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: 10/31/10
Date of reporting period: 11/01/09 - 10/31/10
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, 2010
Management's Discussion of Fund Performance
December 20, 2010
Dear Fellow Shareholders:
We are very proud to present the October 2010 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.
This year saw the market continue its rebound (albeit with a small hiccup in
the summer) from the depths of 2009. It's tough to say what has caused the
market to continue to rise in an economy stuck in a rut, but, judging from
the performance of the funds, it's clear there have been opportunities in
individual stocks.
In the Unrestricted Series over the past year, 23 individual stocks exceeded
double digit returns, with nearly a half-dozen returning more than 50%. The
top performing stocks (Expeditors International Washington, Fastenal and Tyco
Electronics) represent a diverse set of industries including shipping,
automotive parts and electronics. Among the laggards were Microsoft (the only
negative return for the year), Dell and Cisco, coincidentally all from the
technology sector. The Unrestricted Series as a whole was up 17.83% in the
fiscal year (while the S&P 500 was up only 14.19%).
During the fiscal year, the Greater Western New York Series gained 26.03%. A
total of 31 individual stocks experienced greater than double digit returns
with 9 returning more than 50%. The top performing stocks (Astronics, Mod-Pac
Corp and Xerox) again represent a diverse set of industries (aeronautics,
printing and office equipment). The underperformers included Gibraltor
Industries (steel); Harris Interactive (management services); and, Dell
(computer equipment), the only negative returners in the portfolio.
Since the last report six months ago, the Unrestricted Series gained 2.55% and
the Greater Western New York Series gained 6.68%. Compare this to the S&P 500
(up 1.00%) and our benchmark - the Value Line Geometric Index (down 2.58%)
- - and you can see we stack up quite favorably. Indeed, both funds have done
quite well versus their Lipper peer group (Multi-Cap Core).
While past performance can never guarantee future results, we are proud of the
fact are closing in on surpassing our all time highs that were achieved in
2007. That we've been able to recover faster than the market (and many other
mutual funds) has much to do with our strict pricing discipline and overall
conservative approach. In addition, as the enclosed graphs show, our five- and
ten-year numbers continue to be positive while the benchmark index remains
negative.
You might have noticed we've significantly cut back on our defensive (i.e.,
cash) position in both funds. Again, despite the slow economy, we feel
confident the markets will again return to their traditional strength in the
latter two years of the presidential cycle (which we didn't see last time).
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 7/1/00 to 10/31/10. 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
6/30/2001 $11,625 $ 9,804
6/30/2002 $10,521 $ 7,953
6/30/2003 $11,210 $ 7,252
6/30/2004 $13,155 $ 9,239
6/30/2005 $13,522 $ 9,686
6/30/2006 $13,697 $10,373
6/30/2007 $16,238 $12,102
6/30/2008 $14,533 $ 9,121
10/31/2008 $11,994 $ 6,294
10/31/2009 $12,682 $ 6,893
10/31/2010 $14,943 $ 8,346
Annualized
Returns Ending Bullfinch Fund Inc. Value Line
10/31/2010 Unrestricted Series Geometric Index
One - Year + 17.83% + 21.08%
Five - Year + 2.12% - 2.93%
Ten - Year + 3.87% - 2.08%
(GRAPH OMITTED)
Year Bullfinch Fund, Inc. Value Line
Ending Greater Western New York Series Geometric Index
$10,000 $10,000
6/30/2001 $10,316 $ 9,804
6/30/2002 $ 9,368 $ 7,953
6/30/2003 $ 9,990 $ 7,252
6/30/2004 $12,457 $ 9,239
6/30/2005 $13,129 $ 9,686
6/30/2006 $14,517 $10,373
6/30/2007 $16,336 $12,102
6/30/2008 $14,673 $ 9,121
10/31/2008 $12,525 $ 6,294
10/31/2009 $12,093 $ 6,893
10/31/2010 $15,240 $ 8,346
Annualized
Returns Ending Bullfinch Fund Inc. Value Line
10/31/2010 Greater WNY Series Geometric Index
One - Year + 26.03% + 21.08%
Five - Year + 3.46% - 2.93%
Ten - Year + 4.87% - 2.08%
UNRESTRICTED SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF OCTOBER 31, 2010
TOGETHER WITH INDEPENDENT AUDITORS' REPORT
EFP Rotenberg, LLP
Certified Public Accountants
280 Kenneth Drive, Suite 100
Rochester, NY 14626
Tel 585-427-8900
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 Bullfinch Fund,
Inc.), including the schedule of investments, as of October 31, 2010, the
related statements of operations and changes in net assets for the years
ended October 31, 2010 and 2009 and the four months ended October 31, 2008,
and the financial highlights for the years ended October 31, 2010 and 2009
and the four months ended October 31, 2008. 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. 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 as of October 31,
2010, the results of its operations and changes in net assets for the years
ended October 31, 2010 and 2009 and the four months ended October 31, 2008,
and its financial highlights for the years ended October 31, 2010 and 2009
and the four months ended October 31, 2008, in conformity with accounting
principles generally accepted in the United States of America.
