NETSOL TECHNOLOGIES LIMITED

S.M. ABBAS ZAIDI,
Research Analyst
, PAGE

Aug 04 - 10, 2008

NetSol Technologies Ltd Company is engaged in exports in computer software and its related services developed in Pakistan. It is also engaged in software development, maintenance and licensing. TiG-NetSol (Pvt) Ltd is 50.52% owned subsidiary of NetSol Technologies Limited, and is engaged in business of providing online software development services. The Company mainly operates in Asia Pacific, Australia and the United States. Its services include systems integration, technology outsourcing, application development and maintenance, information technology and business process reengineering, information security consulting, business intelligence consulting, software process consulting and products-based solutions. It serves industries, such as lease and finance, banking, insurance, e-governance, defense, manufacturing, healthcare, education and information technology. This company listed in Karachi stock exchange (KSE).

FINANCIAL HIGHLIGHTS

INDICATORS

3MAR-08 Rs (000)

MAR-07 Rs (000)

Revenue

893,428

637,457

Gross profit

559,677

350,688

Profit

452,317

227,685

The Financial Highlights of the NetSol examines the key business structure, operations, and revenue. From Mar FY07 to FY08 the revenue was increased by 41 percent during one year. The company's Gross profit was increased by 71 percent over one year. The Profit for the period was increased by 99 percent from Mar FY07 to FY08.

INDICATORS

GROWTH IN MAR-08

Current Ratio

4.55

Fixed Assets Turnover

1.23

Total Assets Turnover

0.43

Return on Assets

8%

Return on Equity

9%

Profit margin on sale

18%

The Current ratio of the NetSol Company was recorded 4.45 during FY2007-08, which shows an excellent performance of the company. The company has been efficient enough in paying off debt as compared to its competitors and has paid off its liabilities. The Fixed assets turnover 1.23 and Total assets turnover 0.43 were recorded in FY07-08 respectively. The Return on assets (ROA) 8 percent, Return on Equity (ROE) 9 percent and profit margin on sale 18 percent increased during FY07-08, the total profitability show an outstanding performance of the company. The Company has no contingent liabilities and commitments outstanding as at march 31, 2008 except to the tune of Rs 36.60/- million( june 30, 2007 rs 34.82 million) gurantees issued to various customers against sale of software and allied services.

FOUR YEARS FINANCIAL RATIOS

INDICATORS

 

FY2007

FY2006

FY2005

FY2004

Working Capital

Rupees in Thousand

884,565

606,339

291,374

58,891

Current Ratio

Times

4.57

6.62

4.26

1.74

Return on Asset Employed

%

22%

12%

29%

25%

Return on Equity

%

28%

15%

34%

32%

Gross Profit Ratio

%

57%

51%

65%

66%

Net Profit Margin

%

40%

28%

46%

47%

Average Collection Period

Days

96

108

79

60

Debtor's Turnover

Times

3.77

3.35

4.56

6.01

Earning Per Share

Rupees in Thousand

9.52

3.53

10.04

11.20

Outstanding No of Shares

Shares

40,804,300

40,066,300

20,516,266

8,487,818

Book Value Per Share

Rupees in Thousand

33.43

28.07

39.77

9.81

WORLDWIDE POSITION

NetSol has won a multi million dollar contract for its leasing solutions from the North American captive finance division of a major Asian based automobile manufacturer. This agreement provides product licensing, software customisation system implementation and ongoing maintenance and support services for the NetSol Financial Suite. North American customers win extended NetSol's position as a leader in providing world class lease management software to the global automotive manufacturing sector. The deal also reflects the successful execution of their North America division in further penetrating this key region under the guidance of newly expanded NetSol Technologies in North America.

NetSol Technology's Lahore based IT campus NetSol Village has achieved ISO 27001 certification. The work conducted in Lahore facility is fully secure as ranked by the world's leading standards authority. This achievement is not only important for NetSol but also for the entire Pakistan IT Industry.

NetSol's commitment to quality is demonstrated by its achievement of both ISO 9001 and SEI (Software Engineering Institute) CMMi (Capability Maturity Model) Level 5 assessment, a distinction shared by only 94 companies worldwide. The Company's clients include global automakers, financial institutions, technology companies and governmental agencies. NetSol's largest customer Daimler Chrysler Services ranks the Company as a preferred vendor in 40+ countries. Headquartered in Calabasas, CA, NetSol Technologies also has operations and offices in London, San Francisco, Adelaide, Beijing, Lahore and Karachi.

CONCLUSION

NetSol is only one of the two IT companies which are listed in the stock exchanges of Pakistan. It is also one of the biggest exporters of software's from Pakistan. NetSol helps clients to identify, evaluate and implement technology solutions to meet their strategic business challenges and maximize their bottom line. By utilizing its worldwide resources, NetSol delivers high quality, cost effective equipment and vehicle finance portfolio management solutions. The Company also delivers managed IT services ranging from consulting and application development to systems integration and development outsourcing. The company has shown strong financial position in FY07-08. Therefore, we can expect NetSol to achieve new heights with continuous innovation.