international corporate bond unit trust - St James's Place

INTERNATIONALCORPORATE BOND

UNIT TRUST

FOR THE YEAR ENDED 30 SEPTEMBER 2013

I. S. Gascoigne D. J. Lamb

PricewaterhouseCoopers LLPErskine House68 - 73 Queen StreetEdinburgh, EH2 4NHUnited Kingdom

(Authorised and regulated by the Financial Conduct Authority)

Auditor

Prospectus and Manager's Reports

Copies of the up to date Prospectus (Scheme Particulars) and latest Manager's Report andFinancial Statements for the range of St. James's Place Unit Trusts can be requested from amember of the St. James's Place Partnership or, at any time during normal business hours, fromthe Administration Centre at P.O. Box 9034, Chelmsford CM99 2XA.Freephone: 0800 027 1031

United Kingdom

London, EC4V 4LAUnited Kingdom


RegistrarInternational Financial Data Services (UK) LimitedIFDS HouseSt. Nicholas LaneBasildon, SS15 5FS

160 Queen Victoria Street

TrusteeBNY Mellon Trust & Depositary (UK) Limited

United Kingdom


London, WC2B 4AE

Secretary of the ManagerSt. James's Place Administration Limited

Investment Adviser Babson Capital Europe Limited61 Aldwych

United KingdomFreephone: 0800 027 1031


Directors of the ManagerD. C. BellamyA. M. Croft

P.O. Box 9034, Chelmsford, CM99 2XA

St. James's Place International Corporate Bond Unit Trust

ManagerSt. James's Place Unit Trust Group Limited

1

06/04/10 to 30/09/13

30/09/12 to 30/09/13

% change % change

+11.3 +3.6+34.4 +9.9

+29.5 +7.7

Babson Capital Europe Limited 14 October 2013

Source: Lipper for Fund returns

REMEMBER THAT THE PRICE OF UNITS AND REVENUE FROM THEM MAY GO DOWN ASWELL AS UP. PLEASE BE AWARE THAT PAST PERFORMANCE IS NOT INDICATIVE OF FUTUREPERFORMANCE.

Investment Adviser's Comments

The portfolio performed well over the reporting period, both in absolute and relative terms, dueto strong security selection and prudent risk allocation. With economic data showing some signsof improvement, we believe the asset class continues to offer attractive opportunities to invest instrong companies with attractive yields.

The portfolio continues to find attractive new issue opportunities as the trend of refinancing goodquality corporates from bank balance sheets showed no signs of abating. During the year we sawparticularly attractive contributions from some of our European holdings. Numericable, a Frenchtelecoms operator, is an example of the current trend of loan issuers coming to the market torefinance their loans with bonds; a theme which we expect to continue to provide newopportunities in the high yield bond market. Numericable exhibited strong results, and theimproved credit fundamentals combined with the anticipated initial public offering made it one ofthe top contributors in the year. Another strong performer was Nara Cable, a Spanish cableoperator which has maintained solid business fundamentals, whilst being boosted by the increasein investor confidence in Europe; testament to our rigorous credit selection process in theEuropean periphery adding to portfolio returns.

The decision to increase the weighting to Europe has benefited the portfolio, as the steadyimprovement to corporate fundamentals and the low default rate continued to support our viewthat the long-term outlook for many high yield senior secured bond issuers remains compelling.We believe the commitment by the European Central Bank and the US Federal Reserve tomaintain accommodative monetary policies until clear signs of sustainable growth are stronglyvisible will continue to support the performance within the global senior secured bond marketand we maintain a bias towards names that have less sensitivity to future interest rate rises.Furthermore, the portfolio continues to benefit from its diversity through its US exposure and webelieve that the portfolio remains well positioned to provide attractive risk-adjusted returns.

St. James's Place International Corporate Bond Unit Trust Income units (offer to offer)Accumulation units (offer to offer)Indices - actualMerrill Lynch Global High Yield BB-B Rated


Report of the Manager

During the year under review, 1 October 2012 to 30 September 2013, the St. James's PlaceInternational Corporate Bond Unit Trust Income unit offer price rose by 3.6% from 107.4p to111.3p and the Accumulation unit offer price (in which revenue is reflected in the price ratherthan distributed) rose by 9.9% from 122.3p to 134.4p. On the 25 November 2013, the latestavailable date before the printing of this report, the Income unit offer price was 111.8p and theAccumulation unit offer price was 136.9p. The estimated yield was 6.70%.

The Trust's Performance

The performance of the Trust since its launch in April 2010 and over the year under review isshown below, together with figures for the most commonly quoted indices in comparable marketswhere the major proportion of the Trust has been invested.

2

Highest Lowest Highest LowestOffer Bid Offer Bid

p p p p107.4 95.36 109.9 95.36109.2 89.40 114.3 97.26111.4 95.07 128.6 105.20113.9 102.40 135.5 122.20

per £1,000 per £1,000Invested Invested

at 06/04/10 at 06/04/10p £ p £

3.865 38.65 3.915 39.156.174 61.74 6.565 65.655.961 59.61 6.742 67.424.597 45.97 5.469 54.69

Units in Issue Units in Issue Market NAV per Unit NAV per UnitIncome Accumulation NAV of Trust Income Accumulation

£'000 p p31,591,998 414,068,494 440,503 91.40 99.4159,347,862 708,232,780 887,492 101.17 116.8388,530,197 976,090,639 1,330,406 103.62 126.90

Year endedSeptember20112012

Net Asset Values

Performance Record


The St. James's Place International Corporate Bond Unit Trust was first offered on 6 April 2010at an offer price of 100.00p per unit.

Unit Price History

Calendar year

Income Accumulation

2010201120122013*

Distributions

The record of net distributions paid/payable per unit is shown below:

Calendar year

* To 30 September 2013

Risk and Reward Profile

2013

Ongoing Charges Figure

The synthetic risk and reward indicator for the St. James’s Place International Corporate Bond, asdisclosed in its most recent Key Investor Information Document (KIID), is a 5. It was calculatedusing performance data up to 4 February 2013.

The Ongoing Charges Figure for the year ended 30 September 2013 was 1.52% (30 September2012: 1.57%).

The Ongoing Charges Figure ('OCF') is the total expenses paid by the Trust in the year against itsaverage net asset value. It excludes the cost of buying or selling assets for the Trust (unless theseassets are shares of another trust). The OCF can fluctuate as underlying costs change.

The risk category is recalculated weekly and during the year under review, the risk category didnot change.

