Investing with
TFS
Experienced Managers
The TFS Sandalwood Project 2008 (TFS 2008) is the company’s twelfth
Sandalwood Project under management.
Expert Foresters to TFS, Peter Kimber and Chris Done, previously worked
with the WA Department of Conservation and Land Management (CALM) on the
original Sandalwood trial plantations in the area, and are widely
renowned as Australia’s foremost Sandalwood experts.
An experienced plantation management team is located in Kununurra to
ensure your plantation is established and maintained to the highest
order.
The TFS parent company, TFS Corporation Ltd, listed on ASX Limited in
December 2004.
Dedicated to Sandalwood
TFS first planted Indian Sandalwood in Kununurra in 1999 and has since
planted over 1,200 hectares of commercial Sandalwood plantations on behalf
of almost 700 individual growers and companies associated with TFS.
TFS
is a specialist Indian Sandalwood plantation manager and is committed to
the long term development of an Australian grown Indian Sandalwood
industry.
The majority of their Directors are Growers and
shareholders in TFS, confirming a dedication by
the company to achieve the best possible
Sandalwood growth, yields and returns for its
Growers –
in fact the company and Directors combined own approximately
20% of the sandalwood trees under management.
Sustainable Development
TFS believes that it can be part of a better world, starting with the
Kimberley region.
About half of the Kimberley population is of Aboriginal descent. TFS works together with the region’s indigenous community to
maximise the social benefits and promote this unique culture.
TFS is committed to sustainable development as a way of ensuring
shared long-term benefits for the community, environment and
TFS.
Environmentally Responsible
TFS adopts a proactive approach to environmental management.
Locally, the TFS Sandalwood plantations are assisting to lower the
water-table and reduce salinity problems across the Ord River
Irrigation Area (ORIA).
TFS is committed to plant only on previously cleared farming land.
The bio-diverse nature of Sandalwood plantations makes them an
ideal nesting place for native birds.
In 2006 TFS opened the first ever water recycling project in the
ORIA. TFS was recognised as a regional leader in environmental
management, winning the inaugural 2006 Remote and Rural Water
Award from the Western Australian State Government. The water
recycling project has important environmental and economic
advantages and it takes environmentally friendly agriculture and
forestry to the next level.
TFS has obtained accreditation in AS/NZS ISO 14001:2004
(Environmental Management Systems), AS/NZS ISO 9001:2000
(Quality Management Systems) and AS/NZS 4801:2001
(Occupational Health & Safety Management Systems).
Globally, TFS is ensuring the longevity of this much sought after
species.
Investing in Sandalwood
Forestry Performs
The forestry industry has outperformed
the S&P (Standard and Poor's) index for over 30
years.
An investment in Indian Sandalwood forestry with TFS offers a
stable and tax effective investment in an alternative asset class
with the potential for excellent returns.
An investment in Indian Sandalwood forestry with
TFS offers a stable and tax effective investment
in an alternative asset class with the potential
for excellent returns.
High Demand for Indian
Sandalwood
Sandalwood has been an integral part of Asian
culture and religion for millennia, and remains
a key ingredient in leading fragrances and
cosmetics.
The Indian species of Sandalwood (Santalum
Album) commands the highest price at auction due
to its superior oil yields and long-term market
acceptance. The current price for Indian
Sandalwood logs averages over A$107,000 per
tonne (December 2007 Indian auction).
Depleted Supplies
Due to such high demand for the wood and oil of
the Indian Sandalwood tree, and an unbridled
black market, supplies are rapidly diminishing.
Experts predict that current production levels
in India of the Indian Sandalwood tree cannot be
sustained if illegal harvesting cannot be
restricted.
Australia has the only known commercial
plantations of the species in the world, with
TFS being the largest.
Soaring Prices
An increase in the price of Indian Sandalwood of
21% per annum (compounded) has been sustained
for the last 16 years.
Experts predict a continuing increase in price
of at least 5% per annum due to the
ever-increasing supply/demand imbalance of
Indian Sandalwood.
