Annual Report 2006 - Tamar European Industrial Fund

Kenmore European
Industrial Fund Limited
2006
Annual report and accounts for the
period ended 31 December 2006

Contents
Company Summary
1 Financial Highlights
2 Performance Summary
3 Chairman’s Statement
5 Investment Manager
6 Investment Manager’s Review
9 Portfolio Statistics
10 Property Portfolio
11 Board of Directors
12 Report of the Directors
16 Directors’ Responsibility Statement
17 Independent Auditors’ Report
18 Income Statements
19 Balance Sheets
20 Statements of Changes in Equity
21 Cash Flow Statements
22 Notes to the Accounts
33 Notice of Annual General Meeting
34 Shareholder Information
Corporate Information
This document is important and relates to certain matters on which voting action is required. Shareholders who are in
any doubt as to what action to take should consult an appropriate independent adviser immediately.
If any shareholder has sold or transferred all their shares in the Company, he or she should pass this document to the
person through whom the transfer or sale was effected for onwards transmission to the transferee or purchaser.

Company Summary
The Company
The Company is a limited liability, closed-ended, Guernsey registered investment company. Its shares
are listed on the Official List of the UK Listing Authority and traded on the London Stock Exchange. It was
incorporated on 25 August 2006 and its shares were admitted to listing on 25 September 2006.
At 31 December 2006 total assets less current liabilities were £315 million and shareholders’ funds were
£140 million.
Objective
The investment objective of the Company is to provide Ordinary Shareholders with an attractive level
of income together with the potential for income and capital growth. Its investment policy is to focus on
investments in industrial real estate assets primarily across Western and Northern European jurisdictions
(but with no investments being made in the United Kingdom). The Investment Manager expects the
investments will be made primarily in France, Benelux, Germany, Italy, Iberia and Scandinavia.
Management
At launch the Board appointed Kenmore Financial Services Limited as Investment Managers.
The investment management agreement appointing them is for an initial three year period ending on
25 September 2009 and, with effect from that date, may be terminated by either party by giving not less
than 12 months’ notice. Further details of the investment management agreement are provided in the
Notes to the Accounts.
Capital Structure
At admission on 25 September 2006, the Company had a capital structure comprising 140 million
Ordinary Shares. Ordinary shareholders are entitled to all dividends declared by the Company and to all
the Company’s assets after repayment of liabilities including its borrowings. Borrowings consist of bank
facilities provided by The Royal Bank of Scotland plc, Hypo Real Estate Bank International AG and DnB
NOR Bank ASA, the latter being refinanced with borrowings from Hypo Real Estate Bank International AG
since the period end.
Status
The Company’s shares are eligible for ISAs and PEP transfers and for inclusion within SASS and SIPPS.
Website
The Company’s internet address is: www.kenmoreeifund.com
Financial Highlights
• Share price increased by 12.75 per cent to 112.75 pence at 31 December 2006.
• Adjusted net asset value before deferred tax liabilities per share increased by 9.0 per cent from 95.5
pence at launch to 104.1 pence at 31 December 2006.
• Dividend announced in respect of the period of 1.5 pence per share.
Kenmore European Industrial Fund Limited Share Price from Launch
114
112
110
108
106
104
102
100
25 Sept 31 Oct 30 Nov 31 Dec 06
Reconciliation of net asset value per accounts to adjusted net asset value:
Total Per share
£’000 Pence
Net asset value per accounts 140,409 100.3p
Adjustments:
Deferred tax liabilities (see note 10(a)) 2,583 1.8p
Unrecognised deferred tax adjusted for within initial purchase price consideration 4,845 3.5p
Unrecognised deferred tax contingently adjusted for
within initial purchase price consideration (see note 10(b)) (2,135) (1.5)p
Adjusted net asset value 145,702 104.1p
Reconciliation of net asset value per accounts to adjusted net asset value
after deferred tax liabilities and contingent deferred tax:
Total Per share
£’000 Pence
Net asset value per accounts 140,409 100.3p
Adjustments:
Unrecognised deferred tax liabilities (see note 10(b)) (29,948) (21.4)p
Unrecognised deferred tax adjusted for within initial purchase price consideration 4,845 3.5p
Adjusted net asset value after deferred tax liabilities and contingent deferred tax 115,306 82.4p
The above adjusted net asset values (‘NAV’) are based on the NAV per accounts which is calculated in accordance with International
Financial Reporting Standards issued by, or adopted by, the International Accounting Standards Board (the ‘‘IASB’’) and interpretations
issued by the International Financial Reporting Standards Committee. In order to reconcile these to the published accounts it is
necessary to adjust for those items identified above.
1

Performance Summary
Returns (from launch on 25 September 2006) 31 December 2006
Growth in adjusted net asset value per share 9.0%
Ordinary Share price 12.75%
FTSE All-Share Index 9.1%
Capital Values Launch
31 December 25 September
2006 2006 % Change
Total assets less current liabilities (£000’s) 314,994 276,204 +13.3
Adjusted net asset value 104.1p 95.5p +9.0
Ordinary Share price 112.75p 100.00p +12.8
FTSE All-Share Index 3,221.42 2,969.82 +8.5
Premium to adjusted net asset value per share 8.3% 4.7% -
Gearing ‡ 54.3% 51.2% -
Earnings and Dividends (from incorporation to 31 December 2006) †
Earnings per Ordinary Share 3.5p
Dividends announced per Ordinary Share 1.5p
Highs/Lows (since launch on 25 September 2006) Highs Lows
Ordinary Share price 112.75p 100.00p
Premium (to adjusted net asset value per share at launch) 18.1% 4.7%
‡ Gearing: Secured bank loans (after interest rate swaps) ÷ total assets (less current liabilities).
† Including dividends announced but not paid in respect of the period to 31 December 2006.
Source: Datastream.
2
Chairman’s Statement
It gives me great pleasure to report the first results of the Kenmore European Industrial Fund (the “Fund” / “Company”)
for the period from incorporation to 31 December 2006.
The Fund was launched in September 2006 with a successful fund raising of £140 million. Shortly after Admission
to the London Stock Exchange on 25 September 2006, it acquired a seed portfolio of 70 properties costing £212.7
million, subsequently augmented by further acquisitions in the reporting period. The Fund’s investment objective is to
provide investors with an attractive level of income together with the potential for capital growth. The Fund will focus
on industrial assets in western and northern Europe excluding the UK, primarily in France, Germany, Benelux, and
Scandinavia.
Results
On Admission, the prospectus suggested that the adjusted net assets of the Fund would be 95.5 pence excluding
deferred tax on unrealised investment gains. On the same basis I am delighted to report that net assets per share
excluding deferred tax have increased to 104.1 pence, a rise of 9.0%. The value of the portfolio acquired on Admission
has increased 3.4% with each country showing gains measured against the Fund’s acquisition cost.
The table below shows the movement in adjusted net asset value per share:
NAV per Share (Pence)
Admission, excluding deferred tax 95.5
Uplift from valuation gains 5.6
Expensing of acquisition costs (0.9)
Uplift from balance of retained profits 1.2
Improvement in mark to market of debt 0.8
Deferred tax charge for the period 1.9
As at 31 December 2006, excluding deferred tax 104.1
Including (both recognised and unrecognised) deferred tax, NAV per share is 82.4 pence which compares to the
pro-forma figure on Admission of 78.0 pence.
Profits before tax in the period from incorporation to 31 December 2006 were £7.7 million.
The share price has performed well in the period under review. The shares were admitted to trading at 100 pence
and have traded at a premium consistently since then. We believe that investor demand has been stimulated by the
prospects of an attractive dividend and potential capital growth and the level of liquidity has been encouraging. The
Company also joined the FTSE small cap index in October 2006.
Portfolio
In addition to the portfolio acquired shortly after Admission, the Company acquired 10 assets at a cost of £65 million
(excluding acquisition costs) in the period to 31 December 2006. As at the balance sheet date, the Company held
properties at a market value of £288 million, representing approximately 70% of the total expected portfolio size.
Since 31 December, the Company has continued to build the portfolio and, as at 27 February, has acquired a further 4
properties costing £10.5 million. There is a further pipeline of 10 acquisitions totalling £61.1 million which the Board has
approved for purchase which, if completed as expected, will result in the Fund being approximately 90% invested.
Information on the portfolio and the pipeline of assets is contained in the Investment Manager’s Review.
Gearing
At an Extraordinary General Meeting of the Company on 18 October 2006, members approved a change to the Articles
to remove the restriction that, at time of Admission, the maximum permitted borrowings of the Company should be no
greater than 65% of gross assets. The maximum permitted borrowing of the Company is now 75% of gross assets.
The aim of the Board, as stated in the prospectus, is to keep borrowings at approximately 70% of gross assets when
fully invested. During this period, with the acquisition of the portfolio the level of gearing may fall below this level.
3

