Purported General Meeting – Update

January 16th, 2019

Aurora Funds Management Limited (Aurora), in its capacity as the responsible entity of the Aurora Absolute Return Fund (ABW or Fund), refers to the previous Announcements on this subject that it made on 7, 8 and 14 January 2019.

Further to those Announcements, Aurora informs the market and investors that, Aurora has received a letter from Primary Securities Limited (Primary) informing Aurora that at the purported meeting which Primary held yesterday in Canberra (Purported Meeting), proposed resolutions 1, 2 and 3 in the notice for the Purported Meeting (seeking to remove Aurora as responsible entity, appoint Primary in its place and make changes to the ABW Constitution) were passed. As previously announced, Aurora does not consider that the Purported Meeting was properly called. Accordingly, Aurora considers that the resolutions are invalid and of no effect.

Aurora has written to ASIC, informing ASIC of this position and requesting ASIC not to register the resolutions or the change in responsible entity or Constitution flowing from them.

Aurora’s position is that, as a trustee, it should not spend the Fund’s money establishing the validity or otherwise of resolutions which have been propounded by others. It is Aurora’s position that it is incumbent on Primary, as the proponent of the Purported Meeting, to establish the validity of the Purported Meeting and its business and to this end Aurora has invited Primary to commence appropriate Court proceedings to which Aurora would be a party.

Until the validity of these resolutions is established, Aurora does not propose to abandon the ABW unit holders by relinquishing the position as responsible entity to Primary or those standing behind Primary.

ABW General Meeting Request Update

January 14th, 2019

Aurora Funds Management Limited (Aurora), in its capacity as the responsible entity of the Aurora Absolute Return Fund (ABW or Fund), refers to its announcements on this subject that it made on 7 and 8 January 2019. Further to its announcements on this subject, Aurora informs the market and investors that, as at the time of this announcement, it has received no response from Primary Securities Limited (Primary) concerning the issues raised in our earlier announcements.

Notwithstanding this lack of response and Aurora’s concerns as to its validity, Aurora understands from the communications between Primary and Aurora’s registrar, that Primary still intends to hold this meeting.

Aurora has written to Primary advising them of Aurora’s continued concerns and requesting that, if Primary proposes to rely on these purported resolutions to take any further steps, it should seek court orders establishing the validity of the purported meeting and resolutions before taking those steps and reminding Primary that Aurora will be a necessary party to any such proceedings.

Accordingly, Aurora maintains its previous advice that members should not attend or take any action in relation to the purported meeting and that Aurora does not recognise the validity of the purported meeting and considers that it is not bound by any purported resolution or other business that may be taken at that purported meeting.

ABW General Meeting Request

January 8th, 2019

Aurora Funds Management Limited (Aurora), in its capacity as the responsible entity of the Aurora Absolute Return Fund (ABW or Fund), hereby announces that today it received in the post a Notice of Meeting and Explanatory Memorandum (Materials) from Primary Securities Limited (Primary) for a general meeting (Meeting) of unitholders to consider a number resolution’s in relation to the Fund, including:

1. Amendments to the Fund’s Constitution – Special Resolution;

2. Removal of Aurora as Responsible Entity – Ordinary Resolution;

3. Appointment of Primary as Responsible Entity – Ordinary Resolution; and

4. Winding up of the Fund – Extraordinary Resolution.

Aurora is currently reviewing the Meeting Materials, however it notes the following:

▪ The Materials refer to members holding more than 5% of ABW, however, the identity of those members has not been disclosed. Aurora is therefore unclear on who has called the Meeting and questions why the Materials omitted this important information; and

▪ Based on the Materials provided, the proposed date for the unitholder meeting, being 15 January 2019, does not appear to satisfy the notice period requirements for holding a unitholder meeting, in contravention of the Corporations Act.

The Board of Aurora is still considering the validity of the Meeting and Materials and will update the market shortly. In the meantime, Aurora recommends that unitholders take no action at this time.

Liquidity Update

January 7th, 2019

On the 22 March 2018, Aurora Funds Management Limited (“Aurora”) as responsible entity of Aurora Absolute Return Fund (“ABW”) and Aurora Fortitude Absolute Return Fund (“AFARF” or “Master Fund”) announced an update regarding the redemption facility for the 31 March 2018 quarter and the 30 June 2018 quarter;

“The redemption ceiling for the combined redemptions for the 31 March 2018 quarter and the 30 June 2018 quarter will be 10% of the total FUM as at 30 June 2018.”

