11. Financial Information

11. FINANCIAL INFORMATION

11.1 Introduction

Unaudited Pro Forma Statements of Financial Information

The Pro Forma Financial Information set out below has been prepared to illustrate the financial position of the Fund following completion of the Offer and the expenditure of funds associated with the Offer as if such events had occurred as at 30 June 2022. The Offer assumes a minimum subscription of $0 (nil), a maximum subscription of $13.2 million. The Pro Forma Financial Information is intended to be illustrative only and will not reflect the actual position and balances as at the date of this PDS or at the completion of the Offer. The Pro Forma Financial Information has been prepared in accordance with the principles and significant accounting policies set out in Section 11.2.

Assets

Cash and cash equivalents Receivables Financial assets

Total assets

Audited accounts Management accounts (unaudited, not reviewed) Minimum subscription ($0)

Maximum subscription (approx.$13.2 m) 30 June 2021 30 June 2022 Adjustments Pro forma Adjustments Pro forma

5,594,822 4,647,064 (30,000) 4,617,064 12,487,226 17,134,290 92,652 200,667 - 200,667 - 200,667 44,220,001 42,330,216 - 42,330,216 - 42,330,216

49,907,475 47,177,947 47,147,947 59,665,173

Liabilities

Accounts payable

Total liabilities

5,426,710 3,621,401 - 3,621,401 - 3,621,401

5,426,710 3,621,401 3,621,401 3,621,401

Net assets attributable to unitholders 44,480,765 43,556,546 43,526,546 56,042,772

The Pro Forma Statements of Financial Position have been derived from the unaudited, not reviewed historical statement of financial position of the Fund as at 30 June 2022 adjusted for the effects of the pro forma adjustments described below:

a) application of the significant accounting policies set out in section 11.2; b) the column headed ‘Minimum subscription ($0)’, has been prepared on the basis of no subscriptions for Units;

Page 63 of 91

c) the column headed ‘Minimum subscription ($0)’, has been prepared on the basis of no subscriptions for Units; d) the column headed ‘Maximum subscription ($13.2m)’, has been prepared on the basis of subscriptions for 9,783,871 Units by Applicants under this PDS at the Issue Price of $1.35 per Unit with no the units subscribed for under the entitlement issue and 100% of the Units issued via a placement under the shortfall. This is the maximum possible fee with placement fees payable to MP Capital Pty Ltd and brokers. The costs would be expected to be less depending on the level of acceptances of entitlements or if less than the

Maximum Subscription is raised. e) expenses related to the Offer will be paid out of the assets of the Fund; and f) no interest is earned by the Fund on Application Monies during the Offer period.

Capital Structure

Set out below is the anticipated capital structure of the Fund on completion of the Offer under the different indicated subscription amounts.

Audited accounts

Management accounts (unaudited, not reviewed) Pro forma Pro forma

30 June 2021 30 June 2022 Minimum subscription ($0) Maximum Subscription (approx. $13.2m)

Units 28,046,614 29,351,614 29,351,614 39,135,486 NAV per unit $1.5856 $1.5997 $1.5987 $1.5188 Options on issue - - - 9,783,872

The Fund’s number of units increased between 30 June 2021 and 30 June 2022 predominantly due to distribution reinvestments.

Pro Forma Cash

Minimum subscription ($0)

Maximum Subscription (approx. $13.2m) Cash balance at 30 June 2022 4,647,064 4,647,064 Cash proceeds from Offer - 13,208,226 Expenses of Offer (net of GST receivable) (30,000) (721,000)

Estimated net cash position 4,617,064 17,134,290

Estimated Expenses of the Offer

ASX fees Minimum subscription ($0) 0

Advisory and brokerage fees 10,000 Other fees 20,000

Total estimated gross expenses of the Offer (exc GST) 30,000

Maximum Subscription (approx. $13.2m) 26,000

670,000 25,000 721,000

Page 64 of 91

11.2 Significant Accounting Policies

Basis of Preparation The Pro Forma Financial Information has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law. The functional currency is in Australian Dollars and the level of rounding is to the nearest dollar. Foreign Currency Transactions All transactions in foreign currencies are translated at the foreign currency exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated to Australian dollars at the foreign currency closing exchange rate ruling at the balance sheet reporting date.

