E-Delivery

MANAGEMENT DISCUSSION OF FUND PERFORMANCE Investment Objectives and Strategies e Fund commenced operations in 2009 to provide investors indirect access to mortgage investments that were selected and approved by the Manager. It is the intention of the Fund to qualify as a "mortgage investment corporation" as defined under Section 130.1(6) of the Income Tax Act (Canada). e investment objectives of the Fund are to: 1. Preserve capital; and 2. Generate monthly income. To realize on its objectives, the Fund invests in a diversified portfolio of private mortgage investments that mature within two or less years and consist primarily of development financing, equity take out and financial bridging transactions that are secured directly by land, multifamily residential, single family residential, office, retail, industrial and hospitality properties located primarily within western Canada. Risk e risks associated with investing in the Fund remain as disclosed in its offering memorandum. Changes to the Fund that occurred during the fiscal year ended February 28, 2014 (the "Year") have not affected the overall risk profile. Non-GAAP Measures e Fund prepares and releases financial statements in accordance with Part V of Canadian Generally Accepted Accounting Principles (GAAP). In this MRFP, as a complement to results provided in accordance with GAAP, the Fund discloses certain financial measures not recognized under GAAP and that do not have standard meanings prescribed by GAAP (collectively the "Non-GAAP Measures"). ese Non-GAAP Measures are further described below. e Fund has presented such Non-GAAP Measures because the Manager believes they are relevant measures of the ability of the Fund to earn and distribute cash dividends to shareholders and to evaluate the Fund's performance. ese Non-GAAP Measures should not be construed as alternative indicators of the Fund's performance to the increase in net assets from operations and cash flows from operating activities that were determined in accordance with GAAP. • Management expense ratio – represents total expenses and amortized share issue costs for the stated period expressed as an annualized percentage of the daily weighted average redemption value of the share class presented. • Weighted average interest rate – represents the weighted average interest rate on the mortgage investment portfolio at year end, as determined by the amount of dollars deployed at each interest rate. IRR of 8.88 % in fiscal 2014 19

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