PHOENIX UNIT TRUST MANAGERS MANAGER’S ANNUAL REPORT

PHOENIX UNIT TRUST MANAGERS

MANAGER’S ANNUAL REPORTFor the year: 16 May 2015 to 15 May 2016

PUTM BOTHWELL UK EQUITY INCOME FUND

Investment review* 2-3

Portfolio of investments* 4-7

Top ten purchases and sales 8

Statistical information* 9-11

Statements of total return & change in net assets attributable to unitholders 12

Balance sheet 13

Notes to the financial statements 14-24

Distribution tables 25

Responsibilities of the manager and the trustee 26

Trustee’s report and directors’ statement 27

Independent auditor’s report 28-29

Corporate information* 30-31

*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 2016.

Performance Review

The Fund returned -8.3% over the review period.(Source: HSBC, Gross of AMC, GBP, based upon themovement in the Cancellation Price for 12 months to15/05/16). This is compared to a return of -7.8% by itsbenchmark index. (Source: Datastream, FTSE All ShareEx IT (excluding income)* for 12 months to 15/05/16).

In the table below, you can see how the Fund performedagainst its benchmark index over the last five discreteone-year periods.

Investment review

Source: Fund performance is HSBC, Gross of AMC, GBP, based upon the movement in the Cancellation Price to 15May for each year. Benchmark Index performance is Datastream, FTSE All Share Ex IT (excluding income)* to 15 Mayfor each year. The Fund’s benchmark changed from the FTSE All Share Index to the FTSE All Share Ex IT Index on31/12/09.

* All Bothwell performance should be reported including income because the Fund benchmark includes income.However the PUTM Bothwell UK Equity Income Fund is special as the price record is used to calculate performance.All of the Bothwell Funds with the exception of the PUTM Bothwell UK Equity Income Fund have Accumulation Unitprices available. These prices are based on NAV which has income reinvested. However, the PUTM Bothwell UKEquity Income Fund has only Income units available as the income from the holdings is distributed to the unitholders.As a result, when performance is calculated from the price the income is artificially reinvested by adding it back intothe NAV.

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.

Standardised Past Performance

PUTM Bothwell UK Equity Income Fund -8.3 14.4 10.4 26.9 -6.4

Benchmark Index -7.8 7.2 6.8 29.5 -5.2

May 15-16 May 14-15 May 13-14 May 12-13 May 11-12% growth % growth % growth % growth % growth

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Portfolio and Market Review

It was a volatile 12 months for UK equities. US interestrate speculation, Chinese growth concerns,macroeconomic uncertainty and geopolitical tensionsmeant the risk-on/risk-off fluctuations of previous yearscontinued. Furthermore, the impending Brexit referendumbrought another layer of uncertainty to the UK market asthe period drew to a close.

Early in the review period, our overweight position inGlencore was negative as it underperformed givendowngrades from weaker commodity prices and concernover the strength of the balance sheet. The companysubsequently cut the dividend. GKN alsounderperformed given concern the current slowdown inChina’s car sales will impact profitability. However, ourposition in International Consolidated Airlines performedwell as it continued to benefit from the ongoing low oilprice. We bought ARM in the technology sector. Thebusiness is exposed to growth in smart phones and thevaluation looked historically low. Other purchasesincluded Imperial Tobacco and Lloyds.

As the period progressed, our position in DixonsCarphone performed well as the company continued tosee earnings upgrades from merger benefits and thestore consolidation programme. Rightmove, the propertyportal, also performed well as it continued to enjoy therecovery in the UK housing market. This boosts theprofitability of its estate agency customers whichfacilitates future price rises. However, our position inClose Brothers struggled as its trading updatehighlighted continued difficulties with its market-makersubsidiary Winterflood Securities and a hint of marginattrition in their lending business, although the latterpoint was largely offset by better bad debts. We openedsome new positions at this time, including Unite wherewe expect good rental growth given the shortage ofstudent accommodation. We also took a holding in Petsat Home in expectation of structural growth in UK petspending.

As the period drew to a close, our overweight position inNext was negative as the retailer announced a verynegative outlook statement with its results. Similarly,Restaurant Group, the owner of Frankie and Benny’s

and Chiquitos, also underperformed after announcing atougher outlook with results. In particular, there isincreasing competition in the sector and the new livingwage will impact returns. However, not owning RBS andStandard Chartered, and being underweight Barclays,was positive as they underperformed given concern overthe impact of higher credit spreads. In addition, they arefacing ongoing regulatory risk and conduct costs.

Market Outlook and Fund Strategy

Recently, certain market themes have developed. Lower-for-longer bond yields have had the effect of boostingdefensive sectors such as consumer staples, takingvaluations to extreme levels. The weaker dollar hashelped the resources sector to rebound sharply. Politicaluncertainty in the UK has hit UK domestic stocks in therun up to the ‘in/out’ vote on EU membership. As aresult, sector performance can be linked to marketthemes that may turn out to be quite fleeting. In the past,we have found that our stock level analysis has tended toidentify interesting opportunities during these periods ofmarket dislocation.

