<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
During the past six months, from April 1, 1999 through September 30, 1999, the
Fund's net assets grew from $44,489,166 to $52,622,095, an increase of 18.28%
and the number of shareholders grew 18.16% to 3,162. The Fund is registered in
all 50 states and the District of Columbia. Our broker-dealer network now
totals 143 firms.
Performance Data Excluding 4.5% Maximum Up-Front Sales Charge*
For the six month period ended September 30, 1999, the Fund's total return was
+8.93% versus a return of +8.24% for the Russell 2000 Index and +0.36% for the
S&P 500 Index. For the quarter ended September 30, 1999, the Fund's total
return was -8.27% versus a return of -6.32% for the Russell 2000 Index and -
6.24% for the S&P 500 Index. For the one year ending September 30, 1999, the
Fund's average annual return was +16.11% versus a return of +19.07% for the
Russell 2000 Index and +27.80% for the S&P 500 Index. For the five years ending
September 30, 1999, the Fund's average annual return was +17.74% versus +12.38%
for the Russell 2000 Index and +25.03% for the S&P 500 Index. Since inception,
the Fund's average annual return was +15.07% versus +10.70% for the Russell
2000 Index and +21.19% for the S&P 500 Index.
Near the end of the June 30, 1999 quarter, the Federal Reserve System increased
the overnight bank lending rate by 25 basis points signaling that it may
reverse the three 25 basis point declines given in late 1998. This tightening
triggered a correction of the stock market advance that began in October 1998
led by large cap technology and e-commerce equities. The second 25 basis point
increase came in August and exacerbated the equity market's decline through the
end of the quarter. Additional negative factors included the fear of another
rate increase prior to year end, investor concern over Y2K, and a weak dollar
versus the yen. An indication of the force of the market's decline may be seen
in the negative breadth statistics (the number of New York Stock Exchange
stocks advancing versus those declining). The end of the third quarter reading
puts the index 30% below the level recorded at the stock market bottom in
October 1998.
These factors impacted small cap value equities to a greater degree than mid to
large cap equities. Hence, the Fund underperformed the S&P 500 Index. In
addition, the small cap value securities held by the Fund are impacted to a
greater extent by changes in interest rates than the growth and value stocks in
the Russell 2000 Index.
Within this environment progress in the equity markets will be based on
earnings progress and a continuation of merger and acquisition activity, rather
than market liquidity. This activity may be accelerated during the next fifteen
months due to the probable elimination of pooling-of-interest accounting for
acquisitions by the Financial Accounting Standards Board, to be in effect by
December 2000.
The small/mid cap value sectors remain substantially undervalued in relation to
the large cap sector. Our investment process, which focuses on corporate
restructuring, emphasizes companies that are pure plays on specific businesses.
As a result, eight companies in our universe received premium to market
takeover bids in the first nine months of calendar year 1999. While we cannot
predict future takeovers of portfolio holdings, it is a byproduct of our
investment approach. The restructuring candidates have increased in number for
the Fall/Spring period, which should yield many attractive investment
opportunities over the next several quarters.
With the Fund's assets in excess of $52 million, the growth of assets has
reduced the expense ratio from 2.02% for the year ended September 30, 1998, to
1.98% for the year ended September 30, 1999.
<PAGE>
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,
/s/ John L. Keeley, Jr.
- -------------------------
John L. Keeley, Jr.
President
*Performance Data Including 4.5% Maximum Up-Front Sales Charge
For the six month period ended September 30, 1999, the Fund's total return was
+4.04% versus a return of +8.24% for the Russell 2000 Index and +0.36% for the
S&P 500 Index. For the quarter ended September 30, 1999, the Fund's total
return was -12.40% versus a return of -6.32% for the Russell 2000 Index and -
6.24% for the S&P 500 Index. For the one year ending September 30, 1999, the
Fund's average annual return was +10.90% versus a return of +19.07% for the
Russell 2000 Index and +27.80% for the S&P 500 Index. For the five years ending
September 30, 1999, the Fund's average annual return was +16.67% versus +12.38%
for the Russell 2000 Index and +25.03% for the S&P 500 Index. Since inception,
the Fund's average annual return was +14.19% versus +10.70% for the
Russell 2000 Index and +21.19% for the S&P 500 Index.
