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: 3909 Rush Mendon Road
Mendon, New York 14506
Name and address of agent for service: Christopher Carosa, President,
Bullfinch Fund, Inc., 3909 Rush Mendon Road,
Mendon, New York 14506
Mailing address: 3909 Rush Mendon Road
Mendon, New York 14506
Registrant's telephone number, including area code: (585) 624-3150
Date of fiscal year end: 10/31/09
Date of reporting period: 11/01/08 - 10/31/09
Item 1 - Attach shareholder report
BULLFINCH FUND, INC.
3909 Rush Mendon Road
Mendon, New York 14506
(585) 624-3150
1-888-BULLFINCH
(1-888-285-5346)
Annual Report
October 31, 2009
Management's Discussion of Fund Performance
December 22, 2009
Dear Fellow Shareholders:
We are very proud to present the October 2009 Annual Report of Bullfinch Fund,
Inc. This report contains the audited financial statements for both the
Unrestricted Series and the Greater Western New York Series.
Since our last annual report, our country has witnessed one of those once-in-a-
lifetime (we hope) economic slowdowns that has frightened people. In truth,
this downturn has yet to equal that of the early 1980's in terms of
unemployment. The severe drop in the market mimics what we saw in the oil
crisis of the 1970's. You do, however, have to reach back to the Depression
era to find such a drastic fall in the GDP.
Have things turned around? Judging by the run-up in the markets, you might
think so. Still, the markets continue to lag. For example, both the S&P 500
and the Dow Jones remain more than 30% below their October 2009 peaks (based
on the end date of this report). Worse, unemployment continues to increase
and the specter of inflation looms ominously in the shadows.
What's happened over the last six months might suggest to you the secret of
our continuing and ongoing success. While those stocks hit hardest bounced
back, they haven't come close to their previous highs. Meanwhile, as the
dollar has fallen, investors have rushed to both international markets and
commodities. The latter hints we may be witnessing the creation of a short-
term bubble. Why? For one thing, the dollar hasn't fallen as much as the
headlines lead you to believe (it's barely touched the lows of 2008). For
another (and we'll test this during the next foreign crisis), the dollar
still holds some cache as a reserve currency. Finally, commodities have no
fundamental value beyond their use as a natural resource. Case in point:
Gold. Demand for gold represents a purely psychological event. It offers no
intrinsic worth and, once demand for it fades (possibly when investor
psychology cools), you might witness a dramatic fall in its price.
We've always taken a more disciplined, more conservative, approach when
managing our portfolios. We successfully guided the funds through the severe
drop in the markets through the first part of this fiscal year. We did this
by avoiding the investment fad de jour. Sure, those investments made
headlines with their stratospheric performance two years ago, but they made
more headlines with their total collapse. Investors caught in their web
suffered terribly, some even irreparably. We didn't.
Over the past ten years, the Unrestricted Series has an average annual gain
of a positive 3.4% and the Greater Western New York Series has an average
gain of a positive 2.9%. In the same period, the benchmark for each series -
the Value Line Geometric Index - has an average annual loss of negative 3.9%.
While past performance does not guarantee future results, it's important to
consider this: the Unrestricted Series is within 22% of its all-time high and
the Greater Western New York Series is within 29% of its all-time high. The
Value Line Geometric Index remains almost 44% below its all time high.
In general, the Unrestricted Series remains in a temporarily defensive
position and, as a result of this position to not be fully invested in
equities, so the Series may not achieve its objective.
We wish to thank our shareholders for expressing their confidence in us and
wish you continued good fortune.
Best Regards,
Bullfinch Fund, Inc.
Christopher Carosa, CTFA
President
BULLFINCH FUND INC.
PERFORMANCE SUMMARY
The graph below represents the changes in value for an initial $10,000
investment in the BULLFINCH Fund from 7/1/99 to 10/31/09. These changes are
then compared to a $10,000 investment in the Value Line Geometric Index. The
Value LINE Geometric Index (VLG) is an unmanaged index of between 1,600 and
1,700 stocks. Value Line states "The VLG was intended to provide a rough
approximation of how the median stock in the Value Line Universe performed.
The VLG also has appeal to institutional investors as a proxy for the
so-called 'multi-cap' market because it includes large cap, mid cap and small
cap stocks alike." The Fund's returns include the reinvestment of all
dividends, but do not reflect the deduction of taxes that a shareholder would
pay on fund distributions or the redemptions of fund shares. Past performance
is not predictive of future performance. Investment return and principal value
will fluctuate, so that your shares, when redeemed, may be worth more or less
than the original cost.
