GLOBAL UNIT TRUST FOR THE YEAR ENDING 31 MARCH 2015
Manager St. James's Place Unit Trust Group Limited PO Box 9034, Chelmsford, CM99 2XA United Kingdom Freephone: 0800 027 1031 (Authorised and regulated by the Financial Conduct Authority) Directors of the Manager D. C. Bellamy A. M. Croft I. S. Gascoigne D. J. Lamb Investment Adviser Artisan Partners Limited Partnership 875 East Wisconsin Avenue, Suite 800 Milwaukee, Wisconsin 53202 United States of America (Authorised by the Securities and Exchange Commission) 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: 0800 027 1031 1
Report of the Manager During the year under review, 1 April 2014 to 31 March 2015, the St. James's Place Global Unit Trust Income unit offer price rose by 15.5% from 158.4p to 183.0p and the Accumulation unit offer price (in which revenue is reflected in the price rather than distributed) rose by 15.6% from 163.2p to 188.6p. The Manager's Report consists of Report of the Manager, The Trust's Performance, Investment Adviser's Comments, Risk and Reward Profile and Portfolio Statement. The Trust's Performance The performance of the Trust since its launch in January 2007, over the five year period since March 2010 and over the year under review is shown below, together with figures for the most commonly quoted indices in comparable markets where the major proportion of the Trust has been invested. 08/01/07 31/03/10 31/03/14 to 31/03/15 to 31/03/15 to 31/03/15 % change % change % change St. James's Place Global Unit Trust Income units (offer to offer)* +68.5 +77.2 +15.5 Accumulation units (offer to offer) +88.6 +80.0 +15.6 Indices - actual MSCI World** +77.9 +69.3 +19.7 * Income Units were made available on the 1 October 2007. ** MSCI World return is from 1 October 2007 to 31 March 2015. 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 Volatility returned to the market in the latter half of 2014 as investors were faced with increasing divergence among global growth rates and corresponding central bank moves. Oil and other commodity prices fell and emerging markets were broadly pressured by the strengthening US dollar. In January and February 2015, major equity markets advanced in support of central bank activity, namely the ECB s larger-than-expected quantitative easing program. Trading conditions were choppier in March as investors worried about slipping oil prices, lingering troubles in Greece and the upcoming earnings season. Global markets finished the period in strongly positive territory. The portfolio posted strong absolute gains, but trailed the MSCI World Index. Counted among the portfolio s top contributors for the period were Medtronic and Cisco. Performance at medical device company Medtronic was driven by new products, an area of focus which is translating into growth. Network products company Cisco was boosted by strength in its core switching category, where the company is gaining traction with its new products and beginning to benefit from the positive part of a product cycle. A small number of holdings detracted meaningfully from performance, including UK grocer Tesco and auto manufacturer Kia Motors. We added Citigroup to the portfolio. Citigroup is one of the world s largest financial institutions and credit card issuers, and very well capitalised. The combination of the global banking franchise and the potential for substantial excess capital generation makes its valuation highly attractive. On the sale side, we closed a handful of positions, including Kao and Unilever. Both companies reached our estimate of intrinsic value. While our team is busy scouring the globe for attractive investments, our cash levels remain elevated as we continue to be cautious about valuations. We continue to adhere to our disciplined investment process. Artisan Partners Limited Partnership 15 April 2015 2
Performance Record Unit Price History and Record of Net Distributions Paid/Payable The record of net distributions paid/payable per unit is shown below: Income Calendar year 2010 2011 2012 2013 2014 2015* Accumulation Calendar year 2010 2011 2012 2013 2014 2015* Net revenue distributed Highest Lowest per 1,000 Invested Offer Bid per unit at 04/01/10 p p p 109.2 86.66 0.542 5.60 112.1 88.62 0.745 7.70 124.4 102.40 0.166 1.72 158.0 117.30 0.173 1.79 175.9 143.70 - - 185.4 163.40 - - Net revenue distributed Highest Lowest per 1,000 Invested Offer Bid per unit at 04/01/10 p p p 111.4 88.44 0.550 5.60 115.2 91.09 0.760 7.74 128.1 105.04 0.171 1.74 162.8 120.80 0.178 1.81 181.4 148.10 - - 191.2 168.40 - - Net Asset Values Income Year ended March 2013 2014 2015 Accumulation Year ended March 2013 2014 2015 Market