Mar 31, 2018
The Directors are delighted to present the 25th Annual Report of the Company along with the Audited Financial Statements (Consolidated & Standalone) for the financial year ended 31st March, 2018.
1. FINANCIAL PERFORMANCE OF THE COMPANY (STANDALONE & CONSOLIDATED) :
( In Rs. Thousand)
Standalone |
Consolidated |
||
Particulars |
Year ended 31.03.2018 |
Year ended 31.03.2017 |
Year ended 31.03.2018 |
Gross Income |
7,40,218 |
11,25,834 |
7,65,060 |
Profit Before Interest and Depreciation |
2,10,658 |
3,11,182 |
2,07,645 |
Finance Charges |
3,158 |
2,438 |
3,166 |
Gross Profit |
2,07,500 |
3,08,744 |
2,04,479 |
Provision for Depreciation |
15,931 |
26,746 |
16,192 |
Net Profit Before Tax |
1,91,569 |
2,81,998 |
1,88,287 |
Provision for Tax |
47,025 |
98,740 |
47,280 |
Non-Controlling Interest (on |
- |
- |
2,801 |
Net Profit After Tax |
1,44,544 |
1,83,258 |
1,43,808 |
Surplus - Opening Balance |
12,35,411 |
10,81,804 |
12,35,411 |
Amount Available for Appropriation |
13,79,954 |
12,65,062 |
13,79,218 |
Other Comprehensive (Income) / Loss (net of tax) |
402 |
443 |
418 |
Dividend and Dividend tax paid during the year |
30,093 |
30,093 |
30,093 |
Surplus - closing balance |
13,50,263 |
12,35,412 |
13,49,543 |
Note: Result for the year ended 31st March, 2018 are in compliance with the Indian Accounting Standards (Ind-AS) notified by Ministry of Corporate Affairs. Consequently result for the year ended 31st March, 2017 and transition date of 1st April, 2016 have been restated to comply with Ind-AS to make them comparable.
2. OPERATIONS OF THE COMPANY :
The last year has been a tougher year due to closure of many long term and profitable contracts. However the geographical spread of the operations of the company has increased and projects of varying sizes were undertaken in 23 states of India compared to 11 states last year. All the projects have been implemented and reached the logical end or are on right track. This has been one of the hallmarks of your company whereby almost all projects undertaken by your company are implemented successfully despite of huge challenges faced during implementation of project. This year includes the operations of the subsidiary Instasafe Technologies Pvt. Ltd. ABM continues to operate from offices in New Delhi, Patna, Mumbai, Bhopal and office of the subsidiary in Bangalore.
3. DIVIDEND:
After considering earnings, requirement of funds and with the objective of rewarding the Shareholders, your Directors have recommended a Final Dividend of 25% (i.e Rs.1.25/- per Equity Share of Face Value of Rs. 5/- each) for the year ended 31st March, 2018, subject to the approval of Members at the ensuing Annual General Meeting. The dividend, if approved, will result in a cash outflow of Rs.3,00,92,710/- including dividend distribution tax.
4. TRANSFER TO RESERVES:
Your Directors do not propose to transfer any amount to the General Reserve out of the current year''s profit.
5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND :
In terms of the provisions of Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 / Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, Rs.2,93,627/- of unpaid / unclaimed dividends were transferred during the year to the Investor Education and Protection Fund (IEPF).
6. SHARE CAPITAL:
As on 31st March, 2018 the Authorized share capital of your Company was Rs.12,50,00,000/- consisting of 2,50,00,000 Equity Shares of Rs.5/- each and paid up equity share capital was Rs.10,24,15,000/- consisting of 2,00,02,200 fully paid up equity shares and 6,97,800 forfeited equity shares of Rs.5/- each.
During the year under review, the Company has not issued any shares or Bonus shares. The company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares. The Company has not bought back any of its equity shares.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):
In accordance with the provisions of the Section 152 of Companies Act, 2013, Mrs. Supriya P. Rane, Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offer herself for re-appointment. Board recommends her re-appointment.
A brief profile of Mrs. Supriya P. Rane has been given in the Report on the Corporate Governance as well as in the Notice of the ensuing Annual General Meeting of the Company.
Pursuant to provisions of Section 149 of the Companies Act, 2013, your Board of Directors are seeking the appointment of Mr. Devendra Parulekar as an Independent Director for 5 (five) consecutive years commencing 10th August, 2018 up to 9th August 2023.
The Independent Directors of your Company have given the certificate of independence to your Company stating that they meet the criteria of independence as mentioned under Section 149 (6) of the Companies Act, 2013.
The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company atwww.abmindia.com. The Company has issued a formal letter of appointment to the Independent Director in the manner as provided in the Compan ies Act, 2013. The terms and conditions of the appointment have been disclosed on the website of the Company.
There has been no change in the Key Managerial Personnel (KMPs) of your Company during the year under review.
The policy on Director''s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Director, and also remuneration for Key Managerial Personnel and other employees, forms part of the Corporate Governance Report of this Annual Report. Annual Board Evaluation process for Directors has also been provided under the Report on Corporate Governance.
8. MEETINGS:
During the year five Board Meetings and five Audit Committee Meetings were convened and held. For the details of the meetings of the Board and its Committees, please refer to the Report on Corporate Governance, which forms part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
9. PUBLIC DEPOSITS:
During the year under review, your Company did not accept any public deposits under Chapter V of Companies Act, 2013 and no amount on account of principal and interest on public deposits was outstanding on the date of the balance sheet.
10. SU BSIDIARIES, JOINT VENTU RES AND ASSOCIATE COM PANIES:
InstaSafe Technologies Private Limited ("InstaSafe"), a subsidiary of your Company, is a leading Cloud based Security-as-a-Service solution provider delivering comprehensive and uncompromising protection to mobile and remote workers enabling them to safely and securely access enterprise apps, email and web from anywhere on any network.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of financial statements of subsidiary company in Form AOC 1 is attached herewith. The separate audited financial statements in respect of the subsidiary company shall be kept open for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of the Annual General Meeting. Your Company will also make available these documents upon request by any member of the Company interested in obtaining the same.
As on 31st March, 2018 the Company does not have any Joint venture or Associate Company.
11. PERFORMANCE OF SUBSIDIARY COMPANY:
Cybersecurity is one of the foremost challenges of the digital age. The global growth of networks and data, fuelled by technological innovation, has enabled society to make quantum leaps & breakthroughs. This rapid, sweeping change has also created a long-term challenge: managing inherent security risks in an increasingly interconnected world economy as hacking threats escalate. InstaSafe was founded with the mission to make organ izations more safe, secure & productive by leveraging the power of the cloud by an experienced cross functional team.
InstaSafe products include:
InstaSafe Secure Access - (A Next Generation Cloud Based Secure Access Solution) - InstaSafe Secure Access solution provides an identity based granular access control solution based on the principles of Software Defined Perimeter (SDP). SDP concepts have been derived from the military, especially the Defense Information Systems Agency (DISA), where every device is pre-attested before it can ''connect'' to the network followed by verification of the identity of the user using MFA leading to knowing exactly what device was being used and by whom to access the application. With the device & user''s knowledge, we are able to ensure that the device and the user are able to only ''see'' and ''access'' the data, that they have '' prior approval'' to see or access -the '' need-to-know'' access model.
SafeHats - (Managed Bug Bounty and Vulnerability Coordination Platform) - The SafeHats Launchpad platform connects security conscious Enterprises, Financial Institutions and Governments with the WhiteHat hacker community to have their products tested against vulnerabilities. SafeHats is a cybersecurity marketplace platform where on one side there are enterprises that want to do security testing of their application and on another side there are Security researchers / Ethical Hackers who work as on-demand basis and perform security penetration testing of the application.
InstaSafe in this financial year has doubled its customer base and protected Microfinance institutions, Financial Services, Manufacturing, Retail & security conscious start-ups. InstaSafe in this period, has gained significant geographical spread and has now end-user deployment footprint across India, China, Canada, UK, USA. To ensure high availability and optimal performance, Instasafe has opted for data centres available across USA, India, Singapore, Hong Kong & South Africa. It has grown at 60% YoY, while the net loss decreased to Rs.63 lacs from Rs.117 lacs.
IntsaSafe has been selected as part of the Oracle Startup Cloud Accelerator (OSCA), received 2nd best workplace in India under BWpeople "Best workplaces among startups" ; been the recipient of the prestigious CIO Choice awards for the fourth consecutive time; winners of the Yourstory Top Tech 30 awards, Cybersecurity Excellence Award finalists for Cybersecurity Product of the Year; Cybersecurity Excellence Award for Cybersecurity Team of the Year (Asia/Pacific). InstaSafe has partnered with leading data centres including IBM, AWS, Microsoft azure to offer best-in-class product offerings.
Given that the Cloud Security space is still in its early stages & evolving, InstaSafe is in the initial phase of development and is positioned for long term value creation. This causes some short term fiscal stress. This is by design and inherent to the cybersecurity industry in its early stages of growth. InstaSafe continues to invest into building scalable products and scale globally.
The outlook for the coming financial year, is to expand into international markets and scale the product, sales & marketing efforts with global partnerships & alliances. Instasafe expects operating expenses to increase significantly over the next several years, particularly in fiscal 2019, as we continue to hire additional personnel, particularly in sales and marketing, expand our operations and infrastructure, both domestically and internationally, and continue to develop our platform.
12. AUDITORS :
M/s. Borkar & Muzumdar, Chartered Accountants were appointed as Statutory Auditors of the your Company at the Annual General Meeting held on 18th September, 2014 for a term of five consecutive years. As per the provisions of Section 139 of Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting.
In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.
13. AUDITORS'' REPORT :
The Report given by the Auditors on the Financial Statements of the Company is part of Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. Hence, it is an unmodified opinion in terms of the applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.
14. SECRETARIAL AUDIT REPORT :
The Board had appointed Mr. Upendra Shukla, Practicing Company Secretary as Secretarial Auditor to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2017-18. The Secretarial Audit Report issued by Mr. Upendra Shukla in Form No. MR-3 forms part of this Annual Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
15. COMPLIANCE WITH SECRETARIAL STANDARDS :
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
16. INTERNAL AUDIT AND INTERNAL CONTROL SYSTEMS :
The Company has laid down certain guidelines and processes which enables implementation of appropriate internal financial controls across the organisation. Such internal financial controls encompass policies and procedures adopted by the Company for ensuring orderly and efficient conduct of business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information.
The Audit Committee reviews the reports submitted by the Internal Auditors in each of its meeting. The Management duly considers and takes appropriate action on recommendations made by the Statutory Auditors, Internal Auditors and Audit Committee of the Board of Di rectors.
The Company has appointed M/S. S.P. Sule & Associates, Chartered Accountants as Internal Auditor of the Company for the financial year 2017-2018.
17. CORPORATE GOVERNANCE :
Corporate Governance is a continuous process at ABM. It is about commitment to values and ethical business conduct. Systems, policies and frameworks are regularly upgraded to effectively meet the challenges of rapid growth in a dynamic external business environment. Your Company is committed to sound corporate practices based on conscience, openness, fairness, professionalism and accountability paving the way in building confidence among all its stakeholders for achieving sustainable long term growth and profitability. Your Company has complied with the governance requirements provided under the Companies Act, 2013 and listing regulations.
A separate Report on Corporate Governance together with Auditor''s Certificate confirming compliance with the conditions of Corporate Governance as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed to this Report.
18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
A. Industry Structure and Development:
Last year, the IT industry faced significant challenges on account of adverse changes in visa policies in important markets for software companies engaged in export. Another challenge faced by IT industry is on account of new technologies leading to automation of processes causing serious impact on the growth of jobs and need for re-skilling the existing employees on new technologies.
The domestic market dominated by govt. sector continues to face the age old challenges of cost and time overruns, payment delays, tenders with difficult terms and conditions etc. There is a lot of attention seemingly given to the use of IT in govt. operations. However there is a need for institutionalized mechanism whereby the important aspects like proper budgeting, fair terms for tendering, vendor finalization using blend of quality and cost parameters, time bound implementation and sustenance etc. are achieved to attract capable IT companies to govt. segment. There are some bright spots where a few companies like ABM have successfully executed e governance projects. This has built confidence that e governance projects are capable of delivering good results and can give good RoI to all stake holders including govt. and citizens.
Govt has shown willingness to support startups to boost innovation and adoption of new technologies. However, the same needs to be well supported by necessary procurement processes. There are massive initiatives being taken for reskilling which is a good step forward.
On one hand there are many tenders which do not get adequate bidders and on the other hand there are some regional companies which continue to bid aggressively by quoting unviable prices and finally resulting into project failures in most of such cases. Important projects like Smart Cities are rolled out but the progress is not as satisfactory as expected by govt compared to the support given by central govt.
In general, there is willingness and even availability of budget from govt. to push e-governance but there is a need to create a conducive environment for IT industry to participate in the govt. programs with more interest and enthusiasm.
B. Existing Opportunities and Outlook :
The last year has been particularly challenging as some of the big long term contracts of your company have seen tapering of scope as well as some contracts have come to an end. This is in line with outlook mentioned in the last annual report as a known business threat. This has impacted topline and bottom line. However, even in general for past couple of years your company has been following a cautious approach of doing selective bidding by giving higher priority to ability of the company to execute the project " successfully and profitably".
ABM understands the huge opportunity offered by this market segment and would like to harness it with utmost caution rather that uncalled for aggressiveness. As mentioned in the earlier annual report as per Gartner (Source: All Press Release on February 13, 2017 on Gartner Website), the governments in India could have spent $7.8 billion (9.5 percent growth over previous year) on IT products and services last year. This included spending on internal services, software, IT services, data centers, devices and telecom services by local, state and Union governments. IT services would include consulting, software support, business process outsourcing, IT outsourcing and implementation.
