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2008_GCP_SOA

VIEWS: 15 PAGES: 17

									STATEMENT OF ADVICE
2008 GRAIN CO-PRODUCTION PROJECT

Pursuant to the 2008 Grain Co-Production Project Product Disclosure Statement (PDS) dated
29th February 2008




Prepared for:


<CLIENT’S NAME>

Date issued:    <Date>


Prepared by:

<Adviser’s Name>
Financial Planner
<Company Name>

ABN <Company ABN No.>
<Company Address>

Ph: <Company Phone No.>
Fax: <Company Fax No.>

Authorised Representative of
<Licensee Name>

AFS License No. <AFSL No.>
ABN <Licensee ABN>
<Licensee Address>

Ph: <Licensee Ph No>
Fax: <Licensee Fax No>
You are entitled to receive a Statement of Advice (“SoA”) whenever we provide you with any
personal financial advice. Personal financial advice is advice that takes into account any one or more
of your objectives, financial situation and needs.

This SoA is a record of the personal financial advice provided to you and outlines strategies to meet
your objectives and demonstrates the financial outcomes. Included is information on the basis on
which this advice is given, information about remuneration including fees, commissions, any other
benefits and any interests, relationships or associations which might influence the making of the
advice.

If this advice includes a recommendation to you to acquire a particular financial product (other than
securities) or an offer to issue or arrange the issue of a financial product to you, we will also provide
you with a Product Disclosure Statement containing information about the particular product to help
you make an informed decision about that product.




2008 GRAIN CO-PRODUCTION PROJECT

CONTENTS
    1.    Executive Summary
    2.    Macro and AACL
    3.    The 2008 Grain Co-Production Project
    4.    Current Personal and Financial Situation
    5.    Risk Profile
    6.    Recommendation
    7.    Alternative Strategies
    8.    How to Implement our Recommendations
    9.    Key Assumptions used in Cash Flow Projection
    10.   Disclaimer
    11.   Disclosure
    12.   Authority to Proceed




SCOPE OF ADVICE
This Statement of Advice is designed to provide financial advice in the following areas of concern to
you:

         Wealth Creation – a medium term growth investment
         Retirement Planning – a means of accumulating funds for retirement
         Tax Planning – a tax effective investment
         Portfolio diversification into an alternative asset class
         Socially responsible investment opportunity

This Statement of Advice provides financial advice of concern to you in the regard to the 2008 Grain
Co-Production Project (“2008 Project”). Only information relating to the 2008 Project has been
obtained and included.




Statement of Advice for <Client Name>
Prepared by <Adviser Name>
Authorised Representative of                                                             2 of 17
<Licensee Name>
1.       EXECUTIVE SUMMARY

We are pleased to provide this investment report for you to consider. This executive summary outlines
your opportunity to establish a grain (wheat and barley) production business via the 2008 Grain Co-
Production Project.

The report explains in detail:

        Benefits of becoming a grain producer or Grower.
        Income that you may reasonably expect to earn by participating as a Grower in the 2008
         Project through growing, harvesting and marketing three annual grain crops to be sold into the
         domestic and international markets each year.

Please ensure that you read the 2008 Grain Co-Production Project Product Disclosure Statement
                th
(PDS) dated 29 February 2008 and our disclaimer and disclosures attached to this report before you
invest in the 2008 Project.

As a Grower you can expect to participate in the following manner:

  Each Grower applies for a certain number of investment units known as Co-Production Units. For
   the 2008 Project, a Co-Production Unit is an area of land that is expected to produce a Project
   Yield of 40 tonnes of wheat or 45 tonnes of barley.

  When lodging an Application Form, a prospective Grower will sign a Power of Attorney that
   authorises Macro Funds Limited (Macro) to enter into a Grower Sub-lease Agreement and a
   Grower Management Agreement on behalf of the Grower.

  The Grower Sub-lease Agreement gives the Grower an interest in a specific area of land for the
   purpose of planting, managing and harvesting a wheat or barley crop.

  The Grower Management Agreement specifies the methodology by which the grain is to be
   planted and managed by Macro and on the Grower‟s behalf appoints Macro to deliver services in
   relation to planting, management, harvesting, delivery, storage, marketing and sale of the crop.

  At various times each season, Macro will forward you regular updates explaining the progress of
   your Co-Production Units, prevailing market conditions for wheat and barley and general
   information in regards to the 2008 Project.

The 2008 Project has been highly recommended by independent researcher Adviser Edge, achieving
a 4 ¼ star rating (out of 5).

Based on their independent research report, which is available upon request, an investor in the 2008
Project has the opportunity to earn attractive returns by operating a grain production business.



The attached cash-flow has been prepared using the 2008 Project Cash-flow Calculator provided by
Macro. The 2008 Project Cash-flow Calculator is not a forecast or estimate of your potential returns
but a guide to assist you in understanding how the multiple variables of the 2008 Project may effect
the investment. The calculator sets out your after tax benefits as a Grower and importantly, outlines
your ongoing obligations for the period of your investment.

