E-Delivery

2015 ANNUAL REPORT As of June 15, 2015 the Fund holds a $2,474,054 investment in a first mortgage where $20,601 of accrued interest is past due. e Manager is working with this borrower to catch up the interest payment and accordingly enforcement action has not been commenced. During the Year, the Fund generated net income and comprehensive income of $4,240,298 (2014 - $2,025,183) which translated to basic and diluted earnings per share of $0.84 (2014 - $0.85). e Fund was able to declare distributions of $4,240,298 (2014 - $2,025,183) or $0.84 (2014 - $0.85) per share which represented a 100.00% payout ratio to preferred shareholders. e Fund either pays distributions in cash to preferred shareholders, or automatically reinvests these amounts into additional preferred shares of the same class, as directed by each shareholder under the dividend reinvestment program. e per share redemption price after distributions of both Class A and Class B preferred shares at February 28, 2015 is $10.00 (2014 - $10.00). Total revenue earned by the Fund for the Year increased to $5,304,642 from $2,546,869 or an increase of 108.28% from the year ended February 28, 2014. e increase in revenue was primarily due to the Fund increasing its portfolio of mortgage investments by $20,251,367, or 54.63%, from February 28, 2014 to February 28, 2015 commensurate with the increase to the Fund's capital pool during the Year. Total expenses for the Year increased to $1,064,344 from $521,686 for the year ended February 28, 2014. is increase is primarily due to management fees $397,754 (2014 - $191,015) and servicing fees $534,593 (2014 - $273,034) which increased in proportion to the revenue generated by the Fund's invested assets, and available capital respectively. All other expenses during the year also increased over those incurred during the year ended February 28, 2014, as operational activities increased in line with a growing mortgage portfolio. During the year the Fund incurred insurance expense as the directors and officers insurance coverage was improved and mortgage impairment coverage was initiated under the policy of the Manager. e Manager has assessed these coverages are now cost effective due to the size of the capital pool, and are desirable to respectively allow the Fund to continue attracting high quality independent directors/lending review committee members to its governance bodies and to mitigate risk within the portfolio. Recent Developments and Outlook e mortgage portfolio has performed well during the Year, and has continued to develop as expected. e Fund's ongoing focus to limit debt in its capital structure and invest in mortgages with meaningful equity buffers has strongly positioned it at February 28, 2015 despite volatility in oil prices. e business model of the Fund is designed to operate across cycles because it is premised on activity occurring within the real estate market, not real estate price increases. To date activity has remained strong, and the Manager has continued to originate attractive deal flow that has sustained a high deployment of the Fund's capital in the interest of generating income. e Manager does not expect to vary its approach or the asset allocation model of the Fund over fiscal 2016. As of June 15, 2015 it appears that a lenders market may be emerging with respect to Alberta real estate transactions, and that sophisticated borrowers are placing increasing value on the quality, expertise, service level and permanency of the lenders that serve them. Comfort with respect to the ability to fund, having Alberta based decision makers and a consistent track 26

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