2010201120122013*

per unit

Income AccumulationNet revenue distributed Net revenue distributed

per unit

3

Security Holdings

MarketValue£000

% ofNet

Assets

EURO DENOMINATED BONDS (27.41%) 360,409 27.09ATU FRN 10.049% 15/05/2014 2,300,000 1,692 0.13Bormioli Rocco 10% 01/08/2018 4,770,000 4,355 0.33Bravida FRN 5.224% 15/06/2019 3,900,000 3,268 0.25Carlson Wagonlit 7.5% 15/06/2019 12,000,000 10,481 0.79Cerba European Lab 7% 01/02/2020 11,614,000 9,925 0.75Cerved 6.375% 15/01/2020 4,050,000 3,469 0.26CET 9% 01/11/2017 24,300,000 21,781 1.64Channel Link Enterprises Finance FRN 3.57% 30/06/2050

1,600,000 1,240 0.09

Ciech Group Financing 9.5% 30/11/2019 9,795,000 8,984 0.68Elior Finance 6.5% 01/05/2020 10,270,000 8,980 0.67Ence Energia y Celulosa 7.25% 15/02/2020 10,050,000 8,819 0.66Findus Bondco 9.125% 01/07/2018 13,100,000 11,592 0.87Grohe FRN 8.75% 15/12/2017 11,280,000 9,747 0.73Ineos Finance FRN 7.25% 15/02/2019 7,000,000 6,202 0.47InterXion 6% 15/07/2020 5,950,000 5,060 0.38IVS 7.125% 01/04/2020 6,775,000 5,662 0.42KION Finance 6.75% 15/02/2020 15,950,000 14,385 1.08KraussMaffei 8.75% 15/12/2020 12,270,000 11,050 0.83Lecta 8.875% 15/05/2019 20,470,000 16,253 1.22Manutencoop Facility Management 8.5% 17,690,000 14,598 1.10Mark IV 8.875% 15/12/2017 7,805,600 7,013 0.53Nara Cable Funding 8.875% 01/12/2018 2,990,000 2,661 0.20New World Resources 7.875% 01/05/2018 19,655,000 12,156 0.91Novalis 6% 15/06/2018 10,150,000 8,822 0.66Numericable Finance 8.75% 15/02/2019 2,790,000 2,637 0.20Numericable Finance 12.375% 15/02/2019 13,000,000 12,983 0.98Ontex 7.5% 15/04/2018 5,179,000 4,540 0.34Perstorp 9% 15/05/2017 8,910,000 7,782 0.58R&R Ice Cream 8.375% 15/11/2017 12,940,000 11,545 0.87RPG Byty 6.75% 01/05/2020 8,620,000 7,060 0.53Takko Luxembourg 9.875% 15/04/2019 17,930,000 14,646 1.10TeamSystem 7.375% 15/05/2020 13,230,000 10,948 0.82Telenet Finance 6.25% 15/08/2022 2,540,000 2,171 0.16Telenet Finance 6.75% 15/08/2024 6,518,000 5,556 0.42Unilabs Subholding 8.5% 15/07/2018 8,800,000 7,612 0.57Unitymedia Hessen 8.125% 01/12/2017 2,621,735 2,306 0.17Unitymedia Hessen 7.5% 15/03/2019 2,000,000 1,809 0.14Unitymedia Hessen 5.75% 15/01/2023 4,000,000 3,343 0.25Unitymedia Hessen 5.625% 15/04/2023 6,780,000 5,568 0.42UPCB Finance 7.625% 15/01/2020 11,385,000 10,242 0.77UPCB Finance II 6.375% 01/07/2020 1,408,000 1,239 0.09Verisure 8.75% 01/09/2018 16,130,000 14,761 1.11Wind Acquisition Finance 7.375% 15/02/2018 (Issue date 26/11/2010)

14,300,000 12,497 0.94

Wind Acquisition Finance 7.375% 15/02/2018 (Issue date 13/04/2012)

1,000,000 868 0.07

WMG Acquisition 6.25% 15/01/2021 14,265,000 12,101 0.91


Investment Assets

as at 30 September 2013

4

Security Holdings

MarketValue£000

% ofNet

Assets


Investment Assets (continued)


STERLING DENOMINATED BONDS (14.30%) 276,036 20.76Arrow Global Finance 7.875% 01/03/2020 7,600,000 7,799 0.59Bond Mission Critical Services FRN 6.25856% 01/05/2019

4,200,000 4,137 0.31

Brighthouse 7.875% 15/05/2018 11,910,000 12,163 0.91Cabot Financial 10.375% 01/10/2019 10,940,000 12,430 0.93Cabot Financial 8.375% 01/08/2020 1,600,000 1,664 0.13Care UK Health & Social Care 9.75% 01/08/2017 19,942,000 20,590 1.55Elli Finance 8.75% 15/06/2019 3,550,000 3,852 0.29Equiniti Newco 2 7.125% 15/12/2018 16,220,000 16,727 1.26Gala Group Finance 8.875% 01/09/2018 13,596,000 14,718 1.11House of Fraser Funding 8.875% 15/08/2018 16,135,000 17,239 1.30Lowell Group Financing 10.75% 01/04/2019 19,500,000 22,084 1.66Marlin Intermediate 10.5% 01/08/2020 8,300,000 8,860 0.67Moto Finance 10.25% 15/03/2017 9,403,000 10,026 0.75New Look Bondco I 8.75% 14/05/2018 18,900,000 19,249 1.45Odeon & UCI Finco 9% 01/08/2018 11,158,000 11,214 0.84Pendragon 6.875% 01/05/2020 6,998,000 7,208 0.54Priory Group No 3 7% 15/02/2018 12,045,000 12,376 0.93Towergate Finance FRN 6.00856% 15/02/2018 10,000,000 9,952 0.75Towergate Finance 8.5% 15/02/2018 8,550,000 9,020 0.68Travelex Financing 8% 01/08/2018 19,640,000 19,739 1.48Virgin Media Secured Finance 6% 15/04/2021 10,000,000 10,175 0.76Vougeot Bidco 7.875% 15/07/2020 18,720,000 19,517 1.47Voyage Care Bondco 6.5% 01/08/2018 5,350,000 5,297 0.40

SWEDISH KRONA DENOMINATED BONDS (0.00%) 17,922 1.35Bravida FRN 6.591% 15/06/2019 33,900,000 3,329 0.25Norcell Sweden 9.25% 29/09/2018 140,000,000 14,593 1.10

SWISS FRANC DENOMINATED BONDS (0.97%) 7,225 0.54Aguila 7.875% 31/01/2018 10,109,000 7,225 0.54

UNITED STATES (0.03%) - -

US DOLLAR DENOMINATED BONDS (52.53%) 613,159 46.10Accellent 8.375% 01/02/2017 6,000,000 3,868 0.29Accuride 9.5% 01/08/2018 26,207,000 16,914 1.27Aguila 3 7.875% 31/01/2018 3,375,000 2,186 0.16Aguila 3 7.875% 31/01/2018 (Luxembourg Listing) 5,000,000 3,239 0.24Associated Asphalt 8.5% 15/02/2018 8,770,000 5,429 0.41Builders FirstSource 7.625% 01/06/2021 14,098,000 8,750 0.66Calpine 7.875% 31/07/2020 3,400,000 2,268 0.17Carmike Cinemas 7.375% 15/05/2019 3,600,000 2,402 0.18Cemex 5.875% 25/03/2019 4,700,000 2,786 0.21Cemex Espana Luxembourg 9.25% 12/05/2020 1,500,000 998 0.07Cemex Finance 9.375% 12/10/2022 7,750,000 5,260 0.40CEVA 8.375% 01/12/2017 15,000,000 9,379 0.70CHC Helicopter 9.25% 15/10/2020 18,325,000 12,125 0.91Chiquita Brands International 7.875% 01/02/2021 20,000,000 13,218 0.99Claire's Stores 9% 15/03/2019 6,305,000 4,343 0.33Claire's Stores 6.125% 15/03/2020 9,050,000 5,561 0.42Cleaver-Brooks 8.75% 15/12/2019 4,200,000 2,789 0.21Commercial Vehicle 7.875% 15/04/2019 9,500,000 5,882 0.44Cornerstone Chemical 9.375% 15/03/2018 16,830,000 10,940 0.82

