download WA Blue Gum Project Product Disclosure Statement 2013

W.A. BLUE GUM LIMITEDACN 060 179 982AFS Licence Number 246264

Dear Prospective GrowerYou are invited to participate in the W.A. Blue Gum Project 2013.The Project will be developed on land in the south-west of Western Australia, which the Project's Independent ForestryExpert, Mr Don Spriggins, considers is very suitable for the Establishment of Blue Gum plantations.The Directors have been successful in procuring an agreement with the very experienced and reputable company W.A.Chip & Pulp Co. Pty Ltd to Harvest and purchase the wood produced by the Project. W.A. Chip & Pulp Co. is owned bytwo extremely large Japanese companies, Marubeni Corporation and Nippon Paper Industries Co. The MarubeniCorporation Group owns and manages tree plantations in Western Australia on a large scale and, in the opinion of theBoard, is an industry leader in plantation establishment and management, log Harvesting and woodchipping. TheMarubeni Group is one of the large Japanese Trading Houses. Nippon Paper is among the largest paper manufacturersin Japan, which itself is the second or third largest paper making country in the world.Every business, including agriculture, involves a degree of risk. The major risks identified by the Directors have been setout in this Combined Product Disclosure Statement and Financial Services Guide ("PDS"). While the Directors havetaken steps to reduce these risks or minimise the adverse impact of such risks in the structuring of the Project, by theterms of the contracts to be entered into and by utilising and consulting leaders in the forestry sector, this Project shouldbe considered long term and speculative.The Directors have paid careful regard to ASIC's Regulatory Guides and to the stated objectives of the current productdisclosure regime.This PDS is divided into three parts. Part A of this PDS is a summary of the key features, rights and obligations ofsubscribing to the Project. Having regard to the complexity of the choice to invest and volume of relevant information,Part A attempts to provide a clear, concise and effective disclosure of the main features, rights and obligations. However,current market expectations of prospective Subscribers require significant detailed information to be provided to enablepeople to assess their participation in such products. Part B represents this extensive detailed information. Part C of thisPDS is a Financial Services Guide which the Responsible Entity is required to provide to prospective Subscribers. Allparts should be read in their entirety.Please give the Project your most careful consideration.Yours sincerelyA. H. MayChairmanW.A. Blue Gum Limited

SectionPage1. DIRECTORY ...................................................................................................5PART A: EXECUTIVE SUMMARY...............................................................................7PART B: DETAILED INFORMATION.........................................................................172. PARTICULAR ATTRACTIVE FEATURES OF THE PROJECT ...................182.1 Quality of the Land .........................................................................182.2 Forward Sale of all the Wood .........................................................182.3 Improved Seedlings........................................................................182.4 Uncomplicated Finance..................................................................182.5 Experienced Forestry Consultant...................................................192.5 Experienced and Cutting Edge Operations....................................192.7 Involvement of Marubeni Corporation andNippon Paper Industries Co ...........................................................192.8 Carbon and Environmental Credits and Debits..............................193. WHY BECOME A GROWER OF BLUE GUM..............................................203.1 Attributes of the Species ................................................................203.2 Environmentally Beneficial .............................................................203.3 Growing Demand ...........................................................................203.4 Growing Returns ............................................................................203.5 International Markets......................................................................213.6 Diversification of Asset Classes .....................................................223.7 Government Support......................................................................223.8 Employment Opportunities.............................................................224. FEES AND OTHER COSTS .........................................................................235. STRUCTURE OF THE PROJECT................................................................276. OTHER DETAILS OF THE PROJECT .........................................................286.1 Reports...........................................................................................286.2 Insurance........................................................................................286.3 The Responsible Entity ..................................................................286.4 Compliance Plan ............................................................................296.5 Compliance Committee..................................................................296.6 Audit of the Compliance Plan.........................................................296.7 Conflicts of Interest.........................................................................306.8 Complaints by Growers..................................................................306.9 Anti Money Laundering and Counter TerrorismFinancing Amendment Act 2007.....................................................30

7. INDEPENDENT FORESTRY EXPERT'S REPORT .....................................318. DIRECTORS OF WABG...............................................................................369. PRINCIPAL AGREEMENTS.........................................................................3710. ADDITIONAL INFORMATION......................................................................4411. GLOSSARY OF TERMS ..............................................................................4612. HOW TO PARTICIPATE ...............................................................................4813. APPLICATION FORM ..................................................................................4914. POWER OF ATTORNEY ..............................................................................5315. APPLICATION FOR FINANCE ....................................................................5516. (IF APPLICABLE) POWER OF ATTORNEY FOR GUARANTEE ANDINDEMNITY WHERE THE APPLICANT IS A COMPANY ...........................59PART C: W.A. BLUE GUM PROJECT 2012 FINANCIAL SERVICES GUIDE..........61

Responsible Entity and Project ManagerDirectors of W.A. Blue Gum LimitedCustodianForestry ContractorWood PurchaserW.A. Blue Gum LimitedACN 060 179 982Level 21, 385 Bourke StreetMelbourne Victoria 3000Anthony Henry MayLeon GorrSteven John SmithSandhurst Trustees LimitedACN 004 030 737Level 5, 120 Harbour EsplanadeDocklands Victoria 3008WACAP Treefarms Pty Ltd*ACN 009 378 607Level 253 Victoria StBunbury WA 6231W.A. Chip & Pulp Co. Pty Ltd*ACN 008 720 518Level 253 Victoria StBunbury WA 6231Independent Forestry ExpertSolicitors to the Responsible EntityDon Spriggins, Dip. For., B. Sc. For.,F.I.F.A., MACFA. RPF11 Wattle StreetBunbury WA 6230Herbert GeerLevel 20, 385 Bourke StreetMelbourne Victoria 3000* Both these companies are ultimately owned byMarubeni Corporation and Nippon Paper Industries Co

OVERVIEWW.A. Blue Gum Limited ("WABG") invites Subscribers tosublease 3 or more identifiable allotments of land (1hectare each), for an estimated 10 year term as part of acommercial Tasmanian Blue Gum (eucalyptus globulus)plantation. Each hectare is likely to contain between 900and 1,000 trees, with an average of about 950.PULPWOOD INDUSTRYThe continued reliance on paper and paper products bydeveloped countries and the increased consumption ofthese products by developing countries is leading to anincrease in demand for the raw materials required forpaper production. Hardwood fibre, extracted from BlueGum is the preferred raw material for the production ofhigh quality paper. In fact, most paper mills require thatsome, if not all, of their timber input be hardwood fibre.THE OFFERINGThe Project will consist of about 500 hectares, or more,subject to land of the required quality being available.Establishment Fee per hectare: $6,250 (includingGST)Minimum of 3 - $18,750 (including GST)Ongoing fees per hectareOther fees:Lease: $462 (including GST)Minimum of 3 - $1,386 (including GST)(Indexed) per annumTending: $121 (including GST)Minimum of 3 - $363 (including GST)(Indexed) per annumHarvest, transport costs: to be deducted fromHarvest proceedsHarvest supervision fees: approximately3.3% (including GST) of net HarvestproceedsIncentive bonus: 15% of excess return above$18,000 (including GST) (Indexed) perhectareInsurance: approximately 0.7% of insuredvalue (including GST)Credit (or similar) card merchants fee forGrowers who make payments under theProject using a credit or similar cardFinance availableProject term: approximately 10 yearsOffer closes: 30 June 2013BENEFITSFull 'Offtake' agreement with a 'Higher Price' optionThe Harvested timber will be sold to W.A. Chip & Pulp Co.(jointly owned by the Marubeni Corporation and theNippon Paper Industries Co) unless WABG can negotiatewith any other potential buyers for a higher price. W.A.Chip & Pulp Co. then has the option of meeting thathigher price.Promoting Ecologically Sound Plantation ForestryThe establishment of hardwood plantations in Australiareduces the Harvesting pressure on native foreststhroughout the world, particularly on the tropical forests ofAsia and the South Pacific. Additionally, plantationscreate a sink for greenhouse gasses and help relievesalinity and soil erosion.All Operations by Industry ExpertsThe Project Manager has contracted noted industryexperts to assist with the operation of the Projectincluding WACAP Treefarms as Forestry Contractor(jointly owned by the Marubeni Corporation and theNippon Paper Industries Co) and a forestry consultantwith extensive experience in Western Australia,particularly with Tasmanian Blue Gum.Tax EffectivenessA Grower should, upon payment, be entitled to animmediate tax deduction, pursuant to Division 394 of theITAA 1997, being 100% of the total Application Moneypayable. In addition, all the annual or other fees shouldalso be deductible in the respective years of payment.Product Rulings PR 2013/4 has been issed by the ATO on20 March 2013 confirming this.Growers should seek independent advice in relation to alltaxation issues.Ongoing Government supportDivision 394 of the ITAA 97 was introduced for the explicitpurpose of encouraging more tree plantations.

Date of PDS: This PDS is dated 14 June 2013Issued By:Project Name:W.A. BLUE GUM LIMITEDACN 060 179 982AFS Licence Number: 246264Level 21385 Bourke StreetMelbourne Vic 3000AustraliaTelephone: 1300 888 511Facsimile: (03) 9642 4435Email: info@wabluegum.com.auWebsite: www.wabluegum.com.auW.A. BLUE GUM PROJECT 2013 ARSN 164 105579The Project:The Project involves the Establishment and tendingof Tasmanian Blue Gum (Eucalyptus globulus)plantations for the Harvesting and sale of timber.The sale of harvested timber is a managedinvestment scheme registered under theCorporations Act. WABG, the Responsible Entityand the Project Manager, has been involved inforestry operations for over 10 years and currentlymanages thousands of hectares of eucalyptplantations in Western Australia on behalf ofsubscribers to previous offer documents.Pursuant to the Project Agreements the ProjectManager will arrange the Establishment, tending,felling and Harvesting of Blue Gum plantations tobe known as the "W.A. Blue Gum Project 2013".The duties of the Project Manager include thefollowing:Establishing the Plantations within theEstablishment Period for the purposes offelling and Harvesting; andtending the Plantations until felling andHarvesting take place.The Project is to be established on land in thesouth-west of Western Australia between Bunburyand Albany by raising $3,125,000 in initialApplications Fees based on the present landavailability outlook. Oversubscription may beaccepted, the amount of which will be subject to theavailability of land of the desired quality. EachGrower will sub-lease a specific and identifiablearea of the Project Land from the Project Managerpursuant to a Sub-lease.The Project Manager leases the Project Land fromvarious farmers or alternatively, sub-leases fromW.A. Chip & Pulp Co. or WACAP Treefarms. In allinstances, the head lease between the ProjectManager and the farmer, or alternatively, the subleasebetween the Project Manager and W.A. Chip& Pulp Co. or WACAP Treefarms is to be registeredwith Landgate, the Western Australian Office ofTitles thereby protecting the Project Manager's andultimately the Grower's interest in the Project Land.Each Grower will enter into Project Agreements.The Project Agreements consist of a Sub-lease(and/or an Agreement to Sub-lease), a ProjectManagement Contract and a Wood PurchaseAgreement.Where not all the Project Land is available for aparticular Grower on or before 30 June 2013, theResponsible Entity may still accept the Grower'sApplication subject to a Sub-lease being enteredinto on behalf of the Grower and lodged forregistration by 30 September 2014.In these circumstances, the Grower will be requiredto enter into an Agreement to Sub-lease with theProject Manager.It is anticipated that the Blue Gum trees Establishedand maintained under this Project will be availablefor Harvesting as woodchips in about ten years.However, the timber may be sold at any timebetween 2021 and 2025.Under the terms of the Wood Purchase Agreement,W.A. Chip & Pulp Co. will buy the wood unlessWABG can negotiate better terms with a reputablethird party after first allowing the Purchaser theopportunity to match the price offered by the otherparty interested in purchasing the wood (seeSection 9.6 of Part B of this PDS). The precisedate of purchase will depend upon both the growingconditions that have existed during the term of theProject and an assessment by the Purchaser of themarket conditions at the relevant time. It is likelythat the date of purchase will vary from one block ofProject Land to another.It is a possibility that the whole or part of the woodgrown will be suitable for a higher value use suchas flooring. If this turns out to be the case then theGrowers and the Purchaser will decide together onthe best way to deal with the grown wood. It cannotbe predicted with any accuracy whether (and, if so,to what extent) it would be wise or necessary toallow a longer rotation in order to take advantage ofthe higher value. This PDS ignores completely thepossibility of a use with a higher value than aswoodchips.All net income on the sale of a Grower's interest inthe Plantations (plus any carbon and environmentalcredits) will be paid progressively to the Custodianfor distribution to each Grower. The proceeds fromthe sale of the wood will be pooled and the netproceeds distributed to Growers on a pro ratabasis, i.e. in the same proportion that the number ofhectares held by each Grower bears to the total ofall hectares comprising the Project.If unforeseen expenses in relation to things such asfertiliser and/or insect issues arise, a meeting of allGrowers may be convened. The Growers may, bymajority vote, agree to meet such expenses, inwhich case these expenses will be borne betweenall the Growers in proportion to the number ofhectares held in the Project by each Grower.It is the intention of the Responsible Entity toterminate the Project upon the distribution of the

proceeds from the first Harvesting of thePlantations. The Project may continue for theperiod ending up to 15 years after the date of thelast acceptance by the Responsible Entity of anApplication from an intending Grower unlessotherwise determined by the Responsible Entity orthe Growers.Joint Growers:Benefits:Two applicants may participate in the Project asJoint Growers. Under this arrangement, both JointGrowers enter into each of the Project Agreements(including a Sub-lease and/or agreement to Sublease).The first Joint Grower is responsible for allthe fees payable in respect of all activitiesassociated with the Establishment of the Plantation.The second Joint Grower is responsible for thepayment of all rent, tending and insurance fees.The Joint Growers will each be entitled to 50% ofthe proceeds of sale of the timber from theirPlantation.Each Joint Grower will be responsible for 50% of allHarvesting, transportation and supervision costsand incentive fees payable out of the proceeds ofthe sale of the timber.Throughout this Product Disclosure Statement, anyreference to a Grower includes a reference to JointGrowers.Benefits of the Project include:(a)(b)(c)(d)The soil characteristics and rainfallconditions of the Project Land hasindependently been assessed as being ofsuperior quality for Blue Gum plantations.The Project Manager has selected improvedseedlings which analysis indicates can beexpected to produce in the vicinity of over20% more wood (in dry weight terms) thantrees grown from average native forest seed.WABG has negotiated a wood purchaseagreement with W.A. Chip & Pulp Co.,another company owned by MarubeniCorporation and Nippon Paper Industries Co.The Harvested timber will be sold to W.A.Chip & Pulp Co. at an agreed price providedthat, if WABG is able to negotiate a higherprice with a genuine third party, WABG willbe free to sell the timber to that third partyunless W.A. Chip & Pulp Co. matches theoffer.The Board of WABG includes directors withextensive forestry expertise and provenperformance in the management of BlueGum plantations. Two of the Directors haveover 25 years experience in the growing ofsoftwood and hardwood plantations. TheProject's principal Forestry Contractor,WACAP Treefarms, is owned by MarubeniCorporation, a Japanese company which isone of the world's leading trading housesand the largest customer for pulpwood fromWestern Australia since 1976, together withRisks:(e)(f)(g)(h)Nippon Paper Industries Co, one of Japan'slargest paper making companies. Inaddition, one of Australia's leading forestershas been engaged to assist in thesupervision of the Forestry Contractor.The Project Manager consults with and isadvised by leading forestry experts, employssound silvicultural and environmentalpractices and engages a leading forestrycompany to provide forestry services.The pooling of receipts from the sale of woodboth spreads the risk to each Grower and, atthe same time, results in a more significantmarket presence at the time of selling theWood.The possibility of significant financial gainsbefore and after income tax is taken intoaccount.Tax deductibility of the costs of the Project.The Project is long term and, accordingly,speculative in nature and is subject to the risks ofsuch an undertaking including (but not limited to):(a)(b)Market risks such as:(i)(ii)(iii)(iv)(v)changes in demand and price fortimber due to economic downturn,global and Australian competition andconsumer product requirements andpreferences;oversupply of timber products torelevant markets;changes in pulp technologies;distributor consolidation andrationalisation; andchanges in price for business inputssuch as labour and materials;Regulatory risks such as:(i)(ii)(iii)(iv)(v)(vi)obtaining all necessary governmentand regulatory approvals;access to infrastructure (eg power,irrigation, transport, water);changes in government andregulatory legislation andrequirements (e.g. taxation);changes in levies, duties and imposts;the withdrawal of Product Rulings thathave been applied for concerning thetaxation treatment for the Project bythe Australian Taxation Office orsubsequent non-compliance with theterms of the Product Ruling; andwithdrawal of this PDS or theResponsible Entity's AustralianFinancial Services licence by ASIC fornon-compliance with the Constitution,Compliance Plan and/or CorporationsAct or other regulatory provisions;

(c)(d)(e)Agricultural risks such as:(i)(ii)(iii)(iv)(v)(vi)(vii)(viii)(ix)(x)natural disasters, climatic variance,fire, windstorms, flooding and otheracts of God;insect and vermin infestations andagricultural diseases;quarantine restrictions and regulationsin Australia and globally;suitability of seedlings;suitability of forestry techniques;environmental impact and obligationsand regulations imposed by thegovernment and other bodies;accessing and adapting Harvestingand processing technology andtechnologies generally;regulatory approval;misinterpreting transportation andHarvesting requirements andlocations; andmisinterpreting soil, climatic, waterand other site conditions;Financial risks such as:(i)(ii)(iii)(iv)ability to achieve assumed yields andprices;price and cost movements;changes in the Australian exchangerate and foreign currency exchangerates; andinterest rate variations;Other risks such as:(i)(ii)(iii)(iv)(v)the solvency and cash flow position ofWABG and its associates,subcontractors and other relevantparties;default by WABG or its associates,subcontractors and other relevantparties under the materialagreements;loss of key staff;Uncontrolled Events; andthe Applicants' ability to pay theirannual contributions.The Project Manager has endeavoured to minimisethese risks as far as possible by arrangingparticularly appropriate sites for the Plantations andby engaging experts as prominent and independentas the Forestry Contractor and the forestryconsultant to provide the services mentioned inSections 2.5 to 2.7 of Part B of this PDSrespectively.Fees and Other Costs:Refer to Section 4 of Part B of this PDS.Growers contribute a minimum of $18,750(including GST) (being the amount necessary toEstablish 3 hectares of plantations at $6,250(including GST) per hectare and thereafter inmultiples of $6,250 (including GST) (for each extrahectare). There is no restriction on the maximuminitial contribution that a Grower may make.Taxation Information (General):Division 394 of the ITAA 1997 contains a specificdeduction provision for contributions to forestryschemes. In projects operating under thislegislation, there is no longer a requirement fortaxpayers to demonstrate that they are "carrying ona business" in order to access the deduction or thatthe amount paid is of a revenue nature. Division394 provides that initial investors in forestrymanaged investment schemes will receive a taxdeduction equal to 100% of their paid contributions(both initial and ongoing) and subsequent investorswill receive a tax deduction for their ongoingcontributions to forestry schemes, provided thatWABG will spend an amount equivalent in netpresent value terms, to at least 70% of the amountspaid by Growers on Establishing, tending andfelling trees for Harvesting ("70% DFE rule").In addition to the 70% DFE rule, there are alsoother requirements such as:(a)(b)(c)(d)the entity claiming the deduction must be aGrower in a forestry scheme whose purposeis Establishing and tending trees for fellingonly in Australia;a Grower must not have day-to-day controlover the operation of the scheme;the trees intended to be Established inaccordance with the scheme must beEstablished within 18 months of the end ofthe income year in which the first payment ismade by a Grower;the initial participant must hold an interest inthe Project for at least four years.Division 394 also contains some specific itemswhich are not eligible for inclusion in the 70% DFERule.Interest and borrowing costs paid by a Grower willnot be covered by Division 394 and should continueto be deductible under the relevant provisions of theITAA 1936 and the ITAA 1997 (eg, sections 8-1 and25-25 of the ITAA 1997, respectively), provided therelevant tests for those provisions are met.Where a Grower disposes of interests within 4years, any deduction obtained by that Growerunder Division 394 will be reversed in the incomeyears claimed.Where two Applicants apply as Joint Growers thefirst Joint Grower is likely to be entitled to adeduction for the cost of Establishing the Plantationi.e. the $6,250 (including GST) per hectare whichwill be paid pursuant to the Project Management

