PHOENIX UNIT TRUST MANAGERS MANAGER’S .../media/Files/P/...5 Portfolio of investments (unaudited) Investments held at 15 May 2019 Market Percentage of value total net assets Holding

PHOENIX UNIT TRUST MANAGERS

MANAGER’S ANNUAL REPORT For the year: 16 May 2018 to 15 May 2019

PUTM BOTHWELL UK EQUITY INCOME FUND

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Contents

Investment review* 2-4

Portfolio of investments* 5-7

Top ten purchases and sales 8

Statistical information* 9-11

Statements of total return & change in net assetsattributable to unitholders 12

Balance sheet 13

Notes to the financial statements 14-23

Distribution tables 24

Responsibilities of the manager and the trustee 25

Trustee’s report and directors’ statement 26

Independent auditor’s report 27-29

Appendix 30-31

Corporate information* 32-34

*These collectively comprise the Authorised Fund Manager’s Report.

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Dear Investor

Welcome to the PUTM Bothwell UK Equity Income Fundannual report for 12 months to 15 May 2019.

Performance Review

The PUTM Bothwell UK Equity Income Fund returned -9.0% over the review period (Source: Standard LifeInvestments for 12 months to 15/05/19). This comparesto a return of -2.3% by its benchmark index (Source:Datastream, FTSE All Share Ex IT (excluding income)* for12 months to 15/05/17).

The table shows how the Fund performed against itsbenchmark index over the last five discrete one-yearperiods.

Investment review

Source: Fund performance is Standard Life Investments, benchmark index performance is Datastream, FTSE All ShareEx IT (excluding income)* to 15 May for each year. The Fund’s benchmark changed from the FTSE All Share Index tothe FTSE All Share Ex IT Index on 31/12/09.

Past performance is not a guide to future performance.

The value of units and the income from them can go down as well as up and is not guaranteed. You may not get backthe full amount invested.

Please note that all past performance figures are calculated without taking the initial charge into account.

*All Bothwell performance should be reported, including income because the Fund benchmark includesincome. However, the Bothwell UK Equity Income Fund is special as the price record is used to calculateperformance. All of the Bothwell funds, with the exception of the Bothwell UK Equity Income Fund, haveaccumulation unit prices available. These prices are based on net asset value (NAV), which has incomereinvested. However, the Bothwell UK Equity Income Fund has only income units available as the income fromthe holdings is distributed to the unitholders. As a result, when performance is calculated from the price, theincome is artificially reinvested by adding it back into the NAV.

Standardised Past Performance

PUTM Bothwell UK Equity Income Fund -9.0 10.4 19.2 -8.3 14.4

Benchmark Index -2.3 7.9 25.4 -7.8 7.2

May 18-19 May 17-18 May 16-17 May 15-16 May 14-15% growth % growth % growth % growth % growth

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Portfolio and Market Review

Although UK share prices were up over the 12 months,there was some volatility along the way. The stock markethad to weather political upheaval and Brexit-relateduncertainty. At the sector level, shares in technology andhealthcare companies were among the top performers.By contrast, telecoms and utilities struggled.

After a weak start to 2018, the UK equity marketrebounded into the summer. Sterling weakness benefitedcompanies that make the bulk of their earnings overseas.In particular, oil firms were in the ascendency as crudereached nearly $80 per barrel in May – its highest levelin four years. The positive mood was not to last, however.UK equities fell back, as stumbling Brexit negotiations,the worsening US-China trade conflict and emerging-market volatility dominated headlines. Nevertheless,economic data was generally positive, with better-than-anticipated GDP growth and lower unemployment. Thisled the Bank of England to increase interest rates to0.75% in August.

UK share prices ended 2018 in the doldrums. As aresult, the FTSE 100 Index delivered its weakest annualperformance since 2008. The broader FTSE All-ShareIndex also closed the year with a double-digit decline.The prospect of a worldwide economic slowdown andBrexit uncertainty continued to dent sentiment. UKequities then enjoyed a rebound in the opening months of2019. In particular, a more dovish tone from the majorcentral banks and optimism over US-China trade talkscombined to boost investor sentiment. In April, the UK’sdecision to delay Brexit led to further gains for equities.

The Fund finished in negative territory and trailed itsbenchmark.

One of the biggest detractors from performance was touroperator Saga. The company announced a profit warning,resulting from efforts to retain customers through lowermotor insurance pricing. However, to address this issue,it has shifted focus to its direct business stream andproduct innovation. Construction company Kier Groupwas negative. Its results triggered renewed concernsabout the working capital and debt position of thebusiness. GVC, the betting group, struggled due to fearsthat UK regulation has turned negative for the gamblingindustry. Nonetheless, we believe the current pressurewill act as a catalyst for companies to adapt to the new

regime. This should eventually lead to a more benignapproach from the government. Holdings in Indivior,Diageo and Thomas Cook also disappointed.

On a more positive note, infrastructure investor JohnLaing added to the Fund’s return. Investors acknowledgedthe progress the business has made in meeting capitalreturn targets. We believe the current valuationunderappreciates its future prospects. Another topcontributor was the oil & gas company Kosmos Energy.The business continues to recover from a difficult end to2018. An update from management reassured investorson the group’s asset quality. It has also succeeded inadding value through the acquisition of mature assets inthe Gulf of Mexico. Shares in Cineworld climbed followingnews its annual pre-tax profits had more than doubled.Management attributed the performance to its takeover ofUS chain Regal, which had “exceeded expectations”.Additional highlights included Ashmore, Polypipe andAnglo American.

Turning to activity, we started a position in US firmDiversified Gas & Oil. The company has a simplebusiness model: to buy up mature wells that operators nolonger want as they detract from their growth. This meansit can acquire wells at an attractive price and, withlimited investment, can deliver a stable source of cash forsome years to come. The dividend yield is approaching10% and the company has de-risked much of thebusiness. Another new entry into the Fund was Convatec.It produces healthcare products, such as wounddressings and ostomy equipment. The company hasstruggled since coming to market, with managementfailing to deliver on improved margins and growth.However, a recent management change, with animpressive new CEO at the helm, can be the catalyst forimproved performance. The valuation of the company isalso at a material discount to peers. Finally, we started aposition in Howden Kitchens. It has a dominant positionin supplying kitchens to trade buyers in the UK. This is ahigh-quality domestic business, which has managed togrow earnings through steady growth and marginimprovement.

Elsewhere, we exited Jupiter. This UK fund manager hasbeen a steady source of dividends over time. However,the share price has struggled due to falling market levelsand outflows from one of its most successful funds.

Investment review

4

Market Outlook and Fund Strategy

We seek to deliver performance from stock-specificfactors. Our bottom-up stock picking process – based onfull coverage of the UK FTSE350 index and peer review –seeks to profit from improvements in companies thatinvestors underappreciate. In addition, the Fund aims todeliver a yield equivalent to that of the market.

