ELDERS LIMITED - Capital/Financing Update 2009

Elders Limited Prospectus ABN 34 004 336 636

==> picture [360 x 40] intentionally omitted <==

==> picture [252 x 56] intentionally omitted <==

Prospectus

For the offer of New Shares to raise up to $550 million, including the Share Purchase Plan to raise up to $150 million, at the Offer Price of $0.15 per New Share.

This is an important document and requires your immediate attention.

You should read this Prospectus in its entirety before deciding whether to take up New Shares in the Equity Raising. If you do not understand any part of this Prospectus, or are in doubt as to how to deal with it, you should consult your stockbroker, solicitor, accountant and/or other professional financial adviser immediately. THIS DOCUMENT IS NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS.

Joint Lead Managers and Underwriters

==> picture [105 x 42] intentionally omitted <==

==> picture [99 x 39] intentionally omitted <==

Contents
Important Information
Letter from the Chairman	2
Summaryof the EquityRaisingand KeyDates	3
Investment Highlights	4
SummaryRisk Factors	6
1.Questions and Answers	9
2. EquityRaisingDetails	14
3. Actions Required of Eligible Shareholders	20
4. Overview of Elders and its Operations	23
5. Historical Financial Information	35
6. Forecast Financial Information	53
7. Risk Factors	64
8. Independent Accountant’s Report	71
9. Additional Information	77
10. Glossary	93
Corporate Directory

Important Information

This prospectus (“Prospectus”) relates to the Elders Limited ABN 34 004 336 636 (“Elders” and the “Company”) share purchase plan (“Share Purchase Plan” and “SPP”) of up to 1,000 million fully paid ordinary share in Elders (“New Shares”) and a placement of approximately 2,667 million New Shares to Institutional Investors (“Conditional Placement” and, together with the Share Purchase Plan, the “Equity Raising”). As described in Section 2, each of the SPP and the Conditional Placement is conditional on Shareholder approval and Elders will not issue New Shares under the SPP if the Conditional Placement is not approved by Shareholders and will not issue New Shares under the Conditional Placement if the SPP is not approved by Shareholders. This Prospectus is dated 4 September 2009 and a copy was lodged with the Australian Securities and Investments Commission (“ASIC”) on that date. The expiry date of this Prospectus is 3 October 2010. No New Shares will be issued on the basis of this Prospectus after that expiry date.

Elders has applied or will apply for quotation of the New Shares on the Australian Securities Exchange (“ASX”). Neither ASIC nor ASX takes any responsibility for the contents of this Prospectus nor for the merits of the investment to which this Prospectus relates.

This Prospectus is important and requires your immediate attention. You should read the entire document carefully before deciding whether to invest in New Shares. In particular you should consider the risk factors that could affect the performance of Elders or the value of an investment in Elders, some of which are outlined in Section 7. However, the information provided in this Prospectus is not investment advice or financial product advice and has been prepared without taking into account your individual investment objectives, financial situation, tax position or particular needs. Before deciding whether to apply for New Shares, you should consider whether they are a suitable investment for you in light of your own investment objectives, financial situation, tax position and particular needs and having regard to the merits and risks involved. If, after reading this Prospectus, you have any questions about the Equity Raising you should contact your stockbroker, solicitor, accountant and/or other professional financial adviser.

The past performance of the price of fully paid ordinary shares in Elders (“Elders Shares” or “Shares”) or other securities in Elders provides no guidance or indication as to how the price of Elders Shares, including New Shares, will perform in the future.

The right to participate in the SPP is not transferable. Please carefully read and follow the instructions in Section 3 of this Prospectus and on the accompanying Application Form when subscribing for New Shares.

Prospectus availability

Institutional Investors to whom New Shares are offered and Eligible Shareholders will receive a copy of this Prospectus together, in the case of Eligible Shareholders, with an accompanying personalised Application Form. Institutional Investors participating in the Conditional Placement will be asked to complete confirmation letters provided to them by the Joint Lead Managers. Eligible Shareholders and other eligible investors in Australia and New Zealand can obtain a copy this Prospectus during the Offer Period (free of charge) from Elders’ website at www.elders.com.au or by calling the Elders Shareholder Information Line on 1300 022 710 (within Australia) or +61 3 9938 4347 (outside Australia). Eligible Shareholders and other eligible investors who access the electronic version of this Prospectus on Elders’ website should ensure they download and read the entire Prospectus. The electronic version of the Prospectus on Elders’ website will not include an Application Form.

Any references to documents located on Elders’ website are provided for convenience only, and none of the documents or other information on Elders’ website are incorporated by reference into this Prospectus.

Australia and New Zealand

This Prospectus contains an offer to Eligible Shareholders in Australia or New Zealand, and to certain Institutional Investors, of continuously quoted securities (as that term is defined in the Corporations Act 2001 (Cth) (“Corporations Act”) and has been prepared in accordance with section 713 of the Corporations Act. This Prospectus is not a New Zealand prospectus or an investment statement and has not been registered, filed with or approved by any New Zealand regulatory authority or under or in accordance with the Securities Act 1978 (New Zealand) or any other relevant law in New Zealand. This Prospectus may not contain all of the information that an investment statement or a prospectus under New Zealand law is required to contain.

Securities are not being offered or sold to the public within New Zealand and no member of the public in New Zealand may accept any offer made under this Prospectus, other than persons, being Shareholders and Institutional Investors, to whom it is permissible for any offer under this Prospectus to be made in reliance on an exemption from the New Zealand Securities Act 1978 (Securities Act (Overseas Companies) Exemption Notice 2002).

Other jurisdictions

This Prospectus does not constitute an offer to sell or the solicitation of any offer to buy, any securities in the US or to a US Person (or to any person acting for the account or benefit of a US Person), or in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation.

No action has been taken to register or qualify the Conditional Placement, the SPP or the New Shares, or otherwise permit a public offering of the New Shares, in any jurisdiction other than Australia or New Zealand.

The distribution of this Prospectus (including an electronic copy) outside Australia may be restricted by law. If you come into possession of this Prospectus, you should observe any such restrictions and should seek your own advice on such restrictions. Any failure to comply with such restrictions may contravene applicable securities laws. Elders disclaims all liability to such persons. By returning a completed Application Form, making a payment by BPAY[®] or completing a confirmation letter, you will be taken to have given the representations and warranties set out in Section 9.15 and represented and warranted that there has been no breach of such laws and that all necessary approvals and consents have been obtained.

The New Shares have not been, and will not be, registered under the US Securities Act, or the securities laws of any state or other jurisdiction in the United States. The New Shares may not be offered, sold or resold in the United States or to, or for the account or benefit of, a US Person, except in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws. The Share Purchase Plan is not being extended to any Shareholder outside Australia and New Zealand. Neither this Prospectus, nor the accompanying Application Form may be distributed to, or relied upon by, persons in the United States or who are, or are acting for the account or benefit of, US Persons.

Future performance and forward-looking statements

The pro forma financial information provided in this Prospectus is for illustrative purposes only and does not represent a forecast or expectation by Elders as to its future financial condition and/or performance. In particular, certain pro forma financial information and certain other qualitative assessments by Elders in this Prospectus assume that proceeds of the Conditional Placement, the underwritten proceeds of the Share Purchase Plan and the consideration for the sale and joint venture transactions described in Section 9.5.2 (“QBE Insurance Transaction”), the sale transaction described in Section 9.5.3 (“Timber Sale”) and the proposed sale of Elders’ interest in Hi-Fert Pty Ltd (“Hi-Fert”) were received by Elders on 30 June 2009, including the pro forma net debt calculation and Elders’ post-Equity Raising funding profile (including bank covenants headroom and reduction in refinancing risk). In addition, given the nature and magnitude of recent transactions undertaken by Elders, and of transactions proposed to be undertaken by Elders in the near future, and their respective effects on the business and structure, Elders’ historical and pro forma historical information included in this Prospectus may not be comparable to the forecast financial information included herein.

Elders Limited Prospectus

This Prospectus contains forward-looking statements, including the forecast financial information set out in Section 6 and statements containing such words as “anticipate”, “estimates”, “should”, “will”, “expects”, “plans” or similar expressions. These forward-looking statements are, despite being based on Elders’ current expectations about future events and, in the case of the forecast financial information, on assumptions for which the Directors consider they have reasonable grounds, subject to known and unknown risks and uncertainties, many of which are outside the control of Elders and its Directors. These known and unknown risks and uncertainties could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions include but are not limited to the risks outlined in Section 7. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements in this Prospectus. In addition, except as required by law, and then only to the extent required by law, neither Elders, the Joint Lead Managers nor any other person warrants the future performance of Elders, the future performance of the New Shares, the correctness of the assumptions underlying the forecast financial information or any return on any investment made by you under this Prospectus.

Elders, the Joint Lead Managers and their respective directors, officers and employees disclaim any responsibility to update any risk factors or publicly announce the result of any revisions to the forward-looking statements contained in this Prospectus to reflect future developments or events, other than where required to do so by the Corporations Act or the ASX Listing Rules.

Preparation of financial information

Until and including Elders’ 2008 financial year, Elders’ financial year end was 30 June. On 17 March 2009, Elders obtained an order from ASIC permitting it to change its financial year end to 30 September. On 4 September 2009 Elders published audited financial statements for the 12-month period ending 30 June 2009. The audited financial statements for the 12-month period ended 30 June 2009 have been prepared in abbreviated form and do not include all of the disclosures (including complete notes to the financial statements) required by Australian Accounting Standards as applicable to annual financial reports prepared in accordance with the Corporations Act. Elders expects to publish audited financial statements for the 15-month period ending 30 September 2009 in November 2009. A reference to AUD, $, A$, dollars or cents in this Prospectus is to Australian currency unless otherwise indicated.

The financial information presented in a number of tables in this document has been rounded to the nearest whole number or the nearest decimal.

Enquiries

Therefore, the sum of the numbers in a column may not conform exactly to the total figure for that column. In addition, certain percentages presented in the tables in this document reflect calculations based upon the underlying information prior to rounding and accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

If you have questions about the Equity Raising, please contact your solicitor, stockbroker, accountant and/or other professional financial adviser. If you have any questions in relation to how to complete your Application Form, you can call the Elders Shareholder Information Line on 1300 022 710 (within Australia) or +61 3 9938 4347 (from outside Australia) between 8.30am and 5.00pm (Sydney time) Monday to Friday during the Offer Period.

Disclaimer of representations

No person is authorised to provide any information or to make any representation in connection with the Equity Raising which is not contained in this Prospectus. Any information or representation not contained in this Prospectus may not be relied upon as having been authorised by Elders in connection with the Equity Raising. Except as required by law and then only to the extent so required, neither Elders or any other person, warrants or guarantees the future performance of Elders or any return on any investment made pursuant to this Prospectus.

Privacy

Please read the privacy statements in Section 9.14. By submitting the Application Form in or accompanying this Prospectus, making a payment by BPAY[®] or completing a confirmation letter, you consent and agree to the matters outlined in Section 9.14 and you will be taken to have given the representations and warranties set out in Section 9.15.

® Registered to BPAY Pty Ltd ABN 69 079 137 518

The Joint Lead Managers have not authorised, permitted or caused the issue, lodgement, submission, despatch or provision of this Prospectus. The Joint Lead Managers do not make, or purport to make, any statement in this Prospectus, and there is no statement in this Prospectus which is based on any statement by the Joint Lead Managers. To the maximum extent permitted by law, the Joint Lead Managers expressly disclaim all liability in respect of, make no representations regarding and take no responsibility for any part of this Prospectus.

Definitions and abbreviations

Some words and expressions used in this Prospectus have defined meanings which are explained in the Glossary in Section 10.

All references to time in the Prospectus are references to Sydney time.

Photographs and diagrams

The assets depicted in photographs and diagrams in the Prospectus may not be assets of, or products or services provided by, Elders. Diagrams and maps in this Prospectus are provided for illustrative purposes only and are not to scale.

What should you do?

This Prospectus contains important information in relation to the Equity Raising. You should read it carefully and in its entirety, including Section 7 which identifies the major risks associated with an investment in Elders. If you are in doubt as to the course of action you should follow, you should seek appropriate professional advice before making an investment decision. Under the SPP, if you are an Eligible Shareholder, you may choose to apply for a parcel of New Shares valued at $2,500, $5,000, $7,500, $10,000, $12,500, $15,000, $17,500 or $20,000 or not to apply at all. You may also apply for New Shares in excess of $20,000. See Section 3 for further details.

4 September 2009

Letter from the Chairman

Dear Shareholder,

On 4 September 2009, Elders announced an extensive recapitalisation and refinancing plan and confirmed a number of asset sales. These initiatives represented the culmination of a comprehensive restructuring and repositioning of the business carried out over the last 10 months under the Agenda for Change. In combination they are expected to secure the future of the Company and provide it with the strong balance sheet required to achieve its near term and long term objectives.

The recapitalisation includes a Conditional Placement to Institutional Investors to raise $400 million and a Share Purchase Plan (SPP) to raise up to $150 million, both at the Offer Price of $0.15 per New Share. On behalf of the Directors of Elders, I am pleased to offer you the opportunity to participate in the SPP, which allows Eligible Shareholders to subscribe for up to $20,000 of New Shares, free of brokerage and transaction costs, at the Offer Price. The offers under the SPP are being made pursuant to this Prospectus and accompanying Application Form. The Offer Price represents a discount of 62% to the last closing price and 47% to the 3-month VWAP of Elders Shares prior to the announcement of the QBE-Elders insurance transaction. These discounts reflect pricing necessary to secure the required support from Institutional Investors that would enable a successful capital raising.

Both the Conditional Placement and the SPP are subject to Shareholder approval at an EGM to be held on 15 October 2009.

Elders is an iconic Australian company and a leading integrated rural services provider in the nation’s globally competitive agriculture sector. However, the business is capable of performing better, especially in respect of returns generated for Shareholders. Directors identified that the key to improved value for Shareholders exists in the reinvigoration of and reinvestment in Elders’ rural services business, a more focused strategy and the reduction of debt. Elders is undertaking a significant divestment program of non-core assets, and in conjunction with the Equity Raising is expecting to raise approximately $989 million in proceeds (before transaction costs) to be applied to reducing the Company’s debt.

The Company has concentrated its strategic focus on the Australasian agriculture sector, appointed a new and experienced senior management team and committed to the “Agenda for Change” renewal program. Through the Agenda for Change, Elders is aligning its structure, capital allocation, financial management and reporting to that required to realise the potential that lies within the business. The Company has made and continues to make good progress on the reinvigoration of its rural services business. Now, through the Equity Raising, Eligible Shareholders have the opportunity to participate in the recapitalisation of the Company.

The proceeds of this Equity Raising, in conjunction with the commitment from lenders to refinance Elders’ core term debt, funds raised from the sale of Elders’ insurance business to QBE and timber business to Gunns, the expected sale of Elders’ interest in Hi-Fert, and QBE’s commitment to become a cornerstone Shareholder, will provide Elders with the strong balance sheet to pursue its strategy to deliver improved returns for Shareholders. Assuming each of these transactions complete, Elders’ balance sheet gearing will reduce to 14%[1] as at 30 June 2009 on a pro forma basis with net debt reduced to approximately $200 million[1] and, under commitments from its existing lenders, Elders’ core term debt facilities will be syndicated and extended to 2012.

For information on how to apply to participate in the SPP, you should refer to Section 3 of this Prospectus. The Offer Period opens on 14 September 2009 and closes at 5.00pm (Sydney time) on 23 October 2009 (“Closing Date”).

This Prospectus contains details of the Equity Raising and other information relating to Elders. You should read this Prospectus carefully (including assessing the risk factors outlined in Section 7) before deciding whether to apply. If you have any questions in respect of the Equity Raising, please call the Elders Shareholder Information Line on 1300 022 710 (within Australia) or +61 3 9938 4347 (from outside Australia) at any time between 8.30am and 5.00pm (Sydney time) Monday to Friday during the Offer Period, visit the Elders website (www.elders.com.au) or consult your stockbroker, solicitor, accountant and/or other professional adviser.

On behalf of the Directors, I thank you for your continued support of Elders through what has been a difficult time and encourage you to consider this investment opportunity.

==> picture [157 x 168] intentionally omitted <==

As set out in the Notice of Meeting being forwarded with this Prospectus, the Directors recommend that Shareholders vote in favour of the Conditional Placement and SPP at the forthcoming EGM.

Yours faithfully

==> picture [88 x 42] intentionally omitted <==

Stephen Gerlach Chairman

Assumes $150 million is subscribed for under the SPP. The SPP is underwritten to $75 million.

Elders Limited Prospectus

Summary of the Equity Raising and Key Dates

Key Equity Raising Statistics

Key Equity Raising Statistics
Offer Price	$0.15 per New Share
	NEw ShaRES	$ mIllIoN
Conditional Placement	2,667million1	400
SPP	Upto1,000million1	Upto150
Total Equity Raising	Up to3,667 million	Up to550

1 The Conditional Placement (if it and the SPP are approved) and $75 million of the SPP (if it and the Conditional Placement are approved) are underwritten by the Joint Lead Managers. See Section 9.4 for a summary of the underwriting agreement dated 4 September 2009 (“Underwriting Agreement”).

Key Dates

Key Dates
EvENT	DaTE
Announcement of the EquityRaising	4September2009
Lodgement of this Prospectus with ASIC	4September2009
Conditional Placement conducted	4September2009
Record Date for the SPP	7.00pm (Sydneytime) on4September2009
Opening Date of the SPP	14September2009
Extraordinary General Meeting (“EGM”) to vote on the
Conditional Placementand SPP	15October2009
Settlement of the Conditional Placement (if it and the SPP are approved)	19October2009
Issue of New Shares under the Conditional Placement
(if it and the SPP are approved)	20October2009
Normal trading of New Shares issued under the Conditional Placement
(if it and the SPP are approved) expected to commence on ASX	20October2009
Closing Date of the SPP	5.00pm (Sydneytime) on23October2009
Settlement of the SPP (if it and the Conditional Placement are approved)	30 October 2009
Issue of New Shares under the SPP
(if it and the Conditional Placement are approved)	2November2009
Normal trading of New Shares issued under the SPP
(if it and the Conditional Placement are approved)
expected to commence on ASX	3November2009
Dispatch of holding statements	5November2009

The above timetable is indicative only and subject to change. Elders, in conjunction with the Joint Lead Managers and subject to the Corporations Act, the ASX Listing Rules and other applicable laws, has the right to vary any of the above dates without notice. In particular, Elders reserves the right to extend the Closing Date of the SPP or to accept late Applications either generally or in particular cases. The commencement of quotation of New Shares is subject to confirmation from ASX.

Investment Highlights

Renewed company with a refocused strategy

Company refocused under Agenda for Change to drive Shareholder value
Business rebuilt around core rural services franchise
Portfolio simplified through sale of non-core assets
New and experienced management team pursuing strategy focused on financial returns and cash generation

A leading Australian rural services business

A leading Australian rural services provider with a truly national presence
An iconic brand recognised and respected in the Australian farm sector and international markets for 170 years

Unique business model with strategic and competitive advantages

Integrated “one stop shop” positioned at the intersection of the Australasian farm gate and global markets
Service proposition extends across full cycle of production resulting in multiple transaction opportunities
Day-to-day interaction gives early and intimate knowledge of individual farmer’s plans, requirements and capabilities at each stage of the production cycle

==> picture [114 x 149] intentionally omitted <==

==> picture [244 x 149] intentionally omitted <==

==> picture [188 x 149] intentionally omitted <==

==> picture [236 x 152] intentionally omitted <==

==> picture [197 x 152] intentionally omitted <==

==> picture [114 x 152] intentionally omitted <==

Elders Limited Prospectus

Positioned at the intersection of the Australasian farm gate and global markets

Poised to benefit significantly from expected recovery in FY2010 and beyond

Comprehensive recapitalisation, delivering strong and sustainable balance sheet

Attractive investment opportunity

Opportunity to benefit from the recapitalisation
Market stabilising with opportunity to benefit from expected recovery of rural services sector
Commitments from lenders to restructure debt funding with bulk of the term debt on three-year term
- Offer Price represents 62% discount to last closing price
Total asset sales of over $700 million realised or expected to be realised by 2009 calendar year-end
Favourable industry outlook supported by competitiveness of Australian farmers and regional food and fibre demand
Total Equity Raising of up to $550 million
Significantly reduced operating and overhead cost structure
Elders’ gearing will reduce to 14% on a pro forma basis and net debt reduced to approximately $200 million post asset sales and Equity Raising[1]
Margin and market share programs expected to deliver significant upside
Underlying EBIT forecast to turn around in 2010 from $17 million to $84 million[1]
Assumes $150 million is raised under the SPP. The SPP is underwritten to $75 million. See Section 6 for further detail.
The Equity Raising is a major step in the recapitalisation process

==> picture [215 x 149] intentionally omitted <==

==> picture [218 x 149] intentionally omitted <==

==> picture [115 x 149] intentionally omitted <==

==> picture [115 x 152] intentionally omitted <==

==> picture [211 x 152] intentionally omitted <==

==> picture [222 x 152] intentionally omitted <==

Summary Risk Factors

Below is a summary of the key risks associated with an investment in Elders. This list is not exhaustive and you should read this Prospectus in its entirety before deciding whether to participate in the Equity Raising. In addition to normal risks affecting any listed equity investment, an investment in New Shares is subject to risks associated with Elders’ businesses and the industries in which it operates, which include those set out in Section 7.

==> picture [464 x 472] intentionally omitted <==

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

Risks associated with Elders’ operations
Risk area Summary of risk
Rural Services
Seasonality, weather Adverse weather or exposure to natural events could reduce the demand for Elders’ rural
and natural events services, resulting in reduced revenues that would have an adverse effect on Elders’
results of operations (see Section 7.1.1.1).
Australian rural production Any decrease or lack of increase in the volume or quality of production in the
Australian rural sector could have an adverse effect on Elders’ results of operations
(see Section 7.1.1.2).
Commodity prices Adverse movements in commodity prices could have a negative impact on Elders’
financial condition and results of operations (see Section 7.1.1.3).
Financial services Elders’ interest in Rural Bank and the QBE Elders MGIA exposes Elders to a variety of
sector-specific risks which could have a negative impact on Elders’ financial condition
or results of operations (see Section 7.1.1.4).
Forestry
Demand risk The business and profits of Elders may be affected if levels of public demand remain
constant or continue to fall for the managed investment products offered by Elders’
hardwood plantation forestry manager, ITC Limited (“ITC”) (see Section 7.1.2.1).
Credit and finance ITC provides finance to certain growers to fund their participation in managed investment
availability risk scheme projects. There is a risk of financial loss if growers do not fully meet their
obligations. In addition, the availability of finance to prospective growers from third
party financiers may not always be available and could have an adverse effect on
demand for ITC’s MIS products (see Section 7.1.2.2).
Government regulation, Adverse regulatory and taxation changes affecting managed investment scheme products
parliamentary inquiry may have an adverse effect on the ITC business if they, for example, increase compliance
and taxation costs or render management investment scheme products unattractive to investors or
providers (see Section 7.1.2.3).
Futuris Automotive
Cyclicality of automotive If automotive sales and production levels decline or fail to improve in subsequent periods,
sales Elders’ operational results could be adversely affected (see Section 7.1.3.1).
Customers/Suppliers The loss of any significant automotive manufacturing end customer or the failure of a
material supplier may limit Futuris Automotive’s performance and financial strength
(see Section 7.1.3.2).
----- End of picture text -----

Elders Limited Prospectus

==> picture [464 x 552] intentionally omitted <==

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

Risks associated with Elders’ operations (continued)
Risk area Summary of risk
Product offering Futuris Automotive may not be able to adapt its product offerings to meet changing
consumer preferences and supply requirements on a timely, cost effective basis. Also,
industry changes may render Futuris Automotive’s products obsolete or less attractive
(see Section 7.1.3.3).
Plexicor option Futuris Automotive holds a 50% interest in MCK Holdings Pty Limited, the holding
company of MCK Pacific Pty Ltd, which is a component manufacturer trading as Plexicor
(“Plexicor”). A put option exists in favour of the other shareholders of Plexicor (“Other
Plexicor Shareholders”) which, if exercised, would require Futuris Automotive to pay an
indexed purchase price (for example, if exercised in November 2010, the purchase price
would be approximately $27 million). Additionally, Futuris Automotive would become
responsible for Plexicor’s $70 million debt (see Section 7.1.3.4).
Materials and supplies A significant disruption in the supply of materials used in the products produced by the
Futuris Automotive business, or an increase in their price, could materially adversely affect
profit margins (see Section 7.1.3.5).
Other Elders’ specific risks
Agenda for Change and Failure to successfully execute the Agenda for Change strategy and other transformational
transformational strategy initiatives may have a material adverse effect on Elders’ future financial performance and
position (see Section 7.1.4.1).
Risks associated with Elders’ capital structure
Risk area Summary of risk
Available finance Although Elders’ lenders have committed to the refinancing arrangements described
in Sections 6 and 9.5.1, Elders’ continued ability to operate its business will depend in part
on its ability to raise additional funds for future operations and to repay or refinance debts
as they fall due (see Section 7.2.1).
Debt covenants Elders has various financial covenants in relation to its banking facilities and has
agreed to the financial covenants described in Section 9.5.1 for its restructured finance
arrangements. Factors such as falls or increases in base rates and the depreciation of the
Australian dollar could lead to Elders approaching or breaching its financial covenants.
In such circumstances, it may result in a higher cost of borrowing or lenders may require
that loans be repaid immediately (see Section 7.2.2). In addition, Elders’ new facilities will
contain covenants which impose restrictions on the Elders Group. These restrictions limit
Elders’ business flexibility.
Refinancing of Elders’ restructured finance arrangements are reflected in binding term sheets, which
existing facilities include conditions that Elders must satisfy, the non-satisfaction of which will affect
the ability of Elders to complete the refinancing and Equity Raising without the consent
of, or the waiver of the relevant condition by, its lenders. Any failure to complete the
refinancing (or completion of the refinancing on terms less favourable to Elders than those
set out in the term sheets) or the Equity Raising would have a material adverse effect on
Elders and may result in lenders proceeding against Elders (see Section 7.2.3).
----- End of picture text -----

Summary of Risk Factors

==> picture [464 x 543] intentionally omitted <==

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

Risks associated with Elders’ capital structure (continued)
Risk area Summary of risk
Securitisation Elders has a $320 million receivables securitisation programme in the form of a trust structure
with ANZ as principal financier (90%), a third party first loss provider holding Class B notes (1%)
and an Elders wholly owned subsidiary holding Class A notes (9%). The first loss Class B note
is due to mature on 30 September 2009. The receivables securitisation programme has also
breached the current default ratio covenant in July 2009 and has not met the eligibility criteria
for certain receivables sold into the programme. Elders has therefore sought a waiver from the
Trustee, and has received notification from ANZ in its capacity as cash advance provider that for
the period until 30 June 2010 it will not instruct the Trustee or Trust Manager to exercise their
rights in respect of the amortisation events or title perfection events (subject to the fulfilment
of certain conditions). ANZ has also agreed to work with Elders on the establishment of a new
securitisation programme by no later than 30 September 2009. This would involve the existing
third party first loss Class B note being run down, and Elders holding an increased level of the
subordinated securities in the programme, together with certain other amendments to the
terms of the programme. It is likely that the new securitisation programme may, under current
accounting standards, be consolidated onto its balance sheet in that circumstance.
It will be a review event with respect to the refinanced debt facilities if the securitisation
programme is either terminated at any time before its stated maturity or expiry date or is
not extended unless it is replaced by an alternative funding arrangement on substantially
the same terms as the current programme or on terms reasonably acceptable to the
majority financiers (refer to Sections 7.2.4 and 9.5.1.7).
QBE Insurance Transaction, The sale of Elders’ insurance business and the entry into the joint venture arrangement in
Timber Sale and expected respect of Elders’ insurance distribution business are subject to a number of conditions,
Hi-Fert sale including regulatory approval. Failure to complete the QBE Insurance Transaction
by 31 January 2010 will be an event of default under Elders’ restructured financing
arrangements which entitles Elders’ lenders to require that outstanding amounts be repaid
immediately. The sale of ITC’s timber processing business is subject to regulatory approval
and government consent (as may be required). Additionally, failure to complete these
transactions or to realise Elders’ other divestment activities (including the expected sale
of Elders’ interest in Hi-Fert) could have a material adverse effect on Elders’ future financial
performance and position (see Section 7.2.5).
Equity Raising In the event that either of the Conditional Placement or the Share Purchase Plan do not get
the requisite Shareholder approval or if the proceeds of the non-underwritten portion of the
SPP are lower than expected, Elders would have more net debt, greater refinancing risks
and less financial flexibility and this may have a material adverse effect on Elders’ future
financial performance and position (see Section 7.2.6).
Dividends In light of Elders’ results, the Directors have resolved not to declare a final dividend for the year
ending 30 September 2009. When and whether Elders resumes paying dividends depends
on many factors, including contractual restrictions. Under the terms of the Elders Hybrids,
Elders will not be permitted to pay a distribution on the Elders Hybrids due on 30 September
2009. In addition, Elders’ restructured financing arrangements will restrict Elders from paying
distributions on Elders Hybrids until and including 30 September 2011. As a consequence
of non-payment of Elders Hybrid distributions for any reason, under the Elders Hybrids
terms, Elders will be prevented from paying a dividend on its Shares until such time as the
“dividend stop” is lifted in accordance with those terms. Also, Elders’ restructured financing
arrangements restrict Elders from paying dividends on Shares until after 31 March 2012
(and thereafter, more limited restrictions apply) (see Section 7.2.7).
----- End of picture text -----

Other risks

Elders is subject to other general business risks, which could potentially impact upon or have an adverse effect on the future operating and financial performance of Elders. These include a global economic downturn, competition from current or future competitors, counterparty and joint venture failure risk, reliance on information technology, loss of key management personnel and industrial relations claims, availability of insurance, litigation risk, foreign exchange and interest rate risk, changes in government and accounting policies, regulatory and political factors, unexpected losses due to events beyond the control of Elders, environmental risk and other general risks associated with the equity market. You should refer to Section 7.3 for more information.

