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Annual Manager's Report and Financial

Distribution Number 18

CAF UK Equitrack Fund Registered Charity Number: 1108291 Annual Manager’s Report and Financial Statements for the year ended 30 April 2014

In association with

Contents

Page Number

Statement on the Constitution and Governance of the Fund Common Investment Funds 2 Investment Responsibilities of the Charity Trustees 2 Corporate Trustee and Custodian 2 Advisory Board 3 Advisory Board Report 4 Corporate Governance 5 Manager’s Statement on Governance 6 Scope of Responsibility 6 System of Internal Controls 6 Risk Framework 6 Corporate Governance 7 Review of Effectiveness 8 Statement of the Manager’s Responsibilities 9 Manager’s Investment Report 10 Corporate Trustees’ Report 14 Portfolio Statement 17 Independent Auditor’s Report 34 Statement of Total Return 36 Statement of Change in Net Assets attributable to Unitholders 36 Balance Sheet 37 Notes to the Financial Statements 38 Distribution Tables 46 Fund Facts 47 Performance Record 48 Constitution and General Information 49

1 Statement on the Constitution and Governance of the Fund

The name of this Fund is the Charities Aid Foundation UK Equitrack Fund, known as the CAF UK Equitrack Fund. Common Investment Funds The Charities Aid Foundation (CAF) UK Equitrack Fund (the ‘Fund’) is a Common Investment Fund (CIF) established by the Charity Commission for and Wales (‘the Commission’), under section 24 of the Charities Act 1993. The Fund is administered for the benefit of the participating charities under a Scheme of the Commission dated January 2005. Any charity, or organisation, regarded as charitable in UK Law, and based in England, Scotland or Wales, can invest in the CAF UK Equitrack Fund. Investment Responsibilities of the Charity Trustees The Charity Commissioner requires the Charity Trustees to invest their assets only in investments authorised under the governing document of their charity or the Trustee Act 2000 if applicable. Trustees are also required to avoid speculation and to invest prudently in order to achieve both income and/or capital growth. Furthermore, Trustees of charities are required to seek professional advice regarding their investments. Corporate Trustee and Custodian The Corporate Trustee of the Fund is National Westminster Bank Plc (‘the Corporate Trustee’). The Corporate Trustee has delegated the function of custodian of the property of the Fund to Northern Trust Global Services Limited (‘the Custodian’). The Custodian is independent from the Manager and Corporate Trustee.

2 Statement on the Constitution and Governance of the Fund continued

Advisory Board The purpose of the Advisory Board (‘the Board’) is to oversee the administration and management of the Fund. The Board establishes the investment policy, determines the criteria and methods for evaluating the Fund’s performance and appoints the auditor. In addition, the Board determines the remuneration of both the Corporate Trustee and the Manager of the Fund. The Board issues an annual report on the discharge of its responsibilities. The Board may apply to the Charity Commission for an order to discharge the Corporate Trustee or Manager of the Fund and to appoint a new Corporate Trustee or new Manager of the Fund. The Board meets not less than twice a year. Matters are decided by a majority vote of Board members present and voting. In the event that no decision is reached with a simple majority, the Chairman has the casting vote, whether or not he has previously voted. The Board members comprise the members of the CAF Funds Monitoring Committee (CFMC) which is established to oversee the performance of the fund range offered by CAF Financial Solutions Ltd. The Chairman of the Committee is the Chairman of the CFMC.

3 Statement on the Constitution and Governance of the Fund continued

Advisory Board Report The Advisory Board (‘the Board’) of the CAF UK Equitrack Fund submits its report on the discharge of its responsibilities for the year ended 30 April 2014. During the year, the Board: • Met on four occasions; • Reviewed the investment policy; • Reviewed the criteria and methods for evaluating the performance of the Fund; • Re-appointed the auditor and determined the terms of engagement; • Confirmed the remuneration of the Manager of the Fund; No changes to the criteria and methods for evaluating the performance of the Fund and its investment policy have been implemented. No member of the Board has offered investment advice or conducted investment business in relation to the Fund.

For and on behalf of the Advisory Board of CAF UK Equitrack Fund 24 June 2014

4 Statement on the Constitution and Governance of the Fund continued

Corporate Governance Legal & General (Unit Trust Managers) Limited were appointed Managers of the Fund in accordance with the Scheme constitution. The Manager is authorised and regulated by the Financial Conduct Authority (the ‘FCA’) for the conduct of regulated activities, including the establishment, operation and winding up of unregulated Collective Investment Schemes. The Manager will provide management and administration services on behalf of the Fund. The Manager has delegated the investment management of the assets of the Fund to Legal & General Investment Management Limited (LGIM). The Corporate Trustee has appointed the Manager as Registrar, who, in turn, has delegated responsibility to Legal & General (Portfolio Management Services) Limited. The Investment Manager and Registrar are authorised and regulated by the Financial Conduct Authority and are members of the same group of companies as the Manager. The Manager has delegated the administration of the Fund to Northern Trust Global Services Limited, a subsidiary of Northern Trust Holdings Limited.

5 Statement on the Constitution and Governance of the Fund continued

Manager’s Statement On Governance Scope of Responsibility Legal & General (Unit Trust Managers) Limited (UTM) have responsibility for maintaining a sound system of internal controls that support the achievement of the CAF UK Equitrack Fund policies, aims and objectives, whilst safeguarding the assets of unitholders. System of Internal Controls The system of internal controls is designed to manage risk to a reasonable level rather than eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable, not absolute assurance of effectiveness. The system of internal controls is based on an ongoing process designed to identify and prioritise the risks to the achievement of policies, aims and objectives, to evaluate the likelihood of those risks being realised, the impact should they be realised and to manage them efficiently, effectively and compliantly. Risk Framework Legal & General (Unit Trust Managers) Limited (UTM) is part of Legal & General Investment Management Limited (LGIM), a subsidiary firm of the Legal & General Group (L&G) and operates within a group- wide risk management framework. The risk framework seeks to ensure all risks are identified and that appropriate strategies are in place for their management. The framework consists of formal committees, risk management policies, risk assessment and reporting processes and oversight functions. These enable the directors and senior management to debate key risks and draw assurance that risks are being appropriately identified and managed, and that an independent assessment of risk is being performed. Legal & General operates a ‘three lines of defence’ model of risk management and assurance. Business management manage risks, Risk functions and Group level committees oversee and challenge the management of risk and Internal Audit provide independent assurance that risks are effectively managed and that there is appropriate oversight. Risk assessment is carried out on a bottom up and top down basis. On a monthly basis business management carry out a self-assessment of the performance of controls that operate to mitigate risk, which requires approval through the corporate hierarchy. This assessment is carried out using SWORD RMS, an externally provided risk management system. This self-assessment feeds into the Directors Certification process, part of the firms Combined Code on Corporate Governance. The Group Regulatory Risk & Compliance function operates a Conduct Risk Universe carrying out periodic assessments of controls using a conduct risk-based model. In addition, the Internal Audit function operates a similar risk-based universe of periodic reviews and assessments of control. These functions report findings to key committees and these findings are recorded on the risk management system, which ensures that required actions are tracked and evidenced. During the period, no material findings have been contained within the published reports. 6 Statement on the Constitution and Governance of the Fund continued

The control assurance model incorporates a self-assessment and independent assurance of the full risk exposure of the firm. This will range from transaction processing to risk management and governance. The bottom up assessments are carried out monthly, with the independent assurance subject to a risk-based approach, with an appropriate frequency agreed by the Audit Committee (for Internal Audits) or the Group Regulatory Risk & Compliance function. On an annual basis, the external auditor assesses and reports on the effectiveness of the firm’s accounting; this is filed with the FCA. Corporate Governance Legal & General (Unit Trust Managers) Limited is a company authorised and regulated by the Financial Conduct Authority (FCA) and its Board members are persons approved by the FCA to carry out significant management and control functions. The Company is a subsidiary company of Legal & General Retail Investments (Holdings) Limited, which is itself a subsidiary of Legal & General Group Plc. The UTM Board consists of four Directors, each with approved person responsibility for UTM and other Legal & General companies. The independent Compliance Officer and Risk Director also attend the Board meetings. The Chairman of the Board also sits on the board of Legal & General Group Plc and is the Chairman of the LGIM Retail Risk & Compliance Committee. The Board of Legal & General Group Plc has a number of Non-Executive Directors. The UTM Board is the legally accountable governance forum for the management of the firm and meets quarterly. The Board delegates the management of inherent risks to a series of Governance Committees with Terms of Reference that meet monthly. These include (but not limited to) the LGIM Retail Risk & Compliance Committee and Unit Trust Managers Funds Committee, which respectively manage operational risks and fund risk on its behalf. These delegated authorities are periodically monitored and reviewed by the Board. On an annual basis the Board approves the firm’s financial statements and the findings of the external auditors report, which is then filed with the FCA. The Board also approves the full documentation and output from the stress and scenario analysis of the firm’s risks and capital, including the process and costs of winding the firm down in an orderly fashion, as required by the regulations. The output of this assessment is filed with the FCA according to an agreed cycle, currently every two years. The most recent assessment illustrated the firm’s risks in extremis require less capital than the firm’s current regulatory requirement, which has since been confirmed by the FCA.

7 Statement on the Constitution and Governance of the Fund continued

Review of effectiveness The UTM Board has responsibility for reviewing the effectiveness of the system of internal controls. Our reviews of internal control are informed by the work of the internal auditors, support functions and the Executive Managers within UTM who have responsibility for the development and maintenance of the risk management framework, and comments made by the external auditor in their management letter and other reports. On the basis of this information, we can confirm there are no significant internal control issues to report.

A. J. C. Craven S. D. Thomas (Director) (Director)

Legal & General (Unit Trust Managers) Limited 24 June 2014

8 Statement on the Constitution and Governance of the Fund continued

Statement of the Manager’s Responsibilities Under the Scheme Rules and charity law, the Manager of the Fund is responsible for preparing the Annual Report and the financial statements for each financial year in accordance with applicable law and regulations. The financial statements are required by law to give a true and fair view of the state of affairs of the Fund and of the incoming resources and application of resources for that period. In preparing these financial statements, generally accepted accounting practice requires the Manager to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • state whether applicable UK Accounting Standards and the principles set out in the Statement of Recommended Practice for Authorised Funds have been followed, subject to any material departures disclosed and explained in the financial statements; • state whether the financial statements comply with the Scheme Rules, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Fund will continue in business. The Manager is required to act in accordance with the Scheme Rules of the Fund, within the framework of trust law. They are responsible for keeping proper accounting records, sufficient to disclose at any time, with reasonable accuracy, the financial position of the Fund at that time, and to enable the Manager to ensure that, where any statements of accounts are prepared by it under section 132(1) of the Charities Act 2011 and the Statement of Recommended Practice for Authorised Funds issued by the IMA in October 2010, those statements of accounts comply with the requirements of regulations under these provisions. The Manager has general responsibility for taking such steps as are reasonably open to it to safeguard the assets of the Fund and to prevent and detect fraud and other irregularities.

