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: 10/31/16
Date of reporting period: 11/01/15 - 10/31/16
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
Annual Report
October 31, 2016
Management's Discussion of Fund Performance
December 28, 2016
Dear Fellow Shareholders:
We are very proud to present the October 2016 Annual Report of Bullfinch Fund,
Inc. This report contains the audited financial statements for both the
Unrestricted Series and the Greater Western New York Series.
This year produced excellent results for the Bullfinch Fund, Inc. Unrestricted
Series as it reached new all-time highs in net assets and accumulated
performance. The Greater Western New York Series, with its heavy reliance on
small cap stocks, fell back ever so slightly (although, it should be noted
that it has outpaced since Election Day reflecting the shift in favorability
of small cap stocks). For relative comparison between the two Series and the
market in general, take a look at the results of our benchmark, the Value Line
Geometric Index.
In the Unrestricted Series, the top performing stocks (AAR Corp, Mattel, and
NVIDIA) all topped more than 40% gains for the year. Among the laggards were
CDI Corporation, Cognizant Technology Solutions, and Fred's, all double digit
negative for the year. The Unrestricted Series as a whole was up 7.62% in the
fiscal year vs. our benchmark which was down 0.42% (meaning we beat our
benchmark by 8%!).
During the fiscal year, the Greater Western New York Series lost 1.45%. A
total of 14 individual stocks experienced greater than double digit returns
with 3 returning more than 40%. The top performing stocks (Gibraltar
Industries, Mattel, and Servotronics) represent a diverse set of industries
(steel-based products, toys, and control components). The underperformers
included Ultralife (Batteries); Integer Holdings (specialty health
products); and Computer Task Group (IT and staffing).
Once again, there was a 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
2.025% vs. the benchmark loss of 0.42%. Still, our Unrestricted Series
nearly tripled the S&P return while the Greater Western New York Series
lagged behind. While past performance can never guarantee future results,
we are quite proud of what we have achieved compared to the S&P 500,
especially in light of our generally defensive position.
The market uncertainty heading into the election caused us to build on our
defensive position. Despite this posture, the surprise Trump victory and the
ensuing Trump rally has brought both funds to new highs. In particular, the
Greater Western New York Series has benefited from the rotation back to
small cap stocks.
The next year will prove interesting as the market gets used to a new
administration and a new way of doing business with Washington.
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 7/1/06 to 10/31/16. 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
6/30/2006 $10,000 $10,000
6/30/2007 $11,855 $11,666
6/30/2008 $10,610 $8,793
10/31/2008 $8,757 $6,067
10/31/2009 $9,258 $6,645
10/31/2010 $10,909 $8,046
10/31/2011 $12,010 $7,986
10/31/2012 $12,618 $8,365
10/31/2013 $15,671 $11,160
10/31/2014 $18,025 $11,675
10/31/2015 $19,256 $11,019
10/31/2016 $20,723 $10,973
Annualized
Returns Ending Bullfinch Fund Inc. Value Line
10/31/2016 Unrestricted Series Geometric Index
One - Year + 7.62% - 0.42%
Five - Year + 11.53% + 6.56%
Ten - Year + 6.75% + 0.85%
(GRAPH OMITTED)
Year Bullfinch Fund, Inc. Value Line
Ending Greater Western New York Series Geometric Index
6/30/2006 $10,000 $10,000
6/30/2007 $11,253 $11,666
6/30/2008 $10,107 $8,793
10/31/2008 $8,628 $6,067
10/31/2009 $8,330 $6,645
10/31/2010 $10,498 $8,046
10/31/2011 $11,508 $7,986
10/31/2012 $12,159 $8,365
10/31/2013 $15,783 $11,160
10/31/2014 $17,544 $11,675
10/31/2015 $18,044 $11,019
10/31/2016 $17,783 $10,973
Annualized
Returns Ending Bullfinch Fund Inc. Value Line
10/31/2016 Greater WNY Series Geometric Index
One - Year - 1.45% - 0.42%
Five - Year + 9.09% + 6.56%
Ten - Year + 5.71% + 0.85%
UNRESTRICTED SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF OCTOBER 31, 2016
TOGETHER WITH INDEPENDENT AUDITORS' REPORT
DeJoy, Knauf & Blood LLP
Certified Public Accountants
280 East Broad Street, Suite 300
Rochester, NY 14604
Tel 585-546-1840
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, including
the schedule of investments in securities, of Bullfinch Fund, Inc. -
Unrestricted Series (one of the series constituting the Bullfinch Fund, Inc.
