<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholder:
During the past six months, from March 31, 1997 through September 30, 1997, the
Fund's net assets grew from $13,303,848 to $20,824,111, an increase of 56.5%
and the number of shareholders grew 9.1% to 1,238. The Fund is now registered
in all 50 states and the District of Columbia. Our broker-dealer network now
totals 71 firms.
For the six month period ended September 30, 1997, the Fund's total return was
41.69%* versus a return of 33.51% for the Russell 2000 Index and 26.26% for the
S&P 500 Index. For the quarter ended September 30, 1997, the Fund's total
return was 21.56%* versus a return of 14.88% for the Russell 2000 index and
7.49% for the S&P 500 Index. For the Fund's fiscal year ended September 30,
1997, the Fund's total return was 53.51%* versus 33.19% for the Russell 2000
Index and 40.45% for the S&P 500 Index. Since inception the Fund's average
annual return was 22.25%* versus 17.54% for the Russell 2000 Index and 22.79%
for the S&P 500 Index (See accompanying graph).
During the first six months of the fiscal year the bond and stock markets had
to cope with high volatility based on differing economic statistics and
speculation on future moves by the Federal Reserve System. In the May/June
period and beyond, the stalwarts of the index funds such as Gillette Co. and
Coca Cola Co. began to have minor earnings disappointments and money flow began
to focus on the small- to mid-cap sectors. In addition, interest rates began to
have a downward bias.
Of particular note, the Fund's performance was positively affected by several
of its portfolio holdings receiving acquisition bids at premium prices to
current market prices. This was particularly evident in the quarter ended
September 30, 1997, as five portfolio companies received takeover bids.
At this writing the Fund's asset size is above $21 million. The growth of
assets during the year reduced the expense ratio below 2.50%. The expense ratio
is expected to decrease as assets grow. It should be noted that the returns
reported are after such expenses.
As the Fund enters its 5th year of activity, we will continue to seek
investment opportunities within our investment discipline and look for a
favorable economic environment in which to operate.
Our investment strategy, which emphasizes corporate spin-offs, stocks trading
below actual or perceived book-value, and companies emerging from bankruptcy,
continues to provide good investment opportunities. Corporate America continues
to undergo the above-mentioned restructuring which, on average, has afforded
several good opportunities per quarter. We remain fully invested and confident
in our strategy which seeks investment opportunities in securities subject to
indiscriminate selling by investors with low expectations.
Thank you for your continued commitment to the Fund.
Sincerely yours,
LOGO
John L. Keeley, Jr.
President
*Performance return does not reflect deduction of a 4.5% maximum up-front sales
charge
<PAGE>
Index Comparison
Quarterly Comparison of a Hypothetical $10,000 Investment
in the KSCVF*, S&P 500** and Russell 2000**
[GRAPH APPEARS HERE]
From 10/1/93 (commencement of operations) through 9/30/97
<TABLE>
<CAPTION>
KSCVF S&P 500 RUSSELL 2000
----- ------- ------------
<S> <C> <C> <C>
10/1/93 $10,000 $10,000 $10,000
December 1993 10,232 9,981 10,262
March 1994 9,844 9,618 9,990
June 1994 9,885 9,236 9,601
September 1994 10,369 9,799 10,267
December 1994 10,367 9,112 10,075
March 1995 11,376 10,067 10,540
June 1995 12,462 10,850 11,528
September 1995 13,453 11,958 12,666
December 1995 14,263 12,070 12,941
March 1996 15,028 13,181 13,601
June 1996 15,702 13,592 14,282
September 1996 16,188 13,899 14,330
December 1996 17,537 15,207 15,075
March 1997 18,007 15,058 14,296
June 1997 21,151 17,552 16,613
September 1997 22,736 21,336 19,086
</TABLE>
Average total returns***
for periods ended September 30, 1997
<TABLE>
<CAPTION>
SINCE COMMENCEMENT
12 MOS ENDED OF OPERATION
9/30/97 10/1/93 TO 9/30/97
------------ ------------------
<S> <C> <C>
KSCVF +53.51% +22.25%
KSCVF (includes
max 4 1/2%
front-end load) +46.65% +20.86%
S&P 500 +40.45% +22.79%
Russell 2000 +33.19% +17.54%
</TABLE>
* Performance graph includes deduction of the 4 1/2% front end load.