9 Manager’s Investment Report

Investment Objective and Policy The investment objective for the Fund is to track the capital performance of the UK equity market as represented by the FTSE All-Share Index (‘the Index’) by investment in a representative sample of stocks selected from various economic sectors (including a stock or stocks reasonably expected to become part of that Index). From time to time non Index constituents may be held as a result of a corporate action and these holdings will be sold or transferred as soon as reasonably practical. The investment objective set for the Investment Manager is to match the capital return of the Index to within a deviation of +/- 0.50% per annum, in two years out of three on a rolling basis, before the deduction of expenses. For the purposes of measuring Fund performance relative to the Index, the Investment Manager will use proprietary performance data. The Fund shall normally invest in: • Securities which are constituents of the Index, or securities which are expected to become Index constituents, and are listed on a recognised stock exchange • Cash (including any near-cash short-term instruments) The Fund may also invest in: • Investments which may be subject to stabilisation • Derivatives • New issues • Underwriting (including sub-underwriting) of any issue or offer for sale, subject to the provisions of the Governing Scheme Document/the prior written approval of the Charity Commission • Foreign currency may be purchased as required to manage the Fund efficiently Cash will be held, from time to time, in the Fund which will include cash required for administration purposes but could also include cash available for investment which the Investment Manager may place on deposit pending acquisition of securities. Cash on deposit will be placed with banks approved by the Investment Manager.

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Manager’s Investment Report During the year under review, the bid price of the Fund’s distribution units rose from 69.02p to 73.45p, an increase of 6.42%. FTSE, the Index compiler, calculates the benchmark Index at the end of the business day using closing prices, whereas the Fund is valued using prevailing prices at 12 noon. Therefore, for tracking purposes the Fund has been revalued using closing prices of the investments. On this basis, over the review year from the close of business on 30 April 2013 to the close of business on 30 April 2014, the Fund rose by 6.88% on a capital only basis, compared with the FTSE All-Share Index rise of 6.77% (Source: Bloomberg), producing a tracking difference of +0.11%. Past performance is not a guide to future performance. The value of investments and any income from them may go down as well as up. Exchange rate changes may cause the value of any overseas investments to rise or fall. The FTSE All-Share Index is calculated by FTSE International Limited (‘FTSE’). FTSE does not sponsor, endorse or promote this product. All copyright in the indices values and constituent list belongs to FTSE. Legal & General has obtained full licence from FTSE to use such copyright in the creation of this product. ‘FTSE™’, ‘FT-SE®’ and ‘Footsie®’ are trademarks of the Stock Exchange Plc and The Financial Times Limited and are used by FTSE International Limited (‘FTSE’) under licence. All- Share® is a trademark of FTSE. Market/Economic Review For the majority of the review year in the UK, the more domestically focused FTSE SmallCap Index (+16.7%) and FTSE 250 Index (+13.4%) generally outperformed the blue chip FTSE 100 Index (+5.4%), which is heavily weighted towards mining stocks that have struggled on weaker commodity prices. Major sectors such as Automobiles & Parts (+39.5%), Leisure Goods (+31.8%) and Fixed Line Telecommunications (+31.3%) showed the largest positive returns, while Industrial Metals & Mining (-32.8%), Food & Drug Retailers (-16.0%) and Technology Hardware & Equipment (-7.9%) were the worst performing sectors. The UK economy has maintained its recovery, with first quarter 2014 GDP growth posted at 0.8%. The service sector’s robust growth was underpinned by the ongoing strength of the housing market that in turn continued to benefit from the taxpayer-backed ‘Help to Buy’ mortgage subsidy scheme. With unemployment in the UK slipping below the 7.0% threshold that the Bank of England had previously suggested may trigger higher interest rates, speculation grew that rates could rise before the 2015 general election. However, as inflation fell below the 2.0% target, Bank of England Governor Carney dampened speculation of a near-term hike, and broadened the criteria for a rate move.

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Trust Review Companies within the Fund are held with weightings generally proportionate to those of the benchmark Index. Hence, investment activity, other than to raise or invest cash, is only necessary when there are changes to the weightings of the constituent companies or to the constituents of the Index. At the annual Index review in June 2013, 19 companies were added, including DCC, Group, and Holdings. Camelia, RM, Torotrak and Mecom Group were among the 11 companies deleted. At the quarterly Index review in September 2013, 11 companies were added: Coca-Cola HBC, Partnership Assurance Group, Caracal Energy, Entertainment One Group, , Al Noor Hospitals Group and five Investment Trusts. No companies were deleted. At the quarterly Index review in December 2013, 10 companies were added, including Royal Mail, , Merlin Entertainments, Carphone Warehouse Group and Group. HellermannTyton Group, St. James’s Place, F&C Asset Management and Phoenix Group Holdings had their free float increased. At the quarterly Index review in March 2014, six companies were added: Infinis Energy, Servelec Group, Just Retirement Group, New City High Yield Fund, Mecom Group and Flybe Group. Alternative Investment Strategies was deleted, whilst , and were among the six companies to have their free float adjusted. At each of the Index review effective dates the Fund was rebalanced accordingly. Outside the reviews, mining and metals group completed its long awaited merger with Xstrata, resulting in a name change to Glencore Xstrata and a small increase in weighting for the new entity. Other acquisitions included Lonrho, the support servicing company, by FS Africa Limited; and Kazakhmys, the Kazakh-focused miner, accepting a takeover offer of its entire shareholding in Eurasian Natural Resources Corporation, which was subsequently deleted. The two trusts Miton Income Opportunities Trust and Impax Asian Environmental Markets were wound up and the proceeds reinvested across the Fund. There were a number of deletions, including Invensys, acquired by Schneider Electric () for cash and stock; Fiberweb, after it was acquired by PGI Acquisition Limited via a scheme of arrangement; and Eurasian Natural Resources Corporation, after becoming a private entity, which also resulted in an increase weight in Kazakhmys who previously held a stake. ’s sale of its 45% stake in Verizon Wireless (USA), and the subsequent return of Verizon Communications (USA) shares and cash to shareholders, led to a significant reduction in Vodafone’s market capitalisation.

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Countrywide increased its free float to 70% following a secondary share placing. Similar secondary placings included the insurers St. James’s Place and Direct Line Insurance Group, the online business Moneysupermarket.com and the general retailer Sports Direct. Capital raisings in the form of rights issues included Barclays and G4S to refinance their balance sheets. Caracal Energy raised cash for an exploration programme, and to part pay for two energy companies. Other capital raisings included Thomas Cook and FirstGroup, both raising cash to refinance their balance sheets. Capital repayments continued and included SOCO International, Hargreaves Lansdown, Hikma Pharmaceuticals, esure Group, Wolseley, , Direct Line Insurance Group, McBride and Rolls-Royce. BUMI changed its name to Asia Resource Minerals. The first quarter of 2014 saw capital raising activity for acquisitions, including Cineworld, IP Group, Properties and Group, whilst and RSA Insurance Group raised cash to improve their balance sheets. The government reduced its holding to below 25% in by selling a further 7.8% stake for £4.2bn. Other secondary placings also resulted in free floats increasing for Bank of Georgia Holdings, Moneysupermarket.com, African Barrick Gold and Crest Nicholson Holdings. Capital repayments were numerous and included Next, IMI, Melrose Industries, easyJet, Playtech and Direct Line Insurance Group. Outlook A steady improvement in global growth is expected throughout 2014. Risks are broadly balanced, however, advanced economies remain vulnerable to negative shocks given the lack of fiscal and monetary policy space. But in their absence, and for the first time since the financial crisis, there is a realistic prospect of a synchronised global expansion – which may raise questions about how long central banks can maintain these exceptional levels of monetary accommodation. Recent rhetoric from the Bank of England (BoE) however makes rate hikes seem unlikely this year as inflationary pressure remains low and BoE Governor Mark Carney does not want to risk prematurely choking off the economic recovery. We expect another positive year for UK equities. With the vivid memory of more than a decade of seemingly range-bound equity markets it may feel counterintuitive to forecast new all-time highs, but in terms of valuations, equities are no longer cheap, but also not yet broadly in expensive territory. We expect 2014 to see the market shift to a more mature market driven by earnings growth.

Legal & General Investment Management Limited (Investment Adviser) 16 May 2014

13 Corporate Trustees’ Report

Part 1 - Introduction The Royal Bank of Scotland Plc was appointed Corporate Trustee for the Common Investment Fund on 7 February 2005. On 27 January 2012 the Corporate Trustee became National Westminster Bank Plc following an internal re-structure of its Trustee and Depositary Services business. The principal duties of the Corporate Trustee for the Scheme are contained within the relevant Scheme Orders and can be summarised as follows: • Supervision and oversight of the Manager’s compliance with the relevant Scheme Orders and Scheme Particulars • Appointment of a Registrar • Supervision and oversight of any Registrar or other delegate appointed by the Corporate Trustee • Appointment of Custodian and control of the property of the Schemes and collection of income due to the Scheme • The creation and cancellation of units in accordance with the instructions of the Manager • Making distributions or allocations of income to Unitholders • Preparation of reports by the Corporate Trustee on the discharge of its responsibilities • Authorisation of payment by the Scheme in respect of reasonable costs/expenses of the Advisory Board members The Corporate Trustee is responsible for the safeguarding of the Fund’s assets and for ensuring that reasonable steps are taken for the prevention and detection of fraud and other irregularities.

