Choice Forestry PDS 2012 - WA Blue Gum Project

Dear Prospective GrowerI invite you to participate in the Choice Forestry Project2012.The Project will be developed on land in the south-westof Western Australia, which the Project’s IndependentForestry Expert, Mr Don Spriggins, considers is verysuitable for the Establishment of Blue Gum plantations.The Responsible Entity has been successful inprocuring an agreement with the very experienced andreputable company W.A. Chip & Pulp Co. Pty Ltd toHarvest and purchase the wood produced by theProject. W.A. Chip & Pulp Co. is owned by twoextremely large Japanese companies, MarubeniCorporation and Nippon Paper Industries Co. TheMarubeni Corporation Group owns and manages treeplantations in Western Australia on a large scale and,in the opinion of the Project Manager, is an industryleader in plantation establishment and management,log Harvesting and woodchipping. The Marubeni Groupis one of the large Japanese Trading Houses. NipponPaper is among the largest paper manufacturers inJapan, which itself is the second or third largest papermaking country in the world.Every business, including agriculture, involves adegree of risk. The major risks identified by theDirectors have been set out in this Combined ProductDisclosure Statement and Financial Services Guide(“PDS”). While the Directors have taken steps toreduce these risks or minimise the adverse impact ofsuch risks in the structuring of the Project, by the termsof the contracts to be entered into and by utilising andconsulting leaders in the forestry sector, this Projectshould be considered long term and speculative.This PDS is divided into three parts. Part A of this PDSis a summary of the key features, rights and obligationsof subscribing to the Project. Having regard to thecomplexity of the choice to invest and volume ofrelevant information, Part A attempts to provide a clear,concise and effective disclosure of the main features,rights and obligations. However, current marketexpectations of prospective Subscribers requiresignificant detailed information to be provided to enablepeople to assess their participation in such products.Part B represents this extensive detailed information.Part C of this PDS is a Financial Services Guide whichthe Responsible Entity is required to provide toprospective Subscribers. All parts should be read intheir entirety.Please give the Project your most carefulconsideration.Yours sincerelyA. H. MayChairmanW.A. Blue Gum LimitedThe Responsible Entity has paid careful regard toASIC’s Regulatory Guides and to the stated objectivesof the current product disclosure regime.

SectionPage1. DIRECTORY 42. DICTIONARY 5PART A: PRODUCT DISCLOSURE STATEMENT 7PART B: DETAILED INFORMATION 133. WHY BLUE GUM? 143.1 International Markets 143.2 Government Support 153.3 Environmentally Beneficial 153.4 Good Returns 153.5 Growing Demand 163.6 Attributes of the Species 163.7 Diversification of Asset Classes 163.8 Employment Opportunities 164. PROJECT STRUCTURE 175. FEATURES OF THE OFFERING 185.1 Quality of the Land 185.2 Reports 185.3 Experienced and Cutting Edge Operations 185.4 Insurance 185.5 Involvement of Marubeni Corporationand Nippon Paper Industries Co 195.6 Compliance Plan 195.7 Compliance Committee 195.8 Improved Seedlings 195.9 Forward Sale of all the Wood 195.10 Audit of the Compliance Plan 205.11 Experienced Forestry Consultant 205.12 The Responsible Entity 20

5.13 Carbon and Environmental Credits and Debits 215.14 Conflicts of Interest 215.15 Uncomplicated Finance 225.16 Complaints by Growers 225.17 Anti-Money Laundering and Counter-TerrorismFinancing Amendment Act 2007 226. INDEPENDENT FORESTRY EXPERT'S REPORT 237. FEES AND OTHER COSTS 288. DIRECTORS OF THE PROJECT MANAGER 339. ADDITIONAL INFORMATION 349.1 Material Contracts 349.2 Inspection of Documents 349.3 Consents of Experts and Disclaimers 349.4 Interests of Directors and Experts 349.5 Interests of the Custodian 359.6 Interests of the Project Manager 3510. DETAILS OF PRINCIPAL AGREEMENTS 3610.1 Summary of Constitution 3610.2 Summary of Scheme Property Custody Agreement 3910.3 Summary of the Project Management Contract 3910.4 Summary of Sub-lease 4010.5 Summary of Plantation Services Agreement 4210.6 Summary of Wood Purchase Agreement 4210.7 Summary of Joint Venture Agreement (if applicable) 4311. HOW TO PARTICIPATE 4412. APPLICATION FORM 4513. POWER OF ATTORNEY 4914. (IF APPLICABLE) POWER OF ATTORNEY FOR GUARANTEE ANDINDEMNITY WHERE THE APPLICANT IS A COMPANY 5115. APPLICATION FOR FINANCE 53PART C: CHOICE FORESTRY PROJECT 2012 FINANCIAL SERVICES GUIDE 56

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

In this Product Disclosure Statement, unless the contrary intention appears, the following words have the followingmeanings:Agreement to Sub-leaseApplicantApplication FormApplication FundApplication MoneyASICCompliance PlanConstitutionCorporations ActCustodianDirectorsmeans (when applicable) the agreement to sub-lease between W.A. BlueGum Limited and the Grower, or in the case of Joint Venture Growers, thesecond Joint Venture Grower, pursuant to which that Grower agrees to takea sub-lease of property on which to Establish Plantations, details of whichare set out in Section 10.4means a person who has duly completed and submitted an Application tothe Responsible Entity Application means a duly completed ApplicationForm pursuant to which an Applicant applies for an Interest in the Projectmeans the application form attached to and accompanying this PDSmeans the bank account opened by the Project Manager for the purpose ofreceiving all Application Moneysmeans the amount which every Applicant is required to pay for an Interest inthe Project (i.e. $10,000 (including GST) per hectare, the minimum amountbeing $20,000 (including GST) being the amount required to Establish 2hectares of plantations and partially pre-pay rent )means the Australian Securities and Investments Commissionmeans 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 timemeans the directors of W.A. Blue Gum Limited ACN 060 179 982, being theResponsible Entity and Project ManagerDivision 394 means Division 394 of the ITAA 1997EstablishmentEstablishment PeriodForestry ContractorGrowerHarvestIndexedInterestITAA 1936ITAA 1997means all silvicultural activities until and including the first planting of thePlantation and the application of fertilisers and herbicides at the time of thefirst planting of the Plantationmeans the period described in Division 394 of the ITAA 1997 ending no laterthan 18 months after the end of the year of income in which the ApplicationMoney is paidmeans WACAP Treefarmsmeans a person who holds an Interest in the Project (and in the case ofJoint Venture Growers, both of them) and whose name has been enteredinto the register 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 Consumer PriceIndex (All Groups, Perth) during the preceding 12 months or during suchother 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)means the Income Tax Assessment Act 1997 (Cth)

Joint Venture AgreementJoint Venture GrowersLoan AgreementMAIPDSPlantation Development and Tending PlanPlantationsProceeds Fundmeans the agreement between Joint Venture Growers, details of which areset out in Section 10.7means two Applicants who are participating in the Project as Joint VentureGrowers in accordance with a Joint Venture Agreementmeans an agreement between a Grower and Albany Financial Pty Ltd up to80% 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 annexed tothe 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 the purposeof receiving all sale proceeds from the sale of the timberProject means the Choice Forestry Project 2012 (ARSN 158 182 293)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 10.3means W.A. Blue Gum Limited ACN 060 179 982 in its capacity as managerof the Projectmeans the scheme property of the Project as defined in Section 9 of theCorporations Actmeans W.A. Chip & Pulp Co.means W.A. Blue Gum Limited ACN 060 179 982 which is named in ASIC’srecord of scheme registration as the responsible entitymeans the sub-lease between W.A. Blue Gum Limited and each Growerpursuant to which each Grower sub-leases property on which to EstablishPlantations, details of which are set out in Section 10.4means 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 Uncontrolled EventW.A. Chip & Pulp Co. means W.A. Chip & Pulp Co. Pty Ltd ACN 008 720 518WACAP Treefarms means WACAP Treefarms ACN 009 378 607WAPRES means WA Plantation Resources Pty Ltd ACN 094 151 792Wood Purchase Agreementmeans the agreement for the sale of the timber from the Plantations detailsof which are set out in Section 10.6

OverviewProspective Growers are invited to sublease 2 or moreidentifiable allotments of land (1 hectare each), for anestimated 10 year term as part of a commercialTasmanian Blue Gum (eucalyptus globulus) plantation.Each hectare is likely to contain between 900 and 1,000trees, 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 250 hectares, or more,subject to land of the required quality being available.• Application Money* per hectare: $10,000 (includingGST)Minimum of 2 - $20,000 (including GST)• Ongoing fees per hectare - rent, management andadministration costs: $445.50 (including GST)Minimum of 2 - $891 (including GST) (Indexed)per annum• Other fees:Harvest, transport costs: to be deducted fromHarvest proceedsHarvest supervision fees: 3.3% (including GST) ofnet Harvest proceedsIncentive bonus: 15% of excess return above$18,000 (including GST) (Indexed) per hectareInsurance: approximately 0.7% of insured value(including GST)Credit (or similar) card merchants fee for Growerswho make payments under the Project using acredit or similar card (presently 1.25% of theamount paid)Finance available• Project term: approximately 10 years• Offer closes: 30 June 2012* The Application Money consists of the amount necessaryto Establish a plantation and partially prepay the rent,please see Section 7 of this PDS for a full explanation ofall fees and charges.BenefitsFull ‘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 the Project Managercan negotiate with any other potential buyers for a higherprice. W.A. Chip & Pulp Co. then has the option of meetingthat higher price.All Operations by Industry ExpertsThe Project Manager has contracted noted industryexperts to assist with the operation of the Project includingWACAP Treefarms as Forestry Contractor (jointly ownedby the Marubeni Corporation and the Nippon PaperIndustries Co) and a forestry consultant with extensiveexperience in Western Australia, particularly withTasmanian Blue Gum.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, plantations createa sink for greenhouse gasses and help relieve salinity andsoil erosion.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 to that effect have been applied for to theAustralian Tax Office.Growers should seek independent advice in relation to alltaxation issues.Ongoing Government supportSuccessive Federal Governments have renewed theirbacking of the “2020 Vision” of trebling plantation forestareas in Australia in the period from the mid-1990’s to2020 to 3 million hectares, and the Division 394 taxlegislation was introduced for the explicit purpose ofencouraging more tree plantations.

Date of PDS: This PDS is dated 15 May 2012Issued By: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.auProject Name: CHOICE FORESTRY PROJECT 2012ARSN 158 182 293The Project:The Project involves the Establishment and tending ofTasmanian Blue Gum (Eucalyptus globulus) plantations forthe Harvesting and sale of timber. The Project is amanaged investment scheme registered under theCorporations Act. W.A. Blue Gum Limited is theResponsible Entity and the Project Manager. The ProjectManager has been involved in forestry operations for over10 years and currently manages thousands of hectares ofeucalypt plantations in Western Australia on behalf ofsubscribers to previous offer documents.Pursuant to the Project Agreements the Project Managerwill arrange the Establishment, tending, felling andHarvesting of Blue Gum plantations to be known as the“Choice Forestry Project 2012”.The duties of the Project Manager include the following:• Establishing the Plantations within theEstablishment Period for the purposes of felling andHarvesting; and• tending the Plantations until felling and Harvestingtake place.The Project is to be established on land in the south-westof Western Australia between Bunbury and Albany. TheProject Manager seeks to raise approximately $2,500,000based on the present land availability outlook. The ProjectManager may accept oversubscriptions, the amount ofwhich will be subject to the availability of land of thedesired quality. Each Grower will sub-lease a specific andidentifiable area of the Project Land from the ProjectManager pursuant to a Sub-lease.The Project Manager leases the Project Land from variousfarmers or alternatively, sub-leases from W.A. Chip & PulpCo. or WACAP Treefarms. In all instances, the head leasebetween the Project Manager and the farmer, oralternatively, the sublease between the Project Managerand W.A. Chip & Pulp Co. or WACAP Treefarms is to beregistered with the Office of Titles, Perth therebyprotecting the Project Manager’s and ultimately theGrower’s interest in the Project Land.Each Grower will enter into Project Agreements with theProject Manager. The Project Agreements consist of aSub-lease (and/or an Agreement to Sub-lease), a ProjectManagement Contract and a Wood Purchase Agreement.Where not all the Project Land is available for a particularGrower on or before 30 June 2012, the Project Managermay still accept the Grower’s Application subject to a Subleasebeing entered into on behalf of the Grower andlodged for registration by 30 September 2013.In these circumstances, the Grower will be required toenter into an Agreement to Sub-lease with the ProjectManager.It is anticipated that the Blue Gum trees Established andmaintained under this Project will be available forHarvesting as woodchips in about ten years. However, thetimber may be sold at any time between 2020 and 2024.Under the terms of the Wood Purchase Agreement, W.A.Chip & Pulp Co. will buy the wood unless the ProjectManager can negotiate better terms with a reputable thirdparty after first allowing the Purchaser the opportunity tomatch the price offered by the other party interested inpurchasing the wood (see Section 10.6 of Part B of thisPDS). The precise date of purchase will depend upon boththe growing conditions that have existed during the term ofthe Project and an assessment by the Purchaser of themarket conditions at the relevant time. It is likely that thedate of purchase will vary from one block of Project Landto another.It is a possibility that the whole or part of the wood grownwill be suitable for a higher value use such as flooring. Ifthis turns out to be the case then the Growers and thePurchaser will decide together on the best way to dealwith the grown wood. It cannot be predicted with anyaccuracy whether (and, if so, to what extent) it would bewise or necessary to allow a longer rotation in order totake advantage of the higher value. This PDS ignorescompletely the possibility of a use with a higher value thanas woodchips.All net income on the sale of a Grower's interest in thePlantations (plus any carbon and environmental credits)will be paid progressively to the Custodian for distributionto each Grower. The proceeds from the sale of the woodwill be pooledand the net proceeds distributed to Growerson a pro rata basis, i.e. in the same proportion that thenumber of hectares held by each Grower bears to the totalof all hectares comprising the Project.If unforeseen expenses in relation to things such asfertiliser and/or insect issues arise, the Project Manager isentitled to convene a meeting of all Growers. The Growersmay, by majority vote, agree to meet such expenses, inwhich case these expenses will be borne between all theGrowers in proportion to the number of hectares held inthe Project by each Grower.It is the intention of the Project Manager to terminate theProject upon the distribution of the proceeds from the firstHarvesting of the Plantations. The Project may continuefor the period ending up to 15 years after the date of thelast acceptance by the Project Manager of an Applicationfrom an intending Grower unless otherwise determined bythe Project Manager or the Growers.

