Ecclesiastical Investment Funds annual report and accounts - long ...

Ecclesiasticalinvestment fundsa n n ua l r e p o r t a n d a u d i t e df i n a n c i a l s tat e m e n t s31 December 2009

ContentsReport of the Authorised Corporate Director - Investment Environment 3Investment Objectives and Policies 4Amity UK Fund 6Amity European Fund 8Amity International Fund 10Amity Sterling Bond Fund 12Higher Income Fund 14UK Equity Growth Fund 16Authorised Status 18Certification of Accounts 18Statement of the Authorised Corporate Director’s Responsibilities 19Independent Auditors’ Report to the Shareholders 20Portfolio Statements 21Statement of Total Return 42Statement of Change in Net Assets Attributable to Shareholders 43Balance Sheet 44Notes to the Financial Statements 45Distribution/Accumulation Statements 59Management contact detailsAuthorised Corporate DirectorThe Authorised Corporate Director (ACD) isEcclesiastical Investment Management Limited(EIM).The investments of Ecclesiastical InvestmentFunds (EIF) are managed by the ACD. TheACD has prepared financial statements thatcomply with the Statement ofRecommended Practice for Open-EndedInvestment Companies issued by theInvestment ManagementAssociation in November 2008.ConstitutionEIF is an Open-Ended Investment Company(OEIC).It has variable capital and was incorporatedwith limited liability under the Open-EndedInvestment Companies Regulations 2001(OEIC Regulations) in Great Britain underregistered number IC 00037. It is authorisedand regulated by the Financial ServicesAuthority.EIF is an ‘umbrella’ company and comprises sixauthorised investment securities sub-funds.Ecclesiastical Investment Management LimitedBeaufort House, Brunswick Road,Gloucester GL1 1JZ.Tel 0845 777 3322Email information@ecclesiastical.comwww.ecclesiastical.comAuthorised and regulated by theFinancial Services AuthorityDirectors of Ecclesiastical InvestmentManagement LimitedM Hews, BSc, FIA (Chairman)MH Tripp, BSc, ARCS, FIAUltimate Parent Company of the ACDAllchurches Trust LimitedBeaufort House, Brunswick Road,Gloucester GL1 1JZ.DepositaryBNY Mellon Trust and Depositary (UK) LimitedThe Bank of New York Mellon Centre,160 Queen Victoria Street,London EC4V 4LA.Authorised and regulated by theFinancial Services AuthorityRegistrarNorthern Trust Global Services Limited50 Bank Street, Canary Wharf,London E14 5NT.AuditorsDeloitte LLP2 New Street Square,London EC4A 3BZ.

4ECCLESIASTICAL Investment FundsFund Name & Investment ObjectivesInvestment PolicyAmity UKThe Fund aims to achieve long-termcapital appreciation and a reasonable level ofincome by investing principallyin UK companiesAmity EuropeanTo achieve long-term capital growthwith a reasonable level of incomeprimarily through a diversified portfolioof European companiesAmity InternationalThese Funds seek to invest in a portfolio of companies which make a positivecontribution to society and the environment through sustainable and sociallyresponsible practices.These Funds seek to avoid investment in certain areas such as companies which havea material involvement in alcohol, tobacco and weapon production, gambling andpublication of violent or explicit materials.To achieve long-term capital growthwith a reasonable level of incomeprimarily through a diversified portfolioof International companiesAmity Sterling BondThe Fund aims to provide an attractive level ofincome.The Amity Sterling Bond Fund seeks to invest in a highly diversified portfolio ofGovernment and good quality fixed interest securities issued by companies which makea positive contribution to society and the environment through sustainable and sociallyresponsible practices.The Fund seeks to avoid investment in certain areas such as companies which havea material involvement in alcohol, tobacco and weapon production, gambling andpublication of violent or explicit materials.Higher IncomeTo provide an above average and growing levelof income together with capital growth over thelonger term.The Manager will seek to achieve the investment objective by investing in a mixof equities, fixed interest securities and such other investments that the Managerconsiders suitable.UK Equity GrowthTo achieve long-term capital growth with areasonable level of income.The UK Equity Growth Fund is designed to invest primarily in a range of UKincorporated and/or listed companies which the Manager believes offer good potentialfor long-term capital growth.

ECCLESIASTICAL Investment Funds 5RisksggMost of the assets will be invested in the UK stock market so could be affected byany change in this market.Selecting stocks due to our ethical criteria means that the choice of stocks islimited to a sub set of the stock market and this could lead to greater volatility.These Funds are marketable to all retailinvestors.These Funds are managed in line with therequirements for inclusion in an ISA. Theportfolio will consist primarily of transferablesecurities but the Manager may also investin units in collective investment schemes,money-market instruments, derivatives andforward transactions, deposits, nil andpartly paid securities, bonds, convertiblebonds, cash and near cash as deemedeconomically appropriate to meet theFunds’ objectives.The Manager does not currently intend touse derivatives for any purpose other thanthe efficient portfolio management ofthe Funds, although it may, subject toobtaining and maintaining the requisitepermissions from the FSA under theFinancial Services and Markets Act 2000and on giving not less than 60 days noticeto shareholders in the Funds, usederivatives in pursuit of their investmentobjectives in the future. If derivatives areused for the purpose of meeting theinvestment objectives of the Funds it is notintended that the use of derivatives wouldcause the Net Asset Value of theFunds to have higher volatility or otherwisecause the existing risk profiles of the Fundsto change.gggggggggggggggggThe investment’s value may be affected by changes in exchange rates.The entire market of European stocks and shares might decline thus affecting theprices and values of the assets.Selecting stocks due to our ethical criteria means that the choice of stocks islimited to a sub set of the stock market and this could lead to greater volatility.The investment’s value may be affected by changes in exchange rates.The equity markets invested in might decline thus affecting the prices and values ofthe assets.Some of the investments may be in emerging markets, which can bemore volatile and carry risks associated with changes in their economies andpolitical status. Also they may not offer the same level of investor protection aswould apply in more developed jurisdictions.Selecting stocks due to our ethical criteria means that the choice of stocks islimited to a sub set of the stock market and this could lead to greater volatility.The Fund holds a variety of different fixed interest securities including governmentand corporate bonds, preference shares and permanent interest bearing shareswith a spread of durations. The Fund may invest in index or inflation linked bonds aswell as conventional fixed interest instruments. Some of the bonds hold creditratings however the Fund also invests in unrated bonds and other fixed interestinstruments.The investment’s value may be affected by changes in inflation and interest rates.An issuer of fixed interest stock may default, so causing a reduction in the capitalvalue and income value of the Fund.The annual management charge is taken from capital not income so the capitalvalue of the Fund could be reduced over time.Selecting stocks due to our ethical criteria means that the choice of stocks islimited to a sub set of the stock market and this could lead to greater volatility.Most of the assets will be invested in the UK stock market so could be affected byany change in this market.The Fund holds Corporate and Government bonds of a spread of durations.The various bonds have a spread of different security ratings as the investmentmanagers do not set minimum security standards for such bonds.The annual management charge is taken from capital not income so the capitalvalue of the Fund could be reduced over time.An issuer of fixed interest stock may default, so causing a reduction in the capitaland income value of the Fund.The investment’s value may be affected by changes in exchange rates andinterest rates.gMost of the assets will be invested in the UK stock market so could be affected byany change in this market.

6Amity UK FundECCLESIASTICAL Investment FundsReport of the Authorised Corporate DirectorThis review covers the year from 1 January 2009 to 31 December 2009.g Over the course of the year the share price of the Amity UK Fund rose by27.6%* with income reinvested, compared to a rise of 30.1% in the FTSEAll Share Index measured on a similar basis and 30.4%* in the IMA UK AllCompanies Sector Average.g Cash balances at 31 December 2009 were 4.8%.g Good performances came from holdings in general retailers such as Next,Dunelm and Marks & Spencer which benefited from stronger than expectedretail sales. China Shineway (pharmaceuticals), Standard Chartered (banks),Rentokil (support Services) and Volex (engineering) were also among the bestperforming companies. On the debit side, the weak housing market and slumpin office construction had a negative impact on the performance of the buildingmerchants, SIG and Wolseley and on the home builder, Berkeley Group.Several defensive holdings also fell in value over the year including UnitedUtilities, Severn Trent and Cable & Wireless.g Fund activity included purchases in Astra Zeneca (pharmaceuticals), HSBCand Standard Chartered (banks), Booker (food wholesale) and National Grid(utilities). The Fund also increased holdings in companies involved in affordablehousing including Galliford Try, Mears, WSP Group and Morgan Sindall. Therewere numerous rights issues during the year as companies attempted tostrengthen their balance sheets amid the economic and financial uncertainty.The rights issues the Fund participated in included Land Securities, BritishLand, Cookson, Marshalls, HSBC, Lloyds and Holidaybreak.g The Fund benefited from the proceeds of the takeover of BPP Holdings. TheFund took some profits in holdings of Dechra Pharmaceuticals and GreatPortland Estates.ProspectsThe economic environment remains challenging and it is possible that there willbe further bad news to come. Consequently the Fund will continue to follow acautious approach to investment, maintaining a bias towards the more defensivesectors. The weakness of Sterling should support the performance of companieswhich generate a high proportion of their revenues overseas. Despite thedisappointing outcome of the Copenhagen Summit, we believe that there arestill good opportunities to invest in companies providing services or productsin environmental markets particularly energy conservation, pollution control andwater treatment.Asset allocation by sectorat 31 December 2009The figures in brackets show allocation at 31 December 2008Healthcare14.8% (14.2%)Financials18.3% (20.5%)Performance1601501401301201101009080706031/12/0431/12/0430/06/0530/06/05Telecommunications5.8% (7.0%)31/12/0531/12/05Amity UK Fund30/06/0630/06/06Utilities4.7% (6.0%)Consumer Services22.4% (21.7%)IMA UK All Companies Sector Average31/12/0631/12/06EcclesiasticalAmityUKAOil & Gas4.7% (5.0%)Consumer Goods3.2% (3.3%)Industrials21.9% (18.7%)Figures exclude cashGraph showing the growth of the Amity UK Fund compared to IMA UK AllCompanies Sector Average from 31 December 2004 to 31 Dec 2009,mid-to-mid basis excluding initial charges with net income reinvested for abasic rate UK taxpayer. Prices re-based to 100. Source: Morningstar.30/06/0730/06/0731/12/0731/12/0730/06/0830/06/08(IMA)UKAllCompanies31/12/0831/12/0830/06/0930/06/09Basic Materials2.5% (2.0%)Technology1.7% (1.6%)31/12/0931/12/09* mid-to-mid basis excluding initial charges with net income reinvested for a basicrate UK taxpayerPerformance and rankingAmity UKFundIMA UK AllCompaniesSector AverageGrowth Rank Growth Number31/12/08 - 31/12/09 27.6% 174 30.4% 30631/12/07 - 31/12/08 -30.9% 159 -31.6% 29831/12/06 - 31/12/07 -4.3% 250 2.3% 28131/12/05 - 31/12/06 20.7% 54 17.8% 25931/12/04 - 31/12/05 16.6% 222 21.2% 239Table showing % growth and ranking of the Amity UK Fund against IMA UKAll Companies Sector Average and total number of funds. Figures comparedon a mid-to-mid basis excluding initial charges with net income reinvestedfor a basic rate UK taxpayer. Source: Morningstar.

ECCLESIASTICAL Investment Funds 7Major holdingsNet income distribution/accumulationTop ten holdings12345678Percentage oftotal net assets at31 December 2009Morrison (Wm) Supermarkets 3.00%Tesco 2.75%Dunelm Group 2.65%GlaxoSmithKline 2.63%Dechra Pharmaceuticals 2.44%BG Group 2.36%Centrica 1.92%Halma 1.83%Net income Pence per share Per £1,000 investeddistribution/ at 2 January 2005 (£)accumulation2009Share Class A 1.8699 16.4026Share Class B 2.7581 24.1093Share Class C 3.7065 22.02322008Share Class A 3.1623 27.7395Share Class B 5.0377 44.0358Share Class C 5.6199 33.39222007910China Shineway Pharmaceuticals 1.81%Smith & Nephew 1.76%Share Class A 2.0667 18.1289Share Class B 3.2175 28.1250Share Class C 4.0555 24.0969Total expense ratio at 31 December 2009Share Class A Share Class B Share Class C1.63% 0.88% 1.38%Total expense ratio at 31 December 2008Share Class A Share Class B Share Class C1.70% 0.82% 1.32%2006Share Class A 2.3102 20.2649Share Class B 3.3217 29.0358Share Class C 4.1832 24.85562005Share Class A 1.6453 14.4325Share Class B 2.4476 21.3951Share Class C 3.1334 18.6179Portfolio turnover rate31/12/09 31/12/086.86% 25.61%Please note: Stocks and shares should be viewed as a medium tolong-term investment, usually for a period of 5 years or more.The value of investments can fall as well as rise. Past performanceshould not be seen as an indication of future performance.Share prices and Fund size31 December 2009Share Class A 124.30 82.43 21,711,794 122.57 17,713,365Share Class B 124.00 81.92 2,793,589 121.70 2,295,436Share Class C 202.90 132.90 29,678,683 201.59 14,722,43631 December 2008Share Class A 147.40 89.93 16,205,291 97.58 16,607,885Share Class B 147.90 90.62 2,222,012 96.80 2,295,436Share Class C 229.40 141.00 22,867,597 157.18 14,548,73631 December 2007Share Class A 170.90 141.90 24,632,455 145.87 16,886,673Share Class B 172.00 143.20 725,537 146.30 495,935Share Class C 261.70 218.30 35,642,809 226.96 15,704,52531 December 2006Share Class A 157.00 130.70 26,455,387 153.26 17,002,224Share Class B 158.40 131.20 774,358 153.78 495,935Share Class C 237.20 196.20 37,342,172 234.37 15,696,66931 December 2005Share price rangeFund sizeHighest for the year Lowest for the year Net asset value Net asset value Number of(pence) (pence) (£) (pence per share) shares in issueShare Class A 131.70 113.40 21,082,753 131.02 16,091,862Share Class B 132.70 113.70 654,959 132.07 495,935Share Class C 195.90 167.40 30,609,906 194.93 15,702,963

ECCLESIASTICAL Investment Funds 9Major holdingsNet income distribution/accumulationTop ten holdings12345678Percentage oftotal net assets at31 December 2009Roche 3.66%Yara International 2.56%Swatch 2.37%Statoil Hydro 2.34%Metro 2.29%Bayer 2.26%Sanofi-Aventis 2.21%Munich Re 2.20%Net income Pence per share Per £1,000 investeddistribution/ at 2 January 2005 (£)accumulation2009Share Class A 1.8157 16.8432Share Class B 2.7406 25.2590Share Class C 2.2898 22.10232008Share Class A 2.3917 22.1865Share Class B 3.6317 33.4719Share Class C 2.9783 28.74812007910Suez Environnement 2.17%Carbone Lorraine 2.15%Share Class A 1.4973 13.8896Share Class B 2.9780 27.4470Share Class C 1.9729 19.0434Total expense ratio at 31 December 2009Share Class A Share Class B Share Class C1.62% 0.87% 1.37%Total expense ratio at 31 December 2008Share Class A Share Class B Share Class C1.81% 0.83% 1.37%2006Share Class A 1.1847 10.9898Share Class B 2.4454 22.5382Share Class C 1.6927 16.33882005Share Class A 0.8557 7.9378Share Class B 2.0418 18.8184Share Class C 1.4100 13.6100Portfolio turnover rate31/12/09 31/12/0829.60% 68.66%Please note: Stocks and shares should be viewed as a medium tolong-term investment, usually for a period of 5 years or more.The value of investments can fall as well as rise. Past performanceshould not be seen as an indication of future performance.Share prices and Fund size31 December 2009Share Class A 154.40 102.50 3,502,311 150.63 2,325,058Share Class B 156.00 103.40 29,201,429 151.76 19,242,265Share Class C 159.00 104.60 543,101 156.11 347,90031 December 2008Share Class A 161.60 105.10 2,285,970 128.92 1,773,153Share Class B 163.00 106.40 24,980,111 129.82 19,242,265Share Class C 161.00 105.30 405,031 131.38 308,30031 December 2007Share Class A 166.40 146.70 2,777,851 159.98 1,736,353Share Class B 168.10 148.00 31,004,613 161.13 19,242,264Share Class C 164.10 144.30 400,601 156.00 256,80031 December 2006Share Class A 149.70 125.40 2,480,635 148.60 1,669,298Share Class B 151.70 126.70 28,795,312 149.65 19,242,265Share Class C 146.40 122.10 360,138 146.22 246,30031 December 2005Share price rangeFund sizeHighest for the year Lowest for the year Net asset value Net asset value Number of(pence) (pence) (£) (pence per share) shares in issueShare Class A 129.10 106.10 2,034,598 126.85 1,603,956Share Class B 130.80 107.20 24,742,397 128.58 19,242,265Share Class C 124.90 102.20 277,630 122.82 226,050

