Manager's update regarding Third Quarter 2014

Terra Partners Asset Management Limited

Portomaso Tower 8/5A

Portomaso Ave

St. Julian's Malta STJ4011

Telephone +356-2371-7000

Regulated by Malta Financial Services Authority, Reg No. C56353

November 4, 2014

Investment Manager's Update to Shareholders regarding

Third Quarter 2014 Activities of Terra Capital plc. ("TCA")

The opinions expressed in this update represent the views of the Investment Manager (Terra Partners Asset Management or "Terra") at the time of its preparation. All reasonable precautions have been taken to ensure the accuracy of the information utilized and relied upon in preparing this update and which are provided herein, and Terra believes this information to be reliable; however no representation or warranty as to the accuracy of the information contained in this report is made or is to be implied. The information reported herein does not represent all of the information Terra had available, or which it relied upon, when making its initial and continuing investment decisions and therefore this update will necessarily be incomplete and/or condensed. Terra reserves the right to amend this report and its opinions at any time. Please note that investments in Emerging and Frontier markets usually suffer from liquidity problems, and are often affected by governmental interference in the free market, local politics and vagaries in commodity prices; therefore, their prices can be very volatile. This means that it can be difficult to acquire and subsequently sell the shares noted in this, and prior, updates. This report is for information purposes only, and is not intended as an offer or solicitation with respect to the purchase or sale of any security or investment vehicle. All offers or solicitations are on the public market of the AIM Section of the London Stock Exchange and occur solely by reference to the information contained in the document titled "Tender Offer to Purchase Ordinary Shares at the Tender Price and Restructuring and Amendment to the Directors' Incentive Plan and Change of name to Terra Capital PLC and Notice of Extraordinary General Meeting" (the "Circular") accessible on the Fund's website www.terracapitalplc.com in the "Investor Center" tab under the Documents and Announcements section of the file "AIM Rule 26". This website contains important information which may supplement, modify or differ from the information contained herein and no prospective investment decision should be considered before careful reading of the documentation found on the Fund's website. All current and prospective investors should be aware that PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

TCA's 3rd Quarter Return & Portfolio

The Fund's NAV declined slightly to 1.0018 at September 30, 2014 from 1.009 as of June 30, 2014, resulting in a net return of -0.72% for the quarter. This brings the Fund's year-to-date net return to 8.40% and its 12-month return to 12.10%.

Due to realizations and limited re-investments, the Fund's equity exposure decreased from 77.47% at June 30 to 73.24% at September 30.

Europe

The Fund's exposure to Europe declined from 21.83% to 19.14% as the Fund had net sales in the region and the performance of the Fund's holdings in the region was overall negative. Europe slipped to the second largest regional exposure in the Fund as its remaining holding in Societe de la Tour Eiffel (France) was liquidated and the Fund continued to reduce its holdings in Grivalia (Greece, formerly Eurobank Properties). The Fund made additions to 2 positions-Kernel (Ukraine) and KMB Belgrade (Serbia)-and initiated a new position, which we are not currently identifying due to efforts to continue acquiring shares in this small, relative illiquid security.

Asia

This region became the Fund's largest exposure despite the Fund reducing its allocation to Asia from 21.42% to 20.24%, The Fund reduced exposure to five positions: Ardent Leisure (Australia), Daelim Preferred (Korea) [subsequently totally liquidated], Kumho Preferred (Korea), Hyundai Preferred (Korea) and Hung Vuong (Vietnam). There were no new positions or additions to current positions during the quarter.

Middle East

The Fund's exposure to the Middle East rose to 14.28% as the allocation to SEEF Properties (Bahrain) was increased and the Fund initiated a position in Doha Bank (Qatar). The Fund completed its liquidation of Masraf al Rayan (Qatar) during the quarter.

Africa

The African allocation declined from 8.74% to 7.04 % as the Fund significantly reduced its holdings in Housing Finance (Kenya),while making a small increase to its position in Tunisie Leasing (Tunisia).

Americas

The Americas declined to 12.57% from 13.20% based on performance as there were no changes in the Fund's holdings in the region (note: the Terra Argentine Fund made its second capital call during the quarter but the total extent of the commitment is already reflected in allocations).

Purchases

The Fund initiated two new positions within the Fund and added to four current positions (please refer to accompanying table on following page).

Sales

Terra liquidated two positions and reduced holdings in seven more current holdings. The Fund liquidated its position in Societe de la Tour Eiffel at the takeover price and completed its liquidation of Masraf al Rayan which had begun in the prior quarter on valuation concerns.

Portfolio of Terra Capital PLC as of Sept. 30, 2014

Respectfully Submitted by: 

Terra Partners Asset Management Limited

Portomaso Tower Suite 8/5A,

St. Julian's Malta STJ4011

Regulated by Malta Financial Services Authority, Reg No. C56353

Contact: Galileo Fund Services Limited (Administrator)

Ian Dungate or Suzanne Jones

+44 1624 692600

Panmure Gordon (Nominated adviser and corporate broker)

Paul Fincham or Jonathan Becher

+44 20 7886 2500

Terra Capital plc. Howard Golden or Filip Montfort +356-2371-7000