2,657,236
Shire Pharmaceuticals Group ADR (a,b) 20,853 410,804
---------------
20,220,532
---------------
Health Services - 1.3%
Accredo Health (a) 8,705 189,769
Albany Molecular Research (a) 65,000 981,500
First Consulting Group (a) 315,900 1,475,253
Gene Logic (a,d) 138,100 824,457
Gentiva Health Services (a) 30,150 271,350
Health Management Associates Cl. A 27,400 505,530
+IMPATH (a,d) 93,000 1,315,020
Lincare Holdings (a) 24,600 775,146
Manor Care (a) 58,300 1,458,083
MedQuist (a) 73,893 1,495,594
On Assignment (a) 293,200 1,172,800
Quovadx (a) 168,400 503,516
---------------
10,968,018
---------------
Personal Care - 0.6%
Ocular Sciences (a,d) 177,500 3,523,375
Regis 57,200 1,661,660
---------------
5,185,035
---------------
Surgical Products and Devices - 2.4%
Allied Healthcare Products (a) 60,000 214,200
ARROW INTERNATIONAL 151,100 6,671,065
CONMED Corporation (a) 38,500 703,010
Datascope 34,000 1,009,460
Diagnostic Products 25,000 1,026,250
Haemonetics (a) 92,900 1,737,230
Invacare 100,000 3,300,000
Novoste (a) 66,500 399,000
STERIS (a) 48,600 1,122,174
Varian Medical Systems (a) 60,800 3,500,256
Zoll Medical (a) 20,200 677,912
---------------
20,360,557
---------------
TOTAL (Cost $60,623,736) 70,104,985
===============
INDUSTRIAL PRODUCTS - 13.4%
Building Systems and Components - 1.1%
Decker Manufacturing 6,022 198,726
Preformed Line Products Company 131,600 1,928,598
SIMPSON MANUFACTURING (a,d) 190,400 6,968,640
---------------
9,095,964
---------------
39
ROYCE VALUE TRUST, INC.
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SCHEDULE OF INVESTMENTS JUNE 30, 2003 (UNAUDITED)
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SHARES VALUE
------ -----
INDUSTRIAL PRODUCTS (CONTINUED)
Construction Materials - 1.8%
ASH GROVE CEMENT COMPANY CL. B 50,518 $ 5,961,124
ElkCorp 25,000 562,500
FLORIDA ROCK INDUSTRIES 153,800 6,348,864
Oregon Steel Mills (a) 247,900 718,910
Synalloy Corporation (a,c) 345,000 1,873,350
---------------
15,464,748
---------------
Industrial Components - 1.8%
Bel Fuse Cl. A 53,200 1,090,600
Belden (d) 95,800 1,522,262
C & D Technologies 50,000 718,000
Donaldson Company 26,000 1,155,700
Kaydon Corporation 171,200 3,560,960
Penn Engineering & Manufacturing 251,600 3,434,340
Penn Engineering & Manufacturing Cl. A 77,600 942,064
PerkinElmer 135,000 1,864,350
Powell Industries (a) 57,400 840,336
Woodhead Industries 45,400 568,408
---------------
15,697,020
---------------
Machinery - 3.5%
Cognex Corporation (a) 163,400 3,651,990
COHERENT (a) 233,700 5,534,016
Federal Signal (d) 58,600 1,029,602
Graco 26,550 849,600
Lincoln Electric Holdings 237,880 4,855,131
National Instruments (a,d) 41,100 1,552,758
Nordson Corporation 172,200 4,106,970
Oshkosh Truck 13,000 771,160
PAXAR Corporation (a) 370,100 4,071,100
Woodward Governor 83,600 3,594,800
---------------
30,017,127
---------------
Paper and Packaging - 0.4%
Peak International (a) 408,400 1,816,972
Sealed Air (a) 34,000 1,620,440
---------------
3,437,412
---------------