However, there are several IT companies who have shown limited understanding of this market segment resulting into catastrophic impact on their business during last 3-5 years. This includes many MNCs who were new entrants into the market as well established large and SMEs in India. Difficulties faced by such companies offer immense learning to established companies like ABM about the avoidable errors. This aspect shapes the ongoing business strategies of your company.
The approach of selective bidding adopted by your company has surely limited the opportunities where ABM participates. This can impact business in short to medium term. Considering the current market conditions, ABM feels that it is necessary to focus on some of the niche areas where company has strengths and conserve resources for implementation of growth plans being evolved and experimented. Your company is one of the few IT companies in e government sector in India which has five state-wide roll out projects, 3 of which have been successfully executed and rest under implementation. All the existing customers have shown preference to remain associated with ABM subject to following due process of procurement. Your company has managed to keep its outstanding payment under control and ensured that resources will not be inadequate for right opportunities. This kind of profile is not enjoyed by many IT compan ies dealing in e government market space.
C. Business Threats :
As we have been outlining in most of the annual reports the company faces various risks and threats associated with e government business. It includes possible payment delays, Time and Cost overruns, Disruptions in the project when head of the organization is changed, challenges in attracting good talent to work in less developed states and in interior regions of India etc. You company has been adopting a cautious approach of building business brick by brick rather than a big bang approach. Inexperienced competition remains a threat and results into loss some of the opportunities.
D. Business Strategies and Planning:
As mentioned above, the business strategy will be dominated by avoidance of mistakes made by fellow travellers in this market segment on one hand and careful exploitation of the immense opportunity offered by this segment on the other hand. Focus will remain on successful completion of the projects on hand and minimizing cost overruns / payment outstanding.
The focus segment will be e Municipality where your company is a leader in India with impeccable record. Smart Cities will also be a focus on case to case basis. Many municipalities which are already automated by your company are part of the smart city and those projects are tendered without the component of the e governance.
The need and scope for cybersecurity is discussed in this report while explaining the performance of the subsidiary. Cybersecurity solutions from our subsidiary will also be part of the focus for upselling and cross selling to govt. segment. We have noticed good interest from govt. customers in our initial go to market initiatives and efforts will be done to build on the initial traction.
ABM is planning to develop solution for Smart Water Management. Water is crucial for a country''s development and economic growth. Though India is endowed with bounty of rainfall, unplanned development and management of water is leading to water scarcity, economic and environmental strain which may increase manifold in the coming decades. Some of the major issues with Water Management are related to Water source and extraction, storage & purification, water distribution, consumption & billing and waste water management. ABM has a strong track record providing solution for automation of water billing, accounting and MIS. This strength will be leveraged for building a Smart Water Management System. This system will be using various ICT interventions to achieve effective water management end-to-end water management i.e. from source to tap. Use of technologies like IoT will be the core to the strategy of building this solution.
Your company will also consider developing competence in the new technology areas. Pilot projects for implementing block chain are won by ABM through its subsidiary. Avenue for further acquisitions in the new technologies like Analytics, IoT and AI will be examined subject to availability of right companies.
The strategy of working closely with existing prestigious customers and retaining them will continue with due consideration to the increased competition in some of the key accounts of your company.
E. Human Resource Management:
Aim of Human Resource Management
- To enable ABM to attract, integrate, develop and retain the best talent to deliver business growth.
- Fulfill business demand, deliver consistently high utilization rates and keep manpower costs within the desired range as per Business plan.
- Deploy meaningful practices to enhance the engagement, capability and competitiveness of our workforce.
i) Headcount
S. No. |
Year |
Current Headcount |
1 |
April 2016 - March 2017 |
769 |
2 |
April 2017 - March 2018 |
434 |
ii) HR Events
- Quarterly mentorship & feedback program.
- "Saturday Funday" challenge was endorsed to hunt the hidden talent within the team.
- Employee get-together was organized at many locations.
iii) Recognition
- Career Enhancement opportunities
- Recognized employees'' performance with an appreciation letter to family.
- Hired talented Professional Graduates from the reputed universities and Institutes.
iv) Motivational and Focus Areas
- The Company continues to invest in the form of training for enhancing its Human Capital by providing opportunities to its employees to develop their skills and competencies relevant to the business requirements.
- We follow Equal Opportunities & Non Discrimination Policy and do not discriminate on basis of race, color, gender, caste or religion.
- The Company''s relentless pursuit to connect with employees on a regular basis, communicate in an open and transparent manner, provide opportunities to learn and grow within the organization are yielding desired results as is evident from the high retention rate and the motivation and engagement levels of the employees.
F. Discussion on financial performance with respect to the operational performance (Standalone) :
( In Rs.Thousand)
Particulars |
Year ended 31.03.2018 |
Year ended 31.03.2017 |
Gross Income |
7,40,218 |
11,25,834 |
Less: Service Tax /GST |
1,10,479 |
1,45,926 |
Gross Income (net of Service Tax/GST) |
6,29,739 |
9,79,908 |
Less : Total expenditure |
4,54,101 |
7,24,657 |
Gross profit before Depreciation & Taxation |
1,75,638 |
2,55,251 |
There is significant impact of various factors on performance of your company. These are discussed in detail in the Management Discussion and Analysis.
19. RISK MANAGEMENT :
The Company has developed and adopted a Risk Management Policy. This policy identifies all perceived risk which might impact the operations and on a more serious level also threaten the existence of the Company. Risks are assessed department wise such as financial risks, information technology related risks, legal risks, accounting fraud, etc. The Risk Management Committee assists the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation and mitigation of operational, strategic and external environment risks. The Committee also ensures that the Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities.
The details of the Committee and its terms of reference are set out in the Corporate Governance report forming part of this report.
The following elements of risks which in the opinion of the Board can impact the performance of the company.
1. Industry: Industry risks are competition, newer business models like PPP, and disruptive technologies like Artificial Intelligence, Machine Learning, Virtual Reality (VR) and Augmented Reality (AR), Automation, slower decision making due to impending elections in coming year.
2. Supply side risk for talent acquisition: With growing customer base and mission critical projects, unavailability of right skilled resources at right time in right quantity can pose a risk. The company constantly trains and re-trains existing resources for different skills and technologies. Suitable HR practices are adopted to minimise the attrition rate. Lateral hiring is done to bring in fresh leaders.
3. Operational efficiency: The operational risk is mainly associated with client acquisition, execution of projects, information security and continuity of customer''s business operations. The company has project level monitoring where such risks are identified and escalated to board for suitable corrective measures on time.
4. Reputation: The Company''s projects are in Government sector which are necessarily funded by public finance. This may expose the company to the risk of motivated public scrutiny from elements which are adversely affected by success of project leading to transparency as well as some times by competition. The company strictly follows the Govt. processes of procurement and executes the projects with highest possible standards of ethics and best industry processes. Employees are made well aware of the company policy and ensure the proper code of conduct is followed across projects uniformly. Company has published its own code of conduct for benefit of employees. This has been helping company so far to win over the confidence of customers, even in the situations of motivated public scrutiny which is aimed at hurting reputation of the Company.
20. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
There are no planned material changes or commitments made by company that will affect the financial position of the company during the above mentioned period except the balance investment commitment of approximately Rs. 4 crores in the subsidiary subject to satisfactory progress. The liquid cash available with the company may also be utilized if the plans for acquisition fructify faster than envisaged.
21. CODE OF CONDUCT:
The Company has adopted the Code of Conduct and ethics for all Board Members and Senior Management and this is strictly adhered to. A copy of the Code of Conduct is available on the website of the Company www.abmindia.com. In addition, members of the Board and Senior Management also submit, on an annual basis, the details of individuals to whom they are related and entities in which they hold interest and such disclosures are placed before the Board. The members of the Board inform the Company of any change in their directorship(s), chairmanship(s) / membership(s) of the Committees, in accordance with the requirements of the Companies Act, 2013 and Listing Regulations.
The members of the Board and Senior Management have affirmed their compliance with the code and a declaration signed by the Managing Director is annexed to th is report.
22. AUDIT COMMITTEE COMPOSITION:
The Composition of the Audit Committee is as described in the Corporate Governance Report, which forms part of this report. During the year all the recommendations of the Audit Committee were accepted by the Board.
23. VIGIL MECHANISM:
Pursuant to the provisions of Section 177(9) of the Act and rules made thereunder, the Board of Directors had approved the Policy on Vigil Mechanism / Whistle Blower Policy to provide a mechanism for the Directors and employees to report their grievances, genuine concerns about unethical behaviour, actual or suspected fraud, and violation of the Company''s Code of Conduct. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee.
Brief details about the policy are provided in the Corporate Governance Report attached to this Report. The Whistle Blower Policy is available on the website of the Company.
24. PREVENTION OF INSIDER TRADING:
In compliance with the SEBI regulations on prevention of insider trading, the Company has in place (1) (i) a Code of Conduct to Regulate, Monitor and Report Trading by Insiders, the disclosure requirements and procedure thereto, Preservation of Price Sensitive Information, Trading while in possession of unpublished Price Sensitive Information, Prevention of misuse of Price Sensitive Information, etc.; and (2) a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information detailing the principles of fair disclosure. The same has been circulated to Directors and designated employees of the Company. They are regularly reminded about their obligation under the policies and also informed about prevention of insider trading into the securities of the Company.
The Company Secretary is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance with the Code.
25. RELATED PARTY TRANSACTIONS:
In line with requirement of the Companies Act, 2013 and Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is also available at Company''s website www.abmindia.com. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.
All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis, which is reviewed and updated on quarterly basis.
All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm''s Length basis. No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable.
26. EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 is appended as an Annexure to this Annual Report.
27. CORPORATE SOCIAL RESPONSIBILITY:
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. In compliance with requirements of Section 135 of the Companies Act, 2013, the Company has laid down a CSR Policy which is published on its website www.abmindia.com.
28. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
There were no loans or guarantees given by the Company under Section 186 of the Companies Act, 2013 during the year under review. The Particulars of investments have been disclosed in the Financial Statements.
29. PREVENTION OF SEXUAL HARASSMENT (POSH) AT WORKPLACE:
The Company has adopted a Policy for prevention of Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and rules thereunder. Company has formed an "Internal Complaints Committee" for prevention and redressal of sexual harassment at workplace. The Company has ensured a wide dissemination of the Policy and have conducted various awareness programmes in the organization. The Company has not received any complaint of sexual harassment during the financial year 2017-18.
30. PARTICULARS OF EMPLOYEES:
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been appended as Annexure to this Report. The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.
31. CONSERVATION OF ENERGY :
Your Company consumes energy mainly for the operation of its software development, thus the consumption of electricity is negligible. In order to conserve the electricity, the air conditioners are kept at a moderate temperature and all the electrical equipments are turned off, whenever they are not required by the office staff.
32. TECHNOLOGY ABSORPTION, ADOPTION & INNOVATION AND RESEARCH AND DEVELOPMENT:
Your Company has continued its focus on ''Productisation of Services'' by innovative business models. Company is putting in efforts to adopt the latest technologies to address the demand for "Digital Business". The flagship products of the company have progressed well with respect to upgradation to the latest technology for reducing the total cost of ownership for customers and becoming more competitive in market. PoCs in block chain for application in govt space are undertaken.
33. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Your company did not have any Foreign Exchange earnings or outgo in last year.
34. LISTING FEES:
Your Company''s shares are listed in The Bombay Stock Exchange Limited, Mumbai and the Annual Listing fees for the year under review have been paid.
35. DIRECTORS '' RESPONSIBILITY STATEMENT:
The Directors hereby confirm that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit or Loss of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the Annual Accounts on a going concern basis;
e) they have laid down internal financial controls for the Company and such internal financial controls are adequate and operating effectively; and
f) they have devised proper system to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
35. ACKNOWLEDGEMENT:
Your Board places on record their deep appreciation to employees at all levels for their perseverance, loyalty and unflinching efforts by their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain an innovative leader in Software & Services segment of Indian IT Industry. The Board places on record its appreciation for the support and co-operation your Company has been receiving from its business partners and others associated with our various software projects and services.
Your Directors also take this opportunity to thank all Shareholders, Clients, Vendors, Bankers, Central and State Government Organizations, Regulatory Authorities, for their continued support which was a great help to us in managing our continued growth. We acknowledge their contributions and commit ourselves to continue and strengthen this fruitful alliance in all times to come.
For and on behalf of the Board
Date : 30th May, 2018 Prakash B. Rane Sharadchandra D. Abhyankar
Place: Mumbai Managing Director Director
(DIN:00152393) (DIN:00108866)
Mar 31, 2017
The Directors have pleasure in presenting the 24th Annual Report on the business and operations of your Company, along with the Audited Accounts, for the financial year ended 31st March, 2017.
