interim report and accounts

interim report and accounts six months to 30 April 2015 (unaudited) The Affirmative Equity Fund for Charities The Affirmative Fixed Interest Fund for Charities The Affirmative Corporate Bond Fund for Charities The Affirmative Deposit Fund for Charities affir mative

1 Report of the investment manager 3 Responsibilities Affirmative Equity Fund for Charities 5 Investment objectives and policy Risk profile Risk warning Net asset value/fund size 6 Statement of total return Statement of movement in unitholders net assets Balance sheet 7 Summary of investments and other assets 8 Portfolio statement 10 Summary of material portfolio changes 11 Distribution Price and income history Performance record Total expense ratios 12 Notes to the accounts Affirmative Fixed Interest Fund for Charities 14 Investment objectives and policy Risk profile Risk warning 15 Net asset value/fund size Statement of total return Statement of movement in unitholders net assets 16 Balance sheet Summary of investments and other assets 17 Portfolio statement 18 Summary of material portfolio changes Analysis of credit rating 19 Distribution Price and income history Performance record Total expense ratios 20 Notes to the accounts Affirmative Corporate Bond Fund for Charities 22 Investment objectives and policy Risk profile Risk warning 23 Net asset value/fund size Statement of total return Statement of movement in unitholders net assets 24 Balance sheet Summary of investments and other assets 25 Portfolio statement 28 Summary of material portfolio changes Analysis of credit rating 29 Distribution Price and income history Performance record Total expense ratios 30 Notes to the accounts Affirmative Deposit Fund for Charities 32 Investment objectives and policy Risk profile Risk warning 33 Statement of total return Balance sheet Total expense ratios 34 Income and net asset value history Distributions paid Summary of deposits 35 Summary of deposits by credit rating Summary of deposits by banking group 36 Notes to the accounts

Report of the investment manager Market movements and performance Cash The base rate has remained unchanged at 0.5% since March 2009. 3 month rates opened and closed at the low of 0.50%, peaking at 0.52%. 12 month rates opened at the high of 0.98% and closed at the low of 0.90%. Over the half-year under review, the Affirmative Deposit Fund provided a gross average AER distribution of 0.81% (0.54% after expenses of 0.27% pa, with 0.50% being the rate payable at the end of April). The AER of 1 week LIBID for the period was 0.36%. Fixed interest The 10 year US Treasury yield began the half year under review at 2.34%, traded between 2.39% in November and 1.64% in January before rebounding to 2.04% at the end of April. UK gilt yields opened at 2.25%, edged up to a high of 2.27% in November, before falling to a low of 1.33% in January. However, prices did not hold and by March the yield was close to 2%. Following a further rally and setback the yield closed the half year at 1.83%. The yield curve flattened, with 2 year gilt yields down 12bp at 0.54% whilst the 30 year gilt yield was down 44bp at 2.54%. The average spread of corporate bond yields over gilts opened the six months under review at +117bp, peaked at +126bp and fell to +102bp before closing at +108bp. The spread between AAA and BBB rated bonds opened at +150bp, traded between +160bp and +128bp, closing at +139bp. For the half year the Affirmative Fixed Interest Fund total return (+4.5% after annualised expenses of 0.35%) lagged that of the Composite Index (+5.0%).The Affirmative Corporate Bond Fund produced a total return of +4.5% (after expenses of 0.39%) which lagged both its Benchmark Index (+5.0%). Equities The UK equity markets began the period under review poorly falling almost 5% by the middle of December. However, it then rallied strongly, rising almost 16% from the low before easing back to complete the half year up 7.3% for a total return of 9.2%. This was not very different from overseas equities which rose 8.5% for a total return of 9.7%, led by Japan. Over the half year sterling rose against the (+7.1%) and the (+2.0%), but fell against the $ (-4.0%). The main positive relative contributors were the Media, Travel & Leisure and Life Insurance sectors, whilst the main negative contributors were Oil Producers, Mining and Multi Utilities. Smaller stocks continued to perform better than larger companies with total returns of +14.1% and +8.3% respectively. Over the six months to 30 April the total return of the Affirmative Equity Fund was +9.6% after annualised expenses of 0.45%. This was ahead of the total return on the Composite Index (+9.3%) but behind the Index adjusted to exclude certain stocks on ethical grounds (+10.0%). Economic overview The outlook for global economic growth remains stable, with strong growth in retail sales in advanced economies balanced against weaker than expected manufacturing data. Recent European economic data have been ahead of expectations, whilst US data have been disappointing. However, the absolute level of growth remains higher in the US, with year on year GDP growth in the first quarter of 3% compared to 1% for the Eurozone. US economic growth remains robust, with the dip in GDP growth to 0.2% in the first quarter seen as a temporary, weather-related, phenomenon. Indeed, the first-quarter slowdown was less dramatic than the fall in GDP seen in the equivalent 2014 quarter, which was also both weather-related and short-lived. Growth in consumer spending appears weak in nominal terms due to low consumer price inflation, but in real terms the pace is reasonable. The Purchasing Managers Index (PMI) continues to point towards strong growth. Eurozone inflation reached an important turning point in April when the year-on-year change in the Consumer Price Index came in at precisely zero. This followed four months of deflation, which had helped to justify the European Central Bank s Quantitative Easing measures. When these were announced in January, the ECB president Mario Draghi stated that they were intended to be carried out until end- September 2016 and will in any case be conducted until we see a sustained adjustment in the path of inflation. Inflation is likely to move closer to the ECB s target of just under 2% over the next 12 months, as the earlier low comparisons begin to fall out of the numbers. The IMF expects GDP growth in Asia-Pacific to hold steady at 5.6% this year before slowing marginally in 2016. Despite slower worldwide economic growth, Asian countries have maintained impressive growth rates through a gradual shift from exports to domestic consumption. Since the region is a net oil importer, the IMF expects the impact of lower oil prices to offset the effects of tighter monetary conditions, which would help to reduce potential capital outflows if and when the US Federal Reserve raises interest rates. After solid if unspectacular GDP growth of just under 2% in 2012 and 2013 in the early stages of Abenomics, Japan s economy stalled in 2014 with output falling by 0.1%. Last month the Bank of Japan cut its growth forecast for the current fiscal year to 2.0% from 2.1% and for inflation to 0.8% from 1.0%. For the 2016-17 fiscal year, expectations are for growth to fall to 1.5% but inflation to rise to the 2.0% target. The outlook for the UK economy has appeared less certain but with survey data showing that activity remains at high levels, growth in 2015 should be similar to that of last year. GDP in the first quarter of the year showed growth of only 0.4%, lower than survey data had predicted, but 2.9% higher than the same quarter last year. The labour market continues to be strong. Average weekly earnings excluding bonuses were growing at 2.7% pa in April, up from 2.3% the previous month. The unemployment rate has continued to decline and is now at 5.5%. In its latest Inflation Report, the Bank of England lowered its forecasts of GDP growth from 2.9% to 2.6% for both 2015 and 2016 with a further drop to 2.5% rather than 2.7% in 2017. Productivity has continued to disappoint since the financial crisis and both Bank and Office for Budget Responsibility projections rely on productivity growth increasing. Should this view prove incorrect, the UK is likely to experience both lower growth and higher inflation than it currently expects. 1

Report of the investment manager Economic overview cont. The General Election result was a surprise to most. The new government is pledged to implement a number of spending and tax cuts but the economic impact will be difficult to determine before details are revealed in the budget. There is also a pledge to hold a referendum on European Union membership by the end of 2017. There is a broad political consensus in favour of membership, depending on the terms, but recent experience suggests predicting the electorate s decision will be difficult. A period of uncertainty is likely which may adversely affect business and consumer confidence. Market outlook Both the Bank of Japan (BOJ) and the European Central Bank (ECB) continue their policies of Quantitative Easing (QE), but their impact on growth has been less than expected. The Federal Reserve Open Market Committee has noted improvements in the US economy and most committee members anticipate a rate rise later this year. UK base rate is unlikely to be raised before US interest rates indicating that longer term deposits remain attractive where credit quality can be maintained. investment, it seems likely that the result will be a slower trend rate of economic growth. In addition, the economy is likely to reach full capacity at lower levels of growth in both GDP and wages and inflationary pressures could result. This would certainly put upward pressure on bond yields, but the outlook for equities may also be mixed. Lower productivity growth implies lower revenue growth and a potential squeeze on margins if labour costs rise. However, in the US at least there is a low correlation between the cyclically adjusted PE ratio and future productivity trends. Indeed, a lower level of technological innovation could benefit incumbent companies which are more likely than new competitors to be listed on stock exchanges, though any positive impact is unlikely to be sustainable. Nevertheless, equities remain the preferred asset class over the medium term as they offer exposure to economic growth, valuations are not excessively expensive, and on a yield basis they continue to be attractive compared to bonds. Epworth Investment Management Ltd Investment Manager 22 June 2015 Bond markets continue to be relatively volatile. Yields were trending higher as investors began to look towards central bank interest rate rises in the US and UK. However, the escalating Greek crisis has seen a return of the flight to quality and a renewed rally in bond prices. Further volatility can be expected, but gilt yields appear unsustainable on a medium term basis. High quality corporate bonds remain our favoured fixed interest asset, although the yield premium over gilts can be expected to widen modestly. After reaching all-time highs in April, overseas equities have subsequently retreated in sterling terms. Investors continue to confront the dilemma that both equities and bonds appear expensive by historical standards, while returns on cash are minimal given low interest rates. The Eurozone provided a dramatic example of the impact of changing sentiment. The improving economic backdrop was offset by worries of contagion from the Greek crisis. The result was that 10-year German government bond yields rose from just 0.05% in mid-april to 0.95% at one stage, whilst equity prices fell 10%. Japanese equities have held up fairly well in local terms thanks to further QE and a weaker yen, which boosts foreign earnings. However, the risk of further yen weakness will limit its attractions. Conversely, the prospect of US interest rate rises is supporting the US dollar and equity prices. Tighter US monetary policy is widely seen as a bigger threat to equities in Pacific and emerging markets countries, although the longer term growth prospects remain attractive. Sterling has been strong in recent months helped by the continued commitment to QE of both the ECB and the BOJ together with the growing risk of a disorderly Greek exit from the Eurozone. However, given the relative strength of the US economy and the weak UK balance of payments position, the possibility of profit taking in sterling cannot be ignored. The relative valuation attractions of UK equities remain, but only a small overweight position seems justified. UK equity prices have also fallen sharply from the April peak, but still appear close to fully valued given that earnings are expected to fall 11% this year, the third successive annual decline. A 13% rebound is currently the consensus view for 2016. Although the changing nature of employment markets since the financial crisis has muted productivity growth, it had already begun to decline beforehand. Potential causes include a fall in both the number of new firms, the rate of new job creation and job hording. Unless the long term structural issues are addressed, for example through effective public 2

