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: 06/30/05
Date of reporting period: 07/01/04 - 6/30/05
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, 2005
Management's Discussion of Fund Performance
August 19, 2005
Dear Fellow Shareholders:
We are very proud to present the June 2005 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.
As we suggested in last year's letter, the bulk of calendar year 2004's
investment returns occurred as election uncertainty went away. Indeed, much
of the gains both Series experienced last year occurred in the post-election
environment. While we, like the market, experienced a dip in the first quarter
of calendar 2005, we used that opportunity to reposition the portfolio. This
appears to have benefited the shareholders, judging from the positive results
we've experienced since the market's bottom in mid-April.
Our portfolios' fell behind in the first quarter because we did not have
significant exposure in the oil services or home building industries. Those
familiar with our investment style should not be surprised by this, because,
for essentially the same reasons, we avoided the high flying internet sector
in the late 1990's. Both the oil services industry and the home building
industry may have some gains left to take, but we feel the downside risk is
too high given our generally conservative investment discipline.
The biggest factors that may impact performance over the next year include both
the actions of the Fed and the state of the national economy. Unlike last year,
there is no major event (e.g., the presidential election) which has caused
anticipation within the market. Rather, it is the momentum of the interest rate
hikes, oil prices and the general growth in the economy. To whit, despite the
run-up in the market since mid-April, the markets are barely above where they
began the year. Contrast this to both the significant earnings growth and the
much stronger economy that we have today versus the end of last year. The
market may be waiting to get a better handle on the Fed's balancing act between
the continued raising of interest rates and the growth in GNP. The former
remains historically low while the latter remains historically high.
As a result, we feel a focus on stock picking, not guessing what the market as
a whole will do, remains the best way to manage a conservative, long-term
investment portfolio. In this manner, any discontinuous bad news (like a
terrorist attack) may cause stock prices to unnaturally dip, giving us an
opportunity to buy attractive companies. At the same time, a rising market
often creates momentary spikes of euphoria within certain industries or in
certain stocks. This behavioral response can give us a selling opportunity.
Be sure to track both our funds on your favorite internet site. The ticker of
the Unrestricted Series is BUNRX and the ticker of the Western New York Series
is BWNYX. Our listing makes it easier for our growing statewide shareholder
base to follow our Fund.
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, 2005
TOGETHER WITH
INDEPENDENT AUDITORS' REPORT
ROTENBERG & CO.
Certified Public Accountants
1870 Winton Road South
Suite 200
Rochester, NY 14618
Tel 585-295-2400
Fax 585-295-2150
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of Bullfinch Fund, Inc.:
We have audited the accompanying statements of assets and liabilities of the
Unrestricted Series (a series within the Bullfinch Fund, Inc.), including the
schedules of investments in securities, as of June 30, 2005, and the related
statements of operations, changes in net assets and the financial highlights
for the years ended June 30, 2005 and 2004. 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 audit.
We conducted our audit in accordance with The Public Company Accounting
Oversight Board Standards (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of June 30, 2005 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 audit provides 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 the Bullfinch Fund, Inc.) as of June 30,
2005, and the results of its operations, the change in its net assets and the
financial highlights for the years ended June 30, 2005 and 2004, in conformity
with generally accepted accounting principles in the United States of America.
The financial statements of the Unrestricted Series (a series within the
Bullfinch Fund, Inc.) as of June 30, 2003 were audited by other auditors whose
report dated August 13, 2003 expressed an unqualified opinion on those
statements. The financial highlights of the Unrestricted Series (a series
within the Bullfinch Fund, Inc.) as of June 30, 2002 and 2001 were audited by
other auditors whose reports dated August 15, 2002 and August 9, 2001
respectively expressed an unqualified opinion on those statements.
