7 August 2007

Dear Shareholder,

MERGER WITH AUSTRALIAN AGRICULTURAL INVESTMENTS LIMITED (“AAI”)

I would like to thank you for your patience during the period in July when RLA shares were voluntarily suspended. The directors needed this time to make sure the transaction being proposed was going to be valuable to RLA shareholders.

Attached is the Notice of Meeting for a general meeting to be held on Monday, 10 September 2007 in relation to the proposed merger with AAI.

Details of the proposed merger are outlined in an announcement made to ASX on 31 July 2007. Further details are also set out in the attached Notice of Meeting and its accompanying independent expert’s report prepared by BDO Consultants (WA) Pty Ltd. This report has concluded that the transaction is fair and reasonable to RLA shareholders.

AAI has established and manages one of Australia’s largest olive groves and is generally considered to be one of the most innovative and productive olive grove management companies in Australia. The business has achieved, over recent years, a sound earnings record and would contribute profits and cashflow to Redisland. It would also provide a strategic linking of production with marketing in the growing Australian olive industry.

For these reasons and various other factors covered comprehensively in the attached Notice of Meeting and independent expert’s report, the Directors unanimously recommend that shareholders approve the proposed acquisition.

On behalf of the Directors, I thank you for your continuing support as RLA enters a new phase of growth.

Yours sincerely

Andrew Konowalous Managing Director

Level 3 Mercury House, 33 Richardson Street, West Perth, Western Australia, 6005 Tel +61 (08) 9481 4911 Fax +61 (08) 9 226 0866

A B N 1 9 1 0 4 5 5 5 4 5 5

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N O T I C E O F G E N E R A L M E E T I N G E X P L A N A T O R Y M E M O R A N D U M

P R O X Y F O R M

Date of Meeting

Monday, 10 September 2007

Time of Meeting

1.00 pm (WST)

Place of Meeting

The Celtic Club 48 Ord Street West Perth, Western Australia

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N O T I C E O F G E N E R A L M E E T I N G

Notice is given that a General Meeting of shareholders of Redisland Australia Limited (Redisland or Company) will be held at The Celtic Club, 48 Ord Street, West Perth, Western Australia at 1.00pm (WST) on Monday, 10 September 2007.

AGENDA

The Explanatory Statement and the Annexure that accompanies and forms part of this Notice describes the matters to be considered at this meeting.

SPECIAL BUSINESS

Resolution 1 - Issue of Shares to The AAI Shareholders

To consider and, if thought fit to pass, with or without amendment, the following resolution as an ordinary resolution :

“That for the purposes of Item 7 Section 611 of the Corporations Act, Listing Rules 7.1 and 11.1.2 of the Listing Rules of ASX and for all other purposes, shareholders approve the issue to The AAI Shareholders of 70,685,120 Shares in the capital of the Company on the terms and conditions set out in the Explanatory Statement accompanying this Notice”.

Short Explanation : Under Chapter 6 of the Corporations Act a person must not acquire a relevant interest in issued voting shares of 20% or more of the total issued voting shares of a public company without obtaining prior shareholder approval. ASX Listing Rule 7.1 requires a company to seek shareholder approval prior to issuing securities in excess of 15% of the company’s issued capital. Under ASX Listing Rule 7.1, a company may seek shareholder approval prior to an issue of securities to allow it the flexibility to make future issues of securities up to the threshold of 15% of its total equity securities in any 12 month period. ASX Listing Rule 11.1.2 requires a company to seek shareholder approval for a significant change in the scale of activity of the company. Please refer to the Explanatory Statement for further details. The AAI Shareholders is defined in Annexure A accompanying this Notice.

Voting Exclusions : The Company will disregard any votes cast on this resolution by The AAI Shareholders and any of their associates.

Resolution 2 - Election of Mr Paul Challis as a Director

To consider and, if thought fit to pass, with or without amendment, the following resolution as an ordinary resolution:

“Subject to the passing of Resolution 1 and completion of the agreement dated 30 July 2007 between the Company and The AAI Shareholders, that in accordance with Article 13.3 of the Company’s Constitution and for all other purposes, Mr Paul Challis, having been recommended by the Directors of the Company and consented to act, be elected as a Director of the Company.”

Short Explanation : Under Article 13.3 of the Company’s Constitution a person recommended by the Directors of the Company for election is eligible for election to the office of Director at any General Meeting.

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Resolution 3 - Election of Mr Phillip Grimsey as a Director

To consider and, if thought fit to pass, with or without amendment, the following resolution as an ordinary resolution:

“Subject to the passing of Resolution 1 and completion of the agreement dated 30 July 2007 between the Company and The AAI Shareholders, that in accordance with Article 13.3 of the Company’s Constitution and for all other purposes, Mr Phillip Grimsey, having been recommended by the Directors of the Company and consented to act, be elected as a Director of the Company.”

DATED THIS 7[th] DAY OF AUGUST 2007 BY ORDER OF THE BOARD

Kim Hogg Company Secretary

NOTES:

A shareholder of the Company who is entitled to attend and vote at a general meeting of shareholders is entitled to appoint not more than two proxies. Where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the shareholder’s voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half of the votes. A proxy need not be a shareholder of the Company.
Where a voting exclusion applies, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the proxy form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.
For the purposes of the Meeting, the Directors have set a snapshot date to determine the identity of those entitled to attend and vote at the Meeting. The snapshot date is 1.00pm (WST) on Saturday, 8 September 2007.

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E X P L A N A T O R Y S T A T E M E N T

This Explanatory Statement and all attachments are important documents that form part of this Notice of Meeting. They should be read carefully.

1. GENERAL INFORMATION

This Explanatory Statement has been prepared for the shareholders of Redisland Australia Limited (Redisland or Company) in connection with the General Meeting of the Company to be held on Monday, 10 September 2007 at 1.00pm (WST).

1.1 Background

On 31 July 2007, the Company announced that it had entered into an agreement to acquire 100% of the shares of AAI from The AAI Shareholders (See definitions in Annexure A). The agreement is subject to Redisland obtaining shareholder approval required by ASX Listing Rules and applicable provisions of the Corporations Act.

This strategic transaction represents Redisland’s first strategic move into vertical integration and paves the way for synergies across the value chain. The proposed acquisition will also contribute significant working capital from the operating cashflow of AAI.

The Independent Expert’s Report accompanying this Notice of Meeting contains a detailed examination of the proposed acquisition to assist shareholders to assess the merits of the acquisition and decide whether to approve the proposal. The Independent Expert has concluded that the proposed issue of Shares to the AAI Shareholders is fair and reasonable to the non associated shareholders in the Company (refer to section 2.1.5 of this Notice of Meeting for additional information).

The Independent Expert’s Report contains comprehensive information on AAI and the proposed transaction, including:

Section3	Outline oftheTransaction
Section3.1	CapitalStructure
Section 7	Profile oftheAAIGroup
Section8	The Olive Oil ManagedInvestment SchemeIndustry
Section 16.1	Advantages of accepting the Transaction
Section 16.2	Disadvantages ofacceptingtheTransaction

1.2 Consideration for the Acquisition

The consideration payable for the Acquisition is $10,602,768 to be satisfied by the issue of 70,685,120 fully paid ordinary shares in the Company at a deemed issue price of 15 cents per share. A voluntary escrow period of 12 months will apply to these shares.

1.3 Election of Directors

Following settlement of the transaction, two new directors, Mr Paul Challis and Mr Phillip Grimsey will be appointed to the Redisland board. Both of the new directors were instrumental in establishing and running AAI and they have extensive experience in growing businesses in developing industries. Their respective background is set out in Section 2.2 and 2.3 of this Explanatory Statement.

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2. THE RESOLUTIONS

2.1 Resolution 1 – Issue of Shares to The AAI Shareholders

Resolution 1 seeks shareholder approval to issue 70,685,120 Shares to The AAI Shareholders.

2.1.1 Section 611 of the Corporations Act

Pursuant to Section 606(1) of the Corporations Act, a person must not acquire a relevant interest in issued voting shares in a listed company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person’s or someone else’s voting power in the company increases:

(a) from 20% or below to more than 20%; or
(b) from a starting point above 20% and below 90%.

The voting power of a person in a body corporate is determined in accordance with Section 610 of the Corporations Act. The calculation of a person's voting power in a company involves determining the voting shares in the company in which the person and the person’s associates have a relevant interest.

The “associate” reference includes a reference to a person:

(a) who has the capacity to control a company;
(b) a person who has the ability to control or influence the composition of a company’s board or the conduct of a company’s affairs; and
(c) who is acting in concert in relation to a company’s affairs.

A person has a relevant interest in securities if they:

(a) are the holder of the securities;
(b) have the power to exercise, or control the exercise of, a right to vote attached to securities; or
(c) have power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

Item 7 of Section 611 of the Corporations Act

Item 7 of Section 611 of the Corporations Act provides an exception to the general prohibition, where by a person may acquire a relevant interest in a company’s voting shares with shareholder approval.

Resolution 1 seeks shareholder approval under Item 7 of Section 611 of the Corporations Act in order for the voting Power of The AAI Shareholders to increase to greater than 20%.

Information is required to be provided to shareholders under ASIC Policy Statement 74 and the Corporations Act. Shareholders are also referred to the Independent Expert’s Report which accompanies this Notice.

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Identity of persons who will hold a relevant interest in Shares to be issued.

The AAI Shareholders and each of its associates will hold a relevant interest in Shares on completion of the issue of Shares pursuant to the Agreements.

As at the date of this Notice, The AAI Shareholders are not entitled to any Shares. Immediately, after the issue of Shares, The AAI Shareholders will hold 70,685,120 Shares.

History of AAI

AAI is a Victorian-based business that has developed a large state-of-the-art olive growing operation in the Boort region. It commenced operations in 2001 and currently has 511 hectares of olive trees under management. AAI based its business model on being a low-cost, high-quality producer and has proven its ability to achieve this goal. The business was founded with two key principles in mind:

Australia’s capacity to be a low cost producer of high quality extra virgin olive oil. AAI brought together the availability of comparatively cheap land and water with the application of modern Australian broad acre horticultural practices to an industry which, in Europe, was bound by traditional and inefficient European production methods.
Demand for agricultural managed investment products that focused on positive cash flows to investors rather than immediate tax deductions.

AAI is more commonly known in the Australian olive industry through its operational subsidiaries Terrapee Contractors Pty Ltd and Victorian Olive Oil Project Limited.

AAI’s achievements to date include:

The creation of three groves, all with appropriate variety selection, grove design and water supply in which the trees have grown consistently across the entire grove;
All groves brought into commercial production within three years of planting with fruit and oil yields above industry norms;
The establishment of a $2M processing facility capable of being expanded to meet increased future production; and
The construction of a new mechanised olive harvester which uses new technology to significantly reduce harvesting costs and increase yields.

AAI has established three groves 14km west of Boort in Northern Victorian, a region which is now the largest olive growing area in Australia. These plantings are summarised as:

Year Planted	Area	Trees Planted
2002	285Ha	94,050
2003	118Ha	38,940
2006	108Ha	35,640
Totals	511Ha	168,630

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AAI has three primary revenue streams:

Establishment fees for the establishment of new groves;
Rental receipts for the lease of the underlying land to investors; and
Management fees for the management of groves.

AAI has established the capacity to carry out grove establishment and management around the country. It is anticipated that the merged entity would continue to establish new groves, increase its third party grove management business, continue involvement in the commercialisation of its new harvesting technology and supply significant volumes of bulk oil to the redisland brand and other bulk oil markets.

Voting power of The AAI Shareholders

The AAI Shareholders’s voting power in the Company immediately before the proposed issue of Shares is Nil.

The maximum extent of the increase in The AAI Shareholders’ voting power that would result from the issue of Shares is 43.31%.

The AAI Shareholders’ voting power in the Company as a result of the proposed acquisition will be 43.31%.

Voting power of The AAI Shareholders’ associates

The AAI Shareholders do not have any relevant associates in the context of Section 611 of the Corporations Act.

Relevant interests in Shares to be issued.

The AAI Shareholders will have relevant interests in the Shares to be issued.

The AAI Shareholders’ intentions

The AAI Shareholders gave the Company the following information to assist the Company meet its responsibilities under ASIC Policy Statement 74. The information is based on The AAI Shareholders’ current awareness of the financial and strategic position of the Company. The Company takes no responsibility for any omission from, or any error or false or misleading statement in this section.

If shareholders approve the issue of Shares:

(a) Business of Company

The AAI Shareholders does not presently intend to change the business of the Company.

(b) Injection of Capital

The AAI Shareholders does not presently intend to inject further capital into the Company. However, if the Company wishes to raise further capital in the future, The AAI Shareholders would, subject to the terms of the capital raising, consider supporting the Company’s future capital raising initiative.

The AAI Shareholders do not presently intend to change the Company’s current employment arrangements.

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(d) Transfer of Property

The AAI Shareholders are not presently party to any proposal whereby property will be transferred between The AAI Shareholders and the Company or any of their associates.

(e) Redeploy Fixed Assets

The AAI Shareholders do not presently intend to redeploy any of the Company’s fixed assets.

(f)

Financial and Dividend Polices

The AAI Shareholders do not presently intend the change of the Company’s policies in relation to financial matters or dividends.

(g) Directors

The AAI Shareholders intend to put forward the following person to be appointed as a director of the Company:

Name	Qualifications	Association with The AAI Shareholders and associates of The AAI Shareholders.
Mr Paul Challis	Mr Challis’s qualifications are discussed in Section 2.2 of the Explanatory Statement.	Mr Challis is a shareholder and director of Patrac Holdings Pty Ltd, a company which is a shareholder in AAI.
Mr Phillip Grimsey	Mr Grimsey’s qualifications are discussed in Section 2.3 of the Explanatory Statement.	Mr Grimsey is a shareholder and director of Grimfam Holdings Pty Ltd, a company which is a shareholder in AAI.

2.1.2 Listing Rule 7.1 of ASX Listing Rules

ASX Listing Rule 7.1 provides that a company must not, subject to certain exceptions, during any 12 month period issue any equity or other securities with rights of conversion to equity if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

One circumstance where an issue is not taken into account in the calculation of the 15% threshold is where the issue has the prior approval of shareholders in general meeting.

The proposed issue of 70,685,120 Shares is placed before shareholders to allow this number of Shares to be excluded from the calculation set out in ASX Listing Rule 7.1.

The following information is provided in relation to the proposed issue of Shares in accordance with ASX Listing Rule 7.3:

a) the maximum number of Securities to be issued to The AAI Shareholders under the Agreements is 70,685,120 Shares;
b) the Company will issue the Shares the subject of the Agreements within 3 months of the date of the Meeting (or such other date as extended by ASX) and it is anticipated that all of the Shares will be issued on one date;

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c) all Shares issued to The AAI Shareholders will be issued on the same terms as, and will rank equally with the Company’s existing listed Shares; and
d) the Shares will be issued in consideration for the acquisition of AAI at a deemed issue price of $0.15 per Share.

2.1.3 Listing Rule 11.1.2 of ASX Listing Rules

ASX Listing Rule 11.1.2 requires that the Company get shareholder approval of a transaction that would result in a significant change to the scale of its activities. The notice of meeting in relation to that shareholder approval must comply with any requirements of ASX. The notice of meeting must also include a voting exclusion statement.

2.1.4 Directors’ Recommendations

The Directors unanimously recommend that shareholders approve the resolutions for the following reasons:

(a) AAI comprises a business which has achieved a sound earnings record (refer the Independent Expert’s Report for further details).
(ii) The Acquisition is expected to result in a substantial increase in revenue of the Company which in turn is expected to generate significant operating profits and cashflow for the Company.
(iii) The Acquisition is strategically sound and is consistent with the Company’s overall strategy to participate in consolidation opportunities in the olive oil industry in Australia.
(iv) Messrs Challis and Grimsey and the senior operational staff of AAI will contribute considerable expertise, experience and skills to the management team of the Company.
(b) the Independent Expert has concluded that the issue of Shares to The AAI Shareholders is fair and reasonable to the non-associated shareholders in the Company.

