TA GLOBAL BERHAD (Company No P) (Incorporated in Malaysia) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE

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1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. ` If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional advisers immediately. Bursa Malaysia Securities Berhad takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular. TA GLOBAL BERHAD (Company No P) (Incorporated in Malaysia) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED DISPOSAL OF DEVELOPMENT PROPERTY LOCATED IN LITTLE BAY, NEW SOUTH WALES, AUSTRALIA BY TA LITTLE BAY PTY LIMITED, A SUBSIDIARY OF TA GLOBAL BERHAD TO KARIMBLA PROPERTIES (NO. 50) PTY LIMITED FOR A CASH CONSIDERATION OF AUD245,000,000 (EQUIVALENT TO RM794,020,500) AND NOTICE OF EXTRAORDINARY GENERAL MEETING Adviser TA SECURITIES HOLDINGS BERHAD (14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) The Notice of the Extraordinary General Meeting of TA Global ( EGM ) to be held at 3 rd Floor, Wisma TA, No. 1A Jalan SS 20/1, Damansara Utama, Petaling Jaya, Selangor Darul Ehsan on Wednesday, 22 November 2017 at a.m. together with the accompanying Form of Proxy, is set out in this Circular. A member entitled to attend and vote at the meeting is entitled to appoint a proxy/proxies (but not more than two) to attend and vote on his/her behalf. The Form of Proxy should be deposited with the Share Registrar of the Company at Tricor Investor & Issuing House Services Sdn Bhd at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur or alternatively Tricor Customer Service Centre, Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur not less than 48 hours before the time set for holding the EGM. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the meeting if you subsequently wish to do so. Last date and time for lodging the Form of Proxy : Monday, 20 November 2017 at a.m. Date and time of EGM : Wednesday, 22 November 2017 at a.m. This Circular is dated 7 November 2017

2 DEFINITIONS Except where the context otherwise requires, the following definitions shall apply throughout this Circular and the accompanying appendices: Act : Companies Act 2016 as amended from time to time and any reenactment thereof Announcement : The announcement of the Proposed Disposal dated 9 August 2017 AUD : Australian Dollar. Unless otherwise specified, the exchange rate of AUD1.00 to RM (AUD1.00 = RM3.2409) (i.e., the middle rate of Bank Negara Malaysia as at 5.00 p.m. on 27 October 2017, being the LPD) is used throughout this Circular Board : Board of Directors of TA Global Bursa Depository : Bursa Malaysia Depository Sdn Bhd ( W) Bursa Securities : Bursa Malaysia Securities Berhad ( W) Call Option : The call option to purchase the Property granted by the Owner to the Purchaser on the terms and conditions as set out in the Option Deed Circular : This circular to shareholders dated 7 November 2017 Contract : Contract for the sale of the Property to be entered into by the Purchaser and the Owner upon obtaining the approval from our Company s shareholders at an EGM to be convened for the Proposed Disposal Disposal Consideration : A total cash consideration of AUD245,000,000 (equivalent to RM794,020,500) for the Proposed Disposal EGM : Extraordinary general meeting of TA Global EPS : Earnings per share FYE : Financial year ended/ending GST : Goods and services tax KPPL or Purchaser : Karimbla Properties (No. 50) Pty Limited Land : A 135,961.6 square meter (33.6 acre) freehold residential development master plan located towards the southern end of the Eastern Suburbs in the suburb of Little Bay, just south of Malabar in New South Wales, Australia LAT : Loss after tax LBPL : CHOF5 Little Bay Pty Ltd Licenced Area : The area(s) of which KPPL will provide to a licence to TALBPL after the Proposed Disposal to enable TALBPL to complete lot 6 and will comprise the initial licenced area of part of Cawood Avenue and Galaup Street and a further licenced area of part of Galaup Street i

3 DEFINITIONS (Cont d) Licenced Fee : The fee(s) of which TALBPL is obligated to pay KPPL for the Licenced Area of which is based on the Randwick City Council s work zone charge Licenced Term : The term(s) related to the Licenced Area : (a) initial licenced area of which the term commences on the completion of the contract for sale and expiring on 31 January 2018; (b) the further licenced area which the term commences on 1 February 2018 and expiring on 30 June 2018 (or such later date as may be agreed by the parties) Listing Requirements : Main Market Listing Requirements of Bursa Securities LPD : 27 October 2017, being the latest practicable date prior to the printing of this Circular Major Works Agreement : Agreement dated 30 August 2011 between TALBPL and Sydney Water, a statutory state owned water utilities corporation wholly owned by the New South Wales Government, for the issuance of a compliance certificate by Sydney Water when TALBPL completes the construction of works relating to water utilities services on the Land MPPL : Meriton Properties Pty Ltd NA : Net assets NBV : Net book value Option Deed : Put and Call Option Deed entered into with KPPL on 9 August 2017 for the Proposed Disposal Property : The remaining undeveloped Land comprising of 8 development lots and 26 house lots bearing titles development lots 2, 3, 4, 7, 8, 9, 10, 11, 12, 13, 14, 15, 18, 19 and 20 with a total land area of 98,193.3 square meters (24.26 acres) Proposed Disposal : Proposed disposal by our Company of the Property to KPPL for the Disposal Consideration Put Option : The put option to require the Purchaser to purchase the Property granted by the Purchaser to the Owner on the terms and conditions as set out in the Option Deed Record of Depositors : A record of securities holders provided by Bursa Depository under the rules of Bursa Depository RM and sen : Ringgit Malaysia and sen, respectively TA Global or Company : TA Global Berhad ( P) TA Global Group or Group : Our Company and our subsidiaries, collectively TA Global Shares or Shares : Ordinary shares in our Company TALBPL or Owner : TA Little Bay Pty Limited (A.C.N ), a subsidiary of TA Global TA Securities : TA Securities Holdings Berhad (14948-M) Unconditional Date : The date upon which all the conditions precedent have been fulfilled or satisfied Valuer : m3property (NSW) Pty. Ltd, an independent registered valuer based in Australia ii

4 DEFINITIONS (Cont d) All references to our Company in this Circular are to TA Global, references to our Group are to our Company and our subsidiaries. All references to we, us, our and ourselves are to our Company, or where the context requires, our Group. All references to you in this Circular are references of the shareholder of our Company. Words incorporating the singular shall, where applicable, include the plural and vice versa and words incorporating the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include a corporation, unless otherwise specified. Any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any reference to a time of day in this Circular shall be a reference to Malaysian time, unless otherwise specified. [The rest of this page has been intentionally left blank] iii

5 TABLE OF CONTENTS PAGE LETTER TO OUR SHAREHOLDERS CONTAINING: 1. INTRODUCTION DETAILS OF THE PROPOSED DISPOSAL INFORMATION ON THE PURCHASER UTILISATION OF PROCEEDS RATIONALE FOR THE PROPOSED DISPOSAL EFFECTS OF THE PROPOSED DISPOSAL RISK FACTORS APPROVALS REQUIRED CORPORATE EXERCISES ANNOUNCED BUT PENDING COMPLETION AND INTER- CONDITIONALITY OF THE PROPOSED DISPOSAL INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM DIRECTORS STATEMENT AND RECOMMENDATION ESTIMATED TIME FRAME FOR COMPLETION EGM FURTHER INFORMATION APPENDICES I LOCATION OF THE LAND 18 II FURTHER INFORMATION ON THE PROPERTY 19 III FURTHER INFORMATION ON THE PROPOSED DEVELOPMENT ON THE PROPERTY 20 IV VALUATION CERTIFICATE BY THE VALUER 22 V FURTHER INFORMATION 48 NOTICE OF EGM FORM OF PROXY ENCLOSED ENCLOSED iv

6 TA GLOBAL BERHAD (Company No P) (Incorporated in Malaysia) Registered Office: 34 th Floor, Menara TA One 22, Jalan P. Ramlee Kuala Lumpur 7 November 2017 Board of Directors Datuk Tiah Thee Kian (Executive Chairman) Datin Tan Kuay Fong (Non-Independent Non-Executive Director) Dato Sri Mohamed Bin Abid (Executive Director) Kimmy Khoo Poh Kim (Executive Director) Zainab Binti Ahmad (Non-Independent Non-Executive Director) Peter U Chin Wei (Independent Non-Executive Director) Jory Leong Kam Weng (Independent Non-Executive Director) Christopher Koh Swee Kiat (Independent Non-Executive Director) Datin Rahmah Binti Mahmood (Independent Non-Executive Director) To: Our Shareholders Dear Sir/Madam, PROPOSED DISPOSAL 1. INTRODUCTION On 9 August 2017, TA Securities announced on behalf of our Board that the Owner, had on 9 August 2017 entered into the Option Deed for the Proposed Disposal. Further details of the Proposed Disposal are set out in the ensuing sections in the Circular. THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE YOU WITH THE RELEVANT INFORMATION ON THE PROPOSED DISPOSAL, TO SET OUT OUR BOARD S RECOMMENDATION ON THE PROPOSED DISPOSAL AND TO SEEK YOUR APPROVAL FOR THE RESOLUTION PERTAINING TO THE PROPOSED DISPOSAL TO BE TABLED AT OUR FORTHCOMING EGM. THE NOTICE OF EGM TOGETHER WITH THE FORM OF PROXY ARE ENCLOSED IN THIS CIRCULAR. YOU ARE ADVISED TO READ AND CONSIDER THE CONTENTS OF THIS CIRCULAR TOGETHER WITH THE APPENDICES CONTAINED HEREIN CAREFULLY BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED DISPOSAL TO BE TABLED AT OUR FORTHCOMING EGM. 1

7 2. DETAILS OF THE PROPOSED DISPOSAL 2.1 Description of Little Bay Cove Project Little Bay Cove is a 135,961.6 square meter (33.6 acre) freehold residential development master plan located towards the southern end of the Eastern Suburbs in the suburb of Little Bay, just south of Malabar in New South Wales, Australia. The site is bound by The Coast Golf Club and Pacific Ocean to the east, Anzac Parade to the west, residential housing to the north and the Prince Henry Estate to the south. Please refer to Appendix I for the locality of the Land and its surroundings. The project includes a diverse range of dwellings mix comprising apartments, townhouses, semidetached and free-standing houses within the enclave of parks and recreation areas, pedestrian pathways and viewing lookouts. The centrepiece of this 135,961.6 square meter (33.6 acre) master plan is a picturesque lake and natural waterway, surrounded by parks and a network of connecting landscaped walkways. The Land is owned by TALBPL. In July 2014, the overall Master Planned Residential Estate for the Land was subsequently subdivided into 7 development lots, 10 house lots, park and roads. Out of the 7 development lots, 1 development lot is pending further subdivision into 4 development lots and 18 house lots, park and roads. On completion on the subdivision, the Land will comprise of 10 development lots, 28 housing lots, park and roads. 2.2 Background of Little Bay Cove Project On 27 November 2013, TA Global Development Pty Ltd and TA Antarabangsa Development Ltd entered into an acquisition deed with Charter Hall Group to acquire the following: (a) (b) sole right and interest to develop the Little Bay Cove Project; and all the issued shares in LBPL which owned the Land, and is the developer of the Little Bay Cove Project. ( Acquisition ) On completion of the Acquisition by the Company in May 2014, the entire Little Bay Cove Project together with the sole right to the development came under the stewardship of the Company and LBPL became a wholly-owned subsidiary of the Company and changed its name to TALBPL. As at to date, the Company has been developing/developed/sold the following development/house lots on the Land: (a) House lot 16 measuring square meters (0.107 acres) and house lot 17 measuring square meters (0.144 acres) were sold and duly handed over to the purchasers in October 2014; (b) (c) In August 2015, the Company launched Illume, a development of 179 units of high-end apartments situated on development lot 6 and construction works have commenced in November The Company will continue to develop and deliver Illume to the purchasers no later than 1 st quarter of 2019; and In July 2016, the Company completed and handed over to the purchasers a total of 45-units of high-end apartment in Solis which was fully sold. 2

