SQN SECURED INCOME FUND PLC (Registered number ) HALF-YEARLY REPORT AND UNAUDITED CONDENSED FINANCIAL STATEMENTS

SQN SECURED INCOME FUND PLC (Registered umber 09682883) HALF-YEARLY REPORT AND UNAUDITED CONDENSED FINANCIAL STATEMENTS For the six moths eded 31 December 2017

CONTENTS Page Strategic Report Highlights 3 Chairma s Statemet 4 Ivestmet Maager s Report 5 Compay Aalytics as at 31 December 2017 6 Goverace Statemet of Directors Resposibilities 8 Uaudited Codesed Fiacial Statemets Statemet of Comprehesive Icome 9 Statemet of Chages i Equity 10 Statemet of Fiacial Positio 13 Statemet of Cash Flows 14 Notes to the Half-Yearly Fiacial Statemets 15 Directors ad Advisers 33

STRATEGIC REPORT HIGHLIGHTS 31 DECEMBER 2017 NET ASSETS [1] 51,893,000 (uaudited 31 December 2016: 52,932,000) (audited 30 Jue 2017: 52,048,000) DIVIDEND PER SHARE DECLARED IN RESPECT OF THE PERIOD [2] 3.15p (uaudited 31 December 2016: 3.60p) (audited 30 Jue 2017: 6.375p) NAV PER ORDINARY SHARE 98.45p (uaudited 31 December 2016: 100.42p) (audited 30 Jue 2017: 98.74p) TOTAL RETURN PER ORDINARY SHARE (BASED ON NAV) +2.9% (uaudited 31 December 2016: +2.7%) (audited 30 Jue 2017: +4.6%) SHARE PRICE 93.625p (uaudited 31 December 2016: 93.50p) (audited 30 Jue 2017: 97.75p) TOTAL RETURN PER ORDINARY SHARE (BASED ON SHARE PRICE) -1.0% (uaudited 31 December 2016: +8.2%) (audited 30 Jue 2017: +16.0%) DISCOUNT TO NAV 4.9% (uaudited 31 December 2016: 6.9%) (audited 30 Jue 2017: 1.0%) ORDINARY SHARES IN ISSUE 52,660,350 (uaudited 31 December 2016: 52,660,350) (audited 30 Jue 2017: 52,660,350) PROFIT FOR THE PERIOD 1,503,000 (uaudited 31 December 2016: 1,428,000) (audited 30 Jue 2017: 2,440,000) [1] I additio to the Ordiary Shares i issue, 50,000 Maagemet Shares of 1 each are i issue (see ote 20). [2] Oly 2.10p of the 3.15p per Ordiary Share divideds declared out of the profits for the period eded 31 December 2017 had bee deducted from the 31 December 2017 NAV as the divideds of 0.525p per Ordiary Share each, which were declared o 21 December 2017 ad 19 Jauary 2018, had ot bee provided for at 31 December 2017 as, i accordace with IFRS, they were ot deemed to be liabilities of the Compay at that date. O 20 February 2018, the Compay declared a divided of 0.525p per Ordiary Share for the period from 1 Jauary 2018 to 31 Jauary 2018. This divided will be paid o 23 March 2018. SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS 3

STRATEGIC REPORT CHAIRMAN S STATEMENT Itroductio I am pleased to update Shareholders with this iterim statemet for SQN Secured Icome Fud plc (the Compay or SSIF ), coverig the period from 1 July 2017 to 31 December 2017. The last six moths have bee more productive ad more settled tha recet times. SQN Asset Maagemet Limited took over the maagemet of the Compay o 1 April 2017 ad has made good progress i achievig the Board s strategic goal of rebalacig the portfolio away from ivestmet platforms ad towards direct loas. Performace ad Markets For the reportig period eded 31 December 2017, the Compay geerated a et profit of 1.5 millio ad earigs per ordiary share of 2.85p. The Compay s NAV at 31 December 2017 was 51.8 millio (98.45p (cum icome) per ordiary share) compared with 52.0 millio o a similar basis as at 30 Jue 2017. The total retur for the reportig period was 2.9%. Direct loas have icreased ad ow represet 36% of the portfolio ad I am delighted to ote that the pipelie of trasactios ad the maturity profile of our platform loas are both cosistet with the plaed strategy to reduce platform exposure to 20% of the overall portfolio. Foreig exchage exposure o the 22.5% of o-sterlig loas was fully hedged ad ay liquidity calls arisig from the hedgig strategy are cosidered comfortably maageable withi the Compay s cash flow. Earigs ad Divideds Divideds per ordiary Share for the reportig period were 3.15p (see ote 5). The Board elected to desigate all divideds for the period eded 31 December 2017 as iterest distributios to Shareholders. I doig so, the Compay took advatage of UK tax treatmet by streamig icome from iterest-bearig ivestmets ito divideds that will be taxed i the hads of Shareholders as iterest icome. The Board iteds to distribute at least 85% of the Compay s distributable icome by way of divideds o a mothly basis. Durig ay year the Compay may retai some of the distributable icome as a loss reserve to smooth future divided flows. The Board expects the Compay to achieve its aual fully covered divided target of 6.25p by the year-ed, risig to 7.00p thereafter. Discout For the reportig period, the Compay traded at a average discout to NAV of 2.4%. The directors would prefer to see the Compay s shares trade at a premium to et asset value ad we believe this is warrated give the progress made i reducig platform loa exposure coupled with the very low default ad impairmet performace. Board of Directors I am pleased to report that we have appoited a fourth director to the Board. Gay Coley is a chartered accoutat with cosiderable busiess experiece icludig holdig posts as the fiace director of the Uiversity of Plymouth ad Chief Executive of the Ede Project i Corwall. She is curretly a o-executive director ad chair of the audit committee of the Lowlad Ivestmet Trust plc. This appoitmet stregthes our capability as a board ad we welcome Gay s hads o experiece i maagemet ad fiace. Outlook The Ivestmet Maager s focus remais o Europe ad the US ad it will cotiue to ratioalise both the umber of platforms ad the holdigs withi them while icreasig ivestmet i secured direct ledig. The outlook for direct ledig opportuities remais very promisig with iterest rates stable, albeit likely slowly to icrease. The Board s strategy remais i lie with the Compay s ivestmet guidelies our goal is to produce a stable icome stream for our Shareholders from a diversified portfolio of loas to SME busiesses. RICHARD HILLS Chairma 15 March 2018 4 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS

STRATEGIC REPORT INVESTMENT MANAGER S REPORT SQN Secured Icome Fud plc is a ivestmet compay listed o the Lodo Stock Exchage ad domiciled i the Uited Kigdom. It ivests o a largely secured basis, both directly ad idirectly through ivestmet platforms, i small ad medium sized compaies i the Uited Kigdom ad the rest of the world usig fudametal credit skills to assess potetial opportuities. The Compay s objective is to deliver regular icome ad a attractive overall retur to ivestors through a diverse portfolio of collateralized ivestmets. I the ie moths sice SQN Asset Maagemet Limited ( SQN or the Maager ) has had resposibility for maagig the portfolio, we are pleased to report that we cotiue to make meaigful progress uder the revised ivestmet guidelies. Specifically, we have reduced the Compay s usecured positios, we have exited certai platform relatioships which we did ot believe met our more rigid uderwritig stadards, ad reegotiated terms o other platform ivestmets i order to ehace the level of security ad/or returs o ivestmet. I additio to the above ad most sigificatly, we have icreased direct secured ivestmets. Ivestmets origiated directly by the Maager have a higher degree of trasparecy, come with reduced itermediary costs, ad are structured to maximize the security positio ad access to collateral. Cetral to our ivestmet process is the applicatio of a disciplied ad traditioal credit uderwritig approach to all assets i the portfolio. We believe this is the oly appropriate method to ivest i this asset class ad we believe by doig so, very attractive portfolios ca be costructed to deliver the Compay s ivestmet objective. As Maager, we are cofidet that this ivestmet strategy is highly scalable. We are curretly experiecig a great deal of demad that caot be met by the curret size of the Compay. It remais our goal to support the Board i growig the Compay to a multiple of today s size over the ext few years. The Compay s shares cotiue to trade at a discout, which is a cosistet theme across the sector. However, we expect that followig a exteded period of positive performace ad a growig awareess of the attractiveess of our strategy ivestor ethusiasm may lead to a higher share price ad subsequet capital raisigs. Progress Durig the period covered by this iterim report, we have achieved the followig: Cotiued reivestmet of available cash i directly origiated loas. Direct loas ow represet 36% of the portfolio, a icrease of 5% sice Jue 2017. Impairmets are circa 1%, sigificatly lower tha the sector average. Whe appropriate, SQN has re-traded loas with existig platforms, providig further opportuity for the Compay to icrease direct loa exposure. Performace of platform ivestmets has, with a few exceptios, remaied cosistet ad we have repositioed asset allocatio i favour of those platforms that we cosider have the strogest credit ad origiatio capability combied with acceptable pricig parameters. Cash levels have bee reduced to a practical miimum ad excess cash has bee committed to ew direct ivestmets. Risk maagemet remais a key focus for the ivestmet maagemet team ad we have spet sigificat time o improvig risk reportig. The KID was successfully published before the regulatory year ed deadlie ad although IFRS 9 reportig is ot due util the fiacial year commecig o 1 July 2018, plaig for this evet is well uder way. All ew uderwritig has bee made at rates betwee 9.5% ad 11.5%, sufficiet to icrease overall portfolio yield to meet the retur target of 8.0% per aum. our bakig arragemets have bee reorgaised ad the Compay has moved its priciple bakig relatioship to Royal Bak of Scotlad Iteratioal Limited. Upo our appoitmet o 1 April 2017, we agreed that the previous ivestmet maager, Amberto Asset Maagemet Limited, would act as our sub-maager for a period of 12 moths. We have exteded this cotract for a further two moths but will assume total cotrol of the ivestmet maagemet for the portfolio from 1 Jue 2018. The cotiuity ad smooth trasitio that was aticipated by this iterim arragemet has worked well for all parties. Ivestmet Outlook We cotiue to see a sigificat demad for borrowig from the SME sector i the UK, Europe ad the US at both attractive iterest rates ad uder terms suitable for ivestmets by the Compay. We cosider this eviromet presets a very strog opportuity to the Compay. We expect the dyamics of the alterative fiace sector to chage i the medium term, as the first cycle of refiacig deals start to take place ad the poor quality of some previous credit uderwritig becomes apparet, evideced by published default ad impairmet data. We aticipate that there will be a wideig of the performace achieved betwee sector participats. We also evisage that cosolidatio withi the sector will accelerate. The stroger compaies, backed by their shareholders ad with more robust risk ad credit maagemet processes, are likely to grow at the expese of the poorly performig fuds largely through corporate activity. We moitor the sector closely, i both private ad public markets ad remai alert to opportuities as they arise. DAWN KENDALL Maagig Director SQN Asset Maagemet Limited 15 March 2018 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS 5

STRATEGIC REPORT COMPANY ANALYTICS as at 31 December 2017 ASSET ALLOCATION SECURED VS NON-SECURED SME Loa 75.2% Property 8.9% Reewable Eergy 2.1% Platform/Workig Cap 0.0% IT Fiace 5.0% Accrued Icome 2.1% Cash 6.7% Secured 93.3% No-Secured 6.7% FUND YIELD VS BENCHMARK INTEREST RATES PORTFOLIO BY GEOGRAPHY PORTFOLIO BY MATURITY BAND 80 70 60 69.8% 50 40 39.7% 50 40 30 20 10 12.9% 7.2% 10.1% 30 20 10 15.6% 26.0% 18.7% 0 UK US Offshore Britai* *Offshore Britai, Chael Islads, Gibraltar & Isle of Ma Europe 0 0 to 6 moths 6 moths to 18 moths 18 moths to 3 years >3 years PORTFOLIO EXPOSURE BY PLATFORM 35 30 25 20 15 10 5 0 BMS UK 28.8% SQN 27.9% BMS IRE 8.2% Sacus 7.2% Cash at bak 6.4% FudigKight 5.7% UKBodNetwork 5.6% Liftforward 5.0% Propled 2.2% Accrued iterest 2.1% MytripleA 0.9% All data source: SQN Asset Maagemet Limited, data as at 31 December 2017. 6 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS

STRATEGIC REPORT COMPANY ANALYTICS (CONTINUED) as at 31 December 2017 PERFORMANCE AND DIVIDEND HISTORY Iceptio Ja Feb Mar Apr May Ju Jul Aug Sep oct Nov Dec to date NAV per share 2015 1.46% 0.64% -0.43% 1.75% total retur, 2016 1.12% 0.42% 0.57% 0.05% 0.55% 0.74% 0.52% 0.57% 0.60% 0.51% 0.27% 0.09% 15.04% icludig icome* 2017 0.36% 0.31% 0.40% 0.23% 0.35% 0.13% 0.68% 0.31% 0.39% -0.10% 0.57% 0.73% 2018 0.30% Divided per 2015 0.60p share** 2016 0.40p 0.55p 0.55p 0.55p 0.55p 0.55p 0.60p 0.60p 0.60p 0.60p 0.60p 0.60p 14.65p 2017 0.60p 0.60p 0.60p 0.60p 0.676p 0.525p 0.525p 0.525p 0.525p 0.525p 0.525p 0.525p 2018 0.525p Share price 2015 2.25% 0.00% 0.00% -0.73% performace*** 2016-1.97% -3.02% -0.78% 0.78% -0.52% -6.51% 2.79% 2.98% 1.05% 0.00% -2.08% -0.53% -7.50% 2017-0.26% -2.41% 6.32% 1.55% -0.51% 0.00% -0.51% 0.00% -0.77% -0.78% -0.26% -1.83% 2018-1.33% * Per ordiary Share excludig set-up costs ** Per ordiary Share *** Source Bloomberg NAV VS.SHARE PRICE 119 NAV/share price per share (pece) 114 109 104 102.25 100.00 99 98.12 94 89 Iceptio Sep 15 99.75 102.64 100.90 Nov 15 Ja 16 96.50 103.71 Mar 16 96.00 101.31 89.75 May 16 105.61 95.00 Jul 16 101.30 107.39 Sep 16 94.00 100.42 Nov 16 108.16 Ja 17 96.75 91.00 99.77 109.17 Mar 17 99.13 97.75 May 17 NAV per share NAV total retur excludig set-up costs Share price 110.44 98.99 97.25 Jul 17 111.22 98.69 95.75 Sep 17 98.05 Nov 17 112.88 98.26 92.50 Ja 18 All data source: SQN Asset Maagemet Limited, data as at 31 December 2017. SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS 7

GOVERNANCE STATEMENT OF DIRECTORS RESPONSIBILITIES The Directors are resposible for preparig the half-yearly report ad codesed fiacial statemets, which have ot bee audited or reviewed by a idepedet auditor, ad are required to: prepare the codesed half-yearly fiacial statemets i accordace with Iteratioal Accoutig Stadard 34: Iterim Fiacial Reportig, as adopted by the Europea Uio, which give a true ad fair view of the assets, liabilities, fiacial positio ad profit for the period of the Compay, as required by Disclosure ad Trasparecy Rules ( DTR ) 4.2.4 R; iclude a fair review of the iformatio required by DTR 4.2.7 R, beig importat evets that have occurred durig the period ad their impact o the half-yearly report ad codesed fiacial statemets ad a descriptio of the pricipal risks ad ucertaities for the remaiig six moths of the fiacial year; ad iclude a fair review of iformatio required by DTR 4.2.8 R, beig related party trasactios that have take place durig the period which have had a material effect o the fiacial positio or performace of the Compay. The Directors cofirm that the half-yearly report ad codesed fiacial statemets comply with the above requiremets. o behalf of the Board. RICHARD HILLS Chairma 15 March 2018 8 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS

UNAUDITED CONDENSED STATEMENT OF COMPREHENSIVE INCOME for the six moths eded 31 December 2017 Period from Period from 1 July 2017 to 1 July 2016 to Year eded 31 December 2017 31 December 2016 30 Jue 2017 (uaudited) (uaudited) (audited) Note 000 000 000 Icome Ivestmet icome 2,363 2,601 4,462 other icome 2 4 Total reveue 2,365 2,601 4,466 Operatig expeses Maagemet fees 7a (262) (187) (408) other expeses 10 (96) (119) (209) Broker fees (80) (33) (119) Admiistratio fees 7b (60) (69) (144) Directors remueratio 8 (54) (75) (128) Legal ad professioal fees (53) (54) (172) Trasactio fees (23) Total operatig expeses (628) (537) (1,180) Ivestmet gais ad losses Movemet i urealised (loss)/gai o loas 14 (254) 286 (718) Movemet i urealised gai o ivestmets at fair value through profit or loss 15 20 (45) (193) Movemet i urealised gai o ivestmet i subsidiary (677) Movemet i urealised gai o derivative fiacial istrumets 17 (141) 37 127 Realised (loss)/gai o disposal of loas (40) (12) 782 Realised gai o disposal of ivestmets at fair value through profit or loss 85 260 Realised gai o disposal of subsidiary 673 Realised gai/(loss) o derivative fiacial istrumets 17 227 (1,022) (1,008) Total ivestmet gais ad losses (188) (671) (754) Net profit from operatig activities before (loss)/gai o foreig currecy exchage 1,549 1,393 2,532 Net foreig exchage (loss)/gai (46) 35 (87) Net profit before taxatio 1,503 1,428 2,445 Taxatio Corporatio tax 11 (5) Profit ad total comprehesive icome for the period/year attributable to the owers of the Compay 1,503 1,428 2,440 Earigs per Ordiary Share (basic ad diluted) 12 2.85p 2.71p 4.63p All of the items i the above statemet are derived from cotiuig operatios. There were o other comprehesive icome items i the period/year. Except for urealised ivestmet gais ad losses, all of the Compay s profit ad loss items are distributable. The accompayig otes o pages 15 to 32 form a itegral part of the uaudited codesed half-yearly fiacial statemets. SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS 9

UNAUDITED CONDENSED STATEMENT OF CHANGES IN EQUITY for the six moths eded 31 December 2017 Special Called up distributable Profit ad share capital reserve loss accout Total Uaudited Note 000 000 000 000 At 1 July 2017 577 50,942 529 52,048 Profit for the period 21 1,503 1,503 Trasactios with Owers i their capacity as owers: Divideds paid 5, 21 (1,658) (1,658) Total trasactios with owers i their capacity as owers (1,658) (1,658) At 31 December 2017 577 50,942 374 51,893 10 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS

UNAUDITED CONDENSED STATEMENT OF CHANGES IN EQUITY for the six moths eded 31 December 2016 Special Called up distributable Profit ad share capital reserve loss accout Total Uaudited Note 000 000 000 000 At 1 July 2016 577 50,942 1,881 53,400 Profit for the period 21 1,428 1,428 Trasactios with Owers i their capacity as owers: Divideds paid 5, 21 (746) (1,150) (1,896) Total trasactios with owers i their capacity as owers (746) (1,150) (1,896) At 31 December 2016 577 50,196 2,159 52,932 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS 11

