Cornercap Group Of Funds NCSR Certified annual shareholder report (management investment company)

Cornercap Group Of Funds N-CSRCertified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-04581

CORNERCAP GROUP OF FUNDS

(Exact name of registrant as specified in charter)

The Peachtree, Suite 1700, 1355 Peachtree Street NE, Atlanta, Georgia 30309

(Address of principal executive offices) (Zip code)

Paul F. Leone, Esq.

ALPS Fund Services, Inc.

1290 Broadway, Suite 1100, Denver, Colorado 80203

(Name and address of agent for service)

Registrant’s telephone number, including area code: (404) 870-0700

Date of fiscal year end: March 31

Date of reporting period: April 1, 2013 – March 31, 2014

Item 1. Reports to Stockholders.

LOGO


Table of Contents



Manager’s Report to the Shareholders		1
CornerCap Balanced Fund		3
CornerCap Small-Cap Value Fund		5
CornerCap Large/Mid-Cap Value Fund		7

Fund Expenses		9

Schedule of Investments
CornerCap Balanced Fund		11
CornerCap Small-Cap Value Fund		17
CornerCap Large/Mid-Cap Value Fund		23

Statements of Assets and Liabilities		26

Statement of Operations		28

Statements of Changes in Net Assets
CornerCap Balanced Fund		30
CornerCap Small-Cap Value Fund		31
CornerCap Large/Mid-Cap Value Fund		31

Financial Highlights
CornerCap Balanced Fund		32
CornerCap Small-Cap Value Fund		34
CornerCap Large/Mid-Cap Value Fund		36

Notes to Financial Statements		38

Report of Independent Registered
Public Accounting Firm		47

Additional Information		48


Manager’s Report to Shareholders (Unaudited)
		March 31, 2014

Dear Shareholders:

CornerCap Investment Counsel recently celebrated our 25th year in business, following our departure from RJR Nabisco in March 1989. Over that period, we have grown the firm through reputation, returns and retention of clients.

A little bit of history … With modest assets under management, in September 1992 we decided to enter the mutual fund business. Managing, administering and serving mutual funds are exceptionally expensive. We also decided to only manage pure no-load funds. In other words, there would be no monies coming from fund shareholders to compensate anyone selling our funds, i.e. growth would be slow. We knew that CornerCap would be absorbing most of the mutual fund expenses for a number of years, and we did.

To finish the firm-fund-bio, to save costs we found and “acquired” one of the worst performing funds in the marketplace, the Sunshine Growth Trust (SGT) in California. The SGT evolved to become our CornerCap Small Cap Value fund. Since September 1992, this previously failed fund has realized a 10.13% before tax annualized return after all costs. It is interesting that of the 1,166 small cap value/blend mutual funds that are currently in the Morningstar Universe, we are one of only 45 funds with investment results over this 21.5 year period. Please see page 5 for the complete standardized performance.

As noted earlier, we grow by reputation and returns. Over the last fiscal year, the assets in our three mutual funds grew 47%, from $64 million to $94 million. Our investment advisory firm has over $900 million in client assets. We appreciate you and our other loyal clients for helping to make that happen.

And the results were … Over that last fiscal year, all three of our mutual funds have realized much higher than normal absolute returns and have also outpaced their benchmarks. Our two all-equity funds, the Large/Mid Value and the Small Cap Value, have returned 28.42% and 33.09% while their benchmark returns were 21.86% for the S&P 500^® Index and 22.65% for the Russell 2000^® Value Index, respectively. Our more conservative Balanced fund realized a return of 16.76% versus 12.70% for the Combined 60% S&P 500^® Index/40% Barclays Capital U.S. Government/Corporate Bond Index benchmark.

As noted above, this fiscal year reflected a significant outperformance of each funds’ benchmark return. The market is on a five year rebound following the extreme 2007-2009 market crash. However even as the market was recovering during the initial years, investors were fearfully tiptoeing through an imagined minefield. The biggest stock winners ignored valuations and simply reflected safety: Higher yield, low beta* (more market-like), low volatility and mega-cap stocks. However, earnings and cash flows did not support these investor preferences and the market has reversed – safety materially underperformed during this fiscal year.

We are confident that valuation wins over time. Everyone knows that price is important whether you’re in the stock market or the supermarket. The confusion comes with the opportunity for sellers to create much more excitement and fear with stocks than with groceries. Our disciplined, valuation-focused research has created average annual returns over the last five years of 21.98% for the Large/Mid Cap, 27.29% for the Small Cap, and 14.74% for the Balanced funds, all exceeding their benchmarks. Please see pages 3, 5 and 7 for complete standardized performance.



Annual Report \| March 31, 2014		1


Manager’s Report to Shareholders (Unaudited)
		March 31, 2014

And the problem was … For our taxable shareholders, the unfortunate byproduct of exceptional returns is higher taxes. For those who have read the most recent commentary on our website, 2013 represented “The Perfect Storm” for taxes. And, the conditions still exist for the continuation of that storm. For higher income taxpayers, in 2013 we had:

•

High investment returns

•

The long term capital gains tax rate went up almost 60%, from 15% to 23.8%

•

The elimination of some tax deductions

•

Most tax loss carry forwards from the 2007-2009 market crash have been depleted

At CornerCap, while we put investments first, we pay close attention to taxes. If we have a large gain in a security that needs to be trimmed or eliminated, we check the long term capital gain threshold (one year) and make a calculated decision about selling now or delaying the sale until it becomes long term. Throughout the taxable year we review holdings for any significant tax harvesting opportunities, potentially buying more of the underweighted holding and then selling the lots with tax losses after the wash sell rule is achieved (30 days). And of course, we only sell a holding when the fundamentals do not support retention or when the security’s weighting exceeds the fund’s portfolio management guidelines. We pay attention to taxes but eventually taxes have to be paid.

Thank you for being a shareholder in our CornerCap Group of Funds and please let us know if we can be of service to any of your family or friends.

CornerCap Investment Counsel

May 31, 2014

*Beta

– A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

The Letter to Shareholders seeks to describe some of CornerCap Investment Counsel’s current opinions and views of the financial markets. Although CornerCap Investment Counsel believes it has a reasonable basis for any opinions or views expressed, actual results may differ, sometimes significantly so, from those expected or expressed.

Diversification does not eliminate the risk of experiencing investment loss.



2		www.cornercapfunds.com


Manager’s Report to Shareholders (Unaudited)
		March 31, 2014

CORNERCAP BALANCED FUND

Investment Performance through March 31, 2014 (In Thousands)

LOGO

Total Return

for the period ended March 31, 2014


	1 Year	5 Year	10 Year	Since Inception^(b)	Gross Expense Ratio	Net Expense Ratio^(c)
CornerCap Balanced Fund^(a)	16.76%	14.74%	5.96%	5.97%	1.32%	1.12%
Combined 60% S&P 500^® Index/40% Barclays Capital U.S. Government/ Corporate Bond Index^(d)	12.70%	14.36%	6.30%	6.53%
S&P 500^® Index^(e)	21.86%	21.16%	7.42%	6.75%
Barclays Capital U.S. Government/Corporate Bond Index^(f)	(0.13%)	4.18%	3.94%	5.32%

Past performance does not guarantee future results. The performance data quoted does not reflect the deduction of the 1% redemption fee imposed if shares are redeemed or exchanged within sixty days of purchase or the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Data quoted represents past performance.

Investment return and share price will fluctuate with market conditions, and investors may have a gain or loss when shares are sold. Mutual fund performance changes over time and currently may be significantly lower than stated above. Performance is updated and published monthly. Visit the Fund’s website at www.cornercapfunds.com or call 888-813-8637 for month-end performance figures.



Annual Report \| March 31, 2014		3


Manager’s Report to Shareholders (Unaudited)
		March 31, 2014

^(a)

The Fund’s total returns include the reinvestment of dividend and capital gain distributions but have not been adjusted for any income taxes payable by shareholders on these distributions.

^(b)

The Balanced Fund began operations May 24, 1997.

^(c)

CornerCap Investment Counsel, Inc. (the “Adviser”) has entered into a contractual agreement with the Balanced Fund under which it has agreed to waive or reduce its fees and to assume other expenses of the Balanced Fund, if necessary, in an amount that limits “Total Annual Fund Operating Expenses” (exclusive of interest, taxes, brokerage fees and commissions, Acquired Fund Fees and Expenses, and extraordinary expenses) to not more than 1.10%. To the extent the Balanced Fund incurs excluded expenses, the expense ratio will increase. The current contractual agreement cannot be terminated prior to August 1, 2014 without the Board of Trustees’ approval.

^(d)

Effective August 17, 2006, the Balanced Fund has elected to use the comparative index 60% S&P 500^® Index and 40% Barclays Capital U.S. Government/Corporate Bond Index.

^(e)

The S&P 500^® Index is an unmanaged index of 500 common stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding) with each stock’s weight in the Index proportionate to its market value.

^(f)

The Barclays Capital U.S. Government/Corporate Bond Index measures the general performance of fixed-income securities by tracking publicly issued U.S. Treasury and debt obligations (excluding mortgage-backed securities), fixed-rate, non-convertible, investment-grade corporate debt securities, and U.S. dollar-denominated, SEC-registered non-convertible debt issued by foreign governmental entities or international agencies.

The index figures do not reflect any deduction for fees, expenses or taxes. It is not possible to invest directly in an index.

Sector Allocation as a Percentage of Total Investments at March 31, 2014*

LOGO

*	These allocations may not reflect the current or future position of the portfolio.



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Manager’s Report to Shareholders (Unaudited)
		March 31, 2014

CORNERCAP SMALL-CAP VALUE FUND

Investment Performance through March 31, 2014 (In Thousands)

LOGO

Total Return

for the period ended March 31, 2014


	1 Year			5 Year			10 Year			Since Inception^(b)			Gross Expense Ratio			Expense Ratio^(c)
CornerCap Small-Cap Value Fund^(a)		33.09	%		27.29	%		7.82	%		10.13	%		1.51	%		1.31	%
Russell 2000^® Value Index^(d)		22.65	%		23.33	%		8.07	%		11.69	%
Russell 2000^® Index^(e)		24.90	%		24.31	%		8.53	%		10.24	%



Annual Report \| March 31, 2014		5


Manager’s Report to Shareholders (Unaudited)
		March 31, 2014

^(a)

The Fund’s total returns include the reinvestment of dividend and capital gain distributions, but have not been adjusted for any income taxes payable by shareholders on these distributions.

