MIRA
INFORM REPORT
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Report Date : |
27.11.2008 |
IDENTIFICATION
DETAILS
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Name : |
LG SOFT INDIA PRIVATE LIMITED |
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Registered Office : |
Cherry Hills, Ground Floor, Embassy Golf Links, Business Park,
Intermediate Ring Road, Bangalore – 560071, Karnataka |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
23.03.1998 |
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Com. Reg. No.: |
08-23521 |
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CIN No.: [Company
Identification No.] |
U85110KA1998PTC023521 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRL00324C |
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PAN No.: [Permanent
Account No.] |
AAACL3009P |
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Legal Form : |
Private Limited Liability Company |
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Line of Business : |
Subject
is engaged in application development, systems and middleware development and
testing. |
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 2800000 |
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Status : |
Good |
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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 and a part of LG, worldwide.
Trade relations are fair. Business is active. General financial position is
good. Payments are reported as usually made as per commitments. The company can be considered good for normal business dealings. |
LOCATIONS
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Registered Office : |
Cherry Hills, Ground Floor, Embassy Golf Links, Business Park,
Intermediate Ring Road, Bangalore – 560071, Karnataka, India |
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Tel. No.: |
91-80-66155000 |
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Fax No.: |
91-80-66155100 / 25275641 |
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E-Mail : |
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Corporate Office : |
5th Floor, Tower Bgolf View Homes, Wind Tunnel Road,
Murugeshplya, Bangalore – 560017, Karnataka, India |
DIRECTORS
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Name : |
Mr. Yoo Sok Saw |
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Designation : |
Director |
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Address : |
Flat # 605, Embassy Tranquil, 22, 8th Main, 3rd
Block, Koramangala, Bangalore – 560034, Karnataka, India |
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Date of Birth/Age : |
22.04.1965 |
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Date of Appointment : |
22.02.2007 |
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Name : |
Mr. Hang June Choi |
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Designation : |
Director |
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Address : |
Flat # 101, Embassy Tranquil, 22, 8th Main, 3rd
Block, Koramangala, Bangalore – 560034, Karnataka, India |
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Date of Birth/Age : |
11.09.1958 |
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Date of Appointment : |
30.06.2005 |
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Name : |
Mr. Jayarmank |
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Designation : |
Director |
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Address : |
510A, Uvca Layout, West of Chord Road, III Stage, I Block Basaveshwara
Nagar, 13th Main, I Cross, Bangalore – 560079, Karnataka, India |
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Date of Birth/Age : |
07.04.1955 |
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Date of Appointment : |
30.06.2005 |
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Name : |
Mr. Choong Hak Lee |
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Designation : |
Director |
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Address : |
113-103, Park Town 52, Soonae Dong, Bundand Gu Songnam Shi, Seoul - 463030, KR |
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Name : |
Mr. Jae Hon Bae |
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Designation : |
Director |
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Address : |
503-1504, 5th LG Village Shinbong Maeul, 871 Shibond Dong
Yongin Shi, Seoul 463030, KR |
KEY EXECUTIVES
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Name : |
Mr. Phaneendra P. |
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Designation : |
Company Secretary |
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Address : |
Shobha Nilaya, Behind Maruthi Temple, Chunchughatta main Road, Off
Kanakapura Road, II Cross, Bangalore – 560034, Karnataka, India |
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Date of Birth/Age : |
17.12.1959 |
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Date of Appointment : |
03.07.2003 |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
AS ON 29.09.2007
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Names of Shareholders |
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No. of Shares |
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LG Electronics Inc. |
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9945999 |
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LG Electronics Limited |
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1 |
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Total |
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9946000 |
AS ON 30.09.2007
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Equity Share
Breakup |
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Percentage of
Holding |
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Category |
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Bodies corporate |
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100.00 |
BUSINESS DETAILS
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Line of Business : |
Subject
is engaged in application development, systems and middleware development and
testing. |
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Products : |
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GENERAL
INFORMATION
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No. of Employees : |
540 |
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Bankers : |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
A F Ferguson and Company Chartered Accountants |
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Address : |
Deloitte Centre, Anchorage II 100/2, Richmond Road, Bangalore –
560025, Karnataka, India |
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Associates/Subsidiaries : |
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Holding Company : |
LG Electronics Inc. |
CAPITAL STRUCTURE
AS ON 30.09.2007
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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13000000 |