5

Security Holdings

MarketValue£000

% ofNet

Assets




Drill Rigs 6.5% 01/10/2017 8,744,000 5,603 0.42Easton-Bell Sports 9.75% 01/12/2016 7,020,000 4,607 0.35EFIH Finance 6.875% 15/08/2017 4,000,000 2,514 0.19Energy Future 10% 01/12/2020 4,120,000 2,678 0.20Felcor Lodging 6.75% 01/06/2019 13,100,000 8,556 0.64First Data 7.375% 15/06/2019 9,500,000 6,190 0.47First Data 8.875% 15/08/2020 12,000,000 8,209 0.62First Data 6.75% 01/11/2020 17,500,000 11,173 0.84Florida East Coast Railway 8.125% 01/02/2017 4,304,000 2,798 0.21Freescale Semiconductor 10.125% 15/03/2018 240,000 162 0.01Freescale Semiconductor 9.25% 15/04/2018 1,500,000 1,003 0.08Freescale Semiconductor 9.25% 15/04/2018 * 5,000,000 3,343 0.25GenCorp 7.125% 15/03/2021 4,917,000 3,196 0.24GRD Holdings III 10.75% 01/06/2019 21,282,000 13,966 1.05HCA 6.5% 15/02/2020 11,490,000 7,745 0.58HD Supply 8.125% 15/04/2019 2,000,000 1,381 0.10Headwaters 7.625% 01/04/2019 22,165,000 14,477 1.09Hexion US Finance 6.625% 15/04/2020 13,500,000 8,400 0.63Hot Topic 9.25% 15/06/2021 10,000,000 6,377 0.48Hughes Satellite Systems 6.5% 15/06/2019 11,790,000 7,737 0.58Ineos Finance 8.375% 15/02/2019 3,860,000 2,638 0.20Ineos Finance 7.5% 01/05/2020 1,360,000 904 0.07International Automotive Components 9.125% 01/06/2018

23,330,000 14,877 1.12

International Wire 8.5% 15/10/2017 22,058,000 14,373 1.08K Hovnanian Enterprises 7.25% 15/10/2020 9,020,000 5,905 0.44KeHE Distributors 7.625% 15/08/2021 11,055,000 6,998 0.53LSB Industries 7.75% 01/08/2019 17,345,000 11,168 0.84Mcron Finance 8.375% 15/05/2019 18,500,000 12,284 0.92Millenium Offshore Services 9.5% 15/02/2018 20,000,000 12,784 0.96Nara Cable Funding 8.875% 01/12/2018 (Issue date 02/02/2012)

12,270,000 8,052 0.61

Nara Cable Funding 8.875% 01/12/2018 (Issue date 01/06/2012)

8,000,000 5,200 0.39

Nexstar Broadcasting 8.875% 15/04/2017 6,925,000 4,667 0.35Northern Tier Energy 7.125% 15/11/2020 14,515,000 8,986 0.68Offshore Group Investment 7.5% 01/11/2019 22,500,000 14,696 1.10Palace Entertainment 8.875% 15/04/2017 8,000,000 5,040 0.38PBF 8.25% 15/02/2020 17,350,000 11,171 0.84Pinnacle Operating 9% 15/11/2020 16,272,000 10,364 0.78Pretium Packaging 11.5% 01/04/2016 14,886,000 9,930 0.75Prospect Medical 8.375% 01/05/2019 19,600,000 12,741 0.96Quality Distribution 9.875% 01/11/2018 10,350,000 6,984 0.52Quiksilver 7.875% 01/08/2018 5,945,000 3,837 0.29Rentech Nitrogen Partners 6.5% 15/04/2021 8,840,000 5,363 0.40Reynolds 7.125% 15/04/2019 1,500,000 987 0.07Reynolds 5.75% 15/10/2020 5,000,000 3,126 0.23Reynolds 6.875% 15/02/2021 10,000,000 6,624 0.50Sabine Pass Liquefication 5.625% 01/02/2021 9,190,000 5,590 0.42Sabine Pass Liquefaction 5.625% 15/04/2023 17,531,000 10,446 0.79Sabre 8.5% 15/05/2019 16,000,000 10,698 0.80Safway 7% 15/05/2018 12,160,000 7,679 0.58Shelf Drilling 8.625% 01/11/2018 32,530,000 21,499 1.62Spencer Spirit 11% 01/05/2017 3,878,000 2,566 0.19

6

Security Holdings

MarketValue£000

% ofNet

Assets




Stoneridge 9.5% 15/10/2017 7,735,000 5,136 0.39Tekni-Plex 9.75% 01/06/2019 4,341,000 3,024 0.23Tenet Healthcare 6.25% 01/11/2018 15,000,000 9,937 0.75Tenet Healthcare 6% 01/10/2020 15,865,000 10,068 0.76Tenet Healthcare 4.5% 01/04/2021 7,000,000 4,090 0.31Titan International 6.875% 01/10/2020 10,625,000 6,545 0.49Titan International 7.875% 01/10/2017 6,780,000 4,468 0.34Tomkins 9% 01/10/2018 1,925,000 1,302 0.10Toys R Us Property 8.5% 01/12/2017 14,500,000 9,437 0.71TPC 8.75% 15/12/2020 28,905,000 18,342 1.38Univision Communications 6.875% 15/05/2019 4,250,000 2,815 0.21Univision Communications 7.875% 01/11/2020 4,510,000 3,057 0.23Univision Communications 5.125% 15/05/2023 2,135,000 1,272 0.10UPCB Finance 7.25% 15/11/2021 2,000,000 1,353 0.10Victor Technologies 9% 15/12/2017 21,615,000 14,402 1.08Wells Enterprises 6.75% 01/02/2020 4,000,000 2,532 0.19Welltec 8% 01/02/2019 21,236,000 14,067 1.06Wind Acquisition Finance 6.5% 30/04/2020 3,000,000 1,908 0.14WMG Acquisition 6% 15/01/2021 4,320,000 2,775 0.21

