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: 06/30/06
Date of reporting period: 07/01/05 - 6/30/06
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, 2006
Management's Discussion of Fund Performance
August 15, 2006
Dear Fellow Shareholders:
We are very proud to present the June 2006 Annual Report of the Bullfinch Fund,
Inc. This report contains the audited financial statements for both the
Unrestricted Series and the Greater Western New York Series.
The first half of 2006 has been the tale of two quarters. Amazingly enough, the
fundamental economic news has not changed - either during the first six months
of the year or for the last two years. The twin worries of rising oil prices
and rising interest rates continue to erode confidence in the market. After a
respite in the first three months, this quarter has seen the onset of a fear of
inflation to complete the trilogy of anxieties. So, while the first quarter was
the best performing quarter in years, the month of May was the worst month in
decades, leaving us with a flat market.
Our portfolios' jumped ahead in the first quarter because we did not have
significant exposure in the oil services industry. As oil became an issue again
in the second quarter, performance in the portfolios suffered, although this
downside was muted somewhat by a large cash position we started to build in the
first quarter as several stocks hit our valuation targets.
Let's go back and review our terrible trio and whether they represent true
harbingers or merely a wall of worry on which we may climb.
Rising oil prices have now been with us since the onset of the War on Terror.
What started as psychological concerns (i.e., will the supply of Oil from the
mid-east be cut off?) have morphed into economic concerns (i.e., the growing
economies in China and the third world have increased demand while supplies
have not kept up). The reality: either the global economy will absorb a higher
average cost for oil or it will fall into recession. In neither scenario do we
see a sustainable acceleration in oil prices.
And whither rising interest rates? It's clear we stand closer to the end of
rising rates. Still, the yield curve remains flat to slightly inverted. Cash
and money market investments are, for the first time in a long time, again a
viable asset in a portfolio's asset allocation strategy. Indeed, because of the
flattish yield curve, money markets may be more attractive in the short-term
than other, more traditional, fixed income investments. Yet, there's pressure
to normalize the yield curve. That requires either short interest rates to fall
(i.e., the Fed lowering rates - unlikely in the near-term) or long interest
rates to rise (signaling a concern over inflation or a strong economy). Take
your pick. In either case, investors are wise to keep their fixed-income
durations short.
So, what about inflation? Sure, it's been rising for some time now, but the
feeling is it has crossed the threshold. The consensus is not clear, though.
The worst case scenario: The Fed is too aggressive and causes the economy to
slow down too fast just as real inflation appears. This will likely lead to a
sell-off in stocks that might take several years to recover from.
And the good news is? Corporate earnings continue to grow faster than stock
prices. We see this in the overall P/E of the market. While stock prices have
remained flat to slightly up, P/E's have come down considerably. As a result,
we feel our focus on stock picking remains the best way to manage a
conservative, long-term portfolio.
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, 2006
TOGETHER WITH INDEPENDENT AUDITOR'S REPORT
ROTENBERG & CO.
Certified Public Accountants
1870 Winton Road South
Suite 200
Rochester, NY 14618
Tel 585-295-2400
Fax 585-295-2150
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors of Bullfinch Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
Bullfinch Fund, Inc. - Unrestricted Series (a series within the Bullfinch Fund,
Inc.), including the schedule of investments in securities, as of June 30,
2006, and the related statements of operations, changes in net assets, and the
financial highlights for the years then ended June 30, 2006, 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 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 audits to obtain reasonable assurance about whether the
financial statements 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, 2006 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
Bullfinch Fund, Inc. - Unrestricted Series (a series within the Bullfinch Fund,
Inc.) as of June 30, 2006, and the results of its operations, changes in net
assets, and its financial highlights for the years ended June 30, 2006, 2005,
and 2004, in conformity with accounting principles generally accepted in the
United States of America.
The financial highlights of the Unrestricted Series (a series within the
Bullfinch Fund Inc.) as of June 30, 2003 and 2002 were audited by other
auditors whose reports dated August 13, 2003 and August 15, 2002 respectively
expressed an unqualified opinion on those statements.
