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 811-08191
Name of Fund: Bullfinch Fund, Inc.
Fund Address: 1370 Pittsford Mendon Road
Mendon, New York 14506
Name and address of agent for service: Christopher Carosa, President,
Bullfinch Fund, Inc., 1370 Pittsford Mendon Road,
Mendon, New York 14506
Mailing address: 1370 Pittsford Mendon Road
Mendon, New York 14506
Registrant's telephone number, including area code: (585) 624-3150
Date of fiscal year end: 06/30/03
Date of reporting period: 07/01/02 - 6/30/03
Item 1 - Attach shareholder report
BULLFINCH FUND, INC.
1370 PITTSFORD MENDON ROAD
MENDON, NEW YORK 14506
(585) 624-3150
1-888-BULLFINCH
(1-888-285-5346)
Annual Report
June 30, 2003
Management's Discussion of Fund Performance
August 28, 2003
Dear Fellow Shareholders:
We are very proud to present the June 2003 Annual Report of the Bullfinch Fund,
Inc. This report contains the audited financial statements for both the
Unrestricted Series and the Western New York Series.
Last year we said we felt the market offered tremendous opportunity. We
warned, however, that investor psychology dampened market enthusiasm. With the
end of the major battle in Iraq and investor friendly Bush Tax Package now in
place, investor enthusiasm has taken a more favorable turn. We had positioned
our fund portfolios to take advantage of these events by focusing on dividend
paying stocks and capital equipment (mostly technology) stocks. As a result,
our shareholders have been rewarded handsomely.
For example, during the 12 months ending June 30, 2003, while the Value Line
Geometric Index (our benchmark index) - as well as the popular S&P 500 - were
both down, both our portfolios provided shareholders with positive returns. In
fact, the Wall Street Journal recently ranked the Western New York Series among
the top ten in the nation in its category (Year-to-Date through May 31st).
Lipper, which continues to rank both funds as among the best in their
categories, has indicated the YTD ranking of the Western New York Series
remains in the top ten through July 31st. As always, past performance can never
predict future performance. Still, we like to point these numbers out as a way
of explaining our management style. We concentrate our efforts to build
portfolios in a manner to reduce downside risk.
The second quarter of calendar 2003 proved among the best for stocks in recent
memory. As conservative long-term investors, we should not expect a repeat of
that performance. Still, selective opportunities continue to present themselves
we feel confident our slow and steady approach should continue to provide long-
term benefits.
Finally, we have formally added both funds to the NASDAQ listing. The ticker of
the Unrestricted Series is BUNRX and the ticker of the Western New York Series
is BWNYX. We did this because shareholders wanted to follow the funds on the
web.
We wish to thank our shareholders for expressing their confidence in us and
wish you continued good fortune in the coming year.
Best Regards,
Bullfinch Fund, Inc.
Christopher Carosa, CTFA
President
UNRESTRICTED SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF
JUNE 30, 2003
TOGETHER WITH
INDEPENDENT AUDITORS' REPORT
BONN, SHORTSLEEVE & GRAY, LLP
Certified Public Accountants
300 Linden Oaks Office Park
Rochester, NY 14625
Tel 585-381-9660
Fax 585-248-0603
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of Bullfinch Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of the of
the Unrestricted Series (a series within Bullfinch Fund, Inc.), including the
schedules of investments in securities, as of June 30, 2003, 2002 and 2001 and
the related statements of operations, changes in net assets and the financial
highlights for the years 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 generally accepted auditing
standards in the United states of America. 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 June 30, 2003, 2002 and 2001
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 the
Unrestricted Series (a series within Bullfinch Fund, Inc.) as of June 30, 2003,
2002 and 2001, and the results of its operations, the change in its net assets
and the financial highlights for the years ended in conformity with generally
accepted accounting principles in the United States of America.
