Thank you for requesting this Product Disclosure Statement from Funds
Focus.
Fee Reduction
As highlighted within our offers page, whilst most agribusiness schemes typically
pay an initial commission of up to 8%. Applications lodged through Wealth Focus
will receive a rebate of up to 8.5% in the form of a cheque once your application has
been processed.
How to Apply
Please have a read through the PDS and if you would like to invest the
application pages can generally be found towards the back of the document.
You will only need to send the application section back with a cheque payable
direct to the investment company (not ourselves). You should take note of any
minimum investment amounts that may apply.
Then mail the completed application directly to us.
We will then check to ensure your form is completed correctly before
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Wealth Focus Pty Ltd
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Regards
Sulieman Ravell
Managing Director
Wealth Focus Pty Ltd
ABN 87 123 556 730
56 The Corso, Manly, NSW 2095
Postal Address: Reply Paid 760, Manly, NSW 1655
09
Willmott Forests Premium Forestry Blend Project
2009 Product Disclosure Statement
ARSN 131 549 589
Directory
Responsible Entity
Willmott Forests Limited
ABN 17 063 263 650
Taxation Advisors to the Responsible Entity
KPMG
151 Pirie Street
Adelaide, South Australia 5000
Australian Financial Services Licence
Licence No: 233215
Solicitors to the Responsible Entity
Registered Office
Mallesons Stephen Jaques
Level 50, 600 Bourke Street
Melbourne, Victoria 3000
249 Park Street (Locked Bag 4011)
South Melbourne, Victoria 3205
Telephone (03) 9696 1355
Facsimile (03) 9696 5567
Freecall 1800 801 866
Project Auditor and Auditor
of the Responsible Entity
www.willmottforests.com.au
enquiries@willmottforests.com.au
Armstrong Partners
Chartered Accountants
Level 5, 150 Albert Road
South Melbourne, Victoria 3205
Directors of the Responsible Entity
Compliance Committee
James William Antony Higgins LLB, LLM, FCPA
Marcus Derham FAICD, FAIM
Jonathan David Madgwick BBus, ACA
Hugh Thomas Davies BA, LLB
Hugh Thomas Davies BA, LLB
Betty Warner-Lehman
Peter Leonard Wickenden FCPA
Independent Experts
S. David Pitt
Moore Stephens
Level 14, 607 Bourke Street
Melbourne, Victoria 3000
IndustryEdge Pty Ltd
1 Terminus Row
Hobart, Tasmania 7000
Compliance Plan Auditor
Forsci Pty Ltd
124 Rowe Street
Eastwood, New South Wales 2122
URS Australia Pty Ltd
Level 6, 1 Southbank Boulevard
Southbank, Victoria 3006
This Product Disclosure Statement (“PDS”) is dated 20 August
2008. Willmott Forests Limited (“Willmott Forests”, “Company”,
“we”, “us”, “our” or “Responsible Entity”), is the Responsible
Entity of the Willmott Forests Premium Forestry Blend Project
ARSN 131 549 589 (“Project”), and the issuer of this PDS.
our website at www.willmottforests.com.au or by contacting us
on the above number. A paper copy of any updated information
is available free on request. We will notify Growers of any
significant events that affect the information contained in
this PDS or changes that are materially adverse to Growers.
The Project is not intended to be a short term investment
and is subject to the normal risks associated with commercial
plantation forestry. The Responsible Entity does not guarantee
any particular return to Growers or that any particular expenditure
will be tax deductible. A copy of this PDS can be obtained from or
inspected at Willmott Forests (refer Directory above).
An investment in the Project is not a deposit with or other liabilities
of Commonwealth Bank of Australia (“CBA”) ABN 48 123 123 124
(AFSL No. 234945) or of any CBA Group company, and is subject
to investment risk including possible delays in repayment and loss
of income or principal invested. Neither CBA nor any other CBA
Group company guarantees the performance of the Project, the
repayment of capital from the Project or any particular rate of
return. CBA has not caused or authorised the issue of this PDS
and, to the extent permitted by law, expressly disclaims and
takes no responsibility for any part of this PDS other than as
detailed in section 15.10.7 of the Further Information section
on page 71 of this PDS.
The PDS is available electronically from our website
(www.willmottforests.com.au).
The offer to which this PDS relates is only available to persons
receiving the PDS (electronically or otherwise) in Australia.
This PDS has not been prepared having regard to the investment
objectives, financial situation or specific needs of a particular
person. Growers should seek professional advice before making
an investment decision.
Information relating to the Project and Woodlots that is not
materially adverse to Growers may change from time to time.
This information may be updated and made available to you on
Defined words and expressions used in this PDS are explained
in the Glossary of Terms set out on page 73. Unless otherwise
specified, photographs used in this PDS are for illustration only
and should not be interpreted to mean that any person shown
endorses the Project or the success of Willmott Forests or
that Willmott Forests or any other person referred to directly
or indirectly in the PDS owns, uses or has any rights in relation
to any item shown.
Contents
1.0
1.1
1.2
1.3
1.4
1.5
1.6
Investment Summary
The Offer
Application prices and fees
Term
Returns
Risks
Payment options
02
02
02
02
02
03
03
2.0
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
Key Features
Multiple distributions
Diversification of risk by species
Diversification of risk by geography
Diversification of risk by pooling
Sale of Radiata pine as standing timber
Radiata pine guarantee facility
Are additional costs payable by Growers?
Stocking Guarantee
ATO Product Ruling
Forestry Right (Property rights)
Carbon sequestration
04
04
04
04
04
04
05
05
05
05
05
05
3.0
3.1
3.2
3.3
3.4
3.5
07
07
09
11
12
12
3.6
3.7
3.8
3.9
A Unique New Generation Forestry Project
Timber species – She-oak
Timber species – Radiata pine
Timber species – Silky Oak
Overview of the Premium Forestry Blend
Potential multiple income streams from
different forest products
Guaranteed sale of Radiata pine
Market for forestry plantations
Quality silvicultural and project management
Sustainable energy and carbon sequestration
4.0
4.1
4.2
4.3
Our Regions
Location of plantations
Softwood plantation regions
She-oak and Silky Oak plantation regions
16
16
16
17
5.0
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
Risks
Fire
Pests and diseases
Hailstorms
Windstorms
Frost
Snow
Drought
Price
Currency movements
The Responsible Entity’s risk
Carbon Credits
18
18
18
18
18
18
18
18
19
19
19
19
12
12
13
15
6.0
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
Company Overview
Introduction
Corporate activities
Timber processing
Quality system
Environmental management
Advanced technology
Regional development
Outlook
20
20
20
20
20
20
21
21
21
7.0
The Board
22
8.0
8.1
8.2
8.3
Company Governance
The Board
Risk management
Ethical standards
23
23
23
23
9.0
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
Frequently Asked Questions
The Responsible Entity
The Project
Tax deductibility
Land
Land security
Professional forest management
Insurance
Reporting
25
25
25
26
26
27
27
30
30
10.0
10.1
10.2
10.3
31
31
31
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
Fees and Costs
Consumer advisory warning
Fees and other costs
She-oak Amount, Pine Amount and
Silky Oak Amount
Carbon Credit fee
Expenses
Brokerage/commissions
Insurance administration fee
Insurance
Payment Default fee
Loan Establishment fee
Stamp Duty Administration fee
Monthly Loan Service fee
Early Repayment fee
Early Repayment Administration fee
Taxation
Changes to fees
Removal of the Responsible Entity
Example of annual fees and costs
11.0
Independent Industry Report
35
12.0
Independent Forestry Report
40
13.0
Independent Market Report
49
14.0
Independent Taxation Report
56
15.0
15.1
15.2
15.3
61
61
64
15.8
15.9
15.10
15.11
15.12
15.13
Further Information
Constitution
Other information
Disclosure of interests, fees, payments
and benefits
Summary of financial statements
Summary Land Tenure Agreement
Summary of Land Sourcing and
Forestry Management Agreement
Summary of 12 Month Interest Free
Loan Agreement
Summary of Origination Deed
Privacy
Consents
Cooling off
Anti-money laundering
Collection of Tax File Number
16.0
Glossary of Terms
73
15.4
15.5
15.6
15.7
17.0 Application Forms
Anti-money Laundering Questions and Answers
Form 1 – 2009 Application
Form 2 – 12 Month Interest Free Loan Application
Form 3 – Method of Payment:
Cash or 12 Month Interest Free Loan
Form 4(a) – CBA Loan Application
Form 4(b) – CBA Direct Debit Requests
Form 4(c) – CBA Loan Application: Guarantor
CBA Loan Agreement
32
32
32
32
32
32
32
32
33
33
33
33
33
33
33
65
65
66
67
69
70
71
71
71
72
72
77
78
81
85
89
91
99
101
107
Willmott Forests – Premium Forestry Blend Project 2009 PDS
01
1.0 Investment Summary
1.1 The Offer
The Willmott Forests Premium Forestry Blend Project is an
opportunity to invest in a unique mix of She-oak, Radiata pine,
and Silky Oak plantations which are designed to diversify risk
by species, end-use, maturity profile and geography, with the
purpose of enhancing Grower returns and reducing risk. The
Responsible Entity will plant, manage and harvest a number
of plantation forests located across south eastern Australia,
northern New South Wales and Queensland (“Plantations”).
The location of the Plantations will be determined by climate
and species.
Growers are issued Woodlots (through executing the Land
Tenure Agreements) and appoint the Responsible Entity to
conduct all necessary plantation forestry activities on their
behalf (through executing a Land Sourcing and Forestry
Management Agreement). Each Woodlot permits the Grower
to conduct plantation forestry activities on specific areas of
land on which a minimum number of seedlings of the relevant
species will be planted. Woodlots issued to Growers who
invest in the Project during a particular financial year form part
of the Pool referable to that financial year and Growers whose
Woodlots are referable to that Pool share in the proceeds on
a pro-rata basis from the sale of timber planted in respect of
that Pool.
A Woodlot is equivalent to approximately 5,200 square metres
(0.52 of a hectare) of land. This area is further allocated to the
three species within the Project as follows:
• She-oak: approximately 300m2
• Radiata pine: approximately 3,500m2
of the Pool and, if applicable, the proceeds received by
Growers from any insurance claim in respect of the She-oak,
Radiata pine and Silky Oak planted in respect of the Pool.
Growers are also required to pay a portion of costs of the
insurance policy (if any) arranged by the Responsible Entity
(refer to section 9.7 on page 30 and section 10.8 on page 32).
The Responsible Entity is also entitled to 50% of the net
proceeds from any dealing in Carbon Credits (refer to section
15.1.16 on page 64 for further information).
1.3 Term
A Grower’s investment is expected to have a term of 16 years.
It is anticipated that:
• the She-oak plantations in respect of a Pool will be
harvested in Years 3, 5, 7 and 9;
• the Radiata pine plantations in respect of a Pool will be
thinned at Year 13, and sold as standing timber between
the commencement and end of Year 15 (subject to some
exceptions); and
• the Silky Oak plantations in respect of a Pool will be
thinned at Year 10, and harvested in Year 15.
1.4 Returns
The Project has been designed to produce multiple income
streams by combining three different species, in different
regions and for different end markets. Investment returns
in respect of She-oak, Radiata pine and Silky Oak will vary
with movements in the volume, quality and price of the end
products sold.
• Silky Oak: approximately 1,400m2
Please note that the area allocated to each species is an
approximation. The actual area will depend on the nature
of the parcel of land being planted.
1.2 Application price and fees
The application price of each Woodlot is $5,000 (“Application
Price”). The Application price does not include an allowance
for GST as GST is not expected to be payable in respect
of the Application Price. The Application Price is fully tax
deductible in accordance with Product Ruling PR 2008/60.
The Responsible Entity will charge a fee for each Pool equal
to 10% of the aggregate of the She-oak Amount, Radiata
pine Amount and the Silky Oak Amount for the relevant Pool
for maintenance, land rental and marketing. In general terms,
the She-oak Amount, Radiata pine Amount and Silky Oak
Amount for a Pool is the net proceeds from the sale of the
She-oak, Radiata pine and Silky Oak planted in respect
02
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Year of Income
Distribution
Species
End Products
She-oak
Biomass to produce
renewable energy
Radiata pine
Structural timber, newsprint, pulp
13, 15
Silky Oak
Veneer, high value decorative timbers
10, 15
3, 5, 7, 9
The year of income distribution in the above table is anticipated
and may vary depending on a number of factors including
growth rates, the actual time of planting and market conditions.
Please refer to Glossary of Terms on page 73 for the definition
of “Year”.
It should be noted that the She-oak trees will not be harvested
within four years after the end of the financial year in which
the Grower is issued Woodlots. For Growers entering into
the Project on or before 30 June 2009, the She-oak trees
will not be harvested prior to 1 July 2013.
A unique, new generation, forestry project
with multiple income streams and diversified
end markets.
1.5 Risks
Participation in the Project is subject to a number of risks.
Key risks are outlined in section 5 on page 18.
* A minimum investment of 7 Woodlots is required for 10 and 12 year
loan options.
1.6 Payment options
The CBA will provide approved Growers with a finance facility for 100%
of the Application Price, plus any applicable GST.
There are two types of payment options:
Cash: payment on application; or
Finance:
• 12 Month Interest Free Loan Agreement with Willmott
Finance Pty Ltd for 100% of the Application Price plus any
applicable GST. Repayments are due on the last business
day in Victoria of each month commencing in July of the
financial year following the financial year of the investment;
or
Loans will be available both at fixed and variable interest rates plus margin.
A fixed interest rate will only be available to loans for 2 Woodlots or more.
The interest rate for fixed interest rate loans will be set for the period of the
loan on 30 June in the financial year of investment. For further details refer to
CBA Loan Agreement on page 107. The CBA may in its absolute discretion
offer individual loan terms to Growers that differ from the above. However, the
terms of these individual loans will not be materially different to those set out
in Product Ruling PR 2008/60 issued by the ATO.
• Principal and Interest Loan Agreement with Commonwealth
Bank of Australia (all with 3 year interest only option available):
- 3 years, 5 years, 7 years, 10 years* and 12 years*.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
03
2.0 Key Features
2.1 Multiple distributions
2.3 Diversification of risk by geography
The Project features multiple distributions to Growers. These
distributions are anticipated to occur in each of Years 3, 5, 7,
9, 10, 13 and 15.
The Responsible Entity will establish and manage a
number of Plantations across one or more of New South
Wales, Victoria and Queensland on behalf of Growers.
The geographical diversification helps to reduce the risk
from natural disasters, fire, pests and any adverse climatic
events which may affect a particular area.
Refer to the Glossary of Terms on page 73 for the definition
of “Year”.
2.2 Diversification of risk by species
Three plantation forestry species, each with distinct cashflow
profiles and characteristics, will be planted in respect of each
Woodlot. The blend of the three species is set out below
and is designed to diversify risk and enhance returns and
cashflow to Growers:
(a) She-oak – minimum of 686 seedlings per Woodlot
A fast growing native species. The timber is anticipated
to be harvested in Years 3, 5, 7 and 9 and the biomass
is used to produce renewable energy.
It should be noted that the She-oak trees will not be
harvested within four years after the end of the financial
year in which the Grower is issued Woodlots. For Growers
entering into the Project on or before 30 June 2009, the
She-oak trees will not be harvested prior to 1 July 2013.
(b) Radiata pine – minimum of 383 seedlings per Woodlot
A high value, lower risk plantation species used mostly for
building applications in Australia and a wide range of pulp
and paper products. Because Radiata pine has a 25 year
maturity profile (that is, it is ‘long-rotation’ timber), the
Responsible Entity will enter into an agreement to sell
the standing timber during Year 15 (or such other period
in accordance with the Constitution).
(c) Silky Oak – minimum of 224 seedlings per Woodlot
A native hardwood prized for high value veneer and
decorative timber uses that is anticipated to be harvested
in Year 15.
Radiata Pine
04
Willmott Forests – Premium Forestry Blend Project 2009 PDS
For full details on the regions please refer to section 4 on
page 16.
2.4 Diversification of risk by pooling
The net proceeds from the sale of all She-oak, Radiata pine
and Silky Oak timber from the Plantations, in respect of a
Pool, will be pooled and distributed by the Responsible Entity
to Growers whose Woodlots are referable to that Pool.
Pooling of the net proceeds reduces the risk that the
performance of a Grower’s specific trees is below the
performance of other trees planted in respect of the
relevant Pool.
2.5 Sale of Radiata pine as standing timber
Although a component of the Project is high value,
‘long-rotation’ Radiata pine, the Responsible Entity has
structured the Project so that the term of a Grower’s investment
is comparable to most forestry projects available to investors
in the Australian market.
The Responsible Entity will enter into an agreement to sell the
semi-mature standing timber from the Radiata pine plantations
in respect of each Pool during Year 15 (an alternative period
may apply in accordance with the Constitution) by undertaking
a comprehensive tender process.
2.6 Radiata pine guarantee facility
If the Responsible Entity is unable to sell the standing Radiata
pine in respect of a Pool at a price equal to at least 90% of
the independent valuation of the standing timber determined
by or verified by an independent valuer, the Responsible
Entity will either:
• “top-up” from its own resources, the proceeds of a
third party sale until they equal 90% of the independent
valuation; or
• purchase the standing Radiata pine at a price equal to at
least 90% of the independent valuation.
2.7 Are additional costs payable by Growers?
Other than the fees summarised in section 10 on page 31,
there are no ongoing fees payable by Growers.
The Responsible Entity will meet insurance costs for a further
period of five years, after expiry of the Stocking Guarantee.
Growers will need to pay a pro-rata portion of the insurance
costs in respect of the relevant Pool’s She-oak, Radiata pine
and Silky Oak trees until all such trees in respect of the Pool
are sold.
2.8 Stocking Guarantee
The Responsible Entity provides the Grower with a Stocking
Guarantee from the date a Grower is registered as a holder
of the Woodlot in respect of that Pool for a period of two
years. If more than 15% of the initial She-oak, Radiata pine
or Silky Oak seedlings (as applicable) are materially damaged
within this period, the Responsible Entity will replant the
affected areas so that the number of seedlings following
replanting is at least 85% of the number of seedlings initially
planted in respect of a Pool.
2.9 ATO Product Ruling
The Australian Taxation Office has issued Product Ruling
PR 2008/60 (“Product Ruling”) in respect of the Project,
which confirms the income tax treatment of a Grower’s
investment. The Application Price of $5,000 per Woodlot,
plus any applicable GST, is fully tax deductible in accordance
with PR 2008/60.
Silky Oak
The Product Ruling is not a guarantee or endorsement of the
commercial reliability of, or the reasonableness or commerciality
of any fees charged in connection with, the Project. The
Product Ruling is only binding if the Project is implemented
in the manner provided in the Product Ruling.
2.10 Forestry Right (Property rights)
The Responsible Entity will secure all the necessary and
appropriate rights to conduct plantation forestry activities
on the land upon which the Plantations are established for
the benefit of Growers in the Project.
The Responsible Entity will grant a Forestry Right to Willmott
Forests Investment Management Limited (WFIM), which WFIM
will hold on trust for Growers. The Forestry Right gives WFIM,
as trustee for the Growers:
• the ability to enter the relevant land and establish, maintain
and harvest one or more crops of trees on the land; and
• an entitlement to the Carbon Credits in respect of the Trees.
In addition, under the Forestry Right, WFIM will hold the Trees
on the relevant land for Growers.
The Forestry Right protects Growers if a third party acquires
the land the subject of the Grower’s Land Tenure Agreement
or if a third party sought to enforce rights in respect of this land.
2.11 Carbon sequestration
Plantation forestry is recognised as a method of removing
atmospheric carbon pollution for the purposes of a Carbon
Pollution Reduction Scheme (also referred to as the
Emissions Trading Scheme)
The solid wood sector is an energy user and a potential
producer of renewable energy from residues. Sawn timber
stores carbon while in use and has a significantly lower global
warming potential than competing building materials such
as concrete and steel. Plantation expansion is contributing
to Australia’s performance against its Kyoto target and there
is potential for increased plantation activity as a result of
appropriate government policy and market responses to
climate change.
She-oak
Willmott Forests – Premium Forestry Blend Project 2009 PDS
05
environment
Due to its high calorific characteristics, the
She-oak biomass is expected to be used
to produce renewable energy.
06
Willmott Forests – Premium Forestry Blend Project 2009 PDS
3.0 A Unique New Generation Forestry Project
3.1 Timber species – She-oak
She-oak is a native Australian hardwood species. It is a
fast growing native species that is anticipated to return four
harvests over a nine year period. It is a robust nitrogen fixing
plant that possesses excellent site tolerance.
Although not a species that is widely adopted for commercial
plantation in Australia, She-oak is planted in a number of
overseas countries specifically as a fuel wood species. In its
native environment She-oak grows in a number of locations
and is considered a hardy species.
For a She-oak plantation, the primary considerations
for site selection are, that the land is relatively flat and that
the average annual rainfall is over 750mm per annum.
The areas selected by the Responsible Entity for planting
of She-oak are located on the New South Wales north coast
and in southern Queensland. This area is conducive to the
vigorous growth of She-oak plantations as the species occurs
naturally in the area and performs well even in drier soils.
It is anticipated that the She-oak biomass will be harvested
and used to produce renewable energy. The biomass is
carbon neutral when used as an alternative fuel or energy
source to replace traditional fossil fuels, particularly in
the generation of electricity. This effectively reduces the
greenhouse gas emissions of the electricity generator.
There are a number of species of She-oak. The Responsible
Entity will select the species which it reasonably considers
to be the most appropriate species for the location in which
the relevant She-oak plantation will be established.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
07
growth
Willmott Forests remains Australia’s largest
developer of softwood plantations and the
past 12 months have seen the Company
branch out into new and exciting areas
within the forest industry.
08
Willmott Forests – Premium Forestry Blend Project 2009 PDS
3.0 A Unique New Generation Forestry Project
3.2 Timber species – Radiata pine
The areas selected by the Responsible Entity for growing
Radiata pine include all of the major plantation growing
regions in New South Wales and Victoria. All of the areas
selected receive average annual rainfall in excess of 650mm
per annum and have suitable soils, climate, and infrastructure.
With a large presence in the Bombala and Tumut-Tumbarumba
region and ongoing plantation development in Victoria, Willmott
Forests is continuously improving its economies of scale.
The softwood timber industry in Australia is well run, world
scale and internationally competitive. Markets for use of
softwood timber are readily accessible and diverse, including
newsprint, fibreboard, medium density fibreboard (MDF), solid
wood products and building materials. In addition, the market
for standing timber continues to develop rapidly in Australia
with significant interest in standing timber from both domestic
institutional investors and specialist investors from the USA
and New Zealand.
continued
Demand growth is expected to be driven by increasing
industrial demand, the continuing shift from hardwood to
softwood for building products, the development of new
lightweight building products based on softwood, and
new export markets.
The major softwood processing operations include:
• Carter Holt Harvey sawmills in Morwell, Myrtleford and
Mount Gambier;
• Weyerhaeuser sawmills in Tumut and Mount Gambier;
• Hyne & Son sawmill in Tumbarumba;
• Auspine sawmills in Mount Gambier region;
• Visy Pulp & Paper pulpmill in Tumut;
• Carter Holt Harvey MDF and particleboard in Tumut,
Oberon and Mount Gambier;
• Paperlinx pulpmill in Morwell;
• Norske Skog pulpmill in Albury;
• Alpine MDF in Wangaratta;
South eastern Australia has over 250,000 hectares of
softwood plantations and has a great capacity for the supply
of Radiata pine softwood. It has a variety of processors with
strong demand for timber products. Annual production of
Radiata pine sawlogs and pulpwood is more than 3.5 million
tonnes per annum from New South Wales and Victorian
plantations.
• Monsbent particleboard mill in Benalla;
• Export sawlog and pulpwood operations in Eden,
Geelong and Portland; and
• Willmott Timbers – sawmill located in Bombala.
Domestic softwood growing and processing
industries are integral to the future building
of Australia.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
09
plantation
Silky Oak, a native species to Australia produces
high value hardwood sawlog and is used in
panelling, furniture, joinery and veneers.
10
Willmott Forests – Premium Forestry Blend Project 2009 PDS
3.0 A Unique New Generation Forestry Project
3.3 Timber species – Silky Oak
This species grows naturally in the dry upper reaches of the
coastal rivers of northern New South Wales and southern
Queensland.
It is a hardy and vigorous species which grows under a wide
range of conditions.
The site selection criteria for Silky Oak are:
• average annual minimum rainfall of over 950mm per
annum; and
• well drained alluvial soils.
The Lismore area of New South Wales demonstrates these
characteristics and has been selected by the Responsible
Entity as the proposed planting area for Silky Oak plantations.
Silky Oak is prized for its high quality, light coloured timber
which is used in paneling, furniture, joinery and veneers.
At present the majority of hardwood timbers used in these
activities is either wood harvested from native forests or
imported tropical hardwoods.
continued
Both these resources are under significant pressure which
has resulted in rapidly rising prices and falling supply over
the past four years.
In addition, as the New South Wales government has
reduced access for logging in many of the state forests in the
area, plantation grown hardwoods are becoming ever more
valuable sources of supply to the hardwood processing
industry in this region.
The mid-north coast of New South Wales, its hinterland
and southern Queensland is host to a vibrant hardwood
processing industry of more than 400,000 tonnes per annum.
Although the majority of processors in this area are small
scale processors compared to the mills in Tumut and
Tumbarumba, the specialty products they produce do
not require the same economic scale.
In addition the number of different processors provides
options for marketing the Silky Oak plantation produce.
The Silky Oak to be planted under the Project is anticipated
to become a valuable resource for the hardwood processors
on the New South Wales north coast and the Queensland
south coast.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
11
3.0 A Unique New Generation Forestry Project
3.4 Overview of the Premium Forestry Blend
An investment in the Project offers Growers the opportunity
to participate in the plantation forestry industry through
well-managed commercial plantations located in south
eastern Australia, northern New South Wales and
Queensland. The investment has five key features:
1. Potential multiple income streams from different forest
products.
2. Guaranteed sale of the standing Radiata pine plantations.
3. Participation in the benefits of long-rotation timber plantations.
4. The experience of a major plantation forestry operator.
5. Sustainable energy and carbon sequestration.
3.5 Potential multiple income streams from different
forest products
Year of Income
Distribution
Species
End Products
She-oak
Biomass to produce
renewable energy
Radiata pine
Structural timber, newsprint, pulp
13, 15
Silky Oak
Veneer, high value decorative timbers
10, 15
3, 5, 7, 9
continued
The Responsible Entity anticipates that a buyer will be found
at an attractive price not only because of the proposed location
and scale of the Radiata pine plantations but because of the
expected interest of institutional investors in mid-rotation
plantation forestry assets.
The guaranteed sale facility provided by the Responsible
Entity is designed to ensure that the sale of the Radiata pine
plantations is at a price that is close to their assessed
market value. If the sale of the standing Radiata pine of a Pool
cannot be achieved at a price at least equal to 90% of the
independently assessed or verified market value of that timber,
the Responsible Entity will either ‘top-up’ from its own
resources the sale proceeds from a third party sale until
they equal 90% of the assessed value of the timber, or
it will purchase the standing timber for at least 90% of
the assessed value of the timber.
Growers whose Woodlots are referable to the Pool can by a
resolution passed by a 75% majority, approve an alternative
period for the sale of the Radiata pine. The Responsible
Entity is permitted to take a longer period to enter into an
agreement to sell the Radiata pine if the Responsible Entity,
having taken reasonable steps, is unable to procure an
independent valuer to value, or verify the value of the
standing Radiata pine referable to the Pool.
3.7 Market for forestry plantations
The year of income distribution in the above table is anticipated
and may vary depending on a number of factors including
growth rates, the actual time of planting and market conditions.
Please refer to Glossary of Terms on page 73 for the definition
of “Year”.
Secondary markets for plantations have been expanding
both internationally and domestically. This has been driven
by increasing investment in plantations by financial institutions.
It should be noted that the She-oak trees will not be harvested
within four years after the end of the financial year in which
the Grower is issued Woodlots. For Growers entering into
the Project on or before 30 June 2009, the She-oak trees
will not be harvested prior to 1 July 2013.
TIMOs have previously been attracted to timberland assets
as an investment for several reasons, including a history of
competitive returns, moderate risk and the ability of such
assets to diversify an investment portfolio. However the
primary reason is that as an asset class the return profile
of timberland assets can match a TIMO’s long term pension
payment obligations.
3.6 Guaranteed sale of Radiata pine
The Silky Oak and She-oak species have been selected for
their unique yield and market profiles. As these species reach
maturity at a point earlier than Radiata pine, the Responsible
Entity will enter into an arrangement to sell the standing
Radiata pine in respect of a Pool during Year 15.
The Responsible Entity will seek to sell the Radiata pine of
a Pool to a Timberland Investment Management Organisation
(“TIMO”) or an institutional investor, of which there are a
number that are active in the secondary market for forestry
assets. The Responsible Entity will conduct a tender process
for the sale of a Pool’s standing Radiata pine plantations.
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Along with several Australian institutional investors, in the
opinion of URS (refer to the Independent Market Report on
page 49), US based TIMOs are now focusing on Australian
timberlands as an attractive investment.
Private ownership of plantations in Australia has increased
to over 60% in 2005. The Victorian state owned plantations
have been privatised and many small New South Wales
plantations have been aggregated by TIMOs.
The acquisition of a well managed 15 year old Radiata pine
plantation may be attractive to a TIMO because (like
infrastructure assets) over a longer time frame, the yields
can be predictable and stable.
Our capability continues to grow and our
commitment to quality is certainly evident
in every facet of our forestry operations.
The key features of a semi-mature Radiata pine plantation
for a TIMO are likely to be:
• a 10 to 15 year time frame until the plantation matures
which matches the retirement or pension obligations
of the fund investors;
• interim thinning of the plantations occurs at regular intervals
providing ongoing cashflow;
• an investment return profile which is uncorrelated to other
investment categories such as shares, property or bonds;
• an investment return profile which is strongly linked to
inflation and can provide a ‘portfolio hedge’ against rising
inflation;
• lower agricultural risk once the plantation is fully established;
and
• the ability to time final harvest to take advantage of timber
price movements.
3.8 Quality silvicultural and project management
The Responsible Entity is an Australian listed public company
that has been operating Radiata pine plantation forestry
projects since 1980.
With total assets in excess of $247 million as at 31 December
2007, the Responsible Entity is an industry leader in the
establishment and management of Radiata pine plantations
in Australia with over 47,000 hectares under management.
The Responsible Entity operates a fully integrated business in
all aspects of plantation forestry establishment, management,
harvesting and processing, including a landscape timber mill
at Bombala in New South Wales.
The Responsible Entity will manage and operate the
Plantations throughout the life of the Project based on a
detailed forest management plan accredited under Quality
System AS/NZS ISO 9001.
For further information on the secondary market for forestry
plantations and the returns for forestry plantations please
refer to the Independent Market Report on page 49.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
13
green
In a world where man continues to consume
our natural forest resources unabated, plantation
forestry offers an opportunity for you to give
something back to the environment. There is an
opportunity to make a difference to our planet,
global warming and a positive contribution to
the environment.
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Willmott Forests – Premium Forestry Blend Project 2009 PDS
3.0 A Unique New Generation Forestry Project
3.9 Sustainable energy and carbon sequestration
Renewable energy sources such as solar, wind power
and biofuels are a significant and growing component
of the global effort to combat climate change.
She-oak plantation material will be processed as renewable
biomass substitute for traditional energy sources such as
coal in a process known as co-firing.
Co-firing raw plantation biomass represent ‘net zero’
carbon emission for the energy produced and as such
are an attractive fuel source for traditional thermal power
generators; in order to both reduce net carbon pollution
and to meet mandated renewable energy targets (MRET)
under state and federal government legislation.
Plantation forestry is a recognised method of removing
atmospheric carbon pollution for the purposes of a Carbon
Pollution Reduction Scheme (CPRS), also referred to
as the Emissions Trading Scheme. For example in NSW
the Greenhouse Gas Reduction Scheme (GGAS) Carbon
Sequestration Rule provides the opportunity for forestry
managers to create abatement certificates for sequestering
carbon in New South Wales.
There are a number of issues which arise in relation to
the Project participating in GGAS. At present, GGAS is the
only established State-based CPRS in Australia. Following
ratification in 2007 of the UN Climate Change Convention
(known as the Kyoto Protocol), the Federal government has
committed to a national CPRS which is likely to commence
operation in 2010 or 2011. It is likely to be a ‘cap and trade’
emissions trading scheme. The Australian States that have
either established or proposed to establish a CPRS will
transition into the announced national CPRS.
continued
Accordingly, once the national CPRS commences, it will
supersede any other existing State CPRS such as GGAS.
As the details of the national CPRS are yet to be finalised,
it is not yet clear whether the forestry sector generally or
plantation growers specifically will be covered by the national
CPRS, or if they will be able to produce offsets which can
then be sold into the emissions trading scheme. It is therefore
unclear at this point in time whether or not the Responsible
Entity and the Project will be able to participate in the national
CPRS at the time it commences.
To facilitate any potential participation in the national CPRS,
WFIM (which holds one or more Forestry Rights on behalf
of Growers) appoints the Responsible Entity to deal in any
Carbon Credits in respect of the land used in connection
with the Project.
The Responsible Entity is entitled to 50% of the net proceeds
from any dealings in Carbon Credits (being any proceeds less
any costs that the Responsible Entity is entitled to recover
and certain liabilities).
Please refer to section 15.1.16 page 64 for further information.
Please note that, due to issues which arise in relation to
participation in carbon sequestration schemes, the Project
may not be able to participate in carbon sequestration
schemes and there may be no distributions to Growers
in relation to Carbon Credits.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
15
4.0 Our Regions
4.1 Location of plantations
Willmott Forests is dedicated to creating a sustainable and
evolving plantation resource and land base servicing the
major domestic markets of Victoria and New South Wales.
The wood supply agreement provides the resource security
to enable the construction of a large-scale, fully integrated
softwood timber processing facility at the Sandy Lane site
in Bombala. Willmott Forests aims to develop this project in
conjunction with Dongwha Australia Holdings Pty Ltd by
forming a joint venture through a 50:50 ownership of Willmott
Timbers Pty Ltd.
Dongwha Holdings is a global manufacturer of wood materials
with timber processing and marketing operations in Korea,
New Zealand, Malaysia, Australia, Japan and the United States.
Northern
Territory
Queensland
Western Australia
South Australia
New South
Wales
Victoria
Tasmania
4.2 Softwood plantation regions
The Murray Valley region – New South Wales
The Murray Valley region comprises the foothills of the
Murray Valley west of the Great Dividing Range extending
from Melbourne in Victoria to Tumut in New South Wales
encompassing the north east of Victoria. The Murray Valley is
one of the largest plantation regions in Australia (over 170,000
hectares) with a capacity at the current time to produce 23%
of Australia’s sawlog harvest and 20% of Australia’s pulpwood
harvest. The region also has a well established processing
industry and strong demand for sawlog and pulpwood.
Plantation productivity (16 to 25m3/ha/year) is acceptable
across the region with historical average rainfall ranging from
650mm to 1,200mm per annum. There is a wide variety of
processing plants including six sawmills, two veneer plants,
two pulp mills, two particleboard plants, and a medium
density fibreboard (MDF) plant.
The Bombala region – New South Wales
There are over 45,000 hectares of softwood plantations
currently growing in the Bombala region and over 112,000
hectares of land suitable for new plantation development. The
region currently produces in excess of 200,000m3 of sawlog
per annum and recently developed export markets will see
around 180,000 tonnes of pulpwood/sawlog exported out
of Eden each year. Willmott Forests is a major processor in
Bombala, processing around 90,000m3 per annum of salvage
sawlog and preservation timbers. All these markets complement
each other to maximise the range of timber products
produced from plantation harvesting operations.
Willmott Forests Limited recently has executed a 20 year
wood supply agreement with the NSW government for the
long term supply of plantation-grown softwood sawlogs from
the Monaro region’s timber resources managed by Forests
NSW.
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Central Tablelands – New South Wales
The Central Tableland is located to the west of the Blue
Mountains, New South Wales and comprises approximately
80,000 hectares of softwood plantation resource. The
plantations stretch from Orange to Burraga and include
elevated holdings near Bathurst and Oberon. The rainfall
is uniformly distributed across the seasons, with average
rainfall ranging up to 900mm per annum.
The resource, which is predominantly owned and managed
by Forests NSW, is serviced by a well established road
and rail network, with secondary roads providing access
to Oberon where the main processing facilities are located.
Local sawmilling facilities include large automated mills
that process up to 750,000 tonnes of sawlog per annum with
600,000 tonnes of pulpwood processed locally via particle
board and medium density fibreboard plants. Further markets
for pulpwood will be developed with the completion of the
second stage of Visy’s Kraft mill plant in Tumut. A number
of smaller mills use lower grade logs to produce case and
garden grade saw products. Export opportunities are also
available at Port Kembla.
The Victorian regions
Willmott Forests entered into a commercial arrangement with
Hancock Victorian Plantations Pty Limited (HVP) on 22 March
2006 where HVP will make available a minimum of 13,000
hectares of harvested plantation lands to be replanted for
new Woodlot sales over a four year period. This arrangement
will position Willmott Forests to be one of the principal
future softwood suppliers in south eastern Australia. The
arrangement provides Growers with market access to over
twelve major sawmills, five pulpwood processing plants and
two export pulpwood and sawlog operations. This improved
market access and harvesting economies of scale increases
the potential for Growers to receive higher end-market
product prices.
The HVP arrangement will involve Willmott Forests establishing
plantations on known high quality plantation land in all of
Victoria’s major plantation growing regions including the
following:
South West Victoria (part of the Green Triangle region)
The Green Triangle region of south west Victoria and
south east South Australia includes the major sawlog and
pulpwood processing plants near Mount Gambier and the
export facilities at Portland. There is in excess of 161,000
hectares of softwood plantations in the region which is
renowned for its high-productivity and low-cost operations.
Second only to the Murray Valley region in terms of size,
Green Triangle softwood plantations annually produce
2,100,000 tonnes of sawlog, 130,000 tonnes of preservation
and 2,400,000 tonnes of pulpwood of which 50% is exported.
Central Gippsland region
The Central Gippsland region is centred around Australia’s
largest pulpmill in Morwell with access to both domestic and
export sawlog and pulpwood markets. With over 60,000
hectares of softwood plantations, the region produces
approximately 515,000 tonnes of sawlog, 51,000 tonnes of
preservation, 523,000 tonnes of pulpwood, and approximately
120,000 tonnes of sawlog and pulpwood exported out of
Geelong. Plantation productivity varies from the 16m3/ha/year
in the Gippsland Valley through to 30m3/ha/year within the
Strezlecki Ranges where the deep loam soils and high
rainfall provide optimum growth conditions.
Ballarat-Otways region
The Ballarat-Otways region has in excess of 30,000
hectares of softwood plantations and includes some of the
most productive plantation areas within the state. With both
domestic and export markets (Geelong) the region produces
approximately 360,000 tonnes of sawlog, 77,000 tonnes
of preservation and more than 200,000 tonnes of softwood
export woodchips per annum.
North East Victoria (part of the Murray Valley region)
HVP’s north east Victorian plantation comprises part of the
greater Murray Valley region. Refer to the Summary of the
Murray Valley region in section 4.2 on page 16.
4.3 She-oak and Silky Oak plantation regions
Northern Rivers region – New South Wales
This region extends along the New South Wales north coast
from the southern Queensland border to south of Woy Woy
and inland to the Great Dividing Range. The average annual
rainfall ranges between 900mm to 1,800mm per annum.
The plantations on the north coast has reached approximately
67,000 hectares with hardwood plantations accounting for
75% of this resource. The region is well serviced by roads with
the Pacific Highway passing through most of the centres
where timber processing facilities are located.
The North Coast NSW hardwood sawlog industry currently
processes in excess of 400,000 tonnes per annum. Together
with a maturing hardwood plantation resource, the Silky Oak
plantations to be established as part of this Project, will
provide an ongoing sustainable supply of sawlogs well into
the foreseeable future. Similarly the She-oak biomass will
complement existing sawmill residues that are currently being
used for pellet production, chip export and the production
of energy through co-generation power plants.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
17
5.0 Risks
Risk is a factor that is present in any investment you make.
The following is a summary of the risks that have been identified
that could affect an investment in the Project.
The Responsible Entity works pro-actively to manage and
mitigate these risks where possible.
5.1 Fire
Fire can damage or in extreme circumstances destroy large
areas of a plantation. Fire is a risk that the Responsible Entity
takes very seriously.
In addition to maintaining appropriate insurances that are
currently available in the market (see section 9.7 on page 30)
the Responsible Entity carries out a number of activities to
minimise the risk from a fire breaking out or from the damage
arising from such a fire, including:
• planning and installing firebreaks in accordance with
good forestry practices during the initial establishment
of a Plantation;
• carrying out regular maintenance to ensure firebreaks are
clear of excessive fuels and that regrowth and fuel build-up
is minimised;
• making regular contributions to local fire brigades in the
Plantation regions;
• maintaining a fleet of four wheel drive vehicles with varying
levels of fire fighting capacity in close proximity to the
Plantations;
• ensuring that the Responsible Entity is an active
registered industry fire brigade, where possible;
• maintaining close liaison with regional fire fighting
agencies; and
• where adequate water supply is available, maintaining
access to such water supply to ensure availability
for fire fighting purposes.
5.2 Pests and diseases
In any agricultural pursuit there are a number of pests,
diseases or infestations that can affect the natural growth
of the trees.
Sirex wood wasp has been a problem in parts of the forestry
industry in the past, but has been managed using biological
means. Sirex wood wasp has never been reported within any
plantation managed by the Responsible Entity.
Fungal
Fungal diseases are naturally present in most plantations and
usually only cause minor damage under specific environmental
conditions or when the trees are under stress.
Infestations can occur in valleys or in areas with damp and
still air. Experience has shown that spraying with copper
based fungicidal treatment generally controls fungal diseases
but good management including appropriate spacing of trees,
good silviculture and on-time thinning will encourage air flow
and reduce the likelihood of any attack.
5.3 Hailstorms
Violent hailstorms can affect trees. Unfortunately, hailstorms
cannot be predicted or prevented, however Willmott Forests’
geographic spread of Plantations throughout Australia will
assist to reduce the overall risk and impact of extensive
hail damage events to the Pool.
5.4 Windstorms
Windstorms occasionally affect plantations with trees
blowing over from the roots or breaking off mid-stem.
Damage by severe windstorms typically occurs in plantations
where thinning operations have been delayed and the
trees have a high height to diameter ratio. On-time thinning
operations, as proposed by the Responsible Entity, help to
reduce the risk of windstorm damage. In most stands affected
by wind damage, salvage harvesting operations remove
a large percentage of the sawlog and pulpwood present.
5.5 Frost
From time to time, frost can affect recently planted young
seedlings. Pine and She-oak trees are generally frost resistant,
however, care needs to be taken with the less frost tolerant
Silky Oak trees. This is largely managed through appropriate
site selection and the exclusion of Silky Oak plantations from
low lying frost hollows.
5.6 Snow
In plantation forestry these problems are well understood and
are managed as part of the ongoing plantation management
system.
Rabbits
Rabbits can eat the tops from small pockets of seedlings
during the early development of a plantation. In the unlikely
event of a serious rabbit infestation, the Responsible Entity
will use reasonable endeavours to eradicate rabbits and,
if necessary, replace the damaged trees at the Responsible
Entity’s expense in accordance with the Stocking Guarantee
(also refer to section 15.1.12 on page 63).
Insects
Insect pests can cause damage to plantation trees
particularly when those trees are under stress (for example
during a drought). Sound, ongoing management including
good land selection techniques can reduce this risk.
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Willmott Forests – Premium Forestry Blend Project 2009 PDS
Some plantations may be exposed to regions which could
experience snowfalls.
A significant build up of snow can weigh down seedlings and
trees causing them to topple or break. Where possible, land
is selected to avoid areas where regular snow fall occurs.
5.7 Drought
In the land selection process the Responsible Entity targets
areas with average rainfall greater than 650mm per annum
for Radiata pine and 750mm per annum for She-oak and
950mm per annum for Silky Oak.
This key parameter provides a reliable guide to areas that
will be conducive to the long term growth and productivity
of a plantation.
Blending mature products with innovation
to capitalise on future markets.
The Responsible Entity considers this to be a prudent measure
to reduce the risk of loss due to drought. Over the past few
years much of eastern Australia has experienced varying levels
of drought.
The risk of loss due to extreme climatic conditions remains
outside the control of the Responsible Entity.
5.8 Price
The Project has three species with their own price risk profiles.
The Responsible Entity has guaranteed that Growers will
receive at least 90% of the market value of the standing
Radiata pine in relation to the relevant Pool. Refer to section
3.6 on page 12.
The market price for She-oak biomass and Silky Oak
timber varies over time. The market for She-oak biomass
and Silky Oak timber is also discussed in the Independent
Industry Report on page 35. The Responsible Entity does not
guarantee the price at which the harvested She-oak biomass
and Silky Oak timber will be sold.
Although the pooling mechanism and the overall mix of
forest products produced will ensure that only a portion
of a Grower’s total return may be exposed to exchange rate
movements, there is a risk that an adverse movement in the
Australian dollar could reduce the total proceeds of a Pool.
5.10 The Responsible Entity’s risk
The Responsible Entity may be required to ‘top up’ the
proceeds from the sale of standing Radiata pine.
If the Responsible Entity is unable to sell the standing Radiata
pine in respect of a Pool, for example, because of market
conditions at the time the Responsible Entity seeks to sell
the timber, the Responsible Entity will acquire the timber
in its personal capacity. There is a risk that the Responsible
Entity, for financial reasons, may not be able to satisfy these
obligations or complete such an acquisition.
5.11 Carbon Credits
Due to issues which arise in relation to participation in carbon
trading (emission reduction scheme), there is a risk that there
will be no distributions to Growers in relation to Carbon Credits.
5.9 Currency movements
If the Responsible Entity plans to export any forest products
produced from the Plantations, the value of these products
will depend upon the international price of the products and
the exchange rate to convert the proceeds from the sale
of these products into Australian currency.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
19
6.0 Company Overview
6.1 Introduction
Willmott Forests Limited is a publicly listed (ASX Code: WFL),
quality endorsed company that establishes, manages, harvests,
processes and supplies timber products from plantation
grown resources on behalf of our Growers and shareholders.
Willmott Forests has been operating since 1980 and directly
employs over 80 people and manages in excess of 47,000
hectares of softwood plantations, ranging from new plantings
to mature trees.
The Company currently conducts its softwood plantation
operations in south east New South Wales predominantly in
the Bombala and Murray Valley regions and throughout the
major softwood growing regions of Victoria. The Northern
Rivers region of New South Wales now forms part of the
forestry operations business with the development of
plantations for high value veneer timber production and
She-oak biomass for energy production.
Willmott Forests is a fully integrated business with downstream
processing operations in Bombala that focus on landscape
and fencing timber products for the Australian market.
For many years now Willmott Forests has been the most
prolific developer of newly established softwood plantations
in Australia and the past 12 months have seen the Company
branch out into new and exciting areas within the forestry
industry.
6.2 Corporate activities
Willmott Forests has been committed to the establishment
of Radiata pine plantations for over 25 years and is recognised
as a market leader in the proven and recognisable long term
softwood plantation industry.
The Company’s desire to develop sustainable markets for
plantation wood waste and residues took a quantum leap
forward with two acquisitions undertaken in the past 18
months.
BioForest Group
The acquisition of the BioForest business has seen Willmott
Forests establishing plantations of Silky Oak on the Central
and North Coast of New South Wales for high quality veneer
production and also She-oak for biomass that can be
converted into high density pellets or used to produce
renewable energy.
This is a sensible diversification from our Growers’ perspective
both in terms of species and geographical location and is a
logical entry for Willmott Forests into the exciting bio-energy
market.
Ethanol Technologies
A 51% interest was acquired in 2007 in Ethanol Technologies
Limited (Ethanol Technologies). Ethanol Technologies has a
world-wide exclusive licence from Apace Research Limited
to further develop and commercialise technologies for the
production of ethanol from lignocellulosic material such as
wood, bagasse (waste from sugar production), crop stubble
and municipal green waste which are generally referred to
as ‘cellulosic ethanol’.
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Willmott Forests – Premium Forestry Blend Project 2009 PDS
Ethanol Technologies is currently building a pilot plant to
demonstrate the commercial application of these technologies.
6.3 Timber processing
Willmott Timbers Pty Ltd, a 50% subsidiary of Willmott
Forests, conducts timber processing operations in Bombala,
New South Wales and is involved in the processing,
refinement and treatment of softwood timber. The softwood
timber products produced by the Company’s milling operations
include treated outdoor landscape and fencing products to
service the domestic timber markets throughout New South
Wales, the Australian Capital Territory and Victoria.
In April 2008 Willmott Timbers successfully negotiated a
20 year wood supply agreement with the NSW Government
for the long term supply of plantation-grown softwood
sawlogs from the Monaro region’s timber resources
managed by Forests NSW.
This gives Willmott Forests an outstanding opportunity to
realise the true value and sustainability of the Monaro plantation
timber resource by implementing advanced technology to
maximise the resource’s value in the market.
The timber supply agreement provides the resource
security to enable Willmott Timbers to construct a large
scale, fully-integrated softwood timber processing facility at its
Sandy Lane site in Bombala. The project is being developed
in conjunction with Dongwha Australia Holdings Pty Ltd
through a joint venture 50:50 ownership of Willmott Timbers
Pty Ltd.
The project is particularly exciting because it provides a long
term, whole-of-tree solution for the entire Bombala softwood
plantation estate, with a focus on local processing, value
adding and residue utilisation.
6.4 Quality system
Willmott Forests maintains a documented quality system
accredited under Quality System AS/NZS ISO 9001.
Continuous improvement is achieved by regular management
review meetings, internal and external audits, systematic
reporting and monitoring and implementation of feedback
from clients, suppliers and employees.
6.5 Environmental management
Willmott Forests takes into account labour standards and
environmental, social and ethical considerations. Willmott
Forests’ environmental management policies operate in
concert with our timber plantation practices code and
plantation establishment plans. Willmott Forests has an
extensive planning procedure.
The Company is involved with many industry associations
and has in recent years, become a recognised key stakeholder
in the development and implementation of the Code of Practice
under the NSW Plantations and Reafforestation Act 1999
affecting the plantation timber industry within the State.
The following are some of the Acts that govern plantation
management:
• Environment Protection and Biodiversity Conservation
Act 1999;
• National Parks and Wildlife Act 1974 (regarding aboriginal
cultural heritage sites);
• Threatened Species Conservation Act 1995;
• Native Vegetation Act 2003;
6.7 Regional development
Plantations can greatly assist regional development through
the many socio-economic benefits that they bring to regional
communities.
A recent study conducted by the Forest and Wood Products
Research and Development Corporation in conjunction with
the Bureau of Rural Sciences entitled Socioeconomic Impacts
of Plantation Forestry in the South West Slopes region of
(New South Wales) found that:
• Plantations and Reafforestation Act 1999;
• Environmental Planning and Assessment Act 1979; and
• Planning and Environment Act 1987.
Willmott Forests’ in-field operations cover a wide range of
environmental activities including control of salinity, erosion
and applications of herbicides and fertilisers.
Willmott Forests endeavours to adopt best practices in all
plantation activities ensuring conformance with relevant Acts
and Codes of Practices, some of which are outlined above.
The Company continues to be widely regarded as a leader
in this field due to its commitment to maintain responsible
forestry practices and sustainable resource management.
6.6 Advanced technology
The Private Plantation Management Information System
(PPMIS) provides Willmott Forests with a ‘state-of-the-art’
decision-support system.
The system has been assembled and is operated by Willmott
Forests and uses remote sensing satellite/aerial photography
which is geo-referenced against a number of layers such as
cadastre data (title boundaries, road infrastructure etc.),
elevation and rainfall data.
The PPMIS assists Willmott Forests to:
“Small towns with high levels of plantation sector employment
experienced higher overall population growth, stronger
growth in working age population, and more consistent
growth in household income over 1996 to 2001 than other
small towns in the region.”
The study also found that plantation forestry enhances social
infrastructure and arrests rural decline where plantation
resources reach critical mass and processing infrastructure
are apparent.
Willmott Forests believes in assisting regional development
in the regions in which we operate. Long term commitment
to the regions and the local communities in which we operate
is evidenced by our:
• adherence to a strict Code of Forestry Practice;
• commitment to a Good Neighbour Initiative;
• policy to utilise and support local businesses and services
and employ locally wherever possible;
• Forest Cadet Training and Employment Program and
school industry partnerships;
• status as an Industry Fire Brigade in cooperation with the
Country Fire Authority (CFA); and
• membership of local Land Care Groups and supporter/
sponsor of many various community programs and activities.
• identify suitable land for plantations;
• evaluate properties prior to plantation establishment;
6.8 Outlook
• streamline the approvals process for planning applications;
These are exciting times for Willmott Forests.
• prepare accurate allocation plans for Growers;
• monitor existing plantation performance; and
• monitor contractor progress and performance.
This technology is able to provide photographic evidence
of any variations in plantation quality.
This is a major advantage because such variations may not
have been detected by human inspection techniques. As a
result, Willmott Forests is able to identify, evaluate, monitor
and, if required, act upon such variations to enhance plantation
health and performance.
Our traditional softwood plantation business continues to
expand at a solid rate and we are actively branching out
into new plantation grown species in new regions.
We have strategically entered an area we see as the ‘new
frontier’ for the timber industry – the production of biofuel
and bio-energy from wood and wood waste.
Add to this a new state-of-the-art timber processing facility
in Bombala with secure long term wood supply and it is fair
to say that we have laid the foundations for the next phase of
Willmott Forests’ continuing development into a truly integrated
and sustainable forest business.
Our people are completely committed to building a strong
and sustainable business that has a positive impact on all its
stakeholders and the Board is determined to ensure that we
succeed in our endeavours.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
21
7.0 The Board
Chairman – James William Antony Higgins LLB, LLM, FCPA
Mr Higgins has spent most of his professional life practising corporate and commercial law and
has been involved in the legal aspects of managed investment schemes since 1981. He is currently
self employed as the sole proprietor of James Higgins and Co. specialising in estate planning
and commercial law. Previously, he worked as a Partner of Mallesons Stephen Jaques from 1974
to 1998. Mr Higgins is currently a Member of the Compliance Committees of Legg Mason Asset
Management Australia Ltd and National Mutual Funds Management Ltd and he is the Chairman of
Secure Funding Pty Ltd. Mr Higgins has Bachelor of Laws and Master of Laws Degrees from the
University of Melbourne. He is a Fellow of the Australian Society of Certified Practising Accountants
and of the Australian Institute of Company Directors. He is a member of the Willmott Forests
Limited Audit and Risk Management Committee, Nomination Committee and Remuneration
Committee.
Chief Executive Officer – Marcus Derham FAICD, FAIM
Mr Derham has been involved in the forestry industry since 1985 at both middle and senior
management level and has been the Chief Executive Officer of Willmott Forests Limited since
1991. During that time he has dealt with all facets of practical forest management from site
preparation through to utilisation. Mr Derham has been involved in the management and
administration of all of Willmott Forests Limited’s projects since 1989 and forged a strong and
cooperative relationship with numerous Government departments and agencies over the years.
Mr Derham is affiliated with a number of industry associations. He is Chairman of an industry-based
chapter of the Australian Forest Growers (AFG) called Treefarm Investment Managers Australia
(TIMA), and is a Board member of the Australian Plantations Products and Paper Industry Council
known as A3P. He is also a Government appointee to the NSW Forests and Forest Products
Ministerial Advisory Council. Mr Derham holds a Certificate of Applied Management. He is also a
Fellow of the Australian Institute of Management and the Australian Institute of Company Directors.
He is a member of the Willmott Forests Limited Nomination Committee and Remuneration
Committee. Mr Derham is also a Director of BioEnergy Australia Ltd. Additionally he is
a Director of Ethanol Technologies Ltd, a company in which Willmott Forests Limited holds
a 51% controlling interest.
Non-Executive Director – Jonathan David Madgwick BBus, ACA
Mr Madgwick has over 27 years experience in public practice accountancy and is a Chartered
Accountant, registered company Auditor and registered Tax Agent. He graduated from the Royal
Melbourne Institute of Technology in 1984 with a Bachelor of Business Degree with distinction.
Mr Madgwick has been directly involved in an advisory capacity for Willmott Forests Limited’s
commercial forestry projects since 1990, and a Non-Executive Board member of Willmott Forests
Limited since 1994. He has long been recognised by the plantation industry as being expert in
taxation matters and has, on numerous occasions since 2001, represented the industry based
chapter of the Australian Forest Growers (AFG) called Treefarm Investment Managers Australia
(TIMA) with Treasury, the Australian Taxation Office and ASIC in successfully negotiating and drafting
the provisions regarding taxation treatment of forestry based managed investment schemes.
Mr Madgwick is a member of the Willmott Forests Audit and Risk Management Committee
and is the Company’s Professional Accountant and Company Secretary. Mr Madgwick is also
a Director of BioEnergy Australia Ltd. Additionally he is a Director of Ethanol Technologies Ltd,
a company in which Willmott Forests Limited holds a 51% controlling interest.
Non-Executive Director – Hugh Thomas Davies BA, LLB
Mr Davies has been a practising solicitor since 1966. He currently works as a lawyer and mediator.
He was formerly a Partner of Rigby Cooke solicitors from 1971 to 1995 and was Managing Partner
of that commercial law firm from 1989 to 1995. Mr Davies holds qualifications in the development
of quality systems and as a mediator in all court jurisdictions. He is a sessional member of the
Victorian Civil and Administrative Tribunal, and a Government appointee to the Surveyors Registration
Board of Victoria and Chairperson of the Fisheries Licensing Appeals Tribunal (Victoria). He graduated
from the University of Melbourne with Bachelor of Laws and Bachelor of Arts degrees. He is Chairman
of the Willmott Forests Limited Compliance Committee and Chairman of the Willmott Forests
Limited Audit and Risk Management Committee.
22
Willmott Forests – Premium Forestry Blend Project 2009 PDS
8.0 Corporate Governance
8.1 The Board
8.2 Risk management
The Board of Directors is accountable to shareholders and
stakeholders for the operations and overall performance
of the Company.
The Board of Willmott Forests formally adopted AS 4360
Risk Management in March 2002 as part of its corporate
governance policy.
The Board’s key responsibilities are:
Business risk is under constant surveillance by the Board,
the Chief Executive Officer and Senior Executives.
• the strategic development of the Company;
• adherence to corporate and regulatory requirements;
• monitoring of the performance of executives and senior staff;
• the adoption of appropriate management and administrative
systems; and
• the identification and application of appropriate risk
management procedures.
The Board adopted the ASX Corporate Governance Principles
and Recommendations and accordingly maintains committees
of nomination, audit, remuneration and compliance.