The 2008 Project also offers the following features:

    An opportunity to participate in one of Australia‟s largest and most established industries without
     the traditional barriers to entry such as cost,



Statement of Advice for <Client Name>
Prepared by <Adviser Name>
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<Licensee Name>
     Access to mature and established domestic and international markets in which to sell your wheat
      and / or barley.
     Access to experienced managers.
     Attractive after tax returns and tax savings.

This investment report should be read together with the 2008 Grain Co-Production Project PDS dated
  th
29 February 2008, which has been lodged with the Australian Securities and Investments
Commission. Co-Production Units will only be allotted upon the receipt of the Application Form
enclosed in the PDS.

Macro has received Product Ruling 2007/94 from the Australian Taxation Office. The Product Ruling
confirms that all fees and interest (if you borrow using a preferred finance option) relating to the 2008
Project are tax deductible. A full copy of the ruling is available on the Macro web site
www.macrofunds.com.au

If you have any queries arising from this report or the PDS please call our office or call Macro Fund
Limited direct on 08 9217 3100 for more information.




2.        MACRO AND AACL
Macro Funds Limited “Macro” is a funds management business with extensive experience in funds
management, investment management, financial compliance, and investor services and reporting.
Macro is the Responsible Entity for the 2008 Project and has the management expertise and
experience to successfully manage your investment in the 2008 Project.

The Project Manager, Australian Agricultural Contracts Limited “AACL” has developed Grain Co-
Production since 1999 and will carry out the day to day operations of the 2008 Project under Macro‟s
guidance.




3.        THE 2008 GRAIN CO-PRODUCTION PROJECT – YOUR PARTICIPATION
(A)       THE COMMERCIAL OPPORTUNITY

The 2008 Project offers investors the opportunity to participate in one of Australia‟s largest and most
established industries.

In the 2008 Project, you will establish a grain production business, managed on your behalf by Macro,
and will receive the sale proceeds from the sale of the grain from each season‟s Project Pool.

It is intended that the grain harvested each year will be sold to the domestic and international grain
market through established grain marketing companies such as AWB Ltd, CBH Ltd and ABB Grain
Ltd.

As an investor or “Grower” you can reasonably expect to make a profit from the harvest and sale of
grain.

(B)       HOW DOES THE PROJECT WORK?

  The 2008 Project will run for three seasons. Each season commences from approximately April /
   May of each year and finishes at harvest, typically in November / December of the same year.
   There will be a wheat and/or barley crop planted for each of the following seasons:

         2008
         2009

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<Licensee Name>
         2010

     Each Grower applies for a certain number of Co-Production Units. A Co-Production Unit is an
      area of land that is expected to produce 40 tonnes of wheat or 45 tonnes of barley per season.

     The 2008 Project is located on various properties spread across the Western Australian wheat-
      belt and is expected to cover approximately 125,000 hectares of land.

     When lodging an Application Form, a prospective Grower will sign a Power of Attorney that
      authorises Macro to enter into a Grower Sub-lease Agreement and a Grower Management
      Agreement on behalf of the Grower.

     The Grower Sub-lease Agreement gives the Grower an interest in a specific area of land for the
      purpose of planting, managing and harvesting a wheat or barley crop.

     The Grower Management Agreement specifies the methodology by which the Co-Production
      Units are to be established and managed by Macro and on the Grower‟s behalf appoints Macro to
      deliver the services such as planting, managing, harvesting, delivery, storage, marketing and sale
      of the crop.

     The proceeds of the harvested grain from all Co-Production Units for each season are pooled
      together to form the “Project Pool” and each Grower receives a proportion of the Project Pool
      proceeds, pro rata to the number of CPU‟s held in the Project Pool;

You must apply for a minimum of 6 Co-Production Units in the 2008 Project and you will be able to
visit your Co-Production Units and monitor the performance of your Co-Production Units each season.

(C)       WHY INVEST IN THE 2008 GRAIN CO-PRODUCTION PROJECT?

The 2008 Project offers attractive „commercial benefits‟ that can be summarised as follows:
     The 2008 Project offers attractive commercial returns (refer attached cash-flow using the 2008
      Cash-flow Calculator).
     The 2008 Project has received a Product Ruling, from the Australian Taxation Office confirming
      that all of the 2008 Project costs are tax deductible when incurred.
     Through the 2008 Project you will have an opportunity to generate income in established domestic
      and international grain markets where global demand is predicted to continue to increase.
     Australian wheat and barley has a reputation for quality and can attract a premium price over other
      countries.
     Australian grain farmers are uniquely positioned to service the growing Asian, Middle Eastern and
      Sub-continental markets.
     Loan facilities are available from a preferred financier at attractive rates for investors who wish to
      borrow funds to finance up to 100% of the 2008 Initial Period Costs, including the GST
      component, application fees and stamp duty.
     Preferred finance package includes the following terms:
          10 months - interest only payments; plus
          31 months - principal and interest payments
     The only security taken is a charge over your interest in your Co-Production Units plus a personal
      guarantee.