8 2.3 Proposed Disposal Pursuant to the Proposed Disposal, the Owner has entered into the Option Deed to dispose the remaining undeveloped Land comprising of 8 development lots and 26 house lots bearing titles development lots 2, 3, 4, 7, 8, 9, 10, 11, 12, 13, 14, 15, 18 *, 19 # and 20 # with a total land area of 98,193.3 square meters (24.26 acres) to KPPL for the Disposal Consideration. The total number of development lots and house lots are as follows: Development lots Development lots 2, 3, 4, 7 and part of development lot 18* House lots House lots 8, 9, 10, 11, 12, 13, 14, 15 and part of development lot 18* Notes: * Development lot 18 is proposed to be subdivided into the following: (i) Development lots 21, 22, 23 and 24 (total of 4 development lots); (ii) House lots 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41 and 42 (total of 18 house lots); and (iii) Lots 43 and 44 as public reserve area for park and roads, respectively. # Development lots 19 and 20 are public reserve areas and is proposed to be subdivided into development lots 45 and 46 with designated use as a park and roads, respectively. On completion of the Proposed Disposal, the Owner will only own development lot 6 and will continue to develop and hand over the 179 units of apartments on development lot 6 to the purchasers no later than 1 st quarter of Pursuant to the Option Deed, the Owner will grant to the Purchaser the Call Option and the Purchaser will grant to the Owner the Put Option to purchase the Property on the terms and conditions as set out in the Option Deed. In consideration that the Proposed Disposal requires the approval of the shareholders of TA Global, the Option Deed will govern the contractual obligations of both parties pending the relevant conditions precedent to be met before the Purchaser and the Owner can exercise the respective options to enter into the Contract. Upon obtaining the approval from the Company s shareholders at an EGM to be convened for the Proposed Disposal, either the Owner will exercise the Put Option on the Purchaser or the Purchaser will exercise the Call Option on the Owner to enter into the Contract. The Option Deed is a common market practice for purchase of large development land transactions in Australia. Large development land transactions are normally executed vide 2 separate agreements, namely a put and call option agreement and thereafter a sales contract, to facilitate a staggered settlement payment by the purchaser and/or for both the purchaser and/or the vendor to satisfy certain obligations before proceeding into a sales contract. Furthermore, the Option Deed also allows the Purchaser to defer its obligations to pay stamp duty payment until the sales contract is entered into and thus allowing the Purchaser to manage its cash flow more efficiently from the date both parties come into an agreement on the terms and conditions of the transaction. Salient terms and conditions of the Option Deed and the Contract are set out in Sections 2.4 and 2.5 of this Circular respectively Details of the Property The Property is part of the Little Bay Cove residential development. The Property is located at Anzac Parade within 5-15 Cawood Avenue, 1-15 Galaup Street, 2-14 Lapwing Street, 3-17 Lapwing Street, 7-21 Solarch Avenue, 19 Cawood Avenue, 2R Solarch Avenue and Lot 20 Belbowrie Road, Little Bay, New South Wales, Australia. It is situated on the southern outskirts of the Sydney metropolitan area and approximately 12 km to the south of the Sydney central business district. TALPBL is the registered owner of the Property. 3

9 Development Consent (DA/39/2016) was obtained on 29 June 2016 for development lot 2 of the Property from Randwick City Council for the construction of multi-dwelling housing development with roof terraces, containing 33 dwellings, basement parking for 50 vehicles, at grade parking for 8 vehicles, landscaping and associated works whereby the said consent will expire on 29 June Development Consent (DA/495/2011) was obtained on 5 October 2011 for development lots 3 and 4 from Randwick City Council for the construction of 66 units of 2 and 3 storey terrace dwellings with basement parking for 132 vehicles, landscaping and associated works whereby the said consent has lapsed on 5 October Please refer to Appendix II for further information on the Property and Appendix III for further information on the proposed development on the Property. 2.4 Salient terms and conditions of the Option Deed Agreement to enter into the Option Deed (i) (ii) (iii) (iv) (v) (vi) The Owner has agreed to grant the Purchaser a Call Option to purchase the Property and the Purchaser has agreed to grant the Owner a Put Option to require the Purchaser to purchase the Property upon the terms and conditions as set out in the Option Deed. Under the Call Option, the Purchaser has paid a call option fee of AUD24,500,000 ( Call Option Fee ) plus GST by way of Bank Guarantee to be held by the Owner s solicitors on the date of the Option Deed. In consideration of the Purchaser paying the Owner the Call Option Fee, the Owner will grant the Call Option to the Purchaser subject to the terms as set out in the Option Deed. The Call Option is an irrevocable offer by the Owner to dispose the Property to the Purchaser and does not give rise to a conditional contract for the sale of the Property. Under the Put Option, the Owner has paid to the Purchaser a put option fee of AUD1.00 ( Put Option Fee ). In consideration of the Owner having paid the Put Option Fee, the Purchaser will grant the Put Option to the Owner subject to the terms as set out in the Option Deed. The Put Option is an irrevocable offer by the Purchaser to purchase the Property from the Owner and does not give rise to a conditional contract for the sale of the Property. MPPL, the holding company of the Purchaser, has agreed to be the guarantor ( Guarantor ) for the Purchaser for the performance of the Purchaser under the Option Deed and the Contract. The Owner has 4 months from the date of the Option Deed to fulfil the conditions precedent stated in Section below ( Conditions Precedent ) (also known as the Call Option Period ) or 14 days from the fulfilment of the Conditions Precedent (whichever is the later) which the Purchaser shall be entitled to exercise the Call Option via a notice ( Call Option Notice ) upon the Owner. Upon the Call Option Notice being issued by the Purchaser to the Owner, the Contract shall be delivered to the Owner for execution within 5 business day Consideration and payment (i) The Disposal Consideration for the disposal of the Property is AUD245,000,000 excluding GST. The GST for this transaction shall be paid by KPPL. (ii) KPPL shall pay to TALBPL the Disposal Consideration and the GST in cash within 30 days from the execution of the Contract. 4

10 2.4.3 Conditions Precedent (i) The sale of the Property is subject to the compliance with the Listing Requirements by TA Global and the following: (a) (b) (c) TA Global to announce the notice of EGM no later than 2 months after Bursa Securities / Securities Commission Malaysia s approval of the valuation report; TA Global shall convene the EGM no later than 21 days after the announcement of notice of EGM; and approval of the shareholders of TA Global at an EGM to be convened. (ii) If the Conditions Precedent are not satisfied on or before the date being 6 months after the date of the Option Deed ( Sunset Date ), the Purchaser may at its sole discretion elect to either: (a) (b) terminate the Option Deed by giving notice to the Owner at any time before the Conditions Precedent are satisfied and the Owner s solicitors shall return the Call Option Fee to the Purchaser within 2 business days of the Purchaser giving such notice; or extend the Sunset Date by a further 12 months ( Extended Sunset Date ) and the Owner shall use best endeavors to satisfy the Conditions Precedent before the expiry of the Extended Sunset Date. (iii) As at the LPD, the following Conditions Precedent has been met: (a) (b) (c) The Securities Commission vide its letter dated 20 October 2017 informed that it has no further comments on the valuation report and certificate prepared by the Valuer for compliance with the Asset Valuation Guidelines; The notice of EGM was announced on 6 November 2017; and The EGM will be held on 22 November 2017 which is within 2 months after Bursa Securities / Securities Commission Malaysia s clearance of the valuation report on 20 October Nomination Under the Option Deed, the Purchaser shall have the right to appoint a nominee to be the purchaser in its place ( Nominee ) subject to the following: (a) (b) the Nominee is a wholly-owned subsidiary of MPPL (the Guarantor); and the nomination notice must be received by the Owner and the Call Option Notice can only be exercised after 5 business days from the nomination notice Event of termination If the Purchaser or the Owner breaches the Option Deed, and fails to remedy the breach within 10 business days of receiving notice regarding the breach or if the breach is incapable of remedy in the opinion of the other party or if an insolvency event occurs, then the other party can terminate the Option Deed and in the event the breach is by: (i) (ii) the Purchaser, the Call Option Fee is retained by the Owner; or the Owner, the Call Option Fee is returned to the Purchaser; or 5

11 either party may enforce the terms of the Option Deed and seek to recover from the other party any loss or damage incurred in connection with the breach. 2.5 Indicative salient terms and conditions of the Contract Agreement to enter into the Contract (i) The Purchaser and the Owner may issue a notice to complete to each other to complete the Contract on a specified date. For the avoidance of doubt, the date of completion shall not be less than 10 business days from the date of notice to complete. (ii) Interest will be imposed on either the Purchaser or the Owner at 4% per annum on balance of the total Disposal Consideration should the completion not occur on the date for completion Representations and warranties (i) By the Owner: (a) The Owner shall provide all development consents obtained to the Purchaser. (b) All consultants or contractor services engaged by the Owner for the Property shall be terminated by Owner before completion. (c) The Owner indemnifies the Purchaser for claims made for unpaid services of consultants or contractors engaged by the Owner. (d) The Owner shall continue to develop development lot 6 comprising of 179 units of apartment which is adjacent to the Property. (e) The Owner shall have utilisation of and also share the use of the roads on or around development lot 6 for the purpose of construction traffic and to aid the Owner s construction of development lot 6. (f) Prior to the completion of the Proposed Disposal, the Owner shall remove rubbish, materials, debris, stockpile, site office and any other items from development lots 2 and 3 (whether or not they were on the property as at the date of the Contract) and leave development lots 2 and 3 in a clean condition. (ii) By the Purchaser: Upon completion, the Purchaser releases: (a) the Owner from any claim by the Purchaser; and (b) forever discharges the Owner and will fully and effectively keep the Owner indemnified against any liability which the Owner may suffer or incur; to the extent the claim or liability arises from: (a) the fitness or suitability of the Property for any particular use; (b) any contamination, pollution or hazardous materials at or from the Property; (c) the breach of any environmental protection law; (d) the clean-up of the Property or any other environment in any way affected by contamination, pollution or hazardous materials at or from the Property; (e) the payment of compensation to any third party in respect of or arising from the clean-up of the Property or any other environment in any way affected by contamination, pollution or hazardous materials at or from the Property; or (f) the payment of any fine or penalty in any way arising from any contamination, pollution or hazardous materials at or from the Property that results in any obligation to clean up the Property or any other environment; except for any liability, order or claim by any third party for personal injury due to contamination, pollution or hazardous materials in the Property to the extent: (a) occasioned during the ownership of the Property by the Owner prior to completion of the Proposed Disposal; or (b) caused or contributed to by the Owner prior to completion of the Proposed Disposal. 6

