new perspective, page-28

Hey MMM,

It's a bit difficult with unaudited results as the breakdown is not so clear, but I'll give an explanation as to my thinking. I'll point out that I'm not a chartered accountant or anything, so I do miss things. Feel free to correct me wherever you like.

I'm not sure where you got $14m in the bank from, from what I see, they have $3.9m cash and significant short term borrowings to worry about. I'm referring to operating cash flow when I say it's 'not up to scratch'. Perhaps my wording sounds too critical, I'm simpy pointing out that there's a deficiency that needs to be improved upon. The cash flow issues are completely understandable considering the massive expansion they've taken on during FY12. Receivables will come later than initial expenses as companies are always reluctant to part with cash, but I expect a much improved performance this half. What I'm concerned about, is that should the work dry up before they manage to balance operating cash flow, then may struggle to maintain payments to creditors. Cash flow issues are a significant concern to any company.

Given the market expects a slowdown in activity, I would expect a small player such as AZG to be held at a discount. FGE has a current PE of 7.54 and they have an amazing track record is amazing, so where does that leave AZG...? At this stage, unless AZG needs to prove their long term viability more so than others. If they can do this, then we're in for one hell of a ride :)

Please don't take that as a criticism of AZG's performance this FY. They've done a great job getting to where they are, and if they can continue to make terrific profits then everything will be rosy.

I hope that's a satisfactory response.