MIRA
INFORM REPORT
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Report Date : |
28.04.2007 |
IDENTIFICATION DETAILS
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Name : |
NORTHGATE TECHNOLOGIES LIMITED |
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Registered Office : |
2nd Floor, JR
Towers, Road No.2, Banjara Hills, |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
12.06.2002 |
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Com. Reg. No.: |
01-39113 |
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CIN No.: [Company
Identification No.] |
L70900AP2002PLC039113 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
HYDN01046D |
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PAN No.: [Permanent
Account No.] |
AABCN7753P |
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Legal Form : |
A public limited liability company. Company’s Shares are listed on the
Stock Exchange. |
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Line of Business : |
Providing IT Services |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 3400000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established
and reputed company having satisfactory track. Directors are reported as
experienced and respectable businessmen. Trade relations are reported as
fair. Business is active. Payments are usually correct and as per
commitments. The company can be considered normal for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
2nd Floor, JR Towers, Road No.2, Banjara Hills, |
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Tel. No.: |
91-40 2354 4625, 2354 4626, 2354 4627 |
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Fax No.: |
91-40-2354 4628 |
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E-Mail : |
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Website : |
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Research & Development Centre : |
Plot No.A-52, Journalist Colony, Jubilee Hills, |
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Branch Office : |
15 Corporate Place South, |
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Tel. No.: |
1-732-465-0007 |
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Fax No.: |
1-732-465-0077 |
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Branch Office : |
6 River Valley Grove, #04-02, |
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Tel. No.: |
65 – 68366974 |
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Fax No.: |
65 – 68357223 |
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Branch Office : |
Unit 712a, Level 7, Core D Cyberport 3, |
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Tel. No.: |
36535555 |
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Fax No.: |
36535500 |
DIRECTORS
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Name : |
Mr. Venkat S Meenavalli |
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Designation : |
Chairman & Managing Director |
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Name : |
Mr. K. Bhaskara Reddy |
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Designation : |
Executive Director |
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Name : |
Mr. Yogesh Patel |
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Designation : |
Director |
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Name : |
Mr. Y. Suresh Kumar Reddy |
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Designation : |
Director |
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Name : |
Mr. P. Parthasarathi |
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Designation : |
Director |
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Name : |
Mr. T. Naresh Kumar |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Anil Singh |
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Designation : |
Chief Financial Officer |
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Name : |
Mr. Gouse Shaik |
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Designation : |
Company Secretary |
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Audit Committee : |
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Mr. P
Parthasarathi |
Chairman |
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Mr. Y. Suresh Kumar Reddy |
Member |
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Mr. T. Naresh Kumar |
Member |
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Compensation Committee : |
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Mr. Y. Suresh Kumar Reddy |
Chairman |
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Mr. P. Parthasarathi |
Member |
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Mr. T. Naresh Kumar |
Member |
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Investor Grievance Committee : |
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Mr. Venkat S Meenavalli |
Chairman |
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Mr. K. Bhaskara Reddy |
Member |
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Mr. Y. Suresh Kumar Reddy |
Member |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Shareholding of Promoter and Promoter Group2 |
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Indian |
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Individuals |
5924832 |
35.89 % |
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Bodies Corporate |
38333 |
0.23 % |
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Public shareholding |
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Institutions |
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Mutual Funds/ UTI |
957351 |
5.80 % |
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Foreign Institutional Investors |
4885624 |
29.59 % |
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Non-institutions |
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Bodies Corporate |
689997 |
4.18 % |
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Individuals |
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Individuals -i. Individual shareholders holding nominal
share capital up to Rs 0.1 Millions |
1303403 |
7.89 % |
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ii. Individual shareholders holding nominal share capital in excess of Rs. 0.1
Millions |
2540746 |
15.39 % |
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Any Other (specify) |
170109 |
1.03 % |
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TOTAL |
16510395 |
100.00 % |
BUSINESS DETAILS
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Line of Business : |
Providing IT Services |
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Products : |
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GENERAL INFORMATION
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Customers : |
Ø Globe/ Inc Ø Axill Inc Ø Northgate
Holdings (S) Pte Limited |
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No. of Employees : |
106 |
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Bankers : |
HDFC Bank Limited, Banjara Hills Branch, State Bank of Overseas Branch, Abids, Commerce Bank - Bank of East Asia - Barclays Bank - |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Statutory Auditors Price Waterhouse Chartered Accountants 2nd Floor, L.B.