Shareholders should read this Explanatory Statement in full, including the Independent Expert’s Report referred to below to form an opinion on the merits of the proposal.

2.1.5 Independent Expert’s Report

The Independent Expert’s Report sets out a detailed examination of the proposed transaction to enable shareholders to assess the merits and decide whether to approve the proposal.

The Company commissioned the Independent Expert to prepare the Independent Expert’s Report for the purposes of Item 7 of Section 611 of the Corporations Act. The Independent Expert’s Report contains information required to be provided to shareholders under ASIC Policy Statements 74 and 75, and the Corporations Act.

To the extent that it is appropriate, the Independent Expert’s Report sets out further information with respect to the proposed transaction and concludes that the issue of Shares to The AAI Shareholders is fair and reasonable to the non-associated shareholders of the Company.

Shareholders are urged to carefully read the Independent Expert’s Report to understand the scope of the report, the methodology of the valuation and the sources of information and assumptions made.

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2.2 Resolution 2 – Election of Mr Paul Challis as a Director

Upon successful completion of the Agreement, The AAI Shareholders wish to appoint Mr Paul Challis to the Company’s board of directors. The Company may appoint a person as a director by an ordinary resolution passed in a general meeting.

Mr Challis is an accountant with 20 years’ experience in the finance, health and agricultural industries. He has overseen a technical team which has gained the reputation of being one of the most innovative and productive groups in the industry including the development of a new olive tree harvester which will lead to reduced production costs. More recently Mr Challis became a director of the Australian olive industry’s peak body – the Australian Olive Association and has been instrumental in driving its renewed strategy for growth. In addition to his key role as Finance Director, Mr Challis will continue to oversee grove operations as new projects develop.

Subject to successful completion of the Agreements, the Directors support the election of Mr Challis and believe it is in the best interests of shareholders that he be appointed as a director.

2.3 Resolution 3 – Election of Mr Phillip Grimsey as a Director

Upon successful completion of the Agreement, The AAI Shareholders wish to appoint Mr Phiillip Grimsey to the Company’s board of directors. The Company may appoint a person as a director by an ordinary resolution passed in a general meeting.

Mr Grimsey is the founding partner of Grimsey Pty Ltd, a CPA practice specialising in the provision of an integrated financial services package to its predominantly professional client base. He has been actively involved in the development, structuring and marketing of the financial services of the group and has been a key contributor to the growth of the AAI Group.

Subject to successful completion of the Agreements, the Directors support the election of Mr Grimsey and believe it is in the best interests of shareholders that he be appointed as a director.

3. ENQUIRIES

Shareholders are invited to telephone the Company on (08) 9481 4911 if they have any queries in respect of the matters set out in these documents.

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G L O S S A R Y

AAI means Australian Agricultural Investments Limited ACN 091 836 967.

Acquisition means the acquisition by the Company of 100% of the Shares in AAI as set out in the Agreements.

Agreement means the heads of agreement dated 30 July 2007 between the Company and The AAI Shareholders, pursuant to which the Company agrees to acquire 100% of the shares in AAI.

ASIC means the Australian Securities and Investments Commission.

ASX means the Australian Securities Exchange Limited.

ASX Listing Rules or Listing Rules means the Listing rules of ASX.

Board means the board of directors of the Company.

Company and Redisland Australia means Redisland Australia Limited ACN 104 555 455.

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement to the Notice.

Independent Expert means BDO Consultants (WA) Pty Ltd AFS Licence Number 246328.

Independent Expert’s Report means the independent expert’s report prepared by the Independent Expert which accompanies this Notice.

The AAI Shareholders means the entities specified in Annexure A.

Meeting means the meeting convened by the Notice.

Notice means the notice of meeting accompanying this Explanatory Statement.

Share means a fully paid ordinary share in the capital of the Company.

WST means Western Standard Time.

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A N E X U R E A

THE AAI SHAREHOLDERS

	No. of Shares
Grimfam Holdings Pty Ltd ACN006426 802as trusteefor The GrimseyFamilyTrust	33,263,585
Patrac Holdings Pty Ltd ACN006 972 729 as trusteefor The ChallisFamilyTrust	12,473,845
Madfam Holdings Pty Ltd ACN056 538 688 as trusteefor TheMadden FamilyTrust	12,473,845
Petto Holdings Pty Ltd ACN056 553434as trusteefor ThePettofrezzaFamilyTrust	12,473,845
	70,685,120

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P R O X Y F O R M

(Name of member/s)

(Address of member/s)

Appointment of Proxy

I/We being a member/s of Redisland Australia Limited and entitled to attend and vote hereby appoint

the Chairman of the Meeting (mark with an ‘X’)

If you are appointing someone other than the Chairman of the Meeting, write here the name of the company or person you are appointing

or, failing a company or person named, or if no company or person is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if not directions have been given, as the proxy sees fit) at the General Meeting of Redisland Australia Limited to be held at The Celtic Club, 48 Ord Street, West Perth, Western Australia on Monday, 10 September 2007 commencing at 1.00pm (WST) and at any adjournment of that meeting.

Voting directions to your proxy – please mark to indicate your directions

		FOR	AGAINST	ABSTAIN*
1.	Issue of Shares to The AAI Shareholders	�	�	�
2.	Election of Mr Paul Challis as a Director	�	�	�
3.	Election of Mr Phillip Grimsey as a Director	�	�	�

In addition to the intention advised above, the Chairman of the Meeting intends to vote undirected proxies in favour of each of the other items of business.

If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

Appointing a second Proxy

I/We wish to appoint a second proxy

Mark with an ‘X’ if you wish to State the percentage of your voting rights appoint a second proxy AND % OR or the number of securities for this Proxy Form.

PLEASE SIGN HERE

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

IndividualorSecurityholder 1		Securityholder3

Individual/ Sole Director and Sole Company Secretary Contact Name		Director/ Company Secretary
	Date

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HOW TO COMPLETE THE PROXY FORM

1. Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If the company or person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that company or person. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the company.

If you have appointed a company as your proxy and a representative of that company wishes to attend the meeting, the representative will be required to provide the Company with the appropriate written documentation evidencing that the person is a representative of the proxy. Should you require it, the Company will provide you with a corporate representative form free of charge. Please contact the Company Secretary if you require a corporate representative form.

2. Votes on Items of Business

You may direct your proxy how to vote by placing a mark in one of the three boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

3. Appointment of a Second Proxy

You are entitled to appoint up to two persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the Company's share registry or you may copy this form.

To appoint a second proxy you must:

(a) indicate that you wish to appoint a second proxy by marking the box.
(b) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.
(c) return both forms together in the same envelope.

4. Signing Instructions

You must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign.

Joint Holding: where the holding is in more than one name, all of the security holders should sign.

Power of Attorney: to sign under Power of Attorney, you must have already lodged this document with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001 ) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be produced prior to admission. A form of the certificate may be obtained from the Company's share registry.

Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at the address given below no later than 48 hours before the commencement of the meeting at 1.00pm (WST) on Monday, 10 September 2007. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Documents may be lodged by posting, delivery or facsimile to Redisland Australia Limited:-

PO Box 543 West Perth WA 6872 Fax: (61-8) 9226 0866

FINANCIAL SERVICES GUIDE

AND

INDEPENDENT EXPERT’S REPORT

Redisland Australia Limited 6 August 2007

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Level 8, 256 St George’s Terrace Perth WA 6000 PO Box 7426 Cloisters Square Perth WA 6850 Tel: (61-8) 9360 4200 Fax: (61-8) 9481 2524 AFS Licence Number 246328 Email: [email protected] www.bdo.com.au

BDO Consultants (WA) Pty Ltd

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Financial Services Guide

6 August 2007

BDO Consultants (WA) Pty Ltd ABN 92 008 864 435 (“ BDO Consultants ” or “ we ” or “ us ” or “ ours ” as appropriate) has been engaged by Redisland Limited (“Redisland” or “ the Company ”) to provide an independent expert’s report on whether or not the the proposal to acquire AAI Limited is fair and reasonable to the non-associated shareholders of Redisland. You will be provided with a copy of our report as a retail client because you are a shareholder of Redisland.

Financial Services Guide

In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide (“ FSG ”). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

This FSG includes information about:

♦ Who we are and how we can be contacted;
♦ The services we are authorised to provide under our Australian Financial Services Licence, Licence No. 246328;
♦ Remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;
♦ Any relevant associations or relationships we have; and
♦ Our internal and external complaints handling procedures and how you may access them.

Information about us

BDO Consultants (WA) Pty Ltd is a member firm of the BDO Kendalls network in Australia, a national association of separate partnerships and entities. The financial product advice in our report is provided by BDO Consultants (WA) Pty Ltd and not by BDO Kendalls or its related entities. BDO Kendalls and its related entities provide services primarily in the areas of audit, tax, consulting and financial advisory services.

We do not have any formal associations or relationships with any entities that are issuers of financial products. However, you should note that we and BDO Kendalls (and its related entities) might from time to time provide professional services to financial product issuers in the ordinary course of business.

Financial services we are licensed to provide

We hold an Australian Financial Services Licence that authorises us to provide general financial product advice to retail and wholesale clients in relation to proposed or actual mergers, acquisitions, takeovers, corporate restructures or share issues in relation to:

♦ derivates limited to old law securities options contracts and warrants;
♦ debentures, stocks or bonds issued or proposed to be issued by a government;
♦ interests in managed investments schemes (excluding investor directed portfolio services);
♦ securities; and
♦ superannuation.

When we provide the authorised financial services we are engaged to provide expert reports in connection with the financial product of another person. Our reports indicate who has engaged us and the nature of the report we have been engaged to provide. When we provide the authorised services we are not acting for you.

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We only provide general financial product advice, not personal financial product advice. Our report does not take into account your personal objectives, financial situation or needs.

You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice

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We charge fees for providing reports, including this report. These fees are negotiated and agreed with the person who engages us to provide the report. Fees are agreed on an hourly basis or as a fixed amount depending on the terms of the agreement. The fee for this engagement is approximately $30,000.

Except for the fees referred to above, neither BDO Consultants, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

Remuneration or other benefits received by our employees

All our employees receive a salary. Our employees are eligible for bonuses based on overall productivity but not directly in connection with any engagement for the provision of a report.

BDO CONSULTANTS (WA) PTY LIMITED

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Financial Services Guide

Page 2

We have received a fee from Redisland for our professional services in providing this report. That fee is not linked in any way with our opinion as expressed in this report.

Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

Complaints resolution

Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing addressed to The Complaints Officer, BDO Consultants (WA) Pty Ltd, PO Box 7426 Cloisters Square, Perth WA 6850.

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

Referral to External Dispute Resolution Scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Industry Complaints Service Limited (“ FICS ”). FICS is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial service industry. FICS will be able to advise you as to whether or not they can be of assistance in this matter. Our FICS Membership Number is F-3820.

Further details about FICS are available at the FICS website www.fics.asn.au or by contacting them directly via the details set out below.

Financial Industry Complaints Services Limited PO Box 579 Collins Street West Melbourne VIC 8007 Toll free: 1300 780 808 Facsimile: (03) 9621 2291 Email: [email protected]

Contact details

You may contact us using the details set out at the top of our letterhead on page 1 of this FSG.

REDISLAND AUSTRALIA LIMITED

INDEPENDENT EXPERT’S REPORT

1.	I NTRODUC TI ON .............................................................................. 1
2.	S UMM ARY AND OP I NI ON ................................................................... 1
3.	OUTLI NE OF THE TR ANS AC TI ON.......................................................... 3
4.	RE P ORT RE QUI REME NTS................................................................... 3
5.	B AS I S OF EV ALU ATI ON..................................................................... 4
6.	P ROFILE OF RE DIS L AND AUS TR ALI A LI M I TE D ......................................... 4
7.	P ROFILE OF AAI LI MI TED ................................................................ 10
8.	T HE OLI VE OI L M AN AGE D I NVE S TME NT S CHEME I NDUS TRY ..................... 18
9.	V ALU ATI ON ME THODOLOGI ES .......................................................... 21
10.	V ALU ATI ON OFRE DIS L AND P RI OR TO THE TR AN S ACTI ON ....................... 24
11.	V AL U ATI ON OF AAI ....................................................................... 30
12.	C AP I T ALI S ATI ONM ULTIP LE ............................................................ 32
13.	V AL U ATI ON OF AAI ....................................................................... 35
14.	I S THE TR ANS AC TI ON FAI R? ............................................................ 37
15.	OTHE R CONS I DE R ATI ONS................................................................ 37
16.	I S THE TR ANS AC TI ON RE AS ON ABLE? ................................................ 37
17.	P RO- FORM A UN AUDI TE D CONS OLI D ATE D B AL AN CE S HE E T OF RE DI S L AN D
	P OS T TR ANS AC TI ON ...................................................................... 41
18.	CONCLUS I ON ............................................................................... 42
19.	S OURCE S OF I NFORM ATI ON ............................................................. 42
20.	I NDE PE NDE NCE ............................................................................ 42
21.	QU ALI FI C ATI ONS .......................................................................... 42
22.	DI S CL AI M E RS AND CON S E NTS .......................................................... 43

BDO CONSULTANTS (WA) PTY LIMITED

BDO Consultants (WA) Pty Ltd

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6 August 2007

The Directors Redisland Australia Limited Level 3, 33 Richardson Street West Perth WA 6005

Dear Sirs

INDEPENDENT EXPERT'S REPORT – ACQUISITION OF AUSTRALIAN AGRICULTURAL INVESTMENTS LIMITED

1. I NTRODUC TI ON

BDO Consultants (WA) Pty Ltd (“ BDO ”) has been engaged by Redisland Australia Limited ( “Redisland” or “ the Company ”) to prepare an Independent Expert’s Report (“ our Report ”) to express an opinion as to whether or not the acquisition of Australian Agricultural Investments Limited (“AAI”) (“ the Transaction ”) is fair and reasonable to non-associated shareholders (“ Shareholders ”) of Redisland.

Our Report is to be included in the Notice of General Meeting for Redisland to be sent to all Shareholders to assist them in deciding whether to approve or reject the Transaction.

2. S UMM ARY AND OP I NI ON

2.1 Opinion

We have considered the terms of the Transaction as outlined in the body of this report and have concluded that the Transaction is fair and reasonable to Shareholders.

2.2 Fairness

In Section 10 we determined that the value of the consideration proposed to be paid to the vendors of AAI and in section 13 we determined the value of AAI. The value of AAI and the consideration payable by Redisland are summarised below.


Valuation	Ref	Low ($)	High ($)
Value of the Consideration payable by Redisland 10.5 8,835,639 10,857,235 Valuation of AAI 13.5 7,964,485 10,859,485

The above pricing indicates that the value of AAI is comparable to the consideration payable by Redisland. As such our opinion is the Transaction is fair to Shareholders.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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The above valuation ranges are graphically presented as follows;

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----- Start of picture text -----

Valuation Summary
Low & High Ranges
Value of AAI
Proposed Consideration
7.0 8.0 9.0 10.0 11.0 12.0
(million)
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2.3 Reasonableness

We have considered the analysis in Sections 16.1 and 16.2 of this report, in terms of both

♦ Advantages and disadvantages of the Transaction; and
♦ Alternatives, including the position of Shareholders if the Transaction does not proceed.