Chairman’s Statement
As at 31 December 2006, the Company had drawn £172 million of debt from its facilities to finance the acquisition
of the portfolio. The Company has hedged the risk of interest rate increases by the use of derivative instruments.
On acquiring the seed portfolio, the Company also acquired certain debt facilities which were described in the
prospectus. Arrangements in Norway have been refinanced following the year-end and the swapped element of the
facilities replaced with new five year arrangements. The refinancing of the Belgian and Dutch seed assets has also
been completed with new hedging arrangements implemented.
As at the date of this statement, a total of 94% of the Company’s debt has been protected against adverse movements
in interest rates. Although interest rates across Europe have increased since flotation, the blended cost of money based
on debt drawn to date is currently 4.06% and the Fund is now well protected by the hedging instruments in place.
The results reflect an improvement in the mark to market value of the Company’s hedge instruments since Admission
of £1.1 million.
Dividends
In launching the Fund, the board stated that, in the absence of unforeseen circumstances, it expected to pay a total
dividend of 7.5 pence per share in the period from Admission to 31 December 2007, representing an annualised
dividend of 6 pence per share.
I am delighted to report that, in light of the strong progress made, the board has decided to declare a first dividend
of 1.5 pence per share, which will be paid on 25 April 2007 to shareholders on the register on 10 April 2007.
Shareholder Communication
The Board considers it important that shareholders are kept regularly informed of the progress of the Fund. The
adjusted Net Asset Value per share will be published quarterly.
Corporate Governance
The Company is registered in Guernsey. As such, it is not formally required to comply with the Combined Code on
Corporate Governance. However, the directors intend to comply with the Code, and our statement on compliance is
contained in this annual report.
Prospects
The west European and Scandinavian industrial property markets have performed well in recent years.
The markets on which the Company focuses have generally been characterised by consistent tenant demand, limited
development of new stock and an increase in investor demand for industrial/warehouse investments. We see these
conditions continuing, alongside other market dynamics. These include the active management of secondary assets
and hardening yields over the next 12 months, as a result of ongoing investor demand.
Against this background, the application of the Investment Manager’s specialist asset management skills and the
understanding of local market dynamics will be a key factor in driving the Company’s performance. The continuing
ability to source acquisitions through a local network of contacts is also of primary importance.
The Kenmore European Industrial Fund already has an attractive income profile which, including acquisitions in the
pipeline, has a yield of 7.6%, and a portfolio which has already delivered capital growth of 3.4% over the reporting
period to December 2006. A robust pipeline of further acquisitions has also been identified. The Board believes that
the Fund is well on course to build on this sound foundation as the Investment Manager continues to create and
manage a diversified portfolio with strong potential for income and capital growth.
Giles Weaver
Chairman
4
Investment Manager
Kenmore Financial Services Limited is the Investment Manager of the Company and the Luxembourg Subsidiary (and
their subsidiaries) pursuant to the Investment Management Agreement. The Investment Manager is responsible for
advising the Group on the overall management of the Group’s investments and for managing the Group’s cash and
investments in fixed income instruments in accordance with the Company’s investment objective and policy and subject
to the overall control and supervision of the Directors.
The Directors have satisfied themselves that the Investment Manager has procedures in place to address potential
conflicts of interest.
Kenmore Property Group Limited (‘‘Kenmore’’) is the parent company of the Investment Manager. Kenmore was
founded in 1986. Its principal activities are property trading, development and fund management. Kenmore currently
has offices in Edinburgh, London, Manchester, Birmingham, Bristol, Leeds, Stockholm, Paris and Dubai. In addition
to its office network it currently has ten joint venture partners with four of these being in Europe. The Kenmore Group
has 57 full time and attached staff in total and encompasses all the disciplines associated with property investment
management: research, acquisitions, disposals, development, finance, property management and administration.
5

Investment Manager’s Review
Property Market Review
In 2006, total industrial investment market activity was approximately equal to that in 2005, accounting for 5% of total
investment activity. Germany accounted for 20% of all European investment activity. A lack of investment supply is
the key constraint to growth in market size, however, investor demand remains high and this mismatch is expected to
further fuel yield compression.
Supply in the industrial sector remains constrained which in turn has contributed to rental stability. As a result of
stronger macro economic performance across Europe and improving tenant demand, rent stability remains strong with
the potential for rental growth in the short-to-medium term. In general terms, caution from developers and investors
regarding new construction, in particular speculative development, means that there is a limited threat from both oversupply
and downward pressure on rents.
France
In 2006, take-up in the Ile de France area has continued to recover with almost 950,000 square metres of leasing
activity. Rental levels remain constant and despite low levels of demand / activity in the fourth quarter, the prognosis
for 2007 is positive with rents expected to remain stable and demand to return to normal levels seen over the past two
years. Lack of investment stock has led to a slowdown in activity over the past two years and this is expected to remain
true in 2007, but will also continue to fuel yield compression.
Germany
The steady recovery of the German economy continues to fuel occupier activity and is expected to keep in-line with
new supply. Despite some downward pressure in and around Dusseldorf, rents are expected to be stable in 2007.
Essen and Dortmund have experienced high levels of demand in 2006. In investment terms, 2006 was a record year
for Germany with particularly strong interest in the warehouse sector. Yields in Germany are still trading at 50 basis
points above the average for the rest of Europe.
Belgium
Leasing activity in 2006 was very active, especially along the Antwerp-Brussels corridor running through Mechelen.
Take-up in Antwerp has been at record levels, but this is not a consistent story across Belgium - northern Brabant has
seen modest take-up of 30,000 square metres. In terms of investment transactions, 2006 was a record year after the
slow down in 2005. Notably, investors in 2006 showed strong interest in all sectors of industrial property not just larger
units as had been the case in previous years.
The Netherlands
Strong export growth has boosted the Netherlands economy driving improved performance in the industrial market.
Increasing levels of container freight have resulted in strong demand for warehousing in and around Rotterdam. While
there remains high levels of vacancy across the Netherlands industrial market (15% in Rotterdam) much of this is
structural vacancy in older poorly designed units. Rents have stabilised in the past twelve months and with increasing
tenant demand there is the potential for rental growth. Due to limited supply of investment opportunities, 2006 saw
a slow down in investment transactions compared to 2005. Strong demand and limited supply is expected to lead
to further yield contraction in 2007. Despite limited supply there remains strong interest from both domestic and
international investors.
Norway
Occupier demand, in part driven by a strong oil-based economy, has increased significantly in 2006. Rents are
stable and new supply remains limited, in part due to a shortage in construction capacity. Despite being outside the
Eurozone, investor interest continues to increase, though many international investors are not yet represented in Norway
and the local investors remain a strong force in the market place.
Sweden
An improving market economy is fuelling a rapid growth in stock with 300,000 square metres of warehouse space to
be delivered in 2007. Tenant expansion was a key aspect of the market in 2006. Growth in supply off-set by strong
demand has led to stable rental levels and this trend is expected to continue in 2007. Interest for industrial/warehouse
investments remains very high for prime properties and as a result of limited investment supply the secondary market
is also increasingly attractive to international investors. This is expected to fuel yield compression in 2007. In 2006
Sweden saw 8% of the European industrial investment market, a marginal increase on 2005.
6
Investment Manager’s Review
Finland
The industrial leasing market remains strong with stable demand and a very low market vacancy. New supply is
constrained and there is very limited speculative development, therefore, rents are stable with the promise of rental
growth in the short-to-medium term. Finland has seen strong growth in interest from international investors across all
asset classes. As elsewhere in Europe, market activity has been limited by a lack of product. Due to perceived lack
of market transparency Finland has traditionally not been favoured by international investors. However, this is now
changing with many investors focusing strongly on Finland. Nevertheless, yields are still significantly higher than
elsewhere in Europe.
Portfolio Overview
As at 31st December 2006 the total portfolio was valued at over £286.76m and the seed portfolio increased from
£212.7m to £219.7m, a rise of over 3%. By value the portfolio breaks down across six countries as follows: France
49%, Norway 24%, Netherlands 11%, Belgium 7%, Sweden 5% and Germany 4%. This shows a reduction in exposure
to France of 17%, an increase in Norway and Belgium and the first assets bought in Germany.
The portfolio comprises 80 properties, 658,000 square metres with 390 individual leases. The current portfolio rent is
£21.5m (NOI) reflecting a net yield of 7.5% with a void of 12.5% by area and reversionary yield of 8.65%.
Belgium France Germany Netherlands Norway Sweden Total
Number of Assets 3 57 2 4 10 4 80
Number of Tenancies 20 284 8 4 56 18 390
Total Area (sqm) 66,333 261,168 89,916 97,652 92,830 50,196 658,095
Average Lot Size £’000 £6,554 £2,449 £6,070 £7,662 £6,932 £3,727 £33,394
Value (per sqm) £296 £534 £135 £314 £747 £297 £435
Area/Tenancy (sqm) 3,317 920 11,240 24,413 1,658 2,789 1,687
Area/Asset (sqm) 22,111 4,582 44,958 24,413 9,283 12,549 8,226
During the reporting period, the portfolio saw 15 new leases signed or renewed, representing 3.5% of gross income and
31,579 sqm, and 19 tenants vacate premises, representing 3.7% of gross income and 30,515 sqm; the income of the
seed portfolio dropped by 0.9% and occupancy of the whole portfolio increased by just under 1% due to purchases.
It is worth noting that the French market had a relatively soft final quarter in terms of leasing and experienced high rental
increases as construction price indexation rose to 8%. We intend to use this unsustainable indexation to induce tenants
to commit to longer lease terms in return for a reduction to market rental levels. The portfolio as a whole is performing
within the business plan.
Transactions
Between launch and 31st December 2006, a total of 10 properties were purchased at a cost of £65m excluding
purchaser’s costs of 4.4% on average. The total net operating income for the new properties was £5.6m providing a net
initial yield of 8.2% and a reversionary yield of 8.8%. These additional investments take the fund to approximately 70%
invested by cost. No sales were undertaken.
The properties acquired include:
• Drammen, Norway (£13.95m; 7.1%; 18,177 sqm) – a well-let distribution unit which offers an opportunity to take a
surrender on release to the under tenants. The location is likely to improve as the main Oslo port is relocated.
• Dortmund, Germany (£9.68m; 12.4%; 81,438 sqm) – a well-located multi let industrial estate predominantly (70%) let
to Edeka. This provides the opportunity of redeveloping and reletting to a number of current under-tenants as Edeka
will not renew their lease.
• Aarschot, Belgium (£11.7m; 7.6%; 31,600 sqm) - a multi let industrial estate located in the prime Antwerp-Germany
distribution corridor. The property is currently under-rented and has the opportunity to develop a further 6,300 sqm.
The assets acquired were valued at 31st December 2006 at £67,046,227, approximately 0.6% less than their gross
purchase price.
7