[the "Company"]) as of October 31, 2016, and the related statements of
operations, changes in net assets and the financial highlights for year 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
audit. The financial statements of Bullfinch Fund, Inc. - Unrestricted Series
as of October 31, 2015 and the related statement of changes in net assets for
the year then ended and the financial highlights for each of the four years in
the period ended October 31, 2015, were audited by other auditors whose report
dated December 21, 2015, expressed an unqualified opinion on those statements.
We conducted our audit 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 and financial highlights are free of material
misstatement. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express
no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. Our
procedures included confirmation of securities owned as of October 31, 2016,
by correspondence with the custodian. We believe that our audit provides 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, 2016, the results
of its operations, the changes in its net assets, and the financial highlights
for the year then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/DeJoy, Knauf & Blood, LLP
Rochester, New York
December 28, 2016
UNRESTRICTED SERIES
(A SERIES WITHIN THE BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2016
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $3,884,329 $ 6,169,903
Cash & Cash Equivalents 2,417,518
Accrued Interest and Dividends 9,092
Total Assets $ 8,596,513
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 10,800
Due to Investment Adviser 7,576
NET ASSETS
Net Assets (Equivalent to $20.29 per share based
on 422,842.695 shares of stock outstanding) 8,578,137
Total Liabilities and Net Assets $ 8,596,513
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
422,842.695 Shares Outstanding $ 6,022,228
Accumulated Net Investment Gain & Realized Gain
from Security Transactions 270,335
Net Unrealized Appreciation on Investments 2,285,574
Net Assets at October 31, 2016 $ 8,578,137
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, 2016
Historical
Shares Cost Value
Level 1 - Common Stocks - 71.85%
*ASTERISK DENOTES A NON INCOME PRODUCING SECURITY
Computers - Software - 14.72%
Adobe Systems Inc.* 3,250 84,678 349,407
Microsoft Corp. 6,200 151,626 371,504
Oracle Corp. 5,500 56,121 211,310
Synopsis, Inc.* 5,600 115,460 332,136
407,885 1,264,357
Medical Products and Supplies - 6.30%
Edwards Lifesciences* 2,500 84,035 238,050
Johnson & Johnson 2,400 136,714 278,376
Medtronic Inc. 300 22,863 24,606
243,612 541,032
Retail - Specialty - 4.49%
Fastenal Co. 4,800 83,684 187,104
Zumiez Inc.* 8,900 193,235 198,025
276,919 385,129
Semiconductors - 4.45%
Intel Corp. 5,000 85,564 174,350
Tessera Technologies Inc. 5,600 96,089 207,760
181,653 382,110
Leisure & Recreational - 4.33%
Mattel Inc. 11,800 293,934 372,054
Computers - Networking - 3.82%
Cisco Systems, Inc. 10,700 160,238 328,276
Electrical Equipment - 3.32%
Corning Inc. 7,300 66,773 165,783
General Electric Co. 4,100 77,607 119,310
144,380 285,093
Insurance - 3.20%
Arthur J Gallagher & Co 5,700 138,298 274,911
Telecommunications - 3.20%
AT&T Corp. 3,800 134,073 139,802
Verizon Communications 2,800 136,812 134,680
270,885 274,482
Commercial Services - 3.05%
Paychex, Inc. 4,750 130,496 262,200
Historical
Shares Cost Value
Level 1 - Common Stocks - 71.85%
Internet Services - 2.76%
Amazon.com Inc.* 300 55,507 236,946
Pharmaceuticals -2.68%
Mylan Inc.* 6,300 363,525 229,950
Biotech - 2.64%
Meridian Bioscience Inc. 13,800 249,015 227,010
Oil & Related - 2.45%
Total SA ADR 4,400 227,558 210,056
Consumer - Electronics - 2.34%
Canon Inc. 7,000 241,870 201,040
Tobacco Products - 2.02%
Universal Corp. VA 3,200 120,756 173,440
Retail - General - 1.94%
Fred's Inc. Class A 18,200 182,669 166,166
Aerospace - 1.65%
AAR Corporation 4,400 83,191 141,548
Electronics Components - 1.35%
TE Connectivity Ltd. 1,850 50,371 116,310
Industrial Services - 1.14%
Expeditors Int'l Washington 1,900 61,567 97,793
Total Investments in Securities 3,884,329 6,169,903
Level 1 - Cash & Equivalents - 28.15%
Schwab Gov't Money Fund - 28.15% 2,417,518 2,417,518
Sweep Shares 7 day Yield .01%
