The presentations, of work-in-progress on the major assignments, will occur during the tutorials in Weeks 8 and 9. The presentations are worth 5% of the total assignment. The presentations will be on the strategic and business analysis, accounting analysis and financial analysis. There are two principal purposes of the presentation. The first purpose is to enable students to obtain feedback, on their work to date, from the tutor and their fellow students. The second purpose is to discipline the students to work of the major assignment. Each presentation should last for 12 ? 15 minutes. All members of the group are required to contribute. After each presentation, there will be a short group discussion, to provide the presenters with feedback. It would be a practical impossibility to adequately cover all aspects of the aforementioned topics during the time allocated. Hence, each group should select up to four issues for which they would most like feedback. Students must select at least one issue from all three aforementioned stages of the analysis. Their presentation should focus on these issues. Students are welcome to use visual aids. My part is: Accounting Analysis, including the following: ? Identification of three critical success factors for the company ? Identification of three key accounting policies for the company ? Assessment of the windows for managerial discretionary afforded by Australian accounting standards with respect to the critical accounting policies ? Identification of potential incentives for opportunistic accounting policy choice. ? Evaluation of the accounting strategies followed regarding the key accounting policies, including comparison with an industry competitor ? Evaluation of the quality of the company?s disclosure quality ? Identification of any ?red flags?, if applicable. The company is Tandou Ltd ASX code : TAN ASX industry classification: food beverages and tobacco Princial Activities: production and marketing of cotton, cereal and lamb All information are relating Australian accounting and AASB. I need u guys help me doing the PPT and Presentations.

Running Head: ACCOUNTING ACCOUNTING NAME TITLE DATE ACCOUNTING 2 Tandou Limited is an Australian firm that deals with agricultural produce and business associated with the produce. The firm takes part in irrigation of cotton and cereal crops on a large scale. The company uses water assets for its related activities including pastoral in Australia. The success factors for growth of this company include a well organized group of managers and directors in each department. These managers exhibit great leadership skills that are agricultural and business oriented. All the way from farm management to sales of produce the management team has proven to be competitive in all their work. Managers at the production level have a task to ensure that produce are quality and in time while those at sales level ensure they face competitors in a very prepared manner. The management team are each dedicated and determined in their way hence their ability to put their all in their work. Another factor for the success of the organization is increasing corporate and interest of investors in the Australian agricultural sector. Both local and international investors have shown much interest especially with irrigated water farming hence creating great opportunities for the growth of the agribusiness industry. Tandou is well placed as one of the key players in water space hence the ability to adapt in such a dynamic sector. Tandou has a large chain of activities that it has engaged in. The company did not only focus on one sector rather they looked at agriculture, pastoral and business as a whole. Combining of this has resulted to reduction of earnings volatility (Friedlob, 2013). The fact that it uses irrigation has enabled it to remain stable regardless of the seasons and operating conditions. The company has been able to expand its business through merging and acquisition of new companies hence better placed in the Australian market. ACCOUNTING 3 Tandou's accounting policy is to provide fair value for buildings, land and other structural improvements. This policy aims at increasing the net gains for example through valuation gain of land. Any asset that has been acquired by the firm should be able to gain or add value after sometime. The asset should be utilized to ensure maximum production. The aim of this policy is to establish appropriate performance that is demanding for any remuneration of incentives. Tandou has a policy of setting employee and executive remuneration that is fair and competitive for the markets in which the organization operates. The aim of this policy is to position remunerations that are fixed in the third quartile of each year and compare it with other comparatives in the same field. This ensures that all the fields that the organization engages in are competitive enough without any being focused on too much. The diversification policy encourages broad investment by the firm. The policy sets out the commitment of the company to diversity and inclusion of the workers in the workplace and provides a framework so that the firm achieves its goals. The remuneration policy is aimed at linking rewards given to CEOs and other staff to shareholder value by providing equity incentives. This ensures long term performance of all the members within the organization (Robert, 2002). Equity participation and alignment with the relevant shareholders ensures achievement of both long and short term incentives. The Australian accounting standards under the ASX listing rules and corporations act sets out the information that organizations should provide to their investors and relevant shareholders. The company complies through its continuous disclosure policy through its yearly report and communication regarding market information and other relevant data. ACCOUNTING 4 The audit and corporate committee charter is required according to the Australian standards. This charter provides for the application of accounting policies, business policies and procedures, compliance with the correct applicable laws and monitoring of different risks. Public audits are a must for organizations within Australia as they encourage openness and sharing of information hence better progress. This is something that the Australian government has taken into consideration. Australian government is well known for its outreach mission in ensuring sustainable development environmentally. Most organizations are required to take up corporate social responsibility programs as part of them. Tandou recognizes its responsibility to manage their limited resources that is land and water in a responsible and sustainable manner. As such the whole Tandou company takes up the environmental management system that is based on ISO 14000 principles. Irrigation and other agricultural practices are done in a very sustainable manner. The ability of an organization to expatriate its corporate resources implies a positive response to agency problem. Cash flows depend on private shareholders to uphold and be given incentives. When the voting rights of the firm exceed cash flow rights, shareholders become the beneficiaries (Goodyear, 2012). Shareholders who control organizations also have the right to hide expatriation activities from other outsides by being able to manage the accounting numbers of the firms. The new concept of practice is one of the key strategies that the Australian Government has used to control and manage accounting activities. From the ancient times, the authority to control funds has been delegated by the shareholders who are the owners to the management who acts as ACCOUNTING 5 the agent. Subsequently, the agents were required to provide and report all relevant and financial statements to the owners. To further develop and establish the accounting practices, the main accounting bodies (AARF & ICAA) in Australia developed 14 accounting standards, which were to limit fraud and accounting malpractices witnessed in the older accounting methods. These guidelines were