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Investor Presentation20 March 2014

NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES

Corporate Summary

Tandou Limited is an Australian agribusiness company,focusing on large scale irrigated cotton production. Tandouinvests in water entitlements for long term capital growthwhile retaining the option of using the allocation from theseentitlements to sell water allocations when the price is high,or facilitate crop production when prices are low.

Company synopsis Substantial Shareholders

Share price chart

March 2014 Tandou Limited Investor Presentation 2

Company overview

Company overview

Name Position

Rob Woolley Independent Chairman

Guy Kingwill CEO & Managing Director

Rodger Finlay Non-Independent Non-Executive Director

David Boyd Independent Non-Executive Director

ASX Code TAN.ASX

Share price (13 Mar 2014) $0.54

NTA per share (book) (31 Dec 2013) $0.57

NTA per share (directors value) (31 Dec 2013) $0.71

Shares on Issue (31 Dec 2013) 143.2M

Market Cap (13 Mar 2014) $76.6M

Net Debt (13 Mar 2014) $63.8M

Name Amount %

REL-Trust Management, Rural Equities Ltd, Ashfield Farm Ltd & H&G Ltd 25,136,509 17.56%

Water Asset Management LLC 17,339,653 12.11%

PF Agriculture Pty Ltd 12,168,922 8.50%

Mr Andrew Roy Newberry Sisson 9,465,000 6.61%

Zhiwei Lin, Hongyu Zhao & Xiang Lin 7,240,337 5.06%

Laguna Bay Pastoral Company 7,211,353 5.04%

Board of Directors


Rob WoolleyIndependent Chairman

Guy KingwillCEO & Managing

Director

Rodger FinlayNon-Independent

Non-Executive Director

David BoydIndependent Non-Executive Director

� Current Chairman of Tasmanian Forests & Forest Ind. Council and Tasmanian Pure Foods Ltd, and Board member of Forestry Tasmania

� Formerly Managing Director of Webster’s Ltd.

� Over 20 years corporate finance experience as a partner of Deloitte.

� Appointed CEO of Tandou in March 2006, after commencing with the Company as CFO in June 2005

� Extensive management experience through senior executive roles in Australia & with Bayer in the United States

� Rodger is the Deputy Chairman of Rural Equities Limited, which is currently a 10.97% shareholder of Tandou.

� Rodger is also an Independent Director of New Zealand Oil and Gas Ltd, Public Trust, Mundane Asset Management and Moeraki Limited.

� 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 John Swire & Sons Pty Ltd, Cotton Australia, the Australian Wool Exchange, Wool International, and Australian Wool Innovation Limited

Profit History


Segment Financials Profit track record (NPAT $M)

*Half year (change of year end)

� In FY13 the company recorded a 15% increase inNPAT.

� Growth has been derived from both the increase inthe Water Operations and Farming

� Growth in farming profits has been derived fromimproving cotton prices, more hectares undercultivation and operational improvements.

� Water profits have increased as the Company hasincreased entitlement trading activity and the saleof allocation water.

$3.7

$5.2

$6.0

FY11A* FY12A FY13A

Year end June ($M) FY12A FY13A

Farming

Revenue 24.7 34.0

EBIT 3.9 4.2

Margins 16% 12%

Water Operations

Revenue 28.4 37.5

EBIT 6.4 7.3

Margin 23% 19%

Corporate Office Overheads 1.8 2.0

Group EBIT 8.5 9.5

Margin 16% 13%

Tandou Operations Overview

� Tandou owns one of the largest, most diverse, actively managed water portfolios in Australia.

� 84.5GL of permanent Water Entitlements held within the Southern Murray Darling Basin.

� In FY13 water generated EBIT of $7.3M from selling annual allocations and entitlement trading.

� Tandou is one of the largest cotton producers in Australia.

� In FY14 the Company’s total cotton area is 23% higher at 8,700ha.

� In FY15 we are preparing between 8,000-11,000ha for cotton cropping (pending water availability inMenindee Lakes).

� Forward sales are ~85% of the FY14 cotton crop at an average price of A$476 per bale (FY13: A$456per bale).

� Cotton prices have continued to improve and is currently above A$500 per bale for 2014 crop.


Water

Farming

Future Opportunities


Water

� Continue to look for opportunities to realise value as we

build the portfolio.

� Impact of average seasons and full environmental

buyback on capital value.

Cropping

� Increase 2015 cotton crop area by 25%.

� Continue to optimise & increase Tandou Farm cotton area.