(GRAPH OMITTED)
Year Bullfinch Fund, Inc. Value Line
Ending Unrestricted Series Geometric Index
$10,000 $10,000
6/30/2000 $10,346 $9,128
6/30/2001 $12,027 $8,950
6/30/2002 $10,885 $7,260
6/30/2003 $11,598 $6,620
6/30/2004 $13,610 $8,435
6/30/2005 $13,990 $8,842
6/30/2006 $14,172 $9,470
6/30/2007 $16,801 $11,048
6/30/2008 $15,037 $8,326
10/31/2008 $12,410 $5,745
10/31/2009 $13,121 $6,293
Annualized
Returns Ending Bullfinch Fund Inc. Value Line
10/31/2009 Unrestricted Series Geometric Index
One - Year + 5.73% + 9.53%
Five - Year - 0.09% - 5.08%
Ten - Year + 3.40% - 3.88%
(GRAPH OMITTED)
Year Bullfinch Fund, Inc. Value Line
Ending Greater Western New York Series Geometric Index
$10,000 $10,000
6/30/2000 $9,735 $9,128
6/30/2001 $10,043 $8,950
6/30/2002 $9,120 $7,260
6/30/2003 $9,725 $6,620
6/30/2004 $12,127 $8,435
6/30/2005 $12,782 $8,842
6/30/2006 $14,132 $9,470
6/30/2007 $15,903 $11,048
6/30/2008 $14,283 $8,326
10/31/2008 $12,191 $5,745
10/31/2009 $11,770 $6,293
Annualized
Returns Ending Bullfinch Fund Inc. Value Line
10/31/2009 Greater WNY Series Geometric Index
One - Year - 3.45% + 9.53%
Five - Year + 0.29% - 5.08%
Ten - Year + 2.87% - 3.88%
UNRESTRICTED SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF OCTOBER 31, 2009
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
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of Bullfinch Fund, Inc. - Unrestricted Series
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, as of October 31, 2009,
the related statements of operations and changes in net assets for the year
ended October 31, 2009, the four months ended October 31, 2008 and the year
ended June 30, 2008, and the financial highlights for the year ended October
31, 2009, the four months ended October 31, 2008, and the years ended June 30,
2008, 2007 and 2006. Bullfinch Fund, Inc. - Unrestricted Series' management
is responsible for these financial statements. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included
confirmation of securities owned as of October 31, 2009 by correspondence
with the custodian. 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
Bullfinch Fund, Inc. - Unrestricted Series (a series within the Bullfinch
Fund, Inc.) as of October 31, 2009, the results of its operations and changes
in net assets for the year ended October 31, 2009, the four months ended
October 31, 2008, and the year ended June 30, 2008, and its financial
highlights for the year ended October 31, 2009, the four months ended October
31, 2008 and the years ended June 30, 2008, 2007 and 2006 in conformity with
accounting principles generally accepted in the United States of America.
/s/ EFP Rotenberg & Co., LLP
EFP Rotenberg & Co., LLP
Rochester, New York
December 23, 2008
UNRESTRICTED SERIES
(A SERIES WITHIN THE BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2009
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $3,098,089 $ 3,171,022
Cash 894,854
Accrued Interest and Dividends 2,534
Prepaid Expenses 6,319
------------
Total Assets $ 4,074,729
============
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 16,165
Unsettled Trades 61,567
NET ASSETS
Net Assets (Equivalent to $11.27 per share based on 354,608.136
shares of stock outstanding) 3,996,997
-------------
Total Liabilities and Net Assets $ 4,074,729
=============
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
10,000,000 Shares Authorized,
354,608.136 Shares Outstanding $ 4,538,431
Accumulated Net Investment Loss (614,367)
Net Unrealized Depreciation on Investments 72,933
------------
Net Assets at October 31, 2009 $ 3,996,997
============
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES OCTOBER 31, 2009
Historical
Common Stocks - 100% Shares Cost Value
--------- --------- ---------
Computers - Software - 10.12%
Microsoft Corp. 6,200 151,626 171,926
Oracle 5,500 56,121 116,050
Synopsis, Inc. 5,600 115,460 123,312
---------- ----------
323,207 411,288
Medical Products and Supplies - 9.06%
Johnson & Johnson 2,400 136,714 141,720
Medtronic Inc. 3,000 147,940 107,100
Stryker Corp. 2,600 125,743 119,600
---------- ----------
410,397 368,420
Semiconductors - 6.53%
Intel Corp. 8,000 143,610 152,880
National Semiconductor Corp. 8,700 143,165 112,578
---------- ----------
286,775 265,458
Electrical Equipment - 6.36%
Corning Inc. 9,700 108,148 141,717
General Electric Co. 8,200 196,783 116,932
---------- ----------
304,931 258,649
Retail - General - 4.37%
Fred's Inc. Class A 15,000 152,560 177,600