Contract and for interest on any borrowed fundsused to finance its contribution, when incurred. Thesecond Joint Grower is likely to be entitled todeductions for ongoing costs including annualtending, annual rent and insurance and for intereston any borrowed funds used to finance its ongoingcosts, when incurred.Under Division 394 WABG will have the followingobligations:(a)(b)if trees are not planted within 18 months ofthe end of the income year when theEstablishment Fee was paid by a Grower(i.e. 31 December 2014), within 3 monthsafter the end of that 18 month period, to givethe Commissioner of Taxation the statementrequired under Division 394 in relation toreasons why this condition was not satisfied;andto use its best endeavours to keep recordsfor the life of the Project plus 5 years.It is possible that there will be further changes intaxation or other legislation which may have apositive, or alternatively a negative, effect upon theProject.A Product Ruling for this Project has been issuedby the Australian Taxation Office and copies of theProduct Ruling are available free of charge from theProject Manager or from the Australian TaxationOffice (www.ato.gov.au).The Tax Laws Amendment (2009 Budget MeasuresNo. 2) Act 2009 (Cth) came into force in December2009. The intention of the Act (among other things)is to amend the 'non-commercial losses rules' inrelation to individuals with an 'adjusted' taxableincome of $250,000 or more. The non-commerciallosses rules will now not apply to individuals with anadjusted taxable income of $250,000 or more only ifthey can satisfy the Australian Tax Office, based onan objective expectation, that the business activitywill produce assessable income greater thanavailable deductions within a commercially viableperiod for the industry concerned. The AustralianTax Office has exercised a very similar discretion inits previous Product Rulings and the Product Rulingissued by the ATO for this Project continues toprovide this result.A Product Ruling issued by the Australian TaxationOffice is only a ruling on the application of taxationlaw and is in no way expressly or impliedly aguarantee or endorsement of the commercialviability of the Project, of the soundness orotherwise of the Project, or of the reasonablenessor commerciality of any fees charged in connectionwith the Project. Further, a Ruling is only bindingon the Commissioner if the Project is implementedin the specific manner provided in that ProductRuling.However, it is possible that the law may beamended at any time or that the interpretationthereof by the Courts may alter. If any deductionclaimed by a Grower is disallowed by theCommissioner of Taxation, penalties and interestmay be imposed.Growers will be liable to pay to WABG an amountequivalent to the whole of the GST liability (if any)of the Project Manager in respect of supplies madeto each Grower under the Project Agreements.However, provided that a Grower has an AustralianBusiness Number and receives a tax invoice inrelation to the payment, the Grower should be ableto obtain a credit or refund in relation to any GSTcomponent paid because the Grower is likely to becarrying on an "enterprise" within the meaning ofthe GST legislation.Growers should seek independent advice in relationto all taxation issues.Uncomplicated Finance:All participating Growers may borrow up to 80% ofthe Application Money from Albany Financial PtyLtd, a company associated with WABG. Amountsborrowed are to be repaid in monthly instalments byway of direct debit over the period ending on 15June 2018. Each instalment is of both principal andinterest. Interest is charged on the reducingprincipal at an indicative interest rate of 12.45% perannum (see Section 2.4 of Part B of this PDS).There is no loan establishment fee payable inrespect of this finance package.Growers will not be required to submit any financialinformation in order to obtain this finance. Nosecurity (other than a charge over the Grower'sinterest in the Project and the proceeds of sale ofwood) will be required.Dispute Resolution:The Constitution has an internal complaintshandling procedure requiring the Responsible Entityto provide written details of the procedure whichincludes endeavouring to provide a final responsein respect of a complaint within 45 days of receivingthe complaint. Section 9.1 of Part B of this PDSprovides a summary of the complaints handlingprocedure.If a Grower is not satisfied with the outcome of theinternal complaints handling procedure then thematter can be referred to the Responsible Entity'sexternal dispute resolution scheme, the FinancialOmbudsman Service Limited. The ResponsibleEntity is a member of that scheme.Ethical Considerations:The extent to which labour standards orenvironmental, social, or ethical considerationswere, are and will be considered by the ProjectManager in the selection, retention or realisation ofthe investment are:(a)Blue gum plantations offer significantenvironmental benefits including:(i)(ii)(iii)the mitigation of carbon dioxideemissions;the lowering of water tables toameliorate salinity;the improvement of soil structure anddrainage; and

(b)(c)(d)(e)(f)(g)(iv)Commissions:effective wildlife corridors for nativefauna.The Project Manager will have regard to theFair Work Act 2009 (Cth), industrial awardsand industry standards affecting itsemployees.The Project Manager has assumed that anysubcontractor will have regard to the FairWork Act 2009 (Cth), industrial awards andindustry standards affecting thesubcontractor's employees.The Project Manager will have regard to thedirections of the government bodies andother regulations affecting the Project Land.The Project Manager has chosen the southwestregion of Western Australia for itsclimate, soil and rainfall conditions. Most ofthe relevant local Councils have activelyencouraged the region as a centre offorestry expertise with excellentinfrastructure and a skilled labour forcesuitable to achieving the objectives of theProject.The Establishment of Plantations usuallyreduces the risk of fire. In most cases, BlueGum plantation fires spread far more slowlythan grass, crop or native bush fires underthe same conditions resulting in less areabeing burnt. The risk of damage by fire isfurther minimised by the Project Managerthrough its maintenance of access roadsand firebreaks and its procedures for earlyfire detection and suppression.The Project Manager is committed toproviding best practice forestry and toensuring compliance with the Code ofPractice for Timber Plantations in WesternAustralia and other relevant national andinternational industry standards.The Responsible Entity may pay commissions notexceeding 10% in total of the Application Fee toeligible intermediaries. This amount may be paidover a period of one or more years.Secondary Markets:Division 394 enables Growers to trade interests inforestry schemes through a secondary market.Under Division 394, deductibility of Growers'contributions will not be affected if Growers disposeof their interests in the Project prior to Harvest buthave held the interests in the Project for at least 4years from the end of the financial year in whichGrowers made a first payment.A market value pricing rule will apply for existinginterests in forestry schemes that are traded byGrowers.Growers should seek independent advice in relationto the taxation treatment of subsequent Growers inthe secondary market.Continuous Disclosure:The Responsible Entity will be subject to regularand continuous reporting and disclosure obligationsif interests in the Project are ED securities.Interests in the Project will be ED securities if 100or more people hold interests in the Project.No Cooling Off Period:Due to the nature of the Project there is no coolingoff period for Applicants.No Minimum Subscription for the Project:There is no minimum subscription required for theProject to commence.Application:Applications can only be made on the attachedApplication Form and are accepted by theResponsible Entity in its absolute discretion.Closing Date:The Responsible Entity will not accept Applicationsreceived after 30 June 2013.AFS Licence:ASIC:Refer to Section 6.3 of this PDS.ASIC takes no responsibility for the content of thisPDS.Further Information:Copies of this PDS and documents specified in thePDS or required by law may be obtained orinspected at such reasonable times as agreed bycontacting the Responsible Entity.Copies of the following documents lodged withASIC in relation to the Project may be obtained orinspected by contacting ASIC:(a)(b)the annual financial report; andif the interests are ED securities, any:(i)(ii)half-yearly financial report; andcontinuous disclosure notices.

ASIC BENCHMARKS AND DISCLOSUREPRINCIPLES1. INTRODUCTIONIn January 2012, ASIC issued Regulatory Guide232 Agribusiness managed investment schemes:Improving disclosures for retail investors. TheGuide is intended to provide Growers with a greaterunderstanding of agribusiness schemes and assistwith their investment decisions by setting out fiveBenchmarks and five Disclosure Principles whichmust be addressed by the Responsible Entity.The Guide requires the responsible entities to:(a)(b)disclose whether the scheme complies witheach of the 5 Benchmarks; andaddress the information contained in each ofthe 5 Disclosure Principles.The Guide also requires that the Responsible Entitymaintain a certain level of ongoing disclosure. Asdisclosed in 2.3 below, the Project Managerprovides ongoing annual reports to members.2. BENCHMARKSBenchmarkCompliance (Y/N)1. Fee Structures Yes2. Responsible entity or Yesrelated party ownership ofinterests in the agribusinessscheme3. Annual reporting to members Yes4. Experts Yes5. Appointing and monitoring Yesservice provides2.1 Benchmark 1: Fee StructuresStatus: SatisfiedThis benchmark requires schemes to be structuredsuch that fees are payable either annually or byway of an up-front payment on initial application.The benchmark also requires disclosure in relationto the scheme's fee structure as well as how feesare held and applied during the term of the schemeand how the responsible entity expects to fund theoperation of the scheme until completion.Growers are charged an initial application fee whichis paid entirely in advance. Growers are alsocharged, by the Project Manager, annual fees forrent, tending, insurance and maintenance which arepaid partly in advance and partly in arrears. TheResponsible Entity does not charge Growers aseparate Responsible Entity fee. Ongoing annualfees are not deferred nor paid out of harvestproceeds.The annual fee structure provides protection toGrowers and reduces the risk of failure or default byproviding funding to cover the anticipated expensesof the Project on an annual basis.For more detailed information regarding theProject's fee structure and breakdown, please referto Section 4 of Part B of this PDS.2.2 Benchmark 2: Responsible entity or relatedparty ownership of interests in the agribusinessschemeStatus: SatisfiedThis benchmark states that the responsible entityand its related parties should own less than 5% ofthe total interests in the scheme (except interestsacquired through defaulting members). Thisbenchmark aims to protect against the risks ofresponsible entity collapses in circumstances wherethe responsible entity is a major interest holder inthe scheme.The Responsible Entity and its related parties donot currently own any interests in the Project and itis the policy of the Responsible Entity that theResponsible Entity and its related parties shouldnot ever own more than 5% of the total interests inthe Project (except interests acquired throughdefaulting Growers).2.3 Benchmark 3: Annual reporting to membersStatus: SatisfiedThis benchmark provides that the responsible entityshould issue members with reports on theperformance of the scheme at least annually.Section 6.1 of Part B of this PDS outlines theResponsible Entity's approach to annual reporting.Annual reports will be provided to Growers no laterthan 30 November in each year, outlining anychanges to the Plantation Development andTending Plan, the actual operations performed onthe land, details regarding the health and vigour ofthe Plantations and any other matter which mayaffect the performance or viability of the Plantationstogether with any other information relevant toGrowers.In addition, a consulting forester will provide aseparate professional report at least annually, andat other times if necessary.The Responsible Entity also provides members withfinancial statements and auditor's reports for theProject on an annual basis. Further information inrelation to annual reporting is located at Section 6.1of Part B of this PDS.2.4 Benchmark 4: ExpertsStatus: SatisfiedThe Guide requires that where an expert's opinionis likely to be relied upon by retail investors, theexpert must be independent. Part 7 of this PDS isthe expert report provided by Mr. Don Spriggins, anindependent forestry expert.

In addition to disclosing the expert's opinion, thebenchmarks require a responsible entity to providedetails of its relationship with the expert. Thefollowing information is provided in relation to theResponsible Entity's relationship with Mr. Spriggins:(a)(b)(c)(d)(e)The expert was instructed to provide anopinion regarding the suitability andappropriateness of the Forestry Contractorand the land upon which the trees will begrown, and also regarding the prospects forthe Blue Gum industry.The expert has the following qualifications:(i)(ii)(iii)(iv)Diploma of Forestry;Bachelor of Science in Forestry;Fellow of the Institute of Foresters ofAustralia; andMember of the Association ofConsulting Foresters of Australia.The expert has over 40 years' experience inthe Australian forestry industry. Mr Sprigginswas closely involved with eucalypt plantingin the South West of Western Australia from1976 to 1994 and has provided services asan independent forestry consultant since1995 throughout which he has worked onmany projects involving blue gumplantations. Mr. Spriggins is wellexperienced in the silvicultural industry andparticularly so with Blue Gums within thisregion of Western Australia.Furthermore, whilst working in the ForestsDepartment of WA and later the Departmentof Conversation & Land Management theexpert was closely involved with themonitoring and regulations of sales fromvarious woodchip plantations.The Responsible Entity has engaged Mr.Spriggins to provide his expert opinion forthe Responsible Entity on a number ofprojects for over ten years.The only service provided by Mr. Spriggins tothe Responsible Entity is the preparation ofthe Independent Forestry Expert's Report.The expert estimates that 15% of his totalwork is for the Responsible Entity.The Responsible Entity does not require theexpert to take out Professional IndemnityInsurance. The expert no longer undertakessufficient work to justify paying professionalindemnity insurance premiums.2.5 Benchmark 5: Appointing and monitoringservice providersStatus: SatisfiedThis benchmark provides that the responsible entityonly engage key service providers necessary forthe operation of the scheme where theengagement is:(a)(b)(c)contained in a written agreement approvedby the board of the responsible entity inaccordance with a documented policy;subject to annual review against setperformance criteria; andsubject to certification by the board of theresponsible entity that it is on an arm'slength terms.The key terms of the Plantation ServicesAgreement are contained in Part 9.5(b) of this PDSand include all services in relation to eachPlantation in accordance with sound silviculturaland environmental practices adopted within theforestry industry. Specifically, the service provideris engaged for the Establishment of the Plantationand the tending of the Plantation.At the request of the service provider, the amountspayable under the Plantation Services Agreementare commercial in confidence.In accordance with the Responsible Entity'spolicies, the Board oversees the appointment of theservice provider upon recommendations providedto the Board by one of its directors. Beforeentering into any agreement with key serviceproviders, the Board certifies that the agreement isbeing entered into at arm's length. The serviceprovider's performance is then monitored by theBoard and it is assessed on an ongoing or at leastannual basis against agreed KPIs.3. DISCLOSURE PRINCIPLESThe Guide requires that in addition to meeting thefive Benchmarks outlined above, a responsibleentity disclose various matters including informationconcerning significant risks, interests and featuresof schemes. Below, the Responsible Entity hasprovided a summary of the information required bythe Guide's five Disclosure Principles. Thisinformation is supported by further detailsthroughout the PDS.3.1 Disclosure Principle 1: Investor financingarrangementsAlbany Financial Pty Ltd, a company associatedwith the Responsible Entity, is available to providefinance to Growers who wish to fund theirinvestment through borrowings.Two of the directors of the Responsible Entity, MrMay and Mr Gorr are directors of Albany FinancialPty Ltd and shareholders in the companies that areshareholders in Albany Financial Pty Ltd.The only amounts payable in relation to finance areprincipal and interest.Investors are recommended to obtain and read theLoan Agreement before entering into the financefacility. The Loan Agreement can be obtained fromthe Responsible Entity upon request or alternativelycan be downloaded fromhttp://www.wabluegum.com.au.

The finance facility is a full recourse loan. TheGrower will remain liable to repay amountsborrowed and interest accrued under the facilitywhatever the result of the Project. In the event ofdefault, recourse will be available against thepersonal assets of the borrower. Where theborrower is a company, a personal guarantee will berequired from its directors which will also be on a fullrecourse basis.Contained in Part 15 of this PDS is an Applicationfor Finance. This is not the Loan Agreement.Investors wishing to obtain finance from AlbanyFinancial Pty Ltd must complete this form as well asthe Power of Attorney contained in Part 14. Onceboth completed forms are received by theResponsible Entity, the attorney, being a director ofthe Responsible Entity, will enter into the LoanAgreement on behalf of the investors.3.2 Disclosure Principle 2: Track record of theResponsible Entity in operating agribusinessschemesAs disclosed below, the Responsible Entity hasoperated Blue Gum agribusiness schemes for morethan ten years. It has always outsourced the onsiteEstablishment, tending and Harvesting to the samecompanies which are the Forestry Contractor andthe Wood Purchaser in this Project (refer toSections 2.5 to 2.7 of Part B of this PDS).The Responsible Entity current operates four BlueGum agribusiness schemes, over a periodextending for more than ten years. Pastperformance is no guide to future performance.No agribusiness scheme has been completed.3.3 Disclosure Principle 3: Responsible Entity'sfinancial positionThe Responsible Entity does not have any knownunfunded obligations in respect of the Project.The Responsible Entity is not reliant on funding fromexternal or related parties to perform its functionsand obligations in respect of the Project.The Responsible Entity is not part of any taxconsolidated group.The Responsible Entity has not provided anyguarantees or indemnities to external or relatedparties.3.4 Disclosure Principle 4: Land, licences and waterThe Project Land used for growing is leased fromvarious farmers or alternatively, sub-leased fromW.A. Chip & Pulp Co. or WACAP Treefarms. In allinstances, the head lease between the ProjectManager and the farmer, or alternatively, the subleasebetween the Project Manager and W.A. Chip& Pulp Co. or WACAP Treefarms is to be registeredwith Landgate, the Western Australian titles office,thereby protecting the Project Manager's andultimately the Grower's interest in the Project Land.While the head leases or alternatively sub-leasesreferred to in this section could arguably beterminated in limited circumstances, it is the opinionof the Board that the respective terms of theseagreements contain sufficient rights to provide forthe protection of the Project Manager's accessrights for the life of the Project.All leases and subleases are entered into at arm'slength with third parties.In the event that the amounts due under theseleases or subleases are not paid, the landlords ofthe relevant parcels of land may take action,including exercising their rights of forfeiture toterminate the leases (or subleases). As mentionedabove, all leases and subleases will be registeredat Landgate which action will provide protection toGrowers.The Responsible Entity does not treat the leasesas scheme property nor does it not use any of theleases as security.No other agreements have been entered into inrelation to rights of access or tenure to water orany other resources or infrastructure required tooperate the Project.3.5 Disclosure Principle 5: Replacement of theresponsible entityIn the event that the Responsible Entity isreplaced, there are no restrictions on the ability ofany replacement responsible entity to access theresources required to continue the Project.Pursuant to Chapter 5C of the Corporations Act therights and obligations under the relevant contractswould be novated to the replacement responsibleentity such that any document to which the originalResponsible Entity was a party should be readafter replacement as if the replacementresponsible entity were a party to it.Upon replacement:(a)(b)(c)the outgoing Responsible Entity would notbe entitled to any compensation by way of a'replacement fee' or related payment;in the opinion of the Responsible Entitythere would be no detrimental effect on anyagreements entered into between theinvestors and the Responsible Entity orother parties (due to the novation of allcontracts as mentioned above); andany annual fees already paid will not need tobe paid again.The Responsible Entity does not believe that therewill be any risks relating to the continuity of theProject arising out of a change in responsibleentity.

This PDS relates to the offer of Interests in the registered managed investment scheme known as the W.A. Blue GumProject 2013 ARSN 164 105 579. Applications for Interests can only be made on the Application Form attached to oraccompanying this PDS.This PDS does not constitute an offer or invitation in any jurisdiction or to any person where, or to whom, it would beunlawful to make an offer or invitation. Persons who come into possession of this PDS should seek advice on andobserve any restrictions on accepting an offer or distributing this PDS. Any failure to comply might constitute a violationof applicable securities laws. While a foreign applicant is entitled to invest in the Project, an Application may need to bemade to the Foreign Investment Review Board for approval.This is an important document and you should read it carefully. In particular you should consider the risk factors set outin Part A of this PDS that could affect the performance of the Project. You should carefully consider these factors in lightof your personal circumstances (including your financial and taxation circumstances). You may wish to consult yourstockbroker, accountant, independent financial advisor or lawyer.No person guarantees the success of the Project nor any particular financial outcome from participation in the Project northe taxation consequences of participating in the Project.Some words in this PDS have defined meanings. The definitions appear in the glossary in Section 11 except those thatappear in Section 9 (Principal Agreements) which are defined by reference to the particular agreement. Financialamounts are in Australian Dollars unless otherwise specified.Photographs used in this PDS are for illustrative purposes only. They do not represent the proposed Project.This PDS does not constitute an offer in any jurisdiction other than Australia.