� Take new area (Hay aggregation) 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.

7

Capital Raising - Overview

March 2014

� Tandou is undertaking a fully underwritten capital raising of

approximately $25.2 million

� 3 for 8 non-renounceable entitlement offer (53.7 million shares)

Equity Offer

Lead Manager

� Petra Capital Pty Ltd is the Lead Manager and Underwriter

� Entitlement offer price of $0.47 per share

� 10.5% discount to last close of $0.525 (18 March 2014)

� 3.5% discount to 1 month VWAP1 of $0.487 (18 March 2014)

� 7.2% discount to TERP of $0.5062

Offer Price

Use of Proceeds

� Pay down debt following the recent acquisition of “Bundygoola”

(formerly “South Farm”) and general working capital requirements,

and should position the Company in a better position to pursue

ongoing growth opportunities as they occur

(1) VWAP: Volume weighted average price(2) TERP: Theoretical ex-rights price – calculated on pre-announcement closing price

Tandou Limited Investor Presentation

8

Capital Raising – Use of Proceeds

March 2014

� Tandou increased bank debt facilities by $32 million to fund the

acquisition of:

� Water assets valued at $24.8 million

� Land assets valued at $8.4 million

Pay down bank debt$23.8m

� Underwriting, legal and other costs associated with the capital raisingOffer costs$1.4m

Total Proceeds$25.2m

� Pay down debt following the recent acquisition of “Bundygoola”

(formerly “South Farm”) and general working capital requirements

and should position the Company in a better position to pursue

ongoing growth opportunities as they occur


9

Capital Raising – Pro forma Balance Sheet

March 2014 Tandou Limited Investor Presentation

Haly Year Report

31 Dec 2013

Bundygoola Acquisition (Post Dec)

Pro Forma including

Bundygoola

Impact ofEntitlement

Offer

Pro Forma as at

31 Dec 2013

Current Assets 79.7 24.1 103.8 103.8

Non Current Assets 47.6 8.0 55.6 55.6

Total Assets 127.3 32.1 159.4 0.0 159.4

Borrowings - Current 24.3 15.1 39.4 (6.8) 32.6

Borrowings – Non Current 10.0 17.0 27.0 (17.0) 10.0

Other Liabilities 11.9 11.9 11.9

Total Liabilities 46.2 32.1 78.3 (23.8) 54.5

Total Equity 81.1 0.0 81.1 23.8 104.9

Net Debt to Equity 42.3% 81.9% 40.6%

10

Capital Raising – Timetable

Ex Date

Record Date

Offer Opening Date

Offer Closing Date

Allotment of New Shares

Dispatch of Holding Statements

New Shares Commence Trading

March 2014

24 March 2014

28 March 2014

2 April 2014

28 April 2014

6 May 2014

9 May 2014

7 May 2014


11

Capital Raising – Key Investment Risks

� Agricultural commodity price fluctuations� Drought, flood, hail, bushfire and other extreme weather conditions

� Pests and disease

� Change in water regulations

� Availability, cost and timing of acquisition of

additional water entitlements

� Availability, cost and timing of water allocations

� Water sustainability

� Asset liquidity

� Reliance on key personnel and ability to attract

personnel

� Interest rates

� Exchange rates


This section discusses some of the key risks associated with an investment in shares in Tandou. A number of risksand uncertainties, which are both specific to Tandou and of a more general nature, may adversely affect theoperating and financial performance or position of Tandou, in turn affecting the value of Tandou shares and thevalue of your investment in Tandou. The risk and uncertainties described below are not an exhaustive list of the risksfacing Tandou in connection with the capital raising or associated with an investment in Tandou. Additional risks anduncertainties may also become important factors that adversely affect Tandou’s operating and financial performanceor position. Please refer to the Appendix for more detail on these key operational and investment risks.

� Environmental risks� Insurance� Access to cash from operations and external financing to operate and expand Tandou’s business

� Refinancing requirements� Counterparty risks� Litigation� Exposure to supply cost market prices� Forward sales requirement to physically deliver soft commodities

� Availability of carried-forward tax losses� General economic conditions� Stock market fluctuations� Liquidity

12

Capital Raising – Additional Information


� Tandou Specific Risk Factors

� General Risk Factors

� International Offer Restrictions

� Important Information and Disclaimer

13

Tandou Specific Risk Factors


� Agricultural commodity price fluctuations

� A significant proportion of Tandou’s revenue is derived from the sale of agricultural commodities, whose prices are subject to marketfluctuations.

