KIRI PARK PROJECT ARSN INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

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KIRI PARK PROJECT ARSN 091 158 897 INTERIM

1 KIRI PARK PROJECT ARSN INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

2 Corporate information Registered Office Level 1, AustAsia House Newscastle Street West Perth WA 6005 PO Box 332 Leederville WA 6903 Telephone: (08) Facsimile: (08) Web: Directors Sydney Chesson (Chairman) Victor Turco (Director) Geoffrey Coad (Director) Grower Information Grower Enquiries Growers with queries about their investment, should contact the Responsible Entity: Environmental Forest Farms Management Limited P.O Box 332 Leederville WA 6903 Telephone: Facsimile: kpadmin@kiripark.com.au Change of Address Should a Grower s registered address change, they should notify the Responsible Entity in writing immediately. Company Secretary Simon Chesson Members of the Consolidated Group EFF Limited ACN Environmental Forest Farms Management Limited ACN EFF Timber Pty Ltd ACN Powton Land Holdings Limited ACN A&N Enterprises Pty Ltd ACN Forestry Finance Limited ACN Beenyup Forest Farms Pty Ltd ACN Auditor RSM Bird Cameron Partners 8 St George s Terrace Perth WA 6000

3 Contents Corporate Information...2 Director s Report...4 Auditor s Statement of Independence...5 Income Statement...6 Balance Sheet...7 Statement of Changes in Equity...8 Cashflow Statement...9 Notes to the Financial Statements...10 Directors Declaration...13 Auditor s Report...14

4 Directors Report This half-year report should be read in conjunction with the annual report to 30 June 2007, which has been lodged with the Australian Securities and Investment Commission. This half-year report does not include full disclosures of the type normally included in an annual financial report. The Directors of the Responsible Entity, Environmental Forest Farms Management Limited, present their report for the half-year ended 31 December Directors The names of the Directors of the Responsible Entity who have held Office, at any time during or since the end of the half year are: Mr Sydney J. Chesson Mr Victor V. Turco Mr Geoffrey J. Coad Review of Operations As at 30 June 2007, the Kiri Park Project consisted of 739 Woodlots which have been issued and allotted to 317 Growers. During the period, the Responsible Entity and its parent company (E.F.F Limited) continued to devote considerable funds to the Kiri Park Project and the Kiri Park property. The key activities undertaken during the period include: Forestry Operations The Irrigation Program The Irrigation Program was effectively operated to provide sufficient water and enhance water security to the plantation. Major additional pipe installation which has improved the water flow and carrying capacity of the irrigation network was installed during the half year period. New irrigation infrastructure was installed during the half year period to extend the irrigation network for all seedlings planted under the Kiri Park Projects: 2007 Growers. The Weed Management Program ( WMP ) The WMP resulted in weeds being kept to manageable and acceptable heights. The WMP was implemented in accordance with the Company s plantation management policies and practices to ensure that the weeds do not compete with the trees for water and nutrients. with the Company s plantation management policies and practices. The PMP included the application of bacterial tree trunk treatments used to combat fungal infections. Leaf and trunk analysis was conducted on a continual basis to monitor and detect any signs of fungal infections, pests and other diseases. Leaf Nutrient Analysis Leaf nutrient analysis was conducted in November The results are very good and improved upon previous years excellent results. Fertiliser continues to be applied in accordance with the results from nutrient analysis. Other Forestry Activities The other forestry activities implemented on the plantation include: - The removal of lateral branches from the trees. This allows the trees to focus their resources and energy toward the growth of the tree s trunk and height. - The crowns of selected maturing trees were pruned and managed to assist in adding volume and thickness to the trunk of the maturing trees. Non-Forestry Operations There were no significant Non-Forestry Operations during the half year period 1 July 2007 to 31 December Auditors Independence Declaration In accordance with section 307C of the Corporations Act 2001, the Directors of the Responsible Entity have obtained a declaration of independence from RSM Bird Cameron Partners, the Scheme s auditors. Directors Authorisation This Report is made in accordance with a resolution of the Board of Directors of the Responsible Entity and is signed by authority for and on behalf of the Directors by: Sydney Chesson Chairman Dated this the 14th day of March 2008 The Pest Management Program ( PMP ) The PMP has resulted in the insect population being controlled to its lowest numbers in the past four years at Kiri Park. The PMP was implemented in accordance 4