/s/ EFP Rotenberg, LLP
EFP Rotenberg, LLP
Rochester, New York
December 22, 2010
UNRESTRICTED SERIES
(A SERIES WITHIN THE BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2010
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $3,120,000 $ 3,845,313
Cash 516,992
Accrued Interest and Dividends 3,805
Prepaid Expenses 5,962
Total Assets $ 4,372,072
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 15,336
NET ASSETS
Net Assets (Equivalent to $13.28 per share based on 328,058.294
shares of stock outstanding) 4,356,736
Total Liabilities and Net Assets $ 4,372,072
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
10,000,000 Shares Authorized,
328,058.294 Shares Outstanding $ 4,209,347
Accumulated Net Investment Loss & Realized Loss
from Security Transactions (577,924)
Net Unrealized Appreciation on Investments 725,313
Net Assets at October 31, 2010 $ 4,356,736
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, 2010
Historical
Common Stocks - 100% Shares Cost Value
Computers - Software - 13.88%
Adobe Systems Inc. 4,800 125,063 135,120
Microsoft Corp. 6,200 151,626 165,323
Oracle 5,500 56,122 161,590
Synopsis, Inc. 5,600 115,460 143,248
448,271 605,281
Medical Products and Supplies - 6.70%
Johnson & Johnson 2,400 136,714 152,976
Medtronic Inc. 300 10,839 10,569
Stryker Corp. 2,600 125,743 128,674
273,296 292,219
Pharmaceuticals - 6.31%
Furiex Pharmaceuticals 458 4,538 5,272
Mylan Inc. 6,300 87,179 127,984
Pharmaceutical Product Devel
5,500 125,077 141,955
216,794 275,211
Electrical Equipment - 6.10%
Corning Inc. 9,700 108,148 177,316
General Electric Co. 5,550 116,002 88,911
224,150 266,227
Beverages - 4.58%
Hansen Natural Corp. 3,900 125,589 199,719
Retail - General - 4.12%
Fred's Inc. Class A 15,000 152,560 179,700
Electronics Components - 3.99%
Tyco Electronics 5,500 149,751 174,240
Insurance - 3.68%
Gallagher Arthur J&Co. 5,700 138,298 160,512
Semiconductors - 3.68%
Intel Corp. 8,000 143,610 160,400
Biotech - 3.57%
Meridian Bioscience Inc. 6,800 118,878 155,652
Banking and Finance - 3.37%
Fiserv, Inc. 2,700 112,511 147,204
Building & Related - 3.15%
Ameron Int'l Corp. 2,000 127,814 137,520
Tobacco Products - 3.04%
Universal Corp. VA 3,200 120,756 132,608
Historical
Common Stocks - 100% Shares Cost Value
Computers- Networking - 2.99%
Cisco Systems, Inc. 5,700 97,427 130,302
Food Processing - 2.96%
Sensient Technologies 4,000 80,550 129,240
Commercial Services - 2.92%
Paychex, Inc. 4,600 148,135 127,604
Retail - Specialty - 2.83%
Fastenal Co. 2,400 83,684 123,552
Utilities - Natural Resources - 2.61%
Chesapeake Utilities Corp. 3,100 57,194 113,739
Aerospace - 2.22%
AAR Corporation 4,400 83,191 96,976
Oil & Related - 2.19%
Frontier Oil Corp. 7,200 86,164 95,400
Industrial Services - 2.15%
Expeditors Int'l Washington 1,900 61,567 93,784
Computers - Hardware - 1.11%
Dell Corp. 3,350 69,810 48,223
Total Investments in Securities 3,120,000 3,845,313
Schwab Money Market - 11.85% 516,992
Total Invested Assets $ 3,120,000 $ 4,362,305
