ABM Knowledgeware Ltd (Code 531161) - HBJ Capital's (MPS Unit) - Busin

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ABM Knowledgeware Ltd:

ABM Knowledgeware Ltd HBJ Capital, India Web: www.hbjcapital.com E-Mail: info@hbjcapital.com Call: +91 98867 36791 ABM Knowledgeware Ltd promoted by Mr. Prakash B. Rane, is one of the few IT companies in India with exclusive focus on E-Governance since 1998. Within a short span of time it has attained a leadership position in the niche space of E-Governance. The company has conceptualized various pioneering and successful strategic solutions in E-Governance, which have become benchmark in the industry . ABM was recently awarded the "NASSCOM Emerge 50 Leaders 2009", which acknowledges ABM's achievements as top 10 emerging companies in India. HBJ Capital’s “Business Insight” stock for the month of August 2010

Best Buying Price…:

Best Buying Price… 2 Phase Buying Strategies Suggested [Always buy in SIP ways] 1 st Phase : Buy at the current price range Rs 65-68 [60 % of investment] 2 nd Phase : Add if the price falls down to Rs 50-55 [40 % of investment] >>>Expect at least 10-12 times returns in next 3 years time frame!!! Note:- The above Best buying price is based on the E-mail communication sent to the “Penny Stock Package” subscribers on 19 th Aug’10.

Slide 3:

What Next? HBJ Capital – “Specialists in discovering multibagger stocks” is launching more & more innovative products & services with single focus on long term wealth creation!!! HBJ Cap is growing faster than ever. HBJ Capital can be your 50x in 3years investment. Ask how? Aim to become #1 - Equity Research Company in India by 2012, the same year we have planned to get it listed at BSE/NSE.

Table of Contents:

Table of Contents From the Desk of CEO, HBJ Capital – (Page – 5 ) Overview : ABM Knowledgeware Ltd – (Page – 7) E-Governance – (Page – 10) The $10 Billion Indian E- Governance Market – (Page – 15) EIC Framework – (Page – 26) ABM Knowledgeware Ltd – (Page – 27) Projects of ABM – ( Page – 32) Ingredients of ABM – (Page – 39) Intellectual behind ABM – (Page – 43) Peer Comparison – (Page – 46) Financial Analysis – (Page – 48) Investment Rationale – (Page – 53) Risks Involved – (Page – 56)

From the desk of CEO, HBJ Capital:

Flow of information is must to develop a nation. If E-Governance in India is well organized, no one can stop India to become ‘Super Power‘ by 2020. E-Gov will be in full swing by 2014. Govt. is planning to invest 40K crores in the years to come. Companies operating in this sector will reap benefits out of this opportunity. From the desk of CEO, HBJ Capital Dear Investors, In the past, service delivery mechanisms of the government departments left much to be desired in India. Cramped spaces; shabby ambience; discourteous dealing personnel and their chronic absenteeism; demands of gratification; inefficiency in work; long queues; procrastinating officials; procedural complexities; etc., were some of the undesirable features of the working of the government departments. Consequently, a visit to government department by a citizen to make use of any service used to be a harrowing experience. With the rising awareness amongst the citizens and their better experiences with the private sector – the demand for better services on the part of government departments became more pronounced. E-governance, which is a paradigm shift over the traditional approaches in Public Administration, means rendering of government services and information to the public using electronic means. It has ushered in transparency in the governing process; saving of time due to provision of services through single window; simplification of procedures; better office and record management; reduction in corruption; and improved attitude, behavior and job handling capacity of the dealing personnel.