Equity Shares |
Rs. 10/- each |
Rs. 130.000 Millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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9946000 |
Equity Shares |
Rs. 10/- each |
Rs. 99.460
Millions |
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Note : 9945999 equity shares are held by LG Electronics Inc., Seoul,
South Korea the holding company.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 [12 Months] |
31.03.2006 [15 Months] |
31.12.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
99.460 |
99.460 |
99.460 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
451.200 |
389.022 |
251.136 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
550.660 |
488.482 |
350.596 |
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LOAN FUNDS |
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1] Secured Loans |
7.373 |
7.822 |
2.571 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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7.373 |
7.822 |
2.571 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
558.033 |
496.304 |
353.167 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
62.545 |
82.937 |
74.042 |
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Capital work-in-progress |
0.192 |
0.000 |
0.000 |
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INVESTMENT |
0.001 |
0.001 |
0.001 |
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DEFERREX TAX ASSETS |
10.260
|
5.314 |
2.732 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
0.000
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0.000 |
0.000 |
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Sundry Debtors |
71.125
|
94.266 |
64.120 |
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Cash & Bank Balances |
351.449
|
299.819 |
178.320 |
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Other Current Assets |
27.495
|
99.785 |
72.460 |
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Loans & Advances |
115.523
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19.495 |
16.150 |
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Total
Current Assets |
565.592
|
513.365 |
331.050 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
49.244
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82.562 |
45.581 |
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Provisions |
31.313
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22.751 |
9.077 |
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Total
Current Liabilities |
80.557
|
105.313 |
54.658 |
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Net Current Assets |
485.035
|
408.052 |
276.392 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
558.033 |
496.304 |
353.167 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
|
31.03.2007 [12 Months] |
31.03.2006 [15 Months] |
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Sales Turnover and Other Income |
|
0.882 |
1.010 |
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Profit/(Loss) Before Tax |
|
0.103 |
0.145 |
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Provision for Taxation |
|
0.041 |
0.007 |
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Profit/(Loss) After Tax |
|
0.062 |
0.138 |
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Earnings in Foreign Currency : |
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Software development services |
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858.515 |
986.107 |
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Billable expenses |
|
63.158 |
83.385 |
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Gain on foreign exchange |
|
0.000 |
4.613 |
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Total Earnings |
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921.673 |
1074.105 |
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Imports : |
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Capital Goods |
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13.689 |
25.427 |
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Expenditures : |
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Depreciation & Amortization |
|
0.063 |
0.070 |
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Other Expenditure |
|
907.921 |
1048.608 |
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Total Expenditure |
|
907.984 |
1048.678 |
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KEY RATIOS
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PARTICULARS |
|
31.03.2007 [12 Months] |
31.03.2006 [15 Months] |
31.12.2004 |
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PAT / Total Income |
(%) |
7.03
|
13.66 |
NA |
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Net Profit Margin (PBT/Sales) |
(%) |
11.68
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14.36 |
NA |
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Return on Total Assets (PBT/Total Assets} |
(%) |
0.02
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0.02 |
NA |
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Return on Investment (ROI) (PBT/Networth) |
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0.00
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0.00 |
NA |
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Debt Equity Ratio (Total Liability/Networth) |
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0.16
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0.23 |
0.16 |
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Current Ratio (Current Asset/Current Liability) |
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7.02
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4.87 |
6.06 |
LOCAL AGENCY
FURTHER INFORMATION
Fixed Assets
- Furniture and
Fixture
- Office
equipments
- Electrical
equipments
- Computer
equivalents
- Vehicles
Companies under
the same management
Sundry debtors include due from the holding company and due from
companies under the same management as defined under section 370 [1-B] of the
Companies Act, 1956 as flows.
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Particulars |
Rs
in millions |
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LG Electronics Inc. [Holding company] |
64.573 |
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LG Electronics Inc USA |
6.552 |
Review of
Operations
The figures for the year are not comparable with the previous period
which represents the 15 month period. During the year the company’s revenue was
Rs, 881 Millions and the profit after taxes was Rs. 62 millions. There has been
as impact on profitability on account of the increased rent and payroll a cost
resulting in decreased profitability.
The company was under tax holiday under the Income Tax Act till the
financial year ending March 2006. Commencing from the financial year [2006-07]
the company will no long be entitled for the tax holiday and provision for
taxation has been made accordingly.