Responsibilities The Schemes of the Charity Commissioners, made under Sections 96-99 of the Charities Act 2011, dated 6 June 2001, 14 August 2006 and 22 September 2009 define the responsibilities, duties and powers of the Trustee and Manager. Responsibilities of the Corporate Trustee The Corporate Trustee is required by the Schemes to: (a) (b) (c) (d) (e) (f) (g) ensure the Manager s compliance with the Schemes and the Scheme Particulars; appoint and supervise the Registrar; safeguard the assets of the Fund and collect all income due to the Fund; create and cancel units in accordance with the instructions of the Manager; make distributions to Participating Charities; prepare an annual report and inform the Charity Commission if it is not satisfied with the Manager s compliance with the Schemes or Scheme Particulars; be responsible for any winding up of the Funds. Responsibilities of the Manager The Manager is required by the Schemes to: (a) (b) (c) (d) (e) (f) (g) (h) (i) instruct the Trustee of creation and cancellation of units; manage the investments of the Fund; carry out regular valuations of the unitised Funds and ensure units are correctly priced; make and revise the written statement of the investment policy of the Funds; make and revise the Scheme Particulars; keep a record of units purchased or sold on behalf of the Trustee, or in the case of the Affirmative Deposit Fund keep a daily record the receipt and repayment of deposits; make all records of the Funds available for inspection by the Trustee; prepare a report and accounts of the Fund for each accounting period; appoint the auditor of the Fund; The Manager is required in accordance with UK Generally Accepted Accounting Principles to: select suitable accounting policies that are appropriate for the Funds and apply them on a consistent basis; comply with the disclosure requirements of the Charities (Accounts and Reports) Regulations 2008; follow law and UK accounting standards (UK Generally Accepted Accounting Practice); keep proper accounting records which enable them to demonstrate that the accounts as prepared comply with the above requirements; make judgements and estimates which are reasonable and prudent; prepare the accounts on the basis that the Funds will continue in operation unless it is inappropriate to do presume this. The Manager is required to manage and administer the Funds in accordance with the Schemes, maintain accounting records and take reasonable steps for the prevention and detection of fraud and other irregularities. The Trustee has appointed the Manager as Registrar to the Funds. 3

Approval of the financial statements The financial statements of the Affirmative Equity Fund for Charities, the Affirmative Fixed Interest Fund for Charities, the Affirmative Corporate Bond Fund for Charities and the Affirmative Deposit Fund for Charities were approved by the Manager on 16 June 2014 and are signed on behalf of the Manager by: William T Seddon Director, Epworth Investment Management Limited Marina Phillips Secretary, Epworth Investment Management Limited 15 July 2015 4

Affirmative Equity Fund for Charities Investment objectives and policy The Fund will seek to maximise long term total returns consistent with commercial prudence, diversification and risk management through a portfolio investing in UK Equities (80%-100%), Overseas Equities (0%- 20%), Property (0%-5%) and Cash and near cash (0%-5%). This may be achieved through direct holdings or pooled investment vehicles. Investment will be made in well run companies which seek to enhance shareholder value and are thereby likely to provide above average returns. Such companies are characterised by financial strength, above average management teams and will normally (but not exclusively) pursue long term sustainable growth strategies in the wider interests of all parties, including owners, lenders, employees, suppliers, customers/ clients and the local and wider community. The Fund will avoid investments in companies where business is wholly or mainly involved in alcohol, armaments, gaming, pornography or tobacco. In the view of the Fund Manager there will be no adverse impact on long term investment returns due to any exclusions on these grounds. No sector of the market will be automatically included or excluded but the portfolio will be widely diversified to capture exposure to all significant sectors of the market. The Fund Manager will engage with those companies where exclusion from the portfolio is not appropriate but where either there is minor exposure to the avoided sectors or other ethical issues such as environmental performance, corporate governance and social justice are raised. The Fund Manager will vote direct shareholdings in line with the Fund s overall ethical policy wherever practicable. The benchmark against which the Fund s return will be monitored is a composite index comprising the Epworth proprietary UK ethical index (90%) and overseas equities (10%). The Fund will have a yield which reflects the prevailing yield of a composite of UK equities (90%) and overseas equities (10%). The Fund may invest in the Affirmative Deposit Fund for Charities and the Epworth Investment Fund European sub-fund, of which the Manager is the fund manager. Any management charges incurred in this respect are refunded to the Fund by the Manager. Risk profile The fund has little exposure to credit or cash flow risk, and there are no borrowings or unlisted securities of a material nature and therefore liquidity risk is low. The main risks to its financial instruments are market price and currency risk. The Manager reviews the policies for managing these risks in order to follow and achieve the Investment Objective as summarised above. Risk warning The Affirmative Equity Fund for Charities is designed for long-term investors. The value of and the income from units in the funds can and do fall, as well as rise, and as a result you may not get back the amount originally invested. Past performance is no guarantee of future returns. Net asset value/fund size Net asset Net asset value Units in issue pence per unit 31 October 2010 46,994,940 43,574,449.00 107.70 31 October 2011 50,889,010 48,546,088.56 104.80 31 October 2012 51,098,712 46,424,192.99 110.10 31 October 2013 70,075,358 52,927,941.96 132.40 31 October 2014 74,827,547 57,085,060.07 131.10 30 April 2015 81,726,004 57,755,855.95 141.50 5

Affirmative Equity Fund for Charities Statement of total return For the six months ended 30 April 2015 (unaudited) Note Net gains on investments 2 6,040 1,385 Income 3 1,336 1,144 Expenses 4 (178) (158) Net income 1,158 986 Total return before distributions 7,198 2,371 Finance costs: Distributions 7 (1,155) (997) Change in net assets attributable to unitholders 6,043 1,374 Statement of change in unitholders net assets For the six months ended 30 April 2015 (unaudited) 000s 000s Net assets at start of period 74,828 70,075 Amounts receivable on creations of units 2,637 3,921 Amounts payable on cancellation of units (1,782) (760) 75,683 73,236 Change in net assets attributable to unitholders 6,043 1,374 Net assets at end of period 81,726 74,610 Balance sheet as at 30 April 2015 (unaudited) Assets Note Portfolio of investments 80,962 74,105 Debtors 8 364 150 Bank balances 9 1,244 1,188 Total assets 82,570 75,443 Liabilities Creditors 10 (35) (39) Distribution payable (809) (576) Total liabilities (844) (615) Net assets attributable to unitholders 81,726 74,828 6

Affirmative Equity Fund for Charities Summary of investments and other assets As at 30 April 2015 (unaudited) Market value Fund 31/10/2014 Market value 31/10/2014 Fund 000s % 000s % Oil & Gas Producers 9,707 12.1 9,550 12.9 Oil Equipment & Services 104 0.1 240 0.3 Chemicals 617 0.8 508 0.7 Mining 4,343 5.4 4,316 5.8 Construction & Materials 545 0.7 681 0.9 General Industrials 714 0.9 615 0.8 Electronic & Electrical Equipment 343 0.4 329 0.4 Industrial Engineering 780 1.0 752 1.0 Industrial Transportation 301 0.4 246 0.3 Support Services 3,652 4.5 3,197 4.3 Beverages 358 0.4 335 0.5 Food Producers 785 1.0 685 1.0 Household Goods & Home Construction 3,269 4.0 2,482 3.4 Personal Goods 2,226 2.7 1,847 2.5 Healthcare Equipment & Services 802 1.0 450 0.6 Pharmaceuticals & Biotechnology 8,096 10.0 7,414 10.0 Food & Drug Retailers 1,076 1.3 840 1.1 General Retailers 1,612 2.0 1,511 2.0 Media 3,486 4.3 2,774 3.7 Travel & Leisure 3,005 3.7 2,581 3.5 Fixed Line Telecommunications 1,875 2.3 1,451 2.0 Mobile Telecommunications 2,959 3.7 2,574 3.5 Electricity 716 0.9 698 0.9 Gas Water & Multiutilities 2,822 3.5 2,788 3.8 Banks 8,204 10.1 7,772 10.5 Non-life Insurance 275 0.3 368 0.5 Life Insurance 4,152 5.1 3,524 4.7 Real Estate Investment Trusts 1,414 1.7 1,072 1.4 Real Estate Investment Services 673 0.8 518 0.8 Financial Services 1,545 1.9 1,089 1.5 Equity Investment Instruments 1,392 1.7 1,877 2.5 Non-equity Investment Instruments - - - - Software & Computer Services 722 0.9 605 0.8 Technology Hardware & Equipment 641 0.8 492 0.7 Overseas 7,751 9.6 7,924 10.7 80,962 100.0 74,105 100.0 Net cash 764 723 Total value of fund 81,726 74,828 7

