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FINANCIAL CHRONICLE™ » EXPERT CHRONICLE™ » Touchwood Case Review

Touchwood Case Review

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Go down  Message [Page 3 of 16]

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Unofficial information that the expected Touchwood case against Sri Lanka Accounting and Auditing Standards Monitoring Board(SLAASMB) next hearing will be on 26th May 2011. Yes everyone looking the favorable outcome. Today, there are rumors that outcome will be favorable to the company and some brokers recommend to buy at current price. I could see some collection (about 820,000 shares) was made @ 23.60 levels.

I just did some research on the Touchwood Case. It looks like decision will be favorable to company. (This is not a promotion, just merely to getting your views. To be honest I do not have TWOD shares at the moment.)

We all know about the case related to the valuation of biological assets. I extracted some facts from SLAASMB website of case information to start from beginning.

The Sri Lanka Accounting and Auditing Standards Monitoring Board has determined that the estimates of fair value of biological assets used by Touchwood Investments Limited in its financial statements for the years ended 31 March 2005 and 31 March 2006 are clearly unreliable. The Company has also not been able to provide the Board with any other estimates which are reliable. Further, the method of valuation used for the year ended 31 March 2005 was not in accordance with International Accounting Standard, IAS 41 Agriculture, which the company has purportedly adopted.

As the company has purportedly adopted International Accounting Standard, IAS 41 Agriculture, the Board has concluded that the biological assets should have been valued at a value which approximates cost in accordance with paragraph 24 (b) of IAS 41 or at cost less accumulated impairment in accordance with paragraph 30 of IAS 41. Based on such valuation the company would not show a net profit for the relevant financial periods.

As the impact on the financial statements is substantial the Board has decided to refer the non-compliance to the Attorney General. The Board has also decided to investigate the compliance with auditing standards by the auditors in relation to the audit of the financial statements of the Company.

Based on the above information I can see in the absence of Sri Lanka Accounting Standards, company uses International Accounting Standards 41, Agriculture for the valuation of biological assets. But SLAASMB argument is that estimates of fair value of the biological assets in not accordance with IAS 41 and the financial statements are unreliable.

Further I have received BASL News Letter (Bar Association) of December 2010, there talked about some legal judgment (I attached the newsletter in our research forum http://research.srilankaequity.com/t96-touchwood-case-basl-bar-association-news-letter-judgement-views , refer page 4 for the Touchwood case). There they briefed about the case and given their views. Based on that, Board had not statutory power to challenge the valuation of the Petitioner on non compliance with IAS 41.

Further company received the Certificate of Compliance by the Institute of Chartered Accountants of Sri Lanka for the Annual Report Awards 2010. This certificates covers the CSR, Financial, Presentation and Compliance. Therefore, this reveals that the company practice in valuing biological assets in accordance with IAS 41 as the certificated awarded by ICASL which is the statutory for setting the Accounting Standards

Followings extract from Touchwood website

Certificate Of Compliance

January 24th 2011

We are proud to announce that our Sri Lankan office, Touchwood Investments PLC has been awarded the “CERTIFICATE OF COMPLIANCE” by the Institute of Chartered Accountants of Sri Lanka for the Annual Report Awards 2010 - at the ceremony held on 7th December 2010.

This award is granted by the Inst. of Chartered Accountants of Sri Lanka every year. They evaluate and grant awards in key areas such as - CSR, Financials, presentation, compliance, etc.

This certificate emphasizes that all requirements are being met in order for us to achieve our goals and serve our investors with industry leading standards.

For the year to come Touchwood Investments PLC has its goals set on the CSR awards to be handed out in the 2011 ceremony.

Thank you to all our accounting and administration staff who made the award possible.

http://www.touchwood.com/news/certificate-compliance

So Guys, Based on the above information and facts, to me the decision would be favorable to company. How do you all look into that..

Pls Share ur thoughts and views

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Post Sat May 28, 2011 4:44 pm by bmi

guys its our own money we should take the risk please think no money no honey brokers are brokers they must respect investors brokers have no knowledge they pretending they know everything all bullshit don't believe and depending on brokers and adviser what they say take your own decision win or loss we are happy with the experience of ours

Post Sat May 28, 2011 5:08 pm by bmi

but I didn't mentioned about Seyon we need him cheers Seyon

Post Sat May 28, 2011 5:12 pm by kasun333

cheers Seyon

Post Tue May 31, 2011 9:56 pm by Thushara

cheers seyon......EPS for the Year 11.52 and Net assets per share Rs 50.37. Currently trade at almost haft of it's NA. So there is a another possibly run. What do u think.

