TAMAWOOD LIMITED — M&A Activity 2022

Apr 7, 2022

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ASX Announcement 8 April 2022

Release of AstiVita’s Target’s Statement

AstiVita Limited ( AstiVita or the Company ) (ASX: AIR) refers to the recommended off-market takeover bid made by Tamawood Limited ( Tamawood ) to acquire all of the outstanding issued shares in AstiVita. AstiVita has received Tamawood’s bidder’s statement, a copy of which was released to the market on 6 April 2022 (the Bidder’s Statement ).

A copy of AstiVita target’s statement in response to the Bidder’s Statement (the Target’s Statement ), along with a copy of the independent expert’s report (the Independent Expert’s Report ), has been served on Tamawood today, and lodged with the Australian Securities and Investments Commission. The Company anticipates that the Target’s Statement and the accompanying Independent Expert’s Report, will be dispatched to AstiVita shareholders along with the Bidder's Statement on or about 12 April 2022.

For further enquiries contact:

Rade Dudurovic Sole Independent Director AstiVita Limited E: rade.dudurovic@astivita.com.au

This announcement is authorised for release by the Sole Independent Director of AstiVita Limited, Mr Rade Dudurovic.

243 Milton Rd, Milton QLD 4064 PO Box 881, Archerfield QLD 4108

T 07 3726 2000 F 07 3726 2099 E sales@astivita.com.au W www.astivita.com.au

THIS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR IMMEDIATE ATTENTION If you do not understand it or are in doubt as to its contents or how to act, please contact your professional adviser immediately.

TARGET’S STATEMENT

This Target’s Statement has been issued by AstiVita Limited ACN 139 461 733, in response to the bid by Tamawood Limited ACN 010 954 499 to acquire the Shares in AstiVita Limited.

AstiVita’s Independent Director recommends that you

ACCEPT

Tamawood’s Offer in the absence of a Superior Offer

LEGAL ADVISER

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IMPORTANT NOTICES

This Target’s Statement, dated 8 April 2022, is given by AstiVita Limited ACN 139 461 733 (“ AstiVita ”) under Part 6.5 of the Corporations Act 2001 (Cth) in response to the Offer made pursuant to the Bidder’s Statement dated 6 April 2022 which was delivered to AstiVita Shareholders by the Bidder on or around 6 April 2022.

Defined terms

Numerous defined terms are used in this Target’s Statement. Defined terms have been capitalised. These terms are explained in the glossary in SECTION 9

Financial Data

All dollar values are in Australian dollars unless stated otherwise.

reliance on those statements. The forward-looking statements in this Target’s Statement reflect views held as at the date of this Target’s Statement.

Notice to Foreign Shareholders

The release, publication or distribution of this Target’s Statement in jurisdictions other than Australia may be restricted by law or regulation in such other jurisdictions and persons who come into possession of it should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable laws or regulations. This Target’s Statement has been prepared in accordance with Australian law and the information contained in this Target’s Statement may not be the same as that which would have been disclosed if the Target’s Statement had been prepared in accordance with the laws and regulations outside Australia.

Privacy Statement

ASIC and ASX disclaimer

A copy of this Target’s Statement has been lodged with ASIC and sent to ASX. None of ASIC, ASX or any of their respective officers takes any responsibility for the content of this Target’s Statement.

No account of personal circumstances

This Target’s Statement does not take into account the individual investment objectives, financial or tax situation or particular needs of each AstiVita Shareholder. This document does not contain personal financial or taxation advice. Before making a decision in relation to the Offer, you may wish to seek independent financial, taxation and other professional advice.

Disclaimer regarding forward looking statements

This Target’s Statement contains various forwardlooking statements. You should be aware that these statements are predictions only and are subject to inherent risks and uncertainties in that they may be affected by a variety of known and unknown risks, variables and other factors. Those risks and uncertainties include factors and risks specific to the industry in which AstiVita operates as well as general economic conditions and conditions in the financial markets. Many of these risks are beyond the control of AstiVita. Actual events or results may differ materially from the events or results expressed or implied in any forward-looking statement and deviations are both normal and to be expected.

None of AstiVita, any of its officers, or any person named in this Target’s Statement with their consent, or any person involved in the preparation of this Target’s Statement makes any representation or warranty (either express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement. You are cautioned not to place undue

AstiVita has collected your information from the register of AstiVita Shareholders for the purpose of providing you with this Target’s Statement. The type of information AstiVita has collected about you includes your name, contact details and information of on your shareholding (as applicable) in AstiVita. Without this information, AstiVita would be hindered in its ability to issue this Target’s Statement. The Corporation Act requires the name and address of Shareholders to be held in a public register. Your information may be disclosed on a confidential basis to external service providers (Including AstiVita Share Registry and print and mail service providers) and may be required to be disclosed to regulators such as ASIC. If you would like details of information about Shares you hold by AstiVita, please contact:

Computershare Investor Services Pty Limited Level 1, 200 Mary Street Brisbane QLD 4000 Phone: 1300 552 270

Information on Bidder in this Target's Statement

Except where disclosed otherwise, the information on the Bidder in this Target's Statement has been obtained from the Bidder's Statement. AstiVita and its Independent Director is unable to verify the accuracy or completeness of the information on the Bidder.

Subject to the Corporations Act, neither AstiVita, nor its officers make any representation or warranty, express or implied, regarding such information and disclaim any responsibility in respect of that information.

Information concerning the Offer

Shareholders can seek further information about the Offer by emailing the Independent Director at rade.dudurovic@astivita.com.au.

1		DIRECTORS’ RECOMMENDATIONS AND INTENTIONS	8
	1.1	Independent Director’s Recommendation	8
	1.2	Delegation of Board’s authority to the Independent Director	8
	1.3	Reasons to accept the Offer	8
	1.4	Disadvantages associated with accepting the Offer	10
	1.5	Other considerations	11
2		KEY INFORMATION	12
3		YOUR CHOICES AS AN ASTIVITA SHAREHOLDER	16
	3.1	Your choices	16
	3.2	Consider the Target’s Statement before making a decision	16
4		INFORMATION ABOUT THE OFFER AND OTHER IMPORTANT ISSUES	17
	4.1	Summary of the Offer	17
	4.2	The Bidder’s voting power in AstiVita	17
	4.3	Consequences of the Bidder acquiring less than 90% of AstiVita	17
	4.4	Superior Offer	17
	4.5	Compulsory acquisition	17
	4.6	Market trading	18
	4.7	Taxation	18
	4.8	How to accept the Offer	19
5		ABOUT ASTIVITA	20
	5.1	Background information on AstiVita	20
	5.2	Directors and management	20
6		ABOUT TAMAWOOD	21
	6.1	Background information on Tamawood	21
	6.2	Ownership and Capital Structure	21
	6.3	Directors and management	22
7		INTERESTS OF DIRECTORS	23
	7.1	Interests of Directors in AstiVita securities	23
	7.2	Dealings by Directors in AstiVita securities	23
	7.3	Interests and dealings in the Bidder	23
	7.4	Benefits to Directors	23
	7.5	Conditional agreements	23
	7.6	Interests in contracts with the Bidder	23
8		ADDITIONAL INFORMATION	24
	8.1	Other material information	24
	8.2	Issued securities	24
	8.3	Consents	24

8.4	Miscellaneous and publicly available information	25
8.5	Date of Target’s Statement	25
8.6	Approval of Target’s Statement	25
9	GLOSSARY	26
9.1	Definitions	26
9.2	Interpretation	28
SECTION 10		29
10	CORPORATE DIRECTORY	29

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KEY DATES

Date of the Bidder’s Statement	6 April 2022
Date of this Target’s Statement	8 April 2022
Offer Periodopens	12 April 2022
Offer Periodcloses(unless extended or withdrawn)	19 May 2022

KEY POINTS

The Bidder is offering one (1) Tamawood Share for every five (5) AstiVita 1 Shares you hold. The Independent Expert considers that the Offer is fair and reasonable to 2 AstiVita Shareholders.

3 The Independent Director recommends that you ACCEPT the Offer.

The Offer provides more certainty of value of AstiVita Shares than exists at 4 present, and there is no guarantee that AstiVita Shares will trade at or above the Implied Value of the Offer if the Offer is not successful.

5 No Superior Offer has been made or is anticipated by the Independent Director. This is particularly so given that the Bidder’s Statement states that AstiVita Shareholders controlling approximately 86% of the issued share capital of AstiVita between them have indicated that they intend to accept the Offer (subject to any Superior Offer emerging).

6 Shareholders should carefully consider both the Bidder’s Statement and this Target’s Statement (including the attached Independent Expert’s Report) in their entirety before deciding whether or not to accept the Offer.

The Offer will expire at 5:00pm (AEDT) on Thursday, 19 May 2022 (unless 7 extended or withdrawn in accordance with the Corporations Act).

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INDEPENDENT DIRECTOR’S LETTER

8 April 2022

Dear Shareholder,

ACCEPT Tamawood’s Offer

Tamawood Limited ( Tamawood ) has made an offer to acquire the Shares you own in AstiVita Limited ( AstiVita or the Company ) on the basis of one (1) Tamawood Share for every five (5) AstiVita Shares you hold.

It is the view of the Independent Director that the Offer of one (1) Tamawood Share for every five (5) AstiVita Shares is fair and reasonable based on the current status of each of AstiVita and Tamawood, and their respective future prospects. This view is supported by the Independent Expert who has opined that the Offer is fair and reasonable.

The Independent Director believes you should ACCEPT THE OFFER .

The Offer has been considered by an Independent Expert appointed by the Independent Director, who has concluded that the Offer is fair and reasonable as regards AstiVita Shareholders. In particular, valuing each of AstiVita and Tamawood on the basis of their future maintainable earnings, the Independent Expert has opined that the value of the consideration for AstiVita Shares being offered by Tamawood, is higher than the value of the relevant AstiVita Shares.

In addition, the Independent Director notes and endorses the Independent Expert’s view that the following are advantages of accepting the Offer:

• (a) Acceptance of the Offer will assist AstiVita to mitigate key customer risk as Tamawood currently represents 90% of the revenue of AstiVita post the demerger of VeganicSKN Limited.

• (b) AstiVita Shares are illiquid. On a typical trading day, AstiVita Shares are thinly traded and have a wide bid-ask spread. The Independent Director notes that AstiVita Shares may therefore be difficult to sell. The Independent Director notes that while the market for Tamawood Shares also faces illiquidity, trading volumes are greater, and the bid-ask spread is typically much narrower than that for AstiVita Shares.

• (c) AstiVita is currently a marginally profitable business (with the demerger of VeganicSKN Limited , as resolved at the Company’s annual general meeting) operating in a highly competitive industry. This industry is dominated by well-established players (Bunnings, Reece, etc) benefiting from significant economies of scale which AstiVita does not enjoy. Currently, AstiVita is sub-scale in a high-volume low margin business. With ongoing supply chain shortages, AstiVita’s ability to source replacement inventory may be compromised, as suppliers will typically favour larger volume customers. The Independent Director notes that Tamawood is not obligated to purchase products from AstiVita and the loss of Tamawood as a major customer would financially cripple AstiVita.

• (d) AstiVita has not paid dividends to its Shareholders. If Tamawood maintains its current dividend payout schedule moving forward, AstiVita Shareholders will be paid dividends after successful completion of the Offer. In addition, the Independent Director notes that as the Company is unlikely to pay dividends in the foreseeable future, AstiVita Shareholders will not be able to realise the value in AstiVita’s franking credit reserves. Conversely after successful completion of the Offer, the merged Tamawood Group should be able to utilise AstiVita’s accumulated tax losses and franking credits.

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However, the Independent Expert has also noted that acceptance of the Offer will result in dilution of AstiVita Shareholders’ current 100% interest in AstiVita, to a 15% interest in Tamawood.

The Independent Director notes that no Superior Offer has materialised, and to the best of his knowledge and belief, no such offer is likely to eventuate or succeed given that, according to the Bidder’s Statement, AstiVita Shareholders controlling approximately 86% of the issued share capital of AstiVita between them, have indicated that they intend to accept the Offer (subject to any Superior Offer emerging). In addition, AstiVita has signed the Bid Implementation Agreement with Tamawood which is an exclusive agreement and AstiVita will not solicit any other offers, discussions and negotiations during this period.

This Target's Statement contains the formal response of AstiVita to the Offer. I strongly encourage you to read all the information contained in this Target's Statement (including the Independent Expert's Report) carefully, and to seek independent advice before deciding whether or not to accept the Offer. I also strongly encourage you to read the Bidder's Statement.

The Offer is currently scheduled to close at 5:00pm (AEDT) on Thursday, 19 May 2022, unless extended.

AstiVita will continue to keep you informed of any further developments relating to the Offer. You can seek further information from the Independent Director by emailing the Independent Director at rade.dudurovic@astivita.com.au. You can also find the latest announcements to the ASX made by AstiVita in relation to the Offer at www2.asx.com.au/markets/company/air

Yours sincerely,

Rade Dudurovic Independent Director AstiVita Limited

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SECTION 1

1 DIRECTORS’ RECOMMENDATIONS AND INTENTIONS

1.1 Independent Director’s Recommendation

Having considered the terms of the Offer and the matters discussed in this Section and Section 2 of this Target’s Statement, and the Independent Expert’s Report, the Independent Director feels justified in making a recommendation in relation to the Offer.

The Independent Director recommends that you ACCEPT THE OFFER in the absence of a Superior Offer. The Independent Director notes that he has a relevant interest in 413,667 Shares and intends to accept the Offer in respect of those Shares.

1.2 Delegation of Board’s authority to the Independent Director

The Board consists of the following Directors (further details of whom are set out in section 5.3 of this Target’s Statement):

• (a) Rade Dudurovic (Non-Executive Director);

• (b) Geoffrey Brockwell Acton (Non-executive Director); and

• (c) Lev Mizikovsky – (Executive Chairman).

Mr Mizikovsky is a non-executive director and major shareholder of Tamawood. Mr Acton is the Chief Financial Officer and Company Secretary of Tamawood. As such the duties owed by Messes Mizikovsky and Acton to the Company as Directors, may conflict with the duties that each may owe to Tamawood.

Mr Rade Dudurovic is not a director or other officer of Tamawood, is not employed by Tamawood, and as such owes no duty to Tamawood. Further Mr Dudurovic has no material personal interest in the outcome of the Takeover Offer.

Under the information sharing and conflict of interest protocol in place between Tamawood and AstiVita, Messes Mizikovsky and Acton have advised AstiVita of their respective conflicts of interest in respect of the Takeover Offer and offered to recuse themselves from all AstiVita board and committee meetings, other than those that all directors are required by law to attend to determine a particular matter, for the duration of the Takeover Offer.

The Board has delegated to Mr Dudurovic its full authority to consider the Offer, and make recommendations to Shareholders in respect of the Offer. Mr Dudurovic is referred to throughout this Target’s Statement as the “Independent Director”. The Independent Director has been responsible for the preparation of this Target’s Statement, and has formed the view that the Offer represents fair value for your Shares. Neither Mr Mizikovsky nor Mr Acton have been involved in discussions with the Independent Director with respect to the merits of the Offer, or the appointment of the independent expert, and they have both declined to make any recommendation to Shareholders regarding the Offer.

1.3

Reasons to accept the Offer

(a) The Independent Expert has concluded that the Offer is fair and reasonable to AstiVita Shareholders

The Independent Director has appointed Advisory Partner as the Independent Expert, to evaluate the Offer and prepare an Independent Expert’s Report. The Independent Expert has concluded that the Offer of one (1) Tamawood Share for every five (5) AstiVita Shares is fair and reasonable to AstiVita Shareholders.

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The Independent Expert has opined that as the shares of each of AstiVita and Tamawood are thinly traded, the share price of neither company is a reliable measure of the relevant company’s value. Accordingly, the Independent Expert has not used the share price of either company as its primary valuation method of that company (see sections 4.4 and 6.5 of the Independent Expert’s Report).

Instead, the Independent Expert has opined that the most appropriate measure of each company’s value, is that company’s Future Maintainable Earnings ( FME ). The Independent Expert has defined FME as “the assessed level of sustainable profits, in real terms, that can be expected to be derived from existing operations of the business regardless of short-term economic fluctuations and excludes any one-off profits or losses” (see sections 5.1.1 and 7.1 of the Independent Experts Report).

Using each company’s FME, the Independent Expert has assessed the range of:

• (i) fair market values for an AstiVita Share on a controlling basis, including a 20% control premium, as between $0.348 and $0.399;

• (ii) fair values for a Tamawood Share as between $1.835 and $2.114; and

• (iii) fair market values for an AstiVita Share on a post consolidation basis (having been acquired at a ratio of one (1) Tamawood Shares for every five (5) AstiVita Shares), as between $1.739 and $1.994.

See the Table 1 (page 3), Table 17 (page 30), and Table 35 (page 42) of the Independent Expert Report for further information.

The Independent Expert has defined ‘fair market value’ as “the price that would be negotiated in an open and unrestricted market between a knowledgeable, willing, but not anxious purchaser, and a knowledgeable, willing, but not anxious vendor, acting at arm’s length” (see section 2.2 (Purpose of the Report) of the Independent Experts Report).

On the basis that the above comparison demonstrates that the value of the consideration being offered under the Offer is higher than the fair value of an AstiVita Share for which it will be exchanged, the Independent Expert has concluded that the Offer is fair and reasonable, and in the Best Interests of AstiVita Shareholders (see the top of page 4, and section “ 8.0 Assessment of Fairness ” on page 45 of the Independent Expert’s Report).

The Independent Director of AstiVita encourages you to read the Independent Expert’s Report in its entirety before making any decision whether or not to accept the Offer. The Independent Expert's Report is attached as Annexure A of this Target's Statement.

(b) The Implied Value of the Offer represents a premium to the fair value of the AstiVita shares as assessed by the Independent Expert

The Independent Expert has valued the AstiVita Shares on a controlling basis, including a 20% control premium, and the Offer represents a premium above this assessed value of approximately 13%.

(c) Liquidity of the market for AstiVita Shares

The market for AstiVita Shares is illiquid. On a typical trading day, AstiVita Shares are thinly traded and have a wide bid-ask spread. It is therefore difficult to sell AstiVita Shares even while quoted on the ASX. While the market for Tamawood Shares can also be illiquid, trading volumes are greater, and the bid-ask spread is typically much narrower than that for AstiVita Shares.

The liquidity for AstiVita Shares is unlikely to improve and AstiVita Shareholders who do not accept the Offer will continue to face a thinly traded market for their shares. A single large shareholder such as Tamawood will have control of AstiVita and this may further reduce the liquidity of the Shares. This may result in downward pressure on the trading price of the

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remaining AstiVita Shares and make it even more difficult for remaining AstiVita Shareholders to sell their shares. See Section 4.3 of this Target’s Statement for further details.