We believe the UK income sector looks attractive, withyields at multi-decade highs relative to bond yields.Dividends are also generally well covered. Having saidthat, the global macroeconomic outlook looks increasinglyuncertain and various macro indicators show slowinggrowth.

We therefore focus on three areas in the market: securedividend payers to support the yield; valuation caseswhere stocks are mispriced compared to their growth orin comparison to global peers; and uncorrelated growth,i.e. stocks that can deliver growth independent of thewider macro outlook.

The current UK market provides opportunities in all ofthese areas. The uncertainty around UK politics has ledto the index trading on a significant discount to developedmarket peers. This creates valuation opportunities andalso some elevated yields.

Investment review

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Portfolio of investments (unaudited)

Investments held at 15 May 2019 Market Percentage of value total net assets Holding Investment £000 %

UK Equities (15/05/18 – 91.49%) 94.03 Aerospace & Defence (15/05/18 – 0.00%) 2.74 287,467 BAE Systems 1,336 1.31 11,226,591 Rolls-Royce ‘C’ Shares* – – 158,121 Rolls-Royce 1,448 1.43

Banks (15/05/18 – 12.43%) 11.56 1,127,006 Barclays 1,803 1.77 944,264 HSBC Holdings 6,260 6.15 607,004 Royal Bank of Scotland Group 1,397 1.38 339,574 Standard Chartered 2,301 2.26

Beverages (15/05/18 – 1.92%) 2.20 32,251 Diageo 1,069 1.05 38,645 Fever-Tree Drinks 1,173 1.15

Chemicals (15/05/18 – 0.91%) 1.00 32,588 Johnson Matthey 1,020 1.00

Construction & Materials (15/05/18 – 1.60%) 1.50 129,315 Kier Group 442 0.43 256,423 Polypipe Group 1,085 1.07

Financial Services (15/05/18 – 4.06%) 3.57 206,679 Ashmore Group 959 0.94 68,889 Close Brothers Group 1,035 1.02 424,747 John Laing Group 1,635 1.61

Fixed Line Telecom (15/05/18 – 0.57%) 0.00

Forestry & Paper (15/05/18 – 0.44%) 0.00

Gas, Water & Multiutilities (15/05/18 – 3.53%) 3.75 291,489 National Grid 2,456 2.41 169,331 United Utilities 1,358 1.34

General Industrials (15/05/18 – 2.00%) 1.71 259,507 DS Smith 857 0.84 164,215 Vesuvius 883 0.87

General Retailers (15/05/18 – 3.20%) 2.26 233,113 Inchcape 1,381 1.36 949,440 Saga 530 0.52 85,684 Superdry 388 0.38

Healthcare Equipment & Services (15/05/18 – 1.61%) 2.55 814,895 Convatec Group 1,156 1.14 55,676 NMC Health 1,440 1.41

Household Goods (15/05/18 – 5.04%) 5.38 23,567 Bellway 695 0.68 51,662 Bovis Homes Group 540 0.53 269,447 Countryside Properties 860 0.85 56,542 Persimmon 1,192 1.17 35,100 Reckitt Benckiser 2,186 2.15

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Industrial Engineering (15/05/18 – 0.88%) 1.59 112,499 Bodycote 897 0.88 399,401 Melrose Industries 727 0.71

Life Insurance (15/05/18 – 6.60%) 7.62 502,470 Aviva 2,093 2.06 351,731 Legal & General 961 0.94 172,826 Prudential 2,814 2.77 169,611 St James’s Place 1,883 1.85

Media (15/05/18 – 0.46%) 0.77 221,485 Moneysupermarket.com 786 0.77

Mining (15/05/18 – 6.76%) 3.30 191,965 BHP Group 3,359 3.30

Mobile Telecom (15/05/18 – 3.30%) 2.74 2,216,552 Vodafone Group 2,792 2.74

Non Equity Investment Instruments (15/05/18 – 0.69%) 0.00

Non-Life Insurance (15/05/18 – 2.23%) 1.24 193,026 Direct Line Insurance Group 612 0.60 353,203 Hastings 653 0.64

Oil & Gas Producers (15/05/18 – 15.11%) 17.60 1,264,487 BP 6,821 6.70 173,242 Cairn Energy 275 0.27 474,295 Diversified Gas & Oil 609 0.60 196,853 Royal Dutch Shell A 4,958 4.87 158,855 Royal Dutch Shell B 4,013 3.94 2,870,079 Savannah Petroleum 585 0.58 299,367 Tullow Oil 652 0.64

Oil Equipment & Services (15/05/18 – 1.00%) 0.80 182,259 John Wood Group 813 0.80

Personal Goods (15/05/18 – 1.20%) 2.07 44,970 Unilever 2,109 2.07

Pharmaceuticals & Biotechnology (15/05/18 – 6.34%) 7.84 45,823 AstraZeneca 2,667 2.62 320,092 GlaxoSmithKline 4,908 4.82 769,405 Indivior 402 0.40

Real Estate Investment & Services (15/05/18 – 0.67%) 0.00

Software & Computer Services (15/05/18 – 0.00%) 0.83 125,171 Just Eat 840 0.83

Support Services (15/05/18 – 1.27%) 1.84 202,022 Howden Joinery Group 1,051 1.03 212,468 Rentokil Initial 818 0.81

Tobacco (15/05/18 – 6.25%) 6.21 156,850 British American Tobacco 4,556 4.48 82,657 Imperial Brands 1,759 1.73

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Travel & Leisure (15/05/18 – 1.42%) 1.36 353,397 Cineworld Group 1,057 1.04 240,290 William Hill 324 0.32

European Equities (15/05/18 – 0.55%) 0.00

Travel & Leisure (15/05/18 – 0.55%) 0.00

Canadian Equities (15/05/18 – 0.31%) 0.00

Media (15/05/18 – 0.31%) 0.00

Channel Islands (15/05/18 – 5.81%) 4.35

Construction & Materials (15/05/18 – 0.00%) 1.15 21,118 Ferguson 1,173 1.15

Food & Drug Retailers (15/05/18 – 0.76%) 0.00

Media (15/05/18 – 0.70%) 0.00

Mining (15/05/18 – 2.51%) 3.20 1,169,935 Glencore 3,256 3.20

Pharmaceuticals & Biotechnology (15/05/18 – 1.84%) 0.00

Isle Of Man (15/05/18 – 1.75%) 1.31

Travel & Leisure (15/05/18 – 1.75%) 1.31 224,464 GVC Holdings 1,332 1.31

United States (15/05/18 – 0.00%) 1.09

Oil & Gas Producers (15/05/18 – 0.00%) 1.09 219,367 Kosmos Energy 1,108 1.09

Money Markets (15/05/18 – 1.50%) 0.56 £566 Aberdeen Liquidity Fund Lux Sterling Fund – Class Z-1~ 566 0.56

Portfolio of investments 103,114 101.34

Net other liabilities (1,363) (1.34)

Net assets 101,751 100.00

Unless otherwise stated, all investments are approved securities being eitherofficially listed in a member state or traded on or under the rules of an eligiblesecurities market. ~SICAVs (open ended investment schemes registered outside the UK).*Rolls Royce 'C' shares are received instead of a dividend. These are valued at0.1p per share and the market value is reflected in the Accrued Income of theFund rather than the Portfolio.

