Announcement PDF DUXTON WATER LIMITED ANNUAL GENERAL MEETING FY2024 ANNUAL GENERAL MEETING Duxton Water Limited | ASX:D2O Disclaimer This presentation is prepared by Duxton Water Limited [ACN 611 976 517] (“Duxton Water”). This presentation has been prepared for the purposes of providing general information only and does not constitute an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any securities in Duxton Water. Information from this presentation must not be issued in any jurisdiction where prohibited by law and must not be used in any way that would be contrary to local law or regulation. The terms of Duxton Water are set out in the prospectus of Duxton Water (“Prospectus”), and should there be any conflict between the terms set out in this presentation and the Prospectus, the terms in the Prospectus shall prevail. 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This presentation has been authorised for release by the Board of Duxton Water Limited. 2 Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Board Members Ed Peter Stephen Duerden Dr Vivienne Brand Dennis Mutton CHAIRMAN NON-EXECUTIVE DIRECTOR INDEPENDENT NON-EXECUTIVE DIRECTOR INDEPENDENT NON-EXECUTIVE DIRECTOR Brendan Rinaldi Dirk Wiedmann Katelyn Adams INDEPENDENT NON-EXECUTIVE DIRECTOR INDEPENDENT NON-EXECUTIVE DIRECTOR COMPANY SECRETARY 3 Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Duxton Water Team Lachlan Campbell Lachlan Beech Mercedes Vera Harry Boksem Carolyn James PORTFOLIO MANAGER PORTFOLIO MANAGER ASSOCIATE ANALYST PORTFOLIO ADMINISTRATOR Michael Amey James Lanthois Marcus Rose Tanya Radovanovic CHIEF FINANCIAL OFFICER (DCA) FINANCIAL CONTROLLER SENIOR ACCOUNTANT FINANCE OFFICER 4 Duxton Water Limited | FY2024 Annual General Meeting Agenda Chairman’s Address Portfolio Update Outlook Internalisation Proposal Items of Business Voting Polls Open Questions & Answers FULL-YEAR 2024 SNAPSHOT Duxton Water provides water supply solutions to Australian irrigators. These products enable businesses to manage water risk, while allowing irrigators to take a multi-year approach to water security. Each year, Duxton Water supports hundreds of customers across diverse industries, including tree nuts, grapes, dairy, citrus, potatoes, cotton, wheat, cereals and rice. 6 1. Total Portfolio Return is based on NAV movements and includes franked dividends for the 12 month period to 31 December 2024. 2. Weighted Average Lease Expiry. 3. Non-statutory value, adjusting for water entitlements held at cost in Financial Statements of $308.6m. This includes permanent water entitlement acquisitions that are contracted but not yet settled. 1.2% $392M $1.54 91.5GL 37% 2.8 PORTFOLIO RETURN1 (12 MONTHS) WATER PORTFOLIO VALUE 3 PER SHARE NON-STATUTORY NET ASSET VALUE (POST TAX) 3 TOTAL WATER OWNED LEASED % YEARS WALE2 FY2024 Financial Results ANNUAL GENERAL MEETING Full-Year 2024 Summary Duxton Water Limited provides investors with exposure to Australian water entitlements as an asset class. NET ASSET VALUE VS SHARE PRICE (SINCE INCEPTION) – TO 31 DECEMBER 2024 • Duxton Water Limited (“the Company” or “D2O”) delivered on both its dividend targets in FY2024. Shareholders received fully franked dividends totalling 7.3 cents per share during the year. $2.10 • The Company had 54% of its portfolio committed to leases and forward allocation sales in FY2024. The Company is actively seeking new long-term water leases to strengthen its lease portfolio. $1.70 • Lower dam storages have resulted in higher allocation prices when compared to the previous 3 years. Higher spot prices and reduced dam storages have led to an increase in demand from irrigators seeking long-term water leases. • Declared a fully franked Final 2024 dividend of 3.71 cents per share that was paid to shareholders 24 April 2025. The Company continued to offer a DRP discount of 5%. $ PER SHARE • Following wetter-than-average conditions seen in early 2024, drier conditions over the last 9-12 months have resulted in a significant reduction in dam storage levels. $1.90 $1.54 $1.50 $1.34 $1.30 $1.10 $0.90 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 NAV per Share Portfolio Performance Total Return (NAV + Dividends) Dec-21 Dec-22 Dec-23 Dec-24 Share Price 6 Months 12 Months Inception Annualised 5.5% 1.2% 102.7% 8.9% ^These figures are based on NAV movements and include franked dividends for the period to 31 December 2024. 