Posted by: donmihaihai | May 3, 2014

3 years later.

Got into Haw Par Corporation three years ago base on this

At $6.00, return from operating businesses will be around 3%, assuming return from UIC and UOL to be 7% of their equity while UOB at 10% then return on will be at the range of 13% to 15%. The businesses in Haw Par Corp include outstanding businesses like Tiger Balm and Underwater World that have problem growing and average businesses in bank and property that has all kind of opportunities to grow.

Three years later, the weather is good so let me try to figure out what is the fair value of Haw Par Corporation.

UOB NBV @ 31/12/13 = 15.36
No. of shares = 67,952,169
1.8X NBV = 27.43
Total value = 1,863,929,995

UIC NBV @ 13/12/13 = 3.61
No. of shares = 67,558,000
1X NBV = 3.61
Total value = 243,884,380

UOL NBV @ 13/12/13 = 8.77
No. of shares = 41,428,805
1X NBV = 8.77
Total value = 363,330,620

Hua Han Bio
Total value as per BV at Haw Par = 115,845,000

Investment Properties
@ full value = 222,139,000

Healthcare products
@ 15X PBT = 388,000,000

3.5M X 5 years = 17,500,000

Cash plus deferred tax liabilities less 50M for operations and 40M for dividends

Total Value of Haw Par
= 1,864 + 244 + 363 + 116 + 222 + 388 + 18 + 172
= 3,387 M
Total no. of shares – 218,697,173
Per share = $15.49

No trick here. Getting $15.49 just by putting up some fair but not excessive valuation on these stocks. Call it sum of the parts method if you want. Is using NBV for UIC and UOL aggressive? Don’t think so. Neither do I think using 1.8X NBV for UOB is aggressive too. And with UOB making up more than 50% of the total valuation it is worthwhile to think what is the real valuation of UOB.

Really doubt that Haw Par Corporation will trade at $15 but well it has always been in stealth mode. Not just under radar stock but Haw Par is a stealth growth stock as well. Like company like that.

Posted by: donmihaihai | April 13, 2014

Selling and the outlook is bad for a lazy person

LHT Holdings Limited.

100% sold.

Reasons for purchase were simple. LHT Holdings Limited was a cigar butt approach. The company is recovering from a long down turn and is beginning to invest in their business after lacking for years. Should sell earlier but got catch up by the improving of their numbers. Nevertheless, LHT Holdings Limited is my best cigar butt with a gain of about 100% in 3 years.

ARA Asset Management

99% Sold.

Left with some odd lot and going to dump them aside for annual report.

ARA is changing. Just when more and more bees are surrounding ARA, the company is getting more and more risky. In short the seek for growth is putting this company into lot of risk. Would love ARA that is growing at a single digit.


90% sold.

What is ride! Started reading Sarin when share price dropped below $1 after a very good IPO. First purchase made around $0.60 and last purchase below $0.30 during crisis. Share price did not stop dropping until just below $0.10. Now Sarine is trading at around $2.50 post bonus issue. From a paper lost of >80% to a multi baggers.

What change in the business? Of course Sarine is getting more recurring income but recurring or not, this company is still a big fish in a small pond and look like it is getting a little bigger than before.

Still like the company but not share price.

Straco Corporation

Sold some.

Business is still the same but valuation is getting rich.

Outlook is bad because the price is rich and the pool of companies I am looking at is small because I am lazy. Selling some of the best companies I ever owned is telling because it is almost certain that there isn’t any chance of buying them soon. They are the angels flying high in the sky. I don’t buy angel. I buy throw away.

I see many angels up in the sky. I see throw away too but their businesses are not as good. I must throw away my laziness and start looking at company that are neither angel or throw away. They might be the next throw away and some of them have better businesses.

Posted by: donmihaihai | March 15, 2014

Once a blue moon on HongKong Land Holdings Limited

HongKong Land is the largest property company (including REIT) listed in SGX in term of market capitalisation, total assets and Net Asset Value. A well run property part of Jardine Matheson group that does not keep hitting the news maybe because there is basically no hot “news” for the media or chasing investors.

Getting to know HongKong Land is easy.