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Purchases Cost £000Aberdeen Liquidity Fund Lux SterlingFund – Class Z-1 23,405Indivior 1,867BAE Systems 1,731St James’s Place 1,662Rolls-Royce 1,322United Utilities 1,282BHP Group 1,242 Royal Bank of Scotland Group 1,155Convatec Group 1,112Glencore 1,078

Subtotal 35,856

Other purchases 21,823

Total purchases for the year 57,679

Sales Proceeds £000Aberdeen Liquidity Fund Lux SterlingFund – Class Z-1 24,684Rio Tinto 3,938Shire 2,498Anglo American 2,359Beazley 1,806HSBC Holdings 1,702Lloyds Banking Group 1,132Severn Trent 1,042Hargreaves Lansdown 1,026Aviva 998

Subtotal 41,185

Other sales 21,529

Total sales for the year 62,714

Top ten purchases and salesFor the year ended 15 May 2019

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Statistical information

Comparative table Class 'B' Income 15/05/19 15/05/18 15/05/17 pence pence penceChange in net assets per unitOpening net asset value per unit 124.85 117.52 102.22

Return before operating charges* (11.46) 12.32 19.72Operating charges (0.04) (0.04) (0.04)

Return after operating charges* (11.50) 12.28 19.68

Distributions on income units (5.24) (4.95) (4.38)

Closing net asset value per unit 108.11 124.85 117.52

*after direct transaction costs of: 0.20 0.12 0.16

PerformanceReturn after charges (9.21%) 10.45% 19.25%

Other informationClosing net asset value (£000) 101,751 122,743 124,884Closing number of units 94,117,711 98,310,714 106,261,875Operating charges 0.03% 0.03% 0.04%Direct transaction costs 0.18% 0.10% 0.14%

Prices+

Highest unit price (pence) 128.10 128.31 120.49Lowest unit price (pence) 99.70 113.48 93.49

+High and low price disclosures are based on quoted unit prices. Therefore, the opening andclosing NAV prices may fall outside the high/low price threshold.

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Investment objective The Fund aims to achieve an above average return and a gross yield higher than theyield on the FTSE All Share Index by investing predominantly in shares of UKcompanies.

Investment policyThe Fund will be actively managed with a focus on companies which have theprospect of producing a dividend yield in excess of the yield on the FTSE All-ShareIndex. The Fund can also invest up to 15% in UK bonds and/or in overseasinvestments. The Fund is not constrained by any index weightings and does notconcentrate on any particular sector. The Fund will be actively managed to producerevenue while preserving capital. The Fund may also invest in other transferablesecurities, units in collective investments schemes, money market instruments,deposits, cash and near cash.

Revenue distribution and pricingUnits of the Fund are available as Class ‘B’ Income units (where revenue is distributedto unitholders). There will be two potential distributions in each accounting year: aninterim distribution as at 15 November and a final distribution as at 15 May.

At each distribution the net revenue after deduction of expenses, arising in thepreceding six months from the investments of the Fund is apportioned amongst theunitholders. Unitholders receive a tax voucher giving details of the distribution and theManager’s Report no later than two months after these dates.


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fi


Risk and reward profileThe Risk and Reward Indicator table demonstrates where the Fund ranks in terms of itspotential risk and reward. The higher the rank the greater the potential reward but thegreater the risk of losing money. It is based on past data, may change over time andmay not be a reliable indication of the future risk profile of the Fund. The shaded area inthe table below shows the Fund’s ranking on the Risk and Reward Indicator.

Typically lower rewards, Typically higher rewards, lower risk higher risk fi

1 2 3 4 5 6 7

This Fund is ranked at 5 (15/05/18: 5) because funds of this type have experiencedmedium to high rises and falls in value in the past. Although this is a high risk ranking itis not the highest.

The above figure applies to the following unit class:

• Class ‘B’ Income

Please note that even the lowest risk class can lose you money and that extreme marketcircumstances can mean you suffer severe losses in all cases. Please note the Fund'srisk category may change in the future. The indicator does not take into account thefollowing risks of investing in this Fund:

• The level of income is not guaranteed.

• The Fund may use derivatives to reduce risk or cost or to generate additional capitalor income at low risk, or to meet its investment objective.

For more information on the Risk and Reward profiles of our Funds, please refer to themost up to date relevant fund and Unit Class Key Investor Information Documents(KIIDs). These are available online at www.phoenixunittrust.co.uk.

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Annual financial statementsFor the year ended 15 May 2019

Statement of total return 15/05/19 15/05/18 Notes £000 £000 £000 £000

Income

Net capital (losses)/gains 4 (16,127) 7,228 Revenue 5 5,105 5,143

Expenses 6 (37) (41)

Interest payable and similar charges (2) (2)

Net revenue before taxation 5,066 5,100

Taxation 7 (31) (57)

Net revenue after taxation 5,035 5,043

Total (deficit)/returnbefore distributions (11,092) 12,271

Distributions 8 (5,053) (5,061)

Change in net assets attributable to unitholdersfrom investment activities (16,145) 7,210

Statement of change in net assets attributable to unitholders

15/05/19 15/05/18 £000 £000 £000 £000

Opening net assets attributable to unitholders 122,743 124,884

Amounts receivable on issue of units 5,235 4,279

Amounts payable on cancellation of units (10,082) (13,630)

(4,847) (9,351)

Change in net assets attributable to unitholdersfrom investment activities (16,145) 7,210

Closing net assets attributable to unitholders 101,751 122,743

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Balance sheet 15/05/19 15/05/18 Notes £000 £000 £000 £000

Assets:Fixed assets:Investments 103,114 124,477

Current assets:Debtors 9 1,063 1,054 Cash and bank balances 10 44 45

Total current assets 1,107 1,099

Total assets 104,221 125,576

Liabilities: Creditors:Other creditors 11 (81) (126)Distribution payable (2,389) (2,707)

Total liabilities (2,470) (2,833)

Net assets attributable to unitholders 101,751 122,743

Annual financial statementsAs at 15 May 2019

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Notes to the financial statements

Note 1 Accounting policies(a) Basis of preparation

The financial statements have been prepared under the historical cost basis, asmodified by the revaluation of investments and in compliance with FinancialReporting Standard (FRS102) and in accordance with the Statement ofRecommended Practice (SORP) for financial statements of Authorised Fundsissued by The Investment Association in May 2014 and amended in June2017. The financial statements have been prepared on a going concern basis.Unless otherwise stated all accounting policies are consistent with those of theprior year.