Total Invested Assets $ 6,301,847 $ 8,587,421
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, 2016
Table of Industries
Industry Market Value Percent
Aerospace $ 141,548 1.65%
Biotech $ 227,010 2.64%
Commercial Services $ 262,200 3.05%
Computers - Networking $ 328,276 3.82%
Computers - Software $ 1,264,357 14.72%
Consumer - Electronics $ 201,040 2.34%
Electrical Equipment $ 285,093 3.32%
Electronics Components $ 116,310 1.35%
Industrial Services $ 97,793 1.14%
Insurance $ 274,911 3.20%
Internet Services $ 236,946 2.76%
Leisure & Recreational $ 372,054 4.33%
Medical Products & Supplies $ 541,032 6.30%
Oil & Related $ 210,056 2.45%
Pharmaceuticals $ 229,950 2.68%
Retail - General $ 166,166 1.94%
Retail - Specialty $ 385,129 4.49%
Semiconductors $ 382,110 4.45%
Telecommunications $ 274,482 3.20%
Tobacco Products $ 173,440 2.02%
Total Equities $ 6,169,903 71.85%
Cash & Equivalents (7 day yield .01%) $ 2,417,518 28.15%
Total Invested Assets $ 8,587,421 100.00%
The accompanying notes are an integral part of these financial statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2016
INVESTMENT INCOME:
Dividend and Interest Income $ 137,238
EXPENSES:
Adviser Fees 84,365
Legal and Professional 14,142
Director's Fees 1,000
D&O/E&O 8,493
Fidelity Bond 939
State Income Taxes 300
Foreign Taxes 4,571
Telephone 185
Registration Fees 1,625
Custodian Fees 5,247
Travel 329
Dues and Subscriptions 2,148
Total expense 123,344
Net investment income 13,894
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain from securities transactions 625,476
Unrealized depreciation during the period (33,427)
Net gain on investments 592,049
CHANGE IN NET ASSETS FROM OPERATIONS $605,943
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED OCTOBER 31, 2016 AND 2015
October October
2016 2015
CHANGE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 13,894 $ 14,071
Net realized gain from security transactions 625,476 707,162
Net change in unrealized depreciation of investments (33,427) (236,482)
Change in net assets from operations 605,943 484,751
DISTRIBUTIONS TO SHAREHOLDERS:
Distribution of capital gains (707,089) (365,722)
Distribution of ordinary income (14,067) 0
Reinvested dividend distributions 721,156 365,722
CAPITAL SHARE TRANSACTIONS:
Sales 670,510 277,982
Redemptions (331,114) (257,393)
Total capital share transactions 339,396 20,589
Increase in net assets 945,339 505,340
NET ASSETS:
Beginning of period 7,632,798 7,127,458
End of period $8,578,137 $7,632,798
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS (PER SHARE DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED OCTOBER 31, 2016, 2015, 2014, 2013 AND 2012
October October October October October
2016 2015 2014 2013 2012
NET ASSET VALUE, beginning of period $ 20.75 $ 20.42 $18.46 $ 15.35 $ 14.62
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.03 0.04 (0.01) 0.05 (0.02)
Net gain on securities
both realized and unrealized 1.47 1.34 2.74 3.57 0.76
Total from investment operations 1.50 1.38 2.73 3.62 0.74
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distribution of capital gains (1.92) (1.05) (0.72) (0.45) 0.00
Distribution of ordinary income (0.04) 0.00 (0.05) (0.06) (0.01)
Total stock dividend distributions (1.96) (1.05) (0.77) (0.51) (0.01)
NET ASSET VALUE, end of period $ 20.29 $ 20.75 $ 20.42 $ 18.46 $ 15.35
NET ASSETS,
end of period $8,578,137 $7,632,798 $7,127,458 $6,287,193 $4,921,128
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (RATIOS AND SUPPLEMENTAL DATA)
FOR THE YEARS ENDED OCTOBER 31, 2016, 2015, 2014, 2013 AND 2012
October October October October October
2016 2015 2014 2013 2012
RATIO OF EXPENSES
TO AVERAGE NET ASSETS* 1.50% 1.48% 1.51% 1.63% 1.73%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* 0.17% 0.19% (0.05)% 0.29% (0.14)%
PORTFOLIO TURNOVER RATE* 1.95% 10.55% 11.74% 6.54% 7.23%
TOTAL RETURN 7.62% 6.83% 15.02% 24.20% 5.06%
* Per share amounts calculated using the average shares method
The accompanying notes are an integral part of these financial highlights.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2016
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 Fund offers two series of
common stock. In addition to the Unrestricted Series, the Fund also offers
the Greater Western New York Series.