DERIVATIVES (1.32%) 35,677 2.66

Forward Currency Contracts19 -

- -(1) -

2,815 0.211,703 0.131,045 0.08

831 0.06504 0.04423 0.03366 0.03252 0.02194 0.01

73 0.0160 -51 -36 -27 -26 -20 -

8 -7 -6 -6 -5 -2 -

485 0.042 -1 -1 -- -- -

Sold CHF7,755,000 for GBP5,331,121 Settlement 09/01/2014Sold CHF1,066,000 for GBP730,444 Settlement 09/01/2014Sold CHF1,850,000 for GBP1,266,493 Settlement 09/01/2014Sold EUR93,800,000 for GBP81,215,511 Settlement 10/10/2013Sold EUR67,655,000 for GBP58,259,256 Settlement 24/10/2013Sold EUR34,130,000 for GBP29,582,143 Settlement 14/11/2013Sold EUR107,390,000 for GBP90,670,752 Settlement 09/01/2014Sold EUR36,500,000 for GBP31,011,787 Settlement 10/10/2013Sold EUR14,800,000 for GBP12,794,970 Settlement 24/10/2013Sold EUR44,425,000 for GBP37,521,097 Settlement 12/12/2013Sold EUR8,780,000 for GBP7,590,407 Settlement 10/10/2013Sold EUR7,120,000 for GBP6,145,162 Settlement 10/10/2013Sold EUR3,845,000 for GBP3,287,914 Settlement 14/11/2013Sold EUR3,330,000 for GBP2,843,890 Settlement 14/11/2013Sold EUR2,410,000 for GBP2,066,178 Settlement 14/11/2013Sold EUR1,670,000 for GBP1,432,177 Settlement 14/11/2013Sold EUR1,525,000 for GBP1,302,228 Settlement 14/11/2013Sold EUR3,986,000 for GBP3,360,376 Settlement 09/01/2014Sold EUR5,000,000 for GBP4,201,805 Settlement 12/12/2013Sold EUR1,367,000 for GBP1,150,908 Settlement 12/12/2013Sold EUR1,180,000 for GBP993,985 Settlement 14/11/2013Sold EUR1,060,000 for GBP892,871 Settlement 12/12/2013Sold EUR245,000 for GBP210,468 Settlement 14/11/2013Sold EUR685,000 for GBP577,662 Settlement 12/12/2013Sold EUR2,970,000 for GBP2,485,664 Settlement 12/12/2013Sold SEK185,457,000 for GBP18,381,802 Settlement 10/10/2013Sold SEK500,000 for GBP49,935 Settlement 10/10/2013Sold SEK500,000 for GBP49,564 Settlement 10/10/2013Sold SEK500,000 for GBP49,356 Settlement 10/10/2013Sold SEK500,000 for GBP48,570 Settlement 10/10/2013Sold SEK300,000 for GBP29,263 Settlement 10/10/2013

7

Security

MarketValue£000

% ofNet

Assets




(7) -9,455 0.716,660 0.504,530 0.342,901 0.22

981 0.07571 0.04530 0.04253 0.02188 0.01167 0.01111 0.01

86 0.0178 0.0173 0.0165 -59 -

7 -2 -

Investment assets ^ 1,310,428 98.50

Total other assets (net) 19,978 1.50

Net assets 1,330,406 100.00

Rating BlockInvestment grade 1,240 0.09Speculative grade 1,273,511 95.75

Total bonds 1,274,751 95.84

Other 55,655 4.16

Net assets 1,330,406 100.00

Summary of Investment Assets by Credit Ratings

* Private Placement securities

^ Including investment liabilities of (£7,806).

Derivative contracts were traded on an eligible derivatives exchange.

Comparative figures shown in brackets relate to 30 September 2012.

All investments are approved securities as defined in the Collective Investment Schemessourcebook unless otherwise stated.

Sold USD245,000 for GBP153,527 Settlement 14/11/2013

Bought USD10,625,000 for GBP6,584,982 Settlement 01/10/2013Sold USD176,400,000 for GBP118,670,647 Settlement 10/10/2013Sold USD210,000,000 for GBP136,692,604 Settlement 24/10/2013Sold USD262,370,000 for GBP167,047,937 Settlement 12/12/2013Sold USD90,795,000 for GBP59,130,037 Settlement 14/11/2013Sold USD159,000,000 for GBP99,487,788 Settlement 09/01/2014Sold USD19,125,000 for GBP12,412,391 Settlement 10/10/2013Sold USD12,995,000 for GBP8,576,950 Settlement 07/11/2013Sold USD30,675,000 for GBP19,249,958 Settlement 14/11/2013

Sold USD3,870,000 for GBP2,469,785 Settlement 14/11/2013Sold USD2,555,000 for GBP1,647,487 Settlement 14/11/2013Sold USD1,775,000 for GBP1,157,801 Settlement 07/11/2013Sold USD10,625,000 for GBP6,588,477 Settlement 12/12/2013

Sold USD8,365,000 for GBP5,368,070 Settlement 14/11/2013Sold USD4,275,000 for GBP2,813,653 Settlement 10/10/2013Sold USD4,110,000 for GBP2,656,559 Settlement 14/11/2013Sold USD4,655,000 for GBP2,969,258 Settlement 14/11/2013Sold USD3,360,000 for GBP2,158,696 Settlement 14/11/2013

8

Material Portfolio Changes

PurchasesCost

£000Shelf Drilling 8.625% 01/11/2018 21,152Travelex Financing 8% 01/08/2018 19,665Vougeot Bidco 7.875% 15/07/2020 19,208New Look Bondco I 8.75% 14/05/2018 18,809TPC 8.75% 15/12/2020 18,323Equiniti Newco 2 7.125% 15/12/2018 16,220Takko Luxembourg 9.875% 15/04/2019 15,026Manutencoop Facility Management 8.5% 01/08/2020 14,986Norcell Sweden 9.25% 29/09/2018 14,792International Wire 8.5% 15/10/2017 14,285

SalesProceeds

£000KION Finance 7.875% 15/04/2018 17,005Ainsworth Lumber 7.5% 15/12/2017 15,296CVR Refining 6.5% 01/11/2022 14,369Pipe 9.5% 01/11/2015 13,557Countrywide 10% 08/05/2018 11,438Spectrum Brands 9.5% 15/06/2018 10,480Numericable Finance 12.375% 15/02/2019 10,121Kerling 10.625% 01/02/2017 9,651Xefin 8% 01/06/2018 8,831CDW 8% 15/12/2018 8,621


9

●

●

●

●

●

D. J. Lamb 26 November 2013

Directors' Certificate

This report is certified in accordance with the requirements of the rules in the Financial ConductAuthority's Collective Investment Schemes Sourcebook.

Directors A. M. Croft London

The Manager is responsible for keeping proper accounting records and for the management ofthe Trust in accordance with its Trust Deed, Prospectus and the Rules. The Manager has ageneral responsibility for taking such steps as are reasonably open to it to prevent and detectfraud and other irregularities.