NAV NAV Units in Issue of Class per Unit '000 p 10,188,806 13,724 134.69 11,501,585 17,325 150.63 11,956,265 20,816 174.10 Market NAV NAV Units in Issue of Class per Unit '000 p 1,069,142,447 1,484,415 138.84 1,229,516,862 1,909,094 155.27 1,334,095,959 2,394,126 179.46 Ongoing Charges Figure The Ongoing Charges Figure for the year ended 31 March 2015 was 1.74% (31 March 2014: 1.77%) for Income units and 1.74% (31 March 2014: 1.77%) for Accumulation units. The Ongoing Charges Figure ('OCF') is the total expenses paid by the Trust in the year against its average net asset value. It excludes the cost of buying or selling assets for the Trust (unless these assets are shares of another trust). The OCF can fluctuate as underlying costs change. Risk and Reward Profile The synthetic risk and reward indicator for the St. James s Place Global Unit Trust, as disclosed in its most recent Key Investor Information Document (KIID), is a 5. It was calculated using performance data up to 2 February 2015. The risk category is recalculated weekly and during the year under review, the risk category did not change. * To 31 March 2015 3
Portfolio Statement as at 31 March 2015 Security Holdings Market Value 000 % of Net Assets BELGIUM (1.82%) 31,904 1.32 Groupe Bruxelles Lambert 568,955 31,904 1.32 BERMUDA (2.88%) 75,278 3.11 Arch Capital 1,662,021 70,375 2.91 Markit 268,274 4,903 0.20 BRAZIL (0.00%) 2,754 0.11 Raia Drogasil 470,200 2,754 0.11 CANADA (2.42%) 45,746 1.89 Imperial Oil 1,685,105 45,746 1.89 CAYMAN ISLANDS (0.00%) 12,487 0.52 Alibaba ADR 59,168 3,356 0.14 Baidu ADR 14,835 2,110 0.09 Sands China 344,400 965 0.04 Tencent 471,800 6,056 0.25 DENMARK (2.12%) 91,272 3.78 Carlsberg 687,672 38,383 1.59 Genmab 94,246 4,830 0.20 ISS 2,254,628 48,059 1.99 FRANCE (1.85%) 21,453 0.89 Vivendi 1,286,813 21,453 0.89 GERMANY (0.00%) 1,824 0.08 Zalando 108,219 1,824 0.08 HONG KONG (0.00%) 3,606 0.15 Hong Kong Exchanges and Clearing 217,900 3,606 0.15 INDIA (0.16%) - - IRELAND (0.97%) 94,351 3.90 Accenture 247,687 15,805 0.65 James Hardie Industries 496,217 3,892 0.16 Medtronic 1,409,333 74,654 3.09 ITALY (0.00%) 2,118 0.09 Moncler 188,238 2,118 0.09 JAPAN (2.06%) 8,793 0.37 FANUC 39,000 5,769 0.24 Harmonic Drive Systems 30,126 450 0.02 Tokyo Electron 54,500 2,574 0.11 LUXEMBOURG (0.00%) 3,172 0.13 Eurofins Scientific 17,522 3,172 0.13 MEXICO (0.00%) 5,467 0.22 Infraestructura Energetica Nova 1,008,229 3,712 0.15 PLA Administradora Industrial# 1,292,173 1,755 0.07 NETHERLANDS (2.52%) 58,909 2.44 ING 5,099,956 50,322 2.08 TNT Express 1,996,592 8,587 0.36 NORWAY (1.24%) 23,358 0.97 Orkla 4,610,427 23,358 0.97 4
Portfolio Statement (continued) as at 31 March 2015 Security Holdings Market Value 000 % of Net Assets SINGAPORE (0.73%) 19,834 0.82 Flextronics International 2,320,583 19,834 0.82 SOUTH KOREA (3.13%) 102,502 4.25 Amorepacific 1,652 3,374 0.14 Kia Motors 1,052,376 28,936 1.20 Samsung Electronics 80,040 70,192 2.91 SWEDEN (0.00%) 10,433 0.43 Electrolux 51,165 993 0.04 Hexagon 404,428 9,440 0.39 SWITZERLAND (7.91%) 212,034 8.78 ABB 3,437,576 49,276 2.04 Adecco 801,311 45,106 1.87 Novartis 772,582 51,752 2.14 Pargesa 43,997 2,136 0.09 TE Connectivity 1,315,677 63,764 2.64 TAIWAN (0.00%) 3,898 0.16 Hermes Microvision 100,000 3,898 0.16 UNITED KINGDOM (26.62%) 543,035 22.48 AMEC 2,761,004 25,525 1.06 Aon 488,235 32,358 1.34 ASOS 104,839 3,798 0.16 Associated British Foods 57,963 1,641 0.07 Burberry 114,485 1,989 0.08 Compass 2,960,618 34,906 1.45 Diageo 1,333,357 24,894 1.03 Direct Line Insurance 1,744,211 5,574 0.23 Lloyds Banking Group 50,166,565 39,576 1.64 Rotork 80,817 2,004 0.08 Royal Bank of Scotland 19,858,126 68,173 2.82 Serco 3,281,494 4,450 0.18 Serco Rights Issue 16/04/2015 3,281,494 1,231 0.05 St. James's Place Money Market Unit Trust L Acc 217,059,192 226,332 9.37 Tesco 28,222,883 69,019 2.86 Weir 91,591 1,565 0.06 UNITED STATES (39.60%) 971,096 40.22 Abbott Laboratories 152,065 4,838 0.20 American Express 870,284 45,882 1.90 Anadarko Petroleum 31,934 1,809 0.07 Apple 78,237 6,679 0.28 Applied Materials 3,923,439 60,334 2.50 Bank of New York Mellon 3,306,715 89,993 3.73 Biogen 24,643 7,184 0.30 Chipotle Mexican Grill 5,405 2,392 0.10 Chubb 771,964 53,107 2.20 Cisco Systems 3,652,865 68,217 2.82 Citigroup 2,159,082 75,317 3.12 Citizens Financial 31,499 518 0.02 Electronic Arts 73,211 2,942 0.12 EQT 38,162 2,132 0.09 Facebook 120,677 6,783 0.28 Google 'A' Shares 68,852 26,100 1.08 Google 'C' Shares 46,704 17,413 0.72 IHS 125,823 9,549 0.40 Illumina 43,476 5,511 0.23 5
