MIRA
INFORM REPORT
|
Report Date : |
05.06.2013 |
IDENTIFICATION DETAILS
|
Name : |
NET 4 |
|
|
|
|
Registered
Office : |
AB-11, Community Centre, Safadar Jung Enclave, New Delhi-110029 |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2012 |
|
|
|
|
Date of
Incorporation : |
29.11.1985 |
|
|
|
|
Com. Reg. No.: |
55-022649 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs. 200 583 millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L72200DL1985PLC022649 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
DELN03836A |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACT0291M |
|
|
|
|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
|
|
|
|
Line of Business
: |
Providing IP Communications sales and services. |
|
|
|
|
No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (46) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 5000000 |
|
|
|
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
Slow but correct |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well
established company having satisfactory track record. Trade relations are
fair. General financial position is satisfactory. Payments are slow but
correct. The company can be
considered normal for business dealings at usual trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 30, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
ICRA |
|
Rating |
Fund based limits and term loans : BB+ |
|
Rating Explanation |
Moderate risk of default and high credit risk. |
|
Date |
September, 2012 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
LOCATIONS
|
Registered Office : |
AB-11, Community Centre, Safadar Jung Enclave, New Delhi-110029, India |
|
Tel. No.: |
91-11-26711150 / 54 |
|
Fax No.: |
91-11-41653217 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate Office : |
D – 25, Sector – 3, Noida-201301, Uttar Pradesh, India |
|
Tel. No.: |
91-120-4323500 |
|
Fax No.: |
91-120-4323520 |
|
|
|
|
Branch Office : |
Located at · Ahmedabad Bangalore Chandigarh Cochin
Coimbatore Chennai Delhi Hyderabad Kolkata Mumbai Pune |
DIRECTORS
As on 31.03.2012
|
Name : |
Mr. Jasjit Singh Sawhney |
|
Designation : |
Chairman and Managing Director |
|
Qualification : |
B. A. (Hons.) and more than 17 years experience |
|
Experience : |
39 years |
|
Date of Appointment : |
January 05, 2000 |
|
|
|
|
Name : |
Mr. Amarjit Singh Sawhney |
|
Designation : |
Whole-Time Director |
|
Qualification : |
B.A. Economics and more than 42 years experience |
|
Experience : |
72 years |
|
Date of Appointment : |
January 05, 2000 |
|
|
|
|
Name : |
Mr. Desi Subri Valli |
|
Designation : |
Non-Executive Directors |
|
|
|
|
Name : |
Mr. Brijesh Chand Mathur |
|
Designation : |
Non-Executive Directors |
|
|
|
|
Name : |
Mr. Manish Wadhawan |
|
Designation : |
Non-Executive Directors |
|
|
|
|
Name : |
Mr. Surya S. Chadha |
|
Designation : |
Non-Executive Directors |
|
|
|
|
Name : |
Mr. Kamlesh Gandhi |
|
Designation : |
Non-Executive Directors |
|
|
|
|
Name : |
Mr. Sandip Kumar Ghosh |
|
Designation : |
Non-Executive Directors |
KEY EXECUTIVES
|
Name : |
Ms. Archna Walia |
|
Designation : |
Company Secretary |
|
|
|
|
Name : |
Ms. Pragati Agarwal |
|
Designation : |
Head – Finance & Accounts |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2013
|
Category
of Shareholder |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
596548 |
2.97 |
|
|
6769259 |
33.75 |
|
|
7365807 |
36.72 |
|
|
|
|
|
|
546000 |
2.72 |
|
|
3500000 |
17.45 |
|
|
4046000 |
20.17 |
|
Total
shareholding of Promoter and Promoter Group (A) |
11411807 |
56.89 |