(D)       INITIAL INVESTMENT COSTS

Growers must pay the 2008 Initial Period Costs of $4,000 (plus $400 GST) per Co-Production Unit
being the costs incurred prior to 30 June 2008 for planting and managing the crop and for rent up to
30 June 2008.



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<Licensee Name>
(E)        ONGOING COSTS

There are various on-going costs including the costs to plant the 2009 and 2010 season crops. It is
expected that these costs will be met by the proceeds of the sale of the harvested wheat each season.
Please refer to Section 5 of the PDS.


( F)       HOW MUCH WILL IT COST?

The minimum investment for the 2008 Project is 6 Co-Production Units (or $26,400 for the 2008 Initial
Period Costs including GST).

All fees and costs for 2008 Project are 100% tax deductible in the year they are incurred.


(G)        WHEN DO I RECEIVE MY PROCEEDS?

The harvested produce from all Growers in the 2008 Project are placed into the Project Pool each
season. Your income is your Co-Production Unit‟s percentage share of the Project Pool.

In the 2008 Project it is expected that you will receive income from the sale of the grain in the Project
Pool each season.

It is expected that you will receive the final payments for the sale of the grain after the completion of
the marketing and sale of the grain in the 2010 season Project Pool. This is expected to occur in
approximately May 2011.


(H)        HOW DO I PROCEED?

To proceed with this investment please carefully read the 2008 Grain Co-Production Project PDS
and complete the Application Form enclosed in the PDS.

You may also choose to apply for finance from the preferred financier by completing and signing the
finance documents from Momentum Finance. We will then lodge the completed Application Form,
subscription moneys and finance documents (if applicable) on your behalf with Macro.

The preferred finance package includes terms of 10 months interest only and 31 months principle and
interest at varying interest rates. The attached cash-flow has been prepared on the basis of our
recommended finance facility.

Within 5 business days of receipt of your Application, Macro will write to you to acknowledge your
application.


(I)        PROJECT RISKS

No investment is without risk. A summary of the risks involved with a project of this type are:


Production Risks

       The success of the Grower‟s Crop may be affected by various factors, including but not limited to;

       •   Drought, flood, frost, fire and hail

       It is a condition of the Grower Management Agreement that the Crop be insured against fire
       and/or hail.



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   In most regions of the Australian Grain-belt there is some chance of frost affecting crops at crucial
   stages of their development. Macro expects to select land across a variety of geographical
   locations in an effort to limit Growers‟ exposure to localised weather conditions.

   •      Disease, pests and weeds

   Wheat and barley are susceptible to various pests, diseases and weeds. It is expected that
   applications of appropriate sprays at various times during the Season should assist to control
   these pests, diseases and weeds.

   •      Rainfall

   Seasonal conditions each year have a significant influence on the annual Crop. Lack of rainfall at
   critical times can cause low or no production or affect the quality of the grain. Equally, excessive
   rainfall at critical times can also adversely affect quality.

   While these production risks cannot be eliminated Macro uses various methods to manage and
   minimise the risks including:

   •      Land selection
   •      Farm location diversification
   •      Pooling

   •      Climate Change
       Climatic records and events appear to be indicating that Australia‟s climate is changing. There is
       no certainty as to the impact of climate change to Australian agriculture in the short, medium or
       long term. There are a number of climate models that suggest that certain areas of Australia may
       receive less rainfall than in the past or will otherwise be affected by different weather conditions
       than historically experienced.
       Macro has adapted strategies such as farm location diversification, crop diversification and
       pooling in order to reduce the potential impact that climate change may have on the performance
       of the Project.


Management Risks

   •      Farmer performance

   Under the terms of the Grower Management Agreement, Macro is responsible for the
   management of all the Co-Production Units that comprise the 2008 Project. Macro has appointed
   AACL as the Project Manager to manage the delivery of services that Macro is required to supply
   to the Growers in the 2008 Project. In turn AACL, with the approval of Macro, appoints Contract
   Farmers to undertake all the day to day management activities of each Co-Production Unit.

   There are a number of variable factors associated with grain farming including soil types, salinity,
   weather variations, pest levels, disease outbreaks and technology developments that may affect
   the performance of a Co-Production Unit in any year. Contract Farmers are required to make
   decisions in regard to the management of these variable factors. There is a risk that Contract
   Farmers selected to manage the Co-Production Units may make errors of judgment, be negligent
   or fraudulent in the performance of their management tasks.

   •      Initial data analysis risk

   Macro will identify Contract Farmers with a history of wheat and barley production. Macro and its
   advisers will review and rely on historical data and representations from the Contract Farmers.
   There is a risk that the historical data and representations made to Macro will not be a true
   indication of the Contract Farmer‟s probability of success for any given future Season.