Elders Limited Prospectus

==> picture [360 x 40] intentionally omitted <==

==> picture [252 x 56] intentionally omitted <==

Questions and Answers

1. Questions and Answers

==> picture [526 x 612] intentionally omitted <==

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

WHERE TO FIND
MORE INFORMATION
The Equity Raising
1. What is the The Equity Raising comprises the Conditional Placement and the Share Chairman’s Letter and
Equity Raising? Purchase Plan. The Conditional Placement and the Share Purchase Plan are Section 2
both conditional on Shareholder approval and each is conditional on the
other receiving Shareholder approval.
2. What is the The Conditional Placement is a conditional placement of New Shares to Section 2.5
Conditional Institutional Investors (which may include Shareholders who are Institutional
Placement? Investors). QBE will subscribe for $55 million of New Shares in the Conditional
Placement, comprising $45 million negotiable at the time of the QBE
Insurance Transaction and a further $10 million as part of the Conditional
Placement. Settlement of the Conditional Placement is subject to Shareholder
approval of it and the SPP at the EGM to be held on 15 October 2009. The
documents relating to the EGM are enclosed separately with this Prospectus.
3. What is the Share The Share Purchase Plan provides Eligible Shareholders with the opportunity Section 2.4
Purchase Plan? to acquire up to $20,000 worth of New Shares at the Offer Price and free of
brokerage or other transaction costs (with the ability to apply for more if there
is a shortfall). Settlement of the SPP is subject to Shareholder approval of it
and the Conditional Placement at the EGM to be held on 15 October 2009. The
documents relating to the EGM are enclosed separately with this Prospectus.
4. What is the The Equity Raising forms a key element of a comprehensive refinancing Chairman’s Letter and
purpose of the package that is being implemented by Elders. The net proceeds of the Section 2.1
Equity Raising? Equity Raising will be used to reduce Elders’ existing debt obligations and,
in conjunction with the commitment from lenders to refinance Elders’ core
debt, the funds raised from the QBE Insurance Transaction and Timber Sale,
the expected sale of Elders’ interest in Hi-Fert, and QBE’s commitment as a
cornerstone Shareholder, will provide Elders with the strong balance sheet
to pursue its strategy to deliver improved returns for Shareholders.
Assuming the completion of the Equity Raising, the settlement of the QBE
Insurance Transaction and the Timber Sale, and the receipt of the assumed
proceeds of the Hi-Fert sale, Elders’ Gearing will reduce to 14% [1] as at 30 June
2009 on a pro forma basis and, under commitments from its existing lenders,
Elders’ core debt facilities will be syndicated and extended to September 2012.
The financial effect of the Equity Raising on Elders is shown in the Pro Forma
Balance Sheet contained in Section 5.
5. What is the The Offer Price is $0.15 per New Share. Chairman’s Letter and
Offer Price? Summary of the Equity
The Offer Price represents a discount of 62% to the last closing price and
Raising and Key Dates
47% to the 3-month VWAP prior to the announcement of the QBE–Elders
insurance transaction. These discounts reflect pricing necessary to secure
the required support from Institutional Investors that would enable a
successful capital raising.
6. How much is Elders is seeking to raise a total of $550 million from the Equity Raising Summary of the Equity
Elders seeking before transaction and other costs associated with the Equity Raising and Raising and Key Dates
to raise from the the recapitalisation. and Section 2.1
Equity Raising?
Subject to Shareholder approval of each of the Conditional Placement and the
SPP, the Joint Lead Managers, being Goldman Sachs JBWere Pty Ltd and RBS
Equity Capital Markets (Australia) Limited, will underwrite:
• the Conditional Placement; and
• $75 million of the Share Purchase Plan.
Elders will raise approximately $400 million under the Conditional Placement
(if it and the SPP are approved) and up to $150 million under the SPP (if it and
the Conditional Placement are approved).
----- End of picture text -----

Assumes $150 million is raised under the SPP.

Elders Limited Prospectus

==> picture [525 x 614] intentionally omitted <==

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

WHERE TO FIND
MORE INFORMATION
The Equity Raising (continued)
7. Is the Equity Raising Subject to requisite Shareholder approvals, the Joint Lead Managers will Section 9.4
underwritten? underwrite:
• the Conditional Placement; and
• $75 million of the Share Purchase Plan.
The fees payable to the Joint Lead Managers and a summary of the key terms
of the Underwriting Agreement are set out in Section 9.4.
8. What are the key The key risks associated with an investment in New Shares are described Section 7
risks associated in Section 7.
with an investment
Before making an investment decision you should read this Prospectus
in New Shares?
in its entirety and carefully consider these risk factors and consult your
stockbroker, accountant, solicitor and/or other professional adviser.
9. Can the Equity Yes. The Directors reserve the right to withdraw the Equity Raising and this Section 2.13
Raising be Prospectus at any time, subject to the Corporations Act, the ASX Listing Rules
withdrawn? and other applicable laws. Elders will hold all Application Monies on Trust for
Applicants until Shareholder approval is provided and New Shares are issued.
If the Equity Raising is withdrawn, Elders will refund applicable Application
Monies (without interest) in respect of New Shares which have not yet been
issued in accordance with the Corporations Act.
Participation in the Share Purchase Plan
10. Who is eligible to Only Eligible Shareholders are entitled to participate in the SPP. An Eligible Section 2.4.2
participate in the Shareholder is a person who:
SPP?
• was registered as the holder of Elders Shares as at 7.00pm (Sydney time)
on the Record Date;
• has a registered address in Australia or New Zealand;
• is not in the United States, and is not a US Person and is not acting for the
account or benefit of a US Person; and
• is eligible under all applicable securities laws to receive an offer under the SPP.
Trustees or nominees holding Elders Shares should refer to Section 2.4.3.
11. How many New Under the SPP, you may apply for a parcel of New Shares valued at $2,500, Section 2.4.5
Shares will I receive $5,000, $7,500, $10,000, $12,500, $15,000, $17,500 or $20,000. You
if I participate in may also apply for New Shares in excess of $20,000. The number of New
the SPP? Shares you receive will depend on the value of the parcel of New Shares
you apply for and on the total number of New Shares applied for by all
Eligible Shareholders. Elders reserves the right to scale back Applications
where the total number of New Shares applied for by Eligible Shareholders
exceeds $150 million. Where the total number of New Shares applied for by
Eligible Shareholders (excluding any New Shares applied for by individual
Eligible Shareholders in excess of $20,000) is less than $150 million,
Eligible Shareholders who:
• applied for New Shares in excess of $20,000;
• did not receive New Shares in the Conditional Placement; and
• are not related parties of Elders,
may be allocated New Shares in excess of $20,000.
Any fraction of a New Share will be rounded up to the nearest whole number
of New Shares.
----- End of picture text -----

1. Questions and Answers

WHERE TO FIND MORE INFORMATION

==> picture [526 x 590] intentionally omitted <==

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

Participation in the Share Purchase Plan (continued)
12. What happens if I do Participation in the SPP is optional. If you choose to do nothing, you will not Section 3.2
nothing? participate in the SPP to acquire New Shares.
13. Can I transfer my No. The offer to purchase New Shares under the SPP is not transferable. Section 2.8
right to purchase
New Shares?
14. Will my shareholding The final impact of the Equity Raising on a Shareholder’s percentage holding Section 2.7
in Elders be diluted? in Elders is dependent on a number of factors, including the individual
Shareholder’s level of take-up in the Equity Raising, total take-up under
the SPP and the outcome of the Shareholder votes at the EGM to be held
on 15 October 2009.
If the Conditional Placement is approved by Shareholders, the percentage
holdings in Elders of Shareholders who did not participate in it will be diluted,
whether or not they participate in the SPP, but this dilution will be less if they
participate in the SPP.
15. Do I have to pay No brokerage, commission or other participation costs are payable by you Section 2.4.1
brokerage on the in respect of the acquisition of New Shares under the SPP.
New Shares?
16. How do I participate If you are an Eligible Shareholder and wish to take up New Shares under the Section 3.1
in the SPP? SPP, you have two options:
• Option 1 : Pay by BPAY [®] so that your payment is received by Elders before
5.00pm (Sydney time) on the Closing Date. If you are paying by BPAY [®]
you do not need to submit the personalised Application Form. It is the
responsibility of the Applicant to ensure that funds submitted through
BPAY [®] are received by the Closing Date. Applicants should be aware
that their own financial institution may implement earlier cut-off times
with regards to electronic payment, and should therefore take that into
consideration when making payment. New Zealand holders will not be
able to make a payment using BPAY [®] .
• Option 2 : Complete and return the personalised Application Form
together with payment by cheque, bank draft or money order so that
your payment and form are received by the Share Registry before
5.00pm (Sydney time) on the Closing Date. Your completed personalised
Application Form, together with Application Monies, should be mailed
using the envelope enclosed with this Prospectus or otherwise mailed
to the following address:
Mailing address
Computershare Investor Services Pty Limited
GPO Box 2987
Adelaide SA 5001
Hand Delivery
Computershare Investor Services Pty Limited
Level 5, 115 Grenfell Street
Adelaide SA 5000
17. When can I trade It is expected that New Shares issued under the SPP will commence trading Section 2.10
allocated New on ASX on 3 November 2009. You should confirm your shareholding on or
Shares? after the allotment date before trading any New Shares you believe you have
acquired under the SPP.
----- End of picture text -----

Elders Limited Prospectus

WHERE TO FIND MORE INFORMATION

==> picture [525 x 542] intentionally omitted <==

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

Information about Elders and the financial effect of the Equity Raising on Elders
18. What is the financial The financial effect of the underwritten portion of the Equity Raising on Elders Section 5
effect of the Equity is shown in the Pro-Forma Balance Sheet in Section 5.
Raising on Elders?
19. What is Elders’ In light of Elders’ financial results for the 12-month period to 30 June 2009, Section 7.2.7
dividend policy? the Directors have resolved not to declare a final dividend for the year ending
30 September 2009.
It is the Board’s intention that the Company resume distribution of dividends
as soon as practicable subject to satisfaction of its balance sheet, cash
flow management and financial performance objectives. The payment of
dividends is subject to the discretion of the Directors and will depend on
many factors, including Elders’ results of operations, financial condition,
general business conditions, restrictions imposed by financing facilities and
Elders Hybrid securities and legal restrictions on the payment of dividends.
In particular, Elders’ restructured financing arrangements impose restrictions
on the payment of distributions on Elders Hybrids until and including
30 September 2011. These restrictions activate a “dividend stop” under
the terms of the Elders Hybrids which prevents Elders from paying dividends
on its Shares until the stop is lifted under the terms of the Elders Hybrids.
Elders’ restructured financing arrangements also prevent Elders from paying
dividends on Shares until after 31 March 2012 (and, thereafter, more limited
restrictions apply).
For further information see Section 7.2.7.
Other information
20. What fees and costs Underwriting and management fees for the Conditional Placement and SPP Section 9.13
are Elders paying (if each is approved) and advisory fees and costs associated with the Equity
for the Equity Raising total approximately $24 million and will be paid out of the proceeds
Raising? of the Equity Raising.
21. What are the rights New Shares issued under the Equity Raising will rank equally in all respects Section 9.3
and liabilities with existing Elders Shares on issue at the Record Date.
attaching to the
New Shares under
the Equity Raising?
22. How can Eligible If you would like further information you can:
Shareholders obtain
• contact your stockbroker, accountant, solicitor and/or other professional
further information?
adviser; and/or
• call the Elders Shareholder Information Line on 1300 022 710
(within Australia) or +61 3 9938 4347 (from outside Australia) at any time
between 8.30am and 5.00pm (Sydney time) Monday to Friday during the
Offer Period; and/or
• visit the Elders website at www.elders.com.au.
----- End of picture text -----

==> picture [360 x 40] intentionally omitted <==

==> picture [252 x 56] intentionally omitted <==

Equity Raising Details

Elders Limited Prospectus

2.1 Purpose of the Equity Raising and use of proceeds

The Equity Raising forms a key element of a comprehensive refinancing package that is being implemented by Elders. The net proceeds of the Equity Raising will be used to reduce Elders’ existing debt obligations and, in conjunction with the commitment from lenders to refinance Elders’ core debt, the funds raised from the QBE Insurance Transaction and Timber Sale, the expected sale of Elders’ interest in Hi-Fert, and QBE’s commitment to become a cornerstone Shareholder, will provide Elders with the strong balance sheet to pursue its strategy to deliver improved returns for Shareholders.

Assuming the completion of the Equity Raising, the settlement of the QBE Insurance Transaction and the Timber Sale, and the receipt of the assumed proceeds of the expected Hi-Fert sale, Elders’ Gearing will reduce to 14%[1] as at 30 June 2009 on a pro forma basis and, under commitments from its existing lenders, Elders’ core debt facilities will be syndicated and extended to September 2012.

Refer to Section 6.3 for details of the pro forma impact of the recapitalisation on Elders’ debt profile. Refer to the table below for a summary of the sources and uses of funds.

Sources and uses of funds	$ million (approximately)
Conditional Placement1 Share Purchase Plan2	400 150
Total Equity Raising proceeds	550
Asset Sale – Insurance	270
Asset Sale – Hi-Fert (expected)3	69
Asset Sale – Timber	100
Total sources of funds	989
Pay down debt	928
Transaction costs4	61
Total uses of funds	989

Assumes the Conditional Placement and SPP are approved at the EGM expected to be held on 15 October 2009.
Assumes Conditional Placement and SPP are approved and SPP is subscribed up to its cap of $150 million. Assuming take-up of $20,000 per Shareholder, it would require approximately a 20% take-up of the SPP for it to reach its cap.
Assumes the completion of the proposed sale of Elders’ investment in Hi-Fert for an amount net of transaction costs equal to its carrying value at 30 June 2009 (carrying value used for indicative purposes only). See Section 5 for further details on the proposed sale of Hi-Fert. See Section 7.2.5 for risks associated with the proposed sale of Hi-Fert.
Transaction costs include underwriting and management fees for the Equity Raising and advisory fees and costs associated with the Equity Raising, refinancing and asset sales. Includes cash costs and some non-cash costs, however excludes USPP pre-payment penalty.

2.2 Issued capital

The effect of the Equity Raising on the issued capital of Elders is set out below.

	is set out below.
		Number of Elders Shares (million)
	Before the Equity Raising	819
	Conditional Placement Share Purchase Plan2	2,667 1,000
	Total1	4,486

Assumes receipt of Shareholder approvals for the Conditional Placement and SPP.
Assumes SPP is subscribed up to its cap of $150 million.

2.3 Underwriting of the Equity Raising

Subject to requisite Shareholder approval, the Joint Lead Managers, pursuant to the Underwriting Agreement, will underwrite:

the Conditional Placement; and
$75 million of the SPP.

This means that the Joint Lead Managers will subscribe or procure subscriptions at the Offer Price for any New Shares that are not subscribed for by Institutional Investors (which may include Shareholders who are Institutional Investors) under the Conditional Placement (if it and the SPP are approved) and by Eligible Shareholders under the SPP (if it and the Conditional Placement are approved), up to the underwritten amount. A summary of the Underwriting Agreement is set out in Section 9.4.

2.4 Share Purchase Plan

2.4.1 Overview of the Share Purchase Plan

Under the SPP, Eligible Shareholders can acquire up to $20,000 worth of New Shares at the Offer Price of $0.15 without paying any brokerage or transaction costs. Eligible Shareholders may apply for a parcel of New Shares valued at $2,500, $5,000, $7,500, $10,000, $12,500, $15,000, $17,500 or $20,000. The number of New Shares allocated to an Applicant will depend on the value of the parcel of New Shares applied for and on the total number of New Shares applied for by Eligible Shareholders.

Elders will cap eligible Applications at a total of $150 million. To the extent Applications are received in excess of this amount, Applications will be scaled back and excess funds returned to Eligible Shareholders. Where the total number of New Shares applied for by Eligible Shareholders (excluding any New Shares applied for by individual Eligible Shareholders in excess of $20,000) is less than $150 million, Eligible Shareholders who:

applied for New Shares in excess of $20,000;
did not receive New Shares in the Conditional Placement; and
are not related parties of Elders,

may be allocated New Shares in excess of $20,000.

Any fraction of a New Share will be rounded up to the nearest whole number of New Shares.

Assumes $150 million is raised under the SPP.

2. Equity Raising Details

2.4.2 Participation in the SPP

Participation in the SPP is optional, subject to the eligibility criteria set out below.

The SPP is only open to Eligible Shareholders. An Eligible Shareholder is a person who:

was registered as the holder of Elders Shares as at 7.00pm (Sydney time) on the Record Date;
has a registered address in Australia and New Zealand;
is not in the United States, and is not a US Person and is not acting for the account or benefit of a US Person; and
is eligible under all applicable securities laws to receive an offer under the SPP.

If you are in any doubt about the Equity Raising, whether you should participate in the SPP or how such participation will affect you, you should seek independent financial and taxation advice before making a decision as to whether or not to take up any New Shares.

2.4.3 Participation by Eligible Shareholders

Individual holders – If you are the only registered holder of a holding of Elders Shares, but you receive more than one offer under the SPP (for example, because you hold Elders Shares in more than one capacity), you may only apply for one maximum parcel of New Shares. Elders reserves the right to reject any Application for New Shares where it believes there has not been compliance with this rule.

Joint holders – If you are recorded with one or more other persons as the joint holder of a holding of Elders Shares, that joint holding is considered to be a single registered holding for the purpose of the SPP, and the joint holders are entitled to participate in the SPP in respect of that single holding only. If the same joint holders receive more than one offer under the SPP due to multiple registered holdings, the joint holders may only apply for one maximum parcel of New Shares.

Custodians, trustees and nominees – If you are a custodian, trustee or nominee within the definition of “custodian” in ASIC Class Order CO 09/425 (“Custodian”) and hold Elders Shares on behalf of one or more persons resident in Australia and New Zealand (each a “Participating Beneficiary”), you may apply for up to $20,000 worth of Elders Shares (with the ability to apply for more if there is a shortfall) for each Participating Beneficiary, subject to providing a notice in writing to Elders (the “Custodian Certificate”) certifying the following:

the number of Elders Shares that you hold on behalf of each Participating Beneficiary;
the number or dollar amount of New Shares which each Participating Beneficiary has instructed you to apply for on their behalf; and
any such additional or varied information as might be required by Elders in relation to the SPP.

To the extent that you hold Elders Shares on behalf of another person resident outside Australia and New Zealand, it is your responsibility to ensure that any acceptance complies with all applicable foreign laws.

For the purposes of ASIC Class Order CO 09/425, you are a Custodian if you are a registered holder that:

holds an Australian financial services licence that:
covers the provision of a “custodial or depository service” (as defined in section 766E of the Corporations Act); or
includes a condition requiring the holder to comply with ASIC Class Order CO 02/294; or
is exempt under:
paragraph 7.6.01(1)(k) of the Corporations Regulations 2001; or
under ASIC Class Order CO 05/1270 to the extent that it relates to ASIC Class Order CO 03/184, from the requirement to hold an Australian financial services licence for the provision of a custodial or depository service.

If you hold Elders Shares as a trustee or nominee for another person, but are not a Custodian as defined above, you cannot participate for beneficiaries in the manner described above unless Elders otherwise agrees. In this case, the rules for multiple single holdings (above) apply. Custodians should have received a Custodian Certificate. If you did not receive a Custodian Certificate or would like further information on how to apply, you should contact the Elders Shareholder Information Line.

2.4.4 Scale back and oversubscription

Elders will cap eligible Applications at a total of $150 million. To the extent Applications are received in excess of this amount, Applications will be scaled back and excess funds returned to Applicants. If Applications are scaled back, each Applicant will be scaled back in such manner as Elders considers equitable.

that you hold Elders Shares on behalf of Participating Beneficiaries who have instructed you to apply for New Shares on their behalf under the SPP;
the number of Participating Beneficiaries;
the name and address of each Participating Beneficiary;

Elders Limited Prospectus

Where the total number of New Shares applied for by Eligible Shareholders (excluding any New Shares applied for by individual Eligible Shareholders in excess of $20,000) is less than $150 million, Eligible Shareholders who:

applied for New Shares in excess of $20,000;
did not receive New Shares in the Conditional Placement; and
are not related parties of Elders,

may be allocated New Shares in excess of $20,000.

The allocation of New Shares in excess of $20,000 to Eligible Shareholders will be determined as set out above and at the absolute discretion of Elders, acting in consultation with the Joint Lead Managers. It is also possible that demand for New Shares may exceed the number of New Shares available for allocation, in which case Elders may implement a scale back in its absolute discretion. There is no assurance that Eligible Shareholders who apply for New Shares will be allocated all or any of those New Shares.

2.4.5 Offer Price and investment size

Under the SPP, Eligible Shareholders have an opportunity to subscribe for up to $20,000 worth of Elders Shares at the Offer Price of $0.15 per New Share. You should note that Elders’ Share price may rise or fall between the Opening Date and the date when New Shares are allotted and issued to you under the SPP.

Under the SPP, you may apply for a parcel of New Shares valued at $2,500, $5,000, $7,500, $10,000, $12,500, $15,000, $17,500 or $20,000. You may also apply for (although you may not receive) New Shares in excess of $20,000 (see Section 2.4.4). Subject to Section 2.4.4, Eligible Shareholders may only acquire a maximum of $20,000 worth of New Shares. This limitation applies even if you receive more than one Application Form or if you hold Elders Shares in more than one capacity. In addition, the $20,000 limit applies irrespective of the number of Elders Shares you hold on the Record Date (although trustees or nominees should refer to Section 2.4.3).

In the absence of a scale back or oversubscription, the number of New Shares to be issued to you will be calculated by dividing the value of New Shares that you apply for by the Offer Price, then rounding up to the nearest whole number of New Shares. For example, in the absence of a scale back, if you apply for $5,000 of New Shares, you will be allotted 33,334 New Shares. Any fractions of a New Share will be rounded up to the nearest whole number of New Shares.

	Investment amount	No. of New Shares
	$2,500	16,667
	$5,000	33,334
	$7,500	50,000
	$10,000	66,667
	$12,500	83,334
	$15,000 $17,500	100,000 116,667
	$20,000	133,334

2.4.6 Broker stamping fee

A stamping fee equal to 1.0% of the subscription amount (inclusive of GST) of New Shares will be paid to stockbrokers (being those entities named as full service (advisory) brokers or non-advisory brokers on the ASX website) who submit a valid claim for a broker stamping fee on successful Applications.

2.5 Conditional Placement

Institutional Investors (which may include Shareholders who are Institutional Investors) will be offered the opportunity to acquire up to 2,667 million New Shares at the Offer Price of $0.15 per New Share in the Conditional Placement. QBE will be issued with up to 367 million New Shares at the Offer Price of $0.15 per New Share in the Conditional Placement, subject to Shareholder approval at the EGM on Thursday, 15 October 2009 and under this Prospectus. The offers under the Conditional Placement will be made on or around 4 September 2009 but settlement of the issue of the New Shares under the Conditional Placement is subject to Shareholder approval and Shareholder approval of the SPP and is expected to occur on Monday, 19 October 2009 with trading on ASX to commence on Tuesday, 20 October 2009.

2.6 No offer under the SPP to holders of New Shares

Any person allocated New Shares under the Conditional Placement may not participate in the SPP in respect of those New Shares.

2. Equity Raising Details

2.7 Effect of the Equity Raising on a Shareholder’s percentage interest in Elders

The final impact of the Equity Raising on a Shareholder’s percentage holding in Elders is dependent on a number of factors, including the individual Shareholder’s level of take-up in the Equity Raising, total take-up under the SPP and the outcome of the Shareholder votes on the Conditional Placement and SPP at the EGM to be held on 15 October 2009. If the Conditional Placement is approved by Shareholders, the percentage holdings in Elders of Shareholders who did not participate in it will be diluted, whether or not they participate in the SPP, but this dilution will be less if they participate in the SPP.

2.8 No transfer of rights

The offer to purchase New Shares under the SPP is not transferable.

2.9 Ranking of New Shares

Each New Share will be issued as an Elders Share. Details of the rights and liabilities attaching to the New Shares are set out in Section 9.3.

2.10 Quotation and trading of New Shares

Elders will apply to ASX within seven days of the date of this Prospectus for the official quotation of the New Shares. Subject to approval being granted, it is expected that normal trading of New Shares issued under the Conditional Placement is expected to occur on Tuesday, 20 October 2009. Normal trading of New Shares issued under the SPP (if approved) is expected to occur on Tuesday, 3 November 2009. Elders disclaims all liability (to the maximum extent permitted by law) to persons who trade New Shares before receiving their holding statements, whether on the basis of confirmation of the allocation provided by Elders, the Share Registry or the Joint Lead Managers.

2.11 CHESS

The New Shares will participate from the date of commencement of quotation in CHESS, operated by ASX Settlement and Transfer Corporation Pty Limited. They must be held in uncertificated form (i.e. no share certificate will be issued) on the CHESS sub-register under sponsorship of a sponsoring participant (usually a broker) or on the issuersponsored sub-register.

Arrangements can be made at any subsequent time to convert your holding from the issuer-sponsored sub-register to the CHESS sub-register under sponsorship of a sponsoring participant or vice-versa, by contacting your sponsoring participant.

2.12 Treatment of foreign Shareholders

Neither this Prospectus nor the Application Form constitutes an offer in the United States (or to, or for the account or benefit of, US Persons) or in any jurisdiction in which, or to any persons to whom, it would not be lawful to make such an offer or invitation.

Eligible Shareholders resident outside Australia and New Zealand should consult their professional advisers as to whether, in order to enable them to take up New Shares under the SPP, any governmental or other consents are required, or whether other formalities need to be observed.

Eligible Shareholders holding Elders Shares on behalf of persons who are resident outside Australia and New Zealand are responsible for ensuring that taking up New Shares under the SPP does not breach the laws and regulations in the relevant overseas jurisdiction. The making of an Application (whether by the return of a duly completed Application Form or by the making of a BPAY[®] payment) will constitute a representation that there has been no breach of such laws or regulations.

The SPP is not being made in the United States or to, or for the account or benefit of, US Persons. Accordingly, Eligible Shareholders who are, or who hold Elders Shares on behalf of, persons in the United States or who are, or are acting for the account or benefit of, US Persons, may not subscribe for New Shares on behalf of such persons, and may not send to such persons this Prospectus, the Application Form or any other material relating to the Equity Raising.

No action has been taken to register or qualify the New Shares or the Equity Raising, or otherwise permit a public offering of the New Shares, in any jurisdiction outside Australia or New Zealand. In particular, the New Shares have not been, and will not be, registered under the US Securities Act or the securities laws of any state or other jurisdiction of the United States. The New Shares may not be offered, sold or resold in the United States or to, or for the account or benefit of, a US Person, except in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws.

Elders Limited Prospectus

Returning a completed Application Form or paying the Offer Price for New Shares by BPAY[®] , will be taken to constitute a representation, warranty and agreement by Eligible Shareholders that:

the New Shares have not been, and will not be, registered under the US Securities Act or the securities laws of any state or other jurisdiction in the US, or in any other jurisdiction outside Australia or New Zealand, and may not be offered, sold, transferred or otherwise disposed of except in accordance with an available exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and any other applicable securities laws;
they are not in the United States, are not US Persons and are not acting for the account or benefit of US Persons;
they have not and will not send this Prospectus, the Application Form or any other material relating to the Equity Raising to any person in the United States or that is, or is acting for the account or benefit of, a US Person; and
if in the future they decide to sell or otherwise transfer their New Shares, they will only do so in regular way transactions on ASX where neither they nor any person acting on their behalf knows, or has reason to know, that the sale has been pre-arranged with, or that the purchaser is in the United States or is a US Person.

2.13 Withdrawal of the Equity Raising

Elders and the Directors reserve the right to withdraw the Equity Raising and this Prospectus at any time, subject to the Corporations Act, the ASX Listing Rules and other applicable laws. Elders will hold all Application Monies on trust for Applicants until Shareholder approval is provided and New Shares are issued. If the Equity Raising is withdrawn, Elders will refund all (applicable) Application Monies received in accordance with the Corporations Act and without any payment of interest as soon as is practicable. Elders may retain any interest it receives on such Application Monies. Withdrawal of the Equity Raising would enable the Joint Lead Managers to terminate the Underwriting Agreement.

==> picture [360 x 40] intentionally omitted <==

==> picture [252 x 56] intentionally omitted <==

Actions Required of Eligible Shareholders

Elders Limited Prospectus

Actions Required of Eligible Shareholders

3.1 How to apply for New Shares under the SPP

Before taking any action in relation to the Share Purchase Plan, Eligible Shareholders should read this Prospectus in its entirety, particularly noting the risks set out in Section 7.

If you are an Eligible Shareholder, you may apply for a parcel of New Shares valued at either $2,500, $5,000, $7,500, $10,000, $12,500, $15,000, $17,500 or $20,000. You may also apply for (although you may not receive) New Shares in excess of $20,000. If you would like to apply for New Shares under the SPP, you have two payment options.

OPTION 1 Pay via BPAY[®]

Make a BPAY[®] payment by using the personalised reference number shown on your Application Form which is required to identify your holding. If you make your payment using BPAY[®] , you do not need to return your Application Form. New Zealand holders will not be able to make a payment using BPAY[®] .

Applicants should be aware that their own financial institution may implement earlier cut-off times with regards to electronic payment, and should therefore take this into consideration when making payment. It is the responsibility of the Applicant to ensure that funds submitted through BPAY[®] are received by 5.00pm (Sydney time) on the Closing Date.

OPTION 2 Pay by cheque, bank draft or money order

Complete the enclosed Application Form and return it in the enclosed reply-paid envelope together with your cheque, bank draft or money order made payable to “Elders SPP Trust Account” drawn on an Australian branch of a financial institution in Australian dollars for the correct amount, and crossed “Not Negotiable”. Please note that New Zealand Shareholders will need to affix the appropriate postage stamp.

If the amount of the payment tendered with your Application Form or your BPAY[®] payment is:

Less than $2,500 – Elders will not allot any New Shares to you and will refund your Application Monies to you;
For an amount between $2,500 and $20,000 that is not one of the designated amounts – subject to scale back, Elders will allot to you the number of New Shares that would have been allotted had you applied for the highest designated amount that is less than the amount of your cheque or BPAY[®] payment, and will refund the excess Application Monies to you; and
Greater than $20,000 – If Applications exceed $150 million, Elders may allocate to you a number of New Shares lower than the maximum parcel size and your excess Application Monies will be refunded to you. If Applications are below $150 million (excluding applications for additional New Shares in excess of $20,000) and you qualify to receive New Shares in excess of $20,000, you may be allotted additional New Shares.
Cash payments will not be accepted. Receipts for payment will not be issued.

3. Actions Required of Eligible Shareholders

You need to ensure that your completed personalised Application Form and cheque, bank draft or money order reaches the Share Registry at the following address by no later than 5.00pm (Sydney time) on the Closing Date (subject to variation):

Mailing address

Computershare Investor Services Pty Limited GPO Box 2987 Adelaide SA 5001

Hand Delivery

Computershare Investor Services Pty Limited Level 5, 115 Grenfell Street Adelaide SA 5000

For the convenience of Eligible Shareholders, a reply paid envelope addressed to the Share Registry has been enclosed with this Prospectus. If mailed in Australia, no postage stamp is required. Application Forms (and payments for Application Monies) will not be accepted if received after the Closing Date or if received at Elders’ registered or corporate offices.

3.3 Enquiries

This Prospectus is important and requires your immediate attention. You should read it in its entirety. If you are in doubt as to the course you should follow, you should consult your stockbroker, accountant, solicitor or other professional adviser. If you:

have questions in relation to the Equity Raising; or
have questions on how to complete the Application Form or take up New Shares under the SPP; or
have lost your personalised Application Form and would like a replacement form,

please call the Elders Shareholder Information Line on 1300 022 710 (within Australia) or +61 3 9938 4347 (from outside Australia) at any time between 8.30am and 5.00pm (Sydney time) Monday to Friday during the Offer Period or go to the Elders website at www.elders.com.au.

If you apply for New Shares in excess of $20,000, there is no assurance that you will be issued any of those New Shares. The number, if any, of New Shares in excess of $20,000 you will be issued will depend on demand for New Shares from other Eligible Shareholders. If you apply for New Shares in excess of $20,000 and you are not allocated some or all of those New Shares, you will receive a refund for the relevant amount of Application Monies (without interest) not applied towards the issue of New Shares, as soon as practicable after the Closing Date. The refund cheque will be forwarded to your registered address. Amounts received by Elders in excess of $20,000 may be treated as an application to apply for as many New Shares as that excess amount will pay for in full.