Property is about location? Well it has a “to die for” of 12 prime commercial properties and a luxury hotel in Central, Hong Kong. These are carried at about US$22 billion on the B/S. In Singapore, HongKong Land has 1/3 interest in ORQ, MBFC and full interest in ORL. MBFC is the new CBD area of Singapore and ORQ is right beside it and even ORL is circling the new CBD area too. It goes without saying these are grade A again. It is unlikely that HongKong Land is able to replicate these commercial properties in the two countries easily. Hopefully I am wrong. Beside these two financial centres, HongKong Land is in Jakarta, Bangkok, Hanoi, Macau, China and Phnon Penh. It is trying to develop prime commercial properties in the CBD areas of these. Is HongKong Land getting the location right? I don’t know but they are in better position to know.

Is Residential development about land banking? I don’t know. Maybe Quek Land bank will know. But a manufacturer will reduce or stop producing product when there is excess in the market and when the cost is low, margin will be huge. HongKong Land is doing pretty well in Singapore on residential properties through MCL Land and trying to establish itself in certain cities in China. And yes, it has a “to die for” land bank too, especially in China. It is doing developments in Indonesia and Philippines too but too early to say these are one off or trying to be a developer in these countries.

Lastly, it has a “to die for” B/S. Not just about low debts how debts is being managed.

What is bad about HongKong Land?

Its “crown Jewel”. Those US$22 billion of commercial properties. No not that I am worry about the capitalisation rates are too low. It is just too big, all new developments in Jakarta, China and Phnon Penh will hardly move the needle plus it is at the end of a huge property cycle for many countries which mean growth will be slow.

And this is what I like about the management. I might be wrong. Facing the situation of having huge “crown jewel” with little debts will lead most management to go out shopping like crazy. Targeting certain percentage of properties from which country or which segment by certain year. Sound familiar? This is what many are doing but not HongKong Land as far as I am tell. It is using its “crown jewel” to plant more “crown jewel”. Certain percentage is a result not a target. Only gear up when there is a need not to target a certain level of gearing.

Question. What will happen if HongKong Land decided to be like majority? Spending 10 to 20 billion on shopping trips. i.e. gear up.

Lastly will be the question most will ask. REIT and recycle capital, will HongKong Land do it? I don’t know and I don’t think it will. And I am not a fan of REIT and recycle capital. It only make sense if that is a lousy asset and the timing must be right. Which management will tell you that they are a lousy stock operator or property operator? As far as I can see, companies doing recycling of capital is not doing as well as the others. Check the numbers and you will be surprise.

Posted by: donmihaihai | April 15, 2013

Straco – Annual report and QUESTIONS

I am a lazy person. Usually I don’t use a pen to take down note or spreadsheet for all kind of computation while reading annual report. Reading annual report is an easy task. Usually the number just flow so do the story unless I am reading a complicated company.

If I have to pick up a pen, something is wrong. This year the candidate is Straco.


Straco is doing more of the same thing as last year. Things that I don’t like regardless of their business. It is not that the business is doing extraordinary well. It is doing well enough. Maybe it is because of being well enough which is why maybe money is leaking away from backdoor.

Anyway share price is moving upward, bees are crowding Straco. Straco is at best maybe trading at fair value. A simple question like how much money can the company generates from two aquariums with remaining lease period of 22 to 25 years. And what is the history of China government allowing extension or grant of new lease with little cost? And what is the cost of re-building aquariums of the same size in the future. Go bees, I am counting on you.

Dividends to NCI

Dividends in Cashflows statement does not tie with Statement of changes in equity. Why?

Office like Palace?

Majority of Capex was spend in Office  for last two years. Those were in China because Singapore office is getting poorer. What are these for? Is Straco adding staffs like crazy or the royal family is working in royal office.

Fishes and marine livestock

Are they super fishes? Addition is minimum and disposal is non existent.

Impairment in subsidiary, Construction in progress, unutilised tax losses and disposal of land use right

Relating to Chao Yuan Ge Development? Still unknown currently?

Other receivables

Because of accrued interest income? If not then there is a problem

Stock options

Board target is for employees of the Straco to hold up to 10% of the company by 2018. Who are these employees? 38% and 18% of all options granted went to Royal family and its gang and Royal family respectively. Shares purchased is good only when all shareholders get the benefit not when money is flowing to the small inner group.

A short post. Will talk down other companies soon.

Posted by: donmihaihai | January 1, 2013

Market, activities and comments

STI returned almost 20% in 2012. It was good. Surprise? Depend on who you are asking. But as I am writing this, something hit me that headline news, especially during year end, done lot of bad to ‘investor’ than they realised, maybe more so to so call asset allocator.


It should be called a year of inactivity(is there such a word?)