** S&P 500 and Russell 2000 returns are calculated with reinvested dividends and
assumes no transaction costs.
***PERFORMANCE DATA quoted represents past performance which is not predictive
of future performance. The investment return and principal value of shares
will fluctuate and when redeemed, may be worth more or less than their
original cost.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost $12,299,032) $20,847,056
Receivables for investments sold 68,398
Cash 21,058
Prepaid expenses and other assets 7,228
Dividends and interest receivable 5,470
Receivables for shares issued 4,712
Organization costs, net of accumulated amortization 4,482
-----------
Total Assets 20,958,404
-----------
LIABILITIES:
Payable to Adviser 16,293
Payables for securities purchased 64,225
Payables for shares redeemed 12,520
Other accrued expenses 41,255
-----------
Total Liabilities 134,293
-----------
NET ASSETS $20,824,111
===========
NET ASSETS CONSIST OF:
Capital stock $11,642,455
Accumulated net realized gain on investments 633,632
Unrealized net appreciation on investments 8,548,024
-----------
TOTAL NET ASSETS $20,824,111
===========
CAPITAL STOCK, $0.01 PAR VALUE
Authorized 10,000,000
Issued and outstanding 969,643
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $21.48
===========
OFFERING PRICE PER SHARE $22.49
===========
</TABLE>
See notes to the financial statements.
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend income $110,646
Interest income 4,555
----------
115,201
----------
EXPENSES:
Investment advisory fees 142,919
Administration fees 38,500
12b-1 fees 35,730
Transfer agent fees and expenses 31,947
Professional fees 29,777
Fund accounting fees 23,547
Federal and state registration fees 16,427
Reports to shareholders 12,078
Custody fees 8,593
Directors' fees 8,033
Amortization of organization costs 4,479
Other 2,783
----------
Total expenses 354,813
----------
Net investment loss (239,612)
----------
REALIZED AND UNREALIZED GAINS:
Net realized gain on investments 909,527
Increase in unrealized appreciation on investments 6,072,957
----------
Net gain on investments 6,982,484
----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $6,742,872
==========
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- -----------
<C> <S> <C> <C>
COMMON STOCKS 95.86%
BUILDING MATERIALS 1.85%
21,300 Homebase, Inc.* $ 191,700
7,500 Nortek, Inc.* 194,531
-----------
386,231
-----------
BUSINESS SERVICE 0.82%
9,000 Viad Corp. 171,563
-----------
COMMUNICATIONS AND MEDIA 8.58%
9,000 360 Communications Co.* 187,875
8,000 The Ackerley Group, Inc. 144,500
16,000 Anacomp, Inc. * 248,000
4,500 Associated Group, Inc. Class A* 317,250
7,500 Cox Communications, Inc. Class A* 206,719
4,500 GC Companies, Inc.* 193,500
14,000 Paxson Communications Corp.* 162,750
18,500 Price Communications Corp.* 160,719
22,000 TCI Satellite Entertainment, Class A* 166,375
-----------
1,787,688
-----------
CONSUMER SERVICE 2.06%
9,500 Coinmach Laundry Corp.* 233,937
3,000 Pittway Corp. Class A 194,813
-----------
428,750
-----------
CONTAINERS 2.00%
6,000 Alltrista Corp.* 159,750
8,000 Premark International, Inc. 256,000
-----------
415,750
-----------
ELECTRICAL EQUIPMENT 2.12%
9,000 AMETEK, Inc. 211,500
8,500 Westinghouse Electric Corp. 230,031
-----------
441,531
-----------
ELECTRONICS 2.42%
2,000 BEI Electronics, Inc. 31,500
6,500 Moog, Inc. Class B * 258,375
2,400 Western Atlas, Inc.* 211,200
-----------
501,075
-----------
ENGINEERING AND CONSTRUCTION 3.27%
14,000 Commercial Intertech Corp. 255,500
11,000 Emcor Group, Inc.* 220,000
17,000 Morrison Knudsen Corp. * 206,125