Contd..:

Contd.. Applying for local government services and accessing official data may soon become easier, with the information technology department looking to roll out an NeGP, e-District etc. All of India's 626 districts will have to automate 6-10 services, such as pensions, ration cards, filing of cases in revenue courts, issuance of caste, marriage, income and employment certificates, etc. E-district is one of the 27 mission mode projects being executed as part of India's push towards e-governance. In all, the total outlay for all projects together is almost INR 40,000 crore, inclusive of both capital expenditure and the operational expenditure. Almost INR 10,000 crore has already been done, and another INR 30,000 crore will be incurred during the remaining project life. MPS is proud to bring you the “Business Insight” pick of the month – ABM Knowledgeware Ltd. ABM Knowledgeware Limited is the fastest emerging company in the E-Governance space. Company has recently bagged order worth 60 crore. It has to replicate its software in 231 locations in Maharashtra. ABM has already started witnessing opportunities in other cities and states. Looking forward it is trying to capture the market of commonwealth countries. This is an opportunity for ABM to make its strong footing in industry and investors should take a long term perspective to get the best return from this stock. Regards , Kumar Harendra, CEO, HBJ Capital, www.hbjcapital.com & www.multibaggerpennystocks.com #912, 1st "F" Main Road, Girinagar 2nd Phase,  BSK 3 rd Stage, Bangalore – 85 Call : 098867 36791, 080 6568 1134 or Mail : Info@hbjcapital.com

Slide 7:

Overview

Slide 8:

ABM Knowledgeware Ltd – Overview

Some key stats..:

Some key stats.. PE = 9.95 On the basis of annualized forward earnings the stock is available at a PE of 5-6 which is a discount compared to the industry standards. Book Value = Rs 26.00 - The current stock price at Rs 84.50 is trading at about 3.45 times its book value price. Shareholdings : No Of shares [% Share Holding ] Total FII: 3.2 lakhs [3.22%] Total Non-Institution: 18.67 lakhs [18.67%] Total Bodies Corporate Holding: 18.11 lakhs [18.11%] Total Promoters: 60 lakhs [60%] Total Outstanding Shares : 100 lakhs [100 %] Debt/Equity = 0 [Mar’10] ROCE = 44.5% [Mar’10] RONW = 29.5% [Mar’10] Current Ratio = 2.31 [Mar’10] Delivered Volume per day = 45.87% BSE Code 531161 CMP = Rs 84.50 (August 27 th 2010) – The stock was suggested on 19 th August’10 when it was trading at Rs 66.95. Since then the stock has appreciated by almost 26%, while it touched a peak of Rs 98.45 52 week’s high/low = Rs 98.45/40.60 – The stock recently made a new 52 week high. As it is in the strong bullish phase it can continue to make new highs. Peak share price = Rs 98.45 (24 th August ‘10) – The stock scaled a new high just a few days back. The stock deserves a re-rating and we may see ABM continue making new highs. Trading volume = Avg. 1.42 lacs shares (approx) per day – Earlier the volume was low however in the last few days the liquidity has improved with investors rushing in. EPS = Rs 8.71 – Company has recorded an EPS of Rs 8.71 on trailing twelve months basis.

Slide 10:

E-Governance

What is E-Governance???:

What is E-Governance??? E‐Governance is slowly becoming a buzzword in the corridors of power. What actually then is E- governance? In simple terms Electronic Governance can be defined as giving citizens the choice to access government information and services wherever & whenever they want. There are three aspects to the E-Governance – IT enabling the government functions - something similar to back-office automation, Web-enabling the government functions so that the citizens will have a direct access, and Improving Government processes so that openness, accountability, accuracy, speed of operations, effectiveness and efficiency may be achieved. Typically , this would mean web-enabled applications, but E-Governance would also cater to automated applications for the government sector, which helps in achieving SMART governance which some define as: S peed M oral A ccountable/ A ccurate R esponsive and T ransparent Governance ICT (Information, Communication & Technology ) model helps to develop strong and healthy relationship between: G2C (Government & Citizens), G2B (Government & Business Enterprises) and G2G (between Governments).

Benefits by E-Governance..:

Benefits by E-Governance.. The government to government (G2G) sector: It is felt that governments at the union, state and local level must enhance and update their own internal systems and procedures before electronic transactions with citizens and business are introduced. There are number of advantages with G2G initiatives: Cost Savings, Increasing the speed of the transactions, Reduction in the number of personnel necessary to complete a task, Improving the consistency of outcomes and Improvement in the management of public resources. The Government to citizen (G2C) sector: Facilitates citizen interaction with government , which is primary goal of e-government. Government to citizen initiatives also strives to enhance access to public information through the use of websites and kiosks. There are number of advantages with G2C initiatives: Single Window replaces various departments, Improves efficiency, More reliable outcomes, Direct contact with concerned persons & No agents\ brokers required. Transactions, such as payment of taxes, renewing licenses and applying for certain benefits, will be less time consuming and easy to carry out. Citizens can carry out variety of tasks, especially those that involve multiple government departments, without initiating contacts with each government department individually.

