The stock exchange has sought clarification from the company for a series of violations against the Listing Agreement
It is reliably learnt that the Bombay Stock Exchange (BSE) has found multimedia and animation company Compact Disc India non-compliant with several provisions of Clause 49 of the SEBI Listing Agreement. It has sought clarification and explanation from the company on this matter.
Apparently, the stock exchange has observed that the company has only a single independent director out of a total of three directors and is thus non-compliant with the requirements under Clause 49 (i) (a) of the Listing Agreement. As per the guidelines, at least 50% of the company’s board should be independent directors.
Further, the company has also failed to constitute its audit committee under clause 49(ii) (a) as per which two-thirds of the members should be independent directors.
The company has also failed to appoint an independent director as chairman of the shareholders-investors grievance committee and has thus also failed to comply with requirements under Clause 49(4) (g).
BSE has also observed that the company has actually reported compliance with the above clauses as per its disclosure dated 15 April 2010 as well as in earlier quarters.
Sources close to the development confirm that BSE has not yet received six copies of the annual report for the year ended March 2009 as per Clause 31 (a).
Meanwhile, in a letter to Moneylife, the company has clarified that the $82-million deal announced by the company for working on an animation film on Adolf Hitler was never announced with BBC Films. Apparently, this film assignment was given by a yet unnamed UK-based production house. As per its website, the deal with BBC Films was to co-produce another film titled ‘Blame it on the Bhangra’.
The company has also stated that all details regarding the annual general meeting (AGM) were communicated to the BSE and through leading newspapers well in advance. Also, regarding our comment that the company promoters may be attempting to drive up the share price of its stock, the company clarified that “Since 1993, the management never manipulated the company’s shares.”
Although there are no comparable stocks, other edible oil companies are available at a much cheaper price
Tara Health Foods Limited (THFL) hits the market on 28 April 2010. The company is into cattle/poultry feed, refining and blending of edible oil and solvent extraction. It also makes animal foods and edible oils. THFL posted a net profit of Rs16.99 crore in the year ended March 2009 compared to Rs9.01 crore in the corresponding period last year on a total income of Rs198.24 crore and Rs106.10 crore respectively.
Its price earnings (P/E) ratio stands at 24.73 based on profits for the period ended 31 December 2009. As on 31 December, 2009, the company had a total debt of Rs140.18 crore, representing a debt to equity ratio of 1.49:1. Although there are no strictly comparable stocks from cattle/poultry feed manufacturing companies, other edible oil firms like Anik Industries Ltd (16.50), Murli Industries Ltd (9.4) and Gokul Refoils & Solvent Ltd (8.54) sport lower P/E multiples.
THFL has 120 tonnes per day (tpd) of refining capacity, 250tpd of solvent extraction and 250tpd of cattle/poultry feed manufacturing capacity. The company is planning to set up 300tpd of refining capacity and 250tpd of cattle/poultry feed manufacturing facilities at its existing facilities from the proceeds of the IPO.
Most of the company’s operations are in Punjab, Haryana, Delhi, Himachal Pradesh, Uttaranchal and Bihar. The company’s products face stiff competition from organised and unorganised players. In the previous one year, the company has made an allotment of 5.20 lakh shares and 2 lakh shares to Tara Heart Care Products Ltd (a promoter group company) at Rs70 per share and at Rs200 per share respectively.
The issue opens on 28 April 2010 and closes on 30 April 2010. Fitch Ratings has assigned it an ‘IPO Grade 2’, indicating ‘below average’ fundamentals. The company plans to raise Rs180 crore-Rs190 crore at a price band of Rs180-Rs190 per share by issuing 1 crore shares. The proceeds will be utilised for setting up a new edible oil refining plant at an existing location, expansion of cattle feed plant, for working capital requirement, and brand-building in the domestic market. Atherstone Capital Ltd is the lead book-running manager for the issue.
There were zero bids from the QIB category for the Tarapur Transformers IPO, while the retail investor category was subscribed 0.79 times on the opening day of this offering, which received a ‘Grade 1’ from CRISIL
Tarapur Transformers Ltd, which opened for subscription yesterday, has received zero bids from the qualified institutional buyer (QIB) category while the retail investor category was subscribed just 0.79 times as on 27 April 2010.
The non-institutional investor quota was subscribed 4.17 times (53.20 lakh bids from the reserved quota of 12.75 lakh shares).
Tarapur Transformers Ltd is into manufacturing, rehabilitation, up-gradation, and refurbishment of transformers. It manufactures transformers up to 220 kilovolts (KV) and has an installed manufacturing capacity of 1,839.40 megavolt ampere (MVA) & repairing capability of 1,800MVA per annum.
The company posted a net profit of Rs2.15 crore for the year ended March 2009 compared to Rs1.51 crore in FY08 with a total income of Rs24.01 crore and Rs10.68 crore respectively. The earnings per share (EPS) for the year ended 31 March 2009 stand at Rs2.16. At a floor price of Rs65, its price to earnings (PE) ratio is 30.09 for the same period. The company has taken loans to the tune of Rs18.81 crore payable to various banks which constitute 88.42% of net worth of the company as on 31 December 2009. The company reported negative cash flows to the tune of Rs7.47 lakh in FY05, Rs2.09 lakh in FY06 and Rs124.97 lakh in FY08. In FY09, its cash flow was positive at Rs9.68 lakh.
The issue opened on 26 April 2010 and closes on 28 April 2010. The company plans to raise Rs55.25 crore-Rs63.75 crore by issuing 85 lakh shares with a price band of Rs65-Rs75 per share.
The IPO money will be utilised for expansion and modernisation of its Pali unit, to finance incremental working capital, acquisition of business, marketing and corporate-branding expenses.
Ratings agency CRISIL has assigned an ‘IPO Grade 1’ to the issue. Comfort Securities Pvt Ltd is the lead book-running manager.
Market watchdog SEBI has issued a letter to the promoter company Bilpower Ltd to opt for a consent order by paying an amount of Rs1.75 lakh for violation of Regulations 6 (2) and 6(4) for fiscal 1997 and Regulation 8 (3) for fiscals 1998, 1999, 2000, 2001 and 2002 with relation to the SEBI (SAST) Regulations, 1997.