FAR EAST UNIT TRUST FOR THE YEAR ENDED 31 MARCH 2014

Transcription

1 FAR EAST UNIT TRUST FOR THE YEAR ENDED 31 MARCH 2014

2 Manager St. James's Place Unit Trust Group Limited PO Box 9034, Chelmsford, CM99 2XA United Kingdom Freephone: (Authorised and regulated by the Financial Conduct Authority) Directors of the Manager D. C. Bellamy A. M. Croft I. S. Gascoigne D. J. Lamb Secretary of the Manager St. James's Place Administration Limited Investment Adviser Aberdeen Asset Managers Limited 10 Queen Street Aberdeen, AB10 1YG United Kingdom (Authorised and regulated by the Financial Conduct Authority) Trustee BNY Mellon Trust & Depositary (UK) Limited 160 Queen Victoria Street London, EC4V 4LA United Kingdom (Authorised and regulated by the Financial Conduct Authority) Registrar International Financial Data Services (UK) Limited IFDS House St. Nicholas Lane Basildon, SS15 5FS United Kingdom (Authorised and regulated by the Financial Conduct Authority) Independent Auditor PricewaterhouseCoopers LLP Atria One 144 Morrison Street Edinburgh, EH3 8EX United Kingdom Prospectus and Manager's Reports Copies of the up to date Prospectus (Scheme Particulars) and latest Manager's Report and Financial Statements for the range of St. James's Place Unit Trusts can be requested from a member of the St. James's Place Partnership or, at any time during normal business hours, from the Administration Centre at PO Box 9034, Chelmsford CM99 2XA. Freephone:

3 Report of the Manager During the year under review, 1 April 2013 to 31 March 2014, the St. James's Place Far East Unit Trust Income unit offer price fell by 12.0% from 477.3p to 420.1p and the Accumulation unit offer price (in which revenue is reflected in the price rather than distributed) fell by 11.2% from 545.5p to 484.2p. On the 28 May 2014, the latest available date before the printing of this report, the Income unit offer price was 431.6p and the Accumulation unit offer price was 502.3p. The estimated yield was 1.00%. The Trust's Performance The performance of the Trust since its launch in January 1992, over the five year period since March 2009 and over the year under review is shown below, together with figures for the most commonly quoted indices in comparable markets where the major proportion of the Trust has been invested. St. James's Place Far East Unit Trust Income units (offer to offer) Accumulation units (offer to offer) Indices - actual MSCI AC Asia Pacific Source: Lipper for Fund returns 01/01/92 to 31/03/09 to 31/03/13 to 31/03/14 31/03/14 31/03/14 % change % change % change REMEMBER THAT THE PRICE OF UNITS AND REVENUE FROM THEM MAY GO DOWN AS WELL AS UP. PLEASE BE AWARE THAT PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. Investment Adviser's Comments Over the year, the portfolio fell and underperformed versus the MSCI All Country Asia Pacific Index. Both asset allocation and stock selection contributed to the underperformance. Asian equities fell during the year amid slowing regional growth, concerns over credit controls and trust defaults in China, as well as uncertainty over the US Federal Reserve s quantitative easing (QE) programme. Optimism over Japan s efforts to reflate its economy also waned towards the period-end as the consumption tax hike loomed. Our underweight to Japan, which outperformed the broader region, detracted. In addition, the overweight to Singapore and Hong Kong, which lagged the region, contributed negatively. Conversely, South Korea added to performance. Sector-wise, financials were the main detractors as the prospect of higher interest rates following the Federal Reserve's decision to taper hurt sentiment in the property market. Our industrial holdings, such as Jardine Strategic, also cost the portfolio as investors were concerned with their emerging market exposure. Samsung Electronics the electronics giant did well after posting record earnings in the last financial year, underpinned by good market share and margin gains in its handset business. Despite early concerns over India s fiscal and current account deficits, the domestic market enjoyed a late rally amid hopes that a pro-business government will be elected in the upcoming polls and the portfolio benefited through its holding of the Aberdeen Global Indian Equity Fund. Standard Chartered stock declined on speculation that it would need to raise funds via a rights issue. The bank also unexpectedly announced a restructuring with the departure of its chief financial officer and head of consumer banking. Despite these changes, we continue to like its solid franchise spread across geographies that offer compelling prospects. Efforts to cut costs and reorganise should allow it to benefit from growth over the longer term. Ayala Land stock fell in tandem with the sell-off in the Philippines, triggered by tapering uncertainty. Nevertheless, the company reported healthy full-year profits. During the period, we sold Venture Corporation as its prospects were no longer compelling and introduced Singapore lender DBS Group instead, as it is well capitalised, has posted consistently good quarterly results and steps taken to refocus on consumer lending in South-East Asia s highergrowth markets have also been encouraging. We reduced our holding and took partial profit in Samsung Electronics after a strong run-up in the share price. Conversely, we added to Standard Chartered after its shares corrected on the announcement of its restructuring in January. 2

