Appendix 4E

Annual Financial Report For the year ended 31 March 2018

Name of entity Cordish Dixon Private Equity Fund III (formerly US Select Private Opportunities Fund III)

ARSN ReportingPeriod Previous CorrespondingPeriod	ARSN ReportingPeriod Previous CorrespondingPeriod	ARSN ReportingPeriod Previous CorrespondingPeriod
612 132 813	1 April 2017 to 31 March 2018	5 May2016(Date of Registration)to 31 March 2017
Results for announcement to the market
31-Mar-18
Total revenue ("revenue from ordinaryactivities") Up by 181.9% to $908,428
Net operating profit for the year ("profit from ordinaryactivites after tax attributable to unitholders") Up by 109.3% to $198,770
Total comprehensive income ("netprofit for theperiod attributable to unitholders") Up by 109.3% to $198,770

Commentary on results
Refer to attached Annual Financial Report, including the Directors' Report, Report to Unitholders and Manager's Report. Additional Appendix 4E disclosure requirements can be found in the notes to these financial statements.

Distributions

No distributions were paid or declared during the year 1 April 2017 to 31 March 2018.

Net tangible assets per share
31/03/2018	$1.50
31/03/2017	$1.50

Earnings per share
	31 March 2018	31 March 2017
Basic earnings per share	0.32 cents	(6.38 cents)
Diluted earningsper share	0.32 cents	(6.38 cents)

Financial Report
This report is based on the 31 March 2018 Annual Report and has been audited byDeloitte Touche Tohmatsu.

Cordish Dixon Private Equity Fund III ARSN 612 132 813

Annual Financial Report - 31 March 2018

Cordish Dixon Private Equity Fund III Contents 31 March 2018

Report to unitholders	2
Manager's report	3
Corporate governance statement	6
Directors' report	11
Auditor's independence declaration	17
Statement of profit or loss and other comprehensive income	18
Statement of financial position	19
Statement of changes in equity	20
Statement of cash flows	21
Notes to the financial statements	22
Directors' declaration	40
Independent auditor's report to the unitholders of Cordish Dixon Private Equity Fund III	41
Unitholder information	45
Directory	47

Cordish Dixon Private Equity Fund III Report to unitholders 31 March 2018

Dear Unitholders,

It is my pleasure to present to you the Annual Report for Cordish Dixon Private Equity Fund III (formerly US Select Private Opportunities Fund III) ( Fund ) for the financial year ended 31 March 2018 ( FY18 ).

The Fund posted a net profit of $0.2 million or 0.32 cents per Unit in FY18, compared with the prior year FY17 of $2.1 million net loss or 6.38 cents per Unit. The key component of this result was a $1.3 million fair value movement gain on the Fund’s investment in the LP. As at 31 March 2018, the Fund had pre-tax net assets of $108.1 million or $1.50 per Unit and post-tax net assets of $107.7 million or $1.50 per Unit.

Since completing its initial public offering on 20 July 2016, the Fund raised a further $36.5 million from investors by way of a placement of units completed on 8 September 2017.

As you are aware, one of the Fund’s investment objectives is to provide Unitholders with exposure to a portfolio of investments in small and mid-market private investment funds and privately held companies, predominantly in the United States ( US ). This is achieved by the Fund in which you are an investor, investing in specialist fund managers and investments through a limited partnership, the US Select Private Opportunities Fund III, L.P. ( LP ), in which the Fund has a 71.2% interest. The LP has committed US$115.0 million to the underlying funds, well ahead of schedule, and as at 31 March 2018, the LP had called US$48.5 million (approximately 42.5% of capital committed). The Fund’s proportionate share is US$34.5 million.

The LP has invested in 13 highly attractive US small-to-medium sized private investment funds, which provide the Fund with exposure to 48 companies. The nature of the fund managers and many of the underlying investee companies is detailed in the Investment Manager’s Report following this letter. As you will see, many of the underlying managers are at an early stage in their investment process and we anticipate a steady increase in the deployment of capital by the LP. Once the capital is deployed and the investee businesses are growing, the Fund will be in a position to fulfil its investment objective of delivering capital growth over a five to ten-year investment horizon.

I would like to thank fellow board members of the Responsible Entity, the Advisory Board and the Investment Management Team for their dedicated efforts in establishing a platform to deliver the Fund’s long-term investment objectives. I would also like to thank Unitholders for their continued support as we look to further enhance Australian investors’ exposure to small-to-mid-market US-based private investment firms.

Yours faithfully,

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Alex MacLachlan Chairman of the Responsible Entity

31 May 2018

Cordish Dixon Private Equity Fund III Manager's report 31 March 2018

At year end, the LP had US$115.0 million of total capital commitments to 13 underlying investment partners. A snapshot of the portfolio by underlying fund exposure as at 31 March 2018 is shown below.

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Bertram Growth Capital III, L.P. (US$10.0 million commitment by the LP)

At the time of the LP’s initial US$10 million commitment, Bertram had three portfolio companies. The first one is Trademark Global, a provider of high-quality, Company-branded products for the world’s top online retailers. The second one is Spectrio, a leading full-service provider of customer engagement solutions to a diversified set of enterprise and small to medium-sized businesses. The third one is Anord Control Systems, a leading provider of critical electrical power distribution and protection equipment for data centres, energy, and industrial applications.

DFW Capital Partners V, L.P. (US$7.5 million commitment by the LP)

DFW invested additional capital into LRI Energy Services and Saol Therapeutics in Q3 2017.

Elephant Partners I, L.P. (US$5.0 million commitment by the LP)

In May 2017, Elephant invested in A Cloud Guru, a leading online technology education business focused on public cloud platforms. In addition, Elephant invested in two more companies. The first is Allbirds, a fast growing direct to consume lifestyle brand initially focused on the casual shoe market. The second is RedAwning, a platform used by property managers and individual property owners to administer, market and book their vacation rental properties online.

Encore Consumer Capital Fund III, L.P. (US$7.5 million commitment by the LP)

During FY18, Encore made two new investments. Encore invested in Veggie Noodle in May 2017. Veggie Noodle is a manufacturer and marketer of branded spiralised vegetable noodles sold under the “Veggie Noodle Co.” brand. In February 2018, Encore invested in Supergoop!, a personal care and beauty brand focused on UV protection. The company is driven by creating innovative, efficacious and ingredient-conscious formulations that deliver broad spectrum protection.

Gemspring Capital Fund I, L.P. (US$10.0 million commitment by the LP)

Two additional investments were made by Gemspring in FY18. Gemspring invested in United Group Progams (UGP), a leading designer, marketer and administrator of healthcare benefit products and services. In June 2017, Gemspring invested in Therma Corporation, a leading full-service design-build specialty mechanical contractor that focuses on

Cordish Dixon Private Equity Fund III Manager's report 31 March 2018

complex HVAC, high-purity process piping and process controls for cleanrooms, laboratories and high-tech manufacturing facilities.

Growth Street Partners I, L.P. (US$5.0 million commitment by the LP)

Growth Street made two new investments. The first investment is Pear Deck, a provider of real-time classroom engagement software (SaaS). Pear Deck’s software enables K-12 teachers, schools, and school districts to engage student, improve educational outcomes, and enhance the teacher experience. The second investment is ChildCareCRM, the leading customer relationship management and marketing SaaS platform for the early childhood learning industry.

Incline Equity Partners IV, L.P. (US$7.5 million commitment by the LP)

Incline made its first investment in December 2017. Incline invested in Continental Batteries, a leading distributor of aftermarket batteries to the automotive, commercial, golf, marine and industrial markets.

Luminate Capital Partners, L.P. (US$7.5 million commitment by the LP)

Luminate Capital Partners is a private equity firm focused on making control investments in the software and software-enabled services areas. Luminate had invested in two companies prior to the LP’s commitment. The first company is called Fintech, a leading provider of data, payment and software solutions to the alcohol beverage industry. The second company is Oversight Insights On Demand, a provider of software as a service (SaaS) solutions that automate spending program compliance. In June 2017, Luminate invested in StarCompliance, the leading provider of enterprise compliance and regulatory software solutions for the financial services industry.

In addition, Luminate invested in AMTdirect, a leading provider of lease administration and lease accounting solutions. During Q1 2018, Luminate invested in Conexiom, the leading provider of cloud-based supply chain document automation software solutions.

NMS Fund III, L.P. (US$7.5 million commitment by the LP)

During Q3 2017, the LP committed US$7.5 million to NMS. NMS is a private investment firm specialising in strategic equity investments of lower middle-market companies in selected growth industries. In October 2017, NMS invested in Grape Tree, a healthcare staffing agency that provides staffing solutions to healthcare facilities across the Midwest by providing healthcare professionals to fill last-minute or long-term shifts created by staffing shortages.

Peakspan Capital Fund I, L.P. (US$5.0 million commitment by the LP)

PeakSpan made an investment is Cloudbeds, a leading provider of hospitality management software for independent properties (hotels, inns, bed and breakfasts, campgrounds, vacation rentals, and more). PeakSpan also invested in two more companies in FY18, but the transactions have not yet been announced, so the name of the companies cannot be disclosed now.

Telescope Partners I, L.P. (US$5.0 million commitment by the LP)

During Q4 2017, the LP committed US$5.0 million to Telescope. Telescope Partners is an active growth equity firm partnering with best in class entrepreneurs across the technology landscape. Telescope invested in Brandfolder in September 2017. Brandfolder is a simple digital asset management solution for storing, sharing and showcasing digital assets. Organisations like Slack, OpenTable, Shazam, and Under Armour rely on Brandfolder to deliver consistent and compelling brand experiences.

Trive Capital Fund II, L.P. (US$10.0 million commitment by the LP)

Trive had another busy year with three new investments and one distribution in FY18. The first investment is uSell, a large market maker of used smartphones which acquires used smartphones, which it grades and repairs, and then distributes through the world using both its internal sales force and an automated online platform. The second investment is Circle 8, a provider of operated and maintained crane-lifting and pumping services to the oil and gas, commercial and industrial markets in the southern US. The third investment is Redmond & Greer, a wholesale distributor of prescription pharmaceuticals. In February 2018, Trive distributed US$0.3 million to the LP. The distribution was primarily from a Core Appalachia dividend payment, which has been retained by the LP for working capital.

Cordish Dixon Private Equity Fund III Manager's report 31 March 2018

US Select Direct Private Equity II, L.P. (US$27.5 million commitment by the LP)

The LP committed US$27.5 million to US Select Direct II in Q4 2017. US Direct has been established with the sole purpose of investing in a direct portfolio of select private companies alongside leading, specialist private investment funds, a strategy commonly referred to as co-investing. US Select Direct II invested in two new companies throughout the FY18. The first company is called Topgolf, a unique entertainment and event venue offering competitive golfing games for all ages and skill levels and advanced technology to track the accuracy and distance of players’ shots. The second company is called Capp, a SaaS provider of HR recruiting and assessment platform solutions for mostly large and mid-sized companies.