in place to ensure the invested capital by the shareholders is protected as well as the interests of the general public are also centered on the decisions made. This new practice ensured that companies prepared balance sheets to enable the government effectively monitor the behaviors of managers, being the leaders of the shareholders fund. Unless the statements to be made could prove not to provide a 'true and fair view' to the company and shareholders at large, the new practice guidelines are positive in ensuring accountability and proper management of the shareholders funds as well as ensuring the companies are operating at a profitable base (Kesha, 2012). To be a threat to other markets and organizations at the international level, there exists four prerequisites: maximum use of the existing resources, having domestic networks to exploit resources, being able to first meet home demand and having a supportive legislative structure (Fass, 2000). At a local level, to gain competitive advantage product marketers have strategies in place that will make their product stand out from the rest for example providing quality products. The organization also aims at making strategies that are put in place operational and not just written down for the sake. Cost and performance management as per the organization depends on the tools used for decision making. Being agriculturally centered with lots of competitors, who also deal in production of food, beverages, tobacco, production and marketing of cotton and lamb the company has proven to be competitive in all its ways (Bromwich, 2001). This is ACCOUNTING 6 considering the fact that despite a drop in market or produce of a certain food the company has never gotten into a major crisis. The numbers of companies that also do the same are many. The amount of information that Tanduo discloses is mostly for the benefit of the shareholders, investors and the general public. The reason for doing this is to attract investors to take part in their projects and the general public who are the buyers of their products. Reduced disclosure regime is an initiative by the Australian accounting standards board that allows organizations that are not accountable to the public to be exempted from such. Such organizations therefore prepare financial statements that do not have many details and are not as complex as that of the others. Tanduo however being a listed company is not one of these organizations hence is required to give a detailed and comprehensive financial report annually or quarterly. The quality of information disclosure for this organization can be considered to be high considering the details that they give. The report given yearly is always available to be viewed by the public, shareholders and investors who have such interests. Owing to the variant accounting procedures and practices involved, it's integral to use the right procedures factoring in ethics in ensuring accurate and up to date financial statements are provided. Shareholding also proves to be an effective way of increasing an organizations capital base and expansion strategy, hence shareholders fund needs to be maintained and accurately accounted for to ensure owners do not incur losses in the long run. Management accounting systems form the processes and systems used to ensure management accounting performs effectively and efficiently. The main objectives of management accounting involve strategic management, whereby the management accountant is viewed as the strategic partner in the entity. Management accounting also supports risk management as it contributes ACCOUNTING 7 towards identifying, measuring and managing the risks attached to the achievement of variant projects and objectives set by the organization. The company has been able to deal with risks associated with indulgence of more than one line of produce and has emerged successful (Benston, 1998). There is a red flag that has been raised over the number of competitors that are emerging in the agribusiness industry. Many companies and investors are coming up each single year to engage in produce of agricultural products and later their sale. This creates a stiff competition that if not taken into consideration could ruin the whole industry. What the organization needs to do is put in place strategies that ensure that its competitors do not come to surpass it. The capacity in which the organization handles its activities is not big enough to warrant a serious threat but this should sound some alarm. Australia being a developing market in the world should be an advantage for the organization. ACCOUNTING 8 List of Reference Benston, G. 1998. Approaches of Strategic Management, Strategic Management Journal Bromwich, M. 2001. Management Accounting, Evolution not Revolution, London, CIMA Fass, A. 2000. The Media Business. New York.New York Times. Friedlob, G. 2013. Understanding Accounting Regulations in Australia. London: The Routledge Companion Accounting History. Kesha, P. 2012. Limitations of Management Accounting systems, Journal of Accounting Goodyear, L. 2012. Principles of Accountancy. New York. Marshal Publishing Company Robert, M. 2002. Governance, Competition and Opportunistic Accounting Choices by Banks. North Carolina. Business School University of North Carolina-Chapel Hill For personal use only ABN 81 001 014 562 Financial Statements For the Year Ended 30 June 2012 Tandou Limited Annual Report For the Year Ended 30 June 2012 For personal use only Contents Chairman's Review Director's Review of Operations Director's Report Financial Report Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements Directors' Declaration Independent Auditor's Report to the Members Lead Auditor's Independence Declaration ASX Additional Information Page 2 3-6 7-22 24 25 26 27 28-76 77 78-79 80 81-82 1 Tandou Limited Chairman's Review For the Year Ended 30 June 2012 For personal use only Three years ago the Board set a strategy to build on our strengths in farming (agriculture, pastoral) and water taking advantage of our location in the Connected Murray. Our objective is to offer an investment opportunity that is best positioned to take advantage of irrigated farming and commodity prices with the added strength of a large water investment. This year has been a successful step in the evolution of the Company's strategy. Tandou's successful profit result of $7.5 million before tax demonstrates the Company's ability to generate consistent earnings and a strong return on investment from both its farming and water assets. The external strategic review we commissioned reaffirms the Tandou business model, emphasising the importance of combining ownership of water entitlements and cropping operations to reduce earnings volatility. Performance The Company has now achieved consistent and solid returns over several periods through various seasonal and operating conditions. Particularly pleasing for directors is that all operating divisions (cropping, pastoral and water) contributed profit to the Group result. While current lower cotton price levels and the subsequent reduction in projected earnings from cotton production may have an impact during 2012/13, higher grain prices and continued profitable returns from the water business are expected to offset this to some extent. Based on the Company's earnings diversity and the Board's confidence in the business fundamentals Tandou has developed a sustainable dividend policy aimed at providing a consistent return to its valued shareholders. This year we have declared a dividend for the first time in 9 years. Outlook Tandou has a recent track record of consistent earnings, proven management expertise and a strong balance sheet position. With the positive longer term outlook for soft commodities and the growth of water values the Board believes the Company is well placed to deliver earnings growth. Directors also continue to explore further opportunities through generic growth or acquisition to expand Tandou's business scale and market relevance, while delivering increasing and sustainable returns to shareholders. Increasing