4 Report of the Manager (continued) Looking ahead, India and Indonesia have been rewarded by investors for their efforts to fix domestic imbalances and, should policy continue on the right path, both markets could enjoy further gains. In China, however, the rebalancing process could take much longer. In Japan, structural reforms are moving at a glacial pace, threatening to derail Abenomics. Aberdeen Asset Managers Limited 14 April

5 Performance Record Unit Price History Calendar year * Income Accumulation Highest Lowest Highest Lowest Offer Bid Offer Bid p p p p Distributions The record of net distributions paid/payable per unit is shown below: Income Accumulation Net revenue distributed Net revenue distributed per 1,000 per 1,000 Invested Invested per unit at 02/01/09 per unit at 02/01/09 Calendar year p p * Net Asset Values Year ended March Units in Issue Units in Issue Market NAV per Unit NAV per Unit Income Accumulation NAV of Trust Income Accumulation '000 p p 3,692, ,628,454 1,152, ,326, ,268,003 1,448, ,079, ,469,280 1,295, Ongoing Charges Figure The Ongoing Charges Figure for the year ended 31 March 2014 was 1.62% (31 March 2013: 1.60%). The Ongoing Charges Figure ('OCF') is the total expenses paid by the Trust in the year against its average net asset value. It excludes the cost of buying or selling assets for the Trust (unless these assets are shares of another trust). The OCF can fluctuate as underlying costs change. Risk and Reward Profile The synthetic risk and reward indicator for the St. James s Place Far East Unit Trust, as disclosed in its most recent Key Investor Information Document (KIID), is a 6. It was calculated using performance data up to 3 February The risk category is recalculated weekly. During the year under review, the risk category changed from a category 6 to a category 5 for a period of ten weeks during June to August 2013 and has also been a category 5 for the last nine weeks of the year. Please note that if the risk category consistently remains as a category 5 for a four month period, the KIID will be amended from a category 6 accordingly. * To 31 March

6 Investment Assets as at 31 March 2014 Security Holdings Market Value 000 % of Net Assets AUSTRALIA (10.79%) 141, BHP Billiton 2,236,000 45, QBE Insurance 4,359,984 30, Rio Tinto 1,339,000 47, Shopping Centres Australasia Property # 180, Woolworths 902,835 17, CHINA (2.07%) 26, PetroChina 40,130,000 26, HONG KONG (16.90%) 218, AIA 14,193,400 40, ASM Pacific Technology 2,537,600 14, China Mobile (Hong Kong) 4,695,000 25, Dairy Farm International 1,883,100 11, Hang Lung 3,205,000 9, Hang Lung Properties 7,591,000 13, Jardine Strategic 2,140,886 45, Li & Fung 16,136,000 14, Swire Pacific 'A' 2,323,000 16, Swire Pacific 'B' 10,632,500 13, Swire Properties 2,567,600 4, Wing Hang Bank 1,013,729 9, INDIA (7.60%) 120, Aberdeen Global - Indian Equity Fund 1,004,743 63, Grasim Industries GDR 438,064 10, ICICI Bank ADR 880,000 23, Infosys ADR 604,100 19, Ultratech Cement GDR * 171,464 3, INDONESIA (0.77%) 11, Unilever Indonesia 7,260,500 11, JAPAN (22.82%) 291, Canon 2,138,000 39, Chugai Pharmaceutical 2,208,000 33, FANUC 356,400 37, Honda Motor 1,459,200 30, Japan Tobacco 1,323,000 24, Seven & I 1,387,900 31, Shin-Etsu Chemical 974,100 33, Takeda Pharmaceutical 304,700 8, Toyota Motor 763,500 25, Unicharm 753,600 24, MALAYSIA (1.56%) 20, CIMB Bhd 8,353,066 10, Public Bank 2,704,212 9, PHILIPPINES (2.63%) 29, Ayala Land 73,100,960 29,

