Paulownia Newsletter A4

Paulownia Post Newsletter for Environmental Forest Farms Growers

Kiri Park Grower’s DayEnvironmental Forest Farms is taking a different approach to inspections of the Kiri Park Plantation to that taken in past years.

We will have several days in March/April where Growers can make their own way to Kiri Park for a pre-arranged private inspection of the plantation. These inspections will be carried out every second weekend by arrangement. Our Business Development Managers will present between the hours of 10:00am and 2:00pm and will be pleased to show you around and discuss current developments at the property. Growers are welcome to arrange with our BDMs for a personal visit to the property on any weekday by telephoning Paul Stanley our National Marketing Manager on 9227 8422 or 0424 656 346 or Michelle on 9227 8422.

THE EFF GROUP www.environmentalforestfarms.com

SUMMER

2007

Marketing in 2007The 2006 year was extremely good for planting at Kiri Park and the plantation also experienced a very good growing season.

Marketing is in full swing this year and now that Kiri Park has extended its borders, more woodlots on the new property will be available for investment. There are still some woodlots available on the existing Kiri Park Plantation, which are expected to be allotted this year. Full details on the Kiri Park Projects 2007 Growers are contained inside this newsletter.

There are some Units available in the Kiri Timber Trust but again, these are expected to be sold quickly because of the interest we have had from institutional investors and the general public. Full details on the Kiri Timber Trust are also contained inside this newsletter.

Kiri Park Extends it BordersFollowing the success of the Kiri Park series of Paulownia plantations undertaken by the EFF Group of Companies, the Group is pleased to announce the purchase of a new property, directly adjacent to the property that currently constitutes Kiri Park.

The Harris Road component of Kiri Park has a small number of woodlots available for investment, whilst further woodlots will be available on the new property. The new property, being located next to Kiri Park is similar in terms of soil quality and water availability and has also been cropped for many years meaning the property is cleared, tilled and has a proven agricultural history. Further details on the new property will be released in due course.

Inside this Edition

g Half Yearly Grower’s Report

g New Projects - Something for everyone

g EFF AGM

g Mates Rates at Highpoint

g Grower’s Day at Kiri Park

IntroductionThis Report provides a concise assessment of the operations in relation to the Paulownia Plantations at the Kiri Park Property. This Report relates to the following Managed Investment Schemes: • Kiri Park Project (ARSN 091 158 897) • Kiri Park Project 2 (ARSN 096 225 400) • Kiri Park Projects (ARSN 107 747 348) - 2004 Growers - 2005 Growers - 2006 Growers - 2007 Growers

Environmental Forest Farms Management Limited (“the Responsible Entity”) is the Responsible Entity for each of these Projects and as such is responsible for the operation and management of the Projects. Any financial information contained in this Report is based on Management accounts and has not been audited nor is it required to be audited.For Audited Financial Reports of each Project, please see the appropriate Financial Statements, for the year ending 30 June 2006. Copies of the appropriate audited Financial Statements have been sent to Growers in each respective Project and are also available from the Responsible Entity’s website at www.kiripark.com.au.

Key AchievementsThe Board and Management of the Responsible Entity are pleased with the progress of the Plantations during the half year ended 31 December 2006. Some of the significant developments at Kiri Park during the year include:

Major Irrigation Network UpgradeEFFM has commenced a major irrigation network upgrade at Kiri Park which includes several key developments aimed at ensuring the continued water security at the plantation. These developments are as follows:

• Commissioning of New Bores EFFM is commissioning a number of new bores to add to the amount of water that is available in the irrigation system. This will help provide for all newly planted seedlings until Kiri Park is completely planted out as well as providing more water for all existing trees.

• Mainline Upgrade The mainline at Kiri Park is undergoing major work to increase the efficiency with which water can be transported around the property. The work is to cater for the new bores but also to lift the available water in the network.

• Irrigation Hub The construction of the new irrigation hub has commenced. The hub will provide increased support to the network allowing for better fertigation and increased utilization of the settlement dam.

• Planting of Seedlings Planting of seedlings for the KPP 06 Growers was completed during the period. This was one of the largest planting efforts at Kiri Park ever.

Review of OperationsThis section of the Report provides Growers with a concise review of the operational activities that occurred at the Kiri Park Plantations. For ease of reporting, the half year period has been segregated into quarterly periods.

July 2006 to September 2006Following the success of the past two Growing Seasons at Kiri Park, Plantation Management are keen to ensure that the trees’ growth is not slowed and Kiri Park continues to be well maintained. Plantation Management understand that key operational and silvicultural actvities must be completed before the trees commence their growth. As such the following activities were completed during the July September quarter: • Trees in all plantations were pruned and where appropriate received uplifts. This will allow for greater bole height growth and the ability to add to merchantable volume throughout the Growing Season. • The Weed Managament Program continues to be extremely successful with Plantation Management controlling weeds through both mechanical and chemical means throughout the winter. • Locusts tested the Pest Management Program this year but substantial preparation and careful management has ensured that the trees were unaffected by the insects.


