Continuous Disclosure

Water Investment Update

The directors of Tandou are pleased to advise that further to earlier reports the Company has now exchanged  contracts for the purchase of a significant parcel of water entitlements, for a total value of approximately $12.7 million.

The transaction consists of two contracts, the first of which includes 1,624 megalitres of High security water. The second contract for 8,450 megalitres is subject to satisfying conditions for the transfer of these water entitlements from an Irrigation co-operative to Murrumbidgee River system and consists of a mix of High and General security water. Both contracts are expected to be completed during June-July 2011.

Directors also advise that the Company has exchanged contracts for the sale of 9,202 megalitres of water entitlements, primarily general security, for a total value of $11.2 million since 1 January 2011. The gross margin contribution from these sales is approximately $4.9 million, and reflects a net contribution of $0.5 million above the 31 December 2010 directors’ valuation. In accordance with the relevant accounting standards the Company’s water entitlements continue to be valued at cost.

Cotton Update

Cotton picking commenced at Tandou Farm on 5 May 2011 with approximately 30% of the total crop now picked. While preliminary gin turnout figures are yet to be confirmed early estimates indicate cotton yields in line with budget projections. Pending favourable weather conditions picking is anticipated to be completed by mid June.

Change of Year End

The Company has now confirmed that it intends changing its current year-end date from 31 December to 30 June, to align with the water accounting year and to better match the cotton crop production cycle. The change over will take effect during this current six month period, with the period from 1 January 2011 to 30 June 2011 constituting a transitional financial period.

Earnings Update

A revised earnings update for the six months to 30 June 2011 will be reported pending the completion of the cotton harvest and as gin turnout and yield figures become known.

Yours faithfully

 
 
Guy Kingwill
CHIEF EXECUTIVE OFFICER/MANAGING DIRECTOR

TANDOU LIMITED
ABN 81 001 014 562