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: 811-21691
Adirondack Funds
(Exact name of registrant as specified in charter)
2390 Western Avenue Guilderland, NY 12084
(Address of principal executive offices)
(Zip code)
Gregory A. Roeder, Adirondack Research and Management, Inc.
2390 Western Avenue Guilderland, NY 12084
(Name and address of agent for service)
Copy to:
JoAnn M. Strasser, Thompson Hine LLP
312 Walnut Street, 14th Floor, Cincinnati, Ohio 45202
Registrant's telephone number, including area code: (518) 690-0470
Date of fiscal year end: March 31
Date of reporting period: March 31, 2010
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
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The Adirondack Small Cap Fund
ANNUAL REPORT
March 31, 2010
![[adirondackncsr003.jpg]](https://capedge.com/proxy/N-CSRA/0001162044-10-000388/adirondackncsr003.jpg)
March 31, 2010
Dear Fellow Shareholders:
We are pleased to report that The Adirondack Small Cap Fund finished its fifth fiscal year, which ended on March 31, 2010, up 101.9%. The Fund’s benchmark Index (Russell2000 Value Index) posted a 65.1% return during the same period. The average returns for the Fund’s peer group was 72.6% during the 12 months ending March 31 2010. The Fund’s performance during FY 2010 has placed it among the top 5% of Small Cap Value funds tracked by MorningstarÒ for 1 and 3-year performance. The peer group is 284 funds for 1 year and 246 funds for 3 years.
The Fund’s out-performance can be attributed to the fact that we held on to and in some cases added exposure to stocks that other investors left for dead. The Fund had tremendous success investing in the following industries; Insurance, Telecommunications Equipment, Asset Management and Electronic Manufacturing Services. As we have mentioned in previous correspondences, the Fund often takes positions in low-priced stocks where a high degree of skepticism exists. Many of these stocks registered triple digit returns during FY 2010. Some advanced to the point where prudence dictated profit taking. In fact, the Fund’s underperformance during the March quarter can be attributed to a more cautious stance starting in early 2010.
We ended the fiscal year with 62 positions which is at the higher end of our targeted range of 40 to 70. The top ten represented 24% of the Fund, which is lower than normal and something we will look to increase going forward. Turnover for the year was 61% with most of the activity relating to reducing or exiting positions where the stock exceeded our target price.
In cases where the market had quickly bid up the price of our holding past our price target, the prudent choice was to take profit and then look for better opportunities. A perfect example of this was our position in Hartford Insurance (HIG), which we began buying in April of last year at about $12 per share. Hartford is a large multinational insurance company whose shares fell into small cap territory due to investor concerns regarding their investment and variable annuity portfolios. We viewed the significant price drop as an overreaction. Hartford’s investment portfolio was not any worse than other insurers and the issues regarding their variable annuity book could be corrected over time. Our thesis worked quicker than we projected and the shares quickly rose to more than 125% from our original entry price. We took profit for the following reasons:
·
Target price was achieved and valuation was now similar to peers.
·
Potential dilution from unwinding TARP could reduce potential share appreciation.
·
The stock is back in favor as Sell-side analysts are now writing positive notes about HIG.
Around the beginning of this year we started adding positions in companies that we felt could do well in an environment where economic growth was modest. These defensive additions to the portfolio resulted in weaker relative performance during the months of February and March. While the market has advanced quicker than the expectations of most managers, we still see pockets of opportunity. We are still able to find companies that we can buy for less than book value and we continue to find stocks that are completely misunderstood by the market. From a diversification standpoint, the Fund held investments in all of the major economic sectors led by technology, financial services, and healthcare. At fiscal year end the Fund had been holding a 9% cash position, which was nearly double the cash levels of the average mutual fund. The higher cash position is a reflection of increased asse t inflows to the Fund and will be put to work in a patient manner. Recent advances in the market have not been supported by higher trading volume. This condition gives more reason to be cautious when deploying cash. Going forward, we expect to carefully increase our equity exposure as attractive entry points become available.
So what’s next? While the recovery has been stronger than expected, many people still have serious reservations about future economic growth. Investors around the world have now turned their attention on government debt with Europe now in the spotlight. Interestingly it appears that Europe’s pain is the U.S. consumer’s gain. Oil prices have dropped sharply and U.S. interest rates have unexpectedly moved lower. There are still many people skeptical of investing in equities, which is ironic given the dismal risk/reward offered by alternative investments. We view investor anxiety as a positive sign suggesting that there continues to be plenty of cash on the sidelines.
Small Cap stocks have had a nice run over the past year, as they are normally first out of the gate when economic conditions improve. Yet we continue to remain highly optimistic about the companies the Fund owns. Larger companies are flush with cash and are actively looking for ways to grow. Private equity firms appear to be back in acquisition mode and credit is starting to loosen up. All of which points to a constructive environment for Small Caps.
We welcome all new investors and investment advisors. The Fund now has relationships with 62 advisors and is in active discussions with dozens more. We continue to add investment platforms and now have Blue Sky filings in 30 States. As the Adirondack Small Cap Fund enters its sixth year, we feel more confident than ever that we offer a valuable service to investors seeking small cap exposure. As always, thank you for investing with us. We appreciate your continued confidence and investments along side ours in The Adirondack Small Cap Fund.