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, 2010
Table of Industries
Industry Market Value Percent
Aerospace $ 96,976 2.22%
Banking & Finance $ 147,204 3.37%
Beverages $ 199,719 4.58%
Biotech $ 155,652 3.57%
Building & Related $ 137,520 3.15%
Commercial Services $ 127,604 2.92%
Computers - Hardware $ 48,223 1.11%
Computers - Networking $ 130,302 2.99%
Computers - Software $ 605,281 13.88%
Electrical Equipment $ 266,227 6.10%
Electronics Components $ 174,240 3.99%
Food Processing $ 129,240 2.96%
Industrial Services $ 93,784 2.15%
Insurance $ 160,512 3.68%
Medical Products & Supplies $ 292,219 6.70%
Oil & Related $ 95,400 2.19%
Pharmaceuticals $ 275,211 6.31%
Retail - General $ 179,700 4.12%
Retail - Specialty $ 123,552 2.83%
Semiconductors $ 160,400 3.68%
Tobacco Products $ 132,608 3.04%
Utilities - Natural Resources $ 113,739 2.61%
Total Equities $ 3,845,313 88.15%
Cash & Equivalents $ 516,992 11.85%
Total Invested Assets $ 4,362,305 100.00%
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED OCTOBER 31, 2010 AND 2009,
AND THE FOUR MONTHS ENDED OCTOBER 31, 2008
October October October
2010 2009 2008
INVESTMENT INCOME:
Dividends $ 72,684 $ 71,612 $ 28,411
EXPENSES:
Management fees 44,466 42,876 17,005
Legal and Professional 12,702 12,521 6,164
Director's Fees 0 1,200 650
D&O/E&O 8,991 8,684 2,873
Fidelity Bond 963 919 919
Taxes 450 585 300
Telephone 154 95 0
Registration Fees 891 2,751 118
Custodian Fees 8,057 2,677 2,737
Dues and Subscriptions 2,007 2,034 216
Total expense 78,681 74,342 30,982
Net investment income (loss) (5,997) (2,730) (2,571)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from
securities transactions 42,440 (281,373) 0
Unrealized appreciation (depreciation)
during the period 652,380 517,501 (859,412)
Net gain (loss) on investments 694,820 236,128 (859,412)
CHANGE IN NET ASSETS FROM OPERATIONS $688,823 $233,398 $(861,983)
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED OCTOBER 31, 2010
AND 2009, AND THE FOUR MONTHS ENDED OCTOBER 31, 2008
October October June
2009 2008 2008
CHANGE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (5,997) $ (2,730) $ (2,571)
Net realized gain (loss)
from security transactions 42,440 (281,373) 0
Net change in unrealized appreciation
(depreciation) of investments 652,380 517,501 (859,412)
Change in net assets from operations 688,823 233,398 (861,983)
CAPITAL SHARE TRANSACTION:
Sales 160,643 139,406 325,468
Redemptions (489,727) (650,802) (92,678)
Total capital share transactions (329,084) (511,396) 232,790
Increase (decrease) in net assets 359,739 (277,998) (629,193)
NET ASSETS:
Beginning of period 3,996,997 4,274,995 4,904,188
End of period $4,356,736 $3,996,997 $4,274,995
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2010
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 a
nd 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, 2010 the Series has capital loss carry forwards
of $238,933 which expire in seven years.