10Amity International FundECCLESIASTICAL Investment FundsReport of the Authorised Corporate DirectorThis review covers the year from 1 January 2009 to 31 December 2009.g Over the course of the year the share price of the Amity International Fund roseby 26.0%*, compared to a rise of 19.6% in the FTSE World Index measured ona similar basis and 22.8%* in the IMA Global Growth Sector Average.g Cash balances were kept high throughout the period due to continued cautionover the outlook for global economy and at 31 December 2009 were 18.3%.g The Fund benefited from a high exposure to Asian companies as the regionhas weathered the global economic turmoil better than the developingcountries. Some China related holdings which performed strongly includedChina Shineway (pharmaceuticals), Lonking Holdings (engineering), HopFung (cardboard boxes), SIA Engineering (aircraft maintenance) and VTech(electronics). Other good performers included the UK engineering companyFenner, the Swiss watch manufacturer, Swatch and the Norwegian fertilisercompany, Yara.g Portfolio activity included the acquisition of shares in defensive sectors in themore developed markets including the purchase of pharmaceutical companiessuch as AstraZeneca, GlaxoSmithKline and Johnson & Johnson and foodretailers such as Carrefour, Metro, Morrison and Tesco. The Fund also investedin crop science and fertiliser companies, as growing populations and incomelevels in developing countries increase food demand, through purchases ofSyngenta and Yara. Other purchases in developed markets included Alstom,Aviva, BT Group and Swatch Group.g The Fund increased its exposure to Asia and especially to China related stocksas this economy was less affected and recovered more quickly from the globaldownturn. Acquisitions in this region included purchases of Advanced InfoServices (telecoms), China Resources Power (electricity generation), ChinaHongxing (sports shoes), DBS Group (banking), Li & Fung (trading) and JardineMatheson.g The Fund participated in a number of rights issues including AXA, MalayanBanking, Husqvarna and Wolseley. The Fund also benefited from proceeds fromthe takeover of Singapore Petroleum and British Energy. Sales included Segro,Lloyds Banking Group Rights and China Oriental.ProspectsCredit conditions have begun to ease and global equity markets have enjoyeda strong bull run, but there is little evidence of any meaningful improvement inWestern economic fundamentals. Japan has experienced many false dawnsover the last 20 years, but was unable to escape the economic consequencesof its banking crisis and the high debt levels in many Western economies islikely to impede recovery. Lower exposure to the financial industry meant thatAsia was less exposed to the banking crisis better positioned to deal with thethreat of deflation than many of the western economies and appears a moreattractive region for investment. The Fund continues to hold higher than normalcash balances and our intention is to adopt a gradual and selective strategy,endeavouring to increase the levels of net investment when the outlook seemsdarkest.Asset allocation by geographicalarea at 31 December 2009The figures in brackets show allocation at 31 December 2008Performance2001801601401201008060Europe39.6% (39.4%)31/12/0431/12/04Asia (ex Japan)34.6% (25.2%)30/06/0530/06/0531/12/0531/12/05Amity International FundIMA Global Growth Sector AverageGraph showing the growth of the Amity International Fund compared to IMAGlobal Growth Sector Average from 31 December 2004 to 31 December2009, mid-to-mid basis excluding initial charges with net income reinvested fora basic rate UK taxpayer. Prices re-based to 100. Source: Morningstar.Performance and ranking30/06/0630/06/0631/12/0631/12/06North & South America7.7% (11.0%)30/06/0730/06/07EcclesiasticalAmityInternational31/12/0731/12/0730/06/0830/06/08(IMA)GlobalGrowthAustralasia0.5% (0.9%)Japan0.3% (0.5%)United Kingdom17.3% (23.0%)Figures exclude cash31/12/0831/12/0830/06/0930/06/0931/12/0931/12/09* mid-to-mid basis excluding initial charges with net income reinvested for a basicrate UK taxpayerAmityInternationalFundIMA GlobalGrowth SectorAverageGrowth Rank Growth Number31/12/08 - 31/12/09 26.0% 53 22.8% 18431/12/07 - 31/12/08 -15.3% 11 -24.5% 17231/12/06 - 31/12/07 24.0% 5 10.0% 15531/12/05 - 31/12/06 17.6% 6 8.1% 14531/12/04 - 31/12/05 23.3% 92 26.1% 134Table showing % growth and ranking of the Amity International Fund againstIMA Global Growth Sector Average and total number of funds. Figurescompared on a mid-to-mid basis excluding initial charges with net incomereinvested for a basic rate UK taxpayer. Source: Morningstar.

ECCLESIASTICAL Investment Funds 11Major holdingsNet income distribution/accumulationTop ten holdings12345678910China Shineway Pharmaceuticals 3.12%Lonking Holdings 2.06%Yara International 2.04%Telefonica ADR 1.98%Statoil Hydro 1.97%GlaxoSmithKline 1.91%Roche 1.91%Sanofi-Aventis 1.77%Swatch 1.71%SIA Engineering 1.60%Total expense ratio at 31 December 2009Percentage oftotal net assets at31 December 2009Share Class A Share Class B Share Class C1.59% 0.84% 1.34%Total expense ratio at 31 December 2008Share Class A Share Class B Share Class C1.76% 0.83% 1.33%Net income Pence per share Per £1,000 investeddistribution/ at 2 January 2005 (£)accumulation2009Share Class A 2.4639 26.3801Share Class B 3.3116 35.2073Share Class C 2.6526 31.25492008Share Class A 2.8781 30.8148Share Class B 4.0841 43.4202Share Class C 3.3096 38.99612007Share Class A 0.9397 10.0610Share Class B 2.4907 26.4799Share Class C 1.5531 18.29982006Share Class A 1.0769 11.5300Share Class B 2.3119 24.5790Share Class C 1.4923 17.58342005Share Class A 0.8131 8.7056Share Class B 1.9441 20.6687Share Class C 1.3000 15.3175Portfolio turnover rate31/12/09 31/12/089.82% 73.36%Please note: Stocks and shares should be viewed as a medium tolong-term investment, usually for a period of 5 years or more.The value of investments can fall as well as rise. Past performanceshould not be seen as an indication of future performance.Share prices and Fund size31 December 2009Share Class A 170.40 112.70 19,276,414 167.14 11,532,949Share Class B 171.90 113.50 35,314,297 168.65 20,939,672Share Class C 166.40 108.80 708,049 164.74 429,80831 December 2008Share Class A 164.20 118.40 2,280,854 134.84 1,691,583Share Class B 165.20 119.80 28,174,598 135.63 20,773,269Share Class C 154.50 111.90 498,201 130.13 382,85031 December 2007Share Class A 166.20 131.70 1,974,871 162.92 1,212,188Share Class B 168.30 132.90 34,107,029 164.19 20,773,269Share Class C 155.50 123.00 450,983 147.94 304,85031 December 2006Share Class A 133.30 109.60 1,392,443 131.96 1,055,235Share Class B 135.20 110.90 27,618,711 132.95 20,773,269Share Class C 123.20 101.10 353,791 122.95 287,75031 December 2005Share price rangeFund sizeHighest for the year Lowest for the year Net asset value Net asset value Number of(pence) (pence) (£) (pence per share) shares in issueShare Class A 114.70 92.66 1,055,239 113.57 929,184Share Class B 116.40 93.33 23,702,311 114.10 20,773,269Share Class C 104.80 84.21 263,958 102.81 256,750

12Amity Sterling Bond FundECCLESIASTICAL Investment FundsReport of the Authorised Corporate DirectorThis review covers the year from 1 January 2009 to 31 December 2009.g Over the course of the year the share price of the Amity Sterling Bond Fundrose by 12.9%*, compared to a rise of 22.2%* in the IMA £ Strategic BondSector Average. The FTSE All-Stocks Index decreased by 1.2% measured on asimilar basis.g The Fund benefited from the narrowing in the yield advantage of corporatebonds compared to gilts during the year as confidence in the financial marketsimproved. The sharp fall in yield for stocks such as Hammerson 5 ¼% 2016,Next 5 7/8% 2016 and Rentokil 5 ¾% 2016 led to large rises in the price ofthe bonds.g Portfolio activity involved reducing the exposure of the Fund to governmentsecurities in order to take advantage of the high credit spreads available fromcorporate bonds and preference shares. Purchases included bonds fromRSA, British Telecom, Kingfisher, RaboBank and British Sugar. The Fund alsoinvested in issues from the International Finance Facility for Immunisation andBUPA. A purchase was also made in an Anglian Water floating rate note whichoffered some protection from inflation as its yield is linked to LIBOR.g The Fund sold holdings in Co-op after it merged with Britannia Building Societyas this increased our exposure to a single non-gilt credit to over 5% of Fundassets which was considered too high.ProspectsThere are strong reasons to believe that gilt yields will be pushed higher in 2010.Inflation is moving up as the depreciation of Sterling and rising commodity pricesfeed through to higher import prices. Loose monetary and fiscal policy could alsopush up domestically generated inflation. Furthermore the size of the UK budgetdeficit may encourage investors to demand higher yields. In this environment thefall in demand for gilts brought about by the end of quantitative easing should beexpected to drive yields higher.The Fund has no conventional gilt exposure and will continue to concentrateon opportunities in corporate bond markets. Whilst corporate bonds do notrepresent as compelling a case as they did at the start of 2009, we still believethey look good value, especially when compared to gilts and cash. We remainwary of the danger of higher inflation following the extensive use of quantitativeeasing, high budget deficits and loose monetary policy and are looking foropportunities to increase the exposure of the Fund to index-linked bonds. Overallthe aim of the Fund will be to maintain a balanced and diversified portfolio, with asignificant degree of income security.Asset allocation by Bond Ratingat 31 December 2009The figures in brackets show allocation at 31 December 2008BB3.7% (0.0%)Performance1151101051009590858011/04/200811/04/0811/05/200811/05/0811/06/200811/06/08Unrated24.6% (30.4%)BBB37.0% (34.5%)11/07/200811/07/0811/08/200811/08/0811/09/200811/09/08Amity Sterling Bond Fund11/10/200811/10/0811/11/200811/11/08Cash6.4% (0.7%)IMA £ Strategic Bond Sector Average11/12/200811/12/0811/01/200911/01/0911/02/200911/03/200911/02/09EcclesiasticalAmitySterlingBondAAA4.6% (8.4%)A21.1% (26.0%)AA2.6% (0.0%)Graph showing the growth of the Amity Sterling Bond Fund compared toIMA £ Strategic Bond Sector Average from 11 April 2008 to 31 Dec 2009,mid-to-mid basis excluding initial charges with net income reinvested for abasic rate UK taxpayer. Prices re-based to 100. Source: Morningstar.11/03/0911/04/200911/04/0911/05/200911/05/0911/06/200911/06/09(IMA)£StrategicBond11/07/200911/07/0911/08/200911/08/0911/09/200911/09/0911/10/200911/10/0911/11/200911/11/0911/12/200911/12/09* mid-to-mid basis excluding initial charges with net income reinvested for a basicrate UK taxpayerPerformance and rankingAmity SterlingBond FundIMA £ StrategicBond SectorAverageGrowth Rank Growth Number31/12/08 - 31/12/09 12.9% 42 22.2% 6231/12/07 - 31/12/08 N/A N/A N/A N/ATable showing % growth and ranking of the Amity Sterling Bond Fundagainst IMA £ Strategic Bond Sector Average and total number of funds.Figures compared on a mid-to-mid basis excluding initial charges with netincome reinvested for a basic rate UK taxpayer. Source: Morningstar.

14Higher Income FundECCLESIASTICAL Investment FundsReport of the Authorised Corporate DirectorThis review covers the year from 1 January 2009 to 31 December 2009.g Over the course of the year the share price of the Higher Income Fund roseby 23.0%*, compared to a rise in the IMA UK Equity & Bond Income SectorAverage of 19.3%*. The FTSE All-Share Index rose 30.1% and the FT All-StockGovernment Securities Index decreased by 1.2%, both on a similar basis.g Cash balances increased over the year and at 31 December 2009 reached6.9%.g The performance of the Fund benefited from the strong returns from UKcompanies including Fenner (engineering), Marks & Spencer, SpirentCommunications (telecom equipment) and Yule Catto (chemicals). SomeChina related equities also generated good returns including China Shineway,Hop Fung and Ta Yang. The Fund also benefited from the strong performanceof corporate bonds, which rose in value as credit spreads fell. In contrast,some of the worst performing holdings included large, high yielding, defensivecompanies, such as Cable & Wireless, Ladbrokes, RSA Insurance, Sainsburyand Severn Trent.g The bond weighting fell from 57.7% to 45.8% as most new investmentwas targeted towards equities. New purchases of corporate bonds mainlyoccurred at the start of the year when credit spreads were at their widest.Equity investment was mainly in high yielding defensive equities including thepharmaceutical companies, AstraZeneca, GlaxoSmithKline and Roche, thebrewer, Diageo, and the telecommunications companies, Cable & Wireless andBT Group. The Fund also invested in the insurance industry through purchasesof Aviva, RSA Insurance and Prudential. The Fund reduced its gilt holdings toraise cash for re-investment in other areas. The Fund also received cash fromthe takeover of British Energy.ProspectsThe ‘Great Recession’ of 2009 proved less catastrophic than many had feared.Though growth has stabilised, it appears fragile and anaemic. If it were not forGovernment support and corporate restocking, demand, in the West at least,would probably still be falling. Many of the imbalances which caused the crisisremain unresolved. Despite the liquidity and monetary stimuli, property pricescontinue to fall in most countries. Banking stresses still persist, made worse by thehigh level of over-indebtedness in the West.We are continuing with the strategy that served us well during the marketdownturn, with higher than normal fixed interest exposure and overweight positionsto those sectors that should prove resilient in the event that there is a furthereconomic downturn. We prefer Asian over Western focussed companies withSterling’s weakness providing extensive opportunities for profitable expansion.Asset allocation at 31 December 2009The figures in brackets show allocation at 31 December 2008Performance1601501401301201101009080706031/12/0431/12/0430/06/0530/06/05Fixed Interest43.1% (56.1%)31/12/0531/12/0530/06/0630/06/06Higher Income Fund31/12/0631/12/06EcclesiasticalHigherIncomeIMA UK Equity & Bond Income Sector AverageNet Other Assets(Inc cash)7.3% (1.8%)Equities49.6% (42.1%)Graph showing the growth of the Higher Income Fund compared to IMA UKEquity & Bond Income Sector Average from 31 Dec 2004 to 31 Dec 2009,mid-to-mid basis excluding initial charges with net income reinvested for abasic rate UK taxpayer. Prices re-based to 100. Source: Morningstar.30/06/0730/06/0731/12/0731/12/0730/06/0830/06/08(IMA)UKEquity&BondIncome31/12/0831/12/0830/06/0930/06/0931/12/0931/12/09* mid-to-mid basis excluding initial charges with net income reinvested for a basicrate UK taxpayerPerformance and rankingHigher IncomeFundIMA UK Equity& Bond IncomeSector AverageGrowth Rank Growth Number31/12/08 - 31/12/09 23.0% 2 19.3% 2131/12/07 - 31/12/08 -12.4% 2 -22.3% 2031/12/06 - 31/12/07 7.7% 1 0.5% 2031/12/05 - 31/12/06 12.5% 12 13.4% 2031/12/04 - 31/12/05 17.9% 7 17.3% 19Table showing % growth and ranking of the Higher Income Fund against IMAUK Equity & Bond Income Sector Average and total number of funds.Figurescompared on a mid-to-mid basis excluding initial charges with net incomereinvested for a basic rate UK taxpayer. Source: Morningstar.

ECCLESIASTICAL Investment Funds 15Major holdingsNet income distribution/accumulationTop ten holdings12345678Percentage oftotal net assets at31 December 2009Treasury 3.25% 07/12/2011 9.68%Treasury 4.5% 07/03/2013 8.57%China Shineway Pharmaceuticals 2.16%Fenner 1.72%GlaxoSmithKline 1.64%Roche-Finance 5.375% 29/08/2023 1.55%National Grid 3.603% 08/07/2018 1.48%Vodafone 1.48%Net income Pence per share Per £1,000 investeddistribution/ at 2 January 2005 (£)accumulation2009Share Class A 3.7933 45.7024Share Class B 3.8714 46.3863Share Class C 7.0482 56.02702008Share Class A 4.7734 57.5108Share Class B 4.7072 56.4007Share Class C 8.3452 66.33702007910General Accident 7.875% 1.19%Prudential 0.99%Share Class A 3.8319 46.1675Share Class B 5.5871 66.9434Share Class C 6.3119 50.1741Total expense ratio at 31 December 2009Share Class A Share Class B Share Class C1.38% 0.88% 1.13%Total expense ratio at 31 December 2008Share Class A Share Class B Share Class C1.43% 0.83% 1.08%2006Share Class A 4.2744 51.7954Share Class B 4.4063 52.7954Share Class C 6.8243 54.24722005Share Class A 3.2060 38.6265Share Class B 3.1797 38.0985Share Class C 5.0947 40.4984Portfolio turnover rate31/12/09 31/12/0814.27% 78.01%Please note: Stocks and shares should be viewed as a medium tolong-term investment, usually for a period of 5 years or more.The value of investments can fall as well as rise. Past performanceshould not be seen as an indication of future performance.Share prices and Fund size31 December 2009Share Class A 106.10 81.53 42,072,173 102.80 40,927,969Share Class B 106.60 81.66 15,159,549 103.39 14,662,423Share Class C 194.90 147.10 7,021,025 193.52 3,627,99431 December 2008Share Class A 105.50 83.41 25,703,717 86.42 29,742,478Share Class B 105.20 83.24 12,088,200 86.49 13,976,476Share Class C 180.70 144.20 4,692,880 155.99 3,008,39431 December 2007Share Class A 111.70 101.00 27,889,243 104.11 26,788,998Share Class B 112.80 101.70 13,689,532 103.56 13,218,959Share Class C 185.30 166.20 4,389,221 168.18 2,609,89431 December 2006Share Class A 104.60 92.55 23,379,118 100.82 23,188,583Share Class B 105.20 92.88 1,267,627 101.40 1,250,129Share Class C 166.10 145.60 3,534,766 165.66 2,132,89431 December 2005Share price rangeFund sizeHighest for the year Lowest for the year Net asset value Net asset value Number of(pence) (pence) (£) (pence per share) shares in issueShare Class A 96.41 82.66 17,347,997 93.30 18,593,451Share Class B 96.49 83.59 1,166,778 93.33 1,250,129Share Class C 146.20 125.20 2,654,065 142.47 1,862,894