Slstock

Post Wed Jun 01, 2011 4:30 am by Slstock

@seyon wrote:
@seyon wrote:Who gave _ rep.. Pls tell me the reasons

I do not understand the members behavior

I just have done the research on this and Keep on updating my findings. I know there are people in this forum who might have earned profit in early run or who might have bought at high price. Unfortunately again the case has been put off to 18th July 2011, then the price was drop significantly, that is only reason i am updating the finding on TWOD and telling the people who bought at high price that not get panic and be Patience. Yes this will have other run after the financial released. I know the people who tried to pushed up the shares and booked some profit and last two days they are slowly collecting.

Further when i started to post regarding i did not have any single shares of Touchwood, even i did not trade during the run also. If u want to check my portfolio ( It is in Acuity Stockbrokers) I will give my CDS a/c personally.

Now i decided I will not be doing any posting in this forum hereafter, i going to be only the visitor.

Thanks guys for ur all support.

Happy Trading.

Seyon, do not get discouraged. Sometimes I too feel when some give negative reps they are more emotional than constructive. I found the way you presented this as genuine and as a finding which is very helpful ( though I don't have any TWOD also within last 9 months).

It is good if there is system to give a reason for negative reps ( comment next to reps. Maybe it can be anonymous ).

avatar

Post Wed Jun 01, 2011 4:20 pm by seyon


Thanks u all for ur support.

My humble request is if u have ( whoever giving Negative rep) any different views pls come and spell out in words rather blindly giving the neg rep.

This is a good platform to sharing our views, don't discourage anyone.

Thanks

avatar

Post Wed Jun 01, 2011 5:42 pm by seyon

This post is not for promoting the share, there are members who interested in financial statement. I just have done the analysis

Let us look at the financial statement as of 31.03.2011

Revenue - Rs.1,589,740,889 out of that Gain Arising from Changes in Fair Value of Biological Assets Rs.1,327,423,575 ( different between the value of biological assets of 2010 & 2011) then the balance of Rs.262,317,314 reporting for Plantation Establishment and Maintenance Income and commission income, which is realized income.

Looking the Revenue,Provision for Purchase Back Guarantee,Fair value of the biological assets and the pattern of each financial stream between the 1st six months to second six months indicates that some of their plantation are in the matured stage ( Agarwood Plantation). Hence the coming quarter we might see the actual return/ fair value from the harvest from these plantation. This will boost the company profit and the cash flow.

Net assets is very much attractive reporting Rs.50, 50% discount to the current Mkt value

Further we can see 385Mn ( from the right issue) cash equivalent is yet to be used for the future investment, As i mentioned company is looking to invest in Bamboo Processing Plant in June 2011

Picked From Newsletter

construction of a series of large-scale, multimilliondollar
processing plants – including a 30,000-square-foot
manufacturing plant and a 15,000-square-foot processing
plant, both located in Sri Lanka and set to open their doors for
production in June 2011 (please see photos on this page). In
Thailand the construction of a further plant is also on the way.


Our expected case against SLAASMB postponed to 18th July 2011

The said Supreme Court Case No SPL LA 42/10 had been postponed on numerous occasions and finally it is fixed for hearing on the 18th of July 2011.

Happy Trading

TuskerLK

Post Wed Jun 01, 2011 7:25 pm by TuskerLK

@seyon wrote:
Thanks u all for ur support.

My humble request is if u have ( whoever giving Negative rep) any different views pls come and spell out in words rather blindly giving the neg rep.

This is a good platform to sharing our views, don't discourage anyone.

Thanks


Exactly seyon, If we make a correction to what we posted here, we are required to give the reason for such edit, whilst the reps are given away anonymously without any reasoning.

Admin, Shed some light on this.

Rocky

Post Wed Jun 01, 2011 10:12 pm by Rocky

So finally are we to conclude that there will be a good run on this share until the court case is finalized on 18/07/2011?

Looks like the profits have been toned down by the management for some reason or another as a huge provision for expenses has been made. I am not sure that the final audited accounts might be better after the court case.

Better to hold on to these shares a little longer to get the best benefit. Those who bought cheap may dispose of them if they got their desired profit.

I will wait the full term as I have bought plenty of this share.
Worth waiting some more.

mono

Post Wed Jun 01, 2011 10:24 pm by mono

hybrid_OS wrote:So finally are we to conclude that there will be a good run on this share until the court case is finalized on 18/07/2011?

Looks like the profits have been toned down by the management for some reason or another as a huge provision for expenses has been made. I am not sure that the final audited accounts might be better after the court case.

Profits have gone up from 331mn to 426mn.

TuskerLK

Post Wed Jun 01, 2011 10:31 pm by TuskerLK

@mono wrote:
hybrid_OS wrote:So finally are we to conclude that there will be a good run on this share until the court case is finalized on 18/07/2011?