8 Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Financial Results (P&L) The Company is pleased to report a 2024 Profit Before Tax of $13.3 million (+48% when compared to FY2023). Key Metrics FY2024 FY2023 Difference % Change Profit before tax $13.3m $9.0m +$4.3m +48% Net profit after tax $9.3m $6.3m +$3.0m +47% Earnings per share 6.0 cps 4.8 cps +1.2 cps +25% Dividends per share 7.3 cps 6.9 cps +0.4 cps +6% Portfolio size 91.5 GL 90.5 GL +1.0 GL +1% • Duxton Water reported a Net Profit After Tax of $9.3 million for FY2024 (FY2023: $6.3 million). • This positive result underpinned by improving yields on the Company’s high security water assets, active management of unleased allocations, and profits from water entitlement sales. • This translated to an Earnings Per Share of 6.0 cents per share in FY2024, a 25% increase when compared to FY2023. • While the Company completed several strategic acquisitions and disposals in FY2024, the net portfolio size increased by 1 GL. This includes unsettled entitlement trades contracted in FY2024. 9 Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Financial Results (Balance Sheet) Water entitlements continue to demonstrate low/negative correlation to traditional asset classes. Cents per share • Net Asset Value (“NAV”) closed 31 December 2024 at $1.54 per share, decreasing by 8 cents per share (or -5.3 %) during the year. Net Asset Summary FY2024 FY2023 Difference % Change Permanent water assets (fair value) 1, 2 $387.1m $386.3m +$0.8m 0% Temporary water assets (fair value) 2 $4.4m $4.2m +$0.2m Total net assets (fair value) 2 $240.2m $247.6m -$7.4m -3% Non-statutory NAV per share $1.54 $1.62 -$0.08 -5% • The reduction in NAV was primarily driven by fully franked dividends paid during the year of 7.3 cents per share. Adding back fully franked dividends, total post-tax NAV performance in FY2024 was 1.2%. +5% • Water entitlement values softened in the first half of 2024, before recovering in the back half of the year. The Company believes the recovery of entitlement values were likely driven by recent drier weather conditions and from the Government commencing its voluntary water entitlement buyback program. • The Company held approximately $4.4 million (Fair Market Value) of unleased water allocations at 31 December 2024. These water allocations have a nil cost base and have been sold throughout Q1 2025, supporting summer irrigation programs. • The Company continues to monitor water entitlement markets for well-priced opportunities in zones that complement the existing portfolio. 1. Includes water entitlement acquisitions that are contracted at 31 December 2024 and expected to settle in 1HY2025. 2. Fair Market Value is prepared in accordance with the Company’s monthly NAV statement. The water portfolio is evaluated on a monthly basis by the Company’s independent valuer, “Ricardo”. Fair Market Value is a non-IFRS measure that is not reviewed or audited by the Company’s auditor. 10 Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Capital Management In May 2025, the Company repaid $108 million of its debt facility using proceeds from the $121.3 million sale of water entitlements. Debt Summary FY2024 FY2023 Difference % Change Total debt drawn $116.0m $116.5m -$0.5m 0% Total net debt 31% 29% +2% - Total variable debt $116.0m $116.5m -$0.5m 0% Effective cost of borrowings 5.85% 5.20% +0.65% - DEBT SUMMARY • Total debt drawn of $116 million at 31 December 2024 (31 December 2023: $116.5 million). • Net debt of 31% remained relatively stable throughout the year (31 December 2023: 29%) and it remains within the Company’s maximum net debt covenant of 40%. • The effective cost of borrowings for FY2024 was 5.85%, up from 5.20% in FY2023. Interest Summary FY2024 FY2023 Difference % Change Interest paid on debt $6.7m $5.7m +$1.0m +18% - -$0.7m +$0.7m - $6.7m $6.5m +$0.2m +3% Realised cash gain/(loss) on swaps Net finance expenses INTEREST SUMMARY • Total interest paid for FY2024 of $6.7 million (FY2023: $5.7 million). • The Company repaid $108 million of its debt facilities in May 2025. This is expected to substantially reduce the Company’s annual interest costs. • The Company does not have any interest rate hedging arrangements in place. 