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: 811-08030
Name of Registrant: Royce Micro-Cap 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 MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS DECEMBER 31, 2002
- --------------------------------------------------------------------------------
COMMON STOCKS - 94.5%
SHARES VALUE
------ -----
CONSUMER PRODUCTS - 9.6%
Apparel and Shoes - 3.5%
Ashworth (a) 65,000 $ 416,000
DELTA APPAREL 176,800 2,722,720
Kleinert's (a,e) 14,200 113,600
Nautica Enterprises (a) 107,600 1,195,436
Oshkosh B'Gosh Cl. A 37,000 1,037,850
WEYCO GROUP 48,400 1,661,088
-----------
7,146,694
-----------
Collectibles - 1.3%
The Boyds Collection (a,d) 226,800 1,508,220
Enesco Group (a) 52,400 370,992
Topps Company (The) (a,d) 101,000 878,700
-----------
2,757,912
-----------
Food/Beverage/Tobacco - 1.2%
800 JR CIGAR (a,e) 193,000 2,509,000
-----------
Home Furnishing/Appliances - 0.4%
Bassett Furniture Industries 26,300 376,616
Lifetime Hoan 109,854 524,004
-----------
900,620
-----------
Publishing - 0.5%
Information Holdings (a) 35,000 543,200
Marvel Enterprises (a) 42,700 383,446
-----------
926,646
-----------
Sports and Recreation - 0.8%
Lund International Holdings (a) 362,950 471,835
Monaco Coach (a) 65,900 1,090,645
+National R.V. Holdings (a,d) 31,800 190,164
-----------
1,752,644
-----------
Other Consumer Products - 1.9%
Cross (A.T.) & Company Cl. A (a) 100,000 535,000
+JAKKS Pacific (a) 35,000 471,450
Lazare Kaplan International (a) 151,700 825,248
MATTHEWS INTERNATIONAL CL. A 96,000 2,143,776
-----------
3,975,474
-----------
TOTAL (Cost $13,428,343) 19,968,990
===========
CONSUMER SERVICES - 4.0%
Direct Marketing - 0.2%
+Blair 15,000 349,800
ValueVision Media Cl. A (a) 5,000 74,900
-----------
424,700
-----------
Leisure/Entertainment - 0.2%
ACTV (a) 55,000 38,500
+Acres Gaming (a) 66,000 349,140
TiVo (a,d) 20,000 104,600
-----------
492,240
-----------
Restaurants/Lodgings - 0.2%
Angelo and Maxie's (a) 3,333 11,499
Benihana Cl. A (a) 21,470 289,845
Diedrich Coffee (a) 32,350 112,254
-----------
413,598
-----------
Retail Stores - 2.9%
Brookstone (a) 23,000 332,580
Buckle (The) (a) 36,500 657,000
Cato Cl. A 58,000 1,252,220
Dress Barn (The) (a) 53,660 713,678
La Senza Corporation 99,900 632,399
STEIN MART (a) 285,200 1,739,720
Wet Seal (The) Cl. A (a) 73,000 785,553
-----------
6,113,150
-----------
Other Consumer Services - 0.5%
Ambassadors International (a) 6,100 54,839
E-LOAN (a) 505,500 934,670
-----------
989,509
-----------
TOTAL (Cost $7,048,154) 8,433,197
===========
DIVERSIFIED INVESTMENT COMPANIES - 0.3%
Closed-End Mutual Funds - 0.3%
Central Fund of Canada Cl. A (d) 140,000 667,800
-----------
TOTAL (Cost $554,082) 667,800
-----------
FINANCIAL INTERMEDIARIES - 6.4%
Banking - 0.4%
First Midwest Financial 1,000 15,900
Queen City Investments 948 437,976
Sterling Bancorp 14,520 382,166
-----------
836,042
-----------
Insurance - 6.0%
Arch Capital Group (a) 25,700 801,069
Argonaut Group 30,900 455,775
Independence Holding 36,630 786,446
NYMAGIC (a) 107,100 2,083,095
Navigators Group (a) 47,200 1,083,240
PICO Holdings (a) 82,200 1,103,946
PXRE GROUP 73,164 1,792,518
Philadelphia Consolidated Holding (a) 35,000 1,239,000
PROASSURANCE (a) 99,900 2,097,900
Wellington Underwriting (a) 444,712 572,611
Zenith National Insurance 19,100 449,232
-----------
12,464,832
-----------
TOTAL (Cost $8,411,826) 13,300,874
===========
FINANCIAL SERVICES - 2.6%
Information and Processing - 0.7%
+Fidelity National Information Solutions (a) 65,668 1,132,773
+InterCept (a,d) 15,000 253,965
Multex.com (a) 15,000 63,000
-----------
1,449,738
-----------
Insurance Brokers - 0.6%
Clark/Bardes (a) 20,900 402,325