The particular attractive features of the Project are asfollows:2.1 Quality of the LandGrowers will sub-lease from the Project Managerland situated in the south-west of Western Australiain areas which have both high rainfall, deep fertilesoils and close proximity to ports (within a radius ofapproximately 100 kilometres). The sites havebeen selected based on their suitability for use asplantations for Blue Gum.Sites with such close proximity to ports, higherrainfall and deep, fertile soils are rare and hard tocome by, which means that the Project will ofnecessity be conducted on a small and "boutique"basis.As the plantings of Blue Gums in Australiaexpanded, it was noted that it became necessaryfor many companies to establish and plant in moremarginal land. The Project Manager steadfastlyrefused to follow this trend, as to do so is entirelyinconsistent with its policy of maximising eachGrower's ultimate returns.The Project Manager uses rigorous site selectiontechniques and protocols to identify land ofexceptionally high quality. The small scale ofoperations has the advantage of enabling theProject Manager to select sites which may nototherwise have been considered by largercompanies, offering a competitive advantage in siteacquisition.The land offered to be sub-let to Growers has ananticipated yield of wood that is much higher than isusually found in projects offered for publicsubscription. The land is targeted to have aweighted average MAI of approximately 34 cubicmetres per hectare per annum using certainassumptions. Whether this will be achieved issubject to a number of factors including soil type,rainfall and any climatic changes between the timeof Establishment and Harvesting.There is a direct correlation between the MAI ofland and the anticipated returns to Growers. Landwhich has an MAI which is say, 33% higher thanother land, will be likely to yield to a Grower a grossreturn at the end of the Project 33% greater thanthe other block of land and an even larger netreturn, especially when it is appreciated that manyof the expenses are fixed rather than variable andthat Harvesting costs are usually cheaper per unitof wood on higher productivity sites.In order to treat all Growers equitably, the proceedsof the Harvest will be pooled between all Growersparticipating in this Project in proportion to the sizeof the respective subscriptions.2.2 Forward Sale of all the WoodThe Harvested timber will be sold to W.A. Chip &Pulp Co. (jointly owned by the MarubeniCorporation and the Nippon Paper Industries Co)but allowing WABG to negotiate with any otherpotential buyers for a higher price. W.A. Chip &Pulp Co. then has the right to match these betterterms, in which case W.A. Chip & Pulp Co. will bethe buyer. The market for Blue Gum is usuallycompetitive and there does not appear to be anyreason why this will change at the time of Harvest.2.3 Improved SeedlingsAn analysis of nearly 70,000 trees grown from seedcollected throughout a range of Blue Gum treeshas shown that significant gains can be made bygrowing trees from seeds collected from the bestnative forest locations. Trees grown from seedscollected in the best five native forest locations canbe expected to produce up to over 20% more wood(in dry weight terms) than trees grown from theaverage native forest seeds.The Project Manager has made arrangements forWACAP Treefarms to supply the Project entirelywith high quality seedling stock (scientificallyimproved but not genetically modified) beingproduced by WACAP Treefarms which are readyfor planting in 2013.2.4 Uncomplicated FinanceAll participating Growers may borrow up to 80% ofthe Application Money (including GST) from AlbanyFinancial Pty Ltd, a company associated with theResponsible Entity. Amounts borrowed are to berepaid in equal monthly instalments (which includeboth principal and interest) by way of direct debitover the period ending on 15 June 2018. Eachinstalment is of both principal and interest. Interestis charged on the reducing principal at an indicativefixed rate of 12.45% per annum. There is no loanestablishment fee payable in respect of this financepackage. Growers will not be required to submitany financial information in order to obtain thisfinance. No security (other than a charge of theGrower's interest in the Project and the proceeds ofsale of wood) will be required. Albany Financial PtyLtd is entitled to pass on to a Grower theappropriate merchant's fee on the use of a creditcard.Growers will not be required to submit any financialinformation in order to obtain this finance. Nosecurity (other than a charge over the Grower'sinterest in the Project and the proceeds of sale ofwood) will be required.The outstanding principal may be repaid earlier atany time without penalty.

2.5 Experienced Forestry ConsultantA forestry consultant with very extensive experiencein the growing of Tasmanian Blue Gum has beenengaged to provide independent and professionaladvice to the Project Manager on an ongoing basis,including advice on the management of theplantations and marketing of the timber.2.6 Experienced and Cutting Edge OperationsWACAP Treefarms has been engaged to supplyand to plant the Blue Gum seedlings and tend thePlantations. Under the terms of the WoodPurchase Agreement (refer to Section 9.6), W.A.Chip & Pulp Co. will Harvest and buy all the woodunless WABG can negotiate better terms with areputable third party.WACAP Treefarms has been growing hardwoodplantations in Western Australia since the late1980's and currently owns or manages in that stateand in the Green Triangle region of Victoria andSouth Australia about 40,000 hectares of globulusplantations. It has established approximately60,000 hectares.WAPRES is a leader in the Western Australianplantation and wood chip export industry. WAPRESis certified to Australian Forestry Standard AS 4708and International Standard ISO 14001:Environmental Management Systems. On 1 March2011 WAPRES was granted Forestry StewardshipCouncil (FSC) certification for Chain-of-Custody(CoC) and Controlled Wood (CW), demonstratingits compliance with the highest social andenvironmental standards. WAPRES forestry staffalso use state of the art procedures developedthrough its membership of the Industry PestManagement Group. The Project is able to take thefull commercial advantage of the certifications.2.7 Involvement of Marubeni Corporation andNippon Paper Industries CoWACAP Treefarms and W.A. Chip & Pulp Co. areboth owed by the Marubeni Corporation and NipponPaper Industries Co. These companies, throughtheir holding company, WAPRES, own and managetree plantations in Western Australia on a largescale and, in the opinion of the Board, are industryleaders in plantation establishment andmanagement, log Harvesting and woodchipping.Marubeni Corporation and Nippon Paper IndustriesCo have not been involved in the preparation of thisPDS. They are independent parties (see alsoSection 10.3).2.8 Carbon and Environmental Credits and DebitsCarbon credits are recognised reductions orabsorptions of carbon. Credits need to be certified.Over time, companies or individuals who createmore certificates than they need can sell these toothers who need to reduce their greenhouse gasemissions. From 1 July 2012 a carbon pricingmechanism has been implemented in Australiafollowing on from the introduction of the CleanEnergy Act 2011 (Cth). For the financial yearsbeginning 1 July 2012, 2013 and 2014 carboncredits will have a fixed price and from 2015 theprice will convert to a floating price scheme. Inaddition to the Clean Energy Act 2011 it is alsopossible that other environmental credits (e.g.salinity) will also be established. The Boardbelieves that tree growing is the only carbonpositive sector in the Australian economy. Ifcarbon or other environmental credits are able tobe attached to the trees to be grown in this Projectthey may have significant value. However, despitethe introduction of a legislated carbon tradingscheme, it is unlikely to benefit Growers under theProject because the various tests contained in thelegislation are unlikely to be met. Nonetheless, tothe extent permitted by law, all carbon and otherenvironmental credits will be treated the same asthe revenue from the sale of the wood and willbelong to the Growers in the Project. If any carbonor other environmental debits accrue in thecarrying out of the Project they will be deductedfrom the revenue otherwise payable to Growers.Blue Gum plantations provide a range ofenvironmental benefits including the capture ofcarbon dioxide, reduction of salinity, soil protection,and improved biodiversity.About 50 per cent of a tree's dry weight is carbon.If a plantation is established on land which hasalready been cleared, the growth of the treesdramatically increases the total amount of carbonstored on the land. It is estimated that planting100,000 hectares of new trees can removeapproximately one million tonnes of carbon peryear from the atmosphere.In addition, the Harvesting of plantations canfurther contribute to greenhouse gas reduction ifsome of the wood is used to generate electricityand replaces fossil fuels like coal, oil or natural gasfor this purpose. When trees are used for woodproducts, carbon continues to be stored in thisform for a very long period. The amount of carboncaptured by trees is estimated from the volume ofthe trees, calculated from the heights anddiameters. For example, a fast-growing eucalyptplantation averaging a stem growth rate of 20cubic metres of wood per hectare may yield 500kgof dry wood per cubic metre, which equates to 10tonnes per hectare and contains 50 per centcarbon, i.e. 5 tonnes per hectare of carbon in oneyear.Australia's forest industry currently stores over 20million tonnes of carbon dioxide equivalent to over1 million hectares of Kyoto compliant plantationforests.Furthermore, plantations can improve the salinequality of the water in the areas in which theygrow. It is not clear whether salinity credits will beestablished, and, if so, what their value might be.

3.1 Attributes of the SpeciesBlue Gum has an international reputation as one ofthe best species for paper production due to itsshort, narrow fibres, high strength and low chemicalrequirements for bleaching because of its lightcolouring.As Blue Gum has a shorter Harvest time(approximately 10 years) and a pulp yield verymuch higher than wood fibre from native mixed-ageand mixed-species, plantation grown Blue Gumattracts a premium price.3.2 Environmentally BeneficialAs well as providing excellent market prospects,participation in a Blue Gum plantation also hasmany local environmental benefits. Also, theestablishment of hardwood plantations in Australiareduces the harvesting pressure on native foreststhroughout the world, particularly on the tropicalforests of Asia and the South Pacific.The rapid growth of hardwood plantations requiresthe trees to fix large amounts of carbon from carbondioxide, contributing to the reduction of thisgreenhouse gas in the atmosphere. Blue Gumplantations will also serve to slow or reverse theeffects of salination in the agricultural areas ofWestern Australia. The replacement of pasture withplantations returns the water usage pattern closerto that of native forests which can alleviatesalination problems downstream from the plantationand prevent salination within the plantation itself.It has been estimated that in about ten years (whichis the around the time that the Harvesting of thetrees grown in the Project is likely to take place)that over 75% of hardwood woodchips in Australiawill be derived from plantations rather than nativeforest. There has been a sharp decrease in theamount of native forest available in Australia forwood production, with a fall in excess of 30% inrespect of the 11 years to 2008.3.3 Growing DemandThe growing of Blue Gum plantations in WesternAustralia has resulted from the increasing demandfor pulp and paper products worldwide. There is anincreasing gap between world demand and supplyof wood fibre. Asia is the largest fibre deficit regionin the world. Asia is also the main focus for growthin fibre demand for pulp and paper.Continued reliance on paper and paper products bydeveloped countries and the increasedconsumption of these products by developingcountries is leading to an increase in demand forthe raw materials required for paper production.Hardwood fibre, extracted from Blue Gum, is apreferred raw material for the production of highquality paper. In fact, most mills require that some,if not all, of their timber input be hardwood fibre.The increase in demand for hardwood fibre must beviewed in conjunction with the growing awarenessof the importance of preservation of native foreststhroughout the world, including Australia.3.4 Growing ReturnsIn addition to the suitability of the species for paperproduction, good returns to the Subscriber arepossible due to the high growth rates achievable inthe sites selected for the Project in the south-westof Western Australia. Such sites are virtually notavailable in other states or in other parts of WesternAustralia. In fact, such sites are extremely hard toobtain even in the south-west of Western Australia.The plantations to be Established are expected tobe amongst the fastest growing in Australia.Growth rates are maximised by the implementationof silvicultural techniques (especially in relation tothe optional use of fertiliser) which have beendeveloped over more than a decade of researchand development and by using geneticallyimproved seedlings that have been especiallyselected.Given the number of variables involved, it is notpossible to forecast future cashflows and returns toGrowers with any certainty. Anticipated events maynot occur exactly as expected or unforeseencircumstances may arise which are outside thecontrol of the Responsible Entity. As a result, theResponsible Entity has elected not to provideforecast returns for the Project.Other risks and factors as set out on pages 9 to 10of this PDS may also affect a Grower's return. It isrecommended that professional advice be obtainedwhen considering the possible Project returns andto assist in determining whether the participation inthe Project is suitable to you.

3.5 International MarketsIn 2008 a most substantial increase in Blue Gumwoodchip price was negotiated between Australiansuppliers and Japanese buyers which led to a verylarge increase in the net royalty payable to growersof Blue Gum trees in Australia. Notwithstanding theglobal financial crisis, the same price wasmaintained throughout 2009, 2010 and 2011 but fellin 2012. The Board believes that there is reasonfor optimism regarding future increases by the timethe trees in the Project are Harvested.The suitability of plantations of Blue Gum inWestern Australia for supplying the internationalmarket is evidenced by the interest shown by anumber of major Asian trading houses and papercompanies in establishing plantations to securetheir supplies. Over 250,000 hectares of Blue Gumplantations have already been established inWestern Australia by a variety of companies,thereby providing a platform for this industry.Western Australia has more Blue Gum plantationsthan any other State.Growers' wood will be sold either for manufactureinto woodchips for sale to pulp and papercompanies or for a higher value use. The MarubeniGroup and Nippon Paper Industries Co aresignificant importers and users of Australianhardwood chips from plantations (to an everincreasing extent) and native forest (to an everdecreasing extent). A number of sources suggestthat hardwood woodchip prices will remain stable inreal terms over the short term.Not only is Australia in a good geographical positionto supply hardwood woodchip to the Asian market,because competitors for the Asian market arefurther away from Asia than Australia and thereforesuffer the cost of extra transport to the Asianmarket, Western Australia is closer to Asia thanother parts of Australia where Blue Gum is growncommercially. Demand in the Asian market isexpected to grow strongly in the medium term andthe Board predicts a large shortfall in that market byabout 2020.In 2002, China imported hardwood chips fromAustralia for the first time. As the result of a loggingban now operating in China, domestic hardwoodchips supplies remain limited and it is expected thatthere will be a growing market in that country.China's hardwood chip imports have risen by 63%between 2010 and 2012. Paper production inChina has trebled since 1990 and the Chinesemarket has now surpassed Japan as the secondlargest paper making country in the world inabsolute terms.Hence, it is expected that the continuing growth anddevelopment of China will have massiveimplications for world trade and forest productstrade in particular. This suggests a likely new majorexport market for Australian woodchips.China is installing many very large pulp and papermaking mills which contain the most cutting edgetechnology. In order to best exploit the potentialefficiency of these mills they require the highestquality fibre inputs, particularly Blue Gum which willreplace inferior species which make up the bulk ofChina's imports to date.Japan is one of the world's major markets forwoodchips and Australia is its principal supplier.Japan uses hardwood woodchip imported fromAustralia for the production of writing and printingpaper. Over the past few years there has been adownward trend in the volume of woodchip exportsfrom the United States to Japan as they areconsumed domestically. Also, significantenvironmental pressure due to current UnitedStates harvests being almost exclusively fromnative forests has resulted in reduced productionvolumes.Over recent years Australia's major competition intothe Asian import market has been from Chile andSouth Africa, and in the last couple of years fromVietnam and Thailand. The quality of the chipsfrom Vietnam and Thailand is (for paper makingpurposes) of inferior quality as compared toEucalyptus globulus. It appears that supply fromboth Chile and South Africa into Japan is likely tofall. Chile now has new and large milling facilitiesat home and will continue to use more of its treefibre for domestic production of paper for ultimatesale into North America. South Africa has areduced supply because of water and otherlimitations. In addition, the cost of shipping the fibrefrom Australia to China is significantly less than it isfrom Chile and South Africa. This is because theaverage shipping time from Australia to China isabout 15 days, whereas from Chile it is around 30days and South Africa, around 25 days.It is suggested that Japan's dependence onimported woodchips may result in its willingness topay higher premiums on the supply of woodchipsas plantation grown Eucalypts from South Americaand South Africa are consumed domestically ormarketed to North America.It is predicted that there is sound prospect forhardwood woodchip demands in Asia, and Australiacan look forward to growth in emerging marketssuch as China and re-emerging demand fromJapan.Indonesia is also a potential market given the largeincrease in its milling capacity in recent years whichmay not be able to be supplied by local resources.There is a shortfall of wood fibre in Indonesia,which has opened the market for Australia andother exporters of wood fibre in Asia. There is alsocurrent discussion about the possibility of the Indianeconomy starting to emerge.

The domestic market prospects for hardwoodplantations in Western Australia are enhanced bythe possible development of a future domestic pulpand paper industry based on the plantations. Thereare good export facilities at the Bunbury port thathave been used for over 25 years. Additionally,export facilities at the Albany port commencedoperation in March 2002. The land in this Projectwill be situated within a commercially viabledistance from one or the other of these ports.Given Australia's increasing hardwood plantationsupply volumes, its expanding distribution abilitiesand close proximity to Asia, Australia is wellpositioned to have continued success in thehardwood woodchip market.3.6 Diversification of Asset ClassesWell-managed agribusiness ventures are businessopportunities outside of the traditional assetclasses. They do not normally follow the cycles inthe property and share markets. Accordingly, theymay be suitable for people who want to diversifytheir portfolio.3.7 Government SupportThe Division 394 legislation regarding taxation offorestry was introduced for the exclusive purposeof encouraging further plantation growth in orderto reduce reliance on both native forests andoverseas imports (see Part A: General TaxationInformation).3.8 Employment OpportunitiesBlue Gum projects are generally supported by thecommunities in which they are grown as theyencourage employment and regional growth.According to the Bureau of Rural Sciences, "thepresence of processing facilities in regional areascan help to reduce or prevent population declineby providing an alternative source ofemployment". The study also shows that overtime new businesses are established in theregions to provide goods and services to thegrowing plantation sector.

This Section details the fees and other costs payable by a Grower. However, to fully understand these matters youshould read the whole PDS before deciding whether to participate.CONSUMER ADVISORY WARNINGBy law, prior to setting out the fees and other costs for the Project, we are obliged to provide you with the followingConsumer Advisory Warning, which applies generally to managed funds investment products such as equity funds,insurance and superannuation products. The warning below refers to your "fund balance", however there is noconcept of "your fund balance" in the Project, nor is the duration of the Project a 30 year period, nor are there anyfees or costs in the Project that are able to be negotiated.DID YOU KNOW?Small differences in both investment performance and fees and costs can have a substantial impact on your longterm returns.For example, total annual fees and costs of 2% of your fund balance, rather than 1%, could reduce your final returnby 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 memberservices justify higher fees and costs.You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the fundor your financial adviser.TO FIND OUT MOREIf you would like to find out more, or see the impact of the fees based on your own circumstances, the AustralianSecurities and Investments Commission (ASIC) website (www.fido.asic.gov.au) has a managed investment feecalculator to help you check out different fee options.This information is required by Australian law.INTRODUCTIONThis document shows fees and other costs in respect of each hectare that you may be charged if you wish to participateas a Grower. These fees and costs may be paid from your money.Taxes and insurance costs are set out in another part of this document.You should read all the information about fees and costs because it is important to understand their impact on yoursubscription.Table 1 identifies the types of fees and other costs, whether they are fixed or variable and, where applicable, explains themethod of calculation.Table 2 apportions the fees and other costs between Joint Growers.Table 3 gives an example of how the fees and other costs charged on participation can affect your return. The fees andcosts are payable by Growers. You should use this table to compare this product with other similar agribusinessmanaged investment products.

