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: 10/31/14
Date of reporting period: 11/01/13 - 10/31/14
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)
Annual Report
October 31, 2014
Management's Discussion of Fund Performance
December 23, 2012
Dear Fellow Shareholders:
We are very proud to present the October 2014 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.
The year 2014 was a record breaking year for Bullfinch Fund, Inc., with
both Series closing the fiscal year at all-time highs. The market edged
nervously higher throughout most of the year as large cap growth stocks led
the way in a tenuous economic environment. In October, signaling a shift in
leadership, the market pulled back dramatically before recovering just as
dramatically. You can see the effect of the small cap lag in our Greater
Western New York Series, but also in our benchmark, the Value Line
Geometric Index.
In the Unrestricted Series, the top performing stocks (Allergen, Edwards
Lifesciences, Almost Family, Intel Corp. and Mylan) all topped more than
40% gains for the year. Among the laggards were Meridian Bioscience Amazon,
Fastenal, Universal, Expeditors International and Fred's, all negative for
the year. The Unrestricted Series as a whole was up 15.02% in the fiscal
year vs. our benchmark which was up only 4.61%.
During the fiscal year, the Greater Western New York Series gained 11.16%.
A total of 25 individual stocks experienced greater than double digit
returns with 3 returning more than 40%. The top performing stocks
(Southwest Airlines, Frontier Communications and Constellations Brands)
represent a diverse set of industries (air travel, telecommunications and
beverages). The underperformers included Computer Task Group
(IT consulting); Servotronics (electronics); and, Ecology and Environment
(environmental consulting).
Reflecting the narrowly focused market leadership (primarily from large
cap stocks), there was a consistently wide disparity between the S&P 500
and our benchmark. For example, the price appreciation of the S&P 500 for
our fiscal year was 14.89% vs. the benchmark growth of 4.61%. Fortunately,
our results more closely resemble the S&P 500. While past performance can
never guarantee future results, we are quite proud to have achieved this
parity with the S&P 500 despite being in a generally defensive position.
To whit: we continue to be quite cautious and have maintained our defensive
(i.e., cash and equivalents) position in both funds. Though we ended last
fiscal year on the cusp of a second recession, we end this fiscal year with
a slightly more optimistic economy. Still, we don't think we're out of the
woods yet; hence, our conservative position.
As usual, rest assured you can leave any worrying to us. After all, it's not
just your money in the funds, it's our money too!
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 7/1/04 to 10/31/14. 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
6/30/2004 $10,000 $10,000
6/30/2005 $10,279 $10,483
6/30/2006 $10,413 $11,227
6/30/2007 $12,344 $13,098
6/30/2008 $11,048 $ 9,872
10/31/2008 $ 9,118 $ 6,812
10/31/2009 $ 9,640 $ 7,461
10/31/2010 $11,359 $ 9,033
10/31/2011 $12,505 $ 8,966
10/31/2012 $13,138 $ 9,391
10/31/2013 $16,318 $12,530
10/31/2014 $18,769 $13,108
Annualized
Returns Ending Bullfinch Fund Inc. Value Line
10/31/2014 Unrestricted Series Geometric Index
One - Year + 15.02% + 4.61%
Five - Year + 14.25% + 11.93%
Ten - Year + 6.84% + 3.24%
(GRAPH OMITTED)
Year Bullfinch Fund, Inc. Value Line
Ending Greater Western New York Series Geometric Index
6/30/2004 $10,000 $10,000
6/30/2005 $10,540 $10,483
6/30/2006 $11,654 $11,227
6/30/2007 $13,114 $13,098
6/30/2008 $11,779 $ 9,872
10/31/2008 $10,055 $ 6,812
10/31/2009 $ 9,708 $ 7,461
10/31/2010 $12,235 $ 9,033
10/31/2011 $13,412 $ 8,966
10/31/2012 $14,170 $ 9,391
10/31/2013 $18,394 $12,530
10/31/2014 $20,446 $13,108
Annualized
Returns Ending Bullfinch Fund Inc. Value Line
10/31/2014 Greater WNY Series Geometric Index
One - Year + 11.16% + 4.61%
Five - Year + 16.06% + 11.93%
Ten - Year + 7.89% + 3.24%
UNRESTRICTED SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF OCTOBER 31, 2012
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 and
Stockholders 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, 2014 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, 2014 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, 2014, the
results of its operations and changes in its net assets for each of the
years in the three year period ended October 31, 2014, 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.