Looks like the profits have been toned down by the management for some reason or another as a huge provision for expenses has been made. I am not sure that the final audited accounts might be better after the court case.

Profits have gone up from 331mn to 426mn.

Then how come the EPS gone up from 4 rupees to 11 rupees ( I couldn't dig into the reports)

avatar

Post Wed Jun 01, 2011 11:07 pm by Fresher

tinyman - there was a 1:1 rights issue anda 4:1 subdiision last year.

EPS of 4.68 is the earnings adjusted to the present no. of shares (71mil)
EPS of 11.52 as I understood should hav been calculated with the weighted average no. of shares

btw, is that kumar sangakkara in that top20 list?

Monster

Post Wed Jun 01, 2011 11:20 pm by Monster

npp wrote:tinyman - there was a 1:1 rights issue anda 4:1 subdiision last year.

EPS of 4.68 is the earnings adjusted to the present no. of shares (71mil)
EPS of 11.52 as I understood should hav been calculated with the weighted average no. of shares

btw, is that kumar sangakkara in that top20 list?
Interesting, it seems Kumar Chokshanada Sangakkara is in the top 20 share holder list

Chabbi

Post Wed Jun 01, 2011 11:22 pm by Chabbi

@Monster wrote:
npp wrote:tinyman - there was a 1:1 rights issue anda 4:1 subdiision last year.

EPS of 4.68 is the earnings adjusted to the present no. of shares (71mil)
EPS of 11.52 as I understood should hav been calculated with the weighted average no. of shares

btw, is that kumar sangakkara in that top20 list?
Interesting, it seems Kumar Chokshanada Sangakkara is in the top 20 share holder list

Yesterday night i also noticed Very Happy

may be from IPL money Very Happy

npc86

Post Wed Jun 01, 2011 11:54 pm by npc86

npp wrote:
btw, is that kumar sangakkara in that top20 list?

He has selected nice investment...!

jocolor

Rocky

Post Thu Jun 02, 2011 5:51 am by Rocky

@npc86 wrote:
npp wrote:
btw, is that kumar sangakkara in that top20 list?

He has selected nice investment...!

jocolor


Hope this investment is not dead wood or dry rot does not effect it. certainly not.
What I meant about "Toned down profits" is that the profits should have been higher than which were declared. The profits have increased.

These Accountants and the Management really misguide the public. See what CSEC did.


rijayasooriya

Post Thu Jun 02, 2011 1:58 pm by rijayasooriya

hybrid_OS wrote:
@npc86 wrote:
npp wrote:
btw, is that kumar sangakkara in that top20 list?

He has selected nice investment...!

jocolor


Hope this investment is not dead wood or dry rot does not effect it. certainly not.
What I meant about "Toned down profits" is that the profits should have been higher than which were declared. The profits have increased.

These Accountants and the Management really misguide the public. See what CSEC did.


Please misguid us in the way of increasing the price of share....I have stucked in this share for last eight months and have already lost lot of money.

avatar

Post Thu Jun 02, 2011 3:25 pm by seyon

@rijayasooriya wrote:
hybrid_OS wrote:
@npc86 wrote:
npp wrote:
btw, is that kumar sangakkara in that top20 list?

He has selected nice investment...!

jocolor


Hope this investment is not dead wood or dry rot does not effect it. certainly not.
What I meant about "Toned down profits" is that the profits should have been higher than which were declared. The profits have increased.

These Accountants and the Management really misguide the public. See what CSEC did.


Please misguid us in the way of increasing the price of share....I have stucked in this share for last eight months and have already lost lot of money.

I do not give any recommendation to buy or sell shares, Just i have done some research on TWOD and posted here, I do not have any single share since from last year.

avatar

Post Fri Jun 03, 2011 1:07 pm by seyon

Today the Touchwood is slowly collected @ Rs.27.. The next rally is about to start from land and property sector

stumpy

Post Fri Jun 03, 2011 2:47 pm by stumpy

How do you know that brother!

Even I did Razz

But I don't believe in rallies, pure technicals at work Very Happy

Chabbi

Post Fri Jun 03, 2011 6:58 pm by Chabbi

@stumpy wrote:How do you know that brother!