7 Investment Assets (continued) as at 31 March 2014 Market Value 000 % of Net Assets Security Holdings SINGAPORE (15.44%) 195, City Developments 6,132,000 29, DBS 1,598,000 12, Keppel 3,502,000 18, Keppel # 980, Oversea-Chinese Banking 9,980,703 46, Singapore Airlines 2,092,000 10, Singapore Technologies Engineering 12,568,000 22, Singapore Telecommunications 13,808,500 23, United Overseas Bank 3,079,124 31, SOUTH KOREA (3.50%) 53, Samsung Electronics GDR 7,000 2, Samsung Electronics 'Preference Shares' 87,650 51, TAIWAN (4.14%) 59, Taiwan Mobile 7,670,434 14, Taiwan Semiconductor Manufacturing 19,376,430 45, THAILAND (3.24%) 38, Hana Microelectronics 7,350,000 4, PTT Exploration & Production 5,601,000 16, Siam Cement 2,296,900 17, UNITED KINGDOM (6.14%) 73, HSBC 6,367,638 38, Standard Chartered 2,730,635 34, Investment assets 1,278, Total other assets (net) 16, Net assets 1,295, Comparative figures shown in brackets relate to 31 March All investments held are listed, unless otherwise stated. Stocks shown as ADRs and GDRs represent American Depositary Receipts and Global Depositary Receipts. * Unlisted securities. # Real Estate Investment Trust (REIT). 6

8 Material Portfolio Changes Cost Purchases 000 Aberdeen Global - Indian Equity Fund 15,800 DBS 14,360 Chugai Pharmaceutical 13,183 Japan Tobacco 9,390 BHP Billiton 6,667 PetroChina 4,838 Hang Lung Properties 4,236 Li & Fung 3,411 City Developments 3,242 Jardine Strategic 3,125 Proceeds Sales 000 Takeda Pharmaceutical 24,149 Venture 9,572 Samsung Electronics 'Preference Shares' 3,954 Toyota Motor 1,981 QBE Insurance 1,950 Singapore Technologies Engineering 1,032 Singapore Airlines 977 7

9 Statement of the Manager's Responsibilities in relation to the Financial Statements of the Trust The rules in the Financial Conduct Authority's Collective Investment Schemes Sourcebook ("the Rules") require the Manager to prepare Financial Statements for each annual accounting period which give a true and fair view of the financial position of the Trust as at the end of the year and of the net revenue and the net capital losses on the property of the Trust for the year then ended. In preparing the Financial Statements the Manager is required to: select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; comply with the requirements of the Statement of Recommended Practice relating to Authorised Funds and the Trust Deed; follow applicable UK Accounting Standards (UK Generally Accepted Accounting Practice); and prepare Financial Statements on the going concern basis unless it is inappropriate to presume that the Trust will continue in operation. The Manager is responsible for keeping proper accounting records and for the management of the Trust in accordance with its Trust Deed, Prospectus and the Rules. The Manager has a general responsibility for taking such steps as are reasonably open to it to prevent and detect fraud and other irregularities. Directors' Certificate This report is certified in accordance with the requirements of the rules in the Financial Conduct Authority's Collective Investment Schemes Sourcebook. Directors A. M. Croft London D. J. Lamb 29 May

10 Statement of Trustee's Responsibilities The Trustee is under a duty to take into custody and to hold the property of the Trust in trust for the holders of units. It is also the duty of the Trustee to enquire into the conduct of the Manager in the management of the Trust and to ensure that the Trust is managed in accordance with all applicable rules and restrictions in each annual accounting period, and to report thereon to unitholders. Report of the Trustee In our opinion, the Manager has managed the Trust, in all material aspects, during the period covered by this Report in accordance with the investment and borrowing powers and the restrictions applicable to the Trust and otherwise in accordance with the provisions of the Trust Deed and the rules in the Financial Conduct Authority's Collective Investment Scheme provisions of the Sourcebook. For and on behalf of: BNY Mellon Trust & Depositary (UK) Limited London 29 May