Sincerely,
Matt Reiner, CFA
Greg Roeder, CFA
Portfolio Manager
Portfolio Manager
mreiner@adirondackfunds.com
groeder@adirondackfunds.com
March 31, 2010 Average Annual Total Returns for periods ended | |||
Since Inception (04/06/05) | 1yr | 3yr | |
The Adirondack Small Cap Fund | 7.5% | 101.9% | 1.3% |
Russell 2000® Value Index | 2.8% | 65.1% | -5.7% |
Peer Group** | Not Available | 72.6% | -4.2% |
The Fund commenced operation on April 6, 2005. The data quoted reflects past performance and is presented as total return (not annualized). Total return measures aggregate change. Past performance does not guarantee future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investors should consider the investment objectives, risks and charges and expenses of the Adirondack Small Cap Fund before investing. For a prospectus containing more detail including information on risks, fees and expense, please contact the Fund's transfer agent at 1-888-686-2729. Please read it carefully before you invest or send money. Current performance may be lower or higher than the performance data quoted. | |||
** Source: Wall Street Journal/Lipper
ADIRONDACK SMALL CAP FUND
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE ADIRONDACK SMALL CAP FUND, THE RUSSELL 2000 INDEX AND THE RUSSELL 2000 VALUE INDEX.
![[adirondackncsr005.jpg]](https://capedge.com/proxy/N-CSRA/0001162044-10-000388/adirondackncsr005.jpg)
1 Year 3 Year Since Inception
Adirondack Small Cap Fund *
101.91% 1.25% 7.50%
Russell 2000 Index **
62.76% (3.97)% 3.44%
Russell 2000 Value Index *** 65.08% (5.70)% 2.80%
(a) The total returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
* Initial public offering of shares was April 6, 2005.
**The Russell 2000 is by far the most common benchmark for mutual funds that identify themselves as "small-cap". It is the most widely quoted measure of the overall performance of the small-cap to mid-cap company shares.
***Russell 2000 Value Index: Measures the performance of those Russell 2000 companies with lower price/book ratios and lower
predicted growth rates.
This chart assumes an initial investment of $10,000 made on April 6, 2005. Past performance doesn't guarantee future results. Investment return and principal value will fluctuate so that shares, when redeemed, maybe worth more or less then their original cost. All returns reflect reinvested dividends but do not reflect the impact of taxes.
Current performance may be higher or lower than the performance quoted. Performance information current to the most recent month-end may be obtained by calling 1-888-686-2729.
THE ADIRONDACK SMALL CAP FUND
TOP TEN HOLDINGS, as a Percentage of the Fund’s Net Assets
March 31, 2010 (Unaudited)
1. 3Com Corp. | 2.94% |
2. DDI Corp. | 2.59% |
3. Delphil Financial Group 7.376% (Corporate Bond) | 2.52% |
4. Montpelier Re Holdings Ltd. | 2.49% |
5. Fresh Del Monte Produce | 2.44% |
6. Tellabs, Inc. | 2.28% |
7. PNM Resources, Inc. | 2.27% |
8. Vascular Solutions, Inc. | 2.18% |
9. Compuware Corp. | 2.16% |
10. Callaway Golf Corp. | 2.09% |
THE ADIRONDACK SMALL CAP FUND
GRAPHICAL ILLUSTRATION
March 31, 2010 (Unaudited)
The following chart gives a visual breakdown of the Fund by the industry sectors the underlying securities represent as a percentage of net assets.
![[adirondackncsr007.jpg]](https://capedge.com/proxy/N-CSRA/0001162044-10-000388/adirondackncsr007.jpg)
|
| The Adirondack Small Cap Fund |
| |||
Schedule of Investments | ||||||
|
| March 31, 2010 |
| |||
Shares | Value | |||||
COMMON STOCKS - 86.09% | ||||||
Accident & Health Insurance - 1.94% | ||||||
57,000 | Conseco, Inc. * | $ 354,540 | ||||
Agriculture Production - Crops - 2.44% | ||||||
22,004 | Fresh Del Monte Produce, Inc. * | 445,581 | ||||
Air-Conditioning & Warm Air Heating Equipment - 1.08% | ||||||
16,000 | Tecumseh Products Co. Class A * | 196,320 | ||||
Biotechnology Research & Products - 1.94% | ||||||
65,000 | Trinity Biotech plc. (Ireland) * | 354,250 | ||||
Calculating & Accounting Machines (No Electronic Computers) - 1.88% | ||||||
24,900 | NCR Corp. * | 343,620 | ||||
Computer Communications Equipment - 3.63% | ||||||
70,000 | 3Com Corp. * | 536,900 | ||||
38,633 | Adaptec, Inc. * | 126,330 | ||||
663,230 | ||||||
Construction Special Trade Contractors - 1.12% | ||||||
19,000 | Matrix Service Co. * | 204,440 | ||||
Container & Package-Metal & Glass - 1.83% | ||||||
12,401 | Crown Holdings, Inc. * | 334,331 | ||||
Electric Services - 5.30% | ||||||
18,000 | Calpine Corp. * | 214,020 | ||||
33,000 | PNM Resources, Inc. | 413,490 | ||||
10,800 | Unisource Energy Corp. | 339,552 | ||||
967,062 | ||||||
Electric Lighting & Wiring Equipment - 1.78% | ||||||
47,539 | LSI Industries, Inc. | 324,216 | ||||
Electromedical & Electrotherapeutic Apparatus - 0.61% | ||||||
4,675 | Conmed Corp. * | 111,312 | ||||
Financial Data Process Services - 1.65% | ||||||
49,174 | BGC Partners, Inc. Class A | 300,453 | ||||
Financial Miscellaneous - 2.00% | ||||||
59,394 | PMA Capital Corp. Class A * | 364,679 | ||||
Fire, Marine & Casualty Insurance - 5.35% | ||||||
4,600 | Endurance Specialty Holdings Ltd. (Bermuda) | 170,890 | ||||