16UK Equity Growth FundECCLESIASTICAL Investment FundsReport of the Authorised Corporate DirectorThis review covers the year from 1 January 2009 to 31 December 2009.g Over the course of the year the share price of the UK Equity Fund rose by24.2%*. The FTSE All Share Index rose 30.1% on a similar basis and the IMAUK All Companies Sector Average increased by 30.4%*.g At 31 December 2009, 55.0% of the fund was invested in FTSE 100companies, 24.7% in mid cap companies and 14.8% in Smaller UK companies.Cash balances at 31 December 2009 were 5.5% (31 December 2008: 16.7%).g Good performances came from many of the smaller companies in the portfolioincluding Volex (engineering), Pace (electronics), Dunelm (general retail) andSpirent (telecom equipment). Some of the larger companies to perform stronglycompared to the market included Rentokil (support services), Next (generalretail), Standard Chartered (banks) and Prudential (life assurance). Amid theslowdown in the construction industry, Wolseley, Balfour Beatty and Berkeleyall lagged the index. In the sharp market rally some of the large defensivecompanies, such as Sainbury, Morrison Supermarkets, Cable & Wireless, BTand National Grid, underperformed as investors switched into more cyclicalsectors.g Fund activity during the year included the purchase of companies in the realestate sector, such as Songbird Estates, Quintain Estates & Development andLondon & Stamford which appear cheap following the collapse in value of theproperty sector during the financial crisis. The Fund also sought to increaseexposure to companies with stable earnings that were placed to withstandthe difficult economic environment including Booker (food wholesale), AstraZeneca (pharmaceuticals) and Cable & Wireless (telecoms). Other purchasesincluded Galiform, Intec, Melrose and Valiant Petroleum.g The outlook for the retail sector remains poor as some of the financial stimuliput in place at the height of the financial crisis are slowly withdrawn and theFund made sales of Marks & Spencer, Home Retail and Next. The Fund madesome disposals in the life assurance sector of Prudential and Legal & Generalthough these were balanced by purchases of Friends Provident and Resolution.Prospects2010 is shaping up to be a tug of war between economic growth driven fromemerging markets and the likelihood of monetary and fiscal tightening in developedmarkets, a potent mix which could lead to a period of range bound trading. TheFund will remain focused on companies able to demonstrate earnings and balancesheet resilience.* mid-to-mid basis excluding initial charges with net income reinvested for a basicrate UK taxpayerAsset allocation at 31 December 2009The figures in brackets show allocation at 31 December 2008Consumer Goods9.8% (10.7%)Healthcare8.6% (7.2%)Financials13.1% (12.7%)Performance1601501401301201101009080706031/12/0431/12/0430/06/0530/06/0531/12/0531/12/05UK Equity Growth Fund30/06/0630/06/06Oil & Gas9.2% (10.6%)IMA UK All Companies Sector Average31/12/0631/12/06EcclesiasticalUKEquityGrowthTechnology7.3% (2.6%)Consumer Services17.2% (17.8%)Telecommunications4.0% (4.5%)Utilities3.0% (9.7%)Basic Materials1.8% (2.4%)Industrials26.0% (21.8%)Figures exclude cashGraph showing the growth of the UK Equity Growth Fund compared to IMAUK All Companies Sector Average from 31 Dec 2004 to 31 Dec 2009,mid-to-mid basis excluding initial charges with net income reinvested for abasic rate UK taxpayer. Prices re-based to 100. Source: Morningstar.30/06/0730/06/0731/12/0731/12/0730/06/0830/06/08(IMA)UKAllCompanies31/12/0831/12/0830/06/0930/06/0931/12/0931/12/09Performance and rankingUK EquityGrowth FundIMA UK AllCompaniesSector AverageGrowth Rank Growth Number31/12/08 - 31/12/09 24.2% 235 30.4% 30631/12/07 - 31/12/08 -28.4% 78 -31.6% 29831/12/06 - 31/12/07 -1.4% 219 2.3% 28131/12/05 - 31/12/06 17.5% 109 17.8% 25931/12/04 - 31/12/05 18.4% 203 21.2% 239Table showing % growth and ranking of the UK Equity Growth Fund againstIMA UK All Companies Sector Average and total number of funds. Figurescompared on a mid-to-mid basis excluding initial charges with net incomereinvested for a basic rate UK taxpayer. Source: Morningstar.

ECCLESIASTICAL Investment Funds 17Major holdingsNet income distribution/accumulationTop ten holdings12345678Percentage oftotal net assets at31 December 2009Pace 3.81%GlaxoSmithKline 3.30%BG Group 3.08%BP 2.66%British American Tobacco 2.51%Compass 2.35%Next 2.35%AstraZeneca 2.10%Net income Pence per share Per £1,000 investeddistribution/ at 2 January 2005 (£)accumulation2009Share Class A 1.4307 14.4486Share Class B 2.4095 23.9275Share Class C 2.3486 20.82092008Share Class A 2.5371 25.6221Share Class B 3.7039 36.7815Share Class C 3.5753 31.69592007910Unilever 2.08%Vodafone 2.06%Share Class A 1.4932 15.0798Share Class B 2.8197 28.0010Share Class C 2.4733 21.9264Total expense ratio at 31 December 2009Share Class A Share Class B Share Class C1.61% 0.86% 1.36%Total expense ratio at 31 December 2008Share Class A Share Class B Share Class C1.77% 0.80% 1.33%2006Share Class A 2.4795 25.0404Share Class B 3.6243 35.9911Share Class C 3.4104 30.23402005Share Class A 1.3765 13.9012Share Class B 2.4749 24.5770Share Class C 2.1684 19.2234Portfolio turnover rate31/12/09 31/12/0839.30% 24.42%Please note: Stocks and shares should be viewed as a medium tolong-term investment, usually for a period of 5 years or more.The value of investments can fall as well as rise. Past performanceshould not be seen as an indication of future performance.Share prices and Fund size31 December 2009Share Class A 111.70 77.30 6,795,703 109.82 6,188,284Share Class B 114.00 78.60 44,777,812 111.56 40,138,383Share Class C 140.30 96.02 10,523,474 138.94 7,573,91531 December 2008Share Class A 130.00 82.37 5,340,586 89.72 5,952,503Share Class B 132.20 84.20 36,548,042 91.06 40,138,383Share Class C 156.40 100.20 8,228,024 111.36 7,388,51531 December 2007Share Class A 145.90 124.40 7,660,856 128.82 5,946,983Share Class B 148.90 127.40 50,948,859 130.88 38,927,667Share Class C 173.20 148.80 12,993,472 154.96 8,385,25431 December 2006Share Class A 134.40 114.20 7,666,392 132.06 5,805,148Share Class B 137.50 116.60 52,338,729 134.29 38,974,952Share Class C 157.20 132.50 13,123,900 156.51 8,385,25431 December 2005Share price rangeFund sizeHighest for the year Lowest for the year Net asset value Net asset value Number of(pence) (pence) (£) (pence per share) shares in issueShare Class A 115.90 98.12 6,406,473 114.91 5,575,041Share Class B 118.60 99.92 45,306,602 116.25 38,974,952Share Class C 133.50 112.00 11,351,651 135.38 8,385,254

18ECCLESIASTICAL Investment FundsAuthorised StatusIf each sub-fund were an open-ended investment company in respectof which authorisation had been granted by the FSA, it would be asecurities company. The Fund is marketable to all retail investors.The Fund is a UCITS scheme which complies with the FSA’sCollective Investment Schemes Sourcebook.Certification of AccountsThe assets of each sub-fund will generally be treated asseparate from those of any other sub-fund and will be invested inaccordance with the investment objective and policy applicable tothat sub-fund. As each sub-fund is not a legal entity, if the assetsattributable to any sub-fund were insufficient to meet the liabilitiesascribed to it, the shortfall may have to be met out of the assetsfrom other sub-funds.Please note that shareholders are not liable for the debts ofEcclesiastical Investment Funds.MH Tripp, Directorm Hews, DirectorFor and on behalf of Ecclesiastical Investment Management Limited.Authorised Corporate Director of Ecclesiastical Investment Funds.23 March 2010

ECCLESIASTICAL Investment Funds 19Statement of the Authorised Corporate Director’s ResponsibilitiesThe Authorised Corporate Director (“ACD”) of EcclesiasticalInvestment Funds (“Company”) is responsible for preparing theAnnual Report and the financial statements in accordance withthe Open-Ended Investment Companies Regulations 2001 (“theOEIC Regulations”), the Financial Services Authority’s CollectiveInvestment Schemes’ Sourcebook (“COLL”) and the Company’sInstrument of Incorporation.The OEIC Regulations and COLL require the ACD to preparefinancial statements for each annual accounting period which:• are in accordance with United Kingdom Generally AcceptedAccounting Practice (United Kingdom Accounting Standardsand applicable law) (“UK GAAP”) and the Statement ofRecommended Practice: “Financial Statements of AuthorisedFunds” (“SORP”) issued by the Investment ManagementAssociation (“IMA”) in November 2008; and• give a true and fair view of the financial position of theCompany and each of its sub-funds as at the end of thatperiod and the net revenue and the net capital gains or losseson the property of the Company and each of its sub-funds forthat period.In preparing the financial statements, the ACD is required to:• select suitable accounting policies and then apply themconsistently;• make judgements and estimates that are reasonable andprudent• state whether the applicable IMA SORP has been followed;• state whether applicable UK Accounting Standards have beenfollowed; and• prepare the financial statements on the going concern basisunless it is inappropriate to presume that the Company willcontinue in operation.The ACD is responsible for keeping proper accounting recordsthat disclose with reasonable accuracy at any time the financialposition of the Company and enable them to ensure that thefinancial statements comply with the applicable IMA SORP andUK GAAP. The ACD is also responsible for the system of internalcontrols, for safeguarding the assets of the Company and fortaking reasonable steps for the prevention and detection of fraudand other irregularities.In accordance with COLL 4.5.8BR, the Annual Report and theaudited financial statements were approved by the board ofdirectors of the Authorised Corporate Director of the Companyand authorised for issue on 23 March 2010.MH Tripp, Directorm Hews, DirectorFor and on behalf of Ecclesiastical Investment ManagementLimitedAuthorised Corporate Director of Ecclesiastical Investment Funds23 March 2010Statement of the Depositary’s ResponsibilitiesThe Depositary is responsible for the safekeeping of all of theproperty of the Company (other than tangible moveable property)which is entrusted to it and for the collection of revenue thatarises from that property.It is the duty of the Depositary to take reasonable care to ensurethat the Company is managed in accordance with the FinancialServices Authority’s Collective Investment Schemes’ Sourcebook,as amended (“COLL”), the Open-Ended Investment CompaniesRegulations 2001 (“SI 2001/1228”), as amended (“the OEICRegulations”), the Company’s Instrument of Incorporation andProspectus in relation to the pricing of, and dealings in, shares inthe Company; the application of the revenue of the Company; andthe investment and borrowing powers and restrictions applicableto the Company.Report of the Depositary to the Shareholders of the CompanyHaving carried out such procedures as we considered necessaryto discharge our responsibilities as Depositary of the Company,it is our opinion based on the information available to us and theexplanations provided, that in all material respects the Company,acting through the Authorised Corporate Director:ii)has observed the investment and borrowing powers andrestrictions applicable to the Company.i) has carried out the issue, sale, redemption, cancellationand calculation of the price of the Company’s shares andthe application of the Company’s revenue, in accordancewith COLL and, where applicable, the OEIC Regulations,the Instrument of Incorporation and the Prospectus of theCompany; andFor and on behalf of BNY Mellon Trust & Depositary (UK) Limited23 March 2010

20ECCLESIASTICAL Investment FundsIndependent Auditors’ Report to the Shareholders ofThe Ecclesiastical Investment FundsWe have audited the financial statements of EcclesiasticalInvestment Funds (the “Company”) for the year ended 31 December2009 which comprise the Aggregated Statement of Total Return,the Aggregated Statement of Change in Net Assets Attributableto Shareholders, the Aggregated Balance Sheet, the related notes1 to 16 and for each sub-fund: the Statement of Total Return, theStatement of Change in Net Assets Attributable to Shareholders,the Balance Sheet, the related notes, and the distribution tables.These financial statements have been prepared under theaccounting policies set out therein.This report is made solely to the shareholders of the Company, asa body, in accordance with Paragraph 4.5.12R of the CollectiveInvestment Schemes Sourcebook of the Financial ServicesAuthority. Our audit work has been undertaken so that we mightstate to the Company’s shareholders those matters we are requiredto state to them in an auditors’ report and for no other purpose. Tothe fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the Company and the Company’sshareholders as a body, for our audit work, for this report, or for theopinions we have formed.Respective Responsibilities of the Depositary, theAuthorised Corporate Director (ACD) and the AuditorsAs described in the Statement of Depositary’s Responsibilitiesand the Statement of ACD’s Responsibilities, the Depositary isresponsible for safeguarding the property of the Company and theACD is responsible for the preparation of financial statements,which are required to be prepared in accordance with applicablelaw, United Kingdom Accounting Standards (United KingdomGenerally Accepted Accounting Practice), the Statement ofRecommended Practice: “Financial Statements of AuthorisedFunds” issued by the Investment Management Association inNovember 2008, the Collective Investment Schemes Sourcebookand the Instrument of Incorporation.Our responsibility is to audit the financial statements inaccordance with relevant legal and regulatory requirements andInternational Standards on Auditing (UK and Ireland) and therequirements of the Collective Investment Schemes Sourcebook.We report to you our opinion as to whether the financialstatements give a true and fair view and are properly preparedin accordance with the Statement of Recommended Practice“Financial Statements of Authorised Funds”, the CollectiveInvestment Schemes Sourcebook and the Instrument ofIncorporation. We also report to you whether, in our opinion,proper accounting records for the Company and the subfunds have been kept, whether the financial statements arein agreement with the accounting records, whether we havereceived all the information and explanations, which, to the bestof our knowledge and belief, are necessary for the purpose ofour audit and whether the information disclosed in the AnnualReport for the purpose of complying with Paragraph 4.5.9R of theCollective Investment Schemes Sourcebook is consistent with thefinancial statements.We read the other information contained in the Annual Reportas described in the contents section, and consider whether it isconsistent with the audited financial statements. We consider theimplications for our report if we become aware of any apparentmisstatements or material inconsistencies with the financialstatements. Our responsibilities do not extend to any furtherinformation outside the Annual Report.Basis of OpinionWe conducted our audit in accordance with InternationalStandards on Auditing (UK and Ireland) issued by the AuditingPractices Board. An audit includes examination on a test basis, ofevidence relevant to the amounts and disclosures in the financialstatements. It also includes an assessment of the significantestimates and judgements made by the ACD in the preparation ofthe financial statements and of whether the accounting policiesare appropriate to the Company’s circumstances, consistentlyapplied and adequately disclosed.We planned and performed our audit so as to obtain allinformation and explanations which we considered necessary inorder to provide us with sufficient evidence to give reasonableassurance that the financial statements are free from materialmisstatement, whether caused by fraud or other irregularityor error. In forming our opinion we also evaluated the overalladequacy of the presentation of information in the financialstatements.OpinionIn our opinion:• the financial statements give a true and fair view, inaccordance with United Kingdom Generally AcceptedAccounting Practice, of the financial position of the Companyand the sub funds as at 31 December 2009 and of the netrevenue and the net capital gains on the property of theCompany and the sub funds for the year ended 31 December2009;• the financial statements have been properly prepared inaccordance with the Statement of Recommended Practice“Financial Statements of Authorised Funds”, the CollectiveInvestment Schemes Sourcebook and the Instrument ofIncorporation;• proper accounting records for the Company and the sub fundshave been kept and the financial statements are in agreementwith those records;• we have received all the information and explanations which,to the best of our knowledge and belief, were necessary forthe purposes of our audit; and• the information disclosed in the Annual Report for the yearended 31 December 2009 for the purpose of complyingwith Paragraph 4.5.9R of the Collective Investment SchemesSourcebook is consistent with the financial statements.Deloitte LLPChartered Accountants & Registered AuditorsLondonUnited Kingdom23 March 2010

