MIRA
INFORM REPORT
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Report Date : |
01.11.2008 |
IDENTIFICATION
DETAILS
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Name : |
FOUR SOFT LIMITED |
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Registered Office : |
5 Q1, A3, 5th Floor Cyber Towers, Hi-tech City Madhapur, Hyderabad - 500081, Andhra Pradesh |
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Country : |
India |
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Financials (as
on) : |
31.03.2008 |
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Date of Incorporation : |
24.12.1999 |
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Com. Reg. No.: |
01-33131 |
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CIN No.: [Company
Identification No.] |
L72200AP1999PLC033131 |
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TAN No.: [Tax Deduction
& Collection Account No.] |
HYDF00177C |
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Legal Form : |
A Public Limited Liability Company. The company's shares are listed on the Stock Exchanges. |
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Line of Business : |
Subject is engaged in development of computer software promoted by technocrat entrepreneurs for freight and logistic applications. It also engaged in developing innovative software products and providing IT consulting services |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
RATING |
STATUS |
PROPOSED
CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 4950000 |
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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 company having fine track.
Available information indicates high financial responsibility of the company.
Financial position is good. Payments are correct and as per commitments.
The company can be considered good for any normal business dealings at usual trade term and conditions. |
LOCATIONS
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Registered Office / Software Development Centre : |
5Q1, A3, 5th Floor Cyber Towers, Hi-tech City Madhapur, Hyderabad - 500081, Andhra Pradesh, India |
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Tel. No.: |
91-40-23100600 / 601 / 603 |
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Fax No.: |
91-40-23100602 |
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E-Mail : |
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Website : |
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Area : |
4000 Sq.fts |
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Head Office : |
H. No. 180, Plot No. 99, Women Co-operative Society, Road No. 5, Jubilee Hills, Hyderabad - 500 003, Andhra Pradesh, India. |
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Tel. No.: |
91-40-3554334 |
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Fax No.: |
91-40-3100602 |
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E-Mail : |
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Area : |
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For investor matters : |
Ms.
Seena Sankar
Company
Secretary and Compliance Officer Secretarial
Department Four Soft Limited 5Q1
A3, 5th Floor, Cyber Towers Hitec City, Madhapur, Hyderabad - 500 033 Hitec
City, Madhapur, Hyderabad - 500 033 Tel:
91-40-2310 0600, Fax:
91-40-2310 0602 email:
investorinfo@four-soft.com |
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For
queries on Financial statements : |
Mr.
Biju S. Nair Sr.
Vice President (Finance and HR) 5Q1
A3, 5th Floor, Cyber Towers Hitec City, Madhapur, Hyderabad - 500 033 Tel:
91-40-2310 0600, Fax:
+91-40-2310 0602 email:
nair.biju@four-soft.com |
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Branches / Overseas Office : |
Ø 210,
Lal Bunglow, 6-3-862 / A & B, 2nd Floor, Ameerpet, Hyderabad -
500 016, Andhra Pradesh Tel. No. 91-40-3412471 / 3411068 / 070 / 3100604
Ø 5Q1A3, Cyber Towers, 5th Floor, Hitec City, Madhapur, Hyderabad - 500 033, Andhra Pradesh Tel. No. 91-40-3100600 / 601 / 603 Fax No. 91-40-3100602
Ø Q1-A, 35th Floor, Cyber Towers, Hi-Tec City, Madhapur, Hyderabad - 500 033, Andhra Pradesh Tel. No. 91-40-3100604
Ø 541, Orchard Road, # 19-03, Liat Towers, Singapore 238881 Tel. No. + 65 8349680 Fax No. + 65 2381780
Ø C/o. Global Freight Exchange Limited 630, Chiswick High Road, London W45BG, UK Asia Pac Four Soft Singapore Pte Limited, 4 Leng Kee Road, #05-11A SIS Building Singapore 159088 Tel: +65 6734 5575 Fax: +65 6734 5002 e-mail: sg.sales@four-soft.com China Four Soft Logistics Software (Shanghai) Company Limited, No. 22301-448, Pudong Software Park, Guoshoujing Road No. 498, Zhangjiang Hi-Tech Park, Shanghai 201 203 e-mail: sales@four-soft.com Tel: +31 (0) 78 6256 256 Fax: +31 (0) 78 6256 299 e-mail: eu.sales@four-soft.com 5Q1A3, Cyber Towers, HITEC
City, Madhapur, Hyderabad – 500033, India Fax: 91-40 23100602 e-mail: sales@four-soft.com Four Soft UK Limited, Newstead House, Lake View Drive, Sherwood Park, Annesley Nottinghamshire, NG15 0DT England Tel: +44 (0) 870 756 5783 Fax: +44 (0) 162 372 0006 e-mail: uk.sales@uk.four-staff.com
Four Soft USA Inc., 538
Broadhollow Road, Suite 420E, Melville, NY 11747 Fax: +1 631 752 7829 e-mail: us.sales@four-soft.com |
DIRECTORS
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Name : |
Mr. Palem Srikanth Reddy |
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Designation : |
Chairman and Managing Director |
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Name : |
Mr. Suresh C Rajpal |
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Designation : |
Chairman |
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Name : |
Mr. Koh Boon Hwee |
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Designation : |
Independent Director |
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Name : |
Mr. Douglas Terence Ash |
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Designation : |
Independent Director |
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Name : |
Mr. Walter Joseph Sousa |
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Designation : |
Independent Director |
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Name : |
Mr. K V Vishnu Raju |
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Designation : |
Independent Director |
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Name : |
Mr. M M Pallam Raju |
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Designation : |
Director |
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Name : |
Mr. P Mangamma |
