DELAWARE GROUP VALUE FUND INC, N-30D, 1996-02-06

DELAWARE GROUP VALUE FUND INC
N-30D, 1996-02-06

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<PAGE>

Delaware Group
- --------------------------------------------------------------------------------
of Funds
- --------------------------------------------------------------------------------

For Growth of Capital
Trend Fund
DelCap Fund
Value Fund

For Total Return
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
Delaware Fund

For Global Diversification
International Equity Fund
Global Assets Fund
Global Bond Fund

For Current Income
Delchester Fund
U.S. Government Fund
Limited-Term Government Fund

For Tax-Free Current Income
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
Tax-Free Pennsylvania Fund

Money Market Funds
Delaware Cash Reserve
U.S. Government Money Fund
Tax-Free Money Fund

Closed-End Equity/Income*
Dividend and Income Fund
Global Dividend and Income Fund

This report must be preceded or accompanied by a current Value Fund prospectus
and the Delaware Group Fund Performance Update for the most recently completed
calendar quarter. For a prospectus of any other Delaware Group fund, contact
your financial adviser or Delaware Group.

* Delaware Group Dividend and Income Fund and Delaware Group Global Dividend and
Income Fund purchases can be made through any registered broker.

DELAWARE
GROUP
=====================
Philadelphia * London

Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Fund are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
are not obligations of or deposits of any bank or any credit union, and involve
investment risk, including the possible loss of principal. Shares of the Fund
are not bank or credit union deposits.

Investment Manager
Delaware Management Company, Inc.
Philadelphia

International Affiliate
Delaware International Advisers Ltd.
London

National Distributor
Delaware Distributors, L.P.
Philadelphia

Shareholder Servicing,
Dividend Disbursing
and Transfer Agent
Delaware Service Company, Inc.
Philadelphia

1818 Market Street
Philadelphia, PA 19103-3682
Nationwide (800) 523-4640

Securities Dealers Only
Nationwide (800) 362-7500

Printed in the U.S.A. on recycled paper.

AR-021[11/95]TKO1/96
<PAGE>

1995
Annual
Report

----------
DELAWARE
GROUP
VALUE
FUND
----------

[PHOTO APPEARS HERE]

A Tradition of Sound Investing Since 1929

DELAWARE
GROUP
=====================
Philadelphia * London
<PAGE>

Value Fund
- --------------------------------------------------------------------------------
Investment
- --------------------------------------------------------------------------------
Objective
- --------------------------------------------------------------------------------

To seek capital appreciation. The Fund's strategy is to invest primarily in
equities with market values that, in the manager's opinion, appear low relative
to their underlying value or future earnings and growth potential.

[PHOTO APPEARS HERE]

About Our Cover
- --------------------------------------------------------------------------------

Headquartered in Philadelphia, Pennsylvania, Delaware Group shares in the
tradition of a city built on the vision of opportunity. Amidst the city's
historic sites, symbolic of our nation's freedom and prosperity, Delaware Group
provides both individual and institutional investors with a conservative,
disciplined approach to money management.

Delaware Group
- --------------------------------------------------------------------------------
A Tradition of
- --------------------------------------------------------------------------------
Sound Investing
- --------------------------------------------------------------------------------

Delaware Management Company's investment experience dates back to 1929. Our
first mutual fund was established in 1938. Headquartered in Philadelphia with an
affiliate in London, Delaware provides a full range of mutual fund investments,
annuities and retirement plan services. Delaware International Advisers Ltd.,
our London-based international affiliate, was established in 1990.

Delaware Group manages mutual funds with the same time-tested, disciplined
strategies demanded by the large public and private pension plans, foundations
and endowments that are among our clients. With over 60 years of experience, we
have demonstrated our commitment to quality investment management and service.

Today, Delaware manages some $28 billion in mutual funds and institutional
investment advisory accounts. We measure our success by the financial success
and satisfaction of our nearly 500,000 shareholders.
<PAGE>

This annual report is for the information of Value Fund shareholders, but it may
be used with prospective investors when preceded or accompanied by a current
Prospectus, which sets forth details about charges, expenses, investment
objectives and operating policies of the Fund. Summary investment results are
documented in the Fund's current Statement of Additional Information. The
figures in this report represent past results which are not a guarantee of
future results. The return and principal value of an investment in the Fund will
fluctuate so that shares, when redeemed, may be worth more or less than their
original cost.

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

Board
- --------------------------------------------------------------------------------
Members
- --------------------------------------------------------------------------------

Wayne A. Stork
Chairman, Delaware Group of Funds
Philadelphia, PA

Walter P. Babich
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA

Anthony D. Knerr
Consultant, Anthony Knerr & Associates
New York, NY

Ann R. Leven
Treasurer, National Gallery of Art
Washington, DC

W. Thacher Longstreth
Vice Chairman, Packquisition Corp.
Philadelphia, PA

Charles E. Peck
Secretary of Enterprise Homes, Inc.
Fredericksburg, VA
former Chairman and CEO
The Ryland Group, Inc.
Columbia, MD

Affiliated
- --------------------------------------------------------------------------------
Officers
- --------------------------------------------------------------------------------

George M. Chamberlain, Jr.
Senior Vice President and Secretary,
Delaware Group of Funds
Philadelphia, PA

Keith E. Mitchell
President and CEO,
Delaware Distributors, L.P.
Philadelphia, PA

David K. Downes
Senior Vice President, Chief Financial Officer and
Chief Administrative Officer
Delaware Group of Funds
Philadelphia, PA
<PAGE>

December 19, 1995

Dear
- --------------------------------------------------------------------------------
Shareholder:
- --------------------------------------------------------------------------------

During the fiscal year ended November 30, 1995, U.S. stocks, especially those of
large companies, enjoyed a strong rally that marked a sharp turnaround from the
relatively weak performance of a year earlier.

Delaware Group's Value Fund, which focuses on small and medium-size
companies we believe to be undervalued, provided a +20.39% total return for the
year at net asset value (capital change plus income based on net asset value for
A Class shares). This was the Fund's best performance since 1992 and a total
return that significantly exceeds the Fund's +14.18% lifetime annual average at
net asset value.

Your Fund achieved these results while starting the fiscal year with a
substantial cash position that reflected a defensive hedge to what we believed
was a rising interest rate environment. In November, 1994, with 30-year U.S.
Treasury bonds yielding as much as 8.21%, we were reluctant to speculate on a
complete reversal of Federal Reserve Board interest rate policy.

As you can see above, in 1995 the Russell 2000 Index and the Lipper Capital
Appreciation Fund Average (157 funds) rose by a greater amount than did the
Fund. However, since the Fund began operating in 1987 it has outperformed both
the unmanaged Russell 2000 Index of small and mid-size companies and the Lipper
Fund Average. Sixty-nine similar funds have been operating since Value Fund's
inception.

