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: 811-21782 Small Cap Value Fund, Inc. (Exact name of registrant as specified in charter) 8150 N. Central Expressway #M1120 Dallas, Texas 75206 (Address of principal executive offices) Laura S. Adams 8150 N. Central Expressway #M1120 Dallas, Texas 75206 (Name and address of agent for service) Registrants telephone number, including area code: 800-704-6072 Date of fiscal year end: December 31 Date of Reporting Period: December 31, 2014 Item 1. Report to Shareholders. SMALL CAP VALUE FUND, INC. ANNUAL REPORT DECEMBER 31, 2014 Small Cap Value Fund, Inc. 8150 N. Central Expressway #M1120 Dallas, Texas 75206 1-800-704-6072 Fund Symbol: SCAPX Dear shareholders of Small Cap Value Fund, Inc., The Fund began 2014 with a Net Asset Value per share of $38.03 and ended with a Net Asset Value per share of $35.99. There were no dividends paid in 2014. The total return of the Fund for 2014 was down 5.36% versus up 5.73% for the S&P 600 Index and up 4.89% for the Russell 2000 Small Cap Index. The Fund lagged the general Small Cap market indices in 2014 due to weighted exposure to the energy and materials sectors which were down significantly. We maintain the weighting to these sectors and feel that they will outperform in the future. The Fund continues to hold what we feel are very high quality companies with stable cash flows and relatively transparent balance sheets. The top holdings and industry group exposures of the Fund as of December 31, 2014 are listed on the following page. We look forward to a prosperous year in 2015. Sincerely, Steven Adams Portfolio Manager SMALL CAP VALUE FUND, INC. Top Ten Holdings and Asset Allocation December 31, 2014 Top Ten Holdings* (% of Net Assets) Express Inc. 9.04% Cooper Tire & Rubber 8.51% Hawaiian Holdings Inc. 8.09% IAMGOLD Corp. 7.78% EZ Corp Inc. 7.69% ITT Educational Services 5.16% Tilly?s Inc. 5.01% Marlin Business Services 4.84% Skywest Inc. 4.74% Big 5 Sporting Goods 4.68% ------ 65.54% Asset Allocation (% of Net Assets) Crude Oil Petroleum and Natural Gas 14.15% Apparel and Accessory Stores 14.05% Air Transportation, Scheduled 12.83% Fabricated Rubber Products 8.51% Gold Ore Mining 7.78% Retail 7.69% Educational Services 5.16% State Commercial Banks 4.84% Misc. Shopping Goods Stores 4.68% Freight Transportation Arrangement 4.57% Petroleum Refining 3.91% Business Services 3.17% Oil Drilling and Gas Wells 2.61% Oil and Gas Field Exploration Services 2.52% Other Assets, Less Liabilities, Net 3.53% ------- 						 100.00% *Portfolio holdings are subject to change and are not recommendations of individual stocks SMALL CAP VALUE FUND, INC. PERFORMANCE SUMMARY The graph below represents the changes in value for an initial $100,000 investment in the Small Cap Value Fund from its inception(the beginning of investment operations), December 16, 2005 through December 31, 2014. These changes are then compared to a $100,000 investment in the S&P 600 Small Cap Index for the same period but do not reflect deduction for taxes that a shareholder would pay on distributions or redemption of Fund shares. Returns shown include the reinvestment of all dividends. Past performance is not predictive of future performance. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than the original cost. Inception Yr End Yr End Yr End Yr End Yr End (12/16/05) 2005 2006 2007 2008 2009 -------- ------- -------- ------- ------- ------ Small Cap Value Fund$100,000 $98,910 $123,400 $100,114 $58,577 $83,439 S&P 600 Index $100,000 $98,790 $114,093 $113,751 $78,500 $98,565 Yr End Yr End Yr End Yr End Yr End 2010 2011 2012 2013 2014 -------- -------- -------- -------- ------- Small Cap Value Fund$112,532 $111,418 $135,885 $195,280 $184,813 S&P 600 Index $124,507 $125,752 $146,275 $206,672 $218,514 $220,000| * $200,000| # * $180,000| # $160,000| * $140,000| * # $120,000| * # * * # $100,000| # * # * # * # $ 80,000| * # $ 60,000| # $ 40,000| $ 20,000| ___________________________________________________________ Inception 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (12/16/2005) # = Small Cap Value Fund * = S&P 600 Small Cap Index 15 Day Annual Annual Annual Annual Annual Return Return Return Return Return Return 2005 2006 2007 2008 2009 2010 ------ ------ ------ ------ ------ ------ Small Cap Value Fund (1.09%) 24.76% (18.87%) (41.49)% 42.46% 34.85% S&P 600 Index (1.21%) 15.49% ( 0.30%) (30.99)% 25.56% 26.32% Annual Annual Annual Annual Compounded Avg. Return Return Return Return Annual Return 2011 2012 2013 2014 5 Year Inception ------ ------ ------ ------ ------ --------- Small Cap Value Fund (0.99%) 21.96% 43.71% (5.36%) 17.22% 7.03% S&P 600 Index 1.00% 16.32% 41.29% 5.73% 17.24% 9.02% SMALL CAP VALUE FUND, INC. EXPENSES DECEMBER 31, 2014 As a shareholder of the Fund you incur ongoing costs including management