N-CSR/A 1 rmc_63461-ncsra.txt 12-31-2002 AMENDED ANNUAL REPORT 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