Got an extremely good reply from Richard Cranium on the posting A Deeper Look At Kenmark Losses
- How about this for a theory?
1. They "moved" all the stocks to a friendly or a shell company, accounting for a significant rise in receivables.
2. The sales figures subsequently dropped as there is no more inventory due to (1).
It would be interesting to see where the stock went to i.e. which distributors/retailers has the largest intake. Won't surprise me if these are in China or place far away from Malaysian law.
Just a hunch,
That's a pretty interesting theory or hunch. :D
Let me reuse the same frame as what I had posted earlier and put the focus on Sales, Inventory and TRADE PAYABLES.
I put in trade payables because sometimes sales do not come directly from a company's inventory. Meaning to say, sometimes a company could buy a product from another source and then re-sell that product.
The recent earnings again...
Feb 2010: Quarterly rpt on consolidated results for the financial period ended 31/12/2009
2009 Q3
Sales 101.441 million Net Profit 4.769 million Inventory 22.847 million Trade Payables 106.347 million.
Nov 2009: Quarterly rpt on consolidated results for the financial period ended 30/9/2009
2009 Q2
Sales 35.334 million Net Profit 3.718 million Inventory 28.241 million Trade Payabales 103.577 million.
Aug 2009: Quarterly rpt on consolidated results for the financial period ended 30/6/2009
2009 Q1
Sales 57.686 million Net Profit 1.013 million Inventory 38.687 million. Trade Payables 63.958 million!
(Moolah: OMIGOOOOOOSH! Jackpot!
Compare the inventory in this quarter versus what was reported on Nov 2009! See how inventory declined from 38.687 million to 28.241 million the next quarter. See how Trade payables soared from 63.958 million to 103.557 million!
How could the payables jumped so high? Sales this quarter was only 57.686 million and the next quarter sales plunged to 35.334 million???!!!! And payables increased by 39.599 million!
Questionable issue or what??? )
May 2009: Quarterly rpt on consolidated results for the financial period ended 31/3/2009
2008 Q4
Sales 38.775 million Net LOSS 0.084 million Inventory 30.853 million Trade payables 34.310 million!
(Moolah: WOW!
Trade payables in Q4 was only 34.310 million. The next quarter it was 63.958 million. And the next quarter it was 103.557 million. And the next quarter 106.347 million!!!!!!!!!!!!
Holy cow!!!)
And the following was from last night:
Last night, June 2010:
2009 Q4
Sales 18.762 million Net LOSS: 146.552 million Inventory 20.104 million Trade payables 83.958 million!!!!
WOW!
Exactly!
When one views the inventory and trade payables together, it paints one new ugly picture altogether!!!!
How now brown cow?????
Tell me if this is not sheer financial shenanigans!
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12 comments:
Mr Moolah, you hit jackpot. Maybe Bursa or SC should appoint you to their team of accounting forensics.
You'd make an excellent investigator.
If Moo Moo were appointed enforcer earlier, none of this nonsense would have happened in the first place. Imagine these people try this type of scam in Singapore.I am sure they would get instant gratification.
it sounds more likely another englotech case.
No further action required by SC.
ryan: you think it is right that SC not to take action?
you think given the size of the losses, Kenmark did not bother to state exactly how much was the size of the provision of bad debts?
:/
Megan 2. What the hecks are the Finance guys doing? The auditors and bankers are too naive also?
Kenmark's reply:
--------------
With reference to Bursa Malaysia Berhad’s letter dated 8 June 2010, the Board of Directors of Kenmark wish to provide the following information as requested and the numbering in this announcement is consistent with the numbering in the query letter:
1. The breakdown of the administrative expenses of RM141.6 million is as per Appendix A attached and the debt analysis is attached.
2. For the financial year ended 31 March 2010, the Company’s policy in provision for doubtful debts is as follows:
10% provision on debts that are 9-12 months
100% provision on debts that are above 12 months
The credit period granted to the debtors is 180 days and the receivables are mostly trade in nature for products supplied.
The previous year policy on receivables was to carry receivables at anticipated realizable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date.
The Directors will endeavour to collect the outstanding debts but at this juncture is unable to give a timeline as to when the debts can be collected until they have more information on the debtors.
3. On the steps to recover the receivables, the Management has been instructed to collate all the documents that are available in the Company’s premises to proceed with the collection.
4. The details of the impairment charges on the property, plant and equipment are as per Appendix A attached.
Full impairment has been made on the net book value as at 31 March 2010 on the idle assets in accordance with accounting standards whilst a general 10% impairment provision has been made on assets that may not be fully utilized due to the current interruption of business
5. There are no write down on inventories.
6. The Board has requested the Management to prepare a weekly cashflow projection to enable the Board to ascertain the funding requirements. The Board has also been in discussion with the principal bankers on the current facilities to ensure that the Company can continue to operate as a going-concern
It is obvious that the crooks who planned and executed this alleged crime is of the view SC or the authorities lack the means & the will to prosecute the wrong doers. Or that the SC personnel are a bunch of pussies.
Cheers Moolah, jackpot indeed.
You are good man. Why arent you working in the SC? :|
Ronnie,
Moolah indeed is a wise man. If it is so, I think it is unwise for him to be there??
The Moo cow enjoys fresh air outside, can u within?
Moola: by looking at englotech case and the way it ended, i can only see SC is weak and letting ppl down.
solomon: ya.. loved the fresh air. :P
ryan: thanks for your explanation. :D
Just for your information, I did highlight the issue on Englotech way back in Sep 2007.
For reference: http://whereiszemoola.blogspot.com/2007/09/englotechs-trade-receivables.html
And subsequent postings can be followed here: http://whereiszemoola.blogspot.com/search/label/Englotech
And yes.. I do agree with you. Far too many worthless companies being listed on Bursa and one of the reason I had argued before is the fact that Bursa itself is a business entity and because it's a business entity, one of its goals is more profits and one of the way it can achieve this goal is via more listings. And sadly, as we all know, once the target is on QUANTITY, QUALITY do get compromised.
:(
Why nobody speak of kenmark's internal auditor? Messrs e-resources consulting sdn bhd. They outsourced it right.
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