KCQ's for Amtek Holdings

Key Concepts and Questions

What Amtek Holdings does:

·       The principle activities of the company are investment holdings and the provision of management services.

·       I found that they have many core businesses in which they provide the marketing and distribution for. Some of these include:

-          Garment & apparels (Lee Cooper Jeans, Dickies, Pepsi and Ladybird)

-          Retailing (Harrods Brand)

-          Uniform Shoes (Amtek Shoes is one of the key suppliers of uniform shoes for the government.)

 Some key challenges for the company and how they are meeting these include and how the company has overcome these challenges:

·       The influx of cheaper apparels from countries, such as China and India, continue to test their determination to maintain a reasonable profit margin. To address this problem management have scaled down their operations by dropping non-profitable brands and now only focus on Lee Cooper jeans. This is the point of this assignment that I am finally starting to understand exactly what my company actually does. And I also found this quite funny because as I write this blog I am wearing a pair of Lee Cooper Jeans!  

·       The Amtek Group is also exposed to credit risks mainly from their receivables, cash and bank balances. I found that the way they minimise this credit risk is by dealing exclusively with reputable financial institutions. I have found this is prevalent in their regular updates on the company’s performance & corporate development via the form of media releases and press conferences.

·       World economy – the current growth in the advanced economies is showing some dismaying results, however, in spite of these uncertainties in the global environment, Malaysia has still managed to achieve a 4.3% growth increase for the year.

Challenges faced:

·       The Asian Financial Crisis in 1997

My observations:

I have found it extremely difficult to find much information on Amtek Holdings and do wish I had been given a different company to research, however, the challenge has certainly helped me to discover new ways to find the information I am needing. I am wondering if the reason for there not being much information has anything to do with the Asia Financial crisis or (as a fellow colleague suggested), perhaps in Asian countries they have a censorship of the internet making it impossible to find information online.

Amtek Holdings announces disposal of equity interest in Amtek Shoes Sdn Bhd

 

 

Amtek Holdings has recently announced the sale of the entire equity interest in Amtek Shoes, a wholly owned subsidiary of their group.

I have attached the link to the announcement below because I found it really interesting to see what sale considerations for a company are based upon. The things I found interesting in this report are:

·       The sale consideration is based on

-          net liabilities

-          net losses

-          outstanding balances

-          earning potential and future prospects

·       The original cost of investment for Amtek Holdings in Amtek Shoes was RM13 million. However, everywhere I look it says the sale amount was only RM10? Perhaps someone can help me to understand why this amount is so small or if I am reading the announcement incorrectly?

·       The AHB Group (Amtek Holdings Berhad) have estimated an expected net loss of RM1.5 million which takes me back to my previous question. Why sell so cheaply?

·       Bursa Securities (the primary securities exchange in Malaysia) issued a query to AHB regarding unusual movement in their market activity. There was a significant price rise of Amtek shares.

 

http://announcements.bursamalaysia.com/EDMS/edmswebh.nsf/LsvAllByID/51178E55D5F8D63848257CBF005D7F1B?OpenDocument

Enjoy having a look over the announcement and I welcome any feedback.

Identifying Assets, Liabilities and Equity.

 

 

 

Amtek Holdings Berhad is located in Parai Jaya, Malaysia so the currency for this company is the Malaysian Ringgit (RM). The conversion rate to AUD as at the 14th of July is: 1 RM = 0.34 AUD. The following details have been taken from the company's Statement of Financial Position dated 30th June 2013.

 

 Amounts are in millions of MYR

 

ASSETS

An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity (IASB Framework).

Cash & Short Term Investment         13

Cash and Short Term investments is the sum of two balance sheet line items: cash and equivalents and short term investments in marketable securities.

 Inventory                                              22

A company's merchandise, raw materials, and finished and unfinished products which have not yet been sold. These are considered liquid assets, since they can be converted into cash quite easily.

Property, Plant & Equipment           8.29 

Fixed assets, also known as Property, Plant and Equipment, are tangible assets held by an entity for the production or supply of goods and services, for rentals to others, or for administrative purposes.

 

 

LIABILITIES

A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits (IASB Framework).

Accounts Payable                                14

Money which a company owes to vendors for products and services purchased on credit. This item appears on the company's balance sheet as a current liability, since the expectation is that the liability will be fulfilled in less than a year.

Total long term debt                          2.85

Loans and financial obligations lasting over one year.

Capital Leases                                      0.47

Fixed-term lease that is similar to a loan agreement for purchase of a capital asset on instalments.

 

 

EQUITY

Equity is the residual interest in the assets of the entity after deducting all the liabilities (IASB Framework) or claims of owners in a business

Common Stock                                  50

An ownership share in a corporation that allows its holders voting rights at shareholder meetings and the opportunity to receive dividends.

Additional Paid-In Capital                19

Capital contributed to a corporation by investors on top of the par value of capital stock.

Retained Earnings                             -45

Profits generated by a company that are not distributed to shareholders as dividends but are either reinvested in the business or kept as a reserve for specific objectives (such as to pay off a debt or purchase a capital asset).