Several factors played a role in this year's strong stock market results.
Corporate profits rose substantially and long-term interest rates dropped as
fears of accelerating inflation abated in the spring. The Federal Reserve Board
began to reduce short-term interest rates on July 6, and by early December the
yield on 30-year U.S. Treasury Bonds had fallen to 6.01%, a drop of more than
two full percentage points from a year earlier.

Usually lower interest rates are viewed as most favorable for smaller
businesses because expansion capital becomes cheaper and demand for consumer and
business services grows. However, in 1995 the stock market tended to favor large
capitalization companies with global operations. Indeed, the Dow Jones
Industrial Average, a portfolio of 30 such companies, reached the 5000 point
milestone in late November, up nearly 34% from 3739 a year earlier.

The earnings of multinational conglomerates and technology companies
benefited from favorable currency fluctuations, mergers and healthy export
demand while smaller companies, which tend to be influenced more by domestic
consumer trends, faced a modest slowdown in U.S. economic growth.

<TABLE>
<CAPTION>
Total Average
Annual Return
----------------------------------------
June 24, 1987
12 Months Annualized
Ended Through
November 30, 1995 November 30, 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
Value Fund A Class +20.39% +14.18%
- ------------------------------------------------------------------------------
Russell 2000 Index +28.51% +9.74%
Lipper Capital Appreciation
Fund Average +30.28% +10.13%
- ------------------------------------------------------------------------------
</TABLE>

Value Fund performance and the Lipper Capital Appreciation Fund Average are
based on net asset value without effect of sales charges. All performance
figures quoted above assume reinvestment of dividends and capital gains.
Performance information for all Value Fund Classes can be found on page 7.

==============================================================================

1
<PAGE>

During the year, some investors were attracted to initial public offerings
of small and medium-size technology companies, especially those connected with
the emerging "information superhighway." The stocks of smaller companies in less
glamorous businesses generally did not attract as much speculative attention, or
enjoy as much price appreciation.

Most technology companies did not meet Value Fund's investment criteria (as
explained on page 3) in 1995. On the other hand, in our opinion, selected health
care, finance and cyclical industrial stocks were attractively priced relative
to earnings, book value and other criteria we used in our research. We
positioned the Fund's portfolio accordingly.

Since the summer, the technology surge has faltered amid concern that
"growth" stock prices may be excessive. We hope this may be a harbinger that
"value" stocks will be more broadly recognized by the market in the coming
months.

On August 21, 1995, David Dalrymple became Value Fund's senior portfolio
manager and assumed responsibility for making day-to-day investment decisions
for Value Fund. Inside, Mr. Dalrymple reviews how the Fund was positioned during
the year and shares his outlook for the coming months.

We believe that the Fund's approach to small company investing will gain
more favor as the earnings growth of smaller "value" companies improves relative
to larger companies. We appreciate your continued confidence in Delaware Group.

Sincerely,

/s/ Wayne A. Stork
- ------------------
Wayne A. Stork
Chairman

Portfolio
- --------------------------------------------------------------------------------
Manager's
- --------------------------------------------------------------------------------
Review
- --------------------------------------------------------------------------------

The fiscal period that ended November 30, 1995, was rewarding yet challenging
for investors in smaller "value" companies. While returns provided by small
"value" stocks in 1995 were much higher than their long-term average, results
generally lagged those of larger stocks and small technology companies that fit
the "growth" style of investing.

Generally, a "value" stock is one whose price is at a historical discount
relative to some financial measure - profits, book value, cash flow or other
indicators. Earnings expectations for a "value" company are typically more
modest than expectations for its industry or the overall stock market. Investors
hope a "value" stock's price will rise as the company's earnings improve and as
more investors recognize the company's long-term potential.

A "growth" stock, by contrast, is one whose relative price may be higher
than the market overall. Investors generally expect a "growth" company's
earnings and revenue prospects to be better than the U.S. economy as a whole.

Although some small-cap stocks - such as those in finance and health care -
performed extremely well through November 30, the overall small-cap market, as
measured by the Russell 2000 Index, rose +28.51% and lagged the Standard &
Poor's 500 Index. The S&P 500, a measure of large company stocks, rose +36.93%
with dividends reinvested. Both of these unmanaged indexes contain "value" and
"growth" companies.

2
<PAGE>

We believe the fact that many large cap and/or "growth" stocks have enjoyed
substantial capital appreciation in the past year is an encouraging sign for
Value Fund's niche, as investors may now begin to look more closely at well-
managed, smaller companies whose stock prices have not appreciated as much as
the rest of the market.

Value Fund's portfolio contains many stocks whose price relative to the
company's book value (net worth for accounting purposes) is much lower than the
price-to-book ratio of stocks in the S&P 500 Index. Stocks in the Index traded
at an average of 360% of book value as of November 30, but as you can see in the
table below, companies in Value Fund's portfolio trade

================================================================================
Value Fund
Portfolio Highlights
(As of November 30, 1995)

<TABLE>
<S> <C>
Median Market
Capitalization $432 million
Number of Stocks 114
Median Price-To-Earnings
Ratio* 15.9
Median Price-To-Book
Value 191%
</TABLE>

Top Sector - Credit-Sensitive Companies

*For the most recent 12 months
================================================================================

at less than twice book value (191%.) We believe this difference is an indicator
of price appreciation potential.

Value Fund's Investment Strategy

Value Fund generally invests in companies with a market capitalization of
between $100 million and $2 billion. We tend to be attracted to companies whose
stocks are trading near or at the low end of their historical valuations. Our
goal is to distinguish between companies that are simply "cheap" and those whose
management is improving shareholder value in ways likely to be recognized by the
market within a reasonable time period.

Our research efforts generally include:

. Meeting with a company's top executives and examining sales and earnings
prospects relative to competitors. We favor a strong track record of success
and tend to avoid businesses that have faced prolonged operating challenges.

. Measuring value with a yardstick appropriate to each industry. For example, a
stock's price relative to book value or assets may be used to evaluate a
cyclical manufacturing company. On the other hand, for consumer service
companies, a stock's price relative to earnings or cash flow may be a better
indicator of value.

. Finding at least one performance catalyst, preferably more, that will both
attract investor attention to a company and drive earnings. The catalyst may
be new management or products, a possible spin-off of assets, or an external
development such as a change in government policy. Without such catalysts, a
small, growing company can be like a tree falling in a remote forest - no one
hears the sound.