12 2.5.3 Guarantee and indemnity to the Owner (i) The Guarantor acknowledges that, in entering into the Contract, the Owner is acting in reliance on the Guarantor incurring obligations and giving rights. (ii) The Guarantor unconditionally and irrevocably guarantees to the Owner the performance of the Purchaser s obligations, including the obligation to pay money under the Contract. (iii) The Guarantor must pay to the Owner on demand all liability, loss, damage, expense or claims of the Owner in connection with: (a) the Purchaser s failure to comply with any guaranteed obligation under the Contract; (b) an obligation that the Purchaser would otherwise have under the Contract being void, voidable or unenforceable; or (c) a representation or warranty made by the Purchaser in the Contract being incorrect or misleading when made or taken to be made Additional warranties by the Owner (i) All civil and public domain works on the Property are completed in accordance with the Little Bay Stage 1 Development Consent on the completion of the Proposed Disposal. (ii) The Owner will not apply to register the subdivision of development lot 18 or dedicate any roads on the Property prior to completion of the Proposed Disposal. 2.6 Basis and justification of arriving at the Disposal Consideration The Disposal Consideration was derived on a willing-buyer and willing-seller basis after taking into consideration the following: (i) The purchase price of AUD245 million was concluded based on the indicative asking price of AUD280 million established for the sales campaign after taking into consideration the reserved selling price fixed by the management of our Group based on the internal rate of return expected by our Company. Pursuant to the sales campaign conducted by Jones Lang LaSalle and Knight Frank ( Agents ) in March 2017 via bidding process and subsequent negotiations by the Agents with the prospective purchasers and lastly with the shortlisted preferred purchasers during the period between end April 2017 to early August 2017 for the Property, various bids ranging from AUD180 million to AUD310 million along with various terms and conditions of transaction were negotiated between the Agents and the various purchasers. The final close bids from the preferred purchasers together with the following analysis were then presented for our Board s deliberation and decision: (a) deposit offered on execution of the Option Deed; (b) duration of due diligence required before entering into the Option Deed; (c) total tenure to complete and settle the transaction from the signing of Option Deed to completion of Contract; (d) any conditions precedent requirement by the purchaser for entering into a contract; (e) any approval requirement to be obtained by the purchaser from the Australian Foreign Investment Review Board; (f) any requirements or pre-conditions from the local authorities for the purchaser to acquire the property; (g) settlement and transaction risks of each offer; (h) timeline of expected cashflow to be received from each offer; (i) financial strength and credit standing of the purchasers; (j) past transaction experience and success rate of each preferred purchasers in similar large scale developments; (k) terms and conditions of development cooperation and support from the purchaser postcompletion to facilitate the completion of the existing on-site development by TALBPL; and 7

13 (l) absolute net returns of each offer based on the terms of contract; (ii) (iii) The prevailing transacted market value of properties in the same vicinity provided by the Agents, various valuation reports conducted on the Land in the past and publicly available general property market reports. According to the Agents, over the recent past property cycle in Sydney, it is very common for development land to sell at substantial premiums to valuation as it has been a rising property market with substantial sale potential; and The valuation on the Property of AUD190,425,000 (equivalent to RM617,148,383) as ascribed by the Valuer in its valuation report based on the residual land value approach and direct comparison approach appraised by Valuer appointed by the Owner to conduct an independent valuation on the Property. Ultimately, KPPL, a wholly-owned subsidiary of MPPL, the parent company of the Meriton group of companies ( Meriton Group ), Australia s largest residential apartment developer was successful in bidding the Property due to their pricing, minimal due diligence requirements, fast internal approvals and comparatively short settlement period as they are able to settle the Disposal Consideration using its internally generated funds within 1 month from the date of the Contract as compared to other prospective purchasers where their settlement is subject to financing or may require more than 2 months to settle the Disposal Consideration. KPPL is an all equity cash purchaser which enables them to pay above valuation as they are not dependent on valuation for their funding of the acquisition and the project. Taking into consideration the valuation on the Property of AUD190,425,000 (equivalent to RM617,148,383) and the terms and conditions offered by the preferred purchasers as well as the financial credibility and completion risk of the preferred purchasers, the Board is of the opinion that the offer by KPPL is the most attractive option and is in the best interest of our Company. 2.7 Independent valuation on the Property The Valuer was appointed by our Company to conduct an independent valuation on the Property for the purpose of the Proposed Disposal. As set out in the valuation certificate dated 27 October 2017, the Valuer has adopted the Residual Land Value Approach and the Direct Comparison Approach for the valuation of the Property. Residual Land Value Approach The Residual Land Value model is based upon explicit assumptions regarding the prospective cash flows which will arise from the development or ownership of the Property. It involves the establishment of the net position which will be derived through the development or ownership of the subject property, it will take account of the projected gross realisation; but will not account for escalations in revenue or cost. A profit and risk factor is applied to the net position derived after the deduction of selling/marketing costs and GST. This factor is a reflection of the required return and risk profile of the Property and is derived through analysis of market evidence and the risk profile considerations of the proposed development on the Property. It is a static factor providing a required return for the life of the project and does not represent an annual return. Relevant development, holding, interest and acquisition costs are then deducted from the net realisation resulting in an estimate of the current feasible market value of the Property. Direct Comparison Approach The direct comparison method for development land has regard to sales of broadly similar properties transacted in the open market and compares these sales to the Property having regard to factors including but not limited to: (a) (b) prevailing market conditions with specific consideration to potential apartment pricing, sale rates and development costs; land area and potential densities/unit yield; 8

14 (c) (d) (e) (f) (g) (h) (i) (j) zoning status under the local authority town planning scheme; development approvals; likely scheme cost contributions where applicable; access and proximity to local transport corridors including motorways and public transport facilities; immediate competition and profile of developers within the general localities; servicing constraints; environmental constraints; and metropolitan or regional constraints. Typically, sales are analysed on a rate per equivalent unit site or rate per square metre of gross floor area basis, and an appropriate rate is attributed to the subject property having regard to the considerations outlined above. 2.8 Expected gain arising from the Proposed Disposal Based on the Disposal Consideration, TA Global Group is expected to register a gain after tax arising from the Proposed Disposal of AUD71.43 million (equivalent to approximately RM million) as follows: AUD RM ( 000) ( 000) Disposal Consideration 245, ,021 Less: Unaudited NBV of the Property as at 27 October 2017 (138,068) (447,465) Less: Estimated incidental costs in relation to the Proposed Disposal (5,000) (16,205) Less: Reversal of deferred tax assets at the company and group level (16,394) (53,131) Less: Estimated tax expenses in relation to the Proposed Disposal (14,109) (45,726) Estimated gain after tax 71, , Original cost and date of investment The original cost of investment for the Property from October 2010 up to August 2014 were AUD million (equivalent to approximately RM million) Liabilities to be assumed by KPPL Save as disclosed below, there are no liabilities, including contingent liabilities and guarantees, to be assumed by KPPL pursuant to the Proposed Disposal: (i) the obligations of TALBPL with Coast Golf Club (under the Coast Golf Deed * ), a golf club neighbouring the Property; Note: * The Coast Golf Deed dated 21 November 2007 was entered into between the University New South Wales (the original owner of the Land) and the Coast Golf Club and subsequently novated to TALBPL under the successor deed dated 8 August 2008 between the University of New South Wales, the Coast Golf Club and TALBPL. On completion of the Proposed Disposal, KPPL will enter into a successor deed with the Coast Golf Club whereby KPPL will assume both the benefits and the obligation of TALBPL to pay the reasonable expenses for the relocation of the Tees in accordance with the redevelopment plan of Little Bay Cove which is capped at AUD80,000 inclusive of GST ( Successor Deed ). 9

15 2.11 Liabilities to be assumed by TALBPL (i) (ii) in the event that there is delay caused by TALBPL to complete the disposal of the Property, TALBPL is responsible to pay interest to KPPL at 8% per annum on the balance Disposal Consideration, such interest being a genuine pre-estimate of KPPL s loss; wherein with TALBPL s existing development on lot 6 of the Land, in consideration of KPPL providing a licence pursuant to the Licenced Term for the use of part of the access to the Property by TALBPL s contractor to complete lot 6, the obligations by TALBPL to KPPL are as follows: (a) (b) (c) (d) (e) TALBPL to provide an indemnity to KPPL on use of mobile crane over KPPL s airspace; TALBPL to pay to KPPL the Licenced Fee for the use of part of the access to the Property to enable TALBPL s contractor to complete lot 6; TALBPL to deliver to KPPL a guarantee in favour of KPPL to cover for the Licenced Area; TALBPL to rectify any damage that may be caused to the Licenced Area; and TALBPL to indemnify KPPL against all claims arising from and in connection with TALBPL s use of the Licenced Area; (iii) (iv) (v) (vi) wherein TALBPL has warranted to KPPL that it has complied with all of its obligations under the Major Works Agreement except for the subdivision of development lot 18 and TALBPL indemnifies KPPL against any liability in connection with this warranty; in relation to the Successor Deed (as defined in Section 2.10(i)) with the Coast Golf Club, TALBPL is to deliver to KPPL AUD500,000 in the event of failure to produce the Successor Deed signed by TALBPL and the Coast Golf Club; wherein TALBPL has warranted to KPPL that it has complied with its obligations under the Coast Golf Deed (as defined in Section 2.10(i)) and TALBPL indemnifies KPPL against any liability in connection with this warranty; and TALBPL to be responsible to KPPL on the environmental release and indemnity clause for any liability or claim by 3 rd party for personal injury to the extent occasioned during TALBPL s ownership prior to completion of the Proposed Disposal or caused by KPPL prior to completion of the Proposed Disposal Cash Company or Practice Note 17 ( PN17 ) issuer The Proposed Disposal is not expected to result in the Company becoming a Cash Company (as defined under Paragraph 1.01 of the Listing Requirements) or a PN17 issuer. 3. INFORMATION ON THE PURCHASER KPPL was incorporated in Australia on 17 March 2014 under the Corporations Act 2001 as a private company limited by shares. KPPL is principally involved in residential property development. KPPL is a wholly-owned subsidiary of MPPL, the parent company of the Meriton Group, Australia s largest residential apartment developer. Established in 1963, Meriton Group has made a significant impact on the Australian landscape. Meriton Group has designed, developed and built more than 68,000 apartments across the east coast of Australia. Meriton Group offers sales, leasing and property management services, as well as the luxury accommodation brand, Meriton Suites, with more than 17 locations across Australia. 10