Investment Manager’s Review
Outlook
As a general statement on the industrial/warehouse market, we anticipate more of the same, increasing investor
interest putting downward pressure on yields, steady but cautious tenant demand and supply in check through lack of
development.
However, the market dynamics have changed slightly over the quarter. The significant rise in interest rates has reduced
the arbitrage between cost of money and property yields. This has occurred at the same time as there are more
entrants into the market place. Unfortunately, investment stock levels have not increased commensurately as the sector
is comparatively immature and corporates are only slowly releasing real estate assets from their balance sheets.
While we are well within business plan in terms of purchase yield and hedged interest rate, future purchases will be
more difficult to secure at those yields experienced historically, although this should indicate potential for capital growth
within the existing portfolio. Furthermore, the continued rise in construction costs will either push prime rents upward
or continue to act as a hold over new development – either way the existing stock could potentially experience rental
growth.
We continue to see excellent off-market opportunities through our office network and well established contacts in our
target markets.
Rob Brook
Kenmore Financial Services Limited
Investment Manager
8
Portfolio Statistics
Geographical Analysis as at 31 December 2006 Tenure Analysis as at 31 December 2006
NETHERLANDS 11%
GERMANY 4%
Lease Expiry Profile
At 31 December 2006 the average lease length for the portfolio, assuming all break options are exercised, was 3.8
years.
80%
70%
60%
50%
40%
30%
20%
10%
0
FRANCE 49%
0-5 years
NORWAY 24%
Top Ten Tenants at 31 December 2006
SWEDEN 5%
BELGIUM 7%
5-10 years 10-15 years 15+ years
LEASEHOLD 2%
FREEHOLD 98%
Passing Rent % Total Portfolio
Tenant £’000s Passing Rent
Kuehne + Nagel Logistics 1,674 7.8%
EDEKA 1,127 5.2%
Bauda AS 970 4.5%
Kuehne + Nagel Chilled Logistics 677 3.1%
STS 526 2.4%
Grunnarbeid AS 459 2.1%
I.N.A. 444 2.1%
Nexans Distribution 405 1.9%
Bongs Konvolutter 398 1.8%
Black & Decker 338 1.6%
7,018 32.5%
9

Property Portfolio
As at 31 December 2006
Property Country Initial Market % of Total Assets
Yield value (less Current
£’000s Liabilities)
Marshallweg 1, Veghel Netherlands 7.19% 22,825 7.3%
Svelvikveien 59B, Drammen Norway 6.85% 14,384 4.6%
Nieuwlandlaan, Aarschot Belgium 8.72% 10,908 3.5%
Brackler-Hellweg, Dortmund Germany 14.67% 9,426 3.0%
Leiraveien 13B, Skedsmo Norway 6.02% 9,101 2.9%
Croissy Beaubourg France 7.79% 8,867 2.8%
Östmarkveien 27, Oslo Norway 6.88% 7,788 2.5%
Banvakten 1, Borlange Sweden 5.37% 6,476 2.1%
Nanterre France 6.79% 6,363 2.0%
Vestvollveien 10, Skedsmo Norway 8.88% 6,338 2.0%
Ten largest property holdings 102,476 32.7%
Prof Birkelandsvei 36, Oslo Norway 7.93% 6,231 2.0%
Vikelvfaret, Trondheim Norway 7.80% 5,929 1.9%
Bry-sur-Marne France 9.03% 4,915 1.6%
John G. Mattesonsvei 4, Oslo * Norway 8.64% 4,829 1.5%
Holterkollveien 3, Frogn Norway 7.29% 4,681 1.5%
Runnenbergweg 12,14 / Talhoutweg 2, Vaassen Netherlands 9.38% 4,585 1.5%
Lisses Porges France 7.40% 4,558 1.5%
Bekkeveien 161, Stokke Norway 9.30% 4,550 1.5%
Industrielaan 9, Olen Belgium 9.49% 4,525 1.4%
Oostkaai, Merksem Belgium 10.22% 4,228 1.4%
Twenty largest property holdings 151,507 48.5%
Vastra 8, Helsingborg Sweden 11.32% 4,049 1.3%
Bois-Chaland, Lisses France 8.33% 4,033 1.3%
Combs La Ville France 6.48% 3,966 1.3%
Fontenay Neuilly France 7.92% 3,892 1.2%
St. Michel sur Orge France 7.93% 3,737 1.2%
Rue de L’Equerre, St Ouen l’Aumône France 8.04% 3,636 1.2%
Bredmyra 10-12, Sarpsborg Norway 8.47% 3,608 1.2%
Herblay France 8.31% 3,488 1.1%
Norrahammar, Jönköping Sweden 13.76% 3,470 1.1%
Neuilly Plaisance France 7.57% 3,461 1.1%
Thirty largest property holdings 188,847 60.5%
Other properties 99,008 29.5%
Price adjustment related to deferred tax liabilities (4,845) (0.1)%
Total property portfolio 283,010 89.9%
Other non-current assets and net current assets 31,984 10.1%
Total assets (less current liabilities) 314,994 100.0%
* Leasehold property
10
Board of Directors
Giles Weaver (Chairman)
Aged 60, is currently Chairman of Charter Pan-European Trust PLC and Helical Bar PLC. He is a nonexecutive
director of Aberdeen Asset Management PLC, Gartmore SICAV, Anglo & Overseas PLC, Investec
High Income Trust PLC, Isotron PLC, James Finlay Ltd., ISIS Property Trust 2 Ltd. and Henderson Far East
Income Trust plc. He was formerly chairman of Murray Johnstone Ltd. and a director of Ivory & Sime PLC.
Jonathan Gamble
Aged 39, is currently a director of Asset Risk Consultants Limited, which provides investment consulting
services. He has worked professionally in London, Australia and Singapore as a dealer for Morgan Stanley
and Société Générale before moving to Guernsey. He serves on the boards of a number of companies.
Helen Green
Aged 44, is a chartered accountant and a partner in Saffery Champness, a UK top 20 firm of chartered
accountants. She joined the firm in 1984, qualified as a chartered accountant in 1988 and became a
partner in the London office in 1997. Since November 2000 she has been based in the Guernsey office
where she is a client liaison director responsible for trust and company administration. Helen serves on the
boards of a number of companies in various jurisdictions.
John Kennedy
Aged 55, has over 30 years’ experience in the property market. He is Chairman of Kenmore and has
worked professionally in Scotland, Australia and the West Indies. He qualified as a chartered surveyor in
1973, formed Kenmore Investments Limited 20 years ago and ran his own building company before turning
exclusively to commercial property trading, development and investment. He is a prior winner of Property
Week Personality of the Year and Entrepreneur of the Year.
Christopher Spencer
Aged 56. Christopher Spencer qualified as a chartered accountant in London in 1975. Following two years
post qualification work in Bermuda he moved to Guernsey. Mr Spencer, who specialised in audit and
fiduciary work, was managing partner/director of the Guernsey Practice of Pannell Kerr Forster (Guernsey)
Limited and Praxis Fiduciaries Limited from 1990 until his retirement in May 2000. Mr Spencer is a nonexecutive
Director of a number of hedge funds, funds of hedge funds and other investment and insurance
companies.
11

