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: 10/31/13
Date of reporting period: 11/01/12 - 10/31/13
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, 2013
Management's Discussion of Fund Performance
December 20, 2012
Dear Fellow Shareholders:
Enclosed please find the October 2013 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.
They say bull markets climb a wall of anxiety, and with the Damocles Sword of
tapering swinging precariously over its head, the markets certainly had enough
to worry about as it climbed to record heights. But the market wasn't the only
thing reaching new highs.
In the Unrestricted Series, the top performing stocks (AAR Corp, Furiex, Adobe
Systems and Amazon.com.) represent a diverse set of industries including
aviation, pharmaceuticals, software and retail. Among the laggards were newly
purchased Edwards Lifesciences, Almost Family and Synopsis - two healthcare
companies and a technology company. Despite its large defensive position in
cash, the Unrestricted Series as a whole was up 24.29% in the fiscal year (in
line with the S&P 500) vs. our benchmark, the Value Line Geometric Index,
which was up 33.42%.
During the fiscal year, the Greater Western New York Series gained 29.81%. A
total of 30 out of the total of 39 individual stocks in the portfolio
experienced greater than double digit returns with 15 returning more than 40%.
The top performing stocks (Astronics, Graham and Southwest Air) again
represent a diverse set of industries (aerospace, industrial goods and
commercial airlines). The underperformers included a very small position in
VirtualScopics (medical imaging); IEC Electronics (electronics); and,
Computer Task Group (staffing). ModPac (printing) underwent a management
buyout during the year.
We might have seen a sneak preview of what will happen when the Fed ends the
taper. By artificially pumping up the market, we've seen quite a few stocks
hit highs well beyond their intrinsic value. Even some of our stocks are
very close to their 5-year sell prices. The market did push three stocks in
the Unrestricted Series above their 5-year sell price (Furiex, Chesapeake
Utilities and Fiserv). Be looking for these gains in the form of year-end
capital gains dividends.
Oddly, the market is both poised to take off or fall. This dual state comes
from the fact that the fundamentals do not currently support the market's high
levels. Should the Fed taper, this will cause the market to fall. On the other
hand - and this is a relatively new input - with growing dissent from both
parties on the viability of Obamacare, should this law be repealed, it may
release pent-up hiring demand, causing the market to soar.
We want to mention to our Rochester, New York shareholders who have been
complaining to us about the local newspaper (Democrat and Chronicle) going with
a national feed for its mutual fund listing and dropping coverage of the
Bullfinch Funds. Please call the editor (Len McCarra) at (585) 258-2416 and
state your concerns. All shareholders should know we are working with another
Western New York media property (that covers both Buffalo and Rochester as well
as across the Southern Tier) to post our prices daily. This is expected to be
officially announced in our calendar year-end shareholder statements, so stay
tuned. By the way, this is an internet site, so all shareholders will be able
to get the daily price no matter where they live.
