ROYCE VALUE TRUST INC, N-30D, 1997-03-10

ROYCE VALUE TRUST INC
N-30D, 1997-03-10

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Royce Value Trust

Royce Micro-Cap Trust

Royce Global Trust

Financial Statements
December 31, 1996

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<PAGE>
ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------

COMMON STOCKS - 89.8%
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
CONSUMER PRODUCTS - 14.3%
`D'Allen Organ Company Cl. B......... 79,169 $ 3,146,968
Burnham Corporation Cl. A............ 24,300 716,850
Burnham Corporation Cl. B............ 18,000 531,000
Conso Products Co.*.................. 117,375 1,511,203
Ethan Allen Interiors Inc. .......... 67,500 2,598,750
Farmer Bros. Co. .................... 22,000 3,344,000
First Years Inc. .................... 123,872 2,012,920
Flexsteel Industries, Inc. .......... 91,400 1,188,200
Garan Incorporated................... 99,400 1,925,875
Golden Enterprises, Inc. ............ 30,000 232,500
Hershey Creamery Company............. 643 1,089,885
J & J Snack Foods Corp.*............. 52,200 704,700
Johnson Worldwide Associates, Inc.
Cl. A.............................. 173,300 2,296,225
Juno Lighting, Inc. ................. 191,900 3,070,400
K-Swiss Inc. Cl. A................... 177,900 1,756,762
La-Z-Boy Inc. ....................... 9,400 277,300
Lazare Kaplan International, Inc.*... 116,100 1,988,213
Lifetime Hoan Corporation*........... 193,336 2,271,698
Marisa Christina, Incorporated*...... 124,200 1,024,650
Matthews International Corporation
Cl. A.............................. 54,700 1,545,275
Midwest Grain Products, Inc.*........ 192,000 3,264,000
National Presto Industries, Inc. .... 52,800 1,973,400
Oshkosh B'Gosh, Inc. Cl. A........... 15,900 242,475
The Rival Company.................... 64,900 1,614,387
Russ Berrie and Company, Inc. ....... 30,700 552,600
Seaboard Corporation................. 4,050 1,077,300
SEATTLE FILMWORKS, Inc.*............. 84,525 1,722,197
Skyline Corporation.................. 115,700 2,863,575
The L. S. Starrett Company Cl. A..... 80,700 2,289,862
Steck-Vaughn Publishing
Corporation*....................... 55,919 643,069
Sturm, Ruger & Company, Inc. ........ 117,800 2,282,375
Thomaston Mills, Inc. Cl. A.......... 160,400 1,804,500
Thor Industries, Inc. ............... 128,600 3,247,150
The Topps Company, Inc.*............. 353,100 1,412,400
Velcro Industries N.V. .............. 52,600 3,287,500
WLR Foods, Inc. ..................... 20,000 247,500
Weyco Group, Inc. ................... 30,200 1,215,550
------------
62,973,214
------------

CONSUMER SERVICES - 2.4%
Atlantic Southeast Airlines, Inc. ... 35,700 780,938
Bowl America Incorporated Cl. A...... 55,100 365,038
Comair Holdings, Inc. ............... 81,000 1,944,000
Jenny Craig, Inc.*................... 103,900 922,112
Grey Advertising Inc. ............... 13,417 3,394,501

<CAPTION>
Shares Value
<S> <C> <C>
International Dairy Queen, Inc.
Cl.A*.............................. 101,200 $ 2,024,000
MovieFone, Inc. Cl. A*............... 98,300 430,062
True North Communications Inc. ...... 42,000 918,750
------------
10,779,401
------------

FINANCIAL INTERMEDIARIES - 14.0%
Alleghany Corporation*............... 10,103 2,141,836
ALLIED Group, Inc. .................. 94,125 3,070,828
ALLIED Life Financial Corporation.... 94,000 1,645,000
BHI Corporation...................... 46,100 919,119
Baker, Fentress & Company............ 66,102 1,115,471
Baldwin & Lyons, Inc. Cl. B.......... 126,000 2,315,250
W. R. Berkley Corp. ................. 8,500 431,375
Capitol Transamerica Corporation..... 86,650 2,664,487
The Commerce Group, Inc. ............ 126,718 3,199,629
County Bank Corp. ................... 5,000 200,000
Fidelity National Financial, Inc. ... 48,400 732,050
The First National Bank of
Anchorage.......................... 215 345,075
Fremont General Corporation.......... 67,750 2,100,250
Gryphon Holdings Inc.*............... 127,000 1,793,875
Independence Holding Company......... 56,664 435,605
Intercargo Corporation............... 131,100 1,122,544
Keystone Heritage Group, Inc. ....... 27,615 635,145
Lawyers Title Corporation............ 82,500 1,619,062
Leucadia National Corporation........ 104,900 2,806,075
MAIC Holdings, Inc.*................. 38,110 1,290,976
Markel Corporation*.................. 4,200 378,000
THE MECHANICS BANK................... 200 1,440,000
NYMAGIC, INC. ....................... 47,700 858,600
National Bancorp of Alaska, Inc. .... 39,270 2,689,995
Nobel Insurance Limited.............. 119,500 1,501,219
Oriental Bank and Trust.............. 54,720 1,142,280
Orion Capital Corporation............ 44,687 2,731,493
PXRE Corporation..................... 178,711 4,423,085
Pennsylvania Manufacturers
Corporation Cl. A.................. 196,100 3,088,575
Piper Jaffray Companies Inc. ........ 74,400 1,162,500
RLI Corp. ........................... 19,250 642,469
Reliance Group Holdings, Inc. ....... 15,356 37,008
Titan Holdings, Inc. ................ 38,587 636,685
Trenwick Group Inc. ................. 58,500 2,705,625
Wesco Financial Corporation.......... 21,500 4,020,500
Zenith National Insurance Corp. ..... 139,200 3,810,600
------------
61,852,286
------------
</TABLE>

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ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
FINANCIAL SERVICES - 6.1%
E.W. Blanch Holdings, Inc. .......... 92,100 $ 1,853,513
Comdisco, Inc. ...................... 63,950 2,030,412
Crawford & Company Cl. A............. 100,100 2,164,662
Crawford & Company Cl. B............. 50,200 1,148,325
Eaton Vance Corp. ................... 65,100 3,100,387
Arthur J. Gallagher & Co. ........... 96,900 3,003,900
Hilb, Rogal & Hamilton Company....... 202,475 2,682,794
Investors Financial Services
Corporation........................ 39,059 1,083,887
Investors Financial Services
Corporation Cl. A.................. 8,989 249,445
The John Nuveen Company.............. 21,400 567,100
New England Investment Companies,
L.P. .............................. 59,500 1,442,875
Phoenix Duff & Phelps Corporation.... 157,900 1,125,038
The Pioneer Group, Inc. ............. 107,200 2,546,000
Poe & Brown, Inc. ................... 12,712 336,868
U.S. Global Investors Inc. Cl. A*.... 249,205 591,862
Willis Corroon Group plc**........... 265,200 3,049,800
------------
26,976,868
------------
HEALTH - 1.5%
Diagnostic Products Corporation...... 25,200 652,050
Haemonetics Corporation*............. 180,700 3,410,713
Life Technologies, Inc. ............. 65,850 1,646,250
Spacelabs Medical, Inc.*............. 47,200 967,600
------------
6,676,613
------------
INDUSTRIAL PRODUCTS - 21.2%
American Filtrona Corporation........ 50,500 2,139,938
Ameron International Corporation..... 27,000 1,393,875
Art's-Way Manufacturing Co., Inc.*... 45,000 213,750
Ash Grove Cement Company Cl. B....... 77,518 4,399,147
BHA Group, Inc. ..................... 47,190 760,939
Baldor Electric Company.............. 16,500 406,313
Blessings Corporation................ 160,900 1,498,381
W. H. Brady Co. Cl. A................ 83,100 2,046,337
Cascade Corp. ....................... 47,000 757,875
Central Steel & Wire Company......... 3,081 1,771,575
Chemfab Corporation*................. 132,219 1,851,066
CLARCOR Inc. ........................ 19,700 435,862
ConBraCo Industries, Inc. ........... 2,300 1,000,500
Curtiss-Wright Corporation........... 56,300 2,836,112
Decker Manufacturing Corporation..... 6,022 246,902
Delta Woodside Industries, Inc. ..... 106,500 678,938
Fab Industries, Inc. ................ 98,000 2,695,000
<CAPTION>
Shares Value
<S> <C> <C>
Federal Signal Corporation........... 9,000 $ 232,875
`D'General Builders Corporation*..... 73,645 46,028
P. H. Glatfelter Company............. 111,900 2,014,200
Gorman-Rupp Company.................. 24,800 337,900
Hawkins Chemical, Inc. .............. 124,969 890,404
Hirsch International Corp. Cl. A*.... 15,625 289,063
International Aluminum Corporation... 68,600 1,749,300
Kaman Corporation Cl. A.............. 11,700 152,100
Kaydon Corporation................... 70,700 3,331,738
Kimball International, Inc. Cl. B.... 85,900 3,554,112
Knape & Vogt Manufacturing Company... 79,750 1,315,875
LeaRonal, Inc. ...................... 49,650 1,141,950
Lilly Industries, Inc. Cl. A......... 203,483 3,713,565
The Lincoln Electric Company......... 21,990 722,921
The Lincoln Electric Company Cl. A... 63,900 1,932,975
Liqui-Box Corporation................ 52,878 1,718,535
MacDermid, Incorporated.............. 118,777 3,266,367
Mine Safety Appliances Company....... 29,700 1,581,525
Paul Mueller Company................. 53,200 1,995,000
Nordson Corporation.................. 26,700 1,702,125
Oil-Dri Corporation of America....... 37,600 564,000
Oregon Steel Mills, Inc. ............ 83,800 1,403,650
Oshkosh Truck Corporation Cl. B...... 121,600 1,292,000
Peerless Mfg. Co. ................... 57,800 722,500
Penn Engineering and Manufacturing
Inc. .............................. 132,600 2,718,300
Penn Engineering and Manufacturing
Corp. Cl. A........................ 32,300 670,225
Preformed Line Products Company...... 41,300 1,621,025
Puerto Rican Cement Company, Inc. ... 94,900 2,965,625
Quaker Chemical Corporation.......... 92,450 1,513,869
Robroy Industries, Inc. Cl. A........ 51,270 961,313
Shorewood Packaging Corporation*..... 77,600 1,513,200
Simpson Manufacturing Co., Inc.*..... 126,700 2,914,100
Sinter Metals, Inc. Cl. A*........... 49,500 1,472,625
The Standard Register Company........ 165,300 5,372,250
Tecumseh Products Company Cl. A...... 33,300 1,910,587
Thermal Industries, Inc. ............ 42,586 511,032
Unifi, Inc. ......................... 47,000 1,509,875
United Screw and Bolt Corporation.... 4,308 308,022
Versa Technologies, Inc. ............ 78,200 1,016,600
Wellman, Inc. ....................... 25,000 428,125
Woodward Governor Company............ 31,700 4,184,400
</TABLE>

