Global Opportunities in Forestry and

Timber

TFS CORPORATION LTD | 2

Important Notice and Disclaimer

This presentation has been prepared by TFS Corporation Ltd (TFS).

This presentation is not a financial product or investment advice or recommendation, offer or invitation by any person or to any person to sell or purchasesecurities in TFS in any jurisdiction. This presentation contains general information only and does not take into account the investment objectives, financialsituation and particular needs of individual investors. Investors should make their own independent assessment of the information in this presentation and obtaintheir own independent advice from a qualified financial adviser having regard to their objectives, financial situation and needs before taking any action.

No representation or warranty, express or implied, is made as to the accuracy, completeness, reliability or adequacy of any statements, estimates, opinions orother information, or the reasonableness of any assumption or other statement, contained in this presentation. Nor is any representation or warranty (express orimplied) given as to the accuracy, completeness, likelihood of achievement or reasonableness of any forecasts, prospective statements or returns contained inthis presentation. Such forecasts, prospective statements or returns are by their nature subject to significant uncertainties and contingencies, many of which areoutside the control of TFS.

To the maximum extent permitted by law, TFS and its related bodies corporate, directors, officers, employees, advisers and agents disclaim all liability andresponsibility (including without limitation any liability arising from fault or negligence) for any direct or indirect loss or damage which may arise or be sufferedthrough use or reliance on anything contained in, or omitted from, this presentation.

An investment in TFS securities is subject to investment and other known and unknown risks, some of which are beyond the control of TFS. TFS does notguarantee any particular rate of return or the performance of TFS securities.

The distribution of this presentation including in jurisdictions outside Australia, may be restricted by law. Any person who receives this presentation must seekadvice on and observe any such restrictions.

TFS CORPORATION LTD | 3

Differentiating Timber from Farmland

FARMLAND TIMBER

INVESTMENT HORIZONTypically shorter investment profile than timber

Generally a longer term investment horizon – mitigate with multiple vintages

TIMING OF CASH FLOWS

More regular cash flow – but more susceptible to a single bad year

Lumpy – asset value growing continually via biological growth

SUPPLY IMPACTING PRICE VOLATILITY

Perishable crops limit flexibility of timing to market

Able to “store on the stump”

LIQUIDITY Typically higher with more buyersRelatively low – with liquidity premium inherent in returns

RETURN SOURCESMore balanced between cash and land value appreciation

Returns weighted towards timber values / prices

MANAGEMENT More pro-active, on the groundManagement requirements can vary depending on species

Farmland & Timber have different return profiles, but each fills a need

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Key Drivers of Timberland Returns

1. YIELD

FOREST RISKS

Weather

Fire

Pests

Disease

Management /

Personnel

Climate

Flood

Drought

Storms / Wind

2. SELLING PRICE

FINANCIAL RISKS

Market

Currency

Increased Costs

Regulation /

Sovereign

Management /

Personnel

Timber Price

Timing

Competition

FOREST

YIELD

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Timberland Investing Today

Post GFC, the rate of return for pure

timberland has been lower than historical

norms

A depressed US housing market has

contributed, but is not the sole factor:

Increased efficiency of timberland markets

has lowered liquidity risk;

More investors able to participate in very

large transactions, lowering the wholesale

to retail discount; and

Investment demand has created large pools

of (sometimes impatient) capital, resulting

in competition and higher entry prices.