In our opinion, the position of Shareholders if the Transaction proceeds is more advantageous than the position if the Transaction does not proceed. Accordingly, we consider that the Transaction to be reasonable for Shareholders.

The respective advantages and disadvantages considered are summarised below:

	ADVANTAGES AND DISADVANTAGES	ADVANTAGES AND DISADVANTAGES	ADVANTAGES AND DISADVANTAGES

Section	Advantages	Section	Disadvantages

16.1.1	Acquisition of new businesses with positive cash flow and profits.	16.2.1	Dilution of the interests of existing shareholders
16.1.2	Increased Attractiveness of Redisland Shares	16.2.2	Adding another focus to Redisland’s existing focus on marketing and branding.
16.1.3	Increased Net Assets from the Transaction	16.2.3	Acquisition of a business with uncertain legislative taxation changes
16.1.4	The Company is able to acquire AAI with no outflow of cash
16.1.5	Utilisation of Redisland’s Tax losses
16.1.6	Introduction of Olive Oil Production Expertise
16.1.7	Relocation of Facilities to a more competitive position
16.1.8	Increased debt facilities
16.1.9	Vertical Integration
16.1.10	Secured Supply Stream

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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3. OUTLI NE OF THE TR ANS AC TI ON

Redisland signed a term sheet on 27 June 2007 for the proposed agreement to acquire AAI. Under the proposed agreement, Redisland will acquire 100 percent of the shares in AAI.

The purchase consideration comprises the issue of 70,685,120 ordinary shares in Redisland to the current owners of AAI ( “the Vendors” ).

The terms and conditions of the agreement state that Redisland requires 100 percent of ownership of Oilpack Australia Pty Ltd (“Oilpack”) and AAI will have the right to appoint two directors to the board of Redisland. Further details on AAI and Oilpack are set out in section 6.

If the Transaction is successful, Redisland will secure an additional $2,000,000 to $3,000,000 in finance facilities.

If either Redisland or the Vendors withdraw from the Transaction a break fee of $75,000 shall be payable to the other party.

As a result of the above events, Redisland shares were suspended from quotation on 28 June 2007. The Transaction was announced on the ASX on 31 July 2007 and Redisland’s shares were reinstated for quotation on the ASX on this date.

3.1 Capital Structure

If the Transaction is approved, Redisland will issue 70,685,120 ordinary shares to the Vendors. This is the only event that will take place that affects the capital structure of Redisland. The table below summarise the pre and post transaction share structures.

	Pre Transaction Share Structure	Pre Transaction Share Structure	Post Transaction Share Structure	Post Transaction Share Structure
Number of Shares	Number	%	Number	%
Vendors ~ ~ 70,685,120 43.3 Existing Non Associated Shareholders 92,516,668 100 92,516,668 56.7
Total 92,516,668 100 163,201,788 100

4. RE P ORT RE QUI REME NTS

4.1 The Vendors and their associates currently do not own any shares in Redisland. If the Transaction is approved the Vendors will hold 43.3% of the issued shares of Redisland. Section 606 of the Corporations Act (“ the Act ”) expressly prohibits the acquisition of shares by a person who holds (with associates) less than 20% of the issued shares of a listed entity if that acquisition will cause them to hold more than 20% unless a full takeover offer is made to all shareholders.
4.2 Section 611 permits an acquisition of shares in a listed entity by a person who will acquire more than 20% if the shareholders of that entity have agreed to the issue of such shares. This agreement must be by resolution passed at a general meeting at which no votes are cast in favour of the resolution by any party who is associated with the party acquiring the shares, or by the party acquiring the shares. Section 611 states

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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that shareholders of the company must be given all information that is material to the decision on how to vote at the meeting.

4.3 Policy Statement 74 issued by the Australian Securities and Investments Commission (“ ASIC ”) deals with “Acquisitions Agreed to by Shareholders”. It states that the obligation to supply shareholders with all information that is material can be satisfied by the non-associated directors of Redisland, by either:
♦ undertaking a detailed examination of the Transaction themselves, if they consider that they have sufficient expertise; or
♦ by commissioning an Independent Expert’s Report.

The directors of Redisland have commissioned this Independent Expert’s Report to satisfy this obligation.

5. B AS I S OF EV ALU ATI ON

5.1 Regulation Guidelines

In determining whether the Transaction is fair and reasonable, we have had regard to the views expressed by the ASIC in their Policy Statements 74 and 75 and Practice Notes 42 and 43. These Policy Statements suggest that an opinion as to whether Transactions are fair and reasonable should entail consideration of all the circumstances of the Transaction.

Such consideration includes a comparison of the likely advantages and disadvantages for Shareholders if the Transaction is accepted, with the advantages and disadvantages to those Shareholders if it is not.

5.2 Adopted Basis of Evaluation

Having regard to both Policy Statements above, BDO has completed this comparison in two parts:

♦ A comparison between the value of the consideration payable by Redisland and the value of AAI (fairness – see Section 14 “Is the Transaction Fair?”); and
♦ An investigation into other significant factors to which Shareholders might give consideration, prior to approving the resolution, after reference to the value derived above (reasonableness – see Section 16 “Is the Transaction Reasonable?”).
5.3 The Transaction could be considered “reasonable” if there are valid reasons to approve the Transaction notwithstanding that it may not be regarded as “fair” to Shareholders.

6. P ROFILE OF RE DIS L AND AUS TR ALI A LI M I TE D

6.1 History of Redisland

Redisland was established with the goal of marketing and distributing Australian olive oil within Australia and overseas. Redisland was incorporated on the 30 April 2003 as Piquant Blue Limted. The name of the company was changed on 16 November 2006.

The Australian olive industry, which has grown substantially over the past decade, has many producers with increasing production capacity as a result of rulings made by the Australian Tax Office to make these olive oil schemes tax deductible investments. As a result of this increasing production base and limited marketing and distribution functions

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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within Australia, the founders of Redisland recognised there were potential business opportunities to be explored in relation to creating a company dedicated to the marketing and distributing of Australian olive oil. Redisland has pursued this business concept through its’ Redisland and Njoi olive oil brands.

Redisland launched its olive oil range with the premium Australian brand 'njoi' in June 2003. This brand has become the Group's flagship premium offering and has won multiple awards in Australia and abroad. njoi was the only premium olive oil awarded 5 stars by The Times newspaper of London in September 2003 competing against the most established and high profile European brands and has won regular awards since.

The principal branding strategy was to create a quality platform for the development of future products. The key attributes of the njoi brand are luxury, exclusivity, quality and sophistication.

Redisland launched its supermarket range in August 2004 with the premium Australian brand 'redisland'.

This brand targets the upper end of the supermarket retail market and is clearly differentiated from the low cost, high volume foreign imports by its unique branding and flavours.

Redisland controls two subsidiaries that perform functions to support Redisland’s main business objectives. The subsidiaries are Oilpack Australia Pty Ltd ( “Oilpack” ) and AOX Pty Ltd ( “AOX” ).

AOX has a system and software developed as an on-line trading platform for olive oil buyers and sellers, as production in the industry increase. AOX is not currently active.

Oilpack was setup as a joint venture with Nefcorp Pty Ltd to supply Redisland with its bottling and logistics needs. For further information about Oilpack refer to section 10.

Redisland has achieved distribution of its products to the shelves of major Australian supermarket chains such as Woolworths, Coles and Metcash. Redisland has also started exporting internationally. As at June 2007, Redisland has secured distribution rights into 6,746 US based stores compared to 2,531 US based in the previous year.

Redisland was listed on the Australian Securities Exchange on 7 January 2004 with an IPO that raised $1,560,000. Following this IPO, Redisland has attracted investment interests and private placements from major agribusiness investment companies and fund management companies. The details of the major placements since listing have been detailed below.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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The funds received from the placements in January 2006 and July 2006 were used to fund the Company’s expansion into the US markets.

Share Placement	Placements ($)
Initial IPO January 2004 $1,560,000
Timbercorp May 2004 $1,750,000
Acorn Capital August 2005 $1,500,000
Timbercorp August 2005 $200,000
Private Investors August 2005 $300,000
Private Investors January 2006 $3,000,000
Private Investors July 2006 $4,200,000

Source: Redisland Website

As at the date of this report, Redisland is the only ASX listed company with the primary objective of marketing and distributing Australian olive oil.

6.2 Existing Capital Structure of Redisland

6.2.1 Capital Structure – Shares

The capital structure of Redisland as at 27 July 2007 was as follows:

Ordinary Shares	Ordinary Shares	Shares on Issue
Total Ordinary Shares on Issue	92,516,668
Top Twenty Shareholders – Ordinary Shares	60,199,611
Top Twenty Shareholders - % of Ordinary Shares on Issue	65.07%

Source: Redisland Share Registry report as at 27 July 2007

The spread of Redisland shareholders as at 27 July 2007 was as follows:

Range of Shares Held	No. of Ordinary Shareholders	No. of Ordinary Shares
1-1,000 4 206
1,001-5,000 63 209,982
5,001-10,000 143 1,357,753
10,001-100,000 181 7,376,217
100,001 – and over 86 83,572,510
TOTAL 477 92,516,668

Source: Redisland Share Registry report as at 27 July 2007

The number of shares held by the most substantial shareholders as at 27 July 2007 is detailed below:

Shareholder	Ordinary Shares	% Shares Held
Acorn Capital Limited	12,333,333	13.33
Mr A Konowalous & Ms L Konowalous	9,400,000	10.16
Timbercorp Limited	8,666,667	9.37
Mr L Saraceni	5,500,000	5.94
MsK Andrea	4,665,600	5.04

Source: Redisland Share Registry report as at 27 July 2007 and substantial shareholders notices lodged with the ASX.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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6.2.2 Redisland Structure – Options

Options	Options	Options on Issue
Options exercisable at 20 cents on or before 31 December 2007	9,775,000
Options exercisable at 30 cents on or before 31 December 2008	2,500,000
Options exercisable at 40 cents on or before 31 December 2008	1,500,000
Options exercisable at 45 cents on or before 31 December 2008	1,500,000
Options exercisable at 42 cents on or before 31 December 2010	450,000
Options exercisable at 45 cents on or before 17 August 2011	435,000
Options exercisable at 50 cents on or before 17 August 2011	410,000
Options exercisable at 60 cents on or before 17 August 2011	420,000
Options exercisable at 70 cents on or before 17 August 2011	445,000
Total Options on Issue	17,435,000

Source: Redisland Option Registry report as at 27 July 2007

The number of Options held by the following options holders as at 27 July 2007 is detailed below:

Option Holder	Options	% Options Held
Timbercorp Limited 5,500,000 31.55
Mr Andrew Konowalous 5,025,000 28.82
Ms Serng Yee Liew 1,500,000 8.60
Mr AnthonyHo 1,000,000 5.74
Total 13,025,000 74.71

Source: Redisland Option Registry report as at 27 July 2007

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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6.3 Historical Consolidated Balance Sheet Position of Redisland

Redisland	Unaudited	Reviewed	Audited	Audited
	As at	As at	As at	As at
	30 June 2007	31 December 2006	30 June 2006	30 June 2005
	$	$	$	$
CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions Interest Bearing Liabilities TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Interest bearing liabilities TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses Total equity attributable to equity holders of the parent Minority Interests TOTAL EQUITY	315,311 1,531,269 1,556,551 435,780 1,997,727 1,570,225 1,232,358 460,810 2,768,804 5,171,140 2,447,407 716,438 270,984 477,305 44,558 52,201
	5,352,826 8,749,939 5,280,874 1,665,229
	517,535 545,082 557,746 426,083
	517,535 545,082 557,746 426,083

	5,870,361 9,295,021 5,838,620 2,091,312
	1,916,777 2,226,149 2,397,239 545,763 90,522 85,844 75,894 51,761 1,044,667 1,108,913 727,097 806,063
	3,051,966 3,420,906 3,200,230 1,403,587
	209,855 192,756 153,120 181,898
	209,855 192,756 153,120 181,898
	3,261,821 3,613,662 3,353,350 1,585,485

	2,608,540 5,681,359 2,485,270 505,827
	12,412,727 12,412,727 8,568,747 3,953,572 148,899 114,419 69,375 29,375 (10,044,692) (6,937,393) (6,244,458) (3,497,279)
	2,516,934 5,589,753 2,393,664 485,668

	91,606 91,606 91,606 20,159

	2,608,540 5,681,359 2,485,270 505,827

Source: Redisland 2005 Annual Report, Redisland 2006 Annual Report, Redisland’s December 2006 half yearly financial statements and Redisland 30 June 2007 management accounts.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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6.4 Historical Consolidated Income Statement of Redisland

Redisland	Unaudited Financial Year	Reviewed Half Year	Audited Financial Year	Audited Financial Year
	30 June 2007	31 December 2006	30 June 2006	30 June 2005
	$	$	$	$
Revenue from continuing operations Cost of Sales Gross Profit Other revenue from ordinary activities Operational expenses Marketing and distribution expenses Corporate and Administration Expenses Occupancy expenses Borrowing costs Write down in the value of obsolete inventories Other Expenses Loss before income tax expense Income tax expense Net Loss attributable to equity holders of the parent Net Loss (profit) attributable to minority equity interests Net Loss attributable to equity holders of the parent	9,756,812 3,957,897 4,024,361 1,886,324 (6,115,027) (2,193,143) (2,510,601) (1,522,970)
	3,641,785 1,764,754 1,513,760 363,354 215,435 53,401 111,885 138,733 (2,924,580) (890,121) (1,553,565) (780,934) (3,880,020) (1,000,125) (1,953,110) (1,269,412) (565,046) (234,804) (525,073) (308,385) (118,957) (95,778) (134,138) (123,910) (45,370) (65,099) (82,648) (31,544) (123,481) (84,292) (5,808) ~ ~ (140,871) (47,035) (209,794)
	(3,800,234) (692,935) (2,675,732) (2,221,892) ~ ~ ~ ~
	(3,800,234) (692,935) (2,675,732) (2,221,892) ~ ~ (71,447) 53,692
	(3,800,234) (692,935) (2,747,179) (2,168,200)

Source: Redisland 2005 Annual Report, Redisland 2006 Annual Report, Redisland’s December 2006 half yearly financial statements and Redisland 30 June 2007 management accounts.

6.5 Commentary on the Consolidated Historical Income Statement of Redisland

Revenue for the 2007 year is substantially higher than the previous year due to Redisland’s growth in the US markets. As at June 2007, the group has secured distribution into 6,746 US based stores compared to 2,531 US based stores in the previous financial year.

Redisland has experienced significantly higher operational costs in the 2007 financial year including the high level of marketing and distribution expenses incurred as it commenced actively marketing its products in the US. In particular, slotting fees (incurred in the US to each retailer on a once-off non recurrent basis) of approximately $2.4m have been expensed. The results for the year ended 30 June 2007 also included other abnormal items such as providing for unrealized foreign exchange losses of $477,207 and providing for costs associated with the relocation of the Company’s bottling and packaging facility to Melbourne of $100,000.

6.6 Commentary on the Consolidated Historical Balance Sheet of Redisland

As at December 2006, inventory levels were overstocked in the US due to the logistical problems encountered moving products onto the shelves of the US markets. Redisland

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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management have actively reduced the inventory levels during the last 6 months leading to a decrease in inventory levels as at June 2007. Due to the high level of level of expenses incurred during the 2007 year, Redisland’s cash balance has decreased substantially.

7. P ROFILE OF AAI LI MI TED

7.1 History of AAI

AAI was formed by the principals of Grimsey Pty Ltd (“ Grimsey ”), a medium size financial planning and accounting firm based in Melbourne, Australia. The firm has specialised in catering for the taxation and financial needs of clients, with seventy percent of its client base coming from the primary health care sector.