� Negative agricultural commodity price movements may result from reduced demand for particular crops, an increase in supplyrelative to demand of particular crops, or adverse exchange rate movements.

� Tandou manages some of its exposure to adverse fluctuations in agricultural commodity prices by entering into forward sellingcontracts. However the impact of price movements may still be negative depending on their direction, timing and magnitude.

� Drought, flood, hail, bushfires and other extreme weather conditions

� The production of agricultural commodities is affected by drought, flood, hail, bushfires and other extreme weather conditions thatmay adversely affect production levels and the future financial performance of Tandou.

� Variability in weather conditions and natural disasters may impact key drivers of Tandou’s earnings including crop size and quality,supply and demand characteristics in agricultural markets, market prices for agricultural commodities and farming behaviour andeconomic activity.

� Tandou manages some of its exposure to adverse weather conditions and natural disasters by entering into crop insurance andthrough the continuing development of its farming practices.

� Pests and disease

� Under certain unforeseen circumstances, insect pests, diseases, vermin or noxious weeds may affect crop production and returns. Theimpact of pests and diseases may result in failure of crops and even export bans with, in the extreme, Australia losing its reputationfor producing quality food and fibre products. Exposure to disease is mitigated by the isolation and distance of Australia from othercountries which reduces cross border infections, and by Australia’s strict quarantine regime and through the continuing developmentof its farming practices

� Change in water regulations

� In recent years, there have been changes to the conditions governing water entitlements and water allocations. There is a risk theremay be further changes to the conditions of water entitlements, the quantum of water allocations or the ability to trade in waterentitlements or water allocations, the consequence of which may be that the benefits attached to those entitlements and allocationsare reduced.

14

Tandou Specific Risk Factors (cont’d)


� Availability, cost and timing of acquisition of additional water entitlements

� Conditions regarding the availability, cost and timing of acquisition of additional water entitlements by Tandou may adversely

affect implementation of Tandou’s acquisition strategy.

� Availability, cost and timing of water allocations

� The size of water allocations is dependent on water availability which is influenced by factors including the timing, location

and magnitude of rainfall and the extent to which allocations have been utilised in the previous financial year. Tandou is

dependent on water allocations being made by the relevant authorities in order to utilise the company’s water assets for

either cropping or trading purposes. A prolonged period of lower than average rainfall, resulting in low or zero water

allocations may significantly impair the company’s ability to plant crops or trade water for financial gain, and have a negative

impact on financial performance.

� Water allocations are reset to zero each July and then made fortnightly, with allocations either remaining static or increasing.

Tandou is dependent on water availability to plant a cotton crop. A delay by water authorities in making water allocations may

adversely impact Tandou’s ability to plant a cotton crop and have a negative impact on financial performance.

� Current regulations allow a proportion of water allocations that remain unused at 30 June each year to be carried over to the

following water year. In the event of significant rainfall, should water storage facilities reach capacity and water needs to be

released, these carried over rights will typically be lost. In the event Tandou has water allocations carried over, Tandou would

likely lose the ability to generate an economic return from these water allocations.

� Tandou’s cropping operations require water allocations significantly greater than those Tandou owns, requiring the company

to source additional water allocations on the water market in order to grow both cotton and cereal crops. If there is a

significant reduction in the level of water allocations, or restrictions on the transfer of water allocations to the Lower Darling

River System, restrictions on Tandou’s water supply to Tandou Farm would have a significant adverse effect on the company’s

cropping operations and have a negative impact on financial performance of the cropping business.

15



� Water sustainability

� Changes in the global environment may affect climate conditions and water sustainability. Irrigated crop production such asthat carried on by Tandou requires constant and reliable access to water. Tandou has diversified its farming locations ismaximising on farm storages to reduce the lack of water availability risk. There is a risk that Tandou may be unable to benefitfrom rainfall and reliable water sources which would have an adverse impact on the futurefinancial performance of Tandou’s cropping operations.

� Asset liquidity

� Tandou may invest in assets, including water entitlements, where there are only a limited number of potential investors, andwhich trade on markets which are relatively immature and illiquid. As a consequence, the realisable value of an asset may beless than the apparent value or it may take a long period of time before the investment is able to be realised at market value.

