ALLSHARE INCOME UNIT TRUST

Transcription

1 ALLSHARE INCOME 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 AXA Investment Managers UK Limited 7 Newgate Street London, EC1A 7NX 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 Allshare Income Unit Trust Income unit offer price rose by 11.1% from 92.11p to 102.3p and the Accumulation unit offer price (in which revenue is reflected in the price rather than distributed) rose by 15.3% from 114.3p to 131.8p. On the 28 May 2014, the latest available date before the printing of this report, the Income unit offer price was 102.5p and the Accumulation unit offer price was 133.1p. The estimated yield was 3.50%. The Trust's Performance The performance of the Trust since its launch in October 2007, 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. Income units (offer to offer) Accumulation units (offer to offer) Indices - actual FTSE All-Share FTSE All-Share (net income reinvested) Source: Lipper for Fund returns 01/10/07 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 The UK equity market performed well, rising by just under 9% on a total return basis, but the portfolio outperformed this markedly. The year to 31 March 2014 was a period when the risk of downside shocks appeared to reduce significantly. In Europe, the struggling periphery stabilised as a combination of low interest rates and structural reform began to work, with Ireland being the first country to exit the European bailout programme. Even Greece saw signs of recovery and the yield on its sovereign bonds plummeted. The US economy shrugged off a government shutdown brought on by a failure by politicians to reach a budget agreement. Once it became clear to Republican politicians that they were being blamed by the electorate, an agreement was reached. Rising shale gas production continued to lower the US s trade deficit in energy, with a surplus possible in the near future. Growth in the final quarter of the period was impacted by a very severe winter. The UK economy surprised on the upside with a rising property market and record numbers in employment bolstering confidence. This looks like continuing with the country forecast to be the fastest growing of the developed economies in the coming year. In response to this improved outlook, sterling was strong, which had a negative impact on the translation of foreign earnings into sterling. The portfolio performance was helped by strong rises in stocks such as Ashtead, Greencore, HellermanTyton, Hilton Foods, Pendragon and Topps Tiles. On a negative tack, Devro was weak on the back of tougher trading. New holdings included BHP Billiton, Esure Group, Greencore Group and McKay Securities. The new issue market was active with the fund participating in issues such as Chenavari Capital, Conviviality Retail, DP Aircraft, DX Group, Infinis Energy and Manx Telecom. Sales included Cambium Global, HICL Infrastructure, Medicx Fund, Rockhopper, SSE and Victrex. 2

4 Report of the Manager (continued) The coming year will see the European elections and the run-up to the general election in the UK. At some stage, interest rates will begin to normalise and this has the scope to cause some market volatility. The strong economic background should be supportive to corporate earnings. Yields available in classes alternative to equities are very low, meaning yielding equities should continue to be supported. AXA Investment Managers UK Limited 15 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 48,728, ,132, , ,664, ,890, , ,626, ,650,601 1,005, Ongoing Charges Figure The Ongoing Charges Figure for the year ended 31 March 2014 was 1.84% (31 March 2013: 1.82%). 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 Allshare Income Unit Trust, as disclosed in its most recent Key Investor Information Document (KIID), is a 5. It was calculated using performance data up to 3 February The risk category is recalculated weekly, in May 2013 the SRRI changed from a category 6 to a category 5. * To 31 March

