NEWSLETTERNumber 2 May 2013

Te Arawa Group Holdings Ltd’s (“TAGH”) Board and management are pleased to present TAGH’s latest newsletter, giving our shareholders an update of what the company is currently doing.

The poor performance of the global economy and NZ’s economic prospects continues to have a substantial impact domestically. The dry conditions that have recently affected the country’s agricultural sector only adds to a predicted tough year ahead. The cost of the drought is now headed toward $NZ2bn and government have not ruled out that it could jolt our vulnerable economy back into recession. However, the Christchurch rebuild estimated at $NZ40bn (over a number of years) looks like a reasonably positive outlook for the economy.

Meanwhile, TAGH will continue to remain focused in its commitment “to create wealth and opportunity for the inter-generational benefit of our shareholders”. Our focus on forming strategic relationships with like-minded commercial organisations will enable TAGH to be part of opportunities that may have been out of

our reach; due to capital restraints, expertise or lack of exposure to an opportunity.

We thought it timely to reintroduce our independent directors to our shareholders so they are assured that the company has highly competent, professional and experienced Board members in Dr Andrew West, Wally Stone and Fred Cookson. They complement our Te Pumautanga o Te Arawa Trustee representatives, myself and Eru George.

The 2013 financial result looks like another good year for the company. Waiotapu Thermal Wonderland has exceeded our expectations and we are pleased with the results. Our auditors, KPMG, have commenced their independent financial review of the company and we are on track to receive a clear audit opinion.

The CEO vacancy is currently the Board’s priority and a reputable HR organisation will be engaged to oversee a robust recruitment process. The Board and Management team continue to forge ahead to ensure the strategic direction and stability of TAGH is maintained.

AN UPDATE FROM THE CHAIR - Wallace Haumaha

Tarawera - Te Maunga Tapu

Investing in future generations through:

GEOTHERMAL | FORESTRY | AGRIBUSINESS | PROPERTY | TOURISM

TAGH website will be updated on a quarterly basis. We invite you all to visit our website at www.tagh.co.nz

Our Vision

Leading economic advancement in

Te Arawa

Dr. Andrew West BSc (Hons), PhD, PGDipBA

Dr Andrew West was appointed to the TAGH Board in July 2010 as an independent director. Dr West is Vice-Chancellor of Lincoln University, New Zealand’s specialist land-based university and was previously Chief Executive of AgResearch Ltd, Geological and Nuclear Sciences Ltd, the Executive Chairman of the Tertiary Education Commission and the Chief Executive of the New Zealand Qualifications Authority.

Dr West is an expert in the reform and operation of government scientific systems and tertiary education systems. In his career he has helped lead the creation of policy agencies, funding agencies, regulatory agencies, limited liability research companies and tertiary education funding systems.

Dr West is the Chair of Te Arawa Geothermal Ltd (subsidary of TAGH). Geothermal energy is a key priority investment for TAGH and with Dr West’s leadership and drive this sector has the potential to make a significant contribution to TAGH’s long term investment horizons.

Wally StoneWally Stone was appointed to the TAGH Board as an independent director in July 2010. Wally comes with a sound reputation as a professional business leader demonstrating a high level of performance in the areas of corporate governance, strategic planning, tactical implementation and innovation.

Wally’s track record speaks for itself. He was instrumental in the establishment of the award-winning business Whale Watch Kaikoura Ltd. He was their founding director before becoming the Chief Executive, and is now chairman of the company. Whale Watch Kaikoura is recognised as an integral component of the reinvention of Kaikoura as a tourism destination. Wally brings significant knowledge of the Tourism industry to the company.

Wally is a professional director and has a comprehensive understanding of iwi-owned commercial companies (formerly Chair of Ngai Tahu Holdings Corporation), and continues to serve on governance boards both as an advisor and governor.

Fred Cookson, BCom CA

Ngati Uenukukopako, Ngati Kahungunu ki Te Wairoa

Fred Cookson is a founding director of TAGH and was part of Te Pumautanga o Te Arawa Trust settlement team which negotiated the settlement with the Crown of Te Arawa’s long-standing grievances.

Fred is a qualified Chartered Accountant with 20 years’ public practice experience and is the senior partner in the firm Cookson Forbes & Associates in Opotiki. Fred holds a Bachelor of Commerce degree and is a member of the New Zealand Institute of Chartered Accountants and NZ Institute of Directors.

Fred works primarily within the Waiariki & Tairawhiti Districts alongside many iwi organisations that actively own and manage primary sector-based assets predominately in the farming, forestry and horticulture industries. Already Fred has brought synergies to the company through his relationships within the agribusiness sector.

Fred is well respected within the Maori business community for his financial and analytical strengths. He has institutional knowledge of the settlement history and the aspirations of the company’s shareholders.

Fred is the Chair of TAGH’s Audit & Risk Committee and serves as a director on a number of Boards including; Aotearoa Fisheries Ltd, Tawaroa Farm Management Ltd, Ahuwhenua Management Ltd and Hiwinui Kiwifruit Ltd.

INDEPENDENT DIRECTOR PROFILES

Whakapoungakau

The purchase of Waiotapu Thermal Wonderland saw TAGH enter the tourism industry in November 2012. Waiotapu Thermal Wonderland is one of Rotorua’s premier attractions located in the heart of the Te Arawa rohe. It is home to the world-famous Champagne Pool, Lady Knox Geyser and colourful and diverse Volcanic Craters.