Affirmative Equity Fund for Charities Portfolio statement as at 30 April 2015 (unaudited) Market value Fund Holding 000s % Oil & Gas Producers BG Group 133,400 1,577 1.9 BP 633,400 2,978 3.7 Enquest 140,000 73 0.1 ishares S&P Global Energy 12,200 309 0.4 Premier Oil 58,000 101 0.1 Royal Dutch Shell B 216,100 4,523 5.6 Tullow Oil 35,100 145 0.2 9,707 12.0 Oil Equipment & Services Wood Group 15,130 104 0.1 104 0.1 Chemicals Croda International 11,330 321 0.4 Johnson Matthey 8,865 296 0.4 617 0.8 Mining Anglo American 48,500 536 0.7 BHP Billiton 76,300 1,191 1.5 Glencore 371,000 1,151 1.4 Randgold Resources 3,800 189 0.2 Rio Tinto 44,250 1,276 1.6 4,343 5.4 Construction & Materials CRH 29,800 545 0.7 545 0.7 General Industrials Rexam 28,290 163 0.2 Smith (DS) 108,000 378 0.5 Smiths Group 15,100 173 0.2 714 0.9 Electronic & Electrical Equipment Oxford Instruments 13,800 128 0.1 Spectris 10,000 215 0.3 343 0.4 Industrial Engineering IMI 14,800 185 0.3 Rotork 10,700 253 0.3 Spirax-Sarco 5,296 179 0.2 Weir Group 8,700 163 0.2 780 1.0 Industrial Transportation BBA Aviation 61,000 209 0.3 Royal Mail 19,771 92 0.1 301 0.4 Market value Fund Holding 000s % Support Services Aggreko 9,009 149 0.2 Ashtead Group 41,800 471 0.5 Bunzl 14,010 258 0.3 Capita 26,400 302 0.4 Diploma 32,379 257 0.3 Experian 41,500 484 0.6 Hays 190,000 292 0.4 Intertek Group 6,500 170 0.2 Regus 120,000 299 0.4 RWS Holdings 117,500 161 0.2 Sthree 50,000 186 0.2 Wolseley 16,100 623 0.8 3,652 4.5 Beverages Britvic 30,800 224 0.3 Coca-Cola HBC 9,710 134 0.1 358 0.4 Food Producers Associated British Foods 16,900 483 0.6 Hilton Food Group 41,000 176 0.2 Tate & Lyle 21,200 126 0.2 785 1.0 Household Goods & Home Construction Berkeley Group 15,920 401 0.5 Galliford Try 25,000 376 0.5 Gleeson 41,000 160 0.2 Persimmon 33,040 561 0.6 Reckitt Benckiser 30,400 1,771 2.2 3,269 4.0 Personal Goods Burberry Group 18,400 321 0.4 Ted Baker 8,863 253 0.3 Unilever (UK) 57,650 1,652 2.0 2,226 2.7 Healthcare Equipment & Services Dignity 15,200 309 0.4 Smith & Nephew 44,200 493 0.6 802 1.0 Pharmaceuticals & Biotechnology Astrazeneca 63,100 2,837 3.5 GlaxoSmithKline 238,100 3,605 4.5 Shire 25,700 1,371 1.7 The Biotech Growth Trust 38,000 283 0.3 8,096 10.0 Food & Drug Retailers Morrison (WM) 65,400 122 0.2 Sainsbury (J) 69,100 188 0.2 Tesco 346,800 766 0.9 1,076 1.3 8

Affirmative Equity Fund for Charities Portfolio statement continued as at 30 April 2015 (unaudited) Market value Fund Holding 000s % General Retailers Dunelm Group 15,000 135 0.2 Kingfisher 77,700 273 0.3 Marks & Spencer Group 31,600 175 0.2 Next 10,300 757 1.0 WH Smith 19,000 272 0.3 1,612 2.0 Media ITV 236,800 600 0.7 M&C Saatchi 60,000 195 0.2 Next Fifteen Communications 100,000 176 0.2 Pearson 28,150 371 0.5 Reed Elsevier 61,300 663 0.8 Sky 43,200 465 0.6 WPP 66,600 1,016 1.3 3,486 4.3 Travel & Leisure Carnival 7,450 223 0.3 Cineworld 51,480 251 0.3 Compass 70,800 818 1.0 Easyjet 26,300 476 0.6 Intercontinental Hotels Group 7,169 201 0.2 International Consolidated Airlines 78,900 430 0.5 Restaurant Group 30,000 204 0.3 Whitbread 7,650 402 0.5 3,005 3.7 Fixed Line Telecommunications BT 411,500 1,875 2.3 1,875 2.3 Mobile Telecommunications Vodafone 1,284,000 2,959 3.7 2,959 3.7 Electricity SSE 46,300 716 0.9 716 0.9 Gas, Water & Multiutilities Centrica 222,800 569 0.7 National Grid 178,170 1,566 2.0 Pennon Group 22,600 194 0.2 Severn Trent 11,510 244 0.3 United Utilities Group 25,630 249 0.3 2,822 3.5 Banks Barclays 568,000 1,450 1.8 HSBC 654,000 4,239 5.2 Lloyds Banking Group 2,047,600 1,584 2.0 Royal Bank Of Scotland 55,900 189 0.2 Standard Chartered 69,300 742 0.9 8,204 10.1 Non Life Insurance Direct Line Insurance 28,000 89 0.1 RSA Insurance Group 29,000 186 0.2 275 0.3 Market value Fund Holding 000s % Life Insurance Aviva 114,500 604 0.7 Legal & General 300,900 782 1.0 Old Mutual 167,500 393 0.5 Prudential 101,600 1,655 2.0 St James s Place 45,800 409 0.5 Standard Life 66,026 309 0.4 4,152 5.1 Real Estate Investment Trusts British Land 31,300 260 0.3 Custodian Reit 150,000 164 0.2 Great Portland Estates 40,800 326 0.4 Land Securities Group 25,100 313 0.4 Primary Health Properties 54,000 208 0.2 Shaftesbury 17,000 143 0.2 1,414 1.7 Real Estate Investment Services Property Income Trust For Charities 265,343 206 0.3 Quintain Estates & Developments 210,000 201 0.2 St Modwen Properties 61,000 266 0.3 673 0.8 Financial Services Aberdeen Asset Management 67,900 323 0.4 Hargreaves Lansdown 24,600 303 0.4 Jupiter Fund Management 78,000 337 0.4 Rathbone Brothers 12,500 267 0.3 Schroders 6,700 217 0.3 Schroders NV 4,000 98 0.1 1,545 1.9 Equity Investment Instruments Bioscience Investment Trust 10,000 0 0.0 Electra Private Equity 5% 2017 Convertible 85 129 0.2 Herald Investment Trust 32,000 221 0.3 HG Capital Trust 17,040 182 0.2 North Atlantic Smaller Companies 27,000 507 0.6 Oryx International Growth Fund 58,645 252 0.3 Worsley Investors Fund 815 101 0.1 1,392 1.7 Software & Computer Services Aveva Group 5,625 95 0.1 Keywords Studios 70,806 109 0.1 Micro Focus 23,212 292 0.4 Sage Group 46,524 226 0.3 722 0.9 Technology Hardware and Equipment Arm Holdings 57,600 641 0.8 641 0.8 9

Affirmative Equity Fund for Charities Portfolio statement continued as at 30 April 2015 (unaudited) Market value Fund Holding 000s % Market value Fund Holding 000s % Overseas Baring Emerging Europe 6,500 38 0.0 Basic Industries Sector SPDR 1,265 42 0.1 Consumer Discretionary Sector SPDR 2,500 123 0.2 Consumer Staples Sector SPDR 1,760 55 0.1 Energy Sector SPDR 1,370 74 0.1 Financial Sector SPDR 11,900 187 0.2 First State Asia Pacific B 73,609 844 1.0 First State Asia Pacific Sustainibility B 65,958 264 0.3 First State Latin America B 51,477 98 0.1 Genesis Emerging Markets 4,550 25 0.0 Healthcare Sector SPDR 3,850 180 0.2 Industrial Sector SPDR 2,750 100 0.1 ishares Core S&P 500 2,675 366 0.5 Overseas cont. ishares MSCI Europe Ex-UK 56,200 1,294 1.6 ishares MSCI Japan 78,800 667 0.8 ishares MSCI KLD 400 44,750 2,245 2.8 ishares Russell Midcap 5,500 614 0.8 ishares S&P/TSX 60 Index Fund 21,800 263 0.3 PowerShares QQQ 1,250 88 0.1 Technology Sector SPDR 4,980 138 0.2 Templeton Emerging Markets 8,000 46 0.1 7,751 9.6 80,962 100.0 Net cash 764 Total value of Fund 81,726 Summary of material portfolio changes as at 30 April 2015 (unaudited) Cost 000s Total purchases for the period 5,666 Proceeds 000s Total sales for the period 4,846 Largest purchases 3,530 Royal Dutch Shell B 534 ishares Core S&P 500 454 First State Asia Pacific B 350 Persimmon 253 HSBC 197 Astrazeneca 163 Custodian Reit 156 Glaxosmithkline 148 Dunelm Group 131 National Grid 130 Vodafone 130 BP 126 Lloyds Banking Group 118 Reckitt Benkiser 104 Unilever 95 ishares Russell Midcap 91 British Land 91 Direct Line Insurance 90 Legal & General 86 BT Group 83 Largest Sales 3,584 Royal Dutch Shell B 638 ishares Core S&P 500 353 First State Asia Pacific B 251 Persimmon 250 HSBC 201 Astrazeneca 187 Custodian Reit 169 Glaxosmithkline 166 Dunelm Group 165 National Grid 161 Vodafone 131 BP 128 Lloyds Banking Group 124 Reckitt Benkiser 122 Unilever 114 ishares Russell Midcap 108 British Land 95 Direct Line Insurance 91 Legal & General 65 BT Group 65 Other purchases 2,136 Total purchases 5,666 Other sales 1,262 Total sales 4,846 10

Affirmative Equity Fund for Charities Distribution for the six months ended 30 April 2015 2015 2013 Distribution period p per unit Date paid p per unit 1 November 2014 to 31 January 2015 0.60 13 March 2015 0.58 1 February 2015 to 30 April 2015 1.40 15 June 2015 1.24 Price and income history Highest buying price Lowest selling price Net income per unit Calendar year p p p 2010 109.30 93.60 2.96 2011 116.60 96.30 3.01 2012 113.60 100.50 3.53 2013 132.90 109.27 3.64 2014 137.80 125.80 3.72 Six months to 30 April 2015 146.20 130.80 2.00 Performance record 1 year 3 years 5 years Total return performance to 30 April 2015 % % p.a. % p.a. Affirmative Equity Fund for Charities 8.0 12.5 9.4 Composite benchmark (with exclusions) 9.0 13.4 9.9 Composite benchmark (without exclusions) 8.7 12.2 9.4 The performance of the Fund is based on the net asset value per share Total expense ratios Expense type % % Manager s periodic charge (inc VAT) 0.36 0.36 Corporate Trustee s charge (inc VAT) 0.06 0.05 Other expenses 0.03 0.04 Total expense ratio 0.45 0.45 11