11 Independent Auditors Report to the Unitholders of St. James s Place Far East Unit Trust Our opinion In our opinion the financial statements, defined below: give a true and fair view of the financial position of the Trust as at 31 March 2014 and of the net revenue and the net capital losses of the scheme property of the Trust for the year then ended; and have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, the Statement of Recommended Practice for Authorised Funds, the Collective Investment Schemes sourcebook and the Trust Deed. This opinion is to be read in the context of what we say in the remainder of this report. What we have audited The financial statements of St. James s Place Far East Unit Trust (the Trust ), which are prepared by St. James s Place Unit Trust Group Limited (the Authorised Fund Manager ), comprise: the balance sheet of the Trust as at 31 March 2014; the statement of total return of the Trust for the year then ended; the statement of change in net assets attributable to unitholders of the Trust for the year then ended; the notes to the Trust s financial statements, which include a summary of significant accounting policies and other explanatory information; and the distribution tables. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), the Statement of Recommended Practice Financial Statements of Authorised Funds issued by the Investment Management Association (the Statement of Recommended Practice for Authorised Funds ), the Collective Investment Schemes sourcebook and the Trust Deed. In applying the financial reporting framework, the Authorised Fund Manager has made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events. 10

12 What an audit of financial statements involves We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) ( ISAs (UK & Ireland) ). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Trust s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Authorised Fund Manager; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report (the Annual Report ) to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinions on matters prescribed by the Collective Investment Schemes sourcebook In our opinion: we have obtained all the information and explanations we consider necessary for the purposes of the audit; and the information given in the Authorised Fund Manager s Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Other matters on which we are required to report by exception Propriety of accounting records and information and explanations received Under the Collective Investment Schemes sourcebook we are required to report to you if, in our opinion: proper accounting records have not been kept; or the financial statements are not in agreement with the accounting records and returns. We have no exceptions to report arising from this responsibility. 11

13 Responsibilities for the financial statements and the audit Our responsibilities and those of the Authorised Fund Manager As explained more fully in the Authorised Fund Manager s Responsibilities Statement set out on page 8, the Authorised Fund Manager is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK & Ireland). Those standards require us to comply with the Auditing Practices Board s Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the Trust s unitholders as a body in accordance with paragraph of the Collective Investment Schemes sourcebook and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors Edinburgh 29 May 2014 The maintenance and integrity of the St. James s Place website is the responsibility of the Fund Manager; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 12

14 Statement of Total Return for the year ended 31 March 2014 Income Net capital (losses)/gains Revenue Expenses Finance costs: Interest Net revenue before taxation Taxation Net revenue after taxation 01/04/13 to 31/03/14 01/04/12 to 31/03/13 Notes (175,207) 170, ,739 32,450 4 (22,230) (19,533) ,509 12,917 5 (1,737) (1,468) 12,772 11,449 Total return before distribution (162,435) 181,541 Finance costs: Distribution 6 (12,771) (11,449) Change in net assets attributable to unitholders from investment activities (175,206) 170,092 Statement of Change in Net Assets Attributable to Unitholders for the year ended 31 March /04/13 to 31/03/14 01/04/12 to 31/03/ Opening net assets attributable to unitholders 1,448,374 1,152,418 Movement due to creation and cancellation of units: Amounts receivable on creation of units 70, ,406 Amounts payable on cancellation of units (60,889) (25,502) Stamp duty reserve tax Change in net assets attributable to unitholders from investment activities (see above) Retained distribution on accumulation units Closing net assets attributable to unitholders 9, ,904 (34) (32) (175,206) 170,092 12,510 11,992 1,295,149 1,448,374 The prices per unit as at 31 March 2014 (unaudited) were: Income units Accumulation units Bid Offer p p

15 Balance Sheet as at 31 March 2014 Assets Investment assets Debtors Cash and bank balances Total other assets Total assets 31/03/14 31/03/13 Notes ,278,980 1,413, ,400 11, ,307 32,301 18,707 43,454 1,297,687 1,457,137 Liabilities Creditors 10 (2,418) (8,637) Distribution payable on income units (120) (126) Total liabilities (2,538) (8,763) Net assets attributable to unitholders 1,295,149 1,448,374 14