11 Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Dividends driersuggest outlook by suggest by the is also supported by sthe BOM’s expected long-term The drierThe outlook the ENSO, is ENSO, also supported by the BOM’ expected long-term rain and temperature forecasts. rain and temperature forecasts. The Company has now paid 16 consecutive and increasing dividends to shareholders since November 2017. Company Dividend History • Duxton Water delivered on both of its dividend targets in FY2024. • Shareholders received two fully franked dividends during the year, totalling 7.3 cents per share (FY2023: 6.9 cents per share). • The Company was pleased to pay a fully franked Final 2024 dividend of 3.71 cents per share on Thursday, 24 April 2025. • Including the April 2025 dividend, a total of 48.7 cents per share in dividends has been paid to shareholders since November 2017. • The Company has continued offering its Dividend Reinvestment Plan, allowing eligible shareholders to receive new shares in the Company at a 5% discount to the 5-day VWAP prior to and including the Record Date. 12 Duxton Water Limited | FY2024 Annual General Meeting Portfolio Performance ANNUAL GENERAL MEETING Portfolio Performance Strategic transactions remained the primary focus for portfolio expansion and rebalancing in FY2024. WATER PORTFOLIO CHANGE IN VALUE (5 YEARS)* $450 $400 $350 $37 $13 $2 $392 • The entitlement market experienced mixed conditions over the year, with the Ricardo Entitlement Index (“REI”) declining in the first half of 2024 before recovering in the second half. Overall, the REI ended the year marginally higher, recording a gain of less than 1%. $20 $335 -$15 $300 $250 • During FY2024, the Company sold 2,799 ML of NSW 11 high security entitlements for approximately $25.2 million. This related to the acquisition and leaseback that was announced on 3 July 2023. The Company realised a significant profit from this sale. $200 $150 $100 • Contracted $19 million of water entitlement acquisitions towards the end of 2024. These acquisitions settled in early 2025 and will enhance portfolio diversification and increase flexibility amid evolving climate conditions. $50 $Dec-19 2020Δ 2021Δ 2022Δ 2023Δ 2024Δ Dec-24 *Changes in portfolio value reflect net Fair Market Value movements in the water portfolio each year. Fair Market Value is calculated in line with the Company’s monthly NAV statement. It is a non-IFRS measure and is not reviewed or audited by the Company’s auditor. 14 • The Company has continued to focus on expanding and rebalancing its portfolio through strategic sales and acquisitions. Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Portfolio Diversification Diversification remains a strategic focus, providing stability and hedging through variable weather conditions. WATER PORTFOLIO DIVERSIFICATION WATER SECURITY BREAKDOWN ENTITLEMENT VALUE BY REGION • The Company remains committed to maintaining a diversified portfolio with the intention of providing shareholders with balanced returns across various climatic scenarios. • With wetter conditions persisting into early 2024, the Company's general security entitlements delivered above average returns, reinforcing the importance of portfolio diversification. • Lease yields have exceeded spot yields on high security assets for the last 3-4 years. This has resulted in the lease portfolio providing a significant pricing hedge against persistent lower allocation prices. • The Company actively monitors water markets for opportunities that complement its existing portfolio holdings. 15 Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Lease Portfolio Demand for leases starting 1 July 2025 has continued to increase over the last 6 months as irrigators look to the years ahead. 5-YEAR LEASING REVENUE (MILLIONS) $10.0 $9.0 $8.9 • The Company’s leasing revenue for FY2024 totalled $7.0 million (FY2023: $7.9 million), with 37% of its portfolio locked into long-term leases at 31 December 2024 (31 December 2023: 60%). $9.2 $8.2 $7.9 $8.0 $7.0 • This revenue stream was a key driver of D2O’s financial performance for the year, highlighting the strength of the Company’s long-term agreements. Millions $7.0 $6.0 $5.0 • Throughout the year, the Company actively engaged with its customer base to renew or extend expiring lease agreements. While demand for long-term water leases was below average in the first half of 2024, interest in leases commencing on 1 July 2025 has increased over the last 6 months. $4.0 $3.0 $2.0 $1.0 • Long-term water leases provide D2O with visibility to future revenue at the same time as providing enhanced water security to lessees. $0.0 2020 16 2021 2022 2023 2024 Lease Portfolio FY2024 FY2023 Difference % Change Lease revenue $7.0m $7.9m -$0.9 -11% Leased % 37% 60% -23% -38% Weighted Average Lease Expiry 2.8 yrs 3.1 yrs -0.3 yrs -10% Duxton Water Limited | FY2024 Annual General Meeting Lease Portfolio – From 1 July 2025 • In early 2025, the Company secured several new lease agreements to commence 1 July 2025, with both new and existing customers. Based on these contracts and 30 April 2025 independent valuations, the Company expects to have approx. 