Annual Financial Report

Schroder Global Real Estate Securities Limited (formerly Investors in Global Real Estate Limited)

Annual Results Announcement

Schroder Global Real Estate Securities Limited (formerly Investors in Global Real Estate Limited) ("the Company") hereby submits its Annual Report and Accounts for the year ended 31 December 2014 as required by the UK Listing Authority's Disclosure and Transparency Rule 6.3.5.

The Company's Annual Report and Accounts for the year ended 31 December 2014 are also being published in hard copy format and an electronic copy will shortly be available to download from the Company's website www.schroderglobalrealestatesecurities.com

The Company has submitted its Annual Report and Accounts to the National Storage Mechanism and it will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.

The financial information set out in this announcement does not constitute the Company's statutory accounts for the year ended 31 December 2014. All figures are based on the audited financial statements for the year ended 31 December 2014.

The financial information for the year ended 31 December 2014 is derived from the financial statements delivered to the UK Listing Authority. The Auditors reported on those accounts, their report was unqualified and did not contain a statement under Section 263(2) and 263(3) of the Companies (Guernsey) Law, 2008.

The announcement is prepared on the same basis as will be set out in the Report and Accounts for the year ended 31 December 2014.

Investment Objective, Directors and Alternative Investment Fund Managers ("AIFM") Directive

Investment Objective

At an Extraordinary General Meeting ("EGM") held on 14 October 2014, shareholders resolved to amend the Company's investment objective. The Company's new investment objective is to provide investors with an attractive total return, through investing in listed global real estate securities with strong fundamentals, offering sustainable income and a progressive dividend potential. For additional information refer to the Strategic Report.

Directors

Crispian Collins (Chairman), aged 67

Mr. Collins was formerly Vice Chairman, UBS Global Asset Management and a member of the Group Managing Board of UBS AG. On leaving Oxford University in 1969, Mr. Collins joined Phillips & Drew, London, which culminated in his appointment as Chief Executive in 1998 and Executive Chairman in 1999. He was a founding sponsor of the Phillips & Drew property team. Mr Collins was appointed to the Board on 25 April 2006.

Richard Saunders, aged 60

Mr. Saunders is Member of Core Plus Properties LLC , a private real estate investment company which currently owns and manages property in the North East and Mid-Atlantic regions of the United States. Mr. Saunders focuses on the Company's capital markets activities with responsibility for acquisitions and finance. From 1980 to 1995, Mr. Saunders was with Baring, Houston & Saunders. He moved to the United States of America in 1993 and his subsequent roles have included working for ING Realty Partners LLC and as Chief Investment Officer of Healey & Baker Investment Advisors. Mr. Saunders has significant international experience having advised investors and companies across Europe, North America, South America, South Africa and Asia. Mr Saunders was appointed to the Board on 25 April 2006.

Richard Sutton, aged 79

Mr. Sutton is formerly a partner of the Delaware law firm Morris, Nichols, Arsht & Tunnell. He is a member of the bar of the US Supreme Court and of the American Law Institute. He is an independent trustee of the CBRE Clarion Global Real Estate Income Fund and the Unidel Foundation. He is a graduate of the University of Delaware and of Yale Law School. Mr Sutton was appointed to the Board on 25 April 2006.

Christopher Legge, aged 59*

Mr. Legge is Guernsey resident and has over 25 years' experience in the financial services industry. Mr. Legge was appointed as an independent non-executive director of the Company and Chairman of the Audit Committee with effect from 1 January 2015. He qualified as a Chartered Accountant in London in 1980 with Pannell Kerr Forster and subsequently moved to Guernsey in 1983 to work for Ernst & Young, progressing from Audit Manager to Managing Partner in the Channel Islands. Mr. Legge retired from Ernst & Young in 2003 and currently holds a number of directorships in the financial sector. Mr. Legge is a Fellow of the Institute of Chartered Accountants in England and Wales and holds a BA (Hons) in Economics from the University of Manchester.

Trevor Ash, aged 68**

Mr. Ash has over 30 years of investment experience. He is a Fellow of the Chartered Institute for Securities & Investment. He was formerly Managing Director of Rothschild Asset Management (C.I.) Limited. He is a director of a number of hedge funds, fund of hedge funds, venture capital, derivative and other offshore funds including several managed or advised by Insight and Merrill Lynch. Mr Ash retired as a director of NM Rothschild & Sons (CI) Limited, the banking arm of the Rothschild Group in the Channel Islands in 1999. Mr. Ash is a resident of Guernsey. Mr. Ash was appointed to the Board on 25 April 2006.

* Mr. Legge was appointed as a Director on 1 January 2015 and is Chairman of the Audit Committee.

** Mr. Ash retired on 1 January 2015 and was Chairman of the Audit Committee until that date.

Alternative Investment Fund Managers ("AIFM") Directive

Certain pre-sale, regular and periodic disclosures required by the Directive may be found either in this Annual Report or on the website at www.schroders.co.uk/its

Financial Highlights

Financial Record Since Launch

1 Borrowings used for investment purposes, less cash, expressed as a percentage of net assets. If the amount so calculated is negative, this is shown as "Net cash".

2 Represents the period from 31 May 2006, which is the date the Company began investing, to 31 December 2006.

3 Ongoing Charges represents the management fee and all other operating expenses excluding finance costs, transaction costs and any performance fee payable, expressed as a percentage of the average daily net asset values during the year. The figures for 2011 and prior years represent the expenses calculated as above, expressed as a percentage of the average asset values at the beginning and end the year. The figure for 2006 has been adjusted to an annualised basis.

4 Source: Morningstar. Rebased to 100 at 31 May 2006.

5 Calculated using capital net asset values plus income reinvested for the period to 31 December 2008 and cum income net asset values plus income reinvested for the period thereafter.

Chairman's Statement

Appointment of New Investment Manager

2014 has been an exciting and busy year for the Company. Following an extensive review process Schroder Real Estate Investment Management Limited (previously Schroder Property Investment Management Limited) was appointed as the new Investment Manager for the Company. Having worked with the new Investment Manager for the past six months, the Board is confident that the Company has the appropriate structure and skills to achieve its key objectives of growing the Company whilst maintaining strong investment performance.

Performance

The Company has delivered a strong return for the year, from both a share price return and net asset value total return. The net asset value total return for the year was 21.8% (2013: 0.4%) and the share price total return was 14.5% (2013: 0.8%). The Investment Manager's Review provides a more detailed description of performance, market background and investment outlook for the Company but initial indications are that the changes made over the year will be positive.

Dividends

Following a strategic review, it was concluded that superior performance over the long term was best pursued by the Company focusing on shareholders' total return, rather than targeting primarily a higher income return. This resulted in a reduction of the dividend to a level which is expected to be sustainable over the medium term based on the Company's net portfolio income. This should offer potential for a progressive dividend for shareholders. The quarterly dividend was reduced to 0.375 pence per share (from 1.05 pence) with effect from the payment for the quarter to 30 September 2014.

As a result of this change in policy, dividends declared in respect of 2014 have fallen 32.1%, from 4.20p to 2.85p per share.

Alternative Investment Fund Managers ("AIFM") Directive

Schroder Real Estate Investment Management Limited was appointed as the Alternative Investment Fund Manager on 2 July 2014 in conjunction with its appointment as the Investment Manager. Schroder Real Estate Investment Management Limited, a wholly owned subsidiary of Schroders plc ("Schroders"), has AIFM regulatory permission as the Alternative Investment Fund Manager (the "Manager") to provide portfolio management and risk management services to the Company in accordance with an Alternative Investment Fund Manager Agreement.

Northern Trust (Guernsey) Limited continues to provide company secretarial, administration and accounting services. The Company also entered into an agreement with Northern Trust (Guernsey) Limited for the provision of depositary services with effect from 2 July 2014. Depositary's fees are payable to Northern Trust (Guernsey) Limited monthly in arrears at a rate of 0.03% of the net asset value of the Company below £100 million and 0.015% on net asset value in excess of £100 million as at the last business day of the month subject to a minimum fee of £30,000 per annum.

Further details of both the Alternative Investment Fund Manager Agreement and the Depositary Services Agreement may be found in the Report of the Directors.

Gearing Policy and AIFM Directive Leverage Limit

During the year under review, and following the appointment of the new Investment Manager, the Company reviewed the gearing in the portfolio. There is inherent gearing in the Company due to the leverage employed by companies held within the portfolio. The Board believes that, at the current time, introducing an element of gearing is not necessary to achieve the Company's objectives. It was therefore agreed that it was not necessary to employ the use of leverage to enhance shareholder returns. The level of gearing continues to be monitored closely by the Board and managed as necessary.

The AIFM Directive has introduced a requirement for the Investment Manager to set maximum levels of leverage, using a wider definition than borrowing and including the use of derivatives. Further details on leverage are given in the Strategic Report.

Full details of this leverage limit may be found on the Investment Manager's website at www.schroders.co.uk/its.

Issue of Shares and Discount Control Management

At an EGM in October 2014, shareholders passed a resolution that new shares would only be issued, or Treasury shares reissued, at a price equal to or greater than the prevailing NAV per share, in order to prevent dilution occurring.

However the Board believes that it is important to have the ability to issue shares to satisfy demand and broaden the shareholder base, should the shares begin trading at premium to NAV.

During the year the Board also resolved to abolish the Company's previously announced discount management policy with immediate effect, in order to create a stable platform for the investment strategy to be executed and for Shareholder returns to be maximised.

Outlook

Although the share price continues to trade at a discount to NAV, the Company has had a successful year. Further, we believe that the change in Investment Manager and subsequent change in strategy will provide a strong foundation which will enable the Company to grow over time.

The new objective is focused on investing in listed global real estate securities with strong fundamentals, offering sustainable income and progressive dividend potential. This strategy will enable the Investment Manager to build a portfolio of global real estate companies that hold the best quality assets, in the strongest markets, with the strongest balance sheets and that have management teams whose interests are aligned with shareholders. We believe that such companies outperform the market over the long term and will create an attractive proposition for investors. We are confident that the new Investment Manager will be able to deliver a strong performance which we hope will, in turn, lead to a growing and increasingly diversified investor base.

The Company is the only listed Investment Trust dedicated to investing in global real estate securities and, as investors increasingly look to allocate to this sector, we believe that the Company will be in a strong position to grow in size and continue delivering value to shareholders. The Directors continue to look at all options available to them in order to try and grow the Company alongside the investment strategy.