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Designation : |
Non – Executive Director |
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Name : |
Mr. Sarath Naru |
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Designation : |
Independent Director |
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Name : |
Mr. Naresh Kumar Patro |
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Designation : |
Company Secretary |
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Name : |
Mr. K V Ramakrishna |
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Designation : |
Independent and
Nominee Director |
KEY EXECUTIVES
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Name : |
Mr. Naresh Kumar
Patro |
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Designation : |
Company Secretary
and Compliance Officer |
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Name : |
Mr. Biju S Nair |
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Designation : |
Vice President
(Finance and Human Resource) |
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Name
: |
Ms. Seena Sankar |
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Designation : |
Company Secretary
and Compliance Officer |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 30.06.2008
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Category of Shareholder |
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/ Hindu Undivided Family |
9222205 |
23.67 |
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Foreign |
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Individuals (Non-Residents Individuals/Foreign
Individuals) |
1632768 |
4.19 |
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Bodies Corporate |
1596308 |
4.10 |
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Public shareholding |
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Institutions |
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Mutual Funds/ UTI |
3949447 |
10.14 |
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Financial Institutions / Banks |
300 |
0.00 |
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Venture Capital
Funds |
137293 |
0.35 |
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Foreign Institutional Investors |
292000 |
0.75 |
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Non-institutions |
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Bodies Corporate |
3651494 |
9.37 |
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Individuals |
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Individuals -i. Individual shareholders holding nominal
share capital up to Rs 0.100 Million |
10032812 |
25.75 |
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ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100
Million |
4799014 |
12.32 |
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Any Other (specify) |
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Non Resident Indians |
412789 |
1.06 |
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Clearing member |
28988 |
0.07 |
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Trusts |
557877 |
1.43 |
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Overseas Corporate Bodies |
2067581 |
5.31 |
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Foreign Nationals |
432344 |
1.11 |
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Foreign Bodies Corporate |
146524 |
0.38 |
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Total |
38959744 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Subject is engaged in development of computer software promoted by technocrat entrepreneurs for freight and logistic applications. It also engaged in developing innovative software products and providing IT consulting services |
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Products : |
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GENERAL
INFORMATION
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Customers : |
Ø S-net
Global, Singapore Ø Sri Bayana Emas, Malaysia Ø Roton Vander, Sri Lanka Ø Fly Jac, India Ø GF-X, London |
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No. of Employees : |
583 |
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Bankers : |
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Facilities : |
Secured Loans :
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Banking Relations
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Good |
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Auditors : |
S R Batliboi and
Associates Chartered
Accountants |
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Internal
Auditors : |
Laxminiwas and
Jain Chartered
Accountants |
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Associates : |
Ø Pramati Ø Oracle |
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Related Party : |
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Subsidiaries
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Joint
Venture : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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56077600 |
Equity shares |
Rs. 5/- each |
Rs. 280.388 Millions |
|
696120 |
14% redeemable optionally convertible cumulative preference shares |
Rs 100/- each |
Rs 69.612 Millions |
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Total |
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Rs 350.000 Millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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38959744 |
Equity shares |
Rs. 5/- each |
Rs 194.798 Millions |
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Less : Calls in arrears by others |
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Rs 0.009 Millions |
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Less : Amount recoverable from ESOP trust [556856 equity
shares (Previous year: 868567), including 217200 bonus shares allotted to the
trust] |
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Rs 1.698 Millions |
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Total |
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Rs 193.091 Millions |
Notes:
Of the above:
a. 4,563,970
equity shares (Previous year 4,563,970) of Rs. 5 each are allotted as fully
paid up bonus shares by captilisation of general reserve
b. 10,452,102 equity
shares (Previous year 10,452,102) were allotted as fully paid up for
consideration other than cash.
c. 613,344 shares
(Previous year: 301,633 shares) were issued to employees (through ESOP trust)
pursuant to the employee stock option scheme.
