Edgar Filing: TCW CONVERTIBLE SECURITIES FUND INC

[TCW LOGO]-Registered Trademark-
TCW CONVERTIBLE
SECURITIES FUND, INC.
-------------------------------
DIRECTORS AND OFFICERS
Ernest O. Ellison
CHAIRMAN AND DIRECTOR
Norman Barker, Jr.
DIRECTOR
Samuel P. Bell
DIRECTOR
Richard W. Call
DIRECTOR
Matthew K. Fong
DIRECTOR
John A. Gavin
DIRECTOR
Patrick C. Haden
DIRECTOR
Charles A. Parker
DIRECTOR
Robert G. Sims
DIRECTOR

Alvin R. Albe, Jr.
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
Thomas D. Lyon
SENIOR VICE PRESIDENT
Thomas E. Larkin, Jr.
SENIOR VICE PRESIDENT
Hilary G.D. Lord
SENIOR VICE PRESIDENT
AND ASSISTANT SECRETARY
Phillip K. Holl
SECRETARY
Michael E. Cahill
GENERAL COUNSEL AND
ASSISTANT SECRETARY
David S. DeVito
TREASURER
George Winn
ASSISTANT TREASURER

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SHAREHOLDER INFORMATION
INVESTMENT ADVISER
TCW Investment Management Company
865 South Figueroa Street
Los Angeles, California 90017
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TRANSFER AGENT, DIVIDEND REINVESTMENT
AND DISBURSING AGENT AND REGISTRAR
The Bank of New York
Church Street Station
P.O. Box #11002
New York, New York 10277-0770
-------------------------------------------------
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
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INDEPENDENT AUDITORS
Deloitte & Touche LLP
350 South Grand Avenue
Los Angeles, California 90071
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LEGAL COUNSEL
Dechert
1775 Eye Street N.W.
Washington DC, 20006
-------------------------------------------------

TCW Convertible
Securities Fund, Inc.
-----------------------------
-----------------------------

ANNUAL REPORT

December 31, 2002
[TCW LOGO]-Registered Trademark-

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[TCW LOGO]
TCW CONVERTIBLE SECURITIES FUND, INC.
Shareholder Letter
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DEAR SHAREHOLDER:

Despite the fourth quarter recovery, 2002 was the third consecutive down
year in the equity markets, making this the most severe bear market since the
Great Depression. Allegations of corporate malfeasance, concerns about corporate
earnings and instability in the international arena had a significant negative
impact on the U.S. equity markets. There was no place to hide as virtually all
industry groups suffered declines. High-grade bonds did well in 2002 as interest
rates fell significantly. However, high-yield bonds had another poor year as
credit spreads and defaults increased. Convertibles suffered through their worst
year of performance ever, but did well relative to stocks.

PERFORMANCE OF THE FUND'S SHARES

During 2002, the Fund's shareholders realized a total return of -45.11% with
dividends reinvested. This included four quarterly dividends, which totaled
$0.71 per share. There were no capital gains in 2002. Of the dividend
distributions, $0.32 was ordinary income and $0.39 was a return of capital.

The market price of the Fund's shares was $8.55 at the beginning of the year
and $4.16 at the end of the year. The year-end market price per share
represented a discount of 10.15% to the Fund's net asset value (NAV) of $4.63.
The Fund's shares moved from a substantial premium to a modest discount to NAV
over the course of the year. This resulted in the return on market value of
-45.11% being significantly lower than the return on NAV -20.75%.

FUND STRUCTURE, STRATEGY AND OUTLOOK

The Fund continues to invest in companies which are concentrated in sectors
that we believe can grow more rapidly than the overall economy during the next
few years. The largest industries represented are as follows:

TABLE 1:
INDUSTRY WEIGHTING

INDUSTRY % OF NET ASSETS
-------- ---------------

Media 9.6%
Computer Software 9.3%
Insurance 8.8%
Telecommunication 8.4%
Electronics 7.9%
Commercial Services 6.7%

During the second half of 2002, we continued to orient the Fund towards
companies which we believe have solid financials and whose convertibles will
benefit from an economic recovery. With a contraction in high-yield credit
spreads of approximately 250 basis points in the fourth quarter of 2002, yields
on the busted convertibles (securities with a high-yield and high-conversion
premium) in the Fund declined below double digits. These securities were sold
and replaced with others that have lower conversion premiums and higher equity
sensitivity. The decline in the weighting of busted convertibles has led to an
increase in the Fund's overall equity sensitivity. As shown in Table 2 and 3,
the weighting of busted convertible securities has declined from 33.5% to 18.5%
of the Fund.