EFP Rotenberg, LLP
Rochester, New York
December 23, 2014
UNRESTRICTED SERIES
(A SERIES WITHIN THE BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2014
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $3,481,351 $ 6,036,834
Cash & Cash Equivalents 1,100,910
Accrued Interest and Dividends 8,270
Total Assets $ 7,146,014
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 18,556
NET ASSETS
Net Assets (Equivalent to $20.42 per share based on 349,119.943
shares of stock outstanding 7,127,458
Total Liabilities and Net Assets $ 7,146,014
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
10,000,000 Shares Authorized,
349,119.943 Shares Outstanding $ 4,575,365
Accumulated Net Investment Loss & Realized Loss
from Security Transactions (3,390)
Net Unrealized Appreciation on Investments 2,555,483
Net Assets at October 31, 2014 $ 7,127,458
The accompanying notes are an integral part of these financial statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES OCTOBER 31, 2014
Level 1 - Common Stocks - 84.57%
*ASTERISK DENOTES A NON INCOME PRODUCING SECURITY
Historical
Shares Cost Value
Computers - Software - 13.49%
Adobe Systems Inc.* 3,250 84,678 227,890
Microsoft Corp. 6,200 151,626 291,090
Oracle Corp. 5,500 56,121 214,775
Synopsis, Inc.* 5,600 115,460 229,488
---------- ----------
407,885 963,243
Semiconductors - 9.22%
Cree Inc. * 6,800 207,660 214,064
Intel Corp. 5,000 85,564 170,050
NVIDIA Corporation 5,300 95,318 103,562
Tessera Technologies Inc. 5,600 96,089 170,184
---------- ----------
484,631 657,860
Medical Products and Supplies - 8.57%
Edwards Lifesciences* 2,750 184,878 332,530
Johnson & Johnson 2,400 136,714 258,672
Medtronic Inc. 300 10,839 20,448
---------- ----------
332,431 611,650
Pharmaceuticals - 7.39%
Allergan Inc. 1,000 87,504 190,060
Mylan Inc.* 6,300 87,179 337,365
---------- ----------
174,683 527,425
Retail - Specialty - 7.12%
Fastenal Co. 4,800 83,684 211,392
Zumiez Inc.* 8,900 193,235 297,082
---------- ----------
276,919 508,474
Telecommunications - 3.83%
AT&T Corp. 3,800 134,073 132,392
Verizon Communications 2,800 136,812 140,700
---------- ----------
270,885 273,092
Insurance - 3.81%
Arthur J Gallagher & Co 5,700 138,298 271,890
Computers - Networking - 3.67%
Cisco Systems, Inc. 10,700 160,238 261,829
Electrical Equipment - 3.57%
Corning Inc. 7,300 66,773 149,139
General Electric Co. 4,100 77,607 105,821
---------- ----------
144,380 254,960
Food Processing - 3.32%
Sensient Technologies 4,000 80,550 236,720
Retail - General - 3.30%
Fred's Inc. Class A 15,000 152,560 235,500
Internet Services - 3.12%
Amazon.com Inc.* 730 145,358 222,986
Commercial Services - 3.12%
Paychex, Inc. 4,750 130,496 222,965
Health Care Service Provider - 2.93%
Almost Family Inc.* 7,100 147,274 209,024
Tobacco Products - 2.00%
Universal Corp. VA 3,200 120,756 142,400
Biotech - 1.76%
Meridian Bioscience Inc. 6,800 118,878 126,072
Aerospace - 1.63%
AAR Corporation 4,400 83,191 116,600
Electronics Components - 1.58%
TE Connectivity Ltd. 1,850 50,371 113,090
Industrial Services - 1.14%
Expeditors Int'l Washington 1,900 61,567 81,054
---------- ----------
Total Investments in Securities 3,481,351 6,036,834
Level 1 - Cash & Equivalents - 15.43%
US Treasury Bill - 9.81% 699,985 699,985
Due 12/26/14 0 .00%
Schwab Money Market - 5.62% 400,925 400,925
7 day Yield .01%
---------- ----------
Total Invested Assets $ 3,481,351 $ 7,137,744
The accompanying notes are an integral part of these financial statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES OCTOBER 31, 2014
Table of Industries
Industry Market Value Percent
Aerospace $ 116,600 1.63%
Biotech $ 126,072 1.76%
Commercial Services $ 222,965 3.12%
Computers - Networking $ 261,829 3.67%
Computers - Software $ 963,243 13.49%
Electrical Equipment $ 254,960 3.57%
Electronics Components $ 113,090 1.58%
Food Processing $ 236,720 3.32%
Health Care Service Provider $ 209,024 2.93%
Industrial Services $ 81,054 1.14%
Insurance $ 271,890 3.81%
Internet Services $ 222,986 3.12%
Medical Products & Supplies $ 611,650 8.57%
Pharmaceuticals $ 527,425 7.39%
