Dear Investor

The Basis Aust-Rim Diversified Fund ("Fund") predominantly invests all of its cash into the Basis Pac-Rim Opportunity Fund ("BPROF") which has an indirect exposure to the Basis Yield Alpha Fund ("BYAF").

As Responsible Entity ("RE") for the Fund, Basis Capital Funds Management Limited ("BCFML") yesterday received the attached communication from the Directors of the BYAF regarding the current state of the Basis Yield Alpha Master Fund ("BYAMF") into which the BYAF predominantly invests all of its cash and which is currently in provisional liquidation with certain representatives of Grant Thornton acting as Joint Provisional Liquidators ("JPLs").

Additionally, the letter outlines the intention of the JPLs and the Directors regarding the future of the BYAMF. Naturally, we are disappointed with the overall outcome but support the decision of the JPLs and the Directors of the BYAFF as being the means by which this matter can be expedited on behalf of all investors in the fund.


Yours Sincerely

Basis Capital Funds Management Limited