^(b)

The Small-Cap Value Fund began operations on September 30, 1992.

^(c)

CornerCap Investment Counsel, Inc. (the “Adviser”) has entered into a contractual agreement with the Small-Cap Value Fund under which it has agreed to waive or reduce its fees and to assume other expenses of the Small-Cap Value Fund, if necessary, in an amount that limits “Total Annual Fund Operating Expenses” (exclusive of interest, taxes, brokerage fees and commissions, Acquired Fund Fees and Expenses, and extraordinary expenses) to not more than 1.30%. To the extent the Small-Cap Value Fund incurs excluded expenses, the expense ratio will increase. The current contractual agreement cannot be terminated prior to August 1, 2014 without the Board of Trustees’ approval.

^(d)

The Russell 2000^® Value Index measures the 2,000 smallest of the 3,000 largest U.S. Companies (based on total market capitalization) that have lower price-to-book ratios and lower forecasted growth values. Index returns include dividends and/or interest income and, unlike Fund returns, do not reflect fees or expenses.

^(e)

The Russell 2000^® Index is an index that measures the performance of the 2,000 smallest companies in the Russell 3000^® Index.

The index figures do not reflect any deduction for fees, expenses or taxes. It is not possible to invest directly in an index.

Sector Allocation

as a Percentage of Total Investments at March 31, 2014*

LOGO

*	These allocations may not reflect the current or future position of the portfolio.



6		www.cornercapfunds.com


Manager’s Report to Shareholders (Unaudited)
		March 31, 2014

CORNERCAP LARGE/MID-CAP VALUE FUND

Investment Performance through March 31, 2014 (In Thousands)

LOGO

Total Return

for the period ended March 31, 2014


	1 Year	5 Year	10 Year	Since Inception^(b)	Gross Expense Ratio	Net Expense Ratio^(c)
CornerCap Large/Mid-Cap Value Fund^(a)	28.42%	21.98%	6.34%	2.80%	1.51%	1.21%
S&P 500^® Index^(d)	21.86	21.16%	7.42%	3.98%
Russell 1000^® Value Index^(e)	21.57%	21.75%	7.58%	6.77%

^(a)

The Fund’s total returns include the reinvestment of dividend and capital gain distribution, but have not been adjusted for any income taxes payable by shareholders on these distributions.

^(b)

Effective July 29, 2010, the CornerCap Contrarian Fund changed its name to the CornerCap Large/Mid-Cap Value Fund. The CornerCap Large/Mid-Cap Value Fund maintains the same



Annual Report \| March 31, 2014		7


Manager’s Report to Shareholders (Unaudited)
		March 31, 2014

investment objective as the CornerCap Contrarian Fund: long-term capital appreciation. Prior to October 11, 2004, the CornerCap Contrarian Fund was known as the CornerCap Micro-Cap Fund. The performance figures include figures for the Cornerstone Micro-Cap Fund, L.P., which was a private, unregistered fund managed by CornerCap Investment Counsel, Inc. (the “Adviser”) that began operations in August 31, 1996 and transferred all its assets to the Micro-Cap Fund on July 27, 2000. The Cornerstone Micro-Cap Fund was managed by the same Adviser as the Micro-Cap Fund. It pursued the same objectives and employed the same strategies as the Micro-Cap Fund. As of December 11, 2004, the Fund’s strategy was changed to multi-cap contrarian.

^(c)

The Adviser has entered into a contractual agreement with the Large/Mid-Cap Fund under which it has agreed to waive or reduce its fees and to assume other expenses of the Large/Mid- Cap Fund, if necessary, in an amount that limits “Total Annual Fund Operating Expenses” (exclusive of interest, taxes, brokerage fees and commissions, Acquired Fund Fees and Expenses, and extraordinary expenses) to not more than 1.20%. To the extent the Large/Mid- Cap Value Fund incurs excluded expenses, the expense ratio will increase. The contractual agreement cannot be terminated prior to August 1, 2014 without the Board of Trustees’ approval.

^(d)

^(e)

The Russell 1000^® Value Index measures the performance of those companies out of the 1,000 largest U.S. companies (based on total market capitalization) that have lower price-to-book ratios and lower forecasted growth values.

The index figures do not reflect any deduction for fees, expenses or taxes. It is not possible to invest directly in an index.

Sector Allocation

as a Percentage of Total Investments at March 31, 2014*

LOGO

*	These allocations may not reflect the current or future position of the portfolio.



8		www.cornercapfunds.com


Fund Expenses (Unaudited)

As a shareholder of a Fund, you incur two types of costs: transaction costs, such as wire fees, redemption fees, and low balance fees, and ongoing costs, including management fees, and other fund operating expenses. This example is intended to help you understand your indirect costs, also referred to as “ongoing costs” (in dollars), of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period of October 1, 2013 through March 31, 2014.

Actual Expenses The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested at the beginning of the period, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes The second line of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as wire fees, redemption fees or low balance fees. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these direct costs were included, your costs would be higher.


	Beginning Account Value 10/01/2013			Ending Account Value 3/31/2014			Expense Paid During Period^(a)
CornerCap Balanced Fund
Actual Fund Return		$	1,000.00		$	1,100.20		$	5.76
Hypothetical Fund Return (5% return before expenses)		$	1,000.00		$	1,019.45		$	5.54
CornerCap Small-Cap Value Fund
Actual Fund Return		$	1,000.00		$	1,122.60		$	6.88
Hypothetical Fund Return (5% return before expenses)		$	1,000.00		$	1,018.45		$	6.54
CornerCap Large/Mid-Cap Value Fund
Actual Fund Return		$	1,000.00		$	1,151.90		$	6.44
Hypothetical Fund Return (5% return before expenses)		$	1,000.00		$	1,018.95		$	6.04



Annual Report \| March 31, 2014		9


Fund Expenses (Unaudited)

^(a)

These calculations are based on the expenses incurred in the most recent fiscal half-year. The period’s annualized six-month expense ratio is 1.10% for Balanced Fund; 1.30% for Small-Cap Value Fund and 1.20% for Large/Mid-Cap Value Fund, respectively. The dollar amounts shown as “Expenses Paid During Period” are equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent half-year (182), then divided by 365.

The expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect any transactional costs, account maintenance fees or charges by processing organizations. The Fund does not charge any account maintenance fee or sales load, but does charge a 1.00% redemption fee that is applicable to all redemptions (sales or exchanges) made within sixty (60) days of an initial purchase of shares; provided, however, that the redemption fee will not apply if the shares to be redeemed are held in a retirement account subject to the Employee Retirement Income Security Act.



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Schedule of Investments
CornerCap Balanced Fund		March 31, 2014


	Shares		Fair Value

COMMON STOCKS (61.5%)
Aerospace & Defense (1.4%)
General Dynamics Corp.		3,050	$	332,206


Agriculture (1.2%)
Altria Group, Inc.		7,770		290,831


Auto Manufacturers (1.2%)
General Motors Co.		8,290		285,342


Banks (10.5%)
The Bank of New York Mellon Corp.		8,155		287,790
BB&T Corp.		8,120		326,180
Capital One Financial Corp.		4,580		353,393
Citigroup, Inc.		5,920		281,792
The Goldman Sachs Group, Inc.		1,755		287,557
JPMorgan Chase & Co.		5,110		310,228
The PNC Financial Services Group, Inc.		3,495		304,065
Wells Fargo & Co.		6,585		327,538

				2,478,543


Chemicals (1.3%)
Eastman Chemical Co.		3,530		304,321


Commercial Services (1.3%)
The Western Union Co.		18,180		297,425


Computers (3.9%)
EMC Corp.		10,670		292,465
Hewlett-Packard Co.		10,160		328,777
Western Digital Corp.		3,155		289,692

				910,934


Electric (1.2%)
Pinnacle West Capital Corp.		5,335		291,611


Electrical Components & Equipment (2.6%)
Emerson Electric Co.		4,360		291,248
Energizer Holdings, Inc.		3,060		308,264

				599,512


Food (2.6%)
ConAgra Foods, Inc.		9,990		309,990
The Kroger Co.		6,990		305,113

				615,103


Healthcare Products (1.2%)
Medtronic, Inc.		4,550		280,007



Annual Report \| March 31, 2014		11


Schedule of Investments
CornerCap Balanced Fund		March 31, 2014


	Shares		Fair Value

Healthcare Services (2.6%)
Laboratory Corp. of America Holdings^(a)		2,955	$	290,211
UnitedHealth Group, Inc.		3,860		316,481

				606,692


Insurance (5.0%)
The Allstate Corp.		4,945		279,788
Everest Re Group Ltd.		1,870		286,203
Lincoln National Corp.		6,080		308,074
Reinsurance Group of America, Inc.		3,675		292,640

				1,166,705


Machinery-Diversified (1.2%)
Deere & Co.		3,220		292,376


Media (1.2%)
DIRECTV^(a)		3,645		278,551


Miscellaneous Manufacturing (1.2%)
Dover Corp.		3,565		291,439


Oil & Gas (5.0%)
ConocoPhillips		4,415		310,595
Devon Energy Corp.		4,405		294,827
Ensco PLC, Class A		5,405		285,276
Occidental Petroleum Corp.		3,055		291,111

				1,181,809


Oil & Gas Services (1.3%)
National Oilwell Varco, Inc.		3,915		304,861


Packaging & Containers (1.2%)
Rock-Tenn Co., Class A		2,750		290,318


Pharmaceuticals (1.3%)
Teva Pharmaceutical Industries Ltd., Sponsored ADR		5,905		312,020


Retail (5.0%)
Bed Bath & Beyond, Inc.^(a)		4,195		288,616
Coach, Inc.		5,995		297,712
Kohl’s Corp.		5,355		304,164
Nordstrom, Inc.		4,405		275,092

				1,165,584


Semiconductors (1.3%)
Intel Corp.		11,800		304,558


Software (2.7%)
Microsoft Corp.		7,445		305,171



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Schedule of Investments
CornerCap Balanced Fund		March 31, 2014