Portfolio Statement (continued) as at 31 March 2015 Security Holdings Market Value 000 % of Net Assets Johnson & Johnson 871,401 59,771 2.48 Keurig Green Mountain 32,321 2,488 0.10 Marsh & McLennan 1,672,969 63,921 2.65 MasterCard 737,296 43,683 1.81 McGraw Hill Financial 35,900 2,554 0.11 Microsoft 2,321,496 64,215 2.66 Monsanto 20,015 1,533 0.06 Oracle 3,882,837 113,963 4.72 Progressive 1,980,755 36,629 1.52 QUALCOMM 1,391,987 64,772 2.68 Regeneron Pharmaceuticals 27,300 8,481 0.35 Starbucks 82,079 5,323 0.22 Visa 154,008 6,829 0.28 Walt Disney 60,239 4,320 0.18 Workday 101,619 5,914 0.24 DERIVATIVES (0.02%) (74) - Forward Currency Contracts Sold JPY405,148,201 for GBP2,215,577 Settlement 13/08/2015 (74) - Investment assets^ 2,345,250 97.11 Total other assets (net) 69,692 2.89 Net assets 2,414,942 100.00 Comparative figures shown in brackets relate to 31 March 2014. All investments held are listed, unless otherwise stated. Derivative contracts were traded on an eligible derivatives exchange. Stocks shown as ADRs represent American Depositary Receipts. 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. This investment is a related party. # Real Estate Investment Trust (REIT). ^ Including investment liabilities of ( 74K). 6
Material Portfolio Changes Cost Purchases 000 St. James's Place Money Market Unit Trust L Acc 159,507 Citigroup 62,607 QUALCOMM 61,979 ABB 46,498 ISS 32,233 Samsung Electronics 31,917 Tesco 19,795 Applied Materials 11,739 IHS 9,968 Serco Rights Issue 16/04/2015 9,759 Proceeds Sales 000 St. James's Place Money Market Unit Trust L Acc 114,641 3M 46,248 Kao 39,209 Apple 36,571 Unilever ADR 30,292 Aon 25,146 Aramark 24,341 Compass 21,608 Novartis 19,589 URS 17,832 Stocks shown as ADRs and GDRs represent American Depositary Receipts and Global Depositary Receipts. This investment is a related party. 7
Statement of the Manager's Responsibilities in relation to the Financial Statements of the Trust The rules in the Financial Conduct Authority's Collective Investment Schemes Sourcebook ("the Rules") require the Manager to prepare Financial Statements for each annual accounting period which give a true and fair view of the financial position of the Trust as at the end of the year and of the net expenses and the net capital gains on the property of the Trust for the year then ended. In preparing the Financial Statements the Manager is required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; comply with the requirements of the Statement of Recommended Practice relating to Authorised Funds and the Trust Deed; follow applicable UK Accounting Standards (UK Generally Accepted Accounting Practice); and prepare Financial Statements on the going concern basis unless it is inappropriate to presume that the Trust will continue in operation. The Manager is responsible for keeping proper accounting records and for the management of the Trust in accordance with its Trust Deed, Prospectus and the Rules. The Manager has a general responsibility for taking such steps as are reasonably open to it to prevent and detect fraud and other irregularities. Directors' Certificate This report is certified in accordance with the requirements of the rules in the Financial Conduct Authority's Collective Investment Schemes Sourcebook. Directors A. M. Croft London D. J. Lamb 3 June 2015 8
Statement of Trustee's Responsibilities The Trustee is under a duty to take into custody and to hold the property of the Trust in trust for the holders of units. It is also the duty of the Trustee to enquire into the conduct of the Manager in the management of the Trust and to ensure that the Trust is managed in accordance with all applicable rules and restrictions in each annual accounting period, and to report thereon to unitholders. Report of the Trustee In our opinion, the Manager has managed the Trust, in all material aspects, during the period covered by this Report in accordance with the investment and borrowing powers and the restrictions applicable to the Trust and otherwise in accordance with the provisions of the Trust Deed and the rules in the Financial Conduct Authority's Collective Investment Scheme provisions of the Sourcebook. For and on behalf of: BNY Mellon Trust & Depositary (UK) Limited London 3 June 2015 9