Joint Venture Growers:Two applicants may participate in the Project as JointVenture Growers. Under this arrangement, the first JointVenture Grower is responsible for all activities associatedwith the Establishment of the Plantation and the feespayable in respect of those activities and amounts payablein the application year (including pre-paid rent) and thesecond Joint Venture Grower is responsible for ongoingrent, management and administration fees payable in allsubsequent years. Joint Venture Growers will be entitledto one half of the proceeds of sale of the timber from thePlantations.Each Joint Venture Grower will be responsible for theirportion (being 40% for the first Joint Venture Grower and60% for the second Joint Venture Grower) of all insurance,Harvesting, transportation and supervision costs andincentive fees payable out of the proceeds of the sale ofthe timber.Throughout this Product Disclosure Statement, anyreference to a Grower includes a reference to JointVenture Growers.Benefits:Benefits of the Project include:(a)(b)(c)(d)(e)The soil characteristics and rainfall conditions of theProject Land has independently been assessed asbeing of superior quality for Blue Gum plantations.The Project Manager has selected improvedseedlings which analysis indicates can be expectedto produce in the vicinity of over 20% more wood(in dry weight terms) than trees grown fromaverage native forest seed.The Project Manager has negotiated a woodpurchase agreement with W.A.Chip & Pulp Co.,another company owned by Marubeni Corporationand Nippon Paper Industries Co. The Harvestedtimber will be sold to W.A. Chip & Pulp Co. at anagreed price provided that, if the Project Manageris able to negotiate a higher price with a genuinethird party, the Project Manager will be free to sellthe timber to that third party unless W.A. Chip &Pulp Co. matches the offer.The Board of the Project Manager includesDirectors with extensive forestry expertise andproven performance in the management of BlueGum plantations. Two of the Directors have over 25years experience in the growing of softwood andhardwood plantations. The Project's principalForestry Contractor, WACAP Treefarms, is ownedby Marubeni Corporation, a Japanese companywhich is one of the world’s leading trading housesand the largest customer for pulpwood fromWestern Australia since 1976 together with NipponPaper Industries Co, one of Japan’s largest papermaking companies. In addition, the ProjectManager has engaged one of Australia's leadingforesters to assist in the supervision of the ForestryContractor.The Project Manager consults with and is advisedby leading forestry experts, employs soundsilvicultural and environmental practices and(f)(g)(h)(i)Risks:engages a leading forestry company to provideforestry services.The pooling of receipts from the sale of wood bothspreads the risk to each Grower and, at the sametime, results in a more significant market presenceat the time of selling the Wood.The possibility of significant financial gains beforeand after income tax is taken into account.Tax deductibility of the costs of the Project.The Federal Government is committed to thesupport and the expansion of the Australianplantation forestry industry, as confirmed in“Plantations for Australia: The 2020 Vision”, whichencourages the increase of plantation forest areasin Australia over a 25 year period to 3 millionhectares.The Project is long term and, accordingly, speculative innature and is subject to the risks of such an undertakingincluding (but not limited to):(a)(b)Market risks such as:(i)(ii)(iii)(iv)(v)changes in demand and price for timber dueto economic downturn, global and Australiancompetition and consumer productrequirements and preferences;oversupply of timber products to relevantmarkets;changes in pulp technologies;distributor consolidation and rationalisation;andchanges in price for business inputs such aslabour and materials;Regulatory risks such as:(i)(ii)(iii)(iv)(v)(vi)obtaining all necessary government andregulatory approvals;access to infrastructure (eg power, irrigation,transport, water);changes in government and regulatorylegislation and requirements (e.g. taxation);changes in levies, duties and imposts;the failure to obtain or the withdrawal ofProduct Rulings that have been applied forconcerning the taxation treatment for theProject by the Australian Taxation Office orsubsequent non compliance with the termsof the Product Ruling; andwithdrawal of this PDS or the ProjectManager’s Australian Financial Serviceslicence by ASIC for non compliance with theConstitution, Compliance Plan and/orCorporations Act;

(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 other acts of God;insect and vermin infestations andagricultural diseases;quarantine restrictions and regulations inAustralia and globally;suitability of seedlings;suitability of forestry techniques;environmental impact and obligations andregulations imposed by the government andother bodies;accessing and adapting Harvesting andprocessing technology and technologiesgenerally;regulatory approval;misinterpreting transportation andHarvesting requirements and locations; andmisinterpreting soil, climatic, water and othersite conditions.Financial risks such as:(i)(ii)(iii)(iv)ability to achieve assumed yields and prices;price and cost movements;changes in the Australian exchange rate andforeign currency exchange rates; andinterest rate variations;Other risks such as:(i)(ii)(iii)(iv)(v)the solvency and cash flow position of theProject Manager, the Project Manager’sassociates, subcontractors and otherrelevant parties;default by the Project Manager, the ProjectManager’s associates, subcontractors andother relevant parties under the materialagreements;loss of key staff;Uncontrolled Events; andthe Applicants’ ability to pay their annualcontributions.The Project Manager has endeavoured to minimise theserisks as far as possible by arranging particularlyappropriate sites for the Plantations and by engagingexperts as prominent and independent as the ForestryContractor and the forestry consultant to provide theservices mentioned in Sections 5.5 and 5.11 of Part B ofthis PDS respectively.Fees and Other Costs:Refer to Section 7of this PDS.Growers contribute a minimum of $20,000 (including GST)(being the amount necessary to Establish 2 hectares ofplantations at $10,000 (including GST) per hectare andthereafter in multiples of $10,000 (including GST) (foreach extra hectare). There is no restriction on themaximum initial contribution that a Grower may make.Taxation Information (General)Division 394 of the ITAA 1997 contains a specificdeduction provision for contributions to forestry schemes.In projects operating under this legislation, there is nolonger a requirement for taxpayers to demonstrate thatthey are “carrying on a business” in order to access thededuction or that the amount paid is of a revenue nature.Division 394 provides that initial investors in forestrymanaged investment schemes will receive a tax deductionequal to 100% of their paid contributions (both initial andongoing) and subsequent investors will receive a taxdeduction for their ongoing contributions to forestryschemes, provided that the Project Manager will spend anamount equivalent in net present value terms, to at least70% of the amounts paid by Growers on Establishing,tending and felling trees for Harvesting (“70% DFE rule”).In addition to the 70% DFE rule, there are also otherrequirements such as:(a)(b)(c)(d)the entity claiming the deduction must be a Growerin a forestry scheme whose purpose is Establishingand tending trees for felling only in Australia;a Grower does not have day-to-day control over theoperation of the scheme;the trees intended to be Established in accordancewith the scheme have all been Established within18 months of the end of the income year in whichthe first payment is made by a Grower;the initial participant must hold an interest in theProject for at least four years.Division 394 also contains some specific items which arenot eligible for inclusion in the 70% DFE Rule.Interest and borrowing costs paid by a Grower will not becovered by Division 394 and should continue to bedeductible under the relevant provisions of the ITAA 1936and the ITAA 1997 (eg, Sections 8-1 and 25-25 of theITAA 1997, respectively), provided the relevant tests forthose provisions are met.Where a Grower disposes of interests within 4 years, anydeduction obtained by that Grower under Division 394 willbe reversed in the income years claimed.Where two Applicants apply as Joint Venture Growers thefirst Joint Venture Grower should be entitled to a deductionfor the cost of Establishing the Plantation and up frontpayments of rent i.e. the $10,000 (including GST) perhectare which will be paid pursuant to the ProjectManagement Contract and for interest on any borrowedfunds used to finance its contribution, when incurred. Thesecond Joint Venture Grower should be entitled todeductions for ongoing payments of rent, managementand administration fees and for interest on any borrowed

funds used to finance its ongoing costs, when incurred.Both Joint Venture Growers should be entitled todeductions for their proportion of insurance, Harvesting,supervision, transportation and incentive fees.Under Division 394 the Project Manager will have thefollowing obligations:(a)(b)if trees are not planted within 18 months of the endof the income year when the Application Moneywas paid by a Grower (i.e. 31 December 2013),within 3 months after the end of that 18 monthperiod, to give the Commissioner of Taxation thestatement required under Division 394 in relation toreasons why this condition was not satisfied; andto use its best endeavours to keep records for thelife of the Project plus 5 years.It is possible that there will be further changes in taxationor other legislation which may have a positive, oralternatively a negative, effect upon the Project.A Product Ruling for this Project has been applied for fromthe Australian Taxation Office and copies of the ProductRuling will be available free of charge from the ProjectManager or from the Australian Taxation Office(www.ato.gov.au) after it is issued.The Tax Laws Amendment (2009 Budget Measures No. 2)Act 2009 (Cth) came into force in December 2009. Theintention of the Act (among other things) is to amend the‘non-commercial losses rules’ in relation to individuals withan ‘adjusted’ taxable income of $250,000 or more. Thenon commercial losses rules will now not apply toindividuals with an adjusted taxable income of $250,000 ormore only if they can satisfy the Australian Tax Office,based on an objective expectation, that the businessactivity will produce assessable income greater thanavailable deductions within a commercially viable periodfor the industry concerned. The Australian Tax Office hasalways exercised a very similar discretion in its previousProduct Rulings and it is anticipated that the ProductRulings applied for by the Responsible Entity for thisProject will continue to provide this result.A Product Ruling issued by the Australian Taxation Officeis only a ruling on the application of taxation law and is inno way expressly or impliedly a guarantee or endorsementof the commercial viability of the Project, of the soundnessor otherwise of the Project, or of the reasonableness orcommerciality of any fees charged in connection with theProject. Further, a Ruling is only binding on theCommissioner if the Project is implemented in the specificmanner provided in that Product Ruling.However, it is possible that the law may be amended atany time or that the interpretation thereof by the Courtsmay alter. If any deduction claimed by a Grower isdisallowed by the Commissioner of Taxation, penalties andinterest may be imposed.Growers will be liable to pay to the Project Manager anamount equivalent to the whole of the GST liability (if any)of the Project Manager in respect of supplies made toeach Grower under the Project Agreements. However,provided that a Grower has an Australian BusinessNumber and receives a tax invoice in relation to thepayment, the Grower should be able to obtain a credit orrefund in relation to any GST component paid because theGrower is likely to be carrying on an “enterprise” within themeaning of the GST legislation.Growers should seek independent advice in relation to alltaxation issues.Uncomplicated Finance:All participating Growers may borrow up to 80% of theApplication Money from Albany Financial Pty Ltd, companyassociated with the Project Manager. Amounts borrowedare to be repaid in monthly instalments by way of directdebit over the period ending on 15 June 2017. Eachinstalment is of both principal and interest.Interest is charged on the reducing principal at anindicative interest rate of 12.75% per annum (see Section5.15 of Part B of this PDS). There is no loan establishmentfee payable in respect of this finance package.Growers will not be required to submit any financialinformation in order to obtainthis finance. No security (otherthan a charge over the Grower’s interest in the Project andthe proceeds of sale of wood) will be required.Dispute Resolution:The Constitution has an internal complaints handlingprocedure requiring the Project Manager to provide writtendetails of the procedure which includes endeavouring toprovide a final response in respect of a complaint within 45days of receiving the complaint. Section 5.16 of Part B ofthis PDS provides a summary of the complaints handlingprocedure.If a Grower is not satisfied with the outcome of the internalcomplaints handling procedure then the matter can bereferred to the Project Manager’s external disputeresolution scheme, the Financial Ombudsman ServiceLimited. The Project Manager is a member of that scheme.Ethical Considerations:The extent to which labour standards or environmental,social, or ethical considerations were, are and will beconsidered by the Project Manager in the selection,retention or realisation of the investment are:(a)(b)(c)(d)Blue gum plantations offer significant environmentalbenefits including:(i)(ii)(iii)(iv)the mitigation of carbon dioxide emissions;the lowering of water tables to amelioratesalinity;the improvement of soil structure anddrainage; andeffective wildlife corridors for native fauna.The Project Manager will have regard to the FairWork Act 2009 (Cth), industrial awards and industrystandards affecting its employees.The Project Manager has assumed that anysubcontractor will have regard to the Fair Work Act2009 (Cth), industrial awards and industry standardsaffecting the subcontractor’s employees.The Project Manager will have regard to thedirections of the government bodies and otherregulations affecting the Project Land.

