INTERNATIONAL UNIT TRUST

Transcription

1 INTERNATIONAL UNIT TRUST FOR THE YEAR ENDED 30 SEPTEMBER 2012

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3 Manager St. James's Place Unit Trust Group Limited P.O. Box 9034, Chelmsford, CM99 2XA United Kingdom Freephone: (Authorised and regulated by the Financial Services Authority) Directors of the Manager D. C. Bellamy A. M. Croft I. S. Gascoigne H. J. Gladman resigned 31/12/11 D. J. Lamb W. P. Tonks resigned 31/12/11 Secretary of the Manager St. James's Place Administration Limited Investment Adviser Taube Hodson Stonex Partners LLP Cassini House 1st Floor St James's Street London, SW1A 1LD United Kingdom (Authorised and regulated by the Financial Services Authority) Trustee BNY Mellon Trust & Depositary (UK) Limited 160 Queen Victoria Street London, EC4V 4LA United Kingdom (Authorised and regulated by the Financial Services Authority) Registrar International Financial Data Services (UK) Limited IFDS House St. Nicholas Lane Basildon, SS15 5FS United Kingdom (Authorised and regulated by the Financial Services Authority) Auditor PricewaterhouseCoopers LLP Erskine House Queen Street Edinburgh, EH2 4NH United Kingdom (From 31 January 2012, PricewaterhouseCoopers LLP replaced KPMG Audit Plc as Auditor to the Trust) 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 P.O. Box 9034, Chelmsford CM99 2XA. Freephone:

4 Report of the Manager During the year under review, 1 October 2011 to 30 September 2012, the St. James's Place International Unit Trust Income unit offer price rose by 12.7% from 918.4p to 1,035p, the Accumulation unit offer price (in which revenue is reflected in the price rather than distributed) rose by 13.7% from 1,395p to 1,586p and the Institutional Accumulation unit offer price (in which revenue is reflected in the price rather than distributed) rose by 13.9% from 100.9p to 114.9p. On the 15 November 2012, the latest available date before the printing of this report, the Income unit offer price was 1,018p and the Accumulation unit offer price was 1,584p and the Institutional Accumulation unit offer price was 114.7p. The estimated yield for both the Income and Accumulation Units is 1.40% and 1.70% for Institutional Accumulation Units. The Trust' performance The performance of the Trust since its launch in November 1971, over the five year period since September 2007 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 International Unit Trust Income units (offer to offer) Accumulation units (offer to offer) Institutional Accumulation units (offer to offer)* Indices - actual FTSE All-Share (net income reinvested) Standard & Poor's Composite Tokyo New Stock Exchange MSCI World MSCI World Europe (excluding UK) 16/11/71 to 30/09/07 to 30/09/11 to 30/09/12 30/09/12 30/09/12 % change % change % change +10, , N/A N/A , , , , N/A N/A +8.0 * Institutional Accumulation units were made available on 12 September Source: Lipper for Fund returns 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 Stock markets have performed well over the reporting period, in spite of recurring concerns over the pace of recovery in the US, financial stability in the euro zone and the effect on global growth of a slowdown in China. The portfolio produced double-digit returns over the reporting period, but as a result of its heavier European weighting, performance lagged the wider market, as measured by the MSCI World Index. This overweighting is because we find valuations in Europe are much cheaper; as confidence in the region s assets returns, there is good potential for the portfolio to outperform. Indeed, although the situation in Europe remains delicate, the authorities have stated they are committed to taking whatever action is required. Our approach is thematic and during the year we added to our US housing theme by investing in HeidelbergCement and Stanley Black & Decker. We also added to St. Joe Company, which owns a large area of development land in Florida. Harnessing the strong growth in e-commerce is our newest theme. Several existing holdings, including Schibsted, which is a leader in on-line classified advertising in Continental Europe, contribute to this theme. The latest addition is Kinnevik, a Swedish holding company with activities in media, telecommunications and online services, which owns 27% of Zalando, the dominant continental European fashion e-tailer. Top contributors over the period were two investments within the US housing theme Lennar, which was sold following a strong performance and Wolseley. Human Genome, which has been taken over by GlaxoSmithKline was also a significant contributor. The weakest performers were mainly resource and energy related companies. 2