Contd…:

Contd… Government to Business (G2B) sector: Includes both the procurement of goods and services by the government as well as the sale of surplus government goods to the public online. There are two motivating forces behind G2B: The business community prefers to carry out its activities such as sales, procurement, and hiring through electronic means. There are large numbers of software companies, which are producing number of products focusing on performing routine business activities on line. It benefits to extend the cost savings realized through Business to Business (B2B) transactions to their business with union, state and local level governments. It helps to improve the efficiency of the operations in G2B & B2B. The second reason for the growth of G2B is the demand for cost cutting and efficient procurements in the government. Developing countries, where there is great pressure to minimize costs due to shortage of funds, G2B are being encouraged by the governmental agencies.

Benefits of E-governance..:

Benefits of E-governance.. Externally ‘Single Window’ for various departments. Faster service delivery Greater efficacy Increased flexibility of service delivery Innovation in service delivery Greater participation Greater citizen empowerment Better control & management Internally Greater coordination & communication Avoidance of duplication Reducing transaction costs Simplifying bureaucratic procedures Greater efficiency Enhanced transparency Information sharing between agencies Security of information management ICT-enabled connected governance contributes to:

Slide 15:

T he 10 B illion D ollar I ndian E-G overnance M arket !!!

E-Governance: Structure:

E-Governance: Structure

..:

The Government of India had approved the NeGP in May 2006 with the vision: "Make all Government services accessible to the common man in his locality, throughout common service delivery outlets, ensure efficiency, transparency & reliability of such services at affordable costs to realize the basic needs of the common man". The NeGP currently consists of 27 Mission Mode Projects (MMPs) and 8 Support Components to be implemented at the Central, State and Local Government levels. These include Projects such as Income Tax, Passport/VISA Company Affairs Central Excise Pensions Land Records Road Transport Property Registration Agriculture Municipalities Gram Panchayats (Rural) Police Employment Exchange E-Courts .. National e-Governance Plan

Contd…:

Contd… Government has already spent about INR 10,000 crore ($2.91 billion) on such projects & is expected to pump in another INR 30,000 crore in other various projects under the National e-Governance Plan (NeGP) in the next few years. 14 major E-Governance projects, including some high-profile ones such as MCA-21, have already gone live. The Indian government aims to have all 27 mission mode projects envisaged under the E-Governance blueprint ready by end 2014. State Wide Area Network (SWANs): Government has approved the scheme for establishing State Wide Area Networks (SWANs) in 29 States and 6 UTs across the country at a total cost of Rs 3334 crore. Common Services Centre's (CSCs): The CSC scheme envisages the establishment of 100,000 broadband Internet - enabled kiosks in rural areas, which would deliver government and private services at the doorstep of the citizens. An additional 10,000 CSCs would be set up in the semi-urban/urban areas. The bid process for selection of the Service Centers has been completed for a total of 92560 CSCs in 19 States. 80,000 Common Services Centre's have been set up across India; the number is expected to reach one lakh by the end of the fiscal year.

Contd…:

Contd… State Data Centers (SDCs): State Data Centers are proposed to be established across 29 States & 6 Uts in the country along with Disaster Recovery (DR) in order to provide shared, secured and managed infrastructure for consolidating and securely hosting State level data and applications. The SDC scheme was approved by the Government in January 2008 at a total cost of Rs 1633 crore. DIT has sanctioned SDC proposals of 23 States at a total cost of 1077 crore. Government of India has approved a Capacity Building Scheme for setting up State e-Mission Teams (SeMT) at a total cost of Rs 313 crore in January 2008. Over 600 e-government services are now available electronically.