Pumps, Valves and Bearings - 0.7%
Baldor Electric 62,900 1,295,740
ConBraCo Industries 7,630 587,510
Denison International ADR (a,b) 79,400 1,528,450
Franklin Electric 23,600 1,313,340
NN 127,100 1,609,086
---------------
6,334,126
---------------
Specialty Chemicals and Materials - 1.2%
Arch Chemicals 38,200 729,620
CFC International (a) 123,500 666,900
Commercial Metals 5,000 88,950
Hawkins 301,278 3,018,806
MACDERMID 211,631 5,565,895
---------------
10,070,171
---------------
Textiles - 0.4%
Fab Industries (a) 209,800 1,930,160
Unifi (a) 285,100 1,767,620
---------------
3,697,780
---------------
Other Industrial Products - 2.5%
BHA Group Holdings 187,252 3,709,462
Brady Corporation Cl. A 129,400 4,315,490
Diebold 100,000 4,325,000
IMPCO Technologies (a) 15,500 95,480
KIMBALL INTERNATIONAL CL. B 334,880 5,224,128
Maxwell Technologies (a,d) 21,500 123,840
Myers Industries 52,727 500,907
Peerless Mfg. (a,c) 158,600 1,752,530
Quantum Fuel Systems Technologies
Worldwide (a,d) 15,500 34,565
Steelcase Cl. A (d) 82,500 970,200
Trinity Industries (d) 20,000 370,200
---------------
21,421,802
---------------
TOTAL (Cost $83,669,214) 115,236,150
===============
INDUSTRIAL SERVICES - 13.4%
Advertising/Publishing - 0.7%
Catalina Marketing (a,d) 60,000 1,059,000
Cordiant Communications Group ADR (a,b) 100,000 28,000
Grey Global Group 3,817 2,948,671
Interpublic Group of Companies (a) 155,000 2,073,900
---------------
6,109,571
---------------
Commercial Services - 5.0%
ABM Industries (d) 119,200 1,835,680
ALLIED WASTE INDUSTRIES (a) 569,800 5,726,490
Carlisle Holdings (a) 204,900 676,170
Central Parking (d) 171,400 2,118,504
Convergys Corporation (a) 156,000 2,496,000
Core Laboratories (a) 125,200 1,352,160
Cornell Companies (a) 124,400 1,883,416
Covance (a) 132,700 2,401,870
Hewitt Associates Cl. A (a) 40,000 942,000
+Hudson Highland Group (a,d) 11,174 212,418
iGATE Corporation (a) 144,500 501,415
Iron Mountain (a) 127,450 4,727,120
Korn/Ferry International (a) 189,400 1,534,140
Learning Tree International (a,d) 53,400 834,642
MPS Group (a) 539,300 3,710,384
Manpower 55,800 2,069,622
Metro One Telecommunications (a,d) 25,000 129,000
Monster Worldwide (a) 149,000 2,939,770
New Horizons Worldwide (a) 136,500 584,220
RemedyTemp Cl. A (a,d) 78,500 724,555
Renaissance Learning (a,d) 10,000 219,000
Spherion Corporation (a) 109,000 757,550
TRC Companies (a,d) 53,000 782,280
United Stationers (a) 23,000 831,910
Wackenhut Corrections (a) 21,100 289,281
Watson Wyatt & Company Holdings Cl. A (a) 45,000 1,043,100
West Corporation (a) 75,000 1,998,750
---------------
43,321,447
---------------
Engineering and Construction - 0.5%
EMCOR Group (a) 15,000 740,400
Jacobs Engineering Group (a) 20,000 843,000
McDermott International (a) 71,000 449,430
Washington Group International (a) 100,000 2,196,000
---------------
4,228,830
---------------
Food/Tobacco Processors - 0.9%
FARMER BROS. 15,000 5,089,350
MGP Ingredients 321,200 2,805,682
---------------
7,895,032
---------------
40
ROYCE VALUE TRUST, INC.