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<PAGE>
ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
INDUSTRIAL PRODUCTS - (continued)
Zero Corporation..................... 70,800 $ 1,416,000
------------
93,810,391
------------
</TABLE>
<TABLE>
<S> <C> <C>
INDUSTRIAL SERVICES - 9.6%
Aceto Corporation.................... 33,340 464,676
Air Express International
Corporation........................ 64,712 2,086,962
Arnold Industries, Inc. ............. 210,648 3,344,037
Guy F. Atkinson Company of
California*........................ 97,200 1,020,600
Bowne & Co., Inc. ................... 43,600 1,073,650
Dames & Moore........................ 38,300 560,137
Devon Group, Inc.*................... 5,000 137,500
Ennis Business Forms, Inc. .......... 204,000 2,295,000
FCA International Ltd.*.............. 194,500 305,126
Fisher Companies Inc. ............... 7,368 722,064
Frozen Food Express
Industries, Inc. .................. 239,935 2,159,415
Gulfmark International Inc.*......... 19,200 1,113,600
The Harper Group..................... 125,825 2,988,344
Insituform Technologies, Inc.*....... 64,600 476,425
JOULE Inc.*.......................... 70,350 255,019
Kenan Transport Company.............. 40,500 799,875
Lawson Products, Inc. ............... 40,300 881,563
Lufkin Industries, Inc. ............. 88,700 2,217,500
Merrill Corporation.................. 99,800 2,295,400
New England Business
Service, Inc. ..................... 108,000 2,322,000
Nichols Research Corporation*........ 13,950 355,725
Perini Corporation*.................. 75,800 592,187
Plenum Publishing Corporation........ 77,600 2,716,000
Rykoff-Sexton, Inc. ................. 135,400 2,149,475
Stone & Webster, Inc. ............... 52,600 1,656,900
TBC Corporation*..................... 262,500 1,968,750
Treadco, Inc. ....................... 99,400 1,043,700
The Turner Corporation*.............. 59,800 612,950
The Union Corporation*............... 9,700 221,887
Vallen Corporation*.................. 199,329 3,313,845
------------
42,150,312
------------
NATURAL RESOURCES - 4.8%
Alico, Inc. ......................... 92,700 1,738,125
Avatar Holdings Inc.*................ 26,425 845,600
Belden & Blake Corporation*.......... 50,000 1,275,000
Tom Brown, Inc.*..................... 47,000 981,125
CalMat Co. .......................... 189,400 3,551,250
Consolidated-Tomoka Land Co. ........ 7,800 129,675
Devon Energy Corporation............. 31,400 1,091,150
FRP Properties, Inc.*................ 119,900 3,057,450
Florida Rock Industries, Inc. ....... 126,300 4,136,325
MK Gold Company*..................... 188,200 282,300

<CAPTION>
Shares Value
<S> <C> <C>
The Newhall Land and Farming
Company............................ 154,700 $ 2,610,562
Pegasus Gold Inc.*................... 10,000 75,625
Toreador Royalty Corporation*........ 97,100 242,750
Vornado Realty Trust................. 21,450 1,126,125
------------
21,143,062
------------
RETAIL - 5.2%
J. Baker, Inc. ...................... 13,000 69,063
Blair Corporation.................... 53,100 1,022,175
The Buckle, Inc.*.................... 22,300 557,500
Catherines Stores Corporation*....... 212,400 1,168,200
Cato Corporation Cl. A............... 133,700 668,500
Charming Shoppes, Inc.*.............. 198,100 1,002,881
Claire's Stores, Inc. ............... 30,900 401,700
Deb Shops Inc. ...................... 133,900 569,075
The Dress Barn, Inc.*................ 233,500 3,502,500
Family Dollar Stores, Inc. .......... 104,900 2,137,338
Frederick's of Hollywood, Inc. Cl.
A.................................. 80,500 332,062
Frederick's of Hollywood, Inc. Cl.
B.................................. 182,296 751,971
Little Switzerland, Inc.*............ 135,800 619,587
Mikasa, Inc.*........................ 97,600 1,000,400
Pier 1 Imports, Inc. ................ 154,405 2,721,388
Sotheby's Holdings, Inc. Cl. A....... 143,400 2,670,825
Stanhome Inc. ....................... 136,900 3,627,850
------------
22,823,015
------------
TECHNOLOGY - 5.9%
Bell Industries, Inc.*............... 17,723 378,829
Communications Systems, Inc. ........ 32,000 480,000
Digital Systems International,
Inc.*.............................. 10,000 160,000
Dionex Corporation*.................. 32,400 1,134,000
Electroglas, Inc.*................... 139,200 2,244,600
Exar Corporation*.................... 124,650 1,932,075
Giga-tronics Incorporated*........... 57,100 478,212
Hach Company......................... 15,000 285,000
IFR Systems, Inc.*................... 16,089 253,402
ILC Technology, Inc.*................ 79,200 1,029,600
Integral Systems, Inc.*.............. 26,300 736,400
Landauer Inc. ....................... 117,100 2,868,950
MacNeal-Schwendler Corporation....... 9,400 74,025
Marshall Industries*................. 136,000 4,165,000
Modern Controls, Inc. ............... 7,300 76,650
National Computer Systems, Inc. ..... 126,200 3,218,100
Newport Corporation.................. 50,900 451,738
Phoenix Technologies Ltd.*........... 21,200 341,850
Richardson Electronics, Ltd. ........ 173,500 1,431,375
`D'Sage Laboratories, Inc. .......... 104,000 1,339,000
Scitex Corporation Limited........... 199,300 1,893,350
</TABLE>

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<PAGE>
ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
TECHNOLOGY - (continued)
Technical Communications
Corporation*....................... 49,800 $ 659,850
Woodhead Industries, Inc. ........... 39,300 540,375
------------
26,172,381
------------
MISCELLANEOUS - 4.8% 21,323,078
------------
Total Common Stocks
(Cost $298,047,915)................ 396,680,621
------------

PREFERRED STOCK - 0.1%
Bird Corp. $1.85 Conv. (Cost
$371,659).......................... 23,750 374,063
------------

CORPORATE BONDS - 1.7%
<CAPTION>

Principal
Amount
<S> <C> <C>

Charming Shoppes, Inc. 7.50% Conv.
Sub. Note due 7/15/06.............. $ 250,000 246,250
Dixie Yarns, Inc. 7.00% Conv. Sub.
Deb. due 5/15/12................... 824,000 655,080
<CAPTION>

Principal
Amount Value
<S> <C> <C>
International Semi-Tech Corp. 0% Sr.
Disc. Note due 8/15/03............. $5,758,000 $ 3,742,700
Reliance Group Holdings, Inc. 9.00%
Sr. Note due 11/15/00.............. 314,000 323,420
Richardson Electronics, Ltd. 7.25%
Conv. Sub. Deb. due 12/15/06....... 2,468,000 2,097,800
Shoney's, Inc. 0% Sub. Conv. Deb. due
4/11/04............................ 1,259,000 517,764
------------
Total Corporate Bonds
(Cost $6,852,481)............................. 7,583,014
------------
REPURCHASE AGREEMENT - 16.9%
State Street Bank and Trust Company, 4.90% due
01/02/97, collateralized by U.S. Treasury
Notes, 10.375% due 11/15/09 valued at
$76,198,432
(Cost $74,700,000)............................ 74,700,000
------------

TOTAL INVESTMENTS - 108.5% (COST
$379,972,055)................................. 479,337,698

LIABILITIES LESS CASH AND OTHER
ASSETS - (8.5%)............................... (37,501,026)
------------

NET ASSETS - 100.0%............................. $441,836,672
------------
------------
</TABLE>

- ------------------------

* Non-income producing.

** American Depository Receipt.

`D' At December 31, 1996, the Fund owned 5% or more of the Company's
outstanding shares thereby making the Company an affiliated person as that
term is defined in the Investment Company Act of 1940.

INCOME TAX INFORMATION - The cost of total investments for federal income tax
purposes was $380,019,451. At December 31, 1996, net unrealized appreciation for
all securities was $99,318,247, consisting of aggregate gross unrealized
appreciation of $112,592,800 and aggregate gross unrealized depreciation of
$13,274,553.

The accompanying notes are an integral part of the financial statements.