BONN, SHORTSLEEVE & GRAY, LLP
Rochester, New York
August 13, 2003
UNRESTRICTED SERIES
(A SERIES WITHIN THE BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2003
ASSETS
Investments in securities, at fair value,
identified cost of $1,794,813 $2,106,339
Cash 436,199
Accrued interest and dividends 4,644
Prepaid expenses 908
----------
Total assets $2,548,090
==========
LIABILITIES
Accounts payable $ 10,054
----------
NET ASSETS
Net assets (equivalent to $12.69 based on
199,957.769 shares of stock outstanding) $2,538,036
==========
COMPOSITION OF NET ASSETS
Shares of common stock $2,328,019
Accumulated net investment loss (101,509)
Net unrealized appreciation on investments 311,526
----------
Net asset at June 30, 2003 $2,538,036
==========
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 2003
Historical
Common Stocks - 100% Shares Cost Value
Banking and Finance - 11.9%
BISYS Group Inc. 4,200 $ 71,814 $ 77,154
FIserv, Inc. 1,500 21,566 53,490
National City Corp 2,200 55,431 71,962
Trustco Bank Corp NY 4,400 47,300 48,664
------- -------
196,111 251,270
Computers - Software - 9.7%
Microsoft Corp. 2,000 55,519 51,280
Oracle 5,500 72,365 66,055
Synopsis, Inc. 1,400 60,178 86,702
------- -------
188,062 204,037
Leisure & Recreational - 8.5%
Activision Inc. 5,250 52,605 67,568
Hasbro Inc. 1,400 16,142 24,486
Mattel Inc. 4,550 52,852 86,086
------- -------
121,599 178,140
Semiconductors - 7.1%
Intel Corp 4,050 97,800 84,281
Motorola Inc. 6,900 80,335 65,067
------- -------
178,135 149,348
Electrical Equipment - 7.0%
Corning Inc. 10,400 98,443 76,856
General Electric Co. 2,450 64,576 70,266
------- -------
163,019 147,122
Utilities - Natural Resources - 6.9%
Chesapeake Utilities 3,100 57,194 70,060
Empire District Electric Co 1,250 21,665 27,188
NiSource Inc 2,500 46,325 47,500
------- -------
125,184 144,748
Pharmaceuticals - 5.4%
Mylan Laboratories Inc. 3,300 58,654 114,741
Computers - Hardware - 4.9%
Dell Corp 3,250 80,811 103,480
Food & Beverages - 4.1%
Conagra Foods, Inc. 3,700 81,123 87,320
Tobacco Products - 4.0%
Altria Group 1,850 40,459 84,064
Computer - Networking - 4.0%
Cisco Systems, Inc. 5,000 93,661 83,950
Medical Products and Supplies -3.9%
Serologicals Corp. 6,000 79,732 81,600
Real Estate & Related - 3.8%
First American Financial 3,000 55,075 79,050
Retail - General - 3.6%
Dollar General 4,200 58,388 76,692
Manufacturing - 3.6%
Lincoln Electric Holdings, Inc. 3,700 70,781 75,554
Medical Services - 3.6%
Impath, Inc. 5,300 94,119 74,783
Office Equipment - 3.4%
Diebold, Inc. 1,650 41,069 71,363
Instruments - 2.5%
Checkpoint Systems, Inc. 3,700 32,717 52,355
Commercial Services - 1.4%
Paychex, Inc. 1,000 27,638 29,390
Shoes & Leather - 0.7%
Wolverine World Wide 900 8,476 17,334
---------- ----------
Total investments in securities $1,794,813 $2,106,339
========== ==========
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2003, 2002 AND 2001
2003 2002 2001
INVESTMENT INCOME:
Dividends $ 29,972 $ 28,180 $ 21,239
EXPENSES:
Management fees 23,194 20,086 15,099
Legal and professional 7,465 6,375 6,063
Directors' fees 1,000 850 800
Amortization 0 337 581
Fidelity bond 1,106 863 491
Taxes 300 550 150
Registration fees 511 1,080 1,029
Bank service charges 1,533 1,422 1,000
Due and subscriptions 752 750 83
----------------------------------
Total expense 35,861 32,313 25,296
----------------------------------
Net investment income (loss) (5,889) (4,133) (4,057)
----------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions (50,233) (1,324) (463)
Unrealized appreciation (depreciation)
during the period 231,445 (191,148) 216,095
----------------------------------
Net gain (loss) on investments 181,212 (192,472) 215,632
----------------------------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $175,323 $(196,605) $211,575
==================================
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 2003, 2002 AND 2001
2003 2002 2001
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (5,889) $ (4,133) $ (4,057)
Net realized gain (loss) from
security transactions (50,233) (1,324) (463)
Net change in unrealized appreciation
(depreciation) of investments 231,445 (191,148) 216,095
-----------------------------------
Increase (decrease) in net assets resulting
from operations 175,323 (196,605) 211,575
CAPITAL SHARE TRANSACTION:
Sales 443,128 796,385 254,526
Redemptions (76,112) (119,805) (38,032)
-----------------------------------
Total capital share transactions 367,016 676,580 216,494
-----------------------------------
Increase in net assets 542,339 479,975 428,069
NET ASSETS:
Beginning of period 1,995,697 1,515,722 1,087,653
-----------------------------------
End of period $2,538,036 $1,995,697 $1,515,722
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE 1: NATURE OF ACTIVITIES
The Unrestricted Series (the "Series") is a series of the Bullfinch Fund, Inc.