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SCHEDULE OF INVESTMENTS JUNE 30, 2003 (UNAUDITED)
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SHARES VALUE
------ -----
INDUSTRIAL SERVICES (CONTINUED)
Industrial Distribution - 1.1%
Central Steel & Wire 3,699 $ 1,387,125
RITCHIE BROS. AUCTIONEERS (a) 155,200 5,976,752
Strategic Distribution (a) 115,000 1,870,015
---------------
9,233,892
---------------
Printing - 1.5%
Bowne & Co. 383,100 4,991,793
Ennis Business Forms 62,700 912,285
Moore Wallace (a) 90,700 1,331,476
NEW ENGLAND BUSINESS SERVICE 178,300 5,349,000
---------------
12,584,554
---------------
Transportation and Logistics - 3.1%
Airborne 100,000 2,090,000
AirNet Systems (a) 219,000 886,950
Atlas Air Worldwide Holdings (a,d) 210,000 308,700
Brink's Company (The) 137,278 2,000,140
C. H. Robinson Worldwide 40,000 1,422,400
CNF 62,600 1,588,788
Continental Airlines Cl. B (a,d) 150,000 2,245,500
EGL (a,d) 198,525 3,017,580
Forward Air (a,d) 148,000 3,754,760
Frozen Food Express Industries (a) 306,635 968,967
Hub Group Cl. A (a) 77,000 676,060
Landstar System (a) 33,800 2,124,330
Patriot Transportation Holding (a) 136,300 3,842,297
UTI Worldwide 45,000 1,403,550
---------------
26,330,022
---------------
Other Industrial Services - 0.6%
Landauer 117,900 4,931,757
Republic Services (a) 18,600 421,662
---------------
5,353,419
---------------
TOTAL (Cost $90,768,813) 115,056,767
===============
NATURAL RESOURCES - 6.6%
Energy Services - 2.7%
Carbo Ceramics (d) 105,600 3,933,600
ENSCO International 6,443 173,317
Global Industries (a) 119,500 575,990
Hanover Compressor Company (a) 175,000 1,977,500
Helmerich & Payne 98,400 2,873,280
Input/Output (a) 540,100 2,905,738
Precision Drilling (a) 37,500 1,416,000
TETRA Technologies (a) 49,000 1,452,850
Tidewater 21,600 634,392
Universal Compression Holdings (a) 115,000 2,398,900
Willbros Group (a) 485,600 5,045,384
---------------
23,386,951
---------------
Oil and Gas - 2.0%
Tom Brown (a) 76,000 2,112,040
+Chesapeake Energy (d) 73,000 737,300
Cimarex Energy (a) 138,170 3,281,537
Denbury Resources (a) 352,600 4,735,418
EOG Resources 5,000 209,200
EnCana Corporation 21,638 830,250
Husky Energy 85,000 1,097,179
PetroCorp (a) 154,900 1,727,135
Prima Energy (a) 17,500 365,400
Toreador Resources (a) 100,300 301,903
Veritas DGC (a) 123,000 1,414,500
Vintage Petroleum 48,300 544,824
---------------
17,356,686
---------------
Precious Metals and Mining - 0.7%
AngloGold ADR (b,d) 111,900 3,569,610
Glamis Gold (a) 115,000 1,319,050
Gold Fields ADR (b) 57,800 704,004
MK Gold (a) 517,900 393,604
Stillwater Mining (a) 60,000 308,400
---------------
6,294,668
---------------
Real Estate - 1.2%
Alico 52,000 1,283,880
Chelsea Property Group 55,000 2,217,050
Consolidated-Tomoka Land 13,564 340,728
Public Storage 45,000 1,524,150
Trammell Crow Company (a) 432,400 4,587,764
---------------
9,953,572
---------------
TOTAL (Cost $41,719,336) 56,991,877
===============
TECHNOLOGY - 20.2%
Aerospace/Defense - 0.9%
Curtiss-Wright (d) 58,300 3,684,560
Ducommun (a) 117,200 1,652,520
Herley Industries (a) 32,000 543,360
Integral Systems (a) 74,800 1,487,024
---------------
7,367,464
---------------
Components and Systems - 5.4%
Adaptec (a,d) 99,500 774,110
Advanced Digital Information (a) 79,000 789,210
