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: October 31
Date of reporting period: 11/01/13 - 04/30/14
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)
Semi-Annual Report
April 30, 2014
Management's Discussion of Fund Performance
June 27, 2014
Dear Fellow Shareholders:
We are very proud to present the April 2014 Semi-Annual Report of Bullfinch
Fund, Inc. This report contains the unaudited financial statements for both
the Unrestricted Series and the Greater Western New York Series.
These last six months have been very good to our shareholders as we have
soundly bested our benchmark (the ValueLine Geometric Index). It's
important to remember, though, that our conservative long-term investment
style has historically lagged during market peaks and some feel the market
is peaking now. Still, past performance can never guarantee future
results, so no one can predict what the future holds.
Remember, our focus has always been on reducing the downside. This has
helped us over the long-term. Recall how well we did, both in relative
and absolute terms, during the market drops of the early and late 2000s.
We continue to hold our defensive posture today. That said, we cannot
get more defensive than we already are in the Greater Western New York
Series (the SEC requires us to keep 80% invested in local stocks at
all times, even when we think the market is overvalued).
We maintain this defensive position because the economy is worsening.
We are near recessionary levels. We believe economic fundamentals do
not support the market at these heights. More so, when the Federal
Reserve eased quantitative easing in January, the market dropped
nearly 10%. The Fed immediately returned to its policy of easing and
the market recovered (and then some).
In terms of individual stock performance, the Unrestricted Series was
led by Allergan, which is in the midst of a hostile takeover. Mylan,
Inc., Edwards Lifesciences, Corning, NVIDIA and Oracle rounded out the
rest of the leaders, all up more than 22%. In all, for the period,
about half of our stocks were up digits. Underperforming companies
include Meridian Biosciences, Amazon.com, Zumiez and AAR Corp, all down
by more than 11%. Part of what we may be seeing here is part of the
rotation from last year's winners to last year's laggards.
In the Greater Western New York Series, Frontier Communications and
Southwest Airlines led the pack with returns in excess of 44%. In
addition, 7 other stocks were up more than 20% and another 7 were up
more than 10%. Unfortunately, nine stocks had negative performance,
including three that were down more than 10% (Ecology and the
Environment, Graham Corp, VirtualScopics and Zumiez), the first
three highly susceptible to liquidity constraints.
The market continues to offer limited buying opportunities, but we
have taken advantage of selling opportunities as the market rises.
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 4/30/14. 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
$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 $15,418 $11,965
10/31/2013 $19,149 $15,962
4/30/2014 $20,487 $16,393
Annualized
Returns
Ending Bullfinch Fund, Inc. Value Line
4/30/2014 Unrestricted Series Geometric Index
One-Year + 17.54% + 18.13%
Five-Year + 14.07% + 15.71%
Ten-Year + 5.95% + 2.55%
(GRAPH OMITTED)
Year Bullfinch Fund, Inc. Value Line
Ending Greater Western New York Series Geometric Index
$10,000 $10,000
6/30/2004 $12,469 $12,740
6/30/2005 $13,469 $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 $17,668 $11,965