	Shares		Fair Value
Software (2.7%) (continued)
Oracle Corp.		8,220	$	336,280

				641,451


Telecommunications (2.7%)
AT&T, Inc.		9,010		315,981
CenturyLink, Inc.		9,450		310,338

				626,319


Transportation (1.4%)
Union Pacific Corp.		1,735		325,590


TOTAL COMMON STOCKS (COST $11,614,369)				14,474,108


EXCHANGE TRADED FUNDS (3.7%)
Guggenheim BulletShares^® 2014 High Yield Corporate Bond ETF		16,300		432,863
Guggenheim BulletShares^® 2015 High Yield Corporate Bond ETF		16,470		445,184


TOTAL EXCHANGE TRADED FUNDS (COST $879,509)				878,047


OPEN-END FUNDS (1.8%)
Performance Trust Strategic Bond Fund		18,485		416,651


TOTAL OPEN-END FUNDS (COST $412,855)				416,651


CLOSED-END FUNDS (3.0%)
Nuveen Mortgage Opportunity Term Fund		29,634		695,510


TOTAL CLOSED-END FUNDS (COST $767,495)				695,510


	Principal Amount		Fair Value
CORPORATE BONDS (23.8%)
Agriculture (1.0%)
Reynolds American, Inc., 6.750%, 06/15/2017	$	200,000		230,620


Auto Manufacturers (1.5%)
Ford Motor Co., 9.215%, 09/15/2021		275,000		359,499



Annual Report \| March 31, 2014		13


Schedule of Investments
CornerCap Balanced Fund		March 31, 2014


	Principal Amount		Fair Value
Banks (1.9%)
Citigroup, Inc., 5.000%, 09/15/2014	$	150,000	$	152,907
The Goldman Sachs Group, Inc., 4.000%, 03/18/2029^(b)		300,000		295,651

				448,558


Chemicals (1.9%)
CF Industries, Inc., 7.125%, 05/01/2020		250,000		297,338
The Dow Chemical Co., 2.500%, 02/15/2016		150,000		154,499

				451,837


Cosmetics & Personal Care (1.6%)
The Estee Lauder Co., Inc., 5.550%, 05/15/2017		150,000		168,070
The Procter & Gamble Co., 4.950%, 08/15/2014		200,000		203,385

				371,455


Diversified Financial Services (2.2%)
Credit Suisse USA, Inc., 5.375%, 03/02/2016		250,000		270,949
General Electric Capital Corp., 4.750%, 09/15/2014		240,000		244,789

				515,738


Food (0.9%)
Safeway, Inc., 3.950%, 08/15/2020		200,000		202,523


Healthcare Services (1.2%)
Humana, Inc., 6.300%, 08/01/2018		250,000		289,007


Home Furnishings (0.7%)
Whirlpool Corp., 6.500%, 06/15/2016		150,000		167,012


Insurance (3.1%)
Principal Life Income Funding Trusts,
5.100%, 04/15/2014		150,000		150,233
The Travelers Cos., Inc.,
5.900%, 06/02/2019		150,000		175,549



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Schedule of Investments
CornerCap Balanced Fund		March 31, 2014


	Principal Amount		Fair Value
Insurance (3.1%) (continued)
W.R. Berkley Corp.,
5.600%, 05/15/2015	$	150,000	$	157,166
5.375%, 09/15/2020		230,000		252,961

				735,909


Lodging (1.2%)
Starwood Hotels & Resorts Worldwide, Inc.,
7.375%, 11/15/2015		250,000		273,764


Media (1.2%)
DIRECTV Holdings LLC / DIRECTV Financing Co., Inc,
5.000%, 03/01/2021		255,000		274,199


Metal Fabricate & Hardware (1.1%)
The Timken Co.,
6.000%, 09/15/2014		250,000		255,544


Oil & Gas (0.7%)
Statoil ASA,
6.700%, 01/15/2018		150,000		176,952


Retail (3.6%)
AutoZone, Inc.,
5.500%, 11/15/2015		150,000		161,234
Best Buy Co., Inc.,
3.750%, 03/15/2016		200,000		206,000
Dillard’s, Inc.,
6.625%, 01/15/2018		275,000		309,375
Foot Locker, Inc.,
8.500%, 01/15/2022		135,000		160,650

				837,259


TOTAL CORPORATE BONDS (COST $5,449,365)				5,589,876


MUNICIPAL BONDS (2.0%)
Kansas (0.6%)
Johnson County KS, Build America General
Obligation Bonds, Unified School District No.
232, 4.950%, 09/01/2019		150,000		154,545


North Dakota (0.7%)
Grand Forks ND, Build America Revenue Bonds,
Series A, 4.500%, 09/01/2019		150,000		163,296



Annual Report \| March 31, 2014		15


Schedule of Investments
CornerCap Balanced Fund		March 31, 2014


	Principal Amount		Fair Value
Texas (0.7%)
County of Galveston TX, Build America General
Obligation Bonds, Series B, 4.200%,
02/01/2017	$	150,000	$	160,179


TOTAL MUNICIPAL BONDS (COST $453,451)				478,020


CERTIFICATES OF DEPOSIT (1.0%)
Goldman Sachs Bank USA, Medium-Term
Certificate of Deposit, 0.800%, 08/06/2015		250,000		250,266


TOTAL CERTIFICATES OF DEPOSIT (COST $250,000)				250,266


	Shares		Fair Value
SHORT TERM INVESTMENTS (2.9%)
Federated Treasury Obligation Money Market
Fund, 7 Day Yield 0.010%		674,259		674,259


TOTAL SHORT TERM INVESTMENTS (COST $674,259)				674,259


TOTAL INVESTMENTS (COST $20,501,303)		99.7%		23,456,737


TOTAL ASSETS IN EXCESS OF OTHER LIABILITIES		0.3%		63,765


NET ASSETS		100.0%	$	23,520,502

^(a)

Non-Income Producing Security.

^(b)

Represents a step bond. Rate disclosed is as of March 31, 2014.

Common Abbreviations:

ADR - American Depositary Receipt.

ASA - Allmennaksjeselskap is the Norwegian term for a public limited company.

ETF - Exchange Traded Fund.

LLC - Limited Liability Company.

Ltd. - Limited.

PLC - Public Limited Company.

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



16		www.cornercapfunds.com


Schedule of Investments
CornerCap Small-Cap Value Fund		March 31, 2014


	Shares		Fair Value

COMMON STOCKS (95.8%)
Aerospace & Defense (1.7%)
AAR Corp.		12,240	$	317,628
Kaman Corp.		9,035		367,544
National Presto Industries, Inc.		4,270		333,231

				1,018,403

Agriculture (0.6%)
The Andersons, Inc.		6,415		380,025


Apparel (0.6%)
Steven Madden Ltd.^(a)		10,060		361,959


Auto Parts & Equipment (2.2%)
Cooper Tire & Rubber Co.		14,270		346,761
Standard Motor Products, Inc.		10,750		384,528
Strattec Security Corp.		7,715		557,254

				1,288,543

Banks (17.6%)
Arrow Financial Corp.		13,805		365,004
Bank of Kentucky Financial Corp.		11,520		432,461
Community Trust Bancorp, Inc.		6,760		280,405
Enterprise Financial Services Corp.		17,685		354,938
Financial Institutions, Inc.		15,535		357,616
First Business Financial Services, Inc.		9,130		430,753
First Community Bancshares, Inc.		22,725		371,781
First Interstate Bancsystem, Inc.		11,520		325,094
First Merchants Corp.		19,010		411,376
FirstMerit Corp.		16,530		344,320
German American Bancorp, Inc.		13,350		385,681
Great Southern Bancorp, Inc.		12,220		366,967
Horizon Bancorp		14,725		328,073
Lakeland Bancorp, Inc.		30,935		348,019
Lakeland Financial Corp.		8,685		349,311
MainSource Financial Group, Inc.		23,020		393,642
Merchants Bancshares, Inc.		10,035		327,241
Monarch Financial Holdings, Inc.		23,195		284,371
NBT Bancorp, Inc.		11,820		289,117
Old National Bancorp		24,235		361,344
Peoples Bancorp, Inc.		15,185		375,525
PrivateBancorp, Inc.		15,095		460,548
S&T Bancorp, Inc.		14,120		334,644
S.Y. Bancorp, Inc.		10,325		326,683
Southside Bancshares, Inc.		11,760		369,029
Tompkins Financial Corp.		7,405		362,549
Trico Bancshares		15,360		398,285
Walker & Dunlop, Inc.^(a)		26,625		435,319



Annual Report \| March 31, 2014		17


Schedule of Investments
CornerCap Small-Cap Value Fund		March 31, 2014


	Shares		Fair Value

Banks (17.6%) (continued)
WesBanco, Inc.		10,540	$	335,488

				10,505,584

Building Materials (0.5%)
Universal Forest Products, Inc.		5,905		326,783


Chemicals (2.0%)
A. Schulman, Inc.		10,055		364,594
Aceto Corp.		21,575		433,442
OMNOVA Solutions, Inc.^(a)		37,035		384,423

				1,182,459

Commercial Services (8.3%)
ABM Industries, Inc.		12,085		347,323
American Public Education, Inc.^(a)		7,915		277,658
The Brink’s Co.		11,685		333,607
FTI Consulting, Inc.^(a)		11,740		391,412
Global Cash Access Holdings, Inc.^(a)		44,245		303,521
ICF International, Inc.^(a)		7,780		309,722
Korn/Ferry International^(a)		16,715		497,605
Matthews International Corp., Class A		8,910		363,617
Medifast, Inc.^(a)		9,850		286,536
Navigant Consulting, Inc.^(a)		21,545		402,030
The Providence Service Corp.^(a)		11,815		334,128
RPX Corp.^(a)		22,245		362,149
Steiner Leisure Ltd.^(a)		7,570		350,112
TrueBlue, Inc.^(a)		12,910		377,747

				4,937,167

Computers (2.4%)
Datalink Corp.^(a)		26,185		364,757
Insight Enterprises, Inc.^(a)		16,715		419,714
Mentor Graphics Corp.		15,990		352,100
Sykes Enterprises, Inc.^(a)		16,265		323,185

				1,459,756

Diversified Financial Services (2.8%)
Gain Capital Holdings, Inc.		26,825		289,978
Higher One Holdings, Inc.^(a)		42,420		306,697
Investment Technology Group, Inc.^(a)		20,290		409,858
Regional Management Corp.^(a)		14,490		357,323
Walter Investment Management Corp.^(a)		11,130		332,008