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
The following is a summary of significant accounting policies followed by
the Series in the preparation of its financial statements. These policies
are in conformity with accounting principles generally accepted in the
United States ("GAAP"). The Series follows the investment company accounting
and reporting guidance of the Financial Accounting Standard Board Accounting
Standard Codification 946, Financial Services - Investment Companies.
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. Included in the cash and cash equivalents
listed there is an unsettled stock purchase of $171,563 which settles on
November 3, 2016.
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:
10/31/16
LEVEL 1
COMMON STOCKS $ 6,169,903
CASH & EQUIVALENTS $ 2,417,518
TOTAL INVESTED ASSETS $ 8,587,421
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.
Series Allocations - Common expenses of the Fund are evenly split between
the two series of the Fund unless the Board of Directors approves an
alternative allocation of expenses based on management's estimate.
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.
Management has reviewed all open tax years and major tax jurisdictions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed or expected to be
taken on a tax return. The tax returns of the Series for the prior three
years are open for examination.
Distributions to Shareholders - Distributions to shareholders are recorded on
the ex-dividend date. The Series made a distribution of its capital gains of
$365,722 to its shareholders on December 26, 2014 in the form of stock
dividends equal to 17,971.591 shares of stock. The Series made a distribution
of its ordinary income of $14,067 to its shareholders on December 29, 2015, in
the form of stock dividends equal to 722.839 shares of stock. The Series made
a distribution of its capital gains of $707,089 to its shareholders on
December 29, 2015, in the form of stock dividends equal to 36,335.515 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.
Subsequent Events - In accordance with GAAP, the Fund has evaluated the
need for disclosures and/or adjustments resulting from subsequent events
through the date of issuance of these financial statements.
NOTE C - INVESTMENTS
For the year ended October 31, 2016, the Series purchased $160,246 of common
stock. During the same period, the Series sold $1,561,447 of common stock.
At October 31, 2016, the gross unrealized appreciation for all securities
totaled $2,518,740 and the gross unrealized depreciation for all securities
totaled $233,166 or a net unrealized appreciation of $2,285,574. The
aggregate cost of securities for federal income tax purposes at October
31, 2016 was $3,884,329.
NOTE D - RELATED PARTY TRANSACTIONS
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 are 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 year ended October 31, 2016, the Fund paid investment adviser fees
of $84,365.
As of October 31, 2016, the Fund had $7,576 included in accrued expenses, as
owed to Carosa Stanton Asset Management, LLC.
Certain officers of the Fund are also officers of Carosa Stanton Asset
Management.
NOTE E - REMUNERATION OF DIRECTORS
The Directors are paid a fee of $50 per meeting. They may be reimbursed for
travel expenses.
NOTE F - COMMITMENTS AND CONTINGENCIES
The Series indemnifies the Fund's officers and the Board of Directors for
certain liabilities that might arise from their performance of their duties
to the Series. Additionally, in the normal course of business the Fund enters
into contracts that contain a variety of representations and warranties and
which provide for general indemnifications. The Fund's maximum exposure under
these arrangements is unknown, as this would involve future claims that may be
made against the Fund that have not yet occurred. However, based on its
experience, the Fund expects the risk of loss to be remote.