1. FINANCIAL PERFORMANCE OFTHE COMPANY (STANDALONE) :
The highlights of financial performance of your Company are as follows: (In Rs. Thousand)
Particulars |
Year ended 31.03.2017 |
Year ended 31.03.2016 |
Gross Income |
11,25,856 |
8,89,405 |
Profit Before Interest and Depreciation |
3,11,547 |
2,89,647 |
Finance Charges |
2,438 |
3,067 |
Gross Profit |
3,09,109 |
2,86,579 |
Provision for Depreciation |
16,898 |
16,808 |
Net Profit Before Tax |
2,92,211 |
2,69,771 |
Provision for Tax |
1,01,698 |
94,061 |
Net Profit After Tax |
1,90,513 |
1,75,711 |
Balance of Profit brought forward |
8,76,410 |
7,30,792 |
Balance available for appropriation |
10,66,923 |
8,76,410 |
Proposed Dividend on Equity Shares |
- |
25,003 |
Tax on proposed Dividend |
- |
5,090 |
Transfer to General Reserve |
- |
- |
Surplus carried to Balance Sheet |
10,66,923 |
8,76,410 |
2. OPERATIONS OF THE COMPANY:
Operations of the company have been generally stable during last year. Some regions like Madhya Pradesh, Bihar had seen increased activities due to advanced stage of project implementation. The total head count increased 6% against 26 % increase in gross revenue which shows encouraging trends of non-linear revenue growth. The business development teams have been strengthened by deputing business development resources to cover larger number of states compared to last year. The focus to increase operational efficiency by automating certain support functions by using Pay Per Use software has continued by covering more operational areas. The Company continues to operate from offices in New Delhi, Patna, Mumbai, Bhopal and Chennai. Presence in other states like MP and Bihar is being leveraged to tap more business opportunities in these and nearby states. Company is executing projects of varying sizes in 11 different states compared to 6 states last year.
3. DIVIDEND:
Your Directors are pleased to recommend a Final Dividend of 25% (i.e.Rs.1.25/-per Equity Share of Face Value of Rs. 5/each) for the year ended 31st March, 2017. Payment of dividend is subject to the approval of shareholders at the forthcoming Annual General Meeting and would involve a cash outflow of Rs. 3,00,92,710/- including dividend distribution tax.
4. TRANSFER TO RESERVES:
No amount was proposed to be transferred to the reserve during the year under review.
5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
Pursuant to the provisions of Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 / Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, Rs.1,53,366/- of unpaid / unclaimed dividends were transferred during the year to the Investor Education and Protection Fund (IEPF).
The Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on 12th August, 2016 (date of last Annual General Meeting) on the website of the Ministry of Corporate Affairs.
6. SHARE CAPITAL:
As on 31st March, 2017 the Authorized share capital of your Company was Rs.12,50,00,000/- consisting of 2,50,00,000 Equity Shares of Rs.5/- each and paid up equity share capital was Rs.10,24,15,000/- consisting of 2,00,02,200 fully paid up equity shares and 6,97,800 forfeited equity shares of Rs. 5/- each.
During the year under review, the Company has not issued any shares or Bonus shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares. The Company has not bought back any of its equity shares.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):
Mr. M. N. Ahmed a Non-Executive Director, resigned from the Board of Director of the Company with effect from 4th February, 2017. The Directors place on record their appreciation of the valuable contributions and guidance given by Mr. M. N. Ahmed during his tenure as a Member of the Board of Director of the Company.
In accordance with the provisions of the Section 152 of Companies Act, 2013, Mrs. Supriya P. Rane, Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offer herself for re-appointment. Board recommends her re-appointment.
A brief profile of Mr. Supriya P. Rane has been given in the Report on the Corporate Governance as well as in the Notice of the ensuing Annual General Meeting of the Company.
Mr. Sharadchandra Abhyankar, Mr. Sanjay Mehta and Dr. Sumit D. Chowdhury are the Independent Directors on the Board of the Company. They have confirmed to the Company that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013.
Every Independent Director of the Company is provided with on-going information about the industry and the Company so as to familiarize them with the latest developments. The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at www.abmindia.com. The Company has issued a formal letter of appointment to each of the Independent Directors in the manner as provided in the Companies Act, 2013. The terms and conditions of the appointment have been disclosed on the website of the Company.
There has been no change in the Key Managerial Personnel (KMPs) of your Company during the year under review.
The policy on Director''s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Director, and also remuneration for Key Managerial Personnel and other employees, forms part of the Corporate Governance Report of this Annual Report. Annual Board Evaluation process for Directors has also been provided under the Report on Corporate Governance.
8. MEETINGS:
During the year six Board Meetings and five Audit Committee Meetings were convened and held. For the details of the meetings of the Board and its Committees, please refer to the Report on Corporate Governance, which forms part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
9. PUBLIC DEPOSITS:
During the year, your Company did not accept any public deposits under Chapter V of Companies Act, 2013 and no amount on account of principal and interest on public deposits was outstanding on the date of the balance sheet.
10. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:
As on 31st March, 2017 the Company does not have any Subsidiary, Joint venture or Associate Company. But during the year under review, the Board of Directors have approved a strategic investment in Instasafe Technologies Private Limited (âInstasafeâ) and executed definitive agreements including Share Purchase Agreement, Share Subscription and Shareholders'' Agreement and related documents. Consequent upon the satisfactory fulfillment of the condition precedent set forth in the said agreements, the Company has exercised its rights under the shareholders Agreement and accordingly, Mr. Prakash B. Rane and Mr. Sanjay Mehta have been appointed as Nominee Directors on the Board of Instasafe. In view of the rights conferred on the Company by the said Shareholders Agreement and the Articles of Association of Instasafe, and the nomination of non- executive directors on the board of directors of the Instasafe, Instasafe became a subsidiary of the Company w.e.f.12th May, 2017.
11. AUDITORS:
M/s. Borkar & Muzumdar, Chartered Accountants were appointed as Statutory Auditors of the Company at the Annual General Meeting held on 18th September, 2014 for a term of five consecutive years. As per the provisions of Section 139 of Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting.
12. AUDITORS'' REPORT:
The Report given by the Auditors on the Financial Statements of the Company is part of Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. Hence, it is an unmodified opinion in terms of the applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.
13. SECRETARIAL AUDIT REPORT:
The Company has appointed Mr. Upendra Shukla, Practicing Company Secretary to carry out the Secretarial Audit for the financial year 2016-17 which, inter alia, includes audit of compliance with the Companies Act, 2013, and the Rules made under the Act, Listing Regulations and applicable Regulations prescribed by the Securities and Exchange Board of India and Foreign Exchange Management Act, 1999 and Secretarial Standards issued by the Institute of the Company Secretaries of India.
The Secretarial Audit Report in Form No. MR-3 is annexure to this Annual Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
14. COMPLIANCE WITH SECRETARIAL STANDARDS:
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
15. INTERNAL AUDIT AND INTERNAL CONTROL SYSTEMS:
The Company has appointed M/S. S.P. Sule & Associates, Chartered Accountants as Internal Auditor of the Company for the financial year 2016-2017.
The Company''s internal control systems are commensurate with the nature and size of its business operations. These systems ensure that transactions are authorized, recorded and reported diligently, to safeguard the assets of the Company. Internal Audit was conducted in various areas of operations of the Company. The internal audit process includes review and evaluation of effectiveness of existing processes, internal controls and compliances. It also ensures adherence to policies and systems and mitigation of operational risks perceived for each area under audit. The Management duly considers and takes appropriate action on recommendations made by the Statutory Auditors, Internal Auditors and Audit Committee of the Board of Directors.
16. CORPORATE GOVERNANCE:
Sound Corporate Governance is a key driver of sustainable corporate growth and long-term value creation for the stakeholders and protection of their interests. Your Company endeavours to meet the growing aspirations of all stakeholders including shareholders, employees and customers. Your Company always strives to follow the path of good governance through a broad framework of various processes. Your Company has complied with the governance requirements provided under the Companies Act, 2013 and listing regulations.
A separate Report on Corporate Governance together with Auditor''s Certificate confirming compliance with the conditions of Corporate Governance as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed to this Report.
17. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
A. Industry Structure and Development:
Industry structure has remained unchanged for past several years. The competition is divided into regional players and national players. Some regions have experienced increased competition last year with unviable prices being quoted in tenders. The schemes relevant to your company''s business like Smart City with almost Rs.1,00,000 crore outlay over five years has reached stages of tendering. Funding under some central govt schemes and 14th Finance Commission mandates automation and reforms. This is also resulting into more tenders from Urban sector which is one of the important customer segment for your company. Some of the IT companies which showed impractical aggressiveness have faced serious consequences due to failure to appreciate nuances of e government business which require par excellence techno-functional capabilities. The key stakeholders in this industry continue to be government organizations and its employees; Consulting Companies appointed by Government organizations for firming up tenders and its evaluation; Project Management Companies appointed by Government organizations for monitoring project execution; Funding agencies like Central Government or International Funding agencies like Word Bank (WB), The Asian Development Bank (ADB), The Department for International Development of United Kingdom Government (DFID), The Japan International Cooperation Agency of Government of Japan (JICA) etc. and IT companies who execute the projects.
There have been some chronic issues with Government contracts in the industry which continue to remain concerns for the industry. Efforts are being done by industry associations like The National Association of Software and Services Companies (NASSCOM) to convince Government to have more balanced procurement process. Government has issued model tender document which address some of the concerns flagged by NASSCOM. IT dependent initiative like Ease of Doing Business, Right to Services, Digital India, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) are showing more traction for IT spending.
Post demonetization the overall usage of IT interfaces in day to day work by common citizen is on rise and it will help in increased demand for e government in medium to long term due to better appreciation of IT.
B. Existing Opportunities and Outlook:
Your company has been following a specific strategy for leveraging business opportunities in e government business segments. It includes long term relationships with customers by giving increasingly better quality of service, adding verticals periodically by organic and inorganic strategies, adding more states as customers, blending technology with reforms, maintaining proper processes and a sound value system. This has resulted into steady growth as seen from past performance.
The opportunities in the segment are abundant and choice needs to be made based on what has maximum fitment with company strengths and growth strategies. Company continues to focus on successful completion of each project for building long term relationships in areas of its strength like Urban Sector, Reforms in Accounting and Tax revenue, SAP, Tourism. The recent acquisition of a cyber security firm based in Bangalore would open new avenues of account mining and will increase the solutions offerings by the Company.
The global industry is fast embracing technologies like Artificial Intelligence, machine learning, analytics, virtual and augmented reality, block chain etc. Company will monitor these trends closely and its impact on the Company''s market segment and solutions offered by the Company. Company has been developing its flagship offerings by following Digital India guidelines and standards.
As per Gartner (Source: All Press Release on February 13, 2017 on Gartner Website), the governments in India would spend $7.8 billion (9.5 percent growth over previous year) on IT products and services last year. This included spending on internal services, software, IT services, data centers, devices and telecom services by local, state and Union governments. IT services would include consulting, software support, business process outsourcing, IT outsourcing, and implementation.
As per data available in public domain and announcements from concerned ministries it can be estimated that total outlay for 5 years in schemes like Smart City, Some Mission Mode Projects, Digital India, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), National Heritage City Development and Augmentation Yojana (HRIDAY) etc. would be Rs.2,50,000 crore. Considering the composition of projects being awarded so far, the IT portion(software, IT services, data centers, devices and telecom services) would be about 20% of the total outlay. Rest would be towards improvement of Urban Infrastructure. Out of 20% of the IT portion, the services relevant to your company can be estimated to be around 50% of this 20% amounting to approximately Rs.5,000 crore per annum. It may be noted that these are approximations.
C. Business Threats:
As we have been outlining in most of the annual reports the company faces various risks and threats associated with e government business. It includes possible payment delays, Time and Cost overruns, Disruptions in the project when head of the organization is changed, challenges in attracting good talent to work in less developed states and in interior regions of India etc. You company has been adopting a cautious approach of building business brick by brick rather than a big bang approach. Of late, Your company has grown its business to twice the number of states compared to last year. This increases the possible impact of these threats. ABM has been practicing stringent processes to mitigate the risks and has been successful in doing so.
Inexperienced competition remains a threat and results into loosing some of the opportunities. Some of the long term contracts of Company may be coming to an end this year causing some concerns on topline as well as bottom line. Efforts are underway to build new prospects to keep same momentum as exhibited in previous years.
D. Business Strategies and Planning:
The core strategy of the company remains by and large unchanged. It involves working closely with existing prestigious customers and retaining them and targeting newer geographies for promoting niche offering of the company. ABM also has been selectively adding to its core offerings wherever a high replication potential to other customers is perceived.
ABM has established its presence in states in North, South, West and East India by winning prestigious customers in these regions. A strategy of collaboratively working with large and reputed IT companies in consortium has yielded positive results and the strategy has been be deepened further by partnering with reputed companies like L and T in some smart city tenders.
E. Human Resource Management:
i) Aim of Human Resource Management
- To enable ABM to attract, integrate, develop and retain the best talent to deliver business growth.
- Fulfill business demand, deliver consistently high utilization rates and keep manpower costs within the desired range as per Business plan.
- Deploy meaningful practices to enhance the engagement, capability and competitiveness of our workforce.
ii) Achievements
The above aims were fulfilled to a large extent. The Talent Acquisition department has done a marvelous job of recruiting within Turn-Around Time (TAT) for the MP project. Employee Relationship was given higher focus during the year due to increased spread of employees across India and need to integrate them within ABM culture.
ii) Headcount
S. No. |
Year |
Current Headcount |
1 |
April 2015 - March 2016 |
720 |
2 |
April 2016 - March 2017 |
769 |
iv) HR Events
- Successful Employee Connect conducted at many locations.
- Organized Medical CAMP as an awareness towards one''s health.
- âThink Creative and Act Creativeâ challenge was endorsed to hunt the hidden talent within the team and encourage team bonding amongst the tech gigs.
v) Recognition
- Career Enhancement opportunities
- Recognized as a process which enable the Company to be agile, responsive to the dynamic environment and stay relevant to its customers.
- Hire talented Professional Graduates from the reputed universities and Institutes.
vi) Motivational and Focus Areas
- The Company continues to invest in the form of training for enhancing its Human Capital by providing opportunities to its employees to develop their skills and competencies relevant to the business requirements.
- We follow Equal Opportunities & Non Discrimination Policy and do not discriminate on basis of race, colour, gender, caste or religion.