/s/ Rotenberg & Company, LLP
Rotenberg & Company, LLP
Rochester, New York
July 27, 2005
UNRESTRICTED SERIES
(A SERIES WITHIN THE BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $3,247,717 $3,911,466
Cash 187,442
Accrued Interest and Dividends 4,839
Prepaid Expenses 5,358
----------
Total Assets $4,109,105
==========
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts Payable $ 14,491
NET ASSETS
Net Assets (Equivalent to $13.97/share based
On 293,023.811 shares of stock outstanding) 4,094,614
----------
Total Liabilities and Net Assets $4,109,105
==========
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
10,000,000 Shares Authorized,
293,023.811 Shares Outstanding $3,644,886
Accumulated Net Investment Loss (214,022)
Net Unrealized Appreciation on Investments 663,750
----------
Net Assets at June 30, 2005 $4,094,614
==========
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, 2005
Historical
Common Stocks - 100% Shares Cost Value
Banking and Finance - 11.4%
BISYS Group Inc. 6,300 $ 83,378 $ 94,122
Fiserv, Inc. 3,000 75,229 128,670
National City Corp. 2,200 55,431 75,064
New York Community Bancorp 5,000 105,030 90,600
Trustco Bank Corp NY 4,400 47,300 57,464
--------- ---------
366,368 445,920
Computers - Software - 8.5%
Microsoft Corp. 4,600 116,304 114,264
Oracle 11,000 119,262 145,200
Synopsis, Inc. 4,300 99,496 71,681
--------- ---------
335,062 331,145
Pharmaceuticals - 7.6%
Mylan Laboratories Inc. 5,400 110,246 103,896
PPD, Inc. 4,100 106,313 192,126
--------- ---------
216,559 296,022
Insurance - 6.3%
AmerUs Group Co. CL A 3,000 91,169 144,150
Gallagher Arthur J & Co. 3,700 114,240 100,381
--------- ---------
205,409 244,531
Electrical Equipment - 6.0%
Corning Inc. 9,000 71,358 149,580
General Electric Co. 2,450 64,576 84,892
--------- ---------
135,934 234,472
Food & Beverages - 5.2%
Conagra Foods, Inc. 4,100 89,953 94,956
Sensient Technologies 5,300 110,829 109,233
--------- ---------
200,782 204,189
Commercial Services, Inc. - 5.2%
Affiliated Computer Services Inc. 2,700 134,417 137,970
Paychex, Inc. 2,000 64,090 65,040
-------- ---------
198,507 203,010
Instruments - 4.8%
Checkpoint Systems, Inc. 3,700 32,717 65,490
Tektronix 5,200 117,010 121,004
--------- ---------
149,727 186,494
Automotive - 4.6%
Delphi Corporation 14,600 150,364 67,890
Pep Boys - Manny, Moe & Jack 8,400 122,032 113,736
--------- ---------
272,396 181,626
Utilities - Natural Resources - 4.0%
Chesapeake Utilities 3,100 57,194 94,798
NiSource Inc. 2,500 46,325 61,825
--------- ---------
103,519 156,623
Apparel - 3.8%
VF Corp 2,600 110,625 148,772
Shoes & Leather - 3.7%
Genesco Inc. 3,900 59,257 144,651
Retail - General - 3.3%
Dollar General 6,300 95,632 128,268
Computers - Hardware - 3.3%
Dell Corp 3,250 79,273 128,245
Manufacturing - 3.1%
Lincoln Electric Holdings 3,700 70,781 122,655
Retail - Specialty - 3.1%
Christopher & Banks Corp. 6,700 110,081 122,342
Paper & Related Products - 3.0%
Avery Dennison Corp. 2,200 114,733 116,512
Medical Products and Supplies - 2.9%
Polymedica Corporation 3,200 83,194 114,112
Leisure & Recreational - 2.9%
Hasbro Inc. 1,400 16,142 29,106
Mattel Inc. 4,550 52,852 83,265
-------- ---------
68,994 112,371
Office Equipment - 2.8%
Xerox Corp. 8,000 118,582 110,320
Semiconductors - 2.7%
Intel Corp 4,100 96,931 106,682
Computer - Networking - 1.8%
Cisco Systems, Inc. 3,800 55,371 72,504
------------ -----------
Total Investments in Securities $ 3,247,717 $ 3,911,466
=========== ===========
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, 2005 2004 AND 2003
2005 2004 2003
INVESTMENT INCOME:
Dividends $ 70,818 $ 45,850 $ 29,972
EXPENSES:
Management fees 41,125 35,915 23,194
Legal and Professional 10,562 9,048 7,465
Director's Fees 1,200 1,200 1,000
D&O/E&O 4,482 - -
Fidelity Bond 936 1,400 1,106
Taxes 455 450 300
Telephone 289 226 -
Registration Fees 1,134 1,024 511
Custodian Fees 2,107 2,055 1,533
Dues and Subscriptions 1,698 2,162 752
----------------------------------
Total expense 63,988 53,480 35,861
----------------------------------
Net investment income (loss) 6,830 (7,630) (5,889)
----------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions 147,001 102,654 (50,233)
Unrealized appreciation (depreciation)
during the period (45,245) 397,468 231,445
----------------------------------
Net gain (loss) on investments 101,756 500,122 181,212
----------------------------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 108,586 $ 492,492 $ 175,323
==================================
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, 2005, 2004 AND 2003
2005 2004 2003
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ 6,830 $ (7,630) $ (5,889)
Net realized gain (loss) from
security transactions 147,001 102,654 (50,233)
Net change in unrealized appreciation
(depreciation) of investments (45,245) 397,468 231,445
-------------------------------------
Increase (decrease) in net assets resulting
from operations 108,586 492,492 175,323
CAPITAL SHARE TRANSACTION:
Sales 473,324 1,026,695 443,128
Redemptions (419,589) (124,930) (76,112)
-------------------------------------
Total capital share transactions 53,735 901,765 367,016
-------------------------------------
Increase in net assets 162,321 1,394,257 542,339
NET ASSETS:
Beginning of period 3,932,293 2,538,036 1,995,697
-------------------------------------
End of period $4,094,614 $3,932,293 $2,538,036
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE A - SCOPE OF BUSINESS
The Unrestricted Series (the "Series") is a series within 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 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 B - 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.
