42.00%19.00%17.00%9.00%7.00%7.00%

MARKET UPDATEThe economic backdrop remained generally supportive for equity markets in February with most indices performing well until concern started to increase towards the end of February because quantitative easing (QE) removal would possibly start sooner than expected. This market correction from year-to-date highs continued as European political risk raised its ugly head again with an inconclusive outcome in the Italian elections. Although Federal Reserve Chairman Ben Bernanke eased fears over the timing of the removal of QE with his defence being that currently the benefits of QE outweigh the costs, the Global MSCI Index fell 0.5% in February in USD terms having at one stage been up nearly 2.5% in USD terms. Small and mid cap stocks continued to outperform the larger cap indices as overall risk aversion abates and the earnings seasons didn’t deliver huge disappointments. The MSCI Global Small Cap Index rose 0.75% in February in USD terms. A weaker New Zealand dollar meant that the index returned 2.5% in local currency terms.

Europe was the best performing region in local currency terms rising 3.8%. However a weaker Euro and a corollary of rising political concerns meant that in NZD terms the European Small Cap Index was up only 1.5%. US small caps were up 1.3% in USD terms but rose 2.8% in NZD terms as the New Zealand dollar fell against the greenback. In Japan, the local index continued to respond positively to the monetary easing and pro-growth policies, rising 2.7% in yen terms and 3.1% in NZD terms.

PORTFOL IO UPDATEThe Marlin portfolio rose 1.8% in USD terms and 3.2% in NZD terms. Within the portfolio, stocks in the industrials sector made the strongest contribution to performance. Sarin Technologies was the

SEcTOR SPL IT as at 28/02/13

GEOGRAPHIcAL SPL IT as at 28/02/13

32% Industrials 27% Health Care 21% Information Technology 12% Consumer Discretionary 8% Other

41% Europe 19% US 17% Asia 9% Japan 7% Latin America 7% Other

PERFORMAncE to 28/02/13

Since 1 Month 3 Months 6 Months 1 Year 3 Years Inception

MLN Adjusted NAV* +3.2% +8.8% +9.3% +6.5% -3.8% +12.8%

Relative Performance

MSCI Global Small Cap Gross Index (in NZ dollar terms) +2.5% +9.4% +11.4% +12.8% +21.9% +2.5%

Total Shareholder Return* +1.4% +5.6% +8.5% +2.0% +4.5% -6.7%

*Assumes all dividends are reinvested, but excludes imputation credits.** Accumulated performance since inception.

AT A GLAncE as at 28/02/13

MLN NAV . . . . . . . . . . . . . . . .$0.88

Share Price . . . . . . . . . . . .$0.71

Discount . . . . . . . . . . . . . . . . . . . .19%

FEBRUARY’S B IGGEST MOvERS

EnergyIndu 32.00%health Care 27.00%Techology 21.00%Consumer 12.00%Other 8.00%

Energy  

Indu  

health  Care  

Techology  

Consumer  

Other  

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+22% Sarin Technologies

+17% Wirecard

+9% Horiba

+8% Icon

-11% Volkswagen

outstanding performer rising over 20% in the month as confidence builds that end demand remains supportive and margins improve for the Indian diamond manufacturing industry. Performance within the healthcare portfolio companies was broad based with all stocks making a positive contribution. In the consumer sector a positive return by Nokian Tyres was offset by a weakness in Volkswagen as the company gave cautious guidance for 2013. Technology stocks generally performed well with Wirecard the key performer rebounding nicely from a rather poor performance in January.

During the month we initiated a position in Acino, a Swiss generics and speciality pharmaceuticals company. The company has strong revenue growth prospects emanating from an expanding product range together with a strong distribution capability spanning four continents and largely exposed to fast growing emerging markets. Acino operates in the hard to manufacture drugs space and have developed advanced technologies in both delivery methods (slow release oral dispersibles, transdermal applications i.e. patches and biodegradable implants) and also high levels of drug delivery efficacy. They have a strong development pipeline of drugs that will continue to support their growth prospects. In our view, Acino’s strong growth prospects are not currently reflected in the share’s valuation and if the company delivers anywhere close to guidance then it should rerate significantly.

During the month we also added to our position in Gameloft. We believe Gameloft is at a point whereby investment in the business (mainly the workforce) can slow considerably while revenue prospects remain strong as mobile gaming grows in line with growth in smartphones.