Given the backdrop of subdued global GDP growth,political uncertainty in the US and UK, low interest rates,low inflation, market volatility and market liquidityconcerns, it is understandable that investors arestruggling to find conviction across all asset classes.

The headline dividend yield of the UK equity marketappears attractive relative to other asset classes – in fact,the gap between dividend yields and bond yields is nowback to extreme levels, providing the ‘yield compression’conditions for a pick-up in stocks with attractive income.However, investors need to be wary of dividend cutsspreading across large-cap sectors, including mining, oil& gas, banks, utilities and food retailers. We continue toidentify businesses with strong cashflow and earningsthat can support growing dividends.

Investment review

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Portfolio of investments

Investments held at 15 May 2016 Market Percentage of value total net assets Holding Investment £000 %

UK Equities (15/05/15 – 87.50%) 91.90 Aerospace & Defence (15/05/15 – 0.86%) 0.66 387,666 Senior 789 0.66

Automobiles & Parts (15/05/15 – 0.96%) 0.91 387,558 GKN 1,086 0.91

Banks (15/05/15 – 8.12%) 8.93 371,900 Barclays 615 0.52 1,339,526 HSBC Holdings 5,759 4.84 4,592,931 Lloyds Banking Group 3,049 2.56 433,824 Royal Bank of Scotland Group 915 0.77 55,312 Standard Chartered 280 0.24

Beverages (15/05/15 – 1.85%) 1.10 96,394 Britvic 697 0.59 32,251 Diageo 611 0.51

Construction & Materials (15/05/15 – 0.99%) 2.28 286,577 Ibstock 595 0.50 78,880 Kier Group 917 0.77 108,869 Marshalls Group 356 0.30 277,069 Polypipe Group 849 0.71

Electronic & Electrical Equipment (15/05/15 – 0.87%) 0.00

Financial Services (15/05/15 – 4.96%) 3.06 105,139 Close Brothers Group 1,242 1.04 50,605 Hargreaves Lansdown 640 0.54 70,616 IG Group Holdings 530 0.45 253,393 Investec 1,221 1.03

Fixed Line Telecom (15/05/15 – 2.94%) 3.08 832,868 BT Group 3,666 3.08

Food & Drug Retailers (15/05/15 – 0.00%) 0.26 27,576 Greggs 303 0.26

Gas, Water & Multiutilities (15/05/15 – 3.41%) 5.34 449,796 Centrica 910 0.77 317,988 National Grid 3,210 2.70 169,648 Pennon Group 1,367 1.15 37,879 Severn Trent 853 0.72

General Retailers (15/05/15 – 4.61%) 3.86 408,219 Dixons Carphone 1,690 1.42 166,969 Inchcape 1,147 0.97 32,825 Next 1,753 1.47

General Industrials (15/05/15 – 0.00%) 1.53 93,751 RPC 709 0.60 288,145 Smith (David S) 1,107 0.93

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Healthcare Equipment & Services (15/05/15 – 0.52%) 0.65 66,365 Smith & Nephew 773 0.65

Household Goods (15/05/15 – 5.75%) 6.26 42,155 Bellway 1,052 0.88 61,214 Berkeley Group Holdings 1,800 1.51 103,695 Persimmon 2,032 1.71 37,450 Reckitt Benckiser 2,565 2.16

Industrial Engineering (15/05/15 – 1.12%) 1.51 217,991 Bodycote International 1,250 1.05 55,077 IMI 544 0.46

Industrial Transportation (15/05/15 – 0.80%) 0.71 442,681 BBA Group 839 0.71

Leisure Goods (15/05/15 – 0.00%) 0.45 223,695 Pets at Home Group 541 0.45

Life Insurance (15/05/15 – 8.73%) 6.48 400,861 Aviva 1,673 1.41 1,359,701 Legal & General 2,927 2.46 243,214 Prudential 3,106 2.61

Media (15/05/15 – 5.99%) 5.94 810,244 ITV 1,659 1.39 368,795 Moneysupermarket.com 1,147 0.96 134,718 RELX Group 1,661 1.40 44,333 Rightmove 1,735 1.46 92,888 Sky 867 0.73

Mining (15/05/15 – 3.71%) 2.23 80,616 BHP Billiton 663 0.56 4,316 Lonmin 7 0.01 99,449 Rio Tinto 1,981 1.66

Mobile Telecom (15/05/15 – 3.34%) 3.85 2,041,855 Vodafone Group 4,583 3.85

Non-Equity Investment Instruments (15/05/15 – 0.00%) 0.49 139,740 Jupiter Fund Management 585 0.49

Non-Life Insurance (15/05/15 – 2.20%) 3.50 558,357 Beazley 1,899 1.60 441,743 Direct Line Insurance Group 1,623 1.36 137,080 RSA Insurance Group 643 0.54

Oil & Gas Producers (15/05/15 – 8.57%) 8.28 1,084,597 BP 3,932 3.31 94,475 Cairn Energy 193 0.16 172,431 Royal Dutch Shell ‘A’ 2,975 2.50 158,855 Royal Dutch Shell ‘B’ 2,751 2.31