(b) Valuation of investmentsThe quoted investments of the Fund have been valued at bid dealing pricesas at close of business on 15 May 2019, the last valuation point in theaccounting year, in accordance with the Trust Deed.

Investments in collective investment schemes have been valued at bid pricefor dual priced funds or the single price for single priced funds. Where theseinvestments are managed by the Manager or an associate of the Manager, theholdings have been valued at the cancellation price for dual priced funds orthe single price for single priced funds. This price is the last availablepublished price at the year end.

(c) Foreign exchangeTransactions in foreign currencies during the year are translated into sterling(the functional currency of the Fund), at the rates of exchange ruling on thetransaction date. Amounts held in foreign currencies have been translated atthe rate of exchange ruling at close of business, 15 May 2019, the lastvaluation point in the accounting year.

(d) RevenueDividends receivable from equity investments and distributions receivablefrom collective investment schemes are credited to revenue when they arefirst quoted ex-dividend. Interest receivable on bank deposits and moneymarket funds is accounted for on an accruals basis.

Any commission arising from stocklending is recognised on an accruals basisand is disclosed net of fees.

(e) Special dividendsSpecial dividends are treated either as revenue or repayments of capitaldepending on the facts of each particular case. It is likely that where thereceipt of a special dividend results in a significant reduction in the capitalvalue of the holding, then the special dividend should be treated as capital innature so as to ensure the matching principle is applied to gains and losses.Otherwise, the special dividend should be treated as revenue.

(f) ExpensesExpenses are accounted for on an accruals basis. Expenses of the Fund arecharged against revenue, except for the manager's periodic charge and costsassociated with the purchase and sale of investments, which are charged tocapital.

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Note 1 Accounting policies (continued)

(g) TaxationThe charge for taxation is based on taxable income for the year less allowableexpenses. UK dividends and franked distributions from UK collective investmentschemes are disclosed net of any related tax credit. Overseas dividends,unfranked distributions from UK collective investment schemes, anddistributions from overseas collective investment schemes are disclosed gross ofany tax suffered, the tax element being separately disclosed in the taxation note.

(h) Deferred taxationDeferred tax is provided at current rates of corporation tax on all timingdifferences which have originated but not reversed by the Balance sheet date.Deferred tax is not recognised on permanent differences. Deferred tax assets arerecognised only to the extent that the Manager considers it is more likely thannot that there will be taxable profits from which underlying timing differencescan be deducted.

Note 2 Distribution policies(a) Basis of distribution

Revenue produced by the Fund's investments accumulates during eachaccounting period. If, at the end of each accounting period, revenue exceedsexpenses, the net revenue of the Fund is available to be distributed tounitholders.The Fund is not more than 60% invested in qualifying investments (as definedby SI 2006/964, Reg 20) and will pay a dividend distribution.

(b) Unclaimed distributionsDistributions remaining unclaimed after six years are paid into the Fund aspart of the capital property.

(c) Special dividendsIt is the policy of the Fund, where applicable, to distribute special dividendswhich have been treated as revenue.

(d) Distributions from collective investment schemesIt is the policy of the Fund to distribute revenue from both income andaccumulation distributions.

(e) ExpensesIn determining the net revenue available for distribution, charges in relation tothe safe custody and management of investments are ultimately borne bycapital.

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Note 3 Risk management policiesThe risks arising from the Fund’s financial instruments are market price risk,interest rate risk, foreign currency risk, liquidity risk and counterparty risk. TheManager's policies for managing these risks are summarised below and havebeen applied throughout the year.

(a) Market price riskMarket price risk arises mainly from uncertainty about future prices of financialinstruments held. It represents the potential loss the Fund might suffer throughholding market positions in the face of price movements. The Fund’sinvestment portfolio is exposed to market fluctuations which are monitored bythe Manager in pursuit of the investment objectives and policies. Adherence toinvestment guidelines and to investment and borrowing powers set out in theTrust Deed, the Prospectus and in the Collective Investment SchemesSourcebook (“the Sourcebook”) mitigates the risk of excessive exposure to anyparticular type of security or issuer.

(b) Interest rate riskThe majority of the Fund’s financial assets are equity shares and otherinvestments which neither pay interest nor have a maturity date.Interest receivable on bank deposits or payable on bank overdraft positions willbe affected by fluctuations in interest rates.

(c) Foreign currency riskThe Fund has no significant exposure to foreign currency risk.

(d) Liquidity riskThe Fund’s assets are comprised of mainly readily realisable securities. Ifinsufficient cash is available to finance unitholder redemptions then securitiesheld by the Fund may need to be sold. The risk of low market liquidity, throughreduced trading volumes, may affect the ability of the Fund to trade financialinstruments at values previously indicated by financial brokers. From time totime, liquidity may also be affected by stock specific or economic events. Tomanage these risks the Manager performs market research in order to achievethe best price for any transactions entered into on behalf of the Fund. Allstocks are valued daily but those stocks identified as being less liquid arereviewed on a regular basis for pricing accuracy.

(e) Counterparty riskCertain transactions in securities that the Fund enters into expose it to the riskthat the counterparty will not deliver the investment (purchase) or cash (sale)after the Fund has fulfilled its responsibilities. The Fund only buys and sellsinvestments through brokers which have been approved by the Manager as anacceptable counterparty. This list is reviewed annually.

(f) DerivativesDerivative transactions may be used by the Fund for the purposes of meetingits investment objectives and also for hedging. In doing so the Manager maymake use of a variety of derivative instruments in accordance with theSourcebook. The use of derivatives for investment purposes means that the netasset value of the Fund may at times have high volatility, although derivativeswill not be used with the intention of raising the risk profile of the Fund. Wherederivatives are used for hedging this will not compromise the risk profile of theFund. Use of derivatives will not knowingly contravene any relevant investmentobjective or limits.

There were no derivatives held during the year or at the year end.

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Note 4 Net capital (losses)/gainsThe net capital (losses)/gains during the year comprise:

15/05/19 15/05/18 £000 £000

(Losses)/gains on non-derivative securities (16,328) 6,895Currency (losses)/gains (1) 1Handling charges (2) (2)Capital special dividends 203 334Research commission reimbursement 1 –

Net capital (losses)/gains (16,127) 7,228

Note 5 Revenue 15/05/19 15/05/18 £000 £000

UK dividends 4,557 4,603Overseas dividends 523 506Stocklending commission 13 30Liquidity interest 12 4

Total revenue 5,105 5,143

Note 6 Expenses 15/05/19 15/05/18 £000 £000(a) Payable to the Manager or associates of the Manager

and agents of either of them:Manager’s periodic charge 17 18

(b) Payable to the Trustee or associates of the Trustee and agents of either of them:Trustee’s fees 8 9

(c) Other expenses:Audit fee 7 7Professional fees 2 3Safe custody charges 2 2Printing & stationery 1 2

12 14

Total expenses 37 41

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Note 7 Taxation 15/05/19 15/05/18 £000 £000

(a) Analysis of tax charge for the year

Overseas withholding tax 31 57

Total taxation (Note 7 (b)) 31 57

(b) Factors affecting the tax charge for the year

The tax assessed for the year is lower than that calculated when the standardrate of corporation tax for Authorised Unit Trusts is applied to total revenuereturn. The differences are explained below:

Net revenue before taxation 5,066 5,100

Corporation tax at 20% (15/05/18: 20%) 1,013 1,020 Effects of:Revenue not subject to taxation (1,016) (1,022)Current year expenses not utilised 3 2Overseas withholding tax 31 57

Total tax charge for the year (Note 7(a)) 31 57

Authorised Unit Trusts are exempt from tax on capital gains in the UK.