Distributions to Shareholders - Distributions to shareholders are recorded
on the ex-dividend date. 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.
NOTE C - INVESTMENTS
For the year ended October 31, 2010, the Series purchased $829,952 of common
stock. During the same period, the Series sold $845,835 of common stock.
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.
At October 31, 2010, the gross unrealized appreciation for all securities
totaled $794,792 and the gross unrealized depreciation for all securities
totaled $69,479 or a net unrealized appreciation of $725,313. The aggregate
cost of securities for federal income tax purposes at October 31, 2010 was
$3,120,000.
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.
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, 2010, the year ended October 31, 2009 and the
four months ended October 31, 2008, the fund paid investment advisory fees of
$44,466, $42,876 and $17,005, respectively.
On October 31, 2010, the fund had $3,861included 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, 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
Shares sold during 2010 12,926.800 160,643
Shares Redeemed during 2010 (39,476.642) (489,727)
Balance at October 31, 2010 328,058.294 $ 4,209,347
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED OCTOBER 31, 2010 AND 2009, FOR THE FOUR MONTHS
ENDED OCTOBER 31, 2008, AND THE YEARS ENDED JUNE 30, 2008 AND 2007
October October October June June
2010 2009 2008 2007 2006
NET ASSET VALUE,
beginning of period $ 11.27 $ 10.68 $ 12.94 $ 14.81 $ 13.29
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.02) (0.01) (0.01) 0.10 0.12
Net gain (loss) on securities
both realized and unrealized 2.03 0.58 (2.25) (2.31) 0.49
Total from investment operations 2.01 0.57 (2.26) (2.21) 0.61
DISTRIBUTIONS
Dividends 0.00 0.02 0.00 0.34 0.91
NET ASSET VALUE, end of period $ 13.28 $ 11.27 $ 10.68 $ 12.94 $ 14.81
NET ASSETS, end of period $4,356,736 $3,996,997 $4,274,995 $4,904,188 $5,163,219
Actual Actual Actual Actual Actual
RATIO OF EXPENSES
TO AVERAGE NET ASSETS* 1.89% 1.84% 0.64% 1.62% 1.56%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* (0.14)% (0.07)% (0.05)% 0.77% 0.85%
PORTFOLIO TURNOVER RATE* 19.94% 16.23% 0.00% 25.03% 30.41%
TOTAL RETURN 17.83% 5.73% (28.44)% (10.76)% 18.55%
* 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, 2010
TOGETHER WITH INDEPENDENT AUDITORS' REPORT
EFP Rotenberg, LLP
Certified Public Accountants
280 Kenneth Drive, Suite 100
Rochester, NY 14626
Tel 585-427-8900
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 Bullfinch Fund,
Inc.), including the schedule of investments, as of October 31, 2010, the
related statements of operations and changes in net assets for the years ended
October 31, 2010 and 2009 and the four months ended October 31, 2008, and the
financial highlights for the years ended October 31, 2010 and 2009 the four
months ended October 31, 2008. 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. 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 as of
October 31, 2010, the results of its operations and changes in net assets for
the years ended October 31, 2010 and 2009 and the four months ended
October 31, 2008, and its financial highlights for the years ended
October 31, 2010 and 2009 and the four months ended October 31, 2008, in
conformity with accounting principles generally accepted in the United
States of America.