(e)(f)(g)The Project Manager has chosen the south-westregion of Western Australia for its climate, soil andrainfall conditions. Most of the relevant localCouncils have actively encouraged the region as acentre of forestry expertise with excellentinfrastructure and a skilled labour force suitable toachieving the objectives of the Project.The Establishment of Plantations usually reducesthe risk of fire. In most cases, Blue Gum plantationfires spread far more slowly than grass, crop ornative bush fires under the same conditionsresulting in less area being burnt. The risk ofdamage by fire is further minimised by the ProjectManager through its maintenance of access roadsand firebreaks and its procedures for early firedetection and suppression.The Project Manager is committed to providing bestpractice forestry and to ensuring compliance withthe Code of Practice for Timber Plantations inWestern Australia and other relevant national andinternational industry standards.Commissions:The Project Manager may pay commissions not exceeding10% in total of the Application Money to eligibleintermediaries. This amount may be paid over a period ofone or more years.Secondary Markets:Division 394 enables Growers to trade interests in forestryschemes through a secondary market.Under Division 394, deductibility of Growers’ contributionswill not be affected if Growers dispose of their interests inthe Project prior to Harvest but have held the interests inthe Project for at least 4 years from the end of the financialyear in which Growers made a first payment to the ProjectManager.A market value pricing rule will apply for existing interestsin forestry schemes that are traded by Growers.Growers should seek independent advice in relation to thetaxation treatment of subsequent Growers in thesecondary market.Continuous Disclosure:The Project Manager, as Responsible Entity, will besubject to regular and continuous reporting and disclosureobligations if interests in the Project are ED securities.Interests in the Project will be ED securities if 100 or morepeople hold interests in the Project.No Cooling Off Period:Due to the nature of the Project there is no cooling offperiod for Applicants.No Minimum Subscription for the Project:There is no minimum subscription required for the Projectto commence.Application:Applications can only be made on the attached ApplicationForm and are accepted by the Project Manager in itsabsolute discretion.Closing Date:The Project Manager will not accept Applications receivedafter 30 June 2012.AFS Licence:Refer to Section 5.12 of this PDS.ASIC:ASIC takes no responsibility for the content of this PDS.Further Information:Copies of this PDS and documents specified in the PDS orrequired by law may be obtained or inspected at suchreasonable times as agreed by contacting the ProjectManager.Copies of the following documents lodged with ASIC inrelation to the Project may be obtained or inspected bycontacting ASIC:(a)(b)the annual financial report; andif the interests are ED securities, any:(i)(ii)half-yearly financial report; andcontinuous disclosure notices.

PART B: DETAILED INFORMATIONIMPORTANT NOTICEThis PDS relates to the offer of Interests in the registeredmanaged investment scheme known as the ChoiceForestry Project 2012 ARSN 158 182 293. Applications forInterests can only be made on the Application Formattached to or accompanying this PDS.This PDS does not constitute an offer or invitation in anyjurisdiction or to any person where, or to whom, it wouldbe unlawful to make an offer or invitation. Persons whocome into possession of this PDS should seek advice onand observe any restrictions on accepting an offer ordistributing this PDS. Any failure to comply mightconstitute a violation of applicable securities laws. While aforeign applicant is entitled to invest in the Project, anApplication may need to be made to the ForeignInvestment Review Board for approval.This is an important document and you should read itcarefully. In particular you should consider the risk factorsset out in Part A of this PDS that could affect theperformance of the Project. You should carefully considerthese factors in light of your personal circumstances(including your financial and taxation circumstances). Youmay wish to consult your stockbroker, accountant,independent financial advisor or lawyer.No person guarantees the success of the Project nor anyparticular financial outcome from participation in theProject nor the taxation consequences of participating inthe Project.Some words in this PDS have defined meanings. Thedefinitions appear in the dictionary in Section 2 exceptthose that appear in Section 10 (Details of PrincipalAgreements) which are defined by reference to theparticular agreement. Financial amounts are in AustralianDollars unless otherwise specified.Photographs used in this PDS are for illustrative purposesonly. They do not represent the proposed Project.This PDS does not constitute an offer in any jurisdictionother than Australia.

3.1 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. TheProject Manager believes that there is reason foroptimism regarding further 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 successfullyestablished in Western Australia by a variety ofcompanies, thereby providing a platform for thisindustry. Western Australia has more Blue Gumplantations than 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 to medium 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 Project Manager predicts a shortfall in thatmarket of five million cubic metres per annum 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 are expected to risefrom approximately 1.1 million tonnes in 2007 to 3.5million tonnes in 2012.Paper production in China has trebled since 1990and the Chinese market has now surpassed Japanas the second largest paper making country in theworld in absolute terms.China currently consumes approximately 50 milliontonnes of paper per year. Research indicates thereis a direct correlation between economic growthand demand for paper products. China which hasaveraged more than 8% growth for the past 26years, has an enormous potential for demand ofpaper products. It is estimated that the 2011imports to China will reach approximately sevenmillion tonnes equating to a 37% increase on the2010 figures. It has also been reported that therehas been record woodchip imports into China withthe first 10 months of 2011 already equalling morethan the entire 2010 import volume. In addition tothe increase in volume, the Project Managerexpects that the average value for importedwoodchip will also continue to increase as the pricein the third quarter of 2011 was 22% higher than in2010. Hence, it is expected that the continuinggrowth and development of China will havemassive implications for world trade and forestproducts trade in particular. This suggests apossible new export market for Australianwoodchips.China is installing many very large paper makingmills 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 market forwoodchips and Australia is its principal supplier. In2009, Japan imported approximately 15.1 millioncubic metres of hardwood chips of which Australiasupplied about 40%. Japan uses hardwoodwoodchip imported from Australia for the productionof writing and printing paper. Over the past fewyears there has been a downward trend in thevolume of woodchip exports from the United Statesto Japan as they are consumed domestically. Also,significant environmental pressure due to currentHarvests being almost exclusively from nativeforests has resulted in reduced production volumes.Consequently, Australian woodchip exports toJapan have increased.In recent years Australia’s major competition intothe Japanese market has been from Chile andSouth Africa. It appears that supply from both thosecountries into Japan is likely to fall. Chile now hasnew and large milling facilities at home and willcontinue to use more of its tree fibre for domesticproduction of paper for ultimate sale into NorthAmerica. South Africa has a reduced supplybecause of water and other limitations.It is suggested that Japan’s dependence onimported woodchips would likely result in itswillingness to pay higher premiums on the supply ofwoodchips as plantation grown Eucalypts fromSouth America and South Africa are consumeddomestically or marketed 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 also current discussion about thepossibility of the Indian economy starting toemerge.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.There are good export facilities at the Bunbury portthat have been used for over 25 years.Additionally, export facilities at the Albany portcommenced operation in March 2002. The land inthis Project will be situated within a commerciallyviable distance 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.3.2 Government SupportFederal Governments of both persuasions haveoften renewed their backing for the “2020 Vision” oftrebling plantation forest areas in Australia in theperiod from the mid-1990’s to 2020 to 3 millionhectares. Under this policy, a targeted average of80,000 hectares is required to be planted eachyear.In this context, the Division 394 legislationregarding taxation of forestry was introduced for theexclusive purpose of encouraging further plantationgrowth in order to reduce reliance on both nativeforests and overseas imports (see Part A: GeneralTaxation Information).3.3 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 fromcarbon dioxide, 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 by 2022 (which is thearound the time that the Harvesting of the treesgrown in the Project is likely to take place) that over75% of hardwood woodchips in Australia will bederived from plantations rather than native forest.There has been a sharp decrease in the amount ofnative forest available in Australia for woodproduction, with a fall in excess of 30% in respectof the 11 years to 2008.A biomass plant has recently been established inthe south-west of Western Australia. Such a plantwill most probably require fibre resulting fromtimber Harvesting operations. Accordingly, it ispossible that some additional revenue will bederived by Growers. The use of biomass is anexample of electricity production from renewableresources and is environmentally beneficial.There is signification use of this method to produceenergy across Europe.3.4 Good 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 and inthe opinion of the Project Manager, will rivalplantations grown elsewhere in the world. Growthrates are maximised by the implementation ofsilvicultural techniques (especially in relation to theoptional 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 Project Manager. As a result, theDirectors have elected not to provide forecastreturns for the Project.Each Grower’s net return is calculated by grosssales less all costs and the Project Manager’sincentive fee.Other risks and factors as set out on pages 10 to 12of 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 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.The Asian region is projected to account forapproximately 40% of the total increase in worlddemand by about 2015. Hardwood fibre, extractedfrom Blue Gum is a preferred raw material for theproduction of high quality paper. In fact, most millsrequire that some, if not all, of their timber input behardwood 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.3.6 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.3.7 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.3.8 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 decline byproviding an alternative source of employment”.The study also shows that over time newbusinesses are established in the regions toprovide goods and services to the growingplantation sector.

GrowersConstitutionProject ManagementAgreementSub-leaseWA Blue Gum Limited(Responsible Entityand Project Manager)SchemePropertyCustodyAgreementSandhurst TrusteesLimited (Custodian)PlantationOperationsWood SalesFinanceForestrySupervisionPlantationServicesAgreementWoodPurchaseAgreementLoanAgreementAgreementfor theprovision ofConsultingServicesWACAPTreefarms Pty Ltd*(ForestryContractor)WA 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.

The particular attractive features of the Choice ForestryProject 2012 are as follows:5.1 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 have beenselected 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 Australia hasexpanded, it has been noted that it becamenecessary for many companies to establish andplant in more marginal land. The Project Managerhas steadfastly refused to follow this trend, as to doso is entirely inconsistent with its policy ofmaximising each Grower’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 under thisPDS has an anticipated yield of wood that is muchhigher than is usually found in projects offered forpublic subscription. 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.Land which has an MAI which is say, 33%, higherthan other land will be likely to yield to a Grower agross return at the end of the Project 33% greaterthan the 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.5.2 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.5.3 Experienced and Cutting Edge OperationsWACAP Treefarms has been engaged by theProject Manager to supply and to plant the BlueGum seedlings and tend the Plantations. Under theterms of the Wood Purchase Agreement (refer toSection 10.6), W.A. Chip & Pulp Co. will Harvestand buy all the wood unless the Project Managercan negotiate better terms with a reputable thirdparty.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 and the Forestry Co.-operativeResearch Centre. The Project is able to take the fullcommercial advantage of the certifications.5.4 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 theannualpremium has been at a rate of about 0.7% of

the insured 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 of thePlantations is expected to rise.(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.A decision will be made separately each year as tothe insured value, which may be less than the fullmarket value. However, the Project Manager willendeavour to ensure that the insured value will notbe less than $5,000 per hectare.5.5 Involvement of Marubeni Corporation andNippon Paper Industries CoWACAP Treefarms and W.A. Chip & Pulp Co. areboth owed by the Marubeni Corporation andNippon Paper Industries Co. These companies,through their holding company, WAPRES, own andmanage tree plantations in Western Australia on alarge scale and, in the opinion of the ProjectManager, are industry leaders in plantationestablishment and management, log Harvestingand woodchipping. Marubeni Corporation andNippon Paper Industries Co have not been involvedin the preparation of this PDS. They areindependent parties (see also Section 10.3).5.6 Compliance PlanThe Project is regulated by Chapter 5C of theCorporations Act.Accordingly, the Responsible Entity’s operationsand business activities are subject to both theProject’s Constitution and Compliance Plan. Bothdocuments have been lodged with ASIC inaccordance with the requirements of theCorporations Act.The Compliance Plan outlines how the ResponsibleEntity will operate the Project to ensure that itcomplies with the Corporations Act, the Constitutionand any other operating requirements set down bythe board of Directors of the Responsible Entity.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.5.7 Compliance CommitteeThe Responsible Entity has established aCompliance Committee in accordance with theterms of the Compliance Plan. The ComplianceCommittee members are: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.5.8 Improved SeedlingsAn analysis of nearly 70,000 trees grown from seedcollected throughout a range of Blue Gum trees hasshown 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 2012.5.9 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 the Project Manager to negotiate withany other potential buyers for a higher price. W.A.Chip & Pulp Co. then has the right to match thesebetter terms, in which case W.A. Chip & Pulp Co.will be the buyer. The market for Blue Gum isusually competitive and there does not appear tobe any reason why this will change at the time ofHarvest.