Income Taxes - It is the policy of the Fund to comply with the requirements of
Subchapter M 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.
Distributions to Shareholders - Distributions to shareholders are recorded on
the ex-dividend date. The Series made a distribution of its long term capital
gains of $17,260 to its shareholders on December 29, 2004, in the form of stock
dividends equal to 1,137.790 shares of stock. The Series made a distribution of
its long term capital gains of $234,457 and ordinary income of $6,615 to its
shareholders on June 29, 2005 in the form of stock dividends equal to
17,183.492 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 and 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.
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 amounts reported in the financial statements
and accompanying notes. Actual results can differ from those estimates.
NOTE C - INVESTMENTS
For the year ended June 30, 2005, the Series purchased $853,288 of common
stock. During the same period, the Series sold $709,374 of common stock.
For the year ended June 30, 2004, the Series purchased $1,807,912 of common
stock. During the same period, the Series sold $748,577 of common stock.
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.
At June 30, 2005, the gross unrealized appreciation for all securities totaled
$828,871 and the gross unrealized depreciation for all securities totaled
$165,121, or a net unrealized appreciation of $663,750. The aggregate cost of
securities for federal income tax purposes at June 30, 2005 was $3,247,717.
At June 30, 2004, the gross unrealized appreciation for all securities totaled
$784,259 and the gross unrealized depreciation for all securities totaled
$75,265, or a net unrealized appreciation of $708,994. The aggregate cost of
securities for federal income tax purposes at June 30, 2004 was $2,956,801.
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.
NOTE D - 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.
During the fiscal years ended June 30, 2005, 2004 and 2003, the fund paid
investment advisory fees of $41,125, $35,915 and $23,194, respectively.
On June 30, 2005, the fund had $3,542 included in accounts payable, as owed to
Carosa, Stanton & DePaolo Asset Management, LLC.
NOTE E - 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 June 30, 2002 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 June 30, 2003 199,957.769 $ 2,328,019
----------- -----------
Shares sold during 2004 72,954.003 1,026,695
Shares Redeemed During 2004 (8,718.448) (124,930)
Reinvestment of Distributions,
June 29, 2004 7,145.311 103,035
----------- -----------
Balance at June 30, 2004 271,338.635 $ 3,332,819
----------- -----------
Shares sold during 2005 32,575.497 473,324
Shares Redeemed During 2005 (29,211.603) (419,589)
Reinvestment of Distributions,
December 29, 2004 1,137.790 17,260
Reinvestment of Distributions,
June 29, 2005 17,183.492 241,072
----------- -----------
Balance at June 30, 2005 293,023.811 $ 3,644,886
=========== ===========
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS
(SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED JUNE 30, 2005, 2004, 2003, 2002, and 2001
2005 2004 2003 2002 2001
NET ASSET VALUE,
beginning of period $14.49 $12.69 $11.91 $13.16 $11.32
---------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS
Net investment
income (loss) 0.02 (0.03) (0.06) (0.06) (0.03)
Net gain (loss) on
securities both
realized and
unrealized (1.47) 1.44 0.84 (1.19) 1.87
---------------------------------------------------
Total from
investment operations (1.45) 1.41 0.78 (1.25) 1.84
---------------------------------------------------
DISTRIBUTIONS
Dividends 0.93 0.39 0.00 0.00 0.00
---------------------------------------------------
NET ASSET VALUE,
end of period $13.97 $14.49 $12.69 $11.91 $13.16
===================================================
NET ASSETS,
end of period $4,094,614 $3,932,293 $2,538,036 $1,995,697 $1,515,723
Actual Actual Actual Actual Actual
RATIO OF EXPENSES TO
AVERAGE NET ASSETS* 1.6% 1.6% 1.7% 1.8% 2.0%
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET
ASSETS* 0.2% (0.2)% (0.3)% (0.3)% (0.3)%
PORTFOLIO TURNOVER RATE* 18.2% 22.6% 7.5% 25.1% 25.6%
TOTAL RETURN 2.8% 17.4% 6.6% (9.5)% 16.3%
* Per share amounts calculated using the average shares method
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, 2005
TOGETHER WITH
INDEPENDENT AUDITORS' REPORT
ROTENBERG & CO.