Retail - General $ 235,500 3.30%
Retail - Specialty $ 508,474 7.12%
Semiconductors $ 657,860 9.22%
Telecommunications $ 273,092 3.83%
Tobacco Products $ 142,400 2.00%
------------- -------
Total Equities $ 6,036,834 84.57%
US Treasury Bill (Due 12/26/14 0.00%) $ 699,985 9.81%
Cash & Equivalents (7 day yield .01%) $ 400,925 5.62%
------------- -------
Total Invested Assets $ 7,137,744 100.00%
The accompanying notes are an integral part of these financial statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED OCTOBER 31, 2014, 2013 AND 2012
October October October
2014 2013 2012
INVESTMENT INCOME:
Dividend and Interest Income $ 97,659 $ 108,000 $ 78,308
EXPENSES:
Adviser Fees 69,293 59,091 51,906
Legal and Professional 13,072 13,259 13,443
Director's Fees 1,200 1,600 1,200
D&O/E&O 8,280 8,156 8,150
Fidelity Bond 921 0 1,228
Taxes 450 454 450
Telephone 134 40 167
Registration Fees 1,550 2,297 865
Custodian Fees 3,932 3,475 5,562
Travel 0 1,189 0
Dues and Subscriptions 2,084 2,142 2,061
Total expense 100,916 91,703 85,032
Net investment income (loss) (3,257) 16,297 (6,724)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain from
securities transactions 365,726 246,936 143,783
Unrealized appreciation
during the period 569,374 955,907 109,313
Net gain on investments 935,100 1,202,843 253,096
CHANGE IN NET ASSETS FROM OPERATIONS $931,843 $1,219,140 $246,372
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED OCTOBER 31, 2014, 2013 AND 2012
October October October
2014 2013 2012
CHANGE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (3,257) $ 16,297 $ (6,724)
Net realized gain from
security transactions 365,726 246,936 143,783
Net change in unrealized appreciation
of investments 569,374 955,907 109,313
Change in net assets from operations 931,843 1,219,140 246,372
CAPITAL SHARE TRANSACTION:
Sales 305,239 355,503 294,983
Redemptions (396,817) (208,578) (226,931)
Distribution to shareholders from:
Distribution of capital gains (246,936) (143,777) 0
Distribution of ordinary income (16,284) (19,498) (3,217)
Reinvested dividend distributions 263,220 163,275 3,217
Total capital share transactions (91,578) 146,925 68,052
Increase in net assets 840,265 1,366,065 314,424
NET ASSETS:
Beginning of period 6,287,193 4,921,128 4,606,704
End of period $7,127,458 $6,287,193 $4,921,128
The accompanying notes are an integral part of these financial statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2014
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
Fair Value Measurements - ASC 820-10 establishes a fair value hierarchy
which requires an entity to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value. The
standard describes three levels of inputs that may be used to measure
fair value:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities
in active markets that the entity has the ability to access as of the
measurement date.
Level 2: Significant other observable inputs other than Level 1 prices
such as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active; or other inputs that are observable or can be
corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect a reporting
entity's own assumptions about the assumptions that market participants
would use in pricing an asset or liability.
The following is a description of the valuation methodologies used for
assets measured at fair value:
Cash & Equivalents - Cash consists of amounts deposited in money market
accounts or treasury bills 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.
ASSETS AT FAIR VALUE AS OF:
10/31/14
LEVEL 1
COMMON STOCKS $6,036,814
CASH & EQUIVALENTS $1,100,910
TOTAL INVESTED ASSETS $7,137,744
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. The Series
made a distribution of its ordinary income of $16,284 to its shareholders
on October 22, 2014, in the form of stock dividends equal to 839.797
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, 2014, the Series purchased $537,014 of
common stock. During the same period, the Series sold $785,410 of common
stock. The Series also purchased a 700,000 par value Treasury Bill.