Grower’s Report

THE EFF GROUP NEWSLETTER l SUMMER 2007

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• Woodlots for the KPP 06 Growers were prepared for the planting to occur in the October - December quarter. • As discussed, the irrigation network is in the process of receiving a major upgrade. As part of this upgrade irrigation lines for the KPP 06 Growers were established and are operating extremely well. • A complete maintenance review of bores, pumps and other irrigation equipment was completed to ensure irrigation infrastructure operates efficiently through the Growing Season. • All other general maintenance to the property such as grading of laneways and repairs to fences continue to be completed.All activities were performed in accordance with Company’s procedures and best practice silviculture and forestry principles.

October 2006 to December 2006The Growing Season commenced during this period as did the irrigation program. Plantation Management have had access to extra water so far this Growing Season and much of their focus has been upon utilising it best. The Weed Management and Pest Management Programs were continually monitored and adjusted as required. The main activities completed during the period were as follows: • Weeds were slashed and sprayed to EFFM’s specifications to provide ground cover but not impact upon the growth of the trees. • Plantation Managers continued to nurture natural wildlife at Kiri Park to assist in combination with insecticides and fungicides with EFFM’s Pest Management Program. • Laterals were removed from seedlings and trees where appropriate.

• The Irrigation Network Upgrade continued as well as the day to day general maintenance to the network.

• The Company’s Fire Management Program was implemented to ensure that fire breaks were maintained in accordance with government requirements. Potential fire hazards were identified and appropriate preventative measures were implemented in a timely manner.All activities were performed in accordance with Company’s procedures and best practice silviculture and forestry principles.

ExpenditureThe expenditure of Environmental Forest Farms Management Limited (the Manager and Responsible Entity)

for the Kiri Park Projects during the half year ended 31 December 2006, is illustrated below:Through increased planting and development at Kiri Park, the proportion of expenditure on overheads continues to decrease.

Future Developments The Responsible Entity and EFF Group are working continually to improve the facilities and add value to the Kiri Park Plantations. As faciltiies at the plantation improve, value is added by bolstering the capacity of the plantation to achieve expected growth targets.The future developments at Kiri Park are expected to include:

• Final commissioning of new bores and the irrigation hub;

• Continuing development of the land for each Woodlot as it is sold in the Kiri Park Projects: 2007 Growers;

• Continuing to implement best practices in silviculture and the general maintenance of the Kiri Park Plantations.

Compliance with the Lease and Management AgreementsDuring the half year ending 31 December 2006 the Responsible Entity complied with all provisions of the existing Lease and Management Agreements. There were no breaches of the Lease and Management Agreements during the financial year.

ConclusionThe water security to the plantation continues to be improved. EFFM considers this a priority and have implemented key policies to ensure that all trees in the plantation continue to receive the appropriate amount of water.We consider that the infrastructure improvements during the July to December period will substantially reduce any risk of drought and contribute to the increased performance of the trees.We look forward to reporting on the outcome of the irrigation network upgrade at the end of the Growing Season.




Kiri Timber TrustThe Kiri Timber Trust is a new investment product being offered by Environmental Forest Farms Management Limited. It is an unlisted unit trust which consists of 40,000, 6 year old trees at Kiri Park.

The Kiri Timber Trust is a rare investment opportunity because established plantations are not commonly available for investment.

The Kiri Timber Trust has 6 million units only. There is no capacity for over subscription.

l Capital Guaranteed

l Incentive Fee to EFFM only payable after investors receive 12.4% return

l Only 6 years

l No ongoing fees

This is an ideal product as an addition to the diversified self managed superannuation portfolio. The product presents a lower risk than most other agribusiness investments because it is an investment in an established plantation.

The Kiri Timber Trust has been independently reviewed by Property Investment Research. It received an “A” rating overall.

A copy of the research report can be obtained from our website at www.kiripark.com.au or by contacting our office on 08 9227 8422.

If you would like to learn more about the Kiri Timber Trust or request any of the Project Documents please contact Victor Rosenberg on 0411 661 333 or by email to [email protected].

Kiri Park Projects 07 GrowersThe Kiri Park Projects: 2007 Growers is the next instalment in the successful Kiri Park Projects which are considered to be one of Australia’s leading Paulownia timber managed investments.

Environmental Forest Farms Management Limited is pleased to continue to offer a 10% rebate to all existing Growers.