TABLE 2:
BREAKDOWN OF CONVERSION PREMIUM AS OF JUNE 30, 2002

-LESS THAN-25% 25%-50% 50%-75% 75%-100% >100%
-------------- ------- ------- -------- -------

Number of Securities 19 17 7 3 26
Portfolio Weighting 27.9% 27.4% 8.2% 3.0% 33.5%
Wght./Avg./Conv. Premium 16.4% 32.0% 60.4% 90.4% 425.7%
Wght./Avg./YTM 2.5% 4.0% 6.8% 7.9% 15.6%
Wght. Avg. Current Yield 7.1% 3.0% 6.1% 7.5% 13.8%

TABLE 3:
BREAKDOWN OF CONVERSION PREMIUM AS OF DECEMBER 31, 2002

-LESS THAN-25% 25%-50% 50%-75% 75%-100% >100%
-------------- ------- ------- -------- -------

Number of Securities 26 12 8 7 12
Portfolio Weighting 40.0% 18.5% 12.2% 10.8% 18.5%
Wght./ Avg./Conv. Premium 9.6% 35.5% 65.8% 88.3% 697.8%
Wght./Avg./YTM 2.0% 3.1% 4.8% 8.6% 11.7%
Wght. Avg. Current Yield 7.0% 4.8% 5.3% 5.9% 6.3%

Despite the reduction of its exposure to busted convertibles, the Fund's
combination of a high current yield (six percent) and modest exposure to both a
rising equity market and tightening credit spreads should enable it to deliver
very good performance relative to both stocks and bonds going forward.

The new issue market for convertibles declined substantially in 2002.
Unfavorable equity markets, combined with volatility in the credit markets
conspired to cut issuance by nearly fifty percent from the record levels of
2001. Total issuance raised net proceeds of $55.3 billion through 124 issues.
This compares to net proceeds of $104.9 billion raised through 210 issues in
2001. We expect a more positive tone for the equity markets in 2003. This should
lead to an increase in convertible issuance, particularly given the need of many
companies to refinance debt and lower the overall level of debt on their balance
sheets.

The economy continues to grow at a moderate pace. While the latest readings
on the manufacturing sector have been positive, the employment data has been
weak and consumer spending has slowed. Despite these mixed signals, we believe
the economy should strengthen, particularly in the second half of 2003. Both
monetary and fiscal policies are stimulative and financial markets are
recovering. With profits, free cash flow and balance sheets improving,
businesses should find it harder to keep postponing new investment. 2003 should
be the year in which capital spending rebounds and contributes to economic
growth.

One of the biggest impediments to a self-sustaining economic recovery
remains investor confidence, which has been damaged by concerns over Iraq, North
Korea, and terrorism. If the risks of war and terrorism dissipate during the
next several months, confidence should improve and economic growth could be
better than expected in the

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[TCW LOGO]
TCW CONVERTIBLE SECURITIES FUND, INC.
Shareholder Letter (continued)
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second half of 2003 and into 2004. This should lead to better returns for
stocks, high-yield bonds and equity-linked securities such as convertibles.

THE FUND'S MANAGEMENT CHANGE

After a great deal of consultation with his family and the management of the
TCW Convertible Securities Fund, Kevin Hunter has decided to retire in 2003.
Kevin began his career at TCW in 1983 and has been a portfolio manager of the
Fund since its inception in March of 1987. After almost twenty years at TCW, he
has decided to leave the firm to spend more time with his family and pursue
personal interests.

During this transition, Kevin will be working full-time with the Fund until
April 2003. After that time, he will phase-out his direct portfolio management
responsibilities and be available to Tom Lyon, Mohan Kapoor and other members of
the convertible team on an as needed basis through the remainder of the year. To
facilitate this process, he will maintain an office at TCW until the end of
2003.

We want to assure the Fund's shareholders that the Convertible Group at TCW
is fully staffed and capable of continuing to manage the Fund upon Kevin
Hunter's departure. The Fund will continue to be managed under the same
philosophy, by Tom Lyon, who has co-managed the Fund since 1997. Mohan Kapoor,
who joined the Convertible Group in 1997 will now become Tom Lyon's partner and
co-manage the Fund. Additionally, Tom and Mohan will continue to be supported by
the other members of the convertible team and the extensive analytical resources
of TCW.

DIVIDEND REINVESTMENT PLAN

Shareholders who wish to add to their investment may do so through the
Dividend Reinvestment Plan (the "Plan"). Under the Plan, your dividend is used
to purchase shares on the open market whenever shares and the related sales
commission are selling below the Fund's Net Asset Value per share. If the market
price, including commission, is selling above the Net Asset Value, you will
receive shares at a price equal to the higher of the Net Asset Value per share
on the payment date or 95% of the closing market price on the payment date.

To enroll in the Plan, if your shares are registered in your name, write to
The Bank of New York, Church Street Station, P.O. Box #11002, New York, New York
10277-0770, or call their toll free number (800) 524-4458. If your shares are
held by a brokerage firm, please call your broker. If, however, you need
assistance, please call our investor relations department at (877) TCW-MKTS
(829-6587). As always, we would be pleased to accommodate your investment needs.

Sincerely,

/s/ Ernest O. Ellison /s/ Alvin R. Albe Jr.
Ernest O. Ellison Alvin R. Albe Jr.
Chairman President & Chief
Executive Officer

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[TCW LOGO]
TCW CONVERTIBLE SECURITIES FUND, INC.
Schedule of Investments
December 31, 2002
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Principal Market
Amount Value
---------- ------------