5 Report of the Manager (continued) In the light of increased oil production and the slowdown in China, Husky Energy and Royal Dutch Shell were sold, reducing the portfolio s energy exposure. Rio and Xstrata were also sold, reflecting flattening demand from China and the general shift in emerging markets from infrastructure spending to consumption. Existing holdings such as Nestlé and Unilever should benefit from this increased appetite for consumption. Although economic data remain mixed we are positive about equity investment. Valuations are still reasonable, with good dividend yields and moderate P/E ratios. There are also some encouraging signs: US housing and construction appear to have turned and the US s use of shale gas could trigger a wave of industrial investment. Taube Hodson Stonex Partners LLP 12 October

6 Performance Record The St. James's Place International Unit Trust Institutional Accumulation Unit was first offered on 12 September 2011 at an offer price of 100.1p per unit. Unit Price History Income Accumulation Institutional Accumulation Highest Lowest Highest Lowest Highest Lowest Offer Bid Offer Bid Offer Bid Calendar year p p p p p p , ,678 1, , ,662 1, , ,554 1, , ,683 1, , ,744 1, * 1, ,626 1, Distributions The record of net distributions paid per unit is shown below: Income Accumulation Institutional Accumulation Net revenue distributed Net revenue distributed Net revenue distributed per 1,000 per 1,000 per 1,000 Invested Invested Invested per unit at 02/01/2007 per unit at 02/01/2007 per unit at 12/09/2011 Calendar year p p p * Net Asset Values Units in Issue Units in Issue Units in Issue Year ended September Income Accumulation Institutional Accumulation ,672,460 28,411, ,485,326 47,961,390 10, ,554,387 25,472, ,191,602 Market NAV per Unit NAV per Unit NAV per Unit NAV of Trust Income Accumulation Institutional Year ended Accumulation September '000 p p p , , , , , , Ongoing Charges Figure The Ongoing Charges Figure for the year ended 30 September 2012 was 1.73% for both the Income and Accumulation Units and 1.52% for the Institutional Accumulation Units. From July 2012, following the implementation of the UCITS IV Directive, the Total Expense Ratio (TER) has been replaced by an Ongoing Charges Figure (OCF). Both figures aim to provide an indication of the annual operating expenses of the unit trust, the main difference between them is that the OCF additionally includes certain portfolio transaction based fees charged by the custodian. 4

7 Performance Record (continued) Risk and Reward Profile The synthetic risk and reward indicator for the St. James s Place International Unit Trust, as disclosed in its most recent Key Investor Information Document (KIID), is a 6. It was calculated using performance data up to 31 May The risk category is recalculated weekly and in the period from 31 May 2012 to 30 September 2012, the risk category did not change. * To 30 September

8 Investment Assets as at 30 September 2012 Security Holdings Market Value 000 % of Net Assets AUSTRALIA (3.88%) 29, Alumina 3,262,406 1, Elders 1,300, Newcrest Mining 842,736 15, QBE Insurance 1,434,963 11, BELGIUM (1.59%) 12, Belgacom 680,684 12, CANADA (5.43%) 20, Niko Resources 412,826 3, Potash Corp of Saskatchewan 478,448 12, SNC-Lavalin 201,780 4, FRANCE (9.30%) 90, ANF Immobilier # 18, BNP Paribas 631,295 18, Carrefour 559,711 7, EDF (Parent) 353,345 4, EDF 17, Eurazeo 425,612 12, Eurazeo Rights France Telecom 1,074,106 8, Lagardere 567,757 9, Total 293,298 9, Vivendi 1,581,884 19, GERMANY (6.27%) 83, Allianz 166,373 12, Deutsche Post 1,629,016 19, Deutsche Telekom 1,102,549 8, Fraport Frankfurt Airport Services Worldwide 298,946 10, HeidelbergCement 402,510 13, Sky Deutschland 6,602,545 16, TAG Immobilien 412,500 2, HONG KONG (2.85%) 25, Hutchison Whampoa 4,320,200 25, INDIA (0.36%) 2, Idea Cellular 2,285,766 2, ITALY (0.44%) 15, Banca Monte dei Paschi di Siena 26,322,210 4, UniCredit 4,252,790 11, JAPAN (1.91%) 14, Sumitomo Mitsui Financial 750,800 14, LUXEMBOURG (1.22%) 8, GAGFAH 1,396,635 8, NETHERLANDS (4.47%) 24, Aegon 2,560,298 8, ING 3,278,798 16, NORWAY (3.92%) 34, Archer 3,352,602 3, Orkla 3,591,533 17, Schibsted 577,222 13, SOUTH KOREA (1.48%) - - 6

