INVESTING WITH TFS
The TFS Sandalwood Project 2011 (TFS 2011) (ARSN 150 211 171)
is the company’s fifteenth Indian Sandalwood Project under management.
Expert Forester to TFS, Peter Kimber and their Senior Forester Chris
Done, are widely renowned as Australia’s foremost Sandalwood
experts. Both Peter and Chris previously worked with the WA
Department of Conservation and Land Management (CALM) on the
original Sandalwood trial plantations in the area. Together with the
experienced plantation management team located in Kununurra,
your plantation is established and maintained to the highest order.
The TFS parent company, TFS Corporation Ltd, listed on ASX
Limited in December 2004 (ASX Code: TFC).
In 2008 TFS acquired leading global WA Sandalwood distiller
Mt Romance. This WA based company adds expert knowledge in
processing and distillation, as well as a blue-chip client base in the
global fragrance industry. TFS is committed to exploring opportunities
in an ever-expanding market place with demand for fragrances,
religious products and pharmaceuticals forecast to increase.
Dedicated to Sandalwood
TFS first planted Indian Sandalwood in Kununurra in 1999 and
has since planted over 3,700 hectares of commercial Indian
Sandalwood plantations on behalf of over 3,000 individual
growers and companies associated with TFS. By 30 June 2011 a
further 1,088 hectares (approximately) of Indian Sandalwood will
have been planted on behalf of approximately 350 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 addition
to the trees owned directly by the Company, TFS has a vested interest
in the trees of the growers who elect to defer payment of their annual
management fees. In some instances this deferral could accumulate
up to 40% of the harvest.
TFS is committed to sustainable development to preserve long-term
benefits for the community, environment and TFS.
TFS supports local and indigenous communities through the
sponsorship of cultural and educational programs and the creation
of local employment opportunities.
The unique climate of tropical north Australia provides an ideal location
for the growth of Indian Sandalwood. TFS is committed to preserving this
unique region and minimising the company’s environmental footprint.
TFS believes that it can be part of a better world, starting with the
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). The bio-diverse nature of Sandalwood
plantations also 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, helping to take environmentally friendly
forestry to the next level.
TFS has obtained accreditation in ISO 14001 (Environment),
ISO 9001 (Quality) and AS 4801 (Health & Safety).
On a global scale, TFS is ensuring the longevity of this much
sought after species.
INVESTING IN SANDALWOOD
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 thousands of years, 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$100,000 per tonne.
Due to such high demand for the wood and oil of the Indian
Sandalwood tree, and an unbridled black market, supplies are
Experts predict that current production levels of the Indian
Sandalwood tree cannot be sustained if illegal harvesting cannot
Australia has the only known large-scale commercial plantations
of Indian Sandalwood in the world, with TFS being the largest.
An increase in the price of Indian Sandalwood of 18% per annum
(compounded) has been sustained for the last 18 years.
Experts predict a continuing increase in price of at least 5% per
annum due to the ever-increasing supply/demand imbalance of
Optimal Growing Conditions
The tropical north of Australia displays ideal conditions for the
healthy growth of Indian Sandalwood.
The intellectual property built up by TFS over 10 years’ of plantation
experience is second to none.
Supporting this is over 20 years’ of government research into Indian
2011 PROJECT FEATURES
100% Tax Effective Product Rulings
TFS 2011 has been granted a Product Ruling (2011/9) from the Australian
Taxation Office (ATO). The rulings confirm that all fees paid in relation to TFS
2011 are fully tax deductible in the financial year they are paid.1
Growers that are registered for GST may also claim input tax credits for GST
paid in relation to TFS 2011. By becoming a Grower, you are deemed to be
in business and therefore entitled to register for GST.
Discount for Additional Lots
TFS 2011 has a minimum investment of one sixth of a hectare (1/6th Ha) for
the entry price of $12,500 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.
Ability to Defer Ongoing Fees
Following the initial Establishment Fee, a Grower may elect to defer Annual
Fees and Rent via an annual election.
A percentage of Gross Proceeds of Sale will be deducted for each year a
Grower elects to defer. This deferral percentage will decrease over the term of TFS 2011 (see Deferral Fees table).
COST AND OPTIONS4
Fees per Sandalwood Lot of 1/6th Hectare
|ANNUAL INVESTMENT OPTION
Number of Sandalwood Lots applied for by Applicant
|1 – 5 lots
|6 or more lots
ANNUAL DEFERRED INVESTMENT OPTION
Number of Sandalwood Lots applied for by Applicant
|1 – 5 lots
|6 or more lots
Annual deferral of the Annual Fee and Rent is available on the following basis:
|Year of Deferral
||Percentage of Gross Proceeds of Sale to which the Responsible Entity is Entitled to in respect of that year
Years 1 – 2
||3% (plus GST)
Years 3 – 6
||2% (plus GST)
Years 7 – 12
||1% (plus GST)
1 Growers should be aware that Product Ruling
2011/9 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 2011. Grower’s who elect to collect their own Sandalwood cannot rely on the ATO Product Ruling in respect of their Sandalwood Lots in the Project.
2 The Annual Fee and Rent increase at a fixed rate of 3% per annum in the year following the Establishment Period. No Annual Fee and Rent will be payable for years 13 and 14.
3 TFS Properties anticipates that the Harvest of the Sandalwood will occur in Year 14 after Establishment.
4 Additional fees and costs may apply. Please refer to Table 1 in the TFS 2011 Product Disclosure Statement for a complete list and explanation of project fee and costs.
The financial assumptions and risks of TFS Sandalwood Project 2011 (TFS 2011) are shown in the Product Disclosure Statement (PDS). Only the PDS contains the offers to subscribe for securities in TFS 2011
and you should consider the PDS in deciding whether to acquire an investment in TFS 2011. You will need to complete the Application Form in or accompanying the PDS. The Responsible Entity for TFS 2011
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.