Annual report ChariTrak Common

For the year ended 5 April 2018 Contents General Information

Manager, Registrar and Alternative Investment Fund Manager General Information 2 BlackRock Fund Managers Limited About the Fund 3 12 Throgmorton Avenue, EC2N 2DL

Trustee 3 Member of The Investment Association and authorised and regulated by the Financial Conduct Authority (“FCA”) pursuant to the requirements of The Alternative Investment Fund Managers Regulations 2013. Corporate Governance 3

Common Investment Fund 4 Directors of the Manager G D Bamping* C L Carter (appointed 7 September 2017) M B Cook (appointed 2 May 2018) Charity Trustees’ Investment Responsibilities 4 W I Cullen* (appointed 14 December 2017) R A Damm N C D Hall* (resigned 31 May 2017) R A R Hayes Fund Manager 4 A M Lawrence E E Tracey (resigned 28 February 2018) L E Watkins (appointed 16 May 2018) M T Zemek* * Non-executive Director. Significant Events 4 Trustee Investment Objective & Policy 5 BNY Mellon Trust & Depositary (UK) Limited Performance Table 6 The Bank of New York Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA

Investment Report 7 Authorised and regulated by the FCA. Performance Record 8 Investment Manager Distribution Tables 10 BlackRock Advisors (UK) Limited 12 Throgmorton Avenue, London EC2N 2DL Report on Remuneration 11

Portfolio Statement 17 Authorised and regulated by the FCA.

Statement of Total Return 35 Auditor Ernst & Young LLP Statement of Change in Net Assets Attributable to Unitholders 35 1 More London Place, London SE1 2AF Balance Sheet 36 Custodian Notes to Financial Statements 37 The Bank of New York Mellon (International) Limited One Canada Square, London E14 5AL Statement of Manager’s and Trustee’s Responsibilities 55

Report of the Trustee 56 Authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation Authority. Independent Auditor’s Report 57

BlackRock’s proxy voting agent is ISS (Institutional Shareholder Services).

This Report relates to the packaged products of and is issued by: BlackRock Fund Managers Limited 12 Throgmorton Avenue, London EC2N 2DL Telephone: 020 7743 3000 Charities helpline: 0800 44 55 22 blackrock.co.uk

For your protection, telephone calls are usually recorded.

1 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 2 About the Fund Common Investment Fund

ChariTrak Common Investment Fund (the “Fund”) is established by The Charity Commission for England The Fund is a Common Investment Fund established and registered with the Commission. Pursuant to the and Wales (the “Commission”) under section 24 of The Charities Act 1993. The Charities Act 1993 was Charities Act 2011 and the Fund’s governing document, the Scheme, charities established in England and superseded by The Charities Act 2011 on 14 March 2012. Wales, and charities established in Scotland and Northern Ireland pursuant to the Charities Act 2006 (as amended from time to time) may invest in the Fund. Subject to any restrictions in the terms of the Scheme, or The Fund was established on 11 August 1999 and its registered charity number is 1077125. The Fund is that may apply to an eligible charity, the trustees of any charity, large or small, may contribute the whole or any administered for the benefit of unitholders under a scheme order of the Commission dated 22 June 2000 (the part of their investment property to it at any time. The Fund should not be regarded as a short–term investment. “Scheme”), as subsequently varied or amended.

The Alternative Investment Fund Managers Regulations 2013 Charity Trustees’ Investment Responsibilities BlackRock Fund Managers Limited (the “Manager”) is authorised to manage and market the Fund, which is an alternative investment fund, in accordance with the Alternative Investment Fund Managers Directive (“AIFMD”). The Commission requires trustees of charities to invest their assets only in investments authorised under the In this document, (other than in the section entitled ‘Report on Remuneration’), the term “AIFMD” means, governing document of their charity or the Trustee Act 2000 if applicable. Trustees are required to invest collectively, Directive 2011/61/EU, as implemented by Commission Delegated Regulation (EU) No. 231/2013, prudently in order to achieve both income and/or capital growth. Furthermore, trustees are required to seek and as transposed by UK SI 2013/1773 and any other applicable national implementing measures in the regular professional advice regarding their investments. United Kingdom including, without limitation, the rules contained in the FCA handbook of rules and guidance, each as may be amended or updated from time to time. Fund Manager

Trustee As at 5 April 2018, the Fund Manager of the Fund is Kieran Doyle.

The Trustee of the Fund is BNY Mellon Trust & Depositary (UK) Limited (the “Trustee”) and is a subsidiary of The Bank of New York Mellon Corporation. It is responsible for certain aspects of the management and Significant Events administration of the Fund and its property (as further detailed in the Scheme) except to the extent that such responsibilities are those of the Manager. Changes in the Directors of the Manager On 18 May 2017, N C D Hall resigned as a Director effective 31 May 2017. C L Carter was appointed as a The Trustee acts as the depositary of the Fund and, in doing so, shall comply with the terms of the Scheme Director effective 7 September 2017. W I Cullen was appointed as a Director effective 14 December 2017. and the provisions of the AIFMD. The Trustee has delegated certain safekeeping functions to The Bank of E E Tracey resigned as a Director effective 28 February 2018. M B Cook was appointed as a Director New York Mellon (International) Limited. effective 2 May 2018. L E Watkins was appointed as a Director effective 16 May 2018.

Corporate Governance

The Manager is responsible for the management and administration of the Fund (as further detailed in the Scheme Particulars) except to the extent that such responsibilities are those of the Trustee. The Manager has delegated certain functions with respect to the portfolio management of the assets of the Fund, the performance of certain risk management functions, and the distribution of units to BlackRock Advisors (UK) Limited (the “Investment Manager”).

The Manager and Investment Manager meet quarterly to review the performance of the Fund and to discuss the investment policy and objectives. The Trustee attends these meetings at least annually and submits reports on a quarterly basis. Any matters for decision which are outside the powers delegated to the Manager are discussed by the Manager and the Trustee.

3 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 4 Investment Objective & Policy Performance Table

The investment objective of the Fund is to provide tax-exempt charity investors in England, Wales, Scotland For the year For the three years For the five years and Northern Ireland with returns (income and capital growth) of the UK equity market in line with a fixed to 5.4.2018 to 31.3.2018† to 31.3.2018† benchmark, namely the FTSE All-Share Index (the “Benchmark Index”). TOTAL RETURN The Manager may invest the property of the Fund at its discretion in any kind of investment which it could (with net income reinvested) make if it were absolutely entitled to the property of the Fund. Class A Accumulation Units ChariTrak Common Investment Fund +2.1% +17.8% +36.4% The Fund aims to fully replicate the Benchmark Index, holding stocks in the same proportion as they appear in FTSE All-Share Index* +2.0% +17.9% +37.4% the Benchmark Index. However, the Fund may employ optimisation techniques in order to assist it in tracking its benchmark. All Fund figures quoted are based on bid-to-bid dealing prices (the price at which units are sold) and are calculated net of fees. Performance returns are cumulative. All returns are in Sterling. * Figures from Index Vendor. The Fund follows a risk-sensitive, index equity investment strategy, requiring it to hold a broadly diversified † Three and five year data is only available to 31 March 2018. range of stocks, in order to reduce the risk of poor stock selection. The Fund may also invest in collective investment schemes in accordance with the restrictions set out in the Scheme. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and the return of your initial investment amount cannot be guaranteed. Changes in exchange The Fund may invest in securities that are, or could be, subject to stabilisation. Stabilisation is the process by rates may cause the value of an investment to fluctuate. Past performance is not a guide to future performance which the price of a security is temporarily supported during an issue to ensure that the introduction of the and should not be the sole factor of consideration when selecting a product. new security to the market occurs in an orderly fashion.

The Fund may invest in securities in which an issue or offer for sale was underwritten, managed or arranged by an associate of the Manager during the preceding twelve months.

The Manager may enter into stock lending transactions on behalf of the Fund.

The Manager may enter into contracts in respect of FTSE 100 futures in the following circumstances:

• As a way of managing risk in respect of new money entering the Fund before it is invested in the market. • As a way of managing risk in respect of money exiting the Fund via redemptions of units if the Manager decides it is in the interests of the Fund to sell in the market ahead of the settlement date for the redemption. • As a hedge for income monies received by the Fund prior to being distributed to unitholders. • As a way to efficiently manage constituent changes in the Benchmark Index, allowing the Manager some flexibility in the way that such constituent changes are effected. • For efficient portfolio management.

In all of the cases above, the total exposure to FTSE futures will be as nearly as possible equal to the cash amount being hedged so as to ensure that derivative transactions entered into by the Fund are always fully covered.

The Manager may borrow money temporarily for the use of the Fund (including, without limitation, for settlement purposes) on terms that the borrowing is to be repaid out of the property of the Fund, provided that the Manager shall not borrow for the purpose of making investments. Except with the prior approval of the Trustee, any borrowing shall not exceed 10% of the value of the property of the Fund on any business day.

The property of the Fund may include cash or near cash where this may reasonably be regarded as necessary in order to facilitate the cancellation of units, or to further the efficient management of the Fund, or otherwise to enable the Manager to discharge its functions under the Scheme.

5 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 6 Investment Report Performance Record

Summary of Performance over the Year Comparative Table The Fund returned 2.1%* over the year to 5 April 2018, outperforming its benchmark, the FTSE All-Share A Income Units A Accumulation Units Index, which returned 2.0%. Over the six-month period to 5 April 2018, the Fund returned -2.8%*, in line with its benchmark, which also returned -2.8%. For the year For the year For the year For the year For the year For the year to 5.4.2018 to 5.4.2017 to 5.4.2016 to 5.4.2018 to 5.4.2017 to 5.4.2016 Fund Manager’s Commentary Pence per unit Pence per unit Pence per unit Pence per unit Pence per unit Pence per unit The UK’s share markets rose during the review period, despite the dampening effects on investor sentiment Change in net assets per unit of political uncertainty, the unknown effects of Brexit and mixed economic data. Opening net asset value per unit 1,369 1,147 1,267 2,350 1,900 2,025

Return before operating charges 42.64 270.5 (75.27) 71.41 451.7 123.5 Initially, politics did not provide either comfort or stability for investors. Prime Minister Theresa May called a Operating charges (1.40) (1.15) (1.20) (2.44) (1.93) (1.95) general election for June 2017, with a view to strengthening her mandate and improving the government’s position in Brexit negotiations with the European Union (EU). However, the Conservative Party lost its majority, Return after operating charges 41.24 269.4 (76.47) 68.97 449.8 125.5 with subsequent negotiations resulting in a coalition deal with the Democratic Unionist Party of Northern Ireland. Distributions (53.02) (47.18) (43.26) (92.21) (79.26) (69.98) Retained distributions on In terms of relations with Europe, concerns about Brexit at first appeared to be well founded, as discussions accumulation units N/A N/A N/A 92.21 79.26 69.98 between UK and EU officials seemed to stall – disputed points included a ‘hard border’ with Ireland and the Closing net asset value per unit 1,357 1,369 1,147 2,419 2,350 1,900 rights of EU citizens living in the UK. Although the weaker performance of UK equities relative to global stocks After direct transaction costs of (0.11) (0.13) (0.03) (0.19) (0.21) (0.05) partially reflected investors’ worries about Brexit, by the end of the review period the UK and EU had made progress, agreeing to a transition period for the UK that would last until the end of 2020. Performance

Return after charges1 3.01% 23.48% (6.04)% 2.93% 23.67% (6.20)% In economic news, the pace of UK growth slowed, with the economy expanding by 1.4% (year on year) in the fourth quarter of 2017. Meanwhile, with inflation above official targets, the Bank of England raised interest Other information rates for the first time since 2007 in November 2017. At the end of January 2018, Consumer Price Index (CPI) Closing net asset value (£000’s) 182,721 206,155 165,763 38,013 69,259 62,340 inflation was at 3% (year-on-year) – a full percentage point above target. However, CPI inflation fell back to a Closing number of units 13,462,832 15,056,918 14,448,493 1,571,443 2,947,469 3,281,914 lower-than-expected rate of 2.7% for February. Operating charges2 0.10% 0.09% 0.10% 0.10% 0.09% 0.10%

Over February and March, UK equities joined in with sharp falls in global stocks that were partially prompted by Direct transaction costs3 0.01% 0.01% 0.00% 0.01% 0.01% 0.00% fears of faster-than-expected monetary tightening by the US Federal Reserve. However, markets subsequently recovered some of their losses. Meanwhile, relations between the UK and Russia deteriorated after a dispute Prices Pence per unit Pence per unit Pence per unit Pence per unit Pence per unit Pence per unit about suspected Russian involvement in the UK poisoning of two people with a chemical nerve agent. Highest offer unit price 1,469 1,398 1,325 2,584 2,377 2,117 Lowest bid unit price 1,321 1,127 1,044 2,300 1,867 1,713 Sterling’s strengthening against the US dollar during the period contributed to the better performance of 1 The return after charges figures are based on the net asset value reported for financial statements purposes and are not the same as the performance returns figures quoted in small-cap stocks compared with their large-cap counterparts, given that large-cap companies generate the Performance Table and the Investment Report which are based on bid-to-bid dealing prices (the price at which units are sold). more revenue overseas, so an appreciation in sterling makes them less competitive. 2 Operating charges are annualised and exclude portfolio trade-related costs, except costs paid to the custodian/depositary and entry/exit charges paid to an underlying collective investment scheme (if any). 3 Direct transaction costs are annualised and principally comprise commissions and taxes, attributable to the Fund’s purchase and sale of equity/debt instruments. April 2018 See note 15 for further details.