6 Investment Assets as at 31 March 2014 Security Holdings Market Value 000 % of Net Assets Aerospace & Defence (0.00%) 5 - Hampson Industries * 2,600, Alternative Energy (0.00%) 5, Infinis Energy 2,300,000 5, Automobiles & Parts (1.10%) 12, GKN 2,750,000 10, Nationwide Accident Repair Services 1,700,000 1, Banks (6.43%) 56, HSBC 6,250,000 38, Lloyds Banking Group 11,390,688 8, Secure Trust Bank 357,500 9, Chemicals (2.58%) 14, AZ Electronic Materials 3,500,000 14, Construction & Materials (2.02%) 24, Low & Bonar 22,000,000 18, SafeStyle UK 3,272,727 5, Corporate Bonds (0.41%) 2, JKX Oil & Gas 8% 19/02/2018 USD3,400,000 2, Electricity (2.09%) KSK Power Ventur 500, Electronic & Electrical Equipment (2.56%) 14, E2V Technologies 8,750,000 13, Stadium 1,700,000 1, Equity Investment Instruments (2.16%) 32, DP Aircraft I 6,528,000 4, Ecofin Water & Power Opportunities Fund 4,150,000 5, GLI Finance 9,275,000 5, Juridica Investments 6,600,000 8, Real Estate Credit Investments 2,956,636 4, Renewables Infrastructure 4,000,000 4, Renewables Infrastructure 'C' Shares 1,000,000 1, Financial Services (6.15%) 67, Charlemagne Capital 4,000, City of London 1,648, Close Brothers 850,000 11, esure 3,100,000 8, Foresight Solar Fund 6,000,000 5, Ground Rents Income Fund 3,500,000 3, Ground Rents Income Fund 'Preference Shares' 2,000,000 1, Intermediate Capital 2,000,000 8, Intermediate Capital (Secured) 5,000,000 5, IP 3,464,774 7, London Capital 2,100, Park 10,500,000 5, Polar Capital 1,607,801 7, Fixed Line Telecommunications (2.38%) 23, BT 3,500,000 13, Kcom 10,000,000 9,

7 Investment Assets (continued) as at 31 March 2014 Security Holdings Market Value 000 % of Net Assets Food Producers (5.99%) 62, Devro 5,650,000 13, Greencore 4,750,000 13, Hilton Food 4,185,000 20, Unilever 600,000 15, Forestry & Paper (0.06%) - - Gas, Water & Multiutilities (3.74%) 21, Centrica 2,500,000 8, National Grid 1,650,000 13, General Industries (1.46%) - - General Retailers (2.50%) 42, Conviviality Retail 3,880,000 6, DX 6,100,000 7, Pendragon 38,000,000 11, Topps Tiles 12,413,670 17, Industrial Engineering (3.21%) 29, Alumasc 1,600,000 1, Castings 1,750,000 7, Senior 5,750,000 17, Zytronic 977,800 2, Industrial Transportation (0.86%) 10, Clarkson 441,700 10, Leisure Goods (0.00%) 2, boohoo.com 4,528,302 2, Life Insurance (3.42%) 28, Legal & General 8,000,000 16, Phoenix 1,800,000 11, Media (3.96%) 33, Cineworld 6,200,000 19, Tarsus 7,350,000 14, Mining (3.61%) 44, Anglo Pacific 6,750,000 12, ATH Resources 790, BHP Billiton 525,000 9, Firestone Diamonds 51,581,493 1, Firestone Diamonds (Frankfurt) 29,846,667 1, Rio Tinto 600,000 20, Mobile Telecommunications (3.81%) 28, Manx Telecom 5,250,000 8, Vodafone 9,272,727 20, Non Equity Investment Instruments (2.15%) 48, Blue Capital Global Reinsurance Fund 10,000,000 6, Carador Income Fund 9,000,000 5, Chenavari Capital Solutions 4,500,000 4, Greencoat UK Wind 9,750,000 10, St. James's Place Money Market Unit Trust L Acc 21,438,449 22,