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 7/1/03 to 10/31/13. 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 feels it is an appropriate benchmark because the
Fund's portfolios are multi-cap portfolios. 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
6/30/2003 $10,000 $10,000
6/30/2004 $11,735 $12,740
6/30/2005 $12,062 $13,355
6/30/2006 $12,219 $14,304
6/30/2007 $14,486 $16,687
6/30/2008 $12,965 $12,577
10/31/2008 $10,700 $8,678
10/31/2009 $11,313 $9,505
10/31/2010 $13,330 $11,509
10/31/2011 $14,675 $11,422
10/31/2012 $14,005 $12,055
10/31/2013 $18,227 $15,238
Annualized
Returns Ending Bullfinch Fund Inc. Value Line
10/31/2013 Unrestricted Series Geometric Index
One - Year + 24.20% + 33.42%
Five - Year + 12.35% - 12.96%
Ten - Year + 5.74% + 4.10%
(GRAPH OMITTED)
Year Bullfinch Fund, Inc. Value Line
Ending Greater Western New York Series Geometric Index
6/30/2003 $10,000 $10,000
6/30/2004 $12,469 $12,740
6/30/2005 $13,142 $13,355
6/30/2006 $14,531 $14,304
6/30/2007 $16,352 $16,687
6/30/2008 $14,688 $12,577
10/31/2008 $12,537 $8,678
10/31/2009 $12,105 $9,505
10/31/2010 $15,256 $11,509
10/31/2011 $16,723 $11,422
10/31/2012 $16,118 $12,055
10/31/2013 $21,708 $15,240
Annualized
Returns Ending Bullfinch Fund Inc. Value Line
10/31/2013 Greater WNY Series Geometric Index
One - Year + 29.81% + 33.42%
Five - Year + 12.84% - 12.96%
Ten - Year + 7.09% + 4.01%
UNRESTRICTED SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF OCTOBER 31, 2013
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 in securities, as of
October 31, 2013 and the related statements of operations and the statements
of changes in net assets for each of the years in the three year period
ended October 31, 2013 and the financial highlights for each of the five
years in the period then ended. Bullfinch Fund, Inc. - Unrestricted Series'
management is responsible for these financial statements. Our responsibility
is to express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the 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, 2013, the
results of its operations and changes in its net assets for each of the
years in the three year period ended October 31, 2013, and the financial
highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United
States of America.
/s/ EFP Rotenberg, LLP
EFP Rotenberg, LLP
Rochester, New York
December 20, 2013
UNRESTRICTED SERIES
(A SERIES WITHIN THE BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2013
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $3,364,393 $ 5,350,493
Cash 951,097
Accrued Interest and Dividends 4,792
Total Assets $ 6,306,382
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 19,189
NET ASSETS
Net Assets (Equivalent to $18.46 per share based on 340,600.228
shares of stock outstanding) 6,287,193
Total Liabilities and Net Assets $ 6,306,382
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
10,000,000 Shares Authorized,
340,600.228 Shares Outstanding $ 4,403,723
Accumulated Net Investment Loss & Realized Loss
from Security Transactions (102,630)
Net Unrealized Appreciation on Investments 1,986,100
Net Assets at October 31, 2013 $ 6,287,193
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, 2013
Historical
Common Stocks - 100% Shares Cost Value
Computers - Software - 14.12%
Adobe Systems Inc. 4,800 125,063 260,256
Microsoft Corp. 6,200 151,626 219,511
Oracle Corp. 5,500 56,122 184,250
Synopsis, Inc. 5,600 115,460 203,952
448,271 867,969
Medical Products and Supplies - 9.69%
Edwards Lifesciences 2,750 184,878 179,272
Johnson & Johnson 2,400 136,714 222,264
Medtronic Inc. 300 10,839 17,220
Stryker Corp. 2,600 125,743 192,036
458,174 610,792
Pharmaceuticals - 6.81%
Allergan Inc. 2,100 183,759 190,281
Mylan Inc. 6,300 87,179 238,549
270,938 428,830
Retail - Specialty - 6.76%
Fastenal Co. 4,800 83,684 239,184
Zumiez Inc. 6,300 134,766 186,732
218,450 425,916
Semiconductors - 6.07%
Intel Corp. 8,000 143,610 195,760
NVIDIA Corporation 5,300 95,564 80,502
Tessera Technologies Inc. 5,600 96,089 106,512
335,263 382,774
Electronics Components - 4.49%
TE Connectivity Ltd. 5,500 149,751 283,195
Insurance - 4.29%
Arthur J Gallagher & Co. 5,700 138,298 270,465
Internet Services - 4.22%
Amazon.com Inc. 730 145,358 265,742
Retail - General - 3.86%
Fred's Inc. Class A 15,000 152,560 243,000
Computers - Networking - 3.83%
Cisco Systems, Inc. 10,700 160,238 241,392
Electrical Equipment - 3.68%
Corning Inc. 7,300 66,773 124,757