CorVel (a) 18,750 670,313
Hilb, Rogal & Hamiln 5,200 212,680
-----------
1,285,318
-----------
Investment Management - 0.2%
BKF Capital Group (a) 27,700 488,905
-----------
34 | THE ROYCE FUNDS ANNUAL REPORT 2002
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS DECEMBER 31, 2002
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
FINANCIAL SERVICES (CONTINUED)
Other Financial Services - 1.1%
+LendingTree (a,d) 55,000 $ 708,400
New Century Financial (d) 5,000 126,950
PRG-Schultz International (a) 165,000 1,468,500
-----------
2,303,850
-----------
TOTAL (Cost $3,493,521) 5,527,811
===========
HEALTH - 10.2%
Commercial Services - 2.2%
ICON ADR a,b 800 21,528
PAREXEL International (a) 134,400 1,477,056
The TriZetto Group (a) 149,000 914,860
YOUNG INNOVATIONS (a) 93,850 2,183,889
-----------
4,597,333
-----------
Drugs and Biotech - 3.7%
Antigenics (a,d) 60,800 622,592
Arena Pharmaceuticals (a) 14,000 91,140
BioReliance (a) 20,300 470,351
BioSource International (a) 163,600 979,800
+Bruker Daltonics (a,d) 200,300 973,458
Emisphere Technologies (a) 362,900 1,262,892
+Gene Logic (a) 110,000 691,900
Geron (a,d) 6,000 21,600
Lexicon Genetics (a) 192,100 908,633
Martek Biosciences (a,d) 33,800 850,408
Myriad Genetics (a,d) 5,000 73,000
Sangamo BioSciences (a) 10,000 30,100
3-Dimensional Pharmaceuticals (a) 10,000 31,900
ViroPharma (a,d) 18,800 27,448
VIVUS (a,d) 167,200 623,656
-----------
7,658,878
-----------
Health Services - 1.1%
aaiPharma (a,d) 47,000 658,940
Covalent Group (a) 25,000 74,000
MedCath Corporation (a,d) 18,000 180,000
RehabCare Group (a) 25,000 477,000
+SFBC International (a) 30,000 389,400
Sierra Health Services a 40,000 480,400
-----------
2,259,740
-----------
Personal Care - 1.1%
+Inter Parfums 46,200 357,588
OCULAR SCIENCES (a) 130,700 2,028,464
-----------
2,386,052
-----------
Surgical Products and Devices - 2.1%
Aksys (a,d) 85,000 450,500
Allied Healthcare Products (a) 258,400 710,600
+Cantel Medical (a,d) 20,000 253,200
Cohesion Technologies (a) 5,000 19,150
CONMED (a) 3,900 76,401
Cyberonics (a,d) 5,000 92,000
Exactech (a) 25,000 486,000
Interpore International (a) 17,600 112,640
NMT Medical (a,d) 44,000 133,320
Orthofix International (a) 29,500 827,475
Osteotech (a) 62,100 399,924
PLC Systems (a) 105,200 61,016
+Utah Medical Products (a) 42,300 807,930
-----------
4,430,156
-----------
TOTAL (Cost $19,455,444) 21,332,159
===========
INDUSTRIAL PRODUCTS - 13.4%
Building Systems and Components - 2.1%
Juno Lighting (a) 108,600 1,050,162
LSI Industries 43,850 607,322
SIMPSON MANUFACTURING (a) 55,200 1,816,080
Skyline (d) 32,100 946,950
-----------
4,420,514
-----------
Construction Materials - 2.0%
Ash Grove Cement Company 8,000 1,010,000
Encore Wire (a,d) 10,000 90,500
Florida Rock Industries 35,000 1,331,750
Monarch Cement 50,410 887,216
Synalloy Corporation (a) 221,000 928,200
-----------
4,247,666
-----------
Industrial Components - 2.0%
+Aaon (a) 37,500 691,125
Bel Fuse Cl. A (a,d) 52,600 952,060
Penn Engineering & Manufacturing 56,600 602,790
Penn Engineering & Manufacturing Cl. A 30,800 344,960
+Powell Industries (a) 85,800 1,465,378
Scientific Technologies (a) 10,700 53,489
Woodhead Industries 10,000 113,000
-----------
4,222,802
-----------
Machinery - 1.3%
Astec Industries (a) 31,700 314,781
+LeCroy Corporation (a) 31,500 349,650
Lindsay Manufacturing 10,000 214,000
Mueller (Paul) 16,650 505,328
+T-3 Energy Services (a) 104,310 678,015
Woodward Governor 15,300 665,550
-----------
2,727,324
-----------
Pumps, Valves and Bearings - 1.9%
DENISON INTERNATIONAL ADR (a,b) 113,500 1,816,000
NN 80,500 804,195
Sun Hydraulics 152,550 1,220,400
-----------
3,840,595
-----------
Specialty Chemicals and Materials - 1.5%
Aceto 58,421 932,983
