Time is marching on. Its been 3 reports including the FY 18 that...

Time is marching on. Its been 3 reports including the FY 18 that VGI and poor old Joe have been harping on about misstatements and worse. Yet still no iron clad evidence. I can only imagine how they must feel. Instead they seem to be relying on a sniff, an I reckon and a mouthy media journalist. In theory this could still be playing out years from now with the sniff still being thrown up but very tiring.
Given the above some serious questions need to be asked.
VGI do not seem to be any closer to producing real evidence than they were nearly a year ago. Are they in reality the party making the misstatements and perpetuating them? The longer this goes on the greater the perception. This question needs to be asked.
Why haven't they been able to produce any more than a sniff? Is there really anything to find?
Does VGI stand to gain 'big' from a falling CTD share price?
Is the negative press affecting the CTD share price? A quote from the recent Chanicleer article interview with Ewen Crouch.

"The recent weakness in the shareprice can be attributed to VGI, simply because it puts a certain amount ofnoise and doubt around a stock that once carried a very high multiple."
Is there an undisclosed connection between poor old Joe and VGI? I do not know but without either party making a disclosure the question needs to be asked because perceptions are perceptions and unfortunately can become a persons reality.
Is poor old Joe the mouthpiece for VGI? I do not know. Perceptions can be damming at times but they can be cured by a tiny bit of disclosure!!

Is it possible that this is just a massive scam at the expense of CTD and its shareholders? I do not know but again the question needs to be asked. There is the potential that over time perception becomes a persons reality/belief.
I think the average man in the street would expect those questions to be asked due to the lack of iron clad evidence put forward to date..
It appears CTD making themselves available to the media has not worked well so far except we have seen a couple of reasonably well balanced articles. As part of the $1.2 million spent on this 'drama' they likely got their own specialist independent forensic analyst to critically review the financials. CTD cannot provide VGI with extra disclosures simply because VGI have to much to lose by agreeing with anything. They would likely put their own spin on it. Looks like CTD may have to find an investigative journalist to write the real story - they won't though!
VGI and poor old Joe despite all their baby bluster noise have not been able to articulate exactly what these alleged misstatements are and how CTD would likely benefit from them.
Material financial misstatements are like a partly inflated balloon. Squeeze one end and a bulge will appear at the other end - the bulge never eventually fails to appear - Year 11 Accounting. Cant find a bulge in CTD financials and apparently neither can VGI or poor old Joe - or the rest of the market or the auditors, the EY independent or the Bankers for that matter. And by the way a 'sniff' is not the same as a bulge. Oh, and someone needs to let poor old Joe and who ever from VGI know that you don't detect the bulge by feeling the books - you have to put Year 11 Accounting basics to work . No bulge-no problem. Bulges often but not always show as massive cash/debt problems or working capital shares issues.
CTD has a bucket full of cash and reduced debt materially during the last half. See Note 29 to the 2019 Accounts for revenue from contracts disclosure - AASB 15. I note that volume based revenue was only a small 17.5% of total revenue in FY 2019 and 15.4% in FY 2018.
Other issues such as Impairment and IT capitalisation have been dealt with and are satisfactory. I have to laugh as if you buy a business and improve profitability it actually becomes more valuable not less.
Once again drawing on my year 11 Accounting below is a very simple table showing the effects of accruals, its effect on cash on hand and how viewing Cash conversion in isolated periods is fruitless, and how Cash conversion needs to be viewed over time.

	1STH FY18	2NDH FY18	1STH FY19	2NDH FY19
	12/17-6/17	6/18-12/17	12/18-6/18	6/19-12/18
Change in client payables B/Shet	-19422	55841	-37006	119308
note 1st half negative change in payables which means less beginning accruals
Cash conversion disclosed	65%	110%	45%	160%
Cash on hand at period end	72380	84297	74210	138791
Cash on handdifference	-8%	36%	-14%	87%

The skew to the 2nd half means that the difference in balance sheet current payables at the end of the 2nd half is way higher than the 1st half. This is due to timing/accruals. The accruals are liabilities incurred in one period but not paid until the next period. Apart from the increased activity of a growing business this is because corporates and Government tend to do less travel in December before Xmas than in June. In ANZ its the end of our financial year. Not sure when other Regions financial periods end.
I am not very good at explaining things but the primary reason for negative difference in payables at the 31st Dec ending periods is way lower accruals at the end of the period.
Note how the Cash conversion as expected is very low in the less active 1st half and greater than 100% in the more active 2nd half.
Note how as expected cash on hand is lower in the first half of each year and its way higher in the 2nd half. The high levels of accruals from the 2nd half are paid in the next 1st half period causing a temporary drain on cash.
I note that cash has had a massive increase of 87% in the 2nd half of 2019. The Payables have also had a massive increase but are still way below the cash on hand. VGI intimated that payments were delayed to hide cash issues. The fact is there is plenty of money to pay them. The full period impact of LOTUS would have had some effect in increasing the payables. A quick check of the liquidity ratios sees CTD very, very solvent.
You can restate cash flow as many times as you like but at the end of the day the total cash flow balance at end will be the same as cash shown on the balance sheet.
Given its been 3 CTD reports and nearly 12 months since the VGI carry on you would not expect CTD to have so much cash, so little debt, be so solvent and have the growth profile it has with all that 'noise' .
A couple of overhead gaps to fill at $19.36 and $26.
Improving chance of easing in the Hong Kong situation.