firsthalf net profit up 44pc to 18.6m, page-7

I have clarified with CFO and response is below:

Thankyou for your comments.

The business financing decisions made by Namoi are potentially more complicated than a vanilla manufacturer in that we operate a seasonal business with a heavy emphasis (as indicated throughout the annual accounts) on our risk management strategies. The use of a structured inventory financing product provides greater borrowing capacity when required from either higher physical stock levels or higher cotton futures price levels thereby allowing adequate liquidity for Namoi's seasonal operations. It does however require "current" classification. We are naturally comfortable with our ability to renegotiate banking facilities through the company's performance in trying circumstances.

Please do not hesitate to contact me to discuss if required.

Stuart Greenwood
Chief Financial Officer
Namoi Cotton Cooperative Ltd
1b Kitchener Street, Toowoomba QLD 4350.
Ph: (07) 46316105 Fax: (07) 46316184
e-mail: [email protected]