FAIR OAKS INCOME LIMITED
ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
Contents
Company Overview
Highlights 1
Summary Information 2
Strategic Review
Chairman’s Statement 4
Investment Adviser’s Report 7
Strategic Report 14
Governance
Board of Directors 19
Disclosure of Directorships in Public Companies
Listed on Recognised Stock Exchanges 20
Directors’ Report 21
Corporate Governance 25
Statement of Directors’ Responsibilities 30
Directors’ Remuneration Report 31
Report of the Audit Committee 32
Management Engagement Committee Report 35
Financial Report
Independent Auditor’s Report 36
Statement of Comprehensive Income 41
Statement of Changes in Shareholders’ Equity 42
Statement of Financial Position 43
Statement of Cash Flows 44
Notes to the Financial Statements 45
Additional Information
Portfolio Statement (unaudited) 74
Management and Administration 75
Appendix – Alternative Performance Measures
used in the Financial Statements 76

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
1
COMPANY OVERVIEW
Highlights
• Fair Oaks Income Limited’s (the “Company”) Net Asset
Value (“NAV”) return per 2021 Share was +22.7%
1
(31
December 2020: -8.3%) for the year ended 31 December
2021 on a total return basis (with dividends reinvested).
The NAV return per Realisation Share was 22.7%
1
(31
December 2020: -8.3%) for the year ended 31 December
2021 on the same basis.
• As at 31 December 2021, the Company’s total market
capitalisation was US$296 million, comprising US$252
million of 2021 Shares and US$44 million of Realisation
Shares.
• The 2021 Shares closed at a mid-price of US$0.6225 on
31 December 2021. The 2021 Shares traded at an average
discount to NAV of 1.85% during the year ended 31
December 2021.
• The Company’s Realisation shares closed at a mid-price of
US$0.7000 on 31 December 2021. The Realisation Shares
traded at an average premium to NAV of 0.20% during the
year ended 31 December 2021.
• On 19 April 2021, the Company announced the result of
its reorganisation proposal, being that 62,562,883 2017
Shares had been elected for re-designation as Realisation
Shares, representing 13.4% of the 2017 Shares in issue,
and 405,815,477 2017 Shares were re-designated as
2021 Shares, representing the balance of 86.6% of the
2017 Shares in issue (including 650,000 shares held in
Treasury). The purpose of the reorganisation was to allow
those Shareholders who wished to extend the life of their
investment in the Company beyond the planned end date
of FOIF II LP (“Master Fund II”), to be able to do so by having
their 2017 Shares re-designated as 2021 Shares, with such
2021 Shares investing in a new master fund, FOMC III LP
(the “Master Fund III”), which will have a planned end date
of 12 June 2028 and an investment objective and policy
substantially similar to that of Master Fund II.
• The Company declared dividends of 9.75 US cents per
2021 Share and Realisation Share in the year ended 31
December 2021 (31 December 2020: 5.80 US cents per
2017 Share), an increase of 3.95 US cents per share or
68% compared to the year ended 31 December 2020.
Financial Highlights
31 December 31 December
2021 2020
2
2021 Shares
Net Assets US$270,738,076 US$294,969,346
Net Asset Value per share US$0.6682 US$0.6306
Share mid-price at year end US$0.6225 US$0.6175
Discount to Net Asset Value
1
(6.84%) (2.08%)
Ongoing charges figure
(2021 Shares only)
3
0.25% 0.32%
Ongoing charges figure
(look through basis)
4
1.35% 1.47%
31 December
2021
Realisation Shares
Net Assets US$41,786,970
Net Asset Value per share US$0.6679
Share mid-price at year end US$0.7000
Premium to Net Asset Value
1
4.80%
Ongoing charges figure
(Realisation Shares only)
3
0.25%
Ongoing charges figure
(look through basis)
4
1.34%
1
See “Appendix” on pages 76 - 79.
2
At 31 December 2020, only one share class being 2017 Shares. On 19 April 2021, these were re-designated 2021 Shares (86.6% of original 2017 Shares) and Realisation Shares
(13.4% of original 2017 Shares). See “Summary information” on page 2 for further information.
3
Total ongoing charges, calculated in accordance with the AIC guidance, is at the Company level only for the year divided by the average NAV for the year. Charges of the underlying
Master Funds are not included. See “Appendix” on pages 76 - 79.
4
Total ongoing charges, calculated in accordance with the AIC guidance, including the Company and the underlying funds divided by the average NAV for the year. See “Appendix”
on pages 76 - 79.

2
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
COMPANY OVERVIEW
Summary Information
Principal Activity
Fair Oaks Income Limited (the “Company”) was registered in
Guernsey under the Companies (Guernsey) Law, 2008 on 7
March 2014. The Company’s registration number is 58123 and
it is regulated by the Guernsey Financial Services Commission
as a registered closed-ended collective investment scheme
under The Registered Collective Investment Scheme Rules and
Guidance 2021. The Company began trading on the Specialist
Fund Segment (“SFS”) of the London Stock Exchange on 12
June 2014.
Reorganisation
On 19 April 2021, the Company announced the result of its
reorganisation proposal, being that 62,562,883 2017 Shares
had been elected for re-designation as Realisation Shares (the
“Realisation Shares”), representing 13.4% of the 2017 Shares
in issue, and 405,815,477 2017 Shares were re-designated as
2021 Shares (the “2021 Shares”), representing the balance of
86.6% of the 2017 Shares in issue (including 650,000 shares
held in Treasury). The Company makes its investments through
FOIF II LP (the “Master Fund II”) and FOMC III LP (the “Master
Fund III”), in both of which the Company is a limited partner (the
“Master Fund II” and the “Master Fund III” together the “Master
Funds”). The Master Fund II was registered in Guernsey on
24 February 2017 and the Master Fund III was registered in
Guernsey on 10 March 2021 under The Limited Partnerships
(Guernsey) Law, 1995. The purpose of the reorganisation was
to allow those Shareholders who wished to extend the life of
their investment in the Company beyond the planned end date
of the Master Fund II, to be able to do so by having their 2017
Shares re-designated as 2021 Shares, with such 2021 Shares
investing in the new Master Fund III, which has a planned end
date of 12 June 2028 and an investment objective and policy
substantially similar to that of the Master Fund II.
At 31 December 2021, the Company has 62,562,883
Realisation Shares and 405,165,477 2021 Shares in issue.
The Realisation Shares invest solely into the Master Fund II
and the 2021 Shares invest solely into the Master Fund III.
At 31 December 2021, the Company had direct holdings of
9.59% (31 December 2020: 71.80%) in the Master Fund II and
100% holding in Master Fund III, which in turn had a holding
of 62.21% in the Master Fund II. Together, the Company held
a direct and indirect holding of 71.80% in the Master Fund II.
The Master Funds
During the year ended 31 December 2021, the Master Fund II
allowed one new limited partner to enter the partnership (being
the Master Fund III) and at 31 December 2021, the Master Fund
II had six limited partners, including Fair Oaks Founder II LP, a
related entity. At 31 December 2021, the Master Fund III had
two limited partners, including Fair Oaks Founder VI LP. The
General Partner of the Master Fund II and Master Fund III is Fair
Oaks Income Fund (GP) Limited (the “General Partner” or “GP”).
Cycad and Wollemi
The Master Fund II is also invested into Cycad Investments
LP (“Cycad”). Cycad is a Limited Partnership registered in
the United States of America on 2 June 2017. Aligned with
the Company’s investment policy, Cycad also invests into
Collateralised Loan Obligations (“CLOs”). On 9 March 2021,
a new Guernsey limited partnership was established called
Wollemi Investments I LP (“Wollemi”). On 23 March 2021, the
Master Fund II transferred its investment in Cycad to Wollemi
in exchange for limited partnership interests in Wollemi.
In addition, during the year ended 31 December 2021, the
Master Fund II also transferred its investments in FOAKS 1X
CLO, FOAKS 2X CLO and FOAKS 3X CLO (the “Fair Oaks
CLOs”) to Wollemi in exchange for limited partnership interests
in Wollemi. At 31 December 2021, the Master Fund II holds
100.00% (31 December 2020: nil) of the commitment capital
of Wollemi.
Founder Partners
Fair Oaks Founder II LP, a Guernsey limited partnership, has
been established to act as the Founder Limited Partner of
Master Fund II. Fair Oaks Founder VI LP, a Guernsey limited
partnership, has been established to act as the Founder
Limited Partner of Master Fund III.
Investment Objective and Policy
The investment objective of the Company is to generate
attractive, risk-adjusted returns, principally through income
distributions.
The investment policy of the Company is to invest (either
directly and/or indirectly through the Master Fund II and/
or Master Fund III) in US, UK and European CLOs or other
vehicles and structures which provide exposure to portfolios
consisting primarily of US and European floating-rate senior
secured loans and which may include non-recourse financing.
The Company implements its investment policy by:
1. with respect to those assets of the Company attributable to
the Realisation Shares: investing in Master Fund II; and
2. with respect to those assets of the Company attributable
to the 2021 Shares and any future C Shares: investing in
Master Fund III.
If at any time the Company holds any uninvested cash, the
Company may also invest on a temporary basis in the following
Qualifying Short Term Investments:
• cash or cash equivalents;
• government or public securities (as defined in the Financial
Conduct Authority (“FCA”) Rules);

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
3
COMPANY OVERVIEW
Summary Information (continued)
Investment Objective and Policy (continued)
• money market instruments;
• bonds;
• commercial paper; or
• other debt obligations with banks or other counterparties
having a single A rating or (if a fund) investing with no
leverage in assets rated at least single A, according to at
least one internationally recognised rating agency selected
by the Board of Directors (the “Board”) (which may or may
not be registered in the EU).
The aggregate amount deposited or invested by the Company
with any single bank or other non-government counterparty
(including their associates) shall not exceed 20% of the Net
Asset Value (“NAV”) in aggregate, and also of the NAV of each
share class, at the time of investment. The Company cannot
make any other types of investments without shareholder
consent to a change of investment policy by ordinary resolution
at a general meeting of the Company.

4
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
STRATEGIC REVIEW
Chairman’s Statement
The independent Board of the Company is pleased to present
its Annual Report and Financial Statements for the financial
year ended 31 December 2021.
The Company’s NAV per 2021 Share and 2021 Share price
generated a total return (with dividends reinvested) of +22.7%
and +16.6% respectively. The Company’s 2021 Shares closed
at a mid-price of 62.3 US cents as of 31 December 2021,
representing a discount to NAV of -6.8%.
The Company’s NAV per Realisation Share and Realisation
Share price generated a total return (with dividends reinvested)
of +22.7% and +30.4% respectively. The Company’s
Realisation Shares closed at a mid-price of 70.0 US cents as of
31 December 2021, representing a premium to NAV of 4.8%.
Figure 1.1 – Total return: NAV per 2021 Share and 2021 Share
price in 2021
0%
5%
10%
15%
20%
25%
30%
Dec-20 Mar-21Jun-21 Sep-21 Dec-21
Company 2021 NAV Company 2021 share price
CLOs recovered from the unprecedented market volatility
experienced by all credit assets in 2020, outperforming other
credit sectors. US and European high yield indices generated
returns of +6.0% and +4.4% in 2021 and loan markets in the
US and Europe generated returns of +5.5% and +5.0% in the
year.
Expectations of higher defaults and downgrades as a result
of the economic slowdown due to the restrictions imposed
during the outbreak of COVID-19 proved to be too high. The
trailing 12-month loan default rate ended 2021 at 0.3% in the
US and 0.6% in Europe. As at the end of 2021, the default
rate was expected to remain low, with the distressed ratio
(loans trading below 80c, a potential indicator of the direction
of future defaults) standing at 1.0% in the US and 0.6% in
Europe.
2021 was a record year for CLO new issuance in both the
US ($187 billion) and Europe (€39 billion). Despite the large
issuance, US and European AAA primary spreads closed
13 bps and 9 bps tighter in December 2021 compared to
December 2020. Initial expectations for primary issuance
in 2022 ranged from $155-$160 billion in the US and from
€30-€37 billion in Europe but the market volatility that has
resulted from the invasion of Ukraine in February 2022 is likely
to reduce issuance further.
An environment of low defaults and potential loan price volatility
has the potential to benefit the Company’s investments,
supporting distributions and allowing CLOs to take advantage
of their long-term, non-mark-to-market financing to redeploy
loan repayments.
Cash flow and dividends
As a result of the strong fundamental performance of the
portfolio and low defaults (the CLOs in which the Master Funds
hold equity (subordinated notes) have an annualised default
rate and CCC exposure of 0.26% and 3.68%, respectively,
well below the market’s average), all CLO equity and debt
investments made their scheduled distributions in 2021. The
Company declared 2.25 US cents per 2021 Share dividend in
respect of the quarter ending March 2021 and 2.50 US cents
per 2021 Share dividend in respect of the quarters ending on
30 June 2021, 30 September 2021 and 31 December 2021.
The dividend yield on the 2021 Shares and Realisation Shares
was 16.1% and 13.9% respectively based on the closing
prices as at 31 December 2021.
Figure 1.2 – Cumulative dividends per share since inception
(US cents per 2021 share):
4c
14c
28c
41c
52c
61c
66c
76c
c
10c
20c
30c
40c
50c
60c
70c
80c
Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21
The attractive dividend yield will be supported in 2022 by
distributions from new investments. ROCKT 2021-2X SUB
and WELF 2021-2X SUB made their first distributions in
January 2022 and Fair Oaks Loan Funding IV’s (“FOLF IV”) first
payment is scheduled for July. The Master Fund II received
US$20.6 million worth of quarterly distributions in January
2022, compared to US$18.9 million in October 2021.
The proactive management of the CLO majority equity
positions via resets has resulted in a reduction in the weighted
average cost of funding from Libor+1.8% to Libor+1.7%
during 2021 which, given stable loan CLO portfolio spreads,
further supports CLO equity distributions.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
5
STRATEGIC REVIEW
Chairman’s Statement (continued)
Cash flow and dividends (continued)
A key challenge in 2022 will be the expected Fed and ECB
interest rate increases. Although this could impact weaker
corporate borrowers with lower interest coverage ratios, it is
also likely to support ongoing investor demand for floating rate
(January 2022 saw the highest monthly inflows into US loan
funds since 2012). Consequently, investor interest in CLO notes
could grow and the potential for lower CLO financing rates may
support new CLO equity investments and further optimisation
of the capital structure of existing CLO equity investments.
As a result of these factors (strong cash-flows, low expected
defaults, attractive CLO financing), we believe the Company
is well positioned to generate attractive risk-adjusted returns
in 2022.
A key area of focus for the Company in 2022 will be the
closure of the discount at which the 2021 Shares traded at
the end of 2021. The Company benefits from key structural
advantages including a rigorous valuation policy, the fixed life
of the underlying Master Funds and discount management
provisions, such as quarterly reinvestment of 25% of
management fees if the Company’s 2021 Shares do not trade
at or above NAV (see Note 8 for further details). The Board will
monitor the impact of these measures and explore additional
measures should they prove insufficient in this respect.
The Company supports the Paris Agreement on Climate
Change. All CLO equity investments completed by the Master
Funds since 2019 have included ESG-related investment
criteria that prohibit investment in certain industry sectors
which are considered to be environmentally or socially harmful.
As a UN PRI signatory, the Advisor, Fair Oaks Capital Limited is
committed to applying the principles to all stages of investment
criteria and increasing awareness in credit markets.
Material events
On 23 March 2021, the Master Fund II changed its name from
FOMC II LP to FOIF II LP.
On 9 March 2021, a new Guernsey limited partnership was
established called Wollemi Investments I LP (“Wollemi”). On
23 March 2021, Master Fund II transferred its investment in
Cycad to Wollemi in exchange for limited partnership interests
in Wollemi.
Reorganisation and Placing Programme
On 28 March 2021, the Company announced the publication
of a prospectus (“Prospectus”) and circular (the “Circular”)
in relation to the Reorganisation Proposal and Placing
Programme Proposal (the “Proposals”).
The Board was pleased to put forward the Proposals, which
facilitated an extension of Shareholders’ investments through
a new class of 2021 Shares deployed through a new Guernsey
limited partnership called FOMC III LP (the “Master Fund III”),
while also offering an option to elect for Realisation Shares and
establishing a twelve-month placing programme.
Master Fund III is characterised by a fixed investment period
and life, during which Fair Oaks will continue to utilise its tactical
approach to investing across the CLO capital structure, seeking
to take advantage of well-defined investment opportunities in
both control equity and secondary mezzanine securities.
The investment opportunity leverages Fair Oaks’ in-depth
fundamental research, long track record and experience
in structuring and negotiating investments and ongoing
monitoring of the underlying portfolios. In addition to
improving corporate fundamentals, the potential for attractive
risk-adjusted returns for Shareholders is supported by the
compelling financing levels currently available to CLO equity
investors, which have the potential to benefit both new
investments and the refinance or reset of existing investments.
On 19 April 2021, at the Extraordinary General Meeting of the
Company, resolutions 1 and 2 were passed but resolution
3 was not passed. Resolutions 1 and 2 were to amend the
Company’s articles of incorporation and allow all ordinary
shares of no par value each in the capital of the Company
designated as “2017 shares” to be re-designated on a one-for-
one basis as ordinary shares of no par value each in the capital
of the Company designated as “2021 shares” pursuant to the
proposals set out in the Circular, EXCEPT THAT where and
to the extent that a shareholder made a valid election for the
re-designation of some or all of their 2017 Shares as ordinary
shares of no par value each in the capital of the Company
designated as “Realisation Shares”.
Resolution 3 was to empower the Directors of the Company
to issue up to a maximum of 350 million C Shares and such
number of 2021 Shares as represents 20% of 2021 Shares
then in issue. The Board acknowledged that Resolution
3 did not pass by a small margin and consulted with major
shareholders ahead of proposing a resolution to disapply pre-
emption rights at the forthcoming Annual General Meeting.
On 19 April 2021, the Company announced the results of
the Elections. The purpose of the reorganisation was to allow
those Shareholders who wished to extend the life of their
investment in the Company beyond the planned end date
of Master Fund II, to be able to do so by having their 2017
Shares re-designated as 2021 Shares, with such 2021 Shares
investing in a new master fund, Master Fund III, which will
have a planned end date of 12 June 2028 and an investment
objective and policy substantially similar to that of Master
Fund II. Shareholders who did not wish to extend the life of
their investment to participate in Master Fund III were able to
make an express election to have their existing 2017 Shares
re-designated as Realisation Shares, which will continue to
participate solely in Master Fund II.

6
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
STRATEGIC REVIEW
Chairman’s Statement (continued)
Material events (continued)
Results of Elections
The Company announced that 62,562,883 2017 Shares
had been elected for re-designation as Realisation Shares
at the effective date, representing 13.4% of the 2017 Shares
currently in issue.
Consequently, 405,815,477 2017 Shares were re-designated
as 2021 Shares, representing the balance of 86.6% of the
2017 Shares currently in issue (including 650,000 shares
held in Treasury). Based on the above election results and the
2017 Share price as at close of business on 16 April 2021,
the 2021 Share class had an opening market capitalisation of
approximately US$266 million.
On 22 April 2021, 405,815,477 2021 Shares and 62,562,883
Realisation Shares were admitted to trading on the Specialist
Fund Segment of the Main Market of the London Stock
Exchange.
On 21 May 2021, the Company’s Annual General Meeting
(“AGM”) was held and all resolutions were passed on a poll.
Resolutions 8 to 11 passed at the AGM were not in the ordinary
course of business. The full text of these resolutions are
detailed in the Notice of AGM as announced by the Company
on 30 April 2021 and are summarised below:
• Resolution 8 – THAT the Company be authorised in
accordance with Section 315 of The Companies (Guernsey)
Law, 2008 (as amended) (subject to all applicable legislation
and regulations) to make market acquisitions of up to a
maximum of 14.99% per annum of its 2021 Shares and of
its Realisation Shares in issue, subject to the conditions set
out in the full text of Resolution 8 in the Notice of AGM;
• Resolutions 9 and 10 – THAT the Directors of the Company
be empowered, subject to the conditions set out in the full
text of Resolutions 9 and 10 in the Notice of AGM, to issue:
a. up to a maximum number of 40 million 2021 Shares
(Resolution 9);
b. up to a maximum number of a further (in addition to
that which is referred to in Resolution 9) 40 million 2021
Shares (Resolution 10);
• Resolution 11 – THAT the Directors of the Company be
empowered, subject to the conditions set out in the full text
of Resolution 11 in the Notice of AGM, to issue up to a
maximum number of US$150 million C Shares under the
Placing Programme (as defined in the Circular dated 28
March 2021).
Subsequent events
On 31 January 2022, the Company announced that following
the announcement of the NAV as at 31 December 2021, Fair
Oaks Income Fund (GP) had purchased 200,885 2021 Shares
in the secondary market. The Company’s 2021 Prospectus
states that in the event that the 2021 Shares trade at a discount
to any quarter end NAV, calculated on the date the NAV is
published, 25% of that quarter’s investment management fees
(in respect of the 2021 Shares) will be reinvested to purchase
2021 Shares in the secondary market.
On 7 February 2022, the Company declared an interim
dividend of 2.50 US cents per 2021 Share and 2.50 US cents
per Realisation Share in respect of the quarter ended 31
December 2022. The ex-dividend date was 17 February 2022
and the dividend was paid on 18 March 2022.
In February 2022, Russia launched an invasion of Ukraine. In
addition to the humanitarian and geopolitical consequences,
the invasion has caused volatility in global financial markets
and increased expectations of supply chain disruption
and cost inflation for oil, gas, metals, grains, vegetable oils
and other raw materials. The CLOs in which the Master
Funds invest do not hold any loans of Russian, Ukrainian or
Belarusian borrowers. The borrowers to which the CLOs are
exposed have low direct exposure to Russia, Ukraine and
Belarus but the profitability of some of them may be impacted
by increased input cost inflation. Manufacturers have already
been experiencing high input cost inflation during 2021 and
have been largely successful in passing cost increases through
to their customers but this may become more difficult in an
environment of extreme cost inflation and weaker consumer
confidence.
Professor Claudio Albanese
Chairman
13 April 2022

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
7
Portfolio Review
As at 31 December 2021, the Master Funds
1
held 19 CLO
equity positions and 13 CLO mezzanine investments offering
exposure to 1,219 loan issuers
2
and 20 CLO managers.
Control CLO equity positions (ownership of a majority of the
CLO equity, giving control over the decision to call, reset or
refinance the CLO) represented 85.3% of the portfolio’s market
value
3
.
Figure 2.1 – Portfolio composition of Master Funds
4
The Master Funds continued to rotate their portfolio as
mezzanine positions purchased at deep discounts in 2020
were repaid or sold. CLO equity exposure increased from 71%
at the end of 2020 to 87% as of December 2021, with the
remaining 13% representing B-rated CLO notes.
Figure 2.2 – Historical rating breakdown (excl. cash)
5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sep-19
Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Subordinated notes B BB
Four new control CLO equity investments were completed in
2021:
• Allegro CLO XIII
o CLO backed by a portfolio of US broadly-syndicated
secured loans.
o The manager of this CLO’s portfolio is AXA Investment
Managers, Inc.
o This CLO’s target portfolio had a principal value of
US$500 million across an expected 297 unique bank
loan issuers, with an expected weighted average
exposure per issuer of approximately 0.37%.
o The potential total return for this investment, as estimated
by Fair Oaks Capital Limited, the Investment Adviser
to the Company and Master Funds (the “Investment
Adviser”), was between 15% and 17% per annum.
• Rockford Tower CLO 2021-2
o CLO backed by a portfolio of US broadly-syndicated
secured loans.
o The manager of the CLO’s portfolio is Rockford Tower
Capital Management LLC, an affiliate of King Street
Capital Management.
o The Rockford Tower CLO 2021-2 target portfolio had a
principal value of US$400 million across an expected 174
unique bank loan issuers, with an expected weighted
average exposure per issuer of approximately 0.48%.
o The potential total return for the investments, as
estimated by the Investment Adviser, was between 15%
and 17% per annum.
• Wellfleet CLO 2021-2
o CLO backed by a portfolio of US broadly-syndicated
secured loans.
o The manager of the CLO’s portfolio is Wellfleet Credit
Partners LLC, the performing credit platform of Littlejohn
& Co.
o The Wellfleet CLO 2021-2 target portfolio had a principal
value of $450 million across an expected 228 unique
bank loan issuers, with an expected weighted average
exposure per issuer of approximately 0.40%.
o The potential total return for this investment, as estimated
by the Investment Adviser was between 14% and 16%
per annum.
STRATEGIC REVIEW
Investment Adviser’s Report
1
References to Master Fund III refer to FOMC III LP, which launched in April 2021 to continue the investment strategy of the Company. The Company via the 2021 Shares invests
through Master Fund III. References to Master Fund II refer to FOIF II LP, which launched in April 2017 to continue the investment strategy of the Company. The Company via the
Realisation Shares and FOMC III LP invests through Master Fund II. The Master Fund II and the Master Fund III together the “Master Funds”.
2
Based on the underlying loans in CLOs in which the Master Funds holds equity. Data as at 31 December 2021.
3
Percentage by market value of control CLO equity positions. Data as at 31 December 2021.
4
Breakdown by market value of the CLO investments held by the Master Funds, which includes its share in Wollemi Investments I LP (“Wollemi”). Percentages may not add up to
100% because of rounding errors. Data as at 31 December 2021.
5
Fair Oaks’ data on Original CLO ratings at month-end. NAV weighted, excluding cash. Source: Fair Oaks Income Fund monthly reports, RNS statements, trustee reports; as at
31 December 2021.
B Rated CLO Notes
13%
Subordinated Notes
87%

