MUSTERA PROPERTY GROUP LIMITED - Capital/Financing Update 2014

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MUSTERA PROPERTY GROUP LTD

ABN 13 142 375 522

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PROSPECTUS

A prospectus for the issue of 10,000,000 fully paid ordinary shares at an issue price of 20 cents each to raise $2,000,000. Oversubscriptions of up to a further 10,000,000 fully paid ordinary shares at an issue price of 20 cents each to raise a further $2,000,000 may be accepted. This Offer is not underwritten.

IMPORTANT INFORMATION

Applicants should read the entire Prospectus for the purposes of making an informed assessment of the assets and liabilities, financial position and prospects of the Company and the rights and liabilities attaching to the Shares offered pursuant to this Prospectus. If you do not understand this Prospectus you should consult your accountant, stockbroker or other financial advisor about its contents. The Shares offered under this Prospectus should be considered speculative and potential investors should consider the risk factors outlined in Section 5 of this Prospectus. This Prospectus is lodged under section 718 of the Corporations Act 2001 (Cth).

CORPORATE DIRECTORY

DIRECTORS

REGISTERED OFFICE

Mr Nicholas Zborowski (Executive Director) Mr Anthony Ho (Non-Executive Director) Mr Benjamin Young (Non-Executive Director) Mr Jack Spencer-Cotton (Non-Executive Director)

COMPANY SECRETARY

Mr Kim Hogg

Suite 7, 61 Hampden Road Nedlands WA 6009

Telephone: +61 8 9386 7069 Facsimile: +61 8 9386 7069 Email: [email protected] Website: www.mustera.com.au

SOLICITORS

SHARE REGISTRY*

Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street Perth WA 6000

Advanced Share Registry Limited 150 Stirling Highway Nedlands WA 6009

Telephone: +61 8 9389 8033 Facsimile: +61 8 9389 7871

INVESTIGATING ACCOUNTANT

AUDITOR*

BDO Corporate Finance (WA) Pty Ltd 38 Station Street Subiaco WA 6008

BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WA 6008

PROPERTY VALUERS

LEAD MANAGER OF THE OFFER

Valuation Services (NSW) Pty Ltd Level 4, Exchange Plaza 60 Miller Street North Sydney NSW 2059

Townshend Capital Pty Ltd Suite 6, 61 Hampden Road Nedlands WA 6009

PROPOSED ASX CODE

MPX

These entities are included for information purposes only. They have not been involved in the preparation of this Prospectus.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

CONTENTS

IMPORTANT NOTICE	Page
	2 4 5 9 14 15 19 23 30 33 39 46 49 55 56 57
LETTER TO INVESTORS
1. INVESTMENT OVERVIEW
2. DETAILS OF THE OFFER
3. COMPANY OVERVIEW
4. PROPERTY PORTFOLIO
5. RISK FACTORS
6. FINANCIAL INFORMATION
7. INVESTIGATING ACCOUNTANT’S REPORT
8. SUMMARY OF VALUATION
9. BOARD, MANAGEMENT AND CORPORATE GOVERNANCE
10. MATERIAL CONTRACTS
11. ADDITIONAL INFORMATION
12. DIRECTORS’ AUTHORISATION
13. GLOSSARY
14. APPLICATION FORMS

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

IMPORTANT NOTICE

This Prospectus is dated 15 October 2014 and was lodged with the ASIC on that date. The ASIC and its officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

No Shares may be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

No person is authorised to give information or to make any representation in connection with this Prospectus, which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

Before making an investment decision on the basis of the information contained in this Prospectus you should consider whether investing in Mustera is appropriate to you in light of your particular investment needs, objectives and financial circumstances. This Prospectus has not taken into account your objectives, financial situation or needs. After reading this document you should seek professional legal, taxation or financial advice to determine whether this investment is appropriate for you. The Shares the subject of this Prospectus should be considered speculative.

Intermediary Authorisation

The Company does not hold an Australian Financial Services Licence (AFSL) under the Corporations Act. Accordingly, offers under this Prospectus will be made pursuant to an arrangement between the Company and holders of an AFSL (Licensees) pursuant to Section 911A(2)(b) of the Corporations Act. The Company will only authorise Licensees to make offers to people to arrange for the issue of Shares by the Company under the Prospectus and the Company will only issue Shares in accordance with such offers if they are accepted.

BBY Limited (ACN 006 707 777) (AFSL 238095) ( Arranger ) will arrange the Issue on behalf of the Company. The Arranger will deposit and deal with the Application Monies pursuant to this Prospectus. The Arranger’s function should not be considered as an endorsement of the Offer nor a recommendation of the suitability of the Offer for any investor.

The Arranger does not guarantee the success or performance of the Company or the returns (if any) to be received by investors. None of the Arranger or any other Licensee is responsible for, or has caused the issue of, this Prospectus.

If you invest in Mustera through this Prospectus, you are NOT investing in the Arranger. The Shares do not represent shares in, deposits or other liabilities of the Arranger or associates of the Arranger. The holding of Shares is subject to investment risk, including possible delays in repayment, loss of income and principal invested.

Neither the Arranger nor its associates in any way stands behind the capital value and/or performance of the Shares or the assets of Mustera. Neither the Arranger nor any of its associates guarantees the payment of income or the repayment of principal invested in the Shares.

result of a failure to process, or delay in processing any Application for Shares for any reason.

The Company has agreed to pay the Arranger a fee of 1.5% (excluding GST) of the total application monies received under this Prospectus. Further details of the agreement with the Arranger are set out in Section 10.7 of this Prospectus.

Risk Factors

Potential investors should be aware that subscribing for Shares in the Company involves a number of risks. The key risk factors of which investors should be aware are set out in Section 5 of this Prospectus. These risks, together with other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of the Shares in the future. Accordingly, an investment in the Company should be considered speculative. Investors should consider consulting their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

Exposure Period

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. Potential investors should be aware that this examination may result in the identification of deficiencies in this Prospectus and, in those circumstances, any application that has been received may need to be dealt with in accordance with Section 724 of the Corporations Act. Applications for Shares under this Prospectus will not be processed by the Company until after the expiry of the Exposure Period. No preference will be conferred on persons who lodge applications prior to the expiry of the Exposure Period.

Web Site – Electronic Prospectus

A copy of this Prospectus can be downloaded from the Company’s website at www.mustera.com.au. Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must be an Australian resident and must only access this Prospectus from within Australia.

The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

Website

No document or information included on our website is incorporated by reference into this Prospectus.

Each Applicant acknowledges that neither of the Arranger nor Mustera is liable for any loss arising as a

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

IMPORTANT NOTICE

Forwarding-looking statements

This Prospectus contains forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, or ‘intends’ and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place.

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of our Company, the Directors and our management.

We cannot and do not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Prospectus will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.

We have no intention to update or revise forwardlooking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this prospectus, except where required by law.

Photographs and Diagrams

Photographs used in this Prospectus which do not have descriptions are for illustration only and should not be interpreted to mean that the assets shown in them are owned by the Company. Diagrams used in this Prospectus are illustrative only and may not be drawn to scale.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

LETTER TO INVESTORS

15 October 2014

Dear Investor,

On behalf of the Board of Mustera Property Group Limited ( Mustera or Company ), I am pleased to invite you to become a shareholder. Pursuant to this Prospectus, the Company is seeking to raise $2,000,000 through an issue of 10,000,000 fully paid ordinary shares ( Shares ) at a price of $0.20 per Share ( Offer ). Oversubscriptions of up to a further 10,000,000 Shares at an issue price of $0.20 cents each to raise a further $2,000,000 may be accepted.

The Board believes that the Company is set to enter an exciting period of growth as the property and financial markets present the Company with an opportune time to invest in the Australian property market. The Company has an existing investment asset as well as a good pipeline of development opportunities.

The Company’s business strategy, focused on property investment and development, will be implemented by a management team led by an experienced Board.

Mustera’s immediate objective is to progress the development of Lot 803 Foundry Road, Midland (see Section 4.2 for further details). This objective will establish the Company’s credentials in the planning and management of a mixed use development. The Company has also entered into a conditional contract of sale, subject to due diligence by Mustera, over Lot 801 Helena Street, Midland (refer to Section 4.2 for further details).

The Board is positive about the future for Mustera and believe that the Company now offers investors an opportunity to invest in an experienced management team focused on taking advantage of property investment and development opportunities.

To existing and future Shareholders, we look forward to delivering on our stated strategy and providing you with an investment in an active listed property company.

This Prospectus contains detailed information about Mustera, the details of the Offer and a description of some of the key risks associated with an investment in the Company. We encourage you to read it carefully in its entirety and seek professional advice if required before making your investment decision.

On behalf of the Board, I commend the Offer to you and look forward to welcoming you as a Shareholder.

Yours sincerely

Nicholas Zborowski Executive Director

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

1. INVESTMENT OVERVIEW

This section is a summary only and not intended to provide full information for investors intending to apply for Shares offered pursuant to this Prospectus. This Prospectus should be read and considered in its entirety.

1.1 MUSTERA PROPERTY GROUP LTD

Mustera is an Australian focussed property investment and development Company. The Company provides a property development platform for quality residential, commercial and industrial, hospitality and mixed-use projects.

Mustera provides integrated property investment solutions with the ability to pursue a diverse range of Australian property opportunities across all investment types, capital structures and asset classes. The Company has existing contacts with private equity funds and investment institutions both in Australia and abroad.

Following the successful completion of the listing, Mustera will be in a position to pursue a number of investment opportunities, as well as development projects which are currently in its pipeline.

Mustera’s investment and development mandate will include:

acquiring commercial and industrial investments with attractive lease terms and with potential development upside; and
acquiring development sites for residential and mixed use developments.

The Company’s Directors are Mr Nicholas Zborowski, Mr Anthony Ho, Mr Benjamin Young and Mr Jack SpencerCotton.

Mr Zborowski has more than 15 years’ experience in the property development and funds management industry and has managed a diverse range of projects and portfolios in Australia, Europe and the Middle East. Prior to joining Mustera, he was the managing director at Quintessential Places Pty Ltd, a Sydney based development and investment company. He has also held senior roles with Charter Hall Ltd, Tourism Development Investment Company, Emaar Malls Group and Australand Ltd.

Mr Young has a wealth of experience in financial markets. He has held senior positions with major banks including Westpac and ANZ both in Australia and overseas.

Mr Ho is a Chartered Accountant and is presently the principal of a public practice specialising in providing corporate and financial services to ASX-listed companies. He is currently a director of a number of companies listed on the ASX.

Mr Spencer-Cotton has been involved in the field of engineering for over 20 years. He has held a range of senior engineering roles in international manufacturing companies, as well as established his own business in electronics engineering and consulting. He is experienced in automation engineering, project planning, and team management in large scale projects. He has previously held senior engineering positions at ERG Group Ltd, SanminaSCI Corporation, and SRX Global. He is presently a capital projects engineer at Pfizer Perth.

1.2 KEY INVESTMENT HIGHLIGHTS

Following completion of the listing, Mustera will be well positioned to generate shareholder value by identifying and acquiring attractive investments and development opportunities within Australia.

Mustera will pursue a range of investment and development opportunities across multiple asset classes. The Directors believe this diversity of investment and development opportunities will present attractive risk-adjusted returns.

Mustera will aim to deliver consistent property earnings, development margins and capital growth through all of the opportunities that are pursued.

Key investment highlights include:

Development Opportunities

Mustera has an existing pipeline of residential and mixed use development opportunities including an opportunity to acquire and develop an additional high density residential apartment site.

Investment Property

Mustera owns an existing commercial and industrial asset with attractive lease terms.

Opportunistic Outlook

Mustera’s outlook is to identify and source a number of new investment opportunities and development projects with a view to grow the Company’s existing portfolio in the short to medium term.

Board of Directors and Management

Mustera’s Board comprises individuals with extensive experience in acting as senior executives and directors of listed and unlisted entities in a diverse industry range. The Board and senior management have an extensive network of contacts within the Australian property industry that provides Mustera the opportunity to consider a broad range of investment possibilities.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

INVESTMENT OVERVIEW

1.3 KEY INFORMATION

KEY INFORMATION	FURTHER DETAILS
Type of security being offered and its rights and liabilities Fully paid ordinary shares in the capital of the Company ranking equally with the existing Shares on issue	Sections 2.1 and 11.2
How to apply for Shares Complete and return the Application Form together with payment in full for the quantity of Shares being applied for. Applications must be for a minimum of 10,000 Shares ($2,000) and thereafter in multiples of 1,000 Shares ($200).	Section 2.9 and Application Form
Will the Shares be listed? Application for Official Quotation by ASX of the Shares offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus.	Section 2.10
How will Shares be allocated? The Directors will determine the allottees in their sole discretion.	Section 2.11
Where will the Offer be made? No action has been taken to register or qualify the Shares, or, otherwise permit a public offering of the Shares the subject of this Prospectus, in any jurisdiction outside Australia. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.	Section 2.12
CHESS and Issuer Sponsorships The Company will apply to participate in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company.	Section 2.15
What benefits are being paid to Directors? Mr Nicholas Zborowski has entered into an employment agreement with the Company under which he is paid $120,000 gross per annum (exclusive of statutory superannuation). Director fees of $20,000 per annum will be paid to each Non-executive Director upon the Company’s admission to the Official List of ASX. A company associated with Mr Anthony Ho is being paid $3,000 (excluding GST) per month in consideration for the provision of secretarial services to the Company. A company associated with Benjamin Young and Anthony Ho is being paid a sum of 3.5% of the total amount raised under this Prospectus in consideration for acting as Lead Manager to the Offer.	Sections 10.5, 10.6, 10.9 and 11.3
What interests do Directors have in the securities of the Company? The interests of the Directors at the date of this Prospectus, and following completion of the Offer are detailed in Section 11.3.	Section 11.3

1.4 KEY INVESTMENT RISKS

The business, assets and operations of the Company are subject to certain risk factors that have the potential to influence the operating and financial performance of the Company in the future. These risks can impact on the value of an investment in the Shares of our Company.

The Board aims to manage these risks by carefully planning its activities and implementing risk control measures. Some of the risks are, however, highly unpredictable and the extent to which they can effectively be managed is limited.

Before applying for Shares in Mustera, you should consider whether these Shares are a suitable investment for you. You should be aware that there are risks associated with an investment in Mustera’s Shares generally. In particular, these risks arise from the nature of Mustera’s Shares and the associated terms of the Issue as well as risks associated with Mustera’s business. These risks may affect the ability of Mustera to fulfil its obligations, and affect the value of Mustera shares.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

INVESTMENT OVERVIEW

The risk factors can be broadly classified as including:

risks associated with an investment in Mustera;
risks specific to Mustera; and
risks associated with the general global economic environment. Some of the principle risks include:

Development risk

Part of Mustera’s business is to identify, analyse and invest in development projects which have a number of inherent risks in addition to those associated with real estate generally, including:

a risk that appropriate planning consents are not obtained or, if obtained, are not properly adhered to;
a risk that development costs escalate beyond those originally anticipated;
a risk of project delays due to factors beyond the control of Mustera;
a risk that any property development manager and/or subcontractor appointed to implement a development project does not perform their role to a satisfactory standard or acts or fails to act in breach of contract;
a risk that competing property development projects adversely affect the overall return achieved by a property development project undertaken by Mustera because they provide competitive alternatives for potential purchasers and potential lessees;
a risk that warranty claims arise subsequent to a development that the Company may be liable for;
a risk that the property does not sell; and
a risk that market conditions change during any development.

Although some of these risks can be mitigated, it is not possible to remove entirely the risks inherent in project development.

Property valuation and rental income risks

The value of, and returns from, properties owned by the Company may fluctuate depending on property market conditions. Demand for property may change as investor preferences for particular sectors and asset classes change over time and can be influenced by general economic factors such as interest rates and share market cycles. Property values may fall, and they may fall quickly, if the underlying assumptions on which the property valuations are based differ in the future.

Earnings made by Mustera from investment properties will be dependent upon the rents received from those properties, occupancy levels and the level of non-recoverable outgoings. Rental income may be adversely affected by a number of factors, including property market conditions, competition from other property owners, the financial circumstances of tenants.

Funding risks

Mustera will rely on external funding sources (debt and equity funding) for its property portfolio. Mustera's ability to raise capital from either debt or equity markets on favourable terms for future corporate activity cannot be guaranteed and is dependent on a number of factors, including the general economic climate, the state of debt and equity capital markets, and the performance, reputation and financial strength of Mustera.

In relation to debt funding of the development projects, Mustera will be required to achieve a minimum level of committed sales as one of the conditions of the funding. In the event such a condition is not satisfied, Mustera may not be able to source debt funding and the value in the development project may be impaired.

Please refer to Section 5 for further details of risk factors associated with an investment in the Company. These risks should not be taken as an exhaustive list of the risks of investing in Mustera.

1.5 INDICATIVE TIMETABLE

Lodgement of Prospectus with the ASIC	15 October 2014
Opening Date	23 October 2014
Closing Date	20 November 2014
Despatch of holding statements	26 November 2014
Expected date for quotation on ASX	28 November 2014

The above dates are indicative only and may change without notice. The Company reserves the right to extend the Closing Date or close the Offer early without notice.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

INVESTMENT OVERVIEW

1.6 DIVIDEND POLICY

The focus of Mustera’s investment strategy is to deliver capital growth to Shareholders. Therefore, it is the current expectation of the Board that Mustera is unlikely to declare and pay any dividends in the short term. It is the Board’s current intention that any excess capital generated will be reinvested into future investment opportunities.

The payment and amount of any potential future dividends declared by Mustera are subject to the discretion of the Board and will depend upon, among other things, the Company’s earnings, financial position, tax position and capital requirements.