16 Notes to the Financial Statements for the year ended 31 March Accounting and Distribution policies (a) Basis of accounting (b) (c) (d) Valuation of investments Listed investments have been valued at bid market value at midday on 31 March 2014 (28/03/13: bid market value at midday), net of any accrued interest which is included in the Balance Sheet as a revenue related item. (g) The Financial Statements have been prepared under the historical cost basis, as modified by the revaluation of investments, in compliance with the Financial Conduct Authority's Collective Investment Schemes Sourcebook. They have been prepared in accordance with applicable UK accounting standards and in accordance with the Statement of Recommended Practice (SORP) for Financial Statements of Authorised Funds issued by the IMA in October 2010 (IMA SORP 2010). Revenue Dividends receivable from equity investments are credited to the revenue account when the investments are first quoted ex-dividend. Dividends from unquoted stocks are credited to revenue when the dividend is declared. Interest on deposits is accounted for on an accruals basis. Dividends from Real Estate Investment Trusts ('REITs') are recognised as distributable income when the securities are quoted ex-dividend. Revenue from other authorised collective investment schemes are recognised when the investments are quoted ex-dividend. Management fee rebates from underlying funds will be taken to revenue or capital depending on the treatment adopted in the underlying funds. Expenses All expenses of the Trust are recognised on an accruals basis and are deducted from revenue with the exception of handling charges and stamp duty reserve tax which are deducted from capital. The Manager, on advice from the Investment Adviser, values unquoted, illiquid and suspended investments based on the best information available: The information will include Annual Reports (audited), trading statements and market intelligence. The reviews take place not less than quarterly but more frequently if it is deemed necessary. (e) Foreign exchange Assets and liabilities have been translated into sterling at the exchange rates prevailing at the Balance Sheet date. Transactions involving foreign currencies are converted at the rate ruling on the date of the transaction. (f) Taxation Provision is made for corporation tax at the current rate on the excess of taxable revenue over allowable expenses. UK dividend revenue is disclosed net of any related tax credit. Overseas dividends continue to be disclosed gross of any foreign tax suffered, the tax element being separately disclosed in the tax note. Deferred tax is provided for on the liability method on all timing differences. A deferred tax asset is only recognised to the extent that a timing difference will be of future benefit. Distribution policy The manager has chosen to pay all revenue less revenue expenses and taxation as a final distribution at the end of the accounting period. In the case of income unitholders this will be paid as a distribution. In the case of accumulation unitholders the distribution will be reinvested. 15

17 Notes to the Financial Statements (continued) (h) Equalisation Equalisation applies only to units purchased during the distribution period. It is the accrued revenue element of the purchase price of all such units and is refunded to holders of these units as a return of capital. Being capital it is not liable to income tax, but must be deducted from the cost of units for capital gains tax purposes. (i) Special dividends Special dividends are treated as revenue or a repayment of capital reflecting the facts of each particular case. (j) Scrip dividends The ordinary element of stocks received in lieu of cash dividends is recognised as revenue and where applicable, is included in the distribution. In the case of enhanced scrip dividends, the value of the enhancement is treated as capital. 2. Net capital (losses)/gains 01/04/13 to 31/03/14 01/04/12 to 31/03/ Non-derivative securities (175,523) 169,931 Currency gains Handling charges (4) (8) Net capital (losses)/gains (175,207) 170, Revenue 01/04/13 to 31/03/14 01/04/12 to 31/03/ UK dividends 2,903 3,138 Overseas dividends 31,722 28,520 Bank interest Revenue from Overseas REITs 31 - Management charge rebate on underlying holdings Scrip dividends 1,049 - Total revenue 36,739 32, Expenses 01/04/13 to 31/03/14 01/04/12 to 31/03/ Payable to the Manager Management charge 20,761 18,090 Payable to the Trustee Trustee's fees Other expenses Audit fee 7 6 Registrar's fees Safe custody fees Tax & compliance fee 2 2 ADR Issurance fee ,363 1,342 Total expenses 22,230 19,533 16

18 Notes to the Financial Statements 5. (a) (b) Taxation Analysis of charge in year: Irrecoverable overseas tax Factors affecting current tax charge for the year: (continued) 01/04/13 to 01/04/12 to 31/03/14 31/03/ ,737 1,468 The tax assessed for the year is lower than the standard rate of corporation tax in the UK for an authorised unit trust of 20% (2013: 20%). The differences are explained below: Net revenue before taxation 14,509 12,917 (c) (d) Corporation Tax at 20% (2013: 20%) Effects of: UK dividends not subject to corporation tax Non taxable scrip dividends Non taxable foreign dividends Movement in excess management expenses Irrecoverable overseas tax Current tax charge for year (note 5a) Finance costs Distribution and interest 2,902 2,583 (581) (627) (210) - (6,344) (5,704) 4,233 3,748 1,737 1,468 1,737 1,468 Authorised Unit Trusts are exempt from tax on capital gains, therefore any capital return is not included in the above reconciliation. Deferred taxation: There is no provision required for deferred taxation at the balance sheet date. Factors that may affect future tax charges At the year end, after offset against revenue taxable on receipt, there is a potential deferred tax asset of 14,081,784 (31/03/13: 9,848,273) relating to surplus management expenses. No deferred tax asset was recognised in the current or prior year as it was considered unlikely the Trust would generate sufficient taxable profits in the future to utilise these amounts. The distribution takes account of revenue received on the creation of units and revenue deducted on the cancellation of units and comprises: 01/04/13 to 31/03/14 01/04/12 to 31/03/ Final distribution 12,630 12,118 Add: Revenue deducted on cancellation of units Deduct: Revenue received on creation of units (259) (793) Net distribution for the year Interest Total finance costs Movement between net revenue and net distribution Net revenue after taxation Add: brought forward from previous year Less: carried forward to next year Net distribution for the year 12,771 11, ,771 11,449 01/04/13 to 31/03/14 01/04/12 to 31/03/ ,772 11, (2) (1) 12,771 11,449 17