Board Succession

The Board is currently considering its composition and it is expected that a new Director will be appointed during 2015 in addition to the retirement of Richard Saunders towards the latter half of 2015.

Annual General Meeting

The Annual General Meeting ("AGM") will be held in Guernsey at 10.00 a.m. on Friday, 12 June 2015 and shareholders are invited to attend.

Crispian Collins

Chairman

21 April 2015

Investment Manager's Review

2014 started with aftershocks from the taper tantrums of 2013. The global recovery gathered pace through the year but faltered towards the end as further geopolitical tensions weighed on investor sentiment, notably in the Ukraine and the Middle East. Meanwhile, the decline in the oil price, which had begun during the summer, gathered momentum as Saudi Arabia refused to cut production in response to the glut in the market. The fall in oil prices may go down as the single most important development of 2014.

As the global economy struggles to recover, we believe that the instability experienced in 2014 will be beneficial to the property sector as investors seek a safe haven. This has been acknowledged by some of the largest government pension schemes including the world's largest government scheme, the Japanese Government Pension Investment Fund (GPIF), and Europe's largest pension fund, the Norwegian Government Pension Fund, which have both increased allocations to real estate by 5%. The flood of capital has not, though, boosted supply in many markets. We believe that these effects will support the fundamentals of the listed sector in the major global gateway markets through 2015.

In Europe, a select number of companies continue to surprise to the upside; those with exposure to London offices have seen strong rental growth. We anticipate that this trend will continue as a lack of development finance results in low levels of supply. Tenant demand is improving in this environment of scarce supply. Germany was the star performer for the year on the back of a weakening currency and continued rental growth. On the flipside, Italian and French stocks struggled as they have yet to make the necessary structural reforms needed to support growth in their home markets. Consumer sentiment is improving in France but this may take some time to support rental growth in the retail sector. The UK continued to experience strong demand from both domestic and overseas investors and we expect this to continue into 2015.

The US rebounded in the second quarter of 2014 after a 'weather related' dip at the start of the year with the property sector ending the year up by over 30% (FTSE EPRA/NAREIT USA in USD). The US economy continues to build critical mass and momentum, with real estate fundamentals remaining healthy across most major property types.

The slow progress of the Chinese economy has been a fringe concern for investors for sometime. Whilst stimulus measures are in place, there is a headwind of high property supply that is hurting prices and slowing volumes given that real estate accounts for 10% of GDP. Despite the relaxation of home purchase restrictions in many areas, the fundamentals are still looking weak, with a slowdown in residential sales and economic growth. Hong Kong continues to be one of the most attractive markets globally. Nonetheless, employment concerns, lower consumption levels and anti-corruption measures in China are feeding into sluggish growth.

Elsewhere in Asia, the Tokyo office market has shown an improvement in fundamentals but the weakening Yen and growing unease over the economy resulted in negative returns for the sector. Our focus on developers detracted from returns for the year as construction costs escalated. Singapore office market dynamics are good and increasingly skewed in favour of the landlords. We expect that current tight supply will remain supportive of rents which should grow around 7% in 2015. In Australia, the economy continues to struggle on the back of slower commodities demand from China. Asia continues to be one of the more challenging regions to invest in due to lack of transparency, ownership structures and government policy. The trading levels of companies are attractive but we remain conservative on how we account for risk in these markets.

Portfolio Positioning and Performance

Under the previous investment manager the NAV per share of your Company rose 10.0% for the first six months of 2014. This performance continued into the second half with 10.7% of NAV return for the remainder of the year resulting in a total return of over 20%.

The portfolio was repositioned in October following Shareholder approval of the change in strategy. As a result of this, your Investment Manager re-focused the portfolio on companies that provide higher total returns.

Investment Outlook

There are two likely economic scenarios we anticipate as we head into 2015. Following the Federal Reserve's guidance on interest rates, the announcement by the European Central Bank and the elections in Greece, the most likely scenario, in the short term, is that the global economy weakens. This will put pressure on central banks to keep interest rates low and to continue their policies of quantitative easing. Due to its resilient income stream, this is likely to lead to a continued demand for property from investors searching for yield.

On the flipside, a strong economic growth scenario will most likely lead to interest rate rises. As long as these rises are the result of sustainable economic growth, then the property sector should see increased occupier demand as companies look to expand. This in turn will lead to rental growth and should offset any increased borrowing costs property firms may be exposed to. Companies with property in secondary locations may struggle, as occupier demand is likely to be stronger in major cities and prime locations which are normally held by the larger quality names in the sector.

Whatever macro economic back drop materialises, investors will need to be selective as to the companies in which they invest. Market dynamics will impact different sectors to varying degrees and only those companies with strong and experienced management teams will have the ability to weather the negative macro headwinds. For example, the lack of supply in the Singapore office sector has resulted in fundamentals favouring landlords, as demand increases but residential prices are expected to decline over the next 12 months. We believe that our focus on bottom up fundamentals enables us to identify those companies which can create value irrespective of the drivers of the markets in which they operate.

The US listed property sector delivered strong returns in 2014, but the key question now is whether this momentum can continue. Undoubtedly a large number of US property companies are trading at fair value, but we still believe that there is upside potential on a selective basis. Real estate fundamentals remain solid and the initial outlook for 2015 appears to be positive across most major property types. San Francisco, Seattle and New York City continue to experience growth on the back of demand from the technology, media and telecommunications (TMT) sector, which is showing no signs of slowing down.

We expect the eurozone economy to continue to grow in 2015, although growth will be modest and uneven. France and Italy need to implement further supply-side reforms to improve their competitiveness, tempering growth prospects and political uncertainty in Greece have depressed business confidence. However, there are also several positives. Consumers are benefiting from the fall in energy and food prices, exporters should start to gain from the euro's depreciation, the eurozone's big banks have been re-capitalised and Portugal and Spain are now seeing growth in employment. Defensive companies in Europe, looking to provide a sustainable and growing yield, should continue to do well. The main upside risk in the short term is that the inflow of capital from Asia and the USA could trigger a widespread fall in property yields, which would push annualised total returns higher for a limited period. The main downside risk is that the sovereign debt crisis could re-ignite, either because the Greek government decides to re-negotiate its debts, or because deflation in the eurozone becomes entrenched.

Although the global economic outlook is not substantially improved from 12 months ago there are markets - such as the UK - which have shown marked improvement. The low yield, low growth environment should support the real estate sector as investors continue to chase yield. This, twinned with increasing allocations to real estate globally, should prove beneficial to companies which own assets in prime locations.

Occupier demand is growing and this is driving rental growth in major global gateway cities such as London. As capital values reach levels that they experienced prior to the global financial crisis, it will be the occupier market - leading to rental growth - which should be the major driver of performance. We will remain keenly focused on companies whose prices do not reflect the risk-adjusted value of their respective businesses. Our view is that this approach will continue to serve our investors well as we head into 2015.

Schroder Real Estate Investment Management Limited

21 April 2015

Investment Portfolio

As at 31 December 2014

Strategic Report

Company Structure

Schroder Global Real Estate Securities Limited (formerly Investors in Global Real Estate Limited), (the "Company") was incorporated on 25 April 2006 and is registered in Guernsey as an Authorised Closed-Ended Investment Company. The Company is listed on the London Stock Exchange. The Company carries on the business of an investment company and invests in global real estate securities.

Key performance indicators

The Board measures the development and success of the Company's business through achievement of the Company's investment objective which is considered to be the most significant key performance indicator of the Company.

The Board continues to review the Company's Ongoing Charges to ensure that the total costs incurred by shareholders in the running of the Company remain competitive. An analysis of the Company's costs, including the investment management fee, Directors' fees and other administrative expenses, is submitted to each Board meeting and the investment management fee is reviewed at least annually.

Role and Composition of the Board

The Board is the Company's governing body and has overall responsibility for maximising the Company's success by directing and supervising the affairs of the business and meeting the appropriate interests of shareholders and relevant stakeholders, while enhancing the value of the Company and also ensuring protection of investors. A summary of the Board's responsibilities is as follows:

- statutory obligations and public disclosure;

- strategic matters and financial reporting;

- risk assessment and management including reporting compliance, governance, monitoring and control; and

- other matters having a material effect on the Company.

The Board's responsibilities for the Annual Report are set out in the Statement of Directors' Responsibilities.

As at 31 December 2014, the Board comprised four Directors all of whom the Company considers to be independent. All Directors are non-executive and all Directors are independent as prescribed by the Listing Rules. Mr Sutton was not considered to be independent prior to 2 July 2014 as he is an independent trustee of the CBRE Clarion Global Real Estate Income Fund, a vehicle managed by CBRE Clarion Securities LLC, the Investment Manager until 2 July 2014. The Board's approach to diversity is that candidates for Board vacancies are selected based on their skills and experience, which are matched against the balance of skills and experience of the overall Board, taking into account the specific criteria for the role being offered. Candidates are not specifically selected on the grounds of their gender but this is taken into account when the Board examines its overall balance, skill set and experience. The Board is currently considering its composition and refreshment. For additional information refer to the Chairman's Statement.

Mr Ash retired as a Director and Mr Legge was appointed as a Director on 1 January 2015.

Management

The Investment Manager is authorised and regulated by the Financial Conduct Authority ("FCA") and provides portfolio management and risk management services to the Company under the terms of an Alternative Investment Fund Managers Agreement. The Investment Manager also provides general marketing support for the Company and manages relationships with key investors, in conjunction with the Chairman, other Board members or the corporate broker as appropriate. Northern Trust International Fund Administration Services (Guernsey) Limited provides company secretarial, administration and accounting services, and Northern Trust (Guernsey) Limited provide Depositary services.

The Investment Manager has in place appropriate professional indemnity cover.

The Schroders Group manages £300 billion (as at 31 December 2014) on behalf of institutional and retail investors, financial institutions and high net worth clients from around the world, invested in a broad range of asset classes across equities, fixed income, multi-asset and alternatives.

Investment Objective

At an EGM held on 14 October 2014, the shareholders resolved to amend the Company's investment objective. The Company's new investment objective is to provide investors with an attractive total return, through investing in listed global real estate securities with strong fundamentals, offering sustainable income and a progressive dividend potential.