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Part 2 - Certification • Supervision and oversight of the Manager’s compliance with the relevant Scheme Orders and Scheme Particulars The Corporate Trustee is satisfied that, over the year concerned, the Manager has managed the Scheme in all material respects in accordance with the relevant Scheme Orders and Scheme Particulars. Specific comments on key areas are as follows; a) the proper exercise of investment and borrowing powers on the part of the Manager in terms of the investment restrictions contained within the Scheme Orders, Scheme Particulars and Investment Guidelines. Review procedures: Investment and borrowing power restrictions and objectives are reviewed on a daily basis using our ‘ComplianceAlert’ monitoring system. Status: No breaches recorded within this period. b) the proper pricing of the schemes. Review procedures: Pricing calculations are checked on each creation and each cancellation of units. Status: No breaches recorded within this period. c) Supervision and oversight of the Registrar. The creation and cancellation of units in accordance with the instructions of the Manager. Re-issue of Unclaimed Distributions greater than £25. Review procedures: Supervision of the Registrar is achieved through periodic site visits and monthly reconciliation of the total number of registered units against the records held by the Corporate Trustee. Unit deals which have been outstanding for longer than three months are reviewed to obtain satisfaction that there are no underlying difficulties in respect of unit dealing or registration processes. The Corporate Trustee ensures that creations and cancellations of units are priced and performed in accordance with the requirements of the Scheme Orders and Scheme Particulars and that correct monies are paid to or from the Schemes within appropriate time scales. Status: All issue and cancellation monies have been received or paid within appropriate time scales. There are no issues to report. No cheques were re-issued for greater than £25.

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Part 2 - Certification continued d) Custody and control of the property of the Schemes and collection of income due to the Schemes Review procedures: Property of the Scheme is held by Northern Trust Global Services Limited (‘the Custodian’) and may only be released in accordance with the terms of a Custody Agreement entered into by the Corporate Trustee and the Custodian. On a daily basis the Corporate Trustee monitors that settlement of trades has taken place in a timely manner and on a monthly basis, reviews the extent to which all income has been received on the expected dates. Status: Over the year in question, all trades settled in a timely manner. e) Making distributions or allocations of income to Scheme participants. Review procedures: Distributions are paid to unitholders on 31 December and 30 June each year. The Corporate Trustee ensures that payments/allocations have been made in a timely manner. The Corporate Trustee reconciles the Unclaimed Distributions Accounts. Status: Over the year in question, no discrepancies exist. Part 3 - Other Matters Compliance Visits The Corporate Trustee made Compliance visits to: Legal & General (Unit Trust Managers) Limited Northern Trust Global Services Limited The Northern Trust Company Regular compliance visits to the above have taken place with no major issues to report.

London National Westminster Bank Plc 24 June 2014 Trustee and Depositary Services

16 Portfolio Statement

Portfolio Statement as at 30 April 2014 All investments are in ordinary shares unless otherwise stated. The percentages in brackets show the equivalent sector holdings at 30 April 2013.

Holding/ Market % of Nominal Value Net Value Investment £ Assets — 93.80% (95.79%) Oil & Gas Producers — 14.77% (14.65%) 322,625 512,974 0.09 967,257 BG Group 11,607,084 1.97 5,243,806 BP 26,470,733 4.48 178,400 328,078 0.06 206,289 Enquest 285,917 0.05 73,970 49,634 0.01 58,591 Heritage Oil 183,566 0.03 27,860 JKX Oil & Gas 15,184 — 142,080 376,370 0.06 150,985 517,275 0.09 732,223 'A' 17,371,991 2.94 1,058,126 Royal Dutch Shell 'B' 26,939,888 4.56 23,653 RusPetro 3,430 — 68,398 Salamander Energy 86,865 0.01 58,456 SOCO International 247,327 0.04 253,439 2,231,530 0.38 ------87,227,846 14.77 ------Oil Equipment, Services & Distribution — 0.55% (0.53%) 82,828 AMEC 1,020,441 0.17 39,077 Hunting 331,764 0.06 73,015 1,071,130 0.18 102,446 Wood Group (John) 818,031 0.14 ------3,241,366 0.55 ------Alternative Energy — 0.01% (0.00%) 9,300 Porvair 29,504 0.01 ------Chemicals — 0.68% (0.64%) 55,937 Alent 176,537 0.03 18,396 Carclo 32,745 0.01 38,214 Croda International 970,636 0.16 132,240 364,189 0.06 57,611 Johnson Matthey 1,878,695 0.32 66,995 176,197 0.03 23,227 429,932 0.07 ------4,028,931 0.68 ------Forestry & Paper — 0.17% (0.16%) 102,935 Mondi (UK) 1,000,013 0.17 ------Industrial Metals & Mining — 0.04% (0.05%) 136,017 Evraz 131,596 0.02 57,539 83,029 0.02 ------214,625 0.04 ------Mining — 5.52% (6.57%) 46,293 African Barrick Gold 113,649 0.02 370,743 Anglo American 5,742,809 0.97

17 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Mining — (cont.) 30,683 Anglo Pacific Group 56,457 0.01 101,302 Antofagasta 798,260 0.14 27,235 Asia Resource Minerals 51,202 0.01 601,837 BHP Billiton 11,540,224 1.95 47,389 Fresnillo 399,963 0.07 44,456 73,686 0.01 64,097 Kazakhmys 146,333 0.02 122,590 Lonmin 346,562 0.06 30,488 New World Resources 'A' 11,890 — 53,161 Petropavlovsk 37,080 0.01 56,237 Polymetal International 320,832 0.05 25,696 Randgold Resources 1,228,012 0.21 354,303 11,426,272 1.94 34,153 317,794 0.05 ------32,611,025 5.52 ------Construction & Materials — 0.31% (0.22%) 211,301 596,503 0.10 23,502 Boot (Henry) 50,001 0.01 17,066 Costain Group 46,249 0.01 23,162 Galliford Try 275,859 0.05 19,721 Keller 198,196 0.03 13,678 Kier Group 226,508 0.04 101,103 Low & Bonar 83,915 0.01 53,937 Marshalls Group 95,199 0.02 10,403 Morgan Sindall 81,716 0.01 88,000 Norcros 18,480 — 55,620 Tyman 160,186 0.03 ------1,832,812 0.31 ------Aerospace & Defence — 2.11% (2.25%) 9,517 58,577 0.01 906,580 BAE Systems 3,610,002 0.61 43,702 98,002 0.02 310,130 Cobham 937,523 0.16 222,540 1,046,606 0.18 189,314 QinetiQ 399,263 0.07 534,699 Rolls-Royce 5,550,176 0.94 71,649,666 Rolls-Royce Holdings Preference Shares 71,650 0.01 108,012 Senior 300,813 0.05 20,915 Holdings 359,529 0.06 ------12,432,141 2.11 ------General Industrials — 0.68% (0.65%) 5,921 British Polythene Industries 37,302 0.01 221,240 Rexam 1,092,926 0.18 46,749 RPC Group 280,728 0.05 263,306 Smith (DS) 829,414 0.14 109,956 Smiths Group 1,452,519 0.24 83,228 Vesuvius 347,727 0.06 ------4,040,616 0.68 ------Electronic & Electrical Equipment — 0.49% (0.44%) 7,871 Dialight 74,499 0.01

18 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Electronic & Electrical Equipment — (cont.) 27,543 Domino Printing Sciences 212,494 0.04 57,578 e2V Holdings 94,572 0.02 107,849 Halma 603,954 0.10 57,026 HellermannTyton Group 179,347 0.03 85,637 Morgan Crucible 283,373 0.05 16,141 213,223 0.04 11,315 Renishaw 209,667 0.03 33,670 741,413 0.12 48,853 TT Electronics 101,126 0.02 15,274 Volex Group 16,076 — 21,146 Xaar 168,534 0.03 ------2,898,278 0.49 ------Industrial Engineering — 0.98% (0.96%) 52,744 386,086 0.07 47,881 Fenner 200,717 0.03 426 Goodwin 16,721 — 23,404 Hill & Smith Holdings 130,360 0.02 76,917 IMI 1,145,294 0.19 294,177 Melrose Industries 841,640 0.14 56,107 Renold 29,316 0.01 24,183 616,908 0.11 83,833 Severfield-Rowen 52,815 0.01 23,153 Spirax-Sarco Engineering 660,787 0.11 10,614 Vitec Group 64,905 0.01 62,277 1,667,155 0.28 ------5,812,704 0.98 ------Industrial Transportation — 0.31% (0.12%) 137,619 BBA Aviation 429,371 0.07 3,000 Braemar Shipping Services 15,465 — 3,485 Clarkson 91,690 0.01 11,769 Fisher (James) & Sons 155,704 0.03 176,027 Royal Mail 925,902 0.16 88,552 Stobart Group 120,431 0.02 7,017 UK Mail Group 40,032 0.01 30,189 Wincanton 35,774 0.01 ------1,814,369 0.31 ------Support Services — 3.76% (3.54%) 72,224 1,128,861 0.19 143,549 Ashtead Group 1,227,344 0.21 27,665 Atkins (WS) 360,475 0.06 102,337 Babcock International Group 1,220,880 0.21 39,360 Babcock International Group (Rights) 158,424 0.03 48,627 Berendsen 498,913 0.09 38,110 Brammer 181,213 0.03 94,628 Bunzl 1,577,449 0.27 188,671 Group 2,030,100 0.34 121,403 Carillion 450,284 0.08 51,557 Communisis 33,512 0.01 25,749 De La Rue 212,301 0.04 25,221 Diploma 166,459 0.03 130,940 380,119 0.06 66,520 Filtrona 534,488 0.09

19 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Support Services — (cont.) 434,656 G4S 1,010,575 0.17 402,377 Hays 599,542 0.10 71,953 Hogg Robinson Group 51,986 0.01 76,413 258,734 0.04 177,670 Howden Joinery 575,118 0.10 11,127 Hyder Consulting 50,739 0.01 38,476 253,557 0.04 45,719 Intertek Group 1,324,937 0.22 45,773 Lavendon Group 101,959 0.02 103,382 Management Consulting Group 24,295 — 24,572 Mears Group 123,720 0.02 13,853 Menzies (John) 89,975 0.02 83,871 Michael Page International 388,490 0.07 104,220 Group 330,273 0.06 32,808 Northgate 171,750 0.03 20,189 PayPoint 229,549 0.04 111,008 Premier Farnell 247,548 0.04 555,098 Rentokil Initial 655,016 0.11 15,177 Ricardo 102,141 0.02 19,474 Robert Walters 61,927 0.01 67,862 RPS Group 200,329 0.03 141,947 Group 482,620 0.08 122,568 Shanks Group 124,406 0.02 150,959 SIG 289,388 0.05 54,115 Smiths News 96,325 0.02 143,009 Speedy Hire 81,158 0.01 28,424 St. Ives 56,279 0.01 36,182 SThree 144,818 0.02 69,537 1,181,434 0.20 13,301 Tribal Group 25,837 — 2,006 Vp 12,547 — 75,220 Wolseley 2,559,737 0.43 80,609 Xchanging 127,765 0.02 ------22,195,296 3.76 ------Automobiles & Parts — 0.30% (0.23%) 470,098 GKN 1,798,125 0.30 ------Beverages — 3.80% (4.27%) 23,890 A.G.Barr 148,118 0.02 67,094 488,444 0.08 714,172 Diageo 13,030,068 2.21 268,522 SABMiller 8,626,269 1.46 58,278 Stock Spirits Group 169,152 0.03 ------22,462,051 3.80 ------Food Producers — 2.30% (2.38%) 4,906 Anglo-Eastern Plantations 34,636 0.01 99,020 Associated British Foods 2,940,894 0.50 1,800 Carr’s Milling Industries 33,300 — 9,956 Cranswick 119,173 0.02 45,574 Dairy Crest Group 212,147 0.04 41,384 Devro 87,010 0.01 12,542 66,096 0.01 204,581 Premier Foods 113,031 0.02 132,758 Tate & Lyle 923,332 0.16 342,547 9,046,666 1.53 ------13,576,285 2.30 ------