NOTE G - CAPITAL SHARE TRANSACTIONS
The Fund has authorized 10,000,000 shares of common stock at $0.01 par
value per share. These shares are issued under either of the two series of
the Fund. 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, 2014 349,119.943 $ 4,575,365
Shares sold during 2015 13,322.543 277,982
Shares redeemed during 2015 (12,501.965) (257,393)
Reinvestment of Distributions,
December 26, 2014 17,971.591 365,722
Balance at October 31, 2015 367,912.112 $ 4,961,676
Shares sold during 2016 34,807.058 670,510
Shares redeemed during 2016 (16,934.829) (331,114)
Reinvestment of Distributions,
December 29, 2015 37,058.354 721,156
Balance at October 31, 2016 422,842.695 $ 6,022,228
GREATER WESTERN NEW YORK SERIES (A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF OCTOBER 31, 2016
TOGETHER WITH INDEPENDENT AUDITORS' REPORT
DeJoy, Knauf & Blood LLP
Certified Public Accountants
280 East Broad Street, Suite 300
Rochester, NY 14604
Tel 585-546-1840
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,
including the schedule of investments in securities, of Bullfinch Fund,
Inc. - Greater Western New York Series (one of the series constituting the
Bullfinch Fund, Inc. [the "Company"]) as of October 31, 2016, and the related
statements of operations, changes in net assets and the financial highlights
for year 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 audit. The financial statements of Bullfinch Fund, Inc. -
Greater Western New York Series as of October 31, 2015 and the related
statement of changes in net assets for the year then ended and the financial
highlights for each of the four years in the period ended October 31, 2015,
were audited by other auditors whose report dated December 21, 2015,
expressed an unqualified opinion on those statements.
We conducted our audit 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 and financial highlights 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 a
udit included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express
no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. Our
procedures included confirmation of securities owned as of October 31, 2016,
by correspondence with the custodian. We believe that our audit provides 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. - Greater Western New York Series as of October 31, 2016,
the results of its operations, the changes in its net assets, and the
financial highlights for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.
/s/DeJoy, Knauf & Blood, LLP
Rochester, New York
December 28, 2016
GREATER WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2016
ASSETS
Investments in Securities, at Fair Value,
Identified Cost of $857,508 $ 1,573,650
Cash and Cash Equivalents 163,855
Accrued Interest and Dividends 1,929
Total Assets $ 1,739,434
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued Expenses $ 1,200
Due to Investment Adviser 1,693
NET ASSETS
Net Assets (Equivalent to $20.36 per share based
on 85,289.314 shares of stock outstanding) 1,736,541
Total Liabilities and Net Assets $ 1,739,434
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
85,289.314 Shares Outstanding $ 1,126,040
Accumulated Net Investment Loss & Realized Loss
from Security Transactions (105,641)
Net Unrealized Appreciation on Investments 716,142
Net Assets at October 31, 2016 $ 1,736,541
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, 2016
Historical
Shares Cost Value
Level 1 Common Stocks - 90.57%
*ASTERISK DENOTES A NON INCOME PRODUCING SECURITY
Electrical Equipment - 9.41%