Performance data quoted represents past performance and the investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
<PAGE>
Index Comparison
Quarterly Comparison of a Hypothetical $10,000 Investment
in the KSCVF*, S&P 500** and Russell 2000**
----------------------------------------------------
S&P 500 RUSSELL 2000
KSCVF INDEX INDEX
----------------------------------------------------
10/01/93 9,551.00 10,000.00 10,000.00
----------------------------------------------------
SEPT 1994 9,799.43 10,368.60 10,267.48
----------------------------------------------------
SEPT 1995 11,957.98 13,452.66 12,666.45
----------------------------------------------------
SEPT 1996 13,898.50 16,187.93 14,329.94
----------------------------------------------------
SEPT 1997 21,335.98 22,735.56 19,085.72
----------------------------------------------------
SEPT 1998 19,097.00 24,792.00 15,456.00
----------------------------------------------------
SEPT 1999 22,173.00 31,686.00 18,404.00
----------------------------------------------------
Average annual total returns***
for periods ended September 30, 1998
<TABLE>
<CAPTION>
Since Commencement
12 mos ended 5 Yrs ended of Operations
9/30/99 9/30/99 10/1/93 to 9/30/99
------------ ----------- ------------------
<S> <C> <C> <C>
KSCVF +16.11% +17.74% +15.07%
KSCVF (includes
max 4
1/2% front-end load) +10.90% +16.67% +14.19%
S&P 500 Index +27.80% +25.03% +21.19%
Russell 2000 Index +19.07% +12.38% +10.70%
</TABLE>
* Performance graph includes deduction of the 4 1/2% front end load.
** The S&P 500 Index is a broad market-weighted index dominated by blue-chip
stocks. The Russell 2000 Index is comprised of the smallest 2000 companies in
the Russell 3000 Index. The Russell 3000 Index is comprised of the 3000
largest U.S. companies based on market capitalization. All Indexes are
unmanaged and returns include reinvested dividends.
***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, 1999
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost $46,017,650) $52,191,160
Cash 60
Receivable for investments sold 616,954
Receivables for shares issued 146,064
Dividends and interest receivable 27,034
Prepaid expenses 9,841
-----------
Total Assets 52,991,113
-----------
LIABILITIES:
Payable to Adviser 43,611
Payable for securities purchased 153,432
Payable for shares redeemed 84,460
Other accrued expenses 87,515
-----------
Total Liabilities 369,018
-----------
NET ASSETS $52,622,095
===========
NET ASSETS CONSIST OF:
Capital stock $45,135,289
Accumulated net realized gain on investments 1,313,296
Unrealized net appreciation on investments 6,173,510
-----------
TOTAL NET ASSETS $52,622,095
===========
CAPITAL STOCK, $0.01 par value
Authorized 10,000,000
Issued and outstanding 2,523,776
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $20.85
===========
MAXIMUM OFFERING PRICE PER SHARE $21.83
===========
</TABLE>
See notes to the financial statements.
KEELEY Small Cap Value Fund, Inc.
STATEMENT OF OPERATIONS
For The Year Ended September 30, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend income $ 441,608
Interest income 71,428
Other 1,011
----------
514,047
----------
EXPENSES:
Investment advisory fees 485,263
12b-1 fees 121,316
Administration fees 72,789
Transfer agent fees and expenses 69,915
Legal fees 54,651
Reports to shareholders 47,866
Federal and state registration fees 27,001
Fund accounting fees 26,725
Custody fees 23,593
Audit fees 17,861
Directors' fees 8,503
Other 2,992
----------
Net expenses 958,475
----------
Net investment loss (444,428)
----------
REALIZED AND UNREALIZED GAINS:
Net realized gain on investments 1,823,344
Increase in net unrealized appreciation on investments 5,076,488
----------
Net gain on investments 6,899,832
----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $6,455,404
==========
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY Small Cap Value Fund, Inc.
