MEMO

Date: October 22, 2019

By: Chris Little, Director Finance

Re: Unrealized Gains on Investment – Fund Closing

The purpose of this memo is to clarify the treatment of booked unrealized gains/losses on investment on a fund when that fund is closing.

MakeWay investments are based on pooled funds from different long-term funds and excess Operations working capital. On a monthly basis, funds get allocated their share of interest, dividend, realized gain, unrealized gain and management fee.

In a situation where a DAF closes but no pooled funds are liquidated from the portfolio any unrealized gains/losses associated with that fund are not actually realized. Upon closing of the fund, any outstanding balance recorded under unrealized gain/loss will be reversed and will not form part of the available balance for the funder to grant. The balance that is available to the funder is the outstanding book balance plus/minus any share on the realized gains/losses on the proceeds of the termination of investment.

Below are the sample entries to be made upon closing of the fund;