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   Estimates of productivity and quality of each Co-Production Unit rely upon an interpretation by
   Macro and its advisers of a number of factors. There is a risk that Macro or its advisers may
   incorrectly interpret some of these factors and overestimate the expected productivity or quality of
   the Co-Production Units or the ability of the Contract Farmers.

   •   Contract Farmer fraud risk

   Grain Co-Production has been developed as an extension to share-farming. As such, there is a
   significant amount of trust placed in the Contract Farmer to perform their duties professionally and
   honestly. Macro (in conjunction with AACL) has developed a number of systems and procedures
   for monitoring and checking the performance of the Contract Farmers including expert ongoing
   crop inspections, ongoing reporting by the Contract Farmers and various bonuses. However,
   these systems and procedures cannot protect in all circumstances against fraudulent activity. For
   instance, if a Contract Farmer was to not deliver all grain from a Co-Production Unit to the Project
   Pool, or fail to apply the proper fertilisers etc. Macro cannot guarantee that it would detect such
   fraudulent activity in all cases. Further, if a Contract Farmer was fraudulent and did not plant the
   crop it may take a number of weeks for the fraud to be detected and it may take some time to
   recover the funds paid to cover planting costs.

   While these risks cannot be eliminated, Macro uses various methods to manage and minimise the
   risks. These include:

       •       Selection of Contract Farmers.
       •       Ongoing monitoring of Contract Farmers.
       •       On-going inspections by expert agricultural consultants.
       •       Various incentives and bonuses for Contract Farmers.
       •       Contract Farmer financial position and reference check.

   Macro intends to only enter into contracts with Contract Farmers and Farm Lessors who have the
   appropriate level of financial capacity to meet their obligations. To try and ensure that Contract
   Farmers and Farm Lessors have the necessary financial capacity Macro conducts credit reference
   checks. However, Macro cannot guarantee in all cases that their work would detect any financial
   problems. If a contracting party was to get into financial difficulty such that there was action by
   their creditors the legal action may create some problems for Macro in taking appropriate action to
   protect the Crop.

   However, the risk is limited because of the short-term nature of the Grower Sub-lease Agreement
   which is only for one season.


Marketing and Sales Risks

   •   Price risk

   The price received for Australian wheat and barley fluctuates. The factors that cause these
   fluctuations (e.g. international and domestic supply and demand, US wheat futures, foreign
   exchange rates etc.) are beyond the control of Macro.

   •   Cost risk

   The costs of storing grain before sale, and the costs of transporting grain and the costs of
   marketing grain are variable. The variations in these costs are largely outside the control of
   Macro.

   •   Marketing method risk

   As outlined in Sections 10 and 15 of the PDS there are a number of methods available to market
   grain. Macro is responsible for the selection of the method of the marketing and sale of the grain.
   It is possible that the method selected by Macro to market the grain may not produce the best


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   price for Growers. To minimise this risk Macro has appointed external advisers to assist in
   determining the best method of marketing the grain.

   •   Futures and Options Risk

   Where deemed appropriate, Macro may choose to use derivatives to protect the Project Pool‟s
   exposure to international wheat prices and currency exchange risks. The cost of these futures and
   derivatives, if used, will be payable by the Project Pool.

   There is a possibility that in some circumstances the Project Pool would be liable for a “margin
   call” against the underlying positions if prices were to go higher than at the time Macro “locked in”
   the futures position. There is also a risk of having to “wash out” the margin between the positions if
   the Project Pool has insufficient grain to cover the commitment.

   Although it is not anticipated that Macro would be using pricing instruments that subjected the
   Project Pool to margin calls, Macro intends to manage this risk through their Price Risk
   Management Policy, in conjunction with its advisers each season.

   •   Forward contract risk

   Macro, if it believes it is in the best interest of Growers, may enter into forward contracts to supply
   grain from the Project Pool to Grain Acquirers. By entering into a forward contract prior to harvest
   (such as a cash contract or managed pool) Macro would be committing the Project Pool to deliver
   wheat or barley before it was harvested, based on the assessment of the amount of grain
   expected to be produced by the 2008 Project. If the 2008 Project did not produce the grain
   required to meet the forward contract, the Project Pool would have to purchase the required grain
   from other sources to satisfy the contract or pay a “washout” fee. The cost of purchasing additional
   grain or of a “washout” fee would be payable from the Project Pool. If there were insufficient funds
   in the Project Pool at the time it would be necessary to make a call on the Growers.

   Macro intends to manage this risk through their Price Risk Management Policy, in conjunction with
   its advisers each Season.

   •   Counter party risk

   After the grain is harvested it will be delivered, in most cases, to Receival Bin awaiting sale to a
   Grain Acquirer. Once a Grain Acquirer has been identified, the grain will be sold and the title for it
   transferred to that Grain Acquirer. There is a risk, for reasons outside of the control of Macro, that
   Macro does not get paid for the grain or for all of the value of the grain from the Grain Acquirer. In
   the majority of cases Macro will be delivering grain to Grain Acquirers with an established
   reputation and history in the industry.