Retail - Specialty - 3.90%
Fastenal Co. 4,600 160,395 158,700
Biotech - 3.71%
Meridian Bioscience Inc. 6,800 118,878 150,892
Beverages - 3.47%
Hansen Natural Corp. 3,900 125,589 140,985
Machinery - 3.29%
Idex Corp. 4,700 151,555 133,621
Commercial Services - 3.21%
Paychex, Inc. 4,600 148,135 130,686
Information Services - 3.17%
Interactive Data Corp. 4,900 127,966 128,870
Electronics Components - 2.87%
Tyco Electronics 5,500 149,751 116,875
Historical
Common Stocks - 100% Shares Cost Value
--------- --------- ---------
Pharmaceuticals -2.52%
Mylan Inc. 6,300 87,179 102,312
Food Processing - 2.49%
Sensient Technologies 4,000 80,550 101,160
Utilities - Natural Resources - 2.41%
Chesapeake Utilities Corp. 3,100 57,194 98,208
Computers- Networking - 2.13%
Cisco Systems, Inc. 3,800 55,372 86,678
Insurance - 2.03%
Gallagher Arthur J & Co. 3,700 92,691 82,547
Banking and Finance - 1.70%
Fiserv, Inc. 1,500 53,663 68,805
Metals - Diversified - 1.60%
Carpenter Technology CP 3,100 59,679 65,193
Computers - Hardware - 1.54%
Dell Corp. 4,350 90,055 62,857
Industrial Services - 1.51%
Expeditors Int'l Washington 1,900 61,567 61,218
Schwab Money Market - 22.01% 894,854
Total Investments in Securities $ 3,098,089 $ 4,065,876
=========== ===========
The accompanying notes are an integral part of these statements
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES OCTOBER 31, 2009
Table of Industries
Industry Market Value Percent
- -------- -------------- -------
Banking & Finance $ 68,805 1.70%
Beverages $ 140,985 3.47%
Biotech $ 150,892 3.71%
Commercial Services $ 130,686 3.21%
Computers - Hardware $ 62,857 1.54%
Computers - Networking $ 86,678 2.13%
Computers - Software $ 411,288 10.12%
Electrical Equipment $ 258,649 6.36%
Electronics Components $ 116,875 2.87%
Food Processing $ 101,160 2.49%
Industrial Services $ 61,218 1.51%
Information Services $ 128,870 3.17%
Insurance $ 82,547 2.03%
Machinery $ 133,621 3.29%
Medical Products & Supplies $ 368,420 9.06%
Metals - Diversified $ 65,193 1.60%
Pharmaceuticals $ 102,312 2.52%
Retail - General $ 177,600 4.37%
Retail - Specialty $ 158,700 3.90%
Semiconductors $ 265,458 6.53%
Utilities - Natural Resources $ 98,208 2.41%
-------------- -------
Total Equities $ 3,171,022 77.99%
Cash & Equivalents $ 894,854 22.01%
Total Invested Assets $ 4,065,876 100.00%
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2009, THE FOUR
MONTHS ENDED OCTOBER 31, 2008, AND THE YEAR ENDED JUNE 30, 2008
October October June
2009 2008 2008
--------- --------- ---------
INVESTMENT INCOME:
Dividends $ 71,612 $ 28,411 $ 121,723
EXPENSES:
Management fees 42,876 17,005 53,669
Legal and Professional 12,521 6,164 12,020
Director's Fees 1,200 650 1,200
D&O/E&O 8,684 2,873 7,685
Fidelity Bond 919 919 1,058
Taxes 585 300 309
Telephone 95 0 137
Registration Fees 2,751 118 1,275
Custodian Fees 2,677 2,737 2,865
Dues and Subscriptions 2,034 216 2,484
--------- --------- ---------
Total expense 74,342 30,982 82,702
--------- --------- ---------
Net investment income (loss) (2,730) (2,571) 39,021
--------- --------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss)
from securities transactions (281,373) 0 2,740
Unrealized appreciation (depreciation)
during the period 517,501 (859,412) (598,228)
Net gain (loss) on investments 236,128 (859,412) (595,488)
CHANGE IN NET ASSETS FROM OPERATIONS $233,398 $(861,983) $(556,467)
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEAR ENDED
OCTOBER 31, 2009, THE FOUR MONTHS ENDED OCTOBER 31, 2008,
AND THE YEAR ENDED JUNE 30, 2008
October October June
2009 2008 2008
--------- --------- ---------
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (2,730) $ (2,571) $ 39,021
Net realized gain (loss)
from security transactions (281,373) 0 2,740
Net change in unrealized appreciation
(depreciation) of investments 517,501 (859,412) (598,228)
Change in net assets from operations 233,398 (861,983) (556,467)
CAPITAL SHARE TRANSACTION:
Sales 139,406 325,468 368,454
Redemptions (650,802) (92,678) (71,018)
Total capital share transactions (511,396) 232,790 297,436
Increase in net assets (277,998) (629,193) (259,031)
NET ASSETS:
Beginning of period 4,274,995 4,904,188 5,163,219
End of period $3,996,997 $4,274,995 $4,904,188
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2009
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. As of October 31, 2009 the Series has capital loss carryforwards
of $281,373 which expire in eight years.