27,000 | Montpelier Re Holdings Ltd. (Bermuda) | 453,870 | ||||
21,156 | Selective Insurance Group, Inc. | 351,190 | ||||
975,950 | ||||||
Food & Kindred Products - 1.99% | ||||||
26,000 | Sara Lee Corp. | 362,180 | ||||
Glass Containers - 0.39% | ||||||
2,000 | Owens Illinois, Inc. * | 71,080 | ||||
Gold And Silver Ores - 0.30% | ||||||
3,600 | Coeur D'Alene Mines Corp. * | 53,928 | ||||
Home Health Care - 1.19% | ||||||
250,410 | Hooper Holmes, Inc. * | 217,857 | ||||
Industrial & Commercial Fans & Blowers & Air Purifying Equip - 0.36% | ||||||
17,287 | Flanders Corp. * | 65,690 | ||||
Instruments For Measuring & Testing Of Electricity & Electronic Signals - 1.39% | ||||||
27,400 | Ixia * | 253,998 | ||||
Investment Advice - 0.58% | ||||||
5,091 | Virtus Investment Partners, Inc. * | 106,096 | ||||
Leisure Time - 2.09% | ||||||
43,200 | Callaway Golf Corp. | 381,024 | ||||
Life Insurance - 1.55% | ||||||
15,400 | Genworth Financial, Inc. Class A * | 282,436 | ||||
Medical & Dental Instruments & Supply - 2.18% | ||||||
44,246 | Vascular Solutions, Inc. * | 397,772 | ||||
Miscellaneous Electrical Machinery, Equipment, & Supplies - 1.65% | ||||||
52,397 | Exide Technologies * | 301,807 | ||||
Petroleum Refining - 1.68% | ||||||
22,654 | Frontier Oil Corp. | 305,829 | ||||
Pharmaceutical Preparations - 3.22% | ||||||
15,400 | Endo Pharmaceuticals Holdings, Inc. * | 364,826 | ||||
24,825 | Prestige Brands Holdings, Inc. * | 223,425 | ||||
588,251 | ||||||
Printed Circuit Boards - 5.91% | ||||||
83,315 | DDI Corp. * | 472,396 | ||||
17,000 | Jabil Circuit, Inc. | 275,230 | ||||
20,000 | Sanmina-Sci Corp. * | 330,000 | ||||
1,077,626 | ||||||
Production Technology Equipment - 1.66% | ||||||
23,669 | Electro Scientific Industries, Inc. * | 303,200 | ||||
Publishing-Newspapers - 1.36% | ||||||
59,175 | Journal Communications, Inc. Class A * | 248,535 | ||||
Retail-Retail Stores, NEC - 0.90% | ||||||
7,200 | IAC/Interactive Corp. * | 164,016 | ||||
Radio & TV Broadcasting & Communications Equipment - 2.98% | ||||||
61,655 | Endwave Corp. * | 169,551 | ||||
52,007 | Seachange International, Inc. * | 373,410 | ||||
542,961 | ||||||
Security Brokers, Dealers, & Flotation Companies - 1.63% | ||||||
19,500 | Knight Capital Group Class A * | 297,765 | ||||
Semiconductors & Related Devices - 3.18% | ||||||
77,000 | AXT, Inc. * | 245,630 | ||||
30,000 | Verigy Ltd. (Singapore) * | 335,400 | ||||
581,030 | ||||||
Services-Amusements & Recreation Services - 0.98% | ||||||
26,000 | Warner Music Group Corp. * | 179,660 | ||||
Services-Business Services, NEC - 1.63% | ||||||
16,543 | Keynote Systems, Inc. | 188,425 | ||||
30,623 | Spark Networks, Inc. * | 109,097 | ||||
297,522 | ||||||
Services-Commercial Physical & Biological Research - 1.24% | ||||||
27,000 | Albany Molecular Research, Inc. * | 225,450 | ||||
Services-Computer Processing & Data Preparation - 0.63% | ||||||
100,000 | IPass, Inc. | 115,000 | ||||
Services-Computer Programming Services - 3.82% | ||||||
47,000 | Compuware Corp. * | 394,800 | ||||
62,500 | Realnetworks, Inc. * | 301,875 | ||||
696,675 | ||||||
Services-Computer Programming, Data Processing, Etc. - 0.33% | ||||||
58,013 | Autobytel, Inc. * | 60,914 | ||||
Services-Prepackaged Software - 2.07% | ||||||
40,000 | Lawson Software Americas, Inc. * | 264,000 | ||||
11,000 | Skillsoft Public Limited Co. * | 113,520 | ||||
377,520 | ||||||
Surety Insurance - 2.90% | ||||||
14,100 | Assured Guaranty Ltd. (Bermuda) | 309,777 | ||||
41,560 | RAM Holdings Ltd. (Bermuda) * | 27,430 | ||||
10,200 | XL Capital Ltd. (Bermuda) | 192,780 | ||||
529,987 | ||||||
Telephone & Telegraph Apparatus - 2.28% | ||||||
55,000 | Tellabs, Inc. | 416,350 | ||||
Water, Sewer, Pipeline, & Power Line Construction - 1.47% | ||||||
16,500 | MYR Group, Inc. | 269,115 | ||||
TOTAL FOR COMMON STOCKS (Cost $12,965,109) - 86.09% | 15,711,258 | |||||
CORPORATE BONDS - 4.84% | ||||||
21,900 | Delphi Financial Group 7.376% 05/01/2067 | 459,462 | ||||
23,800 | PMA Capital Corp. 8.50% 06/15/2018 | 231,812 | ||||
8,856 | Pulte Homes, Inc. 7.375% 06/01/2046 | 192,166 | ||||
TOTAL FOR CORPORATE BONDS (Cost $699,929) - 4.84% | 883,440 | |||||
SHORT-TERM INVESTMENTS - 8.65% | ||||||
1,578,207 | Huntington U.S. Treasury Money Market IV 0.01% ** | 1,578,207 | ||||
TOTAL SHORT-TERM INVESTMENTS (Cost $1,578,207) - 8.65% | 1,578,207 | |||||
TOTAL INVESTMENTS (Cost $15,243,245) - 99.58% | 18,172,905 | |||||
ASSETS IN EXCESS OF OTHER LIABILITIES - 0.42% | 77,359 | |||||
NET ASSETS - 100.00% | $ 18,250,264 | |||||
* Non-income producing securities during the period. | ||||||
** Variable rate security; the money market rate shown represents the yield at March 31, 2010. | ||||||
The accompanying notes are an integral part of these financial statements. | ||||||
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below: | ||||||
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. | ||||||
| ||||||
Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an active market, price for similar instruments, interest rates, prepayment speeds, yield curves, default rates and similar data. | ||||||
Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available,representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. | ||||||
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. | ||||||
The following is a summary of inputs used as of March 31, 2010 in valuing the Fund’s investments carried at value: | ||||||
Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||
Common Stocks | $ 15,711,258 | $ - | $ - | $15,711,258 | ||
Corporate Bonds | 883,440 | - | - | 883,440 | ||
Short-Term Investments: | ||||||
Huntington US Treasury Money Market Fund IV | 1,578,207 | - | - | 1,578,207 | ||
$ 18,172,905 | $ - | $ - | $18,172,905 | |||
The accompanying notes are an integral part of these financial statements. | ||||||
| The Adirondack Small Cap Fund |
|
Statement of Assets and Liabilities | ||
| March 31, 2010 |
|
Assets: | ||
Investments in Securities, at Value (Cost $15,243,245) | $ 18,172,905 | |
Cash | 747,248 | |
Receivables: | ||
Dividends and Interest | 9,883 | |
Shareholder Subscription | 25,552 | |
Prepaid Expenses | 9,562 | |
Total Assets | 18,965,150 | |
Liabilities: | ||
Securities Purchased | 668,432 | |
Shareholder Redemptions | 18,596 | |
Due to Advisor | 15,856 | |
Accrued Expenses | 12,002 | |
Total Liabilities | 714,886 | |
Net Assets | $ 18,250,264 | |
Net Assets Consist of: | ||
Paid In Capital | $ 15,862,227 | |
Accumulated Undistributed Realized Loss on Investments | (541,623) | |
Unrealized Appreciation in Value of Investments | 2,929,660 | |
Net Assets, for 1,428,764 Shares Outstanding | $ 18,250,264 | |
Net Asset Value Per Share | $ 12.77 | |
Minimum Redemption Price Per Share ($12.77 * 0.99) Note 4 | $ 12.64 | |
The accompanying notes are an integral part of these financial statements. | ||
| The Adirondack Small Cap Fund |
|
Statement of Operations | ||
| For the year ended March 31, 2010 |
|
Investment Income: | ||
Dividends | $ 94,449 | |
Interest | 53,981 | |
Total Investment Income | 148,430 | |
Expenses: | ||
Advisory Fees (Note 3) | 133,397 | |
Transfer Agent Fees | 29,038 | |
Legal Fees | 8,280 | |
Custodian Fees | 7,350 | |
Auditing Fees | 15,622 | |
Trustee Fees | 3,846 | |
Insurance Fees | 1,027 | |
Registration Fees | 3,938 | |
Printing & Mailing Fees | 299 | |
Total Expenses | 202,797 | |
Advisory Fees Waived (Note 3) | (33,033) | |
Net Expenses | 169,764 | |
Net Investment Loss | (21,334) | |
Realized and Unrealized Gain (Loss) on Investments: | ||
Realized Gain on Investments | 583,759 | |
Net Change in Unrealized Appreciation on Investments | 6,118,370 | |
Realized and Unrealized Gain (Loss) on Investments | 6,702,129 | |
Net Increase in Net Assets Resulting from Operations | $ 6,680,795 | |
The accompanying notes are an integral part of these financial statements. | ||
| ||
The Adirondack Small Cap Fund | |||
Statements of Changes in Net Assets | |||
|
|
|
|
For the Years Ended | |||
3/31/2010 | 3/31/2009 | ||
Increase (Decrease) in Net Assets From Operations: | |||
Net Investment Income (Loss) | $ (21,334) | $ 15,890 | |
Net Realized Gain (Loss) on Investments | 583,759 | (1,124,540) | |
Unrealized Appreciation (Depreciation) Investments | 6,118,370 | (2,732,287) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | 6,680,795 | (3,840,937) | |
Distributions to Shareholders: (Note 6) | |||
Net Investment Income | (15,882) | - | |
Realized Gains | - | (175,088) | |
Total Dividends and Distributions Paid to Shareholders | (15,882) | (175,088) | |
Capital Share Transactions (Note 4) | 5,812,557 | 990,829 | |
Total Increase (Decrease) in Net Assets | 12,477,470 | (3,025,196) | |
Net Assets: | |||
Beginning of Year | 5,772,794 | 8,797,990 | |
End of Year (Including Undistributed Net Investment Income of | |||
$0 and $15,890, respectively) | $ 18,250,264 | $ 5,772,794 | |
The accompanying notes are an integral part of these financial statements. | |||
THE ADIRONDACK SMALL CAP FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 2010
Note 1. Organization
The Adirondack Small Cap Fund (the “Fund”), is a diversified series of Adirondack Funds (the “Trust”), an open-end investment company that was organized as an Ohio business trust on December 8, 2004. The Trust is permitted to issue an unlimited number of shares of beneficial interest of separate series. The Fund is the only series currently authorized by the Board of Trustees. The Fund commenced investment operations April 6, 2005. The Fund’s investment objective is long-term capital appreciation. The Fund’s principal investment strategy is to invest in a diversified portfolio of equity securities of small capitalization companies that the Fund’s investment adviser, Adirondack Research & Management, Inc. (the “Advisor”), believes are undervalued.
Note 2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies employed by the Fund in preparing its financial statements:
Codification: The Financial Accounting Standards Board has issued FASB ASC 105 (formerly FASB Statement No. 168), The “FASB Accounting Standards Codification™” and the Hierarchy of Generally Accepted Accounting Principles (“GAAP”) (“ASC 105”). ASC 105 established the FASB Accounting Standards Codification™ (“Codification” or “ASC”) as the single source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification supersedes all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become nonauthoritati ve.
