GILTS UNIT TRUST FOR THE YEAR ENDING 31 MARCH 2015

Transcription

1 GILTS UNIT TRUST FOR THE YEAR ENDING 31 MARCH 2015

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 Investment Adviser Wellington Management Company LLP Cardinal Place, 80 Victoria Street London, SW1E 5JL 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 2014 to 31 March 2015, the St. James's Place Gilts Unit Trust Class L Income unit offer price rose by 4.8% from 105.9p to 111.0p and the Class L Accumulation unit offer price (in which revenue is reflected in the price rather than distributed) rose by 5.8% from 114.8p to 121.5p. Class R Income unit offer price rose by 4.5% from 191.9p to 200.5p and the Class R Accumulation unit offer price rose by 5.6% from 193.5p to 204.4p. During the period from launch the Class L Gross Income unit offer price rose by 3.6% from 107.1p to 111.0p and the Class L Gross Accumulation unit offer price rose by 4.0% from 117.1p to 121.8p. Class R Gross Income unit offer price rose by 3.5% from 193.9p to 200.6p and the Class R Gross Accumulation unit offer price rose by 3.8% from 197.1p to 204.6p. The Manager's Report consists of Report of the Manager, The Trust's Performance, Investment Adviser's Comments, Risk and Reward Profile and Portfolio Statement. The Trust's Performance The performance of the Trust since its launch in March 2009, over the five year period since March 2010 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 Gilts Unit Trust Class L Income units (offer to offer) Class L Accumulation units (offer to offer) Class R Income units (offer to offer)* Class R Accumulation units (offer to offer)* Class L Gross Income units (offer to offer)** Class L Gross Accumulation units (offer to offer)** Class R Gross Income units (offer to offer)** Class R Gross Accumulation units (offer to offer)** 16/03/09 to 31/03/10 to 31/03/14 to 31/03/15 31/03/15 31/03/15 % change % change % change Indices - actual FTSE British Government Gilts < 5 Years (Total Return) FTSE British Government Gilts 5-15 Years (Total Return) * Class R Income and Accumulation units were made available on 31 December 2012 and the performance shown is from that date. **Class R Gross Income and Gross Accumulation, L Gross Income and Gross Accumulation units were made available on 6 October 2014 and the performance shown is from that date. Source: FTSE International Limited ( FTSE ) FTSE FTSE is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE s express written consent. 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. 2

4 Report of the Manager (continued) Investment Adviser's Comments Over the course of the period there has been a continued rally in the gilt market because of ongoing demand for safe haven assets. Flows into gilts were driven by continuing geopolitical tension in Russia and Ukraine, a sharp fall in oil prices and, more recently, concerns over the Greek elections and the impact the new government will have. Data from the US and UK showed improvements in the economy during the second quarter of 2014, but a slowdown in Chinese growth and the escalating conflict in Russia and Ukraine supported demand for gilts. There was some volatility around the time of the Scottish referendum in September, during which gilts sold off. Towards the end of the year the fall in oil prices raised fears of global deflation, especially in the eurozone, where low inflation was already a concern. Globally, 2014 was a year of sluggish growth, accompanied by ongoing geopolitical tension that kept government bonds rallying. The UK has been affected by slowing exports to Europe and imported deflation. The outlook for the UK is unclear. Data reflecting consumer confidence and spending in the UK shows a strong domestic demand dynamic. This strength in demand is coming from higher real incomes, helped primarily by lower inflation, rather than rising wages. Inflation is being held down by lower energy costs and the impact of recent strength in the British pound. Given all this, and the uncertainty surrounding the general election, we do not expect the Bank of England to send a strong signal on the path of rates in the short term. Wellington Management Company LLP 16 April