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.
At October 31, 2014, the gross unrealized appreciation for all securities
totaled $2,557,164 and the gross unrealized depreciation for all securities
totaled $1,681 or a net unrealized appreciation of $2,555,483. The aggregate
cost of securities for federal income tax purposes at October 31, 2014
was $3,481,351.
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.
NOTE D - INVESTMENT ADVISER 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, 2014, October 31, 2013 and October
31, 2012, the fund paid investment adviser fees of $69,293, $59,091,
and $51,906, respectively.
On October 31, 2014, the fund had $5,981 included in accrued expenses, as
owed to Carosa Stanton Asset Management, LLC.
NOTE E - REMUNERATION OF DIRECTORS
The Directors are paid a fee of $50 per meeting. They may be reimbursed
for travel expenses.
NOTE F - 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, 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 2014 15,685.035 305,239
Shares Redeemed during 2014 (20,720.660) (396,817)
Reinvestment of Distributions,
December 27, 2013 12,715.543 246,936
Reinvestment of Distributions,
October 22, 2014 839.797 16,284
Balance at October 31, 2014 349,119.943 $ 4,575,365
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED OCTOBER 31, 2014, 2013, 2012, 2011 AND 2010
October October October October October
2014 2013 2012 2011 2010
NET ASSET VALUE,
beginning of period $ 18.46 $ 15.35 $14.62 $ 13.28 $ 11.27
INCOME FROM INVESTMENT OPERATIONS
Net investment
income (loss) (0.01) 0.05 ( 0.02) 0.01 (0.02)
Net gain (loss) on
securities both
realized and unrealized 2.74 3.57 0.76 1.33 2.03
Total from investment
Operations 2.73 3.62 0.74 1.34 2.01
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distribution of
capital gains (.72) (.45) (.00) (.00) (.00)
Distribution of
ordinary income (.05) (.06) (.01) (.00) (.00)
Total stock dividend
distributions (.77) (.51) (.01) (.00) (.00)
NET ASSET VALUE,
end of period $ 20.42 $ 18.46 $ 15.35 $ 14.62 $ 13.28
NET ASSETS,
end of period $7,127,458 $6,287,193 $4,921,128 $4,606,704 $4,356,736
Actual Actual Actual Actual Actual
RATIO OF EXPENSES
TO AVERAGE NET ASSETS* 1.51% 1.63% 1.73% 1.82% 1.89%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* (0.05)% 0.29% (0.14)% 0.07% (0.14)%
PORTFOLIO TURNOVER RATE* 11.74% 6.54% 7.23% 11.37% 19.94%
TOTAL RETURN 15.02 % 24.20% 5.06% 10.09% 17.83%
* Per share amounts calculated using the average shares method
The accompanying notes are an integral part of these financial highlights.
GREATER WESTERN NEW YORK SERIES (A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF OCTOBER 31, 2012
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 and
Stockholders 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, 2014 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, 2014, 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, 2014, 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, 2014, 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.
EFP Rotenberg, LLP
Rochester, New York
December 23, 2014
GREATER WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2014
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $846,468 $ 1,534,306
Cash and Cash Equivalents 241,278
Accrued Interest and Dividends 1,756
Total Assets $ 1,777,340
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 3,079
NET ASSETS
Net Assets (Equivalent to $22.41 per share
based on 79,170.726 shares of stock outstanding) 1,774,261
Total Liabilities and Net Assets $ 1,777,340
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
10,000,000 Shares Authorized,
79,170.726 Shares Outstanding $ 997,422
Accumulated Net Investment Gain & Realized
Gain from Security Transactions 89,001
Net Unrealized Appreciation on Investments 687,838
Net Assets at October 31, 2014 $ 1,774,261
The accompanying notes are an integral part of these financial statements.