(the "Fund"), which was organized as a Maryland corporation registered under
the Investment Company Act of 1940 as an open-end non-diversified management
investment company.
The investment objective of the Series is to seek conservative long-term growth
in capital. The Adviser seeks to achieve this objective by using an asset mix
consisting primarily of exchange listed securities and over-the-counter common
stocks as well as U.S. Government securities maturing within five years.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash - Cash consists of amounts deposited in money market accounts and is not
federally insured. The Series has not experienced any losses on such amounts
and believes it is not exposed to any significant credit risk on cash.
Security Valuation - The Series records its investments at fair value.
Securities traded on national securities exchanges or the NASDAQ National
Market System are valued daily at the closing prices of the securities on those
exchanges and securities traded on over-the-counter markets are valued daily at
the closing bid prices. Short-term and money market securities are valued at
amortized cost which approximates market value.
Federal Income Taxes - It is the policy of the Fund to comply with the
requirements of the Internal Revenue Code (the "Code") applicable to regulated
investment companies to distribute all of its taxable income to its
shareholders. In addition, the Fund intends to distribute an amount sufficient
to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision for federal income taxes or excise taxes has been made.
Organization Expenses - Organization expenses have been amortized over a 60-
month period.
Distributions to Shareholders - The Series made a distribution of its net
investment income and net realized capital gains to its shareholders on
June 28, 2000, in the form of stock dividends equal to 8,561.674 shares of
stock.
Other - The Series follows industry practice and records security transactions
on the trade date. The specific identification method is used for determining
gains or losses for financial statement and income tax purposes. Dividend
income is recorded on the ex-dividend date and interest income is recorded on
the accrual basis.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
NOTE 3: INVESTMENTS
For the year ended June 30, 2003, the Series purchased $613,488 of common
stock. During the same period, the Series sold $155,491 of common stock
For the year ended June 30, 2002, the Series purchased $681,874 of common
stock. During the same period, the Series sold $439,466 of common stock.
For the year ended June 30, 2001, the Series purchased $456,897 of common
stock. During the same period, the Series sold $322,569 of common stock.
At June 30, 2003, the gross unrealized appreciation for all securities
totaled $401,497 and the gross unrealized depreciation for all securities
totaled $89,971, or a net unrealized appreciation of $311,526. The aggregate
cost of securities for federal income tax purposes at June 30, 2003 was
$1,794,813.
At June 30, 2002, the gross unrealized appreciation for all securities
totaled $302,040 and the gross unrealized depreciation for all securities
totaled $222,175, or a net unrealized appreciation of $79,865. The aggregate
cost of securities for federal income tax purposes at June 30, 2002 was
$1,387,048.
At June 30, 2001, the gross unrealized appreciation for all securities
totaled $383,335 and the gross unrealized depreciation for all securities
totaled $124,990, or a net unrealized appreciation of $258,345. The aggregate
cost of securities for federal income tax purposes at June 30, 2001 was
$1,153,324.
NOTE 4: INVESTMENT ADVISORY AGREEMENT
Carosa, Stanton & DePaolo Asset Management, LLC serves as investment advisor to
the Fund pursuant to an investment advisory agreement which was approved by the
Fund's board of directors. Carosa, Stanton & DePaolo Asset Management, LLC is a
Registered Investment Adviser under the Investment Advisers Act of 1940. The
Investment advisory agreement provides that Carosa, Stanton & DePaolo Asset
Management, LLC, subject to the supervision and approval of the Fund's board of
directors, is responsible for the day-to-day management of the Series'
portfolio, which includes selecting the investments and handling its business
affairs.