For Unit Trust using CPF money, I had done what many will deem as horror. Made few purchases of Europe and Japan as markets dipped before September. Small amounts, wanted to buy more but despite having loads of horrible news, markets refused to move. Here lay another ‘investor’ caged by market news.

In 2013, my thinking is to slowly sell off my Thailand UT if current market momentum continues and Eastspring Investments Global Basics Fund as it really disappointing. For purchase? I have no idea.

In stock investing, other than purchasing a small stake in Willas-Array Electronics (Holdings) Limited and lucky gotten a 10% dividend (joining the hip of dividend investment), my activity was basically zero. Willas Array belong to what I call trading company and base on past results(11 years), its ROE was about 10%, dividend payout and so call free cash flow was about 4.5 to 5%. At 0.5XBV it becomes 20% and 9 to 10%. Pretty good for an average business. I am not worry about it leverage as it is tied with business volume but shout to me when there is a trend of increasing borrowing without the same increase in sale volume. Anyway this is a business of scale, market reach and inventories management.

Purchased quite a few trading and distributing companies in the last few years. There are Asia Enterprise, YHI International, Willas-Array Electronics and even LHT. There are average businesses while management varies. The return from holding to them is mixed or rather I should say poor which is why I am still holding on to them. They are still being disliked by the market. This is the place I like to search to stock.

Sometime back in 2nd half of 2011, property stock was dumped. Unlike smallish trading and distributing segment, property is a heavyweight in the exchange. I remember I could walk in and purchase stock like Hong Kong Land, UOL, SingLand, Hotel properties, SC Global, Wing Tai, etc at price which I call cheap. I did and rewarded with return from Hong Kong Land, SC Global and somehow Wheelock Properties. The reward is one of the fastest.

What next? Other than looking for quality company in quality industry managed by good management the place to look for is still throwaway. Genting might be interesting because it has lost money for many people. Shipping(other than offshore) might be even better because these companies are not talking about how much profit they generated, they are trying not to goes down.

Posted by: donmihaihai | June 9, 2012

The elephant of CH Offshore

I have not been doing this for a long time,that is to say beware of “that company”. Something is wrong with that company.

This time “That company” is CH Offshore. CH Offshore is having problem of collecting money from a major customer and is forecoming in reporting. It is hard to miss this elephant in the room even if CH Offshore is not commenting on it while reading their quarter reports.

How big is that Elephant? Trade receivables as at 3Q2012 was about US$31M while revenues for 9mth2012 was about US$39M. About 2 years back, trade receivables stood at US$9M with Revenues of US$69M. Do the math, it is simple.

CH Offshore is not a popular stock, but I do see some are going after its clean B/S with load of cash. But what are you doing by not noticing the elephant in the room or rather focusing on the wrong thing. Anyway I have nothing to add on this.

But it is interesting to think about why CH Offshore is having problem with their receivables. That is charterer rate, contract and cyclical nature of the industry.
An offshore vessel has a lifespan of about 25 years.
Offshore industry has a long cycle which mean each vessel has the chance of securing one cycle of good charter rate, I think the maximum are 2 cycles.
Having long term contract at above market rate is good but like buying market bottom, it is only after that we know the rate is good. Still remember the party where the fashion was annoucing how big is the contract and how long is the duration. Where are they now?
The problem CH Offshore is facing look precisely CH Offshore locked in super good rate and their customer is having problem paying at that rate. With that CH Offshore is facing the problem of walking away from the contract or continue.

I continue to be interested in shipping industry. The story of Loews Corporation investment in Diamond Offshore continue to inspire me.

Focus on the right thing.

Posted by: donmihaihai | April 28, 2012

It is all about money

Teh Hooi Ling from BT wrote a good article call ” Pay attention to executive salary plan”.

I think Chairman of Hersing Corporation Harry Chua is expensive but while it is hard to measure, that is the pay for performance and shareholder value he created.

Two Lees of Asia Enterprise is expensive too. But I can still tahan it by saying pay for performance and consistent.

Just when I noticed that the big Lim family of Chip Eng Seng is super good at sharing the available profit, Teh Hooi Ling pointed out an even better player – Hong Fok Corporation.

After a quick look at Hong Fok Corporation, I noticed more than what is printed on the article and missing information in their annual report. I am interested in Shareholding structure, acquisition and disposal and interested person transaction. Add in share option and performance shares for some company. You hear me, Straco Corporation!