8
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
STRATEGIC REVIEW
Investment Adviser’s Report (continued)
Portfolio Review (continued)
• Fair Oaks Loan Funding IV
o CLO backed by a portfolio of European broadly
syndicated secured loans.
o The manager of this CLO’s portfolio is Fair Oaks Capital
Limited, the Investment Adviser to the Company and
Master Funds.
o This CLO’s current target portfolio had a principal
value of €400 million across an expected 136 unique
bank loan issuers, with an expected weighted average
exposure per issuer of approximately 0.71%.
o The potential total return for this investment, as estimated
by the Investment Adviser was between 14.2% to 15.2%
per annum
6
.
o The CLO’s notes were priced in November 2021 and
settled in January 2022.
The optimisation of the financing of existing portfolios was also
a key focus in 2021. Five positions representing $129 million of
par (or 23.4% of the CLO control equity portfolio) were reset,
reducing their respective cost of financing and extending
their investment periods. The combination of longer, higher
future distribution streams was consistently accretive to the
respective notes’ valuation.
• AIMCO 2017-A
o The original purchase of AIMCO 2017-A was completed
in April 2017 with a weighted average coupon for the
CLO financing of US Libor+1.85%.
o AIMCO 2017-A’s original investment period was
scheduled to end in July 2021.
o After the reset, AIMCO 2017-A will benefit from a
weighted average coupon of US Libor+1.61% and an
additional five-year investment period.
o As a result of the reset, the potential total return for
this investment, since inception, as estimated by the
Investment Adviser, will increase by 4.27% per annum
and the projected multiple on capital invested will
increase from 1.4x to 1.9x.
• Fair Oaks Loan Funding I
o Priced in July 2019 with a weighted average coupon for
the CLO financing of Euribor+1.85%.
o Fair Oaks Loan Funding I’s original investment period
was scheduled to end in July 2021.
o After the reset, Fair Oaks Loan Funding I benefits from
a weighted average coupon of Euribor+1.76% and an
investment period ending in July 2025.
o As a result of the reset, the potential total return for
this investment, since inception, as estimated by the
Investment Adviser, will increase by 2.83% per annum
and the projected multiple on capital invested will
increase from 1.23x to 1.62x.
• Fair Oaks Loan Funding II
o Priced in September 2020 with a weighted average
coupon for the CLO financing of Euribor+2.41%.
o Fair Oaks Loan Funding II’s original investment period
was scheduled to end in July 2021.
o After the reset, Fair Oaks Loan Funding II benefits from
a weighted average coupon of Euribor+1.68% and an
investment period ending in October 2025.
o As a result of the reset, the potential total return for
this investment, since inception, as estimated by the
Investment Adviser, will increase by 8.03% per annum
and the projected multiple on capital invested will
increase from 1.04x to 1.36x.
• Signal Peak CLO 4
o The original purchase of Signal Peak CLO 4 was
completed in October 2017 with a weighted average
coupon for the CLO financing of Libor+1.82%.
o The original investment period for Signal Peak CLO 4
was scheduled to end in October 2021.
o After the reset, Signal Peak CLO 4 will benefit from a
weighted average coupon of Libor+1.77% and an
investment period ending in October 2026.
o As a result of the reset, the potential total return for
this investment, since inception, as estimated by the
Investment Adviser, will increase by 4.2% p.a.
o In addition, as part of the reset transaction, the
documentation of the investment has been updated
to include ESG-focused investment restrictions. The
Company believes that this was the first instance of a
US CLO that has used a reset to implement this change.
• Fair Oaks Loan Funding III
o Priced in September 2020 with a weighted average
coupon for the CLO financing of Euribor+2.01%.
o Fair Oaks Loan Funding III’s original investment period
was scheduled to end in October 2023.
o After the reset, Fair Oaks Loan Funding III benefits from
a weighted average coupon of Euribor+1.79% and an
investment period ending in April 2026.
o As a result of the reset, the potential total return for
this investment, since inception, as estimated by the
Investment Adviser, will increase by 4.8% per annum and
the projected multiple on capital invested will increase
from 1.27x to 1.51x.
6
The Investment Adviser’s estimated potential return for Fair Oaks Loan Funding IV includes the expected impact of hedging the investment to USD and the waiver of the investment
management fees at Master Fund II on the amount invested.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
9
STRATEGIC REVIEW
Investment Adviser’s Report (continued)
7
Fair Oaks’ data on Original CLO ratings at month-end. NAV weighted, excluding cash. Source: Fair Oaks Income Fund monthly reports, RNS statements, trustee reports; as at 31
December 2021. Source: Intex.
8
Based on market value of the CLO investments, as at 31 December 2021. Percentages may not add up to 100% because of rounding errors. The number of investments is shown
in parentheses after each manager name.
9
Based on loan par value weighted by Master Funds ownership of Income Notes. Source: Intex.
10
Based on Moody’s sectors and loan par value weighted by Master Fund II’s ownership of Income Notes. Source: Intex.
Portfolio Review (continued)
As a result of these portfolio changes, the Master Funds’
exposure to USD denominated assets increased from 53% in
December 2020 to 73% at the end of 2021.
Figure 2.3 – Currency breakdown (excl. cash)
7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sep-19 Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20 Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21 Oct-21
Nov-21
Dec-21
USD EUR
The active management of the portfolio was instrumental to
allow the Master Funds to de-risk while taking advantage
of tactical market opportunities in 2016 and 2020, which
generated efficient risk-adjusted and asymmetric returns.
Going forward we expect this dynamic approach to continue
to benefit the Master Funds as volatility increases in broader
markets.
All control CLO equity investments (including reset and
refinancings) completed since July 2019 have included
ESG exclusion criteria in the CLO’s documentation. CLO
investments subject to ESG investment criteria represented
58% of all CLO equity investments in the portfolio as of the
end of 2021.
Figure 2.4 – CLO equity investments subject to ESG investment
restrictions
Figure 2.5 – CLO manager diversification of Master Funds
8
31%
11%
9%
7% 7%
5% 5%
4%
4% 4%
3%
2%
2%
1% 1% 1%
1%
1%
1%
0%
0%
5%
10%
15%
20%
25%
30%
35%
Fair Oaks (5)
Axa IM (2)
Wellfleet (2)
Mariner (4)
Post Advisory (1)
AIMCO (1)
King Street (1)
Alcentra (1)
Ares Capital (1)
HPS (2)
Arrowmark (1)
PrudenƟal (2)
Octagon (1)
Symphony (1) PineBridge (1)
Investcorp (2)
CSAM (1)
CVC (1)
Oak Hill (1)
GSO Blackstone (1)
Figure 2.6 – Geographical spread of loans (top five) and
currency breakdown
9
72.4%
6.1%
5.5%
3.6%
3.0%
0% 10% 20% 30% 40% 50% 60% 70%
80%
United States
France
United Kingdom
Netherlands
Germany
EUR, 33.0%
USD, 67.0%
Figure 2.7 - Industry diversification by Moody’s (top 10)
10
14.1%
9.4%
8.6%
6.9%
5.9%
4.9%
4.9%
4.9%
4.5%
4.0%
0% 2% 4% 6% 8% 10%12% 14
%16%
Healthcare & PharmaceuƟcals
Services: Business
High Tech Industries
Banking, Finance, Insurance & Real Estat
e
TelecommunicaƟons
Beverage, Food & Tobacco
Services: Consumer
ConstrucƟon & Building
Chemicals, PlasƟcs & Rubber
Capital Equipment
Other CLO equity
42%
CLO equity subject
to ESG investment
restrictions
58%

10
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
STRATEGIC REVIEW
Investment Adviser’s Report (continued)
Portfolio Review (continued)
Figure 2.8 – Rating breakdown
11
The focus on originating and controlling CLO equity note
investments has paid dividends in the form of superior
fundamental performance. Origination and control allowed
the Master Funds to veto specific loans when the transactions
were launched and to monitor and influence the CLOs over
time. Lower fees in primary investments also allowed CLO
managers to construct more conservative portfolios with no
need to “stretch for yield”. As a result, the Master Funds have
benefitted from underexposure to sectors such as retail or
energy.
Quarterly distributions continue to improve as a result of
performance and the larger allocation to CLO equity notes.
Distributions in 2021 totalled US$71.7 million and distributions
in January 2022 were US$20.6 million, compared to US$18.9m
for October 2021.
Figure 2.9 highlights the annualised equity distributions
for transactions present in the portfolio from Q2 2019 and
compares it with the market. In terms of relative performance,
even the investments in Master Funds’ lowest quartile in terms
of performance outperformed the market median.
Figure 2.9 – Annualised Equity Distributions (over par)
12
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20Q1-21 Q2-21Q3-21 Q4-21Q1-22
Median - Master Funds Median - Market
Figure 2.10 – Overcollateralisation test headroom
13 & 14
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
AIMCO 2017-AA SU
B
AWPT 2017-6A SUB
ELM 2014-1A SUB
MARNR 2015-1A SUB MARNR 2016-3A SUB MARNR 2017-4A SUB
ALLEG 2017-2A SUB
POST 2018-1A SUB
WELF 2018-1A SUB
SHACK 2018-12A SUB
ARES 2015-35RA SUB
HLM 13A-18 SUB
FOAKS 1X SUB FOAKS 2X SUB
FOAKS 3X SUB
ALLEG 2021-1X SUB
ROCKT 2021-2X SUB
WELF 2021-2X SUB
Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Dec-21
Looking at the sustainability of these cashflows, the OC-test
headroom, which determines whether distributions may
be temporarily diverted from the CLO Equity, has shown a
continuous improvement since October 2020, reducing the
potential for any future cash-flow diversion.
US Loan Market Update
The US leveraged loan market continued to recover in 2021.
The average bid price of the S&P US Leveraged Loan Index
was 98.64 on 31 December 2021, compared to 96.19 on 31
December 2020 and a 2020 intra-year low of 76.23 on 23
March 2020.
11
Based on loan par value weighted by the Master Funds proportional ownership of Income Notes. Source: Intex. Based on S&P deal ratings. Due to rounding errors, the
percentages may not sum to 100%.
12
Median market Source: Intex, Barclays. Based on annualised quarterly distributions over par.
13
Source: Intex.
14
The OC-test headroom for FOAKS 3 was reduced in July 2021 by the first distribution to the Subordinated Notes, which included a distribution of the excess principal balance that
had accumulated since the CLO’s closing date. It was reduced again in December 2021 by the refinancing of the CLO liabilities which involved a new capital structure and test levels.
B, 30.7%
B+, 14.0%
NR, 9.4%
B-, 27.7%
BB, 4.3%
BBB-, 0.1%
CCC+ and
below, 4.6%
BB-,
7.4%
BB+, 1.8%

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
11
STRATEGIC REVIEW
Investment Adviser’s Report (continued)
14
Source: S&P/LSTA Leveraged Loan Index.
15
S&P Global Intelligence and JP Morgan. Data as at 31 December 2021 unless otherwise stated. Based on S&P/LSTA Leveraged Loan Index.
16
S&P Global Intelligence, Q4-2021. Distribution by year of maturity.
17
Source: S&P Global Market Intelligence.
US Loan Market Update (continued)
Figure 2.11 - Average bid price of US leveraged loans, BB and
B rated loans
14
60
65
70
75
80
85
90
95
100
105
Dec-17
Feb-18 Apr-18
Jun-18
Aug-18
Oct-18
Dec-18
Feb-19 Apr-19
Jun-19
Aug-19
Oct-19
Dec-19
Feb-20 Apr-20
Jun-20
Aug-20
Oct-20
Dec-20
Feb-21 Apr-21
Jun-21
Aug-21
Oct-21
Dec-21
US loans BB rated B rated
The trailing 12-month loan default rate fell from 3.83% in
December 2020 to 0.29% in December 2021.
Figure 2.12 – US loan default rate
15
0%
1%
2%
3%
4%
5%
6%
Jun-16
Sep-16 Dec-16
Mar-17
Jun-17
Sep-17 Dec-17
Mar-18
Jun-18
Sep-18 Dec-18
Mar-19
Jun-19
Sep-19 Dec-19
Mar-20
Jun-20
Sep-20 Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
The US distressed ratio (the percentage of loans trading below
80c, a potential indicator of the direction of future defaults)
decreased from 2.2% in December 2020 (and 56.8% in March
2020) to 1.0% in December 2021.
Figure 2.13 – US loan price distribution
16
97%
57%
0%
20%
40%
60%
80%
100%
120%
Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21
Below 90
Below 80
Below 70
The US loan market was supported in 2021 by increased
investor demand for floating-rate assets in response to the
expected interest rate increases in 2022. Prime loan funds saw
positive net inflows, the first calendar year since 2017. Total
2021 inflows totalled US$57.3 billion compared to US$27.8
billion of outflows in 2020.
Figure 2.14 – Flows into loan funds by year
17
(60)
(40)
(20)
-
20
40
60
80
January February March April May June July August SeptemberOctober November
December
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
The strength of the loan market allowed companies to
refinance shorter term maturities. The number of loans due to
be repaid in the next few years is limited. The notional of US
loans maturing in 2022-2024 has fallen from US$386 billion
as of year-end 2020 to US$177 billion as of year-end 2021
(Figure 2.15).
Figure 2.15 – Maturity wall of the US loan market of performing
loans (US$billion)
17
$1bn
$33bn
$143bn
$244bn
$258bn
$221bn
$443bn
-
50
100
150
200
250
300
350
400
450
500
2022 2023 2024 2025 2026 2027 2028 or
later
$ billion
Maturity
As of Dec 31, 2020 As of Dec 31, 2021
The lack of loan maturities in the short to medium term,
combined with strong earnings in 2021, have supported high
cash-flow and interest coverage, both supportive given the
potential for higher interest rates. Bottom-up credit analysis
continues to be key as the market average hides an extensive
range of fundamental performance. For example, 9% of
issuers in the S&P/LSTA US Leverage Loan Index have cash-
flow coverage of less than 1.5x, putting them at risk as rates
and interest costs increase.
The combination of inflows into loan funds, very low levels of
distressed loans and limited maturities supported a low default
outlook for 2022 and beyond. According to S&P Leveraged
Commentary Data’s (“LCD”) December 2021 quarterly survey
of market participants, the expectation was that the US loan
default rate in 2022 would be 0.91%.

12
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
18
S&P Global Intelligence and Moody’s. Data as at 31 December 2021 unless otherwise stated. Based on S&P/LSTA Leveraged Loan Index.
19
The distressed ratio (loans trading below 80c, a potential indicator of the direction of future defaults).
20
Source: S&P European Leveraged Loan Index.
21
S&P Global Intelligence, 31 December 2021. Distribution by year of maturity.
22
Source: S&P Global Market Intelligence.
STRATEGIC REVIEW
Investment Adviser’s Report (continued)
European Loan Market Update
The trailing 12-month loan default rate fell from 2.6% in
December 2020 to 0.6% in December 2021. The European
distressed ratio (the percentage of loans trading below 80c, a
potential indicator of the direction of future defaults) decreased
from 2.6% in December 2020 (and 35.6% in March 2020) to
0.6% in December 2021.
Figure 2.16 – European loan default rate
18
0%
1%
2%
3%
4%
5%
6%
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Figure 2.17 – European Leveraged Loan Index (“ELLI”) distress
ratio
19
0%
5%
10%
15%
20%
25%
30%
35%
40%
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
The European leveraged loan market continued to recover in
2021. The average bid price of the S&P European Leveraged
Loan Index was 98.77 on 31 December 2021, compared to
97.55 on 31 December 2020 and a 2020 intra-year low of
78.92 on 24 March 2020.
Figure 2.18 – Average bid price of EUR leveraged loans, BB
and B rated loans
20
80
85
90
95
10
0
105
Dec-17 Jun-18 Dec-18 Jun-19 Dec-19Jun-20Dec-20Jun-21Dec-21
EUR loans BB rated B rated
In Europe, the notional of EUR loans maturing in 2022-2024
has fallen from EUR 75 billion as of year-end 2020 to EUR 35
billion as of year-end 2021 (Figure 2.19).
Figure 2.19 – Maturity wall of the EUR loan market of performing
loans (EUR billion)
21
£6bn
£29bn
£49bn
£62bn
£34bn
£
76bn
£7bn
-
10
20
30
40
50
60
70
80
2023 2024 2025 2026 2027 2028 2029 or later
Maturity
As of Dec 31, 2020 As of Dec 31, 2021
US CLO Market Update
The primary US CLO market in 2021 saw a record new
issuance volume of US$187 billion, a significant increase from
US$93 billion in 2020. Refinancings and resets in 2021 totalled
US$113.3 billion (285 deals) and US$137.6 billion (266 deals)
respectively, compared to US$19.9 billion (83 deals) and
US$11.4 billion (22 deals) respectively in 2020. Forecast for
CLO new issuance in 2022 were US$90 – US$100 billion and
forecasts for refi/reset volume were in a very wide range of
US$40 billion to US$140 billion.
Figure 2.20 – US CLO new issue volume
22
$0bn
$20bn
$40bn
$60bn
$80bn
$100bn
$120bn
$140bn
$160bn
$180bn
$200bn
2002 2003 2004 2005 200
6
2007 2008 2009 2010
2011 2012 2013
2014 2015
2016 2017 2018 2019
2020 2021
Despite the record volumes, CLO AAA spreads were stable in
2021, supported by increasing investor interest.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
13
STRATEGIC REVIEW
Investment Adviser’s Report (continued)
European CLO Market Update
The European CLO market also saw a record new issuance
of EUR38.6 billion in 2021, compared to EUR22.1 billion in
2020 and EUR29.8 billion in 2019
23
. Refinancings and resets
in 2021 totalled EUR19.1 billion (61 deals) and EUR41.9 billion
(99 deals) respectively, compared to zero deals and EUR0.89
billion (2 deals) respectively in 2020. Forecasts for European
CLO new issuance in 2022 were EUR25-30 billion
23
. The
Q1 pipeline for EU CLOs included 28 deals, which is a large
amount, equivalent to a EUR40 billion annualised run-rate.
Figure 2.21 – EUR CLO new issue volume
23
$0bn
$5bn
$10bn
$15bn
$20bn
$25bn
$30bn
$35bn
$40bn
$45bn
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
As in the US, European AAA CLO spreads were stable in
2021, despite record issuance.
We believe that investor interest in floating-rate assets will
continue to support demand for CLO debt, given its relative
value and operational simplicity. Whereas CLO notes can
be settled on a T+2 basis using Clearstream or DTC, loan
settlements are challenging and have been subject to
increased delays.
As we predicted last year, the inclusion of ESG language
in CLOs has become prevalent. Fair Oaks continues to
be at the forefront of these developments, with all primary
investments (including resets and refinancings) in CLO control
equity positions since July 2019 having been subject to ESG
investment restrictions.
Outlook
In addition to the humanitarian and geopolitical consequences,
the invasion of Ukraine by Russia in February 2022 has caused
increased volatility in global financial markets and increased
expectations of supply chain disruption and cost inflation for oil,
gas, metals, grains, vegetable oils and other raw materials. The
CLOs in which the Master Funds invest do not hold any loans
of Russian, Ukrainian or Belarusian borrowers. The borrowers
to which the CLOs are exposed have low direct exposure
to Russia, Ukraine and Belarus but the profitability of some
of them may be impacted by increased input cost inflation.
Manufacturers have already been experiencing high input
cost inflation during 2021 and have been largely successful
23
Source: S&P Global Market Intelligence.
24
As at 31 December 2021.
in passing cost increases through to their customers but this
may become more difficult in an environment of extreme cost
inflation and weaker consumer confidence.
While loan and CLO valuations may be impacted by increased
risk premiums across financial markets, we do not currently
expect the CLOs in which the Master Funds invest to
experience a significant increase in credit losses as a result
of the invasion and its effect on the global economy. There
is also a potential benefit to the Master Funds’ CLO equity
investments as CLOs reinvest prepayments in loans at lower
prices or higher margins during periods of market volatility.
Notwithstanding the increased macro-economic uncertainty,
we believe that the Company and the Master Funds are well
positioned to generate attractive risk-adjusted returns in 2022:
• Stable and attractive dividend yield: dividend yield of 16.1%
24
supported by distributions from new investments. The
Master Fund II received US$20.6 million worth of quarterly
distributions in January 2022, compared to US$18.9 million
in October 2021. FOLF IV, a new investment completed in
December, is scheduled to make its first distribution in July.
• Floating-rate: The floating-rate nature of CLO assets
(corporate loans) and liabilities (CLO debt) protects returns
on CLO investments from the impact of expected Fed
and ECB rate increases. Furthermore, increasing interest
rates are likely to support investor demand for floating-rate
assets, potentially supporting CLO liabilities.
• Existing, high-quality portfolio and strong sourcing ability:
CLO new issue supply in 2022 could be significantly below
that seen in 2021, generating a demand-supply imbalance
in CLO equity and debt given increasing demand for
floating-rate assets. The Master Funds benefits from strong,
long-term relationships with CLO managers, including
preferential access to Fair Oaks-managed CLOs.
• Differentiated investor base: Their floating-rate nature and
specialist investor base have the potential to decouple CLO
assets from potential volatility in broader markets.
• Structural advantages: Supported by the Master Funds’
rigorous valuation policy, fixed life of the underlying Master
Funds and discount management provisions, including
quarterly reinvestment of 25% of management fees if the
Company does not trade at or above NAV.
We continue to believe that the 16.1%
24
dividend yield offered
by the Company, supported by a high-quality portfolio of
primarily first-lien, senior secured loans with very attractive
long-term, non-mark-to-market financing represents one of
the most attractive risk-adjusted opportunities available to
investors in the current market environment.
Fair Oaks Capital Limited
13 April 2022

14
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
Risks and uncertainties
The Board of Directors is responsible for and has in place a rigorous risk management framework and risk matrix to identify,
assess, mitigate, manage, review and monitor those risks. This is all reviewed at least quarterly by the board and on a much more
frequent basis by the Investment Adviser.
The Directors have carried out a robust assessment of the principal, secondary and emerging risk areas relevant to the performance
of the Company including those that would threaten its business model, future performance, solvency and liquidity. The principal
risks are detailed below.
Throughout the year, due regard has been paid to emerging risks, although during the period changes to the identified risks can be
characterised as being more of an evolving nature than new and previously unidentified risks. After considering the risks associated
with relevant uncertainties created by emerging risks (including the impact on markets and supply chains of geo-political risks such
as the current crisis in Ukraine, the risk of further COVID-19 uncertainty, and continuing macro-economic factors and inflation),
the Board believes that the Company and the Master Funds are well placed to manage its business risks successfully. The Board
is in regular communication with the Investment Adviser who continues to closely monitor the performance of the respective
investments of the Master Funds and update the Company on current and emerging risks.
In respect of the Company’s system of internal controls and reviewing its effectiveness, the Directors:
• are satisfied that they have carried out a robust assessment of the principal risks facing the Company, including those that
would threaten its business model, future performance, solvency or liquidity; and
• have reviewed the effectiveness of the risk management and internal control systems including material financial, operational
and compliance controls (including those relating to the financial reporting process) and no significant failings or weaknesses
were identified.
The Risk Committee reviews the Company’s overall risks at least four times a year and monitors the risk control activity designed
to mitigate these risks.
Principal and emerging risks
The principal and emerging risks associated with the Company include:
Risk/Description Control / Mitigation
Investment and financial risk - Market risk
Market risk is the risk of changes in market prices
affecting the Company’s income and/or the value
of its investments. This is impacted by a variety
of factors including macro-economic conditions,
increased default rates, higher interest rate spreads,
exchange rates, inflation and general market pricing
of similar CLO investments which will all effect the
Company and its Net Asset Value.
The Company’s exposures to market risk mainly
comes from movements in the fair value of its
investments in the Master Funds and on a look-
through basis to the underlying CLO investments.
This risk cannot be mitigated in full but the impact can be reduced
by diversification of the underlying CLO portfolio. The Company’s
objective of market risk management is to manage and control
market risk exposures within acceptable parameters while
optimising the return on investments.
The Company’s market risk is monitored closely and managed
and mitigated as far as possible by the Investment Adviser through
active portfolio management and the maintenance of a diversified
investment portfolio. This was seen, for example, in 2020 when the
Master Fund II took advantage of its flexible investment strategy
to ensure an effective asset allocation and a de-risking process,
selling CLO subordinated notes and reinvesting proceeds in CLO
rated notes.
The Risk Committee formally monitors the investment performance
of the Company at least four times a year, including when the
Investment Adviser reports on the performance of the Company’s
portfolio at the Board meetings. The investment guidelines and
restrictions, as detailed in the prospectus of the Company, ensures
adequate diversification of the Master Funds underlying investments.
STRATEGIC REVIEW
Strategic Report

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
15
STRATEGIC REVIEW
Strategic Report (continued)
Principal and emerging risks (continued)
Risk/Description (continued) Control / Mitigation (continued)
Investment and financial risk - Credit risk
Credit risk arises principally from debt securities
held. The risk is that underlying CLO investments
or financial assets held by the Company default,
leading to investment losses, a reduction in cash
flows receivable by the Master Funds and a fall in the
Company’s NAV. For the Company this is impacted
by a variety of factors including deterioration in
underlying credit ratings and credit ratings of
counterparties and the secondary market for CLO
investments maybe less liquid. The Company
considers and aggregates all elements of credit risk
exposure, such as individual obligation default risk,
country risk and sector risk.
The Company’s policy on credit risk mirrors that of the Master Funds,
which is to minimise its exposure to counterparties with perceived
higher risk of default by dealing only with counterparties that meet
the credit standards set out in the Company’s prospectus, and by
taking collateral.
Ratings deterioration is expected to have little impact through to
maturity of CLOs except in extremis. The Investment Adviser carries
out extensive due diligence on the Master Funds’ underlying CLO
investments and monitors credit ratings performance regularly.
These risks are mitigated as far as possible by the Investment
Adviser through active portfolio management and the maintenance
of a diversified investment portfolio. The Investment Adviser seeks
to achieve this diversification of the portfolio for this risk in terms of
underlying assets, issuer section, geography and maturity profile,
please see the Investment Adviser’s Report and Note 5 of the
Financial Statements for further details of this diversification.
Financial risk – Counterparty risk
Counterparty risk can arise through the Company’s
exposure to particular counterparties for executing
transactions and the risk that the counterparties will
not meet their contractual obligations.
Counterparty exposures are monitored by the Investment Adviser
and movements reported regularly to the Board. The Company’s
cash management policy ensures cash and cash equivalents are
only to be placed with designated institutions that meet the credit
standards set out in the Company’s prospectus. In addition, the
aggregate amount deposited or invested by the Company with any
single bank or other non-government counterparty (including their
associates) shall not exceed 20% of the NAV in aggregate, and also
of the NAV of each Share class, at the time of investment.
Financial risk – Liquidity risk
Liquidity risk is the risk that the Company will
encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled
by delivering cash or another financial asset.
The Master Funds’ CLO investments are not publicly
traded or freely marketable, and there may be limited
or no secondary market liquidity, as a result the
realising assets to create liquidity in a timely manner
maybe difficult.
The Administrator and Investment Adviser review the Company’s
income and cash flow forecasts on a monthly or ad hoc basis as
required to ensure, as far as possible, the Company will always
have sufficient liquidity to meet its liabilities when due.
Board reviews cash flow forecasts quarterly and ad hoc as required
for buy-backs and distributions. Solvency tests are required prior to
the Company making any distributions.