Report of the Directors
The Directors present their report and accounts of the
Group for the period from incorporation on 25 August
2006 to 31 December 2006 (the “period”).
Results and Dividends
The results for the period are set out in the attached
accounts. The Company has not paid any interim
dividends during the period ended 31 December 2006. It
is the policy of the Directors to declare and pay dividends
as interim dividends. The Directors do not therefore
recommend a final dividend.
Principal Activity and Status
The Company is a Guernsey registered company and
during the period carried on business as a property
investment company. A review of the business during the
period is contained in the Chairman’s Statement and the
Investment Manager’s Review.
Directors
The Directors who held office during the period and
their interests in the shares of the Company as at 31
December 2006 (all of which were beneficial) were:
Ordinary Shares
CGH Weaver 200,000
JJ Gamble -
HF Green 5,000
JAB Kennedy *1,500,000
CP Spencer 15,000
* Held within a group pension scheme of which Mr
Kennedy is a member.
There have been no changes in the above interests
between 31 December 2006 and 27 February 2007.
Biographical details of each of the Directors are shown
on page 11. In accordance with the Company’s Articles
of Association each Director will retire at the Annual
General Meeting, being the first such meeting following
his appointment and, being eligible, offers himself
for re-election. As stated in the section on Corporate
Governance starting on page 13, an evaluation of the
performance of individual Directors was not carried out
during the period but will be undertaken during 2007.
However, the Board believes that the performance of
each Director continues to be effective and demonstrates
commitment to the role.
12
During the period the Directors received the following
emoluments in the form of fees:
CGH Weaver 12,370
JJ Gamble 7,068
HF Green 7,068
JAB Kennedy 7,068
CP Spencer 8,836
Total 42,410
There are no service contracts in existence between the
Company and any Directors but each of the Directors
was appointed by a letter of appointment which sets out
the main terms of their appointment.
Management
Kenmore Financial Services Limited (the Investment
Manager) provides management services to the
Company. A summary of the Investment Management
Agreement is given in note 2 to the accounts.
Since the period end, the Management Engagement
Committee has reviewed the appropriateness of the
Investment Manager’s appointment. In carrying out
the review the Committee considered the investment
performance of the Company during the period and the
capability and resources of the Investment Manager
to deliver satisfactory investment performance. It
also considered the length of the notice period of the
Investment Management Agreement and the fees
payable to the Investment Manager, together with the
standard of the other services provided.
Following this review, it is the Directors’ opinion that the
continuing appointment of the Investment Manager on
the terms agreed is in the interests of shareholders as a
whole.
Substantial Interests in Share Capital
At 27 February 2007 the following holdings representing
more than 3 per cent of the Company’s issued share
capital had been notified to the Company.
No. of Ordinary Percentage
Shares Held Held
Rathbone Brothers Plc 13,808,713 9.86%
Kenmore Investments
Limited 10,500,000 7.50%
Uberior Europe Limited 7,000,000 5.00%
The Independent
Investment Trust Plc 5,000,000 3.57%
£
Report of the Directors
Corporate Governance
As a Guernsey registered company, the
Company is not required to comply with the
Combined Code on Corporate Governance
issued by the Financial Reporting Council in
July 2003 (‘the Code’).
However, it is the Company’s policy to comply with best
practice on good corporate governance that is applicable
to investment companies.
Arrangements in respect of corporate governance have
therefore been made by the Board, which it believes are
appropriate for the Company. Except as disclosed in the
following two paragraphs, the Company believes that it
complied with the provisions of the Code throughout the
period. Since the Board consists entirely of non-executive
Directors, the provisions of the Code in respect of
Directors’ remuneration are not relevant to the Company
except in so far as they relate to non-executive Directors.
No Director has a service contract with the Company.
Their letters of appointment, dated 5 September 2006,
state that their appointment and any subsequent
termination or retirement shall be subject to the
provisions of the Articles of Association which require
that all Directors retire by rotation at least every three
years. The Board considers that it is not appropriate for
the Directors to be appointed for a specified term as
recommended by Code provision A.7.2, nor for a Senior
Independent Director to be appointed as recommended
by Code provision A.3.3, nor, at present, for there to
be a Nomination Committee as recommended by
Code provision A.4.1. The Company has not so far
established a separate remuneration committee as
the Board is satisfied that any relevant issues can be
properly considered by the Board or by the established
committees.
In addition, the Board did not consider it appropriate to
carry out an evaluation of the performance of the Board,
Committees and individual Directors during the first
accounting period and the Company is therefore not
able to provide the disclosure recommended by Code
provision A.6.1. However, a performance evaluation will
be undertaken during 2007.
Mr Weaver is Chairman. Mr Kennedy is an executive
director of Kenmore, which is the ultimate parent
company of the Investment Manager. He is not therefore
considered to be an independent Director. All other
Directors are considered by the Board to be independent
of the Investment Manager. New Directors will receive an
induction from the Investment Manager and Secretary on
joining the Board and all Directors receive other relevant
training as necessary.
The Company has no executive directors or employees.
The Investment Management Agreement sets out
the matters over which the Investment Manager has
authority and the limits beyond which Board approval
must be sought. All other matters, including strategy,
investment and dividend policies, gearing, and corporate
governance procedures, are reserved for the approval of
the Board of Directors. The Board currently meets at least
quarterly and receives full information on the Company’s
investment performance, assets, liabilities and other
relevant information in advance of Board meetings.
The Audit Committee, chaired by Mr Spencer, meets
bi-annually and operates within clearly defined terms
of reference and comprises all the Directors except
for Mr Kennedy. The duties of the Audit Committee in
discharging its responsibilities include reviewing the
Annual and Interim Accounts; the system of internal
controls; and the terms of appointment of the auditors
together with their remuneration. It is also the forum
through which the auditors report to the Board of
Directors. The objectivity of the auditors is reviewed by
the Audit Committee which also reviews the terms under
which the external auditors are appointed to perform
non-audit services. The Committee reviews the scope
and results of the audit, its cost effectiveness and the
independence and objectivity of the auditors, with
particular regard to non-audit fees. Such fees amounted
to £31,000 for the period ended 31 December 2006 and
related to agreed procedures in respect of the completion
accounts for the acquisition of the seed portfolio.
Notwithstanding the provision of such services, the Audit
Committee considers KPMG Channel Islands Limited to
be independent of the Company and that the provision of
such non-audit services is not a threat to the objectivity
and independence of the conduct of the audit. The Audit
Committee held its first meeting on 27 February 2007.
13

Report of the Directors Report of the Directors
The Management Engagement Committee, chaired
by Mr Weaver, comprises the full Board, except for Mr
Kennedy, and reviews the performance of the Investment
Manager and the continuing ability of Directors to act
independently of any substantial shareholder, and their
associates. The Management Engagement Committee
will hold its first meeting during 2007.
The table below sets out the number of Board and
Committee meetings held during the period from the
Company’s launch to 31 December 2006 and the number
of meetings attended by each Director.
Board of Directors Meetings held / attended
CGH Weaver 3 / 3
JJ Gamble 3 / 3
HF Green 3 / 3
JAB Kennedy 3 / 3
CP Spencer 3 / 3
Individual Directors may, at the expense of the Company,
seek independent professional advice on any matter
that concerns them in the furtherance of their duties. The
Company maintains appropriate Directors’ and Officers’
liability insurance. After making enquiries, and bearing in
mind the nature of the Company’s business and assets,
the Directors consider that the Company has adequate
resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt
the going concern basis in preparing the accounts.
Principal Risks and Uncertainties
The Company invests in real estate in Europe and
Scandinavia. It is therefore exposed to variations in
market conditions for such assets and to responses
to market conditions, to local and national economic
conditions, changes to the currency and interest rate
profiles, tax rates and other future events. In addition
the Company will also face risks from breach of laws or
regulations, poor selection of assets, failure of systems or
procedures in any of the countries in which the Company
operates, actions leading to central management and
control of the assets being regarded as taxable in the UK.
The Investment Manager through its active management
and review processes will seek to minimise these risks
wherever possible, and the Board through its review of
the Manager’s work will seek to identify any additional
exposures.
The Board uses a number of key performance indicators
to assist in measuring the performance of the Company.
14
These are:
• the running yield on the portfolio;
• the cost of the Company’s debt;
• the performance of the share price and its relativity to
NAV per share excluding deferred tax; and
• the dividend yield.
Internal Controls
The Board is responsible for the Company’s system
of internal control and for reviewing its effectiveness,
consistent with the guidance by the Turnbull Committee.
The process is based principally on the Investment
Manager’s approach to internal control.
The Board will review at its regular series of meetings a
report from the Investment Manager on the procedures it
has undertaken to ensure compliance with the investment
guidelines of the Company and the management of the
portfolio of assets within the Company. At each Board
meeting the Board monitors the investment performance
of the Company in comparison to its stated objective. The
Board also reviews the Company’s activities since the last
Board meeting to ensure that the Investment Manager
adheres to the agreed investment policy and approved
investment guidelines and, if necessary, approves
changes to such policy and guidelines. In addition, at
each Board meeting, the Board receives reports from
the Secretary in respect of compliance matters and
duties performed on behalf of the Company. By their
nature these procedures can provide reasonable, but not
absolute, assurance against material misstatement or
loss.
The Board has reviewed the need for an internal audit
function. The Board has decided that the systems and
procedures employed by the Investment Manager and
the Secretary and the work carried out by the Company’s
external auditors, provide sufficient assurance that a
sound system of internal control, which safeguards
the Company’s assets, is maintained. An internal audit
function specific to the Company is therefore considered
unnecessary.
Relations with Shareholders
The Company welcomes the views of shareholders
and places great importance on communication with
its shareholders. The Board receives regular reports on
the views of shareholders and the Chairman and other
Directors are available to meet shareholders if required.
Any requests for meetings should be made to the
Administrator.
Directors’ Authority to Buy Back Shares
The Company did not purchase any shares for
cancellation during the period.
The Directors will seek renewal of the current authority
of the Company to make market purchases of up to
14.99 per cent of the issued Ordinary Share Capital
and Special Resolution 1, as set out in the notice of the
Annual General Meeting, seeks renewal of such authority
until the earlier of the Annual General Meeting in 2008
and 15 August 2008. Any buy back of Ordinary Shares
will be made subject to Guernsey law and within any
guidelines established from time to time by the Board
(which will take into account the income and cash flow
requirements of the Company). The making and timing
of any buy backs will be at the absolute discretion of
the Board. Purchases of Ordinary Shares will only be
made through the market for cash at prices below the
prevailing net asset value of the Ordinary Shares (as last
calculated) where the Directors believe such purchases
will enhance shareholder value. The purchases will only
be made in accordance with the rules of the UK Listing
Authority which provide that the price to be paid must
not be more than the higher of (i) five per cent above the
average market value of the Shares for the five business
days prior to the day the purchase is made and (ii) the
“Buy-back” Regulation price, being the higher of the last
independent trade and the highest current independent
bid.
It is intended that buy backs will only be made if to do
so will represent an attractive investment opportunity for
ongoing shareholders not participating in any such buy
backs. Accordingly, purchases of Shares will only be
made through the market for cash at prices below the
prevailing Net Asset Value per Share of the remaining
Shares.
Auditors
KPMG Channel Islands Limited have expressed
their willingness to continue in office as auditors and
a resolution proposing their re-appointment will be
submitted at the Annual General Meeting.
Approved by the Board on 27 February 2007.
Jonathan Gamble Helen Green
Director Director
15