SCHEDULE OF INVESTMENTS
September 30, 1999
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<C> <S> <C> <C>
COMMON STOCKS 96.13%
Advertising 0.61%
21,000 Snyder Communications, Inc. $ 318,937
-----------
Aerospace 0.60%
31,000 The Fairchild Corp., Class A* 317,750
-----------
Automotive 0.83%
21,000 Meritor Automotive, Inc. 438,375
-----------
Building Materials 1.72%
70,000 Homebase, Inc.* 275,625
18,500 Nortek, Inc.* 631,313
-----------
906,938
-----------
Business Service 1.11%
31,500 R.H. Donnelley Corp. 586,688
-----------
Chemicals 0.58%
19,000 Arch Chemicals, Inc. 307,562
-----------
Communications and Media 12.80%
28,500 The Ackerley Group, Inc. 350,906
24,000 Anacomp, Inc.* 395,250
8,500 Associated Group, Inc., Class A* 514,250
15,000 CBS Corp. 693,750
12,000 Cox Communications, Inc., Class A* 501,000
9,000 GC Companies, Inc.* 270,000
36,500 Information Resources, Inc.* 403,781
9,000 Media General, Inc., Class A 461,250
43,510 Paxson Communications* 532,997
62,550 Price Communications Corp.* 1,567,659
14,000 Sprint Corp. (PCS Group)* 1,043,875
-----------
6,734,718
-----------
Consumer Products 1.46%
27,500 Flowers Industries, Inc. 372,969
28,000 Justin Industries, Inc. 397,250
-----------
770,219
-----------
Consumer Service 2.26%
12,000 Chemed Corp. 363,000
26,500 Coinmach Laundry Corp.* 258,375
18,000 Pittway Corp., Class A 567,000
-----------
1,188,375
-----------
Containers 3.38%
18,500 Alltrista Corp.* 483,313
27,500 American National Can Group, Inc.* 434,844
36,000 Bway Corp.* 357,750
24,500 U.S. Can Corp.* 500,719
-----------
1,776,626
-----------
Diversified Manufacturing 0.81%
21,500 Mark IV Industries, Inc. 424,625
-----------
Electronics 0.84%
11,000 Moog, Inc., Class B* 442,750
-----------
Engineering and Construction 2.47%
33,500 Commercial Intertech Corp. 404,093
23,500 Emcor Group, Inc.* 452,375
43,000 Morrison Knudsen Corp.* 443,437
-----------
1,299,905
-----------
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<C> <S> <C> <C>
Entertainment and Leisure 3.93%
13,500 Gaylord Entertainment $ 398,250
33,500 On Command Corp.* 636,500
14,000 SFX Entertainment, Inc., Class A* 427,000
52,000 WMS Industries, Inc.* 604,500
-----------
2,066,250
-----------
Environmental Control 0.72%
19,000 Cuno, Inc.* 377,625
-----------
Finance Company 6.53%
17,000 Alliance Bancorp, Inc. 333,625
49,000 Boston Private Financial Holdings, Inc.* 437,937
35,500 Brookline Bancorp, Inc. 361,656
42,000 Capital Federal Financial* 418,688
42,000 CFS Bancorp, Inc. 438,375
8,500 Finova Group, Inc. 310,250
34,000 Harbor Florida Bancshares, Inc. 414,375
25,000 Hudson City Bancorp, Inc.* 343,750
34,000 Hudson River Bancorp, Inc.* 376,125
-----------
3,434,781
-----------
Financial Services 7.40%
28,000 AG Services of America, Inc.* 428,750
4,500 Duff & Phelps Credit Rating Corp. 359,719
39,000 Federal Agricultural Mortgage Corp., Class C* 777,563
14,000 Investment Technology Group, Inc. 322,000
20,500 Jefferies Group, Inc. 427,938
56,000 Phoenix Investment Partners, Ltd. 469,000
20,000 PICO Holdings, Inc.* 428,750
16,500 Pioneer Group, Inc. 247,500
19,406 Waddell & Reed Financial, Inc. 430,571
-----------
3,891,791
-----------
Food, Beverage and Tobacco 6.32%
13,000 Earthgrains Co. 287,625
64,000 ICH Corp.* 804,000
45,000 M & F Worldwide Corp.* 360,000
86,000 Nathans Famous, Inc.* 274,125
27,000 Ralcorp Holdings, Inc.* 477,562
30,000 Tasty Baking Co. 348,750
10,500 Tricon Global Restaurants, Inc.* 429,844
24,000 Whitman Corp. 342,000
-----------
3,323,906
-----------
Forestry 1.57%
18,300 Deltic Timber Corp. 416,325
19,000 St. Joe Corp. 409,688
-----------
826,013
-----------
Furniture/Home Appliances 0.71%
19,000 Furniture Brands International, Inc.* 374,063
-----------
Household Products 2.38%
13,500 Chesapeake Corp. 408,375
15,000 Masco Corp. 465,000
24,000 U.S. Industries, Inc. 378,000
-----------
1,251,375
-----------
</TABLE>
<PAGE>
KEELEY Small Cap Value Fund, Inc.