Quality
The Company continues to maintain high level of quality compliance in
all its deliverables. The Company holds quality certification under ISO 9001 :
2000, ISO 27001:2005 and Certificate of Accomplishment for performing at the
Optimizing level of software process maturity as determined by the Capability
Maturity Model based appraisal for Internal process improvement of Software
Engineering Institute, Carnegie Mellon University. The Company’s quality
culture has been highly appreciated by its customers and instills in all its
employees a positive attitude towards quality.
AS PER WEBSITE
PROFILE
LG Soft India, the innovation wing of LG Electronics in
Bangalore, is LG Electronics' largest
R&D centre outside Korea. They at LGSI focus on niche technology
areas such as mobile application development, digital video broadcast and
biometrics software and support LG Electronics with their expertise. Motivated
by a passion for technology, a strong work culture and loyalty to the
organisation, they are determined to see LG become one of the top three brands globally.
Over
the years, they have created a campus conducive for creative thinking. Their
people-friendly attitude has spurred employees to constantly raise the bar on
quality standards.
With
emphasis on innovation, quality and
excellence, they have grown
into a trusted partner for clients across the globe.
Established
in 1998, LGSI is headquartered in Bangalore and is part of the LG group - an
acknowledged player in the global electronics and communication industry. It
has evolved as the hub of their innovation activities in Asia Pacific and is
now poised to play a decisive role in the region. With steady growth and
surging employee numbers, LGSI is all set to tap the Indian talent pool and
create a vital role for the sub-continent in its software division.
Milestones in
LGSI history
1998
The Bangalore office was established at The
Golf View Homes, Wind Tunnel Road
1999
Acquired ISO 9001 Certification
2001
Assessed SEI CMM Level 5
2004 Their
employee numbers crossed the 500 mark
Ventured into Handset Model
Development for various geographical locations across the globe
Another office was inaugurated at
Embassy Icon, Infantry Road, Bangalore
2005
A new office at Embassy Golf link, on
Kormangala-Indranagar Ring Road, Bangalore
In the offing
- Implementation of BS7799 Security Policy
- Implementation of Six Sigma process across functions
Process
Quality Management: Going Beyond Customer
Satisfaction
At
LGSI, quality is not merely about meeting their customer’s expectations, but
about exceeding them. They endeavour to create customer satisfaction and add
value to their overall business objectives. To us, quality is a way of life.
Quality
Policy:
- They share collective responsibility to
fulfil the commitments made to their customers: of delivering quality
products and services.
- They shall strive to improve their
quality standards by continuously benchmarking their performance.
- They put people first, and are
committed to the pursuit of excellence through management based upon
esteem for human dignity.
QMS
Structure at LGSI:
The Quality Management System (QMS) structure at LGSI
Quality System
Documentation: Classification of QMS Processes at LGSI
Organizational
Processes: deal with all the
processes and functions of the organization.
Life
Cycle Support Process (LCS):
deals with project phase specific phases and support functions.
Software
Development Lifecycle (SDLC): deals
with all the project phases and encompasses all the traditional SDLC
activities.
Quality
Management Group: Structure and Functions
The
Quality Management Group functions at various levels for organizational
improvement. It addresses all the projects being undertaken by the organization
and works with the project teams on cutting-edge technologies. (It supports all
the functions as depicted in the pictorial representation.)
LGSI
has acquired the following quality certifications:
- ISO 9001:2000 certification by KPMG
- SEI-CMM Level 5 assessment by GST Inc.,
USA
The
customer gets the following benefits from LGSI’s ISO 9001 and SEI CMM Level 5
certification:
- Superior productivity
- Few or no defects
- Shorter development cycle
- Infallible schedule compliance
- Savings in development and maintenance
cost
- Minimum TCO
- Maximum ROI
It
has also implemented other initiatives like the BS7799: ISMS and Six Sigma
process.
BS7799: ISMS
It is
important to safeguard organizational information, assets, processes, systems
and networks critical to internal and external customers. For this purpose,
systems and controls complying with the BS7799 standards are being implemented
through their ISMS (Information Security Management System). This process-based
model is employed in defining, implementing and maintaining ISMS.
Six
Sigma
To
build and sustain a competitive advantage and to assess and improve themselves
quantitatively, Six Sigma methodologies are being employed in areas critical to
quality.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No 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.49.85 |
|
UK Pound |
1 |
Rs.76.60 |
|
Euro |
1 |
Rs.64.68 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
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--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 |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
54 |
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. |
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 |
|