/s/ EFP Rotenberg, LLP
EFP Rotenberg, LLP
Rochester, New York
December 22, 2010
GREATER WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2010
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $581,314 $ 745,910
Cash 76,396
Unsettled Trades 6,208
Accrued Interest and Dividends 644
Prepaid Expenses 662
Due from Investment Advisor 2,047
Total Assets $ 831,867
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 2,142
NET ASSETS
Net Assets (Equivalent to $13.41 per share
based on 61,875.070 shares of stock outstanding) 829,725
Total Liabilities and Net Assets $ 831,867
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
10,000,000 Shares Authorized,
61,875.070 Shares Outstanding $ 713,809
Accumulated Net Investment Loss & Realized
Loss from Security Transactions (48,680)
Net Unrealized Appreciation on Investments 164,596
Net Assets at October 31, 2010 $ 829,725
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, 2010
Historical
Common Stocks - 100% Shares Cost Value
--------- --------- ---------
Electronic Components - 11.13%
Astronics Corp. Class A 1,750 15,396 36,488
IEC Electronics Corp. 4,518 6,984 23,358
Tyco Electronics 1,000 27,259 31,680
49,639 91,526
Electrical Equipment - 9.60%
Corning, Inc. 1,900 21,673 34,732
General Electric Co. 1,450 35,248 23,229
Ultralife Corp. 4,000 25,175 21,000
82,096 78,961
Medical Products & Supplies - 8.62%
Bristol-Myers Squibb Co. 1,000 21,938 26,900
Greatbatch Technologies 850 18,984 18,487
Johnson & Johnson 400 22,617 25,496
63,539 70,883
Aerospace - 7.20%
Harris Corporation 500 24,989 22,595
Moog, Inc. Class A 637 15,976 23,951
Northrop Grumman 200 2,536 12,644
43,501 59,190
Banking & Finance - 6.14%
Community Bank System 1,200 23,452 28,044
M&T Bank Corp. 300 29,839 22,425
53,291 50,469
Real Estate & Related - 5.50%
Home Properties Inc. 400 16,297 21,780
Sovran Self Storage 600 23,459 23,442
39,756 45,222
Railroads - 5.06%
Genesee & Wyoming Class A 900 2,522 41,607
Automotive - 4.06%
Monro Muffler Brake Inc. 700 12,443 33,418
Foods & Beverages - 3.60%
Constellation Brands, Inc. 1,500 15,118 29,595
Computers - Services - 3.40%
Computer Task Group, Inc. 3,500 11,872 27,930
Utilities - Natural Resources - 3.36%
National Fuel Gas Co. 500 11,250 27,590
Computers - Software - 3.22%
Oracle 900 12,070 26,442
Metal Fabrication & Hardware - 2.89%
Graham Corp. 1,400 15,140 23,758
Historical
Common Stocks - 100% Shares Cost Value
--------- --------- ---------
Commercial Services - 2.51%
Harris Interactive, Inc. 2,200 6,273 1,937
Paychex, Inc. 675 17,332 18,725
23,605 20,662
Retail - Specialty - 2.50%
Fastenal Co. 400 13,954 20,592
Computers - Hardware - 2.45%
Dell Corporation 1,400 23,781 20,153
Steel - 2.22%
Gilbraltar Industries Inc. 2,000 25,111 18,260
Office Equipment - 1.99%
Xerox Corp. 1,400 17,817 16,379
Telecommunications - 1.92%
Frontier Communications 1,800 20,663 15,804
Computers - Distributors - 0.86%
Ingram Micro 400 4,230 7,064
Photographic Equipment and Suppliers - 0.74%
Eastman Kodak 1,300 25,332 6,113
Packaging and Containers - 0.68%
Mod Pac Corporation 1,130 4,875 5,616
Airlines - 0.42%
Southwest Airlines Co. 250 3,447 3,440
Health Care Service Provider - 0.30%
VirtualScopics Inc. 2,000 2,981 2,480
Machinery - 0.22%
Columbus McKinnon Corp. 100 2,344 1,756
Industrial Materials - 0.12%
Servotronics, Inc. 100 937 1,000
Total Investments in Securities 581,314 745,910
Schwab Money Market - 9.29% 76,396
Total Invested Assets $ 581,314 $ 822,306
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, 2010
Table of Industries
Industry Market Value Percent
Aerospace $ 59,190 7.20%
Airlines $ 3,440 0.42%