				1,695,864

Electric (2.4%)
Avista Corp.		13,090		401,208
El Paso Electric Co.		8,045		287,448
The Empire District Electric Co.		14,575		354,464
UIL Holdings Corp.		10,195		375,278

				1,418,398



18		www.cornercapfunds.com


Schedule of Investments
CornerCap Small-Cap Value Fund		March 31, 2014


	Shares		Fair Value

Electronics (1.6%)
Plexus Corp.^(a)		8,985	$	360,029
Sanmina Corp.^(a)		17,825		311,046
Stoneridge, Inc.^(a)		27,130		304,670

				975,745

Energy-Alternate Sources (0.7%)
FutureFuel Corp.		19,480		395,444


Engineering & Construction (1.1%)
AECOM Technology Corp.^(a)		11,415		367,220
MYR Group, Inc.^(a)		12,590		318,779

				685,999

Environmental Control (0.6%)
Darling International, Inc.^(a)		17,145		343,243


Food (1.9%)
Cal-Maine Foods, Inc.		6,490		407,442
Ingles Markets, Inc., Class A		14,755		351,464
Spartan Stores, Inc.		15,462		358,873

				1,117,779

Forest Products & Paper (1.9%)
Neenah Paper, Inc.		8,285		428,500
Orchids Paper Products Co.		12,780		391,068
Schweitzer-Mauduit International, Inc.		8,055		343,063

				1,162,631

Gas (0.6%)
Southwest Gas Corp.		6,650		355,443


Healthcare Products (0.6%)
Hanger, Inc.^(a)		10,395		350,104


Healthcare Services (3.1%)
Amsurg Corp.^(a)		7,970		375,228
The Ensign Group, Inc.		8,550		373,122
LHC Group, Inc.^(a)		14,140		311,928
Magellan Health Services, Inc.^(a)		5,650		335,327
Select Medical Holdings Corp.		36,790		458,036

				1,853,641

Home Builders (0.5%)
Meritage Homes Corp.^(a)		7,610		318,707


Home Furnishings (1.2%)
Daktronics, Inc.		25,265		363,563
VOXX International Corp.^(a)		25,300		346,104

				709,667



Annual Report \| March 31, 2014		19


Schedule of Investments
CornerCap Small-Cap Value Fund		March 31, 2014


	Shares		Fair Value

Household Products (0.6%)
Ennis, Inc.		21,450	$	355,426


Housewares (0.6%)
Lifetime Brands, Inc.		19,665		351,217


Insurance (7.4%)
AmTrust Financial Services, Inc.		9,640		362,560
Crawford & Co., Class B		42,055		458,820
EMC Insurance Group, Inc.		9,775		347,306
Greenlight Capital Re Ltd., Class A^(a)		10,295		337,676
Horace Mann Educators Corp.		10,540		305,660
Maiden Holdings Ltd.		30,475		380,328
Montpelier Re Holdings Ltd.		10,830		322,301
Primerica, Inc.		6,930		326,472
Protective Life Corp.		6,045		317,907
Selective Insurance Group, Inc.		15,585		363,442
Symetra Financial Corp.		16,960		336,147
United Insurance Holdings Corp.		37,065		541,520

				4,400,139

Internet (1.7%)
Conversant, Inc.^(a)		12,350		347,653
Dice Holdings, Inc.^(a)		39,705		296,199
ePlus, Inc.^(a)		6,270		349,615

				993,467

Iron & Steel (0.6%)
Shiloh Industries, Inc.^(a)		19,425		344,599


Lodging (1.2%)
The Marcus Corp.		22,775		380,343
Monarch Casino & Resort, Inc.^(a)		18,840		349,105

				729,448

Machinery-Diversified (0.6%)
Kadant, Inc.		9,340		340,630


Media (1.8%)
Courier Corp.		19,220		295,988
Journal Communications, Inc., Class A^(a)		40,355		357,545
Starz, Class A^(a)		13,125		423,675

				1,077,208

Metal Fabricate & Hardware (1.2%)
LB Foster Co., Class A		7,720		361,682
Worthington Industries, Inc.		8,935		341,764

				703,446

Miscellaneous Manufacturing (3.7%)
Chase Corp.		11,700		368,901



20		www.cornercapfunds.com


Schedule of Investments
CornerCap Small-Cap Value Fund		March 31, 2014


	Shares		Fair Value

Miscellaneous Manufacturing (3.7%) (continued)
Federal Signal Corp.		24,100	$	359,090
Koppers Holdings, Inc.		7,780		320,769
Myers Industries, Inc.		16,890		336,449
Park-Ohio Holdings Corp.^(a)		8,680		487,382
Standex International Corp.		5,905		316,390

				2,188,981

Office Furnishings (0.6%)
HNI Corp.		10,235		374,192


Oil & Gas (2.0%)
Panhandle Oil and Gas, Inc., Class A		8,875		387,039
Stone Energy Corp.^(a)		11,240		471,743
Unit Corp.^(a)		5,580		364,820

				1,223,602

Oil & Gas Services (1.2%)
Newpark Resources, Inc.^(a)		30,120		344,874
Tesco Corp.^(a)		20,570		380,545

				725,419

Packaging & Containers (1.1%)
Silgan Holdings, Inc.		7,115		352,335
UFP Technologies, Inc.^(a)		13,640		332,270

				684,605

Pharmaceuticals (2.4%)
Nature’s Sunshine Products, Inc.		19,805		272,913
Nutraceutical International Corp.^(a)		13,885		360,871
Omega Protein Corp.^(a)		33,855		408,630
PharMerica Corp.^(a)		13,490		377,450

				1,419,864

Retail (3.8%)
Big 5 Sporting Goods Corp.		20,755		333,118
The Cato Corp., Class A		11,085		299,738
Destination Maternity Corp.		11,100		304,140
Einstein Noah Restaurant Group, Inc.		22,645		372,737
Express, Inc.^(a)		19,385		307,834
The Finish Line, Inc., Class A		10,490		284,174
Genesco, Inc.^(a)		4,665		347,869

				2,249,610

Savings & Loans (2.1%)
Berkshire Hills Bancorp, Inc.		11,250		291,150
Dime Community Bancshares, Inc.		15,570		264,378
First Defiance Financial Corp.		12,015		325,847
WSFS Financial Corp.		5,165		368,936

				1,250,311



Annual Report \| March 31, 2014		21


Schedule of Investments
CornerCap Small-Cap Value Fund		March 31, 2014


	Shares		Fair Value

Semiconductors (0.6%)
Ultra Clean Holdings, Inc.^(a)		28,540	$	375,301


Software (1.1%)
CSG Systems International, Inc.		13,050		339,822
PDF Solutions, Inc.^(a)		18,635		338,598

				678,420

Telecommunications (2.4%)
Black Box Corp.		15,480		376,783
Comverse, Inc.^(a)		9,865		341,132
Ixia^(a)		27,875		348,437
NETGEAR, Inc.^(a)		10,870		366,645

				1,432,997

Textiles (1.1%)
Culp, Inc.		16,215		320,084
UniFirst Corp.		3,175		349,060

				669,144

Transportation (1.8%)
Arkansas Best Corp.		10,615		392,224
Matson, Inc.		11,925		294,428
Universal Truckload Services, Inc.		13,790		398,531

				1,085,183

Wholesale Distributors (1.3%)
ScanSource, Inc.^(a)		9,585		390,780
United Stationers, Inc.		8,885		364,907

				755,687

TOTAL COMMON STOCKS (COST $48,806,420)				57,252,240


SHORT TERM INVESTMENTS (4.1%)
Federated Treasury Obligation Money Market Fund, 7 Day Yield 0.010%		2,455,311		2,455,311


TOTAL SHORT TERM INVESTMENTS (COST $2,455,311)				2,455,311


TOTAL INVESTMENTS (COST $51,261,731)		99.9%		59,707,551


TOTAL ASSETS IN EXCESS OF OTHER LIABILITIES		0.1%		52,193


NET ASSETS		100.0%	$	59,759,744

^(a)

Non-Income Producing Security.

Common Abbreviations:

Ltd. - Limited.

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



22		www.cornercapfunds.com


Schedule of Investments
CornerCap Large/Mid-Cap Value Fund		March 31, 2014


	Shares		Fair Value

COMMON STOCKS (98.8%)
Aerospace & Defense (1.9%)
General Dynamics Corp.		1,875	$	204,225


Agriculture (2.0%)
Altria Group, Inc.		5,795		216,907


Auto Manufacturers (1.9%)
General Motors Co.		6,095		209,790


Banks (16.1%)
The Bank of New York Mellon Corp.		6,485		228,856
BB&T Corp.		5,815		233,588
Capital One Financial Corp.		2,760		212,962
Citigroup, Inc.		4,360		207,536
The Goldman Sachs Group, Inc.		1,210		198,258
JPMorgan Chase & Co.		3,660		222,199
The PNC Financial Services Group, Inc.		2,570		223,590
Wells Fargo & Co.		4,460		221,840

				1,748,829

Chemicals (2.3%)
Eastman Chemical Co.		2,890		249,147


Commercial Services (2.1%)
The Western Union Co.		14,020		229,367


Computers (6.4%)
EMC Corp.		8,465		232,026
Hewlett-Packard Co.		7,415		239,949
Western Digital Corp.		2,433		223,398

				695,373

Electric (2.2%)
Pinnacle West Capital Corp.		4,405		240,777


Electrical Components & Equipment (4.0%)
Emerson Electric Co.		3,200		213,760
Energizer Holdings, Inc.		2,240		225,658

				439,418

Food (4.0%)
ConAgra Foods, Inc.		7,180		222,796
The Kroger Co.		4,885		213,230

				436,026

Healthcare Products (2.2%)
Medtronic, Inc.		3,850		236,929



Annual Report \| March 31, 2014		23


Schedule of Investments
CornerCap Large/Mid-Cap Value Fund		March 31, 2014


	Shares		Fair Value

Healthcare Services (4.5%)
Laboratory Corp. of America Holdings^(a)		2,515	$	246,998
UnitedHealth Group, Inc.		2,880		236,131

