Kinesis is a spread betting account offered by Capital International Limited that allows clients to invest in a variety of assets on a tax-free basis. Clients work with Capital to design a bespoke Specialist Reference Index that replicates their desired investment strategy. Capital then purchases the underlying assets and clients bet on the performance of the index, receiving equivalent returns. Kinesis requires 100% margin from clients and allows flexibility to withdraw funds every three months without penalties. The product provides tax-free returns compared to direct investment due to its structure as a spread bet.

1. Capital International LimitedKinesisAntony Kelsey This presentation is intended for FSA authorised persons, high net worth individuals and professional investors

2. Agenda Introduction to Kinesis History of the market Advantages / Disadvantages of the market Dismissing the stereotypes Kinesis in detail Kinesis v direct investment Kinesis benefit comparison Kinesis investment options Kinesis fees Regulation Doing business

3. Introduction to Kinesis An alternative to direct investment, delivering equivalent investment performance But Kinesis returns are tax free (no CGT and no income tax) Clients, and advisers, define the investment strategy Kinesis is as low risk as clients want it to be Tax treatment occurs because Kinesis is structured as a spread bet Returns from spread bets are tax free in the UK

4. What is Spread Betting? A method of speculating on the price of an instrument without actually owning any shares or derivatives A financial spread bet allows a trader to bet on whether they believe that the price quoted for a particular financial instrument, such as shares or the FTSE 100 index, is likely to go up in value or go down in value Contracts are often leveraged as clients make only a small deposit relative to the size of the bet (e.g. £10k for £100k bet):

5. History of Spread Betting in UK 1974 ‘Investors Gold Index’ was created to allow investors to trade on the price of gold IG Index quickly introduced forex and commodities 1980s and 90s very niche – low financial sophistication and poor technology Around 2000 dot.com boom brought greater public focus on share prices and massive online trading improvements Crash allowed spread bet traders to profit by short-selling Professional traders recognise spread betting as a high risk alternative investment strategy to yield quick tax-free profits Today it is increasingly “retail”

6. Spread Betting today Beginners Guides / Free education Bets from as lows as 10p per point Bets on shares, indices, forex, commodities, property price indices, interest rates, options, sports results Margin variable but typically 10% No longer just professionals… adverts in newspapers, billboards, television… Well established and accepted taxation treatment

8. Limited choice of assets

9. Specialist reputation* Note: losses cannot be offset against other capital gains and returns can be taxed as income if client has no income from other sources aside from spread betting activity

10. Dismissing the stereotypes Spread betting… is not inherently risky does allow virtually any type of asset to be held in a spread-bet in any combination does not have to be leveraged is not just for professionals does not have to be complicated has a generous tax treatment which is unlikely to change

11. Why does HMRC allow it? As many make losses as make gains via spread bets HMRC enjoy gaming duty and corporate tax on spread betting firm profits Returns are taxed as income if client’s spread-betting activity is sufficient to be deemed a “trade”

12. Kinesis in Detail Kinesis is a spread bet account Each client can set up their own bespoke Specialist Reference Index (SRI) Client and adviser define the assets to be included in the SRI (it can replicate existing client portfolios or investment strategies) Assets can be: equities, gilts, corporate bonds, unit trusts, OEICs, hedge funds, loan notes, private equity, structured products… Index priced monthly – for every £1 the index increases, clients win £1 and for every £1 the index decreases, clients lose £1

13. Kinesis in Detail cont’d Capital require 100% margin from client (i.e. no leverage risk) By holding investments via a spread bet, rather than directly, clients create tax free returns Clients and their advisers define the risk of assets held Contract rolls every three months so clients can access all their money every 3 months – there is no lock-in and no surrender fees Tax treatment is also “locked in” every 3 months

14. Kinesis in Detail cont’d Capital use the 100% margin to purchase the assets selected in the SRI via a dedicated subsidiary company (CFM) Price of the SRI reflects the value and price movements of the assets in CFM So, although CFM own the investment assets, the client receives the performance via the index price to which the spread bet account is linked Capital’s liabilities are therefore 100% hedged at all times CFM’s assets are completely ring-fenced from all other activity and from Capital’s own assets

15. Kinesis v Direct Investment While Kinesis can replicate the investment returns of existing portfolios via the creation of bespoke SRIs, it is via its tax savings that Kinesis outperforms:

16. Kinesis Benefit Comparison Kinesis SIPP Offshore Bond Direct Max investment Withdrawals Capital Gains Tax Income Tax Unlimited Unlimited £1.8 million Unlimited Annual CGT allowance 5% capital withdrawals 3 monthly Post 55 0% 0% 0% 28% Relief on Contributions but up to 50% On benefits taken Up to 50% Up to 50% 0%

17. Kinesis Investment Options Clients and their advisers have complete flexibility to nominate assets for their SRI Assets can be: equities, gilts, corporate bonds, unit trusts, OEICs, hedge funds, loan notes, private equity, structured products… Discretionary Fund Managers (including Capital) can be appointed to make asset selection Capital discretionary managed portfolio service (Fusion) can be included Cash only cannot be selected – could be deemed a “one-way” bet

18. Kinesis Fees Each 3 month bet (open & roll) has 0.1% Fee SRI Set up Fee of 1% SRI Annual Management Charge of 0.7% Adviser commission added to SRI fees SRI performance will also reflect costs of underlying investments (just as if the client were holding the investments directly) Therefore Capital’s Kinesis fees are the opportunity cost of the Kinesis tax savings

19. Key Reminders Clients own Kinesis (not underlying assets) Clients define the investment risk of Kinesis by nominating the assets in their own bespoke SRI Clients must pay 100% margin into Kinesis Losses are limited to their margin (just as if they invested directly), assuming bet is “long” Returns from Kinesis are currently tax free Clients assets are available every 3 months Clients assets are ring-fenced

22. Clients must sign a Due Diligence Form

24. Questions Antony KelseyT: +44 (0) 1624 654213E: a.kelsey@capital-iom.com

25. Regulatory Notice This presentation has been prepared for information purposes only, is intended FSA authorised persons, its duly authorised officers or agents, high net worth individuals and professional investors only. It does not constitute an offer or an invitation, by or on behalf of Capital International Limited, to buy or sell any security. This presentation is not intended for circulation to persons who would constitute a private or inexperienced investor. The information contained herein is believed to be correct, but its accuracy cannot be guaranteed. Any reference to past performance is not necessarily a guide to the future. Opinions constitute our judgement as of this date and are subject to change. The company, its clients and officers may have a position in, or engage in transactions in any of the securities mentioned. The price of a security may go down as well as up and its value may be adversely affected by currency fluctuations. Capital International Limited is a member of the London Stock Exchange.Capital International Limited and Capital Financial Markets Limited are members of the Capital International Group.Capital International Limited is licensed by the Isle of Man Supervision Commission. Capital Financial Markets Limited is licensed by the Isle of Man Financial Supervision Commission. . CIL - Kinesis Presentation - V1.01-09.10

26. Contact Details Capital International LimitedCapital HouseCircular RoadDouglasIsle of ManIM1 1AG T : +44 (0) 1624 654200F: +44 (0) 1624 654201E: info@capital-iom.com