Regular income is more important than everCurrent events will continue to have health, economic and social effects. Restrictions on movement and assembly have protected public health. Financial support through public borrowings has protected the economy. Both have consequences for our society. These events have been world changing. The strength and stability of Australia’s financial system is widely appreciated. Angas Prime is playing its part not least by paying monthly income distributions from the Angas Prime Income Fund.

Angas Prime can reassure investors that the business of the Angas Prime Income Fund has been managed effectively and responsibly since inception of the unfolding public health situation. Angas Prime has adopted sensible working arrangements which address all safety guidelines and meet community expectations. Angas Prime offices in Perth and Adelaide have remained open during normal business hours. The staff complement on site has been much reduced. Whilst many staff now work remotely from home, there has been no reduction in the efficacy of system controls nor compliance arrangements. The public authorities have discouraged non-essential personal meetings. Investors can contact Angas Prime by phone or email in real time or by personal attendance at our offices subject to strict personal distancing and hygiene protocols being met.

Business continues for Angas Prime by adapting to the constraints of the present circumstances. Deal flow continues. Funds are being advanced and repaid. The business model of Angas Prime generally involves interest being prepaid by borrowers and held by Angas Prime to fund monthly investor distributions. Electronic settlement systems and banking transfers mean that the financial system continues to operate safely and securely. Lawyers, conveyancers and valuers remain in operation to service Angas Prime’s requirements. The statutory Half Year Financial Statements have been lodged.

The steps put in place by the National Cabinet will protect the broader community and facilitate a swift economic recovery. The interest deferments do not apply to loans advanced by Angas Prime. Investor funds are not advanced on regulated housing loans or on unsecured business loans.

Angas Prime plays a strategic role in the matrix of the wider financial system. Loans are advanced to businesses for working capital upon the security of a registered first mortgage. Loans are advanced to property investors to hold land subject to Angas Prime taking a registered first mortgage over that land. Applicants must detail the reason for borrowing the money from Angas Prime and explain how the money is to be repaid. Generally, Angas Prime holds back from the

advance sufficient funds to cover interest payments for the duration of the loan. Interest rates for these loans enable Angas Prime to offer and pay Target Rates of return that are attractive to investors. Demand for secured commercial lending will increase as the impacts of the health crisis recede and as the economy recovers.

Businesses and private individuals who were asset rich and cashflow rich a month or two ago may still be asset rich but many are now cashflow poor. Angas Prime can alleviate liquidity stress by advancing funds over unencumbered freehold assets. This provides those businesses or individuals with a bridge until their cashflows recover, new equity capital can be introduced or non core assets can be sold to clear the loan. The commercial community including service providers, agents and brokers will be busier than ever as the Australian economy adjusts and emerges from the effects of the health crisis. The role of Angas Prime will be at the steady centre – raising investor funds, advancing secure loans to approved borrowers, paying monthly distributions to investors and holding the first mortgage security until the commercial loans are discharged.

The present difficulties will pass. Opportunities will emerge as solid customers offer first mortgage security to access commercial funding during the transition. Angas Prime has the business model and resources to ride the recovery wave. Each investor much decide whether he or she is better off by putting funds to work or just sitting on the sidelines.

Angas Prime has made the adjustments necessary to meet its investors’ needs of delivering solid investment performance. Please contact Angas Prime if you have any specific queries. Adding to your existing investment can be done on-line very simply through BPay in multiples of $1,000. Opportunities to grow the investment portfolio with new conforming loan assets are being presented to Angas Prime now. The Angas Prime team is motivated, resilient and will rise to the challenges presented.

Andrew Luckhurst-Smith, Executive Chairman

NEWSINVESTORA P R I L 2 0 2 0

* Angas Prime’s First Mortgage Income Fund has consistently met its target return to investors. From 1 May 2020 the Target Rate is 5.5%

INVESTOR SERVICE LINE 1800 010 800

ANGAS PRIME

A Business Checklist during the Corona Virus pandemic

IS THE FUND PERFORMING AS EXPECTED? Yes

ARE THE DIRECTORS IN REGULAR CONTACT WITH ONE ANOTHER

Yes

IS THE BUSINESS CONTINUITY PLAN BEING IMPLEMENTED?

Yes. See page 3

LIQUIDITY AND REDEMPTIONS? Withdrawals are below budget. Liquidity is being

monitored

IF KEY PEOPLE BECOME SICK, WHAT HAPPENS? Most people infected with the virus do not seem to be

prevented from working from home. Nevertheless, as a precaution, there will continue to be a rotation of senior staff working off-site

HOW ARE YOU OPERATING AS OPPOSED TO HOW DID YOU EXPECT TO?

Very effectively

CAN STAFF TAKE OFFICE CHAIR HOME OR OTHER USEFUL EQUIPMENT?

Yes

HAVE FUND ASSETS BEEN SOLD TO PAY REDEMPTIONS?

No

CGT IMPLICATIONS OF SALES? None

DISTRIBUTION IMPLICATIONS OF THE VIRUS None. Investors can download and remit online

HAVE THERE BEEN LARGE REDEMPTIONS? None outside usual withdrawal pattern

WHAT HAS BEEN SENT TO INVESTORS? Written update that was well received

HAVE YOU AVOIDED GIVING PERSONAL FINANCIAL ADVICE?

Yes

HOW ARE SERVICE PROVIDERS GOING? Operating very well. No interruption to business

ANY PLANS IN PLACE IF A RUN ON REDEMPTIONS IS MADE?

Twelve month liquidity capacity

There were some general observations made at the workshop. “Remember. This situation is not a sprint. It’s a marathon”.

Business continues at Angas Prime across all facets of the operation, not just handling fund inflows and outflows. Directors and senior management remain fully attuned to the compliance controls and obligations associated with funds management.

