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Bio-sustainable Feeds (BSF) Ltd., an Australian bio-research firm listed on the Australian Stock Exchange (ASX), has engaged research on sustainable aqua-culture feeds for two decades. Its research on a plant based feed (canola, corn, soya-bean, sunflower, etc., meal) costing $360 million AUD ($120 million collapsed when high-value piscavorian fish (e.g. fish eating species like salmon, trout, tuna, etc.) failed to thrive. Specifically, CBC (2016) noted that, while the plant-based fish feed was supposed to resolve the problem fish-based feed that are converted at a rate of 10.0 kg of low-value fish into 1.0 kg of high value fish (i.e. the normal conversion from a lower trophic level to a higher one), the conversion rate was actually 30.0 kg of plant based wet feed (before oven drying) to into 1.0 kg of high value fish—plus, over 1/3rd of the fish died (vs. less than 1/20th for the fish-based feeds), plus growing times nearly doubled, plus the mature fish were smaller (only 60 percent of the final weights of those grown on the fish-based feeds).
The above mentioned issues are compounded by accusations from environmentalists that diverting human-quality food crops into growing luxury fish is just as bad as diverting low-value fish into that production—it benefits the rich but puts the poor at increased risk of malnutrition or even starvation.
In response to the above issues, BSF Ltd. is researching the use of bacteria to produce fish feeds from wood chips, sugar cane residue, or recaptured methane gas (e.g. from dumps, sewage, food processing plants). The research, which has had some success at BSF Ltd. and other facilities (Rust, et al., 2011; Lothe, 2013; Sarker, et al., 2016), has cost BSF Ltd. $160 million AUD in research to date and is expected to cost another $200 million AUD in development costs to bring it to market.
BSF Ltd. received a $500 million AUD grant from the Commonwealth Scientific and Industrial Research Organisation (CSIRO, Federal Government of Australia) in return for BSF Ltd. spending at least $100 million AUD a year on alternative aquaculture feeds. CSIRO paid the funds to BSF Ltd. three years ago (in 2013), and (during those three years) BSF Ltd. has spent a total of $500 million AUD ($340 million plus $160 million) on research and has committed to spend $200 million in development cost over the next two years to develop an alternative aquaculture feed from the research done to date.
The expected net market value of the patent is $700 million AUD if sold in two years or $200 million AUD a year for 10 years if produced and sold (remember to adjust for two years) and the appropriate discount rate for this type of project is 8.0% pa.
Partial Refrences:
CBC. 2016. Shift to plant-based fish feed could hurt health, environment, CBCNews Technology & Science, (23 Mar/16), Retrieved on 11 Jul/16 from:
Lothe, R. 2013. Fish feed-research may help reduce world hunger, ScienceNordic, 17 Mar/13, Retrieved on 11, Jul/16 from: 20
Sarker, P.K., Kapuscinski, A.R., Lanois, A.J., Livesey, E.D., Bernhard, K.P., Coley, M.L. 2016. Towards Sustainable Aquafeeds: Complete Substitution of Fish Oil with Marine Microalga Schizochytrium sp. Improves Growth and Fatty Acid Deposition in Juvenile Nile Tilapia (Oreochromis niloticus). PLOS ONE, 2016; 11(6), Retrieved on 11, Jul/16 from:

Understanding specific need in health and social care

Unit 6 Research project
Rust, M., Barrows, F., Hardy, R., Lazur, A., Naughten, K., & Silverstein, J. 2011. The Future of Aquafeeds, NOAA/USDA Alternative Feeds Initiative, NOAA Technical Memorandum NMFS F/SPO-124, Retrieved on 11 Jul/16 from: Required (HI6025 ) T2, 2016 Marks
1) Structure & References 20
2) Management Summary/Abstract/Introduction 20
3) Discuss the steps that you need to consider before accepting to do an audit and apply them to BSF Ltd. 20
4) If the inherent risk of the BSF estimated as 90% and the control risk and detection risk are estimated at, respectively, 5% and 80%, should your audit firm accept the role of doing an audit of BSF Ltd.? (Discuss and Explain) 20
5) List and discuss what should be included in an audit program for the BSF Ltd. Your program should include general coverage plus the specific items covered above. 30
6) Discuss any concerns the auditor should have for the full set of journal entries of the R&D transactions from 2013 to 2016 (include the grant from CSIRO) and explain your decisions—especially how the CSIRO grant is treated.
Remember to check how the R&D costs are allocated between expenses and patent/capital. 30
7) In a triple-bottom line addendum (i.e. addition) to their GPFS, BSF Ltd. describe their research as being socially responsible and environmentally friendly. Are you willing to sign-off on that statement as being true and fair? (Explain and Support your answer with references to current and recent (e.g. last decade or so) research) 30
8) BSF Ltd. management asserted in a prospectus that the patent values were predicated on BSF Ltd. having exclusive control over the bacteria-based feeds technology.1 Are you willing to sign-off on that statement as being true and fair? (Explain and Support your answer with references to current and recent (e.g. last decade or so) research). 30

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