Cordish Dixon Private Equity Fund III Corporate governance statement 31 March 2018

Overview

Cordish Dixon Private Equity Fund III ( Fund ) is a listed managed investment scheme, the units of which are listed on the Australian Securities Exchange ( ASX ). The Fund has no employees, and its day-to-day functions and investment activities are managed by Walsh & Company Investments Limited and US Select Private Opportunities Fund III, GP, in accordance with the relevant management agreements.

The ASX Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations’ provides the guidelines for good corporate governance. The directors of the Responsible Entity, Walsh & Company Investments Limited ( Board ), recognise the importance of good corporate governance.

The Fund’s Corporate Governance Charter, which incorporates the Fund’s policies referred to below, is designed to ensure the effective management and operation of the Fund and will remain under regular review. The Corporate Governance Charter is available on the Fund’s website www.cordishdixonfunds.com.au.

A description of the Fund’s adopted practices in respect of the eight Principles and Recommendations from the 3[rd] Edition of the ASX Corporate Governance Principles and Recommendations are set out below. All these practices, unless otherwise stated, were in place throughout the financial year and to the date of this report.

1. Lay solid foundations for management and oversight

Board roles and responsibilities

The Board is responsible for the overall operation, strategic direction, leadership and integrity of the Fund and, in particular, is responsible for the Fund’s growth and success. In meeting its responsibilities, the Board undertakes the following functions:

providing and implementing the Fund’s strategic direction;
reviewing and overseeing the operation of systems of risk management, ensuring that significant risks facing the Fund are identified, that appropriate control, monitoring and reporting mechanisms are in place and that risk is appropriately dealt with;
overseeing the integrity of the Fund’s accounting and corporate reporting systems, including the external audit;
ensuring the Board is comprised of individuals who are best able to discharge the responsibilities of directors having regard to the law and the best standards of governance;
reviewing and overseeing internal compliance and legal regulatory compliance;
ensuring compliance with the Fund’s Constitution and with the continuous disclosure requirements of the ASX Listing rules and the Corporations Act 2001 ;
overseeing the Fund’s process for making timely and balanced disclosures of all material information concerning the Fund; and
communicating with and protecting the rights and interest of all unitholders.

The Board has established a formal policy which sets out its functions and responsibilities. A review of the policy is conducted annually.

2. Structure the board to add value

Composition of the Board

The Board is structured to maintain a mix of directors from different backgrounds with complementary skills and experience. Details of each director at the date of this report are given in the Directors’ Report, including the period in office, skills, experience and expertise relevant to the position of director.

The directors of the Responsible Entity at the date of this report are:

Alex MacLachlan

Cordish Dixon Private Equity Fund III Corporate governance statement 31 March 2018

Tristan O’Connell

Warwick Keneally

Having regard to the size of the Fund and the nature of its business, the Board has determined that a Board with three members is the appropriate composition for the Board and will enable it to continue to effectively discharge its responsibilities to the Fund. However, the composition of the Board will be reviewed periodically.

The current Board is not independent. The Board, however, has established a Compliance Committee with a majority of independent Members who are responsible for monitoring the extent to which the Responsible Entity complies with the Fund’s constitution, compliance plan and any relevant regulations. The Committee must provide a report to the Board at least on a quarterly basis and report to ASIC if it is of the view that the Responsible Entity has not complied with the constitution, compliance plan or any relevant regulations. The Fund recognises the ASX Recommendations with respect to establishing remuneration, audit, risk and nomination committees as good corporate governance. However, considering the size of the Fund, the functions that would be performed by these committees are best undertaken by the Board.

The Board will review its view on committees in line with the ASX Recommendations and in light of any changes to the size or nature of the Fund and, if required, may establish committees to assist it in carrying out its functions. At that time, the Board will adopt a charter for such committees in accordance with the ASX Recommendations and industry best practices.

It is the Board’s policy to determine the terms and conditions relating to the appointment and retirement of nonexecutive directors on a case-by-case basis and in conformity with the requirements of the ASX Listing Rules and the Corporations Act 2001 . In accordance with the corporate governance policy, directors are entitled to seek independent advice at the expense of the Fund. Written approval must be obtained from the chair prior to incurring any expense on behalf of the Fund.

3. Promote ethical and responsible decision making

Code of conduct

The Board has adopted a Code of Conduct to define the basic principles of business conduct of the Fund and the Responsible Entity. This Code requires the Fund’s personnel to abide by the policies of the Fund and to the law. The Code is a set of principles giving direction and reflecting the Fund’s approach to business conduct and is not a prescriptive list of rules for business behaviour.

Unit trading policy

The Board of the Fund has established a Unit Trading Policy to apply to trading in the Fund’s units on the ASX. This policy outlines the permissible dealing of the Fund’s units while in possession of price sensitive information and applies to all directors of the Responsible Entity and the Investment Manager.

The Policy imposes restrictions and notification requirements, including the imposition of blackout periods, trading windows and the need to obtain pre-trade approval.

Insider trading policy

The Board of the Responsible Entity has established an Insider Trading Policy to apply to trading in the Fund’s units on the ASX. This policy applies to all directors, executives and employees of the Responsible Entity, and the Investment Manager. All directors, executives and employees of the Responsible Entity and the Investment Manager must not deal in the Fund’s units while in possession of price sensitive information. In addition, the general Unit Trading Policy sets out additional restrictions which apply to directors and executives of the Responsible Entity and the Investment Manager.

Cordish Dixon Private Equity Fund III Corporate governance statement 31 March 2018

4. Safeguard integrity in financial reporting

Compliance Committee

As a registered managed investment scheme, the Fund has a compliance plan that has been lodged with the Australian Securities and Investments Commission ( ASIC ). The compliance plan is reviewed comprehensively every year to ensure that the way in which the Fund operates protects the rights and interests of unitholders and that major compliance risks are identified and properly managed.

The Responsible Entity has formed a Compliance Committee to ensure the Fund complies with the relevant regulations and its constitution. The committee meets and reports to the Board of the Responsible Entity on a quarterly basis.

The committee is structured with three members, the majority of which are independent. Details of the Compliance Committee members are as follows:

Tristan O’Connell (Internal Member)

Refer to Information on directors (page 12).

- Michael Britton (Independent Member)

Michael has over 35 years of commercial and financial services experience, initially with Boral Limited (ASX: BLD) and culminating in 12 years as General Manager of the corporate businesses of The Trust Company Limited (ASX: TRU), where he established the company’s reputation as a leader in the delivery of independent Responsible Entity services. He has represented The Trust Company as a director on the boards of both domestic and offshore operating subsidiary companies and a large number of special purpose companies delivering the Responsible Entity function in both conventional and stapled, ASX listed and unlisted managed investment schemes. Michael has acted as a Responsible Manager, a member of committees of inspection in relation to large insolvency administrations and as an independent compliance committee member for substantial investment managers with portfolios of managed investment schemes. He is an independent director on the board of the un-listed Knights Capital Group Limited, a Perth-based investor and property fund manager, and he is also a Panel Member for the Financial Ombudsman Service Limited.

Michael holds degrees in Jurisprudence and Law from the University of New South Wales and is a Graduate Member of the Australian Institute of Company Directors and a Fellow of the Governance Institute of Australia.

-

Barry Sechos (Independent Member)

Barry is a Director of Sherman Group Pty Limited, a privately owned investment company, and is responsible for managing the legal, financial and operational affairs of Sherman Group of Companies. Barry has 30 years experience in corporate law and finance having spent seven years as a banking and finance lawyer at Allen Allen & Hemsley (Sydney, Singapore and London), and eight years as a Director of EquitiLink Funds Management and Aberdeen Asset Management Australia. Barry is also a Director of Paddington St Finance Pty Ltd, a specialist structured finance company, See Saw Films, a film production and finance group and winner of the 2011 Academy Award for Best Picture, Aberdeen Leaders Limited, an investment company listed on the ASX, Regeneus Limited, an ASX listed biotech company and a Director of Sherman Centre of Culture and Ideas, a charitable cultural organisation.

5. Make timely and balanced disclosure

The Board is committed to complying with its continuous disclosure obligations under the Corporations Act 2001 and ASX Listing Rules, as well as releasing relevant information to the market and unitholders in a timely and direct manner to promote investor confidence in the Fund and its securities.

Cordish Dixon Private Equity Fund III Corporate governance statement 31 March 2018

The Fund has adopted a Continuous Disclosure Policy to ensure the Fund complies with its continuous disclosure requirements. The policy is administered by the Board and monitored by the Compliance Committee.

6. Respect the rights of unitholders

The Fund promotes effective communication with unitholders. The Board has developed a strategy within its Continuous Disclosure Policy to ensure that unitholders are informed of all major developments affecting the Fund’s performance, governance activities and state of affairs. Each unitholder is also provided online access to the Registry to allow them to receive communications from, and send communication to, the Responsible Entity and the Registry. This also includes using a website to facilitate communication with unitholders.

Information is communicated to unitholders through announcements to ASX, releases to the media and dispatch of financial reports. Unitholders are provided with an opportunity to access such reports and releases electronically; copies of all such ASX announcements are linked to the Fund’s website at cordishdixonfunds.com.au.

These include:

monthly net asset value estimates
monthly fund updates
quarterly fund updates
half-year report
annual report
occasional announcements to the ASX made in compliance with the Fund’s continuous disclosure requirements
occasional correspondence sent to unitholders on matters of significance to the Fund

The Board encourages full participation of unitholders at the general meetings held by the Fund to ensure a high level of accountability and identification with the Fund’s strategy. Unitholders who are unable to attend the general meeting are given the opportunity to provide questions or comments ahead of the meeting and where appropriate, these questions are answered at the meeting.

7. Recognise and manage risk

The Board has accepted the role of identification, assessment, monitoring and managing the significant areas of risk applicable to the Fund and its operations. It has not established a separate committee to deal with these matters because the directors believe the size of the Fund and its operations do not warrant a separate committee at this time. The Board also monitors and appraises financial performance, including the approval of annual and half-year financial reports and liaising with the Fund’s auditor.

In order to evaluate and continually improve the effectiveness of its risk management and internal control processes, the Responsible Entity has adopted a set of Risk Management Guidelines for the Fund. The Board conducts an annual review of the Fund’s Risk Management Guideline to satisfy itself that the Risk Management framework continues to be sound. During the year ended on 31 March 2018, the Responsible Entity’s Risk Management Framework was reviewed on 17 July 2017.The Fund does not have a material exposure to sustainability risks.

The Board receives a letter half-yearly from the Fund’s external auditor regarding their procedures and reporting that the financial records have been properly maintained and the financial statements comply with the Accounting Standards.

The Responsible Entity provides declarations required by Section 295A of the Corporations Act 2001 for all financial periods and confirms that in its opinion the financial records of the Fund have been properly maintained and that the financial statements and accompanying notes comply with the Accounting Standards and give a true and fair view of the financial position and performance of the Fund, based on its review of the internal control systems, management of risk, the financial statements and the letter from the Fund’s external auditor.