6 Kiri Park Project ARSN Income Statement for the half year ended 31 December 2007 The Company 31 December 31 December $ $ Revenue from operating activites Interest - - Less: Bank Charges - - Profit from operating activities - - Distributed to Growers - - Total Changes in Scheme Property - - The accompanying notes form part of these financial statements. 6

7 Kiri Park Project ARSN Balance Sheet as at 31 December 2007 Economic Entity 31 December 31 December $ $ Current Assets Cash and cash equivalents - - Trade and other receivables - - Total Current Assets - - Total Assets - - Current Liabilities Trade creditors and other payables - - Total Current Liabilities - - Total Liabilities - - Net Value of Scheme Property - - The accompanying notes form part of these financial statements 7

8 Kiri Park Project ARSN Statement of Changes in Equity for the half year ended 31 December 2007 Ordinary Share Retained Asset Revaluation Minority Total Capital Earnings Reserve Interests $ $ $ $ At 1 July Profit attributable to members of parent entity Profit attributable to minority shareholders Subtotal Dividends paid or provided for At 31 December Balance at 1 July 2007 Shares issued during the year Profit attributable to members of parent entity Revaluation increase (decrease) increments Sub-total Dividends paid or provided for Balance At 31 December The accompanying notes form part of these financial statements. 8

9 Kiri Park Project ACN Cash Flow Statement for the half year ended 31 December 2007 Economic Entity 31 December 31 December $ $ Cash flows from operating activities Funds received from manager - - Net cash flows provided by operating activities - - Net Increase/(Decrease) in Cash Held - - Cash at the Beginning of Year - - Cash at the End of Year - - The accompanying notes form part of these financial statements. 9

10 Kiri Park Project ACN Notes to the financial statements For the half year ended 31 December THE SCHEME The Kiri Park Project ( the Scheme ) was established pursuant to the terms of a Constitution made on 10 January 2000 and registered with the ASIC on 8 February Subject to the provisions of the constitution for early termination of the Scheme, the Scheme will terminate upon the earlier of final distribution of receipts to Growers following the sale of timber or the termination of sub-lease between the Growers and the landowner. The term of the sub-lease is until 30 June Environmental Forest Farms Management Ltd (ACN ) is the Responsible Entity of the Scheme and also the sub-lessor of the Woodlots under the Scheme. The terms and conditions of the project operations agreement govern the relationship between the Responsible Entity and the Growers in relation to forestry activities. The terms and conditions of the sublease govern the relationship between the Responsible Entity, the sub-lessor and the Growers. On payment of the appropriate fees and charges by the Grower, the Responsible Entity will carry out or cause to be carried out such services and duties in relation to the Woodlots as set out in the management plan and which are usual or necessary for carrying on the business of tree farming. The sub-lease provides that, on payment of the rent by the Grower, the sub-lessor allows the Grower to use the Woodlots for carrying on the business of tree farming. The Scheme will conclude upon harvest of the trees and sale of timber. Under the terms of the project operations agreement, the Responsible Entity is also entitled to a harvest and marketing fee equivalent to five percent of the net sale proceeds from the timber sales (which will be passed on to the Manager under the provisions of the management agreement). 2. STATEMENT OF COMPLIANCE The half year financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporation Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting. It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2007 and a public announcement made by the Responsible Entity during the half year in accordance with continuous disclosure requirements arising under the Corporations Act This half year report does not include disclosures of the type normally included in an annual financial report. 3. STATEMENT OF ACCOUNTING POLICIES (a) Income Tax The change for current income tax expenses is based on the profit for the year adjusted for any nonassessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognized from the initial recognition of an asset or a liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realized or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised by the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilized. The amount of benefits brought to account or which may be realized in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Responsible Entity will derive sufficient future assessable income to enable the benefit to be realized and comply with the conditions of deductibility imposed by the law. (b) Inventories Inventories are measured at the lower cost of net realizable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs. As at 31 December 2007, there are no inventories to be considered. (c) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three 10