During the year, the Board, the Audit and Risk Management
Committee and the Compliance Committee hold scheduled
meetings, as detailed in the Directors’ Report. The Nomination
and Remuneration Committees meet as required.
The Board presently consists of four members, comprising
the Chief Executive Officer and three Non-Executive Directors,
two of whom are independent within the meaning of the ASX
Corporate Governance Principles and Recommendations.
Directors have the right, in connection with their duties and
responsibilities, to seek independent professional advice
at the Company’s expense, with the prior approval of the
Chairman.
Willmott Forests does not permit the buying or selling of
shares, other securities or certain price sensitive financial
products at any time by any Director, senior executive or staff
member who possesses price-sensitive information about
the Company which is not available to the market.
As a rule, our Directors and senior executives are only
approved to trade our shares in the two 35 day periods
commencing two days after the release of Willmott Forests’
half yearly and yearly results.
Risk management is monitored by best practice based on
quality assurance practice under Quality System AS/NZS
ISO 9001 and under AS 4360 Risk Management.
A policy of continuous improvement is encouraged. The
Compliance Committee monitors the Company’s obligations
under the managed investments provisions of Corporations
Act.
Environmental risk is covered under the Forestry Code of
Practice. All quality management procedures address the
requirements of AS 4360 Risk Management.
8.3 Ethical standards
Willmott Forests recognises the importance of being a good
corporate citizen, and as a result actively employs practices
that reflect this on a social, environmental, and corporate
governance level.
The Company actively seeks the appropriate accreditation
for management and forestry practices where they exist.
These include:
• accreditation under AS/NZS ISO 9001;
• membership at Australian Plantation Products and Paper
Industry Council (A3P);
• membership of Treefarm Investment Managers Australia
(TIMA);
• patronage of the Joseph William Gottstein Memorial Trust
the National Education Trust of the Australian Forest
Industries;
• commitment to the Willmott Forests Award for Academic
Excellence in the Advanced Diploma of Forestry (Melbourne
University Creswick Campus);
• implementation of the Code of Forestry Practice;
• continuing social commitment to training and employment;
and
• implementation of a regional development plan, that
incorporates our community and good neighbour policies.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
23
energy
As part of your investment decisions there is a
place in any portfolio for new forward thinking ideas
with socially responsible and environmentally friendly
approaches to management and investment.
24
Willmott Forests – Premium Forestry Blend Project 2009 PDS
9.0 Frequently Asked Questions
9.1 The Responsible Entity
What is the main business of Willmott Forests?
Willmott Forests establishes, manages, harvests, processes
and supplies timber products from plantation grown resources
on behalf of our Growers and shareholders. It raises funds
for the establishment of plantations via a suite of investment
products that are distributed through an extensive dealer
network of independent licensed financial advisers around
Australia.
9.2 The Project
What is the minimum investment?
The minimum investment in the Project is one Woodlot. A
Woodlot is initially equivalent to approximately 5,200 square
metres of land (0.52 of a hectare). This area is further allocated
to the three species within the Project as follows:
• She-oak: approximately 300m2
• Radiata pine: approximately 3,500m
2
• Silky Oak: approximately 1,400m2
Please note that the area allocated to each species is an
approximation. The actual area will depend on the nature
of land being planted.
What is the duration of my investment?
It is anticipated that the duration of your investment in
Woodlots referable to a Pool will be approximately 16 years.
Circumstances may arise where the Responsible Entity delays
harvesting of timber (for example, because of fluctuations in
timber prices). If this occurs, the payment of distributions may
be delayed.
How do I apply for Woodlots?
Details of how to apply for Woodlots are outlined on page 77.
When can I apply for Woodlots?
At any time while there is a current PDS for the Project,
and the offer for Woodlots in the Project is open.
Is it possible to finance my investment in the Project?
Yes, refer to page section 1.6 on page 3.
Am I liable to pay any additional money in relation to my
investment in the Project?
Other than amounts payable under the Constitution, the
Agreements (including payments due under Loan Agreements),
the application amount and the cost of insurance (refer to
section 10.8 page 32), you will not be liable for any other
payments in respect of your investment unless the duration
of the agreements is extended by mutual agreement with
the Responsible Entity.
GST is not expected to be payable in respect to the
Application Price. If GST is found to be payable, then:
(a) where a Grower has paid the Application Price using
the cash option, the Grower will be obliged to pay any
applicable GST (currently 10% or $500 per Woodlot), to
the Responsible Entity on a receipt of a tax invoice from
the Responsible Entity; or
(b) where a Grower has paid the Application Price using
the financing option, the loan amount will increase
by an amount referable to the GST in respect of the
Application Price.
When should I receive income?
It is anticipated that you will receive income in respect of the
She-oak in Years 3, 5, 7 and 9; in respect of Radiata pine in
Years 13 and 15; and in relation to the Silky Oak in Years 10
and 15 of the Project. Refer to the Glossary of Terms on page
73 for the definition of “Year”.
It should be noted that the She-oak trees will not be harvested
within four years after the end of the financial year in which
the Grower is issued Woodlots. For Growers entering into
the Project on or before 30 June 2009, the She-oak trees
will not be harvested prior to 1 July 2013.
The distribution of income may be delayed, for example, due
to delays in harvesting timber, receipt of income or because
completion of the sale of the standing Radiata pine does not
occur until after Year 15 of the Project.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
25
9.0 Frequently Asked Questions
Are returns guaranteed?
The returns of forestry plantations in Australia and the correlation
of the returns of forestry plantations with inflation and the
returns of other asset classes is not guaranteed and is not
necessarily indicative of the returns of the Plantations
established under the Project.
Can I transfer my investment?
Subject to the requirements of the Constitution and the
Corporations Act, your investment in the Project may
be transferred at any time. Certain conditions will apply
(refer to Further Information on section 15.1.4 on page 61).
Is there a secondary market?
At the date of this PDS there is no active secondary market
for Woodlots and the Responsible Entity does not guarantee
that any such market will be created. However, under new
legislation that came into effect on 1 July 2007, Growers
may sell their Woodlots and will maintain their tax deductions
for the Application Price, plus any applicable GST, after
satisfying a four year holding rule and a market value pricing
rule. The market value pricing rule will apply to any Woodlots
that are traded by the initial or subsequent Growers.
How is the Project promoted?
The Responsible Entity promotes the Project through a
network of advisers (either authorised representatives of the
Responsible Entity or independent licensed financial advisers).
Before advisers can become authorised representatives of the
Responsible Entity, they must undertake a compliance training
program with the Responsible Entity. They are then provided
with information including an ‘Adviser Package’, which
must be completed by the authorised representative and
the Grower upon making an investment in the Project. This
package includes a Financial Services Guide as required by
the Corporations Act. Authorised representatives are provided
with ongoing training and are subject to random compliance
reviews by the Responsible Entity.
continued
soundness or otherwise of the Project as an investment or of
the reasonableness or the commerciality of any fees charged
in connection with the Project.
The Product Ruling is only binding on the Commissioner of
Taxation if the Project is implemented in the specific manner
provided for in the Product Ruling. A copy of Product Ruling
PR 2008/60 can be obtained, free of charge, from the ATO
website at www.ato.gov.au or the Willmott Forests’ website
at www.willmottforests.com.au. You can also obtain a paper
copy by contacting the Responsible Entity (refer to the
Directory on the inside front cover).
Are expenses 100% tax deductible?
Based on ATO Product Ruling PR 2008/60 (refer to Taxation
Report on page 56), expenses under the Project are 100%
tax deductible in the year incurred for the Growers who enter
the Project on or before 30 June 2009.
New legislation which came into effect on 1 July 2007
permits participants in forestry managed investment
schemes to claim an income tax deduction for application
fees in the financial year they are paid where the scheme
satisfies a statutory test, known as the 70% Direct Forestry
Expenditure Rule. The Responsible Entity believes the Project
passes the 70% Direct Forestry Expenditure Rule and
therefore Growers will be entitled to a statutory deduction
for the Application Price, plus any applicable GST, for a
Woodlot in the year in which it is paid.
9.4 Land
What are the criteria for selecting land?
The Responsible Entity will apply appropriate and practical
criteria for selection of optimum sites as described in the
Independent Forestry Report on page 40. The Responsible
Entity has identified land for the Project which satisfies the
land selection criteria and:
(a) which the Responsible Entity owns;
Who should I contact if I have any queries?
You may contact the Responsible Entity at any time. Refer
to the Directory on the inside front cover.
Is there any brokerage/commission payable?
The Responsible Entity may pay brokerage or commission in
relation to your investment in the Project. The amount of any
such brokerage or commission will be calculated at a rate not
exceeding $250 per Woodlot (excluding GST) and will be paid
from the Responsible Entity’s own funds.
The Responsible Entity may also provide financial advisers
with an allowance for costs related to reasonable marketing
and administrative expenses. It is a requirement of the
Corporations Act that a financial adviser discloses to a
Grower any commissions and other benefits received for
providing financial product advice to the Grower in respect
of the Project.
9.3 Tax deductibility
What is an ATO Product Ruling?
An ATO Product Ruling is a ruling on the application of taxation
law and is in no way an express or implied guarantee or
endorsement of the commercial viability of the Project, of the
26
Willmott Forests – Premium Forestry Blend Project 2009 PDS
(b) for which the Responsible Entity has entered into an
option agreement with the owner of the land to purchase.
The Responsible Entity has the right but not the obligation
to purchase the property for a specific price in the future.
Where an option agreement has been entered into, the
seller (that is the landowner) is obliged to sell the land to
the Responsible Entity if the Responsible Entity chooses to
exercise its right under the option. Whether the Responsible
Entity exercises its right under the option agreement is
likely to depend on the level of investment in the Project;
(c) for which the Responsible Entity is currently negotiating an
agreement to purchase or an option to purchase with the
owner of the land; or
(d) which has been leased or licensed to the Responsible
Entity and, if necessary, allows the Responsible Entity
to grant a Land Tenure Agreement.
In addition to the land referred at (a), (b), (c) and (d) above,
the Responsible Entity has identified further suitable sites
of land which fall within the selection criteria set out in the
Independent Forestry Report. If the demand for Woodlots
requires, the Responsible Entity would immediately seek to
secure this additional land for the Project. Accordingly, there
is minimal risk that the Responsible Entity will be unable
to secure sufficient land for your investment in the Project
under this PDS within the prescribed time frame (which is
15 months after the end of the financial year in which your
first payment is made under the Project).
9.5 Land security
Land tenancy
The Responsible Entity enters into a Land Tenure Agreement
for the respective species with each Grower for the purposes
of the Project. Agreements are not registered on the title
to the relevant land and therefore do not have the same
protection against adverse dealings in the land as a registered
interest. However, the Responsible Entity must ensure under
the Constitution that:
• a Land Tenure Agreement is not terminated other than
in accordance with its terms or with the written consent
of the relevant Grower; and
• a Grower’s rights under a Land Tenure Agreement are
not adversely affected other than as contemplated by the
terms of the Land Tenure Agreement, as required by law
or with the written consent of the relevant Grower.
In addition, a landowner, mortgagee or any other secured
party, must acknowledge in writing the priority of the Land
Tenure Agreement between the Grower and the Responsible
Entity to ensure the rights of the Growers are protected.
In the unlikely event that the Responsible Entity is not in a
position to grant to you an interest in land in respect of your
application within 15 months of the end of the financial year
in which your first payment is made under the Project, the
amount invested by you for your Woodlot(s) will, within 14
days of the Responsible Entity receiving your written request,
be refunded in full. You will not be entitled to any interest on
the amount invested. Any interest earned will be retained by
the Responsible Entity for the benefit of the Project.
What is a Forestry Right?
As an additional protection to Growers, the Responsible
Entity will seek registration of the Forestry Rights under the
relevant legislation for all Project land. In order to facilitate
registration of each Forestry Right, each Forestry Right will be
granted to Willmott Forests Investment Management Pty Ltd
(WFIM), a wholly owned subsidiary of the Responsible Entity,
and will be held by WFIM on trust for the Growers. Registration
of the Forestry Right will be applied for prior to or as soon as
practicable following the grant of an interest in the relevant
land to a Grower. In broad terms, the Forestry Right gives
WFIM, as trustee for the Growers, an interest in the relevant
land under which WFIM:
• can enter the land and establish, maintain and harvest
one or more crops of trees on the land;
• can claim Carbon Credits in respect on the land; and
• can hold the trees on the relevant land for Growers.
WFIM appoints the Responsible Entity to control the Carbon
Credits on behalf of WFIM.
The Forestry Right in respect of an area of land terminates
when the Land Tenure Agreement which covers that area
of land terminates.
The Responsible Entity is required to reimburse WFIM for
any expenses reasonably incurred by WFIM in connection
with the Responsible Entity dealing in Carbon Credits.
9.6 Professional forest management
Identification of trees
The Trees in respect of a Grower’s Woodlots will be planted
on identifiable areas of land and the plans delineating the
particular areas will be attached to the Land Tenure
Agreements.
It should be noted that while all Growers will be granted
Woodlots which cover different areas of land, the trees in
respect of each Pool will be established, maintained and
sold on a pooled basis.
Can I inspect my trees?
Regular Grower visits/inspections are encouraged. The
Responsible Entity will be pleased to assist you with any
arrangements. Naturally, any out-of-pocket expenses will be
at your cost.
Labour standards and environmental, social or ethical
considerations
The Responsible Entity takes into account labour standards
and environmental, social and ethical considerations into
account in operating its business but not in the selection,
retention or realisation of an investment of the Project.
Please refer to section 6.5 on page 20 and section 8.3
on page 23.
How are my trees maintained?
The Responsible Entity will carry out or arrange for the
carrying out and supervision of all maintenance works.
Many of these works have already been addressed in this
section. In summary, each plantation will be prepared and
planted (and replanted if required) and all fences, roads and
firebreaks will be constructed and maintained as required.
Trees will be maintained in accordance with best industry
practices, as mentioned in the Independent Forestry Report
on page 40, and the Responsible Entity’s timber plantation
code of practice.
How does the sale of Radiata pine work?
The Responsible Entity will enter into an agreement to sell the
semi-mature standing timber from the Radiata pine plantations
in respect of a Pool during Year 15 (this period can change
under the Constitution) by undertaking a comprehensive
tender process.
Prior to commencing the tender process, the Responsible
Entity will engage an independent valuer (who must be
qualified to determine and have relevant market experience
in determining the market value of forestry plantations or
similar assets) to prepare a detailed valuation of the standing
Radiata pine in respect of a Pool or to verify the Responsible
Entity’s valuation of such timber.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
27
Long term drivers for increasing demand for
softwood are growth in population and GDP.
Australia already imports close to A$1 million
per day of sawn softwood. Source: IndustryEdge.
28
Willmott Forests – Premium Forestry Blend Project 2009 PDS
The independent valuer’s valuation will remain commercial in
confidence until the tender process is complete, when it will
be made available to Growers in the Pool and can be obtained
by contacting the Responsible Entity for a paper copy.
If the gross sale proceeds for the standing Radiata pine timber
in respect of a Pool is less than 90% of the valuation, the
Responsible Entity will make a contribution to the Project,
in respect of a Pool, out of its own funds so that the amount
received in aggregate for the standing Radiata pine is 90%
of the independent valuation.
The Responsible Entity expects strong interest from
Timberland Investment Management Organisations (“TIMOs”)
and institutional investors in acquiring the standing Radiata
pine timber in respect of each Pool.
The benefit of selling the standing Radiata pine is that Growers
are able to realise the additional value of long rotation softwood
plantation forestry without waiting until the Radiata pine planted
in respect of the relevant Pool is mature. Please refer to the
Responsible Entity’s Risk on page section 5.10 on page 19.
What methodology is used to value standing pine timber?
It is common to estimate the indicative sales value of a
plantation based on discounted cashflows expected to be
derived from the plantation. This generally involves estimating
the volumes of different grades of logs that will be produced
from the plantation over time, forecasting log prices for the
different grades of logs, and estimating costs of managing
and harvesting the Plantations to determine projected
cashflows over time. Discounting the net cashflows back to
the time of the sale first provides an estimated net present
value of the Plantations.
How are timber proceeds calculated?
She-oak
Timber proceeds are calculated by multiplying the volume
at each harvest by the Mill Door/Wharf Gate price. Mill Door/
Wharf Gate price is when timber is delivered to the mill or
wharf and takes into account harvesting costs (these costs
are separate to and distinct from the management fee paid
to the Responsible Entity) and haulage (this applies to
transported timber).
Silky Oak and Radiata pine
Timber proceeds are based on stumpage prices for both
Silky Oak and Radiata pine. Stumpage prices do not take into
account harvesting, loading and haulage costs as these are
borne by the purchaser of the timber.
Can the Responsible Entity seek a second valuation?
If the Responsible Entity, acting reasonably, considers that
the market value determined by the independent valuer is
not a reasonable reflection of the market value of the standing
Radiata pine of the relevant Pool, the Responsible Entity
is permitted to engage an alternative independent valuer.
In these circumstances, the standing Radiata pine timber
must be sold for a price equal to at least 90% of the average
of the two valuations or the Responsible Entity must top up,
from its own resources, the proceeds from the sale until they
equal 90% of the average of the two valuations.
How are the proceeds pooled?
Whilst you are allocated an identifiable area of land under
the terms of your Land Tenure Agreements, the proceeds
received from the sale of timber from Trees on Woodlots in
respect of a Pool will be pooled together with the proceeds
from the sale of timber from Trees on all Woodlots in respect
of that Pool.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
29
9.0 Frequently Asked Questions
Following sale of timber from Trees on Woodlots in respect
of a Pool you will then be paid a share of the proceeds based
on the proportion that the number of Woodlots held by you in
respect of the Pool bears to the total number of Woodlots
referable to the Pool.
The pooling of proceeds provides a smoothed return to all
Growers by minimising the risks that may be associated with
a particular Woodlot (for example, due to the location of the
relevant land). Pooling does not affect the tax deductibility
of your investment or any of your other obligations.
9.7 Insurance
Is there any public liability insurance?
The Responsible Entity arranges and pays for at least
$10 million public liability insurance for the Plantations
for the duration of Project at no additional cost to Growers.
Is there a Stocking Guarantee?
Yes, refer to section 15.1.12 on page 62 for details.
What happens after the Stocking Guarantee expires?
At the end of the Stocking Guarantee period, the Responsible
Entity will maintain a replacement and re-establishment
insurance in relation to fire in respect of the She-oak, Radiata
pine and the Silky Oak plantations, at the Responsible Entity’s
own expense for a further five years.
Do I have to pay for insurance for my trees?
Yes, upon expiry of the seven years (i.e. two year Stocking
Guarantee and a further five years replacement and
re-establishment insurance ).
The Responsible Entity will use reasonable endeavours in
respect of each Pool to arrange, each year until completion of
the sale of the She-oak, Radiata pine trees and the Silky Oak
trees in respect of that Pool, for the issue to the Responsible
Entity of an insurance policy in respect of fire which covers
such trees for an amount of at least the Application Price of
each Woodlot referable to the Pool. The Responsible Entity
may recover a pro-rata proportion of:
(a) the cost of such insurance; and
(b) any other cost in connection with such insurance,
from each Grower whose Woodlots are referable to the Pool,
calculated by reference to the proportion of the total number
of Woodlots referable to the relevant Pool which are held by
the Grower.
Will there be an excess in relation to the Group Insurance
Policy?
Yes. The Pool will only receive insurance proceeds less any
applicable excess under the policy from the time Growers
commence paying insurance for the trees. Growers will be
notified of excess premium amounts of insured value on a
yearly basis (regardless of whether the loss is of a full or
partial woodlot).
30
Willmott Forests – Premium Forestry Blend Project 2009 PDS
continued
Will insurance be available for the life of the Project?
The Responsible Entity has previously been able to source
insurance for the forestry projects that it manages and insurance
is currently available for all of the proposed locations of the
Plantations. The availability and terms of insurance, including
premium rates for continuing cover over the life of the Project,
will depend upon various factors including the state of insurance,
market conditions at the time, previous claim history and the
quantum of cover required. The insurance premiums will also
increase to reflect the increasing value of the timber over time.
What happens if there is an insurance claim?
If there is an insurance claim in relation to an event which
occurs within the seven years from the date a Grower is
registered as a holder of the Woodlot in respect of that Pool,
the proceeds from the insurance claim will be held by the
Responsible Entity prior to being applied to clear the affected
land and replace the affected She-oak, Radiata pine and/or
the Silky Oak trees. If the Responsible Entity re-plants an
area of land, it must plant at least 85% of the number
of seedlings initially planted on that land.
The Responsible Entity is entitled to be paid or reimbursed
for all costs, charges and expenses which are incurred in
connection with the removal of the damaged or destroyed
trees, preparing the ground and acquiring and planting new
seedlings. The Responsible Entity is entitled to the residue of
the insurance proceeds following completion of these works.
In addition, the Responsible Entity is required in good faith to
negotiate an extension of the relevant Land Tenure Agreements
(and the relevant Forestry Rights) and a variation of the Land
Sourcing and Forestry Management Agreement if required).
The Responsible Entity is also entitled to a portion of the
insurance proceeds in certain circumstances. If there is an
insurance claim in relation to an event which occurs after the
end of seven years from the date a Grower is registered as
a holder of the Woodlot in respect of that Pool, the proceeds
will not be applied to replant damaged or destroyed She-oak,
Radiata pine or Silky Oak (as applicable). The proceeds from
the insurance claim will be paid to the Growers less the
portion of the insurance proceeds to which the Responsible
Entity is entitled.
The Responsible Entity may be required to deal with a Grower’s
Trees under the terms of the insurance policy in order to
mitigate any loss suffered in the event of an insurance claim.
9.8 Reporting
Growers can receive the following information from the
Responsible Entity:
• annual financial report for the Project;
• confirmation of the Grower’s investment in Woodlots; and
• annual Grower’s Report.
10.0 Fees and Costs
10.1 Consumer advisory warning
The form of this consumer advisory warning is prescribed under the Corporations Regulations.
Did you know
Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns.
For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20%
over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior
investment performance or the provision of better services justify higher fees and costs. Ask the fund or your financial adviser.
To find out more
If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and
Investment Commission (ASIC) website (www.fido.asic.gov.au) has a managed investment fee calculator to help you check out
different fee options.
10.2 Fees and other costs
This table shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, from
the returns on your investment or from the fund assets as a whole. Taxes and insurance premiums are set out in another section
of this document. You should read all of the information about fees and costs, as it is important to understand their impact on
your investment.
Type of Fee or Cost
Amount
How and When
Establishment Fee: This is the fee to open
your initial investment.
Nil
N/A
Contribution Fee: The fee on each amount
contributed to your investment.
Nil
N/A
Withdrawal Fee: The fee on each amount
you take out of your investment.
Nil
N/A
Termination Fee: The fee to close
your investment.
Nil
N/A
Maintenance Fee: This is the fee to manage
the trees on your Woodlot.
In respect of a Pool, 4% of the total She-oak
Amount, Radiata pine Amount and Silky Oak
Amount in respect of that Pool. For example,
if the total of the She-oak Amount, Radiata pine
Amount and Silky Oak Amount is $100,000,
the Maintenance Fee would be $4,000. Each
Grower whose Woodlots are referable to
the Pool pays a pro-rata proportion of the
Maintenance Fee.
The Maintenance Fee will be deducted
from the She-oak Amount, Radiata pine
Amount and Silky Oak Amount after these
amount are received by the Responsible
Entity.
Rent: This is the fee payable under the
Land Tenure Agreement.
In respect of a Pool, 5% of the total She-oak
Amount, Radiata pine Amount and Silky Oak
Amount in respect of that Pool. For example,
if the total of the She-oak Amount, Radiata pine
Amount and Silky Oak Amount is $100,000, the
Rent fee would be $5,000. Each Grower whose
Woodlots are referable to the Pool pays a pro-rata
proportion of the Rent.
The Rent will be deducted from
the She-oak Amount, Radiata pine
Amount and Silky Oak Amount after these
amounts are received by the Responsible
Entity.
Marketing Fee: This is the fee to arrange
harvesting and/or selling of your She-oak,
Radiata pine and Silky Oak trees.
In respect of a Pool, 1% of the total She-oak
Amount, Radiata pine Amount and Silky Oak
Amount in respect of that Pool. For example, if
the total of the She-oak Amount, Radiata pine
Amount and Silky Oak Amount is $100,000, the
Marketing Fee would be $1,000. Each Grower
whose Woodlots are referable to the Pool pays
a pro-rata proportion of the Marketing Fee.
The Marketing Fee will be deducted from
the She-oak Amount, Radiata pine Amount
and Silky Oak Amount after these amounts
are received by the Responsible Entity.
Carbon Credit Fee: This is the fee payable
in respect of amounts received by the
Responsible Entity in relation to
Carbon Credits.
50% of the net proceeds from dealing in Carbon
Credits. For example, if the net proceeds are
$100,000, the amount withheld by way of a
Carbon Credit Fee would be $50,000. Each
Grower whose Woodlots are referable to the
Pool is allocated a pro-rata proportion of the
Carbon Credit Fee.
The Carbon Credit Fee is deducted from
the net proceeds from dealing in Carbon
Credits following receipt of these proceeds
by the Responsible Entity.
Nil
N/A
Fees When Your Money Moves In or
Out of the Project
Management Costs
Additional Service Fees
Switching Fee: This is the fee for when you
switch between investment options.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
31
10.0 Fees and Costs
continued
10.3 She-oak Amount, Radiata pine Amount and Silky Oak Amount
The She-oak Amount, Radiata Pine Amount and the Silky Oak Amount in respect of a Pool is the aggregate of:
• the proceeds from the harvesting and sale of She-oak biomass, Radiata pine timber and Silky Oak timber on Woodlots referable
to the Pool less any expenses for which the Responsible Entity is entitled to be indemnified under the Constitution but excluding
the Responsible Entity’s own administration costs; and
• if one or more Growers receives one or more payments under an insurance policy in respect of the damage to, or destruction
of, the Grower’s She-oak trees, Radiata pine trees and Silky Oak trees on a Woodlot referable to the Pool, the aggregate
amount of those payments.
Each Grower pays a proportion of the Maintenance Fee, Rent and Marketing Fee based on the proportion of the total number
of Woodlots referable to the Pool which is held by the Grower.
10.4 Carbon Credit Fee
The net proceeds from dealing in Carbon Credits equals the proceeds from dealing in Carbon Credits less any expenses for which
the Responsible Entity is entitled to be indemnified under the Constitution (other than the Responsible Entity’s own administrative
costs and certain liabilities). The Responsible Entity is entitled to 50% of the net proceeds from dealing in Carbon Credits.
10.5 Expenses
The Responsible Entity is entitled to be indemnified out of the assets of the Project for any liability or expense incurred by it in properly
performing or exercising any of its powers or duties in relation to the Project.
10.6 Brokerage/commissions
The Responsible Entity may pay to your adviser out of its own funds, brokerage or commission in relation to your investment in
the Project. The Responsible Entity currently pays brokerage or commission at a rate not exceeding $250 per Woodlot (excluding
GST), payable on acceptance of the Grower’s application as well as providing financial advisers with an allowance for their reasonable
marketing and administrative expenses. It is a requirement of the Corporations Act that a financial adviser discloses to Growers
any commissions and other benefits received in providing financial product advice in respect of the Project.
10.7 Insurance Administration Fee
An Administration Fee of 10% (plus GST) of the amount of the insurance premium or $100 (whichever is the lesser amount) is
charged by the Responsible Entity for the administration of insurance.
10.8 Insurance
Growers will be required to pay a proportion of the premium for the insurance (if any) arranged by the Responsible Entity in respect
of a Pool after the end of seven years from the date a Grower is registered as a holder of the Woodlot in respect of that Pool,
(and any other costs incurred in connection with the insurance) based on the proportion of the total number of Woodlots referable
to the Pool which is held by the Grower. For example, if the premium (plus GST) was 1.15% of the sum insured, the amount
calculated would be as follows:
Assume Sum Insured = $50,000 and there are 10 Woodlots then the cost would be:
$50,000 x 1.15%
= $575
Plus Insurance Administration Fee
= $58
Plus GST at 10%
= $63
Total Fee
= $696
= $633
For further information refer to section 9.7 page 30.
10.9 Payment Default Fee
Under a 12 month interest free loan a Payment Default Fee, currently $110 (including GST), is charged for any monthly payment
which is rejected by the Grower’s nominated financial institution.
10.10 Loan Establishment Fee
An upfront Loan Establishment Fee of $250 or 0.25% (whichever is greater) of the Loan Amount is payable by a CBA approved
borrower. This amount will be included by the CBA as part of the total financed amount, therefore the Loan Establishment Fee
for loan applications made to the CBA under this PDS where the Grower applies for 10 Woodlot will be calculated as follows: for
example $50,000 (excluding GST) x 0.25% = $125. However as this is less than $250, the Loan Establishment Fee will be the
minimum amount of $250. If GST is found to be payable on the Application Price, the Loan Amount will increase by an amount
referable to GST. This fee will be capitalised unless ‘opted-out’ by ticking the respective box in the CBA Loan Application Form.
10.11 Stamp Duty Administration Fee
A Stamp Duty Administration fee of 0.3% of the Loan Amount is payable by a CBA approved borrower. This fee will be capitalised
unless ‘opted-out’ by ticking the respective box in the CBA Loan Application Form.
32
Willmott Forests – Premium Forestry Blend Project 2009 PDS
10.12 Monthly Loan Service Fee
The Monthly Loan Service Fee of $20 per month per loan is charged to the nominated debiting account for all fees and charges
in accordance with the Direct Debit Request Service Agreement.
10.13 Early Repayment Fee
Where a borrower repays in advance any payments that is due and payable under a fixed rate Loan Agreement, the CBA may
credit or debit to you a break fee for any loss of profit incurred as a consequence. This fee is calculated as the difference between
the present value of the cashflows the CBA will receive under the Loan Agreement at the swap rate on the date of funding and the
present value of the cashflows the CBA will receive under the Loan Agreement at the swap rate on the break date. This fee is to
cover the CBA’s funding costs.
10.14 Early Repayment Administration Fee
There will be an additional fee when a Grower repays their loan prior to the scheduled loan payout date, over and above the
applicable Early Repayment Fee as follows:
• Partial repayments of the outstanding principal amount over $1,000 is subject to an administration fee of $300; and
• Full repayments of the outstanding principal amount is subject to an administration fee of $500.
10.15 Taxation
For information as to how the investment in Woodlots will be affected by taxation, please refer to the Taxation Report in section 14
on page 56. GST is not expected to be payable by Growers in respect of supplies under the Project on the basis that the Responsible
Entity is making input taxed financial supplies to Growers. Consequently, no entitlement to an input tax credit will arise to Growers
in respect of the Project. If GST is found to be payable, it is likely that an entitlement to an input tax credit will arise.
10.16 Changes to fees
Management costs (excluding taxes) are not subject to change during the life of your investment.
10.17 Removal of the Responsible Entity
If the Responsible Entity is replaced as the Responsible Entity of the Project (other than in certain circumstances including as a
result of the Responsible Entity’s own fraud, negligence or wilful default), the outgoing Responsible Entity is entitled to an amount
equal to the Rent, Maintenance Fee and Marketing Fee to which it otherwise would have been entitled if the outgoing Responsible
Entity had not been replaced and the trees planted in respect of the Project had been either or both harvested and sold, less any
amount previously paid to an outgoing Responsible Entity.
For this purpose:
• all standing and harvested timber is deemed to have been to have been sold on the date on which the outgoing Responsible
Entity is replaced; and
• the incoming Responsible Entity must appoint an independent valuer to determine or verify the value of the standing and
harvested timber or verify the market value of the standing and harvested timber determined by the incoming Responsible Entity.
The outgoing Responsible Entity must be paid the amount to which it is entitled within three months of the independent valuer
determining the value of the trees.
10.18 Example of annual fees and costs
This table gives you an example of how the fees and costs can affect your investment over a one year period. You should use this
table to compare this product with other managed investment products.
Example
Contribution Fees
Plus Management Costs including:
- Maintenance Fee
- Rent
- Marketing Fee
Equals Cost of Fund
Balance of $50,000 with a contribution of $5,000 during year
N/A
For every additional $5,000 you put in you will be charged $0.
And for every $50,000 you receive from the Project you will be charged $5,000.
4% p.a.
5% p.a.
1% p.a.
If you put in $5,000 during a year and your balance was $50,000 then for that year
you will be charged fees of $5,000. What it costs you will depend on the fees you
negotiate with the Responsible Entity or your financial adviser.
The form of this example is prescribed under the Corporations Regulations.
• Fees in respect of the Project are not paid on an annual basis, but following receipt of the proceeds of harvesting and sale of timber.
• If you made a further contribution during a year (that is, acquired further Woodlots) you would also pay fees in respect of these
Woodlots.
• This does not include the Carbon Credit Fee as this is dependent upon the amount of net proceeds from any dealing in Carbon
Credit (if any) rather than the balance or amount of your investment in the Project.
• You cannot negotiate the amount of the Management Costs with the Responsible Entity.
• This example assumes no GST is payable in respect of a contribution.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
33
Softwood is the timber of choice for most building
applications in Australia.
34
Willmott Forests – Premium Forestry Blend Project 2009 PDS
11.0 Independent Industry Report
Blending mature products with innovation
to capitalise on future markets
Domestic softwood growing and processing industries are
integral to the future building of Australia.
Softwood resources were extensively developed, especially
in south eastern Australia, during the 20th century to provide
long term resource security to the building and forest products’
processing industries. Available supplies of logs from native
forests have been trending down for more than half a century,
and with increasing areas of native forests being placed in
reserves, the trend in falling supplies of native hardwood is
certain to continue. However, the softwood plantation estate
has not developed fast enough to ensure that future supply
can address the rising level of demand for wood products.
As a result, in 2007, Australia is already importing sawn
softwood at the rate of almost a million dollars a day.
New dwellings, renovations and extensions in Australia
predominantly use softwood as the base timber material,
with demand for sawn softwood increasing over the long
term at close to two thirds the annual rise in the gross
domestic product (GDP). This equates to a rise in demand
of approximately 2% per annum over the last 15 years. The
major drivers behind the rise in demand have been continuing
growth in both population and the economy.
In comparison, demand for sawn hardwood has been declining
at approximately 1% per annum.
While the trend in the shortage of softwood sawlogs is now
evident, and imports of sawnwood are a major source of supply,
there are other significant opportunities for growers that can
be blended with the further expansion of the softwood estate.
Australia is part of a global market for timber products, and
has a trade deficit of almost two billion dollars every year.
Historically imports have been predominantly value added
products and exports have been raw resources. However,
this trend has changed in recent times with an increased
export trade in engineered wood products such as medium
density fibreboard.
With the increasing fibre shortage in the developed regions
of North America and Europe, there are opportunities for the
shipment of other value added products, including the export
of wood fuel pellets to meet the roaring demand, especially
in Europe.
There are also opportunities to supply special species, these
being Australian timbers that are not eucalypt or softwood.
Already some plantation managers are working with mahogany
and teak, however, there is greater security in growing Australian
endemic species such as Grevillea robusta (Silky Oak) that
has provided quality sawn timbers for Australian building
and furniture manufacturing for more than a century, and has
good growth potential in sub-tropical and temperate Australia.
A combination of growing timber resources for three strong
markets, being softwood, Casuarina (She-oak) for wood pellets
and Silky Oak as a special species, provides a stronger revenue
stream with mitigated risk.
Softwood
Softwood is the timber of choice for most building applications
in Australia. Architects, builders and tradesmen have been
working with softwood for new dwellings, renovations and
extensions for three to four generations. When sawn and dried
correctly the product is dependable and the performance
characteristics are consistent.
The following points list the advantages of softwood in the
domestic market, and why the majority of builders will continue
to use it as the material of choice:
Consumer preferences
• The performance, appearance and characteristics
of softwood are well understood and are predictable.
• Markets for softwood sawnwood and panels, such as
plywood and particleboard, are mature and supported
by well-established distribution lines.
• Every indication is that future markets for softwood will
continue with the same robust growth.
Market strength
• The long term average rate of growth in demand has been
2.2% per annum, or approximately two thirds the average
rise in GDP.
• The market for softwood is three times the size of the
hardwood market, and is continuing to grow.
• Softwood is the preferred timber material for building
activities across Australia.
Performance
• Softwood, while having the advantage of being a lighter
material than hardwood, has a higher strength to weight
ratio than hardwood.
• The lower density of softwood enables better sawing and
nailing performance.
• The majority of power tools are geared for the performance
of softwood.
Environmental
• Softwood is grown as a plantation resource.
• Plantations are renewable and sustainable.
• The growing of softwood sequesters greenhouse
gases to clean the atmosphere.
Processing
• Softwood can be sawn and dried in a fraction of the
time it takes to process hardwood.
• World scale saw mills of up to one million tonnes per
annum are being constructed in Australia.
• Softwood processing is highly automated, making it
more cost efficient and reducing the time to market.
Preserving
• Softwood responds well to preservation treatments.
• Preservation enables softwood to be used in the provision
of poles for use in agriculture and horticulture.
• Landscape timber supplies, such as bedding sleepers, are
predominantly softwood.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
35
11.0 Independent Industry Report
Regional investment opportunities
Not surprisingly, the states with the highest consumption
of softwood products are the more populous states of New
South Wales and Victoria. Even though New South Wales
is the largest grower of softwood, there is still a need for
the importation from overseas or interstate of 250,000
cubic metres every year of sawn softwood.
Future development of these significant industries will be
dependent on further plantation developments, with Willmott
Forests already undertaking supply contracts to the Visy
paperboard mill at Tumut.
The slight decline in total apparent consumption over the last
two years has been as a consequence of rising interest rates,
however, in the long term the growth in demand is clearly
evident.
Apparent Consumption of Sawn Softwood by State:
1996-2006 (km3)
The following chart shows the long term declining trend in the
development of softwood plantations, and the rising number
of dwelling approvals. While fluctuating interest rates and
other economic factors impact the amount of building activity
between years, there is a clear long term scenario of a
widening gap between limited future log supplies for sawn
timber and the increasing demand for new dwellings and
other building investments.
4,500
4,000
3,500
16
200
180
14
160
12
140
3,000
10
120
8
100
6
80
2,500
2,000
1,500
60
1,000
4
500
2
20
0
0
0
Tasmania
Western Australia
South Australia
Queensland
Victoria
New South Wales
Note: The ACT is included in the figures for New South Wales.
Source: ABARE.
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
40
Year Ended June
Year Ended June
Softwood
Dwellings Approved (RHS Axis)
Source: BRS & ABS.
Victoria is the second largest market, providing a greater
concentration of demand in south eastern Australia.
The final chart has been developed to show the extent of
the widening gap between predicted future softwood supply
based on historical planting rates, and rising rates in demand
at both 1.6% or 3.5% per annum through to 2021. While
the rate of development of new softwood plantations has
declined in the public sector over the last decade, there
has been an increase in investment by companies such
as Willmott Forests in recent years, therefore in the chart
a plantation expansion of 8.0% per annum has been used,
even though this may be optimistic.
The major states on the eastern seaboard account for 90%
of the national softwood imports, therefore for growers with
resources located in this region there is a natural advantage
of proximity to market.
Even with demand growing at the slower rate of 1.6% per
annum, the shortfall in softwood supply will become increasingly
significant, thereby creating strong market opportunities for
growers.
In addition to the increasing shortage in the supply of sawlogs,
there is also a growing deficit in the supply of pulplogs in the
paper and paperboard manufacturing regions of Albury and
Tumut in southern New South Wales close to the Victorian
border.
To grow a valued product such as a softwood sawlog
takes a longer period compared with the standard expectations
for an investment scheme such as fast rotation hardwood
pulplogs. Therefore, through an initiative researched and
proposed by Willmott Forests, a more lucrative option will be
to grow a blend of species to diversify risk and create returns
for the investors before the final harvesting of the softwood
sawlogs. This can be achieved through species selection,
varying harvesting periods for different species, careful selection
If the demand for sawn softwood is regressed against the
growth in GDP for each year over the last decade there is an
income elasticity of 0.6. This means that for every 1.0% rise
in GDP, demand for softwood rises by 0.6%.
36
Dwelling Units Approved ('000)
New Plantings Versus Dwelling Approvals: 1996-2006
Area (kha)
km3
continued
Willmott Forests – Premium Forestry Blend Project 2009 PDS
to ensure products produce material with strong end-use
demand in markets and maintaining good species specific
site selection in different regions for planting.
Since harvesting periods for softwood sawlogs are in the
region of 25 years, then an option will be to include other
species such as She-oak for conversion to wood fuel pellets
and Silky Oak for the supply of quality timber for cabinet
making. The inclusion of She-oak and Silky Oak would
provide returns to the investors over frequent periods
while the softwood sawlogs mature.
An alternative option would be for the sale of the standing
softwood trees after approximately 15 years, at a time when
the development of the trees is well progressed. The semi
mature trees at this age should display good form for the
type of sawlog they will mature into, hence of greater interest
to potential buyers of mature and semi-mature plantations
through secondary markets.
Index (Base 2006 = 100)
Forecasts of Sawn Softwood Demand Against Resource
Availability 2006-2021 Index
170
160
150
140
130
120
John Swaan, Executive Director of the Wood Pellet Association
of Canada, has stated Canada already produces over one
million tonnes of pellets every year and expects to double
the quantity within 18 months.
The use of wood fuel pellets is very significant in North America
and Europe. Access to fossil fuels including coal and oil, is an
increasingly costly undertaking and international agreements,
such as the Kyoto Protocol, required an accounting for the
emission of gases that are considered to cause climate change.
Jackie Jones, editor of ‘Renewable Energy World’, has
written the following.
Compared with wood chip, for example, wood pellets are
a highly sophisticated form of packaged energy. First, their
energy density is about four times that of good quality wood
chip – about 3,100 kWh/m3, meaning that their storage and
transport is considerably easier and more efficient. And unlike
briquettes, the other compacted wood fuel, pellets can be bulk
handled like a liquid, as they are small enough to flow freely.
This means that they can be transported by tanker and
‘pumped’ into storage bins, then fed automatically into boilers.
Typically, wood pellets have a moisture content of only 6%-9%
yielding advantages of increased combustibility, reduced bulk
and weight, and a greatly enhanced ‘shelf-life’. At these levels
of moisture, the fuel is not open to attack by mildew or other
fungal spores, nor will microbial decomposition take place.
Essentially the wood fuel becomes an easily transportable, and
internationally tradeable commodity, which can be used just
as readily in a pellet stove in a living room as in a power plant.
The increasing use of wood pellets in North America and
Europe in power generation plants, as well as for industrial
and home heating, has meant the production of wood fuel
pellets has developed to an industrial scale.
110
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
100
Year Ended June
Demand Growth at 3.5%
Demand Growth at 1.6%
Resource Availability
Source: Calculations by IndustryEdge using data from NPI, ABARE and ABS.
Wood fuel pellets from Casuarina (She-oak)
The Casuarina cunninghamiana (She-oak) has been extensively
harvested in the past around many country towns due to its
high calorific value when burnt. This characteristic of the wood
made it especially suitable for bakers’ ovens, and in modern
times makes the wood exceptionally well suited for the
manufacturing of wood fuel pellets.
The use of bio-mass as an efficient and preferred fuel in Europe
is already significant. The European Union’s environmental
policy commissioner, Stavros Dimas, has stated that 11,500
bio-mass burning or generation units created the equivalent
of 260 million tones of carbon dioxide credits in a year, valued
at five billion Euros. In 2007, the European Union member
nations generated just over 4% of their electricity needs
from biofuels, and they have a target of 10% by 2010.
Production of Wood Fuel Pellets by Country: 2005 (Tones)
Country
Quantity
Sweden
Canada
Russia
US
Denmark
Finland
Austria
Germany
Poland
Estonia
Latvia
Italy
Norway
Lithuania
UK
Netherlands
Slovenia
Spain
France
Switzerland
1,356,000
1,000,000
758,000
600,000
535,000
460,000
409,000
388,000
356,000
345,000
340,000
169,000
138,000
110,000
110,000
100,000
90,000
70,000
62,000
60,000
Source: Bioenergy International 2005 and Wood Pellet Association of Canada 2005.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
37
11.0 Independent Industry Report
The market for wood fuel pellets will continue to grow
significantly in the major markets in the northern hemisphere
since its benefits over fossil fuels are encapsulated in the
three ‘Es’:
Economic – proving to be much cheaper than fossil fuels.
Energy – reduces reliance on fossil fuels and is a highly efficient
heating process.
Environment – reduces greenhouse emissions, both methane
and carbon dioxide, as well as acid rain since biofuels contain
no sulphur. When bio-mass grows it sequesters carbon dioxide,
creating a closed carbon cycle.
In a report written by XCO2 conisbee Ltd, and sponsored by
the Pilkington Energy Efficiency Trust, the following table was
produced:
Carbon Dioxide Emissions by Fuel Type
Fuel Type
Kg CO2 Per GJ
Electricity
115
House Coal
81
Heating Oil
79
Bottled Gas
69
Bulk LPG Delivered
69
Gas (Mains)
54
Wood
7
Note: the CO2 emission of 7 kgCO2/GJ for wood was calculated for the average transport
involved in Europe.
The same report provided the following table showing the
considerably higher efficiency in the combustion of wood
pellets over alternative combustion methods:
continued
other organic material) with coal or other fossil fuels to reduce
the volume of greenhouse gas emissions produced from
non-renewable sources. The total pool of greenhouse gases
is held in balance through cogeneration as gases are taken
in when renewable resources grow.
Wood Pellets – High calorific value with a strong international
market already well established.
Ethanol – There is increasing domestic acceptance of the
viability of ethanol as a fuel additive to reduce reliance on
fossil fuels.
The increasing use (reliance) of biofuels has created a strong
market, and therefore demand, for the appropriate high calorific
material such as Casuarina. An additional advantage of
Casuarina is that it may be continually harvested from the
same plants through the management practice of coppicing
the trees.
Specialty sawn timber from Grevillea robusta
(Silky Oak)
Grevillea robusta (Silky Oak) is a prized timber grown ostensibly
in the sub tropics, while also being grown in its natural state
in the tropical forests in northern Queensland. The medium to
hard timber is pink to brown in colour and has what is referred
to as medullary rays, giving the appearance of oak grain with
a sheen or high lustre.
The timber has been used by cabinet makers, and other
craftsmen, for well over a century, with the ornamental wood
being used especially for cabinet work, furniture, turning,
panelling, plywood and in days gone by, for coach building.
The term Silky Oak has become a common name referring
to other timbers of similar appearance, including the Northern
Silky Oak (Cardwellia sublimis) and some imported timbers,
including some from North America.
Efficiency of Combustion Methods
Combustion
Method
Burning
Efficiency %
Open Fire
10-20
Wood Burning Stove
30-65
Pellet Stove
80-95
The use of biofuels in the future is very real. There is increasing
concern about the continued reliance on fossil fuels as energy
sources, and international agreements such as the Kyoto
Protocol are focussed on limiting the speed of climate
change and supporting efficient use of renewable resources.
There are three opportunities for the growers of biofuels.
These are:
Cogenerations – Green energy (the burning of sustainably
grown wood and other organic material) already attracts
premiums from power consumers, while in Europe significant
emphasis is placed on both voluntary and regulatory raising
of the benchmarks for the production of renewable energy.
Cogeneration is the mixing of renewable combustible material
such as harvesting or sawmilling residues (waste wood or
38
Willmott Forests – Premium Forestry Blend Project 2009 PDS
A report by the Cooperative Research Centre for Tropical
Rainforest Ecology and Management regarding the selection
of trees for farm forestry in the tropics (November 1997)
lists the Northern Silky Oak in the top five species valued
by cabinet makers in Queensland. Research undertaken by
IndustryEdge has found Silky Oak (Grevillea robusta) is still
a timber generating strong demand, but cabinet makers now
find sourcing the sawn material in sufficient volumes increasingly
difficult.
The market for plantation grown Silky Oak will be assured,
even for reasonably small quantities which initially become
available as the plantation resource is built up. A benefit for
Silky Oak growers is that for milling of the prized timber it will
not be necessary to have world scale sawmilling operation,
but rather local and smaller scale mills will be able to process,
and be interested in obtaining, what volumes of Silky Oak
become available.
Silky Oak is a valuable timber species. Historically it has been
used in a number of applications, especially in the top end
of the value chain such as in cabinet making, but very limited
supplies due to the placement of tropical forests in reserves
has created assured opportunities for growers of the species
in plantations.
Future trends
Basing predications on past performance, there will be an
increasing shortfall in available softwood resource to supply
growth in demand for both softwood sawnwood and
woodchips.
Over the last decade, while production of sawn softwood
has increased at an average rate of 5.8% per annum, imports
have declined at 1.8% per annum and apparent consumption
has increased at 3.8% per annum. However, the critical fact is
that the sustainable cut of sawlogs from Australia’s softwood
plantations is calculated to be 9.1mm3 per annum over the
next two decades, but already 9.4mm3 is being harvested
annually. Therefore, when combining the current higher than
sustainable harvesting level, the inadequate levels in the rate
of new planting and a long term increase in demand for sawn
softwood of 2% per annum, then by 2020 imports of sawn
softwood are expected to increase from the current 500,000
tonnes per annum to over 1,500,000 tonnes per annum. The
alternative to increasing imports is to establish new softwood
plantations today to meet the rise in demand in the future.
However, already there are competing markets for timber,
in addition to the mature and well established uses of timber,
there is a trend towards biorefineries, with some already
established in South America and Europe.
Traditional forest industries have been producing wood
products, paper and paperboard and increasingly energy.
However, research is well advanced in the production of textiles,
pharmaceuticals, plastics and food additives from timber as
well. The growing of timber for the supply of the raw material
to these competing markets is expected to attract significant
international investments, as well as the expansion of domestic
resources.
In the softwood sector there is a clear need to increase
plantation resources to meet the strong demand in the future,
however, the rotation periods are considered to be too long
by some researchers and analysts. To compensate for this
challenge, alternative crops can be produced that will generate
returns while the softwood is being grown for harvesting, or
potentially an earlier sale of the standing resource through
secondary markets.
Alternative crops for inclusion will be native exotics, especially
silky oak, which can be harvested as a premium timber for
cabinetmakers, as well as timbers with high calorific values,
such as Casuarina (She-oak) for the generation of energy.
The generation of green energy through the production of
ethanol, as an extract from wood, or the burning of renewable
organic material instead of fossil fuels (cogeneration) will
increase in the future.
Environmental issues are already paramount in managing
climate change, and for the future there is no doubt forestry
companies that take affirmative action to reduce greenhouse
gases, while also producing select construction and landscaping
grade timbers, will be setting, rather than following, the trend.
Conclusion
Future growth in softwood demand, both sawnwood and
pulpwood, is assured with steady increases in GDP and
population.
There has been insufficient expansion of the softwood resource
to meet the future growth in demand. The expected increasing
shortfall in supply of sawnwood will be met by importers and
softwood growers in south eastern Australia. The pulpwood
shortage is likely to further curtail investments by forest
products’ processing industries in south eastern Australia.
Since the time taken to grow softwood sawlogs is longer than
competing investments such as hardwood pulpwood, interim
returns can be generated for growers over shorter periods
through the innovation of growing Silky Oak for select grade
cabinet making timbers, and She-oak for the use in producing
energy either from cogeneration or the manufacturing and
exports of heat pellets, thereby reducing the consumption
of fossil fuels.
Future markets for construction grade timbers, pulpwood
for conversion to paperboard or panels, select grade cabinet
making timbers and fuel efficient timbers have a strong positive
prognosis.
Through innovation, Willmott Forests is positioning itself
to take advantage of these strong and growing markets as
demand for these specific products escalate in the future.
Robert Eastment
Director
IndustryEdge Pty Ltd
Robert Eastment B.Eco, B.Sc (For)
Robert Eastment is a Director of IndustryEdge and is a
professional economist and forester. He has a background in
the corporate finance sector in Australia, as well as Asia and
Europe. He is the editor of the monthly market intelligence
report ‘Pulp & Paper Edge’, the annual ‘Pulp & Paper Edge
Strategic Review’ and the bi-annual ‘Forest & Wood Strategic
Review’. Robert has an intimate knowledge of the
forest, forest products, pulp and paper sectors in Australia
and New Zealand and has contributed to a number of leading
reports and studies on the forest and wood products sectors
in Australia.
Disclaimer
In preparing this report, IndustryEdge has relied on information
given to it by the Australian Bureau of Statistics and the
Australian Bureau of Agriculture and Resource Economics.
IndustryEdge has not independently verified this information.
IndustryEdge has also collected independent information about
the softwood sawlog and pulpwood processing sector. This
independent report contains the opinion of IndustryEdge on the
potential markets for softwood sawlog and pulplog that are or
can be produced by Willmott Forests Limited that form the basis
of this report. Nothing in this report is, or should be relied upon,
as a promise by IndustryEdge the Willmott Forests Project
will perform as indicated nor the markets for softwood sawn
timber and pulpwood will be as predicted. No person may reply
on this independent report for any other purpose or in any other
context. IndustryEdge has not been involved in the preparation
of any other aspect of the Project and is not liable for any other
aspect of the Project.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
39
12.0 Independent Forestry Report
FORSCI
1 June 2008
The Directors
Willmott Forests Ltd
249 Park Street
South Melbourne, Victoria 3205
Dear Sirs,
Introduction
Short rotation bio-energy component
This report (Independent Report) is prepared for the Directors
to provide an independent assessment of the forestry
component of Willmott Forests proposed Premium Forestry
Blend project to be included in the 2009 Product Disclosure
Statement. The report has been prepared by Forsci Pty Ltd
based on information provided by Willmott Forests Limited
together with independent assessments of available information.
Species selection
Australian forest plantations are recognised as important
components of Australia’s long term energy requirements
(see CSIRO report by Fung et al. 2002) and this includes
development of short rotation plantations for pellets and
other products.
The Principals of Forsci Pty Ltd each have more than 40
years experience in forest science both within Australia
and internationally, focusing on the management of forest
plantations. Forsci Pty Ltd undertakes and manages research
projects for Willmott Forests mainly in the areas of site
evaluation, silviculture and nutrition. The Company also
provides technical information on an ongoing basis in these
and related areas. There are no other financial interests
between the Project proponent and Forsci Pty Ltd.
Development of the Project
The project proposal is to invite investment in a mixed forestry
product composed of three species which will provide a stream
of outputs namely, one species for short rotation biofuels, a
general mixed timber product species and a third high value
species producing specialty products. The short term biofuels
product will be produced from either She-oak or Forest Oak
(Casuarina species). The general mixed product species is
Radiata pine (Pinus radiata) which has a long history as a key
component of Australia’s forest industry; while the specialty
species is Silky Oak (Grevillea robusta) which is recognised as
a high value timber from Australia’s subtropics. The species will
be planted in different locations in eastern and south eastern
Australia basically matching them to both their individual site
requirements and markets. For a summary of the proposal,
see the table below:
She-oaks and several species in the genus Casuarina
(C. cunninghamiana, A. littoralis, C. glauca) has been selected
to provide a raw material for producing renewable energy,
fuel pellets and high quality charcoal through harvesting and
coppicing of the crop on a short rotation. Notably, they are
nitrogen-fixing species which is a critical factor in terms of
long term site maintenance in a system where there is regular
harvesting of the crop.
It is a versatile species that naturally occurs adjacent to
freshwater courses and flood plains in eastern Australia,
however, they are regularly planted for shade and fodder
because of their ability to grow in comparatively poor soils.
In the past Casuarinas have been used for tool handles,
ornamental turnery and shingles and is recognised as
excellent fuel woods.
She-oak grows rapidly early and while not routinely used
in plantations in Australia, they have been planted overseas
for fuel wood and local uses. It is recognised that within each
species, there is a wide range of provenances providing very
large potential for increasing productivity and quality.
Site selection for She-oak
The plantations will be regularly harvested and hence one
of the site selection criteria is for relatively flat land for ease
of access and harvest. Site selection criteria include:
• rainfall generally more than 750mm per year;
• relatively flat land;
• no limitation for root development in the top 60cm of soils;
• relatively low sodicity and salinity; and
• a minimum of 100cm to any acid sulphate horizons.
40
Crop
Species
Products
BioEnergy
She-oak
Pellets/Renewable energy
General Mixed
Radiata pine
Pulp medium, High value softwood
Specialty
Silky Oak
High value hardwood
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Product Stream (Years)
3, 5, 7, 9
13, 18, 25
10, 15
Project planning and management for She-oak
General mixed product component
The proposed system for She-oak management involves high
density planting, regular harvesting and site maintenance.
After site approval and appropriate site planning, the system
will involve:
Selection of Radiata pine
Radiata pine will be planted to produce pulp and sawn products
with residues available for biofuels. Forest plantations are
a major industry within Australia with currently more than
1.7 million established hectares of which more than 1 million
hectares is softwood, 75% of which is Radiata pine (Parsons
et al. 2006). Over the last five years, the Radiata pine estate
has increased nationally by about 6,000 hectares per year
and there is a replanting program (replacing one rotation
at the end of the previous rotation) of more than 25,000
hectares each year. In Australia, Radiata pine has one of the
longest histories of planting of a commercial forest species
and there is now a large base of technical knowledge and
extensive experience on all facets of its management. The
application of this accumulation of knowledge leads to
improvements in productivity and value and also significantly
reduces potential risks over the life of the rotation.
• sites to be cleared of residual vegetation;
• soils to be surface cultivated;
• pre-plant spraying to control weeds;
• establishment by planting or direct seeding of
20,000-24,000 plants per hectare;
• spraying for weed control as necessary;
• application of establishment fertiliser, as required;
• first harvest at 3-4 years of age;
• stand regeneration by stump coppice;
• weed control as necessary;
• application of replacement fertiliser, as required; and
• harvesting, weed control and fertiliser applications
to be continued for at least three harvests.
In addition to regular monitoring for growth, insect pest
and nutrient status there will also be monitoring of the area
to ensure the regular harvesting does not impact on the soil
or deplete nutrients.
Growth and products of She-oak
She-oak is to be harvested on short rotations to produce
renewable energy, pellets or charcoal. Yield information from
short rotation plantations is not readily available but available
production data show reasonable estimates of mean annual
increment of aboveground dry biomass peaking at about
12.5 tonne/ha/year at about 3-4 years for C. cunnunghamiana.
Harvesting will be undertaken on a continuous basis between
3 and 4 years of age and based on the increment estimates,
would produce about 35-40 dry tonnes/ha or about 70 green
tonnes of product per hectare. These estimates are based
on research trials, however, because of the short term nature
of the crop, both verification and improvement work can be
achieved in a relatively short period of time.
The reported prices for pellet raw material are about $40-$50
per green tonne at the mill door from current production
facilities and of this, there is an estimated $22/tonne for
harvesting and transport. The option of using the She-oak
for high quality (low ash) charcoal is also being evaluated by
the Company. Such a market would required high product
specification but also have a higher return for the product.
Willmott Forests is planning and undertaking an extensive
research program to further improve its knowledge of this
new plantation species and the results of this will greatly
reduce risks. Currently identified research includes research
into genetics, soil management, silviculture, harvesting and
product utilisation.