Cordish Dixon Private Equity Fund III Corporate governance statement 31 March 2018

Details of the Fund’s financial risk management are set out in the notes to the financial statements in the annual report.

8. Remunerate fairly and responsibly

Due to the relatively small size of the Fund and its operations, the Board does not consider it appropriate at this time to establish a formal remuneration committee.

No director of the Responsible Entity receives any direct remuneration from the Fund. In accordance with the Fund’s Constitution, the Responsible Entity is entitled to a management fee for services rendered. Details of the Fund’s related party transactions are disclosed in the notes to financial statements within the Annual Report. The Fund’s Constitution is available to unitholders on the Fund’s website.

Cordish Dixon Private Equity Fund III Directors' report 31 March 2018

The directors of Walsh & Company Investments Limited ( Walsh & Co. ), the Responsible Entity of the Cordish Dixon Private Equity Fund III (formerly US Select Private Opportunities Fund III) ( Fund ), present their report together with the annual financial statements of the Fund for the financial year ended 31 March 2018.

During the year, the Fund changed its name from US Select Private Opportunities Fund III to Cordish Dixon Private Equity Fund III.

Directors

The directors of the Responsible Entity at any time during or since the end of the financial year are listed below:

Alex MacLachlan
Tristan O'Connell
Warwick Keneally (appointed 16 May 2017)
Tom Kline (resigned 16 May 2017)

Directors were in office since the start of the financial year to the date of this report unless otherwise stated.

Information on the directors:

Alex MacLachlan

Alex is currently the Chairman of the Responsible Entity for Cordish Dixon Private Equity Fund Series, Fort Street Real Estate Capital Fund Series, Emerging Markets Masters Fund, New Energy Solar Fund, US Masters Residential Property Fund, Evans & Partners Asian Fund and Evans & Partners Global Disruption Fund. Alex is also a director of Fort Street Real Estate Capital, the Australian Masters Yield Fund Series and Asian Masters Fund Limited.

Alex joined Dixon Advisory in 2008 to lead the then newly formed Funds Management division, which later became Walsh & Company. From funds under management of under $100 million at the time of his start, Alex has grown Walsh & Company Group to over $5 billion of assets under management today, with investments across residential and commercial property, fixed income, private equity, listed equities and renewable energy. Prior to joining the firm, Alex was an investment banker at UBS AG, where he rose to Head of Energy for Australasia. During his tenure in investment banking, Alex worked on more than $100 billion in mergers and acquisitions and capital markets transactions, advising some of the world's leading companies.

Alex has a Bachelor of Arts from Cornell University and a Masters of Business Administration from The Wharton School, University of Pennsylvania.

During the past three years Alex has acted as a non-executive director or director of the Responsible Entity of the following Australian listed public entities:

Asian Masters Fund Limited (since 2009, delisted 17 May 2018)
Australian Masters Corporate Bond Fund No 5 Limited (since 2009, delisted 26 August 2016)
Australian Masters Yield Fund No 1 Limited (since 2010, delisted 28 July 2017)
Australian Masters Yield Fund No 2 Limited (since 2010, delisted 28 July 2017)
Australian Masters Yield Fund No 3 Limited (since 2011, delisted 13 April 2018)
Australian Masters Yield Fund No 4 Limited (since 2011)
Australian Masters Yield Fund No 5 Limited (since 2012)
Cordish Dixon Private Equity Fund I (since 2012)
Cordish Dixon Private Equity Fund II (since 2013)
Emerging Markets Masters Fund (since 2012)
Evans & Partners Asia Fund (since 2018)
Evans & Partners Global Disruption Fund (since 2017)
Global Resource Masters Fund Limited (since 2008, delisted 11 March 2016)
New Energy Solar Limited (since 2015, until 27 October 2017)
New Energy Solar Fund (since 2015)
US Masters Residential Property Fund (since 2011)

Cordish Dixon Private Equity Fund III Directors' report 31 March 2018

Tristan O'Connell

Tristan is Group Chief Financial Officer and Company Secretary for Evans Dixon and Director of Walsh & Company Investments Limited – the Responsible Entity for Cordish Dixon Private Equity Fund Series, Fort Street Real Estate Capital Fund Series, Emerging Markets Masters Fund, New Energy Solar Fund, US Masters Residential Property Fund, Evans & Partners Asia Fund and Evans & Partners Global Disruption Fund.

At Evans Dixon, Tristan oversees the finance and accounting function of the firm's group of companies. This incorporates funds management accounting for sixteen funds. He began his association with Dixon Advisory in 2005, joining to spearhead its financial management and growth.

Tristan brought to Evans Dixon more than a decade in corporate financial and management roles within the wholesale markets industry. This included a long tenure at Tullet Prebon, one of the world’s leading inter-dealer broker firms that specialise in over-the-counter interest rate, foreign exchange, energy and credit derivatives. Tristan was Financial Controller of the Australian operation and held senior finance roles in their Singapore and London offices.

Tristan has a Bachelor of Commerce from the Australian National University, is a member of CPA Australia and is a Fellow of the Financial Services Institute of Australasia.

During the past three years Tristan has acted as a non-executive director or director of the Responsible Entity of the following Australian listed public entities:

Cordish Dixon Private Equity Fund I (since 2012)
Cordish Dixon Private Equity Fund II (since 2013)
Emerging Markets Masters Fund (since 2012)
Evans & Partners Asia Fund (since 2018)
Evans & Partners Global Disruption Fund (since 2017)
New Energy Solar Fund (since 2015)
US Masters Residential Property Fund (since 2011)

Cordish Dixon Private Equity Fund III Directors' report 31 March 2018

Tom Kline

Tom Kline is the Executive Director - North America for New Energy Solar (NES). Tom was the inaugural CEO of New Energy Solar after the launch of the business in December 2015, and was previously the Chief Operating Officer of Walsh & Company, the Funds Management division of Evans Dixon. Tom relocated to the US in April 2017 to oversee NES' existing portfolio of solar power assets, and to guide the business' continued North America investment.

Tom has extensive experience in funds management, corporate finance, and mergers and acquisitions, having been part of the senior management team at Walsh & Company and Dixon Advisory since 2009. Before joining the firm, Tom worked at UBS AG in Sydney. During his time at UBS, he was a member of the Power, Utilities and Infrastructure team and advised on a wide range of public and private M&A and capital market transactions. Tom advised some of Australia's leading energy generators and infrastructure players including EnergyAsutralia and Transurban. Tom also advised energy and utility companies on the proposed introduction of Australia’s federal carbon trading scheme (Carbon Pollution Reduction Scheme) and implications for fossil fuel and renewable energy generation.

Tom has a Bachelor of Commerce and Bachelor of Laws (Honours) from the Australian National University.

During the past three years Tom has acted as a non-executive director or director of the Responsible Entity of the following Australian listed public entities:

Australian Masters Yield Fund No 4 Limited (since 2011, until 19 July 2017)
Australian Masters Yield Fund No 5 Limited (since 2011, until 19 July 2017)
Cordish Dixon Private Equity Fund I (since 2012, until 16 May 2017)
Cordish Dixon Private Equity Fund II (since 2013, until 16 May 2017)
Emerging Markets Masters Fund (since 2012, until 16 May 2017)
New Energy Solar Fund (since 2015, until 16 May 2017)
New Energy Solar Limited (since 2015, until 27 October 2017)
US Masters Residential Property Fund (since 2011, until 16 May 2017)

Cordish Dixon Private Equity Fund III Directors' report 31 March 2018

Warwick Keneally

Warwick is Head of Finance at Walsh & Company, the Funds Management division of Evans Dixon and Director of Walsh & Company Investments Limited, the Responsible Entity for Cordish Dixon Private Equity Fund Series, Fort Street Real Estate Capital Fund Series, Emerging Markets Masters Fund, New Energy Solar Fund, US Masters Residential Property Fund, Evans & Partners Asia Fund and Evans & Partners Global Disruption Fund.

Before joining Walsh & Company, Warwick worked in chartered accounting firms specialising in turnaround and restructuring. Warwick started his career with KPMG, working in their Canberra, Sydney and London offices and has undertaken a range of complex restructuring and insolvency engagements across Europe, UK and Australia, for a range of Australian, UK, European and US banks.

Warwick has worked with companies and lenders to develop and implement strategic business options, provide advice in relation to continuous disclosure requirements, develop cash forecasting training for national firms, and lectured on cash management. Among his former roles, Warwick worked on the initial stages of the HIH insolvency - as part of the key management group tasked with the wind-down of the global estate.

Warwick has a Bachelor of Economics and Bachelor of Commerce from the Australian National University and is a Member of the Institute of Chartered Accountants in Australia.

During the past three years Warwick has acted as a non-executive director of the Responsible Entity of the following Australian listed public entities:

Asian Masters Fund Limited (since 2018, delisted 17 May 2018)
Australian Masters Yield Fund No 4 Limited (since 2017)
Australian Masters Yield Fund No 5 Limited (since 2017)
Cordish Dixon Private Equity Fund I (since 2017)
Cordish Dixon Private Equity Fund II (since 2017)
Emerging Markets Masters Fund (since 2017)
Evans & Partners Asia Fund (since 2018)
Evans & Partners Global Disruption Fund (since 2017)
New Energy Solar Limited (since 2017, until 3 May 2017)
New Energy Solar Fund (since 2017)
US Masters Residential Property Fund (since 2017)

Principal activities and significant changes in nature of activities

The principal activity of the Fund during the financial year was investing in small-to-mid-market private investment funds and privately held companies with a predominate focus in the US. There were no significant changes in the nature of these activities.

Distributions

There were no distributions paid, recommended or declared during the current or previous financial year.

Review and results of operations

The profit for the Fund after providing for income tax amounted to $198,770 (31 March 2017: loss of $2,133,640).

Cordish Dixon Private Equity Fund III Directors' report 31 March 2018

The Fund has invested in a limited partnership, US Select Private Opportunities Fund III, L.P. ( LP ) which, in turn, invests in small-to-medium-sized private investment funds. The LP has committed capital across 13 underlying private investment funds, which focus on a range of industries including health care, business services, software businesses, and food and consumer products. For the year ended 31 March 2018, these underlying private investment funds made drawdown requests on the LP to fund their investments, management fees and operating expenses. Net drawdown requests made by the underlying private investment funds since inception to the end of the year totalled US$37.0 million.

The Fund has committed capital of US$81.2 million, representing an interest of 71.2% in the LP at the reporting date. The Fund’s proportionate share of the total capital called as at 31 March 2018 was US$34.5 million (or $45.0 million).

Total comprehensive income for the year was $198,770 (2017 loss: $2,133,640). The key components of this result included a foreign exchange gain of $1,304,571 (2017 loss: $1,532,330) relating to translation of US denominated cash funds held during the year and a $350,868 fair value movement loss (2017: $375,422) on the Fund’s investment in the LP during the year. As at 31 March 2018, the Fund had net assets of $107,737,746 representing $1.50 per unit.