Of the above
390,544 shares were issued at Rs. 19.65 out of which Rs. 14.65 per share were
received in the form of employee service and 222,800 shares were issued at Rs.
70.75 out of which Rs. 65.75 per share were received in the form of employee
service.
d. As approved by
the shareholders in Extra ordinary general meeting of the Company held on
January 19, 2007, the Board of Directors of the Company at their meeting held
on February 2, 2007, allotted 2,000,000 warrants to Citicorp Finance (India)
Limited and 100,000 warrants to Indus Age Management Services Private Limited
at a price of Rs. 68 determined in accordance with the Securities and Exchange
Board of India (SEBI) Guidelines. These warrants are convertible at a future
date into equal number of equity shares of face value of Rs. 5 each.
Warrant-holders are entitled to subscribe to these warrants within a period not
exceeding 18 months from the date of allotment of warrants. As required by SEBI
Guidelines, subscribers have deposited non-refundable amount of Rs.14.280
Millions, an amount equivalent to 10% of total consideration.
FINANCIAL
DATA
[all
figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
193.091 |
191.531 |
176.488 |
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2] Share Application Money |
0.000 |
4.439 |
0.000 |
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3] Equity Share Warrants |
14.280 |
14.280 |
0.000 |
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4] Stock options outstanding |
8.752 |
17.582 |
0.000 |
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5] Reserves & Surplus |
774.001 |
758.561 |
532.689 |
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6] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH
|
990.124 |
986.393 |
709.177 |
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LOAN FUNDS |
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1] Secured Loans |
135.955 |
1.946 |
2.704 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING
|
135.955 |
1.946 |
2.704 |
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DEFERRED TAX LIABILITIES |
5.340 |
3.813 |
2.291 |
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TOTAL
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1131.419 |
992.152 |
714.172 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
91.544 |
80.487 |
64.038 |
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Capital work-in-progress
|
0.125 |
0.375 |
0.000 |
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INVESTMENT
|
912.511 |
438.587 |
141.222 |
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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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Inventories
|
0.000 |
0.000 |
0.000 |
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Sundry Debtors
|
242.561 |
335.945 |
104.819 |
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Cash & Bank Balances
|
18.964 |
37.958 |
273.412 |
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Other Current Assets
|
8.295 |
10.765 |
8.755 |
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Loans & Advances
|
79.456 |
227.793 |
233.675 |
Total Current Assets
|
349.276
|
612.461
|
620.661 |
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Less : CURRENT LIABILITIES & PROVISIONS
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Current Liabilities
|
214.584 |
127.943 |
76.333 |
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Provisions
|
7.453 |
11.815 |
35.467 |
Total Current Liabilities
|
222.037
|
139.758
|
111.800 |
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Net Current Assets
|
127.239 |
472.703 |
508.861 |
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MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.051 |
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TOTAL
|
1131.419 |
992.152 |
714.172 |
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PROFIT & LOSS ACCOUNT
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PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover |
371.355 |
364.947 |
244.037 |
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Other Income |
8.971 |
8.527 |
0.000 |
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Total Income |
380.326 |
373.474 |
244.037 |
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Profit/(Loss) Before Tax |
8.685 |
58.131 |
48.878 |
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Provision for Taxation |
5.108 |
7.218 |
6.980 |
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Profit/(Loss) After Tax |
3.577 |
50.913 |
41.898 |
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Export Value |
358.437 |
368.634 |
NA |
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Import Value |
9.033 |
16.856 |
9.223 |