24 W.A. BLUE GUM PROJECT 2013TABLE 1 - FEES AND OTHER COSTS (PER HECTARE - MINIMUM 3 HECTARES)TYPE OF FEE OR COST AMOUNT (PER HECTARE) HOW AND WHEN PAIDFees when your money moves into the ProjectFinancial Year 1(Until 30 June2013)Financial Year 2(1 July 2013 to30 June 2014)SubsequentFinancialYears2Establishment feeThis is the fee for services associatedwith the Establishment of the Plantation$6,250(including GST)Nil Nil Included in Application Moneywhich is payable on ApplicationContribution feeThe fee on each amount contributedto your investmentN/AN/A N/A N/AWithdrawal feeThe fee on each amount you takeout of your investmentN/AN/ATermination feeThe fee to close your investmentN/AN/AManagement Costs -The fees and costs for managingyour investmentFinancial Year 1(Until 30 June2013)Financial Year 2(1 July 2013 to30 June 2014)SubsequentFinancialYears3Tending feeThis is the annual fee payable tomanage the PlantationNil$121 (including1GST) Indexedfrom 30 June 2013Amount payablein previous Financial2Year IndexedPayable on 30 November 2013 andthereafter on 30 September in eachyear from the Grower’s own money4Rental feeThis is the annual fee payable forrental of the leased landNil$462 (including1GST) Indexedfrom 30 June 2013Amount payablein previous Financial1Year IndexedPayable on 30 November 2013 andthereafter on 30 September in eachyear from the Grower’s own money5Insurance feeThis is the annual fee payable toinsure the Plantation against fireNilApproximately 0.7%of the5insured valueRefer to Financial Year2 (previous column)Payable on 15 November 2013 andthereafter on 15 November in eachyear from the Grower’s own moneyHarvesting, Transportation &6Supervision feesThese costs are the actual costsincurred by the Project Manager forHarvesting, transportation andsupervisory activitiesNilNilThe precise amountswill be determined atthe time of Harvest. A3.3% (including GST)Harvest supervisionfee is payable to W.A.Chip & Pulp Co.These fees will be paid by theGrower to the Project Manager. TheProject Manager has discretion todeduct these fees from theproceeds of sale of the timber priorto making any distributions to theGrower7Incentive feeThis is a fee payable to the ProjectManager for achieving higher than anominated returnNilNil15% of the amount bywhich the netproceeds from thesale of the timberexceeds the sum of$18,000 (includingGST) per hectare1(Indexed from 30June 2012)These fees will be paid by theGrower by way of deduction fromthe net proceeds from the sale ofthe timber prior to making anydistributions to the Grower8Credit (or similar) Card Merchant FeeIn any case where an amount is paidby credit or similar card, there shall beadded the appropriate merchants feecharge on the use of the cardThis fee is paid by a Grower who uses a credit or similar card to pay fees under the Project9Unforseen ExpensesThis is a fee for unforseen expensesincurred by the Project Manager e.g.in relation to fertiliser and/or insectissuesNilRefer to “How andWhen Paid”Refer to “How andWhen Paid”This fee can only be imposed ifGrowers vote to meet such expensesat a meeting of all Growers convenedby the Project ManagerThis fee is payable from the Grower’sown money upon the issue of aninvoice by the Project ManagerServices feesFinancial Year 1(Until 30 June2013)Financial Year 2(1 July 2013 to30 June 2014)SubsequentFinancialYearsInvestment switching feeThe fee for changing investment optionsN/AN/ATransfer of InterestThe cost of transferring or assigning aninterest in the Project to a different entityThe Responsible Entity will charge an administration fee of$400 (including GST) to process a transfer of a Grower’sinterest in the Project to another entity in a secondary marketThis fee is payable from the Grower’sown money upon the issue of aninvoice by the Responsible Entity

ADDITIONAL EXPLANATION OF FEES AND COSTS1. IndexationIndexed means adjusted by the percentage changein the Consumer Price Index (All Groups, Perth)most recently published by the Australian Bureau ofStatistics for the previous 12 months or if theConsumer Price Index is no longer published, suchother replacement or substitute as is used by theAustralian Bureau of Statistics as the measure ofinflation in Australia.2. Establishment FeeGrowers contribute a minimum of $18,750(including GST) (being the amount necessary toEstablish 3 hectares of plantations at $6,250(including GST) and thereafter in multiples of$6,250 (including GST) per hectare). There is norestriction on the maximum initial contribution that aGrower may make.It is expected that an average of about 950 treeswill be planted on each hectare of plantable land.The number of trees is determined by the soil,rainfall and other characteristics of each individualblock.3. Tending FeeGrowers will be charged an annual tending fee of$121 (including GST) per hectare to manage thePlantation. The annual tending fee is indexed from30 June 2013, with the first payment on 30November 2013 and thereafter on 30 September ineach year from the Grower's own money.4. Rental FeeGrowers will be charged an annual rental fee of$462 (including GST) per hectare for rental ofleased land. The rental fee is indexed from 30 June2013, with the first payment on 30 November 2013and thereafter on 30 September in each year fromthe Grower's own money.5. Insurance FeeGrowers will be charged an insurance fee ofapproximately 0.7% (including GST) of the insuredvalue together with a fee equivalent to 10% of thepremium for the Project Manager's service toarrange such insurance for the Plantation. TheProject Manager will use its best endeavours toarrange such insurance at the best price. Theinsurance fee is payable on 15 November 2013 andthereafter on 15 November in each year from theGrower's own money.6. Harvesting, Transportation & Supervision FeeGrowers will be charged Harvesting, transportation& supervision fees for Harvesting, transportationand supervisory activities. A 3.3% (including GST)Harvest supervision fee is payable to WA Chip &Pulp Co. There is a discretion to deduct these feesfrom the proceeds of the sale of the timber prior tomaking any distributions to the Growers.7. Incentive FeeGrowers will be charged incentive fee for achievinghigher than a nominated return. The incentive feeis 15% of the amount by which the net proceedsfrom the sale of timber exceeds the sum of $18,000(including GST) per hectare, indexed from 30 June2013. The Grower will pay these fees by way ofdeduction from the proceeds of sale of the timberprior to making any distributions to the Grower.8. Credit (or similar) Card Merchants FeeIn any case where an amount is paid by a Growerusing a credit or similar card, there shall be addedthe appropriate merchants fee charge on the use ofthe card.9. Unforseen ExpensesThis is a fee for unforseen expenses incurred by theProject Manager (eg. in relation to fertiliser and/orinsect issues). This fee can only be imposed ifGrowers vote to meet such expenses at a meetingof all Growers. This fee is payable from theGrower's own money upon the issue of an invoiceby the Project Manager.

TABLE 2 - JOINT GROWERS: APPORTIONMENT OF FEES AND OTHER COSTS (PER HECTARE)JointGrowersTwo applicants may participate in the Project as Joint Growers. Under this arrangement, both JointGrowers enter into each of the Project Agreements (including Sub-lease and/or agreement to Sublease).The first Joint Grower is responsible for all the fees payable in respect of all activities associatedwith the Establishment of the Plantation. The second Joint Grower is responsible for the payment of allrent, tending and insurance fees. The Joint Growers will each be entitled to 50% of the proceeds ofsale of the timber from their Plantation.Directors' GuaranteeThe first Joint Grower is required to pay the Establishment Fee i.e. a minimum of $18,750 (includingGST) (being the amount necessary to Establish 3 hectares of plantations at $6,250 (including GST) andthereafter in multiples of $6,250 (including GST) (equivalent to 1 hectare). The Second Joint Grower isrequired to pay both an annual sum for rental of the leased property and fees for the ongoing tendingand insurance of the Plantations. The first annual sum for rental will be $462 (including GST) perhectare (Indexed from 30 June 2013) and is payable on 30 November 2013. The first annual sum fortending will be $121 (including GST) per hectare (Indexed from 30 June 2013) and will be payable on30 November 2013. Subsequent amounts for both rental and plantation tending will be Indexed in eachsubsequent year to take account of inflation.Each Joint Grower will be responsible for 50% of all Harvesting, transportation and supervision costsand incentive fees payable out of the proceeds of the sale of the timber.Throughout this Product Disclosure Statement, any reference to a Grower includes a reference to JointGrowers.Where the Grower is a corporation, one or more of the directors of that corporation may be required to provide aGuarantee and Indemnity in respect of the Grower's obligations under the Project Agreements.TaxationFor information about taxation and deductions, including the treatment of GST, you should read the section titled"General Taxation Information" on pages 10 to 11 of the PDS.CommissionsFor information about commissions, you should read the section titled "Commissions" on page 12 of the PDS.TABLE 3 - PRESCRIBED EXAMPLE OF ANNUAL FEES AND OTHER COSTS (PER ANNUM)This table gives an example of how the fees and other costs charged on participation in the Project can affect a Grower'sreturn. The table is based on the Project not offering a 'balanced investment option' (as defined in the Corporations Act).This table should be used to compare this product with other similar agribusiness managed investment products.In accordance with the requirements of the Corporations Act, this table is based on a $50,000 subscription. However itshould be noted that fractions of a hectare are not issued and it is not possible to make an application for hectares ofplantations where the application amount totals exactly $50,000.Please note that amounts in the table are for illustrative purposes and have been subject to rounding. All amounts in thetable are inclusive of GST.GROWEREXAMPLE - cost of fund in the financial year ending 30June 2013 for a Grower who holds 8.8 hectares at $6,250(including GST) per hectareContribution feesBALANCE OF $50,000 (excluding GST) with no furthercontributionsFor every $50,000 you put in you will be charged $0 inContribution FeesPlus Management Costs(for 8.80 hectares)Equals Cost of fund(for 8.8 hectares)1. Rent$462 (including GST) x 10= $4065.60 Indexed2. Tending Fees$121 (including GST) x 10= $1,064.80 IndexedFor every $50,000 you have invested in the Project you will becharged fees in the financial year ending 30 June 2014 of$5,130.40, Indexed.Note that the calculation has not taken into account insuranceexpenses which are approximately 0.7% of the insured value.Also note that additional fees will also apply in later years.If you had an investment of $50,000 (including GST) duringthe financial year ending 30 June 2014, you would be chargedfees and costs of $5,130.40 (including GST).

GrowersConstitutionProject ManagementAgreementSub-leaseWA Blue Gum Limited(Responsible Entityand Project Manager)SchemePropertyCustodyAgreementSandhurst TrusteesLimited (Custodian)PlantationOperationsWoodSalesFinanceForestrySupervisionPlantationServicesAgreementWoodPurchaseAgreementLoanAgreementAgreement forthe provision ofConsultingServicesWACAP TreefarmsPty Ltd*(Forestry Contractor)W.A. Chip & Pulp CoPty Ltd*(Wood Purchaser)Albany FinancialPty Ltd(Lender)ConsultingForester* Both these companies are ultimately owned by Marubeni Corporation and Nippon Paper Industries Co.

6.1 ReportsThe Project Manager will provide Growers with areport following completion of the planting of thePlantations setting out the areas which have beenplanted with Blue Gum trees in accordance with thePlantation Development and Tending Plan.Thereafter, the Project Manager will report to theGrowers no later than 30 November in each yeardetailing any changes to the PlantationDevelopment and Tending Plan, the actualoperations performed on the land, details regardingthe health and vigour of the Plantations and anyother matter which may affect the performance orviability of the Plantations.In addition, a consulting forester will provide aseparate professional report at least annually, andat other times if necessary.6.2 InsuranceEvery Grower is required to insure his Plantationsevery year against fire, if such insurance isavailable at a reasonable cost determined by theProject Manager. In recent years the annualpremium has been at a rate of about 0.7% of theinsured value. It is possible that in the future thepremiums will be more expensive. The ProjectManager will use its best endeavours to arrangesuch insurance at the best price and will be entitledto charge a fee equivalent to 10% of the premiumfor this service. As the trees mature the value ofthe Plantations is expected to rise. A decision willbe made separately each year as to the insuredvalue, which may be less than the full market value.However, the Project Manager will endeavour toensure that the insured value will not be less than$5,000 per hectare.6.3 The Responsible EntityThe Responsible Entity of the Project is responsiblefor the operation and management of the Project.The Responsible Entity is an unlisted publiccompany.The Responsible Entity was granted its AustralianFinancial Services Licence on 22 December 2003.The Responsible Entity's Australian FinancialServices Licence was varied by ASIC on:(a)(b)5 August 2004 to authorise the ResponsibleEntity, in addition to operating the Project, toprovide general product financial advice forinterests in the Project to wholesale andretail clients;9 June 2006 to ensure consistency with theextension of the "12 month rule" under theTax Laws Amendment (2005 Measures No.(c)(d)(e)(f)(g)(h)5) Act 2005 (Cth) and to incorporate the mostcurrent standard licence conditions that applyto licensees;6 February 2008 to extend the maximumperiod for registering members' interests inthe land to 15 months from the end of theincome year in which the member firstinvests in the Project and to incorporate themost current standard licence conditions thatapply to licensees;28 May 2010 to permit the ResponsibleEntity to act as the responsible entity foranother project (which did not proceed) andto add an additional "responsible manager";23 May 2011 to permit the ResponsibleEntity to act as the responsible entity for theW.A. Blue Gum Project 2011 ARSN 150 828283 and the Choice Forestry Project 2011ARSN 150 830 121;3 April 2012 to permit the Responsible Entityto act as the responsible entity for the W.A.Blue Gum Project 2012 ARSN 156 425 286;15 May 2012 to permit the ResponsibleEntity to act as the responsible entity for theChoice Forest Project 2012 (which did notproceed); and14 June 2013 to permit the ResponsibleEntity to act (inter alia) as the responsibleentity for the Project.The Responsible Entity, in its own capacity,maintains a cash deposit and cash equivalents toensure that it meets the financial requirementsunder its Australian Financial Services Licenceincluding the minimum net tangible assetrequirement of $150,000.Copies of the audited annual financial reports ofResponsible Entity are available from ASIC or bycontacting the Responsible Entity.WABG as trustee of the W.A. Blue GumManagement Trust ("Trust") is the Project Manager.The Project Manager receives fees and rent fromGrowers.Where the Project Manager receives amountspayable by Growers it holds those funds as trusteeof the Trust on the terms of the trust deed (referredto below) and utilises these funds to meetexpenses, including growing and tending expenses.Where the Trust makes a profit in a particularperiod, the Project Manager has the power todistribute those amounts to beneficiaries in theTrust.

Harvest income is held by the Custodian in adedicated bank account and does not form part ofthe income or assets of the Trust.WABG does not believe its status as trustee of theTrust creates any conflict of interest with its dutiesas Responsible Entity. It is noted that Growers areindependent and separate to the Trust, and do notbecome beneficiaries in the Trust.As well as the financial statements of WABG,accounts are also prepared and audited annuallywhich show the income and expenses of the Trust.Copies of the audited annual financial reports forthe Trust are also available by contacting theResponsible Entity.The trust deed constituting the Trust includes thefollowing:(a)(b)(c)(d)6.4 Compliance PlanWABG in its capacity as trustee for the Trustholds trust property on behalf of the Trust'sbeneficiaries to be distributed to suchbeneficiaries in such proportions as it, in itsdiscretion, sees fit;a broad right of indemnity for the trustee tobe indemnified out of the assets of the Trustfor all expenses relating to the Trust orincurred in the administration of the Trust;the trustee has broad powers to invest anddeal with the assets of the Trust; andother terms typically found in a discretionarytrust.Parts of the Project are regulated by Chapter 5C ofthe Corporations Act.Accordingly, the operations and business activitiesare subject to both the Constitution andCompliance Plan. Both documents have beenlodged with ASIC in accordance with therequirements of the Corporations Act.The Compliance Plan outlines how the Project willbe operated to ensure that it complies with theCorporations Act, the Constitution and any otheroperating requirements set down by the Board ofDirectors.The principal purpose of the Compliance Plan is toensure that the interests of Growers are protected.The Compliance Plan sets out the systems andmethods by which the Board of Directors, itsofficers, agents and employees will ensure that theProject and the Responsible Entity continue tocomply with the Corporations Act and theConstitution and to continually monitor and reviewsuch compliance.All Growers are entitled to obtain a copy of theCompliance Plan free of charge from the registeredoffice of the Responsible Entity.6.5 Compliance CommitteeThe Responsible Entity has established aCompliance Committee in accordance with theterms of the Compliance Plan. The ComplianceCommittee members are:(a)(b)(c)Paul Luntz M.Comm. (Wits), CA, RegisteredTax Agent, Registered Company Auditor(Chairman);Manish Sundarjee B.Acc, CA, FPA (Aff); andAnthony Henry May B.Ec. LL.B.Paul Luntz and Manish Sundarjee are externalmembers of the Compliance Committee.The Compliance Committee is scheduled to meet atleast once every quarter and is responsible formonitoring the extent to which the ResponsibleEntity observes, performs and complies with itsduties and obligations pursuant to the Constitution,the Corporations Act and the Compliance Plan.The Compliance Committee is required to report tothe Board of Directors of the Responsible Entityany findings of the Committee in relation to anyfailure by the Responsible Entity to comply with theCompliance Plan, any inadequacy in theCompliance Plan and any recommendations forchanges that the Committee considers should bemade to the Compliance Plan, any breach oralleged breach of the Corporations Act involving theProject and any breach or alleged breach of theprovisions of the Constitution. If the ComplianceCommittee is of the view that the Board of Directorshas not taken and does not propose to takeappropriate action to deal with a matter reported tothe Board of Directors by the Committee under theCompliance Plan, the Committee must report thatmatter to ASIC as soon as practicable.6.6 Audit of the Compliance Plan(a)(b)The auditor:(a)(b)Both the financial and compliance audits areconducted on an annual basis; andThe auditor must, as soon as possible, notifyASIC and the Compliance Committee inwriting if the auditor has reasonable groundsto suspect that a contravention of theCorporations Act has occurred and believesthat the contravention has not been and willnot be adequately dealt with by commentingon it in the auditor's report or bringing it tothe attention of the Responsible Entity.has a right of access at all reasonable timesto all of the books and records of the Projectand the Compliance Committee; andmay require an officer of the ResponsibleEntity or a member of the ComplianceCommittee to give the auditor informationand explanations for the purposes of theaudit.

6.7 Conflicts of InterestThe Responsible Entity has established detailedprocedures for managing conflicts of interest toenable it to:(a)(b)(c)(d)provide a structured and systematicmanagement process that takes into accountthe Responsible Entity's obligations underthe Corporations Act;identify, assess and evaluate the risk ofconflicts of interest arising wholly, or partially,in relation to the provision of financialservices by the Responsible Entity as part ofits financial services businesses;establish and maintain measures, processesand procedures (including compliancemeasures, processes and procedures)designed to manage these conflicts ofinterest; andensure that the quality of financial servicesprovided by the Responsible Entity is notsignificantly compromised by the presence ofconflicts of interest.6.8 Complaints by GrowersThe Responsible Entity has established detailedprocedures for the handling of complaints byGrowers, including the appointment of aComplaints Handling Officer. Growers can make acomplaint about any aspect of the Project bycontacting the Responsible Entity or the ComplaintsHandling Officer of the Responsible Entity.The Responsible Entity will treat all complaintsseriously and will deal with them in a timelymanner having regard to the nature of thecomplaint. The Responsible Entity will endeavourto provide a final response to any complaints within45 days of receiving a complaint. The ResponsibleEntity will act reasonably in attempting to resolve acomplaint. If a complaint is not resolved to thesatisfaction of the Grower, the Grower is entitled toinitiate a formal dispute resolution process whichinvolves attendance at a settlement conferencewith an independent person. If the parties areunable to resolve the dispute within seven daysafter attending the settlement conference theneither party may require the dispute be submittedto and settled by an independent expert. Thedecision of the independent expert will be final andbinding on the parties.As additional protection for Growers, theResponsible Entity is a member of the FinancialOmbudsman Service Limited Scheme. FOS is anentirely independent organisation whose role is toreceive, investigate and finalise complaints madeagainst the Responsible Entity. FOS is located atLevel 12, 717 Bourke Street, Docklands, telephone1300 78 08 08.6.9 Anti Money Laundering and Counter TerrorismFinancing Amendment Act 2007AUSTRAC has advised that the Project is subjectto the Anti Money Laundering and CounterTerrorism Financing Amendment Act 2007 (Cth).Therefore, it may be necessary for Applicants toprovide proof of identity in accordance with theprovisions of that Act.