- The Company''s relentless pursuit to connect with employees on a regular basis, communicate in an open and transparent manner, provide opportunities to learn and grow within the organization are yielding desired results as is evident from the high retention rate and the motivation and engagement levels of the employees.
F. Discussion on financial performance with respect to the operational performance:
( In Rs. Thousand)
|
Year ended |
Year ended |
|
31.03.2017 |
31.03.2016 |
Gross Income |
11,25,856 |
8,89,405 |
Less: service Tax |
1,45,926 |
98,614 |
Gross Income (net of Service Tax) |
9,79,930 |
7,90,791 |
Less: Total expenditure |
6,70,821 |
5,04,211 |
Gross profit before Depreciation & Taxation |
3,09,109 |
2,86,579 |
The Gross Income of the Company has increased compared to last year and improvement in the profits is also seen. Last year Company has implemented and gone live in some major projects causing some stretch on profitability.
18. RISK MANAGEMENT:
The Company has developed and adopted a Risk Management Policy. This policy identifies all perceived risk which might impact the operations and on a more serious level also threaten the existence of the Company. Risks are assessed department wise such as financial risks, information technology related risks, legal risks, accounting fraud, etc. The Risk Management Committee assists the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation and mitigation of operational, strategic and external environment risks. The Committee also ensures that the Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities.
The details of the Committee and its terms of reference are set out in the Corporate Governance report forming part of this report.
The following elements of risks which in the opinion of the Board can impact the performance of the company.
1. Industry: Industry risks are competition, newer business models like PPP, and disruptive technologies like Artificial Intelligence, Machine Learning, Virtual Reality (VR) and Augmented Reality (AR), Automation etc. Company has been monitoring the impact of these new technologies carefully. ABM has been working on deepening its roots into its core areas to create more entry barriers to competition as well as working closely with existing clients to give superior service and value. ABM is working with larger companies for consortium based bidding to prepare for opportunities like smart city where much stronger financial upfront investment is required for the project.
2. Supply side risk for talent acquisition: With growing customer base and mission critical projects, unavailability of right skilled resources at right time in right quantity can pose a risk. The Company constantly trains and re-trains existing resources for different skills and technologies. Suitable HR practices are adopted to minimize the attrition rate. Lateral hiring is done to bring in fresh leaders.
3. Cost pressures: Increasing operations expenses as well as rising employee cost can pose risk to the Company. The company has internal controls to monitor costs and escalate any abnormal increase for taking corrective actions. Project level and Business Unit level costs are monitored through a regular MIS on budgets and variances for timely corrective action.
4. Operational efficiency: The operational risk is mainly associated with client acquisition, execution of projects, information security and continuity of customer''s business operations. The company has project level monitoring where such risks are identified and escalated to board for suitable corrective measures on time.
5. Reputation: The Company''s projects are in Government sector which are necessarily funded by public finance. This may expose the Company to the risk of motivated public scrutiny from elements which are adversely affected by success of project leading to transparency as well as some times by competition. The Company strictly follows the Government processes of procurement and executes the projects with highest possible standards of ethics and best industry processes. Employees are made well aware of the Company policy and ensure the proper code of conduct is followed across projects uniformly. Company has published its own code of conduct for benefit of employees. This has been helping company so far to win over the confidence of customers, even in the situations of motivated public scrutiny which is aimed at hurting reputation of the Company.
19. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
There are no material changes or commitments made by Company that will affect the financial position of the company during the above mentioned period except the investment commitment upto '' 15 crores for investment of cyber security firm as informed to the BSE on 24thJanuary, 2017.
20. CODE OF CONDUCT:
The Company has adopted the Code of Conduct and ethics for all Board Members and Senior Management and this is strictly adhered to. A copy of the Code of Conduct is available on the website of the Company www.abmindia.com. In addition, members of the Board and Senior Management also submit, on an annual basis, the details of individuals to whom they are related and entities in which they hold interest and such disclosures are placed before the Board. The members of the Board inform the Company of any change in their directorship(s), chairmanship(s) / membership(s) of the Committees, in accordance with the requirements of the Companies Act, 2013 and Listing Regulations.
The members of the Board and Senior Management have affirmed their compliance with the code and a declaration signed by the Managing Director is annexed to this report.
21. AUDIT COMMITTEE COMPOSITION:
During the year all the recommendations of the Audit Committee were accepted by the Board. The Composition of the Audit Committee is as described in the Corporate Governance Report, which forms part of this report.
22. VIGIL MECHANISM:
Pursuant to the provisions of Section 177(9) of the Act and rules made there under, the Board of Directors had approved the Policy on Vigil Mechanism / Whistle Blower Policy to provide a mechanism for the Directors and employees to report their grievances, genuine concerns about unethical behaviour, actual or suspected fraud, and violation of the Company''s Code of Conduct. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee.
Brief details about the policy are provided in the Corporate Governance Report attached to this Report. The Whistle Blower Policy is available on the website of the Company.
23. PREVENTION OF INSIDER TRADING:
In compliance with the SEBI regulations on prevention of insider trading, the Company has in place (1) (i) a Code of Conduct to Regulate, Monitor and Report Trading by Insiders, the disclosure requirements and procedure thereto, Preservation of Price Sensitive Information, Trading while in possession of unpublished Price Sensitive Information, Prevention of misuse of Price Sensitive Information, etc.; and (2) a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information detailing the principles of fair disclosure. The same has been circulated to Directors and designated employees of the Company. They are regularly reminded about their obligation under the policies and also informed about prevention of insider trading into the securities of the Company.
The Company Secretary is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance with the Code.
24. RELATED PARTY TRANSACTIONS:
In line with requirement of the Companies Act, 2013 and Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is also available at Company''s website www.abmindia.com. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.
All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis, which is reviewed and updated on quarterly basis.
All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm''s Length basis. No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable.
25. EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 is appended as an Annexure to this Annual Report.
26. CORPORATE SOCIAL RESPONSIBILITY:
In accordance with the requirements of Section 135 of Companies Act, 2013, your Company has constituted a Corporate Social Responsibility Committee. The composition and terms of reference of the Corporate Social Responsibility Committee is provided in the Corporate Governance Report. Your Company has also formulated a Corporate Social Responsibility Policy which is available on the website of the Company.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.
27. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review.
28. PREVENTION OF SEXUAL HARASSMENT (POSH) AT WORKPLACE:
The Company has zero tolerance towards sexual harassment at the workplace and towards this end, has in place, a Policy for prevention of Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal ) Act, 2013. While maintaining the highest governance norms, the Company has set up Internal Complaints Committee to redress complaints received regarding sexual harassment. While maintaining the highest governance norms, the Company has appointed external independent person, who has done work in this area and has requisite experience in handling such matters, as member this Committee. The Policy aims to provide protection to all employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel safe and secure.
The Company has not received any complaint of sexual harassment during the financial year 2016-17. In order to build awareness in this area, the Company has been conducting programmes in the organization on a continuous basis.
29. PARTICULARS OF EMPLOYEES:
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure to this Report. The details of employee remuneration as required under provisions of Section 197 of Companies Act, 2013 and Rule 5(2) and 5(3) of Rules for the year ended 31st March, 2017 is also annexed to this report.
30. CONSERVATION OF ENERGY:
Your Company consumes energy mainly for the operation of its software development, thus the consumption of electricity is negligible. In order to conserve the electricity, the air conditioners are kept at a moderate temperature and all the electrical equipments are turned off, whenever they are not required by the office staff.
31. TECHNOLOGY ABSORPTION, ADOPTION & INNOVATION AND RESEARCH AND DEVELOPMENT:
Your Company has continued its focus on ''Productisation of Services'' by innovative business models. Company is putting in efforts to adopt the latest technologies to address the demand for âDigital Businessâ. The flagship products of the company have progressed well with respect to up gradation to the latest technology for reducing the total cost of ownership for customers and becoming more competitive in market.
32. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Your company did not have any Foreign Exchange earnings or outgo in last year.
33. LISTING FEES:
Your Company''s shares are listed in The Bombay Stock Exchange Limited, Mumbai and the Annual Listing fees for the year under review have been paid.
34. DIRECTORS'' RESPONSIBILITY STATEMENT:
The Directors hereby confirm that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit or Loss of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the Annual Accounts on a going concern basis;
e) they have laid down internal financial controls for the Company and such internal financial controls are adequate and operating effectively; and
f) they have devised proper system to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
35. ACKNOWLEDGEMENT:
Your Board places on record its heartfelt appreciation to the dedicated efforts and had work put in by the employees at all levels. The Company''s consistent growth is a testimony to their dedication and commitment. Your Board takes this opportunity to express sincere thanks to its valued customers for their continued patronage over the years.
Your Board acknowledges the contribution of bankers and business and technology partners, Auditors, Legal Advisors, Training Institutes, the Registrars, Government Authorities, Regulatory Bodies etc. who have always supported and helped the Company achieve its objectives and look forward for their continued support in future.
We also thank the shareholders for their continued trust and confidence bestowed on the Company.
For and on behalf of the Board
Date : 20th May, 2017 Prakash B. Rane Sharadchandra Abhyankar
Place: Mumbai Managing Director Director
(DIN:00152393) (DIN:00108866)
Mar 31, 2015
Dear Members,
The Company's Directors are pleased to present the 22ndAnnual Report
of the Company, along with the Audited Accounts, for the financial
year ended 31st March, 2015.
1. FINANCIAL PERFORMANCE OF THE COMPANY (STANDALONE) :
The highlights of financial performance of your Company are as follows:
(Amount in Rs. )
Year ended Year ended
31.03.2015 31.03.2014
Gross Income 92,51,01,791 82,40,50,188
Profit Before Interest and Depreciation 28,30,05,329 22,60,88,249
Finance Charges 18,51,377 14,34,128
Gross Profit 28,11,53,952 22,46,54,121
Provision for Depreciation 1,72,44,922 69,03,733
Net Profit Before Tax 26,39,09,030 21,77,50,388
Provision for Tax 8,87,95,505 7,29,12,959
Net Profit After Tax 17,51,13,525 14,48,37,429
Balance of Profit brought forward 57,97,76,398 46,93,40,543
Balance available for appropriation 75,48,89,923 61,41,77,972
Proposed Dividend on Equity Shares 2,00,02,200 2,00,02,200
Tax on proposed Dividend 40,95,390 33,99,374
Transfer to General Reserve - 11,00,000
Surplus carried to Balance Sheet 73,07,92,333 57,97,76,398
2. OPERATIONS OFTHE COMPANY:
The Company now operates from offices in New Delhi, Patna, Mumbai,
Bhopal and Chennai. The customers that your company currently supports
are nearing 400. Your Company has been able to retain all its important
customers due to the satisfactory services offered to these customers
and has won contracts to continue the post-implementation support.
3. DIVIDEND:
Your Directors have pleasure in recommending for approval of the
members at the Annual General Meeting a dividend of 20% ( i.e. Rs. 2/-
per equity share) for the Financial Year ended 31st March, 2015. The
dividend, if approved, at forthcoming Annual General Meeting will
result in the outflow of Rs. 2,00,02,200/- to the Company in addition to
Rs. 40,95,390/- by way of dividend distribution tax.
4. TRANSFER OF UNCLAIMED DIVIDENDTO INVESTOR EDUCATION AND PROTECTION
FUND:
Pursuant to the provisions of the Investor Education Protection Fund
(Uploading of information regarding unpaid and unclaimed amounts lying
with companies) Rules, 2012, the Company has already filed the
necessary form and uploaded the details of unpaid and unclaimed amounts
lying with the Company, as on 18th September, 2014 (date of last Annual
General Meeting) on the website of the Ministry of Corporate Affairs.
During the year under review, the Company has credited Rs. 97,939/- to
the Investor Education and Protection Fund (IEPF) pursuant to Section
125 of Companies Act, 2013.
5. SHARE CAPITAL:
The paid up equity share capital as on 31st March, 2015 was Rs.
10,00,11,000/-. No Bonus shares were issued during the year under
review. The company has not issued shares with differential voting
rights nor granted stock options nor sweat equity. The Company has not
bought back any of its equity shares during the year under review.
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Mr. M. N. Ahmed, Director retire by rotation at the forthcoming Annual
General Meeting and being eligible, offer himself for reappointment.
Also Mr. Paresh M. Golatkar has been appointed as Chief Financial
Officer of the Company with effect from 17th July, 2014.
In accordance with the provisions of Section 149 of the Companies Act,
2013, your Board of Directors are seeking the appointment of Mr. Sanjay
Mehta as an Independent Director for 5 (five) consecutive years
commencing 22nd August, 2015 up to 21st August 2020.
The Independent Directors of your Company have given the certificate of
independence to your Company stating that they meet the criteria of
independence as mentioned under Section 149 (6) of the Companies Act,
2013.
The details of programmes for familiarization of Independent Directors
with the Company, their roles, rights, responsibilities in the Company,
nature of the industry in which the Company operates, business model of
the Company and related matters are put up on the website of the
Company at www.abmindia.com.
In view of the performance of the Company on all the fronts as well as
continued efforts and efficient leadership by Mr. Prakash B. Rane,
Managing Director of the Company, the Nomination and Remuneration
Committee in its Meeting held on10th March, 2015 recommended to the
Board for his re-appointment for a period of five years upto 31st
March, 2020 and remuneration for a period of three years upto 31st
March, 2018, pursuant to the provisions of Section 196, 197 and 203 and
all other applicable provisions of the Companies Act, 2013 including
Schedule V to the Act.