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
8076 |
0.04 |
|
|
1000000 |
4.99 |
|
|
1008076 |
5.03 |
|
|
|
|
|
|
3330823 |
16.61 |
|
|
|
|
|
|
379080 |
1.89 |
|
|
520940 |
2.60 |
|
|
3407524 |
16.99 |
|
|
92856 |
0.46 |
|
|
3308250 |
16.49 |
|
|
6418 |
0.03 |
|
|
7638367 |
38.08 |
|
Total Public
shareholding (B) |
8646443 |
43.11 |
|
Total (A)+(B) |
20058250 |
100.00 |
|
(C) Shares held by
Custodians and against which Depository Receipts have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total
(A)+(B)+(C) |
20058250 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Providing IP Communications sales and services. |
GENERAL INFORMATION
|
Customers : |
· Airtel HCL CIPLA Godrej Ranbaxy SMC TVS Infotech NIIT Dabur Toyota |
|||||||||||||||||||||
|
|
|
|||||||||||||||||||||
|
No. of Employees : |
Not Available |
|||||||||||||||||||||
|
|
|
|||||||||||||||||||||
|
Bankers : |
· State Bank of India, South Extension, Part – I, New Delhi – 110049, India State Bank of Travancore, Sector 18, Noida, Uttar Pradesh,
India · ICICI Bank Limited Kotak Mahindra Bank Limited |
|||||||||||||||||||||
|
|
|
|||||||||||||||||||||
|
Facilities : |
Note: Term Loan SBI was taken in FY 2011-12 and carries interest @ 5%+SBI Base Rate p.a. The loan is repayable in 60 monthly installments. Term Loan is secured by hypothecation of entire curent assets and fixed assets of the company, It is also secured against residential properties of situated at Brighton, East Sussex, Londaon and B-4/39, Safdarjung Enclavew New Delhi, Land and Building at D 25, Sector 3, Noida, Agricultural Land in Gurgaon Further, the loan has been secured bypersonal guarantee of the directors. Vehicle loan fom Kotak Mahindra and ICICI Bank is secured by hypothecation of vehicles. The loan is repayable in monthly installments and carries interest @ 10%-12% p.a. Cash Credit from State Bank of India is secured by hypothecation of entire curent assets and fixed assets of the company. It is also secured against residential properties of situated at Brighton, East Sussex, Londaon and B-4/39, Safdarjung Enclavew New Delhi, Land and Building at D 25, Sector 3, Noida, Agricultural Land in Gurgaon Further, the loan has been secured by personal guarantee of the directors. The cash credit is repayable on demand and carries interest @ 4%+SBI Base rate p.a. Cash Credit from State Bank of Travancore is secured by margin money and hypothecation of entire curent assets of the company and Fixed Deposit of 25% of sanctioned facilities.The loan has been guaranteed by corporate guarantee of Net 4 Communications Ltd and personal guarantee of the directors. The cash credit is repayable on demand and carries interest @ 4.5%+SBT Base rate p.a. |
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Sandy Associates Chartered Accountants |
|
Address : |
104, Delhi Chamber, Delhi Gate New Delhi-110002, India |
|
|
|
|
Subsidiaries : |
Domestic · Net 4 Communications Limited Pipetel Communications Private Limited Net 4 Network Services Limited Overseas · Net 4 HK Limited |
|
|
|
|
Entity having
Significant Influence: |
· Trak Online Net India Private Limited Jiwan Financial Holdings Limited |
CAPITAL STRUCTURE
As on 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
24000000 |
Equity Shares |
Rs.10/- each |
Rs. 240.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
20058250 |
Equity Shares |
Rs.10/- each |
Rs. 200.583 Millions |
|
|
|
|
|
Reconciliation of the number of shares and
amount outstanding at the beginning and at the end of the reporting period.