E-District…:

E-District… E-District has been selected as a National MMP under the NeGP and is to be implemented by the DIT. E-Districts are the de facto front-end of government where most Government-to-Consumer or G2C interaction takes place. The E-District project was conceptualized to improve this experience and enhance the efficiencies of the various Departments at the district-level to enable seamless service delivery to the citizen. Front-ends under the scheme, in the form of citizen facilitation centers, are envisioned to be built at District-, Tehsil-, Sub-division- and Block- levels. Village-level front-ends would be established through Common Services Centre's (CSCs) for delivery of services. More than 55 services will be delivered through this medium to the citizens. Few of them are mentioned below:- Certificates: Creation and distribution of certificates for income, domicile, caste, Birth, Death etc. Licenses: Arms Licenses etc. Public Distribution System (PDS): Issue of Ration Card, etc. Social Welfare Schemes: Disbursement of old-age pensions, family & widow pensions, etc. Complaints: Related to unfair prices, absentee teachers, non-availability of doctor, etc. RTI: Online filing and receipt of information relating to the Right to Information Act. Linking with other e government projects: Registration, Land Records, and Driving Licenses, etc. Information Dissemination: About government schemes, entitlements, etc. Assessment of taxes: Property tax, and other government taxes. Utility Payment: Payments relating to electricity, water bills property taxes etc.

MCA-21:

MCA-21 The MCA 21 project is an outcome of the MCA's quest for simplifying forms, making forms e- centric, promoting online transactions, and reaching out to stakeholders in an economy that is growing fast and adjusting to the demands of globalization. MCA 21 services are available 24X7 anytime and anywhere through MCA Portal. With more than 8 Lakhs registered entities, the MCA has over 60 million pages of corporate information in its database. Procedures relating to sorting, storage and retrieval of paper-based records were cumbersome and time-consuming. The portal registered an average of 17 Lakh hits per day. The e-filings till then totaled 23.77 lakhs. The MCA 21 has obtained the Excellence in Government Process Re-engineering Category Award 2007-08 (gold).

E-Government Initiative @ State Level:

E-Government Initiative @ State Level Project JEEVAN in Delhi. Project SAMPARK in Chandigarh. Project BHOOMI in the state of Karnataka. Project ASHA, SANWAD in the state of Assam. Project E- MITRA service centre's in the state of Rajasthan. Project GYANDOOT, ROGI KALYAN SAMITIS, in the state of Madhya Pradesh. Project KOSHVAHINI, WARANA "WIRED VILLAGE“ in the state of Maharashtra. Project SUSTAINABLE ACCESS IN RURAL INDIA (SARI) in the state of Tamil Nadu. Project JANANI SUVIDHA YOJANA, AKSHAYA, SWIFT, PEARL, ASRAYA in the state of Haryana. Project E-SEVA, BHU BHARATI, E-VILLAGE CHILUVURU, UNPAN virtual library & smart government in the state of Andhra Pradesh. Project JAN SEVA KENDRAS, THE CHIRANJIV YOJANA, NIRMAL GUJARAT, SWANTAH SUKHAY in the state of Gujarat etc.

Challenges for E-Government in India::

Challenges for E-Government in India: The governments both –the Union and the states must make earnest efforts to complete the daunting, but formidable task of quicker and effective E-government programs by: Making a policy choice in favour of computerization to overcome radically. Serious efforts would be required to mobilize resources for this arduous job. One way to deal with the situation could be that governments enter into arrangements for leasing of computers. Establishing complete connectivity between various ministries and departments so that transfer of files and papers could be done through Internet thereby choosing efficacious speed as an alternative to manual labour. Supplying information to the public in a language that they understand and are comfortable with, and generally, it is the local language. As technology is available by which transliteration from English into other languages can be made, therefore , the problem is manageable provided there is enough motivation to do this onerous task. Changing the mindset of the government employees who are used to working only in the manual mode. This is a big task and needs patience and careful planning. Workshops, seminars, and training programmes are required to be organized to spread awareness among the employees at all levels. Build supporting infrastructures of power and all weather surface transport system to bridge the digital divide between the rural and urban India.