The Board reviewed the recommendation and came to a conclusion that the
recommendation of the Nomination & Remuneration Committee should be
adopted and be placed before the Shareholders at the 22nd Annual
General Meeting. Therefor the Board hereby recommends the passing of
Special Resolution for re-appointment and remuneration of Mr. Prakash
B. Rane as Managing Director and Key Managerial Personnel of the
Company.
A brief profile of the Directors has been given in the Report on the
Corporate Governance as well as in the Explanatory Statement to the
Notice of the ensuing Annual General Meeting of the Company.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an evaluation of its
own performance, the directors individually as well as the evaluation
of the working of its Audit, Nomination & Remuneration and other
Committees.
Appointment and Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy on Director's appointment and remuneration
including criteria for determining qualifications, positive attributes,
independence of Director, and also remuneration for Key Managerial
Personnel and other employees forms part of Corporate Governance Report
of this Annual Report.
7. MEETINGS:
During the year nine Board Meetings and five Audit Committee Meetings
were convened and held. The details of which are given in the Report on
Corporate Governance. The intervening gap between the Meetings was
within the period prescribed under the Companies Act, 2013 and the
Listing Agreement.
8. PUBLIC DEPOSITS:
Your Company has not accepted any deposits within the meaning of
Section 73 of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules, 2014.
9. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have any Subsidiary, Joint venture or Associate
Company.
10. AUDITORS:
M/s. Borkar & Muzumdar, Chartered Accountants were appointed as
Statutory Auditors of the Company from the last Annual General Meeting
held on 18th September, 2014 until the conclusion of 26th Annual
General Meeting. As per the provisions of Section 139 of Companies Act,
2013, the appointment of Auditors is required to be ratified by Members
at every Annual General Meeting.
11. AUDITORS' REPORT:
The Auditors' Report does not contain any qualification, reservation,
adverse remark or disclaimer. Notes to Accounts and Auditors remarks in
their report are self-explanatory and do not call for any further
comments.
12. SECRETARIAL AUDIT REPORT:
In the terms of Section 204 of the Companies Act and Rules made
thereunder, Mr. Upendra Shukla, Practicing Company Secretary has been
appointed as Secretarial Auditors of the Company for the financial year
2014-2015. The Secretarial Audit inter alia, includes audit of
compliance with the Companies Act, 2013, and the Rules made under the
Act, Listing Agreement and Regulations and Guidelines prescribed by the
Securities and Exchange Board of India and Foreign Exchange Management
Act, 1999.
The Secretarial Audit Report is annexed of this Annual Report. The
Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
13. INTERNAL AUDIT AND INTERNAL CONTROL SYSTEMS:
The Company has appointed M/s. S.V. Tawade & Associates, Chartered
Accountants as Internal Auditor of the Company for the financial year
2014-2015.
The Company has in place adequate internal financial controls with
reference to financial statements. The internal audit department
monitors and evaluates the efficacy, adequacy of internal control
system in the Company and its compliance with operating systems,
accounting procedures and policies at all locations of the Company.
Adequate records and documents are maintained as required by laws.
Based on the report of internal audit function, corrective actions are
being taken in their respective areas and thereby strengthen the
controls. The Company's Audit Committee reviews the internal control
system. All efforts are being made to make the internal control systems
more effective and independent.
14. CORPORATE GOVERNANCE:
Your Company is committed to the tenets of good Corporate Governance
and has taken adequate steps to ensure that the requirements of
Corporate Governance as laid down in Clause 49 of the Listing Agreement
are complied with.
A separate report on Corporate Governance is being published as a part
of the Annual Report of the Company. The requisite certificate from the
Auditors of the Company confirming compliance with the conditions of
corporate governance is attached to the report on Corporate Governance.
18. CODE OF CONDUCT:
The Company has adopted the code of conduct and ethics for all Board
Members and Senior Management and this is strictly adhered to. The Code
lays down the standard procedure of business conduct which is expected
to be followed by the Directors and Senior Management employees in
their business dealings and in particular on matters relating to
integrity in the work place, in business practices and in dealing with
stakeholders. The code has been circulated to all the Members of the
Board and Senior Management and the same has been put on the Company's
website www.abmindia.com. All the Board Members and Senior Management
have affirmed their compliance with the code and a declaration signed
by the Managing Director is annexed to this report.
19. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL
MECHANISM:
The Audit Committee consists of the following members:
a. Mr. Sharadchandra Abhyankar, Chairman
b. Dr. Ajit C. Kulkarni, Member
c. Mr. M. N. Ahmed, Member
The above composition of the Audit Committee consists of independent
Directors viz., Mr. Sharadchandra Abhyankar and Dr. Ajit C. Kulkarni
who form the majority.
In pursuant to the provisions of section 177 of the Companies Act,
2013, a Vigil Mechanism for directors and employees to report genuine
concerns has been established. The Company has adopted the Whistle
Blower Policy and oversees through the committee, the genuine concerns
expressed by the employees and other Directors. The Company has also
provided adequate safeguards against victimization of employees and
Directors who express their concerns. The Company has provided direct
access to the Chairman of the Audit Committee on reporting issues
concerning the interests of employees and the Company. The Vigil
Mechanism Policy has been uploaded on the website of the Company at
www.abmindia.com.
20. PREVENTION OF INSIDERTRADING:
The Company has adopted a Code of Conduct for Prevention of Insider
Trading with a view to regulate trading in securities by the Directors
and designated employees of the Company. The Code requires
pre-clearance for dealing in the Company's shares and prohibits the
purchase or sale of Company shares by the Directors and the designated
employees while in possession of unpublished price sensitive
information in relation to the Company and during the period when the
Trading Window is closed.
The Company Secretary is responsible for implementation of the Code.
All Board of Directors and the designated employees have confirmed
compliance with the Code.
21. RELATED PARTY TRANSACTIONS:
As per the requirements of the Companies Act, 2013 and Listing
Agreement, your Company has formulated a Policy on Related Party
Transactions which is also available on Company's website at
www.abmindia.com. The Policy intends to ensure that proper reporting,
approval and disclosure processes are in place for all transactions
between the Company and Related Parties.
All Related Party Transactions are placed before the Audit Committee
for review and approval. Prior omnibus approval is obtained for Related
Party Transactions for transactions which are of repetitive nature and
/ or entered in the Ordinary Course of Business and are at Arm's
Length.
All Related Party Transactions entered during the year were in Ordinary
Course of the Business and on Arm's Length basis. No Material Related
Party Transactions, i.e. transactions exceeding ten percent of the
annual consolidated turnover as per the last audited financial
statements, were entered during the year by your Company. Accordingly,
the disclosure of Related Party Transactions as required under Section
134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable.
22. EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act, 2013 and
rule 12(1) of the Companies (Management and Administration) Rules,
2014, an extract of annual return in MGT 9 is appended as an Annexure
to this Annual Report.
23. CORPORATE SOCIAL RESPONSIBILITY:
The Company is a socially responsible corporate citizen committed to
deliver a positive impact across social, economic and environmental
parameters. The Company acknowledges its responsibility in the manner
that its activities influence its consumers, employees and stake
holders, as well as the environment. The CSR Policy of the Company and
the details about the initiatives taken by the Company on CSR during
the year as per the Companies (Corporate Social Responsibility Policy)
Rules, 2014 have been disclosed as Annexure to this Report.
This was the first year for the Company to continue its CSR activities
in a structured manner. The Board established a CSR Committee. Based on
the recommendations of the CSR Committee, the Board of Directors
approved the CSR Policy. The CSR Committee is evaluating various
projects and schemes in which the Company can spend the CSR Funds. The
Company is evolving mechanism to assess projects to conduct its CSR
activities to ensure maximum benefit to society. Company could not
spend the entire stipulated CSR funds before finalising this report.
Company believes that mere compliance is not the goal of CSR activities
and the objective behind CSR Rule needs to be given due importance.
Company will expedite its CSR activities this year to achieve its
targeted goals.
The areas in which Company has committed and spent CSR funds so far are
Healthcare, Animal Protection, Eradicating poverty, Promotion of
education and Women and Child welfare.
24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
There were no loans, guarantees or investments made by the Company
under Section 186 of the Companies Act, 2013 during the year under
review.
25. PREVENTION OF SEXUAL HARASSMENT ATWORKPLACE:
Your Company is committed to provide a protective environment at
workplace for all its women employees. To ensure that every woman
employee is treated with dignity and respect and as mandated under
"The Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal ) Act, 2013" and Rules made thereunder, your Company
has adopted a policy for prevention of Sexual Harassment of Women at
workplace and has set up Internal Complaints Committee for
implementation of said policy. During the year Company has not
received any complaint of harassment.
26. PARTICULARS OF EMPLOYEES:
The details of employee remuneration as required under provisions of
Section 197 of Companies Act, 2013 and Rule 5(2) and 5(3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 for the year ended 31st March, 2015 is as follows:
Name of the Employee Mr. Prakash B. Rane
Age 49 years
Designation Managing Director
Gross Remuneration *' 140.60 Lacs
Qualification B.Tech., M.M.S.
Date of Commencement of the 27th April, 2000
employment
Number of years Experience 25 years
Previous Employment Advent Business Machines Pvt. Ltd
Disclosures with respect to the remuneration of Directors and employees
as required under Section 197 of Companies Act, 2013 and Rule 5 (1)
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 has been appended as Annexure to this Report.
27. CONSERVATION OF ENERGY:
Your Company consumes energy mainly for the operation of its software
development, thus the consumption of electricity is negligible. In
order to conserve the electricity, the Air Conditioners are kept at a
moderate temperature and all the electrical equipments are turned off,
whenever they are not required by the Office Staff.
28. TECHNOLOGY ABSORPTION, ADOPTION & INNOVATION AND RESEARCH AND
DEVELOPMENT:
Your Company has continued its focus on 'productisation of services' by
innovative business models. Company is putting in efforts to adopt the
SMAC technologies to address the demand for "Digital Business". The
flagship products of the company are being upgraded to the latest
technology for reducing the total cost of ownership for customers and
becoming more competitive in market.
29. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Your company did not have any Foreign Exchange earnings or outgo in
last year.
30. LISTING FEES:
Your Company's shares are listed in The Bombay Stock Exchange Limited,
Mumbai and the Annual Listing fees for the year under review have been
paid.
31. DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors hereby confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made from the same;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the Profit or Loss
of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 2013, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) we have prepared the Annual Accounts on a going concern basis;
e) they have laid down internal financial controls for the Company and
such internal financial controls are adequate and operating
effectively; and
f) they have devised proper system to ensure compliance with the
provisions of all applicable laws and such systems are adequate and
operating effectively.
32. ACKNOWLEDGMENT:
The Board of Directors of your Company place on record their deep
appreciation of the continued assistance and co- operation extended to
the Company by its shareholders, customers, investors, bankers,
financial institutions, RBI, SEBI, NSE, Regulatory Authorities, Central
and State Government agencies, suppliers etc. for their co-operation
and support. The Directors also express their deep sense of
appreciation to all the dedicated employees for their dedication,
especially their continued faith and commitment in the management team.
For and on behalf of the Board
Date : 26th May, 2015 Prakash B. Rane Sharadchandra Abhyankar
Place: Mumbai Managing Director Director
(DIN:00152393) (DIN:00108866)
Mar 31, 2014
ABM Knowledgeware Limited
The Company''s Directors are pleased to present the 21stAnnual Report
of the Company, along with the Audited Accounts, for the Financial Year
ended 31st March, 2014.
1. FINANCIAL RESULTS :
The highlights of financial performance of your Company are as follows:
(Amount in Rs. )
Year ended Year ended
31.03.2014 31.03.2013
Gross Income 824,050,188 754,395,241
Less: Service Tax 69,340,134 64,939,189
Gross Income (net of Service Tax) 754,710,054 689,456,052
Less: Total expenditure 530,055,933 500,467,030
Gross Profit before Depreciation
& Taxation 224,654,121 188,989,022
Less: Depreciation 6,903,733 3,482,387
Net Profit before Tax 217,750,388 185,506,635
Less: Provision for Taxation 72,912,959 59,883,715
Net Profit After Tax 144,837,429 125,622,920
2. OPERATIONS OF THE COMPANY :
The Company now operates from offices in Delhi, Patna, Mumbai and
Chennai. The customers that your Company currently supports are nearing
400. Your Company has been able to retain all its important customers
due to the satisfactory services offered to these customers and has won
contracts to continue the post-implementation support.
3. DIVIDEND :
Your Directors are pleased to recommend a dividend of 20% (i.e. Rs. 2/-
per Equity share) for the Financial Year ended 31st March, 2014. The
dividend, if approved, at ensuing Annual General Meeting will absorb Rs.
2,34,01,574 /- including Corporate Dividend Tax of Rs. 33,99,374/-
4. LISTING FEES :
Your Company''s shares are listed in The Bombay Stock Exchange Limited,
Mumbai and the Annual Listing fees for the year under review have been
paid.
5. CORPORATE GOVERNANCE :
The Company has in practice a comprehensive system of Corporate
Governance. A separate Report on Corporate Governance is provided at
page No.11 of this Annual Report, together with Certificate from
Auditors of the Company regarding compliance of the conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement with The Bombay Stock Exchange Limited.
6. PUBLIC DEPOSITS :
The Company has not accepted any public deposits during the year and as
such, no amount on account of principal or interest was outstanding as
on date of Balance Sheet.
7. DIRECTORS :
The Companies Act, 2013 is a positive step towards strengthening
corporate governance regime in the Country. Your Company is already in
substantial compliance of most of governance requirements provided
under the new law.
The Board of Directors have evaluated the criteria defined for
Independent Directors, as per provisions of the Companies Act, 2013,
and accordingly, Mr. M. N. Ahmed is ceased to be Independent Director
of the Company but now he is only Non-Executive Director of the
Company.