General Electric Co. 4,100 77,607 107,174
144,380 231,931
Food Processing - 3.31%
Sensient Technologies 4,000 80,550 208,520
Commercial Services - 3.19%
Paychex, Inc. 4,750 130,496 200,759
Tobacco Products - 2.69%
Universal Corp. VA 3,200 120,756 169,696
Biotech - 2.67%
Meridian Bioscience Inc. 6,800 118,878 168,096
Health Care Service Provider - 2.17%
Almost Family Inc. 7,100 147,274 136,533
Aerospace - 2.04%
AAR Corporation 4,400 83,191 128,832
Industrial Services - 1.37%
Expeditors Int'l Washington 1,900 61,567 86,051
Total Investments in Securities 3,364,393 5,350,493
Schwab Money Market - 15.09% 951,097
7 day Yield .01%
Total Invested Assets $ 3,364,393 $ 6,301,590
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, 2013
Table of Industries
Industry Market Value Percent
Aerospace $ 128,832 2.04%
Biotech $ 168,096 2.67%
Commercial Services $ 200,759 3.19%
Computers - Networking $ 241,392 3.83%
Computers - Software $ 867,969 13.77%
Electrical Equipment $ 231,931 3.68%
Electronics Components $ 283,195 4.49%
Food Processing $ 208,520 3.31%
Health Care Service Provider $ 136,533 2.17%
Industrial Services $ 86,051 1.37%
Insurance $ 270,465 4.29%
Internet Services $ 265,742 4.22%
Medical Products & Supplies $ 610,792 9.69%
Pharmaceuticals $ 428,830 6.81%
Retail - General $ 243,000 3.86%
Retail - Specialty $ 425,916 6.76%
Semiconductors $ 382,774 6.07%
Tobacco Products $ 169,696 2.69%
Total Equities $ 5,350,493 84.91%
Cash & Equivalents (7 day yield .01%) $ 951,097 15.09%
Total Invested Assets $ 6,301,590 100.00%
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, 2013, 2012 AND 2011
October October October
2013 2012 2011
INVESTMENT INCOME:
Dividends $ 108,000 $ 78,308 $ 85,600
EXPENSES:
Adviser Fees 59,091 51,906 47,651
Legal and Professional 13,259 13,443 13,176
Director's Fees 1,600 1,200 1,400
D&O/E&O 8,156 8,150 8,707
Fidelity Bond 0 1,228 1,008
Taxes 454 450 454
Telephone 40 167 190
Registration Fees 2,297 865 850
Custodian Fees 3,475 5,562 6,896
Dues and Subscriptions 1,189 2,061 2,061
Total expense 91,703 85,032 82,393
Net investment income (loss) 16,297 (6,724) 3,207
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from
securities transactions 246,936 143,783 238,287
Unrealized appreciation (depreciation)
during the period 955,907 109,313 195,567
Net gain (loss) on investments 1,202,843 253,096 433,854
CHANGE IN NET ASSETS FROM OPERATIONS $1,219,140 $246,372 $437,061
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED OCTOBER 31, 2013
2012 AND 2011
October October October
2013 2012 2011
CHANGE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ 16,297 (6,724) $ 3,207
Net realized gain (loss) from
security transactions 246,936 143,783 238,287
Net change in unrealized appreciation
(depreciation) of investments 955,907 109,313 195,567
Change in net assets from operations 1,219,140 246,372 437,061
CAPITAL SHARE TRANSACTION:
Sales 355,503 294,983 266,136
Redemptions (208,578) (226,931) (453,229)
Total capital share transactions 146,925 68,052 (187,093)
Increase (decrease) in net assets 1,366,065 314,424 249,968
NET ASSETS:
Beginning of period 4,921,128 4,606,704 4,356,736
End of period $6,287,193 4,921,128 $4,606,704
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2013
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 and is
in compliance with FASB ASC 820-10-50. 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. As of October 31, 2013 all securities are valued
through an exchange. In cases where market prices are unreliable or not
readily available, for example, when trading on securities are halted as
permitted by the SEC or when there is no trading volume on an
Over-the-Counter security held by the Fund, the Fund relies on fair value
pricing provided by the Adviser. In performing its fair value pricing, the
Adviser acts under the ultimate supervision of, and follows, the policies of
the Board of Directors. The Board of Directors retains the right to
determine its own fair value price should it have reason to believe the
price provided by the Adviser does not reflect fair value. Valuing
securities at fair value involves greater reliance on judgment than
securities that have readily available market quotations. There can be no
assurance the Fund could obtain the fair value assigned to a security if
they were to sell the security at approximately the time at
which the Fund determines their net asset value per share.