corporate and investor interest in Australian agriculture and irrigated water provides a platform of underlying support for the continued growth of the industry. \"New\" capital is redefining agribusiness as we currently know it creating opportunity for profitable growth. There is no doubt agriculture is an attractive long term investment option which is attracting strong interest from local and international investors. Tandou is well placed as a major player in the soft commodity and water space and has the framework and flexibility to adapt as the industry evolves. In Conclusion Directors acknowledge the contribution of our loyal and dedicated management and staff. Tandou's success over recent years has largely been a result of their efforts and this has positioned the Company to take advantage of the positive outlook for our farming and water businesses. The Board thanks all of our shareholders for your ongoing support and we look forward to seeing you at the Company's annual general meeting on 8 November 2012. Rob Woolley Chairman 26th September 2012 2 Tandou Limited Directors' Review of Operations For the Year Ended 30 June 2012 For personal use only Directors are pleased to report a profit before tax of $7.503 million for the twelve months to 30 June 2012, following the previous profit result of $6.000 million for the six months to 30 June 2011. Highlights for the 12 month period are: Water business segment earnings before interest & tax (EBIT) $6.412 million (6 months to 30 June 2011: $5.884 million). Increased water entitlement holdings by 22% to 38,827 megalitres (30 June 2011: 31,760 megalitres). Tandou Farm successfully harvested a record 6,650 hectare cotton crop during the year, increasing segment earnings (EBIT) to $3.928 million (6 months to 30 June 2011: $2.067 million). Tandou Farm recently planted 4,000 hectares of Durum wheat and has prepared for 6,500 hectares of cotton planting for 2013. Menindee Lakes received significant inflows following major flood events in Queensland and northern NSW, ensuring water availability for the 2013 and 2014 crops. Tandou Water As at 30 June 2012 Tandou held total water entitlement of 38,827 megalitres (30 June 2011: 31,760 megalitres) with a Directors' valuation of $38.517 million and representing approximately 27 cents per share. The book value of these assets as reported in the accounts is $24.053 million. The water business has now demonstrated continued profit growth over several financial years with a segment EBIT of $6.412 million during the year (6 months to 30 June 2011: $5.884 million). This excellent result has been achieved in a period of abundant water allocations at low prices and in a soft water entitlement market, demonstrating the strength of Tandou's intellectual property and expertise in this area. The Company has also continued to expand its strategic relationships with clients seeking the security of Tandou's diverse water portfolio. The Company continues to see value in water entitlements in the Connected Murray System. This value is reinforced by the restructure of supply following various government programs which will have a significant impact on the ownership and use of water entitlements within the basin. This is expected to result in agriculture having an increased reliance on allocation markets to meet irrigation requirements. The Murray Darling Basin Authority Basin Plan, in its present form, calls for a reduction in consumption of 2,750 GL annually. At the time of writing 1,522 GL had already been recovered and the Commonwealth has stated its objective to obtain some part of the remaining balance through a continuation of the buyback programs. The pro-forma report on page 20 of the Directors' Report includes the value of the Company's water entitlements at directors' valuation, based on independent valuation reports as at 30 June 2012. These valuations reflect the current market value of water entitlements which continue to be reported \"at cost\" in the accounts in accordance with Australian accounting standards. 3 Tandou Limited Directors' Review of Operations For the Year Ended 30 June 2012 Tandou Farm For personal use only Tandou Farm successfully completed the 6,650 hectare cotton crop harvest during June, with an anticipated average yield of 9.8 bales per hectare from the 5,800 hectares of Upland variety. Following a disappointing result from the Pima cotton the Company is unlikely to plant any area to this variety in the coming season. Tandou Farm segment EBIT for the year ended 30 June 2012 increased to $3.928 million (6 months to 30 June 2011: $2.067 million). This result includes a current market price of A$375 per bale for the approximately 15,000 bales remaining unsold at balance date. During the year Tandou Farm completed the winter cereal harvest of its 2,400 hectare Durum wheat and malting Barley crops, with production totalling almost 11,300 tonnes at an average of 4.7 tonnes per hectare. Following the rise in wheat prices the Company has recently completed increased plantings of more than 4,000 hectares of Durum wheat and has forward sold 75% of this production on a \"fixed area\" contract at an average price of $335 per tonne (delivered Adelaide). The outlook for water allocation pricing for the coming season remains favourable for irrigated cropping and Tandou is well advanced in its preparations for a 6,500 hectare 2013 cotton crop. The Company has secured forward price cotton sales for approximately one third of the 2013 crop (20,000 bales) at an average price A$534 per bale. After the year end the Company has recently entered into a 3 x 3 year leasing agreement with the owners of \"Pevensey\" near Hay, NSW, to operate the 1,600 hectare development area known as \"Pevensey Irrigation\". This leasing opportunity will enable Tandou to further increase the scale of its farming operations and management team, and importantly, provide geographic and river system diversity to the Company's current irrigated cotton and cereal production. Tandou Pastoral Tandou Pastoral has continued the expansion of its Dorper sheep and organic lamb production business with the purchase of the neighbouring property, \"Willotia Station\For personal use only ABN 81 001 014 562 Financial Statements For the Year Ended 30 June 2013 Tandou Limited Chairman's Review For the Year Ended 30 June 2013 Tandou has continued to successfully leverage its management and operational expertise in farming and water investment to take full advantage of its strategic holding in irrigated cropping and water assets. For personal use only This year has been another positive step in the Company's strategy of building diversified income streams and reduced earnings volatility. 15% earnings growth with a profit before tax result of $8.6 million, further demonstrating the Company's ability to generate consistent earnings from both its farming and water assets. Continued expansion of the cropping operations with the acquisition of Riverina irrigated property \"Glenmea\". Performance The Company has now achieved year on year earnings growth. Importantly, this growth has been achieved over a period in which the Company has experienced significantly varying seasonal and market conditions. Excellent operating results were achieved at Tandou Farm with record yields for both cotton and cereal crops. The Company's water business continued to expand with more than 25,000 megalitres of water entitlements traded during the period, and segment earnings of $7.3 million. Based on the solid returns of 2013 and the Board's confidence in the business model to continue generating positive returns the Company has again declared a dividend return to shareholders of 1 cent per share. Outlook Over recent years Tandou has firmly established itself as an industry leading agribusiness and water investment company with proven management expertise and a strong balance sheet position. The long term outlook for soft commodities and water values remains to be positive and the Board is continuing to explore opportunities through further development or acquisition to