-----------
681,625
-----------
ENTERTAINMENT AND LEISURE 2.14%
2,000 Gaylord Entertainment Corp. 51,625
8,000 On Command Corp.* 108,000
14,000 WHG Resorts & Casino, Inc.* 287,000
-----------
446,625
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- -----------
<C> <S> <C> <C>
ENVIRONMENTAL CONTROL 1.95%
4,500 Culligan Water Technologies, Inc.* $ 207,000
11,500 Cuno, Inc. * 199,812
-----------
406,812
-----------
FINANCE COMPANY 3.32%
2,000 Finova Group, Inc. 189,250
5,500 Lehman Brothers Holdings Corp. 294,937
6,500 Pioneer Group, Inc. 208,000
-----------
692,187
-----------
FINANCIAL SERVICES 5.56%
10,500 AG Services of America, Inc.* 192,937
18,500 Boston Private Bancorp, Inc.* 148,000
5,000 Duff & Phelps Credit Rating Corp. 160,000
7,000 Federal Agricultural Mortgage Corp. Class C* 295,750
22,500 Phoenix Duff & Phelps Corp. 174,375
2,800 White River Corp.* 184,800
-----------
1,155,862
-----------
FOOD, BEVERAGE AND TOBACCO 5.35%
6,000 Earthgrains Co. 258,000
3,000 Interstate Bakeries Corp. 205,688
14,000 Ralcorp Holdings, Inc.* 261,625
11,500 Shells Seafood Restaurants, Inc.* 158,125
11,000 Tasty Baking Co. 229,625
-----------
1,113,063
-----------
FORESTRY 2.11%
19,500 Crown Vantage, Inc.* 227,906
6,500 Deltic Timber Corp. 212,469
-----------
440,375
-----------
FURNITURE/HOME APPLIANCES 1.81%
10,000 Furniture Brands International, Inc.* 188,750
5,300 Oneida, Ltd. 188,150
-----------
376,900
-----------
HOUSEHOLD PRODUCTS 2.14%
5,000 Masco Corp. 229,063
7,500 U.S. Industries, Inc. 217,500
-----------
446,563
-----------
HOUSING 3.68%
11,500 Kaufman & Broad Home Corp. 249,406
18,000 MDC Holdings, Inc. 178,875
6,000 Pacific Greystone Corp.* 119,250
11,000 Walter Industries, Inc.* 219,313
-----------
766,844
-----------
</TABLE>
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- -----------
<C> <S> <C> <C>
INSURANCE 6.45%
4,500 American Financial Group, Inc. $ 200,250
6,000 Equitable Companies, Inc. 246,375
8,500 Guaranty National Corp. 288,469
8,000 Highlands Insurance Group, Inc.* 195,000
7,500 Lawyers Title Corp. 230,625
2,800 Unitrin, Inc. 182,000
-----------
1,342,719
-----------
LODGING 5.23%
11,000 Choice Hotels International, Inc.* 211,750
9,500 Host Marriott Corp. * 216,125
18,000 Host Marriott Services Corp.* 267,750
3,000 Marriott International, Inc. 213,187
8,000 Prime Hospitality Corp.* 180,500
-----------
1,089,312
-----------
MACHINERY 4.12%
7,600 Chicago Rivet & Machine Co. 250,800
7,000 Gardner Denver Machinery, Inc.* 235,812
9,500 Global Industrial Technologies, Inc.* 196,531
16,000 TransPro, Inc. 174,000
-----------
857,143
-----------
MANUFACTURING 3.03%
9,000 ACX Technologies, Inc. * 239,625
13,000 Griffon Corp.* 211,250
6,000 Thomas Industries, Inc. 180,000
-----------
630,875
-----------
OIL AND GAS--EQUIPMENT & SERVICES 5.83%
4,000 Cooper Cameron Corp.* 287,250
30,000 Getty Petroleum Marketing, Inc. * 163,125
8,500 Lone Star Technologies, Inc.* 443,594
11,500 RPC, Inc. * 320,563
-----------
1,214,532
-----------
PHARMACEUTICALS AND HEALTHCARE 2.73%
8,500 Covance, Inc. * 183,812
15,000 Grancare, Inc.* 177,188
12,000 Morrison Health Care, Inc. 207,000
-----------
568,000
-----------
PRINTING AND PUBLISHING 2.78%
5,500 Bowne & Co., Inc. 193,187
6,000 Meredith Corp. 198,750
18,000 Primesource Corp. 186,750
-----------
578,687
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- -----------
<C> <S> <C> <C>
RAILROAD 3.87%
12,000 Kansas City Southern Industries, Inc. $ 413,250
10,000 Katy Industries, Inc. 180,000
15,000 Providence and Worcester Railroad Co. 211,875
-----------
805,125
-----------
REAL ESTATE 0.76%