1.7 PURPOSE OF THE OFFER AND USE OF PROCEEDS

The Offer is being conducted to:

position Mustera to pursue property investment and development opportunities;
achieve a listing of the Company on the ASX to broaden the Company’s shareholder base and provide a liquid market for its Shares;
improve the Company’s future access to capital markets;
provide additional working capital to the Company; and
fund the costs associated with the Offer.

Refer to Sections 2.4 and 2.5 for further details.

1.8 FORECASTS

The Directors have considered the matters detailed in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

The Directors consequently believe that, given these inherent uncertainties, it is not possible to include a reliable forecast in this Prospectus.

Refer to Section 3 for further information in respect to the Company’s proposed activities.

1.9 ENQUIRIES

All questions relating to this Prospectus should be directed to the Company by telephone on +61 (08) 9386 7069 between 8.30am and 5.00pm (WST) on business days.

This Prospectus and information about the Offer are also available on the Mustera website at http://www.mustera.com.au.

If you are unclear in relation to any matter or are uncertain as to whether Mustera is a suitable investment for you, you should seek professional advice from your stockbroker, solicitor, accountant or other independent professional adviser.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

DETAILS OF THE OFFER

2.1 DESCRIPTION OF THE OFFER

The Company invites applications for 10,000,000 Shares at an issue price of $0.20 per Share to raise $2,000,000.

All Shares offered under this Prospectus will be issued as fully paid and will rank equally in all respects with the Shares currently on issue.

The Offer is not underwritten.

2.2 OVERSUBSCRIPTIONS

Oversubscriptions of up to 10,000,000 Shares at an issue price of $0.20 per Share to raise up to a further $2,000,000 may be accepted at the Company’s discretion. The maximum amount that may be raised under this Prospectus is therefore $4,000,000.

2.3 MINIMUM SUBSCRIPTION

The minimum subscription for the Offer is 10,000,000 Shares at an issue price of $0.20 each raising $2,000,000 before expenses of the Offer. No Shares will be issued pursuant to this Prospectus unless and until the minimum subscription is reached. Should the minimum subscription not be reached within four (4) months after the date of this Prospectus, all Applications will be dealt with in accordance with section 724 of the Corporations Act.

2.4 PURPOSE OF THE OFFER

The Offer is being conducted to:

position Mustera to pursue property investment and development opportunities;
achieve a listing of the Company on the ASX to broaden the Company’s shareholder base and provide a liquid market for its Shares;
improve the Company’s future access to capital markets;
provide on-going working capital for the Company’s requirements, including progression of the development opportunities of Lot 803 Foundry Road, Midland and 82 Belmont Ave, Rivervale, undertaking further due diligence on development opportunities for the Company’s conditional contract for sale over Lot 801 Helena Street, Midland, and management of the existing asset portfolio; and
fund the expenses of the Offer.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

DETAILS OF THE OFFER

2.5 PROCEEDS OF THE OFFER

The proceeds of the Offer are intended to enable Mustera to implement its business strategy, provide working capital for the Company, and pay the costs of the Offer.

Sources of funds	Minimum subscription ($)	Maximum subscription ($)
Gross proceeds under the Offer	2,000,000	4,000,000
Less: Offer costs	(275,000)	(385,000)
	1,725,000	3,615,000
Add: Cash on hand after Subsequent Events*	1,257,665	1,257,665
Add: Receipt of current receivables (as at 30 June 2014)	359,467	359,467
Less:Paymentofcurrent liabilities (as at30 June2014)	<255,319>	<255,319>
Total funds available as working capital	3, 086,813	4,976,813

Application of working capital
Lot 803 Foundry Road, Midland
Professional Fees Design Development	703,000	703,000
Marketing Collateral Preparation and Launch	156,000	156,000
Overheads / Project Administration	107,000	107,000
AuthorityFees /Holding Costs / Other	24,000	24,000
	990,000	990,000
Lot 801 Helena Street, Midland
Professional Fees-Design Development	225,000	225,000
	225,000	225,000
82 Belmont Avenue
Professional Fees- Design Development	150,000	150,000
	150,000	150,000
Working Capital
Cash retained by Mustera for use in the ordinary course of business	1,721,813	3,611,813

* Refer Section 6.3 for details of Cash movements and Subsequent Events

The Board expects that following the Offer, Mustera will have sufficient working capital from its operations and funding sources to fund its business objectives.

2.6 CAPITAL STRUCTURE

The capital structure of the Company following completion of the Offer is summarised below[1] :

Shares[2]

	Minimum subscription Number	Maximum subscription Number
Shares currently on issue	71,711,108	71,711,108
Shares to be issued pursuant to the Offer	10,000,000	20,000,000
Total Shares on completion of the Offer	81,711,108	91,711,108

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

DETAILS OF THE OFFER

Options[3]

	Number
Options currently on issue	11,000,000
Options to be issued pursuant to the Offer	Nil
Total Options on completion of the Offer	11,000,000

1 Refer to the Financial Information set out in Section 6 of this Prospectus for further details.
2 The rights attaching to the Shares are summarised in Section 11 of this Prospectus.
3 Each Option will be unquoted and is exercisable at 20 cents on or before 31 January 2018. Other terms and conditions of the Options are set out in Section 11 of this Prospectus.

2.7 SUBSTANTIAL SHAREHOLDERS

Those Shareholders holding 5% or more of the Shares on issue both as at the date of this Prospectus and on completion of the Offer are set out in the respective tables below.

As at the date of this Prospectus:

Shareholder	Shares	%(undiluted)	%(fully diluted)
Wonder Holdings Pty Ltd	26,666,666	37.2%	32.2%
Anrinza Future Pty Ltd	25,500,000	35.6%	30.8%
W. Masturi	6,600,000	9.2%	8.0%
P. Simanjuntak	4,200,000	5.9%	5.1%
	62,966,666	87.9%	76.1%

**On completion of the Offer*:**

		Minimum subscription	Minimum subscription	Maximum subscription	Maximum subscription
Shareholder	Shares	%(undiluted)	%(fully diluted)	%(undiluted)	%(fully diluted)
Wonder Holdings Pty Ltd1	26,666,666	32.6%	29.1%	28.8%	26.0%
Anrinza Future Pty Ltd2	25,500,000	31.2%	27.8%	27.5%	24.8%
W. Masturi3	6,600,000	8.1%	7.2%	7.1%	6.4%
P. Simanjuntak4	4,200,000	5.1%	4.6%	4.5%	4.1%
	62,966,666	77.0%	68.7%	67.9%	61.3%

* assumes the Shareholders do not subscribe for additional Shares under the Offer.

1 Wonder Holdings Pty Ltd is not a related party of the Company or associated with any of the Directors of the Company.

2 Anrinza Future Pty Ltd is not a related party of the Company or associated with any of the Directors of the Company.

3 W Masturi is not a related party of the Company or associated with any of the Directors of the Company.

4 P. Simanjuntak is not a related party of the Company or associated with any of the Directors of the Company.

Given the potential voting power of Wonder Holdings Pty Ltd and Anrinza Future Pty Ltd, the Company advises that it has been advised by the controllers of these entities that:

the companies are considered to be associates;
at the date of this Prospectus, neither Wonder Holdings Pty nor Anrinza Future Pty Ltd, nor their controllers, intend to make any major changes to the business of the Company, its financial or dividend distribution policies, nor redeploy any of the assets of the Company; and
there is no present intention on the part of the entities or their controllers to inject further capital into
Mustera nor make any changes to management or the Board.

The statements above are of current intention only, which may change as new information becomes available or circumstances change. The statements should be read in this context.

The Company will announce to the ASX details of its top 20 Shareholders (following completion of the Offer) prior to the Shares commencing trading on ASX.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

DETAILS OF THE OFFER

2.8 RESTRICTED SECURITIES

Subject to the Company being admitted to the Official List, certain Shares and Options on issue prior to the Offer may be classified by ASX as restricted securities and may be required to be held in escrow for up to 24 months from the date of Official Quotation. During the period in which these securities are prohibited from being transferred (if any), trading in Shares may be less liquid which may impact on the ability of a Shareholder to dispose of his or her Shares in a timely manner.

The Company will announce to the ASX full details (quantity and duration) of the Shares and Options required to be held in escrow (if any) prior to the Shares commencing trading on ASX.

2.9 HOW TO APPLY UNDER THE OFFER

Applications for Shares under the Offer must be made using the Application Form attached to this Prospectus in accordance with the instructions on the back of the form. Applications must be for a minimum of 10,000 Shares and thereafter in multiples of 1,000 Shares. Payment for the Shares must be made in full at the issue price of $0.20 per Share.

Applications for Shares under the Offer must be accompanied by a cheque or money order for the application amount. Cheques or money orders must be drawn on an Australian financial institution in Australian currency and made payable to “Mustera Property Group Limited” and crossed “Not Negotiable”. Cash will not be accepted.

Applicants should mail or deliver their completed Application Forms, together with accompanying payment as follows:

Mail to:

Mustera Property Group Limited PO Box 3438 Nedlands WA 6909

Deliver to:

Mustera Property Group Limited Suite 7, 61 Hampden Road Nedlands WA 6009

Application monies received under the Offer will be held in in trust for the Applicants in a separate bank account until the Shares are issued to successful Applicants. No interest will be paid by Mustera on application monies received.

2.10 ASX LISTING

Application for quotation of the Shares offered pursuant to this Prospectus on ASX will be made no later than seven days after the date on which this Prospectus is lodged with ASIC.

If the Shares are not admitted to Official Quotation by ASX before the expiration of 3 months after the date of issue of this Prospectus, or such period as varied by the ASIC, the Company will not issue any Shares and will repay all application monies for the Shares within the time prescribed under the Corporations Act, without interest.

The fact that ASX may grant Official Quotation to the Shares is not to be taken in any way as an indication of the merits of the Company or the Shares now offered for subscription.

2.11 ACCEPTANCE OF APPLICATIONS

An Application under the Offer constitutes an irrevocable offer to Mustera to subscribe for Shares on the terms and conditions set out in this Prospectus and the Application Form.

Subject to full subscription of the Offer and ASX granting conditional approval for the Company to be admitted to the Official List, allotment of Shares offered by this Prospectus will take place as soon as practicable after the Closing Date.

The Directors will determine the allottees of all the Shares in their sole discretion. The Directors reserve the right to reject any application or to allocate any Applicant fewer Shares than the number applied for. Where the number of Shares issued is less than the number applied for, or where no allotment is made, surplus application monies will be refunded without any interest to the Applicant as soon as practicable after the Closing Date.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

DETAILS OF THE OFFER

2.12 APPLICANTS OUTSIDE AUSTRALIA

This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

No action has been taken to register or qualify the Shares or otherwise permit a public offering of the Shares the subject of this Prospectus in any jurisdiction outside Australia. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.

It is the responsibility of Applicants outside Australia to obtain all necessary approvals for the allotment and issue of the Shares pursuant to this Prospectus. The return of a completed Application Form will be taken by the Company to constitute a representation and warranty by the Applicant that all relevant approvals have been obtained.

2.13 TAXATION

The acquisition and disposal of Shares will have tax consequences, which will differ depending on the individual financial affairs of each investor. It is the obligation of potential investors to make their own inquiries concerning the taxation consequences of an investment in Mustera. If you are in doubt as to the course of action you should take, you should consult your stockbroker, solicitor, accountant or other independent professional adviser.

To the maximum extent permitted by law, the Company, its officers and each of their respective advisors accept no liability and responsibility with respect to the taxation consequences of subscribing for Shares under this Prospectus.

2.14 ELECTRONIC PROSPECTUS

The Offer made under this Prospectus is available electronically only to Australian residents accessing and downloading or printing the electronic version of this Prospectus within Australia. Australian residents located in Australia may view this Prospectus on the Mustera website at http://www.mustera.com.au. The Offer made under this Prospectus in electronic form is not available to investors outside Australia, including persons in the United States and US Persons. Persons who access the electronic version of this Prospectus should ensure they download and read the entire Prospectus. A paper copy of this Prospectus will be provided free of charge to any person in Australia who requests a copy by contacting the Company on +61 (08) 9386 7069 between 8:30am and 5:30pm (WST) on business days.

Applicants using an Application Form attached to the electronic version of this Prospectus must be located in Australia. The Corporations Act prohibits any person from passing the Application Form on to another person unless it is attached to or accompanying a complete and unaltered paper copy or electronic version of this Prospectus.

2.15 CHESS AND HOLDING STATEMENTS

Mustera will apply to have its Shares participate in CHESS. On admission to CHESS, Shares must be held in either the CHESS sub-register or on the issuer-sponsored sub-register. These two sub-registers make up the register.

Following Completion of the Offer, Shareholders will be sent a holding statement that sets out the number of Shares that have been allocated to them. This statement will also provide details of a Shareholder’s Holder Identification Number (HIN) for CHESS holders or, where applicable, the Securityholder Reference Number (SRN) of issuer sponsored holders. Shareholders will subsequently receive statements showing any changes to their holding. Certificates will not be issued.

Shareholders will receive subsequent statements during the first week of the following month if there has been a change to their holding on the register and as otherwise required under the ASX Listing Rules and the Corporations Act. Additional statements may be requested at any other time either directly through the Shareholder’s sponsoring broker in the case of a holding on the CHESS sub-register or through the Share Registry in the case of a holding on the issuer sponsored sub-register. Mustera and the Share Registry may charge a fee for these additional issuer sponsored statements.

2.16 ENQUIRIES

If you require assistance to complete the Application Form or have any queries relating to the receipt and processing of your Application or require additional copies of this Prospectus, you should contact the Company on +61 (08) 9386 7069 between 8:30am and 5:30pm (WST) on business days. This Prospectus and information about the Offer are also available on the Mustera website at http://www.mustera.com.au. If you are unclear in relation to any matter or are uncertain as to whether Mustera is a suitable investment for you, you should seek professional advice from your stockbroker, solicitor, accountant or other independent professional adviser.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

COMPANY OVERVIEW

3.1 BUSINESS OVERVIEW

Mustera was incorporated on 3 March 2010 as Mutual Street Property Group Pty Ltd. It changed its name to Mustera Property Group Pty Ltd on 25 February 2014 and converted to a public company on 27 June 2014.

Mustera is an Australian focused property investment and development Company. The Company provides a property development platform to invest and develop residential, commercial, industrial, hospitality and mixed-use projects.

Mustera provides integrated property investment solutions with the ability to pursue a diverse range of Australian property opportunities across all investment types, capital structures and asset classes. The Company has established contacts with private equity funds and investment institutions in Australia and abroad.

The Company’s success is underpinned by a skilled and motivated team with diverse expertise across property sectors.

Mustera’s core business includes:

Mustera Investments - an investment and investment management business focused on acquiring high yielding commercial and industrial assets. Specific strategies are developed for each investment opportunity, putting in place the most appropriate capital structures and management team to ensure we meet a strict criteria in terms of underlying quality of the assets, project returns, stability of cash flows and capital growth.
Mustera Development - a development business that complements the Company’s investment business through sourcing and managing the development, refurbishment and positioning of high quality assets for the investments. Our development team has extensive experience in understanding and adapting to market conditions, creating quality buildings and communities and seeking new opportunities.

Mustera seeks to deliver stable and growing rental income, minimise any development risks, manage its capital expenditure and financing requirements and where appropriate make prudent and value accretive acquisitions.

3.2 OUR MISSION

The Company’s mission is to be at the forefront of successful, quality investments and developments in Australia, by sourcing key opportunities through our networks and identifying a highest and best use position that can be explored and developed to provide maximum returns on capital.

3.3 INVESTMENT PHILOSOPHY

Investing in property development requires extensive experience and knowledge of the local market and the particular asset class. Property development can provide positive returns with manageable level of risk when the right people are managing the investment and development.

Mustera adopts a strategic and active approach to acquisition and development. Our approach emphasises the value to be gained from clearly identifying the opportunities for development positioning, value improvement and planning enhancement prior to acquisition.

Once acquired, our hands-on management of the investment and development focuses on providing the greatest returns to our investors by maximising value without over capitalising and delivering on schedule.

We focus primarily on investments and development opportunities in Perth and Sydney; areas we believe have the greatest opportunity for growth.

3.4 DEVELOPMENT PARTNERSHIP

Our business model is to partner with suitable investors to identify opportunities that meet a prescribed development mandate at returns agreed to at the partnership level. The will allow Mustera the ability to enter into a variety of investment structures including joint ventures and acquisitions of controlling and minority interests.

3.5 INTEGRATED SERVICE

Mustera brings together a breadth of property skills encompassing investment management, due diligence and feasibility analysis, planning, design management, development and construction management, asset management and sales & marketing. Each discipline is managed by experienced professionals.

3.6 SUSTAINABILITY

Sustainability is a key element of Mustera’s business approach by ensuring its actions are commercially sound and make a difference to its people, customers and the environment. Mustera can make a positive impact for its investors, the community and the Company.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

4. PROPERTY PORTFOLIO

4.1 INVESTMENT PROPERTIES

239-251 Woodpark Road, Smithfield, NSW was acquired on 31 July 2013.

General Description : The property is located on the northern side of Woodpark Road, approximately 100 metres east of Dupas Street intersection at Smithfield. Erected upon the land, early 1980’s, is a medium to high clearance industrial warehouse with associated offices extending to a combined GLA of approximately 5,283.5m[2] . The internal clearances to the warehouse range between 8.2 – 9.9 metres. The site cover is approximately 31% (excluding the buffer land) and a total of 30 marked car parking spaces are provided on site. (Refer to the Independent Valuation Report in Section 8 of the Prospectus for further details).

Lease The property is fully leased on a 10 year term which commenced on 19 December 2012.