As compensation for its services to the Fund, the investment advisor receives
monthly compensation at an annual rate of 1.25% on the first $1 million of
daily average net assets and 1% on that portion of the daily average net assets
in excess of $1 million. These fees will be reduced by any sub-transfer agent
fees incurred by the Fund.
Carosa, Stanton & DePaolo Asset Management, LLC has agreed to forego sufficient
investment advisory fees to limit total expenses of the Fund to 2% of the first
$10 million in average assets and 1.5% of the next $20 million in average
assets.
NOTE 5: CAPITAL SHARE TRANSACTIONS
The Fund has authorized 10,000,000 shares of common stock at $0.01 par value
per share. Each share has equal dividend, distribution and liquidation rights.
Transactions in capital stock of the Series were as follows:
Shares Amount
Balance at 07/01/00 96,072.588 $ 1,065,820
----------- -----------
Shares sold during 2001 22,285.066 254,526
Shares redeemed during 2001 (3,214.621) (35,922)
----------- -----------
Balance at 07/01/01 115,143.033 1,284,424
----------- -----------
Shares sold during 2002 62,800.889 796,385
Shares redeemed during 2002 (10,370.596) (119,805)
----------- -----------
Balance at 07/01/02 167,573.326 1,961,004
----------- -----------
Shares sold during 2003 38,498.370 443,127
Shares redeemed during 2003 (6,113.927) (76,112)
----------- -----------
Balance at 7/1/03 199,957.769 $ 2,328,019
=========== ===========
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS
(SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED JUNE 30, 2003, 2002 AND 2001
2003 2002 2001
NET ASSET VALUE, beginning of period $11.91 $13.16 $11.32
----------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.06) (0.06) (0.03)
Net gain (loss) on securities both
realized and unrealized 0.84 (1.19) 1.87
----------------------------
Total from investment operations 0.78 (1.25) 1.84
----------------------------
DISTRIBUTIONS
Dividends 0.00 0.00 0.00
----------------------------
NET ASSET VALUE, end of period 12.69 11.91 13.16
============================
NET ASSETS, end of period $2,538,036 $1,995,698 $1,515,723
Actual Actual Actual
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.7 % 1.8 % 2.0 %
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS (0.3)% (0.3)% (0.3)%
PORTFOLIO TURNOVER RATE 7.5 % 25.10 % 25.6 %
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF
JUNE 30, 2003
TOGETHER WITH
INDEPENDENT AUDITORS' REPORT
BONN, SHORTSLEEVE & GRAY, LLP
Certified Public Accountants
300 Linden Oaks Office Park
Rochester, NY 14625
Tel 585-381-9660
Fax 585-248-0603
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of Bullfinch Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of the of
the Western New York Series (a series within Bullfinch Fund, Inc.), including
the schedules of investments in securities, as of June 30, 2003, 2002 and 2001,
and the related statements of operations, changes in net assets and the
financial highlights for the years 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 generally accepted auditing
standards in the United States of America. 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 June 30, 2003, 2002 and 2001 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 the
Western New York Series (a series within the Bullfinch Fund, Inc.) as June 30,
2003, 2002 and 2001, and the results of its operations, the change in its net
assets and the financial highlights for the years ended in conformity with
generally accepted accounting principles in the United States of America.