* Performance figures quoted are based on bid-to-bid dealing prices (the prices at which units are sold). Performance is calculated net of fees and reported for the Fund’s Class A Accumulation Units.

7 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 8 Performance Record continued Distribution Tables for the year ended 5 April 2018

Comparative Table Final Distribution in Pence per Unit For the period 12 January 2018 to 5 April 2018 X Income Units X Accumulation Units

For the year For the year For the year For the year For the year For the year A Income A Accumulation X Income X Accumulation to 5.4.2018 to 5.4.2017 to 5.4.2016 to 5.4.2018 to 5.4.2017 to 5.4.2016 Units Units Units Units

Pence per unit Pence per unit Pence per unit Pence per unit Pence per unit Pence per unit Distribution payable 5.6.2018 14.0374 24.7553 1.1599 1.3448

Change in net assets per unit Distribution paid 5.6.2017 13.0855 22.2434 1.0826 1.2083

Opening net asset value per unit 110.6 92.64 102.3 124.6 100.6 107.0 Third Interim Distribution in Pence per Unit Return before operating charges 3.40 21.85 (6.01) 3.83 24.03 (6.35) For the period 13 October 2017 to 11 January 2018 Operating charges (0.01) (0.01) (0.02) (0.01) (0.01) (0.02)

Return after operating charges 3.39 21.84 (6.03) 3.82 24.02 (6.37) A Income A Accumulation X Income X Accumulation Units Units Units Units Distributions (4.40) (3.92) (3.63) (5.02) (4.32) (3.85) Distribution paid 5.3.2018 7.9020 13.8625 0.6673 0.7693 Retained distributions on accumulation units N/A N/A N/A 5.02 4.32 3.85 Distribution paid 5.3.2017 8.5239 14.4577 0.7180 0.7961

Closing net asset value per unit 109.6 110.6 92.64 128.4 124.6 100.6 Second Interim Distribution in Pence per Unit After direct transaction costs of (0.01) (0.01) 0.00 (0.01) (0.01) 0.00 For the period 12 July 2017 to 12 October 2017

Performance A Income A Accumulation X Income X Accumulation Return after charges1 3.07% 23.58% (5.89)% 3.07% 23.88% (5.95)% Units Units Units Units Distribution paid 5.12.2017 14.8272 25.7439 1.2267 1.3993 Other information Distribution paid 5.12.2016 11.3557 19.0176 0.9498 1.0438 Closing net asset value (£000’s) 132,711 155,515 205,599 45,268 52,053 67,697 Closing number of units 121,093,863 140,664,940 221,941,804 35,250,875 41,770,908 67,272,183 First Interim Distribution in Pence per Unit Operating charges2 0.01% 0.01% 0.02% 0.01% 0.01% 0.02% For the period 6 April 2017 to 11 July 2017

Direct transaction costs3 0.01% 0.01% 0.00% 0.01% 0.01% 0.00% A Income A Accumulation X Income X Accumulation Units Units Units Units Prices Pence per unit Pence per unit Pence per unit Pence per unit Pence per unit Pence per unit Distribution paid 5.9.2017 16.2489 27.8438 1.3428 1.5112 Highest offer unit price 118.7 112.9 107.0 137.2 126.1 111.9 Distribution paid 5.9.2016 14.2140 23.5402 1.1697 1.2705 Lowest bid unit price 106.7 91.05 84.33 122.0 98.91 90.66

1 The return after charges figures are based on the net asset value reported for financial statements purposes and are not the same as the performance returns figures quoted in the Performance Table and the Investment Report which are based on bid-to-bid dealing prices (the price at which units are sold). 2 Operating charges are annualised and exclude portfolio trade-related costs, except costs paid to the custodian/depositary and entry/exit charges paid to an underlying collective investment scheme (if any). 3 Direct transaction costs are annualised and principally comprise commissions and taxes, attributable to the Fund’s purchase and sale of equity/debt instruments. See note 15 for further details.

9 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 10 Report on Remuneration

The below disclosures are made in respect of the remuneration policies of the BlackRock group (“BlackRock”), (b) The Manager’s Board as they apply to BlackRock Fund Managers Limited (the “Manager”). The disclosures are made in accordance The Manager’s Board has the task of supervising and providing oversight of the AIFM Remuneration Policy as with the Alternative Investment Fund Managers Directive (the “AIFMD”), the European Commission Delegated it applies to the Manager and its Identified Staff. Regulation supplementing the AIFMD (the “Delegated Regulation”) and the “Guidelines on sound remuneration policies under the AIFMD” issued by the European Securities and Markets Authority (“ESMA”). Decision-making process Remuneration decisions for employees are made once annually in January following the end of the performance The BlackRock AIFM Remuneration Policy (the “AIFM Remuneration Policy”) will apply to the EEA entities year. This timing allows full-year financial results to be considered along with other non-financial goals and within the BlackRock group authorised as a manager of alternative investment funds in accordance with the objectives. Although the framework for remuneration decision-making is tied to financial performance, significant AIFMD, and will ensure compliance with the requirements of Annex II of the AIFMD. discretion is used to determine individual variable remuneration based on achievement of strategic and operating results and other considerations such as management and leadership capabilities. The Manager has adopted the AIFM Remuneration Policy, a summary of which is set out below. No set formulas are established and no fixed benchmarks are used in determining annual incentive awards. Remuneration Governance In determining specific individual remuneration amounts, a number of factors are considered including non- BlackRock’s remuneration governance in EMEA operates as a tiered structure which includes: (a) the financial goals and objectives and overall financial and investment performance. These results are viewed Management Development and Compensation Committee (“MDCC”) (which is the global, independent in the aggregate without any specific weighting, and there is no direct correlation between any particular remuneration committee for BlackRock, Inc. and all of its subsidiaries, including the Manager); and (b) the performance measure and the resulting annual incentive award. The variable remuneration awarded to any Manager’s board of directors (the “Manager’s Board”). The MDCC is responsible for the determination of individual(s) for a particular performance year may also be zero. BlackRock’s remuneration policies. Annual incentive awards are paid from a bonus pool. (a) MDCC The MDCC’s purposes include: The size of the projected bonus pool, including cash and equity awards, is reviewed throughout the year by the MDCC and the final total bonus pool is approved after year-end. As part of this review, the MDCC • providing oversight of: receives actual and projected financial information over the course of the year as well as final year-end – BlackRock’s executive compensation programmes; information. The financial information that the MDCC receives and considers includes the current year projected income statement and other financial measures compared with prior year results and the current – BlackRock’s employee benefit plans; and year budget. The MDCC additionally reviews other metrics of BlackRock’s financial performance (e.g., – such other compensation plans as may be established by BlackRock from time to time for which the net inflows of AUM and investment performance) as well as information regarding market conditions and MDCC is deemed as administrator; competitive compensation levels.

• reviewing and discussing the compensation discussion and analysis included in the BlackRock, Inc. annual The MDCC regularly considers management’s recommendation as to the percentage of preincentive proxy statement with management and approving the MDCC’s report for inclusion in the proxy statement; operating income that will be accrued and reflected as a compensation expense throughout the year for the • reviewing, assessing and making reports and recommendations to the BlackRock, Inc. board of directors cash portion of the total annual bonus pool (the “accrual rate”). The accrual rate of the cash portion of the (the “BlackRock, Inc. Board”) as appropriate on BlackRock’s talent development and succession planning, total annual bonus pool may be modified by the MDCC during the year based on its review of the financial with the emphasis on performance and succession at the highest management levels; and information described above. The MDCC does not apply any particular weighting or formula to the information it considers when determining the size of the total bonus pool or the accruals made for the cash portion of the • in accordance with applicable UK and European regulations and guidance, to act as the Remuneration total bonus pool. Committee for BlackRock’s EMEA regulated entities.

Following the end of the performance year, the MDCC approves the final bonus pool amount. The MDCC directly retains an independent compensation consultant, Semler Brossy Consulting Group LLC, which has no relationship with BlackRock Inc. or the BlackRock, Inc. Board that would interfere with its ability As part of the year-end review process the Enterprise Risk and Regulatory Compliance departments report to to provide independent advice to the MDCC on compensation matters. the MDCC on any activities, incidents or events that warrant consideration in making compensation decisions.

The BlackRock, Inc. Board has determined that all of the members of the MDCC are “independent” within Individuals are not involved in setting their own remuneration. the meaning of the listing standards of the New York Stock Exchange (NYSE), which requires each meet a “non-employee director” standard.

The MDCC held 10 meetings during 2017. The MDCC charter is available on BlackRock, Inc.’s website (www.blackrock.com).

11 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 12 Report on Remuneration continued

Control functions When setting remuneration levels other factors are considered, as well as individual performance, which may Each of the control functions (Enterprise Risk, Legal & Compliance, and Internal Audit) has its own organisational include: structure which is independent of the business units. The head of each control function is either a member of the Global Executive Committee (“GEC”), the global management committee, or has a reporting obligation to • the performance of the Manager, the funds managed by the Manager and/or the relevant functional the board of directors of BlackRock Group Limited, the parent company of all of BlackRock’s EMEA regulated department; entities, including the Manager. • factors relevant to an employee individually; relationships with clients and colleagues; teamwork; skills; any conduct issues; and, subject to any applicable policy, the impact that any relevant leave of absence may Functional bonus pools are determined with reference to the performance of each individual function. The have on contribution to the business); remuneration of the senior members of control functions is directly overseen by the MDCC. • the management of risk within the risk profiles appropriate for BlackRock’s clients; Link between pay and performance • strategic business needs, including intentions regarding retention; There is a clear and well-defined pay-for-performance philosophy and compensation programmes which are • market intelligence; and designed to meet the following key objectives as detailed below: • criticality to business.

• appropriately balance BlackRock’s financial results between shareholders and employees; A primary product tool is risk management and, while employees are compensated for strong performance • attract, retain and motivate employees capable of making significant contributions to the long-term success in their management of client assets, they are required to manage risk within the risk profiles appropriate of the business; for their clients. Therefore, employees are not rewarded for engaging in high-risk transactions outside of • align the interests of senior employees with those of shareholders by awarding BlackRock Inc.’s stock as a established parameters. Remuneration practices do not provide undue incentives for short-term planning or significant part of both annual and long-term incentive awards; short-term financial rewards, do not reward unreasonable risk and provide a reasonable balance between the • control fixed costs by ensuring that compensation expense varies with profitability; many and substantial risks inherent within the business of investment management, risk management and advisory services. • link a significant portion of an employee’s total compensation to the financial and operational performance of the business as well as its common stock performance; BlackRock operates a total compensation model for remuneration which includes a base salary, which is • discourage excessive risk-taking; and contractual, and a discretionary bonus scheme. • ensure that client interests are not negatively impacted by remuneration awarded on a short-term, mid-term and/or long-term basis. BlackRock operates an annual discretionary bonus scheme. Although all employees are eligible to be considered for a discretionary bonus, there is no contractual obligation to make any award to an employee Driving a high-performance culture is dependent on the ability to measure performance against objectives, under its discretionary bonus scheme. In exercising discretion to award a discretionary bonus, the factors values and behaviours in a clear and consistent way. Line managers use a 5-point rating scale to provide an listed above (under the heading “Link between pay and performance”) may be taken into account in addition overall assessment of an employee’s performance, and employees also provide a self-evaluation. The overall, to any other matters which become relevant to the exercise of discretion in the course of the performance year. final rating is reconciled during each employee’s performance appraisal. Employees are assessed on the manner in which performance is attained as well as the absolute performance itself. Discretionary bonus awards for all employees, including executive officers, are subject to a guideline that determines the portion paid in cash and the portion paid in BlackRock, Inc. stock and subject to additional In keeping with the pay-for-performance philosophy, ratings are used to differentiate and reward individual vesting/clawback conditions. Stock awards are subject to further performance adjustment through variation performance – but do not pre-determine compensation outcomes. Compensation decisions remain in BlackRock, Inc.’s share price over the vesting period. As total annual compensation increases, a greater discretionary and are made as part of the year-end compensation process. portion is deferred into stock. The MDCC adopted this approach in 2006 to substantially increase the retention value and shareholder alignment of the compensation package for eligible employees, including the executive officers. The portion deferred into stock vests in three equal instalments over the three years following grant.