16 As at 27 October 2017, KPPL has an issued share capital of AUD1.00 comprising 1 ordinary share. KPPL has the following directors and substantial shareholder as at 27 October 2017: Direct No. of ordinary shares % Indirect No. of ordinary shares % Directors Harry Oscar Triguboff James Demitrius Sialepis David Cremona Matthew Thomas Shareholder MPPL * Note: * MPPL has a 100% direct equity interest in KPPL. The ultimate shareholder of MPPL is Harry Oscar Triguboff. 4. UTILISATION OF PROCEEDS The Disposal Consideration of AUD245,000,000 (equivalent to RM794,020,500) will be utilised in the following manner: Utilisation purposes Notes (AUD 000) (RM 000) Expected time frame for the utilisation of Disposal Consideration (from the completion date) Working capital for on-going property (1) 46, ,081 Within 24 months development projects Repayment of bank borrowings (2) 180, ,362 Within 6 months Estimated tax expenses in relation to (3) 14,000 45,373 Within 12 months the Proposed Disposal Estimated expenses in relation to the (4) 5,000 16,205 Within 2 months Proposed Disposal Total estimated proceeds 245, ,021 Notes: (1) Currently, our Group has several on-going property development projects in Australia and Malaysia. Our Group intends to utilise AUD46.0 million as follows: Project location (AUD 000) (RM 000) (i) Australia 32, ,005 (ii) Malaysia 13,600 44,076 Total 46, ,081 (i) Our Group will utilise AUD32.4 million (equivalent to approximately RM million) as working capital for the development of 179 units of high-end apartments under the Illume project situated on development lot 6 to fund the development cost comprising of building and infrastructure works, professional fees, authorities fees, GST and other related construction and development cost payable from time to time to complete the construction and delivery of the 179 units of apartments in Illume to the purchasers under the executed sales contract which are expected to be completed no later than 1 st quarter of

17 (ii) Our Group will utilise AUD13.6 million (equivalent to approximately RM44.08 million) as working capital to fund the development cost of the following projects comprising of building and infrastructure works, professional fees, authorities fees, GST and other related construction and development cost payable from time to time: (a) (b) mixed-development project known as TA3 & 4 (comprising a 480-key hotel and 308 units of serviced apartments within 2 tower blocks) located in Kuala Lumpur City Centre; mixed-development project known as Ativo Suites in Damansara Avenue (comprising 668 units of serviced residences within 2 tower blocks with retail shops at the podium) located in Petaling Jaya; and (c) a residential project (comprising of 364 residential units within 2 condominium blocks) located in Dutamas, Petaling Jaya. (2) AUD180 million bank borrowings will be utilised to repay the following bank borrowings to reduce our Group s total bank borrowings of more than RM2 billion as at 27 October 2017: Bank (AUD 000) (RM 000) (i) Australia and New Zealand Banking Group Limited (a) 84, ,091 (ii) National Australia Bank Limited (a) 57, ,117 (iii) United Overseas Bank Limited (b) 20,000 64,818 (iv) LGT Bank (Singapore) Limited (c) 18,000 58,336 Total 180, ,362 Notes: (a) (b) (c) Bank borrowings denominated in AUD Bank borrowings denominated in Singapore Dollar Bank borrowings denominated in United States Dollar Our Group anticipates an interest saving of approximately AUD5.34 million (approximately RM17.30 million) per annum pursuant to the above repayments. (3) The amount is in relation to the taxes to be paid to the Australian Tax Office pursuant to the Proposed Disposal, wherein the final taxable amount assessed and determined by the Australian Tax Office pursuant to the final tax filing submission to the Australian Tax Office shall be payable within 12 months from the date of this Circular. In the event that the final tax payable amount is higher than AUD14 million, the excess shall be paid via our internally generated funds. In the event that the final tax payable amount is lower than AUD14 million, the surplus will be adjusted to the working capital of our Group. (4) The estimated expenses consist of professional fees, property agent commission, fees payable to the relevant authorities, expenses relating to convening of the EGM and other incidental expenses in connection with the Proposed Disposal (such as the removal of stockpile and site office from the Property). Any variation in the actual amount of the expenses for the Proposed Disposal will be adjusted proportionately to/from the proceeds earmarked for the working capital of our Group. Pending the full utilisation of the Disposal Consideration, the Company intends to place the Disposal Consideration (including accrued interest, if any) or the balance thereof in interest-bearing deposit accounts or in short-term money market instruments with licensed financial institutions. 12

18 5. RATIONALE FOR THE PROPOSED DISPOSAL The Proposed Disposal will enable the Group to unlock the value of the Property which is currently pending development at an approximately 29% premium to the valuation appraised by the Valuer with an estimated gain after tax arising from the Proposed Disposal of AUD71.43 million (equivalent to approximately RM million). The Proposed Disposal also provides an avenue for TA Global to raise funds for on-going property development projects without being overly dependent on bank borrowings. After the repayment of bank borrowings, the Company s overall gearing level will reduce from 0.85 times to 0.61 times which is within a manageable gearing level. This would provide greater financial flexibility for the Company to continue to seek for viable investment opportunities in hotels, properties and development land as and when the opportunity arises. 6. EFFECTS OF THE PROPOSED DISPOSAL 6.1 Share capital and substantial shareholders shareholdings The Proposed Disposal will not have any effects on the issued share capital and substantial shareholders shareholdings of our Company. 6.2 Earnings and EPS Based on the Disposal Consideration, the Proposed Disposal is expected to result in gain after tax of AUD71.43 million (equivalent to approximately RM million). For illustration purposes only, based on the audited consolidated financial statements of our Group for the FYE 31 December 2016, the pro forma effects of the Proposed Disposal on the consolidated earnings and EPS of our Group, assuming that the Proposed Disposal had been effected at the beginning of the said financial year are as follows: (Audited) As at 31 December 2016 After the Proposed Disposal Profit attributable to the equity holders of our 157, ,149 Company (RM 000) No. of TA Global Shares in issue ( 000) 5,321,724 5,321,724 EPS (sen) [The rest of this page has been intentionally left blank] 13

19 6.3 NA and gearing The pro forma effects of the Proposed Disposal on the NA, NA per share and gearing of our Group based on the audited consolidated financial statements of our Company as at 31 December 2016 are as follows: (Audited) (I) As at 31 December 2016 (RM 000) After the Proposed Disposal (RM 000) Share capital 2,660,862 2,660,862 Merger deficit (926,077) (926,077) Exchange translation reserve 351, ,858 Exchange differences recognized in equity 120, ,162 Available-for-sale reserve 12,423 12,423 Capital redemption reserve Retained earnings 796,201 1,027,695 Shareholders funds attributable to the owners of 3,015,643 3,247,137 our Company Preference shares issued to TA Enterprise 57,988 57,988 Berhad and its subsidiary NA 3,073,631 3,305,125 No. of shares in issue ( 000) 5,321,724 5,321,724 NA per share (RM) Total borrowings (RM 000) 2,577,748 1,994,386 Gearing (times) 0.85 * 0.61 * Note: * Computed based on total borrowings over shareholders funds attributable to the owners of our Company. [The rest of this page has been intentionally left blank] 14

20 7. RISK FACTORS The risk factors relating to the Proposed Disposal include but are not limited to the following: (i) Non-completion of the Proposed Disposal The completion of the Proposed Disposal is subject to the fulfilment of the Conditions Precedent as set out in Section of this Circular. In the event of non-fulfilment of any of the Conditions Precedent within the stipulated period, or any breach of the representations or warranties or failure to perform any covenant or agreement by the parties involved pursuant to the Option Deed and/or Contract, the Proposed Disposal may be delayed or terminated. In addition, should a delay or non-completion of the Proposed Disposal occur, TA Global Group may not realise the benefits that may accrue to it from the proposed utilisation of proceeds as disclosed in Section 4 of this Circular. In the event of a non-completion of the Proposed Disposal, our Group intends to continue with the proposed development on the Property which may expose our Group to the impacts and risks arising from the restrictions imposed on foreign property buyers in Australia pursuant to the Federal Budget announced on 9 May These restrictions as highlighted below were introduced to cool down the overheating Australian property market and may have a material impact on sales, apartment prices and development feasibilities for new residential development projects: (a) the introduction of an annual levy for Australian foreign owned vacant residential property; (b) capital gains tax on foreign investor purchases subsequently sold above AUD750,000; (c) inclusion of a condition in New Dwelling Exemption Certificates preventing developers from selling more than 50% of the total units in a particular development project to foreign purchasers; (d) increase in the annual land tax levy surcharge from 0.5% to 2% of the land value; and (e) increase in stamp duty surcharges for foreign buyers from 4% to 8% in the state of New South Wales, Australia. (ii) Contractual risks Our Company may be subjected to certain contractual risks such as specific performance as a result of non-fulfilment of its obligations under the Option Deed and/or Contract. Nevertheless, the Company endeavors to ensure full compliance of its obligations stipulated in the Option Deed and the Contract. (iii) Exchange rate risk The cash proceeds from the Proposed Disposal will be in AUD, and therefore, our Group is exposed to fluctuations in foreign exchange. Although the Group may seek to limit these risks by monitoring the exchange rate prior to repatriation of the funds to Malaysia, no assurance can be given that any change in the foreign currency rates will not have an adverse effect on the Group s cash proceeds received in RM. (iv) Loss of future earnings from the proposed development on the Property TABPL has obtained the license to undertake the construction of the Land as per Court Order (10672 of 2009) which was granted by and entered into with the Land and Environment Court of New South Wales on 23 December 2009 and 13 January 2010, respectively. Based on the estimation by our management, the proposed development of the Property will contribute approximately AUD73.55 million (equivalent to approximately RM million) to the earnings of our Group once completed and sold. Upon completion of the Proposed Disposal, our Group can no longer continue with the proposed development of the Property and may not realise the resultant earnings from it. 15