/s/ Rotenberg & Company, LLP
Rotenberg & Company, LLP
Rochester, New York
July 24, 2006
UNRESTRICTED SERIES
(A SERIES WITHIN THE BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2006
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $2,792,229 $ 3,258,867
Cash 1,246,378
Accrued Interest and Dividends 5,754
Prepaid Expenses 1,826
------------
Total Assets $ 4,512,825
============
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts Payable $ 15,279
------------
NET ASSETS
Net Assets (Equivalent to $13.29 per share based
on 338,474.982 shares of stock outstanding) 4,497,546
------------
Total Liabilities and Net Assets $ 4,512,825
============
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
10,000,000 Shares Authorized,
338,474.982 Shares Outstanding $ 4,269,530
Accumulated Net Investment Loss (238,622)
Net Unrealized Appreciation on Investments 466,638
------------
Net Assets at June 30, 2006 $ 4,497,546
============
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, 2006
Historical
Common Stocks - 100% Shares Cost Value
------ ---- -----
Medical Products and Supplies -11.8%
Biomet Inc. 4,000 $ 144,638 $ 125,160
Johnson & Johnson 2,400 136,714 143,808
Polymedica Corporation 3,200 83,194 115,072
--------- ---------
364,546 384,040
Computers - Software - 10.9%
Microsoft Corp. 6,200 151,626 144,460
Oracle 11,000 119,262 159,390
Synopsis, Inc. 2,800 60,178 52,556
--------- ---------
331,066 356,406
Banking and Finance - 10.9%
Fiserv, Inc. 3,000 75,229 136,080
National City Corp. 2,200 55,431 79,618
New York Community Bancorp 8,500 142,304 140,335
--------- ---------
272,964 356,033
Electrical Equipment - 8.4%
Corning Inc. 5,500 37,840 133,045
General Electric Co. 4,300 125,562 141,728
--------- ---------
163,402 274,773
Insurance - 8.3%
AmerUs Group Co. CL A 3,000 91,169 175,650
Gallagher Arthur J & Co. 3,700 114,240 93,758
--------- ---------
205,409 269,408
Commercial Services, Inc. - 6.8%
Affiliated Computer Services Inc. 2,700 134,417 139,347
Paychex, Inc. 2,000 64,090 77,960
--------- ---------
198,507 217,307
Apparel - 4.6%
VF Corp. 2,200 93,606 149,424
Utilities - Natural Resources - 4.6%
Chesapeake Utilities 3,100 57,194 93,248
NiSource Inc. 2,500 46,325 54,600
--------- ---------
103,519 147,848
Computer - Networking - 3.9%
Cisco Systems, Inc. 3,800 55,371 74,214
Spectralink Corp. 6,100 74,744 53,802
--------- ---------
130,115 128,016
Historical
Common Stocks - 100% Shares Cost Value
------ ---- -----
Paper & Related Products - 3.9%
Avery Dennison Corp. 2,200 $ 114,733 $ 127,732
Office Equipment - 3.4%
Xerox Corp. 8,000 118,582 111,280
Pharmaceuticals -3.3%
Mylan Laboratories Inc. 5,400 110,246 108,000
Automotive - 3.0%
Pep Boys - Manny, Moe & Jack 8,400 122,032 98,532
Consumer Nondurables - 2.8%
Alberto Culver Co. 1,900 82,294 92,568
Retail - General - 2.7%
Dollar General 6,300 95,632 88,074
Instruments - 2.5%
Checkpoint Systems, Inc. 3,700 32,717 82,177
Computers - Hardware - 2.4%
Dell Corp. 3,250 79,273 79,495
Semiconductors - 2.4%
Intel Corp. 4,100 96,931 77,900
Shoes & Leather - 1.8%
Genesco Inc. 1,700 25,830 57,579
Food & Beverages - 1.6%
Sensient Technologies 2,500 50,825 52,275
Total Investments in Securities $ 2,792,229 $ 3,258,867
=========== ===========
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, 2006, 2005 AND 2004
2006 2005 2004
---- ---- ----
INVESTMENT INCOME:
Dividends $ 87,909 $ 70,818 $ 45,850
EXPENSES:
Management fees 46,736 41,125 35,915
Legal and Professional 12,113 10,562 9,048
Director's Fees 1,200 1,200 1,200
D&O/E&O 11,340 4,482 -
Fidelity Bond 936 936 1,400
Taxes 518 455 450
Telephone 234 289 226
Registration Fees 969 1,134 1,024
Custodian Fees 2,751 2,107 2,055
Dues and Subscriptions 1,926 1,698 2,162
--------- -------- --------
Total expense 78,723 63,988 53,480
--------- -------- --------
Net investment income (loss) 9,186 6,830 (7,630)
--------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss)
from securities transactions 236,874 147,001 102,654
Unrealized appreciation
(depreciation) during the period (197,111) (45,245) 397,468
--------- -------- --------
Net gain (loss) on investments 39,763 101,756 500,122