American Power Conversion 231,200 3,604,408
Analogic Corporation 5,000 243,800
Catapult Communications (a) 75,100 797,562
Dionex Corporation (a) 89,000 3,537,750
Excel Technology (a) 168,500 3,846,855
Imation Corporation 35,700 1,350,174
InFocus Corporation (a) 79,000 372,880
KEMET Corporation (a,d) 135,000 1,363,500
Kronos (a) 35,850 1,821,538
Methode Electronics Cl. A 50,000 537,500
Newport Corporation (a,d) 102,600 1,518,480
Pemstar (a,d) 220,000 921,800
Perceptron (a) 397,400 2,384,400
Radiant Systems (a) 47,500 320,150
Rainbow Technologies (a) 116,900 983,129
REMEC (a,d) 214,200 1,490,832
Scitex (a) 245,700 624,078
Storage Technology (a) 90,000 2,316,600
Symbol Technologies 304,900 3,966,749
TTM Technologies (a) 280,500 1,315,545
Technitrol (a) 285,900 4,302,795
Tektronix (a) 65,000 1,404,000
Vishay Intertechnology (a) 83,900 1,107,480
Zebra Technologies Cl. A (a) 62,500 4,699,375
---------------
46,394,700
---------------
Distribution - 2.5%
Anixter International (a,d) 41,900 981,717
Arrow Electronics (a) 316,100 4,817,364
AVNET (a,d) 405,355 5,139,901
Benchmark Electronics (a) 45,400 1,396,504
41
ROYCE VALUE TRUST, INC.
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SCHEDULE OF INVESTMENTS JUNE 30, 2003 (UNAUDITED)
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SHARES VALUE
------ -----
TECHNOLOGY (CONTINUED)
Distribution (continued)
Brightpoint (a) 11,286 $ 138,818
Insight Enterprises (a) 71,500 719,290
Plexus (a) 274,600 3,166,138
TECH DATA (a) 200,500 5,355,355
---------------
21,715,087
---------------
Internet Software and Services - 0.8%
CNET Networks (a) 265,400 1,653,442
CryptoLogic (a) 202,000 1,510,960
CyberSource Corporation (a) 10,000 27,400
DoubleClick (a) 166,700 1,541,975
EarthLink (a) 122,700 968,103
+Overture Services (a,d) 5,000 90,650
RealNetworks (a) 85,400 579,012
+Satyam Computer Services ADR (b,d) 20,000 198,600
Stamps.com (a) 80,300 385,440
Vastera (a) 15,000 89,550
---------------
7,045,132
---------------
IT Services - 4.3%
American Management Systems (a) 331,900 4,739,532
Answerthink (a) 655,000 1,264,150
BearingPoint (a) 486,000 4,689,900
CIBER (a) 70,000 491,400
Covansys Corporation (a) 251,600 772,412
DiamondCluster International Cl. A (a) 288,900 1,071,819
Forrester Research (a) 91,500 1,496,940
Gartner Cl. A (a) 166,000 1,258,280
CGI Group Cl. A (a) 106,700 642,334
KEANE (a) 497,000 6,774,110
MAXIMUS (a,d) 113,000 3,122,190
Perot Systems Cl. A (a) 165,100 1,875,536
QRS Corporation (a) 57,500 304,750
Sapient Corporation (a) 1,124,400 3,114,588
Syntel (a) 72,400 1,138,852
Unisys Corporation (a) 325,000 3,991,000
---------------
36,747,793
---------------
Semiconductors and Equipment - 2.9%
Artisan Components (a) 15,000 339,150
BE Semiconductor Industries (a) 58,000 310,300
Credence Systems (a) 10,600 89,782
Cymer (a,d) 14,500 464,145
DSP Group (a) 115,000 2,475,950
DuPont Photomasks (a) 35,000 659,050
Electroglas (a,d) 281,700 369,027
Exar Corporation (a) 92,300 1,461,109
Fairchild Semiconductor Cl. A (a) 183,000 2,340,570
GlobespanVirata (a) 85,000 701,250
Helix Technology (d) 51,900 686,637
Integrated Circuit Systems (a,d) 135,000 4,243,050
Intevac (a,d) 216,650 1,455,888
Kulicke & Soffa Industries (a) 105,800 676,062
Lattice Semiconductor (a) 264,000 2,172,720
Mentor Graphics (a,d) 225,700 3,268,136