				483,129

Insurance (8.3%)
The Allstate Corp.		4,220		238,768
Everest Re Group Ltd.		1,410		215,800
Lincoln National Corp.		4,440		224,975
Reinsurance Group of America, Inc.		2,810		223,760

				903,303

Machinery-Diversified (2.1%)
Deere & Co.		2,500		227,000


Media (1.9%)
DIRECTV^(a)		2,680		204,806


Miscellaneous Manufacturing (1.7%)
Dover Corp.		2,270		185,573


Oil & Gas (8.5%)
ConocoPhillips		3,455		243,059
Devon Energy Corp.		3,755		251,322
Ensco PLC, Class A		4,290		226,426
Occidental Petroleum Corp.		2,170		206,780

				927,587

Oil & Gas Services (2.1%)
National Oilwell Varco, Inc.		2,875		223,876


Packaging & Containers (2.1%)
Rock-Tenn Co., Class A		2,160		228,031


Pharmaceuticals (2.3%)
Teva Pharmaceutical Industries Ltd., Sponsored ADR		4,630		244,649


Retail (7.9%)
Bed Bath & Beyond, Inc.^(a)		3,075		211,560
Coach, Inc.		3,930		195,164
Kohl’s Corp.		4,250		241,400
Nordstrom, Inc.		3,405		212,642

				860,766

Semiconductors (1.9%)
Intel Corp.		8,065		208,158


Software (4.1%)
Microsoft Corp.		5,300		217,247



24		www.cornercapfunds.com


Schedule of Investments
CornerCap Large/Mid-Cap Value Fund		March 31, 2014


��	Shares		Fair Value
Software (4.1%) (continued)
Oracle Corp.		5,595	$	228,891

				446,138

Telecommunications (4.2%)
AT&T, Inc.		6,510		228,306
CenturyLink, Inc.		6,810		223,640

				451,946

Transportation (2.1%)
Union Pacific Corp.		1,195		224,254


TOTAL COMMON STOCKS (COST $8,754,101)				10,726,004


SHORT TERM INVESTMENTS (1.2%)
Federated Treasury Obligation Money Market Fund, 7 Day Yield 0.010%		125,984		125,984


TOTAL SHORT TERM INVESTMENTS (COST $125,984)				125,984


TOTAL INVESTMENTS (COST $8,880,085)		100.0%		10,851,988


TOTAL ASSETS IN EXCESS OF OTHER LIABILITIES		0.0%^(b)		68


NET ASSETS		100.0%	$	10,852,056

(a)	Non-Income Producing Security.

(b)

Less than 0.05%.

Common Abbreviations:

ADR - American Depositary Receipt.

Ltd. - Limited.

PLC - Public Limited Company.

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



Annual Report \| March 31, 2014		25


Statements of Assets and Liabilities


	CornerCap Balanced Fund
ASSETS:
Investments, at value (Cost - see below)	$	23,456,737
Receivable for investments sold		0
Receivable for fund shares subscribed		4,815
Dividends and interest receivable		80,396

Total assets		23,541,948


LIABILITIES:
Payable for investments purchased		0
Payable for fund shares redeemed		0
Advisory fee payable		15,597
Operating services fee payable		5,849

Total liabilities		21,446

Net assets	$	23,520,502


PRICING OF SHARES (NOTE 2):
Net Assets	$	23,520,502
Shares Outstanding		1,516,112

Net asset value, offering and redemption price per share	$	15.51


NET ASSETS CONSISTS OF:
Paid-in capital	$	19,177,460
Accumulated net investment income		100,016
Accumulated net realized gain on investments		1,287,592
Net unrealized appreciation in value of investments		2,955,434

Net assets	$	23,520,502


Cost of Investments	$	20,501,303

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



26		www.cornercapfunds.com



		March 31, 2014


CornerCap Small-Cap Value Fund		CornerCap Large/Mid-Cap Value Fund

$	59,707,551	$	10,851,988
	1,696,111		0
	45,289		0
	37,058		10,829
	61,486,009		10,862,817


	1,565,901		0
	95,660		0
	39,818		6,277
	24,886		4,484
	1,726,265		10,761
$	59,759,744	$	10,852,056



$	59,759,744	$	10,852,056
	3,676,526		782,620
$	16.25	$	13.87



$	46,460,887	$	8,772,726
	0		32,661
	4,853,037		74,766
	8,445,820		1,971,903
$	59,759,744	$	10,852,056


$	51,261,731	$	8,880,085



Annual Report \| March 31, 2014		27


Statements of Operations


	CornerCap Balanced Fund
INVESTMENT INCOME:
Dividends, (net of foreign withholding taxes of $731, $– and $522)	$	367,119
Interest		180,961
Total investment income		548,080

EXPENSES:
Advisory fees		207,389
Operating services fees		62,217
Total expenses		269,606
Less fees waived/reimbursed by investment advisor		(41,478)
Net expenses		228,128
Net investment income		319,952

REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments		1,938,644
Long-term capital gains distributions from other investment companies		39,075
Change in unrealized appreciation of investments		932,941
Net gain on investments		2,910,660
Net increase in net assets resulting from operations	$	3,230,612

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



28		www.cornercapfunds.com



		For the Year Ended March 31, 2014


Corner Cap Small-Cap Value Fund		CornerCap Large/Mid-Cap Value Fund

$	676,265	$	214,296
	0		0
	676,265		214,296


	512,056		98,111
	256,028		49,056
	768,084		147,167
	(102,411)		(29,433)
	665,673		117,734
	10,592		96,562


	8,729,108		1,229,947
	–		–
	5,903,304		1,129,991
	14,632,412		2,359,938
$	14,643,004	$	2,456,500



Annual Report \| March 31, 2014		29


Statements of Changes in Net Assets


	Corner Cap Balanced Fund
	Year Ended March 31, 2014			Year Ended March 31, 2013

OPERATIONS:
Net investment income	$	319,952		$	323,619
Net realized gain on investments		1,938,644			293,341
Long-term capital gains distributions from other investment companies		39,075			–
Change in unrealized appreciation of investments		932,941			737,346
Net increase in net assets resulting from operations		3,230,612			1,354,306

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(290,002	)		(318,111	)
From net realized gain on investments		(830,002	)		(339,062	)
Total distributions		(1,120,004	)		(657,173	)

CAPITAL SHARE TRANSACTIONS:
Increase in net assets resulting from capital share transactions (see Note 3)		2,117,524			55,176
Redemption fees		1,894			6
Net increase from capital shares transactions		2,119,418			55,182

Total increase in net assets		4,230,026			752,315

NET ASSETS:
Beginning of year		19,290,476			18,538,161
End of year*	$	23,520,502		$	19,290,476


*Including accumulated net investment income/(loss) of:	$	100,016		$	69,828

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



30		www.cornercapfunds.com


CornerCap Small-Cap Value Fund				CornerCap Large/Mid-Cap Value Fund
Year Ended March 31, 2014		Year Ended March 31, 2013		Year Ended March 31, 2014		Year Ended March 31, 2013


$	10,592	$	186,617	$	96,562	$	77,963
	8,729,108		3,287,284		1,229,947		124,696
	–		–		–		–
	5,903,304		110,675		1,129,991		590,686
	14,643,004		3,584,576		2,456,500		793,345


	–		(251,823)		(80,252)		(72,572)
	(6,390,497)		(1,311,701)		–		–
	(6,390,497)		(1,563,524)		(80,252)		(72,572)


	14,905,290		11,656,157		311,915		1,879,890
	1,568		708		1,001		2,447
	14,906,858		11,656,865		312,916		1,882,337

	23,159,365		13,677,917		2,689,164		2,603,110


	36,600,379		22,922,462		8,162,892		5,559,782
$	59,759,744	$	36,600,379	$	10,852,056	$	8,162,892


$	0	$	(7,836)	$	32,661	$	16,351



Annual Report \| March 31, 2014		31


Financial Highlights
CornerCap Balanced Fund


Selected data for each share of beneficial interest outstanding throughout the years indicated:		Year Ended March 31, 2014
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year		$14.03
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:
Net investment income		0.23^(a)
Net realized and unrealized gain/(loss) on investments		2.09

Total Income from Investment Operations		2.32

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income		(0.22)
Distributions from net realized gain on investments		(0.62)

Total Dividends and Distributions to Shareholders		(0.84)

Paid-in Capital from Redemption Fees		0.00^(b)

Net asset value, end of year		$15.51


Total return		16.76%

RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of year (in 000s)		$23,521

RATIOS TO AVERAGE NET ASSETS:
Expenses without fees waived/reimbursed		1.30%
Expenses		1.10%
Net investment income		1.54%

Portfolio turnover rate		43%

^(a)

Calculated using the average shares method.

^(b)

Less than $0.005 per share.

^(c)

Effective October 1, 2011, the Adviser agreed to limit expenses at 1.10%. Prior to October 1, 2011, no expense cap was in place.

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



32		www.cornercapfunds.com


Year Ended March 31, 2013	Year Ended March 31, 2012	Year Ended March 31, 2011	Year Ended March 31, 2010

$13.51	$13.65	$12.82	$9.26

0.24	0.24	0.26	0.28
0.78	(0.07)	0.97	3.57

1.02	0.17	1.23	3.85

(0.24)	(0.31)	(0.40)	(0.29)
(0.26)	–	–	–

(0.50)	(0.31)	(0.40)	(0.29)

0.00^(b)	0.00^(b)	0.00^(b)	0.00^(b)

$14.03	$13.51	$13.65	$12.82


7.85%	1.47%	9.78%	41.77%

$19,290	$18,538	$18,427	$15,635

1.30%	1.30%	N/A	N/A
1.10%	1.20%^(c)	1.30%	1.30%
1.82%	1.64%	2.13%	2.45%

40%	38%	31%	32%



Annual Report \| March 31, 2014		33


Financial Highlights
CornerCap Small-Cap Value Fund


Selected data for each share of beneficial interest outstanding throughout the years indicated:		Year Ended March 31, 2014
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year		$13.74
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:
Net investment income/(loss)		0.00^(a)(b)
Net realized and unrealized gain/(loss) on investments		4.51

Total Income/(Loss) from Investment Operations		4.51

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income		–
Distributions from net realized gain on investments		(2.00)

Total Dividends and Distributions to Shareholders		(2.00)

Paid-in Capital from Redemption Fees		0.00^(a)

Net asset value, end of year		$16.25


Total return		33.09%

RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of year (in 000s)		$59,760

RATIOS TO AVERAGE NET ASSETS:
Expenses without fees waived/reimbursed		1.50%
Expenses		1.30%
Net investment income/(loss)		0.02%

Portfolio turnover rate		109%

^(a)

Less than $0.005 per share.