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Expenditures : |
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Personnel expenses |
146.299 |
144.423 |
NA |
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Operating and other expenses |
188.236 |
149.935 |
NA |
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Miscellaneous expenditure written off |
0.000 |
0.052 |
NA |
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Financial Expenses |
11.829 |
1.226 |
NA |
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Depreciation & Amortization |
25.277 |
19.707 |
NA |
|
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Other Expenditure |
0.000 |
0.000 |
195.159 |
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Total Expenditure |
371.641 |
315.343 |
195.159 |
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QUARTERLY RESULTS
|
PARTICULAR |
|
30.06.2008 |
30.09.2008 |
|
Type |
|
1st Quarter |
2nd Quarter |
|
Sales Turnover |
|
73.200 |
75.000 |
|
Other Income |
|
6.000 |
1.400 |
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Total Income |
|
79.200 |
76.400 |
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Total Expenditure |
|
67.200 |
51.300 |
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Operating Profit |
|
12.000 |
25.100 |
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Interest |
|
4.200 |
4.300 |
|
Gross Profit |
|
7.800 |
20.800 |
|
Depreciation |
|
5.600 |
5.600 |
|
Tax |
|
1.400 |
1.000 |
|
Reported PAT |
|
0.800 |
14.200 |
KEY RATIOS
|
PARTICULARS
|
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
0.07 |
0.00 |
0.00 |
|
Long Term Debt-Equity Ratio |
0.07 |
0.00 |
0.00 |
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Current Ratio |
2.38 |
4.46 |
5.08 |
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TURNOVER RATIOS |
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Fixed Assets |
2.52 |
3.28 |
2.70 |
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Inventory |
0.00 |
0.00 |
0.00 |
|
Debtors |
1.28 |
1.66 |
3.07 |
|
Interest Cover Ratio |
1.74 |
49.42 |
82.33 |
|
Operating Profit Margin(%) |
12.33 |
21.65 |
27.85 |
|
Profit Before Interest And Tax Margin(%) |
5.52 |
16.25 |
22.59 |
|
Cash Profit Margin(%) |
7.78 |
19.35 |
24.37 |
|
Adjusted Net Profit Margin(%) |
0.97 |
13.95 |
19.11 |
|
Return On Capital Employed(%) |
1.97 |
7.05 |
8.76 |
|
Return On Net Worth(%) |
0.37 |
6.07 |
7.43 |
LOCAL AGENCY
FURTHER INFORMATION
BUSINESS PERFORMANCE
Result of
Operations
During the year,
the company achieved strong business growth, and was successful in delivering high
value to the customers worldwide.
Revenues
Total income in
financial year 2007-08 is Rs. 380.33 Millions (Previous year Rs. 375.33
Millions) and Rs. 1768.89 Millions as per the Consolidated Accounts (previous
Year Rs. 1,629.23 Millions).
Operating Profit
at Rs. 45.79 Millions (previous year Rs. 79.06 Millions) and Rs. 193.51
Millions as per Consolidated Accounts (previous year Rs. 108.32 Millions)
Profit after tax is Rs. 3.58 Millions or 0.94% of total income (Previous Year
Rs. 50.91 Millions or 13.57% of total income) and Rs. 50.49 Millions or 2.85%
as per the Consolidated Accounts (Previous Year Rs. 9.48 Millions or 0.58 % of
total income)
During the year,
the Company increased its client base across the globe. The company continues
to grow towards becoming the Industry leader in this domain, leveraging their
excellence in technology, domain and processes and continue to get 80% of
revenues from existing customers. The company has incurred capital expenditure
of Rs. 36.34 million for infrastructure and facilities. The company has
incurred Rs. 78.82 Million on R&D expenses, up from Rs. 51.23 Million.
Liquidity
The company
continues to generate cash from operations and been able to manage working
capital requirements and had cash equivalents of Rs. 18.96 Million as on March
31, 2008.
SUBSIDIARIES:
They have four
subsidiaries; Four Soft B.V, Netherlands, Four Soft Singapore Pte Limited, Four
Soft Malaysia Sdn Bhd, Four Soft Nordic A/S, Denmark and six step down
subsidiaries Four Soft Netherlands B.V, Netherlands, Four Soft UK Limited, Four
Soft USA Inc., Four Soft Japan, KK, Four Soft (HK) Limited, and Four Soft
Australia Pty Limited
Four Soft B.V
Netherlands
In September 2004,
the company acquired CargoMate international B.V and the same was renamed as
Four Soft B.V.
In September, 2005
the company acquired DCS T&L division with four entities for a 100% cash
consideration of US$ 19.00 million through its subsidiary Four Soft B.V. the
acquisition was part financed through debt funding of GBP 5.72 million from
leading Indian bank, based of UK. Presently, Four Soft B.V. holds three
subsidiaries viz., Four Soft UK Limited, Four Soft Netherlands B.V and Four
Soft USA Inc.