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Personal Goods (15/05/15 – 0.60%) 0.96 35,934 Unilever 1,137 0.96

Pharmaceuticals & Biotechnology (15/05/15 – 3.32%) 4.77 74,943 AstraZeneca 2,951 2.48 74,790 BTG 441 0.37 157,098 GlaxoSmithKline 2,282 1.92

Real Estate Investment Trusts (15/05/15 – 1.24%) 1.38 210,205 Great Portland Estates 1,646 1.38

Real Estate Investment & Services (15/05/15 – 1.06%) 1.51 168,980 Savills 1,283 1.08 79,345 Unite Group 508 0.43

Software & Computer Services (15/05/15 – 0.58%) 1.10 96,959 Just Eat 394 0.33 154,046 Sage Group 913 0.77

Support Services (15/05/15 – 5.79%) 3.91 91,183 Babcock International Group 874 0.74 90,866 Capita 978 0.82 205,298 Carillion 541 0.45 88,822 Essentra 718 0.60 318,679 Howden Joinery Group 1,543 1.30

Technology Hardware & Equipment (15/05/15 – 0.00%) 1.20 96,563 ARM Holdings 890 0.75 336,119 Imagination Technologies 539 0.45

Tobacco (15/05/15 – 3.38%) 4.77 65,199 British American Tobacco 2,753 2.31 77,494 Imperial Brands 2,923 2.46

Travel & Leisure (15/05/15 – 1.23%) 0.94 90,255 Greene King 752 0.63 112,891 National Express 367 0.31

European Equities (15/05/15 – 4.33%) 3.70 Travel & Leisure (15/05/15 – 4.33%) 3.70 558,905 International Consolidated Airlines 2,842 2.39 149,280 TUI 1,553 1.31

Canadian Equities (15/05/15 – 0.35%) 0.34 Media (15/05/15 – 0.35%) 0.34 227,661 Entertainment One 408 0.34

Channel Islands (15/05/15 – 5.08%) 4.53 Media (15/05/15 – 1.31%) 1.33 99,655 WPP 1,585 1.33

Mining (15/05/15 – 1.74%) 1.06 957,372 Glencore 1,255 1.06

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Oil Equipment & Services (15/05/15 – 0.81%) 0.90 132,356 Petrofac 1,066 0.90

Pharmaceuticals & Biotechnology (15/05/15 – 1.06%) 0.99 28,349 Shire 1,172 0.99

Travel & Leisure (15/05/15 – 0.16%) 0.25 16,114 Wizz Air Holdings 301 0.25

Isle of Man (15/05/15 – 0.00%) 0.54 Travel & Leisure (15/05/15 – 0.00%) 0.54 118,311 GVC Holdings 641 0.54

Money Markets (15/05/15 – 3.87%) 0.34 £408,184 Standard Life Investments Sterling Liquidity Fund Class ‘0’ GBP~ 408 0.34

Portfolio of investments 120,536 101.35 Net other liabilities (1,611) (1.35)

Net assets 118,925 100.00

All investments are listed on recognised stock exchanges and are “approved securities” within the meaning of the FCA rules unless otherwise stated.

~SICAVs (open ended investment schemes registered outside the UK).

Please note that the investments have been categorised into a more detailedsector level than in previous years. This sector level detail will be used forfuture financial statements. The comparatives have been updated accordingly.

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Purchases Cost £000Standard Life Investments Sterling LiquidityFund Class ‘0’ GBP* 22,822Lloyds Banking Group 3,889Bodycote International 1,310Royal Dutch Shell ‘B’ 1,165Smith (David S) 1,120Royal Bank of Scotland Group 1,067Centrica 1,014Unilever 988AstraZeneca 888ARM Holdings 887

Sales Proceeds £000Standard Life Investments Sterling Liquidity Fund Class ‘0’ GBP* 27,960St James’s Place 1,821London Stock Exchange Group 1,815Berkeley Group Holdings 1,630Hellermanntyton Group 1,619Barclays 1,588Provident Financial 1,536Travis Perkins 1,534International Consolidated Airlines 1,271Britvic 1,114

Total purchases 47,328 Total sales 54,745

Top ten purchases and salesFor the year ended 15 May 2016

*The Fund changed name on 2 June 2015. It was previously called Ignis Sterling Liquidity Fund.