10/31/2013 $22,935 $15,962
4/30/2014 $24,346 $16,393
Annualized
Returns
Ending Bullfinch Fund, Inc. Value Line
4/30/2013 Greater Western New York Series Geometric Index
One-Year + 22.01% + 18.13%
Five-Year + 17.32% + 15.71%
Ten-Year + 7.17% + 2.55%
UNRESTRICTED SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF APRIL 30, 2014
(UNAUDITED)
UNRESTRICTED SERIES
(A SERIES WITHIN THE BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2014 (UNAUDITED)
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $3,219,978 $ 5,473,912
Cash 1,312,990
Accrued Interest and Dividends 3,162
Prepaid Expenses 4,174
------------
Total Assets $ 6,794,238
============
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 11,956
NET ASSETS
Net Assets (Equivalent to $19.04 per share
based on 356,199.751 shares of stock outstanding) 6,782,282
------------
Total Liabilities and Net Assets $ 6,794,238
============
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
10,000,000 Shares Authorized,
356,199.751 Shares Outstanding $ 4,705,040
Accumulated Net Investment Loss (176,692)
------------
Net Unrealized Depreciation on Investments 2,253,934
============
Net Assets at April 30, 2014 $ 6,782,282
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES APRIL 30, 2014
(UNAUDITED)
Historical
Common Stocks - 100% Shares Cost Value
Computers - Software - 13.06%
Adobe Systems Inc. 3,250 84,678 $ 200,493
Microsoft Corp. 6,200 151,626 250,480
Oracle Corp. 5,500 56,122 224,840
Synopsis, Inc. 5,600 115,460 210,672
--------- ---------
407,886 886,485
Pharmaceuticals - 9.84%
Allergan 2,100 183,759 348,264
Mylan Inc. 6,300 87,179 319,914
--------- ---------
270,938 668,178
Medical Products and Supplies - 8.63%
Edwards Lifesciences 2,750 184,878 224,042
Johnson & Johnson 2,400 136,714 243,096
Medtronic Inc. 300 10,839 17,646
Stryker Corporation 1,300 62,871 101,075
--------- ---------
395,302 585,859
Retail - Specialty - 6.75%
Fastenal Co. 4,800 83,684 240,384
Zumiez Inc. 8,900 193,235 217,605
--------- ---------
276,919 457,989
Semiconductors - 6.40%
Intel Corp. 8,000 143,610 213,520
NVIDIA Corp. 5,300 95,318 97,891
Tessera Technologies 5,600 96,089 122,808
--------- ---------
335,017 434,219
Retail - General - 4.03%
Fred's Inc. Class A 15,000 152,560 273,300
Electrical Equipment - 3.87%
Corning Inc. 7,300 66,773 152,643
General Electric Co. 4,100 77,607 110,249
--------- ---------
144,380 262,892
Insurance - 3.78%
Gallagher Arthur J & Co. 5,700 138,298 256,614
Computers - Networking - 3.64%
Cisco Systems, Inc. 10,700 160,238 247,277
Historical
Shares Cost Value
Internet Services - 3.27%
Amazon.com Inc. 730 145,358 222,015
Food Processing - 3.19%
Sensient Technologies 4,000 80,550 216,200
Commercial Services - 2.93%
Paychex, Inc. 4,750 130,495 198,598
Tobacco Products - 2.57%
Universal Corp. VA 3,200 120,756 174,624
Health Care Service Provider - 2.25%
Almost Family Inc. 7,100 147,274 152,437
Biotech - 2.00%
Meridian Bioscience, Inc. 6,800 118,878 135,796
Aerospace - 1.68%
AAR Corporation 4,400 83,191 113,960
Electronics Components - 1.61%
TE Connectivity Ltd. 1,850 50,371 109,113
Industrial Services - 1.15%
Expeditors Int'l Washington 1,900 61,567 78,356
--------- ---------
Total Investments in Securities 3,219,978 5,473,912
Schwab Money Market - 19.35% 1,312,990
7 Day Yield .01%
Total Invested Assets $3,219,978 $ 6,786,902
--------- ---------
Total Investments in Securities 3,081,096 4,588,600
========= =========
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES APRIL 30, 2014
(UNAUDITED)
Table of Industries
Industry Market Value Pct.
