60
MONITORING OF FUNDS
There is no requirement for a monitoring agency in terms of Regulation 16 of the SEBI (ICDR) Regulations.
The Audit Committee appointed by the Board of Directors will monitor the utilization of the net proceeds of the
Issue. We will disclose the utilization of net proceeds of the Issue under a separate head in our audited financial
statements, clearly specifying the purpose for which such proceeds have been utilized and also indicating
investments, if any, of such utilized proceeds of the Issue.
No part of the proceeds from the Issue will be utilized by our Company for payment to our Promoters, Promoter
group, our Directors, group companies or key managerial employees, except as disclosed above.
APPRAISAL
The objects for which the funds are proposed to be raised through this Issue have not been appraised by any
bank or financial institution.
SHORTFALL OF FUNDS:
In case of a shortfall in the Net Proceeds, Our Company shall utilize internal accruals or seek debt from
present/ future lenders or from advances/ sales proceeds from customers. Our management expects that such
alternate arrangements would be available to fund any such shortfall. Our management, in accordance with the
policies of our Board, will have flexibility in utilizing the Net Proceeds earmarked for general corporate
purposes.
INTERIM USE OF ISSUE PROCEEDS
We, in accordance with the policies established by our Board, will have flexibility in deploying the Net
Proceeds received by us from the Issue. The particular composition, timing and schedule of deployment of the
Net Proceeds will be determined by us based upon the development of the projects. Pending utilization for the
purposes described above, we intend to temporarily invest the funds from the Issue in high quality interest
bearing liquid instruments including deposits with banks and investments in mutual funds and other financial
products, including but not restricted to principal protected funds, derivative linked debt instruments, other
fixed and variable return instruments, listed debt instruments and rated debentures.
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(C)
BASIC TERMS OF THE ISSUE
The Equity Shares, now being issued, are subject to the terms and conditions of this Draft Letter of Offer, the
enclosed Composite Application Form (“CAF”), the Memorandum and Articles of Association of Our
Company, the approvals from the GOI, FIPB and RBI, if applicable, the provisions of the Companies Act,
1956, guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of
securities issued by Government of India and/ or other statutory authorities and bodies from time to time, terms
and conditions as stipulated in the allotment advice or letter of allotment or Security Certificate and rules as
may be applicable and introduced from time to time.
(D) BASIS FOR ISSUE PRICE
Qualitative Factors:-
Please see the section titled "Business Overview" beginning on Page 82 of this Draft Letter of Offer for a
discussion of Our Company's strengths and strategy and the section titled "Risk Factors" beginning on Page 14
of this Draft Letter of Offer for a discussion of internal and external risks associated with Our Company's
business and industry. -
Quantitative Factors:-
Financial Performance:
Information presented in this section is derived from our restated financial statements prepared in accordance
with Indian GAAP.
1.
Adjusted Earnings Per Share (EPS)
Sr. No. Financial Year
Amount in Rs. Weights
A
2008-09
(3.24)
1
B
2009-10
6.02
2
C
2010-11
9.80
3
D
Weighted Average
6.37
2.
Price Earning Ratio (P/E) in relation to the Issue Price of Rs. [*]
Particulars of Period
Price Earning Ratio
Based on March 31, 2011 EPS of Rs. 9.80
[*]
3.
Industry PE
Sr. No. Particulars
Price Earning Ratio
A
Highest -
167.40
B
Lowest -
2.4
C
Industry Composite
15.1
(Source: Dalal Street-July 17, 2011, Segment-Constructions)
4.
Return on Net worth
Sr.
No. Financial Year
% Return on
Net worth
Weights
A
2008-09
-
1
B
2009-10
28.25
2
C
2010-11
26.84
3
D
Weighted Average
22.84
5.
Minimum Return on Total Net Worth after Issue needed to maintain EPS of Rs. [*] is [*]%.
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6.
Net Asset Value
Sr. No. Net Asset Value
Per Share
A
As at March 31, 2011
36.51
B
After Issue
[*]
C
Issue Price
[*]
Notes:
a.
The Earnings per Share and the Return on Net Worth have been computed on the basis of the adjusted
profits and losses of the respective years drawn after considering the impact of accounting policy changes
and material adjustments/prior period items pertaining to the earlier years if any.
b.
The denominator considered for the purpose of calculating Earnings per Share is the average number of
Equity Shares outstanding during the year.
c.
Net Asset Value Per Share represents Shareholder’s Equity as per restated financial statements less
miscellaneous expenditure as divided by number of shares outstanding at the end of the period.
Comparison with Financial ratios of the Peer Group
Name of the Company
Period
Ended
Parameters
Sales
PAT
(Rs. In Lakhs)
Book
Value
RONW
%
EPS
P/E
Ratio
Price as
on
5/08/2011
Rodium Realty Limited
Mar-11
2422.31
284
36.51
26.84
9.80
17.86
175.00
Kolte Patil Developers Ltd.
Mar-11
13900
5260
88
7.9
6.9
4.70
41.00
Tirupati Sarjan Ltd.
Mar-11
7606
470
9.3
21.04
1.96
11.47
20.10
Ganesh Housing
Corporation Ltd.
Mar-11
16200
5710
171
10.2
17.50
7.10
134.00
Ashiana Housing Limited
Mar-11
14300
4890
91
28.6
26.10
4.90
150.00
Ansal Properties and
Infrastructure Limited
Mar-11
107700
7620
83
5.8
4.8
8.20
33.95
DS Kulkarni Developers
Ltd.
Mar-11
18100
1670
180
3.6
6.50
9.2
57.25
(Source: Dalal Street Magazine – July 17, 2011 Segment-Construction and Official Web-site of BSE i.e.
www.bseindia.com
)
The Face value per share is Rs. 10/- and the Issue Price of Rs. [*]/- is [*] times the Face Value.
The Lead Manager believes that the Issue Price of Rs. [*]/- is justified in view of the above qualitative and
quantitative parameters. The investors may want to peruse the risk factors and the financials of Our Company
including important profitability and return ratios, as set out in the Auditors’ report on page no. 156 of the Draft
Letter of Offer to have a more informed view of the investment proposition.
Market Price
The closing price of the Equity Share of our Company was Rs. [*] on the BSE, one day before the date when
Rights Issue Committee decided Issue Price. On the basis of the above mentioned qualitative and quantitative
parameters, the Lead Manager and our Company are of the opinion that the Issue Price of Rs. [*] per share is
justified.
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