21 (v) Policies for foreign investments, taxation and profit repatriation The subsisting corporate tax rate in Australia is 30%. After fulfilling all tax and financial obligations towards the Australian government, no withholding tax is payable on after tax profits remitted from a branch office. Profits from an Australian subsidiary remitted to its offshore holding company as dividends will be subject to withholding tax to the extent to which the dividends are unfranked. Generally dividends will be franked to the extent they have been subjected to the 30% company tax rate albeit the dividend will need to be paid in the same (or later) year as the tax payment. Any change (including a change in interpretation) in tax legislation, including the imposition of new taxes or increases in tax rates, or any change in the tax treatment of assets or liabilities held by our Group may have an adverse impact on our Group s financial condition, results of operations and prospects. Barring any unforeseen circumstances, there are no other significant risk factors associated with the Proposed Disposal apart from non-completion of the Proposed Disposal, contractual risks, exchange rate risk, loss from future earnings from the proposed development on the Property and policies for foreign investments, taxation and profit repatriation. The Board has and will continue to use its best endeavors to ensure the completion of the Proposed Disposal and will take all reasonable steps to ensure that the Conditions Precedent of the Option Deed and/or Contract are fulfilled in a timely manner, to avoid delays or termination and to facilitate the completion of the Proposed Disposal. 8. APPROVALS REQUIRED The Proposed Disposal is subject to the following approvals being obtained: (i) (ii) our shareholders at our forthcoming EGM; and any other relevant authorities/parties, if required. 9. CORPORATE EXERCISES ANNOUNCED BUT PENDING COMPLETION AND INTER- CONDITIONALITY OF THE PROPOSED DISPOSAL Save for the Proposed Disposal which is the subject matter of this Circular, our Board is not aware of any other outstanding corporate proposal which has been announced but is pending implementation or completion by our Group as at the LPD. The Proposed Disposal is not conditional upon any other corporate proposals undertaken or to be undertaken by TA Global. 10. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM None of our directors and/or major shareholders and/or persons connected with them has any interest, direct or indirect, in the Proposed Disposal. 11. DIRECTORS STATEMENT AND RECOMMENDATION Our Board, after having considered all aspects of the Proposed Disposal including but not limited to the rationale and effects of the Proposed Disposal, is of the opinion that the Proposed Disposal is in the best interest of our Company and accordingly recommend you to vote IN FAVOUR of the resolution in respect of the Proposed Disposal to be tabled at our forthcoming EGM. 16

22 12. ESTIMATED TIME FRAME FOR COMPLETION Barring any unforeseen circumstances and subject to the fulfilment of the Conditions Precedent as set out in Section of this Circular, the Board expects the Proposed Disposal to be completed in January The indicative timetable of events in relation to the Proposed Disposal is set out below: Tentative date Events 22 November 2017 EGM Early December 2017 Execution of the Contract Early January 2018 Fulfilment of Conditions Precedent in the Contract Early January 2018 Completion of the Proposed Disposal 13. EGM Our EGM, the notice of which is set out in this Circular, will be held at 3 rd Floor, Wisma TA, No. 1A Jalan SS 20/1, Damansara Utama, Petaling Jaya, Selangor Darul Ehsan on Wednesday, 22 November 2017 at a.m., for the purpose of considering and if thought fit, passing with or without modifications, the resolution to give effect to the Proposed Disposal. If you are unable to attend and vote in person at our EGM, you should complete and return the enclosed Form of Proxy in accordance with the instructions provided thereon so as to arrive at the office of our Share Registrar, Tricor Investor & Issuing House Services Sdn Bhd at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur or alternatively Tricor Customer Service Centre, Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur, not less than 48 hours before the time set for holding our EGM. The lodging of the Form of Proxy will not, however, preclude you from attending our EGM and voting in person should you subsequently wish to do so. 14. FURTHER INFORMATION You are advised to refer to the Appendices set out in this Circular for further information. Yours faithfully, For and on behalf of our Board TA GLOBAL BERHAD KIMMY KHOO POH KIM Executive Director 17

23 LOCATION OF THE LAND APPENDIX I The locality of the Land and its surroundings are depicted in the following diagram: [The rest of this page has been intentionally left blank] 18

24 FURTHER INFORMATION ON THE PROPERTY APPENDIX II Further details of the Property which forms part of the Little Bay Cove Project are as follows: Details Development lot 2 Postal address 5-15 Cawood Avenue, Little Bay, New South Wales, Australia Development lot Galaup Street, Little Bay, New South Wales, Australia Development lot Lapwing Street, Little Bay, New South Wales, Australia Development lot Lapwing Street, Little Bay, New South Wales, Australia House lots 8-15 Development lot Solarch Avenue, Little Bay, New South Wales, Australia 19 Cawood Avenue, Little Bay, New South Wales, Australia Development lot 19 2R Solarch Avenue, Little Bay, New South Wales, Australia Development lot 20 Lot 20, Belbowrie Road, Little Bay, New South Wales, Australia Title land area (square meters / acres) 5,460 / ,007 / ,008 / ,701 / square meters (0.103 acres) for Lot 8 and 432 square meters (0.107 acres) for each Lot 9-15 (collectively total land area of 3,441.3 square meters (0.850 acres) 57,750 / ,116 / ,710 /3.388 Land tenure Freehold Category of land use Residential Reserve for public Road Encumbrance / charge Australia and New Zealand Banking Group Limited Existing use Vacant Playground and park Vacant The unaudited NBV for the Property as at 27 October 2017 is AUD million (equivalent to approximately RM million) while the market value is AUD million (equivalent to approximately RM million) as appraised by the Valuer. 19

25 FURTHER INFORMATION ON THE PROPOSED DEVELOPMENT ON THE PROPERTY APPENDIX III To date, no sale has been launched and no construction work has commenced on the development projects on the Property as tabulated below. The details of the proposed development projects are as follows: 1. Development lots 2, 3, 4 and 7 and house lots 8, 9, 10, 11, 12, 13, 14 and 15 Details Development Lot 2 Development Lots 3 and 4 Development Lot 7 House lots 8-15 Type of proposed development^ Proposed construction of multidwelling housing development with roof terraces, containing 33 dwellings, basement parking for 50 vehicles, at grade parking for 8 vehicles, landscaping and associated works Proposed construction of 66 units of 2 and 3 storey terrace dwellings with basement parking for 132 vehicles, landscaping and associated works Proposed development of 76 units of apartment* 8 units of bungalow lots for sale Approvals obtained The license to undertake the construction of the Land as per Court Order (10672 of 2009) was granted by and entered into with the Land and Environment Court of New South Wales on 23 December 2009 and 13 January 2010, respectively. Planning consent The Development Consent (DA/39/2016) was obtained on 29 June 2016 from Randwick City Council and will lapse on 29 June The Development Consent (DA/495/2011) was obtained on 5 October 2011 from the Randwick City Council and has lapsed on 5 October 2016 # The pre-development Approval has been submitted on 6 October 2016 to Randwick City Council and is currently pending approval + Not applicable Planning condition(s) There are no specific conditions imposed other than the normal conditions imposed by Randwick City Council for every other development projects in New South Wales There are no specific conditions imposed other than the normal conditions imposed by Randwick City Council for every other development projects in New South Wales Not applicable as planning consent has not been obtained as at the date of this Circular Not applicable Notes: * Based on the Master Planned Residential Estate, development lot 7 is originally proposed to be 57 units of apartment. However, based on the pre-development Approval which was submitted on 6 October 2016, development lot 7 is proposed to be 76 units of apartment. 20

26 FURTHER INFORMATION ON THE PROPOSED DEVELOPMENT ON THE PROPERTY (cont d) APPENDIX III ^ Based on the license to undertake the construction of the Land as per Court Order (10672 of 2009) which was granted by and entered into with the Land and Environment Court of New South Wales on 23 December 2009 and 13 January 2010, The final construction, sales and marketing details of the detailed proposed development project on development lot 2 has not been finalised by the management of TA Global as at to date. # The management of TA Global is exploring and reviewing a design change to the approved development plan which has lapsed and will apply for new planning consent from Randwick City Council when the new revised development plan is finalised. + The pre-development order has been reviewed and commented by Randwick City Council, the final details of the proposed development plan on development lot 7 based on the comments from Randwick City Council are in progress and will be submitted to the Randwick City Council when it is finalised. 2. Development lot 18* Details Proposed development lot 21 Type of proposed development : Proposed development of 73 units of apartments Proposed development lot 22 Proposed development of 18 units of court yard homes Proposed development lot 23 Proposed development of 42 units of apartments Proposed development lot 24 Proposed development of 41 units of apartments Proposed house lots units of bungalow lots for sale Approvals obtained : The license to undertake the construction of the Land as per Court Order (10672 of 2009) was granted by and entered into with the Land and Environment Court of New South Wales on 23 December 2009 and 13 January 2010, respectively. Planning consent : Nil Not applicable Planning conditions : Not applicable as planning consent has not been obtained as at the date of this Circular Not applicable Note: * Development lot 18 is proposed to be subdivided into the following: (i) Development lots 21, 22, 23 and 24; (ii) House lots 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41 and 42; and (iii) Lots 43 and 44 as public reserve area for park and roads, respectively. 21

27 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) JM2:JM / October 2017 Board of Directors TA Little Bay Pty Ltd 27 O Connell Street Sydney NSW 2000 Dear Sirs, VALUATION CERTIFICATE OF 5-15 CAWOOD AVENUE, 1-15 GALAUP STREET, 2-14 LAPWING STREET, 3-17 LAPWING STREET, 7-21 SOLARCH AVENUE, 19 CAWOOD AVENUE, 2R SOLARCH AVENUE AND LOT 20 BELBOWRIE ROAD, LITTLE BAY, NEW SOUTH WALES AUSTRALIA ( SUBJECT PROPERTY ). This Valuation Certificate has been prepared for TA Global Berhad, the holding company of TA Little Bay Pty Limited for inclusion in the circular to the shareholders of TA Global Berhad in connection with the proposed disposal of the Subject Property by TA Little Bay Pty Limited, a wholly-owned subsidiary of TA Global Berhad. In accordance with the instructions from TA Little Bay Pty Limited to value the subject property, we have undertaken an inspection on 14 August 2017 and the date of valuation is 14 August The basis of valuation is to assess the Market Value of the subject property as a parcel of freehold land. Market Value is defined as being "...the estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm s length transaction, after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion". This Valuation Certificate and associated Valuation Report have been prepared in accordance with the relevant provisions of the Asset Valuation Guidelines issued by the Securities Commission Malaysia together with the relevant provisions of the Australian and New Zealand Valuation and Property Standards. Liability limited by a scheme approved under Professional Standards Legislation m3property (NSW) Pty. Ltd. ABN Level 23, MLC Centre, 19 Martin Place Sydney NSW 2000 Telephone Facsimile info@m3property.com.au 22