Gross Leasable Area 5,283.5m[2]

Land Size 20,120m[2]

Net Income (p.a.) $560,320

Net Rental Yield 8.99%

Calculated on net annual income of $560,320 and total property acquisition costs of $6,230,094

Investment The property in an investment property with an attractive lease profile.

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Property Photos

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

PROPERTY PORTFOLIO

4.2 DEVELOPMENT PROPERTIES

Lot 803 Foundry Road, Midland WA

Railway Square Precinct

Lot 803 Foundry Road, Midland forms part of the Railway Square Precinct within the Midland redevelopment area. This land is under the planning and development control of the Metropolitan Redevelopment Authority (MRA), a Western Australian government agency specifically established to assist with the revitalisation of Midland. The MRA is the determining authority for development applications.

The Railway Square Precinct is situated south of the rail line and traditional town centre of Midland. It is bounded by Yelverton Drive to the north and the street named Main Gate to the east, the former Foundry south of Foundry Road, and Helena Street to the west with its historic Railway Institute building and new mixed use development.

Lot 803 and other development lots frame a major public open space known as Railway Square that was once a railway shunting yard. The former Chief Mechanical Engineer’s Office occupies Lot 802 on Yelverton Drive beside the Peace Memorial Gardens and a ceremonial railway line has been retained as part of Railway Square’s significant heritage elements.

The Railway Square Precinct is a high-density master planned community at the heart of the redevelopment. High density and high amenity new development is encouraged by the development guidelines to retain the character of the precincts industrial heritage.

New development will complete the square, with active ground floor uses that are suited to such a festival square location e.g. alfresco dining, restaurants, casual food outlets, entertainment related activities and small retail premises. On upper floors residential apartments overlooking the square are sought, to interact with activity in the square and to improve safety and security.

Lot 803 Foundry Road, A Development Asset

This 2,304m[2] site was acquired on 12 June 2014 and is located in the Railway Square Precinct. The development comprises approximately 70 residential units and 5 retail units over four levels with a common basement.

A development application was lodged with the MRA on 17 June 2014 and approval is anticipated to be received by the end of 2014.

Mustera has continued with design development and the preparation of marketing collateral during the development approval period.

Once a development approval is received for the project, Mustera will commence the marketing campaign in order to achieve a set level of committed sales. The development programme is expected to be approximately 20 months, subject to a number of applications and approvals being received from multiple authorities. In the event a development decision is taken for this asset, Mustera will need to consider an appropriate financing structure normally applicable to a development of this size and scale.

Land Size: 2,304m[2]

Net Saleable Area (NSA): 4,900m[2] (Circa)

Estimated Construction Programme: 20 Months

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Artist Impression of the proposed development

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

PROPERTY PORTFOLIO

Lot 801 Helena Street, Midland WA

Lot 801 Helena Street, Midland WA is a 2,390m[2] mixed use development site located in the Railway Square Precinct and forms part of the overall master plan to redevelop the Railway Square Precinct by the MRA.

Mustera currently has a conditional contract of sale to purchase Lot 801 Helena Street subject to due diligence by Mustera. Mustera will undertake feasibility studies and due diligence to develop residential apartments on this land, including retail / commercial on the ground floor. The terms of this conditional contract of sale are outlined in Section 10.3 of this Prospectus.

A final determination on whether to acquire the site is expected to be made by Mustera by the end of 2014. Prior to this determination, Mustera will need to consider a suitable investment and funding structure in order to proceed with the project.

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Railway Square Precinct – Lot locations

82 Belmont Avenue, Rivervale, WA

82 Belmont Avenue was acquired on 3 August 2012. The property is located in Rivervale, approximately 8 kilometres east of the Perth CBD. The property comprises a 4,031m[2] parcel of land within the inner suburban locality of Belmont and the improvement comprises a 1970’s built older style office/workshop facility. The site was acquired with the intention of commercial and/or residential redevelopment with the lease in place and lease renewal providing income prior to the redevelopment of the site in the medium term.

Whilst addressed as Rivervale, the property is actually incorporated within the Belmont commercial precinct. Belmont is an inner suburban commercial and industrial location, which benefits close proximity to the Perth CBD and good transport infrastructure. The suburb comprises a mixture of developments containing offices, showrooms and warehouses, and in recent years has seen an increased number of redevelopment to office uses. Belmont and Rivervale both benefit from close proximity to both Perth domestic and international terminals, which are located a short distance east of the property.

Belmont and Rivervale industrial area is generally contained between Great Eastern Highway to the east, Alexander Road to the west, Belmont Avenue to the south and Abernethy Road/Belgravia Street to the north. The suburb contains residential land use which includes single residential or grouped housing developments, but more recently has begun to incorporate multi-level apartment developments.

To the south of the property the main residential area of the Rivervale locality is located, whilst to the north, east and west is industrial and commercial in land use.

Future development of the site includes the demolition of the existing dated structure and construction of multiple office/showroom strata units and/or development of multi-level residential dwellings.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

PROPERTY PORTFOLIO

Lease The property is fully leased on a 5 year term which commenced on 1 July 2014. The lease does include a redevelopment clause which allows Mustera to terminate the lease with six months’ notice in the event of a redevelopment decision by Mustera.

Gross Leasable Area 2,309m[2]

Land Size 4,031m[2]

Net Income (p.a.) $240,365

Net Rental Yield 7.62%

Calculated on net annual income of $240,365 and total property acquisition costs of $3,155,125

Redevelopment The site is considered a redevelopment site, with the lease in place providing income prior to potential development of the site in the medium term.

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Property Photos

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

RISK FACTORS

5.1 INTRODUCTION

Mustera’s business activities are subject to risks which are specific both to its investment in property and its operations, as well as of a general nature. Individually, or in combination, these risks may affect the future operating performance of Mustera and the value of an investment in the Company.

All investors should note that this Section identifies the Directors’ current views on the key risks of an investment in Mustera and is not intended to be exhaustive. Prospective investors should carefully consider the risk factors identified, in addition to the other information in this Prospectus, before deciding to invest in Shares. Prospective investors should ensure they have sufficient awareness of the risks and have regard to their own investment objectives, financial circumstances and taxation position before deciding to invest.

If you do not understand any part of this Prospectus, or are in doubt as to whether to invest in Shares or not, it is recommended that you seek professional guidance from your broker, solicitor, accountant or other qualified adviser before deciding whether to invest.

5.2 GENERAL MARKET RISKS

5.2.1 Share market conditions

There are risks associated with any investment in listed securities. The market price of listed securities such as the Shares in Mustera may fluctuate, resulting in the Shares trading at prices below or above the Offer Price. These fluctuations may be due to a number of factors including:

changes to general economic conditions in Australia and abroad including inflation, interest rates and exchange rates;
demand for securities in property companies both domestically and internationally;
changes in government policy, legislation and regulations;
changes in investor sentiment toward particular market sectors;
the demand for, and supply of, capital; and
general and operational business risks.

Consequently, the Shares may not fully reflect Mustera’s underlying business and net asset value. The value of an investment in Mustera could decrease as well as increase and investors who decide to sell their Shares may receive less than the amount invested.

Further, Mustera has no trading history on public markets prior to the Offer. Consequently, following listing on ASX there is no guarantee that an active trading market will develop for the Shares. Liquidity of the Shares will be dependent on the number of relative buyers and sellers in the market at any given time. Additionally, large Shareholders choosing to trade out of their positions at discounts to prevailing market prices may also affect the market. Increased trading price volatility may occur as a result of any of these factors.

None of Mustera, its Directors or any other person guarantees the performance of the Shares.

5.2.2 Legislative, regulatory and policy changes

Legislative or regulatory changes, or the interpretation of such, may have legal, tax or accounting consequences that adversely affect Mustera. Any such changes may operate retrospectively.

5.2.3 Taxation risk

Changes in income tax, capital gains tax, GST or stamp duty legislation, case law, rulings and determinations issued by the Australian Commissioner of Taxation and other tax authorities, particularly in regard to investment in incomeproducing properties, may adversely affect Mustera’s profitability and cash flow, as well as the tax treatment of returns received by Shareholders.

5.2.4 General business risk

Mustera is exposed to general business risk. This includes, but is not limited to, counterparty performance risk, staff retention risk, occupational health and safety risk, taxation change risk, other regulatory change risk, dispute risk, environmental and contamination risk and insurance coverage risk.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

RISK FACTORS

5.3 RISKS SPECIFIC TO MUSTERA

In addition to the general risks set out in Section 5.2 the Directors believe that there are a number of factors specific to Mustera and the industry in which it operates that should be taken into account before investors make their investment decision. Some of the risks specific to Mustera include, but are not limited to, the following:

5.3.1 Property Valuations

Valuations ascribed to property will be influenced by a number of ongoing factors including:

changes in market rental rates;
fluctuating occupancy levels;
a downturn in the property market in general;
pricing of any competing properties;
tenants defaulting;
increased competition from new or existing properties;
increases in supply or falls in demand for property; and
general economic conditions, such as interest rates and capitalisation rates.

Property values may fall, and they may fall quickly, if the underlying assumptions on which the property valuations are based differ in the future. As changes in valuations of the properties are recorded in the Company’s income statement, any decreases in value will have a negative impact on the income statement.

The property valuation contained in Section 8 of this Prospectus reflects the valuer’s assessment of the value of the property as at the date of valuation. The valuation is subject to a number of assumptions which may not be accurate. Valuations may differ depending on the valuer appointed. A valuation may not reflect the actual price that would be realised if a property were to be sold.

5.3.2 Rental income

Earnings made by Mustera will be dependent upon the rents received from its property portfolio, occupancy levels and the level of non-recoverable outgoings. Rental income may be adversely affected by a number of factors, including:

overall macroeconomic conditions which may give rise to fluctuations in property market conditions;
local real estate conditions;
competition from other property owners;
the financial condition of tenants;
rental arrears and vacancy periods;
incentives offered to attract prospective tenants;
expenses associated with re-leasing tenancies; and
external factors including significant security incidents, acts of God or a major world event.

All of the above factors may affect the earnings of the Company and the market price of the Company’s Shares.

5.3.3 Development risk

Part of Mustera’s business is to identify, analyse and invest in development projects which have a number of inherent risks in addition to those associated with real estate generally, including:

a risk that appropriate planning consents are not obtained or, if obtained, are not properly adhered to;
a risk that development costs escalate beyond those originally anticipated;
a risk of project delays due to factors beyond the control of Mustera;
a risk that any property development manager and/or subcontractor appointed to implement a development project does not perform their role to a satisfactory standard or acts or fails to act in breach of contract;
a risk that competing property development projects adversely affect the overall return achieved by a property development project undertaken by Mustera because they provide competitive alternatives for potential purchasers and potential lessees;
a risk that warranty claims arise subsequent to a development that the Company may be liable for;
a risk that the property does not sell; and
a risk that market conditions change during any development.

Although some of these risks can be mitigated, it is not possible to remove entirely the risks inherent in project development. All of the above factors may affect the earnings of the Company and the market price of the Company’s Shares.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

RISK FACTORS

5.3.4 Re-leasing and vacancy

There is a risk that Mustera may not be able to negotiate suitable lease extensions with existing tenants or replace outgoing tenants with new tenants on the same terms (if at all).

Mustera's rental income may also be negatively impacted by any increases in amounts not recoverable from tenants that might be incurred by Mustera.

5.3.5 Funding for Mustera

Mustera will rely on external funding sources (debt and equity funding) for its property portfolio. See Section 5.3.16 for details relating to risk of dilution by future equity capital raisings.

Mustera's ability to raise capital from either debt or equity markets on favourable terms for future activities cannot be guaranteed and is dependent on a number of factors, including:

the general economic climate;
the state of debt and equity capital markets; and
the performance, reputation and financial strength of Mustera.

A lack of or increased cost of capital could impact the funding costs of Mustera and therefore impact the Company’s earnings.

5.3.6 Inability to complete disposals or acquisitions

There is a risk that Mustera will be unable to dispose of and/or acquire properties on appropriate terms, thereby potentially limiting the growth potential of Mustera. Mustera's failure to deliver or effectively execute its stated strategy including its acquisition and/or disposal of properties or its failure to redefine its strategy to meet changing conditions could result in a decline in the price of Shares. Mustera will endeavour to do all reasonable and necessary due diligence on properties it is intending to acquire, however there is a risk that potential issues are uncovered subsequent to due diligence and that these risks cannot be fully mitigated by the warranties and indemnities in the sale and purchase agreements for those acquisitions. If an unforeseen liability arises in respect of which the purchaser is not able to be indemnified, this may adversely impact Mustera. There can be no assurance that any future acquisitions and/or disposals will enhance the investment returns of Shareholders.

5.3.7 Property liquidity

Mustera will invest in assets that are not listed on a stock exchange or for which there are only a limited number of potential investors. As a consequence, the realisable value of an asset may be less than its expected value and divestment of the asset at such a time may adversely affect Shareholder returns.

5.3.8 Limited history

The Company was incorporated on 3 March 2010 as Mutual Street Property Group Pty Ltd. It changed its name to Mustera Property Group Pty Ltd on 25 February 2014 and converted to a public company on 27 June 2014. The Company has limited historical financial performance and has not completed any property developments to date. Investors will be subject to the risk that implementation of its property development objectives may be unsuccessful. Further, the Board and senior management team does not comprise any person with more than a one year involvement in Mustera’s business other than Mr Benjamin Young.

5.3.9 Liquidity risk

The Shares to be issued pursuant to this Prospectus will comprise less than 13% of the Company’s issued share capital (at minimum subscription) and less than 22% if maximum oversubscriptions are accepted.

There can be no guarantee that an active market in the Company’s Shares will develop or that the price of the Shares will increase. There is no guarantee that there will be an ongoing liquid market for the Company’s Shares. Accordingly, there is a risk that, should the market for the Company’s Shares become illiquid, Shareholders will be unable to realise their investment in the Company.

5.3.10 Loss of key management personnel

Mustera’s business strategy will be implemented by the Board and the management team led by Nicholas Zborowski as the Company’s Executive Director. Mustera’s success will depend in a large part on the judgment and performance of the Board and executives. The loss of services of any key personnel could have a material adverse impact on the Company’s ability to successfully implement Mustera’s business strategy. Nicholas Zborowski’s employment terms provide him with the ability to give 3 months’ notice of resignation.

5.3.11 Capital expenditure requirements

While Mustera intends to undertake reasonable due diligence investigations prior to acquiring properties, there can be no assurance that any properties acquired will not have defects or deficiencies, or that unforeseen capital expenditure or other costs will not arise.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

RISK FACTORS

An increase in capital expenditure may require additional funding, or sales of existing properties or assets, which may impact future performance. Refer to Section 5.3.16 for further information relation to the risk of dilution by future equity capital raising.

5.3.12 Financial and interest rate risk

Mustera may use leverage to maintain an optimal capital structure for its property investments. The use of leverage may enhance returns and enable a broader range of investments to be made. However, it will increase the exposure of Mustera to financial and interest rate risk. These risks may result in the negative performance of investments and a reduction in the underlying value of Mustera and its Shares. As such, the achievement of the Company’s investment objectives cannot be guaranteed.

Mustera is also exposed to risks relating to the re-financing of existing debt facilities, or any future debt facilities it may undertake. The terms on which debt facilities are re-financed may also be less favourable than those previously negotiated. Mustera has a covenant in relation to its debt facility. Factors such as falls in asset values and the inability to achieve timely asset sales at prices acceptable to Mustera could lead to a breach in debt covenants and in such an event Mustera’s lenders may require their loans to be repaid immediately or may take enforcement action over property securing the facilities.

5.3.13 Insurance

Mustera maintains insurance which it believes to be consistent with industry practice and adequate having regard to its business strategy. However, no assurance can be given that Mustera will be able to obtain such insurance coverage in the future at reasonable rates or that any coverage it arranges will be adequate. Insurance in relation to Mustera’s assets may not cover all events or all claims made. Further, appropriate cover for terrorism and other uninsurable risks may not be available, or the cover that is available may not be adequate or commercially viable.

5.3.14 Litigation risk

Mustera may be the subject of complaints from or litigation by Shareholders, tenants, government agencies or other third parties. While Mustera has in place professional indemnity insurance, certain events may not be covered by professional indemnity insurance, or the claims incurred may be in excess of the insured amount.

In addition, if Mustera breaches the law, this may result in a fine or penalty. Such matters may have a material adverse effect on Mustera's reputation, divert its financial and management resources from more beneficial uses, and/or have a material adverse effect on Mustera's future financial performance or position. Mustera is not aware of any uninsured claims or legal proceedings of a material nature against Mustera.

5.3.15 Occupational Health and Safety

There is a risk that liability arising from occupational health and safety matters at a property owned by the Company may be attributable to Mustera as the landlord instead of, or as well as, the tenant. To the extent that any liabilities may be borne by Mustera, this may impact the financial position and performance of Mustera (to the extent not covered by insurance). In addition, penalties may be imposed upon Mustera, which may have an adverse impact on Mustera.

5.3.16 Dilution

Investors may be diluted by future capital raisings by Mustera. Shares may be issued to finance future acquisitions, supplement working capital or pay down debt which may, under certain circumstances, dilute the value of Shareholders' interests. Where possible, Mustera will endeavour to ensure when raising equity that the benefit to investors of acquiring the relevant assets or reducing gearing is greater than the impact caused by the dilution associated with a capital raising.

5.3.17 Environmental issues and contaminations

As with any property, there is a risk that a property may be contaminated now or in the future. Government environmental authorities may require such contamination to be remediated. There is always a residual risk that Mustera may be required to undertake any such remediation at its own cost. Such an event would adversely impact Mustera's financial performance.