The Fund had a basic and diluted earnings per unit of 0.32 cents for the year ended 31 March 2018.

Events subsequent to the reporting period

No matter or circumstance has arisen since 31 March 2018 that has significantly affected, or may significantly affect the Fund's operations, the results of those operations, or the Fund's state of affairs in future financial years.

Future developments and expected results of operations

The Fund has committed capital to the LP to fund 13 underlying private investment funds and is at a relatively early stage of investing and expects to complete its investments as the committed capital is called by the LP. The objective of the Fund is to achieve capital growth over a 5 to 10 years investment horizon from its exposure to a portfolio of investments in small and mid-market private investment funds and privately held companies predominately focused in the US.

Environmental regulation

The Fund is not subject to any particular and significant environmental regulations under a law of the Commonwealth or a State or Territory.

Other relevant information

The following lists other relevant information required under the Corporations Act 2001 :

details of fees paid to the Responsible Entity during the financial year – refer to note 18 to the financial statements
the Responsible Entity did not hold any interests in the Fund at the end of the financial year
details of issued interests in the Fund during the financial year – refer to note 7 to the financial statements.

Options

No options were granted over issued or unissued units in the Fund during, or since, the end of the year.

Indemnity and insurance

Under the Fund’s constitution, the Responsible Entity, including its officers and employees, is indemnified out of the Fund’s assets for any loss, damage expense or other liability incurred by it in properly performing or exercising any of its powers, duties or rights in relation to the Fund.

Insurance premiums have been paid, during or since the end of the financial year, for all of the directors of the Responsible Entity of the Fund. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for the auditor of the Fund.

Cordish Dixon Private Equity Fund III Directors' report 31 March 2018

Non-audit services

Details of the amounts paid or payable to the auditor, Deloitte Touche Tohmatsu, for non-audit services are outlined in note 19 to the financial statements.

The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 .

The directors are of the opinion that the services as disclosed in note 19 to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services are reviewed and approved prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES110: Code of Ethics for Professional Accountants set by the Accounting Professionals Ethical Standards Board.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.

This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001 .

On behalf of the directors

_________ Alex MacLachlan Director

31 May 2018

Deloitte Touche Tohmatsu ABN 74 490 121 060

Grosvenor Place 225 George Street Sydney, NSW, 2000 Australia

Phone: +61 2 9322 7000 www.deloitte.com.au

The Board of Directors Walsh & Company Investments Limited as Responsible Entity for: Cordish Dixon Private Equity Fund III Level 15 100 Pacific Highway NORTH SYDNEY NSW 2060

31 May 2018

Dear Board Members

Cordish Dixon Private Equity Fund III

In accordance with section 307C of the Corporations Act 2001 , I am pleased to provide the following declaration of independence to the directors of the Responsible Entity of Cordish Dixon Private Equity Fund III.

As lead audit partner for the audit of the financial statements of Cordish Dixon Private Equity Fund III for the financial year ended 31 March 2018, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

Weng W Ching Partner Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

Cordish Dixon Private Equity Fund III Statement of profit or loss and other comprehensive income For the year ended 31 March 2018

Note Revenue 4 Foreign exchange gain/(loss) Fair value movements of equity investments 11 Expenses Management and administration fees 18 Listing fees Audit and advisory fees Custody fees Share registry fees Legal and professional fees Other expenses Contribution fee 11 Profit/(loss) before income tax expense Income tax expense 5 Profit/(loss) after income tax expense for the year attributable to the unitholders of Cordish Dixon Private Equity Fund III Other comprehensive income for the year, net of tax Total comprehensive income/(loss) for the year attributable to the unitholders of Cordish Dixon Private Equity Fund III Basic earnings/(loss) per unit 6 Diluted earnings/(loss) per unit 6	2018 $ 908,428 1,304,571 (350,868) (399,916) (72,259) (97,226) (17,738) (25,660) (168,805) (56,406) (415,497)	Period from 5 May 2016 to 31 March 2017 $ 322,202 (1,532,330) (375,422) (272,370) (27,046) (78,739) (6,912) (7,694) (116,510) (38,819) -
	608,624 (409,854)	(2,133,640) -
	198,770 -	(2,133,640) -
	198,770	(2,133,640)
	Cents 0.32 0.32	Cents (6.38) (6.38)

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

Cordish Dixon Private Equity Fund III Statement of financial position As at 31 March 2018

Note Assets Current assets Cash and cash equivalents 8 Receivables 10 Prepayments Total current assets Non-current assets Other financial assets 11 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 12 Total current liabilities Non-current liabilities Deferred tax 13 Total non-current liabilities Total liabilities Net assets Equity Unit capital 7 Accumulated losses Total equity	2018 $ 64,049,994 106,443 20,661	2017 $ 60,151,508 182,402 9,015
	64,177,098	60,342,925
	44,077,339	11,968,964
	44,077,339	11,968,964
	108,254,437	72,311,889
	106,837	148,090
	106,837	148,090
	409,854	-
	409,854	-
	516,691	148,090
	107,737,746	72,163,799
	109,672,616 (1,934,870)	74,297,439 (2,133,640)
	107,737,746	72,163,799

The above statement of financial position should be read in conjunction with the accompanying notes

Cordish Dixon Private Equity Fund III Statement of changes in equity For the year ended 31 March 2018

Unit capital $ - - -	(Accumulated losses) $ - (2,133,640) -	Total equity $ - (2,133,640) -
- 76,845,472 (2,548,033)	(2,133,640) - -	(2,133,640) 76,845,472 (2,548,033)
74,297,439	(2,133,640)	72,163,799
Unit capital $ 74,297,439 - -	(Accumulated losses) $ (2,133,640) 198,770 -	Total equity $ 72,163,799 198,770 -
- 36,480,000 (1,104,823)	198,770 - -	198,770 36,480,000 (1,104,823)
109,672,616	(1,934,870)	107,737,746

The above statement of changes in equity should be read in conjunction with the accompanying notes

Cordish Dixon Private Equity Fund III Statement of cash flows For the year ended 31 March 2018

Note Cash flows from operating activities Interest income received Net payments to suppliers Net cash used in operating activities 9 Cash flows from investing activities Payments for investments Net cash used in investing activities Cash flows from financing activities Proceeds from issue of ordinary units 7 Payment of issue costs 7 Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial year 8	2018 $ 979,252 (1,301,271)	Period from 5 May 2016 to 31 March 2017 $ 152,663 (421,878)
	(322,019)	(269,215)
	(32,459,243)	(12,344,386)
	(32,459,243)	(12,344,386)
	36,480,000 (1,104,823)	76,845,472 (2,548,033)
	35,375,177	74,297,439
	2,593,915 60,151,508 1,304,571	61,683,838 - (1,532,330)
	64,049,994	60,151,508

The above statement of cash flows should be read in conjunction with the accompanying notes

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

1. General information

Cordish Dixon Private Equity Fund III (formerly US Select Private Opportunities Fund III) ( Fund ) is a Managed Investment Scheme registered and domiciled in Australia. The principal activities of the Fund are to invest in smallto-mid-market private investment opportunities in the United States of America ( US ), through its capacity as a Limited Partner of the US Select Private Opportunities Fund III, L.P. ( LP ) registered in the Cayman Islands.

During the year, the Fund changed its name from US Select Private Opportunities Fund III to Cordish Dixon Private Equity Fund III.

The comparative period is the period from 5 May 2016 (date of registration) to 31 March 2017.

(i) Basis of preparation

The financial statements have been prepared on an accrual basis and are based on historical cost with the exception of financial assets, which are measured at fair value. All amounts are presented in Australian dollars unless otherwise noted.

(ii) Statement of compliance

The financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards issued by the Australian Accounting Standards Board ( AASB ) and the Corporations Act 2001 . Compliance with Australian Accounting Standards ensures the financial statements and notes to the financial statements of the Fund comply with the International Financial Reporting Standards ( IFRS ) issued by the International Accounting Standards Board ( IASB ).

The financial statements were authorised for issue by the directors on 31 May 2018. For the purposes of preparing the financial statements, the Fund is a for-profit entity.

(iii) Adoption of new and revised Accounting Standards

The Fund has adopted all of the new and revised Standards and Interpretations issued by the AASB that are relevant to their operations and effective for the current year.

New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the Fund include:

AASB 2016-1 ‘Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised Losses’
AASB 2016-2 ‘Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107’
AASB 2017-2 ‘Amendments to Australian Accounting Standards – Further Annual Improvements 2014-2016’

No new or revised Standards and Interpretations effective for the current year are considered to materially impact the Fund.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

1. General information (continued)

(iv) Accounting Standards and Interpretations issued but not yet effective

At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue, but not yet effective. The potential impact of the new or revised Standards and Interpretations has not yet been determined, but is not expected to be material.

AASB 9 Financial Instruments, and the relevant amending standards

This standard is applicable to annual reporting periods beginning on or after 1 April 2018. The Fund will adopt this standard from 31 March 2019 but the impact of its adoption is yet to be assessed by the Fund.

AASB 15 ‘Revenue from Contracts with Customers’, AASB 2014-5 ‘Amendments to Australian Accounting Standards arising from AASB 15’, AASB 2015-8 ‘Amendments to Australian Accounting Standards – Effective Date of AASB 15’ and AASB 2016-3 ‘Amendments to Australian Accounting Standards – Clarifications to AASB 15’

AASB Interpretation 23 Uncertainty Over Income Tax Treatments, AASB 2017- 4 Amendments to Australian Accounting Standards – Uncertainty over Income Tax Treatments

This interpretation is applicable to annual reporting periods beginning on or after 1 April 2019. The adoption of this standard from 31 March 2020 is not expected to have a material impact on the Fund.

At the date of authorisation of the financial statements, the following IASB Standards and IFRIC Interpretations were also in issue but not yet effective, although Australian equivalent Standards and Interpretations have not yet been issued.

IFRIC Interpretation 22 : Foreign Currency Transactions and Advance Consideration

These amendments are applicable to annual reporting periods beginning on or after 1 April 2018. The adoption of these amendments from 31 March 2019 are not expected to have a material impact on the Fund.

Annual Improvements to IFRS Standards 2015–2017 Cycle

This interpretation is applicable to annual reporting periods beginning on or after 1 April 2019. The adoption of this interpretation from 31 March 2020 is not expected to have a material impact on the Fund.

2. Summary of significant accounting policies

The following accounting policies have been adopted in the preparation and presentation of the financial report.

a) Foreign currencies

The functional and presentation currency of the Fund is Australian dollars. This is based on an assessment that the primary economic environment in which the Fund operates is Australia.

Transactions in foreign currencies are initially recorded in Australian dollars by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies that are outstanding at the reporting date are retranslated at the rate of exchange ruling at the Statement of Financial Position date. Nonmonetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined.

Exchange differences arising on translation are recognised in profit or loss in the period in which they arise.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

2. Summary of significant accounting policies (continued)

b) Financial instruments

Financial instruments, incorporating financial assets and financial liabilities, are recognised when the Fund becomes a party to the contractual provisions of the instrument.