Statistics after few E-Governance Projects…:

Statistics after few E-Governance Projects…

Key Ingredients of Govt Transformation..:

Key Ingredients of Govt Transformation.. E-Governance

EIC Framework..:

EIC Framework.. Indian Economy E-Governance ABM In such a bullish Economy, and with a huge investment in e-Governance sector, ABM has very good future prospects. The results of June 2010 are telling the growth story of ABM. ABM has been selected to replicate the KDMC solution at 231 locations in Maharashtra.

Slide 27:

ABM Knowledgeware Ltd

Basic Details..:

Basic Details.. ABM Knowledgeware Ltd., (ABM) is an IT Company listed on Bombay Stock Exchange. By a rough estimate, ABM’s e-Governance Solutions altogether are delivering 4.2 Million G2C and G2B services per year. ABM has developed a thorough insight in implementing and institutionalizing e-Governance in the Indian context, which is evident from the various projects implemented by ABM so far. NASSCOM recognized it as one of “The Top 10 Emerging IT Companies in India” in 2009 which amply demonstrates the capabilities and the growing stature of ABM in the IT space. ABM’s Product MAI Net ™ has been adopted by Govt. of Maharashtra for roll out in all the 231 Urban Local Bodies (ULBs) across the State of Maharashtra. Recognitions such as 13th and 120th fastest growing Technology Company in India and Asia-Pacific respectively by Deloitte in their Fast 50 and Fast 500 programme in 2008.

Basic Details..:

Basic Details.. ABM has grown over 600 percent in terms of revenues and human assets in the last 5 years. Current business focus is on niche domains such as Providing e-Governance solutions to Municipal Bodies (G2B & G2C); CRM solution for Electricity Distribution Companies (G2C) and Automation of Billing, Accounting and Collection for Water Distribution Authorities (G2B,G2C). The company first came to the public’s notice when it was doing a project called “SETU” for Thane Collector ate. ABM has a business partner called Seven Seas Computers in Dubai and this entity has been working closely with ABM to promote its UAE business. Solutions are mostly in use in the Western states of India and now ABM is looking at scaling to other parts of India. Company is also planning to grow inorganically and it is looking at various options in the UK.

Few Milestones..:

Few Milestones.. In 1998, Empanelment in the Turn Key Solution Providers in IT (TSP) panel of Government of Maharashtra with the first ever 15 IT Companies. Successful and path breaking Pilot Projects of e-governance in Housing Department Mantralaya (1999), Municipal Corporation of Greater Mumbai (Citizen Facilitation Center – CFC) in 2000, Thane Collector ate (Setu ® ) in 2000 which were subsequently replicated on mass scale by govt. CSI-YITP Award for ABM’s e-Gov products: ABM CARE ® and ABM MOIS 2000 ® . A largest Municipal Body in Asia replicated ABM CFC ® in all their 24 Municipal Wards as the first Citizen Centric e-Gov initiative in 2002. Govt. of Maharashtra announced Rajiv Gandhi Award for Administrative Reforms for ABM’s  Setu ® at Thane Collect orate CSI Award for Best Citizen Centric Project for Setu ® at Thane Collect orate in 2003. Launched ABM’s prestigious e-Governance Solutions viz. ABM MAI Net ® in Kalyan Dombivli Municipal Corporation (KDMC) as the first Comprehensive e-Governance solution for Urban Local Bodies in India. KDMC’s e-Governance Project bagged "Intelligent Enterprise Award" for MAI Net ™ by India Express Group at Colombo. Entry into Consumer Relationship Management(CRM) Space for Power Sector through a multi-crore order for ABM CFC ® from an Electricity Distribution Company for roll out of ABM CFC ® all over Maharashtra.