In addition, environmental laws impose penalties for environmental damage and contamination, which can be material in size. Exposure to hazardous substance at a property could result in personal injury claims. Such a claim could prove greater than the value of the contaminated property.

Due to the time period in which the Company’s existing investment properties were originally constructed, there is the chance that hazardous materials such as asbestos may be contained within certain areas. There is a risk that these materials will need to be removed in the future as opposed to being monitored and contained. This may increase the capital expenditure requirements of Mustera and potentially adversely affect the Company’s financial performance. An environmental issue may also result in interruptions to the operations of any property owned by the Company, including loss as a result of closure. Any consequential loss of rental income may not be recoverable.

Mustera and the operations of tenants in the Company’s properties are subject to government environmental legislation. While environmental issues are continually monitored, there is no assurance that Mustera's operations or those of a tenant will not be affected by an environmental incident or subject to environmental liabilities.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

FINANCIAL INFORMATION

6.1 INTRODUCTION

The financial information set out in this Section consists of:

(i) the consolidated historical income statements for the years ended 30 June 2012, 30 June 2013 and 30 June 2014;

(ii) the consolidated statement of financial position of the Company and its controlled entity as at 30 June 2014; and

(iii) a pro forma statement of financial position as at 30 June 2014 reflecting the Directors’ pro forma adjustments, (collectively, the “Financial Information”).

The Financial Information has been reported on by BDO Corporate Finance (WA) Pty Ltd as set out in the Investigating Accountant’s Report contained in Section 7. Investors should note the scope limitations of the Investigating Accountant’s Report (refer to Section 7 for further information).

Except as specified below, the Financial Information has been prepared and presented in accordance with the recognition and measurement principles of the Australian Accounting Standards issued by the Australian Accounting Standards Board, which are consistent with International Financial Reporting Standards and interpretations issued by the International Accounting Standards Board.

The Financial Information is presented in an abbreviated form insofar as it does not include all the presentation and disclosures required by Australian Accounting Standards and other mandatory professional reporting requirements applicable to general purpose financial reports prepared in accordance with the Corporations Act.

Mustera’s significant accounting policies have been consistently applied throughout the periods and are set out in Section 6.4 below.

The information in this Section should also be read in conjunction with the risk factors set out in Section 5 and other information contained in this Prospectus.

6.2 CONSOLIDATED HISTORICAL INCOME STATEMENTS

Overview

The consolidated financial statements of Mustera for the financial years ended 30 June 2012, 30 June 2013 and 30 June 2014 have been audited by BDO Audit (WA) Pty Ltd. BDO Audit (WA) Pty Ltd issued unqualified opinions in respect of these periods.

Figure 6.1 presents Mustera’s consolidated historical income statements for financial years ended 30 June 2012, 30 June 2013 and 30 June 2014.

Figure 6.1
	2014	2013	2012
	$	$	$
Revenue and other income
Rental income and recoverable outgoings	817,836	416,964	327,642
Interest	2,535	109,266	189,220
Gainonsale of investmentproperty	-	208,523	-
Total revenue and other income	820,371	734,753	516,862
Expenses
Property expenses and outgoings	134,076	-	-
Finance costs	441,250	672,066	527,416
Property development costs	2,700	-	-
Administration and overhead costs	168,041	61,469	32,632
Fair value movement on investment properties	30,094	-	-
Employee benefits expenses	34,626	-	-
Amortisationand depreciation	1,359	-	-
Total expenses	812,146	733,535	560,048
Profit/(loss) before income tax	8,225	1,218	(43,186)
Incometaxexpense	-	-	-
Net profit/(loss) for the year	8,225	1,218	(43,186)
Othercomprehensiveincomefor the year,netof tax	-	-	-
Total comprehensive income/(loss) for the year attributable to
the ordinary equity holders of the Company	8,225	1,218	(43,186)

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

FINANCIAL INFORMATION

6.3 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The pro forma consolidated historical statement of financial position shown in Figure 6.2 is based on the audited statutory consolidated historical statement of financial position as at 30 June 2014, adjusted for pro forma adjustments as if they were completed on 30 June 2014, which included the impact of the Offer which is expected to be completed on or around 20 November 2014.

Details of the pro forma adjustments made to the audited statutory consolidated historical statement of financial position for Mustera as at 30 June 2014 are set out in the notes to the historical financial information below.

The pro forma consolidated historical statement of financial position is provided for illustrative purposes only and is not represented as being necessarily indicative of Mustera’s view on its future financial position.

Figure 6.2

	Consolidated Audited 30 June 2014 Subsequent Events	Pro-forma Adjustments Minimum Subscription Pro-forma after Issue Minimum Subscription Pro-forma Adjustments Over Subscriptions Pro-forma after Issue Over Subscriptions
Note	$ $	$ $ $ $
Current assets
Cash and cash equivalents 6.3.3	100,999 1,156,666	1,725,000 2,982,665 3,615,000 4,872,665
Trade and other receivables	359,467 -	- 359,467 - 359,467
Other current assets	25,480 -	- 25,480 - 25,480
Total current assets	485,946 1,156,666	1,725,000 3,367,612 3,615,000 5,257,612

Non-current assets
Trade and other receivables	23,389 -	- 23,389 - 23,389
Inventories 6.3.4	4,996,518 -	- 4,996,518 - 4,996,518
Investment properties 6.3.5	6,200,000 -	- 6,200,000 - 6,200,000
Property, plant& equipment	11,750 -	- 11,750 - 11,750
Total non-currentassets	11,231,657 -	- 11,231,657 - 11,231,657
Total assets	11,717,603 1,156,666	1,725,000 14,599,269 3,615,000 16,489,269

Current liabilities
Trade and other payables	605,319 <350,000>	- 255,319 - 255,319
Borrowings	34,914 -	- 34,914 - 34,914
Total current liabilities	640,233 <350,000>	- 290,233 - 290,233

Non-current liabilities
Other payables	14,033 -	- 14,033 - 14,033
Borrowings 6.3.6 Total non-current liabilities Total liabilities Net assets	5,785,000 -	- 5,785,000 - 5,785,000
	5,799,033 -	- 5,799,033 - 5,799,033
	6,439,266 <350,000>	- 6,089,266 - 6,089,266
	5,278,337 1,506,666	1,725,000 8,510,003 3,615,000 10,400,003

Equity
Issued capital 6.3.7	5,333,485 1,506,666	1,725,000 8,565,151 3,615,000 10,455,151
Other reserves	29,228 -	- 29,228 - 29,228
Accumulated losses Total equity	(84,376) -	- (84,376) - (84,376)
	5,278,337 1,506,666	1,725,000 8,510,003 3,615,000 10,400,003

The pro-forma statement of financial position after the Issue is as per the audited statement of financial position before the Issue, adjusted for any subsequent events and the transactions relating to the issue of Shares pursuant to this Prospectus. The statement of financial position is to be read in conjunction with the notes to the historical financial information set out below.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

FINANCIAL INFORMATION

Notes to the historical financial information

6.3.1 Assumptions used in compiling the Pro Forma Consolidated Statement of Financial Position

The pro forma consolidated statement of financial position shown in Figure 6.2 is based on the audited statutory consolidated statement of financial position as at 30 June 2014 adjusted for pro forma adjustments as if they were completed on 30 June 2014. These included:

the raising of additional seed capital in July and August 2014 which provided $1,156,666 in cash after costs and resulted in the issue of 10,044,403 Shares, and
the impact of the Offer of 10,000,000 Shares at an issue price of $0.20 each to raise $2,000,000 before estimated costs of $275,000, which is the minimum subscription level for the Offer. Oversubscriptions of up to a further 10,000,000 Shares to raise up to a further $2,000,000 before estimated additional costs of 110,000 may be accepted. The Offer is expected to be completed on or about 20 November 2014.

Details of the pro forma adjustments made to the audited statutory consolidated historical statement of financial position for Mustera as at 30 June 2014 are set out in notes 6.3.3 and 6.3.4 below.

6.3.2 Statement of Significant Accounting Policies

The significant accounting policies adopted in the preparation of the historical financial information included in this section are set out below.

(a) Basis of preparation of historical financial information

The historical financial information has been prepared in accordance with the recognition and measurement, but not all the disclosure requirements, of the Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001, as appropriate for for-profit oriented entities.

The financial information has also been prepared on an historical cost basis, except for, where applicable, the revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss, investment properties, certain classes of property, plant and equipment and derivative financial instruments.

(b) Revenue recognition

Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.

Rent

Rent revenue from investment properties is recognised on a straight-line basis over the lease term. Lease incentives granted are recognised as part of the rental revenue. Contingent rentals are recognised as income in the period when earned.

Interest

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

(c) Income tax

Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences:

(i) except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
(ii) in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:

(i) except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
(ii) in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

6. FINANCIAL INFORMATION

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in the Statement of Profit or Loss and Other Comprehensive Income.

The Group has unused tax losses. However, no deferred tax balances have been recognised, as it is considered that asset recognition criteria have not been met at this time.

(d) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(e) Trade and other receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. Trade receivables are generally due for settlement within 30 days.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is objective evidence that the consolidated entity will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.

(f) Inventories

Property development

Development properties held for resale are stated at the lower of cost and net realisable value. Cost is assigned by specific identification and includes the cost of acquisition and development and borrowing costs during development. Net realisable value is determined on the basis of sales in the ordinary course of business. Expenses of marketing, selling and distribution to customers are estimated and deducted to establish net realisable value. Where the net realisable value of inventory is less than cost, an impairment expense is recognised in the consolidated income statement. Reversals of previously recognised impairment charges are recognised in the consolidated income statement such that the inventory is always carried at the lower of cost and net realisable value. When development is completed, borrowing costs and other holding charges are expensed as incurred.

(g) Investment properties

Investment property is property which is held either to earn income or for capital appreciation or both. Investment property also includes properties that are under construction for future use as investment properties. Initially, investment property is measured at cost including transaction costs. The investment property is subsequently measured at fair value, with any change therein recognised in profit or loss. As part of the process of determining fair value, an external, independent valuer, having an appropriate recognised professional qualification and experience in the location and category of property being valued, values individual properties periodically as considered appropriate and as determined by management.

In addition, the Group may utilise internal valuation processes for determining fair value at balance date. These valuation processes are taken into consideration when determining the fair value of the investment properties. The fair value is based on market values, being the estimated amount for which a property could be exchanged 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 knowledgably, prudently and without compulsion. The valuations are prepared by considering the capitalisation of net income and the discounting of future cash flows to their present value. These methods incorporate assumptions of future rental income and costs, appropriate capitalisation and discount rates and also consider market evidence of transaction prices for similar investment properties.

Valuations reflect, where appropriate:

the type of tenants actually in occupation or responsible for meeting lease commitments or likely to be in occupation after letting of vacant accommodation and the market’s general perception of their creditworthiness;
the allocation of maintenance and other operating cost responsibilities between lessor and lessee; and
the remaining economic life of the property.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

FINANCIAL INFORMATION

(h) Property, plant and equipment

Items of property, plant and equipment are measured at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows:

• Furniture & fittings 5-10 years

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.

(i) Trade and other payables

Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the Group. Trade accounts payable are normally settled within 30 days. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

(j) Borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.

Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, borrowings are classified as non-current.

(k) Issued capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

(l) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of GST except where GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Consolidated Statement of Financial Position.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(m) Accounting estimates and judgements

In the process of applying the accounting policies, management has made certain judgements or estimations which have an effect on the amounts recognised in the financial information.

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Valuation of investment properties held at fair value

The Group makes judgements in respect of the fair value of investment properties (Note (g) above). The fair value of these properties are reviewed regularly by management with reference to external independent property valuations and market conditions existing at reporting date, using generally accepted market practices. The assumptions underlying estimated fair values are those relating to the receipt of contractual rents, expected future market rentals, maintenance requirements, capitalisation rates and discount rates that reflect current market conditions and current or recent property investment prices. If there is any material change in these assumptions or regional, national or international economic conditions, the fair value of investment properties may differ and may need to be reestimated.

Inventories

The net realisable value of inventories is the estimated selling price in the ordinary course of business less estimated costs to sell which approximates fair value less costs to sell. The key assumptions require the use of management judgement and are reviewed annually. These key assumptions are the variables affecting the estimated costs to develop and sell and the expected selling price. Any reassessment of cost to develop and sell or selling price in a particular year will affect the cost of goods sold.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

6. FINANCIAL INFORMATION

6.3.3 Cash and cash equivalents

*6.3.3* *Cash and cash equivalents*
Audited 30 June 2014 $	Pro-forma Pro-forma
	after Issue Minimum Subscription after Issue Over Subscriptions
	$ $
Cash and cash equivalents 100,999	2,982,665 4,872,665

Adjustments to arrive at the pro-forma balance:
Audited balance as at 30 June 2014	100,999 100,999
Subsequent events:
ProceedsfromSharesissuedto seedinvestors	1,156,666 1,156,666
	1,156,666 1,156,666
Pro-forma adjustments:
Proceeds from Shares issued under this Prospectus	2,000,000 4,000,000
Cashcosts of the Offer	(275,000) (385,000)
	1,725,000 3,615,000

Pro-forma Balance	2,982,665 4,872,665

6.3.4 Inventories

	*6.3.4* *Inventories*
	Pro-forma Pro-forma Audited 30 June 2014 after Issue Minimum Subscription after Issue Over Subscriptions $ $ $


	Land and property held for development and resale (at cost) 4,996,518 4,996,518 4,996,518

	Inventories are comprised as follows:
	82 Belmont Avenue, Rivervale WA * 3,222,379 3,222,379 3,222,379
	Lot 803 Foundry Road, Midland WA 1,774,139 1,774,139 1,774,139
	4,996,518 4,996,518 4,996,518

Borrowings (refer Note 6.3.6) are partly secured by a registered mortgage over this property.

6.3.5 Investment properties

	*6.3.5* *Investment properties*
	Pro-forma Pro-forma Audited 30 June 2014 after Issue Minimum Subscription after Issue Over Subscriptions $ $ $


	Investmentproperties at fair value 6,200,000 6,200,000 6,200,000

	Investment properties comprise the following:
	239-251Woodpark Road, Smithfield NSW* 6,200,000 6,200,000 6,200,000

Borrowings (refer Note 6.3.6) are partly secured by a registered mortgage over this property.

The investment property is leased on a long term operating lease with rental payable monthly. Minimum lease commitments receivable but not recognised in the financial statements are as follows:	544,000 2,176,000 2,067,200
Within one year
One to five years
Morethan5 years
	4,787,200

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

FINANCIAL INFORMATION

6.3.6 Loans and borrowings

*6.3.6* *Loans and borrowings*
			Pro-forma	Pro-forma
			after Issue	after Issue
		Audited	Minimum	Over
	30	June 2014	Subscription	Subscriptions
		$	$	$
Non-current loans – financial institutions -secured		5,785,000	5,785,000	5,785,000

Details of the loan facility are as follows:

			Facility limit	Utilised
		Maturity	30 June 2014	30 June 2014
Property	Secured	Date	$	$
82 Belmont Avenue, Rivervale WA	Yes	July 2017	1,950,000	1,950,000
239-251Woodpark Road, Smithfield NSW	Yes	July 2018	3,835,000	3,835,000

The loan facility is secured by registered mortgages over the Rivervale and Smithfield properties held by the Company and a registered fixed and floating charge over the assets of the Company. Further details of the loan facility are contained at Section 10.8 of this Prospectus.

6.3.7 Issued capital

*6.3.7* *Issued capital*
	Pro-forma Pro-forma Audited 30 June 2014 after Issue Minimum Subscription after Issue Over Subscriptions $ $ $ 5,333,485 8,565,151 10,455,151

NOTE 3. CONTRIBUTED EQUITY
Issued capital

Fully paid ordinary share capital	Number of shares $ Number of shares $ 61,666,665 5,333,485 61,666,665 5,333,485 10,044,443 1,506,666 10,044,443 1,506,666
Adjustments to arrive at the pro- forma balance:
Audited balance as at 30 June 2014
Subsequent events:

Shares issued to seed investors
	10,044,443 1,506,666 10,044,443 1,506,666
	10,000,000 2,000,000 20,000,000 4,000,000 - (275,000) - (385,000)
Pro-forma adjustments:
Shares issued under this Prospectus
Cash costs of the Offer
	10,000,000 1,725,000 20,000,000 3,615,000
	81,711,108 8,565,151 91,711,108 10,455,151
Pro-forma Balance

6.3.8 Forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

As a consequence, the Directors believe the Company is not in a position to disclose a reliable forecast in this Prospectus other than its pro forma statement of financial position as set out above.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au

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15 October 2014

The Directors Mustera Property Group Ltd Suite 7, 61 Hampden Road Nedlands WA 6009

Dear Directors

INVESTIGATING ACCOUNTANT’S REPORT

1. Introduction

We have been engaged by Mustera Property Group Ltd ( ‘Mustera’ or ‘the Company’ ) to prepare this Investigating Accountant’s Report (‘ Report’ ) on the historical and pro forma financial information of Mustera for inclusion in an initial public offering Prospectus to be issued by the Company in respect of the Offer and listing on the Australian Securities Exchange. Broadly, the Prospectus will offer 10 million Shares at an issue price of $0.20 each to raise $2 million before costs ( ‘the Offer’ ). This is the minimum subscription for the Offer. The Company reserves the right to accept oversubscriptions of up to $2 million from the issue of a further 10 million shares.

Expressions defined in the Prospectus have the same meaning in this Report.

BDO Corporate Finance (WA) Pty Ltd ( ‘BDO Corporate Finance’ ) holds an Australian Financial Services Licence (AFSL Number 316158).