20 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Household Goods & Home Construction — 2.38% (2.36%) 16,348 Aga Rangemaster Group 28,241 — 278,527 1,014,117 0.17 35,063 498,245 0.08 34,103 Berkeley Group 777,548 0.13 42,041 Bovis Homes Group 329,391 0.06 60,284 Crest Nicholson Holdings 209,668 0.04 26,566 Headlam Group 124,860 0.02 52,335 McBride 50,242 0.01 889,695 McBride Preference Shares 890 — 8,357 MJ Gleeson Group 32,592 0.01 85,865 Persimmon 1,117,962 0.19 183,086 Reckitt Benckiser 8,747,849 1.48 60,618 Redrow Group 174,640 0.03 912,203 948,691 0.16 ------14,054,936 2.38 ------Leisure Goods — 0.02% (0.01%) 6,736 Group 38,092 — 75,088 Photo-Me International 101,369 0.02 ------139,461 0.02 ------Personal Goods — 0.41% (0.39%) 125,710 Group 1,851,708 0.32 90,320 PZ Cussons 311,514 0.05 9,866 SuperGroup 129,738 0.02 6,321 Ted Baker 118,203 0.02 ------2,411,163 0.41 ------Tobacco — 4.29% (4.71%) 536,300 British American Tobacco 18,314,645 3.10 273,742 Imperial Tobacco 6,994,108 1.19 ------25,308,753 4.29 ------Health Care Equipment & Services — 0.48% (0.40%) 9,200 Al Noor Hospitals Group 92,092 0.01 9,634 Consort Medical 84,924 0.01 8,769 NMC Health 39,189 0.01 23,687 Optos 38,610 0.01 255,609 Smith & Nephew 2,346,491 0.40 18,641 Synergy Healthcare 229,843 0.04 ------2,831,149 0.48 ------Pharmaceuticals & Biotechnology — 7.83% (7.14%) 354,373 AstraZeneca 16,497,835 2.79 102,698 BTG 547,894 0.09 25,238 175,783 0.03 17,830 Genus 186,680 0.03 1,382,644 GlaxoSmithKline 22,564,750 3.82 37,088 Hikma Pharmaceuticals 569,672 0.10 167,320 Shire 5,518,214 0.94 107,503 Vectura 151,579 0.03 ------46,212,407 7.83 ------Food & Drug Retailers — 1.76% (2.25%) 416,351 Booker Group 614,118 0.10

21 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Food & Drug Retailers — (cont.) 29,268 155,120 0.03 619,748 Morrison (Wm) Supermarkets 1,243,834 0.21 122,391 Ocado Group 409,887 0.07 387,218 Sainsbury (J) 1,282,466 0.22 2,287,027 Tesco 6,703,276 1.13 ------10,408,701 1.76 ------General Retailers — 2.11% (1.71%) 38,788 Ashley (Laura) Holdings 9,891 — 42,873 Brown (N) Group 219,938 0.04 5,744 Carpetright 33,918 — 95,394 Carphone Warehouse Group 290,856 0.05 330,181 Debenhams 262,329 0.04 15,418 Dignity 220,477 0.04 1,216,456 Retail 546,310 0.09 25,164 233,396 0.04 23,987 Findel 63,685 0.01 57,000 Halfords Group 252,054 0.04 247,690 Home Retail Group 507,765 0.08 130,615 Inchcape 832,671 0.14 2,086 JD Sports Fashion 37,089 0.01 174,052 Kesa Electricals 178,838 0.03 675,163 Kingfisher 2,810,704 0.48 95,622 Lookers 131,719 0.02 453,879 Marks & Spencer Group 1,997,521 0.34 20,224 Mothercare 37,819 0.01 42,609 Next 2,761,063 0.47 429,321 Pendragon 130,943 0.02 65,230 Sports Direct International 508,794 0.09 43,925 Topps Tiles 56,004 0.01 32,719 WH Smith 355,983 0.06 ------12,479,767 2.11 ------Media — 2.03% (1.94%) 6,007 Group 40,127 0.01 17,560 Bloomsbury Publishing 28,667 — 276,263 BSkyB 2,425,589 0.41 18,000 Centaur Media 12,105 — 21,392 Chime Communications 74,230 0.01 8,035 Euromoney Institutional Investor 87,501 0.01 64,045 Huntsworth 40,989 0.01 75,217 ITE Group 173,601 0.03 1,070,972 ITV 1,927,750 0.33 126,591 Johnston Press 31,648 0.01 27,650 Mecom Group 36,498 0.01 114,098 Moneysupermarket.com 208,115 0.04 230,802 Pearson 2,538,822 0.43 28,073 Perform Group 60,694 0.01 331,830 Reed Elsevier 2,867,011 0.49 27,603 657,779 0.11 83,441 Trinity Mirror 147,691 0.02 77,892 United Business Media 503,182 0.08 25,408 UTV Media 63,012 0.01 23,402 Wilmington Group 52,713 0.01 ------11,977,724 2.03 ------Travel & Leisure — 3.14% (2.83%) 36,392 52,696 0.01 27,516 Betfair Group 266,080 0.05

22 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Travel & Leisure — (cont.) 190,958 Bwin.Party Digital Entertainment 241,753 0.04 51,750 Carnival 1,217,678 0.21 60,883 Cineworld 195,130 0.03 510,551 Compass Group 4,786,416 0.81 36,242 Domino's Pizza UK & Ireland 186,103 0.03 70,455 easyJet 1,151,939 0.20 139,744 Enterprise Inns 191,449 0.03 363,305 FirstGroup 473,750 0.08 38,210 Flybe Group 54,354 0.01 9,082 Fuller Smith & Turner 'A' 85,371 0.01 12,141 Go-Ahead Goup 241,120 0.04 63,705 565,063 0.10 74,397 InterContinental Hotels 1,489,428 0.25 249,128 Ladbrokes 353,513 0.06 161,228 Marston's 236,038 0.04 89,197 Merlin Entertainments 317,452 0.05 43,847 Millennium & Copthorne Hotels 243,789 0.04 72,311 Mitchells & Butlers 319,687 0.05 115,132 322,600 0.06 80,769 Punch Taverns 10,702 — 53,776 Rank Group 85,934 0.02 57,427 Restaurant Group 357,483 0.06 214,687 Spirit 170,139 0.03 37,100 Sportech 32,370 0.01 116,630 Stagecoach 432,814 0.07 414,436 Thomas Cook 721,533 0.12 145,237 TUI Travel 617,257 0.11 2,382 Wembley 48 — 23,763 Wetherspoon (JD) 200,797 0.03 51,269 2,085,110 0.35 244,401 William Hill 830,963 0.14 ------18,536,559 3.14 ------Fixed Line Telecommunications — 1.61% (1.32%) 2,238,329 BT Group 8,214,667 1.39 708,008 Cable & Wireless 371,704 0.06 43,068 Colt Telecom 56,419 0.01 209,122 KCOM Group 199,084 0.04 145,968 TalkTalk Telecom Group 419,950 0.07 16,695 Telecom Plus 254,933 0.04 ------9,516,757 1.61 ------Mobile Telecommunications — 3.00% (5.11%) 121,299 876,992 0.15 7,544,179 Vodafone Group 16,849,924 2.85 ------17,726,916 3.00 ------Electricity — 0.84% (0.90%) 114,233 756,794 0.13 21,300 Infinis Energy 46,413 0.01 274,212 SSE 4,140,601 0.70 ------4,943,808 0.84 ------Gas, Water & Multiutilities — 2.92% (3.09%) 1,439,564 4,743,363 0.80 1,059,518 National Grid 8,921,142 1.51

23 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Gas, Water & Multiutilities — (cont.) 108,400 818,420 0.14 67,310 Severn Trent 1,246,581 0.21 195,092 United Utilities 1,542,202 0.26 ------17,271,708 2.92 ------Banks — 10.95% (11.74%) 7,527 Bank of Georgia Holdings 194,799 0.03 4,566,483 Barclays 11,486,988 1.95 5,376,955 HSBC Holdings 32,616,609 5.52 15,184,347 Lloyds Banking Group 11,421,666 1.93 595,687 Royal Bank of Scotland 1,804,336 0.31 553,161 Standard Chartered 7,146,840 1.21 ------64,671,238 10.95 ------Nonlife Insurance — 0.76% (0.59%) 55,311 Admiral Group 768,270 0.13 140,911 Amlin 631,986 0.11 422,405 Direct Line Insurance Group 1,043,763 0.18 61,957 esure Group 157,990 0.03 34,678 Jardine Lloyd Thompson Group 364,466 0.06 17,858 Novae Group 98,040 0.01 1,459,294 RSA Insurance Group 1,418,434 0.24 ------4,482,949 0.76 ------Life Insurance — 4.11% (3.50%) 837,263 4,332,836 0.73 35,236 Chesnara 115,398 0.02 46,300 Just Retirement Group 74,173 0.01 1,665,536 Legal & General Group 3,512,615 0.60 1,388,425 Old Mutual 2,754,635 0.47 41,040 Partnership Assurance Group 53,106 0.01 726,601 Prudential 9,769,150 1.65 144,488 St. James's Place 1,114,725 0.19 668,643 Standard Life 2,536,831 0.43 ------24,263,469 4.11 ------Real Estate Investment & Services — 0.50% (0.39%) 208,708 Capital & Counties Properties 693,328 0.12 54,392 Capital & Regional 24,476 — 4,859 CLS Holdings 67,054 0.01 41,323 Countrywide 245,459 0.04 700 33,460 0.01 32,461 Development Securities Capital 76,608 0.01 48,761 Foxtons Group 152,963 0.03 140,930 Grainger Trust 300,463 0.05 603 Hampton Trust* — — 27,739 Helical Bar 100,276 0.02 36,393 IRP Property Investments 29,842 — 27,693 LSL Property Services 110,633 0.02 92,338 Picton Properties 56,095 0.01 147,404 Quintain Estates & Development 151,826 0.03 62,592 Holdings 143,023 0.02 31,258 185,516 0.03 131,665 Schroder Real Estate Investment Trust 70,112 0.01 45,001 St. Modwen Properties 164,164 0.03