ECCLESIASTICAL Investment Funds 21Portfolio StatementAMITY UK FUNDat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %UNITED KINGDOM 84.99% (83.03%)UK Corporate Bonds 0.59% (1.47%)250,000 Barclays 14% 15/06/2019 317,663 0.59Total UK Corporate Bonds 317,663 0.59UK Equities 84.40% (81.56%)1,300,000 Advanced Fluid Connection* (Suspended 27/03/2006) 0 0.00374,500 AssetCo 243,425 0.4530,000 AstraZeneca 871,050 1.615,000 AVEVA 50,150 0.09155,000 Aviva 613,955 1.13180,483 Barclays 494,884 0.9135,000 Bellway 271,250 0.5045,000 Berkeley Group 381,150 0.70113,725 BG Group 1,279,406 2.3625,504 Biocompatibles International 56,619 0.10550,000 Booker 255,750 0.4770,000 Bradford & Bingley* (Suspended 30/09/2008) 0 0.00150,000 British Land 694,350 1.28130,000 British Polythene 338,000 0.62150,000 Brown (N) 374,550 0.69390,000 BT 529,620 0.98450,000 Cable & Wireless 629,100 1.1656,000 Cadbury 442,400 0.82200,000 Camper & Nicholsons Marina Investments 56,000 0.10190,000 Carillion 581,020 1.07372,000 Centrica 1,040,112 1.92200,000 Cobra Bio-Manufacturing 4,000 0.0165,000 Cookson 273,585 0.5075,000 Daily Mail & General Trust 313,800 0.58280,500 Dechra Pharmaceuticals 1,319,753 2.44225,000 Devro International 300,375 0.55115,000 Dignity 704,950 1.30260,000 Dolphin Capital 145,600 0.27372,243 DSG International 135,496 0.25350,000 Dunelm Group 1,435,000 2.65478,000 Elementis 243,780 0.45250,000 G4S plc 652,750 1.2086,666 Galliford Try 258,481 0.48115,000 Genus 775,675 1.43108,000 GlaxoSmithKline 1,424,520 2.63120,000 Great Portland Estates 352,560 0.65402,961 Halma 994,105 1.8343,825 Hansard Global 70,120 0.13170,000 Holidaybreak 384,625 0.7153,758 HSBC 383,563 0.71100,000 Hyder Consulting 195,000 0.36250,000 Impax Environmental Markets 295,250 0.5450,000 Impax Environmental Markets Warrants 10,500 0.02590,000 ING UK Real Estate 311,225 0.57190,000 International Personal Finance 397,670 0.7396,096 Invensys 286,558 0.53200,000 ITM Power 30,500 0.06

22ECCLESIASTICAL Investment FundsPortfolio StatementAMITY UK FUNDat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %UK Equities - continued110,000 Jardine Lloyd Thomson 527,450 0.9743,500 Johnson Matthey 666,420 1.2399,125 Johnson Service Group 21,808 0.0451,252 Keller 334,163 0.62180,000 Laird Group 232,560 0.4335,546 Land Securities 235,670 0.43844,200 Legal & General 661,853 1.22820,511 Lloyds Banking Group 413,538 0.76116,000 LSL Property Services 296,960 0.55150,000 Marks & Spencer 600,000 1.11247,688 Marshalls 210,535 0.39145,100 Mears Group 399,025 0.7496,000 Menzies (John) 285,120 0.53200,000 MITIE 459,400 0.8583,000 Morgan Sindall 490,945 0.91590,078 Morrison (Wm) Supermarkets 1,625,075 3.00266,666 National Express 506,665 0.9430,000 National Grid 202,050 0.3740,000 Next 835,200 1.54120,000 Northern Foods 80,460 0.1525,000 Ocean Power Technologies 132,500 0.24180,000 Office2office 255,600 0.47200,000 Oxford Instruments 400,000 0.74105,000 Pearson 936,075 1.73133,190 Pinewood Shepperton 170,483 0.3174,074 Plethora Solutions 8,148 0.0295,000 Provident Financial 891,100 1.64133,000 Prudential 844,550 1.5665,000 Quadnetics 94,250 0.1796,753 Reed Elsevier 489,086 0.90420,000 Rentokil Initial 481,740 0.8995,454 Rexam 275,862 0.5147,000 Royal Bank of Scotland 13,842 0.03230,000 Sage 510,370 0.94190,000 Sainsbury (J) 609,900 1.13143,650 Sales Activation Solution*† 35,913 0.0757,000 Severn Trent 621,870 1.15287,500 Shanks 386,688 0.71393,511 SIG 444,667 0.82150,000 Smith & Nephew 954,000 1.76290,000 Smith (DS) 365,400 0.6738,000 Smith (WH) Group 194,750 0.3625,920 Smith News 26,762 0.0542,000 Smiths Group 421,680 0.7865,000 Spectris 471,900 0.87165,000 St James’s Place 410,355 0.7650,890 Standard Chartered 797,192 1.47165,750 Standard Life 351,059 0.6513,760 Tandem 9,770 0.02425,768 Taylor Wimpey 163,410 0.30350,000 Tesco 1,490,825 2.752,433 Thompson Clive Investments*† 0 0.00195,000 Titan Europe 47,775 0.09

ECCLESIASTICAL Investment Funds 23Portfolio StatementAMITY UK FUNDat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %UK Equities - continued50,000 Trinity Mirror 76,000 0.14107,500 United Utilities 538,038 0.99655,000 Vodafone 933,048 1.72280,000 Volex 252,000 0.4728,800 Wolseley 361,440 0.6792,500 WSP 254,838 0.4780,000 Yell 31,192 0.06Total UK Equities 45,741,207 84.40Canada 0.59% (0.00%)16,000 Thomson-Reuters 319,149 0.59Total Canada 319,149 0.59France 0.50% (0.40%)12,027 Carbone Lorraine 271,933 0.50Total France 271,933 0.50Hong Kong 1.81% (0.92%)850,000 China Shineway Pharmaceuticals 981,900 1.81Total Hong Kong 981,900 1.81Ireland 0.58% (0.69%)200,000 Boundary Capital 3,573 0.0112,857 CRH 217,766 0.40320,000 Siteserv 18,581 0.03175,000 Veris 74,375 0.14Total Ireland 314,295 0.58Netherlands 0.66% (0.48%)10,000 Fugro 359,655 0.66Total Netherlands 359,655 0.66Norway 1.57% (1.32%)32,000 Statoil Hydro 498,416 0.9212,500 Yara International 354,563 0.65Total Norway 852,979 1.57Portugal 0.42% (0.44%)30,000 Portugal Telecom ADR 227,978 0.42Total Portugal 227,978 0.42Singapore 0.19% (0.20%)173,000 KS Energy Services 94,987 0.1843,250 KS Energy Services Warrants 3,830 0.01Total Singapore 98,817 0.19

24ECCLESIASTICAL Investment FundsPortfolio StatementAMITY UK FUNDat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %Spain 0.75% (0.89%)7,846 Telefonica ADR 408,751 0.75Total Spain 408,751 0.75Sweden 0.88% (0.80%)40,000 Getinge ‘B’ 474,170 0.88Total Sweden 474,170 0.88Thailand 0.44% (0.57%)150,000 Advanced Information Services 240,688 0.44Total Thailand 240,688 0.44United States 1.22% (1.49%)40,000 Pfizer 458,561 0.865,000 Waters Corporation 192,959 0.36Total United States 651,520 1.22Portfolio of Investments 94.60% (91.23%) 51,260,705 94.60net other assets 2,923,362 5.40Total net assets 54,184,067 100.00*Unapproved securities.†Unlisted.Unless otherwise stated, all investments are listed equities.Comparative percentage holdings by market value at 31 December 2008 are shown in brackets.

ECCLESIASTICAL Investment Funds 25Portfolio StatementAMITY EUROPEAN FUNDat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %UNITED KINGDOM 1.03% (2.37%)450,000 Advanced Fluid Connection* (Suspended 27/03/2006) 0 0.0086,842 Bodycote 138,687 0.42150,000 BT 203,700 0.61Total United Kingdom 342,387 1.03BELGIUM 0.78% (0.97%)12,500 Tessenderlo Chemie 260,071 0.78Total Belgium 260,071 0.78DENMARK 1.25% (0.00%)604,482 Ossur 417,239 1.25Total Belguim 417,239 1.25FINLAND 7.77% (6.54%)67,393 Amer Sports ‘A’ 416,012 1.2514,000 Cargotech ‘B’ 241,503 0.7330,000 Fortum 508,395 1.5337,608 Kemira 349,067 1.0510,000 Kone ‘B’ 267,553 0.8050,000 Nokia 398,426 1.2018,000 Vaisala ‘A’ 402,160 1.21Total Finland 2,583,116 7.77FRANCE 20.25% (20.30%)2,286 Cap Gemini 65,900 0.2031,658 Carbone Lorraine 715,794 2.1515,000 Carrefour 451,311 1.365,142 Cie de St-Gobain 175,702 0.5348,000 Credit-Agricole 531,068 1.6010,276 Environnement 192,318 0.5830,000 France Telecom 466,051 1.4012,053 Imerys 447,059 1.3415,000 Sanofi-Aventis 735,390 2.213,000 Schneider Electric 217,964 0.6610,772 Societe Generale 473,257 1.425,800 Sperian Protection 256,475 0.7750,000 Suez Environnement 721,365 2.1737,000 Vivendi 686,847 2.0723,000 Zodiac 596,674 1.79Total France 6,733,175 20.25GERMANY 22.27% (19.22%)7,500 Allianz 585,311 1.7615,000 Bayer 751,068 2.2617,000 Beiersdorf 699,800 2.1060,000 Carl Zeiss Meditec 664,102 2.0030,000 Commerzbank 157,718 0.4720,000 Deutsche Post 241,199 0.73

26ECCLESIASTICAL Investment FundsPortfolio StatementAMITY EUROPEAN FUNDat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %GERMANY - continued50,000 Deutsche Telekom 460,959 1.3955,000 Francotyp-Postalia 79,596 0.2420,000 Hannover Re 586,204 1.7647,000 Indus Holdings 503,839 1.528,500 Merck KGaA 492,882 1.4820,000 Metro 762,369 2.297,500 Munich Re 729,963 2.2012,000 Siemens 689,830 2.07Total Germany 7,404,840 22.27IRELAND 0.92% (0.47%)27,500 Allied Irish Banks 29,603 0.0950,000 Smurfitt Kappa 276,263 0.83Total Ireland 305,866 0.92ITALY 2.61% (2.88%)106,400 Enel 384,717 1.16180,000 Terna 480,791 1.45Total Italy 865,508 2.61NETHERLANDS 8.47% (5.41%)17,332 Ahold 143,220 0.4312,000 Fugro 431,586 1.3035,000 KPN 368,946 1.1137,000 Philips Electronics 687,508 2.0775,000 Reed Elsevier NV 570,035 1.7145,000 Wolters Kluwer 615,260 1.85Total Netherlands 2,816,555 8.47NORWAY 4.90% (2.97%)50,000 Statoil Hydro 778,774 2.3430,000 Yara International 850,951 2.56Total Norway 1,629,725 4.90PORTUGAL 0.66% (4.29%)79,300 Energias de Portugal 219,678 0.66Total Portugal 219,678 0.66SPAIN 3.51% (3.29%)48,000 Gas Natural SDG 646,843 1.9517,000 Telefonica 296,443 0.894,300 Telefonica ADR 224,016 0.67Total Spain 1,167,302 3.51

ECCLESIASTICAL Investment Funds 27Portfolio StatementAMITY EUROPEAN FUNDat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %SWEDEN 5.48% (6.16%)80,000 Ericsson ‘B’ 458,515 1.3859,232 Getinge ‘B’ 702,151 2.1171,211 Husqvarna ‘A’ 308,428 0.9484,000 Q-Med 347,748 1.05Total Sweden 1,816,842 5.48SWITZERLAND 9.91% (9.67%)20,000 Novartis 679,149 2.0411,500 Roche 1,215,459 3.665,000 Swatch 787,427 2.374,500 Zurich Financial Services 613,129 1.84Total Switzerland 3,295,164 9.91Portfolio of Investments 89.81% (84.55%) 29,857,468 89.81Net other assets 3,389,373 10.19Total net assets 33,246,841 100.00*Unapproved securitiesUnless otherwise stated, all investments are listed equities.Comparative percentage holdings by market value at 31 December 2008 are shown in brackets.

28ECCLESIASTICAL Investment FundsPortfolio StatementAmity INTERNATIONAL FUNDat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %United kingdom 14.15% (19.40%)15,000 AstraZeneca 435,525 0.79125,000 Aviva 495,125 0.90300,000 BT 407,400 0.74233,750 Centrica 653,565 1.18210,000 Electrocomponents 343,560 0.62400,000 Fenner 682,000 1.2380,000 GlaxoSmithKline 1,055,199 1.9150,000 HSBC 356,750 0.65350,000 ITV 188,300 0.34498,549 Lloyds Banking Group 251,269 0.45100,000 Marks & Spencer 400,000 0.72305,000 Middlefield Canadian Income Trust 204,350 0.37150,000 Morrison (Wm) Supermarkets 413,100 0.7524,181 Pearson 215,574 0.3935,000 Royal Bank of Scotland 10,308 0.02100,000 Segro 343,400 0.62130,000 Tesco 553,735 1.00500,000 Vodafone 712,250 1.298,000 Wolseley 100,400 0.18Total United Kingdom 7,821,810 14.15AUSTRALIA 0.42% (0.70%)300,000 Sigma Pharmaceuticals 164,752 0.3036,000 Telstra 68,644 0.12Total Australia 233,396 0.42FINLAND 1.78% (2.04%)12,000 Cargotech ‘B’ 207,003 0.3710,000 Kone ‘B’ 267,553 0.4823,000 Vaisala ‘A’ 513,871 0.93Total Finland 988,427 1.78FRANCE 7.00% (8.83%)10,000 Alstom 439,876 0.8017,762 AXA 263,398 0.482,285 Cap Gemini 65,872 0.1218,995 Carbone Lorraine 429,481 0.7815,000 Carrefour 451,311 0.827,980 Environnement 149,348 0.2720,000 Sanofi-Aventis 980,520 1.775,942 Schneider Electric 431,714 0.7810,000 Vivendi 185,634 0.3418,000 Zodiac 466,962 0.84Total France 3,864,116 7.00

ECCLESIASTICAL Investment Funds 29Portfolio StatementAmity INTERNATIONAL FUNDat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %GERMANY 4.90% (3.94%)50,000 Carl Zeiss Meditec 553,419 1.0015,000 Commerzbank 78,859 0.1435,000 Francotyp-Postalia 50,652 0.0936,393 Indus Holdings 390,132 0.7110,000 Merck KGaA 579,861 1.0514,000 Metro 533,658 0.979,000 Siemens 517,373 0.94Total Germany 2,703,954 4.90HONG KONG 14.48% (7.82%)2,500,000 Artinii China 205,996 0.376,000,000 China Hongxing Sports 504,779 0.91500,000 China Resouce Power 616,787 1.121,500,000 China Shineway Pharmaceuticals 1,732,764 3.121,062,000 Fujikon 134,234 0.2469,200 Hong Kong Aircraft Engineering 555,250 1.004,600,000 Hop Fung 467,351 0.853,000,000 Lerado 280,794 0.51150,000 Li & Fung 388,792 0.702,650,000 Lonking Holdings 1,146,896 2.061,000,000 Peace Mark Holdings* (Suspended 25/08/2008) 0 0.0010,000,000 Scud Group 711,986 1.295,300,000 Ta Yang 432,471 0.78202,500 TCL Multimedia 137,049 0.25120,000 Vtech Holdings 706,546 1.28Total Hong Kong 8,021,695 14.48JAPAN 0.28% (0.42%)12,000 ISB Corporation 48,360 0.095,800 Sony Corporation 103,819 0.19Total Japan 152,179 0.28KOREA 0.71% (0.74%)922 Samsung Electronics 391,957 0.71Total Korea 391,957 0.71MALAYSIA 1.56% (2.06%)290,036 Malayan Banking 359,951 0.65550,000 Pelikan International 136,516 0.25240,000 Tenaga Nasional 364,382 0.66Total Malaysia 860,849 1.56MEXICO 0.87% (1.62%)22,400 Telefonos De Mexico ADR 231,921 0.4222,400 Telmex International ADR 246,650 0.45Total Mexico 478,571 0.87

30ECCLESIASTICAL Investment FundsPortfolio StatementAmity INTERNATIONAL FUNDat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %NETHERLANDS 1.90% (2.01%)17,332 Ahold 143,220 0.267,000 Fugro 251,759 0.4614,500 Ordina 64,119 0.1237,500 Reed Elsevier NV 285,017 0.5222,000 Wolters Kluwer 300,794 0.54Total Netherlands 1,044,909 1.90NORWAY 4.01% (1.45%)70,000 Statoil Hydro 1,090,285 1.9740,000 Yara International 1,134,602 2.04Total Norway 2,224,887 4.01PORTUGAL 0.82% (1.16%)13,080 Portugal Telecom 99,671 0.1846,920 Portugal Telecom ADR 356,557 0.64Total Portugal 456,228 0.82SINGAPORE 8.29% (7.64%)70,000 DBS Group 476,707 0.86500,000 Goodpack 250,176 0.45125,000 Goodpack Warrants 25,184 0.05751,000 HI-P International 239,425 0.4330,000 Jardine Matheson 554,218 1.00809,000 KS Energy Services 444,188 0.80202,250 KS Energy Services Warrants 17,911 0.03700,000 MobileOne 585,810 1.06600,000 SIA Engineering 882,036 1.60350,000 Singapore Telecom 480,426 0.8750,000 United Overseas Bank 435,704 0.7950,000 Venture Corporation 195,713 0.35Total Singapore 4,587,498 8.29SPAIN 2.36% (3.59%)20,219 Banco Santander Central Hispano 208,529 0.3821,014 Telefonica ADR 1,094,761 1.98Total Spain 1,303,290 2.36SWEDEN 2.28% (2.79%)19,335 Electrolux ‘B’ 281,668 0.5175,000 Ericsson ‘B’ 429,858 0.7831,875 Getinge ‘B’ 377,854 0.688,927 Husqvarna ‘A’ 38,665 0.0729,301 Husqvarna ‘B’ 134,426 0.24Total Sweden 1,262,471 2.28

ECCLESIASTICAL Investment Funds 31Portfolio StatementAmity INTERNATIONAL FUNDat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %SWITZERLAND 7.29% (7.40%)25,000 Novartis 848,936 1.5410,000 Roche 1,056,921 1.916,000 Swatch 944,913 1.7116,000 Swiss Re 480,373 0.874,000 Syngenta 698,759 1.26Total Switzerland 4,029,902 7.29THAILAND 3.04% (2.78%)500,000 Advanced Information Services 802,294 1.45670,000 Hana Microelectronics 259,264 0.47550,000 Kiatnakin Bank 258,362 0.472,000,000 Krung Thai Bank 357,195 0.65Total Thailand 1,677,115 3.04UNITED STATES 5.41% (7.64%)30,000 AT&T 526,675 0.9511,000 Citigroup 22,587 0.0419,500 IMS Health 255,484 0.4612,000 Johnson & Johnson 482,978 0.878,000 Merck & Company 183,722 0.339,000 PepsiCo 342,022 0.6250,000 Pfizer 573,201 1.0413,700 Southern Company 286,068 0.526,100 Verizon Communications 126,352 0.235,000 Waters Corporation 192,959 0.35Total United States 2,992,048 5.41Portfolio of Investments 81.55% (84.03%) 45,095,302 81.55net other assets 10,203,459 18.45Total net assets 55,298,761 100.00*Unapproved securities.Unless otherwise stated, all investments are listed equities.Comparative percentage holdings by market value at 31 December 2008 are shown in brackets.