SCHEDULE OF INVESTMENTS
September 30, 1999
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<C> <S> <C> <C>
Housing 3.60%
22,000 Kaufman & Broad Home Corp. $ 453,750
23,000 Lennar Corp. 366,563
19,500 MDC Holdings, Inc. 315,656
13,000 U.S. Home Corp.* 361,562
29,500 Walter Industries, Inc.* 398,250
-----------
1,895,781
-----------
Insurance 3.28%
2,100 Alleghany Corp.* 371,700
13,000 American Financial Group, Inc. 364,812
15,500 The MONY Group, Inc. 447,563
15,500 Unitrin, Inc. 538,625
-----------
1,722,700
-----------
Lodging 2.21%
32,000 Choice Hotels International, Inc.* 548,000
83,000 Meristar Hotels & Resorts, Inc.* 243,812
60,000 Sunburst Hospitality Corp.* 371,250
-----------
1,163,062
-----------
Machinery 0.69%
27,000 Unova, Inc.* 361,125
-----------
Manufacturing 3.09%
43,000 Griffon Corp.* 344,000
27,000 Hussmann International, Inc. 459,000
13,000 ITT Indsutries, Inc. 413,563
22,000 Thomas Industries, Inc. 411,125
-----------
1,627,688
-----------
Oil and Gas--Equipment & Services 4.24%
22,000 Evergreen Resources, Inc.* 529,375
65,000 Getty Petroleum Marketing, Inc.* 178,750
86,000 Key Energy Services, Inc.* 424,625
27,500 Penzoil-Quaker State Co. 347,188
80,000 Titan Exploration, Inc.* 395,000
16,500 Watts Industries, Inc. 358,950
-----------
2,233,888
-----------
Pharmaceuticals and Healthcare 1.29%
24,000 Morrison Health Care Inc. 540,000
14,000 Ventiv Health, Inc. 138,013
-----------
678,013
-----------
Printing and Publishing 2.91%
9,500 Meredith Corp. 344,969
30,500 Penton Media, Inc. 495,625
41,000 Primesource Corp. 238,312
10,000 Pulitzer, Inc. 454,375
-----------
1,533,281
-----------
Railroad 3.25%
13,000 Kansas City Southern Industries, Inc. 603,687
25,000 Katy Industries, Inc. 300,000
35,000 Providence and Worcester Railroad Co. 350,625
9,500 Union Pacific Corp. 456,594
-----------
1,710,906
-----------
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<C> <S> <C> <C>
Real Estate 0.63%
24,500 Getty Realty Corp. $ 330,750
-----------
Retail 4.42%
37,500 Bradlees, Inc.* 600,000
9,500 Harcourt General, Inc. 395,437
11,000 The Limited, Inc. 420,750
20,000 Midas, Inc. 412,500
13,000 Zale Corp.* 498,062
-----------
2,326,749
-----------
Semiconductors 2.07%
15,000 Conezant Systems, Inc.* 1,089,844
-----------
Software 0.74%
18,500 BARRA, Inc.* 388,500
-----------
Textile and Apparel 0.75%
25,000 Shaw Industries, Inc. 396,875
-----------
Transportation 2.62%
55,500 Avalon Holdings Corp., Class A* 312,188
32,000 MotivePower Industries, Inc.* 352,000
14,000 Pittston Brink's Group 324,625
14,000 Sea Containers Ltd., Class A 392,000
-----------
1,380,813
-----------
Utilities 1.31%
61,000 Citizens Utilities Co., Class B* 690,063
-----------
Total Common Stocks 50,589,310
-----------
(cost $44,568,219)
WARRANTS 0.91%
19,000 Golden State Bancorp, Inc.* 137,750
24,300 Jacor Communications* 340,200
-----------
Total Warrants 477,950
-----------
(cost $325,531)
<CAPTION>
Principal
Amount
---------