9 Investment Assets (continued) as at 30 September 2012 Security Holdings Market Value 000 % of Net Assets SPAIN (1.75%) 11, Banco Santander 1,193,349 5, Repsol 519,591 6, SWEDEN (2.61%) 47, Kinnevik 1,012,620 13, Medicover * 445,000 6, Svenska Handelsbanken 776,101 18, TeliaSonera 2,190,008 9, SWITZERLAND (8.83%) 69, Nestle 332,132 13, Roche - BR 51,730 6, Swiss Reinsurance 442,692 17, Syngenta 69,024 16, Transocean 576,229 16, UNITED KINGDOM (21.66%) 178, BP 3,506,055 15, British Sky Broadcasting 2,290,452 17, Bumi 1,225,548 1, Camellia 90,261 8, Colt 1,360,251 1, Experian 1,473,961 15, GlaxoSmithKline 1,253,038 18, Hansteen # 10,381,554 8, Home Retail 4,106,372 3, HSBC 2,985,566 17, Royal Bank of Scotland 3,634,263 9, Unilever 497,934 11, Vodafone 13,517,797 23, Wolseley 689,936 18, WPP 956,990 8, Yell 11,624, UNITED STATES (20.68%) 152, Adobe Systems 439,040 8, Apache 131,346 7, Bunge 261,518 10, Chazak Value * 6, Clearwire 1,243,487 1, Mosaic 257,810 9, Netbank * 370, Patterson-UTI Energy 756,450 7, Pepsi 377,078 16, Pfizer 1,344,129 20, St Joe 947,721 11, Stanley Black & Decker 104,400 4, United States Treasury Bill 0% 11/10/2012 USD45,000,000 27, Walt Disney 375,030 12, Yum! Brands 332,576 13,

10 Investment Assets (continued) as at 30 September 2012 Security Holdings Market Value 000 % of Net Assets DERIVATIVES (-0.04%) Sold EUR77,200,000 for GBP61,299,502 (378) (0.04) Settlement 06/12/2012 Sold JPY1,511,048,720 for GBP12,475, Settlement 26/10/2012 Investment assets^ 823, Total other assets (net) 4, Net assets 827, Comparative figures shown in brackets relate to 30 September All investments held are listed, unless otherwise stated. Derivative contracts were traded on an eligible derivatives exchange. * Unquoted/delisted securities. # Real Estate Investment Trust (REIT). ^ Including investment liabilities of ( 378,007). 8

11 Material Portfolio Changes Cost Purchases 000 St. James's Place Money Market Unit Trust (Acc) 206,704 United States Treasury Bill 0% 11/10/ ,913 United States Treasury Bill 0% 12/04/ ,467 United States Treasury Bill 0% 12/07/ ,250 Kinnevik 13,439 UniCredit 12,709 HeidelbergCement 11,968 Deutsche Post 10,623 Mosaic 9,424 Patterson Uti Energy 9,099 Proceeds Sales 000 St. James's Place Money Market Unit Trust (Acc) 209,292 United States Treasury Bill 0% 12/07/ ,947 United States Treasury Bill 0% 13/10/ ,420 United States Treasury Bill 0% 12/04/ ,183 Human Genome Sciences 21,022 Intel 20,621 Royal Dutch Shell 'B' shares 19,100 News 16,574 Samsung Electronics 16,538 Lennar Corp 16,519 This investment is a related party. 9