Anyway it is all about money.
Let say I own and run a private company(100%) and how should I pay myself yearly? I will pay attention to tax. I will do the best to minimise corporate and personal tax as a whole. If I have a big family, I will do the same for them, divide the pie.
What about if I own and run a public listed company? If it is all about money, the first thing is to know what the percentage of my ownership is. If I own 20% of the company, I get only 20% of declared dividends as there are lots of other shareholders. Why do I want to share with them? If I don’t want to share with them, what can I do? What will you do if you are Cheongs and Lims? Write it down and look for them in the annual report.

Lastly, I will never invest in Hong Fok Corporation as a listed company. Unfortunately as a shareholder in private company? If I am rich enough, I will seek legal way – oppression.

Posted by: donmihaihai | April 1, 2012

To pay for stock?

NTA : 1.52
Low : 1.27 P/NTA : 0.84
High: 2.14 P/NTA : 1.41

NTA : 4.09
Low : 7.02 P/NTA : 1.72
High: 12.18 P/NTA : 2.98

Total Dividends 2002 – 2011 = 3.22
2011 NTA plus total dividends = 7.31
Total annualised return = 19.07%

Stock price 31/12/11 = 9.30
Total Dividends 2002 – 2011 = 3.22
Total return(buy at 1.27) = 28.95%
Total return(buy at 2.14) = 21.69%

Let me do some magic

NTA : 1.52
Low : 2.61 P/NTA : 1.72
High: 4.53 P/NTA : 2.98

NTA : 4.09
Low : 3.44 P/NTA : 0.84
High: 5.77 P/NTA : 1.41

Total return base on NTA plus dividends is still the same

What about stock price plus dividends?
Stock price ((3.44 + 5.77)/2) = 4.61 (P/NTA: 1.13)
Total return(buy at 2.61) : 12.98%
Total return(buy at 4.53) : 6.27%

Let do another magic

NTA : 1.52
Low : 2.61 P/NTA : 1.72
High: 4.53 P/NTA : 2.98

NTA : 4.09
Low : 7.02 P/NTA: 1.72
High: 12.18 P/NTA: 2.98

Total return base on NTA plus dividends is still the same

What about stock price plus dividends?
Total return(buy and sell at same P/NTA : 1.72) : 16.40%
Total return(buy and sell at same P/NTA : 2.98) : 14.56%

What does the above say about Keppel Corp?
Keppel Corp was doing very well from 2002 to 2011
What does it say about price?
– If the company is good, it can save the investor ass even if investor paid a wrong price(not too high of course). Magic no. 1

– Paying at right price for right stock will be wonderful. What is the right price? It happened that stock price of Keppel Corp in whole year of 2002 was right!

– To pay a premium for a stock, the only way to earn good return is the stock must be selling at about the same premium at point of selling. And of course the company must be doing good.

Wrong price for wrong company?
Food Junction generated ROE of 23% to 39% from 2002 to 2007. And if you think paying 3XBV is cheap. What happened after that?

Pteris Global generated ROE of 20% to 37% from 2003 to 2007. And if you think paying 4XNBV is cheap. What happened after that?

Someone might say these are crap companies. But that is by looking back.

Then what to do? I know what I will do for myself. I know what it work for me. I have a simple suggestion but it will not work for many people.

Use a probability chart, outcome chart or whatever it suit you when even you decided to pay for a premium. Go through it and if end results show that favorable result can only happened due to one or two outcomes or small probability, then it is better not to pay for it.

These whole thing require a person not to be hype up on the stock. But telling that to a person who is going to pay a premium is as good as useless. I have done that and I know it.

I have another suggestion. Screen for stocks that are selling at say 3XBV just like we are looking at low valuation stock. And don’t touch them regardless how good they are.

One way to look at thing is to look at your portfolio. Look at the stock valuation, especially at the purchase price. And you should worry about being a hype investor if you have many purchased at a premium.

Posted by: donmihaihai | January 2, 2012

The market and activities

The market in 2011 was well it dropped. It created more fear and uncertainty.

Checking STI stock chart from yahoo, it says, STI almost bulled non-stop from the low in Mar 2009 until it reached the high in Nov 2010, bounced off somehow and almost touched the same level in Jul 2011. That was incredible. If it continues that way, we will be in wonderland very soon. So somehow, lot of negative events hit and dropped about 18% from its high.

Just by looking at charts alone, I would say the market is taking a break before going for new high. But well, people read news, and news sound worse than the market.

What will happen in 2012? I don’t know and try not to predict. Generally, valuation is not as depressed as compare to last crisis but neither does it look excessive.

I invest in Unit Trust using CPF money and despite so much noise, these investments ended the year at breakeven.