FIXED INCOME SECURITIES

BANKING & FINANCIAL SERVICES (2.2% OF NET ASSETS)
$6,165,000 E*TRADE Group, Inc., 6.75%, due 05/15/08.......... $ 5,209,425
------------
BEVERAGES, FOOD & TOBACCO (2.3%)
7,365,000 General Mills, Inc., (144A), 0%, due 10/28/22..... 5,330,419*
------------
COMMERCIAL SERVICES (4.5%)
6,920,000 Ikon Office Solutions, (144A), 5%,
due 05/01/07.................................... 6,037,700*
4,445,000 Quest Diagnostics, Inc., 1.75%, due 11/30/21...... 4,672,806+
------------
Total Commercial Services..................... 10,710,506
------------
COMMUNICATIONS (3.3%)
4,565,000 Echostar Communications Corp., 5.75%,
due 05/15/08.................................... 4,137,031
3,340,000 L-3 Communications Holdings, Inc., 4%,
due 09/15/11.................................... 3,765,850
------------
Total Communications.......................... 7,902,881
------------
COMPUTER SERVICES (1.2%)
5,030,000 Federal National Mortgage Association,
Exchangeable Micron Technology, Inc., (144A),
0%, due 05/15/08................................ 2,921,702*
------------
COMPUTER SOFTWARE (6.2%)
4,265,000 First Data Corp., 2%, due 03/01/08................ 4,798,125+
5,155,000 Lehman Brothers Holdings, Inc., Exchangeable
Siebel Systems, Inc., 19%, due 02/01/03......... 1,494,950
2,710,000 Siebel Systems, Inc., 5.5%, due 09/15/06.......... 2,635,475

Principal Market
Amount Value
---------- ------------

$1,950,000 Symantec Corp., (144A), 3%, due 11/01/06.......... $ 2,756,812*
3,315,000 Veritas Software Corp., 1.856%, due 08/13/06...... 2,850,900
------------
Total Computer Software....................... 14,536,262
------------
ELECTRONICS (7.1%)
2,495,000 Advanced Micro Devices, Inc., 4.5%,
due 12/01/07.................................... 2,844,300
6,135,000 ASM Lithography Holding N.V., (144A), 5.75%,
due 10/15/06.................................... 5,329,781*+
2,975,000 Celestica, Inc., 0%, due 08/01/20................. 1,379,656
5,050,000 GlobeSpan, Inc., (144A), 5.25%, due 05/15/06...... 4,361,937*
3,665,000 PMC-Sierra, Inc., (144A), 3.75%, due 08/15/06..... 2,767,075*
------------
Total Electronics............................. 16,682,749
------------
ENERGY & OIL SERVICES (2.2%)
4,800,000 Kerr-McGee Corp., 5.25%, due 02/15/10............. 5,232,000
------------
ENTERTAINMENT & LEISURE (2.1%)
5,250,000 Morgan Stanley Dean Witter & Co., Exchangeable The
Walt Disney Co., 0.25%, due 12/30/08............ 4,941,563
------------
HEALTHCARE (2.8%)
2,520,000 Omnicare, Inc., 5%, due 12/01/07.................. 2,416,050
6,695,000 Universal Health Services, Inc., 0.426%,
due 06/23/20.................................... 4,276,431
------------
Total Healthcare.............................. 6,692,481
------------
INDUSTRIAL-DIVERSIFIED (2.7%)
1,705,000 SPX Corp., 0%, due 02/06/21....................... 1,059,231
8,585,000 SPX Corp., (144A), 0%, due 02/06/21............... 5,333,431*
------------
Total Industrial--Diversified................. 6,392,662
------------

* Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
2002, the value of these securities amounted to $50,613,151 or 21.4% of net
assets.
+ Security partially or fully lent (Note 3).
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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[TCW LOGO]
TCW CONVERTIBLE SECURITIES FUND, INC.
Schedule of Investments (continued)
December 31, 2002
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Principal Market
Amount Value
---------- ------------

INSURANCE (4.0%)
$6,830,000 American International Group, Inc., 0.5%,
due 05/15/07.................................... $ 6,428,738
3,300,000 Swiss RE America Holding, (144A), 3.25%,
due 11/21/21.................................... 2,916,375*
------------
Total Insurance............................... 9,345,113
------------
MEDIA-BROADCASTING & PUBLISHING (1.5%)
5,535,000 Liberty Media Corp., 3.5%, due 01/15/31........... 3,549,319
------------
MEDICAL SUPPLIES (4.1%)
1,615,000 Agilent Technolgies, Inc., 3%, due 12/01/21....... 1,556,456
3,515,000 Agilent Technolgies, Inc., (144A), 3%,
due 12/01/21.................................... 3,387,581*
6,180,000 Alza Corp., Exchangeable Johnson & Johnson, Inc.,
0%, due 07/28/20................................ 4,843,575
------------
Total Medical Supplies........................ 9,787,612
------------
PHARMACEUTICALS (1.0%)
2,250,000 Teva Pharmaceutical Industries, Ltd., (144A),
3.75%, due 11/15/22............................. 2,368,125*
------------
RETAIL (2.1%)
3,430,000 Costco Companies, Inc., 0%, due 08/19/17.......... 2,396,713
1,975,000 Gap, Inc., 5.75%, due 03/15/09.................... 2,473,688
------------
Total Retail.................................. 4,870,401
------------
TELECOMMUNICATIONS (7.1%)
8,890,000 Nextel Communications, Inc., 4.75%,
due 07/01/07.................................... 7,512,050
4,235,000 ONI Systems Corp., 5%, due 10/15/05............... 3,769,150

