Benefits of investing in D2O

• Access to an investment with an underlying asset that provides a high direct exposure to Australian agriculture without the cost of investing directly into this sector.

• An investment providing visible revenue streams through a portfolio of long-term lease arrangements entered into with primary producers.

• Dividend payout will be as high as prudently possible and franked to 100% or the maximum extent possible.

• On listing, is expected to be the only ASX listed vehicle of its type in Australia providing its investors with direct exposure to water.

• A Company targeting no long-term financial debt.

• A Company with a highly competitive management fee structure.

• An existing portfolio of water assets being acquired for A$38 million (A$34.8 million are being purchased from related parties based on independent valuation by CBRE, with the remaining A$3.2 million being purchased on market).

• A leased portfolio which will generate a weighted average gross initial yield of 5.9% diversified across agricultural enterprises.

• The average current yield for these Water Entitlements in the market is 5.6%.

• Scope for capital growth resulting from the appreciation in value of Water Entitlements.

• An underlying asset with low correlation to conventional asset classes which enables increased diversification within investment portfolios.

About the Fund

Duxton Water Limited ("Duxton Water) was incorporated in April 2016 and presents an opportunity to invest Australian Water Entitlements (also known as water licenses or water rights) - perpetual rights to Australia's limited water supply - a key production input into a number of agricultural industries.

Water scarcity is a growing issue. Access to fresh water is a key limiting factor of production in Australian agriculture, which currently makes up approximately 60% of Australia's total water consumption. Moreover, future water availability is likely to be further constrained by a growing global population, impacts of climate change and government buybacks of water entitlements for environmental purposes. The increasing scarcity of water, coupled with the rising demand for it is likely to be a key economic driver underpinning the water market.

The majority of Duxton Water's returns are expected to be generated via Water Entitlement leases with primary producers. These leases are structured in a similar manner to commercial leases where the asset title is held by the lessor and fixed annual rent is paid by the lessee. As such, Duxton Water presents investors with an asset that produces regular and predictable revenue streams and is uncorrelated with traditional asset classes. The Water Entitlements may potentially generate capital appreciation as they are held over a long term horizon.

Chaired by Ed Peter, former Head of Deutsche Asset Management Asia Pacific, Middle East & North Africa, Duxton Water's Board comprises of a team of four highly experienced members with a combined 72 years of experience in the agriculture industry and a combined 47 years of experience in Australian water markets.

Duxton Water presents opportunities to both buy and sell water, as well as invest.

What are Water Entitlements?

In the Australian water market there are two main types of ownership rights in relation to water:

1. Water Entitlement: the perpetual entitlement to exclusive access to a share of water from a specified pool of water set aside by Government for consumption.
2. Water Allocation: the specific volume of water allocated to a Water Entitlement in a given season. This can fluctuate annually, based on seasonal availability.

How we invest your money

The Investment Manager's investment strategy is governed by a disciplined process influenced by the Company's existing water portfolio position along with analysis of regional markets. The strategy establishes yield targets and volume of water available for sale and purchase in the market based on Water Allocation announcements, demand and supply drivers, climate forecasts and storage along with the degree of risk involved.

The key objectives driving the construction and management of the Company's portfolio are:

• Providing visible revenue streams and dividend streams as high as prudently possible and franked to 100% or the maximum extent possible;

• Delivering investors with optimal long terms gains on their invested principal;

• Achieving reliable yields on behalf of investors;

• Establishing a portfolio which is diversified across Water Entitlement types, security classes and geographical regions within the MDB;

• Maintenance of principal invested; and

• A long term buy and hold strategy with the purchase and sale of assets as required to ensure that the portfolio is positioned to capitalise on growth opportunities.

Investment guidelines

In making investment, leasing and divestment decisions and in order to attempt to maximise returns to the investor, the Investment Manager will have wide investment discretion. Investment, lease or divestment decisions will be based on the analysis of the macroeconomic environment, sector trends, Australian water market fundamentals and the portfolio allocation.

The Investment Manager will allocate capital in accordance with the Investment Guidelines detailed below. The Investment Manager will not engage in short selling and only undertake divestments for cash.

• Investment universe: The Company will only invest in Australian Water Entitlements.

• Maximum exposure to a single trading zone: 50% of the aggregate volume of Water Entitlements (measured in dollar value ) in that trading zone rather than the initial Water Entitlements portfolio once fully invested.

• Expected allocation range to Cash: 0%- 30% of the portfolio Net Asset Value of the Company - except in the first two years of operation.

• Water entitlements available to purchase or sell: Only Water Entitlements held within a regulated Australian Market can be purchased or sold.

• Exposure to temporary water market: 20%- 40% of the portfolio by dollar value, once fully invested.

• Expected allocation to leases: 20%- 80% of the portfolio by dollar value should be held in leases ranging from 3 to 7 years once fully invested.

• Leverage: Gearing to be no greater than 30% of total assets (excluding accounts payable). Short-term increases beyond this level are permitted with approval from the Board.