   Macro intends to manage this risk through their Price Risk Management Policy, in conjunction with
   its advisers each Season.

   •   Grain Acquirer Pool Risk

   When Macro decides to deliver grain to a Grain Acquirer‟s pool (see Section 10 of the PDS), the
   Grain Acquirer will manage the pricing and sale of the wheat or barley in that pool on behalf of all
   of the pool participants. There is a risk that the Grain Acquirer, for reasons outside of the control of
   Macro, does not effectively manage that pool or achieves lower than expected prices for the wheat
   or barley in the pool.

   •   Harvest Loan Risk

   For wheat delivered into Grain Acquirer pools, Macro may decide to access a Harvest Loan
   against the wheat delivered into the pool (See Section 10 of the PDS). Typically participants can
   draw down a Harvest Loan up to the value of approximately 80% of the estimated value of the
   wheat in the pool. There is a risk that the eventual payments and distributions made by the Grain
   Acquirers are less than necessary to repay all of the Harvest Loan.

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     However, in a majority of cases, an underwriting fee is payable in order to underwrite the value of
     the Harvest Loan against the pool failing to distribute enough funds to repay it. Macro will, where it
     deems necessary, pay to underwrite the Harvest Loan.

     •   Interest Rate Risk on Harvest Loans

     If Macro decides to access a Harvest Loan, a variable rate of interest will be payable against the
     amount of the Harvest Loan. There is a risk that the interest rate for that loan could increase.

     •   Deregulation of the Australian Wheat market and the “Single Desk”

     Under current arrangements, the Australian domestic wheat market is de-regulated and most
     export wheat is marketed through the "single desk" system which has traditionally been managed
     by AWB Ltd. Under the "single desk", AWB Ltd had exclusive rights to market bulk export wheat.
     The result is that the “single desk” has established markets in which Australian wheat producers
     can sell their grain internationally.
     AWB Ltd has recently been under examination by the Cole Inquiry which was investigating
     alleged breaches of the United Nations “oil for food” program with Iraq.
     In response to the findings of the Cole Inquiry, the Australian Government has removed AWB
     Ltd‟s “power of veto”. To date, the “power of veto” has enabled AWB Ltd to veto any applications
     for the export of Australian wheat that is seen by AWB Ltd as not in the interests of the national
     wheat pool. The transfer of the “power of veto” from AWB Ltd to the Australian Government has
     created some uncertainty in regards to the operation of the "single desk" and the future role of
     AWB Ltd. Although AWB Ltd currently holds the status as the manager of the “single desk”, it is
     expected that this will not continue into the 2008 growing season.
     Macro cannot forecast whether or not AWB Ltd will continue to maintain its monopoly status as
     the manager of the "single desk", whether the "single desk" will remain in its current structure or
     what the effect on Grain producers or Growers would be.


Lease Risk

     The arrangements for Grain Co-Production require the Project Manager, AACL, to enter into lease
     agreements with owners or lessors of freehold or leasehold farm land. This land will be divided
     into Co-Production Units that will be leased to Macro and in turn sub-leased to Growers under the
     terms of a Grower Sub-lease Agreement. There is a risk to Growers if Macro, AACL or the Farm
     Lessor defaulted under the terms of any of these leases.

     However, the risk is limited because of the short-term nature of the Grower Sub-lease Agreement
     which is only for one Season.


General Risks

     There is a risk that costs associated with the 2008 Project, the price of wheat and barley and
     returns to Growers may be affected by changes in:

     •   local and world economic conditions
     •   interest rates
     •   levels of tax, taxation law and accounting practice
     •   government legislation or intervention
     •   inflation or inflationary expectations
     •   natural disasters, social upheaval or war in Australia or overseas
     •   other factors beyond the control of Macro.
..



Statement of Advice for <Client Name>
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<Licensee Name>
We strongly recommend you read Section 16 – Project Risks contained in the 2008 Grain Co-
Production Project PDS.

It is also important to note that agricultural projects such as the 2008 Project do not have a formal
secondary market for the sale of your Co-Production Units.

(J)       OTHER BENEFITS

In addition to investing in a project with the potential for attractive commercial yields over time, you will
benefit from tax savings due to the tax effectiveness of an investment in the 2008 Project.

Investment may reduce thresholds for a range of tax / Social Security matters. These matters should
be discussed with your adviser prior to the preparation of your 2008 income tax return.

(K)       TAXATION AND GST

As a Grower in the 2008 Project, you will be carrying on a grain production business. All Growers in
the 2008 Project must be registered for GST. As such, you can claim the GST paid to Macro as an
input credit.




