RIVCO AUSTRALIA LTD — Interim / Quarterly Report 2021

Feb 14, 2021

==> picture [127 x 19] intentionally omitted <==

----- Start of picture text -----

ASX CODE (Shares) D20
Shares on Issue (January) 119,597,578
----- End of picture text -----

The primary investment objective of Duxton Water (“the Company”) is to build a portfolio of permanent water entitlements and utilise this portfolio to provide flexible water supply solutions to our Australian farming partners. The Company generates a return by offering Irrigators a range of supply solutions including long-term entitlement leases, forward allocation contracts and spot allocation supply.

==> picture [537 x 562] intentionally omitted <==

----- Start of picture text -----

NET ASSET VALUE PER SHARE Entitlement Portfolio
Value by Region
Duxton Water’s NAV at 31 January 2021 was $1.60 per share.
The after-tax NAV figure takes into account the provision for deferred tax on set-up costs and 14%
estimates of net tax provisions that may arise should the entire portfolio be disposed of on the above
date. The Company does not expect to trigger these tax provisions through the turnover of these 14%
assets and expects to maintain its low entitlement turnover ratio. The NAV excluding tax provisions
for unrealised capital gain is $1.77 per share. The Company’s NAV is primarily the fair value of its 4%
water asset portfolio at the stated date. The Company uses an independent Fair Market Unit Value for
entitlement and allocations provided by Aither Pty Ltd (‘Aither”) to undertake the NAV assessment. 68%
NET ASSET VALUE PER SHARE – SINCE INCEPTION
Murray Goulburn
Murrumbidgee Lachlan
1.800 Mallee
1.750
1.700 March
1.650 Dividend 2.6 cents Water Portfolio
1.600 @100% Franked Diversification
1.550 August March
1.500 Dividend 2.5 cents Dividend 2.8 cents
1.450 @ 75% Franked September @100% Franked October
1.400 Dividend 2.4 cents April Dividend 2.7 cents @100% Franked Dividend 2.9 cents @100% Franked
1.350 @ 60% Franked 10.1 millionApril
1.300 Dividend 2.3 cents November October Placement 36%
1.250 @ 75% Franked 7.5 million
1.200 Insto Offer May
1.0501.1001.150 1.7 million March Options Exercised May & June 16.4 million 10.8 millionNovember 2.45 million shares SPP 64%
1.000 Options Exercised Retail Offer
Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Dec-20
Unleased Leased
PERFORMANCE Water Security
Breakdown
1 Month 3 Months 6 Months 12 Months Inception
-1.02% 1.47% 1.44% -5.42% 73.28% 2%
These figures are based on NAV movements and include franked dividends for the period. 20%
INVESTMENT UPDATE
78%
As of 31 January 2021, Duxton Water is invested in approximately $316 million of water assets with the
remainder of the portfolio held in cash and net current assets. The Company continues to mature and
rebalance the portfolio as opportunities become present. Currently, 20.5ML ($0.1 m) of water
entitlements are in the acquisition pipeline at 31 January 2021. HS GS Bore
----- End of picture text -----

==> picture [127 x 143] intentionally omitted <==

----- Start of picture text -----

14%
14%
4%
<1%
68%
Murray Goulburn
Murrumbidgee Lachlan
Mallee
----- End of picture text -----

DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500

ASX CODE (Shares) D20 Shares on Issue (January) 119,597,578

Since May 2020, entitlement prices fluctuations have been relatively stable. This follows a 6% retracement in values from their peak in January 2020. For context since January 2014, water entitlement values have increased over 250%, reflective of the long-term structural drivers, rather than the shortterm climatic conditions. Irrigators have over the last 10 years significantly enhanced their marginal return per megalitre through both more efficient use of water and conversion to higher value commodities. At the same time, we have seen significate steps taken to return water to the environment with Government purchases of between 20-22% of entitlements that were previously available to the consumptive pool. The combined impact has seen stronger demand for a reducing available water supply and subsequent increased asset prices. Irrigators themselves have been the greatest beneficiaries from this capital appreciation as they collectively own the majority of water entitlement on issue in the market.