Balchem 10,000 243,000
CFC International a 144,700 643,915
Hawkins 122,667 1,102,776
+NuCo2 (a,d) 20,000 161,000
-----------
3,083,674
-----------
THE ROYCE FUNDS ANNUAL REPORT 2002 | 35
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS DECEMBER 31, 2002
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
INDUSTRIAL PRODUCTS (CONTINUED)
Textiles - 0.3%
Fab Industries (a) 76,400 $ 622,660
-----------
Other Industrial Products - 2.3%
+Astronics (a) 61,400 423,660
BHA GROUP HOLDINGS (a) 96,915 1,662,092
Maxwell Technologies (a) 15,300 92,565
Myers Industries 29,342 313,959
Peerless Mfg. (a) 43,200 358,560
Quixote 12,500 225,750
Velcro Industries 81,500 745,725
Wescast Industries Cl. A 37,900 943,710
-----------
4,766,021
-----------
TOTAL (Cost $21,286,619) 27,931,256
===========
INDUSTRIAL SERVICES - 12.7%
Advertising/Publishing - 0.3%
+Digital Generation Systems (a) 320,900 343,363
+Modem Media Cl. A (a) 141,200 367,120
-----------
710,483
-----------
Commercial Services - 6.3%
American Bank Note Holographics (a) 257,200 180,040
Butler International (a) 38,500 17,710
Carlisle Holdings (a) 400,000 1,100,000
Edgewater Technology (a) 18,339 86,560
Exponent (a) 63,200 928,345
iGATE Corporation (a) 274,700 719,714
Kforce (a) 55,000 232,100
Manufacturers Services (a) 100,000 554,000
NCO Group (a) 20,000 319,000
NIC (a) 26,800 38,592
National Service Industries 92,800 666,304
New Horizons Worldwide (a) 282,000 1,113,900
On Assignment (a) 132,000 1,124,640
Pegasystems (a) 65,000 332,150
+PLATO Learning (a) 70,000 415,800
ProBusiness Services (a) 10,000 100,000
RemedyTemp Cl. A (a) 71,700 1,003,800
+TRC Companies (a,d) 24,000 315,120
Tyler Technologies (a) 50,000 208,500
Volt Information Sciences (a) 36,600 625,860
WACKENHUT CORRECTIONS (a) 164,800 1,830,928
+Watson Wyatt & Company Holdings Cl. A (a) 15,000 326,250
Westaff (a) 362,500 906,250
-----------
13,145,563
-----------
Food/Tobacco Processors - 1.1%
MGP Ingredients 96,122 749,752
Seneca Foods Cl. A (a) 58,500 863,753
Seneca Foods Cl. B (a) 47,200 767,236
-----------
2,380,741
-----------
Industrial Distribution - 1.3%
+Central Steel & Wire 1,200 572,400
Elamex (a) 70,200 315,900
Lawson Products 12,200 377,956
Strategic Distribution (a) 104,690 1,329,563
-----------
2,595,819
-----------
Printing - 1.6%
Bowne & Co. 110,000 1,314,500
Ennis Business Forms 11,200 130,144
Moore Corporation (a) 39,600 360,360
New England Business Service 52,900 1,290,760
Schawk Cl. A 21,300 211,083
-----------
3,306,847
-----------
Transportation and Logistics - 2.1%
AirNet Systems (a) 119,700 588,924
EGL (a) 42,100 599,925
Forward Air (a) 36,800 714,288
Frozen Food Express Industries (a) 227,500 590,818
Hawaiian Holdings (a) 86,000 175,440
Hub Group Cl. A (a) 6,500 31,200
Knight Transportation (a) 38,925 817,425
Patriot Transportation Holding (a) 27,700 767,290
-----------
4,285,310
-----------
TOTAL (Cost $24,678,088) 26,424,763
===========
NATURAL RESOURCES - 8.2%
Energy Services - 2.6%
Carbo Ceramics 33,600 1,132,320
Dril-Quip (a) 42,700 721,630
GulfMark Offshore (a) 69,200 1,020,700
Input/Output (a) 193,500 822,375
Lufkin Industries 25,000 586,250
MarkWest Hydrocarbon (a) 15,200 86,640
NATCO Group Cl. A (a) 100,400 630,512
Valley National Gases (a) 30,100 171,570
Willbros Group (a) 30,900 253,998
-----------
5,425,995
-----------
Oil and Gas - 3.5%
BONAVISTA PETROLEUM (a) 81,000 1,745,420
Denbury Resources (a) 112,000 1,265,600
Evergreen Resources (a,d) 20,000 897,000
PETROCORP (a) 171,200 1,754,800
+Prima Energy (a) 21,000 469,560
3TEC Energy (a,d) 51,075 724,754
+Veritas DGC (a) 51,300 405,270
-----------
7,262,404
-----------
Precious Metals and Mining - 0.7%
Apex Silver Mines (a) 79,600 1,178,080