Willmott Forests have specifically selected and planted
Radiata pine for more than 25 years. It is demonstrably a
successful softwood species which is extensively planted in
Australia, New Zealand and in a number of South America
countries with smaller areas in countries such as South Africa
and Spain. Radiata pine is a versatile species with high survival
and high growth rates across a wide range of sites and has
wood properties suitable for a number of purposes and it is
relatively easy to improve its properties using tree breeding.
While Radiata pine is found naturally in a limited geographic
area, it has proven to be well adapted to temperate areas
and to be maintaining good and consistent growth rates.
It has been planted over a wide range of climatic regimes
and soil types (Turner et al. 2001, Turner and Lambert
2004). Extensive work has been undertaken to improve the
characteristics of the species through genetic improvement
programs, especially in the last two decades. The work,
undertaken in both Australia and New Zealand, has
successfully increased the growth rates, disease resistance,
tree form and wood quality.
Most Radiata pine plantations are grown on a 25 to 30 year
rotation with intermediate commercial harvests or thinnings
undertaken during this period. Each thinning provides a
financial return and also leads to an improvement in the
growth and value of the remaining crop. The material removed
during the first thinning is usually pulpwood, the raw material
for paper production used in paper products such as
newsprint, cardboard or absorbent papers such as tissue.
The older thinnings and the final crop are used for higher
quality sawn products or veneer together with a proportion
of pulp material. Some steeper, yet high yielding areas, may
not be thinned in favour of growing directly through to final
harvest. There are well established markets and demand for
Radiata pine products both domestically and internationally.
The planting areas selected by Willmott Forests are well
developed plantation regions with existing and well
established markets.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
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12.0 Independent Forestry Report
Site selection for Radiata pine
The combination of climate, soils, topography and the effects
of prior land use are referred to as site or site characteristics.
The success of plantations is dependent on the selection of
sites which have a suitable productive capacity and appropriate
management of those characteristics. Willmott Forests applies
stringent evaluation of environmental, management and
economic factors to potential plantation regions. Potential
sites are categorised within zones within regions to evaluate
the effects of distance for transport of timber to markets.
Each of the regions differ in their environmental characteristics
(such as rainfall, pattern of rainfall, temperature, soils and
landform) and, while all regions used are suitable for plantations,
these differences in characteristics are reflected in the growth,
health and form of the trees.
A number of factors are evaluated when selecting individual
land properties for use for plantation. All land considered for
plantation establishment is either cleared, or predominantly
cleared land or previously harvested plantation land. Criteria
for land selection include:
• average annual rainfall;
• seasonal pattern of rainfall within the region;
• soil parent material (geology);
continued
Independent advice is sought to verify the suitability of the
sites for growing Radiata pine. The information obtained
is evaluated by Willmott Forests to determine the potential
value of the site for the plantation program.
Project planning for Radiata pine
Willmott Forests intends to establish and manage Radiata
pine plantations located in New South Wales and Victoria.
The main objective of establishing these plantations is the
production of sawlogs and pulp to be grown on a rotation
length of approximately 25 years. Regions identified for
plantation establishment at this time are Bombala, Braidwood
and Murray Valley located in New South Wales and the north
east, south west and south Gippsland regions of Victoria.
The main area of planting by Willmot Forests to the present
has been in the Bombala area and about 17,000 hectares
have been established by Willmott Forests on previous
pasture sites. This area adds to the area of about 28,000
hectares which have been established by Forests NSW. A
stated objective is to establish a combined public and private
resource of about 60,000 hectares which will be suitable for
supporting locally based industry and also for export of wood
products through the port of Eden. New plantations have
been established in the Braidwood area, east of Canberra,
where the land is suitable for pine and the products are being
considered for a number of alternative markets.
• soil characteristics including depth;
• topography and drainage;
• existing land use;
• accessibility;
• location in relation to processing operations (markets);
• supportive infrastructure; and
• performance of existing Radiata pine in the immediate area.
Initial estimates of the potential productivity of an area are
undertaken using climatic and site information. The process
of site selection eliminates those areas known to have low
productivity and those difficult to manage. Within the areas
selected for planting, the interaction between climatic and soil
factors leads to a range in productivity and responsiveness
to management practices, and gains can be made from site
specific management. The most productive soils are the well
drained soils derived from basalt parent material; they have
developed into deep, well structured clay loams, however,
productive soils are derived from materials such as granite
and fine grained sediments. The soil differences will affect
such management practices as requirements for fertilizer,
the type of planting stock used, and the location and design
of roads on new plantation sites.
The accessibility and location of the plantation in relation
to the market (mill or port) affects the returns to the Grower,
primarily through effects on harvesting and haulage costs.
Land with a lower productive capacity but in close proximity
to a mill may be acquired and Willmott Forests uses its own
systems to identify potential sites for acquisition for planting.
42
Willmott Forests – Premium Forestry Blend Project 2009 PDS
The other area of establishment has been the Murray Valley
region where approximately 6,000 hectares have been planted
to date. The planting has been undertaken both on previous
pasture sites and on areas previously carrying pine (second
rotation establishment). The total area of publicly and privately
owned plantations in the Murray Valley is in excess of 180,000
hectares (Parsons et al. 2006) and generally includes
plantations east of Tumut, extending south through to smaller
plantations located north of Melbourne plus areas in the north
east of Victoria. The bulk of this plantation area is north of
Albury and is the basis for a wide range of integrated industries
throughout the region. The products generated from Willmott
Forests plantations will be fully compatible with those being
produced from existing plantation in the area.
Further plantation establishment is being undertaken in
Victoria. Willmott Forests has an agreement with Hancock
Victorian Plantations (HVP) to provide access to plantation
land in the north east, south Gippsland and south west
regions of Victoria. The selected land has carried productive
Radiata pine plantations in the first rotation providing a very
good indication of future expected yields and returns within
an established market.
As the Radiata pine component of the Project covers a
number of regions and consequently a number of different
markets and products, harvesting will be timed by the
Manager to obtain the highest value and greatest return to
the Grower. This will mean the timing of harvest and length
of rotation may be varied, with the consent of the Grower,
to obtain the most suitable returns.
Plantation Management for Radiata pine
The Radiata pine management systems may vary between
and within regions reflecting the differences in site types and
previous land use history. The objective in all cases is to use
Best Management Practice and Willmott Forests applies
this to each property through their management planning
systems. The management operations on initially cleared
land based on the full 25 year rotation are as follows:
• plantation planning including identification of areas unsuitable
or unavailable for planting, location of roads, firebreaks
and special requirements. Planning has to comply with
the State’s Codes of Practice and various legislation and
developed guidelines;
• removal of residual vegetation as approved in the planning
application;
• soil preparation to allow moisture retention and rapid root
growth. Ripping, cultivation and/or mounding to a depth
of 60cm;
• spraying with appropriate herbicides to control competing
weeds;
• planting with material that has suitable genetic improvement
and nursery stock type (cuttings or seedlings) at a target
stocking of between 1,100 and 1,500 stems/ha dependent
on site type. One strategy is to use cutting material on
highly improved pastures to minimise stem deformity,
where applicable;
• application of fertiliser, as appropriate, following planting.
Boron fertiliser is applied in most cases, however, other
fertilisers may be applied depending on the particular site;
• follow-up weed control treatments where necessary based
on the results of monitoring;
• early age (age 3-5 years) fertiliser application based on the
results of nutritional monitoring;
• access pruning;
• first commercial thinning of the stands at about 13 years
of age. Timing and intensity of this activity depending on
markets and stand conditions;
• fertiliser applications after thinning on select sites based
on assessment results;
• second commercial thinning of stands at approximately
18 years of age as appropriate. This may not be undertaken
on all sites; and
• clearfall stand after age 25 years, mainly for sawlog
production. The actual timing will depend on markets
and stand conditions.
On sites where plantations are replacing existing plantations
(2R sites), establishment methods will be modified, those
modifications including:
• assessment of logging residues and selection of the
most appropriate treatment. One objective is to maintain
nutrients contained in the logging residues on the site; and
• modified site preparation including spot cultivation where
appropriate.
Productivity of Radiata pine
Potential productivity of Radiata pine has been evaluated
using a number of methods. On second rotation sites, the
productivity of the first rotation was used taking into account
that there have been further improvements in site selections,
in genetics and management techniques. On cleared land,
the productivity of plantations was considered using both the
productivity of established plantations on nearby equivalent
sites and models developed to predict growth based on
climatic and soil factors.
All such assessments are on the proviso that environmental
conditions will be similar to the long term average or those
under which the first rotations grew and if there is a significant
shift, such as drought, the growth estimates will need to
be adjusted.
Many of the existing plantations used to obtain base level
productivity information, have had comparatively low levels
of genetic improvement with minimal management inputs and
hence are often conservative in their previous performance.
The highest average growth rates have been achieved in the
areas with the highest annual rainfall together with deeper,
well drained soils. On a 30 year rotation, these sites have
demonstrated a total mean annual volume increment (MAI)
of more than 20m3/ha/year. With lower rainfall or on poorer,
shallower soils, the productivity levels may be lower. For
example, if the average annual rainfall is about 600mm, the
productivity baseline is expected to be below 15m3/ha/year.
Willmott Forests targets a minimum average rainfall of 650mm.
Such figures are averages and will be affected by longer term
climatic conditions. Extended droughts, such as that experience
in recent years, will significantly reduce overall productivity
while periods of above average rainfall may significantly
increase productivity. The plantations established in the
HVP are second rotation and in the first rotation, productivity
yielded an average in excess of 18m3/ha/year. Land in the
other project areas is mainly pasture sites and productivity
is expected to range from 16 to more than 24m3/ha/year
with the bulk of plantations in the mid range of this.
A number of research trials in eastern Australia have
demonstrated that the base productivity is increased by the
appropriate use of improved genetic material, better nursery
stock, higher nutritional inputs and other forms of intensive
management. In recent years, there have been significant
and ongoing improvements in the available genetic stock
of Radiata pine. All current plantations are established using
improved genetic stock, either as seedlings or cuttings, and
this has produced stands with higher productivity and better
quality. This program of genetic improvement continues and
Willmott Forests has research programs in place to test the
suitability of the genetic material for the range of plantation
areas.
In addition to productivity varying across sites, the actual mix
of products and royalties paid by mills also varies in different
regions. Considering the range of sites and the variation in
potential markets, it is not possible to define a standard
product mix and yield. The pattern of products according
Willmott Forests – Premium Forestry Blend Project 2009 PDS
43
12.0 Independent Forestry Report
to site type is demonstrated in the graph below. The timber
produced from the plantations is suitable for preserved
material, higher quality sawn products, veneer and chip. The
sites with higher productive capacity have a greater range
continued
of potential products. A more detailed outline of potential
product mix for one of the higher productivity forests is
tabulated in the table below.
Under Bark Volume (m3/ha/yr)
Potential Product mixes in Different Productivity Classes
160
140
120
100
80
60
40
20
0
14
16
18
20
22
24
Sawlog 32-45cm
Sawlog >45cm
Productivity Class
Pulp
Preservation
Sawlog <24cm
Sawlog 24-32cm
Generalised pattern of the variation in product mix with changes in site productive capacity. Values are total over-bark production for a product over a
25 year rotation.
Product
13 Years First Thin
Age and Activity
18 Years Second Thin
25 Years Clearfell
Pulpwood
62
30
26
118
Preservation
16
18
Sawlog <24cm
12
35
100
147
Sawlog 24-32cm
30
59
89
Sawlog 32-45cm
27
61
88
63
63
140
309
539
Large sawlog
Total
90
Mean annual increment over
25 years (m3/ha/year)
Total
34
21.6
Potential total production of different product classes (m3/ha) in a higher site quality Radiata pine plantation over a 25 year rotation. The actual product mix
will vary with location and be modified by silvicultural history.
44
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Specialty hardwood species
Selection of Silky Oak
Silky Oak has been selected by BioForests and Willmott
Forests as a high value hardwood plantations species.
While it is a species native to Australia, it is not extensively
commercially planted here, it has however been developed
overseas as a high value plantation species. High value
hardwood plantations are becoming more important as
sources decline from native forests around the world. In the
past this species has been sought as a high value cabinet
timber from native forests (Francis W.D.1951). While extensive
areas of hardwood plantation areas have been established
within Australia (more than 740,000 hectares), the bulk
of these are short rotation hardwood plantations for pulp
products with only very small areas established to meet the
higher value end of the market. Higher value hardwoods are
often imported and these are from declining, non-sustainable
sources.
Project Planning and Management for Silky Oak
The proposed planting areas are to be located within northern
NSW primarily around the Lismore area. The plantation
establishment will be modified according to site characteristics
with the primary aim of producing high value sawlogs. At this
time, the specific markets or mills have not been identified
and hence only generalised products and prices can be
included.
The proposed plantation management systems involve:
• planning of the plantation area according to Departmental
guidelines;
• clearing of residual vegetation;
• ripping to 60cm depth on the contour;
• pre-plant spraying to reduce weed competition;
• planting of seedlings produced from the most suitable
seedlots and provenances at 1,600 stems/ha;
Silky Oak grows naturally in the dry upper reaches of coastal
rivers in northern New South Wales and southern Queensland.
• post-plant spraying as necessary;
It grows well in a number of sites in terms of both rainfall
and soil type (Boland et al. 2006). The species produces a
high quality light coloured timber valuable in panelling, furniture,
joinery and finishing (Walker A 1989). It has been grown
successfully in plantations overseas for many years although
it is usually planted as a roadside tree or specialty planting in
eastern Australia. It grows readily under a wide range of site
conditions and maintains very good form with only limited
damage from pests and diseases. Under suitable conditions,
it will grow as a very good plantations species in monoculture
or mixed plantings.
• non-commercial thinning to approximately 800 stems/ha
at age 4 years;
Site selection for Silky Oak
Silky Oak has been noted as a species which establishes
and grows naturally under a wide range of conditions. Annual
rainfall ranges from 720 to 1,700mm/year and soils include
those derived from alluvium, Basalt and sediments where
there is good drainage. The relationships between productivity
and site conditions have not been fully quantified at this time
and so guidelines for site selection have been based on sites
where the best trees have been noted. This approach is
conservative and will mean potentially suitable areas will not
be used until more research on their potential productivity is
undertaken. Criteria for site selection include:
• sites to receive more than 950mm mean annual rainfall;
• potential planting areas on cleared land (i.e. pasture land);
• texture through the profile of loams, clay loams or light clays;
• well drained soils;
• application of establishment fertiliser;
• pruning of stems to about 2.5 metres at age 4 years;
• pruning of stems to approximately 6 metres from about
age 8 years;
• thinning to approximately 400 stems/ha at age 10 years;
and
• clearfell of planting from approximately 15 years.
There is considerable variation in genetics. In the initial
plantings, improved seed is being obtained from Africa but a
program is being developed to provide high quality seed from
within Australia.
The trees will be regularly monitored and the timing of
operations may be modified to optimise results. Monitoring
will be undertaken for growth, health and nutritional status
and treatments applied as necessary. The actual timing of
thinning and harvesting will be modified according to stand
conditions and markets. The objective of all operations
is to maximise productivity and value.
Growth and products of Silky Oak
No commercial plantations of Silky Oak have been established
or routinely harvested to allow yields to be determined but
conservative yield estimates have been provided by BioForest
from existing plots in the region. They showed that at age
10 years, a yield of about 90m3/ha could be expected with
approximately 220m3/ha harvested at age 15 years.
• rooting depth to at least 70cm;
• absence of sodicity or high salinity in the B horizon; and
• soil pH between 4.5 and 6.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
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12.0 Independent Forestry Report
No pricing information is available for log yields, however,
based on estimates of the value of sawn and dried products
and costs of processing, the Company has advised that log
prices of about $100 to $120/m3 stumpage for early thinnings
and $270 to $290/m3 for clearfell material are realistic. Within
this project, the production aspects of growing Silky Oak
are well understood but the highest risk area due to lack of
information, is the market value of the products and this will
become clearer as the Project develops.
Risks associated with the Project
As with all primary industries, forestry projects have
associated risks which may have direct impacts on returns.
Some risks can be minimised through appropriate management
while others. Such as natural events, are beyond management
control. Some risks may be insured against. The main areas
of risk potentially affecting plantations are outlined below.
continued
Potential losses can be covered through appropriate insurance
available to the Growers.
Frost
Frost is mainly a risk for newly planted seedlings and is
usually in specific topographical situations. Prediction of
impacts is difficult and it is managed by replacement of
affected seedlings.
Wind, snow and hail
Windstorms occasionally affect plantations in southern
Australia leading to blow-down or breakage of trees in
some situations. The most common occurrence is in recently
thinned stands, especially where thinning is undertaken later
than scheduled. Thinnings undertaken on schedule and to
specification reduce the risk of wind throw. Windstorms and
their effects cannot be predicted and no guarantee of safety
from wind damage can be built into forestry projects.
Environmental risks
Climate
Estimates of productivity are based on estimated long term
averages. Long term or short term deviations from these
patterns will impact on survival, growth and health of trees.
While excessive rainfall may cause some inundation or
saturated soils in localised areas, the main impact on
productivity will be a result of less than expected rainfall.
Parts of Australia have been, and still are suffering from
extended drought which has had and will affect growth of
trees if occurring over the plantation. The Willmott Forests
plantations are geographically diverse and this reduces
impacts of such occurrences, however, there will be impacts
which cannot be controlled.
Fire
Fire is a natural component of native forest ecosystems
in Australia. Fires may occur in plantations as a result of
spreading from an adjacent area, lightning strikes or deliberate
or accidental lighting. The greatest concern arises from higher
intensity fires, especially where crowns are directly affected.
A plantation fire protection strategy includes systems to
minimise spread of fire onto plantations (firebreaks) and systems
to suppress fires that have moved into the plantation.
Willmott Forests attempts to reduce risk of fire through
plantation protection measures and has inputs to fire fighting
capacity in regions. The diversity of its plantations requires
a number of strategies including reliance on HVP to protect
plantations under its management and maintaining some
fire fighting capacity in other areas.
Willmott Forests is an Industry Fire Fighting Brigade in its own
right with equipment and trained crews which are integrated
within regional fire fighting networks. The effectiveness of
the approach has proven successful with fires outside of the
Willmott Forests’ estate in recent years. Similar systems are
being developed in other regions including complementary
agreements with other established fire fighting agencies.
46
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Hailstorms occur occasionally in plantations. Damage occurs
through pitting on the stems and damage to buds and growing
points and often there may be infection by fungal disease in
the wounds. The results may be deformity or multiple stems
which, while not killing trees, lead to greatly reduced value.
Hailstorms cannot be predicted or planned for in forestry
projects.
Snowfalls periodically occur in the higher elevation plantations.
Heavy weights of snow may lead to branch damage on larger
trees together with stem breakage in some circumstances.
The major risk occurs in young trees which may be buried
or flattened by drift and while not killed, the stem may be
distorted. Snowstorms nor their effects can be predicted.
Biological risks
Animal damage
Animal damage may occur in plantations, especially in
younger stands. Native animals, such as wallabies, occasionally
damage bark and buds. Some damage may occur from
domestic grazing animals if allowed in the plantations too
early. These effects are generally negligible and grazing animals
can be managed to minimise effects, such as, allowing
animals into an area when trees have reached a minimum
size. Grazing animals are valuable in many plantations as they
reduce grass which competes with growing trees, grazing
can also be an excellent method for reducing fuel levels.
Pests and diseases
Softwood plantations may be affected by a number of pests
and diseases. The diseases include attacks by fungal organisms
such as Dothistroma. Diplodia and Sphaeropsis which are
generally present in all plantations, only causing damage
under specific environmental conditions and/or when trees
are under stress. Plantations impacted by hail may have
associated damage from the fungus Diplodia pinea, leading
to dieback or even death in extreme cases. Other fungi
may cause loss of foliage and minor loss of growth. While
the effects cannot be predicted, monitoring systems and
immediate treatment where appropriate, can reduce impacts.
A number of insect pests cause damage or defoliation, and
in some cases death of pine trees. Attack is often related to
plantations under stress such as drought or other stresses.
Sirex wood wasp has been the greatest problem for the
softwood industry, however, the build up of populations can
be adequately managed through monitoring and biological
control (specifically nematodes) through the cooperative Sirex
fund. Plantations under Willmott Forests management have
to date, not had reports of the presence of Sirex. The aphid,
Essigella, affects Radiata pine plantations in Australia leading
to thinning of crowns and loss in production.
No significant pests or diseases of Silky Oak or She-oak
have been noted at this time but regular monitoring will be
undertaken.
Silvicultural and management risks
The silvicultural risks relate primarily to insufficient or limited
information for management of the Project to achieve the
Project objectives. In the case of Radiata pine, these risks are
low because of the long history of management and research
within the species. The risks are higher with Silky Oak and
She-oak mainly because of the limited experience with
establishment and management of plantations of these species
in Australia. There are risks associated with the estimates of
productivity for Silky Oak and She-oak primarily because of
the limited amount of information available. Willmott Forests
has recognised this and is using the best information available
for the plantings and also is undertaking extensive research to
provide continual improvement and reduce risk. All decisions
at present are based on the most conservative estimates.
Capacity of plantation manager
Willmott Forests has a long history of establishment and
management of plantations in the Bombala area. Management
expertise and a trained labour force have been developed
over the last 25 years and a high proportion of the infrastructure
required for successful plantation management and protection,
exists in this region. Additionally, Willmott Forests utilises the
management skills of HVP for the establishment of Victorian
plantations.
Willmott Forests is developing a strong professional staff to
manage and lead a team in other areas. The forestry industry
overall has developed a strong infrastructure and contractual
support base and Willmott Forests is developing a more
flexible contractual management system to utilise existing
expertise.
Staffing and staff training are constantly being reviewed and
modified to match project requirements. The management
system is a Quality Assurance program certified as complying
with AS/NZS ISO 9001.
Willmott Forests long term plans
Willmott Forests has stated that it plans to be a long term
and key component of the softwood plantation business
in eastern Australia together with additional supporting
industries. At present, it is the main aim of the organisation
to establish new (first rotation) areas of Radiata pine and
the Company plants over 20% of all Radiata pine (first and
second rotation plantations) in Australia. In the Bombala area,
the objective is to maintain planting to establish an overall
regional total (State plus private) of about 60,000 ha. This will
support a sustainable, integrated industry in which Willmott
Forests will be an integral part of forest management and
processing. Such a planting program is dependent on land
availability and other factors but it may take 7-10 years to
achieve a suitable level and Willmott Forests is committed
to this. The expansion into timber processing is part of the
overall commitment to maximising the value of the products
in this region.
In other regions, Willmott Forests will be a component of the
much larger existing softwood industry. Over the next decade
the Company plans to continue developing its resource and
become a significant part of the regional timber industry.
The Company has large interest in wood as a raw material
in a number of integrated industries including energy. The
development of She-oak for pellet production is one component
of this but Willmott Forests also strongly supports Research
and Development in other key ‘wood for energy’ areas.
Expansion into a number of regions provides access to other
variable resources but also reduces the risks to plantations
which may occur by location solely in one region. Such
expansion also allows for diversification into markets.
Project role of Forsci Pty Ltd
Forsci Pty Ltd acts as Advising Forester to the Willmott
Forests Projects. In this role, land proposed for the Project
is inspected and advice is provided on suitability and specific
management requirements. Plantations are inspected and the
results of operations assessed after establishment together
with reporting of outcomes and provision of recommendations
to the Manager. A minimum objective is to undertake
assessments annually. Reports on the progress of the
plantations are forwarded by Willmott Forests management
to each grower on an annual basis.
Qualifications of Forsci Pty Ltd principals
John Turner has 40 years experience in plantation and native
forest research and management in Australia and overseas.
His qualifications include a Bachelor of Science in Forestry
(ANU) and a Doctor of Philosophy (Univ Washington) undertaken
in forest science. His research has covered a number of areas
and he has undertaken extensive research in pine plantations
especially in relation to site, productivity and plantation
Willmott Forests – Premium Forestry Blend Project 2009 PDS
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12.0 Independent Forestry Report
management regimes. He has more than 180 scientific
publications. Professional memberships include the Institute
of Foresters of Australia, the Association of Consulting
Foresters of Australia, the Australian Forest Growers and
the Soil Science Society of Australia Inc. He is a Registered
Professional Forester with the IFA, registered as a professional
in forestry science and research. His experience has been
developed from extensive research in the areas of intensive
forest management which includes site selection, site specific
management, and the maintenance and evaluation of
sustainable long term productivity. In 2005, he was the
recipient of the Scientific Achievement Award from the
International Union of Forest Research Organisations.
Marcia Lambert has more than 40 years experience in forest
science in Australia. She is an expert in chemical analysis
and has extensive research in forest nutrition, nutrient cycling,
forest productivity and environmental impacts. She has an
Associate Diploma and an Honours Science Degree in Applied
Chemistry and an Honours Masters Degree in Environmental
Science. Marcia is a member of the Institute of Foresters of
Australia, the Association of Consulting Foresters of Australia,
the Australian Forest Growers and is a Fellow of the Royal
Australian Chemical Institute. She has produced more than
145 scientific publications and s a Registered Professional
Forester with the IFA, registered as a professional in forestry
science and research.
References
Boland, D.J., Brooker, M.I.H., Chippendale, G.M., Hall, N.,
Hyland, B.P.M., Johnston, R.D., Kleinig, D.A., McDonald,
M.W. and Turner, J.D. (2006). Forest Trees of Australia.
CSIRO Publishing. 736 pp.
Francis, W.D. (1951) Australian Rain-forest trees. Forestry and
Timber Bureau. Commonwealth of Australia. Canberra. 469 pp.
Fung, P.Y.H., Kirschbaum, M.U.F., Raison, R.J. and Stucley,
48
Willmott Forests – Premium Forestry Blend Project 2009 PDS
continued
C. (2002) The potential for bioenergy production from
Australian forests, its contribution to national greenhouse
targets and recent developments in conversion processes,
Biomass and Bioenergy 22:223-236.
Parsons, M., Gavran, M. and Davidson, J. (2006). Australia’s
plantations 2006. Bureau of Rural Sciences, Canberra. 60 pp.
Turner, J. and Lambert, M.J. (2004). Nutrition and sustainability
of plantation sites. pp 25-42. In (Eds. Christian Walter and
Mike Carson) Plantation Forest Biotechnology for the 21st
Century, 2004.
Turner, J., Lambert, M.J., Hopmans, P. and McGrath, J.
(2001). Site variation in Pinus radiata plantations and
implications for site specific management. New Forests 21:
249-282.
Walker, A. (1989). The Encyclopaedia of Wood. Quarto
Publishing, London. 192 pp.
Dr John Turner
Forsci Pty Ltd
Disclaimer
Information in this report, unless otherwise noted, is based
on that provided to Forsci Pty Ltd by Willmott Forests. Whilst this
information has been checked for reasonableness and accuracy,
a range of factors can affect the actual results achieved. Neither
Forsci Pty Ltd, nor its employees responsible for the preparation
of this report, in any way warrant that outcomes outlined in
this report will be achieved, or are attainable, in a commercial
transaction. Forsci Pty Ltd does not accept responsibility for
updating the information contained therein.
13.0 Independent Market Report
11 February 2008
The Directors
Willmott Forests Ltd
249 Park Street
South Melbourne, Victoria 3205
Independent Market Report by URS Forestry
Willmott Forests Premium Forest Blend Project
2009 Product Disclosure Statement
Introduction
This report has been prepared by URS Forestry for inclusion
in the Willmott Forests Premium Forestry Blend – Project 2009
Product Disclosure Statement. Willmott Forests proposes
to offer investors the opportunity to establish plantations in
Australia, and then to sell these plantations (specifically the
softwood plantations within the Blend) at around age 15
years. Accordingly, this report provides an overview of market
factors relevant to the sale of the softwood plantations prior
to final harvesting i.e. the sale of the softwood plantations on
secondary markets.
URS Forestry is part of URS Australia, a subsidiary of URS
Corporation, a professional services company providing
environmental and engineering expertise to businesses and
communities within Australia and around the globe. URS
Corporation is a publicly owned company listed on the New
York Stock Exchange (NYSE: URS). URS Forestry, and its
predecessor companies, has over 30 years experience in
the Australian forestry sector and its consultants have worked
extensively across the forest sector in Australia and the
Asia-Pacific. URS Forestry maintains specialist consultants
that monitor and provide market and economic services for the
forestry sector in Australia, New Zealand and the Asia-Pacific.
This report presents market information relevant to the sale
of softwood plantations at age 15. It first provides an overview
of the development of secondary markets for plantations
internationally and in Australia. This is followed by an examination
of factors influencing secondary markets and the recent history
of transactions in New Zealand and Australia. Market trends
relevant to the value of softwood plantations are also
considered.
It is common to estimate indicative sales value of a plantation
based on discounted cash flows expected to be derived from
the plantation. This generally involves estimating the volumes
of different grades of logs that will be produced from the
plantation over time, forecasting log prices for the different
grades of logs, and estimating costs of managing and harvesting
the plantations to determine projected cash flows over time.
Discounting the net cash flows back to the time of the sale
thus provides an estimated net present value of the plantations.
This method of valuing a plantation is usually only regarded
as suitable once the trees have reached an age sufficient to
provide representative growth information, which for pine
plantations is commonly regarded to be around age 10 and
older. The older the plantation the greater the certainty of its
estimated value, as projections of growth rates and market
prices can be made with greater confidence.
The age at which plantations are sold can also have an influence
on buyer interest. In particular, the motivation of different
investor groups creates a logical pattern of ownership which
matches the needs of individual investors to the different
characteristics of plantation investments over a plantation
rotation. For instance, individual retail investors are more
likely to be attracted to early plantation investments due to
the lower costs and taxation deductions received. Institutional
investors on the other hand, are more likely to be interested
in mid-rotation plantations as this is the stage at which the
asset value increases most rapidly, reflecting the growth in
plantation wood volume. As plantations approach final harvest
there is also an opportunity to sell plantations or harvesting
rights to wood processors, who may want to secure log supply
through a lower risk property arrangement (as opposed to
through higher risk, competitive supply agreements).
Secondary markets for softwood plantations
Secondary markets for plantations refer to the buying and
selling of forest resources throughout the life of a plantation.
They can include the trees and the land, just the trees or simply
the right to harvest and/or manage the trees. Secondary markets
offer investors the opportunity to shorten the length of their
investment thereby increasing the liquidity of softwood
plantation investments.
The remainder of this report examines market factors relevant
to secondary markets for softwood plantations. It first examines
the situation and outlook for softwood plantation secondary
markets. An overview of key influences on domestic softwood
log markets is then provided to identify fundamental market
influences on the value of softwood plantations in secondary
markets.
Like any market the price for plantations sold on secondary
markets is determined by supply and demand factors.
Increasing interest by financial institutions in plantation
investments in Australia has increased demand for secondary
market transactions in recent years. However, the dominance
of publicly owned softwood plantations has tended to limit
the ongoing supply of plantations available for purchase in
Australia.
Development of secondary markets for plantations
Secondary markets for plantations have been expanding
both internationally and domestically. This has been driven
by increasing investment in plantations by financial institutions.
This trend commenced in the USA where a number of
timberland* investment vehicles have emerged over the
last 25 years.
* Timberland in the USA includes natural forests managed under a range of intensities as well
as plantations.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
49
13.0 Independent Market Report
Figure 1. Correlation of Selected Asset Classes
with Inflation
Correlation Coefficient
Traditionally, a large percentage of non-government timberlands
in the USA were owned by large, publicly traded, integrated
forest products companies. Many of these companies looked
to divest forest assets as a strategy to reduce debt and focus
on core activities (e.g. wood product processing) and over the
last two decades a number of investment vehicles developed
to facilitate institutional investment in timberland. This included
timberland investment management organisations (TIMOs)
and Real Estate Investment Trusts (REITs). Some financial
institutions have also directly acquired timberland assets e.g.
the Harvard University Endowment Fund purchased plantations
in New Zealand.
continued
1.0
0.8
0.6
0.4
0.2
0
-0.2
-0.4
TIMOs act as brokers for institutional clients. They find, assess
and acquire investment properties that would best suit their
clients, and then actively manage the timberland to achieve
adequate returns for the investors. A REIT is a publicly listed
company that sells stock on the major exchanges and invests
in real estate directly, either through properties or mortgages.
-0.6
-0.8
• providing a hedge against inflation returns from timberland
assets have a positive correlation with inflation suggesting
that timberland assets have acted to preserve capital
during inflationary periods (Figure 1);
• exhibiting counter cyclical returns timberland demonstrates
a weak correlation with returns from other major asset
classes and a negative correlation with real estate
(Figure 2); and
• providing the ability to warehouse the asset – timberland
offers the option to match timber harvesting with market
conditions.
NCREIF Timberland Index
NCREIF Real Estate Index
NAREIT
S&P Paper/Forest
S&P 500
Russell 2000
MSCIEAFE (Int'l)
Source: Campbell Group.
Figure 2. Correlation of Timberland Returns with Returns
from Other Asset Classes
Correlation Coefficient
Financial institutions have been attracted to forest investment
because of the characteristics they offer as an asset class.
These include:
LB Corporate Bonds
There are around 18 TIMOs in the USA. In 1996 only five
of these companies existed and seven TIMOs have formed
since 2003. Assets under management in TIMOs were
valued at under $US4 billion at the end of 1996 and grew
to $US17.4 billion in June 2006. This grew further to around
$US24 billion in assets under management following the
sale of 1.7 million ha of timberland by the International Paper
Company. In the USA, approximately 100 pension funds have
invested in timberland however the asset class represents
less than 1% of pension fund assets.
Goldman Sachs Commodity
US Treasury Bill (90 Day)
-1.0
0.20
0.15
0.10
0.05
0
-0.05
50
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Source: Campbell Group.
US Small Cap Stocks
Commercial Real Estate
US Long Bonds
US Large Cap Stocks
Foreign Large Cap Stocks
Treasury Bills
-0.10
Evidence from the USA is that timberland provides competitive
returns. The National Council of Real Estate Investment
Fiduciaries (NCREIF), which publishes a USA timberland
returns index, estimates an average annualised return from
timberland investments of 14.7% since 1987. Figure 3 shows
that USA timberland has performed strongly compared to
other investments, outperforming stocks, long term corporate
bonds and commercial real estate. Timberland has also
delivered competitive levels of volatility demonstrated in the
relatively low standard deviation of returns compared with
other investments (Figure 4 – standard deviation is a measure
of how widely values are dispersed from the average value).
Annual Return (%)
Figure 3. Average Annual Returns from Asset Classes
in the USA (1987-2006)
14
12
10
8
The rapid growth of timberland investment in the USA together
with increasing availability of institutional funds for forestry has
led to increasing interest by timberland investment vehicles.
particularly TIMOs, in offshore investments. The availability
of softwood plantations in Australia and New Zealand has
attracted the interest of TIMOs and other investors and has led
to increasing secondary trade in plantations in both countries.
New Zealand
There has been extensive trading of softwood plantation
assets in New Zealand which has been associated with the
privatisation of government owned plantation resources. In
the initial privatisation the major purchasers were integrated
forest companies such as Fletcher Challenge, Carter Holt
Harvey (CHH) and Weyerhaeuser.
6
4
2
US Large Cap Stocks
Timberland Index
US Small Cap Stocks
Foreign Large Cap Stocks
Commercial Real Estate
US Long Bonds
Treasury Bills
0
Source: RMK Timberland Group.
In recent years a number of these integrated forest owners
have on-sold large areas of timberland for a variety of reasons.
Over the last few years over a third of New Zealand’s
commercial forests have changed hands. TIMOs have been
significant purchasers of these forests and now own about
25% of the country’s plantations. Direct institutional investors,
such as the Harvard University Endowment Fund, and
REITs such as Rayonier, have also purchased large areas of
timberland in New Zealand. As a result, plantation ownership
in New Zealand has changed from over 50% state ownership
to around 3% and forestry ownership is now dominated by
public and private companies who own 92% of resources.
Recent major investment activity in New Zealand has included:
25
• Global Forest Partners (GFP), a TIMO, purchased
Weyerhaeuser’s share of its joint venture Nelson Forest
Products Company which included 67,000ha of plantations
in the Nelson Marlborough areas;
• Carter Holt Harvey (CHH) sold the balance of its plantations,
around 200,000ha, to Hancock Timber Resource Group
(HTRG) in 2006. Prior to this CHH had sold 93,000ha
of its ‘non-core’ plantations to a consortium comprising
Rayonier and a fund managed by Deutsche Asset
Management. Subsequent to the purchase a 35% share
has been on-sold to AMP Capital Investors;
20
15
10
5
Source: RMK Timberland Group.
US Small Cap Stocks
Foreign Large Cap Stocks
US Large Cap Stocks
Timberland Index
US Long Bonds
Commercial Real Estate
0
Treasury Bills
Standard Deviation of Returns
Figure 4. Average Standard Deviation of Returns from
Asset Classes in the USA (1987-2006)
• Harvard University Endowment Fund purchased the
165,000ha Kaingaroa Forest in the Central North Island
in 2004 from a consortium comprising Fletcher Challenge
Forests, the Chinese government enterprise CITIC, and
Brierley Investments. The consortium had originally purchased
the plantations from the New Zealand government in 1996;
• in 2004 Fletcher Challenge Forests sold its 108,000ha
of forests in the Central North Island to Kiwi Forest Group
(a group of New Zealand businessman) who then on-sold
the forestry rights for the existing tree crop only to two
US-based fund managers Prudential Timber and HTRG,
whilst retaining the land assets. In 2005 HTRG purchased
Prudential Timber and so effectively gained control of the
majority of what was Fletcher’s estate;
Willmott Forests – Premium Forestry Blend Project 2009 PDS
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13.0 Independent Market Report
• Evergreen Forests sold its 21,000ha of forests in 2005
in two parcels plantations on the east coast were sold
to James Fielding Fund Management, through its New
Zealand Sustainable Investment Fund, with the remaining
assets sold to the New Zealand Superannuation Fund; and
• in late 2005 HTRG agreed to purchase the cutting rights to
approximately 5,700ha of plantations in Tahorakuri Forest
from the CNI Timber Operating Company Ltd (owned by
a fund managed by GFP). This forest had been purchased
from Fletcher Challenge Forests in 2003.
Australia
Interest from institutional investors in Australian timberland
assets has expanded rapidly since the 1990s, reflecting the
expansion of mostly USA based TIMOs and resulting in several
large transactions over this period. The most significant
transaction of plantation assets to date was the sale of the
Victorian government’s 165,000ha softwood plantation estate
to Hancock Victorian Plantations (HVP) in 1998 for $AU550
million. In 2001 HVP purchased the Australian Paper
plantation estate of 55,000ha for $AU152 million. HVP
is owned by HTRG (a TIMO) and a number of Australian
investors including the superannuation fund UniSuper.
The development of privately owned hardwood pulpwood
plantations in Australia and privatisation of some major publicly
owned softwood plantation estates has led to a significant
increase in private ownership of plantations in Australia. The
National Plantation Inventory (NPI) estimates that private
ownership now accounts for around 65% of plantations
in Australia (NPI 2007).
Information on returns from the secondary market purchase
of forestry assets in Australia and New Zealand suggests
returns of between 8-11% per annum can be expected
from plantations. For instance, in September 2007 Hastings
Hancock International Timberland (HHIT) reported returns
of 11.43% per annum since the fund’s inception on the
plantations they acquired in Victoria (HVP) and New Zealand
(Tiaki). HHIT is a strategic alliance between Hastings Fund
Management and HTRG, which is responsible for marketing
Hancock timberland investment funds to Australian and
New Zealand investors. This level of return is also consistent
with URS Forestry’s estimates of implied discount rates for
recent secondary market plantation trades in New Zealand.
Other domestic institutional investments in plantations include:
It is likely that the strong interest in secondary market
plantation investments in Australia will continue. Factors
that are likely to influence demand in the future include:
• in 1999, GMO Renewable Resources (a TIMO) purchased
around 50% of Forestry Tasmania’s 42,000ha softwood
estate, establishing a joint venture called Taswood.
Rayonier (a REIT) was contracted to manage the Taswood
estate;
• increasing private ownership of plantations in Australia
the expansion of private investment in new plantation
establishment and the potential for further privatisation
of state owned plantations in Australia is expected to
lead to more secondary market plantation transactions;
• GFP also own plantation resources in Australia through its
joint venture with Weyerhaeuser in Green Triangle Forest
Products (GTFP). GTFP acquired CSR’s plantations,
sawmilling and remanufacturing business in the Green
Triangle in 1999; and
• expanding presence of TIMOs growth in the number of
TIMOs in the USA and their expanding interest in new
plantation establishment in countries outside of the USA
suggests that the interests of TIMOs in plantation estates
in Australia will continue to grow. The stable political
environment in Australia is an attraction to TIMOs as
well as institutional investors;
• Australian Newsprint Mills (ANM) established softwood
plantations in north east Victoria and later sold them to
Norske Skog when they purchased ANM in 2000. These
plantations are now owned by GFP, who also acquired a
number of privately owned softwood plantations in the
Murray Valley and Bathurst/Oberon regions.
Industrial investors have also been active in buying plantations
in Australia over this period. Major trades by industrial investors
have included:
• Gunns’ purchase of the previous North Forest Products
plantation estate around 28,000ha of industrial hardwood
pulpwood;
• Marubeni’s purchase of around 14,000ha of hardwood
pulpwood plantations owned by WA Plantation Resources;
and
• Weyerhaeuser’s acquisition of half of the ex-CSR long
rotation softwood plantations in the Green Triangle with
GFP (see above).
52
continued
Willmott Forests – Premium Forestry Blend Project 2009 PDS
• increasing interest from institutional investors – over the
last decade financial institutions have demonstrated an
increasing willingness to include plantations as part of
their investment portfolios (as already noted plantations
demonstrate attractive investment characteristics). Such
investments can be via TIMOs. REITs or through direct
investment (as in the case of the Harvard University
Endowment Fund in New Zealand). General market
conditions, increasing private ownership and more
transparent log markets are all expected to contribute
to expanding institutional investment interest in coming
years; and
• constrained volumes from existing plantations limits to
additional volumes of logs available from existing plantations
over the next 25 years are expected to add to the
attractiveness of plantation investment in Australia.
The lack of plantations available for sale is currently a constraint
on the number of secondary market transactions of plantations
in Australia. With strong demand and limited supply it could
be expected that the prices paid for plantations traded on
secondary markets will be strong.
timber from Australia also have been growing rapidly in recent
years, particularly in response to demand from Taiwan, China
and Vietnam (Figure 6). These markets are likely to present
strong ongoing sources of demand for Australian sawn timber
exports.
Market factors relevant to plantation returns
The demand for softwood pulpwood is derived from demand
for pulp and paper, composite wood products and woodchip
exports. The consumption of papers that primarily utilise
softwood has been growing steadily in Australia with tissue
increasing at an average rate of 3% per annum since the
mid-1980s packaging by 2%, while newsprint has remained
relatively steady. Consumption of MDF has been growing at
average rate of 4.4% per annum and particleboard 1.7% per
annum over the same period. Australia is the major supplier
of softwood chip export to Japan and export volumes have
been increasing over the last decade. While Japanese imports
of softwood chips have declined since 1995 from around
3.5 million tonnes to 2.5 million tonnes per annum Australia’s
share of that market has increased from 23% in 1995 to 42%
in 2006.
As already noted a key influence on the value of a plantation
is the income generated by sales of pulpwood and sawlogs.
For long rotation softwood plantation investments most
income is generated on final harvest, usually around 25-30
years from planting. Some income is also generated over the
life of the plantation through thinning operations which remove
some trees to enhance the growth of those remaining.
Log prices reflect underlying supply and demand conditions.
The demand for softwood sawlogs in Australia is driven
primarily by demand for softwood sawn timber for use in
house framing. As is well known the housing market moves
in cycles and these are reflected in timber market conditions
and prices. However, over the last three decades the
consumption of softwood timber has grown steadily as
it has replaced hardwood, particularly in the house framing
market (Figure 5).
Figure 5. Apparent Consumption of Softwood Sawn
Figure 6. Exports of Softwood Sawn Timber from Australia
140,000
5,000
120,000
100,000
4,000
80,000
3,000
60,000
Number of Commencements
6,000
350
300
250
200
150
100
2,000
40,000
1,000
50
20,000
Taiwan
China
Thailand
United Arab Emirates
Total ST Apparent Consumption
Other
Vietnam
Softwood ST Apparent Consumption
Malaysia
Hardwood ST Apparent Consumption
Housing Commencements
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
0
1996
0
1995
0
1972-1973
1974-1975
1976-1977
1978-1979
1980-1981
1982-1983
1984-1985
1986-1987
1988-1989
1990-1991
1992-1993
1994-1995
1996-1997
1998-1999
2000-2001
2002-2003
2004-2005
2006-2007
'000m3
Timber in Australia
'000m3
Demand for softwood sawlogs is also derived from demand
for plywood and laminated veneer lumber (LVL) as well as
timber exports. Demand for plywood and LVL has been
growing rapidly in Australia (plywood at an average rate of
around 3% per annum since 1990/00 and LVL at an average
rate of around 18% per annum). Exports of softwood sawn
On the supply side, forecasts by the National Plantation
Inventory (NPI) indicate that the increase in softwood sawlog
harvest volumes will slow with only relatively small increases
in resources available over the next 25 years. Combined with
high levels of commitments to existing processors this suggests
that resource availability will constrain potential expansion of
domestic softwood timber processing and opens opportunities
for new plantation investments to meet resource needs in
the future.
Note: The 2007 provisional figure for 2007 is based on year to date volumes.
Source: GTIS (2007).
Source: ABARE (2007).
Willmott Forests – Premium Forestry Blend Project 2009 PDS
53
13.0 Independent Market Report
$/m3 (June 2007 Prices)
Figure 7. Australian Pine Log Price Index (Real Price)
continued
Table 1 : Summary of indicative prevailing softwood log
stumpage prices in Australia
110
100
90
Log type
APLPI Weighted average ($A)
(January-June 2007)
80
Small sawlog (<24cm sed)
$34.89 per m3
Intermediate sawlog (24 to <32cm sed)
$46.06 per m3
50
Medium sawlog (32 to <45cm sed)
$64.33 per m3
40
Large sawlog (>45cm sed)
$79.21 per m3
30
Pulp logs
$10.66 per m3
20
Preservation logs
$22.09 per m3
10
Source: APLPI (2007), URS Forestry estimates.
70
60
Small Saw Log
Large Saw Log
Intermediate Saw Log
Pulp Log
June 2007
June 2006
June 2005
June 2004
June 2003
June 2002
June 2001
June 2000
June 1999
June 1998
June 1997
June 1996
June 1995
0
Medium Saw Log
Source: APLPI (2007).
The Australian Pine Log Price Index (APLPI) which provides
the most comprehensive data available for Australian
softwood sawlog stumpage prices, shows that softwood
stumpage prices generally have declined in real terms over
the last decade (Figure 7). These price movements reflect
the market situation whereby volumes of softwood sawlogs
available for harvest have been increasing and softwood has
been increasing its share of the sawn timber market. While
prices will vary with market cycles, it is generally expected
that tighter supply conditions over the next 25-30 years
combined with ongoing increases in consumption will have
positive impacts on log prices.
Prevailing prices
Table 1 provides a picture of prevailing softwood log stumpage
prices in Australia. It provides the weighted average of prices
for domestic sales of sawlogs of various sizes, preservation
logs and pulp logs reported in the Australian Pine Log Price
Index (APLPI) for the six months ending June 2007. These
are the latest data available at the time of writing.
54
Willmott Forests – Premium Forestry Blend Project 2009 PDS
It should be noted that particular transaction prices can vary
substantially depending on a range factors. These factors
typically include contractual arrangements, levels of competition,
harvest costs, transport costs, and proximity and scale of the
resource relevant to the location of processing mills.
Conclusion
In summary, a number of factors suggest that secondary
markets for plantations will continue to develop for plantations
in Australia, with the potential for strong demand for softwood
plantations offered for sale:
• increasing interest by TIMOs and other institutional investors
in Australia the attractions of timberland in investment
portfolios together with increasing growth of TIMOs will
ensure there is ongoing interest in secondary markets for
timberland investment;
• domestic resource constraints limited ability to expand
current softwood plantation harvests in Australia will ensure
strong competition for plantations offered for sale; and
• expansion of private ownership of plantation resources
in Australia increasing private ownership of plantations in
Australia is likely to lead to greater activity in secondary
markets. This may include the potential privatisation of
existing publicly owned plantation resources.
Limitations
URS Australia Pty Ltd (URS) has prepared this report for the
use of Willmott Forests Limited in accordance with the usual
care and thoroughness of the consulting profession. It is based
on generally accepted practices and standards at the time
it was prepared. No other warranty, expressed or implied, is
made as to the professional advice included in this report. It
is prepared in accordance with the scope of work and for the
purpose outlined in the contract between URS and Willmott
Forests Limited dated 15 November 2007.
The methodology adopted and sources of information
used by URS are outlined in this report. URS has made no
independent verification of this information beyond the agreed
scope of works and URS assumes no responsibility for any
inaccuracies or omissions. No indications were found during
our investigations that information contained in this report as
provided to URS was false.
This report was prepared between 15 November 2007 and
20 December 2007 and is based on the information available
at the time of preparation. To the maximum extent permitted
by law, and subject to any statutory obligation of URS.
URS disclaims responsibility for any changes that may have
occurred after this time.
This report should be read in full. No responsibility is accepted
for use of any part of this report in any other context or for
any other purpose or by third parties. This report does not
purport to give legal advice. Legal advice can only be given
by qualified legal practitioners.
This report does not and should not be interpreted as giving
financial product advice within the meaning of section 766B
of the Corporations Act 2001 or section 12BAB of the
Australian Securities and Investment Commission Act 2001.
This report is not intended to influence the reader in making
a decision in relation to the financial product offered under the
Product Disclosure Statement (PDS). Financial product advice
can only be given by advisers holding an Australian Financial
Services Licence. URS is not operating under an Australian
Financial Services Licence in providing this report.
In accordance with regulation 7.6.01(u) of the Corporations
Regulations 2001, URS makes the following disclosures:
• URS has been retained by Willmott Forests Limited to provide
a market report for inclusion in the Willmott Forests Premium
Forestry Blend Project 2009 Product Disclosure Statement;
• URS anticipates that further engagements in relation to the
provision of forestry consultancy advice may be entered
into with Willmott Forests Limited on an as required basis;
and
• URS does not make any direct investment in Willmott
Forests Limited or the business interests of Willmott
Forests Limited, and has no commercial interests in the
financial products being offered other than as a service
provider to Willmott Forests Limited.
URS Forestry
References
ABARE (2005), Australian Forest and Wood Product Statistics;
March-June Quarters 2005, Australian Bureau of Agriculture and
Resource Economics (ABARE), Canberra, Australia.
APLPI (2007). Australian Pine Log Price Index,
Report prepared by KPMG for selected pine growers. (see
http://www.kpmg.com.au/Default.aspx?TabID=735&KPMGArticleI
temID=1346)
Campbell Group (2007), http://www.campbellgroup.com
GTIS (2007), Global Trade Atlas, Global Trade Information
Services (GTIS). http://www.gtis.com
Industryedge (2007), Pulp and Paper Edge Strategic Review
2007, Industryedge, Hobart, Australia.
MAF (2007) Forestry Trade Statistics, Ministry of Agriculture
and Forestry (MAF), Wellington, New Zealand.
Ref:http://www.maf.govt.nz/statistics/primaryindustries/forestry/
trade/index.htm
NCREIF. Timberland Index. National Council of Real Estate
Investment Fiduciaries. http://www.ncreif.org
RMK Timberland. http://www.rmktimberland.com
Willmott Forests – Premium Forestry Blend Project 2009 PDS
55
14.0 Independent Taxation Report
28 July 2008
The Directors
Willmott Forests Ltd
249 Park Street
South Melbourne, Victoria 3205
Dear Sirs,
Willmott Forests Premium Forestry Blend Project
2009 Product Disclosure Statement
Following is our Independent Tax Consultant Opinion (“the
Report”) setting out the Income Tax and Goods and Services
Tax (“GST”) consequences for investors (“Growers”) investing
in Willmott Forests Limited’s (“the Manager”) Willmott Forest
Premium Forestry Blend Project – 2009 Product Disclosure
Statement (“the Project”).
The following opinion is based upon the Income Tax
Assessment Act 1936 (“ITAA 1936”), the Income Tax
Assessment Act 1997 (“ITAA 1997”), and the A New Tax
System (Goods and Services Tax) Act 1999 (“GST Act”)
in their current form.
KPMG’s Tax practice is not licensed to provide financial
product advice under the Corporations Act and taxation is
only one of the matters that must be considered when making
a decision on a financial product. Growers should consider
taking advice from an Australian Financial Services Licence
holder before making any decision on a financial product.
Executive summary
Subject to the comments and exclusions discussed below,
the following is a brief summary of the general taxation
implications for Growers who invest in the Project:
• the initial application fee of $5,000 per Woodlot payable
by the Growers under the Land Sourcing and Forestry
Management Agreement and the fees payable under the
Constitution will be deductible under section 394-10 of the
ITAA 1997 when paid. The deductibility is not restricted
by the various prepayment provisions;
• interest incurred on amounts borrowed from Commonwealth
Bank of Australia (“CBA”) will be deductible when incurred
under section 8-1 of the ITAA 1997;
• the Loan Application Fee and Stamp Duty payable under
the finance facility provided by the CBA will be spread over
the period of the loan, or over five years (whichever is the
shorter period) under section 25-25 of the ITAA 1997;
• where a Grower disposes of their Woodlots after having
claimed a tax deduction for the initial application fee and/
or fees payable under the Constitution:
- the Growers’ assessable income for the income year of
disposal will include the market value of the Woodlots;
- tax deductions claimed by a Grower in respect of the
Project will be denied if the Grower sells its interest in
Woodlots under the Project within four years after the
end of the income year in which the Grower first paid
an amount under the scheme;
56
Willmott Forests – Premium Forestry Blend Project 2009 PDS
• the tax treatment of an amount received by a Grower in
respect of the sale of Carbon Sequestration Rights is unclear
at this stage. We note that the new Federal Government
has committed to a National Emissions Trading Scheme
which is likely to commence operation in 2010. However,
the tax implications of amounts paid or received under
such a scheme have not yet been determined;
• division 394 is designed to allow secondary market trading
in forestry interests, such as Woodlots. Where a subsequent
participant acquires an interest in Woodlots, the amount
paid to acquire the Woodlots is not immediately deductible;
• the non-commercial loss rules will not apply to Growers
obtaining a tax deduction under Division 394 of the ITAA
1997 as those rules only apply to business related losses;
• growers will ordinarily not be carrying on an agricultural
enterprise for GST purposes. Contributions made by the
Growers to the Manager are consideration for an input
taxed financial supply, being an interest in the Project. As
such, Growers will not be entitled to input tax credits on
costs incurred in relation to the Project. This is based on
the Australian Taxation Office’s (“ATO”) preliminary, though
considered view outlined in GSTR 2008/D1 as at the
date of this Opinion. However, the ATO’s position will
not be finalised until the outcome of a test case regarding
agricultural managed investment schemes is known. It is
expected that this test case will not be resolved prior to
31 December 2008; and
• part IVA of the ITAA 1936 should not apply to deny
deductions available to Growers provided the Project is
operated in the manner described in the PDS and the
Growers enter into the Project with the dominant
commercial purpose of making a profit.
1. Background
This Report has been prepared for inclusion in a Product
Disclosure Statement to be dated 20 August 2008
(“the PDS”) to be issued by the Manager.
Under the Project, Growers are issued Woodlots (through
executing the Land Tenure Agreements) and appoint the
Manager to conduct all necessary plantation forestry activities
on their behalf (through executing a Land Sourcing and
Forestry Management Agreement).
Each Woodlot carries the rights to conduct plantation forestry
activities on specific areas of land on which a minimum
number of seedlings of the relevant species will be planted.
Growers who invest in the Project during a particular financial
year form part of the Pool referable to that financial year.
Growers whose Woodlots are referable to a Pool, share
in the proceeds from the sale of timber planted in that
Pool on a pro rata basis.
For further information in respect of the project, refer to the
Investment Summary on page 3 of the PDS.
Our advice is based solely on the information provided by
the Manager and based on the assumption that the Project
will be carried out in the manner described.
2. Tax deductibility of initial application fee and
fees payable by Growers under the Constitution
The deductibility of amounts paid in respect of a forestry
interest under a forestry managed investment scheme is
determined by Division 394 of the ITAA 1997.
Under subsection 394-10(1) of the ITAA 1997, a Grower can
deduct an amount if the following conditions are satisfied:
(a) the grower holds a forestry interest in a forestry managed
investment scheme; and
(b) the grower pays an amount under the scheme; and
(c) the scheme satisfies the 70% Direct Forestry Expenditure
(“DFE”) rule (defined in subsection 394-35(1) of the ITAA
1997) on 30 June in the income year in which the Grower
in the scheme first pays an amount under the scheme; and
(d) the Grower does not have day to day control over the
operation of the scheme; and
(e) either there is more than one participant in the scheme, or
the forestry manager of the scheme, or an associate of the
forestry manager, manages, arranges or promotes similar
schemes.
In our opinion, the requirements of section 394-10(1) of
the ITAA 1997 above are satisfied in respect of a Growers
participation in the Project. A payment for the purposes
of Division 394 of the ITAA 1997 includes payment made
on behalf of the Grower.
A further requirement of Division 394 of the ITAA 1997 is that
the trees intended to be established in accordance with the
scheme, have all been established before 18 months have
elapsed since the end of the income year in which an amount
is first paid under the forestry managed investment scheme
by a participant in the scheme.
Growers will be required to pay a proportion of the premium
for the insurance (if any) arranged by the Manager in respect
of a Pool after the end of seven years from the date a Grower
is registered as a holder of the Woodlot in respect of that
Pool, based on the proportion of the total number of Woodlots
referable to the Pool which is held by the Grower.
Insurance amounts paid by a Grower under the Project will
be deductible in the year in which they are incurred.
3. Application of the prepayment rules
The prepayment provisions contained in Subdivision H of
Division 3 of Part III of the ITAA 1936 affect the timing of
deductions for certain prepaid expenditure. These provisions
apply to certain expenditure incurred under an agreement
in return for the doing of a thing under the agreement (for
example, the performance of management services or the
leasing of land) that will not be wholly done within the same
year of income as the year in which the expenditure is paid.
If expenditure is paid to cover the provision of services to
be provided within the same income year, then it is not
expenditure to which the prepayment rules apply.
Where the conditions of section 394-10 of the ITAA 1997
are satisfied, the Growers are entitled to a deduction under
Division 394 of the ITAA 1997. The effect of satisfying
the conditions of Division 394 of the ITAA 1997 is that
the prepayment rules have no effect, and the entire initial
application fee of $5,000 per Woodlot will be deductible
when paid (subsection 394-10(2) of the ITAA 1997).