January rainfall across the MDB was 3% above the long-term average. The MDB Authority active storage levels are higher than they were 12 months ago, however they are still approximately 22.4% below long-term levels. Storages continue to be drawn down as summer irrigation requirements continue, however welcomed rainfall over the month has eased the demand for upstream water releases up from Hume dam. The MurrayGoulburn system is currently 54% of storage capacity levels; 22.0% higher than 12 months ago. Northern basin storage levels are currently 27%, 20% higher than 12 months ago.

Duxton Water continues to support its Irrigator partners through the peak water irrigation period for the 20/21 water year. This involves the provision of leases to over 70 family farming and corporate businesses. Through June 2020, many Irrigators took advantage of seasonally low allocation pricing and acquired allocation to carry over into the new water year. The Company has further supported Irrigator water risk management through the provision of forward allocation contracts for the 20/21 water year. This provides Irrigators with visibility to water supply and assists Duxton Water in hedging its allocation risk on its unleashed permanent water assets.

The Company actively manages its allocation holding in order to deliver on demand for spot allocation sales, meet its obligation for the provision of forward allocation sales and deliver on new entitlement lease arrangements. In offering these products, the company supports market liquidity and risk management options for our Irrigator partners.

ENTITLEMENT MARKET

Duxton Water is engaged in building a targeted portfolio of water entitlements predominantly across the southern MDB. The Company has invested in both surface and ground water assets. At 31 January 2021, the Company holds approximately 81.2 GL of water entitlements across 19 different asset types and classes.

Entitlement pricing across the southern Murray Darling Basin has remained relatively stable throughout January 2021, with a weighted increase of 0.5%. The company has continued to benefit from its exposure to general security entitlements which continue to see both increased allocation and capital appreciation with improved resource availability. Slight uplift in the Company’s above choke Murray and South Australian Murray assets have also benefited the Company.

On the 20 November 2020, the Victorian Government released* a report on water market trends and drivers in the southern MDB. This report delivered further analysis on the future market pricing impacts on allocation prices of both the increased horticulture development as well as past and future government water recovery. The key findings of this report were that with the impact of these structural demand and supply shifts, with a repeat of the last 15 years resource availability, we are likely to see weighted average pricing significantly above that experienced over the last 15 years.

The Company uses an independent Fair Market Unit Value for allocations and dry entitlements (without allocation) provided by Aither to undertake the NAV assessment.

Notable Entitlement pricing movements through January:

• � 2.56% in NSW Murray (below choke) GS (~4.73% of portfolio) •  2.41% in VIC Murray (above choke) HS (~10.46% of portfolio)

•  1.49% in SA Murray (below choke) HS (~8.15% of portfolio)

•  1.45% in NSW Murrumbidgee HS (above choke) (~8.02% of portfolio)

==> picture [171 x 119] intentionally omitted <==

Interstate Water Trading Zones

1 – Greater Goulburn

• 3 – Lower Goulburn

4a – Part Campaspe

4c – Lower Campaspe

5a – Part Loddon

6 – Vic Murray above Barmah Choke

6b – Lower Broken Creek

7 – Vic Murray from Barmah Choke to SA Border

10 – NSW Murray above Barmah Choke

11 – NSW Murray below Barmah Choke

12 – South Australia Murray 13 – Murrumbidgee

14 –Lower Darling

15 – Lachlan

16 – Lower Lachlan Groundwater

* https://waterregister.vic.gov.au/about/news/330-new-analysis-on-trends-anddrivers-of-marker-prices-for-allocation

DUXTON WATER PORTFOLIO – SMDB EXPOSURE

17 – SA Mallee Groundwater Murray Darling Basin River

DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500

ASX CODE (Shares) D20 Shares on Issue (January) 119,597,578

ALLOCATION MARKET

Allocation prices eased throughout January with trades in the lower Murray occurred between $130 -150. In the Goulburn prices traded between $115-130/ML, while in the Murrumbidgee allocation traded around $60-90/ML. This is on the back of the Murrumbidgee intervalley trade opening in January, bringing increased supply from the Murrumbidgee to the Murray.