Income Taxes - It is the policy of the Fund to comply with the requirements
of Subchapter M of the Internal Revenue Code (the "Code") applicable to
regulated investment companies and to distribute all of its taxable income
to its shareholders. In addition, the Fund intends to distribute an amount
sufficient to avoid imposition of any excise tax under Section 4982 of the
Code. Therefore, no provision for federal income taxes or excise taxes has
been made.
Distributions to Shareholders - Distributions to shareholders are recorded
on the ex-dividend date. The Series made a distribution of its ordinary
income of $3,217 to its shareholders on December 27, 2011 in the form of
stock dividends equal to 215.509 shares of stock. The Series made a
distribution of its ordinary income of $19,498 to its shareholders on
December 29, 2012, in the form of stock dividends equal to 1,252.658 shares of
stock. The Series made a distribution of its capital gains of $143,777 to its
shareholders on December 29, 2012, in the form of stock dividends equal to
9,236.828 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.
..
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, 2013, the Series purchased $368,637 of common
stock. During the same period, the Series sold $418,874 of common stock.
For the year ended October 31, 2012, the Series purchased $356,049 of common
stock. During the same period, the Series sold $393,230 of common stock.
For the year ended October 31, 2011, the Series purchased $514,255 of common
stock. During the same period, the Series sold $808,893 of common stock.
At October 31, 2013, the gross unrealized appreciation for all securities
totaled $2,017,509 and the gross unrealized depreciation for all securities
totaled $31,409 or a net unrealized appreciation of $1,986,100. The aggregate
cost of securities for federal income tax purposes at October 31, 2013 was
$3,364,393.
At October 31, 2012, the gross unrealized appreciation for all securities
totaled $1,095,914 and the gross unrealized depreciation for all securities
totaled $65,720 or a net unrealized appreciation of $1,030,194. The
aggregate cost of securities for federal income tax purposes at
October 31, 2012 was $3,169,999.
At October 31, 2011, the gross unrealized appreciation for all securities
totaled $985,408 and the gross unrealized depreciation for all securities
totaled $64,527 or a net unrealized appreciation of $920,881. The aggregate
cost of securities for federal income tax purposes at October 31, 2011 was
$3,063,580.
NOTE D - INVESTMENT ADVISORY AGREEMENT
Carosa Stanton Asset Management, LLC serves as investment adviser to the Fund
pursuant to an investment adviser 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
Adviser 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 adviser 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 as part of its contract to
forego sufficient investment adviser 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 years ended October 31, 2013, October 31, 2012 and October 31,
2011, the fund paid investment adviser fees of $59,091, $51,906, and
$47,651, respectively.
