TCA.L Regulatory News (TCA)

Terra Capital Plc ("Terra" or the "Company")

27 October 2016

Tax Litigation Update

As announced on 29 July and 16 September 2016, the Company won its appeal against a claim by the Macau Tax Authorities in regard to the sale of the AIA Tower and the Macau Tax Authority filed a notice of appeal regarding that decision. Local counsel has advised the Company that the Macau Tax Authority failed to timely file the arguments required to "perfect" the appeal within the deadline set by the Court.

Counsel has now received a decision from the Court that as a result of the failure to timely file arguments, the appeal filed by the Tax Department against the Administrative Court award, is considered to have been "deserted". This means the appeal by the Tax Department is no longer effective and has no further standing and the earlier decision in the Company's favor is the final decision. The Company's local counsel is now preparing a request for the return of the bond previously paid into the Court when the Company originally appealed the lower courts' decisions. The bond has a value of approximately US $1.9 million and this decision will add over two cents per share to Terra's NAV.

When further information becomes available, it will be reported to shareholders.

The Company undertakes its activities in line with its strategy to generate high absolute returns by investing in what the Investment Manager believes are under-valued companies presenting significant value opportunities. Due to market inefficiencies, the Company and its Investment Manager, Terra Partners Asset Management Limited ("TPAM"), believe that frontier markets provide many such prospects.

The information in this release has been prepared from information provided to TPAM by sources believed to be reliable, and all reasonable precautions have been taken to ensure its accuracy; however, no representation or warranty about the accuracy of the information contained in, or of any omissions from, this document or any supplementary information made available to any interested party or its advisers is implied, and any liability in respect of such information or omissions is hereby expressly disclaimed. The Company and TPAM reserve their right to amend the information provided herein, and its opinions, at any time, and undertakes no obligation (express or implied) to provide any recipient with any further information or to correct any inaccuracies or omissions which may subsequently become apparent. Readers are advised that a fund managed by TPAM, the Fund's Investment Manager, and some officers and employees of TPAM currently own stock in TCA.

Investments in Emerging and Frontier markets usually suffer from liquidity problems, and are often affected by governmental interference in the free market, local politics and vagaries in commodity and currency prices; therefore, their prices can be very volatile. This means that it can be difficult to acquire and subsequently sell the shares noted in the Company's portfolio. This document is for information purposes only and it is not intended as an offer or solicitation regarding the purchase or sale of any security or investment vehicle.

All solicitations or offers regarding the Company ("TCA") are made and transacted on the public market of the AIM Section of the London Stock Exchange and occur by reference to TCA's Offering Memorandum and Circular noted above, as amended by subsequent resolutions, primarily the one passed at the January 26, 2015 EGM. Documents are accessible on TCA's website www.terracapitalplc.com in the "Investor Centre" tab under the Documents and Announcements section of the file "AIM Rule 26". This website contains important information which may supplement, modify or differ from the information contained herein and no prospective investment decision should be considered before careful reading of documentation found on TCA's website. All current and prospective investors should be aware that PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. By accepting this document, you agree to be bound by the foregoing limitations.