12 Statement of the Manager's Responsibilities in relation to the Financial Statements of the Trust The rules in the Financial Services 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 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 Services Authority's Collective Investment Schemes Sourcebook. Directors A. M. Croft D. J. Lamb London 19 November

13 Statement of Trustee's Responsibilities The Trustee is under a duty to take into custody and to hold the property of the Scheme 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 Scheme and to ensure that the Scheme 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 scheme, 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 scheme, and otherwise in accordance with the Trust Deed and the rules in the Financial Services Authority's Collective Investment Scheme provisions of the Sourcebook. For and on behalf of: BNY Mellon Trust & Depositary (UK) Limited London 19 November

14 (the "Trust") Independent Auditors' Report to the Unitholders We have audited the financial statements of the Trust for the year ended 30 September 2012 which comprise the statement of total return, the statement of change in net assets attributable to unitholders, the balance sheet, the related notes and the distribution table. 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) and the Statement of Recommended Practice Financial Statements of Authorised Funds issued by the Investment Management Association (the Statement of Recommended Practice for Authorised Funds ). Respective responsibilities of Authorised Fund Manager and auditors As explained more fully in the Authorised Fund Manager s Responsibilities Statement 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 International Standards on Auditing (UK and 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. Scope of the audit of the financial statements 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 to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on the financial statements In our opinion the financial statements: give a true and fair view of the financial position of the Trust at 30 September 2012 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 the Statement of Recommended Practice for Authorised Funds, the Collective Investment Schemes sourcebook and the Trust Deed. Opinion on other 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. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Collective Investment Schemes sourcebook requires us to report to you if, in our opinion: proper accounting records for the Trust have not been kept; or the financial statements are not in agreement with the accounting records and returns. PricewaterhouseCoopers LLP Chartered Accountants & Statutory Auditors Edinburgh 19 November 2012 The Financial Statements are published on www sjp.co.uk which is a website maintained by St. James s Unit Trust Group Limited. The maintenance and integrity of the website is the responsibility of the Authorised 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. Visitors to the website need to be aware that legislation in the United Kingdom governing the presentation and dissemination of the Financial Statements may differ from legislation in their jurisdictions. 12

15 Statement of Total Return for the year ended 30 September 2012 Income Net capital gains/(losses) Revenue Expenses Finance costs: Interest Net revenue before taxation Taxation Net revenue after taxation 01/10/11 to 30/09/12 01/10/10 to 30/09/11 Notes ,557 (79,947) 3 28,994 16,988 4 (13,432) (10,143) 6 - (1) 15,562 6,844 5 (2,319) (1,374) 13,243 5,470 Total return before distribution 104,800 (74,477) Finance costs: Distribution 6 (13,245) (5,470) Change in net assets attributable to unitholders from investment activities 91,555 (79,947) Statement of Change in Net Assets Attributable to Unitholders for the year ended 30 September /10/11 to 30/09/12 01/10/10 to 30/09/ Opening net assets attributable to unitholders 724, ,281 Assets transferred from THS Net Managed Fund - 10,002 Assets transferred from THS Exempt Managed - 227,512 Assets transferred from THS USD Managed Fund - 20,174 Assets transferred from THS Offshore GBP Managed Fund - 8,124 Movement due to creation and cancellation of units: Amounts receivable on creation of units 503,708 29,338 Amounts payable on cancellation of units (504,861) (31,270) Dilution levy charged Stamp duty reserve tax Change in net assets attributable to unitholders from investment activities (see above) Retained distribution on accumulation units Unclaimed distributions Class actions Closing net assets attributable to unitholders (1,153) (1,932) (112) (75) 91,555 (79,947) 11,382 4, , ,908 The presentation of the financial statements has been changed from 's to 000's, the comparatives have been restated accordingly. The prices per unit as at 28 September 2012 (unaudited) were: Income units Accumulation units Institutional Accumulation units Bid Offer p p , , ,