On October 31, 2013, the fund had $5,489 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 October 31, 2010 328,058.294 $ 4,209,347
Shares sold during 2011 18,943.134 266,136
Shares Redeemed during 2011 (31,823.224) (453,229)
Balance at October 31, 2011 315,178.204 $ 4,022,254
Shares sold during 2012 19,427.009 294,983
Shares Redeemed during 2012 (14,291.005) (226,931)
Reinvestment of Distributions, December 27, 2011 215.509 3,217
Balance at October 31, 2012 320,529.717 $ 4,093,523
Shares sold during 2013 22,094.358 355,503
Shares Redeemed during 2013 (12,513.333) (208,578)
Reinvestment of Distributions, December 29, 2012 10,489.486 163,275
Balance at October 31, 2013 340,600.228 $ 4,403,723
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED OCTOBER 31, 2013, 2012, 2011, 2010 AND 2009
October October October October October
2013 2012 2011 2010 2009
NET ASSET VALUE,
beginning of period $ 15.35 14.62 $ 13.28 $ 11.27 $ 10.68
INCOME FROM INVESTMENT OPERATIONS
Net investment income
(loss) 0.05 (0.02) 0.01 (0.02) (0.01)
Net gain (loss) on
securities both realized
and unrealized 2.55 0.74 1.33 2.03 0.58
Total from investment
operations 2.60 0.72 1.34 2.01 0.57
DISTRIBUTIONS
Dividends 0.51 0.01 0.00 0.00 0.02
NET ASSET VALUE,
end of period $ 18.46 15.35 $ 14.62 $ 13.28 $ 11.27
NET ASSETS, end of
period $6,287,193 $4,921,128 $4,606,704 $4,356,736 $3,996,997
Actual Actual Actual Actual Actual
RATIO OF EXPENSES
TO AVERAGE NET ASSETS* 1.63% 1.73% 1.82% 1.89% 1.84%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* 0.29% (0.14)% 0.07% (0.14)% (0.07)%
PORTFOLIO TURNOVER RATE* 6.54% 7.23% 11.37% 19.94% 16.23%
TOTAL RETURN 24.20% 5.06% 10.09% 17.83% 5.73%
* 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, 2013
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 in securities, as of October 31,
2013 and the related statements of operations and the statements of changes in
net assets for each of the years in the three year period ended October 31,
2013, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the 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, 2013,
and the results of its operations and changes in its net assets for each of
the years in the three year period ended October 31, 2013, and the
financial highlights for each of the five years in the period then ended,
in conformity with accounting principles generally accepted in the United
States of America.
/s/ EFP Rotenberg, LLP
EFP Rotenberg, LLP
Rochester, New York
December 20, 2013
GREATER WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2013
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $587,639 $ 1,273,663
Cash 282,564
Accrued Interest and Dividends 891
Total Assets $ 1,557,118
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 2,581
NET ASSETS
Net Assets (Equivalent to $20.16 per share
based on 77,097.246 shares of stock outstanding) 1,554,267
Total Liabilities and Net Assets $ 1,557,118
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
10,000,000 Shares Authorized,
77,097.246 Shares Outstanding $ 953,346
Accumulated Net Investment Loss & Realized
Loss from Security Transactions (85,103)
Net Unrealized Appreciation on Investments 686,024
Net Assets at October 31, 2013 $ 1,554,267
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, 2013
Historical
Common Stocks - 100% Shares Cost Value
--------- --------- ---------
Electronic Components - 10.54%
Astronics Corp. Class A 2,655 15,396 130,254
IEC Electronics Corp. 4,518 6,984 19,428
TE Connectivity Ltd. 1,000 27,259 51,490
49,639 201,172
Medical Products & Supplies - 7.84%
Bristol-Myers Squibb Co. 1,000 21,938 52,520
Greatbatch, Inc. 850 18,984 32,402
Johnson & Johnson 400 22,617 37,044
63,539 121,966
Foods & Beverages - 6.29%
Constellation Brands, Inc. 1,500 15,118 97,950
Electrical Equipment - 5.85%
Corning, Inc. 2,200 26,502 37,598
General Electric Co. 1,450 35,248 37,903
Ultralife Corp. 4,000 25,175 15,600
86,925 91,101
Aerospace - 5.82%