Brush Engineered Materials (a) 15,500 85,250
MK Gold (a) 603,700 256,573
-----------
1,519,903
-----------
Real Estate - 1.4%
HomeFed (a) 998,521 1,447,855
Liberte Investors 346,800 1,494,708
-----------
2,942,563
-----------
TOTAL (Cost $10,833,191) 17,150,865
===========
36 | THE ROYCE FUNDS ANNUAL REPORT 2002
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS DECEMBER 31, 2002
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
TECHNOLOGY - 22.2%
Aerospace/Defense - 2.4%
Ducommun (a) 99,500 $ 1,577,075
HEICO 55,000 583,550
Herley Industries (a) 77,000 1,340,416
Integral Systems (a) 58,300 1,168,915
Mesaba Holdings (a) 51,600 315,792
-----------
4,985,748
-----------
Components and Systems - 4.0%
CSP (a) 117,581 303,477
Com21 (a) 17,500 3,850
+Del Global Technologies (a) 468,279 1,123,870
EXCEL TECHNOLOGY (a) 97,900 1,751,431
Kronos (a) 20,750 767,543
MOCON 22,600 160,211
Newport (a) 45,000 565,200
+OSI Systems (a) 20,000 339,600
PC-Tel (a) 61,100 414,258
Performance Technologies (a) 24,750 80,685
Rainbow Technologies (a) 206,500 1,480,605
Read-Rite (a) 5,000 1,750
REMEC (a) 246,500 956,420
Spectrum Control (a) 17,500 91,875
TransAct Technologies (a) 68,200 323,268
-----------
8,364,043
-----------
Distribution - 2.2%
Bell Industries (a) 85,700 137,120
Daisytek International (a) 53,300 422,669
Jaco Electronics (a) 38,000 104,500
Nu Horizons Electronics (a) 40,000 231,200
PC Connection (a) 5,000 25,350
Pioneer-Standard Electronics (d) 120,000 1,101,600
+Plexus (a) 80,000 702,400
RICHARDSON ELECTRONICS 206,600 1,789,156
-----------
4,513,995
-----------
Internet Software and Services - 1.3%
Lionbridge Technologies (a) 37,500 73,163
+Overstock.com (a,d) 30,000 390,000
RealNetworks (a) 65,700 250,317
Register.com (a) 179,000 805,500
Stamps.com (a) 185,000 863,950
+United Online (a,d) 15,000 239,115
-----------
2,622,045
-----------
IT Services - 4.9%
CACI International Cl. A (a) 10,000 356,400
CIBER (a) 225,000 1,158,750
Computer Task Group (a) 221,100 771,639
Covansys Corporation (a) 242,500 911,315
DiamondCluster International Cl. A (a) 255,000 800,700
Forrester Research (a) 105,500 1,642,635
+SAPIENT CORPORATION (a) 1,155,000 2,367,750
SYNTEL (a) 87,700 1,842,577
Technology Solutions (a) 50,000 54,500
Tier Technologies Cl. B (a) 24,500 392,000
-----------
10,298,266
-----------
Semiconductors and Equipment - 1.6%
August Technology (a) 60,000 303,600
California Micro Devices (a) 25,000 113,750
Exar (a) 48,500 601,400
FSI International (a) 34,500 155,250
GlobespanVirata (a) 40,000 176,400
Helix Technology 9,500 106,400
Intevac (a) 111,450 444,685
Oak Technology (a) 135,000 357,750
Photronics (a) 29,750 407,575
Semitool (a) 50,500 313,605
Teradyne (a) 13,604 176,988
Xicor (a) 35,000 130,550
-----------
3,287,953
-----------
Software - 3.2%
ANSYS (a) 15,400 311,080
Aladdin Knowledge Systems (a) 27,300 70,680
Applix (a) 20,000 21,600
Aspen Technology (a) 65,000 183,950
+Chordiant Software (a,d) 130,000 187,200
JDA Software Group (a) 110,500 1,067,430
Lightspan (a) 480,000 504,480
MSC.Software (a) 42,700 329,644
SCB Computer Technology (a) 50,000 37,000
SPSS (a) 91,900 1,285,681
Transaction Systems Architects Cl. A (a) 155,100 1,008,150
+Verity (a) 120,000 1,606,920
-----------
6,613,815
-----------
Telecommunication - 2.6%
+Allegiance Telecom (a) 840,000 562,800
+Anaren (a,d) 109,000 959,200
Brooktrout (a) 28,400 150,520
C-COR.net (a,d) 5,000 16,600
Captaris (a) 30,000 72,000
Computer Access Technology (a) 48,000 119,520
+Finisar Corporation (a,d) 30,000 28,500
Giga-tronics (a) 3,200 4,480
+Interland (a,d) 25,000 32,500
+Level 3 Communications (a,d) 84,300 413,070
Liberty Satellite & Technology Cl. A (a) 68,200 180,730
MetaSolv (a) 26,100 35,757