2. Scope

The Company has requested BDO Corporate Finance to prepare this Report to cover the following financial information:

Historical Financial Information

The Historical Financial Information detailed in Sections 6.2 and 6.3 of the Prospectus, which comprises:

the Statement of Profit or Loss and Other Comprehensive Income for the years ended 30 June 2012 ( ‘FY12’ ), 30 June 2013 ( ‘FY13’ )and 30 June 2014 ( ‘FY14’ ); and
the Statement of Financial Position as at 30 June 2014.

The Historical Financial Information for FY12, FY13 and FY14 has been audited by BDO Audit on which an unqualified audit opinions was issued in respect of FY14. FY12 and FY13 were unqualified but included an emphasis of matter in relation to the basis of preparation as special purpose rather than general purpose accounts were prepared.

BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 AFS Licence No 316158 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Corporate Finance (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Pro Forma Financial Information

The pro forma financial information as detailed in Section 6.3 of the Prospectus comprises the Pro Forma Statement of Financial Position as at 30 June 2014.

The Pro Forma Statement of Financial Position assumes Completion of the Offer under both the minimum subscription and the over subscription amounts.

3. Directors’ responsibility

The Directors are responsible for the preparation of the Historical Financial Information and the pro forma financial information, including the selection and determination of pro forma adjustments included in the Pro Forma Statement of Financial Position. This includes responsibility for such internal controls as the Directors determine are necessary to enable the preparation of Historical Financial Information and the Pro Forma Statement of Financial Position are free from material misstatement, whether due to fraud or error.

4. Our responsibility

Financial Information

The Investigating Accountant’s responsibility is to express a limited assurance conclusion on the Financial Information based on the procedures performed and the evidence we have obtained. We have conducted our engagement in accordance with the Standard on Assurance Engagement ASAE 3450 Assurance Engagements involving Corporate Fundraisings and/or Prospective Financial Information .

We have reviewed the Financial Information in order to state whether, on the basis of the procedures described, anything has come to our attention that would cause us to believe that the Financial Information is not prepared, in all material aspects, by the Directors on the basis of the stated basis of preparation.

Our review of the Financial Information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain reasonable assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Our review of the Financial Information did not involve updating or re-issuing any previously issued audit or review report on any financial information used as a source of the Historical Financial Information and Pro forma Statement of Financial Position.

5. Conclusion

Conclusion on the Financial Information

Based on our review, which was not an audit, nothing has come to our attention which would cause us to believe the Financial Information does not present fairly, in all material aspects:

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the Statement of Profit or Loss and Other Comprehensive Income for FY12, FY13 and FY14;
the Statement of Financial Position as at 30 June 2014; and
the Pro Forma Statement of Financial Position as at 30 June 2014,

in accordance with the recognition and measurement requirements (but not all the presentation and disclosure requirements) of Australian Accounting Standards and the accounting policies adopted by Mustera.

6. Consent

BDO Corporate Finance has consented to the inclusion of this Report in the Prospectus in the form and context in which it is included. At the date of this Report, this consent has not been withdrawn.

7. Disclosures

BDO Corporate Finance is the corporate advisory arm of BDO in Perth. Without modifying our conclusions, we draw attention to Section 6 the Prospectus, which describes the purpose of the Financial Information, being for inclusion in the Prospectus. As a result, the Financial Information may not be suitable for use for another purpose.

Neither BDO Corporate Finance nor BDO, nor any director or executive or employee thereof, has any financial interest in the outcome of the proposed transaction except for the normal professional fee due for the preparation of this Report.

Yours faithfully BDO Corporate Finance (WA) Pty Ltd

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Adam Myers Director

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12 September 2014

Mr Nick Zborowski Director Mustera Property Group Limited Suite 7, 61 Hampden Road Nedlands WA 6009

Dear Nick,

RE: VALUATION � 239-251 WOODPARK ROAD, SMITHFIELD NSW

Instructions

We refer to your instructions requesting Knight Frank Valuations to prepare a market valuation of the abovementioned property subject to 1) existing lease and 2) vacant possession for inclusion in a Prospectus (noting valuation date being 5 August 2014).

In accordance with Corporations Act, Market Value means:

�The estimated amount for which an asset should exchange on the date of valuation, taking into account the value of all estates in that property, and based on the price at which the property might reasonably be expected to be sold at the date of the valuation� , assuming:

(i) a willing, but not anxious, buyer and seller;
(ii) a reasonable period within which to negotiate the sale having regard to the nature and situation of the property and the state of the market for property of the same kind;
(iii) that the property was reasonably exposed to the market;
(iv) that no account is taken of the value or other advantage or benefit, additional to market value, to the buyer incidental to ownership of the property being valued;
(v) that the entity has sufficient resources to allow a reasonable period for the exposure of the property for sale; and
(vi) that the entity has sufficient resources to negotiate an agreement for sale of the property.

In formulating our valuation, we have relied upon property information provided by Mustera Property Group Limited, including, but not limited to the following:

Current partial outgoings.

Building plans.

Information regarding status of tenancy and passing income.

Level 4, 60 Miller Street, North Sydney NSW 2060 T+61 (0) 2 9028 1100 F+61 (0) 2 9028 1198 PO Box 1952, North Sydney NSW 2059 www.knightfrank.com.au

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Valuations Services (NSW) Pty Ltd ABN: 83 079 862 990, trading under licence as Knight Frank Valuations, is independently owned and operated, is not a member of and does not act as agent for the Knight Frank Group.TM Trade mark of the Knight Frank Group used under licence.

Mustera Property Group Limited

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Where possible, within the scope of our retainer and limited to our expertise as valuers, we have reviewed this information including by analysis against industry standards. Based upon that review, we have no reason to believe that the information is not fair and reasonable or that material facts have been withheld. However, our enquiries are necessarily limited by the nature of our role and we do not warrant that we have identified or verified all of the matters which a full audit, extensive examination or �due diligence� investigation might disclose.

Our valuation is conditional on the following:

Our valuation is conditional that there is no potential conflict of interest / related party entities in relation to the current owner of the subject property (Mustera Property Group Limited) and the current tenant (Origin Oz Pty Limited).
Under the terms of the existing lease, the ownership of the gantry cranes (currently 2 x 6.3 tonne cranes) within the warehouse passes to the Landlord at lease expiry. Our valuation herein ascribes no value to the potential realisable value of such fixtures at expiry, nor does it incorporate a cost to remove the cranes from the warehouse.
In accordance with the Limited Hazardous Materials & Targeted Environmental Assessment report provided, we recommend that the owner commission a Hazardous Materials / Asbestos Register and/or Management Plan at the property to confirm the level of hazardous materials present on site. Should such a report indicate material capital expenditure (or preclude continued industrial usage of the property), the matter should be referred to the valuer for comment and consideration as to the potential effect on value.
Gross Lettable Area of 5,283.5m² subject to the building plans provided (as prepared by RealServe dated February 2013).
Our valuation is conditional upon the sound structural condition of the building, fully operational building services and compliance with building, health and fire safety regulations. Any known or discovered structural deficiencies should be referred to the Valuer for review if warranted.
Our valuation is conditional upon the building being fully contained within the boundaries of the site. Our valuation is conditional on the site not being contaminated and should subsequent investigations show the site is contaminated, our valuation will require revision.
Our valuation is conditional upon there being no encumbrances or interests other than those on title which materially affect the value, marketability and continued utility of the property.
While all reasonable endeavours have been made to clarify the accuracy of the information provided, it is assumed that the information provided by our client and / or their representatives consists of a full and frank disclosure of all information that is relevant.

We have disregarded the presence of any mortgage or other financial liens pertaining to the property.

We also note that the valuation is current as at the date of valuation only we can give no guarantee that the properties or valuations have not altered since the date of valuation.

For further information, reference should also be made to our full Valuation Report dated 5 August 2014. This correspondence is subject to and should be read in conjunction with all qualifications, assumptions, conditions and disclaimers contained within that report.

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239-251 Woodpark Road, Smithfield NSW File Reference: N2661

Page 2

12 September 2014

Mustera Property Group Limited

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Valuation Summary

We have assessed the Market Value of the property subject to the existing lease (to Origin Oz Pty Limited), as at 3 September 2014, at $6,200,000 (GST Exclusive) whilst we have assessed the Market Value of the property subject to vacant possession, as at 3 September 2014, at $5,500,000 (GST Exclusive) .

Brief Description of the Property

Erected upon the land constructed circa 1984, is a medium to high clearance industrial warehouse with associated offices extending to a combined GLA of approximately 5,283.5m². Internal clearances in the warehouse range between 8.2 � 9.9 metres and the space is not spinklered. The site cover is approximately 31% with surplus concrete hardstand of approximately 3,080m² (to which we have ascribed a value) and a rear strip of buffer land (approximately 3,100m² - which we have not ascribed a value to). A total of 30 marked car parking spaces are provided on-grade (1:176m²). The property is situated on the northern side of Woodpark Road, approximately 100 metres east of the Dupas Street intersection at Smithfield.

Tenancy Overview

A synopsis of the current lease follows.

Lessee	Origin Oz PtyLimited
Demised Premises	Part Folio Identifier being 239-251 Woodpark Road, Smithfield being the warehouse, office, front carpark and surroundingcurtilage.
Commencement Date	19 December 2012
Term	10years and 4 months.
Expiry	18 April 2023
Options	5 + 5 + 5years
Incentive	Not stated.
Commencing Rental	$544,000per annum netplus GST ($103/m²)
Rental Review	Annually to the greater of CPI & 3.0%. Effective market review with a collar to thegreater of CPI & 3.0% on 19 April 2018.
Passing Rental	$560,320per annum netplus GST ($106/m²)
Outgoings	The lease is drawn on net terms. Should the Lessor lease the hardstand, the Lessee�s outgoings contribution is reduced by$15,000per annum.
GST	Payable bythe Lessee.
Make Good	The Lessee is required to remove their equipment and repair anydamage.
Redecoration	Applicable at lease expiry.
Gantry Cranes	The Lessee agrees to leave 2 gantry cranes in situ (and in good working order) at lease expiry at whichpoint the ownershiptransfers to the Lessor.
Other Matters	The Lessee warrants that their use of the land is lawful under the relevant zoning. The Lessee is responsible for soil contamination caused during their tenure. There is no bank guarantee, security deposit or guarantor required under the lease (i.e. no income security). The land shown as �excluded area� in the copy plan attached hereto as annexure �A� shall not form part of this lease and in the event that the lessor grants a lease for the excluded area (�the other lease�) then the total amount of outgoings payable by the lessee shall be reduced by$15,000peryear for the duration of the other lease.

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239-251 Woodpark Road, Smithfield NSW File Reference: N2661

Page 3

12 September 2014

Mustera Property Group Limited

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Market Commentary

Further yield compression is being recorded in the investment market with strong levels of capital inflow looking for exposure to the sector. Average prime yields range between 7.75% and 8.50% (based on a five year WALE), however modern assets with long lease durations would trade well below this range. After tracking at the bottom of the cycle for around three years, the value of medium and large sized land parcels have started appreciating. Driving the growth is competition for a limited amount of developable land parcels for sale, with demand stemming from both owner occupiers and developers looking to restock depleted inventory levels.

Industrial tenant demand has been relatively modest over the past 12 months and as a result rents have remained largely unchanged. The exception has been the South, where prime rents increased 3.5% in the year to April 2014. However, led by the lift in housing construction and retail spending, the macro drivers for the NSW industrial market are starting to provide the basis for an improvement in tenant demand, although this is yet to materialise in leasing deal activity.

In the year to April, gross take up (excl. D&C�s) for lease deals in excess of 5,000m² amounted to 479,599m². Although this represents a 12% decline compared to the previous corresponding period, there has been a notable increase in the uptake of prime stock. Since mid-2013 gross take-up of prime grade stock has measured 174,692m² compared to 84,331m² for secondary. Coupled with pre-lease activity, which is not included in these absorption figures, prime demand is substantially outpacing that for secondary. This had not been the case in the preceding 12 months, when a number of tenants behaved cautiously and utilised cheaper secondary options with shorter lease terms.

Gross supply of industrial projects (in excess of 5,000m²) is forecast to measure 412,015m² in 2014. Although relatively in line with last year, this amount of supply is 29% below the 10 year average and continues a period of relatively low development levels. The majority of new supply is located in the Outer West region, which accounts for 61.2% of the 2014 forecast total and includes the six largest projects. A significant proportion of these 2014 projects stem from the logistics sector with pre-lease facilities to tenants such as Toll (53,305m²), DHL (31,745m²) and Kuehne + Nagel (20,500m²).

Valuation Analysis & Assumptions

The following schedule summarises relevant comparable industrial investment sales which have been considered in the preparation of our valuation.

Property	Price	Date	Initial Yield	Core Market Yield	$/m² GLA
McCredie Road,Guildford	$8,900,000	Dec 2012	11.36%	9.66%	$870
375 Victoria Street, Wetherill Park	$5,450,000	Mar 2012	9.27%	9.27%	$996
7A Bessemer Street, Blacktown	$11,000,000	Feb 2013	10.30%	N/A	$922
26 Steel Street,Blacktown	$4,800,000	Jun 2013	8.38%	N/A	$968
53 Britton Street, Smithfield	$20,139,610	Sep 2013	9.02%	9.02%	$1,494

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239-251 Woodpark Road, Smithfield NSW File Reference: N2661

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12 September 2014

Mustera Property Group Limited

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The adopted value of $6,200,000 (exclusive of GST) on the property subject to existing lease reflects the following investment and value parameters:

Core market yield	:	9.24%
Passing initial yield	:	9.04%
Rate per m² of GLA	:	$1,173/m²
Rate per m² of Site Area Improved	:	$308/m²

The adopted value of $5,500,000 (exclusive of GST) on the property subject to vacant possession reflects the following investment and value parameters:

Core market yield	:	8.46%
Passing initial yield	:	N/A
Rate per m² of GLA	:	$1,041/m²
Rate per m² of Site Area Improved	:	$273/m²

Yield Definitions

*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price plus adjustments to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc). In essence, this yield is risk adjusted.

Qualifications & Disclaimers

Knight Frank Valuations have prepared this summary which appears in this Prospectus for Mustera Property Group Limited. Knight Frank Valuations were involved only in the preparation of this summary and the valuation referred to therein, and specifically disclaim liability to any party in the event of any omission from, or false or misleading statement included in, the Prospectus or other document, other than in respect of our valuation and this letter.

Knight Frank Valuations has consented to this summary being included in this Prospectus, but Knight Frank Valuations is not providing advice about a financial product, nor the suitability of the investment set out in this Prospectus. Such an opinion can only be provided by a person that holds an Australian Financial Services Licence. Knight Frank Valuations does not hold such a licence and is not operating under any such licence in providing its opinions of value as detailed in this summary and our valuation reports.

In the case of advice provided within this report which is of a projected nature, we must emphasise that specific assumptions have been made which appear reasonable based upon current market perceptions. It follows that any one of the assumptions set out in the text of this summary may be proved incorrect during the course of time and no responsibility can be accepted in this event.

This valuation is current at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period (including as a result of general market movements or factors specific to the particular property). We do not accept liability for losses arising from such subsequent changes in value.

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239-251 Woodpark Road, Smithfield NSW File Reference: N2661

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12 September 2014

Mustera Property Group Limited

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Without limiting the generality of the above comment, we do not assume any responsibility or accept any liability where this valuation is relied upon after the expiration of three (3) months from the date of valuation, or such earlier date if you become aware of any factors that have any effect on the valuation.

Knight Frank Valuations has prepared this letter based upon information provided. We have no reason to believe that the information is not fair and reasonable or that material facts have been withheld and for the purpose of this valuation we have assumed that the information is correct.

This valuation does not purport to be a site or structural survey of the improvements, nor was any such survey undertaken. Overall, we have assumed that detailed reports with respect to the structure and service installation of the improvements both would not reveal any defects or inadequacies requiring significant capital expenditure.

Knight Frank Valuations has received fees of $8,000 (exclusive of GST) in connection with the preparation of our valuation and this summary. The fee is not in any way linked to nor has it influenced the opinion of value noted and Knight Frank Valuations does not have any pecuniary interest in Mustera Property Group Limited and has provided this report solely in its capacity as independent professional advisor.

Yours faithfully

KNIGHT FRANK VALUATIONS

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JAMES POPOVIC MProDev AAPI Registered Valuer No. VAL011298 Senior Valuer

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T.M. PHELAN FAPI Divisional Director (Counter-signatory only)

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239-251 Woodpark Road, Smithfield NSW File Reference: N2661

Page 6

12 September 2014

BOARD, MANAGEMENT AND CORPORATE GOVERNANCE

9.1 MUSTERA BOARD

Mr Nicholas Zborowski

Executive Director

Nicholas has more than 15 years’ experience in the property development and funds management industry and has managed a diverse range of projects and portfolios in Australia, Europe and the Middle East.

Prior to joining Mustera, Nicholas was the managing director at Quintessential Places Pty Ltd, a Sydney based development and investment company. He has also held senior roles with Charter Hall Ltd, Tourism Development Investment Company (TDIC), Emaar Malls Group and Australand Ltd.

Nicholas has a Bachelor of Commerce with a major in Property from Curtin University, Western Australia.

Mr Anthony Ho, BCom, CA Non-Executive Director

Anthony qualified as a Chartered Accountant in 1983 with Deloitte and is presently the principal of a public practice, Anthony Ho and Associates, specialising in providing corporate and financial services to ASX-listed companies.

Prior to establishing his practice in 1991, he spent 7 years in a senior corporate role with a major investment and resource group in Western Australia. He is currently a director of a number of companies listed on the ASX.

Mr Ho is a commerce graduate of the University of Western Australia.

Mr Benjamin Young, BBus

Non-Executive Director

Benjamin is the founder and former Managing Director of Mustera, and has a wealth of experience in financial markets.