8 Investment Assets (continued) as at 31 March 2014 Security Holdings Market Value 000 % of Net Assets Non Life Insurance (0.82%) 11, Lancashire 1,200,002 8, Personal 750,000 3, Oil & Gas Producers (10.07%) 94, ACM Shipping 1,058,285 2, BP 7,425,000 35, Caza Oil & Gas 1,700, Indus Gas 825,000 4, Mytrah Energy 2,950,000 2, Royal Dutch Shell 'B' Shares 2,065,000 48, Oil Equipment, Services & Distribution (0.52%) 6, KBC Advanced Technologies 5,506,000 6, Pharmaceuticals & Biotechnology (5.08%) 54, GlaxoSmithKline 2,450,000 39, Vectura 10,250,000 15, Real Estate Investment & Services (2.19%) 18, Redefine International # 21,690,476 11, Sirius Real Estate 13,000,000 3, Starwood European Real Estate Finance 4,000,000 3, Real Estate Investment Trusts (1.56%) 36, Local Shopping 3,000, McKay Securities 3,300,000 6, Mucklow A & J 1,686,575 7, NewRiver Retail 4,951,150 13, Primary Health Properties 2,233,074 7, Software & Computer Services (5.15%) 45, Bond International Software 1,525,000 1, Craneware 1,150,000 5, EMIS 1,850,000 12, ienergizer 6,000,000 12, Micro Focus International 1,140,000 9, Statpro 5,013,750 4, Support Services (4.84%) 72, Ashtead 1,900,000 18, HellermannTyton 6,250,000 20, Hydrogen 1,400,000 1, Latchways 944,936 9, Matchtech 1,434,150 8, Office2office 3,358, Vianet 1,500,000 1, Wolseley 375,000 12, Technology Hardware & Equipment (1.66%) 10, IQE 49,000,000 10,

9 Investment Assets (continued) as at 31 March 2014 Market Value 000 % of Net Assets Security Holdings Tobacco (5.23%) 39, British American Tobacco 925,000 30, Imperial Tobacco 350,000 8, Investment assets 998, Total other assets (net) 7, Net assets 1,005, Comparative figures shown in brackets relate to 31 March All investments held are listed, unless otherwise stated. During the year under review the Manager decided to place some of the sterling cash held on deposit into the St. James s Place Money Market Unit Trust in order to spread risk across a number of institutions. The St. James s Place Money Market Unit Trust is highly liquid and is rated AAA by Standard & Poors. This investment is a related party. * Unlisted and suspended securities. # Real Estate Investment Trust (REIT). 8

10 Material Portfolio Changes Cost Purchases 000 St. James's Place Money Market Unit Trust L Acc 193,243 Royal Dutch Shell 'B' Shares 11,303 Greencore 10,892 GlaxoSmithKline 10,386 BP 10,173 British American Tobacco 9,560 BHP Billiton 9,546 HSBC 8,199 esure 8,112 Manx Telecom 7,554 Proceeds Sales 000 St. James's Place Money Market Unit Trust L Acc 175,978 Verizon Communications 12,538 Greencore 6,454 Victrex 6,349 Imperial Tobacco 6,158 SSE 5,889 Centrica 4,902 Ashtead 4,212 Severn Trent 4,095 Cineworld 3,564 This investment is a related party. 9

11 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 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 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

12 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

13 Independent Auditors Report to the Unitholders of St. James s Place Allshare Income 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 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 Allshare Income 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. 12

14 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. 13

15 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 10, 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. 14

16 Statement of Total Return for the year ended 31 March 2014 Income Net capital 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 ,588 70, ,561 19,753 4 (15,312) (9,114) ,249 10, ,249 10,661 Total return before distributions 116,837 81,652 Finance costs: Distributions 6 (31,143) (19,632) Change in net assets attributable to unitholders from investment activities 85,694 62,020 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 684, ,354 Movement due to creation and cancellation of units: Amounts receivable on creation of units 223, ,287 Amounts payable on cancellation of units (16,494) (5,774) 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 207, ,513 (208) (111) 85,694 62,020 28,762 18,478 1,005, ,254 The prices per unit as at 31 March 2014 (unaudited) were: Income units Accumulation units Bid Offer p p

17 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 , , ,477 6,324 4,981 7,256 15,458 13,580 1,014, ,236 Liabilities Creditors 9 (7,488) (11,441) Distribution payable on income units (832) (541) Total liabilities Net assets attributable to unitholders (8,320) (11,982) 1,005, ,254 16

18 Notes to the Financial Statements for the year ended 31 March Accounting and Distribution policies (a) 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). (b) 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. Dividends from Real Estate Investment Trusts ('REITs') are recognised as distributable income when the securities are quoted ex-dividend. Interest on deposits is accounted for on an accruals basis. Revenue on interest bearing assetsisrecognisedonaneffectiveinterestrate basis. 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. Management fee rebates received from St. James's Place Money Market Unit Trust are recognised as revenue on an accruals basis and form part of the distribution. (c) Expenses All expenses of the Trust are recognised on an accruals basis and are deducted from capital. (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. 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 (g) 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 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. 17