National Semiconductor (a) 43,200 851,904
Novellus Systems (a) 12,000 439,452
NVIDIA Corporation (a) 14,000 322,140
ParthusCeva (a) 31,666 258,078
Semitool (a) 50,000 246,500
Veeco Instruments (a,d) 65,000 1,106,950
---------------
24,937,850
---------------
Software - 1.9%
Adobe Systems 30,000 962,100
ANSYS (a) 45,500 1,415,050
Aspen Technology (a,d) 27,100 130,080
Autodesk 251,000 4,056,160
Business Objects ADR (a,b,d) 25,500 559,725
JDA Software Group (a) 149,900 1,677,381
MRO Software (a) 46,000 396,980
MSC.Software (a,d) 42,600 287,124
Macromedia (a) 61,600 1,296,064
Manugistics Group (a,d) 49,200 202,212
Novell (a) 146,000 449,680
Phoenix Technologies (a,d) 40,900 231,085
Progress Software (a) 50,500 1,046,865
SPSS (a) 107,500 1,799,550
Transaction Systems Architects Cl. A (a) 237,300 2,126,208
---------------
16,636,264
---------------
Telecommunication - 1.5%
ADC Telecommunications (a) 113,000 263,064
ADTRAN (a) 40,000 2,040,800
Allegiance Telecom (a,d) 2,016,700 110,918
Anaren (a,d) 30,000 281,100
Andrew Corporation (a) 30,000 276,000
Arris Group (a,d) 70,000 347,200
Comverse Technology (a) 30,000 450,900
Globecomm Systems (a) 233,700 766,536
IDT Corporation (a,d) 25,000 447,500
IDT Corporation Cl. B (a) 40,000 704,000
Inet Technologies (a) 65,000 648,050
Level 3 Communications (a,d) 408,400 2,711,776
Liberty Satellite & Technology Cl. A (a,d) 196,530 510,978
PECO II (a) 93,600 58,781
Plantronics (a) 55,100 1,194,017
Polycom (a,d) 37,000 512,820
Sycamore Networks (a) 38,000 145,540
Time Warner Telecom Cl. A (a) 204,000 1,299,480
---------------
12,769,460
---------------
TOTAL (Cost $167,662,238) 173,613,750
===============
UTILITIES - 0.1%
Southern Union (a) 10,000 169,400
---------------
TOTAL (Cost $132,500) 169,400
===============
MISCELLANEOUS - 1.7%
TOTAL (Cost $11,930,853) 14,181,950
===============
TOTAL COMMON STOCKS
(Cost $629,557,734) 783,631,546
===============
PREFERRED STOCKS - 0.1%
Aristotle Corporation 11.00% Conv. 4,800 33,888
SVB Capital I 8.25% 20,000 499,980
---------------
TOTAL PREFERRED STOCKS
(Cost $531,005) 533,868
===============
42
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS JUNE 30, 2003 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
------ -----
CORPORATE BONDS - 0.2%
Dixie Group 7.00%
Conv. Sub. Deb. due 5/15/12 $ 537,000 $ 322,200
Richardson Electronics 7.25%
Conv. Sub. Deb. due 12/15/06 1,319,000 1,081,580
---------------
TOTAL CORPORATE BONDS
(Cost $1,544,984) 1,403,780
===============
U.S. TREASURY OBLIGATIONS - 3.2%
U.S. Treasury Notes
5.625%, due 2/15/06 25,000,000 27,649,425
---------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $27,453,124) 27,649,425
===============
REPURCHASE AGREEMENT - 5.4%
State Street Bank & Trust Company,
0.30% dated 6/30/03, due 7/1/03,
maturity value $46,399,387
(collateralized by U.S. Treasury Notes,
1.75% due 12/31/04, valued at $47,329,137)
(Cost $46,399,000) $ 46,399,000
===============
TOTAL INVESTMENTS - 100.0%
(Cost $705,485,847) 859,617,619
LIABILITIES LESS CASH
AND OTHER ASSETS - (396,423)
PREFERRED STOCK (160,000,000)
---------------
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS $ 699,221,196
===============
--------------------------------------------------------------------------------
(a) Non-income producing.