|
Particulars |
31.03.2012 |
|
|
|
No. |
Rs. In millions |
|
Equity Shares with voting rights |
|
|
|
At the beginning of the period |
20,058,250 |
200.583 |
|
Issued during the period |
-- |
-- |
|
At the end of the period |
20,058,250 |
200.583 |
Details of shareholders
holding more than 5% shares in the company
|
Particulars |
31.03.2012 |
|
|
|
No. |
% holding |
|
Equity Shares with voting rights |
|
|
|
Jiwan Financial Holdings Limited |
3,500,000 |
17.45% |
|
Trak Online Net India (P) Limited |
4,900,000 |
24.43% |
|
Sterling Capital (P) Limited |
2,387,167 |
11.90% |
|
Madison India Capital HC |
1,697,812 |
8.46% |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
200.583 |
200.583 |
184.478 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1049.832 |
808.748 |
515.457 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
1250.415 |
1009.331 |
699.935 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
600.687 |
324.531 |
255.486 |
|
|
2] Unsecured Loans |
276.225 |
231.118 |
177.029 |
|
|
TOTAL BORROWING |
876.912 |
555.649 |
432.515 |
|
|
DEFERRED TAX LIABILITIES |
77.700 |
65.260 |
57.560 |
|
|
|
|
|
|
|
|
TOTAL |
2205.027 |
1630.240 |
1190.010 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
517.454 |
480.076 |
376.456 |
|
|
Capital work-in-progress |
50.880 |
20.202 |
13.308 |
|
|
|
|
|
|
|
|
INVESTMENT |
250.194 |
215.858 |
210.787 |
|
|
DEFERRED TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
464.604
|
219.985 |
195.038 |
|
|
Sundry Debtors |
813.675
|
569.364 |
289.661 |
|
|
Cash & Bank Balances |
95.567
|
43.776 |
41.074 |
|
|
Other Current Assets |
1.077
|
0.100 |
51.328 |
|
|
Loans & Advances |
684.604
|
611.234 |
347.787 |
|
Total
Current Assets |
2059.527
|
1444.459 |
924.888 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
434.230
|
296.574 |
130.141 |
|
|
Other Current Liabilities |
187.607
|
207.109 |
54.347 |
|
|
Provisions |
51.191
|
26.672 |
151.091 |
|
Total
Current Liabilities |
673.028
|
530.355 |
335.579 |
|
|
Net Current Assets |
1386.499
|
914.104 |
589.309 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.150 |
|
|
|
|
|
|
|
|
TOTAL |
2205.027 |
1630.240 |
1190.0.10 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
3026.403 |
1969.750 |
1083.770 |
|
|
|
Other Income |
70.597 |
65.434 |
38.825 |
|
|
|
TOTAL (A) |
3097.000 |
2035.184 |
1122.595 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Sales and Services |
2117.151 |
1259.070 |
|
|
|
|
Employee Benefit Expenses |
136.456 |
129.819 |
|
|
|
|
Other Expenses |
199.841 |
205.334 |
|
|
|
|
TOTAL (B) |
2453.448 |
1594.223 |
879.365 |
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE INTEREST, TAX,
DEPRECIATION AND AMORTISATION (A-B) (C) |
643.552 |
440.961 |
243.230 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
126.755 |
80.336 |
45.927 |
|
|
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
516.797 |
360.625 |
197.303 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
170.775 |
138.396 |
91.118 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX (E-F) (G) |
346.022 |
222.229 |
106.185 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
112.144 |
73.401 |
36.668 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) AFTER TAX (G-H) (I) |
233.878 |
148.828 |
69.517 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Dividend |
0.000 |
0.000 |
6.518 |
|
|
|
Tax on Dividend |
0.000 |
0.000 |
0.154 |
|
|
|
Dividend and Tax thereon short proposed in earlier years |
0.000 |
1.073 |
0.000 |
|
|
|
Proposed Dividend & Tax thereon written back |
0.000 |
0.000 |
(13.957) |
|
|
|
Excess provision for tax for earlier years, written back |
(1.596) |
(0.720) |
0.000 |
|
|
|
Transferred to General Reserve |
0.000 |
0.000 |
1.740 |
|
|
BALANCE CARRIED TO
THE B/S |
235.474 |
148.475 |
75.062 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Income from Sales and Services |
124.053 |
153.342 |
53.658 |
|
|
TOTAL EARNINGS |
124.053 |
153.342 |
53.658 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Capital Goods |
0.519 |
13.326 |
0.539 |
|
|
TOTAL IMPORTS |
0.519 |
13.326 |
0.539 |
|
|
|
|
|
|
|
|
|
|
Earnings /
(Loss) Per Share (Rs.) |
11.66 |
7.63 |
4.02 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2012 |
30.09.2012 |
31.12.2012 |
31.03.2013 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
4th
Quarter |
|
Net Sales |
633.700 |
762.900 |
828.400 |
934.400 |
|
Total Expenditure |
529.800 |
632.000 |
692.700 |
817.300 |
|
PBIDT (Excl OI) |
