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The great Indian listed firm robbery

You’ve heard of people robbing things from a building. You might have even heard of entire premises being emptied by crooks. But have you ever heard of robbers walking away with the building itself?

It happened in West Bengal’s Purulia last year. At least, that was what the victim, a listed company, told its shareholders in its latest annual report.

The facts of the case presented by the company and endorsed by its auditors challenge the accounting notion of ‘immovable property’ and raises questions about the level of oversight by various regulatory authorities, say market watchers.

On April 12, 2012, Kolkata-based steel maker Vikash Metal & Power says it was the victim of a robbery at its plant site in Poradiha village of Purulia district. Among what was taken away were a factory shed, a building, heavy machinery used to make steel rods and stock worth crores of rupees. The company informed the stock exchange a little more than two months later, on June 21, saying a police complaint and an insurance claim had been filed but without revealing the extent of loss.

A detailed version came in the annual report put before the shareholders six months later.For the year ended June 30, 2012, the company clocked revenue of Rs 476 crore and reported a loss of Rs 179 crore. Over half or Rs 90.4 crore was ‘exceptional item (loss due to robbery)’. Note number 25 to the accounts itemised it as plant & machinery worth Rs 51.3 crore robbed; value of stock lost, Rs 26 crore. And, even factory shed and buildings stolen, worth about Rs 12 crore.

Elsewhere another note in the annual report said, “As the robbery was on April 12, depreciation on the item lost was taken till that date and removed from the gross block and accumulated depreciation, and booked as loss due to robbery under extraordinary item. The written down value as on the date of incident was booked as loss under the profit & loss account.” What about the insurance claim the company had earlier said it had made? "The company has filled the insurance claim but as the time period will be long to get the claim, loss was booked to show the clear picture of financial statements,” the note added.

Auditors Rakesh Singh & Co in their report said, “Major parts of plant has been reported lost and looted, thus putting the question on the going concern concept of the company and, moreover, the company operation was suspended from October 2011.”

Conveniently, the robbers also took away the registers where the company had recorded the details of its fixed assets. “This (was) maintained at the factory which is missing after the robbery and could not be presented to us for verification,” the auditor said.

Vikash Metal hit the market in 2005 with an Initial Public Offer of Rs 25 crore. It offered Rs 10 shares at a 100 per cent premium, at Rs 20 each. Kolkata-based Microsec India was the merchant banker. According to the offer document cleared by the Securities and Exchange Board of India, the company raised the money to fund the very plant in Purulia that was “robbed” seven years later. The IPO document also talks about public sector banks such as UBI and UCO Bank funding the project.

The promoters’ group consists of Vimal Kumar Patni, 63, and sons Vikash Patni and Akash Patni. While the father was chairman, both sons were on the board, with Vikash the managing director. In the early days, the promoter group held nearly 59 per cent in the company. In the latest shareholding pattern, the promoter group held a little over 15 per cent. Even these shares are pledged with lenders. An email sent to the company’s email ID, given on the BSE website, bounced. A second email to a different ID given in the VKP group website got no response.

Two institutions, Bank of New York Mellon (BoNY)and Ushdev International hold 41.48 per cent and 9.1 per cent, respectively. BoNY is a custodian and typically holds shares on behalf of other institutions. It came to own 47 per cent in the quarter ending June 2011. It is likely that some lenders who held the shares pledged by promoters parked it with BoNY, say marketmen. In the next few months, by October 2011, the company suspended operations.

Vikash’s troubles peaked around early 2012, when it failed to comply with the listing agreement requirement of filing quarterly results. In April 2012, the National Stock Exchange suspended the scrip for “Non-compliance with provisions of the listing agreement (including) non- submission of financial results for the quarter ended December 31, 2011.” The scrip continued to trade in the BSE, hitting newer lows. Before the incidents, in February 2012, the stock was trading at Rs 11. This Wednesday, it ended with losses of 4.9 per cent, closing at 58 p a share.

Alert:---------

Beware From Dabba Stocks

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The devil of a sovereign rating downgrade, that was nearly slain with the return of P Chidambaram to the finance ministry, who surprised by spending less than forecast - a sweet black swan event - is rearing its head again.

