broker report , page-4

Watford,

I reckon people in HC GTP/TIM discussions or involving in the Agri-MIS business have thought for a long time that the Government would certainly lose the test case. Or at least I have never heard anyone said anything otherwise.

This is probably because the other way would be too dire to the MIS business for people to think of. This is also probably because GTP/TIM/etc have always tried to convince people this way from the beginning.

Just read what they told us lately.

In the recent TIM's AGM on 21/2/2008, the CEO R Hance said,

"AT ISSUE IN THE TEST CASE WILL BE THE AUSTRALIAN TAXATION
OFFICE�S CONTENTION THAT FROM JULY 2008 NEW PARTICIPANTS IN
AGRIBUSINESS MIS SHOULD BE TAXED AS IF THEY WERE PART OF A
TRUST, RATHER THAN ACTIVE INVESTORS ENGAGED IN AGRICULTURAL
PRODUCTION.

"WE BELIEVE THERE IS A STRONG CASE THAT THE ATO�S INTERPRETATION WILL NOT BE CONFIRMED BY THE COURTS."

GTP's Chairman D Griffiths said a week later on 28/2/2008 in GTP's AGM,

"At issue in the test case will be the Australian Taxation Office�s contention that from July 2008 new participants in agribusiness should be taxed as if they were part of a trust, rather than active investors engaged in agricultural production.

"Industry as a whole has received advice that there is a strong case that the ATO�s interpretation will not be confirmed by the courts."

(These two said exactly the same almost word by word. LOL!)

Indeed the "tax ruling overturned" news appeared 2 weeks ago only in the AFR without mentioning any names of MIS companies like GTP/TIM and its linkage with the "test case". Few people would have noticed it. The lack of movement of GTP/TIM share prices since then may also indicate the unawareness.

It wouldn't be a surprise that the broker you quoted from The Australian sounds also unaware of the change, otherwise why didn't he mention that?

I suspect GTP/TIM will keep silent on this "tax ruling overturned" issue until being somehow forced one day.