24 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Real Estate Investment & Services — (cont.) 40,691 Standard Life Investment Property Income Trust 30,315 0.01 84,350 UK Commercial Property Trust 68,366 0.01 57,868 Unite Group 245,650 0.04 ------2,949,629 0.50 ------Real Estate Investment Trusts — 1.66% (1.42%) 30,853 156,733 0.03 283,988 1,965,197 0.33 25,529 696,942 0.12 97,446 617,808 0.10 200,653 1,149,742 0.20 192,550 203,140 0.03 251,858 Intu Properties 736,685 0.12 227,547 Land Securities Group 2,416,549 0.41 174,975 London & Stamford Property 245,315 0.04 22,884 McKay Securities 49,887 0.01 15,487 Mucklow (A&J) Group 67,949 0.01 28,090 Primary Health Properties 98,666 0.02 196,967 687,415 0.12 78,370 Shaftesbury 514,891 0.09 3,819 Town Centre Securities 9,175 — 30,130 171,741 0.03 ------9,787,835 1.66 ------Financial Services — 2.04% (1.86%) 277,151 3i Group 1,058,440 0.18 268,995 Aberdeen Asset Management 1,169,321 0.20 37,495 Arrow Global Group 85,864 0.02 114,170 400,622 0.07 59,481 192,124 0.03 6,000 Charles Taylor Consulting 15,600 — 6,650 City of London Investment Group 17,789 — 40,455 565,561 0.10 142,518 F&C Asset Management 170,166 0.03 63,038 Hargreaves Lansdown 731,241 0.12 149,984 ICAP 624,683 0.11 104,524 IG Group 662,159 0.11 119,624 Intermediate Capital Group 531,729 0.09 72,335 International Personal Finance 401,098 0.07 150,983 789,641 0.13 128,830 IP Group 223,115 0.04 115,402 Jupiter Fund Management 444,298 0.08 48,644 878,511 0.15 462,438 456,889 0.08 88,399 Paragon Group 320,977 0.05 38,946 Provident Financial 773,078 0.13 10,415 199,864 0.03 500 S & U 9,230 — 19,555 Schroders 498,653 0.08 17,263 Schroders (Non-voting) 335,938 0.06 66,718 SVG Capital 284,152 0.05 63,028 Tullett Prebon 199,988 0.03 ------12,040,731 2.04 ------

25 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Equity Investment Instruments — 2.83% (2.84%) 58,824 Aberdeen Asian Income Fund 113,383 0.02 11,880 Aberdeen Asian Smaller Companies Investment Trust 100,208 0.02 34,155 Aberdeen New Dawn Investment Trust 57,466 0.01 3,669 Aberdeen New Thai Investment Trust 14,135 — 26,377 Aberforth Smaller Companies Trust 305,973 0.05 29,120 Acencia Debt Strategies 29,994 0.01 165,664 734,720 0.12 12,209 Artemis Alpha Trust 36,016 0.01 17,662 Baillie Gifford Japan Trust 57,092 0.01 7,600 Baillie Gifford Shin Nippon 21,850 — 29,279 162,938 0.03 7,140 Baring Emerging Europe 43,126 0.01 19,251 Biotech Growth Investment Trust 84,416 0.01 22,826 BlackRock Commodities Investment Trust 25,622 — 42,720 BlackRock Frontier Markets Investment Trust 49,982 0.01 32,088 BlackRock Greater Europe Investment Trust 77,492 0.01 11,055 BlackRock Latin American Investment Trust 48,531 0.01 42,100 BlackRock New Energy Investment Trust* — — 29,427 BlackRock North American Income Trust 32,002 0.01 16,159 BlackRock Smaller Companies Trust 139,048 0.02 53,131 BlackRock World Mining Investment Trust 241,799 0.04 130,148 BlueCrest AllBlue Fund 229,841 0.04 83,445 British Assets Trust 116,406 0.02 41,879 British Empire Securities & General Trust 208,139 0.04 9,912 Brunner Investment Trust 51,790 0.01 10,083 214,869 0.04 5,797 Candover Investments 30,724 0.01 569 Capital Gearing Trust 18,305 — 19,986 City Natural Resources High Yield Trust 25,232 — 73,844 City of London Investment Trust 279,721 0.05 12,281 Dexion Trading 16,426 — 99,045 Diverse Income Trust 85,179 0.01 1,434 Dunedin Enterprise Investment Trust 5,718 — 37,421 Dunedin Income Growth Investment Trust 103,750 0.02 14,298 Dunedin Smaller Companies Investment Trust 30,741 0.01 8,700 Eastern European Trust 19,858 — 58,224 Ecofin Water & Power Opportunities 84,279 0.01 53,959 Edinburgh Dragon Trust 135,302 0.02 52,506 Edinburgh Investment Trust 320,549 0.05

26 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Equity Investment Instruments — (cont.) 29,267 Edinburgh UK Tracker Investment Trust 91,386 0.02 9,364 Edinburgh US Tracker Investment Trust 76,785 0.01 12,335 Edinburgh Worldwide Investment Trust 45,146 0.01 9,934 Electra Private Equity Investment Trust 263,350 0.04 8,509 Electric & General Investment Trust* — — 12,554 EP Global Opportunities Trust 28,372 — 11,379 European Investment Trust 88,073 0.01 21,892 F&C Capital and Income Investment Trust 57,795 0.01 13,747 F&C Global Smaller Companies 116,437 0.02 16,125 F&C Private Equity Trust 34,991 0.01 5,291 F&C US Smaller Companies 32,513 0.01 14,209 Fidelity Asian Values 29,697 — 178,328 Fidelity China Special Situations 178,506 0.03 12,359 187,857 0.03 29,224 Fidelity Japanese Values 19,288 — 18,703 170,010 0.03 28,656 Finsbury Growth & Income Trust 143,710 0.02 165,927 Foreign & Colonial Investment Trust 612,271 0.10 1,116 Gartmore Irish Growth Fund* — — 21,620 Graphite Enterprise Trust 123,342 0.02 90,459 Greencoat UK Wind 94,077 0.02 2,648 Hansa Trust 'A' 25,421 — 30,133 Henderson Asian Total Return 53,034 0.01 4,592 Henderson European Focus Fund 43,762 0.01 5,350 Henderson EuroTrust 44,084 0.01 11,862 Henderson Global Trust 42,347 0.01 28,400 Henderson High Income Trust 49,629 0.01 21,485 Henderson Smaller Companies Investment Trust 120,209 0.02 22,619 152,678 0.03 9,769 100,230 0.02 334,716 HICL Infrastructure 457,557 0.08 64,075 Impax Environmental Markets Trust 95,472 0.02 9,600 International Biotechnology Trust 26,016 — 206,272 International Public Partnerships 263,616 0.04 27,171 INVESCO Asia Trust 43,813 0.01 14,646 INVESCO Income Growth Trust 40,533 0.01 14,685 INVESCO Perpetual UK Smaller Companies Investment Trust 47,029 0.01 24,765 Investors in Global Real Estate 26,746 — 17,391 JPMorgan American Investment Trust 202,779 0.03 30,103 JPMorgan Asian Investment Trust 59,830 0.01 17,409 JPMorgan Chinese Investment Trust 25,417 — 16,412 JPMorgan Claverhouse Investment Trust 98,882 0.02 30,599 JPMorgan Emerging Markets Investment Trust 163,705 0.03 31,371 JPMorgan European Investment Trust Growth Shares 72,467 0.01 18,621 JPMorgan European Investment Trust Income Shares 23,137 —

27 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Equity Investment Instruments — (cont.) 9,579 JPMorgan European Smaller Companies Trust 113,320 0.02 71,459 JPMorgan Global Emerging Markets Income Trust 81,285 0.01 35,719 JPMorgan Indian Investment Trust 129,035 0.02 50,398 JPMorgan Japanese Investment Trust 100,796 0.02 12,821 JPMorgan Japanese Smaller Companies Investment Trust 23,078 — 6,909 JPMorgan Mid Cap Investment Trust 55,583 0.01 6,629 JPMorgan Overseas Investment Trust 61,219 0.01 15,426 JPMorgan Russian Securities 61,704 0.01 5,451 JPMorgan Smaller Companies Investment Trust 44,262 0.01 26,838 Jupiter European Opportunities Trust 121,106 0.02 30,000 Jupiter Second Split Trust 7,350 — 3,466 Keystone Investment Trust 60,447 0.01 32,803 170,904 0.03 30,442 LMS Capital Fund 24,734 — 7,574 Lowland Investment Company 112,095 0.02 4,000 Majedie Investments 8,450 — 1,200 Manchester & London Investment Trust 3,186 — 12,260 Martin Currie Pacific Trust 32,213 0.01 25,220 Martin Currie Portfolio Investment Trust 40,856 0.01 29,159 Mercantile Investment Trust 450,215 0.08 29,170 Merchants Trust 147,600 0.01 27,475 Middlefield Canadian Income Investment Trust 28,231 — 69,064 256,987 0.04 3,750 Montanaro European Smaller Companies Trust 20,100 — 10,000 Montanaro UK Smaller Companies Investment Trust 49,800 0.01 18,354 145,547 0.02 35,965 Murray International Trust 374,755 0.06 13,923 New India Investment Trust 30,631 0.01 4,013 North Atlantic Smaller Companies Investment Trust 68,462 0.01 36,470 Pacific Assets Trust 55,799 0.01 19,546 Pacific Horizon Investment Trust 32,397 0.01 11,666 Participations Fund 127,626 0.02 57,798 Perpetual Income & Growth Investment Trust 219,632 0.04 453 150,849 0.03 39,500 Polar Capital Global Financials Trust 40,883 0.01 23,460 Polar Capital Global Healthcare Growth & Income Trust 35,718 0.01 35,484 Polar Capital Technology Trust 157,371 0.03 7,267 RCM Technology Investment Trust 34,028 0.01 36,252 RIT Capital Partners 478,526 0.08 59,063 Schroder Asia Pacific Fund 141,751 0.02