Roger Garrett, Senior Portfolio Manager

Over the past few months the Marlin portfolio management team has met with the management of many of the companies in the portfolio. While our findings were broadly positive, the conversations and related analysis also identified emerging risks in some of the investment theses. Frequent and detailed management contact ensures that we diligently monitor risk and return expectations, and appropriately rebalance the portfolio over time. Some highlights from our US trip, which had a significant focus on technology, are presented below:

United States comment Recent News

Autodesk Autodesk emerges from a period of weaker end markets as a stronger company. It has optimised distribution channels, cut costs and refocused its offering. The company is exceptionally well positioned to benefit from a nascent capital investment cycle in the US.

Leading non-residential real estate indicators have turned positive, signalling an upturn in demand for Autodesk’s modelling and design solutions.

Equinix Equinix is perfectly positioned to benefit from some of the most compelling growth markets today. Ninety percent of the world’s data was created in the last two years and Equinix is the global leader in data storage and transfer. Improved asset utilisation and a conversion to a more tax efficient real estate investment trust will offer more profitable growth over the medium-term.

Equinix’ 2012 performance beat expectations as more clients realised the commercial benefits of storing their data close to their own customers and suppliers. Cloud solutions remain a major growth opportunity positioning the company to positively surprise in 2013.

Hanger Hanger’s leading prosthetic solutions have positioned it as a key care provider to those in need of help. Determined to provide care with sensitivity, the company has invested significant capital in clinics to optimize service standards. However, this has depressed capital efficiency and returns. Going forward the company must grow revenues without deploying significant additional capital. The time has come to match outstanding technological leadership and enviable profitability with efficient capital use.

We benefitted from a candid discussion with the company’s CFO and CEO. A new information system will aid in getting patients to visit throughout the month instead of pressuring capacity in an end of month rush. Improved average use of assets is expected to deliver capital efficiency and higher returns.

Dolby Dolby continues to face the challenge of adapting to digital sound. While its historic technology advantage in noise reduction is largely obsolete, it still enjoys a powerful position in being an industry standard for sound production. The rate at which consumers have changed the way they consume sound has possibly outstripped the rate at which Dolby has innovated to keep its product relevant. Dolby must find a way to replicate its historical success in modern mobile devices.

Through the end of 2012 Dolby made significant strides penetrating mobile devices. Its technology is incorporated in key Samsung handsets, as well as the flagship sound offering in the Kindle Fire. Volumes surprised positively.

O2 Micro O2 Micro was once the technology leader in digital screen backlighting. However it lost ground to competitors who innovated more quickly and won share. While the company has retained key customers through the unprecedented cyclical weakness in the semi-conductor sector, it has been unable to drive volumes or defend margins. Significant cash burn despite dramatic cost cuts is not encouraging, and risks to the investment thesis are pronounced.

In fairness to O2 Micro, the cyclical challenges are making for incredibly difficult trading conditions in the sector. Recently the company took a bold step, disposing of a non-performing ecommerce unit, which will lower the overall break-even, supporting profitability and cash generation.

Marlin Global Limited. PO Box 33 549, Takapuna, Auckland 0740, New Zealand. Phone: +64 9 484 0365 Fax: +64 9 489 7139Email: enquire@marlin.co.nz www.marlin.co.nz

TOP 5 PORTFOL IO POSIT IOnS as at 28/02/13

INVESTING 101This month we follow on in our series introducing you to our investment analysis framework STEEPP by taking a look at the second E, Earnings Forecasts .

Last month we wrote about a company’s earnings history. This is an important guide as to how a company performs through various

economic and business cycles. Equally important for us is having comfort in the company’s ability to grow its earnings in the future, irrespective of economic conditions – the second “E”.

Remember our rule of thumb is that we want companies that can double their profits over a three year period.

DISCLAIMER: The information in this update has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is by necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Marlin Global Limited and its officers and directors make no representation as to its accuracy or completeness. The update is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. To the extent that the update contains data relating to the historical performance of Marlin Global Limited or its portfolio companies, please note that fund performance can and will vary and that future results may have no correlation with results historically achieved.

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E = EARnInGS FOREcASTS

6% 5% 5% 4% 4%Wasion Group