Investment Strategy

The Board has delegated management of the Company's portfolio to the Investment Manager. The Investment Manager manages the portfolio with the aim of helping the Company to achieve its investment objective. Details of the Investment Manager's strategy, and other factors that have affected performance during the year, are set out in the Investment Manager's Review.

Investment Policy

The Company's investment policy is flexible, enabling it to invest in a wide variety of listed securities including equities, preference shares, debt, convertible securities, warrants, interests in collective investment schemes (including limited partnerships and unit trusts) and other securities issued by companies which derive a significant proportion of their revenues or profits from real estate.

There will be no material change to the investment objective or policy described above unless previously sanctioned by shareholders in a general meeting.

The Investment Manager seeks to reduce portfolio risk by limiting investment concentration in any individual security, having exposure to many different property sectors, and also many different geographic regions. In addition, the Investment Manager undertakes a listed securities portfolio liquidity screen to ensure relatively liquid positions in the Company's portfolio.

Gearing

The Company has the power under its Articles to borrow up to an amount equal to 25 per cent of its net assets at the time of the drawdown. The Board's policy is to limit gearing to 25%. Gearing for this purpose is defined as borrowings used for investment purposes, less cash, expressed as a percentage of net assets. If the figure so calculated is negative, this is described as "net cash".

At the beginning of the year under review gearing was 10.2% but at the end of the year, this had changed to a net cash position of 0.6%. Further details on gearing policy are given in the Chairman's Statement.

The Company has an uncommitted multicurrency overdraft facility currently made available to it by Northern Trust (Guernsey) Limited to a maximum amount of £15,000,000 or 15% of the value of listed securities, whichever is lower. This facility is secured by a floating charge over the Company's assets. Interest is payable at a rate of LIBOR as quoted in the market for the relevant currency and loan period, plus a margin of 1%, plus mandatory costs which are the lender's costs of complying with certain regulatory requirements. The facility was undrawn at 31 December 2014 (2013: £6,259,000). Further information is given in note 20 to the accounts.

Leverage

Leverage is any method by which the Company increases its exposure to changes in market prices. In addition to the overdraft facility outlined above, the Company may employ leverage through other financial instruments such as derivatives or forward currency contracts, although it did not do so during the year. Leverage is then expressed as the ratio of the Company's total exposure to its net asset value. The Alternative Investment Fund Managers ("AIFM") Directive requires that this ratio is calculated in accordance with two methodologies, the "Gross Method" and the "Commitment Method". The essential difference between the two is that the Commitment Method allows netting off for the effect of hedges under certain strict conditions. Further details on how these ratios are calculated are given on the web at www.schroders.co.uk/its. The AIFM Directive requires the Investment Manager to set maximum leverage ratio limits as defined in the AIFM Directive. Accordingly the limits have been set at 2.25 for both the Gross and Commitment calculation methods. The Investment Manager expects that, under normal market conditions, the level of leverage will be substantially lower than these maximum limits particularly as the Company does not utilise derivatives or forward currency contracts. At 31 December 2014, the Company's Gross leverage ratio and its Commitment leverage ratio both stood at 1.0. The Manager may change the maximum level of leverage from time to time. Any changes will be disclosed to shareholders in accordance with the AIFM Directive.

Investment Philosophy and Process

The investment philosophy of the Investment Manager stems from an inescapable truth: real estate companies in supply constrained markets with strong management teams and low gearing, outperform. In simple terms, we like to hold companies that own buildings that high quality tenants want to occupy. It is equally important that these companies do not borrow too heavily against the value of these buildings. The result is reliable and growing income from a stable capital base. We remain unimpressed by companies that do the opposite of this. The folly of a 'quick buck' strategy has been repeated through multiple economic cycles: too much supply and too much debt results in wholesale value destruction. We do not believe that investing in companies where equity capital is put at risk, offsets the potential returns on offer.

Unsurprisingly, our investment process quantifies the risk and valuation of a company based on this philosophy. This quantification of risk means that we explicitly measure how good a company is. If we ally the risk score to the valuation of that business, we can build a portfolio of companies based on solid foundations. These companies are better able to weather broader economic storms.

This disciplined approach means longer holding periods and better returns for shareholders. Your Investment Manager remains committed to providing that.

Stock Research

Proprietary research is conducted by a team of analysts in Asia, North America and Europe. This ensures breadth and depth of coverage and, importantly, it helps identify unique opportunities.

The research process has four components. These components ensure analytical rigour, open communication and tie the team into constructing a global portfolio of property securities.

- Stock coverage - All analysts are expected to cover stocks in their home markets. In addition, there is a system of secondary coverage in place. The team is encouraged to travel to different regions in order to broaden their knowledge of companies and markets. This increases the knowledge of the global portfolio. It is critical that team members view the portfolio in its global context, understanding the total return that the whole portfolio will generate. This increases the scrutiny of each investment decision;

- Flexible process - The process relies on the local analysts appraising opportunities using local knowledge. This is vital as global property markets are not homogenous, with no single way of valuing companies. The two-step process means that analysts are challenged on their assumptions;

- Team communication - The team formally communicates on a call once a week with a fixed agenda in place. The primary reason for this call is to consider changes to the portfolio. Analysts have the opportunity to present their investment case to the team for questioning. In addition to the weekly call, team members have regional meetings and communication on secondary stocks on a frequent basis; and

- Company and market knowledge - Meeting management and understanding real estate markets is the backbone to the research process. Analysts are encouraged to spend time with management teams and visiting assets. This aligns with the fundamental approach of the investment process.

Stock Selection/Portfolio Construction

The investment process and subsequent portfolio construction is team-based. Every team member has the ability to shape the portfolio. However, the ultimate stock selection and portfolio construction rests with the co-managers.

Consistent with our investment process the portfolio construction is largely driven by bottom-up stock selection. We do not seek to target specific weightings to sectors, countries or regions. The risk analysis and investment process ensure that the team is constantly aware of excessive or unintended concentrations.

The decision to invest in a company is primarily driven by an analyst's conviction that a stock is fundamentally undervalued and there are catalysts that will narrow the gap between the currently traded price and Schroders' fair value assessment, leading to outperformance.

Investment Restrictions and Spread of Investment Risk

Risk in relation to the Company's investments is spread as a result of the Investment Manager monitoring the Company's portfolio with a view to ensuring that the portfolio retains an appropriate balance to meet the Company's investment objective.

In order to comply with the Listing Rules, the Company will not invest more than 10%, in aggregate, of the value of its total assets (calculated at the time of any relevant investment) in other investment companies or investment trusts which are listed on the Official List (save to the extent that those investment companies or investment trusts have stated investment policies to invest no more than 15% of their gross assets in other investments).

The Company's investment restrictions are as follows:

(a) distributable income will be principally derived from investment;

(b) not more than 20 per cent. of total assets to be lent to or invested in the securities of any one company or group at the time when the investment or loan is made; for this purpose any existing holding in the company concerned will be aggregated with the proposed new investment;

(c) not more than 10 per cent. of total assets will be invested in any one security;

(d) the Company shall at all times have a minimum portfolio exposure to at least four of the following listed real estate markets:

- The United States of America;

- Canada;

- Asia (including Hong Kong, Japan, Singapore);

- The United Kingdom;

- Continental Europe;

- Australia and New Zealand;

- Other

(e) not more than 65 per cent. of total assets will be invested at the time of investment in any one of the listed real estate markets referred to in (d) above;

(f) dividends will not be paid unless they are substantially covered by income received from underlying investments;

(g) the Company will be a passive investor and will not seek to control, or be actively involved in the management of any companies or businesses in which it invests; and

(h) the Company will not be a dealer in investments.

In the event of any breach of the investment restrictions applicable to the Company, shareholders will be informed of the actions to be taken by the Investment Manager by notice sent to the registered addresses of the shareholders in accordance with the Articles or by an announcement issued through a regulatory information service approved by the FCA.

No breaches of these investment restrictions took place during the year ended 31 December 2014.

The Investment Portfolio and the Investment Manager's Review demonstrate that, as at 31 December 2014, the portfolio was invested in 11 countries and in 8 different industry sectors within such countries. There were 50 equity holdings in the portfolio at the year end. The Board therefore believes that the objective of spreading investment risk has been achieved in this way.

Performance

An outline of performance, market background, investment activity and portfolio strategy during the year under review, as well as outlook, is provided in the Chairman's Statement on the Investment Manager's Review.

Principal Risks and Uncertainties

With the assistance of the Administrator and the Investment Manager, the Board has drawn up a risk matrix, which identifies the key risks to the Company. These fall into the following broad categories:

- Investment Risks: The Company is exposed to the risk that its portfolio fails to perform in line with the Company's objectives if it is inappropriately invested or markets move adversely. The Board reviews reports from the Investment Manager at each quarterly Board meeting, paying particular attention to the diversification of the portfolio and to the performance and volatility of underlying investments. Further details on Investment Risks are discussed in the Investment Manager's Review;

- Strategic Risk: Over time investment vehicles and asset classes can become out of favour with investors or may fail to meet their investment objectives. This may be reflected in a wide discount of the share price to underlying net asset value. The Directors periodically review whether the Company's investment remit remains appropriate and continually monitor the success of the Company in meeting its stated objectives;

- Operational Risks: The Company is exposed to the risks arising from any failure of systems and controls in the operations of the Investment Manager or the Administrator. The Board receives reports annually from the Investment Manager and Administrator on their internal controls and reviews pricing reports covering the valuations of underlying investments at each quarterly Board meeting;

- Accounting, Legal and Regulatory Risks: The Company is exposed to risk if it fails to comply with the regulations of the UK Listing Authority or if it fails to maintain accurate accounting records. The Administrator provides the Board with regular reports on changes in regulations and accounting requirements; and

- Financial Risks: The financial risks faced by the Company, include market, credit and liquidity risk. These risks and the controls in place to mitigate them are reviewed at each quarterly Board meeting. Further details on Financial Risks are discussed in note 20.

Going Concern

The Directors believe that, having considered the Company's investment objective, risk management policies (see note 20 to the accounts), capital management policies and procedures (see note 21 to the accounts), expenditure projections, and the fact that the Company's assets comprise readily realisable securities which can be sold to meet funding requirements if necessary, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue the operational existence for the foreseeable future. For these reasons, they consider that there is reasonable evidence to continue to adopt the going concern basis in preparing the financial statements.