AAI was formed in order satisfy demand from this client base for agribusiness investment options and in order to take advantage of opportunities the Grimsey principals saw in the olive oil industry.

AAI commenced operations in 2001 with a view that:

♦ With access to comparatively cheap land and water and with the application of modern broad acre horticultural practices to an industry which is largely locked into traditional European production methods, Australia could be a low cost producer of extra virgin olive oil; and
♦ To provide investment products within the agricultural managed investment framework that focused on positive cashflows to investors rather than immediate tax deductions.

AAI has established three orchards 14km west of Boort in Northern Victorian, a region which is now the largest olive growing area in Australia. The plantings of AAI are summarised in the table below:

Date Planted	Project Name	Area Planted	Number of Trees	Year of First Commercial Harvest
2002	Victorian Olive Oil Project (VOOP)	285 Hectares	94,050	2005
2003	Victorian Olive Oil Project II (VOOP II)	118 Hectares	38,940	2006
2006	Peppercorn	108 Hectares	35,640	2009 (provisional)

The 2002 and 2003 plantings are now in commercial production and expected to near maturity yields in 2009 or 2010. These two plantings produced in excess of 500,000 litres for the 2007 harvest which is estimated to be around 5% of the total national production for the year. The 2006 planting is expected to provide a commercial harvest in 2009.

All oil produced to date has been of the highest quality, that being extra virgin olive oil. The characteristics of the oils produced from the different varieties on the orchard are suitable for blending and creating oils that match most flavour profiles.

To date AAI’s approach to marketing the oil has been to focus on the bulk markets and has developed three channels for the sale of the oil. These channels have been:

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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♦ Direct export – AAI has sold bulk flexitanks (24,000 litre containers) of extra virgin olive oil directly to Europe, the United States and into Asia;
♦ Export via Australian traders – this represents bulk oil sales to Australian brokers who have either on sold the shipment directly to their customers or blended the oil with other bulk supplies prior to shipment.
♦ Australian brands – oil has been sold to the owners of some of the major brands in Australia including Redisland.

7.1.1 The Orchard

As noted above the orchard comprises three separate plantings totalling 511 hectares planted. The principal varieties planted are:

♦ Barnea;
♦ Leccino;
♦ Picual;
♦ Pcual;
♦ Nevaddlo Blanco;
♦ Arbequina; and
♦ Coratina.

The irrigation system draws water from the Waranga Western channel which is managed by Golburn Murray Water. The water management strategy employed by AAI has been a combination of permanent rights, long term leases and top up purchases on the temporary water markets. The irrigation system itself is a fully automated, computerized system which allows water to be allocated to all sections of the orchard on a timely manner.

The AAI Group owns its own equipment and is not reliant upon external contractors for the performance of the orchard management. This includes two tow behind harvesters which were commissioned during the 2007 year.

The AAI Group owns its own processing facility which was built in 2005 at a cost of just over $2,000,000. It includes a Pieralisi MF8 decanter configured to process up to 5 tonne of fruit per hour as well as a storage facility with a capacity of around 600,000 litres. The plant is housed in a purpose built building with sufficient space to allow for expansion by the inclusion of additional processing lines and additional storage.

7.1.2 Highlights of AAI

The principal highlights over the past five years have been:

♦ The creation of three orchards, all with appropriate variety selection, orchard design, water supply which have been managed to result in good even growth across all varieties;
♦ All orchards brought into commercial production within three years of planting with
fruit and oil yields well above industry norms;
♦ The establishment of a $2m processing facility capable of being expanded to meet increased future production;

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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♦ The commissioning of a tow behind olive harvester which will potentially lead to a significant reduction in the cost of harvesting olive fruit in the future; and
♦ Management of the orchards through the recent Victorian drought with little noticeable impact upon the trees.

7.1.3 Business Model

AAI has structured it business so as to have three revenue streams. These are:

♦ A management fee on the establishment of new orchards;
♦ Rental receipts form the lease of the two VOOP projects to investors; and
♦ Management fees from the management of all three projects.

7.1.4 Project Structures

The names of the three AAI projects are;

♦ Victorian Olive Oil Project (“VOOP”)
♦ Victorian Olive Oil Project II (“VOOP II”)
♦ Peppercorn

The first project was called the Victorian Olive Oil Project. This was launched by way of a prospectus dated 1 May 2001. Investors’ contributions consisted of rental and management fees. The schemes of fees are summarised below:

VictorianOlive Oil Project	Costs (excluding GST)
Initial Costs Establishment of Irrigation System $9,000 Lease of Land , Water and Trees (to 30 June 2002) $5,180 Management and Harvesting Fees (to 30 June 2004) $8,600 Total Cost on Application $22,780 Annual Operating Cost Lease of Land, Water and Trees (fixed for 2003 to 2010, indexed to CPI there after) $2,590 Management and Harvesting Fees $4,600 (fixed for 2005, indexed to CPI thereafter and subject at all times to Adjustable Events) Variable Operating Costs Crushing andMarketingFees 15% ofoilextracted

VictorianOlive Oil Project

Costs (excluding GST)

Initial Costs
Establishment of Irrigation System
$9,000
Lease of Land , Water and Trees (to 30 June 2002)
$5,180
Management and Harvesting Fees (to 30 June 2004)
$8,600
Total Cost on Application
$22,780
Annual Operating Cost
Lease of Land, Water and Trees (fixed for 2003 to 2010, indexed to CPI there after)
$2,590
Management and Harvesting Fees
$4,600
(fixed for 2005, indexed to CPI thereafter and subject at all times to Adjustable
Events)
Variable Operating Costs
Crushing andMarketingFees
15% ofoilextracted

The second project was called the Victorian Olive Oil Project II. The product disclosure statement for this project was dated 23 December 2003. Investors contributions consisted of rental and management fees. The main difference between this scheme

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The Directors Redisland Australia Limited

6 August 2007

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and the Victorian Olive Oil Project is that the investors profit sharing arrangement and annual contributions are different. The schemes of fees are as below:

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Victorian Olive Oil Project II Costs (excluding GST)
Initial Costs
Grower’s Lease of Land, Water and Trees (paid to 30 June 2006) $11,400
Management Fee (which are paid to 30 June 2002) $11,000
Total Cost on Application $22,400
Annual Operating Cost
Grower’s Lease
Grower’s Lease (fixed for 2003 to 2010, indexed to CPI thereafter. The grower may $5,700
elect to take up the production sharing option in the Grower’s Lease from 1 July
2009 in which the Grower’s Lease is 30 percent of gross annual revenue)
Management and Harvesting Fees $5,500
(Fixed for 2003 to 2010, indexed to CPI thereafter. The grower may elect to take up
the production sharing option in the Management Agreement from 1 July 2009 in
which the Management Agreement is 30 percent of gross annual revenue)
----- End of picture text -----

The third project called Peppercorn consisted of an initial public offering to raise $4.8 million. The prospectus was dated 2 August 2006. The structure of this project is fundamentally different from the initial two projects. This project was set up as a company and shareholders will receive returns in the form of dividends. This project does not offer the tax advantages that the previous two projects offered investors. However, ownership of the land is now transferred to the investors whilst in the original two projects, the land ownership was retained by AAI.

The three projects earn AAI revenue through the management fees charged for the maintenance of the land, harvesting the olives trees and fees charged for marketing and distributing the olive tress. In VOOP and VOOP II, rental fees are also charged for the usage of the land.

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The Directors Redisland Australia Limited

6 August 2007

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7.1.5 Major Subsidiaries

There are four major subsidiaries of AAI which carry out the operations of business. Brief descriptions of the major subsidiaries of AAI Limited are as follows:

Subsidiary	Responsibility
Victorian Olive Oil Project Limited	This entity acts as the project manager for Victorian Olive Oil Project and Victorian Olive Oil Project II. This entity is responsible for the administrative and compliance cost of the schemes.
Lanyons Paddock Pty Ltd	Lanyons Paddock Pty Ltd owns the land and trees which the olives trees within the projects are based on with the exception of Peppercorn
Terrapee Contractors Pty Ltd	Terrapee Contractors Pty Ltd provides management and harvest services to the projects.
Victorian Olive Processors Pty Ltd	Victorian Olive Processors Pty Ltd provides processing and marketing related services to the projects.

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7.1.6 Project Flows

The below diagrams explain the relationship between the different subsidiaries and the investors.

7.1.6.1 Relationships for VOOP and VOOP II

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AAI (owns 100 percent of the
subsidiaries)
Head Lease
Lanyons Paddock
Grower’s Lease Management
Grower (Investor) Victorian Olive Agreement
Management Oil Project Terrapee
Agreement
Contractors
Crushing and Marketing Agreement
Reports and Grower’s Gross Victorian Olive
Annual Revenues
Oil Processors
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7.1.6.2 Relationship for Peppercorn

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----- Start of picture text -----

AAI (owns 100 percent of the
subsidiaries)
Management
Peppercorn (proceeds Agreement
through IPO)
Management Terrapee
Agreement
Contractors
Crushing and Marketing Agreement
Reports and Grower’s Gross
Annual Revenues Victorian Olive
Oil Processors
----- End of picture text -----

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The Directors Redisland Australia Limited

6 August 2007

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7.2 Historical Consolidated Balance Sheet Position of AAI Limited

AAI Limited	Unaudited	Audited	Audited
	As at	As at	As at
	30 June 2007	30 June 2006	30 June 2005
	$	$	$
CURRENT ASSETS Cash and cash equivalents Inventories Trade and other receivables Future Income Tax Benefit Other TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Other-Non Current TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Interest bearing liabilities Payables Provision for income tax Other current liabilities TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Interest bearing loans TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Retained profits TOTAL EQUITY	1,390,545 276,306 421,770 412,567 222,402 121,731 3,608,201 788,668 468,729 ~ 70,983 104,966 36,757 35,064 31,233
	5,448,070 1,393,451 1,148,429
	6,503,020 7,095,690 5,508,672 4,129 6,734 2,352
	6,507,149 7,102,424 5,511,024

	11,955,219 8,495,875 6,659,453
	2,219,239 2,033,734 1,202,595 853,826 725,668 505,872 96,391 304,752 291,914 2,811,667 715,293 1,572,115
	5,981,123 3,779,467 3,572,496
	2,504,878 2,214,528 1,529,793
	2,504,878 2,214,528 1,529,793
	8,486,001 5,993,995 5,102,289
	3,469,218 2,501,880 1,557,164
	850 850 850 3,468,368 2,501,030 1,556,314
	3,469,218 2,501,880 1,557,164

Source: AAI 2005 Annual Report, AAI 2006 Annual Report, AAI June 2007 Management Accounts

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The Directors Redisland Australia Limited

6 August 2007

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7.3 Historical Consolidated Income Statement of AAI Limited

AAI Limited	Unaudited	Audited	Audited
	As at	As at	As at
	30 June 2007	30 June 2006	30 June 2005
Project contract fees Other revenues from ordinary activities Total Revenue Property expenses Orchard Operating expenses Finance expenses Depreciation and amortization Compliance expenses Selling expense Other expenses from ordinary activities Profit before income tax expense Income Tax expense relating to ordinary activities Net Profit	$ $ $ 4,403,020 3,575,103 3,456,677 35,517 198,999 89,285
	4,438,537 3,774,102 3,545,962 587,174 154,076 153,490 1,795,968 1,527,731 1,067,747 419,840 273,432 142,612 246,722 232,671 125,458 253,540 254,900 277,269 ~ 27,176 117,008 4,364 ~ ~
	1,130,929 1,304,116 1,662,378
	314,638 359,400 431,160

	816,291 994,716 1,231,218

Source: AAI 2005 Annual Report, AAI 2006 Annual Report, AAI June 2007 Management Accounts

7.4 Commentary on the Consolidated Historical Income Statement of the AAI

AAI’s revenues have increased during the 2007 financial year due to the establishment fees and management fees received in relation to the establishment of Peppercorn project, a new project launched on 2 August 2006. Property expenses have increased significantly due to a significant rise in water costs experienced due to a water shortage across Victoria. Orchard operating expenses have increased during the year due to research and development activities undertaken by the company in regards to improving harvester technologies. These expenses are expected to return to normal levels this year.

7.5 Commentary on the Consolidated Historical Balance Sheet of AAI

The cash position of the company has increased due to the profitable position of the company.

During the year, the company established the Peppercorn project and received the management and grower’s fees for the duration of the entire project up front. As a result other current liabilities have increased from receiving this unearned income.

As AAI had excess cash balances at the end of the 2007 financial year, it had lent its excess cash balances to entities associated with the directors. This is reflected by the large increase in the other receivables on the balance sheet. Property and equipment decreased due to the transfer of land to the investors of the Peppercorn project.

The balance sheet noted above is significantly different from the assets that will be acquired by Redisland. The pro-forma balance sheet transferred to Redisland has been included in section 13.4. The difference is largely due to the reduction in related party

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6 August 2007

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receivables to satisfy dividend distributions to AAI shareholders, as agreed, before arriving at a pro-forma balance sheet to be transferred to Redisland.

7.6 Existing Capital Structure of AAI Limited

The current owners of AAI and their respective entitlement under the Transaction to Redisland shares are set out below:

Number of Shares	Number	% Shares Held
Grimfam Holdings Pty Ltd 33,263,585 47.05 Patrac Holdings Pty Ltd 12,473,845 17.65 Madfam Holdings Pty Ltd 12,473,845 17.65 Pettofrezza Family Holdings Pty Ltd 12,473,845 17.65
Total 70,685,120 100.00%

8. T HE OLI VE OI L M AN AGE D I NVE S TME NT S CHEME I NDUS TRY

8.1 Agribusiness Managed Investment Schemes In Australia

An agribusiness managed investment scheme is a project based on any particular activity within the farming sector. These schemes bring the public into a business venture through investment and these same investors carry on the activity of the venture. The fact that each person’s investment is managed by another party gives rise to a managed investment scheme. Agribusiness investors actively take on the risk of the business as the profits of these schemes are dependent on the profits that can be made from the disposal of the farm’s inventories. As a result of this, the investors are deemed actively involved in the business and as a result the investor is entitled to taxation deductions available from these schemes. These taxation deductions can be further compounded by the investor’s financing options of these investment schemes.

MIS involve the establishment of a predefined number of hectares of plantations of a specific type of plant (often trees, fruit or in AAI‘s case, olive trees). The objective of the MIS is to grow, harvest and market the plant for the highest overall price the MIS can obtain. The growers in combination with the MIS will share the proceeds from the sale of these plants in a predefined profit sharing agreement.

The typical structure of an agribusiness investment scheme is as follows;

♦ MIS offers investors the right to use a piece of land for farming for a rental fee;
♦ The MIS promoter stipulates that the land must be only carried out for farming as per the subject of the scheme; and
♦ The MIS offers the investor a management contract under which the promoter agrees to provide the full range of services from ground preparation, planting, harvesting and selling the produce.

The MIS has the ability to charge upfront fees or yearly annual fees.

8.2 Taxation Applications – pre July 2007

Investors are able to receive tax deductions from the MIS due to the fact that rental fees and management fees are viewed to be carrying on a business to sell the produce that the farm produces.

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Since 1998, the agribusiness scheme industry has operated within the product ruling system introduced by the ATO. This was due to the fact that with the large amount of investors entering into these businesses to claim tax deductions, the ATO issued specific product rulings gave investors an investor absolute protection from the ATO if the deductions claim is in accordance with the product rulings.

8.3 Taxation Applications – post July 2007

On 6 February 2007 the Minister for Revenue and Assistant Treasurer announced a significant change to the taxation arrangements for investments in non-forestry schemes.