(d) No Superior Offer has emerged

As at the date of this Target's Statement, no proposals have been put to AstiVita or are currently under consideration by AstiVita which are alternatives to the Offer, and the Independent Director is not aware of any other proposal that might be made as an alternative to the Offer. AstiVita’s majority shareholder has advised the Independent Director that it intends to accept the Offer. The Bidder’s Statement states that Shareholders who collectively hold approximately 86% of the issued shares of AstiVita intend to accept the Offer (in the absence of a Superior Offer). In addition, AstiVita has signed the Bid I Implementation Agreement with Tamawood which is an exclusive agreement and AstiVita will not solicit any other offers, discussions and negotiations during this period. In these circumstances the Independent Director considers it unlikely that a Superior Offer will emerge.

(e) No guarantee of the future performance of AstiVita

As noted by the Independent Expert, AstiVita is currently a marginally profitable business (with the demerger of VeganicSKN Limited, as resolved at the Company’s annual general meeting) operating in a highly competitive industry, which is dominated by well-established players (Bunnings, Reece, etc). Those players benefit from economies of scale which AstiVita does not enjoy. Currently, AstiVita is sub-scale in a high-volume low margin business. With ongoing supply chain shortages as a result of Covid 19 and other geopolitical events currently in play (such as the war in the Ukraine), AstiVita’s ability to source replacement inventory at an acceptable price, if at all, may be compromised as suppliers will typically favour larger volume customers. This may impact on AstiVita’s ability to win and service business. The Independent Director notes that Tamawood is not obligated to purchase products from AstiVita and the loss of Tamawood as a major customer would financially cripple AstiVita. If successfully completed, the Offer will likely provide AstiVita with more assured access to Tamawood.

(f) Dividends

AstiVita has not paid dividends to its Shareholders. If Tamawood maintains its current dividend payout schedule moving forward, AstiVita Shareholders will be paid dividends after the successful completion of the Offer. In addition, the Independent Director notes that as AstiVita is unlikely to pay dividends in the foreseeable future, AstiVita Shareholders will not be able to realise the value in the Company’s franking credit reserves if the Offer does not complete. Conversely after successful completion of the Offer, the New Tamawood Group should be able to utilise the Company’s accumulated tax losses and franking credits.

There is no guarantee that any improvement in performance will materialise or be enough to justify a share price higher than the Implied Value of the Offer.

(g) Key customer risk

Tamawood represents more than 90% of the revenue of AstiVita post the demerger of VeganicSKN Limited. The acceptance of the Offer will remove the key customer risk.

1.4 Disadvantages associated with accepting the Offer

(a) Shareholders will lose the benefit of any potential upside in AstiVita

AstiVita Shareholders who accept the Offer will not be able to participate in any potential increase in the AstiVita Share price in the future.

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(b) Shareholders will not have the benefit of any subsequent higher offer from any third party

AstiVita Shareholders who accept the Offer will not be able to accept a potential higher offer from a third party in the future. However, the Independent Director is not aware of any competing superior proposal to the Offer.

If AstiVita Shareholders accept the Offer and Tamawood subsequently increases the number of Consideration Shares that an accepting AstiVita Shareholder is entitled to, the AstiVita Shareholders that have already accepted will be entitled to receive the higher number of Consideration Shares.

(c) The tax consequences of accepting the Offer may not be suitable to your financial position

There may be tax consequences of accepting the Offer and AstiVita Shareholders should consult with their tax adviser regarding the tax implications of accepting the Offer, given their own particular circumstances.

(d) Dilutionary effect of the proposed transaction

The Independent Expert notes that acceptance of the Offer will result in dilution of AstiVita Shareholders current 100% interest in AstiVita, to a 15% interest in Tamawood.

1.5 Other considerations

In considering whether to accept the Offer, the Independent Director encourages you to:

• (a) read the whole of this Target’s Statement (and the Independent Expert’s Report) and the Bidder’s Statement;

• (b) have regard to your individual risk profile, portfolio strategy, tax position and financial circumstances;

• (c) consider the choices available to you as outlined in this Target’s Statement; and (d) obtain independent financial, legal, taxation or other professional advice before deciding as to whether or not to accept the Offer.

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SECTION 2

2 KEY INFORMATION

This Section is not intended to address all issues that may be relevant to you.

2.1 This Section should be read together with the rest of this Target's Statement. What is the Offer?	The Bidder is offering one (1) Tamawood Share for every five (5) AstiVita Shares you hold.
2.2 What choices do I have as an AstiVita Shareholder?	As an AstiVita Shareholder you have the choice to: (a) ACCEPTthe Offer for all of your AstiVita Shares; or (b) REJECTthe Offer/do nothing and remain an AstiVita Shareholder, subject to your AstiVita Shares being compulsorily acquired by the Bidder; or (c) SELLyour AstiVita Shares 'on market’, which may be at a higher or lower price than the Implied Value of the Offer. AstiVita Shareholders should carefully consider the Independent Director's recommendation and other important issues set out in this Target’s Statement before deciding.
2.3 What does the Independent Director recommend?	The Independent Director recommends that youACCEPT THE OFFER. The reasons for the Independent Directors recommendation are detailed in Section 1. If there is a change in this recommendation or any material developments in relation to the Offer, AstiVita will lodge a supplementary target’s statement. Lev Mizikovsky is a director, and Geoff Acton is a secretary of the Bidder. Consequently, they do not make a recommendation.
2.4 What should I do?	If you do not understand the Offer or are in doubt as to how to act, you should seek independent financial and taxation advice from your professional adviser(s) in relation to the action that you should take.
2.5 What do the Directors intend to do with their AstiVita Shares?	Mr Lev Mizikovsky, through entities associated with him, holds shares in AstiVita representing 67.94% of the issued shares. Mr Mizikovsky and his associated entities intend to accept the Offer. Mr Geoff Acton, through entities associated with him, holds shares in AstiVita representing 0.58% of the issued shares. Mr Acton and his associated entities intend to accept the Offer. Mr Rade Dudurovic (the Independent Director), through entities associated with him, holds shares in AstiVita representing 1.7% of the issued shares. Mr Dudurovic and his associated entities intend to accept the Offer.

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2.6 How do I ACCEPT the Offer?	ToACCEPTthe Offer, you must follow the instructions in Section 4 of Annexure A (Terms of Takeover Offer) of the Bidder’s Statement.
2.7 How do I reject the Offer?	AstiVita Shareholders who do not wish to accept the Offer or sell their AstiVita Shares ‘on market’ should do nothing.
2.8 If I accept the Offer now, can I withdraw my acceptance?	No, once you have accepted the Offer, you will be legally bound to sell those Shares to the Bidder and you cannot later withdraw your acceptance.
2.9 Can the Bidder vary the Offer?	Yes. The Bidder can vary the Offer by extending the Offer Period, or increasing the value of the consideration payable to accepting AstiVita Shareholders (including by increasing the number of the Consideration Shares that an accepting AstiVita Shareholder will be entitled to under the terms of the Offer).
2.10 When does the Offer finish?	The Bidder has stated that the Offer remains open until5:00pm (AEDT) on Thursday, 19 May 2022. It is possible that the Bidder may choose to extend the Offer Period in accordance with the Corporations Act. The Offer Period may also be automatically extended in certain circumstances. If you wish to follow the Independent Director's recommendation and ACCEPTthe Offer, you need to do so before its scheduled closing date.
2.11 What will happen if the Bidder raises the value of the consideration payable under the Offer?	If you have already accepted the Offer and subsequent to your acceptance the value of the consideration payable under the Offer is increased (whether that is an increased number of Consideration Shares that an accepting AstiVita Shareholder is entitled to or otherwise), then you will be entitled to that increased consideration . However, no such benefit will be available to AstiVita Shareholders that have already sold their AstiVita Shares on market through the ASX.
2.12 What happens if I accept the Offer and a Superior Offer is made for my AstiVita Shares after I accept?	If there is a Superior Offer, the Independent Director will reconsider his recommendation in relation to the Offer and advise AstiVita Shareholders accordingly. The Independent Director is not aware of any potential Superior Offer and considers it unlikely that one will emerge in the circumstances given that according to the Bidder’s Statement, AstiVita Shareholders controlling approximately 86% of the issued share capital of AstiVita between them have indicated that they intend to accept the Offer (subject to any Superior Offer emerging). If you accept the Offer, you will be unable to accept a Superior Offer if one is made.
2.13 What happens if I do nothing?	You will remain an AstiVita Shareholder. If the Bidder acquires 90% or more of the AstiVita Shares, the Bidder intends to compulsorily acquire your AstiVita Shares. See Sections 5.2 and 6.2(b) of the Bidder’s Statement for more details.

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2.14 Can I be forced to sell my AstiVita Shares?	You cannot be forced to sell your AstiVita Shares unless the Bidder proceeds to compulsory acquisition of AstiVita Shares. The Bidder and their associates will need to acquire at least 90% (by number) of AstiVita Shares (under the Offer or otherwise), and 75% (by number) of AstiVita Shares the Bidder offered to acquire under the Offer, in order to exercise compulsory acquisition rights. If the Bidder achieves this and proceeds to compulsory acquisition, then you will be paid the same consideration as is payable by the Bidder under the Offer and you will be forced to sell your AstiVita Shares.
2.15 Will there be any costs associated with accepting the Offer?	By accepting the Offer, you will not pay the Bidder’s brokerage costs. However, you may incur brokerage_to your broker_if you choose to accept the Offer through your broker. There may also be taxation consequences specific to your circumstances. You should confirm the fees, taxes and costs with your broker, accountant, taxation specialist and/or financial adviser.
2.16 What are the tax implications of accepting the Offer?	A general description of the taxation treatment for certain Australian resident AstiVita Shareholders accepting the Offer is set out in Section 7 of the Bidder’s Statement. Shareholders who are resident in a jurisdiction other than Australia should seek their own professional tax advice. Because this advice is general in nature and does not consider your individual circumstances, you should not rely on those descriptions as advice for your own affairs. You should consult your taxation adviser for detailed taxation advice before deciding whether or not to accept the Offer for your AstiVita Shares. You may, for example, be liable for CGT if you sell your AstiVita Shares.
2.17 Can I sell my AstiVita Shares ‘on market’?	Yes, unless you have accepted the Offer you can sell your AstiVita Shares on market. If you sell your AstiVita Shares 'on market’ you will not benefit from any possible increase in the consideration that may be provided under the Offer or a Superior Offer, if one is made.
2.18 Can Foreign Shareholders accept the Offer?	As noted in the Bidder’s Statement, the distribution of the Bidder’s Statement and the making of the Offer may be restricted by the laws or regulations in force in jurisdictions outside of Australia and its external Territories. Accordingly, the Offer is not being made, directly or indirectly, in or into, and will not be capable of acceptance from or within any jurisdiction, if to do so would not be in compliance with the laws of that jurisdiction. If Tamawood determines that you are an Ineligible Foreign Shareholder you will not be entitled to receive the Tamawood Shares as consideration for your Shares pursuant to the Offer, unless Tamawood determines otherwise. Instead Tamawood Shares which would otherwise have been issued to Ineligible Foreign Shareholders will be dealt with in accordance with Section 9.17 (Ineligible Foreign Shareholders) of the Bidder’s Statement, and Section 8 of Annexure A (Terms of Takeover Offer) of the Bidder’s Statement. If you are a Foreign Shareholder the Independent Director urges you to read those sections of the Bidder’s Statement carefully, and to seek independent professional advice if you are in any doubt as to what choices are open to you as regards the Offer.

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2.19 If I ACCEPT the Offer, when will the Tamawood Shares be issued to me?	Tamawood has indicated that if you accept the Offer then it intends to issue the Tamawood Shares to you approximately 10 days after the Offer closes. See Part D of Section 1 of the Bidder’s Statement, and Section 7 of Annexure A (Terms of Takeover Offer) of the Bidder’s Statement for further details.
2.20 How can I get updates on the AstiVita Share price?	If you have access to the internet, you can receive updates by visiting the ASX website atwww2.asx.com.au/markets/company/air
2.21 Who should I call if I have any questions on the Offer?	Shareholders can seek further information from the Independent Director by emailing the Independent Director at rade.dudurovic@astivita.com.au. In addition, announcements made by AstiVita relating to the Offer can be obtained by searching www2.asx.com.au/markets/company/air Alternatively, you should obtain independent advice from your professional adviser, as necessary.

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SECTION 3

3 YOUR CHOICES AS AN ASTIVITA SHAREHOLDER

3.1 Your choices

As an AstiVita Shareholder you have the following choices available to you:

ACCEPT the Offer

• (a) AstiVita Shareholders who accept the Offer:

• (i) will receive the relevant number of Consideration Shares; and,

• (ii) will not be able to withdraw their acceptance and sell their AstiVita Shares (even if a Superior Offer eventuates).

• (b) AstiVita Shareholders who wish to accept the Offer should refer to Section 4 of Annexure A (Terms of Takeover Offer) of the Bidder’s Statement for instructions on how to do so.

REJECT the Offer

• (a) AstiVita Shareholders who do not wish to accept the Offer or sell their AstiVita Shares on market should do nothing.

• (b) If you do not wish to accept the Offer, do not take any action in relation to the documents sent to you by the Bidder.

SELL your AstiVita Shares on market

If you have not already accepted the Offer, you can still sell your AstiVita Shares ‘on market’ for cash. The latest price of AstiVita Shares may be obtained from ASX website www.asx.com.au. AstiVita Shareholders who sell their AstiVita Shares on market:

• (a) may incur a brokerage charge; and

• (b) will not receive the benefits of any Superior Offer.

AstiVita Shareholders who wish to sell their AstiVita Shares ‘on market’ should contact their broker.

3.2 Consider the Target’s Statement before making a decision

In considering your choices, the Independent Director encourages you to read this Target’s Statement (and the attached Independent Expert’s Report) in its entirety before making a decision whether or not to accept the Offer. The Independent Director urges you to seek professional advice if you are unsure of whether accepting or rejecting the Offer is in your best interests, taking into account your individual circumstances.

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SECTION 4

4 INFORMATION ABOUT THE OFFER AND OTHER IMPORTANT ISSUES

4.1 Summary of the Offer

The Bidder is offering one (1) Tamawood Share for each of your five (5) AstiVita Shares held. The full terms of the bid are set out in Annexure A (Terms of Takeover Offer) of the Bidder’s Statement.

An Independent Expert has been appointed to assess the Offer. The Independent Expert has concluded that the Offer is fair and reasonable (refer to the Independent Expert’s Report appearing as Annexure A to this Target’s Statement).

4.2 The Bidder’s voting power in AstiVita

As at the date of this Target’s Statement, the Bidder does not hold a relevant interest in any AstiVita Shares, but has received confirmation from AstiVita Shareholders holding approximately 86% of the AstiVita Shares that they intend to accept the Offer.

4.3 Consequences of the Bidder acquiring less than 90% of AstiVita

If the Bidder acquires less than 90% of the AstiVita Shares (which could only occur if the Bidder waived the Minimum Acceptance Condition with the prior written consent of AstiVita[1] ), then the Bidder will acquire a majority shareholding in AstiVita insufficient to compulsorily acquire the remaining AstiVita Shares. Having said that, the Independent Director notes that this scenario is unlikely to occur given that as noted above in section 4.2 ( The Bidder’s voting power in AstiVita ), the Bidder has received confirmation from Shareholders having a relevant interest in approximately 86% of the outstanding AstiVita Shares, that they intend to accept the Offer.

If the Minimum Acceptance Condition is not satisfied or waived the AstiVita Share price may fall immediately following the end of the Offer Period and it is unlikely that the AstiVita Share price will contain any takeover premium.

4.4 Superior Offer

If you accept the Offer, you may be unable to accept a Superior Offer if one is made. AstiVita Shareholders holding approximately 86% of AstiVita Shares have confirmed to the Bidder that it is their intention to accept the Offer. This may discourage other potential bidders from making a bid for the Company. No Superior Offer has materialised to date, and the Independent Director does not anticipate a Superior Offer in the circumstances.

4.5 Compulsory acquisition

The Bidder has indicated in its Bidder’s Statement that if it becomes entitled under the Corporations Act to proceed to compulsorily acquire outstanding AstiVita Shares at the end of the Offer Period, it intends to do so.

Under Part 6A.1 of the Corporations Act, the Bidder will be able to compulsorily acquire any outstanding AstiVita Shares for which it has not received acceptances, on the same terms as the Offer, if during or at the end of the Offer Period, the Bidder has (together with its associates):

(a) a relevant interest in at least 90% (by number) of the AstiVita Shares; and

1 This is provided for in Section 3.5 of the Bid Implementation Agreement.

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(b) acquired at least 75% (by number) of the securities that it offered to acquire under the Offer (in this case being simply the AstiVita Shares).

If this threshold is met, the Bidder will have one month from the end of the Offer Period within which to give compulsory acquisition notices to AstiVita Shareholders who have rejected the Offer. The number of the Consideration Shares that will be issued to those AstiVita Shareholder, will be the number of the Consideration Shares last offered under the Offer. In certain circumstances if the threshold is not met, the Bidder may still compulsory acquire all outstanding AstiVita Shares with court approval.

In circumstances where the Minimum Acceptance Condition has been waived by the Bidder with AstiVita’s prior written consent[2] (although this scenario is unlikely given the matters discussed in section 4.2 above), it is possible for the Bidder to acquire some but an insufficient number of AstiVita Shares under the Offer such that it does not immediately become entitled to compulsorily acquire AstiVita Shares in accordance with the procedures discussed above. In these circumstances the Bidder may nevertheless become entitled at some later time to exercise general compulsory acquisition rights, should the Bidder subsequently acquire sufficient AstiVita Shares to give it a relevant interest in 90% (by number) of the issued AstiVita Shares. This may occur, for example, by way of item 9 of section 611 of the Corporations Act which would permits the Bidder to acquire 3% of AstiVita Shares on issue in any 6-month period after it has held a stake of at least 19% throughout that 6 month period, without contravening the Corporations Act.

If AstiVita Shares are compulsorily acquired AstiVita Shareholders whose AstiVita Shares are compulsorily acquired are not likely to receive any payment until at least one month after the compulsory acquisition notices are sent.

AstiVita Shareholders may challenge any compulsory acquisition, but this would require the relevant AstiVita Shareholders to establish to the satisfaction of a court that the terms of the Offer do not represent fair value for the AstiVita Shares.

4.6 Market trading

AstiVita Shareholders who accept the Offer will be giving up their rights to sell or otherwise deal with their AstiVita Shares.

