As usual, when there’s nothing interesting in the market, I like to open up what’s trending 😎. One of them PT Sido Muncul Herbal Medicine and Pharmaceutical Industries Tbk (BEEN).
Coincidentally, SIDO’s 1H23 Financial Report has been released. I tried to open LK SIDO again, including the old years. Eh, apparently there is an “interesting” discovery.
SIDO Relationship Transactions
Those who have frequently opened LK SIDO will definitely be familiar with PT Muncul Anugerah Sakti (MAS). MAS subscriptions are listed in the sales record, because SIDO sales via MAS are usually > 10%. As you can see in the screenshot of the 1H23 SIDO Financial Report above.
Sales via SIDO Relations > 50%
What’s interesting? Take a look at the following related party transaction records.
It turns out that about half of SIDO’s sales are via relations. Maybe a lot has been overlooked about the amount of sales via relations at SIDO, because the only thing that appears in the Sales records is MAS, and even those who are aware read the sales records. So it is only natural that many people think that SIDO’s sales via relations are only 10%++, in fact it is 50%++.
But that’s not what’s interesting, although I think some people are not aware of this.
Then which one is interesting?
So, I am one of those who have been following the SIDO journey for a long time. As far as I can remember, sales via relationships were not this big, in fact very small.
I am curious. Since when did SIDO relation sales > 50%?
The peculiarities of SIDO’s Financial Statements
This is where it gets interesting. It turns out that there is something “strange” in SIDO’s 2017-2018 Financial Statements.
At LK 2017, sales via relationships are minimal. There is only PT Hotel Candi Baru of 398 million there.
Likewise, if we look at the relationship transaction records as below. MAS also appeared there for 2016, its value is only around 1 billion. For 2017 there were no sales transactions with MAS.
So, if you look at LK 2018. Suddenly everything changed, it’s like Goggle-V, suddenly it becomes a robot 🙈 (boomer, really, anjeeer). Check out the two notes below.
In LK 2018, note 31 Related Party Information, it is stated that sales via relations amounted to 1,287T (45.58%) for 2018 and 1.07T (41.59%) for 2017.
So, how did the story of 2017 suddenly change like that? I have checked, there is no explanation whatsoever about this in the 2018 LK. Even though the auditors for 2017 and 2018 are the same auditor.
To make it clearer, take a look at the differences in the recognition of SIDO sales relation transactions in 2017 at LK in 2017 and 2018 below. How lame, right?
SIDO Replace KAP
Investigate it, SIDO has been using it since 2017 Ernst & Young Global Limited (EY), previously using another Public Accounting Firm (KAP), non big four. It could be that the previous KAP was tight or not tight enough. 😜
EY only wrote this when he took over the work of the old KAP.
The problem is, why is it that after using EY, only in 2018 is there a more detailed acknowledgment of a relationship like this? Even though EY has been auditing since 2017? As you can see below, for 2017 and 2018, the auditors who audit are the same. And why is there no explanation when there is a confession? It feels very strange if we look at the 2017 and 2018 LK which are so extreme. Or am I missing?
Does this mean we can’t even trust EY’s class KAPs 100%? This relational transaction is very important and its value is not trivial. More than half of the sales you know! 🧐 Obviously this is something material. While in LK (until 2017) only 398 million were admitted to the Candi Baru Hotel.
Furthermore, of course, each of us can draw our own conclusions about what it means and the negative potential if an issuer makes too many relational transactions. Relationship transactions can be beneficial, such as synergy, mutualism, or detrimental, such as transfer pricing. That is why it is very important that there is a transparent confession. This transparency can only happen if the management and KAP do their job properly and correctly.
What do you think, dude? Who’s at fault here? Or no problem? EY is confused, SIDO’s management is not transparent, or what? Please comment, dude 😎