(c) Provision for deferred taxation

At 15 May 2019 the Fund had a potential deferred tax asset of £9,498(15/05/18: £6,831) in relation to surplus management expenses of £47,492(15/05/18: £34,157). It is unlikely that the Fund will generate sufficient taxableprofits in the future to utilise these expenses and, therefore, no deferred tax assethas been recognised in the year or the prior year.

Note 8 DistributionsThe distributions take account of amounts added on the issue of units andamounts deducted on the cancellation of units, and comprise:

15/05/19 15/05/18 £000 £000

Interim 2,598 2,219Final 2,389 2,707

4,987 4,926

Amounts deducted on cancellation of units 111 157

Amounts added on issue of units (45) (22)

Net distribution for the year 5,053 5,061

Net revenue after taxation 5,035 5,043Expenses taken to capital 19 20Tax relief taken to capital (1) (2)

Net distribution for the year 5,053 5,061

Details of the distribution per unit are set out in the tables on page 24.

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Note 9 Debtors 15/05/19 15/05/18 £000 £000

Sales awaiting settlement 27 –Accrued income 1,003 1,035Overseas tax recoverable 33 19

Total debtors 1,063 1,054

Note 10 Cash and bank balances 15/05/19 15/05/18 £000 £000

Cash and bank balances 44 45

Note 11 Other creditors 15/05/19 15/05/18 £000 £000

Cancellations awaiting settlement – 117Purchases awaiting settlement 69 –Manager’s periodic charge payable 3 1Trustee’s fees payable 2 1Audit fee payable 7 7

Total other creditors 81 126

Note 12 Reconciliation of units Class ‘B’ Income

Opening units issued at 16/05/18 98,310,714Unit movements in year:

Units issued 4,632,460 Units cancelled (8,825,463)

Closing units at 15/05/19 94,117,711

Note 13 Contingencies and commitmentsAt 15 May 2019 the Fund had no outstanding calls on partly paid shares, nopotential underwriting commitments or any other contingent liabilities(15/05/18: £nil).

Note 14 StocklendingThe total value of securities on loan at the Balance sheet date was £1,866,618(15/05/18: £1,958,666). Collateral was held in the following form:

15/05/19 15/05/18 £000 £000

Government bonds 525 2,205UK Equities 1,605 –

2,130 2,205

The gross earnings and fees paid for the year were £15,065 (15/05/18: £36,641)and £2,712 (15/05/18: £6,595) respectively.

20


Note 14 Stocklending (continued)

The gross earnings were split by the lending agent as follows

• 82% to the Lender (PUTM Bothwell UK Equity Income Fund)

• 8% to the Manager (Phoenix Unit Trust Managers Limited)

• 10% retained by the Lending Agent (eSec)

The counterparties for the securities on loan are shown in the appendix on pages 30and 31.

Note 15 Related party transactionsThe Manager is a related party to the Fund by virtue of its controllinginfluence.

The Manager is part of the Phoenix Group. Phoenix Life Limited which is alsopart of the Phoenix Group, is a material unitholder in the Fund and therefore arelated party, holding 100% of the units at the year end (15/05/18: 100%).

Manager's periodic charge paid to the Manager, Phoenix Unit Trust ManagersLimited, (and registration fees paid to Standard Life Investments (MutualFunds) Limited) or its associates are shown in Note 6(a) and details of theunits issued and cancelled by the Manager are shown in the Statement ofchange in net assets attributable to unitholders and Note 8.

Any balances due to/from the Manager or its associates at 15 May 2019 inrespect of these transactions are shown in Notes 9 and 11.

Note 16 Financial instrumentsIn accordance with the investment objective, the Fund holds certain financialinstruments. These comprise:

• securities held in accordance with the investment objective and policies;

• derivative transactions which the Fund may also enter into, the purpose of which is to manage the currency and market risks arising from the Fund’s investment activities; and

• cash and short term debtors and creditors arising directly from operations.

Counterparty exposureThere was no counterparty exposure held at the year end.

21


Note 16 Financial instruments (continued)

Currency exposureAn analysis of the monetary assets and liabilities at the year end is shown below: Net currency assets Net currency assets 15/05/19 15/05/18

Currency Monetary Non- Total Monetary Non- Total exposure monetary exposure exposure monetary exposure exposure exposure £000 £000 £000 £000 £000 £000

Sterling (1,691) 103,114 101,423 (2,200) 124,477 122,277

Euro 42 – 42 70 – 70

US Dollar 286 – 286 396 – 396

(1,363) 103,114 101,751 (1,734) 124,477 122,743

Income received in other currencies is converted to Sterling on or near the date of receipt. The Fund does nothedge or otherwise seek to avoid, movement risk on accrued income.

Interest profileAt the year end date, 0.60% (15/05/18: 1.54%) of the Fund's net assets by value were interest bearing.Interest rates earned/paid on deposits are earned/paid at a rate linked to LIBOR (London Interbank OfferedRate) or international equivalent.

Sensitivity analysisInterest rate risk sensitivityAs the majority of the Fund’s financial assets are non-interest bearing, the Fund is only subject to limitedexposure to fair value interest rate risk due to fluctuations in levels of market interest rates and therefore, nosensitivity analysis has been provided.

Foreign currency risk sensitivityAs the majority of the Fund’s financial assets are in the base currency of the Fund (Sterling), the Fund is onlysubject to limited exposure to fluctuations in foreign currency and therefore, no sensitivity analysis has beenprovided.

Price risk sensitivityA five percent increase in the value of the Fund’s portfolio would have the effect of increasing the return and netassets by £5,087,550 (15/05/18: £6,137,150). A five percent decrease would have an equal and opposite effect.

22


Note 17 Fair value of investmentsThe fair value of the Fund’s investments has been determined using the hierarchy below. This complies withthe 'Amendments to FRS102 - Fair value hierarchy disclosures' issued by the Financial Reporting Council inMarch 2016.

Level 1 The unadjusted quoted price in an active market for identical assets or liabilities that the entity canaccess at the measurement date.