November 16th 2012The DirectorsWA Blue Gum LimitedLevel 21385 Bourke StMELBOURNE VIC 3000Dear Sirs,RE: Product Disclosure Statement - WA Blue GumProject 2013 ("Project")This report has been prepared for inclusion in a ProductDisclosure Statement to be dated on or about 14 June2013 through which the public may participate in thedevelopment of Eucalyptus globulus plantations inWestern Australia.IntroductionEucalyptus globulus is very well regarded on theinternational market as an excellent source of fibre for pulpand paper manufacture. Australian forestry plantationventures that export their produce need four keyrequirements to succeed. The first is adequate rainfall andtop quality land to maximise tree growth. The second iscloseness to existing ports to minimise haulage costs. Thethird is to engage a reputable and reliable plantationmanager to grow the tree crop and deliver the product toport for an acceptable cost. Fourthly, well establishedmarketing arrangements are essential. WA Blue GumLimited has always placed a high priority in securingexcellent quality land in high rainfall areas, close to portsfor sub lease for the growing of Eucalyptus globulus andhas entered into arrangements for marketing theirproduce.Although the primary market for Eucalyptus globulus is forpulpwood, research trials by CSIRO have demonstratedthat provided early pruning is carried out, good qualitysawn material can be produced from 15 year old logs. Forthe foreseeable future though WA Blue Gum Limited willconcentrate on the export pulpwood fibre market whereEucalyptus globulus from WA plantations is highlyregarded by the pulp and paper industry as an excellentfibre for the manufacture of high quality paper products. Areputable forestry consultant formerly with URS and withextensive experience in Eucalyptus globulus plantationmanagement has been engaged by WA Blue Gum Limitedas the Forestry Supervisor of this Project. The ProjectManager, WA Blue Gum Limited, has subcontracted thebusiness of establishment and ongoing tending to WACAPTreefarms (formerly Bunnings Treefarms) a wholly ownedsubsidiary of WAPRES (W.A. Plantation Resources PtyLtd). WAPRES is a 50/50% joint venture betweenMarubeni Corporation, one of Japan's leading tradinghouses and Nippon Paper Industries, one of Japan'slargest pulp and paper makers.I have been closely involved with eucalypt planting in theSouth West of Western Australia from 1976 to 1994 whilstRegional Manager with the Department of Conservation &Land Management and more so since 1995 as a forestryconsultant which has given me a good understanding ofwhat is required to produce high yielding Eucalyptusglobulus plantations.Land to be obtained for this project's plantings has notbeen finalised. As in the past the aim is to obtain landwithin approximately 100km of one of the three major chipmills in the South West of WA, the Diamond Chip Mill nearManjimup, chipping facilities at the Port of Bunbury or thechip mill close to the Port of Albany. This land is within thehigh rainfall zone of the South West of WA.As with any short rotation tree crop there are factors suchas below average rainfall, insect attack, fire, disease andwindstorms that can affect growth rates and actual yieldsobtained at the time of harvesting. Investors need to beaware that it is difficult to forecast the occurrence of thesefactors.Several factors need to combine to provide goodprospects for a profitable forest enterprise. Some of thefactors are elaborated upon to explain the project for thebenefit of intending investorsManagerial CapacityImmediate control of operational activity is theresponsibility of WACAP Treefarms under an agreementwith the Project Manager. WACAP Treefarms and itspredecessor Bunnings Treefarms have established over55,000 hectares of new Eucalyptus globulus plantations inthe South West over the last thirty years and currentlymanage approximately 30,000 hectares of plantations, ofwhich about 5,000 hectares are managed on behalf of WABlue Gum Limited. There are approximately 300,000hectares of Eucalypt globulus plantations in the southwest corner of Western Australia which has resulted insignificant economic and employment benefits.2009-2010 saw great change in the Eucalyptus globulusplantation industry in Australia. Several blue gum MISplantation companies were forced to appoint receivers andsell their assets largely due to the Global FinancialCollapse, (GFC). Gunns Limited who had purchased manyof the former MIS plantations to resource their intendedpulp mill in Tasmania went into administration inSeptember 2012 when unable to obtain funding toconstruct their mill. It is likely that administrators of theassets owned by both Gunns' and the MIS companies willendeavour to sell these plantations to other operators orharvest the resource they contain. As a result there is asubstantial volume of resource available to the market inthe short to medium term. The increase in supply coupledwith a strong currency has resulted in a lowering of theprice paid by the major paper and pulp mills in Japan forall woodchips they import. How long the expected loweringof the price will last is unknown but it is expected to haverecovered by the time plantations being established in

2013 are ready for harvesting. WA Blue Gum Limited Ltdhas remained largely unaffected by the problems othercompanies were exposed to following the GFC. Focussingits efforts solely on Eucalyptus globulus plantations,remaining within their capacity to service all plantationsthey manage and not offering tax deductions in advancehave been sound policies.WACAP Treefarms has a team of competent foresters witha good reputation as reliable and socially responsiblemembers of the community. They place great store onmaintaining good communication and relationships withlandowners as well as the various Local, State andFederal Government organisations and have a GoodNeighbour policy statement.This includes an active role in fire protection andsuppression work through a series of formal inter-agencyagreements and informal arrangements. They havesupplied several bush fire brigades with additionalequipment to bolster the effectiveness of local brigades infire suppression. Together with pre suppressionagreements and assistance to landowners and brigades,fire protection of plantations is of a high standard. In 2008an external review of their fire management systems wascarried out.Eucalyptus globulus has been planted extensively for thelast 20 years in the South West by a number of groupsincluding government and several major plantationcompanies. During this time a considerable amount ofinformation and expertise in Eucalyptus globulussilviculture has been developed. WACAP Treefarms isrecognised as a leader in Eucalyptus globulus plantationmanagement. This reinforces the wisdom of the choice ofoperational contractor.Land Selection and Suitability of the SelectedSpeciesThe aim is to select properties for lease that are within aradius of approximately 100km from chip mills at BunburyPort, Albany or the Diamond Chip mill. Preferred soils aregravelly sand and loams, over deep, well-structured clayson gentle topography and on farms supporting welldeveloped pasture with a history of at least 5 years ofeffective fertiliser application. Increasingly second rotationsites with a proven capacity to grow productive plantationsare producing a second crop. WACAP Treefarms havealso successfully converted several former pineplantations to Eucalyptus globulus plantations. Remnantforest vegetation is a good indicator of site and large sizedpaddock trees of Marri (Corymbia calophylla), Karri(Eucalyptus diversicolor), and Jarrah (Eucalyptusmarginata), are a useful indicator of a likely high sitequality. Annual rainfall is important and an annual rainfallof greater than 700mm per year is necessary for reliablegrowth.Properties selected by WA Blue Gum Limited are normallyin the greater than 900mm/year rainfall zone. Reliable andadequate rainfall is an essential ingredient for the growthof Eucalyptus globulus and in the lower south of the Stateless evapo-transpiration moisture loss and occasionalsummer rainfall is beneficial for survival and growth rates.In 2010 the South West of WA experienced one of thedriest winter rainfall ever recorded when Manjimuprecorded 549 mm for the year. 2011 rainfall was about100mm less than the long term yearly average of 1005mm and 2012 at this stage is expected to be much thesame. Because WACAP Treefarms only select propertiesfor planting that are in the higher rainfall zone the impacton existing plantations has been minimal although thegrowth of plantations during 2010 was less than inprevious years. Past experience in the South West of WAhas been that low rainfall years are commonly followed bya return to more normal rainfall.ProductivityProjections of productivity are made by sampling existingplantations and relating the measured growth rate up tothat point in time with a series of site related volumecurves. A series of these have been drawn up and includefactors such as soils, rainfall and topography. Commonforestry practice is to use a series of average annual ratesof production (Mean Annual Increment - MAI) for the rangeof site classifications to establish a number of SiteQualities (SQ), each representing a level of MAI.Sample checks of standing volume and recording of actualyields obtained from harvesting to date supports thecurrent basis of yield projection based on site qualityassessment before planting and monitoring growth at age7.5. Growth monitoring at age 7.5 has proven to be a goodpredictor of harvest volume at age 10. In 1994, Bunnings(now WAPRES) carried out the first operational harvestingof Eucalyptus globulus and exported 40,000 tonnes ofhigh quality woodchips that attracted a premium pricecompared with woodchips from native forest sources.Since 2003, WAPRES have been exporting on averageabout 650,000 tonnes of Eucalyptus globulus woodchipsper year ex Bunbury Port. Following the disastroustsunami that hit Japan in March 2011 several Japanesepaper mills were damaged. Whilst the major mills are nowoperating, the pulp & paper sector in Japan hasrestructured to approximately 80% of the pre-tsunamicapacity (through associated closure of smaller and lessefficient mills). This and uncertainty about the impact ofthe European financial situation on the world economymakes predictions difficult but the current view is that~550,000 tonnes of Eucalyptus globulus woodchips fromWAPRES managed plantations will still be exported fromthe port of Bunbury in 2013. This level of export isexpected to be temporary and a return to higher levels isexpected before plantings in the WA Blue Gum Limited2013 project are ready for harvest. It is expected thisincrease will be assisted by the China market which isbecoming of increasing importance for Eucalyptusglobulus woodchip exports from Australia.Improvements in tree breeding and plantation practicesare continuous and should lead to further improvements inyield. This can help offset the 10% reduction in annualrainfall for the South West since 1972. Although 2010 wasa very dry year, rainfall in the South West of WA in 2011exceeded the long term average. It is always difficult topredict expected yields from a long term crop such astrees however the good performance of past plantings byWA Blue Gum Limited over several years and the qualityof land secured in the high rainfall zone of the South Westare reasons to believe that yields will be above average.

Leasing arrangements with landholders are developedfollowing extensive on site discussion with the owner andrelevant land use authorities and fire protection agencies.The concept is to draw up a final plan, which thelandowner, authorities, WACAP Treefarms and the ProjectManager all agree upon.RisksIn past years where rainfall was low some drought deathsof Eucalyptus globulus occurred in plantations in theSouth West. This was a reflection of below average rainfalland the limits of knowledge on soil types and other factorswhen the first broad scale plantings were made. Sincethen responsible operators such as WACAP Treefarmscarry out a soil drilling or backhoe digging survey to aminimum of three metres depth over the property toexclude unfavourable sections. The drilling depth may beextended to five metres or more where there is uncertaintyabout the nature of the deeper material. This practicecombined with only selecting properties for this Projectlikely to receive greater than 900 mm of rainfall per yeargreatly minimises the risk of tree death in a low rainfallyear. An observed 10% decrease in rainfall in the SouthWest since the 1970's due to natural variation and or othercauses may reduce future growth rates. Any reduction ismore likely to be experienced in lower rainfall areas whereblue gum plantations are already marginal than in thehigher rainfall zones where WA Blue Gum Limitedplantations will be established.Rising saline groundwater has been a widespreadproblem in farmland in parts of the South West. Soilsalinities greater than EC 50 mS/m have been shown toaffect growth rates and survival of Eucalyptus globulus.WACAP Treefarms routinely carry out salinity sampling ofland to be planted and exclude those areas where salinitycould be a problem in the future. This is very soundpractice and minimises the risk of future salinity effects ona plantation.On first rotation sites the fire risk to blue gum plantations isvery low up until about age 8 when leaf litter begins tobuild up. On second rotation sites the residual debris afterclear-felling means that these plantations are exposed to ahigher fire risk than did the first rotation. All plantationcompanies are aware of this and take steps to reduce therisk by disposing of clear-felling debris for a zone aroundthe perimeter before establishing the new crop. To datethe loss of plantations in WA due to fire has been very low.The proposed biomass plant to be built near Diamond anddesigned to burn plantation debris to produce energywould have had the capacity to reduce fuel levels afterharvesting. When the biomass plant will be built isuncertain due to the downturn in the economy.Management OperationsLocal contractors under WACAP Treefarms supervisioncarry out planting and tending. After rain, a combination ofknockdown and residual herbicide is applied to the moundor ripped planting line prior to planting. Fertiliser type, rateand application methods are selected following pre-plantsoil sampling and site assessment. Having seen most ofthe Eucalyptus globulus plantation establishment in theSouth West and the Green Triangle in South Australia overmany years, I rate current practice and results by WACAPTreefarms as being of an extremely high standard.Seedlings are raised in the WACAP Treefarms nursery atManjimup. This nursery, constructed in 1993, has acapacity to produce up to seven million seedlings eachyear and uses some of the best nursery technologyavailable and consistently produces good qualityseedlings. Up to three years sowing requirements areheld in secure storage, which ensures security of seedsupply. Trees are planted in rows either 4 or 5 metresapart, aiming for a stocking rate of 800 - 1,000 seedlingsper hectare, depending on soil conditions and rainfall.With the detailed attention given to pre plantingestablishment, seedling survival is often close to 100%.Further herbicide spraying is carried out in late spring ifrequired and additional fertiliser application takes placeduring the rotation if growth rate monitoring indicates abenefit will be obtained.WACAP Treefarms have been a long term member of theSouthern Tree Breeders Association and involved in acooperative breeding program to further improve thegenetic strain of Eucalyptus globulus. Seed orchards tosupply elite seed in the future have been establishedusing seed from identified superior parent trees as well asclones and grafts of superior individuals.Processing and LogisticsHarvesting by a mechanical harvester is an efficient andlow cost operation at about 10 years of age. Piece size,which has an important bearing on harvesting costs, hasbeen very satisfactory in harvesting carried out so far.Limiting initial stocking to 800 -1000 trees per hectare onmost sites promotes the development of larger diametertrees at the time of clearfelling. Mechanical harvestersutilise down to a small diameter limit thus ensuring greateryield of chiplog and minimal waste.WA Chip and Pulp another wholly owned subsidiary ofWAPRES purchase and process the timber. The majorchipping facilities are at the WA Chip and Pulp mill atBunbury Port. A loading facility is available at BunburyPort. A chip mill north of Albany and loading facilities atAlbany Port have been operating for over ten years withwoodchips being exported from Albany Port.Market Outlook and Product PotentialThe fibre obtained from Eucalyptus globulus has nowbecome the principal source of woodchip exports. Karri(Eucalyptus diversicolor) woodchips previously obtainedfrom State managed native forests in the South West havefallen to about 200,000 tonnes per year as a consequenceof State government forest policies on harvesting in nativeforests. Samples taken from Eucalyptus globulus grown inWestern Australia by WACAP Treefarms have been shownby CSIRO to provide significantly better quality and higherpulp yields than from native forest timbers from Tasmania.Consequently, woodchips from Eucalyptus globulusshould always command a higher price in the exportmarket. The Wood Purchase Agreement provides asecure market arrangement for growers.

Background and ExpertiseI am an independent professional forester who hasworked in forestry and the forestry industries in Australiafor over 40 years. Since setting up my private consultancyin 1995 I have worked on many projects involving bluegum plantations and have provided advice on manyaspects including log pricing. Whilst working in the ForestsDepartment of WA and later the Department ofConservation & Land Management as a RegionalManager I was closely involved with log sales, log pricingand making estimates of future returns from both softwoodand hardwood plantations.All foresters study forest economics as part of theirgraduate degree and accordingly have a good grasp ofthe fundamentals of economic theory in relation to forestproducts. Computer modelling has allowed many of thevariables to be tested in predicting different scenarios butin the final analysis an important factor is a judgementbased on experience and up to date knowledge of thepulp and paper industry. I have experience in thesematters.ConclusionDespite the extent of variables that can impact on returnsto growers in the short term there are many reasons tohave confidence in the financial viability of Eucalyptusglobulus plantations in WA that are established on highquality sites, are within 100km of processing plants andcontinue to receive adequate rainfall. In addition I believethe following factors are relevant and have been taken intoaccount.1. All export sales of woodchip are denominated inAustralian dollars, thus establishing a meaningfulnexus with the Australian inflation rate. Australianexport woodchip prices have historically remainedsteady against inflation. Export contracts havetraditionally been written in Australian dollars. Arise in the value of the A$ would be expected toresult in lower prices and a fall in the Australiandollar would lead to price increases. However,when in recent years the A$ has appreciated invalue, woodchip prices have been maintained. In2000 and 2001 large areas of Eucalyptus globulusplantations were established in the South West ofWA and many became due for harvest in 2012. Thisincrease in supply has led to a temporary reductionin price in the short term due to these additionalsupplies coming on stream but it is expected tohave recovered before the 2013 plantings are readyfor harvest.2. The production and export of woodchips in the pastwas based entirely on a resource derived fromnative forests. By comparison with other States,WA producers have gained considerableexperience over several years in marketing woodfibre derived largely from plantations.Until 2009-2010 when the world economy wasaffected by the global financial downturn, WA Chipand Pulp have been exporting on average about650,000 tonnes per year of Eucalyptus globuluschips from Bunbury Port since 2003. Thecombination of world economic uncertainty and thetsunami that struck Japan and damaged severalpaper mills resulted in only 550,000 tonnes ofEucalyptus globulus woodchips derived fromWAPRES managed or harvested plantations beingexported in 2011 and a similar export program isexpected to be delivered by the end of 2012. Thecontinuation of uncertainty about the worldeconomy and the reduced intake by Japanesepaper mills means that 2013 exports will probablyremain similar. Just when export tonnages reachearlier figures of 650,000 tonnes a year is unclearin the current world economy but is expected beforethe plantings made in the WA Blue Gum Limited2013 Project are ready for harvesting. Mitsui, thenew owner of the former Hansol group exported350,000 tonnes of Eucalyptus globulus woodchipsfrom Bunbury Port in 2011 and is expected toexport a similar volume by the end of 2012.3. Buyers have been prepared in the past to pay apremium of 15-20% (note currently ~10%) forEucalyptus globulus woodchips compared to nativeforest chips. The collapse in native forest woodchipexports from Tasmania reflects buyer preference fora higher quality and more uniform product that canonly be produced from plantations.4. Demand for paper pulp and chiplogs from whichmost paper is made will increase as worldpopulation increases. Small increases in livingstandards in some of the developing countries suchas China and India will very likely result in greatlyincreased consumption of writing paper. Bothcountries have insufficient wood resources of theirown and rely on imports of fibre.5. The benefits of tree breeding for better pulp yieldand fibre quality should progressively appear inwoodchips produced from plantations.6. The price of woodchips in the early days ofwoodchip exports was based on the native forestresource. The increases in yield and consistency ofquality from a plantation resource are recognisedby buyers by way of higher prices than for nativeforest woodchips. Scope exists for sellers tonegotiate with buyers due to the higher qualityproduct from plantations although this will be offsetfor the next 2-3 years by greater volumes ofEucalyptus globulus woodchips becoming availablefrom 2012 due to increased planting rates acrossthe industry from 2000-2002 and the desire ofadministrators of former MIS companies to recoverfunds locked up in plantations of harvestable age.7. There is now growing in one region in Australia aplantation resource of Eucalyptus globulus ofalmost 300,000 hectares which would be largeenough to establish an internationally viable largescale pulp mill. Although there are no recentdevelopments there is potential to establish a papermill in the South West of WA based entirely on aEucalyptus globulus resource however labour costsand scarcity of capital funding in Australia wouldmake this difficult unless some major advances inpaper making technology emerge.

8. The South West of Western Australia is locatedcloser to the Japanese and other Asian exportmarkets thus having a significant freight advantage.This region can usually compete strongly withwoodchip exports from Chile, the southern States ofthe United States and South Africa. This shouldmean that Australia will maintain its market share inJapan. In the United States saw log production wasbecoming favoured over pulp log production butlimited new housing starts and efforts by the US tobolster their economy by exporting products thatwould have normally been absorbed by the localmarket could increase competition in the short term.9. Australia is even closer to the highly promisingIndonesian market where in recent years severalvery large pulp plants have been completed.Because of mismanagement, there is a shortage oflocal fibre and Australia (and especially the SouthWest of Western Australia) has the potential tobenefit.10. In March 2002, Australia made its first sale of woodchips to China. In that country there are two sets ofdynamics that provide opportunity:(a) strongly increasing demand, at about 80%per annum (the per capita use of paper isstill less than 10% of that in the UnitedStates);(b)a very quick and abrupt closing down ofnative forest logging for environmentalreasons, as major waterways werebecoming dangerously polluted.11. It is expected that India, the country with the world'ssecond largest population and the world's largestmiddle class, will increase its usage of paper. It isknown that India has made enquiries of Australianlog suppliers but in WA the current government isopposed to export of hardwood logs but has noobjections to export of plantation grown woodchips.India's paper usage per head is about 1% of that inthe United States. Other emerging markets areKorea and Taiwan. China has been a major supplierto Taiwan and this is likely to be curtailed.12. This Project has a Wood Purchase Agreement withWA Chip & Pulp Co Pty Ltd a wholly ownedsubsidiary of WAPRES which is a joint venturebetween Marubeni Corporation of Japan andNippon Paper Industries, two of Japan's largestpulp importers. Currently WAPRES is providingabout one third of its export woodchips fromEucalyptus globulus plantations it owns with twothirds coming from plantations managed byWAPRES on behalf of other entities such as WABlue Gum Limited so marketing of WA Blue Gumwoodchips should be assured.14. The particular characteristics and location ofproperties in this Project strongly influence thereturns from sale of woodchips on export markets.Transport is a major cost and with the long termoutlook for oil prices to rise the significance of theclose proximity of land secured for the 2013 Projectto process plants or Bunbury or Albany Portscannot be overstated when considering the pricesto be obtained by growers in the project.15. The Commonwealth Government declared underthe Carbon Farming initiative (CFI) that commercialplantations grown in Australia could not be used togain carbon credits whereas plantations grownoverseas are eligible. This appears anomalous anda case for a change in this ruling could besubstantiated.16. Growth in demand worldwide for high qualitywoodchips as derived from Eucalyptus globulusplantations has steadily increased and once theworld economy improves this is projected tocontinue. The demand from China for high qualitywoodchips had been increasing at a much higherrate than other countries and the tightening ofdemand over supply was one of the factors that ledto a 9.5% increase in the FOB price in 2008 forEucalyptus globulus woodchips. Due to increasingsupply of Eucalyptus globulus woodchips from 2012due to large plantation areas established in 2000 to2002 and the world economic downturn, woodchipprices fell by 7% in 2012. The current uncertainty inthe world economy makes short term predictions offuture prices difficult as so many factors areinvolved however the long term outlook is thatdemand and prices will increase. It is expected thatby the time the trees planted in the WA Blue GumLimited 2013 Project are ready for harvest thatprices will have recovered.The information contained in this report has been gainedas a result of my own enquires and I have not relied onany representations made to me by the Project Manager,WACAP Treefarms or any other person.Don Spriggins BSc (For), FIFA13. In-forest chipping methods are now being used aswell as transporting logs to fixed chip mills. Onlower yielding sites in-forest chipping techniquesare used to reduce the cost of chip production byreducing transport costs from forest to Port in thatchips, not logs, are transported.