In accordance with the provisions of Section 149 of the Companies Act,
2013, your Board of Directors are seeking the appointment of Dr. Ajit
C. Kulkarni and Mr. Sharadchandra D. Abhyankar as Independent Directors
for 5 (five) consecutive years for a term upto the conclusion of the
26th Annual General Meeting of the Company in the calendar year 2019.
The Company has received requisite notices in writing from member
proposing Dr. Ajit C. Kulkarni and Mr. Sharadchandra D. Abhyankar for
appointment as Independent Directors.
The Company has received declarations from the Independent Directors of
the Company confirming that they meet with the criteria of independence
as prescribed both, under subsection 6 of section 149 of the Companies
Act, 2013 and under clause 49 of the listing agreement with the stock
exchange.
Mrs. Supriya P. Rane, Director of the Company retires by rotation at
the ensuing Annual General Meeting and being eligible, offer herself
for re-appointment.
A brief profile of the Directors has been given in the Report on the
Corporate Governance as well as in the Explanatory Statement to the
Notice of the ensuing Annual General Meeting of the Company.
8. AUDITORS :
M/s. S.P. Sule &Associates, Chartered Accountants, Statutory Auditors
of your Company shall retire at the forthcoming Annual General Meeting.
They have conveyed their intention of not seeking further appointment.
The Company has received a notice from one of its member signifying
intention of proposing the appointment of M/s. Borkar & Muzumdar,
Chartered Accountants, as the Statutory Auditors of the Company. The
Audit Committee also recommends the appointment of M/s. Borkar &
Muzumdar as the Statutory Auditors of the Company. M/s. Borkar &
Muzumdar, Chartered Accountants, have confirmed their willingness and
eligibility under the provisions of the Companies Act, 2013 to act as
Statutory Auditor of the Company, which is subject to shareholders''
approval.
A Resolution proposing appointment of M/s Borkar & Muzumdar as the
Statutory Auditors of the Company, pursuant to Section 139 of the
Companies Act, 2013, forms the part of Notice.
The Board of Directors wishes to place on record their appreciation for
the excellent services rendered by M/s. S. P. Sule & Associates as the
Statutory Auditors of the Company. M/s. S. P. Sule & Associates, during
their association with the Company, have maintained highest level of
professional standards and transparency, throughout.
9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT :
A. Industry Structure and Development :
Business environment in last 2-3 years in this industry has been
challenging. Several new initiatives as well as ongoing projects have
been affected due to the anxiety in decision makers as a result of
excessive public scrutiny of even bonafide decisions. This has affected
sentiments of several e-Governance companies. The PPP projects have not
met with unqualified success. The procurement processes have come under
pressure due to complexity associated with knowledge based offerings.
The new Government has laid substantial emphasis on Digital Nation and
thereby opening of doors for renewed hopes. Various focus areas have
been outlined by the new Government which, if indeed move from drawing
table to execution stage, can help the e-Governance industry in a big
way. Initiatives like "Smart City" can directly benefit your Company as
we have a leadership position on space of e-Municipality in the
country.
B. Existing Opportunities and Outlook :
It has been noticed that some IT companies which entered into this
space without requisite commitment and competence could not sustain in
the industry for long. That has helped to some extent as customers have
started realizing the value of competent IT companies like ABM. The
trend of unrealistically aggressive cost bidding may also slowly be
arrested as the real efforts and costs associated with executing
successful e-Governance projects are becoming evident to Buyers as well
as Bidders. Your company is carefully analyzing the changing landscape
of the industry and re-strategizing to ensure maximum returns on the
investment made so far in this space.
C. Business Threats :
The reality today is that several projects and their execution are
facing challenges. Some projects have failed or been shelved because of
flaws at different stages, their conceptualization, scope definition,
vendor selection and poor execution due to shortcomings both on the
Government and the implementing vendor''s side. Issues related to Public
Procurement of IT projects (e-Governance projects) are a cause for
concern for both buyers (i.e. Government Departments) and potential
bidders.
The following elaboration of issues, related to procurement of IT
services, as identified by NASSCOM remain almost unchanged:
- Project execution, project conceptualization and scope of work need
much more clarity and practical approach
- Ambiguous and one sided Contracts, T&C.
- Absence of a Project Champion.
- Delays in deliverables from the Government.
- Delays in timely sign offs to vendors by departments.
- Project bids incorporating many non-IT items that increased project
cost.
- Absence of counter guarantees in SLAs, to deal with defaults by the
Government and Government agencies.
- Government expectation is that industry changes its focus from
product orientation to citizen service delivery in e-Governance
projects.
- The feeling among policymakers is that industry is still oriented
towards the supply of IT goods and services and the service orientation
which is at the core of all e-Governance services, is lacking.
D. Business Strategies and Planning :
Your company has been focusing on the strategy of building long term
relationships with customers by giving reliable and effective services
to them. Another strategy is to try and win projects in areas which
have potential to replicate the same across other states in India. This
will continue as a prime strategy.
Company''s office in Delhi has been able to cover important states in
north India and has acquired customers in important states in the
region for geographical expansion of e-Municipality offerings. Company
has acquired a Product (Government Resource Planning-GRP) which can
help in widening the base of govt. customers beyond e-Municipality.
Company has entered into newer domains like Tourism and Financial
sectors in the e-Governance domain and hopes to build further on these
breakthroughs in coming years.
E. Human Resource Management :
Your Company recognizes male and female paradigm, who can devise a
simple, respectful and conducive corporate work environment for their
respective teams, which inspires others to emulate them. ABM is an
equal opportunity employer and strives to attract the best available
talent to provide a competitive edge to the organization, thereby
ensuring diversity in its workforce. Your Company has effectively
responded to business challenges through manpower engagement strategies
involving cross functional teams, aimed at expanding the market and
customer reach, has been a significant milestone in this direction.
In order to develop its human resources for harnessing their potential
to the fullest and for according ample opportunity for realizing
individual as well as organizational goals, your Company has been
making sustained efforts through various training and development
activities with focus on preservation of skills, in
specialized/advanced skills and technology through association with
premier institutes.
Our Employees instilled by our cordial and healthy work culture and
possessing diverse talents and backgrounds, are the key to the
Company''s continued success. As we go forward, we will continue to
strengthen our culture of respecting and understanding diversity. The
deep trust and commitment of our workforce drives our continuous
efforts to lead change and innovation.
F. Discussion on financial performance with respect to the operational
performance :
(Amount in Rs. )
Year ended Year ended
31.03.2014 31.03.2013
Gross Income 824,050,188 754,395,241
Less: Service Tax 69,340,134 64,939,189
Gross Income (net of Service Tax) 754,710,054 689,456,052
Less: Total expenditure 530,055,933 500,467,030
Gross Profit before Depreciation
& Taxation 224,654,121 188,989,022
The revenues of the Company have increased, compared to last year.
Gross revenue has increased by around 9% whereas the profitability has
gone up by around 15%. This is a result of better utilization of the
resources in particular and sustained efficiency of operations in
general.
10. INFORMATION UNDER SECTION 217(1)(e) :
The information required to be furnished Under Section 217 (1) (e) of
the Companies Act, 1956 and the Rules made thereunder, is provided in
Annexure-A, forming part of the Report.
11. PARTICULARS OF EMPLOYEES :
The information as per section 217(2A) of the Companies Act, 1956, read
with the Companies (Particulars of Employees) Rules, 1975 and forming a
part of Directors'' Report for the year ended 31st March, 2014 is as
follows:
Name of the Employee Mr. Prakash B. Rane
Age 48 years
Designation Managing Director
Gross Remuneration * Rs.116.49 Lacs
Qualification B.Tech., M.M.S.
Date of Commencement of
the employment 27th April, 2000
Number of years Experience 21 years
Previous Employment Advent Business Machines Pvt. Ltd.
*Note: Gross Remuneration includes salary (excluding Employer''s share
of PF Contribution) and commission for the year ended on 31st March,
2014.
12. DIRECTORS'' RESPONSIBILITY STATEMENT :
Pursuant to the provisions of section 217(2AA) of the Companies Act,
1956, your Directors hereby confirm that:
a) in the preparation of the Annual Accounts for the financial year
ended 31st March, 2014, all applicable accounting standards have been
followed and that no material departures have been made from the same;
b) we have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year ended 31st March, 2014 and
of the Profit or Loss of the Company for that period;
c) we have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the
provisions of Companies Act, 1956, for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities; and
d) we have prepared the Annual Accounts on a going concern basis.
13. ACKNOWLEDGEMENT :
The Board of Directors of your Company take this opportunity to thank
the customers, shareholders, suppliers, bankers, business partner
associates, financial institutions, RBI, SEBI, BSE, all Regulatory
Authorities, Central and State Governments for their consistent
co-operation, support and valuable guidance to the Company.
Your Directors wishes to place on record their deep sense of
appreciation of the good work done by all employees of the Company, as
a result of which your Company continues to be frontrunner in the IT
Services industry in India.
For and on behalf of the Board
Date: 7th July, 2014 Prakash B Rane
Place: Mumbai Managing Director
Mar 31, 2013
To the Members of ABM Knowledgeware Limited
The Directors have pleasure in presenting the Twentieth Annual Report
together with the Audited Accounts of your Company for the year ended
31st March, 2013.
1. FINANCIAL RESULTS :
(Amount in Rs.)
Year ended Year ended
31.03.2013 31.03.2012
Gross Income 754,395,241 1,030,029,121
Less: Service Tax 64,939,189 90,314,082
Gross Income (net of Service Tax) 689,456,052 939,715,039
Less: Total expenditure 500,467,030 709,922,799
Gross Profit before Depreciation
& Taxation 188,989,022 229,792,240
Less: Depreciation 3482,387 2,998,297
Net Profit before Tax 185,506,635 226,793,943
Less: Provision for Taxation 59,883,715 74,749,905
Net Profit After Tax 125,622,920 152,044,038
2. OPERATIONS OF THE COMPANY :
The revenues of the Company have dropped compared to last year. Last
year''s gross revenues of Rs. 103 Crores included execution of a single
order of approximately Rs. 32 Crores. That is one of the reasons for the
drop in revenues. However the drop in profitability is lesser compared
to the proportion of drop in the revenues due to efficient operations,
coupled with effective and cost control measures.
3. DIVIDEND :
Keeping in view the performance of theCompany and other relevant
considerations, your Directors recommend payment of dividend @15% on
the paid up capital of the Company absorbing an amount of Rs.
1,74,35,293/- including dividend tax of Rs. 24,33,643/- for the year
ended 31st March, 2013. The dividend, if approved by the shareholders,
will be paid to those members, whose names appear on the Register of
Members as on the book closure date.
4. LISTING FEES :
Your Company''s shares are listed in The Bombay Stock Exchange Limited,
Mumbai and the Annual Listing fees for the year under review have been
paid.
5. CORPORATE GOVERNANCE :
The Company has in practice a comprehensive system of Corporate
Governance. A separate Report on Corporate Governance forms part of the
Annual Report. A certificate of Company''s Statutory Auditors regarding
compliance of the conditions of Corporate Governance as stipulated
under Clause 49 of the Listing Agreement is annexed to the Report on
Corporate Governance.
6. PUBLIC DEPOSITS :
Your Company has not accepted deposits falling within the provisions of
Section 58A of the Companies Act, 1956 read with the Companies
(Acceptance of Deposits) Rules, 1975 during the year under review.
7. DIRECTORS :
Dr. Ajit C Kulkarni and Mr. Sharadchandra D. Abhyankar, Directors of
the Company, are due to retire by rotation at the ensuing Annual
General Meeting and being eligible, offer themselves for
re-appointment. A brief profile of the Directors retiring by rotation
and seeking re-election, to be provided as per Clause 49 of the Listing
Agreement, is given in the Corporate Governance Report.
8. AUDITORS :
M/s. S. P. Sule & Associates, Chartered Accountants, Statutory Auditors
of the Company, will retire at the conclusion of the ensuing Annual
General Meeting and are eligible forre-appointment as Statutory
Auditors. The Audit Committee of the Board has recommended their
re-appointment as Auditors for the year 2013-14. M/s. S. P. Sule &
Associates have confirmed their eligibility and willingness to continue
to act as Auditors of the Company.
9. INFORMATION UNDER SECTION 217(1)(e) :
The information required to be furnished Under Section 217 (1) (e) of
the Companies Act, 1956, and the Rules made thereunder, is provided in
Annexure-A, forming part of the Report.
10. PARTICULARS OF EMPLOYEES :
The information as per section 217(2A) of the Companies Act, 1956, read
with the Companies (Particulars of Employees) Rules, 1975 and forming a
part of Directors'' Report for the year ended 31st March, 2013 is as
follows:
*Note: Gross Remuneration includes salary (excluding Employer''s share
of PF Contribution) and commission for the year ended on 31st March,
2013.
11. DIRECTORS'' RESPONSIBILITY STATEMENT :
Pursuant to the provisions of section 217(2AA) of the Companies Act,
1956, your Directors hereby confirm that:
a) in the preparation of the Annual Accounts, the applicable accounting
standards in accordance with provisions of the Companies Act, 1956 have
been followed and that no material departures have been made from the
same ;
b) we have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year ended 31st March, 2013 and
of the Profit or Loss of the Company for that period;
c) we have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) we have prepared the Annual Accounts on a going concern basis.
12. ACKNOWLEDGEMENT :
Your Directors take this opportunity to thank all the stakeholders
including Shareholders, Financial Institutions, Banks, Customers,
Regulatory and Government Authorities for their continued support and
cooperation extended to the Company.