� Reliance on key personnel and ability to attract personnel

� The success of Tandou depends on the ability to retain the members of the Board and senior management, as well as toattract talented personnel. Tandou has negotiated contracts for key personnel. While these contracts currently exist, they donot guarantee the continued involvement of the Board members or employment of key personnel. The loss of key employeescould cause material disruption to the businesses and operations of Tandou and have a material adverse effect on futurefinancial performance.

� Interest rates

� Given that Tandou partly funds its operations with debt, it has an exposure to changes in interest rates. An increase in interestrates may have an adverse affect on future financial performance.

� Exchange rates

� Tandou’s returns from cotton sales are influenced by the Australian dollar – US dollar exchange rate. Fluctuations in theAustralian dollar – US dollar exchange rate may have an adverse affect on future financial performance. To manage in part thefluctuation and uncertainty relating to the Australian dollar – US dollar exchange rate Tandou enters into forward salescontracts predominately in Australian dollars.

16



� Environmental risks

� The company, as with other cotton producers, produces air, noise, odour and waste emissions in the course of production. Tandoumay be required to take action and incur significant expenses due to current and future environmental regulations in relation to itspast, current and future conduct.

� Insurance

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

� Access to cash from operations and external financing to operate and expand Tandou’s business

� Tandou’s continued ability to operate its business and effectively implement its strategies over time will depend in part on theCompany’s ability to repay or refinance debts as they fall due. Equity or debt financing may not be available to Tandou on favourableterms or at all. If adequate funds are not available from operations or external sources in the future, Tandou may not be able to takeadvantage of opportunities, develop new ideas or respond to competitive pressures.

� Refinancing requirements

� Tandou is exposed to the risks relating to the availability and terms of refinancing existing debt facilities. To the extent that some or allof these debt facilities are refinanced, they may be on terms less favourable to Tandou than is currently the case.

� Counterparty risks

� The financial performance of Tandou is subject to the company and its counterparties continuing to perform their respectiveobligations under various contracts. If Tandou or one of its counterparties fails to adequately perform their contractual obligations,this may result in a loss of earnings, termination of the particular contract, disputes and or litigation.

� Litigation

� The Company is not currently involved in any litigation matters. Any future litigation matters and the resultant impact of legalproceedings may have a negative financial effect on Tandou.

17



� Exposure to supply cost market prices

� Tandou enters into forward sale contracts which fix the price of soft commodities produced by the company’s cropping

operations, but buys supplies and services such as fertiliser, electricity and fuel at market prices. An increase in prices of some

or all of these supply costs to Tandou following entry into forward sale contracts may result in a loss of earnings for Tandou.

� Forward sales requirement to physically deliver soft commodities

� Tandou policy is to enter into a number of forward sale contracts in order to manage in part its exposure to commodity price

fluctuations. These forward sale contracts oblige Tandou to deliver the underlying physical commodity. Should the Company’s

crop fail, Tandou may be obliged to procure alternative supplies of the commodity to satisfy forward sale contract obligations.

These purchases may be at prices above the price the company has secured under the forward sale contract, which could

have a material negative effect on Tandou’s financial performance.

� Availability of carried forward tax losses

� Tandou has substantial carried forward tax losses potentially available for offsetting against future taxable income. The

availability of these tax losses is dependent on the Company satisfying the same business test.

� The Company will only satisfy the same business test if the business carried on at the point the continuity of ownership test is

failed (or the corporate change occurs) is the same as the business carried on in the year in which the losses are sought to be

used.

� If the Company does not satisfy the continuity of ownership test or the same business test, carried forward tax losses would

not be available to reduce income tax payable on the Company’s future earnings.

18

General Risk Factors


� General economic conditions

� Adverse changes in economic conditions such as levels of consumer spending, inflation, interest rates, exchange rates,

government fiscal, monetary and regulatory policies, international economic conditions and employment rates, access to debt

and capital markets, acts of terrorism, hostilities, war or natural disasters (among others) are outside Tandou’s control and

have the potential to have an adverse effect on Tandou, its operations or financial condition.

� Stock market fluctuations

� There are risks associated with an investment in a company listed on the ASX. The value of Tandou’s shares may rise above or

fall below the current price depending on the financial and operating performance of Tandou and external factors over which

Tandou and the Directors have no control. These external factors include economic conditions in Australia and overseas,

changing investor sentiment in the local and international stock markets, changes in domestic or international fiscal,

monetary, regulatory or other government policies and developments and general conditions in the markets in which Tandou

operates or proposes to operate and which may impact on the future value and pricing of shares.