Level 2 Inputs other than quoted prices included within Level 1 that are observable (i.e. developed usingmarket data) for the asset or liability, either directly or indirectly.

Level 3 Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

For the year ended 15/05/19Level 1 2 3 TotalInvestment assets £000 £000 £000 £000Equities 102,548 – – 102,548Money markets 566 – – 566

103,114 – – 103,114

For the year ended 15/05/18Level 1 2 3 TotalInvestment assets £000 £000 £000 £000Equities 122,632 – – 122,632Money markets 1,845 – – 1,845

124,477 – – 124,477

Note 18 Portfolio transaction costsFor the year ended 15/05/19

Other TotalValue Commission Taxes expenses costs

Analysis of total purchases costs £000 £000 % £000 % £000 % £000

Equity transactions 33,683 21 0.06 150 0.45 – – 33,854Money markets 23,405 – – – – – – 23,405Corporate actions 420 – – – – – – 420Total 57,508 21 150 – 57,679


Analysis of total purchases costs £000 £000 % £000 % £000 % £000

Equity transactions 38,055 (25) (0.07) – – – – 38,030Money markets 24,684 – – – – – – 24,684

Total 62,739 (25) – – 62,714

Commission and taxes as % of average net assets:Commission 0.04%Taxes 0.14%

23

Note 18 Portfolio transaction costs (continued)For the year ended 15/05/18


Analysis of total purchases costs £000 £000 % £000 % £000 % £000Equity transactions 20,157 14 0.07 91 0.45 – – 20,262Money markets 18,645 – – – – – – 18,645

Total 38,802 14 91 – 38,907


Analysis of total sales costs £000 £000 % £000 % £000 % £000Equity transactions 26,880 (22) (0.08) – – – – 26,858Money markets 20,394 – – – – – – 20,394Corporate actions 150 – – – – – – 150

Total 47,424 (22) – – 47,402

Commission and taxes as % of average net assets:Commission 0.03%Taxes 0.07%

The purchases and sales of securities incurred no direct transaction costs during the year or prior year.

Portfolio transaction costs are incurred by the Fund when buying and selling underlying investments. Thesecosts vary depending on the class of investment, country of exchange and method of execution.

These costs can be classified as either direct or indirect transaction costs:

Direct transaction costs: Broker commissions, fees and taxes.

Indirect transaction costs: “Dealing spread” - the difference between buying and selling prices of the underlyinginvestments.

At the Balance sheet date the portfolio dealing spread was 0.10% (15/05/18: 0.05%) being the differencebetween the respective bid and offer prices for the Fund's investments.


24

Dividend distributionsInterim distribution in pence per unitGroup 1: units purchased prior to 16 May 2018

Group 2: units purchased 16 May 2018 to 15 November 2018 2019 2018 pence pence per unit per unit Net paid paid income Equalisation 15 Jan 15 Jan

Class ‘B’ Income

Group 1 2.6985 — 2.6985 2.1955Group 2 1.2845 1.4140 2.6985 2.1955

Final distribution in pence per unitGroup 1: units purchased prior to 16 November 2018Group 2: units purchased 16 November 2018 to 15 May 2019 2019 2018 pence pence per unit per unit Net payable paid income Equalisation 15 Jul 15 Jul

Class ‘B’ Income

Group 1 2.5378 — 2.5378 2.7539Group 2 2.1370 0.4008 2.5378 2.7539

EqualisationThis applies only to units purchased during the distribution period (Group 2 units). Itis the average amount of revenue included in the purchase price of all Group 2 unitsand is refunded to the holders of these units as a return of capital. Being capital it isnot liable to income tax but must be deducted from the cost of the units for capitalgains tax purposes.

Distribution tablesFor the year ended 15 May 2019

25

Responsibilities of the manager and the trusteea) The Manager of the Fund is required by the Financial Conduct Authority’s Collective

Investment Schemes Sourcebook (‘the Sourcebook’) to prepare financial statementsfor each annual accounting period which give a true and fair view of the financialposition of the Fund at the end of that period and the net revenue or expense andthe net gains or losses on the property of the Fund for the period then ended.

In preparing these financial statements, the Manager is required to:

• select suitable accounting policies and then apply them consistently;• make judgements and estimates that are prudent and reasonable;• state whether applicable accounting standards have been followed subject to

any material departure disclosed and explained in the financial statements; and• prepare the financial statements on the basis that the Fund will continue in

operation unless it is inappropriate to presume this.

The Manager is also required to manage the Fund in accordance with the TrustDeed, the Prospectus and the Sourcebook, maintain proper financial records toenable them to ensure that the financial statements comply with the Statement ofRecommended Practice for Authorised Funds as issued by the IA in May 2014(amended June 2017) and the Sourcebook and take reasonable steps for theprevention and detection of fraud and other irregularities.

b) The Depositary in its capacity as Trustee of the PUTM Bothwell UK Equity IncomeFund must ensure that the Trust is managed in accordance with the FinancialConduct Authority's Collective Investment Schemes Sourcebook, the FinancialServices and Markets Act 2000, as amended, (together ‘the Regulations’), the TrustDeed and Prospectus (together ‘the Scheme documents’) as detailed below.

The Depositary must in the context of its role act honestly, fairly, professionally,independently and in the interests of the Trust and its investors.

The Depositary is responsible for the safekeeping of all custodial assets andmaintaining a record of all other assets of the Trust in accordance with theRegulations.

The Depositary must ensure that:

• the Trust’s cash flows are properly monitored and that cash of the Trust is booked in cash accounts in accordance with the Regulations;

• the sale, issue, repurchase, redemption and cancellation of units are carried out in accordance with the Regulations;

• the value of units of the Trust are calculated in accordance with the Regulations;• any consideration relating to transactions in the Trust’s assets is remitted to the

Trust within the usual time limits;• the Trust’s income is applied in accordance with the Regulations; and• the instructions of the Authorised Fund Manager (‘the AFM’), which is the

UCITS Management Company, are carried out (unless they conflict with the Regulations).

The Depositary also has a duty to take reasonable care to ensure that the Trust ismanaged in accordance with the Regulations and the Scheme documents of theTrust in relation to the investment and borrowing powers applicable to the Trust.

26

Trustee’s report and directors’ statement

Report of the Trustee to the Unitholders of the PUTM Bothwell UK EquityIncome Fund for the period from 16 May 2018 to 15 May 2019

Having carried out such procedures as we considered necessary to discharge ourresponsibilities as Depositary of the Trust, it is our opinion, based on the informationavailable to us and the explanations provided, that, in all material respects the Trust,acting through the AFM:

(i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Trust’s units and the application of the Trust’s income in accordance with the Regulations and the Scheme documents of the Trust; and

(ii) has observed the investment and borrowing powers and restrictions applicable to the Trust in accordance with the Regulations and the Scheme documents of the Trust.