3.2 What if I do nothing?

If you are an Eligible Shareholder and you do not wish to take up any New Shares under the SPP, you should do nothing.

==> picture [596 x 562] intentionally omitted <==

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

Elders Limited Prospectus 23
4
----- End of picture text -----

Overview of Elders and its Operations

4. Overview of Elders and its Operations

4.1 Company overview and background

Elders is a leading Australian integrated rural services provider offering the supply of farm inputs and advice, financial services, real estate services, and the marketing and sale of farm outputs. Elders also holds interests in the forestry sector through ITC and the automotive sector through Futuris Automotive. Since its establishment in 1839, Elders has built one of Australia’s largest rural and regional distribution networks consisting of approximately 390 points of presence across the nation. This has been supplemented by a recently established network in rural and regional New Zealand.

Elders was acquired by industrial conglomerate Futuris Corporation in 1996, where it was developed as one of a number of business interests. Following the acquisition of Elders, Futuris invested in the development of financial services operations through the establishment of Elders Insurance Limited (underwriting) in 1998, Rural Bank in 2000 and forestry and timber operations through the takeover of ITC completed in 2004.

In December 2008, Futuris Corporation announced the Agenda for Change program under which it adopted the name of its principal business, Elders, and reaffirmed its commitment to transition the existing business from an industrial conglomerate to a focused rural services company, leveraging the strength of the Elders brand and its distribution network. The Agenda for Change program has also involved a significant divestment of non-core assets and re-deployment of capital around the core rural services operations.

Currently, Elders has three operating businesses as shown in the chart below.

==> picture [462 x 295] intentionally omitted <==

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

Non-core
Rural Services Forestry Futuris Automotive [1]
• 391 Australian and 22 • One of Australia’s largest • Design, manufacture and
New Zealand points of presence hardwood plantation managers supply of automotive interior
• Farm inputs – supply of (by estate size) systems (seating, steering,
agricultural chemicals, fertilisers, • Manages over 165,000 hectares trims, carpets etc)
animal health and general rural across WA, VIC, SA, and QLD • 35% minority stake in Air
merchandise • Provider of MIS plantation International Thermal Systems
• Production advice grown hardwood (65% held by Unitas), a supplier
of automotive air-conditioning
• Farm outputs – marketing & sale
and cooling systems
of livestock, wool & grain
• Financial and real estate services,
including Elders’ 40% interest in
Rural Bank
• Network related – supply chain
assets to leverage the network
distribution/accumulation
capability
----- End of picture text -----

The Futuris Automotive business has been identified by Elders management as non-core and will be divested once market conditions improve and a sale is achievable at fair value.

Elders Limited Prospectus

4.2 Agenda for Change

4.2.1 Strategic rationale

Through the Agenda for Change program, management has sought to capitalise fully on the brand value, market appeal, earnings potential and capabilities of Elders.

AGENDA FOR CHANGE PROGRAM OVERVIEW

==> picture [463 x 362] intentionally omitted <==

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

1. Company 2. Refocus 3. Financial 4. Engage
Structure on Elders performance the market
• Owner operator vs. • Back the Elders • Act immediately on • Clear communication
holding company transformation non-performing and of strategy
• Manage the company program non-core assets • Transparency in
as a whole rather • Leadership at the • Significantly financial reporting
than in silos farm gate reduce leverage in • Engage openly with
• Simplify and clarify • Concentrate the business and all key stakeholders
strategy resources on strengthen the • Present clear
core assets balance sheet proposition for
• Cash returns rather investors
than equity accounted
earnings
✓ Reorganised around ✓ Change in company ✓ Significant asset ✓ Agenda for Change
Elders with single name and identity to divestments announced
management Elders completed, agreed ✓ Adoption of a
structure ✓ New go-to-market or expected more conservative
✓ Sale of non-core strategy implemented (see Section 4.2.2) management and
minority interests ✓ Operations and ✓ Significant measurement
✓ Subsidiary boards support centres reduction in future of gearing
removed restructured capital demands ✓ Change of balance
✓ New and ✓ Reinvesting in the through Rural Bank date to 30 September
and insurance
re-invigorated distribution network
transactions
management team
✓ Independent review
of forestry completed
✓ Application of
stringent cash and
return metrics
Objectives
Achievements
----- End of picture text -----

4. Overview of Elders and its Operations

4.2.2 Asset divestment program

Under the Agenda for Change program, management identified a number of non-core assets to be divested or closed. The following table provides a summary of assets which have been successfully divested since December 2008:

asset	Completed	Proceeds	Comments	Comments
Amcom	Dec2008	$38.8m	•	50.1 % shareholding divested
Webster	Dec2008	$13.0m	•	33 .7% shareholding divested
AAco	May2009	$185.6m	•	43 % shareholding in AACo divested
Rural Bank	May2009	$33.9m	•	Reduced shareholding in Rural Bank to 40% following
(10% stake)				the sale of a10% stake to Bendigo and Adelaide Bank
Elders Insurance	Scheduled to	$270.0m	•	On 31July2009, Elders entered into a Heads of
	complete Sep2009			Agreement with QBE to sell its insurance operations
				for $270million and establish the QBE Elders MGIA to
				be owned75%/25% by QBE and Elders respectively
			•	Final conditional transaction agreements have
				been executed (see Section9.5.2for further details)
Timber	Scheduled to	$100.0m	•	On 30August2009, Elders and its subsidiary, ITC
	complete Oct2009			Limited, entered into a binding conditional agreement
				for the sale of its timber processing business and50%
				interest in SmartFibre to Gunns (see Section9.5.3for
				further details)
Other		$2.8m	•	Includes Harvey Beef (abattoir), horticulture and fodder
Total		$644.1m

Elders is currently undertaking divestment processes in respect of other non-core assets, including Hi-Fert which has a book value of $69 million as at 30 June 2009 (book value cited for indicative purposes only). Elders is currently in the process of closing BWK, its global wool trading business, with the sale of inventory, property, plant and equipment expected to release approximately $20 million on complete closure, which is expected to occur by 30 June 2010. The Futuris Automotive business has been identified by Elders management as non-core and there is an expectation that a sale is possible within 18 months.

4.3 Elders’ strategy

Elders’ strategy is to position itself as the most valued commercial partner at the farm gate, where primary production intersects with local and global markets. Elders’ vision is to fully leverage the domestic and international power of the Elders brand and distribution network through:

Recalibrating operations: Elders has repositioned to become a cash and returns focused, owner operator of businesses concentrated on rural and regional services and forestry
Refocusing resources: Elders is concentrating resources on its core rural services operations to lift performance and identify synergistic new business opportunities
Leveraging core competencies: Elders is implementing a strategy to leverage its core competencies into new markets and geographies
Realising Elders’ full potential: Elders must deliver stakeholder returns commensurate with brand value and market position

Elders Limited Prospectus

4.4 Business overview

4.4.1 Rural Services

4.4.1.1 overview

Rural Services is Elders’ principal business and one of only two full service nationwide rural and regional distribution networks in Australia. With approximately 410 points of presence across rural and regional Australia and New Zealand including a network of 285 branches, Rural Services provides Australian and New Zealand farmers with an integrated service offering, encompassing the supply of farm inputs and advice, financial services, real estate and the marketing and sale of farm outputs.

Over the last 170 years, Elders has built a leading market position in most of the areas it services and is growing market share by adding new products to its service offering.

==> picture [112 x 49] intentionally omitted <==

Rural Services

==> picture [463 x 153] intentionally omitted <==

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

AUS & NZ network Network related
• Farm supplies • Australian Wool Handlers (50%)
• Livestock • Elders Toepfer Grain (50%)
• Wool • Livestock Export & Trading
• Grain1 • China operations
• Real Estate • Rural Bank (40%)
• Banking1
• Insurance2
----- End of picture text -----

Services not provided in New Zealand.
Insurance provided through the QBE Elders MGIA expected from 1 October.

4. Overview of Elders and its Operations

australian network operations

Network operations encompass the following product and service offerings:

Farm supplies: Rural Services is one of Australia’s leading suppliers of rural farm inputs, with sales of $1.2 billion in the 12 months to June 2009 in the Australian rural farm supplies market. Rural Services, through its branch network, supplies seeds, fertilisers, agricultural chemicals, animal health products and general rural merchandise, backed by professional advice on agronomy, genetics and animal health to primary producers.
Livestock: Rural Services is the leading seller and supplier of livestock in Australia, with sales in the Australian market of 2 million head of cattle and 12 million head of sheep in the 12 months to June 2009. Rural Services provides livestock producers with animal health advice and production management solutions, breeding services and a range of marketing activities from agency sales at the farm gate through to feedlot and export options that leverage the markets created by Elders Livestock Export & Trading operations.
Wool: Rural Services is the largest seller of Australian greasy wool, handling 496,000 bales during the 12 months to June 2009 from over 9,000 growers. Rural Services has an extensive range of products, services, facilities and alliances to help growers maximise returns from their wool. These include wool handling, buying and selling greasy wool, marketing and selling options and risk management solutions.
Grain: Grain accumulation is a growth area for Rural Services following the progressive deregulation of the Australian grain market. Rural Services exclusively accumulates grain for Elders Toepfer Grain (“ETG”), a joint venture between Elders and Toepfer International, offering growers a range of cash-based grain marketing options. The joint venture combines Rural Services’ strength in grain accumulation with Toepfer’s expertise in risk management and global trading.
Real Estate: Elders primarily operates in the broadacre, rural residential and lifestyle property markets via 177 branch, 44 stand alone and 33 franchise locations across rural and regional Australia. Rural Services also operates in the metropolitan residential market via 132 franchise locations. Over 90% of all real estate earnings in the 12 months to June 2009 were generated through the services provided in the rural and regional property markets. In the 12 months to 30 June 2009, $1.8 billion worth of property was sold through Elders (excluding franchises).
Insurance: Rural Services has been distributing insurance since the late 1800s and today is one of the largest insurance providers in rural and regional Australia distributing gross written premiums of $488 million in the 12 months to 30 June 2009. Rural Services distributes a wide range of insurance cover including home contents, motor vehicles, business and farm, and a range of specialist insurance such as crop, livestock and landlord. Following the sale of Elders Insurance, these products will still be available under the Elders name through the QBE Elders MGIA established by Elders and QBE for the long term distribution of insurance products. The QBE Elders MGIA distribution network will retain the existing relationship with the Rural Services network.
Banking: Rural Services has operated as a specialist financier to the rural sector since 1839. Since 2000, Elders has exclusively distributed a range of specialised rural banking products and services provided by Rural Bank (formerly known as Elders Rural Bank).

AUSTRALIAN NETWORK SALES REVENUE BREAKDOWN (12 months ended 30 June 2009)

==> picture [224 x 120] intentionally omitted <==

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

Wool 3%
Livestock 7%
Real Estate 4%
Farm Supplies 78%
Insurance 6%
Banking 2%
Source: Elders Management
----- End of picture text -----

SCALE AND GEOGRAPHIC DIVERSITY

==> picture [204 x 121] intentionally omitted <==

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

Elders Branches Darwin
Major export centre
Brisbane
Perth
Sydney
Adelaide Canberra
Melbourne
Hobart
----- End of picture text -----

Elders Limited Prospectus

Network related operations

Network related operations encompass the following businesses:

Australian Wool Handlers (“AWH”): Elders holds a 50% interest in AWH, Australia’s largest wool logistics company, which handles approximately half of the national clip.
Elders Toepfer Grain: ETG is a 50/50 JV between Elders and Toepfer International. ETG leverages the accumulation capability of the Rural Services network and the international trading and risk management capabilities of Toepfer International.
• Livestock Export & Trading: Elders’ operations consist of live export and feedlots, which provides additional sales and marketing options for clients.
Live export is conducted through North Australian Cattle Company and Universal Live Exports, which facilitate the trade of feeder and breeding cattle respectively to international markets, including Indonesia, Mexico, China, Russia and Turkey
• Feedlots and associated meat trading are conducted at three feedlots; Charlton, Killara (53% interest) and PT Elders Indonesia
China operations: Elders Fine Foods is involved in the importation and distribution of Australian products in China.
Rural Bank: Elders holds a 40% interest in Rural Bank (formerly known as Elders Rural Bank), a joint venture with Bendigo and Adelaide Bank. Rural Bank is an APRA regulated authorised deposit taking institution that specialises in rural lending and also provides a range of depository products tailored to meet the needs of rural and metropolitan customers. Key products include term loans for rural investment, seasonal overdrafts, lines of credit drawn against equity in land, and regular savings and seasonal transactions accounts. Rural Bank has exclusive distribution rights for its range of products through Rural Services network.
Elders Insurance: As detailed earlier on this Section 4.4.1, Elders and QBE have agreed to establish the QBE Elders MGIA to undertake the distribution of insurance products in rural and regional Australia under the Elders brand for a 20 year term.

4. Overview of Elders and its Operations

4.4.1.2 Recent developments and future direction

Following a strategic review in mid-2008, Rural Services management began implementation of a significant transformation program aimed at achieving a substantial improvement in the financial performance of the business. The three phase transformation program is one year into a three to four year plan. Phase 1, which concentrated on the restructure of operations, is largely complete with focus now moving to drive business performance and growth.

FY08	FY10	FY12

1. Restructure operations Go-to-market strategy • Revised org structure • Regional transformation •	2. Drive business performance & growth Sales and margin growth • Supply chain • IT and systems upgrade • Branch/network • structure People, performance • and rewards	3. Continue building on transformed foundation Performance culture • Fill gaps in core geographies/products/ • sector/client Strategic growth opportunities •

==> picture [465 x 29] intentionally omitted <==

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

Phase I Phase II Phase III
----- End of picture text -----

Phase I	Phase II	Phase III

Go-to-market strategy • Market segmentation • Key account • management Pricing initiatives • Sales and performance • culture Incentive programs • Revised organisational • structure Support centres • centralised, rationalised and standardised Regional transformation • State structures • dismantled 20 • distinct agri-orientated regions	Sales & margin growth • Supply chain • Distribution centres • Centralised procurement • Inventory management • Cost/cash focus • IT platform • ERP, CRM, POS, • HRMIS, BI Single company • management structure and processes Review branch/network •	Performance culture • Sales effectiveness • Performance management • Reward/recognition • Continual management focus supported by • incentive programs and new IT systems “Sweep and plug” strategy • Geography • Sector • Product • Client •

Elders Limited Prospectus

A number of factors are expected to improve the outlook for Rural Services turnaround in the year ending 30 September 2010. These factors include stabilising prices with price volatility experienced over FY2009 considered unlikely to repeat in the near term, reformed inventory management and procurement to reduce impact of future price volatility, improved demand expected from normal input application rates, expected recovery in rural business confidence due to favourable terms of trade and the stabilisation of the Rural Services business with new management in place and refinance and recapitalisation completed. The below charts illustrate the recent stabilising of fertiliser and glyphosate prices.

FERTILISER PRICES

GLYPHOSATE PRICES

==> picture [459 x 120] intentionally omitted <==

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

$/tonne $/litre
MAP 2,000 540 Factor 20
DAP 450 Factor
Urea 1,500 15
1,000 10
Source: 500 Source: 5
Elders Elders
Management Management
0 0
Jul Oct Jan Apr Jul Oct Jan Apr Jul Jul Oct Jan Apr Jul Oct Jan Apr Jul
07 07 08 08 08 08 09 09 09 07 07 08 08 08 08 09 09 09
----- End of picture text -----

Elders believes it is well positioned to benefit from the expected recovery in the rural services sector in FY2010 with margins expected to improve significantly based on the improved outlook for FY2010. Further benefits from Rural Services cost initiatives are expected to deliver an increased EBIT margin of 0.6%. Elders has set itself a medium-term EBIT margin target of 5–6% consistent with research and industry benchmarks.

As part of the transformation program, Elders has significantly reduced its operating and overhead cost structure and realigned the business for improved performance. The charts below highlight the change in cost for each quarter of the 12 months to 30 June 2009 compared to the previous corresponding period.

HEAD COUNT

==> picture [224 x 120] intentionally omitted <==

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

FY2008 Down 11% Down 12%
(Jun–YE)
FY2009
(Jun–YE)
Down 43%
3,008 2,666 1,162 660 2,940 2,593
Permanent Casual FTE
----- End of picture text -----

SUPPORT CENTRE COSTS ($M) – QUARTERLY

==> picture [224 x 120] intentionally omitted <==

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

Down 20%
FY2008
(Jun–YE)
FY2009
(Jun–YE)
16 19 13 14 16 18 22 17
September December March June
----- End of picture text -----

4. Overview of Elders and its Operations

NETWORK COSTS ($M) – QUARTERLY[1]

==> picture [224 x 120] intentionally omitted <==

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

Down 8% Down 7% Down 8%
FY2008
(Jun–YE)
FY2009 [1]
(Jun–YE)
61 63 58 53 59 55 59 54
September December March June
----- End of picture text -----

SG&A ($M)[2] – QUARTERLY[1, 2]

==> picture [224 x 120] intentionally omitted <==

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

Down 4% Down 3% Down 11%
FY2008
(Jun–YE)
FY2009
(Jun–YE)
82 85 75 72 79 77 85 76
September December March June
----- End of picture text -----

FY2009 defined as 12 month period ending 30 June 2009.
SG&A excludes New Zealand network costs for comparative purposes.

4.4.2 Forestry

4.4.2.1 overview

Forestry operations are conducted through ITC Limited (“ITC”), a wholly owned subsidiary of Elders comprising:

==> picture [33 x 45] intentionally omitted <==

Forestry

Other

Delivers plantation establishment and management services through the sale of MIS projects
Pulp and solid eucalypt, sandalwood, teak and red mahogany plantations
Manager of 165,000 hectares of Forestry Stewardship Council certified hardwood plantations (as at July 2009)
Ownership of 47,000 hectares of land under plantation
Plantation Pulpwood Terminals
50/50 JV with Timbercorp for Albany Export Facility
ASX-listed Forest Enterprises Australia (“FEA”) – 31% interest
600,000m[3] per annum softwood and hardwood processing capacity
Provides MIS investments in hardwood plantation products
Manages circa 70,000 hectares of hardwood plantations
ASX-listed Agricultural Land Trust (AGJ) – 49.9%[1] • 24,223 hectares of land of which 17,020 hectares is encumbered with ITC forests
Included in Corporate for financial reporting purposes.

ITC’s forestry operations have Forestry Stewardship Council certification and as of 30 June 2009 comprised an area under management in excess of 165,000 hectares. Approximately 28% of the ITC estate is owned with the balance leased.

Forestry operations comprise the establishment and management of hardwood plantations and output harvesting and marketing, managed on behalf of investors, who have funded the plantations through the investment in managed investment schemes.

The plantations are predominantly eucalypt, with smaller plantings in sandalwood, teak and red mahogany. They are located in south-west Western Australia, Kununurra, the Green Triangle region of south-west Victoria and south-east South Australia and northern Queensland.

Elders Limited Prospectus

ITC exports wood chips to Japanese customers from Albany, Western Australia through its investment in Plantation Pulpwood Terminals (trading as Albany Chipping Terminal), a 50/50 JV with Timbercorp. Plantation Pulpwoods Terminals owns and operates a 1 million tonne p.a. capacity woodchip handling and loading facility.

ITC has a 31% interest in FEA, an ASX listed integrated MIS forestry and timber company. Equity accounted earnings from FEA are included in ITC earnings.

4.4.2.2 Recent developments and future direction

Following recent industry developments, a strategic review of the forestry business has been undertaken with various alternatives currently being considered. Until an outcome is finalised, ITC management will continue to develop alternative sustainable funding models to reduce reliance on MIS products as a funding source and is considering a number of retail, wholesale and institutional funding options.

ITC expects to lease all future land requirements allowing the capital release from the existing land bank through land sales as plantations mature or through sale and lease back programs. ITC is expected to at least maintain its market share, with reduced competition following the exit of Timbercorp and Great Southern and the removal of specific factors affecting ITC’s MIS sales, such as concerns over Elders’ financial position.

On 30 August 2009, Elders and its subsidiary, ITC Limited, entered into a binding agreement for the sale of its timber processing operations and 50% interest in SmartFibre to Gunns Limited. See Section 9.5.3 for further details.

4.4.3 Futuris Automotive

4.4.3.1 overview

Futuris Automotive’s primary operations encompass the design, manufacturing and supply of automotive interiors solutions (Interiors) and a minority investment in Air International Thermal Systems (Thermal). Interiors is Australia’s leading domestic based supplier of automotive interior solutions.

100%

35%

Interiors

Thermal

Production facilities in Australia, China and South Africa
Products include seating, steering, pedals, window regulators, door trims, headliners, floor carpets, parcel shelves, nvh accoustics and aftermarket
35% stake – other 65% owned by Unitas Asia (formerly CCMP Asia)
Productive line focused on HVAC & Power Train Cooling systems in US, Asia and Australia
Anhui JV – 70/20/10 with Chery and Wuhu Economic Development Authority (WEDA)
Feltex – 50/50 JV with Feltex South Africa
Plexicor – 50% interest

4. Overview of Elders and its Operations

The Interiors business designs and supplies automotive interior solutions. Interiors’ product range includes seating, steering, pedals, window regulators, door trims, headliners, floor carpets, parcel shelves, NVH (noise, vibration, hardness) acoustics and aftermarket. These products are supplied to high profile automotive manufacturers including GM Holden, Ford and Toyota. The supply of these products is assisted through a number of joint venture partnerships with automotive market participants globally including:

Anhui JV : a joint venture in Anhui province (China), whose operations involve the manufacture of seating systems for supply to Chery and JAC
Feltex JV : a joint venture in South Africa, whose operations involve the manufacture of floor carpet and mats for Daimler (Mercedes Benz)
Plexicor : a 50% interest in Plexicor, a manufacturer of soft trim and NVH acoustics products for supply to Toyota, Ford and Holden

The Thermal business is engaged in the design and manufacturing of HVAC (air conditioning) and Power Train Cooling systems in the US, Asia and Australia. Thermal’s products are supplied to global automotive manufacturers including GM, Suzuki, Ford, Mitsubishi and Mazda.

4.4.3.2 Recent developments and future direction

Futuris Automotive has been identified as a non-core asset to be divested when market conditions improve and a sale is achievable at fair value. The business has been restructured to align with substantial reductions to automotive build schedules arising from current economic conditions and as a result is expected to deliver positive cash flow. Management of the business will continue to focus on the maintenance of positive cash flow, leveraging returns on volume turnaround and positioning for a favourable sale outcome when market conditions improve. In respect of Plexicor, a put option exists in favour of the Other Plexicor Shareholders, which if exercised, requires Futuris Automotive to purchase the balance of Plexicor. This put option is discussed in further detail in Section 7.1.3.4.

Given Futuris Automotive’s restructured cost base, the business is considered well positioned to benefit from significant revenue upside once industry volumes recover.

==> picture [596 x 562] intentionally omitted <==

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

Elders Limited Prospectus 35
5
----- End of picture text -----

Historical Financial Information

5. Historical Financial Information

5.1 Introduction

This section contains:

a summary of Elders’ key financial results as at and for the year ended 30 June 2008 and as at and for the 12-month period ended 30 June 2009; and
the Elders pro forma balance sheet as at 30 June 2009 (“Pro Forma Balance Sheet”) adjusted for the effect of the gross underwritten proceeds of the Equity Raising, the sale or expected sale of certain assets and investments and the refinancing arrangements;

(together, the “Financial Information”).

The Financial Information has been prepared in accordance with the accounting policies set out in Elders’ 30 June 2008 Annual Report (“Annual Report”), unless otherwise disclosed due to a change to accounting policies since that date. The Financial Information is presented in an abbreviated form and does not contain all the disclosures that are usually provided in an Annual Report prepared in accordance with the Corporations Act and therefore cannot be expected to provide as full an understanding of the financial performance, position and cash flows of Elders as an Annual Report.

The Financial Information as at and for the year ended 30 June 2008 has been derived from Elders’ audited financial statements contained in the Annual Report. The Financial Information as at and for the 12-month period ended 30 June 2009 has been derived from Elders’ audited financial results contained in Elders’ Change in Balance Date Appendix 4F lodged with ASX on 4 September 2009 (“Appendix 4F”).

The Pro Forma Balance Sheet has not been audited and gives effect to the following transactions as if they had occurred on 30 June 2009:

the Equity Raising, the gross underwritten proceeds of which equal $475 million and which is the subject of this Prospectus;
the sale of Elders Insurance Ltd and Elders Insurance Agencies Pty Ltd, inclusive of its insurance distribution operations, which will be conducted by a joint venture between QBE and Elders (25% interest) under a 20 year exclusive distribution agreement as described in Sections 5.5.6.1 and 9.5.2;
the sale of ITC Timber Pty Ltd, an entity which holds Elders’ hardwood timber processing operations as well as its 50% stake in Smartfibre Pty Ltd, and was owned indirectly by Elders at 30 June 2009; and
the refinancing of the Company’s debt facilities as described in Section 9.5.1.

In addition, the reconciliation of pro forma net debt to actual net debt as at 30 June 2009 assumes the completion of the proposed sale of Elders’ investment in Hi-Fert for an amount equating to its carrying value at 30 June 2009. The Pro Forma Balance Sheet does not give effect to the assumed sale of Hi-Fert.

Elders Limited Prospectus

5.2 Selected consolidated historical financial information

5.2.1 Consolidated historical income statement

The following table sets out the Elders’ consolidated historical income statement for the year ended 30 June 2008 and the 12-month period ended 30 June 2009.

12-month period ended30June2009.
	Consolidated	Consolidated
	audited	audited
12-month	period ended	Year ended
	30June2009	30June2008
Continuing operations	$ millions	$ millions
Sale revenue	2,627.7	3,274.7
Cost of sales	(1,904.2)	(2,426.1)
Other revenues	85.6	112.5
Other expenses	(1,065.7)	(869.8)
Share of net profts/(losses) of associates and joint ventures accounted for using the equity method	0.5	51.2
Proft/(loss) on sale of non current assets	25.4	(2.4)
Proft/(loss) from continuing operations before net fnance cost and income tax expense	(230.7)	140.1
Interest revenue	23.5	15.4
Finance costs	(75.2)	(72.3)
Proft/(loss) from continuing operations before income tax expense	(282.4)	83.2
Income tax (expense)/beneft	30.5	(7.7)
Proft/(loss) from continuing operations after income tax expense	(251.9)	75.5
Net proft of discontinued operations and gain on disposal of discontinued operations, net of tax	(165.0)	(29.4)
Net proft/(loss) for the year	(416.9)	46.1
Attributable to:
Minority interest	(1.5)	9.6
Members of the parent	(415.4)	36.5

5.2.2 Underlying profit

Included in the consolidated income statement above are a number of income and expenditure items which were outside the normal operations of Elders. These items primarily relate to impairments and write downs of non-core assets and investments of Elders and restructure costs. In the table below, these items have been disclosed and deducted from or added to, as appropriate, net profit (loss) for the purposes of calculating unaudited “underlying profit”, which is a measure that the Directors and management of Elders find helpful in evaluating the day-to-day performance of Elders because it excludes items that have little or no significance to Elders’ day-to-day operations and better reflects the operating position of the companies and divisions that make up the Elders Group.

5. Historical Financial Information

	12-month period ended	Year ended
	30June2009	30June2008
	$ millions	$ millions
Net proft/(loss) for year after tax	(416.9)	46.1
Minority interest	1.5	(9.6)
Proft/(loss) attributable to members of the parent company	(415.4)	36.5
Adjusted as follows:
Impairments
Rural Services	21.2	3.9
Forestry	34.0	(0.9)
Financial Services	–	(1.7)
Corporate	4.2	–
	59.4	1.3
Restructuring, redundancy, refnancing and relocation costs
Rural Services	42.8	16.8
Forestry	–	1.0
Automotive	39.5	6.4
Financial Services	–	0.3
Corporate	17.5	–
	99.8	24.5
Proft/(loss) of Investments
Rural Services	(19.7)	2.6
Financial Services	1.4	–
Corporate	5.2	(9.9)
	(13.1)	(7.3)
Writedown of assets to be divested/discontinued
Rural Services	23.6	–
Corporate	13.4	–
Forestry	40.0	–
	77.0	0
Proft/(loss) after impairments and one-offs	(192.3)	55.0
Discontinued operations
Rural Services	12.5	7.4
BWK	158.7	–
Automotive	–	8.2
Corporate	(0.4)	–
AA Co	(5.4)	–
Telco	–	13.6
	165.4	29.2
Proft/(loss) after impairments, one-offs and discontinued operations – as per the underlying proft/(loss) as disclosed in the Appendix4F and4E respectively	(26.9)	84.2

It should be noted that no pro forma adjustments for events occurring after 30 June 2009 have been reflected in the above table.

Elders Limited Prospectus

5.3 Balance sheets

The following table sets out Elders’ consolidated historical balance sheet as at 30 June 2008 and 2009.

	audited as at	audited as at
	30June2009	30June2008
	$ millions	$ millions
Cash and cash equivalents	392.5	244.0
Trade and other receivables	673.8	633.8
Livestock	42.9	37.0
Inventories	319.3	396.9
Derivative fnancial instruments	7.0	0.7
Non current assets classifed as held for sale	77.8	–
Other	138.9	132.3
Total current assets	1,652.2	1,444.7
Receivables	261.0	241.3
Forestry	27.0	25.7
Other fnancial assets	18.9	27.2
Investments accounted using equity method	318.0	694.5
Property, plant and equipment	156.8	313.0
Investment properties	309.7	256.4
Intangibles	271.6	306.8
Deferred tax assets	145.3	79.2
Other	19.8	27.1
Total non current assets	1,528.1	1,971.2
Total assets	3,180.3	3,415.9
Payables	724.7	966.7
Interest bearing loans and borrowings	365.8	164.9
Current tax payable	30.1	32.0
Derivatives	36.8	–
Provisions	317.7	208.1
Total current liabilities	1,475.1	1,371.7
Payables	0.6	–
Interest bearing loans and borrowings	776.8	550.7
Derivative fnancial instruments	–	52.4
Deferred tax liabilities	76.0	53.8
Provisions	104.0	91.1
Total non current liabilities	957.4	748.0
Total liabilities	2,432.5	2,119.7
Net assets	747.8	1,296.2
Contributed equity	737.5	694.1
Hybrid equity	145.2	145.2
Reserves	(35.3)	16.2
Retained earnings	(106.8)	354.0
Total parent entity interest in equity	740.6	1,209.5
Minority interest	7.2	86.7
Total equity	747.8	1,296.2

5. Historical Financial Information

5.4 Statement of cash flows

The following table sets out Elders’ consolidated historical statement of cash flows for the year ended 30 June 2008 and the 12-month period ended 30 June 2009.