28 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) Summary of Assumptions Critical Assumptions In providing this valuation we note that development site values are highly sensitive to any change in market conditions. As such care, should be taken where long term passive lending is being undertaken against development sites which do not benefit from a Development Consent and/or presales to be developed in the immediate future. We recommend that regular valuation updates are undertaken. The encumbrances that are detailed within this report have been considered in our assessment of Market Value. If there are any encumbrances, encroachments, restrictions, leases or covenants which are not noted in this report, they may affect our assessment. If any such matters are known or discovered, we should be advised and asked as to whether they affect our assessment. The valuation is based on the critical condition that the government holds no requirements of the land. In undertaking this valuation assessment, we have not commissioned a search of the Register of Native Title Claims which is administered by the National Native Title Tribunal. This valuation assumes that there are no current or pending claims which will affect the subject property. In undertaking this valuation we have not made any searches in relation to current violations of the subject property. Our inquiries with Randwick City Council were unable to confirm if flooding is an issue with the subject property without formal written application. From our inspection, it would not appear that the site is affected by flooding and for the purposes of this valuation, we have assumed that the subject property is not flood liable. We have physically identified the boundaries of the property on inspection and there do not appear to be any encroachments. We are not qualified surveyors and we have been provided with a plan of subdivision prepared by Tasy Moraitis referenced Sub 2 dated 8 May If there is any doubt in respect of these issues, we recommend that a further check survey be undertaken by a qualified surveyor and that the survey be sent to us for advice as to whether our assessment of value is affected. The planning information set out in this report has been obtained via the internet site of Randwick City Council. We have relied upon this information in assessing the value of the property. No responsibility is accepted for the accuracy of that information and if it is wrong in any significant respect, our assessment of value may be different. Should you have concerns regarding the validity of this information we would recommend that a formal enquiry be made with the appropriate authority. We have been provided with site audit reports prepared by ENVIRON Australia Pty Ltd referenced project number AS dated September 2012 and May The reports conclude that based on the results of the remediation and validation works conducted the site is considered to be suitable for the proposed land use. Our valuation is made on the assumption that there are no environmental problems in any way affecting the property, including surface or below ground conditions, toxic or hazardous wastes or building material hazards. Any such matters may adversely affect the property or its use and our assessment of value. Should any such matters be known or discovered no reliance should be placed on our assessment of value unless we have been advised of these matters and we have confirmed that our assessment is not affected. In undertaking our valuation, we have relied upon various financial and other information submitted by TA Little Bay Pty Limited. Where possible, within the scope of our retainer to complete a valuation report and limited to our expertise as valuers, we have reviewed this information including by analysis against industry standards. However, our enquiries are necessarily limited by the nature of our role and we do not warrant that we have identified or verified all the matters which a full audit, extensive examination or due diligence investigation might disclose. For the purpose of our valuation assessment, we have assumed that this information is correct. Such limitations within our scope of work are not deemed to be extraordinary in the context of a valuer in Australia. Due to the impact that any variation of construction costs has on the development profit margin, and in turn the residual land value, we recommend a quantity surveyor review potential building plans and provide a detailed costing assessment. We have based our adopted construction costs on published construction costs guides such as Rawlinsons Australian Construction Handbook 2017 together with our knowledge of development costs generally for similar projects in Sydney s Eastern suburbs. We are not professionals in development costings and reserve the right to review our valuation should a quantity surveyors report indicate construction costs which materially differ to those adopted herein. Page 2 23

29 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) Critical Assumptions (continued) We have relied on a schedule of areas and building plans prepared by Hill Thalis Architecture + Urban Projects, Candalepas Associates and McGregor Partners referenced Stage 1 Plan Revision D dated August 2009, together with a schedule of areas and building plans prepared by Smart Design Studio referenced DA:003 Issue A DA:680 dated 27 November 2015 and building plans prepared by SJB Architects referenced AR-0102/08 AR-9101/08 dated 2011 for our valuation calculations under the approved schemes (10672 of 2009) and (DA/39/2016). We reserve the right to review and possibly amend our valuation should a formal survey of the completed development reflect areas different to those adopted within our valuation. We have adopted the General Tax Rule method for remittance of GST on the sale of the completed residential dwellings and residential house lots, that is, 1/11th of the adopted GST inclusive gross realisation. Should this prove to be incorrect based on further advice from the applicant or their accountant we reserve the right to review and possibly amend our valuation. We have assumed that if the site is sold all intellectual material associated with the current Court Order (10672 of 2009), Development Consent (DA/39/2016) and former Development Consent (DA/495/2011) is transferable. Good and marketable strata title, free from any encumbrances being available for residential dwellings on completion of the development and residential house lots. Subject to an occupation certificate being granted upon completion of the proposed development. We have assumed that the development will be completed applying good building practice, finished in a workmanlike manner and in accordance with all Local Council, State and Federal regulations. 1. PROPERTY Category Vacant Land. Fee simple subject to vacant possession. Title Details / Description / Site Area / Zoning The subject property is registered under fifteen (15) Certificates of Title, being Lot 2, 3, 4, 7, 8, 9, 10, 11, 12, 13, 14, 15, 18, 19, 20 in Deposited Plan TA Little Bay Pty Limited is registered on all the titles as the Sole Proprietor. The property is irregular in shape located at 5-15 Cawood Avenue, 1-15 Galaup, 2-14 Lapwing Street, 3-17 Lapwing Street, 7-21 Solarch Avenue, 19 Cawood Avenue, 2R Solarch Avenue and Lot 20 Belbowrie Road. Total site area 98,193.3 square metres (approximately acres). Pursuant to the provisions of the Randwick Local Environmental Plan 2012, the property is subject to the R1 General Residential. Page 3 24

30 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) Locality The subject property shape is located at 5-15 Cawood Avenue, 1-15 Galaup, 2-14 Lapwing Street, 3-17 Lapwing Street, 7-21 Solarch Avenue, 19 Cawood Avenue, 2R Solarch Avenue and Lot 20 Belbowrie Road, within the suburb of Little Bay. The suburb of Little Bay is located approximately twelve (12) kilometres south of the Sydney Central Business District ( CBD ). Surrounding development within the immediate vicinity generally consists of the Prince Henry Estate, incorporating a mixture of medium density apartment developments, townhouses, courtyard homes and single residential dwellings. Other developments within the region comprise predominantly low density residential dwellings. Adjoining the northern boundary of the subject site is an older style medium density development owned by the Department of Housing and utilised for public housing. Improvements The existing improvements to the site are vacant super lots and house lots with all road infrastructure, public reserves, community property and services having been completed together with existing Court Order (10672 of 2009) and Development Consent (DA/39/2016). Planning Approval The development application process for the parent site which the subject property forms part of is summarised in the following table. Court Order (10672 of 2009) Case Number of 2009 Description Masterplan and Stage 1 works, including earthworks and subdivision into twenty-eight (28) lots and ten (10) super lots. Status Approved Date Made or Given 23 December 2009 Date Entered 13 January 2010 Further to Court Order (10672 of 2009) we note that Lot 2 (5-15 Cawood Avenue) benefits from Development Consent (DA/39/2016) summarised in the following table. Development Consent (DA/39/2016) DA Number 39/2016 Description Construction of part two (2)/part three (3) storey multi-dwelling housing development with roof terraces, containing thirty-three (33) dwellings, basement parking for fifty (50) vehicles, at grade parking for eight (8) vehicles, landscaping and associated works (variation to floor space ratio control). Status Approved Determination Date 29 June 2016 Consent to Operate From 29 June 2016 Consent to Lapse on 29 June 2021 Page 4 25

31 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) Lastly, further to Court Order (10672 of 2009) and Development Consent (DA/39/2016) we note that Lots 3 & 4 (1-15 Galaup Street and 2-14 Lapwing Street) previously benefited from Development Consent (DA/495/2011) summarised in the following table. Development Consent (DA/495/2011) DA Number 495/2011 Description Construction of sixty-six (66) x two (2) and three (3) storey terrace dwellings with basement parking for 132 vehicles, landscaping and associated works. Status Approved Determination Date 5 October 2011 Consent to Operate From 5 October 2011 Consent to Lapse on 5 October 2016 The approvals are subject to a number of conditions, most of which are considered to be standard for this type of development. The approved scheme provides for the following apportionment of Gross Floor Area (GFA) and Net Saleable Area (NSA): Lot No. Component GFA (m²) NSA (m²) 2 Residential Townhouses 4,990 4,990 3 & 4 Residential Townhouses 10,322 10,322 7 Residential Apartments 6,150 5, Residential Apartments 6,962 5, Courtyard Homes 3,999 3, Residential Apartments 4,600 3, Residential Apartments 7,000 5, Residential Houses 1,728 1, Residential Houses 2,401 2, Residential Houses 1,938 1,938 Total - 50,091 46,428 Page 5 26

32 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) 2. VALUATION DETAILS Valuation Approaches There are two (2) main valuation approaches that may be employed in determining the value of the subject property. They are the residual land value and direct comparison approaches. The particular method used is dependent upon the relevance of the approach to the property and the development, the quantity and quality of the available market data and the motivations of buyers and sellers in the market place. The valuation approaches adopted are outlined as follows: Residual Land Value Approach The Residual Land Value model is based upon explicit assumptions regarding the prospective cash flows which will arise from the development or ownership of the subject property. It involves the establishment of the net position which will be derived through the development or ownership of the subject property, it will take account of the projected gross realisation; but will not account for escalations in revenue or cost. A Profit and Risk (P&R) factor is applied to the net position derived after the deduction of selling/marketing costs and GST. This factor is a reflection of the required return and risk profile of the property and is derived through analysis of market evidence and the risk profile considerations of the proposed development. It is a static factor providing a required return for the life of the project and does not represent an annual return. Relevant development, holding, interest and acquisition costs are then deducted from the net realisation resulting in an estimate of the current feasible market value of the subject property. Page 6 27

33 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) Direct Comparison Approach The direct comparison method for development land has regard to sales of broadly similar properties transacted in the open market and compares these sales to the subject property having regard to factors including but not limited to: Prevailing market conditions with specific consideration to potential apartment pricing, sale rates and development costs. Land area and potential densities/unit yield. Zoning status under the Local Authority Town Planning Scheme. Development Approvals. Likely scheme cost contributions where applicable. Access and proximity to local transport corridors including motorways and public transport facilities. Immediate competition and profile of developers active within the general localities. Servicing constraints. Environmental constraints. Metropolitan or regional location. Typically, sales are analysed on a rate per equivalent unit site or rate per square metre of Gross Floor Area basis, and an appropriate rate is attributed to the subject property having regard to the considerations outlined above. The direct comparison approach is adopted for assessing our As Is value and As If Complete value. Page 7 28

34 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) 3. RESIDUAL LAND VALUE APPROACH 3.1 AS IF COMPLETE" MARKET VALUE Apartment Sales ILLUME 1406 Anzac Parade LITTLE BAY NSW Development Consent Status Average Rate ($/m²) Yes Marketed off the plan $9,222 - $15,000 Analysis We note that the property benefits from Development Consent (DA/812/2011) for the construction of three (3) x five (5) storey residential flat buildings containing 179 apartments. Basement parking for 226 vehicles and associated landscaping works. Forms an earlier stage of the approved masterplan being undertaken by TA Little Bay Pty Limited. We note that the sales were achieved in late-2015 with market conditions having continued to improve since this time. As such we consider the prices achieved as being below those applicable to the subject apartments. 1-5 Solarch Avenue LITTLE BAY NSW Development Consent Status Average Rate ($/m²) Yes Completed $8,890 - $14,583 Forms a circa May 2016 completed residential development, occupying a corner position with frontages to both Solarch Avenue and Anzac Parade, within Little Bay. Analysis Forms an earlier stage of the approved masterplan being undertaken by TA Little Bay Pty Limited. We consider the prices achieved as being below those applicable to the subject apartments given the location of the development to the western alignment of the parent site. 2-4 Gubbuteh Road LITTLE BAY NSW Development Consent Status Average Rate ($/m²) Yes Completed $10,221 - $16,500 Forms a circa September 2011 completed residential development, occupying a corner position with frontages to both Gubbuteh Road and Anzac Parade, within Little Bay. Analysis Residential development located within proximity of the subject property in a slightly inferior location with frontage to Anzac Parade which has high levels of passing vehicular traffic. The sales outlined above form second hand resales and as such we consider the prices achieved as being below those applicable for the subject apartments given they provide a new product offering. Page 8 29