Following the Codification, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates, which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification. GAAP is not intended to be changed as a result of the FASB's Codification project, but it will change the way the guidance is organized and presented. As a result, these changes will have a significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009. The Fund has implemented the Codification as of March 31, 2010.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America.
The Fund adopted FASB Accounting Standards Codification guidance regarding "Disclosures about Derivative Instruments and Hedging Activities" effective January 1, 2009. This guidance requires enhanced disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial position, performance and cash flows.
Security Valuations: Equity securities generally are valued on the basis of prices furnished by a pricing service when the Advisor believes such prices accurately reflect the fair market value of such securities. Securities that are traded on any stock exchange or on the NASDAQ over-the-counter market are generally valued by a pricing service at the last quoted sale price. Lacking a last sale price, an equity security is generally valued by a pricing service at its last bid price. When market quotations are not readily available from a pricing service, when the Advisor determines that the market quotation or the price provided by the pricing service does not accurately reflect the current market value, when restricted or illiquid securities are being valued, or when an event occurs after the close of trading (but prior to the time the NAV is calculated) that materially affects fair value, such securities are fair valued as determined in good faith by the Advisor, in conformity with guidelines adopted by and subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued on the basis of prices furnished by a pricing service when the Advisor believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. Short term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board has determined will represent fair value.
In accordance with the Trust’s good faith pricing guidelines, the Advisor is required to consider all appropriate factors relevant to the value of securities for which it has determined other pricing sources are not available or reliable as described above. No single standard exists for determining fair value controls, since fair value depends upon the circumstances of each individual case. As a general principle, the current fair value of an issue of securities being valued by the Advisor would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods which are in accord with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market of a similar freely traded security (including a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods.
The Board of Trustees annually reviews and approves the use of the pricing services. The Board will initially approve and annually reapprove use of a pricing service if it is satisfied that use of the pricing service will result in the accurate valuation of Fund securities.
Foreign currency: Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
Financial futures contracts: The Fund may invest in financial futures contracts solely for the purpose of hedging its existing portfolio securities, or securities that the Fund intends to purchase, against fluctuations in fair value caused by changes in prevailing securities markets or interest rates. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash, U.S. government securities, or other assets, equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the fair value of the underlying security. The Fund recognizes a gain or loss equal to the change in daily variation margin. Should market conditions move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futu res contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the underlying hedged assets.
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 its taxable income to its shareholders. Therefore, no federal income tax provision is required.
The Fund evaluates tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether it is "more-likely-than-not" (i.e., greater than 50 percent) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. The Fund did not record any tax provision in the current period. However, management's conclusions regarding tax positions taken may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities (i.e., the last 3 tax year ends. as applicable), on-going analysis of and changes to tax laws, regulations and interpretations thereof.
Distributions to Shareholders: The Fund intends to distribute to its shareholders substantially all of its net realized capital gains and net investment income, if any, at year-end. Distributions will be recorded on ex-dividend date.