The following table sets out Elders’ consolidated historical statement of cash fows for 12-month period ended30June2009.	the year ended30June2008	and the
		Consolidated
	audited	audited
	12-month period ended	Year ended
	30June2009	30June2008
	$ millions	$ millions
Receipts from customers	6,683.1	8,979.5
Payments to suppliers and employees	(6,999.5)	(8,890.9)
Dividends received	20.3	28.8
Interest received	18.3	13.6
Interest and other costs of fnance paid	(75.4)	(72.3)
GST (paid)/refunded	(14.0)	(15.3)
Income taxes (paid)/refunded	(14.7)	(30.3)
Other operating infows/(outfows)	11.1	(27.2)
Net operating cash fows	(370.8)	(14.1)
Payment for property, plant and equipment and investment properties	(63.8)	(129.8)
Payment for investments	(15.5)	(107.5)
Payment for design and development	(3.9)	(7.1)
Proceeds from sale of property, plant and equipment and investment properties	8.2	97.8
Proceeds from sale of investments	235.9	29.2
Proceeds from disposal of controlled entities, net of cost disposed	29.3	9.3
Loans to associated entities and related parties	(25.5)	(28.0)
Loan repayments by associated entities and related parties	5.1	–
Loans to growers	(16.4)	(5.2)
Loans repaid by growers	3.1	4.3
Loans repaid by third parties	–	52.3
Payment for other business	(4.7)	–
Payment for controlled entities, net of cash acquired	0.7	2.3
Net investing cash fows	152.5	(82.4)
Proceeds from issue of shares and other equity	–	7.1
Proceeds from borrowings	418.6	250.2
Repayment of borrowings	(37.4)	(148.2)
Principal repayments of lease liabilities	(1.1)	(1.3)
Dividends paid	(37.4)	(58.3)
Dividends underwritten	26.9	46.8
Partnership profts	(2.8)	–
Net fnancing cash fows	366.8	96.3
Net increase/(decrease) in cash held	148.5	(0.3)
Cash/(overdraft) at the beginning of the fnancial year	244.0	244.3
Cash/(overdraft) at the end of the fnancial year	392.5	244.0

Elders Limited Prospectus

5.5 Summary of significant accounting policies

5.5.1 Corporate information

This section sets out the significant accounting policies of Elders. Further information on Elders’ accounting policies is set out in the Annual Report. The Financial Information of Elders as at and for the year ended 30 June 2008 and as at and for the 12-month period ended 30 June 2009 was authorised for issue in accordance with a resolution of the Directors.

5.5.2 Changes in accounting policies

Since 1 July 2008, there have been no new standards and interpretations issued, mandatory for annual periods beginning on or after 1 July 2009, that have any effect on the financial position or performance of Elders.

5.5.3 Statement of significant accounting policies

5.5.3.1 Basis of accounting

The Financial Information has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards.

The Financial Information has been prepared on a historical cost basis, except for investment properties, valuation of livestock carrier, derivative financial instruments and available for sale financial assets that have been measured at fair value, and biological assets that are measured at fair value less estimated point of sale costs. The carrying values of recognised assets and liabilities that are hedged with fair value hedges are adjusted to record changes in the fair values attributable to the risks that are being hedged.

The accounting policies and disclosures are consistent for the periods presented.

5.5.3.2 Basis of consolidation

The consolidated financial statements include the Financial Information of the parent entity, Elders Limited and its controlled entities.

All inter-entity balances and transactions have been eliminated. Where an entity either began or ceased to be controlled during the year, the results are included only from the date control commenced or up to the date control ceased.

Subsidiaries are fully consolidated from the date on which control was obtained and cease to be consolidated from the date on which control was transferred out of Elders (“the Group”).

5.5.3.3 Significant accounting estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities are in relation to the impairment of goodwill and intangibles with indefinite useful lives.

The Group determines whether goodwill and intangibles with indefinite useful lives are impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash generating units to which the goodwill and intangibles with indefinite useful lives are allocated.

5. Historical Financial Information

5.5.4 Income tax

5.5.4.1 Tax position of Elders

The following table sets out the income tax position of Elders for the year ended 30 June 2008 and the 12-month period ended 30 June 2009.

	Consolidated audited audited 12-month period ended Year ended 30June2009 30June2008 $ millions $ millions (132.2) 11.1 (1.3) (12.2) 1.6 (4.1) 3.0 4.6 16.2 (1.4) 1.1 (7.0) 87.9 – (23.7) (9.0) (30.5) 7.7 6.8 (16.7) (23.7) (9.0)
Prima facie income tax expense at30% (2008:30%)
Share of associate (profts)/losses
Non assessable (profts)/losses
Non deductible other expenses and amortisation
Non transferable foreign losses
Reconciliation to tax returns and other
Impairment of assets
Aggregate income tax expense/(beneft)
Aggregate income tax expense/(beneft) is attributable to:
– Continuing operations
– Discontinued operations:

5.5.4.2 Deferred tax assets

In the 12-month period ended 30 June 2009, deferred tax assets comprised revenue losses of $73 million (2008: $27 million) and capital losses of $16 million (2008: $6 million), and other temporary losses of $56 million (2008: $46 million). The Directors consider it probable that revenue losses will be utilised over the next 7 years, based on management’s profit projections and subject to normal tax law restrictions on loss utilisation. In relation to capital losses, the Directors expect these to be utilised by transactions over the next 1 to 2 years.

5.5.4.3 Deferred tax liabilities

In the 12-month period ended 30 June 2009, deferred tax liabilities comprised deferred MIS income of $42 million (2008: $31 million) and other temporary differences of $34 million (2008: $23 million).

5.5.4.4 Tax payable

Although the deferred tax assets recognised are stated above, it should also be noted that there are significant additional unbooked tax losses. Based on forecasted taxable income calculations there will not be any tax payable for the next 5 to 7 years.

Elders Limited Prospectus

5.5.5 Contributed equity

The following table sets out Elders’ contributed equity as at 30 June 2008 and 2009.

5.5.5 Contributed equity The following table sets out Elders’ contributed equity as at30June2008and2009.
	Consolidated
	as at as at 30June2009 30June2008 $ millions $ millions
Contributed equity Ordinary shares:Issued and fully paid up	737.5 694.2
Shares on Issue	Number of Shares
Movements in ordinary shares Opening balance as at1July2008	780,545,644
Dividends underwritten	23,812,167
Dividend reinvestment plan	14,461,482
Issued capital, employee bonus shares	345,752
Closing balance as at30June2009	819,165,045
	Consolidated
	as at as at 30June2009 30June2008 $ millions $ millions
Hybrid equity Issued and fully paid up	145.2 145.2

5.5.6 Subsequent events

5.5.6.1 Sale of insurance business

On 31 July 2009, the Group announced that it had signed a Heads of Agreement with QBE to sell Elders Insurance Limited and Elders Insurance Agencies Pty Ltd, inclusive of its insurance distribution operations, which would be conducted by a joint venture between QBE and Elders (25% interest) under a 20 year exclusive distribution agreement. Total cash consideration for the sale of the insurance operations is approximately $270 million. QBE and Elders entered into binding contracts to effect the sale on 31 August 2009 with settlement scheduled for 30 September 2009 (subject to the timing of, and conditional upon the receipt of, regulatory approval). In addition QBE has agreed to subscribe for $55 million of New Shares in the Conditional Placement.

5.5.6.2 Sale of timber business

On 31 August 2009, the Group announced that it had entered into a binding purchase and sale agreement with Gunns Limited for the sale of ITC Timber Pty Ltd, an entity which holds Elders’ hardwood timber processing operations as well as its 50% stake in SmartFibre Pty Ltd, for gross proceeds of approximately $100 million.

5.5.6.3 anticipated sale of hi-Fert

As at 30 June 2009, Elders treated the investment in Hi-Fert as an asset held for sale. At the date of this Prospectus, Elders is undertaking a sale process and has received indicative offers for the Hi-Fert investment.

5.5.6.4 other

There is no other matter or circumstance that has arisen since 30 June 2009 which is not otherwise dealt with in this Prospectus or in the Financial Information, that has significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial periods.

5. Historical Financial Information

5.5.7 Contingent liabilities and assets

5.5.7.1 Disputed tax assessments

As previously disclosed, Elders has received amended income tax assessments from the Australian Taxation Office relating to three separate matters which are disputed.

The first matter relates to the capital gain arising on the disposal of Elders’ interest in its Building Products division (which Elders has subsequently divested) in October 1997. Elders has appealed the amended assessments increasing the capital gain. Management considers the current provisioning in relation to this matter to be adequate and will vigorously defend the assessments through the appeal process.

The second matter relates to the utilisation of a capital loss arising on the disposal of the Elders wool handling business in 1998 and utilised during the years 1998 to 2003. The amended assessments deny the capital loss. Elders continues to be of the view that current provisioning is adequate in respect of these assessments. Elders is confident of the position it has adopted and intends to defend vigorously the losses claimed.

The third matter relates to the utilisation of losses arising from the funding activities of Elders’ in-house financier. The amended assessments are attributable to the 2003 year denying the losses claimed. A provision has been raised against this potential exposure. Elders is confident of the position it has adopted and intends to defend vigorously the deductions claimed.

5.6 Results of operations by segment

The following table sets out Elders’ combined and segment results of operations for the year ended 30 June 2008 and for the 12-month period ended 30 June 2009 based on the current segment reporting structure prepared in accordance with AASB 114 Segment Reporting.

5.6.1 Results of operations by segment

5.6.1 Results of operations by segment
	12-month period ended	Year ended
	30June2009	30June2008
	$ millions	$ millions
External sales revenue
Rural Services	2,185.6	2,472.3
Financial Services	253.3	218.5
Forestry	184.9	191.3
Automotive	270.1	384.3
Investment & other	8.1	45.7
Total external sales revenue (including discontinued operations)	2,902.0	3,312.1
Reported EBITDA
Rural Services	(206.3)	36.2
Financial Services	23.2	23.0
Forestry	(57.2)	66.6
Automotive	(44.3)	42.2
Investment & other	(61.6)	(31.6)
Total reported EBITDA	(346.2)	136.4

Elders Limited Prospectus

	12-month period ended	Year ended
	30June2009	30June2008
	$ millions	$ millions
Underlying EBIT
Rural Services	9.6	57.4
Financial Services	22.7	22.4
Forestry	10.6	61.4
Automotive	(15.5)	26.2
Investment & other	(10.6)	4.3
Total underlying EBIT	16.8	171.7
Reported EBIT
Rural Services	(221.4)	20.9
Financial Services	22.3	22.4
Forestry	(63.4)	61.4
Automotive	(59.8)	26.2
Investment & other	(61.7)	(36.9)
Total reported EBIT	(384.0)	94.0
Interest Revenue	23.6	15.4
Borrowing costs	(80.2)	(72.3)
Income tax/beneft	23.7	9.0
Net proft/(loss) for the year	(416.9)	46.1
Minority interest	1.5	(9.7)
Net proft/(loss) attributable to the members of the parent entity	(415.4)	36.4

Reconciliation of EBITDA, EBIT and NPAT

			Restructuring,		write down
	12months ended		redundancy		of assets		12months ended
	30June2009	adjustments	and relocation	Proft/(loss)	to be divested/	Discontinued	30June2009
($ millions)	audited	for impairment	costs of Investments		discontinued	operations	Underlying
External sales revenue	2,627.7	–	–	–	–	–	2,627.7
Reported EBITDA from
continuing operations	(192.9)	57.6	127.4	(15.6)	78.1	–	54.6
Reported EBIT from
continuing operations	(230.7)	57.6	127.4	(15.6)	78.1	–	16.8
NPAT	(415.4)	59.4	99.8	(13.1)	77.0	165.4	(26.9)

5. Historical Financial Information

5.6.2 Segmental management discussion and analysis

The following section contains management’s discussion and analysis of Elders’ results for the year ended 30 June 2008 and the 12-month period ended 30 June 2009.

5.6.2.1 Rural Services

5.6.2.1Rural Services
	12-month period ended	Year ended
	30June2009	30June2008
	$ millions	$ millions
External sales revenue	2,185.6	2,472.3
Reported EBITDA	(206.3)	36.2
Reported EBIT	(221.4)	20.9
Adjustments from reported to underlying EBIT	231.0	36.6
Underlying EBIT	9.6	57.4

Following a buoyant year ended 30 June 2008, the 12-month period ended 30 June 2009 was characterised by unprecedented volatility, a dramatic fall in commodity prices in November and December 2008, substantial curtailment of discretionary spend by farmers and contracting margins. A number of management actions were instigated to respond to these conditions, including significant cost reduction programs, negotiation of retrospective rebates and working capital management initiatives which have resulted in a 30% reduction in farm supplies inventory levels over the 12 months to 30 June 2009. These actions had a positive impact on results, but were not enough to fully offset the impact of lower demand, lower sales volumes and falling prices brought by market conditions.

Rural Services initiated a major and long-term transformation program in the 12-month period ended 30 June 2009 designed to deliver substantial and sustainable improvement in the financial returns, market position and overall performance of Rural Service operations. Program elements include the simplification of the business back to its core, re-focusing the Rural Service operations on the client/customer, the research and development of a completely new “Go-To-Market” strategy to optimise Elders’ relevance to clients and deliver improved market share, divesting non-core assets, cost reduction, the appointment of experienced and appropriately skilled senior management, the establishment of a sales and returns focused culture and establishing a clear foundation to identify and execute opportunities for future growth including the achievement of efficiencies and savings from reform of procurement and supply chain management.

Both the 12-month period ended 30 June 2009 and the year ended 30 June 2008 sales results incorporate revenue from sources not included in the corresponding periods. The 12-month period ended 30 June 2009 incorporates sales revenue of $86 million from New Zealand operations, which were consolidated for the first time. The year ended 30 June 2008 results included sales revenue of $228 million from grain operations which were subsequently transferred to the equity accounted ETG joint venture and $23 million from horticulture activities now discontinued.

Rural Services recorded a $287 million year-on-year reduction in sales revenue. Features of the Australian Network revenue result by product include:

Farm supplies: revenue down 6% to $1,169 million and gross margin down 27% due to lower volumes and sharp contraction in prices of key lines such as agricultural chemicals and fertiliser.
Livestock: higher average prices for cattle and sheep offset the impact of lower volumes to leave revenue broadly unchanged.
Wool: bales sold fell 17% to 496k and the average price fell by 16% to $842 per bale.
Real Estate: sales revenue fell 29% following contraction in vendor and buyer activity.
Financial Services distribution: revenue fell 22% as demand for credit eased during the year and new banking distribution fee arrangements were applied.
Grain revenue arrangements were restructured around the Elders Toepfer Grain (ETG) joint venture, resulting in all trading sales being conducted through the ETG joint venture with the Australian Network earning $2.0 million of accumulation fees.

The New Zealand operations were consolidated for the first time in the 12-month period ended 30 June 2009, recording sales revenue of $86.3 million including farm supplies of $49.2 million, wool of $21.7 million, livestock of $12.3 million, real estate of $1.1 million and financial services distribution of $2.0 million.

Features of Network related sales include:

Sales of $404.4 million from Livestock Export & Trading (FY08: $302.9 million). The growth was sourced from significantly increased live export and to a lesser extent feedlots.
Sales of $11.6 million from Elders Fine Foods operations in China, which imports and distributes Australian agricultural produce.

Elders Limited Prospectus

Underlying EBIT of $10 million is $48 million lower than last year due to:

The contribution from the Australian Network being $64 million lower. More specifically:
The contribution from Farm Supplies was $41 million lower due to the impact of lower sales and margins from unprecedented price volatility in the commodities market and credit crunch from the global financial crisis.
The contribution from Real Estate was $19 million lower due to lower property sales and earning rate with increased competition in a soft market.
The banking distribution was $11 million lower due to a revised service fee agreement with Rural Bank.
- Offset by cost savings of $10 million.
New Zealand operations being consolidated for the first time, contributed a loss of $6 million compared to equity accounted loss of $2 million in the year ended 30 June 2008.
Livestock Export & Trading gains of $24 million from increased sales and margin and unrealised gain on foreign currency hedges.
Equity accounted earnings from:
Australian Wool Handlers (AWH) of $2.3 million (vs $2.8 million in FY08). AWH earnings contracted as wool bales handled fell due to smaller wool clip.
Elder Toepfer Grain (ETG) of $1.4 million being Elders’ 50% share of ETG’s earnings from the purchase and sale of grain. ETG sold 3.2 million tonnes of grain in the 12-month period ended 30 June 2009.

Non recurring items in the 12-month period ended 30 June 2009 of $231 million were made up of:

EBIT result and write downs of assets to be divested or discontinued comprising wool processing, abattoir interests, horticulture and fodder assets, aquaculture investments and RUN Corp.
Impairments booked in connection with retained assets including MV Torrens, PlantTech, AWH and New Zealand.
Costs associated with transformation program.

5.6.2.2 Forestry

5.6.2.2Forestry
	12-month period ended	Year ended
	30June2009	30June2008
	$ millions	$ millions
Forestry
External sales revenue	184.9	191.3
Reported EBITDA	(57.2)	66.6
Reported EBIT	(63.4)	61.4
Adjustments from reported to underlying EBIT	74.0	(0.0)
Underlying EBIT	10.6	61.4

Sales revenue declined by $6.4 million (3%) to $184.9 million, primarily due to:

a $5.3 million reduction in Forestry and MIS revenue, as lower establishment income was recognised in the 12-month period ended 30 June 2009 from MIS sales; and
Timber revenue being $0.8 million lower.

Underlying EBIT fell by $50.7 million to $10.6 million due to:

a $25 million reduction in Forestry and MIS EBIT. Lower MIS sales in the year ended 30 June 2008 and 12-month period ended 30 June 2009 reduced margin by $2.5 million, Forestry management costs for replants and Year 3 Fertiliser costs associated with the large 2005 project accounted for $12.0 million of the reduction, while a $2.4 million lower margin was generated from woodchip sales as a result of lower Japanese demand. The business also experienced an increase in lease costs of $9.1 million, due primarily to a sale and leaseback charge, which had previously been treated as interest below the EBIT line;
a $1.8 million increase in Timber EBIT;
a $13.2 million reduction in investment properties due to the revaluation of investment property uplift recognised in the year ended 30 June 2008 from the sale; and
a $13.6 million reduction in equity accounted income sourced from the shareholding in FEA (down $13.1 million to a loss of $2.1 million and Smartfibre joint venture (down $0.5 million to $0.7 million).

Reported EBIT included a total impairment writedown of $74.0 million to recognise impairments to the value of the shareholding in FEA ($34.0 million) and ITC Timber assets ($40 million).

5. Historical Financial Information

5.6.2.3 automotive

5.6.2.3automotive
	12-month period ended	Year ended
	30June2009	30June2008
	$ millions	$ millions
Automotive
External sales revenue	270.1	384.2
Reported EBITDA	(44.3)	42.2
Reported EBIT	(59.8)	26.2
Adjustments from reported to underlying EBIT	44.3	–
Underlying EBIT	(15.5)	26.2

For sales revenue, the year-on-year movement in revenue for the Automotive business is explained by a 28% year-on-year reduction in Australian volumes in the 12-month period ended 30 June 2009, resulting in reduced sales for the Interiors’ business unit for that period.

For reported EBIT, the year-on-year movement in the Automotive result can be broken down between a year-on-year trading variance of $40 million and year-on-year non-recurring items of $44 million. For the Interiors business, $20 million of the year-on-year trading variance is explained by a reduction in margin from reduced sales in the 12-month period ended 30 June 2009, offset to some extent by cost improvements. The remaining $20 million reduction is explained by a deterioration in trading performance in the 12-month period ended 30 June 2009, principally in the United States and Australia, for Elders 35% investment in Air International Thermal Systems.

The non-recurring items of $44 million in the 12-month period ended 30 June 2009 largely comprise asset impairments/asset write offs of $27 million, redundancy and restructuring costs of $13 million and Thermal non-recurring items of $4 million.

5.7 Pro Forma Balance Sheet

5.7.1 Basis of preparation of Pro Forma Balance Sheet

The Pro Forma Balance Sheet has been prepared for illustrative purposes only, to show the impact on the actual historical balance sheet as at 30 June 2009 of the following events as though they had occurred on 30 June 2009:

the gross underwritten proceeds from the Equity Raising which equals $475 million and which is the subject of this Prospectus, has been successful;
the sale of Elders Insurance Ltd and Elders Insurance Agencies Pty Ltd, inclusive of its insurance distribution operations, which would be conducted by a joint venture between QBE and Elders (25% interest) under a 20 year exclusive distribution agreement as described in Section 9.5.1 has been completed;
the sale of ITC Timber has been completed, as described in Section 5.5.6.2; and
the refinancing of the Company’s debt facilities has been successfully completed as described in Section 9.5.1.

In addition, at the date of this Prospectus, Elders is undertaking a sale process for its investment in Hi-Fert and has received indicative offers. As these negotiations are not completed and may not result in a transaction, the Pro Forma Balance Sheet does not give effect to the assumed sale of Elders’ investment in Hi-Fert. However, the transaction has been included in the reconciliation of pro forma net debt to actual net debt as at 30 June 2009 and in the Directors’ Forecasts in Section 6.

The Pro Forma Balance Sheet contained in this section is presented in abbreviated form and does not contain all the disclosures that are usually provided in an Annual Report prepared in accordance with the Corporations Act.

The Pro Forma Balance Sheet is not represented as being indicative of Elders’ views on its future financial position. The Pro Forma Balance Sheet is presented based on the specific pro forma adjustments and transactions and does not take account of the financial performance, cash flows or other movement in balance sheet items of Elders for the period from 30 June 2009 to the date of this Prospectus.

Further detail and analysis regarding the compilation of the Pro Forma Balance Sheet as presented in this table are included in Sections 5.7.3 to 5.7.6.

Elders Limited Prospectus

5.7.2 Pro Forma Balance Sheet

		De-consolidation	Net			Pro Forma
		of Elders	proceeds of			Balance Sheet
	audited	Insurance Group	Equity		Costs of	as at
as at30	June2009	and ITC Timber	Raising	Refnancing	refnancing	30June2009
	$ millions	$ millions	$ millions	$ millions	$ millions	$ millions
Current assets
Cash and cash equivalents	173.2	340.2	455.5	(465.6)	(36.7)	466.5
Cash and cash equivalents –
Elders Insurance Division	219.3	(219.3)	–	–	–	0
Trade and other receivables	673.8	(254.7)	–	–	–	419.1
Livestock	42.9	–	–	–	–	42.9
Inventories	319.3	(71.1)	–	–	–	248.2
Derivative fnancial instruments	7.0	–	–	–	–	7.0
Non current assets classifed
as held for sale	77.8	–	–	–	–	77.8
Other	138.9	(121.4)	–	–	–	17.5
Total current assets	1,652.2	(326.3)	455.5	(465.6)	(36.7)	1,279.0
Non current assets
Receivables	261.0	(32.9)	–	–	–	228.1
Forestry	27.0	–	–	–	–	27.0
Other fnancial assets	18.9	–	–	–	–	18.9
Investments in associates
and joint ventures	318.0	(1.7)	–	–	–	316.3
Property, plant and equipment	156.8	(27.7)	–	–	–	129.1
Investment properties	309.7	–	–	–	–	309.7
Intangibles	271.6	(33.6)	–	–	–	238.0
Deferred tax assets	145.3	(42.0)	–	–	–	103.3
Other	19.8	–	–	–	–	19.8
Total non current assets	1,528.1	(137.9)	0.0	0.0	0.0	1,390.2
Total assets	3,180.3	(464.3)	455.5	(465.6)	(36.7)	2,669.2
Current liabilities
Payables	724.7	(347.0)	–	(80.0)	–	297.8
Interest bearing loans and borrowings	365.8	–	–	(285.8)	–	80.0
Current tax payable	30.1	(4.4)	–	0.0	–	25.6
Derivatives	36.8	0.0	–	0.9	–	37.7
Provisions	317.7	(133.4)	–	0.0	–	184.3
Total current liabilities	1,475.1	(484.8)	0.0	(364.9)	0.0	625.4

5. Historical Financial Information

5.7.2 Pro Forma Balance Sheet continued

		De-consolidation	Net			Pro Forma
		of Elders	proceeds of			Balance Sheet
	audited	Insurance Group	Equity		Costs of	as at
as at30	June2009	and ITC Timber	Raising	Refnancing	refnancing	30June2009
	$ millions	$ millions	$ millions	$ millions	$ millions	$ millions
Non current liabilities
Payables	0.6	(0.1)	–	–	–	0.5
Interest bearing loans and borrowings	776.8	3.3	–	(100.7)	29.0	708.4
Deferred tax liabilities	76.0	(0.3)	–	–	–	75.7
Provisions	104.0	(74.5)	–	–	–	29.6
Total non current liabilities	957.4	(71.6)	0.0	(100.7)	29.0	814.2
Total liabilities	2,432.5	(556.4)	0.0	(465.7)	29.0	1,439.6
Net assets	747.8	92.1	455.5	0.0	(65.7)	1,229.6
Equity
Contributed equity	737.5	–	455.5	–	–	1,193.0
Hybrid equity	145.2	–	–	–	–	145.2
Reserves	(35.3)	–	–	–	–	(35.3)
Retained earnings	(106.8)	92.1	–	–	(65.7)	(80.5)
Parent entity interest in equity	740.6	92.1	455.5	0.0	(65.7)	1,222.4
Minority interest	7.2	–	–	–	–	7.2
Total equity	747.8	92.1	455.5	0.0	(65.7)	1,229.6
5.7.3 Deconsolidation of the Elders Insurance Group and other investments
The table below contains the reconciliation of the proft on the sale of the Elders				Insurance Group and ITC Timber post
30June2009year end.
						$ millions
Net assets sold are as follows:
Elders Insurance Limited						99.3
Elders Insurance Agencies						7.2
Insurance Assets within Rural Services						27.5
ITC Timber						96.2
Total net assets						230.2
Sale proceeds (net of costs) are as follow:
Insurance Division						265.5
ITC Timber						96.2
Total sale proceeds (net of costs)						361.7
Proft on sale						131.5
Tax on sale						(39.4)
Proft on sale post tax						92.1

Elders Limited Prospectus

5.7.4 Equity Raising proceeds

The table below contains the gross underwritten proceeds raised from, and costs associated with, the Equity Raising as described in Section 2 as though the Equity Raising had occurred as at 30 June 2009.

in Section2as though the Equity Raising had occurred as at30June2009.
		$ millions
Underwritten proceeds from the Equity Raising		475.0
Costs of the Equity Raising		(19.5)
Total		455.5
The number and value of ordinary shares after the underwritten component of the Equity Raising	is as follows.
	Number of Shares
	(millions)	$ millions
Balance as at30June2009	819.1	737.5
Conditional Placement at15cents per share (subject to Shareholder approval of it and the SPP)	2,666.6	400.0
Share Purchase Plan at15cents per share (underwritten, subject to Shareholder approval of it
and the Conditional Placement)	500.0	75.0
Total capital post underwritten component of the Equity Raising		1,212.5
Costs of the Equity Raising		(19.5)
	3,985.7	1,193.0

Under the Share Purchase Plan, an additional $75 million (500 million shares) may be raised. As this amount is not underwritten it is not part of the Pro Forma Balance Sheet.

5.7.5 Reconciliation of net debt

The adjustments set out in the table below reflect, and assume the completion of, the refinancing of Elders’ debt facilities, as described in Section 9.5.1, and the application of the gross underwritten proceeds of the Equity Raising and certain asset sales.

	$ millions
Net debt as at30June2009	997.2
Proceeds from sale of Elders Insurance	(270.0)
Proceeds from sale of ITC Timber	(100.0)
Proceeds from expected sale of Hi-Fert	(69.0)
Total underwritten proceeds from the Equity Raising	(475.0)
Working Capital Drawdown	80.0
Costs of Equity Raising, refnancing and sale of assets	89.7
Pro forma net debt as at30 June2009	252.9
Represented by:
Pro forma cash on hand	(466.5)
Estimated proceeds on sale of Hi-Fert	(69.0)
“Revolver” short term debt	80.0
Estimated long term debt	708.4
	252.9

The pro forma net debt of $252.9 million represents corporate debt facilities. In addition to the corporate debt facilities, Elders is party to an off balance sheet receivables securitisation programme that has capacity to purchase receivables from Elders and related entities of Elders up to an aggregate level of $320 million, with a forecast average utilisation of around $200 million. The Company is currently reviewing whether, under current accounting standards, to consolidate the programme onto the Company’s balance sheet. In the event the securitisation programme was consolidated for accounting purposes onto the Company’s balance sheet, it would result in an increase in Receivables and a corresponding increase in Interest bearing loans and borrowings to third parties and a reduction in cash. Notwithstanding any consolidation onto Elders’ balance sheet, once Elders has sold receivables under the securitisation programme, those receivables should be “ring-fenced” assets of the securitisation programme.

5. Historical Financial Information

5.7.6 Costs of the Equity Raising, refinancing and sale of assets

Costs associated with the Equity Raising and related transaction have been expensed except when that cost is directly attributable to the carrying of future debt, in which case the costs will be amortised over the period of the debt.

	$ millions
Costs expensed	36.7
Costs on sale of assets	4.5
Costs capitalised in long term debt	29.0
Costs treated as equity	19.5
Total costs of Equity Raising, refnancing and sale of assets	89.7

Elders Limited Prospectus

==> picture [360 x 40] intentionally omitted <==

==> picture [252 x 56] intentionally omitted <==

Forecast Financial Information

6. Forecast Financial Information

6.1 Introduction

This section contains information relating to the forecasts prepared by management and adopted by the directors of Elders for the three months ending 30 September 2009 (“Q5FY09F”) and the year ending 30 September 2010 (“FY10F” and, together, the “Directors’ Forecast”). In April 2009, Elders announced that it was changing its end of financial year from 30 June to 30 September, to provide better alignment with seasonal trading patterns and consistency with other Australian agricultural companies.

6.2 Basis of preparation of the Q5FY09F and FY10F forecast financial information

The Directors’ Forecast contained in Section 6.2.1 has been prepared by management and adopted by the Directors and is based on a number of estimates and assumptions that are subject to business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Group and the Directors, and upon assumptions with respect to future business decisions, which are subject to change.

The inclusion of the Directors’ Forecast in this Prospectus should not be regarded as a representation or warranty with respect to its accuracy or the accuracy of the underlying best estimate assumptions or that the Group will achieve, or is likely to achieve, any particular results. This information also assumes the success of the Group’s business strategies. The success of these strategies is subject to uncertainties and contingencies beyond the Directors’ and management’s control, and no assurance can be given that the strategies will be effective or that the anticipated benefits from the strategies will be realised in the period for which the Directors’ Forecast has been prepared or otherwise.

Events and circumstances often do not occur as anticipated and therefore actual results are likely to differ from the Directors’ Forecast. These differences may be material. Elders’ operations are subject to many external factors which can materially impact the Group’s financial performance. These factors include but are not limited to the risks outlined in Section 7.

The Directors believe that due care and attention has been used in the preparation of the Directors’ Forecast, and consider the assumptions to be reasonable when viewed as a whole. The Directors cannot and do not guarantee the achievement of the Directors’ Forecast. The information is not fact and prospective investors are cautioned not to place undue reliance on the Directors’ Forecast.

A summary of the key assumptions underlying the Directors’ Forecast is within management’s discussion and analysis in Section 6.2.2 and the summary of key assumptions within Section 6.2.3. Key assumptions and sensitivities in respect of the Directors’ Forecast are discussed in Section 6.2.4 and highlighted in Table 6.6.

The Directors’ Forecast, contained in tables 6.2, 6.3, 6.5 and 6.6, has been reviewed by Ernst & Young Transaction Advisory Services Limited whose Independent Accountant’s Report is included in Section 8. This review has been conducted in accordance with Australian Auditing and Assurance Review Standard AUS902 Review of Financial Reports .

It should be noted that, given the nature and magnitude of recent transactions undertaken by Elders, and of transactions proposed to be undertaken by Elders in the near future, and their respective effects on the business and structure, Elders’ historical and pro forma historical information included in this Prospectus may not be comparable to the forecast financial information included herein.