It is not the profligacy of the government this time, but a currency that is sliding fast and furious — partly due to global factors such as the US Federal Reserve tapering bond purchases, and mostly because of India's continued reliance on short-term flows to fund excessive imports.

A depreciating currency could be welcomed as a boon for a country suffering from a record high current account deficit — the excess of spending overseas than imports — as we did in 1991. Not quite in 2013.

Manmohan Singh as a finance minister in the PV Narasimha Rao Cabinet depreciated the rupee by a quarter and set the stage for an economic recovery after a balance of payments crisis in 1991. But as the head of the state, he could hardly afford that now. Government policies and finances are caught in such a web that his brahma astra of 1991 may probably boomerang this time with a sovereign downgrade to junk.

Indian Rupee has depreciated 10% since April amid fears that the Federal Reserve may taper its $85-billion of monthly bond purchases, shutting the liquidity tap for emerging markets. With announced reform measures not leading to a quick economic recovery, foreigners who flocked to India to benefit from higher returns have developed cold feet. After investing almost $30 billion between September 2012 and April 2013, they pulled out $5.3 billon since then. Standard & Poor's, which faces probe for its role in the 2008 credit crisis, rates India at Triple B- with a negative outlook and has warned that there are one in three chances of a downgrade in the next 12 months.

Moody's, which rated India Baa3 last week, said, "The fall in the exchange rate, by increasing the domestic prices of imported goods, will contribute to inflation, as well as to an increase in the government's expenditures, including on subsidies.'' Both ratings are investment grade, and a downgrade of one notch can make India a junk nation.

Government and the Reserve Bank of India have made consumption of gold, accounting for more than half the CAD, more difficult with restriction on imports and quadrupling import duty. The demand is falling, but relief from it is some way off. The bigger worry is crude oil, of which India imports more than three-fourths of requirements.

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We r Barking From Rs.400/- Exit From This Dabba Stock

Stock Already Fall Almost 50%

Now Real Horror To Start We Ready For Below 100

Alert:----

Forget TATA STEEL FOR Next 5-10 Year For Investment Stock

We r Barking From Rs.60/- Exit From This Dabba Stock

Stock Already Fall Almost 90%

NOW ONLY Rs.7/- REMAINING

Alert:----

SOONER OR LATER SUZLON WILL AVAILABLE BELOW Rs.1/-

We r Barking From Rs.180/- Exit From This Dabba Stock

Stock Already Fall Almost 50%

NOW STOCK TRADING AT Rs.100/-

Alert:----

CLOSING BELOW Rs.101/- WE READY FOR Rs.25/-

Yesterday

Stock Close Beow Rs.101/-

NO IF & BUT

In Short Term Anything Can Happen!!!!!

Stock Can Rise As Short Covering Rally!!

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FROM MARCH LAST WE R SHOUTING EXIT IN MMTC & WARN YOU TIME TO TIME IN LAST 5 MONTHS

WHAT HAPPEN IN MMTC ?

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IN March MMTC Trading at Rs.350/-

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WE BOLDLY GAVE TARGET FOR THIS STOCK TO Rs.25/-

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Yesterday Stock HITT Low Of Rs.50/- Fall Almost 90% From Our Exit Call!!!!

For the past two years, as regular readers you know, We have been bearish on hard commodities. Prices may have dropped substantially from their peaks during this time, but We don’t think the bear market is over. Wethink we still have a very long way to go.

There are five reasons why We expect prices to drop a lot more!!!!

First, during the last decade commodity producers were caught by surprise by the surge in demand. Their belated response was to ramp up production dramatically, but since there is a long lead-time between intention and supply, for the next several years we will continue to experience rapid growth in supply. As an aside, in our many talks to different groups of investors and boards of directors it has been our impression that commodity producers have been the slowest at understanding the full implications of a Chinese rebalancing.

Second, almost all the increase in demand in the past twenty years, which in practice occurred mostly in the past decade, can be explained as the consequence of the incredibly unbalanced growth process in China. But as even the most exuberant of China bulls now recognize, China’s economic growth is slowing and We expect it to decline a lot more in the next few years.