This is confirmed in paragraph 46 of Product Ruling
PR 2008/60.
We have been advised that this condition will be satisfied.
Consequently, all applicable requirements will be met and
each Grower will be entitled to a tax deduction for both
the initial application fee of $5,000, and the fees payable
in respect of maintenance, land rental and marketing.
However, sections 82KZME and 82KZMF of the ITAA 1936
may have relevance if a Grower in this Project choses, or is
required to prepay interest under a loan agreement (including
loan agreements with lenders other than CBA). As stated
above, prepayments of interest are not covered by this
Report and Growers who make such prepayments should
instead request a private binding ruling confirming the tax
consequences of the prepaid interest.
This is confirmed in paragraph 122 of Product Ruling
PR 2008/60.
4.Tax deductibility of interest incurred on
amounts borrowed and loan application fee
Under Division 394 of the ITAA 1997, the initial application
fee of $5,000 and the fees payable in respect of maintenance,
land rental and marketing are deductible when paid, and are
not subject to the prepayment rules contained in Subdivision
H of Division 3 of Part III of the ITAA 1936.
This is confirmed in paragraph 136 of Product Ruling
PR 2008/60.
However, a Grower cannot deduct an amount under Division
394 of the ITAA 1997 if a Capital Gains Tax (“CGT”) Event
happens in relation to its interest in Woodlots within four
years from the end of the income year in which the Grower
first paid an amount under the Project.
Amounts borrowed from CBA
We understand that some Growers may finance their
participation in the Project through a Loan Agreement with CBA.
Where the interest incurred in respect of such financing is
paid under a Loan Agreement to finance the Grower’s interest
in the Project, we are of the opinion that the expenditure
will be directly connected with the gaining of income from
the Project. Such interest should, therefore, have a sufficient
connection with the gaining of assessable income to be
deductible under section 8-1 of the ITAA 1997 in the income
year in which it is incurred.
The Loan Application Fee payable to CBA is a borrowing cost
and the tax deductibility of such expenditure is determined
under section 25-25 of the ITAA 1997. We consider that
a tax deduction will be allowed for the loan application fee,
spread over the period of the loan, or over five years,
whichever is the shorter period.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
57
14.0 Independent Taxation Report
Stamp duty on the loan may also be payable by the borrower
and this will be charged at a later date. This is also deductible
as a borrowing expense under section 25-25 of the ITAA 1997.
This is confirmed in paragraphs 139 to 142 of Product Ruling
PR 2008/60.
Amounts borrowed from sources other than CBA
Where a Grower borrows money from external sources and
uses these funds for the purpose of meeting the payments
under the cash option, and the loan is made on ordinary
commercial terms on a full recourse basis, any interest
payable should be deductible to the Grower. Growers will
need to obtain a private ruling from the ATO to confirm their
interest deduction is able to be offset against other income.
We expect that the ATO would allow interest deductions
incurred on such borrowings on the same basis as interest
paid to CBA.
If interest or any other costs are prepaid by the Grower, they
should seek their own taxation advice regarding the tax
deductibility of such payments.
5.Assessable income derived from the thinning,
sale and harvesting of trees
Thinnings
We consider that an amount received by a Grower in respect
of a thinning of trees grown under the Project will not be
received as a result of a CGT event, and is not otherwise
assessable under Division 394. Such amounts will constitute
a distribution of ordinary income that arises as an incident of
the Grower holding a Woodlot.
Where this is the case, Growers must include such amounts
received in their assessable income in the income year in
which those amounts are derived, under section 6-5 of ITAA
1997. This is confirmed in paragraph 149 of Product Ruling
PR 2008/60.
This situation will apply when the Silky Oak trees are thinned
in year 10 following plantation and where the Radiata pine
trees are thinned in year 13 following plantation. The She-oak
trees will not be thinned during the Project.
Whilst the Grower has a separate and identifiable interest in
the Project, the assessable income of all Growers accepted
into the Project in a financial year is pooled together and
distributed amongst all Growers whose Woodlots are referable
to the pool. Growers will receive their respective pro rata
share of the pool based on their number of Woodlots.
This reduces the risk that the performance of a Grower’s
specific trees is below the performance of other trees planted
in respect of the same pool.
Harvesting and sale
We consider that an amount received by a Grower in respect
of the clear fell harvest of Trees grown under the Project, and
an amount received in respect of the sale of standing timber
at year 15 of the Project, will give rise to a CGT event of a
Grower under the Project.
58
Willmott Forests – Premium Forestry Blend Project 2009 PDS
continued
Where a CGT event happens, the market value of the Woodlots,
or the decrease in the market value of the Woodlots will be
included in the Grower’s assessable income in the income
year in which the CGT event happens. This is confirmed in
paragraphs 145 to 147 of Product Ruling PR 2008/60.
This situation will apply when the She-oak trees are harvested,
the final harvest of the Silky Oak trees and the sale of Pine
as standing timber at approximately year 16 of the Project.
Please note the CGT discount rules will not apply to any
Growers as the amount is included in assessable income
under Division 394 of the ITAA 1997.
6. Assessable income derived when a Grower
disposes of its interest in the Project
Where a CGT event happens to a Woodlot held by an initial
Grower, the market value of the Woodlots, or the decrease in
the market value of the Woodlots held will be included in the
Grower’s assessable income.
This is confirmed in paragraph 145 of Product Ruling
PR 2008/60.
The actual sale proceeds received by the Grower will be
deemed to be non-assessable non-exempt income.
Tax deductions claimed by a Grower for contributions made
under the Project will be denied if the Woodlots are disposed
of within four years after the end of the income year in which
the Grower first paid an amount under the scheme.
Where the Woodlots are disposed of after this four year
period, any tax deductions previously claimed will continue
to be deductible to the Grower.
Where a Grower intends to dispose of one or more Woodlots
within four years of the end of the income year in which the
Grower first paid an amount under the scheme, they should
seek their own taxation advice regarding the tax implications
of doing so.
The Commissioner may amend a Grower’s assessment
at any time within two years after the disposal of Woodlots
occurs, for the purpose of disallowing the deduction
previously claimed.
7. Sale of Carbon Sequestration Rights
The tax treatment of an amount received by a Grower
in respect of the sale of Carbon Sequestration Rights is
unclear at this stage. We note that within the Federal Budget
measures announced on 13 May 2008, the current Federal
Government committed to introduce a domestic emissions
trading scheme in 2010. However, the tax implications of
participation in such a scheme have not been determined
at the date of issuance of this Report.
Any amount received by a Grower in respect of sales of
Carbon Sequestration Rights will constitute a distribution
of ordinary income that arises as an incident of the Grower
holding an interest in the Project. Consequently, Growers will
include such amounts received in their assessable income in
the income year in which those amounts are derived under
section 6-5 of the ITAA 1997.
This is confirmed in paragraph 45 of Product Ruling
PR 2008/60.
8. Secondary market trading
One of the objects of Division 394 of the ITAA 1997 is to allow
secondary market trading of interests in forestry managed
investment schemes. For initial participants, under Division
394 of the ITAA 1997, payments made under the Project will
continue to be deductible provided the Woodlots are held for
at least four years after the end of the income year in which
the payment is made. The market value of Woodlots disposed
of will be included in the assessable income of Growers.
For Growers who acquire Woodlots from initial participants
(“subsequent participants”), a deduction will not be allowed
for the initial cost, however any ongoing costs such as interest
and insurance will be deductible under Division 394 of the
ITAA 1997.
On disposal of these Woodlots by the subsequent participant
prior to harvest, an amount equal to the net deductions
previously claimed by the subsequent participant will be
included as assessable income under Division 394 of the
ITAA 1997.
A capital gain will arise to the subsequent participant where
the sale proceeds received exceed the initial cost paid by
the subsequent participant increased by the net deductions
previously claimed by the subsequent participant under
Division 394 of the ITAA 1997.
9. Application of the non-commercial loss
deferral rules
The non-commercial loss provisions contained in Division
35 of the ITAA 1997 prevent losses of individuals from
non-commercial business activities from being offset against
other assessable income in the year the loss is incurred.
In such a case, the loss is deferred.
Where a Grower is accepted to participate in the Project,
losses arising from participation in the Project are not within
the scope of Division 35 of the ITAA 1997. This is confirmed
in paragraph 46 of Product Ruling PR 2008/60.
We consider that the above principle should apply to both
initial participating Growers and subsequent participants in
the Project.
10. GST
It is our opinion that Growers investing in the Project may
be carrying on an agricultural enterprise, on the basis that
the key factors detailed in Taxation Ruling TR 2000/08:
Income tax: investment schemes are satisfied. However,
recent announcements by the ATO have made this position
uncertain.
It is the ATO’s current view as outlined in Taxation Ruling
TR 2007/08: Income tax: registered agricultural managed
investment schemes that the Manager as the Responsible
Entity is carrying on an agricultural enterprise in connection
with the Project, and that Growers are passive investors in
the Project. It is also the ATO’s view, as outlined in draft
ruling GSTR 2008/D1 that Growers will ordinarily not be
carrying on an agricultural enterprise for GST purposes.
Further, contributions made by the Growers to the Manager
are considered to be consideration for an input taxed financial
supply, being the supply of an interest in the Project. As such,
Growers will not be entitled to input tax credits on costs
incurred in relation to the Project.
The position adopted by the Manager is consistent with
comments made by the former Assistant Treasurer in a
media release, “Review of the Taxation of Plantation Forestry”
dated 21 December 2006 in which it was stated that forestry
investors who are eligible for the specific tax deduction under
Division 394 “will be treated as passive investors for GST
purposes and will be removed from the GST net”.
It should be noted that the position adopted by the Manager
in this PDS is based on the preliminary, though considered
view of the ATO as at the date of this Opinion, as outlined
in GSTR 2008/D1. The position of the ATO will not be
finalised until the outcome of a test case on income tax
issues associated with agricultural managed investment
schemes is known. It is expected that this test case will
not be resolved prior to 31 December 2008.
Where GST is payable, a Grower who has paid the application
price by the cash option will be obliged to pay any applicable
GST on receipt of a tax invoice from the Manager. Where a
finance option has been used to pay the application price,
the loan amount will be increased by an amount referable
to the applicable GST in respect of the application price.
Where it is established that GST is payable in respect of the
fees payable under the Constitution, GST will be recoverable
by the Manager from Growers investing in the Project.
Where GST is payable, a Grower may be entitled to claim an
input tax credit. The GST position is referred to in paragraph
20 and 21 of PR 2008/60.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
59
14.0 Independent Taxation Report
11. General tax anti-avoidance measures
For Part IVA of the ITAA 1936 to apply there must be a
‘scheme’ (section 177A of the ITAA 1936), a ‘tax benefit’
(section 177C of the ITAA 1936) and a dominant purpose of
entering into the scheme to obtain a tax benefit (section 177D
of the ITAA 1936).
The Project will be a ‘scheme’. A Grower will obtain a
‘tax benefit’ from entering into the scheme, in the form
of tax deductions for the amounts incurred in respect of the
scheme, as detailed in this Report, that would not have been
obtained but for the scheme. However, in our opinion it is not
possible to conclude the scheme will be entered into or carried
out with the dominant purpose of obtaining this tax benefit.
There are no facts that would suggest that Growers have the
opportunity of obtaining a tax advantage other than the tax
advantages identified in this Report. There is no non-recourse
financing, the Project does not contain round robin
characteristics, and there is no indication that the parties are
not dealing at arm’s length or, if any parties are not dealing
at arm’s length, that any adverse tax consequences result.
Further, having regard to the factors to be considered under
paragraph 177D(b) of the ITAA 1936, it cannot be concluded
on the information available, that participants will enter into the
scheme for the dominant purpose of obtaining a tax benefit.
This is confirmed in paragraph 46 of Product Ruling
PR 2008/60.
12. Product Ruling
Product Ruling PR 2008/60 has been issued by the ATO
confirming that the tax benefits set out in the Product Rulings
and described in this Report are available to Growers provided
the arrangement is carried out in the manner described.
13. Declarations
We recommend that intending Growers consult their own
professional advisers for independent advice that an investment
in the Project is appropriate for their individual circumstances.
Intending Growers should also note that:
continued
• the giving of our consent for the inclusion of this Report
in this PDS should not be taken as an endorsement of the
Project or a recommendation by KPMG of any participation
in the offer by any intending Growers; and
• KPMG gives no assurance or guarantee whatsoever in
respect of the future success or financial returns associated
with the interests being offered pursuant to this PDS.
Our income tax advice is based on current taxation law as at
the date our advice is provided. You will appreciate that the
tax law is frequently being changed, both prospectively and
retrospectively. A number of key tax reform measures have
been implemented, a number of other key reforms have been
deferred and the status of some key reforms remains unclear
at this stage.
Unless special arrangements are made, this advice will not
be updated to take account of subsequent changes to the
tax legislation, case law, rulings and determinations issued
by the Australian Commissioner of Taxation or other practices
of taxation authorities. It is your responsibility to take further
advice, if you are to rely on our advice at a later date.
We are, of course, unable to give any guarantee that
our interpretation will ultimately be sustained in the event
of challenge by the Australian Commissioner of Taxation.
These comments are made specifically in response to
your request for advice on behalf of Willmott Forests Ltd.
Accordingly, neither the firm nor any member or employee
of the firm undertakes responsibility in any way whatsoever
to any person or company other than Willmott Forests Ltd for
any errors or omissions in the advice given, however caused.
These comments are made specifically in response to your
request for advice on behalf of Willmott Forests Ltd. Accordingly,
neither the firm nor any member or employee of the firm
undertakes responsibility in any way whatsoever to any person
or company who markets or otherwise encourages the
promotion of Willmott Forests Ltd.
Yours sincerely
• the involvement of KPMG in the preparation of this PDS is
limited to the preparation of this Report for which normal
professional fees will be received;
• KPMG provides Willmott Forests Limited with certain other
professional services for which normal professional fees will
be received;
• KPMG has not been involved in any other aspect of the
PDS and did not authorise or cause the issue of any other
part of the PDS and has only issued our consent in respect
of inclusion of this Report in the PDS;
60
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Peter R Siebels
Partner
15.0 Further Information
15.1
Constitution
15.1.1.6
The Willmott Forests Premium Blend Forestry
Project, to which this PDS relates, was established
under a constitution dated 11 June 2008 (as
amended).
(a) the applicant was not entitled to hold the
Woodlots issued;
(b) if the Applicant were to continue to hold
the Woodlots the Responsible Entity may or
would breach a legislative obligation imposed
on the Responsible Entity;
The Responsible Entity may amend the
Constitution where it considers the amendment
will not adversely affect Growers’ rights, or where
a special resolution of Growers has approved
the amendment.
(c) the application was incorrectly executed or
executed without authority; or
(d) the application form was defective and accepted
in error,
You may obtain a copy of the Constitution free
of charge by contacting the Responsible Entity
(refer to the Directory on the inside front cover)
during normal business hours. The following is
a summary of some of the principal provisions
of the Constitution. The summary should be
read in conjunction with Chapter 5C of the
Corporations Act.
Other provisions of the Constitution (some of
which are reflected in other parts of this PDS)
include provisions dealing with the Application
Price of Woodlots and the procedure for applying
for Woodlots; payments; powers, rights and
liabilities of the Responsible Entity; the liability
of Growers; remuneration and expenses of the
Responsible Entity; retirement of the Responsible
Entity; insurance; the Stocking Guarantee;
harvesting and sale of standing timber; meetings;
the procedure on termination of the Project;
notices; and complaints.
15.1.1
15.1.1.1
Applications for Woodlots
Applications must be made on an application
form approved by the Responsible Entity and
submitted to the Responsible Entity with the
application money. Woodlots are taken to be
issued when the Responsible Entity accepts
an application. The Responsible Entity must
notify an Applicant within 30 days of the issue of
Woodlots that an application has been accepted.
15.1.1.2
The Responsible Entity may reject an application
in whole or part without giving any reason.
15.1.1.3
Following acceptance by the Responsible Entity
of an application for Woodlots, the Responsible
Entity (as attorney) will execute on behalf of
the Grower the Land Sourcing and Forestry
Management Agreement and, if land is available,
the Land Tenure Agreements.
15.1.1.4
15.1.1.5
Executed copies of the Land Tenure Agreements
and Land Sourcing and Forestry Management
Agreement will be retained by the Responsible
Entity. If you require a copy of these agreements,
please contact the Responsible Entity.
No certificates will be issued to Growers.
Where, within 10 business days of the issue of
Woodlots, the Responsible Entity determines that:
the Responsible Entity may in its discretion
cancel those Woodlots and repay the application
money to the Applicant and, if applicable, give
notice to the Applicant that the Agreements have
been terminated.
15.1.2
Register
The Responsible Entity maintains a register
of Growers at its registered office.
15.1.3
Duration of project
The Project commenced on 11 June 08.
The Project terminates on the earliest of:
(a) the 80th anniversary of the day before the
Project commenced;
(b) where there are no contractual obligations to
be fulfilled or performed by the Responsible
Entity under any Project Document, the date
specified by the Responsible Entity as the
date of termination of the Project in a notice
given to Growers, such date being at least
three months after the notice is given; or
(c) the date on which the Project terminates
in accordance with another provision of
the Constitution or by law.
15.1.4
15.1.4.1
Transfer of Woodlots
A Grower may transfer all or part of their interest
in the Projects (provided that the transfer is of at
least one Woodlot and only entails the transfer of
the entire Woodlots), including the Land Tenure
Agreements and the Land Sourcing and Forestry
Management Agreement (if still subsisting).
15.1.4.2
A transfer must be in writing (‘Instrument of
Transfer’) in a form approved by the Responsible
Entity, and be signed by both the transferor and
the transferee. The Instrument of Transfer must be
delivered to the Responsible Entity together with:
(a) if previously provided to the Grower, a
copy of the Land Sourcing and Forestry
Management Agreement relating to the
Woodlot to be transferred;
(b) if previously provided to the Grower, a copy
of the Land Tenure Agreements in respect
of the Woodlot to be transferred;
Willmott Forests – Premium Forestry Blend Project 2009 PDS
61
15.0 Further Information
continued
(c) a duly executed and stamped assignment
of the Land Tenure Agreements (in a form
acceptable to the Responsible Entity), and
payment in full of any applicable taxes,
duties, fees and charges;
(d) a duly executed and stamped assignment or
novation of the Land Sourcing and Forestry
Management Agreement in respect of
the Woodlots to be transferred (in a form
acceptable to the Responsible Entity);
(c) to act in the best interests of the Growers; and
(d) not to make use of information acquired
through its activities as Responsible Entity in
order to gain an improper advantage for itself
or another person or cause detriment to the
Growers.
15.1.7.2
The Responsible Entity may also have an
interest in any contract or transaction with itself
(in its personal capacity), an associate or any
Grower and can retain for itself any profits
or benefits derived from such a contract
or transaction.
(e) if required, a duly executed and stamped
transfer or assignment of the Grower’s
interest in any Forestry Rights relating
to the relevant Woodlots; and
(f) a duly executed and stamped power
of attorney, in a form acceptable to the
Responsible Entity.
15.1.7.3
The Responsible Entity must retire as responsible
entity of the Project as required by the Corporations
Act, for example, where a meeting of members is
called and an extraordinary resolution is passed
for removal. The Responsible Entity may also
retire as Responsible Entity as permitted by law.
15.1.7.4
Subject to the Constitution and the Agreements
the Responsible Entity has all the powers in
respect of the Project as though it were the
absolute owner of the assets of the Project and
the Trees and acting in its personal capacity.
15.1.8
Remuneration of Responsible Entity
Please refer to section 10 on page 31 in
relation to the remuneration to be paid to the
Responsible Entity.
15.1.9
15.1.9.1
Liability of Growers
The Constitution provides that the liability of a
Grower is limited to the amount unpaid in relation
to their subscription for Woodlots. The law in this
area is not certain however and it is not possible
to give any assurances that the liability of a
Grower would be so limited in all circumstances.
15.1.9.2
The Responsible Entity is entitled to be
indemnified by a Grower to the extent that
the Responsible Entity incurs any liability for
tax as a result of the Grower’s action or inaction.
15.1.9.3
The Responsible Entity may deduct from any
money payable to the Grower in connection
with the Project any money owing by the Grower
to the Responsible Entity under the Constitution
or under the Grower’s Land Tenure Agreements
and Land Sourcing and Forestry Management
Agreement.
15.1.10
15.1.10.1
(a) to act honestly;
Complaints
If a Grower submits to the Responsible Entity
a written complaint alleging that the Grower has
been adversely affected by the Responsible Entity’s
conduct in its management or administration of
the Project, the Responsible Entity:
(b) to exercise the degree of care and diligence
that a reasonable person would exercise if
they were in the Responsible Entity’s position;
(a) must acknowledge in writing receipt of the
complaint as soon as practicable and in
any event within fourteen days from receipt;
15.1.4.3
The transferor shall be deemed to remain the
owner of the Woodlot until the name of the
transferee is entered in the register of Growers.
15.1.4.4
Any Grower wishing to sell their Woodlots should
seek legal advice as to the requirements of the
Corporations Act before offering the Woodlot for
sale or issuing an invitation to any person to buy
the Woodlot.
15.1.5
15.1.6
Pools
A “Pool” is established in respect of each financial
year in which a Woodlot is issued. Each Woodlot
issued during a financial year forms part of the
Pool in respect of that financial year.
Withdrawals
The Constitution does not provide for a right
to withdraw from the Project. The exception to
this is where the Responsible Entity is not in a
position to grant you an interest in land within
15 months (or such other period required by the
Responsible Entity’s Australian Financial Services
Licence or by law) of the end of the financial year
in which your first payment is made under the
Project. In this case the amount invested by you
for your Woodlot(s) will, within 14 days of receipt
of your written request, be refunded in full. Any
interest in respect of your application money
will be kept by the Responsible Entity and will
become an asset of the Project.
Subject to the Corporations Act, on payment
of the refund, the Responsible Entity will have
no further liability to you in respect of the issue
of the Woodlot or otherwise.
15.1.7
15.1.7.1
62
The Responsible Entity and its associates may
also hold Woodlots in the Project in any capacity.
The Responsible Entity
The Responsible Entity acts as the Responsible
Entity of the Project. The Corporations Act
imposes a number of duties on the Responsible
Entity. Some of the more important duties are:
Willmott Forests – Premium Forestry Blend Project 2009 PDS
(b) must ensure that the complaint receives proper
consideration resulting in a determination by a
person or body designated by the Responsible
Entity as appropriate to handle complaints;
and acquire and plant new cuttings or seedlings
of a quality comparable to the original cuttings or
seedlings planted in accordance with the Grower’s
Land Sourcing and Forestry Management
Agreement. If required to plant new seedlings
under the Stocking Guarantee, the Responsible
Entity must, in respect of an area of land, plant
a minimum of 85% of the number of cuttings or
seedlings initially planted on that area of land.
(c) must act in good faith to deal with a complaint
by endeavouring to correct any error which is
capable of being corrected without affecting
the rights of any third party;
(d) may in its discretion give any of the following
remedies to the complainant:
‘Materially damaged’ means that the trees are
destroyed or damaged, other than by:
(i) information and explanation regarding the
circumstances giving rise to the complaint;
(a) acts of terrorism, war, hostilities or rebellion;
(ii) an apology; or
(b) ionising radiation or contamination by
radioactivity from any nuclear fuel or waste,
the combustion of nuclear fuel or nuclear
weapons material; or
(iii) compensation for loss incurred by the
Grower as a direct result of the breach
(if any); and
(c) snow or another severe weather condition,
(e) must communicate to the complainant in
relation to the complaint as soon as practicable
and in any event not more than forty-five days
after receipt by the Responsible Entity of the
complaint:
so that, in the reasonable opinion of an
Independent Forester appointed by the
Responsible Entity, there is a materially adverse
impact on the value or long term viability of the
relevant trees.
(i) its determination;
(ii) the remedies (if any) available to the
Grower; and
15.1.13
(iii) information regarding any further avenue
for complaint.
15.1.10.2
If you do not get a satisfactory outcome from
your complaint, you have the right to refer
the matter to a complaints resolution scheme
registered by ASIC. The Responsible Entity is
a member of the Financial Ombudsman Services
Ltd (“FOS”). FOS can be contacted on
1300 780 808.
15.1.10.3
If any of the matters in paragraph 15.1.10.1
above cease to be required by the Corporations
Act or ASIC policy, the Responsible Entity will
ensure that it has in place an adequate system
to deal with Grower complaints.
15.1.11
15.1.11.1
Meetings
The Responsible Entity may convene a meeting
of Growers at any time and must do so if required
by the Corporations Act.
15.1.11.2
15.1.12
The quorum for a meeting is at least five Growers
present in person or by proxy together, unless
there are less than five Growers in the Project
who may vote on a resolution in which case
the quorum is the total number of Growers.
Stocking Guarantee
The Responsible Entity provides the Grower with
a Stocking Guarantee from the date a Grower is
registered as a holder of the Woodlot in respect
of that Pool for a period of two years. During
this period if more than 15% of a Grower’s trees
which are referable to the Pool are ‘materially
damaged’, the Responsible Entity will, at its own
expense (unless applicable insurance has been
arranged by the Responsible Entity) remove the
damaged or destroyed trees, prepare the ground
Insurance arrangements
The Responsible Entity will, in respect of each
Pool and at its expense, maintain or cause to
be maintained an insurance policy in relation
to She-oak, Radiata pine and Silky Oak trees
in respect of fire for a further five years after the
Stocking Guarantee period. See section 9.7 on
page 30 for further information.
For insurance arrangements after seven years,
refer to section 9.7 on page 30.
15.1.14
Indemnity
Subject to the Corporations Act, if the Responsible
Entity acts in good faith and without negligence,
it is not liable in contract, tort or otherwise to
Growers for any loss suffered in any way relating
to the Project.
15.1.15
Harvesting and sale of trees
The Responsible Entity is required, in respect
of all Woodlots in a Pool to:
(a) carry out, or arrange to be carried out,
on behalf of Growers, the harvesting and
sale of the Pool’s She-oak trees;
(b) prior to the sale (if applicable) of the Pool’s
Radiata pine trees, carry out or arrange to be
carried out, on behalf of Growers, the harvesting
and sale of the Pool’s Radiata pine trees; and
(c) carry out, or arrange to be carried out, on
behalf of Growers, the harvesting and sale
of the Pool’s Silky Oak trees.
The proceeds from the sale of the She-oak will
be distributed to Growers on a pro rata basis
based on the number of Woodlots referable
to the relevant Pool held by the Grower after
deduction of outstanding fees (other than in
relation to Carbon Credits) and any other
amounts agreed to be paid by Growers.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
63
15.0 Further Information
continued
The proceeds from the sale of the Radiata pine
(plus any amount (if any) contributed by the
Responsible Entity) will be distributed to Growers
on a pro-rata basis based on the number of
Woodlots referable to the relevant Pool held by
the Grower after deduction of outstanding fees
(other than fees in relation to Carbon Credits)
and any other amounts agreed to be paid by
Growers.
(b) any liability (actual, contingent, anticipated
or otherwise) which the Responsible Entity,
WFIM or a Grower may or will incur in relation
to the Carbon Credits,
will be distributed to Growers whose Woodlots
are referable to that Pool on a pro-rata basis
based on the number of Woodlots referable
to the Pool held by the Grower after deduction
of the fees to which the Responsible Entity is
entitled in respect of the Carbon Credits.
The proceeds from the sale of the Silky Oak will
be distributed to Growers on a pro-rata basis
based on the number of Woodlots referable to the
relevant Pool held by the Grower after deduction
of outstanding fees (other than fees in relation to
Carbon Credits) and any other amounts agreed
to be paid by Growers.
If the Responsible Entity re-enters a Grower’s
land under the Land Tenure Agreement, the
proceeds from the sale of the timber on the
land will be dealt with as described in section
15.5.19 on page 66. Such proceeds do not form
part of the proceeds from the sale of the She-oak,
Radiata pine or Silky Oak and in this event,
the Grower has no entitlement to any further
distributions under the Constitution in respect of
their She-oak, Radiata pine and Silky Oak trees.
Unless the Responsible Entity reasonably
considers that it is impracticable to do so, the
Responsible Entity must distribute the proceeds
from the harvesting and sale of a Pool’s trees
within a period of six months commencing on the
date on which the proceeds are received by
the Responsible Entity. If the Responsible Entity
reasonably considers that it is impractical to
distribute the proceeds within six months, it must
do so as soon as reasonably practicable thereafter.
Any interest earned in respect of such proceeds
must be distributed to the relevant Growers on a
pro-rata basis based on the number of Woodlots
held by the Grower.
If the Responsible Entity enters into an agreement
to sell the standing Radiata pine timber referable
to a Pool in accordance with the Constitution,
each Grower whose Woodlots are referable to
that Pool shall do all things reasonably necessary
to transfer the Grower’s interest in the land on
which the relevant Radiata pine trees are grown
to the acquirer of such standing Radiata pine
timber and, if necessary, the Grower’s interest
in, or in any right or entitlement which forms part
of, the Forestry Right in respect of such land.
15.1.16
15.1.17
Sale of standing Radiata pine
Please refer to page section 3.6 on page 12 for
information on the anticipated sale of the standing
Radiata pine.
15.2
Other information
15.2.1
Variation of the Agreements
The Land Tenure Agreements and the Land
Sourcing and Forestry Management Agreement
may each be varied only by agreement between
the Responsible Entity and Grower.
15.2.2
15.2.2.1
Compliance Committee
The Responsible Entity has established a
Compliance Committee, which has three members
of which a majority are external members.
If any Compliance Committee member incurs
a liability in their capacity as a compliance
committee member in good faith, the member
is entitled to be indemnified out of the assets
of the Project in respect of the liability to the
extent permitted by the Corporations Act.
15.2.2.2
15.2.3
15.2.3.1
Compliance Plan
The Compliance Plan of the Project must set out
adequate measures that the Responsible Entity
is to apply in operating the Project to ensure
compliance with the Corporations Act and with
the Project’s Constitution.
15.2.3.2
You may obtain a copy of the Compliance Plan
free of charge by contacting the Responsible
Entity (refer to the Directory on the inside front
cover) during normal business hours.
15.2.4
15.2.4.1
Audits
In accordance with the Corporations Act, the
Responsible Entity is required annually to arrange
an audit of the financial accounts of the Company,
the financial accounts of the Project and an audit
of the Compliance Plan.
15.2.4.2
Audit reports must be lodged with ASIC within
three months of the end of each financial year.
15.2.4.3
Details of the auditors are set out on the
Directory on the inside front cover.
Carbon Credits
The proceeds from dealing in Carbon Credits in
respect of a Pool by the Responsible Entity less:
(a) any expenses for which the Responsible
Entity is entitled to be indemnified under
the Constitution, other than the Responsible
Entity’s administration costs); and
64
If the Responsible Entity re-enters a Grower’s
land under the Land Tenure Agreement, the
Grower has no entitlement to any proceeds
received after the date of re-entry in respect of
Carbon Credits that relate to the relevant land.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
15.2.5
Disclosing entity
The Project is not currently a disclosing entity
under the Corporations Act. If the Project
becomes a disclosing entity, the Project will
be subject to regular reporting and disclosure
obligations. Copies of any documents lodged
with ASIC in relation to the Project may then
be obtained from or can be inspected at,
an ASIC office and investors will have a right
to obtain a copy, free of charge, in respect
of the Project, of:
• the most recent annual financial report;
15.3.5
Nanmar Pty Ltd in its capacity as trustee of
the JT Waterton Settlement Trust is the majority
shareholder of the Responsible Entity. Marcus
Derham may, at the discretion of the trustee,
participate in any distributions of capital or
income from JT Waterton Settlement Trust.
Any such distribution may in part reflect dividends
from the Responsible Entity out of profits arising
from business activities in the Project.
15.3.6
• any half yearly financial report lodged with
ASIC after that financial report but before
the date of this PDS; and
Each of the independent experts are paid
professional remuneration in connection with
the preparation of their reports contained within
this PDS. In addition:
• any continuous disclosure notices lodged with
ASIC after that financial report but before the
date of this PDS.
Forsci has contractual arrangements with the
Responsible Entity to provide ongoing consulting
services to the Responsible Entity.
You can call the Responsible Entity on
1800 801 866 for general information in
relation to the Project.
URS as market advisers to the Responsible Entity,
also provide ongoing advice to the Responsible
Entity as required on a case by case basis.
15.3
Disclosure of interests, fees, payments
and benefits
15.3.1
Each Director of the Responsible Entity receives
fixed fees, and any other fixed entitlement to
which they are entitled, as a Director, to receive
from the Responsible Entity.
KPMG as taxation advisers to the Responsible
Entity, also provide ongoing advice to the
Responsible Entity as required on a case by
case basis.
15.3.2
15.3.3
No Director, either directly or indirectly, holds,
or in the two years to the date of this PDS
has held, Woodlots in the Project other than
James Higgins who holds two Woodlots.
The Directors, either directly or indirectly, hold,
or in the two years to the date of this PDS held,
the following interests in the Responsible Entity:
Director Shares2
James Higgins
Marcus Derham1
Jonathan Madgwick
Hugh Davies
(Ordinary Fully Paid)
49,995
26,637,336
202,000
117,500
15.4
Summary of financial statements
15.4.1
Willmott Forests Limited (ABN 17 063 263 650)
and controlled entities have net tangible assets
of at least $5,000,000 (as that term is defined
in its Australian Financial Services Licence
No 233215). See below for an extract from the
statement of the net assets of Willmott Forests
Limited and controlled entities as at
31 December 2007.
2. Directors have received and may in the future continue to receive
dividends relating to shares they hold in the Responsible Entity.
Current Assets
Non Current Assets
Total Assets
Current Liabilities
Non Current Liabilities
Total Liabilities
Net Assets
Net Tangible Assets
Since the inception of the Project the following
persons (or entities in which they have an interest)
have been paid or are entitled to be paid fees
for services provided by them in the following
capacities in connection with the Project:
Shareholders Funds
Contributed Equity
Retained Earnings
Minority Equity Interest
Total Shareholders Equity
Director Shares2
James Higgins
Hugh Davies
(PINES)
1,000
800
1. Refer also to paragraph 15.3.5 below.
15.3.4
IndustryEdge as market advisers to the
Responsible Entity, also provide ongoing advice
to the Responsible Entity as required on a case
by case basis.
(1) Hugh Davies, in his capacity as a member
of the Project’s Compliance Committee
and in his capacity as a solicitor and a Director.
(2) Jonathan Madgwick, in his capacity as principal
of JD Madgwick Chartered Accountants, the
Company Secretary and a Director.
$57,574,343
$189,852,262
$247,426,605
$38,438,239
$112,212,351
$150,650,590
$96,776,015
$93,704,206
$54,217,717
$38,273,428
$4,284,870
$96,776,015
A copy of the audited accounts of the
Responsible Entity may be obtained, free of
charge, by visiting the Willmott Forests’ website
at www.willmottforests.com.au or by contacting
the Responsible Entity during normal business
hours (refer to Directory on inside front cover).
(3) James Higgins, in his capacity as a Director.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
65
15.0 Further Information
15.5
continued
Summary of Land Tenure Agreement
Land is allocated to Growers on a random basis.
Depending upon the land allocated to a Grower
each Land Tenure Agreement may take the
form of, or a combination of, a Lease Agreement,
Sublease Agreement or Licence Agreement. A
separate Land Tenure Agreement will be executed
in respect of land on which She-oak trees will be
planted. A summary of the key terms of those
agreements is as follows:
15.5.1
[Parties] The Land Tenure Agreements are between
Willmott Forests Limited and the relevant Grower.
15.5.2
[Land] The land which is the subject of the
agreement is marked on one or more plans.
The Responsible Entity reserves unrestricted
rights of way over any present or future pathway
or firebreak. Willmott Forests also reserves the
right to agist the land as part of its silvicultural
management. The agreement is subject to any
encumbrances affecting the land.
15.5.3
15.5.4
[Duration] The tenancy is for a term of 16 years
(in respect of land on which Radiata pine and
Silky Oak will be planted) and 9 years (in respect
of land on which She-oak will be planted) but
may be renewed after that (refer section 15.5.23
on page 67).
15.5.5
[Rent] The rent is the pro-rata proportion of the
Rent payable by the Grower.
15.5.6
[GST] The rent specified in section 15.5.5
includes GST.
15.6.7
[Use of land] The Grower is permitted to use the
land only as part of the Project. For that purpose
the Grower can prepare and cultivate the land,
constructs certain improvements on the land
(with consent of the Responsible Entity), and,
plant, maintain and harvest the trees (following
their maturity). This is an essential term of
the agreement.
15.5.8
[Legislation] The Grower must comply with all
relevant legislation and all requirements of any
governmental or other public body, local authority
relating to the permitted use of the land and any
trees, plant or equipment or other property which
are not owned by Willmott Forests Limited and
which the Grower brings onto, or affixes to,
the land.
15.5.9
15.5.10
66
[Commencement date] The date of issue of
Woodlots to the Grower, being the date the
application for Woodlots is accepted.
[Procedure at expiration] At the expiration of the
agreement, the Grower must deliver up the land
to the Responsible Entity in a reasonable state
of repair. This is an essential term of the lease.
[Assignment or sub-lease] The Grower must
not assign, or grant security in, or charge its sub
interest in, or sublet, or otherwise dispose of,
or grant any licence to use the land or any part
Willmott Forests – Premium Forestry Blend Project 2009 PDS
thereof without the written consent of Willmott
Forests, and in the case of land in Victoria, section
144 of the Property Law Act 1958 does not
apply to the lease.
15.5.11
[Caveat] The Grower covenants not to lodge,
or permit to be lodged, a caveat on the title
to the land.
15.5.12
[Indemnity] The Grower indemnifies the
Responsible Entity against any claim resulting
from any act or omission of the Grower or any
person claiming under the Grower while using
the land.
15.5.13
[Insurance] The Grower agrees not to do or permit
anything to be done on the land which could
invalidate any insurance policy or could increase
premiums.
15.5.14
[Quiet possession] The Responsible Entity must
give the Grower quiet possession of the land as
long as the Grower complies with its obligations
under the agreement.
15.5.15
[Responsible Entity’s dealings] Within seven
days of receiving a written request for consent by
Willmott Forests to any subsequent dealings that
are subject to the agreement, the Grower must
grant its consent.
15.5.16
[Entry] The Grower must permit the Responsible
Entity at all reasonable times to enter upon the land.
15.5.17
[Termination] The Responsible Entity may re-enter
the land and end the agreement if: the Grower
breaches its obligations under the agreement,
the Land Sourcing and Forestry Management
Agreement or under other agreements related
to the land and the breach continues for 14 days
after a notice is served on the Grower; the Land
Sourcing and Forestry Management Agreement
is terminated in the event of a defective application
for the purposes of the Constitution; or in certain
other circumstances, such as where the Grower
goes into liquidation, is wound up or becomes
bankrupt; or if a warrant issued by a court to
satisfy judgement is not satisfied within 30 days;
or the Grower’s trees are materially damaged and
Willmott Forests is not reasonably satisfied that
the trees will be replaced.
15.5.18
[Surrender] The Responsible Entity has the
right to request the Grower to surrender the
agreement before the expiry of the term or the
further term of the lease if the distribution of
all amounts payable to the Grower under the
Constitution, in connection with the land, has
been completed. If the Responsible Entity
so requests the Grower must surrender the
agreement.
15.5.19
[Re-entry] Re-entry by Willmott Forests ends the
agreement, but Willmott Forests still retains all
rights under general law. Upon re-entry, Willmott
Forests must arrange for either or both the
harvesting and sale of the trees as Willmott
Forests determines and either before or following
tree maturity. Willmott Forests must reasonably
determine the value of the trees at the time
of re-entry (“Determined Value”).
the agreements between the Grower and
the Responsible Entity in connection with the
Project and in accordance with the terms on
which the trust property is granted to WFIM;
(c) WFIM consents to the Responsible Entity
harvesting, selling, disposing or acquiring (as
the case may be) any property the subject of
the rights which constitute the trust property,
in accordance with the Constitution;
Once the trees are sold by Willmott Forests
the lesser of the Determined Value and the sale
proceeds will go: first towards payment of any
moneys owing by the Grower to Willmott Forests
or any related party under the agreement or under
any other agreement; then towards payment of
any costs incurred by Willmott Forests as a result
of the Grower’s default with the balance to be
paid to the Grower. If the sale proceeds exceed
the determined value, the difference will be
retained by Willmott Forests.
15.5.20
15.5.21
15.5.22
15.5.23
15.5.24
(d) WFIM has no right, title or interest in any
property received by the Responsible Entity
in respect of any property the subject of the
rights which constitute the trust property;
(e) any property received by WFIM or the
Responsible Entity in respect of any property
the subject of the rights which constitute
the trust property shall be dealt with by the
Responsible Entity in accordance with the
relevant agreements and the Constitution;
[Remedy of breach] Pursuant to statute in
Victoria and New South Wales and Queensland,
a period of 14 days is fixed as the period within
which the Grower must remedy a breach and
compensate Willmott Forests for it.
(f) WFIM is not liable in contract, tort or other
wise to Growers for any loss suffered in relation
to the trust;
[Grower remains in possession] If after the
expiration of the agreement, the Grower remains
in possession of the land without objection
by the Responsible Entity, then the Grower
is considered to have been granted a weekly
tenancy at the rental and subject to the terms
of the same original agreement.
(g) a Grower has no rights in relation to trust
property which does not relate to land in
respect of the Grower’s Woodlots; and
(h) a Grower has no rights in relation to trust
property which relates to land in which the
Grower has ceased to have an interest.
[Remedy of Grower’s breach by Willmott
Forests] If the Grower breaches a term of the
agreement, Willmott Forests may enter onto the
land and remedy the breach, and then require
the Grower to reimburse Willmott Forests for any
amount Willmott Forests paid in remedying the
breach (these amounts are considered ‘rent’).
[Renewal] Willmott Forests will renew the Land
Tenure Agreement upon the written request of
the Grower delivered to the Willmott Forests at
least three months before the expiration of the
agreement, unless there are any existing breaches
by the Grower. The further term is a period of
five years. Once renewed, the Land Tenure
Agreement cannot be renewed again.
In addition, WFIM agrees to do certain things
under the Constitution to facilitate the harvesting
and sale of timber.
WFIM can amend the terms of the trust by
supplemental deed if WFIM considers it necessary
or desirable to comply with any law applicable
to the operation of the Project.
15.5.25
[She-oak] On the termination or surrender of
the Land Tenure Agreement in respect of land
on which She-oak is planted, the Forestry Right
Agreement (in relation to forestry rights) in respect
of such land will terminate and ownership of
such trees will revert to the Responsible Entity.
[Forestry Right] Information on the Forestry Right
created by the Responsible Entity is set out.
The Grower acknowledges and agrees that the
forestry rights are separate from and do not form
part of the land.
15.6
Summary of Land Sourcing and
Forestry Management Agreement
15.6.1
[Parties] The Land Sourcing and Forestry
Management Agreement is between the
Responsible Entity and the Grower.
Forestry Rights will be granted to Willmott
Forests Investment Management Pty Limited
(WFIM) as trustee for the Growers. Under the
terms of the trust:
15.6.2
[Commencement date] The date of issue of
Woodlots to the Grower being the date the
application for Woodlots is accepted.
15.6.3
[Grant of Land Tenancy] The Responsible Entity
undertakes to take all reasonable steps to grant
a Land Tenure Agreement in respect of the
Grower’s Woodlots by no later than 15 months
from the end of the financial year in which the
Grower’s first payment under the Project is
made (“Termination Date”).
(a) WFIM is not required to act on directions
given by Growers to WFIM in relation to the
trust property, except as required by law or
the terms of the trust;
(b) WFIM has power to deal, but must only deal,
with the trust property in connection with the
Project, in a manner which is consistent with
Willmott Forests – Premium Forestry Blend Project 2009 PDS
67
15.0 Further Information
continued
15.6.4
[Land Tenancy] The Responsible Entity must
grant and the Grower must accept a Land
Tenure Agreement on the terms and conditions
set out in the Land Tenure Agreement and as
required by the Constitution.
15.6.5
[Termination – land sourcing obligation] If, by
the Termination Date, the Responsible Entity has
not been able to grant a Land Tenancy interest
to the Grower then either party may terminate
the agreement by giving the other party at least
seven days written notice (“Notice”).
15.6.6
If the term of a Grower’s Land Tenure Agreement
in respect of the land on which She-oak and
Silky Oak is planted ends, or the Land Tenure
Agreement is surrendered, the Responsible Entity
has no obligation to complete this work or the
harvesting and subsequent sale of the relevant
She-oak and Silky Oak trees.
15.6.7
[Works] Willmott Forests shall use all reasonable
endeavours to complete the following works
in accordance with good forestry practices
in respect of the relevant land:
The Responsible Entity is permitted to delay the
harvesting of trees grown on the relevant land to
allow for fluctuations in the amount of the carbon
sequestered by such trees due to events beyond
the reasonable control of the Responsible Entity.
Part 1 – Preparation and planting services
• preparation works (ripping, mounding and/or
ploughing);
15.6.8
[Fees] Section 10 page 31 sets out information
on the fees which must be paid by the Grower.
15.6.9
[Delegation] Willmott Forests may delegate its
obligations under the agreement to any other
person.
15.6.10
[Right to take action] Willmott Forests reserves
the right to take any action necessary (including
issuing legal proceedings) to recover the balance
of any application moneys which are due and
payable without further notice to the Grower.
The Grower agrees to indemnify Willmott Forests
for any costs or expenses it incurs in seeking
to recover any unpaid monies.
15.6.11
[Assignment] The Grower must not assign all or
any of their rights under the agreement without
the written consent of Willmott Forests.
[Force majeure] Willmott Forests is not responsible
for any failure to carry out any obligation under
the agreement by reason of Force Majeure.
• pre-planting weedicide treatments as required;
• supplying and planting cuttings and seedling
material;
• fertilising, where required;
• pest control; and
• direct supervision of these services.
Part 2 – Establishment and maintenance work
In Years 1 and 2: establishment work including:
• supply and replanting of She-oak, Radiata pine
and Silky Oak cuttings or seedlings (as
applicable), where required under any
Stocking Guarantee;
• treatment of regrowth;
• post-planting weedicide treatments as
required;
15.6.12
• folia analysis of planted stock;
• construction and maintenance of access
roads and fire breaks as required; and
15.6.13
[Faulty workmanship or defective materials]
Willmott Forests will make good any defect
resulting from faulty workmanship or defective
materials but not otherwise.
15.6.14
[Interest] Willmott Forests will charge additional
interest on any amount payable and outstanding
which is not paid by the due date.
15.6.15
[Termination – amounts unpaid] The Responsible
Entity may terminate the agreement as well as the
Land Tenure Agreements, if any amount payable
and outstanding is not paid by the due date.
15.6.16
[No representations or warranties] The Grower
acknowledges that in entering into the agreement,
the Grower has not relied on any representations
or warranties from the Responsible Entity except
as provided in the agreement and this PDS. All
other representations and warranties are, to the
extent permitted by law, excluded.
• general maintenance inclusive of ongoing
monitoring.
In Years 3 and 4: general maintenance, including:
monitoring, attention to regrowth, access roads
and fire breaks, fertilising and general maintenance,
where required.
In each year subsequent to Year 4: further
fertilising, general maintenance including monitoring,
attention to regrowth, access roads, fire breaks
and selective pruning, where required.
If the Radiata pine trees are sold, the Responsible
Entity has no obligation to complete this work or
the harvesting and subsequent sale of such trees
after completion of the sale of these trees.
68
Willmott Forests – Premium Forestry Blend Project 2009 PDS
[Harvesting] The harvesting and sale of a
Grower’s trees is to be carried out, or arranged
to be carried out, by Willmott Forests. Information
on the distribution of the proceeds from the
harvesting and/or sale of the Grower’s trees
is set out in section 15.1.15 on page 63.
15.6.17
[Termination Event of Default] The Grower or
Willmott Forests may terminate the agreement
in other circumstances including, where the other
party fails to comply with its material obligations
under the Project Documents and:
15.7.7
Payments must be made without set off
or counter claim and free and clear of any
withholding or deduction for taxes.
15.7.8
A Grower is required to pay all of the costs, charges
and expenses of Willmott Finance relating to the
12 Month Interest Free Loan Agreement, the
application for Woodlots or the Agreements and
all stamp and transaction duties, registration fees
and taxes in connection with the Mortgaged
Property or the application or any other document
or arrangement in connection there-with. It is not
necessary for Willmott Finance to incur expenses
before making a claim under the 12 Month
Interest Free Loan Agreement.
15.7.9
A Grower will if requested by Willmott Finance,
execute documentation in substitution or variation
of the 12 Month Interest Free Loan Agreement or
in order to provide additional security of payment
for Monies Owing.
15.7.10
If requested by Willmott Finance, a Grower must
provide Willmott Finance with satisfactory personal
guarantees for better securing payment of the
Monies Owing.
15.7.11
A Grower must pay the whole of the Monies Owing
if the proceeds of any claim under an insurance
policy or otherwise in respect of damage or
destruction to the Grower’s Trees are paid to
the Grower or at their direction and they do not
apply the whole of the proceeds in replacement
of the damaged or destroyed Trees.
15.7.12
Any obligation imposed upon a Grower by the
2009 Application Form, the Agreements or the
12 Month Interest Free Loan Agreement is a joint
and several obligation.
15.7.13
In consideration of the terms of payment,
a Grower mortgages all their interest in the
Mortgaged Property in favour of Willmott Finance
for securing payment of all Monies Owing and
the performance of their obligations under the
Agreements, the terms of the 2009 Application
Form and the 12 Month Interest Free Loan
Agreement. Note: Willmott Finance may vary in
the future the type of security that it takes under
the terms of the 12 Month Interest Free Loan
Agreement.
15.7.14
Willmott Finance may effect and maintain on a
Grower’s life for Willmott Finance’s own benefit,
a policy of term life insurance for an amount not
less than the Principal until repayment of the
Monies Owing in full.
15.7.15
A Grower must not create or allow to exist any
security interest or other interest in the Mortgaged
Property (or cut down or remove any Trees) except
as the 12 Month Interest Free Loan Agreement
provides and may not dispose (or agree
to dispose) or part with possession of the
Mortgaged Property without Willmott Forests’
prior written consent.
(a) if capable of being remedied, does not
remedy the default within 14 days of receiving
a notice requiring it to do so; or
(b) if not capable of being remedied, does
not give to non-defaulting part reasonable
compensation for the non-compliance within
14 days after receiving notice.
The Responsible Entity can terminate the
agreement if the Responsible Entity re-enters
the land the subject of the Grower’s Land Tenure
Agreements or if the Responsible Entity cancels
the Grower’s Woodlots in the circumstances
described in section 15.1.1.6 on page 61.
15.7
Summary of 12 Month Interest Free
Loan Agreement
15.7.1
The following is a summary of the 12 Month
Interest Free Loan Agreement (including the
relevant parts of the 2009 Application Form)
which each Grower, who elects to pay for their
Woodlots by way of a 12 month interest free loan
provided by Willmott Finance Pty Ltd (“Willmott
Finance”), is required to execute.
15.7.2
15.7.3
15.7.4
15.7.5
15.7.6
A Grower is required to pay an amount equal
to the total purchase price for their Woodlots,
(“Principal”), together with any GST found to be
payable in respect of the purchase price over
the period agreed between the Grower and
Willmott Forests.
No interest is charged on a 12 month interest
free loan. A Grower must repay the Principal
(and any penalty interest due in respect of
their Woodlots in the event of default, together
the “Payments”) on the payment dates agreed
between Willmott Finance and the Grower
(each of them a “Payment Date”).
Principal, interest, together with any GST found
to be payable in respect of the purchase price,
and all other monies actually or contingently
owing under the application for Woodlots or the
12 Month Interest Free Loan Agreement (“Monies
Owing”) are to be paid to Willmott Finance by
making the Payment on each Payment Date.
The terms for payment of Monies Owing are stated
in the 12 Month Interest Free Loan Agreement
and are for carrying out the business of primary
production carried on under the Project and
described in the PDS, 2009 Application Form
and the Agreements.
Where a Grower defaults on their obligations,
penalty interest will be charged at 15% per annum
calculated daily and accrued monthly on the
balance of all monies owing and which are
overdue for payment.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
69
15.0 Further Information
15.7.16
continued
A Grower will be in default under the 2009
Application Form and the 12 Month Interest Free
Loan Agreement if they:
(a) do not pay Monies Owing as and when
required;
15.7.21
Willmott Finance may charge a Payment Default
Fee, currently $110 (inclusive of GST) for any
monthly payment which is rejected by the
Grower’s nominated financial institution.
15.7.22
Willmott Finance may assign, create any interest
in or otherwise deal with any or all of its rights
at any time as it sees fit. This includes disclosing
confidential information in respect of the 12
Month Interest Free Loan Agreement or the
Grower to the other party.
15.7.23
A Grower appoints Willmott Finance to be their
attorney to execute any deed, assignment,
contract or document or do any other act in
connection with the Mortgaged Property or the
12 Month Interest Free Loan Agreement or to
do any other act required of the Grower under
the 2009 Application Form as set out in the 12
Month Interest Free Loan Agreement. Willmott
Finance as attorney may exercise its powers
even if Willmott Finance has a conflict of duty
or has a direct or personal interest in the means
or result of that exercise of power.
(b) fail to comply with the terms of the 2009
Application Form or the 12 Month Interest
Free Loan Agreement;
(c) do not do something which they agreed to do,
or do something which they agreed not to do;
(d) become insolvent;
(e) repudiate any Agreements or if any
Agreements are otherwise terminated; or
(f) have given any information to Willmott
Finance in support of their application for
a 12 month interest free loan that is in any
way not true or misleading.
15.7.17
Where a Grower is in default:
(a) upon being given notice by Willmott Finance,
Monies Owing shall become immediately due
and payable; and/or
A Grower agrees to ratify anything done by Willmott
Finance as attorney pursuant to this clause.
(b) Willmott Finance may:
(i) take legal action to recover the Monies
Owing;
15.7.24
You may not assign, create another interest or
otherwise deal with any or all of your rights under
the 12 Month Interest Free Loan Agreement without
the prior written consent of Willmott Finance.
15.7.25
Willmott Finance may in its absolute discretion
deal with in any manner its right, title or interest
arising out of the 12 Month Interest Free Loan
Agreement. This may include appointing another
party to act as its agent and thereby exercise
its rights under the 12 Month Interest Free Loan
Agreement.
15.7.26
A Grower must, on demand, pay or reimburse
Willmott Finance for all taxes including stamp
or other duty imposed by any government body
including GST and fees (including registration
fees) payable in connection with the 12 Month
Interest Free Loan Agreement.
15.7.27
If GST is found to be payable in respect to the
purchase price for Woodlots the Principal Amount
will be increased by an amount referable to the
GST applicable in respect of the purchase price.
15.8
Summary of Origination Deed
15.8.1
Willmott Forests has entered into an Origination
Deed with the Commonwealth Bank of Australia
(“CBA”).
15.8.2
Willmott Forests may originate loans on behalf
of CBA.
15.8.3
CBA will service all loans originated under the
Origination Deed.
(ii) take possession of the Mortgaged Property;
(iii) do anything an owner of the Mortgaged
Property is entitled to do; or
(iv) appoint a receiver or receiver and manager
to do any of the above or anything else
that the law allows them to do.
15.7.18
15.7.19
15.7.20
70
A Grower acknowledges that there may be no
apparent secondary market for the Mortgaged
Property and a sale price may be accepted by
Willmott Finance as bona fide and reasonable
if certified as such by Willmott Finance or some
other person experienced in valuing assets of
a like nature. If Willmott Finance or a receiver or
receiver and manager exercise Willmott Finance’s
rights under the 2009 Application Form or the
12 Month Interest Free Loan Agreement, neither
Willmott Finance nor the receiver is liable to
account as mortgagee in possession. Willmott
Finance may give up possession of the
Mortgaged Property at any time.
The obligations under the 12 Month Interest Free
Loan Agreement are personal and cannot be
assigned, transferred or dealt with in any other
manner without the prior written consent of
Willmott Finance.
Willmott Finance may use any money received
under the 12 Month Interest Free Loan
Agreement or 2009 Application towards paying
any part of the Monies Owing as Willmott
Finance may choose.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
15.9
Privacy
15.10.3
15.9.1
Willmott Forests collects and uses the personal
information requested in the 2009 Application
Form and 12 Month Interest Free Loan Application
and by any other means in the future for the
primary purpose of establishing and administering
your investment(s) in Woodlots, providing a 12
month interest free loan or arranging for finance
from Willmott Finance and assessing your eligibility
for establishing the investment. We assess your
eligibility partly by undertaking credit reference
checks. We are unable to process your application
and provide you with the requested number of
Woodlots without this information.
URS has given, and has not before the date
of this PDS, withdrawn its consent to the
Independent Market Report on page 49 and
referred to on pages 12 and 65, being included
in the PDS in the form and context in which it
is included.
15.10.4
Robert Eastment and IndustryEdge Pty Ltd have
given and have not, before the date of this PDS,
withdrawn their consent to the inclusion of the
report entitled ‘Blending Mature Products With
Innovation to Capitalise on Future Markets’ on
page 35 in the form and context in which it is
included in this PDS.
15.10.5
Armstrong Partners has given, and has not
before the date of this PDS, withdrawn its consent
to the summary of the statements of the net
assets of Willmott Forests Limited and controlled
entities appearing on page 65 being named
in this PDS in the form and context in which
it is named.
15.10.6
Hancock Victorian Plantations Pty Ltd has given,
and has not before the date of this PDS, withdrawn
its consent to be included in this PDS in the form
and context which it is included.
15.10.7
To the extent permitted by law, the CBA expressly
disclaims and takes no responsibility for any
part of this PDS other than as set out below.
The CBA has given its consent, which has not
been withdrawn at the date of this PDS, to the
inclusion in this PDS of:
We may disclose your information (or parts thereof)
to external parties including:
• persons and companies who provide
administrative, distribution and other
services for us;
• persons and companies who act on our
behalf in the operation of our business from
time to time;
• government authorities or other bodies as
required by the law; and
• credit reporting agencies.
We may also disclose your information to external
parties on your behalf, such as your financial
adviser, unless you have instructed otherwise,
unless you opt out.
15.9.2
15.9.3
15.9.4
We may use your information on occasion, to
advise you about other products offered by us
but we will give you the opportunity to opt out of
receiving these direct marketing communications.
Please contact Willmott Forests should you wish
to update, or request access to, your information
or if you have any queries regarding this statement
or our Privacy Policy.
If you default under the terms of your 12 Month
Interest Free Loan Agreement your personal
information may be provided to an external
Credit Reporting agency.
(b) the CBA Loan Agreement and various
Schedules from page 107-139; and
(b) other references to the CBA,
in the form and context in which they are included.
The CBA has not made or consented to any
other statement in this PDS. The CBA has not
caused or authorised the issue of this PDS.