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 $86,821 and ordinary income of $22,790 to its shareholders on
December 26, 2007 in the form of stock dividends equal to 7,735.411 shares of
stock. The Series made a distribution of its ordinary income of $14,355 to its
shareholders on June 27, 2008 in the form of stock dividends equal to
1,104.207 shares of stock. The Series made a distribution of its ordinary
income of $7,748 to its shareholders on December 30, 2008 in the form of
stock dividends equal to 779.456 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.
Subsequent events were evaluated through December 23, 2009, the date these
financial statements were available for issue.
NOTE C - INVESTMENTS
For the year ended October 31, 2009, the Series purchased $656,031 of
common stock. During the same period, the Series sold $950,748 of common stock.
For the four months ended October 31, 2008, the Series purchased $509,741
of common stock. During the same period, the Series sold $0 of common stock.
For the year ended June 30, 2008, the Series purchased $1,509,753 of
common stock. During the same period, the Series sold $1,275,745 of common
stock.
At October 31, 2009, the gross unrealized appreciation for all securities
totaled $337,999 and the gross unrealized depreciation for all securities
totaled $265,066 or a net unrealized appreciation of $72,933. The aggregate
cost of securities for federal income tax purposes at October 31, 2009 was
$3,098,089.
At October 31, 2008, the gross unrealized appreciation for all securities
totaled $308,970 and the gross unrealized depreciation for all securities
totaled $753,538, or a net unrealized depreciation of $444,568. The
aggregate cost of securities for federal income tax purposes at October
31, 2008 was $3,674,180.
At June 30, 2008 the gross unrealized appreciation for all securities totaled
$647,125 and the gross unrealized depreciation for all securities totaled
$232,280, or a net unrealized appreciation of $414,845. The aggregate cost of
securities for federal income tax purposes at June 30, 2008 was $3,164,439.
NOTE D - INVESTMENT ADVISORY AGREEMENT
Carosa Stanton 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 Asset Management, LLC is a Registered
Investment Adviser under the Investment Advisers Act of 1940. The Investment
advisory agreement provides that Carosa Stanton 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 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 year ended October 31, 2009, the four months ended October 31,
2008 and the year ended June 30, 2008, the fund paid investment advisory
fees of $42,876, $17,005 and $53,669, respectively.