Four Soft Singapore
Pte. Limited
In May 2005 the
company acquired Comex Frontier Pte Limited (renamed as Four Soft Singapore Pte
Limited). The Company generated revenues of SG$ 1.66 Million, with operational
profit (EBITDA) of SG$ 0.06 million and a net loss of SG$ 0.03 Million. The
company is expected to break even in next financial year.
Four Soft Malaysia
Sdn Bhd
In May 2005, the
company acquired MY Comex Sdn. Bhd. (renamed as Four Soft Malaysia Sdn Bhd.).
The company generated revenues of RM 0.37 Million, with a net loss of RM 0.16
Million. The Company is expected to break even in next financial year.
Four Soft Nordic
A/S.
In January 2007,
the company acquired Transaxiom Holding A/S and after the name of the company
was changed to Four Soft Holding A/S. Four Soft Holding A/S merged with Four
Soft Nordic A/S on the date of acquisition. Four Soft Nordic A/S along withnet
profit of DKK 9.35 Million.
INDUSTRY SOLUTIONS
Presently, the
company offers solutions in the areas of Freight forwarding industry, Customs
brokerage, Contract Logistics, Shipper Logistics and Services. Products in
Freight forwarding industry include eTrans, iLogistics, eSupply and eTrans SME.
Services include Consulting, Software Development and System Integration and
Implementation.
The Annual Reports
of all the subsidiaries of the Company viz. Four Soft B.V Netherlands, Four
Soft Singapore Pte Limited, Four Soft Malasia Sdn Bhd and Four Soft Nordic A/S
have been attached to this report as required under section 212 of the
Companies Act, 1956.
QUALITY
Product
Development and delivery are critical to any software product and solutions
company, thus improving customer satisfaction. Continuous Quality improvement
and adherence to quality standards and processes are important to remain
competitive in the global market. During the year, the company has focused on
improving quality in every process, including project delivery, product
development, Testing and implementation. The company is in the process of
performance improvement through various measures and initiatives, including
CMMi and Six Sigma processes.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
The financial
statements have been prepared in compliance with the requirements of the
Companies Act 1956, and Generally Accepted Accounting Principles (GAAP) in
India. The Management of Four Soft accepts responsibility for the integrity and
objectivity of these financial statements, as well as for various estimates and
judgments used therein. The estimates and judgments relating to the financial
statements have been made on a prudent and reasonable basis, in order that the
financial statements reflect in a true and fair manner the form and substance
of transactions, and reasonably present the company's state of affairs and
profits for the year.
The following
discussion may include forward looking statements which may involve risks and
uncertainties, including but not limited to the risks inherent to Company's
growth strategy, dependency on certain clients, dependency on availability of
qualified technical personnel and other factors discussed in this report.
Industry Structure
and Developments
Four Soft operates
in a niche market domain of Supply Chain Management solutions for Transportation,
Logistics, Freight Forwarding and Distribution Business. These solutions
improve efficiency, visibility and integration to third party software and
systems. The Company product development (India Technology Centre) and Global
Delivery centre is located at Hyderabad with sales and support offices in UK,
Netherlands, Denmark, USA, Singapore and Japan. Four Soft continues to be a
global leader in Supply Chain Execution Software Solutions for Freight
Forwarding and Transportation domain.
Opportunities and
Threats
Growth through
Organic and Inorganic Mode
Four Soft has
shown consistent increase in its revenues and profit before tax, as a result of
inorganic and organic growth. In software product business working in high
technology growth area, inorganic growth is best preferred. However they try to
grow organic business, their license sales is linked to growth in business of
customers. They offer the breadth of product suite offering to their existing
customers.
Their customers
continue offering value added services in multiple geographies to their
customers. They endeavor to offer new service offerings built around their
products to cover all the value added services. Most of their business comes
from existing customer base.
Inorganic growth is
a key element in their exponential growth. They have achieved global leadership
with the acquisitions done in past. The next steps going forward, is to
identify the key markets, product strategy and cross selling their products
etc., The next step is to conduct a gap analysis and pin point the main areas
for improvement of product offering and strategize their products to the needs
of customers through technology innovation and product offerings.
Market Opportunity
With the multiple
acquisitions Four Soft has made in the last three years, its product portfolio
got extended horizontally. Today it offers software solutions for
Transportation, Logistics, 3PL/4PL providers, Distributions, solutions for
Freight forwarding industry, Customs brokerage, Contract Logistics, Shipper
Logistics and Services. These offerings built on latest internet technologies,
using J2EE, give the best position for Four Soft in the industry and provide an
opportunity for product offerings in this domain.