How We Positioned The Portfolio

During the year we took several steps to position the Fund to benefit from
market developments we believe may occur in 1996, as well as to concentrate our
efforts in sectors that appear to offer the most "value."

Maintain Higher Concentrations of Fewer Stocks

We reduced our number of stocks from 161 to 114 as of November 30 so our
management and research team can devote more time to each holding. Value Fund,
however, remains well-diversified within the small-cap segment of the market. No
one company represented more than 2% of net assets and no one industry was more
than 19% of net assets at fiscal year's end.

3
<PAGE>

Increase Focus on Domestic Equities

Since August, we have sold the Fund's international holdings. Value Fund had a
small percentage of net assets invested in foreign stocks to capture some of the
potential of the global marketplace. Although the Fund has the ability to invest
in foreign "value" stocks, we now focus on the domestic market, believing that
people who want to invest overseas are likely to choose an international or
global fund. Keeping Value Fund a domestically oriented fund minimizes the need
to monitor the potential impact of international investing risks such as
currency fluctuations. We prefer to focus on finding long-term value.

Keep Cash Position Modest

During the year, we actively invested the Fund's cash so that by May 1995, cash,
which represented 35% of net assets at the beginning of the fiscal year, was cut
by more than half. By the end of the fiscal year, cash represented only 10% of
net assets.

In moving the portfolio toward a more fully invested position, our research
efforts led us to add more credit sensitive companies such as regional banks and
consumer growth businesses. We were attracted to companies in health care,
particularly health maintenance organizations (HMOs) and medical products
companies.

Had the Fund been more fully invested a year ago, we might have been in a
position to benefit further from the market's rise. However, in November 1994,
the Federal Reserve Board was still raising interest rates, a policy that it
continued through February 1995. With the yield on 30-year Treasury bonds
climbing as high as 8.21% last fall - a relatively inhospitable level for
borrowers such as small businesses - the Fund's management concluded at the time
that a relatively conservative posture was prudent.

Health Care

Health care stocks represented 11% of net assets as of November 30, up from less
than 1% a year earlier. We found that the stocks of several well-managed service
and products companies were selling at relatively attractive prices. Negative
publicity about internal problems at some HMOs and concerns about cuts in
government aid caused the industry to fall out of favor, a situation we believe
is temporary.

================================================================================

Value Fund's 10 Largest Equity Holdings
(As of November 30, 1995)

<TABLE>
<CAPTION>
Percent of
Company Description Net Assets
<S> <C> <C>
Reynolds & Reynolds Information Management Systems 1.94%
AmeriCredit Corp. Consumer Auto Loans 1.61%
Champion Enterprises Manufactured Housing 1.54%
JLG Industries Construction Equipment Maker 1.54%
Maxicare Health Systems Health Maintenance Organization 1.45%
Centex Corp. Housing and Commercial Builder 1.41%
MidAtlantic Medical Services Health Maintenance Organization 1.40%
West One Bancorp Western Regional Bank 1.39%
First Security Corp. Western Regional Bank 1.37%
The Money Store Consumer Loans 1.36%
- ----------------------------------------------------------------------------------------
Total 15.01%
========================================================================================
</TABLE>

4
<PAGE>

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

[PHOTO OF DAVID DALRYMPLE]

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

A Delaware Group portfolio manager since 1991, David Dalrymple has more than 10
years experience as an equity investment manager. Prior to assuming
responsibility for Value Fund in August, he was assistant portfolio manager of
Delaware Group's DelCap Fund. Mr. Dalrymple holds an MBA from the Cornell
Johnson School of Management and a BS in Business Administration from Clarkson
College. He is a Chartered Financial Analyst and member of the Financial
Analysts Society of Philadelphia.

David C. Dalrymple
Senior Portfolio Manager

. In August, we purchased shares of Marquette Electronics Inc., a Milwaukee
company that makes electrocardiographs, related supplies and patient monitors
for hospitals. Although hospital budgets have been negatively affected by
industry mergers and uncertainty over federal spending and regulation, as of
this writing we believe Marquette is well-positioned. The company is acquiring
a California-based competitor and introducing new products.

Consumer Services

Currently, the market's consensus is that consumer spending was likely to remain
sluggish. Recent economic indicators suggest a continued slowdown in economic
growth, which may have a negative effect on earnings of retail and service-
oriented businesses. We are pleased that within this sector we have been able to
find selected companies that have promising growth prospects.

. During the year we bought shares of Carmike Cinemas Inc., the nation's second
largest operator of movie theaters.

This company specializes in acquiring small-town theaters in the South and
Midwest and then improving their profit margins. Although Hollywood's summer
movies were weak, we believe Carmike can benefit from what appear to be strong
winter film offerings.

The Value Fund Sell Discipline

Knowing when to sell a stock is as important as knowing when to buy.
Sometimes selling a stock can be tough because "value" stocks can turn into
"growth" stocks as investor recognition grows and the company's share price
relative to earnings or other measures rise. Value Fund begins to consider
selling a stock when:

. A company's share price exceeds our objective,

. Investor confidence in the company is exceedingly high,

. A stock's price relative to technical indicators no longer define it as a
value stock.

5
<PAGE>

One company in Value Fund's portfolio that did exceptionally well during
the past fiscal year was The Money Store, a consumer loan company in the
Northeast. We sold it when its price relative to earnings defined it as a growth
stock. Although we believe there may be a continued drop in interest rates in
1996, a trend that could help consumer finance companies, we reduced the Fund's
Money Store holdings to 1.36% of net assets as of the end of fiscal 1995.

Investment Outlook

In the coming months, large companies may find it difficult to improve upon the
robust earnings they enjoyed in the past year given that U.S. economic growth
has slowed and the value of the U.S. dollar has stabilized. On a relative basis,
the earnings growth of selected small companies - especially those whose
fortunes appear to be rising - may begin to attract investors.

We expect the trend toward lower interest rates that began last spring to
continue, perhaps with further help from the Federal Reserve Board. We believe
the resulting lower cost of credit should aid smaller business and help cyclical
industries such as housing grow.

At this time we do not anticipate major changes in the Fund's industry
sector weightings. Value Fund continues to find well-managed companies whose
stocks are trading at what we believe are discount prices. In our opinion, the
Fund is well-positioned to benefit as the market moves into a new cycle that we
think will again favor value stocks.

David C. Dalrymple
Senior Portfolio Manager

Value Fund's
- --------------------------------------------------------------------------------
Lifetime
- --------------------------------------------------------------------------------
Performance
- --------------------------------------------------------------------------------

During the past year, technology stocks and small-cap growth stocks were
investment "hares" in terms of price performance while the "value" segment of
the small-cap sector, the segment in which Value Fund operates, was a proverbial
"tortoise."

