Ann: Response to ASX Query re Appendix 4C, page-30

The comparison with CGA startling. They issued circa 29m shares at 60c to raise $17m plus They paid out over 80 percent in purchase of CAML and issue expenses. They started operating with circa future negative cash flow of close to $3m pa

Relying on planned retail issues ( 2 so far but with circa 45bp fees to cover both initial costs , admin and Inv Mgt ) and emphasis on new insto mandates

Performance in 15/ 16 may have been encouraging for that -- but not now -- particularly for micros

Insto mandates almost totally dependent on gatekeeper ticks. They are very conservative. They want to recommend only good track records to protect their own business model. Not less than 2 nd quartile . And certainly not bottom quartile

" Livewire.com" recently published table of micro performances for 23 managers in micros -- both unlisted funds and LIC's for 16/17 financial year

Results ranged from 25 per cent plus down to minus 9 percent. 75th quartile was at 17 per cent. Median at 12 per cent. 25th quartile was at zero

Small Ords Accumulation was 7 per cent

CTN was at minus 6.1 per cent ( CGA unlisted fund was minus 6.6 per cent-- difference no doubt reflecting OC managing 15 per cent of CTN funds for approx last 4 months of year ). ( OC recorded at 15.8 per cent pa ).

So where goes strategy of new Insto mandates if performance now less than medians ? And with negative operating cash flow still running at $800 k per qtr ? Regular new loans ? Not a long term strategy?