19 Notes to the Financial Statements (continued) (h) (i) (j) 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. Special dividends Special dividends are treated as revenue or a repayment of capital reflecting the facts of each particular case. Underwriting commission Underwriting commission is recognised when the issue takes place. Where the Trust is required to take up some or all of the shares underwritten, an appropriate proportion of the commission earned is deducted from the cost of those shares. Net capital gains Non-derivative securities Currency (losses)/gains Handling charges Net capital gains Revenue 01/04/13 to 31/03/14 01/04/12 to 31/03/ ,624 70,961 (31) 36 (5) (6) 100,588 70,991 01/04/13 to 31/03/14 01/04/12 to 31/03/ ,285 15,639 UK dividends Overseas dividends 4,759 3,106 Distributions from Regulated Collective Investment Schemes Interest distributions 3 4 Revenue from UK REITs 1, Revenue from Overseas REITs Interest on debt securities Bank interest Management charge rebate on underlying holdings Total revenue 31,561 19,753 Expenses 01/04/13 to 01/04/12 to 31/03/14 31/03/ Payable to the Manager Management charge 14,613 8,655 Payable to the Trustee Trustee's fees Other expenses Audit fee 7 9 Investment administration fee Registrar's fees Safe custody fees 9 5 Tax & compliance fee Total expenses 15,312 9,114 18

20 Notes to the Financial Statements (continued) 5. (a) (b) (c) (d) 6. Taxation Analysis of charge in year: Irrecoverable overseas tax written back Factors affecting current tax charge for the year: 01/04/13 to 01/04/12 to 31/03/14 31/03/ (22) 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 16,249 10,639 Corporation Tax at 20% (2013: 20%) Effects of: UK dividends not subject to corporation tax Non taxable foreign dividends Movement in excess management expenses Irrecoverable overseas tax written back Effect of expenses utilised in capital Current tax charge for year (note 5a) Distributions and interest 3,250 2,128 (4,943) (3,184) (952) (621) 2,645 1,531 - (22) (22) 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 6,397,364 (31/03/13: 3,752,207) 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: 01/04/13 to 31/03/14 01/04/12 to 31/03/ First interim distribution 8,676 5,475 Second interim distribution 7,151 4,281 Third interim distribution 7,998 5,008 Final distribution 8,162 5,679 Add: Revenue deducted on cancellation of units Deduct: Revenue received on creation of units Net distributions for the year Interest Total finance costs 31,987 20, (921) (861) 31,143 19, ,143 19,632 19

21 Notes to the Financial Statements (continued) Movement between net revenue and net distributions 01/04/13 to 31/03/14 01/04/12 to 31/03/ Net revenue after taxation 16,249 10,661 Management charge 14,613 8,655 Other expenses paid out of capital Corporation tax relief to capital (417) (146) Add: brought forward from previous year Less: carried forward to next year Net distributions for the year Debtors Amounts receivable for creation of units Accrued revenue Rebate receivable on underlying holdings Income tax recoverable Total debtors Creditors Purchases awaiting settlement Amounts payable for cancellation of units Accrued expenses Total creditors 1 4 (2) (1) 31,143 19,632 31/03/14 31/03/ ,107 3,053 4,350 3, ,477 6,324 31/03/14 31/03/ ,409 8,840-1, ,488 11,441 Units in issue At the year end there were Income units of 106,626,370 (31/03/13: 75,664,322) and Accumulation units of 729,650,601 (31/03/13: 578,890,256) resulting in equivalent Income units of 1,053,931,745 (31/03/13: 800,145,478). 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 6,106,991 (31/03/13: 534,948). 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: 5,335). 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. The value of these investments at the year end was 696,138,527 (31/03/13: 490,521,464). Included in the investment portfolio is a holding of 21,438,449 units (31/03/13: 4,867,068) in St. James's Place Money Market Unit Trust (a St. James's Place Unit Trust Group Limited fund) with a market value of 22,335,090 (31/03/13: 5,068,117). Revenue and management charge rebates from this holding are shown in note 3 as interest distributions and management charge rebates on the underlying holdings. 20