Bhavan, Somajiguda, Internal Auditors Agarwal & Italia Chartered Accountants Suite 'H', 5th Floor, |
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Associates/Subsidiaries : |
Axill Inc.,
Globe7 HK Limited.
Globe7 Inc.,
Axill Europe Limited Tel: 020 7190 3353 Fax: 020 7190 3338 |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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18000000 |
Equity Shares |
Rs. 10/- each |
Rs. 180.000 Millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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13839083 |
Equity Shares |
Rs. 10/- each |
Rs. 138.391
Millions |
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FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
139.676 |
122.798 |
107.500 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
729.392 |
107.314 |
8.300 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
869.068 |
230.112 |
115.800 |
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LOAN FUNDS |
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1] Secured Loans |
0.057 |
15.589 |
21.800 |
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2] Unsecured Loans |
0.000 |
0.000 |
1.500 |
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TOTAL BORROWING |
0.057 |
15.589 |
23.300 |
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DEFERRED TAX LIABILITIES |
2.791 |
0.000 |
0.000 |
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TOTAL |
871.916 |
245.701 |
139.100 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
69.743 |
60.129 |
54.800 |
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Capital work-in-progress |
5.666 |
30.250 |
0.000 |
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INVESTMENT |
373.755 |
50.972 |
10.000 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Sundry Debtors |
212.510
|
148.629 |
56.900 |
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Cash & Bank Balances |
181.854
|
13.476 |
4.300 |
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Other Current Assets |
0.154
|
0.000 |
0.000 |
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Loans & Advances |
185.811
|
11.249 |
38.900 |
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Total
Current Assets |
580.329
|
173.354 |
100.100 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
97.033
|
53.002 |
21.100 |
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Provisions |
61.709
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18.334 |
7.600 |
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Total
Current Liabilities |
158.742
|
71.336 |
28.700 |
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Net Current Assets |
421.587
|
102.018 |
71.400 |
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MISCELLANEOUS EXPENSES |
1.165 |
2.332 |
2.900 |
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TOTAL |
871.916 |
245.701 |
139.100 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Sales Turnover |
334.737 |
109.907 |
83.000 |
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Other Income |
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|
0.100 |
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Total Income |
334.737 |
109.907 |
83.100 |
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Profit/(Loss) Before Tax |
278.846 |
76.532 |
NA |
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Provision for Taxation |
24.759 |
4.488 |
NA |
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Profit/(Loss) After Tax |
254.087 |
72.044 |
NA |
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Earnings in Foreign Currency : |
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Revenue from sales and services |
819.181 |
517.877 |
NA |
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Total Earnings |
819.181 |
517.877 |
NA |
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Expenditures : |
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Selling and Marketing Expenses |
3.373 |
4.434 |
0.000 |
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General and Administrative Expenses |
28.454 |
10.563 |
0.000 |
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Miscellaneous Expenditure Written Off |
1.166 |
0.583 |
0.000 |
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Power & Fuel Cost |
0.000 |
0.000 |
0.300 |
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Other Manufacturing Expenses |
0.000 |
0.000 |
6.000 |
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Employee Cost |
0.000 |
0.000 |
15.100 |
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Selling and Administration
Expenses |
0.000 |
0.000 |
32.900 |
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Miscellaneous Expenses |
0.000 |
0.000 |
2.000 |
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Interest & Financial Charges |
0.000 |
0.000 |
2.200 |
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Depreciation |
0.000 |
0.000 |
14.300 |
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Total Expenditure |
32.993 |
15.580 |
72.800 |
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QUARTERLY RESULTS
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PARTICULARS |
30.06.2006 |
30.09.2006 |
31.12.2006 |
|
Type |
1st
Qtr |
2nd
Qtr |
3rd
Qtr |
|
Sales
Turnover |
179.900 |
285.300 |
177.800 |
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Other
Income |
10.800 |
0.400 |
0.000 |
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Total
Income |
190.700 |
285.700 |
177.800 |
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Total
Expenditure |
65.800 |
125.300 |
26.100 |
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Operating
Profit |
124.900 |
160.400 |
151.700 |
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Interest |
0.000 |
0.100 |
0.000 |
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Gross
Profit |
124.900 |
160.300 |
151.700 |
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Depreciation |
4.700 |
04.900 |
5.100 |
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Tax |
2.000 |
1.800 |
3.000 |
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Reported
PAT |
118.200 |
154.300 |
138.800 |
200606 Quarter 1 –
1. The above mentioned financial results were approved and
taken on record by the board of Directors at their meeting held on July 31,2006.