� Liquidity

� Prior to the capital raising, there has been a limited market for trading in Tandou shares. There can be no guarantee that a

liquid market in Tandou shares will develop or that the price of the shares will increase. There may be relatively few or many

potential buyers or sellers of the shares on ASX at any time. This may increase the volatility of the market price of the shares.

It may also affect the prevailing market price at which shareholders are able to sell their shares. This may result in

shareholders who acquire shares under to the capital raising receiving a market price for their shares that is less or more than

the offer price that shareholders paid.

19

International Offer Restrictions


� This document does not constitute an offer of new ordinary shares (“New Shares”) of Tandou Limited in any jurisdictionin which it would be unlawful. New Shares may not be offered or sold in any country outside Australia except to theextent permitted below.

� United Kingdom

� Neither the information in this document nor any other document relating to the offer has been delivered for approval to theFinancial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services andMarkets Act 2000, as amended ("FSMA")) has been published or is intended to be published in respect of the New Shares. Thisdocument is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of FSMA) in the UnitedKingdom, and the New Shares may not be offered or sold in the United Kingdom by means of this document, any accompanyingletter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents bedisclosed by recipients to any other person in the United Kingdom.

� Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connectionwith the issue or sale of the New Shares has only been communicated or caused to be communicated and will only becommunicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does notapply to the Company.

� In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("FPO"), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

� United States

� This document may not be released or distributed in the United States. This document does not constitute an offer to sell, or asolicitation of an offer to buy, securities in the United States. Any securities described in this document have not been, and will notbe, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exemptfrom, or not subject to, registration under the US Securities Act and applicable US state securities laws.

20

Important Information and Disclaimer


This presentation (Presentation) has been prepared by Tandou Limited ABN 81 001 014 562 (Tandou).

� Summary information

� This Presentation contains summary information about Tandou and its activities current as at [20] March 2014. The information in thisPresentation does not purport to be complete or comprehensive, and does not purport to summarise all information that an investor shouldconsider when making an investment decision. It should be read in conjunction with Tandou’s other periodic and continuous disclosureannouncements lodged with ASX Limited, which are available at www.asx.com.au.

� Not financial product advice

� This Presentation is not financial advice or a recommendation to acquire Tandou shares and has been prepared without taking into account theobjectives, financial situation or needs of individuals. Before making an investment decision prospective investors should consider theappropriateness of the information having regard to their own objectives, financial situation and needs and seek such legal, financial and/ortaxation advice as they deem necessary or appropriate to their jurisdiction. Tandou is not licensed to provide financial product advice in respectof Tandou shares. Cooling off rights do not apply to the acquisition of Tandou shares.

� Financial data

� All dollar values are in Australian dollars (A$). The pro forma historical financial information included in this Presentation does not purport to bein compliance with Article 11 of Regulation S-X of the rules and regulations of the US Securities and Exchange Commission. This Presentationcontains certain financial data that is non-GAAP financial measures under Regulation G under the US. Securities Exchange Act of 1934, includingEBIT (earnings before interest and taxes) and EBITDA (earnings before interest, taxes, depreciation and amortisation). These measures are notmeasures of or defined terms of financial performance, liquidity or value under AIFRS or US GAAP. Moreover, certain of these measures may notbe comparable to similarly titled measures of other companies.

� Future performance

� This Presentation contains certain forward looking statements. The words anticipated, expected, projections, forecast, estimates, could, may,target, consider and will and other similar expressions are intended to identify forward looking statements. Forward looking statements, opinionsand estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as arestatements about market and industry trends, which are based on interpretations of current market conditions. Forward looking statementsincluding projections, indications or guidance on future earnings or financial position and estimates are provided as a general guide only andshould not be relied on as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differmaterially from these statements. To the full extent permitted by law, Tandou and its directors, officers, employees, advisers, agents andintermediaries disclaim any obligation or undertaking to release any updates or revisions to the information to reflect any change in expectationsor assumptions. An investment in Tandou shares is subject to investment and other known and unknown risks, some of which are beyond thecontrol of Tandou. Please see the Key Risks section of this Presentation for further details. Tandou does not guarantee the performance ofTandou.

� Past performance

� Past performance information given in this Presentation is given for illustrative purposes only and should not be relied on as (and is not) anindication of future performance.

� Not an offer

� This Presentation is not an offer or an invitation to acquire Tandou shares or any other financial products and is not a prospectus, productdisclosure statement or other offering document under Australian law or any other law. It is for information purposes only.

investor pres (draft 4)(190314) - paritech newsproxy -...

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