52% of the portfolio leased at the start of the new water year. • Ongoing discussions with customers may result in additional leases, which could further increase the leased percentage for the upcoming water year. ANNUAL GENERAL MEETING Sale of water entitlements to the Australian Government (March 2025) On 6th March 2025, the Company announced it had executed an agreement to sell $121.3 million of water entitlements at a premium to fair market value. • $121.3 million sale – sale of 30,614 megalitres of water entitlements to the Australian Government to support environmental river flows. • Premium to NAV – the sale was executed at a premium to fair market value and was reflected in the Company’s March 2025 Monthly Update (released on 4 April 2025). • Portfolio impact – sale includes 3,010 ML of High Security (NSW), 13,114 ML of High Reliability (Victoria), and 14,491 ML of General Security (NSW) water entitlements. • Strategic alignment and rebalancing – the transaction supports the Federal Government’s ‘Restoring Our Rivers Act’ to recover 450GL of water and improve environmental outcomes in the Murray-Darling Basin, while allowing D2O to strategically rebalance its portfolio. • Enhanced balance sheet flexibility – proceeds received in May 2025 have been used to reduce the Company’s debt facility by $108 million, with the remaining cash being used to settle upcoming tax obligations related to the sale, and other operating expenses. Further information can be found in the Company’s initial announcement. On 15 May 2025, the Company announced the transaction had settled. 17 Duxton Water Limited | FY2024 Annual General Meeting Outlook ANNUAL GENERAL MEETING Trading Update (January 2025 - April 2025) The Company’s share price has increased by 17.4% in the two months to 30 April 2025. DUXTON WATER PERFORMANCE - SINCE INCEPTION • Positive Start: Company’s second strongest start to a financial year since 2019. Recording an 11.6% NAV return in the first four months of the 2025 financial year. • Weather Conditions: Dry weather conditions persist across large areas of the southern Murray Darling Basin, leading to reduced daily river inflows and lower dam storage levels when compared to the previous 3-4 years. • Increasing Yields: Reduced supply of water and increasing demand for longterm water security from irrigators has driven a recent uplift in yields on the Company’s high security water assets. • Reduced Discount: Following the recent announcement of the water entitlement sale to the Government and the Proposed Internalisation, the Company’s share price discount to NAV narrowed to 7% at 30 April 2025. This is down from 17% at the end of February 2025, prior to these announcements. 1.90 1.66 1.65 $ PER SHARE • Sale of Entitlements: This positive result reflects recent uplift in entitlement valuations, alongside the sale of $121.3 million of water entitlements to the Australian Government at a premium to fair market value. NAV @ 30 April 2025 1.55 1.40 Share Price @ 30 April 2025 1.15 0.90 NAV per Share Portfolio Performance* Total NAV Return (to 30 Apr-25) Share Price 3 Months 6 Months 12 Months Inception Annualised 10.9% 13.6% 14.1% 119.4% 9.5% *These figures are based on NAV movements and include franked dividends for the period. 19 Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Dam Storage Levels Murray Darling Basin major dam storages are significantly lower when compared to the previous few years. Major Dam Storages Apr-2021 Apr-2022 Apr-2023 Apr-2024 Apr-2025 Dartmouth (Murray) 64% 93% 96% 94% 78% Hume (Murray) 43% 86% 91% 62% 23% Lake Eildon (Goulburn) 57% 77% 94% 92% 62% Blowering (Murrumbidgee) 82% 94% 85% 66% 32% Burrinjuck (Murrumbidgee) 78% 96% 79% 72% 43% Menindee Lakes (Darling) 29% 109% 83% 50% 34% Weighted Average 57% 90% 90% 77% 50% RAINFALL DECILE CHART (SUMMER 2024/2025) DECEMBER 2024 – FEBRUARY 2025 Source: Dataset from Murray-Darling Basin Authority. • Murray Darling Basin major dam storages are at their lowest levels for the end of April, since 2020. This demonstrates the significant shift seen in weather patterns over the last 12 months, following a very wet 36-month period. • Lower dam storage levels typically result in less water allocations being awarded to water entitlements. This has historically constrained annual water availability. 