16 Balance Sheet as at 30 September 2012 Investment assets Debtors Cash and bank balances Total other assets Total assets 30/09/12 30/09/11 Notes , , ,309 3, ,513 8,532 6,822 11, , ,430 Investment liabilities (378) (691) Creditors 10 (1,249) (1,132) Bank overdrafts (175) - Distribution payable on income units (1,374) (699) Total other liabilities (2,798) (1,831) Total liabilities (3,176) (2,522) Net assets attributable to unitholders 827, ,908 The presentation of the financial statements has been changed from 's to 000's, the comparatives have been restated accordingly. 14

17 Notes to the Financial Statements for the year ended 30 September 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 Service 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) (c) 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. Revenue on interest bearing assets is recognised on an effective interest basis. Revenue from other authorised collective investment schemes is 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 the St. James's Place Money Market Unit Trust are recognised as revenue on an accruals basis and form part of the distribution. Expenses All expenses of the Trust are deducted from revenue with the exception of dealing charges and stamp duty reserve tax which are deducted from capital. (d) Valuation of investments Listed investments have been valued at bid market value at midday on 28 September 2012 (30/09/11: 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 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. (g) 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

18 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. (k) 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 revenue and expenses are included within net revenue in the Statement of Total Return. Where the transactions are used to protect or enhance investments, the gains/losses 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. Net capital gains/(losses) Non-derivative securities Forward currency contracts Currency (losses)/gains Handling charges Net capital gains/(losses) Revenue 01/10/11 to 30/09/12 01/10/10 to 30/09/ ,629 (78,989) 6,813 (1,054) (866) 112 (19) (16) 91,557 (79,947) 01/10/11 to 30/09/12 01/10/10 to 30/09/ UK dividends 5,850 3,135 Overseas dividends 22,130 13,249 Distributions from Regulated Collective Investment Schemes Interest distributions 25 1 Revenue from UK REITs Bank interest Interest on debt securities Management charge rebate on underlying holdings 48 2 Scrip dividends Total revenue 28,994 16,988 16

19 Notes to the Financial Statements (continued) 4. Expenses 01/10/11 to 30/09/12 01/10/10 to 30/09/ Payable to the Manager Management charge 12,117 8,880 Payable to the Trustee Trustee's fees Other expenses Audit fee 8 6 Investment administration fee 3 - HMRC interest fee 1 - Other professional fees 2 5 Registrar's fees* 1,136 1,131 Safe custody fees ,238 1,209 Total expenses 13,432 10, (a) (b) (c) *From 1 August 2012 the basis on which registration fees are charged to the schemes was changed by the Manager, with the agreement of the Trustee. As detailed in the Prospectuses, registration fees are now based on a combination of the total number of St. James s Place Unit Trust Group clients (unitholders) as well as the total number of investments held (unitholdings); and are allocated to the individual unit trusts based on the relative overall values of clients investments. Copies of the Prospectuses are available free of charge on request to the Manager. Taxation 01/10/11 to 30/09/12 01/10/10 to 30/09/ Analysis of charge in year: Irrecoverable overseas tax 2,320 1,366 Adjustments in respect of prior years (1) 8 Total taxation 2,319 1,374 Factors affecting current tax charge for the year: 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% (2011: 20%). The differences are explained below: Net revenue before taxation 15,562 6,844 Corporation Tax at 20% (2011: 20%) Effects of: UK dividends not subject to corporation tax Non taxable scrip dividends Non taxable foreign dividends Revenue taxable in different periods Movement in excess management expenses Irrecoverable overseas tax Adjustments in respect of prior years Current tax charge for year (note 5a) Deferred taxation: There is no provision required for deferred taxation at the balance sheet date. 3,112 1,369 (1,258) (668) (37) (22) (4,426) (2,650) ,609 1,959 2,320 1,366 (1) 8 2,319 1,374 Authorised Unit Trusts are exempt from tax on capital gains, therefore any capital return is not included in the above reconciliation. 17