expand the Company's operational scale, while delivering sustainable returns to shareholders. Australian agricultural and water assets continue to attract growing interest from local and international investors and relative to the rest of the world present a compelling long term investment option. Tandou is uniquely placed to provide this sector with the option and flexibility of owning significant portfolios of both land and water assets, combined with the corporate governance and reporting frameworks established over more than 25 years as a listed entity. The Company places significant importance on developing and improving environmentally sustainable farming practices with an internal environmental management system and continuing compliance with independently certified industry practices. In Conclusion Directors acknowledge the contribution of our loyal and dedicated management and staff. Tandou's continued success has largely been a result of their efforts and this has positioned the Company to take advantage of the positive outlook for our farming and water businesses. The Board thanks all of our shareholders for your ongoing support and we look forward to seeing you at the Company's annual general meeting on 31 October 2013. Rob Woolley Chairman 20 September 2013 1 Tandou Limited Operating and Financial Review For the Year Ended 30 June 2013 Directors are pleased to report a 15% increase in earnings with a profit before tax of $8.609 million for the year ended 30 June 2013, following the previous profit before tax of $7.503 million for 30 June 2012. For personal use only Highlights for the financial period included: 16% increase in profit after tax (NPAT) to $6.020 million (30 June 2012 $5.171 million). 14% earnings growth in the water business with segment adjusted earnings before interest & tax (EBIT)1 $7.297 million (30 June 2012: $6.412 million). 6% earnings growth in the farming operations increasing segment earnings (EBIT) to $4.182 million (30 June 2012: $3.928 million). Farming operations successfully harvested a record 7,105 hectares of cotton with production of approximately 72,000 bales and a total winter cereal harvest of 29,500 tonnes. Expansion of the Riverina (Hay) operations with the acquisition of \"Glenmea\" irrigation property. Water Business The water business has over the past three years demonstrated continued profit growth. This year the business achieved a 14% increase in segment EBIT to $7.297 million (30 June 2012: $6.412 million). As at 30 June 2013 the Company held total water entitlements of 33,859 megalitres (30 June 2012: 38,827 megalitres) at Directors' valuation of $31.538 million. The book value of these assets as reported in the accounts is $19.492 million. The Non IFRS pro-forma report on page 18 of the attaching accounts includes the value of the Company's water entitlements at Directors' valuation, based on independent valuation reports as at 30 June 2013. These valuations reflect the current market value of water entitlements. The entitlements are reported at cost in the Consolidated Statement of Financial Position in accordance with Australian Accounting Standards. At balance date the entitlement holding was lower than the previous year because of a large sale of more than 7,000 megalitres during May/June 2013. This water is currently being replaced by accumulating entitlements. We expect that the Company will reach full investment of approximately 55,000 megalitres by 31 December 2013. At full investment the Company will hold one of the largest, most diverse, actively managed water portfolios in the southern connected Murray Darling Basin. Farming - Cropping \"Tandou Farm\" successfully completed the 6,670 hectare cotton crop harvest during May 2013, at the date of this report the average yield is expected to be 10.2 bales per hectare (2012 crop: 9.8 bales per hectare). The Company's first crop of 435 hectares at \"Pevensey Irrigation\For personal use only Tandou Limited (\"TAN\") Financial Year ending 30 June 2013 - Results Presentation 26th August 2013 For personal use only Disclaimer This presentation contains general information about Tandou Limited and its consolidated entities (Tandou) and its activities current as at the date of this presentation. It is provided in summary and does not purport to be complete. This presentation should be read in conjunction with the Appendix 4E and Financial Report for the year ended 30 June 2013. You acknowledge and agree that you will rely on your own independent assessment of any information, statements or representations contained in this presentation and such reliance will be entirely at your own risk. Disclaimer Tandou Limited and its related corporate bodies and associated entities and each of their respective officers, employees, associates, agents, auditors, independent contractors and advisors do not make any representation, guarantee or warranty, express or implied, as to the accuracy, completeness, currency or reliability (including as to auditing or independent verification) of any information contained in this presentation and do not accept, to the maximum extent permitted by law: a)Any responsibility arising in any way for any errors in or omissions from any information or for any lack of accuracy, completeness, currency or reliability of any such information made available; b)Any responsibility to provide any other information or notification of matters arising or coming to their notice which may affect any information provided; and c)Any liability for any loss or damage (whether under statute, in contract or tort for negligence or otherwise) suffered or incurred by any person as a result of or in connection with a person or persons using, disclosing, acting on or placing reliance on any information contained in this presentation, whether the loss or damage arises in connection with any negligence, default or lack of care or from any misrepresentation or any other cause. Forward- looking statements This presentation may contain forward-looking statements. All statements other than statement of historical facts included in this presentation are forward-looking statements. Forward-looking statements may include, without limitation, statements relating to Tandou's financial position and performance, business strategy, plans and objectives of management for future operations. Forward-looking statements involve known and unknown risks, uncertainties and other factors (many of which are beyond Tandou's control) and which may cause actual results to differ materially from those expressed in the statement contained in this presentation. Some of the important factors that could cause Tandou's actual results, performance or achievements to differ materially from those in any forward- looking statements include (among other things): level of demand and market prices, climatic conditions, the impact of foreign exchange rates on market prices and operating costs, political uncertainty and general economic conditions in Australia and overseas, the ability to produce, process and transport goods and livestock profitability, the actions of competitors and activities by governmental authorities. No representation, guarantee, or warranty (express or implied is given as to the accuracy, completeness, likelihood of achievement or reasonableness of any forecasts, projections or forward-looking statements contained in this presentation. Except as required by applicable regulations or by law, Tandou does not undertake any obligation to publicly update or review any forward looking statements, whether as a result of new information or future events. This presentation should not be relied upon as a recommendation or forecast by Tandou. No offer of securities Nothing in this presentation should be constructed as either an offer to sell or solicitation of an offer to buy or sell Tandou securities in any jurisdiction 1 For personal use only Financial Year 2013 Highlights PBT - 15% increase in profit before tax of $8.609 million (2012:$7.503 million) NPAT - 16% increase in NPAT to $6,020 million (2012: $5.171 million) Water Division - 14% earnings growth in the water business with segment earnings before interest & tax (EBIT) $7.297 million (2012: $6.412 million). Farming Division - 6% earnings growth in the farming operations increasing segment earnings (EBIT) to $4.182 million (2012: $3.928 million). Volume Growth - Farming operations successfully harvested a record 7,105 hectares of cotton with production of approximately 72,000 bales (2012: 59,336 bales) and a total winter cereal harvest of 29,500 tonnes. (2012: 11,327 tonnes) Acquisition - Expansion of Riverina cropping operations with the acquisition of \"Glenmea\" irrigation property. 