The Fund has early adopted AASB 9 Financial Instruments, which was issued in December 2014. AASB 9 includes requirements for the classification and measurement of financial assets.

(i) Financial assets

When financial assets are recognised initially, they are measured at fair value plus, in the case of financial assets not at fair value through profit and loss, directly attributable transaction costs.

Financial assets are subsequently measured at amortised cost using the effective interest rate method only if the following conditions are met, otherwise they are measured at fair value:

where a financial asset is held within a business model for the objective to collect contractual cash flows; and 2. contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The effective interest rate method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.

The Interest held by the Fund in the Limited Partnership (refer to (c) below) does not meet the conditions to satisfy subsequent measurement at amortised cost, and is therefore measured at fair value.

Gains and losses on all financial assets at fair value are recognised in profit or loss.

(ii) Financial liabilities

Financial liabilities are classified as derivative and non-derivative instruments as appropriate. The Fund determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value.

Non-derivative instruments are subsequently measured at amortised cost using the effective interest rate method. Derivative liabilities are subsequently measured at fair value.

(iii) Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged or cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

2. Summary of significant accounting policies (continued)

(iv) Fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal (or most advantageous) market at balance date under current market conditions. Fair value is determined based on the bid price for all quoted investments in an active market. Valuation techniques are applied to determine the fair value for all unlisted securities and securities in markets that are not active. The unlisted investment in the Limited Partnership held by the Fund is valued using a ‘proportionate’ value method based on the proportion of the total net asset value of the partnership in which the Fund has an interest at balance date.

c) Interest in Limited Partnership

The Fund has entered into a partnership arrangement with Cordish Private Ventures, Dixon Associates PE III Wholesale Fund and Cordish Dixon Wholesale Fund III, with a primary strategy of investing in US small-to-midmarket private investment funds. The partnership has been structured through a limited partnership vehicle – US Select Private Opportunities Fund III, L.P. ( LP ), in which the Fund had a 71.2% interest. The interest held by the Fund is regarded as a financial asset which is recorded at fair value (refer to note 2(b)(iv) for the fair value valuation basis adopted in respect of the partnership interest held). Subsequent changes in fair value are presented in profit or loss.

Distributions of capital or income received from the LP are recorded against the investment account, reflecting the fact that such amounts would previously have been included in the investment account either through capital contributions made or through fair value movements recognised in respect of unrealised capital or operating profits relating to the underlying investments.

d) Impairment of assets

The directors of the Responsible Entity assess at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, an estimate is made of the asset’s recoverable amount. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount through profit or loss.

No impairment assessment is performed in respect of the Interest in the Limited Partnership, where fair value changes are recorded in profit or loss.

e) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

f) Receivables

Receivables are financial assets with a contractual right to receive fixed or determinable payments that are not quoted in an active market. Receivables are recorded at amounts due less any impairment losses.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

2. Summary of significant accounting policies (continued)

g) Taxes

(i) Income tax

Under current Australian income tax laws, the Trust is not liable to pay income tax provided it is not a corporate unit trust or public trading trust and its distributable income for each income year is fully distributed to security holders, by way of cash or reinvestment.

The Fund may be liable to pay income tax in the United States of America ( US ) dependent on the structure of private investment funds in which the Limited Partnership ( LP ) invests and in turn the structure of the underlying investments made by the private investment funds. Rates of tax will vary dependant on the source of income derived.

A deferred tax liability is recognised (at the likely rate of tax in the US) based on the difference between the fair value and tax cost base of certain underlying investments in respect of which an economic interest is held by the Fund and on which income tax is expected to be payable in the US on realisation of such investments.

(ii) Goods and Services Tax ( GST )

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense.

Where fees are stated to be exclusive of GST and GST is payable on any fee, the fee will be increased by an amount equal to the GST payable.

Cash flows are included in the Statement of Cash Flows on a gross basis, except for the GST component of cash flows arising from investing and financing activities which are disclosed as operating cash flows.

The Fund qualifies for reduced input tax credits at a minimum rate of 55%.

h) Revenue recognition

Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the Fund and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

(i) Interest income

Interest income is recognised in profit or loss using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

i) Provisions

Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event, it is probable an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

2. Summary of significant accounting policies (continued)

j) Trade and other payables

Trade and other payables are recognised when the Fund becomes obliged to make future payments resulting from the purchase of goods or services. The balance is unsecured and is recognised as a current liability with the amount being normally paid within 30 days of recognition of the liability.

k) Earnings per unit

Basic earnings per unit is calculated by dividing the profit or loss attributable to unitholders by the weighted average number of units outstanding during the financial period. Diluted earnings per unit is the same as there are no potential dilutive ordinary units.

l) Unit capital

(i) Ordinary units

Ordinary units are classified as equity. Issued capital is recognised at the fair value of the consideration received by the Fund. Incremental costs directly attributable to the issue of ordinary units are recognised as a deduction from equity.

(ii) Distributions to unitholders

Distributions payable are recognised in the reporting period in which the distributions are declared, determined, or publicly recommended by the board of the Responsible Entity on or before the end of the financial period, but not distributed at balance date.

m) Critical accounting estimates and judgements

In the application of the Fund’s accounting policies, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Accounting policies which are subject to significant accounting estimates and judgements include fair value determination of the interest held by the Fund in the Limited Partnership (refer note 11 (iv)),recognition of a deferred tax liability in respect of likely USA tax obligations which are expected to arise from underlying fund investment realisations (refer note 13), and selection of Australian dollars as the functional currency of the Fund (refer note 2 (a)).

3. Operating segment

The Fund operates a single reportable segment, that being the business of investing in small-to-mid-market private investments in the United States of America through its interest in a Limited Partnership.

The Responsible Entity of the Fund is the Chief Operating Decision Maker ( CODM ) for the purpose of resource allocation and assessing performance of the operating segment.

Revenue, profit or loss, assets, liabilities and other financial information reported and monitored by the CODM of the single identified segment are reflected in the financial statements and notes to financial statements of the Fund.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

4. Revenue

4. Revenue
Interest income 5. Income tax expense Income tax expense Deferred tax In respect of current year Aggregate income tax expense Numerical reconciliation of income tax expense and tax at the statutory rate Profit/(loss) before income tax expense Tax at the statutory tax rate of 30% Tax effect amounts which are not deductible/(taxable) in calculating taxable income: - Income and expenditure of Australian trust not subject to tax - Current year fair value movement likely to be subject to USA taxation at 21% Income tax expense	2018 $ 908,428	Period from 5 May 2016 to 31 March 2017 $ 322,202
	2018 $ 409,854	Period from 5 May 2016 to 31 March 2017 $ -
	409,854	-
	608,624	(2,133,640)
	182,587 (182,587) 409,854	(640,092) 640,092 -
	409,854	-

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

6. Earnings per unit

Profit/(loss) after income tax attributable to the unitholders of Cordish Dixon Private Equity Fund III Weighted average number of ordinary units used in calculating basic earnings per unit Weighted average number of ordinary units used in calculating diluted earnings per unit Basic earnings/(loss) per unit Diluted earnings/(loss) per unit	2018 $ 198,770	Period from 5 May 2016 to 31 March 2017 $ (2,133,640)
	Number 61,442,119	Number 33,422,517
	61,442,119	33,422,517
	Cents 0.32 0.32	Cents (6.38) (6.38)

There are no adjustments on the basic earnings per unit for the calculation of diluted earnings per unit and there are no transactions that would significantly change the number of ordinary units at the end of the reporting period.

7. Equity - unit capital

2018 Units Ordinary units - fully paid 72,028,420 Movements in ordinary unit capital Details Date Balance 5 May 2016 Fully paid ordinary units at $1.60 per unit 20 July 2016 Issue costs 20 July 2016 Balance 31 March 2017 Fully paid ordinary units at $1.52 per unit 8 September 2017 Issue costs 8 September 2017 Balance 31 March 2018	2018 Units 72,028,420		2017 Units 48,028,420	2018 $ 109,672,616	2017 $ 74,297,439
			Units - 48,028,420 -	$ - 76,845,472 (2,548,033) 74,297,439 36,480,000 (1,104,823) 109,672,616
			48,028,420 24,000,000 -
			72,028,420

All issued units are fully paid. The holders of ordinary units are entitled to one vote per unit at meetings of the Fund and are entitled to receive distributions declared from time to time by the Responsible Entity.

Capital management

The Fund manages its capital to ensure it will be able to continue as a going concern while maximising the return to unitholders. The capital structure of the Fund consists of issued capital amounting to $109,672,616. The Fund is not subject to any externally imposed capital requirements.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

8. Current assets - cash and cash equivalents

	2018	2017
	$	$
Cash at bank	64,049,994	60,151,508

The exposure to interest rate risk and a sensitivity analysis is disclosed in note 15 to the financial statements.

9. Reconciliation of profit/(loss) after income tax to net cash used in operating activities

Profit/(loss) after income tax expense for the year Adjustments for: Fair value movements of equity investments Foreign exchange (gain)/loss Change in operating assets and liabilities: - Decrease / (Increase) in receivables - (Increase) in prepayments - (Decrease) / Increase in payables - Increase in deferred tax liabilities Net cash used in operating activities	2018 $ 198,770 350,868 (1,304,571) 75,959 (11,646) (41,253) 409,854	Period from 5 May 2016 to 31 March 2017 $ (2,133,640) 375,422 1,532,330 (182,402) (9,015) 148,090 -
	(322,019)	(269,215)

10. Current assets - receivables

Interest receivable GST receivable	2018 $ 98,715 7,728	2017 $ 169,539 12,863
	106,443	182,402

There are no balances included in receivables that contain assets that are impaired. All receivables are non interest bearing and are generally receivable on 30 day terms. No receivable amounts are overdue. The receivables are recorded at carrying amounts that are reasonable approximations of fair value.

11. Non-current assets - other financial assets

(i) Equity investment constituting interest in Limited Partnership ( LP ) - at fair value:

US Select Private Opportunities Fund III, LP (LP)	2018 $ 44,077,339	2017 $ 11,968,964

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

11. Non-current assets - other financial assets (continued)

(ii) Reconciliation Balance at the beginning of the year Capital invested - at cost Movement in fair value through profit or loss* Balance at the end of the year	2018 $ 11,968,964 32,459,243 (350,868)	2017 $ - 12,344,386 (375,422)
	44,077,339	11,968,964

- Included in the ‘movement in fair value’ amount of $350,868 is an unrealised foreign exchange translation gain component of $168,842 (2017: $14,935). This amount is also net of the Fund’s 71.2% share of management fees paid by the LP to the General Partner of the LP, totalling $1,279,218 (2017: $443,080) (refer to note 18).

In accordance with the Limited Partnership Agreement, the Fund incurred an additional capital contribution fee of $415,497 (US$330,819) which was paid to the LP and recognised as an expense in the statement of profit or loss and other comprehensive income.