In order to facilitate the processing of redemption requests in circumstances where Aurora considers it undesirable to realise fund investments, Aurora may use its own funds to acquire units for which redemption requests have been received. Where it does so the units will not be cancelled but purchased by Aurora for a cash consideration equal to the applicable Redemption Price. Aurora’s capacity to proceed in this way is limited by both its financial resources and by the limitations on acquiring units in listed managed investment schemes set out in Chapter 6 of the Corporations Act.

The redemption requests are currently being processed by the share registry, with payment to follow.

Aurora confirms that ABW unitholders and Master Fund unitholders will receive approximately 39% of their outstanding redemption monies based on total redemptions as at 30 June 2018.

Voting Results of the HHY Fund Unitholder Meeting

December 7th, 2018

Aurora Funds Management Limited (Aurora), in its capacity as responsible entity for the HHY Fund, hereby advises that the resolution proposed by Wilson Asset Management (International) Pty Ltd (WAMI) and its related entities, to wind up the HHY Fund, was not passed at today’s meeting of unitholders.

A total of 25,044,025 valid votes were received in support of the proposed resolution, representing 30.76% of total eligible votes of 81,403,538. As this was an extraordinary resolution, requiring more than 50% of total eligible votes in order to pass, the resolution failed.

Aurora would like to thank its loyal unitholders for their continued support.

September Distribution

October 25th, 2018

Aurora Funds Management Limited, announces that today it has advanced the necessary funds to its Registry for the 22 October 2018 distribution and expects the Registry to process and pay distributions immediately. The reason for late payment was due to an internal miscommunication regarding the final payment date. Aurora apologises for any inconvenience that this delay in distributions may have caused.

Appointment of Company Secretary

September 19th, 2018

Aurora Funds Management Limited, as Responsible Entity announces that Mr Adrian Tilley has been appointed to the role of Company Secretary.

Mr Tilley’s most recent role was Financial Controller and Company Secretary of St Martins Properties (Australia) Pty Ltd. Mr Tilley is a Chartered Accountant and holds a Bachelor of Commerce.

Molopo Energy – Withdrawal of Takeover Bid

August 10th, 2018

As foreshadowed in our market announcements of 18 July 2018 and 24 July 2018 on this subject, Aurora Funds Management Limited (Aurora), in its capacity as responsible entity for the Aurora Fortitude Absolute Return Fund (AFARF), makes this further announcement in respect of the off-market takeover bid by AFARF for shares in Molopo Energy Limited (Molopo).

The Announcements made by Molopo on 8 May 2018 disclosed a number of transactions which were in excess of the ‘no material transaction or series of transactions of more than $2 million’ defeating condition of AFARF’s bid, specifically:

▪ “On 30 January 2018, Orient redeemed all of the JV Partner’s shares in Orient for a redemption amount of USD$7 million (Orient Redemption), resulting in the shares of the JV Partner in Orient being cancelled and Orient becoming a wholly-owned subsidiary of Molopo”;

▪ “Following completion of the Orient Redemption, Molopo has sole funded the remaining amounts required by the Orient Project, in accordance with its current budget for the project, in an aggregate amount of USD$21 million (Orient Funding)”;

▪ “On 21 February 2018, Orient entered into a contribution agreement (Contribution Agreement) with Drawbridge Energy Holdings Ltd (Drawbridge Holdings) pursuant to which it agreed to (i) transfer its 100% interest in Orient FRC (US) LLC (Orient US), a wholly owned subsidiary of Orient; and (ii) assign Orient’s interest in the Orient Project to Orient US at completion, in consideration for a 30% interest in Drawbridge Holdings (Combination Transaction)”; and

▪ USD$21 million was funded by way of intercompany loan from Orient to Orient US. Following completion of the Combination Transaction on or about 7 March 2018, the loan from Orient to Orient US was extinguished.

Each of these transactions alone and in combination with the others trigger that defeating condition and, in Aurora’s opinion, has substantially and adversely affected the value of Molopo’s assets. Further, the Takeovers Panel has reviewed the conduct of the former directors of Molopo and found their actions to constitute unacceptable circumstances in relation to Molopo’s affairs.

In the recent Quarterly Activities Report released by Molopo on 1 August 2018, the new Molopo Board, who were elected at the Company’s Annual General Meeting on 31 May 2018, made the following comments:

“Following a detailed review of the Orient/Drawbridge Transactions, the current Directors of Molopo cannot see any logical or commercial reason for entering into these transactions.

The Transactions resulted in the Company’s cash reserves being depleted from A$66.2 million at 30 June 2017 to A$15 million as at 30 June 2018.

The Former Directors proceeded with these transactions without seeking shareholder approval, resulting in a breach of ASX Listing Rules, as well as breaching ASX continuous disclosure obligations and the Corporations Act.”