------------------------------ -------------- -----
Aerospace $ 113,960 1.68%
Biotech $ 135,796 2.00%
Commercial Services $ 198,598 2.93%
Computers - Networking $ 247,277 3.64%
Computers - Software $ 886,485 13.06%
Electrical Equipment $ 262,892 3.87%
Electronics Components $ 109,113 1.61%
Food Processing $ 216,200 3.19%
Health Care Service Provider $ 152,437 2.25%
Industrial Services $ 78,356 1.15%
Insurance $ 256,614 3.78%
Internet Services $ 222,015 3.27%
Medical Products & Supplies $ 585,859 8.63%
Pharmaceuticals $ 668,178 9.84%
Retail - General $ 273,300 4.03%
Retail - Specialty $ 457,989 6.75%
Semiconductors $ 434,219 6.40%
Tobacco Products $ 174,624 2.57%
----------- -------
Total Equities $ 5,473,912 80.65%
Cash & Equivalents (7 day yield .01%)$ 1,312,990 19.35%
----------- -------
Total Invested Assets $ 6,786,902 100.00%
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS FOR THE PERIOD FROM NOVEMBER 1, 2013
TO APRIL 30, 2014, FOR THE YEARS ENDED OCTOBER 31, 2013, 2012
and 2011 (UNAUDITED)
4/2014 10/2013 10/2012 10/2011
INVESTMENT INCOME:
Dividends $ 42,412 $ 108,000 $ 78,308 $ 85,600
EXPENSES:
Adviser Fees 33,814 59,091 51,906 47,651
Legal and Professional 6,236 13,259 13,443 13,176
Director's Fees 1,200 1,600 1,200 1,400
D&O/E&O 4,106 8,156 8,150 8,707
Fidelity Bond 921 0 1,228 1,008
Taxes 300 454 450 454
Telephone 94 40 167 190
Registration Fees 775 2,297 865 850
Custodian Fees 3,779 3,475 5,562 6,896
Travel 0 1,189 0 0
Dues and Subscriptions 1,764 2,142 2,061 2,061
-------- -------- -------- --------
Total expense 52,989 91,703 85,032 82,393
-------- -------- -------- --------
Net investment income (loss)(10,577) 16,297 (6,724) 3,207
-------- -------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from securities
Transactions 183,453 246,936 143,783 238,287
Unrealized appreciation (depreciation)
during the period 267,832 955,907 109,313 195,567
-------- -------- -------- --------
Net gain (loss)
on investments 451,285 1,202,843 253,096 433,854
-------- -------- -------- --------
CHANGE IN NET ASSETS
FROM OPERATIONS $ 440,708 $1,219,140 $ 246,372 $ 437,061
======== ======== ======== ========
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS FOR THE PERIOD FROM NOVEMBER 1, 2013
TO APRIL 30, 2014, FOR THE YEARS ENDED OCTOBER 31, 2013, 2012
AND 2011 (UNAUDITED)
4/2014 10/2013 10/2012 10/2011
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment
income (loss) $ (10,577) $ 16,297 $ (6,724) $ 3,207
Net realized gain (loss) from securities
transactions 183,453 246,936 143,783 238,287
Net change in unrealized appreciation (depreciation)
of investments 267,832 955,907 109,313 195,567
-------- -------- -------- --------
Change in net assets
from operations 440,708 1,219,140 246,372 437,061
CAPITAL SHARE TRANSACTIONS:
Sales 121,054 355,503 294,983 266,136
Redemptions (66,673) (208,578) (226,931) (453,229)
-------- -------- -------- --------
Total capital share
Transactions 54,381 146,925 68,052 (187,093)
-------- -------- -------- --------
Increase (decrease)
in net assets 495,089 1,366,065 314,424 249,968
NET ASSETS:
Beginning of period 6,287,193 4,921,128 4,606,704 4,356,736
-------- -------- -------- --------
End of period $ 6,782,282 $ 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 APRIL 30, 2014 (UNAUDITED)
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 April 30, 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. The Series made a distribution of its capital gains of $246,936
to its shareholders on December 27, 2013, in the form of stock dividends
equal to 12,715.543 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 period from November 1, 2013 to April 30, 2014, the Series
purchased $58,469 of common stock. During the same period, the Series
sold $386,090 of common stock.
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 April 30, 2014, the gross unrealized appreciation for all securities
totaled $2,253,934 and the gross unrealized depreciation for all
securities totaled $0, or a net unrealized appreciation of $2,253,934.
The aggregate cost of securities for federal income tax purposes at
April 30, 2014 was $3,219,978.
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 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 period from November 1, 2013 to April 30, 2014, and the years
ended October 31, 2013, October 31, 2012 and October 31, 2011, the fund
paid investment adviser fees of $33,814, $59,091, $51,906, and $47,651,
respectively.