<PAGE>

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ROYCE VALUE TRUST, INC.
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost $305,272,055)............................................... $404,637,698
Repurchase agreement (at cost and value).......................................................... 74,700,000
Receivable for investments sold................................................................... 1,077,208
Receivable for dividends and interest............................................................. 758,195
Prepaid expenses and other assets................................................................. 67,035
------------
Total Assets................................................................................. 481,240,136
------------
LIABILITIES:
Notes payable..................................................................................... 38,768,182
Payable for investments purchased................................................................. 377,923
Investment advisory fee payable................................................................... 132,882
Accrued expenses.................................................................................. 124,477
------------
Total Liabilities............................................................................ 39,403,464
------------
Net Assets................................................................................... $441,836,672
------------
------------
Assets applicable to Preferred Stock at a liquidation value of $25 per share...................... $ 60,000,000
------------
------------
Net Assets applicable to Common Stock at a net asset value per share which assumes conversion of
Notes -- $14.32................................................................................. $381,836,672
------------
------------
SUMMARY OF SHAREHOLDERS' EQUITY:
8% Cumulative Preferred Stock -- par value $0.001 per share; 2,400,000 shares outstanding......... $ 2,400
Common Stock -- par value $0.001 per share; 26,348,378 shares outstanding......................... 26,348
Additional paid-in capital........................................................................ 330,836,574
Undistributed net investment income............................................................... 1,292,408
Accumulated net realized gain on investments...................................................... 10,313,299
Net unrealized appreciation on investments........................................................ 99,365,643
------------
Net Assets................................................................................... $441,836,672
------------
------------
</TABLE>

- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended Year ended
December 31, 1996 December 31, 1995
----------------- -----------------
<S> <C> <C>
FROM INVESTMENT OPERATIONS:
Net investment income................................................................ $ 4,559,614 $ 1,030,325
Net realized gain on investments..................................................... 33,673,949 32,580,075
Net change in unrealized appreciation on investments................................. 18,650,893 29,032,226
------------- -------------
Net increase in net assets from investment operations........................... 56,884,456 62,642,626
------------- -------------
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS:
Net investment income................................................................ (218,400) ---
Net realized gain.................................................................... (1,504,800) ---
------------- -------------
Total distributions to Preferred stockholders................................... (1,723,200) ---
------------- -------------
DISTRIBUTIONS TO COMMON STOCKHOLDERS:
Net investment income................................................................ (3,626,059) (693,347)
Net realized gain.................................................................... (24,935,360) (29,124,623)
------------- -------------
Total distributions to Common stockholders...................................... (28,561,419) (29,817,970)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from rights offering.................................................... -- 16,244,838
Proceeds from shares issued for distributions reinvested by Common
stockholders...................................................................... 18,526,484 20,868,997
Net proceeds from issuance of Preferred stock........................................ 57,740,000 ---
------------- -------------
Total capital stock transactions................................................ 76,266,484 37,113,835
------------- -------------
INCREASE IN NET ASSETS.................................................................... 102,866,321 69,938,491
NET ASSETS:
Beginning of year.................................................................... 338,970,351 269,031,860
------------- -------------
End of year (including undistributed net investment income of $1,292,408
and $577,253, respectively)........................................................ $ 441,836,672 $ 338,970,351
------------- -------------
------------- -------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
7

<PAGE>

<PAGE>
ROYCE VALUE TRUST, INC.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C>
Income:
Dividends.................................................................................................. $ 7,006,077
Interest................................................................................................... 2,153,011
-----------
Total Income.......................................................................................... 9,159,088
-----------
EXPENSES:
Interest expense........................................................................................... 2,300,000
Investment advisory fees................................................................................... 1,470,884
Administrative and office facilities expenses.............................................................. 204,974
Amortization of underwriting discount and offering costs................................................... 165,432
Custodian and transfer agent fees.......................................................................... 126,751
Professional fees.......................................................................................... 118,724
Directors' fees............................................................................................ 47,625
Other expenses............................................................................................. 251,324
-----------
Total Expenses........................................................................................ 4,685,714
Fees Waived by Investment Adviser..................................................................... (86,240)
------------
Net Expenses.......................................................................................... 4,599,474
------------
Net Investment Income................................................................................. 4,559,614
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments........................................................................... 33,673,949
Net change in unrealized appreciation on investments....................................................... 18,650,893
-----------
Net realized and unrealized gain on investments....................................................... 52,324,842
-----------
NET INCREASE IN NET ASSETS FROM INVESTMENT OPERATIONS........................................................... $56,884,456
-----------
-----------
</TABLE>

- --------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Investment income received..................................................................................... $ 9,060,260
Interest paid.................................................................................................. (3,450,000)
Payment of operating expenses.................................................................................. (2,229,160)
Purchases of investments....................................................................................... (208,813,635)
Proceeds from sales and maturities of investments.............................................................. 159,451,224
------------
Cash used for operating activities........................................................................ (45,981,311)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of Preferred stock.................................................................. 57,740,000
Cash dividends and distributions paid (net of reinvestment).................................................... (11,758,689)
------------
Cash provided by financing activities..................................................................... 45,981,311
------------
Increase in cash.......................................................................................... --
Cash at beginning of year................................................................................. --
------------
Cash at end of year....................................................................................... $ --
------------
------------
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM INVESTMENT OPERATIONS TO CASH USED FOR OPERATING ACTIVITIES:
Net increase in net assets from investment operations.......................................................... 56,884,456
Net increase in investments.................................................................................... (80,360,109)
Net increase in unrealized appreciation on investments......................................................... (18,650,893)
Increase in dividends and interest receivable.................................................................. (98,828)
Decrease in receivable for investments sold.................................................................... 1,468,455
Accretion of offering costs.................................................................................... 165,432
Decrease in payable for investments purchased.................................................................. (4,157,562)
Decrease in interest payable................................................................................... (1,150,000)
Decrease in accrued expenses and other assets.................................................................. (82,262)
------------
Cash used for operating activities........................................................................ ($45,981,311)
------------
------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
8

<PAGE>

<PAGE>
ROYCE VALUE TRUST, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
This table is presented to show selected data for a share of Common Stock
outstanding throughout each period, and to assist stockholders in evaluating the
Fund's performance for the periods presented.
<TABLE>
<CAPTION>
Years ended December 31,
-----------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR......................................... $ 13.56 $ 12.34 $ 13.47 $ 12.50 $11.23
-------- -------- -------- -------- -------
INCOME FROM INVESTMENT OPERATIONS(A):
Net investment income.................................................... 0.26 0.04 0.04 0.09 0.15
Net realized and unrealized gain on investments.......................... 2.48 2.70 0.09 2.12 2.12
-------- -------- -------- -------- -------
Total from investment operations....................................... 2.74 2.74 0.13 2.21 2.27
-------- -------- -------- -------- -------
DIVIDENDS AND DISTRIBUTIONS TO PREFERRED STOCKHOLDERS:
Net investment income.................................................... (0.09) -- -- -- --
Net realized gain on investments......................................... (0.63) -- -- -- --
-------- -------- -------- -------- -------
Total dividends and distributions to Preferred Stockholders............ (0.72) -- -- -- --
-------- -------- -------- -------- -------
DIVIDENDS AND DISTRIBUTIONS TO COMMON STOCKHOLDERS:
Net investment income.................................................... (0.15) (0.03) (0.01) (0.09) (0.15)
Net realized gain on investments......................................... (1.00) (1.26) (1.04) (1.06) (0.75)
-------- -------- -------- -------- -------
Total dividends and distributions to Common Stockholders............... (1.15) (1.29) (1.05) (1.15) (0.90)
-------- -------- -------- -------- -------
CAPITAL STOCK TRANSACTIONS:
Effect of rights offering................................................ -- (0.12) (0.14) (0.08) (0.06)
Effect of reinvestment of distributions by Common Stockholders........... (0.11) (0.11) (0.07)* (0.01) (0.04)
-------- -------- -------- -------- -------
Total capital stock transactions....................................... (0.11) (0.23) (0.21) (0.09) (0.10)
-------- -------- -------- -------- -------
NET ASSET VALUE, END OF YEAR(A)............................................ $ 14.32 $ 13.56 $ 12.34 $ 13.47 $ 12.50
-------- -------- -------- -------- -------
-------- -------- -------- -------- -------
MARKET VALUE, END OF YEAR.................................................. $ 12.625 $ 11.875 $ 11.000 $ 12.875 $12.250
-------- -------- -------- -------- -------
-------- -------- -------- -------- -------
TOTAL RETURN(B):
Net Asset Value(a)....................................................... 15.5% 22.6% 1.1% 17.9% 19.9%
Market Value............................................................. 16.3% 20.5% -5.6% 14.8% 26.8%
RATIOS BASED ON AVERAGE NET ASSETS:
Total expenses(c).......................................................... 1.20% 2.01% 2.01% 1.33% 0.81%
Management fee expense................................................... 0.36% 0.97% 1.21% 1.09% 0.53%
Interest expense......................................................... 0.60% 0.75% 0.46% -- --
Other operating expenses................................................. 0.24% 0.29% 0.34% 0.24% 0.28%
Net investment income...................................................... 1.19% 0.34% 0.31% 0.74% 1.31%
SUPPLEMENTAL DATA:
Net Assets, End of Year (in thousands)..................................... $441,837 $338,970 $269,032 $246,558 $202,483
Portfolio Turnover Rate.................................................... 34% 32% 35% 33% 40%
Average Commission Rate Paid`D'............................................ $ 0.0574 -- -- -- --
NOTES:
Total amount outstanding (in thousands).................................... $ 40,000 $ 40,000 $ 40,000 -- --
Asset coverage per note.................................................... 1,202% 944% 769% -- --
Average market value per bond(d)........................................... $ 100.68 $ 96.92 $ 95.62 -- --
PREFERRED STOCK:
Total shares outstanding................................................... 2,400,000 -- -- -- --
Asset coverage per share................................................... 481% -- -- -- --
Liquidation preference per share........................................... $ 25.00 -- -- -- --
Average market value per share(d).......................................... $ 25.20 -- -- -- --
</TABLE>

- ------------
(a) Commencing June 21, 1995, Net Asset Value per share, Net Asset Value Total
Return and Income from Investment Operations are calculated assuming the
Notes are fully converted except when the effect of doing so results in a
higher Net Asset Value per share than was calculated without such
assumption. If it were assumed the Notes had not been converted, the Net
Asset Value per share would have been increased by $0.17 at December 31,
1996 and $0.09 at December 31, 1995.
(b) The Net Asset Value and Market Value Total Return assume a continuous Common
stockholder who reinvested all net investment income dividends and capital
gain distributions and fully participated in primary rights offerings.
(c) Expense ratios before waiver of fees by the investment advisor would have
been 1.22%, 2.04% and 2.02% for the years ended December 31, 1996, 1995 and
1994, respectively.
(d) The average of all month-end market values during the period.
* Includes distributions paid January 31, 1994 and distributions paid December
30, 1994.
`D' For fiscal years beginning after October 1, 1995, the Fund is required to
disclose its average commission rate paid per share for purchases and sales
of investments.

