Ann: Response to ASX Query, page-30

Regardless of the flaws in the Glaucus report (of which there were many), it seems to me that two aspects remain unanswered by QINs response. Firstly is the issue of reliance on capital markets and significant increase in embedded debt in recent times. Secondly is the capital raising being done by Jaederberg & Cie. QINs response on that was largely irrelevant, even if technically true. Raising funds in offshore markets which may have less stringent rules around how facts are presented (alternatives facts anyone?) is not uncommon. Agribusiness MIS have had several layers of higher disclosure imposed on them post the collapses in 2009-2010. This makes it harder to raise money from Australian investors. The solution for some firms marketing products where increased disclosure rules have eventuated (think mortgage and unlisted property funds), has been to raise money offshore where these requirements do not apply. So the question needs to be asked, just how much money have they been raising offshore vs locally? How much of a hit might they take on the capital raising front if offshore investors suddenly twig to the fact they have been sold on the basis of distorted (or non-existent) facts?

These two aspects worry me. I was a holder until last week and sold at about par when the Glaucus report first came out ($1.31). While I believe the physical production side of the business remains robust based on the available information, the business elements are keeping me cautious at this point. Management needs to address these issues to make me a believer again.