Your Directors wish to place on record their appreciation for the
invaluable contribution made and excellent co- operation extended by
the employees at all levels, who through their competence and hard
work, have enabled your Company achieve good performance year after
year and look forward to their support in the future as well.
For and on behalf of the Board
Date: 27th May, 2013 Prakash B Rane
Place: Mumbai Managing Director
Mar 31, 2012
The Directors are pleased to present their 19th Annual Report together
with the Audited Accounts of the Company highlighting the business
operations and financial results of your Company for the year ended
31st March, 2012.
1. FINANCIAL RESULTS :
(Amount in Rs)
Year ended Year ended 31.03.2012 31.03.2011
Gross Income 1,030,029,121 589,496,479
Less: Service Tax 90,314,082 53,241,297
Gross Income (net of Service Tax) 939,715,039 536,255,182
Less: Total expenditure 709,922,799 375,578,296
Gross Profit before Depreciation
& Taxation 229,792,240 160,676,886
Less: Depreciation 2,998,297 2,496,722
Net Profit before Tax 226,793,943 158,180,164
Less: Provision for Taxation 74,749,905 52,508,309
Net Profit After Tax 152,044,038 105,672,125
2. OPERATIONS OF THE COMPANY :
The operations of the Company, compared to last year, have shown
significantly higher revenues and profitability. The increased
profitability is due to more efficient operations coupled with
effective and cost control measures as well as some large onetime
orders executed during the year.
3. DIVIDEND :
Your Directors have recommended a final devidend at the rate 15% per
equity share for the financial year ended 31st March, 2012. The
dividend will be payable to all the shareholders, whose names appear in
the Register of Members as on 19th July, 2012. If the dividend
recommended is approved at the 19th Annual General Meeting, a sum
ofRs11,74,35,293 (including dividend tax and surcharge) will become
payable.
4. LISTING FEES :
All the compliances including payment of annual listing fees for the
year under review have been paid to the Bombay Stock Exchange Limited,
where your Company's shares are listed, within the stipulated time.
5. CORPORATE GOVERNANCE :
The Management of ABM has positioned Corporate Governance as s one of
their top-priority management issues in recognition of the
responsibilities they bear toward their stakeholders. Our Company's
philosophy on Corporate Governance envisages attainment of highest
level of transparency, accountability and fairness in respect of its
operations and achievement of highest internal standards in Corporate
Governance. The Company believes that all actions and operations must
sub serve its best business interest and enhance overall shareholders'
value. We are also committed to achieving a sustainable society by
meeting societal needs and expectations.
In pursuance to Clause 49 of the Listing Agreement with the Bombay
Stock Exchange Limited, Corporate Governance Report is given elsewhere
and forms part of this Report.
A certificate from Auditors of the Company regarding compliance of the
conditions of Corporate Governance as stipulated under Clause 49 of the
Listing Agreement with the Bombay Stock Exchange Limited is annexed to
this report along with Management Discussion and Analysis Report.
6. PUBLIC DEPOSITS :
During the year under review, the Company has not accepted any fixed
deposits from the public, and as on March 31, 2012 the Company had no
unclaimed deposits or interest thereon due to any depositor.
7. DIRECTORS :
As per Article of Association of the Company, Mr. M. N. Ahmed retires
by rotation and being eligible offer himself for re-appointment at this
Annual General Meeting. The Board of Directors has recommended his
re-appointment for consideration of the Shareholders. The brief resume
of Mr. M. N. Ahmed is given in the Corporate Governance Report.
8. AUDITORS :
M/s. S. P. Sule & Associates, Chartered Accountants, Statutory Auditors
of the Company, will retire at the conclusion of the ensuing Annual
General Meeting and are eligible for re-appointment as Statutory
Auditors for the financial year 2012-13. The Company has received a
letter from them to the effect that their re-appointment, if made,
would be within the limit prescribed under section 224(1B) of the
Companies Act, 1956.
9. REVISION OF THE REMUNERATION OF MANAGING DIRECTOR :
In the view of the performance of the Company on all the fronts as well
as continued efforts and efficient leadership by Mr. Prakash B. Rane,
the Remuneration Committee recommended to the Board for the revision of
his remuneration and suggested that he should be paid the remuneration
as per the limits contained in Sections 198, 309, 310 and all other
applicable provisions of the Companies Act, 1956 including Schedule
XIII to the Act.
The Board reviewed the recommendation and came to conclusion that the
recommendation of the Remuneration Committee should be adopted and be
placed before the Shareholders at the 19th Annual General Meeting.
Therefore the Board hereby recommends the passing of Special Resolution
to pay remuneration to Mr. Prakash B. Rane comprising of salary,
allowance, perquisites and commission from 1st April, 2011 to 31st
March, 2015, subject to the limits contained in Sections 198, 309, 310
and all other applicable provisions of the Companies Act, 1956
including Schedule XIII to the Act.
It may be noted that as per Section 309(3) of the Companies Act, 1956,
Mr. Prakash B. Rane would be paid remuneration within the overall limit
of 5% of the Net Profit calculated as per the provisions of 349 and 350
of the Act. In any financial year, if the Company has no profit or its
profits are inadequate, the remuneration payable to Mr. Prakash B. Rane
including perquisites set out and the Clause (A) of this Special
Resolution as minimum remuneration.
The details of the remuneration package are forming part of the Special
Resolution and Corporate Governance Report on Page Nos. 2 and 14
respectively.
11. INFORMATION UNDER SECTION 217(1)(e) :
The information required to be furnished Under Section 217 (1) (e) of
the Companies Act, 1956, and the Rules made thereunder, is provided in
Annexure-A, forming part of the Report.
12. PARTICULARS OF EMPLOYEES :
The information as per section 217(2A) of the Companies Act, 1956, read
with the Companies (Particulars of Employees) Rules, 1975 and forming a
part of Directors' Report for the year ended 31st March, 2012 is as
follows:
Name of the Employee Mr. Prakash B. Rane
Age 46 years
Designation Managing Director
Gross Remuneration 122.81 Lacs
Qualification B.Tech., M.M.S.
Date of Commencement of the employment 27th April, 2000
Number of years Experience 19 years
Previous Employment Advent Business Machines Pvt. Ltd
*Note: Gross Remuneration includes salary and commission for the year
ended on 31st March, 2012.
13. DIRECTORS' RESPONSIBILITY STATEMENT :
Pursuant to the provisions of section 217(2AA) of the Companies Act,
1956, the Directors of the Company hereby confirm that :
a) in the preparation of the Annual Accounts, the applicable accounting
standards in accordance with provisions of the Companies Act, 1956 have
been followed and no material departures have been made from the same;
b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year ended 31st March, 2012
and of the Profit or Loss of the Company for that period;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act, 1956, for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities; and
d) the Board of Directors have prepared the Annual Accounts on a
"going concern" basis.
14. ACKNOWLEDGEMENT :
Your Directors' place on record their deep appreciation of the
continued assistance and co-operation extended to the Company by its
customers, investors, bankers, Central and State Government. Your
Company continues to enjoy the full cooperation of all its employees.
The Directors wish to place on record their appreciation of the good
work done by them.
For and on behalf of the Board
Date: 19th May, 2012 Prakash B. Rane
Place: Mumbai Managing Director
Mar 31, 2011
Dear members,
The Directors have pleasure in presenting the 18th Annual Report &
Audited Accounts of the Company for the financial year ended 31st'
March, 2011.
1. FINANCIAL RESULTS
(Amount in Rs.)
Year ended Year ended
31.03.2011 31.03.2010
Gross Income 589,496,479 432,888,368
Less: Service Tax 53,241,297 43,928,576
Gross Income (net of Service Tax) 536,255,182 388,959,792
Less: Total expenditure 375,578,296 285,089,482
Gross Profit before Depreciation
& Taxation 160,676,886 103,870,310
Less: Depreciation 2,496,722 1,488,042
Net Profit before Tax 158,180,164 102,382,268
Less: Provision for Taxation 52,508.309 33,645.905
Net Profit After Tax 105,672,125 68,736,363
2. OPERATIONS OF THE COMPANY
The operations of the company, compared to last year, have shown higher
revenues and profitability. The increased profitability is due to more
efficient operations coupled with effective cost control measures.
3. DIVIDEND
The Directors are pleased to recommend a final dividend at the rate of
15% per equity share for the financial year ended 31st March, 2011 as
against 10% per equity share for the previous financial year ended 31st
March, 2010. The final dividend, subject to approval by the AGM on 25,h
August 2011, will be paid to the Shareholders, in accordance with the
applicable rules and regulations u/s. 205 of the Companies Act, 1956.
The total cash outflow on account of dividend on equity shares for
financial year 2010-11 would be Rs. 1,74,93,237/-, including dividend
tax and surcharge thereon.
4. LISTING FEES
The annual listing fees for the year under review have been paid to the
Bombay Stock Exchange Limited, where Company's shares are listed.
5. CORPORATE GOVERNANCE
Your Company is committed to the tenets of good Corporate Governance
and has taken adequate steps to ensure that the requirements of
Corporate Governance as laid down in Clause 49 of the Listing Agreement
are complied with.
A separate report on Corporate Governance Report is being published as
a part of the Annual Report of the Company.
The Auditors of the Company have certified that conditions of Corporate
Governance, as stipulated under Clause 49 of the Listing Agreement, are
complied with by the Company and their certificate is annexed to this
report along with Management Discussion and Analysis Report.
6. PUBLIC DEPOSITS
We have not accepted any deposits and, as such, no amount of principal
or interest was outstanding as of Balance Sheet date.
7. DIRECTORS
As per Article of Association of the Company, Mrs. Supriya P Rane
retires by rotation and being eligible, offer herself for
re-appointment at this Annual General Meeting. The Board of Directors
has recommended her re-appointment for consideration of the
Shareholders. The brief resume of Mrs. Supriya P Rane is given in the
Corporate Governance Report.
The Board of Directors in their meeting held on 28th October, 2011 has
appointed Mr. Sharadchandra Abhyankar as Additional Non-Executive
Independent Director of the Company in terms of Section 260 of the
Companies Act, 1956. In view of his versatile experience, the Board
expects that with his induction as a member of the Board, the Company
would benefit immensely and he will prove to be an asset to the
Company. The Board of Directors recommends for your approval, the
appointment of Mr. Sharadchandra Abhyankar as Director of the Company,
liable to retire by rotation.
8. AUDITORS
M/s. S. P. Sule & Associates, Company's Statutory Auditors will retire
at the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment as Auditors. The Audit Committee of the
Board has recommended their re-appointment as Auditors for the year
2011-2012. M/s. S.P. Sule & Associates have confirmed their eligibility
and willingness to continue to act as Auditors of the Company.
10. INFORMATION UNDER SECTION 217(1) (e)
The information required to be furnished Under Section 217 (1) (e) of
the Companies Act, 1956, and the Rules made thereunder, is provided in
Annexure-A, forming part of the Report.
12. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of section 217(2AA) of the Companies Act,
1956, the Directors of the Company hereby confirm that:
a) in the preparation of the Annual Accounts, the applicable accounting
standards, in accordance with provisions of the Companies Act, 1956,
have been followed and no material departures have been made from the
same;
b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent, so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year ended 31st March, 2011
and of the Profit or Loss of the Company for that period;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act, 1956, for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities; and
d) the Board of Directors have prepared the Annual Accounts on a "going
concern" basis.
13. ACKNOWLEDGEMENT
Your Directors are sincerely thankful to the Company's customers,
suppliers, bankers, financial institutions, Central and State
Government authorities for the faith reposed in the Company and for
their continued support. Your Directors also appreciate and value the
contributions made by every ABMer for the stupendous growth of the
Company.
For and on behalf of the Board
Date: 30th May, 2011 Prakash B Rane
Mar 31, 2010
The Directors are pleased to present the 17,h Annual Report of the
Company together with the Audited Accounts for the year ended 31st
March, 2010.
1. FINANCIAL RESULTS:
(Amount in Rs.)
Year ended Year ended
31.03.2010 31.03.2009
Gross Income 432,888,368 449,875,627
Less: Service Tax 43,928,576 35,104,182
Gross Income ( net of Service
Tax) 388,959,792 414,771,445
Less : Total expenditure 285,089,482 323,496,030
Gross Profit before
Depreciation & Taxation 103,870,310 91,275,415
Less: Depreciation 1,488,042 1,515,578
Net Profit before Tax 102.382,268 89,759,837
Less: Provision for Taxation 33,645,905 30,405,293
Net Profit After Tax 68,736,363 59,354,544
2. OPERATIONS OF THE COMPANY
There is a marginal drop in the revenues compared to last year. This is
largely attributed to the long period of "Code of Conduct" during last
year owing to elections in the Central and State. During this period
the decision making process in govt, departments slows down
substantially affecting order closures and execution. The net profit
has shown increase due to efficient execution of orders on hand and
investments made in creating ERP skills within Company during earlier
period.
3. DIVIDEND
During this year, the Directors of the Company recommend a final
dividend @10% per share subject to the approval of the Shareholders of
the Company. The Dividend will be paid in accordance with the
applicable rules and regulations U/s.205 of the Companies Act, 1956.
The total amount of dividend on equity shares for the financial year
2009-10 would be Rs.1.17 crores, including dividend tax and surcharge
thereon, which is same as for the last year.
4. SEBI REGULATION & LISTING FEES
According to clause 51 of the Listing Agreement, it is compulsory to
file electronically the Annual Report, Corporate Governance Report,
Shareholding Pattern, etc. on its website www.sebiedifar.nic.in till
March 31, 2010. With effect from April 01, 2010 SEBI has deleted the
clause 51 of EDIFAR filling. We have filled all the reports on EDIFAR
as well as Corporate Filing Dissemination System website. All the
compliances including payment of annual listing fees for the year under
review have been paid to Bombay Stock Exchange Ltd. within the time
stipulated by SEBI, where your Companys shares are listed.