In the famous fable, the hare eventually tires while the tortoise continues
to make progress toward a goal. We're not suggesting the Fund is destined to win
an investment "race", but as you can see on page seven, Value Fund has
outperformed the Russell 2000 Index, a broad unmanaged portfolio of small and
mid-cap stocks, since your Fund began operating on June 24, 1987.

A $10,000 investment made on this date would have grown to $28,866 based on
5.75% offer price by November 30, 1995 (based on A Class shares at net asset
value with capital gains and dividends reinvested).

For the period June 24, 1987 through November 30, 1995, Value Fund
outperformed the 69 funds included in the Lipper Capital Appreciation Fund
Average. This group of similar small-cap mutual funds includes funds that use
both the growth and value investment approaches.

We believe the Fund's lifetime record illustrates the benefits of looking
at stock market performance from a long-term perspective, especially in the
often volatile small-cap sector.

6
<PAGE>

Your Fund's performance is compared to that of the Russell 2000 Index and the
Lipper Capital Appreciation Fund Average.

Chart assumes $10,000 invested on June 24, 1987 and includes the effect of the
5.75% front-end sales charge and the reinvestment of all dividends and capital
gains. Performance of other classes of Value Fund will vary due to differing
charges and expenses.

[CHART APPEARS HERE]

RUSSELL 2000 STOCK INDEX

<TABLE>
<CAPTION>
Total
Date Value
---- ------
<S> <C>
12/31/87 7,395
12/31/88 9,245
12/31/89 10,748
12/31/90 8,655
12/31/91 12,640
12/31/92 14,967
12/31/93 17,793
12/31/94 17,468
12/31/95 21,861

Totals 21,861
</TABLE>

RUSSELL 2000 STOCK INDEX
Dividends and Capital Gains Reinvested

Initial Investment Value of Shares
$10,000 $21,861

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DELAWARE GROUP VALUE FUND A CLASS

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

Dividends and Capital Gains Reinvested

Total
Date Value
---- ------
<S> <C>
06/30/87 $9,426.31
12/31/87 $8,629.48
12/31/88 $10,908.50
12/31/89 $14,385.47
12/31/90 $12,494.45
12/31/91 $18,863.08
12/31/92 $21,651.46
12/31/93 $25,727.17
12/31/94 $23,932.07
11/30/95 $28,865.60

Totals $28,864.60
</TABLE>

LIPPER CAPITAL APPRECIATION FUND INDEX

Dividends and Capital Gains Reinvested

Total
Date Value
---- ------
<S> <C>
12/31/87 8,171
12/31/88 9,222
12/31/89 11,837
12/31/90 10,911
12/31/91 15,039
12/31/92 16,176
12/31/93 18,724
12/31/94 18,263
12/31/95 23,763

Totals 23,763
</TABLE>

LIPPER CAPITAL APPRECIATION FUND INDEX
Dividends and Capital Gains Reinvested

Initial Investment Value of Shares
$10,000 $23,763

* The front-end sales charge on A Class was reduced to 4.75% on November 29,
1995. A $10,000 investment at inception would have grown to $29,154 as of
November 30, 1995 assuming a 4.75% sales charge and reinvestment of dividends
and capital gains.

Value Fund Performance
Total Return through November 30, 1995

Class A (Est. 1987)
Average Annual Total Returns

<TABLE>
<CAPTION>
Sales Charge
------------------
5.75% 4.75%
------- -------
<S> <C> <C>
Lifetime +13.39% +13.52%
Five Years +18.24% +18.49%
One Year +13.46% +14.69%
</TABLE>

Class B (Est. 1994)
Average Annual Total Returns

<TABLE>
<CAPTION>
Lifetime
<S> <C>
+11.01% Excluding Sales Charge
+7.84% Including Sales Charge

One Year
+19.55% Excluding Sales Charge
+14.55% Including Sales Charge
</TABLE>

Value Fund's return and share value fluctuate so that shares, when redeemed, may
be worth more or less than their original cost. Past performance is not a
guarantee of future results.

Class A returns reflect the effect of the 5.75% maximum sales charge,
reinvestment of all distributions, and a 12b-1 fee. The front-end sales charge
was reduced to 4.75% on November 29, 1995.

Class B performance reflects the reinvestment of all distributions. Class B
shares do not carry a front-end sales charge, but are subject to a 1% annual
distribution and service fee. They are subject to a deferred sales charge if
redeemed before the end of the sixth year. Lifetime performance "excluding sales
charge" assumes the investment was not redeemed. Class B was initially offered
on September 6, 1994.

The average annual total returns for Value Fund's Institutional Class, which is
available without sales or asset-based distribution charges only to certain
eligible institutional accounts, were +14.31%, +19.87% and +20.76%,
respectively, for the lifetime, five-year and one-year periods ended November
30, 1995. The Institutional Class was initially made available on November 9,
1992. Performance of this Class prior to this date is based on Class A
performance, adjusted to eliminate the sale charges, but not the asset-based
distribution charge.

As of December 1, 1995, the Fund also offers Class C shares, which have a 1%
annual distribution and service fee. A 1% contingent deferred sales charge
applies to shares if redeemed within 12 months. Performance of these shares will
differ from the performance shown above.

