RIVCO AUSTRALIA LTD — Net Asset Value 2018

Feb 12, 2018

Net Asset Value per Share

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Duxton Water Limited Monthly Update

31 January 2018

$1.20

Duxton Water
ASX Code (Shares)	D2O
ASX Code (Options)	D2OO
Shares on Issue	71,213,632
Options Outstanding	63,942,406
Options Exercise Price	$1.10
Options Expiry	31 May 2018

Entitlement Portfolio Value by Region

7%[1%] 1% 2% 8% Murray 1% Goulburn Murrumbidgee Lachlan Mallee Loddon Macquarie

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80%
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Water Portfolio Diversification

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40%
Leased
Unleased
60%
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Water Security Breakdown

The primary investment objective of Duxton Water is to generate annual income through capitalising on the increasing demand for scarce water resources. Duxton Water derives its income from a diversified portfolio of Australian Water Allocations and Water Entitlements.

Net Asset Value per Share

Duxton Water's NAV as at 31 January 2018 was $1.20 per share.

\

The after tax NAV figure takes into account the provision for deferred tax on set-up costs and estimates of net tax provisions that may arise should the entire portfolio be disposed of on the above date. These figures are not adjusted for any dilution due to the outstanding options which are exercisable at $1.10.

NAV is calculated based on an independent monthly portfolio valuation performed by Aither Pty Ltd (Aither).

Net Asset Value per Share - Since Inception

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1.201.25
1.20
1.15
1.15
1.101.10
1.05
1.05
1.00
1.000.95
0.95
16th 30th 31st 30th 31st 31st 28th 31st 30th April 31st May 30th June 31st July
September September October November December January February March 2017 2017 2017 2017
2016 2016 2016 2016 2016 2017 2017 2017
AUDAUD
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Performance	Gain/Loss
1 Month	1.29%
3 Months	4.83%
6 Months	8.65%
12 Months	13.82%
Inception	11.69%
Inception(plus franked distribution)	14.32%

Market Update

Market Summary

Storage levels of the major dams within the Murray Darling Basin (MDB) decreased by 5% through January in line with summer water use expectations. Total MDB storage levels were 14% lower than at the end of January 2017.

As a result of the December rainfall event, a further allocation to NSW General Security Entitlement Holders was made on the 1st of January. The 3% increase took General security holders to 49%. Duxton Water benefited from this further allocation. No increases were made to other entitlements and the likelihood of further allocations prior to the start of the 18/19 Water year (1/7/2018) is low. Demand across the Murray and Murrumbidgee valleys for allocation has increased with allocation prices firming from December average.

Duxton Water presently has approximately 17.4GL of unleased water allocations available.

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2%
21%
HS
GS
BORE
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Southern Basin

The Hume and Dartmouth reservoirs closed the month at 62% and 89% of capacity respectively. Hot dry conditions persisted through the middle of January with rainfall totals across the Basin 60% lower than the long term average. Entitlement demand remained strong. The NSW Murray High Security Entitlement pricing increased by 3% (33.5% of the portfolio) with NSW Zone 10 Murray General Security Entitlement increasing by 4% (10.6% of the portfolio). A 1% increase in entitlement value was also seen in NSW Murrumbidgee and South Australian High Security Entitlements. All other Water Entitlements prices remained relatively flat.

Temporary water prices rose through January as Summer demand strengthened after the lower demand through December.

Northern Basin

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77%
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Duxton Water took advantage of peak season allocation pricing in both the Macquarie and Lachlan to sell its unleased allocation. Northern Basin Water Entitlements remained flat through January.

Duxton Capital (Australia) Pty Ltd Duxton House, 7 Pomona Road, Stirling, SA, Australia 5152 T (08) 8130 9500

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Duxton Water Limited Monthly Update

31 January 2018

Investment Update

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Duxton Water Portfolio SMDB Exposure
Inflows to the MDB
5000
2017/2018
4000
3000 2016/2017
2000 10 Year Average
1000
0
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Gigalitres (GL)
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Permanent Water Acquisitions and Divestments

At 31 January 2018, Duxton Water is invested in approximately $88 million of water entitlements with the remainder of the portfolio held in cash and net current assets. Duxton Water holds contracts over a further $4.36 million of water entitlements at the 31st January 2018.

Temporary Water Sales

3468.3ML of allocation were sold through January marking the beginning of the Company’s sales for the 2018 financial year. Higher levels of allocation were carried through from December and will be sold through the remainder of the Summer irrigation period.

In 2017, allocation sales amounted to 20,792ML, with a final running yield of 4.65%. As of the 31st of January 2018, the Company has sold a total of 3,468.3ML, deriving a current yield on the unleased portion of the portfolio of 1.15%.

The Company tracks the return from its unleased entitlements in the form of a Running Yield, from start of the financial year (1 Jan) to date, based on the current annual income on the investment divided by its current market

value. This yield will increase through the Company’s financial year as we divest the remainder of held allocation and derive returns from the next water year’s allocation from 1st of July .

Lease Yield

No new leases were entered into in December.

60% of the Company's portfolio is leased with a weighted average yield of 6.20% and a weighted average lease duration of 5.40 years.

Total Yield

Duxton Water’s yield is comprised of two streams of income: leased and unleased income. The leased income is currently at 6.20% (annualised) and the unleased income is 1.15% (running).

The 2018 weighted average running yield of the two streams is 4.18%. This will increase as unleased allocation is sold through the year.

Dividends

The Company paid its maiden dividend of 2.3 cents per share franked at 75% to investors on 16 November 2017. The Company aims to pay biannual dividends moving forwards.

Valuation Methodology

Aither undertake a monthly valuation of the Duxton Water portfolio. Total assets of the Company are valued based on an assessment of fair market value. Aither has adopted the Australian Accounting Standards Board (AASB) 13 Fair Value Measurement definition of fair value. Further information can be found on www.duxtonwater.com.au.

Market Outlook

The latest Bureau of Meteorology outlooks are suggestive of a 50% chance of median rainfall over the next quarter however the median itself is low over this period therefore no significant inflows into the Murray Darling Basin are to be expected for this period ( see chart below ). Water resource managers will begin providing 2018/2019 allocation forecasts on the 15th of February.

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The Chance of Above Median Rainfall for January - March Storage Levels
80%
Total Murray Goulburn 75%
87%
Hume 62%
76%
Lake Eildon 72%
78%
Dartmouth 89%
Total Murrumbidgee 85%
47%
Burrinjuck 57% 84%
Blowering 86%
41%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: Bureau of Meteorology
2016 2017
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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

Duxton Capital (Australia) Pty Ltd Duxton House, 7 Pomona Road, Stirling, SA, Australia 5152 T (08) 8130 9500