16
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
STRATEGIC REVIEW
Strategic Report (continued)
Principal and emerging risks (continued)
Risk/Description (continued) Control / Mitigation (continued)
Operational risk
This is the risk of loss resulting from inadequate or
failed internal processes, people and systems or
from external events. This can include, but is not
limited to, internal/external fraud, business disruption
and system failures, data entry errors and damage to
physical assets.
The COVID-19 pandemic created a risk that service
providers will be disrupted by partial or full lockdown
provisions.
The Board is ultimately responsible for all operational facets of
performance including cash management, asset management,
regulatory and listing obligations. The Company has no employees
and so enters into a series of contracts/legal agreements with
a series of service providers to ensure that both operational
performance and regulatory obligations are met. The Board
performs ongoing internal monitoring of operational processes and
controls and receives regular reports from the administrators of the
Company, along with a report from the Auditors.
The impact of lockdowns as part of the government response to
the COVID-19 pandemic meant that service providers had to invoke
business recovery plans and adjust ways of working. This was
successfully achieved throughout the COVID-19 pandemic by all
service providers but it is an area of ongoing focus and monitoring
by the Board.
Compliance and regulatory risk
Compliance and regulatory risk can arise where
processes and procedures are not followed correctly
or where incorrect judgement causes the Company
to be unable to meet its objectives or obligation,
exposing the Company to the risk of loss, sanction or
action by Shareholders, counterparties or regulators.
The Company is required to comply with the Prospectus Rules, the
Disclosure Guidance and Transparency Rules and the Market Abuse
Directive (as implemented in the UK through Financial Services and
Markets Authority). Any failure to comply could lead to criminal or
civil proceedings. The Investment Adviser and Administrator monitor
compliance with regulatory requirements and the Administrator
presents a report at quarterly Board meetings.
Political and economic risk
Geopolitical events may have an adverse effect on
the Company and its operations.
The invasion of Ukraine by Russia in February
2022 has been an emerging risk which has caused
increased volatility in global financial markets and
increased expectations of supply chain disruption
and cost inflation for oil, gas, metals, grains,
vegetable oils and other raw materials.
The Risk Committee monitors geopolitical risks on an ongoing basis
with independent advice received on emerging developments likely
to affect the Company.
The Investment Adviser will continue to monitor the economic
impacts of the invasion of Ukraine by Russia. As detailed further in
the Investment Adviser’s Report, while loan and CLO valuations may
be impacted by increased risk premiums across financial markets,
it is not currently expected the CLOs in which the Master Funds’
invest to experience a significant increase in credit losses as a result
of the invasion and its effect on the global economy.
Environmental, Social and Governance (ESG)
Failure of the Company to identify potential future
ESG requirements could lead to the Company’s
shares being less attractive to investors.
The Investment Adviser has been a signatory to the UN Principles
for Responsible Investment (“UN PRI”) since July 2016 and is
committed to applying the UN PRI to all stages of its investment
criteria. All CLO equity investments completed by the Master Funds
since 2019 have included ESG-related investment criteria that
prohibit investment in certain industry sectors which are considered
to be environmentally or socially harmful.
The Board, the Investment Adviser and all other service providers
continue to monitor developments in the ESG reporting requirements
and is committed to increasing awareness in credit markets.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
17
STRATEGIC REVIEW
Strategic Report (continued)
Going Concern
The Directors have assessed the financial position of the Company as at 31 December 2021 and the factors that may impact
its performance (including the potential impact on markets and supply chains of geo-political risks such as the current crisis in
Ukraine, the risk of further COVID-19 uncertainty and continuing macro-economic factors and inflation) in the forthcoming year.
COVID-19
The Directors are aware that further economic disruption caused by COVID-19 may mean there is an increased chance that the
Master Funds’ CLO investments, will experience higher loan defaults and CCC ratings, breach over-collateralisation tests and, as
a result, withhold some quarterly distributions from some CLO noteholders. Furthermore, the Directors are well aware of the risk
of cash flow diversion of the Master Funds’ CLO investments so will not fully invest all available capital without leaving available
liquidity for expenses. Despite this the Master Funds have continued to make income distributions to the Company throughout
2021, as the Master Funds’ CLO investments continue to comply with their over-collateralisation tests and make cash distributions.
Russia/Ukraine crisis
The Master Funds CLO investments do not hold any securities in the Russia/Ukraine region and as such the performance or
creditworthiness of the underlying CLOs are not expected be significantly impacted. Commodity prices due to the invasion of
Ukraine (mainly oil/gas, metals and wheat) may impact some of the companies to which the CLOs have loans but many companies
were already subject to input price inflation before the Ukraine invasion and it is not expected that the additional cost inflation will
significantly impact the performance of the CLOs.
The Investment Adviser continues to carefully monitor the performance of the Master Funds’ investments, working closely with the
Directors on current and emerging risks to the Company.
Following due consideration and after a review of the Company’s holdings in cash and cash equivalents, investments and a
consideration of the income deriving from, and the viability of, the investment in the Master Funds the Directors believe that it
is appropriate to adopt the going concern basis in preparing the Financial Statements, as the Company has adequate financial
resources to meet its liabilities as they fall due.
Viability Statement
The Directors have conducted a robust assessment of the viability of the Company over a three-year period from the date of
signing this report to April 2025, taking account of the Company’s current position and the potential impact of the principal and
emerging risks documented above.
In making this statement, the Directors have considered the resilience of the Company, taking into account its current position,
the principal risks facing the Company in severe but plausible scenarios and the effectiveness of any mitigating actions. This
assessment has considered the potential impacts of these risks on the business model, future performance, solvency and liquidity
over the period.
The Directors have determined that the three-year period to April 2025 is an appropriate period over which to provide its viability
statement as this is a reasonable period over which risks relating to the asset class should be considered.
At 31 December 2021, the Company is primarily invested into the Master Fund III. The Master Fund III has a planned end date
of 12 June 2028. The Company is also invested into the Master Fund II which has a planned end date of June 2026. On 28
March 2021, the Company published a Prospectus and Circular in relation to a Reorganisation Proposal and Placing Programme
Proposal. In them, the Company put forward the proposals, which facilitate an extension of Shareholders’ investments through a
new class of 2021 Shares deployed through the Master Fund III, while also offering an option to elect for Realisation Shares. On 19
April 2021, the Company announced that 86.6% of Shareholders had elected to re-designate their 2017 Shares to 2021 Shares
and participate in the Master Fund III with the remaining 13.4% electing to re-designate to Realisation Shares. The Realisation
Shares remain invested directly into the Master Fund II.

18
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
Viability Statement (continued)
In making their three-year assessment, various factors were taken into consideration by the Directors, which included the
Company’s NAV, net income, capital repayments and resulting cash flows and dividend cover over the period. These metrics
were subjected to stress tests which, in light of the ongoing uncertainty in economies and markets caused by COVID-19 and the
Ukraine/Russia conflict, involved flexing a number of main assumptions underlying the forecast and default rates significantly higher
than the five-year average. Where appropriate, this analysis was carried out to evaluate the potential impact of the Company’s
principal risks actually occurring, primarily, severe changes to macro-economic conditions, increased defaults, deterioration in
underlying credit ratings and downgrading or illiquidity of non-investment grade loans. Based on this assessment, the Directors
have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over
the period to April 2025.
Management Arrangements
Investment Adviser
The Directors are responsible for the determination of the Company’s investment policy and have overall responsibility for the
Company’s activities. The Company has, however, entered into an Investment Advisory Agreement with the Investment Adviser
under which the Investment Adviser has been appointed to provide investment advisory services, which include analysing the
progress of all assets and investments of the Company and advising the Company on liquidity and working capital retention issues,
subject to the overriding supervision of the Directors.
The Directors consider that the interests of shareholders, as a whole, are best served by the continued appointment of the
Investment Adviser to achieve the Company’s investment objectives. A summary of these terms, including the investment advisory
fee and notice of termination period, is set out in note 8 of the Financial Statements.
Custody Arrangements
The Company’s underlying assets in Master Fund II are held in custody by BNP Paribas Securities Services S.C.A., Guernsey
Branch, (“BNP”) pursuant to an agreement dated 9 March 2017 and the Company’s underlying assets in Master Fund III are held
in custody by U.S. Bank Global Corporate Trust Services, UK Branch (“US Bank”) (together the “Custodians”), pursuant to an
agreement dated 26 March 2021.
The Company’s underlying assets in the Master Fund II and the Master Fund III are registered in the name of the respective
Custodian in each case within a separate account designation and may not be appropriated by the Custodian for its own account.
The Board conducts an annual review of the custody arrangements as part of its general internal control review. The Board also
monitors the credit rating of the Custodians, to ensure the financial stability of the Custodians are being maintained to acceptable
levels. As at 31 December 2021, the credit rating of BNP was Aa3 as rated by Moody’s (31 December 2020: Aa3) and A+ by
Standard & Poor’s (31 December 2020: AA-) and the credit rating of US Bank was A1 as rated by Moody’s and AA- by Standard
& Poor’s.
Administrator
Administration and Company Secretarial services are provided to the Company by Sanne Fund Services (Guernsey) Limited
(formerly Praxis Fund Services Limited) (the “Administrator”). The Administrator also provides these services to Master Fund
II, Master Fund III, Wollemi, Cycad and the General Partner to these funds. Other services which the Administrator provides
the Company include assisting with the AIFMD, Common Reporting Standard and FATCA reporting. A summary of the terms,
including fees, is set out in note 8 of the Financial Statements.
STRATEGIC REVIEW
Strategic Report (continued)

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
19
The Directors of the Company, all of whom are non-executive
and independent, are listed as follows:
Professor Claudio Albanese (Chairman of the Board and
Chairman of the Management Engagement Committee)
is the Head of Analytics at Global Valuation. He received a
PhD in Theoretical Physics from ETH Zurich in 1988. He
has held faculty positions at numerous academic institutions
including ETH Zurich, UCLA, the Courant Institute at NYU,
and Princeton University. In 1994 he joined the University of
Toronto as Associate Professor of Mathematical Physics and
in that year he redirected his career towards Mathematical
Finance. In 1998 he spent one year at Morgan Stanley at
the credit derivatives trading desk. In 2004 he joined Imperial
College London as Professor of Mathematical Finance and
has then been Honorary Professor at King’s College and the
CASS School of Business. Claudio consults for several banks,
speaks at numerous conferences and has published over 50
articles in academic and professional journals. Claudio founded
Global Valuation, a software firm dedicated to the simulation of
banks’ OTC portfolios, XVA metrics, stress testing and model
risk. Claudio was non-executive director at Carador Income
Fund Plc from 2006 to 2013. Claudio is a UK resident.
Jonathan (Jon) Bridel (Chairman of the Audit Committee) is
currently a non-executive chairman or director of various listed
and unlisted investment funds and private equity investment
managers. Listings include the premium segment of the
Official List of the UK Listing Authority and the Specialist Fund
Segment of the London Stock Exchange. He was until 2011
Managing Director of Royal Bank of Canada’s investment
businesses in Guernsey and Jersey. This role had a strong
focus on corporate governance, oversight, regulatory and
technical matters and risk management. After qualifying
as a Chartered Accountant in 1987, Jon worked with Price
Waterhouse Corporate Finance in London and subsequently
served in a number of senior management positions in
Australia and Guernsey in corporate and offshore banking and
specialised in credit. He was also chief financial officer of two
private multi-national businesses, one of which raised private
equity. He holds qualifications from the Institute of Chartered
Accountants in England and Wales where he is a Fellow, the
Chartered Institute of Marketing and the Australian Institute of
Company Directors. He graduated with an MBA from Durham
University in 1988. Jon is a chartered marketer and a member
of the Chartered Institute of Marketing, a chartered director
and fellow of the Institute of Directors and is a chartered fellow
of the Chartered Institute for Securities and Investment. Jon is
a Guernsey resident.
Nigel Ward (Chairman of the Risk Committee and Chairman
of the Nomination and Remuneration Committee) is an IoD
qualified self-employed management consultant and non-
executive director. He has over 40 years’ experience in
international investment markets, credit and risk analysis,
portfolio management, corporate and retail banking, corporate
governance, compliance and the managed funds industry. He
is an independent non-executive chairman or director on the
board of several offshore funds and companies covering a broad
range of asset classes. Nigel was a founding Commissioner
of the Guernsey Police Complaints Commission, and is an
Associate of the Institute of Financial Services, a member
of the Institute of Directors and the Guernsey Investment
Funds Association and holder of the IoD Diploma in Company
Direction. Nigel is a Guernsey resident.
GOVERNANCE
Board of Directors

20
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
The following summarises the Directors’ directorships in other public companies:
Company Name Stock Exchange
Professor Claudio Albanese
None
Jon Bridel
DP Aircraft 1 Limited London Stock Exchange – SFS
SME Credit Realisation Fund Limited (in managed wind-down) London Stock Exchange – Main Market
Sequoia Economic Infrastructure Income Fund Limited London Stock Exchange – Main Market
The Renewables Infrastructure Group Limited
1
London Stock Exchange – Main Market
Nigel Ward
None
GOVERNANCE
Disclosure of Directorships in Public Companies
Listed on Recognised Stock Exchanges
1
Jon Bridel is due to retire at the Annual General Meeting in May 2022.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
21
The Directors of the Company are pleased to submit their Annual Report and the Audited Financial Statements (the “Financial
Statements”) for the year ended 31 December 2021. In the opinion of the Directors, the Annual Report and Audited Financial
Statements are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s
performance, business model and strategy.
The Company
The Company was incorporated and registered in Guernsey on 7 March 2014 under the Companies (Guernsey) Law, 2008.
The Company’s registration number is 58123 and it is regulated by the Guernsey Financial Services Commission (“GFSC”) as
a registered closed-ended collective investment scheme. The Company’s ordinary shares were listed on the Specialist Fund
Segment (“SFS”) of the London Stock Exchange (“LSE”) on 12 June 2014.
Results and Dividends
The results for the year are shown in the Statement of Comprehensive Income on page 41.
The Board declared dividends of US$45,580,951 during 2021 followed by an additional dividend declaration of US$11,250,380
declared on 7 February 2022 in relation to the year ended 31 December 2021 (dividends declared in relation to the year ended
31 December 2020: US$26,722,079). Further details of dividends declared or paid are detailed in note 4.
The Board paid or declared dividends to shareholders representing an amount in aggregate at least equal to the gross income
from investments, which are received from the Master Fund II and the Master Fund III in the relevant financial period attributable
to the Company’s investment in the Master Fund II and the Master Fund III, and Qualifying Short Term Investments less expenses
of the Company.
Independent Auditor
KPMG Channel Islands Limited were appointed on 12 May 2014 and continued to serve as Auditor during the financial year.
A resolution to re-appoint KPMG Channel Islands Limited as Auditor will be put to the forthcoming Annual General Meeting
(“AGM”).
Directors and Directors’ Interests
The Directors, all of whom are independent and non-executive, are listed on page 19.
None of the Directors has a service contract with the Company and no such contracts are proposed. Each independent non-
executive Director is entitled to a basic fee of £43,000 (31 December 2020: £43,000) each per annum. In December 2021, the
Board agreed an increase in their remuneration and, with effect from 1 January 2022, each non-executive Director is entitled to a
basic fee of £45,000 per annum.
The Directors had the following interests in the Company at 31 December 2021 and 31 December 2020, held either directly or
beneficially:
31 December 2021 31 December 2020
Name No. of 2021
Shares Percentage
No. of 2017
Shares Percentage
Claudio Albanese (Chairman) 9,697 0.00% 9,697 0.00%
Jon Bridel
1
40,000 0.01% 40,000 0.00%
Nigel Ward 60,000 0.01% 60,000 0.01%
GOVERNANCE
Directors’ Report
1
During January 2021, Jon Bridel transferred all shares registered in his name to his spouse, a PCA of Mr Bridel.

22
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
Substantial Shareholdings
As at 16 March 2022, being the date of the latest shareholder analysis prior to the publication of these Financial Statements, the
following 2021 shareholders had holdings in excess of 5% of the issued 2021 share capital:
Name No. of 2021 Shares Percentage of 2021 Shares
Vidacos Nominees Limited 44,788,005 11.04%
BBHSL Nominees Limited 36,825,565 9.07%
Nortrust Nominees Limited 35,093,808 8.65%
Vidacos Nominees Limited 27,184,806 6.70%
Related Parties
Details of transactions with related parties are disclosed in note 8 to these Financial Statements.
Regulatory Requirements
Since being admitted to the SFS on 12 June 2014, the Company has complied with the Prospectus Rules, the Disclosure
Guidance and Transparency Rules and the Market Abuse Directive (as implemented in the UK through Financial Services and
Markets Authority).
Foreign Account Tax Compliance Act
The Foreign Account Tax Compliance Act (“FATCA”) became effective on 1 January 2013. The legislation is aimed at determining
the ownership of US assets in foreign accounts and improving US tax compliance with respect to those assets. On 13 December
2013, the States of Guernsey entered into an intergovernmental agreement (“IGA”) with US Treasury, in order to facilitate the
requirements under FATCA. The Company registered with the Internal Revenue Service (“IRS”) on 21 November 2014 as a Foreign
Financial Institution (“FFI”).
Common Reporting Standard
The Common Reporting Standard (“CRS”), formerly the Standard for Automatic Exchange of Financial Account Information,
became effective on 1 January 2016. CRS is an information standard for the automatic exchange of information developed by
the Organisation for Economic Co-operation and Development (“OECD”). CRS is a measure to counter tax evasion and it builds
upon other information sharing legislation, such as FATCA, the UK-Guernsey IGA for the Automatic Exchange of Information and
the European Union Savings Directive, and has superseded the UK-Guernsey Intergovernmental Agreement for the Automatic
Exchange of Information with effect from 1 January 2016. Reporting under CRS in Guernsey is completed on an annual basis.
Alternative Investment Fund Managers Directive (“AIFMD”)
The Company is categorised as a non-EU Alternative Investment Fund (as defined in the AIFMD) (“AIF”) and the Board of the
Company is a non-EU Alternative Investment Fund Manager (“AIFM”) (as defined in the AIFMD) for the purposes of the AIFMD and
as such neither it nor the Investment Adviser will be required to seek authorisation under the AIFMD. However, following national
transposition of the AIFMD in a given EU member state, the marketing of ordinary shares in AIFs (as defined in the AIFMD) that are
established outside the EU (such as the Company) to investors in that EU member state will be prohibited unless certain conditions
are met. Certain of these conditions are outside the Company’s control as they are dependent on the regulators of the relevant third
country and the relevant EU member state entering into regulatory co-operation agreements with one another.
The Directors have appointed the Risk Committee to manage the relevant disclosures to be made to investors and the necessary
regulators. On 18 February 2015, the FCA confirmed that the Company was eligible to be marketed via the FCA’s National Private
Placement Regime and the Company complied with Article 22 and 23 of the AIFMD for the year ended 31 December 2021.
In January 2017, the Company was authorised to market in Sweden, Finland and Luxembourg.
The Company issued a new prospectus on 28 March 2021, the Master Fund III was subsequently launched and invested into by
the Company during 2021 as discussed further on page 2. New principal documents were entered into during this period and all
matters were disclosed to investors as required under Article 23 of AIFMD. As the Board of the Company is the AIFM, the details of
the Company’s remuneration policy for the Directors is outlined on page 31 and accords with the principles established by AIFMD.
GOVERNANCE
Directors’ Report (continued)

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
23
Non-Mainstream Pooled Investments
The Company’s ordinary shares are considered as “excluded securities” for the purposes of the FCA Rules regarding the definition
and promotion of non-mainstream pooled investments (“NMPI”) because the returns to investors holding the Company’s ordinary
shares are, and are expected to continue to be, predominantly based on the returns from ordinary shares and debentures held
indirectly by the Company. The Board therefore believes that independent financial advisers can recommend the Company’s
ordinary shares to retail investors, although financial advisers should seek their own advice on this issue.
Reporting Fund Regime
The Company was accepted into the UK Reporting Fund regime with effect from 7 March 2014. Under this regime, which
effectively replaced the UK Distributor Status regime, an offshore investment fund operates by reference to whether it opts into the
reporting regime (“Reporting Funds”) or not (“Non-reporting Funds”).
A UK investor who disposes of an interest in a Reporting Fund should be subject to tax on any gains realised as capital gains
rather than income. Such investors will also be subject to income tax on the distributions received from the offshore fund and
their share of the excess of the offshore fund’s reported income over the distributions made (i.e. they will be subject to income tax
on their share of the offshore fund’s income regardless of whether this is distributed or not). Shareholders should seek their own
professional advice as to the tax consequences of the UK Reporting Fund regime.
Anti-bribery and Corruption
The Board acknowledge that the Company’s international operations may give rise to possible claims of bribery and corruption.
In consideration of The Bribery Act 2010, enacted in the UK, at the date of this report the Board had conducted an assessment
of the perceived risks to the Company arising from bribery and corruption to identify aspects of business which may be improved
to mitigate such risks. The Board has adopted a zero tolerance policy towards bribery and has reiterated its commitment to carry
out business fairly, honestly and openly.
Criminal Finances Act
The Board of the Company has a zero tolerance commitment to preventing persons associated with it from engaging in criminal
facilitation of tax evasion. The Board has satisfied itself in relation to its key service providers that they have reasonable provisions
in place to prevent the criminal facilitation of tax evasion by their own associated persons and will not work with service providers
who do not demonstrate the same zero tolerance commitment to preventing persons associated with it from engaging in criminal
facilitation of tax evasion.
UK Modern Slavery Act
The Board acknowledges the requirement to provide information about human rights in accordance with the UK Modern Slavery
Act. The Board conducts the business of the Company ethically and with integrity, and has a zero tolerance policy towards modern
slavery in all its forms. As the Company has no employees, all its Directors are non-executive and all its functions are outsourced,
there are no further disclosures to be made in respect of employees and human rights.
Employee Engagement & Business Relationships
The Company conducts its core activities through third-party service providers and does not have any employees. The Board
recognises the benefits of encouraging strong business relationships with its key service providers and seeks to ensure each is
committed to the performance of their respective duties to a high standard and, where practicable, that each provider is motivated
to adding value within their sphere of activity. Details on the Board’s approach to service provider engagement and performance
review are contained in the Management Engagement Committee Report.
Whistleblowing
The Board has considered the AIC Code recommendations in respect of arrangements by which staff of the Investment Adviser,
Custodian or Administrator may, in confidence, raise concerns within their respective organisations about possible improprieties
in matters of financial reporting or other matters. It has concluded that adequate arrangements are in place for the proportionate
and independent investigation of such matters and, where necessary, for appropriate follow-up action to be taken within their
organisation.
GOVERNANCE
Directors’ Report (continued)

24
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
GOVERNANCE
Directors’ Report (continued)
Environmental and Social Policy
Over the course of the last decade, renewable energy has grown materially as governments and investors started to realise the
need for sustainable energy sources. In 2021, countries worldwide continued to pursue decarbonisation plans and the renewable
growth trend is expected to continue going forward as more countries join the Paris Climate Accord which aims to achieve the
goal of net-zero carbon emissions by 2050.
The Company is a closed-ended investment company which has no employees or offices and therefore its own direct environmental
impact is minimal. The Company operates by outsourcing significant parts of its operations to reputable professional companies,
who are required to comply with all relevant laws and regulations and take account of social, environmental, ethical and human
rights factors, where appropriate.
The Board notes that the underlying entities which the CLOs are invested in will have a social and environmental impact over which
it has limited control. Europe, however, has seen the emergence of a number of new CLOs subject to Environmental, Social and
Corporate Governance (“ESG”) investment criteria. The inclusion of ESG language in CLOs has become more prevalent and is
likely to develop from sector-based negative screening towards ESG scoring. The Master Funds have been at the forefront of these
developments and, as of the end of December 2021, 58% of all CLO equity investments in the Master Funds portfolio included
ESG investment restrictions. These restrictions exclude any underlying collateral debt obligation whose primary business activity
is, amongst others, oil, gas or thermal coal extraction, upstream palm oil production, trade in weapons or firearms, hazardous
chemicals, pesticides and wastes, ozone-depleting substances, endangered or protected wildlife or wildlife products, tobacco
and predatory lending.
The Company has no direct greenhouse gas emissions to report from its operations, nor does it have responsibility for any other
emissions-producing sources, including those within its underlying CLOs portfolio.
In carrying out its investment activities and in relationship with suppliers, the Company aims to conduct itself responsibly, ethically
and fairly.
In addition, the Investment Adviser has been a signatory to the UN Principles for Responsible Investment (“UN PRI”) since July
2016 and is committed to applying the UN PRI to all stages of its investment criteria and to increasing awareness in credit markets.
Sustainability risk
A sustainability risk is an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential
material negative impact on the value of an investment. The Investment Adviser integrates sustainability risks into its investment
decisions in two ways. Firstly, its analysis of the managers of the CLOs in which the Company/Master Funds invest considers any
sustainability risks at the manager level that could impact either the effective management of the CLO or the secondary market
value of the CLO securities. Secondly, the Investment Adviser considers sustainability risks at the level of the borrowers of the
loans in the CLOs’ portfolios. The realisation of sustainability risks at these borrowers could increase the probability of borrowers
defaulting on loans held by the CLOs and a consequent erosion of the CLOs’ collateral pools.
The Investment Adviser has determined that sustainability risks, while relevant to the Company’s and Master Funds’ portfolio,
present a very limited risk to the value of its investments. The manager-related sustainability risks are mitigated by the tight
controls enforced on CLO managers by the CLO indenture and trustee, the manager replacement provisions in the indenture and
the fact that CLO investors are ultimately protected by their security over the CLO collateral. The sustainability risks related to the
borrowers of loans in the CLO portfolios are mitigated by the diversification of the CLO portfolios and by the analysis undertaken
on the loan borrowers by equity investors, lenders and rating agencies.
By order of the Board
Jon Bridel
Director
13 April 2022

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
25
Compliance
The Board has taken note of the Code of Corporate Governance issued by the Guernsey Financial Services Commission
(“Guernsey Code”). The Guernsey Code provides a governance framework for GFSC licensed entities, authorised and registered
collective investment schemes. Companies reporting in compliance with the UK Corporate Governance Code (the “UK Code”)
or the Association of Investment Companies Code of Corporate Governance (“AIC Code”), which was last published in February
2019, are deemed to satisfy the provisions of the Guernsey Code. The UK Code is available on the Financial Reporting Council
website, www.frc.org.uk.
As a Guernsey incorporated company and under the SFS Rules for companies, it is not a requirement for the Company to comply
with the UK Code. However, the Directors place a high degree of importance on ensuring that high standards of corporate
governance are maintained and have considered the principles and recommendations of the AIC Code. The AIC Code addresses
all the principles and provisions set out in the UK Code as well as setting out additional provisions on issues that are of specific
relevance to the Company. The Board considers that reporting against the principles and provisions of the AIC Code will provide
more relevant information to shareholders. The AIC code is available on the AIC website, www.theaic.co.uk.
For the year ended 31 December 2021, the Company complied substantially with the relevant provisions of the AIC Code and it
is the intention of the Board that the Company will comply with those provisions throughout the year ending 31 December 2021,
with the exception of the provisions listed below:
• The appointment of a Senior Independent Director: Given the size and composition of the Board it is not felt necessary to
separate the roles of Chairman and Senior Independent Director. The Board considers that all the independent Directors have
different qualities and areas of expertise on which they may lead where issues arise and to whom concerns can be conveyed.
• Internal audit function: The Board has reviewed the need for an internal audit function and due to the size of the Company and
the delegation of day-to-day operations to regulated service providers, an internal audit function is not considered necessary.
The Directors will continue to monitor the systems of internal controls in place in order to provide assurance that they operate
as intended.
• The appointment of Executive Directors: Due to the broad range of experience of the Board and given the nature of the
Company’s activity and that the majority of Directors are deemed to be independent under the AIC Code, it is not considered
necessary to appoint executive Directors.
Composition and Independence of Directors
As at 31 December 2021, the Board of Directors comprised three non-executive and independent Directors as set out below.
The Company has no executive Directors or any employees. The biographies of the Board are disclosed on page 19.
Professor Claudio Albanese is the Chairman of the Board and the Management Engagement Committee.
Jon Bridel is the Chairman of the Audit Committee.
Nigel Ward is the Chairman of the Risk Committee and the Nomination and Remuneration Committee.
In considering the independence of the Chairman, the Board has taken note of the provisions of the AIC Code relating to
independence and has determined that Professor Claudio Albanese is an Independent Director. As Chairman, Professor Albanese
is responsible for the leadership of the Board and ensuring effectiveness in all aspects of its role.
Under the terms of their appointment, all non-executive Directors are subject to re-election annually at the Annual General Meeting
(“AGM”). At the Annual General Meeting of the Company on 21 May 2021, shareholders re-elected all the Directors of the Company.
The Board are mindful of the length of service of the Directors, all of whom have been in place since the inception of the Company
in 2014. To that end, it is anticipated that one of the original three Directors will retire from the Board during 2022, and with this in
mind the Board adopted a succession plan to assist in the identification and appointment of a new Director to the Board. While
Board appointments will be made on merit, the Directors are also mindful of the benefits of diversity and will look to ensure that the
Board has an appropriate range of skills, knowledge and experience, as well considering factors such as gender. The succession
plan will be kept under review to ensure an orderly transfer of knowledge and responsibilities as the Directors looks to refresh the
Board in the coming few years.
GOVERNANCE
Corporate Governance