2014 Crop Outlook - Water availability for full production for the 2014 season, both in the Menindee Lakes system and Murrumbidgee Valley. For personal use only Income Statement ($m) 2012 2013 Variance Revenue $49.1 $65.7 +34% EBITDA $10.2 $11.7 +14% Depreciation & Amortisation $1.8 $2.1 EBIT $8.5 $9.5 Interest $1.0 $0.9 Profit Before Tax $7.5 $8.6 Tax $2.3 $2.6 Net Profit After Tax $5.2 $6.0 Earnings per Share (cents) 3.6 4.2 Dividend per Share (cents) 1.0 1.0 +12% +15% +16% For personal use only Balance Sheet ($m) 2012 2013 Cash 0.9 1.9 Current Assets - excl Cash 57.2 72.2 Non-Current Assets 36.4 43.2 Total Assets 94.5 118.2 8.3 12.8 10.4 23.9 - 1.2 8.8 37.8 75.7 80.2 Current Liabilities - excl Borrowings Borrowings Non-Current Liabilities -excl Borrowings Total Liabilities Total Equity Net Debt & Gearing Net Debt $22.1 million Gearing (Net Debt/Equity) 27.6% Assets Significant water sales receivable collected in July. Record cotton crop unginned in inventory ($36 million - see Accounts Note 4) Liabilities Record wheat harvest proceeds partly received in advance and record cotton crop harvest accruals. Seasonal Loan borrowings utilised Investment in Growth, Scale & Productivity Acquired Riverina property 'Glenmea' Net Debt Gearing 9.8 22.1 12.9% 27.6% Ginning press upgrades For personal use only Balance Sheet - Directors Valuations ($m) PP&E 30 June Water uplift uplift @ 2013 @ @ Directors Directors Directors 30 June 2013 Valuation Valuation Valuation Current assets 74.2 1.3 - 75.5 Non current assets 43.9 10.7 7.8 62.4 Total Assets 118.0 12.0 7.8 137.9 Current liabilities 26.6 - - 26.6 Non current liabilities 11.2 - - 11.2 Total Liabilities 37.8 - - 37.8 Net Assets 80.2 12.0 7.8 100.0 Shares on issue 143.1M 143.1M NTA per share 6 $0.56 $0.70 The Group's assets at Directors' valuation after taking into consideration Independent valuations performed 1/ Water Uplift - 19,050ML of Lower Darling General Security Entitlements Book Value $134/ML Independent valuation $750/ML 2/ PP&E Uplift - Land & Irrigation improvements and Buildings (incl Gin) valuation increased For personal use only Cash Flow ($ m) 2012 2013 60.7 71.1 (61.3) (69.4) Interest received & paid Operating Cash Flows (0.9) (1.4) (0.9) 0.8 Payments for PP&E Proceeds from sale (4.9) 0.1 (11.6) 0.1 Other Acquisitions - (0.1) Investing Cash Flows (4.9) (11.6) Proceeds from borrowings 61.0 26.5 Repayments of borrowings (52.5) (13.0) 0 (1.4) Payments for capital raising (0.3) 0 Repayment of finance leases (0.5) (0.3) Financing Cash Flows 7.7 11.8 Net Cash Movement 1.4 1.0 Receipts Payments Dividends paid 7 Operating cash flow improves by $2.2 million Investing cash flow - PP&E payment Glenmea $7.0 million New Gin Press $1.8 million Operational Capex $2.8 million For personal use only Segment Summary ($m) 2012 2013 Variance 37.5 48.2 3.9 4.2 28.4 37.5 Water Operations Contribution 6.4 7.3 Corporate Office Overheads 1.9 2.0 EBIT 8.5 9.5 Farming Revenue Farming Contribution Water Operations Revenue +6% +14% +12% *Revenue represents the value of all crops and livestock produced during the period. 8 Cropping Record crops harvested cereal cotton Water Significant, profitable trading of water entitlements For personal use only Water Segment ($m) 2012 2013 22.9 30.0 Water Entitlements Contribution 2.3 2.8 Water Allocations Revenue External 1.6 1.7 Water Allocations Contribution External 1.3 1.1 Fixed expenses 0.3 0.3 Water Operations Contribution External 3.3 3.5 Water Allocations Revenue Internal 4.0 5.9 Water Allocations Contribution Internal 3.1 3.8 Total Water Operations contribution 6.4 7.3 38.5 31.5 Water Entitlements on hand 38,827ML 33,859ML Entitlements sold 17,110ML 25,267ML Entitlements purchased 9 21,220ML 20,300ML Water Entitlements Revenue Water Entitlements Value Sale of $17 million to agricultural investors. Farming segment increased purchase quantity of allocation water. 14% segment EBIT increase. Growth in portfolio Diversification in portfolio 32.4 ML '000 For personal use only Water - Investment in Entitlements 10 For personal use only Water- Entitlement Pricing For personal use only Farming Segment ($m) 2012 2013 32.2 38.0 Cotton Contribution 7.1 9.2 Cereal Revenue 3.8 9.1 Cereal Contribution 1.0 1.9 Pastoral Revenue 1.4 1.1 21,000 lambs produced and 13,000 sheep sold. Pastoral Contribution 0.7 0.2 Livestock sale prices and valuations fell during year. Fixed expenses 4.9 7.1 Farming contribution 3.9 4.2 Cotton Revenue Record 7,105ha cotton crop harvested with approximately 72,000 bales produced. Record 29,500 tonnes of cereal harvested 6% segment EBIT increase. *Revenue represents the value of all crops and livestock produced during the period. 12 For personal use only Cropping Year ended 30 June 2012 2013 Variance Cotton Volume (tonnes) 13,469 16,344 +21% Cotton Volume (bales) 59,336 72,000 +21% Cotton Area 6,660 7,105 +7% Cotton Yield (tonnes/ha) 2.02 2.30 +14% Cotton Yield (bales/ha) 8.91 10.13 +14% Wheat Volume (tonnes) 11,327 29,300 +159% Wheat Area (ha) 2,407 4,120 +71% 4.7 7.1 +51% Wheat Yield (tonnes/ha) 13 For personal use only Cotton - Pricing Cotton pricing is currently at a 12 month high. 14 For personal use only Strategic Focus Geography - Located in the Murray Darling Basin, the Company's experienced and knowledgeable team is well placed to take full advantage of its strategic holding in irrigated cropping and water assets. Productivity - Tandou is striving to achieve full and efficient production on its current properties, particularly those properties that have been acquired more recently, in order to drive increased returns. Apply Experience - The Company will use its farming and water knowledge when assessing future opportunities to invest in strategic assets, particularly in the Riverina area, that complement existing operations. Growth - Tandou is also planning to grow its portfolio of water assets with the aim of generating above average returns from both the use of and trading of water entitlements and allocations. Profit History For personal use only (Net Profit After Tax) Notes: Source: Published Financial Reports 2010 include $4.7 million income tax benefit 2011 was a 6 month Financial Year period 16 Flexibility of Tandou Model For personal use only Farming and Water EBIT (pre Corporate Costs) 17 Notes: Adjusted EBIT taken from Segment Note disclosure in published Financial Reports 2009 and 2010 - 12 months , 31 Dec Y/E 2011 - 6 months 2012 and 2013 - 12 months ,30 June Y/E For personal use only Outlook - Water Water Entitlements Reduced buy-back activity is anticipated as government funding is re-directed to on-farm irrigation efficiencies The reduction in the availability of entitlements and current strength of the allocation market is expected to continue to underpin entitlement values. History successfully leveraged its expertise in the emerging water entitlement markets optimize trading opportunities generate consistent and substantial earnings. Future These returns are difficult to forecast and whilst the Company is constantly alert to the market, shareholders should be aware of the opportunistic nature of these transactions that can significantly impact future earnings. For personal use only Outlook - Cropping Water - Water availability for full cropping for the 2014 season in Menindee Lakes and Murrumbidgee Valley. Growth - Cotton - With the addition of the \"Glenmea\" property, the Company's total cotton area is projected to increase by almost 25% to 8,800 hectares. Growth - Cereals - Winter cereal planting has now been completed with combined area increasing by 20% to 5,000 hectares. Cotton Sales - Forward sold approximately 60% of the 2014 crop at an average price of $465 per bale (2013 crop: $455 per bale). Cotton Price - Current - Cotton price has continued to improve and is currently at or around $500 per bale. Wheat Sales - Approximately 75% (3,750 ha) of the 2013 Durum wheat crop has been sold on a \"fixed area\" contract basis at a price of $310 per tonne delivered. For personal use only Outlook - Pastoral Numbers - Despite the dry seasonal conditions during the 2012/13 summer, stock numbers were comfortably maintained at full carrying levels (approximately 18,000 Dorper breeding ewes). Quality - Management has continued to develop the genetic quality of breeding stock. Prices - Outlook for stronger lamb prices are expected to provide improved trading and earnings growth for the pastoral operations during 2013/14. For personal use only Future Opportunities Water Continue to look for opportunities to realise value as we build the portfolio. Development of new water products. Impact of average seasons and full environmental buyback on capital value. Cropping Increase group cotton area by 20% in 2014. Continue to optimise & increase Lake Tandou cotton area. Take new area (Riverina) to full cotton production. Exploring options to expand irrigation area at Glenmea. Yield increases driven by seed management technology. Productivity Continue to improve ginning operations, driving down ginning costs. More bales with same overhead structure. 21 For personal use only Tandou - Overview Water -- Owns one of the largest, most diverse, actively managed water portfolios in the southern connected Murray Darling Basin Cropping - Owns significant cropping assets with history of producing high quality crops (cotton and cereal) One of the largest cotton producers in Australia Diversified income streams Water entitlement trading and water allocation sales Cotton and grain production Organic lamb production Profit History - Proven consistent profitability and reduced earnings volatility Not correlated to ASX200 - TAN shares out performed ASX200 Index over last 5 years by 200% Location - Corporate office in Mildura in the heart of the Murray Darling Basin and the operating business Robust -Strong balance sheet People - Experienced management team and workforce 22 For personal use only Tandou - Listed investment vehicle of choice for water investment and cropping in Australia. - Maximising yield from water investment and cropping assets. Well positioned in the water investment sector A large portfolio of entitlements and a number of years of profitable returns from the water business. Active management of portfolio delivering incremental returns to cropping assets. Successful cropping of cotton and wheat. Provides the option of profitable cropping when returns from selling water allocations become less than those available from soft commodity production Growth in cotton and wheat production Exposure to both water assets and soft commodities 23 23 For personal use only Contact Guy Kingwill CEO/Managing Director P: +61 3 50186500 F: +61 3 50186599 gkingwill@tandou.com.au 24 Andrew Angus Investor Relations P: +61 402 823 757 andrewangus@overlandadvisers.com.au For personal use only Appendix 25 For personal use only Location map Menindee, NSW blank blank Hay, NSW (Pevensey & Glenmea) 26 Mildura, Vic. (head office) For personal use only Board Rob Woolley Guy Kingwill Anthony Abraham David Boyd Independent Chairman CEO & Managing Director Independent NonExecutive Director Independent NonExecutive Director Current Chairman of Tasmanian Forests & Forest Ind. Council and Tasmanian Pure Foods Ltd Appointed CEO of Tandou in March 2006, after commencing with the Company as CFO in June 2005 Played an integral role in Macquarie Group's expansion into Australian agriculture as the CEO and Executive Director of Macquarie Agriculture Funds Management Formerly Managing Director of Webster's Ltd Over 20 years corporate finance experience as a partner of Deloitte 27 Extensive management experience through senior executive roles in Australia & with Bayer in the United States Remains involved with MAFM as a NonExecutive Director on a number of companies within that business David has spent more than 50 years in the Australian agricultural industry and is a former Chairman and CEO of Clyde Agriculture Has served on the Boards of Cotton Australia, the Australian Wool Exchange, Wool International, and Australian Wool Innovation Limited Tandou has an experienced Board and Management Team with proven water and agricultural capabilities, strong corporate governance and soft commodity production expertise For personal use only Management Team Guy Kingwill - CEO & Managing Director Joined Tandou as CFO in 2005 and appointed CEO in 2006 Extensive management experience through senior executive roles in Australia & with Bayer in the United States Pat Sullivan - Cropping Manager Joined Tandou in 1991 and Farm Manager since 2003 Extensive experience in agricultural management -livestock production and irrigation management Bernie Woollard - Company Secretary Management Accountant and Company Secretary since 2001 Over 15 years experience in accounting and finance primarily within the agribusiness sector Robert Lowe - Tandou Farm Manager Started with Tandou in 1992 19 years experience in managing large, high yielding irrigated crops, using targeted inputs, latest technologies and production techniques Brendan Barry - Water Manager Joined Tandou in 2001 as farm agronomist - experienced cereal and oilseed cropping Developed significant trading expertise in the water entitlement and allocation markets since Paul Martin - Pastoral Manager 15 years pastoral industry experience and qualified Merino wool classer Moved to Dorper sheep in 2002 as livestock Manager with one of Australia's leading organic lamb producers before joining Tandou Tandou's Management Team has significant experience in the Australian agricultural sector 28 For personal use only Business Overview Tandou Limited Water Operations Investment in Entitlements Current target 52 GL Hold for the long term Farming Cropping - Tandou Farm 7,000 ha cotton 4,000 ha cereal Cropping - Hay Seek medium term leases 1,800 ha Cotton/ Corn Opportunistic value realisation 900 ha Cereal Yield from Annual Allocations Pastoral 187,000 ha External sales 29 29 18,000 Dorper ewes Transfer to Cropping Operations 300 cattle For personal use only Water Rationale Model Tandou sells water when economic outlook for water sales outperforms cropping Tandou trades entitlements generating maximum return from portfolio. Scarce Resource & Restricted Supply - Water is an increasingly scarce resource no new licenses likely to be issued, without new dams projected environmental demand will hold 25-30% of Murray Darling Basin (MDB) water entitlements by 2019 Australia is one of the only jurisdictions globally to invest in water entitlements Demand - Increasing global food demand will increase demand for high value, reliable (i.e. irrigated) food production Developing Market - Australian water market is immature and inefficient growing in liquidity, functionality and connectedness increasingly presents opportunities supports Tandou's actively managed philosophy 30 For personal use only Water Rationale Integration & Experience -Tandou has significant water trading experience benefits from in-house knowledge and consumption can be leveraged across both water sales and purchasing Scale & Diversity - Tandou has a significant, diverse, actively managed portfolio of water entitlements in the southern connected MDB largest single basin diversity of demand 31 Tandou's Water World For personal use only (Southern Connected MDB) 32 For personal use only Water Title A Water Entitlement is a perpetual right to a share of water from a specified water resource. They are exclusive, separate from land title and legally enforceable. Water Entitlements can be bought, sold and leased. A Water Allocation is a function