5.10 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 in relation tothe Project and believes that thecontravention has not been and will not beadequately dealt with by commenting on it inthe auditor's report or bringing it to theattention 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.5.11 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.5.12 The Responsible EntityThe Project Manager is the Responsible Entity ofthe Project and is responsible for the operation andmanagement of the Project. The Responsible Entityis an unlisted public company.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:(d)(e)(f)(g)28 May 2010 to permit the ResponsibleEntity to act as the responsible entity foranother project (which is not proceeding atpresent) and to 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;and15 May 2012 to permit the ResponsibleEntity to act as the responsible entity for theProject.The Responsible Entity, in its own capacity,maintains a cash deposit to ensure that it meets thefinancial requirements under its Australian FinancialServices Licence including the minimum nettangible asset requirement of $50,000.Copies of the audited annual financial reports ofResponsible Entity are available from ASIC or bycontacting Responsible Entity.The Responsible Entity operates the Projectthrough a discretionary trust known as the W.A.Blue Gum Management Trust (“Trust”). TheResponsible Entity is the trustee of the Trust andreceives the income from Growers in the Schemein its capacity as trustee of the Trust. It also meetsthe expenses of the Scheme from this income.Accordingly the Responsible Entity receives allamounts payable by Growers in its capacity astrustee of the Trust. The Responsible Entity holdsthese funds as trustee on the terms of the trustdeed (referred to below) and utilises these funds tomeet expenses of the Scheme. Where the Trustmakes a profit in a particular period, theResponsible Entity has the power to distributethose amounts to beneficiaries in the Trust.(a)(b)(c)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.5) Act 2005 (Cth) and to incorporate themost current standard licence conditions thatapply to 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;Harvest income is held by the Custodian in adedicated bank account and does not form part ofthe income or assets of the Trust.The Responsible Entity does not believe its statusas trustee of the Trust creates any conflict ofinterest with its duties as responsible entity of theProject. The Responsible Entity notes that Growersin the Scheme are independent and separate to theTrust, and do not become beneficiaries in the Trust.As well as the financial statements of theResponsible Entity, in its own capacity, accountsare also prepared and audited annually which showthe 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)the Responsible Entity its capacity as trusteefor the Trust holds trust property on behalf ofthe Trust’s beneficiaries to be distributed tosuch beneficiaries in such proportions as theResponsible Entity in its discretion sees fit;a broad right of indemnity for theResponsible Entity to be indemnified out ofthe assets of the Trust for all expensesrelating to the Trust or incurred in theadministration of the Trust; anda broad power to invest and deal with theassets of the Trust; andother terms typically found in a discretionarytrust.Accordingly where this PDS refers to paymentsbeing made to the Responsible Entity, theResponsible Entity receives those amounts in itscapacity as trustee of the Trust.5.13 Carbon and Environmental Credits and DebitsTrading in carbon credits has already commencedin a voluntary way. Carbon credits are recognisedreductions or absorptions of carbon. Credits needto be certified. Over time, companies or individualswho create more certificates than they need cansell these to others who need to reduce theirgreenhouse gas emissions. From 1 July 2012 anemissions trading scheme will be implementedacross the majority of Australia’s carbon emissionsfollowing 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 is alsopossible that other environmental credits (e.g.salinity) will also be established. The ProjectManager believes that tree growing is the onlycarbon positive 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. While it is unlikelyto result in a benefit to Growers, to the extentpermitted 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 the carryingout of the Project they will be deducted from therevenue 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. Ifa 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 can furthercontribute to greenhouse gas reduction if some ofthe wood is used to generate electricity andreplaces fossil fuels like coal, oil or natural gas forthis purpose. When trees are used for woodproducts, carbon continues to be stored in this formfor 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 20 cubicmetres of wood per hectare may yield 500kg of drywood per cubic metre, which equates to 10 tonnesper hectare and contains 50 per cent carbon, i.e. 5tonnes per hectare of carbon in one year.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 they grow.It is not clear whether salinity credits will beestablished, and, if so, what their value might be.5.14 Conflicts of InterestThe Responsible Entity has established detailedprocedures for managing conflicts of interest toenable it to:(a)(b)(c)and(d)provide a structured and systematicmanagement process that takes intoaccount the Responsible Entity’s and theProject Manager’s obligations under theCorporations Act;identify, assess and evaluate the risk ofconflicts of interest arising wholly, orpartially, in relation to the provision offinancial services by the Responsible Entityand the Project Manager as part of theirfinancial services businesses;establish and maintain measures, processesand procedures (including compliancemeasures, processes and procedures)designed to manage these conflicts ofinterest;ensure that the quality of financial servicesprovided by the Responsible Entity and theProject Manager is not significantlycompromised by the presence of conflicts ofinterest.

5.15 Uncomplicated FinanceAll participating Growers may borrow up to 80% ofthe Application Money (including GST) from AlbanyFinancial Pty Ltd, a company associated with theProject Manager. 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 2017. Eachinstalment is of both principal and interest. Interestis charged on the reducing principal at an indicativefixed rate of 12.75% 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.5.16 Complaints by GrowersThe Responsible Entity has established detailedprocedures for the handling of complaints byGrowers, including the appointment of a ComplaintsHandling Officer. Growers can make a complaintabout any aspect of the Project by contacting theResponsible Entity or the Complaints HandlingOfficer of the Responsible Entity.The Responsible Entity will treat all complaintsseriously and will deal with them in a timely mannerhaving regard to the nature of the complaint. TheResponsible Entity will endeavour to provide a finalresponse to any complaints within 45 days ofreceiving a complaint. The Responsible Entity willact reasonably in attempting to resolve a complaint.If a complaint is not resolved to the satisfaction ofthe Grower, the Grower is entitled to initiate a formaldispute resolution process which involvesattendance at a settlement conference with anindependent person. If the parties are unable toresolve the dispute within seven days after attendingthe settlement conference then either party mayrequire the dispute be submitted to and settled by anindependent expert. The decision of the independentexpert will be final and binding on the parties.As additional protection for Growers, the ProjectManager is a member of the Financial OmbudsmanService Limited Scheme. FOS is an entirelyindependent organisation whose role is to receive,investigate and finalise complaints made against theResponsible Entity. FOS is located at Level 12, 31Queen Street, Melbourne, telephone 1300 78 08 08.5.17 Anti-Money Laundering and Counter-TerrorismFinancing Amendment Act 2007AUSTRAC has advised that the Project is subject tothe Anti-Money Laundering and Counter-TerrorismFinancing Amendment Act 2007 (Cth). Therefore, itmay be necessary for Applicants to provide proof ofidentity in accordance with the provisions of that Act.

March 26th 2012The DirectorsWA Blue Gum LimitedLevel 21385 Bourke StMELBOURNE VIC 3000Dear Sirs,RE: Product Disclosure Statement – Choice Forestry Project: 2012 (“Project”)This report has been prepared for inclusion in a Product Disclosure Statement to be dated on or about 15 May 2012through which the public may participate in the development of Eucalyptus globulus plantations in Western Australia.Background:WA Blue Gum has been a successful operator in the blue gum, (Eucalyptus globulus), plantation industry in WesternAustralia for many years. The key reasons for this success have been:• Securing only top quality suitable land in high rainfall areas usually within 100 km of chip mills.• Appointment of an experienced plantation manager with a good track record in establishing and managing bluegum plantations.• Appointment of a recognised and competent forestry supervisor to monitor plantation growth and make regularreports to WA Blue Gum Ltd• Remaining focused on blue gum plantations only and non involvement in other crops.• Arrangements with large overseas paper manufacturers to purchase blue gum wood chips.Eucalyptus globulus is a highly favoured species for producing fibre very suitable for the manufacture of high qualitypaper. This reputation has allowed above average prices to be obtained from paper manufacturers who have developedprocesses that require a high quality product such as Eucalyptus globulus fibre. By contrast the market for many of thenative forest species has declined since Eucalyptus globulus woodchips have become available on a consistent basis.Reliability of supply and delivery of a uniform high quality source of fibre are regarded as very important factors in paperproduction.The Project Manager, WA Blue Gum Limited, has subcontracted the business of establishment and ongoing tending toWACAP Treefarms (formerly Bunnings Treefarms) a wholly owned subsidiary of WAPRES (W.A. Plantation ResourcesPty Ltd). WAPRES is a 50/50 joint venture between Marubeni Corporation, one of Japan’s leading trading houses andNippon Paper Industries, one of Japan’s largest pulp and paper makers.I have been closely involved with eucalypt planting in the South West of Western Australia for over 30 years including theintroduction of large scale plantings of Eucalyptus globulus from the late 1980’s to the present day. As a forestryconsultant since 1994 I have advised and prepared many reports on blue gum plantations and have a goodunderstanding of the factors necessary to produce high yielding Eucalyptus globulus plantations.Land for the project's plantings has not been secured but the aim is to lease already cleared farmland usually withinapproximately 100km from one of the major chip mills in the South West of WA; the Diamond Chip Mill near Manjimup,the Port of Bunbury chip mill or the one close to the Port of Albany. The land selected will be within the high rainfall zoneof the South West of WA. All land offered is intensively surveyed for soil suitability for Eucalyptus globulus and only thoseparts of the property on offer that meet strict soil suitability guidelines are selected.The growth and success of any tree plantation can be affected by factors such as below average rainfall, insect attack,fire, disease and windstorms that can all affect growth rates and actual yields obtained at the time of harvesting. Investorsneed to be aware of these risks. Several factors must be met to ensure a profitable forestry enterprise. Some of thesefactors are elaborated upon to explain the project for the benefit of intending investors.ManagementWACAP Treefarms under an agreement with the Project Manager carry out all operational work. They have beenestablishing and managing Eucalyptus globulus plantations in the South West of Western Australia for over 30 years andhave a good record of producing good quality plantations and managing them in a competent manner. They have longbeen regarded as leaders in the blue gum plantation industry.

The Eucalyptus globulus plantation industry in Australia experienced major change in 2009. Several blue gum MISplantation companies went into liquidation and are no longer operating. The plantations they managed are in the mainnow managed by other companies. The global financial Collapse which led to a drop in investor interest in MIS schemeswas a factor in the collapse of these companies as well as their involvement in other crops including olives and almonds.By comparison WA Blue Gum Ltd concentrated solely on producing high quality fibre from Eucalyptus globulusplantations and was not affected.The forestry staff employed by WACAP Treefarms is an experienced team who interact closely with local communities,adjoining landowners, local authorities and agencies in the South West where the Eucalyptus globulus plantations theymanage are located. They are respected as responsible operators and have a good name throughout the South West byproviding fire protection and suppression resources for fires in or close to plantations by supporting local bushfirebrigades via attendance at fires and supplying fire equipment to brigades.Land selection for plantationsThe aim is to lease property within or close to 100km from chip mills at Bunbury Port, the Diamond Chip mill or the chipmill close to the Port of Albany. The ideal land are gravel-loams overlying deep well structured clays on gentle slopessupporting a good pasture cover that has received adequate fertiliser applications for 5 or more years.Annual rainfall is important and an annual rainfall greater than 700mm per year is necessary for reliable growth withpreference given to land in the greater than 900mm/year rainfall zone. Reliable and adequate rainfall is an essentialingredient for the growth of Eucalyptus globulus.After harvesting, a new Eucalyptus globulus plantation is established provided the soil type and other site conditions meetthe required standard and capability of producing an above average yield. Some former pine plantation sites have beenre-established with Eucalyptus globulus and are performing well.Adequate rainfall is essential for optimum Eucalyptus globulus growth. The further south that plantations are located theless evapo-transpiration takes place and the chances also increase of receiving some summer rainfall which has apositive effect on growth. During 2010 one of the driest winter rainfall events occurred in the South West with Manjimuponly receiving 500mm. The impact on new plantations was low and good establishment results were still obtained but thegrowth rate in established plantations for 2010 will be reduced. Low rainfall years have occurred in the past but thesehave not persisted and average rainfall years have returned again. In 2011, rainfall in the South West exceeded the longterm average.YieldForecasts of future yield are derived by measuring height and diameter growth of trees on sample areas in all plantationsat age 4.5 years and at 7.5 years. By comparing the results of these measurements with volume/age curves developedfrom past measurements and relating these to the actual volumes obtained at harvest time, an informed estimate of thelikely volume at harvest time can be made for any plantation.There are separate volume/age curves for a range of different site qualities. Measurement at age 7.5 years provides avery good estimate of the likely actual volume of wood to be obtained when the plantation is harvested. Measurementstaken at age 4.5 are less accurate but are useful in identifying plantations that could benefit from additional fertilising orother treatment to improve their growth rate.The average annual rate of production of a plantation or MAI (Mean Annual Increment) is used to benchmark theproductive ability of plantations. The volume/age curves for the different site qualities are the basis for calculating the MAIfor the different site qualities. A high yielding plantation predicted to yield 300 cubic metres of wood at age 10 has a MAIof 30.Bunnings Treefarms commenced harvesting Eucalyptus globulus in 1994 and exported 40,000 tonnes of woodchips thatattracted a premium price compared with woodchips from native forest sources. Since 2003, WAPRES have exported onaverage about 650,000 tonnes of Eucalyptus globulus woodchips per year ex Bunbury Port. Following the global financialcollapse in 2009 exports fell to 600,000 tonnes in 2010. The disastrous tsunami that hit Japan in March 2011 left severalJapanese paper mills severely damaged. Four of these mills have now either been repaired or rebuilt and are back inoperation and others will return to operation during 2012. This and uncertainty about the European economy and itsimpact on other economies around the world makes predictions difficult but the current view is that 550,000 tonnes ofEucalyptus globulus woodchips from WAPRES managed plantations will still be exported from Bunbury Port in 2012.Leasing arrangements with landholders are developed following extensive on site discussion with the owner, relevantland use authorities and fire protection agencies. The process consists of drawing up a final plan which the landowner,authorities, WACAP Treefarms and the Project Manager all agree upon before it is submitted for final approval.RisksIn past years when rainfall was low some drought deaths of Eucalyptus globulus occurred in plantations in the SouthWest. This was a reflection of below average rainfall and the limits of knowledge on the suitability of different soil types forthe growth of Eucalyptus globulus. Over the last decade knowledge on the performance of plantations on different soil