On April 30, 2014, the fund had $5,720 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
Shares sold during period 6,432.278 121,054
Shares redeemed during period (3,548.298) (66,673)
Reinvestment of Distributions,
December 27, 2013 12,715.543 246,936
Balance at April 30, 2014 356,199.751 $ 4,705,040
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE PERIOD FROM NOVEMBER 1, 2013 TO APRIL 30, 2014,
FOR THE YEARS ENDED OCTOBER 31, 2013, 2012, 2011, 2010 AND 2009, FOR THE
FOUR MONTHS ENDED OCTOBER 31, 2008, AND FOR THE YEAR ENDED JUNE 30, 2008
(UNAUDITED)
April October October October October October
2014 2013 2012 2011 2010 2009
NET ASSET VALUE,
beginning
of period $ 18.46 $ 15.35 $ 14.62 $ 13.28 $ 11.27 $ 10.68
INCOME FROM INVESTMENT OPERATIONS
Net investment income
(loss) (0.03) 0.05 (0.02) 0.01 (0.02) (0.01)
Net gain (loss) on
securities both realized
and unrealized (0.11) 0.82 0.74 1.33 2.03 0.58
Total from investment
operations (0.14) 0.87 1.72 1.34 2.01 0.57
DISTRIBUTIONS
Dividends 0.72 0.51 0.01 0.00 0.00 0.02
NET ASSET VALUE,
end of period $ 19.04 $ 18.46 $ 15.35 $ 14.62 $ 13.28 $ 11.27
NET ASSETS, end of period
$6,782,282 $5,776,662 $4,921,128 $4,606,704 $4,356,736 $3,996,997
Actual** Actual Actual Actual Actual Actual
RATIO OF EXPENSES
TO AVERAGE
NET ASSETS* 0.81%** 1.63% 1.73% 1.82% 1.89% 1.84%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE
NET ASSETS* (0.16%)** 0.29% (0.14)% 0.07% (0.14)% (0.07)%
PORTFOLIO TURNOVER
RATE* 0.89%** 6.54% 7.23% 11.37% 19.94% 16.23%
TOTAL RETURN 6.99% 24.20% 5.06% 10.09% 17.83% 5.73%
* Per share amounts calculated using the average shares method
** The ratios presented were calculated using operating data for the six-month
period from November 1, 2013 to April 30, 2014
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 APRIL 30, 2014
(UNAUDITED)
GREATER WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2014 (UNAUDITED)
ASSETS
Investments in securities, at fair value,
identified cost of $670,220 $ 1,386,410
Cash 291,651
Accrued Interest and Dividends 560
Prepaid Expenses 464
----------
Total assets $ 1,679,085
==========
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 2,287
----------
NET ASSETS
Net assets (equivalent to $21.40 per share
based on 78,359.886 shares of stock outstanding) 1,676,798
----------
Total Liabilities and Net Assets $ 1,679,085
==========
COMPOSITION OF NET ASSETS
Shares of common Stock - Par Value $.01;
10,000,000 Shares Authorized,
78,359.886 Shares Outstanding $ 980,114
Accumulated net investment loss (19,506)
Net unrealized appreciation on investments 716,190
----------
Net assets at April 30, 2014 $1,676,798
==========
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 April 30, 2014 (UNAUDITED)
Historical
Common Stocks - 100% Shares Cost Value
Electronics Components - 7.90%
Astronics Corp. 940 3,025 $53,693
IEC Electronics Corp. 4,518 6,984 19,924
TE Connectivity Ltd. 1,000 27,259 58,980
-------- --------
37,268 132,597
Medical Products & Supplies - 7.73%
Bristol-Myers Squibb Co. 1,000 21,938 50,090
Greatbatch Inc. 850 18,984 39,125
Johnson & Johnson 400 22,617 40,516
-------- --------
63,539 129,731
Foods & Beverages - 7.14%
Constellation Brands Inc. 1,500 15,118 119,760
Aerospace - 6.12%
Harris Corporation 500 24,989 36,760
Moog, Inc. Class A 637 15,976 41,692
Northrop Grumman 200 2,294 24,302