The accompanying notes are an integral part of the financial statements.
9

<PAGE>

<PAGE>
ROYCE VALUE TRUST, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Royce Value Trust, Inc. (the 'Fund') was incorporated under the laws of the
State of Maryland on July 1, 1986 as a diversified closed-end investment
company. The Fund commenced operations on November 26, 1986.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of 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
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 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 and supervised 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 and dividend
income is recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. Realized gains and losses from investment transactions and
unrealized appreciation and depreciation of investments are determined on the
basis of identified cost for book and tax purposes.

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:

Dividend and capital gain distributions paid to Preferred Stockholders are
recorded on an accrual basis and distributions paid to Common Stockholders are
recorded on the ex-dividend date. These distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Permanent book and tax basis differences relating to
shareholder distributions will result in reclassification to paid-in capital and
may affect net investment income per share. 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 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 are held by SSB&T until maturity of the repurchase agreements.
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.

NOTE 2. INVESTMENT COMPANY CONVERTIBLE NOTES:

The Fund issued $40,000,000 aggregate principal amount of Investment
Company Convertible Notes (the 'Notes') on June 22, 1994. The Fund received
proceeds of $38,350,000 after the deduction of the underwriting discount and
offering costs incurred by the Fund in connection with the issuance of the
Notes. The underwriting discount and the offering costs of $1,200,000 and
$450,000, respectively, are being accreted on a straight line basis over the
term of the Notes.

The Notes, which are unsecured obligations of the Fund, mature on June 30,
2004 and bear interest payable on June 30 and December 31 of each year at the
rate of 5 3/4% per annum. The Notes have Aaa rating from Moody's Investors
Service, Inc. ('Moody's').

<PAGE>

The Notes are convertible into shares of Common Stock of the Fund at the
option of the holder, at any time prior to maturity, except during the period
from the second trading day prior to the ex-dividend date through the last day
of each year unless an earlier date is selected by the Fund, and unless
previously redeemed at the option of the Fund. The conversion price at December
31, 1996 is $13.19 per share. This conversion price is subject to an annual net
adjustment involving an escalation of 6.75% and a reduction for the impact on
net asset value per share of distributions to Common Stockholders.

Under the Investment Company Act of 1940, the Fund is required to maintain
an asset coverage of at least 300% for the Notes. In addition, the Indenture
governing the Notes requires the Fund to maintain a certain discounted asset
coverage for its portfolio that equals or exceeds the Basic Maintenance Amount
under the guidelines established by Moody's. The Fund has met these requirements
since the issuance of the Notes.

Commencing July 1, 1997, and any time thereafter prior to maturity, the
Fund may, at its option, redeem the Notes in whole or in part for cash at a
price equal to 100% of their principal amount, together with accrued interest
thereon. Prior to July 1, 1997, the Fund will have the option to redeem the
Notes for cash at a price equal to 100% of their principal amount, together with
accrued interest, only if a redemption is necessary for the Fund to maintain the
required asset coverage for the Notes and/or continue to qualify as a regulated
investment company.

On July 1, 1999, if the average market price per $1,000 principal amount of
Notes for the 45 trading days ending May 31, 1999 is less than $950, the Fund
will either call all of the Notes for redemption or reset one or more of the
terms of the Notes so that the market value of the Notes is at or as close as
possible to par.

NOTE 3. CAPITAL STOCK:

On August 23, 1996, the Fund issued and sold 2,400,000 shares of its 8%
Cumulative Preferred Stock. The stock has a liquidation preference of $25.00 per
share plus an amount equal to accumulated and unpaid dividends to the date of
distributions.

Dividends on the Cumulative Preferred Stock are payable when, as and if
declared by the Board of Directors of the Fund, out of funds legally available
annually on December 23 in each year to the holders of record on the preceding
December 6.

The Fund is required to allocate long-term capital gain distributions and
other types of income proportionately among holders of shares of Common Stock,
Preferred Stock and Noteholders (to the extent they receive constructive
distributions). To the extent that dividends on the shares of Preferred Stock
are not paid from long-term capital gains, they will be paid from ordinary
income or net short-term capital gains or will represent a return of capital.

The Fund issued shares of Common Stock as reinvestment of dividends and
distributions by common stockholders totaling 1,512,360 and 1,721,155 for years
ended December 31, 1996 and 1995, respectively. The Fund also issued 1,308,387
additional shares upon the completion of a rights offering during the year ended
December 31, 1995.

NOTE 4. INVESTMENT ADVISORY AGREEMENT:

ADVISORY FEE

As compensation for its services under the Investment Advisory Agreement,
Quest Advisory Corp. ('Quest') receives a fee comprised of a Basic Fee (the
'Basic Fee') and an adjustment to the Basic Fee based on the investment
performance of the Fund in relation to the investment record of the S&P 600.
Prior to July 1, 1996, the Fund's investment performance was measured against
the record of the Standard & Poor's 500 Composite Stock Price Index over a
rolling period of 36 months. The present Investment Advisory Agreement provides
that, for the 18 month period from July 1, 1996 to December 31, 1997, the
monthly fee payable to Quest will be the lower of the fee calculated under it or
the fee that would have been payable to Quest for the month involved under the
prior investment advisory agreement.

Beginning with the month of July 1997 and for each succeeding month under
the present Agreement, the Basic Fee will be a monthly fee equal to 1/12 of 1%
(1% on an annualized basis) of the average of the net assets of the Fund at the
end of each month included in the applicable performance period. The performance
period for each such month will be from July 1, 1996 to the most recent
month-end, until the Investment Advisory Agreement has been in effect for 60
full calendar months, when it will become a rolling 60 month period ending with
the most recent calendar month.

The Basic Fee for each such month will be increased or decreased at the
rate of 1/12 of .05% per percentage point, depending on the extent, if any, by
which the investment performance of the Fund exceeds by more

<PAGE>

<PAGE>
ROYCE VALUE TRUST, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
than two percentage points, or is exceeded by more than two percentage points
by, the percentage change in the investment record of the S&P 600 for the
performance period. The maximum increase or decrease in the Basic Fee for any
month may not exceed 1/12 of .5%. Accordingly, for each month, commencing with
the month of July 1997, the maximum monthly fee rate as adjusted for performance
will be 1/12 of 1.5% and will be payable if the investment performance of the
Fund exceeds the percentage change in the investment record of the S&P 600 by 12
or more percentage points for the performance period. and the minimum monthly
fee rate as adjusted for performance will be 1/12 of .5% and will be payable if
the percentage change in the investment record of the S&P 600 exceeds the
investment performance of the Fund by 12 or more percentage points for the
performance period.

For the period from July 1, 1996 through June 30, 1997 under the present
Agreement, the Basic Fee is calculated as a monthly fee equal to 1/12 of 1% of
the net assets of the Fund at the end of each month in such period. The
performance period relating to such period will be from July 1, 1996 through
June 30, 1997. The Basic Fee for such period is also subject to increase or
decrease as set forth in the preceding paragraph, with the rate of such increase
or decrease being applied on an annualized basis. The maximum increase or
decrease in the Basic Fee for such period may not exceed .5%. Any portion of the
fee for such period, as adjusted as set forth above, in excess of .5% will be
paid at the end of such period.

Notwithstanding the foregoing, Quest will not be entitled to receive any
fee for any month when the investment performance of the Fund for the rolling 36
month period ending with such month is negative on an absolute basis. In the
event that the Fund's investment performance for such a performance period is
less than zero, Quest will not be required to refund to the Fund any fee earned
in respect of any prior performance period.

For the year ended December 31, 1996, the Fund accrued and paid Quest
advisory fees totalling $1,384,644, which is net of $86,240 voluntarily waived
by Quest.

NOTE 5. TRANSACTIONS IN SHARES OF AFFILIATED COMPANIES:

An 'Affiliated Company', as defined in the Investment Company Act of 1940,
is a company in which the Fund owns at least 5% of the company's outstanding
voting securities. The Fund effected the following transactions in shares of
such companies for the year ended December 31, 1996.

<TABLE>
<CAPTION>
Purchases Sales
Affiliated -------------------- ------------------ Realized Dividend
Company Shares Cost Shares Cost Gain/Loss Income
- ---------------- ------- ---------- ------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Allen Organ
Company Cl.
B.............. 47,579 $1,793,703 -- -- -- --
General Builders
Corp........... -- -- -- -- -- --
Sage
Laboratories,
Inc............ -- -- -- -- -- --
</TABLE>

NOTE 6. PURCHASES AND SALES OF INVESTMENT SECURITIES:

For the year ended December 31, 1996, the cost of purchases and proceeds
from sales of investment securities, other than short-term securities, amounted
to $129,980,638 and $136,234,769, respectively.

<PAGE>

<PAGE>
ROYCE VALUE TRUST, INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF ROYCE VALUE TRUST, INC.