London HSBC Bank plc19 August 2019

Directors’ statementIn accordance with the requirements of the Collective Investment Schemes Sourcebookas issued and amended by the Financial Conduct Authority, we hereby certify the reporton behalf of the Directors of Phoenix Unit Trust Managers Limited.

Birmingham Craig Baker, Director19 August 2019 Andrew Moss, Director

27

OpinionWe have audited the financial statements of the PUTM Bothwell UK Equity Income Fund(“the Fund”) for the year ended 15 May 2019 which comprise the Statement of TotalReturn, the Statement of Change in Net Assets attributable to Unitholders, the BalanceSheet, the Distribution Tables and the related Notes 1 to 18, including a summary ofsignificant accounting policies. The financial reporting framework that has been applied intheir preparation is applicable law and United Kingdom Accounting Standards (UnitedKingdom Generally Accepted Accounting Practice) including FRS 102 ‘The FinancialReporting Standard applicable to the UK and Republic of Ireland’.

In our opinion, the financial statements:

• give a true and fair view of the financial position of the Fund as at 15 May 2019and of the net revenue and the net capital losses on the scheme property of theFund for the year then ended; and

• have been properly prepared in accordance with United Kingdom GenerallyAccepted Accounting Practice including FRS 102 ‘The Financial Reporting Standardapplicable to the UK and Republic of Ireland’.

Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (UK)(ISAs (UK)) and applicable law. Our responsibilities under those standards are furtherdescribed in the Auditor’s responsibilities for the audit of the financial statements sectionof our report below. We are independent of the Fund in accordance with the ethicalrequirements that are relevant to our audit of the financial statements in the UK,including the FRC’s Ethical Standard, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which theISAs (UK) require us to report to you where:

• the Manager’s use of the going concern basis of accounting in the preparation ofthe financial statements is not appropriate; or

• the Manager has not disclosed in the financial statements any identified materialuncertainties that may cast significant doubt about the Fund’s ability to continue toadopt the going concern basis of accounting for a period of at least twelve monthsfrom the date when the financial statements are authorised for issue.

Independent auditor’s report to the unitholdersof the PUTM Bothwell UK Equity Income Fund

28


Other information The other information comprises the information included in the Annual Report otherthan the financial statements and our auditor’s report thereon. The Manager isresponsible for the other information.

Our opinion on the financial statements does not cover the other information and, exceptto the extent otherwise explicitly stated in this report, we do not express any form ofassurance conclusion thereon. In connection with our audit of the financial statements,our responsibility is to read the other information and, in doing so, consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If weidentify such material inconsistencies or apparent material misstatements, we arerequired to determine whether there is a material misstatement in the financialstatements or a material misstatement of the other information. If, based on the work wehave performed, we conclude that there is a material misstatement of the otherinformation, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the rules of the Collective InvestmentSchemes Sourcebook of the Financial Conduct AuthorityIn our opinion:

• the financial statements have been properly prepared in accordance with theStatement of Recommended Practice relating to Authorised Funds, the rules of theCollective Investment Schemes Sourcebook of the Financial Conduct Authority andthe Trust Deed;

• the information given in the Manager’s report for the financial year for which thefinancial statements are prepared is consistent with the financial statements; and

• there is nothing to indicate that proper accounting records have not been kept orthat the financial statements are not in agreement with those records.

Matters on which we are required to report by exception We have nothing to report in respect of the following matter in relation to which theCollective Investment Schemes Sourcebook of the Financial Conduct Authority rulesrequires us to report to you if, in our opinion:

• we have not received all the information and explanations which, to the best of ourknowledge and belief, are necessary for the purposes of our audit.

Responsibilities of the Manager As explained more fully in the Manager’s responsibilities statement set out on page 25 ,the Manager is responsible for the preparation of the financial statements and for beingsatisfied that they give a true and fair view, and for such internal control as the Managerdetermines is necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error.

In preparing the financial statements, the Manager is responsible for assessing theFund’s ability to continue as a going concern, disclosing, as applicable, matters relatedto going concern and using the going concern basis of accounting unless the Managereither intends to liquidate the Fund or to cease operations, or has no realistic alternativebut to do so.

29

Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud orerror, and to issue an auditor’s report that includes our opinion. Reasonable assurance isa high level of assurance, but is not a guarantee that an audit conducted in accordancewith ISAs (UK) will always detect a material misstatement when it exists. Misstatementscan arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements islocated on the Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our reportThis report is made solely to the unitholders of the Fund, as a body, pursuant toParagraph 4.5.12 of the rules of the Collective Investment Schemes Sourcebook of theFinancial Conduct Authority. Our audit work has been undertaken so that we might stateto the unitholders of the Fund those matters we are required to state to them in anauditor’s report and for no other purpose. To the fullest extent permitted by law, we donot accept or assume responsibility to anyone other than the Fund and the unitholders ofthe Fund as a body, for our audit work, for this report, or for the opinions we haveformed.

Ernst & Young LLPStatutory AuditorEdinburgh

19 August 2019

Notes:

1. The maintenance and integrity of the Phoenix Unit Trust Managers Limited web site is theresponsibility of the Manager; the work carried out by the auditors does not involve consideration ofthese matters and, accordingly, the auditors accept no responsibility for any changes that may haveoccurred to the financial statements since they were initially presented on the web site.

2. Legislation in the United Kingdom governing the preparation and dissemination of financialstatements may differ from legislation in other jurisdictions.


30

Appendix (unaudited)

The Fund carried out stock lending activities for the purpose of efficient portfolio managementand in order to generate income.

Revenue earned from these activities is shown in the Statement of Total Return.

Global DataAmount of securities and commodities on loan % of total lendable assets*

Securities 1.81

Amount of assets engaged in each type of SFT

Amount of assets % of AUM

1,866,618 1.83

* Total lendable assets excludes cash and cash equivalents. It also excludes other monetary amounts such asnet debtors and creditors which are not deemed ‘lendable assets’.

Concentration DataTop ten collateral issuers (across all SFT) Collateral Fair valueIssuer Holding £000

French Government 6.0% 25/10/2025 423,280 525easyJet 7,500 75British American Tobacco 2,610 75Associated British Foods 2,982 753i Group 7,187 75National Grid 8,821 75WPP 7,876 75Barratt Developments 12,306 75SSE 6,753 75BHP Group 4,292 75

All counterparties Gross volume of outstanding transactions Fair valueCounterparty £000

Bank of Nova Scotia (London Branch) 1,427JP Morgan Securities plc 440

31

Appendix (unaudited)

Aggregate DataType and quality of collateral Fair valueType Quality* £000

Equities n/a 1,605Bonds Investment grade 525

2,130

* Quality of collateral has been interpreted as pertaining to bond instruments, which have been assessed andreported in accordance with whether they are considered investment grade, below investment grade or not-rated.