Principal Market
Amount Value
---------- ------------

$4,620,000 Telefonos de Mexico, S.A. de C.V., 4.25%,
due 06/15/04.................................... $ 5,549,775+
------------
Total Telecommunications...................... 16,830,975
------------
TRANSPORTATION (3.0%)
6,585,000 United Parcel Service, Inc., 1.75%,
due 09/27/07.................................... 7,013,025+
------------
TOTAL FIXED INCOME SECURITIES (COST:
$149,650,811) (59.4%)....................... 140,317,220
------------

Number of
Shares
----------

EQUITY SECURITIES

COMMON STOCK

ELECTRONICS (0.8%)
132,990 Texas Instruments, Inc............................ 1,996,180
------------
ENERGY & OIL SERVICES (1.8%)
230,350 Vodafone Group, PLC (ADR)......................... 4,173,942
------------
MEDIA-BROADCASTING & PUBLISHING (1.1%)
90,087 Cox Communications, Inc........................... 2,558,471
------------
TOTAL COMMON STOCK (COST: $14,408,179)
(3.7%)...................................... 8,728,593
------------

CONVERTIBLE PREFERRED STOCK

AEROSPACE/DEFENSE (2.0%)
85,150 Raytheon, Inc., Class B, $4.125................... 4,649,190+
------------
AUTOMOTIVE (0.9%)
88,850 General Motors Corp., $1.313...................... 2,052,435
------------
BANKING & FINANCIAL SERVICES (1.9%)
62,700 Washington Mutual, Inc., $2.688................... 3,252,562
23,250 Washington Mutual, Inc., (144A), $2.688........... 1,206,094*
------------
Total Banking & Financial Services............ 4,458,656
------------

ADR American Depositary Receipt. Shares of a foreign based corporation held in
U.S. banks entitling the shareholder to all dividends and capital gains.
* Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
2002, the value of these securities amounted to $50,613,151 or 21.4% of net
assets.
+ Security partially or fully lent (Note 3).
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

Number of Market
Shares Value
---------- ------------

COMMERCIAL SERVICES (2.2%)
162,050 Cendant Corp., $3.875............................. $ 5,226,112+
------------
COMMUNICATIONS (2.6%)
140,070 Titan Capital Trust, $2.875....................... 6,163,080
------------
COMPUTER SERVICES (5.2%)
304,490 Goldman Sachs Group, Inc., Exchangeable AOL Time
Warner, Inc., $0.916............................ 3,944,668
113,800 Tribune Co., $2.00................................ 8,421,200
------------
Total Computer Services....................... 12,365,868
------------
COMPUTER SOFTWARE (3.1%)
288,900 Electronic Data Systems Corp., $3.813............. 6,329,799+
148,300 Morgan Stanley Dean Witter & Co., Exchangeable
Siebel Systems, Inc., $7.123.................... 1,090,005
------------
Total Computer Software....................... 7,419,804
------------
ELECTRIC UTILITIES (1.8%)
176,100 Sempra Energy, $2.125............................. 4,235,205
------------
INSURANCE (4.8%)
145,700 Chubb Corp., $1.75................................ 3,489,515
88,700 Phoenix Companies, Inc., Exchangeable Hilb, Rogal
and Hamilton Co., $2.667........................ 3,627,830
74,900 QBE Insurance Group, Ltd., (144A), $4.00.......... 4,100,775*
------------
Total Insurance............................... 11,218,120
------------

Number of Market
Shares Value
---------- ------------

MEDIA-BROADCASTING & PUBLISHING (7.0%)
74,100 Cox Communications, Inc., $6.859.................. $ 2,200,029
136,400 Equity Securities Trust, Exchangeable Cablevision
Systems Corp. $1.406............................ 2,740,276
103,100 Equity Securities Trust, Exchangeable Cablevision
Systems Corp., $2.343........................... 2,067,155
159,900 Goldman Sachs Group, Inc., Exchangeable Clear
Channel Communications, Inc., $3.096............ 5,598,898
2,050 Radio One, Inc., $65.00........................... 2,016,687
1,825 Radio One, Inc., (144A), $65.00................... 1,795,344*
------------
Total Media--Broadcasting & Publishing........ 16,418,389
------------
OIL & GAS (1.2%)
103,150 El Paso Corp., $4.50.............................. 2,743,790
------------
PAPER & FOREST PRODUCTS (1.1%)
64,150 Boise Cascade Corp., $3.75........................ 2,693,659
------------
RETAIL (1.2%)
85,250 Toys R Us, Inc., $3.125........................... 2,868,663
------------
TELECOMMUNICATIONS (1.3%)
60,650 Alltel Corp., $3.875.............................. 3,113,165
------------
TOTAL CONVERTIBLE PREFERRED STOCK (COST:
$98,043,011) (36.3%)........................ 85,626,136
------------
TOTAL EQUITY SECURITIES (COST: $112,451,190)
(40.0%)..................................... 94,354,729
------------

Principal Market
Amount Value
---------- ------------

SHORT-TERM INVESTMENTS
$ 134,064 Bank of Montreal, 1.32%, due 01/30/03............. $ 134,064**
2,492,055 Blackrock Provident Institutional TempCash Fund,
1.37%, due 01/02/03............................. 2,492,055**
2,408,986 BNP Paribas, 1.32%, due 02/07/03.................. 2,408,986**
4,153,424 Canadian Imperial Bank of Commerce, 1.25%,
due 11/04/03.................................... 4,153,424**
415,342 Comercia Bank, 1.4%, due 11/19/03................. 415,342**
1,246,027 Dreyfus Cash Management Plus Fund, 1.36%,
due 01/02/03.................................... 1,246,027**
830,685 Galaxy Funding, 1.35%, due 02/07/03............... 830,685**
2,076,712 Harris Trust & Savings Bank, 1.36%,
due 01/21/03.................................... 2,076,712**
3,336,812 Investors Bank & Trust Depository Reserve, 1.00%,
due 01/01/03.................................... 3,336,812
830,685 Jupiter Securitization Corp., 1.32%,
due 01/17/03.................................... 830,685**