-------- --------
43,259 102,754
Electrical Equipment - 5.92%
Corning, Inc. 2,200 26,502 46,002
General Electric Co. 1,450 35,248 38,991
Ultralife Corporation 4,000 25,175 14,400
-------- --------
86,925 99,393
Retail - Specialty - 5.52%
Fastenal Co. 800 13,954 40,064
Zumiez Inc. 2,150 46,937 52,567
------- --------
60,891 92,631
Railroads - 5.31%
Genesee & Wyoming Class A 900 2,522 89,109
Banking & Finance - 4.84%
Community Bank System 1,200 23,452 44,628
M &T Bank Corp. 300 29,839 36,603
-------- --------
53,291 81,231
Real Estate & Related - 4.18%
Home Properties Inc. 400 14,797 24,640
Sovran Self Storage 600 22,310 45,540
-------- --------
37,107 70,180
Telecommunications - 3.69%
Frontier Communications 10,400 57,238 61,880
Airlines - 3.67%
Southwest Airlines Co. 2,550 46,848 61,634
Automotive - 3.53%
Monro Muffler Brake Inc. 1,050 12,443 59,220
Computers - Services - 3.30%
Computer Task Group Inc. 3,500 11,872 55,335
Historical
Shares Cost Value
Metal Fabrication & Hardware - 2.49%
Graham Corp. 1,400 15,140 41,776
Commercial Services - 2.43%
Paychex, Inc. 975 25,852 40,765
Computers - Software - 2.19%
Oracle Corp. 900 12,070 36,792
Steel - 2.04%
Gibraltar Industries Inc. 2,000 25,111 34,160
Environmental Services - 1.14%
Ecology & Environment 2,000 25,399 19,160
Utilities - Natural Resources - 1.10%
National Fuel Gas Co. 250 5,625 18,410
Office Equipment - 1.01%
Xerox Corp. 1,400 17,816 16,926
Computers - Distributors - 0.64%
Ingram Micro Inc. 400 4,230 10,784
Instruments - 0.48%
Taylor Devices 877 4,394 7,982
Machinery - 0.16%
Columbus McKinnon Corp. 100 2,344 2,649
Industrial Materials - 0.05%
Servotronics, Inc. 100 937 783
Health Care Service Provider - 0.04%
VirtualScopics Inc. 200 2,981 768
-------- --------
Total Investments in Securities 670,220 1,386,410
Schwab Money Market - 17.38% 291,651
7 Day Yield .01%
-------- --------
Total Invested Assets $ 670,220 $1,678,061
======== ========
GREATER WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES APRIL 30, 2014 (UNAUDITED)
Table of Industries
Industry Market Value Pct.
------------------------------ -------------- -----
Aerospace $ 102,754 6.12%
Airlines $ 61,634 3.67%
Automotive $ 59,220 3.53%
Banking & Finance $ 81,231 4.84%
Commercial Services $ 40,765 2.43%
Computers - Distributors $ 10,784 0.64%
Computers - Services $ 55,335 3.30%
Computers - Software $ 36,792 2.19%
Electrical Equipment $ 99,393 5.92%
Electronics Components $ 132,597 7.90%
Environmental Services $ 19,160 1.14%
Foods & Beverages $ 119,760 7.14%
Health Care Service Provider $ 768 0.04%
Industrial Materials $ 783 0.05%
Instruments $ 7,982 0.48%
Machinery $ 2,649 0.16%
Medical Products & Supplies $ 129,731 7.73%
Metal Fabrication & Hardware $ 41,776 2.49%
Office Equipment $ 16,926 1.01%
Railroads $ 89,109 5.31%
Real Estate & Related $ 70,180 4.18%
Retail - Specialty $ 92,631 5.52%
Steel $ 34,160 2.04%
Telecommunications $ 61,880 3.69%
Utilities - Natural Resources $ 18,410 1.10%
-------------- --------
Total Equities $ 1,386,410 82.62%
Cash & Equivalents
(7 day yield .01%) $ 291,651 17.38%
-------------- --------
Total Invested Assets $ 1,678,061 100.00%
============== ========
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 PERIOD FROM NOVEMBER 1, 2013 TO
APRIL 30, 2014, FOR THE YEARS ENDED OCTOBER 31, 2013, 2012 AND 2011
(UNAUDITED)