Certified Public Accountants
1870 Winton Road South
Suite 200
Rochester, NY 14618
Tel 585-295-2400
Fax 585-295-2150
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of Bullfinch Fund, Inc.:
We have audited the accompanying statements of assets and liabilities of the
Western New York Series (a series within the Bullfinch Fund, Inc.), including
the schedules of investments in securities, as of June 30, 2005, and the
related statements of operations, changes in net assets and the financial
highlights for the years ended June 30, 2005 and 2004. 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 audit.
We conducted our audit in accordance with The Public Company Accounting
Oversight Board Standards (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of June 30, 2005 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 audit provides 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 of June
30, 2005, and the results of its operations, the change in its net assets and
the financial highlights for the years ended June 30, 2005 and 2004, in
conformity with generally accepted accounting principles in the United States
of America.
The financial statements of the Western New York Series (a series within the
Bullfinch Fund, Inc.) as of June 30, 2003 were audited by other auditors whose
report dated August 13, 2003 expressed an unqualified opinion on those
statements. The financial highlights of the Western New York Series(a series
within the Bullfinch Fund, Inc.) as of June 30, 2002 and 2001 were audited by
other auditors whose reports dated August 15, 2002 and August 9, 2001
respectively expressed an unqualified opinion on those statements.
/s/ Rotenberg & Company, LLP
Rotenberg & Company, LLP
Rochester, New York
July 27, 2005
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005
ASSETS
Investments in securities, at fair value,
identified cost of $337,278 $ 472,460
Cash 76,003
Accrued interest and dividends 513
Prepaid expenses 906
Due from investment advisor 1,302
---------
Total assets $ 551,184
=========
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts payable $ 2,933
NET ASSETS
Net assets (equivalent to $12.88 per share based
on 42,573.698 shares of stock outstanding) 548,251
---------
Total Liabilities and Net Assets $ 551,184
=========
COMPOSITION OF NET ASSETS
Shares of common Stock - Par Value $.01;
10,000,000 Shares Authorized,
42,573.698 Shares Outstanding $ 428,729
Accumulated net investment loss (15,661)
Net unrealized appreciation on investments 135,183
---------
Net assets at June 30, 2005 $ 548,251
=========
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, 2005
Historical
Common Stocks - 100% Shares Cost Value
Electrical Equipment - 17.2%
Corning, Inc. 2,500 $ 15,652 $ 41,550
General Electric 350 9,305 12,128
Ultralife Batteries, Inc. 1,700 6,766 27,455
-------- --------
31,723 81,133
Automotive - 7.9%
Delphi Corporation 2,000 20,506 9,300
Monro Muffler Brake Inc. 500 9,880 14,755
Pep Boys - Manny, Moe & Jack 1,000 14,532 13,540
------- --------
44,918 37,595
Commercial Services - 5.8%
Harris Interactive, Inc. 2,600 8,918 12,662
Paychex, Inc. 450 11,885 14,634
-------- --------
20,803 27,296
Metal Fabrication & Hardware - 5.7%
Graham Corp. 1,000 8,828 26,850
Railroads - 5.2%
Genesee & Wyoming Class A 900 3,783 24,489
Food & Beverages - 5.0%
Constellation Brands 800 5,018 23,600
Aerospace - 4.6%
Moog, Inc. Class A 337 2,926 10,612
Northrop Grunmman 200 2,536 11,050
-------- --------
5,462 21,662
Real Estate & Related - 4.2%
Home Properties of New York, Inc. 200 5,624 8,604
Sovran Self Storage 250 6,892 11,365
-------- --------
12,516 19,969
Leisure & Recreational - 3.9%
Mattel, Inc. 1,000 14,245 18,300
Computers - Software - 3.8%
Oracle 1,300 16,642 17,160
Veramark Tech, Inc. 1,050 6,181 882
-------- --------
22,823 18,042
Retail - Specialty - 3.5%
Christopher & Banks 900 15,565 16,434
Office Equipment - 3.2%
Xerox Corp 1,100 18,570 15,169
Utilities - Natural Resources - 3.1%
National Fuel Gas 500 11,250 14,455
Steel - 2.9%
Gilbraltar Steel Corp. 750 8,975 13,845
Computers - Hardware - 2.9%
Dell Corporation 350 10,734 13,811
Computers - Services - 2.8%
Computer Task Group, Inc. 3,700 15,799 13,357
Retail - General - 2.8%
Dollar General 650 9,065 13,234
Electronic Components - 2.7%
Astronics Corp 1,431 7,065 12,951
Airlines - 2.5%
Southwest Airlines Co. 850 15,105 11,840
Packaging and Containers - 2.5%
Mod Pac Corporation 715 3,461 11,726
Photographic Equipment and Suppliers - 2.3%
Eastman Kodak 400 11,746 10,740
Computers - Distributors - 2.0%
Ingram Micro 600 10,909 9,396
Medical Products & Supplies - 1.8%
Wilson Greatbatch Technologies 350 12,783 8,365