Principal Market
Amount Value
---------- ------------

$ 830,685 Merrill Lynch & Co., Inc., 1.33%, due 11/26/03.... $ 830,685**
415,342 Merrill Lynch & Co., Inc., 1.34%, due 04/16/03.... 415,342**
6,062,336 Merrimac Money Market Fund, 1.42%,
due 01/02/03.................................... 6,062,336**
830,685 National City Bank, 1.25%, due 01/23/03........... 830,685**
2,076,712 Royal Bank of Scotland, 1.33%, due 01/15/03....... 2,076,712**
------------
TOTAL SHORT-TERM INVESTMENTS (COST:
$28,140,552) (11.9%)........................ 28,140,552
------------
TOTAL INVESTMENTS (COST: $290,242,553)
(111.3%).................................... 262,812,501

LIABILITIES IN EXCESS OF OTHER ASSETS (-11.3%).... (26,739,206)
------------
NET ASSETS (100.0%)............................... $236,073,295
============

** Represents investments of security lending collateral (Note 3).
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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[TCW LOGO]
TCW CONVERTIBLE SECURITIES FUND, INC.
Statement of Assets and Liabilities
December 31, 2002
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ASSETS:
Investments, at Value (Cost: $290,242,553).... $262,812,501
Receivables for Securities Sold............... 1,067,329
Interest and Dividends Receivable............. 1,503,905
------------
Total Assets.............................. 265,383,735
------------
LIABILITIES:
Distributions Payable......................... 4,075,134
Payables Upon Return of Securities Loaned..... 24,803,740
Accrued Investment Advisory Fees.............. 129,321
Other Accrued Expenses........................ 302,245
------------
Total Liabilities......................... 29,310,440
------------
NET ASSETS........................................ $236,073,295
============
Net Assets were comprised of:
Common Stock, par value $0.01 per share,
(75,000,000 shares authorized, 50,939,175
shares issued and outstanding).............. $ 509,392
Paid-in Capital............................... 370,870,535
Undistributed Net Realized (Loss) on
Investments................................. (103,574,822)
Net Unrealized (Depreciation) of
Investments................................. (27,430,052)
(Overdistributed) Net Investment Income....... (4,301,758)
------------
NET ASSETS........................................ $236,073,295
============
NET ASSET VALUE PER SHARE......................... $ 4.63
============

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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[TCW LOGO]
TCW CONVERTIBLE SECURITIES FUND, INC.
Statement of Operations
Year Ended December 31, 2002
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INVESTMENT INCOME:
Interest (including security lending fees of
$62,400).................................... $ 10,060,495
Dividends (net of foreign withholding of taxes
of $3,230).................................. 8,269,301
------------
Total Investment Income................... 18,329,796
------------
EXPENSES:
Investment Advisory Fees...................... 1,627,921
Accounting Fees............................... 71,982
Administration Fees........................... 108,355
Audit and Tax Service Fees.................... 36,489
Transfer Agent Fees........................... 67,818
Custodian Fees................................ 20,262
Directors' Fees & Expenses.................... 100,806
Proxy Costs................................... 78,084
Listing Fees.................................. 65,124
Insurance Costs............................... 7,081
Legal Fees.................................... 46,997
Printing and Distribution Costs............... 36,320
Miscellaneous................................. 28,985
------------
Total Expenses............................ 2,296,224
------------
Net Investment Income..................... 16,033,572
------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net Realized (Loss) on Investments............ (61,476,304)
Change in Unrealized (Depreciation) of
Investments................................. (24,066,081)
------------
Net Realized and Unrealized (Loss) on
Investments............................. (85,542,385)
------------
DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS...................................... $(69,508,813)
============

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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[TCW LOGO]
TCW CONVERTIBLE SECURITIES FUND, INC.
Statements of Changes in Net Assets
--------------------------------------------------------------------------------

Year Ended Year Ended
December 31, 2002 December 31, 2001
----------------- -----------------

INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net Investment Income............... $ 16,033,572 $ 17,315,495
Net Realized (Loss) on
Investments....................... (61,476,304) (42,806,531)
Change in Unrealized (Depreciation)
of Investments.................... (24,066,081) (19,945,446)
------------- ------------
(Decrease) in Net Assets
Resulting from Operations..... (69,508,813) (45,436,482)
------------- ------------
Distributions to Shareholders:
From Net Investment Income.......... (16,033,572) (28,015,611)
Return of Capital................... (20,060,607) (10,888,437)
------------- ------------
Total Distributions to
Shareholders.................. (36,094,179) (38,904,048)
------------- ------------
Capital Share Transactions:
Shares Issued through Exercise of
Common Stock Subscription Rights
(8,450,030) (Note 8).............. -- 65,656,733
Shares Issued in Reinvestment of
Dividends (293,492 for the year
ended December 31, 2002 and
623,429 for the year ended
December 31, 2001)................ 2,098,841 5,706,722
------------- ------------
Increase in Net Assets Resulting
from Net Capital Share
Transactions...................... 2,098,841 71,363,455
------------- ------------
Total (Decrease) in Net
Assets........................ (103,504,151) (12,977,075)
------------- ------------
NET ASSETS:
Beginning of Year....................... 339,577,446 352,554,521
------------- ------------
End of Year............................. $ 236,073,295 $339,577,446
============= ============