(b) American Depository Receipt.
(c) At June 30, 2003, 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 June 30, 2003. Total market
value of loaned securities at June 30, 2003 was $33,925,944.
(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 2003.
BOLD INDICATES THE FUND'S LARGEST 20 EQUITY HOLDINGS IN TERMS OF JUNE 30,
2003 MARKET VALUE.
INCOME TAX INFORMATION: The cost of total investments for Federal income tax
purposes was $709,157,702. At June 30, 2003, net unrealized appreciation for all
securities was $150,459,917, consisting of aggregate gross unrealized
appreciation of $228,856,672 and aggregate gross unrealized depreciation of
$78,396,755. 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.
43
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 2003 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS:
Investments at value (identified cost $659,086,847) $813,218,619
Repurchase agreement (at cost and value) 46,399,000
Cash 126
Collateral from brokers on securities loaned 36,246,784
Receivable for investments sold 612,103
Receivable for dividends and interest 929,758
--------------------------------------------------------------------------------
Total Assets 897,406,379
--------------------------------------------------------------------------------
LIABILITIES:
Payable for collateral on securities loaned 36,246,784
Payable for investments purchased 637,532
Payable for investment advisory fee 809,646
Preferred dividends accrued but not yet declared 266,225
Accrued expenses 224,996
--------------------------------------------------------------------------------
Total Liabilities 38,185,183
--------------------------------------------------------------------------------
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 $699,221,196
--------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:
Par value of Common Stock - $0.001 per share;
48,820,755 shares outstanding (150,000,000 shares authorized) $ 48,821
Additional paid-in capital 566,557,501
Accumulated net investment loss (895,291)
Accumulated net realized gain on investments 15,009,715
Net unrealized appreciation on investments 154,131,809
Quarterly and accrued distributions (35,631,359)
--------------------------------------------------------------------------------
Net Assets applicable to Common Stockholders
(net asset value per share - $14.32) $699,221,196
--------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
44
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Dividends $ 2,629,376
Interest 851,553
--------------------------------------------------------------------------------
Total income 3,480,929
--------------------------------------------------------------------------------
Expenses:
Investment advisory fees 4,482,527
Stockholder reports 176,214
Custody and transfer agent fees 104,025
Administrative and office facilities expenses 58,433
Directors' fees 55,391
Professional fees 46,220
Other expenses 70,077
--------------------------------------------------------------------------------
Total expenses 4,992,887
Fees waived by investment advisor (616,667)
--------------------------------------------------------------------------------
Net expenses 4,376,220
--------------------------------------------------------------------------------
Net investment income (loss) (895,291)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 18,822,862
Net change in unrealized appreciation on investments 84,176,771
--------------------------------------------------------------------------------
Net realized and unrealized gain on investments 102,999,633
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM INVESTMENT OPERATIONS 102,104,342
--------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS (5,990,000)
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS APPLICABLE TO
COMMON STOCKHOLDERS RESULTING FROM INVESTMENT OPERATIONS $ 96,114,342
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
Six months ended Year ended
June 30, 2003 December 31,
(unaudited) 2002
---------------- -----------
INVESTMENT OPERATIONS:
Net investment loss $ (895,291) $ (583,347)
Net realized gain on investments 18,822,862 62,933,497
Net change in unrealized appreciation
on investments 84,176,771 (156,381,089)
--------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from investment operations 102,104,342 (94,030,939)