4/2014 10/2013 10/2012 10/2011
INVESTMENT INCOME:
Dividends $ 8,785 $ 8,017 $ 13,079 $ 10,191
EXPENSES:
Adviser Fees 9,273 15,688 13,035 11,610
Reimbursement of Adviser Fees 0 0 0 (477)
Legal and Professional 709 1,473 1,705 1,464
Director's Fees 1,200 1,600 1,200 1,400
D&O/E&O 456 909 905 968
Fidelity Bond 102 0 136 112
Taxes 300 455 450 455
Telephone 94 40 167 190
Registration Fees 1,685 23 90 75
Custodian Fees 1,538 1,195 1,687 1,589
Travel 0 132 0 0
Dues and Subscriptions 964 1,342 1,261 1,261
-------- -------- -------- ---------
Total expense 16,321 22,854 20,636 18,647
-------- -------- -------- ---------
Net investment income (loss) (7,536) (5,972) (7,557) (8,456)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from securities
transactions 73,134 (4,630) (23,948) 13,478
Unrealized appreciation (depreciation)
during the period 30,165 357,908 87,830 76,352
-------- -------- -------- ---------
Net gain (loss)
on investments 103,299 353,278 63,882 89,830
-------- -------- -------- ---------
CHANGE IN NET ASSETS FROM
OPERATIONS $ 95,763 $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 PERIOD FROM NOVEMBER 1, 2013
TO APRIL 30, 2014, FOR THE YEARS ENDED OCTOBER 31, 2013, 2012 AND 2011
(UNAUDITED)
4/2014 10/2013 10/2012 10/2011
DECREASE IN NET ASSETS FROM OPERATIONS:
Net investment
income (loss) $ (7,536) $ (5,972) $ (7,557) $ (8,456)
Net realized gain (loss) from
securities transactions 73,134 (4,630) (23,948) 13,478
Net change in unrealized
appreciation (depreciation)
of investments 30,165 357,908 87,830 76,352
-------- -------- -------- ---------
Change in net assets
from operations 95,763 347,306 56,325 81,374
CAPITAL SHARE TRANSACTIONS:
Sales 27,548 113,714 98,950 68,765
Redemptions (780) (8,233) (7,954) (25,705)
-------- -------- -------- ---------
Total capital share
transactions 26,768 105,481 90,996 43,060
-------- -------- -------- ---------
Increase (decrease)
in net assets 122,531 452,787 147,321 124,434
NET ASSETS:
Beginning of period 1,544,267 1,101,480 954,159 829,725
-------- -------- -------- ---------
End of period $1,676,798 $1,554,267 $1,101,480 $ 954,159
======== ======== ======== =========
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 APRIL 30, 2014 (UNAUDITED)
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 April 30, 2012 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, 2012 the Series has capital loss carryforwards of $26,539
which expire in six 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 period from November 1, 2013 to April 30, 2014, the Series
purchased $102,512 of common stock. During the same period, the Series
sold $92,026 of common stock.
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 April 30, 2014, the gross unrealized appreciation for all
securities totaled $ 736,461 and the gross unrealized depreciation
for all securities totaled $20,271, or a net unrealized appreciation
of $716,190. The aggregate cost of securities for federal income tax
purposes at April 30, 2014 was $670,220.
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 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 period from November 1, 2013 to April 30, 2014, and the years
ended October 31, 2013, October 31, 2012 and October 31, 2011, the fund
paid investment adviser fees of $9,273, $15,688, $13,035, and $11,133
respectively.
