E-Delivery

2015 ANNUAL REPORT • Project phase – is a categorization of the primary real estate security for each mortgage loan investment in the portfolio according to the stage of development that the underlying collateral is in as of the date presented. • Status – a categorization of mortgage loan investments according to enforcement actions and timing differences between the receipt of interest payments and contractual due dates. • Portfolio turn over rate – represents mortgage loan principal repayments received during the stated period expressed as a ratio of the daily weighted average size of the mortgage investment portfolio. • Payout ratio – represents total dividends declared to the holders of all classes of preferred shares divided by the net income and comprehensive income attributable to all classes of preferred shares for the period presented. • Redemption price – represents the net asset value per preferred share calculated by the Fund for purposes of processing redemptions in accordance with the terms of the offering memorandum. Results of Operations e Fund generated an internal rate of return (IRR) of 8.73% (2014 - 8.88%) for the Year after the payment of all fees and expenses. In comparison, the Fund's benchmark for the year was 6.46% (2014 - 6.59%). e benchmark is calculated as the Government of Canada 2-year bond yield (series V122538) plus 550 basis points. e Manager is very pleased with the performance of the Fund over the Year, and believes that the IRR of 8.81% (2014 - 8.92%) generated since inception of the Fund in 2009, combined with a $0.00 cumulative loss history demonstrates a strong track record of achieving the stated objectives and balancing between the goals of capital preservation and income. During the Year, the Fund grew its shareholders' equity by $21,998,017 (2014 – $25,007,221) to $60,210,793 (2014 - $38,212,776) as at February 28, 2015 primarily by completing ongoing sales of its Class A and Class B preferred shares. Overall, the Fund's shareholders' equity has grown during the Year by approximately 57.57% since February 28, 2014. e Fund's continued growth has meant that a greater number of mortgage securities are included in the portfolio and that larger individual mortgage investments are now compatible with the investment strategy and asset allocation model of the Fund. Having capacity to participate in larger individual mortgage investments increases the universe of potential investments to the Fund, and improves its ability to hold larger positions in any single mortgage in the interest of deploying capital efficiently. Over the Year, the Fund advanced monies for investment in mortgages 199 times (2014 - 114 times) totalling $59,438,387 (2014 - $38,148,352) and received principal pay downs 114 times (2014 - 69 times) on previously advanced mortgage investments totalling $39,187,020 (2014 - $14,099,748). e net result of these transactions are total portfolio investments at February 28, 2015 of $57,319,141 (2014 - $37,067,774) or a portfolio turnover rate of 0.80 times (2014 - The IRR of 8.81 % generated since inception of the Fund in 2009, combined with a $ 0.00 cumulative loss history demonstrates a strong track record. 24

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