Maturity tenor of collateral Fair valueMaturity £000

Rolling Maturity 2,130

2,130

Currency of collateral Fair valueCurrency £000

US Dollar 2,130

2,130

Maturity tenor of SFTs Fair valueMaturity £000

Rolling Maturity 1,867

1,867

Country in which counterparties are established

Counterparty

All counterparties are UK based

Return and cost Gross return Cost % of overall Net return £000 £000 returns £000

Fund 15 3 82.00 12

15 3 12

The gross earnings were split by the lending agent as follows: • 82% to the Lender (PUTM Bothwell UK Equity Income Fund) • 8% to the Manager (Phoenix Unit Trust Managers Limited) • 10% retained by the Lending Agent (eSec)

32

Corporate information (unaudited)

The information in this report is designed to enable unitholders to make an informed judgement on the activitiesof the Fund during the period it covers and the results of those activities at the end of the year.

Phoenix Unit Trust Managers Limited is part of the Phoenix Group.

Ignis Investment Services Limited is part of the Standard Life Aberdeen plc group and its subsidiaries.

Unit prices appear daily on our website www.phoenixunittrust.co.uk.

Administration & Dealing: 0345 584 2803 (between the hours of 9am & 5pm).

RemunerationThe Manager has adopted a remuneration policy, up-to-date details of which can be found onwww.phoenixunittrust.co.uk. This statement describes how remuneration and benefits are calculated andidentifies the committee which oversees and controls this policy. A paper copy of these details can be requestedfree of charge from the Manager.

This statement fulfils Phoenix Unit Trust Managers Limited’s (‘the Manager’) obligations as an authorised UCITSManager in respect of compliance with the UCITS V Remuneration Code and contains relevant remunerationdisclosures.

PUTM Unit Trusts are managed by Phoenix Unit Trust Managers Limited, which is a subsidiary of Phoenix LifeLimited, part of The Phoenix Group plc (‘the Group’).

The Remuneration Committee (‘the Committee’) of the Group has established a Remuneration Policy whichapplies to all entities of the Group. The guiding principles of this policy ensure sound and effective riskmanagement so as not to encourage risk-taking outside of the Group’s risk appetite, and support managementin the operation of their business through identification of minimum control standards and key controls. TheCommittee approves the list of UCITS Code Staff annually and identified UCITS Code Staff are annually notifiedof their status and the associated implications.

Further information on the Group Remuneration Policy can be found in the Group annual reports and accountswhich can be found on www.phoenixgroup.com.

The below table provides detail of remuneration provided, split between fixed and variable remuneration, forUCITS Code Staff (defined as all staff whose professional activities have material impact on the risk profiles ofthe fund it manages).

As at 31 December 2018 Headcount Total remuneration

Phoenix Unit Trust Managers 2 39,675.21of whichFixed Remuneration 2 30,603.21Variable Remuneration 1 9,072.00Carried Interest n/a

Highest paid Director's Remuneration 24,675.21

33


The Directors are employed by fellow entities of the Group. The total compensation paid to the Directors of theManager is in respect of services to the Manager, irrespective of which entity within the Phoenix Group has paidthe compensation.

Please note that due to the employment structure and resourcing practices of the Group, the staff indicated inthis table may also provide services to other companies in the Group.

The table states the actual number of employees who are fully or partly involved in the activities of theManager, no attempt has been made to apportion the time spent specifically in support of each fund as thisdata is not captured as part of the Manager’s normal processes.

The remuneration disclosed is the total remuneration for the year and has been apportioned between theprovisions of services to the Manager and not the fund.

Total remuneration can include any of the following;

• Fixed pay and annual/long term incentive bonuses.

• Where fixed pay is directly attributable to PUTM Unit Trusts (for example, fees for Phoenix Unit TrustManagers Limited), 100% of those fees.

• For other individuals, pro-rated using the average AUM of PUTM Unit Trusts (as a proportion of theaggregate average AUM of The Phoenix Group plc) as proxy.

Senior Management includes – PUTM Board and PUTM Executive Committees.

Other Code Staff includes all other UCITS Code Staff not covered by the above.

RisksThe price of units and the revenue from them can go down as well as up and investors may not get back theamount they invested, particularly in the case of early withdrawal. Tax levels and reliefs are those currentlyapplicable and may change. The value of any tax relief depends on personal circumstances.

Management charges on some funds are charged to capital and therefore a reduction in capital may occur.

Depending on the fund, the value of your investment may change with currency movements.

34


Investment AdviserIgnis Investment Services Limited1 George StreetEdinburgh EH2 2LLRegistered in Scotland – No.SC101825Authorised and regulated by the Financial ConductAuthority.

Trustee HSBC Bank plc1-2 Lochside WayEdinburgh ParkEdinburgh EH12 9DTAuthorised by the Prudential Regulation Authorityand regulated by the Financial Conduct Authority andthe Prudential Regulation Authority.

Independent AuditorErnst & Young LLPAtria One144 Morrison StreetEdinburgh EH3 8EX

Authorised statusThis Fund is an Authorised Unit Trust scheme undersection 243 of the Financial Services & Markets Act2000 and is categorised under the CollectiveInvestment Schemes Sourcebook as a UCITS fund.

ManagerPhoenix Unit Trust Managers Limited (PUTM)1 Wythall Green WayWythallBirmingham B47 6WGTel: 0345 584 2803Registered in England – No.03588031Authorised and regulated by the Financial Conduct Authority.

DirectorsAndrew Moss PUTM Director, Chief Executive

Phoenix Life;

Craig Baker PUTM Director, Head of InvestmentManagement Phoenix Life;

Mike Urmston Non Executive Director of PUTM;

Nick Poyntz-Wright Non Executive Director of PUTM(appointed 6 July 2018).

Registrar and correspondence addressPhoenix Unit Trust Managers LimitedFloor 1, 1 Grand Canal SquareGrand Canal HarbourDublin 2IrelandAuthorised and regulated by the Financial Conduct Authority.

35

Notes

36

Notes

B548.05.19

Telephone calls may be monitored and/or recorded for the purposes of security, internal training, accurate accountoperation, internal customer monitoring and to improve the quality of service.

Please note the Key Investor Information Document (KIID), the supplementary Information Document (SID) and thefull prospectus are available free of charge. These are available by contacting Client Services on 0345 584 2803.

Phoenix Unit Trust Managers Limited does not accept liability for any claims or losses of any nature arising directlyor indirectly from use of the data or material in this report. The information supplied is not intended to constituteinvestment, tax, legal or other advice.

Phoenix Unit Trust Managers Limited* is a Phoenix Group Company. Registered in England No 3588031.Registered office: 1 Wythall Green Way, Wythall, Birmingham B47 6WG.*Authorised and regulated by the Financial Conduct Authority.

Contact: Client ServicesCall: 0345 584 2803Correspondence Address: Floor 1, 1 Grand Canal Square, Grand Canal Harbour, Dublin 2, IrelandVisit: phoenixunittrust.co.uk