--------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS:
Net investment income - (581,030)
Net realized gain on investments - (11,398,970)
Quarterly distributions* (5,990,000) -
--------------------------------------------------------------------------------
Total distributions to
Preferred Stockholders (5,990,000) (11,980,000)
--------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
APPLICABLE TO COMMON STOCKHOLDERS
RESULTING FROM INVESTMENT OPERATIONS 96,114,342 (106,010,939)
--------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON STOCKHOLDERS:
Net investment income - (2,981,664)
Net realized gain on investments - (58,496,049)
Quarterly distributions* (29,375,135) -
--------------------------------------------------------------------------------
Total distributions to
Common Stockholders (29,375,135) (61,477,713)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from rights offering 54,505,909 -
Reinvestment of distributions to
Common Stockholders 17,200,457 39,123,307
--------------------------------------------------------------------------------
Total capital stock transactions 71,706,366 39,123,307
--------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
APPLICABLE TO COMMON STOCKHOLERS 138,445,573 (128,365,345)
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:
Beginning of period 560,775,623 689,140,968
--------------------------------------------------------------------------------
End of period (including accumulated net investment loss
of $895,291 in 2003) $699,221,196 $ 560,775,623
--------------------------------------------------------------------------------
*To be allocated to net investment income and capital gains at year-end.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
45
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.
Six months ended Years ended December 31,
June 30, 2003 --------------------------------------------
(unaudited) 2002 2001 2000 1999 1998
----------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $13.22 $17.31 $16.56 $15.77 $15.72 $16.91
----------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income (loss) (0.02) (0.02) 0.05 0.18 0.26 0.17
Net realized and unrealized
gain (loss) on investments 1.97 (2.25) 2.58 2.58 1.65 0.67
----------------------------------------------------------------------------------------------------
Total investment operations 1.95 (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)
Quarterly distributions* (0.13) - - - - -
----------------------------------------------------------------------------------------------------
Total distributions to
Preferred Stockholders (0.13) (0.29) (0.31) (0.33) (0.36) (0.29)
----------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
APPLICABLE TO COMMON STOCKHOLDERS
RESULTING FROM INVESTMENT OPERATIONS 1.82 (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)
Quarterly distributions* (0.65) - - - - -
----------------------------------------------------------------------------------------------------
Total distributions to
Common Stockholders (0.65) (1.51) (1.49) (1.48) (1.37) (1.54)
----------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Effect of reinvestment of
distributions by
Common Stockholders (0.00) (0.02) (0.08) (0.16) (0.13) (0.09)
Effect of rights offering or
Preferred Stock offering (0.07) - - - - (0.11)
----------------------------------------------------------------------------------------------------
Total capital stock transactions (0.07) (0.02) (0.08) (0.16) (0.13) (0.20)
----------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $14.32 $13.22 $17.31 $16.56 $15.77 $15.72
----------------------------------------------------------------------------------------------------
MARKET VALUE, END OF PERIOD $14.94 $13.25 $15.72 $14.438 $13.063 $13.75
----------------------------------------------------------------------------------------------------
TOTAL RETURN (a):
Market Value 18.4%*** (6.9)% 20.0% 22.7% 5.7% 1.5%
Net Asset Value 13.8%*** (15.6)% 15.2% 16.6% 11.7% 3.3%
RATIOS BASED ON AVERAGE NET ASSETS
APPLICABLE TO COMMON STOCKHOLDERS:
Total expenses (b,c) 1.47%** 1.72% 1.61% 1.43% 1.39% 1.31%
Management fee expense 1.30%** 1.56% 1.45% 1.25% 1.18% 1.10%
Other operating expenses 0.17%** 0.16% 0.16% 0.18% 0.21% 0.21%
Net investment income (loss) (0.30)%** (0.09)% 0.35% 1.18% 1.47% 1.11%