Computers - Networking - 1.4%
Performance Technologies, Inc. 1,200 12,851 6,636
Machinery - 0.2%
Columbus McKinnon Corp. 100 2,344 1,095
Industrial Materials - 0.1%
Servotronics, Inc. 100 937 470
--------- ---------
Total Investments in Securities $ 337,278 $ 472,460
========= =========
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 2005, 2004, AND 2003
2005 2004 2003
INVESTMENT INCOME:
Dividends $ 5,710 $ 4,786 $ 4,590
EXPENSES:
Management fees 6,265 5,591 3,716
Reimbursement of Management Fees (1,302) (1,767) (1,000)
Legal and Professional 1,224 1,049 1,275
Director's Fees 1,200 1,200 1,000
Amortization - - 17
D&O/E&O 498 - -
Fidelity Bond 104 155 190
Taxes 433 250 300
Telephone 289 226 -
Registration Fees 200 270 200
Custodian Fees 99 705 (964)
Dues and Subscriptions 898 1,362 250
-------- -------- --------
Total expense 9,908 9,041 4,984
-------- -------- --------
Net investment income (loss) (4,198) (4,255) (394)
-------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions (155) (136) (5,051)
Unrealized appreciation (depreciation)
during the period 32,113 95,527 28,678
-------- -------- --------
Net gain (loss) on investments 31,958 95,391 23,627
-------- -------- --------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 27,760 $ 91,136 $ 23,233
========= ========= =========
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, 2005, 2004, AND 2003
2005 2004 2003
DECREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (4,198) $(4,255) $ (394)
Net realized gain (loss) from
security transactions (155) (136) (5,051)
Net change in unrealized appreciation
(depreciation) of investments 32,113 95,527 28,678
-------- --------- ---------
Increase (decrease) in net assets resulting
from operations 27,760 91,136 23,233
CAPITAL SHARE TRANSACTIONS:
Sales 34,779 41,948 2,000
Redemptions (4,870) (9,822) -
-------- --------- ---------
Total capital share transactions 29,909 32,126 2,000
-------- --------- ---------
Increase in net assets 57,669 123,262 25,233
NET ASSETS:
Beginning of period 490,582 367,320 342,087
--------- --------- ---------
End of period $ 548,251 $ 490,582 $ 367,320
========= ========= =========
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, 2005
NOTE A - SCOPE OF BUSINESS
The Western New York Series (the "Series") is a series within 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 B - 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.
Income Taxes - It is the policy of the Fund to comply with the requirements of
Subchapter M 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.
Distributions to Shareholders - Distributions paid to shareholders are recorded
on the ex-dividend date. There were no distributions to shareholders during the
fiscal years ended June 30, 2005, 2004 or 2003.
Other - The Series follows industry practice and records security transactions
on the trade date. The specific identification method is used for determining
gains and 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.
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 amounts reported in the financial statements
and accompanying notes. Actual results can differ those estimates.
NOTE C - INVESTMENTS
For the year ended June 30, 2005, the Series purchased $54,053 of common stock.
During the same period, the Series sold $23,356 of common stock.
For the year ended June 30, 2004, the Series purchased $50,274 of common stock.
During the same period, the Series sold $70,284 of common stock.
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.
At June 30, 2005, the gross unrealized appreciation for all securities totaled
$176,655 and the gross unrealized depreciation for all securities totaled
$41,472, or a net unrealized appreciation of $135,183. The aggregate cost of
securities for federal income tax purposes at June 30, 2005 was $337,278.
At June 30, 2004, the gross unrealized appreciation for all securities totaled
$132,970 and the gross unrealized depreciation for all securities totaled
$29,900, or a net unrealized appreciation of $103,070. The aggregate cost of
securities for federal income tax purposes at June 30, 2004 was $306,734.
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 $7,542. The aggregate cost of
securities for federal income tax purposes at June 30, 2003 was $326,856.
NOTE D - 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.
During the fiscal years ended June 30, 2005, 2004 and 2003, the fund paid
investment advisory fees of $4,963, $3,824 and $2,716, respectively.
On June 30, 2005 the fund had $554 included in accounts payable, as owed to
Carosa, Stanton and DePaolo Asset Management, LLC.