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Statistical information

Comparative tables Class ‘B’ Income 15/05/16 15/05/15 15/05/14 pence pence penceChange in net assets per unit

Opening net asset value per unit 116.19 105.19 99.53

Return before operating charges* (9.73) 14.93 10.36Operating charges (0.04) (0.05) (0.04)

Return after operating charges* (9.77) 14.88 10.32Distributions on income units (4.20) (3.88) (4.66)

Closing net asset value per unit 102.22 116.19 105.19

*after direct transaction costs of: 0.14 0.33 0.67

PerformanceReturn after charges (8.41%) 14.15% 10.37%

Other informationClosing net asset value (£000) 118,925 143,429 134,536Closing number of units 116,340,985 123,445,691 127,894,582Operating charges 0.05% 0.04% 0.04%Direct transaction costs 0.13% 0.31% 0.65%

PricesHighest unit price (pence) 118.62 119.68 112.15Lowest unit price (pence) 95.55 99.36 90.95

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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 policy

The 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 pricing

Units of the Fund are available as Class ‘B’ Income units (where revenue is distributed tounitholders). There will be two potential distributions in each accounting year: an interimdistribution as at 15 November and a final distribution as at 15 May. At each distributionthe net revenue after deduction of expenses, arising in the preceding six months from theinvestments of the Fund is apportioned amongst the unitholders. Unitholders receive atax voucher giving details of the distribution and the Manager’s Report no later than twomonths 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 6 because funds of this type have experienced high rises andfalls in value in the past. Although this is a high risk ranking it is not the highest. Thefigure applies to the following unit classes:

• 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 2016

Statement of total return 15/05/16 15/05/15 Notes £000 £000 £000 £000

Income

Net capital (losses)/gains 4 (16,858) 13,713 Revenue 5 5,076 4,970

Expenses 6 (49) (55)

Interest payable and similar charges (1) –

Net revenue before taxation 5,026 4,915

Taxation 7 (27) (24)

Net revenue after taxation 4,999 4,891

Total return before distributions (11,859) 18,604

Distributions 8 (5,012) (4,893)

Change in net assets attributable to unitholders from investment activities (16,871) 13,711

Statement of change in net assets attributable to unitholders 15/05/16 15/05/15 £000 £000 £000 £000

Opening net assets attributable to unitholders 143,429 134,536

Amounts receivable on issue of units 5,769 6,443Amounts payable on cancellation of units (13,402) (11,261)

(7,633) (4,818)

Change in net assets attributable to unitholders from investment activities (16,871) 13,711

Closing net assets attributable to unitholders 118,925 143,429

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Balance sheet 15/05/16 15/05/15 Notes £000 £000 £000 £000

Assets:Fixed assets:Investments 120,536 145,046

Current assets:Debtors 9 1,119 1,036Cash and bank balances 10 43 22

Total current assets 1,162 1,058

Total assets 121,698 146,104

Liabilities: Creditors:Other creditors 11 (84) (52) Distribution payable (2,689) (2,623)

Total liabilities (2,773) (2,675)

Net assets attributable to unitholders 118,925 143,429

Annual financial statementsAs at 15 May 2016

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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,as modified by the revaluation of investments and in compliance with FRS102and in accordance with the Statement of Recommended Practice (2014SORP) for financial statements of Authorised Funds issued by The InvestmentAssociation in May 2014. This is the first set of final financial statements tobe prepared for the Fund under the 2014 SORP. Unless otherwise stated allaccounting policies are consistent with those of the prior year. Presentationalamendments to the Statement of total return, Statement of change in netassets attributable to unitholders and the Balance sheet have been made.Additionally, further disclosures have been made, including the Reconciliationof units note and the Fair value of assets and liabilities note. Thesepresentational amendments have no impact on the current or previous yearNet Asset Value.

(b) Valuation of investmentsThe listed investments of the Fund have been valued at bid dealing prices asat close of business, 13 May 2016 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 period end.

(c) Foreign exchangeTransactions in foreign currencies during the year are translated into Sterling atthe rates of exchange ruling on the transaction date. Amounts held in foreigncurrencies have been translated at the rate of exchange ruling at close ofbusiness, 13 May 2016.

(d) RevenueDividends receivable from equity investments and distributions receivable fromcollective investment schemes are credited to revenue when they are firstquoted ex-dividend. Interest receivable on bank deposits is accounted for onan accruals basis.Interest receivable from debt securities is accounted for on an effective interestrate basis. Accrued interest purchased or sold is excluded from the cost of thesecurity and is dealt with as revenue.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 dividends should be treated as revenue.

(f) Stock dividendsThe ordinary element of stocks received in lieu of cash is recognised asrevenue. Any excess in value of shares received over the amount of cashforgone would be treated as capital.

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Note 1 Accounting policies (continued)(g) Expenses

Expenses are accounted for on an accruals basis. Expenses of the Fund arecharged against revenue, except for stamp duty reserve tax and costsassociated with the purchase and sale of investments, which are charged tocapital.

(h) TaxationThe charge for taxation is based on taxable income for the year less allowableexpenses. UK dividends and franked distributions from UK collectiveinvestment schemes are disclosed net of any related tax credit. Overseasdividends, Unfranked distributions from UK collective investment schemesand distributions from overseas collective investment schemes are disclosedgross of any tax suffered, the tax element being separately disclosed in thetaxation note.

(i) 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 taxation is not recognised on permanent differences.Deferred tax assets are recognised only to the extent that the Managerconsiders it is more likely than not that there will be taxable profits from whichunderlying timing differences can 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 (asdefined by SI 2006/964, Reg 20) and where applicable will pay a dividenddistribution.