15.10.8
Willmott Forests Investment Management Pty Ltd
has given and has not, before the draft of this
PDS, withdrawn its consent to be named in
this PDS in the form and context of which it is
named, and has consented to the inclusion of
the statements in relation to WFIM, in the form
and context in which they are included.
15.11
Cooling off
Further information on how to handle your personal
information is provided in our Privacy Statement
which can be located on our website –
www.willmottforests.com.au
15.10
Consents
15.10.1
KPMG has given, and has not before the date of
this PDS, withdrawn its consent to the Taxation
Report on page 56 being included in this PDS
in the form and context in which it is included.
15.10.2
(a) the various CBA Loan Application forms
from page 91-106;
Forsci Pty Ltd has given, and has not before the
date of this PDS, withdrawn its consent to the
Independent Forester’s Report on page 40 being
included in this PDS in the form and context in
which it is included.
If the Project is considered a “liquid” (as defined
in the Corporations Act) managed investment
scheme; and you invest in the Project as a “retail”
client (as defined in the Corporations Act), you
may be entitled to a 14 day cooling off period
commencing from the earlier of:
(a) the date you receive confirmation of your
investment; or
(b) five business days after the issue of Woodlots
to you as per your application.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
71
15.0 Further Information
continued
If, during this 14 day period, you decide that you
no longer wish to invest in the Project, please
notify us in writing and include your signature.
(e) we may obtain information about you or
any beneficial owner of a Woodlot from
third parties if we believe this is necessary
to comply with AML/CTF Laws;
We reserve the right to seek further information
from you to clarify that you are investing as
a retail client. If on receipt of your notification,
we determine that you are entitled to “cool off”,
we will refund your investment and return the
invested funds to you. In accordance with the
Corporations Act, the amount refunded will be
adjusted to account for any tax or duty paid or
payable by you. You may also be charged any
reasonable administrative costs incurred by us
in relation to the acquisition and termination of
your investment. The right to “cool off” does
not apply in certain circumstances including:
(f) you will inform us if you become known by a
name other than the name provided on the
application form while you are a holder of
Woodlots; and
(g) in order to comply with AML/CTF Laws we
may be required to take action, including:
(i) delaying or refusing the processing of any
application for Woodlots; or
(ii) disclosing information that we hold about
you or any beneficial owner of the Woodlots
to our related bodies corporate or services
provider or any relevant regulators of
AML/CTF Laws (whether in or outside
of Australia).
(a) if the Project is considered to be non-liquid (as
defined in the Corporations Act) at the time the
Woodlot is issued to you, the Grower; or
Identification information and documents
To comply with our obligations under the
anti-money laundering and counter-terrorism
financing legislation, we must collect certain
information about each Grower, supported
by relevant identification documents.
(b) if you exercise your rights or powers as a
Grower in the Project during the 14 days.
Whether you have a right to “cool off” in a particular
case is likely to depend on the circumstances
of the Project at the time your application is
accepted and your Woodlot(s) are issued.
15.12
The Responsible Entity and CBA is bound by
laws about the prevention of money laundering
and the financing of terrorism, including the
Anti-Money Laundering and Counter-Terrorism
Financing Act 2006 (“AML/CTF Laws”). By
applying to invest in the Project you agree that:
(a) you do not subscribe to the Project under an
assumed name;
(b) any money used by you to invest in Woodlots
is not derived from or related to any criminal
activities;
(c) the proceeds of your investment will not be
used in relation to any criminal activities;
(d) if we ask, you will provide us with additional
information we reasonably require for the
purposes of AML/CTF Laws (including
information about a holder of Woodlots,
any beneficial interest in the Woodlots,
or the source of funds used to invest);
72
Examples of identification documents include
driver’s licences and passports for individuals,
and evidence of registrations for entities such
as companies. The documents you will need to
provide are listed in the form you complete at the
time of applying for an investment in the Project.
Anti-money laundering
Willmott Forests – Premium Forestry Blend Project 2009 PDS
15.13
Collection of Tax File Numbers
Collection of tax file numbers is authorised,
and their use and disclosure strictly regulated
by tax laws and the Privacy Act. It is not an
offence to not provide your tax file number to
the Responsible Entity. If you do not provide your
tax file number and do not claim an exception,
the Responsible Entity is required to deduct tax
from your distributions at the highest marginal
tax rate plus the Medicare levy.
16.0 Glossary of Terms
In this PDS and any Supplementary PDS, these words and
phrases have the following meanings:
Biofuel
12 Month Interest Free Loan Agreement
Biomass
The agreement between Willmott Finance Pty Ltd and
a Grower whereby interest free loans are extended to
an approved Applicant.
An amount (mass) of material generated by a living organism.
2009 Application Form
Carbon Credits include any legal, commercial or other rights,
interests or benefits or credits in relation to carbon sequestration
generated by or otherwise attributable to any existing or
future tree or forest which may be recognised under any
current or future carbon, emissions or forestry scheme.
The Application Form on page 81 of the PDS.
Agist
A non-depletable biological material.
Carbon Credits/Carbon Sequestration Rights
The grazing of stock on land.
Agreements
The Agreements comprise the Land Tenure Agreement,
Land Sourcing and Forestry Management Agreement, and
the 12 Month Interest Free Loan Agreement (if applicable). The
content of these agreements (except for the CBA Loan
Agreement) are described on pages 65 to 70.
Applicant
The person or corporation applying for Woodlots.
Application Price
The Application Price is $5,000. This price does not include
an allowance for GST as GST is not expected to be payable
in respect of the Application Price.
If GST is found to be payable in respect to the Application Price,
then where a Grower has paid the application price, then:
Carbon Neutral
Refers to neutral (meaning zero) total carbon release, brought
about by balancing the amount of carbon released with the
amount sequestered or offset.
Carbon Sequestration
Plantations sequester (store) carbon while they are growing.
Plantations therefore can contribute to the global effort to
reduce atmospheric carbon dioxide levels.
Clear Fell/Clear Fall
The final cutting down or logging of the trees from the plantation.
Code of Forestry Practices
The Willmott Forests Timber Plantation Practices Code dated
July 2000.
Commonwealth Bank of Australia (“CBA”)
(i) by the cash option, the Grower will be obliged to pay
any applicable GST in respect of the application price on
receipt of a tax invoice from the Responsible Entity; or
Commonwealth Bank of Australia (ABN 48 123 123 124).
(ii) by the financing option the Loan Amount will be increased
by an amount referable to the applicable GST in respect of
the Application Price.
The committee established by the Responsible Entity under
Part 5C.5 of the Corporations Act and described in section
15.2.2 on page 64 of the PDS.
AS 4360 Risk Management
Compliance Plan
Risk Management Standard AS 4360 contains a process
that sets a benchmark for the review of the risk management
process.
The compliance plan prepared by the Responsible Entity
under Part 5C.4 of the Corporations Act and described in
section 15.2.3 on page 64 of the PDS.
ASIC
Constitution
Australian Securities and Investments Commission.
The Constitution dated 11 June 2008 for the Project as
amended from time to time.
Compliance Committee
ATO
Australian Taxation Office.
Corporations Act
Corporation Act 2001 (Cth), as amended.
Bioenergy
Energy derived from the burning or decomposition of organic
matter (for example, wood or straw).
Determined Value
Willmott Forests’ reasonable valuation of trees.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
73
16.0 Glossary of Terms
continued
Early Repayment Administration Fee
Harvesting
A fee charged for the administration of an Early Repayment
Fee payable by a CBA approved borrower to CBA.
Harvesting or harvested operations in relation to the Trees
includes, Thinning and Clear Fell (except in relation to Radiata
pine which is sold as standing timber).
Early Repayment Fee
Where a borrower repays in advance any payments that
is due and payable under the Loan Agreement, the CBA
may credit or debit to you a Break Fee for any loss of profit
incurred as a consequence.
Independent Forester
An expert in forestry science and management who may be
contracted by Willmott Forests in relation to forestry operations.
Insurance Administration Fee
Force Majeure
For the purposes of the Land Sourcing and Forestry
Management Agreement, force majeure includes any act
of God, strike, lock out or other interference with work, war
declared or undeclared, blockade, disturbance, lightning,
fire, earthquake, storm, flood, snowfall, hail, ice, explosion,
governmental or quasi-governmental restraint, expropriation,
prohibition, intervention, direction or embargo, unavailability or
delay in availability of equipment or transport, inability or delay
in obtaining governmental or quasi-governmental approvals,
consents, permits, licences, authorities or allocations and
any other cause which is not reasonably within the control
of Willmott Forests.
Forestry Right
Refer to section 15.5.24 on page 67 for information on
forestry right.
Fossil Fuel
A hydrocarbon deposit, such as petroleum, coal, or natural
gas, derived from living matter of a previous geologic time
and used for fuel.
Greenhouse Gas
Any of the atmospheric gases (for example, carbon dioxide,
water vapor, and methane) that contribute to the greenhouse
effect – the phenomenon whereby the earth’s atmosphere traps
solar radiation resulting in increased atmospheric temperatures.
Grower
An Applicant who has been accepted into the Willmott Forests
Premium Forestry Blend Project.
Growth rate
The amount of timber grown in terms of Wood Volume per
Woodlot per annum usually expressed as MAI.
GST
Goods and Services Tax.
74
Willmott Forests – Premium Forestry Blend Project 2009 PDS
A fee charged for the administration of insurance.
Land Sourcing and Forestry Management
Agreement
A contract for the sourcing of land and the establishment,
development, maintenance and harvesting of a Grower’s
trees in the form for the time being specified by the
Responsible Entity.
Land Tenancy
A form of occupation or possession of land granted by the
Responsible Entity to the Grower under the Land Tenure
Agreement.
Land Tenure Agreement
One or more agreements or other instruments under which
the Responsible Entity grants to the Grower a right to enter,
occupy and use Land which may include a Lease Agreement
or licence.
Lease/Lease Agreement
A lease or sub-lease in the form for the time being specified by
the Responsible Entity.
Loan Agreement
The Loan agreement between the CBA and the Borrower
for loan finance.
Loan Establishment Fee
A Loan Establishment Fee payable by a CBA approved
borrower to the CBA.
MAI
The Mean Annual Increment which is the average Wood
Volume expected to be grown on the plantation land
(taking into account its site quality) annually per Woodlot.
Mill Door Price (Wharf Gate Prices)
Delivered to Mill Door/Wharf Gate prices take account of
harvesting cost (these cost are separate to and distinct from
the management fee paid to the Manager) and haulage
(transported timber).
Monies Owing
Radiata pine (means Pinus radiata)
Principal, interest and all other monies actually or contingently
owing under the 2009 Application Form or the 12 Month
Interest Free Loan Agreement.
A softwood timber used to produce sawlogs and pulplogs.
The primary use of softwood sawlogs sold in Australia is the
production of structural sawn timber used in house construction
and this market is dominated by softwood.
Monthly Loan Service Fee
A Monthly Loan Service Fee is payable by a CBA approved
borrower to CBA.
Mortgaged Property
Means the Woodlots (and any part thereof) and includes
the Trees.
Payment Default Fee
Under the 12 Month Interest Free Loan Agreement, Willmott
Finance may charge a payment default fee for any payment
which is rejected by the Grower’s nominated financial institution.
Radiata pine Amount
The proceeds from the harvesting (if applicable) and sale of
Radiata pine timber on Woodlots referable to the Pool less
any expenses for which the Responsible Entity is entitled
to under the Constitution.
Renewable Energy
Energy that can be replaced without the burning of fossil fuels
(e.g. biomass, wind, solar).
Responsible Entity
Willmott Forests Limited (ABN 17 063 263 650).
PDS
This Product Disclosure Statement for the Willmott Forests
Premium Forestry Blend Project.
Sawlogs
Plantations
The higher quality timber derived from plantation thinnings
and clear fell; utilised for such products as housing frames,
furniture etc.
All the land on which trees are planted in connection with
the Project.
Seedlings
Pool
High quality She-oak, Radiata pine and Silky Oak cuttings or
seedling material.
Each Woodlot issued during a financial year forms part
of the pool in respect of that financial year.
She-oak (means Casuarina)
Preservation
A fast growing biomass species that can be converted into
charcoal, high density pellets or renewable energy. Species
of She-oak planted may include:
The highest quality pulp log timber derived from plantation
thinnings and utilised for treated pine products, pine poles etc.
• River She-oak (Casuarina cunninghamiana);
Product Ruling
• Coast or Beach She-oak (Casuarina equisetifolia); and
Product Ruling PR 2008/60 issued by the Australian Taxation
Office.
• Swamp She-oak (Casuarina glaucal).
She-oak Amount
Project
The Project known as the Willmott Forests Premium Forestry
Blend Project (ARSN 131 549 589) and which is described
in this PDS.
The proceeds from the harvesting and sale of She-oak biomass
on Woodlots referable to the Pool less any expenses for which
the Responsible Entity is entitled to under the Constitution.
Silky Oak (means Grevillea)
Project Land
The land allocated or to be allocated to Growers investing
in the Project.
A high value sawn hardwood timber resource suitable for
furniture and decorative veneers.
Silky Oak Amount
Quality System AS/NZS ISO 9001 (Quality Endorsed)
A documented quality system accredited under the
International Organisation for Standardisation. The
accreditation for Willmott Forests covers the quality
management system, client services and all other
forestry and investment related activities.
The proceeds from the harvesting and sale of Silky Oak timber
on Woodlots referable to the Pool less any expenses for which
the Responsible Entity is entitled to be reimbursed under the
Constitution.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
75
16.0 Glossary of Terms
continued
Silviculture Operations
Willmott Finance
Specific plantation management operations undertaken by
foresters to enhance plantation growth. Silvicultural operations
can include fertiliser application, weed control and Thinning
operations.
Willmott Finance Pty Ltd (ABN 16 081 274 811).
Stand (Volume)
Woodlot
An interest in, at the time of issue of the Woodlot, approximately
5,200 square meters (m2) of land and a beneficial interest in
the relevant forestry right.
The available volume of timber within the plantation.
Wood Volume
Stocking
The number of seedlings planted per Woodlot.
The amount of timber extracted from the plantation during
thinnings and clear fell, in cubic meters (m3) or tonnes per
Woodlot.
Stocking Guarantee
Refer to section 15.1.12 on page 63 for information on the
Stocking Guarantee.
Sustainable Timber Resource
A timber crop which could be repetitively grown on a site
without reduced productivity.
Thinning
The first cutting down or logging of the Trees from a
Plantation.
TIMO
Timberland Investment Management Organisation.
Trees
The actual growing timber from which distributions to
Growers will be generated.
URS
URS Australia Pty Ltd (ABN 46 000 691 690).
WFIM
Willmott Forests Investment Management Pty Ltd
(ABN 50 098 718 837).
76
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Year
Each year in respect of a Pool is a period of 12 months
commencing on, or on the anniversary of, the completion
of planting of seedlings in respect of the Pool. For example,
“Year 1” is the 12 month period commencing on the day
following completion of the planting of seedlings in respect
of the relevant Pool. Typically, planting will not be completed
until approximately 15-18 months after the end of the income
year during which the Grower is issued Woodlots.
Yield
The total Wood Volume production extracted from all
Thinnings and Clear Fell per Woodlot.
17.0 Application Forms
How to complete the application forms
A comprehensive guide to completing the various forms can be obtained from Willmott Forests.
Form 1 – 2009 Application
(Page 81)
• All applicants must complete, sign and witness this form.
• You will need to provide the required identification and verification material for Anti-money Laundering
and Counter Terrorism Financing (AML/CTF) Act purposes. Refer to page 78-79 for further information.
Choose Payment Option
Form 2 – 12 Month Interest Free Loan Application
(Page 85)
Form 4(a) – CBA Loan Application
(Page 91)
• Applicants choosing this option must complete and sign
this form.
• Applicants choosing this option must complete and
sign this form.
• Only Applicants applying for over 20 Woodlots with this
options are required to attach a current tax return and
payslip.
• Applicants are required to submit certified copies
of a 100 point identification and verification check.
• Refer to page 87 for additional documentation required.
• Applicants are required to attach copies of last two
tax returns or last tax return and a recent payslip or
two most recent payslip confirming income.
• Refer to page 93 for additional documentation required.
Form 3 – Method of Payment:
Cash or 12 Month Interest Free Loan
(Page 89)
• In the event that all necessary documentation is not
provided to CBA, your Loan Application will by default go
into the 12 Month Interest Free Loan unless ‘opted-out’
by ticking the relevant box in this form (refer to page 69).
• Applicants choosing to pay cash or use the 12 Month
Interest Free Loan payment option are required to complete
and sign this form.
Form 4(b) – CBA Direct Debit Requests
(Page 99)
• Applicants choosing to undertake the CBA Loan option
are required to complete and sign the Direct Debit
Requests form.
Form 4(c) – CBA Loan Application: Guarantor
(Page 101) (if applicable)
• Applicants requiring a Guarantor to qualify for their
CBA Loan must complete and sign this form.
Send all correspondence and applications to:
Willmott Forests Limited
Locked Bag 4011
South Melbourne, Victoria 3205
Willmott Forests – Premium Forestry Blend Project 2009 PDS
77
Anti-money Laundering Questions and Answers
What are the new anti-money laundering laws?
The Government has introduced new laws in the Anti-money
Laundering and Counter Terrorism Financing (AML/CTF) Act
2006. The new laws require businesses that provide certain
financial services to identify their customers before providing
a service and report suspicious transactions.
What is money laundering?
Money laundering is the process criminals use to disguise the
source of illegally obtained money so that it appears to have
come from legitimate sources.
What is terrorist financing?
Terrorist financing is the act of providing financial support to
terrorists or terrorist organisations to enable them to carry
out terrorist acts.
Individual
Please provide a certified copy of:
• an Australian driver’s licence that contains a photograph
of the licence/permit holder; or
• an Australian passport; or
• a foreign passport or similar travel document containing
a photograph and the signature of the person.
Company
Please provide the following:
Why has the new legislation been introduced?
• the full name of the company as registered by ASIC;
Australia has implemented new laws to improve its existing
anti-money laundering and counter terrorism financing system
and bring it in line with international standards. The new laws
will make it harder for criminals to use the proceeds of crime
and terrorists to receive money to carry out terrorist acts.
• the ACN issued to the company;
What does the new legislation mean for me?
When applying for a new product/s, individuals will need to
provide verification information such as a certified copy of
a passport or driver’s licence. For non-individuals such as
companies and trusts, more information will be required,
for example a certified copy of an ASIC certificate of
registration or trust deed. Please refer below for the required
identification and verification material for AML/CTF purposes.
Can a tax file number be used to verify my
identity?
• the full address of the registered office of the company;
• the full address of the principal place of business of the
company;
• whether the company is registered as a proprietary or a
public company;
• a certified copy of the certificate of registration issued by
ASIC; for a proprietary company (other than a licensed
company referred to below), the full name and address
of each beneficial owner; and
• if the company is licensed and subject to regulatory
oversight by a Commonwealth, State or Territory regulator
in relation to its activities as a company, a search of the
license or other records of the relevant or if the company
is listed, a search of the relevant domestic financial market.
No. A tax file number cannot be used or disclosed to
establish or confirm your identity.
Trust or superannuation fund
Please provide:
Will my personal information be safe?
• the full business name of the trustee in respect of the trust,
the type of trust, the name of the trustees and the country
in which the trust was established;
All financial services providers covered by the new legislation
are required to keep client information in a safe and secure
environment, as required by the AML/CTF Act and the
Privacy Act 1988 (Privacy Act). The Privacy Act covers
the collection, use, disclosure, quality and security of
personal information. You can view our privacy statement
on www.willmottforests.com.au
78
AML/CTF identification and verification documentation
If you are investing directly or through a financial planner,
adviser or via an authorised representative of Willmott Forests
Limited then you will need to provide us with the following
identification and verification material for AML/CTF purposes.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
• the name and address of each beneficiary of class of
beneficiary in respect to the trust;
• for each trustee which is an individual, please also provide
the documentation required for individuals (above); or
• for each trustee which is a company, please also provide
the documentation required for companies (above).
Partnership
Please provide:
• documentation required for individuals (above) for each one
of the partners.
• an officer or authorised representative that holds an
Australian Financial Services Licence and has two or more
continuous years of service with one or more licences;
• a member of:
• a certified copy or certified extract of the partnership
agreement; or
- the Institute of Chartered Accountants in Australia;
• an extract of minutes of a partnership meeting;
- the National Institute of Accountants; with two or more years
continuous membership.
• the full name and residential address of each partner
in the partnership; and
- CPA Australia; and
• documentation evidencing the full names of the partnership
(where relevant) and the country in which the partnership
was established.
The authorised person will need to write in English. Certification
must include the name, address, type of authority and
telephone number of certifying authority.
Who can certify your documents?
To have documents certified, please take the original documents
and photocopies to any one of the following persons for
him/her to certify that they are true and correct copies
of the originals:
Faxed copies of certified documents do not comply with our
identification requirements and are not acceptable.
• a justice of the peace or bail justice;
• a barrister or solicitor of the Supreme Court;
• a judge or a magistrate;
• a chief executive officer of a Commonwealth court;
• a registered/deputy registrar of a court;
• a public notary;
• a police officer;
• a permanent employee of Australia Post with two or more
years of continuous service who is employed in an office
supplying postal services to the public;
• an agent of Australia Post who is in charge of an office
supplying postal services to the public;
• an Australian diplomatic or consular officer;
• an officer with two or more continuous years of service with
one or more financial institutions;
• a finance company officer with two or more continuous
years of service with one or more finance companies;
Willmott Forests – Premium Forestry Blend Project 2009 PDS
79
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Willmott Forests – Premium Forestry Blend Project 2009 PDS
Form 1 – 2009 Application
Willmott Forests Premium Forestry Blend Project
1. This 2009 Application Form accompanies the PDS dated
20 August 2008 and issued by Willmott Forests Limited
(ABN 17 063 263 650) in which the offer of Woodlots in the
Willmott Premium Forestry Blend Project – 2009 Product
Disclosure Statement (“Project”) is made.
2. A person who gives another person access to this 2009
Application Form must, at the same time and by the same
means, give that other person access to the PDS and any
supplementary PDS issued by Willmott Forests Limited.
3. While the PDS is current and the offer for Woodlots in the
Project is open, Willmott Forests Limited and any authorised
representative or independent licensed financial adviser
who has provided an electronic copy of the PDS will provide
paper copies of the PDS, and any Supplementary PDS
issued in respect of the Project and the relevant 2009
Application Form, on request and without charge.
4. Unless otherwise specified in this 2009 Application Form,
terms defined in the PDS have the same meaning in this
2009 Application Form.
5. Willmott Forests Limited is not obliged to redeem, repurchase
or cause to be repurchased your interest in the Project.
6. By signing the 2009 Application Form, each Grower
acknowledges and agrees:
(a) that, prior to completing the 2009 Application Form, the
Grower was given access to and has read and understood
the PDS, whether in electronic or printed form;
(b) in relation to the Project, that Willmott Forests Limited
may accept or reject this Application in respect of
Woodlots in whole or in part;
(c) in relation to the Project, that Willmott Forests Limited
will use reasonable endeavours to arrange insurance
on the Growers behalf and that the Grower will pay the
relevant premium on receipt of the relevant invoice;
(d) the Project is intended to be a medium to long term
investment and the Grower acknowledges the risks
of the Project, as set out in section 5 on page 18 of the
PDS; and
(e) if GST is found to be payable in respect to the Application
Price for Woodlots, that if the Grower has paid the
application price, then:
(i) by the cash option, the Grower will be obliged to pay
any applicable GST in respect of the application price
on receipt of a tax invoice from the Responsible Entity;
or
(ii) by the financing option the Loan Amount will be
increased by an amount referable to the applicable
GST in respect of the Application Price.
7. By signing the 2009 Application Form, each Grower
(a) agrees to be bound by the terms of the Constitution; and
(b) appoints Willmott Forests Investment Management Pty Ltd
as its nominee to hold on trust any forestry right granted in
respect of the Project on the terms described on section
15.5.24 on page 67, as amended from time to time.
8. Power of attorney
8.1 The applicant irrevocably appoints any Director for the time
being of Willmott Forests Limited to be the applicant’s attorney
(“Willmott Attorney”) from the date of this Power of Attorney
to the expiration of the Land Tenure Agreement, Land
Sourcing and Forestry Management Agreement and
the 12 Month Interest Free Loan Agreement in respect
of the Project (collectively the “Willmott Documents”);
8.2 The Willmott Attorney may do in the name of the applicant
and on the applicant’s behalf everything necessary or
expedient to:
(a) execute and deliver the Willmott Documents;
(b) complete blanks and make amendments, alterations
or additions to the Willmott Documents considered
necessary or desirable by the Willmott Attorney;
(c) execute and deliver any other documents or do any
other acts which are referred to in the Willmott Documents
which are ancillary or related to them or the Constitution
or the transactions contemplated by them or the
Constitution, in the absolute discretion of the
Willmott Attorney;
(d) appoint one or more substitute attorneys to exercise
one or more of the powers given to the Willmott Attorney
and to revoke any of those appointments and within this
Power of Attorney, “Willmott Attorney” includes a substitute
attorney appointed by the Willmott Attorney under this
clause; and
(e) if applicable, stamp and register this Power of Attorney.
8.3 The applicant declares all acts, matters and things done by
the Willmott Attorney in exercising powers under this Power
of Attorney will be as good and valid as if they had been
done by the applicant and agrees to ratify and confirm
whatever the Willmott Attorney does in exercising powers
under this Power of Attorney.
8.4 The applicant indemnifies the Willmott Attorney against liability,
loss, cost, charges or expenses arising from the exercise or
powers under this Power of Attorney.
8.5 The applicant declares that a person (including, but not
limited to, a firm, body corporate, unincorporated association
or authority) who deals with the Willmott Attorney in good
faith may accept a written statement signed by the Willmott
Attorney to effect that this Power of Attorney has not been
revoked as conclusive evidence of that fact.
The applicant declares that the applicant and a person
(including, but not limited to, an executor, administrator,
successor, substitute or assign) claiming under the applicant
are bound by anything done by the Willmott Attorney in
exercising powers under the Power of Attorney.
9. Privacy
The applicant declares that they agree to the disclosure and
use of information as contemplated in the section of the
PDS titled “Privacy”, refer to section 15.9, on page 71 and,
if applicable, the 12 Month Interest Free Loan Application
(if applicable).
10. Adviser authority
By ticking this box the applicant indicates that they do not
wish for their adviser to have access to their investment,
terms or finance information.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
81
Form 1 – 2009 Application
continued
Willmott Forests Premium Forestry Blend Project
Dealer and adviser information
DEALER DETAILS
ADVISER DETAILS
Dealer Group
Title
First Name
Wealth Focus Pty Ltd
Contact Name
Surname
AFSL Licence Number
AFSL Authorised Representative Number
314872
Dealer/Adviser Stamp (if applicable)
Address
Wealth Focus Pty Ltd
PO Box 760
Suburb and State
Postcode
Manly
Telephone BH
NSW 1655
Mobile
Facsimile
Email
Tel: 1300 55 98 69
Personal details to be completed by all individuals including company directors, personal trustees and guarantors.
PERSONAL DETAILS – APPLICANT 1
PERSONAL DETAILS – APPLICANT 2
Title
Title
First Name
Second Name
Surname
Date of Birth
Second Name
Surname
Date of Birth
CORPORATE/TRUST APPLICANT
Company/Trust Name (Company/Trust Director to complete personal details)
CORPORATE/TRUST APPLICANT
Company/Trust Name (Company/Trust Director to complete personal details)
ABN/ACN
ABN/ACN
Are you GST registered?
Yes
Suburb and State
Postal Address (if different from above)
Telephone BH
No
Suburb and State
Postcode
Postal Address (if different from above)
Postcode
Mobile
Yes
OTHER DETAILS
Current Residential Address (not PO Box)
Postcode
Suburb and State
Are you GST Registered?
No
OTHER DETAILS
Current Residential Address (not PO Box)
82
First Name
Facsimile
Suburb and State
Telephone BH
Email
Email
Occupation
Occupation
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Postcode
Mobile
Facsimile
Form 1 – 2009 Application
continued
Willmott Forests Premium Forestry Blend Project
PAYMENT OPTIONS Please fill in number of Woodlots below:
CASH
x Woodlots
12 MONTH INTEREST FREE LOAN (Blue Form)
x Woodlots
FINANCE (Yellow Form provided by the CBA)
Principal and Interest Loan
Loan Period
x Woodlots
3 Years
(Please tick relevant box)
5 Years
7 Years
10 Years*
12 Years*
* A minimum investment of 7 Woodlots is required under the 10 and 12 Year finance option.
Interest Only Option (first 36 months interest only)
Yes
No
(Please tick relevant box)
Interest Rate Option
Fixed#
Variable
(Please tick relevant box)
# A minimum of 2 Woodlots is required for fixed interest rate loans.
Important: There is a PDS dated 20 August 2008 with information about investing in Woodlots in the Willmott Forests Premium Forestry
Blend Project (ARSN 131 549 589). Before signing the 2009 Application Form, applicants should read the PDS and any supplementary
product disclosure statements containing information about investing in the Project. An investment in the Project is not a deposit with
or other liabilities of Commonwealth Bank of Australia (“CBA”) ABN 48 123 123 124 or of any CBA Group company, and is subject to
investment risk including possible delays in repayment and loss of income or principal invested. Neither the Responsible Entity, CBA nor
any other CBA Group company guarantees the performance of the Project, the repayment of capital from the Project or any particular
rate of return.
Executed as a deed
Signed, sealed and delivered
Signature of 1st Applicant/Director
APPLICANT 1 SIGN HERE
Signature of Witness
Date
WITNESS SIGN HERE
Print Name
Print Name
Signature of 2nd Applicant/2nd Director/Secretary
Signature of Witness
APPLICANT 2 SIGN HERE
Date
Print Name
WITNESS SIGN HERE
Date
Date
Print Name
For Company/Trust Applicant Only – Are you a Sole Director?
Yes
No
SUPPORTING DOCUMENTS REQUIRED
• You will need to provide us with the required identification and verification material for Anti-money Laundering and Counter
Terrorism Financing (AML/CTF) purposes. (Refer to page 78-79).
Processing of your application may be delayed if you do not supply this information with your application.
FOR OFFICE USE ONLY – APPLICATION ACCEPTANCE
Accepted on behalf of Willmott Forests Limited by authority of the Directors:
SIGN HERE
Date
Signature of Director or Authorised Signatory
Willmott Forests – Premium Forestry Blend Project 2009 PDS
83
This page has been intentionally left blank.
84
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Willmott Finance Limited
(ABN 16 081 274 811)
Form 2 – 12 Month Interest Free Loan Application
Willmott Forests Premium Forestry Blend Project
PERSONAL DETAILS – APPLICANT 1
PERSONAL DETAILS – APPLICANT 2
Title
Title
First Name
Second Name
Surname
Date of Birth
First Name
Second Name
Surname
Date of Birth
Drivers Licence (please supply certified hard copy)
Drivers Licence (please supply certified hard copy)
Current Residential Address (not PO Box)
Current Residential Address (not PO Box)
Suburb and State
Postcode
Suburb and State
Postcode
How many years have you been a resident at the above address
How many years have you been a resident at the above address
Postal Address (if different from above)
Postal Address (if different from above)
Suburb and State
Telephone BH
Postcode
Mobile
Facsimile
Suburb and State
Telephone BH
Postcode
Mobile
Facsimile
Email
Email
Employer
Employer
Occupation
Occupation
Number of Years Employment
Number of Years Employment
Employment Status (full or part time, casual, self)
Employment Status (full or part time, casual, self)
Previous Employer (only if less than 2 years prior to current employment)
Previous Employer (only if less than 2 years prior to current employment)
Marital Status
Marital Status
Number of Dependant Children
Number of Dependant Children
Willmott Forests – Premium Forestry Blend Project 2009 PDS
85
Form 2 – 12 Month Interest Free Loan Application
continued
Willmott Forests Premium Forestry Blend Project
CORPORATE/TRUST APPLICANT
Company Name or Trustee
Registered Business Address
Contact Person
Suburb and State
Trust Name
Postal Address (if different from above)
ABN/ACN
Suburb and State
Telephone BH
Mobile
Are you a Sole Director?
Facsimile
Yes
Email
No
Copy of original deed/trust deed is required. Please refer to AML/CTF on page 78-79.
DETAILS OF 12 MONTH INTEREST FREE LOAN
12 MONTH
INTEREST FREE
LOAN
86
x Woodlots
Willmott Forests – Premium Forestry Blend Project 2009 PDS
(Please fill in number of Premium Forestry Blend Woodlots below):
Postcode
Postcode
Form 2 – 12 Month Interest Free Loan Application
continued
Willmott Forests Premium Forestry Blend Project
STATEMENT OF INCOME
Current Gross Salary
$
Other Income Details
$
STATEMENT OF ASSETS OF APPLICANT
Residential Property
Estimated Value
Investment Property
Estimated Value
STATEMENT OF LIABILITIES OF APPLICANT
Loans
$
Residential Property
$
Payments
Minimum Monthly Balance Owing
$
$
$
$
$
$
$
$
$
$
$
$
Investment Property/Shares
$
Cash/Shares/Deposits
Estimated Value
Other Assets (vehicles etc.)
Estimated Value
$
Personal Loans
Other Assets (contents etc.)
$
$
$
Estimated Value
$
$
$
$
$
$
$
$
$
$
Limit
$
$
$
Total Assets
$
$
$
Credit Card
Applicant
Joint
Company Trust
$
Total Commitment Total Liabilities
$
$
Please Tick
I/We have enclosed our tax return/s
I/We have enclosed our pay slip/s
SUPPORTING DOCUMENTS REQUIRED
Only applicants applying for over 20 Woodlots must supply the following supporting information with your application:
• Individuals must provide a copy of last tax return and current pay slip.
• Self employed Applicants must provide their tax returns for the past two financial years.
• Trusts and companies are required to provide audited financial statements or tax returns for the past two financial years.
• A Guarantor may be required to guarantee any borrowing by a company or trust. A Guarantor Statement can be obtained
from Willmott Forests.
• Please refer to page 78-79 on who can verify your documents.
Processing of your application may be delayed if you do not supply this information with your application.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
87
Form 2 – 12 Month Interest Free Loan application
continued
Willmott Forests Premium Forestry Blend Project
I/We hereby apply to Willmott Finance Pty Ltd for 12 month interest free loan, in accordance with the 12 Month Interest Free Loan
Agreement, in consideration of the amount that is due and payable by me under the 2009 Application Form for the Willmott Forests
Premium Forestry Blend Project which I/we have completed and signed.
I/We warrant that all of the personal information including asset and liability information provided by me at the date of my application is
true and correct. I/We acknowledge that Willmott Finance Pty Ltd is not obligated to accept my 12 month interest free loan application.
PRIVACY ACT 1988 (Cth) CONSENT AND DECLARATION FOR THE PURPOSES OF THE CONSUMER CREDIT CODE
Notice of disclosure of your credit information to a credit reporting agency (Privacy Act 1988).
I/We acknowledge that Willmott Finance Pty Ltd may give information about me/us to a credit reporting agency for the following purposes:
• to obtain a consumer credit report about me/us; and/or
• to allow the credit reporting agency to create or maintain a credit information i.e. containing information about me/us.
Willmott Finance Pty Ltd may give information which is required or permitted to be given to a credit reporting agency by the Privacy Act,
including:
• identity particulars – my/our name(s), including any known aliases, sex, address (and the previous two addresses), date of birth, name
of employer and drivers licence number;
• my/our application for commercial credit – the fact that I/we have applied for credit and the amount;
• the fact that Willmott Finance Pty Ltd is a current credit provider to me/us;
• loan repayments which are overdue by more than 60 days, and for which debt collection action has started;
• advice that my/our loan repayments are no longer overdue in respect of any default that has been listed;
• information that, in the opinion of Willmott Finance Pty Ltd, I/we have committed a serious credit infringement (that is, acted fraudulently
or shown an intention not to comply with my/our credit obligations);
• dishonoured cheques – drawn by me/us for $100 or more which have been dishonoured more than once; and
• that Willmott Finance Pty Ltd has ceased to be a credit provider for me/us.
I/We understand this information may be given before, during or after the provision of credit to me/us.
Assessing commercial credit application
I/We agree that Willmott Finance Pty Ltd may obtain a consumer credit report containing information about me/us from a credit reporting
agency for the purpose of assessing my/our application for commercial credit.
Business purpose declaration
I/We declare that the credit to be provided to me/us by Willmott Finance Pty Ltd is to be applied wholly or predominantly for business
or investment purposes (or for both purposes).
Important
You should not sign this declaration unless this 12 month interest free loan is wholly or predominantly for business or
investment purposes. By signing this declaration you may lose your protection under the Consumer Credit Code.
I/We declare that I/we signed this declaration before entering into this credit contract.
Signature of 1st Applicant/Director
APPLICANT 1 SIGN HERE
Date
Wealth Focus Pty Ltd
PO Box 760
Print Name
Manly
NSW 1655
Signature of 2nd Applicant/Director
APPLICANT 2 SIGN HERE
Date
Print Name
88
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Tel: 1300 55 98 69
Willmott Finance Limited
(ABN 16 081 274 811)
Form 3 – Method of Payment:
Cash or 12 Month Interest Free Loan
Willmott Forests Premium Forestry Blend Project
Surname/Company Name
DETAILS OF PAYMENTS
CASH
Payable on application = $
x Woodlots at $5,000 per Woodlot*
NOTE: Cheque must be made payable to the Willmott Forests Premium Forestry Blend Project – Application Account
12 MONTH
INTEREST
FREE LOAN
x Woodlots at $5,000 per Woodlot*
Payable over 12 equal monthly installments (as per 12 Month Interest Free Loan Agreement) = $
Note: Repayments are due on the last business day in Victoria of each month commencing in July following the financial year of the investment.
* Note: This amount does not include any allowance for GST as GST is not expected to be payable in respect of the Application Price. If GST
is found to be payable, then where a Grower has paid the Application Price by:
(a) the cash option, the Grower will be obliged to pay any applicable GST in respect of the Application Price on receipt of a tax invoice from
the Responsible Entity; or
(b) the 12 month interest free loan option, the Loan Amount will be increased by an amount referable to the applicable GST in respect of the
Application Price.
CASH
Cash payments
can be paid by:
Cheque, Credit
Card or Direct
Debit Facility.
Cheque Payment – Attach cheques to Application Form as set out above.
Credit Card Facility – (please advise if you have a daily limit for credit card processing)
Credit Card Type (please tick)
Name of Cardholder
Mastercard
Expiry Date
Card Number
Visa
M M / Y Y
12 MONTH
INTEREST FREE
LOAN
Monthly payments
can be paid by:
Credit Card
or Direct Debit
Facility.
Direct Debit Request Facility
Financial Institution
Account Name
BSB
Account Number
-
By signing here you are authorising each of Willmott Forests Limited or Willmott Finance Pty Ltd to process the payments from my credit card or bank account.
I/We authorise each of Willmott Forests Limited (APCA User ID 067742) or Willmott Finance Pty Ltd (APCA User ID 069471), to arrange for funds to be debited
from my/our account at the financial institution identified above and as prescribed through the Bulk Electronic Clearing System (BECS). In addition Willmott
Forests Limited or Willmott Finance Pty Ltd may debit my/our nominated account any amounts due to it for payment in respect of insurance under the Constitution.
Signature
Signature
SIGN HERE
Date
Print Name (if joint account, all names required)
SIGN HERE
Date
Print Name
Willmott Forests – Premium Forestry Blend Project 2009 PDS
89
Form 3 – Method of Payment:
Cash or 12 Month Interest Free Loan
continued
Willmott Forests Premium Forestry Blend Project
Direct Debit Request Service Agreement
Definitions
•
Account means the account held at your financial institution
from which we are authorised to arrange for funds to be debited.
•
Agreement means this Direct Debit Request Service Agreement
between you and us.
•
Business day means a day other than a Saturday or a Sunday
or a public holiday listed in the State of Victoria.
•
Debit day means the day the payment by you to us is due.
•
Debit payment means a particular transaction where a debit
is made.
•
Direct Debit Request means the Direct Debit Request between
us and you.
•
Us or we means one or more of Willmott Forests Limited
or Willmott Finance Pty Ltd (as the case may be), who
you have authorised by signing a Direct Debit Request.
•
You means the client who signed the direct debit request.
•
Your financial institution is the financial institution where
you hold the account that you have authorised us to
arrange to debit.
1. Debiting your account
1.1 This service agreement covers drawings by one or more
of Willmott Forests Limited or Willmott Finance Pty Ltd (as the
case may be) against your nominated account in all events
covered by any written agreement between us and you.
1.2 By signing a Direct Debit Request, you have authorised
us to arrange for funds to be debited from your account.
If the debit day falls on a day that is not a business day, we
may debit your account on the prior business day.
1.3 By signing the the Direct Debit Request, you acknowledge that,
should the debit be dishonoured, we reserve the right to attempt
to debit your account again, within 5 days of the original
collections date.
2. Changes by us
2.1 We may vary any details of this agreement or a Direct Debit
Request at any time by giving you at least fourteen (14) days
written notice.
If you are uncertain as to when the debit will be processed
to your account, you should enquire directly of your financial
institution.
5. Dispute
5.1 If you believe that there has been an error in debiting
your account, you should notify us directly (03) 9696 1355
(Accounts Receivable) or in writing as soon as possible so
that we can resolve your query more quickly.
5.2 If we conclude as a result of our investigations that your
account has been incorrectly debited we will respond to
your query by arranging a credit into your account to adjust
your account accordingly. We will also notify you in writing
of the amount by which your account has been adjusted.
5.3 If we conclude as a result of our investigations that your
account has not been incorrectly debited we will respond to
your query by providing you with reasons and any evidence
for this finding.
5.4 Should the error be caused by your financial institution
this matter will need to be directly resolved between you
and your financial institution.
6. Accounts
You should check:
(a) with your financial institution whether direct debiting
is available from your account as direct debiting is not
available on all accounts offered by financial institutions;
(b) your account details which you have provided to us
are correct by checking them against a recent account
statement; and
(c) with your financial institution before completing the
Direct Debit Request if you have any queries about
how to complete the Direct Debit Request.
WARNING
If the account details you have quoted is incorrect, you
may be charge a fee to reimburse our costs in correcting
any deductions from:
(a) an account you do not have authority to operate; or
(b) an account you do not own.
3. Changes by you
7. Confidentiality
3.1 You may change the arrangements by notifying us in writing
at lease five (5) business days before the next debit day. Such
changes must be detailed on our ‘Amended Direct Debit
Request Form’ which can be obtained from our website or
alternatively by contacting us on (03) 9696 1355 (Accounts
Receivable).
7.1 We will keep any information (including your account
details) in your Direct Debit Request confidential. We will
make reasonable efforts to keep any such information that
we have about you secure and to ensure that any of our
employees or agents who have access to information
about you do not make any unauthorised use, modification,
reproduction or disclosure of that information.
3.2 If you wish to stop or defer a debit payment you must notify
us in writing at least five (5) business days before the next
debit day. These requests may be directed to us or your
financial institution.
3.3 You may also cancel your authority for us to debit your account
at any time by giving us at least thirty (30) days notice in writing
before the next debit day provided alternative arrangements are
made for any amounts owing us. This notice should be given
to us or your financial institution.
4. Your obligations
4.1 It is your responsibility to ensure that there are sufficient clear
funds available in your account to allow a debit payment to
be made in accordance with the Direct Debit Request.
4.2 If there are insufficient clear funds in your account to meet
a debit payment:
90
(a) you may be charged a fee and/or interest by your financial
institution;
(b) you may also incur fees or charges imposed or incurred
by us;
(c) you must arrange for the debit payment to be made by
another method or arrange for sufficient clear funds to
be in your account by an agreed time so that we can
process the debit payment; and
(d) you should check your account statement to verify that
the amounts Debited from your account are correct.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
7.2 We will only disclose information that we have about you:
(a) to the extent specifically required by law; or
(b) for the purposes of this agreement (including disclosing
information in connection with any query or claim).
8. Notice
8.1 If you wish to notify us in writing about anything relating
to this agreement, you should write to Accounts Receivable,
Willmott Forests Limited, at Locked Bag 4011,
South Melbourne, Victoria 3205.
8.2 We will notify you by sending a notice in the ordinary post
to the address on our records.
8.3 Any notice will be deemed to have been received two (2)
business days after it is posted.
Commonwealth Bank of Australia
(ABN 48 123 123 124)
Form 4(a) – CBA Loan Application
Willmott Forests Premium Forestry Blend Project
PERSONAL DETAILS – APPLICANT 1
PERSONAL DETAILS – APPLICANT 2
Title
Title
First Name
Second Name
Surname
Date of Birth
First Name
Second Name
Surname
Date of Birth
Drivers Licence (please supply certified hard copy)
Drivers Licence (please supply certified hard copy)
Current Residential Address (not PO Box)
Current Residential Address (not PO Box)
Suburb and State
Postcode
Suburb and State
Postcode
How many years have you been a resident at the above address
How many years have you been a resident at the above address
Postal Address (if different from above)
Postal Address (if different from above)
Suburb and State
Telephone BH
Postcode
Mobile
Facsimile
Suburb and State
Telephone BH
Postcode
Mobile
Facsimile
Email
Email
Employer
Employer
Occupation
Occupation
Number of Years Employment
Number of Years Employment
Employment Status (full or part time, casual, self)
Employment Status (full or part time, casual, self)
Previous Employer (only if less than 2 years prior to current employment)
Previous Employer (only if less than 2 years prior to current employment)
Marital Status
Marital Status
Number of Dependant Children
Number of Dependant Children
Existing CBA Customer
Yes
If Yes, Account Number
No
Existing CBA Customer
Yes
No
If Yes, Account Number
If you are not a current CBA customer you will need to complete a 100 Point identification check of any of the below documents that
equate to 100 points. Please tick which of the below you have submitted with this application.
Current Passport
Birth Certificate
Citizenship Certificate
Drivers Licence
Public Service Employee ID Card
Pension or government Healthcare
Written Reference from a Financial Institute
= 70 points
= 70 points
= 70 points
= 40 points
= 40 points
= 40 points
= 40 points
Letter from Current employer (must be employed for over 2 years)
Land Titles Office Record
A Mortgage or Other Instrument of Security held by a Financial Body
Medicare Card
Financial Institution Credit Card, Cashcard or Passbook
= 35 points
= 35 points
= 35 points
= 25 points
= 25 points
Willmott Forests – Premium Forestry Blend Project 2009 PDS
91
Form 4(a) – CBA Loan Application
continued
Willmott Forests Premium Forestry Blend Project
CORPORATE/TRUST APPLICANT
Company Name or Trustee
Registered Business Address
Contact Person
Suburb and State
Trust Name
Postal Address (if different from above)
ABN/ACN
Suburb and State
Telephone BH
Mobile
Are you a Sole Director?
Facsimile
Yes
Postcode
Postcode
Email
No
Copy of original deed/trust deed is required. Please refer to AML/CTF on page 78-79.
DETAILS OF LOAN
(Please fill in number of Premium Forestry Blend Woodlots below):
FINANCE
Principal and Interest Loan
Loan Period
(Please tick relevant box)
x Woodlots @ $5,000 =
3 Years
5 Years
7 Years
Principal Amount
10 Years*
12 Years*
* A minimum investment of 7 Woodlots is required under the 10 and 12 Year finance option.
Interest Only Option (first 36 months interest only)
Yes
No
(Please tick relevant box)
Interest Rate Option
Fixed#
Variable
(Please tick relevant box)
# A minimum of 2 Woodlots is required for fixed interest rate loans.
Capitalisation of Fees
The Loan Establishment Fee and the Stamp Duty Administration Fee by default will be capitalised in the Loan Amount.
Please tick the below box if you do not want to capitalise these fees:
I/We do not wish to capitalise the Loan Establishment Fee and the Stamp Duty Administration Fee in the Loan Amount.
92
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Form 4(a) – CBA Loan Application
continued
Willmott Forests Premium Forestry Blend Project
STATEMENT OF INCOME
Current Gross Salary
$
Other Income Details
$
STATEMENT OF ASSETS OF APPLICANT
Residential Property
Estimated Value
Investment Property
Estimated Value
STATEMENT OF LIABILITIES OF APPLICANT
Loans
$
Residential Property
$
Payments
Minimum Monthly Balance Owing
$
$
$
$
$
$
$
$
$
$
$
$
Investment Property/Shares
$
Cash/Shares/Deposits
Estimated Value
Other Assets (vehicles etc.)
Estimated Value
$
Personal Loans
Other Assets (contents etc.)
$
$
$
Estimated Value
$
$
$
$
$
$
$
$
$
$
Limit
$
$
$
Total Assets
$
$
$
Credit Card
Applicant
Joint
Company Trust
$
Total Commitment Total Liabilities
$
$
Please Tick
I/We have enclosed our tax return/s
I/We have enclosed our pay slip/s
SUPPORTING DOCUMENTATION REQUIRED
Proof of income required
• PAYG – Copy of last two tax returns or last tax return and a recent payslip or two most recent payslips confirming income.
• Self employed – last two tax returns or letter from Accountant re estimated income.
• Other third party – confirmation of income declared (e.g. verified letter from employer).
Proof of identity as per AML/CTF identification information and documents on page 78-79.
Processing of your application may be delayed if you do not supply this information with your application.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
93
Form 4(a) – CBA Loan Application
continued
Willmott Forests Premium Forestry Blend Project
I/We hereby apply to the Commonwealth Bank of Australia ABN 48 123 123 124 (the Lender) for loan finance in consideration of to finance
the amount that is due and payable by me/us in the 2009 Application Form for the Willmott Forests Premium Forestry Blend Project.
I/We warrant that all of the personal information including asset and liability information provided by me/us at the date of my/our application
is true and correct. I/We acknowledge that the CBA Lender is not obligated to accept my/our finance application.
PRIVACY ACT 1988 (Cth) CONSENT AND DECLARATION FOR THE PURPOSES OF THE CONSUMER CREDIT CODE
I/We acknowledge that the CBA Lender or Willmott Forests Limited on its behalf may give information about me/us to a credit reporting
agency for the following purposes:
• to obtain a consumer credit report about me/us; and/or
• to allow the credit reporting agency to create or maintain a credit information file containing information about me/us.
The CBA Lender may give information which is required or permitted to be given to a credit reporting agency by the Privacy Act, including:
- identity particulars – my/our name(s), including any known aliases, sex, address (and the previous two addresses), date of birth, name
of employer and drivers licence number;
- my/our application for commercial credit – the fact that I/we have applied for credit and the amount;
- the fact that the CBA Lender is a current credit provider to me/us;
- loan repayments which are overdue by more than 60 days and for which debt collection action has started;
- advice that my/our loan repayments are no longer overdue in respect of any default that has been listed;
- information that, in the opinion of the CBA Lender, I/we have committed a serious credit infringement
(that is, acted fraudulently or shown an intention not to comply with my/our credit obligations);
- dishonoured cheques – drawn by me/us for $100 or more which have been dishonoured more than once; and
- that the CBA Lender has ceased to be a credit provider for me/us.
• information for assessing whether to authorise a large credit transaction outside of my/our normal transactional activities; and/or
• information used for assisting me/us to avoid defaulting on my/our credit obligations.
I/We understand this information may be given before, during or after the provision of credit to me/us.
I/We consent to the CBA Lender providing to Willmott Forests Limited their agents and consumer credit report or any other credit
information about me/us.
Assessing commercial credit application
I/We agree that the CBA Lender may obtain a consumer credit report containing information about me/us from a credit reporting agency
for the purpose of assessing my/our application for commercial credit.
Business purpose declaration
I/We declare that the credit to be provided to me/us by the CBA Lender is to be applied wholly or predominantly for business or investment
purposes (or for both purposes).
Important
You should not sign the declaration on page 98 unless this loan is wholly or predominantly for business or investment purposes.
By signing this declaration you may lose your protection under the Consumer Credit Code.
I/We declare that I/we signed the declaration on page 98 before entering into this credit contract.
94
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Form 4(a) – CBA Loan Application
continued
Willmott Forests Premium Forestry Blend Project
AUTHORITY TO ACCEPT FACSIMILE INSTRUCTION
(INDIVIDUAL AND CORPORATE BORROWERS)
To
Commonwealth Bank of Australia,
ABN 48 123 123 124 (“the Lender”)
Name
Client
(the “Client”)
Account number/s
Account
or
All accounts (“the Account” or “the Accounts”)
1.
Authorisation
1.1 The Client and the Lender agree that this Authority
applies to the Facsimile Instructions in respect of the
Client’s Accounts.
1.2 The Client acknowledges that:
(i). A Facsimile Instruction received by the Lender which
is complete and regular on its face shall be deemed
to be an original document and to have been sent by
the Client to the Lender and as between the Client
and the Lender shall be conclusive evidence that the
Lender had authority to comply with the Facsimile
Instruction. In the event of any dispute in connection
with a Facsimile Instruction given under this Authority
the Client waives the right to claim that any signature
on the Facsimile Instruction is not genuine or that the
Facsimile Instruction was sent to the Lender without
the authority of the Client.
(ii). The Lender may at its sole discretion refuse to
accept any Facsimile Instructions provided that the
Client is notified of such refusal as soon as practical.
(iii). Facsimile Instructions are not subject to further
written or oral confirmation or verification and the
Client undertakes to reimburse the Lender for all
costs incurred by it if a further written confirmation
sent by the Client causes error or duplication of
payment in the funds transfer process.
1.3 The Client shall pay the Lender’s fees (and any costs or
expenses incurred by the Lender) in connection with this
Authority or payments made pursuant to Instructions.
The Lender is authorised to debit the Client’s accounts
with all such fees costs or expenses.
2.
Contents of Facsimile Instructions and Verification
Procedures
2.1 Facsimile Instructions which include the name and
signature of the Authorised Signatory, and appear
to have been signed in accordance with the Client’s
Account Authority, will be deemed to be valid and
the Lender is authorised to act upon and to debit the
Client’s Account in accordance with the Facsimile
Instructions.
2.2 Upon receipt of the Facsimile Instruction appearing to
comply with paragraph 2.1 the Lender may (but will not
be obliged to) telephone an Authorised Signatory (“the
Verifier”), other than the Authorised Signatory who gave
the Facsimile Instruction, to confirm authenticity of the
Facsimile Instruction. If and only if the Lender elects
to verify the Facsimile Instruction under this clause, the
Lender is entitled to assume when it telephones the
Client’s telephone number and asks to speak to the
Verifier that the person who identifies himself or herself
as the Verifier is that person and if that person verifies
the authenticity of the Facsimile Instruction, the Client’s
Facsimile Instruction is genuine.
2.3 The Lender is not obliged to honour the Client’s
Facsimile Instructions until the verification procedures
described in clause 2.2 have been fully completed or
if it for any other reason doubts the authenticity of the
instruction. Should this result in a payment being delayed
beyond relevant cut off times, the Lender shall not incur
any liability whatsoever to the Client. The Lender will not
be responsible for any delay due to Facsimile
Instructions which are incomplete or unclear.
3.
Release and Indemnity
In consideration of the Lender agreeing to act in
accordance with this Authority, the Client:
3.1 releases the Lender from any and all actions, suits,
proceedings, claims, accounts and demands of all kinds
which the Client may make or have against the Lender
for any direct or indirect damage, loss or expense
suffered or incurred by the Client; and
3.2 indemnifies the Lender and agrees to keep the Lender
indemnified against all losses, costs, expenses and
liabilities incurred, paid or payable by the Lender and in
connection with all actions, suits, proceedings, claims,
accounts and demands of all kinds which may be
taken or made against the Lender and against all costs,
charges and expenses incurred, paid or payable by the
Lender in respect of all such actions, suits, proceedings,
claims, accounts and demands,
in each case in connection with the Lender acting in
good faith upon the Facsimile Instructions (including any
unauthorised or incorrect Facsimile Instructions) given
to the Lender in accordance with this Authority.
4.
General
4.1 This Authority may be terminated by the Client or the
Lender by giving written notice thereof to the other, but
without prejudice to the Client’s liability in respect of any
Facsimile Instruction received and acted upon by the
Lender prior to the receipt by the Lender or the Client
of such notice. Upon giving or receipt of such notice by
the Client, the Client must not give any further Facsimile
Instruction to the Lender.
4.2 This Agreement is governed by and construed in
accordance with the laws of Victoria and the Client and
the Lender irrevocably and unconditionally submit to the
non-exclusive jurisdiction of the courts of that state and
its courts of appeal.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
95
Form 4(a) – CBA Loan Application
continued
Willmott Forests Premium Forestry Blend Project
5.
Authorised Signatory means a person authorised to
operate the Client’s account in accordance with the
Client’s Account Authority;
Interpretation
Unless inconsistent with the context:
5.1 Any reference to the singular number shall include a
reference to the plural number and vice versa where two
or more persons are parties to this Authority the Authority
shall bind them jointly and each of them severally.
Facsimile Instructions means payment instructions given
to the Lender by facsimile transmission and appearing
or purporting to be a facsimile copy of the signature of
the Authorised Signatory and signed or purporting to
have been signed in accordance with the Client’s
Account Authority.
5.2 The following expressions shall have the following
meanings:
Account Authority means the authority provided to the
Lender as amended or substituted from time to time
authorising one or more persons to be the Authorised
Signatory to operate the Client’s accounts with the
Lender;
Wealth Focus Pty Ltd
PO Box 760
Manly
NSW 1655
Tel: 1300 55 98 69
AUTHORISED SIGNATORIES (CORPORATE BORROWERS ONLY)
I/We refer to the loan agreement (Loan Agreement) between us
(Borrower) and Commonwealth Bank of Australia ACN 123 123 124.
Terms used in this notice and defined in the Loan Agreement have the meaning given to them in the Loan Agreement.
Any 2 persons/1 person (delete as appropriate) referred to below (the “Authorised Signatories”) are authorised to sign for and on
behalf of the Borrower all notices and to endorse, accept, sign and execute for and on behalf of the Borrower all other documents
arising under or relating to the Loan Agreement:
Name of Authorised Signatory
Name (please print)
Name (please print)
Signature
SIGN HERE
SIGN HERE
SIGN HERE
Name (please print)
The signatures appearing next to the names of the Authorised Signatories above are true specimens of the signatures of those persons.
Executed for and on behalf of the Borrower
in accordance with section 127 of the
Corporations Act by or in the presence of:
Signature of Secretary/other Director
SIGN HERE
Name of Secretary/other Director in full
96
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Signature of Director or sole Director and sole Secretary
SIGN HERE
Name of Director or sole Director and sole Secretary in full
Form 4(a) – CBA Loan Application
continued
Willmott Forests Premium Forestry Blend Project
TO BE COMPLETED BY ALL APPLICANTS AND GUARANTORS
IMPORTANT INFORMATION (applies to all Applicants and Guarantors).
By requesting that the Lender provide finance to the Applicant, I/we acknowledge and declare that:
• I/We have read and understood the Loan Agreement including the Guarantee Documents (as annexed to this Application) and have had
the opportunity to seek independent professional advice.
