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ANNUAL REPORT (g) During the year ended February 28, 2013, the Fund received a one-time repayment of $99,421 from the Fund Manager to offset the Fund's unamortized share issue cost balance at June 1, 2012. is repayment was in respect of share issue costs that were previously paid to the Manager under the terms of the Fund's structure prior to June 1, 2012 (see note 6(e)). (h) During the year ended February 28, 2013, the Fund made a one-time repayment of unearned income to the Fund Manager of $16,100. is repayment was in respect of structural changes to the Fund that occurred on January 21, 2013. e Fund earned $nil (2013 - $30,599) in lender fees from the Fund Manager during the year. (i) As at February 28, 2014 related parties, including certain directors that are not independent of management, voting shareholders, their immediate families and related corporations, held 128,145 (2013 – 150,984) of Class A preferred shares, with a total dollar value of $1,281,455 (2013 - $1,509,843). As at February 28, 2014, independent directors held 25,326 (2013 – 3,160) of Class A preferred shares, with a total dollar value of $253,261 (2013 – 31,605). (j) e Fund Manager held $2,095 (2013 - $nil) of the interest receivable balance in trust on behalf of the Fund at year end. Subsequent to year-end, the Fund Manager disbursed the proceeds to the Fund in accordance with the terms of its normal mortgage servicing operations. 7. Income taxes: As at February 28, 2014, the Fund had $nil (2013 - $4,423) future deductible temporary differences for income tax purposes. e potential benefit of these temporary differences has not been recognized in the financial statements. 8. Reconciliation of net asset value: Reconciliation between the paid up capital ("PUC NAV") of the preferred shares and net assets calculated using Canadian GAAP ("GAAP NAV") is as follows: Feb 28, 2014 PUC NAV Adjustment GAAP NAV Net asset value: Class A preferred shares $ 25,363,855 $ - $ 25,363,855 Class B preferred shares 12,847,921 - 12,847,921 Net asset value per share: Class A preferred shares $ 10.00 $ - $ 10.00 Class B preferred shares 10.00 - 10.00 Feb 28, 2013 PUC NAV Adjustment GAAP NAV Net asset value: Class A preferred shares $ 11,937,254 $ (3,997) $ 11,933,257 Class B preferred shares 1,271,724 (426) 1,271,298 Net asset value per share: Class A preferred shares $ 10.00 $ (0.003) $ 10.00 Class B preferred shares 10.00 (0.003) 10.00 48

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