5 Performance Record Unit Price History and Record of Net Distributions Paid/Payable The record of net distributions paid/payable per unit is shown below: Class L Income Calendar year * Class L Accumulation Calendar year * Class R Income Calendar year * Class R Accumulation Calendar year * Class L Gross Income Calendar year * Class L Gross Accumulation Calendar year * Net revenue distributed Highest Lowest per 1,000 Invested Offer Bid per unit at 04/01/10 p p p Net revenue distributed Highest Lowest per 1,000 Invested Offer Bid per unit at 04/01/10 p p p Net revenue distributed Highest Lowest per 1,000 Invested Offer Bid per unit at 31/12/12 p p p Net revenue distributed Highest Lowest per 1,000 Invested Offer Bid per unit at 31/12/12 p p p Net revenue distributed Highest Lowest per 1,000 Invested Offer Bid per unit at 06/10/14 p p p Net revenue distributed Highest Lowest per 1,000 Invested Offer Bid per unit at 06/10/14 p p p

6 Performance Record Class R Gross Income Calendar year * Class R Gross Accumulation Calendar year * Net Asset Values Class L Income Year ended March Class L Accumulation Year ended March Class R Income Year ended March Class R Accumulation Year ended March Class L Gross Income Year ended March 2015 Class L Gross Accumulation Year ended March 2015 Class R Gross Income Year ended March 2015 Class R Gross Accumulation Year ended March 2015 (continued) Net revenue distributed per 1,000 Highest Lowest Invested Offer Bid per unit at 06/10/14 p p p Net revenue distributed per 1,000 Highest Lowest Invested Offer Bid per unit at 06/10/14 p p p Market NAV NAV Units in Issue of Class per Unit '000 p 15,445,895 16, ,542,366 11, ,486,990 1, Market NAV NAV Units in Issue of Class per Unit '000 p 97,010, , ,278,915 75, ,626,060 58, Market NAV NAV Units in Issue of Class per Unit '000 p 707,626 1, ,106,136 7, ,368,088 4, Market NAV NAV Units in Issue of Class per Unit '000 p 1,912,809 3, ,600,752 14, ,179,140 10, Market NAV NAV Units in Issue of Class per Unit '000 p 8,604,237 9, Market NAV NAV Units in Issue of Class per Unit '000 p 15,571,920 18, Market NAV NAV Units in Issue of Class per Unit '000 p 5,721,365 10, Market NAV NAV Units in Issue of Class per Unit '000 p 10,844,866 21,

7 Performance Record Ongoing Charges Figure Risk and Reward Profile * To 31 March 2015 (continued) The Ongoing Charges Figure for the year ended 31 March 2015 was 1.05% (31 March 2014: 1.05%) for Class L Income units, 1.05% (31 March 2014: 1.05%) for Class L Accumulation Units, 1.25% (31 March 2014: 1.3%) for Class R Income units, 1.25% (31 March 2014: 1.3%) for Class R Accumulation Units, 1.04% for Class L Gross Income units, 1.05% for Class L Gross Accumulation Units, 1.26% for Class R Gross Income Units and 1.26% for R Gross Accumulation Units. 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. The synthetic risk and reward indicator for the St. James s Place Gilts Unit Trust, as disclosed in its most recent Key Investor Information Document (KIID), is a 3. It was calculated using performance data up to 2 February The risk category is recalculated weekly and during the year under review, the risk category did not change. 6

8 Portfolio Statement as at 31 March 2015 Security Holdings Market Value 000 % of Net Assets UK GOVERNMENT GILTS (98.34%) 129, UK Treasury 4.75% 07/09/2015 4,300,000 4, UK Treasury 8% 07/12/2015 1,335,000 1, UK Treasury 2% 22/01/2016 8,125,000 8, UK Treasury 4% 07/09/2016 3,347,137 3, UK Treasury 1.75% 22/01/2017 6,235,000 6, UK Treasury 8.75% 25/08/2017 5,050,000 6, UK Treasury 1% 07/09/2017 1,795,000 1, UK Treasury 5% 07/03/2018 3,135,000 3, UK Treasury 1.25% 22/07/2018 9,245,000 9, UK Treasury 1.75% 22/07/ ,310,000 11, UK Treasury 3.75% 07/09/2019 2,910,000 3, UK Treasury 4.75% 07/03/2020 2,290,000 2, UK Treasury 2% 22/07/2020 4,425,000 4, UK Treasury 3.75% 07/09/2020 4,165,000 4, UK Treasury 8% 07/06/2021 3,550,000 4, UK Treasury 3.75% 07/09/2021 7,745,000 8, UK Treasury 4% 07/03/2022 4,870,000 5, UK Treasury 1.75% 07/09/2022 5,385,000 5, UK Treasury 2.25% 07/09/2023 4,270,000 4, UK Treasury 2.75% 07/09/2024 7,090,000 7, UK Treasury 5% 07/03/2025 5,112,147 6, UK Treasury 2% 07/09/ , UK Treasury 4.25% 07/12/2027 5,490,000 7, UK Treasury 6% 07/12/2028 3,465,000 5, UK Treasury 3.5% 22/01/ , DERIVATIVES (0.00%) - - Investment assets 129, Total other assets (net) 4, Net assets 133, Comparative figures shown in brackets relate to 31 March All investments are approved securities as defined in the Collective Investment Schemes sourcebook unless otherwise stated. UK Government Gilts are all rated as investment grade. 7