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

(c) Stock dividendsIt is the policy of the Fund, where applicable, to distribute the revenueelement of stock dividends.

(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 of investments are ultimately borne by capital.

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Note 3 Risk management policiesThe main risks arising from the Fund’s financial instruments are market pricerisk, interest rate risk, foreign currency risk, liquidity risk and counterpartyrisk. The Manager’s policies for managing these risks are summarised belowand have been applied throughout the year.

(a) Market price riskMarket price risk arises mainly from uncertainty about future prices offinancial instruments held. It represents the potential loss the Fund mightsuffer through holding market positions in the face of price movements. TheFund’s investment portfolio is exposed to market fluctuations which aremonitored by the Manager in pursuit of the investment objectives and policies.Adherence to investment guidelines and to investment and borrowing powersset out in the Trust Deed, the Prospectus and in the Collective InvestmentSchemes Sourcebook (“the Sourcebook”) mitigates the risk of excessiveexposure to any particular 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 positionswill be affected by fluctuations in interest rates. Interest rate risk is notconsidered significant.

(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,through reduced trading volumes, may affect the ability of the Fund to tradefinancial instruments at values previously indicated by financial brokers. Fromtime to time, liquidity may also be affected by stock specific or economicevents. To manage these risks the Manager performs market research in orderto achieve the best price for any transactions entered into on behalf of theFund. All stocks are valued daily but those stocks identified as being lessliquid are reviewed 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.

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Note 3 Risk management policies (continued)(f) Derivatives

Derivative transactions may be used by the Fund for the purposes of meetingits investment objective 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 thenet asset value of the Fund may at times have high volatility, althoughderivatives will not be used with the intention of raising the risk profile of theFund. Where derivatives are used for hedging this will not compromise the riskprofile of the Fund. Use of derivatives will not knowingly contravene anyrelevant investment objective or limits. There are no derivatives held at theyear end.

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

15/05/16 15/05/15 £000 £000

(Losses)/gains on non-derivative securities (17,093) 13,643Gains on derivative contracts – 82Currency losses – (9)Handling charges (1) (3)Capital special dividend 236 –

Net capital (losses)/gains (16,858) 13,713

Note 5 Revenue 15/05/16 15/05/15 £000 £000

UK dividends 4,509 4,396UK REIT property income distributions 19 30Overseas dividends 534 505Interest on debt securities – 17Stocklending commission – 2Bank interest – 2Liquidity interest 14 18

Total revenue 5,076 4,970

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Note 6 Expenses 15/05/16 15/05/15 £000 £000(a) Payable to the Manager or associates of the Manager

and agents of either of them:Manager’s periodic charge* 10 –

(b) Payable to the Trustee or associates of the Trustee and agents of either of them:Trustee’s fees 16 17

(c) Other expenses:Audit fee 7 7Safe custody charges 3 3Administration fee** 13 28

23 38

Total expenses 49 55

*Class ‘B’ units in the Fund had a 0% Manager’s charge up to 2 November2015. The Manager’s charge from then was 0.015% (2015: 0.00%).** Administration fees are no longer charged with effect from 2 November 2015.

Note 7 Taxation 15/05/16 15/05/15 £000 £000

(a) Analysis of tax charge for the year

Corporation tax – 3Overseas witholding tax 27 20Exchange p&l on tax reclaims – 1

Total current taxation (Note 7(b)) 27 24

(b) Factors affecting the tax charge for the yearThe 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 5,026 4,915

Corporation tax at 20% (2015: 20%) 1,005 983

Effects of:Revenue not subject to taxation (1,008) (980)Current year expenses not utilised 3 –Overseas witholding tax 27 20Exchange P&L on tax reclaims – 1

Current tax charge for the year (Note 7(a)) 27 24

Authorised Unit Trusts are exempt from tax on capital gains in the UK.Therefore, any capital return is not included in the above reconciliation.

(c) Provision for deferred taxationAt 15 May 2016 there are surplus management expenses of £17,000(2015: £nil).It is unlikely the Fund will generate sufficient taxable profits in the future toutilise this amount and therefore a deferred tax asset of £3,000 (2015: £nil)has not been recognised.

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

15/05/16 15/05/15 £000 £000

Interim 2,208 2,212Final 2,689 2,623

4,897 4,835

Amounts deducted on cancellation of units 153 88Amounts added on issue of units (38) (30)

Net distribution for the year 5,012 4,893

Net revenue after taxation 4,999 4,891Expenses taken to capital 13 3Tax relief taken to capital – (1)

Net distribution for the year 5,012 4,893

Details of the distributions per unit are set out in the tables on page 25.