We have audited the accompanying statement of assets and liabilities of
Royce Value Trust, Inc., including the schedule of investments, as of December
31, 1996, and the related statements of operations and cash flows for the year
then ended, the statement of changes in net assets and the financial highlights
for each of the two 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. The financial highlights for the three
years in the period ended December 31, 1994, were audited by other auditors
whose report dated February 13, 1995, expressed an unqualified opinion on those
statements.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1996, by correspondence with 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 Value Trust, Inc. at December 31, 1996, the results
of its operations and its cash flows for the year then ended, the changes in its
net assets and the financial highlights for each of the two years in the period
then ended, in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

New York, New York
February 25, 1997

<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

<PAGE>
ROYCE MICRO-CAP TRUST, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------

COMMON STOCKS - 90.6%
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
CONSUMER PRODUCTS - 20.0%
Aldila, Inc.*....................... 220,100 $ 1,066,109
Allen Organ Company Cl. B........... 21,625 859,594
Conso Products Co.*................. 58,300 750,613
Eskimo Pie Corporation.............. 20,000 222,500
Farmer Bros. Co. ................... 5,000 760,000
First Years Inc. ................... 32,700 531,375
Garan Incorporated.................. 53,200 1,030,750
Gibson Greetings, Inc.*............. 64,500 1,265,812
Golden Enterprises, Inc. ........... 80,600 624,650
Haggar Corp. ....................... 22,000 349,250
Johnson Worldwide Associates, Inc.
Cl. A*............................ 67,000 887,750
Juno Lighting, Inc. ................ 74,000 1,184,000
Justin Industries, Inc. ............ 35,700 410,550
K-Swiss Inc. Cl. A.................. 22,800 225,150
Kit Manufacturing Co.*.............. 32,000 360,000
Kleinert's Inc.*.................... 11,600 205,900
Lifetime Hoan Corporation*.......... 109,140 1,282,395
Marisa Christina, Incorporated*..... 65,000 536,250
Matthews International Corporation
Cl. A............................. 53,000 1,497,250
Midwest Grain Products, Inc.*....... 53,900 916,300
Mity-Lite, Inc.*.................... 57,700 721,250
Oshkosh B'Gosh, Inc. Cl. A.......... 41,400 631,350
The Rival Company................... 21,900 544,763
Skyline Corporation................. 31,100 769,725
The Smithfield Companies, Inc. ..... 40,400 444,400
Steck-Vaughn Publishing
Corporation*...................... 42,881 493,132
Thor Industries, Inc. .............. 30,600 772,650
The Topps Company, Inc.*............ 226,800 907,200
Velcro Industries N.V. ............. 18,000 1,125,000
WLR Foods, Inc. .................... 20,000 247,500
Wellco Enterprises, Inc. ........... 10,000 350,000
Weyco Group, Inc. .................. 19,600 788,900
------------
22,762,068
------------
CONSUMER SERVICES - 0.8%
Jenny Craig, Inc.*.................. 71,200 631,900
IHOP Corp.*......................... 10,000 236,250
------------
868,150
------------
FINANCIAL INTERMEDIARIES - 11.9%
ALLIED Life Financial Corporation... 43,600 763,000
BHI Corporation..................... 29,400 586,163
Baldwin & Lyons, Inc. Cl. B......... 28,024 514,941
Capitol Transamerica Corporation.... 26,510 815,183

<CAPTION>
Shares Value
<S> <C> <C>

Desert Community Bank............... 26,300 $ 391,212
Gryphon Holdings Inc.*.............. 38,200 539,575
Hanmi Bank*......................... 27,216 319,788
Independence Holding Company........ 35,800 275,213
Intercargo Corporation.............. 38,600 330,512
Iron and Glass Bancorp, Inc. ....... 22,000 992,750
Lawyers Title Corporation........... 22,900 449,413
MAIC Holdings, Inc.*................ 17,311 586,410
Nobel Insurance Limited............. 87,700 1,101,731
Oriental Bank and Trust............. 41,950 875,706
PXRE Corporation.................... 62,364 1,543,515
Pennsylvania Manufacturers
Corporation Cl. A................. 56,609 891,592
Philadelphia Consolidated
Holding Corp.*.................... 5,000 116,250
Piper Jaffray Companies Inc. ....... 33,600 525,000
Resurgence Properties Inc.*......... 95,500 799,813
Titan Holdings, Inc. ............... 16,835 277,778
Trenwick Group Inc. ................ 19,900 920,375
------------
13,615,920
------------
FINANCIAL SERVICES - 4.7%
E.W. Blanch Holdings, Inc. ......... 53,200 1,070,650
Duff & Phelps Credit Rating Co. .... 54,900 1,324,463
Eaton Vance Corp. .................. 18,600 885,825
Hilb, Rogal & Hamilton Company...... 50,300 666,475
Investors Financial Services
Corporation....................... 11,045 306,499
Phoenix Duff & Phelps Corporation... 156,000 1,111,500
------------
5,365,412
------------
HEALTH - 1.1%
Hauser,Inc.*........................ 16,800 98,700
Nitinol Medical Technologies*....... 92,400 1,155,000
------------
1,253,700
------------
INDUSTRIAL PRODUCTS - 16.9%
AMERICAN BUILDINGS COMPANY*......... 20,400 487,050
American Filtrona Corporation....... 24,600 1,042,425
Art's-Way Manufacturing Co.,
Inc.*............................. 24,000 114,000
Ash Grove Cement Company............ 20,000 1,135,000
BHA Group, Inc...................... 46,310 746,749
Blessings Corporation............... 33,100 308,244
CFC International, Inc.*............ 49,500 556,875
Carbo Ceramics, Inc. ............... 20,000 420,000
Chemfab Corporation*................ 80,700 1,129,800
</TABLE>

The accompanying notes are an integral part of the financial statements.
15

<PAGE>

<PAGE>
ROYCE MICRO-CAP TRUST, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
INDUSTRIAL PRODUCTS - (continued)
Curtiss-Wright Corporation.......... 17,300 $ 871,488
DeVlieg-Bullard, Inc.*.............. 62,500 173,828
Fab Industries, Inc. ............... 42,500 1,168,750
Hawkins Chemical, Inc. ............. 75,455 537,617
C. H. Heist Corp.*.................. 42,000 325,500
Hirsh International Corp. Cl. A*.... 20,387 377,160
International Aluminum
Corporation....................... 19,300 492,150
Lilly Industries, Inc. Cl. A........ 63,700 1,162,525
MacDermid, Incorporated............. 13,577 373,367
Paul Mueller Company................ 8,900 333,750
Myers Industries, Inc. ............. 37,900 639,563
NN Ball and Roller, Inc. ........... 7,000 106,750
Oshkosh Truck Corporation
Cl. B............................. 25,200 267,750
Peerless Mfg. Co. .................. 21,600 270,000
Penn Engineering and Manufacturing
Inc. ............................. 54,700 1,121,350
Penn Engineering and Manufacturing
Corp. Cl. A....................... 11,900 246,925
Pioneer Metals, Inc.*............... 570 122,550
Puerto Rican Cement
Company, Inc. .................... 26,400 825,000
Simpson Manufacturing Co., Inc.*.... 56,500 1,299,500
Synalloy Corporation................ 29,500 464,625
Thermal Industries, Inc. ........... 93,100 1,117,200
Todd Shipyards Corporation*......... 11,800 76,700
UNC, Inc.*.......................... 17,900 214,800
Versa Technologies, Inc. ........... 37,900 492,700
Vertex Communications
Corporation*...................... 10,000 181,250
------------
19,202,941
------------
INDUSTRIAL SERVICES - 12.7%
Aceto Corporation................... 34,250 477,359
Air Express International
Corporation....................... 18,350 591,787
Guy F. Atkinson Company of
California*....................... 67,500 708,750
Devcon International Corp.*......... 80,100 490,612
Devon Group, Inc.*.................. 7,500 206,250
Ennis Business Forms, Inc. ......... 58,100 653,625
FCA International Ltd.*............. 154,200 241,904
Frozen Food Express Industries,
Inc. ............................. 136,300 1,226,700
The Harper Group.................... 18,500 439,375
Kenan Transport Company............. 11,600 229,100
Lufkin Industries, Inc. ............ 36,800 920,000
Merrill Corporation................. 25,400 584,200
New England Business
Service, Inc. .................... 75,300 1,618,950
<CAPTION>
Shares Value
<S> <C> <C>

Nichols Research Corporation*....... 12,700 $ 323,850
Plenum Publishing Corporation....... 27,100 948,500
REFAC Technology Development
Corporation....................... 54,200 318,425
Rush Enterprises, Inc.*............. 33,500 402,000
Sevenson Environmental
Services Inc. .................... 71,500 1,304,875
Standard Commercial Corporation*.... 60,800 1,231,200
Treadco, Inc. ...................... 17,700 185,850
Vallen Corporation*................. 50,500 839,562
Willbros Group Inc.*................ 60,000 585,000
------------
14,527,874
------------
NATURAL RESOURCES - 3.5%
Alamco, Inc.*....................... 40,100 451,125
Alico, Inc. ........................ 5,200 97,500
Belden & Blake Corporation*......... 10,000 255,000
Dreco Energy Services Ltd.
Cl. A*............................ 17,000 622,625
FRP Properties, Inc.*............... 32,700 833,850
Florida Rock Industries, Inc. ...... 47,000 1,539,250
MK Gold Company*.................... 11,800 17,700
McFarland Energy, Inc.*............. 15,400 186,725
------------
4,003,775
------------
RETAIL - 4.6%
Brookstone, Inc.*................... 33,000 346,500
The Buckle, Inc.*................... 9,100 227,500
Catherines Stores Corporation*...... 147,400 810,700
Cato Corporation Cl. A.............. 103,000 515,000
Chico's FAS, Inc.*.................. 132,800 564,400
The Dress Barn, Inc.*............... 61,900 928,500
Ruby Tuesday Inc.*.................. 28,700 530,950
Sterling Electronics Corporation*... 32,000 428,000
Suzy Shier Ltd. .................... 156,800 909,566
------------
5,261,116
------------
TECHNOLOGY - 9.3%
BGS Systems, Inc. .................. 43,000 1,177,125
CEM Corporation*.................... 75,700 605,600
CSP Inc.*........................... 78,400 646,800
Control Devices, Inc.*.............. 50,000 650,000
Dionex Corporation*................. 16,600 581,000
Figgie International Inc. Cl. B*.... 21,300 228,975
Giga-tronics Incorporated*.......... 40,482 339,037
Hach Company........................ 18,750 356,250
Helix Technology Corporation........ 17,740 514,460
ILC Technology, Inc.*............... 78,200 1,016,600
Integral Systems, Inc.*............. 15,400 431,200
Landauer Inc........................ 47,000 1,151,500
</TABLE>

The accompanying notes are an integral part of the financial statements.
16

<PAGE>

<PAGE>
ROYCE MICRO-CAP TRUST, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
TECHNOLOGY - (continued)
MDL Information Systems, Inc.*...... 12,000 $ 223,500
Newport Corporation................. 60,300 535,162
PCD Inc.*........................... 40,000 520,000
Richardson Electronics, Ltd. ....... 105,200 867,900
Sage Laboratories, Inc. ............ 14,500 186,688
Woodhead Industries, Inc. .......... 40,000 550,000
------------
10,581,797
------------
UTILITIES - 0.3%
Southwest Water Company............. 20,804 288,655
------------
MISCELLANEOUS - 4.8%............................ 5,520,733
------------
Total Common Stocks
(Cost $81,979,579)............................ 103,252,141
------------
<CAPTION>
Value
<S> <C> <C>
REPURCHASE AGREEMENT - 9.0%
State Street Bank and Trust Company, 4.90% due
1/02/97, collateralized by U.S. Treasury
Notes, 7.25% due 8/15/04, valued at
$10,407,375 (Cost $10,200,000)................ $10,200,000
------------
TOTAL INVESTMENTS - 99.6%
(COST $92,179,579)............................ 113,452,141
CASH AND OTHER ASSETS LESS
LIABILITIES - 0.4%............................ 500,881
------------
NET ASSETS - 100.0%............................. $113,953,022
------------
------------
</TABLE>

- ------------------------

*Non-income producing.