NOTE E - 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 June 30, 2002 37,239.478 364,694
---------- ---------
Shares sold during 2003 242.130 2,000
Shares redeemed during 2003 - -
---------- ---------
Balance at June 30, 2003 37,481.608 $ 366,694
---------- ---------
Shares sold during 2004 3,460.239 41,948
Shares redeemed during 2004 (786.365) (9,822)
---------- ---------
Balance at June 30, 2004 40,155.482 $ 398,820
---------- ---------
Shares sold during 2005 2,801.149 34,779
Shares redeemed during 2005 (382.933) (4,870)
---------- ---------
Balance at June 30, 2005 42,573.698 $ 428,729
========== =========
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS
(SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED JUNE 30, 2005, 2004, 2003, 2002, and 2001
2005 2004 2003 2002 2001
NET ASSET VALUE,
beginning of period $12.22 $9.80 $9.19 $10.12 $9.81
------ ------ ------ ------ ------
INCOME FROM
INVESTMENT OPERATIONS
Net investment
income (loss) (0.10) (0.11) (0.03) (0.34) 0.00
Net gain (loss) on
securities both
realized and unrealized 0.76 2.53 0.64 (0.59) 0.31
------ ------ ------ ------- ------
Total from
investment operations .66 2.42 0.61 (0.93) 0.31
DISTRIBUTIONS
Dividends - - - - -
------ ------ ------ ------- ------
NET ASSET VALUE,
end of period $12.88 $12.22 $9.80 $9.19 $10.12
====== ====== ====== ====== ======
NET ASSETS,
end of period $548,251 $490,582 $367,320 $342,086 $298,891
========= ========= ========= ======== ========
Actual Actual Actual Actual Actual
RATIO OF EXPENSES TO
AVERAGE NET ASSETS* 2.0% 2.0% 1.6% 2.0% 2.0%
RATIO OF EXPENSES TO
AVERAGE NET ASSETS
BEFORE REIMBURSEMENT* 2.2% 2.4% 2.3% 2.6% 2.8%
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET
ASSETS* (0.8)% (1.0)% 0.0% (1.4)% 0.1%
PORTFOLIO TURNOVER RATE* 4.6% 11.3% 7.7% 28.0% 8.7%
TOTAL RETURN 5.4% 24.7% 6.6% (9.2)% 3.2%
* Per share amounts calculated using the average shares method
The accompanying notes are an integral part of these statements.
ADDITIONAL INFORMATION
EXPENSE TABLE BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE ANNUALIZED EXPENSES
PAID
1/1/05 6/30/05 EXPENSE RATIO DURING
PERIOD+
- -----------------------------------------------------------------------------
ACTUAL
Unrestricted Series $1,000.00 $976.98 1.6% $7.84
Western New York Series 1,000.00 969.88 2.0% $9.77
HYPOTHETICAL++
Unrestricted Series 1,000.00 1,017.07 1.6% $8.00
Western New York Series 1,000.00 1,015.08 2.0% $9.99
+ Expenses are equal to each Series' annualized expense ratio multiplied by
the average account value over the period, multiplied by the number of
days (181) in the most recent fiscal half-year, then divided by 365.
++ Assumes annual return of 5% before expenses.
All mutual funds have operating expenses. As a shareholder of the Fund, you
incur operating expenses including investment advisory fees, regulatory fees
and other Fund expenses. Such expenses, which are deducted from the
Fund's gross income, directly reduce the investment return of the Fund. The
Fund's expenses are expressed as a percentage of its average net assets. This
figure is known as the expense ratio. The Expense Table is intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period (January 1, 2005 to June 30, 2005).
The Expense Table illustrates your Fund's costs in two ways.
o ACTUAL EXPENSES. This section helps you to estimate the actual expenses
after fee waivers that you paid over the period. The "Ending Account
Value" shown is derived from the Fund's actual return, and "Expenses Paid
During Period" shows the dollar amount that would have been paid by an
investor who started with $1,000 in the Fund.
o HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. This section is intended to
help you compare your Fund's costs with those of other mutual funds. It
is based on your Fund's actual expense ratio and assumes that your Fund
had an annual return of 5% before expenses during the period shown. In
this case - because the return used is not your Fund's actual return -
the results may not be used to estimate your actual ending account value
or expenses you paid during this period. The example is useful in making
comparisons between your Fund and other funds because the Securities and
Exchange Commission (the "SEC") requires all mutual funds to calculate
expenses based on an annual 5% return. You can assess your Fund's costs by
comparing this hypothetical example with the hypothetical examples that
appear in shareholder reports of other funds.