St. James's Place International Corporate Bond Unit Trust 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 ("theRules") require the Manager to prepare Financial Statements for each annual accounting periodwhich give a true and fair view of the financial position of the Trust as at the end of the year andof 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 toAuthorised 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 topresume that the Trust will continue in operation.

10

London

26 November 2013


Statement of Trustee's Responsibilities

The Trustee is under a duty to take into custody and to hold the property of the Scheme in trustfor the holders of units. It is also the duty of the Trustee to enquire into the conduct of theManager in the management of the Scheme and to ensure that the Scheme is managed inaccordance with all applicable rules and restrictions in each annual accounting period, and toreport thereon to unitholders.

Report of the TrusteeIn our opinion, the Manager has managed the scheme, in all material aspects, during the periodcovered by this Report in accordance with the investment and borrowing powers and therestrictions applicable to the scheme, and otherwise in accordance with the Trust Deed and therules in the Financial Conduct Authority's Collective Investment Scheme provisions of theSourcebook.

For and on behalf of:BNY Mellon Trust & Depositary (UK) Limited

11

●

●

●

●

●

● the financial statements are not in agreement with the accounting records and returns.

PricewaterhouseCoopers LLPChartered Accountants & Statutory AuditorsEdinburgh26 November 2013The Financial Statements are published on www sjp.co.uk which is a website maintained by St. James’s Unit Trust Group Limited. Themaintenance and integrity of the website is the responsibility of the Manager; the work carried out by the auditors does not involveconsideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financialstatements since they were initially presented on the website. Visitors to the website need to be aware that legislation in the United Kingdomgoverning the presentation and dissemination of the Financial Statements may differ from legislation in their jurisdictions.

we have obtained all the information and explanations we consider necessary for thepurposes of the audit; and

the information given in the Manager's Report for the financial year for which the financialstatements 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 InvestmentSchemes sourcebook requires us to report to you if, in our opinion:

proper accounting records for the Trust have not been kept; or

In our opinion:

give a true and fair view of the financial position of the Trust at 30 September 2013 and ofthe net revenue and the net capital gains of the scheme property of the Trust for the yearthen ended; and

have been properly prepared in accordance with the Statement of Recommended Practice forAuthorised Funds, the Collective Investment Schemes sourcebook and the Trust Deed.

Opinion on other matters prescribed by the Collective Investment Schemes sourcebook

As explained more fully in the Manager’s Responsibilities Statement, the Manager is responsiblefor the preparation of the financial statements and for being satisfied that they give a true andfair view. Our responsibility is to audit and express an opinion on the financial statements inaccordance with applicable law and International Standards on Auditing (UK and Ireland). Thosestandards 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 abody in accordance with paragraph 4.5.12 of the Collective Investment Schemes sourcebook andfor no other purpose. We do not, in giving these opinions, accept or assume responsibility for anyother purpose or to any other person to whom this report is shown or into whose hands it maycome save where expressly agreed by our prior consent in writing.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts and disclosures in the financialstatements sufficient to give reasonable assurance that the financial statements are free frommaterial misstatement, whether caused by fraud or error. This includes an assessment of: whetherthe accounting policies are appropriate to the Trust’s circumstances and have been consistentlyapplied and adequately disclosed; the reasonableness of significant accounting estimates made by the Manager; and the overall presentation of the financial statements. In addition, we read all thefinancial and non-financial information in the Annual report to identify material inconsistencieswith the audited financial statements. If we become aware of any apparent materialmisstatements or inconsistencies we consider the implications for our report.

Opinion on the financial statements

In our opinion the financial statements:

St. James's Place International Corporate Bond Unit Trust (the "Trust")

Independent Auditors' Report to the Unitholders

We have audited the financial statements of the Trust for the year ended 30 September 2013which comprise the statement of total return, the statement of change in net assets attributableto unitholders, the balance sheet, the related notes and the distribution table. The financialreporting framework that has been applied in their preparation is applicable law and UnitedKingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) andthe Statement of Recommended Practice ‘Financial Statements of Authorised Funds’ issued by theInvestment Management Association (the “Statement of Recommended Practice for AuthorisedFunds”).

Respective responsibilities of the Manager and auditors

12

Notes £000 £000 £000 £000

2 34,581 64,8563 85,913 50,0684 (17,277) (9,989)6 (4) (2)

68,632 40,0775 (97) (32)

68,535 40,045

103,116 104,9016 (84,891) (49,203)

18,225 55,698

£000 £000 £000 £000887,492 440,503

368,098 353,724

(9,239) (1,653)

358,859 352,071- (1)

18,225 55,69865,833 39,221

(3) -

1,330,406 887,492

Bid Offerp p

105.8 111.3127.7 134.4

Closing net assets attributable to unitholders

Change in net assets attributable to unitholders from investment activities (see above)

01/10/12 to 30/09/13 01/10/11 to 30/09/12

Amounts receivable oncreation of units

Class actionsRetained distribution on accumulation units

Opening net assets attributable to unitholdersMovement due to creation and cancellation of units:

Stamp duty reserve tax

Income units

Amounts payable on cancellation of units

The prices per unit as at 30 September 2013 (unaudited) were:

for the year ended 30 September 2013

Revenue

Finance costs: Distributions

Expenses

Net revenue before taxation

Total return before distributions

Finance costs: Interest

Taxation

Net revenue after taxation

Change in net assets attributable to unitholders from investment activities

Statement of Change in Net Assets Attributable to Unitholders

Net capital gains

Statement of Total Return


Income


01/10/12 to 30/09/13 01/10/11 to 30/09/12

Accumulation units

13


30/09/13 30/09/12

Notes £000 £000 £000 £000

1,310,436 858,4228 35,104 27,6809 26,119 20,241

61,223 47,921

1,371,659 906,343

(8) (1,439)Creditors 10 (23,787) (11,079)

9 (16,136) (5,460)

(1,322) (873)

Total other liabilities (41,245) (17,412)

(41,253) (18,851)

1,330,406 887,492

Total liabilities

Total assets

Liabilities

Distribution payable onincome units

Bank overdrafts

Investment liabilities

Total other assets


Balance Sheet

Investment assetsAssets

DebtorsCash and bank balances

Net assets attributable to unitholders

14

1.

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)


Notes to the Financial Statements


Revenue

Valuation of investments

Provision is made for corporation tax at the current rate on the excess of taxable revenueover allowable expenses.

The Fund satisfied the qualifying investments test of Section 468 L Income and CorporationTaxes Act 1988 throughout the year. All distributions made are therefore made as interestdistributions.

Assets and liabilities have been translated into sterling at the exchange rates prevailing atthe Balance Sheet date.

Transactions involving foreign currencies are converted at the rate ruling on the date of thetransaction.

At the end of the accounting period all remaining revenue, less revenue expenses andtaxation, will be attributable to unitholders. In the case of income unitholders this will bepaid as a distribution. In the case of accumulation unitholders the distribution will bereinvested.