20 Duxton Water Limited | FY2024 Annual General Meeting Source: The Bureau of Meteorology ANNUAL GENERAL MEETING Dam Storage Inflows Inflows to major dam storages since 1 July 2024 have tracked well-below their long-term averages. • Inflows into major dam storages have remained well below average since mid-2024. Daily Inflows to Murray Darling Basin Storages (July 2022 to April 2025) • This decline in dam storage levels has been driven by significantly drier conditions seen across the southern Murray-Darling Basin over the last 9-12 months. • Inflows over the next 6 months will be crucial for dam storages heading into summer 2025/2026. This may influence spot prices for next season. • Chart interpretation: the yellow line represents what inflows look like in an extremely wet year (2022/2023), the blue line represents an average year (2023/2024), and the green line represents a dry year (2024/2025). The dotted line represents the long-term average daily inflows to storages. Source: Prepared by Ricardo (2025) 21 Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Allocation Market Update Drier conditions and lower allocation determinations tend to increase spot and lease prices. • Average allocation prices in the southern Murray-Darling Basin reached a peak of approximately $800/ML in late 2019, following a period of prolonged dry conditions. Water allocation prices in several zones exceeded $1,000/ML. Monthly southern MDB allocation price (July 2017 to April 2025) 1 Source: Ricardo (2025) ~$800/ML • Allocation prices have declined substantially from their 2019 peaks, driven by three to four consecutive wet years. Throughout most of FY2025, prices traded around $150-$200/ML. However, by May 2025, allocation prices in the Lower Murray increased to over $300/ML. Trending upwards in May 2025 • Historical data indicates a correlation between dry periods and elevated allocation prices, while wet periods have generally resulted in lower prices. • Limited inflows to dam storages over winter may continue to strain water availability. This may have a significant influence on water allocation prices for next season (2025/2026). • Allocation prices tend to reflect increased sensitivity to weather patterns and water availability, reinforcing the Company’s belief of the strategic importance of portfolio diversification and water security. Wet Dry Wet Dry 1. Average of allocation prices across all major southern Murray-Darling Basin zones (Upper Murray, Lower Murray, Goulburn, & Murrumbidgee). 22 Duxton Water Limited | FY2024 Annual General Meeting • The Company believes that the recent rise in water allocation prices has been a key factor driving increased demand for leases over the past six months. ANNUAL GENERAL MEETING Water Entitlement Market Update Water is a defensive asset class with a proven track record of strong performance over the last 10-15 years. RICARDO WATER ENTITLEMENT PRICE INDEX (“REI”) • Water as an asset class has continued to generate strong capital returns over the last 10-15 years, increasing by an average of 7% p.a. since 2007, and 9% p.a. since 2016. • Water entitlements have demonstrated strong price resilience through broader market cycles, underpinned by uncorrelated fundamentals when compared to traditional asset classes, strong agricultural demand, and a structurally limited supply base. • The long-term capital growth of water entitlements has been supported by structural shifts in Australian agriculture, including a transition to higher-value water-dependent crops, such as tree nuts, grapes, and citrus. 400 350 7% CAGR since 2007 343 9% CAGR since 2016 300 250 200 150 100 50 Shift to High Value Crops 0 Source: Dataset from (Ricardo). Prepared by Duxton Capital. 23 Duxton Water Limited | FY2024 Annual General Meeting 30 April 2025 ANNUAL GENERAL MEETING Weather Outlook driersuggest outlook by suggest by the is also supported by sthe BOM’s expected long-term The drierThe outlook the ENSO, is ENSO, also supported by the BOM’ expected long-term rain and temperature forecasts. rain and temperature forecasts. Duxton Water will continue to work with irrigators to provide water security and flexibility throughout the climate cycle. • The Bureau of Meteorology forecasts above-average rainfall across much of inland Australia from June to August 2025, while parts of southern and eastern Australia may experience average to below-average rainfall. • Above-average temperatures are expected across most of the country over the