^(b)

Calculated using the average shares method.

^(c)

Effective October 1, 2011, the Adviser agreed to limit expenses at 1.30%. Prior to October 1, 2011, no expense cap was in place.

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



34		www.cornercapfunds.com


Year Ended March 31, 2013	Year Ended March 31, 2012	Year Ended March 31, 2011	Year Ended March 31, 2010

$12.98	$13.51	$10.57	$5.83

0.10	0.03	(0.07)	(0.07)
1.46	(0.56)	3.01	4.81

1.56	(0.53)	2.94	4.74


(0.13)	–	–	–
(0.67)	–	–	–

(0.80)	–	–	–

0.00^(a)	0.00^(a)	0.00^(a)	0.00^(a)

$13.74	$12.98	$13.51	$10.57


12.70%	(3.92)%	27.81%	81.30%


$36,600	$22,922	$22,872	$16,448


1.50%	1.50%	N/A	N/A
1.30%	1.40%^(c)	1.50%	1.50%
0.74%	0.30%	(0.62)%	(0.75)%

131%	56%	61%	52%



Annual Report \| March 31, 2014		35


Financial Highlights
CornerCap Large/Mid-Cap Value Fund


Selected data for each share of beneficial interest outstanding throughout the years indicated:		Year Ended March 31, 2014
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year		$10.88
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:
Net investment income/(loss)		0.12^(b)
Net realized and unrealized gain/(loss) on investments		2.97

Total Income/(Loss) from Investment Operations		3.09

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income		(0.10)
Distributions from net realized gain on investments		–

Total Dividends and Distributions to Shareholders		(0.10)

Paid-in Capital from Redemption Fees		0.00^(d)

Net asset value, end of year		$13.87


Total return		28.42%

RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of year (in 000s)		$10,852

RATIOS TO AVERAGE NET ASSETS:
Expenses without fees waived/reimbursed		1.50%
Expenses		1.20%
Net investment income/(loss)		0.98%

Portfolio turnover rate		60%

^(a)

Prior to July 29, 2010, the CornerCap Large/Mid-Cap Value Fund was known as the CornerCap Contrarian Fund.

^(b)

Calculated using the average shares method.

^(c)

Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value for the year, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the year.

^(d)

Less than $0.005 per share.

^(e)

Effective October 1, 2011, the Adviser agreed to limit expenses at 1.20%. Prior to October 1, 2011, the expense cap in place was 1.30 %.

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



36		www.cornercapfunds.com


Year Ended March 31, 2013	Year Ended March 31, 2012	Year Ended March 31, 2011^(a)	Year Ended March 31, 2010

$10.07	$10.41	$9.16	$5.28

0.10	0.08	0.02	(0.02)
0.81	(0.34)^(c)	1.23	3.91

0.91	(0.26)	1.25	3.89


(0.10)	(0.08)	–	(0.01)
–	–	–	–

(0.10)	(0.08)	–	(0.01)

0.00^(d)	0.00^(d)	0.00^(d)	0.00^(d)

$10.88	$10.07	$10.41	$9.16


9.16%	(2.42)%	13.65%	73.72%


$8,163	$5,560	$3,955	$4,003


1.50%	1.50%	1.50%	N/A
1.20%	1.25%^(e)	1.38%	1.50%
1.20%	0.98%	0.24%	(0.25)%

43%	35%	136%	69%



Annual Report \| March 31, 2014		37


Notes to Financial Statements
		March 31, 2014

1. ORGANIZATION

The CornerCap Group of Funds (the “Funds”) was organized on January 6, 1986 as a Massachusetts Business Trust and is registered under the Investment Company Act of 1940 as a diversified open-end management investment company.

The investment objective of the CornerCap Balanced Fund and CornerCap Small-Cap Value Fund is to obtain capital appreciation and current income, whereas the CornerCap Large/Mid-Cap Value Fund’s investment objective is to obtain capital appreciation.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Funds. These policies are in conformity with U.S. generally accepted accounting principles (“GAAP”).

Accounting Estimates – In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure for contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Security Valuation – Portfolio securities including common stocks, corporate bonds, municipal bonds, exchange traded funds (ETFs), open-end funds, closed-end funds, and U.S. Government and Agency obligations that are listed on national securities exchanges or the NASDAQ National Market System are valued at the last sale price as of 4:15 p.m. Eastern time or, in the absence of recorded sales, at the average of readily available closing bid and asked prices on such exchanges or such System. Based on obtaining active market quotes, common stocks and exchange traded funds are classified as Level 1 of the fair value hierarchy. Corporate bonds, municipal bonds, certificates of deposit and U.S. Government and Agency obligations are classified as Level 2 of the hierarchy, and are priced based upon valuations provided by a recognized independent, third-party pricing agent. Third-party pricing agents value these securities by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the market value for such securities. Such methodologies generally consider such factors as security prices, yields, maturities, call features, ratings, and developments relating to specific securities in arriving at valuations. Unlisted securities that are not included on such exchanges or systems are valued at the mean of the quoted bid and asked prices on the over-the-counter market. Shares of a registered investment company, including money market funds, that are not traded on an exchange are valued at that investment company’s net asset value per share and are classified as Level 1 within the hierarchy. Securities and other assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Adviser under procedures established by and under the general supervision and responsibility of the Funds’ Board of Trustees and will be classified as Level 2 or 3 within the hierarchy, depending on the inputs used. The ability of issuers of debt securities held by the Funds to meet their obligations may be affected by economic and political developments.

Security Transactions Investment Income and Other – Security transactions are recorded on the trade date. Realized gains and losses on sales of investments are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Withholding taxes on foreign dividends have been provided in accordance with the



38		www.cornercapfunds.com


Notes to Financial Statements
		March 31, 2014

Funds’ understanding of the applicable country’s tax rules and rates. Discounts and premiums on securities purchased are amortized over the lives of the respective securities, using the effective interest method. In the event of a security in default, a portion of interest receivable that was once recognized as interest income is written off and treated as a reduction of interest income.

Federal Income Taxes – For Federal income tax purposes, the Funds currently qualify, and intend to remain qualified, as regulated investment companies (“RICs”) under the provisions of Subchapter M of the Internal Revenue Code of 1986 (“Code”), as amended, by complying with the requirements applicable to RICs and by distributing their investment company taxable net income including any excess realized gain which has not been offset by capital loss carryforwards, if any, to their shareholders. Accordingly, no provision for federal income or excise taxes has been made.

As of and during the year ended March 31, 2014, the Funds did not have a liability for any unrecognized tax benefits. The Funds file U.S. federal, state, and local tax returns as required. The Funds’ tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return but which can be extended to six years in certain circumstances. Tax returns for open years of 2010-2013 and as of and during the year ended March 31, 2014, have incorporated no uncertain tax positions that require a provision for income taxes. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period, the Funds did not incur any interest or penalties.

Distributions to Shareholders – Distributions from net investment income and distributions of net realized capital gains, if any, will be declared and paid at least annually. Income and capital gains distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Distributions to shareholders are recorded on the ex-dividend date.

Fair Value Measurements – A three-tier hierarchy has been established to classify fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.

Various inputs are used in determining the value of each Fund’s investments as of the reporting period end. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments. These inputs are categorized in the following hierarchy under applicable financial accounting standards:


Level 1 –		Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that a Fund has the ability to access at the measurement date;



Annual Report \| March 31, 2014		39


Notes to Financial Statements
		March 31, 2014


Level 2 –		Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and

Level 3 –		Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.

The following is a summary of the inputs used to value the Funds’ investments as of March 31, 2014:

CornerCap Balanced Fund:


	Valuation Inputs
Investments in Securities at Value^*	Level 1		Level 2		Level 3		Total
Common Stocks	$	14,474,108	$	–	$	–	$	14,474,108
Exchange Traded Funds		878,047		–		–		878,047
Open-End Funds		416,651		–		–		416,651
Closed-End Funds		695,510		–		–		695,510
Corporate Bonds		–		5,589,876		–		5,589,876
Municipal Bonds		–		478,020		–		478,020
Certificates of Deposit		–		250,266		–		250,266
Short Term Investments		674,259		–		–		674,259
Total	$	17,138,575	$	6,318,162	$	–	$	23,456,737

CornerCap Small-Cap Value Fund:


	Valuation Inputs
Investments in Securities at Value^*	Level 1		Level 2		Level 3		Total
Common Stocks	$	57,252,240	$	–	$	–	$	57,252,240
Short Term Investments		2,455,311		–		–		2,455,311
Total	$	59,707,551	$	–	$	–	$	59,707,551

CornerCap Large/Mid-Cap Value Fund:


	Valuation Inputs
Investments in Securities at Value*	Level 1		Level 2		Level 3		Total
Common Stocks	$	10,726,004	$	–	$	–	$	10,726,004
Short Term Investments		125,984		–		–		125,984
Total	$	10,851,988	$	–	$	–	$	10,851,988

* See Schedule of Investments for industry classification.

The Funds recognize transfers between levels as of the beginning of the annual period in which the transfer occurred. There were no transfers into or out of Levels 1 and 2 during the year ended March 31, 2014.

For the year ended March 31, 2014, the Funds did not have significant unobservable inputs (Level 3) used in determining fair value of any investments. Therefore, a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value is not applicable. The Funds did not hold any derivative instruments at any time during the year.



40		www.cornercapfunds.com


Notes to Financial Statements
		March 31, 2014

3. SHARES OF BENEFICIAL INTEREST

On March 31, 2014, there was an unlimited number of no par-value shares of beneficial interest authorized for each Fund. Subject to certain exceptions, each Fund charges a 1% redemption fee calculated as a percentage of the amount redeemed. This is applicable to all redemptions (sales or exchanges) made within sixty days of initial purchase of shares of the applicable Fund. The redemption fees charged during the year are disclosed on the Statements of Changes in Net Assets.