Elders Limited Prospectus

6.2.1 Directors’ Forecast

The table below sets out certain historical financial information and the Directors’ Forecast. The information in the table should be read together with the Financial Information, management’s discussion and analysis contained in Section 5.6.2 and management’s discussion and analysis contained in Section 6.2.2. Underlying EBITDA, EBIT and NPAT are adjusted for the effects of certain significant events during the year.

Table 6.1: Historical reported and underlying profit and loss

Table 6.2: Consolidated Q5FY09F and FY10F forecasts

	12months ended12months ended	12months ended12months ended	3months ended12months ended	3months ended12months ended	3months ended12months ended
	30June	30June	30September		30September
	2009	2009		2009	2010
($ millions)	audited	Underlying	($ millions)	Forecast	Forecast
Sales revenue	2,627.7		Sales revenue	552.4	2,336.4
Reported EBITDA			Reported EBITDA
from continuing operations	(192.9)		from continuing operations	(34.8)	112.6
Depreciation and amortisation	(37.8)		Depreciation and amortisation	(8.1)	(32.4)
Reported EBIT			Reported EBIT
from continuing operations	(230.7)		from continuing operations	(42.9)	80.2
Net interest expense	(51.7)		Net interest expense	(28.8)	(26.7)
PBT from continuing operations	(282.4)		PBT from continuing operations	(71.7)	53.5
Tax expense	30.5		Tax expense	14.8	0.5
Continuing NPAT	(251.9)		Continuing NPAT	(56.9)	54.0
Discontinued operations	(165.0)		Discontinued operations3	93.7	(1.6)
NPAT before minority interest	(416.9)		NPAT before minority interest	36.7	52.4
Minority interests	1.5		Minority interests	(0.6)	(2.3)
NPAT	(415.4)		NPAT	36.1	50.1
Analysis of underlying earnings			Analysis of underlying earnings
Add back: Signifcant items (post tax)1		223.1	Add back: Signifcant items (post tax)3	36.2	4.0
Add back: Discontinued operations1		165.4	Add back: Discontinued operations3	(93.7)	1.6
Underlying NPAT1		(26.9)	Underlying NPAT	(21.4)	55.7
Add back: Signifcant items (pre-tax)2		247.5	Add back: Signifcant items (pre-tax)	40.6	4.0
Underlying EBIT2		16.8	Underlying EBIT	(2.3)	84.2
Underlying EBITDA2		54.6	Underlying EBITDA	5.8	116.6

Refer to the reconciliation in Section 5.2.2.
Refer to the reconciliation in Section 5.6.1.
Refer to Table 6.3.

6. Forecast Financial Information

The table below sets out a breakdown of the forecast significant items and discontinued operations. The significant items comprise various transaction costs relating to the Equity Raising and debt refinancing as well as non-recurring transaction costs. The discontinued operations include profits on sale of assets and trading results of operations that are planned to be discontinued.

Table 6.3: Q5FY09F and FY10F significant items and discontinued operations

($ millions)			Q5FY09F			FY10F
	EBIT		NPaT	EBIT		NPaT
	impact	Tax effect	impact	impact	Tax effect	impact
Signifcant items
Debt refnancing costs	(25.5)	1.7	(23.8)	(3.1)	–	(3.1)
Equity raising costs	(3.4)	0.4	(3.0)	(0.5)	–	(0.5)
Hedge close out	(8.0)	2.4	(5.6)	–	–	–
Historic transaction,
project and other costs	(3.7)	(0.1)	(3.8)	(0.4)	–	(0.4)
Total	(40.6)	4.4	(36.2)	(4.0)	–	(4.0)
Discontinued operations
Proft on sale of EIL/Ins	135.9	(40.8)	95.1	–	–	–
EIL trading	0.2	(0.1)	0.2	–	–	–
Rural Services trading	(1.8)	0.2	(1.6)	(1.5)	(0.1)	(1.6)
Total	134.3	(40.6)	93.7	(1.5)	(0.1)	(1.6)

The table below sets out historical underlying financial information and the Directors’ Forecast underlying results shown by segment. The underlying information shown represents the historical and forecast results excluding the impact of one-off significant items and results from discontinued operations. The information in the table should be read together with the management discussion and analysis contained in Sections 5.6.2 and 6.2.2.

Elders Limited Prospectus

Table 6.4: Historical segmental profit and loss

Table 6.5: Segmental Q5FY09F and FY10F forecasts

	12months ended		3months ended12months ended	3months ended12months ended
	30June		30September	30September
	2009		2009	2010
($ millions)	Underlying	($ millions)	Forecast	Forecast
Sales revenue from continuing operations		Sales revenue from continuing	operations
Rural Services	1,919.2	Rural Services	489.4	1,973.3
Financial Services	253.4	Financial Services1	2.5	10.1
Forestry	184.9	Forestry	24.5	121.1
Automotive	270.1	Automotive	57.9	231.8
Corporate and other	0.1	Corporate and other	–	–
Intercompany eliminations	–	Intercompany eliminations	(21.9)	–
Total revenue from		Total revenue from
continuing operations	2,627.7	continuing operations	552.4	2,336.4
Underlying EBITDA		Underlying EBITDA
Rural Services	25.8	Rural Services	1.0	69.6
Financial Services	23.6	Financial Services1	2.8	18.7
Forestry	16.8	Forestry	0.5	16.2
Automotive	0.0	Automotive	4.1	21.8
Corporate and other	(11.6)	Corporate and other	(2.5)	(9.0)
Intercompany eliminations	–	Intercompany eliminations	(0.1)	(0.7)
Total underlying EBITDA	54.6	Total underlying EBITDA	5.8	116.6
Underlying EBIT		Underlying EBIT
Rural Services	9.6	Rural Services	(2.5)	55.5
Financial Services	22.7	Financial Services1	2.5	17.9
Forestry	10.6	Forestry	0.1	14.1
Automotive	(15.5)	Automotive	0.2	6.5
Corporate and other	(10.6)	Corporate and other	(2.5)	(9.0)
Intercompany eliminations	–	Intercompany eliminations	(0.1)	(0.7)
Total underlying EBIT	16.8	Total underlying EBIT	(2.3)	84.2

Will be combined with Rural Services.

6.2.2 Management’s discussion and analysis of the Directors’ Forecast

6.2.2.1 Consolidated

Group revenue for the three months ending 30 September 2009 is forecast to be approximately $552.4 million. Underlying EBITDA is forecast to be approximately $5.8 million and Underlying EBIT is forecast to be approximately ($2.3 million).

Group revenue for the year ending 30 September 2010 is forecast to be approximately $2,336.4 million. Underlying EBITDA is forecast to be $116.6 million and Underlying EBIT is forecast to be approximately $84.2 million. Comments on each of the business unit forecasts for the year ending 30 September 2010 are provided below.

6. Forecast Financial Information

6.2.2.2 Rural Services

Revenue for the year ending 30 September 2010 is forecast to be approximately $1,973.3 million. Underlying EBIT is forecast to be approximately $55.5 million.

Trading conditions are expected to stabilise with the level of price volatility experienced in the 12 months to 30 June 2009 considered unlikely to be repeated in the near term, input applications rates expected to normalise and rural confidence to recover in line with strong and improving farmer terms of trade. Significant improvements in the underlying performance of the Australian and New Zealand Network businesses is expected to see a significant improvement in Rural Services financial performance in the year ending 30 September 2010.

Margins are expected to improve due to the resolution of legacy inventory issues arising from the accumulation of stock at the top of the commodity cycle in the 15-month period ending 30 September 2009, and stable commodity prices and rainfall returning to average seasonal timing. Profitability is also expected to improve as progress is made from the renegotiation of contracts with key suppliers, as a result of the key account strategy with its increased focus on larger customers and reformed inventory management and procurement.

Agricultural chemical gross margin is expected to improve, driven by a turnaround in the profitability of glyphosate and other commodity-based products impacted by inventory write downs in the 15-month period ended 30 September 2009, and by increased volumes of products sold. An increase in gross margin from fertiliser is expected due to the higher forecast profitability of East coast phosphate and specialty blends. Other farm supplies, represented mainly by animal health products, are expected to grow in terms of revenue, due to a greater focus on the corporate sector, albeit at lower margins.

The real estate market is expected to partially recover in the year ending 30 September 2010, with increased activity in both broadacre and residential markets offsetting an expected drop in average prices. Margins are expected to improve due to a change in the mix of residential and broadacre sales.

Livestock sales are forecast to increase in line with increased cattle numbers, cattle prices and stronger sheep prices. The commercial cattle trading business is forecast to increase volumes which will assist in driving performance in the feedlots. In Livestock Export & Trading, feedlot utilisation is expected to increase to near capacity following the implementation of the Charlton growth strategy. Principal trading is also expected to increase on the back of the increased feedlot utilisation.

Earnings from Wool are expected to decline slightly, as demand has been severely affected by the global economic downturn which caused prices on the Eastern Market Indicator to reach a two and a half year low in March 2009.

SG&A is expected to reduce significantly based on cost reductions in the Australian and New Zealand Network business and other overhead expenses.

During the 15-month period ended 30 September 2009, Rural Services closed/divested a number of components of its operations. The majority of these assets have been classified as either held for sale or discontinued operations under AASB 5, and there is minimal impact on the forecast income statement.

Financial Services business will be reported as part of Rural Services going forward. Revenue for the year ending 30 September 2010 for Financial Services is forecast to be approximately $10.1 million. Underlying EBIT is forecast to be approximately $17.9 million. Elders recognises its interest in Rural Bank as its share of profit. It does not recognise any sales revenue.

RURAL SERVICES UNDERLYING EBIT BRIDGE FY2009[1] (SEP YE) TO FY2010 (SEP YE)

==> picture [460 x 144] intentionally omitted <==

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

3.5
55.5
3.6 12.7 18.8
6.4
8.4 35.0
4.8
1FY2009 LIVESTOCK GM REAL ESTATE GM FARM SUPPLIES GM NZ GM SG&A – COST REDUCTIONS OTHER DISCONTINUED EBIT FROM SALE OF INSURANCE FORECAST UNDERLYING FY2010 EBIT
----- End of picture text -----

12 months to 30 September 2009.

Elders Limited Prospectus

After tax profit contributed from Elders’ interest in Rural Bank is forecast to be slightly lower than in the 12-month period ended 30 June 2009 as the year ending 30 September 2010 will be the first full year of Elders’ lower shareholding (40% from 7 May 2009 as compared to the previous interest of 50%). Earnings from distribution of banking products are forecast to improve slightly due mainly to modest loan book growth in the year ending 30 September 2010. Contractual network and service fees are also expected to increase.

The impact on Rural Services earnings as a result of the sale of the insurance business to QBE will be a reduction in the level of distribution fees received compared to prior years, and this has been reflected in the forecast for the year ending 30 September 2010. It is expected that the completion date for the sale will be no later than 30 September 2009. Contribution to profit from the QBE Elders MGIA is forecast to commence from 1 October 2009 and has been incorporated within Rural Services’ contribution to the forecast for the year ending 30 September 2010. The forecast for the three months ending 30 September 2009 includes revenue from three months of trading of its insurance business and profit on sale of the insurance business which is expected to be sold to QBE before the start of the year ending 30 September 2010.

Investors should note the Directors’ Forecasts do not take into account any potential impact that may result if the existing off-balance sheet debtor securitisation programme is renegotiated and brought on-balance sheet during the forecast period.

6.2.2.3 Futuris automotive

Revenue for the year ending 30 September 2010 is forecast to be approximately $231.8 million. Underlying EBIT is forecast to be approximately $6.5 million.

Australian vehicle production volumes in the year ended 30 September 2010 are expected to remain consistent with levels in the 12 months ending 30 September 2009 with volumes stabilising over 2009, supported by government incentives. China light vehicle production is expected to grow in the year ending 30 September 2010, which will benefit Futuris Automotive through its China Anhui JV.

The profit improvement program commenced in the 15-month period ending 30 September 2009 in response to the fall in OEM volumes will also help to deliver improved factory margins and an overall reduction in indirect costs during the year ending 30 September 2010.

The investment in Thermal has been reclassified as held for sale resulting in the cessation of equity accounting. Thermal has a carrying value of zero.

6.2.2.4 Forestry

Revenue for the year ending 30 September 2010 is forecast to be approximately $121.1 million. Underlying EBIT is forecast to be approximately $14.1 million.

The Forestry operations of ITC are predicted to deliver MIS sales of $45 million in the year ending 30 September 2010, based on an increase in the market size, and an increase in ITC’s market share based on reduced competition in the market place.

A level of ongoing investor demand for MIS products is anticipated, and it is expected that the current parliamentary enquiry will lead to greater transparency for investors.

Forestry revenue is forecast to increase, due to an expected increase in sales of woodchips through harvests of third party plantations. Forestry costs are expected to fall as a result of lower planting requirements resulting from the lower MIS sales in the 15-month period ending 30 September 2009.

ITC is anticipating a 2% real increase in average land values, consistent with ITC’s historical accounting policy which assumes that a 2% real increase in value represents a conservative long-term estimate which accounts for any cyclical peaks and troughs in land values.

Corporate overheads and MIS overheads are forecast to decrease primarily due to cost saving initiatives and less corporate projects expected in the year ending 30 September 2010. Forestry overheads are expected to be consistent with the 15-month period ended 30 September 2009.

The impact on Forestry earnings for the forecast year ending 30 September 2010 as a result of the Timber Sale is a reduction in Underlying EBIT of $5.2 million, but savings in interest from the corresponding reduction in debt are expected to deliver an increase in profit before tax of $3.2 million. The disposal is effective as at 1 July 2009 and as such trading from operations has not been included in any forecast period. No loss on disposal has been forecast as the loss on disposal has been provided for in the 12-month period ending 30 June 2009 as an impairment loss.

6.2.2.5 Corporate

Underlying EBIT for the year ending 30 September 2010 is forecast to be approximately ($9.0 million). The financial performance of Corporate represents costs associated with the strategic direction and management of the Elders Group, and operation of the head office. The Corporate forecasts are based primarily on the underlying cost structure as at the 12-month period ending 30 June 2009 adjusted for non-recurring amounts identified by management.

6. Forecast Financial Information

During the Directors’ Forecast period it is assumed there will be no dividends, equity accounted profits or gains/losses on disposal of investments held within Corporate such as Hi Fert and Aqa Oysters & Seafood Delicacies.

Corporate also includes non-recurring costs expensed in the forecast period associated with the capital restructure of Elders.

The Directors’ Forecast assumes that at 30 September 2010, the Deferred Tax Asset value will increase by $9.6 million due to the Company policy of recognising unbooked tax losses based on a seven year outlook, subject to normal tax law restrictions on loss utilisation. This has the effect of reducing tax expense in FY10F by a corresponding amount.

The Directors’ Forecast is based on the assumption that the existing debt facilities will be successfully refinanced. Following the refinancing of debt facilities interest rate hedging is assumed to be restructured to a 60% hedge ratio on term debt for FY10F. The closing of the old hedge arrangements is assumed to have a one-off negative cash flow impact and loss recognised in the three month period ending 30 September 2009. The overall impact of restructuring the debt facilities is expected to decrease the overall interest expense in the year ending 30 September 2010 as it will allow Elders to take advantage of lower base interest rates.

6.2.3 Summary of general and specific assumptions underlying the Directors’ Forecast

6.2.3.1 General assumptions

Subject to, and in addition to, any other assumptions outlined in the management’s discussion and analysis of the Directors’ Forecast, the following general assumptions are relevant to the Directors’ Forecast:

no significant change in the economic conditions prevailing in Australia and the markets in which Elders operates;
no force majeure event takes place;
no significant change in the legislative regimes and regulatory environments in the jurisdictions in which Elders or its key customers or suppliers operate;
no change in applicable accounting standards that would have a material impact on Elders’ financial reporting or disclosure;
no material amendment to any material agreement relating to Elders’ business other than those noted in Section 9.5;
no material benefits or adverse effects arising from the actions from competitors;
no change in taxation legislation that would have a material impact on Elders’ financial position;
no material industrial action, environmental losses or material legal claims;
no material impact from the Carbon Pollution Reduction Scheme;
no material acquisitions or disposals other than those noted in Section 4.2.2; and
retention of key personnel.

6.2.3.2 Specific assumptions

Subject to, and in addition to, any other assumptions outlined in the management’s discussion and analysis of the Directors’ Forecast, the following specific assumptions are relevant to the Directors’ Forecast:

completion of the QBE Insurance Transaction;
completion of the Timber Sale;
existing debt facilities will be successfully refinanced;
sale of Hi Fert for at least book value;
completion of the underwritten portion of the Equity Raising;
no changes in the tax loss recoupment policy;
interest rates on debt maintain a flat base rate throughout the forecast period plus the applicable bank debt margin as specified in the term sheet for each tranche; and
any renegotiation of the existing securitisation programme will be on consistent terms to those currently in place.

6.2.4 Sensitivity analysis

The Directors’ Forecast is based on a number of economic and business assumptions about future events, as set out in Sections 6.2.2 and 6.2.3. The Directors’ Forecast is considered to be sensitive to movements in a number of key assumptions, and a summary of the likely effect of movements in certain key assumptions on the FY10F EBIT is set out below.

Care should be taken in interpreting these sensitivities. The sensitivity analysis has been provided to assist potential investors in their assessment of the future performance of Elders. These sensitivities treat each movement in the variables in isolation whereas, in reality, the movements could be interdependent and management may take corrective action. The effects of movements may offset each other or may be additive. The effects on FY10F EBIT presented for each sensitivity are not intended to be indicative or predictive of the likely range of outcomes that may occur with respect to each sensitivity.

Elders Limited Prospectus

Table 6.6: Sensitivity analysis

Table6.6: Sensitivity analysis
		EBIT Impact	EBIT Impact
Sensitivity for the year ending30September2010	Notes	+$m	–$m
Rural Services
Real estate commission rate [+/–0.2%]	1	+$2.4m	–$2.4m
Real estate turnover [+/–10%]	2	+$3.5m	–$3.5m
Farm supplies fertiliser gross margin [+/–1.0%]	3	+$4.0m	–$4.0m
Farm supplies AgriChem gross margin [+/–1.5%]	4	+$5.2m	–$5.2m
Farm supplies Animal Health sales [+/–20%]	5	+$6.3m	–$6.3m
Livestock agency commission rate [+/–0.15%]	6	+$2.8m	–$2.8m
Livestock agency turnover [+/–5.0%]	7	+$4.6m	–$4.6m
Rural Bank – loan volume growth [+/–$100m]	8	+$0.3m	–$0.3m
Rural Bank – net interest margin (NIM) [+/–10bps]	9	+$1.2m	–$1.2m
Futuris Automotive
OEM volumes [+/–10%]	10	+$6.2m	–$6.2m
Forestry
MIS sales [+/–$10.0m]	11	+$2.0m	–$2.0m

Notes

Changes in real estate commission rates : The Directors’ Forecast is sensitive to the assumed real estate commission rates which can be impacted by the level of competition and number of properties in the market. Based on this, a sensitivity has been included with the impact of a 20 basis point movement in commission rates on the 30 September 2010 Forecasts.
Changes in real estate turnover rates : The turnover of real estate properties directly affects revenues and earnings and is subject to real estate market conditions. To show the impact of this on the 30 September 2010 Forecasts, a sensitivity of 10% to property turnover volume is shown holding all else equal.
Farm supplies fertiliser gross margin : Fertiliser is a global commodity and is subject to price fluctuations. Demand for fertiliser is also impacted by external factors such as price expectations for key commodities and weather patterns which impact investment decisions and size of farmed areas. As these factors have an impact on the gross margin of fertiliser, a sensitivity of 100 basis points on the 30 September 2010 Forecasts has been shown.
Farm supplies AgriChem gross margin : Demand for AgriChem is impacted by external factors such as price expectations for key commodities and weather patterns which impact investment decisions and size of farmed areas. This demand factor has an impact on the gross margin of AgriChem and a sensitivity of 150 basis points on the 30 September 2010 Forecasts has been shown.
Farm supplies Animal Health sales : Price expectations around livestock and weather patterns impact investment decisions made by farmers around herd and flock sizes which impacts demand for animal health products. This demand factor has an impact on the sales of Animal Health and a sensitivity of 20% to sales on the 30 September 2010 Forecasts has been shown.
Livestock agency commission rate : A sensitivity on the commissions for livestock agency of 15 basis points has been applied to the 30 September 2010 Forecasts.
Livestock agency turnover : Livestock agency turnover is expressed as the number of heads traded times the price per head over a period. A sensitivity of 5% to the livestock agency turnover has been calculated to show the impact this has on the 30 September 2010 Forecasts.
Rural Bank – loan volume growth : The sensitivity sets out the impact of a plus or minus $100 million movement of loan growth in the 30 September 2010 Forecasts loan growth. Rural Bank had $3.7 billion of loans under management as at 30 June 2009.
Rural Bank – net interest margin (NIM) : The sensitivity analysis sets out Elders’ forecast share of Rural Bank’s 30 September 2010 earnings when there is a 10 basis point change in the net interest margin.
OEM volumes : A 10% sensitivity in base sales during the year ending 30 September 2010 to the Directors’ Forecast has been shown. The sensitivity analysis holds direct material margin constant and varies 50% of the factory labour in both the up and downside analysis.
MIS sales : The sensitivity shows the impact of movement of $10 million in sales on the 30 September 2010 Forecasts.

6.3 Pro forma impact of the recapitalisation on Elders’ debt profile

On 4 September 2009, Elders entered into binding terms sheets with its lenders pursuant to which the lenders agreed, subject to certain conditions precedent, to refinance Elders’ corporate debt facilities. This section sets out Elders’ debt profile after giving effect to the refinancing and:

the Equity Raising;
the completion of the QBE Insurance Transaction;
the completion of the expected sale of Hi-Fert (book value of $69 million);
the completion of the Timber Sale;

and the application of the proceeds of each of those transactions as described in this Prospectus (including the paying down of the equity and asset bridge facilities and the payment of the costs of the Equity Raising and the refinancing).

6. Forecast Financial Information

The above transactions will result in Elders reducing its total pro forma net debt as at 30 June 2009 by $928 million[1] and resetting the maturity of its facilities so that core term facilities are not earlier than September 2012. See Section 9.5 for a description of the terms of the binding term sheets and see Section 7 for details of the refinancing and other risks faced by Elders.

Elders will have commitments from the lenders under the binding term sheets for the following facilities. The table below sets out the details, including principal amounts and maturity dates, of the facilities to be refinanced and made available to Elders.

Syndicated banking facilities	Facility limit	Drawn amount	maturity2
Tranche A1–3-Year Term Loan	$127m	$127m	Sep2012
Tranche B1– Asset Sales Bridge	$345m	$345m	Sep2010
Tranche C1– Equity Bridge	$316m	$316m	Oct2009.3
Tranche D1– Revolver	$117m	$117m	Mar2011
Total banking facilities	$905m	$905m
USPP Notes		amount	maturity2
Tranche A2– Series A		US$6m	Nov2014.4
Tranche A2– Series B		US$43m	May2015 .4
Tranche A3– Series C		US$4m	Nov2014.4
Tranche A3– Series D		US$32m	May2015.4
Tranche A45		US$25m	Nov2014
Tranche B2– Asset Sales Bridge		US$66m	Sep2010
Tranche C2– Equity Bridge		US$61m	Oct2009
Total USPP Notes		US$237m
Total banking & USPP Notes		$1,227m6, 7

Includes net proceeds post Equity Raising, proceeds of QBE Insurance Transaction, Timber Sale, proposed Hi-Fert sale and the refinancing. Excludes average revolver/working capital drawdown ($80 million) and USPP pre-payment penalty ($29 million).
To the extent Elders pays a dividend, which can only occur after 31 March 2012, Tranches A1, A2, A3 and D1 are mandatorily payable by an amount equivalent to 60% of the amount paid in dividends (other than pursuant to Elders’ dividend reinvestment plan).
Elders expects to repay the Equity Bridge in full prior to 31 October 2009 with a portion of the proceeds from the Offer.
Each individual Noteholder has the right, exercisable at any time up to and including 30 September 2012, to put its Tranches, A2, A3 and A4 USPP notes to Elders for the principal amount outstanding of those notes. If exercised the Noteholder Put Right shall be effective as of 30 September 2012. Otherwise, the maturity of the notes are 2014 and 2015.
Represents estimated make-whole costs of US$25 million.
Includes $322 million in USPP notes (US$237 million) translated at applicable hedged currency rate.
Excludes existing ring-fenced receivables securitisation programme.

Transactional banking facilities of the Company include:

Transactional banking facilities of the Company include:
Transactional banking facilities	Facility limit	maturity
Tranche D2	$198m	Mar2011

The recapitalisation will provide Elders with a strong and sustainable balance sheet to facilitate the turnaround and growth in the business. Following completion of the Offer, the debt refinancing and related recapitalisation transactions (including asset sales), Elders’ balance sheet gearing (net debt/shareholders equity) will fall to 14% on a pro forma basis.

Elders Limited Prospectus

PRO FORMA NET DEBT AS AT 30 JUNE 2009 ($M)[1]

==> picture [460 x 144] intentionally omitted <==

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

Debt position
80 (270)
Equity proceeds
Cash outflows (69) (100) 61 29 (400)
Asset sales
(75)
(75)
997 728 253 178
NET DEBT AVERAGE REVOLVER /WORKING CAPITAL 2DRAWDOWN ELDERS INSURANCE 3HI-FERT TIMBER TRANSACTIONAL COSTS (ASSET SALES, DEBT REFINANCING, EQUITY RAISING USPP PRE-PAYEMNT 4PENALTY PF NET DEBT CONDITIONAL PLACEMENT UNDERWRITTEN SPP PF NET DEBT POST CONDITIONAL PLACEMENT + UNDERWRITTEN SPP SPP (NON-UNDERWRITTEN) PF NET DEBT POST CONDITIONAL PLACEMENT + FULL SPP
----- End of picture text -----

Excludes existing ring-fenced receivables securitisation programme. Assumes $550 million Equity Raising comprising a fully underwritten $400 million Conditional Placement and a partially underwritten SPP ($75 million of which is underwritten). The Conditional Placement and SPP are subject to approval by Shareholders.
Represents an estimate of the average balance expected to be drawn down throughout the year for the purposes of working capital.
Assumed sale based on book value, as at 30 June 2009, cited for indicative purposes only.
Capitalised USPP pre-payment penalty subject to a zero margin coupon.

The table below shows Elders’ pro forma credit metrics after the completion of the recapitalisation.

	PF Net Debt
	Post	Post
	Conditional	Conditional
Pro Forma Credit metrics1	Placement	Placement
FY2010(Sep–YE)	+ $75m SPP	+ $150m SPP
PF Net Debt/EBITDA2	2.2x	1.5x
Gearing (Net Debt/Equity)3	21%	14%
EBITDA/Net interest4	4.4x	5.6x
EBIT/Net interest4	3.2x	4.0x

Excludes existing ring-fenced receivables securitisation programme.
Pro forma Net Debt/EBITDA based on 30 June 2009 Pro Forma Balance Sheet and FY2010 forecasts in Table 6.2.
Pro forma gearing based on 30 June 2009 Pro Forma Balance Sheet.
Pro forma EBITDA and EBIT interest cover based on FY10F forecasts in Table 6.2.

6.4 Outlook beyond FY10

Elders anticipates that the year ending 30 September 2010 will be a “turnaround” year in which earnings improve and that the subsequent two years will feature ongoing earnings growth.

The improvement in financial performance beyond 2010 is expected to arise from the accumulation of benefits from completed, current and prospective business improvement measures and as market conditions continue to stabilise and improve. The outlook for the Australian agricultural industry is supported by positive structural trends forecast, including strong population growth and rising wealth in emerging Asian economies.

Rural Services operations are anticipating growth in sales, margin and profit through the program of initiatives being undertaken under the Elders Transformation Project. Much of the foundation work for these measures has been done, or is being done, in the years 2009 to 2010, with the expectation that benefits will accrue progressively from market share increases, and efficiencies realised in procurement, logistics and supply chain management in general.

Market conditions are expected to be supportive of improvement, as the stabilisation of markets consolidates and permits the retention or improvement of margin.

EBIT generated by ITC is expected to improve as a result of increases in MIS sales from 2010 over that achieved in 2009. The progressive recognition of MIS sales income means that increased MIS sales in 2010 have ongoing earnings benefits in 2011.

Results from Automotive operations are expected to continue to improve with the anticipated increase in vehicle build volume by Futuris Automotive customers.

==> picture [596 x 562] intentionally omitted <==

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

64
7
----- End of picture text -----

Risk Factors

Elders Limited Prospectus

There are a number of risk factors set out below that could potentially impact upon or have an adverse effect on the future operating and financial performance and condition of Elders, including the forecast financial information set out in Section 6. These risks are both specific to Elders and also relate to the general business and economic climate. You should carefully consider these risk factors before making a decision whether or not to subscribe for New Shares. If you are in any doubt, you should seek advice from your stockbroker, solicitor, accountant, financial planner and/or other financial professional adviser before deciding to invest. The risks and uncertainties described below are not the only ones facing Elders. Additional risks and uncertainties that Elders is unaware of, or that it currently does not consider to be material, may also become important factors that may have an adverse effect on Elders’ future operating and financial performance or condition, including the forecast financial information set out in Section 6.

7.1 Risks associated with Elders’ operations

7.1.1 Rural Services

7.1.1.1 Seasonality, weather and natural events

Elders’ Rural Services business is highly seasonal and weather dependent. Elders has historically incurred losses in the third quarter of the calendar year, while revenue and operating income are generally highest in the second quarter of the calendar year. Inclement weather, such as uncharacteristically low or high rainfall and/or temperatures, or exposure to natural events, such as drought, flood, pestilence, fire or the outbreak of diseases, could reduce the demand for Elders’ rural services, resulting in reduced revenues that would have an adverse effect on Elders’ results of operations.

7.1.1.2 australian rural production

The Rural Services business depends on the performance of Australia’s rural sector. Any decrease or lack of increase in the volume or quality of production by that sector could have an adverse effect on Elders’ results of operations. Factors that may adversely affect rural production include:

adverse climatic conditions or natural events;
movements in local cost competitiveness of the Australian rural sector or international commodity prices or currency exchange rates;
subsidies given to foreign rural producers or other regulatory changes affecting international trade which affect the competitive position of Australian rural outputs;
the effects that the above factors may have on the ability of borrowers to service rural loans, which may affect the value of securities held against rural loans with a consequent effect on the carrying value of the investment in Rural Bank Limited and the return from this investment; and
threats to the health and safety of agricultural produce.

7.1.1.3 Commodity prices

The performance of the Rural Services business is subject to local and international commodity prices. Prices of agricultural commodities fluctuate and are affected by a variety of regional and global factors that are beyond the control of Elders. These factors include: regional and international demand for, and supply of, specific commodities; production cost levels in major producing regions; weather-related conditions; governmental regulation and initiatives, including domestic and foreign farm programs and policies, trade subsidies, sanctions and barriers; pestilence, the outbreak of diseases and many others. Moreover, commodity prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and general global economic conditions. Accordingly, adverse movements in commodity prices could have a negative impact on Elders’ financial condition and results of operations.