Corning, Inc. 2,200 26,502 49,962
General Electric Co. 1,450 35,248 42,195
Ultralife Corp.* 17,400 65,037 71,340
126,787 163,497
Aerospace - 7.33%
Harris Corporation 500 24,989 44,605
Moog, Inc. Class A* 637 15,976 36,991
Northrop Grumman 200 2,294 45,800
43,259 127,396
Medical Products & Supplies - 6.68%
Bristol-Myers Squibb Co. 1,000 21,938 50,910
Integer Holdings Corp* 850 17,417 18,742
Johnson & Johnson 400 22,617 46,396
61,972 116,048
Telecommunications - 6.36%
AT&T Corporation 950 33,705 34,950
Frontier Communications 10,400 48,863 41,808
Verizon Communications 700 34,210 33,670
116,778 110,428
Airlines - 5.88%
Southwest Airlines Co. 2,550 46,848 102,128
Electronic Components - 5.56%
Astronics Corp. Class A* 1,491 3,025 55,197
IEC Electronics Corp.* 4,518 6,983 16,265
TE Connectivity Ltd. 400 10,904 25,148
20,912 96,610
Leisure & Recreational - 5.44%
Mattel Inc. 3,000 74,704 94,590
Banking & Finance - 5.37%
Community Bank System 1,200 23,452 56,532
M&T Bank Corp. 300 29,839 36,819
53,291 93,351
Steel - 4.48%
Gilbraltar Industries Inc.* 2,000 25,111 77,800
Computers - Distributors - 4.17%
Ingram Micro* 1,950 45,446 72,540
Foods & Beverages - 3.85%
Constellation Brands, Inc. 400 2,509 66,848
Historical
Shares Cost Value
Level 1 Common Stocks - 90.57%
Utilities - Natural Resources - 3.77%
National Fuel Gas Co. 1,250 50,833 65,475
Railroads - 3.52%
Genesee & Wyoming Class A* 900 2,522 61,146
Automotive - 3.32%
Monro Muffler Brake Inc. 1,050 12,443 57,750
Commercial Services - 3.10%
Paychex, Inc. 975 25,852 53,820
Real Estate & Related - 2.78%
Life Storage Inc. 600 22,310 48,390
Computers - Software - 1.99%
Oracle Corp. 900 12,070 34,578
Retail - Specialty - 1.79%
Fastenal Co. 800 13,954 31,184
Computers - Services - 1.51%
Computer Task Group, Inc. 6,000 33,877 26,160
Metal Fabrication & Hardware - 1.44%
Graham Corp. 1,400 15,140 24,990
Environmental Services - 1.13%
Ecology & Environment Inc. 2,000 25,398 19,600
Office Equipment - 0.79%
Xerox Corp. 1,400 17,817 13,678
Instruments - 0.73%
Taylor Devices* 877 4,394 12,611
Machinery - 0.11%
Columbus McKinnon Corp. 100 2,344 1,949
Industrial Materials - 0.06%
Servotronics, Inc. 100 937 1,083
Total Investments in Securities 857,508 1,573,650
Level 1 - Cash & Equivalents - 9.43%
Schwab Gov't Money Fund - 9.43% 163,855 163,855
Sweep Shares 7 day Yield .01%
Total Invested Assets $ 1,021,363 $ 1,737,505
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, 2016
Table of Industries
Industry Market Value Percent
Aerospace $ 127,396 7.33%
Airlines $ 102,128 5.88%
Automotive $ 57,750 3.32%
Banking & Finance $ 93,351 5.37%
Commercial Services $ 53,820 3.10%
Computers - Distributors $ 72,540 4.17%
Computers - Services $ 26,160 1.51%
Computers - Software $ 34,578 1.99%
Electrical Equipment $ 163,497 9.41%
Electronics Components $ 96,610 5.56%
Environmental Services $ 19,600 1.13%
Foods & Beverages $ 66,848 3.85%
Industrial Materials $ 1,083 0.06%
Instruments $ 12,611 0.73%
Leisure & Recreational $ 94,590 5.44%
Machinery $ 1,949 0.11%
Medical Products & Supplies $ 116,048 6.68%
Metal Fabrication & Hardware $ 24,990 1.44%
Office Equipment $ 13,678 0.79%
Railroads $ 61,146 3.52%
Real Estate & Related $ 48,390 2.78%
Retail - Specialty $ 31,184 1.79%
Steel $ 77,800 4.48%
Telecommunications $ 110,428 6.36%
Utilities - Natural Resources $ 65,475 3.77%
Total Equities $ 1,573,650 90.57%
Cash & Equivalents (7 day yield .01%) $ 163,855 9.43%
Total Invested Assets $ 1,737,505 100.00%
The accompanying notes are an integral part of these financial statements.