9 Material Portfolio Changes Cost Purchases 000 UK Long Gilt Bond Futures March ,770 UK Treasury 1.75% 22/07/2019 7,533 UK Treasury 2.75% 07/09/2024 7,419 UK Treasury 2% 22/07/2020 7,393 UK Treasury 1.25% 22/07/2018 6,858 UK Treasury 8% 07/06/2021 4,555 UK Treasury 1% 07/09/2017 3,499 UK Treasury 4% 07/09/2016 3,238 UK Long Gilt Bond Futures June ,213 UK Treasury 2.25% 07/09/2023 3,096 Proceeds Sales 000 UK Long Gilt Bond Futures March ,899 UK Treasury 2.75% 22/01/2015 5,793 UK Treasury 1.75% 22/07/2019 5,315 UK Treasury 5% 07/09/2014 4,690 UK Treasury 1.75% 22/01/2017 3,239 UK Long Gilt Bond Futures June ,199 UK Treasury 2% 22/07/2020 2,824 UK Treasury 3.75% 07/09/2019 2,795 UK Treasury 0% 28/04/2014 2,250 UK Treasury 2.25% 07/09/2023 2,189 8

10 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 expenses and the net capital gains 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 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 3 June

11 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 3 June

12 Independent Auditors' Report to the Unitholders of St. James's Place Gilts 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 2015 and of the net expenses and the net capital gains 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 UK Gilts Unit 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 2015; 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. 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. 11

13 Independent Auditors' Report to the Unitholders of St. James's Place Gilts Unit Trust (continued) 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. 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 9, 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 & Statutory Auditors Edinburgh 3 June 2015 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 2015 Income Net capital gains/(losses) Revenue Expenses Finance costs: Interest Net revenue before taxation Taxation Net revenue after taxation 01/04/14 to 31/03/15 01/04/13 to 31/03/14 Notes ,439 (4,281) 3 1,793 1,527 4 (1,293) (1,299) Total return before distributions 6,939 (4,053) Finance costs: Distributions 6 (1,621) (1,354) Change in net assets attributable to unitholders from investment activities 5,318 (5,407) Statement of Change in Net Assets Attributable to Unitholders for the year ended 31 March /04/14 to 31/03/15 01/04/13 to 31/03/ Opening net assets attributable to unitholders 108, ,401 Movement due to creation and cancellation of units: Amounts receivable on creation of units 69,659 91,963 Amounts payable on cancellation of units (51,148) (111,054) Dilution levy charged Change in net assets attributable to unitholders from investment activities (see above) Retained distribution on accumulation units Closing net assets attributable to unitholders 18,511 (19,091) ,318 (5,407) 1, , ,818 The prices per unit as at 31 March 2015 (unaudited) were: Class L Income units Class L Accumulation units Class R Income units Class R Accumulation units Class L Gross Income units Class L Gross Accumulation units Class R Gross Income units Class R Gross Accumulation units Bid Offer p p

15 Balance Sheet as at 31 March 2015 Assets Investment assets Debtors Cash and bank balances Total other assets Total assets 31/03/15 31/03/14 Notes , , , ,737 1,442 4,504 2, , ,363 Liabilities Creditors 10 (172) (496) Distribution payable on income units (85) (49) Total liabilities Net assets attributable to unitholders (257) (545) 133, ,818 14

