26 November 2018

Dear Investor

Canterbury Mortgage Trust Update

This update accompanies the 2018 financial statements, annual report and an interim PIE certificate.

The financial statements for 31 March 2018 were delayed while significant litigation matters were settled, with the majority of the outcomes not reflected in the 2018 result as they were considered non-adjusting post balance date events. There is limited disclosure of these events in note 2 of the financial statements, but as both settlements at mediation included confidentiality clauses, this has limited the details that can be disclosed.

Taking in account the events of the last seven months the Manager, with the approval of the Supervisor, has now taken steps to allocate net income resulting from the litigation settlements to unit holders. That amount has now been added to individual investor account balances in the fund as shown on the interim PIE certificate included as part of this mail out. This process has not resulted in further funds being released for repayment to unit holders, beyond those paid in August 2018, due to the remaining litigation risk. The Trustee and Manager are working to resolve the remaining matters to enable further repayment of investor balances.

The time taken to resolving the remaining matters will depend on the ultimate course taken and the degree to which these actions are challenged.

Yours faithfully

Canterbury Fund Managers Ltd

Colin Gower

Director