Directors’ Responsibility Statement Independent Auditors’ Report
The Directors are responsible for preparing the Directors’ Report and the Group and parent Company
financial statements for each financial period which give a true and fair view of the state of affairs of the
Group and the parent Company and of the profit or loss of the Group and the parent Company for that
period and which are in accordance with applicable laws. In preparing those financial statements the
Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed subject to any material departures
disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is appropriate to presume that the
Group will not continue in business.
The Directors are responsible for keeping proper accounting records which disclose with reasonable
accuracy at any time the financial position of the Group and which enable them to ensure that the financial
statements have been properly prepared in accordance with the Companies (Guernsey) Law, 1994. They
are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
16
Independent Auditors’ Report to the Members of Kenmore European Industrial Fund Limited
We have audited the Group and parent Company financial statements (the ‘‘financial statements’’) of Kenmore
European Industrial Fund Limited for the period ended 31 December 2006 which comprise the Consolidated
and Company Income Statements, the Consolidated and Company Balance Sheets, the Consolidated and
Company Statements of Changes in Equity, the Consolidated and Company Cash Flow Statements and the
related notes. These financial statements have been prepared under the accounting policies set out therein.
This report is made solely to the Company’s members, as a body, in accordance with section 64 of The
Companies (Guernsey) Law, 1994. Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the Company and the Company’s members as a body, for our audit work, for this report, or for the
opinions we have formed.
Respective Responsibilities of Directors and Auditors
The Directors are responsible for preparing the Directors’ Report and the financial statements in accordance
with applicable Guernsey law and International Financial Reporting Standards (IFRSs) as set out in the
Statement of Directors’ Responsibilities above.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory
requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and are properly
prepared in accordance with The Companies (Guernsey) Law, 1994. We also report to you if, in our opinion,
the company has not kept proper accounting records, or if we have not received all the information and
explanations we require for our audit.
We read the Directors’ Report and consider the implications for our report if we become aware of any
apparent misstatements within it.
We read the other information accompanying the financial statements and consider whether it is consistent
with those statements. We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements.
Basis of Audit Opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued
by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to
the amounts and disclosures in the financial statements. It also includes an assessment of the significant
estimates and judgements made by the Directors in the preparation of the financial statements, and of
whether the accounting policies are appropriate to the Company’s circumstances, consistently applied and
adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the
financial statements are free from material misstatement, whether caused by fraud or other irregularity or
error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the
financial statements.
Opinion
In our opinion the financial statements:
• give a true and fair view, in accordance with IFRSs, of the state of the Group’s and the parent Company’s
affairs as at 31 December 2006 and of the Group’s and the parent Company’s profit for the period then
ended; and
• have been properly prepared in accordance with The Companies (Guernsey) Law, 1994.
KPMG Channel Islands Limited
Guernsey, Channel Islands 27 February 2007
17

Income Statements Balance Sheets
For the period from 25 August 2006 to 31 December 2006
Revenue
Notes Company Group
£’000 £’000
Rental income - 5,193
Other income - 522
Gains on investments
Unrealised gains on revaluation of investment properties 8 - 5,072
Total income - 10,787
Expenditure
Other expenses 2a, 3 (170) (3,001)
Total expenditure (170) (3,001)
Net operating profit/(loss) before finance costs (170) 7,786
Net finance costs
Interest revenue receivable 2,029 677
Finance costs 4 (720) (762)
1,309 (85)
Net profit from ordinary activities before taxation 1,139 7,701
Taxation on profit on ordinary activities 5 - (2,804)
Net profit for the period 1,139 4,897
Basic earnings per share 3.5p
The accompanying notes are an integral part of this statement.
18
As at 31 December 2006
Notes Company Group
£’000 £’000
Non-current assets
Property, plant and equipment - 3
Investment properties 8 - 283,010
Investment in subsidiary undertakings 9 682 -
Trade and other receivables 11a 143,554 2,135
Deferred tax assets 10 - 159
144,236 285,307
Current assets
Trade and other receivables 11b 18 16,723
Cash and cash equivalents 12 25,294 33,581
25,312 50,304
Total assets 169,548 335,611
Current liabilities
Trade and other payables 13 (32,924) (20,617)
Non-current liabilities
Loans and borrowings 14 - (172,002)
Deferred tax liabilities 10 - (2,583)
- (174,585)
Total liabilities (32,924) (195,202)
Net assets 136,624 140,409
Represented by:
Share capital 15 - -
Share premium 15 2,985 2,985
Special distributable reserve 15 132,500 132,500
Translation reserve 15 - 27
Revenue reserve 15 1,139 4,897
Equity shareholders’ funds 136,624 140,409
Net asset value per share 100.3p
The accounts on pages 18 to 32 were approved by the Board of Directors on 27 February 2007 and signed
on its behalf by:
J J Gamble H F Green
Director Director
The accompanying notes are an integral part of this statement.
19

Statements of Changes in Equity Cash Flow Statements
For the period from 25 August 2006 to 31 December 2006
Income and expense recognised directly in equity
Company Group
£’000 £’000
Foreign currency translation differences for foreign operations - 27
- 27
Net profit for the period 1,139 4,897
Issue of ordinary share capital, net of issue costs 135,485 135,485
Total changes in equity for the period 136,624 140,409
For the period from 25 August 2006 to 31 December 2006
Cash flows from operating activities
Notes Company Group
£’000 £’000
Net profit from ordinary activities before taxation 1,139 7,701
Adjustments for:
Unrealised gains on revaluations of investment properties - (5,072)
Depreciation on other fixed assets - 1
Increase in operating trade and other receivables (18) (16,723)
Increase in operating trade and other payables 32,924 19,970
Taxation paid - (216)
Net cash inflow from operating activities 34,045 5,661
Cash flows from investing activities
Purchases of investment properties 8 - (275,170)
Development expenditure 8 - (2,258)
Purchase of other fixed assets 8 - (4)
Investment in subsidiaries 9 (682) -
Increase in non-current trade and other receivables 11a (143,554) (2,135)
Net cash outflows from investing activities (144,236) (279,567)
Cash flows from financing activities
The accompanying notes are an integral part of this statement. The accompanying notes are an integral part of this statement.
20
Proceeds from issue of ordinary share capital 15 140,000 140,000
Issue costs of ordinary share capital 15 (4,515) (4,515)
Receipt of borrowings 14 - 172,002
Net cash inflow from financing activities 135,485 307,487
Net increase in cash and cash equivalents 25,294 33,581
Opening cash and cash equivalents - -
Closing cash and cash equivalents 25,294 33,581
21

