E-Delivery

2015 ANNUAL REPORT (c) Liquidity risk: Liquidity risk is the risk that the Fund will encounter difficulty in meeting its financial obligations as they become due. is risk arises in the normal course of operations from fluctuations in cash flow as a result of the timing of mortgage loan investment fundings and repayments and the possible redemptions of shares. e Fund Manager routinely forecasts future cash flow sources and requirements of the Fund to help mitigate this risk and ensure cash is efficiently utilized. Contractual obligations as of February 28, 2015, February 28, 2014 and March 1, 2013 are due as follows: Feb 28, 2015 Total Less than 1 year Greater than 1 year Due to Fund Manager $ 263,316 $ 263,316 $ - Accounts payable and accrued expenses 10,625 10,625 - Dividends payable 218,637 218,637 - Liabilities and obligations $ 492,578 $ 492,578 $ - Feb 28, 2014 Total Less than 1 year Greater than 1 year Due to Fund Manager $ 143,413 $ 143,413 $ - Accounts payable and accrued expenses 24,626 24,626 - Dividends payable 118,679 118,679 - Liabilities and obligations $ 286,718 $ 286,718 $ - Mar 1, 2013 Total Less than 1 year Greater than 1 year Due to Fund Manager $ 50,194 $ 50,194 $ - Accounts payable and accrued expenses 7,706 7,706 - Dividends payable 47,061 47,061 - Liabilities and obligations $ 104,961 $ 104,961 $ - (d) Capital risk management: e Fund defines its current capital structure to include common shares, Class A preferred shares and Class B preferred shares. As at February 28, 2015, the Fund has no long term debt outstanding. e calculation of total capital is as follows: Feb 28, 2015 Feb 28, 2014 Mar 1, 2013 Class A preferred shares $ 40,111,495 $ 25,363,855 $ 11,933,257 Class B preferred shares 20,098,298 12,847,921 1,271,298 Class A common shares 1,000 1,000 1,000 Retained earnings - - - Total capital $ 60,210,793 $ 38,212,776 $ 13,205,555 e Fund manages its capital structure in order to support ongoing operations while focusing on its primary objectives of preserving shareholder capital and generating a cash dividend to preferred shareholders. e Fund reviews its capital structure on an ongoing basis and adjusts its capital structure in response to mortgage loan investment opportunities, the availability of capital, and anticipated changes in general economic conditions. 56

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