26
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
Composition and Independence of Directors (continued)
Although no formal training is given to Directors by the Company, the Directors are kept up to date on various matters such as
Corporate Governance issues through bulletins and training materials provided from time to time by the Company Secretary, the
AIC and other professional firms.
The Board receives quarterly reports and meets at least quarterly to review the overall business of the Company and to consider
matters specifically reserved for its disposal. At these meetings the Board monitors the investment performance of the Company.
The Directors also review the Company’s activities every quarter to ensure that it adheres to the Company’s investment policy.
Additional ad hoc reports are received as required and Directors have access at all times to the advice and services of the Company
Secretary, who is responsible for ensuring that the Board procedures are followed and that applicable rules and regulations are
complied with.
The Board monitors the level of the share price premium or discount to determine what action is desirable (if any).
The Board and relevant personnel of the Investment Adviser acknowledge and adhere to the Market Abuse Regulation which was
implemented on 3 July 2016.
Board Diversity
The Board of Directors of the Company comprises three male directors.
The Board is committed to diversity and is supportive of increased gender and ethnic diversity. Going forward the Board will ensure
there is an equal balance of gender in candidates for final interviews.
The Nomination and Remuneration Committee regularly reviews the structure, size and composition required of the Board,
taking into account the challenges and opportunities facing the Company. The Board is also committed to appointing the most
appropriate available candidates taking into account the skills and attributes of both existing members and potential new recruits
and thereby the balance of skills, experience and approach of the Board as a whole which will lead to optimal Board effectiveness.
In considering future candidates, appointments will be based on merit as a primary consideration, with the aim of bringing an
appropriate range of the specific skills, experience, independence, and knowledge needed to ensure a rounded Board and the
diversity benefits each candidate can bring to the overall Board composition.
Directors’ Performance Evaluation
The Board has established an informal system for the evaluation of its own performance and that of the Company’s individual
Directors. It considers this to be appropriate having regard to the non-executive role of the Directors and the significant outsourcing
of services by the Company to external providers.
The Directors undertake, on an annual basis by means of an internal questionnaire, an assessment of the effectiveness of the
Board, particularly in relation to its oversight and monitoring of the performance of the Investment Adviser and other key service
providers. The evaluations consider the balance of skills, experience, independence and knowledge of the Company. The Board
also evaluates the effectiveness of each of the Directors. The Company Secretary collates the results of the questionnaires and the
consolidated results are reviewed by the Board as a whole.
In respect of the AGM, which will be held on 14 June 2022, the Board is of the view that each Director should be re-elected given
their extensive knowledge of international financial markets, funds and risk management. This experience is evidenced within
the biographies of the Board as disclosed on page 19. Collectively, the blend of skillsets demonstrates the importance of the
contribution of each Director and why they should each be re-elected at the forthcoming AGM.
The Chairman also has responsibility for assessing the individual Board members’ training and development requirements.
GOVERNANCE
Corporate Governance (continued)

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
27
Directors’ Remuneration
With effect from 27 August 2015, it is the responsibility of the Nomination and Remuneration Committee to determine and approve
the Directors’ remuneration, having regard to the level of fees payable to non-executive Directors in the industry generally, the role
that individual Directors fulfil in respect of Board and Committee responsibilities and the time committed to the Company’s affairs.
The Chairman’s remuneration is decided separately and is approved by the Board as a whole.
No Director has a service contract with the Company and details of the Directors’ remuneration can be found in the Directors’
Remuneration Report on page 31.
Directors’ and Officers’ Liability Insurance
The Company maintains Directors’ and Officers’ liability insurance on behalf of the Directors in relation to the performance of their
duties as Directors.
Relations with Shareholders
The Company reports to shareholders twice a year by way of the Interim Report and Unaudited Condensed Financial Statements
and the Annual Report and Audited Financial Statements. In addition, NAVs are published monthly and the Investment Adviser
publishes monthly reports to shareholders on its website www.fairoaksincome.com.
The Board receives quarterly reports on the shareholder profile of the Company and regular contact with major shareholders
is undertaken by the Company’s corporate brokers and the executives of the Investment Adviser. Any issues raised by major
shareholders are reported to the Board on a regular basis.
The Chairman and individual Directors are willing to meet major shareholders to discuss any particular items of concern regarding
the performance of the Company. Members of the Board, including the Chairman and the Audit Committee Chairman, and the
Investment Adviser are also available to answer any questions which may be raised by any shareholder at the Company’s Annual
General Meeting.
On 19 April 2021, at the Extraordinary General Meeting of the Company, resolutions 1 and 2 were passed but resolution 3, which
was to empower the Directors of the Company to issue up to a maximum of 350 million C Shares and such number of 2021
Shares as represents 20% of 2021 Shares then in issue, did not pass. The Board acknowledged that Resolution 3 did not pass by
a small margin and consulted with major shareholders ahead of proposing a resolution to disapply pre-emption rights at the 2021
Annual General Meeting at which the resolution was passed on a poll.
Stakeholders and Section 172
Whilst directly applicable to UK domiciled companies, the intention of the AIC Code is that matters set out in section 172 of the
Companies Act, 2006 (“s172 of the Companies Act”) are reported. The Board considers the view of the Company’s other key
stakeholders as part of its discussions and decision making process. As an investment company, the Company does not have any
employees and conducts its core activities through third-party service providers. Each provider has an established track record
and, through regulatory oversight and control, are required to have in place suitable policies to ensure they maintain high standards
of business conduct, treat customers fairly, and employ corporate governance best practice.
The Board’s commitment to maintaining the high-standards of corporate governance recommended in the AIC Code, combined
with the directors’ duties incorporated into the Companies (Guernsey) Law, 2008, the constitutive documents, the Disclosure
Guidance and Transparency Rules, and Market Abuse Regulation, ensures that shareholders are provided with frequent and
comprehensive information concerning the Company and its activities.
Whilst the primary duty of the Directors is owed to the Company as a whole, the Board considers as part of its decision making
process the interests of all stakeholders. Particular consideration being given to the continued alignment between the activities of
the Company and those that contribute to delivering the Board’s strategy, which include the Investment Manager and Administrator.
The Board respects and welcomes the views of all stakeholders. Any queries or areas of concern regarding the Company’s
operations can be raised with the Secretary.
GOVERNANCE
Corporate Governance (continued)

28
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
GOVERNANCE
Corporate Governance (continued)
Directors’ Meetings and Attendance
The table below shows the attendance at Board and Committee meetings during the year. There were four formal Board meetings,
four Audit Committee meetings, four Risk Committee meetings, one Management Engagement Committee meetings, two
Nomination & Remuneration Committee meeting and five ad hoc Board meeting held during the year ended 31 December 2021.
Name Board
Audit
Committee
Risk
Committee
Management
Engagement
Committee
Nomination &
Remuneration
Committee
Number of meetings held
9 4 4 1 2
Professor Claudio Albanese (Chairman of the Board
and Management Engagement Committee)
9 N/A 4 1 2
Jon Bridel (Audit Committee Chairman) 9 4 4 1 2
Nigel Ward (Risk Committee Chairman and
Nomination & Remuneration Committee Chairman)
9 4 4 1 2
The Chairman is responsible for ensuring the Directors receive complete information in a timely manner concerning all matters
which require consideration by the Board. Through the Board’s ongoing programme of shareholder engagement and the reports
produced by each key service provider, the Directors are satisfied that sufficient information is provided so as to ensure the matters
set out in s172 of the Companies Act are taken into consideration as part of the Board’s decision-making process.
Board Committees
Audit Committee
The Audit Committee comprises Jon Bridel and Nigel Ward, and meets at least three times a year. Jon Bridel is Chairman of
the Audit Committee. The key objectives of the Audit Committee include a review of the Financial Statements to ensure they
are prepared to a high standard and comply with all relevant legislation and guidelines, where appropriate, and to maintain an
effective relationship with the Auditor. With respect to the Auditor, the Audit Committee’s role will include the assessment of their
independence, review of the Auditor’s engagement letter, remuneration, performance and any non-audit services provided by the
Auditor. For the principal duties and report of the Audit Committee please refer to the Report of the Audit Committee on page 32.
Risk Committee
The Risk Committee meets at least four times a year. It comprises the entire Board and is chaired by Nigel Ward. The principal
function of the Risk Committee is to identify, assess, monitor and, where possible, oversee the management of risks to which
the Company’s investments are exposed, principally to enable the Company to achieve its target investment objective of a total
return of 12% to 14% per annum over the planned life of the Company, with regular reporting to the Board. As the Company is
an internally managed non-EU AIFM for the purposes of AIFMD, the Directors have appointed the Risk Committee to manage the
additional risks faced by the Company as well as the relevant disclosures to be made to investors and the necessary regulators.
On 18 February 2015, the FCA confirmed that the Company was eligible to be marketed via the FCA’s National Private Placement
Regime and the Company complied with Articles 22 and 23 of the AIFMD for the year ended 31 December 2021. In January 2017,
the Company was authorised to market in Sweden, Finland and Luxembourg.
Management Engagement Committee
The Management Engagement Committee (“MEC”) meets at least once a year. It comprises the entire Board and is chaired by
Professor Claudio Albanese. The MEC is responsible for the regular review of the terms of the Investment Advisory Agreement and
the performance of the Administrator and the Investment Adviser and also the Company’s other service providers. For the principal
duties of the MEC, please refer to the Management Engagement Committee Report on page 35.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee meets at least once a year. It comprises the entire Board and is chaired by Nigel
Ward. The Nomination and Remuneration Committee is responsible for reviewing the structure, size and composition of the Board,
to consider the succession planning for directors and senior executives, reviewing the leadership needs of the organisation,
identifying candidates for appointment to the Board, agreeing a framework for Director remuneration, ensuring management of
the Company are appropriately incentivised to enhance performance and reviewing the appropriateness of the remuneration policy
on an on-going basis. In order to identify appropriate candidates for appointment to the Board, the Nomination and Remuneration
Committee will appoint an independent consultant for the purposes of succession planning.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
29
GOVERNANCE
Corporate Governance (continued)
Internal Control Review and Risk Management System
The Board of Directors is responsible for putting in place a system of internal controls relevant to the Company and for reviewing
the effectiveness of those systems. The review of internal controls is an ongoing process for identifying and evaluating the risks
faced by the Company, and which are designed to manage risks rather than eliminate the risk of failure to achieve the Company’s
objectives.
It is the responsibility of the Board to undertake risk assessment and review of the internal controls in the context of the Company’s
objectives that cover business strategy, operational, compliance and financial risks facing the Company. These internal controls are
implemented by the Company’s three main service providers: the Investment Adviser, the Administrator and the Custodian. The
Board receives periodic updates from these main service providers at the quarterly Board meetings of the Company. The Board
is satisfied that each service provider has effective controls in place to control the risks associated with the services that they are
contracted to provide to the Company and are therefore satisfied with the internal controls of the Company.
The Board of Directors considers the arrangements for the provision of Investment Advisory, Administration and Custody services
to the Company on an ongoing basis and a formal review is conducted annually. As part of this review the Board considered the
quality of the personnel assigned to handle the Company’s affairs, the investment process and the results achieved to date.

30
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
The Directors are responsible for preparing the Directors’
Report and Financial Statements in accordance with
International Financial Reporting Standards (“IFRS”) as issued
by the International Accounting Standards Board (“IASB”) and
the Companies (Guernsey) Law, 2008 which give a true and
fair view of the state of affairs of the Company and its profit or
loss for that period.
In preparing the Financial Statements the Directors are
required to:
• select suitable accounting policies and apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the Financial Statements;
• assess the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern; and
• use the going concern basis of accounting unless they either
intend to liquidate the Company or to cease operations, or
have no realistic alternative but to do so.
The Directors are also responsible for the keeping of proper
accounting records which disclose with reasonable accuracy
at any time the financial position of the Company and to enable
them to ensure that the Financial Statements comply with the
Companies (Guernsey) Law, 2008 and the Listing Rules of the
SFS of the London Stock Exchange. They are also responsible
for the system of internal controls, safeguarding the assets of
the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors confirm that they have complied with these
requirements in preparing the Financial Statements.
The Directors are also responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the United Kingdom
and Guernsey governing the preparation and dissemination
of financial statements may differ from legislation in other
jurisdictions.
So far as the Directors are aware, there is no relevant audit
information of which the Company’s auditor is unaware,
having taken all the steps the Directors ought to have taken
to make themselves aware of any relevant audit information
and to establish that the Company’s auditor is aware of that
information.
Responsibility Statement
Each of the Directors, who are listed on page 19, confirms to
the best of their knowledge and belief:
• the Financial Statements, prepared in accordance with
IFRS as issued by the IASB, give a true and fair view of
the assets, liabilities, financial position and profit of the
Company, as required by DTR 4.1.12R;
• the Management Report (comprising the Chairman’s
Statement, the Investment Adviser’s Report, the Directors’
Report, the Strategic Report and other Committee Reports)
includes a fair review of the development and performance
of the business during the year, and the position of the
Company at the end of the year, together with a description
of the principal risks and uncertainties that the Company
faces, as required by DTR 4.1.8R and DTR 4.1.9R; and
• the Annual Report, comprising the Financial Statements,
Strategic Review and Governance report, taken as a whole,
is fair, balanced and understandable.
Signed on behalf of the Board by:
Jon Bridel
Director
13 April 2022
GOVERNANCE
Statement of Directors’ Responsibilities

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
31
The Company’s policy in regard to Directors’ remuneration is to ensure that remuneration is competitive, aligned with shareholder
interests, relatively simple and transparent, and compatible with the aim of attracting, recruiting and retaining suitably qualified and
experienced directors.
No element of the Directors’ remuneration is performance related, nor does any Director have any entitlement to pensions, share
options or any long term incentive plans from the Company.
The Company’s Articles limit the fees payable to Directors in aggregate to US$400,000 per annum.
The Directors have received the following remuneration during the year in the form of Directors’ fees:
Per Annum
£
For the year from
1 January 2021
to 31 December 2021
Actual
£
For the year from
1 January 2020
to 31 December 2020
Actual
£
Professor Claudio Albanese (Chairman and
Management Engagement Committee Chairman)
43,000 43,000 43,000
Jon Bridel (Audit Committee Chairman) 43,000 43,000 43,000
Nigel Ward (Risk Committee Chairman and the
Nomination & Remuneration Committee Chairman)
43,000 43,000 43,000
Total 129,000 129,000 129,000
For the year ended 31 December 2021, each Director is entitled to a fee of £43,000 per annum. During the year ended
31 December 2021, a one-off payment of £5,000 was paid to each Director in respect of the revised Prospectus, with such
fee increasing by an additional £2,500 (i.e. bringing this one-off payment to £7,500) if the total gross amounts raised under the
Placing Programme exceeded US$100 million.
The remuneration policy set out above is the one applied for the years ended 31 December 2021 and 31 December 2020.
In December 2021, the Board agreed an increase in their remuneration and, with effect from 1 January 2022, each non-executive
Director is entitled to a basic fee of £45,000 per annum.
Directors’ and Officers’ liability insurance cover is maintained by the Company on behalf of the Directors.
The Directors were appointed as non-executive Directors by letters issued in April and May 2014. Each Director’s appointment
letter provides that, upon the termination of his appointment, he must resign in writing. The Directors’ appointments can be
terminated in accordance with the Articles and without compensation. The notice period for the removal of Directors is three
months as specified in the Director’s appointment letter. The Articles provide that the office of director shall be terminated by,
among other things: (a) written resignation; (b) unauthorised absences from Board meetings for six months or more; (c) unanimous
written request of the other Directors; or (d) an ordinary resolution of the Company.
Under the terms of their appointment, each Director was subject to re-election at the first Annual General Meeting (“AGM”) and
annually thereafter. At the Annual General Meeting of the Company on 21 May 2021, shareholders voted in favour of re-electing
all of the Directors. The Company may terminate the appointment of a Director immediately on serving written notice and no
compensation is payable upon termination of office as a director of the Company becoming effective.
The amounts payable to Directors as at 31 December 2021 and 31 December 2020, shown in note 8 to the Financial Statements,
related to services as non-executive Directors.
No Director has a service contract with the Company, nor are any such contracts proposed.
Jon Bridel
Director
13 April 2022
GOVERNANCE
Directors’ Remuneration Report

32
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
The Company has established an Audit Committee with formally delegated duties and responsibilities within written terms of
reference (which are available from the Company’s website).
Chairman and Membership
The Audit Committee is chaired by Jon Bridel, a Chartered Accountant. He and the other member, Nigel Ward, are both independent
Directors. Only independent Directors serve on the Audit Committee and members of the Audit Committee have no links with
the Company’s Auditor and are independent of the Investment Adviser. The membership of the Audit Committee and its terms of
reference are kept under review. The relevant qualifications and experience of each member of the Audit Committee is detailed on
page 19 of these Financial Statements. The Audit Committee’s intention is to meet at least three times a year in any full year and
it meets the Auditor during those meetings.
Duties
The Audit Committee’s main role and responsibilities are to provide advice to the Board on whether the Annual Report and Audited
Financial Statements, taken as a whole, are fair, balanced and understandable and alongside the Interim Report and Unaudited
Condensed Financial Statements provide the information necessary for shareholders to assess the Company’s performance,
business model and strategy. The Audit Committee gives full consideration and recommendation to the Board for the approval of
the contents of the Interim and Annual Financial Statements of the Company, which includes reviewing the Auditor’s report.
The other principal duties include to consider the appointment of the Auditor, to discuss and agree with the Auditor the nature and
scope of the audit, to keep under review the scope, results and effectiveness of the audit and the independence and objectivity of
the Auditor, to review the Auditor’s letter of engagement, the Auditor’s planning report for the financial year and management letter
and to analyse the key procedures adopted by the Company’s service providers.
The Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of the Company’s internal
control and risk management systems as they relate to the financial reporting process. The Audit Committee also focuses
particularly on compliance with legal requirements, accounting standards and the relevant Listing Rules and ensuring that an
effective system of internal financial and non-financial controls is maintained.
The Audit Committee also reviews, considers and, if thought appropriate, recommends for the purposes of the Company’s Financial
Statements valuations prepared by the Investment Adviser. These valuations are the most critical element in the Company’s
Financial Statements and the Audit Committee questions them carefully.
Financial Reporting and Significant Risk
The Audit Committee has an active involvement and oversight in the preparation of both the Interim Report and Unaudited
Condensed Financial Statements and the Annual Report and Audited Financial Statements and in doing so is responsible for the
identification and monitoring of the principal risks associated with the preparation of the Financial Statements. After discussion
with the Investment Adviser and KPMG Channel Islands Limited (“KPMG”), the Audit Committee determined that the key risk of
material misstatement of the Company’s Financial Statements related to the valuation of investments.
• Valuation of Master Fund III – The Company’s investment in the Master Fund III had a fair value of US$269,884,334 as at
31 December 2021 and represents substantially all the net assets of the Company and as such is the biggest factor in relation
to the accuracy of the Financial Statements. This investment is valued in accordance with the Accounting Policies set out in
note 2 to the Financial Statements. The Financial Statements of the Master Fund III for the year ended 31 December 2021
were audited by KPMG who issued an unmodified audit opinion dated 13 April 2022. The Audit Committee has reviewed the
Audited Financial Statements of the Master Fund III and the accounting policies and determined the Company’s fair value of the
investment in the Master Fund III as at 31 December 2021 to be reasonable.
• Valuation of Master Fund II – The Company’s direct investment in the Master Fund II had a fair value of US$41,814,869 as at
31 December 2021 and represents a substantial portion of the net assets of the Company. This investment is valued in
accordance with the Accounting Policies set out in note 2 to the Financial Statements. The Financial Statements of the Master
Fund II for the year ended 31 December 2021 were audited by KPMG who issued an unmodified audit opinion dated 13 April
2022. The Audit Committee has reviewed the Audited Financial Statements of the Master Fund II and the accounting policies
and determined the Company’s fair value of the investment in the Master Fund II as at 31 December 2021 to be reasonable.
GOVERNANCE
Report of the Audit Committee

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
33
Financial Reporting and Audit
The Audit Committee reviews the Company’s accounting policies applied in the preparation of its Annual Financial Statements
together with the relevant critical judgements, estimates and assumptions and, upon taking the appropriate advice from the
Auditor, determined that these were in compliance with IFRS, as issued by the IASB and were reasonable. The Audit Committee
reviewed the materiality levels applied by the Auditor to the Financial Statements as a whole and was satisfied that materiality levels
were appropriate. The Auditor reports to the Audit Committee all material corrected and uncorrected differences. The Auditor
explained the results of their audit and that on the basis of their audit work, there were no uncorrected differences proposed that
were material in the context of the Financial Statements as a whole.
The Audit Committee also reviews the Company’s financial reports as a whole to ensure that such reports appropriately describe
the Company’s activities and to ensure that all statements contained in such reports are consistent with the Company’s financial
results and projections. Accordingly, the Audit Committee was able to advise the Board that the Annual Report and Audited
Financial Statements are fair, balanced and understandable and provide the information necessary for shareholders to assess the
Company’s performance, business model and strategy.
External Auditor
The Audit Committee has responsibility for making a recommendation on the appointment, re-appointment and removal of the
Auditor. KPMG was appointed as the first Auditor of the Company in 2014. During the year, the Audit Committee received and
reviewed the audit plan and strategy from KPMG. It is standard practice for the Auditor to meet privately with the Audit Committee
without the Investment Adviser being present at each Audit Committee meeting.
To assess the effectiveness of the Auditor, the Audit Committee will review:
• The Auditor’s fulfilment of the agreed audit plan and variations from it;
• The Auditor’s assessment of its objectivity and independence as auditor of the Company;
• The Audit Committee Report from the Auditor highlighting the major issues that arose during the course of the audit; and
• Feedback from the Investment Adviser and Administrator evaluating the performance of the audit team.
Where non-audit services are to be provided to the Company by the Auditor, full consideration of the financial and other implications
on the independence of the auditor arising from any such engagement will be considered before proceeding. All non-audit services
are pre-approved by the Audit Committee after it is satisfied that relevant safeguards are in place to protect the auditors’ objectivity
and independence.
To fulfil its responsibility regarding the independence of the Auditors, the Audit Committee considered:
• a report from the Auditor describing its arrangements to identify, report and manage any conflicts of interest; and
• the extent of non-audit services provided by the Auditor.
During the year ended 31 December 2021, KPMG provided non-audit and audit services as listed on page 34. KPMG confirmed
that the non-audit services provided during the year had not impacted their independence and outlined the reasons for this. These
non-audit services complied with the Financial Reporting Council (“FRC”) Revised Ethical Standard 2019. The Audit Committee
was satisfied that these non-audit services had no bearing on the independence of the Auditor in the prior year.
In addition, KPMG directors are subject to periodic rotation of assignments on audit clients under applicable laws, regulations and
independence rules. Their rotation policies comply with the FRC Revised Ethical Standard 2019 which states that the engagement
director should be rotated after serving in this capacity for the relevant period no longer than five years. This rotation policy is
continually monitored, Steven Stormonth was first appointed as the audit engagement director for the year ended 31 December
2019 audit.
GOVERNANCE
Report of the Audit Committee (continued)

34
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
External Auditor (continued)
The following table summarises the remuneration payable to KPMG and to other KPMG International member firms for audit and
non-audit services during the year ended 31 December 2021 and 31 December 2020, translated into the presentation currency
at the exchange rate prevailing at 31 December 2021 and 31 December 2020, respectively.
For the year ended
31 December 2021
US$
For the year ended
31 December 2020
US$
KPMG Channel Islands Limited
– Annual Audit of the Company and related entities 274,970 209,698
– Interim review 62,721 51,946
Other KPMG International member firms
– Reporting accountant services 132,810 –
– Agreed upon procedures – Fair Oaks CLOs
1
41,408 40,149
– Tax compliance services – Fair Oaks CLOs
1
– 7,300
Internal Controls
As the Company’s investment objective is to invest all of its assets into the Master Funds, the Audit Committee, after consultation
with the Investment Adviser and Auditor, considers the key risk of misstatement in its Financial Statements to be the valuation of
its investments in the Master Funds, but is also mindful of the risk of the override of controls by its two main service providers: the
Investment Adviser and the Administrator.
The Investment Adviser and the Administrator together maintain a system of internal control on which they report to the Board.
The Board has reviewed the need for an internal audit function and has decided that the systems and procedures employed by the
Investment Adviser and Administrator provide sufficient assurance that a sound system of risk management and internal control,
which safeguards shareholders’ investment and the Company’s assets, is maintained. An internal audit function specific to the
Company is therefore considered unnecessary.
The Audit Committee is responsible for reviewing and monitoring the effectiveness of the internal financial control systems and risk
management systems on which the Company is reliant. These systems are designed to ensure proper accounting records are
maintained, that the financial information on which the business decisions are made and which is issued for publication is reliable,
and that the assets of the Company are safeguarded. Such a system of internal financial controls can only provide reasonable and
not absolute assurance against misstatement or loss.
In accordance with the guidance published in the ‘Turnbull Report’ by the FRC, the Audit Committee has reviewed the
Company’s internal control procedures. These internal controls are implemented by the Investment Adviser and the Administrator.
The Audit Committee has performed reviews of the internal financial control systems and risk management systems during the year.
The Audit Committee is satisfied with the internal financial control systems of the Company.
On behalf of the Audit Committee
Jon Bridel
Audit Committee Chairman
13 April 2022
GOVERNANCE
Report of the Audit Committee (continued)
1
Fair Oaks CLOs are classified as affiliates of the Company under the FRC Ethical Standards.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
35
The Company has established a Management Engagement Committee (“MEC”) with formally delegated duties and responsibilities
within the written terms of reference (which are available from the Company’s website www.fairoaksincome.com).
Chairman and Membership
The MEC meets at least once a year. It comprises the entire Board and is chaired by Professor Claudio Albanese. Professor
Albanese and the other members, Nigel Ward and Jon Bridel, are all independent Directors. Only independent Directors serve on
the MEC and members of the MEC have no links with the Investment Adviser or any other service provider. The MEC is responsible
for the regular review of the terms of the Investment Advisory Agreement and the performance of the Administrator and the
Investment Adviser and also the Company’s other service providers. The membership of the MEC and its terms of reference are
kept under review.
Key Objectives
To review performance of all service providers (including the Investment Adviser).
Responsibilities
• To annually review the performance, relationships and contractual terms of all service providers (including the Investment
Adviser);
• reviewing the terms of the Investment Advisory Agreement from time to time to ensure that the terms thereof conform with
market and industry practice and remain in the best interests of Shareholders and making recommendations to the Board on
any variation to the terms of the Investment Advisory Agreement which it considers necessary or desirable;
• recommending to the Board whether the continuing appointment of the Advisor is in the best interests of the Company and
Shareholders, and the reasons for this recommendation;
• monitoring compliance by providers of other services to the Company with the terms of their respective agreements from time
to time;
• reviewing and considering the appointment and remuneration of providers of services to the Company; and
• considering any points of conflict which may arise between the providers of services to the Company.
MEC Meetings
Only members of the MEC and the Company Secretary have the right to attend MEC meetings. However, representatives of the
General Partner, Investment Adviser and other service providers may be invited by the MEC to attend meetings as and when
appropriate.
Main Activities during the year
The MEC met once during the year and reviewed the performance, relationships and contractual terms of all service providers as
at 8 December 2021 including the Investment Adviser. Furthermore, the MEC reviewed the approaches to GDPR, Criminal Justice
Act, Anti-bribery and cyber security, amongst other matters, by its service providers.
Continued Appointment of the Investment Adviser and other Service Providers
The Board continually evaluates the Investment Adviser and other service providers, it reviews investment performance at each
Board meeting and a formal review of all service providers is conducted annually by the MEC. The annual third-party service provider
review process includes two-way feedback, which provides the Board with an opportunity to understand the views, experiences
and any significant issues encountered by service providers during the year. As part of the Board’s annual performance evaluation,
feedback is received on the quality of service and the effectiveness of the working relationships with each of the Company’s key
service providers.
As a result of the 2021 annual review it is the opinion of the Directors that the continued appointment of the Investment Adviser
and the other current service providers on the terms agreed is in the interest of the Company’s shareholders as a whole.
The Board considers that the Investment Adviser has extensive investment management resources and wide experience in
managing CLOs investments and is satisfied with the quality and competitiveness of the fee arrangements of the Investment
Adviser and the Company’s other service providers.
Professor Claudio Albanese
Management Engagement Committee Chairman
13 April 2022
GOVERNANCE
Management Engagement Committee Report