Automotive $ 33,418 4.06%
Banking & Finance $ 50,469 6.14%
Commercial Services $ 20,662 2.51%
Computers - Distributors $ 7,064 0.86%
Computers - Hardware $ 20,153 2.45%
Computers - Services $ 27,930 3.40%
Computers - Software $ 26,442 3.22%
Electrical Equipment $ 78,961 9.60%
Electronics Components $ 91,526 11.13%
Foods & Beverages $ 29,595 3.60%
Health Care Service Provider $ 2,480 0.30%
Industrial Materials $ 1,000 0.12%
Machinery $ 1,756 0.22%
Medical Products & Supplies $ 70,883 8.62%
Metal Fabrication & Hardware $ 23,758 2.89%
Office Equipment $ 16,379 1.99%
Packaging & Containers $ 5,616 0.68%
Photographic Equipment & Suppliers $ 6,113 0.74%
Railroads $ 41,607 5.06%
Real Estate & Related $ 45,222 5.50%
Retail - Specialty $ 20,592 2.50%
Steel $ 18,260 2.22%
Telecommunications $ 15,804 1.92%
Utilities - Natural Resources $ 27,590 3.36%
Total Equities $ 745,910 90.71%
Cash & Equivalents $ 76,396 9.29%
Total Invested Assets $ 822,306 100.00%
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 YEARS ENDED OCTOBER 31, 2010 AND 2009,
AND THE FOUR MONTHS ENDED OCTOBER 31, 2008
October October October
2010 2009 2008
--------- --------- ---------
INVESTMENT INCOME:
Dividends $ 13,766 $ 14,568 $ 4,826
EXPENSES:
Management Fees 9,447 8,557 3,422
Reimbursement of Management Fees (2,047) (1,909) 0
Legal and Professional 1,411 1,647 707
Director's Fees 0 1,200 650
D&O/E&O 999 965 319
Fidelity Bond 107 102 102
Taxes 566 665 300
Telephone 154 95 0
Registration Fees 1,998 651 107
Custodian Fees 1,212 587 702
Dues and Subscriptions 1,207 1,234 216
Total expense 15,054 13,794 6,525
Net investment income (loss) (1,288) 774 (1,699)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from
securities transactions (95) (15,528) (446)
Unrealized appreciation (depreciation)
during the period 175,651 (13,899) (134,961)
Net gain (loss) on investments 175,556 (29,427) (135,407)
CHANGE IN NET ASSETS FROM OPERATIONS $174,268 $ (28,653) $(137,106)
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED OCTOBER 31, 2010
AND 2009, AND THE FOUR MONTHS ENDED OCTOBER 31, 2008
October October October
2010 2009 2008
--------- --------- ---------
CHANGE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (1,288) $ 774 $ (1,699)
Net realized gain (loss)
from security transactions (95) (15,528) (446)
Net change in unrealized appreciation
(depreciation) of investments 175,651 (13,899) (134,961)
Change in net assets from operations 174,268 (28,653) (137,106)
CAPITAL SHARE TRANSACTIONS:
Sales 58,125 12,297 151,830
Redemptions (97,153) (60,725) (7,102)
Total capital share transactions (39,028) (48,428) 144,728
Increase (decrease) in net assets 135,240 (77,081) 7,622
NET ASSETS:
Beginning of period 694,485 771,566 763,944
End of period $ 829,725 $ 694,485 $ 771,566
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, 2010
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, 2010 the Series has capital loss carryforwards
of $16,069 which expire in seven years.
Distributions to Shareholders - Distributions to shareholders are recorded on
the ex-dividend date.
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 October 31, 2010, the Series purchased $0 of common stock.
During the same period, the Series sold $62,788 of common stock.
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.
At October 31, 2010, the gross unrealized appreciation for all securities
totaled $232,538 and the gross unrealized depreciation for all securities
totaled $67,942, or a net unrealized appreciation of $164,596. The aggregate
cost of securities for federal income tax purposes at October 31, 2010 was
$581,314.