20 Notes to the Financial Statements (continued) (d) Factors that may affect future tax charges At the year end, after offset against taxable on receipt, there is a potential deferred tax asset of 6,222,592 (30/09/11: 3,614,009) relating to surplus management expenses. No deferred tax asset was recognised in the current or prior year as it was considered unlikely the Fund would generate sufficient taxable profits in the future to utilise these amounts. 6. Finance costs Distribution and interest The distribution takes account of revenue received on the creation of units and revenue deducted on the cancellation of units and comprises: 01/10/11 to 30/09/12 01/10/10 to 30/09/ Final distribution 12,756 5,461 Add: Revenue deducted on cancellation of units 2, Deduct: Revenue received on creation of units (1,578) (82) Net distribution for the year Interest Total finance costs Movement between net revenue and net distribution 13,245 5, ,245 5,471 01/10/11 to 30/09/12 01/10/10 to 30/09/ Net revenue after taxation 13,243 5,470 Expenses paid out of capital 2 - Net distribution for the year Debtors Sales awaiting settlement Amounts receivable for creation of units Accrued revenue Dilution levy receivable Income tax recoverable Overseas tax recoverable Total debtors Cash and bank balances Cash and bank balances: Sterling Cash and bank balances: Overseas 13,245 5,470 30/09/12 30/09/ ,435 1, , ,309 3,361 30/09/12 30/09/ ,911 2, ,513 8,532 Total cash and bank balances 10. Creditors 30/09/12 30/09/ Purchases awaiting settlement Amounts payable for cancellation of units 1, Accrued expenses Total creditors 1,249 1, Units in issue At the year end there were Income units of 9,554,387 (30/09/11: 10,485,326), Accumulation units of 25,472,132 (30/09/11: 47,961,390) and Institutional Accumulation units of 320,191,602 (30/09/11: 10,500) 18

21 Notes to the Financial Statements (continued) 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'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 1,378,532 (30/09/11: 1,519,383). 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 to BNY Mellon Trust & Depositary (UK) Limited and their associates at the year end in respect of these transactions was nil (30/09/11: nil). The Manager, St. James's Place Unit Trust Group Limited, is a subsidiary of St. James's Place Wealth Management Group plc ('SJPWMG'). A fellow subsidiary of SJPWMG, St. James's Place International plc, invests some of its life and pension policyholders' funds into the St. James's Place International Unit Trust. The value of these investments at the year end was 348,254,926 (30/09/11: 257,991,371). During the year the Trust has held units in St. James's Place Money Market Unit Trust (a St. James's Place Unit Trust Group Limited fund) at the year end the holding was nil (30/09/11: 2,464,304). Revenue and management charge rebates from this holding are shown in note 3 as interest distributions and management charge rebates on the underlying holdings. 13. Capital commitments and contingent liabilities On 30 September 2012, the Trust had no capital commitments (30/09/11: nil) and no contingent liabilities (30/09/11: nil). 14. Financial instruments In accordance with the investment objectives, as stated on page 23, the Trust holds certain financial instruments. These comprise: Equity shares; interest bearing assets and units in collective investment schemes; Cash (including overdrafts) and short-term debtors and creditors that arise directly from its operations; and Derivatives, the purpose of which is to manage the market risk arising from the Trust's investment activities (and related financing). The rules in the Scheme Documents set out in the financial instruments in which the Trust may invest. The Trust's use of financial instruments during the year satisfies these requirements. 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 FSA regulations, the Prospectus and the terms of their Investment Management Agreement with the Manager. The Manager monitors the activities of the Investment Advisers, 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 risks are summarised below. These policies have remained unchanged since the beginning of the year to which these financial statements relate. 19

22 Notes to the Financial Statements (continued) (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 the majority of the Trust's assets and revenue 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 open currency contracts at a forward exchange rate in order to reduce or eliminate the impact of exchange rate fluctuations on the value of investments and revenue receivable. 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. 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 30/09/12 30/09/11 Monetary Nonmonetary Monetary Non-monetary Curr exposures exposures Total exposures exposures Total GBP 73, , ,917 88, , ,757 AUD ,769 29, ,141 28,236 CAD (37) 20,953 20, ,428 39,504 EUR (60,824) 248, ,880 (66,395) 158,052 91,657 HKD 39 25,812 25,851-20,661 20,661 IDR - 2,289 2, ,698 3,086 JPY (11,749) 14,541 2,792 (12,361) 13,868 1,507 KRW ,732 10,732 NOK - 34,048 34,048 (941) 28,459 27,518 SEK - 47,729 47,729-24,643 24,643 CHF ,112 53, ,659 53,937 USD 2, , , , ,670 4, , ,454 9, , ,908 (c) Interest rate risk Interest receivable on bank deposits or payable on bank overdraft positions will be affected by fluctuations in interest rates. 20