4.7 Taxation

This Section sets out general information about the tax implications of the Offer for AstiVita Shareholders. This information is of a general nature only.

AstiVita Shareholders should seek their own taxation advice, having regard to their own circumstances. AstiVita Shareholders should also refer to Section 7 of the Bidder’s Statement for a full description of the tax implications of accepting the Offer.

Importantly, depending on the individual circumstances, AstiVita Shareholders who are Australian residents and hold their AstiVita Shares on capital account may realise a gain or a loss and may incur a liability for taxation by selling their AstiVita Shares to the Bidder. The extent of any tax liability will depend on each AstiVita Shareholder’s individual circumstances.

AstiVita Shareholders who are individuals, certain trusts or superannuation funds may be eligible to claim a CGT discount on any net gains arising on AstiVita Shares acquired at least 12 months before disposal.

No discount is available on any capital gain made on acceptance of the Offer if that acceptance is made within 12 months of the date of acquisition of those AstiVita Shares.

2 Ibid.

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4.8 How to accept the Offer

Instructions on how to accept the Offer are set out in Section 4 of Annexure A (Terms of Takeover Offer) of the Bidder’s Statement.

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SECTION 5

5 ABOUT ASTIVITA

5.1 Background information on AstiVita

AstiVita was incorporated on 15 September 2009 and listed on the ASX on 11 December 2009. Its 52-week trading range has been $0.57 – $1.00.

AstiVita’s key business areas are importing and distributing kitchen appliances, sanitary-ware, bathroom products, solar hot water, and photovoltaic systems. Its products include baths, basins, toilet suites, tapware, and solar hot water. Its main operations are in Brisbane, Queensland.

History since listing last trading price

1-year range $0.57 – $1.00 3-year range $0.57 – $1.80

5.2 Directors and management

(a) Board of Directors

Rade Dudurovic – Non-Executive Director

Appointed on 15 September 2009, Rade has an extensive background in private equity with strong exposure to industrial and branded consumer manufacturing and distribution businesses. Mr Dudurovic has over 20 years’ experience in investment banking and private equity, including senior executive roles with PREMA Capital, Farallon Capital, ANZ Private Equity, PWC Financial Advisory and Peregrine Investments. He has qualifications in commerce and law and is a CPA as well as Senior Fellow of FINSIA.

Geoffrey Brockwell Acton – Non-Executive Director, Company Secretary

Appointed on 4 October 2011, Geoffrey has had an extensive career history holding such roles as director, chief financial officer, company secretary and head of renewable energy certificates. Mr Acton offers a range of business services including company secretarial, payroll outsourcing, internal audit functions and quality assurance work. He holds a Bachelor of Commerce, is an Associate Chartered Accountant, and is a Graduate of the Australian Institute of Company Directors.

Lev Mizikovsky – Executive Chairman

Appointed on 15 September 2009, Lev has an extensive business career having spearheaded the growth of Tamawood and been closely involved with the importation of renewable energy products, hot water systems and bathroom and kitchen products through his shareholding and executive chairman role in AstiVita. Since 1997, Lev has been a Fellow of the Australian Institute of Company Directors (AICD). He is a substantial shareholder in a number of other Queensland Companies including Lindsay Australia Limited (. Lev is a Nonexecutive Chairman of Advance ZincTek Limited and since 3 March 2017, Chairman of SenterpriSys Limited.

(b) Company Secretaries

Narelle Leanne Lynch – Company Secretary

Appointed on 24 May 2013

Geoffrey Brockwell Acton – Company Secretary

Appointed on 15 September 2009.

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SECTION 6

6 ABOUT TAMAWOOD

6.1 Background information on Tamawood

Tamawood is a residential house builder in Queensland and New South Wales. It was incorporated on 3 July 1989 in Australia. It is currently listed on the ASX having commenced quotation on 10 August 2000. It derives its revenue from home design, home construction, franchising and licensing activities. The company operates predominantly in Australia and the head office in Rocklea, Queensland.

Further information regarding Tamawood can be found in the Independent Expert Report and Bidder’s Statement.

6.2 Ownership and Capital Structure

The Tamawood’s corporate structure is set out below:

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Source: section 4.3 of the Independent Expert Report

As at the Offer, Tamawood had 28,826,782 shares on issue. The top 10 shareholders and total issued ordinary shares of Tamawood as at the Offer are summarised below:

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6.3 Directors and management

(a) Board of Directors

Mr Robert Lynch – Non-Executive Chairman LREA, Justice of the Peace

As Chairman of Tamawood Limited, Robert has had more than 30 years’ experience in residential housing construction and land development. Robert was CEO of Mirvac Homes for 17 years and Clarendon Homes for two years. Robert is a past President of the New South Wales Housing Industry Association. Robert has been a Non-executive Director of the Tamawood Group since 2008 and Chairman of the Group since November 2011. He is currently the Chairman of the Group's Risk Management Committee and is a member of the Nominations, Remuneration and Audit Committees. Robert was formerly a Non-executive Director of AstiVita Limited until 16 March 2017.

Mr Lev Mizikovsky – Non-Executive Director FAICD

Lev Mizikovsky started Tamawood in July 1989. Tamawood was listed on the ASX in August 2000 and in December 2000 acquired Dixon Homes.

Lev has an extensive business career having spearheaded the growth of Tamawood and been closely involved with the importation of renewable energy products, hot water systems and bathroom and kitchen products through his shareholding and executive chairman role in AstiVita. He is a fellow of the Australian Institute of Company Directors.

He is a substantial shareholder in a number of other Queensland Companies including Lindsay Australia Limited. Lev is a Non-executive Chairman of Advance ZincTek Limited and since 3 March 2017, Chairman of SenterpriSys Limited

Mr Tim Bartholomaeus – Managing Director GAICD

Tim has been with the group since 1996 commencing as a Building Designer. Since 2001 he held a number of management positions including Design and Estimating Manager, Construction Manager, Administration Manager, Premium Brands Manager and Sales & Marketing Manager. Timothy was Chief Operating Officer from 2010 until his appointment as Managing Director and is a Director of the Group's Dixon Homes NSW operations.

Ms Linda Barr– Non-Executive Director

Linda Barr will be appointed on 6 April 2022 and bring to Tamawood extensive knowledge in accounting systems and over 30 years in accounting and management roles. Growth and expansion focused director with executive experience in finance and ICT gained in Manufacturing, Engineering, Hospitality and Wholesale Distribution industries. She gained valuable skills in senior finance and executive roles reporting to an ASX 100 listed Company Board, where she focused on delivering strategic integration of acquisitions, identifying synergies, and creating value added services for Finance and ICT to support business operations. An accomplished leader of cultural change, business innovation and transformation. Determined to seek and create business value by acquisition, digital transformation, operational excellence, and financial acumen.

(b) Company Secretaries

Narelle Leanne Lynch – Company Secretary

Appointed on 24 May 2013

Geoffrey Brockwell Acton – Company Secretary

Appointed on 09 June 2000

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SECTION 7

7 INTERESTS OF DIRECTORS

7.1 Interests of Directors in AstiVita securities

All three Directors hold AstiVita Shares and have Relevant Interests in any securities issued by AstiVita.

7.2 Dealings by Directors in AstiVita securities

No Directors have acquired or disposed of any AstiVita Shares at any time in the 4 months period ending on the date immediately prior to the date of this Target’s Statement.

7.3 Interests and dealings in the Bidder

Mr Mizikovsky and his associated entities is a substantial holder of the Bidder, holding 54.35% of the Bidder’s shares on issue. It is noted that the acquisition of AstiVita Shares from Mr Mizikovsky and his associated entities under the Offer requires the approval of Tamawood shareholders, and is a condition of the Offer.

7.4 Benefits to Directors

As a result of the Offer, no benefit (other than a benefit permitted by section 200F or section 200G of the Corporations Act and compulsory superannuation entitlements) has been paid or will be paid to any Director, secretary or executive officer in connection with the loss of, or their resignation from, their office.

7.5 Conditional agreements

No agreement has been made between any of the Directors and any other person in connection with or conditional upon the outcome of the Offer.

7.6 Interests in contracts with the Bidder

Mr Lev Mizikovsky is a director and majority shareholder of the Bidder. Mr Geoffrey Brockwell Acton is the company secretary of the Bidder.

According to the Tamawood annual report for the year ended 30 June 2021, the Bidder or its subsidiaries has entered into related party transactions with Mr Lev Mizikovsky and Mr Geoffrey Acton, or entities associated with them. Details of these related party transactions are disclosed in Note 29 of the annual report of the Bidder for the year ended 30 June 2021.

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SECTION 8

8 ADDITIONAL INFORMATION

8.1 Other material information

This Target’s Statement is required under the Corporations Act to include all the information that AstiVita Shareholders and their professional advisers would reasonably require to make an informed assessment of whether to accept the Offer, but:

• (a) only to the extent to which it is reasonable for AstiVita Shareholders and their professional advisers to expect to find this information in this Target’s Statement; and

• (b) only if the information is known to any Director.

In this context, the Independent Director is of the opinion that the information that AstiVita Shareholders and their professional advisers would reasonably require to make an informed assessment whether to accept the Offer is the information contained in:

• (a) this Target’s Statement;

• (b) the Independent Expert’s Report appearing as Annexure A to this Target’s Statement; (c) the annual and other financial reports, releases, announcements and documents released to ASX by AstiVita prior to the date of this Target’s Statement; and

• (d) the Bidder’s Statement (to the extent that the information contained in that document is not inconsistent with the Target’s Statement).

The Independent Director has assumed, for the purposes of preparing this Target’s Statement, that the information in the Bidder’s Statement is accurate (unless has expressly indicated otherwise in this Target’s Statement). However, the Independent Director does not take any responsibility for the contents of the Bidder’s Statement and are not to be taken to be adopting or endorsing, in any way, any of the statements contained in it.

In deciding what information should be included in this Target’s Statement, the Independent Director has had regard to:

• (a) the nature of the AstiVita Shares and the Consideration Shares;

• (b) the matters that AstiVita Shareholders may reasonably be expected to know;

• (c) the fact that certain matters may reasonably be expected to be known to AstiVita Shareholders’ professional advisers; and

• (d) the time and resources available to the Independent Director to prepare this Target’s Statement.

8.2 Issued securities

The total number of AstiVita Shares on issue on 7 April 2022 (being the last Business Day before this Target’s Statement was printed) was 24,841,974.

8.3 Consents

The Independent Director has given and have not, before the lodgement of this Target's Statement with ASIC, withdrawn their consent to be named in this Target's Statement in the form and context in which they are named.

Advisory Partner, as the Independent Expert, has given and before lodgement of this Target’s Statement has not withdrawn its written consent to be named as the Independent Expert in the form and context in which it is so named.

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GRT Lawyers has given and before lodgement of this Target’s Statement has not withdrawn its written consent to be named as the legal advisor to the Offer in the form and context in which it is so named.

Neither Advisory Partner nor GRT Lawyers:

• (a) has authorised or caused the issue of the Target’s Statement;

• (b) makes, or purports to make, any statement in this Target’s Statement other than as specified in this Section.

Advisory Partner and GRT Lawyers each separately to the maximum extent permitted by law, expressly disclaim all liability in respect of, make no representation regarding and take no responsibility for, any part of this Target’s Statement.

8.4 Miscellaneous and publicly available information

Shareholders should have regard to all publicly available information concerning:

• (a) AstiVita including material announcements that have been lodged with ASX prior to the date of this Target’s Statement, which announcements can be found at www2.asx.com.au/markets/company/air; and

• (b) Tamawood including material announcements that have been lodged with ASX prior to the date of this Target Statement, which announcements can be found at www2.asx.com.au/markets/company/twd.

This Target’s Statement contains statements which are made in, or based upon, statements contained in the Bidder’s Statement, the Bidder’s annual report for the year ended 30 Jun 2021, and other documents lodged with ASIC or given to the ASX. As permitted by ASIC Class Order [CO 13/521], the consent of the Bidder or other parties marking those statements, is not required for the inclusion of the statements in the Target’s Statement.

8.5 Date of Target’s Statement

This Target’s Statement is dated 8 April 2022, which is the date on which it was lodged with ASIC.

8.6 Approval of Target’s Statement

This Target’s Statement has been approved by a resolution passed by the Directors of AstiVita on 8 April 2022.

Rade Dudurovic Independent Director AstiVita Limited

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SECTION 9

9 GLOSSARY

9.1 Definitions

AstiVita or Company AstiVita Limited (ACN 139 461 733). AstiVita Group AstiVita and its Related Bodies Corporate. AstiVita Share an ordinary fully paid share in AstiVita. AstiVita Shareholder or a registered holder of AstiVita Shares. Shareholder ASIC the Australian Securities and Investments Commission. ASX ASX Limited (ACN 008 624 691). Bidder or Tamawood Tamawood Limited (ACN 010 954 499). Bidder’s Statement means the Bidder’s Statement in relation to the Offer, prepared by the Bidder and dated 6 April 2022. Bid Implementation means the agreement between Tamawood and AstiVita Agreement pursuant to which Tamawood agreed to make the Offer, a copy of which was attached to the announcement made to the ASX by Tamawood on 16 March 2022. Board the board of Directors of AstiVita. Business Day a day on which: (a) ASX is open for trading in securities; and (b) Banks are open for general banking business in Brisbane. CGT Capital Gains Tax. Competing Proposal any proposal or transaction, which, if completed, would mean a person (other than the Bidder or any associate of the Bidder) would:

• (a) acquire control of AstiVita, within the meaning of section 50AA of the Corporations Act, or a material party of AstiVita’s business; or

• (b) otherwise acquire or merge (including by a reverse takeover bid or dual listed AstiVita structure) with AstiVita.

• Consideration Shares means the Tamawood Shares to be issued to an AstiVita Shareholders accepting the Offer, on the basis of one (1) Tamawood Share for every five (5) AstiVita Shares held by that Shareholder at the time of accepting the Offer.

Corporations Act Corporations Act 2001 (Cth). Directors the current Directors of AstiVita. EBIT earnings before interest and tax.

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Foreign Shareholder Implied Value of the Offer Ineligible Foreign Shareholder Independent Director Independent Expert Independent Expert’s Report Minimum Acceptance Condition New Tamawood Group Offer Offer Period Related Body Corporate Relevant Interest Superior Offer Tamawood Group Tamawood Share Target’s Statement

any AstiVita Shareholder whose registered address as noted in the AstiVita register, is outside of Australia. means the theoretical value of an AstiVita Share implied by the terms of the Offer of one (1) Tamawood Share for every five (5) AstiVita Shares, as set out in the section 5.3 of the Target’s Statement. means any AstiVita Shareholder whose address, as entered in the register of members of AstiVita, is in a jurisdiction other than Australia (and its external Territories), unless Tamawood otherwise determines after being satisfied that it is not unlawful, not unduly onerous and not unduly impracticable to make the Offer to an AstiVita Shareholder in the relevant jurisdiction and to issue Tamawood Shares to such an AstiVita Shareholder on acceptance of the Offer, and that it is not unlawful for such an AstiVita Shareholder to accept the Offer in such circumstances in the relevant jurisdiction. Mr Rade Dudurovic. Advisory Partner. the report of the Independent Expert dated 1 April 2022, which is attached as Annexure A to this Target’s Statement. means the condition set out in Section 9(a) of Annexure A (Terms of Takeover Offer) of the Bidder’s Statement which provides that the Offer and any contract that result from acceptance of the Offer is subject to Tamawood holding a Relevant Interest in 90% of the aggregate of the AstiVita Shares on issue (on a fully diluted basis). means Tamawood and its subsidiaries after successful completion of the Offer, including without limitation AstiVita. the Offer by the Bidder for AstiVita Shares under Chapter 6 of the Corporations Act 2001 as described in Annexure A (Terms of Takeover Offer) of the Bidder’s Statement. has the meaning it is given in the Bidder’s Statement. has the same meaning as in the Corporations Act 2001. has the same meaning as in the Corporations Act 2001. (a) a Competing Proposal; or (b) a variation to the Offer by the Bidder; which AstiVita determines to be more favourable to the Shareholders than the Offer, taking into account all terms and conditions of the Competing Proposal or variation to the Offer by the Bidder. means Tamawood and its subsidiaries. an ordinary fully paid share in Tamawood. this booklet.

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9.2 Interpretation

Unless the context otherwise requires:

• (a) headings used in this Target’s Statement are inserted for convenience and do not affect the interpretation of this Target’s Statement;

• (b) words or phrases defined in the Corporations Act have the same meaning in this Target’s Statement;

• (c) a reference to a “Section” is a reference to, as relevant, a section of this Target’s Statement or the Bidder’s Statement;

• (d) a reference to a statute, ordinance, code or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them;

• (e) the singular includes the plural and vice versa;

• (f) the word “person” includes an individual, a firm, a body corporate, a partnership, a joint venture, an

• (g) unincorporated body or association, or any government agency; and

• (h) Australian dollars, dollars, A$ or $ is a reference to the lawful currency of Australia.

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SECTION 10

10 CORPORATE DIRECTORY

BOARD OF DIRECTORS

Executive Chairman Lev Mizikovsky

Directors

Geoffrey Brockwell Acton Rade Dudurovic

REGISTERED OFFICE

243 Milton Road Milton QLD 4064

SHARE REGISTRY

Computershare Investor Services Pty Limited Level 1, 200 Mary Street Brisbane QLD 4000 Phone: 1300 552 270

LEGAL ADVISERS

GRT Lawyers Level 27, 111 Eagle Street Brisbane QLD 4000 Phone: +61 7 3309 7000

INDEPENDENT EXPERT

Advisory Partner Level 3, 349 Coronation Drive Milton QLD 4064 Phone: +61 7 3106 3399

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Annexure A – Independent Expert’s Report

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AstiVita Limited

Independent Expert’s Report

1 April 2022

INDEPENDENT EXPERT REPORT ASTIVITA | Limited liability by a scheme approved under Professional Standards Legislation.

==> picture [146 x 31] intentionally omitted <==

Financial Services Guide

About us

Advisory Partner Connect Pty Ltd (“Advisory Partner”) a Corporate Authorised Representative of AP Lloyds Pty Ltd ACN 643 090 359 Australian Financial Services Licence (“AFSL”) 526061 has been engaged by AstiVita Limited (ASX:AIR) (“AstiVita”) or ( “the Company”) to provide financial product advice in the form of an independent expert report (“the Report”) to express our opinion whether the offer to purchase AstiVita by Tamawood Limited (ASX:TWD) (“TWD”) on a scrip for scrip basis, 5 AstiVita for 1 TWD share is fair and reasonable (“Offer”) . Our Report sets out our opinion as to the Fair Market Value of the shares in AstiVita. The Corporations Act 2001 (Cth) requires us to provide this Financial Services Guide (“FSG”) in connection with the attached Report prepared for AstiVita. You are not the party who engaged us to prepare this Report and we are not acting for any person other than AstiVita. This FSG provides important information designed to assist Shareholders in forming their views of the Offer and in understanding any general financial advice provided by Advisory Partner in this Report. Our Report is not intended to comprise personal retail financial product advice to retail investors or market-related advice to retail investors. This FSG contains information about our engagement by the directors of AstiVita to prepare this Report in connection with the Offer, the financial services we are authorised to provide, the remuneration we (and any other relevant parties) may receive in connection with the Engagement, and details of our internal and external dispute resolution systems and how these may be accessed.

