the cmi story, page-21

To all that have an interest in CMI.

I am writing to the auditors and CC to the company to ask the following:

1. The loans ( Impaired one) interest is being serviced by the business on a monthly basis and as I understand it the underlying business is profitable. So why should they consider the loan to be irrecoverable - especially considering that they must have increased the value from $14m to $16.5m at some point. Whats changed ?

2. As they have a $2.5m surety they are suggesting that the loan will in itself only recover $6m.

3. Have they had contact with the borrower and asked about repayment and their concerns.

4. Did the directors , in approving this deal, not envisage that this might happen considering they agreed to allow the bank to have the first calim against the assets.

5. It seems that $8.0m is potentially bad however in an industrial failure you may lose everything so if the loan is this distressed why have they not written the entire loan off at this time. Surely its either recoverable over time or not recoverable at all if you are behind a bank.

I suggest that all shareholders write to ask similar questions if they are concerned about this. The auditor I would hope than has to apply his mind in this process and the more concerned shareholders that do ask these questions the more chance you have of people looking at this more closely.