--------- -------- --------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 48,949 $ 108,586 $ 492,492
========= ========= =========
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED JUNE 30, 2006, 2005 AND
2004
2006 2005 2004
---- ---- ----
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ 9,186 $ 6,830 $ (7,630)
Net realized gain (loss)
from security transactions 236,874 147,001 102,654
Net change in unrealized appreciation
(depreciation) of investments (197,111) (45,245) 397,468
------------ ----------- -----------
Increase (decrease) in net assets
resulting from operations 48,949 108,586 492,492
CAPITAL SHARE TRANSACTION:
Sales 535,360 473,324 1,026,695
Redemptions (181,377) (419,589) (124,930)
------------ ----------- -----------
Total capital share transactions 353,983 53,735 901,765
------------ ----------- -----------
Increase in net assets 402,932 162,321 1,394,257
NET ASSETS:
Beginning of period 4,094,614 3,932,293 2,538,036
------------ ----------- -----------
End of period $ 4,497,546 $ 4,094,614 $ 3,932,293
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006
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.
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 $103,035 to its shareholders on June 29, 2004, in the form of stock
dividends equal to 7,145.311 shares of stock. The Series made a distribution
of its long-term capital gains of $17,260 to its shareholders on December 28,
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. The Series made a
distribution of its long term capital gains of $18,898 to its shareholders on
December 28, 2005 in the form of stock dividends equal to 1,338.392 shares of
stock. The Series made a distribution of its long term capital gains of
$242,509 and ordinary income of $9,254 to its shareholders on June 28, 2006 in
the form of stock dividends equal to 19,233.233 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, 2006, the Series purchased $677,002 of common
stock. During the same period, the Series sold $1,369,364 of common stock.
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.
At June 30, 2006, the gross unrealized appreciation for all securities totaled
$603,934 and the gross unrealized depreciation for all securities totaled
$137,296, or a net unrealized appreciation of $466,638. The aggregate cost of
securities for federal income tax purposes at June 30, 2006 was $2,792,229.
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.
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, 2006, 2005 and 2004, the fund paid
investment advisory fees of $46,736, $41,125 and $35,915, respectively.
On June 30, 2006, the fund had $3,878 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, 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 28, 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
Shares sold during 2006 37,416.865 535,360
Shares Redeemed During 2006 (12,537.319) (181,377)
Reinvestment of Distributions,
December 28, 2005 1,338.392 18,898
Reinvestment of Distributions,
June 28, 2006 19,233.233 251,763
Balance at June 30, 2006 338,474.982 $ 4,269,530
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED JUNE 30, 2006, 2005, 2004, 2003, and 2002
<Table>
2006 2005 2004 2003 2002
NET ASSET VALUE, beginning of period $ 13.97 $ 14.49 $ 12.69 $ 11.91 $ 13.16
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.03 0.02 (0.03) (0.06) (0.06)
Net gain (loss) on securities
both realized and unrealized (1.56) (1.47) 1.44 0.84 (1.19)
Total from investment operations (1.53) (1.45) 1.41 0.78 (1.25)
DISTRIBUTIONS
Dividends 0.85 0.93 0.39 0.00 0.00
NET ASSET VALUE, end of period $ 13.29 $ 13.97 $ 14.49 $ 12.69 $ 11.91
NET ASSETS, end of period $4,497,546 $4,094,614 $3,932,293 $2,538,036 $1,995,697
Actual Actual Actual Actual Actual
RATIO OF EXPENSES
TO AVERAGE NET ASSETS* 1.8% 1.6% 1.6% 1.7% 1.8%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* 0.2% 0.2% (0.2)% (0.3)% (0.3)%
PORTFOLIO TURNOVER RATE* 15.3% 18.2% 22.6% 7.5% 25.1%
TOTAL RETURN 1.3% 2.8% 17.4% 6.6% (9.5)%
* Per share amounts calculated using the average shares method
</Table>
The accompanying notes are an integral part of these statements.