Financial services we are authorised to provide

Advisory Partner, the holder of Australian Financial Services Licence number 526061, is responsible to you for the services provided under this FSG. Our Australian Financial Services Licence authorises us to provide the following services to both retail and wholesale clients, financial product advice in relation to securities, fixed income and derivatives.

General financial product advice

This Report contains only general financial product advice. It was prepared without taking into account your personal objectives, financial situation or needs. Where the advice relates to the application for or acquisition of a financial product, you should also obtain and read carefully the relevant offer document or explanatory memorandum provided by the issuer or seller of the financial product before making a decision regarding the application for or acquisition of the financial product.

Remuneration, commissions and other benefits

Advisory Partner charges fees for its services and will receive a fee of $20,000 - $22,000 (excluding GST) for its work on this Report. These fees have been agreed on, and will be paid solely by AstiVita, which has engaged our services for the purpose of providing this Report. Advisory Partner may seek reimbursement of any out of pocket expenses incurred in providing these services. Our advisers are directors and employees of Advisory Partner who are paid salaries and dividends by Advisory Partner and may also receive bonuses and other benefits from Advisory Partner. Our advisers may alternatively be paid by means of commission determined by a percentage of revenue written by the adviser.

Associations and relationships

Other than as set out in this FSG or this Report, Advisory Partner has no association or relationship with any person who might reasonably be expected to be capable of influencing them in providing advice under the Engagement. Advisory Partner, its officers and employees and other related parties have not and will not receive, whether directly or indirectly, any commission, fees, or benefits, except for the fees to be paid to Advisory Partner for services rendered in producing this Report. Advisory Partner, its directors and employees do not have an interest in securities, directly or indirectly, which are the subject of this Report. Advisory Partner may perform paid services in the ordinary course of business for entities, which are the subject of this Report.

Risks associated with our advice

This Advisory Partner advice is provided in connection with the attached Report relating to the Offer. The Report comprises general product advice and does not comprise personal retail financial product advice to retail investors or market-related advice to retail investors. The Report is an expression of Advisory Partner’s opinion as to whether the Offer is fair and reasonable. However, Advisory Partner's opinion should not be construed as a recommendation as to whether or not to approve the Proposed Transaction. Approval or rejection of the Offer is a matter for individual Shareholders based on their own circumstances, including risk profile, liquidity preference, investment strategy, portfolio structure, and tax position. Shareholders who are in any doubt as to the action they should take in relation to the Offer should consult their own independent professional advisers. Further information on the risks, assumptions and qualifications associated with the advice is contained within the Report.

Compensation arrangements

The law requires Advisory Partner to have arrangements in place to compensate certain persons for loss or damage they suffer from certain breaches of the Corporations Act by Advisory Partner or its representatives. Advisory Partner has internal compensation arrangements as well as professional indemnity insurance that satisfy these requirements.

Complaints

As an Australian Financial Services Licence holder, we are required to have an internal complaints-handling mechanism. All complaints can be addressed to us at Level 3, 349 Coronation Drive, Milton QLD 4064. You may contact us on T +61 7 3106 3399 or F +61 7 3054 0438, E:admin@advisorypartner.com.au. If we are not able to resolve your complaint to your satisfaction within 30 days of first lodging it with us, you are entitled to have your matter referred to the Australian Financial Complaints Authority (AFCA). You will not be charged for using the AFCA service. To contact the AFCA: Tel: 1800 931 678 or make a complaint at https://www.afca.org.au/make-a-complaint.

Privacy & use of information

We do not collect personal information on individual clients and are bound by the Advisory Partner Privacy Policy in the way that it governs personal information collected on clients. If you have any questions on privacy please see our privacy policy on our website.

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1 April 2022

The Directors AstiVita Limited 243 Milton Road Milton QLD 4064

Dear Sirs

INDEPENDENT EXPERT’S REPORT – PURCHASE OF ASTIVITA LIMITED BY TAMAWOOD LIMITED

Introduction

On 16 March 2022, AstiVita Limited (“ AstiVita or the Company ” ) entered into a Bid Implementation Agreement with Tamawood Limited (“ TWD” or “Tamawood” ) under which TWD will make an agreed offmarket takeover bid for all the issues and outstanding shares in AstiVita on the basis of the issues of 1 share in Tamawood for every 5 shares in AstiVita (“ the Offer ”). AstiVita will become a wholly owned subsidiary of TWD. AstiVita shareholders will own approximately 15% of TWD, post the transaction. The directors have requested Advisory Partner Connect Pty Ltd (“ Advisory Partner ”) to prepare this report to assist the nonassociated shareholders (“ the Shareholders ”) to make a decision on the Offer.

The Offer agreed between AstiVita and TWD has the following elements:

• AstiVita shareholders will be offered the basis of the issues of 1 (one) TWD share for every 5 (five) shares currently held in AstiVita;

• At or before the end of the Offer Period, TWD has a Relevant Interest in 90% of the aggregate of the AstiVita Shares on issue (on a fully diluted basis);

• The Offer being subject to (amongst other things) a strictly non-waivable minimum acceptance condition so as to ensure that TWD acquires 100% of AstiVita if the Offer is to proceed; and

• The shareholders TWD will consider matters relating to the Offer in an extraordinary general meeting.

AstiVita has engaged Advisory Partner to provide an independent expert report (the “ Report” or “IER” ), which will accompany the Target statement for the Shareholders, to be prepared by Directors of AstiVita.

Summary Opinion

In our opinion, the Offer is fair and reasonable for the Shareholders of AstiVita.

Fairness

In forming our opinion to the fairness of the Offer, we have valued each component of the proposal being the fair market value of an AstiVita share and the fair market value of the TWD consideration.

Table 1: Fair Value

Fair Value	Unit	Low Value	High Value
Fair Market Value of an AIR share on a controlling basis	$	0.348	0.399
Consolidation ratio(5 AstiVita Shares for 1 TWD share)		5.0	5.0
Fair Market Value of an AstiVita share (Post Consolidation)	$	1.739	1.994
Fair Value of TWD Share	$	1.976	2.255
Premium /(Discount)		13.6%	13.1%

Source: AP Analysis

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Advisory Partner assessed the fair market value of 5 AstiVita shares, on a control basis, is between $1.739 and $1.994 per share. By comparison, the assessed value of the consideration provided for under the Offer is between $1.976 and $2.255 per share. As demonstrated above, the value of the consideration being offered is higher than the value of an AstiVita share and as a result, the Offer is considered fair and in the Best Interests of AstiVita Shareholders.

We note that we have valued the AIR shares on a controlling basis, which allows for a 20% control premium, and the Offer represents a premium above the control premium of more than 13%.

Reasonableness

As the Offer is fair, it is also reasonable. To assist the Shareholders in their decision-making process we have summarized the following:

• The likely advantages and disadvantages associated with the Offer; and

• Alternatives, including the position of Shareholders if the Offer does not proceed.

Shareholders of AstiVita should read the full Report, where their matters are explained in more details.

Advantages of Approving the Offer

Set out below is a summary of the key advantages to the Shareholders of accepting the Offer.

• Key customer risk TWD represents more than 90% of the revenue of AstiVita post the demerger of VeganicSKN Limited ( “Veganic” ). The acceptance of the Offer will remove the key customer risk.

• Dividends AstiVita has not been paying dividends to its shareholders. If TWD retains its current dividend payout schedule moving forward, AstiVita shareholders will be paid dividends after the merger is complete.

• Liquidity of AstiVita’s Shares AstiVita shareholders currently face illiquidity in the trading of their shares. On a typical trading day, AstiVita shares are thinly traded and have a wide bid-ask spread increasing price. As a result it is difficult to sell shares in AstiVita. Whilst TWD shareholders also face illiquidity, trading volumes are greater, and the bid-ask spread is typically much narrower.

• Sub-Optimal industry dominated by a handful of well-established players AstiVita is currently a marginally profitable business (with the demerger of Veganic, as resolved at the Company’s annual general meeting) operating in a highly competitive industry dominated by lwell-established players. Unlike AstiVita, the well-established players (Bunnings, Reece, etc.) do benefit from significant economies of scale. Currently, AstiVita is sub-scale in a high-volume low margin business. With ongoing supply chain shortages, AstiVita’s ability to source replacement inventory may be compromised as suppliers will typically favour larger volume customers.

Disadvantages

• Dilution of interest

The Offer will result in the dilution of the shareholders 100% interest in AstiVita to 15% of the issued shares in TWD.

Other Considerations

• Availability of alternative transaction

AstiVita has signed a binding Bid Implementation Agreement with TWD which is an exclusive agreement and AstiVita will not solicit any other offers, discussions and negotiations during this period. The majority Shareholder has indicated it intends to accept the Offer. Given the fact, that

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majority shareholder intends to accept the Offer, an alternative Offer is unlikely to emerge in these circumstances.

Shareholder circumstances

Advisory Partner has not considered the effect of the Offer on the particular circumstances of individual Shareholders. Some individual Shareholders may place a different emphasis on various aspects of Proposed Transaction from that adopted in this Report. Accordingly, individuals may reach different conclusions as to whether or not the Offer is in their individual best interests. The decision of an individual Shareholder in relation to the Offer may be influenced by their particular circumstances (including their taxation position) and accordingly, Shareholders are advised to seek their own independent advice.

Other matters

This Report has been requested by the AstiVita Directors to assist the Shareholders in their decision to accept or reject the Proposed Transaction.

This Report should not be used for any other purpose and Advisory Partner does not accept any responsibility for its use outside this purpose. Except in accordance with the stated purpose, no extract, quote or copy of our Report, in whole or in part, should be reproduced without our written consent, as to the form and context in which it may appear.

Advisory Partner acknowledges that this Report may be lodged by the Directors with the ASX.

Conclusion

Based on the above, we have concluded that the Offer is “fair” having assessed the consideration paid is greater than the value of a Consolidated AstiVita share, and as a result of being fair the transaction is also “reasonable”.

This opinion should be read in conjunction with the full text of this report which sets out our findings.

Yours faithfully

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Brett Plant Director

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Table of Contents

able of Contents	able of Contents
FINANCIALSERVICESGUIDE................................................................................................................................. 2
TABLE	OFCONTENTS.......................................................................................................................................... 6
GLOSSARY OFTERMS......................................................................................................................................... 8
1.0	OUTLINE OF THEOFFER........................................................................................................................... 9
1.1	Introduction and Background........................................................................................................ 9
1.2	Key steps and Conditions of the Offer ........................................................................................... 9
1.3	Outcome of the Offer .................................................................................................................... 9
2.0	PURPOSE, SCOPE ANDBASIS OFASSESSMENT.......................................................................................... 11
2.1	Legislative requirements ............................................................................................................. 11
2.2	Purpose of the report .................................................................................................................. 11
2.3	Scope ........................................................................................................................................... 11
2.4	Basis of evaluation ...................................................................................................................... 12
2.5	Reliance on Information .............................................................................................................. 13
2.6	Current Market Conditions .......................................................................................................... 13
2.7	Sources of Information ................................................................................................................ 13
2.8	Assumptions ................................................................................................................................ 14
3.0	BUSINESSENVIRONMENT...................................................................................................................... 15
3.1	Economic Analysis ....................................................................................................................... 15
3.2	Industry Analysis ......................................................................................................................... 15
4.0	TWD COMPANYPROFILE..................................................................................................................... 18
4.1	Company overview ...................................................................................................................... 18
4.2	Key personnel .............................................................................................................................. 19
4.3	Ownership and Capital Structure ................................................................................................ 20
4.4	Share Price Analysis ..................................................................................................................... 21
4.5	Historical Profit and Loss ............................................................................................................. 23
4.6	Historical Balance Sheet .............................................................................................................. 24
5.0	VALUATION OFTWD........................................................................................................................... 25
5.1	Valuation of TWD shares ............................................................................................................. 25
5.1.1 Future Maintainable Earnings ..................................................................................................... 25
5.1.2 Share market trading multiples ................................................................................................... 26
5.1.3 Earnings Multiple ........................................................................................................................ 27
5.1.4 Surplus assets .............................................................................................................................. 29
5.1.5 Valuation conclusion ................................................................................................................... 29
5.1.6 Other Valuation Methods Considered ......................................................................................... 30
6.0	ASTIVITACOMPANYPROFILE................................................................................................................ 32
6.1	Company overview ...................................................................................................................... 32
6.2	Key personnel .............................................................................................................................. 32
6.3	Ownership and Capital Structure ................................................................................................ 33
6.4	SWOT Analysis ............................................................................................................................. 34
6.5	Share Price Analysis ..................................................................................................................... 34
6.6	Historical Profit and Loss ............................................................................................................. 36
6.7	Historical Balance Sheet .............................................................................................................. 37
6.8	Historical Profit and Loss - VeganicSKN Limited Removed .......................................................... 38
6.9	Current Balance Sheet - VeganicSKN Limited Removed .............................................................. 39
7.0	VALUATION OFASTIVITA’S SHARES........................................................................................................ 40
7.1	Future Maintainable Earnings ..................................................................................................... 40
7.1.1 Earnings Multiple ........................................................................................................................ 40
7.1.2 Surplus assets .............................................................................................................................. 40
7.1.3 Valuation conclusion ................................................................................................................... 41
7.2	Share Valuation Cross Check ....................................................................................................... 42
7.3	Premium for Control .................................................................................................................... 43

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7.4	Valuation Cross Check Conclusion ............................................................................................... 43
8.0	ASSESSMENT OFFAIRNESS.................................................................................................................... 44
9.0	QUALIFICATIONS, DECLARATIONS, ANDCONSENTS.................................................................................... 45
9.1	Qualifications .............................................................................................................................. 45
9.2	Declarations ................................................................................................................................ 45
9.3	Independence .............................................................................................................................. 45
9.4	Indemnity .................................................................................................................................... 46
9.5	Consents ...................................................................................................................................... 46
9.6	Other ........................................................................................................................................... 46
APPENDIX1: SOURCES OFINFORMATION............................................................................................................ 47
APPENDIX2: VALUATIONMETHODS................................................................................................................... 48
APPENDIX3: DESCRIPTION OFCOMPARABLECOMPANIES...................................................................................... 50

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Glossary of Terms

Table 2: Glossary of Terms

Term Meaning Advisory Partner or we Advisory Partner Connect Pty Ltd or us or our ASIC Australian Securities and Investment Commission AstiVita AstiVita Limited ASX Australian Securities Exchange Bid-Ask Spread A bid-ask spread is the amount by which the ask price exceeds the bid price for an asset in the market. Control Premium An allowance made for the premium for control given the strategic benefit that a controlling interest would provide Corporations Act Corporations Act 2001 Dilution Dilution refers to the reduction in the percentage of existing shareholders’ ownership in a company when it issues new shares of stock. EBITDA Earnings before Interest, Tax, Depreciation and Amortisation EBITDA Multiple The ratio Enterprise Value: Earnings Before Interest Tax Depreciation and Amortisation Engagement Our engagement by the Directors of AstiVita to prepare this Report in connection with the takeover bid. Enterprise Value The total value of the business and is equal to Debt + Equity FOS Financial Ombudsman Service Free Float The shares of a company that can be publicly traded and are not restricted (ie., held by insiders). FSG Financial Services Guide Future Maintainable The capitalisation of estimated future maintainable earnings by an appropriate multiple. Earnings Method FY Financial Year HY Half Year Liquidity The ease in which an asset or security can be converted into ready cash without affecting its market price. Merged Company The combined company post-transaction where AIR shareholders will own approximately 15% of TWD Net Debt Current Portion of Debt + Non-Current Portion of Debt - Cash and Cash Equivalents NPV Net Present Value NRV Net Realisable Value Report This independent expert's report RG 111 Regulatory Guide 111 - Content of Expert Reports Script for Script Basis Rather than a cash offer, TWD have offered AIR Shareholders 1 TWD share for every 5 AIR shares held Statistical Outlier An extremely high or extremely low data point relative to the nearest data point and the rest of the neighbouring co-existing values in a dataset. Surplus Assets Surplus assets are assets that form part of a business entity or company but do not contribute to the earnings or cash flow generation capacity of that business or company. Target Statement Statement of AstiVita under Part 6.5 of the Corporations Act Source: AP Analysis

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1.0 Outline of the Offer

1.1 Introduction and Background

AstiVita entered into a Bid Implementation Agreement with Tamawood Limited under which Tamawood will make an agreed off-market takeover bid for all the issues and outstanding shares in AstiVita on the basis of the issues of 1 share in Tamawood for every 5 shares in AstiVita.

Tamawood is proposing to acquire all of AstiVita’s shares subject to (amongst other things) a strictly nonwaivable minimum acceptance condition so as to ensure that Tamawood acquires 100% of AstiVita.

The AstiVita Board proposes to recommend that AstiVita Shareholders accept the Offer in the absence of superior proposal.

Tamawood and AstiVita have agreed to implement the terms and conditions set out in the Bid Implementation Agreement, dated 16th of March 2022.

Tamawood Limited has proposed to AstiVita Shareholders to acquire their shares on a scrip for scrip basis 5 (five) AstiVita shares for 1 (one) TWD share.

1.2 Key steps and Conditions of the Offer

The Offer, subject to AstiVita’s shareholders approval has the following elements:

• AstiVita shareholders will be offered the basis of the issue of 1 (one) TWD share for every 5 (five) shares currently held in AstiVita;

• At or before the end of the Offer Period, TWD has a Relevant Interest in 90% of the aggregate of the AstiVita Shares on issue (on a fully diluted basis);

• The Offer being subject to (amongst other things) a strictly non-waivable acceptance condition so as to ensure that TWD acquires 100% of AstiVita if the Offer is to be accepted; and

• The shareholders of TWD will consider matters relating to the Offer in an extraordinary general meeting.

1.3 Outcome of the Offer

Should the Shareholders of AstiVita approve the Offer, the merged company of AstiVita and TWD will have a main focus in residential construction services in Australia.