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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TCW CONVERTIBLE SECURITIES FUND, INC.
Notes to Financial Statements
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NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:

TCW Convertible Securities Fund, Inc. (the "Fund") was incorporated in
Maryland on January 13, 1987 as a diversified, closed-end investment management
company and is registered under the Investment Company Act of 1940, as amended.
The Fund commenced operations on March 5, 1987. The Fund's investment objective
is to seek a total investment return, comprised of current income and capital
appreciation through investment principally in convertible securities. In
accordance with the requirements of new Rule 35d-1 under the 1940 Act, the Fund
will invest, under normal market conditions, at least 80% of its net assets,
plus any borrowings for investment purposes in convertible securities. The 80%
investment policy described above is non-fundamental and may be changed by the
Board of Directors to become effective upon at least 60 days' notice to
shareholders.

The preparation of the accompanying financial statements requires management
to make estimates and assumptions that affect the reported amounts of 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.

The following is a summary of the significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with accounting principles generally
accepted in the United States of America.

SECURITY VALUATION: Securities traded on national exchanges are valued at the
last reported sales price or the mean of the current bid and asked prices if
there are no sales in the trading period. Other securities which are traded on
the over-the-counter market are valued at the mean of the current bid and asked
prices. Short-term debt securities with maturities of 60 days or less at the
time of purchase are valued at amortized cost. Other short-term debt securities
are valued on a mark-to-market basis until such time as they reach a remaining
maturity of 60 days, where upon they will be valued at amortized value using
their value of the 61st day prior to maturity.

SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions are
recorded on the trade date. Dividend income is recorded on the ex-dividend date,
while interest income is recorded on the accrual basis. Discounts and premiums
on securities purchased are recognized as interest income and expense,
respectively, using a constant yield to maturity method. Realized gains and
losses on investments are recorded on the basis of identified cost.

DISTRIBUTIONS: The Fund intends to distribute its investment company taxable
income quarterly and to distribute any net realized capital gains at least
annually, to the extent required for U.S. federal income tax purposes. The Board
of Directors also may, in its discretion, choose to pay distributions in excess
of net investment income and net realized capital gains, though it is not
required to do so.

Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from accounting principles generally
accepted in the United States of

America. These differences may be primarily due to differing treatments for
losses deferred due to wash sales and spillover distributions. Permanent book
and tax basis differences relating to shareholder distributions will result in
reclassifications to paid-in-capital and may affect net investment income per
share.

The Fund reclassified $26,499,517 between undistributed net investment
income and paid in capital at December 31, 2002 as a result of permanent
differences between book and tax.

REPURCHASE AGREEMENTS: The Fund may invest in repurchase agreements secured by
U.S. Government Securities. A repurchase agreement arises when the Fund
purchases a security and simultaneously agrees to resell it to the seller at an
agreed upon future date. The Fund requires the seller to maintain the value of
the securities, marked to market daily, at not less than the repurchase price.
If the seller defaults on its repurchase obligation, the Fund could suffer
delays, collection expenses and losses to the extent that the proceeds from the
sale of the collateral are less than the repurchase price. The Fund did not
enter into any repurchase agreements for the year ended December 31, 2002.

NOTE 2--FEDERAL INCOME TAXES:

It is the policy of the Fund to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and distribute all of
its net taxable income, including any net realized gains on investments, to its
shareholders. Therefore, no federal income tax provision is required.

For the year ended December 31, 2002 the Fund recognized on a tax basis a
net realized loss of $61,307,425 on security transactions which will be carried
forward to 2010. The Fund also had a loss carry forward from the previous year
of $42,470,592 which will expire in 2009.

Also for the year ended December 31, 2002, the fund distributed, on a tax
basis, $42,654,634 of which $16,155,090 is characterized as ordinary income and
$26,499,544 as return of capital.

At December 31, 2002, net unrealized depreciation for federal income tax
purposes is comprised of the following components:

Appreciated securities...................................... $ 8,968,202
Depreciated securities...................................... (36,521,686)
-----------
Net unrealized (depreciation)............................... $(27,553,484)
===========
Cost of securities for federal income tax purposes.......... $262,225,433
===========

NOTE 3--INVESTMENT ADVISORY AND SERVICE FEES:

TCW Investment Management Company (the "Advisor") is the investment advisor
of the Fund. As compensation for the services rendered, facilities provided, and
expenses borne, the Advisor is paid a monthly fee by the Fund computed at the
annual rate of 0.75% of the first $100 million of the Fund's average net assets
and 0.50% of the Fund's average net assets in excess of $100 million.

NOTE 4--PURCHASES AND SALES OF SECURITIES:

For the year ended December 31, 2002, purchases and sales or maturities of
investment

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TCW CONVERTIBLE SECURITIES FUND, INC.
Notes to Financial Statements (continued)
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securities (excluding short-term investments) aggregated $206,363,939 and
$235,314,603, respectively. There were no purchases or sales of U.S. Government
securities for the year ended December 31, 2002.