The ATO has changed the interpretation of the current law so from 1 July 2007, investors are no longer able to claim up front deductions for their contributions to non-forestry schemes on the basis they were carrying on a business. Instead, the announcement made it clear that nonforestry agribusiness investments would be regarded as passive with the consequent tax treatment.

The ATO has indicated developments in the area of corporations law and certain case law to justify the ATO reconsidering its position. Due to negative feedback from the agribusiness sector, the ATO is preparing a draft taxation ruling which will set out its re-considered position. The general consensus across the sector seems to be that it is resigned to accept the fact that the ATO legislation will remain in place however these is a push for a transition period of at least three years.

8.4 Major Competitors

The Australian Agribusiness Managed Investment Scheme sector is dominated by several listed companies such as Great Southern Plantations, Timbercorp, Gunns and the TFS Corporation. The majority of these companies specialise in the planting of trees for the harvesting of wood however Great Southern and Timbercorp have developed management investment schemes that focus on the olive oil industries. A brief description of these companies is included in Appendix 2.

8.5 Olive Oil Industry within Victoria

The Victorian olive oil industry has more than 500 producers supplying domestic and export markets. It is estimated that more than $300 million has been invested into the Victorian olive industry. The Victorian olive industry distinguishes itself from the rest of Australia in that it has eight corporate growers who collectively have a significant share of the Australian oil market.

In Victoria, there are 500 producers however a small number of producers produce the majority of the state’s produce. A survey conducted in 2000 found that 37 percent of growers have less than 50 trees whilst another 53 percent of the growers had between 500 to 5000 trees.

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The remaining 10 percent of growers account for 90 percent of the state’s produce. The major players within the industry are as follows;

Trees	Growers
950,000 trees	Timbercorp Limited, Boort
580,000 trees	Boundary Bend
170,000 trees	Victorian Olive Oil Project
80,000 to 100,000 trees each	Liverno, Kialla, Boort Olives, Olivayille, Telopea Downs
50,000 to 60,000 trees each	Kyneton Olives, Grampians Olive Estate, Rich Glen Yarawonga, Clearstream Olives
20,000 to 30,000 trees each	Cobram Estate, Nicolas Olive Estate

Source: Victorian Department of Primary Industry

8.6 Australian Olive Oil Industry

The Australian olive oil industry has been existence since the 1800’s. In the past 15 years the olive oil industry has experienced significant growth and refinement of industry practises through improved technology. It is estimated that within Australia there have been more than 9 million olive trees planted since 1992.

The interest in olive oil started in the early 1990’s due to the popularity of Mediterranean food as a healthy alternative to other foods within Australia. This market perception combined with increased multiculturalism in Australia prompted an increase in the demand for olive oil. Combined with the tax rulings noted in section 8.2, many producers started entering the Australian olive oil production and processing industry.

The conditions in Australia are more favourable to olive oil production when compared to the traditional olive oil growing regions of Europe. The major advantages are;

♦ Most Australian olive groves are irrigated compared to only 15 percent of groves in Europe;
♦ Australia does not have issues with the Olive fly whilst Europe has a major problem with Olive fly;
♦ European groves average 1.5 tonnes per hectare of fruit harvest compared to modern Australian groves which average 12.5 tonnes per hectare.
♦ Nearly 100 percent of Australian production is Extra Virgin olive oil compared to only 20 percent of production in Europe.

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The Directors Redisland Australia Limited

6 August 2007

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8.7 Market Statistics

	Production Estimates	Production Estimates	Production Estimates	Production Estimates	Production Estimates	Production Estimates	Production Estimates	Production Estimates	Extra Virgin Olive Oil	Extra Virgin Olive Oil	Table Olives	Table Olives
	for Australia, 2006

Year	Olive	Table	NSW	QLD	SA	VIC	TAS	WA	Imports	Exports	Imports	Exports
	Oil	Olives							(tonnes)	(tonnes)	(tonnes)	(tonnes)

	(tonnes)
2001 500 n/a n/a n/a n/a n/a n/a n/a 27,680 385 11,545 74 2002 750 n/a n/a n/a n/a n/a n/a n/a 28,987 300 12,618 199 2003 1,500 ~ 11.0% 12.0% 39.0% 28.0% 1.0% 9.0% 28,447 278 14,483 138 2004 2,500 2,000 12.0% 8.0% 16.0% 47.0% 1.0% 16.0% 32,657 501 13,711 265 2005 5,000 2,700 12.1% 5.0% 16.2% 40.1% 0.4% 26.2% 29,062 1,652 15,143 215 2006 8,650 n/a 8.3% 4.0% 18.2% 53.9% 0.2% 15.4% 34,511 2,988 15,608 230

Source: EVOO: Leandro Ravetti, Modern Olives — AOA National Conference 2006

The above table illustrates that Australia is a net importer of olive oil. The current production levels of olive oil in Australia are significantly exceeded by the levels of imports into Australia. As a result of this net import position, producers in Australia should be able to more effectively sell their produce as they are able to compete on more favourable terms to importers (as Australian producers incur lower transportation costs).

Olive oil consumption in Australia has almost doubled in the past decade from 16,500 tonnes in 1995/96 to over 30,000 tonnes in 2005/06. This has largely fuelled by Australia’s significant multicultural population, demand for healthy foods and increasing population.

9. V ALU ATI ON ME THODOLOGI ES

9.1 Methodologies commonly used for valuing assets and businesses are as follows:

9.1.1 Capitalisation of future maintainable earnings (“FME”)

This method places a value on the business by estimating the likely FME, capitalised at an appropriate rate which reflects business outlook, business risk, investor expectations, future growth prospects and other entity specific factors. This approach relies on the availability and analysis of comparable market data.

The FME approach is the most commonly applied valuation technique and is particularly applicable to profitable businesses with relatively steady growth histories and forecasts, regular capital expenditure requirements and nonfinite lives.

The FME used in the valuation can be based on net profit after tax or alternatives to this such as earnings before interest and tax (“ EBIT ”) or earnings before interest, tax, depreciation and amortisation (“ EBITDA ”). The

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capitalisation rate or “earnings multiple” is adjusted to reflect which base is being used for FME.

9.1.2 Discounted future cash flows (“DCF”)

The DCF methodology is based on the generally accepted theory that the value of an asset or business depends on its future net cash flows, discounted to their present value at an appropriate discount rate (often called the weighted average cost of capital). This discount rate represents an opportunity cost of capital reflecting the expected rate of return which investors can obtain from investments having equivalent risks.

A terminal value for the asset or business is calculated at the end of the future cash flow period and this is also discounted to its present value using the appropriate discount rate.

DCF valuations are particularly applicable to businesses with limited lives, experiencing growth, that are in a start up phase, or experience irregular cash flows.

9.1.3 Net tangible asset value on a going concern basis (“NTA”)

Asset based methods estimate the market value of an entity’s securities based on the realisable value of its identifiable net assets. Asset based methods include:

♦ Orderly realisation of assets method
♦ Liquidation of assets method
♦ Net assets on a going concern method

The orderly realisation of assets method estimates fair market value by determining the amount that would be distributed to entity holders, after payment of all liabilities including realisation costs and taxation charges that arise, assuming the entity is wound up in an orderly manner.

The liquidation method is similar to the orderly realisation of assets method except the liquidation method assumes the assets are sold in a shorter time frame. Since wind up or liquidation of the entity may not be contemplated, these methods in their strictest form may not be appropriate. The net assets on a going concern method estimates the market values of the net assets of an entity but does not take into account any realisation costs.

Net assets on a going concern basis are usually appropriate where the majority of assets consist of cash, passive investments or projects with a limited life. All assets and liabilities of the entity are valued at market value under this alternative and this combined market value forms the basis for the entity’s valuation.

Often the FME and DCF methodologies are used in valuing assets forming part of the overall Net assets on a going concern basis. This is particularly so for exploration and mining companies where investments are in finite life producing assets or prospective exploration areas.

These asset based methods ignore the possibility that the entity’s value could exceed the realisable value of its assets as they do not recognise the value of intangible assets such as management, intellectual property and goodwill.

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6 August 2007

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Asset based methods are appropriate when entities are not profitable, a significant proportion of the entity’s assets are liquid or for asset holding companies.

9.1.4 Net Realisable Value (“NRV”)

NRV is usually appropriate when an asset or business is to be sold or wound up. The NRV should provide a realistic indication of the value that could be obtained in the event of an orderly realisation of assets.

9.1.5 Quoted Market Price Basis

Another alternative valuation approach that can be used in conjunction with (or as a replacement for) any of the above methods is the quoted market price of listed securities. Where there is a ready market for securities such as the ASX, through which shares are traded, recent prices at which shares are bought and sold can be taken as the market value per share. Such market value includes all factors and influences that impact upon the ASX. The use of ASX pricing is more relevant where a security displays regular high volume trading, creating a “deep” market in that security.

9.2 Valuation methodologies utilised in this report

9.2.1 Valuation of Consideration

9.2.1.1 Valuation of the Shares issued as Consideration

The Quoted Market Price Basis is our preferred primary valuation methodology to value Redisland. Redisland is an ASX listed company and the share price will represent the market’s view of the value of Redisland.

We have used the Net Assets on a Going Concern Basis, as a secondary valuation method to value a Redisland share.

We have noted that revenues for Redisland have increased significantly for the past two financial years. The directors believe that revenue will continue to increase going forward. We have obtained management’s internal forecasts for the 2008, 2009 and 2010 financial years. Due to the sensitivity of the forecasts to many factors and high-growth nature of its business and the consequential uncertainty about which scenarios may actually come to be we have not included discounted cash flow valuation of Redisland within our Report.

9.2.1.2 Acquisition of a 49 percent stake in Oilpack Pty Ltd

We have used the discounted future cash flows approach to value the additional financial benefits that Redisland will receive by acquiring a 100 percent stake in Oilpack. We have used this method as the cash flow savings from acquiring Oilpack and the expenditure required to acquire Oilpack are readily observable.

9.2.2 Valuation of AAI

We have used the future maintainable earnings method as our primary method of valuing AAI. This is due to the fact that AAI has been consistently profitable, is experiencing a constant growth rate and has a non-definite life span.

The Net Assets on a Going Concern Basis has been used as a secondary approach to

value AAI Limited.

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The Directors Redisland Australia Limited

6 August 2007

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10. V ALU ATI ON OF R E DIS L AND P RI OR TO THE TR AN S ACTI ON

10.1 Quoted Market Prices for Redisland Securities

The following chart provides a summary of Redisland’s share price movement over the past year.

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----- Start of picture text -----

2,500,000 0.40
0.35
2,000,000
0.30
0.25
1,500,000
0.20
1,000,000 0.15
0.10
500,000
0.05
- 0.00
Total monthly volume traded on-market Weighted average on-market monthly share price
Volume
Share Price (c)
Jul-06 Aug-06 Sep-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07
----- End of picture text -----

Source: ASX

The daily price of Redisland shares from 31 June 2006 to 28 June 2007 (the last day shares were actively traded prior to announcement of the Transaction) has ranged from a high of $0.38 on 21 September 2006 to a low of $0.13 on 20 June 2007. The price of Redisland shares was $0.190 on the 31 July 2007, the first day after the release of the suspension.

To provide further analysis of the market prices for Redisland shares, we have also considered the weighted average market price for 10, 30, 60 and 90 day periods to 28 June 2007.

Redisland per share	28 June 2007	10 Days	30 Days	60 Days	90 Days
Closing Price $0.160 Weighted Average $0.160 $0.159 $0.165 $0.174

The above weighted average prices are prior to the date of the announcement of the Transaction, to avoid the influence of any increase in price of Redisland shares that has occurred since the Transaction was announced.

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The Directors Redisland Australia Limited

6 August 2007

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An analysis of the volume of trading in Redisland shares prior and including the last active trading day on 28 June 2007 is set out below:

Prior and	Share price (low) A$	Share price (high) A$	Cumulative	As a % of
Inclusive to 28			volume	issued capital
June 2007			traded
1 day	0.160	0.160	4,250	0.00%
1 week	0.150	0.180	406,600	0.44%
1 month	0.130	0.180	1,316,316	1.42%
3 months	0.130	0.205	2,303,116	2.49%
6 months	0.130	0.300	8,368,026	9.04%
12 months	0.130	0.380	11,314,201	12.23%

Our assessment is that a range of values for Redisland shares based on market pricing is between $0.150 and $0.174.

The above analysis demonstrates that Redisland is an illiquid stock. The average buy sell spread in FY 2006 was 4.5 percent and in FY 2007 the average buy sell spread was 7.9 percent. In addition to this 65.05 percent of Redisland shares are held by the top 20 shareholders.

We have further discounted the value of the Redisland shares by 15 to 20 percent to factor into the Redisland share price a discount for illiquidity.

Valuation		Value per Redisland Share ($)	Value per Redisland Share ($)
		Low	High
Quoted market price basis 0.150 0.174 Illiquidity Discount (20 percent) (15 percent) Quoted market price basis (factoring in illiquidity) 0.120 0.148

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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10.2 Net Asset Valuation of Redisland

Redisland		Unaudited	Realisable Value
		As at	As at
		30 June 2007	30 June 2007
	Reference	$	$
CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions Interest Bearing Liabilities TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Interest bearing loans TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS Shares on Issue Value per Share (cents)	10.2.1	315,311 315,311 1,997,727 1,997,727 2,768,804 2,768,804 270,984 2714,158
		5,352,826 7,796,000
		517,535 517,535
		517,535 517,535

		5,870,361 8,313,535
		1,916,777 1,916,777 90,522 90,522 1,044,667 1,044,667
		3,051,966 3,051,966
		209,855 209,855
		209,855 209,855
		3,261,821 3,261,821

		2,608,540 5,051,714
		92,516,668 5.46

We do not consider it necessary to adjust the values of any of the items in the Redisland balance sheet for the purpose of our valuation as their realisable value is accurately represented by the carrying value other than the item noted below.

10.2.1 We have capitalised slotting fees as we believe these fees have a value to the business. Redisland will be able to utilise the future benefits of these up front slotting fees paid for entering in the US market. The economic benefits will be realisable in the form of future profits Redisland makes in the US markets.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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10.3 Assessment of Redisland’s Value

The following table summarises our assessment of the value of Redisland shares prior to the approval of the Transaction:

Valuation	Ref:	Value per Redisland Share ($)	Value per Redisland Share ($)
		Low	High
Quoted market price basis 10.1 0.120 0.148 Net tangible assets 10.2 0.054 0.054

Based on the results above, the value of existing Redisland shares pre Transaction is between $0.120 to $0.148 on quoted market price basis including a discount of illiquidity.

We have preferred the quoted market price valuation of Redisland as the market price incorporates the perceived value of Redisland’s management’s ability to expand the business and includes the market’s perceived value of intangible assets owned by Redisland.

10.4 Valuation of Oilpack Pty Ltd

10.4.1 Background of Oilpack and acquisition of remaining 49% in Oilpack

Redisland currently owns 51% in Oilpack Pty Ltd (“ Oilpack ”). The other 49% is held by Nefcorp Pty Ltd (“Nefcorp”). Oilpack is a bottling and packaging business established in 2004. It handles all of Redisland bottling and packaging requirements, on a cost recovery basis, for a monthly management charge of $10,000 (plus GST) payable to Nefcorp.

Prior to the Transaction with AAI, Redisland has reached agreement with Nefcorp to acquire the 49% interest in Oilpack from Nefcorp for a cash consideration of $480,000 payable in monthly instalments of $10,000 over a four year period. The agreement provides that no interest is payable on the purchase consideration.

One of the completion conditions to the AAI Transaction is the completion of the acquisition by Redisland of the 49% in Oilpack.