32ECCLESIASTICAL Investment FundsPortfolio StatementAmity sterling bond fundat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %UNITED KINGDOM 88.61% (95.21%)UK Corporate Bonds 80.52% (76.94%)400,000 Anglian Water 5.5% 10/10/2040 368,234 2.24151,000 Barclays 10% 21/05/2021 183,714 1.12350,000 British Land 6.75% 31/03/2011 361,126 2.18400,000 British Sugar 10.75% 02/07/2013 483,232 2.93400,000 British Telecom 6.625% 23/06/2017 416,059 2.53350,000 British Telecom 4.5% IL 25/04/2025 426,727 2.59450,000 BUPA 7.5% 07/04/2016 475,479 2.89400,000 Compass 6.375% 29/05/2012 427,986 2.60150,000 Co-Op Bank 13% Perp 175,701 1.07250,000 Co-Op Bank 5.5555% Perp 192,500 1.17350,000 Co-Op Group 5.875% 18/12/2013 359,558 2.18350,000 Coventry Building Society 12.125% PIBS 410,088 2.49400,000 E.ON 6% 30/10/2019 422,595 2.57400,000 Hammerson 5.25% 15/12/2016 389,078 2.36500,000 IFFIM 3.375% 15/05/2014 499,914 3.04400,000 Kingfisher 5.625% 15/12/2014 411,493 2.50400,000 Lewis (John) 10.5% 23/01/2014 482,912 2.93100,000 Manchester Building Society 6.75% PIBS 85,000 0.52100,000 Manchester Building Society 8% PIBS 83,000 0.50500,000 Marks & Spencer 5.625% 24/03/2014 513,317 3.12250,000 National Grid 4.1875% IL 14/12/2022 376,485 2.29350,000 National Grid Transco 6% 07/06/2017 370,421 2.25400,000 Nationwide Building Society 5.769% PIBS 288,318 1.7550,000 Nationwide Building Society 6% PIBS 38,000 0.23190,000 Nationwide Building Society 7.971% PIBS 181,450 1.10290,000 Newcastle Building Society 10.75% PIBS 278,400 1.69400,000 Next 5.875% 12/10/2016 411,186 2.50350,000 Northumbrian 6% 11/10/2017 367,804 2.23450,000 Nottingham Building Society 7.875% PIBS 382,500 2.32400,000 Pearson 7% 27/10/2014 438,763 2.66500,000 Rabobank 5.556% Perp 422,502 2.56400,000 Rentokil Initial 5.75% 31/03/2016 392,852 2.39250,000 RSA Insurance 9.375% 20/05/2039 291,850 1.77400,000 Smith Industries 7.25% 30/06/2016 432,136 2.62400,000 Tesco 5% 24/03/2023 370,021 2.25350,000 Thames Water 4.75% 30/06/2010 354,596 2.15400,000 United Utilities 5.25% 22/01/2010 400,556 2.43250,000 Vodafone 8.125% 26/11/2018 296,683 1.80Total UK Corporate Bonds 13,262,236 80.52UK Corporate Preference Shares 6.51% (9.95%)450,000 Aviva 8.75% 499,500 3.03100,000 Bristol Water 8.75% 133,000 0.81300,000 Coats International 6% 241,500 1.47200,000 RSA Insurance 7.375% 197,000 1.20Total UK Corporate Preference Shares 1,071,000 6.51

ECCLESIASTICAL Investment Funds 33Portfolio StatementAmity sterling bond fundat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %UK Government Bonds 1.58% (8.32%)100,000 Treasury 2.5% Index Linked 16/08/2013 260,040 1.58Total UK Government Bonds 260,040 1.58GERMANY 3.32% (4.54%)German Corporate Bonds 3.32% (4.54%)350,000 Bayer 5.625% 23/05/2018 356,580 2.16200,000 Siemens 6.125% 14/09/2066 191,503 1.16Total German Corporate Bonds 548,083 3.32lUXEMBOURG 1.28% (0.00%)luxembourg Corporate Bonds 1.28% (0.00%)200,000 Banque de Luxembourg (France Telecom) 6% 29/03/2012 210,821 1.28Total Luxembourg Corporate Bonds 210,821 1.28Portfolio of Investments 93.21% (99.75%) 15,352,180 93.21net other assets 1,119,074 6.79Total net assets 16,471,254 100.00debt Security Allocation is as follows:Percentage ofDebt Securities%debt Securities above investment grade 69.97debt Securities below investment grade (sub BBB or unrated) 32.03100.00Comparative percentage holdings by market value at 31 December 2008 are shown in brackets.

34ECCLESIASTICAL Investment FundsPortfolio Statementhigher income fundat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %UNITED KINGDOM 74.33% (78.68%)UK Corporate Bonds 23.03% (28.79%)250,000 Allied Domecq Financial Services 6.625% 18/04/2011 258,935 0.4030,000 Bank of Ireland 13.375% Perp 26,234 0.04226,000 Barclays 10% 21/05/2021 275,779 0.43300,000 Barclays 14% 15/06/2019 381,196 0.59500,000 BG Energy Capital 5.125% 07/12/2017 510,160 0.80400,000 British Land 6.75% 31/03/2011 412,996 0.64300,000 British Telecom 4.5% IL 25/04/2025 368,265 0.57500,000 British Telecom 7.5% 07/12/2016 573,076 0.89400,000 BUPA 7.5% 07/04/2016 423,723 0.66150,000 Cable & Wireless 8.75% 06/08/2012 161,070 0.25150,000 Centrica 5.5% 24/10/2016 154,999 0.24350,000 Centrica 5.875% 02/11/2012 376,699 0.59100,000 Cheltenham & Gloucester Building Society 11.75% Perp 90,000 0.1450,000 Clerical Medical 7.375% Perp 32,500 0.0550,000 Compass 7% 12/08/2014 55,301 0.09200,000 Co-Op Bank 13% Perp 235,398 0.37450,000 Co-Op Bank 5.5555% Perp 346,500 0.54500,000 Co-Op Group 5.875% 18/12/2013 514,730 0.80180,000 Coventry Building Society 12.125% PIBS 211,993 0.33250,000 Egg Bank 7.5% 09/12/2013 197,512 0.3140,000 First Hydro Finance 9% 31/12/2021 42,943 0.07200,000 General Electric 4.625% 18/01/2016 193,773 0.31350,000 Kingfisher 5.625% 15/12/2014 360,686 0.56204,000 Land Securities 5.292% 28/11/2015 210,106 0.33200,000 Leeds & Holbeck Building Society 13.375% PIBS 291,000 0.45500,000 Lewis (John) 6.375% 30/01/2012 528,440 0.82300,000 Lewis (John) 10.5% 23/01/2014 362,910 0.56300,000 Lloyds Banking Group Capital 2. 11.25% 14/09/2023 294,090 0.46150,000 Lloyds Banking Group Capital 2. 14.5% 30/01/2022 175,215 0.27300,000 Lloyds Banking Group Capital 2. 7.8673% 17/12/2019 241,875 0.38100,000 Manchester Building Society 8% PIBS 83,000 0.13600,000 Marks & Spencer 5.625% 24/03/2014 616,999 0.96732,000 National Grid 3.603% 08/07/2018 950,392 1.48400,000 National Grid 4.1875% IL 14/12/2022 606,092 0.94400,000 Nationwide Building Society 5.769% PIBS 288,318 0.45175,000 Nationwide Building Society 6% PIBS 133,000 0.21100,000 Newcastle Building Society 10.75% PIBS 96,000 0.15100,000 Newcastle Building Society 12.625% PIBS 108,500 0.17400,000 Next 5.875% 12/10/2016 412,176 0.6470,000 Northern Rock 12.625% Perp 10,500 0.02500,000 Rabobank 5.556% Perp 422,501 0.661,000,000 Roche-Finance 5.375% 29/08/2023 998,350 1.55500,000 RSA Insurance 8.5% Perp 522,158 0.81300,000 Safeway 6.5% 05/08/2014 327,857 0.51300,000 Segro 6.25% 30/09/2015 305,530 0.48200,000 Skipton Building Society 12.875% PIBS 258,000 0.40350,000 Standard Life 6.14% Perp 288,068 0.45100,000 Yorkshire Building Society 5.649% PIBS 52,941 0.08Total UK Corporate Bonds 14,788,486 23.03

ECCLESIASTICAL Investment Funds 35Portfolio Statementhigher income fundat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %UK Corporate Preference Shares 3.74% (4.70%)100,000 Aviva 8.375% 110,000 0.17125,000 Aviva 8.75% 138,750 0.22200,000 Bellway 9.5% 217,000 0.34150,000 Bristol Water 8.75% 199,500 0.31375,000 Coats International 6% 301,875 0.47750,000 General Accident 7.875% 765,000 1.19250,000 General Accident 8.875% 280,000 0.44200,000 Northern Electric 8.06% 232,000 0.36150,000 GKN Holdings 7% 14/05/2012 156,191 0.24Total UK Corporate Preference Shares 2,400,316 3.74UK Government Bonds 19.33% (25.30%)100,000 Conversion 9% 12/07/2011 112,031 0.17200,000 Treasury 2.5% Index Linked 26/07/2016 582,400 0.916,000,000 Treasury 3.25% 07/12/2011 6,219,120 9.685,150,000 Treasury 4.5% 07/03/2013 5,506,962 8.57Total UK Government Bonds 12,420,513 19.33UK Equities 28.23% (19.89%)15,000 AstraZeneca 436,800 0.68150,000 Aviva 591,450 0.92115,789 Bodycote 186,420 0.29105,000 BP 630,735 0.98190,500 British Polythene 495,300 0.77400,000 BT 540,000 0.84200,000 Cable & Wireless 281,200 0.44102,600 Carillion 312,725 0.49400,000 Clinton Cards 199,000 0.3152,000 Cookson 219,284 0.3450,000 Diageo 541,000 0.84231,428 DSG International 83,546 0.13150,000 Electrocomponents 244,500 0.38900,000 Elementis 459,000 0.71650,000 Fenner 1,108,250 1.7280,000 GlaxoSmithKline 1,054,400 1.64250,000 HMV 232,875 0.3620,330 HSBC 145,319 0.23375,000 ING UK Real Estate 198,750 0.31240,000 Ladbrokes 328,080 0.5175,000 Laird Group 96,000 0.15415,458 Lloyds Banking Group 207,937 0.32125,000 Marks & Spencer 500,250 0.7842,954 Menzies (John) 127,573 0.20309,000 Middlefield Canadian Income Trust 207,030 0.321,110,785 Morant Wright Japan Income Trust 499,853 0.7875,000 Morgan Crucible 116,475 0.1837,261 Mothercare 253,561 0.3960,000 National Grid 404,400 0.6365,000 Northern Foods 43,907 0.0725,000 Premier Farnell 287,500 0.45100,000 Prudential 634,000 0.9928,800 Rank Group 23,616 0.04

36ECCLESIASTICAL Investment FundsPortfolio Statementhigher income fundat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %UK Equities - continued170,000 Rentokil Initial 195,500 0.3040,288 Rexam 116,714 0.1862,512 Rolls Royce 301,683 0.473,750,720 Rolls Royce ‘C’ 3,751 0.01400,000 Royal & Sun Alliance 480,000 0.7530,000 Royal Dutch Shell ‘B’ 542,850 0.8442,000 Sainsbury (J) 135,408 0.21100,000 Segro 349,700 0.5422,000 Severn Trent 238,260 0.3755,000 SFI Holdings Group* (Litigation Entitlement) 0 0.0055,000 SFI Holdings* (Suspended 12/11/2002) 0 0.0044,000 Smiths Group 443,960 0.6925,000 Spectris 182,375 0.28500,000 Spirent 510,000 0.7919,945 Standard Chartered 312,738 0.49110,500 Standard Life 234,260 0.36140,000 Tesco 597,100 0.9330,588 The Real Hotel Group 575 0.00250,000 Titan Europe 61,250 0.1050,227 United Utilities 249,427 0.39665,000 Vodafone 951,947 1.48100,000 Volex 90,000 0.14300,315 Yule Catto 462,485 0.72Total UK Equities 18,150,719 28.23AUSTRALIA 0.30% (0.41%)350,000 Sigma Pharmaceuticals 192,211 0.30Total Australia 192,211 0.30CHINA 1.68% (2.83%)1,150,000 China CITIC Bank 609,028 0.951,350,000 Huaneng Power International 471,950 0.73Total China 1,080,978 1.68FRANCE 1.11% (1.92%)30,000 France Telecom 467,123 0.735,000 Sanofi-Aventis 246,113 0.38Total France 713,236 1.11GERMANY 1.25% (1.61%)German Corporate Bonds 0.75% (0.89%)500,000 Siemens 6.125% 14/09/2066 479,412 0.75Total Germany 479,412 0.75German Equities 0.50% (0.72%)16,000 Deutsche Post 192,960 0.3035,000 Francotyp-Postalia 50,652 0.087,000 Indus Holdings 75,040 0.12Total German Equities 318,652 0.50

ECCLESIASTICAL Investment Funds 37Portfolio Statementhigher income fundat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %HONG KONG 5.68% (3.55%)2,500,000 China Hongxing Sports 210,325 0.33850,000 China Oriental 186,996 0.291,200,000 China Shineway Pharmaceuticals 1,386,212 2.16640,000 Dream International 28,159 0.043,000,000 Hop Fung 304,794 0.471,648,000 Lerado 154,250 0.246,500,000 Scud Group 462,791 0.724,000,000 Ta Yang 326,393 0.51100,000 Vtech Holdings 588,788 0.92Total Hong Kong 3,648,708 5.68IRELAND 0.00% (0.00%)318,181 Waterford Wedgwood Uts* (Suspended 18/12/2008) 0 0.00Total Ireland 0 0.00MALAYSIA 0.79% (0.90%)113,281 Malayan Banking 140,588 0.22240,000 Tenaga Nasional 364,382 0.57Total Malaysia 504,970 0.79PORTUGAL 0.65% (0.78%)55,000 Portugal Telecom 420,531 0.65Total Portugal 420,531 0.65SINGAPORE 2.30% (2.33%)575,000 China Merchants Holdings 152,762 0.24603,000 HI-P International 192,241 0.30600,000 MobileOne 502,123 0.78400,000 SIA Engineering 588,024 0.92600,000 Yelow Pages (Singapore) 41,179 0.06Total Singapore 1,476,329 2.30SPAIN 0.62% (1.97%)23,000 Telefonica 401,070 0.62Total Spain 401,070 0.62SWITZERLAND 0.58% (0.00%)3,500 Roche 369,923 0.58Total Switzerland 369,923 0.58THAILAND 2.11% (1.88%)250,000 Advanced Information Services 401,147 0.621,100,000 Kiatnakin Bank 516,724 0.802,500,000 Krung Thai Bank 446,494 0.69Total Thailand 1,364,365 2.11

38ECCLESIASTICAL Investment FundsPortfolio Statementhigher income fundat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %UNITED STATES 1.31% (1.31%)20,000 AT&T 351,117 0.5515,000 Citigroup 30,800 0.0540,000 Pfizer 458,561 0.71Total United States 840,478 1.31Portfolio of Investments 92.71% (98.17%) 59,570,897 92.71net other assets 4,681,850 7.29Total net assets 64,252,747 100.00debt Security Allocation is as follows:Percentage ofDebt Securities%debt Securities above investment grade 80.72debt Securities below investment grade 19.28100.00*Unapproved securities.Unless otherwise stated, all investments are listed equities.Comparative percentage holdings by market value at 31 December 2008 are shown in brackets.