fees, transaction costs, potential early redemption fess and other operating expenses. This example is intended to help you understand your 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 on June 30, 2014 and held for the entire six month period to December 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 $8,500 account value divided by $1,000 equals 8.5), then multiply this 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 the period. Hypothetical Example for Comparison Purposes The second line of the table below 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 the ongoing costs of investing in the Fund to 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 transactional costs such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only. Expenses Paid Beginning Ending During Period* Account Value Account Value June 30, 2014, June 30, 2014 December 31, 2014 December 31, 2014 ----------------- ------------ ----------------- Actual $ 1,000.00 $ 836.78 $ 4.40 Hypothetical** $ 1,000.00 $ 1,020.00 $ 4.84 *Expenses are equal to the Fund's annualized expense ratio of 0.95%, multiplied by the average account value over the period, multiplied by 184 days/365 days to reflect the one-half year period. ** Hypothetical return assumes 5% return before expenses. SMALL CAP VALUE FUND, INC. STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2014 ASSETS Investment securities, at fair value (cost $22,931,486) $ 20,991,024 Dividends receivable 2,995 ----------- Total assets 20,994,019 ----------- LIABILITIES Advisory fees payable 15,829 ----------- Total liabilities 15,829 ----------- NET ASSETS ? Equivalent to $35.99 per share based on 582,995 shares of common stock issued and outstanding; 100,000,000 shares authorized, $0.001 par value $ 20,978,189 	 ============ NET ASSETS CONSIST OF: Common stock				 $ 583 Paid-in capital 23,131,381 Net unrealized appreciation (1,940,462) Undistributed investment loss (8,894+28,219) (37,113) Accumulated undistributed realized loss (176,200) ------------ Net assets $ 20,978,189 ============ See accompanying notes to these financial statements SMALL CAP VALUE FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 2014 DESCRIPTION SHARES FAIR VALUE ----------- ------ ------------ COMMON STOCKS ? 96.48% Freight Transportation Arrangement-4.57% Brink?s Co. 				 39,301	 959,338 Crude Petroleum and Natural Gas-14.15% Stone Energy Corp. (a) 40,655		 686,256 Swift Energy Co. (a) 151,184	 612,295 Vaalco Energy Inc. (a) 162,498 740,991 Comstock Res Inc. 136,540 929,838 -------- 2,969,380 Fabricated Rubber Products-8.51% Cooper Tire & Rubber				 51,503	 1,784,579 Retail-7.69% EZ Corp. (a) 			 137,343	 1,613,780 Air Transportation, Scheduled-12.83% Hawaiian Holdings Inc. (a) 		 65,139	 1,696,871 Skywest Inc. 74,870 994,274 -------- 2,691,145 Gold Ore Mining-7.78% IAMGOLD Corp. (a) 		 604,387	 1,631,845 Apparel and Accessory Stores-14.05% Express Inc. (a) 129,120 1,896,773 Tillys Inc. (a) 108,429 1,050,677 -------- 2,947,450 Misc. Shopping Goods Stores-4.68% Big 5 Sporting Goods (a) 67,129 982,097 Oil & Gas Field Exploration Services-2.52% Dawson Geophysical 43,238 528,801 Petroleum Refining-3.91% Alon USA Energy (a) 64,725 820,065 -	Continued ? SMALL CAP VALUE FUND, INC. SCHEDULE OF INVESTMENTS, continued DECEMBER 31, 2014 DESCRIPTION SHARES FAIR VALUE ----------- ------ ----------- Drilling Oil & Gas Wells-2.61% Hercules Offshore (a) 546,668 546,668 Business Services-3.17% Liquidity Services (a) 81,500 665,855 Educational Services-5.16% ITT Educational Svcs (a) 112,641 1,082,480 State Commercial Banks-4.84% Marlin Business Services 49,493 1,016,091 -------- Total common stocks (cost $22,180,036) $ 20,239,574 SHORT-TERM INVESTMENTS ? 3.58% Schwab Money Market Fund-current interest at 0.00% (Single Class Fund) 			 751,450 $ 751,450 -------- Total short-term investments (cost $751,450) 751,450 -------- Total investment securities ? 100.06% (cost $22,931,486) 20,991,024 Other assets less liabilities ? (0.06)% (12,835) -------- Net assets ? 100.00% $ 20,978,189 ============ (a) Presently non-income producing See accompanying notes to these financial statements. SMALL CAP VALUE FUND, INC. STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2014 INVESTMENT INCOME Dividends $ 163,160 Interest 0 ------------ Total investment income 163,160 ------------ EXPENSES ? Advisory fees 191,379 ------------ 191,379 Net investment income (28,219) ------------ GAIN (LOSS) ON INVESTMENTS ? Net realized gain on investments 1,251,751 Net increase in unrealized depreciation of investments (2,638,055) ------------ Net realized gain and unrealized loss on investments (1,386,304) ------------ Net decrease in net assets resulting from operations $ (1,414,523) ============ See accompanying notes to these financial statements SMALL CAP VALUE FUND, INC. STATEMENTS OF