Choice Forestry PDS 2012 - WA Blue Gum Project

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.