types has been refined and has improved markedly since the first broad scale plantings were made. Responsibleoperators such as WACAP Treefarms now carry out a soil drilling or backhoe digging survey to a minimum of threemetres depth over the property as routine practice to identify and exclude unfavourable sections from the area to beplanted. The drilling depth may be extended to five metres or more if there is uncertainty about the nature of the deepersoil profile.By selecting only good quality soil types in areas within the 900 mm or more rainfall isohyet the probability of droughtdeaths when a below average rainfall year occurs is reduced. Rainfall has decreased by 10-15% in the South West since1975 and whether this is due to natural variation or climate change is uncertain but any continued reduction would affectthe growth rates of plantations. This will occur first in areas where the average rainfall was always well below 900mm peryear rainfall and where the suitability of these lower rainfall sites for growing Eucalyptus globulus was alwaysquestionable. In 2011 the amount of rain received in the South West of WA was almost equal to the long term average.Soil salinities greater than EC 50 mS/m are unsuitable for the growth of Eucalyptus globulus and soil salinity sampling ofland offered for planting is carried out where rising saline ground water could occur.Areas showing soil salinities greater than the cut off figure are not planted. Up until about age 8 in first rotation blue gumplantations the fire risk is low. After year 8 leaf litter starts to build up and will support a running fire. On second rotationsites the material remaining after harvest can be high and constitute a fire risk. WACAP Treefarms are aware of this andare examining ways of reducing this fire hazard. Burning of the debris is not favoured because of the loss of organicmaterial and nutrients, especially nitrogen. The current approach is to reduce the risk by disposing of clearfelling debrisfor a zone around the perimeter before establishing the new crop. The area of Eucalyptus globulus plantations that havebeen burnt by fire is very low to date but the risk will increase as more plantations become second rotation plantationswhere harvesting residues add to the fuel load.Plantation OperationsWACAP Treefarms engage a number of contractors to carry out most of the plantation establishment work including soilsurveying, ripping or mounding of planting lines, herbicide spraying to control weed competition, planting of seedlings andfertilising. WACAP Treefarms staff supervises the contractors closely to ensure the work required is completed to a highstandard. It is usual to achieve a very high survival rate for all seedlings planted. Over the last 30 years I have inspectedestablishment of a large number of Eucalyptus globulus plantations both in Western Australia and in the Green Triangleand consider that WACAP Treefarms consistently carry out a high standard of establishment and ongoing management.WACAP Treefarms raise all the Eucalyptus globulus seedlings required for planting at their nursery at Manjimup. Thenursery is able to produce seven million seedlings each year. It uses high quality and modern equipment and excellentsystems for producing high quality seedlings. Up to three years sowing requirements are held in secure storage, whichensures security of seed supply. Seed orchards were established some years ago to produce genetically improved seedto enable production of high quality seedlings with inherent high growth rates and a high fibre content which will beexpressed as the trees develop.WACAP Treefarms have been a long term member of the Southern Tree Breeders Association and involved in acooperative breeding program to continually improve the quality of seedlings used to establish new plantations.Harvesting and chippingHarvesting of plantations is carried out by a number of contractors supervised by WACAP Treefarms. Harvesting is highlymechanised and is an efficient and low cost operation carried out at about 10 years of age. Utilisation of trees ismaximised with very little waste. Initial stocking at planting has been reduced in recent years depending on site qualityand ranges from 800 seedlings per hectare on lower site qualities to 1000 seedlings on the very best sites. This ensuresthe development of large diameter trees at the time of harvesting which improves yield and lowers harvesting costs.WA Chip and Pulp another wholly owned subsidiary of WAPRES purchase and process the timber. The major chippingfacilities are at the WA Chip and Pulp mill at Diamond near Manjimup and at Bunbury Port and one close to the Port ofAlbany. Ship loading facilities are available at both Bunbury and Albany Ports.Market Outlook and Product PotentialEucalyptus globulus wood chips now dominate woodchip exports. Karri (Eucalyptus diversicolor) woodchips previouslyobtained from State managed native forests in the South West have fallen to about 200,000 tonnes per year as aconsequence of State government forest policies on harvesting in native forests and supply is largely from privateproperty. Eucalyptus globulus wood samples from WACAP Treefarms have been shown by CSIRO to provide betterquality fibre and higher pulp yields than from native forest timbers from Tasmania. Eucalyptus globulus woodchips arethus expected to continue to achieve a premium price in the export market. The Wood Purchase Agreement provides asecure market arrangement for growers.

Background and ExpertiseI am an independent professional forester who has worked in forestry and the forestry industries in Australia for over 40years. Since setting up my private consultancy in 1995 I have worked on many projects involving Eucalyptus globulusplantations and have provided advice on many aspects including log pricing. Whilst working in the Forests Department ofWA and later the Department of Conservation & Land Management as a Regional Manager I was closely involved withlog sales, log pricing and making estimates of future returns from both softwood and hardwood plantations.All foresters study forest economics as part of their graduate degree and accordingly have a good grasp of thefundamentals of economic theory in relation to forest products. Computer modelling has allowed many of the variables tobe tested in predicting different scenarios but in the final analysis an important factor is a judgement based on experienceand up to date knowledge of the pulp and paper industry. I have experience in these matters.ConclusionDespite the extent of variables that can impact on returns to growers in the short term there are many reasons to haveconfidence in the financial viability of Eucalyptus globulus plantations in WA that are established on high quality land, inhigh rainfall areas and located within 100 km of chip mills. The following factors are also important and have been takeninto account.1. Export sale agreements of woodchips are based on the Australian dollar which establishes a useful link with anychange in the Australian inflation rate. Export woodchip prices have historically remained steady against inflationand a rise in the value of the A$ would be expected to result in lower prices and a fall in the Australian dollar wouldlead to price increases. However in recent years as the A$ has appreciated in value, woodchip prices have beenmaintained. In 2000 and 2001, large areas of Eucalyptus globulus plantations were established in the South Westof WA and many will become due for harvest in 2012. This increase in supply could lead to a temporary reductionin price in the short term due to these additional supplies becoming available.2. The production and export of woodchips that started in the late 1970’s was entirely from native forests. Thechange to producing and exporting woodchips largely from plantations occurred in WA well before other Stateswhich allowed WA producers to gain valuable years of experience in marketing wood fibre from plantations.Apart from 2009-2010 when the world economy was affected by the global financial downturn, WA Chip and Pulphave exported on average about 650,000 tonnes per year of Eucalyptus globulus chips from Bunbury Port since2003. In 2011 the combination of world economic uncertainty and the tsunami that struck Japan and damagedseveral paper mills led to only 550,000 tonnes of Eucalyptus globulus woodchips derived from WAPRES managedplantations being exported. The continuation of uncertainty about the world economy and the reduced intake byJapanese paper mills until repairs and rebuilding has been completed means that 2012 exports will probablyremain much the same however a return to 650,000 tonnes a year is expected.3. Buyers have been prepared to date to pay a premium of 15-20% for Eucalyptus globulus woodchips compared tonative forest woodchips. The rapid reduction in the native forest woodchip export business indicates thepreference by paper makers for a higher quality and more uniform product that can only be produced fromplantations.4. Demand for paper pulp and chiplogs from which most paper is made will increase as world population increases.Small increases in living standards in some of the developing countries such as China and India should lead toincreased demand for writing paper.5. The benefits of tree breeding for better pulp yield and fibre quality will progressively be realised from plantationgrown woodchips.6. Past woodchip prices were based largely on the native forest resource. Increases in yield and consistency ofquality from plantations are preferred by the market via higher prices than for native forest woodchips. Scopeexists for sellers to negotiate further price increases due to the much higher quality product produced fromplantations although this will be offset in the short term by greater volumes of Eucalyptus globulus woodchipsbecoming available from 2012 due to increased planting rates across the industry from 2000-2002. This will be atemporary situation and prices are expected to keep increasing over the longer term.7. In WA there are now almost 300,000 hectares of Eucalyptus globulus plantations which would be sufficient toestablish a large scale pulp and paper mill based entirely on a Eucalyptus globulus resource. Although there areno recent developments there is potential to establish a paper mill in the South West based entirely on aEucalyptus globulus resource however labour costs and scarcity of capital funding in Australia would make thisdifficult.8. The South West of Western Australia is closer than other woodchip producing countries to Japanese and otherAsian export markets resulting in lower shipping costs. This region can usually compete strongly with woodchipexports from Chile, the southern States of the United States and South Africa. This should mean that Australia willmaintain its market share in Japan. In the United States saw log production was becoming favoured over pulp logproduction but lack of new housing starts and efforts by the US to bolster their economy by exporting products thatwould have normally been absorbed by the local market could increase competition in the short term.

9. Australia is also close to the Indonesian market where several large pulp plants have been established in recentyears. Because of mismanagement of Indonesian forests there is a shortage of local fibre and Australia (andespecially the South West of Western Australia) has the potential to supply that market.10. In March 2002, Australia made its first sale of wood chips to China. In that country there are two sets of dynamicsthat provide opportunity:(a)strongly increasing demand, at about 80% per annum (the per capita use of paper is still less than 10% ofthat in the United States);(b) an abrupt closure of native forest logging for environmental reasons, as major waterways were becomingdangerously polluted.11. India, the country with the world’s second largest population and the world’s largest middle class, will increase itsusage of paper which is about 1% that of the United States. Indian companies would like to import logs but the WAgovernment has opposed the export of hardwood logs but has no objections to export of plantation grownwoodchips. Other emerging markets are Korea and Taiwan.12. This Project has a Wood Purchase Agreement with WA Chip & Pulp Co Pty Ltd a wholly owned subsidiary ofWAPRES which is a Joint Venture between Marubeni Corporation of Japan and Nippon Paper Industries, two ofJapan's largest pulp importers. Currently WAPRES is providing about one third of its export woodchips fromEucalyptus globulus plantations it owns with two thirds coming from plantations managed by WAPRES on behalfof other entities such as WA Blue Gum so marketing of WA Blue Gum woodchips should be assured.13. In-forest chipping methods are now used where it is more economic to do so than hauling logs to fixed chip mills. Itis commonly used in low yielding plantations that were planted on sites that would not be considered today. Theadvantage of in-forest chipping in these circumstances is that small diameter logs common in low yieldingplantations are converted into woodchips within the plantation thus avoiding the more expensive cost oftransporting small logs to a Port based chipper.14. The location of properties leased for plantations is a key factor in profitability of export sales as transport costs area high component of total costs of production. Property location has a big influence on returns and on the leasepayments that can be made to landowners.15. The Commonwealth Government recently declared under the Carbon Farming initiative (CFI) that commercialplantations grown in Australia could not be used to gain carbon credits whereas plantations grown overseas areeligible. This appears anomalous and a case for a change in this ruling could be substantiated.16. Growth in demand worldwide for high quality woodchips as derived from Eucalyptus globulus plantations hasshown a steady increase and this is projected to continue for at least a decade. The demand from China for highquality woodchips is increasing at a much higher rate than other countries and the tightening of demand oversupply was one of the factors that led to a 9.5% increase in the FOB price in 2008 for Eucalyptus globuluswoodchips. Due to increasing supply of Eucalyptus globulus woodchips from 2012 due to large plantation areasestablished in 2000 to 2002 in the South West of WA woodchip prices could fall in 2012. The current uncertainty inthe world economy makes short term predictions of future prices difficult as so many factors are involved, howeverthe long term outlook is that demand and prices will increase.The information contained in this report has been gained as a result of my own enquires and I have not relied on anyrepresentations made to me by the Project Manager, WACAP Treefarms or any other person.D Spriggins

This Section details the fees and other costs payable by a Grower. However, to fully understand these matters you shouldread 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 ofeach hectare that you may be charged if you wish toparticipate as a Grower in the Project. These fees andcosts may be paid from your money.Taxes and insurance costs are set out in another part ofthis document.You should read all the information about fees and costsbecause 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 the method of calculation.Table 2 apportions the fees and other costs between JointVenture Growers.Table 3 gives an example of how the fees and other costscharged on participation in the Project can affect yourreturn. The fees and costs are payable by Growers. Youshould use this table to compare this product with othersimilar agribusiness managed investment products.