GREATER WESTERN NEW YORK SERIES (A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF JUNE 30, 2006
TOGETHER WITH INDEPENDENT AUDITOR'S REPORT
ROTENBERG & CO.
Certified Public Accountants
1870 Winton Road South
Suite 200
Rochester, NY 14618
Tel 585-295-2400
Fax 585-295-2150
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors of Bullfinch Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
Bullfinch Fund, Inc. - Greater Western New York Series (a series within the
Bullfinch Fund, Inc.), including the schedule of investments in securities, as
of June 30, 2006, and the related statements of operations, changes in net
assets, and the financial highlights for the years then ended June 30, 2006,
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
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 audits to obtain reasonable assurance about whether the
financial statements 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, 2006 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
Bullfinch Fund, Inc. - Greater Western New York Series (a series within the
Bullfinch Fund, Inc.) as of June 30, 2006, and the results of its operations,
changes in net assets, and its financial highlights for the years ended June
30, 2006, 2005, and 2004, in conformity with accounting principles generally
accepted in the United States of America.
The financial highlights of the Western New York Series (a series within the
Bullfinch Fund Inc.) as of June 30, 2003 and 2002 were audited by other
auditors whose reports dated August 13, 2003 and August 15, 2002 respectively
expressed an unqualified opinion on those statements.
/s/ Rotenberg & Company, LLP
Rotenberg & Company, LLP
Rochester, New York
July 24, 2006
GREATER WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2006
ASSETS
Investments in securities, at fair value,
identified cost of $373,078 $ 531,478
Cash 99,913
Accrued interest and dividends 801
Prepaid expenses 1,498
Due from investment advisor 620
Total assets $ 634,310
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts payable $ 3,209
NET ASSETS
Net assets (equivalent to $13.27 per share based
on 47,564.952 shares of stock outstanding) 631,101
Total Liabilities and Net Assets $ 634,310
COMPOSITION OF NET ASSETS
Shares of common Stock - Par Value $.01;
10,000,000 Shares Authorized,
47,564.952 Shares Outstanding $ 495,930
Accumulated net investment loss (23,229)
Net unrealized appreciation on investments 158,400
Net assets at June 30, 2006 $ 631,101
The accompanying notes are an integral part of these statements.
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES JUNE 30, 2006
Historical
Common Stocks - 100% Shares Cost Value
------ ---- -----
Medical Products & Supplies - 12.7%
Bausch & Lomb Inc. 600 $ 31,472 $ 29,424
Greatbatch Technologies 850 23,822 20,060
Johnson & Johnson 300 17,108 17,976
-------- ---------
72,402 67,460
Electrical Equipment - 10.8%
Corning, Inc. 700 2,268 16,933
General Electric 550 15,917 18,128
Ultralife Batteries, Inc. 2,200 12,432 22,286
-------- ---------
30,617 57,347
Commercial Services - 6.1%
Harris Interactive, Inc. 2,600 8,918 14,820
Paychex, Inc. 450 11,885 17,541
-------- ---------
20,803 32,361
Railroads - 6.0%
Genesee & Wyoming Class A 900 2,522 31,923
Automotive - 5.3%
Monro Muffler Brake Inc. 500 9,880 16,280
Pep Boys - Manny, Moe & Jack 1,000 14,532 11,730
-------- ---------
24,412 28,010
Aerospace - 4.6%
Moog, Inc. Class A 337 2,926 11,532
Northrop Grumman 200 2,536 12,812
-------- ---------
5,462 24,344
Real Estate & Related - 4.5%