With the growing
complexity of operations in this domain, it is extremely important to get the
real-time visibility in the supply chain execution and ensure that information
moves seamlessly across the supply chain, including internal systems and
multiple external systems.
Business Segments
and Industry Outlook
Business Segments
Four Soft offers
custom developed software solutions apart from product licenses. The prime
growth area in business is software solutions for the transportation and
logistics domain.
The Software
Products offered by Four Soft are 4S eTrans, 4S eLog, 4S eSupply, 4S
iLogistics, 4S iDrive, 4S Visilog. 4S iShipping, 4S ePoms, 3Plex and 4S
eCustoms.
Freight Forwarding
Solutions
Built on the
cutting edge technology of J2EE, Spring and SOA architecture; 4S eTrans is a
multi-modal, web-centric application for transportation companies - designed to
give operational and financial control of global and domestic freight
movements, from order to cash.
4S eTrans is
offered for Large, Medium and Small customers and provides real time data
visibility and improved operational profitability. The SME version provides
solutions for Small and Medium Enterprises.
4S iLogistics
built on IBM iSeries, provide solutions for Freight and logistics business of
global organizations.
Contract Logistics
4S suite of
products built for logistics service providers extends well beyond the
capability of traditional warehouse and inventory management systems by integrating
supply, fulfillment and partner collaboration into one enterprise service
platform. The WMS module contains all the functionality required by warehousing
and distribution organizations. Its distributed processing approach supports a
wide variety of facilities, including hub-and-spoke distribution centers. These
capabilities help a 3PL meet the demands of continuous replenishment strategies
while lowering inventory and shipping costs, and increasing visibility into the
supply chain.
The solutions in
the offering include 4S eLog, a web centric application that fulfils
warehousing and contract logistics for 3PL companies with capabilities to
handle order management, fulfillment and partner collaboration.
Shipper Logistics
4S Visilog is a
world class business application designed as an efficient solution for managing
supply chain activities in the distribution network, whether company owned or
outsourced to third parties. It enables step-by-step implementation and can be
adapted, as needs change. Its open architecture makes it easy to integrate with
other systems and capably extend ERP into supply chain execution. It is
designed to handle business processes order management, transpiration
management, warehouse management and event management. It also enables various
elements of the supply chain to be connected on real time basis using web
technology and collaborate for overall benefits to the supply chain.
Customer Base
Their clientele
includes worlds top 12 Transport and Logistics customers. This gives them the
market leadership and enables them to grow significantly and increase their
market share and grow significantly with time.
Quality
The company is
dedicated to maintain the highest level of quality standards and processes in
its development and delivery teams and overall process improvement to achieve
the quality certification. Presently the company is ISO 9001:2000 certified.
Acquisitions
Inorganic growth
through acquisitions has been the significant element their strategy. It is
critical to manage integration seamlessly across the organization during the
acquisition phase, as their ability to serve customers is at higher than
expected levels and thus demands their associates' contribution to make the
acquisitions successful. Most of these acquisitions are at low margin companies
and to turnaround them to profitable and higher margin companies is always
challenging. They need to continue leveraging the strengths of combined
entities. The Company believes that the company has executed the acquisitions
well with proper strategy and planning.
DISCUSSION ON
FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
Financial
Condition
Share Capital:
The company has
only two classes of shares – Equity and Preference Shares. The Authorize Share
capital is Rs. 350 Million divided in to 5,60,77,600 equity shares of Rs. 5/-
each and 6,96,120 Redeemable preference Shares of Rs. 100/- each. During the
year, there was no change in the company's Authorized Share Capital and
continues to stand at Rs. 350 Millions.
Additional
information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of
Schedule VI to the Companies Act, 1956
The Company is
primarily engaged in the development and maintenance of computer software. The
production and sale of such software cannot be expressed in any generic unit.
Hence it is not possible to give quantitative details of sales and certain
other information as required under paragraph 3, 4C and 4D of Part II of
Schedule VI to the Companies Act, 1956.
Investments
In December 2006
the Company had entered into a share purchase agreement for purchase of 100% of
the outstanding equity shares of Transaxiom Holding A/S, Denmark (Subsequently
renamed as Four soft Nordic A/S, Denmark) from its erstwhile shareholders in consideration
not exceeding Danish Kroner (DKK) 69,000,000. The aggregate purchase
consideration is to be determined based on the average eligible revenues of the
acquired entity over a period of 36 months ending December 31, 2009 payable in
cash and shares of the company. Till March 31, 2008, the company has, based on
certain payment milestones, paid an aggregate amount of DKK 31,618,887
(equivalent Rs.251.223 Millions) towards purchase consideration; which has been
recorded as investment.