36
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
Our opinion is unmodified
We have audited the financial statements of Fair Oaks Income Limited (the “Company”), which comprise the statement of financial
position as at 31 December 2021, the statements of comprehensive income, changes in shareholder’s equity and cash flows for
the year then ended, and notes, comprising significant accounting policies and other explanatory information.
In our opinion, the accompanying financial statements:
• give a true and fair view of the financial position of the Company as at 31 December 2021, and of the Company’s financial
performance and cash flows for the year then ended;
• are prepared in accordance with International Financial Reporting Standards; and
• comply with the Companies (Guernsey) Law, 2008.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company in
accordance with, UK ethical requirements including the FRC Ethical Standard as required by the Crown Dependencies’ Audit
Rules and Guidance. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.
Key Audit Matters: our assessment of the risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us,
including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In arriving at our audit opinion
above, the key audit matter was as follows (unchanged from 2020):
The risk Our response
Financial assets at fair
value through profit or loss
(“Investments”)
US$311.7 million; (31 December
2020: US$293.1 million)
Refer to pages 32 to 34 (Report
of the Audit Committee), note 2
(Significant Accounting Policies),
note 3 (Use of Judgements and
Estimates) and note 6 (Financial
Assets at Fair Value Through Profit
or Loss)
Basis:
The Company holds investments in FOIF II LP
(“Master Fund II”) and FOMC III LP (“Master
Fund III”) (together the “Master Funds”) which
are designated at fair value through profit or
loss and represents 99.7% of the Company’s
net assets.
The fair value of the Company’s investment
in the Master Funds reflects the Company’s
proportionate share of the Master Funds’ net
asset value. Master Fund III’s net asset value
reflects its proportionate share of Master
Fund II’s net asset value. Master Fund II’s net
asset value incorporates the fair value of its
own investment portfolio which comprises:
Mezzanine and Equity Collateralised Loan
Obligation (“CLO”) positions (the “CLOs”);
a Warehoused pre-CLO position (the
“Warehouse”) and a proportionate share of
the net asset value of Wollemi Investments I
LP (“Wollemi”).
Our audit procedures included:
Control evaluation:
We assessed the design and implementation of
the control over the valuation of the Company’s
Investments.
Evaluation of the Valuation Agent:
With the assistance of our KPMG valuation
specialist we:
• assessed the objectivity, capability and
competence of the Valuation Agent engaged
by Master Fund II and Wollemi to provide Price
Quotes; and
• assessed the methodology applied by the
Valuation Agent in developing fair value Price
Quotes.
Independent Auditor’s Report to the
Members of Fair Oaks Income Limited

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
37
Independent Auditor’s Report to the Members of
Fair Oaks Income Limited (continued)
The risk (continued) Our response (continued)
Basis (continued):
Wollemi is also invested into a portfolio of
Equity CLO positions and Cycad Investments
LP (“Cycad”).
The fair value of 82.7% of the CLOs held by
Master Fund II and Wollemi are determined
using indicative prices (“Price Quotes”)
obtained from their independent third party
valuation provider (the “Valuation Agent”).
17.3% of the fair value of CLO’s held by
Master Fund II and Wollemi are determined
using internally generated models.
Risk:
The valuation of the Company’s Investments
is considered a significant area of our audit,
given that it represents the majority of the
net assets of the Company. Inherent in that
valuation is the use of significant estimates
and judgements in determining the fair value
of the underlying CLOs.
Our audit procedures included (continued):
Valuation procedures, including use of
KPMG valuation specialist:
• For the investment into the Master Funds,
Master Fund II’s investment into Wollemi and
Wollemi’s investment into Cycad we:
– assessed whether the net asset values were
representative of their fair values;
– recalculated the proportionate share of the
net asset values;
– agreed the fair value to a net asset value
statement received from that fund’s
administrator;
– obtained the coterminous audited financial
statements and agreed the audited net asset
value to the net asset value statement; and
– considered the basis of preparation of the
audited financial statements, together with
accounting policies applied and whether the
audit opinion was unmodified.
• We independently obtained the Valuation
Agent’s pricing reports and agreed the Price
Quotes provided by the Valuation Agent to
those used in the Valuation of the CLOs.
• For 100% of the CLO positions held by Master
Fund II and Wollemi, with the support of our
KPMG valuation specialist, we determined
independent reference prices through the use
of fundamental cash flow modelling sourcing
key inputs and assumptions used, such as
default rates, prepayment rates and recovery
rates from observable market data and agreed
the outcome to the prices used in the valuation
of the CLOs.
• For the sole Warehouse position held by
Master Fund II, we utilized, with the support
of our KPMG valuation specialist, a Black
Scholes option pricing model to assess the
probability (as at 31 December 2021) of this
position converting to a CLO and assessed the
outcome against the Master Fund II’s reference
price.
Assessing disclosures:
We also considered the Company’s disclosures
in relation to use of estimates and judgements in
determining the fair value of Investments (Note
3), the Company’s Investment valuation policies
(Note 2) and fair value disclosures (Note 6) for
compliance with IFRS.
Key Audit Matters: our assessment of the risks of material misstatement (continued)

38
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
Our application of materiality and an overview of the scope of our audit
Materiality for the financial statements as a whole was set at US$6,420,000, determined with reference to a benchmark of net
assets of US$312,525,046, of which it represents approximately 2% (31 December 2020: 2%).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in
individual account balances add up to a material amount across the financial statements as a whole. Performance materiality for
the Company was set at 75% (31 December 2020: 75%) of materiality for the financial statements as a whole, which equates to
US$4,815,000. We applied this percentage in our determination of performance materiality because we did not identify any factors
indicating an elevated level of risk.
We reported to the Audit Committee any corrected or uncorrected identified misstatements exceeding US$321,000, in addition to
other identified misstatements that warranted reporting on qualitative grounds.
Our audit of the Company was undertaken to the materiality level specified above, which has informed our identification of
significant risks of material misstatement and the associated audit procedures performed in those areas as detailed above.
Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company
or to cease its operations, and as they have concluded that the Company’s financial position means that this is realistic. They have
also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going
concern for at least a year from the date of approval of thefinancial statements (the “going concern period”).
In our evaluation of the directors’ conclusions, we considered the inherent risks to the Company’s business model and analysed
how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period.
The risks that we considered most likely to affect the Company’s financial resources or ability to continue operations over this
period were:
• Availability of capital to meet operating costs and other financial commitments; and
• The recoverability of financial assets subject to credit risk.
We considered whether these risks could plausibly affect the liquidity in the going concern period by comparing severe, but
plausible downside scenarios that could arise from these risks individually and collectively against the level of available financial
resources indicated by the Company’s financial forecasts.
We considered whether the going concern disclosure in note 2 to the financial statements gives a full and accurate description of
the directors’ assessment of going concern.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is
appropriate;
• we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or
conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern
for the going concern period; and
• we found the going concern disclosure in the notes to the financial statements to be acceptable.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that
the Company will continue in operation.
Independent Auditor’s Report to the Members of
Fair Oaks Income Limited (continued)

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
39
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
• enquiring of management as to the Company’s policies and procedures to prevent and detect fraud as well as enquiring
whether management have knowledge of any actual, suspected or alleged fraud;
• reading minutes of meetings of those charged with governance; and
• using analytical procedures to identify any unusual or unexpected relationships.
As required by auditing standards, we perform procedures to address the risk of management override of controls, in particular
the risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a
fraud risk related to revenue recognition because the Company’s revenue streams are simple in nature with respect to accounting
policy choice, and are easily verifiable to external data sources or agreements with little or no requirement for estimation from
management. We did not identify any additional fraud risks.
We performed procedures including
• Identifying journal entries and other adjustments to test based on risk criteria and comparing any identified entries to supporting
documentation; and
• incorporating an element of unpredictability in our audit procedures.
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements
from our sector experience and through discussion with management (as required by auditing standards), and from inspection
of the Company’s regulatory and legal correspondence, if any, and discussed with management the policies and procedures
regarding compliance with laws and regulations. As the Company is regulated, our assessment of risks involved gaining an
understanding of the control environment including the entity’s procedures for complying with regulatory requirements.
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation
and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on
the related financial statement items.
The Company is subject to other laws and regulations where the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or impacts
on the Company’s ability to operate. We identified financial services regulation as being the area most likely to have such an
effect, recognising the regulated nature of the Company’s activities and its legal form. Auditing standards limit the required audit
procedures to identify non-compliance with these laws and regulations to enquiry of management and inspection of regulatory
and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements
in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards.
For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the
financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remains a higher risk of non-detection of fraud, as this may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material
misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance
with all laws and regulations.
Independent Auditor’s Report to the Members of
Fair Oaks Income Limited (continued)

40
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
Independent Auditor’s Report to the Members of
Fair Oaks Income Limited (continued)
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual
report but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does
not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
We have nothing to report on other matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies (Guernsey) Law, 2008 requires us to report to
you if, in our opinion:
• the Company has not kept proper accounting records; or
• the financial statements are not in agreement with the accounting records; or
• we have not received all the information and explanations, which to the best of our knowledge and belief are necessary for the
purpose of our audit.
Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 30, the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing
the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the
going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of this report and restrictions on its use by persons other than the Company’s members, as a body
This report is made solely to the Company’s members, as a body, in accordance with section 262 of the Companies (Guernsey)
Law, 2008. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or
for the opinions we have formed.
Steven Stormonth
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognised Auditors
Guernsey
13 April 2022

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
41
FINANCIAL REPORT
Statement of Comprehensive Income
For the year ended 31 December 2021
1 January 2021
to 31 December 2021
1 January 2020
to 31 December 2020
Note US$ US$
Revenue
Net gains/(losses) on financial assets at fair value
through profit or loss
6 65,240,126 (26,086,364)
Interest income 7 – 3,215
Net foreign exchange gains/(losses) 14,843 (94,218)
Total revenue 65,254,969 (26,177,367)
Expenses
Investment advisory fees 8 3,820 106,768
Audit and interim review fees 117,092 101,753
Administration fees 8 116,934 144,580
Directors’ fees and expenses 8 199,437 166,652
Broker fees 130,015 42,573
Registrar fees 84,735 38,715
Listing fees 15,545 64,133
Legal and professional fees 4,261 36,506
Other expenses 115,672 109,568
Total expenses 787,511 811,248
Profit/(loss) and total comprehensive
income/(loss) for the year
64,467,458 (26,988,615)
Basic and diluted earnings/(losses)
per 2021 Share/2017 Share
11
0.1377 (0.0583)
Basic and diluted earnings/(losses)
per Realisation Share/2017 Shares
11
0.1385 (0.0583)
All items in the above statement are derived from continuing operations.
The accompanying notes on pages 45 to 73 form an integral part of the Financial Statements.

42
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
FINANCIAL REPORT
Statement of Changes in Shareholders’ Equity
For the year ended 31 December 2021
The accompanying notes on pages 45 to 73 form an integral part of the Financial Statements.
Share
capital
(Realisation
Shares)
Share
capital
(2021
Shares)
Retained
earnings
(Realisation
Shares)
Retained
earnings
(2021
Shares)
Total
equity
Note US$ US$ US$ US$ US$
At 1 January 2021 444,922,074 – (149,952,728) – 294,969,346
Total comprehensive income:
Profit for the year – – 8,665,218 55,802,240 64,467,458
Total comprehensive income
for the year
– – 8,665,218 55,802,240 64,467,458
Transactions with Shareholders:
Redesignation of 2017 shares
into 2021 Shares during the
year, net of issue costs
10 (385,670,377) 384,339,570 – – (1,330,807)
Transfer brought forward
retained earnings from 2017
Shares to 2021 Shares
10 – – 129,923,035 (129,923,035) –
Dividends declared during
the year
4 – – (6,100,252) (39,480,699) (45,580,951)
Total transactions with
Shareholders
(385,670,377) 384,339,570 123,822,783 (169,403,734) (46,911,758)
At 31 December 2021 59,251,697 384,339,570 (17,464,727) (113,601,494) 312,525,046
Share
capital
(2017
Shares)
Retained
earnings
(2017
Shares)
Total
equity
Note US$ US$ US$
At 1 January 2020 439,400,944 (96,242,034) 343,158,910
Total comprehensive loss:
Loss for the year – (26,988,615) (26,988,615)
Total comprehensive loss for the year
– (26,988,615) (26,988,615)
Transactions with Shareholders:
Issue of 2017 shares during the year, net of issue costs 10 5,521,130 – 5,521,130
Dividends declared during the year 4 – (26,722,079) (26,722,079)
Total transactions with Shareholders
5,521,130 (26,722,079) (21,200,949)
At 31 December 2020 444,922,074 (149,952,728) 294,969,346

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
43
FINANCIAL REPORT
Statement of Financial Position
At 31 December 2021
31 December 2021 31 December 2020
Note US$ US$
Assets
Cash and cash equivalents 1,294,271 2,397,636
Prepayments 97,627 28,800
Financial assets at fair value through profit or loss 6 311,699,203 293,083,595
Total assets 313,091,101 295,510,031
Liabilities
Distributions received in advance 458,709 456,325
Trade and other payables 107,346 84,360
Total liabilities 566,055 540,685
Net assets
312,525,046 294,969,346
Equity
Retained earnings (131,066,221) (149,952,728)
Share capital 10 443,591,267 444,922,074
Total equity 312,525,046 294,969,346
Net Assets attributable to 2021 Shareholders 270,738,076 –
Number of 2021 Shares
10
405,165,477 –
Net asset value per 2021 Share 0.6682 –
Net Assets attributable to Realisation Shareholders 41,786,970 294,969,346
Number of Realisation Shares
10
62,562,883 467,728,360
Net asset value per Realisation Share 0.6679 0.6306
The Financial Statements on pages 41 to 73 were approved and authorised for issue by the Board of Directors on 13 April 2022
and signed on its behalf by:
Jon Bridel
Director
The accompanying notes on pages 45 to 73 form an integral part of the Financial Statements.

44
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
FINANCIAL REPORT
Statement of Cash Flows
For the year ended 31 December 2021
1 January 2021
to 31 December 2021
1 January 2020
to 31 December 2020
Note US$ US$
Cash flows from/(used in) operating activities
Profit/(loss) for the year 64,467,458 (26,988,615)
Adjustments to reconcile profit/(loss) to net cash flows:
Net (gains)/losses on financial assets at fair value
through profit or loss
6 (65,240,126) 26,086,364
Net foreign exchange (gains)/losses (14,843) 94,218
(787,511) (808,033)
(Increase) in prepayments (68,827) (10,901)
Increase/(decrease) in trade and other payables 22,986 (5,325)
Income distributions received from Master Fund II 6 15,876,074 24,381,039
Income distributions received from Master Fund III 6 30,750,828 –
Capital contributions into Master Fund II during the year 6 – (40,204,500)
Net cash flow from/(used in) operating activities 45,793,550 (16,647,720)
Cash flows from investing activities
Sale of investment during the year – 34,999,873
Net cash flow from investing activities – 34,999,873
Cash flows used in financing activities
Proceeds from 2017 share issuance, net of costs 10 – 5,521,130
Costs of redesignation of 2017 Shares into 2021 Shares
and Realisation Shares during the year
(1,330,807) –
Dividends paid during the year 4 (45,580,951) (26,722,079)
Net cash flow used in financing activities (46,911,758) (21,200,949)
Net decrease in cash and cash equivalents (1,118,208) (2,848,796)
Cash and cash equivalents at beginning of year
2,397,636 5,340,650
Effect of foreign exchange rate changes during the year 14,843 (94,218)
Cash and cash equivalents at end of year 1,294,271 2,397,636
The accompanying notes on pages 45 to 73 form an integral part of the Financial Statements.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
45
1. GENERAL INFORMATION
Fair Oaks Income Limited (the “Company”) was registered in Guernsey under the Companies (Guernsey) Law, 2008 on
7 March 2014. The Company’s registration number is 58123 and it is regulated by the Guernsey Financial Services Commission
as a registered closed-ended collective investment scheme under The Registered Collective Investment Scheme Rules and
Guidance 2021. The Company is listed and began trading on the Specialist Fund Segment (“SFS”) of the London Stock
Exchange on 12 June 2014.
Reorganisation
On 19 April 2021, the Company announced the result of its reorganisation proposal, being that 62,562,883 2017 Shares had
been elected for re-designation as Realisation Shares (the “Realisation Shares”), representing 13.4% of the 2017 Shares in
issue, and 405,815,477 2017 Shares were re-designated as 2021 Shares (the “2021 Shares”), representing the balance of
86.6% of the 2017 Shares in issue (including 650,000 shares held in Treasury). The Company makes its investments through
FOIF II LP (the “Master Fund II”) and FOMC III LP (the “Master Fund III”), in both of which the Company is a limited partner
(the “Master Fund II” and the “Master Fund III” together the “Master Funds”). The Master Fund II was registered in Guernsey
on 24 February 2017 and the Master Fund III was registered in Guernsey on 10 March 2021 under The Limited Partnerships
(Guernsey) Law, 1995. The purpose of the reorganisation was to allow those Shareholders who wished to extend the life of
their investment in the Company beyond the planned end date of the Master Fund II, being 21 June 2026, and to be able to do
so by having their 2017 Shares re-designated as 2021 Shares. These 2021 Shares investing in the new Master Fund III, which
has a planned end date of 12 June 2028 and an investment objective and policy substantially similar to that of Master Fund II.
At 31 December 2021, the Company has 62,562,883 Realisation Shares and 405,165,477 2021 Shares in issue.
The Realisation Shares invest solely into the Master Fund II and the 2021 Shares invest solely into the Master Fund III.
At 31 December 2021, the Company had direct holdings of 9.59% (31 December 2020: 71.80%) in the Master Fund II and
100% holding in Master Fund III, which in turn had a holding of 62.21% in the Master Fund II. Together, the Company held a
direct and indirect holding of 71.80% in the Master Fund II.
The Master Funds
During the year ended 31 December 2021, the Master Fund II allowed one new limited partner to enter the partnership (being
the Master Fund III) and at 31 December 2021, the Master Fund II had six limited partners, including Fair Oaks Founder II LP,
a related entity. At 31 December 2021, the Master Fund III had two limited partners, including Fair Oaks Founder VI LP. The
General Partner of the Master Fund II and Master Fund III is Fair Oaks Income Fund (GP) Limited (the “General Partner” or “GP”).
Cycad and Wollemi
The Master Fund II is also invested into Cycad Investments LP (“Cycad”). Cycad is a Limited Partnership registered in the
United States of America on 2 June 2017. Aligned with the Company’s investment policy, Cycad also invests into Collateral
Loan Obligations (“CLOs”). On 9 March 2021, a new Guernsey limited partnership was established called Wollemi Investments
I LP (“Wollemi”). On 23 March 2021, the Master Fund II transferred its investment in Cycad to Wollemi in exchange for limited
partnership interests in Wollemi. In addition, during the year ended 31 December 2021, the Master Fund II also transferred
its investments in FOAKS 1X CLO, FOAKS 2X CLO and FOAKS 3X CLO (the “Fair Oaks CLOs”) to Wollemi in exchange for
limited partnership interests in Wollemi. At 31 December 2021, the Master Fund II holds 100.00% (31 December 2020: nil) of
the commitment capital of Wollemi.
Founder Partners
Fair Oaks Founder II LP, a Guernsey limited partnership, has been established to act as the Founder Limited Partner of Master
Fund II. Fair Oaks Founder VI LP, a Guernsey limited partnership, has been established to act as the Founder Limited Partner
of Master Fund III.
General Partner
The General Partner of the Master Fund II, Master Fund III, Cycad and Wollemi is Fair Oaks Income Fund (GP) Limited (the
“General Partner” or “GP”). The Master Funds invest in portfolios consisting primarily of CLOs. The Company may also invest
in Qualifying Short Term Investments if at any time the Company holds any uninvested cash.
With effect from 15 May 2014, Fair Oaks Capital Limited (the “Investment Adviser”) was appointed as the Investment Adviser.
FINANCIAL REPORT
Notes to the Financial Statements
For the year ended 31 December 2021

46
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021
2. SIGNIFICANT ACCOUNTING POLICIES
Statement of Compliance
The Financial Statements, which give a true and fair view, have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations issued
by the International Financial Reporting Interpretations Committee (“IFRIC”) and are in compliance with the Companies
(Guernsey) Law, 2008 and the Prospectus Rules, the Disclosure Guidance and Transparency Rules and the Market Abuse
Directive (as implemented in the UK through the Financial Services and Markets Authority).
Basis of Preparation
The Company’s Financial Statements have been prepared on a historical cost convention, except for financial assets
measured at fair value through profit or loss.
The preparation of Financial Statements in conformity with IFRS requires the Company to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the Financial Statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates
and judgements are discussed in note 3. The principal accounting policies adopted are set out below.
The Directors believe that the Annual Report and Financial Statements contain all of the information required to enable
shareholders and potential investors to make an informed appraisal of the investment activities and profit or loss of the
Company for the period to which it relates and does not omit any matter or development of significance.
As explained below, the Company qualifies as an investment entity and is therefore not permitted to prepare consolidated
Financial Statements under IFRS.
Going Concern
The Directors have assessed the financial position of the Company as at 31 December 2021 and the factors that may impact
its performance (including the potential impact on markets and supply chains of geo-political risks such as the current crisis in
Ukraine, the risk of further COVID-19 uncertainty and continuing macro-economic factors and inflation) in the forthcoming year.
COVID-19
The Directors are aware that further economic disruption caused by COVID-19 may mean there is an increased chance that
the Master Funds’ CLO investments, will experience higher loan defaults and CCC ratings, breach over-collateralisation tests
and, as a result, withhold some quarterly distributions from some CLO noteholders. Furthermore, the Directors are well aware
of the risk of cash flow diversion of the Master Funds’ CLO investments so will not fully invest all available capital without
leaving available liquidity for expenses. Despite this the Master Funds have continued to make income distributions to the
Company throughout 2021, as the Master Funds’ CLO investments continue to comply with their over-collateralisation tests
and make cash distributions.
Russia/Ukraine crisis
The Master Funds CLO investments do not hold any securities in the Russia/Ukraine region and as such the performance or
creditworthiness of the underlying CLOs are not expected be significantly impacted. Commodity prices due to the invasion
of Ukraine (mainly oil/gas, metals and wheat) may impact some of the companies that the CLOs have loans to but many
companies were already subject to input price inflation before the Ukraine invasion and it is not expected that the additional
cost inflation will significantly impact the performance of the CLOs.
The Investment Adviser continues to carefully monitor the performance of the Master Funds investments, working closely
with the Directors on current and emerging risks to the Company.
Following due consideration and after a review of the Company’s holdings in cash and cash equivalents, investments and
a consideration of the income deriving from, and the viability of, the investments in the Master Funds, the Directors believe
that it is appropriate to adopt the going concern basis in preparing the Financial Statements, as the Company has adequate
financial resources to meet its liabilities as they fall due for at least the 12 month period from the date of the approval of the
Financial Statements.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
47
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
New Accounting Standards and interpretations adopted in the reporting period
The following standard and interpretation has been applied in these Financial Statements:
• Amendments to IFRS 9, IAS 39 and IFRS 7– Interest Rate Benchmark Reform (the Phase 2 amendments) (effective for
periods commencing on or after 1 January 2021).
The impacts of the Interest Rate Benchmark Reform on the Master Funds CLO investments are detailed in Note 5.
The adoption of this standard has not had a material impact on these Financial Statements.
New Accounting Standards and interpretations applicable to future reporting periods
At the date of approval of these Financial Statements, the following standards and interpretations, which have not been
applied in these Financial Statements, were in issue but not yet effective:
• IAS 1 (amended), “Presentation of Financial Statements” (amendments regarding the classification of liabilities, effective
for periods commencing on or after 1 January 2023).
• Amendments to IFRS 3,”Business combinations” (effective for periods commencing on or after 1 January 2022) – The
amendment adds a requirement that, for transactions and other events within the scope of IAS 37 or IFRIC 21, an
acquirer applies IAS 37 or IFRIC 21 (instead of the Conceptual Framework) to identify the liabilities it has assumed in a
business combination and adds an explicit statement that an acquirer does not recognise contingent assets acquired in
a business combination.
• Amendments to IAS 37, “Provisions, contingent liabilities and contingent assets” (effective for periods commencing on
or after 1 January 2022) – The changes in Onerous Contracts — Cost of Fulfilling a Contract specify that the ‘cost of
fulfilling’ a contract comprises the ‘costs that relate directly to the contract’.
• Annual Improvements to IFRS Standards 2018-2020 (effective for periods commencing on or after 1 January 2022).
In regard to IFRS 9, the amendment clarifies which fees an entity includes when it applies the ‘10 per cent’ test in
assessing whether to derecognise a financial liability.
• IAS 1 (amended) “Presentation of Financial Statements” and IFRS Practice Statement 2 “Making Materiality Judgements”
(effective for periods commencing on or after 1 January 2023). The amendments to IAS 1 require companies to disclose
their material accounting policy information rather than their significant accounting policies. The amendments to IFRS
Practice Statement 2 provide guidance on how to apply the concept of materiality to accounting policy disclosures.
• Amendments to IAS 8 – “Accounting Policies, Changes in Accounting Estimates and Errors” (effective for periods
commencing on or after 1 January 2023). The amendments clarify how companies should distinguish changes in
accounting policies from changes in accounting estimates. That distinction is important because changes in accounting
estimates are applied prospectively only to future transactions and other future events, but changes in accounting
policies are generally also applied retrospectively to past transactions and other past events.
The Directors expect that the adoption of these amended standards in a future period will not have a material impact on the
Financial Statements of the Company.
Interest income
Interest income comprises interest income from cash and cash equivalents. Interest income is recognised on a time-
proportionate basis using the effective interest method.
Net losses on Financial Assets at Fair Value through Profit or Loss
Net losses on financial assets at fair value through profit or loss includes all realised and unrealised fair value changes, foreign
exchange gains/(losses) and income and capital distributions received.
Net realised (losses)/gains from financial assets at fair value through profit or loss are calculated using the average cost method.
Expenses
Expenses of the Company are charged through profit or loss in the Statement of Comprehensive Income on an accruals
basis.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