ECCLESIASTICAL Investment Funds 39Portfolio Statementuk equity growth fundat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %United Kingdom 94.51% (84.84%)UK Corporate Bonds 0.07% (0.78%)150,000 British Energy Nuclear Power Notes 28/02/2019 45,000 0.07Total UK Corporate Bonds 45,000 0.07UK Equities 94.44% (83.94%)1,300,000 Advanced Fluid Connection* (Suspended 27/03/2006) 0 0.0050,000 Aggreko 465,000 0.75467,722 AssetCo 304,019 0.4945,000 AstraZeneca 1,306,575 2.10165,785 Aviva 656,674 1.06200,000 Babcock International 1,179,000 1.90450,000 Balfour Beatty 1,182,150 1.90300,947 Bango 162,511 0.2675,000 Bellway 581,250 0.9445,000 Berkeley Group 381,150 0.61170,000 BG Group 1,912,499 3.081,650,000 Booker 767,250 1.24275,000 BP 1,651,099 2.6677,000 British American Tobacco 1,558,480 2.51320,000 BT 434,560 0.70450,000 Cable & Wireless 629,100 1.0186,400 Cadbury 682,560 1.10206,250 Centrica 576,675 0.93325,000 Compass 1,459,575 2.35265,350 Dechra Pharmaceuticals 1,248,472 2.01125,000 Dignity 766,250 1.23375,000 Diploma 665,625 1.07720,000 Dolphin Capital 403,200 0.65275,000 Dunelm Group 1,127,500 1.82879,338 e2v technologies 501,223 0.812,000,000 Electric Word 75,000 0.12670,000 Elementis 341,700 0.55250,000 G4S plc 652,750 1.051,100,000 Galiform 823,350 1.33112,666 Galliford Try 336,026 0.54155,000 GlaxoSmithKline 2,044,450 3.30190,000 Halma 468,730 0.75109,585 Hansard Global 175,336 0.28131,675 HSBC 939,501 1.51293,750 Humberts Group* (Suspended 16/05/2008) 0 0.0030,000 IMI 155,100 0.25400,000 ING UK Real Estate 211,000 0.34337,500 Intec Telecom Systems 357,750 0.581,000,000 IQE 167,500 0.27255,000 ITM Power 38,888 0.0647,000 Johnson Matthey 720,040 1.1656,875 Land Securities 377,081 0.611,654,387 Lloyds Banking Group 833,811 1.34675,000 London & Stamford Property Trust 796,500 1.28301,310 Marshalls 256,114 0.41425,000 Melrose 775,200 1.2585,000 Menzies (John) 252,450 0.41

40ECCLESIASTICAL Investment FundsPortfolio Statementuk equity growth fundat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %UK Equities - continued350,000 Morgan Crucible 537,950 0.87300,000 Morrison (Wm) Supermarkets 826,200 1.33180,000 National Grid 1,212,300 1.9570,000 Next 1,461,600 2.35280,000 Office2office 397,600 0.64284,811 Oxford Instruments 569,622 0.921,143,922 Pace 2,359,910 3.81100,000 Pearson 891,500 1.44143,810 Pinewood Shepperton 184,077 0.3023,500 Provident Financial 220,430 0.35150,000 Prudential 952,500 1.53275,000 Psion 261,250 0.42500,000 Quintain 303,750 0.4930,000 Reckitt Benckiser 1,001,700 1.61177,462 Reed Elsevier 897,070 1.44600,000 Rentokil Initial 688,200 1.11695,000 Resolution 619,940 1.00170,454 Rexam 492,612 0.79125,000 Ricardo 308,750 0.50230,777 Rolls Royce 1,110,730 1.7913,846,620 Rolls Royce ‘C’ 13,847 0.0266,086 Royal Dutch Shell ‘B’ 1,198,800 1.93131,250 Sainsbury (J) 421,313 0.68183,000 Sales Activation Solution*† 45,750 0.07175,000 SFI Holdings Group* (Litigation Entitlement) 0 0.00175,000 SFI Holdings* (Suspended 12/11/2002) 0 0.0070,000 Smith & Nephew 445,200 0.7273,666 Smiths Group 739,607 1.19200,000 Songbird Estates 313,500 0.50130,000 Spectris 943,800 1.52800,000 Spirent 812,000 1.3158,186 Standard Chartered 911,484 1.47250,000 Tesco 1,064,875 1.7165,000 Unilever 1,290,250 2.0860,000 United Business Media 274,500 0.44120,000 Valiant Petroleum 645,000 1.04900,000 Vodafone 1,282,050 2.06593,500 Volex 534,150 0.861,200,000 Walker Greenbank 246,000 0.40125,000 Wincanton 256,250 0.4124,640 Wolseley 309,232 0.5072,500 WSP 199,738 0.32Total UK Equities 58,645,711 94.44

ECCLESIASTICAL Investment Funds 41Portfolio Statementuk equity growth fundat 31 December 2009Number of Market Percentage ofShares Held at Value Total Net Assets31 December 2009 £ %Ireland 0.39% (0.59%)1,000,000 Datalex 134,000 0.22540,000 Siteserv 31,356 0.05175,000 Veris 74,375 0.12Total Ireland 239,731 0.39Portfolio of Investments 94.90% (85.31%) 58,930,442 94.90net other assets 3,166,547 5.10Total net assets 62,096,989 100.00*Unapproved securities.†UnlistedUnless otherwise stated, all investments are listed equities.Comparative percentage holdings by market value at 31 December 2008 are shown in brackets.

42ECCLESIASTICAL Investment FundsStatement of Total ReturnFor the year ended 31 December 2009Amity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008* 2009 2008* 2009 2008* 2009 2008*† 2009 2008* 2009 2008* 2009 2008*Notes £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000IncomeNet capital gains/(losses) 4 10,949 (20,166) 4,786 (6,656) 9,820 (6,357) 1,093 (676) 9,863 (7,484) 11,371 (21,791) 47,882 (63,130)Revenue 6 1,597 2,247 961 1,178 1,283 1,383 854 576 2,479 2,546 1,761 2,508 8,935 10,438Expenses 7 (658) (756) (262) (270) (378) (291) (115) (74) (615) (552) (536) (613) (2,564) (2,556)Finance costs: Interest 9 - (1) - - - - - (1) - - - - - (2)Net revenue before taxation 939 1,490 699 908 905 1,092 739 501 1,864 1,994 1,225 1,895 6,371 7,880Taxation 8 (10) (40) (131) (159) (87) (189) - - (208) (236) 5 (5) (431) (629)Net revenue after taxationfor the year 929 1,450 568 749 818 903 739 501 1,656 1,758 1,230 1,890 5,940 7,251Total return before distributions 11,878 (18,716) 5,354 (5,907) 10,638 (5,454) 1,832 (175) 11,519 (5,726) 12,601 (19,901) 53,822 (55,879)Finance costs: Distributions/AccumulationsFinal and Interim 9 (929) (1,448) (568) (749) (818) (901) (838) (553) (2,096) (2,144) (1,230) (1,890) (6,479) (7,685)Change to net assets attributableto shareholders from investment activities 10,949 (20,164) 4,786 (6,656) 9,820 (6,355) 994 (728) 9,423 (7,870) 11,371 (21,791) 47,343 (63,564)*2008 figures for net capital gains/(losses) & expenses have been restated to reflect the new SORP (please see note 1 on page 45).†Amity Sterling Bond launched on 18 February 2008.

ECCLESIASTICAL Investment Funds 43Statement of Change in Net Assets Attributable to ShareholdersFor the year ended 31 December 2009Amity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000Opening net assets attributableto shareholders 41,295 61,001 27,671 34,183 30,954 36,533 10,655 - 42,485 45,968 50,117 71,603 203,177 249,288Amounts receivable oncreation of shares 2,550 3,748 947 326 16,530 960 5,416 11,390 15,938 6,914 819 1,799 42,200 25,137Amounts payable oncancellation of shares (1,156) (4,116) (164) (191) (2,016) (196) (594) (7) (3,840) (2,776) (390) (1,767) (8,160) (9,053)1,394 (368) 783 135 14,514 764 4,822 11,383 12,098 4,138 429 32 34,040 16,084Change to net assetsattributable to shareholdersfrom investment activities (see page 42) 10,949 (20,164) 4,786 (6,656) 9,820 (6,355) 994 (728) 9,423 (7,870) 11,371 (21,791) 47,343 (63,564)Retained distribution onaccumulation shares 545 826 7 9 11 12 - - 247 249 177 272 987 1,368Unclaimed distribution 1 - - - - - - - - - 3 1 4 1Closing net assets attributableto shareholders 54,184 41,295 33,247 27,671 55,299 30,954 16,471 10,655 64,253 42,485 62,097 50,117 285,551 203,177†Amity Sterling Bond launched on 18 February 2008.

44ECCLESIASTICAL Investment FundsBalance SheetAt 31 December 2009Amity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008Notes £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000ASSETSInvestment assets 51,261 37,672 29,857 23,397 45,095 26,011 15,352 10,628 59,571 41,696 58,930 42,734 260,066 182,138Debtors 10 197 173 742 566 412 87 409 259 947 917 181 202 2,888 2,204Cash at bank 2,935 4,032 2,985 4,861 10,525 5,831 1,063 50 5,184 1,879 3,608 8,387 26,300 25,040Total other assets 3,132 4,205 3,727 5,427 10,937 5,918 1,472 309 6,131 2,796 3,789 8,589 29,188 27,244Total assets 54,393 41,877 33,584 28,824 56,032 31,929 16,824 10,937 65,702 44,492 62,719 51,323 289,254 209,382LIABILITIESCreditors 11 (20) (49) (18) (540) (273) (140) (103) (97) (121) (381) (38) (38) (573) (1,245)Overdraft balances at bank - - - - - - (49) (2) - - - - (49) (2)Distribution payable on‘A’ and ‘B’ shares 9 (189) (533) (319) (613) (460) (835) (201) (183) (1,328) (1,626) (584) (1,168) (3,081) (4,958)Total liabilities (209) (582) (337) (1,153) (733) (975) (353) (282) (1,449) (2,007) (622) (1,206) (3,703) (6,205)Net assets attributableto shareholders 54,184 41,295 33,247 27,671 55,299 30,954 16,471 10,655 64,253 42,485 62,097 50,117 285,551 203,177†Amity Sterling Bond launched on 18 February 2008.

ECCLESIASTICAL Investment Funds 45Notes to the Financial Statements1. Accounting Policiesa. Basis of accountingThe Financial Statements have been prepared in accordancewith the historical cost convention, as modified by the revaluationof investments, and in accordance with the Statement ofRecommended Practice for Authorised Funds issued by theInvestment Management Association (IMA), in November 2008(the IMA SORP 2008).During the year, the Company adopted the IMA SORP 2008.This has resulted in presentational changes to the Statementof Total Return whereby other (losses)/gains and transactioncharges are now classified as Net capital gains/(losses).The effect of this is to remove £201,520 (2008: £3,022,223)from ‘Other (losses)/gains’ and reduce ‘Expenses’ by £12,679(2008: £19,002) with a net corresponding change in‘Net capital gains/(losses)’.OtherTransaction(losses)/gains charges2009 2008 2009 2008£’000 £’000 £’000 £’000Amity UK Fund 1 61 2 4Amity European Fund (144) 947 2 3Higher Income Fund 23 430 2 4Amity International Fund (82) 1,573 4 6UK Equity Growth Fund - 1 3 2Amity Sterling Bond Fund - 10 - -(202) 3,022 13 19b. Valuation of investmentsAll investments are valued at their fair value as at 10:00 am on 31December 2009, being the last business day of the financial year.The fair value of non-derivative securities is bid price, excludingany accrued interest. Unquoted investments are shown at theManager’s valuation.c. Foreign exchangeThe values of assets and liabilities denominated in foreigncurrencies have been converted into sterling at the exchange rateprevailing at 10:00am on 31 December 2009. Any exchangedifferences arising on translation of investments and capitalassets and liabilities other than investments are included in “Netcapital gains/(losses)”. Any exchange differences arising ontranslation of other assets or liabilities are included in net revenue.d. RevenueAll dividends on investments declared ex-dividend up to theaccounting date are shown as gross revenue. Bank and otherinterest receivable is included on an accruals basis. Accruedinterest purchased and sold on interest bearing securities isexcluded from the capital cost of these securities and dealt withas part of the revenue of the Company. Revenue from interestbearing securities is accounted for on an effective yield basis,irrespective of the level of discount or premium, and is calculatedwith reference to the purchase price of the securities. Revenueis allocated to the share classes of each sub-fund based on theproportion of assets held by each share class. Underwritingcommission is taken to revenue and is recognised when theissues take place, except where the sub-fund is required totake up all or some of the shares underwritten, in which case anappropriate proportion of the commission is deducted from thecost of these shares.e. ExpensesAll expenses, other than those relating to the purchase and saleof investments and Stamp Duty Reserve Tax (SDRT) are chargedagainst revenue, with the exception of Amity Sterling Bond Fundwhere management expenses have been charged against capitalsince inception and Higher Income Fund since 2003. Expensesrelating to each sub-fund are allocated to the share classes basedon the proportion of assets held within each share class.f. TaxationThe sub-funds are liable to Corporation Tax applied at a rate of20.0% on interest, overseas dividend revenue and underwritingcommission. Deferred tax is provided for by the liability method onall short-term timing differences. UK dividend revenue is disclosednet of any related tax credit. Overseas dividends continue to bedisclosed gross of any foreign tax suffered, the tax element beingshown separately in the taxation note.Where overseas tax has been deducted from overseas revenuethat tax can, in some instances, be set off against the corporationtax payable, by way of double tax relief.g. Deferred taxationThe charge for deferred tax is based on the net revenue for theyear and takes into account taxation deferred because of timingdifferences between the treatment of certain items for taxationand accounting purposes. Deferred tax is provided using theliability method on all timing differences, calculated at the rate atwhich it is anticipated the timing differences will reverse basedon tax rates and laws that have been enacted or substantivelyenacted. Deferred tax assets are recognised only when, on thebasis of available evidence, it is more likely than not that therewill be taxable profits in the future against which the deferred taxasset can be offset. Deferred tax liabilities are not discounted.2. Distribution Policiesa. Revenue distribution to corporate shareholdersA shareholder liable to UK Corporation Tax receives the dividenddistribution and associated tax credit as franked investmentincome to the extent that the gross revenue from which thedistribution is made is franked investment income.The shares of class ‘A’ and ‘B’ are distribution shares, while theshares of class ‘C’ are accumulation shares.The holders of accumulation shares must add the revenueaccumulated (excluding equalisation) to the cost of such sharesfor capital gains tax purposes.b. EqualisationEqualisation applies only to units purchased during the distributionperiod (Group 2 units). It is the average amount of revenueincluded in the purchase price of all Group 2 units and is refundedto the holders of these units as a return of capital. Being capital itis not liable to Income Tax but must be deducted from the cost ofunits for Capital Gains Tax purposes.

46ECCLESIASTICAL Investment FundsNotes to the Financial Statementsc. Treatment of stock and special dividendsThe ordinary element of stocks received in lieu of cash dividendsis recognised as revenue of the sub-fund based on the marketvalue of the investments on the day they are quoted ex-dividend.Any enhancement above the cash dividend is treated as a capitalgain on the investment. Special dividends are recorded asrevenue or capital depending on the underlying substance of thetransaction.d. Treatment of management expensesThe ACD’s annual management fee is charged within the netrevenue of the sub-funds. In respect of the Amity Sterling BondFund and the Higher Income Fund, the annual managementcharge is taken from capital not revenue so the capital value ofthe Fund could be reduced over time.e. Unclaimed distributionDistributions which have remained unclaimed by shareholdersfor more than six years are credited to the capital property of theFund.3. Risk Management PoliciesThe main risks arising from the Company’s financial instrumentsare market price, foreign currency, interest rate, liquidity and creditrisks. The ACD reviews policies for managing each of these risks.These policies have remained unchanged since the beginning ofthe period to which these financial statements relate.The ACD regularly considers the asset allocation of the portfolioin order to minimise the risk associated with particular countriesor industry sectors whilst continuing to follow the investmentobjective. Individual fund managers have responsibility formonitoring the existing portfolio selected in accordance with theoverall asset allocation parameters described above and seeks toensure that individual stocks also meet the risk reward profile thatis acceptable.The ACD does not use derivative instruments to hedge theinvestment portfolio against market risk, because in its opinion thecost of such a process would result in an unacceptable reductionin the potential for capital growth. No derivatives were held duringthe year under review.• Market risk – arises mainly from uncertainty about futureprices of financial instruments held. It represents the potentialloss the Company might suffer through holding marketpositions in the face of price movements.• Currency risk - the revenue and capital value of theCompany’s investments can be affected by foreign currencytranslation movements as some of the Company’s assets andincome are denominated in currencies other than sterlingwhich is the Company’s functional currency.The ACD has identified three principal areas where foreigncurrency risk could impact on the Company. These are movementin exchange rates affecting the value of investments, short-termtiming differences such as exposure to exchange rate movementduring the period between commencement of the investmenttransaction and the date when settlement of the investmentoccurs, and finally movements in exchange rates affecting incomereceived by the Company. The Company converts all receipts ofrevenue, received in currency, into sterling on the day of receipt.At the year end date a portion of the net monetary assets of theCompany was denominated in currencies other than sterling withthe effect that the balance sheet and total return can be affectedby exchange rate movement.• Interest rate risk - the Company invests in both fixed rateand floating rate securities. Any change to the interest ratesrelevant for particular securities may result in either revenueincreasing or decreasing, or the ACD being unable to securesimilar returns on the expiry of contracts or the sale ofsecurities. In addition changes to prevailing rates or changesin expectations of future rates may result in an increase ordecrease in the value of the securities held.In general, if interest rates rise the income potential of theCompany also rises but the value of fixed rate securities willdecline (along with certain expenses calculated by reference tothe assets of the Company). A decline in interest rates will ingeneral have the opposite effect.• Liquidity risk – the Company’s assets comprise mainly readilyrealisable securities, which can be sold. The main liability of theCompany is the redemption of any shares that investors wishto sell.• Credit risk – certain transactions in securities that theCompany enters into expose it to the risk that the counterpartywill not deliver the investment (purchase) or cash (sale) afterthe Company has fulfilled its responsibilities.• Credit rating risk – The current fixed interest portfolioconsists of a range of fixed interest instruments includinggovernment securities, preference shares, permanent interestbearing shares, overseas bonds and corporate loans andbonds. Limits are imposed on the credit ratings of thecorporate bond portfolio and exposures regularly monitored.The Company only buys and sells investments through brokerswhich have been approved by the ACD as an acceptablecounterparty. In addition, limits are set as to the maximumexposure to any individual broker that may exist at any time. Theselimits are reviewed regularly.