of owning a water entitlement, a volume of water is allocated to the water entitlement holder each year. This water allocation is available for consumptive use, or sale to other water users in the market. Transferable Divisible Fungible Valued at market 33 For personal use only Cropping Rationale Tandou Farm Model - Tandou plants crops when returns from cropping outperforms selling water allocations Water - Access to significant water storages - Menindee Lakes under gravity fed irrigation low cost irrigation ability to plan up to three years in advance for cropping when lakes are full Location - Located in a dry climatic zone allowing the production of high quality cotton Disease Mitigation - No close neighbours reduces disease risk Yield- Potential to improve yield with new seed and management technology Integrated - On-site cotton gin enables tight ginning quality control to maximise production minimises freight costs Efficient - Consistent soil type and large field sizes allows efficient management Experience - Team has significant large scale irrigated production experience Scale - One of Australia's largest cotton producers 34 For personal use only Cropping Cotton and Wheat Tandou Farm 35 For personal use only Tandou Farm BMP For personal use only Tandou Farm Ginning Annual Output 70,000 cotton bales 20,000 tonnes of cotton seed Daily capacity of up to 500 bales Operates 24 hours/day, 140 days/year A combination Saw and Roller gin processing both Upland and Pima cotton Cotton myBMP certified gin Reputation of high quality ginning 37 For personal use only Cropping Rationale Hay Operations Water - Southern connected basin - Murrumbidgee River access. Large pool of water (2,000 GL of GS) \"Supplementary\" water available most years (190 GL) Snow fed supply, substantial storage (2,600 GL) Location - Area has potential for further expansion and development. Southern cotton expansion has been assisted by development of new cotton varieties Disease Mitigation - No immediate neighbours reduces disease risk. Integrated - Using knowledge base and operational experience from Tandou Farm. Efficient - Consistent soil type and field layout, (good run lengths with good slope allowing optimal irrigation) Experience - Building a new team through integration with experienced Tandou Farm staff. 38 Model - Tandou plants crops when returns from cropping outperforms selling water allocations. Scale - Current cotton area 1,800ha's with potential to develop a further 1,800ha's (total 3,600ha's) For personal use only Cropping Cotton and Wheat Hay Operations 39 21/07/13 21/03/13 21/11/12 21/07/12 21/03/12 21/11/11 21/07/11 21/03/11 21/11/10 21/07/10 21/03/10 21/11/09 21/07/09 21/03/09 21/11/08 21/07/08 21/03/08 1.2000 21/11/07 21/07/07 21/03/07 21/11/06 21/07/06 21/03/06 21/11/05 21/07/05 21/03/05 21/11/04 21/07/04 21/03/04 21/11/03 21/07/03 Spot AUD For personal use only Spot A$ 10 Yr Spot AUD 1.1000 1.0000 0.9000 0.8000 0.7000 0.6000 For personal use only Cotton - Market US is largest cotton exporter. US cotton acreage down due to lower prices last year and shift to corn/soybeans. Exacerbated by drought conditions in Texas the largest US cotton state. Above average rainfall in the South East has also limited crop development. August 2013 - USDA cut US crop by 3.3% due to less than favourable growing conditions. - 13.05 Million Bales (17.50 Million Bales last year) - US Carryover 2.80 million bales (3.80 Million bales last year) US Cotton area 4 million HA (30% less than 10 years ago) 41 For personal use only Pastoral A leading producer of prime organic lamb in Western NSW Production of 20,000 prime organic Dorper lambs for market Why Dorpers? a. Highly fertile and productive b. Easy care with no shearing and crutching c. No chemical inputs required d. Thrive in low rain fall environment 42 For personal use only Tandou 5 Year Share Price For personal use only Tandou 5 Year Share Performance Benchmark ASX 200 For personal use only Contact Guy Kingwill CEO/Managing Director P: +61 3 50186500 F: +61 3 50186599 gkingwill@tandou.com.au Andrew Angus Investor Relations P: +61 402 823 757 andrewangus@overlandadvisers.com.au For personal use only ABN 81 001 014 562 Financial Statements For the Year Ended 30 June 2014 Tandou Limited Chairman's Review For the Year Ended 30 June 2014 Tandou has demonstrated the value of its strategic holding in irrigated cropping and water entitlements with continued year on year valuation gains in both asset classes. For personal use only This year has been another positive step in establishing diversified income streams and growing the Company's asset base. 148% increase in water entitlement holdings (at valuation). 21% increase in irrigated cropping area with acquisition of Riverina irrigated property \"Bundygoola\". 76% increase in consolidated investment base of income producing assets (at valuation). Performance Continued positive operating earnings from both water and cropping businesses despite difficult growing season. The Company's water business continued to deliver strong results with segment earnings of $3.9 million in addition to unrealised valuation gains during the period of $8.7 million before tax. Based on the Board's confidence in the business model to continue generating positive returns the Company has again declared an interim dividend return to shareholders of 1 cent per share. Outlook Tandou's proven management expertise and established position as an industry leader in water investment has continued to attract interest from both local and international investment sectors. The Company places significant importance on developing and improving environmentally sustainable farming practices with an internal environmental management system and continuing compliance with independently certified industry practices. The long term outlook for water values and cropping assets continues to be positive. The Board continues to reflect on the Company's discounted share price and has determined to explore structural and other capital management strategies to deliver increased shareholder value. Asset Value per share NTA Backing Net tangible asset backing per share (NTA includes water entitlements at cost). Net Asset Value (using Directors' valuation) Net asset value per share based on directors' valuation of assets (including all water entitlements at market value). 2014 $ 0.59 2013 $ 0.57 0.64 0.66 At the date of this report Tandou's share price was trading at a 32% discount to the Company's Net Asset Value per share using Directors' valuation. In Conclusion Directors acknowledge the contribution of our loyal and dedicated management and staff. Tandou's success has largely been a result of their efforts and this has positioned the Company to take advantage of the positive outlook for our water and cropping businesses. The Board thanks all of our shareholders for your ongoing support and we look forward to seeing you at the Company's annual general meeting on 28 October 2014. Rob Woolley Chairman 18 September 2014 1 Tandou Limited Operating and Financial Review For the Year Ended 30 June 2014 For personal use only Directors report a total comprehensive income of $8.7 million ($6.0 million 30 June 2013) and a profit after tax of $0.2 million for the year ended 30 June 2014 ($6.0 million for 30 June 2013). Normalised net profit after tax is $1.1 million excluding the effect of start-up and finance costs relating to the Bundygoola acquisition ($0.7 million after tax) and impairment loss adjustments during the period ($0.2 million after tax). Highlights for the financial period included: Water entitlement holdings increased by 148% from $31.5 million to $78.0 million at independent valuation, including year on year valuation uplift of $8.7 million. Land and property improvements valuation gains brought to account of $8.5 million (net of tax and excluding water entitlements). The total value of farming land, improvements and related assets is now $64.8 million. Expansion of the Riverina (Hay) operations with the acquisition of \"Bundygoola\" irrigation property and water entitlements