On October 31, 2009, the fund had $3,716 included in accrued expenses, as
owed to Carosa Stanton 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, 2007 348,746.944 $ 4,387,887
Shares sold during 2008 26,404.727 368,454
Shares Redeemed during 2008 (5,134.964) (71,018)
Reinvestment of Distributions, December 26, 2007 7,735.411 109,611
Reinvestment of Distributions, June 27, 2008 1,104.207 14,355
Balance at June 30, 2008 378,856.325 $ 4,809,289
Shares sold during short period 2008 28,641.407 325,468
Shares Redeemed during short period 2008 (7,089.452) (92,678)
Balance at October 31, 2008 400,408.280 $ 5,042,079
Shares sold during 2009 13,278.412 139,406
Shares Redeemed during 2009 (59,858.012) (650,802)
Reinvestment of Distributions, December 30, 2008 779.456 7,748
Balance at October 31, 2009 354,608.136 $ 4,538,431
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEAR ENDED OCTOBER 31, 2009, FOR THE FOUR MONTHS ENDED
OCTOBER 31, 2008, AND THE YEARS ENDED JUNE 30, 2008, 2007, AND 2006
October October June June June
2009 2008 2008 2007 2006
NET ASSET VALUE,
beginning of period $ 10.68 $ 12.94 $ 14.81 $ 13.29 $ 13.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.01) (0.01) 0.10 0.12 0.03
Net gain (loss) on securities
both realized and unrealized 0.58 (2.25) (2.31) 0.49 (1.56)
Total from investment operations 0.57 (2.26) (2.21) 0.61 (1.53)
DISTRIBUTIONS
Dividends 0.02 0.00 0.34 0.91 0.85
NET ASSET VALUE, end of period $ 11.27 $ 10.68 $ 12.94 $ 14.81 $ 13.29
NET ASSETS,
end of period $3,996,997 $4,274,995 $4,904,188 $5,163,219 $4,497,546
Actual Actual Actual Actual Actual
RATIO OF EXPENSES
TO AVERAGE NET ASSETS* 1.84% 0.64% 1.62% 1.56% 1.78%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* (0.07)% (0.05)% 0.77% 0.85% 0.21%
PORTFOLIO TURNOVER RATE* 16.23% 0.00% 25.03% 30.41% 15.33%
TOTAL RETURN 5.73% (28.44)% (10.76)% 18.55% 1.30%
* Per share amounts calculated using the average shares method
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 OCTOBER 31, 2009
TOGETHER WITH INDEPENDENT AUDITORS' REPORT
EFP ROTENBERG & CO.
Certified Public Accountants
1870 Winton Road South
Suite 200
Rochester, NY 14618
Tel 585-295-2400
Fax 585-295-2150
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Bullfinch Fund, Inc. - Western New York Series
We have audited the accompanying statement of assets and liabilities of
Bullfinch Fund, Inc.- Western New York Series (a series within the Bullfinch
Fund, Inc.), including the schedule of investments, as of October 31, 2009,
the related statements of operations and changes in net assets for the year
ended October 31, 2009, the four months ended October 31, 2008 and the year
ended June 30, 2008, and the financial highlights for the year ended October
31, 2009, the four months ended October 31, 2008, and the years ended June 30,
2008, 2007 and 2006. Bullfinch Fund, Inc.- Western New York Series'
management is responsible for these financial statements. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The
company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the
company's internal control over financial reporting. Accordingly, we express
no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. Our
procedures included confirmation of securities owned as of October 31, 2009
by correspondence with the custodian. 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
Bullfinch Fund, Inc.- Western New York Series (a series within the Bullfinch
Fund, Inc.) as of October 31, 2009, the results of its operations and changes
in net assets for the year ended October 31, 2009, the four months ended
October 31, 2008, and the year ended June 30, 2008, and its financial
highlights for the year ended October 31, 2009, the four months ended October
31, 2008 and the years ended June 30, 2008, 2007 and 2006 in conformity with
accounting principles generally accepted in the United States of America.
/s/ Rotenberg & Company, LLP
Rotenberg & Company, LLP
Rochester, New York
December 23, 2009
GREATER WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2009
ASSETS
Investments in securities, at fair value,
identified cost of $645,514 $ 634,459
Cash 60,142
Accrued interest and dividends 344
Prepaid expenses 857
Due from Investment Advisor 1,909
Total assets $ 697,711
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 3,226
NET ASSETS
Net assets (equivalent to $10.64 per share