We regard the acquisition of the other 49% of Oilpack to have a net quantifiable benefit to the valuation of Redisland Shares and therefore is relevant to our assessment of the fairness of the AAI Transaction to the Shareholders of Redisland. For this reason, we have conducted a valuation of the 49% interest in Oilpack to be acquired by Redisland.

10.4.2 Historical Financial Position and Historical Income statement of Oilpack

Oilpack did not record any profits or losses during the 2007 financial year as a result of the arrangement in which Oilpack will provide Redisland bottling and packaging services on a cost recovery basis. Nefcorp receives a monthly fee of $10,000 (plus GST) from Redisland as part of this agreement.

Oilpack’s assets include certain plant and equipment used for its bottling and packaging activities. These plant and equipment were acquired with funding by finance leases by Oilpack.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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Oilpack’s historical profit and loss and historical net asset positions are as follow:

Oilpack		Unaudited Year Ended 30 June 2007 $	Audited Year Ended 30 June 2006 $	Audited Year Ended 30 June 2005 $
Oilpack Profit (Loss) before Tax ~ 145,810 (109,574) Oilpack Net Assets 186,953 186,953 41,143

Source: Oilpack Management Accounts

10.4.3 Valuation of the Additional Benefits of Acquiring 100 percent of Oilpack

To value the 49 percent share Redisland will acquire from Nefcorp in the Transaction, we have valued the $480,000 consideration payable by Redisland for Oilpack and compared this to the monthly management charge of $10,000 Redisland would have to have paid Nefcorp if the transaction had not taken place.

10.4.3.1 Net Present Value of the Consideration Paid for Oilpack

Valuation of the Consideration payable for Nefcorp’s interest in Oilpack
	Reference	Low($)	High ($)
Yearly Cashflows to Nefcorp Pty Ltd 120,000 120,000 Time Period (4 years) 4 years 4 years Discount Rate (%) Appendix 3 9.25% 10.03% Valuation of the Future Discounted Cash flows 380,115 386,668

The above table represents the net present value of consideration that Redisland will have to pay Nefcorp for its 49 percent stake.

10.4.3.2 Net Present Value of the Cost Savings of Acquiring Oilpack

Valuation of the current management charges from Nefcorp		Low ($)	High ($)
Yearly Cashflows to Nefcorp Pty Ltd 120,000 120,000 Time Period (years) Indefinite Discount Rate (%) Appendix 3 9.25% 10.03% Valuation of Future Discounted Cash flows 1,196,091 1,297,718

Redisland currently pays Nefcorp a monthly management charge of $10,000 for Nefcorp’s 49 percent share in Oilpack. There is no termination of this contact so we have made the assumption that the contract is for an indefinite time period.

The valuation above is the savings Redisland would realise if it acquired the remaining 49 percent share in Nefcorp.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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10.4.3.3 Increase in the Value of Redisland Pre-Transaction if Oilpack is Acquired

	Ref	Low($)	High ($)
Valuation of the current management charges from Nefcorp Valuation of the Consideration payable for Nefcorp’s interest in Oilpack The Additional Value of Future Cash flows gained by acquiring 100 percent of Oilpack Number of Redisland Shares Post Transaction 3.1 The value of future cash flows gained by acquiring 100 percent of Oilpack		1,196,091 1,297,718 (380,115) (386,668)
		815,976 911,050 163,201,789 shares 163,201,789 shares 0.50 cents 0.56 cents

If Redisland acquires 100 percent of Oilpack, Redisland will be required to pay Nefcorp a monthly consideration of $10,000 for 4 years. If Redisland acquires 100 percent of Oilpack, cost savings realised from not having to Pay Nefcorp a monthly charge will be realised. From our calculations above, we determined that the value of Redisland will increase by between $815,976 to $911,050 if 100 percent of Oilpack acquired. This represents an increase in value per a Redisland share (post Transaction) of between 0.50 cents to 0.56 cents a share.

10.5 Valuation of Consideration paid for Redisland and the value of acquiring 100 percent of Oilpack

Redisland will pay the vendors consideration in the form of 70,685,120 Redisland shares. Based on the share value range of $0.120 and $0.148, we have determined that the consideration payable by Redisland to be in the range of $8,482,214 to $10,461,398.

If Redisland acquires all of Oilpack the value per Redisland share will increase by between 0.50 cents to 0.56 cents a share. This will increase the value of the shares payable by Redisland to the Vendors in a range of $353,425 to $395,837.

Therefore we have valued the consideration payable by Redisland to the Vendors be between $8,835,639 to $10,857,235.

	Ref	Low($)	High ($)
Redisland Share Value Number of Share Issued to the Vendors Value of Redisland Share Issued Additional Value per a Redisland Share if 100 percent ownership of Oilpack is Acquired Number of Share Issued to the Vendors Additional Value gained if 100 percent ownership of Oilpack is Acquired Total Consideration Issued for AAI	10.3 0.120 0.148 3.1 70,685,120 70,685,120
	8,482,214 10,461,398 10.4 0.0050 0.0056 3.1 70,685,120 70,685,120
	353,425 395,837
	8,835,639 10,857,235

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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11. V AL U ATI ON OF AAI


		Forecast Y Edd	Forecast Y Edd	Unaudited Y Edd	Audited Y Edd	Audited Y Edd
	Ref	ear ne 30 June 2009 $	ear ne 30 June 2008 $	ear ne 30 June 2007 $	ear ne 30 June 2006 $	ear ne 30 June 2005 $
Profit from ordinary activities before related income tax expenses 7.3 11.1 Normalisation Adjustments to Reflect Non-Recurring Items Management Fees in relation to Peppercorn 11.2 Operating Cost of Peppercorn 11.2 Establishment Fees of Peppercorn 11.3 Establishment Costs of Peppercorn 11.3 Water Adjustment 11.4 Harvester Development 11.5 Project Establishment Costs for Victorian Olive Oil Project II 11.6 Establishment of a larger Processing Plant 11.7 Normalised Profit before tax Tax Rate (percent) Nominal tax on normalised profit Normalised Tax Rate from ordinary activities after tax		2,089,977 1,983,165 1,133,885 1,304,116 1,662,378 ~ ~ 381,245 508,245 508,245 ~ ~ (90,000) (120,000) (120,000) ~ ~ (471,000) ~ ~ ~ ~ 100,000 ~ ~ ~ ~ 310,000 ~ ~ ~ ~ 289,485 70,000 ~ ~ ~ ~ ~ 56,270 ~ ~ ~ ~ (58,000)
		~ ~ 519,730 458,245 386,515
		2,089,977 1,983,165 1,653,615 1,762,361 2,048,893 30 30 30 30 30 626,993 594,949 496,085 528,708 614,668
		1,462,984 1,388,216 1,157,530 1,233,653 1,434,225

As a result of the above analysis, we consider the Future Maintainable Earnings of AAI to be in the range of $1,300,000 to $1,400,000. The normalisation adjustments are discussed in the sections below.

11.1 Historic Numbers and Management Forecasts

Historic numbers are taken from the management accounts and the audited 2005 and 2006 financial accounts. We have obtained management’s forecasts for the 2008 to 2009 years and included these numbers in the above analysis.

The key assumptions noted per the forecasts were;

Increased processing fees resulting from tonnes per hectare being harvested increasing from 8.5 tonnes to 13 tonnes per a hectare for VOOP;
Increased processing fees resulting from tonnes per hectare being harvested increasing from 8.5 tonnes to 11 tonnes per a hectare for VOOP II;
Water expenses being $250,000 a year;
No defaults by investors on management or grower fees;

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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Finance and project administration cost to grow at a constant rate;
CPI increases to be 3 percent; and
No new projects to commence during the forecast years of 2008 and 2009.

We have considered the above assumptions in the model to be reasonable and have not made any normalisation adjustments to the 2008 and 2009 forecasts.

We have not undertaken a review of the forecasts in accordance with Australian Auditing Standard AUS 804 ‘The Audit of Prospective Financial Information’ and do not express an opinion on the reasonableness of the assumptions or their achievability. However, nothing has come to our attention as a result of our procedures to suggest that the assumptions on which the forecasts are based have not been prepared on a reasonable basis.

11.2 Peppercorn Management Fees

The Peppercorn project commenced operations in April 2007. AAI receives management fees for the management of the Peppercorn project. To normalise the earnings of AAI Limited, we have made a normalisation adjustment to factor in the event that Peppercorn project had been operating for full financial years of 2005, 2006 and 2007.

We have also included within the normalisation adjustment the additional cost require to operate Peppercorn. AAI’s management does not track Peppercorn’s direct operational costs and these costs are based on management’s best estimates.

11.3 Peppercorn Establishment Fees

During the 2007 financial year, AAI received establishment fees of $471,000 for establishing the Peppercorn project. To normalise the earnings of AAI Limited, we have made a normalisation adjustment to remove these once off establishment fee revenues from the 2007 profit.

We have also included within the normalisation adjustment the cost required to establish Peppercorn. AAI’s management does not track Peppercorn’s establishment fees and these costs are based on management’s best estimates.

11.4 Water Adjustment

Water prices within Victoria rose sharply due to a limited supply of water during the 2007 financial year.

Total water expenses of $667,368 were recognised in the 2007 financial year with $100,750 of rebates received from investors to compensate AAI for these unusually high water costs. This represented a net water cost of $566,618 incurred by AAI for the 2007 financial year.

Management forecasts have indicated that water usage is more likely to be closer to $250,000 going forward. We have noted that water usage in 2006 was only $134,000. To normalise the level of water expenses incurred in 2007, we have made a normalisation adjustment to adjust 2007 water expenses to match that of management’s project water expense of $250,000.

11.5 Harvester Development

AAI has expensed $289,485 in harvester development costs during the 2007 year and $70,000 in harvester development costs during 2006 year. As these development costs are not within the normal operations of an agribusiness investment scheme we have removed these costs from our normalised profit and loss.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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11.6 Establishment Cost for Victorian Olive Oil Project II

It was noted that there were establishment costs recognised for VOOP II in 2005 whilst the corresponding income had been recognised in 2004. We have normalised these establishment costs for VOOP II and removed these from the normalised profit and loss. We have not included the 2004 numbers in our valuation assessment.

11.7 Establishment of a Larger Processing Plant

In 2006 a larger processing plant was constructed resulting in increased financing and depreciation charges to AAI Limited. We have accordingly made an adjustment to reflect these costs within the 2005 normalised earnings.

12. C AP I T ALI S ATI ON M ULTIP LE

12.1 Factors in selecting a multiple

In determining an appropriate earnings multiple to apply to AAI, the following factors were considered

♦ economic factors (e.g. economic growth, inflation, interest rates) affecting the market in which the Business operates;
♦ strategic attractions of the Business – its particular strengths and weaknesses, market position of the Business, strength of competition and barriers to entry;
♦ stability and quality of earnings;
♦ the asset backing of the underlying Business;
♦ dependence on suppliers, customers and key personnel; and
♦ the structural and regulatory framework and share market conditions.

12.2 Comparable Company Analysis

We have analysed the after tax price to earnings multiples of publicly listed companies within Australia which are comparable in that they are subject to similar business risks to AAI Limited. These have been set out as below;

Company ASX Code Market Capitalisation ($’m)	As at 18 July 2007 Historical Average Forecast 2007 Forecasts 2008
Gunns Limited GNS 1,329 Great Southern Plantations Limited GTP 800 Timbercorp Limited TIM 622 Forest Enterprise Australia Limited FEA 271 TFS Corporation Limited TFC 197 Willmott Forests Limited WFL 98 Mean P/E	15.22 9.86 15.20 13.40 5.84 7.48 5.80 6.50 8.74 16.23 9.10 7.50 10.00 9.72 10.00 8.10 14.47 5.05 N/A N/A 9.77 10.92 9.80 5.40
	10.67 9.88 9.98 8.18

Source – Commsec as at 18 June 2007, historical average based on profitable years

Based on the above analysis, we consider the appropriate P/E multiple to be 9 to 10. A description of the above companies is set out in Appendix 2.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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12.3 Private Company Discount

Private companies are valued at a discount to comparable listed companies. The private company discount is observable from actual transactions. The BDO Stoy Hayward Private Company Price Index (“ PCPI ”) is a UK based research index which tracks the relationship between the current four month rolling average FTSE Non-Financials price earnings ratio and the price earnings ratios being paid on the sale of private companies. The PCPI tracks the discount between how public and private companies are being valued. This discount enables valuers to use valuation techniques which are only relevant to public companies and apply them to private companies in the same sector.

The PCPI is generally recognised as the most authoritative source on private company values by practitioners in the UK market, including the Inland Revenue and leading accounting firms.

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Source – BDO Stoy Hayward/Acquisitions Monthly Private Company Price Index

The PCPI/PEPI tracks the discount between how public and private companies are being valued. The most recent quarter results indicate that private companies are selling at a 6.3 percent discount when compared to public companies of a similar nature. However, the longer term trend would suggest that the private company discount is between 30 percent to 40 percent. As the PCPI/PEPI relates to the acquisition of controlling interests in private companies the PCPI/PEPI discount inherently incorporates a premium for control factor.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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12.4 Strategic Position of the Company

It has been noted in section 6.1 that there are several competitors to AAI that have larger operations in the Australian market. The presence of larger competitors and their ability to influence market pricing may affect the future earnings potential of AAI Limited. We have also considered recent taxation legislation that may have a significant impact on the future growth prospects of AAI. As a result, we have incorporated this into our adopted P/E multiple.

12.5 Stability and quality of earnings

AAI has stable earnings and revenue streams as noted per the historical numbers and the forecast.

12.6 Recent Transactions within the Agribusiness Industry

Within the agribusiness managed investment industry, we have noted only one recent transaction which is comparable to the Transaction.

On 11 May 2006, Futuris Corporation Limited ( “FCL” ) announced an unconditional offer to acquire all shares in Integrated Tree Cropping Limited. Integrated Tree Cropping (“ITC”) is Australia's largest manager of hardwood plantations with almost 120,000 hectares of plantation under management.

The consideration payable by FCL for ITC was valued by the Independent Expert Report for this transaction at between $1.37 to $1.43. Based on Integrated Tree Cropping Limited’s financial statements for June 2005, ITC’s earnings per share was 13.8 cents. On this basis, the acquisition price to earning ratio that FCL paid for ITC was between 9.93 to 10.36. This indicates that the acquisition price to earnings ratio paid by acquirers for companies involved in the agribusiness managed investment schemes is comparable to the price to earnings ratios as noted in section 12.2.

12.7 Multiple Adopted

In consideration of all the above factors which affect the after tax price to earning multiple we adopted a multiple of 5.85 to 7.5 to capitalise the FME.

Multiple Adopted	Low	High
Comparable company P/E	9	10
Discount made in relation to factors in points 12.3 to 12.6	(35%)	(25%)
Adjusted P/E	5.85	7.5

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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13. V AL U ATI ON OF AAI

13.1 Value of the Business

The value of AAI can be calculated by multiplying the normalised net income of AAI by the adopted multiple. The table below summarises the FME value of the business of AAI.

	AAI	AAI
Valuation	Low ($)	High ($)
Normalised net income (section 11) 1,300,000 1,400,000 Multiple (section 12.7) 5.85 7.5 FME value of AAI 7,605,000 10,500,000

13.2 Surplus Assets and Liabilities

We have noted that harvester research and technology costs of $359,485 have been expensed within AAI’s accounts as per section 11.5. We consider this to be a surplus asset as this technology is surplus to the core operations of the business. We believe that the realisable value of value of the technology assets is at least the cost of developing the technology assets. The technology assets will be able to yield future economic benefits to the company through greater efficiency and quality which are not separately distinguishable in AAI’s management accounts.