22 Notes to the Financial Statements (continued) The Manager is a member of the St. James's Place plc group of companies whose ultimate holding company is St. James s Place plc. On advice of the investment adviser the scheme holds investments in Lloyds Banking Group plc which was a related party up until the 31 December The investment adviser has been appointed to act as discretionary investment adviser to the scheme by St. James s Place Unit Trust Group. St. James s Place Unit Trust Group has given the investment adviser complete discretion in the investment of the property of the scheme in accordance with the Regulations, the Trust Deed and the Prospectus. The value of these investments at the year end was 8,488,341 (31/03/13: 1,224,000). 12. 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). 13. Financial instruments In accordance with the investment objectives, as stated on page 25, the Trust holds certain financial instruments. These comprise: Equity shares; interest bearing assets and 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. 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. (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) Interest rate risk Interest receivable on bank deposits or payable on bank overdraft positions will be affected by fluctuations in interest rates. 21

23 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. (d) 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. Where the Investment Managers make an investment in a bond with credit risk, that credit risk is assessed and then compared to the prospective investment return of the security in question. The risk is managed by reviewing the credit ratings of those bonds at time of purchase and on an ongoing basis. 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. (e) Derivative risk The Manager may use derivative instruments to hedge the value of the investment portfolio against market and stock specific risk through investment in warrants, options 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. No such derivatives were held by the Trust in the year to 31 March (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. 22

24 Notes to the Financial Statements (continued) 15. Portfolio transaction costs Analysis of total trade costs. Non-derivative securities Commissions Taxes Total costs Total trades in the year after transaction 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/ , , , , (89) (39) ,058 1,197 (89) (39) 465, , , ,748 23

25 Distribution Tables Distributions in pence per unit Group 1 First interim Units purchased prior to 1 April 2013 Second interim Units purchased prior to 1 July 2013 Third interim Units purchased prior to 1 October 2013 Final Units purchased prior to 1 January 2014 Group 2 First interim Units purchased on or after 1 April 2013 to 30 June 2013 Second interim Units purchased on or after 1 July 2013 to 30 September 2013 Third interim Units purchased on or after 1 October 2013 to 31 December 2013 Final Units purchased on or after 1 January 2014 to 31 March 2014 Income Net revenue Equalisation Distributions paid to/ payable 30/06/14 Distributions paid to 30/06/13 Group 1 (p) (p) (p) (p) First interim Second interim Third interim Final Group 2 (p) (p) (p) (p) First interim Second interim Third interim Final Accumulation Net revenue Equalisation Distributions paid to/ payable 30/06/14 Distributions paid to 30/06/13 Group 1 (p) (p) (p) (p) First interim Second interim Third interim Final Group 2 (p) (p) (p) (p) First interim Second interim Third interim Final

26 General Information The 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 September 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 investment objective of the Scheme is to achieve a level of income in excess of the average yield of the stocks comprising the FTSE All-Share Index with the potential for capital appreciation over the medium to long-term. The Scheme will be invested in a combination of primarily UK, but also global, equities. The Scheme is also permitted to invest in other asset classes permitted for UCITS schemes under COLL including other types of transferable securities, units and/or shares in collective investment schemes, money market instruments, deposits, and derivatives and forward transactions (for the purposes of hedging only). Please note that with effect from 4 August 2014, the above reference to the FTSE All-Share Index will be removed from the investment objective of the Unit Trust and the first sentence will be amended as follows: The investment objective of the Scheme is to achieve an above average level of income whilst also providing the potential for capital appreciation over the medium to long-term. 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

27 General Information (continued) Management Charges The Trust Deed permits the following management charges which are receivable by the Manager: (a) (b) A Preliminary Charge of 5 per cent which is included in the offer price of the Units. An Annual Management Charge at a rate of 1.75 per cent 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 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. 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 Allshare Income (5/14)