Upload
others
View
6
Download
0
Embed Size (px)
Citation preview
Stakeholders’ Education | Corporate Governance Research | Corporate Governance Score | Proxy Advisory
STAKEHOLDERS EMPOWERMENT SERVICES
1 | P A G E
SECTOR: IT - SOFTWARE REPORTING DATE: 2ND FEBRUARY, 2018
ZYLOG SYSTEMS LTD. www.zsl.com
Zylog Systems Ltd. NSE Code - ZYLOG TABLE 1 - MARKET DATA (STANDALONE) (AS ON 04TH DECEMBER, 2017)
Sector - IT - Software NSE Market Price (`) 3.75 NSE Market Cap. (₹Cr.) 22.01
Face Value (`) 5.00 Equity (` Cr.) 29.50
Business Group - NA 52 week High/Low (₹) 6.75/2.90 Net worth (₹Cr.)* -865.52
Year of Incorporation - 1995 TTM P/E (TTM) N.A. Traded Volume (Shares) 75,026
TTM P/BV N.A. Traded Volume (lacs) 2.81
Registered Office - Source – Capital line, TTM - Trailing Twelve Months, N.A. - Not Applicable, * As on 30th Sept 2017
# 155 Thiruvalluvar Salai, COMPANY BACKGROUND
Kumaran Nagar Sholinganallur, Zylog Systems Limited is an information technology (IT) enabler and solutions provider for
enterprises around the world. The Company is engaged in the business of exports of
software and IT related services. Its portfolio includes business solutions (customer
relationship management (CRM), enterprise resource planning (ERP) and enterprise
content management (ECM)) mobile computing, cloud computing, big data analytics and
data warehousing, enterprise infrastructure and managed services, and solutions,
including Zylog Field Power, Bank. Companion and Phoenix. Its field service processes
cover verticals, including heating, ventilating and air conditioning (HVAC), telecom, capital
equipment, construction, real estate, manufacturing, insurance, retail, logistics and
consumer electronics. Bank. Companion is a digital banking framework, which offers
digital banking solution for banks and credit unions. Its Phoenix renders support to
execute various insurance business operations.
Chennai – 600 119, Tamil Nadu
Company Website:
www.zsl.com
Revenue and Profit Performance
The revenue of the Company decreased from ₹42.12 crores
to ₹25.88 crores from quarter ending Sep’16 to quarter
ending Sep’17. The Company made a loss of ₹7.64 crores in
quarter ending Sep’17 vis-a-vis making a profit of ₹4.8 crores
in quarter ending Sep’16.
Source: Money control
Performance vis-à-vis Market
TABLE 2- Returns
1-m 3-m 6-m 12-m
Zylog Systems Ltd 0.00% 4.00% -18.48% -7.41%
Nifty -3.11% 1.91% 4.98% 23.95%
NIFTY IT 2.24% 5.64% 5.04% 11.33%
Source – Capital line/NSE
25.8830.55
42.12
-7.64 -5.15
4.80
-20
0
20
40
60
Sep'17 Mar'17 Sep'16
Quarterly revenue and Profit (₹ CRORE)
Revenue Profit
0.60
0.80
1.00
1.20
1.40
1.60
Dec 16 Feb 17 Apr 17 Jun 17 Aug 17 Oct 17
Zylog Systems Ltd NIFTY NIFTY IT
Stakeholders’ Education | Corporate Governance Research | Corporate Governance Score | Proxy Advisory
STAKEHOLDERS EMPOWERMENT SERVICES
2 | P A G E
SECTOR: IT - SOFTWARE REPORTING DATE: 2ND FEBRUARY, 2018
ZYLOG SYSTEMS LTD. www.zsl.com
TABLE 3 - FINANCIALS
(₹ Cr.) Sep’17 Mar’17 Sep’16 % Change
Sep ’17 vs Mar’17 Mar’17 vs Sep’16
Net Worth -865.52 -856.70 -853.56 N.A. N.A.