Third, and more importantly, as China’s economy rebalances towards a much more sustainable form of growth, this will automatically make Chinese growth much less commodity intensive. . Even if China is miraculously able to regain growth rates of 10-11% annually, a rebalancing economy will demand much less in the way of hard commodities.

Fourth, surging Chinese commodity purchases in the past few years supplied not just growing domestic needs but also rapidly growing inventory. The result is that inventory levels in China are much too high to support what growth in demand there will be over the next few years, and We expect Chinese in some cases to be net sellers, not net buyers, of a number of commodities.

And fifth reason in United State QE 3 to end soon . As per market expectation QE3 in America to end before year 2015 .This will effect commodity demand.

This combination of factors – rising supply, dropping demand, and lots of inventory to work off – all but guarantee that the prices of commodities will collapse. We expect that certain commodities, like copper, iron ore coal and Crude will drop by 30% - 50% or more in the next one to three years.

BUT HOW CAN IT BE WON????

FOR THIS JUST JOIN

(Train For Every Investor)

IF YOU TRY!!!!!!!!

.............YOU MAY WIN OR YOU MAY LOSE.........

...............IF YOU NOT TRY YOU NEVER WIN ..............

The investment ideas of Warren Buffett is most basic and simple to implement. The beauty of his investment ideas is that they are so easy and logical that at timespeople overlook the same ideas even though it must have crossed their mind. These investment ideas of Warren Buffett has not only help the maestro to make billions but also stands as a guiding principles for every other investor of this world.

Warren Buffett’s investment ideas asks us to buy stocksof only those companies whose “fundamentals” are very strong and its stock is available at “undervalued price”. When we say strong fundamentals we mean a healthy financial report, unique product line which is run by exceptional managers.

Think Big TO EARN BIGGG

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What To Do Today..........

Our Opininon for Today's Market.......

1.Market Looks Volatile.....

1.Some Insider Say NIfTy go up to 6200

What To Do Today........

Nifty....Today Face Resistence at......5998...6025..6068

Nifty.....Today Support at ...5855...5815...5762

Nifty Range...4200--------6600

TRACK ME RESEARCH......

NEXT TGT FOR

Sell Nifty Around 6200/6300

Our Opininon for Today's Market.......

1.Stock Specific Movement Expected Today ......

2.Midcaps Looks Good....

INTRADAY HOT STOCKS: 26/07/2013

buy optockt sl 26.5 tgt 30/33/35

sell tata st tgt 210/190 soon

buy sbi sl 1782 tgt 1820/1840/1855

BANKING LOOK WEEK

buy yes bk sl 373 tgt 380/390/400/420

if nifty hold 5950 then see 6046/6070/6140 soon

buy jindal sl 190 tgt 222 /240

dlf soon 90 , tatast 190 , lic 185

UP SIDE WE HAVE EXIT CHANCE NO FRESH BUYING

L&T FINANCE HOLDINGS

(BSE TICKER-533519@ Rs.83/-)

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RBI TO ANNOUNCE NEW BANK LICENCE SOON

L&T HOLDINGS EXPCTED TO GET FIRST BANKING LICENCE !!!!

Rs.120/- Rs.150/-

Alert:- Our Subscriber's Long in Stock!!!

ZEE ENTRTAINMENT
(Bse Ticker-505537@ Rs.242/-)

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BIGGEST BULL RUN YET TO START!!!!

TARGET

Rs.800/- Rs.1200/-

NO IF & BUT!!!

MARKSANS PHARMA
(Bse Ticker-524404@ Rs.9/-)

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As Per Our Advance Estimate On Going Correction Is Completed Very Soon!!!!!!

We Expect Company To Declare Great Result!!!!

Journey For Big Upmove May Start Aany Time!!!!

TARGET

Rs.14/- Rs.70/- SL Rs.6/-

BHEL
(Bse Ticker-500103@ Rs.161/-)

FROM Rs.240/-

WE R BARKING EXIT IN BHEL

STOCK ALREADY FALL TO Rs.160/-

Alert:------

NOW WE READY FOR BELOW Rs.100/-

Rs.120/- Rs.90/-

EXIT AT EVERY RISE!!!!