48
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2021 Shares, Realisation Shares, 2017 Shares and C Shares
The 2021 shares, Realisation shares, 2017 shares (when in issue) and C shares (when in issue) of the Company are classified
as equity based on the substance of the contractual arrangements and in accordance with the definition of equity instruments
under IAS 32.
The proceeds from the issue of participating shares are recognised in the Statement of Changes in Shareholders’ Equity, net
of incremental issuance costs.
Financial Instruments
Financial Assets – Classification
The Company classifies its financial assets and financial liabilities into categories in accordance with IFRS 9.
On initial recognition, the Company classifies financial assets as measured at amortised cost or at fair value through profit or
loss (“FVTPL”).
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
– it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”).
All other financial assets of the Company are measured at FVTPL.
In making an assessment of the objective of the business model in which a financial asset is held, the Company considers all
of the relevant information about how the business is managed.
The Company has determined that it has two business models.
– Held-to-collect business model: this includes cash and cash equivalents, prepayments and distributions receivable.
These financial assets are held to collect contractual cash flow.
– Other business model: this includes investments in the Master Funds and derivatives. These financial assets are managed
and their performance is evaluated, on a fair value basis, with frequent sales taking place.
The Investment entities exception to consolidation (“Investment entities exception”) in IFRS 10 ‘Consolidated Financial
Statements’ (“IFRS 10”) requires subsidiaries of an investment entity to be accounted for at fair value through profit or loss in
accordance with IFRS 9 ‘Financial Instruments’ (“IFRS 9”).
Cash comprises current deposits with banks. Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash, are subject to an insignificant risk of changes in value, and are held for the purpose
of meeting short-term cash commitments rather than for investments or other purposes.
A non-derivative financial asset with fixed or determinable payments could be classified as a loan and receivable unless it was
quoted in an active market or was an asset for which the holder may not recover substantially all of its initial investment, other
than because of credit deterioration.
Financial liabilities – Classification
Financial liabilities are classified as measured at amortised cost or FVTPL.
A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such
on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest
expense, are recognised in profit or loss.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense
and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised
in profit or loss.
Financial liabilities at amortised cost:
This includes trade and other payables.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
49
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial Instruments (continued)
Financial Assets and Liabilities - recognition, measurement and gains and losses
Financial assets and financial liabilities are measured initially at fair value, being the transaction price, including transaction
costs for items that will subsequently be measured at amortised cost, on the trade date. Transaction costs on financial assets
at fair value through profit or loss are expensed immediately.
Subsequent measurement
After initial measurement, the Company measures financial instruments classified at fair value through profit or loss at their
fair values. Changes in fair value are recognised in “Net gains/(losses) on financial assets at fair value through profit or loss”
in the Statement of Comprehensive Income.
Derecognition
A financial asset is derecognised when the contractual rights to the cash flows from the financial asset expire or it transfers
the financial asset and the transfer qualifies for derecognition in accordance with IFRS 9. A financial liability is derecognised
when the obligation specified in the contract is discharged, cancelled or expires.
Investments in the Master Fund III and the Master Fund II
The Board of Directors (the “Board”) has determined that the Company has all the elements of control as prescribed by IFRS
10 in relation to the Master Fund III, and then indirectly the Master Fund II, as the Company is the main limited partner in
the Master Fund III and indirectly (via its investment in the Master Fund III) is the main limited partner in the Master Fund II,
is exposed and has rights to the returns of the Master Fund III (and indirectly in the Master Fund II) and has the ability either
directly, or through the Investment Adviser, to affect the amount of its returns from the Master Fund III (and indirectly in the
Master Fund II).
The Investment entities exemption requires that an investment entity that has determined that it is a parent under IFRS 10
shall not consolidate certain of its subsidiaries; instead it is required to measure its investment in these subsidiaries at fair
value through profit or loss in accordance with IFRS 9.
The criteria which defines an investment entity are as follows:
- An entity has obtained funds from one or more investors for the purpose of providing those investors with investment
management services;
- An entity has committed to its investors that its business purpose is to invest funds solely for the returns from capital
appreciation, investment income or both; and
- An entity measures and evaluates the performance of substantially all of its investments on a fair value basis.
The Company provides investment management services and has a number of investors who pool their funds to gain access
to these services and investment opportunities that they might not have had access to individually. The Company, being listed
on the SFS of the London Stock Exchange, obtains funding from a diverse group of external shareholders.
Consideration is also given to the time frame of an investment. An investment entity should not hold its investments indefinitely
but should have an exit strategy for their realisation. As both the Master Fund III’s and Master Fund II’s investments have
documented maturity/redemption dates or will be sold if other investments with better risk/reward profile are identified, the
Board of Directors consider that this demonstrates a clear exit strategy.
The Master Fund III and Master Fund II measure and evaluate the performance of substantially all of their investments on a
fair value basis. The fair value method is used to represent the Company’s performance in its communication to the market,
including investor presentations. In addition, the Company reports fair value information internally to Board of Directors, who
use fair value as a significant measurement attribute to evaluate the performance of its investments and to make investment
decisions for mature investments.
The Company has determined that the fair value of the Master Fund III is the Master Fund III’s Net Asset Value (“NAV”), and
incorporated into the Master Fund III’s NAV is the Master Fund II NAV. The Company also determined that the fair value of the
Master Fund II is the Master Fund II’s NAV.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

50
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial Instruments (continued)
Investments in the Master Fund III and the Master Fund II (continued)
The Company, via its investments in the Master Funds, is also invested into Wollemi and Cycad. The Company has determined
that the fair value of the Wollemi is the Wollemi’s Net Asset Value (“NAV”), and incorporated into the Wollemi’s NAV is the
Cycad NAV.
The Company has concluded that the Master Fund III, and then indirectly the Master Fund II, for which the Company’s
commitment is detailed further in Note 13, meet the definition of unconsolidated subsidiaries under IFRS 12 ‘Disclosure of
Interests in Other Entities’ (“IFRS 12”) and have made the necessary disclosures in notes 5 and 6 of these Financial Statements.
Foreign Currency
Functional and presentation currency
The Board of Directors has determined that the functional currency of the Company is US Dollar. In doing so, they have considered
the following factors: that US Dollar is the currency of the primary economic environment of the Company, the currency in which
the original finance was raised and distributions will be made, the currency that would be returned if the Company was wound
up, and the currency to which the majority of the underlying investments are exposed. The Financial Statements of the Company
are presented in US Dollars, which has been selected as the presentation currency of the Company.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
the Statement of Comprehensive Income.
Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction (not
retranslated). Non-monetary items measured at fair value are translated using the exchange rates at the reporting date when
fair value was determined.
Dividends
Dividends payable to the holders of 2021 Shares and Realisation Shares are recorded through the Statement of Changes in
Shareholders’ Equity when they are declared to the respective shareholders. The payment of any dividend by the Company
is subject to the satisfaction of a solvency test as required by the Companies (Guernsey) Law, 2008.
Segmental Reporting
The Board has considered the requirements of IFRS 8 – “Operating Segments”. The Company has entered into an Investment
Advisory Agreement with the Investment Adviser under which the Investment Adviser is responsible for the management
of the Company’s investment portfolio, subject to the overall supervision of the Board of Directors. Subject to its terms
and conditions, the Investment Advisory Agreement requires the Investment Adviser to manage the Company’s investment
portfolio in accordance with the Company’s investment guidelines as in effect from time to time, including the authority
to purchase and sell securities and other investments and to carry out other actions as appropriate to give effect thereto.
However, the Board retains full responsibility to ensure that the Investment Adviser adheres to its mandate. Moreover, the
Board is fully responsible for the appointment and/or removal of the Investment Adviser. Accordingly, the Board is deemed to
be the “Chief Operating Decision Maker” of the Company.
In the Board of Directors’ opinion, the Company is engaged in a single segment of business, being investments into the Master
Fund II and the Master Fund III (31 December 2020: Master Fund II only), which are Guernsey registered limited partnerships.
Segment information is measured on the same basis as that used in the preparation of the Company’s Financial Statements.
The Company receives no revenues from external customers, nor holds any non-current assets, in any geographical area
other than Guernsey.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
51
3. USE OF JUDGEMENTS AND ESTIMATES
The preparation of Financial Statements in accordance with IFRS requires the Board of Directors to make judgements,
estimates and assumptions that affect the application of policies and the reported amounts of assets, liabilities, income and
expenses, disclosure of contingent assets and liabilities at the date of the Financial Statements and income and expenses
during the year. The estimates and associated assumptions are based on various factors that are believed to be reasonable
under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
The principal estimates and judgements made by the Board are as follows:
Judgements
Investment Entity
In accordance with the Investment Entities exemption contained in IFRS 10, the Board has determined that the Company
satisfies the criteria to be regarded as an investment entity and as a result measures its investments in the Master Fund III and
Master Fund II at fair value. This determination involves a degree of judgement (see note 2).
Estimates
Fair Value
The Company records its investments in the Master Fund III and the Master Fund II at fair value. Fair value is determined as
the Company’s share of the NAV of the investment. This share is net of any notional carried interest due to Fair Oaks Founder
VI LP (the “Founder Partner VI”), the Founder Partner of Master Fund III and Fair Oaks Founder II LP (the “Founder Partner
II”), the Founder Partner of Master Fund II. The Investment Adviser has reviewed the NAV of the investment and determined
that no adjustments regarding liquidity discounts were required.
4. DIVIDENDS
The Company’s policy is to declare dividends to 2021 and Realisation shareholders as follows:
2021 Shares
The Board intends to pay quarterly dividends to holders of 2021 Shares representing an amount in aggregate at least equal
to the gross income received by the Company from investments in the relevant financial year that are attributable to the 2021
Shares’ interest in Master Fund III and qualifying short term investments, less a proportionate share of the expenses of the
Company.
Realisation Shares
The Company intends to pay dividends to holders of Realisation Shares representing an amount in aggregate at least equal
to the gross income from investments received by the Company in the relevant financial period attributable to the Realisation
Shares’ interest in Master Fund II and qualifying short term Investments, less expenses of the Company.
The Company declared the following dividends per 2021 Share during the year ended 31 December 2021:
Period to Payment date
Dividend rate
per 2021 share
(cents)
Net
dividend
payable
(US$) Record date Ex-dividend date
31 December 2020 26 February 2021 2.50 10,148,155 12 February 2021 11 February 2021
31 March 2021 25 June 2021 2.25 9,104,882 28 May 2021 27 May 2021
30 June 2021 17 September 2021 2.50 10,108,820 20 August 2021 19 August 2021
30 September 2021 18 November 2021 2.50 10,118,842 5 November 2021 4 November 2021
9.75 39,480,699
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

52
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
4. DIVIDENDS (continued)
The Company declared the following dividends per Realisation Share during the year ended 31 December 2021:
Period to Payment date
Dividend rate
per 2021 share
(cents)
Net
dividend
payable
(US$) Record date Ex-dividend date
31 December 2020 26 February 2021 2.50 1,564,499 12 February 2021 11 February 2021
31 March 2021 25 June 2021 2.25 1,407,662 28 May 2021 27 May 2021
30 June 2021 17 September 2021 2.50 1,564,019 20 August 2021 19 August 2021
30 September 2021 18 November 2021 2.50 1,564,072 5 November 2021 4 November 2021
9.75 6,100,252
At 31 December 2021, the Company’s retained earnings include unrealised losses of US$117,326,326 (31 December 2020:
US$135,941,934) (see note 6). Gross income from investments excludes these unrealised losses which are capital in nature.
The Company declared the following dividends per 2017 Share during the year ended 31 December 2020:
Period to Payment date
Dividend rate
per 2017 share
(cents)
Net
dividend
payable
(US$) Record date Ex-dividend date
31 December 2019 30 January 2020 0.70 3,172,231 17 January 2020 16 January 2020
31 January 2020 27 February 2020 0.70 3,160,025 14 February 2020 13 February 2020
29 February 2020 26 March 2020 0.70 3,118,598 13 March 2020 12 March 2020
Quarter to
30 June 2020
20 August 2020 1.50 7,014,282 7 August 2020 6 August 2020
Quarter to
30 September 2020
19 November 2020
2.20 10,256,943
6 November 2020 5 November 2020
5.80 26,722,079
The default currency payment for dividends is US Dollars. However, with effect from 29 June 2016, shareholders could
elect to receive their dividends in British Pounds Sterling (“Sterling”) by registering under the Company’s Dividend Currency
Election.
The rate per 2021 Share and Realisation Share to be used to pay shareholders who elect to receive their dividend in Sterling
is announced on the London Stock Exchange each month prior to the payment date.
Under Guernsey law, companies can pay dividends in excess of accounting profit provided they satisfy the solvency test
prescribed by the Companies (Guernsey) Law, 2008. The solvency test considers whether a company is able to pay its
debts when they fall due, and whether the value of a company’s assets is greater than its liabilities. The Company passed the
solvency test for each dividend paid.
Total dividends payable as at 31 December 2021 were US$Nil (31 December 2020: US$Nil).
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
53
5. FINANCIAL RISK MANAGEMENT
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management
framework. The Company’s risk management policies are established to identify and analyse the risks faced by the Company,
to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies are
reviewed regularly to reflect changes in market conditions and the Company’s activities. Below is a non-exhaustive summary
of the risks that the Company is exposed to as a result of its use of financial instruments:
Market Risk
Market risk is the risk of changes in market prices, such as foreign exchange rates, interest rates and equity prices, affecting
the Company’s income and/or the value of its holdings in financial instruments.
The Company’s exposure to market risk comes mainly from movements in the value of its investments in the Master Funds
and on a look-through basis to the underlying loans in each CLO.
Changes in credit spreads may further affect the Company’s net equity or net income directly through their impact on
unrealised gains or losses on investments within the Master Funds and on a look-through basis to the underlying loans in
each CLO.
The objective of market risk management is to manage and control market risk exposures within acceptable parameters while
optimising the return on investments. The Company’s strategy for the management of market risk mirrors the strategy of the
Master Funds, driven by their investment objective to generate attractive, risk-adjusted returns, principally through income
distributions, by seeking exposure to US and European CLOs or other vehicles and structures which provide exposure to
portfolios consisting primarily of US and European floating rate senior secured loans and which may include non-recourse
financing. The Company’s market risk is managed on a daily basis by the Investment Adviser in accordance with policies and
procedures in place.
The Company intends to mitigate market risk generally by not making investments that would cause it to have exposure
to a single corporate issuer exceeding 5% of the Master Funds’ aggregate gross assets at the time of investment. Special
Purpose Vehicles such as CLOs are not considered corporate issuers. The Company’s market positions are monitored on a
quarterly basis by the Board of Directors.
Interest Rate Risk
The Company is exposed to interest rate risk through the investments held by the Master Funds and on a look-through basis
to the underlying assets in the CLOs.
Interest receivable by the Company on bank deposits or payable on bank overdraft positions will be affected by fluctuations
in interest rates, however, the underlying cash positions will not be affected.
A majority of the Company’s financial assets comprise investments into the Master Fund II and the Master Fund III, which
invest in income notes: Equity Subordinated and Mezzanine tranches of cash flow CLOs. The Master Fund II’s exposure, and
the Master Fund III’s indirect exposure via its investment in the Master Fund II, to interest rate risk is significantly mitigated by
the fact that the majority of the underlying loans in each CLO bear interest at floating Libor/Term SOFR-based rates.
Interest rate benchmark reform
On 31 December 2021, Libor settings for GBP, Euro, Swiss Franc, Japanese Yen and 1-week and 2-month USD were
discontinued. The remaining USD Libor settings will be discontinued after 30 June 2023 and from 1 January 2022, no new
loans or securities are expected to be issued referencing USD Libor. The Alternative Reference Rates Committee convened
by the US Federal Reserve Board and the New York Fed has designated Term SOFR (Secured Overnight Funding Rate) as
the official replacement for USD Libor.
The Master Funds have exposure to USD CLOs which reference USD Libor.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

54
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
5. FINANCIAL RISK MANAGEMENT (continued)
Market Risk (continued)
Interest Rate Risk (continued)
USD Subordinated CLO Notes
Subordinated Notes of USD CLOs accounted for 58% of the Master Funds investments as at 31 December 2021. All of
these CLOs had rated liabilities that paid interest based on USD Libor and the documentation of all but one of these CLOs
includes provisions for the liabilities to switch to Term SOFR (as the designated replacement rate) when USD Libor is no
longer available or when Term SOFR is referenced by over 50% of the loan market. The one CLO held by the Master Fund II
which does not include such provisions was issued in 2017. To the extent that the Master Fund II has not exercised its option
to liquidate this CLO prior to June 2023 and no amendment has been agreed with its rated noteholders, the CLO’s rated
liabilities would continue to pay interest based on the last available USD Libor rate.
As at 31 December 2021, 98% of the loans held by the CLOs (in which the Master Funds hold Subordinated Notes)
paid interest based on USD Libor and 2% paid interest based on Term SOFR. It is expected that the percentage of loans
referencing SOFR will gradually increase during 2022 and the first half of 2023 as new SOFR-based loans are issued and
Libor-based loans are repaid or amended to reference SOFR ahead of the cessation of all USD Libor in June 2023.
The quarterly distributions to holders of Subordinated Notes of a CLO depend primarily on the difference between the interest
received on the CLO’s loan assets and the interest paid on the CLO’s rated liabilities. Distributions on the Master Funds
USD Subordinated Notes during 2022 and the first half of 2023 may thus be influenced by changes in the basis (difference)
between USD Libor and Term SOFR.
USD Mezzanine CLO Notes
USD CLO Mezzanine Notes accounted for 9% of the Master Funds investments as at 31 December 2021. All of these notes
paid interest based on USD Libor as at 31 December 2021. The majority of these notes include provisions for the liabilities
to switch to Term SOFR (as the designated replacement rate) when USD Libor is no longer available or when Term SOFR is
referenced by over 50% of the loan market. The notes which do not include this language will continue to pay interest based
on the latest available USD Libor rate unless they are redeemed or amended prior to June 2023.
EUR Subordinated and Mezzanine Notes
The EUR Subordinated and Mezzanine CLO Notes held by the Master Funds, and indirectly through Wollemi, and their
underlying loan assets reference Euribor (not Euro Libor) so are unaffected by the cessation of Libor settings. There are no
plans to discontinue Euribor.
The following table shows the portfolio profile of the Master Funds at 31 December 2021 and 31 December 2020:
31 December 2021 31 December 2020
Master Fund III
1
US$
Master Fund II
2
US$
Master Fund II
3
US$
Investments with exposure to a floating
interest rate
269,884,334 41,814,869 293,083,595
Financial assets at fair value through
profit or loss (note 6)
269,884,334 41,814,869 293,083,595
1
At 31 December 2021, shows the Master Fund II’s exposure in the underlying CLO investments via the Company’s Master Fund III share through the 2021 Shares. Source: CLO
trustee reports. Based on the Master Funds exposure and weighted by CLO size and Master Funds ownership percentage.
2
Shows the Company’s proportionate direct share in the Master Fund II at 9.59% through Realisation Shares investment only.
3
At 31 December 2020, shows the Company’s proportionate direct share in the Master Fund II at 71.80%.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
55
5. FINANCIAL RISK MANAGEMENT (continued)
Market Risk (continued)
Interest Rate Risk (continued)
The following table shows the Board of Directors’ best estimate of the Company’s share of the sensitivity of the portfolio of the
Master Funds to stressed changes in interest rates, with all other variables held constant. The table assumes parallel shifts in
the respective forward yield curves.
Possible 31 December 2021 Possible 31 December 2020
reasonable effect on net assets reasonable effect on net assets
change in rate and profit or loss change in rate and profit or loss
US$ US$ US$ US$
-1% 7,231,099 -1% 1,067,458
1% 152,694 1% (1,401,974)
At 31 December 2021 the CLOs in which the Master Funds holds equity, have liabilities with US Dollar Libor/Term SOFR
floors at zero and loan assets with Libor floors of up to 1%. With US Dollar Libor/Term SOFR at circa 0.25%, if US Dollar Libor/
Term SOFR goes down, the interest on the liabilities drops by more than the interest on the interest floored loans, producing
more residual cash flow for equity.
Currency risk
The Company is exposed to very limited currency risk, as the majority of its assets and liabilities are denominated in US
Dollars.
The Company is exposed indirectly to currency risk through its investment into the Master Fund II. The Master Fund II’s portfolio
is denominated in US Dollar and Euro. Accordingly, the value of such assets may be affected, favourably or unfavourably, by
fluctuations in currency rates which, if unhedged, could have the potential to have a significant effect on returns. To reduce
the impact of currency fluctuations and the volatility of returns which may result from currency exposure, the Investment
Adviser hedges the currency exposure of the assets of the Master Fund II. At 31 December 2021, as the Master Fund III’s only
investment is in the Master Fund II which is denominated in US Dollar, it therefore did not have any significant direct currency
exposure as the Master Fund II had already hedged its currency exposure of the Euro assets.
The Company’s share of the Master Fund II and the Master Fund III’s total net foreign currency exposure at the year end was
as follows:-
31 December 2021
Master Fund III
1
US$
31 December 2021
Master Fund II
2
US$
31 December 2020
Master Fund II
3
US$
EUR Exposure
Cash and cash equivalents 851,960 131,334 –
Other receivables 4,758,568 733,558 –
Trade and other payables (50,180) (7,735) (75,093)
Derivatives at fair value through profit or loss (90,553,336) (13,959,275) (122,085,234)
Financial assets at fair value through profit and loss 91,957,687 14,175,763 136,128,705
Net EUR Exposure 6,964,699 1,073,645 13,968,378
1
At 31 December 2021, shows the Master Fund II’s exposure in the underlying CLO investments via the Company’s 2021 Shares through the Master Fund III. Source: CLO trustee
reports. Based on the Master Funds exposure and weighted by CLO size and Master Funds ownership percentage.
2
Shows the Company’s proportionate direct share in the Master Fund II at 9.59% through Realisation Shares investment only.
3
At 31 December 2020, shows the Company’s proportionate direct share in the Master Fund II at 71.80%.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

56
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
5. FINANCIAL RISK MANAGEMENT (continued)
Market Risk (continued)
Currency risk (continued)
31 December 2021
Master Fund III
1
US$
31 December 2021
Master Fund II
2
US$
31 December 2020
Master Fund II
3
US$
GBP Exposure
Trade and other payables (110,716) (17,067) (40,433)
Net GBP Exposure (110,716) (17,067) (40,433)
NET EXPOSURE 6,853,983 1,056,578 13,927,945
31 December 2021
Possible change 31 December 2021 effect on net assets
in exchange rate net exposure and profit or loss
US$ US$
EUR/US Dollar +/- 10% 8,038,345 (-/+) 808,835
GBP/US Dollar +/- 10% (127,783) (-/+) 12,778
31 December 2020
Possible change 31 December 2020 effect on net assets
in exchange rate net exposure and profit or loss
US$ US$
EUR/US Dollar +/- 15% 13,968,377 (-/+) 2,109,454
GBP/US Dollar +/- 20% (40,433) (-/+) 8,087
The sensitivity rate of 10% (31 December 2020: 15%) is regarded as reasonable due to the actual volatility over the last year
of US Dollar against Euro.
The sensitivity rate of 10% (31 December 2020: 20%) is regarded as reasonable due to the actual volatility over the last year
of US Dollar against Sterling.
Other price risks
There is a risk that the fair value of future cash flows, on a look-through basis to the underlying CLOs, will fluctuate due to
changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused
by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded
in the market. The Board of Directors does not believe that the returns on investments are correlated to any specific index or
other price variable.
If the value of the Company’s investment in the Master Fund III were to increase or decrease by 10%, the impact on the NAV
of the Company would be +/- US$26,988,433.
If the value of the Company’s investment in the Master Fund II were to increase or decrease by 10% (31 December 2020:
50%), the impact on the NAV of the Company would be +/- US$4,181,487 (31 December 2020: US$146,541,798).
At 31 December 2021, the sensitivity rate of 10% (31 December 2020: 50%) is regarded as reasonable due to the actual
market price volatility experienced on the Master Funds’ CLO investments during the year.
Credit and Counterparty Risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has
entered into with the Company, the Master Fund III, Master Fund II or a vehicle in which the Master Fund III or Master Fund
II invests, resulting in a financial loss to the Company. Credit risk arises principally from debt securities held, and also from
derivative financial assets and cash and cash equivalents. For risk management reporting purposes, the Company considers
and aggregates all elements of credit risk exposure (such as individual obligation default risk, country risk and sector risk).
1
At 31 December 2021, shows the Master Fund II’s exposure in the underlying CLO investments via the Company’s 2021 Shares through the Master Fund III. Source: CLO trustee
reports. Based on the Master Funds exposure and weighted by CLO size and Master Funds ownership percentage.
2
Shows the Company’s proportionate direct share in the Master Fund II at 9.59% through Realisation Shares investment only.
3
At 31 December 2020, shows the Company’s proportionate direct share in the Master Fund II at 71.80%.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
57
5. FINANCIAL RISK MANAGEMENT (continued)
Credit and Counterparty Risk (continued)
The Company’s policy on credit risk mirrors that of the Master Fund III and the Master Fund II, which is to minimise its
exposure to counterparties with perceived higher risk of default by dealing only with counterparties that meet the credit
standards set out in the Company’s prospectus, and by taking collateral.
The table below analyses the Company’s maximum exposure to credit risk in relation to the components of the Statement of
Financial Position.
31 December 2021
US$
31 December 2020
US$
Cash and cash equivalents 1,294,271 2,397,636
Financial assets at fair value through profit or loss 311,699,203 293,083,595
312,993,474 295,481,231
At 31 December 2021, there were no financial assets past due or impaired (31 December 2020: none).
At 31 December 2021, the cash and cash equivalents and other assets of the Company, excluding its investments into the
Master Fund III and Master Fund II, and substantially all of the assets of the Master Fund II are held by BNP Paribas Securities
Services S.C.A. (the “Custodian”). The cash and substantially all of the assets of the Master Fund III are held by U.S. Bank
Global Corporate Trust Services, UK Branch (the “US Bank”). Bankruptcy or insolvency of the Custodian or US Bank may
cause the Company’s rights with respect to securities held by the Custodian or US Bank to be delayed or limited. This risk
is managed by monitoring the credit quality and financial positions of the Custodian or US Bank. The long-term rating of the
Custodian as at 31 December 2021 was Aa3 as rated by Moody’s (31 December 2020: Aa3) and A+ by Standard & Poor’s
(31 December 2020: AA-). The long-term rating of US Bank as at 31 December 2021 was A1 as rated by Moody’s and AA-
by Standard & Poor’s.
Credit risk is assessed from time to time by the Investment Adviser on a look-through basis to the underlying loans in each
CLO. The Investment Adviser seeks to manage this risk by providing diversification in terms of underlying assets, issuer
section, geography and maturity profile. The Master Funds concentration of credit risk by industry for the CLO investments,
on a look-through basis, as at 31 December 2021 and 31 December 2020 are summarised in the table below. The Company’s
credit risk is monitored on a quarterly basis by the Board of Directors.
The Master Funds have diversified their exposure to industry sectors. The top 10 are as follows:
31 December 2021
Master Fund II
1
%
31 December 2020
Master Fund II
2
%
Industry
Healthcare & Pharmaceuticals 14.1 12.9
Services: Business 9.4 8.9
High Tech Industries 8.6 8.8
Bank, Finance, Insurance & Real Estate 6.9 6.7
Telecommunications 5.9 6.4
Beverage, Food & Tobacco 4.9 5.1
Services: Consumer 4.9 5.1
Construction & Building 4.9 3.9
Chemical, Plastics & Rubber 4.5 4.7
Capital Equipment 4.0 3.4
68.1 65.9
1
At 31 December 2021, shows the Master Fund II’s exposure in the underlying CLO investments via the Company’s Master Fund III share through the 2021 Shares and direct
share through the Realisation Shares. Source: CLO trustee reports. Based on the Master Funds’ exposure and weighted by CLO size and Master Funds’ ownership percentage.
2
At 31 December 2020, shows the Company’s proportionate direct share in the Master Fund II at 71.80%.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