BONN, SHORTSLEEVE & GRAY, LLP
Rochester, New York
August 13, 2003
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2003
ASSETS
Investments in securities, at fair value,
identified cost of $326,856 $ 334,399
Cash 34,033
Accrued interest and dividends 821
Prepaid expenses 695
Due from investment advisor 49
---------
Total assets $ 369,997
=========
LIABILITIES
Accounts payable $ 2,678
NET ASSETS
Net assets (equivalent to $9.80 per shares based
on 37,481.608 shares of stock outstanding) $ 367,319
=========
COMPOSITION OF NET ASSETS
Shares of common stock $ 366,694
Accumulated net investment loss (6,918)
Net unrealized (appreciation) on investments 7,543
---------
Net assets at June 30, 2003 $ 367,319
=========
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 2003
Historical
Common Stocks - 100% Shares Cost Value
Electrical Equipment - 14.7%
Corning Inc. 3,000 $ 25,450 $ 22,170
General Electric Co. 350 9,305 10,038
Ultralife Batteries, Inc. 1,700 6,766 17,000
-------- --------
41,521 49,208
Railroads - 9.2%
Genesee & Wyoming Class A 1,500 8,519 30,855
Commercial Services - 7.0%
Harris Interactive, Inc. 2,600 8,918 16,796
Paychex, Inc. 225 4,413 6,613
-------- --------
13,331 23,409
Leisure & Recreational - 5.7%
Mattel Inc. 1,000 14,245 18,920
Computers - Networking - 5.3%
Cisco Systems, Inc. 700 8,724 11,753
Performance Technologies, Inc. 800 8,633 5,840
-------- --------
17,357 17,593
Real Estate & Related - 4.5%
Home Properties of New York, Inc. 200 5,624 7,048
Sovran Self Storage 250 6,892 7,875
-------- --------
12,516 14,923
Aerospace - 4.1%
Moog, Inc. Class A 150 2,930 5,213
Northrop Grumman 100 2,536 8,629
-------- --------
5,466 13,842
Computers - Software - 3.9%
Oracle 900 12,070 10,809
Veramark Tech Inc. 1,500 9,782 2,250
-------- --------
21,853 13,059
Utilities - Natural Resources - 3.9%
National Fuel Gas 500 11,250 13,025
Food & Beverages - 3.8%
Constellation Brands, Inc. 400 5,017 12,560
Retail - General - 3.5%
Dollar General 650 9,065 11,869
Computers - Hardware - 3.3%
Dell Corporation 350 10,735 11,144
Photographic Equipment and Suppliers 3.3%
Eastman Kodak 400 11,746 10,940
Automotive - 3.1%
Delphi Corporation 1,200 13,548 10,356
Airlines - 3.1%
Southwest Airlines Co. 600 11,658 10,320
Steel -3.1%
Gilbraltar Steel Corp 500 8,975 10,280
Semiconductors - 3.0%
Motorola, Inc. 1,050 15,919 9,902
Tobacco Products - 2.6%
Altria Group 200 4,892 9,088
Metal Fabrication & Hardware 2.6%
Graham Corp. 1,000 8,828 8,600
Chemical - 2.1%
CPAC, Inc. 1,200 7,236 7,001
Computers - Distributors - 2.0%
Ingram Micro 600 10,909 6,600
Office Equipment - 1.4%
Xerox Corp 450 12,058 4,766
Packaging & Containers - 1.4%
Mod Pac Corporation 602 3,461 4,003
Mod Pac Corporation Class B 113 0 751
-------- --------
3,461 4,754
Electronics Components - 1.4%
Astronics Corp Cl. B 226 0 733
Astronics Corp 1,205 7,026 3,910
-------- --------
7,026 4,643
Furniture - 0.4%
Bush Industries, Inc. 500 9,473 1,500
Industrial Services - 0.4%
American Locker Group, Inc. 100 636 1,405
Industrial Materials - 0.4%
Servotronics, Inc. 600 5,624 1,356
Telecommunications - 0.4%
Choice One Communications 4,000 8,840 1,280
Computers - Services - 0.3%
Computer Task Group, Inc. 300 7,064 852
Machinery - 0.1%
Columbus McKinnon Corp 100 2,344 241
Broadcasting -0.0%
Adelphia Communications Corp. 400 5,744 108
--------- ---------
Total investments in securities $ 326,856 $ 334,399
========= =========
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 2003, 2002, AND 2001
2003 2002 2001
INVESTMENT INCOME:
Dividends $ 4,590 $ 4,698 $ 4,814
EXPENSES:
Management fees 3,716 4,020 3,364
Reimbursement of management fees (1,000) (1,741) (2,123)
Legal and professional 1,275 1,290 1,062
Directors' fees 1,000 850 800
Amortization 17 666 778
Fidelity bond 190 216 490
Taxes 300 350 150
Registration fees 200 200 369
Bank service charges (964) 405 475
Due and subscriptions 250 250 31
-------- -------- --------
Total expense 4,984 6,506 5,396
-------- -------- --------
Net investment income (loss) (394) (1,808) (582)
-------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions (5,051) (1,242) (160)
Unrealized appreciation (depreciation)
during the period 28,678 (32,377) 10,535
-------- -------- --------
Net gain (loss) on investments 23,627 (33,619) 10,375
-------- -------- --------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 23,233 $ (35,427) $ 9,793
========= ========= ========
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 2003, 2002, AND 2001
2003 2002 2001
DECREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (394) $ (1,808) $ (582)
Net realized gain (loss) from
security transactions (5,051) (1,242) (160)
Net change in unrealized appreciation
(depreciation) of investments 28,678 (32,377) 10,535
-------- --------- ---------
Increase (decrease) in net assets resulting
from operations 23,233 (35,427) 9,793
CAPITAL SHARE TRANSACTIONS:
Sales 2,000 81,125 34,500
Redemptions 0 (2,503) 0
-------- --------- ---------
Total capital share transactions 2,000 78,622 34,500
-------- --------- ---------
Increase in net assets 25,233 43,195 44,293
NET ASSETS:
Beginning of period 342,086 298,891 254,598
--------- --------- ---------
End of period $ 367,319 $ 342,086 $ 298,891
========= ========= =========
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE 1: NATURE OF ACTIVITIES
The Western New York Series (the "Series") is a series of the Bullfinch Fund,
Inc. (the "Fund"), which was organized as a Maryland corporation registered
under the Investment Company Act of 1940 as an open-ended non-diversified
management investment company.