Home Properties Inc. 200 5,624 11,102
Sovran Self Storage 250 6,892 12,697
-------- ---------
12,516 23,799
Metal Fabrication & Hardware - 4.2%
Graham Corp. 1,200 4,804 22,416
Steel - 4.1%
Gilbraltar Industries Inc. 750 8,975 21,750
Electronic Components - 3.9%
Astronics Corp. 1,431 7,065 19,147
IEC Electronics Corp. 2,000 1,530 1,660
-------- ---------
8,595 20,807
Retail - Specialty - 3.8%
Christopher & Banks Corp. 700 12,105 20,300
Food & Beverages - 3.8%
Constellation Brands Inc. 800 5,018 20,000
Historical
Common Stocks - 100% Shares Cost Value
------ ---- -----
Computers - Software - 3.7%
Oracle 1,300 $ 16,642 $ 18,837
Veramark Tech, Inc. 1,050 6,181 735
-------- --------
22,823 19,572
Photographic Equipment and Suppliers - 3.6%
Eastman Kodak 800 20,746 19,024
Computers - Networking - 3.5%
Performance Technologies, Inc. 2,700 23,103 18,630
Computers - Services - 3.5%
Computer Task Group, Inc. 3,700 15,799 18,500
Utilities - Natural Resources - 3.3%
National Fuel Gas Co. 500 11,250 17,570
Office Equipment - 2.9%
Xerox Corp. 1,100 18,571 15,301
Airlines - 2.6%
Southwest Airlines Co. 850 15,105 13,915
Computers - Distributors - 2.0%
Ingram Micro 600 10,909 10,878
Retail - General - 1.7%
Dollar General 650 9,065 9,087
Computers - Hardware - 1.6%
Dell Corporation 350 10,734 8,561
Packaging and Containers - 1.3%
Mod Pac Corporation 715 3,461 7,114
Machinery - 0.4%
Columbus McKinnon Corp. 100 2,344 2,174
Industrial Materials - 0.1%
Servotronics, Inc. 100 937 635
------- -------
Total Investments in Securities $ 373,078 $ 531,478
The accompanying notes are an integral part of these statements.
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2006, 2005, AND 2004
2006 2005 2004
---- ---- ----
INVESTMENT INCOME:
Dividends $ 8,146 $ 5,710 $ 4,786
EXPENSES:
Management fees 7,292 6,265 5,591
Reimbursement of Management Fees (2,520) (1,302) (1,767)
Legal and Professional 1,515 1,224 1,049
Director's Fees 1,200 1,200 1,200
D&O/E&O 1,260 498 -
Fidelity Bond 104 104 155
Taxes 450 433 250
Telephone 234 289 226
Registration Fees 418 200 270
Custodian Fees 186 99 705
Dues and Subscriptions 1,126 898 1,362
--------- --------- ---------
Total expense 11,265 9,908 9,041
--------- --------- ---------
Net investment income (loss) (3,119) (4,198) (4,255)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from
securities transactions 37,655 (155) (136)
Unrealized appreciation (depreciation)
during the period 23,218 32,113 95,527
Net gain (loss) on investments 60,873 31,958 95,391
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 57,754 $ 27,760 $ 91,136
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED JUNE 30, 2006, 2005,
AND 2004
2006 2005 2004
---- ---- ----
DECREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (3,119) $ (4,198) $ (4,255)
Net realized gain (loss) from
security transactions 37,655 (155) (136)
Net change in unrealized appreciation
(depreciation) of investments 23,218 32,113 95,527
Increase (decrease) in net assets
resulting from operations 57,754 27,760 91,136
CAPITAL SHARE TRANSACTIONS:
Sales 28,003 34,779 41,948
Redemptions (2,907) (4,870) (9,822)
Total capital share transactions 25,096 29,909 32,126
Increase in net assets 82,850 57,669 123,262
NET ASSETS:
Beginning of period 548,251 490,582 367,320
End of period $ 631,101 $ 548,251 $ 490,582
The accompanying notes are an integral part of these statements.
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006
NOTE A - SCOPE OF BUSINESS
The Greater 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.