Corporate, Social and Environmental Policy

As an investment company, the Company has no direct social, environmental or human rights responsibilities; its policy is focused on ensuring that its portfolio is properly managed and invested.

Future Developments

The future performance of the Company depends upon the success of the Company's investment strategy in the light of economic factors and regional market developments. Further comments on the outlook for the Company for the next 12 months are set out in both the Chairman's Statement and the Investment Manager's Review.

By Order of the Board

Crispian Collins Christopher Legge

Chairman Director

21 April 2015

Report of the Directors

The Directors of the Company present their Annual Report and the audited financial statements of the Company for the year ended 31 December 2014.

Dividend Policy

Following the strategic review by the Board, the Investment Manager and the change in the investment objective, the Board has resolved that the Company's dividend policy be changed such that dividends will be declared at levels which are expected over the medium term to be sustainable based on the income receivable from investments and which will allow for potential growth.

The Board anticipates continuing to pay dividends on a quarterly basis in February, May, September and December and has reduced the quarterly dividend to 0.375 pence per Ordinary Share (from 1.05 pence) with effect from the payment for the quarter to 30 September 2014.

Having already paid interim dividends amounting to 2.475p per share, the Board has now declared a fourth interim dividend of 0.375p per share for the year ended 31 December 2014 which was payable on 26 February 2015 to shareholders on the Register at 5 February 2015. Thus, dividends declared in respect of the year amount to 2.85p (2013: 4.20p) per share.

Directors and their Interests

The Directors of the Company and their biographical details can be found the Directors' Report. Mr Ash retired on 1 January 2015 and Mr Legge was appointed on 1 January 2015. All the other Directors held office throughout the year under review and up to the date of signing this Annual Report.

In accordance with the Company's Articles of Incorporation, at each AGM all independent Directors who held office at the two previous AGMs and did not retire shall retire from office and shall be available for re-election. The Board has thus resolved that, in addition to the Articles requirement for re-election at the AGM immediately following appointment, any Director who has served for more than nine years should offer him or herself for re-election annually, and that one third of the remaining Directors should retire by rotation at each AGM and be eligible to seek re-election.

In accordance with the Company's Articles of Incorporation, Mr Legge will seek election at the forthcoming AGM, this being the first AGM since his appointment.

Mr Collins, Mr Saunders and Mr Sutton will retire and shall be eligible for re-election and are all considered being independent in character and judgement, notwithstanding that they have served on the Board for nine years.

The Board, having reviewed its performance during the year, considers that Mr Collins, Mr Saunders and Mr Sutton continue to demonstrate commitment to their roles and provide a valuable contribution to the deliberations of the Board. The Board therefore recommends that shareholders vote in favour of their re-elections. The Board also recommends that shareholders vote in favour of the election of Mr Legge.

Each of the Directors has signed a letter of appointment with the Company setting out the terms of their appointment.

None of the Directors had a service contract with the Company during the year and accordingly a Director is not entitled to a minimum period of notice or compensation in the event of their removal as a Director. Details of Directors' remuneration are disclosed on in the Directors' Remuneration Report.

The Directors' beneficial interests in the shares of the Company as at 31 December 2014 are set out below:

Christopher Legge was appointed as a Director on 1 January 2015 and has no beneficial interests in the shares of the Company.

There have been no changes in the interests of the above Directors in the past year.

Share Capital

As at the date of this Annual Report, the Company had 48,785,327 shares of no par value in issue. A total of 5,123,995 shares were held in Treasury. Accordingly, the total number of voting rights in the Company at the date of this Report is 48,785,327.

During the year a total of 7,158,221 shares were repurchased into Treasury and a total of 8,245,000 shares held in Treasury were cancelled. Full details of changes in the Company's share capital during the year are given in note 13 to the accounts.

Discount control policy

At the start of the year, the Company had a discount control policy in place with the objective that the Company's shares should trade as close as possible to the NAV per share. This policy was effected through a programme of share buybacks whenever the shares traded at a discount of greater than 2% to NAV per share. However, at an EGM held on 23 September 2014, the Board resolved to abolish this policy with immediate effect in order to create a stable platform for the investment strategy to be executed and maximise shareholder returns.

However, the Board are seeking to renew the authority to make share repurchases of up to 14.99% of the Company's issued share capital. The Board wish to retain the option to buy back shares at their discretion, for cancellation or to hold in Treasury, in an effort to reduce the quantum or volatility of the share price discount to NAV per share.

At an EGM in October 2014, shareholders approved a resolution that shares would only be reissued from Treasury at a price which is equal to or exceeds the prevailing NAV per share.

Placing programme

On 19 November 2013, the Company announced its intention to raise up to £50 million by way of an Initial Placing, Open Offer and Offer for Subscription of C Shares and Placing Programme in respect of up to 500 million New Ordinary Shares or existing Ordinary Shares for sale out of Treasury. On 5 December 2013, the Company announced that despite demand from new and current investors the Board determined that the Initial Offers would not have reached their minimum size and accordingly decided that the Company would not proceed. As the targeted increase in the Company's market capitalisation of £100 million has not been achieved, the Directors have consulted with shareholders and believe that it is in the best interests of the Company to continue in its present form and to grow through the Placing Programme. At an EGM of the Company held on 3 April 2014, shareholders approved the continuation of the Company in its current form.

Substantial Share Interests

As at the date of this Report, the Company has received notifications in accordance with the FCA's Disclosure and Transparency Rule 5.1.2 R of the following interests in 3% or more of the voting rights attaching to the Company's issued shares.

Investment Manager

CBRE Clarion Securities LLC was the Investment Manager up to 28 July 2014 and was entitled to an investment management fee of 1% of the Company's NAV per annum payable quarterly in arrears. Up to 31 January 2013 the management fee and the performance related fee was split between the Investment Manager and the Investment Adviser (Townsend Group Europe) in the proportion 80% to the Investment Manager and 20% to the Investment Adviser.

In addition CBRE Claron Securities LLC was entitled to receive a performance fee payable annually based on 10% of the Company's total returns in excess of a hurdle rate of 8% per annum.

Schroder Property Investment Management Limited was appointed as the new Investment Manager and Alternative Investment Fund Manager on 2 July 2014, following the shareholders' approval for the continuation of the Company in its current form at the EGM held on 3 April 2014. On 24 November 2014, Schroder Property Investment Management Limited changed its name to Schroder Real Estate Investment Management Limited (the "Investment Manager"). The Investment Manager is entitled to receive a management fee of 0.85% of the Company's NAV per annum payable quarterly in arrears, subject to a minimum investment management fee of £550,000 for the 12 month period from 2 July 2014. The performance fee arrangement ceased on the appointment of the new Investment Manager.

The Board has reviewed the performance of the Investment Manager during the period since its appointment and considers that it provides the Company with considerable investment management resource and experience, thereby enhancing the ability of the Company to achieve its investment objective. The Board therefore considers that the Investment Manager's continued appointment under the terms of the Management Agreement is in the best interests of shareholders.

Administration and Secretary

The Company's Administrator is Northern Trust International Fund Administration Services (Guernsey) Limited (the "Administrator").

Custodian

The Company's Custodian is Northern Trust (Guernsey) Limited (the "Custodian").

Depositary

The Company entered into an agreement with Northern Trust (Guernsey) Limited (the "Depositary") for the provision of depositary services with effect from 2 July 2014. Depositary fees are payable to Northern Trust (Guernsey) Limited monthly in arrears at a rate of 0.03% of the net asset value of the Company below £100 million and 0.015% on net asset value in excess of £100 million as at the last business day of the month subject to a minimum fee of £30,000 per annum.

Broker

The Company has appointed Numis Securities Limited as the Broker and Financial Adviser to the Company.

Registrar

The Company has appointed Computershare Investor Services (Guernsey) Limited (the "Registrar") to act as its Registrar. The services provided in their capacity as Registrar include share register maintenance, including the cancellation and allotment of shares as required, handling shareholder queries and correspondence, arranging for the payment of dividends, maintenance and reconciliation of associated bank accounts, meeting management for Company meetings including registering of proxy votes and scrutineer services as and when required, and Corporate Action services.

Greenhouse Gas Emissions

As the Company outsources its operations to third parties, it has no greenhouse gas emissions to report.

Foreign Account Tax Compliance Act

For purposes of the US Foreign Accounts Tax Compliance Act, the Company registered with the US Internal Revenue Service ("IRS") as a Guernsey reporting Foreign Financial Institution ("FFI"), received a Global Intermediary Identification Number (52F6YC.99999.SL.831), and can be found on the IRS FFI list under the link http://apps.irs.gov/app/fatcaFfiList/flu.jsf. The responsible officer is Christopher Legge.

The Company is subject to Guernsey regulations and guidance based on reciprocal information sharing inter-governmental agreements which Guernsey has entered into with the United Kingdom and the United States of America. The Board will take the necessary actions to ensure that the Company is compliant with Guernsey regulations and guidance in this regard.

UK-Guernsey Intergovernmental Agreement

The States of Guernsey signed an intergovernmental agreement with the UK ("UK-Guernsey IGA") on 22 October 2013, under which mandatory disclosure requirements will be required in respect of shareholders who have a UK connection. The UK-Guernsey IGA has been ratified by Guernsey's States of Deliberation and the relevant legislation introduced. The impacts of the UK-Guernsey IGA on the Company and the Company's reporting responsibilities pursuant to the UK-Guernsey IGA are not currently in final form. The Board is monitoring implementation of the UK-Guernsey IGA with the assistance of its professional advisers.

Disclosure of Information to the Independent Auditor

Deloitte LLP have expressed their willingness to continue in office as auditor and a resolution to re-appoint them will be proposed at the next Annual General Meeting. Each of the persons who is a Director at the date of approval of the financial statements confirms that:

(1) so far as each Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and

(2) each Director has taken all steps he ought to have taken as a Director to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of Section 249 of The Companies (Guernsey) Law, 2008.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and financial statements in accordance with applicable law and regulations. The Directors believe that the financial statements and all reports therein reflect a fair, balanced and understandable statement of the Company's affairs.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, International Accounting Standard 1 requires that directors:

- properly select and apply accounting policies;

- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

- provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

- make an assessment of the Company's ability to continue as a going concern.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with The Companies (Guernsey) Law, 2008.