 

To view Amtek Holdings full Annual Report please use link below:

http://announcements.bursamalaysia.com/EDMS/subweb.nsf/LsvAllByID/447A527FB47D1FF148257C1C000BCEA7?OpenDocument

 

 

 

 

 

Amtek Holdings Berhad - Board of Directors

 

Amtek is led and managed by an experienced Board, comprising members with wide range of experience in relevant fields such as commerce, accounting and management. Together, the Directors bring a broad range of skills, experiences and knowledge required to direct and supervise the Group’s business activities.
The Board currently has five (5) members comprising, one (1) Executive Chairman and four (4) Independent Non- Executive Directors.


Syed Azmin bin Mohr Nursing @ Syed Nor Director

Syed Azmin bin Mohd Nursin @ Syed Nor, a Malaysian, aged 48, has been a Director of Amtek since 15 August 1987. He is an Executive Chairman and also the member of ESOS Committee, Nomination Committee and Remuneration Committee of Amtek. He graduated with a Bachelor of Science, majoring in Business Management from University of California, Berkeley, United States of America. Upon his graduation in 1984, he was involved in several private business ventures which included trading in commodities such as sugar, rice and palm oil. Apart from this, he was also involved in housing development, manufacturing and international trading.

In 1990, Syed Azmin operated his own private company, World Network Sdn Bhd, a company involved in the trading of timber and rubber products. In 1993, he joined Timber Master Industries Berhad, a company listed on the Second Board of the KLSE and he was later appointed as Executive Director in 1994, responsible in corporate affairs and business development, a position he held until 1996. Subsequently, he was appointed as Executive Director of CN Asia Corporation Berhad in 1997 responsible for corporate affairs and business development. In 1999, Syed Azmin incorporated Commerce Dot Com Sdn Bhd, an IT company undertaking Government Electronic Project, the largest E-Commerce project in Malaysia of which he is the Founder/Director. In 2006 he was appointed as a Non-Independent Non-Executive director in Tradewinds (Malaysia) Berhad, Tradewinds Corporations Berhad and United Malayan Land Berhad.

Thong Teong Bun Non Executive Director

Thong Teong Bun, a Malaysian, aged 49, appointed as a Director on 25 April 2006. He is an Independent Non Executive Director and the Chairman of the Audit Committee, Remuneration Committee, Nomination Committee and ESOS Committee of the Company. He also sits on the board of several private companies involved in the international trading and logistic operations.

Ahmad bin Abu Baker Non Executive Director

Ahmad bin Abu Bakar, age 56, a Malaysian, is an independent non-executive Director of the Company. He was appointed to the Board on 9 April 2008. He is a member of the Audit Committee and also the member of ESOS Committee, Nomination Committee and Remuneration Committee of Amtek. Encik Ahmad is an Accountant by profession. He is a member of the Malaysian Institute of Accountants. He is also a Director of Malaysia Land Ventures Berhad and several private limited companies.

 Wan Rashid Bin Wan Mohamed Non Executive Director

Wan Rashid bin Wan Mohamed, age 42, a Malaysian, is an independent non-executive Director of the Company. He was appointed to the Board on 30 March 2011. He is a member of the Audit Committee.

Wan Rashid is a Chartered Management Accountant (an Associate member of Chartered Institute of Management Accountants (CIMA), UK), and a member of Malaysian Institute of Accountants. He holds a Degree in Accounts and Finance from Manchester Metropolitan University, UK.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amtek Holdings - Background

Background

Amtek Holdings Berhad was incorporated in Malaysia as a private limited company under the Companies Act, 1965 on 27 August 1984 and was converted to a public limited liability company on 3 January 1997. In the subsequent year, the company was listed on the Second Board of Bursa Malaysia Securities Berhad on 25 June 1998.

The principal activities of the Company are investment holding and provisions of management services to its subsidiary companies, whilst its subsidiary companies are involve in the business of manufacturing and trading of garments, safety, canvas and casual shoes and property investment activities.

The organization chart of Amtek Holdings Berhad Group is depicted as follows:-

Amtak Holdings Berhad - Overview

Company Overview

Amtek Holdings Berhad is a Malaysian investment holding company which, through its subsidiaries, is engaged in marketing and distributing garments and electrical goods, the manufacture of shoes, garments and food products, property investment, and the provision of management services. It also markets and distributes fashion garments, principally Steeple Jack jeanswear, kid’s wear, and retailing of Harrods brand products.
The company was incorporated in August of 1984 and has its registered head office in Perai, Malaysia. The company’s operations are carried out in Malaysia, America and Singapore.

Our vision is to be a key player in the consumer related market. We are committed to achieving this goal through disciplined work staff, innovative product, efficient processes and excellence services.

To equip Amtek Group with necessary resources and strengths, so that it is well positioned to capture various business opportunities in the consumer related market. This would enhance the success of the Amtek Group and reward the stakeholders, employees and customers of the company in a sustainable way.



To continuously improve our business processes with the objective of delivering highest and reliable performance to our shareholders and customers.