4.        CURRENT PERSONAL AND FINANCIAL SITUATION
This Statement of Advice has been prepared for you based on information you have supplied to us,
and from our assessment of your personal financial circumstances and needs, in relation to the Year
Ended June 2008 financial year. It also explains how your financial position may change as a result of
your participation in the 2008 Project.


(A)       A SUMMARY OF YOUR PERSONAL DETAILS:

                  Occupation                          <Occupation>
                  Date of Birth                       <Date of Birth>
                  Anticipated Retirement Date         <Retirement Date>



(B)       A SUMMARY OF YOUR CURRENT FINANCIAL SITUATION

                   Estimated taxable income for
                                                       <Taxable income>
                   the YEJ 2008 financial year
                   Assets                              <Assets>
                   Superannuation                      <Superannuation>
                   Liabilities                         <Liabilities>




(C)     NEEDS AND OBJECTIVES
#{Please amend as necessary}
 A tax effective investment that offers potentially sound returns over the medium term, together
    with an immediate tax deduction that will reduce the impact of income tax.
     You wish to optimise your current year after-tax financial position / protect a current year capital
      gain.


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     A desire to accumulate further funds for retirement outside your superannuation fund.
     A medium term revenue-generating investment.
     A desire to accumulate further funds for retirement with an investment offering a medium term
      income stream that will be received after retirement.
     You wish to deal with potential Division 7A issues that reside within your private company.
     You wish to allocate a percentage of your portfolio in alternative asset classes that offer
      diversification from exposure to property or equity markets.
     You support Australian industry and would like exposure to projects that are sustainable, socially
      responsible and will create benefits to Australian farmers.
     You would like involvement in an industry with good export potential which is therefore beneficial
      to all Australians.




5.        RISK PROFILE
(A)       RISK/RETURN ANALYSIS

In order to ensure that this Statement of Advice is suitable for you, we have based our summary on
your investor profile as follows.


#{if a prudent investor}

You are a prudent investor who wants a balanced portfolio that works towards medium to long-
term financial goals. You require an investment strategy that will cope with the effects of tax
and inflation as well as lower risk through diversification. You are prepared to accept
calculated risks in order to achieve greater returns. While this recommendation may fall
outside your usual risk profile, you are looking to diversify your investments and are
comfortable with the 2008 Grain Co-Production Project from an investment, risk, return and
taxation standpoint.


#{if an assertive investor}

You are an assertive investor, earning sufficient income to invest most funds for capital
growth. You are prepared to accept higher volatility and your primary concern is to accumulate
assets over the medium to long term. You require a balanced portfolio, although more
aggressive or speculative investments may be included where they offer the prospect of good
returns and diversification.


#{If an aggressive investor}

You are an aggressive investor, prepared to compromise portfolio balance to pursue
potentially greater medium-term returns. Your investment choices are diverse, but carry with
them a higher level of risk. Security of capital is secondary to the potential of wealth creation.

When you undertake any investment you incur risk to a certain degree. The level of risk you take will
depend on the amount of money you are able to invest, your circumstances at the time and your
needs for the future. The higher the potential rewards then normally the higher is the expected risk
level.

Normally if you make an informed investment decision to take on a higher level of risk the higher the
potential return you are seeking may be. At the same time, the potential loss may also be higher.
This is known as the risk / reward trade-off.

Statement of Advice for <Client Name>
Prepared by <Adviser Name>
Authorised Representative of                                                            12 of 17
<Licensee Name>
This Statement of Advice has been formulated based on our assessment of your tolerance to risk. For
most investors, risk can be defined as the potential to suffer a loss of capital during the term of an
investment. A more extended measure of risk may be the possibility that an investment portfolio will
not achieve the required return over the investment time horizon.

In summary, risk is the chance that you will not achieve your financial goals.

If you feel this profile does not suit you, then we should have further discussions before you implement
your investment plan.



6.       RECOMMENDATION
We recommend that you purchase <insert number of Co-Production Units> Co-Production Units in
the 2008 Grain Co-Production Project.

Your initial cost payable on application is $<2008 Initial Period Costs of $4,400 x number of Co-
Production Units> (including GST) for the 2008 Initial Period Costs.

*If applicable
Of this initial cost, we recommend you borrow $<Loan Amount> from <insert financier> and
repayable by (10 months interest only) followed by (31 months principal and interest).

Or

Of this initial cost, we recommend you borrow $[Loan Amount] from <insert source of alternative
funding (e.g. other provider or home equity line of credit)>

Per Sections 5 of the PDS you will have an on-going obligation for the costs associated with the 2008
Project including the planting of the 2009 & 2010 crops. Whilst it is expected that the on-going costs
will be met by the sale of grain in each seasons Project Pool, there is a possibility that any shortfall
from time to time will be required to be met by you.




7        ALTERNATIVE STRATEGIES
#{Please amend as necessary}
The following alternative strategies were also considered to assist you in meeting your goals and
objectives but were discarded, as the recommended strategies above are more appropriate to your
situation:

        Gearing into equity based investments to fund share market based wealth creation is not
         appropriate due to need / desire to diversify away from equity-based investments.