Demand remains as irrigators work towards and through Harvest and for many annual producers look towards an autumn watering. Irrigators are beginning to shift their focus to closing out 20/21 and towards the 21/21 water year. In mid-February we will begin to receive opening allocation and condition forecasts. We are seeing growing demand for forward contracts.

The current weighted average lease expiry (WALE) remains at 2.15 years. Inclusive of renewal options this pushes the WALE to 4.4 years. The Company continues to work towards its long-term goal of having 70-80% of the portfolio under lease.

DIVIDENDS

The Company paid a fully franked dividend of 2.9 cents on the 30 October 2020, with 222k shares issued under the Dividend Reinvestment Plan at a VWAP of $1.3401/Share.

The Board maintains its commitment to providing shareholders with a bi-annual dividend franked to the maximum extent possible. With the Company’s high percentage of leased entitlements, the Directors reaffirm its target for the next four dividends.

The Company has targeted fully franked payments of:

LEASES

The leased portion of the water entitlement portfolio is ~64%. This represents ~78% of the Company’s High Security Entitlement holding. The Company is working with a number of irrigators ahead of the 21/22 water year on new leasing arrangements,

• 3.0 cents ($0.030) as the final 2020 dividend;

• 3.1 cents ($0.031) as the interim 2021 dividend;

• 3.2 cents ($0.032) as the final 2021 dividend; and

• 3.3 cents ($0.033) as the interim 2022 dividend.

The dividend targets are to be paid in the following reporting periods.

DAILY INFLOWS TO THE MDB

==> picture [92 x 20] intentionally omitted <==

==> picture [381 x 243] intentionally omitted <==

----- Start of picture text -----

260,000
240,000
220,000
200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2016-17 2018-19 2019-20 2020-21 Long term average
for comparison to a wet water year
I-Jun I-Jul I-Aug I-Sep I-Oct I-Nov I-Dec I-Jan I-Feb I-Mar I-Apr I-May I-Jun
----- End of picture text -----*

Murray System Daily Inflows (excl. Snowy Darling, inter-valley trade and environmental inflows) - 5 day rolling average

DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500

==> picture [127 x 19] intentionally omitted <==

----- Start of picture text -----

ASX CODE (Shares) D20
Shares on Issue (January) 119,597,578
----- End of picture text -----

==> picture [327 x 561] intentionally omitted <==

----- Start of picture text -----

STORAGE LEVELS IN MAJOR DAMS
Total Murray Goulburn 32% 54%
Lake Eildon 39% 64%
80 Menindee Lakes 0% 18%
75
70 Lake Victoria 45%45%
65
60 Hume 19% 55%
55 Dartmouth 48% 62%
50
45 Total Murrumbidgee 36% 73%
40
35 Blowering 39% 74%
3025 Burrinjuck 31% 70%
20 2020 2019 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
ACCC
On 30 July 2020, the ACCC released the interim report into the
Southern Murray Darling Basin Water Market.
The ACCC has spent almost a year reviewing the markets operation
and engaging with key stakeholders. The Commission has had an
ongoing role in monitoring the Australian Water Markets, having issued
reports on its operation since 2012. Whilst the Company will review the
in-depth report, on a first read we believe it is a thorough and well-
balanced report.
We note the ACCC has stated that:
“Water trading has brought substantial benefits to water users across
the Basin. Water markets allow Irrigators to increase their water
supplies, to earn income by selling their water rights when they are
more valuable to someone else, to expand production, or to release
capital for investment in their businesses. The benefit of water
markets is demonstrated by the fact that, despite tough and volatile
climatic conditions, the value of production from irrigated agriculture
in the Southern Basin has trended upwards in real terms since 2010-11.”
“Water investors, meanwhile, can help Irrigators free up capital by
buying and leasing out water; they can increase water market liquidity;
and they can help Irrigators manage water-supply risks, by providing
water products such as leases and forward contracts.”
We note the report has identified opportunities to improve
governance, regulatory and operational frameworks that support
Australian water markets. We believe that a focus in these areas will
benefit all stakeholders and Duxton will actively engage in that process.
The interim report can be found at:
https://www.accc.gov.au/focus-areas/inquiries-ongoing/murray-darling-
basin-water-markets-inquiry/interim-report
Chance of exceeding median rainfall (%)
----- End of picture text -----