7.1.1.4 Financial services

Elders’ interest in Rural Bank and the QBE Elders MGIA, both directly as a shareholder in Rural Bank and the MGIA and indirectly through revenues associated with distribution of Rural Bank’s products, exposes Elders to a variety of sectorspecific risks which could have a negative impact on Elders’ financial condition or results of operations. These risks include:

adverse interest rate and equity market movements;
the risk that Rural Bank has insufficient capacity to fund increases in assets, or is unable to meet its obligations as they fall due, including repaying depositors;
over-reliance on or lack of availability of a particular funding source affecting the availability of funds and their cost to Rural Bank;
financial sector-specific regulatory risks, including possibility of increases in the level of capital required to be held under the requirements of the Australian Prudential Regulation Authority; and
credit risk including the risk of financial loss due to the unwillingness or inability of a counterparty to fully meet their contractual debts and obligations, associated with extending credit to other parties.

7.1.2 Forestry

7.1.2.1 Demand risk

The business, profits and cash flow of Elders remain constant or may be further affected if levels of public demand continue to fall for the managed investment products offered by ITC. A reduction in MIS sales has a direct adverse impact on ITC’s cash flow and future funding requirement. Demand for such products is driven principally by expected returns and tax effectiveness relative to alternative investment opportunities. Recent events in this sector, such as the collapse of Timbercorp and Great Southern Plantations, precipitated a significant reduction and may continue to cause substantial falls, in demand for forestry MIS and could lead to regulatory changes which restrict the marketing and offering of these products. Other factors influencing demand include personal income tax rates, economic conditions, potential growers’ attitude to the sector and the availability and relative attractiveness of similar products offered by other providers.

7. Risk Factors

7.1.2.2 Credit risk and availability of finance

ITC provides finance to certain growers to fund their participation in managed investment scheme projects. The loans are generally provided on a fixed interest rate basis and are secured by way of fixed charge over the grower’s interest in the MIS project. There is a risk of financial loss due to the unwillingness or inability of a grower to fully meet their contractual debts and obligations. ITC also relies upon third party finance being available to fund grower investments in its MIS products and there is a risk that the availability of this finance will not always be available, which could affect the revenue, cash flow and operations of the ITC business. This may result in either reduction in the level of managed investment scheme products sold by ITC or, if ITC increases its funding to growers, in Elders bearing all the credit risk associated with grower loans.

7.1.2.3 Government regulation, parliamentary enquiry and taxation

The viability and profitability of the ITC business may be adversely affected by any changes in government regulation of ITC’s managed investment products. In particular, regulatory changes affecting managed investment scheme products may arise from the Inquiry into Agribusiness Managed Investment Schemes currently being conducted by the Federal Parliamentary Joint Committee on Corporations and Financial Services. The Inquiry’s terms of reference include investigation of, among other things:

commissions, fees and other remuneration paid to marketers, distributors, related entities and sellers of MIS to investors (including accountants and financial advisers);
the level of consumer education and understanding of these schemes; and
the need for any legislative or regulatory change.

Regulatory changes recommended by the Committee and passed into law may have an adverse effect on the ITC business if they, for example, increase compliance costs, render MIS products unattractive to investors or MIS schemes providers, limit the type of investor to whom MIS products can be sold or limit (whether statutorily or economically) the channels through which MIS products can be effectively distributed and sold.

In addition, adverse changes in taxation legislation may reduce the ability of project investors participating in ITC’s projects to claim taxation deductions for plantation, establishment and other operational costs, therefore affecting ITC’s future revenues.

7.1.2.4 other Forestry risks

Other factors that may adversely affect, or prevent improvement of, Elders’ financial condition, or results of operations from the ITC business, include:

future harvest yield decreases due to a number of factors including drought, flood, seasonal conditions at the time of establishment of plantations, pestilence or the outbreak of diseases;
reduced demand for ITC’s woodchip products arising from reduction in global demand for woodchip;
uncertainty in ITC’s ability to secure access to port facilities in Portland and Esperance to handle the forthcoming harvest volumes; and
any regulatory or other requirement that causes Elders to mark-to-market its interest in FEA which is currently equity accounted.

7.1.3 Futuris Automotive

7.1.3.1 Cyclicality of automotive sales

Futuris Automotive’s business is directly related to automotive sales and automotive vehicle production by its customers. Automotive sales and production are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences as well as changes in interest rate levels, consumer confidence and fuel costs. Dramatically lower levels of global automotive sales were experienced in 2009. If sales levels continue to decline or fail to improve in subsequent periods, Elders’ results of operations could be adversely affected.

7.1.3.2 Customers/Suppliers

Futuris Automotive depends on, and a significant portion of its revenue is accounted for by, a relatively small number of automotive manufacturing end customers. The stability and viability of a number of major players in the automotive sector, particularly in the United States, have recently come under considerable focus. The loss of any significant automotive manufacturing end customer, whether through its bankruptcy, the bankruptcy of an affiliate or otherwise, will limit Futuris Automotive’s performance and financial strength. Any failure of a material supplier could also limit Futuris Automotive’s performance and financial strength.

7.1.3.3 Product offering

Futuris Automotive may not be able to adapt its product offerings to meet changing consumer preferences and our customers’ supply requirements on a timely, cost effective basis. The ability to respond to competitive pressures and react quickly to other major changes in the marketplace including in the case of automotive sales, increased gasoline prices or consumer desire for and availability of vehicles using alternative fuels is also a risk to Futuris Automotive’s future financial performance. Also, changes in legislative, regulatory or industry requirements or in competitive technologies may render certain of Futuris Automotive’s products obsolete or less attractive.

7.1.3.4 Plexicor option

Under the Plexicor shareholders deed between Futuris Automotive and the Other Plexicor Shareholders, the Other Plexicor Shareholders hold a put option which, if exercised, would require Futuris Automotive to purchase the Other Plexicor Shareholders’ 50% interest in Plexicor. The put option may be exercised in, among others, the following circumstances:

any time three years from the time of the initial 50% acquisition, that is from November 2010;

Elders Limited Prospectus

certain disposal of shares in Plexicor by Futuris Automotive;
breach by Plexicor of a financial covenant in its banking facilities;
a change of control of Elders or of Futuris Automotive;
the transfer of Plexicor’s business; and
a breach by Futuris Automotive of the Plexicor shareholders deed or related documents.

Exercise of the option would require Futuris Automotive to pay an indexed purchase price for the remaining 50% of Plexicor. If the option were exercised at the date of this Prospectus (because, for example, of the sale of Futuris Automotive) or in November 2010, the purchase price would be approximately $25 million or $27 million, respectively. Additionally, since Plexicor would be wholly owned by Futuris Automotive, Futuris Automotive would become responsible for Plexicor’s debt, which is currently in the order of $70 million. If the put option is exercised, the purchase price will need to be funded from Elders’ existing cash flows. The transfer of Plexicor’s debt may also have an adverse impact on Elders’ gearing levels and its ability to meet repayments or to borrow more funds.

7.1.3.5 materials and supplies

A broad range of materials and supplies, including metals, castings, chemicals, and electronic components are used in the products produced by the Futuris Automotive business. A significant disruption in the supply of these materials, or an increase in their price, could decrease production and shipping levels, materially increase operating costs, and materially adversely affect profit margins.

7.1.4 Other Elders’ specific risks

7.1.4.1 agenda for change and transformational strategy

In December 2008, Elders announced its ‘Agenda for Change’ strategy. ‘Agenda for Change’ is a group-wide strategy aimed at improving simplifying Elders’ business, improving financial performance and increasing discipline in management, performance and capital allocation. ‘Agenda for Change’ also includes measures and strategic initiatives specifically designed to improve the performance and enhance the focus of the Rural Services business. Elders may not be successful in the execution of this strategy and may not realise targeted benefits from some or all of the initiatives. Failure to do so may have a material adverse effect on Elders’ future financial performance and position.

7.2 Risks associated with Elders’ capital structure 7.2.1 Available finance

Recently, developments in global financial markets have adversely affected the liquidity of global credit markets. This has resulted in an increase in the cost of funding and in some cases a reduction in the availability of some funding sources throughout global markets, including Australia. Although Elders has entered into the refinancing arrangements described in Section 9.5.1, Elders’ continued ability to operate its business and effectively implement its business plan over time will depend in part on its ability to raise additional funds for future operations and to repay

or refinance debts as they fall due and maintain ongoing securitisation arrangements. Equity or debt funding or securitisation arrangements may not be available to Elders on favourable terms or at all. If adequate funds are not available in the future on acceptable terms, Elders may not be able to continue its business, take advantage of opportunities, develop new ideas or respond to competitive pressures.

7.2.2 Debt covenants

Elders has various financial covenants in relation to its banking facilities and has agreed to the financial covenants described in Section 9.5.1 for its restructured finance arrangements. Factors such as falls and/or increases in base rates, the depreciation of the Australian dollar and financial performance of the Elders business could lead to Elders approaching or breaching its financial covenants. In such circumstances, lenders may require that loans be repaid immediately. Elders’ funding costs are directly linked to its credit worthiness and asset values and an increase in the cost of borrowing may arise if its credit status was to deteriorate or a significant impairment was booked. In addition to the above, certain financing facilities may contain market disruption or special event clauses which may result in a higher cost of borrowing in the event of such an occurrence. Moreover, Elders’ new facilities will contain covenants which impose restrictions on the Elders Group. These include restrictions (subject to certain exceptions) on the Group’s ability to incur indebtedness, provide financial accommodation and guarantees, grant security, make disposals and acquisitions and invest in joint ventures and partnerships.

7.2.3 Refinancing of existing facilities

Elders financiers’ agreement to the restructured finance arrangements described in Section 9.5.1 is reflected in binding term sheets, rather than fully documented facilities. These term sheets include conditions which Elders must satisfy, the non-satisfaction of which will affect the ability of Elders to complete the refinancing and Equity Raising without the consent of, or the waiver of the relevant condition by, its lenders. Any failure to complete the refinancing (including because of a failure to reach final agreement in respect of definitive documentation) or the Equity Raising or completion of the refinancing on terms less favourable to Elders than those set out in the term sheets would have a material adverse effect on Elders and may give its lenders the right to proceed against Elders. The conditions include the entry into definitive documentation in relation to the refinancing and related security packages by Elders and each lender.

7.2.4 Securitisation fund

Elders has a $320 million receivables securitisation programme in the form of a trust structure with ANZ as principal financier (90%), a third party first loss provider holding Class B notes (1%) and an Elders wholly owned subsidiary holding Class A notes (9%). The first loss Class B note is due to mature on 30 September 2009. The receivables securitisation programme has also breached the current default ratio covenant in July 2009 and has not met the eligibility criteria for certain receivables sold into the programme. Elders has therefore

7. Risk Factors

sought a waiver from the Trustee, and has received notification from ANZ in its capacity as cash advance provider that for the period until 30 June 2010 it will not instruct the Trustee or Trust Manager to exercise their rights in respect of the amortisation events or title perfection events (subject to the fulfilment of certain conditions). ANZ has also agreed to work with Elders on the establishment of a new securitisation programme by no later than 30 September 2009. This would involve the existing third party first loss Class B note being run down, and Elders holding an increased level of the subordinated securities in the programme, together with certain other amendments to the terms of the programme. It is likely that the new securitisation programme may, under current accounting standards, be consolidated onto its balance sheet in that circumstance.

It will be a review event with respect to the refinanced debt facilities if the securitisation programme is either terminated at any time before its stated maturity or expiry date or is not extended unless it is replaced by an alternative funding arrangement on substantially the same terms as the current programme or on terms reasonably acceptable to the majority financiers.

Recently developments in the global economy have adversely affected credit markets, including Australia, resulting in a decrease in the availability and an increase in the cost of wholesale funds. Elders sources some funding from wholesale channels including via the use of securitisation. In recent years Elders has relied on securitisation funding arrangements to source funding. These types of facilities are more expensive and less accessible in the current market environment and, as market conditions remain constrained and uncertain, Elders’ overall cost of funds may increase as a result of market conditions and may continue to increase while the availability of a diversity of funding remains constrained. Further deterioration in credit markets may adversely impact on the earnings of Elders.

7.2.5 QBE Insurance Transaction, Timber Sale and proposed Hi-Fert sale

The QBE Insurance Transaction is subject to a number of conditions, including regulatory approvals. Since Elders intends to use the proceeds of that QBE Insurance Transaction to repay debt, and since the failure to complete the QBE Insurance Transaction by 31 January 2010 will be an event of default under Elders’ restructured financing arrangements which entitles Elders’ lenders to require that outstanding amounts be repaid immediately, should any of these conditions or any part of the proposed sale not be completed, Elders will, at a minimum need to re-enter negotiations with its financiers or face higher debt costs. There can be no guarantee that these negotiations will be successful.

The Timber Sale is subject to a number of conditions, including regulatory approvals and government consents (as may be required). Should any of these conditions or any part of the proposed sale not be completed, there could be a material adverse impact on Elders’ financial performance and position.

As part of its non-core asset divestment program, Elders has initiated a sale process with respect to its interest in Hi-Fert. Under the refinancing arrangements, Elders will be required to pay down debt with the proceeds of the Hi-Fert sale. A sustained downturn in the general economic conditions, the performance of the markets in which Hi-Fert operates or changes in market sentiment could result in reduced sale proceeds or delays in achieving the sale. Failure to sell Hi-Fert for any reason could have a material adverse effect on Elders’ financial performance or position.

7.2.6 Equity Raising

The proceeds of the Conditional Placement will not be received and the SPP will not be commenced if the requisite Shareholder resolutions are not passed at the EGM to be held on 15 October 2009. Since Elders intends to use the proceeds of the Equity Raising to repay debt, in the event that a Shareholder approval is not obtained, or if the proceeds of the non-underwritten portion of the SPP are lower than expected, Elders would have more net debt and less financial flexibility. This may have a material adverse effect on Elders’ future financial performance and position.

7.2.7 Dividends

In light of Elders’ financial results for the 12-month period to 30 June 2009, the Directors have resolved not to declare a final dividend on Elders Shares for the year ending 30 September 2009. When and whether Elders resumes the payment of dividends will depend on many factors, including Elders’ available cash, results of operations, financial condition, general business conditions and legal restrictions on the payment of dividends.

Moreover, Elders’ restructured financing arrangements will prevent Elders from declaring dividends on or prior to 31 March 2012. After that time, if Elders declares a dividend, it must (unless it is a dividend reinvestment plan) prepay Bank Debt Tranche A1, USPP Notes Tranches A2 and A3 and Bank Debt Tranche D1 in an amount equal to 60% of the dividend paid and meet certain other conditions to the payment of a dividend.

In respect of the Elders Hybrid securities, distributions (including Optional Distributions as referred to below) are at the discretion of Directors and also subject to the availability of “distributable profits” as defined in the hybrids’ terms of issue. If the Board resolves, and Elders is permitted by the terms of issue, to pay them, distributions will be paid quarterly in arrears on 31 March, 30 June, 30 September and 31 December each year (“Hybrid Distribution Payment Dates”).

“Distributable profits” in respect of a Hybrid Distribution Payment Date are determinable by reference to, among other things, Elders’ retained earnings as at the preceding semi-annual balance date. In respect of the 30 September 2009 Hybrid Distribution Payment Date, Elders has insufficient distributable profits and, accordingly, is prevented from paying a distribution on the Elders Hybrids. In addition,

Elders Limited Prospectus

Elders’ restructured financing arrangements will restrict Elders from paying distributions on Elders Hybrids until and including 30 September 2011. As a consequence after 30 September 2009 and for so long as Elders is so restricted, the terms of issue of the Elders Hybrids will prevent Elders from paying a dividend or other distributions on Elders Shares (a “Dividend Stop”). Dividend Stops will remain in place until one of the following occurs:

Elders has paid to Elders Hybrids holders a distribution (“Optional Distribution”) of not less than the unpaid amount (if any) of distributions for the Hybrid Distribution Payment Dates which occurred in the 12 months prior to the date of the Optional Distribution; or
Elders has subsequently paid the distribution for each Hybrid Distribution Payment Date occurring in a 12-month period; or
a special resolution of Elders Hybrids holders authorising the payment, dividend, distribution, capital return, buy-back, redemption or repurchase is approved; or
no Elders Hybrids remain on issue.

However, no assurance can be given that these circumstances will or are likely to occur.

7.3 Other risks

7.3.1 Global economic downturn and exposure to the level of economic activity

Elders’ financial performance is sensitive to both the level of economic activity within the industries and countries in which Elders currently operates. The level of activity in some of these industries is cyclical and sensitive to a number of factors, such as gross domestic product, interest rates, input cost inflation, foreign currency exchange rates, tax rates and commodity prices (all of which are outside Elders’ control).

Elders’ revenues and earnings may fall, or its growth may be lower, during the downturns of the different industry cycles or if the level of outsourcing activity in different industries falls. Volatility in earnings may limit Elders’ ability to pay dividends. Elders is not able to predict the timing, extent or duration of the activity cycles or outsourcing levels in the industries and markets in which it operates or will operate in the future.

7.3.2 Competition

Elders operates in competitive industries. Elders may not be able to compete successfully against current or future competitors. There can be no assurance that the actions of existing competitors, or new market entrants and the introduction of competing products and services, could not affect the demand for Elders’ products and services and its margins and therefore the profitability or operations of Elders. Specifically, increased competition could result in price reductions, insufficient work for employees and contractors while their wages are still being paid, reduced operating margins and/or loss of market share.

7.3.3 Counterparty exposure and joint ventures

The financial performance of Elders is subject to it (and its various counterparties or joint venture partners) continuing to perform their respective obligations under various contracts. If Elders or one of its counterparties or joint venture partners fails to adequately perform their contractual obligations, this may result in loss of earnings, termination of the particular contracts, disputes and/or litigation.

7.3.4 Information technology

Elders is reliant on its current information technology system to operate its business and has investigated, and will continue to investigate, the introduction of new information technologies into its business in order to improve its business and undertake its business more efficiently and effectively. There is a risk that certain aspects of projects could be compromised by implementation difficulties or failures.

7.3.5 Employees and industrial relations

The loss of key management personnel who have particular expertise may influence future earnings. In addition, a failure to comply with the necessary occupational health and safety regulatory requirements could result in damage to Elders’ reputation, fines, penalties and compensation for damages as well as poor employee morale and industrial action.

7.3.6 Insurance

The availability of insurance at an appropriate price and on appropriate terms is important to Elders’ operations and is not guaranteed. It is possible that the occurrence of an event may not be fully covered, or covered at all, by insurance.

7.3.7 Litigation risk

Elders is subject to the usual business risk that disputes or litigation may arise from time to time in the course of its business activities. Litigation risks relating to Elders include, but are not limited to, contractual claims, environmental claims, occupational health and safety claims, employee claims and regulatory disputes. There is a risk that material or costly disputes could affect the financial performance of Elders.

7.3.8 Foreign exchange and interest rate risk

Exchange rate movements between all countries Elders operates in and Australia may negatively impact the cash flows and profits from Elders’ foreign operations as well as the relative value of assets and liabilities on Elders’ balance sheet.

In addition, as a borrower of money, Elders is exposed to increases in interest rates. This exposure may be managed using interest rate hedging. However, the cost of hedging may increase and Elders may have some interest payments which are unhedged and this may result in an adverse impact on its financial performance.

7. Risk Factors

7.3.9 Government policy, regulation and political factors

Elders is subject to a range of industry specific and general legal and other regulatory controls. Regulatory breaches may affect the operational and financial performance of Elders, through penalties, liabilities, restrictions on activities and compliance and other costs. Changes in local, state and Federal Government regulations and policies in the industries in which Elders operates may affect the amount and timing of the future profits of Elders. Elders holds approval under the Financial Sector (Shareholdings) Act 1998 to hold its 40% shareholding in Rural Bank. Any withdrawal of that approval may impact Elders’ financial position.

7.3.10 Changes in accounting policy

7.3.13 General equity market risk

There are risks associated with investment in equities generally. The trading price of Elders Shares will be affected by such factors as the relative demand for and supply of Elders Shares on ASX, investor sentiment, general market and economic conditions and other factors beyond Elders’ control. In recent times, the market prices for many listed entities have been subject to wide fluctuations reflecting, in many cases, a diverse range of non-entity specific influences including the general state of the global economy and financial markets.

It should be noted that there is no guarantee that the New Shares will trade at or above the Offer Price. Investors should note that the past performance of Elders Shares on ASX provides no guidance as to its future share price performance.

Accounting standards may change. This may affect the reported earnings of Elders and financial position from time to time.

7.3.11 Force majeure

Force majeure refers to an event beyond the control of a party, including extreme weather, war and other natural disasters which may in some cases hinder the ability of Elders to perform its contractual obligations. In most cases, these risks cannot be insured against and even when they are, there is no guarantee that insurance claims will be able to be made in any particular circumstance and/or that available insurance proceeds will cover every aspect of loss or damage.

7.3.12 Environmental risk

With increasingly heightened government and public sensitivity to environmental sustainability and environmental regulation becoming more stringent, Elders could be subject to increasing environmental responsibility and liability. Sanctions for non-compliance with these laws and regulations may include administrative, civil and criminal penalties, revocation of permits and corrective action orders, which may sometimes apply retroactively. In addition, the Federal Government has proposed legislation which if passed, would implement a Carbon Pollution Reduction Scheme and reduced emissions targets. Given the lack of final legislation, it is difficult to assess the impact of these measures on Elders. To the extent that they adversely impact rural production or other parts of Elders’ business, Elders’ financial performance may suffer.

Elders Limited Prospectus

==> picture [360 x 40] intentionally omitted <==

==> picture [252 x 56] intentionally omitted <==

Independent Accountant’s Report

8. Independent Accountant’s Report

==> picture [123 x 41] intentionally omitted <==

==> picture [95 x 69] intentionally omitted <==

4 September 2009

The Directors Elders Limited Level 3, 27 Currie Street ADELAIDE SA 5000

Independent accountant’s report on forecast financial information

Dear Directors

Part 1 – Independent accountant’s report on forecast financial information

We have prepared this Independent Accountant’s Report (the “Report”) on the forecast financial information of Elders Limited (“Elders”) for the three month period ending 30 September 2009 and the financial year ending 30 September 2010 for inclusion in a prospectus to be dated on or about 4 September 2009 (the “Prospectus”) to be issued in connection with the equity raising by way of:

Subject to shareholder approval of itself and of the Share Purchase Plan referred to below, a placement of fully paid ordinary shares in Elders to institutional and other professional and sophisticated investors who are exempt from disclosure under section 708(8) or (11) of the Corporations Act 2001 (Cth) including QBE Insurance (Australia) Limited (the “Conditional Placement”); and
Subject to shareholder approval of itself and of the Conditional Placement, a share purchase plan to eligible shareholders (the “Share Purchase Plan”, and together with the Conditional Placement, the “Offer”).

Expressions defined in the Prospectus have the same meaning in this Report.

The nature of this Report is such that it can be given only by an entity which holds an Australian Financial Services Licence under the Corporations Act. Ernst & Young Transaction Advisory Services Limited holds the appropriate Australian Financial Services Licence.

Scope

You have requested Ernst & Young Transaction Advisory Services Limited to prepare a report for inclusion in the Prospectus covering the forecast income statement summary of Elders for the three month period ending 30 September 2009 and the financial year ending 30 September 2010 as set out in Section 6 of the Prospectus.

The financial information set out above is referred to collectively as the “Directors’ Forecasts”.

The Directors are responsible for the preparation and presentation of the Directors’ Forecasts, including the best-estimate assumptions, which include the pro-forma transactions, on which they are based. The Directors’ Forecasts have been prepared for inclusion in the Prospectus. We disclaim any assumption of responsibility for any reliance on this Report or on the Directors’ Forecasts to which it relates for any purposes other than for which it was prepared.

Ernst & Young Transaction Advisory Services Limited, ABN 87 003 599 844 Australian Financial Services Licence No. 240585

Elders Limited Prospectus

==> picture [123 x 41] intentionally omitted <==

Review of Directors’ Forecasts

Our review of the Directors’ Forecasts was conducted in accordance with the Australian Auditing and Assurance Standards applicable to review engagements. Our procedures consisted primarily of enquiry and comparison and other such analytical review procedures we considered necessary. These procedures included discussion with the Directors and management of Elders and have been undertaken to conclude whether anything has come to our attention which causes us to believe that:

a. the Directors’ best-estimate assumptions do not provide a reasonable basis for the preparation of the Directors’ Forecasts;
b. in all material respects, the Directors’ Forecasts are not properly compiled on the basis of the best-estimate assumptions; and
c. the Directors’ Forecasts are not presented fairly in accordance with the recognition and measurement principles (but not all of the presentation and disclosure requirements) prescribed in Accounting Standards and other mandatory professional reporting requirements in Australia and the accounting policies of Elders disclosed in Section 5 of the Prospectus.

The Directors’ Forecasts have been prepared by the Directors to provide investors with a guide to Elders’ potential future financial performance based upon the achievement of certain economic, operating, developmental and trading assumptions about future events and actions that have not yet occurred and may not necessarily occur. There is a considerable degree of subjective judgement involved in the preparation of the Directors’ Forecasts. Actual results may vary materially from those Directors’ Forecasts and the variation may be materially positive or negative. Accordingly, investors should have regard to the Risk Factors set out in Section 7 of the Prospectus and Sensitivity Analysis set out in Section 6 of the Prospectus.

Our review of the Directors’ Forecasts, that are based on best-estimate assumptions, is substantially less in scope than an audit examination conducted in accordance with Australian Auditing and Assurance Standards. A review of this nature provides less assurance than an audit. We have not performed an audit and we do not express an audit opinion on the Directors’ Forecasts included in the Prospectus.

Review Statement

Based on our review of the Directors’ Forecasts as set out in Section 6 of the Prospectus, which is not an audit, and based on an investigation of the reasonableness of the Directors’ best-estimate assumptions giving rise to the prospective financial information, nothing has come to our attention which causes us to believe that:

a. the Directors’ best-estimate assumptions set out in Section 6 of the Prospectus do not provide a reasonable basis for the preparation of the Directors’ Forecasts;
b. the Directors’ Forecasts are not properly compiled on the basis of the Directors’ best-estimate assumptions; and

8. Independent Accountant’s Report

==> picture [123 x 41] intentionally omitted <==

c. the Directors’ Forecasts are not presented fairly in accordance with the recognition and measurement principles (but not all of the presentation and disclosure requirements) prescribed in Accounting Standards and other mandatory professional reporting requirements in Australia and the accounting policies of Elders disclosed in Section 5 of the Prospectus.

The underlying assumptions are subject to significant uncertainties and contingencies often outside the control of Elders and the Directors. If events do not occur as assumed, actual results achieved and distributions provided by Elders may vary significantly from the Directors’ Forecasts. Accordingly, we do not confirm or guarantee the achievement of the Directors’ Forecasts, as future events, by their very nature, are not capable of independent substantiation. Investors should have regard to the Sensitivity Analysis and Risk Factors detailed in Sections 6 and 7 of the Prospectus, respectively.

Subsequent Events

Apart from the matters dealt with in this Report, and having regard to the scope of our Report, to the best of our knowledge and belief no material transactions or events outside of the ordinary business of Elders have come to our attention that would require comment on, or adjustment to, the information referred to in our Report or that would cause such information to be misleading or deceptive.

Independence or Disclosure of Interest

Ernst & Young Transaction Advisory Services Limited does not have any interest in the outcome of the equity raising, other than in connection with the preparation of this Report and participation in due diligence procedures. Ernst & Young Transaction Advisory Services Limited will receive a professional fee for the preparation of this Report. Ernst & Young acted as statutory auditor of Elders for the year ended 30 June 2009 for which it received a market based fee.

The Directors of Elders have agreed to indemnify and hold harmless Ernst & Young Transaction Advisory Services Limited, Ernst & Young and their employees from claims arising out of misstatement or omissions in any material or information supplied by the Directors.

Yours faithfully Ernst & Young Transaction Advisory Services Limited

==> picture [102 x 48] intentionally omitted <==

Angus Blackwood Director and Representative

Stephen Lomas Director and Representative

Elders Limited Prospectus

==> picture [121 x 30] intentionally omitted <==

==> picture [98 x 9] intentionally omitted <==

==> picture [46 x 14] intentionally omitted <==

==> picture [46 x 8] intentionally omitted <==

==> picture [46 x 10] intentionally omitted <==

==> picture [46 x 15] intentionally omitted <==

==> picture [44 x 6] intentionally omitted <==

==> picture [98 x 6] intentionally omitted <==

==> picture [44 x 14] intentionally omitted <==

==> picture [98 x 14] intentionally omitted <==

==> picture [44 x 8] intentionally omitted <==

==> picture [44 x 10] intentionally omitted <==

==> picture [61 x 14] intentionally omitted <==

==> picture [61 x 8] intentionally omitted <==

==> picture [79 x 15] intentionally omitted <==

==> picture [44 x 22] intentionally omitted <==

==> picture [412 x 32] intentionally omitted <==

��

��
��

��

8. Independent Accountant’s Report

==> picture [121 x 30] intentionally omitted <==

==> picture [17 x 9] intentionally omitted <==

==> picture [17 x 8] intentionally omitted <==

==> picture [17 x 7] intentionally omitted <==

==> picture [17 x 14] intentionally omitted <==

==> picture [37 x 5] intentionally omitted <==

==> picture [37 x 9] intentionally omitted <==

==> picture [37 x 8] intentionally omitted <==

==> picture [37 x 7] intentionally omitted <==

==> picture [37 x 14] intentionally omitted <==

==> picture [18 x 5] intentionally omitted <==

==> picture [18 x 9] intentionally omitted <==

==> picture [18 x 8] intentionally omitted <==

==> picture [18 x 7] intentionally omitted <==

==> picture [43 x 6] intentionally omitted <==

==> picture [43 x 5] intentionally omitted <==

==> picture [43 x 9] intentionally omitted <==

==> picture [43 x 8] intentionally omitted <==

==> picture [50 x 11] intentionally omitted <==

==> picture [50 x 5] intentionally omitted <==

==> picture [19 x 5] intentionally omitted <==

==> picture [19 x 9] intentionally omitted <==

��

==> picture [17 x 7] intentionally omitted <==

��

��

��

==> picture [360 x 40] intentionally omitted <==

==> picture [252 x 56] intentionally omitted <==

Additional Information

9. Additional Information

9.1 Nature of this Prospectus

This Prospectus is issued pursuant to section 713 of the Corporations Act. That provision allows the issue of a more concise prospectus in relation to offers of continuously quoted securities (as defined in the Corporations Act).

9.2 Continuous disclosure obligations

Elders is a “disclosing entity” under the Corporations Act and is subject to regular reporting and disclosure obligations under the Corporations Act and the ASX Listing Rules, including the preparation of annual reports and half-yearly reports. Elders is required to notify ASX of information about specific events and matters as they arise for the purpose of ASX making the information available to the financial market operated by ASX. In particular, Elders has an obligation under the ASX Listing Rules (subject to certain limited exceptions) to notify ASX immediately of any information concerning it of which it is or becomes aware which a reasonable person would expect to have a material effect on the price or value of its securities. That information is available to the public from ASX. Elders is also required to prepare and lodge with ASIC and ASX both yearly and half-yearly financial statements accompanied by a Directors’ declaration and report, and an audit review report.

Copies of documents lodged with ASIC in relation to Elders may be obtained from, or inspected at, an ASlC office. Elders will provide a copy of each of the following documents, free of charge, to any person who requests a copy before the Closing Date:

Elders’ 2008 annual report for the year ended 30 June 2008;
Elders’ half year report for the half year ended 31 December 2008;
Elders’ Appendix 4F for the 12-month period ended 30 June 2009; and
any other document used to notify ASX of information relating to Elders under the continuous disclosure provisions of the ASX Listing Rules and the Corporations Act after the lodgement of the annual report referred to above and before the lodgement of this Prospectus with ASIC.