An Angas Securities director, who had attended remotely a quarterly compliance workshop, tabled at the March board meeting a checklist of issues. The checklist was industry wide and not specific to Angas Prime’s business. The following sets out the present position at Angas Prime:-

Clive Guthrie, Director with Andrew Luckhurst-Smith, Executive Chairman

www.angasprime.com.au

ANGAS PRIME

Objectives of the Business Continuity Plan The Business Continuity Plan (“BCP”) is designed to provide Angas Prime with a set of procedures that, when implemented, will ensure a rapid response to, and planned recovery from, a situation that interrupts the day-to-day operations.

A “disaster” for these purposes is defined in BCP as:

“Any event which disrupts the normal functioning of the company and whose outcome could or will prevent the company from meeting its legal and business obligations.”

It does not have any stipulated time duration and could be an event such as:

ANGLE-RIGHT The non-availability of management personnel. ANGLE-RIGHT Fire in any part of the building. ANGLE-RIGHT Water damage as a result of fire or burst pipes. ANGLE-RIGHT Soot damage as a result of fire or smoke. ANGLE-RIGHT Inability to access the premises. ANGLE-RIGHT Major power or other utilities failure.

Whilst not invoked to respond to the operational

difficulties arising from the Corona Virus

and the mitigation response, the existence

of an appropriate Business Continuity Plan

is an important part of Angas Prime’s Risk

Management and Compliance regime.

Internet services are crucial to continuity of the business and permit staff to work from home if required. The maintenance of a service level agreement provides Angas Prime with the emergency provision of compatible computers to meet the immediate needs. An off site back-up storage and retrieval service with a minimum twenty-four (24) hour renewal interval is in place. The IT storage and retrieval service is located at the provider’s offices. An annual off-site testing was conducted by the Head of Compliance in late 2019 and functioned as required.

On becoming aware of an incident giving rise to the activation of the BCP, management will assess the size and scope of the business interruption with the following essential elements being the prime considerations:

ANGLE-RIGHT Safety of all personnel.ANGLE-RIGHT Communications.ANGLE-RIGHT Information Technology.ANGLE-RIGHT Accommodation.ANGLE-RIGHT Documentation.

Management will then determine the requirements to maintain the regular operation of Angas Prime having regard to :

ANGLE-RIGHT Staff numbers and skills. ANGLE-RIGHT Staff co-location requirements. Who needs to be

co-located for reasons of easy access and efficiency requirements?

ANGLE-RIGHT Accommodation requirements. Number of workstations and offices.

ANGLE-RIGHT Communications. Number of telephones, copiers and internet services.

ANGLE-RIGHT Electronic Documents. These documents can be produced at a remote location if required. An order of priority will be established.

ANGLE-RIGHT Documents and Files. Document recover may involve salvage and repair to be undertaken

ANGLE-RIGHT IT Hardware and Software. The number of Information Systems hardware needed together with relevant software to produce data from the IT off-site back-up media to meet immediate electronic document needs will be assessed.

ANGLE-RIGHT Inform clients and staff of the current status and its likely effect on the business. Maintain this contact with regular updates.

ANGLE-RIGHT Acquisition of suitable premises to meet the agreed needs of the business. Depending on the size and scope of the recovery process the following options may be considered:

ANGLE-RIGHT Re-occupation of the existing premises.ANGLE-RIGHT Serviced offices from which small teams can

operate.ANGLE-RIGHT Fitted out leaseholds with rented, used or recovered

furniture.ANGLE-RIGHT Complete open plan leaseholds with rented, used

or recovered furniture.ANGLE-RIGHT Small teams and/or individuals operating from

home locations.

In the interim, in accordance with the Disaster Recovery Services Agreement between Angas Securities and its IT Service Provider, Angas Prime has the right of access to, and use of, the offices of the Service Provider as a short term Disaster Recovery Site. From this site Angas Prime can access and operate its core functions for a maximum period of six weeks after the occurrence of a disaster. After this period, continued access and use may incur additional charges.

The Chief Financial Officer is responsible for maintaining accurate up to date and detailed expenditure records that are related to the BCP. These records are required for insurance purposes. Angas holds a policy of Business Interruption Insurance. The Chief Financial Officer is responsible for implementing and maintaining cash recovery processes and cash flows with the aim of increasing cash reserves until normal operating conditions have been restored.

REGULATORY ADVICEThe investment offer is contained in the current Product Disclosure Statement (PDS) which should be read carefully before investing. An investment in Angas Prime is not a bank deposit. There is a risk you could lose some or all of your principal and that you may receive lower than expected returns. There are certain limitations on your ability to withdraw from the Fund and withdrawal requests may take up to 12 months to process.

IMPORTANT NOTICEThis newsletter does not contain investment advice. You should carefully consider the content of our disclosure document and seek advice from your own qualified financial adviser. This newsletter contains general information only and does not take into account your individual objectives, financial situation or needs.

INVESTOR SERVICE LINE

1800 010 800

ANGAS PRIME

5.5%*TARGET RATE P.A. | INCOME PAID MONTHLY | *Effective from 1 May 2020

VISIT WWW.ANGASPRIME.COM.AU | INVESTORRELATIONS@ANGASPRIME.COM.AU

Angas Securities LimitedACN 091 942 728

Australian Financial Services Licence No 232 479

ADELAIDELevel 14, 26 Flinders Street,

Adelaide SA 5000

GPO Box 2948, Adelaide SA 5001

Phone 08 8410 4343 Fax 08 8410 4355

PERTHSuite 12, 448 Roberts Road,

Subiaco WA 6008

PO Box 1602, Subiaco WA 6904

Phone 08 9380 4983 Fax 08 9380 4480

PA