Notes to the Accounts
1. Accounting policies
A summary of the principal accounting policies, all of which have been applied consistently throughout the period, is set
out below.
(a) Basis of Accounting
The consolidated accounts have been prepared in accordance with International Financial Reporting Standards issued
by, or adopted by, the International Accounting Standards Board (the ‘‘IASB’’), interpretations issued by the International
Financial Reporting Interpretations Committee, applicable legal and regulatory requirements of Guernsey Law and the
Listing Rules of the UK Listing Authority. The Company considers that it has complied (and intends to continue to comply)
with the conditions applicable to property investment companies set out in paragraph 15.5.15R of the Listing Rules of the
United Kingdom Listing Authority.
No International Financial Reporting Standards have been adopted early, however it is likely that any Standards issued, but
that are not yet effective, would only require changes in disclosure and not result in changes to the accounting policies for
recognition and measurement.
(b) Basis of Consolidation
The consolidated accounts comprise the accounts of the Company and all of its subsidiaries, being entities controlled by
the Company, drawn up to 31 December each year.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from
the date on which control is transferred out of the Group.
These consolidated financial statements are presented in sterling, which is the Company’s functional currency. All financial
information presented in sterling has been rounded to the nearest thousand.
(c) Revenue Recognition
Rental income, excluding VAT, arising on investment properties is accounted for in the Income Statement on a straight-line
basis over the lease term of ongoing leases. Lease incentives granted are recognised as an integral part of the total rental
income.
Interest income is accounted for on an accruals basis.
(d) Expenses
Expenses are accounted for on an accruals basis. The Group’s investment management and administration fees, finance
costs and all other expenses are charged through the Income Statement.
(e) Taxation
Deferred income tax is provided, using the liability method, on temporary differences at the balance sheet date between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax
liabilities are measured at the tax rates that are expected to apply to the period when the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
As required by IAS 12, deferred income tax is not recognised on temporary differences at the time of initial recognition
arising from transactions treated as asset acquisitions. The aggregate amount of such deferred income tax is disclosed as
unrecognised deferred income tax.
Deferred income tax assets are only recognised if it is considered more likely than not that there will be suitable profits from
which the future reversal of the underlying timing differences can be deducted.
(f) Investment Properties
Freehold investment properties, or the equivalent, are initially recognised at cost, being the fair value of consideration
given, including transaction costs associated.
Leasehold investment properties, or the equivalent, are initially recognised at the lower of fair value and the present value
of minimum lease payments.
After initial recognition, investment properties are measured at fair value, with unrealised gains and losses recognised in
the Income Statement. Fair value is based on the open market valuation provided by Savills SA, chartered surveyors, at the
balance sheet date.
On derecognition, realised gains and losses on disposals of investment properties are recognised in the Income Statement.
Recognition and derecognition occurs on the exchange of signed contracts between a willing buyer and a willing seller.
22
Notes to the Accounts
1. Accounting policies (continued)
(f) Investment Properties (continued)
In the case of development expenditure, cost includes the cost of materials and direct labour and any other costs directly
attributable to bringing the asset to a working condition for its intended use. Cost also includes capitalised borrowing costs
up to the point of practical completion.
(g) Derivative Financial Instruments
The Group holds derivative financial instruments to hedge its interest rate exposures. Derivatives are recognised initially
at fair value; attributable transaction costs are recognised in the Income Statement when incurred. Subsequent to initial
recognition, derivatives are measured at fair value. Hedge accounting is not applied to derivative instruments and changes
in fair value are recognised in the Income Statement.
(h) Share Issue Expenses
Incremental external costs directly attributable to the equity transaction that would have otherwise not been incurred are
written off against the Share Premium Account.
All other expenses relating to the launch of the Company not directly attributable to the issue of equity are expensed
through the Income Statement.
(i) Segmental Reporting
The Directors are of the opinion that the Group is engaged in a single segment of business being property investment
business, in one geographical area, Europe (excluding the United Kingdom).
(j) Cash and Cash Equivalents
Cash at bank and short term deposits that are held to maturity are carried at amortised cost. Cash and cash equivalents
consist of cash in hand and short term deposits in banks with an original maturity of three months or less.
(k) Trade and Other Receivables
Trade receivables, which are generally due for settlement at the relevant quarter end are recognised and carried at the
original invoice amount. As impairment events are identified, provisions are made on either a specific or collective basis,
as may be applicable.
(l) Interest-Bearing Borrowings
All non-current borrowings are initially recognised at cost, being fair value of the consideration received, net of arrangement
costs associated with the borrowing. After initial recognition, all interest bearing borrowings are subsequently measured
at amortised cost using the effective yield method. The effective yield method recognises interest in the Income Statement
in the period to which it relates. Amortised cost is calculated by taking into account any loan arrangement costs and any
discount or premium on settlement.
(m) Foreign Exchange
1. Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary
items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for
effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange
rate at the end of the period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at
fair value are retranslated to the functional currency at the exchange rate at the date the fair value was determined. Foreign
currency differences arising on retranslation are recognised in profit or loss.
2. Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are
translated to sterling at exchange rates at the reporting date. The income and expenses of foreign operations are translated
to sterling at exchange rates at the dates of the transactions.
Foreign currency differences are recognised directly in equity. When a foreign operation is disposed of, in part or in full, the
relevant amount in equity is transferred to the Income Statement.
(n) Use of Estimates and Judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
23

Notes to the Accounts
2. Fees
Group
(a) Investment management fees 504
Under the terms of the Investment Management Agreement, Kenmore Financial Services Limited (the Investment
Manager) is entitled to a base fee equal to 0.75 per cent per annum of the aggregate value of the real estate assets of
the Group, until such time that 90 per cent of the fund is committed or invested and thereafter equal to 0.90 per cent per
annum of the aggregate value of the real estate assets of the Group. The base fee rate will reduce to 0.85 per cent per
annum to the extent that such assets exceed £550 million and to 0.75 per cent per annum to the extent that such assets
exceed £700 million.
The base fee is payable quarterly in arrear and, in respect of each calendar quarter, will be calculated by reference to
the time weighted average of the aggregate value of the real estate assets of the Group for the relevant quarter.
Performance fee
In addition, the Investment Manager is entitled to a performance fee in respect of each performance period if the
growth in net asset value (excluding deferred tax on unrealised capital gains or losses in the Property Portfolio plus
dividend returns, at the end of that performance period) exceeds 10 per cent per annum and, further, if the Company
has met its stated dividend policy during such performance period.
The performance fee rate is set at 20 per cent of such outperformance. The trigger for a performance fee payment for
each period is subject to a ‘‘high water mark’’ which is reset every 3 years, such that the 10 per cent hurdle applies to
the previous highest financial period end NAV within each consecutive 3 year period.
50 per cent of the performance fee, if payable in respect of any performance period, will be paid in cash. An amount
equal to the remaining 50 per cent in ordinary shares in the Company will be set aside and paid to the Investment
Manager if the Company has met its stated dividend policy for a period of 2 years commencing at the end of the
performance period in respect of which the performance fee provisionally accrued.
The issue price of any shares to be issued to the Investment Manager shall be the higher of the average market price
of the shares over 20 Business Days prior to the end of the financial period in respect of which the performance fee
was earned and the published NAV (calculated excluding any deferred tax on capital gains) as at the end of such
performance period.
The first performance period shall be the period from Admission to 31 December 2007 and, thereafter, the performance
period shall be each 12 month period ending on 31 December. No fee has been accrued in the period to 31 December
2006. At each interim reporting date the Board will consider the need to make an accrual for any fee due under the
Investment Management Agreement taking into account performance to date and their view of the outlook for the
balance of each performance period.
Termination
The Investment Management Agreement may be terminated by either the Company or the Investment Manager on not
less than twelve months’ notice in writing but so as not to expire prior to 25 September 2010. Pursuant to the terms of
the Investment Management Agreement, the Company and the Investment Manager agree to review the terms of such
agreement on the fourth anniversary of the Investment Management Agreement.
(b) Valuers’ fees
The valuers, Savills SA, have agreed to provide valuation services in respect of the property portfolio.
24
£’000
Notes to the Accounts
3. Other expenses
Company Group
£’000 £’000
Direct operating expenses of let rental property - 1,446
Investment management fees (see note 2(a)) - 504
Provision for bad debts - 235
Valuation and other professional fees 30 427
Directors’ fees 42 42
Auditors remuneration for:
- audit 38 92
- other services to the Group - -
Other 60 255
In addition to the above, the auditors received £31,000 for services provided in connection with the launch
of the Company. This expense is set against the proceeds from the share issue.
170 3,001
4. Finance costs Company Group
£’000 £’000
Interest on borrowings - 1,962
Unrealised gains on interest rate swaps - (1,092)
Other interest 720 (108)
720 762
5. Taxation Company Group
£’000 £’000
Current income tax charge - 221
Deferred income tax relating to origination and reversal of temporary differences (see note 10) - 2,583
Total tax charge - 2,804
A reconciliation of the income tax charge applicable to the results from ordinary activities at the statutory income tax
rate to the charge for the period is as follows:
Company Group
£’000 £’000
Net profit from ordinary activities before taxation 1,139 7,701
Income tax at following - 2,460
applicable tax rates 0% 31.94%
Effects of:
Capital gains on revaluation of investment properties not taxable - (2,532)
Tax exempt income - (56)
Non-deductible expenses - 12
Losses not utilised - 100
Other timing differences - 237
Total tax charge - 221
25

