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Great Southern 2008 Diversified Olives Income Project

Great Southern 2008 Diversified Olives Income Project
Cash Rebate 8.25%
Closing Date CLOSED
Minimum Investment $5,750 (ex GST)
Term of Project 20 years
Research AAG 4 stars
Adviser Edge 4 stars
Lonsec Recommended
ATO Product Ruling 2008/54
Telephone: 1800 258 348
Fax (Applications): (08) 9321 1666
Fax (Finance): (08) 9321 9940

Olive oil is associated with boosting the immune system, lowering cholesterol and minimising the signs of ageing, and as such global consumption has continued to expand.

Investors can now participate in this ancient industry and benefit from unremitting demand, by investing in the Great Southern 2008 Diversified Olives Income Project.

The opportunity

The Great Southern 2008 Diversified Olives Income Project provides investors with the opportunity to grow olives in conventional and fully certified organic olive groves. The Project is expected to comprise approximately 40-50% organic and 50-60% conventional olives.

Oil will be extracted from the conventional olives and sold as extra virgin olive oil on behalf of growers. The organic olives will be harvested and sold as fruit for use in the production of organic extra virgin olive oil. Both varieties of oil are intended to be sold in local and international markets.

Investors will benefit from excellent taxation advantages and are expected to receive a regular long term income from the sale of the conventional olive oil and the organic olive fruit produce.

Why Great Southern?
Great Southern is widely regarded as Australia’s leading agribusiness investment manager, with a track record of success over 19 years and nearly 40,000 investors. Great Southern’s forestry estate is one of Australia’s largest and more than 100 million trees have been planted to date.

The company’s net assets as at 31 March 2007 exceeded $714 million, including over 3 million hectares of prime and pastoral agricultural land, owned or held by long term lease across Australia. Great Southern Limited is an S&P/ASX200 listed company.

Olive oil: an international favourite

Enjoyed for thousands of years around the Mediterranean, olive oil is now valued across the globe for its health and culinary virtues. Over approximately the last 15 years, global demand is estimated to have grown by around 3.5%, driven substantially in recent years by an increased awareness of olive oil’s health benefits, in particular from extra virgin olive oil.

Spain, Italy and Greece are the world’s largest consumers of olive oil and are also the world’s largest producers, together generating around 74% of the world’s supply in 2005/06. These three nations supplied 94% of the 11,900 tonnes of extra virgin and virgin olive oil imported into Australia in 2005/06 and were pivotal in providing for Australia’s domestic demand of around 18,900 tonnes. In 2006/07 Australia’s total olive oil imports were estimated to total around 27,000 tonnes and consumption was estimated to exceed 35,000 tonnes.

While Australia is comparatively a small producer of olive oil (accounting for around 0.45% of world production), production levels are now five times higher than in 2003/04 and, based on recent plantings and an ideal growing environment, production is expected to increase significantly. As the industry, infrastructure and horticultural technology continues to develop, Australia is expected to be well placed to reduce its reliance on olive oil imports and to take advantage of significant export markets.

Organics: exceptional demand
The basic principal of organic farming is to produce commodities without the use of artificial fertilisers or synthetic chemicals, and emphasises the use of renewable resources, the need for conservation, the maintenance of environmental quality and animal welfare.

The industry is currently in a period of rapid expansion, fuelled by exceptional consumer demand. In Europe, the USA, Japan and Australia demand has increased by approximately 20- 25% per annum for the past 5-10 years, and in many developed nations organic foods are the fastest growing segment in the food market.

The value of Australia’s organic exports is currently estimated at around $50 million per annum and Australia boasts the largest amount of certified organic land of any country. As demand continues to surge, opportunities may exist for Australian producers to capitalise on growth markets and the premium prices organic products attract.

Project features

The Great Southern 2008 Diversified Olives Income Project is supported by numerous security features.
The Australian Taxation Office (ATO) Product Ruling PR 2007/44 confirms the investment is 100% tax deductible† over the first three years of the Project.
Full insurance is expected to be available and will provide security for investors in the event of loss of crop or income as covered by the policy.
A Stocking Guarantee confirms there will be an average of 330 young organic olive trees and 380 young conventional olive trees, 12 months after the commencement of the Project.
Great Southern pools harvest proceeds, which manages the inevitable risk associated with some grovelots performing better than others.
Olive experts are engaged to oversee and report to investors on the Project’s progress.
No out-of-pocket fees; with all management costs, and annual insurance fees, borne by Great Southern or via your returns.
Ability to subscribe to options in the company that owns the olives land and assets, through a separate options prospectus.*
The growing regions
The conventional and organic olive groves for the 2008 Project are expected to be located near the olive groves Great Southern has established for previous Projects, including the Moore River, Avon Valley or Preston Valley regions in southern Western Australia.