Independent Auditors' Report to the Unitholders of St. James's Place Global Unit Trust Our opinion In our opinion the financial statements, defined below: give a true and fair view of the financial position of the Trust as at 31 March 2015 and of the net expenses and the net capital gains of the scheme property of the Trust for the year then ended; and have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, the Statement of Recommended Practice for Authorised Funds, the Collective Investment Schemes sourcebook and the Trust Deed. This opinion is to be read in the context of what we say in the remainder of this report. What we have audited The financial statements of St. James s Place Global 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 2015; the statement of total return of the Trust for the year then ended; the statement of change in net assets attributable to unitholders of the Trust for the year then ended; and the notes to the Trust s financial statements, which include a summary of significant accounting policies and other explanatory information. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), the Statement of Recommended Practice Financial Statements of Authorised Funds issued by the Investment Management Association (the Statement of Recommended Practice for Authorised Funds ), the Collective Investment Schemes sourcebook and the Trust Deed. In applying the financial reporting framework, the Authorised Fund Manager has made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events. What an audit of financial statements involves We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) ( ISAs (UK & Ireland) ). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Trust s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Authorised Fund Manager; and the overall presentation of the financial statements. 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. 10
Independent Auditors' Report to the Unitholders of St. James's Place Global Unit Trust (continued) Opinions on matters prescribed by the Collective Investment Schemes sourcebook In our opinion: we have obtained all the information and explanations we consider necessary for the purposes of the audit; and the information given in the Authorised Fund Manager s Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Other matters on which we are required to report by exception Propriety of accounting records and information and explanations received Under the Collective Investment Schemes sourcebook we are required to report to you if, in our opinion: proper accounting records have not been kept; or the financial statements are not in agreement with the accounting records and returns. We have no exceptions to report arising from this responsibility. Responsibilities for the financial statements and the audit Our responsibilities and those of the Authorised Fund Manager As explained more fully in the Authorised Fund Manager s Responsibilities Statement set out on page 8, the Authorised Fund Manager is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK & Ireland). Those standards require us to comply with the Auditing Practices Board s Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the Trust s unitholders as a body in accordance with paragraph 4.5.12 of the Collective Investment Schemes sourcebook and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. PricewaterhouseCoopers LLP Chartered Accountants & Statutory Auditors Edinburgh 3 June 2015 The maintenance and integrity of the St. James s Place website is the responsibility of the Fund Manager; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 11
Statement of Total Return for the year ended 31 March 2015 Income Net capital gains Revenue Expenses Finance costs: Interest Net (expenses)/revenue before taxation Taxation Net expenses after taxation 01/04/14 to 31/03/15 01/04/13 to 31/03/14 Notes 000 000 000 000 2 324,646 187,417 3 33,544 31,647 4 (37,226) (29,915) 6 - - (3,682) 1,732 5 (3,670) (3,031) (7,352) (1,299) Total returnbefore equalisation 317,294 186,118 Finance costs: Equalisation 6 90 100 Change in net assets attributable to unitholders from investment activities 317,384 186,218 Statement of Change in Net Assets Attributable to Unitholders for the year ended 31 March 2015 01/04/14 to 31/03/15 01/04/13 to 31/03/14 000 000 000 000 Opening net assets attributable to unitholders 1,926,419 1,498,139 Movement due to creation and cancellation of units: Amounts receivable on creation of units 290,066 280,890 Amounts payable on cancellation of units (118,991) (38,722) Dilution levy charged Stamp duty reserve tax Change in net assets attributable to unitholders from investment activities (see above) Class actions Closing net assets attributable to unitholders 171,075 242,168 76 - (12) (107) 317,384 186,218-1 2,414,942 1,926,419 The prices per unit as at 31 March 2015 (unaudited) were: Income units Accumulation units Bid Offer p p 174.0 183.0 179.4 188.6 12