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES OCTOBER 31, 2014
Historical
Shares Cost Value
--------- --------- ---------
Level 1 Common Stocks - 86.41%
*ASTERISK DENOTES A NON INCOME PRODUCING SECURITY
Medical Products & Supplies - 8.11%
Bristol-Myers Squibb Co. 1,000 21,938 58,190
Greatbatch, Inc.* 850 18,984 42,661
Johnson & Johnson 400 22,617 43,112
--------- ---------
63,539 143,963
Electrical Equipment - 7.74%
Corning, Inc. 2,200 26,502 44,946
General Electric Co. 1,450 35,248 37,424
Ultralife Corp.* 17,400 65,037 55,158
--------- ---------
126,787 137,528
Telecommunications - 7.68%
AT&T Corporation 950 33,705 33,098
Frontier Communications 10,400 57,238 68,016
Verizon Communications 700 34,210 35,175
--------- ---------
125,153 136,289
Aerospace - 6.26%
Harris Corporation 500 24,989 34,800
Moog, Inc. Class A* 637 15,976 48,756
Northrop Grumman 200 2,294 27,592
--------- ---------
43,259 111,148
Retail - Specialty - 6.03%
Fastenal Co. 800 13,954 35,232
Zumiez Inc.* 2,150 46,937 71,767
--------- ---------
60,891 106,999
Electronic Components - 5.93%
Astronics Corp. Class A* 1,128 3,025 58,442
IEC Electronics Corp.* 4,518 6,983 22,364
TE Connectivity Ltd. 400 10,904 24,452
--------- ---------
20,912 105,258
Airlines - 4.95%
Southwest Airlines Co. 2,550 46,848 87,924
Railroads - 4.88%
Genesee & Wyoming Class A* 900 2,522 86,580
Banking & Finance - 4.64%
Community Bank System 1,200 23,452 45,780
M&T Bank Corp. 300 29,839 36,654
--------- ---------
53,291 82,434
Real Estate & Related - 4.32%
Home Properties Inc. 400 14,797 25,724
Sovran Self Storage 600 22,310 51,054
--------- ---------
37,107 76,778
Automotive - 3.16%
Monro Muffler Brake Inc 1,050 12,443 56,112
Computers - Services - 2.97%
Computer Task Group, Inc. 6,000 33,877 52,800
Computers - Distributors - 2.95%
Ingram Micro* 1,950 45,446 52,338
Utilities - Natural Resources - 2.92%
National Fuel Gas Co. 750 39,840 51,922
Metal Fabrication & Hardware - 2.64%
Graham Corp. 1,400 15,140 46,900
Commercial Services - 2.58%
Paychex, Inc. 975 25,852 45,767
Foods & Beverages - 2.06%
Constellation Brands, Inc.* 400 2,509 36,616
Computers - Software - 1.98%
Oracle Corp. 900 12,070 35,145
Steel - 1.72%
Gilbraltar Industries Inc.* 2,000 25,111 30,500
Environmental Services - 1.11%
Ecology & Environment Inc. 2,000 25,398 19,820
Office Equipment - 1.05%
Xerox Corp. 1,400 17,817 18,592
Instruments - 0.48%
Taylor Devices* 877 4,394 8,586
Machinery - 0.16%
Columbus McKinnon Corp. 100 2,344 2,845
Health Care Service Provider - 0.05%
VirtualScopics Inc.* 200 2,981 821
Industrial Materials - 0.04%
Servotronics, Inc.* 100 937 641
--------- ---------
Total Investments in Securities 846,468 1,534,306
Level 1 - Cash & Equivalents - 13.59%
US Treasury Bill - 8.45% 149,997 149,997
Due 12/26/14 0.00%
Schwab Money Market - 5.14% 91,281 91,281
7 day Yield .01%
--------- ---------
Total Invested Assets $ 846,468 $ 1,775,584
The accompanying notes are an integral part of these financial statements.