9,000 Getty Realty Corp. 158,062
-----------
RETAIL 3.06%
14,000 Genesco, Inc. * 204,750
4,000 Harcourt General, Inc. 198,250
9,000 Zale Corp.* 233,438
-----------
636,438
-----------
SOFTWARE 0.81%
8,000 Wang Laboratories, Inc.* 168,500
-----------
TEXTILE AND APPAREL 2.90%
13,000 Burlington Industries, Inc. * 182,000
22,000 Cone Mills Corp. * 182,875
4,000 Payless ShoeSource, Inc. * 238,750
-----------
603,625
-----------
TRANSPORTATION 3.11%
16,500 MotivePower Industries, Inc. * 429,000
5,500 Pittston Brink's Group 220,344
-----------
649,344
-----------
TOTAL COMMON STOCKS 19,961,806
-----------
(cost $11,941,883)
WARRANTS 4.25%
6,000 Federated Department Stores Series C* 122,250
4,000 Fleet Financial Group, Inc.* 105,250
7,000 Golden State Bancorp* 132,125
14,500 Jacor Communication, Inc. * 59,813
5,500 Lone Star Industries, Inc.* 200,062
7,500 U.S. Home Corp. Class B* 138,750
4,000 USG Corp. * 127,000
-----------
TOTAL WARRANTS 885,250
-----------
(cost $357,149)
TOTAL INVESTMENTS 100.11%
(cost $12,299,032) 20,847,056
Liabilities less
cash and other assets (0.11)% (22,945)
-----------
NET ASSETS 100.00% $20,824,111
===========
*Non-income producing
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Net investment loss $ (239,612) $ (147,085)
Net realized gain on investments 909,527 451,325
Increase in unrealized appreciation on
investments 6,072,957 1,090,906
----------- -----------
Net increase in net assets resulting
from operations 6,742,872 1,395,146
----------- -----------
DISTRIBUTIONS:
Net realized gains (427,349) (17,153)
----------- -----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from 248,478 and 194,103 shares
issued, respectively 4,114,707 2,587,358
Proceeds from 28,064 and 1,327 shares of
distributions reinvested, respectively 413,943 16,410
Cost of 51,858 and 58,634 shares
redeemed, respectively (835,366) (782,791)
----------- -----------
Net increase from capital stock
transactions 3,693,284 1,820,977
----------- -----------
TOTAL INCREASE IN NET ASSETS 10,008,807 3,198,970
NET ASSETS:
Beginning of period 10,815,304 7,616,334
----------- -----------
End of period $20,824,111 $10,815,304
=========== ===========
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1995 1994(1)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 14.52 $ 12.52 $10.26 $10.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (0.25) (0.19) (0.13) (0.06)
Net realized and
unrealized gains on
investments 7.77 2.22 2.39 0.32
------- ------- ------ ------
TOTAL FROM INVESTMENT
OPERATIONS 7.52 2.03 2.26 0.26
------- ------- ------ ------
LESS DISTRIBUTIONS:
Net realized gains (0.56) (0.03) -- --
------- ------- ------ ------
NET ASSET VALUE, END OF
PERIOD $ 21.48 $ 14.52 $12.52 $10.26
======= ======= ====== ======
TOTAL RETURN (2) 53.51% 16.23% 22.03% 2.60%
SUPPLEMENTAL DATA AND
RATIOS:
Net assets, end of
period (in 000's) $20,824 $10,815 $7,616 $4,503
Ratio of expenses to
average net assets 2.45% 2.50% 2.50% 2.49%
Ratio of net investment
loss to average net
assets (1.66)% (1.61)% (1.46)% (0.96)%
Ratio of expenses to
average net assets(3) 2.45% 2.94% 3.94% 5.98%
Ratio of net investment
loss to average net
assets(3) (1.66)% (2.05)% (2.90)% (4.45)%
Portfolio turnover rate 36.40% 52.43% 70.59% 63.20%
Average commission rate
paid on portfolio
investment
transactions $0.0494 $0.0501 N/A N/A
</TABLE>
(1) The Fund commenced operations on October 1, 1993.
(2) The total return calculation does not reflect the 4.50% sales load imposed
on the purchase of shares.
(3) During the period, certain fees were waived. If such fee waivers had not
occurred, the ratios would have been as indicated.