• I/We am a resident of Australia.
• I/We agree to be bound by the Loan Agreement including the Guarantee Documents (as annexed to this Application), and I/we agree to
the terms of each agreement.
• I/We have not relied on any statements or representations made by any party (including the Lender) prior to the Applicant applying for finance
or any investment in the Willmott Forests Project.
• Any finance to be provided to me/us by the Lender is to be applied for business or investment purposes. I/We further acknowledge that I/we
may lose my/our protection under the Consumer Credit Code.
• I/We know that the Lender will be relying on the information within this Application (and any other information I/We might provide to the
Lender) when providing financial accommodation to the Applicant.
• The Lender may accept or reject my/our Application at its sole and absolute discretion and that upon acceptance of the Application, I/we
agree to be bound by the terms of the Loan Agreement including the Guarantee Documents and this Application.
• By signing and returning this Application I/we am/are doing so as a deed poll, irrevocably and in accordance with the Application
(including the Loan Agreement and Guarantee Documents).
• The Lender can provide information on the status of this finance facility to my/our nominated adviser below or any entity
associated with the Lender.
(nominate financial adviser, solicitor etc.)
• I/We have read and understood that:
- monies invested in the Willmott Forests Project do not represent deposits or other liabilities of the Lender or its associates and are
subject to investment risk including possible delays in repayment and loss of income or capital investment;
- none of the Lender or any of its associates stands behind the capital value nor do they guarantee the performance of this investment
or the underlying assets; and
- none of the Lender or any of its associates guarantees or provides any assurance in respect of the obligations of the Responsible
Entity of the Willmott Forests Project.
• My/Our obligations under the Loan Agreement including the Guarantee Documents including my/our obligations to pay money, interest,
costs, fees and charges or guarantee the obligations of the Applicant are not affected by:
- the success or failure of the Willmott Forests Project;
- the level of return from any loss of money invested in the Willmott Forests Project;
- any breach by the Responsible Entity of the Willmott Forests Project of its obligations; or
- any illegality in connection with the Willmott Forests Project, or any Product Disclosure Statement issued with respect to the Willmott
Forests Project.
• If at the date on which my investment is due I have not provided all necessary supporting documentation required by the Lender in
time for the Lender to consider and process my application, I understand that, unless I elect not to do so below, I will be taken to
have applied to Willmott Finance Pty Ltd for a 12 month interest free loan on the terms set out in this Product Disclosure Statement (the
Willmott Loan), on the basis that the Lender may consider, during the period of 31 days after the date of funding of the Willmott Loan,
providing finance in accordance with this application (but with a term of one less month) for the purpose of refinancing the Willmott
Loan. If the Lender elects to provide such finance during this period, then I agree that the Lender may provide finance to me on the
terms of my original application for the purposes of refinancing the Willmott Loan.
I elect not to apply for a Willmott Loan if I have not provided all necessary supporting documentation required by the Lender in time
for the Lender to consider and process my application.
I/We hereby agree to the terms contained in the Authority to Accept Facsimile Instructions, the Privacy Act 1988(CTH) Consent
and Declaration for the Purposes of the Consumer Credit Code, the Direct Debit Request Service Agreement and certify that the
signatures contained in the Authorised Signatories are true and correct (contained in pages 91-99 of the Application).
Willmott Forests – Premium Forestry Blend Project 2009 PDS
97
Form 4(a) – CBA Loan Application
continued
Willmott Forests Premium Forestry Blend Project
Executed as a deed.
Signed, sealed and delivered
Signature of Applicant 1/Director
SIGN HERE
Signature of Witness
SIGN HERE
Date
Date
Print Name
Print Name
Signature of Applicant 2/Director
Signature of Witness
SIGN HERE
SIGN HERE
Date
Date
Print Name
Print Name
Signature of Guarantor 1
Signature of Witness
SIGN HERE
SIGN HERE
Date
Date
Print Name
Print Name
Signature of Guarantor 2
Signature of Witness
SIGN HERE
SIGN HERE
Date
Date
Print Name
Print Name
Signed sealed and delivered for and on behalf of
Commonwealth Bank of Australia ABN 48 123 123 124
by its Attorney under a Power of Attorney dated, and the
Attorney declares that the Attorney has not received any notice
of the revocation of such Power of Attorney, in the presence of:
Signature of Witness
SIGN HERE
Name of Witness in full
Signature of Attorney
SIGN HERE
Name of Attorney in full
Wealth Focus Pty Ltd
PO Box 760
Manly
NSW 1655
Tel: 1300 55 98 69
98
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Commonwealth Bank of Australia
(ABN 48 123 123 124)
Form 4(b) – CBA Direct Debit Requests
Willmott Forests Premium Forestry Blend Project
PART 1 – DIRECT DEBIT REQUEST SERVICE AGREEMENT
• We may vary the terms of this Direct Debit Request Service Agreement at any time by giving you at least 14 days notice.
• By signing the Direct Debit Request below, you request and authorise us to arrange for funds to be debited from your account:
• where an Establishment Fee is applicable;
• either according to the loan agreement which we have with you (or either of you or a third party) or as provided in this Direct Debit
Request Service Agreement. The amounts drawn will be as due under that loan agreement or any agreed variations to it thereafter
or any greater amount which you, either of you, or a third party instruct us to draw, provided such instruction is given in the manner
specified in the operating authority held by us in connection with the Direct Debit Account. Where the amount due under the loan
agreement decreases, the Lender at its discretion may decrease the amount drawn from your account or, unless you instruct us to
decrease it, continue to draw the higher amount.
We will arrange for funds to be debited from the Direct Debit Account:
(i) as requested and authorised in the Direct Debit Request below; or
(ii) according to any notice sent to you specifying the amount payable and the date the payment is due; or
(iii) in accordance with this Direct Debit Request Service Agreement.
The payment will be deducted from the Direct Debit Account on the payment due date. If the due date for payment falls on a
non-working day or a national public holiday the payment will be processed on the next working day.
• It is your responsibility to ensure that you have sufficient funds in the Direct Debit Account when payments are to be drawn.
If you do not have sufficient funds, then:
• the payment will be regarded as not having been made;
• an administration fee will be charged to your account;
• if the Direct Debit Account is conducted with the Lender then we may, on a day subsequent to the payment due date, debit funds
from your account, either in full or partial payment of any amount overdue.
• You should be aware that:
• Direct Debiting through Bulk Electronic Clearing System is not available on all accounts;
• Direct Debit Account details should be checked against a recent statement from your financial institution. If you are in any doubt,
you should check with your financial institution before completing the Direct Debit Request; and
• it is your responsibility to advise us if your Direct Debit Account is altered, transferred or closed.
• Fees may be payable in respect of a Direct Debit Request, and additional fees may be payable in respect of direct debits from certain
accounts or types of accounts such Visa or Mastercard credit card accounts. We will charge these fees to the Direct Debit Account at
the time of the direct debit in accordance with our usual rates applying from time to time. As at the date of this Direct Debit Request
Service Agreement the following fees apply in respect of direct debits from credit cards:
Standard Card
Premium Card
Visa
1.10%
Visa
1.50%
MasterCard
0.95%
MasterCard
1.52%
• If you believe there has been an error in debiting your account you should contact the branch where your loan account is held as soon
as possible so that we can resolve your query quickly.
• Your records and account details will be kept private and confidential and will only be disclosed at your request or at the request of the
financial institution in connection with a claim made to an alleged incorrect or wrongful debit, or otherwise as required by law.
PART 2 – DIRECT DEBIT REQUEST
I/We hereby authorise and request you, Commonwealth Bank of Australia (APCA User ID number 650 or 301813) to arrange for funds to
be debited from the following account (the Direct Debit Account) and as prescribed above through the Bulk Electronic Clearing System or
to debit the Direct Debit Account by any other means.
Account (or Card) Name
Account BSB
Account Bank (or Card)
Account (or Card) Number
Exp
/
This authorisation is to remain in force in accordance with the terms described in the Direct Debit Request Service Agreement.
I/We authorise the following:
1. The Commonwealth Bank of Australia to verify the details of the Direct Debit Account identified above with my/our financial institution
with whom the Direct Debit Account is held; and
2. My/our financial institution with whom the Direct Debit Account is held to release information allowing Commonwealth Bank
of Australia to verify the details of the Direct Debit Account.
Signature
Signature
SIGN HERE
Date
Print Name (if joint account, all names required)
SIGN HERE
Date
Print Name
Willmott Forests – Premium Forestry Blend Project 2009 PDS
99
This page has been intentionally left blank.
100
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Commonwealth Bank of Australia
(ABN 48 123 123 124)
Form 4(c) – CBA Loan Application: Guarantor
Willmott Forests Premium Forestry Blend Project
PERSONAL DETAILS – GUARANTOR 1
PERSONAL DETAILS – GUARANTOR 2
Title
Title
First Name
Second Name
Surname
Date of Birth
First Name
Second Name
Surname
Date of Birth
Drivers Licence (please supply certified hard copy)
Drivers Licence (please supply certified hard copy)
Current Residential Address (not PO Box)
Current Residential Address (not PO Box)
Suburb and State
Postcode
Suburb and State
Postcode
How many years have you been a resident at the above address
How many years have you been a resident at the above address
Postal Address (if different from above)
Postal Address (if different from above)
Suburb and State
Telephone BH
Postcode
Mobile
Facsimile
Suburb and State
Telephone BH
Postcode
Mobile
Facsimile
Email
Email
Employer
Employer
Occupation
Occupation
Number of Years Employment
Number of Years Employment
Employment Status (full or part time, casual, self)
Employment Status (full or part time, casual, self)
Previous Employer (only if less than 2 years prior to current employment)
Previous Employer (only if less than 2 years prior to current employment)
Marital Status
Marital Status
Number of Dependant Children
Number of Dependant Children
Existing CBA Customer
If Yes, Account Number
Yes
No
Existing CBA Customer
Yes
No
If Yes, Account Number
Willmott Forests – Premium Forestry Blend Project 2009 PDS
101
Form 4(c) – CBA Loan Application: Guarantor
continued
Willmott Forests Premium Forestry Blend Project
STATEMENT OF INCOME – GUARANTOR 1
Current Gross Salary
$
Other Income Details
$
STATEMENT OF ASSETS OF GUARANTOR 1
Residential Property
Estimated Value
STATEMENT OF LIABILITIES OF GUARANTOR 1
Loans
$
Investment Property
Estimated Value
Residential Property
$
Payments
Minimum Monthly Balance Owing
$
$
$
$
$
$
$
$
$
$
$
$
Investment Property/Shares
$
Cash/Shares/Deposits
Estimated Value
Other Assets (vehicles etc.)
Estimated Value
$
Personal Loans
Other Assets (contents etc.)
$
$
$
Estimated Value
$
$
$
$
$
$
$
$
$
Credit Card
Applicant
Joint
Company Trust
$
Limit
$
$
$
Total Assets
$
$
$
$
Total Commitment Total Liabilities
$
$
Please Tick
I/We have enclosed our tax return/s
I/We have enclosed our pay slip/s
You must supply the following supporting information with your application:
Proof of income required
• PAYG – Copy of last two tax returns and one recent payslip; or one copy of the last tax return and two recent payslips
confirming income.
• Self employed – last two tax returns or letter from Accountant re estimated income.
• Other third party – confirmation of income declared (e.g. verified letter from employer).
Proof of identity as per AML/CTF identification information and documents on page 78-79.
Processing of your application may be delayed if you do not supply this information with your application.
102
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Form 4(c) – CBA Loan Application: Guarantor
continued
Willmott Forests Premium Forestry Blend Project
STATEMENT OF INCOME – GUARANTOR 2
Current Gross Salary
$
Other Income Details
$
STATEMENT OF ASSETS OF GUARANTOR 2
Residential Property
Estimated Value
STATEMENT OF LIABILITIES OF GUARANTOR 2
Loans
$
Investment Property
Estimated Value
Residential Property
$
Payments
Minimum Monthly Balance Owing
$
$
$
$
$
$
$
$
$
$
$
$
Investment Property/Shares
$
Cash/Shares/Deposits
Estimated Value
Other Assets (vehicles etc.)
Estimated Value
$
Personal Loans
Other Assets (contents etc.)
$
$
$
Estimated Value
$
$
$
$
$
$
$
$
$
Credit Card
Applicant
Joint
Company Trust
$
Limit
$
$
$
Total Assets
$
$
$
$
Total Commitment Total Liabilities
$
$
Please Tick
I/We have enclosed our tax return/s
I/We have enclosed our pay slip/s
You must supply the following supporting information with your application:
Proof of income required
• PAYG – Copy of last two tax returns and one recent payslip; or one copy of the last tax return and two recent payslips
confirming income.
• Self employed – last two tax returns or letter from Accountant re estimated income.
• Other third party – confirmation of income declared (e.g. verified letter from employer).
Proof of identity as per AML/CTF identification information and documents on page 78-79.
Processing of your application may be delayed if you do not supply this information with your application.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
103
Form 4(c) – CBA Loan Application: Guarantor
continued
Willmott Forests Premium Forestry Blend Project
Privacy Acknowledgement and Consent – Guarantor/s
I/We hereby apply to the Commonwealth Bank of Australia ABN 48 123 123 124 (the Lender) as guarantor(s) for loan finance to
be provided to the borrower to finance the amount that is due and payable in the 2009 Application Form for the Willmott Forests
Premium Forestry Blend Project.
I/We warrant that all of the personal information including asset and liability information provided by me/us at the date of my/our
application is true and correct. I/We acknowledge that this form does not constitute an offer or acceptance of credit as defined in
any legislation relating to the provision of credit.
By signing this application, I/we authorise the Lender and/or Willmott Forests Limited and any of their agents (as defined in the
Privacy Act) to give to and obtain from a credit reporting agency:
• certain personal information about me/us to allow me/usto be identified;
• information that I/we have offered to act as a guarantor;
• personal information and information as to my/our creditworthiness, credit standing, credit history and credit capacity, for the
purposes of assessing my/our guarantee for personal credit given to another person.
By signing this application, I/we acknowledge that:
• the Lender and/or Willmott Forests Limited verify the identity of guarantors via the collection of personal information;
• I/we may (subject to permitted exceptions) access your information by contacting Customer Relations, Commonwealth Bank
Group, Reply Paid 41, SYDNEY NSW 2001. I/we also acknowledge that charges may apply for this access.
In addition to the authorisations set out above in relation to credit reports, by signing this application I/we authorise the Lender
and/or Willmott Forests Limited to:
• give to and obtain from my/our bank and/or other credit provider any record that has any bearing on my/our creditworthiness,
credit standing, credit history or credit capacity for the purpose of:
(a) assessing whether to accept me/us as guarantor for personal credit applied for or provided to the borrower/s;
(b) for any purpose related to the subsequent management of the personal credit guaranteed by me/us;
(c) for any purpose related to the enforcement or proposed enforcement of my/our guarantee, and/or
(d) for the purpose of assessing the risk in purchasing any credit facility (being a credit facility given to or applied for by the
borrower) from me/us and/or the risk in undertaking credit enhancement of any such credit facility, each as the case may be.
• obtain information about my/our commercial activities or commercial creditworthiness from a business which provides
information about the commercial creditworthiness of persons for the purpose of assessing whether to accept me/us
as a guarantor for personal credit applied for, or provided to, the borrower.
Signature of Guarantor 1
GUARANTOR 1 SIGN HERE
Date
Wealth Focus Pty Ltd
PO Box 760
Print Name
Manly
NSW 1655
Signature of Guarantor 2
GUARANTOR 2 SIGN HERE
Date
Print Name
104
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Tel: 1300 55 98 69
Election Under Clause 28.16 of the Code of Banking
Practice (Director Guarantors)
We are advised that you, as a Director of the Borrower,
are considering providing a Guarantee in support of the
Borrower’s facilities.
Note This form may be used when the Director Guarantor
is present (“Face to Face Option”) or where the Director
Guarantor is contacted by telephone (“Telephone Option”).
Part 1 – General information (applies in all cases)
A. Code of Banking Practice protections of Guarantors
The Code of Banking Practice (“Code”) has certain
provisions designed to protect Guarantors and proposed
Guarantors. Generally, we are required to:
• provide Guarantors with certain material concerning the
Borrower and the proposed facilities; and
• allow Guarantors until the next day following the receipt
of that material, before we ask them to sign the
Guarantee.
B. Information which must be given to you
Both the Code and the general law require that certain
material must be provided to you:
• the Facility Terms and Conditions which incorporate the
Facility Agreement you are being asked to Guarantee,
together with a list of related security contracts (and you
may ask us for a copy of any related security contract);
• any final Letter of Offer provided to the Borrower (with
details of any conditions contained in any earlier version
of the Offer Letter which were satisfied before the final
Letter of Offer was issued);
• a listing with details of any notices of demand made
on or after 1 June 2003 in relation to any facility of the
Borrower with us, together with copies of statement of
account covering the period during which any such
notice was issued;
• a listing of all dishonours on or after 1 June 2003 on
any facility of the Borrower with us, together with
copies of statements of account covering the period
during which any such dishonour occurred;
We will also tell you:
• whether there have been any excesses or overdrawings
of $100 or more during the past six months on any
facility of the Borrower with us.
C. Further information – waiver rights
In addition to the above material, the Code requires the
provision of further information to you. Clause 28.16 of
the Code provides, however, that Director Guarantors
(that is, Guarantors who are Directors of the Borrower
company, other than Sole Director Guarantors or
Commercial Asset Financing Guarantors) may
advise us that they elect:
• not to receive some of the further information required
to be provided under the Code; and/or
D. Further information – details
The following is the further information we are required to
provide. The boxes are for noting your election regarding
the provision of this information.
Documents not required
any related credit report from a credit reporting agency;
any current credit-related insurance contract in our
possession;
any financial accounts or statement of financial position
given to us by the Borrower for the purposes of the
Facility within 2 years prior to the day we provide this
information to you;
the latest statement of account relating to the Facility
(and any other statement of account for a period during
which a notice of demand was made by the Bank, or a
dishonour occurred, in relation to which we are required
to give you information under clause 28.4(b)(i)); and
any unsatisfied notice of demand made by us on the
Borrower in relation to the Facility where the notice was
given within 2 years prior to the day we provide you with
this information.
Part 2 – “Face to Face”
E. Elections under clause 28.16 of the Code
(a) The nominations you have made regarding the
information and documentation required to be provided
by us to you are noted in clause D above. Where the
boxes are ticked, this indicates that you have advised
us that you are electing not to receive the information
described in the sub-clause opposite that box.
(b) You have also advised us that you have elected to
wait or not to wait until the next day after receiving the
information required to be given to you under clause
28.4 [including any information under clause 28.4(d)].
Acknowledgement by Proposed Director Guarantor
Please note that, by signing below, you are confirming
that you:
• have read and understood the information set out above
in relation to your rights to receive material under the
Code of Banking Practice; and
• do not wish to receive the information relating to the
Borrower nominated by ticking the boxes in Clause D
above.
You also confirm that you have indicated to us your
election as to whether you wish to wait until the next
day to consider the information you receive from us.
Signature
SIGN HERE
Date
• to sign the Guarantee without waiting until the next day.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
105
Election Under Clause 28.16 of the Code of Banking
Practice (Director Guarantors)
continued
Part 3 – “Telephone”
F. Elections under Clause 28.16 of the Code
(a) Where we have spoken to you already, the
nominations you have made regarding the information
and documentation required to be provided by us to
you are noted in clause D above. Where the boxes
are ticked, this indicates that you have advised us
that you are electing not to receive the information
described in the sub-clause opposite that box.
(b) If, however, the nominations are incorrect or the
information or documentation you have received is
incomplete and you wish to receive further information,
please contact us immediately. If we do not hear
from you prior to you executing the Guarantee, we will
assume that you are satisfied with the information and
documentation provided. Please also ensure that we
have correctly recorded your election regarding the
next day requirement.
G. Contact unable to be made
Where we have not been able to contact you, we have
assumed that your election is to receive all of the required
information and not to waive the next day requirement for
signing the Guarantee.
Agent use only
To be signed only after telephone interview
I certify that I have explained to the Guarantor above their
entitlements under Clause 28.1 of the Code of Banking
Practice. I have also recorded the Guarantor’s nominations
by ticking the boxes above.
OR
To be signed where Agent unable to contact
Director Guarantor
I certify that, on
I attempted to contact
the Guarantor above by telephone but was unable to do so.
Signature of Agent
SIGN HERE
Name of Agent (please print)
106
Willmott Forests – Premium Forestry Blend Project 2009 PDS
CBA Loan Agreement
This loan agreement is made on the Acceptance Date
Parties
Commonwealth Bank of Australia
ABN 48 123 123 124 (Lender)
The entity whose name and address are set
out in the Application as borrower (Borrower)
The entity (if any) whose name and address
are set out in the Application as guarantor
(Guarantor)
Background
A.
Willmott has established the Project in accordance with
the Product Disclosure Statement relating to the
Project.
B.
The Borrower has decided to participate in the Project
to carry on the relevant Business.
C.
The Lender will finance a portion of the Borrower’s
interest in the Project on the terms and conditions set
out in this Loan Agreement.
D.
The Guarantor (if any) will guarantee the Borrower’s
obligations under this Loan Agreement.
(b) in respect of Fixed Interest Rates, the “BetterBusiness
Loan Fixed Term Benchmark Rate” advised by the
Lender on the Date of Advance.
These details will be included in the Confirmation Notice.
Business means the Borrower’s long term business
of cultivating and harvesting trees.
Business Day means a business day in Melbourne.
Charge means the charge referred to in clause 8.1(a).
Charged Debts means all unrealised book debts
and other debts whether actual or contingent at any
time owing to the Lender together with all books or
documents of account or records evidencing or
recording such debts.
Charged Property means the property charged under
the Charge as described in clause 8.1(a) and as
referred to in clause 8.4.
Confirmation Notice means a notice provided by the
Lender to the Borrower in accordance with clause 4.5
substantially in the form of Schedule 7.
Constitution means the replaceable rules, constitution
or combination of both as those terms are used in
section 134 of the Corporations Act 2001 (Cth).
Operative provisions
Controller has the meaning given in section 9 of the
Corporations Act.
1.
Definitions and interpretation
Corporations Act means the Corporations Act 2001 (Cth).
1.1
Definitions
In this document:
Costs and Expenses means the costs and expenses
mentioned in clause 7.
Acceptance Date means the date on which the Lender
accepts and countersigns the Application signed by the
Borrower.
Date of Advance means the date on which the
Borrower is required to fund its investment in the
Project.
Advance means an advance of funds under this Loan
Agreement.
Delegate means any agent, attorney or other delegate
appointed under this Loan Agreement by the Lender
or by any receiver or receiver and manager appointed
under this Loan Agreement.
Agreement means the Land Tenure Agreement and the
Land Sourcing and Forestry Management Agreement.
Application means the application signed by the
Borrower for funding to be provided by the Lender
in relation to the Borrower’s investment in the Project.
Authorised Signatory means, where the Borrower
is a corporation, any person named in the Application
as being authorised to sign notices and to endorse,
accept, sign and execute for and on behalf of the
Borrower all documents arising under or relating
to this Loan Agreement.
Borrower’s Covenants means the covenants,
agreements and obligations contained or implied in
this Loan Agreement or the Agreement or imposed
by law to be observed and performed by any person
other than the Lender.
Base Rate means:
Direct Debit Account means the bank account
specified by the Borrower in the Direct Debit Request.
Direct Debit Request means the direct debit request
as set out in the Application.
Direct Debit Request Service Agreement means the
agreement between the Borrower and the Lender as
set out in the Application.
Director Guarantor Election means the election under
clause 28.16 of the Code of Banking Practice as set
out in the Application.
Dispose in relation to any property or right means to
transfer, sell, assign, surrender, convey, lease, licence,
discount, lend or otherwise dispose of any interest in
the property or right and Disposal has a corresponding
meaning.
(a) in respect of Variable Interest Rates, the rate
published by the Lender at ww.commbank.com.au
as the variable rate for “Better Business Loans
(Where security is other than Residential)”; and
Willmott Forests – Premium Forestry Blend Project 2009 PDS
107
CBA Loan Agreement
continued
Early Repayment Administration Fee is equal to;
(a) in respect of partial repayments of the Principal
Outstanding over $1,000, $300; and
(b) in respect of early repayment in full of the Principal
Outstanding, $500.
Encumbrance means a mortgage, charge, pledge,
lien, encumbrance, security interest, title retention,
preferential right, trust arrangement, contractual
right of set-off or any other security agreement or
arrangement in favour of any person.
Establishment Fee, means the fee (which may be
capitalised) payable by the Borrower to the Lender in
consideration for the Lender providing the loan, and
calculated as an amount equal to 0.25% of the
Principal Amount or $250, whichever is the greater.
Event of Default means the occurrence of one of the
events set out in clause 13.1.
Fax Indemnity means the fax indemnity given by the
Borrower as set out in the Application.
Fees means the fees payable by the Borrower to
Willmott under an Agreement including any applicable
GST and including any management fees, licence fees
and operating costs and expenses payable by the
Borrower under an Agreement.
Fixed Interest Rate means, where the Borrower has
selected a fixed Base Rate for the duration of the loan,
paragraph (b) of the Base Rate plus a margin equal to:
(a) for loans of $10,000 to $99,999, 4.25% per
annum; and
Loan Agreement means the loan agreement constituted
by the Application and this document.
Moneys Payable means the aggregate of:
(a) the Principal Outstanding;
(b) Interest; and
(c) any other moneys payable to or recoverable
by the Lender under the terms of the Transaction
Documents including without limitation, other Costs
and Expenses.
Monthly Loan Service Fee means the fee payable by
the Borrower in accordance with clause 7.1(c).
Overdue Rate means the rate per annum equal to
the Fixed Interest Rate or the Variable Interest Rate,
whichever is selected by the Borrower in the
Application, plus 4.5% per annum.
Power means any right, power, authority, discretion,
remedy or privilege conferred on the Lender, any Receiver
or any Delegate, in any case, under the Charge, under
any other Transaction Document or by law.
Principal Amount means the amount to be advanced
to the Borrower under this Loan Agreement equal to
the value of the Borrower’s investment in the Project.
Principal Outstanding means the amount of the
Funds advanced and which have not been repaid
by the Borrower.
(b) for loans of $100,000 or more, 3.0% per annum.
Project means the project specified in the Application.
Funds means the amounts Advanced under clause 2(a).
Purpose means the purpose for which the Funds are
advanced to the Borrower, being the financing of the
Borrower’s investment in the Project.
GST means goods and services tax or similar value
added tax levied or imposed in Australia pursuant to
the A New Tax System (Goods and Services Tax) Act
1999 (Cth) or otherwise on a supply.
Guarantee means the guarantee given by the
Guarantor pursuant to the Guarantee Documents.
Guarantee Documents means the documents included
at Schedule 4 (in respect of a Guarantor that is an
individual) and Schedule 5 (in respect of a Guarantor
that is a corporation).
Receiver means a receiver or a receiver and manager
appointed under clause 14.1.
Receiver’s Powers means the rights, powers and
remedies contained or implied in this document or granted
by law exercisable by the Receiver against any person.
Repayment Amount means the amount or amounts of
Principal Outstanding and Interest payable each month
as set out in each Confirmation Notice.
Harvest Proceeds means the proceeds from the sale
of any or all of the Timber Produce which the Borrower
is or may be entitled to.
Repayment Dates means the dates for payment of
Principal Outstanding and Interest each month as set
out in each Confirmation Notice.
Insurance Proceeds means the proceeds of the Timber
Insurance which the Borrower is or may be entitled to.
Stamp Duty Administration Fee means the fee
(which may be capitalised) payable by the Borrower
in accordance with clause 7.1(b).
Interest means the interest payable under clause 5.
Land Sourcing and Forestry Management Agreement
means the management agreement entered into
between Willmott and the Borrower in respect of the
Project.
108
Land Tenure Agreement means land tenure agreement
(taking the form of a lease, sub-lease or licence
agreement) entered into between Willmott and the
Borrower in respect of the Project.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
Taxable Supply means any supply of goods, services
or other things (and includes any supply by the Lender
of any Charged Property to any person in connection
with the enforcement of the Charge) which is, or
becomes subject to, GST.
1.2
Interpretation
In this document:
(a) headings are for convenience only and do not
affect interpretation;
Taxes means all taxes, levies, imposts, deductions,
charges and withholdings assessed, imposed, collected
or withheld under any legislation and, in each case, all
interest, fines, penalties, charges, fees or other
amounts in respect of them.
and unless the context indicates a contrary intention:
Timber Insurance means the policies of insurance in
respect of loss or damage to the Trees, Woodlots or
Timber Produce entered into pursuant or referred to
in the Agreements.
(c) “person” includes an individual, the estate of an
individual, a corporation, a government authority, an
association or a joint venture (whether incorporated
or unincorporated), a partnership and a trust;
Timber Produce means all timber to be grown or
growing on the woodlots and all cut timber products
from the woodlots.
(d) a reference to a party includes that party’s executors,
administrators, successors and permitted assigns,
including persons taking by way of novation and, in
the case of a trustee, includes a substituted or an
additional trustee;
Transaction Documents means:
(a) this document (including each Schedule);
(b) the Application;
(c) the Guarantee Document;
(d) the Direct Debit Service Request Agreement and
Direct Debit Request;
(e) any Confirmation Notice; and
(f) any other document agreed by the Lender and the
Borrower to be a “Transaction Document”.
Trees means the actual growing timber from which
distributions to the Borrower will be generated.
Trust means the trust of which the Borrower is the
trustee (if any) as referred to in clause 12 details of
which are set out in the Application.
Trust Deed means the trust deed constituting the Trust,
and any other relevant documents of appointment
whereby the Borrower is appointed as trustee of the
Trust.
Variable Interest Rate means, where the Borrower has
selected a variable Base Rate for the duration of the
loan, paragraph (a) of the Base Rate plus a margin
equal to:
(a) for loans of $4,000 to $99,999, 2.75% per annum;
and
(b) for loans of $100,000 or more, 1.5% per annum.
Willmott means Willmott Forests Limited
ACN 063 263 650, as responsible entity for the Project.
Woodlot means an area of land and Trees which
equates to approximately 5,200 square metres and in
relation to this Loan Agreement means each woodlot
the subject of the Agreement, the total number of
which are specified in the Application.
(b) if more than one person is identified as the
Borrower, that expression refers to them, and the
obligations of the Borrower under this document
bind them, jointly and severally;
(e) a reference to a document (including this document)
is to that document as varied, novated, ratified or
replaced from time to time;
(f) a reference to a statute includes its delegated
legislation and a reference to a Statute or
delegated legislation or a provision of either
includes consolidations, amendments,
re-enactments and replacements;
(g) a word importing the singular includes the plural
(and vice versa), and a word indicating a gender
includes every other gender;
(h) a reference to a party, clause, schedule, exhibit,
attachment or annexure is a reference to a party,
clause, schedule, exhibit, attachment or annexure
to or of this document, and a reference to this
document includes all schedules, exhibits,
attachments and annexures to it;
(i) if a word or phrase is given a defined meaning, any
other part of speech or grammatical form of that
word or phrase has a corresponding meaning;
(j) where the day on or by which any sum is payable
or any act, matter or thing is to be done is a day
other than a Business Day, that sum will be paid
and that act, matter or thing will be done on the
immediately preceding Business Day;
(k) any agreement, undertaking, acknowledgement,
condition or other term that is made or given by
the Borrower will be deemed to be a covenant by
the Borrower in favour and for the benefit of the
Lender;
(l) all accounting terms used in this document have
the meaning given to them under Australian
accounting standards;
(m) “includes” in any form is not a word of limitation; and
(n) a reference to “$” or “dollar” is to Australian currency.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
109
CBA Loan Agreement
2.
continued
(k) that, where the Borrower is a corporation, it has
been provided with a copy of the company’s
Constitution in form and substance satisfactory
to it; and
Provision of Funds
(a) Subject to the Lender’s acceptance of the
Application and the satisfaction of the conditions
precedent set out in clause 3, the parties agree
that the Lender will on the Date of Advance make
an Advance in an amount equal to the Principal
Amount and any fees capitalised in accordance
with clause 7.2.
(b) The Borrower irrevocably directs the Lender to
advance the Funds by satisfying on the due date:
(l) that, where the Borrower is a trustee, it has been
provided with a copy of the current Trust Deed in
form and substance satisfactory to it.
4.
Repayment
4.1
Repayment of Principal Outstanding and other
Moneys Payable
(i) the Establishment Fee and Stamp Duty
Administration Fee (where such amounts have
been capitalised in accordance with clause 7.2);
(a) Subject to clauses 4.5 and 4.6 the Borrower must
make payments or repayment of Interest and/or
Principal Outstanding in the amounts and on the
Repayment Dates set out in each Confirmation
Notice.
(ii) any other Costs and Expenses; and
(iii) as applicable:
A. the Fees payable under each Agreement; or
(b) The Borrower must pay any outstanding balance
on the Moneys Payable on the Final Repayment
Date.
B. the amount outstanding under an existing
loan agreement in respect of Fees payable
under each Agreement,
(c) Where the Borrower selects the 3 year interest
free option in the Application the amounts payable
under clause 4.1(a) for the first 36 months after the
Date of Advance are payments of Interest only.
or a portion of them equal to the balance of
the Funds after the payment of the Costs and
Expenses specified in sub-paragraph (i) above.
(d) The first Repayment Date in respect of principal
and interest will be on the first Business Day of the
month immediately following the Date of Advance,
unless the Date of Advance is within 2 days of the
end of the month, in which case the first Repayment
Date will be on the first Business Day of the month
after the month immediately following the Date of
Advance.
(c) The Funds are provided on the terms and conditions
of this Loan Agreement and for the Purpose.
3.
Conditions precedent to facility
The Lender is not obliged to provide the Funds unless
the Lender is satisfied:
(a) that Willmott has received all of the documents
required for the Borrower’s involvement in the
Project, in a satisfactory form and substance;
4.2
The Borrower must pay all amounts payable to
the Lender under this Loan Agreement without
any deduction, withholding, set off or counterclaim
whatsoever, whether the benefit of a deduction,
withholding, set off or counterclaim is alleged to exist
in favour of the Borrower as against the Lender in any
capacity whatsoever or any other person including
any assignor of the Lender’s interests under this
Loan Agreement.
(b) that each representation and warranty made by the
Borrower under this Loan Agreement remains true
at the Date of Advance;
(c) that no Event of Default has occurred;
(d) with any credit checks and searches that the
Lender makes concerning the Borrower;
(e) that the Direct Debit Request has been signed by
the Borrower;
(f) that the Fax Indemnity has been signed by the
Borrower;
(g) that, where applicable, it has received the
Guarantee Documents signed by the Guarantor;
(h) that, where a Guarantor is a director of the
Borrower, the Director Guarantor Election
has been signed;
(j) that, where the Borrower is a corporation, it has
received the names and signatures of all persons
authorised to sign all notices and to endorse,
accept, sign and execute for and on behalf of the
Borrower all documents arising under or relating to
this Loan Agreement as set out in the Application;
110
Willmott Forests – Premium Forestry Blend Project 2009 PDS
No deduction
4.3
Early repayment
(a) Early repayment of the Principal Outstanding
(in whole or in part) may not take place except
as permitted by the Lender, in its sole discretion.
(b) The Borrower acknowledges that the Lender may
charge the Borrower:
(i) its costs and expenses (including any break
fees or break costs for which the Lender may
be liable however arising) and an administration
fee connected with early repayment. Any break
fee will be calculated as being the difference
between the cashflows the Lender received
Repayment Amounts which would have been
payable on and immediately prior to the Final
Repayment Date (Adjustment).
under this Loan Agreement at the swap rate
on the Date of Advance and the present value
of cashflows the Lender will receive under this
Loan Agreement at the swap rate on the break
date; and
(c) After the Adjustment, the Lender will advise the
Borrower in writing (Adjustment Notice) of the
adjusted Final Repayment Date and the amount
of the final Repayment Amount.
(ii) any applicable Early Repayment Administration
Fee.
(c) Requests for early repayment of the Principal
Outstanding (in whole or in part) will be considered
by the Lender on a case by case basis.
(d) The Adjustment Notice will, in the absence of
manifest error, be conclusive evidence of the
matters set out in it.
(d) Requests for early repayment must be in writing
and signed by an Authorised Signatory, addressed
to the CBA Corporate Loan Administration Team
(fax 1300 857 262, phone 1800 115 891) and
should include the following details:
(e) In the event that the Borrower has financial
indebtedness to the Lender other than pursuant
to this Loan Agreement, nothing in this clause
4.6 prejudices the Lender’s absolute discretion to
apply the Insurance Proceeds in reduction of any
indebtedness of the Borrower to the Lender as
the Lender sees fit.
(i) the Funds (including Date of Advance of Funds);
(ii) the proposed date of the early repayment (which
must be at least 2 Business Days after the date
on which the written request for early repayment
is sent by the Borrower);
5.
Interest
5.1
Interest
(iii) the amount of principal and interest that it
wishes to prepay; and
(a) The Borrower must pay to the Lender Interest on
the Principal Outstanding from the Date of Advance
calculated at the Fixed Interest Rate or the Variable
Interest Rate, whichever is selected by the
Borrower in the Application.
(iv) the account into which it proposes to make
the prepayment.
4.4
No Redraw
Such interest is payable on each Repayment Date.
Interest accrues daily and is computed on a daily basis
on a year of 365 days.
The Borrower may not reborrow any part of an
Advance which has been repaid or prepaid.
4.5
Confirmation Notice
(b) The Borrower must pay interest on the Moneys
Payable due and payable, but unpaid, at the
Overdue Rate.
The Lender will provide the Borrower with a
Confirmation Notice:
(a) within 30 days of the making of an Advance of the
Funds, where the Borrower has selected a Fixed
Interest Rate, detailing the Funds, the Repayment
Dates and Repayment Amounts over the life of the
loan; or
5.2
Interest payable under clause 5.1(b):
(a) accrues from day to day from and including the due
date for payment up to the actual day of payment,
before and as an additional and independent
obligation, after a judgement or other thing into
which the liability to pay the Moneys Payable
becomes merged; and
(b) every month, where the Borrower has selected a
Variable Interest Rate, detailing the relevant Base
Rate for the period; and
(c) upon early repayment of the Principal Outstanding,
including details of any revised Repayment Dates or
Repayment Amounts and the amount of any break
fees, break costs or administration fees to be
charged by the Lender.
4.6
(b) may be capitalised by the Lender on the last day of
the month in which interest became due (or any other
day determined by the Lender in its discretion).
5.3
(b) On Prepayment, the Lender will calculate interest
savings on the Prepayment with any savings
deducted from the principal component of the
Application of payments
Subject to clause 4.6 all payments by the Borrower
to the Lender will be applied first, in payment of any
Interest then due, second, in repayment of the Principal
Outstanding and then in payment of other Moneys
Payable to or recoverable by the Lender under the
terms of this Loan Agreement.
Application of Proceeds
(a) Any Insurance Proceeds received by the Borrower
that are not applied to the replacement of the
damaged or destroyed Trees or Woodlots must
be applied by the Borrower in prepayment of the
principal component of the Repayment Amounts
that would have been payable on and immediately
to the Final Repayment Date (Prepayment).
Accrual of Interest on overdue Moneys Payable
5.4
Repayment Amounts include interest
The Borrower and the Lender acknowledge that the
Repayment Amounts will incorporate the payment
of Interest payable under clause 5.1(a).
Willmott Forests – Premium Forestry Blend Project 2009 PDS
111
CBA Loan Agreement
6.
continued
Manner of payment
8.
Charge relating to Project
The Repayment Amounts and all other amounts
payable by the Borrower under this Loan Agreement
may be debited by the Lender from the Direct Debit
Account in accordance with the Direct Debit Request
Service Agreement.
8.1
Grant of charge
7.
Costs and expenses
7.1
Borrower’s Costs
(a) As security for the due and punctual payment of
all Moneys Payable to the Lender under this Loan
Agreement and for performance of the Borrower’s
obligations under this Loan Agreement, the Borrower
hereby charges, by way of a fixed charge, all of the
Borrower’s interest in the Project to the Lender,
including, without limitation:
(i) all of the Borrower’s right, title, estate and benefit
in and to the Agreements whether proprietary,
contractual or otherwise and the full benefit of all
the rights, powers and remedies of the Borrower
under the Agreements;
The Borrower must pay to the Lender:
(a) a loan Establishment Fee (including any applicable
GST) , which includes;
(i) an application fee; and
(ii) without limiting paragraph (i), all of the
Borrower’s right, title, estate and benefit in and
to the Woodlots and all Timber Produce to be
grown or growing on the Woodlots and the
proceeds of sale thereof the subject of the
Agreements; and
(ii) a fee to cover the Lender’s legal and
administrative costs and expenses in considering
and approving the Application and preparing this
Loan Agreement;
(b) a Stamp Duty Administration Fee in an amount
equal to 0.3% of the Principal Amount;
(iii) without limiting paragraph (i) and (ii), the proceeds
of Disposal of all Timber Produce and the
Insurance Proceeds.
(c) a Monthly Loan Service Fee in an amount of
$20 per month;
(d) all costs and expenses incurred by the Lender in
relation to the enforcement, protection or waiver
of any rights under this Loan Agreement including
any bank dishonour fees, legal costs and expenses
and any professional or consultant fees, on a full
indemnity basis;
(b) The Charge is, until finally discharged by the Lender
in writing, a continuing security for the performance
of the Borrower’s obligations to the Lender under
this Loan Agreement (and any other arrangement
between the Borrower and the Lender) and takes
priority over all other mortgages, charges or other
encumbrances.
(e) all costs, expenses and fees connected with early
repayment as set out in clause 4.3; and
(c) The Borrower acknowledges that all or part of the
Principal Outstanding is advanced to assist the
Borrower to acquire the Charged Property and
on the express understanding that the Charge
would be granted over the Charged Property
and accordingly:
(f) all stamp duty, transaction, registration and similar
Taxes, including fines and penalties and debits tax
which may be payable to or required to be paid
by any appropriate authority or determined to be
payable in connection with the execution, delivery,
performance or enforcement of the Transaction
Documents or any payment, receipt or other
transaction contemplated by them (to the extent
not covered by the Stamp Duty Administration Fee),
and indemnifies the Lender against any loss or liability
incurred or suffered by it as a result of the delay or
failure by the Borrower to pay Taxes.
7.2
(i) the Borrower acquires legal title to the Charged
Property subject to the Charge; and
(ii) the Charge ranks in priority to any other charge
or mortgage presently or subsequently granted
by the Borrower over the Charged Property.
8.2
The Borrower warrants that it has the power to grant
the Charge and undertakes that it will not grant, and
has not granted, any other mortgage, charge or other
encumbrance over the Charged Property or Dispose
of the Charged Property (other than to the Lender)
without the consent of the Lender.
Capitalisation of Fees
The Establishment Fee and the Stamp Duty Administration
Fee will be capitalised and Advanced by the Lender as
part of the Funds on the Date of Advance unless the
Borrower elects in the Application for such fees not be
capitalised, in which case the Borrower must pay those
fees to the Lender on the date of the Application or any
later date notified by the Lender to the Borrower.
Borrower’s warranty and undertaking
8.3
Insurance Proceeds
Where the Borrower has not applied the whole of the
Insurance Proceeds in replacement of the damaged
or destroyed Trees:
(a) the Insurance Proceeds to which the Borrower is
entitled must, subject to clause 4.6(e), be applied
in reduction of Moneys Payable;
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(b) until the Moneys Payable is repaid in full, the
Lender alone is entitled to give good receipt for
the Insurance Proceeds;
(ii) the execution, delivery and performance of
each Transaction Document to which it is a
party does not violate its Constitution or any law
applying to it and, if it or any of its subsidiaries is
listed on the Australian Stock Exchange Limited
or on any other stock exchange, those listing
requirements or business rules;
(c) the Borrower will, on the request of the Lender,
direct any person responsible for payment of the
Insurance Proceeds to pay the Insurance Proceeds
to the Lender;
(iii) it has taken all corporate and other action
required to enter into any Transaction Document
to which it is a party and to authorise the execution
and delivery of that Transaction Document and
the satisfaction of its obligations under it; and
(d) the Borrower will, on the request of the Lender,
appoint the Lender as the Borrower’s agent to give
full effect to this clause 8.3;
(e) payment to the Lender in terms of clause 8.3(c) will
discharge the obligation of the person responsible
for payment of the Insurance Proceeds to the
same extent as if the payment was made to the
Borrower;
(iv) it has filed all corporate notices and effected all
registrations with the Australian Securities and
Investments Commission and all of those filings
and registrations are current, complete and
accurate.
(f) to the extent the Borrower receives the Insurance
Proceeds, the Borrower holds the Insurance
Proceeds on trust for the Lender in terms of
paragraph b;
(d) it is not in any default that is material to this Loan
Agreement under any agreement, undertaking or
instrument to which the it is a party or by which it
is bound. Also, no event has occurred which, with
the giving of notice or lapse of time or both, would
constitute a default (which is material to this Loan
Agreement) under any agreement, undertaking or
instrument;
(g) until the Moneys Payable have been repaid in
full the Lender alone has power to enforce, settle,
compromise, sue on, recover, receive and discharge
all claims under the Timber Insurance.
8.4
Charged Property
(e) there is no current, pending or threatened litigation,
arbitration or administrative proceedings against or
concerning the it which, if successful, would render
the it substantially less likely to be able to perform
its obligations under this Loan Agreement; and
For the purposes of clause 8, the term Charged
Property means the property described in clause 8.1(a).
9.
Guarantee
(f) all information relating to it or any Guarantor
provided to the Lender in connection with the
Funds and each Transaction Document is true
in all material respects and is not, by omission
or otherwise, misleading in any material respect.
(a) Where a Guarantor is specified in and signs the
Application, that Guarantor gives the guarantee
as set out in the relevant Guarantee Documents.
(b) Each Guarantor confirms that it has had regard to
the important information for Guarantors set out in
Schedule 3.
10.2 Repetition of Representations and Warranties
The representations and warranties in clause 10.1
are deemed to be repeated by the Borrower on each
day that the Moneys Payable remain outstanding.
(c) Each Guarantor that is a trustee gives the
representations, warranties and undertakings set
out in Schedule 6.
(d) Each Guarantor gives the information
acknowledgements and consents set out in
Schedule 2.
10.
Representations and Warranties
10.1 Representations
The Borrower represents and warrants that:
(a) where the Borrower is an individual, that the
Borrower is not an undischarged bankrupt
and has not assigned its estate or entered into
any arrangement or composition for the benefit
of its creditors;
(b) where the Borrower is an individual, that the
Borrower is not less than eighteen years of age;
(c) where the Borrower is a company, that
(i) it is duly registered and remains in existence;
11.
Undertakings and acknowledgements
11.1 Undertakings
For so long as there remain Moneys Payable under the
Transaction Documents, the Borrower undertakes to
the Lender that it will:
(a) carry on and conduct the Business in a proper and
efficient manner;
(b) on the written direction of the Lender, insure its
interest under the Agreement for its market value
or the amount financed under this Loan Agreement,
(whichever is greater) with an insurer approved by
the Lender and ensure that the Lender is noted
as loss payee on the relevant insurance policy;
(c) not take any action that would constitute or result
in a change to the nature of the Business if that
change either by itself or with other changes,
would constitute a material adverse change
to the nature or profitability of the Business;
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CBA Loan Agreement
continued
(h) it has not done, or failed to do, any act whereby
any of the assets of the Trust have been acquired
by any other person, no assets of the Trust are
presently registered in the name of any other person,
and no person, other than the beneficiaries previously
notified to the Lender has acquired any right of any
kind whether vested or contingent in any asset of
the Trust;
(d) on request from the Lender, provide evidence
in respect of itself and any Guarantor, supporting
any information specified in the Application.
11.2 Further undertakings
In respect of any loan where the total Funds are equal
to or greater than $1,000,000, the Borrower undertakes
that it will provide to the Lender on an annual basis and
at the Lender’s request:
(i) it is to the commercial benefit of the Trust that it
enters into the Transaction Documents in its capacity,
inter alia, as trustee of the Trust and charges the
property of the Trust as provided in the Transaction
Documents; and
(a) where the Borrower is an individual, copies of
its latest tax return and two recent payslips; or
(b) where the Borrower is trust or company, copies
of its latest tax return and financial statements.
11.3 Acknowledgements
(j) it, as trustee of the Trust, has valid rights of indemnity
and exoneration against the assets of the Trust,
which rights are available for satisfaction of all
liabilities and other obligations incurred by the
Borrower under the Transaction Documents.
The Borrower gives the information acknowledgements
and consents set out in Schedule 1.
12.
Trust
12.4 Variation of the trust
12.1 Trust
The Borrower must not without the Lender’s prior
written consent permit any:
This clause applies if the Borrower enters into this Loan
Agreement as trustee of a trust.
(a) resettlement, appointment or distribution of capital
of the Trust;
12.2 Liability
The Borrower entered into this Loan Agreement on its
own behalf and as trustee of the Trust. The Borrower
and its successors as trustee of the Trust will be liable
under this Loan Agreement as trustee of the Trust to
the intent that all the assets both future and present
of the Trust will be available to satisfy the Borrower’s
liabilities. Nothing in this Loan Agreement releases the
Borrower from any liability in its personal capacity.
(b) retirement or replacement of the trustee or any
appointment of a new trustee of the Trust;
(c) amendment of the Trust Deed establishing the Trust;
(d) breach of the provision of the deed establishing the
Trust; or
(e) termination of the Trust or variation of the vesting
date, and if any of the above occur, the Borrower
must promptly inform the Lender.
12.3 Warranties
The Borrower warrants that at the date of its execution
of this Loan Agreement that:
(a) it has power to enter into the Transaction
Documents in its capacity as trustee of the Trust;
(b) it has taken every necessary action to authorise
entry into the Transaction Documents;
(c) the Trust has been validly created and is in
existence at the date of this Loan Agreement;
(d) it has been validly appointed as trustee of the
Trust and is presently the sole trustee of the Trust;
(e) the Trust is solely constituted by the Trust Deed, a
true copy of which was provided to the Lender or
its agent before the date of this Loan Agreement;
(f) a date has not been declared under the Trust Deed
as the date on which the Trust will be vested or
come to an end;
(g) no proceedings of any description have been or
are likely to be commenced or threatened which
could have a material adverse effect on the assets
or financial position of the Trust or the Borrower’s
trusteeship of the Trust;
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13.
Default
13.1 Events of Default
An Event of Default occurs if:
(a) the Borrower fails to pay any Moneys Payable
on the due date for payment of that sum;
(b) the Borrower fails to ensure there is sufficient credit
available in the Direct Debit Account to satisfy the
Borrower’s obligations under the Transaction
Documents;
(c) there is a breach of the Borrower’s Covenants
which is not capable of remedy;
(d) a breach of the Borrower’s Covenants which is
capable of remedy, other than a failure to pay
money, is not remedied with 5 Business Days
after written notice is given to the Borrower by
the Lender requiring the Borrower to remedy
the default;
(e) any representation, warranty or statement made
or deemed to be made by the Borrower or a
Guarantor in any Transaction Document proves to
have been untrue in a material respect when made
or deemed made (whether the lack of correctness
is apparent at the time or becomes apparent
subsequently);
(ii) the Charged Property;
(f) the Borrower ceases or threatens to cease to carry
on the Business without first obtaining the consent
of the Lender;
(o) the Borrower or any Guarantor without the Lender’s
prior written consent creates, purports to create or
attempts to create any security interest whether
ranking in priority to or of equal ranking with the
Charge over any assets the subject of the Charge;
(g) the Insurance Proceeds are not received by the
Lender or applied in accordance with clauses 4.6
and 8.3 (as the case may be);
(p) the Borrower or any Guarantor without the Lender’s
prior written consent:
(h) any property the subject of the Charge is forfeited,
terminated or cancelled or the Borrower fails to do
any act, matter or thing necessary to prevent those
events occurring;
(i) stops payment to any of its creditors;
(ii) is unable to or admits inability to pay its debts
as they fall due; or
(i) the Lender determines that as a result of a change
in the law, a regulation, or an official directive that
has the force of law, it is or will become impossible,
illegal or contrary to such a directive, for the Lender
to advance, maintain or fund, any of the Moneys
Payable or otherwise observe or perform any
covenant or obligation of the Lender under this
Loan Agreement;
(j)
(iii) ceases or threatens to cease to carry on its
business; or
(q) in the opinion of the Lender a materially adverse
change occurs to the financial position of the
Borrower or any Guarantor which renders it less
likely that the Borrower or any Guarantor is able to
substantially comply with its obligations under any
Transaction Document.
the Borrower or any Guarantor is a company and:
(i) an application is filed, an order is made or a
resolution is passed for the winding-up of it
or a meeting is convened for the purpose of
considering such a resolution;
13.2 Declaration
(a) If an Event of Default occurs, the Lender is entitled
to declare, by notation of an officer of the Lender
on the Lender’s records to that effect, that the
Borrower is in default and that all Moneys Payable
are immediately payable.
(ii) an administrator or provisional liquidator is
appointed to it;
(iii) the appointment to it of an administrator or
provisional liquidator is threatened or proposed;
(b) On the Lender making a declaration under clause
13.2(a) any amounts owing or payable (contingently
or otherwise) to the Lender under the Transaction
Documents become immediately payable without
any demand or notice to the Borrower to that effect
being necessary.
(iv) it enters into any agreement, reconstruction or
composition with its creditors; or
(v) it proposes to enter into any arrangement,
reconstruction or composition with its creditors;
(c) The Lender’s right to make the declaration referred
to in clause 13.2 is exercisable despite any delay or
previous waiver of that right.
(k) the Borrower or any Guarantor is an individual and:
(i) a petition is presented or an order is made for
the sequestration of its estate;
(ii) it executes an authority authorising the calling
of a meeting of its creditors under Part X of the
Bankruptcy Act 1966; or
(iii) it executes a Deed of Assignment or Deed of
Arrangement or it enters into composition under
that Part;
(l)
13.3 Produce
If no Event of Default has occurred the Lender will
not insist on Harvest Proceeds (other than Harvest
Proceeds relating to the final harvest from the Project)
being applied in reduction of the Moneys Payable.
13.4 Release of Charge
Despite any other provisions of this Loan Agreement,
if the Borrower proposes to Dispose of all or part of
the Timber Produce in accordance with the Agreement,
the Lender must release and discharge the Charge
over the Timber Produce (as the case may be) proposed
to be Disposed of subject to the application of the
proceeds of Disposal in accordance with this Loan
Agreement.
a Receiver is appointed over:
(i) the undertaking or any part of the undertaking
of a Borrower or any Guarantor where either
is a company; or
(ii) the business or any asset comprising part of a
business of a borrower or any Guarantor where
either is an individual;
(m) an encumbrancer takes possession of any of the
assets of the Borrower or any Guarantor;
(n) any execution or other process of any court
or authority or any distress is issued against
or levied on:
(i) any or all of the assets of the Borrower or any
Guarantor; or
14.
Receivers: appointment and Powers
14.1 Appointment of Receiver
If any Event of Default occurs then, during the period
it subsists, the Lender may in respect of any Borrower
that is a corporation:
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CBA Loan Agreement
continued
(a) appoint any person or persons to be a receiver or
receiver and manager of the Charged Property;
(b) terminate the appointment of any Receiver; and
(c) in case of the removal, retirement or death of any
Receiver, appoint another person or persons in
the place of that Receiver.
14.2 Joint Receivers
If more than one person is appointed as a Receiver, the
Lender may at its option specify whether the appointment
and the Powers of each appointee will be joint or joint
and several. If no specification is made, the appointment
and the Powers of each appointee will be joint and
several.
14.3 Remuneration of Receiver
The Lender may fix the rate of remuneration of each
Receiver, which will not exceed the standard hourly
rate from time to time charged by the firm of which
that Receiver is a member for work of the level carried
out by that Receiver.
14.4 Agent of Borrower
Each Receiver will be the agent of the Borrower.
The Borrower will be solely responsible for all acts and
omissions by, and the remuneration of, each Receiver.
14.5 Powers of Receiver
Without the need for any consent from the Borrower
or any other person, each Receiver will have all of the
following powers:
(a) (Section 420) all of the powers granted to a
receiver of property of a corporation under section
420 of the Corporations Act;
(b) (Dispose) whether or not in possession, to dispose
of the Charged Property in such manner and on
such terms as the Receiver thinks fit;
(c) (Borrow or raise money) to borrow or raise from
the Lender or any other person any money which
may be required for any purposes and, if the
Receiver thinks fit, to secure any money borrowed
or raised by the grant of any Encumbrance over
the Charged Property (whether in the name of the
Borrower or otherwise) so that the Encumbrance
ranks in priority to, pari passu with or after the
Charge. The Lender will not be bound to inquire
as to the necessity or propriety of any financial
liability nor be responsible for the misapplication or
non-application of any money so borrowed or raised;
(d) (Lease) whether or not the Receiver has taken
possession, to lease or licence the Charged Property
in the name of the Borrower or otherwise, for any
period and on any terms or to vary or terminate
a lease or licence;
(e) (Collection) collect the Charged Debts;
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(f) (Engage) to engage consultants, contractors,
professional advisors, agents and employees
(including any person associated with a firm or
company in which the Receiver is a member or
in which the Receiver is interested and that person
may charge for his or her services as if independently
retained at a salary or remuneration determined
by the Receiver) and the Receiver may act on
any advice given by any person so engaged;
(g) (Conduct works) to repair, renew, replace, renovate
or clean the Charged Property, to erect any new
buildings or make any improvements to any land
forming part of the Charged Property and to
demolish, alter, rebuild or extend any existing
buildings on the Charged Property;
(h) (Invest proceeds against contingencies) if any of
the Moneys Payable is contingent, to invest, deposit
or hold the Charged Property in a form or mode of
investment for the time being as the Receiver thinks
fit, with like power to vary, transpose or re invest
the investments or deposits from time to time until
that part of the Moneys Payable ceases to be
contingent;
(i) (Perform contracts) to perform, observe, carry out,
enforce specific performance of, exercise or refrain
from exercising, the Borrower’s rights and powers
under, obtain the benefit of, and vary or rescind all
contracts and rights forming part of the Charged
Property or entered into in the exercise of any Power;
(j) (Take proceedings) to institute, conduct or defend
any proceedings in law or bankruptcy and to submit
to arbitration, mediation or conciliation, in the name
of the Borrower or otherwise and on any terms, any
proceeding, claim, question or dispute in connection
with the Charged Property or otherwise;
(k) (Compromise) to make any settlement, arrangement
or compromise regarding any action, proceeding
or dispute arising in connection with the Charged
Property, to grant to any person involved time or
other indulgence and to execute all related releases
or discharges as the Receiver thinks expedient in
the interests of the Lender;
(l) (Appeal) to appeal against or to enforce any judgment
or order in respect of the Charged Property;
(m) (Bankrupt debtors and wind up bodies corporate)
to make debtors bankrupt and to wind up bodies
corporate and to do all things in connection with
any bankruptcy or winding up which the Receiver
thinks necessary for the recovery or protection of
the Charged Property or for the security or other
benefit of the Lender;
(n) (Delegate) with the Lender’s prior approval, to
delegate to any person, for any time, any of the
Powers including this power of delegation;
(o) (File) to file all certificates, registrations and
other documents and to take any and all action on
behalf of the Borrower which the Receiver believes
is necessary to protect, preserve or improve any
or all of the Charged Property and the rights of
the Borrower and the Lender in respect of any
agreement for sale and to obtain for the Lender
all of the benefits of this Loan Agreement and any
other Transaction Document;
15.2 Act jointly
(p) (Operate bank accounts) to open or operate any
bank account in the name of the Borrower (whether
alone or jointly with any other person) to the exclusion
of the Borrower and to deposit or withdraw any
money standing to the credit of that account and
to sign and endorse or to authorise others to sign
and endorse in the name of the Borrower cheques,
promissory notes, bills of exchange and other
negotiable instruments;
15.3 Power of attorney
(q) (Do all other things) to do all things the law allows
an owner of any interest in the Charged Property, or
any Controller of the Charged Property, to do; and
(r) (Do all things as are expedient) to do all other acts
and things without limitation as the Receiver thinks
expedient,
and any further powers as the Lender confers on a
Receiver by notice in writing to that Receiver.