The investment objective of the Series is to seek capital appreciation through
the investment in common stock of companies with an important economic presence
in the Greater Western New York Region. The Adviser seeks to achieve this
objective by using an asset mix consisting primarily of exchange listed
securities and over-the-counter common stocks as well as U.S. Government
securities maturing within five years.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash - Cash consists of amounts deposited in money market accounts and is not
federally insured. The Series has not experienced any losses on such amounts
and believes it is not exposed to any significant credit risk on cash.
Security Valuation - The Series records its investments at fair value.
Securities traded on national securities exchanges or the NASDAQ National
Market System are valued daily at the closing prices of the securities on those
exchanges and securities traded on over-the-counter markets are valued daily at
the closing bid prices. Short-term and money market securities are valued at
amortized cost, which approximates market value.
Federal Income Taxes - It is the policy of the Fund to comply with the
requirements of the Internal Revenue Code (the "Code") applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. In addition, the Fund intends to distribute an amount sufficient
to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision for federal income taxes or excise taxes has been made.
Organization Expenses - Organization expenses have been amortized over a 60-
month period.
Other - The Series follows industry practice and records security transactions
on the trade date. The specific identification method is used for determining
gains or losses for financial statement and income tax purposes. Dividend
income is recorded on the ex-dividend date and interest income is recorded on
the accrual basis.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
NOTE 3: INVESTMENTS
For the year ended June 30, 2003, the Series purchased $34,755 of common stock.
During the same period, the Series sold $24,170 of common stock.
For the year ended June 30, 2002, the Series purchased $134,659 of common
stock. During the same period, the Series sold $90,260 of common stock.
For the year ended June 30, 2001, the Series purchased $51,980 of common stock.
During the same period, the Series sold $23,513 of common stock.
At June 30, 2003, the gross unrealized appreciation for all securities totaled
$82,696 and the gross unrealized depreciation for all securities totaled
$75,154, or a net unrealized appreciation of $7,543. The aggregate cost of
securities for federal income tax purposes at June 30, 2003 was $326,856.
At June 30, 2002, the gross unrealized appreciation for all securities totaled
$71,689 and the gross unrealized depreciation for all securities totaled
$92,825, or a net unrealized depreciation of $21,136. The aggregate cost of
securities for federal income tax purposes at June 30, 2002 was $321,346.
At June 30, 2001, the gross unrealized appreciation for all securities totaled
$74,731 and the gross unrealized depreciation for all securities totaled
$64,306, or a net unrealized appreciation of $10,245. The aggregate cost of
securities for federal income tax purposes at June 30, 2001 was $280,038.
NOTE 4: INVESTMENT ADVISORY AGREEMENT
Carosa, Stanton & DePaolo Asset Management, LLC serves as investment advisor to
the Fund pursuant to an investment advisory agreement which was approved by the
Fund's board of directors. Carosa, Stanton & DePaolo Asset Management, LLC is
a Registered Investment Adviser under the Investment Advisers Act of 1940. The
Investment advisory agreement provides that Carosa, Stanton & DePaolo Asset
Management, LLC, subject to the supervision and approval of the Fund's board of
directors, is responsible for the day-to-day management of the Fund's
portfolio, which includes selecting investments and handling its business
affairs.