Figure 1: Post- Transaction Corporate Structure

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----- Start of picture text -----

Tamawood
Limited
DixonBuild Pty DixonConstruct Dixon NSW Pty Dixon Systems SolarpowerRex Tamawood Pty
Ltd Pty Ltd Ltd DixonRes Pty Ltd Pty Ltd Pty Ltd SolarRex Pty Ltd Ltd
----- End of picture text -----

Source: TWD Annual Report and Advisory Partner Analysis

Following the Offer, the merged company will have 33,799,313 fully paid ordinary shares on issue. TWD Shareholders will hold 28,826,782 fully paid ordinary shares representing 85% and AstiVita Shareholders will hold 4,972,531 fully paid ordinary shares representing 15%.

Table 3: Post Merger Capital Structure Capital Structure

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		Shares (Pre-Transaction)	Conversion Ratio		Shares Post Transaction Shareholding
	TWD AstiVita	28,826,782 24,862,654 53,689,436	1 5		28,826,782 85% 4,972,531 15%
	Total				33,799,313 100%

Source: AP Analysis

The top 10 shareholders and total issued capital post the merger are detailed below.

Table 4: Post Merger Top 10 Shareholders

	Number of	Percentage
Shareholder Name	Ordinary Shares Held	Held of Issued Ordinary
	(TWD)	Capital
RAINROSE PTY LTD	9,135,161	27.03%
ANKLA PTY LTD	7,400,885	21.90%
MUTUAL TRUST PTY LTD	1,680,457	4.97%
NOWCASTLE PTY LTD	1,333,216	3.94%
SUNSTAR AUSTRALIA PTY LTD	756,009	2.24%
ODALREACH PTY LTD	666,667	1.97%
STODDART BUILDING PRODUCTS PTY LTD	601,723	1.78%
RIPELAND PTY LTD	526,779	1.56%
MR ROBERT PATRICK LYNCH + MS SINEAD JOSEPHINE LYNCH	512,500	1.52%
MR TIMOTHY MARK BARTHOLOMAEUS	460,000	1.36%
MR ANDREW THOMAS + MRS TANIA THOMAS	375,225	1.11%
Top 10 Shareholders	23,448,622	69.38%
Other Shareholders	10,350,691	30.62%
Total Issued Shares	33,799,313	100.00%

Source: AstiVita Shareholder Registry as of 31.08.2021 and TWD Shareholder Registry as of 30.06.2021

The top 10 shareholders, being predominantly existing TWD Shareholders, will hold approximately 69.38% of TWD following the Offer whilst the remaining shareholders will hold parcels of 30.62% of the total shares on issue.

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2.0 Purpose, Scope and Basis of Assessment

2.1 Legislative requirements

Section 640 of the Corporations Law requires an expert opinion to be provided where the bidder is connected with the target company.

Section 640 provides that if:

(a) the bidder’s voting power in the target is 30% or more; or

(b) for a bidder who is, or includes, an individual — the bidder is a director of the target; or

(c) for a bidder who is, or includes, a body corporate — a director of the bidder is a director of target.

A target statement given in accordance with subsection 638 must include, or be accompanied by, a report by an expert that states whether, in the expert’s opinion, the takeover offers are fair and reasonable and gives the reasons for forming that opinion.’

2.2 Purpose of the report

Advisory Partner has been appointed by the Directors to prepare this report to satisfy the request for the preparation of an IER as described above. This report is intended to accompany the target statement to be provided by the Directors to the Shareholders entitled to vote on the Offer (“ Target Statement ”).

This report accompanies the Target Statement, required to be provided to the Shareholders, and has been prepared to assist the Directors in fulfilling their obligation to provide shareholders with full and proper disclosure to enable them to assess the merit of the Offer.

This report should not be used for any other purpose and we do not accept any responsibility for its use outside this purpose. Except in accordance with the stated purpose, no extract, quote or copy of our report, in whole or in part, should be reproduced without our written consent, as to the form and context in which it may appear.

For the purposes of our opinion, the term “fair market value” is defined as the price that would be negotiated in an open and unrestricted market between a knowledgeable, willing, but not anxious purchaser, and a knowledgeable, willing, but not anxious vendor, acting at arm’s length.

2.3 Scope

The scope of the procedures we will undertake in forming our opinion on whether the Offer is in the best interests of the Shareholders will be limited to those procedures we believe are required in order to form our opinion. Our procedures, in the preparation of the report, will not include verification work nor constitute an audit or assurance engagement in accordance with Australian Auditing and Assurance Standards issued by the Australian Auditing and Assurance Standards Board ( “AUS”) or its predecessors. Accordingly, Advisory Partner does not warrant that its inquiries have identified or verified all of the matters which an audit, extensive examination or “due diligence” investigation might disclose.

In preparing this report, we have relied on information provided by various officers of AstiVita. We have not undertaken any verification of the financial or other information provided by those officers, or other parties, as set out in this report. Advisory Partner believes the information provided to be reliable, complete and not misleading and has no reason to believe that any material facts have been withheld. The information provided was evaluated through analysis, inquiry and review for the purpose of forming our opinion. Where Advisory Partner has relied on the views and judgement of management the information was also evaluated through analysis, inquiry and review to the extent practical. However, such information is often not capable of external verification or validation.

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AstiVita has agreed to indemnify Advisory Partner and their partners, directors, employees, officers and agents (as applicable) against any claim, liability, loss or expense, costs or damage, arising out of reliance on any information or documentation provided by AstiVita, which is false and misleading or omits any material particulars, or arising from failure to supply relevant documentation or information.

Advisory Partner is a Corporate Authorised Representative of AP Lloyds Pty Ltd ACN 643 090 359 Australian Financial Services Licence 526061. As a Corporate Authorised Representative of an Australian Financial Services Licence, we are required to provide a Financial Services Guide in situations where we may be taken as providing financial product advice to retail clients. A copy of Advisory Partner Financial Services Guide is set out in the beginning of this Report.

2.4 Basis of evaluation

In forming our opinion as to whether or not the Offer is fair and reasonable for the Shareholders of AstiVita, we have considered the following.

The Corporations Act does not define the expressions “fair” and “reasonable”. However, guidance is provided by the Regulatory Guides issued by ASIC, which establish certain guidelines in respect of independent expert’s reports required under the Corporations Act or commissioned voluntarily. In particular, Regulatory Guide 111 “Content of Expert Reports” ( RG 111 ) has been considered.

RG 111 draws a distinction between “fair” and “reasonable”. An offer is fair if the consideration is equal to or greater than the value of the securities subject to the offer. The comparison must be made assuming 100% ownership of the target company irrespective of the percentage holding of the bidder or its associates in the target company.

RG 111 considers an offer to be “reasonable” if:

• The offer is “fair”; or

• Despite not being “fair”, the expert believes that there are sufficient reasons for security holders to accept the offer in the absence of any higher offer.

RG 111 sets out some of the factors that an expert might consider in assessing the reasonableness of an offer including:

• The bidder’s pre-existing voting power in the target company;

• Other significant security holding blocks in the target;

• The liquidity of the market in the target’s securities;

• Taxation losses, cash flow or other benefits arising through achieving 100% ownership of the target;

• Any special value of the target to the bidder;

• The likely market price if the offer is unsuccessful; and

• The value to an alternative bidder and likelihood of an alternative offer being made.

In our opinion, the Offer will be fair if the value is greater than the market value of the securities in AstiVita Group, inclusive of an appropriate premium for control.

In considering whether the Offer is reasonable, other factors that have been considered include:

• Current financial performance and forecast performance;

• The likelihood of an alternative offer and alternative transactions;

• The likely market price of AstiVita Group shares in the absence of the offer; and

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• Other advantages and disadvantages for AstiVita’s Shareholders of approving the Proposed Transaction.

We have not considered special value in forming our opinion. Special value is the amount which a potential acquirer may be prepared to pay for a business in excess of the fair market value. This premium represents the value to the potential acquirer of potential economies of scale, reduction in competition or other synergies arising from the acquisition of the asset not available to likely purchases generally. Special value is not normally considered in the assessment of fair market value as it relates to the individual circumstances of special purchasers.

2.5 Reliance on Information

This Report is based upon financial and other information provided by AstiVita. Advisory Partner has considered and relied upon this information. Advisory Partner believes the information provided to be reliable, complete and not misleading, and has no reason to believe that any material facts have been withheld. The information provided was evaluated through analysis, inquiry and review for the purpose of forming an opinion as to whether the Offer is fair and reasonable.

AstiVita has agreed to indemnify Advisory Partner, and the directors, partners and employees of Advisory Partner and any related entity against any claim arising out of misstatements or omissions in any material supplied by the AstiVita, its subsidiaries, directors or employees, on which Advisory Partner has relied.

Advisory Partner does not warrant that its inquiries have identified or verified all of the matters which an audit, extensive examination or “due diligence” investigation might disclose. In any event, an opinion as to whether a corporate transaction is fair and reasonable is in the nature of an overall opinion rather than an audit or detailed investigation. Preparation of this Report does not imply that Advisory Partner has audited in any way the financial accounts or other records of the Company.

It is understood that the accounting information provided to Advisory Partner was prepared in accordance with generally accepted accounting principles and except where noted, prepared in a manner consistent with the method of accounting used by the Company, in previous accounting periods.

An important part of the information base used in forming an opinion of the kind expressed in this report are the opinions and judgement of management. This type of information was also evaluated through analysis, inquiry and review to the extent practical. However, such information is often not capable of external verification or validation.

2.6 Current Market Conditions

Our opinion is based on economic, market and other conditions prevailing at the date of this Report. Such conditions can change significantly over relatively short periods of time. Accordingly, changes in those conditions may result in any valuation opinions becoming quickly outdated and in need of revision. Advisory Partner reserves the right to revise any valuation, or other opinion, in the light of material information existing at the date of this Report that subsequently becomes known to Advisory Partner.

2.7 Sources of Information

Appendix A to this Report sets out details of information referred to and relied upon by Advisory Partner during the course of preparing this Report and forming our opinion.

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2.8 Assumptions

In forming our opinion, the following has been assumed:

• All relevant parties have complied, and will continue to comply, with all applicable laws and regulations and existing contracts and there are no alleged or actual material breaches of the same or disputes (including, but not limited to, legal proceedings), other than as publicly disclosed and that there has been no formal or informal indication that any relevant party wishes to terminate or materially renegotiate any aspect of any existing contract, agreement or material understanding, other than as publicly disclosed;

• That matters relating to title and ownership of assets (both tangible and intangible) are in good standing, and will remain so, and that there are no material legal proceedings, or disputes, other than as publicly disclosed;

• Information in relation to the Offer provided to the Shareholders or any statutory authority by the parties as part of the bidder’s statement or the target’s statement is complete, accurate and fairly presented in all material respects;

• If the Offer is accepted, it will be implemented in accordance with the Bid Implementation Agreement and its terms; and

• The legal mechanisms to implement the Offer are correct and effective.

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3.0 Business Environment

In arriving at our valuation opinion, we have considered the outlook for the Australian economy and the relevant industry affecting both AstiVita’s and TWD’s operations.

3.1 Economic Analysis

The Australian economy had established solid momentum prior to the Omicron outbreak at the end of 2021. Domestic economic activity bounced back strongly in the December quarter, driven by a surge in household spending as restrictions relating to the Delta outbreak were eased. The spread of the Omicron variant will slow growth in the March quarter but is expected to have a much smaller impact on economic activity than previous waves of COVID-19; activity is forecast to regain momentum in coming quarters. In the central scenario, GDP is forecast to have grown by 5 per cent over 2021, and to grow by around 4¼ per cent over 2022 and 2 per cent over 2023. The unemployment rate is forecast to decline gradually over the forecast period, to 3¾ per cent by the end of 2023.

Inflation picked up in the second half of 2021, by more than expected at the time of the November Statement , and the outlook for inflation has been revised higher. Consumer price inflation in the December quarter was 1.3 per cent and 3½ per cent over the year, led by increases in the prices of new dwellings, durable goods and fuel.

Underlying inflation has also picked up in recent quarters and is forecast to increase further to 3¼ per cent in mid-2022, largely reflecting upstream cost pressures amid strong demand in housing construction and the durables goods sector. Further out, the drivers of inflation are anticipated to shift, with a steady pick-up in labour costs in response to strong labour market conditions forecast to sustain inflation in the top half of the 2 to 3 per cent target range.

At its recent meetings, the Reserve Bank Board considered the Australian economy's faster-than expected recovery from the 2021 lockdowns, particularly in the labour market. It also observed that inflation has picked up faster than anticipated and is now expected to remain above the middle of the 2 to 3 per cent target range for the next few years. If realised, the staff forecasts imply that the Bank's policy goals would be achieved sooner than previously envisaged.

3.2 Industry Analysis

AstiVita’s and TWD’s largest revenue source is derived from residential housing construction, therefore we have decided to analyse the House Construction industry in Australia for the purpose of this Report.

Australia's strong population growth and record-low residential home loan rates have underpinned demand for housing over the past five years. However, the outbreak of COVID-19 caused a slump in new housing commencements during the first half of 2020 as the economy slipped into recession and population growth eased as net immigration stalled. The introduction of the Federal Government's HomeBuilder scheme and record low interest rates supported dwelling commencements, which boosted investment in single-unit housing and home renovation. This is expected to lift industry revenue by 10.0% in 2021-22, to $72.3 billion. The current upswing in the industry's performance is expected to underpin revenue growth at an annualised 2.3% over the five years through 2021-22.

The COVID-19 pandemic has required industry operators to alter their work practices to contain the virus. This has included limiting the number of workers on construction sites to ensure social distancing and compliance with guidelines for personal protective equipment (PPE) and workplace hygiene. Some builders have encountered disruptions in the supply chain for building materials, equipment and skilled labour due to lockdown restrictions.

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The industry's performance is forecast to deteriorate sharply over the next two years, corresponding with the removal of the HomeBuilder stimulus and in response to the softening of underlying demand due to the weaker population growth. Furthermore, the escalation in house and land prices is likely to favour a return of investment in high-density apartment and townhouse developments and weaker demand for single-unit house construction. Despite the gradual recovery of demand for new housing construction from the deep cyclical trough in 2023-24, industry revenue is forecast to decline at an annualised 2.8% over the five years through 2026-27, to $62.6 billion.

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Key Trends in the Industry

• The HomeBuilder subsidy has positively influenced the industry's short-term performance;

• Historically low home loan interest rates have supported demand for housing;

• Industry profit margins have widened over the past five years on the back of the current surge in home building;

• The removal of the HomeBuilder stimulus is expected to significantly dampen the short-term performance;

• Modest underlying demand for new housing is projected to accompany the overall economic recovery;

• Industry profitability is expected to deteriorate in the face of weaker demand and fierce internal competition; and

• The HomeBuilder scheme and record low interest rates have boosted demand for house construction.

Industry segments and major players

The industry has a low concentration of ownership. The four largest home builders together contribute less than 10% of annual industry revenue. The major players typically operate in multiple locations across several states and many regional markets, although the industry's many small-scale firms that operate in narrow regional markets.

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The vast majority of industry enterprises have a workforce of fewer than 20 people with 59.9% of businesses having no permanent employees and consisting mainly of sole proprietors and partners. Over half the industry enterprises generate annual revenue below $200,000 (52.7%), while just 10.5% of businesses generate more than $2.0 million.

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The annual Housing Industry Association's HIA-Colorbond Steel Housing 100 list includes a survey of housing commencements by major builders. The five largest single unit home builders included Metricon Homes, ABN Group, NXT Building Group (formerly MJH Group), Simonds Group and BGC Housing. The HIA survey shows that the industry's few medium- to large-scale contractors account for a significant share of industry activity. Australia's 100 largest house builders account for about 40% of the national housing market.

Key success factors

• Membership of an industry organisation: Industry operators must be members of umbrella organisations to ensure they are eligible for insurance and industry-based accreditation.

• Access to highly skilled workforce: Industry players that have access to skilled subcontractors or employees are better positioned to complete projects requiring specialist skills.

• Having a high prior success rate (including completed prior contracts): Homebuilders with a proven financial, managerial and technical ability for housing construction are more likely to receive referrals from satisfied clients.

• Ability to expand and curtail operations rapidly in line with market demand: Homebuilders that anticipate changes in market conditions and adjust their operations accordingly can benefit from a competitive advantage in the industry.

• Access to the necessary amount of land/type of property: Larger players typically develop and promote residential subdivisions. Consequently, these firms require access to suitable land for construction and property development activities.

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4.0 TWD Company Profile

4.1 Company overview

The TWD story is one of building on strong foundations. It is a story of leading an age-old industry with a new-age vision. It is a story of consistently reshaping expectations. It is much more than a simple story of providing quality homes for Australians.

TWD commenced operations in July 1989 with four staff, five affiliated builders licensed to build TWD designs, and one sales consultant. The Company sold 80 homes in its first year. In 23 years, TWD has become the first to create architect-inspired and designed homes using a replicable, profitable, deliverable and marketable system. In doing this, the Company transformed an industry.

TWD is a “systems company”, not simply a home building company. In a similar manner to companies like McDonald’s, Flight Centre and Harvey Norman, TWD has entered a seemingly mature, fragmented industry, redefined and enhanced the value provided to customers, and has reconfigured the systems and processes by which that value is delivered efficiently and profitably.

Since listing, the Company’s impressive results internally and on the stock market, even in the 2001 postGST-induced industry slump when the housing market dipped to a 20-year low, are ample evidence that TWD’s strategy of industry reinvention is working.

TWD divides its operations into the following divisions:

• Building & Construction- housing design, project management and contract construction through Dixon Homes;

• Renewable Energy - generating and trading renewable energy certificates covering technologies including solar panels and solar hot water systems; and

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4.2 Key personnel

The Directors and officers of TWD are detailed below:

Table 5: Directors and Officers of TWD

Name & Position	Description
Lev Mizikovsky	Lev founded Tamawood Limited in July 1989		and served as its Managing
Non – Executive Director	Director from April 2003 to February 2010. Mr. Mizikovsky serves as Executive Chairman of AstiVita Limied, Non-Executive Chairman of Advance
	ZincTek Limited, Executive Chairman at		SenterpriSys	Limited. Mr.
	Mizikovsky has been in the building industry for many years.
Robert Lynch	Rob, LREA, Justice of the Peace, has been the Non-Executive Chairman of
Non-Executive Chairman	Tamawood Limited since November 2011 and has been its Non-Executive Director since July 18, 2008. He served as the President of the Housing
	Industry Association. Mr. Lynch has many years of housing construction
	experience and wealth of industry experience.
Geoffrey Acton	Geoff has an in-depth knowledge of the renewable energy sector as head
Joint Company Secretary	of the successful Renewable Energy Certificate trading business established in 2004. He is a Chartered Accountant and has a many year history with
	Tamawood Limited in various capabilities including Director,			Chief Financial
	Officer, Company Secretary and head of Tamawood Renewable Energy
	Certificates trading business, which he established in 2004. He is the CEO of
	Advance ZincTek Limited.
Timothy Bartholomaeus	Tim has been the Managing Director and Director of Tamawood Ltd. since
MD & Director	May 12, 2014 and served as its served as the Chief Operating Officer of Tamawood Ltd since 2010. He has been with the group since 1996
	commencing as a Building Designer, since 2001 he held			a number of
	management positions.
Narelle Lynch	Narelle has been Joint	Company Secretary of SenterpriSys		Limited since
Joint Secretary	November 9, 2018. Ms. Lynch has been a Joint Company Secretary of Advance ZincTek Limited since August 9, 2017, Tamawood Limited since
	May 24, 2013 and AstiVita Limited since May 24, 2013.