ECCLESIASTICAL Investment Funds 47Notes to the Financial StatementsFor the year ended 31 December 20094. Net capital gains/(losses)Amity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008* 2009 2008* 2009 2008* 2009 2008*† 2009 2008* 2009 2008* 2009 2008*£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000Non-derivative securities 10,951 (20,162) 4,788 (6,653) 9,823 (6,351) 1,093 (676) 9,865 (7,480) 11,373 (21,789) 47,893 (63,111)Security transaction fees (2) (4) (2) (3) (3) (6) - - (2) (4) (2) (2) (11) (19)Net capital gains/(losses) 10,949 (20,166) 4,786 (6,656) 9,820 (6,357) 1,093 (676) 9,863 (7,484) 11,371 (21,791) 47,882 (63,130)5. Purchases, sales and transaction costsAmity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000Analysis of total purchase costs:Purchases in period before transaction costs 4,726 9,350 5,457 10,246 12,793 14,672 4,786 18,326 17,557 26,177 11,948 8,126 57,267 86,897Commissions 20 23 11 27 53 52 - 5 51 18 70 31 205 156Other costs - 33 - 2 - 12 - - - 7 - 23 - 77Total purchase costs 20 56 11 29 53 64 - 5 51 25 70 54 205 233Gross purchase total 4,746 9,406 5,468 10,275 12,846 14,736 4,786 18,331 17,608 26,202 12,018 8,180 57,472 87,130*2008 restated for new SORP (see Note 1a on page 45).†Amity Sterling Bond launched on 18 February 2008.

48ECCLESIASTICAL Investment FundsNotes to the Financial StatementsFor the year ended 31 December 20095. Purchases, sales and transaction costs - continuedAmity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000Analysis of total sale proceeds:Gross sales before transaction costs 2,105 8,036 3,949 10,825 3,669 9,294 1,170 7,060 9,521 18,704 7,208 10,448 27,622 64,367Commissions (1) (11) (9) (23) (2) (25) - - (7) (17) (13) (15) (32) (91)Other costs - (1) - (1) - (2) - - - - - - - (4)Total sale costs (1) (12) (9) (24) (2) (27) - - (7) (17) (13) (15) (32) (95)Total sales net of transaction costs 2,104 8,024 3,940 10,801 3,667 9,267 1,170 7,060 9,514 18,687 7,195 10,433 27,590 64,2726. RevenueAmity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000Underwriting commission - 2 - - - 2 - - - - - - - 4Franked UK dividends 1,308 1,668 12 65 211 165 83 81 669 789 1,642 2,095 3,925 4,863Overseas dividends 178 317 937 975 1,012 976 - - 463 593 50 24 2,640 2.885PID revenue 40 39 - 1 - - - - - - 18 27 58 67Interest on fixed interest stocks 47 7 - - 27 8 755 445 1,391 953 16 4 2,236 1.417Amortisation of discount/premium - - - - - - 15 33 (61) 51 - - (46) 84Bank interest 24 214 12 137 33 232 1 17 17 160 35 358 122 1,118Total revenue 1,597 2,247 961 1,178 1,283 1,383 854 576 2,479 2,546 1,761 2,508 8,935 10,438†Amity Sterling Bond launched on 18 February 2008.

ECCLESIASTICAL Investment Funds 49Notes to the Financial StatementsFor the year ended 31 December 20097. ExpensesAmity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008* 2009 2008* 2009 2008* 2009 2008*† 2009 2008* 2009 2008* 2009 2008*£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000Payable to the Authorised CorporateDirector or associates of theAuthorised Corporate Director:ACD’s charge 596 710 229 249 343 262 99 52 550 486 488 580 2,305 2,339Payable to the Depositary orassociates of the Depositary:Depositary fee 20 17 14 11 17 12 6 4 21 27 24 19 102 90Safe custody fee 7 8 9 7 8 12 1 7 10 9 4 3 39 4627 25 23 18 25 24 7 11 31 36 28 22 141 136Other expenses:Registration fee 31 30 6 7 6 5 5 2 30 32 16 16 94 92Audit fee 4 2 4 2 4 2 4 9 4 2 4 2 24 19VAT refunds on Management fees - (11) - (6) - (2) - - - (4) - (7) - (30)35 21 10 3 10 5 9 11 34 30 20 11 118 81Total expenses 658 756 262 270 378 291 115 74 615 552 536 613 2,564 2,556*2008 restated for new SORP (see Note 1a on page 45).†Amity Sterling Bond launched on 18 February 2008.

50ECCLESIASTICAL Investment FundsNotes to the Financial StatementsFor the year ended 31 December 20098. TaxationAmity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000a. Analysis of charge in year:Corporation tax - - 114 169 68 184 - - 199 241 - - 381 594Double taxation relief - - (104) (127) (68) (79) - - (21) (35) - - (193) (241)Overseas withholding tax 18 32 121 117 90 82 - - 29 35 - - 258 266Prior year adjustments (8) - - - - - - - 1 - (5) - (12) -Irrecoverable REIT tax - 8 - - - - - - - - - 5 - 13Total current tax (note b.) 10 40 131 159 90 187 - - 208 241 (5) 5 434 632Deferred tax (note c) - - - - (3) 2 - - - (5) - - (3) (3)Total taxation 10 40 131 159 87 189 - - 208 236 (5) 5 431 629The tax amounts assessed for the current and prior periods are higher than the amounts resulting from applying the standard rate of corporation tax in the UK for an Open Ended Investment Company (20%). Thedifferences are explained in table b on the next page .†Amity Sterling Bond launched on 18 February 2008.

ECCLESIASTICAL Investment Funds 51Notes to the Financial StatementsFor the year ended 31 December 20098. Taxation - continuedAmity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000b. Factors affecting taxationcharge for the year:Net revenue before taxation 939 1,490 699 908 905 1,092 739 501 1,864 1,994 1,225 1,895 6,371 7,880Return on ordinary activitiesmultiplied by the standard rate ofCorporation Tax of 20% (2008 - 20%) 188 298 140 182 181 217 148 100 373 399 245 379 1,275 1,575Effects of:Franked investment revenue (262) (334) (2) (13) (42) (33) (17) (16) (134) (158) (328) (424) (785) (978)Interest distributions - - - - - - (154) (84) - - - - (154) (84)Overseas withholding tax 18 32 121 117 90 82 - - 29 35 - - 258 266Tax relief on overseas withholding tax - - - - - - - - - - - - - -Taxation payable in different periods (3) - - - (6) - - - (3) - - - (12) -Prior year adjustments (8) - - - - - - - 1 - (5) - (12) -Double taxation relief - - (104) (127) (68) (79) - - (21) (35) - - (193) (241)Irrecoverable REIT tax - 8 - - - - - - - - - 5 - 13Non taxable overseas dividends (9) - (24) - (65) - - - (37) - (6) - (141) -Current year expenses not utilised 86 36 - - - - 23 - - - 89 45 198 81Total current tax (note a.) 10 40 131 159 90 187 - - 208 241 (5) 5 434 632c. Deferred taxProvision at the start of the year - - - - 3 1 - - - 5 - - 3 6Deferred tax charge in the year - - - - (3) 2 - - - (5) - - (3) (3)Provision at end of year - - - - - 3 - - - - - - - 3†Amity Sterling Bond launched on 18 February 2008.

52ECCLESIASTICAL Investment FundsNotes to the Financial StatementsFor the year ended 31 December 20098. Taxation - continuedd. The Amity UK Fund has not recognised a deferred tax asset of £667,513 (2008: £579,163) arising as a result of having unutilised management expenses. The UK Equity Growth Fund has not recognised adeferred tax asset of £526,064 (2008: £436,456) arising as a result of having unutilised management expenses. The Amity Sterling Bond Fund has not recognised a deferred tax asset of £37,863 (2008: £14,797)arising as a result of having unutilised management expenses and £25,190 (2008: £11,868) arising as a result of having excess interest distributions. These are not expected to be utilised in the foreseeable futureunless the nature of the Funds’ revenue or capital gains/(losses) changes. The Higher Income Fund, the Amity European Fund and the Amity International Fund have no deferred tax assets (2008: £nil).9. Finance costsDistributionsThe distributions take account of revenue received on the creation of shares and revenue deducted on cancellation of shares, and comprise:Amity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000InterimsShare Class A (Distribution) 174 92 16 6 70 - 96 10 480 284 47 46 883 438Share Class B (Distribution) 28 3 231 123 356 62 410 259 215 150 424 411 1,664 1,008Share Class C (Accumulation) 261 124 3 1 6 - - - 86 38 56 63 412 226Income tax withheld - - - - - - 121 65 - - - - 121 65Net interim distributions/accumulations for the periods 463 219 250 130 432 62 627 334 781 472 527 520 3,080 1,737FinalShare Class A (Distribution) 154 99 22 37 123 48 68 5 980 1,123 41 105 1,388 1,417Share Class B (Distribution) 35 434 297 576 337 787 133 178 348 503 543 1,063 1,693 3,541Share Class C (Accumulation) 284 702 4 8 5 12 - - 161 211 121 209 575 1,142Income tax withheld - - - - - - 47 46 - - - - 47 46Net final distributions/accumulations for the period 473 1,235 323 621 465 847 248 229 1,489 1,837 705 1,377 3,703 6,146Total net distributions/accumulations for the year 936 1,454 573 751 897 909 875 563 2,270 2,309 1,232 1,897 6,783 7,883†Amity Sterling Bond launched on 18 February 2008.

ECCLESIASTICAL Investment Funds 53Notes to the Financial StatementsFor the year ended 31 December 20099. Finance costs - continuedDistributionsThe distributions take account of revenue received on the creation of shares and revenue deducted on cancellation of shares, and comprise:Amity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000Total net distributions/accumulations for the year 936 1,454 573 751 897 909 875 563 2,270 2,309 1,232 1,897 6,783 7,883Revenue deducted on shares cancelled 5 82 2 2 12 2 3 - 55 106 2 33 79 225Revenue received on shares created (12) (88) (7) (4) (91) (10) (40) (10) (229) (271) (4) (40) (383) (423)Finance costs:Distributions/accumulations 929 1,448 568 749 818 901 838 553 2,096 2,144 1,230 1,890 6,479 7,685Finance costs: Interest - 1 - - - - - 1 - - - - - 2Total finance costs 929 1,449 568 749 818 901 838 554 2,096 2,144 1,230 1,890 6,479 7,687Reconciliation between netrevenue and distributionsNet revenue after taxation 929 1,450 568 749 818 903 739 501 1,656 1,758 1,230 1,890 5,940 7,251Capital underwriting commission - (2) - - - (2) - - - - - - - (4)Add: ACD’s fee charged to capital(net of tax relief) - - - - - - 99 52 440 386 - - 539 438Finance costs:Distributions/accumulations 929 1,448 568 749 818 901 838 553 2,096 2,144 1,230 1,890 6,479 7,685†Amity Sterling Bond launched on 18 February 2008.

54ECCLESIASTICAL Investment FundsNotes to the Financial StatementsAt 31 December 200910. DebtorsAmity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000Amounts receivable for creation of shares 2 - 19 - 285 5 77 17 386 96 1 - 770 118Accrued revenue 185 168 6 21 96 62 332 242 554 528 176 202 1,349 1,223Overseas tax recoverable 2 5 60 56 31 20 - - 7 3 - - 100 84PID income tax recoverable 8 - - - - - - - 4 - 12 -Currency deals awaiting settlement - - - 489 - - - - - 145 - - - 634Sales awaiting settlement - - 657 - - - - - - 145 - - 657 145197 173 742 566 412 87 409 259 947 917 181 202 2,888 2,20411. CreditorsAmity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000Amounts payable for cancellation of shares 9 32 - - 265 21 - - 35 11 1 27 310 91Accrued expenses 11 17 7 10 8 10 7 22 11 19 8 11 52 89Deferred tax - - - - - 3 - - - - - - - 3Income tax payable - - - - - - 96 75 - - - - 96 75Corporation tax - - 11 41 - 106 - - 75 206 - - 86 353Refund of SDRT - - - 3 - - - - - - - - - 3Currency deals awaiting settlement - - - 486 - - - - - 145 - - - 631Purchases awaiting settlement - - - - - - - - - - 29 - 29 -20 49 18 540 273 140 103 97 121 381 38 38 573 1,245†Amity Sterling Bond launched on 18 February 2008.

ECCLESIASTICAL Investment Funds 55Notes to the Financial StatementsFor the year ended 31 December 200912. Contingent liabilities and outstandingcommitmentsThere were no contingent liabilities at the year end date (2008:nil).13. Related partiesEcclesiastical Investment Management Limited, together withBNY Mellon Trust and Depositary (UK) Limited are regarded ascontrolling parties by virtue of having the ability to act in concert inrespect of the operations of the Company.Ecclesiastical Investment Management Limited, acts as principalon all the transactions of shares in the Company. The aggregatemonies received through creations and liquidations are disclosedin the statement of change in net assets attributable toshareholders and amounts due to/from Ecclesiastical InvestmentManagement Limited in respect of share transactions at the yearend are disclosed in notes 10 and 11.14. Financial instrumentsIn pursuing its investment objectives set out on pages 4 and 5the Company may hold a number of financial instruments, thesecomprise:• equity and non-equity shares, fixed income securities, andfloating rate securities. These are held in accordance with theCompany’s investment objectives and policies;• cash, liquid resources and short-term debtors and creditorsthat arise directly from its operations;• shareholders’ funds which represent investors’ monies whichare invested on their behalf; and• short term borrowings used to finance investment activity.Amounts paid to Ecclesiastical Investment Management Limitedin respect of the ACD’s periodic charges are disclosed in note 7.£nil was due at the year end (2008: £6,071).Amounts paid to BNY Mellon Trust and Depositary (UK) Limitedin respect of depositary services and safe custody charges aredisclosed in note 7. Charges of £5,240 were due at the year end(2008: £10,338).Cash balances on deposit with BNY Mellon Trust and Depositary(UK) Limited are disclosed in the balance sheet together withinterest due. Interest receivable is disclosed within accruedrevenue in note 10. £245 was due at the year end (2008: £8,787).Neither Ecclesiastical Investment Management Limited nor BNYMellon Trust and Depositary (UK) Limited entered into any othertransactions with the Company during the year under review.At 31 December 2009, fellow Group companies of the ultimateparent company, Allchurches Fund Limited, owned 10,000 (2008:10,000) of the A shares in the Amity UK Fund, 10,052,106(2008: 10,052,106) of the B shares in the Higher Income Fund,39,955,059 (2008: 39,955,059) of the B shares in the UK EquityGrowth Fund, 20,773,270 (2008: 20,773,270) of the B shares inAmity International Fund, 100% (2008: 100%) of the B sharesin the remaining funds, 14,714,580 (2008: 14,548,736) of theC shares in Amity Uk Fund and 100% (2008: 100%) of the Cshares in the remaining funds.

56ECCLESIASTICAL Investment FundsNotes to the Financial StatementsAt 31 December 200915. Risks of financial instrumentsCurrency exposures:A proportion of the net assets of the Company are denominated in currencies other than Sterling, with the effect that the balance sheet and the total return can be affected by currency movements.Amity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000Australian dollars - - - - 233 216 - - 192 176 - - 425 392Canadian dollars 319 - - - - - - - - - - - 319 -Danish kroner - - 621 - - - - - - - - - 621 -Euro 872 591 23,467 19,588 8,997 6,127 - - 1,859 1,808 174 239 35,369 28,353Hong Kong dollars 982 378 - - 7,622 1,976 - - 4,711 2,534 - - 13,315 4,888Japanese yen - - - - 154 133 - - - - - - 154 133Korean won - - - - 392 228 - - - - - - 392 228Malaysian ringgit - - - - 861 636 - - 505 379 - - 1,366 1,015Norwegian kroner 853 543 2,089 1,801 2,225 450 - - - - - - 5,167 2,794Singapore dollars 99 81 - - 4,855 2,817 - - 2,148 1,162 - - 7,102 4,060Sterling 49,057 37,975 1,062 890 17,446 10,219 16,471 10,655 52,259 35,065 61,923 49,878 198,218 144,682Swedish kronor 474 332 2,122 2,203 1,272 868 - - - - - - 3,868 3,403Swiss francs - - 3,662 2,713 4,084 2,289 - - 373 - - - 8,119 5,002Thai baht 241 234 - - 1,677 862 - - 1,364 801 - - 3,282 1,897US dollars 1,287 1,161 224 476 5,481 4,133 - - 842 560 - - 7,834 6,330Net Assets 54,184 41,295 33,247 27,671 55,299 30,954 16,471 10,655 64,253 42,485 62,097 50,117 285,551 203,177SterlingMonetary exposures 2,924 303 720 238 9,624 4,211 1,119 27 4,020 786 2,993 7,382 21,400 12,947Non monetary exposures 46,133 37,672 342 652 7,822 6,008 15,352 10,628 48,239 34,279 58,930 42,496 176,818 131,735Total 49,057 37,975 1,062 890 17,446 10,219 16,471 10,655 52,259 35,065 61,923 49,878 198,218 144,682The split of currency exposures into monetary and non-monetary exposures is shown only for Sterling, as this is the only currency which has material monetary exposure.†Amity Sterling Bond launched on 18 February 2008.

