CEYLON INVESTMENT PLC (CINV.N0000)

Value wrote:Hi Alchemist and Forum members,

The BUKI shares held by GUAR/CINV are held as "Investments in Fair value through other comprehensive income". The changes to fair values are not taken into profit or EPS calculation. It is rather accounted as other comprehensive income and taken to revenue reserves in the balance sheet (this, in turn, will affect the NAV). This can be checked in even in the latest financial statements (Q1 20/21) of CINV and GUAR. If there was a change in the accounting policy, it should have been reflected in Q1 20/21, but it is not the case.

It is therefore very clear that changes to the fair value of BUKI will not impact the EPS.

Let me come to the calculations now.

RIT holds 20,438,250 shares of BUKI. The market value of BUKI has increased by Rs. 287.6 per share during the quarter. The total gain that RIT will get due to FV change of BUKI is is 5.878 Bn. This is not a profit to RIT, but an OCI in line with the accounting policy. I want to emphasize again that this gain of 5.878 Bn will not be taken into the profits or EPS of RIT. This gain will however certainly increase the NAV of RIT.

Now let's look at the effective shareholding/ownership of RIT

CINV has 49.95% control on RIT.
GUAR group has 82.98% control on RIT.
CARS group has 56.97% control on RIT
BUKI has 26.02% control on RIT

All these above numbers are published in the respective company annual reports.

Now let's see how the Rs. 5.878 Bn gain that RIT has made will go into each company accounts.

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Kindly note again that these gains will not be taken into EPS of the any of the companies discussed above. These gains will be treated as OCI and will be taken to reserves in the balance sheet. It is therefore will increase the NAV. E.g Buki's net asset value will increase by Rs. 15 per share and no impact to EPS.

The sales of WAPO has not been done yet and therefor no gains from that will be recorded in Q2 20/21 financials.

Palm oil prices have improved YoY and this is a positive for Buki. However it is going to record exchange losses for Q2 as IRD currency has unfavourably changed during the quarter.

I have no idea about what was told at the AGM regarding good hope asia listing and or debt to equity conversion. Please enlighten us on this.

Cheers!

Value wrote:

How do you all expect me to contribute if I get questions like what's your motive after my every post?.

Value wrote:Hi Slstock,

So my post has bothered you. First of all, i didnt post any false predictions or anything to degrade anyone. I also have appreciated Alchemist in my other posts in this thread. And I said I won't be dragging the issue any further. I was waiting for the results to be released to comment here further.

How do you all expect me to contribute if I get questions like what's your motive after my every post?. Now the results of CINV and GUAR have proved what I posted are true and accurate predictions. So what motive has to be there for me to post the truth?

There was no hidden intention or agenda. I am not part of any gang here or elsewhere. I am part of other forums but rarely write anywhere.

I can contribute only if I can help by doing so.

I haven't said anywhere CINV hasn't done well if you think I am demoting this share. I only posted predictions about how the results will be.

For me also CINV is undervalued -  I didn't argue on this. I believe CINV should be valued based on NAV and not based on EPS. The net asset value has improved significantly compared to June 20 end.