All requests for copies of the documents referred to above should be made by contacting the Elders Shareholder Information Line on 1300 022 710 (within Australia) or +61 3 9938 4347 (from outside Australia) at any time between 8.30am and 5.00pm (Sydney time) Monday to Friday during the Offer Period. Copies of this information may also be obtained on Elders’ website at www.elders.com.au or on ASX’s website at www.asx.com.au.

9.3 Rights and liabilities attached to New Shares

New Shares issued under the Equity Raising will be fully paid and will rank equally in all respects with existing Elders Shares and each other.

The rights and liabilities attached to Elders Shares are set out in the Constitution and the Corporations Act. This Section contains a summary of the main rights and liabilities attaching to Elders Shares as at the date of this Prospectus. This summary does not constitute an exhaustive or definitive summary of the rights and liabilities of Shareholders – rights and liabilities can involve complex questions arising from the interaction of the Constitution, statutes, common law and ASX Listing Rule requirements. To obtain a definitive assessment of the rights and liabilities which attach to Elders Shares in any specific circumstances, investors should seek their own advice.

9.3.1 Voting rights

At a general meeting, subject to a number of specified exemptions, on a show of hands, each Shareholder present in person or by proxy, attorney or, in the case of a corporation, by a representative, has one vote. On a poll, each Shareholder present in person or by a representative, proxy or attorney has one vote for each fully paid share held and for each partly paid share held by the member and in respect of which the member is entitled to vote, a fraction of a vote equivalent to the proportion which the amount paid up (not credited) on the share bears to the total amounts paid and payable (excluding amounts credited). Holders of Elders Hybrids have no voting rights at meetings of members of Elders. If an Elders Hybrid is converted, the holder will become a Shareholder in Elders and will have the voting rights attached to those Elders Shares. Upon the holder of Elders Hybrids being issued an Elders Preference Share, the holder will have the voting rights attached to those shares.

9.3.2 General meetings

Each Shareholder is entitled to receive notice of, and to attend and vote at, general meetings of Elders and to receive all notices, accounts and other documents required to be sent to Shareholders under the Constitution, the Corporations Act or the ASX Listing Rules.

9.3.3 Dividend rights

Subject to any rights or restrictions attached to any shares or class of shares in Elders (including those contained in the terms of Elders Hybrids and Elders Preference Shares), all dividends in respect of fully paid ordinary shares must be paid to Shareholders in proportion to the number of Elders Shares held by a member. For partly paid shares, all dividends must be apportioned and paid proportionally to the amounts paid (not credited) on the shares.

Elders Limited Prospectus

9.3.4 Rights on winding-up

If Elders is wound up, the liquidator may, with the sanction of a special resolution and subject to the Constitution and any special or preferential rights attaching to any class or classes or shares (including those contained in the terms of Elders Hybrids and Elders Preference Shares), divide among the Shareholders in kind the whole or any part of the property of Elders and may, for that purpose, set the value on any property to be so divided and may determine how the division is to be carried out as between the Shareholders of Elders and the different classes of shareholders of Elders.

9.3.5 Transfer of Elders Shares

Subject to the Constitution, any rights or restrictions attached to any shares or class of shares in Elders, the Corporations Act and the ASX Listing Rules, Elders Shares, including New Shares, are freely transferable. A transfer of Elders Shares may be effected as provided by the ASTC Settlement Rules or by a written transfer in the usual way or in any form that the Board may prescribe, properly stamped (if necessary) and delivered to Elders.

9.3.6 Class of shares and variation of rights

Elders Shares are fully paid ordinary shares in Elders which rank equally in all respects.

The rights, privileges and restrictions attaching to Elders Shares can only be varied by a special resolution passed at a general meeting of the holders of the Elders Shares. The quorum required at any such general meeting is, if the number of members entitled to vote is two or more, the presence of two of those members, and if only one member is entitled to vote, the presence of that member. If a quorum is not present within 30 minutes after the time appointed for that meeting, where the meeting was convened upon the requisition of Elders Shareholders, the meeting must be dissolved.

9.3.7 Issue of further Elders Shares

Without prejudice to any special rights conferred on the holders of any existing Elders Shares or other class of shares (including those contained in the terms of Elders Hybrids and Elders Preference Shares), but subject to the Constitution, the Corporations Act and the ASX Listing Rules, Elders Shares or options over Elders Shares may be issued by the Directors. Any such Elders Share may be issued with any preferred, deferred or other special rights or any restrictions, with regard to dividend, voting, return of capital, or otherwise, as the Directors think fit.

9.3.8 Directors

The minimum number of Directors is three and the maximum number is to be fixed by the Directors, but must not be more than 12 unless the company in general meeting determines otherwise.

The Directors will be subject to retirement by rotation and re-election by Shareholders in a general meeting.

The Directors may appoint the chairperson of the Elders Board.

Each Director, alternate director, and executive officer (including secretary) of Elders is indemnified against any liability to another person incurred in that capacity unless Elders is prohibited by statute to indemnify the person.

9.4 Underwriting Agreement

Elders has entered into an Underwriting Agreement with the Joint Lead Managers with respect to the Equity Raising on 4 September 2009. In accordance with the Underwriting Agreement, the Joint Lead Managers have undertaken to act as joint lead managers to the Equity Raising and to underwrite the Conditional Placement and $75 million worth of the New Shares to be offered under the SPP, in each case, subject to requisite Shareholder approval.

In consideration for their services, Elders has agreed to pay the Joint Lead Managers, in equal proportions:

subject to receipt of requisite Shareholder approvals, an underwriting fee of 2.75% of the proceeds of the Conditional Placement (other than $55 million of New Shares to be subscribed for by QBE) and the underwritten portion of the SPP;
subject to receipt of requisite Shareholder approvals, a management fee of 0.75% of the proceeds of the Conditional Placement (other than $55 million of New Shares to be subscribed for by QBE) and the underwritten portion of the SPP; and
a fee of 1% on $55 million worth of the New Shares to be subscribed for by QBE in the Conditional Placement.

The Company has also agreed to pay the Joint Lead Managers the above fees in certain circumstances where the Equity Raising does not proceed. The fees will not be payable if Shareholders resolve not to approve the issue of New Shares under the Equity Raising.

Elders must also reimburse the Joint Lead Managers for certain costs incidental to the Equity Raising, expenses, disbursements and fees including legal costs and disbursements of the Joint Lead Managers incurred in connection with the Equity Raising and the preparation of the Underwriting Agreement.

9.4.1 Warranties and indemnities

Customary and usual representations and warranties are given by Elders, including in relation to matters such as the power to enter into the Underwriting Agreement, corporate authority and approvals and compliance with all applicable laws and ASX Listing Rules in relation to the Equity Raising. Amongst others, Elders also represents and warrants that this Prospectus and the Offer Documents comply with all applicable laws, including the Corporations Act, the ASX Listing Rules and the ASX Waivers and that any public statements will not contain any misleading or deceptive statements or omissions, that Elders is not (and will not be before the expiry of the Offer Period) in breach of any continuous disclosure obligations under Chapter 3 of the ASX Listing Rules, and that none of the information supplied to the Joint Lead Managers is misleading or deceptive or contains material omissions.

Elders indemnifies the Joint Lead Managers in respect of certain losses suffered in connection with the Equity Raising.

9. Additional Information

9.4.2 Rights to terminate

Either of the Joint Lead Managers may, if any one or more of the events set out below occurs at any time in the period from (and including) the date of the Underwriting Agreement to 10am on the SPP Settlement Date (as defined in the Underwriting Agreement) (or the particular period specified), terminate its obligations under the Underwriting Agreement by notice given to Elders and the other Joint Lead Manager:

(ASIC action)

ASIC gives notice of an intention to hold a hearing or issues or applies for certain orders (including an interim order) in relation to the Equity Raising or the Offer Documents or gives notice of an intention to prosecute Elders or any of its directors; or
an application is made by ASIC for an order under Part 9.5 of the Corporations Act in relation to the Equity Raising or the Offer Documents; or
ASIC commences any investigation or hearing under Part 3 of the Australian Securities and Investments Commission Act 2001 (Cth) in relation to the Equity Raising or the Offer Documents,

and any such intention, application, notice investigation or hearing becomes public or is not withdrawn within two Business Days after it is made or where it is made less than two Business Days before the Conditional Placement settlement date or the SPP Settlement Date it has not been withdrawn by the applicable date.

(supplementary offer document) A supplementary or replacement Prospectus must, in the reasonable opinion of a Joint Lead Manager, be lodged with ASIC under section 719 of the Corporations Act or Elders lodges a supplementary offer document without the prior written approval of a Joint Lead Manager.
(ASX approval) Unconditional approval (or conditional approval, provided such condition would not, in the reasonable opinion of the Joint Lead Managers, have a material adverse effect on the success or settlement of the Equity Raising) by ASX for official quotation of the New Shares is refused, or is not granted in respect of New Shares to be issued under the Conditional Placement or SPP by the respective dates on which they are due to commence trading on ASX, or ASX makes an official statement to any person or indicates to Elders or the Joint Lead Managers that official quotation of the New Shares will not be granted.
(lodgement) Elders fails to lodge the Prospectus with ASIC on or before the Lodgement Date (or such later date approved in writing by the Joint Lead Managers).
(consent) If:
any person (other than a Joint Lead Manager) whose consent to the issue of the Prospectus is required by section 716 of the Corporations Act refuses to give their consent or having previously consented to the issue of the Prospectus withdraws such consent; or
any accounting or legal adviser to Elders refuses to give its consent or having previously consented to be named in the Prospectus, withdraws such consent.
(certificate) A certificate which is required to be furnished by Elders under the Underwriting Agreement is not furnished when required or a statement in that certificate is untrue, incorrect or misleading or deceptive in any material respect.
(timetable) Any event specified in the timetable is delayed for more than two Business Days without the prior written approval of the Joint Lead Managers (such approval not to be unreasonably withheld or delayed).
(prospectus) The Prospectus omits any information required by the Corporations Act or any other applicable law, contains a statement which is or becomes misleading or deceptive or is likely to mislead or deceive or otherwise fails to comply with the Corporations Act or any other applicable law or the issue or distribution of the Prospectus is misleading or deceptive or likely to mislead or deceive.
(listing) Elders ceases to be admitted to the official list of ASX or the Shares are suspended, from trading on, or cease to be quoted on ASX (which, for the avoidance of doubt, does not include the trading halts requested by Elders for the purposes of conducting an institutional bookbuild in respect of the Conditional Placement or a trading halt or voluntary suspension otherwise implemented with the consent of a Joint Lead Manager to facilitate the Equity Raising).
(withdrawal) Elders withdraws or indicates that it does not intend to proceed with the Prospectus or all or any part of the Equity Raising.
(debt facilities) Other than as publicly disclosed in writing to ASX or in writing to the Joint Lead Managers prior to entry into the Underwriting Agreement:
Elders breaches, or defaults under, any provisions, undertaking, covenant or ratio of a material debt or financing arrangement or any related documentation to which that entity is a party, and that breach or default has a material adverse effect on the Group; or
an event of default, potential event of default, review event or other similar event occurs or in respect of any such debt or financing arrangement or related documentation, which is notified by the lender or financier in writing to the Group as having occurred, which gives that lender or financier the right to accelerate or require repayment of the debt of financing before its stated maturity.
(ASX waiver and ASIC modifications) ASX withdraws, revokes, qualifies or amends (other than immaterially) ASX waivers necessary for the conduct of the Equity Raising, or ASIC withdraws, revokes, qualifies or amends (other than immaterially) the ASIC modifications necessary for the conduct of the Equity Raising.

Elders Limited Prospectus

(Insolvency) Elders or a material subsidiary is insolvent or there is an act or omission which is likely to result in Elders or a material subsidiary becoming insolvent.
(section 730 notice) Any person, other than that Joint Lead Manager, gives a notice under sections 730 of the Corporations Act.
(new circumstance) If, in the reasonable opinion of a Joint Lead Manager, at any time on or after the opening date of the Conditional Placement an event occurs within the meaning of section 719(1)(c) of the Corporations Act for the Equity Raising.
(trading halts) Certain trading halts end (assessed on a cumulative basis) before the expiry of a specified period.
(illegality) There is an event or occurrence, including any statute, order, rule or regulation, official directive or request of any government agency which makes it illegal for the Joint Lead Manager to satisfy an obligation under the Underwriting Agreement, or to market, promote or settle the Equity Raising in accordance with the Underwriting Agreement.
(market fall) The S&P/ASX 200 Index:
closes, on any two consecutive Business Days before the Conditional Placement settlement date or on the Business Day immediately prior to the Conditional Placement settlement date, at a level that is 15% or more below level at market close on the Business Day immediately preceding the date of the Underwriting Agreement (ASX 200 Starting Level); or
closes, on any two consecutive Business Days before the SPP Settlement Date or on the Business Day immediately prior to the SPP Settlement Date, at a level that is 15% or more below the ASX 200 Starting Level.
(QBE subscription agreement) The agreement pursuant to which QBE has agreed to subscribe for New Shares in the Conditional Placement is breached in a material respect or is terminated or rescinded.

Either of the Joint Lead Managers may if any one or more of the events set out below occurs at any time in the period from (and including) the date of the Underwriting Agreement to 10am on the SPP Settlement Date (as defined in the Underwriting Agreement) (or the particular period specified) terminate its obligations under the Underwriting Agreement, provided that, in the actual and reasonable opinion of that Joint Lead Manager, the event: (i) has, or is likely to have, a material adverse effect on the success or settlement of the Equity Raising; (ii) has, or is likely to have, a material adverse effect on the business, financial position or prospects of the Group; or leads, or is likely to lead: (iii) to a contravention by that Joint Lead Manager of, or that Joint Lead Manager being involved in a contravention of, the Corporations Act or any other applicable law including the U.S Securities Act; or (iv) to a liability for that Joint Lead Manager under the Corporations Act or any other applicable law including the U.S Securities Act:

• (adverse change) There is an adverse change in the assets, liabilities, financial position or performance, profits, losses or prospects of Elders or the Group (in so far as the position in relation to any entity in the Group affects the overall position of Elders).

(director) A Director:
is charged with an indictable offence relating to any financial or corporate matter, or fraudulent or misleading or deceptive conduct, or any regulatory body or government agency commences any public action against the Director in his or her capacity as a Director of Elders or announces that it intends to take any such action; or
is disqualified from managing a corporation under sections 206B, 206C, 206D, 206E, 206EA, 206F or 206G(5) of the Corporations Act.

• (change in law) There is introduced into the Parliament of the Commonwealth of Australia or any State or Territory of Australia a law or prospective law or any new regulation is made under any law, or a government agency or the Reserve Bank of Australia adopts a policy, or there is any official announcement on behalf of the Government of the Commonwealth of Australia or any State or Territory of Australia or a Government Agency that such a law or regulation will be introduced or policy adopted (as the case may be).

(breach) Elders fails to perform or observe any of its obligations under the Underwriting Agreement.
(representation and warranties) A representation or warranty made or given or deemed by the Underwriting Agreement to have been made or given by Elders under the Underwriting Agreement is breached or proves to be, or has been, or becomes, untrue or incorrect.
(disruption in financial markets) Any of the following occurs:
a general moratorium on commercial banking activities in Australia, the United States of America or the United Kingdom is declared by the relevant central banking authority in any of those countries, or there is a material disruption in commercial banking or security settlement or clearance services in any of those countries;
trading in all securities quoted or listed on ASX, the London Stock Exchange or the New York Stock Exchange or NASDAQ is suspended or limited in a material respect; or
the occurrence of any other adverse change or disruption to financial, political or economic conditions, currency exchange rates or controls or financial markets in Australia, a member of the European Union, the United States of America or the United Kingdom or elsewhere or any change or development involving a prospective adverse change in any of those conditions or markets.

9. Additional Information

(hostilities) Hostilities not existing at the date of the Underwriting Agreement commence (whether war has been declared or not) or a major escalation in existing hostilities occurs (whether war has been declared or not) involving any one or more of Australia, New Zealand, the United States of America, any member state of the European Union, the United Kingdom, North or South Korea, Indonesia, Japan, Russia, France, Germany, Brazil or the People’s Republic of China, or a national emergency is declared by any of those countries, or a major terrorist act is perpetrated anywhere in the world.
(change in management) There is a change in the senior management of the Group or board of Directors of Elders.
(prescribed occurrence) An occurrence of the kind described in section 652C of the Corporations Act occurs in respect of Elders (or any of its related bodies corporate) during the Offer Period.
(failure to comply) Elders fails to comply with a provision of its constitution, the ASX Listing Rules, the Corporations Act, applicable laws, or a requirement, order or request, made by or on behalf of the ASIC, ASX or any government agency.

In the event that one of the Joint Lead Managers terminates its obligations under the Underwriting Agreement in accordance with the above, the other may elect, but is not obliged, to take up the terminating Joint Lead Manager’s obligations, in which case it will also receive the fees that would otherwise have been payable to the terminating Joint Lead Manager.

9.5 Material contracts

9.5.1 Refinancing of debt facilities

On 4 September 2009, Elders entered into binding commitment letters with its bank lenders and holders of its USPP Notes (“Lenders”) pursuant to which the Lenders agreed to refinance Elders’ corporate debt and note facilities on terms set out in an agreed term sheet, subject to documentation and conditions precedent. The table below sets out the details, including principal amounts and maturity dates, of the facilities to be refinanced and made available to Elders.

Term	Term Debt – Tranche a	asset Sales Bridge – Tranche B	asset Sales Bridge – Tranche B	Equity Bridge – Tranche C	Revolving Facility – Tranche D
	Bank Debt Tranche a1 USPP Notes Tranche a2 USPP Notes Tranche a3 USPP Notes Tranche a4	Bank Debt Tranche B1 Bank Debt Tranche B2		Bank Debt Tranche C1 USPP Notes Tranche C2	Bank Debt Tranche D1 Bank Debt Tranche D2
Description	Term Loan USPP Notes USPP Notes USPP Notes	Asset Sales Bridge Asset Sales Bridge		Equity Bridge Equity Bridge	Working Capital Ancillary Facilities
Amount	A$127.2 million US$48.536 million in two series (Series A and Series B) US$36.216 million in two series (Series C and Series D) US$25.44 million	A$344.7 million US$66.103 million		A$316.3 million US$60.645 million	A$116.8 million A$198 million
Purpose	Continuation of existing facilities Refnance of existing facilities	Continuation of existing facilities	Refnance of existing facilities	Continuation of existing facilities Refnance of existing facilities	Continuation of existing facilities and future drawings for general corporate purposes
Maturity date3	30 September 2012 15November2014– Series A and C 31May2015– Series B and D Subject to Noteholder Put Right1 15 November 2014 Subject to Noteholder Put Rights for each noteholder	30 September 2010 30 September 2010		31 October 20092 31 October 20092	18months from date of Facility Agreement subject to review

Each individual Noteholder of A2, A3 and A4 Notes has a Noteholder Put Right. This is described in more detail below.
Elders expects to repay the Equity Bridge in full prior to 31 October 2009 with a portion of the proceeds of the Equity Raising.
There are various mandatory prepayments. See below for more detail.

Elders Limited Prospectus

9.5.1.1 Conditions precedent

The refinancing and availability of the facilities described above is subject to the satisfaction of various conditions precedent, including entry into definitive documentation reflecting the binding term sheet.

9.5.1.2 Interest

The facilities will bear interest at the applicable bank bill rate, or in the case of the USPP Notes, at the original blended coupon of the notes, plus a specified margin. The margin for Tranche A1 Bank Debt, Tranche A2 USPP Notes, Tranche A3 USPP Notes, Tranche D1 Bank Debt and Tranche D2 Bank Debt adjusts down (or up) depending on Elders’ ratio of gross debt to EBITDA.

9.5.1.3 Noteholder put right

The USPP Notes Tranche A2, USPP Notes Tranche A3 and USPP Notes Tranche A4 give holders of those notes the right to require Elders to redeem their notes (“Noteholder Put Right”). The Noteholder Put Right is exercisable up to and including 30 September 2012. The Noteholder Put Right in respect of Tranche A3 Notes is also exercisable, at least in part, at other times, but only if, and proportionally to the extent that, the Tranche D1 Bank Debt becomes due and payable, or is cancelled or refinanced or a Lender exits that bank debt upon a review event.

9.5.1.4 mandatory prepayments

All net equity raising proceeds received prior to the “deleveraging date” (other than $45 million of the Conditional Placement amount subscribed for by QBE plus an amount of costs and expenses) must be used to prepay the facilities and notes. Prior to the “deleveraging date”, all net asset sales proceeds, and on and from the “deleveraging date”, all net asset sales proceeds in respect of asset sales pursuant to the QBE Insurance Transaction, the Timber Sale and the proposed Hi-Fert sale must be used to prepay the facilities and notes. A “deleveraging date” is a date upon which Elders delivers a quarterly compliance certificate showing that Elders’ ratio of gross debt to EBITDA is 2.50:1 or less for two consecutive quarters.

9.5.1.5 Representations and warranties, undertakings and events of default

The definitive documentation for the facilities and notes will contain extensive representations and warranties, financial information, and general undertakings and events of default (including a cross-default for any event of default under the other finance documents).

The undertakings include restrictions on members of the Elders Group. These include (subject to specified exceptions) maintenance of a minimum cash balance, restrictions on the Group members’ ability to incur indebtedness, provide financial accommodation and guarantees, grant security, make disposals and acquisitions and invest in joint ventures and partnerships. For example, Elders is not permitted to pay distributions on the Elders Hybrids until and including 30 September 2011. The “dividend stop” provisions under the terms of issue of the Elders Hybrids operate such that Elders is not permitted to make or pay a dividend on Shares while the stop applies. Elders is also restricted from paying dividends on Shares until after 31 March 2012 (and, thereafter, more limited restrictions apply).

9.5.1.6 Financial undertakings

The facilities will contain financial maintenance covenants, including leverage ratio, gearing ratio and interest cover ratio. In addition, the facilities will limit the amount Elders is able to allocate to capital expenditures to the aggregate of 120% of the base case amounts set out in the business plan for the relevant financial year and the amount of net profit from any prior financial year not distributed as dividends or applied in permanent prepayment of the facilities and notes. The financial maintenance covenants will be tested quarterly on a rolling 12-month basis, other than in the first year where Interest Expense and EBITDA will be annualised, with testing commencing on 30 June 2010 (other than for the gearing ratio, which commences on 31 December 2009). The table on the following page sets out the ratios applying at the dates specified.

9. Additional Information

Calculation date	leverage ratio1	Gearing ratio2	Interest cover ratio3
31December2009	–	75%	–
31March2010	–	75%	–
30June2010	6.00x	60%	1.20x
30September2010	6.00x	60%	1.20x
31December2010	4.75x	60%	1.75x
31March2011	4.50x	60%	2.00x
30June2011	3.75x	55%	2.25x
30September2011	3.75x	55%	2.50x
31December2011	3.25x	50%	2.75x
31March2012	3.00x	50%	3.00x
30June2012	2.50x	45%	3.25x
30September2012	2.50x	45%	3.25x

Leverage ratio means the ratio of all outstanding Elders Group indebtedness under the facilities (except for Bank Debt Tranche D2) and the notes to EBITDA.
Gearing ratio means the ratio of all outstanding Elders Group indebtedness under the facilities (except for Bank Debt Tranche D2) and the notes to total Shareholder equity.
Interest cover ratio means the ratio of Elders Group EBITDA to interest expense under the facilities (except for Bank Debt Tranche D2) and notes less interest income.

9.5.1.7 Review events

There are a number of review events with respect to the facilities and notes. It will be a review event if, in the reasonable opinion of the Agent, there is a change in control of Elders. The definition of “control” includes possession directly or indirectly of the power to control 50% or more of the total votes which might be cast at Elders’ general meeting. If this occurs, Elders and its lenders must negotiate in good faith for a period of 30 days with a view to agreeing any changes necessary to allow the facilities to remain in place. If no agreement is reached, the lenders may cancel the facilities and accelerate any outstanding principal amount.

A review event with respect to the facilities will also occur if the Argo Trust Securitisation Programme is either terminated at any time before its stated maturity or expiry date or is not extended, unless it is replaced by an alternative funding arrangement in substantially the same terms as the current programme or on terms reasonably acceptable to the majority financiers. If alternate funding arrangements are not obtained, any noteholder or bank may give 30 days notice under the facilities cancelling its commitments.

9.5.1.8 Tranche D review

The Tranche D Revolving Facility is subject to a review in January 2011 in which the banks (in consultation with Elders) conduct a review of the financial condition and state of affairs of Elders. If all the banks are satisfied with the review, the Tranche D Revolving Facility will be extended on the same terms (committed amount, margin, etc.) to 30 September 2012. If a bank is not satisfied with the review, Elders may require that bank to transfer its participation to another person selected by Elders. If that bank’s commitment has not been transferred by the then maturity date, Tranche D1 and D2 will be repayable at that time. The Noteholders under Tranche A3 have a Noteholder Put Right exercisable on the date on which, pursuant to the Tranche D review, any amounts outstanding under Tranche D1 becomes due and payable or a cancellation of commitments under Tranche D1 or a transfer of participations occurs.

9.5.1.9 Guarantee and security

The facilities will be guaranteed by all (subject to some exceptions) wholly owned subsidiaries of Elders incorporated in Australia, New Zealand (and China, subject to certain cost/benefit principles). In addition, the facilities will be secured by first-ranking charges and mortgages over the assets and undertakings of Elders and each of the guarantors.

Elders Limited Prospectus

9.5.2 QBE Insurance Transaction

On 31 August 2009, Elders and QBE entered into a share sale agreement, shareholders agreement and associated documents to:

sell to QBE, Elders’ general insurance underwriting and agency operations via sale of 100% of the shares of Elders Insurance Limited and Elders Insurance Agencies Pty Limited respectively; and
establish with QBE an incorporated joint venture (“Agency Joint Venture”) to operate as a managing general insurance agency for the distribution of general insurance products under the Elders name.

To implement the joint venture arrangements, Elders has also entered into exclusive access and brand licensing arrangements with the Agency Joint Venture and QBE for a 20 year term. Elders will also novate to the Agency Joint Venture its current franchisee distribution network (and associated client servicing rights).

The Agency Joint Venture will initially be held 75% by QBE and 25% by Elders. QBE has granted to Elders a call option (exercisable at specified times during the initial three years of the Agency Joint Venture) to take its holding in the Agency Joint Venture to 50% (for a price calculated as a multiple of earnings per share in the Agency Joint Venture).

QBE will pay total consideration of approximately $270 million. The arrangements are conditional on required regulatory approvals. Completion of the agreements is expected to occur on or about 30 September 2009 (subject to the timing of the receipt of the required regulatory approvals).

On 30 August 2009, QBE also entered into a subscription agreement with Elders under which QBE agreed to subscribe for $45 million worth of New Shares in the Conditional Placement.

9.5.3 Timber Sale

Elders and its subsidiary, ITC Limited, have entered into a binding purchase and sale agreement for the sale of ITC Timber Pty Ltd, an entity which holds Elders’ hardwood timber processing operations as well as its 50% stake in Smartfibre Pty Ltd, to Gunns Limited.

9.6 ASX waivers

ASX has confirmed that it has granted to Elders a waiver of ASX Listing Rule 7.1 to permit Elders to ignore Elders Shares issued during the 12 months preceding the Equity Raising to the underwriter of Elders’ dividend reinvestment program.

Elders has applied to ASX for a confirmation or waiver of ASX Listing Rule 7.3.8 to enable Eligible Shareholders other than those who receive New Shares in the Conditional Placement and underwriters and sub-underwriters of the SPP to vote in respect of the SPP Shareholder approval resolution to be put at the EGM.

9.7 ASIC relief

ASIC has granted a modification to the definition of “continuously quoted securities” under section 9 of the Corporations Act such that Elders is still able to conduct the Equity Raising under a transaction-specific prospectus, despite having received an order from ASIC under section 340 of the Corporations Act permitting it to change its financial year end from 30 June to 30 September.

9.8 Consents

Each of the parties named below:

has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named;
has not made any statement in this Prospectus or any statement on which a statement made in this Prospectus is based, other than as specified below; and
to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any statements in, or omissions from, this Prospectus, other than the reference to its name in the form and context in which it appears and any statement or report included in this Prospectus with its consent, as specified on page 86.

Gunns will pay gross consideration of approximately $100 million. The sale is conditional on government and regulatory approvals (as may be required). Completion of the sale is expected to occur by 31 October 2009 (subject to the timing of the receipt of the required approvals). The sale agreement contains customary terms such as representations and warranties and non-compete provisions.

9. Additional Information

Role	Consenting party Consent
Joint Lead Managers	Goldman Sachs JBWere Pty Ltd Consent to be named RBS Equity Capital Markets (Australia) Limited
Australian Legal Adviser	Freehills Consent to be named
Independent Accountant	Ernst & Young Transaction Advisory Services Limited Consent to be named and inclusion of investigating accountant’s report
Auditor	Ernst & Young Consent to be named
Share Registry	Computershare Investor Services Limited Consent to be named

9.9 Interests of Directors

Other than as set out below or elsewhere in this Prospectus:

No Director or proposed Director has, or has had in the two years before lodgement of this Prospectus, an interest in:
the formation or promotion of Elders;
any property acquired or proposed to be acquired by Elders in connection with its formation or promotion or the Equity Raising; or
- the Equity Raising itself.
No amounts, whether in cash or Elders Shares or otherwise, have been paid or agreed to be paid and no benefits have been given or agreed to be given to any Director either to induce them to become, or to qualify them as, a Director, or otherwise for services rendered by them in connection with:
the promotion or formation of Elders; or
the Equity Raising.

9.10 Directors’ holding of Elders Shares and options

As at the date of this Prospectus, the Directors have the following interests in issued securities of Elders, either directly or indirectly:

	Benefcial holding			Non-benefcial	holding
	Interest in	options over	Notes convertible		Notes convertible
Director	Elders Shares	Elders Shares	into Elders Shares	Elders Shares	into Elders Shares
Stephen Gerlach	606,822	–	–	–	–
Malcolm Jackman	130,000	4,000,000	–	–	–
Charles Bright	103,492	–	–	–	–
James Fox	26,765	–	–	–	–
Raymond Grigg	31,560	–	–	–	–
Ian MacDonald	260,000	–	–	–	–
Hutch Ranck	170,000	–	–	–	–
Anthoni Salim	33,545,578	–	–	–	–
Graham Walters	161,000	–	–	–	–

Elders Limited Prospectus

9.11 Interests of advisers and costs of the Equity Raising

Other than as set out below or elsewhere in this Prospectus, no adviser involved in the preparation of this Prospectus (nor any firm in which any adviser is a partner), has held at any time in the past two years any interests in:

the formation or promotion of Elders;
any property acquired or proposed to be acquired by Elders in connection with its formation or promotion or the Equity Raising; or
the Equity Raising itself.

In addition, other than as set out below, no amounts (whether in cash, Elders Shares or otherwise) have been paid or agreed to be paid and no benefits have been given or agreed to be given to any adviser (or any firm in which the adviser is a partner) for services rendered by the adviser, or the adviser’s firm in connection with the promotion or formation of Elders or in connection with the Equity Raising.