Affirmative Equity Fund for Charities Notes to the accounts 1. Accounting policies (a) Basis of accounting The accounts of the fund have been prepared on the historical cost basis, as modified by the evaluation of investments, and in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008 and the relevant Scheme of the Charity Commissioners. (b) Recognition of income Dividends on ordinary stocks are credited to income when the securities are quoted ex-dividend. Interest on fixed interest stocks is accrued on a day to day basis. (c) Management expenses The Manager s periodic charge paid to Epworth Investment Management Ltd is charged to the income of the Fund before distribution at a rate of 0.30%, plus VAT, of the value of the Fund. This fee covers the provision of staff and investment services and other expenses incurred by the Manager. The Corporate Trustee fee, audit, legal, safe custody fees and transaction charges, are charged separately to the income of the Fund before distribution. (d) Distribution policy All income of the Fund, after deduction of management and other expenses is distributed to unitholders. Distributions take into account income received on the creation of units and income deducted on the cancellation of units. A reconciliation of the net distribution to the net income of the Fund is shown in note 7. (e) Basis of valuation Listed investments are valued at bid-market values at the close of business on an accounting date less, in the case of fixed interest securities, interest accrued. Suspended securities are valued by the Manager having regard to the last dealing price on the date of suspension and subsequent available information. Suspended securities are written off after they have been carried at nil value for two years or if the Manager does not expect any returns for the Fund. (f) Foreign exchange Assets and liabilities in foreign currencies are expressed in sterling at rates of exchange ruling on the accounting date. Transactions in foreign currencies are translated into sterling at the exchange rates ruling on the transaction dates. 2. Net gains on investments Net gains on investments during the period comprise: Proceeds from sales of investments 4,846 5,542 Original cost of investments sold (4,159) (4,321) Gains realised on investments sold 687 1,221 Net unrealised gains 5,353 164 Net gains on investments 6,040 1,385 3. Gross income UK dividends 1,287 1,095 Overseas dividends 45 46 Bank interest 4 3 Total Income 1,336 1,144 4. Expenses Payable to the Manager or associates 142 129 Payable to the Corporate Trustee or associates 142 129 Corporate Trustee s fee 24 17 Safe custody fees and transaction charges 7 8 31 25 Auditor s fees 3 4 Other expenses 2-5 4 Total expenses 178 158 5. Portfolio transaction costs Analysis of total purchase costs Purchases in period before transaction costs 5,659 8,575 Commissions 4 10 Custodian transaction costs 3 5 Total purchase costs 7 15 Gross purchases total 5,666 8,590 Analysis of total sale costs Gross sales before transaction costs 4,702 5,551 Commissions (5) (8) Custodian transaction costs (1) (1) Total sale costs (6) (9) Total sales net of transaction costs 4,696 5,542 6. Taxation The Fund is exempt from UK income tax and capital gains tax due to its charitable status pursuant to Sections 478 and 479 of the Corporation Tax Act 2010. Distributions are paid on the basis that all recoverable UK taxation has been reclaimed. Overseas withholding tax is deducted in full from overseas income on receipt. Withholding tax is credited to income when it is recovered. 12

Affirmative Equity Fund for Charities Notes to the accounts 7. Distributions The distributions take account of income received on the creation of units and income deducted on the cancellation of units, and comprise: 31 January 2015 347 311 30 April 2015 808 686 1,155 997 Income deducted on cancellation of units 8 2 Income received on creation of units (9) (7) Net distribution for the period 1,154 992 8. Debtors Sales awaiting settlement 15 24 Accrued income 349 126 Total debtors 364 150 9. Cash and bank balances Affirmative Deposit Fund for Charities 1,240 1,185 Cash at bank 4 3 Total cash and bank balances 1,244 1,188 10. Creditors Purchases awaiting settlement - - Accrued expenses 35 39 Total Creditors 35 39 11. Portfolio turnover calculation % % Portfolio turnover calculation 7.5 19.2 12. Risk management policies Securities held by the Fund are valued at bid-market value. Bid-market value is considered to be a fair representation of the amount repayable to unitholders should they wish to sell their units. Other financial assets and liabilities of the Fund are included in the balance sheet at their fair value. The main risks arising from the Fund s financial instruments and Manager s policies for managing these risks are summarised below. These policies have been applied throughout the year. Market price risk This is an actively managed fund, which invests in UK and overseas equities. The fund is therefore exposed to market price risk, which can be defined as the uncertainty about future price movements of the underlying investments of the Fund. Market price risk arises mainly from economic factors, including investor confidence, and may result in substantial fluctuations in the unit price from time to time. Generally, however, there will be a close correlation in the movement of the unit price to the markets the Fund is invested in. The Fund seeks to minimise the risks by holding a widely diversified portfolio of investments in line with the Fund s investment objectives. Currency risk The Fund is exposed to currency risks as some of its assets are denominated in currencies other than sterling. The Manager does not seek to avoid this exposure since it believes in the long term, hedging is detrimental to total return. At 30 April 2015 the Fund s foreign currency exposure is: Canadian Dollar 263 259 United States Dollar 4,522 4,856 Credit risk 4,785 5,115 The Fund s transactions in securities expose it to the risk that the counterparty will not deliver the investment for a purchase or the cash for a sale. To minimise this, the Fund only deals with an approved list of brokers maintained by the Manager. Liquidity risk The Fund s assets comprise securities that can readily be realised to meet obligations that may arise on the redemption of units. In addition the Manager s policy is that the Fund liquidity should be 5% or less. 13. Future calls There were no calls on partly paid stocks due for payment after the period end. 14. Related party transactions The Manager s periodic charge is paid to Epworth Investment Management Limited, a related party to the Fund. The amounts paid in respect of the Manager s periodic charge are disclosed in Note 4. The amount outstanding as at 30 April 2015 was 24,188 (30 April 2014: 22,114). In addition, the fund placed deposits during the period with the Affirmative Deposit Fund for Charities, a fund managed by Epworth Investment Management Limited. All charges levied for the management of these deposits have been refunded to the fund by Epworth. There were no other related party transactions during the period. 15. Contingent assets and liabilities As at 30 April 2015, there are no commitments, contingent assets or liabilities of which we are aware (31 October 2014 - nil). 13

Affirmative Fixed Interest Fund for Charities Investment objectives and policy The Fund will seek to maximise long term total returns consistent with commercial prudence, diversification and risk management through a portfolio investing in UK Government Securities (70%-90%), Corporate Debt Securities (10%-30%) and Cash and near cash (0%-10%); It is hoped to provide a yield in excess of that which can be achieved through UK Government securities alone. This will be done through corporate debt securities, which whether through direct holdings or indirectly through the Affirmative Corporate Bond Fund for Charities will be widely diversified and invested in well run companies characterised by financial strength and above average management teams and will normally (but not exclusively) pursue long term sustainable growth strategies in the wider interests of all parties including owners, lenders, employees, suppliers, customers/clients and the local and wider community. This policy is likely to result in a portfolio that excludes investments in bonds issued by companies where business is wholly or mainly involved in alcohol, armaments, gaming, pornography, or tobacco. In the view of the Fund Manager there will be no adverse impact on long term investment returns due to any exclusions on these grounds. Other matters such as environmental performance, corporate governance and social justice issues will be reviewed when making investment decisions. No sector of the market will be automatically included or excluded but the portfolio will be widely diversified to capture exposure to all significant sectors of the market; The Fund will have an average life of between five and fifteen years and a yield reflecting the prevailing yield on UK Government Securities. The benchmark against which the performance of the Fund is measured is a composite comprising of UK Government securities (80%); Non Gilts AAA (6%); Non Gilts AA (8%); Non Gilts A (5%) and Non Gilts BBB (1%). The Fund may invest in the Affirmative Deposit Fund for Charities and the Affirmative Corporate Bond Fund for Charities, for both of which the Manager is the fund manager. Any management charges incurred in this respect are refunded to the Fund by the Manager. Risk profile The main risks to the Fund s financial instruments are market price and interest risks. Market price risk arises mainly from economic factors, including investor confidence, and may result in substantial fluctuations in the unit price. However, generally you should expect a close correlation in the movement of the unit price and the underlying markets. Movements in interest rates may result in the manager being unable to secure similar income returns following the disposal or redemption of securities. There is little credit and no currency risk.. Risk warning The Affirmative Fixed Interest Fund for Charities is designed for longterm investors. The value of and the income from units in the fund can and do fall, as well as rise, and as a result you may not get back the amount originally invested. Past performance is no guarantee of future returns. 14

Affirmative Fixed Interest Fund for Charities Net asset value/fund size Net asset Net asset value Units in issue pence per unit 31 October 2010 21,516,390 19,797,767.78 108.70 31 October 2011 22,558,557 19,686,874.15 114.60 31 October 2012 23,650,548 19,765,058.89 119.70 31 October 2013 22,409,727 19,507,603.31 114.88 31 October 2014 19,736,569 16,667,708.48 118.40 Six months to April 2015 20,385,826 16,660,835.11 122.60 Statement of total return For the six months to 30 April 2015 (unaudited) Note Net gains/(losses)on investments 2 652 (176) Income 3 266 310 Expenses 4 (36) (33) Net income 230 277 Total return before distributions 882 101 Finance costs: Distributions 7 (230) (271) Change in net assets attributable to unitholders 652 (170) Statement of changes in unitholders net assets For the six months ended 30 April 2015 (unaudited) 000s 000s Net assets at start of period 19,737 22,410 Amounts receivable on creations of units 1,166 678 Amounts payable on cancellation of units (1,169) (3,071) 19,734 20,017 Change in net assets attributable to unitholders 652 (170) Net assets at end of period 20,386 19,847 15

Affirmative Fixed Interest Fund for Charities Balance sheet As at 30 April 2015 (unaudited) Assets Note Portfolio of investments 21,124 19,544 Debtors 8 152 156 Bank balances 9 236 198 Total assets 20,512 19,898 Liabilities Creditors 10 (14) (44) Distribution payable (112) (117) Total liabilities (126) (161) Net assets attributable to unitholders 20,386 19,737 Summary of investments and other assets As at 30 April 2015 (unaudited) Market value Fund 31/10/2014 Market value 31/10/2014 Fund 000s % 000s % British Government 15,910 79.1 15,500 79.3 Corporate Bonds and Supranational 4,214 20.9 4,044 20.7 Total Securities 20,124 100.0 19,544 100.0 Net current assets 262 193 Total value of fund 20,386 19,737 16

