t n e m e g a n a M t n e m t s e v n I

Kleinwort Benson Global Funds Limited Report and Accounts for the period ended 25 June 2012

KLEINWORT BENSON GLOBAL FUNDS LIMITED

ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS for the period ended 25th June 2012

Page

Chairman’s Statement 2

Management and Administration 3

Net Asset Value Summary 4

Objectives and Policy, Fund Performance and Distribution of Assets with Manager’s Comment and Investment Report 5-26

Report of the Directors 27-28

Independent Auditors’ Report to the Members 29

Statements of Comprehensive Income 30-36

Statements of Financial Position 38-44

Statements of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares 46-49

Statements of Cash Flows 50-56

Notes to the Financial Statements 57-127

Appendix – Unaudited Investment Portfolio Listings 129-134

1 CHAIRMAN’S STATEMENT for the period ended 25th June 2012

Once again markets globally were dominated by events in Europe and their resultant effect on economic growth and activity. The continued inability of European authorities to grasp the nettle and provide a lasting solution to the funding requirements of periphery European nations led to increasing risk aversion and price volatility. Greece and its problems were to a certain extent upstaged as attention firmly fixed on Spain and Italy.

The mood in markets turned strongly negative in late July/early August 2011 driven by weaker than expected data from the US and the downgrade of the US sovereign rating, as lawmakers squabbled over a last ditch agreement to raise the debt ceiling and avoid default. Indices turned sharply down as selling set in and investors moved in to safe haven assets in the form of the US dollar, gold and US treasuries where yields across the curve were driven down to historic lows, (this despite the aforementioned downgrade!). The hope was that as with the previous year the panacea would come in the form of further liquidity provision in the form of QE3, a hope that turned out to be unfounded at that time. Whilst Bernanke, voicing the standpoint of the US monetary authorities, stated they were prepared to use all tools at their disposal to avoid financial crisis, he stopped short of turning on the taps once again.

Towards the end of November however the direction changed as improving economic data from the US together with concerted action by European authorities to support the banking sector encouraged investor buying. Despite this the year ended with equity market and other risk assets broadly down in USD terms with safe haven flows benefiting both the USD and Treasuries. Interestingly Gold, previously the darling of markets, peaked in July at $1,900.23 per troy ounce and fell out of favour with investors as a result of fear rising of both a bubble forming together with the positive effect QE3 would have meant not materialising.

Equities continued to rally going into Q1 2012 as risk appetite grew. The downgrade of European nations such as France and Austria mid January did little to dampen sentiment merely confirming that which investors already knew concerning the fiscal position of the nations concerned. This move was not to last however and at the end of March once again selling set in and risk aversion rose as Spain’s ability to fund itself came into question. This together with below forecast US jobs data prompted investors to reassess the potential for global economic growth and equity markets turned down erasing most if not all of the previous gains.

Over the past year the dominant issue has plainly been the debt problem felt by developed economies and their ability to deal with and resolve the issue. Each has approached the problem in its own way using the range of tools available within its arsenal and plainly we will see an all encompassing universal solution. Each solution, other than that followed by the US until now, has brought a negative effect to bear on growth within the economy concerned as austerity measures are introduced to balance the budget and reduce the debt burden.

The All Weather Funds ended the year in negative territory but over all the performance held up well given the market conditions. Fixed income strategies ended the year positively and the Bond & Equity Fund (Sterling) posted solid outperformance against its benchmark.

Whilst there are promising signs appearing that economic growth will recover, we will doubtless experience downturns as the recovery endeavours to gain traction and markets will continue to test the resolve of governments to take the bold decisions required.

Resolutions were passed by all of the funds apart from one on 4th October to transfer their assets to equivalent funds within Kleinwort Benson Elite PCC Funds, and the assets are scheduled to transfer on 18th October 2012. The Bond and Equity Fund will not transfer any assets to an equivalent fund within the KB Elite PCC funds due to a resolution not yet being passed by the shareholders. Once the position on the final fund has been resolved, Kleinwort Benson Global Funds will be wound up.

Chairman Mark Bright

2 MANAGEMENT AND ADMINISTRATION

DIRECTORS MARK BRIGHT, Chairman (appointed 6 December 2011) Kleinwort Benson, Dorey Court, Admiral Park, St Peter Port, Guernsey GY1 2HT

ANDREW HENTON (resigned 1st November 2011) PO Box 116, Trafalgar Court, Admiral Park, St. Peter Port, Guernsey GY1 3EZ. Head of Offshore Businesses, Kleinwort Benson

ROBIN RUMBOLL Windsor House, St. Lawrence, Jersey JE3 1NL

SIMON HOWARD PO Box 83, Ordnance House, 31 Pier Road, St. Helier, Jersey JE4 8PW

JONATHAN CROWTHER La Carre, La Rue de la Pointe, St. Ouen, Jersey JE3 2AF

SIMON DOWLING (resigned 16th August 2011) Kingsgate House, 55 Esplanade, St. Helier, Jersey JE2 3QB Director, Close International Asset Management Limited

REX COWLEY (resigned 30th September 2011) Kingsgate House, 55 Esplanade, St. Helier, Jersey JE2 3QB Director, Close International Asset Management Limited (with effect from 30th September 2011, Kleinwort Benson (Channel Islands) Investment Management Limited, Kleinwort Benson House, Wests Centre, St. Helier, Jersey JE4 8PQ)

ANDREW PITTER (appointed 25th November 2011) Kleinwort Benson House, Wests Centre, St Helier, Jersey JE4 8PQ

NATALIE MERRENS (appointed 3rd February 2012) Flat 5, 16 Wedderburn Road, NW3 5QG

REGISTERED OFFICE Kleinwort Benson House, Wests Centre, St. Helier, Jersey JE4 8PQ

MANAGER, KLEINWORT BENSON (CHANNEL ISLANDS) INVESTMENT MANAGEMENT LIMITED ADMINISTRATOR, Kleinwort Benson House, Wests Centre, St. Helier, Jersey JE4 8PQ SECRETARY AND REGISTRAR

INVESTMENT STATE STREET GLOBAL ADVISORS IRELAND LIMITED (SSgA) ADVISERS 40 Mespil Road, Dublin 4, Ireland State Street Global Advisors Ireland Limited are the investment advisor for Sterling Currency, US Dollar Currency, Euro Currency and International Equity.

KLEINWORT BENSON BANK LIMITED, 14 St. George Street, London W1S 1FE Kleinwort Benson Bank Limited are the investment advisor for International Bond, Bond & Equity, Sterling Income Bond, Euro Income Bond, Trojan, Sterling Conservative Strategy, Euro Conservative Strategy, US Dollar Conservative Strategy, All Weather Sterling, All Weather US Dollar and All Weather Euro, Sterling Dynamic Strategy, Euro Dynamic Strategy, US Dollar Dynamic Strategy, Sterling Progressive Strategy, Euro Progressive Strategy and US Dollar Progressive Strategy.

CUSTODIAN BNP PARIBAS SECURITIES SERVICES TRUST COMPANY (JERSEY) LIMITED Liberté House, 19-23 La Motte Street, St. Helier, Jersey JE2 4SY, Channel Islands

AUDITORS ERNST & YOUNG LLP, Liberation House, Castle Street, St Helier, Jersey JE1 1EY, Channel Islands

LISTING CHANNEL ISLANDS STOCK EXCHANGE, One Lefebvre Street, St. Peter Port, Guernsey GY1 4PJ, Channel Islands

LEGAL ADVISERS CAREY OLSEN, 47 Esplanade, St. Helier, Jersey JE1 0BD, Channel Islands

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