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 $42,105 to its shareholders on June 28, 2006, in the form of stock
dividends equal to 3,243.841 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, 2006, the Series purchased $92,681 of common stock.
During the same period, the Series sold $94,535 of common stock.
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.
At June 30, 2006, the gross unrealized appreciation for all securities totaled
$185,791 and the gross unrealized depreciation for all securities totaled
$27,391, or a net unrealized appreciation of $158,400. The aggregate cost of
securities for federal income tax purposes at June 30, 2006 was $373,078.
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.
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, 2006, 2005 and 2004, the fund paid
investment advisory fees of $4,772, $4,963 and $3,824, respectively.
On June 30, 2006 the fund had $609 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, 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
Shares sold during 2006 1,951.828 28,003
Shares redeemed during 2006 (204.415) (2,907)
Reinvestment of Distributions,
June 28, 2006 3,243.841 42,105
Balance at June 30, 2006 47,564.952 $ 495,930
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED JUNE 30, 2006, 2005, 2004, 2003, and 2002
<Table>
2006 2005 2004 2003 2002
NET ASSET VALUE, beginning of period $ 12.88 $ 12.22 $ 9.80 $ 9.19 $ 10.12
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.07) (0.10) (0.11) (0.03) (0.34)
Net gain (loss) on securities both
realized and unrealized (0.49) 0.76 2.53 0.64 (0.59)
Total from investment operations (0.56) 0.66 2.42 0.61 (0.93)
DISTRIBUTIONS
Dividends .95 - - - -
NET ASSET VALUE, end of period $ 13.27 $ 12.88 $ 12.22 $ 9.80 $ 9.19
NET ASSETS, end of period $631,101 $548,251 $490,582 $367,320 $342,086
Actual Actual Actual Actual Actual
RATIO OF EXPENSES TO
AVERAGE NET ASSETS* 1.9% 2.0% 2.0% 1.6% 2.0%
RATIO OF EXPENSES TO AVERAGE NET ASSETS
BEFORE REIMBURSEMENT* 2.4% 2.2% 2.4% 2.3% 2.6%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* (0.5)% (0.8)% (1.0)% 0.0% (1.4)%
PORTFOLIO TURNOVER RATE* 15.8% 4.6% 11.3% 7.7% 28.0%
TOTAL RETURN 10.6% 5.4% 24.7% 6.6% (9.2)%
</Table>
* 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
ACTUAL 1/1/06 6/30/06 Expense Ratio During Period+
Unrestricted Series $ 1,000.00 $ 1,003.64 1.8% $ 8.94
Greater Western
New York Series 1,000.00 1,071.44 1.9% $ 9.78
HYPOTHETICAL++
Unrestricted Series 1,000.00 1,016.00 1.8% $ 9.00
Greater Western
New York Series 1,000.00 1,015.50 1.9% $ 9.57
+ 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, 2006 to June 30, 2006).
The Expense Table illustrates your Fund's costs in two ways.
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.
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
The directors and officers of the Fund are:
<Table>
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, 46 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, 47 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, 44 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, 50 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, 47 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, 46 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, 46 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, 46 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, 46 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, 45 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, 45 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, 46 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>
^ Mr. Dombrowski resigned from the board effective of the Board's annual
meeting in July 2006.
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 directors noted the unprecedented access they have to the adviser,
the quick responsiveness to requests and the positive review following Mr.
Lamberton's multi-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. The cost of Adviser services and the profits realized by the Adviser - the
independent directors noted the Adviser is not charging a lot and is not
receiving an excessive amount of profit for, among other reasons, its continued
subsidization of the Greater Western New York Series.
4. Extent to which economies of scale would be realized as a fund group - the
independent directors noted the advisery fee schedule includes breakpoints and
that the Fund is not subject to sales charges or Rule 12b-1 fees.
5. 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. The independent directors noted there was an increase in expenses
primarily due to the D&O/E&O costs and expressed a desire for increased direct
marketing in order to further take advantage of economies of scale.
6. For the above comparison of 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.
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.
06/30/2006 06/30/2005
Audit Fees $9,000 $8,500
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 15, 2006
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 15, 2006