As compensation for its services to the Fund, the investment advisor receives
monthly compensation at an annual rate of 1.25% on the first $1 million of
daily average net assets and 1% on that portion of the daily average net assets
in excess of $1 million. These fees will be reduced by any sub-transfer agent
fees incurred by the Fund. Carosa, Stanton & DePaolo Asset Management, LLC has
agreed to forego sufficient investment advisory fees to limit total expenses
of the Fund to 2% of the first $10 million in average assets and 1.5% of the
next $20 million in average assets.
NOTE 5: CAPITAL SHARE TRANSACTIONS
The Fund has authorized 10,000,000 shares of common stock at $0.01 par value
per share. Each share has equal dividend, distribution and liquidation rights.
Transactions in capital stock of the Series were as follows:
Shares Amount
Balance at 7/1/00 25,941.445 $ 251,572
---------- ---------
Shares sold during 2001 3,596.766 34,500
Shares redeemed during 2001 0.000 0
---------- ---------
Balance at 7/1/01 29,538.211 286,072
---------- ---------
Shares sold during 2002 7,943.301 81,125
Shares redeemed during 2002 (242.034) (2,503)
---------- ---------
Balance at 7/1/02 37,239.478 364,694
---------- ---------
Shares sold during 2003 242.130 2,000
Shares redeemed during 2003 0.000 0
---------- ---------
Balance at 7/1/03 37,481.608 $ 366,694
========== =========
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS
(SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED JUNE 30, 2003, 2002, AND 2001
2003 2002 2001
NET ASSET VALUE, beginning of period $ 9.19 $10.12 $ 9.81
------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.03) (0.34) 0.00
Net gain (loss) on securities both
realized and unrealized 0.64 (0.59) 0.31
------ ------ ------
Total from investment operations 0.61 (0.93) 0.31
DISTRIBUTIONS
Dividends 0.00 0.00 0.00
------ ------ ------
NET ASSET VALUE, end of period 9.80 9.19 10.12
====== ====== ======
NET ASSETS, end of period $ 367,319 $ 342,086 $ 298,891
========= ========= =========
Actual Actual Actual
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.6 % 2.0 % 2.0 %
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 0.0 % (1.4)% 0.1 %
PORTFOLIO TURNOVER RATE 7.7 % 28.0 % 8.7 %
The accompanying notes are an integral part of these statements.
Item 2 - Not applicable (not answered for periods ending before July 15,
2003 and only annually for funds)
Item 3 - Not applicable (not answered for periods ending before July 15,
2003 and only annually for funds)
Item 4 - Disclose annually only (not answered for periods ending before
December 15, 2003)
Item 5 - Not applicable
Item 6 - Reserved
Item 7 - Not applicable
Item 8 - Reserved
Item 9(a) - The registrant's principal executive and principal financial
officer has determined that the registrant's disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment
Company Act of 1940) are effective based on the evaluation of
these controls and procedures are effective as of a date within 90
days prior to the filing date of this report.
Item 9(b) - There were no changes in the registrant's internal control
over financial reporting (as defined in Rule 30a-3(d) under the
Investment Company Act of 1940) that occurred during the
registrant's last fiscal half-year (the registrant's second fiscal
half-year in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10 - Exhibits
(a)(1)- Not applicable.
(a)(2)- Attach certifications pursuant to Section 302 of the Sarbanes-Oxley Act.
Attached hereto.
(b) - Attach certification pursuant to Section 906 of the Sarbanes-Oxley Act.
Attached hereto.
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.
Bullfinch Fund, Inc.
By: /s/ Christopher Carosa
----------------------------------------
Christopher Carosa,
President of Bullfinch Fund, Inc.
Date: August 28, 2003
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/ Christopher Carosa
----------------------------------------
Christopher Carosa,
President of Bullfinch Fund, Inc.
Date: August 20, 2003
EXHIBIT INDEX
(a) Certification of principal executive officer and principal
financial officer as required by Rule 30a-2 under the Investment
Company Act of 1940.
(b) Certification of principal executive officer and principal
financial officer as required by Section 906 of the Sarbanes-Oxley
Act of 2002.