Revenue Recognition - CO2 Group

Having a bit of interest in the sustainability business world, I've been looking at the Annual Report of Co2 Group, Australia's largest Carbon Offset provider (and one of the few that are listed).
One thing I have been curious about is how they have been recording increased revenues in their Statement of Financial Performance but the cash flows from the cash flow statement haven't quite been meeting up. Specifically, how in the last year, their operating cash flow/Net income ratio was below 1.
Based on my CFA Level 1 studies, this is usually a sign of aggressive accounting policies and/or earnings manipulation. Now, I am not about to accuse CO2 of that, but I delved a little deeper into the 2011 annual report and found these two items in the notes

(ii) Project revenue

Carbon sink project revenue is recognised in proportion to
the work performed in relation to the product development
and the various stages of completion of the carbon sinks.
Work performed that has not been invoiced is recognised
as revenue and the balance is held as accrued income.
If payment has been received in excess of the stage of
completion of the project, the liability is recognised in
deferred income.

Now I read this as all project revenue (actual, accrued and received in advance) is fed straight into Revenue and that which is accured/recieved in advance is also added to the Balance sheet accounts. This seems to match up with the Indirect Method of the Cash Flow statement (which is also included in the annual report), which adds the increase in "Other Liabilities" to Net Income to come up with the operating cash flow.

Also, the proportion of the amount that is defined as deferred/accrued seems to be based (in part) on Management discretion. As shown by the next note :-

"Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
i) Revenue recognition
The Group’s policy for recognising revenue from Carbon Sequestration Plantation Services is based on management’s estimation of the stage of completion for these projects by reference to costs incurred compared to total estimated costs at completion. As at 30 September 2011, the Group has recognised $606,258 (2010: $479,849) as accrued income and
$14,270,346 (2010: $12,256,820) as deferred income as a result of the application of this policy."

Now when Project Revenues make up approx 59% of Revenues and 71% of Gross Profits, this is a fairly important factor governing profitability and could explain why the cash flows are marketly different to Net Income. It would be good if there was a little more visibility regarding this, as a more conservative interpretation of this (Revenue only recognised when % completed, rather than immediately) would give Co2 Group a very different outlook.