Balance Sheet as at 31 March 2015 Assets Investment assets Debtors Cash and bank balances Total other assets Total assets 31/03/15 31/03/14 Notes 000 000 000 000 2,345,324 1,850,442 8 8,421 9,158 9 65,296 68,903 73,717 78,061 2,419,041 1,928,503 Liabilities Investment liabilities (74) (40) Creditors 10 (4,025) (2,044) Total other liabilities (4,025) (2,044) Total liabilities (4,099) (2,084) Net assets attributable to unitholders 2,414,942 1,926,419 13
Notes to the Financial Statements for the year ended 31 March 2015 1. Accounting and Distribution policies (a) Basis of accounting (b) Revenue Dividends receivable from equity investments are credited to the revenue account when the investments are first quoted ex-dividend. Interest on deposits is accounted for on an accruals 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 St. James's Place Money Market Unit Trust are recognised as revenue on an accruals basis and form part of the distribution. (c) Expenses (d) Valuation of investments Listed investments have been valued at bid market value at 12.00 midday on 31 March 2015 (31/03/14: bid market value at 12.00 midday), net of any accrued interest which is included in the Balance Sheet as a revenue related item. (e) (f) (g) The Financial Statements have been prepared under the historical cost basis, as modified by the revaluation of investments, in compliance with the Financial Conduct Authority's Collective Investment Schemes Sourcebook. They have been prepared in accordance with applicable UK accounting standards and in accordance with the Statement of Recommended Practice (SORP) for Financial Statements of Authorised Funds issued by the IMA in October 2010 (IMA SORP 2010). All expenses of the Trust are recognised on an accruals basis and are deducted from revenue with the exception of handling charges and stamp duty reserve tax which are deducted from capital. Authorised unit trusts are valued at cancellation price for funds managed by the manager and a bid price for all other funds. Suspended, delisted, unquoted or manually priced securities are valued by the manager taking into account, where appropriate, latest dealing prices, financial performance and other relevant factors. Open forward currency contracts are shown in the Portfolio Statement and are valued using contracted forward rates. The net gains/(losses) are reflected in "Forward currency contracts" in Net capital gains. Foreign exchange Assets and liabilities have been translated into sterling at the exchange rates prevailing at the Balance Sheet date. Transactions involving foreign currencies are converted at the rate ruling on the date of the transaction. Taxation Provision is made for corporation tax at the current rate on the excess of taxable revenue over allowable expenses. 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 There is no distribution for the current period. Where there is distributable income, the Manager may choose to pay all remaining revenue, less revenue expenses and taxation as a 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. 14
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 returns are included within net revenue in the Statement of Total Return. Where the transactions are used to protect or enhance investments, the returns are treated as capital and included within gains/losses on investments in the Statement of Total Return. Any open positions in these type of transactions at the year end are included in the Balance Sheet at their mark to market value. 2. Net capital gains 01/04/14 to 01/04/13 to 31/03/15 31/03/14 3. Non-derivative securities Forward currency contracts Currency gains Handling charges Net capital gains Revenue 000 000 323,086 181,793 1,562 1,064 88 4,576 (90) (16) 324,646 187,417 01/04/14 to 31/03/15 01/04/13 to 31/03/14 000 000 UK dividends 6,987 7,764 Overseas dividends 25,036 22,899 Distributions from Regulated Collective Investment Schemes Interest distributions 194 106 Bank interest 135 127 Revenue from Overseas REITs 60 - Interest on capital 29 - Management charge rebate on underlying holdings 684 565 Scrip dividends 419 186 Total revenue 33,544 31,647 15
Notes to the Financial Statements (continued) 4. Expenses 01/04/14 to 31/03/15 01/04/13 to 31/03/14 000 000 Payable to the Manager Management charge 35,392 28,438 Payable to the Trustee Trustee's fee 170 144 Other expenses Audit fee 9 7 Investment administration fee 99 83 Professional fees 2 - Registrar's fee 1,413 1,160 Safe custody fee 137 80 Tax & compliance fee 4 3 1,664 1,333 Total expenses 37,226 29,915 5. Taxation 01/04/14 to 31/03/15 01/04/13 to 31/03/14 000 000 (a) Analysis of charge in year: Irrecoverable overseas tax 3,670 3,031 (b) Factors affecting current tax charge for the year: The tax assessed for the year is higher than the standard rate of corporation tax in the UK for an authorised unit