Compact Disc India Ltd: A Total Money Spinner

Name of Company: Compact Disc India Ltd (CDIL)
Sector: Media and Entertainment – Music
CMP: Rs. 63.3
Target : Rs. 200 (5-6 months)
BSE:526141
NSE:COMPACDISC



Business Profile
Compact Disc India Ltd (CDIL) was incorporated in 1992 as a public limited company. The main objective was to set up a 100% EOU plant for manufacturing compact discs. CDIL had entered into technical collaboration with Netstal/First Light Technology, US. In 1992, the company entered into an MoU with Delta Disc, UK, for the export of 3.5 million or a minimum of 75% of annual production for a period of five years. The company has entered into an exclusive animation outsourcing contract with iMedia Ventures Ltd, a part of world's largest media house and a pioneer in digital entertainment. This group has presence in 28 countries with an annual turnover of USD$200 million.

Currently, the company is into producing, distributing and financing films and television serials including animation. The product range covers all the segments of entertainment i.e. big screen (theatres), small screen (home videos & television) and personal screen (personal computers).

CDIL`s assembly unit was established at Navi Mumbai in collaboration with Hyundai Corp, Korea, to manufacture CD video players. The company also set up a new modern multimedia studio at Gurgaon. It provides solutions to the film industry, education, presentation and training. During 2000-2001, CDIL also launched a web site www.loandefaulters.com, providing credit information on the Indian corporate world.

CDIL has gained extensive expertise in creation, distribution and management of contents for media and entertainment sector in India, Malaysia and Singapore. CDIL is presently working on 2D and 3D animation assignments worth USD40 million. These projects have been contracted to studios in Malaysia, Chennai and Bangalore. The company has recently been awarded two new animation film projects. CDIL, jointly with its business associates, Interactive Creative Media Pte Ltd, Singapore is working on an international animation film project, `Hustle Bustle`. The cost of the film is USD12.45 million.

Financials




Recent Developments
Compact Disc India decided to issue and allot 1,350,000 warrants convertible on preferential basis to Interactive Creative Media Singapore subject to all such approvals, permissions, sanctions and consents required.


Future Plans
CDIL has been exploring the possibility of setting-up a State-of-the-Art Multimedia Knowledge Park in Northern region. The company will also be setting-up state-of-the-art facility for the development and creation of 2D / 3D animation, multimedia and special effects contents for films, television serials, corporate presentations, gaming, mobiles, etc. The studio will feature latest animation production equipments such as workstations from renowned manufacturers. It is also proposed to set up a state-of-the-art high-end Multimedia College to provide 3 years Bachelors Degree courses in media arts and animation as well as visual and game programming. The college will also offer 2 years Masters Degree courses in the same fields.

News Items:
News 1:
Compact Disc India Ltd on August 09, 2007 has announced that it will set up India's first Integrated state-of-the-art Animation studio at the Kerala Industrial Infrastructure Development corporation (KINFRA). KINFRA is India's first SEZ developed exclusively for Animation & Gaming.

The Company will invest an initial capital of USD 12.40 million to set up an Animated Studio that will house the latest technology in Animation, from modern high end Workstations, Softwares, Render Servers, Central Storage, Motion Capture, Telecine, Editing and Compositing System, Colour Grading, Sound Recording & Dubbing Facilities, Projection Systems, Blue Screen Facilities, Pre-view Theatre etc will be installed at the Studio. This state-of-the-art studio will be the first ever in India, that will enable producers of Animation Films to avail the exclusive opportunity to completely produce their film at just one studio, rather than at different studios, which lack the requisite expertise and technology. Right from the story board to the Digital film format can be developed at the Company Studio.

Commenting on the project, Mr. Suresh Kumar, Chairman, of the Company, said that "This is a significant milestone for the Indian Animation industry, as for the first time a state-of-the art Integrated Animation Studio will be set up In India that will host advanced high-tech amenities to facilitate CDI and other Animation film production houses to produce and develop their films at just one studio. In the first stage of production, we aim to develop three animation films in partnership with renowned International media agencies and with MNCs."

Mr. Kumar further opined that "The KINFRA SEZ for Animation & Gaming, will give boost to this nascent industry through tax cuts, no duties levy on machinery, free exports etc, thus ensuring an additional profit of 8-10%, which is the need of the hour for the Animation Industry in India. We are indeed thankful to the Kerala Government for promoting Animation & Gaming in India, through this exclusive SEZ."

The Animation Studio will be spread out over a space of 60,000 sq feet and will employ a talent of more than 300 people. Since the studio construction will commence by October 2007, the Company has requested KINFRA SEZ authorities to provide space on lease rental basis in their Incubation Centre to start operations immediately.

News 2:
Compact Disc India Ltd has announced that the Company will co-produce 90 minutes, 3D Animation, family-oriented feature film, GoaaaaaL with Motion Pixel Corporation (MPC) a division of Canyon Entertainment, a leading Los Angles based Hollywood production Company.

Unlike many studios, which gamble on creating their own characters, GoaaaaaL is using real life sports heroes and celebrities and simply creating the cartoon version of them. This means characters that millions love and will come to watch whether its under dog sports teams winning the World Cup.

The animated sector has seen massive hits such as Shrek, Finding Nemo Monsters, Toy Story etc. to name a few. None of them focus on SOCCER / FOOTBALL, which is the most watched and most popular sport in the world, leading to huge worldwide revenue potential based on the wide range of multi-cultural interests, audience acceptance and appeal to its both kids and adults. The film is also expected to achieve huge revenues to do solid numbers in the merchandising of dolls, soccor balls, t-shirts and kids energy drinks etc. connected to its release.

GoaaaaaL will feature Academy Award winning actor Ben Kingsley as the lead voice over artist. Other top international artists such as Catherine Zeta Jones, Michael Douglas, Marisa Tomel, Christina Aquilera, Josh Duhamel, Samuel L Jackson are also likely to lend their voices for the film. Besides these artists, GoaaaaaL has signed all-time Mega-Star Of football-Ronaldo.

The Company will do the complete animation production and post production work related to the film in their studio at Chennai in India. GoaaaaaL written by M. Guerrier with an estimated budget of US$20.15 million, is slated to be released during the first half of 2009.

News 3:
Compact Disc India Ltd has informed BSE that the Board of Directors of the Company at its meeting held on July 26, 2007, inter alia, has transacted the following :

1. The Board has approved to invest SGD 1.00 million in cash, to acquire 1,000,000 equity shares at face value of SGD 1.00 at par of Interactive Creative Media Pte. Ltd., Singapore during the current fiscal year.

2. (i) The Board has approved to invest GBP 1.00 million, in consideration other than
cash to acquire 1,000,000 equity shares at face value of GBP 1.00 at par of MediaOne Venutres Ltd., London during the current fiscal year.

2. (ii) The Board has approved to invest GBP 250,000, in cash to acquire 250,000 equity shares at face value of GBP 1.00 at par of Media Venutres Ltd, London during the current fiscal year.

3. The Board has approved to set-up a state-of-the-art Animation Studio in Kinfra Speical Economic Zone for Animation & Gaming Development at Thiruvananthapuram, Kerala for which industrial land has already been allotted.