Supplementary to the annual discretionary bonus as described above, equity awards from the “Partner Plan” and “Targeted Equity Award Plan” are made to select senior leaders to provide greater linkage with future business results. The long-term incentive awards have been established individually to provide meaningful incentive for continued performance over a multi-year period recognising the scope of the individual’s role, business expertise and leadership skills.

13 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 14 Report on Remuneration continued

Selected senior leaders are eligible to receive performance-adjusted equity-based awards from the “BlackRock Quantitative Remuneration Disclosure Performance Incentive Plan” (“BPIP”). Awards made from the BPIP have a three-year performance period The Manager is required under the AIFMD to make quantitative disclosures of remuneration. These disclosures based on a measurement of As Adjusted Operating Margin1 and Organic Revenue Growth2. Determination of are made in line with BlackRock’s interpretation of currently available regulatory guidance on quantitative pay-out will be made based on the firm’s achievement relative to target financial results at the conclusion of remuneration disclosures. As market or regulatory practice develops BlackRock may consider it appropriate to the performance period. The maximum number of shares that can be earned is 165% of the award in those make changes to the way in which quantitative remuneration disclosures are calculated. Where such changes situations where both metrics achieve pre-determined financial targets. No shares will be earned where the are made, this may result in disclosures in relation to a fund not being comparable to the disclosures made in firm’s financial performance in both of the above metrics is below a pre-determined performance threshold. the prior year, or in relation to other BlackRock fund disclosures in that same year. These metrics have been selected as key measures of shareholder value which endure across market cycles. Disclosures are provided in relation to (a) the staff of the Manager; (b) staff who are senior management; and A limited number of investment professionals have a portion of their annual discretionary bonus (as described (c) staff who have the ability to materially affect the risk profile of the Fund. above) awarded as deferred cash that notionally tracks investment in selected products managed by the employee. The intention of these awards is to align investment professionals with the investment returns of All individuals included in the aggregated figures disclosed are rewarded in line with BlackRock’s the products they manage through the deferral of compensation into those products. Clients and external remuneration policy for their responsibilities across the relevant BlackRock business area. As all individuals evaluators have increasingly viewed more favourably those products where key investors have “skin in the have a number of areas of responsibilities, only the portion of remuneration for those individuals’ services game” through significant personal investments. attributable to the Fund is included in the aggregate figures disclosed.

Identified Staff Members of staff and senior management of the Manager typically provide both AIFMD and non-AIFMD The AIFM Remuneration Policy sets out the process that will be applied to identify staff as Identified Staff, related services in respect of multiple funds, clients and functions of the Manager and across the broader being categories of staff of the Manager, including senior management, risk takers, control functions and BlackRock group. Therefore, the figures disclosed are a sum of each individual’s portion of remuneration any employee receiving total remuneration that takes them into the same remuneration bracket as senior attributable to the Manager according to an objective apportionment methodology which acknowledges the management and risk takers, whose professional activities have a material impact on the risk profiles of the multiple-service nature of the Manager. Accordingly the figures are not representative of any individual’s Manager or of the funds it manages. actual remuneration or their remuneration structure.

The list of Identified Staff will be subject to regular review, being formally reviewed in the event of, but not The amount of the total remuneration awarded by the Manager to its staff which has been attributed to the limited to: Manager’s AIFMD-related business in respect of the Manager’s financial year ending 31 December 2017 is USD 12.8m. This figure is comprised of fixed remuneration of USD 1.4m and variable remuneration • organisational changes; USD 11.4m. There were a total of 59 beneficiaries of the remuneration described above. • new business initiatives; • changes in significant influence function lists; The amount of the aggregate remuneration awarded by the Manager, which has been attributed to the Manager’s AIFMD-related business in respect of the Manager’s financial year ending 31 December 2017, • changes in role responsibilities; and to its senior management was USD 0.3m, and to members of its staff whose actions have a material impact • revised regulatory direction. on the risk profile of the Manager’s AIFMD-related business was USD 12.5m.

1 As Adjusted Operating Margin: As reported in BlackRock’s external filings, reflects adjusted Operating Income divided by Total Revenue net of distribution and servicing expenses and amortisation of deferred sales commissions. 2 Organic Revenue Growth: Equal to net new base fees plus net new Aladdin revenue generated in the year (in dollars).

15 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 16 Portfolio Statement at 5 April 2018

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £000’s Assets Value Investment £000’s Assets

EQUITIES – 94.84%; 5.4.2017 95.54% 10,591 Treatt 43 0.01 14,248 371 0.09 Aerospace & Defence – 1.87%; 5.4.2017 1.88% 7,908 Zotefoams 42 0.01 5,575 74 0.02 543,995 BAE Systems 3,244 0.81 2,910 0.73 43,987 Chemring 90 0.02 Construction & Materials – 1.43%; 5.4.2017 1.33% 410,497 Cobham 494 0.12 119,770 324 0.08 130,711 554 0.14 16,932 Costain 78 0.02 94,790 QinetiQ 199 0.05 142,880 CRH 3,482 0.87 280,702 Rolls-Royce 2,427 0.61 25,959 Forterra 75 0.02 71,882 Senior 212 0.05 15,959 Henry Boot 48 0.01 12,949 180 0.05 70,567 Ibstock 204 0.05 7,474 1.87 11,877 Keller 107 0.03 15,620 Kier 146 0.04 Automobiles & Parts – 0.33%; 5.4.2017 0.26% 84,087 Low & Bonar 46 0.01 291,409 GKN 1,236 0.31 36,352 Marshalls 153 0.04 30516 TI Fluid Systems 76 0.02 325,512 Melrose Industries 689 0.17 1,312 0.33 7,335 Morgan Sindall 86 0.02 Banks – 10.81%; 5.4.2017 10.58% 16,089 Norcros 30 0.01 2,902,249 Barclays 6,154 1.54 30,225 Polypipe 111 0.03 6,501 BGEO 239 0.06 34,349 99 0.02 152,171 CYBG 454 0.11 24,348 Volution 47 0.01 3,429,559 HSBC 23,105 5.80 5,725 1.43 12,195,541 Lloyds Banking 8,070 2.02 Electricity – 0.63%; 5.4.2017 0.70% 193,437 Northern Rock* – 0.00 30,718 ContourGlobal 74 0.02 35,006 OneSavings Bank 130 0.03 66,516 Drax 184 0.05 553,440 Royal Bank of Scotland 1,453 0.37 174,460 SSE 2,224 0.56 460,573 Standard Chartered 3,316 0.83 5,194 TBC Bank 95 0.02 2,482 0.63 43,367 Virgin Money 115 0.03 Electronic & Electrical Equipment – 0.50%; 5.4.2017 0.49% 43,131 10.81 3,820 Dialight 19 0.00 65,948 Halma 775 0.19 Beverages – 2.92%; 5.4.2017 2.75% 16,547 Luceco 9 0.00 14,204 A.G. Barr 94 0.02 45,345 Morgan Advanced Materials 147 0.04 43,497 294 0.07 9,372 71 0.02 33,000 Coca-Cola HBC 879 0.22 6,077 Renishaw 279 0.07 414,486 Diageo 10,337 2.59 20,264 542 0.14 31,791 Stock Spirits 82 0.02 15,932 TT Electronics 31 0.01 11,686 2.92 10,105 Xaar 34 0.01 Chemicals – 0.73%; 5.4.2017 0.63% 2,987 XP Power 99 0.02 18,325 Carclo 16 0.00 2,006 0.50 21,220 Croda International 985 0.25

78,781 234 0.06 32,267 Johnson Matthey 1,015 0.26 42,024 204 0.05

17 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 18 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £000’s Assets Value Investment £000’s Assets

Financial Services – 2.75%; 5.4.2017 2.89% Food & Drug Retailers – 1.51%; 5.4.2017 1.36% 162,758 3i 1,432 0.36 17,624 218 0.05 42,403 Allied Minds 46 0.01 269,518 J Sainsbury 658 0.17 29,654 Arrow Global 106 0.03 19,350 McColl’s Retail 45 0.01 69,893 Ashmore 266 0.07 95,445 Ocado 500 0.13 45,133 158 0.04 79,302 SSP 489 0.12 20,519 Charter Court Financial Services 61 0.01 1,638,780 Tesco 3,323 0.83 4,851 City of London Investment 21 0.01 363,403 Wm Morrison Supermarkets 817 0.20 24,498 Close Brothers 353 0.09 6,050 1.51 45,421 Hargreaves Lansdown 756 0.19 11,462 Henderson 10 0.00 Food Producers – 2.69%; 5.4.2017 2.78% 63,678 IG 521 0.13 59,425 Associated British Foods 1,491 0.37 44,660 International Personal Finance 105 0.03 25,210 Bakkavor 44 0.01 110,467 608 0.15 22,670 Carr’s Milling 29 0.01 181,184 IP 219 0.05 8,688 Cranswick 243 0.06 82,642 John Laing 224 0.06 18,397 Dairy Crest 94 0.02 71,505 341 0.09 27,429 Devro 54 0.01 9,606 Liontrust 52 0.01 124,200 167 0.04 53,625 2,226 0.56 12,123 Hilton Food 100 0.03 277,726 Man 485 0.12 113,028 42 0.01 13,967 Metro Bank 490 0.12 25,047 PureCircle 92 0.02 55,295 NEX 555 0.14 80,354 Tate & Lyle 440 0.11 47,018 Paragon 225 0.06 197,495 Unilever 7,958 2.00 24,928 Provident Financial 167 0.04 10,754 2.69 17,657 Provident Financial rights 61 0.01 Forestry & Paper – 0.30%; 5.4.2017 0.30% 8,642 208 0.05 62,643 Mondi 1,203 0.30 20,084 Real Estate Credit Investments 32 0.01 852 S&U 19 0.00 Gas, Water & Multiutilities – 2.05%; 5.4.2017 2.85% 19,583 Schroders 627 0.16 953,204 1,346 0.34 97,278 Tullett Prebon 428 0.11 579,379 National Grid 4,773 1.20 27,827 Utilico Emerging Markets 61 0.02 72,768 Pennon 470 0.12 55,167 VPC Specialty Lending Investments 42 0.01 39,724 Severn Trent 738 0.19 30,213 Xafinity 52 0.01 115,351 United Utilities 817 0.20 10,957 2.75 8,144 2.05 Fixed Line Telecommunications – 0.91%; 5.4.2017 1.23% General Industrials – 0.69%; 5.4.2017 0.63% 1,431,480 BT 3,325 0.83 247,139 Coats 196 0.05 88,995 KCOM 84 0.02 170,837 DS Smith 815 0.20 93,324 Talktalk Telecom 110 0.03 68,917 RPC 538 0.14 9,374 115 0.03 67,076 Smiths 1,001 0.25 36,514 Vesuvius 207 0.05 3,634 0.91 2,757 0.69

19 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 20 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £000’s Assets Value Investment £000’s Assets

General Retailers – 1.73%; 5.4.2017 1.94% Household Goods & Home Construction – 3.17%; 5.4.2017 3.33% 95,322 AA 83 0.02 169,698 922 0.23 48,792 AO World 56 0.01 21,557 675 0.17 148,557 B&M European Value Retail 588 0.15 21,606 Berkeley 833 0.21 56,058 Card Factory 111 0.03 23,381 Bovis Homes 272 0.07 14,925 Carpetright 6 0.00 61,487 203 0.05 139,464 Debenhams 31 0.01 39,204 185 0.05 27,005 DFS Furniture 50 0.01 13,307 Galliford Try 113 0.03 9,072 Dignity 81 0.02 4,435 Galliford Try rights 12 0.00 171,106 337 0.08 17,698 Headlam 78 0.02 18,769 Dunelm 102 0.03 23,193 McBride 37 0.01 30,870 Halfords 103 0.03 7,165 MJ Gleeson 52 0.01 72,753 Inchcape 522 0.13 52,376 Persimmon 1,372 0.34 57,915 JD Sports Fashion 200 0.05 106,395 Reckitt Benckiser 6,599 1.66 95,033 Just Eat 651 0.16 40,272 Redrow 240 0.06 368,962 Kingfisher 1,092 0.27 552,800 1,036 0.26 54,343 Lookers 49 0.01 12,629 3.17 273,384 Marks & Spencer 749 0.19 23,283 Moss Bros 10 0.00 Industrial Engineering – 0.86%; 5.4.2017 0.76% 41,257 Mothercare 8 0.00 33,720 309 0.08 21,866 N Brown 40 0.01 32,092 Fenner 196 0.05 23,233 Next 1,120 0.28 948 Goodwin 16 0.00 181,067 Pendragon 47 0.01 13,536 Hill & Smith 179 0.04 75,023 130 0.03 47,012 IMI 486 0.12 201,520 Saga 230 0.06 7,371 Porvair 34 0.01 41,385 Sports Direct International 152 0.04 63,797 Renold 18 0.00 44,823 Topps Tiles 31 0.01 4,527 Rhi Magnesita 184 0.05 18,295 WH Smith 364 0.09 150,140 427 0.11 87,000 Severfield 63 0.02 6,943 1.73 12,315 Spirax-Sarco Engineering 701 0.18 Health Care Equipment & Services – 0.98%; 5.4.2017 0.87% 16,346 Trifast 42 0.01 24,242 Cambian 43 0.01 37,411 Weir 750 0.19 7,486 Consort Medical 87 0.02 3,405 0.86 223,413 ConvaTec 447 0.11 69,690 399 0.10 Industrial Metals & Mining – 0.13%; 5.4.2017 0.07% 14,229 NMC Health 488 0.12 83,433 Evraz 376 0.09 149,612 Smith & Nephew 1,966 0.49 47,897 114 0.03 45,854 96 0.03 20,076 Kenmare Resources 43 0.01 44,018 UDG Healthcare 384 0.10 533 0.13 3,910 0.98 Industrial Transportation – 0.48%; 5.4.2017 0.41% 169,027 BBA Aviation 541 0.14 4,923 Clarkson 153 0.04 12,256 Clipper Logistics 43 0.01 6,818 James Fisher & Sons 104 0.03 156,031 861 0.22