SUPPLEMENTAL DATA:
Net Assets Applicable to Common
Stockholders, End of Period
(in thousands) $699,221 $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 $160,000
Portfolio Turnover Rate 12% 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 6,400,000
Asset coverage per share $134.25 $112.62 $132.68 $122.38 $111.40 $105.78
Liquidation preference per share $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
Average market value per share:
7.80% Cumulative (d) $26.09 $26.37 $25.70 $23.44 $24.98 $25.91
7.30% Tax-Advantaged
Cumulative (d) $25.60 $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 1.16%, 1.38%, 1.30%, 1.12%, 1.06% and 1.06% for the
periods ended June 30, 2003 and 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 1.67%,
1.82%, 1.65%, 1.51%, 1.48% and 1.34% for the periods ended June 30, 2003 and
December 31, 2002, 2001, 2000, 1999 and 1998, respectively.
(d) The average of month-end market values during the period.
* To be allocated to net investment income and capital gains at year-end.
** Annualized.
*** Not annualized.
46
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
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 are valued as of the close of trading on the New York Stock
Exchange (generally 4:00 p.m. Eastern time) on the valuation date. 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. 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 are 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.
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 June 30, 2003, 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.
47
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
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 1,313,310 and 2,615,641 shares of Common Stock as
reinvestment of distributions by Common Stockholders for the six months ended
June 30, 2003 and the year ended December 31, 2002, respectively.
During the quarter ended March 31, 2003, the Fund completed a rights
offering of 5,090,083 shares to its stockholders at the rate of one share for
each 10 rights held by the stockholders of record on January 28, 2003. These
shares were priced at $10.77, which was $0.50 below the last reported sale
price on the New York Stock Exchange on March 11, 2003. 34.5% of the offering
was subscribed for through primary subscription. The remaining shares were
purchased by those stockholders who subscribed with their primary rights and
who also elected to purchase additional shares using over-subscription rights.
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 applicable to Common
Stockholders plus the 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 six months ended June 30, 2003, the Fund accrued and paid Royce
advisory fees totaling $3,865,860, which is net of $616,667 voluntarily waived
by Royce.
PURCHASES AND SALES OF INVESTMENT SECURITIES:
For the six months ended June 30, 2003, the cost of purchases and proceeds
from sales of investment securities, other than short-term securities,
amounted to $87,757,204 and $87,320,273, respectively.
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 six months ended June 30, 2003:
------------------------------------------------------------------------------------------------------
Purchases Sales
------------ -----------
Affiliated Company Shares Cost Shares Cost Realized Gain (Loss) Dividend Income
------------------ ------ ---- ------ ---- -------------------- ---------------
Falcon Products 405,600 $1,635,894 -- -- -- --
McLeodUSA -- -- -- -- -- --
Peerless Mfg. -- -- -- -- -- --
Synalloy Corporation 345,000 1,797,450 -- -- -- --
------------------------------------------------------------------------------------------------------
48
ROYCE VALUE TRUST, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
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 net asset 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.
49
ITEM 2: CODE(S) OF ETHICS - NOT APPLICABLE TO THIS AMENDED SEMI-ANNUAL REPORT.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT - NOT APPLICABLE TO THIS AMENDED
SEMI-ANNUAL REPORT.
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT APPLICABLE TO THIS AMENDED
SEMI-ANNUAL REPORT.
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS. NOT APPLICABLE TO THIS AMENDED
SEMI-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