103.900 |
130.900 |
135.700 |
117.100 |
|
Other Income |
18.100 |
14.600 |
16.100 |
16.300 |
|
Operating Profit |
122.000 |
145.500 |
151.900 |
133.400 |
|
Interest |
17.200 |
42.900 |
36.700 |
29.600 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
PBDT |
104.900 |
102.500 |
115.200 |
103.700 |
|
Depreciation |
41.300 |
45.900 |
50.900 |
56.400 |
|
Profit Before Tax |
63.600 |
56.700 |
64.300 |
47.300 |
|
Tax |
20.900 |
18.200 |
20.900 |
15.400 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
42.800 |
38.500 |
43.400 |
31.900 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
0.000 |
|
Net Profit |
42.800 |
38.500 |
43.400 |
31.900 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
7.55
|
7.31 |
6.19 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
11.43
|
11.28 |
9.80 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
13.43
|
11.55 |
8.16 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.28
|
0.22 |
0.15 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt/Networth) |
|
0.70
|
0.55 |
0.15 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.06
|
2.72 |
2.76 |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
Yes |
|
8] |
No. of employees |
No |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact
person |
No |
|
11] |
Turnover of firm for last
three years |
Yes |
|
12] |
Profitability for last
three years |
Yes |
|
13] |
Reasons for variation
<> 20% |
----- |
|
14] |
Estimation for coming
financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister
concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
Yes |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details
(if applicable) |
No |
|
21] |
Market information |
----- |
|
22] |
Litigations that the firm
/ promoter involved in |
----- |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking
account |
----- |
|
26] |
Buyer visit details |
----- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if
applicable |
Yes |
|
29] |
Last accounts filed at
ROC |
Yes |
|
30] |
Major Shareholders, if
available |
Yes |
|
31] |
Date of Birth of
Proprietor/Partner/Director, if available |
No |
|
32] |
PAN of
Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating,
if available |
Yes |
CORPORATE INFORMATION
Subject is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on BSE and NSE stock exchanges in India. The Company is India’s leading Data Centre, Cloud Hosting and Network services provider. Net4 focuses on providing services to businesses (small, medium and large) and its offerings include Data Centre & Cloud Solutions Enterprise Internet Services, VoIP Solutions, and Enterprise Messaging and Hosting Solutions and Domain name registration. The company caters to both domestic and international markets. Net4 has the distinction of being the first Internet services company in the World to be IS0 27001 certified, for Information Security standards adopted at its Data Centers. It is also ISO 9001:2000 certified, a Microsoft Gold Partner and an ICANN & .IN accredited Domain Name Registrar.
UNSECURED LOAN
|
Particulars |
31.03.2012 (Rs.
in Millions) |
31.03.2011 (Rs.
In Millions) |
|
LONG TERM
BORROWINGS |
|
|
|
From Banks/Institutions |
4.019 |
16.840 |
|
From Others |
20.500 |
20.500 |
|
Fixed Deposits |
70.052 |
63.718 |
|
SHORT TERM
BORROWINGS |
|
|
|
Fixed Deposits |
64.998 |
60.893 |
|
Inter Corporate Loans |
116.656 |
|
|
Total |
276.225
|
231.118
|
Note:
Unsecured Loan from Banks and Financial Institutions carries interest @ 7% to 19% p.a.and is repayable in monthly installments. Deposits from public carry interest @ 11% to 12.5 % and are repayable on maturity. Inter Corporate deposits from carry interest @ 15% to 17% and are repayable on maturity
PERFORMANCE
The
Company continuously focused on growth and has posted another year of impressive
performance with highest ever top line and highest earnings since inception.
This is due to focused plans to work out on the growth strategies of the
Company. The underlying performance reflects the inherent strength and
operational excellence of the Company.
STANDALONE RESULTS
Standalone
financial results of 2011-12 in comparison to previous year 2010-11 Total
Income for the year increased by 52.17%, to Rs. 3097.000 millions from Rs.
2035.184 millions. Profit After Tax increased by 57.15%, to Rs. 233.878
millions from Rs. 148.828 millions Earning per share (EPS) increased by 52.82%,
to Rs.11.66/- per share from Rs. 7.63/- per share.