Benjamin has held senior positions with major banks including Westpac and ANZ both in Australia and overseas. Benjamin’s last position in the financial market was as the Director, Head of Trading of American Express Bank, Jakarta, Indonesia.

Benjamin has a Bachelor of Business degree with a major in Finance and Banking from Edith Cowan University, Western Australia. He is also a senior associate member of the Australian Institute of Banking since 1994.

Mr Jack Spencer-Cotton

Non-Executive Director

Jack has been involved in the field of engineering for over 20 years. He has held a range of senior engineering roles in international manufacturing companies, as well as established his own business in electronics engineering and consulting.

Jack is experienced in automation engineering, project planning, and team management in large scale projects. He has previously held senior engineering positions at ERG Group Ltd, Sanmina-SCI Corporation, and SRX Global. He is presently a capital projects engineer at Pfizer Perth.

9.2 COMPANY SECRETARY

Mr Kim Hogg, BCom

Company Secretary

Kim completed his Bachelor of Commerce in 1984 at the University of Western Australia and has worked in a number of diverse industries in various senior management and accounting roles. He has been a principal of an accounting practice for more than 20 years with a specialist involvement in the preparation of prospectuses, coordinating the listing and due diligence processes and acting as company secretary for listed entities.

Kim is currently the secretary of a number of ASX-listed companies and provides corporate and accounting advice and services to these clients.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

BOARD, MANAGEMENT AND CORPORATE GOVERNANCE

9.3 CORPORATE GOVERNANCE

This Section 9.3 explains how the Board will oversee the management of the Company’s business. The Board is responsible for the overall corporate governance of the Company. The Board monitors the operational and financial position and performance of the Company and oversees its business strategy including approving the strategic goals of the Company. The Board is committed to maximising performance, generating financial returns and greater value for Shareholders, and achieving growth and success of the Company. In conducting the Company’s business with these objectives, the Board seeks to ensure that the Company is properly managed to protect and enhance Shareholder interests, and that the Company, and its Directors, officers and personnel operate in an appropriate environment of corporate governance. Accordingly, the Board has created a framework for managing the Company including adopting corporate governance policies and practices which it believes are appropriate for the Company’s business and which are designed to promote the responsible management and conduct of the Company.

The main policies and practices adopted by the Company, which will take effect from the Company’s listing on ASX, are summarised below. In addition, many governance elements are contained in the Constitution. The Company’s code of conduct outlines how the Company expects Directors and other personnel to behave and conduct business in a range of circumstances. In particular, the code specifies standards of honesty, integrity, ethical and law-abiding behaviour expected of Directors, management and employees and requires awareness of, and compliance with, laws and regulations relevant to the Company’s operations as well as other policies that Directors and employees are required to comply with, including occupational health and safety, privacy and fair dealing and conflict of interest. Details of the Company’s key policies and practices and the charters for the Board and each of its committees will be available at www.mustera.com.au.

The Company is seeking a listing on the ASX. The ASX Corporate Governance Council has developed and released its Corporate Governance Principles and Recommendations for Australian listed entities (“ ASX Recommendations ”) in order to promote investor confidence and to assist companies in meeting stakeholder expectations. The ASX Recommendations are not prescriptive, but guidelines. However, under ASX Listing Rules, the Company is required to provide a statement disclosing the extent to which it will follow, as at the date of its admission to the Official List, the recommendations set by the ASX Corporate Governance Council. Where the Company does not intend to follow a recommendation, it must separately identify the recommendation that will not be followed and state its reasons for not following the recommendation, and what (if any) alternative governance practices it intends to adopt in lieu of the recommendation. The Company’s departures from the ASX Recommendations are identified in Section 9.3.9.

9.3.1 Board of Directors

The Board of Directors comprises one Executive Director and three Non-Executive Directors. The Company presently does not have a chairman.

Biographies of the Board members are provided in Section 9.1.

The Board considers an Independent Director to be a Non-Executive Director who is not a member of the Company’s Management and who is free of any business or other relationship that could materially interfere with, or reasonably be perceived to interfere with, the independent exercise of their judgement. The Board reviews the independence of each Director in light of interests disclosed to the Board from time to time.

The Board charter sets out guidelines and thresholds of materiality for the purpose of determining the independence of Directors in accordance with the ASX Recommendations and has adopted a definition of independence that is based on that set out in the ASX Recommendations.

The Board considers that each of Anthony Ho, Benjamin Young and Jack Spencer-Cotton is an Independent Director for the purpose of the ASX Recommendations as each is free from any interest, position, association or relationship that could materially interfere with, or reasonably be perceived to materially interfere with, the independent exercise of their judgement. Nicholas Zborowski is an Executive Director of the Company and therefore, not independent.

Accordingly, the Board will consist of 75% Independent Directors and no Chairman has been appointed. Regardless, the Board considers that each of the Non-Executive Directors brings objective and independent judgement to the Board’s deliberations and that each of the Non-Executive Directors makes a valuable contribution to the Company through the skills they bring to the Board and their understanding of the Company’s business.

9.3.2 Board charter

The Board considers that strong and effective corporate governance can add to the Company’s performance, create value for Shareholders, and engender investor confidence. To that end, the Board has adopted a written charter to provide a framework for the effective operation of the Board, which sets out:

the Board’s composition;
the Board’s role and responsibilities;
the relationship and interaction between the Board and Management; and
the authority delegated by the Board to Management and Board committees.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

BOARD, MANAGEMENT AND CORPORATE GOVERNANCE

The Board’s role is to, among other things:

represent and serve the interests of Shareholders by overseeing and appraising the Company’s strategies, policies and performance;
oversee the Company, including its control and accountability systems;
oversee the nomination and appointment, and monitor the performance of, Management;
conduct succession planning for Management;
review performance, operations and compliance reports from the Executive Director, including reports and updates on strategic issues and risk management matters;
review and ratify systems of risk management, internal compliance and control, codes of conduct and legal compliance to ensure appropriate compliance frameworks and controls are in place;
monitor Management’s performance, implementing strategy and seeking to ensure appropriate resources are available;
approve and monitor the progress of major capital expenditure, capital management and acquisitions and divestments;
approve budgets;
approve and monitor corporate, financial position and other reporting systems including external audit and overseeing their integrity;
identify the risk appetite within which the Board expects Management to operate and approve and monitor systems of risk management, accountability, internal compliance and control and legal compliance to ensure that appropriate compliance frameworks and controls are in place; and
adopt appropriate procedures to ensure compliance with all laws, governmental regulations and accounting standards, including establishing procedures to ensure the financial results are appropriately and accurately reported on a timely basis in accordance with all legal and regulatory requirements.

Matters which are specifically reserved for the Board or its committees include:

appointment of the Chairman;
appointment and removal of the CEO;
appointment of Directors to fill a vacancy or as an additional Director;
establishment of Board committees, their membership and their delegated authorities;
approval of dividends;
review of corporate codes of conduct;
approval of major capital expenditure, acquisitions and divestments in excess of authority levels delegated to Management;
calling of meetings of Directors or Shareholders; and
any other specific matters nominated by the Board from time to time.

The management function is conducted by, or under the supervision of, the Executive Director as directed by the Board (and by officers to whom the management function is properly delegated by the Executive Director). Management must supply the Board with information in a form, timeframe and quality that will enable the Board to discharge its duties effectively. Directors are entitled to access Management and to request additional information at any time they consider it appropriate. The Board collectively, and individual Directors, may seek independent professional advice at the Company’s reasonable expense, and the advice received being made available to the Board as a whole.

9.3.3 Board committees

The Board may from time to time establish appropriate committees to assist in the discharge of its responsibilities.

The Board has established an Audit and Risk Committee.

Other committees may be established by the Board as and when required. Membership of Board committees will be based on the needs of the Company, relevant legislative and other requirements and the skills and experience of individual Directors.

Audit and Risk Committee

Under its charter, the Audit and Risk Committee must have at least two members, a majority of whom should be independent Directors and all of whom should be Non-Executive Directors. Under its charter, the Committee shall appoint a chairman who should be an appropriately qualified independent Director and must not be Chairman of the Board. Also, at least one member should be a qualified accountant or other financial professional with appropriate expertise of financial and accounting matters. Currently, Anthony Ho and Benjamin Young are members of the Committee, with Mr Ho the Chairman.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

BOARD, MANAGEMENT AND CORPORATE GOVERNANCE

The primary role of the Audit and Risk Committee is to assist the Board in carrying out its accounting, auditing, financial reporting and risk management responsibilities, including:

overseeing the Company’s financial reporting and disclosure processes, including assessment of the appropriateness and application of the Company’s accounting policies and principles and any changes to them;
reviewing all half yearly and annual reports with Management, advisers and the auditors (as appropriate) and recommending the applicable accounts’ adoption by the Board;
overseeing the establishment and implementation of risk management and internal compliance and control systems and ensuring that there is a mechanism for assessing the ongoing efficacy of those systems;
reviewing and approving the terms of engagement of the external auditor at the beginning of each financial year;
approving policies and procedures for appointing or removing an external auditor and for external audit engagement partner rotation; and
meeting periodically with the external auditor and inviting the external auditor to attend Committee meetings to assist the Committee to discharge its obligations.

9.3.4 Risk Management Policy

The identification and proper management of the Company’s risks are an important priority of the Board. The Company has adopted a risk management policy appropriate for its business. The policy highlights the Company’s commitment to designing and implementing systems and methods appropriate to minimise and control its risks.

The Board is responsible for overseeing and approving risk management strategy and policies, including reviewing and ratifying the risk management structure, process and guidelines which are to be developed, maintained and implemented by Management. To assist the Board in discharging these obligations, the Board has delegated certain functions to the Audit and Risk Committee. The responsibilities of that Committee include overseeing the establishment and implementation of risk management and internal compliance and control systems and reviewing the Company’s financial risk management procedures to ensure that it complies with its legal obligations, including assisting the CEO and CFO (or equivalents) to provide declarations required under section 295A of the Corporations Act.

9.3.5 Continuous Disclosure Policy

Once listed on the ASX, the Company will be required to comply with the continuous disclosure requirements of the ASX Listing Rules and the Corporations Act. Subject to the exception contained in the ASX Listing Rules, the Company will be required to disclose to the ASX any information concerning the Company which is not generally available and which a reasonable person would expect to have a material effect on the price or value of the Shares. The Company is committed to observing its disclosure obligations under the ASX Listing Rules and the Corporations Act.

The Company has adopted a policy to take effect once it is listed on the ASX which establishes procedures aimed at ensuring that Directors and Management are aware of and fulfil their obligations in relation to the timely disclosure of material price-sensitive information.

Under the disclosure policy, the Board will be responsible for managing the Company’s compliance with its continuous disclosure obligations. Continuous disclosure announcements will also be made available on the Company’s website, www.mustera.com.au.

9.3.6 Securities Trading Policy

The Company has adopted a securities trading policy which will apply to the Company and its Directors, officers and employees, including those persons having authority and responsibility for planning, directing and controlling the activities of the Company, whether directly or indirectly. The policy is intended to explain the prohibited type of conduct in relation to dealings in securities under the Corporations Act and to establish procedures in relation to dealings in Shares by Directors, Management or employees.

The policy defines certain closed periods during which trading in Shares by the Company’s Directors and other persons having authority and responsibility for planning, directing and controlling the activities of the Company, whether directly or indirectly (and any associates of those people) is prohibited. The closed periods are currently defined as:

the period commencing one month prior to the release of the Company’s half-yearly results to ASX and ending 24 hours after such release;
the period commencing one month prior to the release of the Company’s full year results to ASX and ending 24 hours after such release;
the period commencing two weeks prior to the Company’s annual general meeting and ending 24 hours after the annual general meeting; and
any additional periods determined by the Board from time to time.

During closed periods, unless certain exceptions (set out in the policy) apply, Directors and other persons having authority and responsibility for planning, directing and controlling the activities of the Company, whether directly or indirectly, must receive clearance for any proposed dealing in Shares, which will only be provided in exceptional circumstances. In all instances, buying or selling of Shares is not permitted at any time by any person who possesses price-sensitive information.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

BOARD, MANAGEMENT AND CORPORATE GOVERNANCE

9.3.7 Code of conduct

The Board recognises the need to observe the highest standards of corporate practice and business conduct. Accordingly, the Board has adopted a formal code of conduct to be followed by all employees and officers.

The key aspects of this code are that employees and directors are to:

act with honesty, integrity and fairness and in the best interests of the Company, and in the reasonable expectations of the Company’s shareholders;
act in accordance with all applicable laws, regulations, policies and procedures;
have responsibility and accountability for reporting and investigating reports of unethical practices; and
use the Company’s resources and property properly.

The code of conduct sets out or refers to separate documents outlining the Company’s policies on various matters including ethical conduct, fair dealing, compliance, privacy, confidentiality, integrity and conflicts of interest.

9.3.8 Shareholder Communications Policy

The Board’s aim is to ensure that Shareholders are provided with sufficient information to assess the performance of the Company and to inform Shareholders of major developments affecting the state of affairs of the Company in accordance with all applicable laws. Information will be communicated to Shareholders through the lodgement of all relevant financial and other information with the ASX and publishing information on the Company’s website, www.mustera.com.au.

In particular, the Company’s website will contain information about it, including media releases, key policies and the terms of reference of its Board committees. All relevant announcements made to the market and any other relevant information will be posted on the Company’s website after release to the ASX (subject to applicable securities laws).

9.3.9 Departures from ASX Recommendations

Under ASX Listing Rules, the Company is required to provide a statement disclosing the extent to which it will follow, as at the date of its admission to the Official List, the recommendations set by the ASX Corporate Governance Council. Where the Company does not intend to follow a recommendation, it must separately identify the recommendation that will not be followed and state its reasons for not following the recommendation, and what (if any) alternative governance practices it intends to adopt in lieu of the recommendation.

Except as set out below, the Board does not anticipate that it will depart from the ASX Recommendations. However, it may do so in the future if it considers that such departure would be reasonable.

	RECOMMENDATION	COMMENT ON DEPARTURE
1.5	A listed entity should: (a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them; (b) disclose that policy or a summary of it; and (c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them, and either: (1) the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or (2) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act	The Company has not established a diversity policy. The Board considers that at this time no efficiencies or other benefits would be gained by introducing a formal diversity policy. In the future, as the Company grows and increases in size and activity, the Board will consider the adoption of a formal diversity policy. As a consequence of not having a diversity policy, and until such time as a diversity policy is adopted, the Company will not disclose at the end of each reporting period the measurable objectives for achieving gender diversity and progress towards achieving them.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

BOARD, MANAGEMENT AND CORPORATE GOVERNANCE

	RECOMMENDATION	COMMENT ON DEPARTURE
2.1	The board of a listed entity should: (a) have a nomination committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.	The Company has not established a nomination committee. The Board considers that the current size and level of activities of the Company are not of a sufficient level to justify having a nomination committee. The whole Board conducts the functions of the nomination committee and is guided by the charter for the Nomination and Remuneration Committee which will be posted on the Company’s website.
2.5	The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.	The Company does not presently have a chairman. The Directors consider that the current composition of the Board does not require the appointment of a chairman.
4.1	The board of a listed entity should: (a) have an audit committee which: (1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and (2) is chaired by an independent director, who is not the chair of the board, and disclose: (3) the charter of the committee; (4) the relevant qualifications and experience of the members of the committee; and (5) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.	The Company’s Audit and Risk Committee is comprised of only two members. The Board considers this level of membership to be adequate and that the experience and qualifications of the persons on the Committee are sufficient to ensure that the Committee properly discharges its duties. As the operations of the Company develop the Board will reassess the composition of the Audit and Risk Committee.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

BOARD, MANAGEMENT AND CORPORATE GOVERNANCE

	RECOMMENDATION	COMMENT ON DEPARTURE
7.1	The Board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a risk committee or committees, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.	The Company’s Audit and Risk Committee is comprised of only two members. The Board considers this level of membership to be adequate and that the experience and qualifications of the persons on the Committee are sufficient to ensure that the Committee properly discharges its duties. As the operations of the Company develop the Board will reassess the composition of the Audit and Risk Committee.
8.1	The Board of a listed entity should: (a) have a remuneration committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.	The Company has not established a remuneration committee. The Board considers that the current size and level of activities of the Company are not of a sufficient level to justify having a remuneration committee. The whole Board conducts the functions of the remuneration committee and is guided by the charter for the Nomination and Remuneration Committee which will be posted on the Company’s website.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

10. MATERIAL CONTRACTS

Set out below is a summary of certain key contracts to which Mustera is a party and which may be material in terms of the operation of the Mustera business, or otherwise may be relevant to a potential investor in Mustera.

10.1 239 – 251 WOODPARK ROAD, SMITHFIELD NSW

On 8 June 2013 the Company (trading under its former company name as Mutual Street Property Group Pty Ltd) (as Buyer ) entered into a contract for sale of land with Metro Group Enterprise Pty Limited (ACN 131 904 857) (as Seller ) in relation to the purchase of 239 -251 Woodpark Road, Smithfield ( Property ).

The Company paid $5,900,000 (exclusive of GST) (the sale of the Property was GST-free because the sale was the supply of a going concern) in consideration for the purchase of the Property.