trust of 20% (2014: 20%). The differences are explained below: Net (expenses)/revenue before taxation (3,682) 1,732 (c) (d) Corporation Tax at 20% (2014: 20%) Effects of: UK dividends not subject to corporation tax Non taxable scrip dividends Non taxable foreign dividends Eligible unrelieved foreign taxation Movement in excess management expenses Irrecoverable overseas tax Current tax charge for year (note 5a) There is no provision required for deferred taxation at the balance sheet date. Factors that may affect future tax charges (736) 346 (1,397) (1,553) (84) (37) (5,007) (4,580) (1) - 7,225 5,824 3,670 3,031 3,670 3,031 Authorised Unit Trusts are exempt from tax on capital gains, therefore any capital return is not included in the above reconciliation. Deferred taxation: At the year end, after offset against revenue taxable on receipt, there is a potential deferred tax asset of 22,201,954 (31/03/14: 14,976,239) 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. 16
Notes to the Financial Statements 6. 7. 8. 9. 10. Finance costs Equalisation and interest Cash and bank balances Cash and bank balances: Sterling Cash and bank balances: Overseas Total cash and bank balances Creditors Purchases awaiting settlement Amounts payable for cancellation of units Accrued expenses Total creditors 11. Related party transactions 01/04/14 to 31/03/15 (continued) The equalisation takes account of revenue received on the creation of units and revenue deducted on the cancellation of units and comprises: 01/04/14 to 31/03/15 01/04/13 to 31/03/14 000 000 Add: Revenue deducted on cancellation of units 5 44 Deduct: Revenue received on creation of units (95) (144) Net equalisation for the year (90) (100) Total finance costs (90) (100) Movement between net expenses and net distribution Net expense after taxation Deficit transferred to capital Add: brought forward from previous year Net equalisation for the year Debtors Sales awaiting settlement Amounts receivable for creation of units Accrued revenue Income tax recoverable Overseas tax recoverable Dilution Levy Receivable Total debtors 01/04/13 to 31/03/14 000 000 (7,352) (1,299) 7,262 1,192-7 (90) (100) 31/03/15 31/03/14 000 000 1,956 485 2,484 6,244 2,407 930 60 49 1,511 1,450 3-8,421 9,158 31/03/15 31/03/14 000 000 63,461 68,104 1,835 799 65,296 68,903 31/03/15 31/03/14 000 000 3,003 1,880 818-204 164 4,025 2,044 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 1,666,018 (31/03/14: 6,244,469). 17
Notes to the Financial Statements (continued) Trustee's fees and interest payable to BNY Mellon Trust & Depositary (UK) Limited and their associates are shown in notes 4 and 6 respectively. The net balances due from BNY Mellon Trust & Depositary (UK) Limited and their associates at the year end in respect of these transactions was nil (31/03/14: nil). The Manager, St. James's Place Unit Trust Group Limited, is a subsidiary of St. James's Place Wealth Management Group plc ('SJPWMG'). Two fellow subsidiaries of SJPWMG, St. James's Place International plc and St. James's Place UK plc, invest some of their life and pension policyholders' funds into the St. James's Place Global Unit Trust. The value of these investments at the year end was 1,540,616,281 (31/03/14: 1,315,394,250). Included in the investment portfolio is a holding of 217,059,192 units (31/03/14: 174,019,476) in St. James's Place Money Market Unit Trust (a St. James's Place Unit Trust Group Limited fund) with a market value of 226,331,961 (31/03/14: 181,297,667). Revenue and management charge rebates from this holding are shown in note 3 as interest distributions and management charge rebates on the underlying holdings. Included in the investment portfolio is a holding of 3,306,715 units (31/03/14: 3,259,891) in Bank of New York Mellon with a market value of 89,993,250 (31/03/14: 68,729,260). Revenue from this holding is shown in note 3 as overseas dividends. 12. Capital commitments and contingent liabilities On 31 March 2015, the Trust had no capital commitments (31/03/14: nil) and no contingent liabilities (31/03/14: nil). 13. Derivatives and other financial instruments In accordance with the investment objectives, as stated on page 22, the Trust held certain financial instruments. These comprise: Equity shares and units in collective investment schemes;. Cash (including overdrafts) and short-term debtors and creditors that arise directly from its operations; and Derivatives which the Trust may enter into (principally futures contracts, options and contracts for difference) for investment purposes as well as managing the market risk arising from the Trust's investment activities (and related financing). 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, foreign currency risk, credit risk and liquidity risk. The Manager's policies for managing these risks are summarised below. These policies have remained unchanged since the beginning of the year to which these financial statements relate (same for 2014). 18