28 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Equity Investment Instruments — (cont.) 17,571 Schroder Income Growth Fund 46,695 0.01 29,287 Schroder Japan Growth Fund 31,703 0.01 70,070 Schroder Oriental Income Fund 122,798 0.02 47,311 Schroder UK Growth Fund 85,396 0.01 10,135 Schroder UK Mid Cap Fund 48,876 0.01 37,986 Scottish American Investment Trust 94,110 0.02 31,242 Scottish Investment Trust 178,704 0.03 70,439 Scottish Mortgage Investment Trust 674,101 0.11 9,198 Scottish Oriental Smaller Companies Trust 70,825 0.01 27,053 Securities Trust of Scotland 39,092 0.01 5,102 Shires Income 12,844 — 7,789 Standard Life Equity Income Trust 32,577 0.01 24,349 Standard Life European Private Equity Trust 49,489 0.01 15,581 Standard Life UK Smaller Companies Trust 48,028 0.01 14,173 SVM Global Fund 33,944 0.01 16,878 Temple Bar Investment Trust 208,950 0.04 95,975 Templeton Emerging Markets Investment Trust 516,346 0.09 23,512 Throgmorton Trust 71,241 0.01 15,305 TR European Growth Investment Trust 89,840 0.02 99,635 TR Property Investment Trust 249,685 0.04 66,168 Troy Income & Growth Investment Trust 42,182 0.01 12,056 Value & Income Trust 32,702 0.01 54,321 378,074 0.06 18,242 Witan Pacific Investment Trust 38,719 0.01 12,323 Worldwide Healthcare Trust 156,625 0.03 ------16,676,698 2.83 ------Software & Computer Services — 0.54% (0.72%) 66,660 Anite 54,161 0.01 18,391 Aveva Group 385,291 0.06 23,315 151,548 0.03 5,936 Emblaze 2,612 — 10,651 Fidessa Group 242,523 0.04 322,419 Innovation Group 100,756 0.02 37,215 International 284,323 0.05 61,846 NCC Group 115,343 0.02 23,660 Phoenix IT Group 26,972 — 315,109 Sage Group 1,330,390 0.22 16,932 SDL 51,854 0.01 14,900 Servelec Group 41,348 0.01 58,440 Telecity Group 422,521 0.07 ------3,209,642 0.54 ------Technology Hardware & Equipment — 0.81% (0.91%) 396,819 ARM Holdings 3,557,482 0.60 43,910 CSR 264,777 0.05 57,268 Imagination Technologies 113,391 0.02 86,145 Laird Group 240,000 0.04 83,520 Pace 306,351 0.05 20,168 Sepura 26,723 0.01

29 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Technology Hardware & Equipment — (cont.) 190,786 Communications 185,921 0.03 32,491 Wolfson Microelectronics 76,110 0.01 ------4,770,755 0.81 ------ — 0.00% (0.02%) Industrial Metals & Mining — 0.00% (0.00%) 68,900 International Ferro Metals (UK Listing) 6,546 — ------Mining — 0.00% (0.02%) BERMUDA — 0.34% (0.31%) Mining — 0.03% (0.03%) 112,347 Aquarius Platinum 23,593 — 224,694 Aquarius Platinum (Rights) 16,178 — 101,877 Petra Diamonds 165,143 0.03 ------204,914 0.03 ------Nonlife Insurance — 0.27% (0.26%) 103,926 Catlin Group 547,690 0.10 92,785 663,414 0.11 52,610 Lancashire Holdings 365,640 0.06 ------1,576,744 0.27 ------Equity Investment Instruments — 0.02% (0.02%) 48,313 Utilico Emerging Markets Fund 89,017 0.02 ------Software & Computer Services — 0.02% (0.00%) 22,153 Kofax 97,695 0.02 ------BRITISH VIRGIN ISLANDS — 0.01% (0.06%) Mining — 0.01% (0.01%) 29,975 Gem Diamonds 49,534 0.01 ------Life Insurance — 0.00% (0.05%) CANADA — 0.06% (0.00%) Oil & Gas Producers — 0.03% (0.00%) 30,418 Caracal Energy 165,170 0.03 ------Media — 0.03% (0.00%) 51,473 Entertainment One Group 148,808 0.03 ------CAYMAN ISLANDS — 0.07% (0.00%) Life Insurance — 0.07% (0.00%) 59,212 Phoenix Group Holdings 403,826 0.07 ------CHANNEL ISLANDS — 3.99% (2.78%) Oil Equipment, Services & Distribution — 0.05% (0.04%) 32,313 Cape 97,747 0.02 27,695 Kentz Corporation 199,404 0.03 ------297,151 0.05 ------Mining — 1.50% (0.60%) 292,315 187,666 0.03

30 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Mining — (cont.) 2,729,073 Glencore Xstrata 8,648,432 1.47 ------8,836,098 1.50 ------Support Services — 0.61% (0.64%) 287,508 Experian Group 3,243,090 0.55 178,438 Regus 374,541 0.06 ------3,617,631 0.61 ------Media — 0.96% (0.84%) 166,612 Informa 801,570 0.13 26,716 Tarsus Group 58,708 0.01 382,399 WPP 4,829,699 0.82 ------5,689,977 0.96 ------Nonlife Insurance — 0.05% (0.06%) 131,305 Beazley 324,061 0.05 ------Life Insurance — 0.19% (0.19%) 388,827 Resolution 1,147,040 0.19 ------Real Estate Investment & Services — 0.06% (0.02%) 124,013 F&C Commercial Property Trust 148,319 0.03 79,750 MedicX Fund 66,591 0.01 141,206 Raven Russia 90,019 0.02 ------304,929 0.06 ------Financial Services — 0.12% (0.08%) 295,396 Henderson Group 730,810 0.12 ------Equity Investment Instruments — 0.45% (0.31%) 167,456 223,721 0.04 18,522 Advance Developing Markets Fund 74,644 0.01 6,191 Ashmore Global Opportunities 27,256 — 92,530 BACIT 110,805 0.02 1,467 BH Credit Catalysts 19,555 — 12,471 BH Global - GBP Shares 149,901 0.03 17,816 BH Macro 347,234 0.06 33,162 Bluecrest Blue Trend 27,442 — 33,555 Bluefield I Bluefield Solar Income 34,058 0.01 26,333 City Merchants High Yield Trust 48,979 0.01 34,281 CVC Credit Partners European Opportunities 36,166 0.01 36,650 Dexion Absolute 60,564 0.01 36,650 Dexion 'B' Shares 16,665 — 5,890 Dexion Equity Alternative* 52 — 36,140 Foresight Solar Fund 35,598 0.01 70,824 GCP Infrastructure Investments 79,677 0.01 14,919 GCP Infrastructure Investments 'C' 15,553 — 34,855 Genesis Emerging Markets Fund 176,018 0.03 685 Goldman Sachs Dynamic Opportunities Sterling Accumulation 518 — 22,242 Henderson Diversified Income 20,407 — 32,192 Henderson Far East Income 98,186 0.02 27,585 ICG-Longbow Senior Secured UK Property Debt Investments 28,275 0.01

31 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets Equity Investment Instruments — (cont.) 179,204 John Laing Infastructure Fund 204,830 0.04 63,965 JPMorgan Global Convertibles Income 69,402 0.01 359,100 NB Global Floating Rate Income 357,664 0.06 11,000 New City High Yield 7,178 — 65,700 Renewables Infrastructure Group 67,671 0.01 16,425 Renewables Infrastructure Group ‘C’ 16,548 — 6,700 Riverstone Energy 60,166 0.01 39,436 Ruffer 79,858 0.01 60,000 Starwood European Real Estate Finance 59,400 0.01 92,001 TwentyFour Income 114,771 0.02 ------2,668,762 0.45 ------FINLAND — 0.00% (0.00%) Industrial Metals & Mining — 0.00% (0.00%) 178,143 Talvivaara Mining 12,915 — ------ISLE OF MAN — 0.09% (0.00%) Oil & Gas — 0.01% (0.00%) 29,473 Exillon Energy 42,294 0.01 19,923 Hardy Oil & Gas 12,950 — ------55,244 0.01 ------Travel & Leisure — 0.06% (0.00%) 54,468 Playtech 355,948 0.06 ------Real Estate Investment & Services — 0.02% (0.00%) 214,685 Redefine International 118,613 0.02 ------Life Insurance — 0.00% (0.00%) 15,174 Hansard Global 15,174 — ------IRELAND — 0.91% (0.62%) Mining — 0.02% (0.04%) 742,792 Kenmare Resources 92,849 0.02 ------Construction & Materials — 0.60% (0.52%) 205,249 CRH 3,528,230 0.60 ------Food Producers — 0.06% (0.02%) 130,612 Group 339,852 0.06 ------Food & Drug Retailers — 0.04% (0.04%) 64,549 United Drug 232,441 0.04 ------Support Services — 0.19% (0.00%) 23,962 DCC 730,122 0.13 65,084 Grafton Group 376,185 0.06 ------1,106,307 0.19 ------ISRAEL — 0.00% (0.00%) Technology Hardware& Equipment — 0.00% (0.00%) 52,170 BATM Advanced Communications 9,130 — ------

32 Portfolio Statement continued

Holding/ Market % of Nominal Value Net Value Investment £ Assets LUXEMBOURG — 0.10% (0.06%) Chemicals — 0.08% (0.06%) 119,460 AZ Electronic Materials 481,065 0.08 ------Equity Investment Instruments — 0.02% (0.00%) 115,730 Bilfinger Berger Global Infrastructure 136,851 0.02 ------SPAIN — 0.39% (0.23%) Travel & Leisure — 0.39% (0.23%) 578,048 International Consolidated Airlines Group 2,309,880 0.39 ------SINGAPORE — 0.01% (0.01%) Electronic & Electrical Equipment — 0.01% (0.01%) 4,042 XP Power 65,157 0.01 ------SWITZERLAND — 0.14% (0.00%) Beverages — 0.14% (0.00%) 56,844 Coca-Cola HBC 849,249 0.14 ------UNITED ARAB EMIRATES — 0.01% (0.02%) Oil & Gas Producers — 0.00% (0.01%) Oil Equipment, Services & Distribution — 0.01% (0.01%) 54,899 Lamprell 83,172 0.01 ------Portfolio of investments 590,039,532 99.92

Net other assets 494,232 0.08 ------Total net assets £590,533,764 100.00% ------

All investments are admitted to an official stock exchange. * These are delisted securities and have been valued at the Manager’s best assessment of their fair value. Total purchases for the year: £49,414,028. Total sales for the year: £51,579,279.