INCOME TAX INFORMATION -- The cost of total investments for federal income tax
purposes was $92,225,353. At December 31, 1996, net unrealized appreciation for
all securities was $21,226,788, consisting of aggregate gross unrealized
appreciation of $22,681,793 and aggregate gross unrealized depreciation of
$1,455,005.

The accompanying notes are an integral part of the financial statements.
17

<PAGE>

<PAGE>
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments in securities, at value (identified cost $92,179,579)............................................... $ 113,452,141
Receivable for investments sold................................................................................. 392,397
Receivable for dividends and interest........................................................................... 173,280
Deferred organizational costs and other assets.................................................................. 97,960
-------------
Total Assets............................................................................................... 114,115,778
-------------
LIABILITIES:
Payable for investments purchased............................................................................... 42,921
Payable for investment advisory fees............................................................................ 38,469
Payable for administration fees................................................................................. 8,776
Accrued expenses................................................................................................ 72,590
-------------
Total Liabilities.......................................................................................... 162,756
-------------
Net Assets................................................................................................. $ 113,953,022
-------------
-------------
ANALYSIS OF NET ASSETS:
Dividends in excess of net investment income.................................................................... $ (152,608)
Accumulated net realized gain on investments.................................................................... 4,709,893
Net unrealized appreciation on investments...................................................................... 21,272,562
Capital stock................................................................................................... 12,154
Additional paid-in capital...................................................................................... 88,111,021
-------------
Net Assets................................................................................................. $ 113,953,022
-------------
-------------
PRICING OF SHARES:
Net asset value per share
($113,953,022[div]12,153,511 shares outstanding).............................................................. $9.38
-----
-----
</TABLE>

<CAPTION>
Year ended
December 31, 1995
-----------------
<S> <C>
INVESTMENT OPERATIONS:
Net investment income.................................................................. $ 243,167
Net realized gain on investments....................................................... 4,317,779
Net change in unrealized appreciation on investments................................... 14,101,960
-------------
Net increase in net assets from investment operations............................. 18,662,906
-------------
DIVIDENDS AND DISTRIBUTIONS:
Net investment income.................................................................. (217,726)
Net realized gain on investments....................................................... (3,701,343)
-------------
Total dividends and distributions................................................. (3,919,069)
-------------
CAPITAL STOCK TRANSACTIONS:
Dividend and distribution reinvestment................................................. 2,787,701
-------------
NET INCREASE IN NET ASSETS.................................................................. 17,531,538
NET ASSETS:
Beginning of year...................................................................... 82,533,828
-------------
End of year (including distributions in excess of net investment income of $152,608 in
1996 and undistributed net investment income of $25,441 in 1995)...................... $ 100,065,366
-------------
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
18

<PAGE>

<PAGE>
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends...................................................................................................... $ 1,347,077
Interest....................................................................................................... 511,796
----------
Total Income............................................................................................... 1,858,873
----------
EXPENSES:
Investment advisory fees....................................................................................... 499,869
Administration fees............................................................................................ 119,427
Custodian and transfer agent fees.............................................................................. 76,103
Professional fees.............................................................................................. 36,035
Administrative and office facilities expenses.................................................................. 65,968
Directors' fees................................................................................................ 25,633
Other expenses................................................................................................. 88,086
-----------
Total Expenses............................................................................................. 911,121
-----------
Net Investment Income...................................................................................... 947,752
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments............................................................................... 12,128,883
Net change in unrealized appreciation on investments........................................................... 2,989,227
-----------
Net realized and unrealized gain on investments............................................................ 15,118,110
-----------
NET INCREASE IN NET ASSETS FROM INVESTMENT OPERATIONS.............................................................. $16,065,862
-----------
-----------
</TABLE>

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

This table is presented to show selected data for a share outstanding
throughout each period, and to assist stockholders in evaluating the Fund's
performance for the periods presented.
<TABLE>
<CAPTION>
Year ended
December 31,
-------------------------------
1996 1995 1994
-------- -------- -------

<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................................... $ 8.89 $ 7.58 $ 7.27
-------- -------- -------
INVESTMENT OPERATIONS:
Net investment income............................................................ 0.09 0.02 0.01
Net realized and unrealized gain on investments.................................. 1.32 1.69 0.41
-------- -------- -------
Total from investment operations............................................... 1.41 1.71 0.42
-------- -------- -------
DIVIDENDS AND DISTRIBUTIONS:
Net investment income............................................................ (0.10) (0.02) (0.02)
Net realized gain on investments................................................. (0.70) (0.34) (0.03)
-------- -------- -------
Total dividends and distributions.............................................. (0.80) (0.36) (0.05)
-------- -------- -------
CAPITAL STOCK TRANSACTIONS:
Effect of rights offering........................................................ -- -- (0.06)
Effect of reinvestment of distributions.......................................... (0.12) (0.04) --
-------- -------- -------
Total capital stock transactions............................................... (0.12) (0.04) (0.06)
-------- -------- -------
NET ASSET VALUE, END OF PERIOD..................................................... $ 9.38 $ 8.89 $ 7.58
-------- -------- -------
-------- -------- -------
MARKET VALUE, END OF PERIOD........................................................ $ 8.25 $ 8.00 $ 7.00
-------- -------- -------
-------- -------- -------
TOTAL RETURN:(A)
Net Asset Value.................................................................. 16.6% 22.9% 6.0%
Market Value..................................................................... 13.9% 19.8% (5.1)%
RATIOS BASED ON AVERAGE NET ASSETS:
Total expenses..................................................................... 0.85% 1.36% 1.88%
Management Fee Expense......................................................... 0.47% 0.77% 1.20%
Other operating expenses....................................................... 0.38% 0.59% 0.68%
Net investment income (loss)....................................................... 0.88% 0.26% 0.21%
SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands)........................................... $113,953 $100,065 $82,534
Portfolio Turnover Rate............................................................ 51% 51% 23%
Average Commission Rate Paid`D'.................................................... $ 0.0485 -- --

<CAPTION>
For the Period
December 14, 1993*
through
December 31, 1993
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................................... $ 7.25
-------
INVESTMENT OPERATIONS:
Net investment income............................................................ --
Net realized and unrealized gain on investments.................................. 0.02
-------
Total from investment operations............................................... 0.02
-------
DIVIDENDS AND DISTRIBUTIONS:
Net investment income............................................................ --
Net realized gain on investments................................................. --
-------
Total dividends and distributions.............................................. --
-------
CAPITAL STOCK TRANSACTIONS:
Effect of rights offering........................................................ --
Effect of reinvestment of distributions.......................................... --
-------
Total capital stock transactions............................................... --
-------
NET ASSET VALUE, END OF PERIOD..................................................... $ 7.27
-------
-------
MARKET VALUE, END OF PERIOD........................................................ $ 7.50
-------
-------
TOTAL RETURN:(A)
Net Asset Value.................................................................. 0.3%
Market Value..................................................................... 0.0%
RATIOS BASED ON AVERAGE NET ASSETS:
Total expenses..................................................................... 1.92%(b)**
Management Fee Expense......................................................... 0.00%
Other operating expenses....................................................... 1.92%
Net investment income (loss)....................................................... (0.06)%(b)**
SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands)........................................... $ 71,126
Portfolio Turnover Rate............................................................ 0%
Average Commission Rate Paid`D'.................................................... --
</TABLE>

- ------------
* Commencement of operations.
** Annualized.
(a) The Net Asset Value and Market Value Total Returns assume a continuous
stockholder who reinvested all net investment income dividends and capital
gain distributions and fully participated in the primary rights offering.
(b) Presented after waiver by the Investment Adviser and Administrator. For the
period ended December 31, 1993, the ratios of expenses and net investment
loss to average net assets would have been 2.12% and (.26)%, respectively,
absent such waivers.
`D' For fiscal years beginning after October 1, 1995, the Fund is required to
disclose its average commission rate paid per share for purchases and sales
of investments.

The accompanying notes are an integral part of the financial statements.
19
<PAGE>

<PAGE>
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Royce Micro-Cap Trust, Inc. (the 'Fund'), is a closed-end, diversified
management investment company registered under the Investment Company Act of
1940 and was incorporated under the laws of the State of Maryland on September
9, 1993. The Fund commenced operations on December 14, 1993.

The preparation of financial statements in accordance with generally
accepted accounting principles requires Fund management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.

Valuation of Investments:

Investment Transactions and Related Investment Income:

Investment transactions are accounted for on the trade date. Dividend
income is recorded on the ex-dividend date. Interest income is recorded on an
accrual basis. Realized gains and losses from investment transactions and
unrealized appreciation and depreciation of investments are determined on the
basis of identified cost for both book and tax purposes.

Taxes:

Dividends and Distributions:

Dividends and capital gains distributions are recorded on the ex-dividend
date and paid annually in December. These distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Permanent book and tax basis differences relating to
shareholder distributions will result in reclassifications to additional paid-in
capital and may affect net investment income per share. 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 at
fiscal year end will be 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 are held by SSB&T until maturity of the repurchase agreement.
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.

Organizational Expenses:

Costs of $70,000 incurred by the Fund in connection with its organization
have been deferred and are being amortized on a straight line basis over a five
year period from the date the Fund commenced operations.

