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Key risks (continued)Class actions and litigation•Proceedings were commenced against AWB Limited in four separate class actions and one quasi-class action in relation to AWB’s activities during the Oil-for-FoodProgramme. Three of the class actions have been dismissed, although one dismissal is under appeal. Details of these class actions are provided in AWB’s financialstatements for the half year ended 31 March 2009 and described on AWB’s corporate website: http://www.awb.com.au/investors/companyanouncements/litigation/•The impact on the financial position of AWB arising directly and indirectly from these proceedings is unknown•Following the Cole Commission’s findings in November 2006 that AWB Limited, AWB (International) Limited and some of their former employees and officers mighthave breached certain laws in relation to AWB’s participation in the OFFP, the Federal government established of a joint Task Force comprising the AustralianFederal Police, Victoria Police and ASIC to consider possible prosecutions.•In late 2007 ASIC commenced civil proceedings in the Supreme Court of Victoria against 6 former AWB directors or employees, alleging breaches by them of theCorporations Act in relation to AWB’s participation in the OFFP. All of those proceedings, except for those against AWB’s former managing director AndrewLindberg, have been stayed by the Court in view of the possibility of criminal proceedings against the defendants. The Lindberg matter is proceeding and the trial isdue to commence on 19 October 2009•Since August 2007, ASIC has served on AWB and its lawyers a series of Notices to Produce documents (both hard copy and electronic) concerning theparticipation of AWBL and its wholly-owned subsidiary AWB (International) Limited in the OFFP. AWB and its lawyers have produced large volumes of documentsto ASIC pursuant to these Notices but (as AWB has advised ASIC) AWB has not produced documents over which it claims legal professional privilege, and hastaken proceedings against ASIC in the Federal Court of Australia seeking to protect LPP. AWB has also intervened in the Lindberg proceedings in the SupremeCourt of Victoria. All of these are matters of public record.•On 28 August 2009 the Australian Federal Police announced that they had discontinued their investigations into AWB, effectively withdrawing from the Task Force.AWB does not know whether or how this will affect ASIC’s future conduct in relation to these matters•To date, no legal action has been commenced against AWB Limited or any of its subsidiaries by any of the relevant authorities in relation to the findings of the ColeCommission•The resultant impact, if any, on the financial position of AWB Limited arising directly and indirectly from these and other potential legal actions arising from the ColeCommission is unknownCounterparty risks•As part of its ongoing commercial activities, AWB enters into contracts with various third parties. The ability of third parties to meet their commitments under sucharrangements may impact on AWB’s business and financial positionFinancial services business risks•Landmark Financial Services is a significant lender to the Australian agricultural industry with gross loans of approximately $2.3bn. The business is relatively highlylevered, albeit not inconsistent with the capital structure of other lending financial institutions. As a result of this leverage, any deterioration in the underlying loanshas a magnified impact on the equity and advances that AWB has invested in the business. AWB may be required by the lenders to LFS to contribute additionalequity should loan values deteriorate. Assisting to mitigate this exposure is the fact that LFS has a large number of loan customers, loans are primarily secured bymortgages over property, and their customers are spread throughout Australia and across a variety of farm-types•As a result of any future refinancing of LFS’ loan book, additional capital may be required to be contributed by AWBNot for distribution or release in the United States or to U.S. persons40 23 September 200947
Annexure II – Investor Presentation (continued)International selling restrictionsCanada (British Columbia, Ontario and Quebec provinces only)• This document constitutes an offering of the New Shares only in the Provinces of British Columbia, Ontario and Quebec (the "Provinces") and to those personsto whom they may be lawfully distributed in the Provinces, and only by authorized persons. This document is not, and under no circumstances is to beconstrued as, an advertisement or a public offering of securities in the Provinces. This document may only be distributed in the Provinces to persons that are"accredited investors" within the meaning of NI 45-106 – Prospectus and Registration Exemptions, of the Canadian Securities Administrators.• No securities commission or similar authority in the Provinces has reviewed or in any way passed upon this document or the offering of New Shares and anyrepresentation to the contrary is an offence.• No prospectus has been, or will be, filed in the Provinces with respect to the offering of New Shares or the resale of such securities. Any person in theProvinces lawfully participating in the offer will not receive the information, legal rights or protections that would be afforded had a prospectus been filed andreceipted by the securities regulator in the applicable Province. Furthermore, any resale of the New Shares in the Provinces must be made in accordance withapplicable Canadian securities laws which may require resales to be made in accordance with exemptions from dealer registration and prospectusrequirements.• The Company, and the directors and officers of the Company, may be located outside of Canada, and as a result, it may not be possible for Canadianpurchasers to effect service of process within Canada upon the Company or its directors or officers. All or a substantial portion of the assets of the Companyand such persons may be located outside of Canada, and as a result, it may not be possible to satisfy a judgment against the Company or such persons inCanada or to enforce a judgment obtained in Canadian courts against the Company or such persons outside of Canada.• Any financial information contained in this document has been prepared in accordance with International Financial Reporting Standards.• Unless specifically stated otherwise, all dollar amounts contained in this document are in Australian dollars.STATUTORY RIGHTS OF ACTION FOR DAMAGES OR RESCISSION• Securities legislation in certain of the Provinces may provide purchasers with, in addition to any other rights they may have at law, rights of rescission or todamages, or both, when an offering memorandum that is delivered to purchasers contains a misrepresentation. These rights and remedies must be exercisedwithin prescribed time limits and are subject to the defenses contained in applicable securities legislation. Prospective purchasers should refer to theapplicable provisions of the securities legislation of their respective Province for the particulars of these rights or consult with a legal adviser.• The following is a summary of the statutory rights of rescission or to damages, or both, available to purchasers in Ontario.• In Ontario, every purchaser of the New Shares purchased pursuant to this document shall have a statutory right of action for damages and/or rescissionagainst the Company if this document or any amendment thereto contains a misrepresentation. This right of action for rescission or damages is in addition toand without derogation from any other right the purchaser may have at law. In particular, Section 130.1 of the Securities Act (Ontario) provides that, if thisdocument contains a misrepresentation, a purchaser who purchases the New Shares during the period of distribution shall be deemed to have relied on themisrepresentation if it was a misrepresentation at the time of purchase and has a right of action for damages or, alternatively, may elect to exercise a right ofrescission against the Company, provided that:– the Company will not be liable if it proves that the purchaser purchased the New Shares with knowledge of the misrepresentation– in an action for damages, the Company is NOT liable for all or any portion of the damages that the Company proves does not– represent the depreciation in value of the New Shares as a result of the misrepresentation relied upon; and in no case shall the amount recoverableexceed the price at which the New Shares were offered.Not for distribution or release in the United States or to U.S. persons41 23 September 200948
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Retail Entitlement Offer - Documents Mailed to ... - AWB Limited

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