please trim too many liabilties, page-42

I mentioned earlier today that I sold 70% of my ccc shares this morning and would outline the reasons for this decision, which I have done below. As anyone follows my posts would know I am by no means a ramper in either direction, take it or leave it:

Considering the half yearly report and specifically the 'Going Concern' comments, these are worrying. However CCC is used to operating under these pressures; refer 2010 full year accounts, same comments from the Auditor. My problem with this is that extended operations under this pressure represents a culture of acceptance of 'living on the edge'.

Many people have mentioned the large management team and I agree it is large, the saying too many chiefs comes to mind. My other concern is they seem keen on getting $$ in the pocket both in options and pay, average pay has doubled year-to-year 09-10. This concern deepened when you view the comments in the Director's report (pg2), if I was the Chairman I would be concerned about plenty of areas and yet none are mentioned. I have concerns where the focus is on increasing 'Net Assets' can be valued however and not reflective of sale value (Refer REU during the GEC) and net 'Cash Flow' not profitability.

Specifics from the half yearly accounts:

Note 2 Pg 19 - The P&L is far from strong, even though it only represents a short window of operations with the new entities. The fact they bought in coal at $4.2M surprised me, is this cross business expense or signs of inefficiencies or caught short on the contract?

Errors in the report is systemic of no proof reading or not enough time to proof read, plenty of time to spend $10M on consultants!

Note 5 Pg 20 - The cash assets are not what they seem with $5.2M restricted as cash guarantees, I'm guessing this will be one of the stipulations under the loan agreement.

Note 6 Pg 20 - Trade receivables have increased to be expected, however I was surprised that the proportions to other receivables were as high, why have they increased? How long have they been outstanding?

Note 10 Pg 22 - Okay so the company has raised cash at great cost to the business on high interest rates with conditions such as put options and calls over the business ... great, must be awesome businesses that you need them so bad. Hang on, they aren't making any money! In fact are losing money every day (How can this be?). When combined with the Auditors comments on page 38 that they bought Golden Falls and no one can find any paperwork on this transaction such as financial statements!

Note 11 (i) Pg24 - An application has been made for more debt, but don't worry it is for nothing important, only working capital! Mind you the auditors said this would be required.

Overall debt structure and cost associated with getting in and out of debt is out of control. So is the fact they are being held over a barrel to get debt, refer note 17 (vi) & (vii) bottom of pg 27:

15% interest paid in cash or shares at 8 cents or 5% discount to 30-day VWAP ...

Also refer note 22 Pg 33 dot point 1!

Also of great concern is Note 23 Point (ii) Pg 34. The board views the performance with respect to adjusted EBITDA, well that is just dandy. Especially as I consider given their track record the points they adjust out should be left in as they spend this way constantly.

In addition the divested cash management concerns me as I'm guessing it would be a 'mushroom' scenario.

Of course we need to give ourselves a few 100mil share options for doing a great job!

In summary, CCC IMHO has limited to no cash, has complex and large debt facilities, and a mangment team that is concerned not with the health of the business but more keeping the market pumped up.

Whilst they have some great possibilities, the risk for me now outways the possible return and hence I'm 70% out and likely to be all out tomorrow now I have written this.

This is of course my opinion and posted for general information and is by no means advice.

4TK