NOTE 2. INVESTMENT ADVISORY AGREEMENT:

Under the Investment Advisory Agreement between Quest Advisory Corp.
('Quest') and the Fund, the Basic Fee is a monthly fee equal to 1/12 of 1% (1%
on an annualized basis) of the average of the net assets of the Fund at the end
of each month included in the applicable performance period, which is a rolling
period of up to 36 months, beginning January 1, 1994 and ending with the most
recent calendar month.

The Basic Fee for such monthly period may be increased or decreased,
depending on the extent, if any, by which the investment performance of the Fund
exceeds by more than 2 percentage points, or is exceeded by more than 2
percentage points, by the percentage change in the investment record of the
Nasdaq Composite Index (the 'Index') for the performance period.

<PAGE>

<PAGE>
ROYCE MICRO-CAP TRUST, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------

The maximum increase or decrease in the Basic Fee for any month may not
exceed 1/12 of 0.5%. Accordingly, for each month, the maximum fee rate as
adjusted for performance is 1/12 of 1.5% and would be payable if the investment
performance of the Fund exceeds the percentage change in the investment record
of the Index by 12 or more percentage points for the performance period. The
minimum fee rate as adjusted for performance is 1/12 of 0.5% and would be
payable if the percentage change in the investment record of the Index exceeds
the investment performance of the Fund by 12 or more percentage points for the
performance period.

For the year ended December 31, 1996, the Fund paid Quest advisory fees
totaling $499,869.

Effective January 1, 1997, the Fund entered into a new investment advisory
agreement with Quest which changed the benchmark index to the Russell 2000.

NOTE 3. ADMINISTRATION AGREEMENT:

Effective March 1, 1996, Mitchell Hutchins Asset Management Inc. (the
'Administrator') entered into an amended Administration Agreement with the Fund.
In accordance with the Administration Agreement, the Administrator performs or
assists in certain aspects of the Fund's operations. As compensation for its
services, the Administrator is paid an annual fee, payable monthly, of $50,000
plus 0.05% on the first $125 million of the Fund's average daily net assets, and
0.03% of average daily net assets exceeding $125 million.

NOTE 4. CAPITAL STOCK:

At December 31, 1996, there were 150,000,000 shares of common stock, $0.001
par value, authorized. Capital stock transactions were as follows:

<TABLE>
<CAPTION>
Year ended Year ended
December 31, 1996 December 31, 1995
--------------------- ---------------------
Shares Amount Shares Amount
------- ---------- ------- ----------

<S> <C> <C> <C> <C>
Dividend and
distribution
reinvestment...... 895,501 $6,828,202 371,693 $2,787,701
</TABLE>

NOTE 5. PURCHASES AND SALES OF SECURITIES:

For the year ended December 31, 1996, the cost of purchases and the
proceeds from sales of investment securities, excluding short-term securities,
amounted to $49,154,327 and $56,149,457, respectively.

<PAGE>

<PAGE>
ROYCE MICRO-CAP TRUST, INC.
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, 1996, and the related statement of operations for the year then
ended, the statement of changes in net assets and the financial highlights for
each of the two 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 audit. The financial highlights for the year
ended December 31, 1994 and the period ended December 31, 1993, were audited by
other auditors whose report dated February 13, 1995, expressed an unqualified
opinion on those statements.

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, 1996, the
results of its operations for the year then ended, the changes in its net assets
and the financial highlights for each of the two years in the period then ended,
in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

New York, New York
February 25, 1997

<PAGE>

<PAGE>
ROYCE GLOBAL TRUST, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------

COMMON STOCKS - 69.4%
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
CONSUMER PRODUCTS - 10.4%
A.T. Cross Company Cl. A................. 34,400 $ 399,900
Johnson Worldwide Associates, Inc. Cl.
A*..................................... 23,700 314,025
K - Swiss Inc. Cl. A..................... 25,000 246,875
Lazare Kaplan International, Inc.*....... 50,000 856,250
Kao Corp. ............................... 40,000 465,237
Semi - Tech Corp.*....................... 177,500 654,531
Universal Corporation.................... 20,000 642,500
Velcro Industries N.V. .................. 16,200 1,012,500
-----------
4,591,818
-----------
CONSUMER SERVICES - 2.4%
Groupe AB SA *`D'........................ 25,000 359,375
International Dairy Queen, Inc. Cl. A*... 35,000 700,000
-----------
1,059,375
-----------
FINANCIAL INTERMEDIARIES - 7.8%
BHI Corporation.......................... 31,400 626,037
Barclays plc............................. 2,000 137,500
Leucadia National Corporation............ 29,200 781,100
PXRE Corporation......................... 36,000 893,250
PartnerRe Holdings Ltd. ................. 10,000 340,000
Trenwick Group Inc. ..................... 14,100 652,125
-----------
3,430,012
-----------
FINANCIAL SERVICES - 10.2%
Alexander & Alexander Services Inc. ..... 39,000 677,625
E.W. Blanch Holdings, Inc. .............. 24,000 483,000
Duff & Phelps Credit Rating Co. ......... 10,000 241,250
Arthur J. Gallagher & Co. ............... 5,000 155,000
INVESCO PLC.............................. 5,000 221,875
LaSalle Re Holdings Limited.............. 5,000 146,250
Lexington Global Asset Managers, Inc.*... 11,300 70,625
MacKenzie Financial Corporation.......... 45,700 605,525
Phoenix Duff & Phelps Corporation........ 29,600 210,900
The Pioneer Group, Inc. ................. 29,500 700,625
Willis Corroon Group plc `D'............. 86,300 992,450
-----------
4,505,125
-----------
HEALTH - 1.0%
Haemonetics Corporation*................. 23,800 449,225
-----------
INDUSTRIAL PRODUCTS - 14.3%
Blessings Corporation.................... 48,500 451,656
CIA VALE DO RIO DOCE`D'.................. 25,000 481,250
Grupo Imsa, S.A. de C.V.*................ 15,000 285,000
Imation Corp.*........................... 1,500 42,187

<CAPTION>
Shares Value
<S> <C> <C>

Kaydon Corporation....................... 14,500 $ 683,313
The Lincoln Electric Company............. 18,000 591,750
The Lincoln Electric Company Cl. A....... 10,000 302,500
Nordson Corporation...................... 5,000 318,750
Penn Engineering and Manufacturing Corp.
Cl. A.................................. 26,800 556,100
Puerto Rican Cement Company, Inc. ....... 20,000 625,000
Simpson Manufacturing Co., Inc.*......... 11,000 253,000
Tecumseh Products Company................ 10,400 591,500
Unifi, Inc. ............................. 18,500 594,313
Woodward Governor Company................ 4,000 528,000
-----------
6,304,319
-----------
INDUSTRIAL SERVICES - 7.7%
APT Satellite Holdings Limited*.......... 12,500 175,000
Air Express International Corporation.... 7,000 225,750
Cordiant, Inc. plc *`D'.................. 10,700 53,500
DIMON Incorporated....................... 30,500 705,313
The Harper Group......................... 10,600 251,750
Morrison Knudsen Corporation*............ 10,000 90,000
THE OLSTEN CORPORATION................... 45,000 680,625
Pittston Burlington Group................ 5,800 116,000
Standard Commercial Corporation*......... 43,380 878,445
Willbros Group Inc.*..................... 21,600 210,600
-----------
3,386,983
-----------
NATURAL RESOURCES - 0.6%
MK Gold Company*......................... 188,000 282,000
-----------
RETAIL - 9.8%
Amway Japan Limited...................... 14,500 241,063
Claire's Stores, Inc. ................... 50,000 650,000
InterTAN Inc.*........................... 61,800 301,275
Royal Co. Ltd. .......................... 35,000 648,316
Sotheby's Holdings, Inc. Cl. A........... 24,000 447,000
Stanhome Inc. ........................... 30,200 800,300
Suzy Shier Ltd. ......................... 127,800 741,288
The Talbots, Inc. ....................... 17,500 500,938
-----------
4,330,180
-----------
TECHNOLOGY - 5.2%
CEM Corporation*......................... 51,400 411,200
Marshall Industries*..................... 19,300 591,062
National Computer Systems, Inc. ......... 23,000 586,500
Scitex Corporation Limited............... 75,800 720,100
-----------
2,308,862
-----------
Total Common Stocks
(Cost $ 29,444,370).................... 30,647,899
-----------
</TABLE>

<PAGE>

<PAGE>
ROYCE GLOBAL TRUST, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C> <C>
U.S. TREASURY OBLIGATION - 13.6%
U.S. Treasury Notes, principal amount $6,000,000,
6.00% due 11/30/97 (Cost $5,952,831)............ $ 6,014,819
-----------
TOTAL INVESTMENTS - 83.0% (COST $35,397,201)......
36,662,718

CASH AND OTHER ASSETS LESS LIABILITIES - 17.0%....
7,491,580
-----------
NET ASSETS - 100.0%............................... $44,154,298
-----------
-----------
</TABLE>

- ------------------------

* Non-income producing.

`D' American Depository Receipt.

INCOME TAX INFORMATION - The cost of total investments for federal income tax
purposes was $35,397,201. At December 31, 1996, net unrealized appreciation for
all securities amounted to $1,265,517, consisting of aggregate gross unrealized
appreciation of $1,680,575 and aggregate gross unrealized depreciation of
$415,058.

The accompanying notes are an integral part of the financial statements.