<C> <S> <C> <C>
SHORT TERM INVESTMENTS 2.14%
$1,123,900 Firstar Bank Demand Note,
5.1300%, 10/1/99 1,123,900
-----------
Total Short Term Investments 1,123,900
-----------
(cost $1,123,900)
Total Investments 99.18%
(cost $46,017,650) 52,191,160
Other Assets less Liabilities 0.82% 430,935
-----------
NET ASSETS 100.00% $52,622,095
===========
</TABLE>
*Non-income producing
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, 1999 September 30, 1998
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Net investment loss $ (444,428) $ (359,668)
Net realized gain on investments 1,823,344 1,250,693
Increase (decrease) in net unrealized
appreciation on investments 5,076,488 (7,451,002)
----------- -----------
Net increase (decrease) in net assets
resulting from operations 6,455,404 (6,559,977)
----------- -----------
DISTRIBUTIONS:
Net realized gains (892,529) (1,025,487)
----------- -----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from 1,035,691 and 1,382,316
shares issued, respectively 20,988,777 30,360,643
Proceeds from 45,208 and 50,348 shares
of distributions reinvested,
respectively 864,849 1,013,504
Cost of 728,007 and 231,423 shares
redeemed, respectively (14,541,243) (4,865,957)
----------- -----------
Net increase from capital stock
transactions 7,312,383 26,508,190
----------- -----------
TOTAL INCREASE IN NET ASSETS 12,875,258 18,922,726
NET ASSETS:
Beginning of year 39,746,837 20,824,111
----------- -----------
End of year $52,622,095 $39,746,837
=========== ===========
</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 Year Ended
September 30, September 30, September 30, September 30, September 30,
1999 1998 1997 1996 1995
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA (1)
Net asset value,
beginning of period $ 18.31 $ 21.48 $ 14.52 $ 12.52 $10.26
Income from investment
operations:
Net investment loss (0.18) (0.16) (0.25) (0.19) (0.13)
Net realized and
unrealized gains
(losses) on
investments 3.10 (2.00) 7.77 2.22 2.39
------- ------- ------- ------- ------
Total from investment
operations 2.92 (2.16) 7.52 2.03 2.26
------- ------- ------- ------- ------
Less distributions:
Net realized gains (0.38) (1.01) (0.56) (0.03) --
------- ------- ------- ------- ------
Net asset value, end of
year $ 20.85 $ 18.31 $ 21.48 $ 14.52 $12.52
======= ======= ======= ======= ======
Total return (2) 16.11% (10.50)% 53.51% 16.23% 22.03%
Supplemental data and
ratios:
Net assets, end of
period
(in 000's) $52,622 $39,747 $20,824 $10,815 $7,616
Ratio of expenses to
average net assets 1.98% 2.02% 2.45% 2.50% 2.50%
Ratio of net investment
loss to average net
assets (0.92)% (1.17)% (1.66)% (1.61)% (1.46)%
Ratio of expenses to
average net assets(3) 1.98% 2.02% 2.45% 2.94% 3.94%
Ratio of net investment
loss to average net
assets(3) (0.92)% (1.17)% (1.66)% (2.05)% (2.90)%
Portfolio turnover rate 40.19% 33.40% 36.40% 52.43% 70.59%
</TABLE>
(1) Per share data is for a share outstanding throughout the year.