58
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
5. FINANCIAL RISK MANAGEMENT (continued)
Credit and Counterparty Risk (continued)
The Master Funds’ exposure to credit risk relating to the underlying CLO investments based on the country of registration
(not necessarily asset class exposure) as at 31 December 2021 and 31 December 2020 is summarised below. Master Funds’
exposure to credit risk, also summarised below, relates to its directly held CLO investments and its investments into Wollemi
and Cycad based on the country of registration of the CLO investments and the Limited Partnerships (not necessarily asset
class exposure) as at 31 December 2021 and 31 December 2020.
31 December 2021
Master Fund III
1
US$
31 December 2021
Master Fund II
2
US$
31 December 2020
Master Fund II
4
US$
United States of America 165,616,113 25,530,599 155,963,615
Europe 27,112,311 4,179,506 136,128,705
Guernsey 64,845,378 9,996,257 6,148
Financial assets at fair value through
profit or loss (note 6)
257,573,802 39,706,362 292,098,468
The geographical breakdown of the underlying CLO investments is as follows:
31 December 2021
Master Fund II
3
%
31 December 2020
Master Fund II
4
%
United States of America 72.4 61.3
France 6.1 8.8
United Kingdom 5.5 6.9
Netherlands 3.6 4.9
Germany 3.0 6.0
Luxembourg 1.8 1.2
Spain 1.5 2.8
Canada 1.3 1.6
Switzerland 1.1 1.4
Italy 0.7 1.3
Other 3.0 3.8
Total 100.0 100.0
The table below summarises the Master Fund II’s underlying portfolio concentrations as of 31 December 2021 and 31
December 2020:
Maximum portfolio
holdings of a single
asset % of total
portfolio
Average portfolio
holdings % of
total portfolio
31 December 2021
Master Fund II 7.17% 2.13%
31 December 2020
Master Fund II 11.58% 1.92%
1
Shows the Company’s 2021 Shares proportionate share, via the Master Fund III, in the Master Fund II at 62.21%.
2
Shows the Company’s proportionate direct share in the Master Fund II at 9.59% through Realisation Shares investment only.
3
Shows the Master Fund II’s exposure in the underlying CLO investments via the Company’s Master Fund III share through the 2021 Shares and direct share through the Realisation Shares.
4
At 31 December 2020, shows the Company’s proportionate direct share in the Master Fund II at 71.80%.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
59
5. FINANCIAL RISK MANAGEMENT (continued)
Credit and Counterparty Risk (continued)
The tables below summarises the Master Fund II’s portfolio by asset class and portfolio ratings as at 31 December 2021 and
31 December 2020:
By asset class
31 December 2021
Master Fund III
1
US$
31 December 2021
Master Fund II
2
US$
31 December 2020
Master Fund II
4
US$
Equity Subordinated CLO notes 162,543,277 25,056,905 196,722,183
Mezzanine CLO notes 30,185,147 4,653,200 89,966,369
Limited Partnerships 64,845,378 9,996,257 5,409,916
Financial assets at fair value through
profit or loss (note 6)
257,573,802 39,706,362 292,098,468
The breakdown of the underlying CLO investments by rating is as follows:
31 December 2021 31 December 2020
Rating
Master Fund II
3
%
Master Fund II
4
%
B 30.7 33.7
B- 27.7 21.4
B+ 14.0 12.3
BB- 7.4 8.6
BB 4.3 4.1
CCC+ 3.1 3.7
BB+ 1.8 1.9
CCC 1.2 1.3
CCC- 0.3 0.3
BBB- 0.1 0.5
D 0.0 0.2
NA 9.4 12.0
Total 100.0 100.0
Activities undertaken by the Company, Master Fund III and Master Fund II may give rise to settlement risk. Settlement risk
is the risk of loss due to the failure of a counterparty to honour its obligations to deliver cash, securities or other assets as
contractually agreed.
For the majority of transactions, settlement risk is mitigated by conducting settlements through a broker to ensure that a trade
is settled only when both parties have fulfilled their contractual settlement obligations. Settlement limits form part of the credit
approval and limit monitoring processes.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset.
The Company’s policy and the Investment Adviser’s approach to managing liquidity is to ensure, as far as possible, that the
Company will always have sufficient liquidity to meet its liabilities when due, under both normal and stress conditions, including
estimated redemptions of shares, without incurring unacceptable losses or risking damage to the Company’s reputation.
1
Shows the Company’s 2021 Shares proportionate share, via the Master Fund III, in the Master Fund II at 62.21%.
2
Shows the Company’s proportionate direct share in the Master Fund II at 9.59% through Realisation Shares investment only.
3
Shows the Master Fund II’s exposure in the underlying CLO investments via the Company’s Master Fund III share through the 2021 Shares and direct share through the Realisation Shares.
4
At 31 December 2020, shows the Company’s proportionate direct share in the Master Fund II at 71.80%.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

60
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
5. FINANCIAL RISK MANAGEMENT (continued)
Liquidity Risk (continued)
The Company’s liquidity risk is managed on a daily basis by the Investment Adviser on a look-through basis to the underlying
loans in each CLO. The Investment Adviser monitors and considers the Company’s and the Master Funds cash balances,
projected expenses and projected income from investments when making any new investment recommendations.
Given the Company’s permanent capital structure as a closed-ended fund, it is not exposed to redemption risk. However,
the Company’s financial instruments include indirect investments in CLOs, and may include over-the-counter derivative
contracts, which are not traded in an organised public market and which may be illiquid.
The Company’s overall liquidity risk is monitored on a quarterly basis by the Board of Directors. Shareholders have no right of
redemption and must rely, in part, on the existence of a liquid market in order to realise their investment.
All liabilities of the Company are due within one financial year.
Operational Risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the processes,
technology and infrastructure supporting the Company’s activities relating to financial instruments, either internally or on the
part of service providers, and from external factors other than credit, market and liquidity risks such as those arising from legal
and regulatory requirements and generally accepted standards of investment management behaviour.
Operational risk is managed so as to balance the limiting of financial losses and damage to its reputation with achieving its
investment objective of generating returns to investors.
The primary responsibility for the development and implementation of controls over operational risk rests with the Board of
Directors. This responsibility is supported by the development of overall standards for the management of operational risk,
which encompasses the controls and processes at the service providers and the establishment of service levels with the
service providers.
The Board of Directors’ assessment of the adequacy of the controls and processes in place at the service providers with
respect to operational risk is carried out via regular discussions with the service providers and a review of the service
providers’ Service Organisation Controls (“SOC”) 1 reports on internal controls, if available.
Substantially all of the assets of the Company and Master Fund II are held by BNP Paribas Securities Services S.C.A.,
Guernsey Branch, in its capacity as the Custodian. Master Fund III assets are held in custody by U.S. Bank Global Corporate
Trust Services, UK Branch (together the “Custodians”). The bankruptcy or insolvency of the Custodians may cause the
Company’s rights with respect to the securities held by the Custodians to be limited. The Investment Adviser monitors the
credit ratings and capital adequacy of the Custodians on a quarterly basis, and reviews the findings documented in the SOC
1 report on the internal controls annually.
Capital Management
The Board of Director’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the Company. The Company’s capital is represented by the 2021 Shares and Realisation
Shares. In the prior year, the Company’s capital was represented by 2017 Shares, see note 10 for details of the share
issuance and re-designation that took place during the year. Capital is managed in accordance with the investment policy, in
pursuit of its investment objectives.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
61
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
1 January 2021 to 31 December 2021
2021 Shares
US$
Realisation
Shares
US$
Total Company
US$
Cost of financial assets at fair value through profit or loss
at the start of the period
– 429,025,529 429,025,529
Sale of investments in Master Fund II at cost during the year – (371,719,138) (371,719,138)
Purchase of investments in Master Fund III at cost during the year 371,719,138 – 371,719,138
Cost of financial assets at fair value through profit or loss
at the end of the year
371,719,138 57,306,391 429,025,529
Net unrealised losses on financial assets at the end of the year (101,834,804) (15,491,522) (117,326,326)
Financial assets at fair value through profit or loss
at the end of the year
269,884,334 41,814,869 311,699,203
Movement in net unrealised loss during the year 16,129,058 2,486,550 18,615,608
Income distributions declared from the Master Fund II
during the year
9,959,936 6,104,589 16,064,525
Income distributions declared from the Master Fund III
during the year
30,559,993 – 30,559,993
Net gains on financial assets at fair value
through profit or loss
56,648,987 8,591,139 65,240,126
The sale of Master Fund II and purchase of Master Fund III shown in the table above are non-cash transactions following the
re-designation of 2017 Shares to 2021 Shares and Realisation Shares on 22 April 2021. On this date, in accordance with
the Contribution Agreement dated 26 March 2021, the Company subscribed to a commitment amount equal to the 2021
Shares proportionate ownership of the Company into the Master Fund III. The Company made such an advance in kind, by
transferring in specie to the Master Fund III its proportionate share of the Master Fund II. Following this transaction, and at
31 December 2021, the Company had a 100% holding of the limited partnership interests in the Master Fund III on behalf of
the 2021 Shares, which in turn had a holding of 62.21% in the Master Fund II. The Company also retained a direct holding of
9.59% (31 December 2020: 71.80%) in the Master Fund II on behalf of the Realisation Shares.
31 December 2020
2017 Shares
US$
Cost of financial assets at fair value through profit or loss at the start of the year 426,885,179
Purchase of investments in Master Fund II at cost during the year 40,204,500
Sale of UCITS investment during the year (34,999,873)
Realised loss on sale of UCITS investments during the year (3,064,277)
Cost of financial assets at fair value through profit or loss at the end of the year
429,025,529
Net unrealised losses on financial assets at the end of the year
(135,941,934)
Financial assets at fair value through profit or loss at the end of the year 293,083,595
Realised loss on sale of UCITS investments during the year (3,064,277)
Movement in net unrealised loss during the year (45,778,713)
Income distributions declared from Master Fund II during the year 22,756,626
Net losses on financial assets at fair value through profit or loss (26,086,364)
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

62
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Look-through financial information: Master Funds’ profit or loss movements
The following tables reconcile the Company’s proportionate share of the Master Funds’ financial assets at fair value through
profit or loss to the Company’s financial assets at fair value through profit or loss:
31 December 2021
Master Fund III
1
US$
Master Fund II
2
US$
Total Company
US$
Financial assets at fair value through profit or loss 271,170,675 39,706,362 310,877,037
Add: Other net current (liabilities)/assets (1,286,341) 2,108,507 822,166
Total financial assets at fair value through
profit or loss
269,884,334 41,814,869 311,699,203
31 December 2020
Master Fund II
3
US$
Financial assets at fair value through profit or loss 292,098,468
Less: Net current assets 985,127
Total financial assets at fair value through profit or loss
293,083,595
The Company’s proportionate share of the unrealised gains/(losses) on investments in the year comprises the following
movements within the underlying investments:
1 January 2021 to 31 December 2021
Master Fund III
1
US$
Master Fund II
2
US$
Total Company
US$
Net unrealised losses on investments at the
beginning of the year
– (135,941,934) (135,941,934)
Unrealised losses attributable to 2021 Shares (107,852,694) 107,852,694 –
Investment income – 17,044,052 17,044,052
Income distributions received from Master Fund II 29,465,544
–
29,465,544
Unrealised gains on financial assets at fair value
through profit or loss
7,295,057 4,648,628 11,943,685
Realised gains on financial assets at fair value
through profit or loss
– 2,128,755 2,128,755
Net gains on derivative financial instruments and
foreign exchange
– 5,748,418 5,748,418
Other income – 3,286 3,286
Expenses (182,718) (910,897) (1,093,615)
Income distributions declared during the year (30,559,993) (16,064,525) (46,624,515)
Net unrealised losses on investments at the end
of the year
(101,834,804) (15,491,522) (117,326,326)
1
Shows the Company’s proportionate direct share in the Master Fund III at 100.00% through 2021 Shares investment only.
2
Shows the Company’s proportionate direct share in the Master Fund II at 9.59% through Realisation Shares investment only.
3
Shows the Company’s proportionate direct share in the Master Fund II at 71.80% through 2017 Shares.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
63
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (continued)
Look-through financial information: Master Funds’ profit or loss movements (continued)
31 December 2020
Master Fund II
US$
Net unrealised losses on investments at the beginning of the year (90,222,573)
Investment income 41,425,839
Income distributions received from Master Fund 1,195,154
Income distributions received from Cycad 302,367
Unrealised losses on financial assets at fair value through profit or loss (51,289,064)
Realised losses on financial assets at fair value through profit or loss (1,274,359)
Net losses on derivative financial instruments and foreign exchange (11,024,561)
Other income 223,135
Expenses (2,521,247)
Income distributions declared during the year (22,756,625)
Net unrealised losses on investments at the end of the year (135,941,934)
IFRS 13 requires that a fair value hierarchy be established that prioritises the inputs to valuation techniques used to measure
fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair
value hierarchy under IFRS 13 are set as follows:
– Level 1: inputs that are quoted market prices (unadjusted) in active markets for identical instruments;
– Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices). This category includes instruments valued using: quoted market prices in active
markets for similar instruments; quoted for identical or similar instruments in markets that are considered less than active;
or other valuation techniques in which all significant inputs are directly or indirectly observable from market data.
– Level 3: Inputs that are unobservable. This category includes all instruments for which the valuation technique includes
inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation.
This category includes instruments that are valued based on quoted prices for similar instruments but for which significant
unobservable adjustments or assumptions are required to reflect differences between the instruments.
The level in the fair value hierarchy within which the fair value measurement is categorised is determined on the basis of the
lowest level input that is significant to the fair value measurement. For this purpose, the significance of an input is assessed
against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant
adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a
particular input to the fair value measurement requires judgement, considering factors specific to the asset or liability.
The determination of what constitutes ‘observable’ requires significant judgement. Observable data is considered to be that
market data that is readily available, regularly distributed or updated, reliable, not proprietary, and provided by independent
sources that are actively involved in the relevant market.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

64
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (continued)
The following table analyses within the fair value hierarchy the Company’s financial assets (by class, excluding cash and cash
equivalents, prepayments, distribution receivable, dividends payable and other payables) measured at fair value:
31 December 2021
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Assets:
Financial assets at fair value through profit or loss – – 311,699,203 311,699,203
Total – – 311,699,203 311,699,203
31 December 2020
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Assets:
Financial assets at fair value through profit or loss – – 293,083,595 293,083,595
Total – – 293,083,595 293,083,595
The investment in the Master Fund III and Master Fund II (31 December 2020: Master Fund II only), which are fair valued at
each reporting date, have been classified within Level 3 as they are not traded and contains unobservable inputs.
The following table presents the movement in Level 3 instruments:
31 December 2021
US$
31 December 2020
US$
Opening Balance 293,083,595 298,598,457
Purchase of investments in Master Fund II – 40,204,500
Sale of investments in Master Fund II (371,719,138) –
Purchase of investments in Master Fund III 371,719,138 –
Movement in net unrealised gain/(loss) during the year 18,615,608 (45,719,362)
Closing Balance
311,699,203 293,083,595
Transfers between Level 1, 2 and 3
There have been no transfers between levels during the year ended 31 December 2021 or 31 December 2020. Transfers
between levels of the fair value hierarchy are recognised as at the end of the reporting period during which the change has
occurred.
Look-through financial information: Master Funds’ fair value hierarchy information
On a look-through basis, the following table analyses within the fair value hierarchy the Company’s proportionate share of
the Master Funds’ financial assets and derivatives (by class, excluding cash and cash equivalents, other receivables and
prepayments, distribution payable, carried interest payable and trade and other payables) measured at fair value:
31 December 2021
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Master Fund III
1
Financial assets at fair value through profit or loss – – 271,170,675 271,170,675
Total – – 271,170,675 271,170,675
1
Shows the Company’s proportionate direct share in the Master Fund III at 100.00% through 2021 Shares investment only.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
65
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (continued)
Look-through financial information: Master Funds’ fair value hierarchy information (continued)
31 December 2021
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Master Fund II
1
Financial assets at fair value through profit or loss – 4,179,506 35,526,856 39,706,362
Derivatives at fair value through profit or loss – 84,802 – 84,802
Total – 4,264,308 35,526,856 39,791,164
31 December 2020
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
Master Fund II
2
Financial assets at fair value through profit or loss – 54,562,173 237,536,295 292,098,468
Derivatives at fair value through profit or loss – (3,093,679) – (3,093,679)
Total – 51,468,494 237,536,295 289,004,789
The following table summarises the valuation methodologies used for the Company’s investments categorised in Level 3 as
at 31 December 2021:
Valuation Unobservable
Fair Value methodology inputs Ranges
Security US$
Master Fund III
3
269,884,334 NAV Zero % discount N/A
Master Fund II
1
41,814,869 NAV Zero % discount N/A
311,699,203
The following table summarises the valuation methodologies used for the Company’s investments categorised in Level 3 as
at 31 December 2020:
Valuation Unobservable
Fair Value methodology inputs Ranges
Security US$
Master Fund II
2
293,083,595 NAV Zero % discount N/A
293,083,595
1
Shows the Company’s proportionate direct share in the Master Fund II at 9.59% through Realisation Shares investment only.
2
Shows the Company’s proportionate share in the Master Fund II at 71.80% at 31 December 2020.
3
Shows the Company’s proportionate direct share in the Master Fund III at 100.00% through 2021 Shares investment only.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

66
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (continued)
The Master Funds have engaged an independent third party to provide valuations for its CLO investments. The following table
summarises, in the Company’s opinion, the valuation methodologies used by the independent third party to value the Master
Fund II’s investments categorised in Level 3 as at 31 December 2021:
Sensitivity to changes
Unobservable in significant
Fair Value inputs Ranges Average unobservable inputs
Asset Class US$
Master Fund III
1
Limited Partnerships 10% increase/decrease
will have a fair value
N/A N/A impact of
Master Fund II 271,170,675 Zero % discount +/- US$27,117,068
271,170,675
The Master Funds have engaged an independent third party to provide valuations for its CLO investments. The following table
summarises, in the Company’s opinion, the valuation methodologies used by the independent third party to value the Master
Fund II’s investments categorised in Level 3 as at 31 December 2021:
Sensitivity to changes
Unobservable in significant
Fair Value inputs Ranges Average unobservable inputs
Asset Class US$
Master Fund II
2
Income Notes CLOs 10% increase/decrease
Prices provided US$0.0001 - will have a fair value
United States by a third party US$0.9866 US$0.6437 impact of
of America 25,530,599 agent +/- US$2,553,060
Limited Partnerships 10% increase/decrease
will have a fair value
impact of
Wollemi 9,996,257 Zero % discount N/A N/A +/- US$999,626
35,526,856
1
Shows the Company’s proportionate direct share in the Master Fund III at 100.00% through 2021 Shares investment only.
2
Shows the Company’s proportionate direct share in the Master Fund II at 9.59% through Realisation Shares investment only.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
67
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (continued)
The following table summarises, in the Company’s opinion, the valuation methodologies used by the independent third party
to value the Master Fund II’s investments categorised in Level 3 as at 31 December 2020:
Sensitivity to changes
Unobservable in significant
Fair Value inputs Ranges Average unobservable inputs
Asset Class US$
Master Fund II
1
CLO Income Notes 50% increase/decrease
Prices provided US$0.3900 - will have a fair value
United States by a third party US$0.9958 US$0.6638 impact of
of America 150,559,848 agent +/- US$75,279,924
50% increase/decrease
Prices provided will have a fair value
by a third party £0.6300 - impact of
Europe 78,783,736 agent £0.9600 £0.8162 +/- US$39,391,861
CLO Sub Fee Notes 50% increase/decrease
Prices provided will have a fair value
by a third party £1.2500 - impact of
Europe 2,782,795 agent £2.7700 £1.6114 +/- US$1,391,398
Limited Partnerships 50% increase/decrease
will have a fair value
N/A N/A impact of
Master Fund 6,148 Zero % discount +/- US$3,074
50% increase/decrease
will have a fair value
impact of
Cycad 5,403,768 Zero % discount N/A N/A +/- US$2,701,884
237,536,295
1
Shows the Company’s proportionate direct share in the Master Fund II at 71.80%.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

68
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
7. INTEREST INCOME
For the year ended
31 December 2021
US$
For the year ended
31 December 2020
US$
Interest income on financial assets carried at amortised cost:
Cash and cash equivalents
– 3,215
– 3,215
8. RELATED PARTIES AND OTHER KEY CONTACTS
Transactions with Investment Adviser and Investment Portfolio Investor
Investment Adviser
Fair Oaks Capital Limited (the “Investment Adviser”) is entitled to receive an investment advisory fee from the Company of
1% per annum of the NAV of the Company, in accordance with the Amended and Restated Investment Advisory Agreement
dated 9 March 2017 (the “Investment Advisory Agreement”). The investment advisory fee is calculated and payable on the
last business day of each month or on the date of termination of the Investment Advisory agreement. The base investment
advisory fee will be reduced to take into account any fees received by the Investment Adviser incurred by the Company in
respect of its investments in the Master Fund III and Master Fund II (31 December 2020: Master Fund II and indirectly the
Master Fund), (taking into account any rebates of such management fees to the Company) in respect of the same relevant
period.
The net investment advisory fee during the year is as follows:
For the year ended
31 December 2021
US$
For the year ended
31 December 2020
US$
Company investment advisory fee 2,317,886 2,117,962
Less: Master fund II rebate (2,310,494) (1,967,530)
Less: Master fund III rebate (3,572) –
Less: Master fund rebate – (43,664)
Net Company investment advisory fee 3,820 106,768
In circumstances where, as at the date the Net Asset Value per share of the 2021 Shares with respect to the last calendar
month of a calendar quarter (the “Quarter End 2021 NAV”) is published, the price of the 2021 Shares, adjusted for any
dividends declared if required, traded at close in the secondary market below their then-prevailing Quarter End 2021 NAV,
the Investment Adviser agrees to reinvest and/or procure the reinvestment by an Associate of it of (a) 25 per cent. of the
fees which it shall receive with respect to that quarter from the Company pursuant to the agreement which is attributable to
the Net Asset Value of the 2021 Shares and (b) 25 per cent. of the management fee which the General Partner shall receive
with respect to that quarter from Master Fund II and Master Fund III which is attributable to the Net Asset Value of the 2021
Shares by, in each case, using its best endeavours to purchase or procure the purchase of 2021 Shares in the Company
in the secondary market. The obligation to purchase or procure the purchase of such 2021 Shares shall be fulfilled by the
Investment Adviser by no later than one month after the end of such calendar quarter. The Investment Adviser will have no
obligation to reinvest and/or procure the reinvestment of fees it receives with respect to a calendar quarter in circumstances
where: (i) the 2021 Shares did not trade at close in the secondary market at a discount to their then-prevailing Quarter End
2021 NAV; or (ii) where the 2021 Shares did trade at close in the secondary market at a discount to their then-prevailing
Quarter End 2021 NAV and it is unable to purchase or procure the purchase of 2021 Shares in the secondary market at a
discount to their then-prevailing Quarter End 2021 NAV despite having used its best endeavours to do so; or (iii) the Master
Fund III Commitment Period has already expired, and, in each case, the Investment Adviser shall retain all fees it receives for
such quarter.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
69
8. RELATED PARTIES AND OTHER KEY CONTACTS (continued)
Transactions with Investment Adviser and Investment Portfolio Investor (continued)
Investment Adviser (continued)
In circumstances where, as at the date of the Net Asset Value per share of the Realisation Shares with respect to the last
calendar month of a calendar quarter (the “Quarter End Realisation NAV”) is published, the price of the Realisation Shares,
adjusted for any dividends declared if required, traded at close in the secondary market below their then-prevailing Quarter
End Realisation NAV, the Investment Adviser agrees to reinvest and/or procure the reinvestment by an Associate of it of
(a) 25 per cent. of the fees which is received with respect to that quarter from the Company pursuant to the agreement which
is attributable to the Net Asset Value of the Realisation Shares and (b) 25 per cent. of the Master Fund II Management Fee
which the General Partner shall receive in respect to that quarter from Master Fund II which is attributable to the Net Asset
Value of the Realisation Shares by, in each case, using its best endeavours to purchase or procure the purchase of Realisation
Shares in the secondary market. The obligation to purchase or procure the purchase of Realisation Shares shall be fulfilled by
the Investment Adviser by no later than one month after the end of such calendar quarter.
The Investment Adviser will have no obligation to reinvest and/or procure the reinvestment of fees it receives with respect to
a calendar quarter in circumstances where either: (i) the Realisation Shares did not trade at close in the secondary market at
a discount to their then-prevailing Quarter End Realisation NAV; or (ii) where the Realisation Shares did trade at close in the
secondary market at a discount to their then-prevailing Quarter End Realisation NAV and it is unable to purchase or procure
the purchase of Realisation Shares in the secondary market at a discount to their then-prevailing Quarter End Realisation NAV
despite having used its best endeavours to do so and, in either case, the Investment Adviser shall retain all fees it receives
for such quarter.
On 21 April 2021, 2 August 2021 and 22 October 2021, the General Partner purchased 231,061, 186,133 and 194,000
2021 Shares respectively in the secondary market by way of reinvesting 25% of the quarter’s investment advisory fees.
On 22 January 2020 and 23 October 2020, the General Partner purchased 271,851 and 266,842 2017 Shares respectively
in the secondary market by way of reinvesting 25% of the quarter’s investment advisory fees.
The Investment Advisory Agreement can be terminated by either party giving not less than 6 months written notice.
Fair Oaks CLOs
During the year ended 31 December 2021, the Master Fund II transferred its investments in the Fair Oaks CLOs to Wollemi
in exchange for limited partnership interests in Wollemi. In addition, the Master Fund II transferred its risk retention holder
requirements for the Fair Oaks CLOs to Wollemi during the year. As risk retention holder, Wollemi is required to retain, on an
ongoing basis, a material net economic interest in the Fair Oaks CLOs of not less than 5%.
At 31 December 2021, Wollemi had investments in FOAKS 1X CLO, FOAKS 2X CLO, FOAKS 3X CLO and FOAKS 4X CLO
Limited valued at €22,630,204, €27,537,544, €26,682,043 and €32,947,186 respectively. The Investment Adviser to the
Company also acts as collateral manager to the Fair Oaks CLOs. At 31 December 2020, the Master Fund II had investments
in FOAKS 1X CLO, FOAKS 2X CLO and FOAKS 1X valued at €22,417,985, €48,412,123 and €42,772,670 respectively.
The Investment Adviser to the Company also acts as collateral manager to the Fair Oaks CLOs.
Founder Partners
The Master Fund II and Master Fund III also pay the Founder Partner II and Founder Partner VI a carried interest equal to 15
per cent of cash available to be distributed (after payment of expenses and management fees) after limited partners have
received a Preferred Return. The threshold calculation of the Preferred Return will be based solely on distributions and not on
NAV calculations so the Master Fund II and Master Fund III will not pay any carried interest until their investors have realised
the amounts drawn down for investments and met their Preferred Returns. At 31 December 2021, no carried interest was
accrued at the Master Fund III level. At 31 December 2021, US$nil (31 December 2020: US$nil) carried interest was accrued
at Master Fund II level in respect of the Company’s limited partnership interest.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