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 and reward profile is maintained. (b) Foreign currency risk The revenue and capital value of the Trust s investments can be significantly affected by currency translation movements as a proportion of the Trust s assets and revenue are denominated in currencies other than sterling, which is the Trust s functional currency. The overall currency exposure for this fund is reduced by the open forwards exposure. The Manager has identified three principal areas where foreign currency risk could impact the Trust: Movements in exchange rates affect the value of investments; Movements in exchange rates affect short term timing differences; and Movements in exchange rates affect revenue received. The Trust may be subject to short term exposure to exchange rate movements, for instance where there is a difference between the date an investment purchase or sale is entered into and the date when settlement of the proceeds occurs. When the Trust enters into such a transaction which will involve the buying or selling of foreign currency in order to complete, a foreign exchange contract is entered into as soon as possible after the initial transaction in order to minimise the exchange rate risk. The Trust receives revenue in currencies other than sterling and movements in exchange rates can affect the sterling values of this revenue. The Trust converts all receipts of revenue into sterling on or near the date of receipt, it does not however hedge or otherwise seek to avoid exchange rate risk on revenue accrued but not received. 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 Currency GBP AUD BRL CAD CHF DKK EUR HKD JPY KRW MXN NOK SEK TWD USD 31/03/15 Nonmonetary exposures 31/03/14 Nonmonetary exposures Monetary exposures Total Monetary exposures Total 000 000 000 000 000 000 67,695 510,677 578,372 107,929 440,346 548,275 (46) 3,892 3,846 - - - (6) 2,754 2,748 - - - 18 45,746 45,764 100 46,602 46,702 963 148,270 149,233 891 98,637 99,528 511 91,272 91,783 (282) 40,944 40,662 480 119,380 119,860 654 119,268 119,922 (322) 10,627 10,305 - - - (2,316) 8,793 6,477 (32,726) 39,859 7,133 1,209 102,502 103,711 332 60,244 60,576 8 5,467 5,475 - - - - 23,358 23,358-23,888 23,888 21 10,433 10,454 - - - - 3,898 3,898 94-94 1,403 1,258,255 1,259,658 (615) 980,254 979,639 69,618 2,345,324 2,414,942 76,377 1,850,042 1,926,419 19
Notes to the Financial Statements (continued) (c) Interest rate risk Interest receivable on bank deposits or payable on bank overdraft positions will be affected by fluctuations in interest rates. (d) Credit risk Credit risk occurs where there is a risk associated with the uncertainty of a counterparty s ability to meet its obligations. This risk for bonds and money market funds is managed by reviewing the counterparty s credit rating, at the time of purchase and on an ongoing basis, and ensuring that the portfolio is sufficiently diversified. The impact of movements in credit rating and spread, and their effect on market prices, is considered to be part of market price risk, which is discussed above. The Trust s investments and cash are held on its behalf by State Street Bank and Trust Company (acting as agent), the custodian to the Trust, and its appointed sub custodians. Bankruptcy or insolvency of the custodian or its sub custodians may cause the Trust s rights with respect to securities to be delayed. This risk is managed through ongoing monitoring of the custodian and periodic reviews of its procedures for selecting and monitoring sub custodians, together with ad hoc reviews of custodian and sub custodian credit ratings. Certain transactions in securities that the Trust enters into expose it to the risk that the counterparty will not deliver the investment (purchase) or cash (sale) after the fund has fulfilled its responsibilities. The external Investment Adviser selects acceptable counterparties through which investments are bought and sold. The Manager has responsibility for monitoring the process by which these counterparties are selected to minimise risk. (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) Derivative risk The Manager may use derivative instruments to hedge the value of the investment portfolio against market, currency and stock specific risk through investment in warrants, options, forwards and futures. The purpose of the financial instruments is efficient portfolio management. In particular futures may be used to implement the investment policy in a timely manner and to manage market risk arising from the time lag between funds being receivable or payable by the Trust and investment and disinvestment in underlying securities. 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. 20