The Company had set-up
a 25% joint venture on March 6, 2002 by name Four Soft International Inc., USA
to undertake business development and marketing activities in North America.
The said Joint venture agreement has been terminated with effect from March 12,
2008. The Company had, in the earlier years already provided for the carrying
value of investment of Rs.7.699 Millions in the joint venture.
CONTINGENT
LIABILITIES NOT PROVIDED FOR:
|
|
As at 31.03.2008 Rs.
In Million |
|
Guarantees
given on behalf of overseas subsidiary (All
the movable fixed assets of the company have been hypothecated with Unit
Trust of India Advisory Services Limited, who are acting as on shore security
trustee for ICICI Bank Plc. For the facility taken by Four Soft B.V., The Netherlands from ICICI Bank Plc). |
372.153 |
|
Income
tax demand in respect of which the Company has gone on appeal. Management
is of the opinion that appeal is likely to be accepted by appellate
authority. |
2.626 |
|
Contingent
liability in respect of additional purchase consideration payable to
erstwhile shareholders of Transaxiom Holding A/S (Subsequently renamed as
Four Soft Nordic A/s), Denmark, the financial effect of which is not
measurable. |
|
Fixed Assets
- Computer
- Office Equipment
- Furniture and Fittings
- Building
- Lease Hold Improvements
- Intangibles - Software
WEBSITE
DETAILS
PROFILE:
Four Soft is the world's largest transportation and logistics software products
company providing innovative and integrated enterprise solutions ensuring
customer satisfaction. Founded in 1999, Four Soft software engineers are
providing solutions to enterprises across the SCM market place. Four Soft is
head quartered in Hyderabad, India and has 10 development centres across the
globe to cater to large clientele. The company's headquarter is registered as
100% Export oriented unit under the Software Technology Park (STP) scheme of
Govt of India. Four Soft is a Public Limited Company since April 2003 and has
been registered in India's top Stock exchanges - NSE and BSE. With ISO
9001:2000 certification, SEI-CMMi quality initiatives and excellent development
teams, Four Soft has been successfully empowering its customers with innovative
end-to-end technology solutions.
The Four Soft portfolio of products comprises logistics software
solutions for freight forwarders, NVOCCs, customs brokers, container freight stations,
ships agents, warehouses, cartage, trucking and 3PL / 4PL companies. Four Soft
currently has 300 customers with 50,000 plus users in across 120 countries.
Leveraging the world-class product delivery capabilities, technological talent,
domain expertise and strategic partnerships with major vendors and growing
client base, Four Soft has become a key player in the global IT SCM market.
Four Soft has consistently demonstrated its commitment to developing
cost-effective, quality applications by adhering to strict time-lines. This has
enabled Four Soft to work with some of the Fortune 200 / 500 / 1000 companies
as their technology “Partner of Choice” on a continuous basis.
PRESS
RELEASES:
Four
Soft strengthens its management team with appointment of New CEO Rajshekhar
Roy, the new CEO, to drive continued business growth of Four Soft
Hyderabad
14, October 2008
Four Soft (4S) (NSE: "FOURSOFT",
BSE: 532521), a global leader in software solutions for transportation and
logistics industry, announced today that Rajshekhar Roy is appointed as the new
CEO, who will take over the role from Palem Srikanth Reddy, the Chairman and
Founder of the company who was also playing the role of CEO. Biju Nair, the
current Sr. VP – Finance would be the new CFO.
Raj had joined Four Soft in October 2007 as the Head of Global Delivery and was
promoted as the Chief Operating Officer in April 2008. He is an MBA in
Marketing from the Indian Institute of Management, Calcutta. He also holds a
Bachelor’s degree in Computer Science and Engineering from Jadavpur University,
Kolkata. Raj brings with him over 20 years rich business management experience
in the areas of software services, business process outsourcing and management
consulting. He is also a certified trainer in Organization Development, Change
management and Quality management.