based on 65,268.173 shares of stock outstanding) 694,485
Total Liabilities and Net Assets $ 697,711
COMPOSITION OF NET ASSETS
Shares of common Stock - Par Value $.01;
10,000,000 Shares Authorized,
65,268.173 Shares Outstanding $ 752,837
Accumulated net investment loss (47,297)
Net unrealized appreciation on investments (11,055)
Net assets at October 31, 2009 $ 694,485
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 OCTOBER 31, 2009
Historical
Common Stocks - 100% Shares Cost Value
--------- --------- ---------
Electrical Equipment - 9.08%
Corning, Inc. 1,900 21,672 27,759
General Electric Co. 1,450 35,248 20,677
Ultralife Batteries, Inc. 4,000 25,175 14,640
---------- ----------
82,095 63,076
Medical Products & Supplies - 8.95%
Bristol-Myers Squibb Co. 1,000 21,938 21,800
Greatbatch Technologies 850 18,984 16,719
Johnson & Johnson 400 22,617 23,620
---------- ----------
63,539 62,139
Electronic Components - 7.87%
Astronics Corp. Class A 1,750 15,396 14,508
IEC Electronics Corp. 4,518 6,984 18,885
Tyco Electronics 1,000 27,259 21,250
---------- ----------
49,639 54,643
Banking & Finance - 6.83%
Community Bank System 1,200 23,452 22,332
M&T Bank Corp. 400 38,896 25,140
---------- ----------
62,348 47,472
Aerospace - 6.74%
Harris Corporation 500 24,989 20,860
Moog, Inc. Class A 637 15,976 15,906
Northrop Grumman 200 2,536 10,026
---------- ----------
43,501 46,792
Real Estate & Related - 4.86%
Home Properties Inc. 400 16,297 15,672
Sovran Self Storage 600 23,459 18,060
---------- ----------
39,756 33,732
Commercial Services - 3.98%
Harris Interactive, Inc. 2,200 6,273 2,068
Paychex, Inc. 900 24,805 25,569
---------- ----------
31,078 27,637
Computers - Software - 3.95%
Oracle 1,300 16,642 27,430
Machinery - 3.92%
Columbus McKinnon Corp. 100 2,344 1,655
Idex Corporation 900 29,029 25,587
---------- ----------
31,373 27,242
Railroads - 3.76%
Genesee & Wyoming Class A 900 2,522 26,109
Computers - Services - 3.51%
Computer Task Group, Inc. 3,500 11,872 24,395
Foods & Beverages - 3.42%
Constellation Brands, Inc. 1,500 15,118 23,730
Utilities - Natural Resources - 3.26%
National Fuel Gas Co. 500 11,250 22,670
Historical
Common Stocks - 100% Shares Cost Value
--------- --------- ---------
Automotive - 3.12%
Monro Muffler Brake Inc. 700 12,443 21,693
Steel - 3.11%
Gilbraltar Industries Inc. 2,000 25,111 21,640
Computers - Hardware - 2.91%
Dell Corporation 1,400 23,781 20,230
Metal Fabrication & Hardware - 2.86%
Graham Corp. 1,400 15,140 19,838
Retail - Specialty - 2.73%
Fastenal Co. 550 19,186 18,975
Telecommunications - 1.86%
Frontier Communications 1,800 20,663 12,906
Office Equipment - 1.52%
Xerox Corp. 1,400 17,817 10,528
Computers - Distributors - 1.01%
Ingram Micro 400 4,230 7,060
Photographic Equipment and Suppliers - 0.86%
Eastman Kodak 1,600 34,170 6,000
Packaging and Containers - 0.47%
Mod Pac Corporation 1,130 4,875 3,266
Health Care Service Provider - 0.35%
VirtualScopics Inc. 2,000 2,981 2,416
Airlines - 0.30%
Southwest Airlines Co. 250 3,447 2,100
Industrial Materials - 0.11%
Servotronics, Inc. 100 937 740
Schwab Money Market - 8.66% 60,142
Total Investments in Securities $ 645,514 $ 694,601
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 OCTOBER 31, 2009
Table of Industries
Industry Market Value Percent
- -------- -------------- -------
Aerospace $ 46,792 6.74%
Airlines $ 2,100 0.30%
Automotive $ 21,693 3.12%
Banking & Finance $ 47,472 6.83%
Commercial Services $ 27,637 3.98%
Computers - Distributors $ 7,060 1.01%
Computers - Hardware $ 20,230 2.91%
Computers - Services $ 24,395 3.51%
Computers - Software $ 27,430 3.95%
Electrical Equipment $ 63,076 9.08%
Electronics Components $ 54,643 7.87%
Foods & Beverages $ 23,730 3.42%
Health Care Service Provider $ 2,416 0.35%
Industrial Materials $ 740 0.11%
Machinery $ 27,242 3.92%
Medical Products & Supplies $ 62,139 8.95%
Metal Fabrication & Hardware $ 19,838 2.86%
Office Equipment $ 10,528 1.52%
Packaging & Containers $ 3,266 0.47%
Photographic Equipment & Suppliers $ 6,000 0.86%
Railroads $ 26,109 3.76%
Real Estate & Related $ 33,732 4.86%
Retail - Specialty $ 18,975 2.73%
Steel $ 21,640 3.11%
Telecommunications $ 12,906 1.86%
Utilities - Natural Resources $ 22,670 3.26%
Total Equities $ 634,459 91.34%
Cash & Equivalents $ 60,142 8.66%
-------------- -------
Total Invested Assets $ 694,601 100.00%