BOARD OF DIRECTORS INFORMATION
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Directors. Information pertaining to the Directors of the
Fund are set forth below. The Fund's SAI includes additional information about
the Fund's Directors, and is available without charge, by calling
(585) 624-3150 or 1-888-BULLFINCH. Each director may be contacted by writing
to the director c/o Bullfinch Fund, Inc. 1370 Pittsford Mendon Road, Mendon,
New York 14506
INDEPENDENT DIRECTORS
The directors and officers of the Fund are:
NAME, AGE POSITON(S) TERM OF OFFICE PRINCIPLE NUMBER OF OTHER
ADDRESS HELD WITH AND LENGTH OF OCCUPATION(S) PORTFOLIOS DIRECTORSHIPS
FUND TIME SERVED DURING PAST IN FUND HELD BY
5 YEARS COMPLEX DIRECTOR
OVERSEEN BY
DIRECTOR
- -----------------------------------------------------------------------------------------------------
INTERESTED PERSONS*
Christopher Carosa, 45 President; Term of Office: President, Founder 2 N/A
2 Lantern Lane Director; N/A Carosa, Stanton &
Honeoye Falls, Chairman of Length of Time DePaolo Asset
New York 14472 Board; Chief Served: Management, LLC;
Compliance Since 1997 President, Director
Officer and Chairman of the
Board, Bullfinch Fund, Inc.
Gordon Stanton, 46 Vice-President; Term of Office: Vice-President, Founder 2 N/A
17 East 96 St. Director; N/A Carosa, Stanton &
Apt 7C Length of Time DePaolo Asset
New York, Served: Management, LLC;
NY 10128 Since 1997 Vice-President,
and Director,
Bullfinch Fund, Inc.;
Associate, Brown Harris
Stevens Residential
Terrance B. Mulhern, 43 Vice-President Term of Office: Executive Vice-President 2 N/A
169 Church Street N/A Carosa, Stanton &
Victor, Length of Time DePaolo Asset
NY 14564 Served: Management, LLC;
Since 2003 Vice-President,
Bullfinch Fund, Inc.;
Senior Vice-President,
Clover Capital;
Bradford L. McAdam, 49 Vice-President Term of Office: Vice-President 2 N/A
7109 Chili-Riga Ctr Rd N/A Carosa, Stanton &
Churchville, Length of Time DePaolo Asset
NY 14428 Served: Management, LLC;
Since 1998 Vice-President,
Bullfinch Fund, Inc.
Thomas S. Carroll, 46 Vice-President Term of Office: Vice-President 2 N/A
47 Chippenham Drive N/A Carosa, Stanton &
Penfield, Length of Time DePaolo Asset
NY 14526 Served: Management, LLC;
Since 2005 Vice-President,
Bullfinch Fund, Inc.
Manager, Studio Sales
Pottery Supply
Betsy Kay Carosa, 45 Corporate Term of Office: Office Manager 2 N/A
2 Lantern Lane Secretary N/A Carosa, Stanton &
Honeoye Falls, Length of Time DePaolo Asset
NY 14472 Served: Management, LLC;
Since 1997 Corporate Secretary,
Bullfinch Fund, Inc.
</Table>
INDEPENDENT DIRECTORS
<Table>
Jan Dombrowski, MD, 45 Director; Term of Office: President 2 N/A
925 Cheese Factory Rd Audit N/A MD Oncology PLLC
Honeoye Falls, Committee Length of Time
NY 14472 Served:
Since 2002
John P. Lamberton, 45 Director Term of Office: Founder, General Partner 2 N/A
143-49 38th Ave, 3rd Floor N/A Cape Bojador Capital
Flushing, Length of Time Management; Managing
NY 11354 Served: Director, HSBC
Since 2003 Securities
William E.J. Martin, 45 Director Term of Office: Director of Sales 2 N/A
4410 Woodlawn Ave. N N/A Aecon Buildings, Inc.;
Seattle, Length of Time Project Manager,
WA 98103 Served: American Home Builders;
Since 1997 Senior Project Manager,
Mego Construction
Thomas Midney, 44 Director Term of Office: Manufacturing Dir Specialist 2 N/A
13 Burr Road N/A Bigelow Tea;
Bloomfield, Length of Time Manufacturing Dev,
CT 06002 Served: HydrogenSource;
Since 1997 Manufacturing Dir,
NQ Environmental;
Director of Product
Planning, Goss &
Deleeuw
Michael J. Morris, 44 Director Term of Office: Actuary 2 N/A
72 Lovely Street Audit N/A United Healthcare
Unionville, Committee Length of Time
CT 06085 Served:
Since 1997
Michael W. Reynolds, 45 Director Term of Office: Vice-President 2 N/A
105 Dorchester Road Audit N/A Quinlan & Company
Buffalo, Committee Length of Time
NY 14213 Served:
Since 2000
</Table>
PROXY VOTING GUIDELINES
Carosa, Stanton & DePaolo Asset Management, LLC, the Fund's Investment
Adviser, is responsible for exercising the voting rights associated with the
securities held by the Fund. A description of the policies and procedures used
by the Adviser in fulfilling this responsibility is available without charge,
upon request, by calling (555) 624-3150 or 1-888-BULLFINCH.
