Southern Acids seeks more info on forex losses, contracts

Totally unreal to read such corporate developments!

On the Edge.

• Update Southern Acids seeks more info on forex losses, contracts
  Written by Financial Daily
  Thursday, 02 April 2009 00:41
  
  KUALA LUMPUR: Southern Acids (M) Bhd has been unable to issue its quarterly report for the period ended Jan 31, 2009 due to “insufficient information and explanation to the board in respect of the foreign exchange losses and contracts”.
  
  The company told Bursa Malaysia on April 1 its board expected the report to be issued on April 14 to allow an “independent review of the company’s exposure on the foreign exchange contracts”.
  
  Apart from a healthcare division, the group is mainly involved in plantations and manufacturing of oleochemicals.
  
  In the notes accompanying its results for its second quarter ended Oct 31, 2008 (2QFY09), Southern Acids said the group had entered into forward forex contracts to limit the exposure to potential changes in foreign currency exchange rates with respect to its foreign currency denominated estimated receipts.
  
  It said total off balance sheet forward forex sales contracts outstanding as at Dec 17, in ringgit equivalent, was RM3.43 million, and maturing from December 2008 to February 2009.
  
  “There is minimal credit risk because these contracts were entered into with a reputable bank. All gains and losses arising from forward foreign exchange contracts are dealt with through the income statements upon maturity,” it had said.
  
  Southern Acids had earlier announced that such off balance sheet forward forex sales contracts outstanding as at Sept 26, 2008 in ringgit equivalent was RM669,098, maturing between October and November 2008.
  
  In a separate development, the provisional liquidator of Banting Hock Hin Estate Company Sdn Bhd had last Friday requisitioned to convene an EGM for the proposed removal of Southern Acids non-executive chairman Yap Soon Nam and independent director Mohd Hashim Harun.
  
  It proposed the appointment of Lee Peng Ling, Wong Yien Kim and Jonathan Law Ngee Song to the board.
  
  Appointed to the board on Aug 10, 2005, Yap was previously also called upon by the Cabinet and Treasury to advise on the takeover and restructuring of highway concessionaire Metramac Sdn Bhd.
  
  Southern Acids is majority owned by the Low family, led by executive director Low Mong Chai @ Low Ah Kow, who held an indirect stake of 56.07% of the company as at Sept 15, 2008.
  
  Mong Chai is the brother of the late Datuk Mong Hua @ Low Mong Hua, the group’s co-founder and former executive chairman and managing director who died on April 13, 2008.
  
  The group reported a net loss of RM5.17 million for 2QFY09 versus a net profit of RM12.08 million a year earlier.
  
  For the six months to Oct 31, 2008, its net profit was halved to RM10.72 million from RM21.06 million a year earlier, while revenue rose 16% to RM272.43 million from RM235.54 million. No dividend was declared for the current financial year ending April 30, 2009.
  
  The company released only the consoldiated income statement, but not its balance sheet and cash flow statements.
  
  As at Oct 31, 2008, it had investments in quoted securities totalling RM20.45 million at cost, RM15.33 million at carrying value and RM16.71 million at market value. It had short-term and long-term borrowings of US$1.86 million (RM6.62 million) and US$406,000 (RM1.45 million), respectively. Southern Acids has a paid-up capital of 136.93 million shares of RM1 each.