Current Assets 48.17 52.60 55.37 -8.42% -5.00%
Non-Current Assets 55.67 62.14 64.17 -10.41% -3.16%
Total Assets 103.85 114.75 119.54 -9.50% -4.01%
Investments 13.31 19.25 19.25 -30.86% 0.00%
Finance Cost 0.37 0.37 0.06 0.00% 516.67%
Long Term Liabilities 2.28 1.84 31.20 23.91% -94.10%
Current Liabilities 967.09 969.62 941.91 -0.26% 2.94%
Turnover 25.88 30.55 42.12 -15.29% -27.47%
Profit After Tax -7.64 -5.15 4.80 N.A. -207.29%
EPS (₹) -1.29 -0.87 0.81 N.A. -207.41%
Source - Money Control/Stock exchange filing
AUDIT QUALIFICATIONS
Audit Qualifications in last 3 years: The Statutory Auditor have not raised any qualified opinion in their Report for the FY 2015-
16 ,2014-15 & FY2013-14.
Note: Annual Report for FY 2016-17 is neither available on NSE website nor on the Company’s website.
Response Comment
Frequency of Qualifications NA
Have the auditors made any adverse remark in last 3 years? No -
Are the material accounts audited by the Principal Auditors? Yes -
Do the financial statements include material unaudited financial statements? No -
TABLE 4: BOARD PROFILE (AS PER ANNUAL REPORT - FY 2015-16)
Regulatory Norms Company
% of Independent Directors on the Board 33% 100%
% of Promoter Directors on the Board - 0%
Number of Women Directors on the Board At least 1 0
Classification of Chairman of the Board - Not Disclosed
Is the post of Chairman and MD/CEO held by the same person? - No
Average attendance of Directors in the Board meetings (%) - 93%
Composition of Board: As per Regulation 17(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 "Listing Regulations, 2015", the Company should have at least 50% Independent Directors as there is no Chairman on
Board. The Company has 50% of Independent Directors and hence, it meets the regulatory requirements.
Board Diversity: The Company has 5 directors all are male as per Annual Report 2015-16.
Stakeholders’ Education | Corporate Governance Research | Corporate Governance Score | Proxy Advisory
STAKEHOLDERS EMPOWERMENT SERVICES
3 | P A G E
SECTOR: IT - SOFTWARE REPORTING DATE: 2ND FEBRUARY, 2018
ZYLOG SYSTEMS LTD. www.zsl.com
TABLE 5 - FINANCIAL RATIOS
Ratios Sep’17 Mar’17 Sep’16
% Change
Sep ’17 vs
Mar’17
Mar’17 vs
Sep’16
Turn
ove
r
Rat
ios
Inventory Turnover - - 145.24 N.A. N.A.
Debtors Turnover 0.96 0.94 1.21 2.15% -22.08%
Fixed asset Turnover 0.46 0.49 0.66 -5.44% -25.10%
Current Asset Turnover 0.54 0.58 0.76 -7.50% -23.65%
Ret
urn
Rat
ios Operating Profit Margin -7.65% -13.16% 11.59% N.A. -213.58%
Net Profit Margin -29.52% -16.86% 11.40% N.A. -247.93%
Return on Assets (ROA) N.A. N.A. 4.02% N.A. N.A.
Return on Equity (ROE) N.A. N.A. -0.56% N.A. N.A.
Return on Capital Employed (ROCE) N.A. N.A. -0.58% N.A. N.A.
Liq
uid
ity
Rat
ios
Current Ratio 0.05 0.05 0.06 -8.18% -7.72%
Quick Ratio 0.05 0.05 0.06 -8.18% -7.23%
Cash Ratio 0.02 0.02 0.02 5.79% -3.19%
Working Capital Turnover ratio N.A. N.A. -0.01 N.A. N.A.
Solv
ency
Rat
ios Debt to equity ratio N.A. N.A. N.A. N.A. N.A.
Interest Coverage Ratio N.A. N.A. 81.33 N.A. N.A.
Trad
ing
Rat
ios
Market Cap / Sales 0.73 0.85 0.39 -14.15% 120.53%
Market Cap/ Net Worth N.A. N.A. N.A. N.A. N.A.