Notes to the Accounts
5. Taxation (continued)
The group applicable income tax rate represents a blended rate across the tax jurisdictions in which the group
operates.
The Company is exempt from Guernsey taxation on dividend income derived outside Guernsey under the Income
Tax (Exempt Bodies) (Guernsey) Ordinance, 1989. A fixed annual fee of £600 is payable to the States of Guernsey in
respect of this exemption. No charge to Guernsey taxation will arise on capital gains.
The Directors intend to conduct the Company’s affairs such that the management and control is not exercised in
the United Kingdom and so that the Company does not carry on any trade in the United Kingdom. Accordingly, the
Company will not be liable for United Kingdom taxation on its income or gains other than certain income deriving from a
United Kingdom source. The Company’s subsidiaries are subject to local income tax on income arising on the property
portfolio after deduction of its allowable debt financing costs and other allowable expenses, dependent upon the
residence of each subsidiary.
As noted in accounting policy note 1(e), deferred income tax is not recognised on temporary differences at the time of
initial recognition arising from transactions treated as asset acquisitions. This policy is different from that used in the
pro-forma financial information contained in the prospectus dated 8 September 2006 which recognised deferred tax on
such differences on the balance sheet in order to calculate net assets per share.
6. Dividends
An interim dividend of 1.5 pence per share, totalling £2,100,000 will be paid on 25 April 2007 to shareholders on the
register on 10 April 2007. Although this payment relates to the period ended 31 December 2006, under International
Financial Reporting Standards it will be accounted for in the year ending 31 December 2007, being the year during
which it becomes unconditionally payable.
7. Earnings per share
The earnings per Ordinary Share are based on the net profit for the period of £4,897,000 and on 140,000,000 Ordinary
Shares, being the weighted average number of shares in issue during the period.
8. Investment properties Company Group
£’000 £’000
Freehold and leasehold properties
Purchases at cost - 275,950
Development costs - 2,258
Reclassification - (270)
Surplus on revaluation to fair value - 5,072
Closing valuation - 283,010
Included within the above is one leasehold, or the local equivalent, property with a closing market valuation of
£14,384,000.
Savills SA, who have appropriate professional qualifications and recent experience in the location and category of the
property being valued, completed a valuation of Group investment properties at 31 December 2006 on an open market
basis in accordance with the requirements of the Appraisal and Valuation Manual published by the Royal Institution of
Chartered Surveyors, which is deemed to equate to fair value. Fair value is determined by reference to market based
evidence, which is the amounts for which the assets could be exchanged between a knowledgeable, willing buyer
and a knowledgeable, willing seller in an arm’s length transaction as at the valuation date. The market value of these
investment properties amounted to £287,855,000.
On the acquisition of certain properties, the Group negotiated a purchase price adjustment for contingent deferred tax.
The aggregate amount of such adjustments obtained to 31 December 2006 was £4,845,000. It is assumed that in the
case of a future sale, any prospective buyer would seek a similar adjustment and so the closing valuation has been
reduced to reflect this.
The Group has adopted IAS 40, allowing leasehold properties to be carried at fair value rather than amortised over the
term of the lease. The same valuation criteria are therefore applied to leasehold as freehold properties. The property
valuer is independent and external to the Group. The property valuer takes account of deleterious materials included
in the construction of the investment properties in arriving at its estimate of open market valuation, when the Managers
advise the presence of such materials.
26
Notes to the Accounts
8. Investment properties (continued)
The Group has entered into leases on its property portfolio as lessor (see note 19 for further information). No one
property accounts for more than 15 per cent of the gross assets of the Group. The 10 largest properties per open
market value are shown on page 10. The only leasehold property which the Group holds as lessee has more than 30
years remaining on the lease term.
There are no restrictions on the realisability of the Group’s investment properties or on the remittance of income or
proceeds of disposal. However, the Group’s investments comprise European commercial property, which may be
difficult to realise as described in Liquidity risk, note 17. The majority of leases are on a full repairing basis and as such
the Group is not liable for costs in respect of repairs, maintenance or enhancements to its investment properties.
9. Investment in subsidiary undertakings
The Company owns 100 per cent of the issued ordinary share capital of KEIF Luxembourg Sarl and KEIF Luxembourg
Scandi Sarl, both companies incorporated in Luxembourg whose principal business is that of intermediary holding
companies.
Significant subsidiaries of KEIF Luxembourg Sarl and KEIF Luxembourg Scandi Sarl include:
Country of Incorporation Ownership
KEIF Norge AS Norway 100
KEIF Sweden AB Sweden 100
Feldrien Investments BV The Netherlands 100
10. Deferred tax assets and liabilities
(a) Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following items:
Group Group
Assets Liabilities
£’000 £’000
Investment property – on revaluation surplus - (2,583)
Tax loss carry-forwards 159 -
159 (2,583)
(b) Unrecognised deferred tax assets and liabilities
At 31 December 2006, deferred tax liabilities of £29,948,000 on temporary differences at the time of initial recognition
arising from transactions treated as asset acquisitions have not been recognised in accordance with IAS 12. Included
within this is an amount of £2,135,000 which is potentially payable under the initial acquisition agreement in the event of
certain subsidiaries being sold in the future.
27

Notes to the Accounts
11. Trade and other receivables
(a) Non-current
Company Group
£’000 £’000
Due from subsidiary undertakings 143,554 -
Interest rate swap assets (see note 17) - 2,135
(b) Current
143,554 2,135
Accrued income - 325
Rents receivable (net of provision for bad debts) - 4,786
VAT recoverable - 1,490
Other debtors and prepayments 18 10,122
18 16,723
Rents receivable, which are generally due for settlement at the relevant quarter end, are recognised and carried at the
original invoice amount less an allowance for any uncollectable amounts. An estimate for doubtful debts is made when
collection of the full amount is no longer probable. Bad debts are written off when identified.
Included within amounts due from subsidiary undertakings are £65,864,000 of convertible bonds subscribed for by
the Company. Each bond has a par value of €25, carries a fixed interest rate of 3.67 per cent per annum and has a
maturity date of the 49th anniversary of the date of issuance.
12. Cash and cash equivalents
All cash balances were held in current accounts or with banks on short term deposits with an original maturity of three
months or less at the period end.
13. Trade and other payables Company Group
£’000 £’000
Rental income received in advance - 3,033
Trade payables - 2,008
Investment manager’s fee payable - 504
Tax (including VAT) payable - 1,471
Due to subsidiary undertakings 32,613 -
Other payables 311 13,601
32,924 20,617
The Company’s payment policy is to ensure settlement of supplier invoices in accordance with stated terms.
28
Notes to the Accounts
14. Loans and borrowings
Company Group
£’000 £’000
Secured bank loans - 172,002
Terms and conditions of the Group’s outstanding loans and borrowings, all of which are secured over the property
assets to which they relate, were as follows:
Nominal
Interest Year of
Currency rate maturity £’000
Secured bank loans Euro 3.63% 2010-2011 133,307
Secured bank loans NOK 4.39% 2009-2011 38,695
The principal covenant relating to the loans included above requires a ratio of outstanding loan to
property market value of less than 85% is maintained.
15. Share capital and share premium account and reserves
172,002
Company and
Group
£’000
Authorised share capital
Ordinary Shares of nil par value each Unlimited
Issued share capital
140,000,000 Ordinary Shares of nil par value each, fully paid -
Share premium account
Received on the placing of Ordinary Shares 140,000
Less: issue costs (4,515)
135,485
Conversion to special distributable reserve (132,500)
Closing balance 2,985
Issued share capital and share premium account 2,985
The Royal Court of Guernsey confirmed the reduction of capital by way of a cancellation of the Company’s Share
Premium Account. The amount cancelled, being £132,500,000, has been credited as a distributable reserve
established in the Company’s books of account and shall be available to be used for all purposes permitted under
Guernsey law, including the buy back of shares and the payment of dividends.
Special distributable reserve
As noted above, the special distributable reserve was created by the cancellation of the Company’s Share Premium
Account. It is a distributable reserve to be used for all purposes permitted under Guernsey law, including the buy back
of shares and the payment of dividends.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations.
29