Note 9 Debtors 15/05/16 15/05/15 £000 £000

Sales awaiting settlement – 119Accrued income 1,090 891Liquidity interest receivable – 1Overseas tax recoverable 29 25

Total debtors 1,119 1,036

Note 10 Cash and bank balances 15/05/16 15/05/15 £000 £000

Total cash and bank balances 43 22

Note 11 Creditors 15/0516 15/05/15 £000 £000

Cancellations awaiting settlement 75 29Management fee payable 1 –Trustee’s fees payable 1 2Audit fee payable 7 7Administration fee payable – 11Corporation tax payable – 3

Total creditors 84 52

Note 12 Reconciliation of units Class ‘B’ Income

Opening units issued at 16/05/15 123,445,691Unit movements in year:Units issued 5,340,419Units cancelled (12,445,125)

Closing units at 15/05/16 116,340,985

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Note 13 Contingencies and commitmentsAt 15 May 2016 the Fund had no outstanding calls on partly paid shares, nopotential underwriting commitments or any other contingent liabilities (2015: £nil).

Note 14 StocklendingThe total value of securities on loan at the Balance sheet date was £nil (2015:£nil). The gross earnings and fees paid for the year are £nil (2015: £2,986) and£nil (2015: £1,194).

Note 15 Related party transactionsThe Manager is a related party to the Fund by virtue of their controlling influence.

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 (15/05/15: 100%).

The Fund invests in the Standard Life Investments Sterling Liquidity Fund whichwas a related party to the Fund to 2 November 2015.

Manager’s periodic charge paid to the Manager, Ignis Fund Managers Limited (to2 November 2015) and Phoenix Unit Trust Managers Limited thereafter; or itsassociates, are shown in Note 6(a) and details of the units issued and cancelledby the Manager are shown in the Statement of change in net assets attributableto unitholders and Note 8. Any balances due to/from the Manager or itsassociates at 15 May 2016 in respect of these transactions are shown in Notes9 and 11.

Note 16 Financial instrumentsIn accordance with the investment objective, the Fund may hold 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’sinvestment activities; and

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

Currency exposureAn analysis of the monetary assets and liabilities at the year end is shownbelow:

Net currency assets Net currency assets 15/05/16 15/05/15

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

Sterling (1,755) 120,536 118,781 (1,890) 145,046 143,156 Euro 21 – 21 6 – 6Swiss Franc – – – 11 – 11US Dollars 123 – 123 256 – 256

(1,611) 120,536 118,925 (1,617) 145,046 143,429

Income received in other currencies is converted to Sterling on or near the date ofreceipt. The Fund does not hedge or otherwise seek to avoid movement risk onaccrued income.

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Note 16 Financial instruments (continued)Interest profileThe interest rate risk profile of financial assets and liabilities at 15 May 2016was:

Currency Floating rate Financial assets Totalfinancial assets not carrying interest

£000 £000 £000

Sterling 451 121,103 121,554Euro – 21 21US Dollar – 123 123

451 121,247 121,698

Currency Floating rate Financial liabilities Totalfinancial liabilities not carrying interest

£000 £000 £000

Sterling – (2,773) (2,773)

– (2,773) (2,773)

The interest rate risk profile of financial assets and liabilities at 15 May 2015was:Currency Floating rate Financial assets Total

financial assets not carrying interest£000 £000 £000

Sterling 5,568 140,263 145,831Euro – 6 6Swiss Franc – 11 11US Dollar – 256 256

5,568 140,536 146,104

Currency Floating rate Financial liabilities Totalfinancial liabilities not carrying interest

£000 £000 £000

Sterling – (2,675) (2,675)

– (2,675) (2,675)

Interest rates earned/paid on deposits are earned/paid at a rate linked to LIBOR(London Interbank Offered Rate) or international equivalent.

Sensitivity analysisInterest rate risk sensitivityAs the majority of the Fund’s financial assets are non-interest bearing, theFund is only subject to limited exposure to fair value interest rate risk due tofluctuations in levels of market interest rates.

Foreign currency risk sensitivityAs the majority of the Fund’s financial assets are in the base currency of theFund (Sterling), the Fund is only subject to limited exposure to fluctuations inforeign currency.

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Note 16 Financial instruments (continued)

Price risk sensitivityA five percent increase in the value of the Fund's portfolio would have the effect of increasing the return and net assets by £5,946,250 (15/05/15:£7,171,456). A five percent decrease would have an equal and opposite effect.

Note 17 Fair value of investmentsThe fair value of the Fund’s investments has been determined using the hierarchybelow.This complies with the ‘Amendments to FRS102 – Fair value hierarchydisclosures’ issued by the Financial Reporting Council in March 2016. Althoughnot required to be applied until accounting periods beginning on or after1 January 2017, the Manager has decided to apply this early.

Level 1 The unadjusted quoted price in an active market for identicalassets or liabilities that the entity can access at themeasurement date.

Level 2 Inputs other than quoted prices included within Level 1 that areobservable (i.e. developed using market data) for the asset orliability, either directly or indirectly.