The Directors 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.

The Directors are responsible for the oversight of the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, whose names are set out on the inside front cover of this report, confirms that to the best of their knowledge that:

- these financial statements have been prepared in conformity with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company as required by DTR 4.1.12;

- the Annual Report, taken as a whole, is fair, balanced and understandable and provide the information necessary for the shareholders to assess the Company's performance, business model and strategy; and

- the Annual Report includes information detailed in the Chairman's Statement, the Report of the Directors, the Investment Manager's Review and the notes to the accounts, which includes a fair view of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces, as required by:

(a) DTR 4.1.8 of the Disclosure and Transparency Rules, being a fair review of the Company business and a description of the principal risks and uncertainties facing the Company; and

(b) DTR 4.1.11 of the Disclosure and Transparency Rules, being an indication of important events that have occurred since the end of the financial year and the likely future development of the Company.

By Order of the Board

Crispian Collins Christopher Legge

Chairman Director

21 April 2015

Corporate Governance Report

The Board is committed to high standards of corporate governance and has implemented a framework for corporate governance which it considers to be appropriate for an investment company in order to comply with the principles of the UK Corporate Governance Code (the "UK Code"). The Company is also required to comply with the Code of Corporate Governance (the "GFSC Code") issued by the Guernsey Financial Services Commission.

The Financial Reporting Council (the "FRC") issued a revised Code in September 2012, for reporting periods beginning on or after 1 October 2014. The AIC updated the AIC Code of Corporate Governance (the AIC Code") (including the Guernsey edition) and its Guide to Corporate Governance (the AIC Guide") to reflect the relevant changes to the FRC document in February 2015. The Board have not early adopted the revised code.

Compliance Statement

The UK Listing Authority requires all UK listed premium companies to disclose how they have complied with the provisions of the UK Code. This Corporate Governance Report, together with the Going Concern statement and the Statement of Directors' Responsibilities, indicates how the Company has complied with the principles of good governance of the Code and its requirements on Internal Control.

The Company is a member of the Association of Investment Companies (the "AIC") and by complying with the AIC Code is deemed to comply with both the UK Code and the GFSC Code.

The Board has considered the principles and recommendations of the AIC Code, by reference to the guidance notes provided by the AIC (the "AIC Guide"), and considers that reporting against these will provide better information to shareholders. To ensure ongoing compliance with these principles the Board receives a report from the Company Secretary, at each quarterly meeting, identifying how the Company is in compliance and identifying any changes that might be necessary.

The AIC Code and the AIC Guide are available on the AIC's website, www.theaic.co.uk. The UK Code is available in the Financial Reporting Council's website, www.frc.org.uk.

Throughout the year ended 31 December 2014, the Company has complied with the recommendations of the AIC Code and thus the relevant provisions of the UK Code, except as set out below.

The UK Code includes provisions relating to:

• the role of the Chief Executive;

• the Executive Directors' remuneration;

• the need for an internal audit function; and

• the whistle blowing policy

For the reasons set out in the AIC Guide, and as explained in the UK Code, the Board considers that these provisions are not relevant to the position of the Company as it is an externally managed investment company. The Company has therefore not reported further in respect of these provisions.

The Directors are non-executive and the Company does not have employees, hence no Chief Executive or whistle-blowing policy is required. The Board is satisfied that any relevant issues can be properly considered by the Board.

There have been no other instances of non-compliance, other than those noted above. However the Directors have satisfied themselves that the Company's service providers have appropriate whistle-blowing policies and procedures and have received confirmation from the service providers that nothing has arisen under those policies and procedures which should be brought to the attention of the Board. Details of compliance are noted in the following pages. The absence of an internal audit function is discussed in the Audit Committee Report.

Operation and Composition of the Board

Composition

The composition of the Board is set out in the Strategic Report.

The Board does not consider it appropriate to appoint a Senior Independent Director because they are all deemed to be independent by the Company. The Board considers it has appropriate balance of diverse skills and experience, independence and knowledge of the Company and the wider sector, to enable it to discharge its duties and responsibilities effectively and that no individual or group of individuals dominates decision making. The Chairman is responsible for leadership of the Board and ensuring its effectiveness.

There are provisions in the Company's Articles of Incorporation which requires Directors to seek re-election on a periodic basis. There is no limit on length of service, nor is there any upper age restriction on Directors.

The Board considers that there is significant benefit to the Company arising from continuity and experience among directors, and accordingly does not intend to introduce restrictions based on age or tenure. It does, however, believe that shareholders should be given the opportunity to review membership of the Board on a regular basis.

Chairman

The Chairman is Mr Collins. The Chairman of the Board must be independent for the purposes of Chapter 15 of the Listing Rules. Mr Crispian Collins is considered independent because he:

• has no current or historical employment with the Investment Manager; and

• has no current directorships in any other investment funds managed by the Investment Manager.

Role of the Board

The role of the Board is set out in the Strategic Report.

The Board has contractually delegated responsibility for the management of its investment portfolio, the arrangement of custodial and depositary services and the provision of accounting and company secretarial services.

The Board needs to ensure that the Annual Report, taken as a whole, is fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy. In seeking to achieve this, the Directors have set out the Company's investment objective and policy and have explained how the Board and its delegated Committees operate and how the Directors review the risk environment within which the Company operates and set appropriate risk controls. Furthermore, throughout the Annual Report the Board has sought to provide further information to enable Shareholders to have a fair, balanced and understandable view.

Training and Development

On appointment, Directors receive a full, formal and tailored induction. Directors are also provided on a regular basis with key information on the Company's policies, regulatory and statutory requirements and internal controls. Changes affecting Directors' responsibilities are advised to the Board as they arise. Directors also regularly participate in relevant training and industry seminars and training and development needs are included as part of the evaluation process and are agreed with the Chairman.

Conflicts of Interest

The Board has approved a policy on Directors' conflicts of interest. Under this policy, Directors are required to disclose all actual and potential conflicts of interest to the Board as they arise for consideration and approval. The Board may impose restrictions or refuse to authorise such conflicts if deemed appropriate.

Board Evaluation

The AIC Code requires external evaluation of Board performance every three years. The Board undertook an externally facilitated evaluation during 2013 by Trust Associates, having commissioned the report the previous year. The report of the evaluation confirmed that the Company observes a high standard of Corporate Governance and, accordingly, the Board has conducted self-appraisals in 2014 and will do so again in 2015 before commissioning a further independent study to be undertaken in 2016.

The Directors consider how the Board functions as a whole taking balance of skills, experience and length of service into consideration and also reviews the individual performance of its members.

This process is conducted by the Chairman reviewing with all the Directors their performance, contribution and commitment to the Company. The performance of the Chairman is evaluated by the other independent Directors. During a Board Meeting held on 7 August 2014 the Chairman and Directors reviewed the board performance. The Chairman was satisfied that the Directors complemented each other and worked well as a Board.

Directors' Liability Insurance and Indemnity

Directors' and Officers' liability insurance cover is maintained by the Company on behalf of the Directors.

Election of Directors

The election of Directors is set out in the Strategic Report.

Directors' Attendance at Meetings

The Company holds a minimum of four Board meetings per year to discuss general management, structure, finance, corporate governance, marketing, risk management, compliance, asset allocation and gearing, contracts and performance. The quarterly Board meetings are the principal source of regular information for the Board enabling it to determine policy and to monitor performance, compliance and controls but these meetings are supplemented by communication and discussions throughout the year.

A representative of the Investment Manager, Administrator and Depositary attends each Board meeting either in person or by telephone thus enabling the Board to fully discuss and review the Company's operation and performance. Each Director has direct access to the Investment Manager and Company Secretary and may, at the expense of the Company, seek independent professional advice on any matter.

The table below sets out the number of Board and Audit Committee meetings held during the year ended 31 December 2014 and, where appropriate, the number of such meetings attended by each Director.

Mr Ash retired as a Director and Mr Legge was appointed as a Director on 1 January 2015.

The Chairman's commitments have not changed during the year.

Directors' interests

Directors' interests are set out in the Report of the Directors.

Board Committees and their Activities

Terms of Reference

All Terms of Reference of Committees are available from the Company Secretary upon request.

Audit Committee

The Company has established an Audit Committee with formal duties and responsibilities. This Committee meets formally at least twice a year and each meeting is attended by the independent external auditor and Administrator. The Company's Audit Committee is comprised of the entire Board. During the year ended 31 December 2014 the Audit Committee was chaired by Mr Ash. Mr Ash retired as a Director and Mr Legge was appointed as a Director and Chairman of the Audit Committee on 1 January 2015.

A report of the Audit Committee detailing its responsibilities and its key activities is presented on the Audit Committee Report.

Remuneration, Management Engagement and Nominations Committees

The Board does not have a separate remuneration, management engagement or nomination committees because these functions are carried out as part of the regular Board business. It was not necessary for this Company to appoint a Remuneration Committee as there were no Executive Directors. A Remuneration Report prepared by the Board is contained in the Directors' Remuneration Report. Directors' remuneration is considered on an annual basis.

Relations with Shareholders

The Board welcomes shareholders' views and places great importance on communication with its shareholders. The Board receives regular reports on the views of its shareholders from the Company's broker, Numis Securities Limited and from the Investment Manager.

The Chairman and other Directors are available to meet shareholders if required and the AGM of the Company provides a forum for shareholders to meet and discuss issues of the Company.

In addition, the Company maintains a website which contains comprehensive information, including regulatory announcements, share price information, financial reports, investment objectives and strategy, investor contracts and information on the Board.

The Investment Manager provides a monthly newsletter which is available on the Company's website.

Anti-Bribery Policy

The Company continues to be committed to carrying out its business fairly, honestly and openly and continues to operate an anti-bribery policy.

Internal Control and Risk Management Systems

The Board is ultimately responsible for establishing and maintaining the Company's system of internal controls and for maintaining and reviewing its effectiveness. The system of internal controls is designed to manage rather than to eliminate the risk of failure to achieve business objectives and by their nature can only provide reasonable and not absolute assurance against misstatement and loss. These controls aim to ensure that assets of the Company are safeguarded, proper accounting records are maintained and the financial information for publication is reliable. The Board uses a formal risk assessment matrix to identify and monitor business risks.