7
<PAGE>

Financial
-------------------
Statements
-------------------

Delaware Group Value Fund, Inc.
Statement of Net Assets
November 30, 1995

<TABLE>
<CAPTION>
Number Market
of Shares Value
<S> <C> <C>
COMMON STOCK - 91.36%
Aerospace & Defense - 1.58%
*Moog...................................................... 80,500 $ 1,187,375
Thiokol................................................... 53,700 1,819,088
------------
3,006,463
------------
Automobiles & Automotive Parts - 2.44%
*Custom Chrome............................................. 88,400 2,165,800
Smith (A.O.).............................................. 52,600 1,249,250
Titan Wheel International................................. 71,100 1,217,588
------------
4,632,638
------------
Banking, Finance & Insurance - 18.38%
Allmerica Property & Casualty............................. 97,600 2,488,800
*Americredit............................................... 237,700 3,060,388
California Federal Bank................................... 154,500 2,356,125
First Security............................................ 75,400 2,606,013
Firstmerit................................................ 52,500 1,509,375
Fourth Financial.......................................... 27,800 1,049,450
Hibernia Class A.......................................... 97,900 1,027,950
Horace Mann Educators..................................... 68,600 1,989,400
*Investors Financial Services.............................. 42,600 836,025
Mid Ocean LTD............................................. 56,300 2,097,175
Money Store............................................... 54,550 2,591,125
ONBANCorp................................................. 39,000 1,294,313
PMI Group................................................. 38,500 1,828,750
PartnerRe Limited......................................... 48,300 1,270,894
Prudential Reinsurance Holdings........................... 66,470 1,387,561
Titan Holdings............................................ 37,800 515,025
*Transport Holdings Class A................................ 25,200 970,200
USF&G..................................................... 106,300 1,833,675
Union Planters............................................ 50,500 1,590,750
West One Bancorp.......................................... 53,200 2,640,050
------------
34,943,044
------------
Building, Housing & Materials - 8.33%
Centex.................................................... 81,300 2,672,738
*Centex Construction Products.............................. 55,000 770,000
*Central Sprinkler......................................... 46,500 1,575,188
*Champion Enterprises...................................... 97,400 2,922,000
Continental Homes Holdings................................ 100,100 1,839,338
Elcor..................................................... 61,800 1,290,075
*Griffon................................................... 161,100 1,369,350
Kaufman & Broad Home...................................... 100,600 1,307,800
Patrick Industries........................................ 80,000 1,060,000
*Southern Energy Homes..................................... 57,000 1,018,875
------------
15,825,364
------------
Chemicals - 2.27%
*CFC International......................................... 37,800 366,188
*Carbide/Graphite Group.................................... 54,100 797,975
Ferro..................................................... 56,200 1,250,450
*Scotts.................................................... 93,900 1,895,606
------------
4,310,219
------------
Energy & Energy Services - 8.43%
*Belden & Blake............................................ 80,750 1,302,094
*Chesapeake Energy......................................... 19,000 807,500
Cross Timbers Oil......................................... 38,300 660,675
Devon Energy.............................................. 68,000 1,640,500
*Global Marine............................................. 322,200 2,174,850
*Nabors Industries......................................... 55,000 543,125
*Noble Drilling............................................ 90,375 666,516
*Offshore Logistics........................................ 121,400 1,479,563
*Seacor Holdings........................................... 59,100 1,351,913
*Tom Brown................................................. 101,400 1,292,850
USX-Delhi Group........................................... 107,400 1,100,850
Valero Energy............................................. 74,000 1,914,750
Western Gas Resources..................................... 67,100 1,090,375
------------
16,025,561
------------
Food, Beverage & Tobacco - 2.21%
*Bush Boake Allen.......................................... 53,200 1,635,900
*Daka International........................................ 34,200 970,425
International Multifoods.................................. 68,000 1,589,500
------------
4,195,825
------------
Healthcare & Pharmaceuticals - 11.03%
*Arbor Health Care......................................... 104,800 1,873,300
*Community Health Systems.................................. 56,700 1,941,975
*Lincare Holdings.......................................... 54,300 1,459,313
*Mariner Health Group...................................... 154,100 2,051,456
*Marquette Electronics Class A............................. 83,300 1,603,525
*Maxicare Health Plans..................................... 126,800 2,757,900
*Mid Atlantic Medical Services............................. 109,200 2,661,750
*Multicare................................................. 93,700 1,955,988
Owens & Minor............................................. 64,300 835,900
*Sunrise Medical........................................... 19,000 327,750
*Sybron International...................................... 28,400 1,370,300
*Universal Health Services Class B......................... 51,700 2,132,625
------------
20,971,782
------------
Industrial Machinery - 8.93%
Cascade................................................... 61,800 888,375
*Global Industrial Technologies............................ 128,900 2,287,975
Greenfield Industries..................................... 14,200 438,425
IDEX...................................................... 59,000 2,426,375
JLG Industries............................................ 104,000 2,925,000
Keystone International.................................... 70,900 1,453,450
*MagneTek.................................................. 70,900 584,925
Manitowoc................................................. 34,900 1,025,188
Regal-Beloit.............................................. 96,400 2,120,800
*Rexel..................................................... 118,100 1,594,350
TriMas.................................................... 32,200 619,850
</TABLE>

8
<PAGE>

Statement of Net Assets (Continued)

<TABLE>
<CAPTION>
Number Market
of Shares Value
<S> <C> <C>
COMMON STOCK (Continued)
Industrial Machinery (Continued)
Varlen.................................................... 23,650 $ 617,856
------------
16,982,569
------------
Media, Leisure & Entertainment - 7.12%
Callaway Golf............................................. 38,300 761,213
*Carmike Cinemas-Class A................................... 95,000 2,327,500
*Devon Group............................................... 55,800 2,134,350
*Hollywood Park............................................ 126,700 1,282,838
Polaris Industries........................................ 69,100 2,124,825
Reynolds & Reynolds Class A............................... 96,600 3,682,875
*Valassis Communications................................... 79,500 1,222,313
------------
13,535,914
------------
Metals & Mining - 1.24%
AK Steel Holding.......................................... 45,300 1,568,513
*Lone Star Technologies.................................... 31,800 278,250
*Universal Stainless & Alloy Products...................... 47,300 505,519
------------
2,352,282
------------
Paper & Forest Products - 5.16%
Boise Cascade............................................. 47,000 1,750,750
Chesapeake................................................ 66,200 1,952,900
Longview Fibre............................................ 125,300 2,161,425
Rayonier.................................................. 49,900 1,908,675
Willamette Industries..................................... 33,500 2,035,125
------------
9,808,875
------------
Real Estate - 5.98%
Developers Diversified Realty............................. 59,800 1,689,350
Highwoods Properties...................................... 71,400 1,883,175
Public Storage............................................ 107,600 1,936,800
ROC Communities........................................... 85,900 1,922,013
Reckson Associates Realty................................. 69,700 1,942,888
Starwood Lodging Trust.................................... 72,100 1,991,763
------------
11,365,989
------------
Retail & Apparel - 0.83%
*Lands' End................................................ 63,400 935,150
*Musicland Stores.......................................... 100,900 643,238
------------
1,578,388
------------
Technology - 2.05%
*Cable Design Technologies................................. 18,900 815,063
*Cherry Class A............................................ 52,100 527,513
*Cherry Class B............................................ 48,500 491,063
Methode Electronics Class A............................... 140,100 2,066,475
------------
3,900,114
------------
Textiles & Furniture - 1.35%
Juno Lighting............................................. 95,000 1,508,125
*Mohawk Industries......................................... 61,400 1,066,825
------------
2,574,950
------------
Transportation & Related - 4.03%
*ABC Rail Products......................................... 64,300 1,418,619
Airborne Freight.......................................... 70,900 1,994,063
*Airways................................................... 82,700 795,988
*Landstar Systems.......................................... 47,500 1,217,188
*Mesaba Holdings........................................... 82,700 568,563
TNT Freightways........................................... 84,800 1,664,200
------------
7,658,621
------------
Total Common Stocks
(cost $142,409,821)..................................... 173,668,598
------------
<CAPTION>
Principal
Amount
<S> <C> <C>
SHORT-TERM INVESTMENTS - 3.15%
Federal National Mortgage Association
Discount Notes 12/5/95.................................. $6,000,000 5,996,200
------------
Total Short-Term Investments
(cost $5,996,200)....................................... 5,996,200
------------
REPURCHASE AGREEMENTS - 6.72%
With Chase Manhattan Bank 5.875%
12/1/95 (dated 11/30/95,
collateralized by $4,502,000 U.S.
Treasury Notes 6.125% due 5/31/97,
market value $4,545,207)................................ 4,430,000 4,430,000
With J.P. Morgan Bank 5.875% 12/1/95
(dated 11/30/95, collateralized by
$4,174,000 U.S. Treasury Notes
6.50% due 4/30/97, market value
$4,257,866)............................................. 4,169,000 4,169,000
With PaineWebber 5.85% 12/1/95
(dated 11/30/95, collateralized by
$4,245,000 U.S. Treasury Notes
5.625% due 11/30/00, market
value $4,261,769)....................................... 4,169,000 4,169,000
------------
Total Repurchase Agreements
(cost $12,768,000)...................................... 12,768,000
------------
TOTAL MARKET VALUE OF SECURITIES - 101.23%
(COST $161,174,021)..................................... 192,432,798
LIABILITIES NET OF RECEIVABLES AND
OTHER ASSETS - ( 1.23% )................................ (2,335,223)
------------
NET ASSETS APPLICABLE TO 8,352,173
($.01 PAR VALUE) OUTSTANDING - 100.00%.................. $190,097,575
============
NET ASSET VALUE - VALUE FUND A CLASS
($177,011,337 / 7,776,729 shares)....................... $22.76
======
NET ASSET VALUE - VALUE FUND B CLASS
($5,787,447 / 256,143 shares)........................... $22.59
======
NET ASSET VALUE - VALUE FUND C CLASS
($5,031/ 221 shares).................................... $22.76
======
NET ASSET VALUE - VALUE FUND
INSTITUTIONAL CLASS ($7,293,760 / 319,080 shares)....... $22.86
======
</TABLE>