CHANGES IN NET ASSETS Year Ended Year Ended Dec. 31, 2014 Dec. 31, 2013 INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income (loss) $ (28,219) $ 48,925 Net realized gain on investments 1,251,751 4,863,502 Unrealized depreciation of investments (2,638,055) (8,419) 				 ----------- ------------ Net increase(decrease) in net assets resulting from operations (1,414,523) 4,904,008 DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income 0 (48,925) ----------- ------------ Total Distributions 0 (48,925) CAPITAL SHARE TRANSACTIONS-NET 5,445,776 944,949 ----------- ------------ TOTAL INCREASE IN NET ASSETS 4,031,253 5,800,032 NET ASSETS, beginning of year 16,946,936 11,146,904 ----------- ------------ NET ASSETS, end of year $20,978,189 $16,946,936 =========== ============ See accompanying notes to these financial statements SMALL CAP VALUE FUND, INC. FINANCIAL HIGHLIGHTS PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR ENDED: YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 2014 2013 2012 2011 2010 ----- ------ ------ ------ ------ Net asset value, beginning of year $38.03 $26.54 $21.87 $22.29 $16.53 ------ ------ ------ ------ ------ Income (loss) from investment operations: Net investment income (0.05) 0.11 0.13 0.20 (0.01) Net realized and unrealized gain (loss)on investments (1.99) 11.49 4.67 (0.42) 5.77 ----- ----- ----- ----- ------ Total from investment operations	(2.04) 11.60 4.80 (0.22) 5.76 ----- ------ ------ ----- ------ Less distributions from: Net investment income 0.00 (0.11) (0.13) (0.20) 0.00 Net realized gains 0.00 0.00 0.00 0.00 0.00 ---- ------ ------ ------ ------ Total distributions 0.00 (0.11) (0.13) (0.20) 0.00 ----- ----- ----- ----- ------ Net asset value, end of year $35.99 $38.03 $26.54 $21.87 $22.29 ------- ------- ------ ------ ------ Total Return (5.36)% 43.71% 21.96% (0.99)% 34.85% Net assets, end of year(in 1000's) $20,978 $16,947 $11,147 $9.713 $18,388 Ratio of expenses to average net assets(a) 0.94% 0.95% 0.95% 0.96% 0.97% Ratio of net investment income (loss)to average net assets (0.14)% 0.34% 0.55% 0.61% (0.05)% Portfolio turnover rate (annualized) 68.02% 168.90% 90.31% 69.29% 80.53% (a) The Fund?s actual expenses are calculated daily at 0.95% of net asset value (NAV). See accompanying notes to these financial statements. SMALL CAP VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS 1.	ORGANIZATION Small Cap Value Fund, Inc. (the ?Fund?) was incorporated in the State of Texas on June 16, 2005 and is registered under the Investment Company Act of 1940 as a non-diversified, open-end management investment company. The investment objective of the Fund is to achieve growth by investing primarily in small capitalization common stocks. The effective date of the Fund?s Registration under the Securities Act of 1933 was October 27, 2005. 2.	SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from these estimates. Security Valuation Securities listed on a national securities exchange or in the over- the-counter market are valued at the last quoted sales price on the day of valuation, or if no quoted sales price was reported on that date, the last quoted bid price. Short-term investments are valued at cost which approximates fair value. Securities for which quotations are not readily available are valued at their estimated fair value as determined in good faith by the Fund?s Board of Directors. Securities Transactions and Investment Income Securities transactions are recorded on a trade-date basis. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Realized gains and losses are determined on a specific identification basis of the securities sold. Unrealized gains and losses resulting from the appreciation and depreciation of securities carrying values are included in the statement of operations. Distribution of Income and Gains The Fund declares and pays dividends annually from net investment income and from net realized gains, if any. Distributions from realized gains for book purposes may include short-term capital gains, which are included in ordinary income for tax purposes. Dividends are paid upon Board approval by the end of each calendar year. SMALL CAP VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS 2.	SIGNIFICANT ACCOUNTING POLICIES (continued) Federal Income Taxes The Fund?s policy is to continue to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute all of its taxable income, including any realized gains on investments, to its shareholders. The Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that it will not be subject to excise tax on undistributed income and gains. Therefore, no federal income tax or excise provision is required. Net investment income (loss), net realized gains (losses) and the cost of investments in securities may differ for financial statement and income tax purposes. The character of distributions from net investment income (loss) or net realized gains (losses) may differ from their ultimate characterization for income tax purposes. At December 31, 2014, there were no material differences. Also, due to the timing of dividend distributions, the year in which amounts are distributed may differ from the year that the income or realized gains were recorded by the Fund. Subsequent events Subsequent events were evaluated through February 13, 2015, the date of issuance of the financial statements. SMALL CAP VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS 3.	