21 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 22 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £000’s Assets Value Investment £000’s Assets

59,262 Stobart 137 0.03 Mining – 6.40%; 5.4.2017 6.09% 18,717 Wincanton 41 0.01 27,163 Acacia Mining 37 0.01 1,880 0.48 168,730 Anglo American 2,775 0.70 57,849 Antofagasta 538 0.13 Leisure Goods – 0.05%; 5.4.2017 0.02% 355,326 BHP Billiton 5,010 1.26 4,721 113 0.03 189,775 290 0.07 46,477 Photo-Me 76 0.02 31,986 Fresnillo 402 0.10 189 0.05 36,368 Gem Diamonds 31 0.01 1,991,913 Glencore 7,144 1.79 Life Insurance – 4.96%; 5.4.2017 4.61% 41,335 83 0.02 683,802 Aviva 3,335 0.84 41,510 KAZ Minerals 364 0.09 26,222 Chesnara 103 0.03 45,263 Lonmin 27 0.01 11,063 Hansard Global 9 0.00 67,886 Petra Diamonds 46 0.01 48,096 Intermediate Capital 498 0.12 309,627 Petropavlovsk 22 0.01 132,266 Just 182 0.05 43,564 Polymetal International 319 0.08 1,004,685 Legal & General 2,620 0.66 15,896 Randgold Resources 886 0.22 812,172 Old Mutual 1,910 0.48 199,163 Rio Tinto 7,260 1.82 68,966 Phoenix 527 0.13 699,114 Sirius Minerals 209 0.05 441,351 Prudential 7,916 1.99 11,645 Vedanta Resources 82 0.02 89,035 St. James’s Place Capital 943 0.24 465,364 Standard Life 1,693 0.42 25,525 6.40 19,736 4.96 Mobile Telecommunications – 2.40%; 5.4.2017 2.53% 77,704 Inmarsat 265 0.07 Media – 3.41%; 5.4.2017 3.69% 4,554,371 Vodafone 9,275 2.33 4,043 64 0.02 65,975 276 0.07 9,540 2.40 156,427 Auto Trader 546 0.14 Non-Life Insurance – 1.13%; 5.4.2017 1.06% 19,849 Bloomsbury Publishing 36 0.01 35,226 Admiral 653 0.16 51,858 Entertainment One 145 0.04 90,784 Beazley 520 0.13 8,387 Euromoney Institutional Investor 104 0.03 232,680 Direct Line 810 0.20 66,764 Gocompare.Com 77 0.02 48,603 104 0.03 56,534 Huntsworth 52 0.01 50,237 Hastings 135 0.03 138,646 Informa 987 0.25 46,070 679 0.17 42,711 ITE 68 0.02 20,869 Jardine Lloyd Thompson 264 0.07 631,994 ITV 924 0.23 30,857 Lancashire 176 0.04 92,867 Moneysupermarket.com 266 0.07 172,850 RSA Insurance 1,110 0.28 132,197 Pearson 969 0.24 23,426 Sabre Insurance 57 0.02 178,625 RELX 2,709 0.68 4,508 1.13 15,241 672 0.17 176,624 Sky 2,320 0.58 Oil & Gas Producers – 12.79%; 5.4.2017 11.61% 9,370 STV 30 0.01 3,293,537 BP 16,456 4.13 19,738 Tarsus 54 0.01 92,010 199 0.05 58,191 Trinity Mirror 47 0.01 179,216 Enquest 52 0.01 66,615 UBM 619 0.15 12,274 Nostrum Oil & Gas 37 0.01 210,677 WPP 2,399 0.60 133,854 Ophir Energy 75 0.02 54,043 ZPG 184 0.05 130,752 Premier Oil 92 0.02 13,548 3.41 786,434 Royal Dutch Shell class ‘A’ shares 18,344 4.60

23 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 24 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £000’s Assets Value Investment £000’s Assets

640,759 Royal Dutch Shell class ‘B’ shares 15,205 3.82 99,793 Schroder Real Estate 58 0.01 47,743 SOCO International 51 0.01 168,486 100 0.03 239,731 490 0.12 33,645 St. Modwen Properties 131 0.03 51,001 12.79 20,206 U and I 40 0.01 41,898 Unite 337 0.09 Oil Equipment, Services & Distribution – 0.26%; 5.4.2017 0.39% 1,772 0.44 35,670 Gulf Marine Services 12 0.00 21,031 Hunting 146 0.04 Real Estate Investment Trusts – 2.08%; 5.4.2017 2.02% 112,865 John Wood 609 0.15 371,587 Assura 221 0.06 64,170 Lamprell 48 0.01 24,773 Big Yellow 218 0.05 45,386 Petrofac 241 0.06 170,357 1,113 0.28 1,056 0.26 68,233 Capital & Regional 37 0.01 50,683 50 0.01 Personal Goods – 0.39%; 5.4.2017 0.43% 43,686 Custodian REIT 49 0.01 70,184 Burberry 1,196 0.30 17,551 551 0.14 27,591 PZ Cussons 64 0.02 36,578 Ediston Property Investment 39 0.01 7,649 SuperGroup 120 0.03 109,212 Empiric Student Property 89 0.02 5,223 Ted Baker 140 0.04 81,190 F&C Commercial Property Trust 114 0.03 1,520 0.39 32,385 F&C UK Real Estate Investment Trust 33 0.01 46,048 317 0.08 Pharmaceuticals & Biotechnology – 7.59%; 5.4.2017 8.46% 133,343 729 0.18 216,494 AstraZeneca 10,838 2.72 74,600 Hansteen 95 0.02 67,242 BTG 398 0.10 147,715 Properties 304 0.08 36,914 Circassia Pharmaceuticals 33 0.01 121,192 Land Securities 1,154 0.29 17,220 476 0.12 111,930 LondonMetric Property 201 0.05 10,339 Genus 239 0.06 34,213 LXI REIT 34 0.01 826,041 GlaxoSmithKline 11,722 2.94 99,303 McCarthy & Stone 143 0.04 23,883 Hikma Pharmaceuticals 283 0.07 14,992 McKay Securities 41 0.01 120,820 477 0.12 46,236 NewRiver REIT 136 0.03 352,640 Oxford Biomedica 37 0.01 91,025 Primary Health Properties 100 0.03 22,328 PureTech Health 34 0.01 5,354 Primary Health Properties rights^ – 0.00 152,128 Shire 5,639 1.41 259,406 Redefine International 85 0.02 113,012 Vectura 89 0.02 58,336 Regional REIT 58 0.02 30,265 7.59 35,694 182 0.05 Real Estate Investment & Services – 0.44%; 5.4.2017 0.43% 169,657 1,046 0.26 123,666 Capital & Counties Properties 333 0.08 38,258 Shaftesbury 376 0.09 22,574 CLS 52 0.01 63,586 Standard Life Investment Property Trust 58 0.01 21,491 22 0.01 66,604 Target Healthcare REIT 70 0.02 850 Daejan 50 0.01 4,678 Town Centre Securities 13 0.00 63,737 52 0.01 219,958 Tritax Big Box 323 0.08 66,598 Grainger Trust 197 0.05 115,017 UK Commercial Property Trust 103 0.03 12,932 Helical Bar 44 0.01 21,093 Workspace 212 0.05 19,762 LSL Property Services 48 0.01 8,294 2.08 13,629 Phoenix Spree Deutschland 47 0.01

70,343 Raven Russia 31 0.01 22,960 230 0.06

25 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 26 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £000’s Assets Value Investment £000’s Assets

Software & Computer Services – 0.84%; 5.4.2017 0.77% 112,207 IWG 261 0.07 18,953 Alfa Financial Software 66 0.02 12,523 John Menzies 79 0.02 10,890 AVEVA 210 0.05 13,280 Mears 45 0.01 11,867 139 0.04 58,718 92 0.02 13,720 FDM 141 0.04 19,668 Northgate 67 0.02 6,120 Fidessa 249 0.06 53,616 Pagegroup 289 0.07 9,317 31 0.01 13,141 PayPoint 106 0.03 73,265 International 801 0.20 311,020 Rentokil Initial 855 0.21 46,832 NCC 89 0.02 10,486 Ricardo 98 0.02 184,530 Sage 1,208 0.30 11,734 Robert Walters 77 0.02 12,352 SDL 49 0.01 38,287 RPS 98 0.02 20,149 133 0.03 22,371 Sanne 149 0.04 53,785 Sophos 258 0.06 179,283 165 0.04 3,374 0.84 118,418 Shanks 88 0.02 107,450 SIG 148 0.04 Support Services – 4.81%; 5.4.2017 5.16% 40,509 Smurfit Kappa 1,234 0.31 10,581 Acal 44 0.01 51,368 Speedy Hire 26 0.01 41,079 304 0.08 20,770 SThree 69 0.02 84,784 Ashtead 1,674 0.42 43,515 529 0.13 84,735 572 0.14 6,111 Vp 50 0.01 138,511 BCA Marketplace 225 0.06 19,108 4.81 30,763 62 0.02 56,838 Bunzl 1,179 0.30 Technology Hardware & Equipment – 0.07%; 5.4.2017 0.08% 116,051 159 0.04 78,950 Laird 159 0.04 96,553 Carillion^ – 0.00 40,826 Nanoco 15 0.00 17,511 Charles Taylor Consulting 45 0.01 96,008 Communications 118 0.03 39,820 Communisis 25 0.01 292 0.07 41,155 Connect 24 0.01 15,092 DCC 982 0.25 Tobacco – 5.24%; 5.4.2017 5.86% 14,782 De La Rue 74 0.02 390,879 British American Tobacco 16,749 4.20 18,717 Diploma 218 0.05 163,175 Imperial Brands 4,127 1.04 77,418 463 0.12 20,876 5.24 46,833 Equiniti 137 0.03 Travel & Leisure – 4.51%; 5.4.2017 4.29% 47,997 205 0.05 47,832 128 0.03 156,591 Experian 2,419 0.61 29,973 Carnival 1,391 0.35 42,548 Ferguson 2,253 0.57 166,691 407 0.10 262,576 G4S 657 0.16 269,996 Compass 3,995 1.00 36,334 Grafton 273 0.07 84,805 Domino’s Pizza 275 0.07 226,396 Hays 423 0.11 42,735 easyJet 701 0.18 42,662 Hogg Robinson 50 0.01 70,151 Enterprise Inns 86 0.02 45,534 337 0.08 215,642 FirstGroup 194 0.05 101,471 Howden Joinery 472 0.12 5,661 Fuller Smith & Turner class ‘A’ shares 54 0.01 35,443 Interserve 31 0.01 7,291 Go-Ahead 129 0.03 27,453 Intertek 1,276 0.32 55,292 Greene King 268 0.07 93,743 GVC 851 0.21 16,397 Gym 37 0.01

27 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 28 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £000’s Assets Value Investment £000’s Assets