14.6 Indemnity
The Lender may give any indemnities to any Receiver
concerning the performance of that Receiver’s duties
as are permitted by law. If the Lender is obliged to
pay any money under any indemnity, that money will
become part of the Moneys Payable.
15.
Lender’s Powers
15.1 Exercise of Power
If any Event of Default occurs then, during the period it
subsists, the Lender may without notice and whether
or not a Receiver has been appointed:
(a) exercise all or any of the Powers conferred on
a Receiver, or which would be conferred on a
Receiver if appointed, as if those Powers had
been expressly conferred on the Lender;
(b) exercise all other Powers; and
(c) appoint an agent or agents (whether severally,
jointly or jointly and severally) and delegate the
Powers (or any of them) to the agent or agents
(in which case clauses 14.1, 14.3 and 14.6 will
apply as if the agent or agents were each
appointed as a Receiver).
The Lender and each Receiver may exercise any of
the Powers in conjunction with the exercise of similar
powers by the holder of any other Encumbrance over
the Charged Property or by any receiver or receiver and
manager appointed by that other holder and may enter
into and give effect to agreements and arrangements
with that other holder, receiver or receiver and manager
as the Lender or the relevant Receiver thinks fit.
In consideration of the Lender entering into the
Transaction Documents, the Borrower irrevocably
appoints the Lender and each of its authorised officers
and attorneys and each Receiver, severally, as an
attorney of the Borrower with power:
(a) at all times to ensure that this Loan Agreement is
registered and filed in all registers in all jurisdictions
in which it must be registered and filed to ensure
enforceability, validity and priority against all persons
and to be effective as a security and to sign and
register all documents, forms and other instruments
under the Corporations Act as the Australian
Securities & Investments Commission; and
(b) at any time an Event of Default has occurred
and is subsisting:
(i) to do all acts which ought to be done by the
Borrower under any Finance Document;
(ii) to do all acts to exercise or give effect to any
Power;
(iii) to demand, sue for, recover and receive the
Charged Property from any person, in the name
of the Borrower or in the name of the Lender,
the relevant Receiver or any other attorney
appointed under this clause 15.3;
(iv) to take further action and to execute further
instruments which are, or are in the opinion of
the Lender, the relevant Receiver or any other
attorney appointed under this clause 15.3,
necessary or desirable to secure more
satisfactorily the performance of the Borrower’s
Covenants or the payment of the Moneys
Payable or to sell or otherwise deal with the
Charged Property; and
(v) to appoint (and remove at will) at any time any
person as a substitute for an attorney.
(c) The Borrower ratifies and confirms now and for the
future all actions lawfully undertaken by or on behalf
of any attorney under this power of attorney.
(d) The Borrower declares that this power of attorney
will continue in force until all actions taken under
it have been completed, despite the discharge of
the Charge.
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continued
(e) The Borrower will do anything requested by the
Lender, acting reasonably, to enable the Lender to
register this power of attorney in the manner and
within any time limits prescribed by law to ensure
the efficacy of this power of attorney.
16.
(a) All payments to be made by the Borrower
under this Loan Agreement have been calculated
without regard to GST. If a payment constitutes
the consideration for the whole or part of a Taxable
Supply by the Lender, the amount of that payment
must be increased so that the Lender will receive
(net or payments by it in respect of GST) the
amount which the Lender would have received
in the absence of a GST.
15.4 Lender may make good any default
If the Borrower defaults in satisfying any of the
Borrower’s Covenants, the Lender may, without
prejudice to any other Power, do all things and pay
all money necessary or expedient in the opinion of the
Lender to make good or to attempt to make good that
default to the satisfaction of the Lender. The Borrower
will take all steps which the Lender, acting reasonably,
requests to facilitate the exercise by the Lender of its
rights under this clause 15.4. The Lender will not be a
mortgagee or chargee in possession simply as a result
of the exercise of its rights under this clause 15.4.
(b) If the Lender makes a Taxable Supply, the Borrower
agrees (except to the extent that the Lender is
entitled to be indemnified in respect of that GST by
an increased payment under clause 18(a) above) to
pay on demand to the Lender an additional amount
so that the Lender will receive the amount (net of
payments by it in respect of GST) which the Lender
would have received in the absence of a GST.
15.5 Notice for exercise of Powers
(a) The Powers may be exercised by the Lender and
any Receiver at any time during the period any
Event of Default subsists, without any notice,
demand or lapse of time being necessary unless
required by a law which cannot be excluded.
(c) If a payment or other consideration provided by
the Lender to a person other than the Borrower
under or in connection with this Loan Agreement or
a transaction contemplated by this Loan Agreement
may be increased or added to by reference to a
GST, the Borrower agrees to pay on demand to
the Lender the amount necessary to indemnify
the Lender in respect of that increase or addition.
(b) Subject to clause 15.5(c), if required by any
law which cannot be excluded, one day is fixed
as the period for which:
(d) If the Lender becomes liable to pay a penalty or
interest because of late payment of GST where
that late payment is because of the failure of the
Borrower to comply with this clause, then the
Borrower agrees to pay on demand to the Lender
an additional amount equal to the amount of that
penalty or interest.
(i) default must continue in the satisfaction of the
whole or any part of the Obligations or in the
payment of any part of the Moneys Payable
before the Lender may give any notice or
demand as required by any law affecting
the Powers; and
(ii) default in the satisfaction of the whole or
any part of the Borrowers Covenants or in the
payment of any part of the Moneys Payable
must continue after the giving of any notice or
demand before any Power may be exercised.
(c) If any law which cannot be excluded provides
that a specific period of notice or lapse of time
is mandatorily required before any Power may
be exercised by the Lender or any Receiver,
that period of notice must be given or time must
elapse before that Power may be exercised.
GST Indemnity
17.
Assignment
17.1 Assignments by the Lender
(a) The Lender may at any time assign or otherwise
transfer all or any part of its rights under any
Transaction Document (including the benefit of the
Charge), and may disclose to a proposed assignee
or transferee any information in the possession of
the Lender relating to the Borrower and the
Guarantor.
(b) The Lender may assign part of or an interest in the
benefit of the Charge whilst retaining the benefit of
the other part or interest in the name of the Lender
or in the name of a trustee on trust for the Lender
to secure the Moneys Payable or part of it.
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17.2 Assignments by the Borrower
The Borrower cannot assign any of its rights under
any Transaction Document without the Lender’s prior
written consent.
17.3 Successors and assigns
This Loan Agreement is binding on and enures to the
benefit of each party to it and that party’s respective
successors and permitted assigns.
18.
Governing law
This Loan Agreement is governed by and must be
construed according to the law applying in Victoria.
19.
Jurisdiction
(a) Each party irrevocably submits to the non exclusive
jurisdiction of the courts of Victoria, and the courts
competent to determine appeals from those courts,
with respect to any proceedings which may be
brought at any time relating to this Loan Agreement.
(b) The Borrower irrevocably waives any objection it
may now or in the future have to the venue of any
proceedings, and any claim it may now or in the
future have that any proceedings have been
brought in an inconvenient forum, if that venue
falls within clause 19(a).
20.2 Service of notice
Any notice required to be given to the Borrower or the
Guarantor pursuant to a Transaction Document may
be signed by the Lender, any officer of the Lender or its
solicitors and will be deemed to have been duly given
if given in writing to the Borrower or the Guarantor (as
the case may be) by letter addressed to the Borrower
or the Guarantor at its address as provided in the
Application or such other address in Australia as notified
in writing by the Borrower or Guarantor at any time to
the Lender. Any notice given by post will be deemed
to have been served on the next ordinary business
day after the day when it was posted and in proving
such service it will be sufficient to prove that the letter
containing the notice was properly addressed and
posted, and a statement signed by the Lender that it
was so posted and when shall be conclusive evidence
of that fact.
20.3 Lender may insure
The parties to this Loan Agreement acknowledge that
the Lender may effect and maintain on the Borrower’s
life, for the Lender’s benefit, a policy of term life insurance
(Policy) for an amount not less than the Principal
Outstanding until repayment of all Moneys Payable.
The Borrower agrees to do all things necessary to
enable the Lender to do so and maintain the Policy
in full force and effect and not do anything that would
which would prevent money being recovered under it.
20.4 Secondary market
20.
Miscellaneous
20.1 Severance
If at any time a provision of any Transaction Document
is or becomes illegal, invalid or unenforceable in any
respect under the law of any jurisdiction, that will not
affect or impair:
(a) the legality, validity or enforceability in that jurisdiction
of any other provision of that Transaction
Document; or
(b) the legality, validity or enforceability under the law of
any other jurisdiction of that or any other provision
of that Transaction Document.
The Borrower acknowledges that there may be no
secondary market for the Charged Property. In the
event that the Lender (or any assignee, agent, or
transferee of the Lender) exercises its rights under
this Loan Agreement, a sale price may be accepted
by the Lender as bona fide and reasonable if certified
as such by Willmott or some other person experienced
in valuing assets of a like nature. If the Lender or a
Receiver exercise the Lender’s rights under this Loan
Agreement, neither the Lender nor any Receiver is
liable to account as mortgagee in possession of the
Charged Property at any time.
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CBA Loan Agreement
continued
SCHEDULE 1 – INFORMATION
ACKNOWLEDGEMENT AND CONSENT (BORROWER)
In this Schedule:
• “I”, “me” and “my”, includes individual borrowers, partners
in a partnership and directors of corporate borrowers;
• “you”, “your” and “yours” means Commonwealth Bank
of Australia ABN 48 123 123 124;
• the singular includes the plural; references to legislation
include all consolidations, amendments, re-enactments
or replacements of, any Act or regulations.
Continuing Authority – Borrowers and Directors of
Corporate Borrowers
All consents, acknowledgements and authorities in this
Acknowledgement and Consent remain in force to cover
this and any other application by me (either by myself or with
others – including persons who have not signed this form).
It continues for so long as you provide credit to me or my
company under any facility.
Part 1 – Personal Information Generally
Personal Borrowers – Collection, Use and Disclosure of
Personal Information
I acknowledge that:
• you collect personal information so that you may provide
me with the products and services I request, as well as
marketing information on products and services offered by
the Commonwealth Bank Group and its affiliated products/
service providers; and external product/service providers
for whom the Bank acts as agent;
• I acknowledge that your agents are bound by confidentiality
arrangements and may only use my personal information
for your purposes.
Part 2 – Credit Information Acknowledgements and
Authorisations
If I am attending on behalf of a number of applicants or a
number of directors of a corporate applicant, I certify that
I have the authority of the other applicant/s named in the
loan application to consent to you obtaining credit reports
and checks on all of us.
I also confirm that I will inform each other applicant that
their personal information may be disclosed to a credit
reporting agency.
Credit Reporting Agencies (“Agencies”)
If a am a personal borrower or Director of a corporate
borrower I authorise you and your agents to give to and
receive personal and credit information (including commercial
credit information) from Agencies which relates to my
application for personal credit or my company’s application
for commercial credit and which may be used for:
• identifying me;
• assessing my application for personal credit or my
company’s application for commercial credit;
• collecting overdue payments;
• if I have given you my e-mail or mobile phone details,
marketing information on those products and services may
be provided to me electronically;
• assessing whether to authorise a large credit transaction
outside of my or my company’s normal transactional
activities;
• the law can require you to collect personal information –
e.g. to identify persons who open or operate accounts;
• the provision or management of securities loans;
• if I provide you with incomplete or inaccurate information,
I may not be able to obtain from you the products or
services I am seeking;
• assisting me or my company to avoid defaulting on my
credit obligations.
I also authorise you to notify Agencies that you are a credit
provider to me or my company as well as:
• the Privacy Act permits you to disclose my personal
information to other members of the Commonwealth Bank
Group, enabling the Group to have an integrated view of its
customers;
• of overdue payments in excess of 60 days and cheques
of mine or my company’s which you have dishonoured
more than once;
• you may be permitted or obliged to disclose information
by law, eg under court order or statutory notices;
• the fact that I or my company may have committed
a serious credit infringement;
• you will send information overseas if that is necessary to
complete a transaction, or if you outsource functions using
overseas agents or contractors;
• that credit you provided me or my company has been
discharged.
• I can find out more about your personal information handling
policies by going to your Privacy Policy Statement at
www.commbank.com.au.
120
• I authorise you to communicate my personal information
to my brokers, agents, advisers, as well as valuers and
insurers and organisations to whom you outsource certain
functions.
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Other Credit Providers
If I am a personal borrower or a Director of a corporate
borrower, I authorise you to give to and obtain information
about me or my or my company’s personal or commercial
credit arrangements from credit providers who are:
• named in an application of mine (or my company’s) to you
for credit;
• participants in a securitisation scheme in which you are
involved;
• agents of yours;
• named in a personal or commercial credit report concerning
me or my company issued by an Agency.
I understand this information can include credit information
of any kind and I acknowledge that the information may be
given or used for the following:
• assessing applications for finance;
• averting default on credit obligations and assessing the
situation if such default is made;
I also authorise you to provide to the Guarantor any other
information regarding the Facility (as well as any facility to be
refinanced by the Facility) that the Guarantor may reasonably
require; and advice as to whether the Facility will be cancelled
if the Guarantee is not provided.
Disclosure to Insurers
I authorise you to give my personal or my company’s
information to trade insurers and mortgage insurers, who
may use or disclose my personal information in accordance
with the Privacy Act.
Disclosure to Agents
I authorise the persons named in the Application as my
disclosure agents(and all other persons named as applicants
in my credit application) to give to and/or receive from you
any record or personal information about me or my company
in connection with the processing and accepting of any
application to you for credit and/or the subsequent
management of the credit provided.
• notifying defaults;
Part 3 – Verification of Details, Access and Continuing
Authority
• the provision of management of securitised loans.
Verification of Details and Access to Personal information –
All Parties
I acknowledge that you verify the identity of natural persons
via the collection of personal information (including company
searches). I authorise and consent to you obtaining personal
information about me to verify my personal details. I also
acknowledge that I may (subject to permitted exceptions)
access my personal information by contacting Customer
Relations, Commonwealth Bank Group, Reply Paid 41,
Sydney NSW 2001 and that charges may apply for such
access.
I also authorise you to give and receive bankers’ opinions
relating to me or my company’s business or profession.
Disclosure to Guarantors
If I am a personal borrower or Director of a corporate
borrower, I authorise you to provide to any guarantor
any information or documents of any kind concerning the
creditworthiness, credit history, credit capacity and credit
standing of me or my company. These include as regards
the facility to be guaranteed (“Facility”):
• a copy of the contract for the Facility and the final letter
of offer;
• details of conditions set out in any earlier version of that
letter which may have already been met;
• any related credit report from a credit reporting Agency;
Continuing Authority
I also acknowledge that all consents, acknowledgements and
authorities in this Acknowledgement and Consent remain in
force for so long as the facility I have or my company has
guaranteed remains current.
• any financial accounts or statement of financial position
given to you within the previous two years;
• the latest statement of account; and
• any notice of demand given by you within the last two years
which has not been complied with to your satisfaction.
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121
CBA Loan Agreement
continued
SCHEDULE 2 – INFORMATION ACKNOWLEDGEMENT
AND CONSENT (GUARANTOR)
In this Schedule:
• “I”, “me” and “my”, includes individual guarantors and
directors of corporate guarantors;
• “you”, “your” and “yours” means Commonwealth Bank
of Australia ABN 48 123 123 124;
• the singular includes the plural; references to legislation
include all consolidations, amendments, re-enactments
or replacements of, any Act or regulations.
Part 1 – Personal Information Generally
I acknowledge that:
• my personal information is used and disclosed only for
purposes related to the proposed guarantee, is not shared
with other members of the Commonwealth Bank Group,
nor used for marketing purposes without my consent;
• participants in a securitisation scheme in which you
are involved;
• agents of yours;
• named in a personal or commercial credit report
concerning me or my company issued by an Agency.
I understand this information can include credit information
of any kind and I acknowledge that the information may
be given or used for the following:
• assessing whether to accept me or my company as a
Guarantor;
• the management of credit guaranteed by me or my
company;
• averting default on credit obligations and assessing
the situation if such default is made;
• the law can require you to collect personal information –
e.g. to identify persons who open or operate accounts;
• notifying defaults;
• you may be permitted or obliged to disclose information
by law, eg under court order or statutory notices;
• the enforcement of my or my Company’s Guarantee.
• you will send information overseas if that is necessary to
complete a transaction, or if you outsource functions using
overseas agents or contractors;
• I can find out more about your personal information handling
policies by going to your Privacy Policy Statement at
www.commbank.com.au.
I authorise you to communicate my personal information to
my brokers, agents, advisers, as well as valuers and insurers
and organisations to whom you outsource certain functions.
I acknowledge that your agents are bound by confidentiality
arrangements and may only use my personal information for
your purposes.
Part 2 – Credit Information Acknowledgements and
Authorisations
Credit Reporting Agencies (“Agencies”)
If I or my company is offering to act as guarantor, I authorise
you and your agents to give to and receive personal and
credit information (including commercial credit information)
from Agencies which relates to my offer to act as Guarantor
and which may be used for:
• identifying me;
• assessing my or my company’s suitability to act as
guarantor;
• collecting overdue payments;
• the provision or management of securitised loans;
• assisting me or my company to avoid defaulting on my
obligations.
I also authorise you to notify Agencies of overdue payments
in excess of 60 days.
122
Other Credit Providers
I authorise you to give to and obtain information about
me or my or my company’s personal or commercial credit
arrangements from credit providers who are:
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• the provision or management of securitised loans;
I also authorise you to give and receive bankers’ opinions
relating to me or my company’s business or profession.
Disclosures to Insurers
I authorise you to give my personal or my company’s
information to trade insurers and mortgage insurers, who
may use or disclose my personal information in accordance
with the Privacy Act.
Disclosures to Applicants and Agents
I authorise the persons named in the Application as my
disclosure agents as well as all persons named in the credit
application as applicants and their legal or financial advisers
to give to and/or receive from you any record or personal
information about me or my company in connection with
assessing my offer to act as guarantor and the processing
and accepting of any application to you for credit and/or
the subsequent management of the credit provider.
Part 3 – Verification of Details, Access and Continuing
Authority
Verification of Details and Access to Personal information
I acknowledge that you verify the identity of natural persons
via the collection of personal information (including company
searches). I authorise and consent to you obtaining personal
information about me to verify my personal details. I also
acknowledge that I may (subject to permitted exceptions)
access my personal information by contacting Customer
Relations, Commonwealth Bank Group, Reply Paid 41,
Sydney NSW 2001 and that charges may apply for such
access.
Continuing Authority
I also acknowledge that all consents, acknowledgements and
authorities in this Acknowledgement and Consent remain in
force for so long as the facility I have or my company has
guaranteed remains current.
SCHEDULE 3 – IMPORTANT INFORMATION FOR
GUARANTORS
WARNING: If the Borrower is under 18 years of age, you
may not have a right to recover from the Borrower amounts
that you must pay us under this guarantee.
If you pay us under an indemnity clause in the guarantee,
you may not have a right to recover that payment from the
Borrower.
IMPORTANT
Time for signing the Guarantee
If you are a Director Guarantor, you may also elect to waive
the “next day” waiting period otherwise required under the
Code before signing the Guarantee (see Schedule 4 –
Election under Clause 28.16 of the Code of Banking Practice
(Director Guarantors)).
If you have not received any of the material you should have
received, or your election concerning the next day waiting
period has been wrongly recorded, please contact us
immediately.
BEFORE YOU SIGN
• READ THIS INFORMATION DOCUMENT, THE GUARANTEE
TERMS IN SCHEDULE 9 or 10 (AS APPLICABLE) AND
THE GUARANTEED AGREEMENT.
• If you are an individual, you should also read the information
statement: “WHAT IT MEANS TO BE A GUARANTOR”
included after the Guarantee Terms (Individual Guarantors)
in Schedule 4.
• You should obtain independent legal advice and financial
advice.
• Whilst the Lender is obliged to provide you with certain
information, you should also make your own enquiries
about the credit worthiness, financial position and honesty
of the debtor (the debtor is referred to as the Borrower).
THINGS YOU MUST KNOW
• Understand that, by signing this guarantee, you may
become personally responsible instead of, or as well as,
the Borrower to pay amounts which the Borrower owes
and our reasonable expenses in enforcing this guarantee.
• If the Borrower does not pay you must pay. This could
mean you lose everything you own including your home.
• You may be able to withdraw from this guarantee or limit
your liability. Ask your legal adviser about this before you
sign this guarantee.
• We can change the Guaranteed Agreement without
reference to you. This may increase the amount secured by
the Guarantee. However it will not increase the Maximum
Amount you are liable to pay us under the Guarantee. That
Maximum Amount can only be increased if you agree to
the increase in writing.
Further matters concerning the loan, the Borrower(s) and
the Guarantee
Further material to be provided
We are required under the Code of Banking Practice (“Code”)
to provide you with certain information and documentation
before asking you to sign the Guarantee. If you are a Director
Guarantor, you can elect not to receive some of that material
(see Schedule 4 – Election under Clause 28.16 of the Code
of Banking Practice (Director Guarantors)).
Please be aware that we will not ask you to sign, nor will we
accept, the Guarantee unless we have allowed you the time
required under the Code of Banking Practice.
Maximum liability
Once you sign and return the enclosed documents, your
maximum liability to the Bank under the guarantee provided
to the Borrower(s) will be the Maximum Amount as defined
under the Guarantee.
In addition, you will be liable for any facilities advanced to you
in your own or joint names by the Lender now or in the
future.
Effect of signing
By signing the Guarantee, you will be acknowledging that the
Security mentioned in the Guarantee (if any) secures the
debts of the Borrower to the Lender.
This is in addition to any other debts which you may have
agreed to be secured by such Security by separate written
acknowledgement (for example, your own borrowings,
whether individually or jointly, or those of other borrowers
who you may have separately guaranteed).
What happens if you do not sign the Guarantee?
The Lender does not seek in any way to influence your
decision whether or not to provide the Guarantee. However,
under the Code of Banking Practice, the Lender is obliged to
inform you what will happen if your Guarantee is not given.
The result will be that the Advance of the Funds will not be
provided to the Borrower.
Please consider your position carefully
Read all the information and documents contained
in this document or that we have sent you
Before deciding whether to provide a Guarantee, you
should satisfy yourself that you understand the full nature
and effect of the transaction and of your liabilities to
the Lender. Please refer to the section in the Guarantee
document entitled “What It Means To Be A Guarantor”
which is set out behind the Guarantee Terms (Individual
Guarantor) in Schedule 4. You must read this carefully,
as it contains important information and warnings
regarding the obligations and liabilities of Guarantors.
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123
CBA Loan Agreement
continued
Legal and financial advice
The Lender strongly recommends that you obtain legal and
financial advice as to the effect on you and your liabilities
under the enclosed documents.
If you decide to seek legal advice, when seeing your solicitor,
you should take all original documents you have been asked
to sign. Please ask your solicitor to witness your execution of
the documents.
Executing the documents
If you decide to proceed, please read the “Instructions for
Signing a Guarantee” which are below.
Important:
• Prior to signing the document(s) you should satisfy yourself
that you understand the full nature of your liabilities to the
Lender and obtain appropriate advice, legal or otherwise,
if you are at all uncertain of your position.
• Where documents are to be witnessed, the witness must
be an independent adult who is not a borrower, a director
of the debtor company, a guarantor, a mortgagor, or a
relative of one of those persons.
• Use blue or black pen when signing documents, do not
use felt tip pens, pencil, red pen or liquid paper at any time.
• Any amendments made to a document must be initialled
by all parties to that document.
• Sign all documents where indicated.
• Return documents to the Lender immediately after
signing by all appropriate parties, to enable their
stamping / registration to be completed within the
statutory time period.
WARNING
Prior to signing any documents it is strongly recommended
that you obtain both legal advice and financial advice.
If you do provide a guarantee and the borrowers do not
meet their obligations, the Lender can ask you to pay any
amount that is owing, up to the maximum amount of your
liability. If you provide security to support the guarantee
(e.g. by a mortgage over your house), the Lender can sell
that security. If the sale proceeds are insufficient to clear
the debt and a shortfall remains, you will still be liable for
the shortfall.
IF YOU STILL WISH TO GIVE THE GUARANTEE
When and where you sign the documents depends on
whether or not you wish to seek legal advice.
If you wish to seek legal advice, and we strongly recommend
that you do, you sign the guarantee and any other documents
in front of the solicitor who gives you the advice. Please
ask your solicitor to sign the documents as witness to your
signature.
If you do not wish to seek legal advice and you have decided
to give the guarantee, you can sign the guarantee in front
of an independent witness. (For example, if you get financial
advice, you could ask your financial adviser to witness your
signature.) The witness must be over the age of eighteen
and must not be the debtor, a director of the debtor company,
a co-guarantor, or a relative of one of those persons. The
witness should sign the guarantee as witness and print their
name underneath their signature.
The debtor must not be present when the guarantee is signed.
INSTRUCTIONS FOR SIGNING A GUARANTEE
As a first step you should read the information statement
“What it Means to be a Guarantor” which is set out behind
the Guarantee Terms (Individual Guarantor) in Schedule 4.
It explains your rights and obligations in plain English. If you
are not fluent in English, have it translated and be sure you
understand what it tells you.
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Willmott Forests – Premium Forestry Blend Project 2009 PDS
SCHEDULE 4 – GUARANTEE TERMS (INDIVIDUAL
GUARANTOR)
5.2
You must pay us, when we ask, our reasonable
expenses of enforcing this guarantee.
The meaning of some key words is explained in clause 21.
Your own costs and other expenses
What you undertake in giving this guarantee
6.
Guarantee
1.1
You guarantee that the BORROWER will pay us the
GUARANTEED MONEY. Your guarantee continues
until all these amounts have been paid.
1.2
Until you have paid us the MAXIMUM AMOUNT each
time we ask, you must pay us any amount which the
BORROWER does not pay us when it is due under the
GUARANTEED AGREEMENT. In some circumstances
we need not ask the BORROWER first to pay us.
You may payout
7.1
You indemnify us against, and must therefore pay us,
when we ask, for loss we suffer because:
(b) the MAXIMUM AMOUNT,
and your liability under this guarantee then ends.
7.2
2.2
The indemnity in clause 2.1 terminates when you
have paid us the MAXIMUM AMOUNT. Until that time
the indemnity is a continuing obligation, separate and
independent from your other obligations under this
guarantee, but subject to the same limitations on your
liability as are provided for elsewhere in this guarantee,
for example in clauses 3 and 7.
8.
We cannot ask you to pay more than the MAXIMUM
AMOUNT.
Joint and separate liability
4.
You undertake liability for all the obligations under this
guarantee separately on your own and jointly with any
one or more other PERSONS named in this guarantee
as “Guarantor”.
Additional amounts you must pay
5.1
You must pay us from the date of our demand until
the date of payment such of the following as the
BORROWER does not pay us when it is due under
the GUARANTEED AGREEMENT:
(a) interest (at the rate then payable by the BORROWER
in respect of amounts OWING under the
GUARANTEED AGREEMENT and calculated in
the manner provided in that agreement) on any
amount we demand from you under this guarantee;
(b) interest on that interest (by way of compound
interest) at the rate referred to and calculated
in the manner provided in (a).
You may at any time further limit your liability under
the Guarantee by written notice to us. We do not have
to accept any such limitation if the proposed limit is
below the liability of the BORROWER to us under the
GUARANTEED AGREEMENT.
Changes to rights
Reinstatement of rights
9.1
Under law, a trustee in bankruptcy or liquidator
may ask us to refund a payment we have received
in relation to the GUARANTEED AGREEMENT or this
guarantee. To the extent that we are obliged to, or
we agree to, make a refund, we may treat the original
payment as if it had not been made. We are then
entitled to our rights against you under this guarantee
as if the payment had never been made.
9.2
For so long as a trustee in bankruptcy or a liquidator is
entitled to ask us to refund money that the BORROWER
has paid us under the GUARANTEED AGREEMENT,
we may refuse to sign a discharge of any SECURITY
you have given us to support this guarantee.
Extent of your liability
3.
Within seven days of your written request, we will
give you a written statement of the amount required
to pay out the GUARANTEED AGREEMENT.
Limitation of guarantee
(a) the BORROWER does not pay us in accordance
with a GUARANTEED AGREEMENT; and
(b) a GUARANTEED AGREEMENT is unenforceable
solely because of the BORROWER’S death,
INSOLVENCY or incapacity, or any other act
or omission by or circumstances affecting the
BORROWER.
At any time you can pay us whichever amount is the
lesser of:
(a) the GUARANTEED MONEY; and
Indemnity
2.1
You must pay for anything which you must do under
this guarantee.
Our rights are protected
10.1 Our rights and your liabilities under this guarantee are
not affected by any act or failure to act by us or by
anything else that might otherwise affect our rights or
your liabilities under law relating to guarantees, including:
(a) the fact that we vary the GUARANTEED AGREEMENT;
(b) the fact that we give the BORROWER a concession,
for example, more time to pay;
(c) the fact that we release, lose the benefit of or do
not obtain any SECURITY or other guarantee;
(d) the fact that we do not register any SECURITY
which could be registered;
Willmott Forests – Premium Forestry Blend Project 2009 PDS
125
CBA Loan Agreement
continued
(e) the fact that we release any PERSON who
guarantees the BORROWER’S obligations under
the GUARANTEED AGREEMENT;
(f) the fact that the obligations of any PERSON who
guarantees the BORROWER’S obligations under
the GUARANTEED AGREEMENT may not be
enforceable;
(g) the fact that any PERSON who was intended to
guarantee (either in this guarantee or under another
guarantee) the BORROWER’S obligations under
the GUARANTEED AGREEMENT does not do
so or does not do so effectively; or
(h) the death, mental or physical disability or
INSOLVENCY of any PERSON including you
or the BORROWER.
10.2 We are not obliged to take any other or further guarantee
or SECURITY for the obligations of the BORROWER
under the GUARANTEED AGREEMENT.
10.3 Our rights and remedies under this guarantee are
independent of those we have under another guarantee
or SECURITY and those that the law says we have,
and we can still exercise them even if we obtain a
court order or judgment against you.
Your rights are suspended
11.
As long as an amount OWING under the GUARANTEED
AGREEMENT remains unpaid, you may not, without
our consent:
(a) reduce your liability under this guarantee by
claiming that you or the BORROWER or any other
PERSON has a right of set-off or counterclaim
against us;
(b) claim to be entitled to the benefit of another
guarantee or other SECURITY given in connection
with an amount OWING under the GUARANTEED
AGREEMENT or an amount OWING under this
guarantee. For example, you may not try to enforce
any SECURITY we have taken to ensure repayment
of amounts OWING under the GUARANTEED
AGREEMENT;
General
When must you pay?
13.
You must pay any amount we ask you to pay us under
this guarantee on the date we specify.
How we may exercise our rights
14.1 We may exercise a right or remedy or give or refuse our
consent in any way we consider appropriate including
by imposing conditions.
14.2 If we do not exercise a right or remedy fully or at a
given time, we can still exercise it later.
14.3 We are not liable for any loss caused by the exercise
or attempted exercise of, failure to exercise, or delay
in exercising, a right or remedy except where the loss
is caused by our proven negligence.
14.4 Our rights and remedies under this guarantee:
(a) are in addition to any other rights and remedies
provided by law independently of this guarantee,
or by any other SECURITY; and
(b) may be exercised by any of our AUTHORISED
OFFICERS.
How we may use money we receive
15.1 We may use any money we receive under this
guarantee towards meeting any part we choose
of the amounts the BORROWER has agreed to
pay us under the GUARANTEED AGREEMENT.
15.2 We may use any money we receive from the
BORROWER, which the BORROWER does not direct
us to apply to a particular debt, to any debt owed by
the BORROWER whether or not the debt is owed
under the GUARANTEED AGREEMENT.
15.3 If we ask you for an amount under clause 1.2:
(c) claim an amount from another guarantor of the
BORROWER’S obligations under a right of
contribution; or
(a) any money you pay us reduces your liability to pay
us that amount;
(d) claim an amount in the INSOLVENCY of another
guarantor of the BORROWER’S obligations under
the GUARANTEED AGREEMENT, including a
PERSON who has signed this guarantee with you.
(b) we need not credit the amount to the BORROWER’S
account until we receive sufficient money from any
PERSON or PERSONS (including you) to discharge
the BORROWER’S debt to us in full; and
Information and declaration
12.1 Whilst we provide you with information concerning the
BORROWER and the GUARANTEED AGREEMENT,
we strongly encourage you to also make your own
enquiries of the BORROWER, in order to satisfy any
queries you may have.
126
12.2 You declare that you do not enter into this guarantee
as a trustee, unless you have told us otherwise. If you
do enter into this guarantee as a trustee of a trust, this
guarantee binds you personally and in your capacity as
trustee of the trust.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
(c) until we credit the money you pay us to the
BORROWER’S account, interest accrues on
that money at the same rate and with the
same frequency as interest is charged on the
BORROWER’S account. We may apply that
interest to the BORROWER’S debts at any time.
Dealing with rights under this guarantee
16.
We may assign or otherwise deal with our rights under
this guarantee in any way we consider appropriate.
Consents
17.
You must comply with all conditions in any consent
which we give in connection with this guarantee.
Statements of Account
18.
A written statement made up from our books and
signed by one of our AUTHORISED OFFICERS about
an amount OWING under this guarantee is sufficient
evidence of the amount and of any other matter
referred to in the statement in connection with the
amount, unless it is contested in any proceedings
between you and us.
Variation or waiver
19.
A provision of this guarantee, or right created under it,
may not be waived or varied except in writing signed
by the PERSON to be bound.
Notices and other communications
20.1 Notices, including certificates, consents and demands
given or made under this guarantee must be in writing.
20.2 They may be:
(a) given personally (if they are for us, to one of our
employees at the branch or office where you
arrange this guarantee or any other branch or
office we tell you);
BORROWER means the PERSON named in the Application
as “Borrower”. If there are more than one, BORROWER
means any combination of one or more of them and, for each
combination, means each of them separately and every two
or more of them jointly. BORROWER includes their executors,
administrators and assigns.
CONSUMER CREDIT LAW means the Consumer Credit
Code applicable in the State or Territory whose law governs
this guarantee.
CREDIT CONTRACT means each contract between us and
the BORROWER for the provision of credit to which no
CONSUMER CREDIT LAW applies. For example this may
include credit by way of term loan, overdraft, bill finance,
instalment finance, lease finance, hire purchase, receivables
financing (including factoring and invoice discounting) and
any continuing or revolving credit arrangement.
GUARANTEED AGREEMENT means the loan agreement
between the BORROWER and us to which this guarantee
is a schedule.
GUARANTEED MONEY means all amounts OWING by the
Borrower to us under or by reason of the GUARANTEED
AGREEMENT.
Including or for example, when introducing an example,
does not limit the meaning of the words to which the example
relates to that example or to examples of a similar kind.
MAXIMUM AMOUNT means the total of the amount of the
Funds, and our enforcement expenses under clause 5 of this
guarantee.
(b) left at the address last notified;
a PERSON is in INSOLVENCY if:
(c) sent by prepaid post to the address last notified;
(a) in the case of a natural PERSON – the PERSON is an
insolvent under administration within the meaning of the
Corporations Act; or
(d) sent by facsimile transmission to the fax number
last notified; or
(e) given in any other way permitted by law.
20.3 They take effect from the time they are received unless
a later time is stated in them.
(b) in the case of a corporation – the corporation is an
externally administered corporation within the meaning
of the Corporations Act.
20.4 If they are sent by post, they are taken to be received
on the date they would be received in the ordinary
course of post.
OWING in relation to an amount means an amount which
is currently owing or will or may be owing in the future.
20.5 If they are sent by a facsimile machine which produces
a transmission report, they are taken to be received at
the time shown in a transmission report which indicates
that the whole facsimile transmission was sent.
PERSON includes an individual, a firm, a body corporate,
an unincorporated association and an authority.
21.
Meaning of words
AUTHORISED OFFICER includes each of our officers within
the meaning given to that word in the Corporations Act,
for example each of our officers whose position title is or
includes the word “manager” or the word “executive”.
SECURITY means a mortgage, charge or other security for
the BORROWER’S obligations under the GUARANTEED
AGREEMENT or for your obligations under this guarantee.
“we” and “us” means Commonwealth Bank of Australia and
its successors and assigns.
“you” means the PERSON named in the Application as
“Guarantor”. If there are more than one, “you” means each
of them separately and every two or more of them jointly.
“You” includes your executors and administrators.
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127
CBA Loan Agreement
continued
A reference in this document to:
• the singular includes the plural and vice versa;
• a document includes any variation or replacement of it;
• law means common law, principles of equity and
laws made by parliament (and includes regulations and
other instruments under laws made by parliament and
consolidations, amendments, re-enactments or
replacements of any of them);
• any thing includes the whole and each part of it;
• this guarantee includes the indemnity in clause 2.
The Bank will not ask you to sign the guarantee, nor will
the Bank accept the guarantee, unless:
(g) all of the material required to be provided by the Bank
to you has been provided; and
(h) following the provision of such material, the Bank has
allowed you the period of one day to consider that
material.
GUARANTEES
1.
A promise by you that the BORROWER will keep
to all the terms and conditions of the GUARANTEED
AGREEMENT. If that person does not do so, you
promise to pay the Bank all the money OWING on the
contract (and any reasonable enforcement expenses)
as soon as the money is asked for, up to the MAXIMUM
AMOUNT. If you do not pay, then the Bank can take
enforcement action against you which may result in
the forced sale of any property owned by you such
as your house.
INFORMATION STATEMENT FOR INDIVIDUAL
GUARANTORS
WHAT IT MEANS TO BE A GUARANTOR
This is an important document. However, not all of the
information contained below applies if you are a company
or other incorporated body. In such case, you should
obtain separate advice on your rights and obligations.
Read it carefully – if necessary have it translated and
be sure you understand what it tells you.
You are being asked to provide the guarantee because
the BORROWER is unable to give the Bank a good
enough security for the GUARANTEED AGREEMENT.
Commonwealth Bank of Australia is the credit provider,
and in this statement is referred to as “the Bank”.
2.
In this statement, and in the guarantee, the person who
is obtaining credit under the GUARANTEED AGREEMENT
with the Bank is referred to as “the BORROWER”.
This statement tells you about some of the rights and
obligations of yourself and the Bank. It does not state
the terms and conditions of your guarantee.
How do I know how much the BORROWER is
borrowing and how the credit charges are worked out?
These details are on the copy of the GUARANTEED
AGREEMENT or proposed GUARANTEED AGREEMENT.
3.
What documents and information should I be given?
Before you sign the guarantee you should get copies of:
(a) the document you are reading now;
Prior to the execution of the guarantee, you must note the
following:
(b) the GUARANTEED AGREEMENT or proposed
GUARANTEED AGREEMENT;
(a) you should seek independent legal and financial advice
on the effect of this guarantee;
(c) any related CREDIT CONTRACT or security contract;
(b) you may refuse to provide this guarantee;
(c) there are financial risks in providing this guarantee;
(d) you are permitted to limit your liability under the
guarantee; and
(e) you may request information from the Bank regarding
the GUARANTEED AGREEMENT which is being
provided to the Borrower.
(f) We can change the GUARANTEED AGREEMENT
with the BORROWER without reference to you. This
may increase the amount secured by the guarantee.
However it will not increase the MAXIMUM AMOUNT
you are liable to pay us under the guarantee. That
MAXIMUM AMOUNT can only be increased if you
agree to the increase in writing.
128
What is a guarantee? Why am I being asked to
provide the guarantee?
Willmott Forests – Premium Forestry Blend Project 2009 PDS
(e) any related credit report from a credit reporting
agency;
(f) any financial accounts or statement of financial
position given to the Bank by the BORROWER for
the purposes of the GUARANTEED AGREEMENT
within the last two years;
(g) the latest statement of account provided to the
BORROWER under the GUARANTEED AGREEMENT;
(h) any notice of demand which the Bank has sent
to the BORROWER under the GUARANTEED
AGREEMENT within the last two years and with
which the BORROWER has not complied to
our satisfaction.
The Bank will also tell you:
5.
You can write to the Bank at any time and ask for
a statement of the amount required to pay out the
GUARANTEED AGREEMENT as at any date you
specify. You can also ask for details of the items
that make up the amount.
(i) whether any facility it has given the BORROWER
will be cancelled, or if the GUARANTEED
AGREEMENT will not be provided, if you
do not provide the guarantee.
The Bank will also give you any other information
we have (except our own internal opinions) about the
GUARANTEED AGREEMENT (including any facility to
be refinanced by the GUARANTEED AGREEMENT)
that you reasonably request.
How can I find out the payout figure?
The Bank must give you the statement within 7 days
after you give your request to the Bank. You may be
charged a fee for the statement.
6.
What other information can I get?
You can request the Bank to provide you with updated
copies of the information referred to in Question 3.
In addition to making inquiry of the Bank, you
should also ask the BORROWER for information about
the loan. Because you know the BORROWER and
because, by giving the guarantee you are doing the
BORROWER a favour, you should ask the BORROWER:
The Bank must give you the requested copies:• within 14 days of your written request if the original
came into existence 1 year or less before the request
was given to the Bank; or
• about their business affairs generally;
• to tell you everything about the loan you have
guaranteed; and
• otherwise within 30 days.
The Bank may charge you a fee.
• whether the loan account is in order.
If the BORROWER refuses to tell you what you want to
know, you should think seriously about whether or not
to give the guarantee.
7.
After you give a guarantee, you should ask the
BORROWER for this kind of information at regular
intervals until the guarantee is at an end.
Otherwise, your guarantee continues until the
guaranteed moneys are repaid to the Bank in full
8.
4.
Can I withdraw from my guarantee?
You can, by written notice to the Bank withdraw from
your guarantee at any time before the credit is first
provided under the GUARANTEED AGREEMENT.
Can I get a statement of the amount that the
BORROWER owes?
Can I limit my guarantee?
You may, by written notice to the Bank, limit the
amount or nature of the liabilities guaranteed under
the guarantee, except that the Bank does not have
to accept such a limit if:-
Yes. You can ask the Bank at any time for a statement
of the amount the BORROWER currently owes or any
amounts credited or debited during a period you specify
or any amounts which are overdue and when they
became overdue or any amount payable and the
date it became due.
(a) it is below the BORROWER’S liability under the
GUARANTEED AGREEMENT at the time plus any
interest or fees and charges which may subsequently
be incurred in respect of that liability; or
The Bank must give you the requested information:
(b) the Bank is obliged to make further advances or
would be unable to secure the present value of an
asset which is security for the loan (for example, a
house under construction).
• within 14 days if all the information requested related
to a period 1 year or less before your request is
given; or
• otherwise within 30 days.
This statement must be given to you in writing if you
ask for it in writing but otherwise may be given orally.
You may be charged a fee for the statement.
You are not entitled to more than one written statement
every 3 months.
9.
Can my guarantee also apply to any future contracts?
No. However, we can change the GUARANTEED
AGREEMENT with the BORROWER without reference
to you. This may increase the amount secured by the
guarantee. However it will not increase the MAXIMUM
AMOUNT you are liable to pay us under the guarantee.
That MAXIMUM AMOUNT can only be increased if you
agree to the increase in writing.
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CBA Loan Agreement
10.
continued
What are some of the more important things that
are in the guarantee?
13.
The law says you cannot assign or dispose of the
property unless you have the Bank’s, or the court’s,
permission. You must also look after the property.
Read the mortgage document as well. It will usually
have other terms and conditions about what you can
or cannot do with the property.
The guaranteed debt increases by the accumulation
of amounts of interest on the unpaid balances in the
BORROWER’S account.
Unpaid interest compounds, so that interest is charged
on unpaid interest, as well as on unpaid principal.
Even if you do not give the Bank a mortgage over your
home or some other security to support the guarantee,
the Bank may sue you on your undertakings in the
guarantee. You may then be forced to sell any of your
assets (including your home) to pay the judgment debt.
If you join with other persons in giving the guarantee
(these other persons are called co-guarantors), you are
liable for all the obligations under the guarantee both
separately on your own and jointly with any one or
more of the co-guarantors. If you make a payment
under the guarantee, you should get legal advice about
your rights of contribution from the co-guarantors.
14.
Yes, if you have not carried out all your obligations
under your guarantee.
If the Bank holds more than one security for the moneys
the BORROWER owes, the Bank can choose to
enforce those securities in any order it pleases. The
Bank does not have to enforce some other security
before it enforces your guarantee or your mortgage.
15.
What if I do not have the money to pay the Bank?
If the Bank releases a co-guarantor or any mortgagor
or makes any compromise or arrangement with the
BORROWER, your liability and the liability of any
co-guarantor under the guarantee for the whole
of the debt is not affected by the release, compromise
or arrangement.
You have no right to any moneys from the estate
of a deceased or bankrupt BORROWER until all the
guaranteed moneys are paid to the Bank.
This could mean that you lose everything you own,
including your home.
16
• the Bank has judgment against the BORROWER
and if the judgment amount has still not been met
30 days after the Bank has asked the BORROWER
in writing to pay it; or
• the court says so because recovery from the
BORROWER is unlikely; or
• the Bank has been unable to locate the BORROWER
after making reasonable efforts to do so; or
If my guarantee says I have to give a mortgage,
what does this mean?
• the BORROWER is insolvent.
A mortgage means that you give the Bank certain
rights over any property you mortgage. If you default
under your guarantee, you can lose that property and
you might still owe money to the Bank.
These restrictions do not apply if the BORROWER is
a Small Business. “Small Business” means a business
having less than 100 full time (or equivalent) people if
the business is or includes the manufacture of goods;
otherwise, less than 20 full time (or equivalent) people.
Should I get a copy of my mortgage?
Yes. You will be given a copy of the mortgage as
provided in Question 3.
When can the Bank enforce a judgment against me?
When:-
If it receives a payment from an insolvent BORROWER
or co-guarantor, the Bank may have to refund the
payment to a trustee in bankruptcy. In that case the
Bank can reinstate your guarantee as if it had never
received the payment.
12.
Can the Bank take or sell the mortgaged property?
If the Bank holds a mortgage from you to support your
guarantee, the Bank can sell your mortgaged property
to pay the debt. If the Bank does not hold a mortgage
from you, or if any security you have given the Bank is
insufficient to pay the debt, the Bank can take you to
court and ask the court for a judgment against you for
the debt you owe it under the guarantee.
Under the guarantee, the Bank can recover moneys
from you even though the law (for example, the law
of bankruptcy) does not allow it to recover them from
the BORROWER.
11.
Is there anything that I am not allowed to do with the
property I have mortgaged?
17.
Can the Bank take action against me without first
taking action against the BORROWER?
Yes, but the Bank will not be able to enforce any
judgment against you except in the circumstances
described in the answer to Question 16.
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GENERAL
18.
What can I do if I am asked to pay out the
GUARANTEED AGREEMENT and I cannot
pay it all at once?
Talk to the Bank and see if some arrangement can be
made about paying.
IF YOU HAVE ANY DOUBTS, OR YOU WANT MORE
INFORMATION, CONTACT YOUR FINANCIAL ADVISER
OR GET LEGAL ADVICE.
PLEASE KEEP THIS INFORMATION STATEMENT. YOU MAY
WANT SOME INFORMATION FROM IT AT A LATER DATE.
If you cannot come to a suitable arrangement, the
Bank has dispute resolution procedures, information
on which is set out at Question 23.
19.
If I pay out money for a BORROWER, is there any
way I can get it back?
You can sue the BORROWER, but remember, if the
BORROWER cannot pay the Bank, he or she probably
cannot pay you back for a while, if at all.
20.
What happens if I go guarantor for someone who
is under 18 when he or she signs a GUARANTEED
AGREEMENT?
You are responsible for the full debt if the contract
of guarantee has a clear and obvious warning. The
warning has to tell you that the courts might not let
you sue the BORROWER if you have to pay out the
GUARANTEED AGREEMENT for him or her.
21.
Do I have any other rights and obligations?
Yes. The law does give you other rights and obligations.
You should also READ YOUR GUARANTEE carefully.
22.
What happens if I have a dispute with the Bank?
The Bank has dispute resolution procedures available.
Further information can be obtained by:(a) visiting the Bank’s web site,
www.commbank.com.au; or
(b) visiting one of our branches; or
(c) telephoning 132221 between 8am to 8pm
Monday to Friday.
23.
What if I am still not sure what to do?
If you are still not sure about the obligations you
take on if you give the Bank a guarantee, you should
discuss the matter with your solicitor.
If you think you need financial advice (either on account
of the BORROWER’S debt obligations or your own, or
both), you should speak with your own financial adviser.
You should not have the BORROWER with you when
you speak with the solicitor or the financial adviser.
You may think you do not need any independent advice.
You may consider you are experienced in business
matters and know and understand the terms and
meaning of bank guarantees and security documents.
Even if this is the case, you must be able to give the
guarantee or mortgage freely and voluntarily, without
pressure from any other person.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
131
CBA Loan Agreement
continued
(iv) all charges, costs and expenses (if any) which
the Lender incurs, sustains or pays in recovering
or attempting to recover from the Guarantor the
moneys at (i), (ii) and (iii) above plus interest on
those charges, costs and expenses at the rate
or rates referred to above.
SCHEDULE 5 – GUARANTEE TERMS (CORPORATE
GUARANTOR)
For the purpose of securing to the Lender the payment of the
Guaranteed Moneys, the Guarantor gives this Guarantee to
the Lender on the following terms:
1.
DEFINITIONS AND INTERPRETATION
1.1
Definitions
1.2
In this Guarantee -
In this Guarantee, unless the context otherwise
requires:
(a) clause headings are for ease of reference only
and do not affect interpretation or construction;
(a) “Authorised Officer of the Lender” includes each
of the Lender’s officers within the meaning given
to that word in the Corporations Act, for example
each officer of the Lender whose position title
includes the word “manager” or the word
“executive”;
(b) unless the context otherwise requires:
(i) the word “person” includes a corporation;
(ii) words importing the singular number include
the plural and vice versa;
(iii) words importing any gender include every
other gender;
(b) “Borrower” means:
(i) the Borrower and its successors or executors
and administrators; and
(iv) when two or more Guarantors or Borrowers
are parties to this Guarantee, their respective
covenants and agreements, whether express
or implied, bind them and every two or more
of them jointly and each of them severally.
(ii) if two or more Borrowers are parties to this
Guarantee, means any one or more of them,
or any of their successors or executors and
administrators;
(c) “Business Day” means a day on which trading
banks are open for the transaction of general
banking business;
(d) “Guaranteed Agreement” means the loan agreement
between the Borrower and the Lender to which this
guarantee is a schedule;
(e) “Guaranteed Moneys” has the meaning given
to that expression in clause 2;
(f) “Guarantor” means:
(i) the Guarantor and its successors or executors
and administrators; and
(ii) if two or more Guarantors are parties to this
Guarantee, means any one or more of them,
or any of their successors or executors and
administrators;
(g) “Lender” means the Lender and its assigns;
(h) “Maximum Amount” means the aggregate of:
(i) the amount of the Funds, plus
(ii) interest on each amount demanded from the
Guarantor, at the rate or the highest of the rates
charged or chargeable to the Borrower from
time to time after the date of demand, from
that date until payment, plus
(iii) interest on that interest by way of compound
interest, calculated after the date of demand
at such time or times or from time to time as
the Lender thinks fit, at the rate or rates referred
to at (b) above, plus
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Interpretation
2.
GUARANTEED MONEYS
The expression Guaranteed Moneys means all
amounts owing by the Borrower to the Lender under
or by reason of the Guaranteed Agreement including:
(a) amounts in respect of an obligation or liability which:
(i) is present, prospective or contingent;
(ii) is liquidated or unliquidated;
(iii) sounds in damages only,
and irrespective of:
(iv) whether the Borrower is liable or obligated
solely, jointly or jointly and severally with another
person;
(v) the circumstances in which the Lender comes
to be owed each liability or obligation; or
(vi) the capacity in which the Borrower or the
Lender comes to owe or to be owed that liability
or obligation;
(b) interest on all the moneys referred to in paragraph
(a) of this clause, or on so much of those moneys
as for the time being are due or remain unpaid,
calculated and charged as follows:
(i) at the rate or rates agreed in writing (if any);
(ii) if no rate has been agreed in writing, then
without prior or other notice to the Borrower
or the Guarantor, at the prevalent rate charged
or chargeable by the Lender for the time being
or from time to time to its other customers on
similar accounts;
(iii) such interest is taken to accrue from day to day
and to be calculated from the time or respective
times the moneys referred to in paragraph (a)
of this clause were lent, provided, paid or
disbursed or became due;
3.4
(a) the payment at any time by the Borrower of any
of the Guaranteed Moneys;
(c) interest on any interest referred to in paragraph
(b) of this clause 2 by way of compound interest,
calculated at such time or times and from time to
time as the Lender thinks fit at the rate or respective
rates agreed (if any) or, if not, then at the rate for
the time being or from time to time charged as set
out in paragraph (b) above, subject to the following:
(b) the payment at any time by the Guarantor of any
of the Guaranteed Moneys, except where the
aggregate of all amounts paid by the Guarantor
equals or exceeds the Maximum Amount;
(c) any settlement of account between the Lender
and the Borrower or between the Guarantor and
the Borrower;
(i) the fact that the Lender charges interest on
unpaid interest or includes interest with principal
in any balance carried forward or account stated
or otherwise, does not mean that the unpaid
interest has been capitalised or added to the
principal; but
(d) the death or notice of the death of any person who
is a Guarantor;
(e) if the Guarantor is a corporation, by the winding up
or de-registration of the Guarantor, or by the receipt
of notice of any order, decree or resolution for the
winding up of the Guarantor; or
(ii) the Lender may, without notice to the Borrower
or Guarantor and by express entry to that effect
in its books, at any time and at such intervals as
the Lender thinks fit, capitalise and add to the
principal all or any interest on which interest has
become payable; and
(iii) any accumulations by way of compound
interest or addition to principal may be continued
and made notwithstanding that, as between
the Lender and the Borrower, the relationship
of banker and customer has ceased, and
notwithstanding the death, bankruptcy or
winding-up of the Borrower or any other
matter or thing, until all moneys secured by
this Guarantee have been paid and satisfied,
(f) if the Borrower is a corporation, by the winding up
or de-registration of the Borrower, or by the receipt
of notice of any order, decree or resolution for the
winding up of the Borrower; or
(g) any other matter or thing,
and will be enforceable notwithstanding that any
negotiable or other instrument, security or contract
may be still in circulation or outstanding.
3.5
THE NATURE OF THE GUARANTOR’S UNDERTAKING
3.1
The Guarantor guarantees that the Borrower will pay
the Guaranteed Moneys to the Lender.
3.2
Except where the Guaranteed Moneys are payable
without prior demand under clause 7, the Guarantor
will pay the Guaranteed Moneys to the Lender on
demand, or so much of the Guaranteed Moneys as
the Lender specifies in its demand. However, the
Lender will not make demand on the Guarantor (a) in the case of moneys which are payable by the
Borrower on demand, before making demand on
the Borrower; and
(b) in all other cases, before the Borrower has failed
to pay, when due to be paid, the moneys specified
in the demand.
3.3
Subject to sub-clause 3.2, the Lender may make
demand on the Guarantor at any time and from time
to time. The Lender’s demand may include the interest
accruing on the amount demanded from the date of
the demand until payment, at the rate or rates referred
to in paragraphs (b) and (c) of clause 2.
You indemnify us against, and must therefore pay us,
when we ask, for loss we suffer because:
(a) the Borrower does not pay us in accordance with
a Guaranteed Agreement; and
(b) a Guaranteed Agreement is unenforceable solely
because of the Borrower’s death, insolvency or
incapacity, or any other act or omission by or
circumstances affecting the Borrower.
and it is agreed that all such moneys, liabilities
and amounts are intended to be secured by this
Guarantee.
3.
Subject to clause 4, this Guarantee is a continuing
guarantee and will not be considered as wholly or
partially discharged by:
3.6
The indemnity in clause 3.5 terminates when you
have paid us the Maximum Amount. Until that time
the indemnity is a continuing obligation, separate and
independent from your other obligations under this
Guarantee.
4.
DISCONTINUANCE OF FURTHER LIABILITY BY
GUARANTOR
If the Guarantor gives written notice to the Lender,
at the branch of the Lender where the account of
the Borrower is kept, of the desire of the Guarantor
to discontinue any further liability under this Guarantee,
then the liability of that Guarantor under this Guarantee
will cease in relation to any liability which is incurred
after the Lender’s receipt of that notice except for
any future liability arising out of any advance, letter
of credit, bill, promissory note, cheque, draft, order or
other engagement or transaction at that time current or
outstanding.
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133
CBA Loan Agreement
continued
(c) any floating charge over any moneys owing or
payable or to become owing or payable by the
Lender to the Guarantor or the Borrower becomes
a fixed charge.
Despite the discontinuance by one or more Guarantors:
(a) this Guarantee remains a continuing guarantee
binding any other Guarantor; and
(b) the Lender, on receipt of any notice of
discontinuance, and without notice to the
Borrower, may immediately discontinue
the provision of any further advances or
accommodation to the Borrower.
5.
COSTS, CHARGES AND EXPENSES
5.1
The Lender may, from time to time, without the need
for any further authority than this Guarantee, debit
and charge any account of the Borrower with:
(a) all costs, charges and expenses, legal or otherwise
(including solicitor and client as well as party and
party costs and other moneys paid or payable
by the Lender), which the Lender pays, incurs,
sustains or is put to in connection with:
7.2
Set-off
If any of the events listed in clause 7.1 occurs, without
any demand or notice the Lender may:
(a) withhold payment of any moneys (including interest)
standing to the credit of the Borrower or of the
Guarantor, on any account; and
(b) prepay, if necessary, and apply those moneys in
or towards payment of the Guaranteed Moneys.
