Ann: Appendix 4E - 2016 Preliminary Final Report-BFC.AX, page-30

We know why we have the inventory build up which from what ive read published by BFC makes sense provided there is a market for aged cheese but with this what they would have effectively done is got cheaper inputs (i.e. Milk) given low farm gate prices thus creating an inventory of cheese is giving them a higher margin plus a social benefit of being farmer friendly whilst also utilizing assets (IMO Great move by management and showing their business experience).

The second point with trade receivables may be indicating credit terms are to flexible. However if you look at the Note trade receivables is actually only 12,299,000. The other big factor in the balance sheet figure is the convertible notes. More than anything these are just accounting practices and manipulations. We had a total 430,000 written off in bad debts of which 301,000 was abnormal (this could be from the company leasing the farm potentially). If anything the trade receivables of 12mil shows that we have seen demand increase drastically at the back end of the last quarter which all things held constant would flow into FY 17 as the company develops. BFC have said that the financial benefits of their agreements will flow in first half FY 17.

So when we look at it this way i can kind of see why they paid the dividend because quite frankly if we didnt have IPO expenses this year we would have been profitable and if a couple of the outstanding accounts paid by 30th June we also would have been profitable. (Note - Completely against the dividend) - I am very interested to see the future plans for acquisitions this coming year. Is OZIRIS going to be used to allow someone like Comvita NZX or CZZ to use there technology on honey given the large amount of counterfeit products not just in China but the UK? Could BFC be looking at taking at Stake in CZZ and offering OZIRIS and their supply network? This report has eliminated a lot of the concerns i had around this stock and on the next dip i think i might double up)