Harris Corporation 500 24,989 30,980
Moog, Inc. Class A 637 15,976 38,048
Northrop Grumman 200 2,294 21,502
43,259 90,530
Railroads - 5.77%
Genesee & Wyoming Class A 900 2,522 89,856
Retail - Specialty - 5.04%
Fastenal Co. 800 13,954 39,864
Zumiez Inc. 1,300 27,816 38,532
41,770 78,396
Banking & Finance - 4.97%
Community Bank System 1,200 23,452 43,572
M&T Bank Corp. 300 29,839 33,759
53,291 77,331
Real Estate & Related - 4.50%
Home Properties Inc. 400 14,797 24,124
Sovran Self Storage 600 22,310 45,894
37,107 70,018
Computers - Services - 3.87%
Computer Task Group, Inc. 3,500 11,872 60,305
Metal Fabrication & Hardware - 3.31%
Graham Corp. 1,400 15,140 51,534
Automotive - 3.10%
Monro Muffler Brake Inc. 1,050 12,443 48,300
Commercial Services - 2.92%
Harris Interactive, Inc. 2,200 6,935 4,180
Paychex, Inc. 975 25,852 41,208
32,787 45,388
Steel - 2.06%
Gilbraltar Industries Inc. 2,000 25,111 32,020
Computers - Software - 1.94%
Oracle Corp. 900 12,070 30,150
Environmental Services - 1.47%
Ecology & Environment Inc. 2,000 25,398 22,800
Utilities - Natural Resources - 1.15%
National Fuel Gas Co. 250 5,625 17,888
Office Equipment - 0.89%
Xerox Corp. 1,400 17,817 13,916
Computers - Distributors - 0.60%
Ingram Micro 400 4,230 9,268
Telecommunications - 0.51%
Frontier Communications 1,800 17,872 7,929
Instruments - 0.46%
Taylor Devices 877 4,394 7,235
Airlines - 0.28%
Southwest Airlines Co. 250 3,448 4,305
Machinery - 0.17%
Columbus McKinnon Corp. 100 2,344 2,601
Health Care Service Provider - 0.05%
VirtualScopics Inc. 200 2,981 860
Industrial Materials - 0.05%
Servotronics, Inc. 100 937 844
Total Investments in Securities 587,639 1,273,663
Schwab Money Market - 18.16% 282,564
7 day Yield .01%
Total Invested Assets $ 587,639 $ 1,556,227
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, 2013
Table of Industries
Industry Market Value Percent
Aerospace $ 90,530 5.82%
Airlines $ 4,305 0.28%
Automotive $ 48,300 3.10%
Banking & Finance $ 77,331 4.97%
Commercial Services $ 45,388 2.92%
Computers - Distributors $ 9,268 0.60%
Computers - Services $ 60,305 3.87%
Computers - Software $ 30,150 1.94%
Electrical Equipment $ 91,101 5.85%
Electronics Components $ 201,172 12.93%
Environmental Services $ 22,800 1.47%
Foods & Beverages $ 97,950 6.29%
Health Care Service Provider $ 860 0.05%
Industrial Materials $ 844 0.05%
Instruments $ 7,235 0.46%
Machinery $ 2,601 0.17%
Medical Products & Supplies $ 121,966 7.84%
Metal Fabrication & Hardware $ 51,534 3.31%
Office Equipment $ 13,916 0.89%
Railroads $ 89,856 5.77%
Real Estate & Related $ 70,018 4.50%
Retail - Specialty $ 78,396 5.04%
Steel $ 32,020 2.06%
Telecommunications $ 7,929 0.51%
Utilities - Natural Resources $ 17,888 1.15%
Total Equities $ 1,273,663 81.84%
Cash & Equivalents (7 day yield .01%) $ 282,564 18.16%
Total Invested Assets $ 1,556,227 100.00%
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, 2013, 2012 AND 2011
October October October
2013 2012 2011
--------- --------- ---------
INVESTMENT INCOME:
Dividends $ 16,882 $ 13,079 $ 10,191
EXPENSES:
Adviser Fees 15,688 13,035 11,610
Reimbursement of Adviser Fees 0 0 (477)
Legal and Professional 1,473 1,705 1,464
Director's Fees 1,600 1,200 1,400
D&O/E&O 906 905 968
Fidelity Bond 0 136 112
Taxes 455 450 455
Telephone 40 167 190
Registration Fees 23 90 75
Custodian Fees 1,195 1,687 1,589
Travel 132 0 0
Dues and Subscriptions 1,342 1,261 1,261
Total expense 22,854 20,636 18,647
Net investment income (loss) (5,972) (7,557) (8,456)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from
securities transactions (4,630) (23,948) 13,478
Unrealized appreciation (depreciation)
during the period 357,908 87,830 76,352
Net gain (loss) on investments 353,278 63,882 89,830
CHANGE IN NET ASSETS FROM OPERATIONS $ 347,306 $ 56,325 $ 81,374
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED OCTOBER 31, 2013
2012 AND 2011
October October October
2013 2012 2011
--------- --------- ---------
CHANGE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (5972) (7,557) $ (8,456)