TABLE 1 FEES AND OTHER COSTS (PER HECTARE - MINIMUM 2 HECTARES)TYPE OF FEE OR COST AMOUNT (PER HECTARE) HOW AND WHEN PAIDFees when your money moves into the ProjectFinancial Year 1(Until 30 June2012)Financial Year 2(1 July 2012 to30 June 2013)SubsequentFinancialYears2Application MoneyThis is the fee for services associatedwith the Establishment of the Plantationand partial prepayment of rentContribution feeThe fee on each amount contributedto your investment$10,000(including GST)N/ANil Nil Included in Application Money whichis payable on ApplicationN/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 June20112Financial Year 2(1 July 2012 to30 June 2013)SubsequentFinancialYearsOngoing rent, management andadministration fees up to and including3year 10These amounts are payable annuallyand contribute to the management of thePlantation and the rental of leased landNil$445.50 (including1GST) Indexedfrom 30 June 2012Amount payablein previous Financial1Year IndexedPayable on 30 November 2012 andthereafter on 30 September in eachyear from the Grower’s own money4Insurance feeThis is the annual fee payable toinsure the Plantation against fireNilApproximately0.7% of the4insured valueRefer to Financial Year2 (previous column)Payable on 15 November 2012 andthereafter on 15 November in eachyear from the Grower’s own moneyHarvesting, Transportation &5Supervision 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 theGrower6Incentive 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 Grower7Credit (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 Project which onthe date of this PDS is expected to be 1.25% (subject to merchant prices)8Unforseen 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 June2012)Financial Year 2(1 July 2012 to30 June 2013)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 Project Manager will charge an administration fee of $400(including GST) to process a transfer of a Grower’s interest inthe Project to another entity in a secondary marketThis fee is payable from the Grower’sown money upon the issue of aninvoice by the Project Manager

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. Application MoneyGrowers contribute a minimum of $20,000(including GST) (being the amount necessary toEstablish 2 hectares of plantations and partiallyprepay rent at $10,000 (including GST) andthereafter in multiples of $10,000 (including GST)per hectare). There is no restriction on themaximum initial contribution that a Grower maymake.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. Ongoing Rent, Management and AdministrationFees6. Incentive FeeGrowers will be charged incentive fee for achievinghigher than a nominated return. The incentive fee is15% of the amount by which the net proceeds fromthe sale of timber exceeds the sum of $18,000(including GST) per hectare, Indexed from 30 June2012. The Grower will pay these fees by way ofdeduction from the proceeds of sale of the timberprior to making any distributions to the Grower.7. Credit (or similar) Card Merchants FeeIn any case where an amount is paid under theProject by a Grower using a credit or similar card,there shall be added the appropriate merchants feecharge on the use of the card which on the date ofthis PDS is expected to be 1.25% of the amountpaid (subject to merchant prices).8. 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 convened by the Project Manager.This fee is payable from the Grower’s own moneyupon the issue of an invoice by the ProjectManager.Growers will be charged an annual rent,management and administration fee amounting to$445.50 (including GST). These fees are indexedfrom 30 June 2012, with the first payment on 30November 2012 and thereafter on 30 September ineach year from the Grower’s own money.4. 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 2012 andthereafter on 15 November in each year from theGrower’s own money.5. Harvesting, Transportation & Supervision FeeGrowers will be charged Harvesting, transportation& supervision fees incurred by the Project Managerfor Harvesting, transportation and supervisoryactivities. A 3.3% (including GST) Harvestsupervision fee is payable to WA Chip & Pulp Co.The Project Manager has discretion to deduct thesefees from the proceeds of the sale of the timberprior to making any distributions to the Growers.

TABLE 2 - JOINT VENTURE GROWERS: APPORTIONMENT OF FEES AND OTHER COSTS (PER HECTARE)JointVentureGrowers:Two applicants may participate in the Project as Joint Venture Growers. Under this arrangement, the firstJoint Venture Grower is responsible for all activities associated with the Establishment of the Plantation andthe fees payable in respect of those activities and amounts payable in the application year (including prepaidrent) and the second Joint Venture Grower is responsible for ongoing rent, management andadministration fees payable in all subsequent years. Joint Venture Growers will be entitled to one half of theproceeds of sale of the timber from the Plantations.Each Joint Venture Grower will be responsible for their portion (being 40% for the first Joint Venture Growerand 60% for the second Joint Venture Grower) of all insurance, Harvesting, transportation and supervisioncosts and incentive fees payable out of the proceeds of the sale of the timber.The first Joint Venture Grower is required to pay the Application Money i.e. a minimum of $20,000 (includingGST) (being the amount necessary to Establish 2 hectares of plantations and to partly prepay rent at$10,000 (including GST) and thereafter in multiples of $10,000 (including GST) (equivalent to 1 hectare).The Second Joint Venture Grower is required to pay the ongoing rent, management and administration feesfor the Plantations. The first annual sum for ongoing rent, management and administration fees will be$445.50 (including GST) per hectare (Indexed from 30 June 2012) and is payable on 30 November 2012.Subsequent amounts for ongoing fees will be Indexed in each subsequent year to take account of inflation.Each Joint Venture Grower will be entitled to 50% of the proceeds of the sale of the timberfrom their Plantation.Throughout this Product Disclosure Statement, any reference to a Grower includes areference to Joint Venture Growers.GuaranteeThe Project Manager may require, where the Grower is a corporation, that one or more of the directors of that corporation 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 TaxationInformation” on pages 10 and 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 aGrower's return. The table is based on the Project not offering a 'balanced investment option' (as defined in theCorporations Act). This table should be used to compare this product with other similar agribusiness managedinvestment products.In accordance with the requirements of the Corporations Act, this table is based on a $50,000 subscription. Howeverit should be noted that fractions of a hectare are not issued and it is not possible to make an application for hectaresof plantations 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 amountsGROWEREXAMPLE - cost of fund in the financial year ending 30June 2012 for a Grower who holds 5 hectares (at $10,000(including GST) per hectareBALANCE OF $50,000 with no further contributionsContribution feesFor every $50,000 you put in you will be charged $0 inContribution FeesPlus ongoing rent, $445.50 (including GST) x 5management and = $2227.50 Indexedadministration fees(for 5 hectares)For every $50,000 you have invested in the Project youwill be charged fees in the financial year ending 30June 2013 of $2227.50, Indexed.Note that the calculation has not taken into accountinsurance expenses which are approximately 0.7% ofthe insured value.Also note that additional fees will also apply in lateryears.Equals Cost of fund(for 5 hectares)If you had an investment of $50,000 (including GST)during the financial year ending 30 June 2012, youwould be charged fees and costs of $2227.50 (includingGST).

Anthony Henry May B.Ec. LL.B.Mr 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 20years and is a member of the Committee of theMelbourne branch. He was a member of the Board of theNational Association of Forest Industries (now calledAustralian Forest Products Association) for five years. Hehas represented 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 theDivision 394 legislative package. He was for over 25years a member of the Council of Monash University andfor much of that time was a trustee of the UniversitySuperannuation Scheme. He is a partner of Herbert Geerand has been a director of W.A. Blue Gum Limited sinceits inception.Leon Gorr B.Juris LL.B. M.AdminMr 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 W.A. Blue Gum Limitedsince its inception and during that time that company hasbeen the Project Manager under annual Prospectuses /Product Disclosure Statements in relation to projects of asimilar nature to this Project.Steven John Smith LL.M.Mr Smith has practised in areas of commercial law since1981 and has been a partner of Herbert Geer since 1995.His clients are involved in a wide range of commercial andentrepreneurial activities and he has been involved inpreparing prospectuses for a number of them. He hasbeen a director of W.A. Blue Gum Limited since 23 April2001.

9.1 Material Contracts(a)Mr D. Spriggins;(a)The following agreements have beenentered into or will be entered into as a resultof an Applicant becoming a Subscriber in theProject:(b) The Constitution referred to in Section 10.1;(c)(d)(e)(f)(g)(h)The Scheme Property Custody Agreementreferred to in Section 10.2;The Project Management Contract referredto in Section 10.3;The Sub-lease Agreement (and if relevantthe Agreement to Sub-lease) referred to inSection 10.4;The Plantation Services Agreement referredto in Section 10.5;The Wood Purchase Agreement referred toin Section 10.6; andThe Joint Venture Agreement referred to inSection 10.7.9.2 Inspection of DocumentsThe following documents are available forinspection during normal business hours at theregistered office of the Project Manager at Level 21,385 Bourke Street, Melbourne, Victoria (except tothe extent that there is unreasonable prejudice tothe Project Manager) -• this Product Disclosure Statement dated 15May 2012;• the Memorandum and Articles of Associationof W.A. Blue Gum Limited;• the Constitution and Agreements referred toin Section 10 of this Product DisclosureStatement;• the consents referred to in Section 9.3 of thisProduct Disclosure Statement.9.3 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 itis included, in accordance with the CorporationsAct:(b)(c)(d)(e)(f)WACAP Treefarms;W.A. Chip & Pulp Co.;Sandhurst Trustees Limited;Herbert Geer; andAlbany Financial Pty Ltd.Persons proposing to participate in the ChoiceForestry Project 2012 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 this PDS;authorised or caused the issue of this PDS;been involved as a promoter of the ChoiceForestry Project 2012 or the PDS;performed any function in a professionaladvisory or other capacity for W.A. Blue GumLimited or for or in relation to the issue orproposed issue of interests under this PDS;ortaken any responsibility for the correctnessof any disclosure in this PDS of terms ofcontracts to which Marubeni Corporation,Nippon Paper Industries Co, WACAPTreefarms or W.A. Chip & Pulp Co. are aparty.None of Marubeni Corporation, Nippon PaperIndustries Co, WACAP Treefarms or W.A. Chip &Pulp Co. are associated with W.A. Blue GumLimited or any other party referred to in this PDS(except as disclosed). WACAP Treefarms and W.A.Chip & Pulp Co. are contractors to W.A. Blue GumLimited for the provision respectively of theafforestation, marketing and supervisory andadvisory services detailed in the summary ofmaterial contracts 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 Choice ForestryProject 2012 or a recommendation of participationby an intending Grower.9.4 Interests of Directors and ExpertsFull particulars of:(a)the nature and extent of the interest (if any)of every Director of the Project Manager andthe Custodian and every expert, in thepromotion of, or in any property proposed tobe acquired by the Growers; and

(b)where the interest of such a Director or suchan expert consists of being a partner in afirm, the nature and extent of the interest ofthat 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)(d)in the case of a Director, either to induce himto become, 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; orin the case of an expert, for servicesrendered by him or the firm in connectionwith the promotion or formation of theProject;are as follows:(i)(ii)(iii)(iv)Mr D. Spriggins has acted asindependent forestry expert and hasprepared the Report set out in Section6 of Part B of this PDS and willreceive professional fees of not morethan $3,300 (including GST) for hisservices in accordance with his usualcharges;Sandhurst Trustees Ltd is theCustodian and will receive fees notexceeding $7,700 (including GST) forthe first year and thereafter;the Directors of the Project Managermay receive Director's fees;the Directors of the Project Managerand any firm in which they arepartners have no interest in thepromotion of this PDS or in anyproperty to be acquired by GrowersAND no amount has been paid (eitherin cash or shares or otherwise) to anyof the Directors of the ProjectManager to induce any of them tobecome or to qualify them asDirectors or otherwise for servicesrendered by any of them or forservices rendered by that firm inconnection with the promotion of thisPDS, other than that each of theDirectors and other partners (orassociates) in Herbert Geer, thesolicitors to the Project Manager arebeneficiaries of the Trust of which theProject Manager is the Trustee andMr Gorr and Mr May are directors andshareholders of the companies thatare shareholders in Albany FinancialPty Ltd and are directors of AlbanyFinancial Pty Ltd, and that eachDirector holds one ordinary share inthe Project Manager. The net incomeof the Trusts includes the revenueearned from the Project and may be(v)9.5 Interests of the Custodiandistributed to beneficiaries. Tom Mayand Steven Smith are partners inHerbert 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 ofthe Project;each employee of the ProjectManager or the Custodian who is tobe regarded as a promoter of theProject, is entitled to receive his orher salary and other emoluments fromthe Project Manager or the Custodian(as the case may be) in his or hercapacity as such employee.The Custodian has no interest in relation to theProject, in the promotion of the Project, or in theproperty proposed to be acquired for the purposesof the Project, other than the remuneration to whichthe Custodian is entitled in its capacity asCustodian (which is stated in Section 9.4(d)(ii)andwithout limiting the generality of the foregoing noamount has been paid or agreed to be paid to theCustodian in cash or otherwise by any person:(a) to induce the Custodian to act in that oranother capacity; or(b) for other services rendered by the Custodianin connection with the Project, other than theamounts of that remuneration that have accrued orwill accrue to the Custodian from time to time underthe Scheme Property Custody Agreement.9.6 Interests of the Project ManagerThe Project Manager has no interest in relation tothe Project, in the promotion of the Project or in theproperty proposed to be acquired for the purposesof the Project, other than the remuneration to whichthe Project Manager is entitled in its capacity asProject Manager. The Project Manager may makepayments of commissions not exceeding 10% intotal in respect of moneys subscribed under thisProject. This amount may be paid over a period ofyears.