Aurora notes that Molopo has sought a review of the Orders made by the Takeovers Panel on 18 July 2018. Notwithstanding this development, Aurora has determined that it will not declare AFARF’s takeover bid free from its defeating conditions. The takeover bid will therefore expire on 20 August 2018, subject to triggered defeating conditions, so all contracts arising from acceptances of the takeover bid to date will automatically be rescinded and Aurora will deal with the acceptances and any accompanying documents so that all Molopo shareholders who have accepted the takeover bid will receive their shares back.

Aurora will provide a formal notice to Molopo and the ASX on Monday 13 August 2018, in relation to the status of defeating conditions, as required by the Corporations Act.

Variation of Licence Conditions

June 27th, 2018

Aurora Funds Management Limited, in its capacity as Responsible Entity for the Aurora Absolute Return Fund, Aurora Fortitude Absolute Return Fund, Aurora Global Income Trust, Aurora Dividend Income Trust, Aurora Property Buy-Write Income Trust, and HHY Fund, acknowledges the conditions placed on its licence following the misappropriation of funds by its former Chief Financial Officer, Ms Betty Poon.

On 25 November 2017, Aurora management identified the misappropriation of funds, resulting in the immediate termination of Ms Poon, with the matter being reported to the Victoria Police on the same day. On Monday 27 November 2017, Aurora notified ASIC and made an ASX Announcement. Since this time, a thorough forensic investigation has been completed, Aurora has changed its auditors, is in the process of changing its unit registry arrangement and Ms Poon has pleaded guilty to the misappropriation of funds. Aurora has also recovered a portion of the misappropriated funds and other recovery actions remain on foot.

In March 2018, Aurora in its own capacity repaid the misappropriated funds for the benefit of fund members.

Since the misappropriation, Aurora has reviewed and altered its risk management framework to avoid this situation occurring again. The variation of the licence conditions will not currently impact the way Aurora funds are managed and business will continue as normal, whilst the review is carried out.

ASIC has imposed licence conditions that require Aurora to engage an ASIC-approved independent expert to assess and report on the adequacy of its resources, corporate governance and risk management practices. Aurora has agreed to the conditions and must engage an independent expert by 30 June 2018.

The independent expert’s review will consider, among other things, Aurora’s:
• risk management systems;• internal governance and communication systems; • processes and procedures for handling scheme property; • financial, technological and human resources considering the size, nature and complexity of Aurora’s business; and • processes and procedures to ensure its representatives have the necessary qualifications, skills and ongoing education.

The independent expert will report to ASIC and Aurora and provide interim recommendations for any steps that Aurora should take to ensure that its procedures are adequate by 1 October 2018. Aurora is required to inform ASIC of any recommendations that it will not implement and explain why it will not do so. The independent expert will then provide a final report to ASIC and Aurora by 29 March 2019.

At all times, Aurora has worked cooperatively with the Victoria Police and ASIC and will continue to do so. As part of this cooperation, Aurora has agreed with ASIC to appoint an independent party to conduct a review of its corporate governance and risk management practices. Accordingly, ASIC has amended Aurora’s licence to take into account this review.

Appointment and Resignation of Compliance Committee Members

June 20th, 2018

Aurora Funds Management Limited, in its capacity as Responsible Entity for the Aurora Absolute Return Fund (Aurora), is pleased to announce the appointment of Mr Anthony Hartnell, AM and Mr Patrick Burroughs as external members of Aurora’s Compliance Committee to replace Ms Kim Rowe and Mr John Taylor. These changes take effect immediately.

Mr Hartnell is currently a Non-Executive Director of Aurora Funds Management Limited, having been appointed to the role of Non-Executive Independent Chairman on 2 March 2018. Mr Hartnell is a former Chairman of the Australian Securities Commission and National Companies & Securities Commission (being the predecessor organisations to the Australian Securities and Investments Commission).

Mr Patrick Burroughs is a chartered accountant and a former senior partner at KPMG, a major accounting firm, until his retirement in 1998. In his career with KPMG, Mr Burroughs specialised in the Financial Services, Construction and Manufacturing sectors of the economy as well as managing major divisions of the firm. Mr Burroughs has also served as a non-executive director of The Companies Auditors and Liquidators Disciplinary Board, the Women’s and Children’s Health Service, Pacifica Group Ltd, The Open Garden Scheme, The Royal Children’s Hospital Melbourne, State Trustees Limited and the Corporate Trustees of large public offer superannuation funds administered by MLC Ltd. Currently, Mr Burroughs acts as an Independent Member of the Audit committee of Vanguard Investments Australia Ltd.

The Board also wishes to thank Ms Rowe and Mr Taylor for their considerable contributions during their tenure on the Compliance Committee.

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