QUARTERLY FILING OF PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission (SEC) for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at
the SEC's Public Reference Room in Washington DC. Information on the operation
of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
DISCLOSURE REGARDING THE BOARD OF DIRECTORS' APPROVAL
OF THE INVESTMENT ADVISORY CONTRACT
At the Board's Annual Meeting, the independent directors of the Board met
separately to discuss the Adviser and reported the conclusions to the Board. In
determining whether to renew the Management and Investment Advisory Agreements
between the Fund and Carosa, Stanton & DePaolo Asset Management, LLC, (the
Adviser), the Board of Directors requested, and the Adviser provided
information relevant to the Board's consideration. Among the factors the Board
considered were:
1) Nature, extent and quality of service provided by the Adviser - the
independent directed noted the unprecedented access they have to the
adviser, the quick responsiveness to requests and the positive review
following Mr. Lamberton's 4 day visit all show the high quality of service
provided by the Adviser;
2) The overall performance of the Series' relative to the performance of
other funds in the Funds' peer group and its benchmark - the independent
directors noted the Series' long-term performance exceeded the benchmarks
and were in-line with or better than it peers (as reported by Lipper).
3) Extent to which economies of scale would be realized as a fund group - the
independent directors noted the expense ratio of each Series has gone down
as assets have increased and that the advisery fee schedule includes
breakpoints and that the Fund is not subject to sales charges or Rule
12b-1 fees.
4) Do fee levels reflect economies of scale for the benefit of fund investors
- the independent directors noted the adviser has already agreed to cap
the fees at 2% and reduce that cap to 1.5% when a Series' assets exceed
$10 million.
5) For the above comparison and fees and services, the board relied on
material provided by the adviser, and, because much of this material came
from third party sources, the board did not obtain information independent
of the investment adviser.
Based upon their review and consideration of these factors and other matters
deemed relevant, the Board concluded that the terms of the Investment
Management Agreements are fair and reasonable and the Board voted to renew the
Agreements with the following stipulations:
1) The Board would randomly select holding or transaction data at each
quarter's meeting and ask the adviser to comment on those particular
stocks;
2) At the annual board meeting, the adviser will provide market cap and
equity sector reports so the independent directors can monitor the Fund
for potential style drift;
3) The Fund is specifically identify Mr. Carosa as the sole "Portfolio
Manager" within all filings and third party reports. The independent
directors noted that one of the attractions of the adviser is the depth of
experience on the research side and the fact that there exists more than
sufficient back-up experience should Mr. Carosa become incapacitated.
Item 2 - CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, its principal financial
officer, principal accounting officer, controller, as well as
any other officers and persons providing similar functions. This
code of ethics is included as Exhibit 11(a)(1).
(b) During the period covered by this report, no amendments were made to
the provisions of the code of ethics
(c) During the period covered by this report, no implicit or explicit
waivers to the provisions of the code of ethics were granted.
Item 3 - AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors determined that the registrant
does not have an Audit Committee member who possesses all of the
attributes required to be an "audit committee financial expert" as
defined in instruction 2(b) of Item 3 of Form N-CSR. It was the
consensus of the board that, although no one individual Audit
Committee member meets the technical definition of an audit
committee financial expert, the Committee has sufficient expertise
collectively among its members to effectively discharge its duties
and that the Committee will engage additional expertise if needed.
Item 4 - PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The registrant has engaged its principal accountant to perform
audit services. "Audit services" refer to performing an audit of
the registrant's annual financial statements or services that are
normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years.
"Audit-related services" refer to the assurance and related
services by the principal accountant that are reasonably related
to the performance of the audit. "Tax services" refer to
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning. The following table
details the aggregate fees billed for each of the last two fiscal
years for audit fees, audit-related fees, tax fees and other fees
by the principal accountant. Since the accounting fees were
approved by the Board of Directors in total, the principal
accountant has provided an estimate of the split between audit and
preparation of the tax filings.
06/30/2005 06/30/2004
Audit Fees $8,500 $8,000
Audit-Related Fees $ 0 $ 0
Tax Fees $2,000 $2,000
All Other Fees $ 0 $ 0
The Audit Committee of the registrant's Board of Directors
recommends a principal accountant to perform audit services for
the registrant. Each year, the registrant's Board of Directors
vote to approve or disapprove the principal accountant recommended
by the Audit Committee for the following year's accounting work.
Item 5 - AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end investment companies.
Item 6 - Reserved
Item 7 - DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end investment companies.
Item 8 - PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANIES.
Not applicable to open-end investment companies.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
Item 10(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 10(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 11 - EXHIBITS.
(a)(1) Code of Ethics - referred to in Item 2 is attached hereto.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002 are attached hereto.
(b) Certifications pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 are 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 19, 2005
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 19, 2005