AUDITED STATEMENT OF CHANGES IN EQUITY for the year eded 30 Jue 2017 Special Called up distributable Profit ad share capital reserve loss accout Total Audited Note 000 000 000 000 At 1 July 2016 577 50,942 1,881 53,400 Profit for the year 21 2,440 2,440 Trasactios with Owers i their capacity as owers: Divideds paid 5, 21 (3,792) (3,792) Total trasactios with owers i their capacity as owers (3,792) (3,792) At 30 Jue 2017 577 50,942 529 52,048 There were o other comprehesive icome items i the period/year. The above amouts are all attributable to the owers of the Compay. The accompayig otes o pages 15 to 32 form a itegral part of the uaudited codesed half-yearly fiacial statemets. 12 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS

UNAUDITED CONDENSED STATEMENT OF FINANCIAL POSITION as at 31 December 2017 31 December 31 December 30 Jue 2017 2016 2017 (uaudited) (uaudited) (audited) Note 000 000 000 No-curret assets Loas at amortised cost 14 39,684 26,042 32,450 Ivestmets at fair value through profit or loss 15 278 1,547 258 Total o-curret assets 39,962 27,589 32,708 Curret assets Loas at amortised cost 14 7,748 17,761 7,008 Cash held o cliet accouts with platforms 14 149 1,059 1,144 Ivestmet i subsidiary 13 41,088 Derivative fiacial istrumets 17 9 60 150 other receivables ad prepaymets 18 1,159 824 733 Cash ad cash equivalets 3,343 6,015 13,376 Total curret assets 12,408 66,807 22,411 Total assets 52,370 94,396 55,119 Curret liabilities Amout due to subsidiary 13 (41,088) other payables ad accruals 19 (477) (376) (3,071) Total liabilities (477) (41,464) (3,071) Net assets 51,893 52,932 52,048 Capital ad reserves attributable to owers of the Compay Called up share capital 20 577 577 577 other reserves 21 51,316 52,355 51,471 Equity attributable to the owers of the Compay 51,893 52,932 52,048 Net asset value per Ordiary Share 22 98.45p 100.42p 98.74p These uaudited codesed half-yearly fiacial statemets of SQN Secured Icome Fud plc (registered umber 09682883) were approved by the Board of Directors o 15 March 2018 ad were siged o its behalf by: RICHARD HILLS KEN HILLEN Chairma Director 15 March 2018 15 March 2018 The accompayig otes o pages 15 to 32 form a itegral part of the uaudited codesed half-yearly fiacial statemets. SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS 13

UNAUDITED CONDENSED STATEMENT OF CASH FLOWS for the six moths eded 31 December 2017 Period from Period from 1 July 2017 1 July 2016 Year eded to 31 December to 31 December 30 Jue 2017 2016 2017 (uaudited) (uaudited) (audited) 000 000 000 Cash flows from operatig activities Net profit before taxatio 1,503 1,428 2,445 Adjustmets for: Movemet i urealised loss/(gai) o loas 254 (286) 718 Movemet i urealised gai o ivestmet at fair value through profit or loss (20) 45 193 Movemet i urealised gai o ivestmet i subsidiary 677 Movemet i urealised gai o derivative fiacial istrumets 141 (37) (127) Realised loss/(gai) o disposal of loas 40 12 (782) Realised gai o disposal of ivestmets at fair value through profit or loss (85) (260) Realised gai o disposal of subsidiary (673) Realised (gai)/loss o derivative fiacial istrumets (227) 1,022 1,008 Amortisatio of trasactio fees 23 Iterest received ad reivested by platforms (320) (1,010) (1,596) Capitalised iterest (47) (Icrease)/decrease i ivestmets (6,702) 5,747 11,710 Net cash (outflow)/iflow from operatig activities before workig capital chages (5,355) 6,836 13,313 Icrease i other receivables ad prepaymets (426) (1,102) (1,011) (Decrease)/icrease i other payables ad accruals (2,589) (81) 2,806 Net cash (outflow)/iflow from operatig activities (8,370) 5,653 15,108 Cash flows from fiacig activities Divideds paid (1,658) (1,830) (3,924) Net cash outflow from fiacig activities (1,658) (1,830) (3,924) Taxatio paid (5) (Decrease)/icrease i cash ad cash equivalets i the period/year (10,033) 3,823 11,184 Cash ad cash equivalets at the begiig of the period/year 13,376 2,192 2,192 Cash ad cash equivalets at 31 December 2017 3,343 6,015 13,376 Supplemetal cash flow iformatio No-cash trasactio iterest received 367 1,010 1,596 The accompayig otes o pages 15 to 32 form a itegral part of the uaudited codesed half-yearly fiacial statemets. 14 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS

for the six moths eded 31 December 2017 1. GENERAL INFORMATION The Compay was icorporated i Eglad ad Wales uder the Compaies Act 2006 o 13 July 2015 with registered umber 09682883 ad its shares were listed o the Lodo Stock Exchage Specialist Fud Segmet o 23 September 2015 ( Admissio ). The Compay is a ivestmet compay as defied i s833 of the Compaies Act 2006. Ivestmet objective The ivestmet objective of the Compay is to provide Shareholders with attractive risk adjusted returs, pricipally i the form of regular, sustaiable divideds, through ivestmet predomiatly i a rage of secured loas ad other secured loa-based istrumets origiated through a variety of chaels ad diversified by way of asset class, geography ad duratio. Ivestmet policy The Compay achieves its ivestmet objective by ivestig i a rage of secured loa assets maily through wholesale secured ledig opportuities, secured trade ad receivable fiace ad other collateralised ledig opportuities. Loa assets iclude both direct loas as well as other istrumets with loa-based ivestmet characteristics (for example, but ot limited to, bods, loa participatios, sydicated loas, structured otes, collateralised obligatios or hybrid securities) ad may iclude (subject to the limit set out i ote 23) other types of ivestmet (for example, equity or reveue-liked or profit-liked istrumets). The Compay may make ivestmets through alterative ledig platforms that preset suitable ivestmet opportuities idetified by the Maager. The Compay will seek to esure that diversificatio of its portfolio is maitaied, with the aim of spreadig ivestmet risk. 2. STATEMENT OF COMPLIANCE a) Basis of preparatio These uaudited codesed half-yearly fiacial statemets preset the results of the Compay for the six moths eded 31 December 2017. These uaudited codesed half-yearly fiacial statemets have bee prepared i accordace with Iteratioal Accoutig Stadard 34 ( IAS 34 ), Iterim Fiacial Reportig, as adopted by the Europea Uio. The uaudited codesed half-yearly fiacial statemets for the period eded 31 December 2017 have ot bee audited or reviewed by the Compay s auditors ad do ot costitute statutory fiacial statemets, as defied i sectio 434 of the Compaies Act 2006. The uaudited codesed half-yearly fiacial statemets have bee prepared o the same basis as the Compay s aual fiacial statemets. b) Basis of measuremet The uaudited codesed half-yearly fiacial statemets have bee prepared o a historical cost basis, except for fiacial assets (icludig derivative istrumets), which are measured at fair value through profit or loss. The uaudited codesed half-yearly fiacial statemets have bee prepared o a goig cocer basis. c) Segmetal reportig The Directors are of the opiio that the Compay is egaged i a sigle ecoomic segmet of busiess, beig ivestmet i a rage of SME loa assets. d) Use of estimates ad judgemets The preparatio of uaudited codesed half-yearly fiacial statemets i coformity with Iteratioal Fiacial Reportig Stadards ( IFRSs ) requires maagemet to make judgemets, estimates ad assumptios that affect the applicatio of policies ad the reported amouts of assets ad liabilities, icome ad expese. The estimates ad associated assumptios are based o historical experiece ad various other factors that are believed to be reasoable uder the circumstaces, the results of which form the basis of makig the judgemets about carryig values of assets ad liabilities that are ot readily apparet from other sources. Actual results may differ from these estimates. The estimates ad uderlyig assumptios are reviewed o a ogoig basis. Revisios to accoutig estimates are recogised i the period i which the estimate is revised, if the revisio affects oly that period, or i the period of the revisio ad future periods, if the revisio affects both curret ad future periods. Judgemets made by maagemet i the applicatio of IFRSs that have a sigificat effect o the uaudited codesed half-yearly fiacial statemets ad estimates with a sigificat risk of material adjustmet i the ext year are discussed i ote 4. SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS 15