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.
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, 2010, the year ended October 31, 2009 and
the four months ended October 31, 2008, the fund paid investment advisory
fees of $7,400, $6,648 and $3,422, respectively.
On October 31, 2010, the fund had $867 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, 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
Shares sold during 2010 4,648.388 58,125
Shares redeemed during 2010 (8,041.491) (97,153)
Balance at October 31, 2010 61,875.070 $ 713,809
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED OCTOBER 31, 2010 AND 2009, FOR THE FOUR MONTHS
ENDED OCTOBER 31, 2008, AND THE YEARS ENDED JUNE 30, 2008 AND 2007
October October October June June
2010 2009 2008 2008 2007
NET ASSET VALUE,
beginning of period $ 10.64 $ 11.02 $ 12.90 $ 14.85 $ 13.27
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.02) 0.01 (0.02) 0.00 (0.07)
Net gain (loss) on securities both
realized and unrealized 2.79 (0.39) (1.86) (2.43) 1.57
Total from investment operations 2.77 (0.38) (1.88) (2.43) 1.50
DISTRIBUTIONS
Dividends .00 .00 .00 .48 .08
NET ASSET VALUE, end of period $ 13.41 $ 10.64 $ 11.02 $ 12.90 $ 14.85
NET ASSETS, end of period $829,725 $694,485 $771,566 $763,944 $727,561
Actual Actual Actual Actual Actual
RATIO OF EXPENSES TO
AVERAGE NET ASSETS* 2.00% 2.00% 0.79% 2.00% 1.98%
RATIO OF EXPENSES TO AVERAGE NET ASSETS
BEFORE REIMBURSEMENT* 2.28% 2.28% 0.79% 2.03% 2.13%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* (0.17)% 0.11% (0.21)% (0.01)% (0.50)%
PORTFOLIO TURNOVER RATE* 0.00% 4.02% 6.07% 16.22% 4.98%
TOTAL RETURN 26.03% (3.45)% (26.93)% (10.18)% 12.53%
* 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 $ 1,025.50 1.89% $ 9.49
Greater Western
New York Series 1,000.00 1,066.80 2.00% $ 10.25
HYPOTHETICAL++
Unrestricted Series 1,000.00 1,025.00 1.89% $ 9.49
Greater Western
New York Series 1,000.00 1,025.00 2.00% $ 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, 2010 to October 31, 2010).
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, 50 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, 52 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, 50 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, 51 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, 66 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, 50 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, 50 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: Consultant,
Since 1997 Robson Forensic, Inc.
Director of Sales,
Aecon Buildings, Inc.
Project Manager,
American Home Builders
Michael J. Morris, 50 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 Irwin, 59 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, 50 Director Term of Office: President 2 N/A
203 Randwood Drive Audit N/A Sole Proprietor
Getzville, NY 14068 Committee Length of Time Reynolds & Company
Served: Chakra Communications
Since 2000 Vice President
Quinlan & Company
</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
Adviser 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 Funds relative to the performance of other
funds in the Funds' peer group.
3) In addition, the Board compared expenses of each Fund to the expenses of
its peers.
4) The Board also considered the fact that Adviser has implemented breakpoints
in the Funds' advisory fee schedule and the Board agreed that this type of fee
structure remained reasonable and fair to shareholders.
5) They noted the range of investment advisory and administrative services
provided by the Adviser to the Fund.
6) They also took note of the fact that the Fund is not subject to sales
charges or Rule 12b-1 fees.
7) The Board also reviewed financial information concerning the Adviser's
brokerage practices, including soft dollar arrangements, and noted that
these were reasonable.
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.
10/31/2010 10/31/2009
Audit Fees $10,750 $10,500
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
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Christopher Carosa,
President of Bullfinch Fund, Inc.
Date: December 29, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Christopher Carosa
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Christopher Carosa,
President of Bullfinch Fund, Inc.
Date: December 29, 2010