(iii) Fund’s interest in assets and liabilities of LP

The 71.2% economic interest held by the Fund in the LP is not represented by voting rights or other power vested in the Fund to make decisions relating to the assets and liabilities of the LP. As is common practice with Limited Partnership arrangements, the General Partner of the LP is considered to be the party who holds the existing rights to direct the relevant activities of the LP, including the acquisition and disposal of investments.

The Fund’s 71.2% interest in US Select Private Opportunities Fund III, L.P. at 31 March 2018 is represented by its proportionate interest in the LP’s assets and liabilities as follows:

Cash Investment in US private investment funds recorded at fair value: DFW Capital Partners V, LP Elephant Partners I, LP Encore Consumer Capital Fund III, LP PeakSpan Capital Growth Partners I, LP Trive Capital Fund II, LP Gemspring Capital Fund I, LP Growth Street Partners I, LP Incline Equity Partners IV, LP Luminate Capital Partners LP Bertram Growth Capital III, LP NMS Fund III, LP Telescope Partners I, LP US Select Direct Private Equity II LP Due to US Select Direct Private Equity II LP Prepaid expenses Due to Gemspring Capital Fund I, LP Net assets*	2018 $ 9,267,470 2,244,774 4,091,569 1,523,428 2,293,550 5,100,509 580,197 1,111,207 535,940 4,971,196 2,561,228 835,096 426,755 11,316,790 (2,782,370) - -	2017 $ 2,242,735 1,755,956 2,378,888 955,420 976,688 3,724,352 233,210 - - - - - - - - 2,807 (301,092)
	44,077,339	11,968,964

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

11. Non-current assets - other financial assets (continued)

*Net assets of $44,077,339 (2017: $11,968,964) are comprised of cash balances totalling $9,267,470 (2017: $2,242,735), investments in US private investment funds of $34,809,869 (2017: $10,024,514) and prepaid expenses of nil (2017: $2,807).

(iv) Valuation

Valuation technique adopted

The fair value of the Fund’s interest in the LP is determined using a ‘proportionate’ value method based on the Fund’s 71.2% interest held in the total net asset value of the LP.

The LP holds investments predominately in US private investment funds, and it (the LP) adopts a similar fair value measurement basis, based on the proportionate interest it holds in the most recent reported total net asset values of the respective investment funds. There is up to a three month difference between the Fund’s reporting date and the date of the most recent reported net assets of the investment funds. The investment funds themselves invest typically in US unlisted equity investments, the fair values of which are determined periodically based on market valuation techniques, which may involve methods and unobservable inputs such as price/earnings analysis or discounted cash flow techniques.

The fair value of the Fund’s interest in the LP is therefore ultimately based on the market valuation techniques adopted by the investment funds in the measurement of their underlying unlisted equity investments. The fair value is also subject to foreign exchange translation impacts arising from translating the USD denominated interest in the LP to AUD at each balance date. Refer to note 15(a) for Market Risk sensitivity analysis.

Investment risks

As noted above, the LP has invested in underlying private investment funds in the US market who have in turn invested in a portfolio of private equity investments. Because of the absence of any liquid trading market for these types of investments, it may take longer to liquidate these investments than would be the case for marketable securities and accordingly the value obtained on realisation may differ materially to the estimated fair values at balance date. The fair values assigned by the investment funds are based on a range of factors, including but not limited to the price at which the investments were acquired, the nature of the investments, private and public company comparables used to determine enterprise value, and other techniques using unobservable market inputs such as price/earnings multiples and discounted cash flow models. As such, those estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material. These differences would directly impact the value of the interest held by the LP in the underlying investment funds and consequently the value of the interest held by the Fund in the LP. In addition, further investment valuation uncertainty arises as a result of a time lag of up to three months between the Fund’s reporting date and the date of the most recent reported net assets of the private investment funds. Estimation uncertainty also arises in relation to likely US tax obligations the Fund will incur in connection with realisation of recorded fair value movements (refer to note 13).

(v) Capital commitments

As at 31 March 2018, the Fund has made capital commitments totalling US$81.2 million to the LP, of which US$34.5 million has been called at balance date.

As at 31 March 2018, the Fund has uncalled capital commitments of US$46.7 million (or $60.8 million) outstanding to the LP. The capital commitments can be called at any time in the future.

The uncalled capital commitments referred to above were converted at the year-end exchange rate of 0.7679.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

12. Current liabilities - trade and other payables

Trade creditors Accrued liabilities	2018 $ 32,587 74,250	2017 $ 41,978 106,112
	106,837	148,090

Refer to note 15 for further information on financial instruments.

The average credit period for trade creditors is generally 30 days. No interest is charged on trade creditors from the date of the invoice. The Fund has risk management policies in place to ensure invoices are paid within credit terms.

13. Non-current liabilities - deferred tax

	2018	2017
	$	$
Deferred tax liability	409,854		-

The deferred tax liability has been assessed based on an estimate of likely US tax obligations the Fund will incur upon realisation of recorded fair value movements in connection with certain underlying private equity investments. This estimate is subject to estimation uncertainty as a result of limitations in the availability of information pertaining to the tax structure of the underlying investments in respect of which the Fund has an interest.

14. Equity - distributions

There were no distributions paid, recommended or declared during the current or previous financial year.

15. Financial instruments

Financial risk management objectives

The Fund is exposed to the following risks from its use of financial instruments:

market risk (foreign exchange risk, market price risk and interest rate risk)
credit risk
liquidity risk.

The Responsible Entity has overall responsibility for the establishment and oversight of the risk management framework, including developing and monitoring risk management policies.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices, such as foreign exchange rates, interest rates and equity prices. The Fund is primarily exposed to market risks arising from fluctuations in market price risk, foreign currency and interest rates. Refer to note 11(iv) for further details of risks relating to equity prices.

Foreign exchange risk

Foreign exchange risk arises on financial instruments that are denominated in a foreign currency. Foreign exchange rate movements will impact on the Australian dollar value of the Fund’s financial assets and liabilities denominated in a currency that is not the Fund’s functional currency.

The Fund is exposed to USD foreign exchange risk through its USD denominated cash balances, its investment activities and income derived from these activities.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

15. Financial instruments (continued)

The table below details the carrying amounts of the Fund’s foreign exchange risk as at the end of the reporting period. This represents the Australian dollar exposure, converted at an exchange rate of 0.7679.

Cash and cash equivalents Receivables Financial assets (equity investments)	Assets 2018 2017 $ $ 61,864,729 57,231,280 95,467 161,519 44,077,339 11,968,964	Assets 2018 2017 $ $ 61,864,729 57,231,280 95,467 161,519 44,077,339 11,968,964	Liabilities 2018 2017 $ $ - - - - - -	Liabilities 2018 2017 $ $ - - - - - -
	106,037,535	69,361,763	-	-

Sensitivity analysis

The effect of the foreign exchange risk relating to equity investments (investment in Limited Partnership) is recorded in profit or loss as part of the overall fair value movement in the investment (refer to note 11(ii)). The effect of foreign exchange risk relating to cash and cash equivalents is recorded in profit or loss as a foreign exchange gain or loss.

The Fund considers a 10% movement in the AUD against USD as at 31 March 2018 to be a reasonable possibility at the end of the reporting period. The impact of the strengthening and weakening of AUD against USD in profit or loss and equity is shown by the amounts below as it relates to cash and cash equivalents and equity investments. This analysis assumes that all other variables remain constant.

AUD strengthened AUD weakened 2018 % change Effect on profit before tax Effect on equity % change Effect on profit before tax Effect on equity Cash and cash equivalents 10% (5,624,066) (5,624,066) (10%) 6,873,859 6,873,859 Receivables 10% (8,679) (8,679) (10%) 10,607 10,607 Equity investments 10% (4,007,031) (4,007,031) (10%) 4,897,482 4,897,482 (9,639,776) (9,639,776) 11,781,948 11,781,948 AUD strengthened AUD weakened 2017 % change Effect on profit before tax Effect on equity % change Effect on profit before tax Effect on equity Cash and cash equivalents 10% (5,202,844) (5,202,844) (10%) 6,359,031 6,359,031 Receivables 10% (14,684) (14,684) (10%) 17,947 17,947 Equity investments 10% (1,088,088) (1,088,088) (10%) 1,329,885 1,329,885 (6,305,616) (6,305,616) 7,706,863 7,706,863	AUD strengthened AUD weakened 2018 % change Effect on profit before tax Effect on equity % change Effect on profit before tax Effect on equity Cash and cash equivalents 10% (5,624,066) (5,624,066) (10%) 6,873,859 6,873,859 Receivables 10% (8,679) (8,679) (10%) 10,607 10,607 Equity investments 10% (4,007,031) (4,007,031) (10%) 4,897,482 4,897,482 (9,639,776) (9,639,776) 11,781,948 11,781,948 AUD strengthened AUD weakened 2017 % change Effect on profit before tax Effect on equity % change Effect on profit before tax Effect on equity Cash and cash equivalents 10% (5,202,844) (5,202,844) (10%) 6,359,031 6,359,031 Receivables 10% (14,684) (14,684) (10%) 17,947 17,947 Equity investments 10% (1,088,088) (1,088,088) (10%) 1,329,885 1,329,885 (6,305,616) (6,305,616) 7,706,863 7,706,863	AUD strengthened AUD weakened 2018 % change Effect on profit before tax Effect on equity % change Effect on profit before tax Effect on equity Cash and cash equivalents 10% (5,624,066) (5,624,066) (10%) 6,873,859 6,873,859 Receivables 10% (8,679) (8,679) (10%) 10,607 10,607 Equity investments 10% (4,007,031) (4,007,031) (10%) 4,897,482 4,897,482 (9,639,776) (9,639,776) 11,781,948 11,781,948 AUD strengthened AUD weakened 2017 % change Effect on profit before tax Effect on equity % change Effect on profit before tax Effect on equity Cash and cash equivalents 10% (5,202,844) (5,202,844) (10%) 6,359,031 6,359,031 Receivables 10% (14,684) (14,684) (10%) 17,947 17,947 Equity investments 10% (1,088,088) (1,088,088) (10%) 1,329,885 1,329,885 (6,305,616) (6,305,616) 7,706,863 7,706,863
	7,706,863	7,706,863

Market price risk

Market price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether caused by factors specific to individual investments or factors affecting all instruments traded in the market.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

15. Financial instruments (continued)

Sensitivity analysis

The Fund considers a 10% increase or decrease to be a reasonably possible change in market prices at the reporting date. The sensitivity analysis below reflects the Fund’s proportionate exposure to market price risk of the underlying equity investments of the private investment partnership excluding any foreign exchange impact. The impact of a 10% movement in market prices (excluding foreign exchange impact) on profit or loss and equity is shown in the table below:

	Average price increase	Average price increase	Average price increase	Average price decrease	Average price decrease	Average price decrease
		Effect on			Effect on
		profit before	Effect on		profit before	Effect on
2018	% change	tax	equity	% change	tax	equity
Equity investments (refer Note
11 (iii))	10%	3,480,987	3,480,987	(10%)	(3,480,987)	(3,480,987)
	Average price increase			Average price decrease
		Effect on			Effect on
		profit before	Effect on		profit before	Effect on
2017	% change	tax	equity	% change	tax	equity
Equity investments (refer Note
11 (iii))	10%	1,002,451	1,002,451	(10%)	(1,002,451)	(1,002,451)

Interest rate risk

The Fund is exposed to interest rate risk on its variable rate bank deposits. The Fund currently does not hedge against this exposure.