Somera Communications (a,d) 132,900 358,830
+SpectraLink Corporation (a) 132,000 947,760
+Stratos Lightwave (a,d) 5,760 25,338
Technical Communications (a,c) 96,700 34,812
+Tollgrade Communications (a,d) 36,500 428,145
+ViaSat (a,d) 98,200 1,133,228
-----------
5,503,790
-----------
TOTAL (Cost $47,001,974) 46,189,655
===========
MISCELLANEOUS - 4.9%
TOTAL (Cost $13,116,225) 10,238,165
===========
THE ROYCE FUNDS ANNUAL REPORT 2002 | 37
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS DECEMBER 31, 2002
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
TOTAL COMMON STOCKS
(Cost $169,307,467) $197,165,535
=============
PREFERRED STOCKS - 0.5%
Angelo and Maxie's 10.00% Conv. 6,991 14,681
SENECA FOODS CONV. (a) 75,409 919,990
-------------
TOTAL PREFERRED STOCKS
(Cost $957,998) 934,671
=============
PRINCIPAL
AMOUNT
---------
U.S. TREASURY OBLIGATIONS - 2.4%
U.S Treasury Notes
+1.875%, due 9/30/04 $5,000,000 5,034,960
-------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5,015,040) 5,034,960
=============
REPURCHASE AGREEMENT - 2.6%
State Street Bank & Trust Company,
0.50% dated 12/31/02, due 1/2/03,
maturity value $5,429,151 (collateralized
by U.S. Treasury Notes, 5.00% due 8/15/11,
valued at $5,539,531) (Cost $5,429,000) 5,429,000
=============
TOTAL INVESTMENTS - 100.0%
(Cost $180,709,505) 208,564,166
-------------
LIABILITIES LESS CASH
AND OTHER ASSETS (992,987)
PREFERRED STOCK (40,000,000)
-------------
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS $167,571,179
=============
- --------------------------------------------------------------------------------
(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 $4,495,930.
(e) Securities for which market quotations are no longer readily available
represent 1.26% of net assets. These securities have been valued at their
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 $181,855,758. At December 31, 2002, net unrealized appreciation for
all securities was $26,708,408, consisting of aggregate gross unrealized
appreciation of $49,389,750 and aggregate gross unrealized depreciation of
$22,681,342. 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.
38 | THE ROYCE FUNDS ANNUAL REPORT 2002
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2002
- --------------------------------------------------------------------------------
ASSETS:
Investments at value (identified cost $175,280,505) $203,135,166
Repurchase agreement (at cost and value) 5,429,000
Cash 765
Collateral from brokers on securities loaned 4,883,393
Receivable for investments sold 73,603
Receivable for dividends and interest 113,596
Prepaid expenses 6,875
- --------------------------------------------------------------------------------
Total Assets 213,642,398
- --------------------------------------------------------------------------------
LIABILITIES:
Payable for collateral on securities loaned 4,883,393
Payable for investments purchased 812,735
Payable for investment advisory fee 225,816
Preferred dividends accrued but not yet declared 68,887
Accrued expenses 80,388
- --------------------------------------------------------------------------------
Total Liabilities 6,071,219
- --------------------------------------------------------------------------------
PREFERRED STOCK:
7.75% Cumulative Preferred Stock - $0.001 par value,
$25 liquidation value per share; 1,600,000
shares outstanding 40,000,000
- --------------------------------------------------------------------------------
Total Preferred Stock 40,000,000
- --------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS $167,571,179
================================================================================
ANALYSIS OF NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:
Par value of Common Stock - $0.001 per share; 17,842,058 shares
outstanding (150,000,000 shares authorized) $ 17,842
Additional paid-in capital 136,080,965
Accumulated net realized gain on investments 3,686,600
Net unrealized appreciation on investments 27,854,661
Preferred dividends accrued but not yet declared (68,889)
- --------------------------------------------------------------------------------
Net Assets applicable to Common Stockholders (net asset value
per share - $9.39) $167,571,179
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year ended Year ended
December 31, December 31,
2002 2001
------------ ------------
INVESTMENT OPERATIONS:
Net investment income (loss) $ (2,363,582) $ (775,205)
Net realized gain on investments 16,747,557 12,077,022
Net change in unrealized appreciation on
investments (38,936,315) 29,883,551
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from investment operations (24,552,340) 41,185,368
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS:
Net investment income - -
Net realized gain on investments (3,100,000) (3,100,000)
- --------------------------------------------------------------------------------
Total distributions to Preferred
Stockholders (3,100,000) (3,100,000)
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO
COMMON STOCKHOLDERS RESULTING FROM
INVESTMENT OPERATIONS (27,652,340) 38,085,368
================================================================================
DISTRIBUTIONS TO COMMON STOCKHOLDERS:
Net investment income - -
Net realized gain on investments (13,769,198) (9,211,976)
- --------------------------------------------------------------------------------
Total distributions to Common
Stockholders (13,769,198) (9,211,976)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Reinvestment of distributions to Common
Stockholders 8,549,592 7,749,904
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE
TO COMMON STOCKHOLDERS (32,871,946) 36,623,296
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:
Beginning of year 200,443,125 163,819,829
- --------------------------------------------------------------------------------
End of year $ 167,571,179 $200,443,125
================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
THE ROYCE FUNDS ANNUAL REPORT 2002 | 39
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2002
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Dividends $ 1,031,310
Interest 383,031
- --------------------------------------------------------------------------------
Total income 1,414,341
- --------------------------------------------------------------------------------
Expenses:
Investment advisory fees 3,212,647
Stockholder meeting costs 305,681
Custody and transfer agent fees 123,117
Directors' fees 60,581
Administrative and office facilities expenses 60,521
Stockholder reports 55,912
Professional fees 43,964
Other expenses 65,500
- --------------------------------------------------------------------------------
Total expenses 3,927,923
Fees waived by investment advisor (150,000)
- --------------------------------------------------------------------------------
Net expenses 3,777,923
- --------------------------------------------------------------------------------
Net investment income (loss) (2,363,582)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 16,747,557
Net change in unrealized appreciation on investments (38,936,315)
- --------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (22,188,758)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM INVESTMENT OPERATIONS (24,552,340)
================================================================================
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS (3,100,000)