Affirmative Fixed Interest Fund for Charities Portfolio statement as at 30 April 2015 (unaudtied) Market Value Fund Holding 000s % British Government Treasury 2% 2016 375,000 379 1.9 Treasury 4% 2016 650,000 681 3.4 Treasury 1¾% 2017 850,000 868 4.3 Treasury 5% 2018 1,200,000 1,343 6.7 Treasury 4½% 2019 850,000 960 4.8 Treasury 4¾% 2020 450,000 524 2.6 Treasury 3¾% 2020 575,000 646 3.2 Treasury 3¾% 2021 800,000 910 4.5 Treasury 4% 2022 750,000 870 4.3 Treasury 2¼% 2023 525,000 545 2.7 Treasury 5% 2025 550,000 706 3.5 Treasury 4¼% 2027 550,000 684 3.4 Treasury 4¼% 2032 800,000 1,020 5.1 Treasury 4½% 2034 850,000 1,128 5.6 Treasury 4¼% 2036 500,000 649 3.2 Treasury 4¾% 2038 475,000 667 3.3 Treasury 4¼% 2039 350,000 462 2.3 Treasury 4¼% 2040 425,000 565 2.8 Treasury 4½% 2042 475,000 663 3.3 Treasury 3½% 2045 275,000 329 1.6 Treasury 4¼% 2046 325,000 448 2.3 Treasury 4¼% 2055 350,000 510 2.5 Treasury 4% 2060 250,000 353 1.8 15,910 79.1 Corporate Bonds and Supranational Affirmative Corporate Bond Fund Units* 3,626,210 4,214 20.9 4,214 20.9 20,124 100.0 Net current assets 262 Total value of fund 20,386 All investments are listed on a recognised stock exchange with the exception of those marked* 17

Affirmative Fixed Interest Fund for Charities Summary of material portfolio changes as at 30 April 2015 (unaudited) Cost 000s Total purchases for the period 1,477 Proceeds 000s Total sales for the period 1,482 Largest purchases Treasury 2¼% 2023 294 Treasury 4½% 2019 285 Treasury 4½% 2042 173 Treasury 4¼% 2032 161 Treasury 4% 2060 155 Affirmative Corporate Bond Fund Units 142 Treasury 3¾% 2021 114 Treasury 3¾ 2020 85 Treasury 4½% 2034 68 Largest sales Treasury 4¾% 2015 387 Treasury 4% 2016 370 Treasury 4¼% 2040 174 Treasury 4¼% 2036 156 Treasury 3¾ 2020 114 Affirmative Corporate Bond Fund Units 90 Treasury 2% 2016 76 Treasury 5% 2025 63 Treasury 2¼% 2023 52 Other purchases - Total purchases 1,477 Other sales - Total sales 1,482 Analysis of credit rating Rating band AAA 1,241 1,255 AA 17,560 16,957 A 957 953 BBB 108 109 Not rated 258 270 Total portfolio of investments 20,124 19,544 18

Affirmative Fixed Interest Fund for Charities Distribution 2015 2014 Distribution period p per unit Date paid p per unit 1 November 2014 to 31 January 2015 0.72 13 March 2015 0.76 1 February 2015 to 30 April 2015 0.67 15 June 2015 0.73 Price and income history Highest buying price Lowest selling price Net income per unit Calendar year p p p 2010 111.70 102.50 3.66 2011 115.40 103.30 3.53 2012 112.50 114.60 3.39 2013 121.98 112.03 3.20 2014 120.18 112.33 2.94 Six months to April 2015 128.60 119.00 1.39 Performance record 1 year 3 years 5 years Total return performance to 30 April 2015 % % p.a. % p.a. Affirmative Fixed Interest Fund for Charities 9.8 4.4 6.1 Composite Index 10.6 5.0 6.6 The performance of the fund is based on the net assset value per share Total expense ratios Expense type % % Manager s periodic charge (inc VAT) 0.24 0.24 Corporate Trustee s charge (inc VAT) 0.06 0.05 Other expenses 0.05 0.05 Total expense ratio 0.35 0.34 19

Affirmative Fixed Interest Fund for Charities Notes to the accounts 1. Accounting policies (a) Basis of accounting The accounts of the fund have been prepared on the historical cost basis, as modified by the evaluation of investments, and in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008 and the relevant Scheme of the Charity Commissioners. (b) Recognition of income Interest on Government stocks, debentures, eurobonds and other fixed interest stocks is accrued on a day-to-day basis. (c) Management expenses The Manager s periodic charge paid to Epworth Investment Management Ltd is charged to the income of the Fund before distribution at a rate of 0.20%, plus VAT, of the value of the Fund. This fee covers the provision of staff and investment services and other expenses incurred by the Manager. The Corporate Trustee fee, audit, legal, safe custody fees and transaction charges, are charged separately to the income of the Fund before distribution. (d) Distribution policy All income of the Fund, after deduction of management and other expenses is distributed to unitholders. Distributions take into account income received on the creation of units and income deducted on the cancellation of units. A reconciliation of the net distribution to the net income of the Fund is shown in note 7. (e) Basis of valuation Listed investments are valued at bid-market values at the close of business on an accounting date less, in the case of fixed interest securities, interest accrued. Suspended securities are valued by the Manager having regard to the last dealing price on the date of suspension and subsequent available information. Suspended securities are written off after they have been carried at nil value for two years or if the Manager does not expect any returns for the Fund. 2. Net gains/(losses) on investments Net gains/(losses) on investments during the period comprise: Proceeds from sales of investments 1,482 3,503 Original cost of investments sold (1,829) (3.401) Gains realised on investments sold (347) 102 Net unrealised gains/(losses) 999 (278) Net gains/(losses) on investments 652 (176) 3. Gross income Interest on debt securities 260 304 Bank interest 1 1 Other income 5 5 Total income 266 310 4. Expenses Payable to the Manager or associates 25 25 Payable to the Corporate Trustee or associates 25 25 Corporate Trustee s fee 6 5 Safe custody fees and transaction charges 1 1 7 6 Auditor s fees 2 2 Audit and other expenses written back 2 - Total expenses 36 33 5. Portfolio transaction costs Analysis of total purchase costs Purchases in period before transaction costs 1,477 1,201 Custodian transaction costs - - Total purchase costs - - Gross purchases total 1,477 1,201 Analysis of total sale costs Gross sales before transaction costs 1,482 3,503 Custodian transaction costs - - Total sale costs - - Total sales net of transaction costs 1,482 3,503 6. Taxation The Fund is exempt from UK income tax and capital gains tax due to its charitable status pursuant to Sections 478 and 479 of the Corporation Tax Act 2010. Distributions are paid on the basis that all recoverable UK taxation has been reclaimed. Overseas withholding tax is deducted in full from overseas income on receipt. Withholding tax is credited to income when it is recovered. 7. Distributions The distributions take account of income received on the creation of units and income deducted on the cancellation of units, and comprise: 31 January 2015 118 144 30 April 2015 112 127 230 271 Income deducted on cancellation of units 3 8 Income received on creation of units (3) (2) Net distribution for the period 230 277 20

Affirmative Fixed Interest Fund for Charities Notes to the accounts 8. Debtors Accrued income 151 155 Other income 1 1 Total debtors 152 156 9. Cash and bank balances Affirmative Deposit Fund for Charities 234 195 Cash at bank 2 3 Total cash and bank balances 236 198 10. Creditors Accrued expenses 14 44 Total creditors 14 44 11. Portfolio turnover calculation % % Portfolio turnover calculation 3.0 7.1 12. Risk management policies Fair value Securities held by the Fund are valued at bid-market value. Bid-market value is considered to be a fair representation of the amount repayable to unitholders should they wish to sell their units. Other financial assets and liabilities of the Fund are included in the balance sheet at their fair value. The main risks arising from the Fund s financial instruments and Manager s policies for managing these risks are summarised below. These policies have been applied throughout the year. Market price risk This is an actively managed fund, which invests in sterling fixed interest securities. The fund is therefore exposed to market price risk, which can be defined as the uncertainty about future price movements of the underlying investments of the Fund. Market price risk arises mainly from economic factors, including investor confidence, and may result in substantial fluctuations in the unit price from time to time. Generally, however, there will be a close correlation in the movement of the unit price to the markets the Fund is invested in. The Fund seeks to minimise the risks by holding a widely diversified portfolio of investments in line with the Fund s investment objectives. Credit risk The Fund s transactions in securities expose it to the risk that the counterparty will not deliver the investment for a purchase or the cash for a sale. To minimize this, the Fund only deals with an approved list of brokers maintained by the Manager. Liquidity risk The Fund s assets comprise securities that can readily be realised to meet obligations that may arise on the redemption of units. In addition the Manager s policy is that the Fund liquidity should be 5% or less. Interest rate risk The fund invests in fixed interest securities. The income may be affected by the Manager being unable to secure similar returns following the disposal or redemption of securities. The value of fixed interest securities may be affected by interest rate movements or the expectation of such movements in the future. The interest rate profile of the Fund s financial assets and liabilities at 30 April 2015 was: floating rate financial assets 236 198 fixed rate financial assets 20,124 19,544 financial assets not carrying interest 152 156 financial liabilities not carrying interest (126) (161) Total net assets 20,386 19,737 Related party transactions The Manager s periodic charge is paid to Epworth Investment Management Limited, a related party to the Fund. The amounts paid in respect of the Manager s periodic charge are disclosed in Note 4. The amount outstanding as at 30 April 2015 was 4,025 (30 April 2014: 3,918). In addition, the fund placed deposits during the period with the Affirmative Deposit Fund for Charities, and made investments in the Affirmative Corporate Bond Fund, both of which are managed by Epworth Investment Management Limited. All charges levied for the management of these deposits and investments have been refunded to the fund by Epworth. There were no other related party transactions during the period. 13. Contingent assets and liabilities As at 30 April 2015, there are no commitments, contingent assets or liabilities of which we are aware (31 October 2014 - nil). Currency risk There is no exposure to foreign currency fluctuations as all investments, income and short-term debtors and creditors are denominated in sterling. 21