Sensitivity analysis

The Fund considers a 50 basis point increase or decrease to be a reasonably possible change in interest rates. The impact of a 50 basis point movement in interest rates on profit or loss and equity is shown in the table below.

	Basis points increase	Basis points increase	Basis points increase	Basis points decrease	Basis points decrease	Basis points decrease
		Effect on			Effect on
	Basis points	profit before	Effect on	Basis points	profit before	Effect on
2018	change	tax	equity	change	tax	equity
Variable rate bank deposits	50	320,250	320,250	(50)	(320,250)	(320,250)
	Basis points increase			Basis points decrease
		Effect on			Effect on
	Basis points	profit before	Effect on	Basis points	profit before	Effect on
2017	change	tax	equity	change	tax	equity
Variable rate bank deposits	50	300,758	300,758	(50)	(300,758)	(300,758)

(b) Credit risk

Credit risk is the risk that contracting parties to a financial instrument will cause a financial loss for the Fund by failing to discharge an obligation. The Fund manages credit risk by ensuring deposits are made with reputable financial institutions. The majority of funds at year end were deposited with Macquarie Bank Limited (Australia).

The carrying amount of financial assets that represents the maximum credit risk exposure at the end of reporting period are detailed below:

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

15. Financial instruments (continued)

Summary of exposure Cash and cash equivalents GST receivable Interest receivable	2018 $ 64,049,994 7,728 98,715	2017 $ 60,151,508 12,863 169,539
	64,156,437	60,333,910

(c) Liquidity risk

Liquidity risk is the risk that the Fund will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Fund’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Fund’s reputation.

The Fund’s liquidity primarily comprises cash at bank totalling $64,049,994 at 31 March 2018 which is held to cover its day-to-day running costs and expenditures and to fund its capital commitments to the LP which total $60,758,070 at balance date.

The following is the contractual maturity of financial liabilities and capital commitments. The table has been drawn based on the undiscounted cash flows of liabilities based on the earliest date on which the Fund can be required to settle the liability.

2018 Non-derivatives Non-interest bearing Trade and other payables Capital commitments* Total non-derivatives	Less than 12 months $ 106,837 -	At call $ - 60,758,070	Remaining contractual maturities $ 106,837 60,758,070
	106,837	60,758,070	60,864,907

LP commitments may be called at any time in the future up until the first to occur of the date the aggregate commitments have been invested, the fifth anniversary date after the first call or certain other specified termination events.

2017 Non-derivatives Non-interest bearing Trade and other payables Capital commitments* Total non-derivatives	Less than 12 months $ 148,090 -	At call $ - 57,112,432	Remaining contractual maturities $ 148,090 57,112,432
	148,090	57,112,432	57,260,522

16. Fair value measurement

Fair value

The fair value of financial assets and financial liabilities approximate their carrying values at the reporting date.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

16. Fair value measurement (continued)

The table below analyses recurring fair value measurements for financial assets and financial liabilities. The fair value measurements are categorised into different levels in the fair value hierarchy based on the inputs to the valuation techniques used. The different levels are defined as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices)
Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Level 1 $ -	Level 2 $ -	Level 3 $ 44,077,339	Total $ 44,077,339
-	-	44,077,339	44,077,339
Level 1 $ -	Level 2 $ -	Level 3 $ 11,968,964	Total $ 11,968,964
-	-	11,968,964	11,968,964

The Fund recognises transfers between levels of the fair value hierarchy as at the end of the reporting period during which the transfer has occurred. There were no transfers between levels during the financial year.

Details of the determination of Level 3 fair value measurements including the valuation technique adopted and the key underlying unobservable inputs used are set out in note 11.

The Fund has established a control framework with respect to measurement and assessment of fair values. This framework includes a sub-investment committee that has overall responsibility for analysing the performance and fair value movements of underlying US investment fund holdings during each reporting period.

17. Key management personnel disclosures

Directors

Alex MacLachlan, Tristan O’Connell and Warwick Keneally were directors of the Responsible Entity, Walsh & Company Investments Limited, at the reporting date and are deemed to be key management personnel.

The key management personnel do not receive compensation from the Fund or from the Responsible Entity directly for their management function performed for the Fund.

As at reporting date, details of directors who hold units for their own benefit or who have an interest in holdings through a third party and the total number of such units held are listed as follows:

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

17. Key management personnel disclosures (continued)

17. Key management personnel disclosures (continued)
Alex MacLachlan Tristan O'Connell Warwick Keneally	2018 21,875 21,875 12,967	Period from 5 May 2016 to 31 March 2017 21,875 21,875 3,125
	56,717	46,875

18. Related party disclosures

Key management personnel

Disclosures relating to key management personnel are set out in note 17.

Related party investments in the scheme

The Responsible Entity or its associates does not hold any investments in the scheme.

Management fees

The Responsible Entity’s duties include establishing the Fund’s compliance plan and procedures and monitoring against regulatory and legislative requirements, the issuance of disclosure documents, the appointment and monitoring of external service providers to the Fund and overall administration of the Fund.

For these services, the Responsible Entity charged management fees of 0.33% per annum (exclusive of GST) on the gross asset value of the Fund. This is comprised of the Responsible Entity Fee of 0.08% per annum and Administration Fee 0.25% per annum. Management fees are paid to the Responsible Entity quarterly in advance.

The total management fees paid to the Responsible Entity for the year ended 31 March 2018 was $293,861 (2017: $173,839), exclusive of GST. There were no outstanding management fees as at 31 March 2018.

Fund administration fees

Australian Fund Accounting Services Pty Limited, a wholly-owned subsidiary of Evans Dixon Limited, the parent of the Responsible Entity, provides fund administration services to the Fund under an agreement with the Responsible Entity. These services include net asset valuation, management accounting, statutory reporting, capital management and taxation. Total fund administration fees paid or payable for the year ended 31 March 2018 were $120,000 (2017: $90,000), exclusive of GST.

Investment manager fees

US Select Private Opportunities Fund III, L.P. ( LP ), in which the Fund holds an 71.2% interest, is required to pay its Investment Manager, US Select Private Opportunities Fund III, GP, being an entity associated with the Responsible Entity, for acting on behalf of the limited partnership to acquire, manage and transact on partnership interests within the scope of the limited partnership agreement, a fee equivalent to 1% per annum of the total funds committed by the partners to the LP. The fee is payable quarterly in advance from the funds of the LP. The total fees paid or payable during the year amounted to $1,796,655 (US$ 1,390,224) (2017: $610,892 (US$ 459,719)). The Fund’s interest equates to $1,279,218 (2017: $443,080). This fee is recorded in the books of the LP.

US Select Direct Private Equity II, LP

At balance date, the Fund’s share of the LP’s investment in US Select Direct Private Equity II, LP was $8,534,420 (US$6,553,581). The General Partner of this investment is associated with the Responsible Entity of the Fund.

Cordish Dixon Private Equity Fund III Notes to the financial statements 31 March 2018

18. Related party disclosures (continued)

Issue costs

The Responsible Entity is entitled to receive a structuring and arranging fee of 1.5% (exclusive of GST) and a handling fee of 1.5% (exclusive of GST) (collectively referred to as issue costs) on the gross proceeds raised under the Product Disclosure Statement (PDS) dated 11 August 2017. Total issue costs paid to the Responsible Entity for the year ended 31 March 2018 was $1,113,688 (2017: $2,266,454), exclusive of GST.

19. Remuneration of auditors

During the financial year the following fees were paid or payable for services provided by Deloitte Touche Tohmatsu, the auditor of the Fund, and its network firms:

Audit services - Deloitte Touche Tohmatsu Audit or review of the financial statements Other services - Deloitte Touche Tohmatsu Taxation services Investigating Accountant's Report	2018 $ 59,000	Period from 5 May 2016 to 31 March 2017 $ 57,200
	35,217 18,000	55,800 35,000
	53,217	90,800
	112,217	148,000

20. Capital commitments

Other than the capital commitments disclosed in note 11(v) to the financial statements, the Fund does not have any other capital commitments outstanding for the year ended 31 March 2018.

21. Contingent liabilities

The directors of the Responsible Entity are not aware of any potential liabilities or claims against the Fund as at balance date.

22. Events after the reporting period

Cordish Dixon Private Equity Fund III Directors' declaration 31 March 2018

The directors of the Responsible Entity declare that:

In the directors’ opinion, there are reasonable grounds to believe that the Fund will be able to pay its debts as and when they become due and payable;
In the directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as stated in the notes to the financial statements;
In the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001 , including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Fund; and
The directors have been given the declarations required by section 295A of the Corporations Act 2001

Signed in accordance with a resolution of directors made pursuant to section 295(5) of the Corporations Act 2001 .

On behalf of the Directors of the Responsible Entity,

_________ Alex MacLachlan Director

31 May 2018

Deloitte Touche Tohmatsu ABN 74 490 121 060 Grosvenor Place 225 George Street Sydney, NSW, 2000 Australia

Phone: +61 2 9322 7000 www.deloitte.com.au

Independent Auditor’s Report to the Unitholders of Cordish Dixon Private Equity Fund III (formerly US Select Private Opportunities Fund III)

Opinion

We have audited the financial report of Cordish Dixon Private Equity Fund III (formerly US Select Private Opportunities Fund III, the “Fund”) which comprises the statement of financial position as at 31 March 2018, the statement of profit or loss and other comprehensive income , the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

In our opinion, the accompanying financial report of the Fund is in accordance with the Corporations Act 2001 , including:

(i) giving a true and fair view of the Fund’s financial position as at 31 March 2018 and of its financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Fund in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Walsh & Co Investments Limited (the “Responsible Entity”), would be in the same terms if given to the directors as at the time of this auditor’s report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