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2016
INVESTMENT INCOME:
Dividend and Interest Income $ 27,085
EXPENSES:
Adviser Fees 20,374
Legal and Professional 1,572
Director's Fees 1,000
D&O/E&O 944
Fidelity Bond 104
State Income Taxes 300
Telephone 185
Registration Fees 75
Custodian Fees 1,663
Travel 329
Dues and Subscriptions 1,348
Total expense 27,894
Net investment loss (809)
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Realized loss from securities transactions (1,629)
Unrealized depreciation during the period (21,724)
Net loss on investments (23,353)
CHANGE IN NET ASSETS FROM OPERATIONS $ (24,162)
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED OCTOBER 31, 2016 AND 2015
October October
2016 2015
CHANGE IN NET ASSETS FROM OPERATIONS:
Net investment loss $ (809) $ (419)
Net realized loss from security transactions (1,629) (118)
Net change in unrealized depreciation
(appreciation) of investments (21,724) 50,028
Change in net assets from operations (24,162) 49,491
DISTRIBUTIONS TO SHAREHOLDERS:
Distribution of capital gains (6,100) (180,452)
Distribution of ordinary income (5,115) 0
Reinvested dividend distributions 11,215 180,452
CAPITAL SHARE TRANSACTIONS:
Sales 61,728 58,745
Redemptions (79,828) (103,694)
Total capital share transactions (18,100) (44,949)
Decrease (increase) in net assets (42,262) 4,542
NET ASSETS:
Beginning of period 1,778,803 1,774,261
End of period $ 1,736,541 $ 1,778,803
The accompanying notes are an integral part of these financial statements.
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (PER SHARE DATA FOR A SHARE OUTSTANDING)
FOR THE YEARS ENDED OCTOBER 31, 2016, 2015, 2014, 2013 AND 2012
October October October October October
2016 2015 2014 2013 2012
NET ASSET VALUE, beginning of period $ 20.79 $ 22.41 $20.16 $ 15.53 $ 14.70
INCOME FROM INVESTMENT OPERATIONS
Net investment (loss) income (0.01) 0.00 (0.08) (0.08) (0.11)
Net (loss) gain on securities
both realized and unrealized (0.29) 0.65 2.33 4.71 0.94
Total from investment operations (0.30) 0.65 2.25 4.63 0.83
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distribution of capital gains (0.07) (2.27) 0.00 0.00 0.00
Distribution of ordinary income (0.06) 0.00 0.00 0.00 0.00
Total stock dividend distributions (0.13) (2.27) 0.00 0.00 0.00
NET ASSET VALUE, end of period $ 20.36 $ 20.79 $ 22.41 $ 20.16 $ 15.53
NET ASSETS,
end of period $1,736,541 $1,778,803 $ 1,774,261 $1,554,267 $1,101,480
GREATER WESTERN NEW YORK SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS (RATIOS AND SUPPLEMENTAL DATA)
FOR THE YEARS ENDED OCTOBER 31, 2016, 2015, 2014, 2013 AND 2012
October October October October October
2016 2015 2014 2013 2012
RATIO OF EXPENSES
TO AVERAGE NET ASSETS* 1.56% 1.54% 1.68% 1.74% 1.97%
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS* (0.05)% (0.02)% (0.38)% (0.45)% (0.72)%
PORTFOLIO TURNOVER RATE* 0.16% 4.34% 13.65% 0.00% 0.05%
TOTAL RETURN (1.45)% 2.85% 11.16% 29.81% 5.65%
* 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.)
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2016
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 Fund offers
two series of common stock. In addition to the Greater Western New York
Series, the Fund also offers the Unrestricted Series.
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
The following is a summary of significant accounting policies followed by the
Series in the preparation of its financial statements. These policies are in
conformity with accounting principles generally accepted in the United States
("GAAP"). The Series follows the investment company accounting and reporting
guidance of the Financial Accounting Standard Board Accounting Standard
Codification 946, Financial Services - Investment Companies.
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:
10/31/16
LEVEL 1
COMMON STOCKS $ 1,573,650
CASH & EQUIVALENTS $ 163,855
TOTAL INVESTED ASSETS $ 1,737,505
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.
Series Allocations - Common expenses of the Fund are evenly split between
the two series of the Fund unless the Board of Directors approves an
alternative allocation of expenses based on management's estimate.
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.
Management has reviewed all open tax years and major tax jurisdictions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed or expected to be
taken on a tax return. The tax returns of the Series for the prior three
years are open for examination.
Distributions to Shareholders - Distributions to shareholders are recorded on
the ex-dividend date. The Series made a distribution of its capital gains of
$180,452 to its shareholders on December 26, 2014 in the form of stock
dividends equal to 8,638.179 shares of stock. The Series made a distribution
of its ordinary income of $5,115 to its shareholders on December 29, 2015
in the form of stock dividends equal to 246.371 shares of stock. The Series
made a distribution of its capital gains of $6,100 to its shareholders on
December 29, 2015 in the form of stock dividends equal to 293.831 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.