This section contains a summary of various provisions ofthe Constitution and other principal agreements. AllGrowers are entitled to obtain a copy of the Constitutionfree of charge from the registered office of theResponsible Entity. Growers should not rely on thissummary but should refer to the documents themselves.Please note that all defined terms in the body of this PDSare defined in Section 2 (dictionary) except those thatappear in this Section 10. The defined terms that appearin this section are defined by reference to the particularagreement. Copies of the agreements are available forinspection at the registered office of the ResponsibleEntity during normal business hours.10.1 Summary of Constitution(a)(b)(c)(d)(e)(f)Establishment Of The ProjectThe Constitution is the document underwhich the Project is established and isregistered with ASIC.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 ofthe Constitution as if the Applicant hadsigned the document.Application MoneysIn order to acquire an Interest in the Project,an Applicant must pay to the Custodian theApplication Moneys specified in theConstitution.The Responsible Entity will maintain anaccount with a bank or other financialinstitution into which all Application Moneyswill be deposited (“the Application Fund”).The Custodian will disburse the funds in theApplication Fund to the Responsible Entityfor Establishment of the PlantationAllotments.Project PropertyThe Responsible Entity will hold all ProjectProperty for the Growers for the term of theProject.Fees and RentalsAll fees and rentals will be paid directly bythe Growers to the Responsible Entity inaccordance with the Constitution.Distributions of Income(i)All income and other proceeds due tothe Growers will be payable to theResponsible Entity and deposited into(g)(ii)a Proceeds Fund. As soon asconvenient after receipt of payment ofany monies into the ProceedsAccount, the Responsible Entity willdistribute such Harvest Income asfollows:(A)(B)(C)first, the Responsible Entity willbe paid by each grower by wayof reimbursement for all costs,expenses and outgoingsproperly incurred in carryingout the harvesting of the timberon the Plantation Allotmentsand any other generaladministrative expensesdirectly incurred in relation tothe sale of the timber;secondly, the ResponsibleEntity will be entitled to be paidby each Grower any amountsspecified as payable to theResponsible Entity in theConstitution;subject to Clause 8 of theConstitution, the balance willbe distributed pro rata to theGrowers in respect of whosePlantation Allotments theHarvest Income was derived.In the case of Joint VentureGrowers the balance will bedistributed among them inequal shares.Notwithstanding (i) above, theResponsible Entity will be entitled todeduct from the Harvest Income to bedistributed to Growers:(A)(B)(C)any outstanding amount due tothe Responsible Entity inrespect of insurance premiumspaid by it;any lease rental owing by aGrower to the ResponsibleEntity;any fees owing by a Grower tothe Responsible Entity.Responsible Entity’s RemunerationUnder the Constitution, the ResponsibleEntity will be entitled to receive the followingamounts by way of remuneration:(i)(ii)all of the Application Money from theApplication Fund;all tending fees and rent payable bythe Growers to the Responsible Entity;

(h)(iii)(iv)(v)any incentive fee which becomespayable to the Responsible Entity;any other amounts due (e.g. creditcard fees);all payments authorised by a meetingof Growers to meet unforeseenexpenses in relation to fertiliser and/orinsect issues.Register of GrowersThe Responsible Entity will maintain aregister of Growers containing the namesand addresses of the Growers, a descriptionof the Plantation Allotments leased by eachGrower, the date when each Grower wasentered in the Register, the date on whichthe person ceased to be a Grower and ifapplicable, that they are Joint VentureGrowers.(l)(m)Plan, that person is entitled to beindemnified from the Project Propertyto the extent permitted by law.No Right to WithdrawOnce a Grower’s interest has beenregistered, the Grower has no right towithdraw from the Project or to require theResponsible Entity to purchase its Interest.Additional Powers of the ResponsibleEntity(i)The Responsible Entity must not paymoney from the Project Propertyunless authorised by the Constitutionor the Corporations Act or where thepayment is in respect of:(A)ordinary bank charges andstatutory fees;(i)Assignment of InterestSubject to the Constitution and the terms ofthe Project Agreements, each Grower mayassign its rights and privileges under theConstitution, the Project ManagementContract, the Sub-lease and the WoodPurchase Agreement. Each assignmentmust be in writing and in a form acceptableto the Responsible Entity and executed bythe assigning Grower and by the Assigneeand delivered to the Responsible Entity.(B)(C)any payments which arerequired to be made in relationto investments made frommoney held in the ProceedsFund or Application Fund fromtime to time (including stampduty and transactional costs);orpayments authorised by anordinary resolution of ameeting of Growers.(j)(k)Power to BorrowThe Responsible Entity may borrow for thepurposes of the Project and may pledge theProject Property as security for theborrowings.Indemnity(i)The Responsible Entity has a right offull indemnity out of the ProjectProperty in respect of:(A)(B)any liability incurred by theResponsible Entity inperformance of its duties underthe Project; andall fees payable and costsrecoverable by theResponsible Entity under theConstitution.This indemnity continues after theResponsible Entity ceases to be theresponsible entity for the Project,unless it is a result of negligence,fraud, breach of duty or breach oftrust by the Responsible Entity.(n)(o)(ii)In addition to the powers under theConstitution and the Corporations Act,the Responsible Entity may doanything necessary for the proper andefficient Establishment, managementand development of the Project.Other Activities of the Responsible EntitySubject to the Corporations Act, theResponsible Entity may:(i)(ii)(iii)establish, manage or promote anyother project or managed investmentscheme as a responsible entity;deal with itself in its capacity asmanager, trustee or responsible entityof any other trust or scheme or in anyother capacity; orbe interested in any contract ortransaction with itself or any Grower inits capacity as manager, trustee orresponsible entity from any other trustor managed investment scheme or inany other capacity.Change of Responsible Entity(ii)If any member of the ComplianceCommittee incurs a liability in thatcapacity, in good faith, and inaccordance with the ComplianceThe Responsible Entity may only bechanged in accordance with Part 5C.2 ofDivision 2 of the Corporations Act.

(p)Meetings of Growers(t)Complaints Handling(q)(r)(i)(ii)(iii)The provisions of Part 2G.4 of theCorporations Act apply to meetings ofGrowers.The Responsible Entity may convenea meeting of Growers for suchpurpose as it sees fit.Every group of Joint Venture Growersshall be treated for all purposes as asingle Grower and cannot act or voteother than in concert with each other.Period of the Project(i)(ii)The Project will terminate 15 yearsfrom the date of acceptance by theResponsible Entity of the lastApplication. However, the Growersmay by special resolution extend theProject, provided that the ResponsibleEntity agrees to such extension andthat the rule against perpetuities is notinfringed.Upon termination of the Project, allrights and obligations under theProject Agreements will cease andterminate.Winding Up of the ProjectThe Responsible Entity shall wind up theProject or cause the Project to be wound upin any of the following circumstances:(i)(ii)(iii)The Responsible Entity has appointeda Complaints Handling Officer and ifthere is any vacancy, the Secretary ofthe Responsible Entity will be deemedto be the Complaints Handling Officer.Any Grower may make a complaintabout the Project by writing to theResponsible Entity or telephoning andspeaking with the ComplaintsHandling Officer. The complaint mustspecify the identity of the Growermaking the complaint and allnecessary details to allow theResponsible Entity to deal with thecomplaint.Unless a complaint is resolved to thecomplainant’s satisfaction by the endof the next Business Day from whenthe complaint 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 45days after receiving the complaint. Ifthe Responsible Entity is unable toprovide a final response in respect ofa complaint within 45 days, theResponsible Entity must:(A)inform the complainant of thereasons for the delay;(s)(i)(ii)(iii)the Project comes to the end of itsterm;the Growers direct the ResponsibleEntity to wind up the Project byextraordinary resolution;the Responsible Entity considers thatthe purpose of the Project has beenaccomplished or cannot beaccomplished and commence aprocess by giving notice to ASIC andthe Grower of that opinion.Amendment of the ConstitutionThe Constitution may be modified inaccordance with the Corporations Act by theResponsible Entity. The Responsible Entityshall obtain the approval of an ordinaryresolution of Growers at a duly convenedmeeting of Growers in respect of anyamendment to the Constitution unless theResponsible Entity reasonably believes theproposed amendment will not adverselyeffect the rights of any Grower.(u)(iv)(B)(C)advise the complainant of theirright to refer the complaint toexternal dispute resolution; andprovide the complainant withthe name and contact details ofthe relevant external disputeresolution scheme to whichthey can complain.If the complaint cannot be resolved tothe satisfaction of the complainantthen the complainant may proceedunder the dispute resolutionprocedures under the Constitution ortake whatever other action is open toit under the general law.Dispute ResolutionExcept where the complaint handlingprocedure applies, any party asserting adispute in relation to the Project must givethe other party to the dispute a DisputeNotice stating the matter in dispute, thearguments of the party giving the DisputeNotice and what should be done to rectifythe dispute. The party receiving the DisputeNotice must respond in writing within 5Business Days of receipt of the DisputeNotice.

10.2 Summary of Scheme Property CustodyAgreementThe Project Manager 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 andto ensure that at all times it is clearly identifiableand is held separately from other assets. Sandhurstis required to maintain proper custodial standardsand to maintain proper and accurate records inrelation to the Project Property and all dealings by itin relation to the Project Property and to report anymaterial events which may be of interest or concernto the Project Manager. Sandhurst is to act only inaccordance with the authorised instructions of theProject Manager. Sandhurst's performance ascustodian will be subject to regular review. TheProject Manager 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 theProject Manager. The Custody Agreement may beterminated by either party with three months writtennotice. The Custody Agreement may also beterminated by either party if there is a breach of theCustody Agreement and the requisite notice isgiven.10.3 Summary of Project Management Contract(a)(b)PartiesThe Project Management Contract will bebetween each Grower (including JointVenture Growers) and W.A. Blue GumLimited ("the Project Manager").Services to be Provided by Project ManagerThe Project Manager will perform or cause tobe performed all the services in relation tothe Land and the Plantation as are set out inthe Plantation Development and TendingPlan and will do so in accordance with soundsilvicultural and environmental practices,including:(i)(ii)the Establishment of the Plantationwithin the Establishment Period(including the provision of sufficienthealthy Blue Gum seedlings toachieve the stocking rate/spacing setout in the Plantation Development andTending Plan and the planting of theseedlings) for the purposes of fellingand harvesting;tending the Plantation in a proper andskilful manner in accordance with thePlantation Development and TendingPlan; and(c)(d)(e)(iii)tending, maintaining and generallymonitoring and caring for thePlantation so as to ensure as far as isreasonable the health and vigour ofthe Plantation.Term of the ContractThe Contract will terminate when the wholeof the Plantation has been Harvested for thefirst time. If all necessary approvals for theEstablishment of the Plantation are notobtained within 17 months from the date ofthe Contract, the Grower may give notice tothe Project Manager and the Contract willthen be at an end and all amounts paid areto be refunded.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 PlantationDevelopment and Tending Plan, theactual operations performed on theLand or to the Plantation, details ofthe health and vigour of the Plantationincluding details of any unforeseenoutcomes which have affected theperformance or viability of thePlantation, details of any foreseenoutcomes which are likely to affect theperformance or viability of thePlantation, and the outcome of anyinventory of volume assessmentswhich have been taken; anda report as soon as practicablefollowing the completion of theplanting of the Plantation setting outthe area comprising the PlantableArea.Assignments(i)(ii)A Grower shall not assign orotherwise dispose of its rights andobligations under the Contract, unlessthe Grower provides to the ProjectManager a guarantee and indemnityin a form approved by the ProjectManager in respect of theperformance by the proposedAssignee of each obligation of theGrower.The Project Manager may assign itsrights and obligations to a suitablyqualified person who must covenantto perform all the responsibilities ofthe Project Manager. The ProjectManager may contract to anotherperson any of its responsibilitiesunder the Contract.

(f)(g)(h)(i)Force MajeureEvery party to the Contract shall be excusedfrom performance of or any failure in thefulfilment of any obligation imposed upon itby the Contract if and only to the extent andfor the time that such performance orfulfilment is prevented by Force Majeure orthe consequences of Force Majeure whichthe Party claiming Force Majeure could nothave prevented 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 theProject Manager, which are contained in theProject Management Contract.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 thecase of an obligation to pay money,for a period of 14 days and in anyother case, for a period of 1 monthafter receipt by the Grower of writtennotice from the Project Managerspecifying the default and requiringthe default to be rectified.The Grower will be entitled toterminate the Contract if the ProjectManager is in default of any obligationunder the Contract and such defaultshall have continued for a period of 6months after receipt by the ProjectManager of written notice from theGrower specifying the default andrequesting that the default beremedied.Either party may terminate theContract if the Sub-lease isterminated.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 thematter. The parties to the dispute maythemselves appoint an expert to determinethe dispute. If the parties cannot agree onthe expert within 7 days, any party can thenrequest the President of the Law Society ofWestern Australia to appoint an independentexpert to determine the dispute.10.4 Summary of Sub-lease(a)(b)(c)PartiesThe Sub-lease will be between W.A. BlueGum Limited ("the Landholder") and eachseveral Grower, or in the case of JointVenture Growers, both the first and secondJoint Venture Growers with the second JointVenture Grower being exclusivelyresponsible for the payment 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),the Sub-lease is entered into on the basisthat the approval is obtained within 17months from the date of the Sublease.RentThe Grower or in the case of Joint VentureGrowers, the second Joint Venture Grower,will pay to the Landholder during the Termthe Rent as follows:(i)(ii)(iii)(iv)(v)for the period until 30 June 2012 (ifany) - nil;upon application, Prepaid Rent inrespect of Years 1 to 10 of the Projectin the amount of $4035.37 (includingGST) per hectare of the PlantableArea;in each Year of the Project,commencing in Year 1, Ongoing Rentof $209 (including GST) per hectare ofthe Plantable Area, adjusted by theincrease (if any) in the ConsumerPrice Index (All Groups, Perth) duringthe preceding 12 months payable on30 November in Year 1 and on 30September in each subsequent Year,in the event the Project continuesbeyond Year 10, the Total Rent forYear 11 will be $459.80 (includingGST) plus the Ongoing Rent for Year10, (Indexed) and each Year after, thesum of the Total Rent for the previousYear, (Indexed);subject to the right of the Grower toadjust the Plantable Area inaccordance with Section 10.4(g)below.In the event that the Project Harvest Dateoccurs after the expiry of the Term aGrower’s obligation to pay Rent will continueuntil the Project Harvest Date.