In 2011, I stepped into some of the worse regions and countries. Purchased quite abit of Europe and Japan. Beside that also purchased small amount of Singapore and Greater China. What is my plan for 2012? Well if the market keep going down, I will use up the available amount in my CPF (not much left actually) and just dump in any new money that flow into my CPF. But if the market goes flat, will buy bit by bit every 2 to 3 months. Nothing new actually.

2011 was a year of activities.

Sold out of Pfood after FY2010 results was out. Despite pricing at discount from Book, I have no idea when the low profitability earned by this industry will last. Especially after watching businesses in China from my little world, I am very negative on the way capacities are being add in all range of industries. Let see how it goes. Thankfully, I think I sold at around the high for the year.

Sold out of Full Apex and left with some odd lot. The industry and business is not doing well but I intended to hold because price is good. But I hate it when insider and minority shareholders keep “fighting”. That is a lose lose. I sold out once I know what Pope was doing. Thankfully, I think I sold at around the high for the year. Good luck hit twice.

Almost sold out of ARA Asset Management. Started in 2010 progressively until it reached about the high of the year at about $1.7. The decision was purely valuation. What left over are just for annual report. Or maybe just that I refuse to sell out for a good business.

Sold 1/3 of Sarin Technologies when it almost touched $1. Decision was purely valuation again.

Sold 50% of Food Empire when it reached the high of about $0.50 and sold out of it when it falls back to my purchase price. The decision was part valuation and part disappointment of the management and business. At $0.50 hit my sell price unless the business improves which it did not. Sold the rest at purchase price when I had better ideas.

Sold out of Banyan Tree at just below my purchase price. Reasons were mainly valuation as market was producing better ideas. Perhaps it was also my mistake to purchase it close to Book and did not sell it off then watching the it traded close to 1.5x Book.

Purchased Haw Par Corporation. Consisted of difference businesses if their stakes in UOL, UIC and UOB are considered. On the whole, these businesses range from average to good and managed by people who I consider at least average but conservative. It has been acknowledged that Haw Par Corp should trade at a discount to Book but it is this discount that I like. With these businesses and management, I can wait for a day when market decided that a discount is not required. If that day never come? The businesses and management should carry me over.

LHT Holdings Limited was purchased in a very difficult environment. Almost zero liquidity and a $0.005 to $0.01 change in price mean a big change in valuation. What more, a director has been sucking up what sellers were offering. After the wash out in the early 2000s, the industry should provide better return for remaining player which mean LHT Holdings Limited profitability will be better. But I am still negative about whether current profitability will be enough for future capex. Still there is one thing I believe is if LHT Holdings Limited unable to earn back Capex, the market will adjust itself. The next negative is their expansion into other countries. Oversea expansion doesn’t always mean growth; it can also mean new intense competition. And I doubt that after so many years of cutting and barely profitable and in one of the industry where ‘talent’ don’t like to work in, they have the right management to bring them forward. But well, an average(or even below average) business with very good price make the cut.

Starco Corporation Limited was purchased in a very difficult environment especially when I refused to pay anything more. Add in repurchase by the company. But this was also the only company that I pay above Book.

Hong Kong Land was purchased during the year. I have not read a single good country that is positive on property market. But then this is the period where company can be purchase on cheap. I might be early but I like this management and how it is being managed.

SC Global was purchased during the year. Two things that associated with SC Global will be government measures and high leverage plus unsold inventories. I have a different view. SC Global leverage is not high. The interest payment that worried me but this worry goes down when development reach TOP. Next debt to fund working capital is different from debt to fund Capex. Especially so for property developer. And let say current government measures work(more will be coming if it don’t), it will cause price to drop or at least flat. It will hit cost and revenues. In this industry, any player with access to low cost land will generate good profit. Completed unit is liquid. Better still if these units come from low cost land.

Increased in Asia Enterprises Holding during the year when price dropped. Business is still the same so the purchase was base purely on valuation.

Increased in YHI International during the year when price dropped. Businesses should be the same except that it is moving into direction that I don’t really like it. But I like the valuation better

Increased in Wheelock Properties during the year when price dropped. Despite all the noise on government measurement, business is still the same and valuation makes the cut.

Increased in TPV during the year. The industry suck and I don’t know what will happen 10 years down the road. But there are good indications going forward. Less change and weak players fall out. Hopefully it will go the way of LHT Holdings Limited. Valuation makes the cut.

Maybe so maybe not.