Affirmative Corporate Bond Fund for Charities Investment objectives and policy The fund will seek to maximise long term total returns consistent with commercial prudence, diversification and risk management through a portfolio investing in sterling denominated corporate, supranational and other non-gilt sterling denominated fixed interest securities, as follows: AAA/AA (55-85%); other issues (15-45%); cash and bonds under 1 year to maturity (0-5%). It is hoped to provide a yield consistent with that obtained from investment grade non-government sterling bonds. Investment will be in corporate debt securities issued by a widely diversified range of well-run companies characterised by their financial strength and above average management teams and will normally (but not exclusively) pursue long term sustainable growth strategies in the wider interests of all parties, including owners, lenders, employees, suppliers, customers/ clients and the local and wider community. This policy will result in a portfolio that excludes investments in bonds issued by companies where business is wholly or mainly involved in alcohol, armaments, gaming, pornography or tobacco. In the view of the Fund Manager there will be no adverse impact on investment returns due to any exclusions on these grounds. Other matters such as environmental performance, corporate governance and social justice issues will be reviewed when making investment decisions. The fund s benchmark consists of a composite index comprising Non Gilts AAA 30%; Non Gilts AA 40%; Non Gilts A 25%; Non Gilts BBB 5%. Risk profile The main risks to the Fund s financial instruments are market price and interest risks. Market price risk arises mainly from economic factors, including investor confidence, and may result in substantial fluctuations in the unit price. However, generally you should expect a close correlation in the movement of the unit price and the underlying markets. Movements in interest rates may result in the manager being unable to secure similar income returns following the disposal or redemption of securities. There is little credit and no currency risk. Risk warning The Affirmative Corporate Bond Fund for Charities is designed for longterm investors. The value of and the income from units in the funds can and do fall, as well as rise, and as a result you may not get back the amount originally invested. Past performance is no guarantee of future returns. 22

Affirmative Corporate Bond Fund for Charities Net asset value/fund size Net asset value Net asset value Units in issue pence per unit 31 October 2010 137,782,221 132,455,845.80 104.0 31 October 2011 99,201,310 95,102,716.09 104.3 31 October 2012 109,728,443 98,275,976.76 111.7 31 October 2013 104,301,887 94,658,613.73 110.2 31 October 2014 105,597,542 93,564,262.41 112.9 30 April 2015 111,930,121 96,357,573.62 116.2 Statement of total return for the six months ended 30 April 2015 (unaudited) Note Net gains/(losses) on investments during the period 2 3,038 (877) Gross income 3 1,905 1,979 Expenses 4 (216) (194) Net income & total return for the period 4,727 908 Finance costs: Distributions 7 (1,696) (1,802) Change in net assets attributable to unitholders 3,031 (894) Statement of movement in unitholders funds for the six months ended 30 April 2015 (unaudited) 000s 000s Net assets at start of period 105,598 104,302 Amounts received on creations of units 4,665 3,434 Amounts paid on cancellation of units (1,364) (1,303) 108,899 106,433 Change in net assets attributable to unitholders 3,031 (894) Net assets at end of period 111,930 105,539 23

Affirmative Corporate Bond Fund for Charities Balance sheet as at 30 April 2015 (unaudited) Assets Note Portfolio of investments 109,840 103,165 Debtors 8 2,006 2,292 Bank balances 9 949 1,045 Total assets 112,795 106,502 Liabilities Creditors 10 (36) (43) Distributions payable (829) (861) Total liabilities (865) (904) Total assets attributable to unit holders 111,930 105,598 Summary of investments and other assets as at 30 April 2015 (unaudited) Market value Fund 31/10/2014 Market value 31/10/2014 Fund % 000s % Debentures 5,369 4.9 5,241 5.1 Supranational 29,588 26.9 28,430 27.6 Corporate unsecured financial 46,374 42.2 43,089 41.7 Corporate unsecured non-financial 28,509 26.0 26,405 25.6 109,840 100.0 103,165 100.0 Net current assets 2,090 2,433 Total value of fund 111,930 105,598 24

Affirmative Corporate Bond Fund for Charities Portfolio statement as at 30 April 2015 (unaudited) Debentures Witan Investment Trust 8½% 2016 300,000 324 0.3 Co-Operative Group 7⅝% 2018 300,000 334 0.3 JP Morgan Fleming Claverhouse 7% 2020 250,000 284 0.3 Scottish American 8% 2022 550,000 660 0.6 Edinburgh Investment Trust 7¾% 2022 500,000 645 0.6 Monks Investment Trust 6⅜% 2023 550,000 625 0.6 Witan Investment Trust 6⅛% 2025 250,000 303 0.3 Great Portland Estates 5⅝% 2029 500,000 605 0.5 Merchants Trust 5⅞% 2029 250,000 291 0.3 Scottish Investment Trust 5¾% 2030 500,000 618 0.5 Peel Holdings 8⅜% 2040 500,000 680 0.6 Supranational Holding Market value Fund 000s 5,369 4.9 KFW 4⅞% 2018 1,900,000 2,103 1.9 CADES 3¾% 2018 1,305,000 1,413 1.3 European Investment Bank 4¾% 2018 1,000,000 1,121 1.0 Bank Nederlandse 1⅞% 2018 1,800,000 1,839 1.7 IBRD 5.4% 2021 1,600,000 1,952 1.8 European Investment Bank 5⅜% 2021 1,950,000 2,364 2.1 Bank Nederlandse 5⅜% 2021 1,400,000 1,685 1.5 Deutsche Bahn 2¾% 20/06/22 1,700,000 1,773 1.6 Temasek 4⅝% 2022 1,155,000 1,348 1.2 SNCF 5⅜% 2027 2,400,000 3,040 2.8 European Investment Bank 3¾% 2027 1,200,000 1,387 1.3 Reseau Ferre 5¼% 2028 1,600,000 2,071 1.9 Bank Nederlandse 5.2% 2028 1,400,000 1,826 1.7 Belgium 5.7% 2032 350,000 484 0.4 Ned.Waterschapsbank 5⅜% 2032 2,500,000 3,394 3.1 Network Rail 4¾% 2035 1,050,000 1,408 1.3 Temasek 5⅛% 2040 280,000 380 0.3 29,588 26.9 25

Affirmative Corporate Bond Fund for Charities Portfolio statement continued as at 30 April 2015 (unaudited) Corporate Unsecured Financial Holding Market value Fund 000s National Australia Bank 3⅝% 2017 2,350,000 2,480 2.3 Network Rail 1% 2017 750,000 751 0.7 RBOS 6⅝% 2018 1,050,000 1,213 1.1 KFW 2% 2018 1,500,000 1,543 1.4 Commonwealth Bank of Australia 2¼% 2018 750,000 770 0.7 Lloyds Bank 2¾% 2018 700,000 725 0.7 Societe Generale 5% 2018 750,000 835 0.8 Svenska Handelsbanken 4% 2019 1,450,000 1,573 1.4 Nationwide 5⅝% 2019 2,150,000 2,476 2.3 Westpac Banking Corporation 5% 2019 1,940,000 2,201 2.0 Bank of America 5½% 2019 990,000 1,134 1.0 KFW 1⅛% 2019 750,000 743 0.7 National Australia Bank 5⅛% 2021 1,245,000 1,447 1.3 Barclays 4¼% 2022 1,500,000 1,705 1.6 Svenska Handelsbanken 2¾% 2022 1,200,000 1,234 1.1 GE Capital UK Funding 5⅛% 2023 1,250,000 1,478 1.3 Lloyds TSB Bank 5⅛% 2025 2,400,000 2,962 2.7 Nationwide 5⅝% 2026 1,400,000 1,829 1.7 Commonwealth Bank of Australia 3% 2026 2,000,000 2,105 1.9 JP Morgan Chase 3½% 2026 1,350,000 1,427 1.3 Lloyds TSB Bank 4⅞% 2027 1,300,000 1,605 1.5 HSBC Holdings 5¾% 2027 885,000 1,016 0.9 Rabobank 4.55% 2029 1,500,000 1,732 1.6 Aegon 6⅛% 2031 530,000 701 0.6 GE Capital UK Funding 5⅞% 2033 1,400,000 1,906 1.7 Legal & General 5⅞% 2033 530,000 691 0.6 HSBC Bank Plc 5⅜% 2033 815,000 917 0.8 Aegon 6⅝% 2039 1,060,000 1,542 1.4 HSBC Holdings 6% 2040 1,410,000 1,700 1.5 Rabobank 5¼% 2041 1,850,000 2,365 2.1 University of Manchester 4¼% 2053 1,000,000 1,288 1.2 Rabobank 5⅜% 2060 200,000 280 0.3 46,374 42.2 26

Affirmative Corporate Bond Fund for Charities Portfolio statement continued as at 30 April 2015 (unaudited) Corporate Unsecured Non-Financial Toyota Motor Corporation 4% 2017 2,500,000 2,675 2.5 Telefonica Emisiones 5⅜% 2018 900,000 985 0.9 Unilever 2% 2018 400,000 410 0.4 Orange 7¼% 2020 1,500,000 1,878 1.7 Pepsico 2½% 2022 1,900,000 1,908 1.7 Johnson & Johnson 5½% 2024 2,600,000 3,291 3.0 Transport for London 2⅛% 2025 1,500,000 1,463 1.3 National Grid 4% 2027 1,300,000 1,444 1.3 Electricite France 6¼% 2028 1,200,000 1,557 1.4 Statoil 6⅞% 2031 2,400,000 3,478 3.2 AstraZeneca 5¾% 2031 850,000 1,131 1.0 East Japan Railway 4¾% 2031 550,000 673 0.6 East Japan Railway 5¼% 2033 550,000 711 0.7 Electricite France 6⅛% 2034 1,050,000 1,361 1.2 Pfizer 6½% 2038 2,600,000 3,796 3.5 Centrica 4¼% 2044 550,000 558 0.5 University of Cambridge 3¾% 2052 1,000,000 1,190 1.1 Net current assets 2,090 Total value of Fund 111,930 All investments are listed on a recognised stock exchange Holding Market value Fund 000s 28,509 26.0 109,840 100.0 27