(2) The total return calculation does not reflect the 4.50% sales load imposed
on the purchase of shares.
(3) During the years ended September 30, 1996 and 1995, 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, 1999
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 of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. 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 purchased within 60 days of their stated maturity
date are valued at amortized cost, which approximates fair 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 and Excise Taxes - It is the Fund's policy to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all investment company net taxable
income and net capital gains to shareholders in a manner which results in no
tax cost to the Fund. Therefore, no federal income or excise tax provision
is required.
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 characterization of certain income and realized gains determined
annually in accordance with federal tax regulations that may differ from
generally accepted accounting principles. Accordingly, at September 30,
1999, reclassifications were recorded from accumulated net investment losses
to reduce accumulated net realized gain on investments by $444,428.
<PAGE>
KEELEY Small Cap Value Fund, Inc.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1999
2.SIGNIFICANT ACCOUNTING POLICIES (continued)
d) Other - Investment transactions are recorded on the trade date for
financial statement purposes. The Fund determines the gain or loss realized
from investment transactions by comparing the identified 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.
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 daily 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% of the Fund's average daily net assets,
the Adviser will reimburse the Fund for the amount of such excess.
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 compensate 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 annual rate of 0.25% of the average daily net assets of Fund
shares beneficially owned by the Distributor's and each dealer's existing
brokerage clients. For the period from October 1, 1998 to September 30,
1999, the Fund paid $54,318 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, 1998 to September
30, 1999, were $28,325,564 and $18,894,873, respectively. For the period
from October 1, 1998 to September 30, 1999, the Fund paid $135,572 of
brokerage commissions on trades of securities to the Distributor.
At September 30, 1999, gross unrealized appreciation and depreciation of
investments, based on cost for federal income tax purposes of $46,153,431,
were as follows:
<TABLE>
<S> <C>
Appreciation $10,966,891
Depreciation (4,929,162)
-----------
Net appreciation on investments $ 6,037,729
===========
</TABLE>
<PAGE>
KEELEY Small Cap Value Fund, Inc.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1999
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 Sales Charge Dealer Reallowance
Amount of Single as a Percentage of as a Percentage of as a Percentage of
Transaction Offering Price Net Amount Invested Offering Price
- ---------------- ------------------ ------------------- ------------------
<S> <C> <C> <C>
Less than $50,000 4.50% 4.71% 4.00%
$50,000 but less than
$100,000 4.00% 4.17% 3.50%
$100,000 but less than
$250,000 3.00% 3.09% 2.50%
$250,000 but less than
$500,000 2.50% 2.56% 2.00%
$500,000 and over 2.00% 2.04% 1.50%
</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, 1998 to September 30, 1999, the Fund was advised that the
Distributor received $66,395 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.
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of KEELEY Small Cap Value Fund,
Inc. (the "Fund") at September 30, 1999, the results of its operations for the
year then ended, the changes in its net assets for each of the two years then
ended and the financial highlights for each of the five years then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at September 30, 1999 by correspondence with the custodian and
brokers, provides a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
/s/ PricewaterhouseCoopers LLP
- ---------------------------------
Milwaukee, Wisconsin
October 19, 1999
<PAGE>
Investment Adviser
KEELEY ASSET MANAGEMENT CORP.
Chicago, Illinois
Distributor
KEELEY INVESTMENT CORP.
Chicago, Illinois
Custodian
FIRSTAR BANK MILWAUKEE, N.A.
Milwaukee, Wisconsin
800-338-1579
Transfer Agent and Dividend Disbursing Agent
FIRSTAR MUTUAL FUND SERVICES, LLC
Milwaukee, Wisconsin
800-338-1579
Auditors
PRICEWATERHOUSECOOPERS LLP
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, 1999