35 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) 1-3 Jenner Street LITTLE BAY NSW Development Consent Status Average Rate ($/m²) Yes Completed $10,366 - $16,234 Forms a circa September 2014 completed residential development, occupying a corner position with frontages to both Jenner Street and Anzac Parade, within Little Bay. Analysis Residential development located within proximity of the subject property in a slightly inferior location with frontage to Anzac Parade which has high levels of passing vehicular traffic. The sales outlined above form second hand resales and as such we consider the prices achieved as being below those applicable for the subject apartments given they provide a new product offering. 1-3 Gubbuteh Road LITTLE BAY NSW Development Consent Status Average Rate ($/m²) Yes Completed $10,784 - $13,897 Forms a circa February 2012 completed residential development, occupying a corner position with frontages to both Gubbuteh Road and Anzac Parade, within Little Bay.. Analysis Residential development located within proximity of the subject property in a slightly inferior location with frontage to Anzac Parade which has high levels of passing vehicular traffic. The sales outlined above form second hand resales and as such we consider the prices achieved as being below those applicable for the subject apartments given they provide a new product offering. 33 Harvey Street LITTLE BAY NSW Development Consent Status Average Rate ($/m²) Yes Completed $11,325 - $15,454 Forms a circa November 2015 completed residential development, located on the southern alignment of Harvey Street, within Little Bay. Analysis Residential development located within proximity of the subject property in a slightly inferior location to the southern end of the Prince Henry Estate. The sales outlined above form second hand resales and as such we consider the prices achieved as being below those applicable for the subject apartments given they provide a new product offering. Page 9 30

36 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) Residential Townhouse Sales 5/29-31 Victoria Street MALABAR NSW Sale Date Sale Price Rate ($/m²) Apr-17 $1,800,000 $13,846 Comprises a two (2) storey residential townhouse which includes three (3) bedrooms, two (2) bathrooms, separate living and dining rooms, kitchen and a two (2) car lockup garage. The property also includes an external terrace area. The townhouse was completed circa 2001 and presents in good condition including a high level of finishes. Analysis Older townhouse within an inferior location. Consider the price achieved as being slightly below those applicable to the subject townhouses and below the subject courtyard homes. 9 Gubbuteh Road LITTLE BAY NSW Sale Date Sale Price Rate ($/m²) Feb-16 $2,000,000 $8,696 Comprises a double storey residential townhouse which includes five (5) bedrooms, three (3) bathrooms, separate living and dining rooms, kitchen, together with a one (1) car lock-up garage. The townhouse was originally completed circa 2007 and presents in good condition including a high level of finishes. Analysis Modern townhouse within a comparable location. Consider the price achieved as being broadly indicative of those applicable to the subject townhouses and below the subject courtyard homes. 11/19 Brodie Avenue LITTLE BAY NSW Sale Date Sale Price Rate ($/m²) Oct-16 $1,680,000 $10,839 Comprises a double storey residential townhouse which includes three (3) bedrooms, two (2) bathrooms, combined living and dining room, kitchen, together with a single car lock-up garage. The townhouse presents in good condition including a high level of finishes. Analysis Modern townhouse within a comparable location. Consider the price achieved as being slightly below those applicable to the subject townhouses and below the subject courtyard homes. Page 10 31

37 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) 36/27 Brodie Avenue LITTLE BAY NSW Sale Date Sale Price Rate ($/m²) Jul-16 $1,650,000 $10,577 Comprises a double storey residential townhouse which includes three (3) bedrooms, two (2) bathrooms, combined living and dining room, kitchen, together with a two (2) car lock-up garage. The townhouse was originally completed circa 2012 and presents in good condition including a high level of finishes. Analysis Modern townhouse within a comparable location. Consider the price achieved as being slightly below those applicable to the subject townhouses and below the subject courtyard homes. 31 Brodie Avenue LITTLE BAY NSW Sale Date Sale Price Rate ($/m²) Apr-16 $1,485,000 $6,689 Comprises a two (2) storey residential townhouse which includes three (3) bedrooms, two (2) bathrooms, combined living and dining room, kitchen and a two (2) car lockup garage. The property also includes an external courtyard area. The townhouse presents in good condition including a high level of finishes. Analysis Modern townhouse within a comparable location. Consider the price achieved as being below those applicable to the subject townhouses and courtyard homes Cove Circuit LITTLE BAY NSW Development Consent Status Average Rate ($/m²) Yes Completed $7,745 - $8,709 Forms a circa September 2010 completed residential townhouse development, occupying a corner position with frontages to both Cove Circuit and Bunnerong Road, within Little Bay. Analysis Residential development located within proximity of the subject property in an inferior location. The sales outlined above form second hand resales and as such we consider the prices achieved as being below those applicable for the subject townhouses and courtyard homes given they provide a new product offering. Page 11 32

38 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) Residential Land Sales Address Sale Date Sale Price Site Area (m²) No. Bedrooms Rate ($/m²) 4 Meyler Close LITTLE BAY NSW Jun-16 $2,330, $3,789 Analysis Comprises a vacant land sale with the site area extending to approximately 615 square metres, occupying a corner position with frontages to both Meyler Close and Ewing Avenue, within Little Bay. Larger land area being located within proximity of the subject in a comparable location. Consider the price achieved as being above that applicable to the subject house lots given that they incorporate smaller land areas. Address Sale Date Sale Price Site Area (m²) No. Bedrooms Rate ($/m²) 69 Dwyer Avenue LITTLE BAY NSW May-16 $1,881, $3,099 Analysis Comprises a single level freestanding residential house which includes three (3) bedrooms, single bathroom, WC, laundry, living room, dining room and kitchen. Incorporates timber construction together with tile roof and presents in poor condition. Larger land area being located within proximity of the subject in an inferior location. Consider the price achieved as being broadly indicative to those applicable for the subject house lots. Address Sale Date Sale Price Site Area (m²) No. Bedrooms Rate ($/m²) 32 Dampier Street CHIFLEY NSW Nov-16 $1,965, $3,018 Analysis Comprises a single level freestanding residential house which includes three (3) bedrooms, single bathroom, laundry, living room, dining room and kitchen together with a single car lock-up garage. The dwelling presents in poor condition. Larger land area being located within proximity of the subject in an inferior location. Consider the price achieved as being broadly indicative to those applicable for the subject house lots. Address Sale Date Sale Price Site Area (m²) No. Bedrooms Rate ($/m²) 41 Wassell Street CHIFLEY NSW Apr-17 $1,870, $2,899 Analysis Comprises a single level freestanding residential house which includes four (4) bedrooms, two (2) bathrooms including laundry, living room, dining room and kitchen together with double car lock-up garage. Incorporates brick and weatherboard construction together with tile roof and presents in poor condition. Larger land area being located within proximity of the subject in an inferior location. Consider the price achieved as being broadly indicative to those applicable for the subject house lots. Address Sale Date Sale Price Site Area (m²) No. Bedrooms Rate ($/m²) 6 Giles Street CHIFLEY NSW Apr-17 $2,200, $3,514 Analysis Comprises a single level freestanding residential house which includes three (3) bedrooms, one (1) bathroom including laundry, living room, dining room and kitchen together with a single car lock-up garage. Incorporates weatherboard construction together with tile roof and presents in poor condition. Larger land area being located within proximity of the subject in an inferior location. Consider the price achieved as being above that applicable to the subject house lots given that they incorporate smaller land areas. Page 12 33

39 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) 3.2 GROSS REALISATION ASSESSMENT In assessing a value for the house lots and the proposed subject apartments As If Complete, we have had regard to the sales evidence and our comments previously detailed. Our assessed gross realisation for the proposed subject dwellings is summarised below as follows. Lot No. No. Lots/Dwellings Average Site Area/Internal Area (m²) Average Value Average Rate ($/m²) Total Value House Lots 8-15 & Proposed House Lots $1,973,077 $4,228 $51,300,000 Lot $1,795,455 $11,874 $59,250,000 Lots 3 & $1,822,727 $11,655 $120,300,000 Lot $1,239,035 $13,491 $70,625,000 Proposed Lot $1,143,836 $14,081 $83,500,000 Proposed Lot $2,400,000 $10,802 $43,200,000 Proposed Lot $1,311,585 $13,701 $53,775,000 Proposed Lot $2,378,571 $16,762 $99,900,000 Total $1,758,036 $12,074 $581,850,000 Overall, our assessed value for the residential apartment component of the proposed scheme As If Complete equates to $581,850,000 inclusive of GST. Page 13 34

40 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) 3.3 RESIDUAL CASH FLOW ANALYSIS Feasibility Assumptions Our residual cash flow analysis for the proposed development at the subject property has been prepared based on information provided. Our cash flow projections are forecasts based on available information and are exposed to fluctuating economic conditions. Page 14 35

41 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) The cash flow analysis has been prepared on the following data: Feasibility Assumptions Sale Assumptions Site Area (m²) 98,193.3 m² Proposed Development Residential Dwellings 330 Residential Lots 26 Total 356 Gross Realisation Residential (inclusive of GST) $581,850,000 Total Gross Realisation (inclusive of GST) $581,850,000 Rate of Sale Per Month Residential House Lots 8-15 & (Lots/Month) 2 Rate of Sale Per Month Residential Townhouses - Lot 2 (Post Construction/Month) 2 Rate of Sale Per Month Residential Townhouses - Lots 3 & 4 (Post Construction/Month) 2 Rate of Sale Per Month Residential Apartments - Lot 7 (Post Construction/Month) 2 Rate of Sale Per Month Residential Apartments - Lot 21 (Post Construction/Month) 2 Rate of Sale Per Month Residential Courtyard Homes - Lot 22 (Post Construction/Month) 1 Rate of Sale Per Month Residential Apartments - Lot 24 (Post Construction/Month) 2 Rate of Sale Per Month Residential Apartments - Lot 23 (Post Construction/Month) 1 % of Presales and Construction Sales - Residential Townhouses - Lot 2 75% 25 % of Presales and Construction Sales - Residential Townhouses - Lots 3 & 4 75% 50 % of Presales and Construction Sales - Residential Apartments - Lot 7 75% 43 % of Presales and Construction Sales - Residential Apartments - Lot 21 75% 55 % of Presales and Construction Sales - Residential Courtyard Homes - Lot 22 75% 14 % of Presales and Construction Sales - Residential Apartments - Lot 24 75% 31 % of Presales and Construction Sales - Residential Apartments - Lot 23 75% 32 Selling Costs (inclusive of GST) 2.48% GST on Gross Realisations (Residential) $52,895,455 Cost Assumptions Acquisition Costs (inclusive of GST) As a % of Total Net Revenue 2.67% GST on Construction 10.00% Construction Costs Excluding Contingency (inclusive of GST) $184,140,000 Construction Costs Including Contingency (inclusive of GST) $193,347,000 Construction Cost Per Dwelling Including Contingency (inclusive of GST) $543,110 Finance Costs 6.00% Statutory Fees $2,295,386 Rates and Taxes Per Annum $1,900,000 $/Dwelling $5,337 Page 15 36