19,510 Hollywood Bowl 40 0.01 157,236 Greencoat UK Wind 190 0.05 16,207 Hostelworld 60 0.02 14,019 HarbourVest Global Private Equity Fund 167 0.04 32,296 InterContinental Hotels 1,396 0.35 3,654 Henderson Eurotrust 39 0.01 282,392 International Consolidated Airlines 1,735 0.44 20,728 Henderson Far East Income Fund 74 0.02 11,216 JD Wetherspoon 128 0.03 36,089 Henderson International Income Trust 56 0.01 119,261 Marston’s 120 0.03 304,475 HICL Infrastructure 409 0.10 120,593 Merlin Entertainments 417 0.10 26,338 Impax Environmental Markets 66 0.02 21,238 Millennium & Copthorne Hotels 115 0.03 8,696 International Biotechnology 46 0.01 41,926 Mitchells & Butlers 108 0.03 244,157 International Public Partnership 339 0.08 69,477 277 0.07 44,623 John Laing Environmental Assets 44 0.01 20,613 On the Beach 113 0.03 138,251 John Laing Infrastructure Fund 152 0.04 14,058 Paddy Power Betfair 983 0.25 35,078 JP Morgan Global Convertibles Income Fund 33 0.01 48,515 356 0.09 8,418 JP Morgan Russian Securities 43 0.01 33,881 Rank 61 0.02 2,778 Jupiter US Smaller Companies 24 0.01 35,528 Restaurant 92 0.02 20,397 115 0.03 68,826 Stagecoach 94 0.02 3,263 Lowland 48 0.01 244,767 Thomas Cook 289 0.07 2,308 Montanaro European Smaller Companies Fund 18 0.00 74,064 TUI 1,136 0.28 6,914 NB Private Equity Partners Fund 66 0.02 31,309 Whitbread 1,153 0.29 96,791 NextEnergy Solar Fund 107 0.03 144,192 William Hill 473 0.12 13,219 P2P Global Investments 103 0.03 9,775 326 0.08 8,938 Participations Fund 171 0.04 17,988 4.51 40,980 Pershing Square 368 0.09 12,792 Polar Capital 23 0.01 COLLECTIVE INVESTMENT SCHEMES – 4.53%; 5.4.2017 4.30% 12,897 Princess Private Equity 115 0.03 Equity Funds – 1.54%; 5.4.2017 1.32% 16,805 Project Finance Investments 17 0.00 90,790 194 0.05 2,892 Ranger Direct Lending 21 0.01 34,176 Aberdeen Asian Income Fund 70 0.02 169,948 Renewables Infrastructure 180 0.04 44,971 Fund 61 0.01 20,962 RIT Capital Partners 398 0.10 17,287 Asian Total Return Investment 60 0.01 10,977 Riverstone Energy 131 0.03 59,103 BACIT 110 0.03 36,949 Ruffer Investment Red preference shares 84 0.02 8,318 Baillie Gifford Shin Nippon 80 0.02 28,252 Schroder Asia Pacific Fund 126 0.03 4,534 Baring Emerging Europe 35 0.01 4,289 Schroder Income Growth Fund 12 0.00 81,700 BBGI 108 0.03 19,090 Schroder Japan Growth Fund 40 0.01 7,390 Beta Global Emerging Markets Fund* – 0.00 39,576 Schroder Oriental Income Fund 98 0.02 4,535 BH Global – GBP shares 62 0.01 26,421 Schroder UK Growth Fund 44 0.01 1,943 BH Macro Hedge Fund 38 0.01 3,921 Schroder UK Mid & Small Cap Fund 20 0.01 73,826 Bluefield Solar Income Fund 85 0.02 112,236 Sequoia Economic Infrastructure Income Fund 117 0.03 5,876 155 0.04 27,907 SQN Asset Finance Income 25 0.01 837 Capital Gearing 32 0.01 84,952 SQN Asset Finance Income class ‘C’ shares 74 0.02 69,003 CQS New City High Yield Fund 41 0.01 77,442 Starwood European Real Estate Finance 79 0.02 35,996 CVC Credit Partners 40 0.01 11,562 Strategic Equity Capital 26 0.01 32,477 Dexion Absolute GBP^ – 0.00 65,503 TwentyFour Income Fund 78 0.02 10,178 F&C Global Small Companies 132 0.03 28,336 TwentyFour Select Monthly Income Fund 28 0.01 88,319 Foresight Solar Fund 91 0.02 32,812 Vietnam Enterprise Investments 159 0.04 53,557 Funding Circle SME Income Fund 56 0.01 32,717 VinaCapital Vietnam Opportunity Fund 113 0.03 25,105 GCP Asset Backed Income Fund 25 0.01 6,161 1.54

29 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 30 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £000’s Assets Value Investment £000’s Assets

Fixed Income Funds – 0.04%; 5.4.2017 0.05% 28,479 Finsbury Growth & Income Trust 215 0.06 36,122 Alcentra European Floating Rate Income Fund 36 0.01 2,763 Fundsmith Emerging Equities Trust 33 0.01 140,177 NB Global Floating Rate Income Fund 130 0.03 146,366 GCP Infrastructure Investments Fund 174 0.04 166 0.04 78,059 GCP Student Living 109 0.03 21,505 Genesis Emerging Markets Fund 150 0.04 Investment Trusts – 2.91%; 5.4.2017 2.89% 22,983 Govett Strategic Investment Trust* – 0.00 6,342 Aberdeen Asian Smaller Companies Investment Trust 65 0.02 933 Hansa Trust 9 0.00 20,364 Aberdeen New Dawn Investment Trust 46 0.01 4,986 Henderson European Investment Trust 61 0.02 15,377 Aberforth Smaller Companies Investment Trust 199 0.05 30,602 Henderson High Income Investment Trust 52 0.01 34,097 Aberforth Split Level Income Trust 32 0.01 11,872 Henderson Smaller Companies Investment Trust 101 0.03 56,913 402 0.10 12,024 Henderson Value Trust 32 0.01 3,079 38 0.01 11,050 127 0.03 12,481 Artemis Alpha Trust 37 0.01 6,860 HG Capital Investment Trust 121 0.03 12,432 Baillie Gifford Japan Investment Trust 102 0.03 11,087 ICG Enterprise Trust 88 0.02 20,713 175 0.04 5,388 Independent Investment Trust 38 0.01 46,110 BB Healthcare Trust 48 0.01 12,229 Invesco Asia Investment Trust 34 0.01 32,504 Bioscience Investment Trust* – 0.00 16,120 Invesco Income & Growth Investment Trust 43 0.01 11,843 Biotech Growth Trust 80 0.02 5,706 Invesco Perpetual UK Smaller Companies Investment Trust 28 0.01 28,993 BlackRock Frontiers Investment Trust** 46 0.01 38,997 JP Morgan American Investment Trust 151 0.04 15,443 BlackRock Greater Europe Investment Trust** 48 0.01 10,986 JP Morgan Asian Investment Trust 38 0.01 44,454 BlackRock Income Strategies Trust** 52 0.01 12,382 JP Morgan Chinese Investment Trust 36 0.01 13,424 BlackRock Latin American Investment Trust** 64 0.02 9,572 JP Morgan Claverhouse Investment Trust 68 0.02 11,905 BlackRock North American Income Trust** 17 0.00 20,018 JP Morgan Emerging Markets Investment Trust 172 0.04 7,561 BlackRock Smaller Companies Trust** 102 0.03 28,057 JP Morgan Euro Smaller Companies Trust 112 0.03 12,614 BlackRock Throgmorton Trust** 62 0.02 42,442 JP Morgan Global Emerging Markets Income Trust 54 0.01 25,418 BlackRock World Mining Trust** 93 0.02 17,383 JP Morgan Indian Investment Trust 122 0.03 18,477 British Empire Securities & General Investment Trust 130 0.03 27,659 JP Morgan Japanese Investment Trust 122 0.03 5,190 Brunner Investment Trust 38 0.01 10,748 JP Morgan Japanese Smaller Companies Investment Trust 45 0.01 21,570 City Merchants High Yield Trust 39 0.01 4,107 JP Morgan Mid Cap Investment Trust 48 0.01 56,458 City of London Investment Trust 231 0.06 15,019 JP Morgan Overseas Investment Trust 46 0.01 59,358 Diverse Income Trust 59 0.01 2,698 JP Morgan Smaller Companies Investment Trust 30 0.01 22,031 Dunedin Income Growth Investment Trust 54 0.01 13,429 JP Morgan European Investment Trust Growth Shares 40 0.01 11,224 Dunedin Smaller Companies Investment Trust 28 0.01 13,300 JP Morgan European Investment Trust Income Shares 20 0.01 34,813 Edinburgh Dragon Investment Trust 126 0.03 17,080 Jupiter European Opportunities Trust 119 0.03 33,877 Edinburgh Investment Trust 221 0.06 2,116 Keystone Investment Trust 35 0.01 7,519 Edinburgh Worldwide Investment Trust 57 0.01 9,570 Majedie Investment Trust 27 0.01 5,432 Electra Investment Trust 45 0.01 15,386 Martin Currie Global Portfolio Investment Trust 35 0.01 13,756 EP Global Opportunities Trust 40 0.01 2,663 Martin Currie Pacific Investment Trust 10 0.00 6,078 Euro Investment Trust 53 0.01 83,949 MedicX Fund 67 0.02 16,260 F&C Capital & Income Investment Trust 51 0.01 13,327 Mercantile Investment Trust 276 0.07 94,011 F&C Investment Trust 598 0.15 14,090 Merchants Investment Trust 68 0.02 10,425 F&C Private Equity Trust 37 0.01 17,725 Middlefield Canadian Income Trust 16 0.00 13,916 Fidelity Asian Values Investment Trust 53 0.01 59,342 Fidelity China Special Situations Investment Trust 142 0.04 73,850 Investment Trust 153 0.04 15,931 Fidelity Japanese Values Investment Trust 23 0.01 35,770 Investment Trust 92 0.02

31 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 32 Portfolio Statement continued

Holding or Market % of Holding or Market % of Nominal Value Total Net Nominal Value Total Net Value Investment £000’s Assets Value Investment £000’s Assets

33,941 261 0.07 DERIVATIVES – 0.01%; 5.4.2017 0.00% 8,261 Montanaro UK Smaller Companies Investment Trust 46 0.01 Futures – 0.01%; 5.4.2017 0.00% 13,776 101 0.03 77 FTSE 100 Index June 2018 42 0.01 21,421 Murray International Trust 255 0.06 10,094 New India Investment Trust 43 0.01 Forward Currency Contracts – 0.00%; 5.4.2017 0.00% 6,363 North American Income Trust 76 0.02 £517,670 UK sterling vs US dollar^ – 0.00 1,764 North Atlantic Smaller Companies Investment Trust 47 0.01 18,412 Pacific Assets Investment Trust 46 0.01 Portfolio of investments 396,225 99.38 5,712 Pacific Horizon Investment Trust 19 0.01 Net other assets 2,488 0.62 41,539 Perpetual Income & Growth Investment Trust 144 0.04 Total net assets 398,713 100.00 354 140 0.04 Unless otherwise stated, all securities are either listed on a recognised exchange or traded on an eligible securities market. 36,358 Polar Capital Global Financials Trust 49 0.01 * Delisted investments fair valued at zero. 22,958 Polar Capital Technology Trust 253 0.07 ** Managed by a related party. 27,247 Scottish American Investment Trust 97 0.02 ^ Investments which are less than £500 are rounded to zero. 12,070 Scottish Investment Trust 96 0.02 237,792 Scottish Mortgage Investment Trust 1,038 0.26 5,292 Scottish Oriental Smaller Companies Trust 52 0.01 181,619 Securities Trust of Scotland* – 0.00 11,178 Securities Trust of Scotland (Registered) 18 0.00 10,660 Standard Life Equity Income Trust 48 0.01 11,612 Standard Life European Private Equity Trust 37 0.01 11,907 Standard Life UK Smaller Companies Trust 58 0.01 10,792 Temple Bar Investment Trust 133 0.03 45,222 Templeton Emerging Markets Investment Trust 336 0.08 9,497 TR European Growth Investment Trust 100 0.03 49,413 TR Property Investment Trust 190 0.05 63,071 Troy Income & Growth Trust 46 0.01 13,203 Value & Income Investment Trust 34 0.01 28,199 288 0.07 9,811 Witan Pacific Investment Trust 31 0.01 144,695 Woodford Patient Capital Trust 118 0.03 8,546 Worldwide Healthcare Trust 207 0.05 11,557 2.91 Property Funds – 0.03%; 5.4.2017 0.03% 5,035 ICG-Longbow Senior Secured UK Property Debt Investments 5 0.00 19,761 Macau Property Opportunities Fund 38 0.01 106,213 Picton Property Income Fund 91 0.02 134 0.03 Multi-Strategy Funds – 0.01%; 5.4.2017 0.01% 21,703 Highbridge Multistrategy Fund 48 0.01

33 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 34 Statement of Total Return Balance Sheet for the year ended 5 April 2018 at 5 April 2018

For the year For the year 5.4.2018 5.4.2017 to 5.4.2018 to 5.4.2017 Notes £000’s £000’s Notes £000’s £000’s £000’s £000’s Assets: Income Fixed assets Net capital (losses)/gains 3 (1,836) 89,076 – Investment assets 396,225 482,219 Revenue 4 18,114 19,928 Current assets Expenses 5 (303) (369) – Debtors 9 2,689 2,785 Interest payable and similar – Cash and bank balances 10 3,146 1,564 charges 6 – (1) Total assets 402,060 486,568 Net revenue before taxation 17,811 19,558 Liabilities: Taxation 7 (23) (21) Investment liabilities – (8) Net revenue after taxation 17,788 19,537 Creditors Total return before distributions 15,952 108,613 – Distribution payable (3,294) (3,493) Distributions 8 (17,788) (19,534) – Other creditors 11 (53) (85) Change in net assets Total liabilities (3,347) (3,586) attributable to unitholders from investment activities (1,836) 89,079 Net assets attributable to unitholders 398,713 482,982