Distribution policy

7

The Financial Statements have been prepared under the historical cost basis, as modified bythe revaluation of investments, in compliance with the Financial Conduct Authority'sCollective Investment Schemes Sourcebook. They have been prepared in accordance withapplicable UK accounting standards and in accordance with the Statement of RecommendedPractice (SORP) for Financial Statements of Authorised Funds issued by the IMA in October2010 (IMA SORP 2010).

Accounting and Distribution policies

Basis of accounting

Interest on deposits is accounted for on an accruals basis. Revenue on interest bearingassets is recognised on an effective interest basis.

Taxation

Foreign exchange

Distributions are made in respect of quarters ended 31 March, 30 June, 30 September and31 December.

Equalisation

Deferred tax is provided for on the liability method on all timing differences. A deferred taxasset is only recognised to the extent that a timing difference will be of future benefit.

Equalisation applies only to units purchased during the distribution period. It is the accruedrevenue element of the purchase price of all such units and is refunded to holders of theseunits as a return of capital. Being capital it is not liable to income tax, but must be deductedfrom the cost of units for capital gains tax purposes.

Expenses

Listed investments have been valued at bid market value at 12.00 midday on 30 September2013 (28/09/12: bid market value at 12.00 midday), net of any accrued interest which isincluded in the Balance Sheet as a revenue related item.

All expenses of the Trust are recognised on an accruals basis and are deducted from revenuewith the exception of handling charges and stamp duty reserve tax which are deducted fromcapital. The manager has agreed that 100% of the annual management charge and theInvestment advisors fee are to be transferred to capital for the purpose of calculating thedistribution, as permitted by the Collective Investment Schemes Sourcebook.

15


(continued)Notes to the Financial Statements

(i)

2.01/10/12 to

30/09/1301/10/11 to

30/09/12£000 £000

45,255 37,46324,057 26,870

(34,723) 531(8) (8)

34,581 64,856

3.01/10/12 to

30/09/1301/10/11 to

30/09/12£000 £000

Bank interest 99 109Interest on debt securities 85,814 49,959

85,913 50,068

4.01/10/12 to

30/09/1301/10/11 to

30/09/12£000 £000

11,389 6,289

110 64

Audit fee 10 11Investment administration fee 57 59

686 66750 26

1 2Investment adviser's fee 4,974 2,871

5,778 3,636

17,277 9,989

Net capital gains

Forward currency contracts

Handling chargesCurrency (losses)/gains

Non-derivative securities

Net capital gains

Trustee's fees

Total expenses

*From 1 August 2012 the basis on which registration fees are charged to the schemes waschanged by the Manager, with the agreement of the Trustee. As detailed in theProspectuses, 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 ofinvestments held (unitholdings); and are allocated to the individual unit trusts based on therelative overall values of clients’ investments. Copies of the Prospectuses are available freeof charge on request to the Manager.

Other expenses

Tax & compliance fee

Registrar's fees *Safe custody fees

Payable to the Trustee

Derivatives

Management charge

Expenses

Payable to the Manager

Revenue

Total revenue

The Trust may enter into permitted transactions such as derivative contracts or forwardforeign currency transactions. Where these transactions are used to protect or enhancerevenue, 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 treatedas 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 BalanceSheet at their mark to market value.

16



5.01/10/12 to

30/09/1301/10/11 to

30/09/12£000 £000

(a)97 32

(b)

68,632 40,077

13,726 8,015

(19) -- 1,832

97 26(12,703) (9,841)

(1,004) -

97 32

(c)

(d)

6.

Distributions and interest

01/10/12 to 30/09/13

01/10/11 to 30/09/12

£000 £000First interim distribution 15,979 9,035Second interim distribution 17,591 8,975Third interim distribution 18,164 11,407Final distribution 18,919 12,734

16,980 9,841

87,633 51,99283 12

(2,825) (2,801)

84,891 49,2034 2

84,895 49,205

Factors that may affect future tax charges

There is no provision required for deferred taxation at the balance sheet date.

Current tax charge for year (note 5a)

At the year end, after offset against revenue taxable on receipt, there is a potential deferredtax asset of £nil (30/09/12: £1,004,166) relating to surplus management expenses. Nodeferred tax asset was recognised in the current or prior year as it was considered unlikelythe Fund would generate sufficient taxable profits in the future to utilise these amounts.

Irrecoverable overseas tax

Utilisation of brought forward management expenses

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 foran authorised unit trust of 20% (2012: 20%). The differences are explained below:Net revenue before taxation

Irrecoverable overseas tax

Double taxation relief

Tax deductible interest distributions

Movement in excess management expenses

Corporation Tax at 20% (2012: 20%)

Authorised Unit Trusts are exempt from tax on capital gains, therefore any capital return isnot included in the above reconciliation.

Deferred taxation:

Revenue tax withheld

Finance costs

The distributions take account of revenue received on the creation of units and revenuededucted on the cancellation of units and comprises:

Deduct: Revenue received on creation of unitsAdd: Revenue deducted on cancellation of units

InterestNet distributions for the year

Effects of:

Total finance costs

Taxation

Analysis of charge in year:

17



7.01/10/12 to

30/09/1301/10/11 to

30/09/12£000 £000

68,535 40,045Expenses paid out of capital 16,363 9,160

2 -(9) (2)

84,891 49,203

8.30/09/13 30/09/12

£000 £0003,614 -2,790 8,564

28,700 19,116

35,104 27,680

9.30/09/13 30/09/12

£000 £00024,401 19,913

1,718 328

26,119 20,241

16,136 5,460

16,136 5,460

10.30/09/13 30/09/12

£000 £00012,272 5,672

2,197 1671,165 1148,153 5,126

23,787 11,079

11.

12.

Purchases awaiting settlement

Total creditors

Amounts payable for cancellation of unitsAccrued expenses

Related party transactions

Cash and bank balances

St. James's Place Unit Trust Group Limited and BNY Mellon Trust & Depositary (UK) Limitedtogether with their associates are related parties and regarded as controlling parties byvirtue 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 innote 4 and details of the value of units created and cancelled by St. James's Place Unit TrustGroup Limited are shown in the Statement of Change in Net Assets Attributable toUnitholders. The net balances due to St. James's Place Unit Trust Group Limited at the yearend in respect of these transactions was £444,058 (30/09/12: £8,396,088).

Creditors

Trustee's fees and interest payable to the BNY Mellon Trust & Depositary (UK) Limited andtheir associates are shown in notes 4 and 6 respectively. The net balances due to BNYMellon Trust & Depositary (UK) Limited and their associates at the year end in respect ofthese transactions was £9,562 (30/09/12: £nil).

Units in issue

At the year end there were Income units of 88,530,197 (30/09/12: 59,347,862) andAccumulation units of 976,090,639 (30/09/12: 708,232,780) resulting in equivalent Incomeunits of 1,283,948,403 (30/09/12: 877,215,076).

Accrued revenue

The Manager, St. James's Place Unit Trust Group Limited, is a subsidiary of St. James's PlaceWealth 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 andpension policyholders' funds into the St. James's Place International Corporate Bond UnitTrust . The value of these investments at the year end was £748,835,670 (30/09/12:£651,466,242).