Other: The Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums are amortized over the useful lives of the respective securities. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.
Use of Estimates: The preparation of financial statements in conformity with 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. Management has evaluated the impact of all subsequent events through May 28, 2010, the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in these financial statements.
Reclassifications: In accordance with SOP 93-2, the Fund has recorded a reclassification in the capital accounts. As of March 31, 2010, the Fund recorded permanent book/tax differences of $21,326 from net investment loss to paid-in capital. This reclassification has no impact on the net asset value of the Fund and is designed generally to present undistributed income and net realized gains on a tax basis, which is considered to be more informative to shareholders.
expenses during the year. Actual results could differ from these estimates.
Note 3. Investment Management Agreement
The Fund has a management agreement (the “Agreement”) with the Advisor to furnish investment advisory and management services to the Fund. Gregory A. Roeder, Louis Morizio and Matthew Reiner, each a Trustee and/or an officer of the Fund, are the shareholders of the Advisor. Under the Agreement, the Advisor earns a monthly fee from the Fund at the annual rate of 1.25% of the Fund’s average daily net assets. The Advisor had an expense reimbursement agreement in effect with the Fund through July 31, 2009 to waive its management fee and\or reimburse expenses to the extent that the Fund’s total annual operating expenses exceeded 1.70%. Effective August 1, 2009, the Advisor agreed to waive fees or reimburse the Fund should the total operating expenses of the Fund exceed 1.49% until July 31, 2011. The Advisor’s obligation to waive fees or reimburse expenses excludes brokerage fees and commissions, borrowing costs ( such as (a) interest and (b) dividend expenses on securities sold short), taxes, extraordinary expenses, and costs of acquired funds. Any waiver or reimbursement by the Advisor is subject to repayment by the Fund within three fiscal years following the fiscal year in which the waived and/or reimbursed expenses occurred, if the Fund is able to make repayment without exceeding its current expense limitations and the repayment is approved by the Board of Trustees. For the year ended March 31, 2010 the Advisor earned advisory fees of $133,397 of which $33,033 was waived. The Fund owed the Advisor $15,856 as of March 31, 2010.
As of March 31, 2010, the following is subject to repayment by the Fund to the Advisor:
Fiscal Year Ended | Recoverable Through | Fund |
March 31, 2008 | March 31, 2011 | $26,587 |
March 31, 2009 | March 31, 2012 | $36,059 |
March 31, 2010 | March 31, 2013 | $33,033 |
Note 4. Capital Share Transactions
The Fund is authorized to issue an unlimited number of shares of separate series. The total paid-in capital was $15,862,227 as of March 31, 2010. Transactions in capital for the year ended March 31, 2010, and the fiscal year ended March 31, 2009 were as follows:
March 31, 2010 | March 31, 2009 | |||
Shares | Amount | Shares | Amount | |
Shares sold | 1,086,283 | $12,168,745 | 191,908 | $1,642,569 |
Shares reinvested | 1,237 | 15,858 | 24,695 | 175,088 |
Shares redeemed | (570,010) | (6,372,046) | (104,735) | (826,828) |
Net increase | 517,510 | $5,812,557 | 111,868 | $990,829 |
Shareholders will be subject to a Redemption Fee on redemptions and exchanges equal to 1.00% of the net asset value of the Fund shares redeemed within 30 days after their purchase. For the year ended March 31, 2010, $117 redemption fees were collected by the Fund from shareholder transactions and included in paid-in-capital.
Note 5. Investment Transactions
For the year ended March 31, 2010, purchases and sales of investment securities other than U.S. Government obligations and short-term investments aggregated $10,831,904 and $6,185,215 respectively.
Note 6. Tax Matters
As of March 31, 2010, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:
Capital loss carryforward expiring
3/31/2017+
($243,267)
3/31/2018
(186,714)
($429,981)
Gross unrealized appreciation on investment securities
$ 3,314,947
Gross unrealized depreciation on investment securities
($ 488,192)
Net unrealized appreciation on investment securities
$ 2,826,755
Cost of investment securities *
$ 15,346,150
+ The capital loss carryforward will be used to offset any capital gains realized by the Fund in future years through the expiration date. The Fund will not make distributions from capital gains while a capital loss carryforward remains.
* The difference between the book cost and tax cost of investments represents disallowed wash sales for tax purposes.
On March 30, 2010 a distribution of $.01123 per share was paid to Fund shareholders.
The tax character of distributions paid during the years ended March 31, 2010 and 2009 are as follows:
2010
2009
Ordinary income
$15,882
-
Long-term capital gain
-
$175,088
Note 7. Control and 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 amended. As of March 31, 2010, Charles Schwab & Co. for the benefit of its customers owned over 43.98% of the Fund. The Schwab account is an omnibus account for the benefit of individual investors. As of March 31, 2010, National Financial Service Corp., for the benefit of its customers, owned 38.72% of the Fund.