16 Notes to the Financial Statements for the year ended 31 March (a) (b) (c) (d) (e) (f) (g) (h) Accounting and Distribution policies Basis of accounting 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 Interest on deposits is accounted for on an accruals basis. Revenue on interest bearing assets is recognised on an effective interest rate basis. Expenses All expenses of the Trust are recognised on an accruals basis and are deducted from revenue with the exception of handling charges which is deducted from capital. The manager has agreed that 100% of the annual management charge is to be transferred to capital for the purpose of calculating the distribution, as permitted by the Collective Investment Schemes Sourcebook. Valuation of investments Listed investments have been valued at bid market value at midday on 31 March 2015 (31/03/14: bid market value at midday), net of any accrued interest which is included in the Balance Sheet as a revenue related item. 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. Taxation Provision is made for corporation tax at the current rate on the excess of taxable revenue over allowable expenses. 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 Distributions are made in respect of quarters ended 31 March, 30 June, 30 September and 31 December. At the end of the accounting period all remaining revenue, less revenue expenses and taxation, will be attributable to unitholders. In the case of income unitholders this will be paid as a distribution. In the case of accumulation unitholders the distribution will be reinvested. Equalisation on distributions received is deducted from the cost of the investment. The Fund satisfied the qualifying investments test of Section 468 L Income and Corporation Taxes Act 1988 throughout the year. All distributions made are therefore made as interest distributions. 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. 15

17 Notes to the Financial Statements (continued) (i) Derivatives The Trust may enter into permitted transactions such as derivative contracts or forward foreign currency transactions. Where these transactions are used to protect or enhance revenue, the returns are included within net revenue in the Statement of Total Return. Where the transactions are used to protect or enhance investments, the returns are treated as capital and included within gains/losses on investments in the Statement of Total Return. Any open positions in these type of transactions at the year end are included in the Balance Sheet at their mark to market value. 2. Net capital gains/(losses) 01/04/14 to 31/03/15 01/04/13 to 31/03/ Non-derivative securities 6,303 (4,277) Futures contracts 137 (2) Handling charges (1) (2) Net capital gains/(losses) 6,439 (4,281) 3. Revenue 01/04/14 to 31/03/15 01/04/13 to 31/03/ Bank interest 4 7 Interest on debt securities 1,789 1,520 Total revenue 1,793 1, Expenses 01/04/14 to 31/03/15 01/04/13 to 31/03/ Payable to the Manager Management charge 1,122 1,126 Payable to the Trustee Trustee's fee Other expenses Audit fee 9 7 Investment administration fee Registrar's fee Safe custody fee 1 1 Tax & compliance fee 4 3 Legal costs Total expenses 1,293 1,299 16

18 Notes to the Financial Statements 5. (a) (b) Taxation Analysis of charge in year: There is no corporation tax charge in the current year or prior year. Factors affecting current tax charge for the year: (continued) 01/04/14 to 01/04/13 to 31/03/15 31/03/ 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% (2014: 20%). The differences are explained below: Net revenue before taxation (c) (d) Corporation Tax at 20% (2014: 20%) Effects of: Movement in excess management expenses Current tax charge for year (note 5a) Deferred taxation: There is no provision required for deferred taxation at the balance sheet date. Distributions and interest (100) (46) - - 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 47,704 (31/03/14: 147,744) 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. Finance costs The distributions take account of revenue received on the creation of units and revenue deducted on the cancellation of units and comprises: 01/04/14 to 31/03/15 01/04/13 to 31/03/ First interim distribution Second interim distribution Third interim distribution Final distribution Revenue tax withheld Add: Revenue deducted on cancellation of units Deduct: Revenue received on creation of units Net distributions for the year Interest Total finance costs Movement between net revenue and net distributions ,653 1, (109) (185) 1,621 1, ,621 1,354 01/04/14 to 31/03/15 01/04/13 to 31/03/ Net revenue after taxation Management charge 1,122 1,126 Less: carried forward to next year (1) - Net distributions for the year 1,621 1,354 17