same period. CHANCE OF EXCEEDING THE MEDIAN RAINFALL FOR JUNE TO AUGUST 2025 • ENSO conditions are forecast to remain neutral through to at least October 2025, consistent with all major international climate models. Neutral ENSO phases typically have limited influence on Australian rainfall. • The Indian Ocean Dipole (“IOD”) is expected to remain neutral through July, with a potential shift towards a negative IOD later in the season, which is historically associated with increased winter–spring rainfall across parts of Australia. CHANCE OF EXCEEDING THE MEDIAN MAXIMUM TEMPERATURE FOR JUNE TO AUGUST 2025 24 Duxton Water Limited | FY2024 Annual General Meeting 1. Bureau of Meteorology - Long-range forecast – issued 22 May 2025. 2. Bureau of Meteorology - Climate Driver Update - Issued 20 May 2025 3. Bureau of Meteorology - Southern hemisphere monitoring – issued 20 May 2025 Internalisation Proposal ANNUAL GENERAL MEETING Internalisation Overview Positioning the Company for Long-Term Growth • On 4 April 2025, the Company announced a proposal to internalise its management team and operational functions, effective 1 June 2025. • The proposed internalisation reflects the maturity of the business and provides structural certainty as the initial 10-year term of the Company’s Investment Management Agreement (“IMA”) nears expiry in July 2026. • Subject to shareholder approval, the IMA will terminate early, removing ongoing external management and performance fees, providing the Company with greater oversight of its personnel and operations. • Duxton Capital Australia (“DCA”) will provide transitional services to D2O for up to 18 months to allow access to systems, and to support a seamless handover of operations, intellectual property, and personnel. • Portfolio Managers Lachlan Campbell and Lachlan Beech will transition to become direct employees of Duxton Water from 1 June 2025. Mr Campbell and Mr Beech are expected to become key management personnel of D2O upon completion of the internalisation. • Mr Brendan Rinaldi will assume the role of Independent Chair from 1 June 2025. Mr Rinaldi will succeed Mr Edouard Peter who has been the Company’s Chair since 2016. ASX Announcement - 4 April 2025 26 Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Strategic Rationale Alignment, Oversight, and Efficiency • The Company has reached operational scale, with internal resources and leadership capable of efficiently and effectively managing the business under an internalised management structure. • Provides the Company with direct oversight of management and will allow the Board to better oversee performance, manage succession, and design incentive structures to allow a stronger alignment of interests between the Company and its management team. • Transitioning to an internally managed structure provides shareholders and the Company with greater long-term certainty as it removes the requirement to seek shareholder approval to renew the IMA at the expiry of each term. • The Board expects the ongoing annual costs of an internal management structure to be lower than the current fees paid to the Investment Manager (management fees & admin fees). This is expected to deliver annual cost savings, based on the Company's current operations and size. • The proposal represents a strategic evolution of the Company’s operating structure. Having successfully navigated its early growth phase, an internalised model will better support sustainable long-term growth. 27 Duxton Water Limited | FY2024 Annual General Meeting ANNUAL GENERAL MEETING Transitional Services Agreement Maintaining Operational Continuity During the Transition • The TSA provides continuity of critical functions during the internalisation process, ensuring that operational, financial, and compliance services remain uninterrupted while internal capabilities are established. • The TSA has been entered into with DCA to ensure a smooth and orderly transition. D2O does not have any systems, intellectual property, or personnel, so access to these resources that are owned and managed by DCA during the transitional period is essential. • The Independent Directors are of the view that this agreement materially reduces the execution risk associated with the internalisation process, providing the Company with both additional resources and time to establish the necessary internal capabilities. • The agreement enables a phased transfer of knowledge, systems, and intellectual property, with continued oversight from Ed Peter and Stephen Duerde