FAIR VALUE OF INVESTMENTS In accordance with U.S. generally accepted accounting principles (?GAAP?), fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund's own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below. Level 1 - quoted prices in active markets for identical investments. Level 2 - observable inputs, other than quoted prices (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The following table summarizes the valuation of the Fund's investments by the above fair value hierarchy levels as of December 31, 2014: Investments Other in Financial Level Securities Instruments * ----- ---------- ------------ Level 1: Common Stock $20,239,574 $ 0 Short term investments 751,450 0 ----------- ------------ Total Level 1: 20,991,024 0 Level 2 0 0 Level 3 0 0 ----------- ------------ Total $20,991,024 $ 0 =========== ============ * Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures forwards and swap contracts, which are valued at the unrealized appreciation depreciation on the instrument. As of December 31, 2014, the Fund did not own any other financial instruments. SMALL CAP VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS 3. FAIR VALUE OF INVESTMENTS (continued) Transfers between levels are recognized at the end of the reporting period. There were no transfers between level 1 and level 2 during the year. There were no level 3 investments held by the Fund during the year ended December 31, 2014. 4.	CAPITAL SHARE TRANSACTIONS Capital share transactions in the Fund?s $0.001 par value common stock were as follows: Year Ended Year Ended December 31, 2014 December 31, 2013 ------------------- --------------------- Shares Amount Shares Amount Shares sold 172,294 $ 6,713,820 26,758 $ 975,000 Shares issued in reinvestment of dividends	 0 $ 0 1,303 $ 48,925 ------ -------- --------- ---------- 172,294 $ 6,713,820 28,061 $ 1,023,925 Shares redeemed (34,970) (1,268,044) (2,383) (78,980) ------ -------- --------- ---------- Net increase 137,324 $ 5,445,776 25,678 $ 944,945 Beginning of year 445,631 $17,686,188 419,953 $ 16,741,243 ------ -------- ------- ---------- End of year 582,955 $23,131,964 445,631 $ 17,686,188 =========	========== ========= ========== 5.	INVESTMENT TRANSACTIONS The aggregate cost of purchases and proceeds from sales of investment securities, excluding short-term investments, aggregated $18,795,915 and $13,616,404, respectively, for the year ended December 31, 2014. The aggregate cost of investment securities, excluding short term investments, for federal income tax purposes was $22,180,036 as of December 31, 2014. There were no differences between the financial reporting basis and the income tax basis in the cost or net unrealized appreciation (depreciation) of the Fund?s investments as of December 31, 2014. As of December 31, 2014 and 2013, the aggregate unrealized appreciation and depreciation of investment securities was as follows: Description 2014 2013 ----------- ------- ------ Unrealized appreciation $ 2,553,041 $ 1,598,076 Unrealized depreciation (4,493,504) ( 900,479) ------------ ----------- Net unrealized appreciation (depreciation) $ (1,940,462) $ 697,597 ============ ============ SMALL CAP VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS 6.	DISTRIBUTION TO SHAREHOLDERS No dividend distributions were paid in 2014. 7.	ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund and the Advisor are under common control and the existence of that control may create operating results and financial position different than if they were autonomous. The Fund has an investment advisory agreement with Adams Asset Advisors, LLC (the ?Advisor?) to provide investment advisory services to the Fund. Laura S. Adams is the managing member of the Advisor and is an officer, director and shareholder of the Fund. Under the terms of the agreement, the Fund will pay the Advisor a monthly fee at the annual rate of 0.95% of the Fund?s average daily net assets. The fee is computed daily and payable monthly. The Advisor has contractually agreed to pay all operating expenses of the Fund, except brokerage fees and commissions, interest, taxes and extraordinary expenses. The advisory fee for 2014, as computed pursuant to the investment advisory agreement, totaled $191,379, of which $15,829 was payable on December 31, 2014. The Advisor acts as the transfer agent for the Fund, with Fidelity Investments as the sub-transfer agent. There are no fees associated with these services. The Fund acts as its own custodian, effective September 1, 2008, and is in compliance per requirements of Rule 17f-2. There are no fees associated with these services. 