re: top value picks for 2003/ re cli for niche1 Niche1Hi &...

re: top value picks for 2003/ re cli for niche1 Niche1

Hi & thanks for responding.

Please excuse me if i sounded rude in my earlier post... i was just trying to get a point accross...

In your reply, you claim that everything's above board, and that their accounts are ASX approved, and also agreed apon by the auditors... with this i will not disagree.

The facts are that companies are allowed to report their earnings in Australia in almost any manner they choose... so it's of no great suprise that they've got approval from those bodies.

If you read the chairman's address closely, you'll see that they HAVE NOT CHANGED their methodology of accounting for earnings... they're still using a DCF of future values... thus all the brovado about changing their ways was over little else than them increasing the discount rate in their DCF.

The way i would expect them to account for earnings would be to report changes in the value of their property portfolio year on year as unrealised gains... in the ASR (asset revaluation reserve)... and to account for this as realised profits in their earnings statements on sale.

They have chosen not to adopt this method because, imho, it would result in a drastically different reported earnings figure.

Quality of earnings is all important when evaluating a company... and the best proxy for earnings quality is its correlation with operating cash flows.

On this test CLI fails miserably.


Please note that i don't follow CLI closely... i just have a passing interest. Packers increased stewardship may result in a bright picture and better controls going forward... we wait and see.

Regards