33 Independent Auditor’s Report

Independent Auditor’s Report to the Unitholders of CAF UK Equitrack Fund (‘the Fund’) We have audited the financial statements of the CAF UK Equitrack Fund for the year ended 30 April 2014 set out on pages 36 to 45. The financial reporting framework that has been applied in their preparation is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice). This report is made solely to the Fund’s unitholders, as a body, in accordance with section 144 of the Charities Act 2011 (or its predecessors) and regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the Fund’s unitholders those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Fund and its unitholders, as a body, for our audit work, for this report, or for the opinions we have formed. Respective Responsibilities of the Manager and the Auditor As explained in the Statement of Manager’s Responsibilities set out on page 9, the Manager is responsible for the preparation of financial statements which give a true and fair view. We have been appointed as auditor under section 144 of the Charities Act 2011 and report to you in accordance with the regulations made under section 154 of that Act. Our responsibility is to audit, and express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. Scope of the Audit of the Financial Statements A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at http://www.frc.org.uk/auditscopeukprivate. Opinion on financial statements In our opinion the financial statements: • give a true and fair view of the state of the Fund’s affairs as at 30 April 2014 and of its incoming resources and application of resources for the year then ended; • have been properly prepared in accordance with UK Generally Accepted Accounting Practice; and • have been properly prepared in accordance with the Charities Act 2011.

34 Independent Auditor’s Report continued

Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Charities Act 2011 requires us to report to you if, in our opinion: • the information in the Manager’s Annual Report is inconsistent in any material respect with the financial statements; or • the Fund has not kept sufficient accounting records; 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.

Ravi Lamba For and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square London E14 5GL 24 June 2014 KPMG LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

35 Financial Statements

Statement of Total Return for the year ended 30 April 2014

30/04/14 30/04/13 Notes £ £ £ £ Income Net capital gains 2 36,069,616 68,189,180 Revenue 3 20,697,139 16,547,974 Expenses 4 (1,833,059) (1,411,888) Finance costs: Interest 6 (297) — ------Net revenue before taxation 18,863,783 15,136,086 Taxation 5 (810) (545) ------Net revenue after taxation for the year 18,862,973 15,135,541 ------Total return before distributions 54,932,589 83,324,721 Finance costs: Distributions 6 (18,862,973) (15,135,541) ------Change in net assets attributable to Unitholders from investment activities £36,069,616 £68,189,180 ------

Statement of Change in Net Assets attributable to Unitholders for the year ended 30 April 2014

30/04/14 30/04/13 £ £ £ £

Opening net assets attributable to Unitholders 556,642,422 221,398,268 Amounts received on creation of units 24,407,047 46,226,627 In-specie transfers 7 159,209 243,770,384 Amounts paid on cancellation of units (27,555,774) (23,768,372) ------(2,989,518) 266,228,639 Change in net assets attributable to Unitholders from investment activities 36,069,616 68,189,180 Unclaimed distributions — 27 Retained distribution on accumulation units 811,244 826,308 ------Closing net assets attributable to Unitholders £590,533,764 £556,642,422 ------

36 Financial Statements continued

Balance Sheet as at 30 April 2014

30/04/14 30/04/13 Notes £ £ £ £

ASSETS Investment assets 590,039,532 556,107,127 Debtors 8 3,961,190 3,768,137 Cash and bank balances 9 5,958,031 5,549,149 ------Total other assets 9,919,221 9,317,286 ------Total assets 599,958,753 565,424,413 ------LIABILITIES Investment liabilities — — Creditors 10 (633,087) (410,117) Distribution payable on distribution units (8,791,902) (8,371,874) ------Total other liabilities (9,424,989) (8,781,991) ------Total liabilities (9,424,989) (8,781,991) ------Net assets attributable to Unitholders £590,533,764 £556,642,422 ------

37 Notes to the Financial Statements

1. Accounting Policies (a) Basis of accounting The financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments and in accordance with UK Generally Accepted Accounting Practice and the Statement of Recommended Practice for authorised Funds issued by the IMA in October 2010. (b) Recognition of revenue Revenue from quoted equities and non-equity shares is recognised net of attributable tax credits when the security is quoted ex-dividend. Revenue from unquoted equity investments is recognised net of attributable tax credits when the dividend is declared. Underwriting commission is taken to revenue and recognised when the issue takes place, except where the Fund is required to take up all or some of the shares underwritten, in which case an appropriate proportion of the commission is deducted from the cost of those shares. Overseas revenue received after the deduction of Withholding tax is shown gross of taxation, with the taxation consequences shown within the taxation charge. Special dividends are treated as either revenue or capital depending on the facts of each particular case. All other Revenue is recognised on an accruals basis. (c) Treatment of expenses All expenses (other than those relating to the purchase and sale of investments and Stamp Duty Reserve Tax) are charged against revenue on an accruals basis. (d) Distribution Policy The policy is to distribute all available revenue, after deduction of those expenses which are chargeable in calculating the distribution. In order to conduct a controlled dividend flow, interim distributions will be at the Manager’s discretion, up to a maximum of the distributable revenue for the period. The Manager’s periodic fee is deducted from revenue for the purpose of calculating the distribution. The ordinary element of stock dividends is treated as revenue and forms part of the distribution. In the case of an enhanced stock dividend, the value of the enhancement is treated as capital and does not form part of the distribution. Distributions which have remained unclaimed by Unitholders for over six years are credited to the capital property of the Fund.

38 Notes to the Financial Statements continued

(e) Basis of valuation of investments All investments are valued at their fair value as at 12 noon on 30 April 2014, being the last working day of the accounting year. The fair value for non-derivative securities is bid market price, excluding any accrued interest. Where values cannot be readily determined, the securities are valued at the Manager’s best assessment of their fair value. (f) Taxation As the Fund is a registered charity it is not subject to UK Corporation Tax on revenue or capital gains and losses. (g) Exchange rates Transactions in foreign currencies are translated at the rate of exchange ruling on the date of the transaction. Where applicable, assets and liabilities denominated in foreign currencies are translated into Sterling at the rates of exchange ruling at 12 noon on 30 April 2014, being the last working day of the accounting year. 2. Net capital gains

30/04/14 30/04/13 £ £ The net capital gains during the year comprise: Non-derivative securities 36,083,379 68,197,057 Currency losses (3,093) (7) Transaction charges (10,670) (7,870) ------Net capital gains 36,069,616 68,189,180 ------

3. Revenue

30/04/14 30/04/13 £ £ UK Franked dividends 17,278,313 14,044,897 UK Unfranked dividends 4,631 48,783 Non-taxable overseas dividends 759,648 588,566 Property distributions 183,782 183,036 Stock dividends 2,443,278 1,677,107 Underwriting commission 16,703 4,483 Bank Interest 10,784 1,102 ------20,697,139 16,547,974 ------

39 Notes to the Financial Statements continued

4. Expenses

30/04/14 30/04/13 £ £ Payable to the Manager, associates of the Manager and agents of either of them: Manager’s periodic fee 1,735,523 1,334,402 Registration fees 6,186 5,759 ------1,741,709 1,340,161 ------Payable to the Trustee, associates of the Trustee and agents of either of them: Trustee’s fees 69,409 52,497 Safe custody fees 5,880 3,672 ------75,289 56,169 ------Other expenses: Audit fee 13,315 12,965 VAT on Audit fee 2,663 2,593 Legal fee 83 — ------16,061 15,558 ------Total expenses 1,833,059 1,411,888 ------

5. Taxation (a) Analysis of taxation charge in year

30/04/14 30/04/13 £ £ Overseas tax 810 545 ------Current tax [note 5(b)] 810 545 Deferred tax [note 5(c)] — — ------Total taxation 810 545 ------

(b) Factors affecting taxation charge for the year As the Fund is a registered charity it is not subject to UK Corporation Tax on revenue or capital gains and losses. Current tax differs from taxation assessed on net revenue before taxation due to overseas tax as stated above. (c) Provision for deferred tax There is no deferred tax provision in the current or preceding year.

40 Notes to the Financial Statements continued

6. Finance costs Distributions The distributions take account of revenue received on the creation of units and revenue deducted on the cancellation of units and comprise:

30/04/14 30/04/13 £ £ Interim distribution 9,702,494 8,605,855 Final distribution 9,189,124 8,740,982 ------18,891,618 17,346,837 Add: Revenue deducted on cancellation of units 144,069 207,707 Less: Revenue received on In-specie creation of units (1,179) (1,978,792) Less: Revenue received on creation of units (171,535) (440,211) ------Distributions for the year 18,862,973 15,135,541 Interest Bank overdraft interest 297 — ------Total finance costs 18,863,270 15,135,541 ------

7. In-specie transfers An in-specie transfer is the issue of units in the Fund, in return for assets transferred into the Fund. In-specie transfers for the year are as follows:

30/04/14 30/04/13 £ £ National Trust 159,209 243,770,384 ------159,209 243,770,384 ------

8. Debtors

30/04/14 30/04/13 £ £ Amounts receivable for creation of units 506,016 6,817 Accrued revenue 3,452,605 3,724,611 Recoverable overseas tax 2,569 13,393 Recoverable Income Tax — 23,316 ------3,961,190 3,768,137 ------

41 Notes to the Financial Statements continued

9. Net uninvested cash

30/04/14 30/04/13 £ £ Cash and bank balances 5,958,031 5,549,149 ------Net uninvested cash 5,958,031 5,549,149 ------

10. Creditors

30/04/14 30/04/13 £ £ Amounts payable for cancellation of units — 250,000 Purchases awaiting settlement 464,775 — Accrued expenses 168,312 160,117 ------633,087 410,117 ------

11. Contingent liabilities and outstanding commitments Contingent liabilities and outstanding commitments at the balance sheet date were:

30/04/14 30/04/13 £ £ Commitment on rights issues 342,401 — ------342,401 — ------

12. Risk in relation to financial instruments The Fund’s investment objective is stated on page 10. In pursuing its objective, the Fund holds financial instruments which expose it to various types of risk. The main risks, and the Manager’s policy for managing these risks, which were applied consistently throughout the current and preceding year, are set out below. (a) Credit and liquidity risk Credit risk is the risk of suffering loss due to another party not meeting its financial obligations. The primary source of this risk to the Fund is for trade counterparties to fail to meet their transaction commitments. This risk is managed by appraising the credit profile of financial instruments and trade counterparties. Liquidity risk relates to the capacity to meet liabilities. The primary source of this risk to the Fund is the liability to Unitholders for any cancellation of units. This risk is minimised by holding cash and readily realisable securities and via access to overdraft facilities.