42 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) Feasibility Assumptions (continued) Timing Assumptions Lead in Time Before Construction Post Settlement - Residential Townhouses - Lot 2 3 months Lead in Time Before Construction Post Settlement - Residential Townhouses - Lots 3 & 4 6 months Lead in Time Before Construction Post Settlement - Residential Apartments - Lot 7 12 months Lead in Time Before Construction Post Settlement - Residential Apartments - Lot months Lead in Time Before Construction Post Settlement - Residential Courtyard Homes - Lot months Lead in Time Before Construction Post Settlement - Residential Apartments - Lot months Lead in Time Before Construction Post Settlement - Residential Apartments - Lot months Settlement on Land Purchase 3 months Construction Period - Residential Townhouses - Lot 2 16 months Construction Period - Residential Townhouses - Lots 3 & 4 22 months Construction Period - Residential Apartments - Lot 7 16 months Construction Period - Residential Apartments - Lot months Construction Period - Residential Courtyard Homes - Lot months Construction Period - Residential Apartments - Lot months Construction Period - Residential Apartments - Lot months Selling Period 46 months Settlement on Sales 1 month Total Project Period 49 months Terms on Sale Deposit 10% Balance 3 months 90% Targets Development Margin 20.00% Internal Rate of Return (Including Interest) 12.00% Page 16 37

43 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) The main components to the residual land value feasibility are as follows: Component Land Transaction Costs Professional Fees Construction Costs Statutory Fees and Contributions Land Holding Costs Selling Costs Interest Charges Finance Charges Hurdle Rates Gross Realisation Escalation Rates Project Timing Comment Includes Stamp Duty (6.9% New South Wales Government Office of State Revenue) on acquisition and costs associated with the assumed purchaser due diligence. Costs predominantly associated with the initial planning and pre-construction works, together with a development management fee. Due to the impact that any variation of construction costs has on the development profit margin, and in turn the residual land value, we recommend a quantity surveyor review potential building plans and provide a detailed costing assessment. We have based our adopted construction costs on published construction costs guides such as Rawlinsons Australian Construction Handbook 2017 together with our knowledge of development costs generally for similar projects in Sydney s Eastern suburbs. We are not professionals in development costings and reserve the right to review our valuation should a quantity surveyors report indicate construction costs which materially differ to those adopted herein. Fees payable to Council and other statutory authorities such as Section 94 contributions and general charges. Land tax, water rates and Council rates. These costs are incorporated into the cash flow on a proportional diminishing basis in line with the assumed sale of the development. Costs associated with the sale of the completed residential dwellings and residential house lots, including sales agent s commission, project marketing fees, title registration costs and conveyancing expenses. Based on 100% debt funding, the interest rate is adopted on a nominal basis assuming a senior debt facility only as per standard industry practice. Associated finance costs including loan establishment fees and stamp duty payable or mortgage. Profit and Risk Factor is utilised in the static approach and represents the target development margin representing a percentage of total development costs (net of selling costs). Internal Rate of Return is utilised in the discounted cash flow approach and represents the target developers margin (or discount rate) on cash flow that includes financing costs but excludes interest. Represents the GST inclusive sales revenue for the completed residential dwellings and residential house lots. We note that there are a large number of key variables involved in achieving sale prices into the future and draw your attention to this fact. As such, we stress that our estimate of Gross Realisation As If Complete represents current values as at the date of valuation. No escalation is incorporated into the cash flow for neither development costs nor sales revenues. The adopted costs and revenues are reflective of market levels as at the date of valuation. Relates to our allowances for the construction period of the proposed development together with the assumed sales period for the proposed development. Page 17 38

44 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) Component Goods and Services Tax (GST) Comment Construction costs, professional fees, due diligence costs and selling costs have been incorporated into the cash flow on a GST inclusive basis, with an input tax credit reclaimed the month following where the cost was incurred. Stamp duty on acquisition, statutory fees and contributions, land holding costs, interest charges and finance charges do not attract the GST impost and have been incorporated on a GST exclusive basis. We have adopted the General Tax Rule method for remittance of GST on the sale of the completed residential dwellings and residential house lots, that is, 1/11th of the adopted GST inclusive gross realisation. Should this prove to be incorrect based on further advice from the applicant or their accountant we reserve the right to review and possibly amend our valuation. Page 18 39

45 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) Residual Cash Flow Summary The following is a summary of our analysis, assuming 100% debt funding. Residual Cash Flow Summary Gross Realisation $581,850,000 Less Selling 2.48% $12,786,341 GST Based on General Tax Rule (Residential) $52,895,455 $65,681,795 Net Realisation $516,168,205 Less Profit & Risk 20.00% $86,216,804 Funds Available for Development $429,951,401 Less Professional Fees $3,866,940 Construction Cost (Including Contingency) $193,347,000 Statutory Fees $2,295,386 Land Holding Costs $5,542,527 Pre-Sale Commissions $4,400,279 Finance Charges $1,000, % $34,818,925 Land Transaction Costs $13,793,909 Add GST Input Credits $19,538,566 $239,526,400 Indicated Value (exclusive of GST) $190,425,000 Rounded to (exclusive of GST) $190,425,000 Indicated Value excl. of GST $190,425,000 Profit After Interest $86,216,804 Development Margin 20.00% IRR Including Interest 11.99% IRR Excluding Interest 16.95% $/m² of GFA $3,802/m² $/Equivalent Unit $/m² of Site Area $534,902/unit $1,939/m² Our assessed value of $190,425,000 exclusive of GST is specific to the project and is based on our assumptions and information provided with our instructions. Should this information or the assumptions alter, it will impact on the assessment. Page 19 40

46 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) 4 DIRECT COMPARISON APPROACH 4.1 DEVELOPMENT SALES EVIDENCE Hill Road Site 14A Hill Road WENTWORTH POINT NSW 14A Hill Road, Wentworth Point forms a late-2016 mixed-use development site sale located to the north-west of the subject property in an inferior location. The site is zoned part R4 High Density Residential and RE1 Public Recreation in accordance with the Auburn Local Environmental Plan The site doesn t currently benefit from a Development Consent however a peninsular concept scheme has been prepared which provides for the development of seven (7) separate residential buildings ranging from one (1) to nineteen (19) storeys including approximately 2,030 residential apartments within approximately 188,245 square metres of GFA which we have adopted for the purpose of our analysis. In comparison with the subject property, this development site is located within an inferior location (40% premium), is of a significantly larger scale (40% premium) and doesn t benefit from a Development Consent (10% premium) therefore a total premium rate of 90% has been applied and is reflected in our analysed rate. 90% premium $3,633/m² of GFA Victoria Road and 4-6 Wharf Road, MELROSE PARK NSW Victoria Road and 4-6 Wharf Road, Melrose Park forms an early-2016 sale of a larger scale mixed use development site. It comprises an irregular shaped mixed use development site, occupying a corner position with frontages to both Victoria Road and Wharf Road, within Melrose Park. The site is located within proximity of the subject property in an inferior location within the Parramatta Local Government Area (LGA). The primary frontage of the site to Victoria Road receives high levels of exposure to passing vehicular traffic. The site is zoned B4 Mixed Use in accordance with the Parramatta Local Environmental Plan 2011 and it is sold without development consent. We note that the site was purchased off-market by Payce Consolidated Limited who is an adjoining land owner and as such have paid a premium above market in order to secure this strategic land holding. In comparison with the subject property, this development site is located within an inferior location (60% premium), is of a significantly larger scale (30% premium) and doesn t benefit from a Development Consent (10% premium) therefore a total premium rate of 100% has been applied and is reflected in our analysed rate. 100% premium $3,512/m² of GFA. Page 20 41

47 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) 47 Spurway Drive BAULKHAM HILLS and 30 Fairway Drive KELLYVILLE NSW 47 Spurway Drive, Baulkham Hills and 30 Fairway Drive, Kellyville forms a late-2015 residential development site sale located to the north-west of the subject property in an inferior location. The site sold without the benefit of a Development Consent and is significantly larger in scale as compared to the subject property. The site is zoned part R4 High Density Residential, RE2 Private Recreation and SP2 Infrastructure in accordance with The Hills Local Environmental Plan The site sold without development consent however the zoning allows for an FSR of part 1.5:1, 2.6:1 and 3.2:1 varying height limits of eighteen (18), twenty-one (21), twenty-seven (27) and thirty-six (36) metres respectively. Furthermore, we note that the site is identified as a Key Site Area B which having regard to Clause 7.11 means that the consent authority may consent to the erection of residential flat buildings on the land containing a maximum of 1,300 dwellings which we have adopted or the purpose of our analysis. We have calculated the maximum permissible GFA of the site to be approximately 133,000 square metres. We note that the property sold offmarket. In comparison with the subject property, this development site is located within an inferior location (40% premium), is of a significantly larger scale (35% premium) and doesn t benefit from a Development Consent (10% premium) therefore a total premium rate of 85% has been applied and is reflected in our analysed rate. 85% premium $2,921/m² of GFA. 32 Page Street PAGEWOOD NSW 32 Page Street, Pagewood forms a late-2015 mixed-use development site sale located to the north-west of the subject property in an inferior location. The site sold with Development Consent (14/080) for the remediation of site, removal of existing vegetation and construction of thirty-five (35) townhouses ranging from two (2) to three (3) storeys along Page and Holloway Street, and two (2) six (6) storey residential flat buildings comprising 221 residential apartments together with two (2) storey commercial building for future business park uses, above ground parking for 463 vehicle, associated landscaping and public domain works. In comparison with the subject property, this development site is located within an inferior location (30% premium), is of a smaller scale (10% discount) and is significantly affected by contamination (50% premium) therefore a total premium rate of 70% has been applied and is reflected in our analysed rate. 70% premium $2,443/m² of GFA. Page 21 42

48 APPENDIX IV VALUATION CERTIFICATE BY THE VALUER (Cont d) Botany Road WATERLOO NSW Botany Road, Waterloo forms a mid-2017 mixed-use development site sale located to the north-west of the subject property in an inferior location. The site sold with Stage 1 Development Consent (D/2015/1358) for three (3) building envelopes to accommodate mixed residential and commercial use up to eight (8) storeys. An indicative scheme has been prepared for 134 residential apartments, approximately 410 square metres of ground floor retail accommodation together with basement parking for approximately ninety-five (95) vehicles. We have adopted this scheme for the purpose of our analysis. Furthermore, we have adopted the retail accommodation as being five (5) equivalent units by dividing this area by an average equivalent unit area of seventy-five (75) square metres. Therefore, for the purpose of our analysis the site provides for a total of 139 equivalent units. We note that the property sold on-market via an expressions of interest (EOI) campaign to a private developer with settlement to occur in December In comparison with the subject property, this development site is located within an inferior location (20% premium) and is of a smaller scale (20% discount) therefore the reflected rate is consistent with our analysed rate $3,651/m² of GFA. Page 22 43