NOTE 5--SECURITY LENDING:

During the year ended December 31, 2002, the Fund lent securities to
brokers. The brokers provided collateral, which must be maintained at not less
than 100% of the value of the loaned securities, to secure the obligation. At
December 31, 2002, the cash received from the borrowing broker was invested in
short-term investments valued at $24,803,740 which is 102.3% of the value of the
loaned securities.

NOTE 6--DIRECTORS' FEES:

Directors who are not affiliated with the Advisor received, as a group,
aggregate fees and expenses of $100,806 from the Fund for the year ended
December 31, 2002. Certain officers and/or directors of the Fund are also
officers and/or directors of the Advisor.

NOTE 7--RESTRICTED SECURITIES:

The Funds are permitted to invest in securities that are subject to legal or
contractual restrictions on resale. These securities generally may be resold in
transactions exempt from registration or to the public if the securities are
registered. Disposal of these securities may involve time consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult. There are
no restricted securities (excluding 144A issues) at December 31, 2002.

NOTE 8--COMMON STOCK SUBSCRIPTION RIGHTS:

Non-transferable rights to subscribe to shares of the Fund's common stock
were issued to shareholders of record on June 29, 2001. The rights entitled the
shareholders to acquire one share of newly issued common stock for four rights
held. At the termination of the subscription period on August 2, 2001, 8,450,030
shares of common stock were subscribed at a price of $7.77 per share.

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TCW CONVERTIBLE SECURITIES FUND, INC.
Financial Highlights
--------------------------------------------------------------------------------

YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
2002 2001 2000 1999 1998
-------- ---------- ---------- ---------- ----------

Net Asset Value Per Share,
Beginning of Year................ $ 6.70 $ 8.48 $ 11.32 $ 9.37 $ 9.21
-------- -------- -------- -------- --------
Income from Operations:
Net Investment Income (3)........ 0.32 0.38 0.35 0.35 0.35
Impact to Capital for Shares
Issued......................... -- (0.01) -- -- (0.01)
Impact to Capital for Shares
Repurchased.................... -- -- 0.02 -- --
Net Realized and Unrealized Gains
(Losses) on Securities......... (1.68) (1.31) (0.80) 3.15 0.85
-------- -------- -------- -------- --------
Total from Investment
Operations............... (1.36) (0.94) (0.43) 3.50 1.19
-------- -------- -------- -------- --------
Less Distributions:
Distributions from Net Investment
Income......................... (0.32) (0.60) (0.35) (0.35) (0.35)
Distributions from Net Realized
Gain........................... -- -- (2.06) (1.20) (0.68)
Distributions from
Paid-in-Capital................ (0.39) (0.24) -- -- --
-------- -------- -------- -------- --------
Total Distributions........ (0.71) (0.84) (2.41) (1.55) (1.03)
-------- -------- -------- -------- --------
Net Asset Value Per Share, End of
Year............................. $ 4.63 $ 6.70 $ 8.48 $ 11.32 $ 9.37
======== ======== ======== ======== ========
Market Value Per Share, End of
Year............................. $ 4.16 $ 8.55 $ 10.38 $ 9.56 $ 9.63
======== ======== ======== ======== ========
Total Investment Return (1)........ (45.11)% (9.27)% 34.95% 16.10% 11.41%
Net Asset Value Total Return (2)... (20.75)% (10.89)% (4.79)% 39.16% 13.34%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (in
thousands)....................... $236,073 $339,577 $352,555 $477,608 $393,588
Ratio of Expenses to Average Net
Assets........................... 0.83% 0.75% 0.69% 0.68% 0.73%
Ratio of Net Investment Income to
Average Net Assets............... 5.82% 5.16% 2.88% 3.47% 3.73%
Portfolio Turnover Rate............ 75.04% 129.57% 159.44% 119.92% 124.51%

(1) Based on market value per share, adjusted for reinvestment of
distributions.
(2) Based on net asset value per share, adjusted for reinvestment of
distributions.
(3) Computed using average shares outstanding throughout the period.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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TCW CONVERTIBLE SECURITIES FUND, INC.
Independent Auditors' Report
--------------------------------------------------------------------------------

TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OF TCW CONVERTIBLE SECURITIES FUND, INC.:

We have audited the accompanying statement of assets and liabilities of TCW
Convertible Securities Fund, Inc., (the "Fund"), including the schedule of
investments, as of December 31, 2002 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 financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 2002 by correspondence with the custodian.
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 present fairly, in all material respects, the financial position of the
Fund as of December 31, 2002, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended in conformity with accounting principles generally accepted in
the United States of America.