Income tax payable

Total debtors

Bank overdrafts

Cash and bank balances: Sterling

Amounts receivable for creation of units

Net distributions for the year

Debtors

Total cash and bank balances

Total bank overdrafts

Net revenue after taxation

Add: brought forward from previous yearLess: carried forward to next year

Movement between net revenue and net distributions

Sales awaiting settlement

Cash and bank balances: Overseas

18



13.

14.

●

●

●

15.

●

●

●

(a)

Initial and ongoing due diligence of Investment Adviser investment and risk managementprocedures – including on site reviews;

Periodic reviews of the investments held by the Trust and their compliance with investmentobjectives and liquidity requirements; and

Derivatives and other financial instruments

The Manager’s objectives in managing investment risk are to ensure that the investmentprofile of the Trust is consistent with its stated investment objectives and risk profile, and toensure appropriate liquidity. Day to day responsibility for managing investment risk isdelegated to the Investment Adviser, who is required to manage the Trust in accordancewith FCA regulations, the Prospectus and the terms of their Investment ManagementAgreement with the Manager. The Manager monitors the activities of the InvestmentAdviser, through a variety of mechanisms including the following:

Capital commitments and contingent liabilities

On 30 September 2013, the Trust had no capital commitments (30/09/12: £nil) and nocontingent liabilities (30/09/12: £nil).

The main risks arising from the Trust's financial instruments are market price risk, foreigncurrency risk, interest rate risk, credit risk and liquidity risk. The Manager's policies formanaging these risks are summarised below. These policies have remained unchangedsince the beginning of the year to which these financial statements relate.

The rules in the Scheme Documents set out the financial instruments in which the Trust mayinvest. The Trust's use of financial instruments during the year satisfies these requirements.

Ongoing review of the investment performance of the Trust against appropriate benchmarks.

Market price risk represents the potential loss the Trust might suffer through holding marketpositions in the face of price movements.

Market price risk

The Manager has delegated the investment management of the portfolio to an externalInvestment Adviser who determines the asset allocation and minimises the risk associatedwith particular countries or industry sectors, whilst continuing to follow the Trust’sinvestment objectives. The Manager has the responsibility for monitoring the portfolio toensure compliance with the investment objectives and that an acceptable risk reward profileis maintained.

Risk management

In accordance with the investment objectives, as stated on page 23, the Trust holds certainfinancial instruments. These comprise:Interest bearing assets and floating rate securities;

Derivative transactions which the Trust may enter into (principally futures contracts, forwardforeign currency contacts, swaps and options) the purpose of which is to manage the marketrisk arising from the Trust's investment activities (and related financing).

Cash (including overdrafts) and short-term debtors and creditors that arise directly from itsoperations; and

19



(b)

●

●

●

(c)

Floating rate financial

assets

Fixed rate financial

assets

Fixed rate weighted

average interest rate

Fixed rate weighted

average period for

which rate is fixed

Financial assets/

(liabilities) not carrying

interest Total£000 £000 % Years £000 £000

22,354 261,947 7.42 5.22 1,040,061 1,324,36222,625 331,247 7.49 5.79 (353,083) 789

- 14,593 7.44 5.00 (14,182) 411- 7,225 6.65 4.34 (7,219) 62 610,811 6.88 5.77 (605,975) 4,838

44,981 1,225,823 59,602 1,330,406

14,453 126,795 9.25 5.51 (733,235) (591,987)5,664 237,757 7.91 5.69 254,030 497,451

614 8,014 5.92 5.31 8,781 17,409319 466,529 7.72 6.00 497,771 964,619

21,050 839,095 27,347 887,492

EUR

Interest rate risk

Movements in exchange rates affect revenue received.

The revenue and capital value of the Trust’s investments can be affected by currencytranslation movements as a proportion of the Trust’s assets and revenue that aredenominated in currencies other than sterling, which is the Trust’s functional currency. Theoverall currency exposure for this Trust is reduced by the open forwards exposure.

Foreign currency risk

Interest rate risk arises due to variability in market interest rates. Some investments held bythe Trust, such as Corporate Bonds, are highly sensitive to fluctuations in market interestrates. Interest receivable on bank deposits or payable on bank overdraft positions will alsobe affected by these fluctuations. This risk is managed by ensuring that the Trust’s assets arediversified.

Currency

GBP

The Trust receives revenue in currencies other than sterling and movements in exchangerates can affect the sterling values of this revenue. The Trust converts all receipts of revenueinto sterling on or near the date of receipt, it does not however hedge or otherwise seek toavoid exchange rate risk on revenue accrued but not received.

Movements in exchange rates affect the value of investments;

The Trust may be subject to short term exposure to exchange rate movements, for instancewhere there is a difference between the date an investment purchase or sale is entered intoand the date when settlement of the proceeds occurs. When the Trust enters into such atransaction 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 inorder to minimise the exchange rate risk.

GBP

Total

30/09/12

EUR

Total

USDCHF

CHFSEK

USD

Movements in exchange rates affect short term timing differences; and

The Manager has identified three principal areas where foreign currency risk could impactthe Trust:

30/09/13

The interest rate risk profile of the Trust's financial assets and liabilities at 30 September2013 was:

20



(d)

(e)

(f)

(g)

(h)

16.

01/10/12 to 30/09/13

01/10/11 to 30/09/12

01/10/12 to 30/09/13

01/10/11 to 30/09/12

£000 £000 £000 £000

885,744 541,265 500,239 136,490Total trades in the year after transaction costs

Purchases Sales

Liquidity risk

All financial liabilities of the Trust at the year end are due to settle in one year or less, or ondemand.

Fair value of financial assets and liabilities

There is no material difference between the value of the financial assets and liabilities, asshown in the Balance Sheet, and their fair values.

Portfolio transaction costs

Liquidity risk arises where liabilities cannot be met when they fall due or can only be met atan uneconomic price. For instance, this could arise if the Trust faces significant redemptionsin a short period of time. In order to manage this risk the manager monitors the Trust withthe aim of ensuring that it contains diversified liquid assets, that the Trust possessessufficient liquidity for the purpose of meeting the redemption of units, and that the Trust hassources of borrowing available to it.

Derivative risk

There were no transactions costs incurred during the year to 30 September 2013.

The external Investment Adviser selects acceptable counterparties through whichinvestments are bought and sold. The Manager has responsibility for monitoring the processby which these counterparties are selected to minimise risk.

The Manager may use derivative instruments to hedge the value of the investment portfolioagainst market, currency and stock specific risk through investment in warrants, options,forwards and futures. The purpose of the financial instruments is efficient portfoliomanagement. In particular futures may be used to implement the investment policy in atimely manner and to manage market risk arising from the time lag between funds beingreceivable 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 asophisticated fund, the manager uses the commitment approach to measure the globalexposure to derivatives.