23 Notes to the Financial Statements (continued) (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. (f) Derivatives 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. Forwards have been used to manage currency risk. As the trust is not considered a sophisticated fund, the manager uses the commitment approach to measure the global exposure to derivatives. (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 01/10/11 to 01/10/10 to 01/10/11 to 01/10/10 to 30/09/12 30/09/11 30/09/12 30/09/ Non-derivative securities 541, , , ,024 Commissions (429) (134) Taxes (56) (5) Total costs Total trades in the year after transaction costs (485) (139) 541, , , ,885 21

24 Distribution Tables Distribution in pence per unit Group 1 Final Units purchased prior to 1 October 2011 Group 2 Final Units purchased on or after 1 October 2011 to 30 September 2012 Income Net revenue Equalisation Distribution payable 30/11/12 Distribution paid 30/11/11 Group 1 (p) (p) (p) (p) Final Group 2 (p) (p) (p) (p) Final Accumulation Net revenue Equalisation Distribution payable 30/11/12 Distribution paid 30/11/11 Group 1 (p) (p) (p) (p) Final Group 2 (p) (p) (p) (p) Final Institutional Accumulation Net revenue Equalisation Distribution payable 30/11/12 Distribution paid 30/11/11 Group 1 (p) (p) (p) (p) Final Group 2 (p) (p) (p) (p) Final Corporate Tax A unitholder liable to corporation tax receives this distribution, excluding equalisation, as follows: Final % of the dividend, together with the tax credit, is received as franked investment income. Final % of the dividend is received as an annual payment (non-foreign element) received after deduction of income tax at the lower rate and is liable to corporate tax. The tax deemed to have been deducted is treated as income tax. Final % of the dividend is received as an annual payment (foreign element) received after the deduction of income tax at the lower rate and is liable to corporation tax. It is treated as foreign income in the hands of the corporate investor and is liable to corporation tax. The associated deemed tax is treated as foreign tax in the hands of the investor, who may be able to claim double tax relief. Investors cannot reclaim any of this deemed tax on the foreign element from HM Revenue & Customs. 22

25 General Information The Trust St. James's Place International 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 22 October The Unit Trust is subject to the rules of the Financial Services 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 Services Authority. Investment Objectives The investment objective of the Scheme is to achieve capital appreciation through investment in a wide geographically based portfolio. The Scheme will concentrate on seeking opportunities for exceptional growth in undervalued stocks that may be less popular but which, in the opinion of the Investment Adviser, offer good value for money. 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, P.O. 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 the dealing day, 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. Telephone instructions are not accepted for ISA wrapped investments or the Unit Trust Investment Plan (Regular Premium Unit Trust). 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 in the Daily Telegraph and on the Manager's website: Minimum Investment The minimum lump sum investment is 1,500, thereafter the minimum additional investment is 1,000. The minimum monthly investment to the Unit Trust Investment Plan is 150 and the minimum monthly increment is 50. The minimum annual investment to the Unit Trust Investment Plan 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 30 November each year. Accumulation Distributions Revenue due to accumulation unitholders is reflected in the price of their units. 23

26 General Information (continued) 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 30 November and 31 May each year. Capital Gains Tax The Trust is not liable to tax on capital gains and an individual holding units will not be liable to capital gains tax unless the total chargeable gains for the tax year 2012/2013 exceed 10,600 (2011/ ,600). 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

27

28 UK members of the St. James s Place Wealth Management Group are authorised and regulated by the Financial Services Authority. St. James s Place Unit Trust Group Limited: Registered Office St. James s Place House, 1 Tetbury Road, Cirencester, Gloucestershire GL7 1FP United Kingdom. Registered in England Number Perivan Financial Print International (11/12)