/s/ Deloitte & Touche LLP

Los Angeles, California
February 13, 2003

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TCW CONVERTIBLE SECURITIES FUND, INC.
Voting Information (Unaudited)
--------------------------------------------------------------------------------

REPORT OF ANNUAL MEETING OF SHAREHOLDERS:

The Annual Meeting of Shareholders of the Fund was held on July 18, 2002. At
the meeting, the following matters were submitted to a shareholder vote and
approved by a vote of a majority of the Fund's outstanding shares; (i) the
election of Ernest O. Ellison, John C. Argue, Norman Baker, Jr., Richard W.
Call, Matthew K. Fong, John A. Gavin, Patrick C. Haden, Charles A. Parker and
Robert G. Sims as Directors to serve until the next annual meeting of the Fund's
shareholders and until their successors are elected and qualify (each Director
received 46,431,429 affirmative votes; votes exceptions 396,964 and votes
withheld 1,084,432); and (ii) the ratification of the selection of Deloitte &
Touche LLP as independent auditors of the Fund for the fiscal year ending
December 31, 2002 (votes for 47,005,600; votes against 479,461 and abstentions
427,764). 50,809,179 shares were outstanding on the record date of this meeting
and 47,912,825 shares entitled to vote were present in person or by proxy at the
meeting. Subsequent to the annual meeting, John C. Argue passed away after an
eight-month battle with leukemia. The Board of Directors has elected Samuel P.
Bell to fill the vacancy.

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TCW CONVERTIBLE SECURITIES FUND, INC.
Board of Directors (Unaudited)
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Name (Age) and Address Office Principal Occupation During Past 5 Years
---------------------- ------------------------- --------------------------------------------------

Earnest O. Ellison (71) Chairman and Director Vice Chairman of the Board and Chairman of the
865 S. Figueroa St. Investment Policy Committee of the Investment
Los Angeles, CA 90017 Adviser, TCW Asset Management Company and Trust
Company of the West; Vice Chairman, The TCW
Group, Inc.
Norman Barker, Jr. (80) Director Former Chairman of the Board, Former First Vice
9601 Wilshire Blvd. Chairman of the Board, First Interstate Bancorp;
Beverly Hills, CA 90210 Director, TCW Galileo Funds, Inc.; Trustee, TCW
Premier Funds.
Samuel P. Bell (66) Director President, Los Angeles Business Advisors since
333 South Hope Street 1996. Director, Apex Mortgage Capital, Inc. (real
Suite 1253 estate investment trust), Point.360 (audio visual
Los Angeles, CA 90071 services) and TCW Galileo Funds, Inc.; Trustee,
TCW Premier Funds. Previously Mr. Bell served as
the Area Managing Partner of Ernst & Young for the
Pacific Southwest Area.
Richard W. Call (78) Director Former President, The Seaver Institute (a private
c/o Paul, Hastings, Janofsky & foundation); Director, TCW Galileo Funds, Inc. and
Walker LLP The Seaver Institute; Trustee, TCW Premier Funds.
515 South Flower Street
Los Angeles, CA 90071
Matthew K. Fong (49) Director President, Strategic Advisory Group; Since 1999,
Strategic Advisory Group Mr. Fong has been Of Counsel to the Los Angeles
13191 Crossroad Parkway North law firm Sheppard, Mullin, Richter & Hamilton.
Suite 285 Director, Anfi Inc. (title insurance), Viata Inc.
City of Industry, CA 91746 (home entertainment products), Metropolitan West
Capital Mgt. LLC (investment manager) and TCW
Galileo Funds, Inc.; Trustee, TCW Premier Funds.
From 1995 to 1998, Mr. Fong served as Treasurer of
the State of California. Director of ESS
Technology, Inc. (computer hardware and software
designer) and American National Title. Regent of
Pepperdine University and the Los Angeles
Children's Hospital. Lt. Colonel US Air Force
Reserves.

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TCW CONVERTIBLE SECURITIES FUND, INC.
Board of Directors (Unaudited) (continued)
--------------------------------------------------------------------------------

Name (Age) and Address Office Principal Occupation During Past 5 Years
---------------------- ------------------------- --------------------------------------------------

John A. Gavin (71) Director Founder and Chairman of Gamma Holdings
c/o Paul, Hastings, Janofsky & (international capital and consulting firm);
Walker LLP Member, Latin America Strategy Board of Hicks,
515 South Flower Street Muse, Tate & Furst (leveraged buyout firm);
Los Angeles, CA 90071 Director, International Wire Group (electrical
wire manufacturer), KKCF, Inc. (home furnishings
manufacturer), Apex Mortgage Capital, Inc. (real
estate investment trust), Hotchkis and Wiley Funds
(mutual funds) and TCW Galileo Funds, Inc.;
Trustee, TCW Premier Funds. From 1981 to 1986,
Mr. Gavin was the United States Ambassador to
Mexico.
Patrick C. Haden (49) Director General Partner, Riordan, Lewis & Haden (venture
1525 Wilson Avenue capital firm); Director, Tetra Tech, Inc.
San Marino, CA 91108 (environmental consulting), Elkay Plastics Co.,
Inc., Bradshaw International Inc. (housewares),
Financial Pacific Insurance Group, Inc., IndyMac
Mortgage Holdings (mortgage banking), and TCW
Galileo Funds, Inc.; Trustee, TCW Premier Funds.
Charles A. Parker (68) Director Formerly, Director and Executive Vice President,
c/o Paul, Hastings, Janofsky & The Continental Corporation; formerly Chairman and
Walker LLP Chief Executive Officer, Continental Asset
515 South Flower Street Management Corporation; Director, Horace Mann
Los Angeles, CA 90071 Educators Corp; Trustee, the Burridge Center for
Research in Security Prices (University of
Colorado)
Robert G. Sims (71) Director Private Investor, Director, The TCW Group, Inc.
16855 West Bernardo Drive
Suite 250
San Diego, CA 92127

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