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES OCTOBER 31, 2014
Table of Industries
Industry Market Value Percent
Aerospace $ 111,148 6.26%
Airlines $ 87,924 4.95%
Automotive $ 56,112 3.16%
Banking & Finance $ 82,434 4.64%
Commercial Services $ 45,767 2.58%
Computers - Distributors $ 52,338 2.95%
Computers - Services $ 52,800 2.97%
Computers - Software $ 35,145 1.98%
Electrical Equipment $ 137,528 7.74%
Electronics Components $ 105,258 5.93%
Environmental Services $ 19,820 1.11%
Foods & Beverages $ 36,616 2.06%
Health Care Service Provider $ 821 0.05%
Industrial Materials $ 641 0.04%
Instruments $ 8,586 0.48%
Machinery $ 2,845 0.16%
Medical Products & Supplies $ 143,963 8.11%
Metal Fabrication & Hardware $ 46,900 2.64%
Office Equipment $ 18,592 1.05%
Railroads $ 86,580 4.88%
Real Estate & Related $ 76,778 4.32%
Retail - Specialty $ 106,999 6.03%
Steel $ 30,500 1.72%
Telecommunications $ 136,289 7.68%
Utilities - Natural Resources $ 51,922 2.92%
Total Equities $ 1,534,306 86.41%
US Treasury Bill (Due 12/26/14 0.00%) $ 149,997 8.45%
Cash & Equivalents (7 day yield .01%) $ 91,281 5.14%
Total Invested Assets $ 1,775,584 100.00%
The accompanying notes are an integral part of these financial statements
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED OCTOBER 31, 2014, 2013 AND 2012
October October October
2014 2013 2012
--------- --------- ---------
INVESTMENT INCOME:
Dividend and Interest Income $ 21,749 $ 16,882 $ 13,079
EXPENSES:
Adviser Fees 19,210 15,688 13,035
Legal and Professional 1,485 1,473 1,705
Director's Fees 1,200 1,600 1,200
D&O/E&O 920 906 905
Fidelity Bond 102 0 136
Taxes 450 455 450
Telephone 134 40 167
Registration Fees 1,685 23 90
Custodian Fees 1,626 1,195 1,687
Travel 0 132 0
Dues and Subscriptions 1,284 1,342 1,261
Total expense 28,096 22,854 20,636
Net investment income (loss) (6,347) (5,972) (7,557)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from
securities transactions 180,453 (4,630) (23,948)
Unrealized appreciation (depreciation)
during the period 1,812 357,908 87,830
Net gain (loss) on investments 182,265 353,278 63,882
CHANGE IN NET ASSETS FROM OPERATIONS $ 175,918 $ 347,306 $ 56,325
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED OCTOBER 31, 2014, 2013 AND 2012
October October October
2014 2013 2012
--------- --------- ---------
CHANGE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (6,347) $ (5,972) $ (7,557)
Net realized gain (loss) from
security transactions 180,453 (4,630) (23,948)
Net change in unrealized appreciation
(depreciation) of investments 1,812 357,908 87,830
Change in net assets from operations 175,918 347,306 56,325
CAPITAL SHARE TRANSACTIONS:
Sales 58,733 113,714 98,950
Redemptions (14,657) (8,233) (7,954)
Total capital share transactions 44,076 105,481 90,996
Increase (decrease) in net assets 219,994 452,787 147,321
NET ASSETS:
Beginning of period 1,554,267 1,101,480 954,159
End of period $ 1,774,261 $ 1,554,267 $ 1,101,480
The accompanying notes are an integral part of these financial statements.
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2014
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
Fair Value Measurements - ASC 820-10 establishes a fair value hierarchy
which requires an entity to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value. The
standard describes three levels of inputs that may be used to measure
fair value:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities
in active markets that the entity has the ability to access as of the
measurement date.
Level 2: Significant other observable inputs other than Level 1 prices
such as quoted prices for similar assets or liabilities; quoted prices
in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect a reporting
entity's own assumptions about the assumptions that market participants
would use in pricing an asset or liability.
The following is a description of the valuation methodologies used for
assets measured at fair value:
Cash & Equivalents - Cash consists of amounts deposited in money market
accounts or treasury bills 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.
ASSETS AT FAIR VALUE AS OF: 10/31/14
LEVEL 1
COMMON STOCKS $ 1,534,306
CASH & EQUIVALENTS $ 241,278
TOTAL INVESTED ASSETS $ 1,775,584
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.
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, 2014, the Series purchased $307,725 of
common stock. During the same period, the Series sold $228,311 of common
stock. The Series also purchased a 150,000 par value Treasury Bill.
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.
At October 31, 2014, the gross unrealized appreciation for all
securities totaled $706,359 and the gross unrealized depreciation for
all securities totaled $18,521, or a net unrealized appreciation of
$687,838. The aggregate cost of securities for federal income tax
purposes at October 31, 2014 was $846,468.
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.
NOTE D - INVESTMENT ADVISER 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, 2014, October 31, 2013 and
October 31, 2012, the Fund paid investment adviser fees of $19,210,
$15,688 and $13,035, respectively.
On October 31, 2014, the Fund had $1,648 included in accrued expenses,
as owed to Carosa Stanton Asset Management, LLC.