19 Notes to the Financial Statements 8. Debtors Amounts receivable for creation of units Accrued revenue (continued) 31/03/15 31/03/ , Total debtors 1, Cash and bank balances 31/03/15 31/03/ Cash and bank balances: Sterling 2,737 1,439 Amounts held at futures clearing houses and brokers - 3 Total cash and bank balances 2,737 1, Creditors 31/03/15 31/03/ Amounts payable for cancellation of units Accrued expenses Income tax payable Total creditors 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's service charge paid to St. James's Place Unit Trust Group Limited 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 from St. James's Place Unit Trust Group Limited at the year end in respect of these transactions was 1,155,284 (31/03/14: 111,168). Trustee's fees and interest payable to 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 (31/03/14: nil). 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 Gilts Unit Trust. The value of these investments at the year end was 54,731,229 (31/03/14: 50,075,158). 12. Capital commitments and contingent liabilities On 31 March 2015, the Trust had no capital commitments (31/03/14: nil) and no contingent liabilities (31/03/14: nil). 13. Derivatives and other financial instruments In accordance with the investment objectives, as stated on page 24, the Trust held certain financial instruments. These comprise: Interest bearing assets;. 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) 14. 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, interest rate 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 (same for 2014). (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 and reward profile is maintained. (b) Interest rate risk Interest rate risk arises due to variability in market interest rates. Some investments held by the Trust, such as Gilts, are highly sensitive to fluctuations in market interest rates. Interest receivable on bank deposits or payable on bank overdraft positions will also be affected by these fluctuations. This risk is managed by ensuring that the Trust s assets are diversified. The interest rate risk profile of the Trust's financial assets and liabilities at 31 March 2015 was: Currency 31/03/15 GBP 31/03/14 GBP Floating rate financial assets Fixed rate financial assets Fixed rate weighted average interest rate Fixed rate weighted average period for which rate is fixed Financial assets not carrying interest Total % Years , , , ,780 1, , ,818 19

21 Notes to the Financial Statements (continued) (c) Credit risk Credit risk occurs where there is a risk associated with the uncertainty of a counterparty s ability to meet its obligations. This risk is managed by reviewing the counterparty s credit rating, at the time of purchase and on an ongoing basis, and ensuring that the portfolio is sufficiently diversified. The impact of movements in credit rating and spread, and their effect on market prices, is considered to be part of market price risk, which is discussed above. 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. (d) 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. As the Trust s objectives set out assets held comprise of Gilts, the Manager believes that there should not be any liquidity risk associated with these assets. 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. (e) 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. (f) 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. (g) 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. 20

22 Notes to the Financial Statements 15. Portfolio transaction costs Non-derivative securities Derivatives* Trades in the year before transaction costs Commissions Taxes Total costs Total trades in the year after transaction costs (continued) Purchases Sales 01/04/14 to 31/03/15 01/04/13 to 31/03/14 01/04/14 to 31/03/15 01/04/13 to 31/03/ ,202 76,793 61,202 93,833 15,364 41,168 15,364 35,005 76, ,961 76, , , ,961 76, ,838 *Purchases and sales of futures contracts do not incur transaction costs. 21

23 Distribution Tables Distributions in pence per unit Group 1 First interim Units purchased prior to 1 April 2014 Second interim Units purchased prior to 1 July 2014 Third interim Units purchased prior to 1 October 2014 Final Units purchased prior to 1 January 2015 Group 2 First interim Units purchased on or after 1 April 2014 to 30 June 2014 Second interim Units purchased on or after 1 July 2014 to 30 September 2014 Third interim Units purchased on or after 1 October 2014 to 31 December 2014 Final Units purchased on or after 1 January 2015 to 31 March 2015 Class L Income Gross revenue Income tax Net revenue Equalisation Distributions paid to/ payable 30/06/15 Distributions paid to 30/06/14 Group 1 (p) (p) (p) (p) (p) (p) First interim Second interim Third interim Final Group 2 (p) (p) (p) (p) (p) (p) First interim Second interim Third interim Final Class L Accumulation Gross revenue Income tax Net revenue Equalisation Distributions paid to/ payable 30/06/15 Distributions paid to 30/06/14 Group 1 (p) (p) (p) (p) (p) (p) First interim Second interim Third interim Final Group 2 (p) (p) (p) (p) (p) (p) First interim Second interim Third interim Final Class R Income Gross revenue Income tax Net revenue Equalisation Distributions paid to/ payable 30/06/15 Distributions paid to 30/06/14 Group 1 (p) (p) (p) (p) (p) (p) First interim Second interim Third interim Final Group 2 (p) (p) (p) (p) (p) (p) First interim Second interim Third interim Final