Subsequent Events - In accordance with GAAP, the Fund has evaluated the
need for disclosures and/or adjustments resulting from subsequent events
through the date of issuance of these financial statements.
NOTE C - INVESTMENTS
For the year ended October 31, 2016, the Series purchased $38,365 of common
stock. During the same period, the Series sold $2,907 of common stock.
At October 31, 2016, the gross unrealized appreciation for all securities
totaled $758,409 and the gross unrealized depreciation for all securities
totaled $42,267, or a net unrealized appreciation of $716,142. The
aggregate cost of securities for federal income tax purposes at October
31, 2016 was $857,508.
NOTE D - RELATED PARTY TRANSACTIONS
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 are 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 year ended October 31, 2016, the Fund paid investment adviser
fees of $20,374,
As of October 31, 2016, the Fund had $1,693 included in accrued expenses,
as owed to Carosa Stanton Asset Management, LLC.
Certain officers of the Fund are also officers of Carosa Stanton Asset
Management.
NOTE E - REMUNERATION OF DIRECTORS
The Directors are paid a fee of $50 per meeting. They may be reimbursed for
travel expenses.
NOTE F - COMMITMENTS AND CONTINGENCIES
The Series indemnifies the Fund's officers and the Board of Directors for
certain liabilities that might arise from their performance of their duties
to the Series. Additionally, in the normal course of business the Fund
enters into contracts that contain a variety of representations and
warranties and which provide for general indemnifications. The Fund's
maximum exposure under these arrangements is unknown, as this would involve
future claims that may be made against the Fund that have not yet occurred.
However, based on its experience, the Fund expects the risk of loss to be
remote.
NOTE G - CAPITAL SHARE TRANSACTIONS
The Fund has authorized 10,000,000 shares of common stock at $0.01 par value
per share. These shares are issued under either of the two series of the
Fund. 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, 2014 79,170.726 $ 997,422
Shares sold during 2015 2,771.844 58,745
Shares redeemed during 2015 (5,015.858) (103,694)
Reinvestment of Distributions,
December 26, 2014 8,638.179 180,452
Balance at October 31, 2015 85,564.891 $1,132,925
Shares sold during 2016 2,995.918 61,728
Shares redeemed during 2016 (3,811.697) (79,828)
Reinvestment of Distributions,
December 29, 2015 540.202 11,215
Balance at October 31, 2016 85,289.314 $1,126,040
ADDITIONAL INFORMATION
EXPENSE TABLE Beginning Ending
Account Value Account Value Annualized Expenses Paid
ACTUAL 5/1/16 10/31/16 Expense Ratio During Period+
Unrestricted Series $ 1,000.00 $ 1,029.40 1.50% $ 7.55
Greater Western
New York Series 1,000.00 966.80 1.56% $ 7.61
HYPOTHETICAL++
Unrestricted Series 1,000.00 1,025.00 1.50% $ 7.53
Greater Western
New York Series 1,000.00 1,025.00 1.56% $ 7.83
+ 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, 2016 to October 31, 2016).
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, 56 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, 56 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, 57 Director; Term of Office: Teacher 2 N/A
73 San Gabriel Drive Audit N/A Pittsford-Mendon High
Rochester, Committee Length of Time School
NY 14610 Served:
Since 2006
Bryan D. Hickman, 71 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, 64 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, 56 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
Jerome C Lojacono 57 Director Term of Office: President 2 N/A
6499 Poplar Court N/A Jerome C Lojacono
East Amherst Length of Time Enterprises
NY 14051 Served:
Since 2016
William E.J. Martin, 56 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, 56 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.
10/31/2016 10/31/2015
Audit Fees $10,000 $13,125
Audit-Related Fees $ 0 $ 0
Tax Fees $ 2,000 $ 1,245
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 - INVESTMENTS
Item 6(a) -The list of investments is included in the shareholder report.
Item 6(b) -Not applicable.
Item 7 - DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end investment companies.
Item 8 - PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT
COMPANIES.
Not applicable to open-end investment companies.
Item 9 - PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANIES.
Not applicable to open-end investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 11. CONTROLS AND PROCEDURES.
Item 11(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 11(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 12 - 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 28, 2016
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 28, 2016