19 Notes to the Financial Statements 8. Debtors Sales awaiting settlement Amounts receivable for creation of units Accrued revenue Rebate receivable on underlying holdings Total debtors (continued) 31/03/14 31/03/ , ,970 6,316 8, ,400 11, Cash and bank balances 31/03/14 31/03/ Cash and bank balances: Sterling 4,192 31,225 Cash and bank balances: Overseas 2,115 1,076 Total cash and bank balances 6,307 32, Creditors 31/03/14 31/03/ Purchases awaiting settlement 550 6,621 Amounts payable for cancellation of units 1, Accrued expenses 167 1,976 Total creditors 2,418 8, Units in issue At the year end there were Income units of 3,079,351 (31/03/13: 3,326,141) and Accumulation units of 278,469,280 (31/03/13: 277,268,003) resulting in equivalent Income units of 327,134,053 (31/03/13: 322,877,515). 12. Related party transactions St. James's Place Unit Trust Group Limited and BNY Mellon Trust & Depositary (UK) Limited together with their associates are related parties and regarded as controlling parties by virtue of having the ability to act in respect of operations of the Trust. The Manager'sservice charge paid to St. James'sPlace UnitTrustGroupLimited is shown in note 4 and details of the value of units created and cancelled by St. James's Place Unit Trust Group Limited are shown in the Statement of Change in Net Assets Attributable to Unitholders. The net balances due to St. James's Place Unit Trust Group Limited at the year end in respect of these transactions was 1,484,489 (31/03/13: due from 1,206,268). Trustee's fees and interest payable to the BNY Mellon Trust & Depositary (UK) Limited and their associates are shown in notes 4 and 6 respectively. The net balances due from BNY Mellon Trust & Depositary (UK) Limited and their associates at the year end in respect of these transactions was nil (31/03/13: 10,222). The Manager, St. James's Place Unit Trust Group Limited, is a subsidiary of St. James's Place Wealth Management Group plc ('SJPWMG'). Two fellow subsidiaries of SJPWMG, St. James's Place International plc and St. James's Place UK plc, invest some of their life and pension policyholders' funds into the St. James's Place Far East Unit Trust. The value of these investments at the year end was 908,260,284 (31/03/13: 1,025,353,449). 13. Capital commitments and contingent liabilities On 31 March 2014, the Trust had no capital commitments (31/03/13: nil) and no contingent liabilities (31/03/13: nil). 14. Financial instruments In accordance with the investment objectives, as stated on page 20, the Trust holds certain financial instruments. These comprise: Equity shares, units in collective investment schemes; and, Cash (including overdrafts) and short-term debtors and creditors that arise directly from its operations. The rules in the Scheme Documents set out the financial instruments in which the Trust may invest. The Trust's use of financial instruments during the year satisfies these requirements. 18