================================================================================
NET DECREASE IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS
RESULTING FROM INVESTMENT OPERATIONS $(27,652,340)
================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
40 | THE ROYCE FUNDS ANNUAL REPORT 2002
ROYCE MICRO-CAP 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 $11.83 $10.14 $11.00 $10.06 $10.84
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income (loss) (0.13) (0.05) 0.09 0.12 0.13
Net realized and unrealized gain (loss) on investments (1.29) 2.57 1.23 1.35 (0.36)
- ----------------------------------------------------------------------------------------------------------------------------------
Total investment operations (1.42) 2.52 1.32 1.47 (0.23)
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS:
Net investment income - - (0.01) (0.05) (0.06)
Net realized gain on investments (0.18) (0.19) (0.22) (0.18) (0.18)
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions to Preferred Stockholders (0.18) (0.19) (0.23) (0.23) (0.24)
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON
STOCKHOLDERS RESULTING FROM INVESTMENT OPERATIONS (1.60) 2.33 1.09 1.24 (0.47)
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON STOCKHOLDERS:
Net investment income - - (0.09) (0.06) (0.07)
Net realized gain on investments (0.80) (0.57) (1.63) (0.21) (0.22)
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions to Common Stockholders (0.80) (0.57) (1.72) (0.27) (0.29)
- ----------------------------------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Effect of reinvestment of distributions by Common Stockholders (0.04) (0.07) (0.23) (0.03) (0.02)
- ----------------------------------------------------------------------------------------------------------------------------------
Total capital stock transactions (0.04) (0.07) (0.23) (0.03) (0.02)
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.39 $11.83 $10.14 $11.00 $10.06
==================================================================================================================================
MARKET VALUE, END OF PERIOD $8.44 $10.50 $8.625 $9.00 $8.875
==================================================================================================================================
TOTAL RETURN(a):
Market Value (12.7)% 28.8% 15.3% 4.5% (9.4)%
Net Asset Value (13.8)% 23.4% 10.9% 12.7% (4.1)%
RATIOS BASED ON AVERAGE NET ASSETS APPLICABLE TO
COMMON STOCKHOLDERS:
Total expenses (b,c) 1.96% 1.78% 1.32% 1.27% 1.18%
Management fee expense 1.59% 1.57% 1.08% 0.91% 0.80%
Other operating expenses 0.37% 0.21% 0.24% 0.36% 0.38%
Net investment income (loss) (1.23)% (0.43)% 0.74% 1.20% 1.21%
SUPPLEMENTAL DATA:
Net Assets Applicable to Common Stockholders,
End of Period (in thousands) $167,571 $200,443 $163,820 $151,269 $135,495
Liquidation Value of Preferred Stock,
End of Period (in thousands) $40,000 $40,000 $40,000 $40,000 $40,000
Portfolio Turnover Rate 39% 27% 49% 49% 44%
PREFERRED STOCK:
Total shares outstanding 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000
Asset coverage per share $129.73 $150.28 $127.39 $119.54 $109.68
Liquidation preference per share $25.00 $25.00 $25.00 $25.00 $25.00
Average market value per share (d) $25.91 $25.30 $23.08 $24.67 $25.40
==================================================================================================================================
(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 1.62%, 1.46%, 1.06%, 0.98% and 0.92% 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 2.04%,
1.81%, 1.44% and 1.24% for the periods ended December 31, 2002, 2001, 1999
and 1998, respectively.