(d)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 skilfulmanner and in accordance with soundsilvicultural and environmentalpractices adopted within the forestryindustry and as and when appropriateprepare, cultivate, spray herbicidesand insecticides, fertilise and Harvestthe Plantation;to comply with and obey all Acts andregulations, by-laws, orders,ordinances and rules made in respectof or applying to the use or occupancyof the Leased Area.(ii)(iii)the Plantation and carbonenvironmental or any other creditsderived from the Plantation (if any) areand shall remain to the extentpermitted by law, the property of theGrower until the end of the Term andthe Grower shall be entitled to harvestthe Plantation and to retain all incomefrom the sale thereof. Anycorresponding debits arising out of theactivities of the Grower will be debitedto the Grower upon those debitsoccurring;the Grower may lodge a caveat overthe Leased Area. Upon thetermination of the Sub-lease for anyreason whatsoever, the Grower mustpromptly withdraw (at its expense)any such caveat.(e)(f)The Landholder's CovenantsThe Landholder’s covenants include:(i) to permit the Grower, upon paying theRent, or in the case of Joint VentureGrowers, the second Joint Venture Growerpaying the rent), to peaceably and quietlyenjoy the Leased Area during the Term,without any interruption by the Landholder orany person or persons claiming under orthrough the Landholder;(ii)(iii)(iv)to comply with the provisions of theHead Lease;to punctually pay all rates, taxes andother charges levied on theLandholder by any local or otherGovernment Authority in respect ofthe Leased Area;not to create any encumbrances overthe Leased Area or any part thereofranking in priority to the interests ofthe Grower under the Sub-lease.Further Covenants(g)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 anyother cause whatsoever or anindependent forestry consultantcommissioned by the Growerdetermines that it is no longercommercially viable to continue tooperate the Plantation or any portionthereof, then the Grower shall beentitled to assess the extent of thedamage to the Plantation and mayterminate the Sub-lease or reduce thePlantable Area by the area which hasbeen damaged or is no longer viable.If the Sub-lease is terminated or thePlantable Area is reduced, the Growershall, if so directed by the Landholder:(A)in the case of termination of theSub-lease, Harvest andremove all stumps, Wood anddebris from the Leased Areaand reseed to pasture; orThe Landholder and the Grower agree (interalia) that:(i)each party shall have the right withthe approval of the other party (whichapproval shall not be unreasonablywithheld) to assign or otherwisedispose of its rights under the Subleaseprovided that the transferringparty first obtains a deed of covenantby the proposed assignee or personwho receives the disposal (the"Grantee") containing a covenant bythe Grantee in favour of the nontransferringparty that the Grantee willat all times during the Term observeand perform all or any of thecovenants contained or implied in theSub-lease to be observed orperformed by the transferring party;(h)(B)in the case of reduction of thePlantable Area, Harvest andremove all stumps, Wood andDebris from the area which hasbeen damaged or is no longerviable, and (if practicable)fence off and reseed to pasturethat area.Termination in the Event of Default(i)The Landholder may terminate theSub-lease if the Grower fails toperform or observe any covenantsconditions or stipulations contained inthe Sub-lease and such default shallhave continued in the case of anobligation to pay money for a period of14 days or in any other case for aperiod of one month after receipt by

(i)(ii)the Grower of written notice from theLandholder requiring the default to berectified.The Grower shall be entitled toterminate the Sub-lease if theLandholder is in default of anyobligation under the Sub-lease andsuch default shall have continued fora period of one month after receipt bythe Landholder of written notice fromthe Grower requesting that the defaultbe remedied.Summary of Agreement to Sub-lease (ifapplicable)The Agreement to Sub-lease will be betweenW.A. Blue Gum Limited ("WABG") and theGrower, or in the case of Joint VentureGrowers, the first and the second JointVenture Grower.(i)The parties undertake to enter into aSub-lease of the Land on or beforethe Starting Date, which date shall beno later than 30 September 2013.(b)Services to be Provided by the ForestryContractor(i)(ii)The Forestry Contractor will performall the services in relation to eachPlantation in accordance with soundsilvicultural and environmentalpractices adopted within the forestryindustry.The services referred to aboveinclude:(A)(B)the Establishment of thePlantation (including theacquisition and planting ofsufficient healthy Blue Gumseedlings to achieve theminimum survival rate set outin the Plantation Developmentand Tending Plan);the tending of the Plantation ina proper and skilful manner inaccordance with the PlantationDevelopment and TendingPlan;(ii)(iii)(iv)(v)WABG will promptly apply for andobtain all approvals from all relevantauthorities for the use of the Land forthe purposes of the Project.The Grower irrevocably authorisesWABG to complete the Sub-lease byinserting relevant details.The parties will obey, and are boundby, all the provisions of the Subleasefrom the Starting Date.WABG may assign any of itsobligations under the Agreement orenter into a contract to sell or transferits interest in the Land provided thatany assignee or purchaser agrees toassume the obligations of WABG andthe assignee or purchaser is arespectable and solvent personcapable of performing the obligationsof WABG under the Agreement.In the event any dispute concerningthe Agreement, the provisionsdescribed in Section 10.3(i)aboveshall apply mutatis mutandis.10.5 Summary of Plantation Services Agreement(a)PartiesThe Plantation Services Agreement isbetween the Project Manager and WACAPTreefarms ("Forestry Contractor").(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.10.6 Summary of Wood Purchase Agreement(a)(b)(c)PartiesThe Wood Purchase Agreement is betweeneach several Grower, the Project Managerand W.A. Chip & Pulp Co. Pty Ltd ("thePurchaser").Sale and Purchase of WoodThe Project Manager agrees to sell and thePurchaser agrees 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)The Purchase Price for Wood must bea fair and reasonable price for eachgrade of wood taking into account,inter alia:(A)(B)the price or prices being paidby the Purchaser for wood ofthe same or similar species,quantity and quality in WesternAustralia;the price or prices being paidby other bona fide woodprocessors for wood of thesame or similar species,quantity and quality in WesternAustralia;

(d)(ii)(C)relevant information suppliedby any party including statisticsor indices relevant to woodprices published from time totime by the Australian Bureauof Agricultural and ResourceEconomics, the AustralianBureau of Statistics or anyother government authority orindustry body.If the Project Manager does notapprove the Purchase Price andobtains an alternative offer in writingfrom a genuine buyer to purchase thatgrade of Wood on substantially thesame terms and conditions as theoffer from the Purchaser but at ahigher price than the ProposedPurchase Price then the Purchasershall have an option for one monthfrom the date of delivery to thePurchaser of the alternative offer topurchase the Wood for such higherprice. in certain circumstances theProject Manager may sell that Woodto another buyer on the terms andconditions of the alternative offer.Harvesting and Delivery(i)The Project Manager shall Harvestand Deliver the Wood taking due andproper care for the safe-keeping andhandling of the said Wood until it hasbeen Delivered;(g)(h)(ii)of written notice from the ProjectManager specifying the default andrequiring the default to be rectified.The Purchaser shall be entitled toterminate the Agreement if the Groweris in 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 thedefault and requesting that the defaultbe remedied.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 10.3(i) aboveshall apply mutatis mutandis.Extension of the AgreementThe terms of the Agreement shall extend tothe second Harvest of the Plantation if theGrower extends its Sub-lease from the ProjectManager and the parties agree on deliverydates in respect of the Second Harvest.10.7 Summary of Joint Venture Agreement (ifapplicable)(a)PartiesWhere there are Joint Venture Growers, eachof them will be the parties.(e)(f)(ii)(iii)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,administering and supervising theHarvest and Delivery of the Wood.Ownership of and risk in relation tothe Wood shall pass to the Purchaseronly upon the Delivery of the Wood tothe facility or facilities nominated andaccepted by the Purchaser.Force MajeureThe provisions described in Section 10.3(f)above apply mutatis mutandis to thisAgreement.Termination in the Event of Default(i)The Project Manager on behalf of anyGrower and any Grower, shall beentitled to terminate the Agreement ifthe Purchaser is in default of anyobligation under the Agreement andsuch default shall have continued, inthe case of an obligation to paymoney, for a period of 14 days or inany other case, for a period of 1month after receipt by the Purchaser(b)(c)ResponsibilitiesThe First Joint Venture Grower is responsiblefor all activities associated with theEstablishment of the Plantation and the feespayable in respect of those activities andamounts payable in the application year(including pre-paid rent) The Second JointVenture Grower is responsible for ongoingrent, management and administration feespayable in all subsequent years. Joint VentureGrowers will be entitled to one half of theproceeds of sale of the timber from thePlantations.Each Joint Venture Grower will be responsiblefor their portion (being 40% for the First JointVenture Grower and 60% for the Second JointVenture Grower) of all insurance, Harvesting,transportation and supervision costs andincentive fees payable out of the proceeds ofthe sale of the timber.EntitlementsEach party is entitled to 50% of the wood andthe receipts (including carbon credits andinsurance).

PLEASE READ THE FOLLOWING INSTRUCTIONS CAREFULLY IF YOU WISH TO PARTICIPATE IN THE PROJECT.YOU MUST:1. Complete and sign the Application Form in Section 12.2. Complete and sign the Power of Attorney in Section 13 in accordance with the relevant State law and in thepresence of an adult witness.3. Where the Applicant is a company, the Guarantor for the company must complete the Power of Attorney in Section14.4. Where the Applicant requires finance from Albany Financial Pty Ltd (refer to Section 5.15 of Part B of this PDS)complete the Application for Finance in section 15.5. Make the bank cheque for the subscription payable to SANDHURST TRUSTEES LIMITED ACF CHOICEFORESTRY PROJECT 2012 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 to W.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).

Choice Forestry Project 2012W.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 - 2 hectares) Application Money $The Application Money is $10, 000 (including GST) for each hectare.PLEASE COMPLETE IN BLOCK LETTERSYour DetailsSole/First Applicant or First Joint Venture 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 Venture 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 Venture 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 Venture 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 Choice Forestry Project 2012 to which the Application Form relates.You agree to be bound by the provisions of the Constitution as amended from time to time of theProject.The Project Manager 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 ProjectAgreements by the Project Manager on your behalf without communication of such acceptance toyou.You acknowledge that by becoming a party to the Constitution and the Project Agreements youirrevocably appoint the Project Manager as your attorney to enter into any agreement for the sale ofthe wood.You authorise the Project Manager to place your name(s) on the Register in respect of the arealeased pursuant to your application.

Sole/First Applicant or First Joint Venture 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 Venture 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 CHOICE FORESTRY PROJECT 2012ORCREDIT 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 2012.

I/We the person(s) or company named below (the Grantor), HEREBY APPOINT(S) any person being a Director of W.A.Blue Gum Limited from time to time to be the Grantor's Attorney (the Attorney) to exercise, subject to any conditions andlimitations specified in Clause 2 below, the authority conferred on the Attorney hereby and to do on the Grantor's behalfanything 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 referred to inthe Product Disclosure Statement for the Choice Forestry Project 2012 and a Loan Agreement (if appliedfor) 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 may benecessary to give effect to procure the stamping of the said Project Agreements and the Loan Agreement (ifapplied for).Alter, modify, add to or cancel the provisions of the Project Agreements and the Loan Agreement (if appliedfor) 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; or provided that in the case of any proposed alteration, modification,addition or cancellation which in the opinion of the Attorney may adversely affect the rights of theGrantor, such alteration, modification, addition or cancellation may be effected only if it has beenapproved by an ordinary resolution of Growers at a meeting of Growers convened for the purposesof passing that resolution.(d)Appoint one or more substitute attorneys to exercise the powers granted to the Attorney and to revoke anyappointment 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 the Power ofAttorney hereby granted, and further agrees to ratify and confirm whatever the Attorney shall do in the exercise ofthe 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 unless thecontrary 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

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 loan agreementbetween 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 ChoiceForestry Project 2012) 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 be theGrantor's Attorney (the Attorney) to exercise, subject to any conditions and limitations specified in Clause 2 below, theauthority conferred on the Attorney hereby and to do on the Grantor's behalf anything the Grantor has lawfully authorisedthe 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 Loan Guarantee,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 may benecessary to give effect to procure the stamping of the said Project Guarantee and, where applicable theLoan 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 the Grantor;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 revoke anyappointment 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 the Power ofAttorney hereby granted, and further agrees to ratify and confirm whatever the Attorney shall do in the exercise ofthe 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 unless thecontrary requires.6. This Power of Attorney is irrevocable until the expiration of the Project under the Constitution.

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

*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 5.15 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 of futuredebits.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 2012 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 Venture 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 Venture 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

Dated: 15 May 2012W.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.ou 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, Choice Forestry Project 2012 ARSN 158 182 293. TheProject involves the Establishment and tending, felling and Harvesting of Tasmanian Blue Gum (EucalyptusGlobulus) plantations in the south-west of Western Australia.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 Choice Forestry Project 2012 ARSN158 182 293;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 Choice Forestry Project 2012 ARSN158 182 293; and(c) operate the registered managed investment scheme, Choice Forestry Project 2012 ARSN 158 182 293.We do not provide financial planning services and only provide general financial product advice in respect ofinterests in the Choice Forestry Project 2012 ARSN 158 182 293. 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