        Tax deductible superannuation contributions have already been maximised.

        Term Deposit investment to provide an income-stream is not appropriate due to desire for
         returns in excess of that provided by fixed interest investments and the desire for investment
         in Growth rather than Income.

        Income investments are not appropriate as you are seeking to minimise taxable income as
         part of your overall investment and wealth creation strategy.




Statement of Advice for <Client Name>
Prepared by <Adviser Name>
Authorised Representative of                                                           13 of 17
<Licensee Name>
8.      HOW TO IMPLEMENT OUR RECOMMENDATIONS
To proceed with this investment please carefully read the 2008 Grain Co-Production Project PDS
and complete the Application Form enclosed within it. If you choose to apply for finance from the
preferred financier, please complete and sign the relevant finance application form and provide the
necessary supporting information as requested therein. We will then lodge the completed application
form, subscription/finance deposit moneys and finance documents (if applicable) on your behalf with
Macro Funds Ltd.

Macro will write to you promptly and acknowledge your Application.

You will also need to sign the attached Authority to Proceed.

A cheque for the implementation of the recommended products should be made payable to:

               GCPP Project                                      $<Investment
                                                                 Amount>

Alternatively, you may pay by direct deposit, details provided on the Application Form in the 2008
Grain Co-Production Project PDS.

Note: We will organise the specific application forms that will need to be completed and signed by you
at our next meeting. We will assist you with the completion of all documentation.



9.      KEY ASSUMPTIONS USED IN THE ATTACHED CASH FLOW PROJECTIONS
                                     Key Assumptions Used in
                                       Attached Projections

               Cost Inflation                  3.75%
               Estimated      FOB Price        Average of $241 per tonne each
               (Project Pool)                  season (exclusive of GST)
               Project Yield per Co-           40 tonnes for wheat and 45 tonnes
               Production Unit                 for barley.

The above assumptions are estimates only.

Whilst these rates are based upon the 2008 Cash-flow Calculator they are intended as a guide only.
As such, no guarantee of investment performance can be given or is implied.



10.     DISCLAIMER
The information in this Statement of Advice is only current for a period of 30 days. After expiration of
this time, prior to implementation, you must check with this office to ensure that the advice is still
appropriate given any changes in economic circumstances and your own personal situation.

This Statement of Advice has been prepared based on the assumptions stated previously and on
information you have provided. As future corporate, legislative and economic factors cannot be
predicted on a long term basis, this Statement of Advice should be regarded as a guide only and no
guarantee is expressed or implied in relation to any income, growth or asset projections that are
shown in this Statement of Advice.



Statement of Advice for <Client Name>
Prepared by <Adviser Name>
Authorised Representative of                                                           14 of 17
<Licensee Name>
If you select products other than those we have researched and recommended, we may be unable to
provide appropriate information on those products. All products recommended in this Statement of
Advice have been selected following research prepared by or for <Name of Licensee>, however this
may not apply to products selected at your direction.

Before deciding whether to invest, you should assess whether the advice is appropriate to your
particular investment objectives, financial situation and particular needs.

Limited Advice {Delete if not limited advise}

Since this advice is only of a limited nature, we recommend that you allow us to undertake a complete
analysis of your investment objectives, financial situation and particular needs.

Whilst <Name of Licensee> has adopted due care, diligence and competence, the advice may not
have been prepared taking into account your particular investment objectives, financial situation and
particular needs.

If this advice has been provided in conjunction with a detailed financial plan then this Statement of
Advice forms part of, and should be read together with, the financial plan.


ATO PRODUCT RULING

ATO Product Rulings refer only to the application of taxation laws and are in no way expressly or
impliedly a guarantee or endorsement of the commercial viability of a project, of the soundness or
otherwise of a project as an investment, or of the reasonableness or commerciality of any fees
charged in connection with a project. A Product Ruling is only binding on the Commissioner if the
relevant project is implemented in the specific manner provided in the Product Ruling.


FINANCIAL RETURNS

Calculations of financial returns involve a large number of variables, some of which are outside
Macro‟s control, and/or may not occur as expected. Therefore, the financial returns over the life of the
2008 Project cannot be determined with certainty. The projected returns in the 2008 Cash–flow
Calculator attached to this Statement of Advice are only indicative of the potential returns that
investors may achieve from their investment in the 2008 Project.

Macro has not provided prospective financial information in the PDS for the 2008 Project. For more
information relating to the factors affecting the 2008 Project returns, please refer to the 2008 Grain Co-
Production Project PDS.

Attached to this Statement of Advice is an estimate of the potential cash-flows and returns from your
investment in the 2008 Project. Please note that <Name of Licensee> does not have direct expertise
in the calculation and forecast of agribusiness research.