ECCLESIASTICAL Investment Funds 57Notes to the Financial StatementsAt 31 December 200915. Risks of financial instruments - continuedInterest rate risk profile of financial assets and liabilities:Amity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth Total2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008 2009 2008£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000Fixed rate financial assets 318 606 - - - 707 14,281 9,569 27,688 23,835 45 391 42,332 35,108Floating rate 2,935 4,032 2,985 4,861 10,525 5,831 1,014 48 5,184 1,879 3,608 8,387 26,251 25,038Nil interest bearing securities 50,931 36,657 30,262 22,810 44,774 24,416 1,176 1,038 31,381 16,771 58,444 41,339 216,968 143,031Net Assets 54,184 41,295 33,247 27,671 55,299 30,954 16,471 10,655 64,253 42,485 62,097 50,117 285,551 203,177The split of the interest rate risk profile by currency is not shown above, as in the ACD’s opinion, this does not enhance the users understanding of the financial statements.The floating rate financial assets and liabilities comprise currency bank balances and overdrafts that bear interest. The Sterling floating interest rates are determined by LIBOR, other currencies are determined by therelevant authority.None of the liabilities of the Funds carry any interest.Weighted average of fixed interest rates:Amity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008% % % % % % % % % % % %Sterling 10.89 11.24 - - - 12.70 5.65 7.15 4.26 5.92 - 12.44Weighted average period for financial assets with fixed interest rates:Amity UKAmity Amity Sterling Higher EquityAmity UK European International Bond Income Growth2009 2008 2009 2008 2009 2008 2009 2008† 2009 2008 2009 2008years years years years years years years years years years years yearsSterling 9.46 4.92 - - - 5.68 12.90 17.64 11.50 22.62 - 0.75†Amity Sterling Bond launched on 18 February 2008.

58ECCLESIASTICAL Investment FundsNotes to the Financial StatementsAt 31 December 200916. Shareholders’ FundsThe company currently has three share classes; Class A Income(Retail), Class B Income (Institutional) and Class C Accumulation(Institutional). The annual management charge as a percentageof net assets of each share class is as follows:Investment FundClassAmity UK Fund A 1.50%B 0.75%C 1.25%Amity European Fund A 1.50%B 0.75%C 1.25%Amity International Fund A 1.50%B 0.75%C 1.25%Amity Sterling Bond A 1.25%B 0.65%C 1.25%Higher Income Fund A 1.25%B 0.75%C 1.00%UK Equity Growth Fund A 1.50%B 0.75%C 1.25%The net asset values of each share class, the net asset value pershare, and the number of shares in each class are given in thecomparative tables in pages 6 to 17. The distributions per shareclass are given in the distribution tables on pages 59 to 65. Allclasses have the same rights on winding up.

ECCLESIASTICAL Investment Funds 59Distribution/Accumulation StatementsAmity UK FundShare Class A Group 1: Shares purchased prior to 1 January 2009Interim distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.1111 0.1111 1.0000 - 1.0000 0.55002 0.7462 0.07462 0.6716 0.3284 1.0000 0.5500Share Class A Group 1: Shares purchased prior to 1 July 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 0.9666 0.0967 0.8699 - 0.8699 2.61232 0.3388 0.0339 0.3049 0.5650 0.8699 2.6123Share Class B Group 1: Shares purchased prior to 1 January 2009Interim distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.3667 0.1367 1.2300 - 1.2300 0.71502 1.3667 0.1367 1.2300 - 1.2300 0.7150Share Class B Group 1: Shares purchased prior to 1 July 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 1.6979 0.1698 1.5281 - 1.5281 4.32272 1.6979 0.1698 1.5281 - 1.5281 4.3227Share Class C Group 1: Shares purchased prior to 1 January 2009Interim accumulation (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Accumulation Paid 2008 Paid1 1.9778 0.1978 1.7800 - 1.7800 0.79202 1.4580 0.1458 1.3122 0.4678 1.7800 0.7920Share Class C Group 1: Shares purchased prior to 1 July 2009Final accumulation (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Accumulation Payable 2008 Paid1 2.1406 0.2141 1.9265 - 1.9265 4.82792 1.2211 0.1221 1.0990 0.8275 1.9265 4.8279A shareholder liable to UK Corporation Tax receives the distribution and associated tax credit as franked investment income to theextent that the gross income from which the distribution is made is itself franked investment income. Where the gross income fromwhich the distribution is made is not wholly franked investment income, part of the distribution is received by the shareholder as anannual payment from the Scheme from which income tax at the lower rate has been deducted.Of the distribution:i) 87.12% of the final income distribution is received as franked investment income; andii)12.88% of the final income distribution is received as an annual payment from which income tax at the lower rate has beendeducted. The gross amount of this portion of total income distribution is liable to UK Corporation Tax. It is not frankedinvestment income.

60ECCLESIASTICAL Investment FundsDistribution/Accumulation StatementsAmity European FundShare Class A Group 1: Shares purchased prior to 1 January 2009Interim distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 0.9444 0.0944 0.8500 - 0.8500 0.33002 0.5458 0.0545 0.4913 0.3587 0.8500 0.3300Share Class A Group 1: Shares purchased prior to 1 July 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 1.0730 0.1073 0.9657 - 0.9657 2.06172 - - - 0.9657 0.9657 2.0617Share Class B Group 1: Shares purchased prior to 1 January 2009Interim distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.3333 0.1333 1.2000 - 1.2000 0.63802 1.3333 0.1333 1.2000 - 1.2000 0.6380Share Class B Group 1: Shares purchased prior to 1 July 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 1.7118 0.1712 1.5406 - 1.5406 2.99372 1.7118 0.1712 1.5406 - 1.5406 2.9937Share Class C Group 1: Shares purchased prior to 1 January 2009Interim accumulation (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Accumulation Paid 2008 Paid1 1.1111 0.1111 1.0000 - 1.0000 0.33002 0.9903 0.0990 0.8913 0.1087 1.0000 0.3300Share Class C Group 1: Shares purchased prior to 1 July 2009Final accumulation (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Accumulation Payable 2008 Paid1 1.4331 0.1433 1.2898 - 1.2898 2.64832 - - - 1.2898 1.2898 2.6483A shareholder liable to UK Corporation Tax receives the distribution and associated tax credit as franked investment income to theextent that the gross income from which the distribution is made is itself franked investment income. Where the gross income fromwhich the distribution is made is not wholly franked investment income, part of the distribution is received by the shareholder as anannual payment from the Scheme from which income tax at the lower rate has been deducted.Of the distribution:i) 75.23% of the final income distribution is received as franked investment income; andii) 24.77% of the final income distribution is received as an annual payment from which income tax at the lower rate has beendeducted. The gross amount of this portion of total income distribution is liable to UK Corporation Tax. It is not frankedinvestment income.

ECCLESIASTICAL Investment Funds 61Distribution/Accumulation StatementsAmity International FundShare Class A Group 1: Shares purchased prior to 1 January 2009Interim distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.5556 0.1556 1.4000 - 1.4000 0.03302 0.6311 0.0631 0.5680 0.8320 1.4000 0.0330Share Class A Group 1: Shares purchased prior to 1 July 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 1.1821 0.1182 1.0639 - 1.0639 2.84512 0.2817 0.0282 0.2535 0.8104 1.0639 2.8451Share Class B Group 1: Shares purchased prior to 1 January 2009Interim distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.8889 0.1889 1.7000 - 1.7000 0.29702 1.8390 0.1839 1.6551 0.0449 1.7000 0.2970Share Class B Group 1: Shares purchased prior to 1 July 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 1.7907 0.1791 1.6116 - 1.6116 3.78712 1.7907 0.1791 1.6116 - 1.6116 3.7871Share Class C Group 1: Shares purchased prior to 1 January 2009Interim accumulation (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Accumulation Paid 2008 Paid1 1.6667 0.1667 1.5000 - 1.5000 0.06602 0.6839 0.0684 0.6155 0.8845 1.5000 0.0660Share Class C Group 1: Shares purchased prior to 1 July 2009Final accumulation (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Accumulation Payable 2008 Paid1 1.2807 0.1281 1.1526 - 1.1526 3.24362 0.4767 0.0477 0.4290 0.7236 1.1526 3.2436A shareholder liable to UK Corporation Tax receives the distribution and associated tax credit as franked investment income to theextent that the gross income from which the distribution is made is itself franked investment income. Where the gross income fromwhich the distribution is made is not wholly franked investment income, part of the distribution is received by the shareholder as anannual payment from the Scheme from which income tax at the lower rate has been deducted.Of the distribution:i) 90.36% of the final income distribution is received as franked investment income; andii)9.64% of the final income distribution is received as an annual payment from which income tax at the lower rate has beendeducted. The gross amount of this portion of total income distribution is liable to UK Corporation Tax. It is not frankedinvestment income.

62ECCLESIASTICAL Investment FundsDistribution/Accumulation StatementsAmity Sterling Bond FundShare Class A Group 1: Shares purchased prior to 1 January 2009First quarter distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid†1 1.4118 0.2824 1.1294 - 1.1294 -2 0.4709 0.0942 0.3767 0.7527 1.1294 -Share Class A Group 1: Shares purchased prior to 1 April 2009Second quarter distribution (pence per share) Group 2: Shares purchased on or after 1 April 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.3750 0.2750 1.1000 - 1.1000 2.92902 0.7983 0.1597 0.6386 0.4614 1.1000 2.9290Share Class A Group 1: Shares purchased prior to 1 July 2009Third quarter distribution (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.7651 0.3530 1.4121 - 1.4121 2.68222 0.7135 0.1427 0.5708 0.8413 1.4121 2.6822Share Class A Group 1: Shares purchased prior to 1 October 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 October 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 1.5355 0.3071 1.2284 - 1.2284 1.43652 0.6000 0.1200 0.4800 0.7484 1.2284 1.4365†Amity Sterling Bond launched on 18 February 2008.A shareholder liable to UK Corporation Tax receives the distribution and associated tax credit as franked investment income to theextent that the gross income income from which the distribution is made is itself franked investment income. Where the gross incomefrom which the distribution is made is not wholly franked investment income, part of the distribution is received by the shareholder as anannual payment from the Scheme from which income tax at the lower rate has been deducted.Of the distribution:i) 0.00% of the final income distribution is received as franked investment income; andii)100% of the final income distribution is received as an annual payment from which income tax at the lower rate has beendeducted. The gross amount of this portion of total income distribution is liable to UK Corporation Tax. It is not frankedinvestment income.

ECCLESIASTICAL Investment Funds 63Distribution/Accumulation StatementsAmity Sterling Bond FundShare Class B Group 1: Shares purchased prior to 1 January 2009First quarter distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid†1 1.5134 0.3027 1.2107 - 1.2107 -2 1.5134 0.3027 1.2107 - 1.2107 -Share Class B Group 1: Shares purchased prior to 1 April 2009Second quarter distribution (pence per share) Group 2: Shares purchased on or after 1 April 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.5000 0.3000 1.2000 - 1.2000 1.28382 1.5000 0.3000 1.2000 - 1.2000 1.2838Share Class B Group 1: Shares purchased prior to 1 January 2009Third quarter distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.6448 0.3290 1.3158 - 1.3158 1.06922 1.6448 0.3290 1.3158 - 1.3158 1.0692Share Class B Group 1: Shares purchased prior to 1 January 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 1.5175 0.3035 1.2140 - 1.2140 1.61092 1.5175 0.3035 1.2140 - 1.2140 1.6109Share Class C is yet to be launched.†Amity Sterling Bond launched on 18 February 2008.A shareholder liable to UK Corporation Tax receives the distribution and associated tax credit as franked investment income to theextent that the gross income from which the distribution is made is itself franked investment income. Where the gross income fromwhich the distribution is made is not wholly franked investment income, part of the distribution is received by the shareholder as anannual payment from the Scheme from which income tax at the lower rate has been deducted.Of the distribution:i) 0.00% of the final income distribution is received as franked investment income; andii)100% of the final income distribution is received as an annual payment from which income tax at the lower rate has beendeducted. The gross amount of this portion of total income distribution is liable to UK Corporation Tax. It is not frankedinvestment income.

64ECCLESIASTICAL Investment FundsDistribution/Accumulation StatementsHigher Income FundShare Class A Group 1: Shares purchased prior to 1 January 2009Interim distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.5556 0.1556 1.4000 - 1.4000 1.00002 0.7911 0.0791 0.7120 0.6880 1.4000 1.0000Share Class A Group 1: Shares purchased prior to 1 July 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 2.6592 0.2659 2.3933 - 2.3933 3.77342 0.8627 0.0863 0.7764 1.6169 2.3933 3.7734Share Class B Group 1: Shares purchased prior to 1 January 2009Interim distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.6667 0.1667 1.5000 - 1.5000 1.10662 0.4497 0.0450 0.4047 1.0953 1.5000 1.1066Share Class B Group 1: Shares purchased prior to 1 July 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 2.6349 0.2635 2.3714 - 2.3714 3.60062 0.8823 0.0882 0.7941 1.5773 2.3714 3.6006Share Class C Group 1: Shares purchased prior to 1 January 2009Interim accumulation (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Accumulation Paid 2008 Paid1 2.8889 0.2889 2.6000 - 2.6000 1.34662 1.6953 0.1695 1.5258 1.0742 2.6000 1.3466Share Class C Group 1: Shares purchased prior to 1 July 2009Final accumulation (pence per share) Group 2: Shares purchased on or after 1 July 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Accumulation Payable 2008 Paid1 4.9424 0.4942 4.4482 - 4.4482 6.99862 2.2622 0.2262 2.0360 2.4122 4.4482 6.9986A shareholder liable to UK Corporation Tax receives the distribution and associated tax credit as franked investment income to theextent that the gross income from which the distribution is made is itself franked investment income. Where the gross income fromwhich the distribution is made is not wholly franked investment income, part of the distribution is received by the shareholder as anannual payment from the Scheme from which income tax at the lower rate has been deducted.Of the distribution:i) 47.73% of the final income distribution is received as franked investment income; andii)52.27% of the final income distribution is received as an annual payment from which income tax at the lower rate has beendeducted. The gross amount of this portion of total income distribution is liable to UK Corporation Tax. It is not frankedinvestment income.

ECCLESIASTICAL Investment Funds 65Distribution/Accumulation StatementsUK Equity Growth FundShare Class A Group 1: Shares purchased prior to 1 January 2009Interim distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 0.8556 0.0856 0.7700 - 0.7700 0.77002 0.5739 0.0574 0.5165 0.2535 0.7700 0.7700Share Class A Group 1: Shares purchased prior to 1 January 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 0.7341 0.0734 0.6607 - 0.6607 1.76712 0.2552 0.0255 0.2297 0.4310 0.6607 1.7671Share Class B Group 1: Shares purchased prior to 1 January 2009Interim distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Paid 2008 Paid1 1.1733 0.1173 1.0560 - 1.0560 1.05602 1.1733 0.1173 1.0560 - 1.0560 1.0560Share Class B Group 1: Shares purchased prior to 1 January 2009Final distribution (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Distribution Payable 2008 Paid1 1.5039 0.1504 1.3535 - 1.3535 2.64792 1.5039 0.1504 1.3535 - 1.3535 2.6479Share Class C Group 1: Shares purchased prior to 1 January 2009Interim accumulation (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Accumulation Paid 2008 Paid1 0.8311 0.0831 0.7480 - 0.7480 0.74802 0.4876 0.0488 0.4388 0.3092 0.7480 0.7480Share Class C Group 1: Shares purchased prior to 1 January 2009Final accumulation (pence per share) Group 2: Shares purchased on or after 1 January 2009Group Gross Income Tax Credit Net Income Equalisation 2009 Accumulation Payable 2008 Paid1 1.7784 0.1778 1.6006 - 1.6006 2.82732 0.8014 0.0801 0.7213 0.8793 1.6006 2.8273A shareholder liable to UK Corporation Tax receives the distribution and associated tax credit as franked investment income to theextent that the gross income from which the distribution is made is itself franked investment income. Where the gross income fromwhich the distribution is made is not wholly franked investment income, part of the distribution is received by the shareholder as anannual payment from the Scheme from which income tax at the lower rate has been deducted.Of the distribution:i) 94.64% of the final income distribution is received as franked investment income; andii)5.36% of the final income distribution is received as an annual payment from which income tax at the lower rate has beendeducted. The gross amount of this portion of total income distribution is liable to UK Corporation Tax. It is not frankedinvestment income.

Savings & InvestmentsLife AssuranceProtection productsRetirement planningMortgagesHome insuranceCar insuranceTravel insuranceWedding insuranceChurch insuranceChurch Hall insuranceCharity insuranceFor further information on anyof our products, call us on0845 777 3322Monday to Friday 8am to 6pm. We maymonitor or record calls to improve our serviceYou may email us atinformation@ecclesiastical.comOr visit us atwww.ecclesiastical.comIf you would like this booklet in large print,braille, on audio tape or computer discplease call us on 0845 777 3322. Youcan also tell us if you would like to alwaysreceive literature in another format.Heritage insuranceBeaufort House, Brunswick Road,Gloucester GL1 1JZEcclesiastical Insurance Office plc. (EIO) Reg. No. 24869. Ecclesiastical Insurance Group plc. (EIG) Reg. No. 1718196. Ecclesiastical Life Ltd. (ELL) Reg. No. 243111. Ecclesiastical InvestmentManagement Ltd (EIM) Reg. No. 2170173. Allchurches Mortgage Company Ltd. (AMC) Reg. No. 1974218. Ecclesiastical Financial Advisory Services Ltd. (EFAS) Reg. No. 2046087. EcclesiasticalRisk Services Ltd. (ERS) Reg. No. 6290300. All companies are registered in England at Beaufort House, Brunswick Road, Gloucester, GL1 1JZ, UK. EIO, ELL, EIM & EFAS are authorised andregulated by the Financial Services Authority and are members of the Financial Ombudsman Service. EIO & ELL are members of the Association of British Insurers and EIM is a member of theInvestment Management Association.© Ecclesiastical Insurance Office plc 2009