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

For the year ended 15/05/16Level 1 2 3 Total

Investment assets £000 £000 £000 £000Equities 120,128 – – 120,128Money markets – 408 – 408

120,128 408 – 120,536

For the year ended 15/05/15Level 1 2 3 Total

Investment assets £000 £000 £000 £000Equities 139,500 – – 139,500Money markets – 5,546 – 5,5463

139,500 5,546 – 145,046

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Note 18 Portfolio transaction costs

For the year ended 15/05/16 Value Commission TaxesAnalysis of total purchases costs £000 £000 % £000 %

Equity transactions 23,263 25 0.11 112 0.48Money markets 22,822 – – – –Corporate actions 1,106 – – – –

Total 47,191 25 112

Value Commission TaxesAnalysis of total sales costs £000 £000 % £000 %

Equity transactions 26,417 (28) (0.11) – –Money markets 27,960 – – – –Corporate actions 396 – – – –

Total 54,773 (28) –

Commission and taxes as % of average net assets:Commission 0.04%Taxes 0.09%

For the year ended 15/05/15 Value Commission TaxesAnalysis of total purchases costs £000 £000 % £000 %

Equity transactions 113,202 43 0.04 317 0.28Corporate actions – – – – –

Total 113,202 43 317

Value Commission TaxesAnalysis of total sales costs £000 £000 % £000 %

Equity transactions 115,359 (63) (0.05) – –Corporate actions – – – – –

Total 115,359 (63) –

Commission and taxes as % of average net assets:Commission 0.07%Taxes 0.22%

Portfolio transaction costs are incurred by the Fund when buying and selling underlyinginvestments. These costs vary depending on the class of investment, country of exchangeand 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 sellingprices of the underlying investments.At the Balance sheet date the portfolio dealing spread was 0.06% (2015: 0.06%) beingthe difference between the respective bid and offer prices for the Fund’s investments.

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Note 19 Significant events during the periodPlease note the Manager of the Fund has changed from Ignis Fund ManagersLimited to Phoenix Unit Trust Managers Limited (PUTM) with effect from2 November 2015. As a result the Fund was re-named PUTM Bothwell UKEquity Income Fund.

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Interim distribution in pence per unitGroup 1: units purchased prior to 16 May 2015Group 2: units purchased between 16 May 2015 to 15 November 2015 2016 2015 pence pence Tax per unit per unit Gross credit Net paid paid income at 10% income Equalisation 15 Jan 15 Jan

Class ‘B’ Income

Group 1 2.0978 0.2098 1.8880 — 1.8880 1.7504Group 2 1.8728 0.1873 1.6855 0.2025 1.8880 1.7504

Final distribution in pence per unitGroup 1: units purchased prior to 16 November 2015Group 2: units purchased between 16 November 2015 to 15 May 2016 2016 2015 pence pence per unit per unit Net payable paid income* Equalisation 15 Jul 15 Jul

Class ‘B’ Income

Group 1 2.3113 — 2.3113 2.1250Group 2 1.5439 0.7674 2.3113 2.1250

*with effect from 6 April 2016 the tax credit on UK dividend income has beenabolished.

EqualisationEqualisation applies only to units purchased during the distribution period (Group 2units). It is the average amount of revenue included in the purchase price of all Group2 units and is refunded to the holders of these units as a return of capital. Beingcapital it is not liable to income tax but must be deducted from the cost of units forcapital gains tax purposes.

Distribution tablesFor the year ended 15 May 2016

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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 PUTM Bothwell UK Equity Income Fund at the end of that period andthe net revenue or expense and the net gains or losses on the property of the Fundfor 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 andthe Sourcebook and take reasonable steps for the prevention and detection of fraudand other irregularities.

b) The Trustee is under a duty to take into custody and to hold the property of the Fundin trust for the holders of units. Under the Sourcebook relating to Reports it is theduty of the Trustee to enquire into the conduct of the Manager in the management ofthe Fund in each annual accounting period and report thereon to unitholders in areport which shall contain the matters prescribed by the Sourcebook. A copy of theTrustee’s report is included on page 27.

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Trustee’s report and directors’ statement

Trustee’s report Having carried out such procedures as we considered necessary to discharge ourresponsibilities as Trustee of the Fund, it is our opinion based on the informationavailable and the explanations provided, that the Manager has, in all material respects,managed the Fund during the period 16 April 2015 to 15 April 2016, in accordancewith the investment and borrowing powers and restrictions applicable to the Fund, andotherwise in accordance with the provisions of the Trust Deed and the rules in theFinancial Conduct Authority’s Collective Investment Schemes Sourcebook.

London Citibank Europe plc11 August 2016

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, Director11 August 2016 Shamira Mohammed, Director

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We have audited the financial statements of the PUTM Bothwell UK Equity IncomeFund (“the Fund”) for the year ended 15 May 2016 which comprise the Statement ofTotal Return, the Statement of Change in Net Assets Attributable to Unitholders, theBalance Sheet, the related notes 1 to 19 and the Distribution Tables. The financialreporting framework that has been applied in their preparation is applicable law andUnited Kingdom Accounting Standards (United Kingdom Generally Accepted AccountingPractice) including FRS102 ‘The Financial Reporting Standard applicable to the UK andthe Republic of Ireland’.