8. Redemption Fee To discourage short-term trades by investors and to compensate the Fund for costs that may be incurred by such trades, the Fund may impose a redemption fee of 2% of the total redemption amount if shares are held less than 365 days. For the year ended December 31, 2014, there were no redemption fees received by the Fund. 9.	ACCOUNTING FOR UNCERTAIN TAX POSITIONS As of December 31, 2014, open Federal tax years, subject to examination, include the tax years ended December 31, 2011 through December 31, 2013. As of and during the year ended December 31, 2014, the Fund did not have a liability for any unrecognized tax benefits. The Fund has no examination in progress and is not aware of any tax positions for which it is reasonably possible that the total tax amounts of unrecognized tax benefits will significantly change in the next twelve months. Additional Information (Unaudited) Proxy Voting Information Small Cap Value Fund, Inc. management is responsible for exercising the voting rights associated with the securities held by the Fund. A description of our philosophy on fulfilling this responsibility is available without charge, upon request, by calling 1-800-704-6072. Quarterly Filing of Portfolio Holdings The Fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The Fund?s Form N-Q?s are available on the SEC?s website at http://www.sec.gov, and can also be reviewed and copied at the SEC?s public reference room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Approval of Investment Advisory Contract At an in-person meeting held on January 14, 2015, the Board of Directors, including a majority of Directors that are not "interested" persons of the Fund(as the term is defined in the 1940 Act), re- approved the Advisory Agreement based upon its review of the qualitative and quantitative information provided by the Investment Advisor. The Directors considered, among other things, the following information regarding the Investment Advisor: 1)	Nature, extent and quality of services provided by the Advisor ? The Directors reviewed the nature, quality and scope of current services provided by the Advisor under the Advisory Agreement. The Directors also analyzed the experience of the Investment Advisor and capabilities as a portfolio manager. The Advisor?s Form ADV was reviewed as well as internal compliance policies and experience managing other portfolios. In addition, the portfolio and brokerage transactions were reviewed. Based on this review, the Directors concluded that the range and quality of services to be provided by the Investment Advisor to the Fund were appropriate and to support the selection of the original Investment Advisor. 2)	Investment performance ? The Directors reviewed the performance of the Fund as compared to market benchmarks for various time periods. This review focused on investment strategy and long term performance potential. The Directors concluded that the performance of the Fund, managed by the Investment Advisor, was satisfactory. 3)	Cost of services to the Fund and profitability of the Advisor ? The Directors considered the Fund?s management fee and total expense ratio relative to industry averages. The Directors determined that the Advisor is receiving a fee that is in line with fees charged for other funds and that the Advisor is operating profitably, is viable and should remain an ongoing entity. The Directors also noted that the Advisor is paying all expenses (except transaction commissions) associated with managing the Fund out of the management fee, which is very advantageous to shareholders versus other funds. 4)	Economies of Scale ? The Directors considered information regarding economies of scale with respect to management of the Fund and noted that the Fund and its shareholders are already experiencing and benefitting from an expense ratio that would be expected from that of funds with significantly larger asset bases. 