Goldman Sachs JBWere Pty Ltd and RBS Equity Capital Markets (Australia) Limited have acted as Joint Lead Managers to the Equity Raising. In relation to these services, Elders has agreed to pay the fees as set out in Section 9.4 above.
Freehills has acted as Australian legal advisers to Elders in relation to this Prospectus and the Equity Raising. In aggregate, Elders has paid or agreed to pay $400,000 (plus GST and disbursements) for these services to the date of this Prospectus. Further amounts may be paid to Freehills in accordance with their usual time based charge out rates.
Ernst & Young Transaction Advisory Services Limited has acted as Independent Accountant in relation to the Equity Raising. In aggregate, Elders has paid or agreed to pay $1.4 million (plus GST and disbursements) for these services to the date of this Prospectus. Further amounts may be paid to Ernst & Young Transaction Advisory Services Limited in accordance with their usual time based charge out rates.
Ernst & Young has acted as Elders’ auditor in relation to the Equity Raising. In aggregate, Elders has paid or agreed to pay $300,000 (plus GST and disbursements) for the services relating to the Equity Raising to the date of this Prospectus. Further amounts may be paid to Ernst & Young in accordance with their usual time based charge out rates.
Caliburn has acted as financial advisers to the Equity Raising. In relation to these services, Elders has agreed to pay Caliburn a fee of 1% of the proceeds of the Conditional Placement (other than $55 million of New Shares to be subscribed for by QBE in the Conditional Placement) and the underwritten portion of the SPP (plus GST and disbursements).

9.12 Foreign selling restrictions

The distribution of this Prospectus (including an electronic copy) in jurisdictions outside Australia and New Zealand may be restricted by law. If you come into possession of this Prospectus in jurisdictions outside Australia or New Zealand, then you should seek advice on, and observe any such restrictions. If you fail to comply with such restrictions, that failure may constitute a violation of applicable securities laws. Elders disclaims all liabilities to such persons.

This Prospectus or the New Shares have not been and will not be, registered in any jurisdiction other than Australia. This Prospectus does not constitute an offer or invitation in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or invitation.

A) United States

The Equity Raising is not being made in the United States or to, or for the account or benefit of, US Persons. Accordingly, Eligible Shareholders (including nominees) who hold Elders Shares on behalf of persons in the United States or that are, or are acting for the account or benefit of, US Persons may not apply for New Shares on behalf of such persons, and may not send to such persons this Prospectus, the Application Form or any other materials relating to the Equity Raising.

The New Shares have not been, and will not be, registered under the US Securities Act or the securities laws of any state or other jurisdiction of the United States. The New Shares may not be offered, sold or resold in the United States or to, or for the account or benefit of, a US Person, except in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws.

B) United Kingdom

Neither this Prospectus nor any accompanying letter or any other documents have been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of Section 85 of the Financial Services and Markets Act 2000 (“FSMA”)) has been published or is intended to be published in respect of the New Shares.

Each of the Company and the Underwriters has:

i. complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the New Shares in, from or otherwise involving the United Kingdom; and
ii. only communicated or caused to be communicated and will only communicate or cause to be communicated in the United Kingdom any invitation or inducement to engage in investment activity (within the meaning of Section 21 of FSMA) received by it in connection with the issue or sale of the New Shares in circumstances in which Section 21(1) of FSMA does not apply to the Company.

9. Additional Information

C) France

Neither this Prospectus nor any other offering material relating to the New Shares is being distributed pursuant to a public offer in France within the meaning of article L.411-1 of the French Monetary and Financial Code (Code monétaire et financier) and as a result, neither this Prospectus nor any other offering material relating to the New Shares has been or will be submitted to the clearance procedures of the Autorité des marchés financiers for approval in France.

The New Shares have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this Prospectus nor any other offering material relating to the New Shares has been or will be (i) released, issued, distributed or caused to be released, issued or distributed to the public in France or (ii) used in connection with any offer for subscription or sale of the New Shares to the public in France.

Such offers, sales and distributions will be made in France only to (i) persons providing investment services relating to portfolio management for the account of third parties and/or (ii) qualified investors (investisseurs qualifiés), all as defined in and in accordance with articles L.411-1, L.411-2 and D.411-1 to D.411-3 of the French Code monétaire et financier.

Investors in France and persons who come into possession of this Prospectus or any other offering material relating to the New Shares are required to inform themselves about and observe any such restrictions.

D) Norway

This Prospectus has not been approved by, or registered with, any Norwegian securities regulators pursuant to the Norwegian Securities Trading Act of 29 June 2007. Accordingly, neither this Prospectus nor any other offering material relating to the New Shares constitutes, or shall be deemed to constitute, an offer to the public in Norway within the meaning of the Norwegian Securities Trading Act of 2007. The New Shares may not be offered or sold, directly or indirectly, in Norway except;

(a) in respect of an offer of New Shares addressed to investors subject to a minimum purchase of New Shares for a total consideration of not less than €50,000 per investor;
(b) to “professional investors” as defined in the Norwegian Securities Regulation of 29 June 2007 no. 876, being;
i. legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
ii. any legal entity which is registered as a professional investor with the Oslo Stock Exchange (No. Oslo Børs) and which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;
iii. any natural person which is registered as a professional investor with the Oslo Stock Exchange (No. Oslo Børs) and which has two or more of (1) an average execution of at least ten – 10 – transactions in securities of significant volume per quarter for the last four quarters; (2) a portfolio of securities with a market value of at least €500,000 and (3) worked or works, for at least one – 1 – year, within the financial markets in a position which presuppose knowledge of investing in securities;
(c) to fewer than 100 natural or legal persons (other than “professional investors” as defined in the Norwegian Securities Regulation of 29 June 2007 no. 876) subject to obtaining the prior consent of the Joint Lead Managers for any such offer;
(d) in any other circumstances provided that no such offer of New Shares shall result in a requirement for the registration, or the publication by the Company, the Joint Lead Managers, of a prospectus pursuant to the Norwegian Securities Trading Act of 29 June 2007.

E) Switzerland

The New Shares may not and will not be publicly offered, sold, advertised, distributed or re-distributed, directly or indirectly, in or from Switzerland, and no solicitation for investments in the New Shares may be communicated, distributed or otherwise made available in Switzerland in any way that could constitute a public offering within the meaning of articles 652a and 1156 of the Swiss Code of Obligations (“CO”) or of article 3 of the Swiss Federal Act on Collective Investment Schemes (“CISA”).

New Shares may only be offered to qualified investors (as defined in the CISA), such as banks, securities dealers, regulated insurance institutions, fund management companies and high net worth individuals, in circumstances such that there is no public offering.

Neither this Prospectus nor any other offering or marketing material relating to the New Shares or Elders constitutes an offering prospectus within the meaning of articles 652a and 1156 CO and, consequently, may not comply with the information standards required thereunder.

Elders has not applied for a listing of the New Shares on the SIX Swiss Exchange or any other regulated securities market in Switzerland. Neither this Prospectus nor any other offering or marketing material relating to the New Shares or Elders constitutes a listing prospectus prepared in accordance with the listing rules of the SIX Swiss Exchange, and, consequently, may not comply with the information standards required thereunder.

Elders Limited Prospectus

F) The Netherlands

The New Shares will not be offered to the public in the Netherlands, other than:

to legal entities that are authorised or regulated to operate in the financial markets or, if not so authorised, or regulated, whose corporate purpose is solely to invest in securities; or
to any legal entity that has two or more of:
i. an average of at least 250 employees during the last financial year;
ii. a balance sheet of more than ¤43,000,000; and
iii. an annual net turnover of more that ¤50,000,000, as shown in its last annual or consolidated accounts.

For the purpose of this provision the expression of an “offer of New Shares to the public” in the Netherlands means the communication in any form and by any means of sufficient information on the terms of the Equity Raising and the New Shares to be offered so as to enable an investor to decide to purchase or subscribe for the New Shares. This Prospectus and any other materials in connection with the Equity Raising may only be sent or otherwise distributed in the Netherlands to investors who meet the criteria set out above.

G) Italy

This Prospectus and any other materials in connection with the offer of the New Shares relating to Italy are for distribution, in compliance with any applicable law and regulation, only to qualified investors in Italy pursuant to Article 100, paragraph 1, letter (a) of Legislative Decree No. 58 of 24 February 1998 (the “Unified Financial Act”), Article 34-ter, paragraph 1, letter (b) of the Regulation No. 11971 of 14 May 1999 issued by Commissione Nazionale per le Società e la Borsa (“CONSOB”) and Article 2.1(e) of the Prospectus Directive (the “Qualified Investors”), all as amended. The distribution of this Prospectus and of any other materials in connection with the offer of the New Shares relating to Italy does not constitute and it is not intended to be an “offer to the public” within the meaning of Article 1.1(t) of the Unified Financial Act. In no circumstances should these documents circulate among, or be distributed in Italy to, individuals or entities falling outside the definition of Qualified Investors. New Shares may not be offered or sold, directly or indirectly, in Italy or to a resident of Italy, other than to a Qualified Investor pursuant to Article 100, paragraph 1 letter (a) of the Unified Financial Act, and in compliance with the forms and procedures therein set forth in any applicable law and regulation. Any such offer or any distribution of this Prospectus and any other materials in connection with the offer of the New Shares relating to Italy within Italy must be conducted either by banks, investment firms (as defined in the Unified Financial Act) or financial intermediaries enrolled in the special register provided for by Article 107 of Legislative Decree No. 385 of 1 September 1993, as amended, to the extent such entities are duly authorised to perform the service of subscription and/or placement with firm underwriting commitment or standby commitments to

issuers and/or placement without firm or standby commitment to issuers in Italy in accordance with the relevant provisions of the Unified Financial Act and in compliance with any applicable notification requirement or limitation imposed upon the offer of shares by CONSOB or the Bank of Italy. Any investor purchasing New Shares is solely responsible for ensuring that any offer or resale of such New Shares occurs in compliance with applicable laws and regulations. This Prospectus and any other materials in connection with the offer of the New Shares relating to Italy are intended for the use of the identified recipient only and are not to be distributed, for any reason, to any third party resident or located in Italy. No person resident or located in Italy other than the original recipients of this document and any other materials in connection with the offer of the New Shares may rely on this document and any other such materials. This Prospectus and any other materials in connection with the offer of the New Shares relating to Italy have not been and will not be submitted to the clearance procedures registered with the CONSOB pursuant to Italian securities legislation and accordingly may not be distributed to the public in Italy or used in connection with any offer to purchase or sell any rights or shares to the public in Italy.

H) Ireland

This Prospectus and any other materials in connection with the Equity Raising relating to Ireland do not constitute a prospectus within the meaning of Part 5 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 of Ireland. No offer of securities to the public is made, or will be made, that requires the publication of a prospectus pursuant to Irish prospectus law (within the meaning of Part 5 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 of Ireland) in general, or in particular pursuant to the Prospectus (Directive 2003/71/EC) Regulations 2005 of Ireland. No person in Ireland receiving a copy of this Prospectus and any other materials in connection with the Equity Raising relating to Ireland may treat the same as constituting an offer or invitation to him to acquire, subscribe for or purchase New Shares (nor should he in any event acquire, subscribe for or purchase New Shares) unless he is a qualified investor within the meaning of the Prospectus (Directive 2003/71/EC) Regulations 2005 of Ireland. This Prospectus has not been approved, reviewed or registered with the Irish Financial Regulator. This Prospectus does not constitute investment advice or the provision of investment services within the meaning of the European Communities (Markets in Financial Instruments) Regulations 2007 of Ireland (as amended) or otherwise. Elders and the Joint Lead Managers are not authorised investment firms within the meaning of the European Communities (Markets in Financial Instruments) Regulations 2007 of Ireland (as amended) and the recipients of this Prospectus should seek independent legal and financial advice in determining their actions in respect of or pursuant to this Prospectus.

9. Additional Information

I) Other Member States of the European Economic Area (including Germany)

This Prospectus has been prepared on the basis that all offers of New Shares will be made pursuant to an exemption under the Directive 2003/71/EC (“Prospectus Directive”), as implemented in Member States of the European Economic Area (“EEA”), from the requirement to produce a prospectus for offers of securities. Accordingly any person making or intending to make any offer within the EEA of New Shares which are subject to the placement contemplated in this Prospectus should only do so in circumstances in which no obligation arises for Elders or the Underwriters to produce a prospectus for such offer. Neither Elders nor the Underwriters have authorised, nor do they authorise the making of any offer of New Shares through any financial intermediary, other than offers made by the Underwriters which constitute the final placement of New Shares contemplated in this Prospectus.

In relation to each Member State of the EEA that has implemented the Prospectus Directive (each, a “Relevant Member State”), no offer of New Shares will be made to the public in that Relevant Member State, and an offer of New Shares in that Relevant Member State may only be made:

(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;
(b) to any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than €43,000,000; and (iii) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;
(c) to fewer than 100 natural or legal persons (other than defined as qualified investors in the Prospective Directive) subject to obtaining the prior consent of Elders and the Underwriters for any such offer; or
(d) in any other circumstances which do not require the publication by Elders of a prospectus pursuant to Article 3 of the Prospectus Directive.

Each person who initially acquires any New Shares or to whom any offer of New Shares is made will be deemed to have represented that it is a Qualified Investor (within the meaning of the local law of the Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive) or, if such implementation has not taken place, within the meaning of Article 2(1)(e) of the Prospectus Directive respectively). In the case of any New Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will also be deemed to have represented, warranted to and agreed with the Underwriters and Elders that: (i) the New Shares acquired by it have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors, as that

term is defined by the local law of the Relevant Member State or as defined in the Prospectus Directive respectively, or in circumstances in which the prior consent of the Underwriters has been obtained to each such proposed offer or resale; or (ii) where New Shares have been acquired by it or on behalf of persons in any Relevant Member State other than Qualified Investors, the offer of those New Shares to it is not treated under the Prospectus Directive as having been made to such persons or under the local law of the Relevant Member State as a public offer which requires the prior publication of a prospectus or a respective offering document. Elders and the Underwriters, each of their respective affiliates and others will rely upon the truth and accuracy of the foregoing representation, warranty and agreement.

For the purposes of this provision, the expression an “offer of New Shares to the public” in relation to any New Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the New Shares to be offered so as to enable an investor to decide to purchase the New Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State.

J) Hong Kong

The contents of this Prospectus have not been reviewed or approved by any regulatory authority in Hong Kong. This Prospectus has not been delivered for registration to the Registrar of Companies in Hong Kong and no steps have been taken to seek authorisation by the Securities and Futures Commission in Hong Kong for the registration or issue of this Prospectus. Accordingly, this Prospectus must not be issued, circulated or distributed in Hong Kong other than:

(a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or
(b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance.

No person may issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, this Prospectus or any other advertisement, invitation or document relating to the New Shares, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance.

This Prospectus is not an offer for sale to the public in Hong Kong and it is not the intention of the Company that the New Shares be offered for sale to the public in Hong Kong.

Elders Limited Prospectus

K) Singapore

This Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of New Shares may not be circulated or distributed, nor may New Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an existing holder of Elders Shares pursuant to Section 273(1)(cd) (i) of the Securities and Futures Act, Chapter 289 of Singapore (“SFA”), (ii) to an institutional investor under Section 274 of the SFA, (iii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA or (iv) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where New Shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the New Shares pursuant to an offer made under Section 275 of the SFA except:

1 to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such securities of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;
2 where no consideration is or will be given for the transfer; or

L) Other jurisdictions

The New Shares may not be offered or sold in any other jurisdiction under the Equity Raising, except to persons to whom such offer, sale or distribution is permitted under applicable law.

9.13 Transaction costs

The transaction costs of the Equity Raising (which include underwriting and offer management, advisory, legal, accounting, tax, listing and administration fees, as well as printing, advertising and other expenses relating to this Prospectus) are expected to amount to approximately $24 million and are to be paid by Elders.

9.14 Privacy

Elders and the Share Registry have already collected certain personal information from you. If you subscribe for New Shares, Elders and the Share Registry may update that personal information or collect additional personal information. Such information will be used to assess your application for New Shares, to provide facilities and services to you as a Shareholder and to undertake appropriate administration. If you do not provide the information requested, your Application may not be able to be processed effectively, or at all.

Elders and the Share Registry may disclose your personal information for purposes relating to your Application and holding to their agents and service providers, including those listed below, or as otherwise authorised under the Privacy Act:

the Joint Lead Managers in order to assess your Application;
the Share Registry for ongoing administration of the register; and
printers and mailing houses for the purposes of preparation and distribution of holder information and for handling of mail.

The information may also be disclosed to Elders’ related bodies corporate and/or their agents and service providers on the basis that they deal with such information in accordance with the Privacy Act.

Under the Privacy Act, you may request access to your personal information held by or on behalf of Elders by contacting the Share Registry as set out in the Corporate Directory. If the Share Registry’s record of your personal information is incorrect or out of date, it is important that you contact the Share Registry or Elders so that your records can be corrected.

3 where the transfer is by operation of law.

9. Additional Information

9.15 Application Form

Returning a completed Application Form, or making a payment by BPAY[®] , will be taken to constitute a representation by the Applicant that:

they have read and understood the Prospectus (and any supplementary or replacement prospectus) accompanying the Application Form and that their acceptance is in accordance with the terms of the Share Purchase Plan set out in the Prospectus;
the New Shares have not been, and will not be, registered under the US Securities Act or any US state or other securities laws, or in any other jurisdiction outside Australia or New Zealand, and may not be offered, sold or otherwise transferred except in accordance with an available exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and any other applicable securities laws;
they are not in the US, and are not a US Person or acting for the account or benefit of a US Person;
they will not send this Prospectus, the Application Form or any other material relating to the Equity Raising to any person in the US or that is a US Person;
if in the future they decide to sell or otherwise transfer their New Shares, they will only do so in regular way transactions on ASX where neither they nor any person acting on their behalf knows, or has reason to know, that the sale has been pre-arranged with, or that the purchaser is, in the US;
the law of any other place does not prohibit you from being given this Prospectus and the Application Form, nor does it prohibit them from making an Application for New Shares;
they accept the representations and warranties in this Section and the Application Form;
they declare that all details and statements in the Application Form are complete and accurate;
they acknowledge that once the Application Form is returned (or the payment made by BPAY[®] ) it may not be withdrawn;
they authorise Elders and the Joint Lead Managers and their officers or agents to do anything on their behalf necessary for New Shares to be issued to them, including to act on the instructions received by the Share Registry using the contact details on the Application Form;
they are over 18 years of age and have full legal capacity and power to perform all their rights and obligations under the Application Form; and
they acknowledge that the information contained in this Prospectus and the Application Form is not investment advice nor a recommendation that New Shares are suitable for you given your investment objectives, financial situation or particular needs, and is not a product disclosure statement, does not contain all of the information that you may require in order to assess an investment in Elders and is given in the context of Elders’ past and ongoing continuous disclosure announcements to ASX.

Institutional Investors participating in the Conditional Placement will be asked to complete confirmation letters provided to them by the Joint Lead Managers.

9.16 Governing law

This Prospectus and the contracts which arise on acceptance by Elders of applications under the Equity Raising are governed by the law applicable in New South Wales and each Applicant submits to the non-exclusive jurisdiction of the courts of New South Wales.

9.17 Directors’ consent to lodgement

Each Director has authorised and consented to the lodgement of this Prospectus with ASIC and has not withdrawn that consent prior to its lodgement with ASIC.

==> picture [89 x 42] intentionally omitted <==

Stephen Gerlach Chairman

they agree to being issued the number of New Shares they subscribe for (including any New Shares in excess of the maximum $20,000) and subject to scale back;

Elders Limited Prospectus

==> picture [360 x 40] intentionally omitted <==

==> picture [252 x 56] intentionally omitted <==

Glossary

10. Glossary

10.1 Glossary

The following is a glossary of the key terms used in this Prospectus:

Term	Defnition
Applicant	an Eligible Shareholder who submits an Application
Application	an application for New Shares pursuant to the SPP by way of Elders’ receipt of a duly
	completed Application Form together with Application Monies, or payment of Application
	Monies via BPAY®
Application Form	each personalised form accompanying this Prospectus upon which an Application for
	New Shares may be made by an Eligible Shareholder
Application Monies	monies equal to the value of New Shares at the Offer Price applied for by an Eligible Shareholder
APRA	Australian Prudential Regulation Authority
ASIC	Australian Securities and Investments Commission
ASX	ASX Limited (ABN98 008 624 691) or the market conducted by it
ASX Listing Rules	the offcial listing rules of ASX
Australian Accounting	the Australian accounting standards issued by the Australian Accounting Standards Board
Standards
Board	the board of Directors
Business Day	has the meaning given in the ASX Listing Rules
CHESS	Clearing House Electronic Subregister System operated by ASX Settlement and Transfer
	Corporation Pty Limited (ABN49 008 504 532)
Closing Date	5.00pm (Sydney time) on Friday, 23October2009(may be subject to variation), being the last
	day on which Applications will be accepted
CompanyorElders	Elders Limited (ABN34 004 336 636)
Conditional Placement	the placement of New Shares to Institutional Investors (which may include Shareholders who
	are Institutional Investors) at $0.15per New Share to raise approximately $400million, subject
	to Shareholder approval of it and the SPP
Constitution	the constitution of Elders
Corporations Act	Corporations Act2001(Cth), as waived or modifed in its application to Elders
Director	a director of Elders
EGM	the extraordinary general meeting of Elders’ members to be held on or about15October2009
	to consider resolutions relating to the Conditional Placement and SPP
Elders Hybrids	perpetual, subordinated, convertible unsecured notes issued by Elders (ASX code: ELDPA)
Elders Preference Shares	preference shares issued to a holder of Elders Hybrids if Elders is wound up
Elders Shareholder	the information line set up for the purpose of answering enquiries from Shareholders
Information Line	with respect to the Equity Raising. The numbers are1300 022 710(within Australia) or
	+61 3 9938 4347(from outside Australia) operating between8.30am and5.00pm (Sydney time)
	Monday to Friday during the Offer Period
Elders SharesorShares	fully paid ordinary shares in Elders
Eligible Shareholder	a person who is an Eligible Shareholder as described in Section2.4.2
Equity Raising	the offer being made under this Prospectus comprising the Conditional Placement and SPP
Gearing	the level of Elders’ net debt compared with its equity capital
GrouporElders Group	means Elders and each of its related bodies corporate (as defned by section50of the
	Corporations Act) or entities deemed to be controlled by Elders under Australian Accounting
	Standard AASB127

Elders Limited Prospectus

Term	Defnition
Group Member	any one or more of the Group
GST	has the meaning given in the A New Tax System (Goods and Services Tax) Act1999(Cth)
Institutional Investor	a person to whom an offer of New Shares may be made:
	in Australia without a disclosure document (as defned in the Corporations Act) on the basis •
	that such person is exempt from the disclosure requirements of Part6D.2in accordance with
	Sections708(8) or708(11) of the Corporations Act and who is not a US Person and is not
	acting for the account or beneft of a US Person; or
	outside Australia without registration, lodgement or approval of a formal disclosure •
	document or other fling in accordance with the laws of that foreign jurisdiction (except to
	the extent Elders, in its absolute discretion, is willing to comply with such requirements)
	and who is not a US Person and is not acting for the account or beneft of a US Person
Joint Lead Managers	Goldman Sachs JBWere Pty Ltd (ABN21 006 797 897) and RBS Equity Capital Markets
	(Australia) Limited (ABN17 000 757 111)
New Shares	the new Elders Shares offered under the Equity Raising
Offer Document	means the documents issued or published by or on behalf of Elders in respect of the Equity
	Raising, the Prospectus, the management presentation used to conduct the marketing of the
	Equity Raising, the Application Form, the institutional confrmation letter and any replacement
	or supplementary prospectus
Offer Period	the period commencing on the Opening Date and ending on the Closing Date
Offer Price	the offer price of $0.15per New Share issued under the Equity Raising
Opening Date	the day that the SPP opens, being Monday, 14September2009
Privacy Act	Privacy Act1988(Cth)
Pro Forma Balance Sheet	Elders’ pro forma balance sheet as at30June2009adjusted for the effect of the gross
	underwritten proceeds of the Equity Raising, sale of certain assets and investments and the
	refnancing of the Company’s debt facilities
Prospectus	this prospectus, dated4September2009and lodged with ASIC, including any supplementary
	or replacement prospectus
QBE	QBE Insurance Group Limited, QBE Insurance (Australia) Limited or a related body corporate of
	either of them, as the context requires
QBE Elders MGIA	the managing general insurance agency joint venture to be owned75%/25% by QBE and Elders
	respectively, to undertake the distribution of insurance products in rural and regional Australia
	under the Elders brand for a20year term
QBE Insurance Transaction	the sale to QBE of Elders’ general insurance underwriting and agency operations via sale of
	100% of the shares of Elders Insurance Limited and Elders Insurance Agencies Pty Limited,
	respectively, and the establishment with QBE of an incorporated joint venture to operate as
	a managing general insurance agency under the Elders name for the distribution of general
	insurance products
Record Date	7.00pm (Sydney time) on4September2009being the date on which Eligible Shareholders who
	are permitted to participate in the SPP will be determined
Related Parties	has the meaning given in the Corporations Act
Share Purchase PlanorSPP	the share purchase plan to be conducted by Elders to raise up to $150million, subject to
	Shareholder approval of it and the Conditional Placement
Share Registry	Computershare Investor Services Pty Limited (ABN48 078 279 277)
Shareholder	a registered holder of Elders Shares

10. Glossary

Term	Defnition
Timber Sale	the sale by Elders’ subsidiary, ITC Limited, of ITC Timber Pty Ltd, an entity which holds Elders’
	hardwood timber processing operations as well as its50% stake in SmartFibre Pty Ltd,
	to Gunns Limited
Underwriting Agreement	the agreement dated4September2009between Elders and the Joint Lead Managers as described
	in Section9.4
USorUnited States	United States of America
USD, US$orUnited States	United States currency
dollar
US Person	has the meaning provided in Regulation S under the US Securities Act
US Securities Act	the United States Securities Act of1933
VWAP	volume weighted average price of the security during the specifed period

10.2 Interpretation

In this Prospectus, unless the context otherwise requires:

(a) the singular includes the plural, and vice versa;
(b) words importing one gender include all genders;

(c) a reference to any statute, regulation, proclamation, ordinance or by-law includes all statutes, regulations, proclamations, ordinances or by-laws amending, varying, consolidating or replacing it and a reference to a statute includes all regulations, proclamations, ordinances or by-laws issued under that statute;

(d) a reference to a document includes all amendments or supplements to, or replacements or novations of, that document;

(e) a reference to a natural person includes any company, partnership, joint venture, association, corporation or other body corporate and vice versa;
(f) a reference to a body (including an institute, association or authority), whether statutory or not:
i. that ceases to exist;

ii. the powers or function of which are transferred to another body; or

iii. is a reference to the body that replaces it or substantially succeeds to its powers or functions;

(g) other grammatical forms of a word or phrase defined in this Prospectus have a corresponding meaning; and

(h) a reference to a Section is a reference to a Section of this Prospectus.

The postal acceptance rule does not apply to the SPP and Applications.

Corporate Directory

Directors

Mr Stephen Gerlach (Chairman) Mr Malcolm Geoffrey Jackman (Chief Executive Officer and Managing Director) Mr Charles Ernest Bright Dr James Charles Fox Mr Raymond George Grigg Mr Ian Graham MacDonald Mr Anthoni Salim Mr Graham Douglas Walters Mr James Hutchison (Hutch) Ranck

Company Secretaries Mr Ross Edwin Mallett Ms Sonya Catherine Furey

Registered Office

Level 3 27 Currie Street Adelaide SA 5000

Website www.elders.com.au

Auditors

Ernst & Young Ernst & Young Building 121 King William Street Adelaide SA 5000

Independent Accountant

Ernst & Young Transaction Advisory Services Limited Ernst & Young Building 121 King William Street Adelaide SA 5000

Australian Legal Adviser

Freehills MLC Centre 19 Martin Place Sydney NSW 2000

Joint Lead Managers

Goldman Sachs JBWere Pty Ltd Governor Phillip Tower 1 Farrer Place Sydney NSW 2000

RBS Equity Capital Markets (Australia) Limited RBS Tower 88 Phillip Street Sydney NSW 2000

Share Registry

Computershare Investor Services Pty Limited Level 5 115 Grenfell Street Adelaide SA 5000

Tel (within Australia): 1300 022 710 Tel (outside Australia): +61 3 9938 4347

Elders Shareholder Information Line

Within Australia: 1300 022 710 (local call cost) Outside Australia: +61 3 9938 4347 Open between 8.30am and 5.00pm (Sydney time) Monday to Friday during the Offer Period

[Section]

==> picture [596 x 40] intentionally omitted <==

==> picture [144 x 281] intentionally omitted <==

AI assistant

ELDERS LIMITED — Capital/Financing Update 2009

64835_rns_2009-09-03_ee4eed21-f31b-418a-9500-072f76d4ba56.pdf

Prospectus

Important Information

Prospectus availability

Australia and New Zealand

Other jurisdictions

Future performance and forward-looking statements

Preparation of financial information

Enquiries

Disclaimer of representations

Privacy

Definitions and abbreviations

Photographs and diagrams

What should you do?

Letter from the Chairman

Dear Shareholder,

Summary of the Equity Raising and Key Dates

Key Equity Raising Statistics

Key Dates

Investment Highlights

Renewed company with a refocused strategy

A leading Australian rural services business

Unique business model with strategic and competitive advantages

Positioned at the intersection of the Australasian farm gate and global markets

Poised to benefit significantly from expected recovery in FY2010 and beyond

Attractive investment opportunity

Summary Risk Factors

Other risks

2.1 Purpose of the Equity Raising and use of proceeds

2.2 Issued capital

2.3 Underwriting of the Equity Raising

2.4 Share Purchase Plan

2.4.1 Overview of the Share Purchase Plan

2.4.2 Participation in the SPP

2.4.3 Participation by Eligible Shareholders

2.4.4 Scale back and oversubscription

2.4.5 Offer Price and investment size

2.4.6 Broker stamping fee

2.5 Conditional Placement

2.6 No offer under the SPP to holders of New Shares

2.7 Effect of the Equity Raising on a Shareholder’s percentage interest in Elders

2.8 No transfer of rights

2.9 Ranking of New Shares

2.10 Quotation and trading of New Shares

2.11 CHESS

2.12 Treatment of foreign Shareholders

2.13 Withdrawal of the Equity Raising

Actions Required of Eligible Shareholders

3.1 How to apply for New Shares under the SPP

OPTION 1 Pay via BPAY[®]

OPTION 2 Pay by cheque, bank draft or money order

Mailing address

Hand Delivery

3.3 Enquiries

3.2 What if I do nothing?

4.1 Company overview and background

4.2 Agenda for Change

4.2.1 Strategic rationale

4.2.2 Asset divestment program

4.3 Elders’ strategy

4.4 Business overview

4.4.1 Rural Services

4.4.1.1 overview

australian network operations

Network related operations

4.4.1.2 Recent developments and future direction

FERTILISER PRICES

GLYPHOSATE PRICES

SUPPORT CENTRE COSTS ($M) – QUARTERLY

NETWORK COSTS ($M) – QUARTERLY[1]

SG&A ($M)[2] – QUARTERLY[1, 2]

4.4.2 Forestry

4.4.2.1 overview

Forestry

Other

4.4.2.2 Recent developments and future direction

4.4.3 Futuris Automotive

4.4.3.1 overview

ELDERS LIMITED Capital/Financing Update 2009