The Board has delegated the management of the Company's investment portfolio and the administration, registrar and corporate secretarial functions including the independent calculation of the Company's NAV and the production of the Annual Report which are independently audited. Whilst the Board delegates responsibility, it retains accountability for the functions it delegates and is responsible for the systems of internal control. Formal contractual agreements have been put in place between the Company and providers of these services. On an ongoing basis board reports are provided at each quarterly board meeting from the Investment Manager, Administrator, Registrar and Company Secretary; and a representative from the Investment Manager is asked to attend these meetings.

In common with most investment companies, the Company does not have an internal audit function. All of the Company's management functions are delegated to the Investment Manager, Administrator, Registrar and Company Secretary which have their own internal audit and risk assessment functions.

Principal risks and uncertainties are set out in the Strategic Report.

By Order of the Board

Crispian Collins Christopher Legge

Chairman Director

23 April 2015

Audit Committee Report

On the following pages, we present the Audit Committee's Report for 2014, setting out the responsibilities of the Audit Committee and its key activities in 2014. As in previous years, the Audit Committee has reviewed the Company's financial reporting, the independence and effectiveness of the independent auditor and the internal control and risk management systems of service providers. The Audit Committee considered whether the Annual Report is fair, balanced and understandable and whether they provided the necessary information for shareholders to access the Company's performance, business model and strategy before recommending them to the Board for approval. In order to assist the Audit Committee in discharging these responsibilities, regular reports are received from the Investment Manager, Administrator and independent auditor. Following its review of the independence and effectiveness of the Company's independent auditor, the Audit Committee has recommended to the Board that Deloitte LLP be reappointed as independent auditor, which the Board has submitted for approval to the Company's Members at the forthcoming AGM.

A member of the Audit Committee will continue to be available at each AGM to respond to any shareholder questions on the activities of the Audit Committee.

Responsibilities

The Audit Committee reviews and recommends to the Board, the financial statements of the Company and is the forum through which the independent auditor reports to the Board of Directors. The independent auditor and the Audit Committee will meet together without representatives of either the Administrator or Investment Manager being present if either considers this to be necessary.

The role of the Audit Committee includes:

• monitoring the integrity of the financial statements of the Company and any formal announcements relating to the Company's financial performance, and reviewing significant financial reporting judgements;

• reviewing and reporting to the Board on the significant issues and judgements made in the preparation of the Company's published financial statements, (having regard to matters communicated by the external auditor) preliminary announcement, significant financial returns to regulators and other financial information;

• considering the appropriateness of accounting policies and practices including critical judgement areas;

• reviewing and considering the UK Code, AIC Code, FRC Guidance on Audit Committees;

• monitoring and reviewing the quality and effectiveness of the independent auditor and their independence. This includes meeting regularly with the independent auditor to discuss the audit plan, the subsequent audit report and considering the level of fees for both audit and non-audit work, and monitoring and reviewing the auditor independence, objectivity, expertise, resources and qualifications;

• considering and making recommendations to the Board on the appointment, reappointment, replacement and remuneration to the Company's independent auditor;

• reviewing the Company's procedures for prevention, detection and reporting of fraud, bribery and corruption;

• monitoring and reviewing the internal control and risk management systems of the service providers together with the need for an Internal Audit function; and

The Audit Committee's full terms of reference can be obtained by contacting the Company Secretary.

Financial Reporting

The Audit Committee's review of the Half Yearly Financial Report and Audited Annual Report and Financial Statements focused on the following significant risks; valuation and ownership of investments.

Valuation of Investments

The Company's investments had a fair value of £61,859,000 as at 31 December 2014 (2013: £66,274,000) and represented the majority of the net assets of the Company. The investments are all listed and the valuation of the investments is in accordance with the requirements of IFRS as adopted by the European Union. The Audit Committee considered the fair value of the investments held by the Company as at 31 December 2014 to be reasonable based on information provided by the Investment Manager and Administrator. All prices were confirmed to independent pricing sources as at 31 December 2014 by the Administrator and were subject to review process at the Administrator and oversight at the Investment Manager.

Ownership of Investments

The Company's investment holdings are reconciled to independent reports from the Custodian by the Administrator with any discrepancies being fully investigated and reconciled by the Administrator. The Audit Committee therefore considered the ownership of the investments held by the Company as at 31 December 2014 to be reasonable based on a review of information provided by the Investment Manager, Custodian and Administrator.

The independent auditor has confirmed to the Audit Committee that no material misstatements were found in the course of its work. Furthermore, the Investment Manager and Administrator confirmed to the Committee that they were not aware of any material misstatements including matters relating to presentation.

The Audit Committee confirms that it is satisfied that the independent auditor has fulfilled its responsibilities with diligence and professional scepticism.

The Audit Committee has confirmed to the Board that, to the best of their knowledge, this annual report and accounts, taken as a whole, is fair, balanced and understandable.

The Audit Committee has assessed the appropriateness of the accounting policies and practices adopted by the Company together with the clarity of disclosures included in the financial statements. Following a review of the presentations and reports from the Administrator and consulting where necessary with the independent external auditor, the Audit Committee is satisfied that the financial statements appropriately address the critical judgements and key estimates (both in respect to the amounts reported and the disclosures). The Audit Committee is also satisfied that the significant assumptions used for determining the value of assets and liabilities have been appropriately scrutinised, challenged and are sufficiently robust.

Risk Management

The Audit Committee continued to consider the process for managing the risk of the Company and its service providers. Risk management procedures for the Company, as detailed in the Company's risk assessment matrix, were reviewed and approved by the Audit Committee. Regular reports are received from the Investment Manager and Administrator on the Company's risk evaluation process and reviews.

Fraud, Bribery and Corruption

The Audit Committee continues to monitor the fraud, bribery and corruption policies of the Company. The Board receives a confirmation from all service providers that there have been no instances of fraud, bribery or corruption.

The independent auditor

Deloitte LLP has been the independent auditor from the date of the initial listing on the London Stock Exchange. The recent revisions to the UK Code introduced a recommendation that the external audit be put out to tender every ten years. The Committee has noted this and will develop a plan for tendering at the appropriate time.

Independence, objectivity and fees

The independence and objectivity of the independent auditor is reviewed by the Audit Committee which also reviews the terms under which the independent auditor is appointed to perform non-audit services. The Audit Committee has established pre-approval policies and procedures for the engagement of Deloitte LLP to provide audit, assurance and tax services. These are that the independent auditor may not provide a service which:

• places them in a position to audit their own work;

• creates a mutuality of interest;

• results in the independent auditor developing close relationships with service providers of the Company;

• results in the independent auditor functioning as a manager or employee of the Company; or

• puts the independent auditor in the role of advocate of the Company.

As a general rule, the Company does not utilise independent auditors for internal audit purposes, secondments or valuation advice. Services which are in the nature of audit, such as tax compliance, tax structuring, private letter rulings, accounting advice, quarterly reviews and disclosure advice are normally permitted but must be pre-approved where fees are likely to be above £25,000.

The following table summarises the remuneration paid to Deloitte LLP and to other Deloitte member firms for audit and non-audit services during the years ended 31 December 2014 and 31 December 2013:

In line with the policies and procedures above, the Audit Committee does not consider that the provision of these non-audit services, which comprised of independent review of the Half Yearly Financial Report, Foreign Account Tax Compliance Act ("FATCA") advice, and withholding tax claims to be a threat to the objectivity and independence of the independent auditor.

Deloitte LLP also have safeguards in place to ensure objectivity and independence. These include:

• Tax work is carried out by teams independent of the audit team and ethical walls ensure that no employee works in both teams; and

• Review and challenge of key decisions by the Engagement Quality Review Partner and engagement quality control review by a member of the Independent Professional Standards Review Team.

When considering the effectiveness and independence of the independent auditor, the Audit Committee also takes account of factors such as:

• The audit plan presented to them before each audit;

• The post audit report including variations from the original plan;

• Changes in audit personnel;

• The independent auditor's own internal procedures to identify threats to independence; and

• Feedback from both the Investment Manager and Administrator evaluating the performance of the team.

The Audit Committee has examined the scope and results of the audit, its cost effectiveness and the independence and objectivity of the independent auditor, with particular regard to non-audit fees, and is satisfied that an effective audit has been completed, that the scope of the audit was appropriate and significant judgements have been challenged robustly. It also considers Deloitte LLP, as independent auditor, to be independent of the Company.

Reappointment of the independent auditor:

Consequent to this review process, the Audit Committee has recommended to the Board that a resolution be put to the 2015 AGM for the reappointment of Deloitte LLP as independent auditor. The Board has accepted this recommendation.

Internal control and risk management systems

The Audit Committee, after consultation with the Investment Manager and independent auditor, considers the key risk of misstatement in its financial statements to be the override of controls by its service providers, the Investment Manager and Administrator.

The Audit Committee reviews and examines externally prepared assessments of the control environment in place at the Investment Manager and the Administrator. No significant failings or weaknesses were identified in these reports.

The Audit Committee has also reviewed the need for an internal audit function. The Audit Committee has decided that the systems and procedures employed by the Investment Manager and the Administrator, including their internal audit functions, 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.

For any questions on the activities of the Audit Committee not addressed in the foregoing, a member of the Audit Committee remains available to attend each AGM to respond to such questions.

Christopher Legge

Chairman, Audit Committee

21 April 2015

Directors' Remuneration Report

Introduction

An ordinary resolution for the approval of the annual remuneration report will be put to the shareholders at the AGM to be held on Friday, 12 June 2015.

Policy on Remuneration of Directors

All Directors are non-executive and a Remuneration Committee has not been established. The Board as a whole considers matters relating to the Directors' remuneration. No advice or services were provided by any external person in respect of its consideration of the Directors' remuneration.

The Company's policy is that the fees payable to the Directors should reflect the time spent by the Directors on the Company's affairs and the responsibilities borne by the Directors and be sufficient to attract, retain and motivate directors of a quality required to run the Company successfully. The Chairman of the Board is paid a higher fee in

recognition of his additional responsibilities, as is the Chairman of the Audit Committee. The policy is to review fee rates periodically, although such a review will not necessarily result in any changes to the rates, and account is taken of fees paid to directors of comparable companies.

There are no long term incentive schemes provided by the Company and no performance fees are paid to Directors.