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4.3 Ownership and Capital Structure

TWD has six 100% owned subsidiaries as detailed below. TWD also owns 70% in SolarpowerRex Pty Ltd and SolarRex Pty Ltd.

Figure 2: TWD’s Corporate Structure

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----- Start of picture text -----

Tamawood
Limited
100% 100% 100% 100% 100% 70% 70% 100%
DixonBuild Pty DixonConstruct Dixon NSW Pty DixonRes Pty Dixon Systems SolarpowerRex TamawoodL Pty
Ltd Pty Ltd Ltd Ltd Pty Ltd Pty Ltd SolarRex Pty Ltd Ltd
----- End of picture text -----

Source: TWD Annual Report

As at the Offer, TWD had 28,826,782 shares on issue. The top 10 shareholders and total issued ordinary shares of TWD as at the Offer are summarised below.

Table 6: Top 10 Shareholders as at the Offer

	Number of	Percentage Held
Shareholder Name	Ordinary Shares Held	of Issued Ordinary Capital
ANKLA PTY LTD	7,400,885	25.67%
RAINROSE PTY LTD	6,217,030	21.57%
MUTUAL TRUST PTY LTD	1,680,457	5.83%
NOWCASTLE PTY LTD	1,333,216	4.62%
STODDART BUILDING PRODUCTS PTY LTD	557,644	1.93%
RIPELAND PTY LTD	526,779	1.83%
MR ROBERT PATRICK LYNCH + MS SINEAD JOSEPHINE LYNCH	512,500	1.78%
MR TIMOTHY MARK BARTHOLOMAEUS	460,000	1.60%
MR ANDREW THOMAS + MRS TANIA THOMAS	375,225	1.30%
SUNSTAR AUSTRALIA PTY LTD	318,631	1.11%
Top 10 Shareholders	19,382,367	67.24%
Other Shareholders	9,444,415	32.76%
Total Issued Shares	28,826,782	100.00%

Source: TWD Annual Report

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4.4 Share Price Analysis

We have analysed TWD’s daily share close price and volume traded during the period from 1 March 2021 to 1 March 2022.

Figure 3: TWD Share Price Analysis

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----- Start of picture text -----

4.20 250,000
4.00
200,000
D
3.80
B H
A
F G 150,000
3.60
C
E
3.40
100,000
3.20
50,000
3.00
2.80 0
Source: Capital IQ and AP Analysis
Notable events disclosed by TWD’s company announcements during the trading period which may have
TWD-Volume TWD-Share Price (AU$)
impacted TWD’s share price movements and trading volumes are set out below.
Volume
Share Price (A$)
----- End of picture text -----

Table 7: TWD’s recent Company Announcements (Past Year)

Date	Chart Reference	Announcement Details
9th April 2021	A	TWD reiterates the company has invested significant resources into
		mitigating the current foreseeable housing conditions and the total fully
		franked dividend of 27c remains unchanged.
16th July 2021	B	TWD confirms that based on FY21 Unaudited Management Accounts the
		preliminary proposed fully franked dividend will be 13c taking the total to
		24c for FY21.
2nd August 2021	C	Multiple announcements to the market (Dividend Distribution, Chairman's
		Letter, Appendix 4E) reporting FY 21's dividend of 24c and financial
		statements for FY21.
12th August 2021	D	TWD announced the Annual Report to the market.
1st October 2021	E	Notice of Annual General Meeting/Proxy Form.
4th November 2021	F	Chairman's address to shareholders discussing rising costs and FY22
		Outlook.
8th February 2022	G	TWD announced the company's half year results and accounts.
16th February2022	H	TWD announced the resignation of two Non-Executive Directors.

Source: Tamawood ASX Announcements

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Table 8 below outlines TWD’s Free Float (Ordinary Shares Outstanding), average daily turnover and average weekly share volume turnover. The past two years of trading data was used to determine a fair average daily and weekly turnover. Based on this, it would take over 763 weeks for 100% of TWD’s stock to trade. Typically, the large sophisticated and founding shareholders of small-cap companies are not traders of their shares.

Table 8: TWD’s Share Trading Turnover

Company	Ticker	Ordinary Shares Outstanding (m)	Free Float (%)	Free Float (Ordinary Shares Outstanding)	Average Daily Turnover	Average Weekly Turnover	Trading Weeks to turnover 100% of Free Float
Tamawood	TWD	28.8	34.21	9.86	7,812	37,776	763

Source: Capital IQ and AP Analysis

Based on this analysis we have concluded that TWD is a thinly traded share and as a result we have not used the share price as our primary valuation method.

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4.5 Historical Profit and Loss

We detail below the past 3 years Profit and Loss for TWD and the six months to 31 December 2021.

Table 9: TWD’s Historical Profit and Loss

Income Statement (000's)	Actual
	FY19 FY20 FY21 HY22 - DEC
Revenue Sales Other income	102,349 91,451 97,370 52,379 597 750 738 398
Total Revenue Cost of Sales	102,946 92,201 98,108 52,777 85,961 72,227 75,529 43,272
Total Cost of Sales	85,961 72,227 75,529 43,272
Gross Profit Expenses Advertising expenses Contractor/Consulting expenses Employee expenses Occupancy expense Bad Debts All other expenses	16,985 19,974 22,579 9,505 718 393 553 287 778 582 595 290 7,258 7,076 7,844 4,053 877 148 146 92 0 54 0 0 1,423 3,859 2,787 720
Total Expenses	11,054 12,112 11,925 5,442
EBITDA Depreciation and Amortisation Expense EBIT Interest NPBT Income Tax Expense	5,931 7,862 10,654 4,063 245 1,217 1,223 588 5,686 6,645 9,431 3,475 0 241 209 94 5,686 6,404 9,222 3,381 1716 1927 2767 1014
NPAT	3,970 4,477 6,455 2,367
Source: TWD Annual/Half Year Reports

The segmented revenue as detailed in the 30 June 2021 Annual Report is as follows:

Table 10: TWD’s Historical Segmented Revenue

Segmented Revenue (000's)	Actual
	FY19 FY20 FY21 HY22 - DEC
Revenue Construction Contract Revenue Un-Invoiced completed works adjustment Renewable energy certificates Franchise Revenue	95,489 80,711 85,476 51,138 -4,131 2,719 9,885 200 10,350 7,343 1,163 484 641 678 846 557
Total Sales Source: TWD Annual/Half Year Reports	102,349 91,451 97,370 52,379

Construction contract revenue included $85.5m (2020 $80.7m) of revenue for residential construction which are accounted for over time using the input method. All other revenue is recognised at a point.

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4.6 Historical Balance Sheet

We detail below the historical balance sheet for TWD as at 30 June 2019, 2020 and 2021 and 31 December 2021.

Table 11: TWD’s Historical Balance Sheet

Balance Sheet	30-Jun 30-Jun 30-Jun 31-Dec
	2019 2020 2021 2021
ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventory Prepayments Current tax assets	4,309 8,163 3,808 4,557 5,375 16,211 25,950 25,630 8,834 813 707 998 29 105 397 765 86 0 1,511 0
Total Current Assets	18,633 25,292 32,373 31,950 45 26 9 0 831 5,289 4,878 4,446 370 434 714 523 815 815 430 430
Non-Current Assets Intangible assets Property, plant and equipment Non-Current Tax Assets Investments
Total Non-Current Assets Total Assets LIABILITIES Current Liabilities	2,061 6,564 6,031 5,399 20,694 31,856 38,404 37,349 5,446 6,499 7,164 6,208 0 14 0 203 0 808 874 757 577 612 617 699
Trade and other payables
Current tax liabilities
Borrowings: Current
Provisions: Current
Total Current Liabilities Non-Current Liabilities	6,023 7,933 8,655 7,867 2,413 3,223 6,269 6,285 260 293 334 347 0 4,071 3,556 3,309
Deferred tax liabilities
Provisions: Non-Current Borrowings: Non-Current
Total Non-Current Liabilities Total Liabilities Net Assets	2,673 7,587 10,159 9,941 8,696 15,520 18,814 17,808 11,998 16,336 19,590 19,541
Equity Reserves Non-Controlling Interest Share capital Retainedprofits/accumulated losses	-479 -479 -479 -479 148 148 148 148 7,647 7,647 11,426 12,757 4,682 9,020 8,495 7,115
Total Equity	11,998 16,336 19,590 19,541

Source: Tamawood Annual/Half Year Reports and AP Analysis

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5.0 Valuation of TWD

5.1 Valuation of TWD shares

As we have assessed the shares of TWD to be thinly traded, we don’t consider the share price of TWD to be a reliable measure of the value of the company. We have considered other valuation methodologies and consider that Future Maintainable Earnings is the most appropriate value measure of TWD.

5.1.1 Future Maintainable Earnings

Future maintainable earnings (“FME”) is the assessed level of sustainable profits, in real terms, that can be expected to be derived from the existing operations of the business regardless of short-term economic fluctuations and excludes any one-off profits or losses.

We have selected EBITDA as the appropriate measure of earnings. Earnings multiples based on EBITDA are less sensitive to different financing structures, depreciation/amortisation accounting policies and effective tax rates. This allows a better comparison with earnings multiples of other companies.

Our estimate of the future maintainable earnings of TWD is based on an average of the past 3 Years Normalised EBITDA + Annualised FY22 Results. The half year results have been provided to December of FY21, there have been no announcements to the market with regard to profit forecast.

In arriving at FME and to ensure that it is a reasonable proxy for the underlying earnings power of TWD, we have considered the following:

• the historical operational and financial performance of TWD for the period from 30 June 2019 to 31 December 2021;

• the operational and financial performance of TWD compared to its competitors;

• Enquiry levels are in excess of what is needed to maintain TWD’s expected earnings into the foreseeable future;

• Current contract prices are at levels that meet the current rising cost of materials and subcontractors and include provision for further increases;

• adjustment to EBITDA of $0.185 million for the gain on disposal of equipment;

• an adjustment to EBITDA for a lease concession received;

• risk profile of TWD including specific company strengths, risks, opportunities and threats;

• consideration of the EBITDA for the first half of FY2022 of $4.06 million;

• The non-material impact to all building sites that have been able to be inspected affected by the recent flooding event;

• The significant shortages of building materials and labour due to the COVID-19 impact, and other global issues resulting in the delay of construction;

• Extraordinarily high volumes of applications for bank loans have caused significantly slow approvals throughout FY21; and

• The anticipated revenue growth that further expansion of TWD’s operations into regional markets within Queensland and Northern and regional New South Wales will generate.

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5.1.2 Share market trading multiples

We have compiled share market trading multiples for companies comparable to TWD as of 9[th] March 2022. The historical and forecast earnings multiples of these companies are summarised in the following table.

Table 12: Share Market Trading Multiples

Company Name	Market Data	Valuation (LTM)
	Ticker Market Cap ($M)	EV/Sales EV/EBITDA EV/EBIT
ASX Listed - Residential Home Builders
CSR Limited	CSR 2,689.0	1.25x 9.05x 12.78x
Fleetwood Limited	FWD 179.0	0.40x 7.02x 36.14x
Simonds Group Limited	SIO 44.6	0.07x 2.33x 10.86x
ASX Listed - Construction and Engineering
Johns Lyng Group Limited	JLG 2,068.4	3.03x 32.78x 40.10x
MAAS Group Holdings Limited	MGH 1,385.0	4.42x 20.39x 30.80x
SHAPE Australia Corporation Limited	SHA 170.6	0.15x 3.97x 4.47x
SRG Global Limited	SRG 245.2	0.41x 4.47x 8.60x
Tamawood Limited	TWD 94.0	0.90x 10.23x 11.74x
Residential Home Builders
Average		0.57x 6.13x 19.93x
Median		0.40x 7.02x 12.78x
Residential and Construction and Engineering
Average		1.39x 11.43x 20.54x
Median		0.41x 7.02x 12.78x
Source: Capital IQ Pro

General comments regarding the operations of the above companies, are set out in Appendix 3.

Our assessment of comparable companies has produced a range of earnings multiples which can be reduced to an average or median. In order to ascertain the appropriate multiple range to apply to TWD we have undertaken a limited review of the individual characteristics of the companies we consider most comparable to TWD. The multiple of any particular company will reflect its own unique circumstances and attributes.

We make the following observations with respect to the comparable companies:

• CSR Limited (ASX: CSR) , together with its subsidiaries, engages in the manufacture and supply of building products for residential and commercial constructions in Australia and New Zealand. CSR is considerably larger (Market Capitalisation) than TWD and is predominately focused on the supply of building products rather than residential construction;

• Fleetwood Limited (ASX: FWD) engages in the design, manufacture, and sale of modular accommodation units in Australia and New Zealand. FWD holds a similar market capitalisation to TWD and is predominantly focused on multi residential developments;

• Simonds Group Limited (ASX: SIO) , together with its subsidiaries, provides homebuilder and registered training services across the Australian Eastern Seaboard and South Australia. The company designs and constructs residential dwellings; develops and sells residential land; contracts for residential home construction, speculative home building, and the building of display home inventory; and provides registered training courses, payroll and asset services, and intellectual property services. SIO service offering is very similar to TWD’s yet trades at a substantially lower multiple;

• Johns Lyng Group Limited (ASX: JLG) provides integrated building services in Australia and internationally. The company operates through four segments: Insurance Building and Restoration Services, Commercial Building Services, Commercial Construction, and Other;

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• MAAS Group Holdings Limited (ASX: MGH) , together with subsidiaries, provides construction materials, equipment, and services for civil, infrastructure, and mining end markets in Australia and internationally. The company operates through four segments: Civil, Construction, and Hire; Real Estate; Manufacturing; and Construction Materials;

• SHAPE Australia Corporation Limited (ASX: SHA) , together with its subsidiaries, engages in the construction, fit-out, and refurbishment of commercial properties in Australia. It provides fit-out and refurbishment services to hospitality, healthcare, education, and retail sectors, as well as for commercial customers and governments;

• SRG Global Limited (ASX: SRG) provides engineering-led specialist asset, construction, and mining services. It operates through Construction, Asset Services, and Mining Services segments. The Construction segment supplies integrated products and services to customers involved in the construction of infrastructure, including bridges, dams, office towers, high rise apartments, shopping centres, hotels, car parks, recreational buildings, and hospitals.

Whilst there are some key differences between TWD and the identified companies, the analysis provides an indicative range of multiples that may be regarded relevant for the purpose of valuing TWD. We have placed particular emphasis on the trading multiples of Fleetwood Limited in considering the appropriate multiple.

In reaching our conclusion on the appropriate earnings multiple range to apply to TWD, a key component Advisory Partner has considered is TWD’s ability to effectively ensure profitability through stringent margin control.

5.1.3 Earnings Multiple

The appropriate earnings multiple is usually assessed by collecting market evidence with respect to the earnings multiples of companies that are comparable. Such multiples are derived from:

• share market prices of comparable listed companies;

• initial offer prices of shares in comparable companies; and

• prices achieved in mergers and acquisitions of comparable companies.

We have determined that the appropriate earnings multiple to be in the range of 6.5 to 7.5 times EBITDA. In selecting this range we have had regard to:

• share market prices of comparable listed companies;

• prices achieved in mergers and acquisitions of comparable companies; and

• company specific factors relating to TWD.

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Table 13: Share market trading multiples with the removal of JLG

Company Name	Valuation (LTM)
	EV/Sales EV/EBITDA EV/EBIT
ASX Listed - Residential Home Builders
CSR Limited	1.25x 9.05x 12.78x
Fleetwood Limited	0.40x 7.02x 36.14x
Simonds Group Limited	0.07x 2.33x 10.86x
ASX Listed - Construction and Engineering
Johns Lyng Group Limited*	NA NA NA
MAAS Group Holdings Limited	4.42x 20.39x 30.80x
SHAPE Australia Corporation Limited	0.15x 3.97x 4.47x
SRG Global Limited	0.41x 4.47x 8.60x
Tamawood Limited	0.90x 10.23x 11.74x
Residential Home Builders
Average	0.57x 6.13x 19.93x
Median	0.40x 7.02x 12.78x
Residential and Construction and Engineering
Average	1.12x 7.87x 17.28x
Median	0.40x 5.74x 11.82x

*Removed JLG from Combined Average/Median Source: Capital IQ Pro

In arriving at the lower EBITDA Multiple of 6.5x, Advisory Partner thought it most appropriate for the Average EV/EBITDA for ASX Listed Residential Home Builders to be used (6.13x EV/EBITDA). Despite this being a relatively small sample size, it constitutes ASX companies that operate in the same industry TWD is involved in.

In arriving at the higher EBITDA multiple of 7.5x, Advisory Partner deemed it most appropriate for the Average EV/EBITDA for both Residential Home Builders and other companies operating in the Construction and Engineering industry to be used (7.87x EV/EBITDA).

This value excludes the EV/EBITDA multiple of Johns Lyng Group Limited (32.78x) as this trading multiple was significantly singlehandedly impacting the average trading multiple of the data set. Advisory Partner deemed Johns Lyng Group Limited to be a statistical outlier and not directly comparable as the company’s trading multiple was over 2 standard deviations from the mean. In a normally distributed data set, 95% of values fall within two standard deviations of the mean and result in a 95% confidence level.

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5.1.4 Surplus assets

These are assets which, if sold, would not impact on the revenue or profit generating capacity of the entity.

We are of the opinion that there are no surplus assets in Tamawood.