G D Bamping (Director) Statement of Change in Net Assets Attributable to Unitholders M T Zemek (Director) BlackRock Fund Managers Limited for the year ended 5 April 2018 17 May 2018 For the year For the year to 5.4.2018 to 5.4.2017 £000’s £000’s £000’s £000’s

Opening net assets attributable to unitholders 482,982 501,399 Amounts receivable on issue of units 30,306 18,586 Amounts payable on cancellation of units (116,578) (130,823) (86,272) (112,237) Stamp duty reserve tax (4) – Change in net assets attributable to unitholders from investment activities (1,836) 89,079 Retained distribution on accumulation units 3,843 4,741 Closing net assets attributable to unitholders 398,713 482,982

35 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 36 Notes to Financial Statements For the year ended 5 April 2018

1. Accounting and Distribution Policies Investments in dual priced CIS have been valued at market values, defined as fair value, which is usually Accounting Policies bid value at the closing valuation point of the underlying fund on the last business day of the accounting period. Investments in single priced CIS have been valued at market values, defined as fair value, which is (a) The financial statements have been prepared in accordance with the Statement of Recommended usually the latest available price at the close of business on the last business day of the accounting period. Practice for Authorised Funds (the “SORP”) issued by the Investment Management Association (now known as the Investment Association) in May 2014 as applicable to charity common investment funds and (g) Any transactions in foreign currencies are translated into Sterling at the rates of exchange ruling on the Charities (Accounts & Reports) Regulations 2008. date of any such transaction. Assets and liabilities in foreign currencies are translated into Sterling at the exchange rates ruling at the close of business on the last business day of the accounting period. Revenue (b) Dividends on quoted ordinary shares and preference shares are recognised when the securities are items in foreign currencies are translated into Sterling at the exchange rate when the revenue quoted ex-dividend. Where such securities are not quoted, dividends are recognised when the right to is received. receive payment is established. (h) Where appropriate, certain permitted financial instruments such as derivatives are used for efficient All REIT dividend revenue is accounted for partly as revenue and partly as capital, depending on the portfolio management. Where such financial instruments are used to protect or enhance revenue, the underlying REIT distribution. revenue and expenses derived therefrom are included in “Revenue” in the Statement of Total Return. All distributions from Collective Investment Schemes (“CIS”) are recognised when the securities are Where such financial instruments are used to protect or enhance capital, the gains and losses derived quoted ex-dividend. All distributions from holdings in CIS are treated as revenue with the exception of the therefrom are included in “Net capital (losses)/gains” in the Statement of Total Return. equalisation element, which is treated as capital. (i) Cash and bank balances consist of deposits held on call with banks and cash held with clearing brokers All revenue is recognised as a gross amount that takes account of any withholding taxes but excludes any and counterparties. other taxes such as attributable tax credits. Distribution Policies Bank interest is recognised on an accruals basis. (j) The ordinary element of stock dividends is treated as revenue and forms part of the distribution. The Fund receives Manager’s charge rebates from BlackRock related investments in the normal course of business. These are recognised on an accruals basis and are treated as revenue, unless it is the policy of (k) Special dividends and share buy backs recognised as revenue form part of the distribution. the underlying fund to charge its fees to capital, in which case these rebates will be recognised as capital. (l) All of the net revenue available for distribution at the final accounting year end will be distributed to (c) Ordinary stock dividends are recognised wholly as revenue and are based on the market value of the unitholders with the balance attributable to accumulation unitholders retained within the Fund. In order shares on the date they are quoted ex-dividend. Where an enhancement is offered, the amount by which to conduct a controlled dividend flow to unitholders, interim distributions may be made at the Manager’s the market value of the shares (on the date they are quoted ex-dividend) exceeds the cash dividend is discretion, up to a maximum of the distributable revenue available for the period. Should expenses and taken to capital. taxation together exceed revenue, there will be no distribution and the shortfall will be met from capital. (d) The underlying circumstances behind both special dividends and share buy backs are reviewed on a 2. Financial Instruments and Risks case by case basis in determining whether the amount is revenue or capital in nature. Any tax treatment The Fund’s investment activities expose it to the various types of risk which are associated with the will follow the accounting treatment of the principal amount. financial instruments and markets in which it invests. The following information is not intended to be a (e) All expenses, except those relating to the purchase and sale of investments are charged against revenue. comprehensive summary of all risks and investors should refer to the Scheme Particulars for a more All expenses are recognised on an accruals basis. detailed discussion of the risks inherent in investing in the Fund.

(f) The investments of the Fund have been valued at market value, defined as fair value, which is usually bid Risk management framework value at close of business on the last business day of the accounting period. In the case of an investment The Manager has delegated the day-to-day administration of the investment programme to the Investment which is not quoted, listed or dealt in on a recognised market, or in respect of which a listed, traded or Manager. The Investment Manager is also responsible for ensuring that the Fund is managed within the dealt price or quotation is not available at the time of valuation, the fair value of such investment shall terms of its investment guidelines and limits set out in the Scheme Particulars. The Manager reserves be estimated with care and in good faith by a competent professional person, body, firm or corporation to itself the investment performance, product risk monitoring and oversight and the responsibility for the including the Manager’s pricing committee, and such fair value shall be determined on the basis of the monitoring and oversight of regulatory and operational risk for the Fund. probable realisation value of the investment. The Manager shall be entitled to adopt an alternative method of valuing any particular asset or liability if it considers that the methods of valuation set out above do not provide a fair valuation of a particular asset or liability. For derivatives (e.g. futures), market value is determined based on valuation pricing models which take into account relevant market inputs as well as the time values, liquidity and volatility factors underlying the positions. Amounts due to and from an individual counterparty which fall under a legally enforceable master netting agreement are netted.

37 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 38 Notes to Financial Statements continued

The Manager has assigned a risk manager who has responsibility for the daily risk management process ii) Market risk arising from other price risk with assistance from key risk management personnel of the Investment Manager, including members of Exposure to other price risk the BlackRock Risk and Quantitative Analysis Group (“RQA Group”) which is a centralised group which Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate performs an independent risk management function. The RQA Group independently identifies, measures because of changes in market prices (other than those arising from interest rate risk or currency risk), and monitors investment risk. The RQA Group tracks the actual risk management practices being whether those changes are caused by factors specific to the individual financial instrument or its issuer, or deployed across the different funds. By breaking down the components of the process, the RQA Group factors affecting similar financial instruments traded in the market. has the ability to determine if the appropriate risk management processes are in place for the Fund. This captures the risk management tools employed, how the levels of risk are controlled, ensuring risk/return is The Fund is exposed to other price risk arising from its investments. The exposure of the Fund to other considered in portfolio construction and reviewing outcomes. price risk is the market value of the investments held as shown in the portfolio statement of the Fund.

The principal risk exposure of the Fund is set out as follows: Management of other price risk The Investment Manager manages the Fund’s other price risk on a daily basis in accordance with the a) Market risk Fund’s investment objective. Market risk arises mainly from uncertainty about future values of financial instruments influenced by other By diversifying the portfolio, where this is appropriate and consistent with the Fund’s objectives, the risk price, currency and interest rate movements. It represents the potential loss the Fund may suffer through that a price change of a particular investment will have a material impact on the Net Asset Value (“NAV”) holding market positions in the face of market movements. The Fund is exposed to market risk by virtue of of the Fund is minimised. The investment concentrations within the portfolio are disclosed in the portfolio its investments in equities, investment funds, forward currency contracts and futures contracts. statement by investment type. A key metric the RQA Group use to measure market risk is Value-at-Risk (“VaR”) which encompasses The other price risk inherent in holdings in CIS is monitored by the Investment Manager by understanding price, currency and interest rate risk. VaR is a statistical risk measure that estimates the potential portfolio the investment objectives of the underlying funds as well as their internal control policies and regular risk loss from adverse market movements in an ordinary market environment. VaR analysis reflects the and performance reporting. interdependencies between risk variables, unlike a traditional sensitivity analysis.

The VaR calculations are based on an adjusted historical simulation model with a confidence level of 99%, iii) Market risk arising from interest rate risk a holding period of one day and a historical observation period of not less than one year (250 days). A Exposure to interest rate risk VaR number is defined at a specified probability and a specified time horizon. A 99% one day VaR means Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate that the expectation is that 99% of the time over a one day period the Fund will lose less than this number because of changes in market interest rates. in percentage terms. Therefore, higher VaR numbers indicate higher risk. The Fund is exposed to interest rate risk on its cash and bank balances held at The Bank of New York It is noted that the use of the VaR methodology has limitations, namely that the use of historical market Mellon (International) Limited. Cash held on deposit at The Bank of New York Mellon (International) data as a basis for estimating future events does not encompass all possible scenarios, particularly those Limited receives/incurs interest at the prevailing daily rate which may be negative depending on the that are of an extreme nature and that the use of a specified confidence level (e.g. 99%) does not take currency in which the cash is held. into account losses that occur beyond this level. There is some probability that the loss could be greater than the VaR amounts. These limitations and the nature of the VaR measure mean that the Fund can The Fund also has indirect exposure to interest rate risk through its investments into CIS, whereby the neither guarantee that losses will not exceed the VaR amounts indicated, nor that losses in excess of the value of the underlying asset may fluctuate as a result of a change in interest rates and through its VaR amounts will not occur more frequently. investment in futures contracts, whereby the value of an underlying fund may fluctuate as a result of a change in interest rates through their investments in interest-bearing securities. The one day VaR as at 5 April 2018 and 5 April 2017 based on a 99% confidence level was 1.45% and 1.50% respectively. At 5 April 2018, and 5 April 2017, no interest bearing investments were held by the Fund, hence no interest rate risk exposure table has been presented. i) Market risk arising from foreign currency risk Management of interest rate risk Exposure to foreign currency risk Interest rate risk exposure is managed by constantly monitoring the position for deviations outside a pre- Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will determined tolerance level and, when necessary, rebalancing back to the original desired parameters. fluctuate because of changes in foreign exchange rates.

Management of foreign currency risk The net assets of the Fund are denominated mainly in Sterling, therefore the Balance Sheet and Statement of Total Return are unlikely to be directly affected by currency movements.

39 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 40 Notes to Financial Statements continued b) Counterparty credit risk ii) Over-the-Counter (“OTC”) Financial Derivative Instruments (“FDIs”) Exposure to counterparty credit risk The Fund’s holdings in forward currency contracts also expose the Fund to counterparty credit risk. Counterparty credit risk is the risk that one party to a financial instrument will cause a financial loss for the The Fund’s maximum exposure to counterparty credit risk from holding forward currency contracts will be other party by failing to discharge an obligation. equal to the notional amount of the currency and any net unrealised gains or losses as disclosed in the The Fund is exposed to counterparty credit risk from the parties with which it trades and will bear the risk portfolio statement. of settlement default. The carrying value of financial assets together with cash best represents the Fund’s gross maximum Management of counterparty credit risk exposure to counterparty credit risk at the reporting date, before including the effect of ISDA Master Counterparty credit risk is monitored and managed by BlackRock’s RQA Counterparty & Concentration Agreements and close-out netting, which would reduce the overall counterparty credit risk exposure. Risk Team. The team is headed by BlackRock’s Chief Counterparty Credit Officer who reports directly to Cash held as security by the counterparty to derivative contracts is subject to the credit risk of the the Global Head of RQA. Credit authority resides with the Chief Counterparty Credit Officer and selected counterparty. team members to whom specific credit authority has been delegated. As such, counterparty approvals may be granted by the Chief Counterparty Credit Officer or by identified RQA Credit Risk Officers who Management of counterparty credit risk related to OTC FDIs have been formally delegated authority by the Chief Counterparty Credit Officer as deemed appropriate. Forward currency contracts do not require variation margin and thus the counterparty credit risk is monitored through the BlackRock RQA Counterparty & Concentration Risk Team which monitors the BlackRock’s RQA Counterparty & Concentration Risk Team completes a formal review of each new creditworthiness of the counterparty. counterparty, monitors and reviews all approved counterparties on an ongoing basis and maintains an active oversight of counterparty exposures. The lowest credit rating of any one counterparty is A+ (5 April 2017: A) (Standard & Poor’s rating).

The Manager maintains a list of approved counterparties. This list is regularly monitored and revised for The following tables detail the number of counterparties the Fund is exposed to and the maximum changes based on the counterparty’s creditworthiness, market reputation and expectations of future exposure (which is calculated on a net basis) to any one counterparty. financial performance. Transactions will only be opened with financial intermediaries on the approved 5 April 2018 counterparties list. Total i) Exchange Traded Financial Derivative Instruments Forwards Exposure The Fund’s holdings in futures contracts expose the Fund to counterparty credit risk. Counterparty £000’s £000’s

^ ^ Management of counterparty credit risk related to futures contracts Morgan Stanley & Co. International Plc – – The exposure is limited by trading the contracts through a clearing house. The Fund’s exposure to counterparty credit risk on contracts in which it currently has a gain position is reduced by such gains 5 April 2017 received in cash from the counterparty under the daily mark-to market mechanism on exchange traded futures contracts (variation margin). The Fund’s exposure to credit risk on contracts in which it currently Total Forwards Exposure has a loss position is equal to the amount of margin posted to the counterparty which has not been Counterparty £000’s £000’s transferred to the exchange under the daily mark-to-market mechanism. The counterparty for futures ^ ^ contracts is Barclays. UBS AG – – ^ Amounts less than £500 are rounded to zero. Margin is paid or received on futures to cover any exposure by the counterparty or the Fund to each other. Margin receivable from the Fund’s clearing brokers and various counterparties is included in “Cash and bank balances” on the Balance Sheet. Margin payable to the Fund’s clearing brokers and various counterparties is included in “Amounts held at futures clearing houses and brokers” on the Balance Sheet.