BUSINESS OVERVIEW
The
economy has considerably slowed down during the year and growth momentum was
tapered off in almost all the sectors on account of rising inflation,
depreciating rupee and higher interest costs, despite that the Company emerged
to achieve new heights of growth. It continues to work towards realizing the
vision “of being the most valued Network and Application Service Provider- with
innovative and differentiated offerings”. Since inception, within a short span
of time, it has grown multi-folds and became the largest provider of web
hosting services and domain name registration in India. Powered by a pool of
talented professionals and equipped with latest technologies, the Company
caters to the Web and Application Services, Data Centre and Cloud Computing and
Network and System Integration services to its clients.
SUBSIDIARY COMPANIES
As on the date, the Company has four
subsidiaries:
Net 4 Communications Limited was
incorporated in the year 2005 vide Certificate of Incorporation bearing
registration number U72900WB2005PLC104025 having its Registered Office at Kolkata.
The Company’s main business, is Computer-Hardware and Software for Internet
Access and Internet Telephony Services including VoIP Solutions.
Net4 Network Services Limited was
incorporated on May 18, 2011 vide Certificate of Incorporation bearing registration
number U72200DL2011PLC219357 in and under the Laws of India. The Company carry
on the business of providing Internet Related Services and VoIP Solutions.
Net4 HK Limited was
incorporated on May 11, 2011 vide Certificate of Incorporation bearing number
1598959 in and under the Laws of Hong Kong. The Company carry on the business
of Internet Related Services and VoIP Solutions.
Pipetel Communications Private
Limited was incorporated on September 4, 2009 vide Certificate of
Incorporation bearing registration number U64200DL2009PTC193950 in and under
the laws of India. It is mainly engaged into Enterprise Internet Services, VoIP
Solutions and Web Services billing and Provisioning Platform solutions.
MANAGEMENT
DISCUSSION AND ANALYSIS
KEY SERVICE
OFFERINGS
Web
Services
-
Web Hosting, Business/ Enterprise Emails, Domain Name Registration
-
Saas/ Hosted Application services (Microsoft Exchange, Sharepoint and CRM
Dynamics)
Data Centre and Cloud
-
Server Colocation, Rack and Cage Space, Managed Services, Security Services
Backup and Recovery
-
Cloud Servers, Enterprise Cloud, Hybrid Cloud and associated Managed Services
-
Dedicated Bandwidth Ports and Hosted VoIP
Network and System Integration
-
Network and System Integration for medium to large customers
-
Recent focus on Data Centre Consulting and Private Cloud and Virtualization
solutions
They
have had an exceptional year in 2011-12, significantly surpassing even their
own expectations. They invested in highly scalable cloud platforms and continue
to invest to upgrade, expand and add capacity to their Data Centre, Cloud and
Web Services infrastructure. Needless to say these two areas are the ones that
they are excited about and hence, from this year will have a separate strategic
category – Data Centre and Cloud Services – outside the erstwhile
categorisation
under web services. Application/SaaS services, regardless of whether they are
provisioned in a hosted model or on a cloud platform will be taken as a part of
Cloud services, under this category.
One
of the major tasks of this year was the work on designing and implementing a
highly scalable distributed architecture for their cloud infrastructure and
further automating the cloud provisioning and management system.
They
are near completion on a complicated project to redesign the backend of their
web services application to make it capable to handle multiple cctlds (Country
specific domain extensions) , various different language versions and front
ends, both for partners as a white label and also for their direct customers.
They continued to work towards bringing the best in class UI (User Interface)
to their users and partners and had one significant and one minor change to
their website during this period. Both, these activities, they feel, have
resulted in an extremely intuitive and customer friendly online experience and
a highly scalable and secure back end.
OVERVIEW
Leading
provider of enterprise services namely: Web Services, Data Centre and Cloud,
Enterprise Internet Access, Network Integration and VoIP
Main
focus on the small and medium businesses (SMB) with over 400,000 clients spread
across various services
Track
record of continuous growth in revenues and profits
-
35% sales CAGR (FY07-12)
-
28% EBITDA CAGR (FY07-12)
Listed
on BSE and NSE with a market capitalization of Rs. 2850.000 millions (approx.)
-
Headquartered in Noida with a pan-India Presence
BUSINESS EMAIL, HOSTING AND DOMAIN
REGISTRATION
They
saw a significant increase in business email services throughout the year,
mainly attributed to the following:
Bundling
free email ids with domain names and pushing the upsell, increased space and
enhanced features, a further enhanced web mail user interface, a highly user
friendly administration panel for high end users and their continued high
service quality levels.