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
1.ORGANIZATION
The KEELEY Small Cap Value Fund, Inc. (the "Fund") was incorporated on May
17, 1993 as a Maryland Corporation and is registered as a diversified open-
end investment company under the Investment Company Act of 1940 (the "1940
Act").
2.SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles
("GAAP"). The presentation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts in the financial statements and disclosure of contingent
liabilities. Actual results could differ from those estimates and
assumptions.
a) Investment Valuation - Securities which are traded on a recognized stock
exchange are valued at the last sale price on the securities exchange on
which such securities are primarily traded or at the last sale price on a
national securities exchange. Exchange-traded securities for which there
were no transactions are valued at the current bid prices. Securities traded
on only over-the-counter markets are valued on the basis of last sale price,
or closing over-the-counter bid prices when there is no last sale price
available. Debt securities which are purchased within 60 days of their
stated maturity date are valued at amortized cost, which approximates
current value. Securities for which quotations are not readily available are
valued at fair value as determined in good faith by the Board of Directors.
b) Federal Income Taxes - No provision for federal income taxes has been
made since the Fund has complied to date with the provisions under
Subchapter M of the Internal Revenue Code available to regulated investment
companies and intends to continue to so comply in future years.
c) Distributions to Shareholders - Dividends from net investment income, if
any, will be declared and paid annually. Distributions of net realized
gains, if any, will be declared and paid annually. Distributions to
shareholders are recorded on the ex-dividend date. The Fund may periodically
make reclassifications among certain of its capital accounts as a result of
the timing and characterization of certain income and realized gain
distributions determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. Accordingly,
at September 30, 1997, reclassifications were recorded from accumulated net
investment losses to reduce accumulated net realized gains by $239,612.
d) Other - Investment transactions are recorded on the trade date plus one.
The Fund determines the gain or loss realized from the investment
transactions by comparing the original cost of the security lot sold with
the net sale proceeds. Dividend income is recognized on the ex-dividend date
and interest income is recognized on an accrual basis.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
3.INVESTMENT ADVISORY AGREEMENT
The Fund has an agreement with Keeley Asset Management Corp. (the
"Adviser"), with whom certain officers and directors of the Fund are
affiliated, to furnish investment advisory services to the Fund. Under the
terms of this agreement, the Fund pays the Adviser a monthly fee at the
annual rate of 1.00% of the Fund's average net assets. Under the investment
advisory agreement, if the aggregate annual operating expenses (excluding
interest, taxes, brokerage commissions and other costs incurred in
connection with the purchase or sale of portfolio securities, and
extraordinary items) exceed 2.50%, the Adviser will reimburse the Fund for
the amount of such excess. As of September 30, 1997, John Keeley, Jr.,
President of the Adviser and the Fund, controlled either directly or
indirectly 28.39% of the Fund's outstanding shares.