11 Kiri Park Project ARSN Notes to Financial Statements as at 31 December 2007 months or less and bank overdrafts. Bank overdrafts are shown within short borrowings in current liabilities on the balance sheet. (d) Payables The management agreement states that the manager is not to be remunerated until the fees are received by the Scheme. As a result, a corresponding payable is not recognised in note 6 to the financial statements. (e) Goods and Services Tax (GST) Revenues, expenses and assets are recognized net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognized as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables and payables in the balance sheet are shown inclusive of GST. Cashflows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. (f) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. 4. RESPONSIBLE ENTITY The Responsible Entity of the Scheme is Environmental Forest Farms Management Limited, and represents the interest of Grower in the Scheme. 5. CUSTODIAN The Australian Financial Services License of Environmental Forest Farms Management Limited (AFSL Number: ) does not require the Responsible Entity to have an external custodian for the Project. The Constitution of the Responsible Entity details how the Responsible Entity must deal with Scheme Property. 6. TRADE AND OTHER RECEIVABLES This Financial Report records the assets, liabilities, revenues and expense of the Scheme. No application monies for the Scheme were received during the period. Rent and management fees were received during the period. As rent and management fees are immediately payable to the lessor or to the Responsible Entity, this money does not at any stage become property of the Scheme. Any management fees received by the Responsible Entity are immediately payable to the Manager (less money owing by the Manager to the Responsible Entity. Accordingly, this money is not recorded in the Scheme s Financial Report). Management fees due to the Responsible Entity not recorded in the Scheme s financial statements are set out below. The liability to the Manager is not shown because the management fees are not payable to the Manager to the extent to which they have not been received by the Responsible Entity: 31 December 30 June $ $ Current Assets Receivables 137, ,501 Total Current Assets 137, ,501 Total Assets 137, ,501 Current Liabilities Payables - - Amount payable to Manager - - Total Current Liabilities - - Total Liabilities - - Net Assets Held on Trust 137, ,501 7, EVENTS SUBSEQUENT TO BALANCE DATE Since 31 December 2007, there have been no significant after balance date events. 8. SEGMENT INFORMATION AND INDUSTRY INVESTMENT EXPOSURES The Scheme operates in one business segment, being investment management. The Scheme also operates from one geographic location being Australia, from where its investing activities are managed. Revenue is derived from distributions and interest. The Scheme has investment exposures currently only in the Western Australian geographical market and all assets service the forestry industry. 11

12 Kiri Park Project ARSN Notes to Financial Statements as at 31 December RELATED PARTY TRANSACTIONS All transactions with related parties are conducted on commercial terms and conditions. 10. CONTINGENT LIABILITIES There has been no change in liabilities since the last annual reporting date. 11. REGISTERED SCHEME DETAILS The registered office and principal place of business of the Scheme is at the office of the Responsible Entity: Environmental Forest Farms Management Limited Level 1, AustAsia House, Newcastle Street West Perth WA 6005 Australia 12

13 Directors Declaration In the opinion of the Directors of Environmental Forests Farms Management Limited, Responsible Entity of the Kiri Park Project: 1. the financial statements and notes set out on pages 7 to 12, are in accordance with the Corporations Act 2001, including: (a) (b) giving a true and fair view of the financial position of the Scheme as at 31 December 2007 and of its performance for the half-year ended on that date. complying with Australian Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and 2. there are reasonable grounds to believe that the Scheme will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of the Directors of Environmental Forest Farms Management Limited: Sydney Chesson Director Dated at Perth (City) this 14th day of March

Environmental Forest Farms Management Limited Level 1 AustAsia House, 412-414 Newcastle Street, West Perth WA 6005 PO Box 332

16 Environmental Forest Farms Management Limited Level 1 AustAsia House, Newcastle Street, West Perth WA 6005 PO Box 332 Leederville WA 6903 Phone (08) Fax (08) kpadmin@kiripark.com.au ACN

KIRI PARK PROJECT NO. 2 ARSN FINANCIAL REPORT 2008

KIRI PARK PROJECT NO. 2 ARSN FINANCIAL REPORT 2008 KIRI PARK PROJECT NO. 2 ARSN 096 225 400 FINANCIAL REPORT 2008 Corporate information Registered Office Level 1, AustAsia House 412-414 Newcastle Street West Perth WA 6005 PO Box 332 Leederville WA 6903