5. CORPORATE GOVERNANCE
Your Company follows all the rules and regulations along with the
compliances laid down in the clause 49 of the Listing Agreement. As
required by the clause 49, a detailed Corporate Governance Report is
included in the Annual Report. Corporate Governance is the most
important part of the Annual Report which deals with the compositions,
committees and the code of conduct followed by the Company.
A certificate from Auditors of the Company regarding the compliances
stipulated in Corporate Governance is annexed to this report along with
Management Discussion and Analysis Report.
6. PUBLIC DEPOSITS
The Company has neither invited nor accepted any deposits during the
year under review.
7. RETIRING DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Associations of the Company, Mr. M.N.Ahmed and Dr. Ajit C
Kulkarni, the Directors, are liable to retire by rotation at the
ensuing Annual General Meeting and being eligible, offer themselves for
re-appointment. The details of these Directors are included in the
Corporate Governance Report. Your Directors recommend the
re-appointment of Mr. M.N.Ahmed and Dr. Ajit C Kulkarni as Directors,
for your approval.
The Board of Directors of the Company express their deep condolences on
the sad demise Shri. Shrikar Kulkarni, Director of the Company on 15th
January, 2010 and pray that his departed soul may rest in eternal
peace. The Board placed on record its deep sense of appreciation for
the invaluable contributions made by Shri Shrikar Kulkarni during his
tenure as a Director of the Company from 27th October, 2005 to 15th
January, 2010.
8. AUDITORS
The Statutory Auditors of Your Company, M/s. S.P.Sule & Associates,
Chartered Accountants, retire at the ensuing Annual General Meeting.
The Audit Committee of the Board has recommended their re-appointment
as Auditors for the year 2010-2011- M/s. S.P.Sule & Associates have
confirmed their eligibility and willingness to continue to act as
Auditors of the Company.
9. RE-APPOINTMENT OF MANAGING DIRECTOR
In view of the performance of the Company on all the fronts as well as
continued efforts and efficient leadership by Mr. Prakash B. Rane, the
Remuneration Committee in its Meeting dated 18th March, 2010
recommended to the Board for the revision of his remuneration and
suggested that he should be paid the remuneration as per Sections 198
and 309 of the Companies Act, 1956 instead of Schedule XIII thereof for
the period of 5 years upto 31st March, 2015.
The Board reviewed the recommendation and came to a conclusion that the
recommendation of the Remuneration Committee should be adopted and be
placed before the Shareholders at the 17th Annual General Meeting.
Therefore the Board hereby recommends the passing of Special Resolution
to pay remuneration to Mr. Prakash B. Rane as per section 198 and
309(3) of the Companies Act, 1956 after considering all the provisions
as per section 349 and 350 of the Act.
It may be noted that as per Section 309(3) of the Companies Act, 1956,
Mr. Prakash B. Rane would be paid remuneration within the overall limit
of 5% of the Net Profit calculated as per the provisions of 349 and 350
of the Act. In any financial year, if the Company has no profit or its
profits are inadequate, the remuneration payable to Mr. Prakash B. Rane
including perquisites, set out in the Clause (A) and (B) of this
Special Resolution as a minimum remuneration.
The details of the remuneration package are forming part of the Special
Resolution and Corporate Governance Report on Page Nos. 2 and 15
respectively.
11. INFORMATION UNDER SECTION 217(1)(e)
The information requiredto be furnished under Section 217 (1) (e) of
the Companies Act, 1956, is annexed to this Report as Annexure-A.
12. PARTICULARS OF EMPLOYEES
Information as per section 217(2A) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988 forms a part of the Directors Report.
As per the provisions of section 219(1)(b)(iv) of the Companies Act,
1956, the Report and Accounts are being sent to the shareholders of the
Company, excluding the statement of particulars of employees under
section 217(2A) of the Companies Act, 1956. Any shareholder interested
in obtaining a copy of the same may write to the Compliance Officer at
the Registered Office of the Company.
13. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of section 217(2AA) of the Companies Act,
1956, the Directors of the Company hereby confirm that:
a) in the preparation of the Annual Accounts, the applicable accounting
standards in accordance with provisions of the Companies Act, 1956 have
been followed along with proper explanation relating to material
departures;
b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year ended on 31st March,
2010 and of the Profit or Loss of the Company for that period;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act, 1956, for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
d) the Board of Directors have prepared the Annual Accounts on a "going
concern" basis.
14. ACKNOWLEDGEMENT
Your Directors take this opportunity to thank the Companys customers,
suppliers, bankers, financial institutions, Central and State
Government authorities and also shareholders for their valuable support
and co-operation to the Company.
Your Directors also place on record their gratitude for the committed
services rendered by all the employees of the Company and also look
forward to continue the same commitment and hard work in near future.
For and on behalf of the Board
Date: 29th May, 2010 Prakash B Rane
Place: Mumbai Managing Director
Mar 31, 2003
The Directors have pleasure in presenting the Tenth Annual Report and
Audited Statement of accounts of your Company for the year ended 31st
March 2003.
1. FINANCIAL RESULTS:
(Rupees in lacs)
Year Year
ended ended
31.3.2003 31.3.2002
Gross Income 863.78 1108.77
Less : Total Expenditure 771.94 973.77
Gross Profit before
Depreciation & Taxation 91.84 135.00
Less: Depreciation 34.46 28.84
Net Profit Before Tax 57.38 106.16
Provision for Taxation 30.65 44.00
Net Profit after Tax 26.73 62.16
2. DIVIDEND
Though the Company has wiped out the accumulated losses and have
recorded profit after tax, Your Directors are of the opinion that the
profits of the Company should be retained to strengthen the financial
structure, in view of the long term goals of the Company. Hence your
Directors do not recommend any dividend for the current year of
operations. (previous year NIL).
3. OPERATIONS OF THE COMPANY
The gross income of the Company in this year has come down by 22.09% to
Rs. 863.78 Lacs, as compared to Rs. 1108.77 lacs during last year. The
net profit has also been lower, compared to last year.
This has happened pre-dominantly because company is de-focussing from
the low margin Hardware business. Similarly, this year, the Company has
been focussing on adding more clients by minimising the dependence on
clients in Mumbai. This has resulted into increased business
development expenditure in various geographies like Middle East,
Gujarat, Goa, interior Maharashtra and North India. The competition in
this market segment is also increased due to melt -down of export
market and consequent lower man-power rates in domestic market due to
excess supply. This transformation of your company from "Hardware
-Software" to "only Software "and from a "single location " to a
"multi-locational " company made impact on the turn-over and
profitability in short term. But due to the indepth experience in this
field and larger penetration in the market, the Board of Directors is
confident about spectacular performance of your company in long term.
4. DIRECTORS
Mr. M. N. Ahmed and Dr. Ajit Kulkarni retire by rotation and being
eligible, offer themselves for re-appointment.
5. AUDITORS
The term of the office of the Companys present Auditors, S.P. Sule
&Associates, Chartered Accountants, Mumbai is expiring with the
conclusion of this Annual General Meeting to be held on 30th September,
2003. They have advised us that they are willing to be re appointed as
auditors of the Company.
A written confirmation under section 224(1) of the Companies Act, 1956
has been received from S.P. Sule & Associates, Chartered Accountants,
Mumbai that their appointment if made, will be in conformity with the
provisions of section 224 (1B) of the Companies Act, 1956.
6. DELISTING OF EQUITY SHARES
As you are already aware that your Company has successfully wiped out
the accumulated losses. The frequency of the trading of companys
shares has increased during the financial year 2002-2003, as compared
to that of 2001-2002 at the Stock Exchange, Mumbai, which is regional
Stock Exchange for your Company.
However, it was noticed that the shares of the company are not traded
at all on the other three Stock Exchanges Hyderabad, Coimbatore and
Madras. Your Directors have taken a serious note of it and have
recommended the delisting of the Companys shares from the aforesaid
three Stock Exchanges. Yours Directors also assure you that since the
Stock Exchange, Mumbai is a leading Stock Exchange in India, the
Shareholders in the vicinity of the aforesaid Stock Exchanges would not
suffer any problem for liquidating their shares. The delisting will be
carried out in strict compliance of the Securities and Exchange Board
of Indias (Delisting of Securities) Guidelines, 2003 and other
provisions in this respect.
8. INFORMATION UNDER SECTION 217(1)(e)
The information required to be furnished under Section 217(1)(e) of the
Companies Act, 1956 is annexed to this Report as Annexure A.
9. REPORT ON CORPORATE GOVERNANCE
The report on Corporate Governance in accordance with the guidelines of
Securities and Exchange Board of India and clause 49 of the Listing
agreements with the Stock Exchanges is enclosed in Annexure B.
10. DIRECTORS RESPONSIBILITY STATEMENT
The Directors confirm :
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
b) that the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year ended on
31st March, 2003 and of the profit or loss of the Company for that
period;
c) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act,1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
d) that the Directors have prepared the annual accounts on a going
concern basis.
11. PARTICULARS OF EMPLOYEES
Information Under Section 217 (2A) is not furnished, as there is no
employee drawing a remuneration more than Rs. 24,00,000/- p.a. or Rs.
2,00,000/- p.m. or part thereof.
ACKNOWLEDGEMENT
Your Directors sincerely appreciate the professionalism, commitment and
dedication displayed by the employees at all the levels. The Directors
also place on record their gratitude to the Members, Distributors,
Bankers for their continued support and vital contribution towards the
achievements of Your Company.
Your Directors also wish to appreciate the patronage given by the
various Government and Semi-Government Customers in India.
For and on behalf of the Board
Prakash B. Rane
Managing Director
Mumbai
16th August, 2003
Mar 31, 2001
The Directors have pleasure in presenting the Eighth Annual Report and
Audited Statement of accounts of your Company for the 6 months ended
31st March 2001.
1.FINANCIAL RESULTS
(Rupees in lacs)
6 months 15months
ended ended
31.3.2001 30.9.2000
Grooss Income 420.08 1255.90
Less Expenses 364.62 1057.14
Goss Profit before Deprection &
Misc Expences 5.46 198.76
Less Deprecition 7.55 14.22
Net Profit before Tax 47.91 184.54
Provision for Taxation 10.00 35.00
Net Profit after Tax 37. 91 149.54
2. DIVIDED
In view of the financial position of Company, your directors do not recommend
any dividend for the current year of operation. (previous year NIL).
3. DIRECTORS
Mrs. Supriya Rane and Mr. M.N. Ahmed, retire by rotation and being
eligible, offer themselves for re- appointment. The Company has
received notice under Section 257 of the Companies Act, 1956 proposing
the name of Dr. Ajit Kulkarni for the appointment as Director along
with the deposit of Rs. 500/- each.
4. AUDITORS
The term of the office of the Companys present Auditors, S.P Sule
&Associates, Chartered Accountants, Mumbai is expiring with the
conclusion of this Annual General Meeting to be held on 30th August,
2001. They have advised us that they are willing to be re appointed as
auditors of the Company.
A written confirmation under section 224(1) of the Companies Act, 1956
has been received from M/s. S.R Sule & Associates, Chartered
Accountants Mumbai, that their appointment if made, will be in
conformity with the provisions of Section 224 (1B) of the Companies
Act, 1956.
5. INVESTMENT IN FOREIGN SUBSIDIARY COMPANY
The Company had established itself well at the national level as far as
the E-Governance is concerned. Your Directors have explored the globaI
markets and are of the opinion that the specialisation of your Company
in the field of E-Governance can be optimally utilised at global level
with proper planning. Initially, the Company proposes to start with the
formation of a foreign subsidiary Company. As per the guidelines issued
by the Reserve Bank of India, the Company can invest upto Rs. 2 Crores.
Accordingly special resolution has been placed in the notice for the
approval of the members.
6.CHANGE IN THE MAIN OBJECT CLAUSE OF THE COMPANY
The nature of the Company has been changed to the information
Technology Company from a Non Banking FinanceCompany due to take over
of a fast growing E-Governance Company. Though the name of the
Company was changed to ABM Knowledgeware Ltd., the main object was that
of Finance and Leasing.
In order to being the Memorandum of Association in line with the main
business activities of the Company,the special resolution to change the
main object is necessary.
7. INFORMATION UNDER SECTION 217(1)(e)
The information required to be furnished under Section 217(1)(e) of the
Companies Act, 1956 is annexed. (Please See Annexure A)
8. REPORT ON CORPORATE GOVERNANCE
The report on Corporate Governance in accordance with the guidelines of
Securities and Exchange Board of India and clause 49 of the Listing
agreements with the Stock Exchanges is appearing elsewhere in this
Annual Report separately.
10. DIRECTORS RESPONSIBILITY STATEMENT
The Directors confirm :
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
b) that the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year ended on
31st March,2001 and of the profit or loss of the Company for that
period;
c) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act,1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
d) that the Directors have prepared the annual accounts on a going
concern basis.
11. PARTICULARS OF EMPLOYEES
Information Under Section 217 (2A) is not furnished as there is no
employee drawing a remuneration of more than Rs. 12,00,000/- p.a. or
Rs. 1,00,000/- p.m. or part thereof.
ACKNOWLEDGEMENT
Your Board would like to place on record its sincere appreciation for
the wholehearted support and contribution made by all its employees as
also its shareholders, distributors, bankers towards the achievements
of your Company. Your Directors also wish to appreciate the patronage
given by various Government and Semi-Government Customers in India.
For and on behalf of the Board
Prakash B. Rane
Chairman and Managing Director
Mumbai
15th June, 2001