2. The above mentioned financial results (Standalones only) are subject to
limited review by the statutory auditors of the company in terms of clause 41
of the listing agreement. 3. The above unaudited consolidated results includes
results of Axill Inc. Globe Inc ,Axil Europe Ltd, Globe 7 HK Ltd, wholly owned
subsidiaries and Nortigale Holdings(S) Pte Ltd, a subsidiary of the company.
200609 Quarter 2 –
Expenditure includes Cost of Revenues Rs 117.809 million
General & administrative expenses Rs 3.743 million Selling & Marketing
expenses Rs 3.499 million Miscellaneous Expenditure Written off Rs 0.292
million EPS is Basic Status of Investor Complaints for the quarter ended
September 30, 2006 Complaints Pending at the beginning of the quarter Nil
Complaints Received during the quarter Nil Complaints disposed off during the
quarter Nil Complaints unresolved at the end of the quarter Nil 1. The above
mentioned financial results were approved and taken on record by the Board of
Directors at their meeting held on October 23, 2006. 2. The above mentioned
financial results were reviewed by the Auditors of the Company in terms of
clause 41 of the listing Agreement. 3. Details of staff cost and other
expenditure exceeding 10% of the total expenditure are as follows: For Quarter
ended September 30, 2006 Staff Cost - Rs 10.754 million Cost of
Telecommunication Minutes - Rs 107.255 million 4. Figures have been re-arranged
and re-grouped wherever necessary.
200612 Quarter 3 –
EPS is Basic Status of Investor Complaints for the quarter
ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil
Complaints Received during the quarter Nil Complaints disposed off during the
quarter Nil Complaints unresolved at the end of the quarter Nil 1. The above
mentioned financial results were approved and taken on record by the Board of
Directors at their meeting held on January 27, 2007. 2. The above mentioned
financial results were reviewed by the Auditors of the Company in terms of
Clause 41 of the Listing Agreement. 3. Details of staff cost and other
expenditure included under various heads exceeding 10% of the total expenditure
are as follows: For the quarter ended December 31, 2006 Staff Cost - Rs 9.988
million Cost of Telecom minutes - Nil 4. During the quarter 24,47,062 equity
shares of face value of Rs 10 each at a price of Rs 497.28 per share including
share premium of Rs 487.28 per share were allotted to Foreign Institutional
Investors on Preferential basis as per Chapter XIII of SEBI Guidelines on
Preferential issues. 5. Details of utilisation of funds received from
preferential issue of equity shares during the quarter as per Clause 43 of the
Listing Agreement are as follows: (Rs in Million) Funds raised on preferential
allotment of Equity shares - Rs 1216.875 Utilisation of funds during the
quarter ended December 31, 2006: i. Equity investment in Wholly owned
subsidiaries - Rs 1124.937 ii. Issue expenses - Rs 47.804 Total Funds utilised
upto December 31, 2006 - Rs 1172.741 Funds Unutilised as on December 31, 2006 -
Rs 44.134 6. During the quarter additional equity investment of Rs 764.957
million and Rs 359.980 million were made in Axill Europe Ltd,
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity
Ratio |
0.01 |
0.11 |
0.10 |
|
Long
Term Debt-Equity Ratio |
0.00 |
0.01 |
0.02 |
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Current
Ratio |
3.04 |
2.01 |
2.82 |
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TURNOVER
RATIOS |
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Fixed
Assets |
7.58 |
6.07 |
1.25 |
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Inventory |
0.00 |
0.00 |
0.00 |
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Debtors |
4.54 |
5.04 |
2.69 |
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Interest
Cover Ratio |
195.71 |
30.42 |
5.68 |
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Operating
Profit Margin(%) |
37.10 |
18.40 |
32.29 |
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Profit
Before Interest And Tax Margin(%) |
33.45 |
15.27 |
15.06 |
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Cash
Profit Margin(%) |
33.12 |
17.03 |
29.28 |
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Adjusted