CHANCE OF ABOVE-AVERAGE RAINFALL

MARCH – MAY 2021

==> picture [211 x 178] intentionally omitted <==

MARKET UPDATE & OUTLOOK

The BOM expects that the La Nina event is now past its peak and breaking down with conditions returning to netural conditions through autumn. La Nina typically means above average rainfalls over the summer months and into early autumn for much of eastern Australia. It should however be noted that for the southern parts of Australia and particularly the southern MDB, summer is not typically a high rainfall period and requires only small increases of received precipitation to breach the average rainfall thresholds.

The ACCC has spent almost a year reviewing the markets operation and engaging with key stakeholders. The Commission has had an ongoing role in monitoring the Australian Water Markets, having issued reports on its operation since 2012. Whilst the Company will review the in-depth report, on a first read we believe it is a thorough and wellbalanced report.

The BOM have commented in recent outlooks that: “While the outlooks indicate wetter than average conditions, southern parts of Australia are entering into their drier season, so rainfall is not likely to be sufficient to relieve long-term rainfall deficits.”

Rainfall for the MDB for January was 3% above the long-term average. Day and night-time temperatures are expected to be warmer than average for eastern parts of Australia. In the northern and southern MDB, storages are now at 27% and 54%, compared to 7% and 32% this time last year.

We note the report has identified opportunities to improve governance, regulatory and operational frameworks that support Australian water markets. We believe that a focus in these areas will benefit all stakeholders and Duxton will actively engage in that process.

VALUATION METHODOLOGY

The Company uses an independent Fair Market Unit Value for entitlement and allocation provided by Aither Pty Ltd (‘Aither”) to undertake the NAV assessment. Aither’s definition of fair market value is consistent with the principles of the Australian Accounting Standards Board (AASB) 13 Fair Value Measurement. It is a non IFRS measure that is not reviewed or audited by the Company’s auditor. Further information can be found at www.duxtonwater.com.au

This announcement has been authorised for release by the Board of Duxton Water Limited.

DISCLAIMER: This factsheet is prepared by Duxton Capital (Australia) Pty Ltd [ACN: 164 225 647; AFSL no. 450218] (“Duxton Capital (Australia)”). Duxton Capital (Australia) is the Investment Manager of Duxton Water Limited [ACN 611 976 517] (“Duxton Water”). This factsheet has been prepared for the purposes of providing general information only and does not constitute an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any securities in Duxton Water. Information from this factsheet must not be issued in any jurisdiction where prohibited by law and must not be used in any way that would be contrary to local law or regulation. The terms of Duxton Water are set out in the prospectus of Duxton Water (“Prospectus”), and should there be any conflict between the terms set out in this factsheet and the Prospectus, the terms in the Prospectus shall prevail. The forecasts provided are based upon our opinion of the market as at this date and are subject to change, dependent on future changes in the market. Any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets is not necessarily indicative of the future or likely performance. Investments are subject to risks, including possible loss of principal amount invested. The value of shares/ units and their derived income may fall as well as rise. Past performance or any prediction or forecast is not necessarily indicative of future performance. No assurance is given that the investment objective or the targets will be met. This document does not constitute investment, tax, legal or any other form of advice or recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. Investors should study all relevant information and consider whether the investment is appropriate for them. If you require investment or financial advice please contact a regulated financial adviser. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in this presentation. The Duxton Group or its affiliates may hold positions in the securities referred. Where stocks are mentioned, it should not be construed that these are recommendations to buy or sell those stocks. You are not authorized to redistribute this document nor qualified to make any offer, representation or contract on behalf of Duxton Capital (Australia) or its affiliates. Although the information was compiled from sources believed to be reliable, no liability for any error or omission is accepted by Duxton Capital (Australia) or its affiliates or any of their directors or employees. The information and opinions contained may also change. Copyright protection exists in this presentation. To the extent permitted by applicable law, none of the Duxton Group, their affiliates, or any officer or employee of the Duxton Group accepts any liability whatsoever for any direct or consequential loss arising from any use of this factsheet or its contents, including for negligence.

DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500