Net realized gain (loss) from
security transactions (4,630) (23,948) 13,478
Net change in unrealized appreciation
(depreciation) of investments 357,908 87,830 76,352
Change in net assets from operations 347,306 56,325 81,374
CAPITAL SHARE TRANSACTIONS:
Sales 113,714 98,950 68,765
Redemptions (8,233) (7,954) (25,705)
Total capital share transactions 105,481 90,996 43,060
Increase (decrease) in net assets 452,787 147,321 124,434
NET ASSETS:
Beginning of period 1,101,480 954,159 829,725
End of period $ 1,554,267 1,101,480 $ 829,725
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, 2013
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 and is
in compliance with FASB ASC 820-10-50. 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. As of October 31, 2013 all securities are valued
through an exchange. In cases where market prices are unreliable or not
readily available, for example, when trading on securities are halted as
permitted by the SEC or when there is no trading volume on an Over-the-Counter
security held by the Fund, the Fund relies on fair value pricing provided by
the Adviser. In performing its fair value pricing, the Adviser acts under the
ultimate supervision of, and follows, the policies of the Board of Directors.
The Board of Directors retains the right to determine its own fair value
price should it have reason to believe the price provided by the Adviser does
not reflect fair value. Valuing securities at fair value involves greater
reliance on judgment than securities that have readily available market
quotations. There can be no assurance the Fund could obtain the fair value
assigned to a security if they were to sell the security at approximately the
time at which the Fund determines their net asset value per share.
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, 2013 the Series has capital loss carryforwards
of $31,169 which will begin to expire in five years and fully expire after
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, 2013, the Series purchased $0 of common
stock. During the same period, the Series sold $23,897 of common stock.
For the year ended October 31, 2012, the Series purchased $53,214 of common
stock. During the same period, the Series sold $518 of common stock.
For the year ended October 31, 2011, the Series purchased $17,743 of common
stock. During the same period, the Series sold $19,331 of common stock.
At October 31, 2013, the gross unrealized appreciation for all securities
totaled $717,010 and the gross unrealized depreciation for all securities
totaled $30,986, or a net unrealized appreciation of $686,024. The aggregate
cost of securities for federal income tax purposes at October 31, 2013 was
$587,639.
At October 31, 2012, the gross unrealized appreciation for all securities
totaled $386,389 and the gross unrealized depreciation for all securities
totaled $58,272, or a net unrealized appreciation of $328,117. The aggregate
cost of securities for federal income tax purposes at October 31, 2012 was
$616,678.
At October 31, 2011, the gross unrealized appreciation for all securities
totaled $322,675 and the gross unrealized depreciation for all securities
totaled $82,389, or a net unrealized appreciation of $240,286. The aggregate
cost of securities for federal income tax purposes at October 31, 2011 was
$590,421.
NOTE D - INVESTMENT ADVISORY AGREEMENT
Carosa Stanton Asset Management, LLC serves as investment adviser to the
Fund pursuant to an investment adviser 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 adviser 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 adviser 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 as part of its contract to
forego sufficient investment adviser 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 years ended October 31, 2013, October 31, 2012 and October 31,
2011, the fund paid investment adviser fees of $15,688, $13,035 and
$11,133, respectively.