Anthony Henry May B.Ec. LL.B.Leon GorrB.Juris LL.B. M.AdminMr May has been a solicitor in practice for over 30 years.For more than 25 years he has advised many clients whohave become involved in forestry operations in variouslocations throughout Australia. He has also advised someof the largest forestry public company groups in relation toaspects of their activities.Mr May has been an active grower of both softwood andhardwood timber on his own account and is a director of anumber of timber growing companies. He has been amember of Australian Forest Growers (formerly calledAustralian Forestry Development Institute) for about 25years and is a member of the Committee of the Melbournebranch. He was a member of the Board of the NationalAssociation of Forest Industries (now called AustralianForest Products Association) for five years. He hasrepresented the forestry sector in negotiating with theAustralian Government over taxation and regulatoryissues on a number of occasions, including most recentlyin relation to the design and implementation of the Division394 legislative package. He was for over 25 years amember of the Council of Monash University and for muchof that time was a trustee of the University SuperannuationScheme. He is a partner of Herbert Geer and has been adirector of WABG since its inception.Mr Gorr has been a solicitor specialising in Corporate andRevenue Law for over 30 years. For more than 25 yearshe has advised forest plantation managers, promoters andparticipants concerning their various forestry operationactivities. During this period, he has been activepersonally as a grower in the softwood and hardwoodplantation industries.Mr Gorr has been a director of WABG since its inceptionand during that time that company has been the ProjectManager under annual Prospectuses / Product DisclosureStatements in relation to projects of a similar nature to thisProject.Steven John Smith LL.M.Mr Smith has practised in areas of commercial law since1981. His clients are involved in a wide range ofcommercial and entrepreneurial activities and he has beeninvolved in preparing prospectuses for a number of them.He has been a director of WABG since 23 April 2001.

This section contains a summary of various provisions of the Constitution and other principal agreements. All Growersare entitled to obtain a copy of the Constitution free of charge from the registered office of the Responsible Entity.Growers should not rely on this summary but should refer to the documents themselves.Please note that all defined terms in the body of this PDS are defined in Section 11 (glossary of terms) except those thatappear in this Section 9. The defined terms that appear in this section are defined by reference to the particularagreement. Copies of the agreements are available for inspection at the registered office of the Responsible Entityduring normal business hours.9.1 Summary of Constitution(a)(b)(c)(d)(e)Establishment Of The ProjectThe Constitution is the document under whichthe Project is established and is registered withASIC.PartiesThe parties to the Constitution are theResponsible Entity and each Grower. Bysigning the Application Form attached to thisProduct Disclosure Statement, the Applicantwill be agreeing to be bound by the terms of theConstitution as if the Applicant had signed thedocument.Application MoneysIn order to acquire an Interest in the Project, anApplicant must pay to the Custodian theApplication Moneys specified in theConstitution.The Responsible Entity will maintain an accountwith a bank or other financial institution intowhich all Application Moneys will be deposited("the Application Fund"). The Custodian willdisburse the funds in the Application Fund forEstablishment of the Plantation Allotments.Project PropertyThe Responsible Entity will hold all ProjectProperty for the Growers for the term of theProject.Distributions of Income(i)All income and other proceeds due to theGrowers will be payable to theResponsible Entity and deposited into aProceeds Fund. As soon as convenientafter receipt of payment of any moniesinto the Proceeds Account, theResponsible Entity will distribute suchHarvest Income as follows:(A)first, the Project Manager will be paidby each grower by way ofreimbursement for all costs,expenses and outgoings properlyincurred in carrying out theharvesting of the timber on thePlantation Allotments;(f)(g)(h)(ii)(B)(C)Fees etcsecondly, the Project Manager willbe entitled to be paid by eachGrower any amounts specified aspayable to the Project Managerpursuant to the Project Agreements;subject to Clause 8 of theConstitution, the balance will bedistributed pro rata to the Growers inrespect of whose PlantationAllotments the Harvest Income wasderived. In the case of JointGrowers the balance will bedistributed among them in equalshares.Notwithstanding (i) above, theResponsible Entity will be entitled todeduct from the Harvest Income to bedistributed to Growers any amounts owingto the Project Manager in respect of fees,rental and other expenses.Under the Project Agreements, the ProjectManager will be entitled to receive the followingamounts:(i)(ii)(iii)(iv)all tending fees and rent payable by theGrowers;any incentive fee which becomes payable;any other amounts due (e.g. credit cardfees);all payments authorised by a meeting ofGrowers to meet unforeseen expenses inrelation to fertiliser and/or insect issues.Register of GrowersThe Responsible Entity will maintain a registerof Growers containing the names andaddresses of the Growers, a description of thePlantation Allotments leased by each Grower,the date when each Grower was entered in theRegister, the date on which the person ceasedto be a Grower and if applicable, that they areJoint Growers.Assignment of InterestSubject to the terms of the Project Agreements,each Grower may assign its rights andprivileges under the Constitution. Eachassignment must be in writing and in a form

(i)(j)(k)(l)acceptable to the Responsible Entity andexecuted by the assigning Grower and by theassignee and delivered to the ResponsibleEntity.Power to BorrowThe Responsible Entity may borrow for thepurposes of the Project and may pledge theProject Property as security for the borrowings.Indemnity(i)(ii)The Responsible Entity has a right of fullindemnity out of the Project Property inrespect of:(A)(B)any liability incurred by theResponsible Entity in performance ofits duties under the Project; andall fees payable and costsrecoverable by the ResponsibleEntity under the Constitution.This indemnity continues after theResponsible Entity ceases to be theresponsible entity for the Project, unless itis a result of negligence, fraud, breach ofduty or breach of trust by the ResponsibleEntity.If any member of the ComplianceCommittee incurs a liability in thatcapacity, in good faith, and in accordancewith the Compliance Plan, that person isentitled to be indemnified from the ProjectProperty to the extent permitted by law.No Right to WithdrawOnce a Grower's interest has been registered,the Grower has no right to withdraw from theProject or to require the Responsible Entity topurchase its Interest.Additional Powers of the Responsible Entity(m)(n)(o)(p)Other Activities of the Responsible EntitySubject to the Corporations Act, theResponsible Entity may:(i)(ii)(iii)establish, manage or promote any otherproject or managed investment schemeas a responsible entity;deal with itself in its capacity as manager,trustee or responsible entity of any othertrust or scheme or in any other capacity;orbe interested in any contract ortransaction with itself or any Grower in itscapacity as manager, trustee orresponsible entity from any other trust ormanaged investment scheme or in anyother capacity.Change of Responsible EntityThe Responsible Entity may only be changedin accordance with Part 5C.2 of Division 2 ofthe Corporations Act.Meetings of Growers(i)(ii)The provisions of Part 2G.4 of theCorporations Act apply to meetings ofGrowers.The Responsible Entity may convene ameeting of Growers for such purpose asit sees fit.Period of the Project(i)The Project will terminate 15 years fromthe date of acceptance by theResponsible Entity of the last Application.However, the Growers may by specialresolution extend the Project, providedthat the Responsible Entity agrees tosuch extension and that the rule againstperpetuities is not infringed.(i)(ii)The Responsible Entity must not paymoney from the Project Property unlessauthorised by the Constitution or theCorporations Act or where the payment isin respect of:(A)(B)(C)ordinary bank charges and statutoryfees;any payments which are required tobe made in relation to investmentsmade from money held in theProceeds Fund or Application Fundfrom time to time (including stampduty and transactional costs); orpayments authorised by an ordinaryresolution of a meeting of Growers.In addition to the powers under theConstitution and the Corporations Act, theResponsible Entity may do anythingnecessary for the proper and efficientEstablishment, management anddevelopment of the Project.(q)(r)(ii)Upon termination of the Project, all rightsand obligations under the ProjectAgreements will cease and terminate.Winding Up of the ProjectThe Responsible Entity shall wind up theProject or cause the Project to be wound up inany of the following circumstances:(i)(ii)(iii)the Project comes to the end of its term;the Growers direct the Responsible Entityto wind up the Project by extraordinaryresolution;the Responsible Entity considers that thepurpose of the Project has beenaccomplished or cannot be accomplishedand commence a process by givingnotice to ASIC and the Grower of thatopinion.Amendment of the ConstitutionThe Constitution may be modified inaccordance with the Corporations Act by theResponsible Entity. The Responsible Entityshall obtain the approval of an ordinary

(s)(t)resolution of Growers at a duly convenedmeeting of Growers in respect of anyamendment to the Constitution unless theResponsible Entity reasonably believes theproposed amendment will not adversely affectthe rights of any Grower.Complaints Handling(i)(ii)(iii)(iv)The Responsible Entity has appointed aComplaints Handling Officer and if there isany vacancy, the Secretary of theResponsible Entity will be deemed to bethe Complaints Handling Officer.Any Grower may make a complaint aboutthe Project by writing to the ResponsibleEntity or telephoning and speaking withthe Complaints Handling Officer. Thecomplaint must specify the identity of theGrower making the complaint and allnecessary details to allow theResponsible Entity to deal with thecomplaint.Unless a complaint is resolved to thecomplainant's satisfaction by the end ofthe next Business Day from when thecomplaint was received and thecomplainant has not requested aresponse in writing, the ResponsibleEntity must use its best endeavours toprovide a complainant with a finalresponse to a complaint within 45 daysafter receiving the complaint. If theResponsible Entity is unable to provide afinal response in respect of a complaintwithin 45 days, the Responsible Entitymust:(A)(B)(C)inform the complainant of thereasons for the delay;advise the complainant of their rightto refer the complaint to externaldispute resolution; andprovide the complainant with thename and contact details of therelevant external dispute resolutionscheme to which they can complain.If the complaint cannot be resolved to thesatisfaction of the complainant then thecomplainant may proceed under thedispute resolution procedures under theConstitution or take whatever other actionis open to it under the general law.Dispute ResolutionExcept where the complaint handling procedureapplies, any party asserting a dispute in relationto the Project must give the other party to thedispute a Dispute Notice stating the matter indispute, the arguments of the party giving theDispute Notice and what should be done torectify the dispute. The party receiving theDispute Notice must respond in writing within 5Business Days of receipt of the Dispute Notice.9.2 Summary of Scheme Property CustodyAgreementThe Responsible Entity has engaged SandhurstTrustees Ltd ACN 004 030 737 ("Sandhurst") to actas custodian of the Project Property, which shallinclude all Application Moneys and timber saleproceeds until disbursed or distributed inaccordance with the Constitution and the ProjectAgreements. Sandhurst is required to hold theProject Property in a proper and safe manner and toensure that at all times it is clearly identifiable and isheld separately from other assets. Sandhurst isrequired to maintain proper custodial standards andto maintain proper and accurate records in relationto the Project Property and all dealings by it inrelation to the Project Property and to report anymaterial events which may be of interest or concernto the Responsible Entity. Sandhurst is to act only inaccordance with the authorised instructions of theResponsible Entity. Sandhurst's performance ascustodian will be subject to regular review. TheResponsible Entity will pay to Sandhurst an agreedannual fee and will indemnify Sandhurst in respectof any liability it incurs as a result of performing itsobligations under this agreement or acting inaccordance with authorised instructions from theResponsible Entity. The Custody Agreement maybe terminated by either party with three monthswritten notice. The Custody Agreement may also beterminated by either party if there is a breach of theCustody Agreement and the requisite notice is given.9.3 Summary of Project Management Contract(a)(b)(c)PartiesThe Project Management Contract will bebetween each Grower (including JointGrowers) and the Project Manager.Services to be Provided by Project ManagerThe Project Manager will perform or cause tobe performed all the services in relation to theLand and the Plantation as are set out in thePlantation Development and Tending Plan andwill do so in accordance with sound silviculturaland environmental practices, including:(i)(ii)(iii)the Establishment of the Plantation withinthe Establishment Period (including theprovision of sufficient healthy Blue Gumseedlings to achieve the stockingrate/spacing set out in the PlantationDevelopment and Tending Plan and theplanting of the seedlings) for the purposesof felling and harvesting;tending the Plantation in a proper andskilful manner in accordance with thePlantation Development and TendingPlan; andtending, maintaining and generallymonitoring and caring for the Plantationso as to ensure as far as is reasonablethe health and vigour of the Plantation.Term of the ContractThe Contract will terminate when the whole ofthe Plantation has been Harvested for the firsttime. If all necessary approvals for the

(d)(e)(f)(g)Establishment of the Plantation are notobtained within 17 months from the date of theContract, the Grower may give notice to theProject Manager and the Contract will then beat an end and all amounts paid are to berefunded.Reports by Project ManagerThe Project Manager shall provide:(i)(ii)a report not later than 30 November ofeach year, detailing since thecommencement of the Contract, orthereafter since the last report, anychanges to the Plantation Developmentand Tending Plan, the actual operationsperformed on the Land or to thePlantation, details of the health and vigourof the Plantation including details of anyunforeseen outcomes which have affectedthe performance or viability of thePlantation, details of any foreseenoutcomes which are likely to affect theperformance or viability of the Plantation,and the outcome of any inventory ofvolume assessments which have beentaken; anda report as soon as practicable followingthe completion of the planting of thePlantation setting out the area comprisingthe Plantable Area.Assignments(i)(ii)A Grower shall not assign or otherwisedispose of its rights and obligations underthe Contract, unless the Grower providesto the Project Manager a guarantee andindemnity in a form approved by theProject Manager in respect of theperformance by the proposed Assignee ofeach obligation of the Grower.The Project Manager may assign its rightsand obligations to a suitably qualifiedperson who must covenant to perform allthe responsibilities of the ProjectManager. The Project Manager maycontract to another person any of itsresponsibilities under the Contract.Force MajeureEvery party to the Contract shall be excusedfrom performance of or any failure in thefulfilment of any obligation imposed upon it bythe Contract if and only to the extent and for thetime that such performance or fulfilment isprevented by Force Majeure or theconsequences of Force Majeure which theParty claiming Force Majeure could not haveprevented or overcome by exercising areasonable standard of care and prudence.Payments to the Project ManagerThe Grower agrees to pay to the ProjectManager all the amounts payable to the ProjectManager, which are contained in the ProjectManagement Contract.(h)(i)Termination in the Event of Default(i)(ii)(iii)The Project Manager will be entitled toterminate the Contract if the Growerdefaults under the Contract and thedefault shall have continued, in the caseof an obligation to pay money, for a periodof 14 days and in any other case, for aperiod of 1 month after receipt by theGrower of written notice from the ProjectManager specifying the default andrequiring the default to be rectified.The Grower will be entitled to terminatethe Contract if the Project Manager is indefault of any obligation under theContract and such default shall havecontinued for a period of 6 months afterreceipt by the Project Manager of writtennotice from the Grower specifying thedefault and requesting that the default beremedied.Either party may terminate the Contract ifthe Sub-lease is terminated.Dispute ResolutionIn the event any dispute between any of theparties to the Contract arises relating to thesubject matter of the Contract, any party maygive to the other notice in writing of the matter.The parties to the dispute may themselvesappoint an expert to determine the dispute. Ifthe parties cannot agree on the expert within 7days, any party can then request the Presidentof the Law Society of Western Australia toappoint an independent expert to determine thedispute.9.4 Summary of Sub-lease(a)(b)(c)PartiesThe Sub-lease will be between WABG ("theLandholder") and each several Grower, or inthe case of Joint Growers, both the first andsecond Joint Growers with the second JointGrower being exclusively responsible for thepayment of rent.Approval by Planning CommissionWhere approval is required for the Sub-leasepursuant to Sections 136 and 140 of thePlanning and Development Act 2005 (WA), theSub-lease is entered into on the basis that theapproval is obtained within 17 months from thedate of the Sub-lease.RentThe Grower or in the case of Joint Growers, thesecond Joint Grower, will pay to the Landholderduring the Term the Rent as follows:(i) for the period until 30 June 2013 (if any) -nil;(ii)for the year commencing 1 July 2013, thesum of $462 (including GST) (Indexed)per hectare, payable on 30 November2013; and

(d)(e)(f)(iii)(iv)for the second and subsequent years ofthe Term, including any extended Term,the amount payable for the previous yearadjusted by the increase (if any) in theConsumer Price Index (All Groups, Perth)during the preceding 12 months payableon 30 September in each year,subject to the right of the Grower to adjustthe Plantable Area in accordance withSection 9.4(g) below.In the event that the Project Harvest Dateoccurs after the expiry of the Term a Grower'sobligation to pay Rent will continue until theProject Harvest Date.Grower's CovenantsThe Grower's covenants include:(i)(ii)(iii)to punctually pay the Rent;to Establish, tend and manage thePlantation in a proper and skilful mannerand in accordance with sound silviculturaland environmental practices adoptedwithin the forestry industry and as andwhen appropriate prepare, cultivate, sprayherbicides and insecticides, fertilise andHarvest the Plantation;to comply with and obey all Acts andregulations, by-laws, orders, ordinancesand rules made in respect of or applyingto the use or occupancy of the LeasedArea.The Landholder's CovenantsThe Landholder's covenants include:(i)(ii)(iii)to permit the Grower, upon paying theRent, or in the case of Joint Growers, thesecond Joint Grower paying the rent), topeaceably and quietly enjoy the LeasedArea during the Term, without anyinterruption by the Landholder or anyperson or persons claiming under orthrough the Landholder;to comply with the provisions of the HeadLease;to punctually pay all rates, taxes and othercharges levied on the Landholder by anylocal or other Government Authority inrespect of the Leased Area.Further CovenantsThe Landholder and the Grower agree (interalia) that:(i)each party shall have the right with theapproval of the other party (whichapproval shall not be unreasonablywithheld) to assign or otherwise disposeof its rights under the Sub-lease providedthat the transferring party first obtains adeed of covenant by the proposedassignee or person who receives thedisposal (the "Grantee") containing acovenant by the Grantee in favour of thenon-transferring party that the Grantee will(g)(h)(ii)(iii)at all times during the Term observe andperform all or any of the covenantscontained or implied in the Sub-lease tobe observed or performed by thetransferring party;the Plantation and carbon environmentalor any other credits derived from thePlantation (if any) are and shall remain tothe extent permitted by law, the propertyof the Grower until the end of the Termand the Grower shall be entitled to harvestthe Plantation and to retain all incomefrom the sale thereof. Any correspondingdebits arising out of the activities of theGrower will be debited to the Grower uponthose debits occurring;the Grower may lodge a caveat over theLeased Area. Upon the termination of theSub-lease for any reason whatsoever, theGrower must promptly withdraw (at itsexpense) any such caveat.Damage to or Reduction in the Viability ofthe Plantation(i)(ii)If the whole or a substantial part of thePlantation is damaged by fire or any othercause whatsoever or an independentforestry consultant commissioned by theGrower determines that it is no longercommercially viable to continue to operatethe Plantation or any portion thereof, thenthe Grower shall be entitled to assess theextent of the damage to the Plantationand may terminate the Sub-lease orreduce the Plantable Area by the areawhich has been damaged or is no longerviable.If the Sub-lease is terminated or thePlantable Area is reduced, the Growershall, if so directed by the Landholder:(A)(B)in the case of termination of the Sublease,Harvest and remove allstumps, Wood and debris from theLeased Area and reseed to pasture;orin the case of reduction of thePlantable Area, Harvest and removeall stumps, Wood and Debris fromthe area which has been damagedor is no longer viable, and (ifpracticable) fence off and reseed topasture that area.Termination in the Event of Default(i)The Landholder may terminate the Subleaseif the Grower fails to perform orobserve any covenants conditions orstipulations contained in the Sub-leaseand such default shall have continued inthe case of an obligation to pay money fora period of 14 days or in any other casefor a period of one month after receipt bythe Grower of written notice from theLandholder requiring the default to berectified.