5)	Conclusions ? Based on the above review and discussions, the Directors concluded that it is in the best interest of the Fund and the shareholders to approve the Advisory Agreement. Additional Information (Unaudited) Board of Directors Information The business and affairs of the Fund are managed under the direction of the Board of Directors of the Fund. Information pertaining to the Directors of the Fund are set forth below. The SAI of the Fund includes additional information about the Directors of the Fund and is available, without charge, by calling 800-704-6072. Each Director may be contacted by writing to that Director c/o Small Cap Value Fund, Inc., 8150 N. Central Expressway, #M1120, Dallas, Texas 75206. INDEPENDENT DIRECTORS Name and Age Position Term/ Principal Occupation Other Public Yrs Past five years Directorships Served ------------------ -------- ---- --------------------- ------------- Vicky L. Hubbard Director 1 Yr Private Investor, Stock Dividend Age 57 Technology Mngr prior Fund, Inc. Yolawnde F. Malone Director 1 Yr Senior Tax Mngr, Stock Dividend Age 51 Montgomery Coscia Fund, Inc. Greilich LLP, CPA Family Legacy Trust prior Melissa D. Gordon, Director 1 Yr Vice Chair Pathologist Stock Dividend M.D. prior Partner at North Fund, Inc. Age 51 Dallas Pathology INTERESTED DIRECTORS Laura S. Adams Director,1 Yr Member, Adams Stock Dividend Age 54 President Asset Advisors Fund, Inc. Secretary since 2002, Private Treasurer Investor prior This report and the financial statements contained herein are submitted for the general information of shareholders and are not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Nothing herein contained is to be considered an offer of sale or solicitation of an offer to buy shares of Small Cap Value Fund, Inc. Such offering is made only by prospectus, which includes details as to offering price and material information. Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of Small Cap Value Fund, Inc. We have audited the accompanying statement of assets and liabilities of Small Cap Value Fund, Inc., including the schedule of investments, as of December 31, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period ended. These financial statements and financial highlights are the responsibility of the Fund?s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with 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 December 31, 2014, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Small Cap Value Fund, Inc. as of December 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. PMB HELIN DONOVAN, LLP Dallas, Texas February 13, 2015 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 all officers and employees of the Fund. The registrant has not made any amendments to its code of ethics or granted any waivers or exceptions to the code during the covered period. Item 3. Audit Committee Financial Expert. The entire Board of Directors, in effect, acts as the audit committee. The Board has two financial experts serving on the Board. Laura Adams and Yolawnde Malone are the financial experts. Mrs. Adams is an ?interested? Director and Mrs. Malone is an ?independent? Director. Item 4. Principal Accountant fees and services. As part of the Registrants contract with the Investment Advisor of the Fund, the Investment Advisor is responsible for paying all accountant and related audit fees as part of the Advisory fee paid by the Fund. Item 5. Audit Committee of listed Registrants. (Not applicable for open end investment companies) Item 6. Schedule of Investments. Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form. Item 7. Disclosure of proxy voting policies and procedures for closed- end management investment companies. (Not applicable) Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not Applicable to open-end investment companies. Item 9. Purchase of equity securities by closed-end management investment companies. (Not applicable) Item 10. Submission of Matters to a vote of security holders. (None) Item 11. Controls and Procedures a)	 The Fund?s president has concluded that the Fund?s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission?s rules and forms, based upon such officers? evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. b)	 There were no significant changes or corrective actions with regard to deficiencies or material weaknesses in the Fund?s internal controls or in other factors that could significantly affect the Fund?s internal controls subsequent to the date of their evaluation. Item 12. Exhibits. a)	(1)Code of Ethics-Filed with Form N-CSR and is hereby incorporated by reference as Exhibit (p) of Post-Effective Amendment No. 10 (485BPOS)of our Registration under the Securities Act of 1933. (2)Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002- Attached b)	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002- Attached 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. Small Cap Value Fund By /s/ Laura S. Adams -------------------------------------- Laura S. Adams President Principal Executive Officer and Principal Financial Officer Date 2/13/15 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 dates indicated. Small Cap Value Fund By /s/ Laura S. Adams -------------------------------------- Laura S. Adams President Principal Executive Officer and Principal Financial Officer Date 2/13/15