Transactions in shares of beneficial interest were as follows:

CornerCap Balanced Fund:


	Year Ended		Year Ended		Year Ended		Year Ended
	March 31, 2014		March 31, 2014		March 31, 2013		March 31, 2013
	Shares		Value		Shares		Value
Shares Sold		202,958	$	3,043,461		161,004	$	2,118,064
Shares Issued in Reinvestment of Dividends		75,175		1,118,606		50,608		656,388
Total		278,133		4,162,067		211,612		2,774,452
Less Shares Redeemed		(137,286)		(2,044,543)		(208,194)		(2,719,276)
Net Increase		140,847	$	2,117,524		3,418	$	55,176

CornerCap Small-Cap Value Fund:

	Year Ended		Year Ended		Year Ended		Year Ended
	March 31, 2014		March 31, 2014		March 31, 2013		March 31, 2013
	Shares		Value		Shares		Value
Shares Sold		1,292,968	$	19,084,847		973,662	$	12,681,909
Shares Issued in Reinvestment of Dividends		399,869		6,369,919		125,800		1,562,441
Total		1,692,837		25,454,766		1,099,462		14,244,350
Less Shares Redeemed		(680,126)		(10,549,476)		(201,842)		(2,588,193)
Net Increase		1,012,711	$	14,905,290		897,620	$	11,656,157



Annual Report \| March 31, 2014		41


Notes to Financial Statements
		March 31, 2014

CornerCap Large/Mid-Cap Value Fund:


	Year Ended March 31, 2014		Year Ended March 31, 2014		Year Ended March 31, 2013		Year Ended March 31, 2013
	Shares		Value		Shares		Value
Shares Sold		270,147	$	3,304,555		220,410	$	2,107,876
Shares Issued in Reinvestment of Dividends		6,038		79,037		7,466		72,572
Total		276,185		3,383,592		227,876		2,180,448
Less Shares Redeemed		(243,894)		(3,071,677)		(29,408)		(300,558)
Net Increase		32,291	$	311,915		198,468	$	1,879,890

4. FEDERAL TAX INFORMATION

The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Fund. Distributions from net investment income and distributions of net realized capital gains, if any, will be declared and paid at least annually.

The tax character of distributions paid for the years ended March 31, 2014 and March 31, 2013 were as follows:


	CornerCap Balanced Fund
Distributions Paid From:	2014		2013
Ordinary Income	$	420,002	$	386,549
Long-term capital gains		700,002		270,624
Total	$	1,120,004	$	657,173

	CornerCap Small-Cap Value Fund
Distributions Paid From:	2014		2013
Ordinary Income	$	4,603,756	$	498,868
Long-term capital gains		1,786,741		1,064,656
Total	$	6,390,497	$	1,563,524

	CornerCap Large/Mid-Cap Value Fund
Distributions Paid From:	2014		2013
Ordinary Income	$	80,252	$	72,572
Total	$	80,252	$	72,572



42		www.cornercapfunds.com


Notes to Financial Statements
		March 31, 2014

For the year ended March 31, 2014, each Fund recorded the following reclassifications to the accounts listed below. The reclassifications were primarily as a result of the differing book/tax treatment of investments in partnerships and net operating losses.


	Paid-in Capital		Increase/(Decrease) Net Investment Income		Increase/(Decrease) Accumulated Net Realized Gain
CornerCap Balanced Fund	$	0	$	238	$	(238)
CornerCap Small-Cap Value Fund		49		(2,756)		2,707
CornerCap Large/Mid-Cap Value Fund		0		0		0

As of March 31, 2014, the components of distributable earnings on a tax basis were as follows:


	CornerCap Balanced Fund		CornerCap Small-Cap Value Fund		CornerCap Large/Mid-Cap Value Fund
Undistributed ordinary income	$	548,503	$	2,910,874	$	32,661
Accumulated net realized gain on investments		839,105		1,942,163		74,766
Net unrealized appreciation on investments		2,955,434		8,445,820		1,971,903
Total	$	4,343,042	$	13,298,857	$	2,079,330

As of March 31, 2014, the Funds had no capital loss carryforwards to reduce the Funds’ taxable income arising from future net realized gains on investments.

During the year ended March 31, 2014, the following Fund utilized capital loss carryovers of:


CornerCap Large/Mid-Cap Value Fund		$	1,155,181

The amount of net unrealized appreciation/(depreciation) and the cost of investment securities for tax purposes, including short-term securities at March 31, 2014, were as follows:


	CornerCap Balanced Fund		CornerCap Small- Cap Value Fund		CornerCap Large/Mid-Cap Value Fund
Gross unrealized appreciation (excess of value over tax cost)	$	3,118,491	$	9,079,524	$	2,070,763
Gross unrealized depreciation (excess of tax cost over value)		(163,057)		(633,704)		(98,860)
Net unrealized appreciation	$	2,955,434	$	8,445,820	$	1,971,903��
Cost of investments for income tax purposes	$	20,501,303	$	51,261,731	$	8,880,085



Annual Report \| March 31, 2014		43


Notes to Financial Statements
		March 31, 2014

5. INVESTMENT ADVISORY AND OTHER RELATED PARTY TRANSACTIONS

A. Each of the Funds has an Investment Advisory Agreement with CornerCap Investment Counsel (the “Adviser”), pursuant to which the Adviser receives an Advisory Fee from each Fund, computed daily and payable monthly, at an annual rate of 1.00% of the average daily net assets. Under the terms of each Advisory Agreement, the Adviser manages the Funds’ investments subject to the approval of the Board of Trustees. The amount of expenses paid to the Adviser are reflected in the Statement of Operations and the amount of current liability is reflected in the Statement of Assets and Liabilities.

In addition, each Fund and the Adviser have an Operating Services Agreement whereby the Adviser receives an Operating Services Fee, computed daily and payable monthly, at an annual rate of 0.30%, 0.50% and 0.50% of the average daily net assets of the CornerCap Balanced Fund, CornerCap Small-Cap Value Fund, and CornerCap Large/Mid-Cap Value Fund, respectively. The amounts of expenses paid to the Adviser as Operating Services Fees are reflected in the Statement of Operations and the amount of current liability is reflected in the Statement of Assets and Liabilities.

The Adviser has contractually agreed to waive fees and reimburse each of the Funds so as to limit each Fund’s “Total Annual Fund Operating Expenses” (exclusive of interest, taxes, brokerage fees and commissions, acquired fund fees and expenses, and extraordinary expenses) as reflected in the following table:


Fund		Total Annual Fund Operating Expense Limitation

CornerCap Balanced Fund		1.10%
CornerCap Small-Cap Value Fund		1.30%
CornerCap Large/Mid-Cap Value Fund		1.20%

The contractual agreements cannot be terminated prior to August 1, 2014 without the Board of Trustees’ approval.

B. The Funds and the Adviser have entered into the following agreements whereby the Adviser pays any associated fees from the Operating Services Fees it receives from the Funds to Fund operational service providers pursuant to the following agreements: 1) Fund Accounting and Administration Agreement with ALPS Fund Services, Inc. to provide day-to-day operational services to the Funds including, but not limited to, accounting, administrative, bookkeeping and pricing services; 2) Transfer Agency and Service Agreement with ALPS Fund Services, Inc. to provide day-to-day operational services to the Funds including, but not limited to, transfer agent, dividend distributing and bookkeeping services; and 3) Distribution Agreement with ALPS Distributors, Inc. to provide distribution services to the Funds. ALPS Distributors, Inc. serves as underwriter/distributor of the Funds.

Certain officers and directors of the Funds are also officers and directors of the Adviser.



44		www.cornercapfunds.com


Notes to Financial Statements
		March 31, 2014

6. PURCHASES AND SALES OF SECURITIES

Investment transactions for the year ended March 31, 2014, excluding U.S. government and agency securities and short-term investments, were as follows:


Fund	Cost of Investments Purchased	Proceeds From Investments Sold

CornerCap Balanced Fund	$ 10,205,905	$ 8,313,591
CornerCap Small-Cap Value Fund	61,605,052	53,563,399
CornerCap Large/Mid-Cap Value Fund	6,297,957	5,732,740
Investment Transactions in U.S. Government Obligations for the year ended March 31, 2014 were as follows:
Fund	Purchases of Securities	Proceeds from Sales of Securities

CornerCap Balanced Fund	$ 0	$ 250,000

7. BENEFICIAL OWNERSHIP

The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the fund, under section 2(a)(9) of the Investment Company Act of 1940. As of March 31, 2014, Charles Schwab & Co. held approximately 53.41%, 70.61% and 68.04% of the CornerCap Balanced Fund, CornerCap Small-Cap Value Fund, and CornerCap Large/Mid-Cap Value Fund, respectively. The shares are held under omnibus accounts (whereby the transactions of two or more shareholders are combined and carried in the name of the originating broker rather than designated separately).

8. INDEMNIFICATIONS

Under the Trust’s organizational documents, its officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that may contain general indemnification clauses which may permit indemnification to the extent permissible under applicable law. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

9. RECENT ACCOUNTING PRONOUNCEMENTS

In June 2013, the FASB issued ASU 2013-08, Amendments to the Scope, Measurement and Disclosure Requirements (“ASU 2013-08”), modifying Accounting Standards Codification (“ASC”) 946. The modifications were a result of a joint effort by the FASB and the International Accounting Standards Board to develop a consistent approach for determining whether an entity is an investment company for which fair value of investments is the most relevant measurement. ASU 2013-08 requires reporting entities to disclose that it is an investment company and is applying the guidance as set forth in ASC 946, to disclose any changes in, and the reasons for, its status as an investment company and to disclose information related to whether it has provided or is



Annual Report \| March 31, 2014		45


Notes to Financial Statements
		March 31, 2014

contractually required to provide financial support to any of its investees. The effective date of ASU 2013-08 is for interim and annual periods beginning after December 15, 2013. At this time, management is evaluating the implications of this requirement and the impact it will have to the financial statement amounts and footnote disclosures, if any.



46		www.cornercapfunds.com

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees

CornerCap Group of Funds

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of CornerCap Group of Funds, comprising CornerCap Balanced Fund, CornerCap Small-Cap Value Fund, and CornerCap Large/Mid-Cap Value Fund (the “Funds”), as of March 31, 2014, and the related statements 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 Funds’ 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 the standards of the Public Company Accounting Oversight Board (United States). 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 March 31, 2014, by correspondence with the Funds’ custodian and broker. 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 each of the Funds constituting CornerCap Group of Funds as of March 31, 2014, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their 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.