during January 2014. The Company's land holdings, including the Pevensey Irrigation lease, now total approximately 141,000 hectares, comprising 19,500 hectares developed for row crop irrigation in addition to approximately 121,500 hectares of pastoral land. Investment base of income producing assets increased 76% from $81.2 million to $142.8 million (at market value) while maintaining core debt levels at $12.1 million (8.5% of income producing asset values).1 Continued positive earnings from both the Water Business and Farming operations, despite cotton yields well below expectations. Successful completion of the Entitlement Offer during May 2014 raising $23.8 million net of costs. Water Business The water business reported a segment EBIT2 of $3.9 million (30 June 2013: $7.3 million). As at 30 June 2014 the Company held total water entitlements of 80,935 megalitres (30 June 2013: 33,859 megalitres) at Directors' valuation of $78.0 million, representing approximately 40 cents per share. The book value of these assets as reported in the accounts is $57.2 million. Water entitlement markets have continued to improve since balance date. The pro-forma report on page 10 of the Preliminary Final Report includes the value of the Company's water entitlements at Directors' valuation, based on independent valuation reports as at 30 June 2014. The entitlements are reported at cost in the Balance Sheet in accordance with Australian Accounting Standards. Having increased water entitlements to current levels the Company now holds one of the largest, most diverse, actively managed water portfolios in the southern connected Murray Darling Basin. Farming - Cropping Tandou's cropping operations including Tandou Farm and the expanding Hay Operations completed the 8,700 hectare cotton crop harvest during June 2014, with average yields of approximately 7.5 bales per hectare (2013 crop: 10.2 bales per hectare). Hay operations are of a scale that enables an established local management structure, we now have key management and agronomy staff in place. The Company will also benefit by utilising existing and new resources across both cropping operations. As reported the disappointing cotton yields were a result of fluctuating weather conditions at critical stages of the crop cycle. The impact of prolonged extreme heat in summer was exacerbated by cold conditions and rain events during the final growing period in late March 1 Income producing assets comprise property, plant & equipment ($64.8M) and water entitlements ($78.0M) at valuation. Core debt represents borrowings ($41.1M) less 2014 cotton & 2013 cereal inventory on hand and 2015 cotton crop investment ($29.0M). 2 EBIT represents adjusted earnings before interest and tax and unallocated corporate expenses, is reconciled to profit after tax in Note 4 and has been subject to audit. 2 Tandou Limited Operating and Financial Review For the Year Ended 30 June 2014 and early April. We note that the same climatic events have adversely impacted many cotton growers and other agricultural crops in the southern region. For personal use only Cotton quality across both operations has again been excellent relative to the broader industry and we have not experienced the colour and fibre quality discounts which have occurred in other growing regions. The Company continues to lead the way for cotton quality and is regarded by the merchants as one of Australia's leading producers of high quality cotton fibre. Cropping operations included the harvest of 4,960 hectares of durum wheat at average yields of 5.8 tonnes per hectare (approximately 28,500 tonnes). Farming segment EBIT for the year ended 30 June 2014 was $0.5 million (30 June 2013: $4.2 million). The Company has forward sold approximately 50% of the 2015 cotton crop at an average price of $495 per bale (2014 crop average: $475 per bale). Farming - Pastoral The Company's livestock numbers have been reduced to approximately 7,500 organic Dorper breeding ewes following the exit of the leasehold properties \"Keewong\" and \"Paddington\". Improved seasonal conditions have provided for a good supply of feed across the remaining \"Tandou\" and \"Willotia\" pastoral areas. Stronger lamb prices and continued genetic improvements are expected to provide improved trading and earnings growth for the Company's pastoral operations during 2014/15. Pastoral earnings are included in the Farming segment EBIT results. Environmental, Health & Safety The Company continues its involvement in and leadership of sustainable land management projects in the Riverina and western New South Wales. This work is based on sound environmental outcomes as defined in the Company's Environmental Management System (EMS) and combines the development and conversion of grazing land to organic status and continual monitoring of our natural resources. Photo points and groundcover assessments were conducted on Tandou Pastoral areas in accordance with the Company's EMS and the land title Property Vegetation Plan. Groundcover results are monitored and where required specific sites are assessed for remedial works including ponding and other successful remediation trials. Tandou has maintained its commitment and compliance with the myBMP (Best Management Practices) for cotton production and cotton ginning and also more recently BCI (Better Cotton Initiatives). As an approved grower Tandou is permitted to sell BCI certified cotton and attract a market premium. During the period the Company has successfully completed compliance audits for the following: Australian Organic Standard (domestic standard) for sheep and cattle National Organic Program (US export standard) for sheep and cattle Best Management Practice for Ginning Cotton (industry standard) Tandou Farm remains certified to the myBMP standard, and the task of improving the processes and infrastructure at the Hay properties has begun with the end goal of obtaining certification for these properties. Energy related targets and energy management results are reported at Board level on a regular basis. The Company continues its strong focus on health and safety practices and procedures. Directors and management are proud of the Company's safety record underpinned by a strong culture of employee compliance and awareness, with continued initiatives being developed to ensure workplace safety remains a priority. A recent initiative has been to move our company and site inductions onto a web based platform to ensure more consistent induction content and improved capturing of important workplace documents such as insurance, licencing and competency qualifications and certifications. Finance Facilities Finance facilities are provided by the National Australia Bank, including $22.0 million in term debt facilities and a $44.5 million seasonal facility. At balance date the facilities were drawn to $10.0 million and $31.1 million respectively. These facilities provide the full funding requirements for the business operations including the current cropping intentions for 2014/15. 3 Tandou Limited Operating and Financial Review For the Year Ended 30 June 2014 For personal use only Strategy The Company is focused on investing in and managing water and land assets in the connected Murray-Darling Basin. The Company is growing its significant and diverse investment in water entitlements in the region using its scale and intellectual property as a competitive advantage. The Company is a large scale cotton orientated irrigator producing some rotational crops to optimise returns from its land assets. All funds from the Company's capital raising have been applied and Tandou will continue to review and manage its water assets to maximise water entitlement capital growth and income yield from allocations, either through cropping or external sales. Innovation and the continued development of efficiency gains are expected to drive further improvements in crop yield and returns, along with information technology and reporting of key business information improvements. Business Risks The Company has an established and Board approved Risk Management poli