No Director has a service contract with the Company but each Director is appointed by a letter of appointment which sets out the main terms of their appointment. Directors hold office until they retire by rotation or cease to be a director in accordance with the Articles of Incorporation, by operation of law or until they resign.

Component Parts of the Directors' Remuneration

The Directors of the Company are remunerated for their services at such a rate as the Directors determine provided that the aggregate amount of such fees does not exceed £150,000 (31 December 2013: £150,000) per annum.

Directors are remunerated in the form of fees, payable quarterly in arrears, to the Director personally. No Directors have been paid additional remuneration outside their normal Directors' fees and expenses. Directors fees have not increased during the year (2013: no increase during the year).

Fees Paid to Directors

For the years ended 31 December 2014 and 31 December 2013 Directors' fees paid were:

Mr Ash retired as a Director on 1 January 2015.

Mr Legge was appointed as a Director on 1 January 2015 and will receive £30,000 per annum as a Director and Chairman of the Audit Committee.

By Order of the Board

Crispian Collins Christopher Legge

Chairman Director

21 April 2015

Report of the Depositary to the Members of Schroder Global Real Estate Securities Limited

Northern Trust (Guernsey) Limited has been appointed as Depositary to Schroder Global Real Estate Securities Limited (the 'Company') in accordance with the requirements of Article 36 and Articles 21(7), (8) and (9) of the Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (the 'AIFM Directive').

We have enquired into the conduct of Schroder Real Estate Investment Management Ltd (the 'AIFM') and the Company for the period 2 July 2014 to 31 December 2014, in our capacity as Depositary to the Company.

This report including the review provided below has been prepared for, and solely for, the shareholders of the Company. We do not, in giving this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown.

Our obligations as Depositary are stipulated in the relevant provisions of the AIFM Directive and the relevant sections of Commission Delegated Regulation (EU) No 231/2013 (collectively the 'AIFMD legislation').

Amongst these obligations is the requirement to enquire into the conduct of the AIFM and the Company and their delegates in each annual accounting period.

Our report shall state whether, in our view, the Company has been managed in that period in accordance with the AIFMD legislation. It is the overall responsibility of the AIFM and the Company to comply with these provisions. If the AIFM, the Company or their delegates have not so complied, we as the Depositary will state why this is the case and outline the steps which we have taken to rectify the situation.

Basis of Depositary Review

The Depositary conducts such reviews as it, in its reasonable discretion, considers necessary in order to comply with its obligations and to ensure that, in all material respects, the Company has been managed (i) in accordance with the limitations imposed on its investment and borrowing powers by the provisions of its constitutional documentation and the appropriate regulations and (ii) otherwise in accordance with the constitutional documentation and the appropriate regulations. Such reviews vary based on the type of the Company, the assets in which the Company invests and the processes used, or experts required, in order to value such assets.

Review

In our view, the Company has been managed during the period, in all material respects:

i. in accordance with the limitations imposed on the investment and borrowing powers of the Company by the constitutional document; and by the AIFMD legislation; and

ii. otherwise in accordance with the provisions of the constitutional document; and the AIFMD legislation.

For and on behalf of

Northern Trust (Guernsey) Limited

21 April 2015

Independent Auditor's Report to the Members of Schroder Global Real Estate Securities Limited (formerly Investors in Global Real Estate Limited)

Opinion on financial statements of Schroder Global Real Estate Securities Limited (the "Company") (formerly Investors in Global Real Estate Limited)

In our opinion the financial statements:

- give a true and fair view of the state of the Company's affairs as at 31 December 2014 and of its profit for the year then ended;

- have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union; and

- have been prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.

The financial statements comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Cash Flow Statement, the Statement of Changes in Equity and the related notes 1 to 22. The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the European Union.

Going concern

We have reviewed the directors' statement contained within the Strategic Report that the Company is a going concern. We confirm that:

- we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate; and

- we have not identified any material uncertainties that may cast significant doubt on the Company's ability to continue as a going concern.

However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company's ability to continue as a going concern.

Our assessment of risks of material misstatement

The assessed risks of material misstatement described below are those that had the greatest effect on our audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team:

Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to express an opinion on individual accounts or disclosures. Our opinion on the financial statements is not modified with respect to any of the risks described above, and we do not express an opinion on these individual matters.

Our application of materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.

We determined materiality for the Company to be £0.62million (2013: £1.27 million), which is approximately 1% (2013: 2%) of equity. This year we changed the level of materiality from 2% to 1% of equity. We have changed the percentage applied to align more closely with other comparable companies.

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £12,400 (2013: £25,000), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the Company and its environment, including internal control, and assessing the risks of material misstatement. Audit work to respond to the risks of material misstatement was performed directly by the audit engagement team.

The administrator maintains the books and records of the Company including accounting and financial reporting services. Our audit therefore included obtaining an understanding of this service organisation and its relationship with the Company.

Matters on which we are required to report by exception

Adequacy of explanations received and accounting records

Under the Companies (Guernsey) Law, 2008 we are required to report to you if, in our opinion:

- we have not received all the information and explanations we require for our audit; or

- proper accounting records have not been kept; or

- the financial statements are not in agreement with the accounting records.

We have nothing to report in respect of these matters.

Corporate Governance Statement

Under the Listing Rules we are also required to review the part of the Corporate Governance Statement relating to the Company's compliance with ten provisions of the UK Corporate Governance Code. We have nothing to report arising from our review.

Our duty to read other information in the Annual Report

Under International Standards on Auditing (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is:

- materially inconsistent with the information in the audited financial statements; or

- apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Company acquired in the course of performing our audit; or

- otherwise misleading.

In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during the audit and the directors' statement that they consider the annual report is fair, balanced and understandable and whether the annual report appropriately discloses those matters that we communicated to the audit committee which we consider should have been disclosed. We confirm that we have not identified any such inconsistencies or misleading statements.

Respective responsibilities of directors and auditor

As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. We also comply with International Standard on Quality Control 1 (UK and Ireland). Our audit methodology and tools aim to ensure that our quality control procedures are effective, understood and applied. Our quality controls and systems include our dedicated professional standards review team and independent partner reviews.

This report is made solely to the Company's members, as a body, in accordance with Section 262 of the Companies (Guernsey) Law, 2008. 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/or those further matters we have expressly agreed to report to them on in our engagement letter 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.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Nicola Sarah Paul FCA

for and on behalf of Deloitte LLP

Chartered Accountants and Recognised Auditors

Guernsey, Channel Islands

21 April 2015

Statement of Comprehensive Income

for the year ended 31 December 2014

The "Total" column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the European Union. The "Revenue and Capital" columns represent supplementary information prepared under guidance issued by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.

The notes form an integral part of these accounts.

Statement of Changes in Equity

for the year ended 31 December 2014

1Under The Companies (Guernsey) Law, 2008, the Company may pay dividends out of capital and revenue reserves, subject to passing a solvency test.

The notes form an integral part of these accounts.

Statement of Financial Position

as at 31 December 2014

These financial statements were approved and authorised for issue by the Board of Directors on 21 April 2015 and signed on its behalf by:

Crispian Collins Christopher Legge

Chairman Director

The notes form an integral part of these accounts.

Registered in Guernsey

Company registration number: 44714

Cash Flow Statement

for the year ended 31 December 2014

The notes form an integral part of these accounts.

Notes to the Accounts

1. Accounting Policies

(a) Basis of accounting

The accounts have been prepared in accordance with the Companies (Guernsey) Law, 2008 and International Financial Reporting Standards ("IFRS") as adopted by the European Union, which comprise standards and interpretations approved by the International Accounting Standards Board ("IASB"), together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Accounting Standards Committee ("IASC"), that remain in effect and to the extent that they have been adopted by the European Union.

Where consistent with the requirements of IFRS, the Directors have sought to prepare the accounts on a basis compliant with presentational guidance set out in the Statement of Recommended Practice for investment trust companies (the "SORP") issued by the Association of Investment Companies in January 2009.

The policies applied in these accounts are consistent with those applied in the preceding year.

The Company's share capital is denominated in Sterling and this is the currency in which its shareholders operate and expenses are generally paid. The Board has therefore determined that Sterling is the functional currency and the currency in which the accounts are presented.

The accounts have been prepared on a going concern basis under the historical cost basis, as modified by the revaluation of investments and derivative financial instruments at fair value through profit or loss. The disclosures on going concern in the Strategic Report form part of these accounts.

The principal accounting policies adopted are set out below.

No critical accounting judgements have been made in the process of applying the Company's accounting policies.

(b) Presentation of the Statement of Comprehensive Income

In order better to reflect the activities of an investment company and in accordance with the recommendations of the SORP, supplementary information has been presented which analyses items in the Statement of Comprehensive Income between those which are income in nature and those which are capital in nature.

(c) Presentation of the Cash Flow Statement

The cash flow statement has been presented in accordance with the "indirect method" detailed in IAS 7: "Statement of cash flows". Cash payments and receipts from purchases and sales of investments have been reclassified from investment activities to operating activities in the comparative statement. The Directors are of the opinion that this presentation is more relevant and better reflects the activities of an investment trust.

(d) Investments at fair value through profit or loss

Investments are recognised and derecognised on the trade date where a purchase or sale is under a contract whose terms require delivery within a timeframe established by the market concerned.

Under IFRS, all the Company's investments are designated as "Investments at fair value through profit or loss", because performance is evaluated on a fair value basis and managed on a portfolio basis.

Investments are designated upon initial recognition as investments at fair value through profit or loss, and are measured at subsequent reporting dates at fair value, which are quoted bid market prices for investments traded in active markets.

(e) Reserves

Gains and losses on sales of investments, including the related foreign exchange gains and losses, are included in the Statement of Comprehensive Income and in capital reserves within "Gains and losses on sales of investments". Increases and decreases in the valuation of investments held at the year end, including the related foreign exchange gains and losses, are included in the Statement of Comprehensive Income and in capital reserves within "Holding gains and losses on investments".

Management fee and finance costs allocated to capital and foreign currency gains and losses are included in the Statement of Comprehensive Income and in "Other reserve".

The consideration payable for the repurchase of shares for cancellation or to hold in Treasury, is charged to "Other reserve".

(f) Income

Dividends receivable from equity shares are included in revenue on an ex-dividend basis except where, in the opinion of the Board, the dividend is capital in nature, in which case it is included in capital.