THE ADIRONDACK SMALL CAP FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees
of The Adirondack Small Cap Fund,
a Series of the Adirondack Funds
We have audited the accompanying statement of assets and liabilities of The Adirondack Small Cap Fund, a Series of the Adirondack Funds (the “Fund”), including the schedule of investments, as of March 31, 2010 and the related statement of operations for the year then ended, statements of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the four years in the period then ended and for the period April 6, 2005 (commencement of investment operations) through March 31, 2006. 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 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 and cash owned as of March 31, 2010, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Adirondack Small Cap Fund, a Series of the Adirondack Funds as of March 31, 2010, 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 periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Abington, Pennsylvania May 28, 2010 |
|
![[adirondackncsr008.jpg]](https://capedge.com/proxy/N-CSRA/0001162044-10-000388/adirondackncsr008.jpg)
The Adirondack Small Cap Fund | |||
Expense Illustration | |||
March 31, 2010 (Unaudited) | |||
Expense Example | |||
As a shareholder of The Adirondack Small Cap Fund, you incur ongoing costs which typically consist of: (1) management fees, custody fees, transfer agent fees, and other Fund expenses and (2) potential redemption fees for redemption of shares within 30 days of purchase. 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. | |||
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, October 1, 2009 through March 31, 2010. | |||
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, 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 entitled "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 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 this Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect the 1.00% redemption fee imposed on redemptions within 30 days of purchase. Therefore, the second line of the table is useful in comparing your on going costs only, and will not help you determine the relative total costs of owning different funds. If the transactional costs were included where applicable, your costs may be higher. | |||
Beginning Account Value | Ending Account Value | Expenses Paid During the Period * | |
October 1, 2009 | March 31, 2010 | October 1, 2009 through March 31, 2010 | |
Actual | $1,000.00 | $1,130.08 | $8.22 |
Hypothetical (5% Annual | |||
Return before expenses) | $1,000.00 | $1,017.35 | $7.79 |
* Expenses are equal to the Fund's annualized expense ratio of 1.54%, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). | |||
THE ADIRONDACK SMALL CAP FUND
TRUSTEES AND OFFICERS
MARCH 31, 2010 (UNAUDITED)
The following table provides information regarding each Trustee who is not an “interested person” of the Trust, as defined in the Investment Company Act of 1940.
Name, Address, Age | Position(s) Held with the Fund | Term of Office and Length of Time Served | Number of Portfolios Overseen | Principal Occupation During Past Five Years and Current Directorships |
Kevin Gallagher 2390 Western Ave Guilderland, New York 12084 Age: 45 | Trustee | Indefinite; Since March 2005 | 1 | Senior Vice President of Business Development, Panurgy NY Metro, LLC since February 2004; Director of Sales, Coca-Cola Enterprises from December 1988 through February 2004. |
Wade Coton 2390 Western Ave Guilderland, New York 12084 Age: 42 | Trustee | Indefinite; Since March 2005 | 1 | Vice President, L.D.M Management Group Inc. since January 2007. Home Builder & Developer, Richard H. List Inc. from January 1995 through December 2006. |
THE ADIRONDACK SMALL CAP FUND
TRUSTEES AND OFFICERS
SEPTEMBER 30, 2009 (UNAUDITED)
The following table provides information regarding each Trustee who is an “interested person” of the Trust, as defined in the Investment Company Act of 1940, and each officer of the Trust.
Each Trustee serves as a trustee until the termination of the Trust unless the Trustee dies, resigns, retires or is removed.
Name, Address, Age | Position(s) Held with the Fund | Term of Office and Length of Time Served | Number of Portfolios Overseen | Principal Occupation During Past Five Years and Current Directorships |
Gregory A. Roeder 2390 Western Ave Guilderland, New York 12084 Age: 46 | President and Chief Compliance Officer | Indefinite; Since March 2005 | N/A | Principal, Portfolio Manager & CCO, Adirondack Research & Management, Inc. from 2004 to the present; Portfolio Manager/Analyst, Eddy & Wakefield from 2000 to 2003 |
Louis Morizio 2390 Western Ave Guilderland, New York 12084 Age: 50 | Trustee and Secretary | Indefinite; Trustee Since March 2005; Secretary Since December 2004 | 1 | Registered Investment Adviser, Center for Financial Planning, from December 1994 to January 2008; Vice President, Berkshire Bank, from January 2008 to December 2009. Vice President 1st Albany Mortgage April 2010 to present. Certified Financial Planner since 1991, Accredited Investment Fiduciary Analyst since 2006. |
Matthew Reiner 2390 Western Ave Guilderland, New York 12084 Age: 44 | Treasurer and Principal Financial Officer | Indefinite; Since March 2005 | N/A | Principal, Portfolio Manager & CFO, Adirondack Research & Management Inc. February 2005 to Present, Vice President, Portfolio Manager and Director of Research, Paradigm Capital Management from 1998 to Jan 2005 |
Norman Joseph Plourde 2390 Western Ave Guilderland, New York 12084 Age: 46 | Trustee | Indefinite; Since March 2005 | 1 | VP and principal of Ideal Wood Products since October 2001. General Manager of operations, Universal Forest Products Inc. from October 2001 through June 2005 General Manager and Treasurer of P&R Truss Co. from June 1985 through October 2001. |
The Fund’s Statement of Additional contains additional information about the Trustees and Officers and is available, without charge by calling (888) 686-2729.
THE ADIRONDACK SMALL CAP FUND
ADDITIONAL INFORMATION
March 31, 2010 (UNAUDITED)
Portfolio Holdings – The Fund files a complete schedule of investments with the SEC for the first and third quarter of each fiscal year on Form N-Q. The Fund’s first and third fiscal quarters end on June 30 and December 31. The Form N-Q filing must be made within 60 days of the end of the quarter. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov, or they may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC (call 1-800-732-0330 for information on the operation of the Public Reference Room). You may also obtain copies by calling the Fund at 1-888-686-2729, free of charge.
