Whatever the amount ALUMEX paid to HEXP on this land purchase Will never ever increase the NA of ALUMEX. This is a arms length transaction where real movement of cash and property have effected between both the seller and buyer. ALUM didn't get the land for free for it to increase the NV.@Miss-Sangeetha wrote:@Rifanmoh wrote:Dear Sangeetha, it seems you don't understand how the accounting works. Why do you say NA of ALUMEX also will increase because of this transaction??@Miss-Sangeetha wrote:This is Hayleys internal transfer not performance wise gain or outside sale, through this transaction they can increase the net asset value of both ALUMEX PLC and HEXP in enlarged amount. Here they are increasing their own asset value themselves in their books of accounts through this transaction, this is mere mirage.@Teller wrote:Absolutely correct stock back, where is the Bartleet here. We couldn't see.
Think logically miss Sangeetha, I agree HAYleys owns around 65℅. So do you think they can play what ever they like? It's not like that.
Think based on accounting principles and Sri Lankan accounting standards.
No need to do much justification with you . You will see very soon HEXP above 120/_ levels.
If it doesn't happen I will not write in this forum. I know the secret here .
Reality will come sooner than later, similar to COCR prediction of above Rs.110/- share price now COCR trading at Rs53.50.
That is typing error, I mentioned the ALUMEX fixed asset / Land asset with inflated value determine by same directors or common directors in both sides (buyer and seller)
ALUM could have used Rs. 420 mn plus stampduty as cash/Borrowing or combination of both in order to settle the transaction. Think of simple double entry now.
In line with Hayleys Group accounting policy, If ALUM decides to maintain this aasset at revalued amount, then they will revalue the land every three year or every year to update the BS. This will result in revaluation surplus and therefore increase NA by a small amount. This can happen only from at the end of 2017/18.
HEXP have been holding this property in the B/S at cost value - the price they paid to buy the asset long time back. Now this profit is a real capital gain due to realisation of market value of the asset. There is no way you can say the price has been decided by BOD. The valuation has been done by independent valuer. In fact, they have been disclosing the market value of this property in every AR report in the past. Please download few of them and check.
Don't worry about common directors in HEXP and ALUM. It's ultimately directors of Hayleys who would have decided to execute this transaction.