41 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 42 Notes to Financial Statements continued iii) Trustee and Custodian iv) Counterparties The Fund’s Trustee is BNY Mellon Trust & Depositary (UK) Limited (the “Trustee”). The Trustee has All transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk of delegated the function of custodian of the property of the Fund to The Bank of New York Mellon default is considered minimal, as delivery of securities sold is only made once the broker has received (International) Limited (the “Custodian”). payment. Payment is made on a purchase once the securities have been received by the broker. The trade will fail if either party fails to meet its obligation. The Trustee is liable to the Fund for the loss of financial instruments of the Fund which are held in custody as part of the Trustee’s safekeeping function. The liability of the Trustee will not be affected Counterparty credit risk arising on transactions with brokers relates to transactions awaiting settlement. by the fact that it has entrusted the safekeeping function to the Custodian save where this liability is Risk relating to unsettled transactions is considered small due to the short settlement period involved and lawfully discharged to a delegate (any such discharge will be notified to unitholders) or where the loss the high credit quality of the brokers used. of financial instruments arises as a result of an external event beyond reasonable control as provided for Management of counterparty credit risk related to counterparties under AIFMD. The Trustee will not be indemnified out of the assets of the Fund for the loss of financial instruments where it is so liable. Substantially all of the investments other than FDIs of the Fund are held The Manager monitors the credit rating and financial position of the brokers used to further mitigate by the Custodian at year end. this risk.

Investments are segregated from the assets of the Custodian, with ownership rights remaining with c) Liquidity risk the Fund. Bankruptcy or insolvency of the Custodian may cause the Fund’s rights with respect to its Exposure to liquidity risk investments held by the Custodian to be delayed or limited. The maximum exposure to this risk is the Liquidity risk is the risk that the Fund will encounter difficulties in meeting its obligations associated with total amount of equity and bond investments disclosed in the portfolio statement. financial liabilities.

The Fund will be exposed to the credit risk of the Custodian, or any depositary used by the Trustee Liquidity risk to the Fund arises from the redemption requests of unitholders and the liquidity of the regarding cash balances held in accounts with same. In the event of insolvency or bankruptcy of the underlying investments the Fund is invested in. The Fund’s unitholders may redeem their units on the Custodian or any depositary used by the Trustee, the Fund will be treated as a general creditor of the close of any daily dealing deadline for cash equal to a proportionate share of the Fund’s NAV. The Fund is Trustee. therefore potentially exposed to the liquidity risk of meeting the unitholders’ redemptions and may need to Management of counterparty credit risk related to the Trustee and Custodian sell assets at prevailing market prices to meet liquidity demands. To mitigate the Fund’s credit risk with respect to the Trustee, the Investment Manager of the Fund employs The Fund is also exposed to the liquidity risk of daily margin calls on derivatives. specific procedures to ensure that the Trustee employed is a reputable institution and that the associated All non-derivative financial liabilities including distributions payable held by the Fund as at 5 April 2018 credit risk is acceptable to the Fund. The Fund only transacts with counterparties that are regulated and 5 April 2017, based on contractual maturities, fall due within one to three months. entities subject to prudential supervision, or with high credit-ratings assigned by international credit-rating agencies. Management of liquidity risk The long term credit rating of the parent company of the Trustee and Custodian, The Bank of New York Liquidity risk is minimised by holding sufficient liquid investments which can be readily realised to meet Mellon Corporation, as at 5 April 2018 was A (5 April 2017: A) (Standard & Poor’s rating). liquidity demands. This will therefore allow the Manager to protect the interests of continuing unitholders by allowing the Manager to match the sale of scheme property to the level of redemptions. This should reduce the impact of dilution on the Fund. All unitholders who have sought to redeem units at any valuation point at which redemptions are deferred will be treated consistently and any redemption requests received in the meantime will not be processed until the redemption requests that have been deferred to the subsequent valuation points have been processed.

The Fund’s liquidity risk is managed on a daily basis by the Investment Manager in accordance with established policies and procedures in place. The portfolio managers review daily forward looking cash reports which project cash obligations. These reports allow them to manage the Fund’s cash obligations.

43 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 44 Notes to Financial Statements continued d) Valuation of financial instruments The table below is an analysis of the Fund’s investment assets and investment liabilities measured at fair The Fund classifies financial instruments measured at fair value using a fair value hierarchy. The fair value value at the Balance Sheet date. hierarchy has the following categories: Level 1 Level 2 Level 3 Total Level 1 – Quoted prices for identical instruments in active markets £000’s £000’s £000’s £000’s A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available and those prices represent actual and regularly occurring market transactions on an arm’s 5 April 2018 length basis. The Fund does not adjust the quoted price for these instruments. Investment assets 396,225 – –* 396,225

Level 2 – Valuation techniques using observable inputs Investment liabilities – – – – This category includes instruments valued using quoted prices in active markets for similar instruments; 5 April 2017 quoted prices for similar instruments in markets that are considered less than active; or other valuation Investment assets 482,219 – – 482,219 techniques where all significant inputs are directly or indirectly observable from market data. Investment liabilities (8) – – (8) Valuation techniques used for non-standardised financial instruments such as OTC derivatives, include the use of comparable recent arm’s length transactions, reference to other instruments that are substantially * Includes delisted investments fair valued at zero. These securities are identified on the portfolio statement. the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants making the maximum use of market inputs and relying as little as possible on Securities with a value less than £500 are not disclosed in the table above. These securities are identified entity determined inputs. on the portfolio statement.

Level 3 – Valuation techniques using significant unobservable inputs e) Leverage This category includes all instruments where the valuation techniques used include inputs not based on The Fund may employ leverage and borrow cash in accordance with their stated investment policy or market data and these inputs could have a significant impact on the instrument’s valuation. investment strategy. The Fund may employ leverage in their investment programmes through various means including the use of FDIs. This category also includes instruments that are valued based on quoted prices for similar instruments where significant entity determined adjustments or assumptions are required to reflect differences The use of borrowings and leverage has associated risks and can, in certain circumstances, substantially between the instruments and instruments for which there is no active market. increase the adverse impact to which the Fund’s investment portfolio may be subject.

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety For the purposes of this disclosure, leverage is any method by which the Fund’s exposure is increased, is determined on the basis of the lowest level input that is significant to the fair value measurement in its whether through borrowing of cash or securities, or leverage embedded in derivative positions, or by any entirety. For this purpose, the significance of an input is assessed against the fair value measurement in other means. The AIFMD requires that each leverage ratio be expressed as the ratio between a Fund’s its entirety. If a fair value measurement uses observable inputs that require significant adjustment based exposure and its NAV and prescribes two required methodologies, the gross methodology and the on unobservable inputs, that measurement is a level 3 measurement. commitment methodology, for calculating such exposure using the methodologies prescribed under the AIFMD, the leverage of the Fund are disclosed in the table below. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability. The determination of what constitutes ‘observable’ inputs requires significant judgement by the Investment Manager. The Investment Manager Gross exposure Commitment exposure considers observable inputs to be that market data that is readily available, regularly distributed or Leverage as Leverage as Leverage as Leverage as updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively Maximum limit at 5.4.2018 at 5.4.2017 Maximum limit at 5.4.2018 at 5.4.2017 involved in the relevant market. 1.1:1 1.0:1 1.0:1 1.1:1 1.0:1 1.0:1

The maximum level of leverage which the Fund, or the Manager on the Fund’s behalf, is permitted to use as part of the Fund’s investment strategies is set out in the Scheme Particulars and in the above table.

45 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 46 Notes to Financial Statements continued

3. Net Capital (Losses)/Gains 5. Expenses

For the year For the year For the year For the year to 5.4.2018 to 5.4.2017 to 5.4.2018 to 5.4.2017 £000’s £000’s £000’s £000’s The net capital (losses)/gains comprise: Payable to the Manager or associates of the Manager: (Losses)/gains on non-derivative securities (2,025) 88,112 – Manager’s charge 254 315 Gains on derivative securities 171 929 254 315 Currency gains 14 32 Other expenses: Manager’s charge rebates 4 3 – Audit fee 4 4 Net capital (losses)/gains (1,836) 89,076 – Trustee’s fees 45 50

Net losses (excluding Manager’s charge rebates) listed above of £(1,840,000) comprise net realised gains of £33,132,000 and net unrealised losses of £(34,972,000) 49 54 (5 April 2017: £89,073,000 comprising of net realised gains of £36,311,000 and net unrealised gains of £52,762,000. Certain realised gains and losses in the current year were unrealised in the prior year. Total expenses 303 369

4. Revenue 6. Interest Payable and Similar Charges For the year For the year For the year For the year to 5.4.2018 to 5.4.2017 to 5.4.2018 to 5.4.2017 £000’s £000’s £000’s £000’s Interest on bank overdrafts – 1 Equity distributions on CIS holdings 13 – Total interest payable and similar charges – 1 Interest distributions on CIS holdings 3 – Interest from UK bank deposits 3 3 7. Taxation Manager's charge rebates 1 1 Analysis of tax charge Overseas dividends 1,518 903 Overseas REIT dividends – 11 For the year For the year to 5.4.2018 to 5.4.2017 Stock dividends 984 1,738 £000’s £000’s UK dividends 15,271 17,014 Overseas tax 23 21 UK REIT dividends 321 258 Total tax charge 23 21 Total revenue 18,114 19,928

47 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 48 Notes to Financial Statements continued

8. Distributions 11. Other Creditors

For the year For the year 5.4.2018 5.4.2017 to 5.4.2018 to 5.4.2017 £000’s £000’s £000’s £000’s Accrued Audit fee 4 4 First distribution 5,778 6,207 Accrued Manager’s charge 41 73 Second distribution 5,091 4,878 Accrued Trustee’s fee 8 8 Third distribution 2,599 3,064 Total other creditors 53 85 Final distribution 4,157 4,653 17,625 18,802 12. Contingent Assets and Liabilities Amounts deducted on cancellation of units 267 837 There were no contingent assets or liabilities at the Balance Sheet date (5 April 2017: Nil). Amounts receivable on issue of units (104) (105) Distributions 17,788 19,534 13. Efficient Portfolio Management Techniques The Fund may engage in derivative transactions for the purposes of efficient portfolio management.

The distributable amount has been calculated as follows: There were no securities on loan or related collateral outstanding at the Balance Sheet date (5 April 2017: Net revenue after taxation 17,788 19,537 £Nil). Less: Equalisation on conversions – (3) 14. Related Parties Distributions 17,788 19,534 Parties are considered to be related if one party has the ability to control the other party or exercise Details of the all distributions per unit are set out in the tables on page 10. significant influence over the other party in making financial or operational decisions.