Proxy Voting - A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund voted proxies during the most recent 12-month period ended June 30, are available without charge upon request by (1) calling the Fund at (888) 686-2729 and (2) from Fund documents filed with the Securities and Exchange Commission ("SEC") on the SEC's website at www.sec.gov. A review of how the Fund voted on company proxies can be obtained at our transfer agent’s website, www.mutualss.com.
Additional Information - The Fund's Statement of Additional Information ("SAI") includes additional information about the trustees and is available, without charge, upon request. You may call toll-free (888) 686-2729 to request a copy of the SAI or to make shareholder inquiries.
Board of Trustees
Wade Coton
Kevin Gallagher
Louis Morizio
Norman Joseph Plourde
Investment Adviser
Adirondack Research and Management, Inc.
2390 Western Avenue
Guilderland, NY 12084
Dividend Paying Agent,
Shareholders’ Servicing Agent,
Transfer Agent
Mutual Shareholder Services, LLC
8000 Town Centre Drive, Suite 400
Broadview Heights, OH 44147
Custodian
The Huntington National Bank, NA
41 South High Street
Columbus, OH 43216
Independent Registered Public Accounting Firm
Sanville & Company
1514 Old York Road
Abington, PA 19001
Legal Counsel
Thompson Hine LLP
312 Walnut Street, 14th Floor
Cincinnati, OH 45202
This report is provided for the general information of the shareholders of the Adirondack Small Cap Fund. This report is not intended for distribution to prospective investors in the Fund, unless preceded or accompanied by an effective prospectus.
Item 2. Code of Ethics.
(a)
As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.
A copy of registrant's code of ethics will be provided to any person without charge, upon request. Please call 888-686-2729 to request information.
(b)
For purposes of this item, “code of ethics” means written standards that are reasonably designed to deter wrongdoing and to promote:
(1)
Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
(2)
Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant;
(3)
Compliance with applicable governmental laws, rules, and regulations;
(4)
The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
(5)
Accountability for adherence to the code.
(c)
Amendments:
During the period covered by the report, there have not been any amendments to the provisions of the code of ethics.
(d)
Waivers
During the period covered by the report, the registrant has not granted any express or implicit waivers from the provisions of the code of ethics.
Item 3. Audit Committee Financial Expert.
(a)
The registrant’s board of trustees has determined that Kevin Gallagher is an audit committee financial expert. Kevin Gallagher is independent for purposes of this Item 3. He has become an expert due to experience during his years as divisional manager at the Coca Cola Company.
Item 4. Principal Accountant Fees and Services.
[The information required by this Item is only required in an annual report.]
(a)
Audit Fees
FY 2010
$ 10,500
FY 2009
$ 11,500
(b)
Audit-Related Fees
Registrant
FY 2010
$ 0
FY 2009
$ 0
(c)
Tax Fees
Registrant
FY 2010
$ 1,500
FY 2009
$ 1,500
Nature of the fees:
Preparation and filing of taxes.
(d)
All Other Fees
Registrant
FY 2010
$ 0
FY 2009
$ 0
(e)
(1)
Audit Committee’s Pre-Approval Policies
There’s no pre-approval policy in place. The audit committee approves expenditures and engagements at he regular audit committee meetings.
(2)
Percentages of Services Approved by the Audit Committee
Registrant]
Audit-Related Fees:
100 %
Tax Fees:
100 %
All Other Fees:
N/A %
(f)
During audit of registrant's financial statements for the most recent fiscal year, less than 50 percent of the hours expended on the principal accountant's engagement were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.
(g)
The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant:
Registrant
FY 2010
$ 1,500 [tax fees]
FY 2009
$ 1,500 [tax fees]
(h)
The registrant's audit committee has not considered whether the provision of non-audit services to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant, that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Companies. Not applicable.
Item 6. Schedule of Investments.
Not applicable – schedule filed with Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds. Not applicable.
Item 8. Portfolio Managers of Closed-End Funds. Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Funds. Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
The registrant has not adopted procedures by which shareholders may recommend nominees to the registrant's board of trustees.
Item 11. Controls and Procedures.
(a)
Disclosure Controls & Procedures. Principal executive and financial officers have concluded that Registrant’s disclosure controls & procedures are effective based on their evaluation as of a date within 90 days of the filing date of this report.
(b)
Internal Controls. There were no significant changes in Registrant’s internal controls of in other factors that could significantly effect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Item 12. Exhibits.
(a)(1)
EX-99.CODE ETH. Not applicable.
(a)(2)
EX-99.CERT. Filed herewith.
(a)(3)
Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b)
EX-99.906CERT. Filed herewith.
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.
Adirondack Funds
By /s/Gregory A. Roeder
*Gregory A. Roeder
President and Chief Compliance Officer
Date June 7, 2010
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/Gregory A. Roeder
*Gregory A. Roeder
President and Chief Compliance Officer
Date June 7, 2010
By /s/Matthew Reiner
*Matthew Reiner
Treasurer and Principal Financial Officer
Date June 7, 2010
* Print the name and title of each signing officer under his or her signature.