Even I did Razz

But I don't believe in rallies, pure technicals at work Very Happy

U knw mate i do both whn doing buying i luk @ Tech & rally Smile

but i think rally r better thn tech ... two days back... there was buying signal from CFT day befor yesterday ... i juss refer Bolinger band thr was signal ...so i bought.. but aftr tht it start to collapse.. unfortunately i bought thm on credit ... monday wanna take decision .... sell on loss or paying thm Sad

in BB it touched lower band too ......... Sad y this kind of things happens ??

avatar

Post Fri Jun 03, 2011 7:06 pm by JennyFunny

yea i have a feeling rally is coming sometime next week..technicals also looking good..

stumpy

Post Fri Jun 03, 2011 7:27 pm by stumpy

@Chabbi: Chk out ur PM Wink

avatar

Post Fri Jun 03, 2011 11:25 pm by seyon

@Chabbi wrote:
@stumpy wrote:How do you know that brother!

Even I did Razz

But I don't believe in rallies, pure technicals at work Very Happy

U knw mate i do both whn doing buying i luk @ Tech & rally Smile

but i think rally r better thn tech ... two days back... there was buying signal from CFT day befor yesterday ... i juss refer Bolinger band thr was signal ...so i bought.. but aftr tht it start to collapse.. unfortunately i bought thm on credit ... monday wanna take decision .... sell on loss or paying thm Sad

in BB it touched lower band too ......... Sad y this kind of things happens ??

Yes these kind speculative stocks ( even most of the stocks in CSE) are in the hand of some persons who only decide the buying signal and selling signal, not technical analysis.

Chabbi

Post Sun Jun 05, 2011 12:11 am by Chabbi

@seyon wrote:
@Chabbi wrote:
@stumpy wrote:How do you know that brother!

Even I did Razz

But I don't believe in rallies, pure technicals at work Very Happy

U knw mate i do both whn doing buying i luk @ Tech & rally Smile

but i think rally r better thn tech ... two days back... there was buying signal from CFT day befor yesterday ... i juss refer Bolinger band thr was signal ...so i bought.. but aftr tht it start to collapse.. unfortunately i bought thm on credit ... monday wanna take decision .... sell on loss or paying thm Sad

in BB it touched lower band too ......... Sad y this kind of things happens ??

Yes these kind speculative stocks ( even most of the stocks in CSE) are in the hand of some persons who only decide the buying signal and selling signal, not technical analysis.

Yeah seyon Smile ur correct Smile

@ Stumpy ...... Thnx alot mate Smile Ur very much helpful Very Happy

prabuddaka

Post Tue Jun 14, 2011 7:14 pm by prabuddaka

These articles and reviews are very much suitable who are thinking about TWOD now.

avatar

Post Tue Jun 14, 2011 10:52 pm by kam2011

@seyon wrote:
@Chabbi wrote:
@stumpy wrote:How do you know that brother!

Even I did Razz

But I don't believe in rallies, pure technicals at work Very Happy

U knw mate i do both whn doing buying i luk @ Tech & rally Smile

but i think rally r better thn tech ... two days back... there was buying signal from CFT day befor yesterday ... i juss refer Bolinger band thr was signal ...so i bought.. but aftr tht it start to collapse.. unfortunately i bought thm on credit ... monday wanna take decision .... sell on loss or paying thm Sad

in BB it touched lower band too ......... Sad y this kind of things happens ??
Yes these kind speculative stocks ( even most of the stocks in CSE) are in the hand of some persons who only decide the buying signal and selling signal, not technical analysis.

Yes. We have to be alert on all other factors exept for fundamentals these days.It is wonderful. But that is the btruth.

avatar

Post Tue Jul 05, 2011 7:52 pm by rizjiji

TWOD price going up is unavoidable due to the court case on 18th July. ( We've gotten used to this pattern now.) But at what point will it stop? What is the maximum price you'll pay to buy a TWOD share?

MarketResearch

Post Tue Jul 05, 2011 8:00 pm by MarketResearch

@rizjiji wrote:TWOD price going up is unavoidable due to the court case on 18th July. ( We've gotten used to this pattern now.) But at what point will it stop? What is the maximum price you'll pay to buy a TWOD share?

Until this Court case finishes we can not trust TWOD.

this court case like "kamalakka innakan apita pol kanna wenne ne" kathawa wage

Court case eka tiyena kan TWOD no chance.

avatar

Post Tue Jul 05, 2011 8:26 pm by rizjiji

@MarketResearch wrote:
@rizjiji wrote:TWOD price going up is unavoidable due to the court case on 18th July. ( We've gotten used to this pattern now.) But at what point will it stop? What is the maximum price you'll pay to buy a TWOD share?

Until this Court case finishes we can not trust TWOD.

this court case like "kamalakka innakan apita pol kanna wenne ne" kathawa wage

Court case eka tiyena kan TWOD no chance.

Very true... But we are almost certain (BASED ON HISTORICAL EVENTS) that the prices would go up at-least temporarily. So are you suggesting that we should ignore and not maximize this opportunity.

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