LOGO

Cohen Fund Audit Services, LTD.

Cleveland, Ohio

May 27, 2014



Annual Report \| March 31, 2014		47


Additional Information (Unaudited)
		March 31, 2014

1. PROXY VOTING POLICY

A copy of the policies and procedures the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling the Funds toll-free at (888) 813-8637 or on the Securities and Exchange Commission’s (SEC) website at http://www.sec.gov. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is also available without charge, upon request, by calling the Funds toll-free at (888) 813-8637 and on the SEC’s website at http://www.sec.gov.

2. AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULE

Each of the Funds files its complete schedule of positions with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available on the SEC website at http://www.sec.gov. The Funds’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C., and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. If any of the Funds make the information on Form N-Q available to shareholders on its website or upon request, the information may be obtained by calling the Funds toll-free at (888) 813-8637.

3. COMPENSATION OF TRUSTEES

No interested Trustee, officer, or employee of the Funds receives any compensation from the Funds for serving as an officer or Trustee of the Funds. Effective November 14, 2013, each Independent Trustee receives $3,000 for each Trustees meeting attended in-person and $2,000 for each Trustees meeting attended by telephone. Members of the Audit Committee are paid $1,000 per Audit Committee meeting, and the Audit Committee Chairman is paid $2,000 per Audit Committee meeting. The Audit Committee will normally meet twice a year.

4. TAX DESIGNATIONS

Of the ordinary income (including short-term capital gain) distributions made by the Funds during the year ended December 31, 2013, the percentages qualifying for the dividend received deduction available to corporate shareholders are as follows:



48		www.cornercapfunds.com


Additional Information (Unaudited)
		March 31, 2014

For the year ended December 31, 2013, the following percentages of total ordinary dividends paid by the Funds are qualifying dividends which may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Act of 2003. Complete information should have already been reported in conjunction with the reporting of your distributions on Form 1099-DIV. The percentages were as follows:

Pursuant to Section 852(b)(3) of the Internal Revenue Code, CornerCap Balanced Fund and CornerCap Small-Cap Value Fund designated $700,002 and $1,786,741 respectively, as long-term capital gain dividends.

5. TRUSTEES AND OFFICERS

The business affairs of the Funds are managed under the direction of the Funds’ Board of Trustees in accordance with the laws of the State of Massachusetts. Information pertaining to the Trustees and Officers of the Funds are set forth below. Trustees who are not deemed to be “interested persons” of the trust as defined in the Investment Company Act of 1940, as amended (the “1940 Act”), are referred to as “Independent Trustees.” Trustees who are deemed to be interested persons of Funds as defined in the 1940 Act are referred to as “Interested Trustees”. The Funds’ Statement of Additional Information includes additional information about the trustees and is available upon request by calling toll-free 1-888-813-8637.

INTERESTED TRUSTEES


Name, Age and Address	Position with Trust, Term of Office and Tenure	Number of Funds in Complex Overseen by Trustee	Principal Occupation(s) during past 5 years	Other Trusteeships/ Directorships by Trustee

Thomas E. Quinn Age: 68 The Peachtree, Suite 1700 1355 Peachtree St. NE Atlanta, GA 30309	Trustee, President, Chief Financial Officer, and Treasurer since 1992	3	Chief Executive Officer, CornerCap Investment Counsel.	None



Annual Report \| March 31, 2014		49


Additional Information (Unaudited)
		March 31, 2014

INDEPENDENT TRUSTEES


Name, Age and Address*	Position with Trust, Term of Office and Tenure	Number of Funds in Complex Overseen by Trustee	Principal Occupation(s) during past 5 years	Other Trusteeships/ Directorships by Trustee

Richard L. Boger Age: 67	Trustee since 1992	3	President & CEO, Lex-Tek International, Inc. (a financial services and software consulting company), (1991- present); Managing Trustee, Boger-Owen FNON (2012-present); Business Manager, Owen Holdings, LLLP (2003-2013), Heathland Holdings, LLLP (2004-Present), and General Partner, Shawnee Meadow Holdings, LLLP (2004-Present) (real estate and related companies).	Director, Gray Television, Inc., since 1991

Laurin M. McSwain Age: 63	Trustee since 1994	3	Attorney, Letkoff, Duncan, Grimes, McSwain & Hass, (2003- present).	None

Leslie W. Gates Age: 58	Trustee since 2006	3	Retired, 2005.	None

G. Harry Durity Age: 66	Trustee (1992- 2004, since 2010)	3	Director, Overland Solutions, Inc. (Private Company) since January 2009; Senior Advisor, Consultant, New Mountain Capital, LLC since May 2005; Director, Alexander Mann Solutions (Private Company).	Director, WebSite Pros, Inc.

*	All Independent Trustees can be contacted via the Funds at:

1290 Broadway, Suite 1100, Denver, CO 80203.



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Additional Information (Unaudited)
		March 31, 2014

OFFICERS


Name, Age and Address	Position with Trust, Term of Office and Tenure	Number of Funds in Complex Overseen by Trustee	Principal Occupation(s) during past 5 years	Other Trusteeships/ Directorships by Trustee

Richard T. Bean Age: 51 The Peachtree, Suite 1700 1355 Peachtree St. NE Atlanta, GA 30309	Vice President of the Funds since 1996	N/A	Vice President of the Funds, Portfolio Manager, CornerCap Investment Counsel.	N/A

John A. Hackney Age: 47 The Peachtree, Suite 1700 1355 Peachtree St. NE Atlanta, GA 30309	Chief Compliance Officer since 2004 and Secretary of the Funds since 1999	N/A	Chief Compliance Officer, CornerCap Investment Counsel.	N/A

Gene A. Hoots Age: 74 The Peachtree, Suite 1700 1355 Peachtree St. NE Atlanta, GA 30309	Vice President of the Funds since 1992	N/A	Vice President of the Funds and Chairman Emeritus of CornerCap Investment Counsel.	N/A



Annual Report \| March 31, 2014		51

Notes



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Notes



Annual Report \| March 31, 2014		53

LOGO

Item 2. Code of Ethics.

The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or any persons performing similar functions on behalf of the registrant. The registrant’s Code of Ethics was filed as an Exhibit hereto under Item 12(a)(1) of this Form N-CSR on June 6, 2008. There have been no amendments to the Code of Ethics since it was last filed.

Item 3. Audit Committee Financial Expert.

The Board of Trustees of the registrant has determined that there is no “audit committee financial expert” serving on its audit committee. In this regard, the Board also determined that having such a person serve on its audit committee was unnecessary in light of the structure of the registrant’s operations and the broad range of experience and expertise in financial matters possessed by the members of the audit committee, even though no such member was considered to have been an audit committee financial expert under the relatively narrow definition of such term.

Item 4. Principal Accountant Fees and Services.

(a)

Audit Fees: For the registrant’s fiscal years ended March 31, 2013 and March 31, 2014, the aggregate fees billed to the registrant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements were $24,500 and $25,600, respectively.

(b)

Audit-Related Fees: In registrant’s fiscal years ended March 31, 2013 and March 31, 2014, the aggregate fees billed to the registrant for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were $0 and $0, respectively. For the registrant’s fiscal years ended March 31, 2013 and March 31, 2014, the aggregate fees billed to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services for the registrant for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were $0 and $0, respectively.

(c)

Tax Fees: For the registrant’s fiscal years ended March 31, 2013 and March 31, 2014, the aggregate fees billed to the registrant for professional services rendered by the principal accountant for tax services were $5,250 and $5,250, respectively. For the registrant’s fiscal years ended March 31, 2013 and March 31, 2014, the aggregate fees billed to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $0 and $0, respectively.

(d)

All Other Fees: For the registrant’s fiscal years ended March 31, 2013 and March 31, 2014, the aggregate fees billed to the registrant by the principal accountant for services other than the services reported in paragraphs (a) through (c) of this Item were $0 and $0, respectively. For the registrant’s fiscal years ended March 31, 2013 and March 31, 2014, the aggregate fees billed to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant for services other than the services reported in paragraphs (a) through (c) of this Item were $0 and $0 respectively.

(e)(1) Audit Committee Pre-Approval Policies and Procedures: The registrant’s Audit Committee has not adopted pre-approval policies and procedures. Instead, the Audit Committee approves each audit and non-audit service before the accountant is engaged to provide such service.

(e)(2) No services described in paragraphs (b) through (d) of this Item were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g) Aggregate Non-Audit Fees: For the registrant’s fiscal years ended March 31, 2013 and March 31, 2014, the aggregate non-audit fees billed to the registrant by the registrant’s accountant for services rendered to the registrant were $0 and $0, respectively. For the registrant’s fiscal years ended March 31, 2013 and March 31, 2014, the aggregate non-audit fees billed to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $0 and $0, respectively.

(h) Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable to registrant.

Item 6. Investments.

(a)

The Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form N-CSR.

(b)

Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to registrant.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to registrant.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to registrant.

Item 10. Submission of Matters to Vote of Security Holders.

Not applicable.

Item 11. Controls and Procedures.

(a)

The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.

(b)

There was no change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1)

The registrant’s Code of Ethics for Principal Executive and Senior Financial Officers that applies to the registrant’s principal executive officer and principal financial officer and as described in Item 2 hereof is incorporated by reference to Exhibit 99.12(a)(1) to the registrant’s Form N-CSR for its fiscal year ended March 31, 2011, filed electronically with the Securities and Exchange Commission on June 6, 2008.

(a)(2)

The certifications required by Rule 30a-2(a) of the Investment Company Act of 1940, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto as Ex.99.Cert.

(a)(3)

Not applicable.

(b)

A certification of the registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, is attached as Ex.99.906.Cert.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


CornerCap Group of Funds

By:		/s/ Thomas E. Quinn
		Thomas E. Quinn
		President

Date:		May 30, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By:		/s/ Thomas E. Quinn
		Thomas E. Quinn
		President (Principal Executive Officer) and Treasurer (Principal Financial Officer)

Date:		May 30, 2014

Fund Name

Percentage

CornerCap Balanced Fund

CornerCap Small-Cap Value Fund

CornerCap Large/Mid Cap Fund