24 Distribution Tables (continued) Class R Accumulation Gross revenue Income tax Net revenue Equalisation Distributions paid to/ payable 30/06/15 Distributions paid to 30/06/14 Group 1 (p) (p) (p) (p) (p) (p) First interim Second interim Third interim Final Group 2 (p) (p) (p) (p) (p) (p) First interim Second interim Third interim Final Class L Gross Income Gross revenue Income tax Net revenue Equalisation Distributions paid to/ payable 30/06/15 Group 1 (p) (p) (p) (p) (p) Third interim Final Group 2 (p) (p) (p) (p) (p) Third interim Final Class L Gross Accumulation Gross revenue Income tax Net revenue Equalisation Distributions paid to/ payable 30/06/15 Group 1 (p) (p) (p) (p) (p) Third interim Final Group 2 (p) (p) (p) (p) (p) Third interim Final Class R Gross Income Gross revenue Income tax Net revenue Equalisation Distributions paid to/ payable 30/06/15 Group 1 (p) (p) (p) (p) (p) Third interim Final Group 2 (p) (p) (p) (p) (p) Third interim Final

25 Distribution Tables Class R Gross Accumulation Gross revenue Income tax Net revenue Equalisation Distributions paid to/ payable 30/06/15 Group 1 (p) (p) (p) (p) (p) Third interim Final Group 2 (p) (p) (p) (p) (p) Third interim Final (continued) 24

26 General Information The Trust St. James's Place Gilts 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 28 January 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 Investment Association and is authorised and regulated by the Financial Conduct Authority. Investment Objectives The investment objective of the Scheme is to provide a combination of growth and income, by investing primarily in a portfolio of UK Gilts. To achieve this, the Scheme will invest in a portfolio of UK Government debt securities, and cash and cash equivalents, including forward contracts for the purposes of efficient portfolio management only. The Scheme is also permitted to invest in other asset classes permitted for UCITS Schemes including transferable securities, money market instruments, units in collective investment schemes and deposits. The Scheme is permitted to invest in derivatives and forward transactions for the purposes of efficient portfolio management (including hedging). 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. Non-Resident Unitholders - European Union Savings Directive Unitholders resident in most European Union countries (not UK) should be aware that the Trust is covered by the European Union Savings Directive, which came into force on 1 July The Manager is required to identify and report your distributions and repurchase transactions to the UK tax authorities, who are in turn required to pass this information to most other European Union national tax authorities. 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

27 General Information (continued) Gross Unit Classes On 6 October 2014 the Manager launched Class L and Class R gross income and accumulation unit classes in the Scheme. Gross units are only available for investments held within an ISA. Further restrictions apply to all Class L units, please see the Prospectus for details. Management Charges The Trust Deed permits the following management charges which are receivable by the Manager: (a) A Preliminary Charge of 3.75 per cent for Class L Income and Accumulation Units, Class L Gross Income and Accumulation Units and 5 per cent for Class R Income and Accumulation Units, Class R Gross Income and Accumulation Units, which is included in the offer price of the Units. (b) An Annual Management Charge at a rate of 0.9 per cent for Class L Income and Accumulation Units, Class L Gross Income and Accumulation Units and 1.15 per cent for Class R Income and Accumulation Units, Class R Gross Income and Accumulation Units, of the value of the Trust. Income Distributions Income distributions are made quarterly on or before the 31 March, 30 June, 30 September and 31 December. 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. 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 2015/2016 exceed 11,100 (2014/ ,000). 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. 26

28 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 Gilts (5/15)