They
feel that there are some gaps in the features set that they provide here and
are in the process of identifying suitable long term application partners to
address the needs of users who want Unified Communications and collaboration
services. This would not only make their product offering future proof, but
also enable to them to increase revenue per customer in the medium to long
term.
WEB HOSTING
The increased
storage space provided on their Web hosting packages has led to higher site
visitor conversions and their partner programme has led to many more, higher
space packs being sold. Their investments in storage systems for their Cloud
and SaaS services has given them significant breathing room to play with the
disk space provided in different hosting packs, thus de risking potential
competitor poaching. A number of self-help features in the new partner and end
user admin panels have led to higher customer satisfaction levels and
consequently word of mouth referrals.
They
also introduced Easy Site this year, which is an innovative and user friendly
software tool that allows users to create/design their own website, even more
easily than creating a power point presentation.
They
saw great enthusiasm, usage and trial conversions for this service even in the
restricted launch, which was a stripped down version. Their new version will be
much more user friendly and have 1000’s of templates and modules for specific
SME industry segments, including e-commerce capability. This, they feel will be
a critical differentiator for them in the hosting and overall web services
space. It will also lead to many more customers coming to them directly, rather
than through small web designers, leading to higher margin potential.
DOMAIN REGISTRATION
In
the domain registration business, new registrations grew at an extremely fast
pace this year, both from direct customers as well as partners/resellers. Their
focus on reseller market, innovative discounting and a multi year push were the
major drivers. In domain registrations, Net4 currently has 15% to 17% market
share in India. They have seen excellent traction in the last year, led by an
extremely low existing penetration and ourselves and organised competition
increasing the decibel level, with advertising and marketing, which has led to
creating further awareness.
IDN
cctlds in 12 Indian languages did not make it to the market as anticipated last
year. It does, however, seem extremely likely to be launched by October 2012.
Although they don’t see this as being a big contributor to number of domains in
the short run, it is an important part of the growth of multilingual content
that will drive the whole ecosystem in the long run.
The
big thing on the outlook is opening up of Gtlds by ICANN. There is likely to be
huge frenzy for applying for brand and generic Gtlds. This will throw up a
plethora of opportunities for them as a registrar and as Gtld solution provider
to large corporates and brands. They have already signed up 10 large Indian
corporates for being a turnkey solution provider and this will directly lead to
recurring services revenue in the Data Centre and cloud segment. Customers here
include: Reliance Industries, Airtel, Tata Group, SBI, HDFC etc.
New
generic extension will only hit the market by June 2013 and they feel that
there will be around 10 popular, well marketed and desirable extensions that
will have significant registrations. This will lead to at least 150,000 to
200,000 additional new registrations for Net4 over a 2 year period.
CONTINGENT
LIABILITIES:
(Rs. in millions)
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
|
(a) Claims against the company not acknowledged as debts |
0.256 |
0.256 |
|
(b) Guarantees |
|
|
|
Outstanding guarantees and counter guarantees to various banks, in respect of the guarantees given by those banks in favors of various government authorities and others |
20.696 |
1.060 |
|
Guarantees to banks against credit facilities extended to subsidiary |
683.200 |
411.200 |
|
Guarantees to Banks against credit facilities extended to associates |
0.000 |
100.000 |
|
(c) Others |
|
|
|
Disputed Income tax demand for A/Y 09-10, including interest, though appeal filed* |
26.561 |
0.000 |
|
Disputed Income tax demand for A/Y 08-09, including interest, though appeal filed* |
4.028 |
4.028 |
* Based on past experience, there is a highly fair chance of liability being quashed.
FIXED ASSETS
v
Tangible
Assets
Land
Building
Leasehold
Improvements
Computers
Office
Equipment
Furniture
and Fixtures
Vehicles
v
Intangible Assets
Goodwill
Trademarks
Hosting
Platform
Technology
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 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 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.56.64 |
|
|
1 |
Rs.86.69 |
|
Euro |
1 |
Rs.73.97 |
INFORMATION DETAILS
|
Report Prepared
by : |
MRI |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
4 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--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 |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
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 |
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 |
|
NB |
NEW BUSINESS |
||
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.