20 Notes to the Financial Statements (continued) 15. Risk management The Manager s objectives in managing investment risk are to ensure that the investment profile of the Trust is consistent with its stated investment objectives and risk profile, and to ensure appropriate liquidity. Day to day responsibility for managing investment risk is delegated to the Investment Adviser, who is required to manage the Trust in accordance with FCA regulations, the Prospectus and the terms of their Investment Management Agreement with the Manager. The Manager monitors the activities of the Investment Adviser, through a variety of mechanisms including the following: Initial and ongoing due diligence of Investment Adviser investment and risk management procedures including on site reviews; Periodic reviews of the investments held by the Trust and their compliance with investment objectives and liquidity requirements; and Ongoing review of the investment performance of the Trust against appropriate benchmarks. The main risks arising from the Trust's financial instruments are market price risk, foreign currency risk, credit risk and liquidity risk. The Manager's policies for managing these risks are summarised below. These policies have remained unchanged since the beginning of the year to which these financial statements relate. (a) Market price risk Market price risk represents the potential loss the Trust might suffer through holding market positions in the face of price movements. The Manager has delegated the investment management of the portfolio to an external Investment Adviser who determines the asset allocation and minimises the risk associated with particular countries or industry sectors, whilst continuing to follow the Trust s investment objectives. The Manager has the responsibility for monitoring the portfolio to ensure compliance with the investment objectives and that an acceptable risk reward profile is maintained. (b) Foreign currency risk The revenue and capital value of the Trust s investments can be significantly affected by currency translation movements as a proportion of the Trust s assets and revenue that are denominated in currencies other than sterling, which is the Trust s functional currency. The Manager has identified three principal areas where foreign currency risk could impact the Trust: Movements in exchange rates affect the value of investments; Movements in exchange rates affect short term timing differences; and Movements in exchange rates affect revenue received. The Trust may be subject to short term exposure to exchange rate movements, for instance where there is a difference between the date an investment purchase or sale is entered into and the date when settlement of the proceeds occurs. When the Trust enters into such a transaction which will involve the buying or selling of foreign currency in order to complete, a foreign exchange contract is entered into as soon as possible after the initial transaction in order to minimise the exchange rate risk. The Trust receives revenue in currencies other than sterling and movements in exchange rates can affect the sterling values of this revenue. The Trust converts all receipts of revenue into sterling on or near the date of receipt, it does not however hedge or otherwise seek to avoid exchange rate risk on revenue accrued but not received. 19

21 Notes to the Financial Statements (continued) An analysis of monetary assets and liabilities for all currencies at the year end is shown below: Net foreign currency assets Net foreign currency assets 31/03/14 31/03/13 Nonmonetary Nonmonetary Currency Monetary exposures exposures Total Monetary exposures exposures Total GBP AUD HKD IDR INR JPY KRW MYR PHP SGD TWD THB USD ,267 63,387 66,654 31,845 46,484 78,329 1, , ,978 (4,560) 156, , , ,735 1, , , ,166 11,166-11,223 11, , , ,642 2, , , ,602 52, ,774 49, ,491 20,650-22,346 22,346-29,186 29,186-38,142 38, , , , , ,458 59, ,940 60, ,050 38,488 (1) 46,941 46,940 2, , ,836 2, , ,904 16,169 1,278,980 1,295,149 34,691 1,413,683 1,448,374 (c) Interest rate risk Interest receivable on bank deposits or payable on bank overdraft positions will be affected by fluctuations in interest rates. (d) Credit risk The Trust s investments and cash are held on its behalf by State Street Bank and Trust Company (acting as agent), the custodian to the Trust, and its appointed sub custodians. Bankruptcy or insolvency of the custodian or its sub custodians may cause the Trust s rights with respect to securities to be delayed. This risk is managed through ongoing monitoring of the custodian and periodic reviews of its procedures for selecting and monitoring sub custodians, together with ad hoc reviews of custodian and sub custodian credit ratings. Certain transactions in securities that the Trust enters into expose it to the risk that the counterparty will not deliver the investment (purchase) or cash (sale) after the fund has fulfilled its responsibilities. The external Investment Adviser selects acceptable counterparties through which investments are bought and sold. The Manager has responsibility for monitoring the process by which these counterparties are selected to minimise risk. (e) Liquidity risk Liquidity risk arises where liabilities cannot be met when they fall due or can only be met at an uneconomic price. For instance, this could arise if the Trust faces significant redemptions in a short period of time. In order to manage this risk the manager monitors the Trust with the aim of ensuring that it contains diversified liquid assets, that the Trust possesses sufficient liquidity for the purpose of meeting the redemption of units, and that the Trust has sources of borrowing available to it. 20

22 Notes to the Financial Statements (continued) (f) Derivative risk The Manager may use derivative instruments to hedge the value of the investment portfolio against market, currency and stock specific risk through investment in warrants, options, forwards and futures. The purpose of the financial instruments is efficient portfolio management. In particular futures may be used to implement the investment policy in a timely manner and to manage market risk arising from the time lag between funds being receivable or payable by the Trust and investment and disinvestment in underlying securities. As the trust is not considered a sophisticated fund, the manager uses the commitment approach to measure the global exposure to derivatives. No such derivatives were held by the Trust in the period/year to 31 March (g) Maturity profile of financial liabilities All financial liabilities of the Trust at the year end are due to settle in one year or less, or on demand. (h) Fair value of financial assets and liabilities There is no material difference between the value of the financial assets and liabilities, as shown in the Balance Sheet, and their fair values. 16. Portfolio transaction costs Analysis of total trade costs. Purchases Sales 01/04/13 to 31/03/14 01/04/12 to 31/03/13 01/04/13 to 31/03/14 01/04/12 to 31/03/ Non-derivative securities 84, ,349 43,685 50,207 Commissions (54) (86) Taxes (16) (32) Total costs (70) (118) Total trades in the year after transaction costs 84, ,718 43,615 50,089 21

