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AUDITOR'S REPORT

ABM Knowledgeware Ltd.

You can view full text of the latest Auditor's Report for the company.
Market Cap. (₹) 114.31 Cr. P/BV 0.79 Book Value (₹) 72.47
52 Week High/Low (₹) 99/51 FV/ML 5/1 P/E(X) 7.95
Bookclosure 08/08/2018 EPS (₹) 7.19 Div Yield (%) 2.19
Year End :2017-03 

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of ABM Knowledgeware Limited (“the Company”), which comprise the Balance Sheet as at March 31 2017, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Companies (Auditor's Report) Order,2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the order.

2. As required by the section 143 (3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

g. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note 2.25 to the financial statements;

ii) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv) The Company has provided requisite disclosures in its financial statements as to the holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 2.28 to the financial statements.

The Annexure referred to in Independent Auditors' Report to the members of the Company on the standalone financial statements for the year ended 31st March 2017, we report that:

i. FIXED ASSETS:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) Fixed assets have been physically verified by the management at reasonable intervals. We are informed that no material discrepancies were noticed on such verification.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, all the title deeds of immovable properties are held in the name of the Company.

ii. INVENTORIES :

The Company is a service company, primarily rendering software services and does not hold any physical inventories. Thus, paragraph 3(ii) of the Order is not applicable to the Company.

iii. LOANS GIVEN BY COMPANY :

Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

iv. LOAN TO DIRECTOR AND INVESTMENT BY COMPANY:

Company has not granted any loan to any director or parties covered under section 185. In respect of investments the Company, has complied with the provisions of section 186 of the Companies Act, 2013. No such Guarantee or Security u/s 185 & 186 of the Companies Act, 2013 was given during the year.

v. DEPOSITS FROM PUBLIC :

The Company has not accepted any deposits from the public during the year.

vi. COST RECORDS :

According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 148 (1) of the Companies Act, 2013 in respect of operations carried out by the Company.

vii. STATUTORY DUES :

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including provident fund, income-tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of employees' state insurance and duty of excise.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax , sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues were in arrears as at 31 March 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of duty of customs, income tax, value added tax which have not been deposited with the appropriate authorities on account of any dispute. However, according to the information and explanations given to us, the following dues of service tax have not been deposited by the Company on account of disputes:

Name of the statute

Nature of dues

Amount (in Rs. 000's)

Period to which the amount relates

Forum where dispute is pending

Service Tax

Disallowance of Cenvat Credit on Rent

1,767.62

F.Y. 2010-2014

Assistant Comm. Of ST

Service Tax

Disallowance of Cenvat Credit on Business Promotion Expenses

411.27

F.Y. 2010-2014

Assistant Comm. Of ST

Service Tax

Disallowance of Cenvat Credit on Life Insurance, Gratuity

375.13

F.Y. 2010-2014

Assistant Comm. Of ST

Service Tax

Disallowance of Cenvat Credit on Rent

591.21

F.Y. 2014-2015

Assistant Comm. Of ST

Service Tax

Disallowance of Cenvat Credit on Rent

581.33

F.Y. 2015-2016

Assistant Comm. Of ST

Service Tax

Disallowance of Cenvat Credit on Life Insurance, Mediclaim

163.54

F.Y. 2014-2015

Assistant Comm. Of ST

Property Tax

Property Tax Payable

4,243.47

F.Y. 2013-2016

MCGM , Assessment and Collection Department, Mumbai

viii. REPAYMENT OF LOANS :

In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of borrowing obtained in the form of Overdraft facility (ODBD Facility) from Canara Bank, Fort branch and Canara Bank, Prabhadevi branch amounting to Rs. 2.5 Cr (1.25 Cr. each branch) nor has it defaulted in respect of the non-fund based facility in the form of Bank Guarantee of Rs.20 Cr.

ix. UTILISATION OF IPO AND FPO

The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

x. REPORTING OF FRAUD

According to the information and explanations given by the management, there was no fraud noticed or reported by the company or any fraud on the Company by its officers or employees during the year.

iv. APPROVAL OF MANAGERIAL REMUNERATION

According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

v. NIDHI COMPANY

In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

vi. RELATED PARTY TRANSACTIONS

According to the information and explanations given to us, the Company has disclosed all the transactions with related parties during the year in the Financial Statements and the same are in accordance with section 177 and 188 of Companies Act, 2013 and as required by the applicable Accounting Standards.

vii. PREFERENTIAL ALLOTMENT / PRIVATE PLACEMENT

According to the information and explanations given to us the Company has not made any preferential allotment or private placement of shares / fully or partly convertible debentures, during the year under audit.

viii. NON CASH TRANSACTIONS

According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with Directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

ix. REGISTRATION U/S 45IA OF RBI ACT, 1934

The Company is not required to be registered under section 45-IA of RBI Act, 1934.

For Borkar & Muzumdar

Chartered Accountants

Firm Registration No.:101569W

Supriya D. Bhat

Date: 20th May, 2017 Partner

Place: Mumbai ( M.No. 048592)

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