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2015 ANNUAL REPORT MANAGEMENT DISCUSSION OF FUND PERFORMANCE Investment Objectives and Strategies e Fund commenced operations in 2009 to provide investors indirect access to private 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, 2015 (the "Year") have not affected the overall risk profile. Basis of presentation International Financial Reporting Standards (IFRS) replaced Canadian Generally Accepted Accounting Principles (GA AP) under Part V of the handbook of the Canadian Institute of Chartered Accountants for publicly accountable enterprises for years beginning on or after January 1, 2011. In December 2011, the Accounting Standards Board of the Canadian Institute of Chartered Accountants required investment companies applying Accounting Guideline 18, to further defer adoption of IFRS until fiscal years beginning on or after January 1, 2014 by extending the mandatory requirement for all Canadian publically accountable enterprises to prepare their financial statements in accordance with IFRS as issued by the International Accounting Standards Board (IASB). Accordingly, financial data provided in this MRFP has been prepared in accordance with IFRS. Details of significant accounting differences between IFRS and Canadian GA AP can be found in the "Transition to IFRS" section below and in the financial statements for the year ended February 28, 2015 that accompany this MRFP. e Fund's reporting currency is the Canadian dollar. 22

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