The amount in an account of the Guarantor that the
Lender withholds and applies under this clause 7.2
will not exceed the Maximum Amount.
8.
LIABILITIES MERGED
If the liability of the Guarantor under this Guarantee
becomes merged in any judgment or order:
(i) any account of the Borrower;
(ii) this Guarantee;
(a) The Guarantor must pay interest on the amount for
the time being owing under the judgment or order.
(iii) the preparation or completion or release of this
Guarantee; or
(b) The interest referred to in paragraph (a) will be -
(iv) the exercise or attempted exercise of any right,
power, authority, discretion or remedy conferred
on the Lender under or by virtue of this
Guarantee or by statute, plus
(i) at the rate charged or chargeable by the Lender
in respect of the Guaranteed Moneys immediately
prior to the entry of the judgment or the making
of the order; or
(b) interest on those moneys at the rate or, if more
than one, the highest of the rates referred to in
clause 2(b).
5.2
6.
(ii) at the option of the Lender, at such other rate
as for the time being or from time to time is
charged or chargeable by the Lender in respect
of the Guaranteed Moneys.
All the moneys referred to in clause 5.1 are covered by
this Guarantee and form part of the Guaranteed
Moneys.
9.
LENDER’S RIGHT TO VARY ADVANCES AND
ACCOMMODATION
OTHER SECURITIES
9.1
During the continuance of this Guarantee and subject
to clause 9.2, the Lender may from time to time vary
the limit or amount of advances and accommodation
to the Borrower or to any other person.
9.2
Any exercise by the Lender of its rights under clause
9.1 does not increase the Maximum Amount.
10.
Every security (other than a security referred to in
clause 20) already executed, or which at any time in
the future may be executed by the Guarantor in favour
of the Lender, will be and remain a continuing security
for the payment by the Guarantor of the Guaranteed
Moneys.
7.
ACCELERATION AND COMBINATION OF ACCOUNTS
GUARANTEE NOT AFFECTED BY CHANGES IN
BORROWER
7.1
Acceleration
If:
At the option of the Lender and despite any delay or
previous waiver of the right to exercise the option, the
Guaranteed Moneys will become immediately payable
without any demand or notice if:
(a) the Borrower is a partnership, firm, committee,
trustee or unincorporated body; or
(a) without the consent in writing of the Lender, the
Guarantor or the Borrower charges or assigns, or
purports to charge or assign, any moneys owing
or payable or to become owing or payable by the
Lender to the Guarantor or the Borrower;
(b) any execution or other process of any court or
authority, or any distress, is issued against or levied
on any of the moneys referred to in paragraph (a);
(b) any of the Guaranteed Moneys are advanced or
are owing or payable on a joint account,
this Guarantee remains effective and continues to bind
the Guarantor, notwithstanding:
(c) any change by death, retirement, accession,
addition, amalgamation, incorporation or otherwise
in the partnership, firm, committee, trustee, body
or persons now or in the future constituting the
Borrower; or
(d) any change in the name or style of the Borrower,
134
Willmott Forests – Premium Forestry Blend Project 2009 PDS
as if the person or persons or unincorporated body
constituting the partnership, firm, committee, trustee,
body or Borrowers on joint account at any date on
which the Guaranteed Moneys become payable by
the Guarantor, or at any earlier time, was or were
the same as at the date of this Guarantee.
11.
GUARANTOR AS PRINCIPAL
without discharging or affecting the liability of the
Guarantor under this Guarantee.
15.
15.1 Until the Lender has received all of the Guaranteed
Moneys in full, the Guarantor is not entitled on any
grounds to:
(a) claim the benefit of any security now or in the future
held by the Lender for the payment of the Guaranteed
Moneys;
As a separate and independent obligation, the
Guarantor agrees that any of the Guaranteed Moneys
which are not recoverable from the Guarantor on the
basis of a guarantee, because of:
(b) either directly or indirectly claim or receive the
benefit of any dividend or payment -
(a) any legal limitation, disability or incapacity on or
of the Borrower or the Guarantor; or
(i) out of the estate of the Borrower;
(ii) if the Borrower is a corporation, in the winding
up of the Borrower;
(b) any other fact, or circumstance,
in any case whether known to the Lender or not, are
nevertheless recoverable from the Guarantor as the
sole or principal Borrower, and will be paid by the
Guarantor as if any covenant or agreement by the
Borrower to pay the Guaranteed Moneys or any part
of them had been a covenant or agreement of the
Guarantor.
12.
(iii) out of the estate or in the winding up of any
person (in this clause called “any other person”)
who may be jointly indebted with the Borrower
to the Lender or who may be liable under any
security, negotiable or otherwise, now or in the
future held by the Lender as security for any of
the Guaranteed Moneys; or
INDEPENDENCE OF GUARANTEE
(c) if the Borrower or any other person -
This Guarantee is in addition to, and independent of,
and will not affect or be affected by:
(i) becomes bankrupt;
(ii) assigns their estate for the benefit of
creditors, or makes a deed of arrangement
or a composition in satisfaction of their debts
or a scheme of arrangement of their affairs;
(a) any other or further guarantee or security now
or in the future held or taken by the Lender;
(b) any arrangement or transaction between the
Lender and the Borrower or any other person;
(iii) dies; or
(c) any loss, release, discharge, abandonment or
transfer, either in whole or in part, and either with
or without consideration, of any other guarantee
or security now or in the future held by the Lender
from the Borrower or from any other person;
(iv) if the Borrower or any other person is a
corporation, is in the course of being wound up,
prove or claim in the estate or (if the Borrower or any
other person is a corporation) in the winding up of
the Borrower or any other person, in competition with
the Lender so as to diminish any dividend or payment
which, but for such proof, the Lender would be entitled
to receive out of that estate or in that winding up.
(d) any act, forbearance or omission by the Lender; or
(e) any other act, matter or thing.
13.
NO OBLIGATION TO HOLD OR RESORT TO OTHER
SECURITY
The Lender has no obligation to:
(a) hold or take any other or further guarantee or
security for the payment of the Guaranteed
Moneys; or to
(b) resort to any other guarantee or security it may
hold for payment of the Guaranteed Moneys in
priority to this or any other guarantee or security.
14.
GRANT OF TIME OR INDULGENCE
The Lender may, at any time and from time to time:
(a) grant to the Borrower or to any other person any
time or other indulgence or consideration;
(b) compound with or release the Borrower or any
other person;
(c) assent to any assignment to trustees for the
benefit of creditors or to any scheme or deed of
arrangement, either with or without sequestration
of the estate, or if the Borrower is a corporation,
the winding up of the Borrower,
POSTPONEMENT OF GUARANTOR’S RIGHTS
15.2 The receipt of any dividend or other payment which the
Lender may receive out of the estate or in the winding
up referred to in clause 15.1, will not prejudice or affect
the right of the Lender to recover the Guaranteed
Moneys from the Guarantor.
16.
PROTECTION AND RESTORATION OF LENDER’S
RIGHTS
16.1 The Lender’s right to recover from the Guarantor under
this Guarantee is not prejudiced or affected by (a) any assurance, security or payment which may be
avoided under any law for the time being in force
relating to bankruptcy, or to the winding up or
external administration of companies; or
(b) any release, settlement or discharge which may
have been given or made on the faith of any such
assurance, security or payment.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
135
CBA Loan Agreement
continued
16.2 If any such assurance, security or payment is avoided,
the Lender, the Guarantor and the Borrower will be
restored to the rights which each respectively would
have had if:
(a) the assurance, security or payment had not been
given or made; and
(b) the release, settlement or discharge had not been
given or made on the faith of that assurance,
security or payment.
16.3 The Lender may in its discretion refuse to release the
Guarantor from liability under this Guarantee for so long
as any such security, assurance or payment remains
liable to be avoided.
17.
REMAINING GUARANTORS
17.1 If and to the extent that it is beyond the power of any
Guarantor to guarantee payment of all or any part of
the Guaranteed Moneys, then
(a) the liability of any remaining Guarantor under this
Guarantee will not be discharged, varied or affected
in any way; and
(b) this Guarantee will continue in full force and effect
so far as it relates to any remaining Guarantor.
17.2 The Lender may:
(a) release or discharge any Guarantor from the
obligations of this Guarantee;
(b) accept any composition from or make any other
arrangements with that Guarantor,
without prejudicing or affecting the Lender’s rights and
remedies against any remaining Guarantor.
18.
STATEMENT OF ACCOUNT
Unless it is contested in proceedings between the
Lender and the Guarantor, a written statement of the
amount of the Guaranteed Moneys due or owing at
any date which:
(a) states that it is made up from the books of the
Lender, and
(b) is signed by an Authorised Officer of the Lender,
is sufficient evidence of that amount and of all other
matters set out in the statement.
19.
NOTICES
19.1 Method of notice
Any notice or demand given to or made on the
Guarantor or the Borrower by the Lender will be taken
to be duly given or made if it is in writing signed by an
Authorised Officer of the Lender and
(a) delivered or sent to the relevant party at the
address or facsimile number stated in the
Application or at any other address or facsimile
number in Australia notified to the Lender in writing
from time to time; or
136
Willmott Forests – Premium Forestry Blend Project 2009 PDS
(b) delivered or sent to the usual place of abode or
business or registered office of the relevant party
last known to the person signing the notice or
demand; or
(c) in the case of a Guarantor resident or incorporated
in Australia, advertised in the Commonwealth of
Australia Gazette; or
(d) in the case of an individual, delivered personally.
19.2 Time of notice
Any such notice or demand will be taken to have been
given or made:
(a) in the case of personal delivery or delivery to an
address, place of abode, place of business or
registered office referred to in clause 19.1, at the
time of such delivery;
(b) in the case of posting in a prepaid envelope or
wrapper addressed to the relevant party at an
address, place of abode, place of business or
registered office referred to in clause 19.1, on the
third day after posting (or the seventh day after
posting in the case of international mail);
(c) in the case of facsimile transmission to a facsimile
number referred to in clause 19.1, on production by
the despatching facsimile machine of a transmission
control report showing the correct number of pages
was sent to the facsimile number of the recipient
and the result of the transmission as “OK” (or an
equivalent expression), unless the recipient notifies
the sender within 24 hours that the transmission
was not received in its entirety in a legible form; and
(d) if a demand or notice is taken to have been given
or made after 5.00 pm in the place to which the
demand or notice is addressed, or on a day which
is not a business day in that place, it will be
deemed to have been given or made at 9.00 am
on the next succeeding business day in that place.
19.3 Validity of notice
Any such method of service will in all respects be
valid and effectual notwithstanding, at the date of the
service:
(a) that the Guarantor and the Borrower or either of
them is (i) mentally incapacitated, dead, bankrupt or
insolvent;
(ii) absent from the place of domicile or usual
residence of the Guarantor or the Borrower; or
(iii) if the Guarantor or the Borrower is a corporation,
is in the course of liquidation or wound up; or
(b) any other fact, matter or circumstance.
20.
REGULATED CONTRACTS
20.1 Despite any other provision of this Guarantee,
nothing in this Guarantee will be construed as requiring
or purporting to require, or securing or purporting to
secure, the payment of any money or the performance
of any obligation under or in respect of:
(a) any regulated contract entered into with the
Lender either before, after or at the same time
as this Guarantee; or
(b) any regulated mortgage or other instrument
securing the payment of money or the performance
of any obligation under or in respect of that regulated
contract.
20.2 In this clause the terms “regulated contract” and
“regulated mortgage or other instrument” mean,
respectively, a contract and mortgage or other instrument
to which the uniform consumer credit legislation in
force at any time (for example, the Consumer Credit
Code 1994), applies.
21.
GUARANTOR AS TRUSTEE
Where the Guarantor enters into this Guarantee as
trustee of a trust, this Guarantee binds the Guarantor
personally and in the Guarantor’s capacity as trustee
of the trust.
22.
ASSIGNMENT BY LENDER
22.1 The Lender may assign its rights under this Guarantee
free from any equities, set-off or cross claim which, but
for this provision, the Guarantor would be entitled to
set up against the Lender.
22.2 The Lender is authorised to disclose to any assignee
or potential assignee (including any employee, agent
or independent contractor engaged by the assignee or
potential assignee) all such information in relation to the
Guarantor or the Borrower as the Lender reasonably
considers to be appropriate in the circumstances.
23.
AUSTRALIAN SECURITIES & INVESTMENTS
COMMISSION – CLASS ORDERS
23.1 For so long as any part of the Guaranteed Moneys
remains outstanding, whether actually or contingently,
to the Lender from the Borrower:
(a) The Guarantor must not, without the prior written
consent of the Lender, enter into any deed in
connection with the granting by the Australian
Securities & Investments Commission of an order
pursuant to the provisions of the Corporations Act
giving relief to a corporation’s directors from the
Act’s requirements as to accounts and reports.
(In this clause 23, such a deed is called a Deed
of Cross-Guarantee.)
(c) Where (i) the Lender has given its consent under paragraph
(a) above, or
(ii) the Guarantor entered into a Deed of CrossGuarantee before executing this Guarantee,
and that Deed of Cross-Guarantee has not been
revoked or released in respect of the Guarantor,
the Guarantor must not consent to the amendment,
termination, revocation, suspension or repudiation of,
or waive the Guarantor’s rights or entitlements arising
from the Deed of Cross-Guarantee, without the prior
written consent of the Lender.
(d) The Guarantor must notify the Lender immediately
upon becoming aware of any proposal that the
Guarantor consent to any of the acts referred to
in paragraph (c) above in respect of any Deed of
Cross-Guarantee.
23.2 The Lender may, in its absolute discretion, withhold
its consent under clause 23.1(a). If the Lender gives its
consent, it may impose such terms and conditions on
giving that consent as it thinks fit.
23.3 If the Guarantor:
(a) fails to notify the Lender as required by Clause 23.1;
(b) enters into a Deed of Cross-Guarantee, or gives
any consent or waiver referred to in paragraph (c)
of clause 23.1, without the Lender’s prior written
consent; or
(c) fails to comply with a term or condition of the
Lender’s consent,
the Lender may:
(d) enforce this Guarantee and any security given by
the Guarantor for the payment or repayment to
the Lender of the Guaranteed Moneys;
(e) by written notice to the Borrower, cancel any
obligation of the Lender to provide further
accommodation (including accommodation by
way of fresh drawings, the replacement or renewal
of existing drawings, or the acceptance, endorsement
or discounting of bills of exchange or other
engagements) to the Borrower; and
(f) by written notice to the Borrower, declare all or
any of the Guaranteed Moneys (other than moneys
already payable on demand, for example moneys
provided by way of overdraft) immediately due and
payable. The Guaranteed Moneys referred to in the
Lender’s notice will then be immediately due and
payable.
(b) The Guarantor must notify the Lender immediately
upon becoming aware of any proposal to request
or require the Guarantor to enter into a Deed of
Cross-Guarantee.
Willmott Forests – Premium Forestry Blend Project 2009 PDS
137
CBA Loan Agreement
continued
SCHEDULE 6 – GUARANTOR TRUSTEE
UNDERTAKINGS
Each Guarantor that is trustee of a trust hereby represents,
warrants and undertakes in respect of the trust, details of
which are set out in the Application, that:
(a)
(b)
(c)
(d)
The trust deed/s or other trust document/s set out
in the Application constitute all documents relevant
to the constitution of the trust and give the trustee
the necessary power/s and authority to enter into
the Transaction Documents and the transactions
contemplated by them and, where the trustee is a
company, the trustee company’s constitution does
not restrict the trustee company’s or its directors’
powers or authority in respect of the Transaction
Documents or the transactions contemplated by them.
There is either no conflict of interest and duty affecting
the trustee or its directors which prevent the trustee
from entering into the Transaction Documents or the
transactions contemplated by them, or the terms of
the documents referred to in (c) above enable the
trustee to enter into the Transaction Documents and
the transactions contemplated by them notwithstanding
any conflict of interest and duty that may affect the
trustee or any of its directors when entering into
the Transaction Documents and the transactions
contemplated by them.
The Guarantor enters into each Guarantee Document
on its own behalf and as trustee of the trust. The
Guarantor and its successors as trustee of the trust
will be liable under the Guarantee Documents as
trustee of the trust to the intent that all the assets both
future and present of the trust will be available to satisfy
the Guarantor’s liabilities. Nothing in this document
releases the Guarantor from any liability in its personal
capacity.
The trust is solely constituted by the trust deed, a true
copy of which was provided to the Lender or its agent
before the date of this document.
(f)
A date has not been declared under the trust deed as
the date on which the trust will be vested or come to
an end.
(g)
no proceedings of any description have been or are
likely to be commenced or threatened which could
have a material adverse effect on the assets or financial
position of the trust or the Guarantor’s trusteeship of
the trust;
(h)
it has not done, or failed to do, any act whereby any of
the assets of the trust have been acquired by any other
person, no assets of the trust are presently registered
in the name of any other person, and no person, other
than the beneficiaries previously notified to the Lender
has acquired any right of any kind whether vested or
contingent in any asset of the trust;
(i)
it is to the commercial benefit of the trust that it enters
into the Transaction Documents in its capacity, inter
alia, as trustee of the trust and charges the property
of the trust as provided in the Transaction Documents;
and
(j)
it, as trustee of the trust, has valid rights of indemnity
and exoneration against the assets of the trust, which
rights are available for satisfaction of all liabilities and
other obligations incurred by the Guarantor under the
Transaction Documents.
The Guarantor must not without the Lender’s prior
written consent permit any:
(a) resettlement, appointment or distribution of capital
of the trust;
(b) retirement or replacement of the trustee or any
appointment of a new trustee of the trust,
The Guarantor warrants that at the date of its execution
of this document that:
(c) amendment of the trust deed establishing the trust;
(i) it has power to enter into the Transaction
Documents in its capacity as trustee of the trust;
(d) breach of the provision of the deed establishing the
trust; or
(ii) it has taken every necessary action to authorise
entry into the Transaction Documents;
(e) termination of the trust or variation of the vesting
date, and if any of the above occur, the Guarantor
must promptly inform the Lender.
(iii) the trust has been validly created and is in
existence at the date of this document;
(iv) it has been validly appointed as trustee of the
trust and is presently the sole trustee of the trust;
138
(e)
Willmott Forests – Premium Forestry Blend Project 2009 PDS
SCHEDULE 7 – CONFIRMATION NOTICE
To:
Attention:
Facsimile Number:
Telephone Number:
From:
Manager Loan Administration
Commonwealth Bank
Phone: 1800 115 891
Fax: 1300 857 262
Date:
Subject:
Loan Agreement – Confirmation Notice
We refer to the loan agreement (Loan Agreement) dated
[*]between yourself,
(Borrower)
and Commonwealth Bank of Australia ACN 123 123 124 (Bank).
Terms used in this notice and defined in the Loan Agreement
have the meaning given to them in the Loan Agreement.
We confirm details of your loan as follows:
*[In respect of an Advance where you have selected a Fixed
Interest Rate:
• total Funds: [*]
• Fixed Interest Rate: [*]
• Repayments Dates: [*] (up to and including the Final
Repayment Date)
• Repayment Amounts: [* for each Repayment Date]]
*[In respect of an Advance where you have selected a
Variable Interest Rate:
• maturing Advance: [*]
• rollover Advance: [*]
• rollover date: [*]
• maturity date: [*]
• Rate: [*]
• Amount of interest payable on the maturity date: [*]
• Instructions: your account [insert details of the Direct Debit
Account] has been debited for [$] today.]
*[In respect of an Advance where you have requested an
early repayment:
• total Funds: [*]
• amount of interest/principal to be prepaid early: [*]
• revised repayment schedule (if applicable): [*]
• amount of any break fees, break costs or administration
fees to be charged by the Bank: [*]]
*[Delete whichever is not applicable]
Willmott Forests – Premium Forestry Blend Project 2009 PDS
139
Willmott Forests Limited
ABN 17 063 263 650
ARSN 131 549 589
249 Park Street (Locked Bag 4011)
South Melbourne, Victoria 3205
Telephone (03) 9696 1355
Facsimile (03) 9696 5567
Freecall 1800 801 866
www.willmottforests.com.au
enquiries@willmottforests.com.au
Australian Financial Services Licence
Licence No 233 215
Back cover
contact
Please visit our website for more
information details
www.willmottforests.com.au
Willmott Forests Premium Forestry Blend Project
2009 First Supplementary
Product Disclosure Statement
ARSN 131 549 589
Dated: 1 April, 2009
Disclaimer: Before making any investment decisions on the basis of this document, you should consider the content of
this document in light of your personal investment objectives, financial situation and individual needs. Willmott Forests
Limited ("WFL") is the issuer of the Product Disclosure Statement for the Willmott Forests Premium Forestry Blend
Project (ARSN 131 549 589) ("Project") and the First Supplementary Product Disclosure Statement for the Project
(together, "PDS"). An offer of interests in the Project is contained in the PDS, and any additional supplementary product
disclosure statement. A copy of the PDS can be obtained from WFL or from the website (www.willmottforests.com.au).
Interests in the Project may only be acquired by using the application form in or accompanying the PDS. Investors should
consider the PDS in deciding whether to invest in the Project.
Willmott Forests Premium Forestry Blend Project
2009 First Supplementary
Product Disclosure Statement
ARSN 131 549 589
Dated: 1 April, 2009
This document is a Supplementary Product Disclosure Statement (“SPDS”). This SPDS supplements the Product Disclosure Statement
dated 20 August 2008 (“Willmott PDS”) for the Willmott Forests Premium Forestry Blend Project ARSN 131 549 589 (“Willmott
Project”). The issuer of this SPDS and the Willmott PDS is Willmott Forests Limited (ABN 17 063 263 650, AFSL No. 233215), which is
the Responsible Entity, and issuer of interests in, the Willmott Project.
This SPDS is to be read together with the Willmott PDS and any other SPDS in relation to the Willmott Project.
Terms defined in the Willmott PDS have the same meaning in this SPDS unless otherwise defined in this SPDS or the context otherwise
requires.
Change in the ATO's position as a result of the MIS test case
The deductibility of expenses incurred by investors in connection with an agricultural managed investment scheme was judicially
considered by the Full Federal Court in Hance v. FC of T; Hannebery v. FC of T [2008] FCAFC 196; 2008 ATC 20-085. On 19 December
2008, the Full Federal Court handed down its decision, finding that the expenses incurred by the investors pursuant to an agricultural
managed investment scheme were incurred in the course of carrying on a business and had the character of outgoings on revenue account
rather than on capital account. This decision also supported the position that investors in an agricultural managed investment scheme
would be carrying on an agricultural enterprise for GST purposes.
If you received this SPDS electronically we will provide you with a paper copy of this SPDS free of charge upon request during the
currency of the Willmott PDS. The purpose of this SPDS is to update the information in the Willmott PDS.
The ATO has now finalised its position and has decided to withdraw Taxation Ruling TR2007/8 and Draft Goods and Services Tax Ruling
3
4
GSTR2008/D1 and has issued an Addendum Product Ruling PR2008/60A , issued by the ATO in respect of Grower investments in the
Willmott Project, to reflect the decision as detailed above and is available on the ATO website.
Please read and consider the following additional information in relation to the Willmott Project.
Consequences for Growers of the Willmott Project
Statements about the Application Price in the Willmott PDS
As a result of the ATO's withdrawal of TR2007/8 and GSTR2008/D1, GST is now applicable to all fees and expenses associated with a
Grower's interest in the Willmott Project. The prospect of this occurring was foreshadowed in the Willmott PDS.
The Willmott PDS states that the application price of each Woodlot is $5,000.00 (“Application Price”). This was stated as being an amount
that was exclusive of Goods and Services Tax (“GST”) as the Application Price was stated as not including an allowance for GST. These
statements were made as at the date of issue of the Willmott PDS, GST was not expected to be payable in respect of the Application Price
as the Australian Taxation Office (ATO) had formed the preliminary opinion (though considered view) that Growers, investing in the
Willmott Project, would not be carrying on an agricultural enterprise for GST purposes.
The following tables provide examples of the consequences for the Growers of the Willmott Project:
Example of dollar impact of GST on Application Price
Application Price
Applicable GST
The ATO's view set out in Taxation Ruling TR2007/8: “Income tax: registered agricultural managed investment schemes”, was that the
Manager as the Responsible Entity was carrying on an agricultural enterprise in connection with the Willmott Project, and that Growers
were merely passive investors. It was also the ATO's view, as set out in draft GST Ruling GSTR2008/D1 that Growers, by virtue of their
1
investment in the Willmott Project, would not be carrying on an agricultural enterprise for GST purposes.
Total Application Price per Woodlot
$500
$5,500
Example of impact of GST on Management Costs:
The Willmott PDS states that the Manager adopted a position consistent with the ATO's preliminary (though considered) view and in
accordance with comments made by the former Assistant Treasurer in a media release “Review of the Taxation of Plantation Forestry”
dated 21 December 2006. This media release stated that forestry investors who are eligible for the specific tax deduction under Division
394 of the Income Tax Assessment Act 1997 (Cwlth) “will be treated as passive investors for GST purposes and will be removed from the
2
GST net”.
However, separately, the ATO also stated in GSTR2008/D1 that its position could not be finalised until the outcome of a test case (as
explained on page 3) regarding a private ruling application involving an agricultural managed investment scheme.
$5,000
Management Costs
Pre-Test Case
Post-Test Case
- Management Fee
4% p.a. (excluding GST)
4% p.a. (including GST)
- Rent
5% p.a. (excluding GST)
5% p.a. (including GST)
- Marketing Fee
1% p.a. (excluding GST)
1% p.a. (including GST)
As the ATO has now finalised its position regarding GST:
! a Grower who has paid the application price by the cash option will be obliged to pay any applicable GST on the receipt of a tax invoice
5
from the Manager; and
! where a finance option has been used to pay the application price, the loan amount will be increased by an amount referable to the
6
applicable GST in respect of the application price.
3
Notice of Withdrawal: Draft Goods and Services Tax Ruling Goods and services tax: registered agricultural managed investment schemes (page1).
Addendum Product Ruling Income Tax: 2009 Willmott Forests Premium Forestry Blend Project (page 1).
5
Please refer to section 14.0 (Independent Taxation Report) on page 59 of the Willmott PDS.
6
Please refer to section 14.0 (Independent Taxation Report) on page 59 of the Willmott PDS.
1
Please refer to section 14.0 (Independent Taxation Report) on page 59 of the Willmott PDS.
2
Please refer to section 14.0 (Independent Taxation Report) on page 59 of the Willmott PDS.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 First Supplementary Product Disclosure Statement
4
Page 2
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 First Supplementary Product Disclosure Statement
Page 3
Willmott Forests Premium Forestry Blend Project
2009 First Supplementary
Product Disclosure Statement
ARSN 131 549 589
Dated: 1 April, 2009
This document is a Supplementary Product Disclosure Statement (“SPDS”). This SPDS supplements the Product Disclosure Statement
dated 20 August 2008 (“Willmott PDS”) for the Willmott Forests Premium Forestry Blend Project ARSN 131 549 589 (“Willmott
Project”). The issuer of this SPDS and the Willmott PDS is Willmott Forests Limited (ABN 17 063 263 650, AFSL No. 233215), which is
the Responsible Entity, and issuer of interests in, the Willmott Project.
This SPDS is to be read together with the Willmott PDS and any other SPDS in relation to the Willmott Project.
Terms defined in the Willmott PDS have the same meaning in this SPDS unless otherwise defined in this SPDS or the context otherwise
requires.
Change in the ATO's position as a result of the MIS test case
The deductibility of expenses incurred by investors in connection with an agricultural managed investment scheme was judicially
considered by the Full Federal Court in Hance v. FC of T; Hannebery v. FC of T [2008] FCAFC 196; 2008 ATC 20-085. On 19 December
2008, the Full Federal Court handed down its decision, finding that the expenses incurred by the investors pursuant to an agricultural
managed investment scheme were incurred in the course of carrying on a business and had the character of outgoings on revenue account
rather than on capital account. This decision also supported the position that investors in an agricultural managed investment scheme
would be carrying on an agricultural enterprise for GST purposes.
If you received this SPDS electronically we will provide you with a paper copy of this SPDS free of charge upon request during the
currency of the Willmott PDS. The purpose of this SPDS is to update the information in the Willmott PDS.
The ATO has now finalised its position and has decided to withdraw Taxation Ruling TR2007/8 and Draft Goods and Services Tax Ruling
3
4
GSTR2008/D1 and has issued an Addendum Product Ruling PR2008/60A , issued by the ATO in respect of Grower investments in the
Willmott Project, to reflect the decision as detailed above and is available on the ATO website.
Please read and consider the following additional information in relation to the Willmott Project.
Consequences for Growers of the Willmott Project
Statements about the Application Price in the Willmott PDS
As a result of the ATO's withdrawal of TR2007/8 and GSTR2008/D1, GST is now applicable to all fees and expenses associated with a
Grower's interest in the Willmott Project. The prospect of this occurring was foreshadowed in the Willmott PDS.
The Willmott PDS states that the application price of each Woodlot is $5,000.00 (“Application Price”). This was stated as being an amount
that was exclusive of Goods and Services Tax (“GST”) as the Application Price was stated as not including an allowance for GST. These
statements were made as at the date of issue of the Willmott PDS, GST was not expected to be payable in respect of the Application Price
as the Australian Taxation Office (ATO) had formed the preliminary opinion (though considered view) that Growers, investing in the
Willmott Project, would not be carrying on an agricultural enterprise for GST purposes.
The following tables provide examples of the consequences for the Growers of the Willmott Project:
Example of dollar impact of GST on Application Price
Application Price
Applicable GST
The ATO's view set out in Taxation Ruling TR2007/8: “Income tax: registered agricultural managed investment schemes”, was that the
Manager as the Responsible Entity was carrying on an agricultural enterprise in connection with the Willmott Project, and that Growers
were merely passive investors. It was also the ATO's view, as set out in draft GST Ruling GSTR2008/D1 that Growers, by virtue of their
1
investment in the Willmott Project, would not be carrying on an agricultural enterprise for GST purposes.
Total Application Price per Woodlot
$500
$5,500
Example of impact of GST on Management Costs:
The Willmott PDS states that the Manager adopted a position consistent with the ATO's preliminary (though considered) view and in
accordance with comments made by the former Assistant Treasurer in a media release “Review of the Taxation of Plantation Forestry”
dated 21 December 2006. This media release stated that forestry investors who are eligible for the specific tax deduction under Division
394 of the Income Tax Assessment Act 1997 (Cwlth) “will be treated as passive investors for GST purposes and will be removed from the
2
GST net”.
However, separately, the ATO also stated in GSTR2008/D1 that its position could not be finalised until the outcome of a test case (as
explained on page 3) regarding a private ruling application involving an agricultural managed investment scheme.
$5,000
Management Costs
Pre-Test Case
Post-Test Case
- Management Fee
4% p.a. (excluding GST)
4% p.a. (including GST)
- Rent
5% p.a. (excluding GST)
5% p.a. (including GST)
- Marketing Fee
1% p.a. (excluding GST)
1% p.a. (including GST)
As the ATO has now finalised its position regarding GST:
! a Grower who has paid the application price by the cash option will be obliged to pay any applicable GST on the receipt of a tax invoice
5
from the Manager; and
! where a finance option has been used to pay the application price, the loan amount will be increased by an amount referable to the
6
applicable GST in respect of the application price.
3
Notice of Withdrawal: Draft Goods and Services Tax Ruling Goods and services tax: registered agricultural managed investment schemes (page1).
Addendum Product Ruling Income Tax: 2009 Willmott Forests Premium Forestry Blend Project (page 1).
5
Please refer to section 14.0 (Independent Taxation Report) on page 59 of the Willmott PDS.
6
Please refer to section 14.0 (Independent Taxation Report) on page 59 of the Willmott PDS.
1
Please refer to section 14.0 (Independent Taxation Report) on page 59 of the Willmott PDS.
2
Please refer to section 14.0 (Independent Taxation Report) on page 59 of the Willmott PDS.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 First Supplementary Product Disclosure Statement
4
Page 2
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 First Supplementary Product Disclosure Statement
Page 3
Willmott Forests Limited
ABN 17 063 263 650
ARSN 131 549 589
249 Park Street (Locked Bag 4011)
South Melbourne, Victoria 3205
Telephone (03) 9696 1355
Facsimile (03) 9696 5567
Freecall 1800 801 866
www.willmottforests.com.au
enquiries@willmottforests.com.au
Australian Financial Services Licence
Licence No 233 215
Back cover
contact
Please visit our website for more
information details
www.willmottforests.com.au
Willmott Forests Premium Forestry Blend Project
2009 First Supplementary
Product Disclosure Statement
ARSN 131 549 589
Dated: 1 April, 2009
Disclaimer: Before making any investment decisions on the basis of this document, you should consider the content of
this document in light of your personal investment objectives, financial situation and individual needs. Willmott Forests
Limited ("WFL") is the issuer of the Product Disclosure Statement for the Willmott Forests Premium Forestry Blend
Project (ARSN 131 549 589) ("Project") and the First Supplementary Product Disclosure Statement for the Project
(together, "PDS"). An offer of interests in the Project is contained in the PDS, and any additional supplementary product
disclosure statement. A copy of the PDS can be obtained from WFL or from the website (www.willmottforests.com.au).
Interests in the Project may only be acquired by using the application form in or accompanying the PDS. Investors should
consider the PDS in deciding whether to invest in the Project.
Willmott Forests Premium Forestry Blend Project
2009 Second Supplementary
Product Disclosure Statement
ARSN 131 549 589
Dated: 10 June, 2009
Willmott Forests Limited
ABN 17 063 263 650
ARSN 131 549 589
249 Park Street (Locked Bag 4011)
South Melbourne, Victoria 3205
Telephone (03) 9696 1355
Facsimile (03) 9696 5567
Freecall 1800 801 866
www.willmottforests.com.au
enquiries@willmottforests.com.au
Australian Financial Services Licence
Licence No 233 215
This document is a Supplementary Product Disclosure Statement (“SPDS”). This SPDS supplements the Product Disclosure
Statement dated 20 August 2008 (“Willmott PDS”) and the First Supplementary Product Disclosure Statement (“First SPDS”)
for the Willmott Forests Premium Forestry Blend Project ARSN 131 549 589 (“Project”). The issuer of this SPDS and the
Willmott PDS is Willmott Forests Limited (ABN 17 063 263 650, AFSL No. 233215), which is the Responsible Entity of, and issuer
of interests in, the Project.
This SPDS is to be read together with the Willmott PDS and the First SPDS in relation to the Project.
Terms defined in the Willmott PDS have the same meaning in this SPDS unless otherwise defined in this SPDS or the context
otherwise required.
If you received this SPDS electronically we will provide you with a paper copy of this SPDS free of charge upon request during the
currency of the Willmott PDS. The purpose of this SPDS is to update information in the Willmott PDS.
Please read and consider the following additional information in relation to the Willmott Project.
Disclaimer:
Before making any investment decisions on the basis of this document, you should consider the content of this document in light
of your personal investment objectives, financial situation and individual needs. Willmott Forests Limited (“WFL”) is the issuer of
the Product Disclosure Statement for the Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) (“Project”), the
First Supplementary Product Disclosure Statement for the Project and the Second Supplementary Product Disclosure
Statement for the Project (together, “PDS”). An offer of interests in the Project is contained in the PDS, and any additional
supplementary product disclosure statement. A copy of the PDS can be obtained from WFL or from the website
(www.willmottforests.com.au). Interests in the Project may only be acquired by using the application form in or accompanying
the PDS. Investors should consider the PDS in deciding whether to invest in the Project.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 Second Supplementary Product Disclosure Statement
Page 1
Responsible Entity risk
The purpose of this SPDS is to elaborate on the risk that could arise for investors should the Responsible Entity’s financial position be adversely
affected such that it is unable to fully satisfy its obligations to Growers in respect of the Project.
The Responsible Entity has a critical role in relation to the Project, with a number of ongoing obligations which extend for the life of the Project.
In the event that the Responsible Entity was to become insolvent or otherwise unable to meet its obligations for financial reasons (and it was not
possible to secure a replacement responsible entity to assume those obligations) there is a risk that the Project and the Growers’ interests
under it may cease to be economically viable. In these circumstances, one of the outcomes could be that Growers may not be able to recover
any value from their investment in the Project.
Based on its current financial position the Responsible Entity does not consider this to be a significant risk.
The financial position of the Responsible Entity remains strong. A summary of the financial statements of the Responsible Entity as at 31
December 2007 is set out on page 65 of the Willmott PDS. An updated extract from the statement of net assets of Willmott Forests Limited and
controlled entities as at 31 December 2007, 30 June 2008 and 31 December 2008 is set out below:-
Summary Balance Sheet
Current Assets
Non Current Assets
Total Assets
Current Liabilities
Non Current Liabilities
Total Liabilities
Net Assets
Net Tangible Assets
HY2009
31 December 2008
$ 78,554,454
$244,953,111
$323,507,565
$ 76,407,673
$139,162,318
$215,569,991
$107,937,574
$106,831,846
FY2008
30 June 2008
$140,996,921
$210,670,088
$351,667,009
$140,539,257
$107,473,595
$248,012,852
$103,654,157
$102,520,836
HY2008
31 December 2007
$ 57,574,343
$189,852,262
$247,426,605
$ 38,438,239
$112,212,351
$150,650,590
$ 96,776,015
$ 93,704,206
$ 55,503,592
$
383,439
$ 44,578,523
$ 7,472,020
$107,937,574
$ 55,503,592
$
383,439
$ 40,425,761
$ 7,341,365
$103,654,157
$ 54,217,717
$ 38,273,428
$ 4,284,870
$ 96,776,015
Shareholders Equity
Contributed Equity
Asset Revaluation
Retained Earnings
Minority Equity Interests
Total Shareholders Equity
Long before the downturn in debt and equity markets, in fact in 2006, Willmott Forests moved to implement a sound and conservative capital
management strategy.
In March 2009, Willmott Forests completed a $135m debt syndication with Commonwealth Bank of Australia and St George Bank in the face of
possibly the toughest debt markets ever seen.
Willmott Forests has not needed to raise additional equity from the market in recent years (the Company’s last capital raising was in December
2005) and will not need to renegotiate any bank debt facility until 2011.
Willmott Forests’ recent financial performance and growth is summarised in the table below:Summary of financial performance and growth - Willmott Forests Limited
Revenue
($m)
FY07
70.3
FY08
90.8
Change
+ 29%
HY08
34.3
HY09
44.0
Change
+ 28%
NPAT (underlying)
($m)
8.1
11.3
+ 40%
3.1
4.2
+ 35%
Total Assets
($m)
263.0
351.7
+ 34%
247.4
324.0
+ 31%
($m)
135.1
143.7
+ 6%
136.8
148.0
+ 8%
(-4%)
(-8%)
28%
44%
1
Equity
Gearing
1
2
2
Equity includes hybrid security known as PINES (ASX Code: WFLPA)
Gearing = Net Debt / Equity direct from statutory accounts adjusted for PINES reclassified as equity and excluding non controlling interests.
A copy of the audited accounts of the Responsible Entity may be obtained, free of charge, by visiting the Willmott Forests website or by
contacting the Responsible Entity during normal business hours.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 Second Supplementary Product Disclosure Statement
Page 2
Willmott Forests Premium Forestry Blend Project
2009 Third Supplementary
Product Disclosure Statement
Dated: 16 June, 2009
Growth rates and yields for previous projects
The purpose of this part of the SPDS is to provide an indication of the Responsible Entity's experience in relation to growth
rates and yields for previous projects.
It is important to note that each plantation is subject to agricultural risk.
Agricultural risk refers to any physical risk, which has the ability to impact on growth rates and subsequent yields at harvest
time.
There is a risk that plantation yields may vary materially over a period of time due to a number of external factors such
as those listed in Section 5 of the PDS.
Willmott Forests has, since 2006, provided a range of yield estimates in the Independent Foresters Reports. That range has
3
3
been between 14m /ha/year and 25m /ha/year. The Independent Foresters Report contained in the PDS states that
3
“….productivity is expected to range from 16 to more than 24m /ha/year with the bulk of plantations in the mid range of this”.
In excess of 97% of all plantations established and managed by Willmott Forests are demonstrating growth yields within these
ranges.
Until 2005 Willmott Forests' general practice was to estimate specific growth yields and when these figures are applied to
current estimated growth yields across Willmott Forests' plantation estate:!
!
Telephone (03) 9696 1355
Facsimile (03) 9696 5567
Freecall 1800 801 866
www.willmottforests.com.au
enquiries@willmottforests.com.au
Australian Financial Services Licence
Licence No 233 215
This document is a Supplementary Product Disclosure Statement (“SPDS”). This SPDS supplements the Product Disclosure
Statement dated 20 August 2008 (“Willmott PDS”), the first Supplementary Product Disclosure Statement dated 1 April 2009
(“First SPDS”) and the second Supplementary Product Disclosure Statement dated 10 June 2009 (“Second SPDS”) for the
Willmott Forests Premium Forestry Blend Project ARSN 131 549 589 (“Project”). The issuer of this SPDS and the Willmott PDS
is Willmott Forests Limited (“Willmott Forests” or “Responsible Entity”), which is the responsible entity of, and issuer of
interests in, the Project.
This SPDS is to be read together with the Willmott PDS, First SPDS and the Second SPDS.
the indicated variances are up to 30%; and
80% of the plantation estate is currently within a 20% variance;
Terms defined in the Willmott PDS have the same meaning in this SPDS unless otherwise defined in this SPDS or the context
otherwise requires.
In Willmott Forests' view, the variances are principally due to the below average rainfall experienced over the last 6 years and
because the analysis is based predominantly on immature plantations.
Agricultural risks are largely outside of the control of the Responsible Entity but can be mitigated to some extent. Mitigation
measures are detailed in the PDS and summarised as follows:!
!
!
!
!
Willmott Forests Limited
ABN 17 063 263 650
ARSN 131 549 589
249 Park Street (Locked Bag 4011)
South Melbourne, Victoria 3205
geographic and species diversification;
suitable site selection;
a higher concentration on proven plantation land (second rotation sites);
employment of improved genetics; and
evolving forestry best practices in planting, site preparation and management.
Please read and consider the following additional information in relation to the Willmott Forests Project.
Visit our website for more information - www.willmottforests.com.au
These factors should be noted in any comparison of current projects to past projects and performance. Failure to achieve
projected estimated growth yields may have a material impact on Grower returns.
Growth yields are not guaranteed and past performance should not be regarded as an indication of future performance.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 Third Supplementary Product Disclosure Statement
If you received this SPDS electronically we will provide you with a paper copy of this SPDS free of charge upon request during the
currency of the Willmott PDS. The purpose of this SPDS is to update information in the Willmott PDS.
Page 4
Disclaimer: Before making any investment decisions on the basis of this document, you should consider the content of this
document in light of your personal investment objectives, financial situation and individual needs. Willmott Forests Limited
(“WFL”, “Willmott Forests” or “Responsible Entity”) is the issuer of the Product Disclosure Statement for the Willmott Forests
Premium Forestry Blend Project (ARSN 131 549 589) (“Project”), the First Supplementary Product Disclosure Statement for the
Project, the Second Supplementary Product Disclosure Statement for the Project and the Third Supplementary Product
Disclosure Statement for the Project (together, “PDS”). An offer of interests in the Project is contained in the PDS, and any
additional supplementary product disclosure statement. A copy of the PDS can be obtained from WFL or from the website
(www.willmottforests.com.au). Interests in the Project may only be acquired by using the application form in or accompanying
the PDS. Investors should consider the PDS in deciding whether to invest in the Project.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 Third Supplementary Product Disclosure Statement
Page 1
Willmott Forests Premium Forestry Blend Project
2009 Third Supplementary
Product Disclosure Statement
Dated: 16 June, 2009
Responsible Entity's capacity to meet its existing and future obligations in relation to the Project
The purpose of this part of this SPDS is to provide additional information in relation to the capacity of the Responsible Entity to
meet its ongoing obligations to Growers in respect of the Project.
In this context, it is important to note that application moneys are held on behalf of investors only until Woodlots have been
issued. The application moneys are then paid to the Responsible Entity and the Responsible Entity does not hold them on trust
for the Growers or the Project. The Responsible Entity is, however, required to have sufficient amounts of working capital to
establish and maintain the Project over its life.
The Second SPDS outlines the potential risk for investors in the event that the Responsible Entity is unable to fully satisfy its
obligations to Growers in respect to the Project should its financial position be adversely affected. As stated in the Second
SPDS, based on its current financial position, the Responsible Entity does not consider that there is a significant risk that it will
be unable to meet those obligations. Set out below is some additional information as to why the Responsible Entity considers
this to be the case.
1. ASX Listed
Willmott Forests, is listed on the ASX (ASX Code: WFL). As a listed company, Willmott Forests has the option of seeking
additional capital from its shareholders or other investors should the need arise. It is noted that Willmott Forests has not sought
additional equity since 2005, having chosen to grow within its own means and by modest increases to its debt facilities in line
with its growing balance sheet and capital management plan.
2. Balance Sheet
Further, Willmott Forests has a strategy of maintaining a strong balance sheet. As noted in the Second SPDS, Willmott Forests
had total shareholders equity of $107.9 million as at 31 December 2008. This position is reinforced by Willmott Forests'
existing undrawn debt facilities and future income entitlements from previous managed investment schemes.
3. Available Cash
As at 31 March 2009 Willmott Forests had available cash in the sum of $42.8 million comprising undrawn facilities and cash at
bank.
4. Core Business
It should also be noted that Willmott Forests' core business is the establishment and management of forestry plantations and it
has not diversified into any non-forestry agricultural projects. Willmott Forests has over a considerable period of time
developed the personnel and infrastructure required for successful plantation management and protection. All scheduled infield operations have been conducted in accordance with accepted industry practices and in line with the ATO Product Rulings
relevant to each previous project.
5. Reliance on woodlot sales
Although Willmott Forests has diversified income streams, a significant proportion of its current total annual revenue is derived
from woodlot sales. There is a risk that the present commercial environment for agricultural managed investment scheme
products could result in reduced woodlot sales.
While, as at the date of this SPDS, Willmott Forests has not experienced a reduction in woodlot sales. Willmott Forests has
considered the potential impact of reduced woodlot sales on its financial position and as a large proportion of its costs are
variable and due to the fact that the business has run at reduced levels in the recent past, we expect that Willmott Forests
would continue to be a profitable going concern able to meet its obligations as and when they fall due even in the event of a
reduction in woodlot sales.
It should be noted that, historically, Willmott Forests' annual plantation management expenditure in relation to past projects
has been less than 2% of its total annual revenue. In the unlikely event that anticipated woodlot sales reduced by as much as
50% this figure would be in the order of 5% of total annual revenue.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 Third Supplementary Product Disclosure Statement
Page 2
6. Risks affecting the Responsible Entity
The following table outlines a number of risks that may affect the Responsible Entity's ability to meet existing and future
obligations in respect of the Project as and when they fall due and mitigation strategies:Risk
Mitigation
Decrease in woodlot sales,
resulting in a fall in revenue
to fund future forestry
operations (including
harvesting)
The Responsible Entity has…
! a large proportion of plantation establishment, management and operational
costs that are variable and move with the level of annual woodlot sales;
! historically low plantation management costs relative to total annual
revenues; and
! an experienced management team with a track record of operating the
Responsible Entity at substantially lower annual woodlot sales levels.
Responsible Entity has
insufficient operating cash
flow to fund future forestry
operations (including
harvesting)
The Responsible Entity can…
! access retained earnings, and undrawn debt facilities; and or
! seek additional equity on capital markets; and or
! implement an asset realisation program; and or
! restructure operating costs in line with annual woodlot sales.
Responsible Entity becomes
insolvent and is unable to
meet its ongoing obligations
The Responsible Entity's future income entitlements from the Project and previous
managed investment schemes, combined with the relatively low cost of the
ongoing management of plantations, should mean that there is a reasonable
prospect of attracting a new responsible entity to take over the Project in the event
that the Responsible Entity becomes insolvent.
Escalation of future plantation
management and harvesting
costs (materially above
forecast)
The Responsible Entity has…
! a long history of efficient plantation management;
! sought to implement industry best practices which provide cost efficient
outcomes;
! an experienced management team;
! conservative forecasting practices which facilitates understanding and
planning for such occurrences;
! a thorough understanding of the costs associated with the ongoing
management of its plantation estate as a result of its own industry
experience and that of its strategic partners; and
! historically stable and relatively low plantation management cost structures.
Responsible Entity debt
refinancing risk
The Responsible Entity has no current requirement to refinance and has…
! low current debt representing 1.65% of current assets;
! non-current debt facilities that are split into two tranches with the first to be
reset in 2011 and the second to be reset in 2012;
! significant total assets in excess of $300 million; and
! sound financial management.
Future global economic
conditions
The global financial crisis has created a level of uncertainty over the future global
economic outlook which may impact demand and prices for products produced
from the Project. The Responsible Entity will continue to monitor the impact of this
on the Project and will adjust its operations should the need arise.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009Third Supplementary Product Disclosure Statement
Page 3
Willmott Forests Premium Forestry Blend Project
2009 Third Supplementary
Product Disclosure Statement
Dated: 16 June, 2009
Responsible Entity's capacity to meet its existing and future obligations in relation to the Project
The purpose of this part of this SPDS is to provide additional information in relation to the capacity of the Responsible Entity to
meet its ongoing obligations to Growers in respect of the Project.
In this context, it is important to note that application moneys are held on behalf of investors only until Woodlots have been
issued. The application moneys are then paid to the Responsible Entity and the Responsible Entity does not hold them on trust
for the Growers or the Project. The Responsible Entity is, however, required to have sufficient amounts of working capital to
establish and maintain the Project over its life.
The Second SPDS outlines the potential risk for investors in the event that the Responsible Entity is unable to fully satisfy its
obligations to Growers in respect to the Project should its financial position be adversely affected. As stated in the Second
SPDS, based on its current financial position, the Responsible Entity does not consider that there is a significant risk that it will
be unable to meet those obligations. Set out below is some additional information as to why the Responsible Entity considers
this to be the case.
1. ASX Listed
Willmott Forests, is listed on the ASX (ASX Code: WFL). As a listed company, Willmott Forests has the option of seeking
additional capital from its shareholders or other investors should the need arise. It is noted that Willmott Forests has not sought
additional equity since 2005, having chosen to grow within its own means and by modest increases to its debt facilities in line
with its growing balance sheet and capital management plan.
2. Balance Sheet
Further, Willmott Forests has a strategy of maintaining a strong balance sheet. As noted in the Second SPDS, Willmott Forests
had total shareholders equity of $107.9 million as at 31 December 2008. This position is reinforced by Willmott Forests'
existing undrawn debt facilities and future income entitlements from previous managed investment schemes.
3. Available Cash
As at 31 March 2009 Willmott Forests had available cash in the sum of $42.8 million comprising undrawn facilities and cash at
bank.
4. Core Business
It should also be noted that Willmott Forests' core business is the establishment and management of forestry plantations and it
has not diversified into any non-forestry agricultural projects. Willmott Forests has over a considerable period of time
developed the personnel and infrastructure required for successful plantation management and protection. All scheduled infield operations have been conducted in accordance with accepted industry practices and in line with the ATO Product Rulings
relevant to each previous project.
5. Reliance on woodlot sales
Although Willmott Forests has diversified income streams, a significant proportion of its current total annual revenue is derived
from woodlot sales. There is a risk that the present commercial environment for agricultural managed investment scheme
products could result in reduced woodlot sales.
While, as at the date of this SPDS, Willmott Forests has not experienced a reduction in woodlot sales. Willmott Forests has
considered the potential impact of reduced woodlot sales on its financial position and as a large proportion of its costs are
variable and due to the fact that the business has run at reduced levels in the recent past, we expect that Willmott Forests
would continue to be a profitable going concern able to meet its obligations as and when they fall due even in the event of a
reduction in woodlot sales.
It should be noted that, historically, Willmott Forests' annual plantation management expenditure in relation to past projects
has been less than 2% of its total annual revenue. In the unlikely event that anticipated woodlot sales reduced by as much as
50% this figure would be in the order of 5% of total annual revenue.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 Third Supplementary Product Disclosure Statement
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6. Risks affecting the Responsible Entity
The following table outlines a number of risks that may affect the Responsible Entity's ability to meet existing and future
obligations in respect of the Project as and when they fall due and mitigation strategies:Risk
Mitigation
Decrease in woodlot sales,
resulting in a fall in revenue
to fund future forestry
operations (including
harvesting)
The Responsible Entity has…
! a large proportion of plantation establishment, management and operational
costs that are variable and move with the level of annual woodlot sales;
! historically low plantation management costs relative to total annual
revenues; and
! an experienced management team with a track record of operating the
Responsible Entity at substantially lower annual woodlot sales levels.
Responsible Entity has
insufficient operating cash
flow to fund future forestry
operations (including
harvesting)
The Responsible Entity can…
! access retained earnings, and undrawn debt facilities; and or
! seek additional equity on capital markets; and or
! implement an asset realisation program; and or
! restructure operating costs in line with annual woodlot sales.
Responsible Entity becomes
insolvent and is unable to
meet its ongoing obligations
The Responsible Entity's future income entitlements from the Project and previous
managed investment schemes, combined with the relatively low cost of the
ongoing management of plantations, should mean that there is a reasonable
prospect of attracting a new responsible entity to take over the Project in the event
that the Responsible Entity becomes insolvent.
Escalation of future plantation
management and harvesting
costs (materially above
forecast)
The Responsible Entity has…
! a long history of efficient plantation management;
! sought to implement industry best practices which provide cost efficient
outcomes;
! an experienced management team;
! conservative forecasting practices which facilitates understanding and
planning for such occurrences;
! a thorough understanding of the costs associated with the ongoing
management of its plantation estate as a result of its own industry
experience and that of its strategic partners; and
! historically stable and relatively low plantation management cost structures.
Responsible Entity debt
refinancing risk
The Responsible Entity has no current requirement to refinance and has…
! low current debt representing 1.65% of current assets;
! non-current debt facilities that are split into two tranches with the first to be
reset in 2011 and the second to be reset in 2012;
! significant total assets in excess of $300 million; and
! sound financial management.
Future global economic
conditions
The global financial crisis has created a level of uncertainty over the future global
economic outlook which may impact demand and prices for products produced
from the Project. The Responsible Entity will continue to monitor the impact of this
on the Project and will adjust its operations should the need arise.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009Third Supplementary Product Disclosure Statement
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Willmott Forests Premium Forestry Blend Project
2009 Third Supplementary
Product Disclosure Statement
Dated: 16 June, 2009
Growth rates and yields for previous projects
The purpose of this part of the SPDS is to provide an indication of the Responsible Entity's experience in relation to growth
rates and yields for previous projects.
It is important to note that each plantation is subject to agricultural risk.
Agricultural risk refers to any physical risk, which has the ability to impact on growth rates and subsequent yields at harvest
time.
There is a risk that plantation yields may vary materially over a period of time due to a number of external factors such
as those listed in Section 5 of the PDS.
Willmott Forests has, since 2006, provided a range of yield estimates in the Independent Foresters Reports. That range has
3
3
been between 14m /ha/year and 25m /ha/year. The Independent Foresters Report contained in the PDS states that
3
“….productivity is expected to range from 16 to more than 24m /ha/year with the bulk of plantations in the mid range of this”.
In excess of 97% of all plantations established and managed by Willmott Forests are demonstrating growth yields within these
ranges.
Until 2005 Willmott Forests' general practice was to estimate specific growth yields and when these figures are applied to
current estimated growth yields across Willmott Forests' plantation estate:!
!
Telephone (03) 9696 1355
Facsimile (03) 9696 5567
Freecall 1800 801 866
www.willmottforests.com.au
enquiries@willmottforests.com.au
Australian Financial Services Licence
Licence No 233 215
This document is a Supplementary Product Disclosure Statement (“SPDS”). This SPDS supplements the Product Disclosure
Statement dated 20 August 2008 (“Willmott PDS”), the first Supplementary Product Disclosure Statement dated 1 April 2009
(“First SPDS”) and the second Supplementary Product Disclosure Statement dated 10 June 2009 (“Second SPDS”) for the
Willmott Forests Premium Forestry Blend Project ARSN 131 549 589 (“Project”). The issuer of this SPDS and the Willmott PDS
is Willmott Forests Limited (“Willmott Forests” or “Responsible Entity”), which is the responsible entity of, and issuer of
interests in, the Project.
This SPDS is to be read together with the Willmott PDS, First SPDS and the Second SPDS.
the indicated variances are up to 30%; and
80% of the plantation estate is currently within a 20% variance;
Terms defined in the Willmott PDS have the same meaning in this SPDS unless otherwise defined in this SPDS or the context
otherwise requires.
In Willmott Forests' view, the variances are principally due to the below average rainfall experienced over the last 6 years and
because the analysis is based predominantly on immature plantations.
Agricultural risks are largely outside of the control of the Responsible Entity but can be mitigated to some extent. Mitigation
measures are detailed in the PDS and summarised as follows:!
!
!
!
!
Willmott Forests Limited
ABN 17 063 263 650
ARSN 131 549 589
249 Park Street (Locked Bag 4011)
South Melbourne, Victoria 3205
geographic and species diversification;
suitable site selection;
a higher concentration on proven plantation land (second rotation sites);
employment of improved genetics; and
evolving forestry best practices in planting, site preparation and management.
Please read and consider the following additional information in relation to the Willmott Forests Project.
Visit our website for more information - www.willmottforests.com.au
These factors should be noted in any comparison of current projects to past projects and performance. Failure to achieve
projected estimated growth yields may have a material impact on Grower returns.
Growth yields are not guaranteed and past performance should not be regarded as an indication of future performance.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 Third Supplementary Product Disclosure Statement
If you received this SPDS electronically we will provide you with a paper copy of this SPDS free of charge upon request during the
currency of the Willmott PDS. The purpose of this SPDS is to update information in the Willmott PDS.
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Disclaimer: Before making any investment decisions on the basis of this document, you should consider the content of this
document in light of your personal investment objectives, financial situation and individual needs. Willmott Forests Limited
(“WFL”, “Willmott Forests” or “Responsible Entity”) is the issuer of the Product Disclosure Statement for the Willmott Forests
Premium Forestry Blend Project (ARSN 131 549 589) (“Project”), the First Supplementary Product Disclosure Statement for the
Project, the Second Supplementary Product Disclosure Statement for the Project and the Third Supplementary Product
Disclosure Statement for the Project (together, “PDS”). An offer of interests in the Project is contained in the PDS, and any
additional supplementary product disclosure statement. A copy of the PDS can be obtained from WFL or from the website
(www.willmottforests.com.au). Interests in the Project may only be acquired by using the application form in or accompanying
the PDS. Investors should consider the PDS in deciding whether to invest in the Project.
Willmott Forests Premium Forestry Blend Project (ARSN 131 549 589) - 2009 Third Supplementary Product Disclosure Statement
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