NOTE E - REMUNERATION OF DIRECTORS
The Directors are paid a fee of $50 per meeting. They may be reimbursed
for travel expenses.
NOTE F - 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, 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 2014 2,750.651 58,733
Shares redeemed during 2014 (677.171) (14,657)
Balance at October 31, 2014 79,170.726 $ 997,422
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, 2014, 2013, 2012, 2011 AND 2010
October October October October October
2013 2012 2011 2010 2009
NET ASSET VALUE,
beginning of period $ 20.16 $ 15.53 $14.70 $ 13.41 $ 10.64
INCOME FROM INVESTMENT OPERATIONS
Net investment income
(loss) (0.08) (0.08) (0.11) (0.13) (0.02)
Net gain (loss) on
securities both
realized and unrealized 2.33 4.71 0.94 1.42 2.79
Total from investment
Operations 2.25 4.63 0.83 1.29 2.77
DISTRIBUTIONS
Stock Dividends 0.00 0.00 0.00 0.00 0.00
NET ASSET VALUE,
end of period $ 22.41 $ 20.16 $ 15.53 $ 14.70 $ 13.41
NET ASSETS, end of
Period $1,774,261 $1,554,267 $ 1,101,480 $ 954,159 $ 829,725
Actual Actual Actual Actual Actual
RATIO OF EXPENSES
TO AVERAGE NET ASSETS* 1.68% 1.74% 1.97% 2.00% 2.00%
RATIO OF EXPENSES TO AVERAGE NET ASSETS
BEFORE REIMBURSEMENT* 1.68% 1.74% 1.97% 2.06% 2.28%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* (0.38)% (0.45)% (0.72)% (0.91)% (0.17)%
PORTFOLIO TURNOVER RATE* 13.65% 0.00% 0.05% 1.91% 0.00%
TOTAL RETURN 11.16% 29.81% 5.65% 9.62% 26.03%
* Per share amounts calculated using the average shares method
The accompanying notes are an integral part of these financial highlights
ADDITIONAL INFORMATION
EXPENSE TABLE Beginning Ending
Account Value Account Value Annualized Expenses Paid
ACTUAL 5/1/14 10/31/14 Expense Ratio During Period+
Unrestricted Series $ 1,000.00 $ 1,075.10 1.51% $ 7.77
Greater Western
New York Series 1,000.00 1,046.20 1.68% $ 8.52
HYPOTHETICAL++
Unrestricted Series 1,000.00 1,025.00 1.51% $ 7.58
Greater Western
New York Series 1,000.00 1,025.00 1.68% $ 8.44
+ 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, 2014 to October 31, 2014).
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, 54 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.
Betsy Kay Carosa, 54 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, 55 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
Richard Gioia, 32 Director Term of Office: Principal 2 N/A
34 Berryman Dr. N/A Lorraine Capital, LLC
Buffalo, NY 14226 Served: Attorney
Since 2014 Damon, Morey LLP
Bryan D. Hickman, 69 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.
Lois Irwin, 62 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
John P. Lamberton, 54 Director Term of Office: Founder, General Partner 2 N/A
110 East Center Street #2057 N/A Cape Bojador Capital
Madison, Length of Time Management;
SD 57042 Served:
Since 2003
William E.J. Martin, 54 Director Term of Office: Managing Member 2 N/A
4410 Woodlawn Ave. N N/A Chipman & Martin, LLC;
Seattle, Length of Time Consultant,
WA 98103 Served: Robson Forensic, Inc.
Since 1997 Director of Sales,
Aecon Buildings, Inc.
Michael W. Reynolds, 54 Director Term of Office: Marketing Consultant 2 N/A
203 Randwood Drive Audit N/A Sole Proprietor
Getzville, NY 14068 Committee Length of Time
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.
10/31/2014 10/31/2013
Audit Fees $12,790 $12,150
Audit-Related Fees $ 0 $ 0
Tax Fees $ 1,215 $ 1,350
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 - (incorporated by reference to
Bullfinch Fund, Inc.; 333-26321; 811-08191;
Form N-1A filed on October 30, 2003 with
Accession Number 0001038199-02-000005).
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002 are attached hereto.
(b) Certifications pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Bullfinch Fund, Inc.
By: /s/ Christopher Carosa
----------------------------------------
Christopher Carosa,
President of Bullfinch Fund, Inc.
Date: December 23, 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 23, 2013