9
<PAGE>

Statement of Net Assets (Continued)

<TABLE>
<CAPTION>
Market
Value
<S> <C>
COMPONENTS OF NET ASSETS AT NOVEMBER 30, 1995:
Common stock, $.01 par value, 500,000,000 shares
authorized to the Fund with 150,000,000
shares allocated to Value Fund A Class, 100,000,000
shares allocated to Value Fund B Class,
50,000,000 shares allocated to Value Fund C Class,
and 50,000,000 shares allocated to Value Fund
Institutional Class..................................... $149,536,885
Accumulated undistributed income:
Net investment income................................... 2,017,066
Net realized gain on investments and
foreign currencies.................................... 7,285,169
Net unrealized appreciation of investments and
foreign currencies.................................... 31,258,455
------------
Total net assets.......................................... $190,097,575
------------
</TABLE>

- --------------------
* Non-income producing security for the year ended November 30, 1995.

See accompanying notes

Delaware Group Value Fund, Inc.
Statement of Operations
Year Ended November 30, 1995

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................. $2,703,947
Dividends (net of foreign taxes)..................... 2,288,782 $ 4,992,729
----------
EXPENSES:
Management fees ($1,371,155)
and directors' fees ($15,288)...................... 1,386,443
Distribution expenses................................ 559,818
Dividend disbursing and transfer
agent fees and expenses............................ 513,172
Registration fees.................................... 67,427
Reports and statements to shareholders............... 51,448
Salaries............................................. 46,221
Custodian fees....................................... 29,605
Professional fees.................................... 25,076
Taxes, other than taxes on income.................... 19,400
Other................................................ 43,249 2,741,859
---------- -----------
NET INVESTMENT INCOME................................ 2,250,870
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND
FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investment transactions............................ 7,405,943
Foreign currency................................... (151,093)
-----------
Net realized gain.................................. 7,254,850
Net unrealized appreciation of investments
and foreign currency during the period............. 24,932,006
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS..................................... 32,186,856
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS.................................... $34,437,726
===========
NET ASSET VALUE AND OFFERING PRICE PER SHARE
VALUE FUND A CLASS:
Net asset value per share (A)........................ $22.76
Sales charge (4.75% of offering price, or 5.01% of
amount invested per share) (B)..................... 1.14
------
Offering Price....................................... $23.90
======
</TABLE>

- --------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.

(B) See Purchasing Shares in the current Prospectus for purchases of $100,000 or
more. Effective November 29, 1995 the maximum sales charge was reduced from
5.75% to 4.75%.

See accompanying notes
10
<PAGE>

Delaware Group Value Fund, Inc.
Statements of Changes in Net Assets

<TABLE>
<CAPTION>
Year Ended Year Ended
11/30/95 11/30/94
<S> <C> <C>
OPERATIONS:
Net investment income................................. $ 2,250,870 $ 1,400,728
Net realized gain from security
transactions and foreign currencies................. 7,254,850 2,439,590
Net unrealized appreciation (depreciation)
of investments during the period.................... 24,932,006 (9,879,689)
------------ ------------
Net increase (decrease) in net assets
resulting from operations........................... 34,437,726 (6,039,371)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Value Fund A Class.................................. (1,473,989) (268,712)
Value Fund B Class.................................. (13,005) --
Value Fund C Class.................................. -- --
Value Fund Institutional Class...................... (74,067) (21,832)
Net realized gain from security transactions:
Value Fund A Class.................................. (2,306,541) (1,305,068)
Value Fund B Class.................................. (21,675) --
Value Fund C Class.................................. -- --
Value Fund Institutional Class...................... (86,125) (46,393)
------------ ------------
(3,975,402) (1,642,005)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Value Fund A Class.................................. 53,057,497 126,050,942
Value Fund B Class.................................. 4,607,799 1,551,271
Value Fund C Class.................................. 5,030 --
Value Fund Institutional Class...................... 4,893,677 3,152,293
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized
gain from security transactions:
Value Fund A Class.................................. 3,572,237 1,449,342
Value Fund B Class.................................. 32,715 --
Value Fund C Class.................................. -- --
Value Fund Institutional Class...................... 160,192 68,225
------------ ------------
66,329,147 132,272,073
------------ ------------
Cost of shares repurchased:
Value Fund A Class.................................. (87,750,505) (92,020,403)
Value Fund B Class.................................. (998,195) (40,173)
Value Fund C Class.................................. -- --
Value Fund Institutional Class...................... (5,283,529) (2,051,443)
------------ ------------
(94,032,229) (94,112,019)
------------ ------------
Increase (decrease) in net assets derived
from capital share transactions..................... (27,703,082) 38,160,054
------------ ------------
NET INCREASE IN NET ASSETS:........................... 2,759,242 30,478,678
------------ ------------
Beginning of period................................... 187,338,333 156,859,655
------------ ------------
End of period (including undistributed
net investment income of $2,017,066
and $1,327,257, respectively)....................... $190,097,575 $187,338,333
============ ============
</TABLE>

See accompanying notes

Delaware Group Value Fund
Notes to Financial Statements
November 30, 1995

Delaware Group Value Fund, Inc. ("the Fund") is registered as a diversified
open-end investment company under the Investment Company Act of 1940. The Fund
is organized as a Maryland corporation and offers four classes of shares.