Market Cap/PAT N.A. N.A. 3.38 N.A. N.A.
Market Cap/EBITDA N.A. N.A. 3.33 N.A. N.A.
Source - Money Control/Stock exchange filing
TABLE 6 - TRADING VOLUME
Particulars Sep’17 Mar’17 Sep’16
% Change
Sep ’17 vs
Mar’17
Mar’17 vs
Sep’16
Trading Volume (shares) (avg. of 1 qtr) 69,568 46,982 25,120 48.07% 87.03%
Trading Volume (shares) (high in 1 qtr) 3,76,452 2,34,865 89,282 60.28% 163.06%
Trading Volume (shares) (low in 1 qtr) 15,527 9,813 500 58.23% 1862.60%
Ratio - High/low trading volume 24.24 23.93 178.56 1.30% -86.60%
Ratio - High/average trading volume 5.41 5.00 3.55 8.25% 40.65%
Source – Capital line
Stakeholders’ Education | Corporate Governance Research | Corporate Governance Score | Proxy Advisory
STAKEHOLDERS EMPOWERMENT SERVICES
4 | P A G E
SECTOR: IT - SOFTWARE REPORTING DATE: 2ND FEBRUARY, 2018
ZYLOG SYSTEMS LTD. www.zsl.com
TABLE 7 (A): OWNERSHIP & MANAGEMENT RISKS
Sep-17 Mar-17 Sep-16 Comments
Shar
eho
ldin
g (%
)
Promoter shareholding 2.80 2.80 2.80 • No new equity shares issued during the period from 1st Oct, 2016 to 30th Sep, 2017.
• No change in the promoter shareholding
during the said period.
• No major change was observed in the
shareholding pattern during the said period.
• The promoters have pledged 81.88% of their
shareholding.
Public - Institutional
shareholding 10.50 10.88 10.88
Public - Others shareholding 86.70 86.32 86.32
Non-Promoter Non-Public
Shareholding 0.00 0.00 0.00
Source - NSE
MAJOR SHAREHOLDERS (AS ON 30TH SEPTEMBER 2017)
S. No. Promoters Shareholding S. No. Public Shareholders Shareholding
1 Sthithi Insurance Services Pvt. Ltd. 1.42% 1 Leman Diversified Fund 2.54%
2 Life Insurance Corp. of India 2.53%
3 General Insurance Corp. of India 1.59%
4 MRKR Constructions Pvt. Ltd. 1.27%
5 Prabhudas Lilladher Fin. Services
Pvt. Ltd. 1.17%
Source - NSE
TABLE 7 (B): OWNERSHIP & MANAGEMENT RISKS
Market Activity of Promoters The promoters have not sold/bought any shares in FY 2015-16.
Preferential issue to promoters No preferential issue of shares was made to the promoters in FY 2015-16.
Preferential issue to others No preferential issue of shares was made to other shareholders during FY 2015-16.
GDRs issued by the Company The Company did not issue any GDRs during FY 2015-16.
Issue of ESOPs/Issue of shares
other than Preferential allotment The Company does not have any ESOP Scheme in FY 2015-16.
Source - Annual Report FY 15-16
TABLE 8: PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
Sr. No. Name and Description of main products / services % to Total turnover of the Company
1 Computer programming and consulting 100
Source - Annual Report FY 15-16
Stakeholders’ Education | Corporate Governance Research | Corporate Governance Score | Proxy Advisory
STAKEHOLDERS EMPOWERMENT SERVICES
5 | P A G E
SECTOR: IT - SOFTWARE REPORTING DATE: 2ND FEBRUARY, 2018
ZYLOG SYSTEMS LTD. www.zsl.com
Glossary
Equity: The equity shares capital of the Company
Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company
Turnover: The revenue earned from the operations of the Company
EPS: Earning Per Share is net profit earned by the Company per share
𝐸𝑃𝑆 =Profit After Tax
Number of outstanding shares
P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company
𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share
Earnings per share
Current Assets: Cash and other assets that are expected to be converted to cash in one year
Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,
buildings, and equipment
Total Assets: Current Assets + Fixed Assets
Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in
the future.
Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges
incurred during the year in relation to borrowed money.
Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.
Current Liabilities: A company's debts or obligations that are due within one year.
Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced
over a period.
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Inventory
Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business
can turn its accounts receivable into cash during a period
𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Accounts recievables
Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets
𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Fixed Assets
Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Current Assets
Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after
paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating
income (also known as “operating profit”) during a given period by its sales during the same period.
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit
Sales Turnover
Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit
Sales Turnover
Stakeholders’ Education | Corporate Governance Research | Corporate Governance Score | Proxy Advisory
STAKEHOLDERS EMPOWERMENT SERVICES
6 | P A G E
SECTOR: IT - SOFTWARE REPORTING DATE: 2ND FEBRUARY, 2018
ZYLOG SYSTEMS LTD. www.zsl.com
Return on Assets: ROA tells you what earnings were generated from invested capital (assets)
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit
Total Assets
Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’
equity.
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit
Net worth
Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability
and the efficiency with which its capital is employed.
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit
Total Debt + Equity share capital
Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts
over the next 12 months. It compares a firm's current assets to its current liabilities.
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets
Current Liabilities
Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.
𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories
Current Liabilities
Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.
𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables
Current Liabilities
Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates
a Company's effectiveness in using its working capital.
𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟
Current Assets − Current Liabilities
Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of
shareholders' equity and debt used to finance a company's assets.
𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡
𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ
Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a
Company can pay interest on outstanding debt.
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥
𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡
Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is
calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-
share stock price by the per-share revenue.
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟
Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ
Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡
Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.
Stakeholders’ Education | Corporate Governance Research | Corporate Governance Score | Proxy Advisory
STAKEHOLDERS EMPOWERMENT SERVICES
7 | P A G E
SECTOR: IT - SOFTWARE REPORTING DATE: 2ND FEBRUARY, 2018
ZYLOG SYSTEMS LTD. www.zsl.com
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝐸𝐵𝐼𝑇𝐷𝐴
Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year
Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year
Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year
Stakeholders’ Education | Corporate Governance Research | Corporate Governance Score | Proxy Advisory
STAKEHOLDERS EMPOWERMENT SERVICES
8 | P A G E
SECTOR: IT - SOFTWARE REPORTING DATE: 2ND FEBRUARY, 2018
ZYLOG SYSTEMS LTD. www.zsl.com
DISCLAIMER
Sources Company Information
Only publicly available data has been used while making the factsheet. Our data sources include: BSE, NSE, SEBI, Capitaline, Moneycontrol, Businessweek, Reuters, Annual Reports, IPO Documents and Company Website.
Analyst Certification
The analysts involved in development of this factsheet certify that no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the contents of this factsheet.
Disclaimer
While SES has made every effort and has exercised due skill, care and diligence in compiling this factsheet based on publicly available information, it neither guarantees its accuracy, completeness or usefulness, nor assumes any liability whatsoever for any consequence from its use. This factsheet does not have any approval, express or implied, from any authority, nor is it required to have such approval. The users are strongly advised to exercise due diligence while using this factsheet. This factsheet in no manner constitutes an offer, solicitation or advice to buy or sell securities, nor solicits votes or proxies on behalf of any party. SES, which is a not-for-profit Initiative or its staff, has no financial interest in the companies covered in this factsheet except what is disclosed on its website. The factsheet is released in India and SES has ensured that it is in accordance with Indian laws. Person resident outside India shall ensure that laws in their country are not violated while using this factsheet; SES shall not be responsible for any such violation. All disputes subject to jurisdiction of High Court of Bombay, Mumbai.
SEBI Reg. No. INH000000016
This factsheet or any portion hereof may not be reprinted, sold, reproduced or redistributed without the written consent of Stakeholders Empowerment Services
Contact Information
Stakeholders Empowerment Services
A 202, Muktangan, Upper Govind Nagar,
Malad East, Mumbai – 400 097
Tel +91 22 4022 0322
www.sesgovernance.com
Research Analyst: Sudarshan Shetty