(i)(ii)The Grower shall be entitled to terminatethe Sub-lease if the Landholder is indefault of any obligation under the Subleaseand such default shall havecontinued for a period of one month afterreceipt by the Landholder of written noticefrom the Grower requesting that thedefault be remedied.Summary of Agreement to Sub-lease (ifapplicable)The Agreement to Sub-lease will be betweenWABG and the Grower, or in the case of JointGrowers, the first and the second Joint Grower.(i)(ii)(iii)(iv)The parties undertake to enter into a Subleaseof the Land on or before the StartingDate, which date shall be no later than 30September 2014.WABG will promptly apply for and obtainall approvals from all relevant authoritiesfor the use of the Land for the purposes ofthe Project.The Grower irrevocably authorises WABGto complete the Sub-lease by insertingrelevant details.The parties will obey, and are bound by,all the provisions of the Sub-lease fromthe Starting Date.WABG may assign any of its obligationsunder the Agreement or enter into acontract to sell or transfer its interest inthe Land provided that any assignee orpurchaser agrees to assume theobligations of WABG and the assignee orpurchaser is a respectable and solventperson capable of performing theobligations of WABG under theAgreement.9.5 Summary of Plantation Services Agreement(a)(b)PartiesThe Plantation Services Agreement is betweenthe Project Manager and WACAP Treefarms("Forestry Contractor").Services to be Provided by the ForestryContractor(i)(ii)The Forestry Contractor will perform allthe services in relation to each Plantationin accordance with sound silvicultural andenvironmental practices adopted withinthe forestry industry.The services referred to above include:(A)(B)the Establishment of the Plantation(including the acquisition andplanting of sufficient healthy BlueGum seedlings to achieve theminimum survival rate set out in thePlantation Development and TendingPlan);the tending of the Plantation in aproper and skilful manner inaccordance with the PlantationDevelopment and Tending Plan;(c)Term of the AgreementThe Agreement shall terminate upon the firstto occur of the completion of the Harvest ofthe Plantation or the termination of the HeadLease.9.6 Summary of Wood Purchase Agreement(a)(b)(c)(d)PartiesThe Wood Purchase Agreement is betweeneach several Grower, WABG and W.A. Chip &Pulp Co. Pty Ltd ("the Purchaser").Sale and Purchase of WoodWABG agrees to sell and the Purchaseragrees to purchase all Wood forwoodchipping or by mutual agreement for ahigher yield return subject to the terms andconditions set out in the Agreement.Purchase Price(i)(ii)The Purchase Price for Wood must be afair and reasonable price for each gradeof wood taking into account, inter alia:(A)(B)(C)the price or prices being paid bythe Purchaser for wood of thesame or similar species, quantityand quality in Western Australia;the price or prices being paid byother bona fide wood processorsfor wood of the same or similarspecies, quantity and quality inWestern Australia;relevant information supplied byany party including statistics orindices relevant to wood pricespublished from time to time by theAustralian Bureau of Agriculturaland Resource Economics, theAustralian Bureau of Statistics orany other government authority orindustry body.If WABG does not approve the PurchasePrice and obtains an alternative offer inwriting from a genuine buyer to purchasethat grade of Wood on substantially thesame terms and conditions as the offerfrom the Purchaser but at a higher pricethan the Proposed Purchase Price thenthe Purchaser shall have an option forone month from the date of delivery tothe Purchaser of the alternative offer topurchase the Wood for such higherprice. In certain circumstances WABGmay sell that Wood to another buyer onthe terms and conditions of thealternative offer.Harvesting and Delivery(i)(ii)WABG shall Harvest and Deliver theWood taking due and proper care for thesafe-keeping and handling of the saidWood until it has been Delivered;The Purchaser shall be entitled todeduct from the Purchase Price a feenot exceeding 5% of the value of theWood after deducting harvesting anddelivery costs for planning,

(e)(f)(iii)administering and supervising the Harvestand Delivery of the Wood;Ownership of and risk in relation to theWood shall pass to the Purchaser onlyupon the Delivery of the Wood to thefacility or facilities nominated andaccepted by the Purchaser.Force MajeureThe provisions described in Section 9.3(f)above apply to the extent necessary to thisAgreement.Termination in the Event of Default(i)(ii)WABG on behalf of any Grower and anyGrower, shall be entitled to terminate theAgreement if the Purchaser is in default ofany obligation under the Agreement andsuch default shall have continued, in thecase of an obligation to pay money, for aperiod of 14 days or in any other case, fora period of 1 month after receipt by thePurchaser of written notice from WABGspecifying the default and requiring thedefault to be rectified.The Purchaser shall be entitled toterminate the Agreement if the Grower isin default of any obligation under theAgreement and such default shall havecontinued for a period of 1 month afterreceipt by the Grower of written noticefrom the Purchaser specifying the defaultand requesting that the default beremedied.(g)Dispute ResolutionIn the event any dispute between any of theparties to the Agreement arises relating to thesubject matter of the Agreement, theprovisions described in Section 9.3(i) aboveshall apply mutatis mutandis.9.7 Summary of Joint Growers Agreement (ifapplicable)(a)(b)(c)PartiesWhere there are Joint Growers, each of themwill be the parties.ResponsibilitiesThe First Joint Grower is responsible for all thefees payable in respect of all activitiesassociated with the Establishment of thePlantation. The Second Joint Grower isresponsible for the payment of all rent, tendingand insurance fees.The First Joint Grower and the Second JointGrower are responsible, in equal shares, forthe expenses of harvesting, transportation ofthe Wood, and for the incentive fee and anyother fees payable to the Project Managerunder the Project.EntitlementsEach party is entitled to 50% of the benefitsand the receipts (including carbon credits andinsurance) arising from the joint participation ofthe parties in the Project.

10.1 Material ContractsThe following agreements have been entered into orwill be entered into as a result of an Applicantbecoming a Subscriber in the Project:(a) The Constitution referred to in Section 9.1;(b)(c)(d)(e)(f)(g)The Scheme Property Custody Agreementreferred to in Section 9.2;The Project Management Contract referred toin Section 9.3;The Sub-lease Agreement (and if relevant theAgreement to Sub-lease) referred to in Section9.4;The Plantation Services Agreement referred toin Section 9.5;The Wood Purchase Agreement referred to inSection 9.6; andThe Joint Growers Agreement referred to inSection 9.7 (if applicable).10.2 Inspection of DocumentsThe following documents are available for inspectionduring normal business hours at the registered officeof the Responsible Entity at Level 21, 385 BourkeStreet, Melbourne, Victoria (except to the extent thatthere is unreasonable prejudice to the ResponsibleEntity ):• this Product Disclosure Statement dated 14June 2013;• the Memorandum and Articles of Association ofWABG;• the Constitution and Agreements referred to inSection 9 of this Product Disclosure Statement;• the consents referred to in Section 10.3 of thisProduct Disclosure Statement.10.3 Consents of Experts and DisclaimersThe following parties have given, and have notbefore the date of the PDS withdrawn, their consentto being named in this PDS in the form and contextin which they are named and, in the case of Mr D.Spriggins, to the inclusion of his IndependentForestry Report in the form and context in which it isincluded, in accordance with the Corporations Act:(a)(b)(c)(d)(e)(f)Mr D. Spriggins;WACAP Treefarms;W.A. Chip & Pulp Co.;Sandhurst Trustees Limited;Herbert Geer; andAlbany Financial Pty Ltd.Persons proposing to participate in the W.A. BlueGum Project 2013 as Growers should note thatMarubeni Corporation, Nippon Paper Industries Co,WACAP Treefarms and W.A. Chip & Pulp Co. (otherthan as set out in sub paragraph) have not:(i)(ii)(iii)(iv)(v)been involved in the preparation of thisPDS;authorised or caused the issue of thisPDS;been involved as a promoter of the W.A.Blue Gum Project 2013 or the PDS;performed any function in a professionaladvisory or other capacity for WABG or foror in relation to the issue or proposedissue of interests under this PDS; ortaken any responsibility for thecorrectness of any disclosure in this PDSof terms of contracts to which MarubeniCorporation, Nippon Paper Industries Co,WACAP Treefarms or W.A. Chip & PulpCo. are a party.None of Marubeni Corporation, Nippon PaperIndustries Co, WACAP Treefarms or W.A. Chip &Pulp Co. are associated with WABG or any otherparty referred to in this PDS (except as disclosed).WACAP Treefarms and W.A. Chip & Pulp Co. arecontractors to WABG for the provision respectively ofthe afforestation, marketing and supervisory andadvisory services detailed in the summary of materialcontracts contained in this PDS.References to any of Marubeni Corporation, NipponPaper Industries Co, WACAP Treefarms and W.A.Chip & Pulp Co. ought not be taken as anendorsement by any of them of the W.A. Blue GumProject 2013 or a recommendation of participation byan intending Grower.10.4 Interests of Directors and ExpertsFull particulars of:(a)(b)the nature and extent of the interest (if any) ofevery Director of the Responsible Entity andthe Custodian and every expert, in thepromotion of, or in any property proposed to beacquired by the Growers; andwhere the interest of such a Director or such anexpert consists of being a partner in a firm, thenature and extent of the interest of that firm;together with a statement of all amounts paid oragreed to be paid to him or to the firm in cash orshares or otherwise by any persons:(c)in the case of a Director, either to induce him tobecome, or to qualify him as, a Director, orotherwise for services rendered by him or bythe firm in connection with the promotion orformation of the Project; or

(d)in the case of an expert, for services renderedby him or the firm in connection with thepromotion or formation of the Project;are as follows:(i)(ii)(iii)(iv)(v)Mr D. Spriggins has acted as independentforestry expert and has prepared theReport set out in Section 7 of Part B ofthis PDS and will receive professionalfees of not more than $7,700 (includingGST) for his services in accordance withhis usual charges;Sandhurst Trustees Ltd is the Custodianand will receive fees not exceeding$12,100 (including GST) for the first yearand thereafter;the Directors of the Responsible Entitymay receive Director's fees;the Directors of the Responsible Entityand any firm in which they are partnershave no interest in the promotion of thisPDS or in any property to be acquired byGrowers AND no amount has been paid(either in cash or shares or otherwise) toany of the Directors to induce any of themto become or to qualify them as Directorsor otherwise for services rendered by anyof them or for services rendered by thatfirm in connection with the promotion ofthis PDS, other than that each of theDirectors and other partners (orassociates) in Herbert Geer, the solicitorsto the Project Manager, are beneficiariesof the Trust of which WABG is the Trusteeand Mr Gorr and Mr May are directors andshareholders of the companies that areshareholders in Albany Financial Pty Ltdand are directors of Albany Financial PtyLtd, and that each Director holds oneordinary share in WABG. The net incomeof the Trust includes revenue earned inconnection with the Project and may bedistributed to beneficiaries. Mr May is apartner in Herbert Geer. Fees at or belownormal rates plus GST will be paid toHerbert Geer for the provision ofinfrastructure support and for legalservices in relation to all aspects of theProject;each employee of WABG or theCustodian who is to be regarded as apromoter of the Project, is entitled toreceive his or her salary and otheremoluments from WABG or the Custodian(as the case may be) in his or hercapacity as such employee.10.5 Interests of the CustodianThe Custodian has no interest in relation to theProject, in the promotion of the Project, or in theproperty proposed to be acquired for the purposes ofthe Project, other than the remuneration to which theCustodian is entitled in its capacity as Custodian(which is stated in Section 10.4(d)(ii)) and withoutlimiting the generality of the foregoing no amounthas been paid or agreed to be paid to the Custodianin cash or otherwise by any person:(a)(b)to induce the Custodian to act in that or anothercapacity; orfor other services rendered by the Custodian inconnection with the Project,other than the amounts of that remuneration thathave accrued or will accrue to the Custodian fromtime to time under the Scheme Property CustodyAgreement.10.6 Interests of the Project ManagerThe Project Manager does not hold any Interests inthe Project but is entitled to fees as described in thisPDS.

In this Product Disclosure Statement, unless the contrary intention appears, the following words have the followingmeanings:Agreement to Sub-leaseApplicantApplicationApplication FormApplication FundApplication MoneyASICBoardCompliance PlanConstitutionCorporations ActCustodianmeans (when applicable) the agreement to sub-lease between WABGand the Grower, or in the case of Joint Growers, the second Joint Grower,pursuant to which that Grower agrees to take a sub-lease of property onwhich to Establish Plantations, details of which are set out in Section 9.4means a person who has duly completed and submitted an Application tothe Responsible Entitymeans a duly completed Application Form pursuant to which an Applicantapplies for an Interest in the Projectmeans the application form attached to and accompanying this PDSmeans the bank account opened by the Responsible Entity for thepurpose of receiving all Application Moneysmeans the amount which every Applicant is required to pay in order to beissued an Interest in the Project (i.e. $6,250 (including GST) per hectare,the minimum amount being $18,750 (including GST) being the amountrequired to Establish 3 hectares of plantations)means the Australian Securities and Investments Commissionmeans the Directorsmeans the compliance plan of the Projectmeans the constitution (as defined in Section 9 of the Corporations Act) ofthe Projectmeans the Corporations Act 2001 (Cth)means Sandhurst Trustees Limited ACN 004 030 737 or such othercustodian of the Project as may be appointed from time to timeDirectors means the directors of W.A. Blue Gum Limited ACN 060 179 982Division 394 means Division 394 of the ITAA 1997EstablishmentEstablishment FeeEstablishment PeriodForestry ContractorGrowermeans all silvicultural activities until and including the first planting of thePlantation and the application of fertilisers and herbicides at the time ofthe first planting of the Plantationmeans $6,250 per hectaremeans the period described in Division 394 of the ITAA 1997 ending nolater than 18 months after the end of the year of income in which theApplication Money is paidmeans WACAP Treefarms Pty LtdGuide means ASIC Regulatory Guide 232HarvestIndexedInterestITAA 1936means a person who holds an Interest in the Project (and in the case ofJoint Growers, both of them) and whose name has been entered into theregister of Growersmeans the cutting down, felling or logging of trees and the extraction orremoval of the trees so cut down, felled or logged to a loading point,whether conducted as one operation or more than one operation andHarvested and Harvesting have a similar meaningmeans adjusted by the percentage increase (if any) in the ConsumerPrice Index (All Groups, Perth) during the preceding 12 months or duringsuch other period as may be specifiedmeans the combined interest of a Grower in a Plantation and in thatGrower's Project Agreementsmeans the Income Tax Assessment Act 1936 (Cth)

ITAA 1997Joint Growers AgreementJoint GrowersLoan AgreementMAIPDSPlantation Development and Tending PlanPlantationsProceeds Fundmeans the Income Tax Assessment Act 1997 (Cth)means the agreement between Joint Growers, details of which are set outin Section 9.7means two Applicants who are participating in the Project as JointGrowers in accordance with a Joint Growers Agreementmeans an agreement between a Grower and Albany Financial Pty Ltd upto 80% of the Application Moneymeans Mean Annual Increment being a measure of the rate of growth oftreesmeans this document, other than Part Cmeans the plan for the tending of each Plantation which is to be annexedto the Plantation Services Agreementmeans the plantations of Tasmanian Blue Gum tree to be Established onthe Project Land to be leased by the Growersmeans the bank account opened by the Responsible Entity for thepurpose of receiving all sale proceeds from the sale of the timberProject means the W. A. Blue Gum Project 2013 (ARSN 164 105 579)Project AgreementsProject Harvest DateProject LandProject Management ContractProject ManagerProject PropertyPurchaser (or Wood Purchaser)Responsible EntitySub-leaseSubscriberUncontrolled Eventsmeans the Sub-lease, Project Management Contract and Wood PurchaseAgreement and if relevant to a particular Grower, an Agreement to Subleasemeans the date on which the Harvesting of all the trees in the Project iscompleted for the first timemeans the land in the south-west of Western Australia between Bunburyand Albany on which the Project will be situatedmeans the contract to be entered into by each Grower and the ProjectManager in relation to the Establishment and tending of the Plantations,details of which are set out in Section 9.3means W.A. Blue Gum Limited ACN 060 179 982 in its capacity asmanager of the Projectmeans scheme property as defined in Section 9 of the Corporations Actmeans W.A. Chip & Pulp Co.means W.A. Blue Gum Limited ACN 060 179 982 as the responsible entityfor the Projectmeans the sub-lease between the Project Manager and each Growerpursuant to which each Grower sub-leases property on which to EstablishPlantations, details of which are set out in Section 9.4means an Applicant who has made payment of the Application Moneymeans an act of God, strike, lock out or other interference with work, wardeclared or undeclared, blockage, disturbance, lightning, fire, drought,earthquake, storm, flood, explosion, government or quasi governmentrestraint, exploration, prohibition, intervention, direction, or embargo,unavailability or delay in availability of equipment or transport, inability ordelay in obtaining governmental or quasi governmental approvals,consents, permits, licences, authorities or allocations, or any other causewhether of the kind specifically set out above or otherwise which is notreasonably within the control of the party relying on the UncontrolledEventW.A. Chip & Pulp Co. means W.A. Chip & Pulp Co. Pty Ltd ACN 008 720 518WACAP Treefarms means WACAP Treefarms Pty Ltd ACN 009 378 607WABG means W.A. Blue Gum Limited ACN 060 179 982WAPRES means WA Plantation Resources Pty Ltd ACN 094 151 792Wood Purchase Agreementmeans the agreement for the sale of the timber from the Plantationsdetails of which are set out in Section 9.6

PLEASE READ THE FOLLOWING INSTRUCTIONS CAREFULLY IF YOU WISH TO PARTICIPATE IN THE PROJECTYOU MUST:1. Complete and sign the Application Form in section 13.2. Complete and sign the Power of Attorney in section 14 in accordance with the relevant State law and in thepresence of an adult witness.3. Where the Applicant requires finance from Albany Financial Pty Ltd (refer to Section 2.4 of Part B of this PDS)complete the Application for Finance in section 15.4. Where the Applicant is a company, the Guarantor for the company must complete the Power of Attorney insection 16.5. Make the bank cheque for the subscription payable to SANDHURST TRUSTEES LIMITED ACF WA BLUE GUMPROJECT 2013 or provide your full credit card details.6. Forward the Application Form, bank cheque (or provide your full credit card details) and Power of Attorney toW.A. Blue Gum Limited, Level 21, 385 Bourke Street, Melbourne Vic, 3000 Attention: Mr Tom May.7. Ensure that:(a)(b)(c)(d)(e)(f)(g)Your name(s) and address(es) are correct.The number of Hectares and the Application Money in A$ are specified.The Application Form is signed and dated.The Power of Attorney is signed and dated.If applicable, the Application for Finance is signed and dated.In the case of a Grower being a Company, the Company executes its application in accordance with itsConstitution and the Corporations Act.Your bank cheque is enclosed (or full credit card details are provided).

W.A. Blue Gum Project 2013W.A. Blue Gum Limited ACN 060 179 982 AFS Licence Number 246264I/We hereby apply to W.A. Blue Gum Limited for the Project Agreements in relation to the number of hectaresdetailed below.Number of hectares (Minimum Number - 3 hectares) Application Money $The Application Money is $6,250 (including GST) for each hectare.PLEASE COMPLETE IN BLOCK LETTERSYour DetailsSole/First Applicant or First Joint GrowerDr/Mr/Mrs/Ms/Miss First Name SurnameDate of Birth / / OccupationCompany Name (if a company)Residential/Site AddressSuburb/Town City State PostcodeMailing Address (if different from above)Suburb/Town City State PostcodeACN (if a company)ABNAre you registered for GST Yes NoTel: WorkMobileTel: HomeFaxEmailAre you applying as Joint Grower (see Part A of the PDS)? Yes NoAre you applying as a trustee? Yes NoIf yes please state the name of the trust or superannuation fund(If applicable) Is the trust or superannuation fund registered for GST Yes No

(If applicable) Second Applicant or Second Joint GrowerDr/Mr/Mrs/Ms/Miss First Name SurnameDate of Birth / / OccupationCompany Name (if a company)Residential/Site AddressSuburb/Town City State PostcodeMailing Address (if different from above)Suburb/Town City State PostcodeACN (if a company)ABNAre you registered for GST Yes NoTel: WorkMobileTel: HomeFaxEmailAre you applying as Joint Grower (see Part A of the PDS)? Yes NoAre you applying as a trustee? Yes NoIf yes please state the name of the trust or superannuation fund(If applicable) Is the trust or superannuation fund registered for GST Yes NoYour AcknowledgementsBy signing the Application Form you acknowledge that:(a)(b)(c)(d)(e)(f)You have read the PDS for the W.A. Blue Gum Project 2013 to which the Application Form relates.You agree to be bound by the provisions of the Constitution as amended from time to time of the Project.The Responsible Entity has the right to accept or reject your application in whole or in part.You agree that acceptance of your application may be constituted by execution of the Project Agreements bythe directors of WABG severally as your attorneys on your behalf without communication of suchacceptance to you.You acknowledge that by becoming a party to the Constitution and the Project Agreements you irrevocablyappoint the directors of WABG severally as your attorneys to enter into any agreement for the sale of thewood.You authorise the directors of WABG severally as your attorneys to place your name(s) on the Register inrespect of the area leased pursuant to your application.