Affirmative Corporate Bond Fund for Charities Summary of material portfolio changes as at 30 April 2015 Cost 000s Total purchases for the period 10,084 Proceeds 000s Total sales for the period 6,155 Largest purchases SNCF 5¼% 2028 1,744 Ned. Waterschapsbank 5⅜% 2032 1,566 Transport for London 2⅛ 2025 1,495 JP Morgan Chase 3½% 2026 1,475 Rabobank 5¼% 2041 1,103 National Australia Bank 3⅝% 2017 1,009 KFW 1⅛% 2019 745 GE Capital UK Funding 5⅞% 2033 564 Bank Nederlandse 5.2% 2028 383 Largest sales Ned. Waterschapsbank 5⅝% 2015 1,649 SNCF 2⅜% 2015 1,432 Rabobank 4% 2015 1,018 JP Morgan Chase 5⅜% 2016 1,011 GE Capital UK Funding 5⅞% 2033 421 Nationwide 5⅝% 2017 351 KFW 1⅛% 2019 273 Other purchases - Total purchases 10,084 Other sales - Total sales 6,155 Analysis of credit rating Rating band 000 s 000 s AAA 32,978 32,767 AA 43,836 38,054 A 25,421 24,891 BBB 2,863 2,841 Not rated 4,742 4,612 Total portfolio of investments 109,840 103,165 28

Affirmative Corporate Bond Fund for Charities Distribution six months ended 30 April 2015 Distribution period 2015 per unit Date paid 2014 per unit 1 November 2014 to 31 January 2015 0.92 13 March 2015 0.95 1 February 2015 to 30 April 2015 0.86 15 June 2015 0.92 Price and income history Highest buying price Lowest selling price Net income per unit Calendar year p p p 2010 107.20 98.09 4.41 2011 105.70 98.35 4.51 2012 113.40 102.10 4.21 2013 116.20 106.92 3.94 2014 115.40 107.70 3.74 Six months to 30 April 2015 122.10 113.40 2.00 Performance record 1 year 3 years 5 years Total return performance to 30 April 2015 % % p.a. % p.a. Affirmative Corporate Bond Fund for Charities 9.7 7.0 6.8 Composite Benchmark 10.2 7.3 7.0 *The performance of the fund is based on the net asset value per share Total expense ratios Expense Type % % Manager s periodic charge (inc VAT) 0.30 0.30 Corporate Trustee s charge (inc VAT) 0.06 0.05 Other expenses 0.03 0.03 Total expense ratio 0.39 0.38 29

Affirmative Corporate Bond Fund for Charities Notes to the accounts 1. Accounting policies (a) Basis of accounting The accounts of the fund have been prepared on the historical cost basis, as modified by the evaluation of investments, and in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008 and the relevant Scheme of the Charity Commissioners. (b) Recognition of income Interest on Government stocks, debentures, eurobonds and other fixed interest stocks is accrued on a day-to-day basis. (c) Management expenses The Manager s periodic charge paid to Epworth Investment Management Ltd is charged to the income of the Fund before distribution at a rate of 0.25%, plus VAT, of the value of the Fund. This fee covers the provision of staff and investment services and other expenses incurred by the Manager. The Corporate Trustee fee, audit, legal, safe custody fees and transaction charges, are charged separately to the income of the Fund before distribution. (d) Distribution policy All income of the Fund, after deduction of management and other expenses is distributed to unitholders. Distributions take into account income recieved on the creation of units and income deducted on the cancellation of units. A reconcilliations of the net distribution to the net income of the Fund is shown in note 7. (e) Basis of valuation Listed investments are valued at bid-market values at the close of business on an accounting date less, in the case of fixed interest securities, interest accrued. Suspended securities are valued by the Manager having regard to the last dealing price on the date of suspension and subsequent available information. Suspended securities are written off after they have been carried at nil value for two years or if the Manager does not expect any returns for the Fund. 2. Net gains/(losses) on investments Net gains/(losses) on investments during the period comprise: 000 s 000 s Proceeds from sales of investments 6,155 3,970 Original cost of investments sold (5,852) (3,668) Surplus realized on investments sold 303 302 Net unrealized gains/(losses) 2,735 (1,179) Net gains/(losses) on investments 3,038 (877) 3. Gross income 000s 000s Interest on debt securities 1,900 1,973 Bank interest 5 6 1,905 1,979 4. Expenses Payable to the Manager or associates 167 156 167 156 Payable to the Corporate Trustee or associates Corporate Trustee s fee 33 25 Safe custody fees and transaction charges 9 9 42 34 Auditor s fees 4 4 Other expenses (written back) 3-7 4 Total expenses 216 194 5. Portfolio transaction costs 000 s 000s Analysis of total purchase costs Purchases in period before transaction costs 10,084 5,892 Commissions - - Custodian transaction costs - - Total purchase costs - Gross purchases total 10,084 5,892 Analysis of total sale costs Gross sales before transaction costs 6,155 3,970 Commissions - - Custodian transaction costs - - Total sale costs - - Total sales net of transaction costs 6,155 3,970 6. Taxation The Fund is exempt from UK income tax and capital gains tax due to its charitable status pursuant to Sections 478 and 479 of the Corporation Tax Act 2010. Distributions are paid on the basis that all recoverable UK taxation has been reclaimed. Overseas withholding tax is deducted in full from overseas income on receipt. Withholding tax is credited to income when it is recovered. 7. Distributions The distributions take account of income received on the creation of units and income deducted on the cancellation of units, and comprise: 000 s 000s 31 January 2015 867 913 30 April 2015 829 889 1,696 1,802 Income deducted on cancellation of units 4 4 Income received on creation of units (14) (7) Net distribution for the period 1,686 1,799 30

Affirmative Corporate Bond Fund for Charities Notes to the accounts 8. Debtors 000 s 000s Sales awaiting settlement - - Accrued income 2,006 2,292 9. Cash and bank balances 2,006 2,292 000 s 000s Affirmative Deposit Fund for Charities 945 1,041 Cash at bank 4 4 10. Creditors 949 1,045 000 s 000s Purchases awaiting settlement - - Accrued expenses 36 43 11. Portfolio turnover calculation 36 43 % % Portfolio turnover calculation 9.1 6.0 12. Risk management policies Fair value Securities held by the Fund are valued at bid-market value. Bid-market value is considered to be a fair representation of the amount repayable to unitholders should they wish to sell their units. Other financial assets and liabilities of the Fund are included in the balance sheet at their fair value. The main risks arising from the Fund s financial instruments and Manager s policies for managing these risks are summarized below. These policies have been applied throughout the period. Market price risk This is an actively managed fund, which invests in sterling fixed interest securities. The fund is therefore exposed to market price risk, which can be defined as the uncertainty about future price movements of the underlying investments of the Fund. Market price risk arises mainly from economic factors, including investor confidence, and may result in substantial fluctuations in the unit price from time to time. Generally, however, there will be a close correlation in the movement of the unit price to the markets the Fund is invested in. The Fund seeks to minimise the risks by holding a widely diversified portfolio of investments in line with the Fund s investment objectives. Currency risk There is no exposure to foreign currency fluctuations as all investments, income and short-term debtors and creditors are denominated in sterling. Credit risk The Fund s transactions in securities expose it to the risk that the counterparty will not deliver the investment for a purchase or the cash for a sale. To minimize this, the Fund only deals with an approved list of brokers maintained by the Manager. Liquidity risk The Fund s assets comprise securities that can readily be realized to meet obligations that may arise on the redemption of units. In addition the managers policy is that the Fund liquidity should be 5% or less. Interest rate risk The fund invests in fixed interest securities. The income may be affected by the manager being unable to secure similar returns following the disposal or redemption of securities. The value of fixed interest securities may be affected by interest rate movements or the expectation of such movements in the future. The interest rate profile of the Fund s financial assets and liabilities at 30 April 2015 was: floating rate financial assets 949 1,045 fixed rate financial assets 109,840 103,165 financial assets not carrying interest 2,006 2,292 financial liabilities not carrying interest (865) (904) Total net assets 111,930 105,598 Related party transactions The Manager s periodic charge is paid to Epworth Investment Management Limited, a related party to the Fund. The amounts paid in respect of the Manager s periodic charge are disclosed in Note 4. The amount outstanding as at 30 April 2015 was 3,584 (30 April 2014 3,533). In addition, the fund placed deposits during the period with the Affirmative Deposit Fund for Charities, a fund managed by Epworth Investment Management Limited. All charges levied for the management of these deposits have been refunded to the fund by Epworth. There were no other related party transactions during the period. 13. Contingent assets and liabilities As at 30 April 2015, there are no commitments, contingent assets or liabilities of which we are aware (31 October 2014 - nil). 31

Affirmative Deposit Fund for Charities Investment objectives and policy The Fund will seek to achieve, mainly through a portfolio of bank deposits and with minimal risk of capital loss, the higher rates of interest usually available in the London Money Markets, whilst maintaining the ability for depositing charities to make withdrawals at short notice. Investments will be made with banks and other institutions which meet rigorous criteria based on independent credit ratings and size, with a maximum average maturity date for the investments of no more than 150 days. Risk is further minimised by limiting the proportion of the Fund deposited with any single bank or other institution. The Fund may invest in sterling denominated deposits, Treasury Bills and other UK Government guaranteed securities and floating rate bonds and will maintain a minimum of 10% of its assets in investments realisable within 5 working days. The Fund s benchmark, before expenses, is the 7-day London Interbank bid rate (LIBID) as measured by the British Bankers Association. Risk profile The main risks to the Fund s financial instruments are the interest rate risk, where changes in interest rates may result in income either increasing or decreasing; credit risk of a counterparty failing to repay a deposit at its maturity date, and the liquidity risk of the Fund being unable to meet its obligations. These risks are minimised by the Manager as identified in the investment objectives and policy above. Risk warning The Trustee and the Fund Manager undertake to use due skill, care and diligence in carrying out their duties under the Affirmative Deposit Fund for Charities Scheme, but whilst complying with this undertaking in relation to the investment of the Fund, they cannot give guarantees regarding the repayment of deposits. The Affirmative Deposit Fund is exempt from the Financial Services and Markets Act 2000 and depositing charities are not eligible for the Statutory Investors Compensation Scheme or the services of the Financial Services Ombudsman. The Fund Manager is however authorised and regulated by the Financial Conduct Authority. The current interest distribution is no guarantee of future returns. 32