1. Significant Accounting Policies

The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund:

Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of 4:00 pm New York time on the valuation date. Securities
not traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Long-term debt securities are valued by an
independent pricing service when such prices are believed to reflect the fair
value of such securities. Money market instruments having less than 60 days to
maturity are valued at amortized cost.

Federal Income Taxes - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes is required in the financial
statements.

Repurchase Agreements - The Fund may invest in a pooled cash account along with
other members of the Delaware Group of Funds. The aggregate daily balance of the
pooled cash account is invested in repurchase agreements secured by obligations
of the U.S. government. The respective collateral is held by the Fund's
custodian bank until the maturity of the respective repurchase agreements. Each
repurchase agreement is 100% collateralized. However, in the event of default or
bankruptcy by the counterparty to the agreement, realization of the collateral
may be subject to legal proceedings.

Class Accounting - Investment income, common expenses, and gains (losses) on
investments are allocated to the various classes of the Fund on the basis of
daily net assets of each class. Distribution expenses relating to a specific
class are charged directly to that class.

Foreign Currencies - The value of all assets and liabilities denominated in
foreign currencies are translated into U.S. dollars at the exchange rate of such
currencies against the U.S. dollar as of 3:00 pm New York time. Forward foreign
currency contracts are valued at the mean between the bid and asked prices of
the contracts. Interpolated values are derived when the settlement date of the
contract is an interim date for which quotations are not available.

Other - Expenses common to all funds within the Delaware Group of Funds are
allocated amongst the funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale of
investment securities are those of the specific securities sold. Dividend income
is recorded on the ex-dividend date and interest income is recorded on an
accrual basis.

Certain fund expenses are paid directly by brokers. The amount of these expenses
is less than 0.01% of the Fund's average net assets.

11
<PAGE>

Notes to Financial Statements (Continued)

2. Investment Management and Distribution Agreements

In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company, Inc. (DMC), the Investment Manager of the
Fund, a fee which is calculated daily at the annual rate of 0.75% of the average
daily net assets of the Fund less fees paid to the independent directors. At
November 30, 1995, the Fund had a liability for Investment Management fees and
other expenses payable to DMC for $28,710.

Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors,
L.P. (DDLP), the Distributor and affiliate of DMC, an annual fee of 0.30% of the
average daily net assets of the A Class and 1.00% of the average daily net
assets of the B Class and the C Class. No distribution expenses are paid by the
Institutional Class. At November 30, 1995, the Fund had a liability for
distribution fees and other expenses payable to DDLP for $6,403. For the year
ended November 30, 1995, the Fund paid DDLP $80,695 for commissions earned on
sales of Value Fund A Class shares.

The Fund has engaged Delaware Service Company,Inc. (DSC), an affiliate of DMC,
to serve as dividend disbursing and transfer agent for the Fund. For the year
ended November 30, 1995, the Fund expensed $513,172 for these services. At
November 30, 1995, the Fund had a liability for such fees and other expenses
payable to DSC for $2,556.

Certain officers of the Investment Manager are officers, directors, and/or
employees of the Fund. These officers, directors, and employees are paid no
compensation by the Fund.

On April 3, 1995, Delaware Management Holdings, Inc., the indirect parent of
DMC, DDLP and DSC, through a merger transaction (the "Merger") became a wholly-
owned subsidiary of Lincoln National Corporation. Other than the resulting
change in ownership, the Merger will not materially change the manner in which
DMC, DDLP and DSC have heretofore conducted their relationships with the Fund.

3. Investments

During the year ended November 30, 1995, the Fund made purchases of $110,242,959
and sales of $91,339,822 of investment securities other than U.S. government
securities and temporary cash investments.

At November 30, 1995, unrealized appreciation for federal income tax purposes
aggregated $31,258,777 of which $36,370,875 related to unrealized appreciation
of securities and $5,112,098 related to unrealized depreciation of securities.

The realized gain for federal income tax purposes was $7,400,341 for the year
ended November 30, 1995.

4. Capital Stock

Transactions in capital stock shares were as follows:

<TABLE>
<CAPTION>
Year Ended Year Ended
11/30/95 11/30/94
<S> <C> <C>
Shares sold:
Value Fund A Class............................ 2,698,238 6,203,942
Value Fund B Class............................ 227,700 77,412
Value Fund C Class............................ 221 --
Value Fund Institutional Class................ 232,840 155,126

Shares issued upon reinvestment of
dividends from net investment
income and distributions of net realized
gain from security transactions:
Value Fund A Class............................ 190,919 70,565
Value Fund B Class............................ 1,750 --
Value Fund C Class............................ -- --
Value Fund Institutional Class................ 8,548 3,317
---------- ----------
3,360,216 6,510,362
---------- ----------
Shares repurchased:
Value Fund A Class............................ (4,401,949) (4,527,081)
Value Fund B Class............................ (48,686) (2,033)
Value Fund C Class............................ -- --
Value Fund Institutional Class................ (251,372) (101,287)
---------- ----------
(4,702,007) (4,630,401)
---------- ----------
Net Increase (decrease)....................... (1,341,791) 1,879,961
========== ==========
</TABLE>

The Fund declared distributions of $0.89 per share from net realized gain from
security transactions and $0.24, $0.095, $0.28 and $0.30 per share for Value
Fund A Class, Value Fund B Class, Value Fund C Class and Value Fund
Institutional Class, respectively, from net investment income, payable on
January 4, 1996 to shareholders of record December 26, 1995. The ex-dividend
date was December 27, 1995.

5. Securities Lending

The market value of securities on loan to broker/dealers at November 30, 1995
was $22,028,813 for which the Fund received cash collateral of $22,666,300.

6. Lines of Credit

The Fund has a committed line of credit for $2,500,000. No amount was
outstanding at November 30, 1995 or at any time during the last fiscal year.