(d) The average of month-end market values during the period.
THE ROYCE FUNDS ANNUAL REPORT 2002 | 41
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Royce Micro-Cap Trust, Inc. (the "Fund") was incorporated under the
laws of the State of Maryland on September 9, 1993 as a diversified closed-
end investment company. The Fund commenced operations on December 14, 1993.
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:
Effective April 25, 2002, the Fund adopted 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.
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.
42 | THE ROYCE FUNDS ANNUAL REPORT 2002
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. CAPITAL STOCK:
The Fund currently has 1,600,000 shares of 7.75% Cumulative Preferred
Stock outstanding. The stock has 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 the 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 896,290 and 784,403 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 Russell
2000.
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 liquidation value of Preferred Stock for the rolling
36-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 Russell 2000 for the
performance period by more than two percentage points. The performance period
for each such month is a rolling 36-month period ending with such month. 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 Russell 2000 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 Russell 2000 exceeds the investment performance of
the Fund by 12 or more percentage points for the performance period.
Royce has voluntarily committed to waive the portion of its investment
advisory fee attributable to 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 Preferred Stock's dividend rate.
For the year ended December 31, 2002, the Fund accrued and paid Royce
advisory fees totaling $3,062,647, which is net of $150,000 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 $ -- $ 3,817,946
Long-term capital gain 16,869,198 8,494,030
---------- ---------
$16,869,198 $12,311,976
=========== ===========
- --------------------------------------------------------------------------------
As of December 31, 2002, the tax basis components of distributable earnings
included in stockholders' equity were as follows:
- --------------------------------------------------------------------------------
Undistributed long-term gain $ 4,832,853
Unrealized appreciation 26,708,408
Accrued preferred distributions (68,889)
-------
$31,472,372
===========
- --------------------------------------------------------------------------------
THE ROYCE FUNDS ANNUAL REPORT 2002 | 43
ROYCE MICRO-CAP 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 $89,735,728 and $101,913,519, 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
------------------ ------ ---- ------ ---- -------------------- ---------------
Strategic Distribution 18,000 $109,695 122,000 $971,224 $674,038 --
Technical Communications -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
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 increase/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.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF ROYCE MICRO-CAP TRUST, INC.
We have audited the accompanying statement of assets and liabilities of Royce
Micro-Cap Trust, Inc., including the schedule of investments, as of December 31,
2002, and the related statement of operations for the year 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 audits in accordance with auditing standards generally
accepted in the United States of America. 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 audits provide 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 Micro-Cap 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 accounting
principles generally accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, PA
January 15, 2003, except for Note 8, as to which the date is September 12, 2003
44 | THE ROYCE FUNDS ANNUAL REPORT 2002
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 MICRO-CAP TRUST, INC.
BY: /s/ Charles M. Royce
CHARLES M. ROYCE
PRESIDENT
Date: October 7, 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 MICRO-CAP TRUST, INC.
BY: /s/ Charles M. Royce
CHARLES M. ROYCE
PRESIDENT
Date: October 7, 2003
ROYCE MICRO-CAP TRUST, INC.
BY: /s/ John D. Diederich
JOHN D. DIEDERICH
CHIEF FINANCIAL OFFICER
Date: October 7, 2003