Deposit interest outstanding at the year end is calculated and accrued on a time apportionment basis using market rates of interest.

(g) Expenses

All expenses are accounted for on an accruals basis. Expenses are allocated wholly to revenue with the following exceptions:

The management fee is allocated 30% to revenue and 70% to capital in line with the Board's expected long term split of revenue and capital return from the Company's investment portfolio.

Any performance fee is allocated 100% to capital.

(h) Finance costs

Finance costs, including any premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in profit or loss using the effective interest method.

Finance costs are allocated 30% to revenue and 70% to capital in line with the Board's expected long term split of revenue and capital return from the Company's investment portfolio.

(i) Financial Instruments

Cash and cash equivalents may comprise cash and demand deposits which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value. Other receivables are non interest bearing, short term in nature and are accordingly stated at nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.

Interest bearing bank loans are initially recognised at cost, being the proceeds received net of direct issue costs, and subsequently at amortised cost.

Forward currency contracts are designated as "derivative financial assets or liabilities at fair value through profit or loss", and are valued using quoted forward foreign currency exchange rates.

(j) Taxation

The taxation charge in the Statement of Comprehensive Income comprises irrecoverable overseas tax deducted from dividends receivable.

(k) Foreign currency

The results and financial position are expressed in Sterling which is the Company's functional currency and presentational currency. Transactions in currencies other than Sterling are recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets, liabilities and equity investments held at fair value denominated in foreign currencies are translated at the rates of exchange prevailing at the year end. Foreign exchange differences arising on conversion of the monetary items are recognized in the Statement of Comprehensive Income.

(l) Adoption of new and revised Standards

The following new and revised Standards and Interpretations have been adopted in the current year. Their adoption has not had any significant impact on the amounts reported in these financial statements.

IFRS 11 Joint Arrangements

IFRS 10 (amended) Investment Entities

IAS 19 Employee Benefits

IAS 28 (revised) Investments in Associates and Joint Ventures

IAS 1 (amended) Presentation of Items of Other Comprehensive Income

IFRS 7 (amended) Disclosures - Offsetting Financial Assets and Financial Liabilities

IFRS 1 (amended) Government Loans

Annual improvement to IFRS 2009 - 2011 Cycle

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the European Union).

IFRS 9 Financial Instruments

IFRS 15 Revenue from Contracts with Customers

IAS 36 (amended) Recoverable Amount Disclosures for Non-Financial Assets

IAS 39 (amended) Novation of Derivatives and Continuation of Hedge Accounting

The Directors do not expect that the adoption of the Standards listed above will have a significant impact on the financial statements of the Company in future periods, except that IFRS 9 may impact both the measurement and disclosure of Financial Instruments. However it is not yet practical to provide an estimate of the effect.

(m) Dividends payable

Dividends payable are recognised as a liability in the year in which they are declared and become legally payable.

(n) Repurchases and reissues of the Company's own shares

The cost of repurchasing the Company's own shares for cancellation or to hold in Treasury, including the related stamp duty and transaction costs, is included in the Statement of Changes in Equity and is charged to "Other reserve". The sales proceeds of Treasury shares subsequently reissued are included in the Statement of Changes in Equity and are credited to Other reserve. Share repurchase transactions are accounted for on a trade date basis.

(o) Segmental reporting

The Directors are of the opinion that the Company is engaged in a single segment of business, being investment in real estate securities.

2. Gains on investments at fair value through profit or loss

3. Income

4. Investment management fee

The basis for calculating the investment management fee and performance fee is set out in the Directors' Report.

5. Other administrative expenses

1 Fees of £3,000 and £14,000 were payable to the auditor in respect of other services in relation to Foreign Account Tax Compliance Act advice and the interim review respectively (2013: £72,000 in respect of taxation advisory services and £14,000 in respect of the interim review).

6. Finance costs

7. Taxation

The Company has been granted an exemption from Guernsey taxation, under the Income Tax (Exempt Bodies) Guernsey Ordinance 1989 for which it was charged an annual exemption fee of £600 (2013: £600). With effect from 1 January 2015, the annual exemption fee increased to £1,200.

8. Dividends

The Company paid and declared the following dividends during the year:

Under the Companies (Guernsey) Law, 2008, the Company may pay dividends out of capital and revenue reserves, subject to passing a solvency test. The test considers whether the company's assets exceed its liabilities and whether it will be able to pay its debts when they fall due. The Company has passed the solvency test, where required, for all dividends paid to date.

9. Earnings per share

10. Investments at fair value through profit or loss

11. Receivables

The Directors consider that the carrying amount of receivables approximates to their fair value.

12. Payables

The bank overdraft is drawn down on the Company's uncommitted multicurrency overdraft facility with Northern Trust Guernsey. The facility is secured by a floating charge over the Company's assets. Further details of the facility are given in note 20.

The Directors consider that the carrying amount of payables approximates to their fair value.

13. Share capital

Unclassified shares of no par value

The Company has a single class of shares which were issued by means of an initial public offering on 31 May 2006, at 100p per share. The shares carry the right to vote at general meetings of the Company and to receive dividends and, in a winding-up will participate in any surplus assets remaining after settlement of any outstanding liabilities of the Company.

During the year a total of 7,158,221 shares of no par value were repurchased into Treasury for a total consideration of £7,819,000. The reason for the share repurchases was to seek to reduce the quantum or volatility of the share price discount to NAV per share.

A total of 8,245,000 (2013: 23,570,000) shares held in Treasury were cancelled during the year.

Details of the Company's discount control policy are given in the Report of the Directors.

14. Reserves

15. Net asset value per share

16. Transactions with the Investment Manager

During the period to 28 July 2014, and throughout the comparative year, investment management services were provided by CBRE Clarion Securities LLC. The Management fee payable in respect of the period 1 January to 28 July 2014 amounted to £332,000 (year ended 31 December 2013: £771,000). Under the terms of the agreement there was also a performance fee arrangement in place. However no performance fee was payable for the period 1 January 2014 to 28 July 2014 (year ended 31 December 2013: nil).

On 2 July 2014, the Company appointed Schroder Property Investment Management Limited (the "Investment Manager"), a wholly owned subsidiary of Schroders plc to provide investment management services. On 24 November 2014, the Investment Manager changed its name to Schroder Real Estate Investment Management Limited. Details of the AIFM Agreement are given in the Report of the Directors. Only with the prior consent of the Board may the Company invest in funds managed or advised by the Investment Manager or any of its associated companies, and the Investment Manager is entitled to receive a fee on these investments. There have been no such investments since the Investment Manager's appointment. The management fee payable in respect of the year amounted to £276,000 of which £157,000 was outstanding at the year end. There is no performance fee arrangement in place.

17. Related party transactions

Details of remuneration payable to Directors are given in the Remuneration Report and details of Directors' transactions in the Company's shares are given. The Company had no other transactions with Directors.

18. Contingent liabilities and capital commitments

There were no contingent liabilities or capital commitments at the balance sheet date (2013: none).

19. Disclosures regarding financial instruments measured at fair value

The Company's financial instruments within the scope of IFRS 7 that are held at fair value comprise its investment portfolio. The investments are categorised into a hierarchy consisting of the following three levels:

Level 1 - valued using quoted prices in active markets.

Level 2 - valued by reference to valuation techniques using observable inputs other than quoted market prices included within Level 1.

Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset.

Details of the valuation techniques used by the Company are given in note 1(d).

At 31 December 2014, the Company's investment portfolio comprised entirely Level 1 investments (2013: same).

The Company recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the transfer has occurred. There have been no transfers between Levels 1, 2 or 3 during the year (2013: nil).

20. Financial instruments' exposure to risk and risk management policies

The Company's investment objective is to provide investors with an attractive total return, through investing in listed global real estate securities with strong fundamentals, offering sustainable income and a progressive dividend potential. The Company's investment policy will be flexible, enabling it to invest in a wide variety of listed securities including equities, preference shares, debt, convertible securities, warrants, interests in collective investment schemes (including limited partnerships and unit trusts) and other securities, issued by companies which derive a significant proportion of their revenues or profits from real estate. In pursuing this objective, the Company is exposed to a variety of risks which could result in a reduction in the Company's net assets. These risks include market risk (comprising currency risk, interest rate risk and market price risk), liquidity risk and credit risk. The Directors' policy for managing these risks is set out below. The Board coordinates the Company's risk management policy.

The objectives, policies and processes for managing the risks and the methods used to measure the risks that are set out below, have not changed from those applying in the comparative year.

The Company's classes of financial instruments may comprise the following:

- investments in a variety of securities issued by companies which derive a significant proportion of their revenues or profits from real estate and which are held in accordance with the Company's investment objective;

- short term debtors, creditors and cash arising directly from its operations; and

- an overdraft facility with Northern Trust (Guernsey), the purpose of which is to assist in financing the Company's operations.

(a) Market risk

The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - currency risk, interest rate risk and market price risk. Information to enable an evaluation of the nature and extent of these three elements of market risk is given in parts (i) to (iii) of this note, together with sensitivity analyses where appropriate. The Board reviews and agrees policies for managing these risks and these policies have remained unchanged from those applying in the comparative year. The Investment Manager assesses the exposure to market risk when making each investment decision and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing basis.

(i) Currency risk

Certain of the Company's assets, liabilities and income are denominated in currencies other than Sterling, which is the Company's functional currency and the presentational currency of the accounts. As a result, movements in exchange rates will affect the Sterling value of those items.

Management of currency risk

The Investment Manager monitors the Company's exposure to foreign currencies and reports to the Board, which meets on at least four occasions each year. The Investment Manager measures the risk to the Company of the foreign currency exposure by considering the effect on the Company's net asset value and income of a movement in the rates of exchange to which the Company's assets, liabilities, income and expenses are exposed. The Company may use foreign currency borrowings or forward foreign currency contracts to limit the exposure to anticipated changes in exchange rates which might otherwise adversely affect the value of the portfolio of investments. Income denominated in foreign currencies is converted into Sterling on receipt.

Open forward foreign currency contracts

There were no (2013: six) open forward currency contracts at the year end. An analysis of the open contracts at the comparative year end is as follows:

Foreign currency exposure

The fair value of the Company's monetary items that have foreign currency exposure at 31 December are shown below. The Company's investments (which are not monetary items) have been included separately in the analysis so as to show the overall level of exposure.