23 Distribution Tables Distribution in pence per unit Group 1 Final Units purchased prior to 1 April 2013 Group 2 Final Units purchased on or after 1 April 2013 to 31 March 2014 Income Net revenue Equalisation Distribution payable 31/05/14 Distribution paid 31/05/13 Group 1 (p) (p) (p) (p) Final Group 2 (p) (p) (p) (p) Final Accumulation Net revenue Equalisation Distribution payable 31/05/14 Distribution paid 31/05/13 Group 1 (p) (p) (p) (p) Final Group 2 (p) (p) (p) (p) Final

24 General Information The Trust St. James's Place Far East Unit Trust is an authorised Unit Trust scheme under section 243 of the Financial Services and Markets Act (2000) and is constituted by a Trust Deed dated 6 December The Unit Trust is subject to the rules of the Financial Conduct Authority's Collective Investment Scheme Sourcebook and is classified as a UCITS Scheme. The Trust Manager The Manager of the Trust is St. James's Place Unit Trust Group Limited which is a member of the IMA and is authorised and regulated by the Financial Conduct Authority. Investment Objectives The aim of the Scheme is capital growth from investment principally in the stock markets of Japan, the Far East and the Pacific Basin, which may include investments that are listed, registered or trading within this area. It is the Manager's intention that the assets of the Unit Trust will be invested so that the Unit Trust will be eligible for inclusion in an ISA. European Savings Directive It is the Manager's intention that the Trust will not normally hold 15% or more of its value in money debt instruments. Unit Dealings Dealings on the Trust take place on a daily basis. Purchase or sale instructions can be made by telephone or in writing to St. James's Place Unit Trust Group Limited, PO Box 9034, Chelmsford, CM99 2XA, United Kingdom, freephone: The Manager adopts a policy of forward pricing, i.e. the order will be transacted on the dealing day following receipt of the client's instructions, or if received before noon, on that dealing day. In the case of telephone purchases of units from the Manager, settlement must be by return of post after receipt of the contract note. In the case of telephone redemptions, the proceeds will not become payable until the receipt at the Administration Centre of a written request. A contract note confirming the subscription or redemption price and the number of units involved will be forwarded, together with a cancellation notice, where appropriate, on the next business day. The most recent issue and redemption prices will be published on the Manager's website: and are available by calling the Administration Centre on Minimum Investment The minimum lump sum investment is 1,500, thereafter the minimum additional investment is 1,000. The minimum monthly investment is 150 and the minimum monthly increment is 50. The minimum annual investment is 1,500 and the minimum annual increment is 500. Management Charges The Trust Deed permits the following management charges which are receivable by the Manager: (a) A Preliminary Charge of 5 per cent which is included in the offer price of the Units. (b) An Annual Management Charge at a rate of 1.5 per cent of the value of the Trust. Income Distributions Income distributions are made annually on or before the 31 May. Accumulation Distributions Revenue due to accumulation unitholders is reflected in the price of their units. Tax Vouchers Income unitholders that receive income distributions by direct credit and accumulation unitholders (where the distribution income is reinvested) receive an annual consolidated tax voucher in May with all the relevant payment and tax information required to complete a tax return. Tax vouchers will be enclosed if income unitholders receive payment by cheque. 23

25 General Information (continued) Report A report is sent semi-annually to all unitholders on or before 31 May and 30 November. Capital Gains Tax The Trust is not liable to tax on capital gains and any individual holding units will not be liable to capital gains tax unless the total chargeable gains for the tax year 2014/2015 exceed 11,000 (2013/ ,900). To calculate capital gains on accumulation units, the total amount of reinvested net revenue (shown on the annual tax credit vouchers) should be added to the base cost of the units purchased. Unitholders should consult their professional advisers for any advice regarding their tax position. 24

26 St. James s Place Unit Trust Group Ltd is authorised and regulated by the Financial Conduct Authority. St. James s Place Unit Trust Group Ltd Registered Office: St. James s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom. Registered in England Number Perivan Financial Print Far East (5/14)