RIVCO AUSTRALIA LTD — Net Asset Value 2018

Jan 14, 2018

Net Asset Value per Share

$1.18

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Duxton Water Limited Monthly Update

31 December 2017

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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
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Entitlement Portfolio Value by Region

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1% 1% 2%
7%
8% Murray
1% Goulburn
Murrumbidgee
Lachlan
Mallee
Loddon
Macquarie
80%
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Water Portfolio Diversification

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38%
Leased
Unleased
62%
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Water Security Breakdown

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3%
21%
HS
GS
BORE
76%
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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 December 2017 was $1.18 per share.

NAV achieved an increase through December, however this was offset by end of year performance fee and tax provisions.

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. 20,000 Options were taken up in December. 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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1.201.20
1.151.15
1.10
1.10
1.05
1.05
1.00
10 95 . 00
0.95
16th 30th 31st 30th 31st 31st 28th 31st March 30th April 31st May 30th June 31st July
September September October November December January February 2017 2017 2017 2017 2017
2016 2016 2016 2016 2016 2017 2017
AUDAUD
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Performance	Gain/Loss
1 Month	-0.08%
3 Months	5.35%
6 Months	7.26%
12 Months	9.86%
Inception	10.27%
Inception(plus franked distribution)	12.90%

Duxton Water has delivered shareholders a 12 month return of 12.64% (inclusive of the franked distribution in November 2017)

Market Summary

Storage levels of the major dams within the Murray Darling Basin (MDB) increased by 2.7% in early December as a result of the large trough that moved through Victoria and NSW at the end of November. This system, whilst significant, did not deliver to the levels forecasted. By the end of December MDB storages had decreased by 3.68%. Total MDB storage levels were 19% lower than at the end of December 2016.

The early December inflows enabled further allocation to NSW General Security Entitlement Holders who have now received an allocation of 46%, a 13% increase on November, but well below the 100% allocation received last water year. Noticeably there was no increases in the Murrumbidgee Valley where General Security Holders have received only a 33% allocation. Demand within the Murrumbidgee is likely to remain strong to support significant annual summer crop commitments. All High Security Entitlement Holders across the Southern Murray Darling have likely received their final allocation. Allocations for New South Wales Murray High Security, Victoria Murray High Reliability and South Australia High Security remained at 97%, 100% and 100% respectively as at 31 December.

Including carryover, Duxton Water presently has approximately 15.8GL of unleased water allocations available.

Southern Basin

The Hume and Dartmouth reservoirs closed the month at 71% and 89% of capacity, respectively. Across the MDB the Bureau of Meteorology reported that mean rainfall for December was 23% above average, however as December is historically a low inflow and high water use month, storages decreased. Widespread hot weather affected all States following the early rainfall event with maximum temperatures well above average across most of eastern Australia.

Entitlement demand remained strong. Price increases of 1.5% to 2% were seen in Victorian High Reliability and South Australian High Security Entitlements. All other Water Entitlements prices remaining relatively flat.

Temporary water prices for the month fell back from their highs as above average rainfall was observed throughout the MDB. The major water zones prices range from $125/ML at the start of December to $110/ML at the end of the month.

Northern Basin

Northern Basin Water Entitlements saw a 4% increase in New South Wales Macquarie General Security Water Entitlements. Allocation prices remain firm as irrigators source water for summer annual crop requirements.

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 December 2017

Investment Update

Permanent Water Acquisitions and Divestments

As advised in December 2017, Duxton Water engaged Aither Pty Ltd (Aither) to undertake ongoing monthly independent valuations of the portfolio.

At 31 December 2017, Duxton Water is invested in approximately $84.6 million of water entitlements with the remainder of the portfolio held in cash and net current assets. Duxton Water holds contracts over a further $2.1 million of water entitlements at the 31st December 2017.

Temporary Water Sales

In December, 3289ML of allocation were sold. Sales we lower than anticipated due early month rainfall and softened demand, deferring some allocation sales to 2018.

Total 2017 allocation sales amounted to 20,792ML, with a final yield of 4.65% on the unleased portion of the portfolio.

Lease Yield

No new leases were entered into in December.

62% of the Company's portfolio is leased with a weighted average yield of 6.20% and a weighted average lease duration of 5.48 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 4.65% (running).

The 2017 weighted average running yield of the two streams is 5.61%.

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 regarding the valuation methodology can be found on www.duxtonwater.com.au.

Market Outlook

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Duxton Water Portfolio SMDB Exposure
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Inflows to the MDB
4500
4000 2017/2018
3500
3000 2016/2017
2500
2000
10 Year Average
1500
1000
500
0
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Gigalitres (GL)
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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 ). The continued warmer weather may be a catalyst for temporary water prices to further increase due to higher rates of crop water usage over the summer.

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The Chance of Above Median Rainfall for January - March Storage Levels
82%
Total Murray Goulburn 79%
91%
Hume 71%
78%
Lake Eildon 74%
77%
Dartmouth 89%
Total Murrumbidgee 95%
55%
Burrinjuck 67% 96%
Blowering 95%
48%
0% 20% 40% 60% 80% 100% 120%
Source: Bureau of Meteorology
2016 2017
Disclaimer
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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 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 Capital (Australia) Pty Ltd Duxton House, 7 Pomona Road, Stirling, SA, Australia 5152 T (08) 8130 9500