Foreign currency exchange differences arising on translation and realised gains and losses on disposals or settlements of monetary assets and liabilities are recognised in the income statement. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to Australian dollars at the foreign currency closing exchange rates ruling at the dates that the values were determined.

Foreign currency exchange differences relating to investments at fair value through profit or loss and derivative financial instruments are included in gains and losses on investments and net gain/loss on derivatives, respectively. All other foreign currency exchange differences relating to monetary items, including cash and cash equivalents are presented separately in the income statement.

Financial Instruments Purchases and Sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place are recognised on the trade date i.e. the date that the fund commits to purchase or sell the asset.

Measurement Investments are measured initially at fair value (transaction price) plus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Transaction costs on financial assets and financial liabilities at fair value through the profit and loss are expensed immediately, while on other assets they are amortised.

Subsequent to initial recognition, all instruments classified at fair value through profit or loss is measured at fair value with changes in their fair value recognised in profit or loss.

The fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices at the balance sheet date without any deduction for estimated future selling costs.

For investments with no active market such as unlisted equity securities, fair values are determined using discounted cash flow models or other appropriate valuation methodologies. These models use inputs that include growth forecasts, dividend ratios, capital expenditure and terminal values.

Page 65 of 91

Additionally where limited data exists for certain assets, prices are interpolated using historic and long-term pricing relationships.

Financial liabilities arising from the redeemable units issued by the Fund are carried at the redemption amount representing the investors’ right to a residual interest in the Fund’s assets, effectively fair value at reporting date.

Cash and Cash Equivalents Cash comprises current deposits with banks. Cash equivalents are short-term highly liquid investments readily convertible to known amounts of cash, subject to an insignificant risk of changes in value, and are held for the purpose of meeting short-term cash commitments rather than for investment or any other purposes

Investment Income Interest income is recognised in the income statement as it accrues, using the effective interest method of the instrument calculated at the acquisition date. Interest income includes amortisation of any discount, transaction costs or any other differences between the initial carrying amount of an interest-bearing instrument and its amount at maturity calculated on an effective interest rate basis.

Dividend income is recognised in the income statement on the ex-dividend date. The Fund may receive or choose to receive dividends in the form of additional shares rather than cash. The Fund recognises the dividend income for the amount of the cash dividend alternative with the debit treated as an additional investment.

Expenses All expenses, including management fees and custodian fees, are recognised in the income statement on an accruals basis.

Distributions In accordance with the Fund’s constitution, the Fund fully distributes its distributable income to Unitholders by way of cash or reinvestment into the Fund. Distributions to Unitholders comprise the taxable income of the Scheme to which the Unitholders are presently entitled.

Income Tax Under current income tax legislation the Fund is not liable to pay income tax as the net income of the Fund is assessable in the hands of the beneficiaries (the Unitholders) who are ‘presently entitled’ to the income of the Fund. There is no income of the Fund to which the Unitholders are not presently entitled and additionally, the Fund Constitution requires the distribution of the full amount of the net distributable income of the Fund to the Unitholders each period.

As a result, deferred taxes have not been recognised in the financial statements in relation to differences between the carrying amounts of assets and liabilities and their respective tax bases, including taxes on capital gains which could arise in the event of a sale of investments for the amount at which they are stated in the financial statements. In the event that taxable gains are realised by the Fund, these gains would be included in the taxable income that is assessable in the hands of the Unitholders as noted above.

Page 66 of 91

Realised capital losses are not distributed to Unitholders but are retained within the Fund to be offset against any realised capital gains. The benefit of any carried forward capital losses are also not recognised in the financial statements. If in any period realised capital gains exceed realised capital losses, including those carried forward from earlier periods and eligible for offset, the excess is included in taxable income that is assessable in the hands of Unitholders in that period and is distributed to Unitholders in accordance with the requirements of the Fund Constitution.

Unit Prices The unit price is based on unit price accounting outlined in the Fund’s constitution.

Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), recoverable from the Australian Taxation Office (ATO) as a reduced input tax credit (RITC) except:

i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

ii. for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from the Australian Taxation Office is included in receivables in the balance sheet.

Payables Trade payables and other accounts payable are recognised when the Fund becomes obliged to make future payments resulting from the purchase of goods & services.

Receivables Trade receivables and other receivables are recorded at amortised cost less impairment.

Page 67 of 91