5.1.5 Valuation conclusion

Advisory Partner’s value of TWD derived from the capitalisation of future maintainable earnings is summarised as follows:

Table 14: Normalised EBITDA

Normalised EBITDA	FY 2019 Adjusted	FY 2020 Adjusted	FY 2021 Adjusted	HY 2022 Adjusted
NPBT	5,686	6,404	9,222	3,381
Depreciation & Amortisation	245	1,217	1,223	588
Interest Expense	0	241	209	94
EBITDA	5,931	7,862	10,654	4,063
Add/(Less)
Net Gain on Disposal of Property, plant, equipment and associates	-	-	-185	-
Lease Concession	-	-	-144	-
Normalised EBITDA	5,931	7,862	10,325	4,063
Source: AP Analysis

Based on a review of the adjusted historical Earnings Before Interest Depreciation and Amortization ( “EBITDA” ) of TWD for the past 3 financial years and annualised HY2022 Normalised EBITDA, we consider the most appropriate measure of future maintainable earnings to be based on an average of the last 3 financial years and annualised HY2022 figures for the following reasons:

• The building industry tends to operate in cycles;

• The Industry has benefited from government incentives relating to the COVID Pandemic and those incentives have been wound back; and

• Interest rates are expected to increase over future financial periods.

The basis for this is that they best reflect the current and future earnings capacity of the Company. We have determined the Maintainable EBITDA to be $8.061m.

Table 15: TWD Net Debt Calculation

Net Debt ($000's)
Current Portion of Debt	0
(+) Non-Current Portion of Debt	0
(-) Cash and Cash Equivalents	-4,557
Net Debt	-4,557
Source: Capital IQ Pro

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Table 16: TWD Valuation

Tamawood Limited Valuation	LOW ($000's)	HIGH ($000's)
Maintainable EBITDA	8,061	8,061
EBITDA Multiple	6.5x	7.5x
Enterprise Value on a Minority Basis	52,397	60,458
Add/(Less):
Surplus Assets	0	0
(Net Debt)	-4,557	-4,557
Fair Value of Equity on a Minority Basis	56,954	65,015

Source: AP Analysis

Table 17: TWD Valuation per Share

Tamawood Limited Per Share Valuation	LOW Value	HIGH Value
Fair Value of Equity on a Minority Basis ($000's)	56,954	65,015
FullyPaid OrdinaryShares Outstanding	28,826,782	28,826,782
Equity Value Per Share	$1.98	$2.26

Source: AP Analysis

We have assessed the value of TWD based on the FME method to be in the range of approximately $56.94 million to $65.01 million equating to range of $1.98 to $2.26 per share.

5.1.6 Other Valuation Methods Considered

As a cross check to our primary valuation method of FME we have considered a multiple of revenue. In the table below we have calculated the average revenue for the past 4 years after annualising the 2022 FY.

Table 18: TWD Average Revenue

Revenue (000's)	Actual
	FY19 FY20 FY21 HY22 - DEC
Revenue Total Sales Annualised 2022	102,349 91,451 97,370 52,379 102,349 91,451 97,370 104,758
Average 4years	98,982

Source: Tamawood Annual/Half Year Reports

We have calculated the sector average for the revenue to enterprise value.

Table 19: ASX Residential Home Builders EV/Sales Multiples

Revenue Multiple	Valuation(LTM)
	EV/Sales
ASX Listed - Residential Home Builders
CSR Limited	1.25x
Fleetwood Limited	0.40x
Simonds GroupLimited	0.07x
Tamawood Limited	0.90x
Residential Home Builders
Average	0.57x
Median	0.40x

Source: Capital IQ Pro

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Table 20: TWD Valuation

Tamawood Limited Cross Check Valuation	($000's)
Revenue Average	98,982
Revenue Multiple	0.57x
Enterprise Value on a Minority Basis	56,420
Add/(Less):
Surplus Assets	0
(Net Debt)	-4,557
Fair Value of Equity on a Minority Basis	60,977

Source: AP Analysis

Table 21: TWD Valuation Per Share

Tamawood Limited Per Share Valuation	($000's)
Fair Value of Equity on a Minority Basis ($000's)	60,977
FullyPaid OrdinaryShares Outstanding	28,826,782
Equity Value Per Share	$2.12
Source: AP Analysis

Using the average revenue multiple of 0.57x we have assessed the value of TWD to be $60.97M or $2.12 per share, which we consider supports our primary valuation method.

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6.0 AstiVita Company Profile

6.1 Company overview

AstiVita imports and distributes household and renewable energy products in Australia. The company offers bathroom products and photovoltaic panels. It also provides kitchen products, appliances, basins, hot water solar and photovoltaic inverters, stainless steel sinks, tapware products, and toilet suites.

As part of the Veganics demerger it no longer offers personal care products, as well as sunscreen and oral hygiene products.

6.2 Key personnel

The Directors and officers of AstiVita are detailed below:

Table 22: Directors and Officers of AstiVita

Name & Position	Description
Lev Mizikovsky	Lev founded Tamawood Limited in July 1989 and served as its Managing
Executive Chairman	Director from April 2003 to February 2010. Mr. Mizikovsky serves as Executive Chairman of AstiVita Limied, Non-Executive Chairman of Advance
	ZincTek Limited, Executive Chairman at SenterpriSys		Limited. Mr.
	Mizikovsky has been in the building industry	for many years.
Geoffrey Acton	Geoff has an in-depth knowledge of the renewable energy sector as head
Joint Company Secretary and non-executive Director	of the successful Renewable Energy Certificate trading business established in 2004. He is a Chartered Accountant and has a many year history with Tamawood Limited in various capabilities including Director, Chief Financial
	Officer, Company Secretary and head of Tamawood Renewable Energy
	Certificates trading business, which he established in 2004.		He is a CEO of
	Advance ZinkTek Limited.
Narelle Lynch	Narelle has been Joint Company Secretary	of SenterpriSys Limited since
Joint Company Secretary	November 9, 2018. Ms. Lynch has been a Joint Company Secretary of Advance ZincTek Limited since August 9, 2017, Tamawood Limited since
	May 24, 2013 and AstiVita Limited since May 24, 2013.
Joseph Mizikovsky	Joe has been the Chief Executive Officer at AstiVita Limited		since May 31,
Chief Executive Officer	2019.
Rade Dudurovic	Mr. Rade Dudurovic, B.Com. (Hons), L.L.B. (Hons), C.P.A., is Non-Executive
Non-Executive Director	Director at AstiVita Limited. Mr. Dudurovic is a Non-Executive Director of SenterpriSys Limited and a Non-Executive Director of Advance ZincTek
	Limited. Mr. Dudurovic has many years’ experience in investment banking
	and private equity, including senior executive roles with PREMA Capital,
	Farallon Capital, ANZ Private Equity, PricewaterhouseCoopers Financial
	Advisory and Peregrine Investments Limited.

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6.3 Ownership and Capital Structure

AstiVita has five 100% owned subsidiaries as detailed below.

Figure 4: AstiVita’s Corporate Structure

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----- Start of picture text -----

AstiVita Limited
AstiVita Bathrooms and Indent Manufacturing
Organic Vegan Limited Solar Power Pty Ltd
Kitchens Pty Ltd Pty Ltd
----- End of picture text -----

As at 30 August 2021, AstiVita had 24,862,654 shares on issue. The top 10 shareholders and total issued ordinary shares of AstiVita as at 30 August 2021 are summarised below.

Table 23: Top 10 Shareholders as at 30 August 2021

	Number of	Percentage Held
Shareholder Name	Ordinary Shares Held	of Issued Ordinary Capital
ANKLA PTY LTD	7,400,885	25.67%
RAINROSE PTY LTD	6,217,030	21.57%
MUTUAL TRUST PTY LTD	1,680,457	5.83%
NOWCASTLE PTY LTD	1,333,216	4.62%
STODDART BUILDING PRODUCTS PTY LTD	557,644	1.93%
RIPELAND PTY LTD	526,779	1.83%
MR ROBERT PATRICK LYNCH + MS SINEAD JOSEPHINE LYNCH	512,500	1.78%
MR TIMOTHY MARK BARTHOLOMAEUS	460,000	1.60%
MR ANDREW THOMAS + MRS TANIA THOMAS	375,225	1.30%
SUNSTAR AUSTRALIA PTY LTD	318,631	1.11%
Top 10 Shareholders	19,382,367	67.24%
Other Shareholders	9,444,415	32.76%
Total Issued Shares	28,826,782	100.00%

Source: AstiVita Annual Report

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6.4 SWOT Analysis

Table 24: SWOT Analysis

	Strengths		Weaknesses
•	Long established supplier relationships	•	Sub-scale in a high-volume low margin business
•	Availability of stock at a time of supply chain	•	Reliance on a handful of key staff
	shortages	•	Does not have exclusivity with its suppliers
•	Long-term customer in TWD	•	Significant reliance on one key customer (TWD)
•	Pronto ERP system which manages all operational	•	No marketing or sales staff so limited to nil ability
	and financial aspects of the company		to grow beyond existing customer-base
•	Low overheads – minimal staffing requirements

• Opportunities Threats

• • Expand renewables offering to cater for growing • Continued growth in Bunnings, a competitor with demand for “green” building solutions significant economies of scale, in trade sales

• • Identify niche building products to expand current • Loss of TWD as a major customer kitchen and bathroom range • Current suppliers bypass AIR and either deal

• • TWD sales will increase as supply chain issues are directly with builders or supply alternative resolved, and this will drive revenue growth for AIR wholesalers

• • Vertically integrate with one or more builders to offer • If supply shortages continue, AIR’s ability to a “captive” inhouse sourcing capability source replacement inventory may be • compromised as suppliers favour larger volume customers (i.e. Bunnings, Reece, etc.)

6.5 Share Price Analysis

We have analysed AstiVita’s daily share close price and volume traded during the period from 1 March 2021 to 1 March 2022.

Figure 5: AstiVita Share Price Analysis

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----- Start of picture text -----

200,000
0.95 175,000
C
A 150,000
B
0.85
125,000
G
F
100,000
0.75
E
75,000
50,000
0.65
D
25,000
0.55 0
AIR-Volume AIR-Share Price (AU$)
Volume
Share Price (A$)
----- End of picture text -----

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Source: Capital IQ and AP Analysis

Notable events disclosed by AstiVita’s company announcements during the trading period which may have impacted AstiVita’s share price movements and trading volumes are set out as follows:

Table 25: AstiVita’s Recent Company Announcements

Date	Chart Reference	Announcement Details
23rd April 2021 A AstiVita announced a 1 for 3 non-renounceable entitlement offer of new AIR ordinary shares to raise approximately $4,564,648 (Before costs). 10th May 2021 B The AstiVita board proposed that AIR restructures itself by splitting into two separate corporate entities. 8th June 2021 C AstiVita advised that the recent non-renounceable entitlement offer raised $4,207,174. 31st August 2021 D Annual Report to shareholders 4th November 2021 E Chairman's Address discussing FY21 Milestones and FY22 Goals 5th November 2021 F The Annual General Meeting was held, and shareholders approved the VeganicSKN Limited demerger. 28th February 2022 G AstiVita announced the company's half year results and accounts.

Source: AIR ASX Announcements

Table 26 below outlines AstiVita’s Free Float (Ordinary Shares Outstanding), average daily turnover and average weekly share volume turnover. The past two years of trading data was used to determine a fair average daily and weekly turnover. Based on this, it would take over 1,169 weeks for 100% of AstiVita’s stock to trade. Typically, the large sophisticated and founding shareholders of small-cap companies are not traders of their shares.

Table 26: AstiVita’s Share Trading Turnover

Company	Ticker	Ordinary Shares Outstanding (m)	Free Float (%)	Free Float (Ordinary Shares Outstanding)	Average Daily Turnover	Average Weekly Turnover	Trading Weeks to turnover 100% of Free Float
Astivita	AstiVita	24.9	17.3	4.3	762	3,679	1,169

Source: Capital IQ and AP Analysis

Based on this analysis we have concluded that AstiVita is a thinly traded share and as a result we have not used the share price as our primary valuation method.

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6.6 Historical Profit and Loss

We detail below the past 3 years Profit and Loss for AstiVita and the six months to 31 December 2021.

Table 27: AstiVita’s Historical Profit and Loss

Income Statement (000's)	Actual
	FY19 FY20 FY21 HY22 - DEC
Revenue Sales Other income	4,647 4,325 3,700 2,381 230 133 219 388
Total Revenue Cost of Sales	4,877 4,458 3,919 2,769 3,168 4,831 3,225 2,080
Total Cost of Sales	3,168 4,831 3,225 2,080
Gross Profit Expenses Accounting and legal fees Advertising expenses Director Fees Employee expenses Freight Charges Insurance expense IT & communication expenses Occupancy expense Impairment Expenses All other expenses	1,709 -373 694 689 141 170 232 121 19 75 42 20 49 48 45 37 726 340 196 295 266 163 118 24 110 82 47 19 89 61 49 40 96 5 0 0 0 449 0 0 784 1,015 308 607
Total Expenses	2,280 2,408 1,037 1,163
EBITDA Depreciation and Amortisation Expense EBIT Interest NPBT Income Tax Expense	-571 -2,781 -343 -474 262 227 189 57 -833 -3,008 -532 -531 0 8 10 3 -833 -3,016 -542 -534 -250 4282 -512 2
NPAT	-583 -7,298 -30 -536

Source: AstiVita Annual/Half Year Reports

Table 28: AstiVita’s Historical Segmented Revenue

Segmented Revenue (000's)	Actual
	FY19 FY20 FY21 HY22 - DEC
Revenue Bathroom Products and Kitchen Appliances Solarpower Products and REC's income Personal Care Product Sales on Amazon	2,681 1,693 1,595 758 1,846 1,713 1,875 1,243 120 919 230 380
Total Revenue Source: AstiVita Annual/Half Year Reports	4,647 4,325 3,700 2,381

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6.7 Historical Balance Sheet

We detail below the historical balance sheet for AstiVita as at 30 June 2019, 2020 and 2021 and 31 December 2021.

Table 29: AstiVita’s Historical and Current Balance Sheet

Balance Sheet (000's)	30-Jun 30-Jun 30-Jun 31-Dec
	2019 2020 2021 2021
ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventory Prepayments	73 75 192 388 1,077 551 558 723 3,514 3,613 3,980 5,140 467 1,142 1,512 997
Total Current Assets	5,131 5,381 6,242 7,248 542 193 853 954 54 246 637 799 4,368 0 500 500
Non-Current Assets Intangible assets Property, plant and equipment Non-Current Tax Assets
Total Non-Current Assets Total Assets LIABILITIES Current Liabilities	4,964 439 1,990 2,253 10,095 5,820 8,232 9,501 332 425 329 560 0 147 59 0 181 397 351 220
Trade and other payables
Borrowings: Current
Provisions: Current
Total Current Liabilities Non-Current Liabilities Related party loans	513 969 739 780 369 2,994 1,511 3,266 101 14 2 3 40 19 31 37 0 50 0 0
Deferred tax liabilities
Provisions: Non-Current Borrowings: Non-Current
Total Non-Current Liabilities Total Liabilities Net Assets	510 3,077 1,544 3,306 1,023 4,046 2,283 4,086 9,072 1,774 5,949 5,415
Equity Share capital Retainedprofits/accumulated losses	12,878 12,878 17,083 17,083 -3,806 -11,104 -11,134 -11,668
Total Equity	9,072 1,774 5,949 5,415

Source: AstiVita Annual/Half Year Reports

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6.8 Special Purpose Profit and Loss - VeganicSKN Limited Removed

We detail below the Special Purpose Profit and Loss for AstiVita with the removal of Veganic for the 6-month period ended 31 December 2021.

Table 30: AstiVita Special Purpose Historical Profit and Loss (Excluding Veganic)

Income Statement (000's)	Actual
	HY22 - DEC
Revenue Sales Other income	2,000 379
Total Revenue Cost of Sales	2,379 1,474
Total Cost of Sales	1,474
Gross Profit Expenses Accounting and legal fees Contractor/Consulting expenses Director Fees Employee expenses Freight Charges Insurance expense IT & communication expenses Motor vehicle expense Occupancy expense All other expenses	905 61 9 16 122 12 13 15 4 11 114
Total Expenses	377
EBITDA Depreciation and Amortisation Expense EBIT Interest NPBT Income Tax Expense	528 57 471 3 468 2
NPAT	466

Source: AstiVita Special Purpose Financial Report

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6.9 Current Balance Sheet - VeganicSKN Limited Removed

We detail below the Balance Sheet for AstiVita with the removal of Veganic as at 31 December 2021.

Table 31: AstiVita Special Purpose Current Balance Sheet (Excluding Veganic)

Balance Sheet (000's)	31-Dec
	2021
ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventory Prepayments	343 808 3,199 46 413
Other current assets
Total Current Assets	4,808 63 500
Non-Current Assets Property, plant and equipment Non-Current Tax Assets
Total Non-Current Assets Total Assets LIABILITIES Current Liabilities	563 5,371 580 3 100
Trade and other payables
Taxation liabilities
Provisions: Current
Total Current Liabilities Total Liabilities Net Assets	683 683 4,688
Equity Share capital Consolidation Account Retained Profits Brought Forward Retainedprofits/accumulated losses	17,083 -2,591 -10,270 466
Total Equity	4,688
Source: AstiVita Special Purpose Financial Report

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7.0 Valuation of AstiVita’s Shares

As we have assessed the shares of AstiVita to be thinly traded, we don’t consider the share price of AstiVita to be a reliable measure of the value of the company. We have considered other valuation methodologies and consider that Future Maintainable Earnings, excluding Veganic, is the most appropriate value measure of AstiVita.

7.1 Future Maintainable Earnings

Future maintainable earnings (“FME”) is the assessed level of sustainable profits, in real terms, that can be expected to be derived from the existing operations of the business regardless of short-term economic fluctuations and excludes any one-off profits or losses.

We have selected EBITDA as the appropriate measure of earnings. Earnings multiples based on EBITDA are less sensitive to different financing structures, depreciation/amortisation accounting policies and effective tax rates. This allows a better comparison with earnings multiples of other companies.

Our estimate of the future maintainable earnings of AstiVita based the results to December, half year 2022 adjusted for the demerger of Veganic and then project for a full year.

Table 32: AstiVita’s Normalised EBITDA (Excluding Veganic)

AstiVita Limited Normalised EBITDA (Excluding Veganic)	HY 2022 $000's
NPBT		468
Depreciation & Amortisation		57
Interest Expense		3
EBITDA		528
Annualised EBITDA		1,056

7.1.1 Earnings Multiple

The appropriate earnings multiple is usually assessed by collecting market evidence with respect to the earnings multiples of companies that are comparable. Such multiples are derived from:

• share market prices of comparable listed companies;

• initial offer prices of shares in comparable companies; and

• prices achieved in mergers and acquisitions of comparable companies.

We have determined that the appropriate earnings multiple to be in the range of 6.5 to 7.5 times EBITDA. In selecting this range we have had regard to:

• share market prices of comparable listed companies; and

• prices achieved in mergers and acquisitions of comparable companies.