Hence, we have used the estimates of Adviser Edge, an independent expert, to depict the potential
return of the 2008 Project. It should be noted that actual returns over the life of the 2008 Project might
vary.

If you would like additional information regarding the Adviser Edge research and estimates used,
please feel free to contact our office regarding the matter.




Statement of Advice for <Client Name>
Prepared by <Adviser Name>
Authorised Representative of                                                            15 of 17
<Licensee Name>
11.     FEE DISCLOSURE
As required under the Corporations Act it is disclosed that the Licensee will receive initial brokerage
on behalf of its Authorised Representative as a result of implementing any recommendations in this
Statement of Advice in relation to the financial products recommended in this material, up to the rates
shown below by direct payment.


Initial Brokerage

                                        Investment                 Commission
                    Project
                                        (excl. GST)                 (excl. GST)
                                                                 %              $
                                                             Minimum 4
              2008 Grain Co-            $<Investment
                                                            to maximum      <$ Value>
              Production Project          Amount>
                                                                 5


The Initial Brokerage is paid to <Name of Licensee> by Macro Funds Limited from its own funds and
are NOT a separate cost over and above the investment amount. Of this I receive <Adviser % of
Licensee Commission>%, which is equal to $<$value>.

There are no charges incurred (other than those stated in the above tables), to the extent that we
know or can reasonably find out, in respect to our recommended disposal, or reduction, or acquisition,
or increase, and any pecuniary or other benefits that you will or may lose as a result of taking our
recommended action.

Please note that there are no further fees payable to #{Name of licensee} from Macro Funds Limited
either in the form of trailing fees, or upon the Initial Period Fees paid each season.




Statement of Advice for <Client Name>
Prepared by <Adviser Name>
Authorised Representative of                                                          16 of 17
<Licensee Name>
AUTHORITY TO PROCEED
I/We <Client Name>

1. Have read, understood and retained a copy of the Statement of Advice (SoA) prepared by the
    Authorised Representative of <Licensee Name> listed in this report dated <Date>;
2. Acknowledge that appropriate advice may not be able to be given without providing complete
    information to the adviser and that by not providing accurate or complete information or choosing
    to invest in, or purchase, a product other than that recommended, there is a possibility that any
    assumptions made, or recommendation given to me/us, may not be fully appropriate to my/our
    individual needs, financial situation or objectives, especially those which the adviser does not
    know;
3. Understand that <Adviser Name> is an Authorised Representative of <Licensee Name> (ABN
    <Licensee ABN>) Australian Financial Services Licence Number <AFSL No.>;
4. Acknowledge that <Licensee Name> recommends a full review of all aspects of my financial
    matters, current and in the future;
5. Understand that <Licensee Name> and its Authorised Representative are providing advice at a
    limited scope only on the 2008 Grain Co-Production Project;
6. Have decided the advice is appropriate to my/our individual investment objectives, financial
    situation and particular needs and wish to invest on the basis of the limited scope of advice given
    by the adviser;
7. Are aware and accept that assumptions have been made in preparing this SoA and understand
    the basic investment strategy in the SoA. I/we understand that projections are only estimates and
    are not guaranteed.
8. Understand that the contents of this SoA are for my/our sole use and that a copy of the Fact Find,
    which the recommendations have been based, is available on request.
9. Have read and understood the Disclosure and Disclaimer sections of the Statement of Advice
    prepared by <Adviser Name>, which details all fees and commissions, and noted all
    recommendations are based upon current interpretations and regulations.
10. Hereby authorise <Licensee Name> to pass on any additional government fees, charges and
    taxes that may be implemented in the future through new legislation and regulations.
11. Understand that I/we must notify <Adviser Name> in writing as soon as possible if I/we wish to
    terminate the implementation of the SoA. Upon termination, I/we understand that I/we may be
    liable for any outstanding fee relating to the preparation of these recommendations. In the event
    of terminating ongoing services, I/we understand that <Licensee Name> will be relieved of any
    responsibility for the monitoring and review of the investment from the date of receipt of the
    written notification.
12. Acknowledge that a Financial Services Guide, together with any relevant Product Disclosure
    Statements, have been provided to me/us by the adviser.
13. Have received and retained a copy of <Licensee Name> Privacy Policy and consent to my/our
    information being collected, disclosed, used and verified in accordance with the policy.
14. Agree to refer to this SoA where there are no changes recommended in future reviews.
15. Hereby authorise the Authorised Representatives listed in this SoA of <Licensee Name> to
    proceed with the implementation of the Statement of Advice and the investment
    recommendations as follows:

              2008 Grain Co-Production Project                  $<Investment
                                                                Amount>




………………………… …/…/……                       ………………………… …/…/……
Client Signature Date                   Client Signature Date


Accepted for and on behalf of           ………………………… …/…/…
<Licensee Name>                         Signature  Date

Statement of Advice for <Client Name>
Prepared by <Adviser Name>
Authorised Representative of                                                         17 of 17
<Licensee Name>

								
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