Maturity profile of financial liabilities

The Trust’s investments and cash are held on its behalf by State Street Bank and TrustCompany (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 rightswith respect to securities to be delayed. This risk is managed through ongoing monitoringof the custodian and periodic reviews of its procedures for selecting and monitoring subcustodians, together with ad hoc reviews of custodian and sub custodian credit ratings.

Credit risk

Where the Investment Managers make an investment in a bond with credit risk, that creditrisk is assessed and then compared to the prospective investment return of the security inquestion. The risk is managed by reviewing the credit ratings of those bonds at time ofpurchase and on an ongoing basis.

Certain transactions in securities that the Trust enters into expose it to the risk that thecounterparty will not deliver the investment (purchase) or cash (sale) after the fund hasfulfilled its responsibilities.

Credit risk occurs where there is a risk associated with the uncertainty of a counterparty’sability to meet its obligations. This risk is managed by reviewing the counterparty’s creditrating, at the time of purchase and on an ongoing basis, and ensuring that the portfolio issufficiently diversified. The impact of movements in credit rating and spread, and their effecton market prices, is considered to be part of market price risk, which is discussed above.

21

Group 1

Group 2

Grossrevenue

Incometax

Netrevenue Equalisation

Distributions paid to/ payable

31/12/13

Distributions paid to

31/12/12

Group 1 (p) (p) (p) (p) (p) (p)First interim 1.994 0.399 1.595 - 1.595 1.634Second interim 1.986 0.397 1.589 - 1.589 1.373Third interim 1.894 0.379 1.515 - 1.515 1.522Final 1.866 0.373 1.493 - 1.493 1.471

Group 2 (p) (p) (p) (p) (p) (p)First interim 0.956 0.191 0.765 0.830 1.595 1.634Second interim 0.935 0.187 0.748 0.841 1.589 1.373Third interim 0.895 0.179 0.716 0.799 1.515 1.522Final 0.945 0.189 0.756 0.737 1.493 1.471

Grossrevenue

Incometax

Netrevenue Equalisation

Distributions paid to/ payable

31/12/13

Distributions paid to

31/12/12

Group 1 (p) (p) (p) (p) (p) (p)First interim 2.302 0.460 1.842 - 1.842 1.777Second interim 2.329 0.466 1.863 - 1.863 1.519Third interim 2.254 0.451 1.803 - 1.803 1.707Final 2.253 0.450 1.803 - 1.803 1.675

Group 2 (p) (p) (p) (p) (p) (p)First interim 1.104 0.221 0.883 0.959 1.842 1.777Second interim 1.096 0.219 0.877 0.986 1.863 1.519Third interim 1.065 0.213 0.852 0.951 1.803 1.707Final 1.141 0.228 0.913 0.890 1.803 1.675

Accumulation

Final Units purchased on or after 1 July 2013 to 30 September 2013

Income

First interim Units purchased on or after 1 October 2012 to 31 December 2012Second interim Units purchased on or after 1 January 2013 to 31 March 2013Third interim Units purchased on or after 1 April 2013 to 30 June 2013

First interim Units purchased prior to 1 October 2012

Final Units purchased prior to 1 July 2013

Second interim Units purchased prior to 1 January 2013Third interim Units purchased prior to 1 April 2013


Distribution Tables

Distributions in pence per unit

22

Efficient Portfolio Management

The efficient portfolio management techniques used in the fund are the use of currency forwardswith counterparties Credit Suisse London Branch, HSBC Bank USA and Morgan Stanley CapitalServices for the purpose of hedging the value of assets denominated in those currencies. As at theaccounting date the exposure hedged was £461,322,692 with counterparty Credit Suisse LondonBranch, £100,695,392 with counterparty HSBC Bank USA and £450,503,951 with counterpartyMorgan Stanley Capital Services.The revenues were nil with no collateral placed or received.

It is the Manager's intention that the assets of the Unit Trust will be invested so that the UnitTrust will be eligible for inclusion in an ISA.

Non-Resident Unitholders - European Union Savings Directive

Unitholders resident in most European Union countries (not UK) should be aware that the Trust iscovered by the European Union Savings Directive. The Manager is required to identify and reportyour distribution and repurchase transactions to the UK tax authorities, who are in turn requiredto pass this information to most other EU national tax authorities.

The Unit Trust is subject to the rules of the Financial Conduct Authority's Collective InvestmentScheme 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 theIMA and is authorised and regulated by the Financial Conduct Authority.

Investment Objectives

The investment objective of the Scheme is to provide a combination of income generation andcapital appreciation.

To achieve this, the Scheme will invest principally in a portfolio of senior secured high yieldcorporate debt instruments*, primarily issued by North American and European companies. TheScheme may also invest in any other geographic area.

The Scheme is also permitted to invest in other types of transferable securities, money marketinstruments, cash and near cash, units and/or shares in collective investment schemes, depositsand derivative and forward transactions for the purposes of efficient portfolio management(including hedging).*Corporate debt instruments are either secured or unsecured, and, either senior or subordinated.Secured debt means that collateral has been pledged as security against default, whilst investorsin senior debt instruments are legally entitled to be repaid ahead of investors in subordinated (i.e.non-senior) instruments issued by the same corporation. Senior secured debt instrumentstherefore carry a lower risk of loss than other debt instruments issued by the same corporation.

The term high yield means that the corporate debt instruments have received a credit ratingbelow investment grade, which is equivalent to or lower than a "BBB minus" from the ratingsagency Standard & Poor's.

St. James's Place International Corporate Bond Unit Trust is an authorised Unit Trust schemeunder section 243 of the Financial Services and Markets Act (2000) and is constituted by a TrustDeed dated 22 March 2010.


General Information

The Trust

23


General Information (continued)

(a)

(b)

Tax Vouchers

Income distributions are made quarterly on or before the 31 March, 30 June, 30 September and31 December.

Accumulation Distributions

Revenue due to accumulation unitholders is reflected in the price of their units.

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 unitspurchased. Unitholders should consult their professional advisers for any advice regarding theirtax position.

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 Maywith 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 an individual holding units will not be liable tocapital gains tax unless the total chargeable gains for the tax year 2013/2014 exceed £10,900(2012/2013 £10,600).

Management Charges

The Trust Deed permits the following management charges which are receivable by the Manager:

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 per cent of the value of the Trust.

Income Distributions

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.

Unit Dealings

Dealings on the Trust take place on a daily basis. Purchase or sale instructions can be made bytelephone or in writing to St. James's Place Unit Trust Group Limited, P.O. 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 dealingday following receipt of the client's instructions, or if received before noon on the dealing day, onthat dealing day.

In the case of telephone purchases of units from the Manager, settlement must be by return ofpost after receipt of the contract note. In the case of telephone redemptions, the proceeds willnot 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 involvedwill be forwarded, together with a cancellation notice, where appropriate, on the next businessday.

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

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Perivan Financial Print 230751 International Corporate Bond (11/13)

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 Offi ce:

St. James’s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom. Registered in England Number 947644.

international corporate bond unit trust - St James's Place

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