13.3 Value of AAI on a Future Maintainable Earnings Basis

	Ref	Low $	High $
Future Maintainable Earnings Capitalisation multiple Value of the Business 13.1 Surplus Technology Assets 13.2 Value of AAI		1,300,000 1,400,000 5.85 7.5
		7,605,000 10,500,000 359,485 359,485
		7,964,485 10,859,485

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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13.4 Net Tangible Asset Valuation of AAI

AAI Limited	Pro-forma Balance Sheet as agreed between the Vendors and Redisland		Low Realisable	High Realisable
	As at		As at	As at
	30 June 2007		30 June 2007	30 June 2007
	$	Reference	$	$
Assets Cash and cash equivalents Inventories Trade receivables Future Income Tax Benefit Property, plant and equipment Other TOTAL ASSETS Liabilities Interest bearing loans Payables Other current liabilities TOTAL LIABILITIES NET ASSETS	1,036,000 1,036,000 1,036,000 420,000 420,000 420,000 523,000 523,000 523,000 0 0 0 13,471,470 13.4.1 11,371,470 13,471,470 21,000 13.4.2 380,485 380,485
	15,471,470 13,730,955 15,830,955 4,649,644 4,649,644 4,649,644 80,000 80,000 80,000 3,014,858 3,014,858 3,014,858
	7,744,502 7,744,502 7,744,502
	7,726,968 5,986,453 8,086,453

The above balance sheet summarises the agreed pro-forma balance sheet between Redisland and the Vendors. We have noted that land within Property, Plant and Equipment has been valued by the directors of AAI at $11,000,000 compared to acquisition cost of the land being $4,421,288. Boyd-Law & Wood valuers, who performed a valuation of the property for bank financing purposes have confirmed to us that the directors’ valuation of the property is reasonable.

To determine the realisable value of the assets and liabilities Redisland is to acquire from the Vendors we have made the following adjustments.

13.4.1 The land has been valued at $8,900,000 by an external valuer for the purposes of a bank valuation. We have substituted the directors’ valuation of $11,000,000 for this lower value of $8,900,000 in a low scenario for property water and trees.
13.4.2 We have capitalised research and development expenses incurred during the last two years of $359,485 and reflected these capitalised assets in both the low and high scenarios.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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On the basis of the above adjustments, we consider the valuation of AAI on a net asset on a going concern basis to be in range of $5,986,453 to $8,086,453.

13.5 Valuation of AAI

Valuation
	Ref	Low($)	High ($)
Valuation of AAI on a Future Maintainable Earnings Basis 13.3 7,964,485 10,859,485 Valuation of AAI on a Net Assets on a Going Concern Basis 13.4 5,986,453 8,086,453

We have preferred the future maintainable earnings basis of valuing AAI. This valuation methodology was preferred as we are able to incorporate future growth prospects, business risks and the stability of future profits into the valuation of AAI.

14. I S THE TR ANS AC TI ON FAI R ?

The following table summaries our assessment of the value of the consideration to be paid by Redisland compared to the value of AAI.

Valuation
	Ref	Low($)	High ($)
Value of the Consideration 10.5 8,835,639 10,857,235 Valuation of AAI 13.5 7,964,485 10,859,485

As such our opinion is the Transaction is fair to Shareholders.

15. OTHE R CONS I DE R ATI ONS

15.1 Alternative Proposal

We are unaware of any alternative proposal that might offer the non-associated shareholders of Redisland a premium over the value ascribed to that resulting from the Transaction.

15.2 Implications of the Proposal not being approved

If the Transaction is not approved, Redisland will continue to market and distribute olive oil within Australia and overseas. Redisland will also be liable for a $75,000 break fee.

15.3 Premium For Control

ASIC Policy Statement 74 requires that the expert give an opinion as to whether the proposed Transaction will result in the Company receiving any premium for control. We do not consider that the Transaction will result in a premium for control being paid. As the consideration payable is comparable to the value of the asset being acquired no premium for control will be received.

16. I S THE TR ANS AC TI ON RE AS ON ABLE ?

In accordance with our basis of evaluation (Section 5.2) we have investigated other significant factors to which Redisland shareholders might give consideration prior to approving the Transaction.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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We have assessed that in all cases the advantages and disadvantages of rejecting the Transaction are the inverse of accepting the Transaction. Thus for simplicity of evaluation of the Transaction we have set out the significant factors only in the context of accepting the Transaction. The matters we have considered are outlined below.

16.1 Advantages of Accepting the Transaction

16.1.1 Acquisition of new businesses with positive cash flow and profits

The acquisition of AAI will expose Redisland to new opportunities it did not have exposure to before the Transaction. The introduction of the profitable AAI business unit will introduce positive cash flows and profits to Redisland’s results. As a result of introducing these positive cash flows, Redisland’s cash flow situation will improve. If these cash flows were not available, Redisland may have to initiate further fund raising exercises through the issue of equity, which would correspondingly dilute shareholder interests further.

16.1.2 Increased Attractiveness of Redisland Shares

Investors are more favourable to companies that are profit making than loss making, as profitable companies are able to provide investors with a return on their capital invested and dividend opportunities. Whilst the combined entities for 2007 year are not profitable it more likely the combined entities will be more profitable going forward than if Redisland continued as a separate entity.

16.1.3 Increased Net Assets from the Transaction

The Transaction will result in an increased net asset position of $7,726,968 based on the pro-forma balance sheet which indicates the assets that are to be transferred between Redisland and the Vendors. This includes a cash balance of $1,036,000. Redisland will be able to use these assets as security for additional debt facilities. The cash assets that form a part of the Transaction can be used to fund the ongoing working capital requirements of Redisland.

16.1.4 The Company is able to acquire AAI with no outflow of cash

The acquisition of AAI is based entirely on the issue of shares in Redisland to the Vendors. As a result, Redisland will not have to incur any further debt liabilities or reduce cash balances to acquire AAI.

As a result, it is an advantage of the Transaction to issue shares directly to the Vendors as this would avoid the uncertainty, costs and the time involved in a capital raising exercise.

16.1.5 Utilisation of Redisland’s Tax losses

The AAI is a profitable and cash flow positive group. As a result, AAI may be able to potentially utilise Redisland’s tax losses which have been accumulated in previous years. AAI post transaction may be able to utilise these losses if it satisfies the same business test as the continuity of ownership test will not be met.

16.1.6 Introduction of Olive Oil Production Expertise

The management of AAI have experience in olive oil orchards and olive oil processing. This has been demonstrated through the launch of AAI have also invested in improving the efficiency and effectiveness of their harvesting equipment. The introduction of this expertise will aid Redisland in the future should Redisland choose to be involved in the production of olive oil.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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16.1.7 Relocation of Facilities to a more competitive position

Redisland will relocate its bottling facilities and warehousing facilities to Melbourne. The potential benefits are as follows;

lower transport costs to America and Asia; and
closer access to Victorian olive orchards leading to lower transport costs and lead times; and
significant freight savings from being closer to the major Australian population centres and customers.

Management estimate these costs savings will be in the vicinity of $2.25 million over the next three years.

16.1.8 Increased debt facilities

As apart of the transaction, the combined entities will secure $2,000,000 to $3,000,000 in additional debt facilities. This is advantageous as in the future, Redisland has the ability access additional funds through debt facilities as opposed to issuing equity and diluting existing shareholder’s equity.

16.1.9 Vertical Integration

Redisland has previously stated that it intended to pursue vertical integration opportunities given the right industry and market conditions. The Transaction provides the opportunity for Redisland to source consistent and efficiently produced olive oil through AAI. This advantage will lead to improved gross margins and therefore earnings per share and cash flow.

16.1.10 Secured Supply Streams

Redisland will source a significant portion of olive oil requirements from AAI post Transaction. As a result of the Transaction Redisland will enter into an olive oil offtake agreement with the groves managed by AAI. This offtake agreement will provide high quality oil to Redisland at a consistent and competitive price hence making Redisland less susceptible to fluctuations in market price of olive oil.

16.2 Disadvantages of Accepting the Transaction

16.2.1 Dilution of the interests of existing shareholders

If the Transaction is approved, the Vendors will be issued 70,685,120 shares. The Vendors will have a significant interest in the Company as they would together have an interest of 43.3 percent of the Company’s issued capital (section 3.1).

16.2.2 Adding another focus to Redisland’s existing focus on marketing and branding.

Redisland initial focus was the marketing and distribution of olive oil within Australian and to foreign markets. AAI is a managed investment scheme within the olive oil industry. Whilst the two businesses are involved in segments of the olive oil industry they are distinctly different in the way which their business models work. Shareholders of Redisland may not want to be exposed to the management investment scheme business and the additional risks involved in growing and marketing fruit. Instead

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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shareholders may want ownership in a business that is solely dedicated to the marketing and distribution of olive oil.

16.2.3 Acquisition of a business with uncertain legislative taxation changes

As noted in section 8.3, there are certain legislative changes that have taken place in regards to the taxation legislation in regards to non-forestry agribusiness investment schemes. If the taxation deductibility of non-forestry agribusiness investments schemes is disallowed, it has the potential to make future projects offered by AAI less attractive and may reduce the growth prospects of AAI.

However, the investment projects developed by AAI have focussed principally on commercial returns and positive cashflows instead of an emphasis on short term tax benefits. For this reason, AAI’s activities are less likely to be disadvantaged by the current tax deductibility issues of non-forestry agribusiness investment schemes.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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17. P RO - FORM A UN AUDI TE D CONS OLI D ATE D B AL AN CE S HE E T OF RE DI S L AN D P OS T TR ANS AC TI ON


	Unaudited Redisland As at 30 June 2007 $	Pro-forma AAI Consolidation at	Pro-forma Consolidation as at 30 June 2007 $
		Settlement
		$
Current Assets Cash Receivables Inventory Prepayments Total Current Assets Non Current Assets Goodwill on consolidation Property Plant and Equipment Total Non Current Assets TOTAL ASSETS Current Liabilities Trade and other payables Deferred Income Loans/Debt facilities Provisions Total Current Liabilities Non Current Liabilities Deferred Income Loans/Debt facilities Total Non Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued Capital Reserves Accumulated Profits (Losses) Minority Interests NET EQUITY	315,311 1,997,727 2,768,804 270,984	1,968,265 523,000 420,000 21,000	2,283,576 2,520,727 3,188,804 291,984
	5,352,826	2,932,265	8,285,091
	~ 517,535	~ 13,471,470	2,875,800 13,989,005
	517,535	13,471,470	16,864,805

	5,870,361	16,403,735	25,149,896
	1,916,777 ~ 1,044,667 90,522	255,000 1,135,964 501,633 96,000	2,171,777 1,135,964 1,666,300 186,522
	3,051,966	1,988,597	5,160,563
	~ 209,855	1,607,894 5,080,276	1,607,894 5,650,131
	209,855	6,688,170	7,258,025

	3,261,821	8,676,767	12,418,588

	2,608,540	7,726,968	12,731,308
	12,412,727 148,899 (10,044,692) 91,606	850 6,657,750 1,068,368 ~	23,015,495 148,899 (10,433,086) ~
	2,608,540	7,726,968	12,731,308

Source: Redisland Management

The consolidated Redisland balances post Transaction have been inserted above. It should be noted that management have valued the consideration payable for AAI at $10,602,768 which falls within our range of the value of the consideration payable for AAI. At a valuation of $10,602,768, the goodwill payable by Redisland for AAI is $2,875,800.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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18. CONCLUS I ON

We have considered the terms of the Transaction as outlined in the body of this report and have concluded that the Transaction is fair and reasonable to the non-associated shareholders.

19. S OURCE S OF I NFORM ATI ON

This report has been based on the following information:

♦ financial statements of Redisland Limited for the financial year ended 30 June 2006;
♦ financial statements of Redisland Limited for the half year ended 31 December 2006;
♦ financial and budgetary information in relation to Australian Agricultural Investment Limited;
♦ further financial and budget information to be provided by the directors;
♦ the draft Notice of Meeting and Explanatory Memorandum;
♦ discussions with the directors and management of Redisland and other information provided by them;
♦ Department of Primary Industries – Victorian Olive Oil Industry Overview; and
♦ information in the public domain.

20. I NDE PE NDE NCE

BDO Consultants (WA) Pty Ltd is entitled to receive a fee of $30,000 (excluding GST and reimbursement of out of pocket expenses). Except for this fee, BDO Consultants (WA) Pty Ltd has not received and will not receive any pecuniary or other benefit whether direct or indirect in connection with the preparation of this report.

BDO Consultants (WA) Pty Ltd has been indemnified by Redisland in respect of any claim arising from BDO Consultants (WA) Pty Ltd’s reliance on information provided by the Redisland, including the non provision of material information, in relation to the preparation of this report.

Prior to accepting this engagement BDO Consultants (WA) Pty Ltd considered its independence with respect to Redisland, AAI and any of their respective associates with reference to ASIC Practice Note 42 “Independence of Expert’s Reports”. In BDO Consultants (WA) Pty Ltd’s opinion it is independent of Redisland, AAI and their respective associates.

Neither the two signatories to this report nor BDO Consultants (WA) Pty Ltd, have had within the past two years any professional relationship with Redisland, AAI, or their associates, other than in connection with the preparation of this report.

A draft of this report was provided to Redisland and its advisors for confirmation of the factual accuracy of its contents. No significant changes were made to this report as a result of this review.

21. QU ALI FI C ATI ONS

BDO Consultants (WA) Pty Ltd has extensive experience in the provision of corporate finance advice, particularly in respect of takeovers, mergers and acquisitions.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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BDO Consultants (WA) Pty Ltd holds an Australian Financial Services Licence issued by the Australian Securities and Investment Commission for giving expert reports pursuant to the Listing rules of the ASX and the Corporations Act.

The persons specifically involved in preparing and reviewing this report were Sherif Andrawes, Matt Giles and Chu Kwa of BDO Consultants (WA) Pty Ltd. They have significant experience in the preparation of independent expert reports, valuations and mergers and acquisitions advice across a wide range of industries in Australia.

22. DI S CL AI M E RS AND CON S E NTS

This report has been prepared at the request of Redisland for inclusion in the Explanatory Memorandum which will be sent to all Redisland Shareholders. Redisland engaged BDO Consultants (WA) Pty Ltd to prepare an independent expert’s report to consider whether or not the acquisition of AAI is fair and reasonable to non-associated shareholders.

BDO Consultants (WA) Pty Ltd hereby consents to this report accompanying the above Explanatory Memorandum. Apart from such use, neither the whole nor any part of this report, nor any reference thereto may be included in or with, or attached to any document, circular resolution, statement or letter without the prior written consent of BDO Consultants (WA) Pty Ltd.

BDO Consultants (WA) Pty Ltd takes no responsibility for the contents of the Explanatory Memorandum other than this report.

BDO Consultants (WA) Pty Ltd has not independently verified the information and explanations supplied to us, nor has it conducted anything in the nature of an audit of Redisland or AAI. However, we have no reason to believe that any of the information or explanations so supplied are false or that material information has been withheld.

The statements and opinions included in this report are given in good faith and in the belief that they are not false, misleading or incomplete.

The terms of this engagement are such that BDO Consultants (WA) Pty Ltd has no obligation to update this report for events occurring subsequent to the date of this report.