42 Notes to the Financial Statements continued

(b) Market risk Market risk arises mainly from uncertainty about future prices. The primary source of this risk to the Fund is the potential movement in the value of financial instruments held as a result of price fluctuations. The Manager adheres to the investment guidelines and borrowing powers established in the Governing Scheme Document and the Scheme Particulars. In this way, the Manager monitors and controls the exposure to risk from any type of security, sector or issuer. The Fund may also use derivative instruments to mitigate risk and reduce costs. These instruments are not utilised for speculative purposes. Derivative instruments were not utilised during the current or preceding year. (c) Foreign currency risk Foreign currency risk is the risk of movements in the value of overseas financial instruments as a result of fluctuations in exchange rates. At the balance sheet date, the Fund had no significant exposure to currencies other than Sterling (30 April 2013: same). (d) Interest rate risk Interest rate risk is the risk of movements in the value of financial instruments as a result of fluctuations in interest rates. The Fund’s only interest bearing financial instruments were its bank balances and overdraft facilities as disclosed in note 9. Cash is deposited, and overdraft facilities utilised, on normal commercial terms and earn or bear interest based on LIBOR or its overseas equivalent. (e) Derivative risk — Sensitivity analysis Derivative risk arises from uncertainty about future market movements. This risk is managed by the policies shown within Market risk. At the balance sheet date, no derivatives were held that could impact the Fund in a significant way (30 April 2013: same). (f) Fair value The fair value of a financial instrument is the amount for which it could be exchanged between knowledgeable, willing parties in an arm’s length transaction. There is no significant difference between the value of the financial assets and liabilities, as shown in the financial statements, and their fair value.

43 Notes to the Financial Statements continued

13. Portfolio transaction costs

30/04/14 30/04/13 £ £ £ £

Analysis of total purchase costs: Purchases before transaction costs 49,391,018 298,410,082 Commissions 13,388 10,057 Taxes 9,622 4,267 ------Total purchase costs 23,010 14,324 ------Gross purchases total 49,414,028 298,424,406 ------Analysis of total sale costs: Sales before transaction costs 51,588,053 31,139,389 Commissions (8,477) (8,583) Fees (297) (608) ------Total sales costs (8,774) (9,191) ------Total sales net of transaction costs 51,579,279 31,130,198 ------

Included in purchases are investments acquired as part of in-specie creations of £160,388 (30 April 2013: £245,749,176) which are not subject to commission or tax.

14. Unit classes The Fund currently has one unit class. The annual management charge on this unit class can be found on page 49. The net asset value of this unit class, the net asset value per unit and the number of units in this class are given in the comparative table on page 48. The distributions per unit class are given in the distribution tables on page 46.

44 Notes to the Financial Statements continued

15. Ultimate controlling party and related party transactions The Manager and Corporate Trustee are regarded as controlling parties of the Fund by virtue of having the ability to act in concert in respect of Fund operations. The ultimate controlling parties of the Manager and Corporate Trustee are Legal & General Group Plc and The Royal Bank of Scotland Plc, respectively. These entities and their subsidiaries are also related parties of the Fund. Legal & General (Unit Trust Managers) Limited acts as principal on all the transactions of units in the Fund. The aggregate monies received through creations or paid on cancellations are disclosed in the Statement of Change in Net Assets attributable to Unitholders. At the year end, the Manager and its associates held none (none as 30 April 2013) of the Fund’s units in issue. There were no units held by the Trustee or its associates. Details of all other material related party transactions during the year and any payment amounts outstanding at the balance sheet date are disclosed in notes 4, 6, 8 and 10 to the financial statements, the Statement of Change in Net Assets attributable to Unitholders and the Portfolio Statement. Within note 10, accrued expenses and bank overdraft interest (including amounts due to associates and agents) of £6,846 (£6,886 as 30 April 2013) are due to the Trustee and £145,488 (£137,673 as at 30 April 2013) are due to the Manager.

16. Post balance sheet market movements As at the close of business on the balance sheet date the net asset value per distribution unit was 72.34p. The net asset value per distribution unit as at 12 noon on 23 June 2014 was 72.87p. This represents an increase of 0.73% from the year end value.

45 Distribution Tables

Distribution Tables for the year ended 30 April 2014 Group 1: units purchased prior to a distribution period. Group 2: units purchased during a distribution period. Equalisation is the average amount of revenue included in the purchase price of all Group 2 units and is refunded to the holders of these units as a return of capital. As capital it is not liable to Income Tax but must be deducted from the cost of units for Capital Gains Tax purposes.

Interim dividend distribution in pence per unit Period 01/05/13 to 31/10/13 Net Distribution Distribution Revenue Equalisation 31/12/13 31/12/12

Distribution Units Group 1 1.1807 — 1.1807 1.0872 Group 2 0.5583 0.6224 1.1807 1.0872 Accumulation Units Group 1 1.5429 — 1.5429 1.3743 Group 2 0.7031 0.8398 1.5429 1.3743

Final dividend distribution in pence per unit Period 01/11/13 to 30/04/14 Net Distribution Distribution Revenue Equalisation 30/06/14 30/06/13

Distribution Units Group 1 1.1264 — 1.1264 1.0678 Group 2 0.8302 0.2962 1.1264 1.0678 Accumulation Units Group 1 1.4961 — 1.4961 1.3738 Group 2 1.0114 0.4847 1.4961 1.3738

46 Fund Facts

Total Expense Ratio

30 Apr 14 0.32% 30 Apr 13 0.32%

The Total Expense Ratio is the ratio of the Fund’s operating costs (excluding overdraft interest) to the average net assets of the Fund.

47 Performance Record

Net Asset Values

Net Asset Net Asset Number Of Accounting Value Of Value Per Units Date Fund Unit In Issue

30 Apr 12 Distribution Units £197,817,879 59.94p 330,048,540 Accumulation Units £23,580,389 75.76p 31,123,652

30 Apr 13 Distribution Units £532,781,531 67.96p 783,960,372 Accumulation Units £23,860,891 88.81p 26,866,178

30 Apr 14 Distribution Units £564,627,401 72.34p 780,498,511 Accumulation Units £25,906,363 97.57p 26,550,316

Unit Price Range and Net Revenue

Highest Lowest Net Year Offer Bid Revenue

Distribution Units 2009 55.94p 35.94p 1.7281p 2010 62.51p 50.62p 1.6847p 2011 64.21p 52.15p 1.7768p 2012 62.96p 55.15p 2.1291p 2013 73.60p 63.56p 2.2485p 2014(1) 73.93p 69.53p 1.1264p

Accumulation Units 2009 65.60p 40.66p 1.9742p 2010 75.45p 60.26p 1.9900p 2011 77.73p 63.76p 2.1594p 2012 81.01p 69.71p 2.6688p 2013 96.42p 81.77p 2.9167p 2014(1) 98.19p 92.35p 1.4961p

(1)The above table shows the highest offer and lowest bid prices to 30 April 2014 and the net revenue per unit to 30 June 2014. Past performance is not a guide to future performance. The price of units and any income from them may go down as well as up. Exchange rate changes may cause the value of any overseas investments to rise or fall.

48 Constitution and General Information

Constitution Launch date: 7 February 2005 Period end dates for distributions: 30 April, 31 October Distribution dates: 30 June, 31 December Minimum initial lump sum investment: £1,000 Valuation point: 12 noon Management charge: Annual 0.25% Initial charge: Nil Pricing and Dealing The prices are available on the internet at https://www.cafonline.org/charity-finance-- fundraising/investments/tools-and-guides/fund-prices/uk-equitrack- fund.aspx Buying and Selling Units Applications for and redemption of units from investors who have an existing relationship with Legal & General Investment Management Limited can be made either by telephone to the unit trust dealers on 0370 050 0634, (alternative 0870 050 0634) between 8:30am and 6pm, on business days, or in writing, addressed to: Legal & General (Portfolio Management Services) Limited Corporate Accounts Team (CAT) PO Box 6080 Wolverhampton WV1 9RB Enquiries from all other investors can be made to CAF by writing to: Charities Aid Foundation CAF UK Equitrack Fund Saving and Investment Services Team 25 Kings Hill Avenue Kings Hill West Malling Kent ME19 4TA Prospectus and Manager’s Reports The Manager will send to all persons on the Unitholder Register annual and interim reports. Copies of the Prospectus and the most recent annual or interim reports are available free of charge by telephoning 0370 050 0955 or by writing to the Manager. Do you have difficulty in reading information in print because of a disability? If so, we can help. We are able to produce information for our clients in large print and braille. If you would like to discuss your particular requirements, please contact us on 0370 050 0955. Call charges will vary. We may record and monitor calls.

49 Constitution and General Information continued

Principal Address of the Fund: CAF UK Equitrack Fund Charities Aid Foundation 25 Kings Hill Avenue Kings Hill West Malling Kent ME19 4TA Corporate Trustee National Westminster Bank plc Trustee and Depositary Services 135 Bishopsgate London EC2M 3UR Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority Manager Legal & General (Unit Trust Managers) Limited Registered in England and Wales No. 01009418 Registered office: One Coleman Street, London EC2R 5AA Authorised and regulated by the Financial Conduct Authority Investment Adviser Legal & General Investment Management Limited One Coleman Street, London EC2R 5AA Authorised and regulated by the Financial Conduct Authority Advisory Board Members Peter Moon (Chairman) Elizabeth Fernando Mark Fleming Registrar Legal & General (Portfolio Management Services) Limited P.O. Box 6080 Wolverhampton WV1 9RB Authorised and regulated by the Financial Conduct Authority

50 Constitution and General Information continued

Independent Auditor KPMG LLP 15 Canada Square London E14 5GL Custodian The Northern Trust Company 50 Bank Street Canary Wharf London E14 5NT

51

52

53

Authorised and regulated by the Financial Conduct Authority Legal & General (Unit Trust Managers) Limited Registered in England and Wales No. 01009418 Registered office: One Coleman Street, London EC2R 5AA www.legalandgeneral.com CAF0614

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