4.DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. The Plan is designed to reimburse Keeley
Investment Corp. (the "Distributor"), with whom certain officers and
directors of the Fund are affiliated, for certain promotional and other
sales related costs and to permit the Fund to employ other dealers of its
shares. Unreimbursed amounts may be carried forward and paid in a subsequent
year. The Fund paid to the Distributor and each dealer a monthly fee at the
rate of 0.25% per annum of the aggregate daily net asset value of the Fund
shares beneficially owned by the Distributor's and each dealer's existing
brokerage clients. For the period from October 1, 1996 to September 30,
1997, the Fund paid $25,674 of distribution fees to the Distributor.
5.INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Fund for the period from October 1, 1996 to September
30, 1997, were $8,329,719 and $5,291,052, respectively. For the period from
October 1, 1996 to September 30, 1997, the Fund paid $29,580 of brokerage
commissions on trades of securities to the Distributor.
At September 30, 1997, gross unrealized appreciation and depreciation of
investments, based on cost for federal income tax purposes of $12,322,384,
were as follows:
<TABLE>
<S> <C>
Appreciation $8,595,138
Depreciation (70,466)
----------
Net appreciation on
investments $8,524,672
==========
</TABLE>
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
6.OFFERING PRICE PER SHARE
The public offering price is the net asset value plus a sales charge which
varies in accordance with the amount of the purchase as follows:
<TABLE>
<CAPTION>
SALES CHARGE
AS A PERCENTAGE OF
AMOUNT OFFERING PRICE
------ ------------------
<S> <C>
Less than $50,000 4.50%
$50,000 but less
than $100,000 4.00%
$100,000 but less
than $250,000 3.00%
$250,000 but less
than $500,000 2.50%
$500,000 and over 2.00%
</TABLE>
The Distributor retains the entire sales charge when it makes sales
directly to the public. Otherwise, when sales are made through dealers, the
Distributor receives a portion of the related sales charge. For the period
from October 1, 1996 to September 30, 1997, the Fund was advised that the
Distributor received $57,871 of sales charges.
As specified in the Fund's Prospectus, reduced sales charges are available
through a right of accumulation and certain sales of Fund shares can be made
at net asset value per share.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
KEELEY Small Cap Value Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
KEELEY Small Cap Value Fund, Inc., including the schedule of investments, as of
September 30, 1997, 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 periods
indicated. 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 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
September 30, 1997 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 present fairly, in all material respects, the financial position of
KEELEY Small Cap Value Fund, Inc. as of September 30, 1997, and 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 financial highlights for each of
the periods indicated, in conformity with generally accepted accounting
principles.
LOGO
Milwaukee, Wisconsin
October 17, 1997
<PAGE>
Investment Adviser
KEELEY ASSET MANAGEMENT CORP.
Chicago, Illinois
Distributor
KEELEY INVESTMENT CORP.
Chicago, Illinois
Custodian, Transfer Agent and Dividend
Disbursing Agent
FIRSTAR TRUST COMPANY
Milwaukee, Wisconsin
800-338-1579
Auditors
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
Counsel
SCHWARTZ & FREEMAN
Chicago, Illinois
Performance information is historical and is no guarantee of future results.
The investment return and principal value of shares will fluctuate and when
redeemed, may be worth more or less than the investor's original cost. This
material may only be used when preceded or accompanied by the Fund's
prospectus.
401 South LaSalle Street . Suite 1201 . Chicago . Illinois . 60605
(312) 786-5050 . (800) 533-5344 . (312) 786-5003
KEELEY SMALL CAP VALUE FUND, INC.
ANNUAL REPORT
SEPTEMBER 30, 1997