Optimal Growing Conditions
The Ord River Irrigation Area (ORIA) of tropical
Western Australia displays ideal conditions for
the healthy growth of Indian Sandalwood.
The intellectual property built up by TFS over 8
years of plantation experience in the ORIA is
second to none.
Supporting this is over 15 years of government
research into Indian Sandalwood silviculture in the ORIA.
TFS 2008 Project
Features
100% tax effective product
rulings
TFS 2008 has been granted a Product Ruling (PR
2008/4) from the Australian Taxation Office (ATO).
The ruling confirms that all fees paid in
relation to TFS 2008 are fully tax deductible in
the financial year they are paid1.
Growers that are registered for GST may also
claim input tax credits for GST paid in relation
to TFS 2008. By becoming a Grower, you are
deemed to be in business and therefore entitled
to register for GST.
Discount for Additional
Lots
TFS 2008 has a minimum investment of one sixth
of a hectare (1/6th Ha) for the entry price of
$11,500 plus GST, with volume discounts
available.
Twelve Months Interest
Free
Establishment Fees may be paid over a period of
12 months, exclusive of interest. A deposit of
20% of Establishment Fees will be required upon
application.
Attractive, Long-Term
Finance
TFS has a range of finance options available and
details can be obtained by contacting TFS.
Ability to Defer Ongoing
Fees
Following the initial Establishment Fee,
a Grower may elect to defer Lease and Management
Fees via an annual election.
A percentage of Gross Proceeds of Sale (GPS)
will be deducted for each year a Grower elects
to defer. This deferral percentage will decrease
over the term of TFS 2008 (see below).
Costs and Options
Fees per Sandalwood Lot of 1/6th Hectare
Option 1 – Annual Investment Option
|
Establishment Fee |
TFS Fee (AUD)
|
GST (AUD) |
Total (AUD) |
|
1 to 5 lots |
11,500 |
1,150 |
12,650 |
|
6 or more lots |
11,000 |
1,100 |
12,100 |
|
Annual Management Fee2 |
1,000 |
100 |
1,100 |
|
Annual Lease Fee2 |
200 |
20 |
220 |
Annual deferral of Lease and Management Fees is
available on the following basis:
|
|
|
Percentage of Gross Proceeds of Sale |
|
Years 1 – 6 |
4% |
|
Years 7 – 10 |
3% |
|
Years 11 – 12 |
2% |
Option
2 – Joint Venture Option
At the same pricing structure, growers may enter into a Joint Venture arrangement with a second party, such as a spouse, Superannuation
Fund or similar whereby the first partner pays the Establishment fees and the JV partner pays the ongoing Lease
& Management fees.
At harvest the Net Proceeds of sale will be divided equally between the Joint Venture partners. A minimum of 2 woodlots is required
to be taken under this option.
|
Notes: |
|
1 |
Growers should be aware that Product Ruling 2008/4 is based on the precise arrangements
identified in the Rulings. If the arrangement described in the Ruling is materially
different for the arrangements actually carried out, the Ruling has no
binding effect on the Commissioner and will be withdrawn or modified.
Growers are recommended to read the Product Ruling in its
entirety and seek their own professional taxation advice
concerning the taxation implications to term of
investment in TFS 2008. |
|
2 |
Annual Fees increase at a fixed rate of 2% per annum
in the year following the Establishment Period. |
|
3 |
Harvesting should commence in Year 13 and be
completed by Year 14. No Lease or Management
Fees will be payable for years 13 and 14. |
The financial assumptions and risks of TFS Sandalwood Project 2008 (TFS 2008) are shown in the Product Disclosure Statement (PDS).
Only the PDS contains the offers to subscribe for securities in TFS 2008 and you should consider the PDS in deciding whether
to acquire an investment in TFS 2008. You will need to complete the Application Form in or accompanying the PDS.
The Responsible Entity for TFS 2008 and the entity making the offers is TFS Properties Ltd.
Tropical Forestry Services Ltd and TFS Properties Ltd are both wholly-owned subsidiaries
of TFS Corporation Ltd. A reference to TFS in this brochure is a reference
to all or one of these entities, depending on the context.
|