On April 30, 2014 the fund had $1,578 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
Shares sold during period 1,301.191 27,548
Shares redeemed during period (38.551) (780)
Balance at April 30, 2014 78,359.886 $ 980,114
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE PERIOD FROM NOVEMBER 1, 2013 TO APRIL 30, 2014,
FOR THE YEARS ENDED OCTOBER 31, 2013, 2012, 2011, 2010 AND 2009
(UNAUDITED)
April October October October October October
2014 2013 2012 2011 2010 2009
NET ASSET VALUE,
beginning of
period $20.16 $15.53 $14.70 $13.41 $ 10.64 $ 11.02
INCOME FROM INVESTMENT OPERATIONS
Net investment income
(loss) (0.10) (0.05) (0.11) (0.13) (0.02) 0.01
Net gain (loss) on
securities both
realized and
unrealized 1.34 2.06 0.94 1.42 2.79 (0.39)
Total from investment
operations 1.24 2.01 0.83 1.29 2.77 (0.38)
DISTRIBUTIONS
Dividends 0.00 0.00 0.00 0.00 0.00 0.00
NET ASSET VALUE, end of
period $21.40 $17.54 $15.53 $ 14.70 $ 13.41 $ 10.64
NET ASSETS, end of period
$1,676.798 $1,337,057 $1,090,202 $954,159 $829,725 $694,485
Actual** Actual Actual Actual Actual Actual
RATIO OF EXPENSES TO AVERAGE
NET ASSETS* 1.01%** 1.74% 1.97% 2.00% 2.00% 2.00%
RATIO OF EXPENSES TO AVERAGE NET ASSETS BEFORE
REIMBURSEMENT* 1.01%** 1.74% 1.97% 2.06% 2.28% 2.28%
RATIO OF NET INVESTMENT INCOME TO AVERAGE
NET ASSETS* (0.46)%**(0.45)% (0.72)% (0.91)% (0.17)% 0.11%
PORTFOLIO TURNOVER RATE*
5.67%** 0.00% 0.05% 1.91% 0.00% 4.02%
TOTAL RETURN 6.15% 29.81% 5.65% 9.62% 26.03% (3.45)%
* Per share amounts calculated using the average shares method
** The ratios presented were calculated using operating data for the
six-month period from November 1, 2013 to April 30, 2014.
The accompanying notes are an integral part of these statements.
ADDITIONAL INFORMATION
EXPENSE TABLE Beginning Ending
Account Value Account Value Annualized Expenses Paid
ACTUAL 11/1/13 4/30/14 Expense Ratio During Period+
Unrestricted Series $ 1,000.00 $ 1,069.90 0.87% $ 4.16
Greater Western
New York Series 1,000.00 1,061.50 1.01% $ 5.16
HYPOTHETICAL+
Unrestricted Series 1,000.00 1,025.00 0.87% $ 4.07
Greater Western
New York Series 1,000.00 1,025.00 1.01% $ 5.07
+ 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 (November 1, 2012 to April 30, 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, 52 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, 54 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, 52 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
John P. Lamberton, 54 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, 54 Director Term of Office: Managing Member, 2 N/A
4410 Woodlawn Ave. N N/A Chipman and Martin, LLC;
Seattle, Length of Time Consultant, Robson Forensic;
WA 98103 Served: Aecon Buildings, Inc.;
Since 1997 Project Manager,
American Home Builders
Bryan D. Hickman, 69 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
Lois Irwin, 62 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, 53 Director Term of Office: President 2 N/A
105 Dorchester Road Audit N/A Reynolds & Company
Buffalo, Committee Length of Time
NY 14213 Served:
Since 2000
</Table>
PROXY VOTING GUIDELINES
Carosa Stanton Asset Management, LLC, the Fund's Investment Adviser,
is responsible for exercising the voting rights associated with the securities
held by the Fund. A description of the policies and procedures used by the
Adviser in fulfilling this responsibility
is available without charge, upon request, by
calling (555) 624-3150 or 1-888-BULLFINCH.
QUARTERLY FILING OF PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission (SEC) for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at
the SEC's Public Reference Room in Washington DC. Information on the operation
of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
DISCLOSURE REGARDING THE BOARD OF DIRECTORS' APPROVAL
OF THE INVESTMENT ADVISORY CONTRACT
At the Board's Annual Meeting, the Independent Directors of the Board met
separately to discuss the Adviser and reported the conclusions to the Board.
In determining whether to renew the Management and Investment Advisory
Agreements between the Fund and Carosa Stanton 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.
10/31/2013 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: June 27, 2014
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: June 27, 2014