Notes to the Financial Statements 15. Portfolio transaction costs Analysis of total trade costs. Non-derivative securities* Commissions Taxes Total costs Total trades in the year after transaction costs (continued) Purchases Sales 01/04/14 to 31/03/15 01/04/13 to 31/03/14 01/04/14 to 31/03/15 01/04/13 to 31/03/14 000 000 000 000 710,114 719,335 534,983 519,146 401 549 (276) (273) 307 898 (15) (5) 708 1,447 (291) (278) 710,822 720,782 534,692 518,868 *This includes transactions in St. James Place Money Market Unit Trust which does not incur transactions costs. 21
General Information The Trust St. James's Place Global 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 8 January 2007. The Unit Trust is subject to the rules of the Financial Conduct Authority's Collective Investment Scheme Sourcebook and is classified as a UCITS Scheme. The Trust Manager The Manager of the Trust is St. James's Place Unit Trust Group Limited which is a member of the Investment Association and is authorised and regulated by the Financial Conduct Authority. Investment Objectives The investment objective of the Scheme is to achieve capital appreciation through investment in a global portfolio. The Scheme will invest primarily in UK and overseas equities and may also invest in fixed interest and index linked securities and cash. The Scheme is also permitted to invest in other transferable securities, money market instruments, units in collective investment schemes and deposits. The Scheme will concentrate on seeking opportunities for exceptional growth in stocks which, in the opinion of the Investment Adviser, offer good value for money. The Scheme may also invest in transferable securities in new and emerging markets. The Scheme is permitted to invest in derivative and forward transactions for the purposes of efficient portfolio management (including hedging). It is the Manager's intention that the assets of the Unit Trust will be invested so that the Unit Trust will be eligible for inclusion in an ISA. 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. Efficient Portfolio Management The efficient portfolio management techniques permitted in the fund as at 31 March 2015 comprise of: Technique Counterparty Exposure ( ) Currency Forwards State Street Bank And Trust Company 2,532,673 The revenues in the year were nil with no collateral placed or received. 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: 0800 027 1031. 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: www.sjp.co.uk and are available by calling the Administration Centre on 0800 027 1031. Minimum Investment The minimum lump sum investment is 1,500, thereafter the minimum additional investment is 1,000. The minimum monthly investment is 150 and the minimum monthly increment is 50. The minimum annual investment is 1,500 and the minimum annual increment is 500. 22
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 1.67 per cent of the value of the Trust. Income Distributions Income distributions are made annually on or before the 31 May. Accumulation Distributions Revenue due to accumulation unitholders is reflected in the price of their units. Tax Vouchers Income unitholders that receive income distributions by direct credit and accumulation unitholders (where the distribution income is reinvested) receive an annual consolidated tax voucher in May with all the relevant payment and tax information required to complete a tax return. Tax vouchers will be enclosed if income unitholders receive payment by cheque. Report A report is sent semi-annually to all unitholders on or before 31 May and 30 November. Capital Gains Tax The Trust is not liable to tax on capital gains and any individual holding units will not be liable to capital gains tax unless the total chargeable gains for the tax year 2015/2016 exceed 11,100 (2014/2015 11,000). To calculate capital gains on accumulation units, the total amount of reinvested net revenue (shown on the annual tax credit vouchers) should be added to the base cost of the units purchased. Unitholders should consult their professional advisers for any advice regarding their tax position. 23
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 947644. Perivan Financial Print 236685 Global (5/15)