Lease Agreement

The Property is subject to a lease agreement between the Company and Origin Oz Pty Ltd (ACN 134 714 300)( Origin Oz ). The material terms and conditions of the lease agreement are set out in the table below:

Lessor	Mustera
Lessee	Origin Oz
Demised Premises	Part Folio Identifier being 239,251 Woodpark Road, Smithfield, being the warehouse office, front car park and surrounding curtilage.
Commencement Date	19 December 2012
Term	10 years and 4 months
Expiry	18 April 2023
Options	5 + 5 + 5 years
Commencing Rental	$544,000 per annum net plus GST ($103/m2)
Rental Review	 Annually to the greater of CPI & 3.0%  Effective market review with a collar to the greater of CPI & 3.0% on 19 April 2018.
Passing Rental	$560,328 per annum net plus GST ($106/m2)
Outgoings	The lease is drawn on the net terms. Should the Lessor lease the hardstand, the Lessee’s outgoings contribution is reduced by $15,000 per annum.
GST	Payable by the Lessee.
Make Good	The Lessee is required to remove their equipment and repair any damage.
Other Matters	 The Lessee warrants that their use of the land is lawful under the relevant zoning.  The Lessee is responsible for soil contamination caused during their tenure.  There is no bank guarantee, security deposit or guarantor required under the lease (i.e. no income security).

10.2 LOT 803 FOUNDRY ROAD, MIDLAND

On 6 December 2013, Sterlink Development Pty Ltd (ACN 166 340 272) ( Sterlink ) (a wholly owned subsidiary of the Company) (as Buyer ) entered into a contract for sale of land with the Metropolitan Redevelopment Authority ( MRA ) (as Seller ) in relation to the purchase of Lot 803 Foundry Road, Midland ( Property ).

Settlement of the contract took place on 11 June 2014, upon which Sterlink paid $1,325,000 (inclusive of GST) in consideration for the purchase of the Property.

Pursuant to the contract, Sterlink is obliged to develop the Property, and must reach a number of milestone dates in terms of: the submission of development applications; working drawings; building certificates; and commencement and completion of structural works.

In relation to the above milestone dates, practical completion of the Property development must occur no later than 11 December 2016 (unless extended by both parties).

10.3 LOT 801 HELENA STREET, MIDLAND

On 23 June 2014 Sterlink Development 1 Pty Ltd (ACN 169 912 609) ( Sterlink1 ) (a wholly owned subsidiary of the Company) (as Buyer ) entered into a contract for sale of land with the MRA (as Seller ) in relation to the purchase of Lot 801 Helena Street, Midland ( Property ).

The purchase price of the Property is $1,450,000 (inclusive of GST). To date Sterlink1 has paid a non-refundable deposit of $25,000 in relation to the purchase of the Property. The balance of the purchase price is due at settlement, which shall be no later than 20 March 2015.

The Agreement is conditional upon Sterlink1 being satisfied, acting reasonably, with its due diligence investigations, which must be completed by 18 February 2015.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

MATERIAL CONTRACTS

10.4 82 BELMONT AVENUE, RIVERVALE WA

On 2 July 2012 the Company (trading under its former company name as Mutual Street Property Group Pty Ltd) (as Buyer ) entered into a contract for sale of land with Sumampo Lau (as Seller ) in relation to the purchase of 82 Belmont Avenue, Rivervale ( Property ).

The Company paid $3,000,000 (exclusive of GST) (the sale of the Property was GST-free because the sale was the supply of a going concern) in consideration for the purchase of the Property.

Lease Agreement

The Property is subject to a lease agreement between the Company and Origin Oz. The material terms and conditions of the lease agreement are set out in the table below:

Lessor	Mustera
Lessee	Origin Oz
The Land	The land situate and known as 82 Belmont Avenue, Rivervale, Western Australia and being more particularly described as Lot 26 on Diagram 24575 being the whole of the land comprised in Certificate of Title 1682 Folio 496.
The Premises	The Land also known as 82 Belmont Avenue, Rivervale in the State of Western Australia.
Commencement Date	1 July 2014
Term	5 years
Expiry	30 June 2019
Options	Nil
Commencing Rental	$240,365 per annum net plus GST ($104/m²)
Rental Review	 Annually to CPI 1 July 2015, 1 July 2016, 1 July 2017 and 1 July 2018  Lease also states a market review due 1 July 2016.
Outgoings	The lease is drawn on net terms with the lessee responsible for payment of outgoings. The lease states that the outgoings payable at commencement of lease is $53,093.47 per annum exclusive of GST.
GST	Payable by the Lessee
Other Matters	 There is no bank guarantee, security deposit or guarantor required under the lease (i.e. no income security).  Should Mustera decide to proceed with redevelopment of the property, it is entitled to terminate the lease by the provision of not less than 6 months’ notice.

10.5 CONTRACT OF EMPLOYMENT – NICHOLAS ZBOROWSKI

On 16 June 2014, Nicholas Zborowski entered into an employment agreement with the Company under which he was appointed as a director of the Company on a full-time basis.

In relation to Mr Zborowski’s role as a director of the Company, Mr Zborowski is to be paid $120,000 gross per annum (exclusive of statutory superannuation). In addition to his salary, Mr Zborowski is entitled to allowances in relation to travel and accommodation expenses associated with Company business.

Mr Zborowski is entitled to receive bonuses and/or incentives under his employment agreement; however no amounts in relation to any bonus or incentive have currently been set.

Mr Zborowski’s employment may be terminated as follows:

(a) by Mr Zborowski or the Company by giving 3 months’ notice;
(b) by the Company immediately upon any serious misconduct committed by Mr Zborowski; and
(c) by the Company due to any permanent injury or illness of Mr Zborowski.

10.6 COMPANY SECRETARIAL SERVICES AGREEMENT

On 10 September 2014, the Company entered into a company secretarial services agreement with Townshend York Pty Ltd (ACN 101 473 554) ( Townshend York ) ( Company SSA ). The Company SSA is effective for a term of three years (unless extended by the parties).

In relation to company secretarial services to be provided by Townshend York, the Company has agreed to pay Townshend York a fee of $3,000 (excluding GST) per month.

The Company SSA contains standard termination rights for an agreement of this type.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

10. MATERIAL CONTRACTS

10.7 AFSL INTERMEDIARY ARRANGEMENT

On 10 October 2014, the Company entered into an Australian Financial Service Licence arrangement with BBY Limited (ACN 006 707 777) (AFSL 238095) (BBY) for the purposes of enabling the Company to issue Shares pursuant to the Offer to retail and wholesale investors (AFSL Arrangement).

In consideration for BBY entering into the AFSL Arrangement, upon successful completion of the capital raising under this Prospectus, the Company has agreed to pay BBY a fee equal to the sum of 1.5% of the total application monies received under the Prospectus. The minimum fee payable by the Company under the AFSL Arrangement is $30,000.

Further, the AFSL Arrangement contains general termination rights, representations, warranties, and indemnities for an arrangement of this type.

10.8 ANZ – LETTER OF OFFER

On 5 July 2013, the Company (trading under its former company name as Mutual Street Property Group Pty Ltd) entered into a facility agreement with Australia and New Zealand Banking Group Limited ( ANZ ) ( ANZ Facility Agreement ).

Pursuant to the ANZ Facility Agreement, a total amount of $5,785,000 was made available to the Company by ANZ for the purposes of assisting the Company with the purchase of 82 Belmont Avenue, Rivervale ( Belmont Facility ), and 239,251 Woodpark Road, Smithfield ( Smithfield Facility ).

The Belmont Facility and the Smithfield Facility have a term of 4 years and 5 years respectively which commenced on the first drawdown date of each facility.

Security for the facilities is comprised as follows:

(a) Individual guarantee and indemnity from Benjamin Pratignyo Young in favour of ANZ in respect of the obligations of the Company limited to $5,785,000;
(b) Registered mortgage given by the Company being the registered proprietor over the property situated at 82 Belmont Avenue, Rivervale;
(c) Registered mortgage given by the Company being the registered proprietor over the property situated at 239-251 Woodpark Road, Smithfield;
(d) Registered company charge (mortgage debenture) over all the assets and undertaking of the Company; and
(e) General security agreement given by the Company over all present and after-acquired property.

Mr Benjamin Pratignyo Young has made application to ANZ for removal of the individual guarantee and indemnity as shown in item (a) above.

10.9 LEAD MANAGER MANDATE

On 10 October 2014, the Company entered into a lead manager mandate ( Mandate ) with Townshend Capital Pty Ltd (ACN 099 900 188) ( Townshend Capital ) for the purpose of engaging Townshend Capital as lead manager to the Company’s initial public offering.

In consideration for Townshend Capital entering into the Mandate, subject to the Company being admitted to the official list of the ASX, Townshend Capital will be entitled to receive a management fee of 3.5% (excluding GST) of all funds raised under this Prospectus.

Further, the Mandate contains general representations, warranties, and indemnities for an arrangement of this type.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

ADDITIONAL INFORMATION

11.1 LITIGATION

As at the date of this Prospectus, the Company is not involved in any legal proceedings and the Directors are not aware of any legal proceedings pending or threatened against the Company.

11.2 RIGHTS ATTACHING TO SHARES

The following is a summary of the more significant rights attaching to Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.

Full details of the rights attaching to Shares are set out in the Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours.

(a) General meetings

Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company.

Shareholders may requisition meetings in accordance with Section 249D of the Corporations Act and the Constitution.

(b) Voting rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at meetings of Shareholders or classes of Shareholders:

(i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;
(ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and
(iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid Shares, shall have such number of votes being equivalent to the proportion which the amount paid (not credited) is of the total amounts paid and payable in respect of those Shares (excluding amounts credited).

(c) Dividend rights

Subject to the rights of any preference Shareholders and to the rights of the holders of any shares created or raised under any special arrangement as to dividend, the Directors may from time to time declare a dividend to be paid to the Shareholders entitled to the dividend which shall be payable on all Shares according to the proportion that the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited) in respect of such Shares.

The Directors may from time to time pay to the Shareholders any interim dividends as they may determine. No dividend shall carry interest as against the Company. The Directors may set aside out of the profits of the Company any amounts that they may determine as reserves, to be applied at the discretion of the Directors, for any purpose for which the profits of the Company may be properly applied.

Subject to the ASX Listing Rules and the Corporations Act, the Company may, by resolution of the Directors, implement a dividend reinvestment plan on such terms and conditions as the Directors think fit and which provides for any dividend which the Directors may declare from time to time payable on Shares which are participating Shares in the dividend reinvestment plan, less any amount which the Company shall either pursuant to the Constitution or any law be entitled or obliged to retain, to be applied by the Company to the payment of the subscription price of Shares.

(d) Winding-up

If the Company is wound up, the liquidator may, with the authority of a special resolution of the Company, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set a value as the liquidator considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders.

The liquidator may, with the authority of a special resolution of the Company, vest the whole or any part of any such property in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no Shareholder is compelled to accept any Shares or other securities in respect of which there is any liability.

(e) Shareholder liability

As the Shares under the Prospectus are fully paid shares, they are not subject to any calls for money by the Directors and will therefore not become liable for forfeiture.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

ADDITIONAL INFORMATION

(f) Transfer of Shares

Generally, Shares are freely transferable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provisions of a law of Australia and the transfer not being in breach of the Corporations Act or the ASX Listing Rules.

(g) Variation of rights

Pursuant to Section 246B of the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders, vary or abrogate the rights attaching to Shares.

If at any time the share capital is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class), whether or not the Company is being wound up, may be varied or abrogated with the consent in writing of the holders of three-quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

(h) Alteration of Constitution

The Constitution can only be amended by a special resolution passed by at least three quarters of Shareholders present and voting at the general meeting. In addition, at least 28 days written notice specifying the intention to propose the resolution as a special resolution must be given.

11.3 INTERESTS OF DIRECTORS OF THE COMPANY

Other than as set out below or elsewhere in this Prospectus, no Director or proposed Director holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to a Director or proposed Director:

(a) as an inducement to become, or to qualify as, a Director; or
(b) for services provided in connection with the formation or promotion of the Company, or the Offer.

The Company has paid no remuneration to its non-executive Directors since incorporation to the date of this Prospectus and no remuneration will be paid or will accrue until such time as the Company is admitted to the Official List.

Shareholding qualifications

The Directors are not required to hold any Shares in the Company under the Constitution.

Directors' Shareholdings

At the date of this Prospectus the relevant interests of each of the Directors in Shares and Options of the Company are as follows:

Director	Shares	Options
Mr Nicholas Zborowski	Nil	5,000,000
Mr Anthony Ho	2,000,000	Nil
Mr Benjamin Young	1	Nil
Mr Jack Spencer-Cotton	Nil	1,000,000

Shares held by the Directors are held both directly and indirectly. The Directors may apply for Shares pursuant to this Prospectus. The terms and conditions of the Options are set out in Section 11.7 of the Prospectus.

Directors' remuneration

Non-executive directors’ fees not exceeding an aggregate of $300,000 per annum have been approved by the Company in general meeting. The level of these fees may be varied by the Company in general meeting in accordance with its Constitution and the ASX Listing Rules.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

ADDITIONAL INFORMATION

Non-executive directors’ fees to be paid by Mustera upon admission to the Official List of ASX are as follows:

Non-Executive Director	Remuneration per annum
Mr Anthony Ho	$20,000
Mr Benjamin Young	$20,000
Mr Jack Spencer-Cotton	$20,000

Non-executive Directors are entitled to be paid additional remuneration on commercial terms for any extra services undertaken by them at the request of the Board.

The following contractual arrangements (further details of which are set out in Section 10 of the Prospectus) have been entered into with Directors (or companies associated with Directors):

(a) Employment Agreement between the Company and Mr Nicholas Zborowski; and
(b) Company Secretarial Services Agreement between the Company and Townshend York Pty Ltd. Mr Anthony Ho is a director of Townshend York Pty Ltd.

A lead manager mandate has been entered into between the Company and Townshend Capital Pty Ltd. Refer to Section 10.9 of the Prospectus for a summary of that arrangement. Mr Benjamin Young is a director of Townshend Capital Pty Ltd and Mr Anthony Ho has a non-controlling shareholding interest in that company.

In addition, the Directors have each entered into a deed of indemnity, access and insurance with the Company on terms and conditions considered standard for an agreement of this type.

Related Parties

The Company’s policy in respect of related party arrangements is:

a Director with a material personal interest in a matter is required to give notice to the other Directors before such a matter is considered by the Board; and
for the Board to consider such a matter, the Director who has a material personal interest is not present while the matter is being considered at the meeting and does not vote on the matter.

11.4 INTERESTS OF EXPERTS AND ADVISERS

Other than as set out below or elsewhere in this Prospectus, no promoter of the Company or other person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus, holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of these persons for services provided by them in connection with the formation or promotion of the Company or the Offer.

Valuations Services (NSW) Pty Ltd has provided the property valuation report which is included in Section 8 of this Prospectus. The Company has paid Valuations Services (NSW) Pty Ltd $8,000 (excluding GST) for this service. During the 24 months preceding lodgement of this Prospectus with the ASIC, Valuations Services (NSW) Pty Ltd has received fees of $7,500 from the Company for other services provided.

BDO Corporate Finance (WA) Pty Ltd has acted as Investigating Accountant and has prepared the Investigating Accountant’s Report which is included in Section 7 of this Prospectus. The Company estimates it will pay BDO Corporate Finance (WA) Pty Ltd a total of $5,000 (excluding GST) for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, BDO Corporate Finance (WA) Pty Ltd has not received any fees from the Company for any other services.

Steinepreis Paganin has acted as the solicitors to the Company in providing general advice in relation to the Offer and this Prospectus and the preparation of the summary of Material Contracts which is included in Section 10 of this Prospectus. The Company estimates it will pay Steinepreis Paganin approximately $30,000 (excluding GST) for these services. Subsequently, fees will be charged in accordance with normal charge out rates. During the 24 months preceding lodgement of this Prospectus with the ASIC, Steinepreis Paganin has not received any fees from the Company for any other services.

BBY Limited has acted as the Company’s authorised intermediary for the issue of Shares pursuant to this Prospectus. The Company has agreed to pay BBY Limited a fee equal to 1.5% of the total application monies received under the Prospectus. The minimum fee payable is $30,000 (excluding GST) and dependent on the level of oversubscriptions accepted, may be up to $60,000.During the 24 months preceding lodgement of this Prospectus with the ASIC, BBY Limited has not received any fees from the Company for any other services.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

ADDITIONAL INFORMATION

11.5 CONSENTS

Each of the parties referred to in this Section 11.5:

(a) does not make, or purport to make, any statement in this Prospectus, nor is there a statement in the Prospectus based on a statement made by the party, other than those referred to in this Section 11.5; and
(b) to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section 11.5.

Valuations Services (NSW) Pty Ltd has given its written consent to being named as preparer of the valuation summary of the Smithfield Property included in Section 8 of this Prospectus, and the inclusion of that valuation summary in the form and context in which the report appears. Valuations Services (NSW) Pty Ltd has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

BDO Corporate Finance (WA) Pty Ltd has given its written consent to being named as Investigating Accountant in this Prospectus and to the inclusion of the Investigating Accountant’s Report in Section 7 of this Prospectus in the form and context in which the information and report is included. BDO Corporate Finance (WA) Pty Ltd has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

Steinepreis Paganin has given its written consent to being named as the solicitors to the Company in this Prospectus and to the inclusion of the summary of Material Contracts in Section 10 of this Prospectus in the form and context in which the summary is included. Steinepreis Paganin has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

Each of the following has consented to being named in the Prospectus in the capacity as noted below and have not withdrawn such consent prior to the lodgement of this Prospectus with the ASIC:

(a) BDO Audit (WA) Pty Ltd as the Company’s auditor;
(b) Advanced Share Registry Limited as the share registry to the Company;
(c) BBY Limited as the Company’s authorised intermediary for the issue of Shares pursuant to this Prospectus; and
(d) Townshend Capital Pty Ltd as lead manager to the Company’s Offer.