7.1.2 Surplus assets

Surplus assets are assets that form part of a business entity or company but do not contribute to the earnings or cash flow generation capacity of that business or company. These are assets which, if sold, would not impact on the revenue or profit generating capacity of the entity.

As a result of the demerger of Veganic there are no surplus assets in AstiVita.

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7.1.3 Valuation conclusion

Advisory Partner’s value of AstiVita derived from the capitalisation of future maintainable earnings is summarised as follows:

Table 33: AstiVita Net Debt Calculation

Net Debt ($000's)
Current Portion of Debt	0
(+) Long Term Portion of Debt	0
(-)Cash	-343
Net Debt	-343

Table 34: AstiVita Valuation

AstiVita Limited Valuation	LOW ($000's)	HIGH ($000's)
Maintainable EBITDA Annualised	1,056	1,056
EBITDA Multiple	6.5x	7.5x
Enterprise Value on a Minority Basis	6,864	7,920
Add/(Less):
Surplus Assets
(Net Debt)	-343	-343
Fair Value of Equity on a Minority Basis	7,207	8,263
Control Premium	20%	20%
Fair Value of Equity on a Controlling Basis	8,648	9,916

Source: AP Analysis

Table 35: AstiVita Valuation per Share

AstiVita Limited Per Share Valuation	Low Value	High Value
Fair Value of Equity on a Controlling Basis ($000's)	8,648	9,916
Fully Paid Ordinary Shares Outstanding	24,862,654	24,862,654
Equity Value Per Share	$0.35	$0.40

Source: AP Analysis

We have assessed the value of AstiVita based on the FME method to be in the range of $0.35 to $0.40 per share.

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7.2 Share Valuation Cross Check

We have cross checked the fair market value of AstiVita based on a net asset valuation of AstiVita.

Valuation of net assets on a going concern basis involves:

• Separating the assets and liabilities; and

• Ascribing a fair value to each asset and liability.

In undertaking the valuation of AstiVita we have had regard to:

• The financial position of AstiVita as at 31 December 2021;

• Any assets not included as part of the Offer;

• Any adjustments required to the net asset value of AstiVita;

• The value of any assets or liabilities not fully reflected in the Company’s balance sheet; and

• The applicability of a premium for control.

The recorded book value may not be the most appropriate value to be ascribed to an asset or liability. Accordingly, we have restated the balance sheet of AstiVita as at 31 December 2021 to reflect fair market value and to include any off balance sheet assets and liabilities.

Given that Veganic (Personal Care Business) will not be a part of the proposed transaction, adjustments to AstiVita’s Balance Sheet must be made to determine a fair Net Tangible Asset Value for valuation purposes. Below, Table 36 depicts the adjustments Advisory Partner have ascribed to each asset or liability.

Table 36: AstiVita’s Balance Sheet Adjusted for Veganic Demerger

Balance Sheet (000's)	Balance as at 31 December 2021
	Book Value Fair Market Value Fair Market Value
	LOW HIGH
ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventory Prepayments Other Current Assets	343 343 343 808 808 808 3,199 3,199 3,199 46 46 46 413 413 413
Total Current Assets	4,808 4,808 4,808 63 63 63 500 500 1,557
Non-Current Assets Property, plant and equipment Non-Current Tax Assets
Total Non-Current Assets Total Assets LIABILITIES Current Liabilities	563 563 1,620 5,371 5,371 6,428 580 580 580 3 3 3 100 100 100
Trade and other payables
Taxation Liabilities
Provisions: Current
Total Current Liabilities Total Liabilities Net Assets	683 683 683 683 683 683 4,688 4,688 5,745

Source: AstiVita Special Purpose Financial Report, AP Analysis

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In arriving at the market value of the net assets, we have considered the following:

• Cash: the nature of cash is such that cash is regarded as fairly stated in the accounts and reflects current market value;

• Property, plant and equipment: the book value of the plant and equipment approximates their fair market value.

• Trade creditors, provisions and other creditors: the book value of the liabilities approximates their fair market value.

• The lower value for Non-Current Tax Assets has been ascribed as the book value whilst $1.557 million has been ascribed to the high value. This was calculated by taking the Australian Corporate Tax Rate of 25%, multiplying it by the unused tax losses balance as at 30[th] June 2020 ($4.228m) and adding the book value of the Tax Losses ($500,000) to the total.

Consideration has been given as to whether all assets and liabilities of the business of AstiVita are included in the balance sheet and we have concluded that all other assets and liabilities have been included.

7.3 Premium for Control

When valuing a controlling interest, an appropriate allowance should be made for the premium for control, given the strategic benefit that a controlling interest would provide. Empirical evidence on premiums for control indicates that these premiums tend to range between 15% and 40%. A net realisable asset valuation methodology is on a controlling basis so in this circumstance we have determined that no control premium is required.

7.4 Valuation Cross Check Conclusion

Advisory Partner’s cross check of the value of AstiVita derived from the net asset realisation is summarised as follows:

Table 37: Summary of Valuation

	Fair Market Value Fair Market Value
AstiVita Limited Per Share Valuation
	(Low) ($ High)
Equity Value of AstiVita (Adjusted Net Assets - $000's) FullyPaid OrdinaryShares Outstanding	$4,688 $5,745 24,862,654 24,862,654
Equity Value Per Share of AstiVita on a Control Basis	$0.189 $0.231
Source: AP Analysis

We have assessed the value of AstiVita based on the net realisable value ( NRV ) method in the range of $0.189 and $0.231 per share.

We believe that this supports our primary valuation of $0.35 and $0.40 per share.

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8.0 Assessment of Fairness

In forming our opinion in relation to the fairness of the Offer, we have valued each component of the proposal being the fair market value of a AstiVita share and the fair market value of the TWD consideration.

Table 1: Fair Value

Fair Value	Unit	Low Value	High Value
Fair Market Value of an AIR share on a controlling basis	$	0.348	0.399
Consolidation ratio(5 AstiVita Shares for 1 TWD share)		5.0	5.0
Fair Market Value of an AstiVita share (Post Consolidation)	$	1.739	1.994
Fair Value of TWD Share	$	1.976	2.255
Premium /(Discount)		13.6%	13.1%

Source: AP Analysis

Advisory Partner assessed the fair market value of 5 AstiVita shares, on a control basis, is between $1.739 and $1.994 per share. By comparison, the assessed value of the consideration provided for under the Offer is between $1.976 and $2.255 per share. As demonstrated above, the value of the consideration being offered is higher than the value of an AstiVita share and as a result, the Offer is considered fair and in the Best Interests of AstiVita Shareholders.

We note that we have valued the AIR shares on a controlling basis, which allows for a 20% control premium, and the Offer represents a premium above the control premium of more than 13%.

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9.0 Qualifications, Declarations, and Consents

9.1 Qualifications

Advisory Partner provides corporate advisory services in relation to mergers and acquisitions, capital raisings, corporate restructuring and financial matters generally. One of its activities is the preparation of company and business valuations and the provision of independent advice and expert's reports in connection with mergers and acquisitions, takeovers and schemes of arrangements. Advisory Partner’s Director has prepared a number of public expert's reports.

The principal person responsible for preparing this Report on behalf of Advisory Partner is Brett Plant, BBus, MCom, FCA, he is a Director of Advisory Partner. Mr Plant has been actively involved in the preparation of this report. Mr Plant has in excess of 20 years experience in the commerce and the accountancy profession and has been involved in specialist corporate advisory services including company valuations, business sales, due diligence investigations, independent experts’ reports as well as other corporate investigations for more than 10 years. Mr Plant has the appropriate experience and professional qualifications to provide the advice offered.

9.2 Declarations

It is not intended that this Report should be used or relied upon for any purpose other than as an expression of Advisory Partner’s opinion as to whether the Offer is fair and reasonable and in the best interests of the Shareholders of AstiVita as a whole. Advisory Partner expressly denies any liability to any Shareholder who relies or purports to rely on this Report for any other purpose and to any other party who relies or purports to rely on this Report for any purpose.

This Report has been prepared by Advisory Partner with care and diligence and the statements and opinions given by Advisory Partner in this Report are given in good faith and in the belief on reasonable grounds that such statements and opinions are correct and not misleading. However, no responsibility is accepted by Advisory Partner or any of its directors, officers or employees for errors or omissions however arising in the preparation of this Report, provided that this shall not absolve Advisory Partner from liability arising from an opinion expressed recklessly or in bad faith (unless the law otherwise requires).

9.3 Independence

Advisory Partner is entitled to receive a fee of $20,000 to $22,000 (exclusive of GST) for the preparation of this Report. Advisory Partner is also entitled to be reimbursed for any out-of-pocket expenses incurred in the preparation of this Report. Except for this fee and the reimbursement of these expenses, Advisory Partner has not received and will not receive any pecuniary or other benefit, whether direct or indirect, in connection with the preparation of this Report.

Neither the signatory to this Report nor Advisory Partner holds securities in AstiVita Limited or Tamawood Limited. No such securities have been held at any time over the last two years.

Neither the signatories to this Report nor Advisory Partner have had within the past two years any business relationship material to an assessment of Advisory Partner’s impartiality with in AstiVita Limited or Tamawood Limited, or its associates.

Prior to accepting this engagement, Advisory Partner considered its independence with respect to AstiVita Limited and Tamawood Limited and any of its respective associates with reference to ASIC Regulatory Guide 112 entitled “Independence of Experts". In Advisory Partner’s opinion, it is independent of in AstiVita Limited and Tamawood Limited and its associates.

A draft of this Report was provided to AstiVita and its advisors for confirmation of the factual accuracy of its contents. No significant changes were made to this Report as a result of this review and there was no alteration to the methodology, evaluation or opinions set out in this Report as a result of issuing the draft.

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9.4 Indemnity

Under the terms of our engagement, AstiVita has agreed that no claim shall be made by AstiVita or any of its subsidiaries against Advisory Partner, any of their directors, officers, partners, employees or agents (Indemnified Persons) to recover any loss or damage which AstiVita or any of its subsidiaries may suffer by reason of or arising out of anything done or omitted in relation to the provision of the services by Advisory Partner, provided that such loss or damage does not arise from the negligence or willful default of any of the Indemnified Persons. AstiVita has unconditionally indemnified Advisory Partner and their respective officers, employees and agents against any losses, claims, damages, liabilities, costs, expenses and outgoings whatsoever (Losses) which they may suffer or incur directly or indirectly arising out of:

• Advisory Partner relying on information provided by AstiVita or any of its employees, agents or advisers; or

• AstiVita failing to provide Advisory Partner with material information in relation to the Proposed Transaction.

Further, AstiVita must pay and must indemnify Advisory Partner against any Losses in relation to any investigations, enquiries or legal proceedings by ASIC or any other competent regulatory body arising out of, or in connection with, the Proposed Transaction, including reasonable legal expenses and disbursements incurred by Advisory Partner and fees payable to Advisory Partner attributable to time reasonably spent by its staff assessed at its hourly rates to the extent that investigation, enquiry or legal proceeding is not caused by an act or omission of the Indemnified Persons.

9.5 Consents

Advisory Partner consents to the issuing of this Report in the form and context in which it is to be included in the Notice of Meeting and Explanatory Memorandum to be sent to the Shareholders. Neither the whole nor any part of this Report nor any reference thereto may be included in, or attached to, any other document without the prior written consent of Advisory Partner as to the form and context in which it appears.

Advisory Partner takes no responsibility for the content of the Notice of Meeting and Explanatory Memorandum or any other documents provided to the Shareholders, other than this Report.

9.6 Other

The opinion of Advisory Partner is made at the date of this Report and reflects circumstances and conditions as at that date. In particular, Advisory Partner provides no representations or warranties in relation to the future value of shares of AstiVita.

Shareholders who are in any doubt as to the action they should take should consult their own independent professional advisers.

Advisory Partner has prepared a Financial Services Guide as required by the Act. The Financial Services Guide is set out at the beginning of this Report.

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Appendix 1: Sources of Information

In preparing this report we have had access to and relied upon the following principal sources of information:

• audited annual reports of AstiVita and TWD for the years ended 30 June 2019 to 30 June 2021;

• half year audited report of AstiVita and TWD for the year ended 31 December 2021;

• half year report of AstiVita and VeganicSKN Limited split-up for the year ended 31 December 2021;

• details of AstiVita’s shareholders and share register as at 31 August 2021;

• details of TWD’s shareholders and share register as at 30 June 2021;

• historical trading volumes and prices of AstiVita’s and TWD’s ordinary shares traded on the Australian Stock Exchange (“ASX”) ;

• various ASX announcements;

• meeting with management and management working papers in relation to the transaction;

• IBIS World report E3011 on the House Construction in Australia from February 2022;

• IBIS World Company Profile of Tamawood Limited from 30 June 2021;

• Statement on Monetary Policy, Reserve Bank of Australia, February 2022;

• S&P Capital IQ; and

• other publicly available information on AstiVita and TWD.

In addition to the above, Advisory Partner has had various discussions with the management, officers and advisers of AstiVita regarding the nature of the AstiVita businesses, their operations, financial position and prospects.

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Appendix 2: Valuation Methods

In conducting our assessment of the fair market value of the Company, the following commonly used business valuation methods have been considered:

Discounted Cash Flow Method

The discounted cash flow (“DCF”) method is based on the premise that the value of a business or any asset is represented by the present value of its future cash flows. It requires two essential elements:

• the forecast of future cash flows of the business asset for a number of years (usually five to 10 years); and

• the discount rate that reflects the riskiness of those cash flows used to discount the forecast cash flows back to net present value (“NPV”) .

DCF is appropriate where:

• the businesses’ earnings are capable of being forecast for a reasonable period (preferably five to 10 years) with reasonable accuracy;

• earnings or cash flows are expected to fluctuate significantly from year to year;

• the business or asset has a finite life;

• the business is in a 'start up' or in early stages of development;

• the business has irregular capital expenditure requirements;

• the business involves infrastructure projects with major capital expenditure requirements; or

• the business is currently making losses but is expected to recover.

Capitalisation of Future Maintainable Earnings Method

This method involves the capitalisation of estimated future maintainable earnings by an appropriate multiple. Maintainable earnings are the assessed sustainable profits that can be derived by the vendor’s business and excludes any one off profits or losses. An appropriate earnings multiple is assessed by reference to market evidence as to the earnings multiples of comparable companies.

This method is suitable for the valuation of businesses with indefinite trading lives and where earnings are relatively stable or a reliable trend in earnings is evident.

Net Realisable Value of Assets

Asset based valuations involve the determination of the fair market value of a business based on the net realisable value of the assets used in the business.

Valuation of net realisable assets involves:

• separating the business or entity into components which can be readily sold, such as individual business units or collection of individual items of plant and equipment and other net assets; and

• ascribing a value to each based on the net amount that could be obtained for this asset if sold.

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The net realisable value of the assets can be determined on the basis of:

• orderly realisation : this method estimates fair market value by determining the net assets of the underlying business including an allowance for the reasonable costs of carrying out the sale of assets, taxation charges and the time value of money assuming the business is wound up in an orderly manner. This is not a valuation on the basis of a forced sale where the assets might be sold at values materially different from their fair market value;

• liquidation : this is a valuation on the basis of a forced sale where the assets might be sold at values materially different from their fair market value; or

• going concern : the net assets on a going concern basis estimates the market value of the net assets but does not take into account any realisation costs. This method is often considered appropriate for the valuation of an investment or property holding company. Adjustments may need to be made to the book value of assets and liabilities to reflect their going concern value.

The net realisable value of a trading company’s assets will generally provide the lowest possible value for the business. The difference between the value of the company’s identifiable net assets (including identifiable intangibles) and the value obtained by capitalising earnings is attributable to goodwill.

The net realisable value of assets is relevant where a company is making sustained losses or profits but at a level less than the required rate of return, where it is close to liquidation, where it is a holding company, or where all its assets are liquid. It is also relevant to businesses which are being segmented and divested and to value assets that are surplus to the core operating business. The net realisable assets methodology is also used as a check for the value derived using other methods.

These approaches ignore the possibility that the company’s value could exceed the realisable value of its assets.

Share Market Trading History

The application of the price that a company’s shares trade on the ASX is an appropriate basis for valuation where:

• the shares trade in an efficient market place where ‘willing’ buyers and sellers readily trade the company’s shares; and

• the market for the company’s shares is active and liquid.

Constant Growth Dividend Discount Model

The dividend discount model works best for:

• firms with stable growth rates;

• firms which pay out dividends that are high and approximate free cash flow to equity;

• firms with stable leverage; and

• firms where there are significant or unusual limitations to the rights of shareholders.

Special Value

Special value is the amount which a potential acquirer may be prepared to pay for a business in excess of the fair market value. This premium represents the value to the potential acquirer of potential economies of scale, reduction in competition or other synergies arising from the acquisition of the asset not available to likely purchases generally. Special value is not normally considered in the assessment of fair market value as it relates to the individual circumstances of special purchases.

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Appendix 3: Description of Comparable Companies

Company	Description
CSR Limited	CSR Limited, together with its subsidiaries, engages in the manufacture and supply of building
	products for residential and commercial constructions in Australia and New Zealand. CSR
	Limited was founded in 1855 and is headquartered in North Ryde, Australia.
Fleetwood Limited	Fleetwood Limited engages in the design, manufacture, and sale of modular accommodation
	units in Australia and New Zealand. Fleetwood Limited was founded in 1964 and is based in
	Subiaco, Australia.
Simmonds Group	Simonds Group Limited, together with its subsidiaries, provides homebuilder and registered
Limited	training services in Australia. Simonds Group Limited was founded in 1949 and is based in
	Melbourne, Australia.
John Lyng Group	Johns Lyng Group Limited provides integrated building services in Australia and internationally.
Limited	The company was founded in 1953 and is headquartered in Doncaster, Australia.
MAAS Group	MAAS Group Holdings Limited, together with subsidiaries, provides construction materials,
Holdings Limited	equipment, and services for civil, infrastructure, and mining end markets in Australia and
	internationally. MAAS Group Holdings Limited was founded in 2002 and is headquartered in
	Dubbo, Australia.
Shape Australia	SHAPE Australia Corporation Limited, together with its subsidiaries, engages in the
Corporation	construction, fit-out, and refurbishment of commercial properties in Australia. It provides fit-
Limited	out and refurbishment services to hospitality, healthcare, education, and retail sectors, as well
	as for commercial customers and governments. The company was founded in 1989 and is based
	in Sydney, Australia.
SRG Global Limited	SRG Global Limited provides engineering-led specialist asset, construction, and mining services.
	SRG Global Limited was founded in 1961 and is headquartered in Subiaco, Australia.

Source: Capital IQ Pro

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