The groves may also be located in other areas Great Southern deems suitable for the commercial production of olives.

Each site will be subject to rigorous testing and must be found to have suitable climate and soils before it is included in the Project.

The Project offers an excellent opportunity to participate in the rapidly expanding olive oil and organic industries.
100% tax deductibility
An expected long term income stream
Numerous security features
The risk management benefits of portfolio diversification
Expected contracts for the sale of conventional olive oil and organic olives
Strong local and international export markets for end product
Flexible finance options including 12 months interest free
Expected opportunity to invest in options in public unlisted company, Great Southern Olives Company Ltd (GSOCL)*

Project structure
Minimum investment Invest as little as one grovelot ($6,325 GST inclusive), which will comprise 0.1 hectares and approximately 35 olive trees.
Term Approximately 20 years.
Tax deductibility Investments are 100% tax deductible over the first 3 years of the Project (80% in 2008, 10% in each of 2009 and 2010). The ATO has issued Product Ruling PR2007/44 in relation to the Project†.
Finance options Flexible finance options are available, including 12 months interest free, and a range of principal and interest loans.
No out-of-pocket fees All ongoing management costs will be borne by Great Southern or via your harvest proceeds. You will not be required to make any additional payments, at any time over the life of the Project.
Returns Investors are expected to receive annual returns from their proportionate share of olive harvest and oil sale proceeds for 16 years, commencing after year five. Grovelots are expected to reach maturity after eight years.
Sales contracts Great Southern expects to enter a contract for the sale of organic olives to Kailis Organic Olive Processing and Packaging Pty Ltd, who produce organic extra virgin olive oil to be sold locally and internationally. Great Southern also expects to enter into an agreement with Sumich EVOO Australia Pty Ltd for the sale of the conventional olive oil produced from the Project. The terms and conditions of both these agreements are set out in the Product Disclosure Statement.
Subscribe to options Investors can subscribe to options in the public unlisted company, Great Southern Olives Company Ltd. Please refer to the options prospectus for more details.*

Great Southern carefully assesses land before it is included in the Project.

The olive groves are watered by a fully automated computer controlled irrigation system.
Olive grove management plans are prepared. Each grovelot is 0.1 hectares in size. The olive groves are expected to reach full production approximately 8 years after planting, during which harvest yields are expected to increase.
The olive trees will be those species considered most appropriate for producing extra virgin olive oil. The Project is expected to comprise approximately 40-50% organic and 50-60% conventional olive trees, and a mix of young and mature trees. The olives are harvested and the conventional portion is processed. An agreement is expected to be negotiated with Kailis Organic Olive Processing and Packaging Pty Ltd for the sale of the organic olives; and Sumich EVOO Australia Pty Ltd for the sale of the conventional olive oil.
The olive groves are managed and maintained by Great Southern. This includes pest and weed control in accordance with strict certification requirements.

Great Southern will pursue organic certification for the organic portion of the Project.
When securing their investment, investors can subscribe to options in Great Southern Olives Company Limited (GSOCL) through a separate options prospectus*.

IMPORTANT: The information contained in this summary is by way of general summary only and has been prepared without taking into account any person’s individual objectives, financial situation or needs. Before making any decision to acquire an interest in the Great Southern 2008 Diversified Olives Income Project ARSN 124 197 897 (the ”Project”) a person should consider the appropriateness of the information to their individual objectives, financial situation and needs and if necessary seek advice from a suitably qualified professional. Great Southern Managers Australia Limited AFSL 240 787 is the issuer of the Project and has issued a Product Disclosure Statement (“PDS”) for the Project which details the terms of the Project. Anyone wishing to invest should consider the contents of the PDS and complete the above application. The information is provided in good faith and believed by Great Southern Securities Pty Limited AFSL 240 788 to be accurate at the date of issue. However, no representation or warranty is made as to the accuracy, reliability or completeness of this information. Except to the extent that statutory liability cannot be excluded, Great Southern Securities Pty Limited and its related entities, directors, employees, and agents accept no liability (including liability to any person by reason of negligence or negligent misstatement) for any statements, opinions, information or matters (expressed or implied) arising out of, contained in or derived from, or for any omissions from, the information contained herein.

* Great Southern Olives Company Limited ACN 121 381 208 offers options to the public through a prospectus and supplementary prospectus, however investors in the Project can apply on a priority basis ahead of other applicants. Any applicant wishing to subscribe to the options will need to complete the application form enclosed with the prospectus.

The Product Ruling is only a ruling on the application of the taxation law and is in no way expressly or impliedly a guarantee or endorsement of the commercial viability of the Project, of the soundness or otherwise of the Project as an investment, or of the reasonableness or commerciality of any fees charged in connection with the Project. The Product Ruling is only binding on the Commissioner of Taxation if the Project is implemented in the specific manner provided in the Product Ruling.

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