11.6 EXPENSES OF THE OFFER

The total expenses of the Offer (excluding GST) are expected to be applied towards the items set out in the table below:

below:
Item of Expenditure Lead Manager fees (3.5%) Authorised intermediary fees (1.5%) ASX fees Legal and professional fees Property valuation costs Investigating Accountant’s fees Printing and distribution costs ASIC fees Miscellaneous (registry, website, travel, postage, etc)	Cost - Minimum Subscription ($) Cost - Over Subscriptions ($) 70,000 140,000 30,000 60,000 67,700 69,640 70,000 70,000 8,000 8,000 5,000 5,000 10,000 10,000 2,300 2,300 12,000 20,060
	275,000 385,000

11.7 TERMS AND CONDITIONS OF OPTIONS

a) Exercise Price

Subject to adjustment in accordance with paragraph (i), the exercise price of each Option is 20 cents ($0.20).

b) Entitlement

Each Option shall entitle the holder the right to subscribe (in cash) for one Share in the capital of the Company.

c) Option Period

The Options will expire at 5.00pm WST on 31 January 2018. Subject to clause (g), Options may be exercised at any time prior to the expiry date and Options not so exercised shall automatically expire on the expiry date.

d) Ranking of Share Allotted on Exercise of Option

Subject to any restriction or escrow arrangements imposed by ASX or voluntarily agreed with the Company, each Share allotted as a result of the exercise of any Option will, subject to the Constitution of the Company, rank in all respects pari passu with the existing Shares in the capital of the Company on issue at the date of issue.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

ADDITIONAL INFORMATION

e) Voting

A registered owner of an Option ( Option Holder ) will not be entitled to attend or vote at any meeting of the members of the Company unless they are, in addition to being an Option Holder, a member of the Company.

f) Transfer of an Option

Options are transferrable at any time prior to the expiry date. This right is subject to any restrictions on the transfer of Options that may be imposed by the ASX or any voluntary restriction agreement applicable to the Options.

g) Method of Exercise of an Option

(i) The Company will provide to each Option Holder a notice that is to be completed when exercising the Options ( Notice of Exercise of Options ). Options may be exercised by the Option Holder by completing the Notice of Exercise of Options and forwarding the same to the Company Secretary to be received prior to the expiry date. The Notice of Exercise of Options must state the number of Options exercised and the consequent number of ordinary shares in the capital of the Company to be allotted; which number of Options must be a multiple of 10,000 if only part of the Option Holder’s total Options are exercised, or if the total number of Options held by an Option Holder is less than 10,000, then the total of all Options held by that Option Holder must be exercised.
(ii) The Notice of Exercise of Options by an Option Holder must be accompanied by payment in full for the relevant number of shares being subscribed, being an amount of 20 cents ($0.20) per Share.
(iii) Subject to paragraph (g)(i) above, the exercise of less than all of an Option Holder’s Options will not prevent the Option Holder from exercising the whole or any part of the balance of the Option Holder’s entitlement under the Option Holder’s remaining Options.
(iv) Within 14 days from the date the Option Holder properly exercises Options held by the Option Holder, the Company shall issue and allot to the Option Holder that number of Shares in the capital of the Company so subscribed for by the Option Holder.
(v) If the Company is listed on the ASX, the Company will on the date of issue of Shares pursuant to the exercise of an Option, apply to the ASX for, and use its best endeavours to obtain, Official Quotation of all such Shares, in accordance with the Corporations Act and the ASX Listing Rules.
(vi) The Company will generally comply with the requirements of the ASX Listing Rules in relation to the timetables imposed when Options are due to expire. Where there shall be any inconsistency between the timetables outlined herein regarding the expiry of the Options and the timetable outlined in the ASX Listing Rules, the timetable outlined in the ASX Listing Rules shall apply.

h) ASX Quotation

The Options will not be quoted on ASX.

i) Reconstruction

In the event of a reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the Option Holder will be changed to the extent necessary to comply with the ASX Listing Rules applying to the reconstruction of capital, at the time of the reconstruction.

j) Participation in New Share Issues

There are no participating rights or entitlements inherent in the Options to participate in any new issues of capital which may be made or offered by the Company to its shareholders from time to time prior to the expiry date unless and until the Options are exercised. The Company will ensure that during the exercise period, the record date for the purposes of determining entitlements to any new such issue, will be at least seven (7) business days after such new issues are announced (or such other date if required under the ASX Listing Rules) in order to afford the Option Holder an opportunity to exercise the Options held by the Option Holder.

k) Adjustment for pro-rata issues (except a bonus issue)

There are no rights to change the exercise price of the Options or the number of underlying Shares if there is a bonus issue to the holders of ordinary shares. If the Company makes a pro rata issue of securities (except a bonus issue) to the holders of ordinary shares (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the Option exercise price shall be reduced according to the formula specified in the ASX Listing Rules.

11.8 CONTINUOUS DISCLOSURE OBLIGATIONS

Following admission of the Company to the Official List, the Company will be a “disclosing entity” (as defined in Section 111AC of the Corporations Act) and, as such, will be subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company will be required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company’s securities.

Price sensitive information will be publicly released through ASX before it is disclosed to shareholders and market participants. Distribution of other information to shareholders and market participants will also be managed through disclosure to the ASX. In addition, the Company will post this information on its website after the ASX confirms an announcement has been made, with the aim of making the information readily accessible to the widest audience.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

ADDITIONAL INFORMATION

11.9 DOCUMENTS AVAILABLE FOR INSPECTION

The following documents are available for inspection during normal business hours at the registered office of the Company:

(a) this Prospectus
(b) the Constitution of the Company;
(c) the consents referred to in Section 11.5 of this Prospectus;
(d) the full Valuation Report prepared by Valuations Services (NSW) Pty Ltd referred to in Section 8 of this Prospectus ; and
(e) the material contracts summarised in Section 10 of this Prospectus.

11.10 PRIVACY STATEMENT

If you complete an Application Form, you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your application, service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder.

The information may also be used from time to time and disclosed to persons inspecting the register, including bidders for your securities in the context of takeovers, regulatory bodies including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the share registry.

You can access, correct and update the personal information that we hold about you. If you wish to do so, please contact the share registry at the relevant contact number set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for Shares, the Company may not be able to accept or process your application.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

12. DIRECTORS’ AUTHORISATION

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with Section 720 of the Corporations Act, each Director has consented to the lodgement of this Prospectus with the ASIC and has not withdrawn that consent.

Nicholas Zborowski Executive Director For and on behalf of Mustera Property Group Limited

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

GLOSSARY

Where the following terms are used in this Prospectus they have the following meanings:

$ means an Australian dollar.

Applicant means a person who submits an Application.

Application Form means the application form attached to or accompanying this Prospectus relating to the Offer.

ASIC means Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it as the context requires.

ASX Listing Rules means the official listing rules of ASX.

Board means the board of Directors as constituted from time to time.

CHESS means Clearing House Electronic Subregister System (CHESS) operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned subsidiary of ASX Limited.

Closing Date means the closing date of the Offer as set out in the indicative timetable in the Investment Overview in Section 1 of this Prospectus (subject to the Company reserving the right to extend the Closing Date or close the Offer early).

Company means Mustera Property Group Limited (ACN 142 375 522).

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company at the date of this Prospectus.

Exposure Period means the period of 7 days after the date of lodgement of this Prospectus, which period may be extended by the ASIC by not more than 7 days pursuant to Section 727(3) of the Corporations Act.

Issue means the issue of 10,000,000 Shares pursuant to this Prospectus and any Oversubscriptions.

Mustera means Mustera Property Group Limited (ACN 142 375 522).

Offer means the offer to the public of 10,000,000 Shares at an issue price of $0.20 per Share to raise $2,000,000, and any Oversubscriptions.

Official List means the official list of ASX.

Official Quotation means official quotation by ASX in accordance with the ASX Listing Rules.

Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Oversubscriptions means the acceptance of additional applications for up to 10,000,000 Shares at an issue price of $0.20 per Share to raise up to $2,000,000.

Prospectus means this prospectus.

Section means a section of this Prospectus.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of Shares.

Valuations Services (NSW) Pty Ltd means Valuations Services (NSW) Pty Ltd (ABN 83 079 862 990) trading under licence as Knight Frank Valuations.

WST means Western Standard Time as observed in Perth, Western Australia.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

APPLICATION FORM

This Application Form relates to a prospectus dated 15 October 2014 (“ the Prospectus ”) and the instructions overleaf. No Shares will be issued pursuant to the Prospectus later than 13 months after the date of the Prospectus.

Share Registry	Share Registry	Share Registry	Share Registry	Share Registry
Use Only


	/we apply for

	/We lodge full application monies
	$		0	0
	ull name(Title, given name(s) & s

	ointapplicant # 2

	ointapplicant #3

	ostal address treet number Street name

	uburb/town State

	ontact name CN/ARBN (forcompanies only)

	CHESS Participant: Holder Identification Number (HIN)
	X

By lodging this Application Form, I/we declare that this Application is completed and lodged according to the Prospectus and that all statements made by me/us are complete and accurate.
I/We also declare that this Application Form is completed according to this declaration and agree to be bound by the terms and conditions set out in the Prospectus and the Constitution of Mustera.
I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Shares in Mustera and that no notice of acceptance of the application will be provided.

NO SIGNATURE IS REQUIRED

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSON UNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 15 OCTOBER 2014.

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

APPLICATION FORM

TREATMENT OF APPLICATION

The return of an Application Form with your payment of the application money will constitute your offer to purchase or subscribe for Shares. If your Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be treated as valid.

The decision of Mustera as to whether to treat your Application as valid, and how to construe, amend or complete it, shall be final. The decision on the number of Shares to be allocated to you shall also be final. You will not, however, be treated as having offered to purchase more Shares than is indicated on the Application Form.

Investors whose Application is not accepted, or is accepted in respect of a lower number of Shares than the number applied for, will receive a refund of all or part of their application money without interest, as applicable.

CORRECT FORMS OF REGISTRABLE NAMES

Only legal entities may be registered as holders of the Shares. Applications must be in the full name(s) of natural persons, companies or other legal entities. Shares cannot be registered in the name of a trust and no trust can be implied. The name of a beneficiary or any other registrable name may be included by way of account description if completed exactly as described in the examples of correct forms of registrable names below.

correct forms of registrable names below.	correct forms of registrable names below.
TYPE OF INVESTOR		CORRECT FORM
			EXAMPLES OF INCORRECT FORM
Individuals Give full name - not initials		JOHN FRED WILLIAMS	J.F.Williams
Persons under the age of 18 Do not use the name of the minor, use name(s) of parent(s)/guardian(s)		MICHAEL JOHN WILSON & SARAH JANE WILSON	Andrew Wilson
Companies Use company title, not abbreviations		JOHN WILLIAMS PTY LTD	J. Williams Co. John WilliamsP/L
Trusts Do not use the name of the trust, use name(s) of trustee(s)		JOHN FRED WILLIAMS	John Williams Family Trust
Deceased Estates Do not use the name of deceased, use personal names of executor(s)		JANE MARY MCDONALD	Estate of the Late John Smith
Partnerships Do not use the name of partnership, use personal names of partners		SARAH JANE WILSON & MICHAEL JOHN WILSON	Sarah Wilson & Son
Clubs/Unincorporated Bodies Do not use name of clubs etc, use personal names of office bearer(s)		JOHN FRED WILLIAMS	ABC Tennis Association
Superannuation Fund Do not use name of fund use name(s) of trustee(s)		SARAH WILSON PTY LTD	Sarah Wilson Pty Ltd
			Superannuation Fund
How to complete the Application Form Please complete all relevant sections of the Application Form in BLOCK LETTERS. These instructions are cross-referenced to each sectionof theForm.
A	Insert the Number of Shares you wish to apply for in Section A. The Application must be for a minimum of 10,000 Shares and thereafter must be in multiples of 100 Shares.
B	Insert your_application money_be multiplying the number of Shares by 20 cents per share in Section B.
C	Enter the Full Name(s) and Title(s) of all legal entities that are to be recorded as the registered holder(s) of the Shares. You should refer to the back of the Application Form for the correct forms of name which can be registered. Applications using the wrong form of name may be rejected. Up to three joint Applicants may register. An account designation may be entered on the last line of this section. It should be contained within<>brackets with A/C at the end eg.
D	Enter your Postal Address for all correspondence. All communications to you from Mustera Property Group Ltd will be mailed tothe person(s) and address as shown.Forjointapplications, only one address canbe entered.
E	Pleaseinsertyour_Telephone Number(s)_ and contact nameincasethere areirregularitieswithyour Application.
F	If the applicant is a company,insert A.C.N. or A.R.B.N
G	Mustera will apply to ASX Limited to participate in the Clearing House Electronic Subregister System (“CHESS”), operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned subsidiary of ASX Limited. In CHESS, Mustera will operate an electronic CHESS Subregister of security holdings and an electronic Issuer Sponsored Subregister of security holdings. Together the two Subregisters will make up the principal register of securities. Mustera will not be issuing certificates to applicants in respect of Shares allotted. If you are a CHESS participant (or are sponsored by a Chess participant) and you wish to hold Shares allotted to you under this Application on the CHESS Subregister, enter your CHESS Holder Identification Number or “HIN”. Otherwise, leave this section blank and on allotment, you will be sponsored by the Company and allotted a Securityholder ReferenceNumberor “SRN”.
H	Enter the_tax file number(s)or_exemption category(e.g. non-resident exemption code) of the Applicants. With a joint holding, only the tax file number (“TFN”) of two holders are required. An Applicant is not obliged to quote their TFN, however in cases where no TFN is quoted Mustera must deduct from any dividends payable (to the extent they are not franked) at the top personal marginal tax rate (includingtheMedicarelevy).
I	Make your cheque(s) or bank draft(s) payable to“Mustera Property Group Ltd” in Australian currency. Your cheque or bank draft must be drawn on an Australian bank and should be crossed “Not Negotiable”. Cash should not be forwarded. Attach your cheque(s) or bank draft(s) to the Application Form where indicated. Complete the details of your cheque(s) or bank draft(s)in this section
	LODGEMENT OF APPLICATIONS Return your completed Application Form and cheque(s) or bank draft(s) to: By mail: By hand: Mustera Property Group Ltd OR Mustera Property Group Ltd PO Box 3438 Suite 6, 61 Hampden Road NEDLANDS WA 6909 NEDLANDS WA 6909 Applications must be received at the above address by 5.00pm WST time on 20 November 2014 (subject to the right of Mustera to vary this date)

PROSPECTUS ǀ MUSTERA PROPERTY GROUP LTD

AI assistant

MUSTERA PROPERTY GROUP LIMITED — Capital/Financing Update 2014

65369_rns_2014-10-27_4ba0e9fb-2771-499b-9539-4a7735b2380b.pdf

PROSPECTUS

IMPORTANT INFORMATION

DIRECTORS

REGISTERED OFFICE

COMPANY SECRETARY

SOLICITORS

SHARE REGISTRY*

INVESTIGATING ACCOUNTANT

AUDITOR*

PROPERTY VALUERS

LEAD MANAGER OF THE OFFER

PROPOSED ASX CODE

Intermediary Authorisation

Risk Factors

Exposure Period

Web Site – Electronic Prospectus

Website

Forwarding-looking statements

Photographs and Diagrams

1. INVESTMENT OVERVIEW

1.1 MUSTERA PROPERTY GROUP LTD

1.2 KEY INVESTMENT HIGHLIGHTS

Development Opportunities

Investment Property

Opportunistic Outlook

Board of Directors and Management

1.3 KEY INFORMATION

1.4 KEY INVESTMENT RISKS

Development risk

Property valuation and rental income risks

Funding risks

1.5 INDICATIVE TIMETABLE

1.6 DIVIDEND POLICY

1.7 PURPOSE OF THE OFFER AND USE OF PROCEEDS

1.8 FORECASTS

1.9 ENQUIRIES

2.1 DESCRIPTION OF THE OFFER

2.2 OVERSUBSCRIPTIONS

2.3 MINIMUM SUBSCRIPTION

2.4 PURPOSE OF THE OFFER

2.5 PROCEEDS OF THE OFFER

2.6 CAPITAL STRUCTURE

Shares[2]

Options[3]

2.7 SUBSTANTIAL SHAREHOLDERS

As at the date of this Prospectus:

On completion of the Offer*:

2.8 RESTRICTED SECURITIES

2.9 HOW TO APPLY UNDER THE OFFER

2.10 ASX LISTING

2.11 ACCEPTANCE OF APPLICATIONS

2.12 APPLICANTS OUTSIDE AUSTRALIA

2.13 TAXATION

2.14 ELECTRONIC PROSPECTUS

2.15 CHESS AND HOLDING STATEMENTS

2.16 ENQUIRIES

3.1 BUSINESS OVERVIEW

3.2 OUR MISSION

3.3 INVESTMENT PHILOSOPHY

3.4 DEVELOPMENT PARTNERSHIP

3.5 INTEGRATED SERVICE

3.6 SUSTAINABILITY

4. PROPERTY PORTFOLIO

4.1 INVESTMENT PROPERTIES

239-251 Woodpark Road, Smithfield, NSW was acquired on 31 July 2013.

Gross Leasable Area 5,283.5m[2]

Land Size 20,120m[2]

Net Income (p.a.) $560,320

Net Rental Yield 8.99%

4.2 DEVELOPMENT PROPERTIES

Lot 803 Foundry Road, Midland WA

Railway Square Precinct

Lot 803 Foundry Road, A Development Asset

Land Size: 2,304m[2]

Lot 801 Helena Street, Midland WA

82 Belmont Avenue, Rivervale, WA

PROPERTY PORTFOLIO

MUSTERA PROPERTY GROUP LIMITED Capital/Financing Update 2014

**On completion of the Offer*:**