This 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 those matters we are required to state to them in an auditor’s reportand for no other purpose. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the Fund and the unitholders as a body, forour audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Manager and AuditorAs explained more fully in the Manager’s responsibilities statement set out on page 26,the Manager is responsible for the preparation of the financial statements and for beingsatisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements inaccordance with applicable law and International Standards on Auditing (UK andIreland). Those standards require us to comply with the Auditing Practices Board’sEthical Standards for Auditors.

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 freefrom material misstatement, whether caused by fraud or error. This includes anassessment of: whether the accounting policies are appropriate to the Fund’scircumstances and have been consistently applied and adequately disclosed; thereasonableness of significant accounting estimates made by the Manager; and theoverall presentation of the financial statements. In addition, we read all the financial andnon-financial information in the Manager’s annual report to identify materialinconsistencies with the audited financial statements and to identify any information thatis apparently materially incorrect based on, or materially inconsistent with, theknowledge acquired by us in the course of performing the audit. If we become aware ofany apparent material misstatements or inconsistencies we consider the implications forour report.

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

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

Opinion on financial statements In our opinion the financial statements:

• give a true and fair view of the financial position of the Fund as at 15 May 2016and 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 the United Kingdom GenerallyAccepted Accounting Practice.

Opinion on 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;

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

• we have received all the information and explanations which, to the best of ourknowledge and belief, are necessary for the purposes of our audit.

Ernst & Young LLPStatutory Auditor11 August 2016

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Corporate information

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 period.

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

Ignis Investment Services Limited are part of the Standard Life Investments group (Standard Life Investments(Holdings) Limited) and its subsidiaries.

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

Remuneration

The Manager has adopted a remuneration policy, up-to-date details of which can be found onwww.phoenixunittrust.co.uk. These details describe how remuneration and benefits are calculated and identifythe committee which oversees and controls the policy. A paper copy of these details can be requested free ofcharge from the Manager. Following the implementation of UCITS V in the UK on 18 March 2016, allauthorised UCITS Managers are required to comply with the UCITS V Remuneration Code from the start of theirnext accounting year. Under the UCITS V Directive, the Manager is required to disclose information relating tothe remuneration paid to its staff for the financial year, split into fixed and variable remuneration. The Manager’sFinancial Year end is 31 December, it is therefore anticipated that the Manager's Remuneration Policy andassociated financial disclosures will be made within the Annual Reports starting from 31 December 2017,following its first full performance period. Prior to this date, and in line with the FCA’s guidance on the UCITS Vremuneration disclosures, the Manager would be part way through its first performance period and theinformation available would not be relevant or provide a proper basis for comparison.

Dealing: 0370 707 0073 Administration: 0330 1233 703

Risk

The price of units and the income 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.

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Corporate information

Registrar and correspondence addressPhoenix Unit Trust Managers LimitedPO Box 12997, ChelmsfordCM99 2ENAuthorised and regulated by the Financial Conduct Authority

Investment AdviserIgnis Investment Services Limited50 Bothwell StreetGlasgow G2 6HRRegistered in Scotland – No.SC101825Authorised and regulated by the Financial ConductAuthority

Trustee Citibank Europe plcRegistered Office: Citigroup Centre, Canada SquareCanary Wharf, London E14 5LBAuthorised by the Prudential Regulation Authority andregulated by the Financial Conduct Authority and thePrudential Regulation Authority

Independent Auditor to the FundErnst & Young LLPTen George StreetEdinburgh EH2 2DZ

Authorised statusThis Fund is an Authorised Unit Trust Scheme undersection 243 of the Financial Services & Markets Act 2000 and is categorised under the CollectiveInvestment Schemes Sourcebook as a UCITS fund.

Manager (resigned 2 November 2015)Ignis Fund Managers Limited (IFM)50 Bothwell StreetGlasgow G2 6HRTel: 0141 222 8000Registered in Scotland – No.SC85610Member of The Investment AssociationAuthorised and regulated by the Financial Conduct Authority

Manager (appointed 2 November 2015)Phoenix Unit Trust Managers Limited (PUTM)1 Wythall Green Way, Wythall, Birmingham, B47 6WGTel: 0330 1233 703Registered in England – No.03588031Authorised and regulated by the Financial Conduct Authority

Directors*Appointed with effect 2 November 2015Andrew Moss* PUTM Director, Chief Executive

Phoenix Life;Shamira Mohammed* PUTM Director, Finance Director

Phoenix Life;Craig Baker* PUTM Director, Head of Investment

Management Phoenix Life;Mike Urmston*Non Executive Director of PUTM.

Resigned with effect 2 November 2015N K SkeochJ AirdC ClarkR ParisC Walklin

Resigned with effect 31 July 2015C Fellingham

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Notes

B549.05.16

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 0330 1233 703.

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: 0330 1233 703Correspondence Address: PO Box 12997 Chelmsford CM99 2ENVisit: phoenixunittrust.co.uk

PHOENIX UNIT TRUST MANAGERS MANAGER’S ANNUAL REPORT

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