Waiotapu Thermal Wonderland was a family-owned business from 1982 to 2012, and had been managed by Alex and Cheryl Leinhardt for over 10 years. TAGH has been fortunate to retain Alex and Cheryl as the Management team of the business, and appreciate their wealth of knowledge and in-depth tourism experience. The business has continued to exceed expectations under TAGH’s leadership and Alex and Cheryl’s management.

Waiotapu Thermal Wonderland enjoyed a busy summer period following the acquisition, with visitor numbers exceeding expectations. Despite the nearby bush fire in early March 2013, operations have proceeded as usual and visitor numbers continue to beat predictions. April marked the

beginning of the slower period for the business, allowing management and staff to begin maintenance and preparations for the next busy period.

TAGH management maintain an active role in the management of the business, through frequent communication with the General Managers, financial monitoring & reporting, and supervision of operations. This has resulted in a seamless ownership transition and continued smooth business operations. The extensive tourism knowledge held by TAGH’s directors only adds value to the business and opens up probable future opportunities.

Dave Harvey has worked at Waiotapu Thermal Wonderland for the past 18 months and simply “loves his job”. He appreciates the stability of employment and relishes the interesting and stimulating range of duties this opportunity provides. The different cultures and people that walk through the gates of Waiotapu Thermal Wonderland make the place a vibrant, exciting and enriching experience that “makes you look forward to coming to work every day”.

WAIOTAPU THERMAL WONDERLAND

Guide Dave Harvey (Ngati Porou, Ngati Kahungunu), General Managers

Alex and Cheryl Leinhardt, alongside the Champagne Pool.

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Waiotapu Thermal Wonderland: Forecasted vs. Actual Visitor Numbers November 2012 - March 2013

Actual visitors Forecasted visitors

Visit our website at www.waiotapu.co.nz and facebook.com/WaiotapuThermalWonderland

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November2012 December

2012 January 2013 February2013 March 2013

Waiotapu Thermal Wonderland: Forecasted vs. Actual Visitor Numbers November 2012 - March 2013

Actual visitors Forecasted visitors

Waiotapu Thermal Wonderland:Forecasted vs. Actual Visitor Numbers November 2012 - March 2013

TE ARAWA HOUSE

TE ARAWA WAKA | TE ARAWA IWI | TE ARAWA WANANGA

Investing in future generations through:

GEOTHERMAL | FORESTRY | AGRIBUSINESS | PROPERTY | TOURISM

TAGH’s property investment portfolio has expanded with the purchase of 1256 Arawa St, Rotorua. This site formed half of the property on which the historic Arawa House stood from 1889 to 1986. Arawa House was a significant site in Rotorua, having been occupied at various times as a private residence, parsonage, hotel, and staff quarters for Queen Elizabeth hospital. The oak tree on the property is over 120 years old and is said to have descended from the first oak tree brought to New Zealand. The land Arawa House stood on was subdivided in 1991, with the southern half becoming 1256 Arawa Street. From 1991 to 2011, 1256 Arawa Street was occupied by Rotorua law firm, East Brewster.

The building is to become TAGH’s new premises and will be named Te Arawa House. Well-known local builder, Ray Holmes, is undertaking the building’s much-needed face lift. Liston and Hort Rewi (father and son) are Ray’s right hand men and with this team’s efficient, professional, get the job done approach, Te Arawa House will be ready by early July.

Builder Ray Holmes (Ngati Pikiao, Ngati Whakaue) alongside Liston and Hort Rewi

(Ngati Rangiwewehi, Ngati Manawa) at Te Arawa House.

RELATIONSHIP-BUILDINGTAGH has a strategic focus on forming relationships with prominent New Zealand and international organisations. These organisations are experts in their sectors, and building relationships with key executives allows TAGH to utilize their skills and knowledge. They hold values which align closely with those of TAGH, making intergenerational partnerships sustainable and productive. A key outcome of these relationships is the exploration of collaborative commercial and social opportunities. One such organisation is Mitsui & Co., Ltd.

Vision: Aim to become a global business enabler that can meet the needs of our customers throughout the world.

Mitsui & Co. are one of Japan’s most prominent general trading companies (sogo shosha), with over 40,000 employees worldwide. General trading companies are a business entity unique to Japan. They operate over a diverse range of sectors (including finance, marketing, retail and trade) and are vertically integrated at many levels of the economy.

Mitsui & Co. conducts business in a wide variety of industries on the international stage, including energy, mineral & metal resources, financial markets and infrastructure projects. TAGH has been developing a strong relationship with Mitsui & Co. (New Zealand, Australia & Singapore) since 2011.

TAGH executed its first Kawenata with Mitsui & Co. in March 2013. A Kawenata is a relationship agreement which binds two groups and solidifies their relationship. While they are not legal binding documents, a Kawenata is not entered into lightly. They form the foundation for enduring relationships between entities. TAGH’s Kawenata is written in both Maori and English, and Mitsui & Co. have provided the Japanese translation.

TAGH and Mitsui & Co. are committed to investigating future commercial opportunities that are mutually beneficial and adhere to the shared values and principles of the Kawenata.