for the six moths eded 31 December 2017 (cotiued) 3. SIGNIFICANT ACCOUNTING POLICIES a) Foreig currecy Foreig currecy trasactios are traslated ito Sterlig usig the exchage rates prevailig at the dates of the trasactios. Foreig exchage gais ad losses resultig from the settlemet of such trasactios ad from the traslatio at period-ed exchage rates of moetary assets ad liabilities deomiated i foreig currecies are recogised i the Uaudited Codesed Statemet of Comprehesive Icome. Traslatio differeces o o-moetary fiacial assets ad liabilities are recogised i the Uaudited Codesed Statemet of Comprehesive Icome. b) Fiacial assets ad liabilities The fiacial assets ad liabilities of the Compay are defied as loas, bods with loa type characteristics, ivestmets at fair value through profit or loss, cash ad cash equivalets, other receivables ad other payables. Recogitio The Compay recogises a fiacial asset or a fiacial liability whe, ad oly whe, it becomes a party to the cotractual provisios of the istrumet. Purchases ad sales of fiacial assets that require delivery of assets withi the time frame geerally established by regulatio or covetio i the marketplace are recogised o the trade date, i.e. the date that the Compay commits to purchase or sell the asset. Iitial measuremet Fiacial assets ad fiacial liabilities at fair value through profit or loss are recorded i the Uaudited Codesed Statemet of Fiacial Positio at fair value. All trasactio costs for such istrumets are recogised directly i profit or loss. Fiacial liabilities ot desigated as at fair value through profit or loss, such as loas, are iitially recogised at fair value, beig the amout issued less trasactio costs. Subsequet measuremet After iitial measuremet, the Compay measures fiacial assets desigated as loas ad receivables, ad fiacial liabilities ot desigated as at fair value through profit or loss, at amortised cost usig the effective iterest rate method, less impairmet allowace. Gais ad losses are recogised i the Uaudited Codesed Statemet of Comprehesive Icome whe the asset or liability is derecogised or impaired. Iterest eared o these istrumets is recorded separately as iterest icome. After iitial measuremet, the Compay measures fiacial istrumets which are classified at fair value through profit or loss at fair value. Subsequet chages i the fair value of those fiacial istrumets are recorded i et gai or loss o fiacial assets ad liabilities at fair value through profit or loss. Derecogitio A fiacial asset (or, where applicable, a part of a fiacial asset or part of a group of similar assets) is derecogised where: The rights to receive cash flows from the asset have expired; or The Compay has trasferred its rights to receive cash flows from the asset or has assumed a obligatio to pay the received cash flows i full without material delay to a third party uder a pass-through arragemet; ad Either (a) the Compay has trasferred substatially all the risks ad rewards of the asset, or (b) the Compay has either trasferred or retaied substatially all the risks ad rewards of the asset, but has trasferred cotrol of the asset. Whe the Compay has trasferred its rights to receive cash flows from a asset (or has etered ito a pass-through arragemet) ad has either trasferred or retaied substatially all the risks ad rewards of the asset or trasferred cotrol of the asset, the asset is recogised to the extet of the Compay s cotiuig ivolvemet i the asset. The Compay derecogises a fiacial liability whe the obligatio uder the liability is discharged, cacelled or expires. Impairmet A fiacial asset is impaired whe the recoverable amout is estimated to be less tha its carryig amout. A impairmet loss is recogised immediately i the Uaudited Codesed Statemet of Comprehesive Icome, uless the relevat asset is carried at a revalued amout, i which case the reversal of the impairmet is treated as a revaluatio decrease. c) Cash ad cash equivalets Cash ad cash equivalets are defied as cash i had, demad deposits ad short-term, highly liquid ivestmets readily covertible to kow amouts of cash ad subject to isigificat risk of chages i value. 16 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS

for the six moths eded 31 December 2017 (cotiued) 3. SIGNIFICANT ACCOUNTING POLICIES (cotiued) d) Receivables ad prepaymets Receivables are carried at the origial ivoice amout, less allowace for doubtful receivables. Provisio is made whe there is objective evidece that the Compay will be uable to recover balaces i full. Balaces are writte-off whe the probability of recovery is assessed as beig remote. e) Trasactio costs Trasactio costs icurred o the acquisitio of loas are capitalised upo recogitio of the fiacial asset ad amortised over the term of the respective loa. f) Icome ad expeses Bak iterest ad loa iterest are recogised o a time-proportioate basis usig the effective iterest rate method. Divided icome is recogised whe the right to receive paymet is established. All expeses are recogised o a accruals basis. All of the Compay s expeses (with the exceptio of share issue costs, which are charged directly to the distributable reserve) are charged through the Uaudited Codesed Statemet of Comprehesive Icome i the period i which they are icurred. g) Taxatio The Compay is exempt from UK corporatio tax o its chargeable gais as it satisfies the coditios for approval as a ivestmet trust. The Compay is, however, liable to UK corporatio tax o its icome. However, the Compay has elected to take advatage of modified UK tax treatmet i respect of its qualifyig iterest icome i order to deduct all, or part, of the amout it distributes to Shareholders as divideds as a iterest distributio. h) Chages i accoutig policy ad disclosures New ad ameded stadards ad iterpretatios The accoutig policies adopted are cosistet with those of the previous fiacial year. The Compay adopted the followig ew ad ameded relevat IFRS i the period: IAS 7 Statemet of Cash Flows Disclosure iitiative The Compay has applied these amedmets for the first time i the curret period. The amedmets require a etity to provide disclosures that eable users of fiacial statemets to evaluate chages i liabilities arisig from fiacig activities, icludig both cash ad o-cash chages. Apart from the additioal disclosure i ote 19, the applicatio of these amedmets has had o impact o the Compay s uaudited codesed half-yearly fiacial statemets. i) Accoutig stadards issued but ot yet effective The Iteratioal Accoutig Stadards Board ( IASB ) has issued/revised a umber of relevat stadards with a effective date after the date of these uaudited codesed half-yearly fiacial statemets. Ay stadards that are ot deemed relevat to the operatios of the Compay have bee excluded. The Directors have chose ot to early adopt these stadards ad iterpretatios ad they do ot aticipate that they, with the exceptio of IFRS 9, would have a material impact o the Compay s fiacial statemets i the period of iitial applicatio. Effective date IFRS 2 Share-based paymets 1 Jauary 2018 IFRS 9 Fiacial Istrumets 1 Jauary 2018 IFRS 15 Reveue from Cotracts with Customers 1 Jauary 2018 IFRIC 22 Foreig Currecy Trasactios ad Advace Cosideratio 1 Jauary 2018 I July 2014, the IASB issued the fial versio of IFRS 9, Fiacial Istrumets that replaces IAS 39, Fiacial Istrumets: Recogitio ad Measuremet ad all previous versios of IFRS 9. IFRS 9 brigs together all three aspects of the accoutig for fiacial istrumets project: classificatio ad measuremet, impairmet ad hedge accoutig. IFRS 9 is effective for aual periods begiig o or after 1 Jauary 2018, with early applicatio permitted. Except for hedge accoutig, retrospective applicatio is required but providig comparative iformatio is ot compulsory. For hedge accoutig, the requiremets are geerally applied prospectively, with some limited exceptios. SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS 17

for the six moths eded 31 December 2017 (cotiued) 3. SIGNIFICANT ACCOUNTING POLICIES (cotiued) i) Accoutig stadards issued but ot yet effective (cotiued) The Compay plas to adopt the ew stadard with effect from 1 July 2018. The Compay has performed a high-level impact assessmet of all three aspects of IFRS 9. This prelimiary assessmet is based o curretly available iformatio ad may be subject to chages arisig from further detailed aalyses or additioal reasoable ad supportable iformatio beig made available to the Compay i the future. overall, the Compay expects o sigificat impact o its Statemet of Fiacial Positio or equity, ad will fialise its assessmet i the first half of 2018, i readiess for the adoptio of the stadard o 1 July 2018. i) Classificatio ad measuremet The classificatio of fiacial assets will be based o the Compay s busiess model ad the cotractual cash flow characteristics of its ivestmets. The Compay does ot expect a sigificat impact o its Statemet of Fiacial Positio or equity o applyig the classificatio ad measuremet requiremets of IFRS 9. The Board will cotiue to measure loas ad receivables at amortised cost, ad at fair value for all fiacial assets ad liabilities curretly held at fair value. ii) Impairmet IFRS 9 chages the basis of recogitio of impairmet o fiacial assets from a icurred loss to a expected credit loss approach for assets held at amortised cost. This itroduces a umber of ew cocepts ad chages to the approach to provisioig compared with the curret methodology uder IAS 39: Expected credit losses are based o a assessmet of the probability of default, loss give default ad exposure at default, discouted to give a et preset value. The expected credit loss should be probability weighted ad take ito accout all reasoable ad supportable iformatio. iii) Hedge accoutig The Compay does ot curretly desigate ay hedges as effective hedgig relatioships which qualify for hedge accoutig. Therefore, the Compay does ot expect there to be ay impact with respect to hedge accoutig o the Compay as a result of applyig IFRS 9. The Directors will cotiue to evaluate the impact of IFRS 9 upo the Compay. However, it is oted that the measuremet of impairmet will ivolve icreased complexity ad judgemet, icludig estimatio of probabilities of default. The use of security o a large (ad icreasig) proportio of the Compay s loas will limit the impact of adoptig IFRS 9. Therefore, it is ot expected to have a material fiacial impact. However, it will ot be practical to disclose reliable fiacial impact estimates util the implemetatio programme is further advaced. The impact that IFRS 15 will have o the Compay s fiacial statemets is also cosidered to be immaterial because the Compay does ot have ay cotracts with customers which meet the defiitio uder IFRS 15. 4. USE OF JUDGEMENTS AND ESTIMATES The preparatio of the Compay s uaudited codesed half-yearly fiacial statemets requires the Directors to make judgemets, estimates ad assumptios that affect the reported amouts recogised i the uaudited codesed half-yearly fiacial statemets ad disclosure of cotiget liabilities. However, ucertaity about these assumptios ad estimates could result i outcomes that could require a material adjustmet to the carryig amout of the asset or liability i future periods. Estimates ad assumptios The Compay based its assumptios ad estimates o parameters available whe the uaudited codesed half-yearly fiacial statemets were approved. However, existig circumstaces ad assumptios about future developmets may chage due to market chages or circumstaces arisig beyod the cotrol of the Compay. Such chages are reflected i the assumptios whe they occur. i) Recoverability of loas ad other receivables The Directors assess the recoverability of the Compay s loas to determie whether ay impairmet provisio is required. There is a idicator of impairmet for a loa whe the borrower has failed to make a paymet, either capital or iterest, whe cotractually due ad, upo assessmet, the Compay feels that full recovery is ot expected. The Compay assesses at each reportig date (ad at least o a mothly basis) whether there is objective evidece that a loa, or group of loas, classified as loas at amortised cost, is impaired. As part of this process: Platforms are cotacted to determie default ad deliquecy levels of idividual loas; Cosideratio is give as to whether paymet has bee received after the balace sheet date or whether loas are secured; ad Recovery rates are estimated. At 31 December 2017, the Compay s fiacial istrumets at fair value through profit or loss comprised ulisted equity shares ad derivative fiacial istrumets. See ote 16 for details of the bases of valuatio. 18 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS

for the six moths eded 31 December 2017 (cotiued) 5. DIVIDENDS The Compay distributes at least 85% of its distributable icome eared i each fiacial year by way of divideds. Followig discussios with the Ivestmet Maager regardig the aticipated returs from the Compay s portfolio (both i the shorter ad loger terms), with effect from May 2017, the Compay rebased its aual divided target to 6.25p per Share, icreasig to at least 7.00p per Share with effect from July 2018. The mothly divided at the ew rate of 0.525p per Share was first paid i Jue 2017. over the loger term, the Compay will be targetig a aual et asset value total retur of at least 8%. The Compay iteds to cotiue to pay mothly divideds to Shareholders. The Compay elected to desigate all of the divideds for the period eded 31 December 2017 as iterest distributios to its Shareholders. I doig so, the Compay took advatage of UK tax treatmet by streamig icome from iterest-bearig ivestmets ito divideds that will be taxed i the hads of Shareholders as iterest icome. To date, the Compay has declared the followig divideds i respect of earigs for the period eded 31 December 2017: Total divided declared i Amout per Aoucemet date Pay date respect of earigs i the period Ordiary Share 000 21 August 2017 29 September 2017 276 0.525p 22 September 2017 27 october 2017 276 0.525p 23 october 2017 24 November 2017 276 0.525p 22 November 2017 29 December 2017 276 0.525p 21 December 2017 26 Jauary 2018 276 0.525p 19 Jauary 2018 23 February 2018 276 0.525p Divideds declared (to date) for the period 1,658 3.15p Less, divideds paid after the period ed (553) (1.05)p Add, divideds paid i the period i respect of the prior year 553 1.05p Divideds paid i the period 1,658 3.15p I accordace with IFRS, divideds are oly provided for whe they become a cotractual liability of the Compay. Therefore, durig the period a total of 1,658,000 (31 December 2016: 1,896,000, 30 Jue 2017: 3,792,000) was icurred i respect of divideds, oe of which was outstadig at the reportig date (31 December 2016 ad 30 Jue 2017: oe). The divideds of 276,000 each, which were declared o 21 December 2017 ad 19 Jauary 2018, had ot bee provided for at 31 December 2017 as, i accordace with IFRS, they were ot deemed to be liabilities of the Compay at that date. All divideds i the period were paid out of reveue (ad ot capital) profits. o 20 February 2018, the Compay declared a divided of 0.525p per Share for the period from 1 July 2017 to 31 Jauary 2018. This divided will be paid o 23 March 2018. 6. RELATED PARTIES As a matter of best practice ad good corporate goverace, the Compay has adopted a related party policy which applies to ay trasactio which it may eter ito with ay Director, the Ivestmet Maager, Amberto Asset Maagemet Limited ( Amberto or the Sub-Ivestmet Adviser ) or ay of their affiliates which would costitute a related party trasactio as defied i, ad to which would apply, Chapter 11 of the Listig Rules. I accordace with its related party policy, the Compay obtaied: (i) the approval of a majority of the Directors; ad (ii) a thirdparty valuatio i respect of these trasactios from a appropriately qualified idepedet adviser. Loa to Medical Equipmet Solutios Limited ( MESL ) I Jue 2017, the Compay loaed 1,380,000 to MESL, whose Chairma is Neil Roberts, who is also chairma of SQN Capital Maagemet, LLC. Loa iterest of 67,000 was eared i the period (31 December 2016: oe, 30 Jue 2017: 3,000), 4,000 of which was outstadig at 31 December 2017 (31 December 2016: oe, 30 Jue 2017: 3,000). The loa bears iterest at 10.0% per aum ad is for a period of five years from the date of drawdow. The loa is to be repaid via 60 mothly paymets. At 31 December 2017, the balace of the loa was 1,271,000 (31 December 2016: oe; 30 Jue 2017 1,380,000). Trasactios with subsidary udertakig Details of the trasactios with the Compay s subsidiary udertakig are disclosed i ote 13. SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS 19

for the six moths eded 31 December 2017 (cotiued) 7. KEY CONTRACTS a) Ivestmet Maager The Ivestmet Maager, SQN Asset Maagemet Limited ( SQN UK ) ad SQN Capital Maagemet, LLC ( SQN US ), has resposibility for maagig the Compay s portfolio. For their services, the Ivestmet Maager is etitled to a maagemet fee at a rate equivalet to the followig schedule (expressed as a percetage of NAV per aum, before deductio of accruals for upaid maagemet fees for the curret moth): 1.0% per aum for NAV lower tha or equal to 250 millio; 0.9% per aum for NAV greater tha 250 millio ad lower tha or equal to 500 millio; ad 0.8% per aum for NAV greater tha 500 millio. The maagemet fee is payable mothly i arrears o the last caledar day of each moth. No performace fee is payable by the Compay to the Ivestmet Maager. The Compay may also icur trasactio costs for the purposes of structurig ivestmets for the Compay. These costs form part of the overall trasactio costs that are capitalised at the poit of recogitio ad are take ito accout by the Ivestmet Maager whe pricig a trasactio. Whe structurig services are provided by the Ivestmet Maager or a affiliate of them, they shall be etitled to charge a additioal fee to the Compay equal to up to 1.0% of the cost of acquirig the ivestmet (igorig gearig ad trasactio expeses). This cost will ot be charged i respect of assets acquired from the Ivestmet Maager, the fuds they maage or where they or their affiliates do ot provide such structurig advice. The Ivestmet Maager has agreed to bear all the broke ad abortive trasactio costs ad expeses icurred o behalf of the Compay. Accordigly, the Compay has agreed that the Ivestmet Maager may retai ay commitmet commissios received by the Ivestmet Maager i respect of ivestmets made by the Compay save that if such commissio o ay trasactio were to exceed 1.0% of the trasactio value, the excess would be paid to the Compay. With effect from 1 April 2017, the former Ivestmet Maager, Amberto, was appoited as Sub-Ivestmet Adviser to the Ivestmet Maager. From that date, Amberto was o loger directly appoited by the Compay ad was ot etitled to a fee from the Compay. The fees of the Sub-Ivestmet Adviser are bore by the Ivestmet Maager. Durig the period, a total of 262,000 (31 December 2016: 187,000, 30 Jue 2017: 408,000) was icurred i respect of maagemet fees ( 262,000 to SQN UK (31 December 2016: 187,000 to Amberto, 30 Jue 2017: 278,000 to Amberto ad 130,000 to SQN UK)), of which 44,000 was payable to SQN UK at the reportig date (31 December 2016: 94,000 to Amberto, 30 Jue 2017: 43,000 to SQN UK). b) Admiistratio fees Elysium Fud Maagemet Limited ( Elysium ) is etitled to a admiistratio fee of 100,000 per aum i respect of the services provided i relatio to the admiistratio of the Compay, together with time based fees i relatio to work o ivestmet trasactios. Durig the period, a total of 60,000 (31 December 2016: 69,000, 30 Jue 2017: 144,000) was icurred i respect of admiistratio fees, of which 28,000 (31 December 2016: 33,000, 30 Jue 2017: 38,000) was payable at the reportig date. 8. DIRECTORS REMUNERATION The Directors are paid such remueratio for their services as determied by the Remueratio ad Nomiatios Committee, which comprises all of the Directors of the Compay ad is chaired by David Steveso. Uder the terms of their appoitmets, the Chairma of the Compay receives 37,500 per aum, the chairma of the Audit ad Valuatio Committee receives 31,250 per aum, ad other o-executive Directors receive 25,000 per aum. For the period from 1 July 2016 to 31 August 2017, Ke Hille, Chairma of the Audit ad Valuatio Committee, received a additioal 10,000 per aum as remueratio relatig to a umber of additioal resposibilities, udertake durig that period, relatig specifically to the loas held withi the Compay s portfolio. David Steveso receives a additioal 2,500 i recogitio of his icreased time commitmet ad additioal resposibilities arisig from takig over the chair of the Remueratio ad Nomiatios Committee. Durig the period, a total of 54,000 (31 December 2016: 75,000, 30 Jue 2017: 128,000) was icurred i respect of Directors remueratio, oe of which was payable at the reportig date (31 December 2016: 3,000, 30 Jue 2017: 9,000). No bous or pesio cotributios were paid or payable o behalf of the Directors. 20 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS

for the six moths eded 31 December 2017 (cotiued) 9. KEY MANAGEMENT AND EMPLOYEES The Compay had o employees durig the period (31 December 2016 ad 30 Jue 2017: oe). Therefore, there were o key maagemet (except for the Directors) or employees durig the period (31 December 2016 ad 30 Jue 2017: oe). 10. OTHER EXPENSES Period from Period from 1 July 2017 to 1 July 2016 to Year eded 31 December 2017 31 December 2016 30 Jue 2017 (uaudited) (uaudited) (audited) 000 000 000 Audit fees 21 22 42 Website costs 18 14 17 Registrar fees 15 15 30 Custodia fee 13 13 25 Accoutacy ad taxatio fees 7 30 37 Travel costs 6 3 6 other expeses 5 7 15 Listig fees 4 9 22 Pritig costs 4 3 6 Directors liability isurace 3 3 6 Auditors o-audit ad taxatio fees 3 96 119 209 11. TAXATION The Compay has received cofirmatio from HMRC that it satisfied the coditios for approval as a ivestmet trust, subject to the Compay cotiuig to meet the eligibility coditios i s.1158 of the Corporatio Tax Act 2010 ad the ogoig requiremets for approved ivestmet trust compaies i chapter 3 or part 2 of the Ivestmet Trust (approved Compay) Tax Regulatios 2011 (Statutory Istrumet 2011.2999). The Compay iteds to retai this approval ad self-assesses compliace with the relevat coditios ad requiremets. As a ivestmet trust the Compay is exempt from UK corporatio tax o its chargeable gais. The Compay is, however, liable to UK corporatio tax o its icome. However, the Compay has elected to take advatage of modified UK tax treatmet i respect of its qualifyig iterest icome i order to deduct all, or part, of the amout it distributes to Shareholders as divideds as a iterest distributio. Period from Period from 1 July 2017 to 1 July 2016 to Year eded 31 December 2017 31 December 2016 30 Jue 2017 (uaudited) (uaudited) (audited) 000 000 000 Corporatio tax: Curret year Adjustmets i relatio to prior period 5 Total tax expese for the period/year 5 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS 21

for the six moths eded 31 December 2017 (cotiued) 11. TAXATION (cotiued) Period from Period from 1 July 2017 to 1 July 2016 to Year eded 31 December 2017 31 December 2016 30 Jue 2017 (uaudited) (uaudited) (audited) 000 000 000 Recociliatio of tax charge: Profit before taxatio 1,503 1,428 2,445 Tax at the stadard UK corporatio tax rate of 19% (2016 ad 2017: 20%) 286 286 489 Effects of: No-taxable ivestmet gais ad losses 36 134 150 Iterest distributios (315) (379) (671) Tax losses brought forward (32) Tax losses/(gais) carried forward 25 (41) 32 Adjustmets i relatio to prior period 5 Total tax expese 5 Domestic corporatio tax rates i the other jurisdictios i which the Compay operated were as follows: Period from Period from 1 July 2017 to 1 July 2016 to Year eded 31 December 2017 31 December 2016 30 Jue 2017 (uaudited) (uaudited) (audited) Uited Kigdom 19% 20% 20% Guersey il il il Due to the Compay s status as a ivestmet trust ad the itetio to cotiue to meet the required coditios, the Compay has ot provided for deferred tax o ay capital gais ad losses. 12. EARNINGS PER ORDINARY SHARE The earigs per ordiary Share of 2.85p (31 December 2016: 2.71p, 30 Jue 2017: 4.63p) is based o a profit attributable to the owers of the Compay of 1,503,000 (31 December 2016: 1,428,000, 30 Jue 2017: 2,440,000) ad o a weighted average umber of 52,660,350 (31 December 2016 ad 30 Jue 2017: 52,660,350) ordiary Shares i issue. There is o differece betwee the basic ad diluted earigs per share. 13. INVESTMENT IN SUBSIDIARY UNDERTAKING The Compay s previously wholly-owed subsidiary, GLI Alterative Fiace Guersey Limited, was liquidated o 16 May 2017. Before this date, the subsidiary, which had bee icorporated i Guersey, had bee dormat for several moths. As at 31 December 2016, the ivestmet i the subsidiary, carried at fair value through profit or loss, was held at 41,088,000, ad the Compay owed 41,088,000 to the subsidiary. 22 SQN Secured Icome Fud plc HALF-YEARLY REPoRT AND UNAUDITED CoNDENSED FINANCIAL STATEMENTS