12
<PAGE>

Notes to Financial Statements (Continued)

7. Financial Highlights

Selected data for each share of the Fund outstanding throughout each period were
as follows:

<TABLE>
<CAPTION>
Value Fund A Class
----------------------------------------------------------
Year Ended November 30, 1995
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............................. $19.320 $20.070 $17.750 $ 15.320 $11.050
Income from investment operations:
Net investment income (loss)................................... 0.253 0.142 0.033 0.060 (0.006)
Net realized and unrealized gain (loss) from
security transactions........................................ 3.597 (0.687) 3.147 3.360 4.681
------- ------- ------- ------- -------
Total from investment operations............................... 3.850 (0.545) 3.180 3.420 4.675
Less distributions:
Dividends from net investment income........................... (0.160) (0.035) (0.040) none (0.155)
Distributions from net realized gain from
security transactions........................................ (0.250) (0.170) (0.820) (0.990) (0.250)
------- ------- ------- ------- -------
Total distributions............................................ (0.410) (0.205) (0.860) (0.990) (0.405)
Net asset value, end of period................................... $22.760 $19.320 $20.070 $17.750 $15.320
======= ======= ======= ======= =======

Total return/1/.................................................. 20.39% (2.78%) 18.59% 22.99% 43.61%

Ratios/supplemental data:
Net assets, end of period (000 omitted)........................ $177,011 $179,498 $151,384 $38,792 $12,041
Ratio of expenses to average net assets........................ 1.48% 1.46% 1.64% 1.93% 2.26%
Ratio of net investment income (loss) to average net assets.... 1.18% 0.75% 0.25% 0.39% (0.07%)
Portfolio turnover............................................. 65% 14% 32% 68% 99%
</TABLE>

- --------------------
/1/ Does not include maximum sales charge of 4.75% nor the 1% limited contingent
deferred sales charge that would apply in the event of certain redemptions
within 12 months of purchase.

13
<PAGE>

Notes to Financial Statements (Continued)

7. Financial Highlights (Continued)

Selected data for each share of the Fund outstanding throughout each period were
as follows:

<TABLE>
<CAPTION>
Value Fund
Value Fund B Class C Class Value Fund Institutional Class
---------------------- ------------ ----------------------------------------------

Year 9/6/94/1/ 11/29/95/4/ Year Year Year 11/9/92/1/
Ended to to Ended Ended Ended to
11/30/95 11/30/94 11/30/95 11/30/95 11/30/94 11/30/93 11/30/92
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $19.300 $20.280 $22.510 $19.400 $20.140 $17.750 $17.090
Income from investment operations:
Net investment income....................... 0.141 0.011 none 0.297 0.195 0.092 0.004
Net realized and unrealized gain (loss)
from security transactions................ 3.549 (0.991) 0.250 3.628 (0.685) 3.158 0.656
------- ------- ------- ------- ------- ------- -------
Total from investment operations............ 3.690 (0.980) 0.250 3.925 (0.490) 3.250 0.660
Less distributions:
Dividends from net investment income........ (0.150) none none (0.215) (0.080) (0.040) none
Distributions from net realized gain
from security transactions................ (0.250) none none (0.250) (0.170) (0.820) none
------- ------- ------- ------- ------- ------- -------
Total distributions......................... (0.400) none none (0.465) (0.250) (0.860) none
Net asset value, end of period................ $22.590 $19.300 $22.760 $22.860 $19.400 $20.140 $17.750
======= ======= ======= ======= ======= ======= =======
Total return/2/............................... 19.55% (4.83%) /3/ 20.76% (2.51%) 19.00% 3.86%
Ratios/supplemental data:
Net assets, end of period (000 omitted)..... $5,788 $1,455 $5 $7,294 $6,385 $5,476 $1,558
Ratio of expenses to average net assets..... 2.18% 2.16% /3/ 1.18% 1.16% 1.34% 1.63%
Ratio of net investment income to average
net assets................................ 0.48% 0.05% /3/ 1.48% 1.05% 0.55% 0.69%
Portfolio turnover.......................... 65% 14% /3/ 65% 14% 32% 68%
</TABLE>

- --------------------
/1/ Date of initial public offering; ratios have been annualized and total
return has not been annualized.

/2/ Does not include contingent deferred sales charge which varies from 1% - 4%
depending upon the holding period for Value Fund B Class.

/3/ The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management believes
that such ratios and return for this relatively short period are not
meaningful.

/4/ Date of initial public offering.

See accompanying notes

14
<PAGE>

Delaware Group Value Fund, Inc.
Report of Independent Auditors

To the Shareholders and Board of Directors
Delaware Group Value Fund, Inc.

We have audited the accompanying statement of net assets of the Delaware Group
Value Fund, Inc. as of November 30, 1995, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements and
the financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with 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. Our procedures included confirmation of securities owned as of
November 30, 1995 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 presents fairly, in all material respects, the financial position of
Delaware Group Value Fund, Inc. at November 30, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with general accepted
accounting principles.

Ernst & Young LLP

Philadelphia, Pennsylvania
January 5, 1996

15
<PAGE>

A Report on Value Fund's Annual Meeting

An annual meeting of shareholders held on March 29, 1995. The matters submitted
to a vote of shareholders were: the election of directors, the ratification of
the selection of Ernst & Young LLP as independent auditors of the Fund and the
approval of a new investment management agreement. The new investment management
agreement was submitted for shareholder approval proposed in connection with the
April 3, 1995, merger of Delaware Management Holdings, Inc. (the parent of
Delaware Management Company, Inc.) and a subsidiary of Lincoln National
Corporation. Whenever there is a change in control of an investment manager, the
Investment Company Act of 1940 requires shareholders to vote on a new investment
management agreement.

The names of each director elected at the meeting along with the final vote
tabulation with respect to each nominee and each matter were as follows:

<TABLE>
<CAPTION>
Number of Votes*
------------------------------------------------
For Against/Withheld Abstentions
<S> <C> <C> <C>
Election of Directors:
Wayne A. Stork....................... 5,059,959 206,595 --
Walter P. Babich..................... 5,059,935 206,619 --
Anthony D. Knerr..................... 5,059,959 206,595 --
Ann R. Leven......................... 5,058,657 207,896 --
W. Thacher Longstreth................ 5,059,597 206,957 --
Charles E. Peck...................... 5,059,935 206,619 --
Approval of the New Investment
Management Agreement................. 4,814,264 110,146 342,143
Selection of Ernst & Young LLP
as Independent Auditors.............. 4,972,664 49,722 244,167
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*Please note that the results of this meeting were not audited by Ernst & Young
LLP.