<PAGE>

<PAGE>
ROYCE GLOBAL TRUST, INC.
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 1996
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (identified cost $35,397,201).................................................... $36,662,718
Cash................................................................................................................. 10,512,473
Receivable for investments sold...................................................................................... 59,650
Receivable for dividends and interest................................................................................ 150,807
-----------
Total Assets.................................................................................................... 47,385,648
-----------
LIABILITIES:
Payable for investments purchased.................................................................................... 3,179,107
Accrued expenses..................................................................................................... 52,243
-----------
Total Liabilities............................................................................................... 3,231,350
-----------
Net Assets...................................................................................................... $44,154,298
-----------
-----------
ANALYSIS OF NET ASSETS:
Undistributed net investment income.................................................................................. $ 833,775
Accumulated net realized gain on investments......................................................................... 2,062,530
Net unrealized appreciation on investments and foreign currency...................................................... 1,264,431
Capital Stock........................................................................................................ 79,984
Additional paid-in capital........................................................................................... 39,913,578
-----------
Net Assets...................................................................................................... $44,154,298
-----------
-----------
PRICING OF SHARES:
Net asset value per share ($44,154,298[div]7,998,419 shares outstanding)............................................. $5.52
-----
-----
</TABLE>

<TABLE>
<CAPTION>
Years ended December 31,
----------------------------
1996 1995
------------ ------------
<S> <C> <C>
INVESTMENT OPERATIONS:
Net investment income.......................................................................... $ 760,943 $ 1,157,628
Net realized gain (loss) on investments and foreign currency................................... 3,733,788 (687,847)
Net change in unrealized appreciation on investments and foreign currency...................... (1,218,086) 3,707,341
------------ ------------
Net increase in net assets from investment operations.......................................... 3,276,645 4,177,122
------------ ------------
DIVIDENDS AND DISTRIBUTIONS:
Net investment income.......................................................................... -- (1,334,993)
Net realized gain on investments and foreign currency.......................................... -- (60,617)
------------ ------------
Total dividends and distributions.............................................................. -- (1,395,610)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Common Stock repurchased....................................................................... (507,185) (2,502,956)
------------ ------------
NET INCREASE IN NET ASSETS.......................................................................... 2,769,460 278,556
NET ASSETS:
Beginning of year.............................................................................. 41,384,838 41,106,282
------------ ------------
End of year (including undistributed net investment income of $833,775 in 1996 and $277,458 in
1995)......................................................................................... $ 44,154,298 $ 41,384,838
------------ ------------
------------ ------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
25

<PAGE>

<PAGE>
ROYCE GLOBAL TRUST, INC.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends.......................................................................................................... $ 362,714
Interest........................................................................................................... 1,204,782
-----------
Total Income................................................................................................... 1,567,496
-----------
EXPENSES:
Investment advisory fees........................................................................................... 423,497
Custodian and transfer agent fees.................................................................................. 99,627
Professional fees.................................................................................................. 131,792
Directors' fees.................................................................................................... 51,952
Other expenses..................................................................................................... 173,457
-----------
Total Expenses................................................................................................. 880,325
Fees Waived by Investment Advisor.............................................................................. (73,772)
-----------
Net Expenses................................................................................................... 806,553
-----------
Net Investment Income.......................................................................................... 760,943
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on investments and foreign currency.............................................................. 3,733,788

Net change in unrealized appreciation on investments and foreign currency.......................................... (1,218,086)
-----------
Net realized and unrealized gain on investments and foreign currency........................................... 2,515,702
-----------
NET INCREASE IN NET ASSETS FROM INVESTMENT OPERATIONS.................................................................. $ 3,276,645
-----------
-----------
</TABLE>

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

This table is presented to show selected data for a share outstanding
throughout each period, and to assist stockholders in evaluating the Fund's
performance for the periods presented.
<TABLE>
<CAPTION>
Years ended December 31,
----------------------------------------
1996 1995 1994 1993
------- ------- ------- -------

<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR................................................... $ 5.09 $ 4.70 $ 5.24 $ 4.99
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.............................................................. 0.06 0.13 0.19 0.04
Net realized and unrealized gain on investments and foreign currency............... 0.35 0.36 (0.62) 0.46
------- ------- ------- -------
Total from investment operations................................................. 0.41 0.49 (0.43) 0.50
------- ------- ------- -------
DIVIDENDS AND DISTRIBUTIONS:
Net investment income.............................................................. -- (0.16) (0.11) (0.03)
Net realized gain on investments and foreign currency.............................. -- (0.01) -- (0.22)
Other sources...................................................................... -- -- -- --
------- ------- ------- -------
Total dividends and distributions................................................ -- (0.17) (0.11) (0.25)
------- ------- ------- -------
CAPITAL STOCK TRANSACTIONS........................................................... 0.02 0.07 -- --
------- ------- ------- -------
NET ASSET VALUE, END OF YEAR......................................................... $ 5.52 $ 5.09 $ 4.70 $ 5.24
------- ------- ------- -------
------- ------- ------- -------
MARKET VALUE, END OF YEAR............................................................ $ 4.59 $ 4.19 $ 3.56 $ 4.31
------- ------- ------- -------
------- ------- ------- -------
TOTAL RETURN:(A)
Market Value....................................................................... 9.6% 22.3% (17.4)% 9.3%
RATIOS BASED ON AVERAGE NET ASSETS:
Total expenses(b).................................................................. 1.91% 2.14% 2.27% 2.43%
Net investment income.............................................................. 1.80% 2.80% 3.81% 0.74%
SUPPLEMENTAL DATA:
Net Assets, End of Year (in thousands)............................................... $44,154 $41,385 $41,106 $45,839
Portfolio Turnover Rate.............................................................. 159% 76% 483% 445%
Average Commission Rate Paid`D'...................................................... $0.0396 -- -- --

1992
-------
<S> <C>
NET ASSET VALUE, BEGINNING OF YEAR................................................... $ 6.01
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.............................................................. 0.04
Net realized and unrealized gain on investments and foreign currency............... (0.64)
-------
Total from investment operations................................................. (0.60)
-------
DIVIDENDS AND DISTRIBUTIONS:
Net investment income.............................................................. (0.02)
Net realized gain on investments and foreign currency.............................. (0.05)
Other sources...................................................................... (0.35)
-------
Total dividends and distributions................................................ (0.42)
-------
CAPITAL STOCK TRANSACTIONS........................................................... --
-------
NET ASSET VALUE, END OF YEAR......................................................... $ 4.99
-------
-------
MARKET VALUE, END OF YEAR............................................................ $ 4.06
-------
-------
TOTAL RETURN:(A)
Market Value....................................................................... (3.3)%
RATIOS BASED ON AVERAGE NET ASSETS:
Total expenses(b).................................................................. 2.21%
Net investment income.............................................................. 0.67%
SUPPLEMENTAL DATA:
Net Assets, End of Year (in thousands)............................................... $43,615
Portfolio Turnover Rate.............................................................. 267%
Average Commission Rate Paid`D'...................................................... --
</TABLE>

- ------------

(a) Market Value Total Return is based on the change in market price per share
during the year and assumes reinvestment of distributions at actual prices
pursuant to the Fund's dividend reinvestment plan.

(b) Expense ratios are shown after fee waivers by the investment advisor. For
the year ended December 31, 1996, the expense ratio before the waiver would
have been 2.08%.

`D' For fiscal years beginning after October 1, 1995, the Fund is required to
disclose its average commission rate paid per share for purchases and sales
of investments.

The accompanying notes are an integral part of the financial statements.
26

<PAGE>

<PAGE>
ROYCE GLOBAL TRUST, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Royce Global Trust, Inc. (the 'Fund'), formerly known as All Seasons Global
Fund, Inc., is a closed-end, diversified management investment company
registered under the Investment Company Act of 1940. The Fund commenced
operations on March 2, 1988.

Valuation of investments:

Foreign Currency

The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with net realized and unrealized gains and losses on
investments.

Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, expiration of
currency forward contracts, currency gains or losses realized between the trade
and settlement dates on securities transactions, the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books, and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities, including investments in securities at fiscal
year end, resulting in the exchange rate.

Investment transactions and related investment income:

Taxes:

Dividends and Distributions:

Dividend and capital gains distributions if any, are recorded on the
ex-dividend date and paid annually in December. These distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. Permanent book and tax basis
differences relating to shareholder distributions will result in
reclassification to paid-in capital and may affect net investment income per
share. 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 at fiscal year end will be distributed in the following year.

<PAGE>

<PAGE>
ROYCE GLOBAL TRUST, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------

NOTE 2. INVESTMENT ADVISORY AGREEMENT:

The current Investment Advisory Agreement between Quest Advisory Corp.
('Quest') and the Fund provides for fees equal to 1% per annum of the average
net assets of the Fund. For the period from November 1, 1996 through December
31, 1996, Quest waived the total advisory fee of $73,772. Prior to November 1,
1996, the Fund was party to a management agreement with Veitia and Associates,
Inc. to conduct the management and investment activity of the Fund. That
agreement provided for managment fees, computed daily and payable monthly, at an
annualized rate of 1.0% of the Fund's average daily net assets up to the first
$100 million of assets; 0.85% of 1% of average daily net assets in excess of
$100 million but not in excess of $250 million; and 0.70% of 1% of average daily
net assets in excess of $250 million. For the period January 1, 1996 through
October 31, 1996, the Fund accrued and paid management fees totaling $349,725.

NOTE 3. CAPITAL STOCK:

For the year ended December 31, 1996, the Fund repurchased 125,038 of
common stock at an average market price per share of $4.02 and a weighted
average discount from net asset value of 22.5% per share. The cost of the
repurchased shares was $507,185.

NOTE 4. PURCHASES AND SALES OF INVESTMENT SECURITIES:

For the year ended December 31, 1996, the cost of purchases and proceeds
from sales of investment securities, excluding short-term securities, amounted
to $58,192,278 and $66,015,109, respectively.

<PAGE>

<PAGE>
ROYCE GLOBAL TRUST, INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF ROYCE GLOBAL TRUST, INC.

We have audited the accompanying statement of assets and liabilities of
Royce Global Trust, Inc., including the schedule of investments, as of December
31, 1996, and the related statement of operations, the statement of changes in
net assets and the financial highlights for the year 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 audit. The statement of changes
in net assets for the year ended December 31, 1995 and the financial highlights
for each of the four years in the period ended December 31, 1995 were audited by
other auditors whose report dated January 24, 1996 expressed an unqualified
opinion on that statement and financial highlights.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1996, 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 Global Trust, Inc. at December 31, 1996, the results
of its operations changes in its net assets and the financial highlights for the
year then ended, in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

New York, New York
February 25, 1997

STATEMENT OF DIFFERENCES
------------------------

The dagger symbol shall be expressed as.........`D'
The division symbol shall be expressed as.....[div]