I have been placing my bet on increasing stocks rather than concentrating on a few. Why is it so? I would like to think of it due to 2 reasons.

1st is due to increasing the pool of company that I watched. This might resulted in buying more companies.

2nd which I think is the more likely reason is valuation. Despite the dropped, good business with good management are not cheap at all. The best is just fairly reasonable. I think average and lousy companies are way cheaper. Many companies hit the price I would like to buy but it never goes free fall after that. So there is no way I would goes for concentration.

So what will happen if the market goes free fall in 2012? I will goes overdrive, leverage if need. Dump holdings and goes concentration.

Posted by: donmihaihai | January 1, 2012

Lets goes technical.

EZRA Holdings Limited, a company that I seldom talk about recently but with their latest annual report 2011, it is interesting to write about their receivables again.

Time line.
Annual Report 2008

– Energy Service segment was created and grossed US$29 million.
– Receivables at 87 million. About 118 days outstanding.
– Receivables past due 180 days = 7.5 million with 6.3 being impaired.

Annual Report 2009

– Energy Service segment renamed as Deepwater Subsea Services and grossed 46 million
– Receivables at 183 million. About 203 days outstanding.
– Receivables past due 180 days = 84 million with 2.7 being impaired.
– No additional impairment required but additional credit risk assessment being disclosed as Deepwater Subsea services had receivables of 75 million and 29 million outstanding as at balance sheet date.
– What was also disclosed was ” Included in the Group’s trade receivables of more than 120 days is a balance amounting to US$75,077,000 (2008: US$29,534,000), where the Group has the right to a permit held by the debtor to explore drilling activities in the territorial waters of New Zealand. The proceeds arising from realisation of this permit is expected to be in excess of the balance receivable.”

Annual Report 2010

– Deepwater Subsea Services grossed 21 million
– Receivables at 206 million. About 212 days.
– Receivables past due 180 days = 85 million with 4.5 million being impaired.
– Additional credit risk assessment being disclosed as Deepwater Subsea services had receivables of 88 million outstanding as at balance sheet date. Receivables due from New Zealand amount to 75 million for 2009 and 2010
– As at B/S date, Ezra collected 8 million out of 96 million of gross revenues from subsea services since 2008 which was 3 years.
– Included in the Group’s trade receivables of more than 365 days is a balance amounting to US$75,097,000 (2009: US$75,077,000), where the Group has the right to a permit held by the debtor to explore drilling activities in the territorial waters of New Zealand. The proceeds arising from realisation of this permit is expected to be in excess of the balance receivable. Accordingly, the balance has not impaired.

Annual report 2011

– Subsea Services grossed 180 million.
– Receivables at 302 million. About 197 days outstanding.
– Receivables past due 180 days = 95 million with 5.7 million being impaired.
– No additional impairment required but additional credit risk assessment being disclosed as Subsea Services had receivables of 170 million outstanding at balance sheet date. Receivables from New Zealand amount to 75 million.
– Included in the Group’s trade receivables of more than 365 days is a balance amounting to US$75,097,000 (2010: US$75,097,000), where the Group has the right to a permit held by the debtor to explore drilling activities in the territorial waters of New Zealand.
– In October 2011, the Group entered into a settlement agreement with the debtor in respect of the outstanding receivable to settle the amount in not more than five years. This amount is secured by rights and interests to the receivables of the debtor including participatory interests and guarantees. This includes an undertaking that the debtor has obtained from a private funding source to meet its repayment obligations.
– As at B/S date, Ezra collected 106 million of gross revenues from subsea services since 2008 which was 4 years.

Outstanding days of receivables at each B/S date were worse than rough gauge of Ezra receivables as these excluded revenues grossed from associates and joint venture. Ezra trade with these related parties as well and those were not small amount.

Other than that, annual reports of Ezra for last few years were also a bit special as they were disclosing more which is reasonable if not auditor was not doing the minimum requirement of their job.

But looking at information available, the party in New Zealand is clearing in default or without any mean of repaying. That goes against FRS in assessing the ability in repayment and whether to impair or not. By in agreement with Ezra that impairment is not required due to Ezra right in getting permit mean playing right at the line between right and wrong.

Which company policy allow the company to enter into settle agreement after more than 3 years of outstanding and give debtor another 5 years for them to find a way out?

Of course unless the company is in the same boat.

That 75 million is not small sum. It is 187% and 99% of FY2011 and FY2010 NPAT respectively.

Lastly, lets just say is it reasonable to expect more cockroaches in the cabinet when one is found.

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