Affirmative Deposit Fund for Charities Statement of total return For the six months to 30 April 2015 (unaudited) Note Gross income 1,944 2,349 Expenses 2 (194) (168) Net income and total return for the period 1,750 2,181 Finance costs: Distributions (1,731) (2,073) Net increase in income reserve 19 108 Balance sheet as at 30 April 2015 (unaudited) Assets Note Deposits with authorised banks 488,628 454,212 Debtors 5 1,043 1,703 Bank balances 60 280 Total assets 489,731 456,195 Liabilities Current deposits 6 429,710 398,212 Term deposits 6 57,525 55,500 Creditors 8 80 86 Income reserve 9 2,416 2,397 489,731 456,195 Total expense ratios Expense type % % Manager s periodic charge (inc VAT) 0.24 0.24 Corporate Trustee s charge (inc VAT) 0.02 0.02 Other expenses 0.01 0.01 Total expense ratio 0.27 0.27 33

Affirmative Deposit Fund for Charities Income and net asset value history Net asset value Average distribution Average distribution LIBID (net of expenses) Year to 31 October 000s % AER % % 2010 424,275 1.01 1.02 0.13 2011 427,799 1.17 1.18 0.19 2012 424,134 1.29 1.30 0.18 2013 442,293 0.95 0.96 0.09 2014 453,713 0.62 0.62 0.09 Six months to 30 April 2015 487,235 0.54 0.54 0.09 Distributions paid For the six months to 30 April 2015 Distribution rate AER rate % % 000s 30 November 2014 0.55 0.55 291 31 December 2014 0.55 0.55 294 31 January 2015 0.55 0.55 298 28 February 2015 0.55 0.55 274 31 March 2015 0.55 0.55 300 30 April 2015 0.50 0.50 274 Average rate and total paid for year 0.54 0.54 1,731 Summary of deposits as at 30 April 2015 (unaudited) By maturity 30/04/2015 31/10/2014 Repayable 000s % 000s % On call 77,100 15.8 48,670 10.7 Within 5 business days 15,000 3.1 15,000 3.3 1 month 63,009 12.9 64,010 14.1 2 months 85,009 17.4 75,019 16.5 3 months 83,510 17.1 91,513 20.2 6 months 65,000 13.3 110,000 24.2 1 year 70,000 14.3 20,000 4.4 2 years 30,000 6.1 30,000 6.6 Total 488,628 100.0 454,212 100.0 34

Affirmative Deposit Fund for Charities Summary of deposits by credit rating 30/04/2015 31/10/2014 Rating band 000 s % 000 s % Aa1 6,003 1.2 4,003 0.9 Aa2 32,017 6.6 10,004 2.2 Aa3 55,596 11.4 87,732 19.3 A1 180,002 36.8 105,003 23.1 A2 210,000 43.0 242,460 53.4 A3 - - - - BAA1 5,010 1.0 5,010 1.1 Total 488,628 100.0 454,212 100.0 As at 30 April 2015 38.6% of deposits were with bodies eligible to participate in the UK Government Credit Guarantee Scheme (October 2014: 37.0%). Summary of deposits by banking group % % Santander UK 12.3 13.2 Nationwide 12.3 13.2 Lloyds 12.3 10.4 Mitsubishi UFJ Trust and Banking Corporation 12.3 8.8 Sumitomo Mitsui Banking Corporation 10.3 13.2 Crédit Agricole 10.3 9.9 CIC 7.2 4.4 Société Générale 6.1 4.4 HSBC 3.4 1.3 Commonwealth Bank of Australia 2.7 2.9 Barclays 2.0 2.2 Rabobank 2.0 2.2 Toronto Dominion 1.2 0.9 DZ Bank 1.0 8.8 Royal Bank of Scotland 1.0 1.1 National Australia Bank 1.0 1.1 BNP Paribas 1.0 1.1 Bank of Montreal 0.8 0.9 Westpac 0.8 - Total 100.0 100.0 35

Affirmative Deposit Fund for Charities Notes to the accounts 1. Accounting policies (a) Basis of accounting The accounts of the fund have been prepared on the historical cost basis, as modified by the evaluation of investments, and in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008 and the relevant Scheme of the Charity Commissioners. (b) Income recognition Interest on bank and building society deposits is accrued on a daily basis. Premiums and discounts arising on the purchase of short dated investments held by the Fund are taken to a Redemption Equalisation account and amortised on a straight line basis from the date of purchase to maturity. This amortisation is taken to Income account. (c) Management expenses The Manager s periodic charge paid to Epworth Investment Management is charged to the income of the Fund before distribution at a rate of 0.20%, plus VAT, of the value of the Fund. This fee covers the provision of staff and investment services and other expenses incurred by the Manager. The Corporate Trustee fee, audit and legal fee, and bank charges are charged separately to the income of the Fund before distribution. (d) Distributions All income of the Fund, after deduction of management and other expenses, and transfers to/from income reserve, is distributed to depositors. (e) Basis of valuation The Money Market Deposits, all of which are with banks, have been valued at cost. 2. Expenses Payable to the Manager or associates Manager s periodic charge see Note 1(c) 122 123 Payable to the Corporate Trustees or associates 122 123 and agents of either of them: 64 42 Other expenses: Audit fee 8 3 Other expenses 8 3 Total expenses 194 168 3. Taxation The Fund is exempt from UK income tax and capital gains tax due to its charitable status pursuant to Sections 478 and 479 of the Corporation Tax Act 2010. Distributions are credited gross to depositors. 5. Debtors Interest receivable 1,043 1,703 Total debtors 1,043 1,703 6. Current & term deposits Central Finance Board of the Methodist Church Deposit Fund 381,341 346,619 Affirmative Equity Fund 1,145 1,185 Affirmative Fixed Interest Fund 236 195 Affirmative Corporate Bond Fund 925 1,041 Other Charities 103,588 104,672 Total deposits 487,235 453,712 7. Maturity analysis Repayable: On demand 429,735 398,212 Within 3 months 25,000 27,000 Within 1 year 24,000 20,500 Within 2 years 8,500 8,000 Total deposits 487,235 453,712 8. Creditors Accrued expenses 80 86 Total creditors 80 86 9. Income reserve The fund operates an income reserve which is accumulated out of income and held on trust for depositors for the time being. The income reserve is maintained to ensure payment of interest to depositors each month even though a proportion of the income earned by the Fund will not be received until maturity date of individual deposits. The reserve is also available to augment the Fund s deposit rate and to provide against potential default of counterparties. Balance at start of period 2,397 2,505 Transfer (from)/to reserve 19 (108) Income reserve at 30 April 2015 2,416 2,397 4. Deposits with authorised banks Deposits are with financial institutions who have permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits. 36

Affirmative Deposit Fund for Charities Notes to the accounts 10. Risk management policies The main risks arising from the Fund s financial instruments and the Manager s policies for managing these risks are summarised below. These policies have been applied throughout the period. Interest rate risk The Fund invests in fixed rate and floating rate deposits with an approved list of institutions maintained by the Manager. Changes in the interest rates may result in income either increasing or decreasing. The interest rate profile of the Fund s financial assets and liabilities at 30 April 2015 is set out below: 000 s 000 s floating rate financial assets 42,028 36,042 fixed rate financial assets 446,600 418,170 financial assets not carrying interest 1,103 1,983 financial liabilities not carrying interest (2,496) (2,483) Total net assets 487,235 453,712 11. Related party transactions The Manager s periodic charge is paid to Epworth Investment Management, a related party to the Fund. The amounts paid in respect of the Manager s periodic charge are disclosed in Note 2. At 30 April 2015, outstanding balances due to Epworth Investment Management amounted to 19,292.84 (2014: 19,472.19). There were no other transactions entered into with Epworth Investment Management during the period. 12. Contingent assets and liabilities As at 30 April 2015, there are no commitments, contingent assets or liabilities which we are aware (31 October 2014 - nil). Credit risk The Fund s transactions expose it to the risk that a counterparty may not repay a deposit at its maturity date. To mimimise this risk, investments are made with banks and other institutions which meet rigorous criteria based on independent credit ratings and size, with a maximum average maturity date for the investments of no more than 150 days. Risk is further minimised by limiting the proportion of the Fund deposited with any single bank or other institution. Liquidity risk To ensure that the Fund can meet obligations that may arise from depositors wishing to make withdrawals, the Manager must maintain at all times a minimum of 10% of the Fund s assets in investments realisable within 5 working days. 37

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The Affirmative Equity Fund for Charities Charity Number 1087228 The Affirmative Fixed Interest Fund for Charities Charity Number 1087227 The Affirmative Corporate Bond fund for Charities Charity Number 1131752 The Affirmative Deposit Fund for Charities Charity Number 1115887 Investment Manager, Administrator and Registrar Epworth Investment Management Limited (Authorised and Regulated by the Financial Conduct Authority) 9 Bonhill Street London EC2A 4PE Telephone 020 7496 3636 Fax 020 7496 3637 Email admin@epworthinvestment.co.uk Website www.epworthinvestment.co.uk Directors John Sandford (Chair) John Gibbon Bill Seddon (Chief Executive) Malcolm Hamilton Marina Phillips Senior Fund Managers Stephen Beer Miles Askew Matthew Richards Client Relationship Manager Christophe Borysiewicz Secretary Marina Phillips Corporate Trustee & Custodians Bankers HSBC Bank plc Institutional Fund Services 8 Canada Square London E14 5HQ Solicitors Pothecary Witham Weld 70 St George s Square London SW1V 3RD Auditors Mazars LLP Tower Bridge House St Katharine s Way London E1W 1DD 39

Epworth Investment Management 9 Bonhill Street London EC2A 4PE Tel 020 7496 3636 Fax 020 7496 3637 Email admin@epworthinvestment.co.uk Web www.epworthinvestment.co.uk