The following entities were related parties of the Fund during the year ended 5 April 2018: 9. Debtors Manager/Registrar: BlackRock Fund Managers Limited 5.4.2018 5.4.2017 Investment Manager: BlackRock Advisors (UK) Limited £000’s £000’s Accrued Manager’s charge rebates 1 1 The ultimate holding company of the Manager, Registrar and Investment Manager is BlackRock. PNC Financial Services Group Inc. (“PNC”) is a substantial shareholder in BlackRock Inc. PNC did not provide Accrued revenue 2,440 2,466 any services to the Fund during the years ended 5 April 2018 and 5 April 2017. Overseas tax recoverable 178 318 Sales awaiting settlement 70 – The Manager acts as either principal or agent for the Trustee in respect of all transactions of units of the Fund. The aggregate monies received through creation and paid through cancellation of units are Total debtors 2,689 2,785 disclosed in the Statement of Change in Net Assets Attributable to Unitholders and note 8. Any amounts due to or from the Manager at the year end are disclosed in notes 9 and 11. Management fees paid to 10. Cash and Bank Balances the Manager are shown in note 5. The balances due at the year end in respect of these fees are shown in Note 11. Management fee rebates received from BlackRock Fund Managers Limited are shown in notes 3 5.4.2018 5.4.2017 and 4 with the balances due at year end in respect of these rebates shown in note 9. £000’s £000’s Amounts held at futures clearing houses and brokers 340 232 Cash and bank balances 2,806 1,332 Total cash and bank balances 3,146 1,564

49 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 50 Notes to Financial Statements continued

14. Related Parties continued 15. Portfolio Transaction Costs The Investment Manager, in accordance with the Scheme Particulars, may enter into commission sharing For the year ended 5 April 2018 arrangements with related parties (including, without limitation, brokers who are affiliated to the BlackRock Group), which may result in the Fund benefiting from research or execution services which the Investment Direct Transaction Costs Manager believes are useful in the investment decision-making or trade execution process. Such research Transaction Value Commissions Taxes or execution services may include, without limitation and to the extent permitted by applicable law: Purchases (excluding derivatives) £000’s £000’s % £000’s % research reports on companies, industries and securities; and the provision of economic and financial Equity instruments 30,320 5 0.02 4 0.01 information and analysis. Due to the bundled nature of these services and the application of such benefits Collective investment schemes 3,118 1 0.02 – – across a number of BlackRock managed funds, it is not feasible to quantify the benefit to the Fund. The Total purchases 33,438 6 4 Investment Manager may also enter into these arrangements with brokers who are not affiliated to the BlackRock Group. Total purchases including transaction costs 33,448 The Fund may invest in other CIS, which may or may not be operated and/or managed by an affiliate of the Manager. As an investor in such other CIS, in addition to the fees, costs and expenses payable by a unitholder in the Funds, each unitholder may also indirectly bear a portion of the fees, costs and Direct Transaction Costs

expenses of the underlying CIS, including management, investment management and administration and Transaction Value Commissions Taxes other expenses. However, in respect of investments made in any other investment fund whose manager Sales (excluding derivatives) £000’s £000’s % £000’s % is an affiliate of the Manager, the Fund will invest, where possible, in classes of the underlying funds Equity instruments 110,778 20 0.02 1 0.00 which are not subject to any management charges. Alternatively, where this is not possible, the Manager Collective investment schemes 6,199 3 0.05 – – will rebate management charges to the Fund. The Fund will not be subject to any preliminary/initial sales fee in respect of investments made in any other investment fund whose manager is an affiliate of the Total sales 116,977 23 1 Manager, although it may be subject to duties and charges in respect of subscriptions and redemptions Total sales net of transaction in such investment funds. costs 116,953

As at 5 April 2018 and 5 April 2017, none of the unitholders: Derivative transaction costs 2 –

(i) are funds managed by the BlackRock Group or are affiliates of BlackRock Inc. or Total transaction costs 31 5

(ii) are investors, other than those included in (i) above, who held 51% or more of the voting units in issue Total transaction costs in the Fund and are as a result, considered to be related parties to the Funds. as a % of average net assets 0.01% 0.00%

51 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 52 Notes to Financial Statements continued

15. Portfolio Transaction Costs continued 15. Portfolio Transaction Costs continued For the year ended 5 April 2017 During the year the Fund utilised derivative instruments including futures covering different underlying asset classes. The settlement values for opening and closing derivative positions are not comparable to Direct Transaction Costs principal values for transactions in direct holding investments and therefore purchase and sale amounts Transaction Value Commissions Taxes for derivative transactions are not quantified in the analysis above. Transaction costs for derivatives Purchases (excluding derivatives) £000’s £000’s % £000’s % positions will be either suffered as direct costs or form part of the dealing spread for the instruments. Any Equity instruments 27,216 5 0.02 24 0.09 direct costs are identified in the analysis above.

Collective investment schemes 789 – – – – Dealing spread costs suffered by the Fund vary considerably for the different asset/instrument types Corporate actions 690 – – – – depending on a number of factors including transaction value and market sentiment.

Total purchases 28,695 5 24 At the Balance Sheet date the average portfolio dealing spread (difference between bid and offer prices Total purchases including of all investments expressed as a percentage of the offer price value) was 0.10% (5 April 2017: 0.08%). transaction costs 28,724 16. Units in Issue The movement in units in issue for the year ended 5 April 2018 is as follows: Direct Transaction Costs

Transaction Value Commissions Taxes A Income A Accumulation X Income X Accumulation Sales (excluding derivatives) £000’s £000’s % £000’s % Units Units Units Units Equity instruments 127,622 17 0.01 1 0.00 Balance at the beginning of the year 15,056,918 2,947,469 140,664,940 41,770,908 Collective investment schemes 4,676 2 0.04 – – Issued during the year 310,365 – 22,959,416 723,037 Total sales 132,298 19 1 Cancelled during the year (1,904,451) (1,376,026) (42,530,493) (7,243,070)

Total sales net of transaction Balance at the end of the year 13,462,832 1,571,443 121,093,863 35,250,875 costs 132,278 Revenue is allocated each day pro rata to the capital value of assets attributable to each class and Derivative transaction costs 2 – taxation is computed by reference to the net revenue after expenses attributable to each class. The Total transaction costs 26 25 distribution per unit class is given in the distribution table. All unit classes have the same rights on winding up. Total transaction costs as a % of average net assets 0.01% 0.00% 17. Post Balance Sheet Events There have been no significant events subsequent to the year end, which, in the opinion of the Manager, The above analysis covers any direct transaction costs suffered by the Fund during the year. However it is may have had an impact on the financial statements for the year ended 5 April 2018. important to understand the nature of other transaction costs associated with different investment asset classes and instruments types.

Separately identifiable direct transaction costs (commissions & taxes etc) are attributable to the Fund’s purchase and sale of equity shares. Additionally for equity shares there is a dealing spread cost (the difference between the buying and selling prices) which will be suffered on purchase and sale transactions.

For the Fund’s investment in collective investment scheme holdings there will potentially be dealing spread costs applicable to purchases and sales. However additionally there are indirect transaction costs suffered in those underlying funds, throughout the holding period for the instruments, which are not separately identifiable and do not form part of the analysis above.

53 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 54 Statement of Manager’s and Trustee’s Responsibilities

The Manager is responsible for keeping such accounting records as are necessary to enable it to prepare Under the Regulations, the Trustee has a duty to enquire into the conduct of the Manager in the management the financial statements for the Fund for each financial year. These financial statements must be prepared of the Fund in each accounting year and to report thereon to unitholders. A copy of the Trustee’s report is set in accordance with generally accepted accounting principles to give a true and fair view of the state of out below. affairs of the Fund at the year end and of the revenue for the year. The financial statements must comply with the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008 (“the Regulations”), The Fund requires that annual reports, including audited financial statements, are sent to the Charity the Scheme and, where relevant, should comply with the disclosure requirements of the current Statement Commission and to all participants in the Fund. of Recommended Practice for Authorised Funds issued by the Investment Management Association (subsequently The Investment Association). Report of the Trustee The Manager’s duties and powers also include: instructing the Trustee on the cancellation of units; carrying out regular valuations of the Fund’s property and ensuring that units issued by the Fund are correctly priced; maintaining daily records of units purchased by the Manager or sold on behalf of the Trustee; and appointing To the Unitholders of the ChariTrak Common Investment Fund the auditor of the Fund. The Manager is responsible for managing the investments of the Fund. The Manager has delegated certain functions with respect to the portfolio management of the assets of the Fund, the We confirm that in the Trustee’s opinion, the Manager has managed the Fund in all material respects in performance of certain risk management functions and the distribution of units to the Investment Manager, accordance with the limitations imposed on the investment and borrowing powers of the Manager and Trustee BlackRock Advisors (UK) Limited. In addition, the Manager is required to make available all of the Manager’s by the Scheme and by the Scheme Particulars, and otherwise in accordance with the provisions of the records relating to the Fund for inspection by the Trustee. Scheme and the Scheme Particulars.

Under the Scheme, the Trustee is responsible amongst other things for the custody and control of the property of the Fund, the collection of all income due to the Fund, and the claiming of any repayment of tax which may be due. The Trustee may create and cancel units in accordance with the instructions of the Manager (except where not permitted to by the Scheme Particulars). The Trustee will make distributions and allocations of income to unitholders as applicable. BNY Mellon Trust & Depositary London The Trustee acts as the depositary of the Fund and, in doing so, shall comply with the terms of the Scheme (UK) Limited 17 May 2018 and the provisions of the AIFMD.

The Trustee has delegated certain safekeeping functions to The Bank of New York Mellon (International) Limited.

The Trustee also has the duty of supervision and oversight of the Manager’s compliance with the Scheme and the Scheme Particulars. In particular, the Trustee must be satisfied that the Manager is not exceeding his powers and that the Manager is maintaining adequate and proper records.

The Trustee is required to take all steps and execute all documents which are necessary to secure that purchases and sales of investments of the Fund are properly completed, and is required to exercise voting rights attaching to such investments as properly instructed by the Manager.

The Trustee is responsible for the appointment of the Registrar and for the supervision and oversight of the Registrar. The Trustee is responsible for supervision and oversight of any delegate which it appoints. The Trustee is responsible for the appointment and dismissal of persons engaged by the Trustee in connection with the Fund, for the making of an Annual Report on the discharge of its responsibilities for the management of the Fund. The Trustee is responsible for the winding up of the Fund.

55 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 56 Independent Auditor’s Report to the charity trustees of ChariTrak Common Investment Fund Conclusions relating to going concern We have audited the financial statements of ChariTrak Common Investment Fund (“the Fund”) We have nothing to report in respect of the following matters in relation to which the ISAs (UK) for the year ended 5 April 2018 which comprise the Statement of Total Return, the Statement require us to report to you where: of Change in Net Assets attributable to unitholders, Balance Sheet, Distribution Tables and the related notes 1 to 17, including a summary of significant accounting policies. The financial • the manager’s use of the going concern basis of accounting in the preparation of the reporting framework that has been applied in their preparation is applicable law and United financial statements is not appropriate; or Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) • the manager has not disclosed in the financial statements any identified material including FRS 102 “The Financial Reporting standard applicable in the UK and Republic of uncertainties that may cast significant doubt about the Fund’s ability to continue to adopt the Ireland”. going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. In our opinion the financial statements:

Other information • give a true and fair view of the state of the financial position of the Fund as at 5 April 2018 and of the net revenue and the net losses on the scheme property of the Fund for the year The other information comprises the information included in the annual report, other than the then ended; financial statements and our auditor’s report thereon. The manager is responsible for the other information. • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and Our opinion on the financial statements does not cover the other information and we do not • have been prepared in accordance with the requirements of the Charities Act 2011. express any form of assurance conclusion thereon.

Basis for opinion In connection with our audit of the financial statements, our responsibility is to read the other We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs information and, in doing so, consider whether the other information is materially inconsistent (UK)) and applicable law. Our responsibilities under those standards are further described in with the financial statements or our knowledge obtained in the audit or otherwise appears the Auditor’s responsibilities for the audit of the financial statements section of our report below. to be materially misstated. If we identify such material inconsistencies or apparent material We are independent of the Fund in accordance with the ethical requirements that are relevant misstatements, we are required to determine whether there is a material misstatement in the to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we financial statements or a material misstatement of the other information. If, based on the work have fulfilled our other ethical responsibilities in accordance with these requirements. |we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We have nothing to report in this regard.

Use of our report Matters on which we are required to report by exception This report is made solely to the charity’s Trustees, as a body, in accordance with Part 4 of the We have nothing to report in respect of the following matters where the Charities (Accounts and Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so Reports) Regulations 2008 require us to report to you if, in our opinion: that we might state to the Fund’s charity trustees those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not • the information given in the Annual Report is inconsistent in any material respect with the accept or assume responsibility to anyone other than the Fund and the charity’s trustees as a financial statements; or body, for our audit work, for this report, or for the opinions we have formed. • sufficient accounting records have not been kept; or • the financial statements are not in agreement with the accounting records and returns; or • we have not received all the information and explanations we require for our audit.

57 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 58 About us

BlackRock is a premier provider of asset management, risk management, and advisory services to institutional, intermediary, and individual clients worldwide. As of 31 March 2018, the fi rm manages Responsibilities of Manager £4.50 trillion across asset classes in separate accounts, mutual funds, other pooled investment vehicles, As explained more fully in the manager’s responsibilities statement set out on page 55 and and the industry-leading iShares® exchange-traded funds. 56, the manager is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the manager Through BlackRock Solutions®, the fi rm offers risk management and advisory services that combine capital determine is necessary to enable the preparation of financial statements that are free from markets expertise with proprietarily-developed analytics, systems, and technology. Through BlackRock material misstatement, whether due to fraud or error. Solutions, the Firm provides risk management and enterprise investment services for over 200 clients.

In preparing the financial statements, the manager is responsible for assessing the Fund’s ability BlackRock serves clients in North and South America, Europe, Asia, Australia, Africa, and the Middle East. to continue as a going concern, disclosing, as applicable, matters related to going concern and Headquartered in New York, the fi rm maintains offi ces in over 30 countries around the world. using the going concern basis of accounting unless management either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Ernst & Young LLP London Statutory Auditor 17 May 2018 Want to know more?

Ernst & Young LLP is eligible to act as an auditor in terms of section 1212 of the Companies blackrock.co.uk [email protected] 0800 44 55 22 Act 2006.

59 ChariTrak Common Investment Fund