Sole/First Applicant or First Joint Grower Sign belowINDIVIDUAL APPLICANTDATE OF SIGNING / /SignatureSignature of WitnessName of WitnessAddressCOMPANY APPLICANTDATE OF SIGNING / /Are you the sole director Yes NoExecuted in accordance with its Constitution by:DirectorPrint NameDirector/SecretaryPrint Name(If applicable) Second Applicant or Second Joint Grower Sign belowINDIVIDUAL APPLICANTDATE OF SIGNING / /SignatureSignature of WitnessName of WitnessAddressCOMPANY APPLICANTDATE OF SIGNING / /Are you the sole director Yes NoExecuted in accordance with its Constitution by:DirectorPrint NameDirector/SecretaryPrint Name

METHOD OF PAYMENTBANK CHEQUE ENCLOSED:ALL CHEQUES MUST BE PAYABLE TO SANDHURSTTRUSTEES LIMITED ACF WA BLUE GUM PROJECT 2013ORCREDIT CARD:PLEASE CHARGE MY:VISA BANKCARD MASTERCARDCARD NUMBER:EXPIRY DATE:CCV NO. (LAST 3 DIGITS ONTHE BACK OF YOUR CARD):NAME ON CREDIT CARD:FOR THE AMOUNT OF:$SIGNATURE OF CARDHOLDER:DATE: / /THIS APPLICATION FORM AND POWER OF ATTORNEY MUST NOT BE CIRCULATED ORDISTRIBUTED UNLESS ATTACHED TO A COPY OF THIS PRODUCT DISCLOSURE STATEMENT. NOPROJECT AGREEMENTS WILL BE ENTERED INTO ON THE BASIS OF THIS PRODUCT DISCLOSURESTATEMENT LATER THAN 30 JUNE 2013.

I/We the person(s) or company named below (the Grantor), HEREBY APPOINT(S) any person being a Director ofW.A. Blue Gum Limited from time to time to be the Grantor's Attorney (the Attorney) to exercise, subject to anyconditions and limitations specified in Clause 2 below, the authority conferred on the Attorney hereby and to do onthe Grantor's behalf anything the Grantor has lawfully authorised the Attorney to do.1. In the exercise of the authority conferred by this Power of Attorney, the Attorney is authorised to execute anyassurance or other document or to do any other act whereby a benefit is conferred on the Attorney.2. This Power of Attorney is expressly limited to conferring on the Attorney authority to:(a)Enter into and execute on the Grantor's behalf a Sub-lease (and if relevant an Agreement to Sub-lease),Project Management Contract and Wood Purchase Agreement ("the Project Agreements") as referredto in the Product Disclosure Statement for the W.A. Blue Gum Project 2013 and a Loan Agreement (ifapplied for) with Albany Financial Pty Ltd and:(i)(ii)date the said Project Agreements and the Loan Agreement and complete as appropriate any blankspaces in the Schedules thereto; andmake and initial any alterations to the Project Agreements and the Loan Agreement which are notprejudicial in the opinion of the Attorney to the Grantor's interests.(b)(c)Without limiting the foregoing and following make, do and sign all such acts, deeds and things as maybe necessary to give effect to procure the stamping of the said Project Agreements and the LoanAgreement (if applied for).Alter, modify, add to or cancel the provisions of the Project Agreements and the Loan Agreement (ifapplied for) provided that such alteration, modification, addition or cancellation:(i)(ii)(iii)in the opinion of the Attorney does not and is not likely to adversely affect the interests of theGrantor;is in the opinion of the Attorney, or of a barrister or solicitor instructed by the Attorney, necessary orexpedient to comply with the provisions of any statute, ordinance, rule, regulation or by-law whichmay be passed and which affects projects of the nature of the Project, or is a requirement of anycompetent statutory authority; oris in the opinion of the Attorney made to correct a manifest error or is of a formal, technical oradministrative nature only; orprovided that in the case of any proposed alteration, modification, addition or cancellation which in theopinion of the Attorney may adversely affect the rights of the Grantor, such alteration, modification, addition orcancellation may be effected only if it has been approved by an ordinary resolution of Growers at a meetingof Growers convened for the purposes of passing that resolution.(d)Appoint one or more substitute attorneys to exercise the powers granted to the Attorney and to revokeany appointment of any substitute attorney or attorneys made under the relevant document.3. The Grantor agrees that the Grantor shall indemnify and keep indemnified the Attorney against all claimsdemands, costs, damages, losses and expenses, however arising consequent upon the exercise of thePower of Attorney hereby granted, and further agrees to ratify and confirm whatever the Attorney shall do inthe exercise of the power hereby granted.4. This Power of Attorney will be governed by and construed in accordance with the laws of Victoria.5. Words and expressions used in this Power of Attorney have the same meanings as in the Constitution unlessthe contrary requires.6. This Power of Attorney is irrevocable until the expiration of the Project under the Constitution.

Executed as a Deed on theday ofSole/First Grantor sign belowINDIVIDUALDATE OF SIGNING / /SignatureSignature of WitnessName of WitnessAddressCOMPANYDATE OF SIGNING / /Are you the sole director Yes NoExecuted in accordance with its Constitution by:DirectorPrint NameDirector/SecretaryPrint Name(If applicable) Second Grantor sign belowINDIVIDUALDATE OF SIGNING / /SignatureSignature of WitnessName of WitnessAddressCOMPANYDATE OF SIGNING / /Are you the sole director Yes NoExecuted in accordance with its Constitution by:DirectorPrint NameDirector/SecretaryPrint Name

*I/We hereby apply to ALBANY FINANCIAL PTY LTD for finance in relation to this Application.(*delete if not applicable). You must complete the Direct Debit Request section below.WHAT AMOUNT OF FINANCE IS REQUESTED FROM ALBANY FINANCIAL PTY LTD?$(Refer to Section 2.4 of Part B of this Product Disclosure Statement)DIRECT DEBIT REQUESTRequest and Authority to Debit the Account named below to pay Albany Financial Pty Ltd:SURNAME OR COMPANY NAME:GIVEN NAME OR ACN/ABN:ADDRESS:I/We hereby request and authorise Albany Financial Pty Ltd (User ID:320134) to arrange for any amountAlbany Financial Pty Ltd may debit or charge me/us to be debited through the Bulk Electronic ClearingSystem ("BECS") from an account held at the financial institution identified below subject to the terms ofthe Service Agreement and any further instructions provided below.NAME OF FINANCIAL INSTITUTIONAT WHICH THE ACCOUNT IS HELD:ADDRESS:STATE:POSTCODE:ACCOUNT NAME:BRANCH NUMBER (BSB):ACCOUNT NUMBER:

SERVICE AGREEMENTI/We understand and acknowledge that:1. The financial institution may, in its absolute discretion, at any time by notice in writing to me/us,terminate this request as to future debits.2. Albany Financial Pty Ltd may, by prior notice in writing to me/us within 14 days, vary the timing offuture debits.3. Where the due date does not fall on a business day and I/we am/are uncertain whether sufficientcleared funds will be available to meet the direct debit, I will contact the financial institution directly andensure that sufficient cleared funds are available.4. I/We can modify or defer this regular Direct Debit Request at any time by giving Albany Financial PtyLtd 14 days notice, in writing. I/We need to do this by the 1st day of the month for the change I/we arerequesting to take effect in that month.5. I/We can stop or cancel the regular Direct Debit Request at any time by giving Albany Financial Pty Ltd14 days notice in writing. I/We need to do this by the 1st day of the month for cancellation to takeeffect in that month.6. If at any time I/we feel that a direct debit against my/our nominated account is inappropriate or wrong itis my/our responsibility to notify Albany Financial Pty Ltd as soon as possible.7. If I/we believe there has been an error in debiting my/our account, I/we will notify Albany Financial PtyLtd directly and confirm by notice in writing with Albany Financial Pty Ltd as soon as possible so thatAlbany Financial Pty Ltd can resolve my/our query more quickly. If Albany Financial Pty Ltd concludesas a result of its investigations that my/our account has been incorrectly debited, it will respond tomy/our query by adjusting my/our account accordingly. Albany Financial Pty Ltd will also notify me/usin writing of the amount by which my/our account has been adjusted. If Albany Financial Pty Ltdconcludes as a result of its investigation that my/our account has not been incorrectly debited it willrespond to my/our query by providing me/us with reasons and with evidence of its finding.8. Direct debiting through BECS is not available on all accounts. I/We can check my/our account detailsagainst a regular statement or check with the financial institution as to whether I/we can request adirect debit from my/our account.9. It is my/our responsibility to ensure that there are sufficient cleared funds in my/our nominated accountto honour the Direct Debit Request. I/We understand that the Direct Debit Request will beautomatically cancelled if three direct debit payments are dishonoured because of insufficient fundswithin a 12 month period. Albany Financial Pty Ltd will give me/us 14 days notice in writing if theyintend to cancel my/our Direct Debit Request. Albany Financial Pty Ltd will also charge the cost ofdishonoured direct debits against my/our account.10. Albany Financial Pty Ltd may need to pass on details of my/our Direct Debit Request to their sponsorbank in BECS to assist with the checking of any incorrect or wrongful debits to my/our nominatedaccount.I/We acknowledge that I/we have read and understand the terms and conditions governing the direct debitagreement between me/us and Albany Financial Pty Ltd as set out above.The first direct debit may be made on the 15 July 2013 and at monthly intervals thereafter, unless otherwiseagreed.By signing below I/we hereby certify that I/we are authorised signatories to the account named above andhave the authority to enter into this Direct Debit Request.SIGNATURE:PRINT NAME:DATE: / /SIGNATURE:PRINT NAME:DATE: / /

Sole/First Applicant or First Joint Grower Sign belowINDIVIDUAL APPLICANTDATE OF SIGNING / /SignatureSignature of WitnessName of WitnessAddressCOMPANY APPLICANTDATE OF SIGNING / /Are you the sole director Yes NoExecuted in accordance with its Constitution by:DirectorPrint NameDirector/SecretaryPrint Name(If applicable) Second Applicant or Second Joint Grower Sign belowINDIVIDUAL APPLICANTDATE OF SIGNING / /SignatureSignature of WitnessName of WitnessAddressCOMPANY APPLICANTDATE OF SIGNING / /Are you the sole director Yes NoExecuted in accordance with its Constitution by:DirectorPrint NameDirector/SecretaryPrint Name

Whereas:A. The person named below (the Grantor) is a director of the company named below (the Company).B. The Company has executed an application form to become a Grower.C. At the request of the Grantor, W.A. Blue Gum Limited has agreed to accept the Company as a Grower.D. (If applicable), at the request of the Grantor, Albany Financial Pty Ltd has agreed to enter into a loanagreement between Albany Financial Pty Ltd and the Company (the Loan Agreement).E. In consideration for the promises provided, the Grantor has agreed to provide a Guarantee and Indemnity inrespect of the Company's obligations under the Project Agreements (as defined in the Constitution for the WABlue Gum Project 2013) and, where relevant, the Loan Agreement.The Grantor, HEREBY APPOINT(S) any person being a Director of W.A. Blue Gum Limited from time to time to bethe Grantor's Attorney (the Attorney) to exercise, subject to any conditions and limitations specified in Clause 2below, the authority conferred on the Attorney hereby and to do on the Grantor's behalf anything the Grantor haslawfully authorised the Attorney to do.1. In the exercise of the authority conferred by this Power of Attorney, the Attorney is authorised to execute anyassurance or other document or to do any other act whereby a benefit is conferred on the Attorney.2. This Power of Attorney is expressly limited to conferring on the Attorney authority to:(a)(b)(c)(d)Enter into and execute on the Grantor's behalf a Guarantee and Indemnity of the Company's obligationsunder the Project Agreements (the Project Guarantee) and, where relevant, a separate Guarantee andIndemnity of the Company's obligations under the Loan Agreement (the Loan Guarantee):(i)(ii)date the said Project Guarantee and, where applicable the Loan Guarantee, and complete asappropriate any blank spaces in the Schedules thereto; andmake and initial any alterations to the Project Guarantee and, where applicable the LoanGuarantee, which are not prejudicial in the opinion of the Attorney to the Grantor's interests.Without limiting the foregoing and following make, do and sign all such acts, deeds and things as maybe necessary to give effect to procure the stamping of the said Project Guarantee and, whereapplicable the Loan Guarantee.Alter, modify, add to or cancel the provisions of the Project Guarantee and, where applicable the LoanGuarantee provided that such alteration, modification, addition or cancellation:(i)(ii)(iii)in the opinion of the Attorney does not and is not likely to adversely affect the interests of theGrantor;is in the opinion of the Attorney, or of a barrister or solicitor instructed by the Attorney, necessary orexpedient to comply with the provisions of any statute, ordinance, rule, regulation or by-law whichmay be passed and which affects projects of the nature of the Project, or is a requirement of anycompetent statutory authority; oris in the opinion of the Attorney made to correct a manifest error or is of a formal, technical oradministrative nature only.Appoint one or more substitute attorneys to exercise the powers granted to the Attorney and to revokeany appointment of any substitute attorney or attorneys made under the relevant document.3. The Grantor agrees that the Grantor shall indemnify and keep indemnified the Attorney against all claimsdemands, costs, damages, losses and expenses, however arising consequent upon the exercise of thePower of Attorney hereby granted, and further agrees to ratify and confirm whatever the Attorney shall do inthe exercise of the power hereby granted.4. This Power of Attorney will be governed by and construed in accordance with the laws of Victoria.5. Words and expressions used in this Power of Attorney have the same meanings as in the Constitution unlessthe contrary requires.6. This Power of Attorney is irrevocable until the expiration of the Project under the Constitution.

Name of GrantorExecuted as a Deed Poll on theName of Companyday ofGrantor sign belowDATE OF SIGNING / /SignatureSignature of WitnessName of WitnessAddress

Dated: 14 June 2013W.A. Blue Gum LimitedABN 91 060 179 982AFS License Number 2462641. ABOUT THIS DOCUMENTThis Financial Services Guide ('FSG') is an important document, which we are required to give to you under therequirements of our Australian Financial Services Licence. It provides you with information about W.A. Blue GumLimited (the 'Company', 'we', 'us' or 'our') to help you decide whether to use the financial services we provide. ThisFSG explains the services we can offer to you and the types of products we offer. It also explains how we (andother related persons) are remunerated for these services, and includes details of our internal and externalcomplaints handling procedures and how you can access them.To invest in any of our financial products you must complete the application form attached to the ProductDisclosure Statement ('PDS'). The PDS contains information about the particular product and will assist you inmaking an informed decision about that product.We only provide general financial product advice and you must seek independent personal financial productadvice to meet your individual financial situation. Personal financial product advice is advice that takes intoaccount one or more of your objectives, financial situation and needs.2. WHO ARE WE?The Company is licensed under the Corporations Act to provide these services to you. Our Australian FinancialServices Licence Number is 246264.We do not act as a representative of any other licensee in relation to the services we provide to you.You can contact us by:• calling 1300 888 511;• writing to us at Level 21, 385 Bourke Street, Melbourne VIC 3000;• emailing us at info@wabluegum.com.au; or• visiting our website at www.wabluegum.com.au.W.A. Blue Gum Limited is an unlisted public company which was incorporated on 19 May 1993. The Company isthe Responsible Entity of a managed investment scheme, WA Blue Gum Project 2013 ARSN 164 105 579. Thescheme involves the sale of Tasmanian Blue Gum (Eucalyptus Globulus) harvested in the south-west of WesternAustralia.3. WHAT FINANCIAL SERVICES AND PRODUCTS DO WE OFFER?The Company is authorised to offer the following financial services:(a)deal in a financial product by:(i)(ii)issuing, applying for, acquiring or disposing of interests in the W.A. Blue Gum Project 2013 ARSN164 105 579;applying for, acquiring, varying or disposing of deposit and payment products (limited to basic depositproducts and deposit products) and general insurance products on behalf of another person;(b)provide general financial product advice in respect of interests in the W.A. Blue Gum Project 2013 ARSN164 105 579; and(c) operate the registered managed investment scheme, W.A. Blue Gum Project 2013 ARSN 164 105 579.

We do not provide financial planning services and only provide general financial product advice in respect ofinterests in the W.A. Blue Gum Project 2013 ARSN 164 105 579. We will not give you personal financial advice ifyou contact us by phone or in writing.4. COMPENSATION ARRANGEMENTSWe hold a professional indemnity insurance policy which satisfies the requirements for compensationarrangements under section 912B of the Corporations Act. Subject to terms and conditions, the policy coversclaims in connection with the professional services provided by our employees and representatives, even wheresubsequent to these actions they have ceased to be employed by or act for us.5. HOW CAN YOU TRANSACT WITH US?You must complete the Application Form in the PDS. Before signing the Application Form, applicants should readthe PDS.The Application Form must not be circulated or distributed unless attached to a copy of the PDS.You can contact us in writing or another method as agreed by us.6. HOW ARE WE PAID FOR THE SERVICES WE PROVIDE?The Company does not receive any fees, nor do we charge you additional fees, for providing general financialproduct advice.7. WHAT COMMISSIONS, FEES OR OTHER BENEFITS ARE RECEIVED?Employees of the Company who give you general financial product advice do not receive payments orcommissions for the giving of that advice. These employees and our Directors may receive salaries, bonuses andother benefits from us.8. THE PDS OR OFFER DOCUMENT FOR THE PARTICULAR PRODUCT WILL DISCLOSE FURTHER DETAILSYou may receive advice in relation to the products we offer from financial advisers who do not work for thisCompany. These advisers may receive remuneration from us. The adviser's remuneration is included in the feesyou pay when subscribing in our product.The amount of this remuneration is set out in the PDS. Your adviser is also required to set out the remunerationand commissions they receive in a Statement of Advice ('SOA'), which they must give to you. Some of theseadvisers may be representatives of other licensees.We may pay commissions of up to 10% of the Application Money to third parties for referring customers to us.9. WHAT SHOULD YOU DO IF YOU HAVE A COMPLAINT?You have the right to enquire into or complain about the operation of our product and service to the extent that itrelates to you or your subscription. We have established procedures to ensure all enquiries and complaints areproperly considered and dealt with. If you have an enquiry or complaint, please telephone or email us.If you are not satisfied with our handling of your complaint you may lodge a complaint with the FinancialOmbudsman Service Limited Scheme. FOS can be contacted by telephone on 1300 78 08 08 or by writing toFinancial Ombudsman Service Limited, GPO Box 3, Melbourne Vic 3001.10. PRIVACYWe respect your privacy and are totally committed to upholding your rights to privacy protection under the PrivacyAct and the National Privacy Principles.This Privacy Statement provides a summary of how we collect, use and disclose personal information.Your personal information is information or an opinion which can be used to personally identify you. We onlycollect personal information that is necessary and relevant for us to provide our services. Subject to any legalrequirements, we handle personal information in accordance with the purpose of its collection. Accordingly, failureto provide any personal information which we request may affect our ability to meet our obligations to you.

We take reasonable steps to ensure that the personal information collected and held by us is protected frommisuse, loss, unauthorised access, modification or disclosure. We also endeavour to ensure that the personalinformation we hold about you is up to date, complete and accurate. If you believe that any personal informationwe hold about you is inaccurate, incomplete or out-dated, please notify our Privacy Officer.Any queries regarding our Privacy Policy should be directed to our Privacy Officer:Privacy Officer:Mr Tom MayPhone: 1300 888 511Address: Level 21385 Bourke StreetMelbourne VIC 3000