Key Audit Matter How the scope of our audit responded to the Key Audit Matter
Fair Value of Investment in Limited Partnership Our procedures included, but were not limited to: (LP)  Obtaining an understanding with the assistance
As at 31 March 2018 the Fund has determined of our valuation specialists, the key processes the fair value of its investment in the LP to be adopted by management to determine the fair $44,077,339 as disclosed in Note 11(iv). value of the investment in the Limited Partnership (LP) at balance date;
Significant estimation uncertainty is involved in the determination of the fair value of the  Obtaining the most recent audited financial investment in the LP due to the fact that: statements of the underlying investment funds (as at 31 December 2017), and reviewing the
the underlying investments held by the US nature of the underlying investments held, and investment funds in which the LP has an the recorded fair values of the investments interest are generally illiquid in nature, and including the accounting basis adopted for such their valuation is based on unobservable valuations; inputs which are subject to significant estimation judgement by management of the  Assessing the independence, competence and US investment funds; objectivity of the auditing firms of the underlying investment funds and reviewing the
there may be a time lag of up to three months content of their audit opinions; and between the Fund’s reporting date and the date of the most recent reported net assets of  Obtaining from management the most recent the US investment funds. unaudited management financial information of the underlying investment funds (where available as at 31 March 2018) and evaluating the quantum and reasonableness of any material fair value movements from the date of the latest audit financial information for the investment funds.
We also assessed the appropriateness of the disclosures in Notes 2(c) and (m) and Note 11 to the financial statements.
Taxation Our procedures included, but were not limited to: As at 31 March 2018 the Fund has recognised a  Obtaining an understanding and reviewing the deferred tax liability of $409,854 in respect of reasonableness of management’s assessment likely US tax obligations which the Fund will of likely US tax obligations in relation to incur upon realisation of recorded fair value recorded fair value movements of certain movements associated with certain underlying identified investments held by the underlying investments in which the Fund has an indirect investment funds; interest.  Testing, on a sample basis, the underlying
As disclosed in Note 13, the taxation outcomes taxation calculations for identified investments; for the Fund are dependent on the legal and structuring of underlying investments and, due to the complexity involved in the interpretation  Engaging taxation experts to assist in the of information pertaining to this structuring, assessment of management’s correct significant judgement is required to be application of the relevant US taxation exercised by management in assessing the legislation. likely tax outcomes which are recognised. We also assessed the appropriateness of the disclosures in Notes 2(m) and Note 13 to the financial statements.

Other Information

The directors of the Responsible Entity (the “Directors”) are responsible for the other information. The other information comprises the information included in the Fund’s annual report for the year ended 31 March 2018, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Responsible Entity of the Fund are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Fund to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Fund or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial

report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Fund to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

DELOITTE TOUCHE TOHMATSU

Weng W Ching Partner Chartered Accountants Sydney, 31 May 2018

Cordish Dixon Private Equity Fund III Unitholder information

30 April 2018

Distribution of unitholders

72,028,420 fully paid ordinary units on issue are held by 2,331 unitholders.

Category (size of holding) 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over Holding less than a marketable parcel	Number of unitholders 140 357 1,773 61
	2,331
	-

Top 20 largest holders of units

Twenty largest quoted equity security holders

The names of the twenty largest security holders of quoted equity securities are listed below:

Mr Orange Pty Limited HSBC Custody Nominees (Australia) Limited Rosebank Staff S/Fund A/C Bluebombers S/F A/C Leanganook S/F A/C Margate Investment A/C Vonwiller Family A/C Triangle 2 S/F A/C Gruen Superannuation Fnd A/C The Freund Pucci S/Fund A/C AM and YC Thomson S/F A/C C M Brown Family A/C James Family Retirement A/C Clarke & Santsingh S/F A/C Hawes Family Super Fund A/C Rosenshul S/F A/C J & L Chandler S/F A/C Flinders Family A/C Betty Marks Family A/C Doyle Super Fund A/C	Number of units held 1,562,500 431,400 348,245 312,500 312,500 300,000 249,390 239,500 226,500 189,250 187,500 187,500 187,500 167,750 164,000 164,000 158,000 156,250 156,250 156,250	Percentage of Total (%) 2.17 0.60 0.48 0.43 0.43 0.42 0.35 0.33 0.31 0.26 0.26 0.26 0.26 0.23 0.23 0.23 0.22 0.22 0.22 0.22
	5,856,785	8.13

Substantial unitholders

There are no substantial unitholders pursuant to the provisions of section 671B of the Corporations Act 2001 .

Voting rights

Each ordinary unit is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.

Restricted securities

There are no restricted securities issued by the Fund.

Cordish Dixon Private Equity Fund III Unitholder information 30 April 2018

Transactions

There were no transactions in securities during the reporting period.

Limited Partnership Agreement

U.S. Select Private Opportunities Fund III GP, LLC ( Investment Manager ), Cordish Private Ventures and Walsh & Company Investments Limited, in its capacity as Responsible Entity of the Cordish Dixon Private Equity Fund III ( Fund ), have established an exempted limited partnership, US Select Private Opportunities Fund III, L.P. ( LP ), in the Cayman Islands for the purposes of acquiring, directly or indirectly, and dealing with, interests in private investment funds and interests in privately held companies.

Under the terms of the agreement, the Fund, as a Limited Partner, has agreed to make capital contributions towards the acquisition of investments, as directed by the Investment Manager, up to a maximum contribution amount. The limited partners are permitted to satisfy all, or any, of their outstanding capital commitment by making an in-kind contribution of a portfolio investment with the written consent of the other partners.

Under the LP Agreement, it is an event of default to fail to make a capital contribution when due and different consequences may result from an event of default, including (among others) interest being payable on overdue amounts, loss of voting rights or, at the discretion of the Investment Manager, forfeiture of distributions and a 50% reduction in the defaulting partner’s capital account (with such amounts to be distributed to the remaining partners in their pro rata proportions).

The Investment Manager must ensure that distributions, if any, are made on an annual basis (or more frequently, if so determined by the Investment Manager) in connection with a disposal, interest or other income realised from an investment or income from temporary investments.

In consideration for managing the LP and its investments, the Investment Manager is entitled to an investment management fee of an amount equal to 1% of the aggregate capital commitments made by the partners to the LP which will be payable quarterly in advance for a period of 10 years.

Cordish Private Ventures and the Fund are prohibited from withdrawing from the LP or otherwise disposing of their interest in the LP in any circumstances without the consent of the Investment Manager. The Investment Manager in turn must obtain the consent of the other limited partner prior to effecting such disposal or transfer. The Investment Manager may not withdraw from the LP, resign as general partner or otherwise dispose of its interest in the LP in any circumstances without the consent of the limited partners.

The LP will be dissolved upon the occurrence of certain termination events, which include (among others), the last business day of the fiscal year in which all investments have been disposed of or where the LP is no longer subject to any funding obligations in respect of investments or management fees. The Investment Manager may terminate or wind up the LP with the consent of all limited partners. As a limited partner, the Responsible Entity does not have the ability to amend the LP Agreement in a material respect, or require early termination or wind up of the LP without the consent of all other partners.

Cordish Dixon Private Equity Fund III Directory 31 March 2018

The Fund’s units are quoted on the official list of Australian Securities Exchange ( ASX ). The ASX code is CD3

Cordish Dixon Private Equity Fund III

(ARSN 612 132 813) Registered & Principal Office Level 15, 100 Pacific Highway NORTH SYDNEY NSW 2060 T 1300 883 158 F 1300 883 159 E [email protected] cordishdixonfunds.com.au

Auditor

Deloitte Touche Tohmatsu Grosvenor Place 225 George Street SYDNEY NSW 2000 T +61 2 9322 7000 F +61 2 9322 7001 deloitte.com.au

Responsible Entity

Walsh & Company Investments Limited (ACN 152 367 649) (AFSL 410 443) Level 15, 100 Pacific Highway NORTH SYDNEY NSW 2060 T 1300 454 801 F 1300 883 159 E [email protected] walshandco.com.au

Unit Register

Boardroom Pty Limited Level 12, 225 George Street SYDNEY NSW 2000 T 1300 737 760 (Australia) T +61 2 9290 9600 (International) F 1300 653 459 boardroomlimited.com.au

Directors

Alex MacLachlan Tristan O’Connell Warwick Keneally

Secretaries

Simon Barnett Hannah Chan

AI assistant

CD PRIVATE EQUITY FUND III — Annual Report 2018

64628_rns_2018-05-30_f007fb7f-ae78-439d-8621-e340edafe0eb.pdf

Appendix 4E

Annual Financial Report For the year ended 31 March 2018

Name of entity Cordish Dixon Private Equity Fund III (formerly US Select Private Opportunities Fund III)

Distributions

Cordish Dixon Private Equity Fund III ARSN 612 132 813

Cordish Dixon Private Equity Fund III Manager's report 31 March 2018

Bertram Growth Capital III, L.P. (US$10.0 million commitment by the LP)

DFW Capital Partners V, L.P. (US$7.5 million commitment by the LP)

Elephant Partners I, L.P. (US$5.0 million commitment by the LP)

Encore Consumer Capital Fund III, L.P. (US$7.5 million commitment by the LP)

Gemspring Capital Fund I, L.P. (US$10.0 million commitment by the LP)

Growth Street Partners I, L.P. (US$5.0 million commitment by the LP)

Incline Equity Partners IV, L.P. (US$7.5 million commitment by the LP)

Luminate Capital Partners, L.P. (US$7.5 million commitment by the LP)

NMS Fund III, L.P. (US$7.5 million commitment by the LP)

Peakspan Capital Fund I, L.P. (US$5.0 million commitment by the LP)

Telescope Partners I, L.P. (US$5.0 million commitment by the LP)

Trive Capital Fund II, L.P. (US$10.0 million commitment by the LP)

Cordish Dixon Private Equity Fund III Manager's report 31 March 2018

US Select Direct Private Equity II, L.P. (US$27.5 million commitment by the LP)

Overview

1. Lay solid foundations for management and oversight

Board roles and responsibilities

2. Structure the board to add value

Composition of the Board

Tristan O’Connell

Warwick Keneally

3. Promote ethical and responsible decision making

Code of conduct

Unit trading policy

Insider trading policy

4. Safeguard integrity in financial reporting

Compliance Committee

Tristan O’Connell (Internal Member)

- Michael Britton (Independent Member)

-

Barry Sechos (Independent Member)

5. Make timely and balanced disclosure

Cordish Dixon Private Equity Fund III Corporate governance statement 31 March 2018

6. Respect the rights of unitholders

7. Recognise and manage risk

Cordish Dixon Private Equity Fund III Corporate governance statement 31 March 2018

8. Remunerate fairly and responsibly

Directors

Alex MacLachlan

Tristan O'Connell

Tom Kline

Warwick Keneally

Principal activities and significant changes in nature of activities

Distributions

Review and results of operations

Events subsequent to the reporting period

Future developments and expected results of operations

Environmental regulation

Other relevant information

Options

Indemnity and insurance

Non-audit services

Auditor's independence declaration

Cordish Dixon Private Equity Fund III

1. General information

(i) Basis of preparation

(ii) Statement of compliance

(iii) Adoption of new and revised Accounting Standards

1. General information (continued)

AASB 9 Financial Instruments, and the relevant amending standards

Annual Improvements to IFRS Standards 2015–2017 Cycle

2. Summary of significant accounting policies

a) Foreign currencies

2. Summary of significant accounting policies (continued)

b) Financial instruments

(i) Financial assets

(ii) Financial liabilities

(iii) Derecognition

2. Summary of significant accounting policies (continued)

(iv) Fair value

c) Interest in Limited Partnership

CD PRIVATE EQUITY FUND III Annual Report 2018