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 YEAR ENDED OCTOBER 31, 2009,
THE FOUR MONTHS ENDED OCTOBER 31, 2008, AND THE YEAR ENDED JUNE 30, 2008
October October June
2009 2008 2008
--------- --------- ---------
INVESTMENT INCOME:
Dividends $ 14,568 $ 4,826 $ 15,049
EXPENSES:
Management fees 8,557 3,422 9,448
Reimbursement of Management Fees (1,909) 0 (156)
Legal and Professional 1,647 707 1,380
Director's Fees 1,200 650 1,200
D&O/E&O 965 319 902
Fidelity Bond 102 102 117
Taxes 665 300 150
Telephone 95 0 137
Registration Fees 651 107 300
Custodian Fees 587 702 394
Dues and Subscriptions 1,234 216 1,284
Total expense 13,794 6,525 15,156
Net investment income (loss) 774 (1,699) (107)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from
securities transactions (15,528) (446) 21,036
Unrealized appreciation (depreciation)
during the period (13,899) (134,961) (100,995)
Net gain (loss) on investments (29,427) (135,407) (79,959)
CHANGE IN NET ASSETS FROM OPERATIONS $(28,653) $(137,106) $ (80,066)
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEAR ENDED OCTOBER 31, 2009,
THE FOUR MONTHS ENDED OCTOBER 31, 2008, AND THE YEAR ENDED JUNE 30, 2008
October October June
2009 2008 2008
--------- --------- ---------
DECREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ 774 $ (1,699) $ (107)
Net realized gain (loss)
from security transactions (15,528) (446) 21,036
Net change in unrealized appreciation
(depreciation) of investments (13,899) (134,961) (100,995)
Change in net assets from operations (28,653) (137,106) (80,066)
CAPITAL SHARE TRANSACTIONS:
Sales 12,297 151,830 122,449
Redemptions (60,725) (7,102) (6,000)
Total capital share transactions (48,428) 144,728 116,449
Increase in net assets (77,081) 7,622 36,383
NET ASSETS:
Beginning of period 771,566 763,944 727,561
End of period $ 694,485 $ 771,566 $ 763,944
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 OCTOBER 31, 2009
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. As of October 31, 2009 the Series has capital loss carryforwards
of $15,974 which expire in eight years.
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 $24,796 to its shareholders on December 26, 2007, in the form of
stock dividends equal to 1,711.274 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. Subsequent events were evaluated through December 23, 2009, the
date these financial statements were available for issue.
NOTE C - INVESTMENTS
For the year ended October 31, 2009, the Series purchased $46,398 of common
stock. During the same period, the Series sold $27,690 of common stock.
For the four months ended October 31, 2008, the Series purchased $179,389 of
common stock. During the same period, the Series sold $49,919 of common stock.
For the year ended June 30, 2008, the Series purchased $216,441 of common
stock. During the same period, the Series sold $122,654 of common stock.
At October 31, 2009, the gross unrealized appreciation for all securities
totaled $110,953 and the gross unrealized depreciation for all securities
totaled $122,008, or a net unrealized depreciation of $11,055. The aggregate
cost of securities for federal income tax purposes at October 31, 2009 was
$645,514.
At October 31, 2008, the gross unrealized appreciation for all securities
totaled $119,091 and the gross unrealized depreciation for all securities
totaled $116,247, or a net unrealized appreciation of $2,844. The aggregate
cost of securities for federal income tax purposes at October 31, 2008 was
$642,996.
At June 30, 2008, the gross unrealized appreciation for all securities
totaled $205,277 and the gross unrealized depreciation for all securities
totaled $67,473, or a net unrealized appreciation of $137,804. The
aggregate cost of securities for federal income tax purposes at June 30,
2008 was $513,973.
NOTE D - INVESTMENT ADVISORY AGREEMENT
Carosa Stanton 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 Asset Management, LLC is a
Registered Investment Adviser under the Investment Advisers Act of 1940. The
Investment advisory agreement provides that Carosa Stanton 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 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 year ended October 31, 2009, the four months ended October 31,
2008 and the year ended June 30, 2008, the fund paid investment advisory
fees of $6,648, $3,422 and $9,292, respectively.