Mr. Rajshekhar Roy said, “Four Soft is poised to take advantage of the
opportunities that exist in the logistics marketplace that we address with our
product and service offerings. We are fortunate to have committed employees,
outstanding customers and state-of-the- art solutions and services. I look
forward to further help the company to explore new opportunities in expanding
the product portfolio, opening up new regions as markets and capture additional
market share in transportation and logistics segment.” He further added, “It is
also encouraging to observe that inspite of the economic turmoil that has
broken out recently, our target market segments that we serve are continuing to
offer good scope for increased business.”
On the appointments, Mr. Srikanth Palem, Chairman, Four Soft commented, “Over
the past several months, I have actively engaged Raj to take on CEO’s role. His
proven track record at Four Soft, along with his commitment to Four Soft
employees, stakeholders and customer satisfaction, uniquely qualify him to lead
Four Soft’s continuing development. Now with Raj onboard, I would have more
bandwidth to focus on strategic initiatives that would help us to excel in the
market place and improve value for the shareholders. I would also possibly take
up additional social responsibilities. Biju Nair is engaged with Four Soft from
the inception of the project and is aptly positioned to act in the capacity of
CFO and support Raj on the financial strategies to be employed to drive the
company to the next level of growth.”
About
Four Soft Limited
Four Soft is an enterprise solutions company providing innovative software
products, exclusively for the freight, transportation, logistics and supply-chain
management market place and also offers IT consultancy services. It is the
market leader in the transportation and logistics segment with a large
international client base including the majority of the top transportation and
logistics companies in the world. With regional offices strategically located
worldwide, it has its software development centre in HITEC city of Hyderabad,
India. The Company has large customers including DHL, Kuehne+Nagel, Schenker,
PWC Logistics, UTI and Geodis.
Additional information about Four Soft is available at www.four-soft.com
Four Soft offers a full suite of web-based products across the logistics supply
chain. This includes 4S eTrans for Freight Forwarding and Logistics, 4S eLog
for warehouse management, 4S ePOMS and 4S
VisiLog for Track and Trace, Visibility and
Supply Chain Management, 4S eCustoms for Customs
Brokerage, 4S iShipping for Shipping Line execution and 4S eConnect for
Business-to-Business Connectivity.
Four
Soft unaffected by financial crises; accomplishes 217% profit growth in the
Second Quarter Rajshekhar Roy, the new CEO, to drive continued business growth
of Four Soft
Financials at a glance for the quarter ended
September 2008
REVENUES Rs. 383.20 million (-8% YoY)
EBIDTA Rs. 69.34 million (+81% YoY)
PBT Rs.
50.29 million (+217% YoY)
PAT Rs.
40.38 million (+254% YoY)
Highlights for the
quarter
·
3 new customers signed across geographies
·
Strategic wins in this quarter include one of the largest 3PLs in India
·
Successful implementation of the flagship products at several
prestigious customer locations
·
Rajshekhar Roy takes over as CEO
Hyderabad , 27 October, 2008 Four Soft (4S)
(NSE: "FOURSOFT", BSE: 532521), a global leader offering software
solutions for transportation and logistics industry, today announced strong
financial results for its second fiscal quarter ended September 30, 2008. The
PAT grew to Rs. 40.38 million for the quarter ended September 30, 2008, as
compared to Rs. 11.41 million in the corresponding quarter last year. The
revenues were of Rs. 383.20 million for the quarter ended September 30, 2008 as
compared to Rs. 418.48 million in the corresponding quarter last year.
The quarter has seen a significant jump in profits due to increased
operational efficiency and favorable foreign exchange rates. During the
quarter, the company also successfully implemented its flagship products at
numerous customer sites across the globe. The Company has established itself in
the domestic market by adding 7 customers in the last one year and also hopes
to further strengthen its presence by penetrating deeper into the Indian
transportation and logistics industries.
The company has recorded Rs. 1,111.43 million in sales and a PBT of Rs.
418.36 million for the first half year of the year.
Mr. Biju S Nair, CFO, Four Soft Limited Said, “Four Soft has been
witnessing a strong growth in profits for last three quarters. We are in a
stronger financial position and are taking all possible measures to de-risk the
company from any possible economic slowdown.”
Mr. Rajshekhar Roy, CEO added, “I am happy to state that we are seeing
significant progress in terms of adding new customers in our existing markets
specifically India, Japan and Europe. We are also focusing on new markets such
as China, where we hope to build a sizable presence by the end of this
financial year. The company has also started the implementation of Lean
Management - this will play a major role in improving internal efficiencies
thereby increasing profitability.”
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.49.25 |
|
UK Pound |
1 |
Rs.80.36 |
|
Euro |
1 |
Rs.62.84 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
|
63 |
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 |
|