Increased “commoditization” of timber has

created a lower return environment

Current expected returns from “traditional

timber” types: ~6-8%

Timber Prices (1985-2013)

Source: Timber Mart-South, Log Lines, Oregon Department of Forestry, Pacific Rim Wood Market Report, CAIA

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

NCREIF Timberland Index - 1987 to 2014

Source: NCREIF Timberland Index

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Diversification of holdings to include niche opportunities in new / alternative species

Limit over-reliance on a single market

Seek out commodities with a multiplicity of markets / buyers

Underlying demand / supply characteristics that support price growth

Low competition to avoid a “cheapest sells” situation

Seek out sectors with high barriers to entry for prospective competitors

How are timberland investors looking to enhance returns in 2015 and beyond

Opportunity for Outperformance exists in Niche Species

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Comparing Traditional Timber to Alternative / Niche Species

Exposure to / Reliance

on Specific MarketsEnd Products Markets Demand / Supply

TRADITIONAL

TIMBERLANDCan be High

Typcially timber based

with low value add Limited Relatively Balanced

ALTERNATIVE

SPECIESRelatively Low

Certain species can

derive multiple products Multiple & Global

Supply Shortages can be

Exploited

Price Maker Price Volatility Prices / Margins Competition

TRADITIONAL

TIMBERLAND

No. Many Competitors

(Buyers Market)Medium / High Low / Low High

ALTERNATIVE

SPECIES

Yes. Limited

Competitors (Sellers

Market)

Low High / High Relatively Low

Barriers to Entry Target ReturnsTransparency of

Information

Maturity of Market /

Investors

TRADITIONAL

TIMBERLANDLow ~6-8% IRR High

Mature markets &

investors

ALTERNATIVE

SPECIESHigh ~20%+ IRR Relatively Low

Mature markets, less

mature investors

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Case Study: Indian Sandalwood’s Multiple Products / Multiple Markets

Sandalwood Tree

Oil

Cosmetics & Fragrance Pharma

Mouth Fresheners

By Products

Wood

Worship Cremation Handicrafts & Furniture

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Indian Sandalwood - A Global Commodity

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Source: H.S. Anantha Padmanabha, Expert Market Report, September 2014

Supply – A Long Term Downward Trend

Depleted global supply due to an over-harvesting of native stands anda lack of commercial plantations

Year

Ton

nes

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Official Indian Government Sandalwood Harvest: 1996 - 2014

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Historical Price Growth of Sandalwood

Demand / supply imbalance creates market tension, pushing wood prices higher

* Source: H.S. Anantha Padmanabha, Expert Market Report

$U

S p

er T

on

ne

Date

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Sandalwood Auction Price (A$ per tonne)

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Price Trend the same for Sandalwood Oil

Supply constraints and pharma market development driving oil price growth

$U

S p

er K

G

Date

Source: UK Ledger & TFS Corporation

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

Q41993

Q41994

Q41995

Q41996

Q41997

Q41998

Q41999

Q42000

Q42001

Q42002

Q42003

Q42004

Q42005

Q42006

Q42007

Q42008

Q42008(TFS)

Q42009

Q$2009(TFS)

Q42010

Q42011

Q42012

Q42012(TFS)

Q42013

Q32014(TFS)

Q42014

Q42014(TFS)

Oil Spot Price ($US) TFS Contracted Oil Price (US$)

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Note 1: Key assumptions include: (i) survival rate – 83%, (ii) heartwood yield – average yield estimated at 19.65 kg per tree, (iii) expected oil yield of 3.7%, (iv) oil price of US$4,500 per kg (no inflation), and (v) FX rate of AU$1.35 to US$1.00.

Note 2: Gross and undiscounted yield before maintenance, harvest, processing and distribution costs. Assumes all forest yield distilled into oil.

1 Hectare (A$80,000 Estab Fee +

Land Cost)

420 Trees1

(at harvest)

305 kg of Oil1(~8.2T Heartwood)

A$1,850,0002

Illustrative Value Chain of Indian Sandalwood

~15 Year Plantation Rotation (Total Management Costs ~A$80,000 per hectare)

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Contact

Duncan Caldwell

General Manager, Financial Products

Ph: +61 8 9386 3299

Mob: +61 (0)478 406 540

Email: duncan@tfsltd.com.au

169 Broadway

Nedlands, Perth, WA

Australia, 6009

www.tfsltd.com.au