On October 31, 2009, the fund had $775 included in accrued expenses, as owed
to Carosa Stanton 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, 2007 48,994.697 $ 515,292
Shares sold during 2008 8,926.488 122,449
Shares redeemed during 2008 (418.003) (6,000)
Reinvestment of Distributions,
December 26, 2007 1,711.274 24,796
Balance at June 30, 2008 59,214.456 $ 656,537
Shares sold during short period 2008 11,499.549 151,830
Shares redeemed during short period 2008 (701.804) (7,102)
Balance at October 31, 2008 70,012.201 $ 801,265
Shares sold during 2009 1,278.357 12,297
Shares redeemed during 2009 (6,022.385) (60,725)
Balance at October 31, 2009 65,268.173 $ 752,837
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEAR ENDED OCTOBER 31, 2009, FOR THE FOUR MONTHS
ENDED OCTOBER 31, 2008, AND THE YEARS ENDED JUNE 30, 2008, 2007, AND 2006
October October June June June
2009 2008 2008 2007 2006
NET ASSET VALUE,
beginning of period $ 11.02 $ 12.90 $ 14.85 $ 13.27 $ 12.88
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.01 (0.02) 0.00 (0.07) (0.07)
Net gain (loss) on securities both
realized and unrealized (0.39) (1.86) (2.43) 1.57 (0.49)
Total from investment operations (0.38) (1.88) (2.43) 1.50 (0.56)
DISTRIBUTIONS
Dividends .00 .00 .48 .08 .95
NET ASSET VALUE,
end of period $ 10.64 $ 11.02 $ 12.90 $ 14.85 $ 13.27
NET ASSETS, end of period $694,485 $771,566 $763,944 $727,561 $631,101
Actual Actual Actual Actual Actual
RATIO OF EXPENSES TO
AVERAGE NET ASSETS* 2.00% 0.79% 2.00% 1.98% 1.92%
RATIO OF EXPENSES TO AVERAGE NET ASSETS
BEFORE REIMBURSEMENT* 2.28% 0.79% 2.03% 2.13% 2.35%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* 0.11% (0.21)% (0.01)% (0.50)% (0.53)%
PORTFOLIO TURNOVER RATE* 4.02% 6.07% 16.22% 4.98% 15.79%
TOTAL RETURN (3.45)% (26.93)% (10.18)% 12.53% 10.57%
* 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 5/1/09 10/31/09 Expense Ratio During Period+
Unrestricted Series $ 1,000.00 $ 1,148.80 1.8% $ 9.80
Greater Western
New York Series 1,000.00 1,203.60 2.0% $ 10.93
HYPOTHETICAL++
Unrestricted Series 1,000.00 1,025.00 1.8% $ 9.24
Greater Western
New York Series 1,000.00 1,025.00 2.0% $ 10.04
+ 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 (May 1, 2009 to October 31, 2009).
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. 3909 Rush Mendon Road, Mendon, New York
14506.
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, 49 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, 51 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
Betsy Kay Carosa, 49 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>
Thomas M. Doeblin, 50 Director; Term of Office: Teacher 2 N/A
73 San Gabriel Drive Audit N/A Pittsford-Mendon High
Rochester, Committee Length of Time School
NY 14610 Served:
Since 2006
Bryan D. Hickman, 65 Director Term of Office: President 2 N/A
6288 Bobble Hill Road Audit N/A Coach & Equipment
Naples, Committee Length of Time Manufacturing Co.
NY 14512-9700 Served:
Since 2008
John P. Lamberton, 49 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, 49 Director Term of Office: Director of Sales 2 N/A
4410 Woodlawn Ave. N N/A Founder, Managing Member
Seattle, Length of Time Chipman & Martin, LLC;
WA 98103 Served: Sales Directors,
Since 1997 Aecon Buildings, Inc.
Michael J. Morris, 49 Director; Audit Term of Office: N/A Actuary 2 N/A
72 Lovely Street Committee Length of Time United Healthcare
Unionville, CT 06085 Served: Since 1997
Lois Niland, 58 Director Term of Office: Marketing Consultant 2 N/A
33 Oak Meadow Trail N/A Complemar Partners;
Pittsford, Length of Time President, Icon Design;
NY 14534 Served: General Manager, Xerox
Since 2006
Michael W. Reynolds, 49 Director Term of Office: President 2 N/A
105 Dorchester Road Audit N/A Reynolds & Company
Buffalo, Committee Length of Time
NY 14213 Served:
Since 2000
</Table>
PROXY VOTING GUIDELINES
Carosa Stanton 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 A
dviser in fulfilling this responsibility and the voting record during the most
recent 12 month period ending June 30th is available without charge, upon
request, by calling (585) 624-3150 or 1-888-BULLFINCH. The Fund's Forms N-PX
is available on the SEC's website at http://www.sec.gov. The Fund's Forms
N-PX 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.
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 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 visits 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 its 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 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.
10/31/2009 10/31/2009
Audit Fees $11,500 $ 6,000
Audit-Related Fees $ 0 $ 0
Tax Fees $ 2,000 $ 0
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: December 28, 2009
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: December 24, 2009