On October 31, 2013, the fund had $1,502 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 October 31, 2010 61,875.070 $ 713,809
Shares sold during 2011 4,792.983 68,765
Shares redeemed during 2011 (1,740.992) (25,705)
Balance at October 31, 2011 64,927.061 $ 756,869
Shares sold during 2012 6,569.287 98,950
Shares redeemed during 2012 (555.259) (7,954)
Balance at October 31, 2012 70,941.089 $ 847,865
Shares sold during 2013 6,650.966 113,714
Shares redeemed during 2013 (494.809) (8,233)
Balance at October 31, 2013 77,097.246 $ 953,346
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, 2013, 2012, 2011, 2010 AND 2009
October October October October October
2013 2012 2011 2010 2009
NET ASSET VALUE,
beginning of period $15.53 $14.70 $13.41 $ 10.64 $ 11.02
INCOME FROM INVESTMENT OPERATIONS
Net investment income
(loss) (0.08) (0.11) (0.13) (0.02) 0.01
Net gain (loss) on
securities both
realized and unrealized 4.71 0.94 1.42 2.79 (0.39)
Total from investment
operations 4.63 0.83 1.29 2.77 (0.38)
DISTRIBUTIONS
Dividends 0.00 0.00 0.00 0.00 0.00
NET ASSET VALUE, end of
period $ 20.16 $ 15.53 $ 14.70 $ 13.41 $ 10.64
NET ASSETS, end of
period $1,554,267 $1,101,480 $954,159 $829,725 $694,485
Actual Actual Actual Actual Actual
RATIO OF EXPENSES TO
AVERAGE NET ASSETS* 1.7$% 1.97% 2.00% 2.00% 2.00%
RATIO OF EXPENSES TO AVERAGE NET ASSETS
BEFORE REIMBURSEMENT* 1.74% 1.97% 2.06% 2.28% 2.28%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* (0.45)% (0.72)% (0.91)% (0.17)% 0.11%
PORTFOLIO TURNOVER RATE* 0.00% 0.05% 1.91% 0.00% 4.02%
TOTAL RETURN 29.81% 5.65% 9.62% 26.03% (3.45)%
* 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 5/1/13 10/31/13 Expense Ratio During Period+
Unrestricted Series $ 1,000.00 $ 1,103.40 1.63% $ 8.50
Greater Western
New York Series 1,000.00 1,149.40 1.74% $ 9.27
HYPOTHETICAL++
Unrestricted Series 1,000.00 1,025.00 1.63% $ 8.18
Greater Western
New York Series 1,000.00 1,025.00 1.74% $ 8.74
+ 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, 2013 to October 31, 2013).
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, 53 President; Term of Office: President, Founder 2 N/A
2 Lantern Lane Director; N/A Carosa Stanton
Honeoye Falls, Chairman of Length of Time Asset Management, LLC;
New York 14472 Board; Chief Served: President, Director
Compliance Since 1997 and Chairman of the
Officer Board, Bullfinch Fund, Inc.
Gordon Stanton, 55 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 Asset Management, LLC;
New York, Served: Vice-President,
NY 10128 Since 1997 and Director,
Bullfinch Fund, Inc.;
Associate, Brown Harris
Stevens Residential
Betsy Kay Carosa, 53 Corporate Term of Office: Office Manager 2 N/A
2 Lantern Lane Secretary N/A Carosa Stanton
Honeoye Falls, Length of Time Asset Management, LLC;
NY 14472 Served: Corporate Secretary,
Since 1997 Bullfinch Fund, Inc.
</Table>
INDEPENDENT DIRECTORS
<Table>
Thomas M. Doeblin, 54 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, 68 Director Term of Office: Co-Founder, Vice Chairman 2 N/A
6288 Bobble Hill Road Audit N/A E3 Rochester
Naples, Committee Length of Time President
NY 14512-9700 Served: Coach & Equipment
Since 2008 Manufacturing Co.
John P. Lamberton, 53 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;
NY 11354 Served:
Since 2003
William E.J. Martin, 53 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.
Lois Irwin, 61 Director Term of Office: Marketing Consultant 2 N/A
33 Oak Meadow Trail N/A Director of Provider Svcs
Pittsford, Length of Time Ultramobile Imaging;
NY 14534 Served: VP Sales & Marketing
Since 2006 Complemar Partners
Michael W. Reynolds, 53 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:
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
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.
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. However, the board did not compare advisory fees of each fund to
the advisory fees 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.
10/31/2013 10/31/2012
Audit Fees $13,500 $13,250
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 20, 2013
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 20, 2013