download WA Blue Gum Project Product Disclosure Statement 2013

(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