Yours faithfully

BDO CONSULTANTS (WA) PTY LTD

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Sherif Andrawes Director

Matt Giles Director

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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Appendix 1 – Glossary of Terms

Reference	Definition
AAI The Act ASIC ASX ATO BDO The Company DCF EBIT EBITDA FMD FME Grimsey IPO Oilpack PCPI Nefcorp NTA Redisland ROC The Transaction Our Report Vendors VOOP VOOP II VWAP Shareholders	Australian Agricultural Investment Limited The Corporations Act Australian Securities and Investments Commission ASX Limited Australian Taxation Office BDO Consultants (WA) Pty Ltd Redisland Australia Limited Discounted Future Cash Flows Earnings before interest and tax Earnings before interest, tax, depreciation and amortisation Future Maintainable Dividends Future Maintainable Earnings Grimsey Pty Ltd Initial Public Offering Oilpack Pty Ltd BDO Stoy Hayward Private Company Price Index Nefcorp Pty Ltd Net Tangible Assets Redisland Australia Limited Return of Capital Redisland will acquire 100 percent of the shares in AAI Limited for a consideration that comprises the issue of 70,685,120 Redisland shares to the current owners of AAI Limited This Independent Expert’s Report prepared by BDO The current owners of AAI Victorian Olive Oil Project Victorian Olive Oil Project II Variable Weighted Average Price Shareholders of Redisland not associated with the Vendors

Reference

Definition

AAI
The Act
ASIC
ASX
ATO
BDO
The Company
DCF
EBIT
EBITDA
FMD
FME
Grimsey
IPO
Oilpack
PCPI
Nefcorp
NTA
Redisland
ROC
The Transaction
Our Report
Vendors
VOOP
VOOP II
VWAP
Shareholders

Australian Agricultural Investment Limited
The Corporations Act
Australian Securities and Investments Commission
ASX Limited
Australian Taxation Office
BDO Consultants (WA) Pty Ltd
Redisland Australia Limited
Discounted Future Cash Flows
Earnings before interest and tax
Earnings before interest, tax, depreciation and amortisation
Future Maintainable Dividends
Future Maintainable Earnings
Grimsey Pty Ltd
Initial Public Offering
Oilpack Pty Ltd
BDO Stoy Hayward Private Company Price Index
Nefcorp Pty Ltd
Net Tangible Assets
Redisland Australia Limited
Return of Capital
Redisland will acquire 100 percent of the shares in AAI Limited for a consideration
that comprises the issue of 70,685,120 Redisland shares to the current owners of AAI
Limited
This Independent Expert’s Report prepared by BDO
The current owners of AAI
Victorian Olive Oil Project
Victorian Olive Oil Project II
Variable Weighted Average Price
Shareholders of Redisland not associated with the Vendors

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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Appendix 2 – Comparable Companies

Great Southern Plantations Limited

Great Southern Plantations Limited ( “GTP” ) is an agribusiness investment manager involved in plantation forestry and horticulture, offering a range of tailored investments for investors/growers. Harvesting of GTP’s timber plantations commenced in 2004.

GTP’s growth has mainly come from renewed interest in agribusiness Managed Investment Schemes (MIS). With critical product rulings from the ATO, GTP shares offer exposure to management income from plantation and horticulture MIS revenues. GTP’s operations include the purchase of land, the marketing of the projects, planting and ongoing management. GTP also provides finance for investment in projects through its wholly owned subsidiary. GTP’s strategy is to expand its portfolio of tax-effective projects to include other agricultural products. Management has indicated that they will grow plantations up to approximately 350,000 hectares per annum and diversify into new forestry and other projects including beef cattle.

Timbercorp Limited

Timbercorp Limited (formerly Timbercorp Eucalypts Limited) is an agribusiness investment company using managed investment schemes. The company’s activities include the establishment, financing and marketing of projects through to harvesting, processing and endsales for forestry and horticultural products like almonds, olives, mangoes and grapes.

TIM offers investments including timber, olive and almond projects or a combination of the three. TIM continues to diversify from forestry into other shorter-life horticultural projects. It jointly bidded for Chiquita in 2007.

Forest Enterprise Australia Limited

Forest Enterprises Australia ( “FEA” ) is a vertically integrated forestry and forestry products company. It has plantations in TAS, NSW and QLD. FEA is involved in all aspects of forestry, from MIS plantations involving establishment, management, harvesting and finance to log trading, timber milling and wood chipping. The company has more than 32,000 hectares of hardwood plantations under management

FEA's strategy is focused on becoming a fully integrated plantation forestry company. FEA is involved in all aspects of forestry, from MIS plantations involving establishment, management, harvesting and finance to timber milling and wood chipping. FEA has a purpose built small log sawmill based on Finnish HewSaw technology at Bell Bay in Northern Tasmania. The sawmill has a capacity of 200,000m3 pa and is located near a deep-water port, suitable for export of milled products. FEA Timber has recently installed two on-site kilns, automatic handling equipment and a moulder to allow it to produce planed and dressed boards entirely on-site. The finished and packed plantation grown hardwood timber product is marketed as EcoAsh(tm) and is being retailed through one of Australia’s largest hardware and building products businesses.

Willmott Forests Limited

Willmott Forests Limited ( “WFL” ) is a forestry investment and management company involved in the marketing of afforestation investments, establishment and maintenance of plantations on behalf of growers and the production of landscape and structural timber products. In 2003, WFL became a fully integrated forestry company with the acquisition and development of downstream sawmill processing facilities.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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WFL is a vertically integrated forestry company with diversified revenue streams from Afforestation Managed Investment Schemes (AMIS) and timber processing operations. The company is pursuing growth in the retail, wholesale and direct investment market. For the retail market, WFL aims to increase investment in its projects via expansion of its dealer network throughout Australia and introduction of new products. For the wholesale market, which includes superannuation funds and other institutions, WFL offers the establishment and/or management of plantations specially tailored for their specific investment requirements. WFL will continue to pursue its focused approach of increasing profitability through the issue of offers seeking subscriptions to its softwood managed investment products and continued trading of its softwood processing operations. The company is also pursuing growth through acquisition and is looking for opportunities to acquire mature forests. In a strategic move to increase annual plantation development WFL has acquired land in the Murray Valley, which is located in close proximity to the Bombala region.

Gunns Limited

Gunns Limited ( “GNS” ) is a Tasmanian based, fully integrated hardwood forest products company and is Australia’s largest forestry company. Operations are based on state government owned hardwood forests and company and third party owned plantations. GNS is one of the largest suppliers of hardwood woodchip to Asian pulp mills with Japanese mills accounting for over 60% of all woodchip exports. Other activities include swan timber and veneers, local hardware merchandising and construction and managed investment schemes involved in forestry and viticulture sectors.

Gunns strategy is focused on growth via acquisitions and the development of export markets for the company’s products. Assets include over 125,000 acres of land with 49,000 acres of plantation forests and three mills. In addition to hardwood woodchip exports growth opportunities include veneer and rotary peeling based on the Tasmanian timber resource, which has a sustainable yield of some 8 Mt pa.

TFS Corporation Limited

TFS Corporation ( “TFS” ) is involved in the production of Indian Sandalwood, an exotic tropical hardwood. The company is involved in the whole process of plantation growing, including grower financing, land leasing and managed investment schemes (MIS). TFS has in excess of 500 hectares under management, on behalf of over 460 investors (growers) which are located in the Ord River Irrigation Area (ORIA) in northern Western Australia.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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Appendix 3 - Assessment of the Appropriate Discount Rate

Determining the correct discount rate, or cost of capital, for a business requires the identification and consideration of a number of factors that affect the returns and risks of a business, as well as the application of widely accepted methodologies for determining the returns of a business.

The discount rate applied to the forecast cash flows from a business represents the financial return that will be before an investor would be prepared to acquire (or invest in) the business.

The capital asset pricing model (“ CAPM ”) is commonly used in determining the market rates of return for equity type investments and project evaluations. In determining a business’ weighted average cost of capital (“ WACC ”) the CAPM results are combined with the cost of debt funding. WACC represents the return required on the business, whilst CAPM provides the required return on an equity investment.

Cost of Equity and Capital Asset Pricing Model

CAPM is based on the theory that a rational investor would price an investment so that the expected return is equal to the risk free rate of return plus an appropriate premium for risk. CAPM assumes that there is a positive relationship between risk and return, that is, investors are risk averse and demand a higher return for accepting a higher level of risk.

CAPM calculates the cost of equity and is calculated as follows:

CAPM
Ke = Rf+βx (Rm– Rf) Where: Ke = expected equity investment return or cost of equity in nominal terms Rf = risk free rate of return Rm = expected market return Rm– Rf = market risk premium β = equity beta

The individual components of CAPM are discussed below.

Risk Free Rate (Rf)

The risk free rate is normally approximated by reference to a long term government bond with a maturity equivalent to the timeframe over which the returns from the assets are expected to be received. Having regard to the period of the operations we have used the current yield to maturity on the 5 year Commonwealth Government Bond which was 6.21% per annum as at 30 July 2007.

Market Risk Premium (Rm – Rf)

The market risk premium represents the additional return that investors expect from an investment in a well-diversified portfolio of assets. It is common to use a historical risk premium, as expectations are not observable in practice.

For the purpose of this report we have adopted a market risk premium of between 6% and 8%.

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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Equity Beta

Beta is a measure of the expected correlation of an investment’s return over and above the risk free rate, relative to the return over and above the risk free rate of the market as a whole. A beta greater than one implies that an investment’s return will outperform the market’s average return in a rising market and underperform the market’s average return in a falling market. On the other hand, a beta less than one implies that the business’ performance compared to that of a business whose beta is greater than one will provide an inverse relationship in terms of the market’s average return.

Equity betas are normally either an historical beta or an adjusted beta. The historical beta is obtained from the linear regression of a stock’s historical data and is based on the observed relationship between the security’s return and the returns on an index. An adjusted beta is calculated based on the assumption that the relative risk of the past will continue into the future, and hence derived from the historical data. It is then modified by the assumption that a stock will move towards the market over time, taking into consideration the industry risk factors which make the operating risk of the investment project greater or less risky than comparable listed companies when assessing the equity beta for an investment project.

Cost of Equity

On this basis we have assessed the cost of equity to be:

Input	Value Adopted	Value Adopted
	Low	High
Risk free rate of return 6.21% 6.21% Equity market risk premium 6.00% 8.00% Beta 0.61 0.61 Cost of Equity 9.87 11.09

Source: Beta as per Commsec, 30 July 2007

Weighted Average Cost of Capital

The WACC represents the market return required on the total assets of the undertaking by debt and equity providers. WACC is used to assess the appropriate commercial rate of return on the capital invested in the business, acknowledging that normally funds invested consist of a mixture of debt and equity funds. Accordingly the discount rate should reflect the proportionate levels of debt and equity relative to the level of security and risk attributable to the investment.

In calculating WACC there are a number of different formulae which are based on the definition of cash flows (ie, pre-tax or post-tax), the treatment of the tax benefit arising through the deductibility of interest expenses (included in either the cash flow or discount rate), and the manner and extent to which they adjust for the effects of dividend imputation. The commonly used WACC formula is the post-tax WACC, without adjustment for dividend imputation, which is detailed in the below table.

CAPM WACC = E Ke + D Kd (1– t) E+D D+E

BDO CONSULTANTS (WA) PTY LTD

The Directors Redisland Australia Limited

6 August 2007

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Where:

Ke = expected return or discount rate on equity Kd = interest rate on debt (pre-tax) T = corporate tax rate E = market value of equity D = market value of debt (1- t) = tax adjustment

Gearing

Before WACC can be determined, the proportion of funding provided by debt and equity (ie, gearing ratio) must be determined. The gearing ratio adopted should represent the level of debt that the asset can reasonably sustain (ie, the higher the expected volatility of cash flows, the lower the debt levels which can be supported). The optimum level of gearing will differentiate between assets and will include:

♦ the variability in earnings streams;
♦ working capital requirements;
♦ the level of investment in tangible assets; and
♦ the nature and risk profile of the tangible assets.

We have a adopted the same level of gearing as per Redisland’s balance sheet at the 30 June 2007. This level of gearing was a gross debt to equity ratio of 35.6 percent

Cost of Debt

A cost of debt of 11.6% has been used as per Redisland’s bank debtor’s financing facilities.

Calculation of WACC

Based on the above inputs we have calculated the WACC to be between 9.25% and 10.03%.

Input	Value Adopted	Value Adopted
	Low	High
Cost of equity 9.87% 11.09% Cost of debt 11.6% 11.6% Corporate tax rate 30% 30% Proportion of debt (D/E+D) 35.6% 35.6% Proportion of equity (E/E+D) 64.4% 64.4% WACC (rounded) 9.25% 10.03%

BDO CONSULTANTS (WA) PTY LTD

AI assistant

AUSTRALIAN AGRICULTURAL PROJECTS LIMITED — Proxy Solicitation & Information Statement 2007

64275_rns_2007-08-06_63ad17bd-741a-45d2-90ae-2c5311c6f455.pdf

MERGER WITH AUSTRALIAN AGRICULTURAL INVESTMENTS LIMITED (“AAI”)

N O T I C E O F G E N E R A L M E E T I N G E X P L A N A T O R Y M E M O R A N D U M

P R O X Y F O R M

Date of Meeting

Time of Meeting

Place of Meeting

N O T I C E O F G E N E R A L M E E T I N G

AGENDA

SPECIAL BUSINESS

Resolution 1 - Issue of Shares to The AAI Shareholders

Resolution 2 - Election of Mr Paul Challis as a Director

Resolution 3 - Election of Mr Phillip Grimsey as a Director

DATED THIS 7[th] DAY OF AUGUST 2007 BY ORDER OF THE BOARD

Kim Hogg Company Secretary

NOTES:

E X P L A N A T O R Y S T A T E M E N T

1. GENERAL INFORMATION

1.1 Background

1.2 Consideration for the Acquisition

1.3 Election of Directors

2. THE RESOLUTIONS

2.1 Resolution 1 – Issue of Shares to The AAI Shareholders

2.1.1 Section 611 of the Corporations Act

Item 7 of Section 611 of the Corporations Act

Identity of persons who will hold a relevant interest in Shares to be issued.

History of AAI

Voting power of The AAI Shareholders

Voting power of The AAI Shareholders’ associates

Relevant interests in Shares to be issued.

The AAI Shareholders’ intentions

(d) Transfer of Property

(e) Redeploy Fixed Assets

(f)

(g) Directors

2.1.2 Listing Rule 7.1 of ASX Listing Rules

2.1.3 Listing Rule 11.1.2 of ASX Listing Rules

2.1.4 Directors’ Recommendations

2.1.5 Independent Expert’s Report

2.2 Resolution 2 – Election of Mr Paul Challis as a Director

2.3 Resolution 3 – Election of Mr Phillip Grimsey as a Director

3. ENQUIRIES

G L O S S A R Y

A N E X U R E A

THE AAI SHAREHOLDERS

P R O X Y F O R M

Appointment of Proxy

Voting directions to your proxy – please mark to indicate your directions

Appointing a second Proxy

PLEASE SIGN HERE

HOW TO COMPLETE THE PROXY FORM

1. Appointment of a Proxy

2. Votes on Items of Business

3. Appointment of a Second Proxy

4.

Signing Instructions

Lodgement of a Proxy

FINANCIAL SERVICES GUIDE

AND

Financial Services Guide

Financial Services Guide

Information about us

Financial services we are licensed to provide

General Financial Product Advice

Fees, Commissions and Other Benefits that we may receive

Remuneration or other benefits received by our employees

BDO CONSULTANTS (WA) PTY LIMITED

Financial Services Guide

Referrals

Complaints resolution

Internal complaints resolution process

Referral to External Dispute Resolution Scheme

Contact details

REDISLAND AUSTRALIA LIMITED

INDEPENDENT EXPERT’S REPORT

TABLE OF CONTENTS

INDEPENDENT EXPERT'S REPORT – ACQUISITION OF AUSTRALIAN AGRICULTURAL INVESTMENTS LIMITED

1. I NTRODUC TI ON

AUSTRALIAN AGRICULTURAL PROJECTS LIMITED Proxy Solicitation & Information Statement 2007