Net Profit Margin(%) |
29.47 |
13.90 |
12.05 |
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Return
On Capital Employed(%) |
49.31 |
41.68 |
11.01 |
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Return
On Net Worth(%) |
43.92 |
41.63 |
12.52 |
STOCK PRICES
|
Face Value |
Rs.10.00/- |
|
High |
Rs.859.65/- |
|
Low |
Rs.807.25/- |
LOCAL AGENCY FURTHER INFORMATION
Fixed
Assets
Tangible
Fixed Assets
Ø
Plant and Machinery
Ø
Computers
Ø
Office Equipments
Ø
Furniture and Fixtures
Ø
Leasehold Improvements
Ø
Vehicles
Intangible
Assets
Ø
Goodwill
Ø
Computer Software
Overview
During
the financial year under review, total revenues and net profit grew at 58.18%
and 235.10% respectively on year-on-year basis. The Company's EPS for the year
was Rs.18.61 as against the Rs. 6.70 for the previous financial year. During
the financial year 2006, total revenues of Rs. 819 Million and a net profit of
Rs. 241 Million were achieved.
New
Products and Services
In
February 2006 a new product under the trading name "Globe?" was
launched. Globe7 is a patent pending product which brings unique combination of
real time communication and infotainment on Users desk or lap top. Globe? has
witnessed downloads of More than 1.5 million with in five months of its launch.
Presently Globe? has registered users base of more than 1.7 million spreading
across 180 countries.
Awards
They
have been short listed by UK Trade and Investment, a UK Government Organization
for UK Trade and Investment India Business Awards 2006 for the category of
"Investor of the Year" (Indian Company successfully invested in the
Subsidiaries
Axill
Inc,
During
the financial year ended March 31, 2006, Globe? Inc,
In
November 2005, Globe? HK Limited, a wholly owned subsidiary corporation has
been set up in HK to access South East Asian Market. Globe/ HK Limited is yet
to commence operations. In October 2005, Axill Europe Limited, a wholly owned
subsidiary corporation has been set up in
Axill
Europe Limited recorded, revenues of GBP 436,801 with net profit of GBP 10,618.
AS PER WEBSITE
Corporate Overview
Synergizing its strengths in the Online Advertising and
Telecom sectors, Northgate is paving its way in the global market arena by
leveraging disruptive technologies like WIFI, SIP, Cluster Communications and
Artificial Intelligence.
Northgate is continuously working towards making a mark in the Online Adverting
sector with a multi model approach which is getting widely recognized and
loudly appreciated by major industry players. The company’s major web
properties aggregate traffic from Internet stream and create visibility. The
conversion for advertisers will be accomplished by bringing incentive to the
end user.
Northgate is emerging as a key player in the global telecom and VoIP market with an established presence in the areas of wholesale, prepaid, postpaid, refilling and hubbing of large volumes. The company has made its foray into the VoIP sector by launching Globe7, the first ever globally patented SIP VoIP Phone. Globe7 converts every Laptop into a mobile phone and every Desktop into a second telephone line.
Property Partners
As Northgate is paying its prime
attention to Online Advertising, the company is pacing rapidly in the direction
of new partnerships through Axill. Recognizing Axill as one of the leading key
players in the Online Advertising industry, all the world’s top Online
Advertising companies have established partnerships with Axill. Today, Axill is
making its presence felt in the online advertising arena with more than 2400
publishers and 1000 plus advertising programs.
Telecom Backbone Partners
Northgate's
stable expansion in the telecom industry acquired numerous partners to work
with. With the number of partners increasing day by day, Northgate is creating
ripples in the international telecom market.
Ø
Online Partner Ad
Agencies
Ø Shopping Partner Stores
Ø
Telecom Backbone Partners
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.41.29 |
|
|
1 |
Rs.82.30 |
|
Euro |
1 |
Rs.56.20 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
3 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
46 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|