There are a number of attractive finance packages for the 2007 Growers Project which include:

l 12 month interest free finance

l 5 year principal and interest finance

l 8 year principal and interest finance

Once again, the 2007 Growers Project offers investors exceptionally high returns as well as outstanding tax benefits guaranteed by its ATO Product Rulings 2006/150 and 2006/151.

The Kiri Park Projects: 2007 Growers has been independently reviewed by PIR Independent Research, who gave it an A+ rating. This rating improves upon last year and shows that the EFF Group Management continue to strive to produce a better investment product for our investors.

For more information about how the 2007 Growers Project can benefit you please contact our National Sales Manager Paul Stanley on 0424 656 346.


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New StaffThe EFF Group is proud to announce the appointment of a number of new staff to our team.

Victor Rosenberg has been appointed to the position of Business Development Manager. A Pharmacist by profession, Victor spent most of his life in pharmaceutical and food manufacturing. A successful business

person and City Councillor of 10 years Victor is a welcome addition to a very experienced advising team.

Alan Chesney has been appointed to the position of Relationship Development Manager. As Olympic gold medalist with over 20 years experience in financial services, Alan is a proven performer. He continues to play Hockey regularly

representing both WA and Australia in the Masters.

Jessica Smith is a graduate of Edith Cowan University who has been appointed to the position of Graduate Forest Management Assistant. Jessica recently completed a Bachelors Degree of Science majoring in

Environmental Management. Jessica is keen to learn about plantation management and in particular the silviculture of Paulownia.

WealthsureBoth the Kiri Timber Trust and the Kiri Park Projects: 2007 Growers have recently been added to the Wealthsure Pty Ltd Approved Products List. This follows an excellent review of both products by Property Investment Research including an improved rating for the 2007 Growers Project from last years review. Wealthsure are one of Australia’s leading financial planning firms and the group has close associations with all of the major investment institutions. WealthSure is committed to providing superior financial service to all of its clients.

EFF Group Fast Facts g Over 600 Growers

g Over 1,200 Woodlots Planted

g Over 200,000 Trees Under Management

g 3 Private Plantations

g Wholly Owned Timber Mill

g Emus at Kiri Park - Over 30

g Kangaroos at Kiri Park - Over 40


Chairman’s AddressEFF Limited hosted its first Annual General Meeting at its head office facilities on 30 November 2006. Shareholders were able to view timber that was harvested from our Nowergup Research Plantation last year which has been made into lining board and is displayed in our showroom. Plantation Management from both Kiri Park and Nowergup were available to chat to everyone who attended as well as our Directors and Administrative staff. We thank all those Shareholders who attended and hope you enjoyed our premises.

The thinning of trees from Nowergup continues with the logs being rough sawn onsite before being taken to Highpoint Timbers to be dressed and sold. The harvesting and processing of the timber has been a success for the EFF Group as we are now starting to formulate the best ways to harvest and utilise the timber to be extracted from Kiri Park in the coming years.

Timber sales from Highpoint continue to increase as the interest in Paulownia timber continues to grow. We, and our customers have found, that Paulownia with its clear grain is versatile in a variety of uses.

Environmental Forest Farms is pleased to invite all Growers and Shareholders in the EFF Group to arrange a private inspection of the plantation.

We look forward to seeing everybody at the Grower Days in March/April 2007. Please remember to pre-book so that we can cater for you.

Please note that due to Health and Safety and Security reasons, persons will not be able to gain access to the property without prior arrangement.

Best Wishes,

Syd ChessonChairman EFF Limited

Environmental Forest Farms Management LimitedACN 087 201 670 AFSL 239 635

Level 1, AustAsia House, 412 - 414 Newscastle Street, West Perth WA 6005 PO Box 332 Leederville, WA 6903Tel: (+61 8) 9227 8422 Fax (+61 8) 9227 8455 Email: [email protected]

Web: www.environmentforestfarms.com.au


Mates RatesHighpoint Timbers, a wholly owned subsidiary of the EFF Group is pleased to offer all existing Shareholders in the EFF Limited a discount of 10% (including GST) on all timber purchased from Highpoint. Conditions apply, please contact Highpoint to find out more about this offer.

Highpoint ProductsHighpoint Timbers continue to offer the best range and Paulownia timber products in Australia including: • Dressed All Round - huge range of sizes and lengths availableFor use in Cabinetry: • Panelling - clear grade Paulownia timber brightens any room - perfect for alfresco ceilings, eves and walls • Mouldings - many different profiles or we can custom make for you - highpoint Timbers supply picture frames, skirting and other moulds • Strip Planking - high strength/low weight - premium Kiri Marine TimberTM used in boat building • Rough Sawn

Highpoint Timbers are Australia’s largest supplier of Australian Grown and imported rough sawn Paulownia timber.

For a quote please called Rachel on (08) 9592 4093.


Paulownia Newsletter A4

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