Notes to the Accounts
15. Share capital and share premium account and reserves (continued)
Revenue reserve
Any surplus arising from the net profit on ordinary activities after taxation after payment of dividends is taken to this
reserve, with any deficit up to the level of the special distributable reserve being charged to that reserve.
16. Related party transactions
Kenmore Financial Services Limited received fees for its services as Investment Manager. Further details are provided
in note 2. The total charge to the Income Statement during the period was £504,000 of which £504,000 remained
payable at the period end.
The Directors of the Company received fees for their services. Further details are provided in the Report of the Directors
on page 12 and in note 3. Total fees for the period were £42,000. No fees remained payable at the period end.
At the end of the period, the Company was due £143,554,000 from its immediate subsidiaries (including £65,864,000
of convertible bonds). The Company’s Income Statement for the period recognised £1,503,000 of interest income in
respect of this amount (£964,000 relating to the convertible bonds).
At the end of the period, the Company owed £32,613,000 to its immediate subsidiaries. The Company’s Income
Statement for the period recognised £456,000 of interest charge in respect of these amounts.
All of the above transactions were undertaken on an arm’s length basis.
17. Financial instruments
The Group’s investment objective is to provide ordinary shareholders with an attractive level of income together with
the potential for capital and income growth from investing in a diversified European commercial property portfolio.
Consistent with that objective, the Group holds European commercial property investments.
The main risks arising from the Group’s financial instruments are credit risk, liquidity risk and interest rate risk. The
Board reviews and agrees policies for managing its risk exposure. These policies are summarised below and have
remained unchanged for the period under review.
Credit risk
Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered
into with the Group. In the event of default by an occupational tenant, the Group will suffer a rental shortfall and incur
additional costs, including legal expenses, in maintaining, insuring and re-letting the property until it is re-let. The Board
receives regular reports on concentrations of risk and any tenants in arrears. The Managers monitor such reports in
order to anticipate, and minimise the impact of, defaults by occupational tenants.
The rent receivables of the Group at 31 December 2006 are disclosed in note 11.
With respect to credit risk arising from other financial assets of the Group, which comprise cash and cash equivalents
and certain other derivative instruments, the Group’s exposure to credit risk arises from default of the counterparty with
a maximum exposure equal to the carrying value of these instruments. There are no significant concentrations of credit
risk within the Group.
Liquidity risk
Liquidity risk is the risk that the Group will encounter in realising assets or otherwise raising funds to meet financial
commitments.
The Group maintains sufficient short-term liquidity to meet its immediate payment requirements.
The Group’s investments comprise European commercial property. Property and property related assets are inherently
difficult to value due to the individual nature of each property. As a result, valuations are subject to substantial
uncertainty. There is no assurance that the estimates resulting from the valuation process will reflect the actual sales
price even where such sales occur shortly after the valuation date.
30
Notes to the Accounts
17. Financial instruments (continued)
Interest rate risk
The Group’s exposure to interest rate risk relates primarily to the Group’s long-term debt obligations. These consist of
secured bank loans, further details of which are provided in note 14.
Interest rate exposure has been limited by the purchase of interest rate swap contracts. The Group has entered into
interest rate swaps with a notional amount of £139,839,000 used to hedge the exposure to changes in interest rates.
The swaps fix the interest rate payable to a weighted average rate of 3.80%, and a total rate inclusive of margin of
4.74%. The fair value of the interest rate swaps is disclosed in note 11(a) and is estimated as the present value of the
expected future net interest cash flows, based on current and expected future interest rates at the period end.
The interest rate profile of the Group and Company as at 31 December 2006 was as follows:
Assets where Weighted Weighted average
no interest average period for which
Fair value total Fixed rate Variable rate is received interest rate rate is fixed
Financial assets £’000 £’000 £’000 £’000 % (years)
Group
Cash and cash equivalents 33,581 - 33,581 - 3.58 -
Trade and other receivables 16,723 - - 16,723 - -
Company
50,304 - 33,581 16,723 3.58 -
Cash and cash equivalents 25,294 - 25,294 - 4.34 -
Trade and other receivables 143,572 142,051 - 1,521 4.62 49
168,866 142,051 25,294 1,521 4.54 -
Liabilities where Weighted Weighted average
no interest average period for which
Fair value total Fixed rate Variable rate is received interest rate rate is fixed
Financial liabilities £’000 £’000 £’000 £’000 % (years)
Group
Secured bank loans 169,867 137,696 32,171 - 3.80 4
Apart from the secured bank loans as disclosed in note 14, the fair value of financial assets and liabilities is not
materially different from their carrying value in the financial statements.
31

Notes to the Accounts
17. Financial instruments (continued)
Foreign currency risk
The Group’s underlying functional operating currencies are Sterling, the Euro, the Norwegian Kroner and the Swedish
Kroner. The Group’s income and expenditure will, however, be presented in Sterling. The Group is, therefore, likely to
be exposed to variations in currency exchange rates which might affect the results of operations. The Directors intend
to operate prudent policies with respect to currency hedging. Where feasible, and as appropriate, the Group will seek
to finance assets using local currency denominated financing.
18. Capital commitments
The Group has no capital commitments as at 31 December 2006.
19. Lease length
The Group leases out its investment properties under operating leases.
The total minimum future lease payments due, analysed by the year in which they fall due, was as follows:
Group £’000
Less than one year 22,806
Between two and five years 73,155
Over five years 42,960
Total 138,921
The largest single tenant at the year end accounted for 7.3% of the current annual rental income.
The unoccupied property expressed as a percentage of estimated total rental value was 8.5% at the period end.
The Group has entered into commercial property leases on its investment property portfolio. These properties,
held under operating leases, are measured under the fair value model as the properties are held to earn rentals.
The majority of these non-cancellable leases have remaining non-cancellable lease terms of between 5 and 15 years.
Analyses of the nature of investment properties and leases are provided in ‘Portfolio Statistics’ on page 9.
32
Notice of Annual General Meeting
Notice is hereby given that the First Annual General Meeting of Kenmore European Industrial Fund Limited will be held at
Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL on 15 May 2007 at 5pm for the following purposes.
To consider and, if thought fit, pass the following as Ordinary Resolutions:
1 That the accounts and the reports of the Directors and of the Auditors for the period ended 31 December 2006 be
received and approved.
2 That KPMG Channel Islands Limited be re-appointed as Auditors and the Directors be authorised to determine
the Auditors’ remuneration.
3 That Mr C Spencer, who retires at the first Annual General Meeting following his appointment, be re-elected as a Director.
4 That Ms H Green, who retires at the first Annual General Meeting following her appointment, be re-elected as a Director.
5 That Mr J Kennedy, who retires at the first Annual General Meeting following his appointment, be re-elected as a Director.
6 That Mr J Gamble, who retires at the first Annual General Meeting following his appointment, be re-elected as a Director.
7 That Mr G Weaver, who retires at the first Annual General Meeting following his appointment, be re-elected as a Director.
To consider and, if thought fit, pass the following as a Special Resolution:
1 That the Company be authorised, in accordance with section 5 of The Companies (Purchase of Own Shares)
Ordinance 1998 (the ‘‘Ordinance’’), to make market purchases (within the meaning of section 18 of the Ordinance) of
ordinary shares of no par value each (‘‘Ordinary Shares’’), provided that:
(a) the maximum number of Ordinary Shares hereby authorised to be purchased shall be 14.99 per cent of the issued
Ordinary Shares on the date on which this resolution is passed;
(b) the minimum price which may be paid for an Ordinary Share shall be 1p;
(c) the maximum price (exclusive of expenses) which may be paid for an Ordinary Share shall be 105 per cent of the
average of the middle market quotations (as derived from the Daily Official List) for the Ordinary Shares for the five
business days immediately preceding the date of purchase;
(d) unless previously varied, revoked or renewed, the authority hereby conferred shall expire at the conclusion of the
Annual General Meeting of the Company to be held in 2008, or on 15 August 2008, whichever is the earlier, save that
the Company may, prior to such expiry, enter into a contract to purchase Ordinary Shares under such authority and may
make a purchase of Ordinary Shares pursuant to any such contract.
By order of the Board
Northern Trust International Fund Administration Services (Guernsey) Limited
Secretary
Trafalgar Court, Les Banques
St Peter Port, Guernsey GY1 3QL
27 February 2007
Notes:
1. A member who is entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend and, on a
poll, vote instead of him or her. A proxy need not be a member of the Company.
2. A form of proxy is enclosed for use at the Meeting. The form of proxy should be completed and sent, together with
the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or
authority, so as to reach Computershare Investor Services (CI) Limited, Ordnance House, 31 Pier Road, St Helier, Jersey
JE4 8PW not later than 5pm on 13 May 2007.
3. Completing and returning a form of proxy will not prevent a member from attending in person at the Meeting and voting
should he or she so wish.
4. The existing Articles of Association and the Directors’ letters of appointment will be available for inspection at the
Annual General Meeting.
33

Shareholder Information
Dividends
Dividends are paid in bi-annual instalments in April and September each year. Shareholders who wish to have
dividends paid directly into a bank account rather than by cheque to their registered address can complete a mandate
form for the purpose. Mandates may be obtained from Northern Trust International Fund Administration Services
(Guernsey) Limited, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL on request. Where dividends
are paid directly to shareholders’ bank accounts, dividend tax vouchers are sent directly to shareholders’ registered
addresses.
Share Price
The Company’s Ordinary Shares are listed on the London Stock Exchange. Prices are given daily in the Financial Times
under ‘‘Investment Companies’’ and in other newspapers.
Change of Address
Communications with shareholders are sent to the address held on the share register. In the event of a change of
address or other amendment this should be notified to Northern Trust International Fund Administration Services
(Guernsey) Limited, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL under the signature of the
registered holder.
Financial Calendar
25 April 2007 Payment of first interim dividend
15 May 2007 Annual General Meeting
22 August 2007 Announcement of interim results
September 2007 Payment of second interim dividend
Shareholder Enquiries
Contact Northern Trust International Fund Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques,
St Peter Port, Guernsey GY1 3QL. Additional information regarding the Company may also be found at its website
address which is: www.kenmoreeifund.com
34
Corporate Information
Directors (all non-executive)
CGH Weaver (Chairman)
JJ Gamble
HF Green
JAB Kennedy
CP Spencer
Registered Office
Trafalgar Court
Les Banques
St Peter Port
Guernsey
Administrator, Secretary and Registrar
Northern Trust International Fund
Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey GY1 3QL
Investment Manager
Kenmore Financial Services Limited
33 Castle Street
Edinburgh EH2 3DN
Property Valuation Agents
Savills SA
14 rue Auber
85009 Paris
France
Auditors
KPMG Channel Islands Limited
20 New Street
St Peter Port
Guernsey GY1 4AN
Solicitors as to English Law
Herbert Smith LLP
Exchange House
Primrose Street
London EC2A 2HS
Advisers as to Guernsey Law
Ozannes
1 Le Marchant Street
St Peter Port
Guernsey GY1 4HP
Marketing Adviser
Financial Dynamics Limited
Holborn Gate
26 Southampton Buildings
London WC2A 1PB

www.kenmoreeifund.com
KEIF ANNUAL REPORT AND ACCOUNTS FOR THE PERIOD ENDED 31 DECEMBER 2006