70
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
8. RELATED PARTIES AND OTHER KEY CONTACTS (continued)
Other Material Contracts
Administrator
Sanne Fund Services (Guernsey) Limited (formerly Praxis Fund Services Limited) (the “Administrator”) is entitled to receive a
time-based fee quarterly in arrears for all Company Secretarial services. The Administrator is also entitled to an annual fee
of US$32,320 (31 December 2020: US$32,320), payable quarterly in arrears for Administration and Accounting services.
The Administrator is also entitled to an annual fee of £500 in relation to FATCA reporting acting as responsible officer.
Effective 3 December 2021, the fund services division of PraxisIFM Group was acquired by Sanne Group and effective
6 December 2021, Praxis Fund Services Limited changed its name to Sanne Fund Services (Guernsey) Limited.
Custodian
BNP Paribas Securities Services S.C.A., Guernsey Branch (the “Custodian”) waived all fees on the basis that all assets are
invested into the Master Fund II.
Directors’ Fees
The Company’s Board of Directors are entitled to a fee in remuneration for their services as Directors at a rate payable
of £43,000 each per annum (31 December 2020: £43,000). In addition, as detailed in the Prospectus announced by the
Company on 28 March 2021, a one-off payment of £5,000 (“one-off payment”) is payable to the Directors relating to work
performed in connection with the publication of Prospectus, such fee increasing by an additional £2,500 (i.e. bringing this
one-off payment to £7,500) if the total gross amounts raised under the Placing Programme exceeded US$100 million.
The overall charge for the above-mentioned fees for the Company and the amounts due are as follows:
For the year ended
31 December 2021
US$
For the year ended
31 December 2020
US$
CHARGE FOR THE YEAR
Investment adviser fee 3,820 106,768
Administration fee 116,934 144,580
Directors’ fees and expenses 199,437 166,652
OUTSTANDING FEES
Investment adviser fee – 1,563
Administration fee 34,375 2,806
Shares held by related parties
The shareholdings of the Directors’ in the Company were as follows:
31 December 2021 31 December 2020
Name No. of 2021
Shares Percentage
No. of 2017
Shares Percentage
Professor Claudio Albanese (Chairman) 9,697 0.00% 9,697 0.00%
Jon Bridel
1
40,000 0.01% 40,000 0.00%
Nigel Ward 60,000 0.01% 60,000 0.01%
On 9 September 2020, a person closely associated with Jon Bridel, purchased 30,303 2017 Shares in the Company on
the SFS of the London Stock Exchange. During January 2021, Jon Bridel transferred all shares registered in his name to his
spouse.
As at 31 December 2021, the Investment Adviser, the General Partner and principals of the Investment Adviser and General
Partner held an aggregate of 3,703,825 2021 Shares (31 December 2020: 3,092,631 2017 Shares), which is 0.91%
(31 December 2020: 0.66%) of the issued 2021 share capital.
1
Jon Bridel’s spouse, as a person closely associated with Jon Bridel, is the registered holder of these shares.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
71
9. TAX STATUS
The Company is exempt from Guernsey income tax and is charged an annual exemption fee of £1,200 (31 December 2020:
£1,200) under The Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989.
10. SHARE CAPITAL
The Company’s 2021 Shares and Realisation Shares (31 December 2020: 2017 Shares) are classified as equity. Incremental
costs directly attributable to the issue of shares are recognised as a deduction in equity and are charged to the share capital
account, including the initial set up costs.
During April 2020, the Company announced an issue to satisfy market demand of 15,029,623 new 2017 Shares at an issue
price of US$0.372 per new 2017 Share.
During April 2021, of the 468,378,360 original 2017 Shares in issue, 62,562,883 2017 Shares were re-designated as
Realisation Shares and 405,815,477 2017 Shares (including 650,000 shares held in Treasury) were re-designated as 2021
Shares.
On 22 April 2021, 405,815,477 2021 Shares and 62,562,883 Realisation Shares were admitted to trading on the Specialist
Fund Segment of the Main Market of the London Stock Exchange.
The authorised share capital of the Company is represented by an unlimited number of ordinary shares of nil par value and
have the following rights:
(a) Dividends: Shareholders of a particular class or tranche are entitled to receive, and participate in, any dividends or other
distributions relating to the assets attributable to the relevant class or tranche which are resolved to be distributed in
respect of any accounting period or other period, provided that no calls or other sums due by them to the Company are
outstanding.
(b) Winding Up: On a winding up, the shareholders of a particular class or tranche shall be entitled to the surplus assets
attributable to that class or tranche remaining after payment of all the creditors of the Company.
(c) Voting: Subject to any rights or restrictions attached to any class or tranche of shares, at a general meeting of the
Company, on a show of hands, every holder of voting shares present in person or by proxy and entitled to vote shall have
one vote, and on a poll every holder of voting shares present in person or by proxy shall have one vote for each share held
by him, but this entitlement shall be subject to the conditions with respect to any special voting powers or restrictions
for the time being attached to any class or tranche of shares which may be subject to special conditions. Refer to the
Memorandum and Articles of Incorporation for further details.
(d) Buyback: The Company may acquire its own shares (including any redeemable shares). Any shares so acquired by the
Company may be cancelled or held as treasury shares provided that the number of shares of any class held as treasury
shares must not at any time exceed ten per cent. (or such other percentage as may be prescribed from time to time
by the States of Guernsey Committee for Economic Development) of the total number of issued shares of that class.
Any shares acquired in excess of this limit shall be treated as cancelled.
Issued Share Capital
2021 Shares
31 December 2021 31 December 2020
Shares US$ Shares US$
Share capital at the beginning of the year – – – –
Re-designation from 2017 Shares into 2021
Shares during the year
405,165,477 385,492,327 – –
Share capital conversion costs – (1,152,757) – –
Share capital at the end of the year
405,165,477 384,339,570 – –
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

72
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
10. SHARE CAPITAL (continued)
Issued Share Capital (continued)
Realisation Shares
31 December 2021 31 December 2020
Shares US$ Shares US$
Share capital at the beginning of the year 467,728,360 444,922,074 452,698,737 439,400,944
Re-designation into 2021 Shares during the year (405,165,477) (385,492,327) – –
Share capital issued during the year – – 15,029,623 5,591,020
Share capital conversion/issued costs – (178,050) – (69,890)
Share capital at the end of the year
62,562,883 59,251,697 467,728,360 444,922,074
The total number of 2021 Shares in issue, as at 31 December 2021 was 405,815,477, of which 650,000 2021 Shares were
held in treasury, and the total number of 2021 shares in issue excluding treasury shares were 405,165,477.
The total number of Realisation Shares in issue, as at 31 December 2021 was 62,562,883, of which no shares were held in
treasury.
At 31 December 2021, the Company has 467,728,360 total voting rights.
The total number of 2017 Shares in issue, as at 31 December 2020 was 468,378,360, of which 650,000 shares were held
in treasury, and the total number of shares in issue excluding treasury shares were 467,728,360. At 31 December 2020, the
Company had 467,728,360 total voting rights.
11. EARNINGS PER SHARE
For the year ended
31 December 2021
For the year ended
31 December 2020
2021 Shares Realisation
Shares
2017 Shares
Weighted average number of shares 405,165,477 62,562,883 462,946,236
Profit/(loss) for the financial year US$55,802,240 US$8,665,218 US$(26,988,615)
Basic and diluted earnings/(losses) per share US$0.1377 US$0.1385 US$(0.0583)
For the year ended 31 December 2021, profits for the year have been allocated as follows:
• Expenses are apportioned 86.6% to 2021 Shares and 13.4% to Realisation Shares;
• Income for the period from 1 January 2021 to 22 April 2021, has been apportioned 86.6% to 2021 Shares and 13.4%
to Realisation Shares;
• Income for the period from 23 April 2021 to 31 December 2021, is based on the share classes’ respective ownership of,
and distributions received from, the Master Fund II and Master Fund III.
The weighted average number of shares as at 31 December 2021 is based on the number of 2021 Shares and Realisation
Shares in issue during the period under review, as detailed in Note 10. The weighted average number of 2021 Shares and
Realisation Shares for the period from 1 January 2021 to 22 April 2021, have been apportioned 86.6% to 2021 Shares and
13.4% to Realisation Shares.
The weighted average number of shares as at 31 December 2020 is based on the number of 2017 Shares in issue during
the year under review, as detailed in Note 10.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
73
12. TRADE AND OTHER PAYABLES
31 December 2021
US$
31 December 2020
US$
Investment advisory fees payable (note 8) – 1,563
Audit fees payable 29,476 51,946
Administration fees payable (note 8) 34,375 2,806
Sundry expenses payable 46,495 28,045
110,346 84,360
13. CONTINGENT LIABILITIES AND COMMITMENTS
The Company entered into a Subscription Agreement with Master Fund III and agreed to become a Limited Partner and made
a commitment to Master Fund III of US$264,000,000 of which US$ US$263,875,619 had been called.
The Company entered into a Subscription Agreement with Master Fund II and agreed to become a Limited Partner and made
a commitment to Master Fund II of US$452,346,532 (31 December 2020: US$452,346,532) of which US$432,982,362
(31 December 2020: US$432,982,362) had been called. With effect from 22 April 2021, the Company’s 2021 Shares
commitment to Master Fund II is on an indirect basis through the Master Fund III. The Master Fund II commitment period
ended on 12 June 2021.
At 31 December 2021 and 31 December 2020, the Company had no other outstanding commitments.
14. SUBSEQUENT EVENTS
On 31 January 2022, the Company announced that following the announcement of the NAV as at 31 December 2021, Fair
Oaks Income Fund (GP) had purchased 200,885 2021 Shares in the secondary market. The Company’s 2021 Prospectus
states that in the event that the 2021 Shares trade at a discount to any quarter end NAV, calculated on the date the NAV is
published, 25% of that quarter’s investment management fees (in respect of the 2021 Shares) will be reinvested to purchase
2021 Shares in the secondary market.
On 7 February 2022, the Company declared an interim dividend of 2.50 cents per 2021 Share and 2.50 cents per Realisation
Share in respect of the quarter ended 31 December 2021. The ex-dividend date was 17 February 2022 and the dividend was
paid on 18 March 2022.
In February 2022, Russia launched an invasion of Ukraine. In addition to the humanitarian and geopolitical consequences,
the invasion has caused volatility in global financial markets and increased expectations of supply chain disruption and cost
inflation for oil, gas, metals, grains, vegetable oils and other raw materials. The CLOs in which the Master Funds invest do
not hold any loans of Russian, Ukrainian or Belarusian borrowers. The borrowers to which the CLOs are exposed have low
direct exposure to Russia, Ukraine or Belarus but the profitability of some of them may be impacted by increased input
cost inflation. Manufacturers have already been experiencing high input cost inflation during 2021 and have been largely
successful in passing cost increases through to their customers but this may become more difficult in an environment of
extreme cost inflation and weaker consumer confidence.
There were no other significant events since the year end which would require revision of the figures or disclosures in the
Financial Statements.
FINANCIAL REPORT
Notes to the Financial Statements (continued)
For the year ended 31 December 2021

74
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Portfolio Statement (unaudited)
As at 31 December 2021
CLO Equity
Security Instrument Par Value Valuation
Master Fund II
1
AIMCO 2017-A SUB Subordinated Notes US$19,443,440 77.00%
ALLEG 2017-2X SUB Subordinated Notes US$28,630,250 58.00%
ALLEG 2021-1X SUB Subordinated Notes US$19,525,292 78.00%
ARES 2015-35R Subordinated Notes US$18,668,000 65.00%
AWPT 2017-6X SUB Subordinated Notes US$21,575,900 36.00%
SIGNAL PEAK CLO 1 Subordinated Notes US$4,540,807 52.00%
FAIR OAKS IV FUNDING Subordinated Notes €20,104,000 100.00%
FOAKS 1X M Subordinated Fee Notes €718,000 0.01%
FOAKS 1X SUB Subordinated Notes €20,104,000 74.45%
FOAKS 1X Z Subordinated Fee Notes €0 4,162,070%
FOAKS 2X M Subordinated Fee Notes €718,000 0.01%
FOAKS 2X SUB Subordinated Notes €33,746,000 54.66%
FOAKS 2X Z Subordinated Fee Notes €211,609 627.00%
FOAKS 3X M Subordinated Fee Notes €718,000 0.01%
FOAKS 3X SUB Subordinated Notes €25,130,000 70.62%
FOAKS 3X Z Subordinated Fee Notes €235,026 600.00%
HLM 13X-2018 SUB Subordinated Notes US$18,632,100 43.00%
SIGNAL PEAK CLO 2 Subordinated Notes US$4,693,868 42.00%
SIGNAL PEAK CLO 3 Subordinated Notes US$4,428,562 59.00%
MARNR 2017-4 SUB Subordinated Notes US$26,243,063 52.00%
POST 2018-1X SUB Subordinated Notes US$28,204,835 73.00%
ROCKT 2021-2X SUB Subordinated Notes US$17,591,000 84.00%
SHACK 2018-12 SUB Subordinated Notes US$21,540,000 62.00%
WELF 2018-1X SUB Subordinated Notes US$20,732,250 62.00%
WELF 2021-2X SUB Subordinated Notes US$20,822,000 71.00%
CLO Mezzanine
Security Instrument Par Value Valuation
Master Fund II
1
APID 2018-18A F Class F Notes US$2,872,000 88.78%
DRSLF 2017-49A F Class F Notes US$3,302,800 91.73%
DRSLF 2017-53A F Class F Notes US$3,590,000 91.78%
EGLXY 2018-6X F Class F Notes €3,051,500 93.88%
HARVT 11X FR Class F Notes €1,795,000 92.11%
HARVT 7X FR Class F Notes €1,256,500 94.60%
HLM 13X-2018 F Class F Notes US$4,119,525 87.25%
JPARK 2016-1A ER Class E Notes US$1,436,000 97.11%
MDPK 2016-20A FR Class F Notes US$2,872,000 95.53%
OCT39 2018-3A F Class F Notes US$6,462,000 91.90%
OHECP 2015-4X FR Class F Notes €1,823,002 89.33%
SYMP 2018-19A F Class F Notes US$3,949,000 86.67%
1
Shows the Company’s 2021 Shares proportionate share, via the Master Fund III, in the Master Fund II at 62.21% and the Company’s direct holding in the Master Fund II at 9.59%.
2021 Shares and Realisation Shares proportionate share together at 71.20%. Also includes Master Fund II’s 100% share in Wollemi and its 14.96% interest in Cycad.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
75
Registered Office and Business Address
Sarnia House
Le Truchot
St Peter Port
Guernsey GY1 1GR
Investment Adviser
Fair Oaks Capital Limited
1 Albemarle Street
London W1S 4HA
Legal Advisers in Guernsey
Carey Olsen (Guernsey) LLP
Carey House
Les Banques
St Peter Port
Guernsey GY1 4BZ
Custodian and Principal Bankers
BNP Paribas Securities Services S.C.A.
BNP Paribas House
St Julian’s Avenue
St Peter Port
Guernsey GY1 1WA
Joint Bookrunners, Joint Brokers
and Joint Financial Advisers
Numis Securities Limited
10 Paternoster Square
London EC4M 7LT
Liberum Capital Limited
Ropemaker Place, Level 12
Ropemaker Street
London EC2Y 9LY
Administrator and Secretary
Sanne Fund Services (Guernsey) Limited
(formerly Praxis Fund Services Limited)
Sarnia House
Le Truchot
St Peter Port
Guernsey GY1 1GR
Registrar
Link Market Services (Guernsey) Limited
Mont Crevelt House
Bulwer Avenue
St Sampson
Guernsey GY2 4LH
Legal Advisers in United Kingdom
Stephenson Harwood LLP
1 Finsbury Circus
London EC2M 7SH
Independent Auditor
KPMG Channel Islands Limited
Glategny Court
Glategny Esplanade
St Peter Port
Guernsey GY1 1WR
ADDITIONAL INFORMATION
Management and Administration
Directors
Professor Claudio Albanese (Independent non-executive Chairman)
Jon Bridel (Independent non-executive Director)
Nigel Ward (Independent non-executive Director)

76
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Appendix
Alternative Performance Measures used in the Financial Statements
• Total NAV return
Total NAV return is a calculation showing how the NAV per 2021 Share and Realisation Share has performed over a period
of time, taking into account dividends paid to shareholders. It is calculated on the assumption that dividends are reinvested,
on an accumulative basis from inception of the Company, at the prevailing NAV on the last day of the month that the shares
first trade ex-dividend. The performance is evaluated on a original shareholding of 1000 shares on inception of the Company
(12 June 2014). This provides a useful measure to allow shareholders to compare performances between investment funds
where the dividend paid may differ.
2021 Shares For the year ended
31 December 2021
For the year ended
31 December 2020
Opening NAV per 2021 Share US$0.6306 US$0.7580
Opening accumulated number of 2021 Shares* (a) 2,110.9 shares 1,915.3 shares
Opening NAV valuation of shares (b)
US$1,331.1 US$1,451.8
Dividends paid during the year US$0.0975 US$0.0580
Dividends converted to shares** (c) 333.5 shares 195.6 shares
Closing NAV per 2021 share US$0.6682 US$0.6306
Closing accumulated number of 2021 Shares* (d = a + c) (d) 2,444.4 shares 2,110.9 shares
Closing NAV valuation of shares (e)
US$1,633.4 US$1,331.1
NAV valuation of shares return (f = e – b) (f) US$302.2 (US$120.7)
Total NAV return (g = (f / b) x 100)
(g)
22.7% (8.3%)
*with dividends reinvested since inception (12 June 2014)
**converted to 2021 Shares at the prevailing month end NAV ex-dividend for all dividends paid during the year.
Realisation Shares For the year ended
31 December 2021
For the year ended
31 December 2020
Opening NAV per Realisation Share US$0.6306 US$0.7580
Opening accumulated number of Realisation Shares* (a) 2,110.9 shares 1,915.3 shares
Opening NAV valuation of shares (b)
US$1,331.1 US$1,451.8
Dividends paid during the year US$0.0975 US$0.0580
Dividends converted to shares** (c) 333.8 shares 195.6 shares
Closing NAV per Realisation share US$0.6679 US$0.6306
Closing accumulated number of Realisation Shares* (d = a + c) (d) 2,444.7 shares 2,110.9 shares
Closing NAV valuation of shares (e)
US$1,632.8 US$1,331.1
NAV valuation of shares return (f = e – b) (f) US$301.7 (US$120.7)
Total NAV return (g = (f / b) x 100)
(g)
22.7% (8.3%)
*with dividends reinvested since inception (12 June 2014)
**converted to Realisation Shares at the prevailing month end NAV ex-dividend for all dividends paid during the year.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
77
ADDITIONAL INFORMATION
Appendix (continued)
Alternative Performance Measures used in the Financial Statements (continued)
• Total share price return
Total share price return is a calculation showing how the share price per 2021 Share and Realisation Share has performed
over a period of time, taking into account dividends paid to shareholders. It is calculated on the assumption that dividends
are reinvested, on an accumulative basis from inception of the Company, at the prevailing share price on the last day of the
month that the shares first trade ex-dividend. The performance is evaluated on a original shareholding of 1000 shares on
inception of the Company (12 June 2014). This provides a useful measure to allow shareholders to compare performances
between investment funds where the dividend paid may differ.
2021 Shares For the year ended
31 December 2021
For the year ended
31 December 2020
Opening share price per 2021 Share US$0.6175 US$0.6775
Opening accumulated number of 2021 Shares* (a) 2,094.4 shares 1,889.4 shares
Opening share price valuation of shares (b)
US$1,293.3 US$1,280.1
Dividends paid during the year US$0.0975 US$0.0580
Dividends converted to shares** (c) 327.7 shares 205.0 shares
Closing share price per 2021 share US$0.6225 US$0.6175
Closing accumulated number of 2021 Shares* (d = a + c) (d) 2,422.0 shares 2,094.4 shares
Closing share price valuation of shares (e)
US$1,507.7 US$1,293.3
Valuation of shares return (f = e – b) (f) US$214.5 US$13.2
Total share price return (g = (f / b) x 100)
(g)
16.6% 1.0%
*with dividends reinvested since inception (12 June 2014)
**converted to 2021 Shares at the prevailing month end share price ex-dividend for all dividends paid during the year.
Realisation Shares For the year ended
31 December 2021
For the year ended
31 December 2020
Opening share price per Realisation Share US$0.6175 US$0.6775
Opening accumulated number of Realisation Shares* (a) 2,094.4 shares 1,889.4 shares
Opening share price valuation of shares (b)
US$1,293.3 US$1,280.1
Dividends paid during the year US$0.0975 US$0.0580
Dividends converted to shares** (c) 315.3 shares 205.0 shares
Closing share price per Realisation share US$0.7000 US$0.6175
Closing accumulated number of Realisation Shares* (d = a + c) (d) 2,409.6 shares 2,094.4 shares
Closing share price valuation of shares (e)
US$1,686.7 US$1,293.3
Valuation of shares return (f = e – b) (f) US$393.5 US$13.2
Total share price return (g = (f / b) x 100)
(g)
30.4% 1.0%
*with dividends reinvested since inception (12 June 2014)
**converted to Realisation Shares at the prevailing month end NAV ex-dividend for all dividends paid during the year.

78
FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Appendix (continued)
Alternative Performance Measures used in the Financial Statements (continued)
• 2021 and Realisation Share (discount)/premium to NAV
2021 and Realisation Share (discount)/premium to NAV is the amount by which the 2021 and Realisation Share price is lower/
higher than the NAV per 2021 and Realisation Share, expressed as a percentage of the NAV per 2021 and Realisation Share,
and provides a measure of the Company’s share price relative to the NAV.
• Ongoing charges ratio (“OCR”)
The ongoing charges ratio of an investment company is the annual percentage reduction in shareholder returns as a result
of recurring operational expenditure. Ongoing charges are classified as those expenses which are likely to recur in the
foreseeable future, and which relate to the operation of the company, excluding investment transaction costs, gains or losses
on investments and performance fees. In accordance with the AIC guidance, the proportionate charges for the period are
also incorporated from investments in other funds. As such charges for:
1. 2021 Shares – from the Master Fund III a weighted average percentage for the period of 100%, the Master Fund II at
a weighted average percentage for the period of 62.21%, Wollemi at a weighted average percentage for the period of
62.21% and Cycad Investments LP at a weighted average percentage for the period of 9.31% are included.
2. Realisation Shares – from the Master Fund II a weighted average percentage for the period of 9.59%, Wollemi at a
weighted average percentage for the period of 9.59% and Cycad Investments LP at a weighted average percentage for
the period of 1.44% are included.
3. 2017 Shares for 31 December 2020 – the Master Fund II a weighted average percentage for the year of 80.32%, the
Master Fund at a weighted average percentage for the year of 53.17% and Cycad Investments LP at weighted average
percentage for the year of 12.02% are included.
Performance fees or carried interest from the underlying funds are not included. The OCR is calculated as the total ongoing
charges for a period divided by the average net asset value over that period/year.
2021 Shares For the year ended 31 December 2021
Company
US$
Master Funds
1
US$
Total
US$
Total expenses 682,320 3,241,427 3,923,747
Non-recurring expenses – (246,520) (246,520)
Total ongoing expenses 682,320 2,994,907 3,677,227
Average NAV 271,982,050 271,982,050
Ongoing charges ratio (using AIC methodology) 0.25% 1.35%
Realisation Shares For the year ended 31 December 2021
Company
US$
Master Funds
1
US$
Total
US$
Total expenses 105,191 470,082 575,273
Non-recurring expenses – (15,221) (15,221)
Total ongoing expenses 105,191 454,861 560,052
Average NAV 41,947,976 41,947,976
Ongoing charges ratio (using AIC methodology) 0.25% 1.34%
1
Master Funds includes FOMC III LP, FOIF II LP, Wollemi and Cycad.

FAIR OAKS INCOME LIMITED ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
79
ADDITIONAL INFORMATION
Appendix (continued)
Alternative Performance Measures used in the Financial Statements (continued)
• Ongoing charges ratio (“OCR”) (continued)
2017 Shares For the year ended 31 December 2020
Company
US$
Master Funds
1
US$
Total
US$
Total expenses 811,248 2,512,992 3,324,240
Non-recurring expenses (3,303) 412,776 409,473
Total ongoing expenses 807,945 2,925,768 3,733,713
Annualised total ongoing expenses
807,945 2,925,768 3,733,713
Average NAV 254,338,231 254,338,231
Ongoing charges ratio (using AIC methodology) 0.32% 1.47%
1
Master Funds includes FOIF LP, FOIF II LP and Cycad Investments LP.

PRODUCED BY TPA - GUERNSEY