Few Milestones.. :

Few Milestones.. KDMC was awarded with "e-Governance Champion Award" for outstanding contribution in the domain of e-Governance by Dataquest, where ABM’s software solution –MAI Net ™ has been implemented. Empanelment with State Governments of Goa, Punjab, Haryana, Uttar Pradesh and National Institute of Smart Governance. Won the prestigious "Wisitex India Urban Development Lead Organization of the Year-Information Technology" award, conferred by Minister Urban Development ,Govt of Goa. Received "Deloitte Technology Fast 500 " award as120th Fastest Growing Technology Company in Asia-Pacific. Received "Deloitte Technology Fast50" award as13th Fastest Growing Technology Company in India. Bagged a single order of Rs. 116 Crores from Municipal Corporation of Greater Mumbai for SAP Optimization, enhancements, change management etc. Winner in " NASSCOM EMERGE 50 LEADERS " in recognition of ABM's outstanding work in domestic markets as TOP 10 emerging IT companies in India Ministry of Urban Development, Govt. of India has awarded National Urban Water Awards (NUWA) on Municipal Corporation of Greater Mumbai (MCGM) for ABM’s Water Billing & Accounting Software viz. : ABM AQUA ® , which is being used across their 24 municipal wards. ABM has been awarded E-Government contracts worth Rs. 60.03 Crores for implementing its e-Governance Software - ABM MAI Net ® in 231 Municipal bodies all over the state of Maharashtra.

Slide 32:

Projects of ABM

Project @ KDMC:

Project @ KDMC Objective of creating a system driven Municipal Corporation with highest levels of Transparency, Accountability and Citizen Servicing Standards, Kalyan Dombivli Municipal Corporation (KDMC), initiated its journey into e-Governance in 1999. KDMC took a decision for total computerization of the Corporation with a holistic approach. The entire e-Governance solution was conceptualized, designed, developed and implemented by ABM Knowledgeware Ltd. This was implemented to re-design the entire 400 process which was carried out by KDMC. Hon. Chief Minister of Maharashtra, Shri Vilasrao Deshmukh , dedicated this e-governance project to the citizens of KDMC on 24th of September 2002 & expressed that this pattern could be replicated in other Municipal Corporations. Today, with total 7 CFCs, located in various ward offices of KDMC, connected by Leased Lines, Fiber Optics or Radio Frequency, KDMC's e-Governance is by far, the most comprehensive & successful computerization project in Maharashtra and perhaps across India, and has set an example of good governance for all Government Organizations in India. Government of Maharashtra has taken decision to roll out this software across all the ULBs in Maharashtra. Ministry of Urban Development, Govt of India has short listed this solution for recommendation to ULBs covered under funding for JNNURM scheme which is meant for up gradation of the urban infrastructure and urban governance . ‘This project gave a rise to ABM and it was one more to add on the kitty of Mr. Rane. ABM got several orders due to this projects. ABM started making mark in e-governance sector and played a vital role to improve the Government.’

Projects..:

Projects.. It was focused on the Decentralization and Computerization of entire Assessment, Billing and Collection of Property Tax for all 24 wards offices at MCGM. MCGM serves over 1.27 crore (12.7 MN) citizens with the help of approximately 1,17,000 staff deployed over 68 departments spread across 437 square kilometers span. Property Tax Assessment and Collection Department (A & C) is one of its largest departments that contribute more than 25% of revenue to Municipal Corporation of Mumbai. The key functionalities of this department are Assessment of Properties, Billing and Collection. Approximately 2500 staff contributes towards fulfilling the activities of this department from 24 ward offices across Mumbai. The MCGM (Municipal Corporation of Greater Mumbai) project has gone live in April 2007. This would cover core functions like Finance, Materials Management, Project Systems, Human Resource, Funds Management, Plant Maintenance and Real Estate. Apart from this, it would also cover a specific Public Sector function i.e. Citizen Portal and Ward Management. Initially the value of this contract was US$ 10Mn, which includes engagement with MCGM for 5 years, after implementation during the term of the project. ABM bagged this because of its Quality Service and creditability in MCGM. ABM provided Subject Matter Expertise, software licenses and entire post-implementation support to MCGM. Property Tax Information System SAP @ MCGM

Projects..:

Projects.. Citizen Facilitation Centre (CFC) is named Setu (means Bridge) signifying a bridge of facilitation between citizens and the government. Objective: Time Bound Service Delivery to citizens by establishing a computerized CFC for rendering various Citizen Services in a phased manner but with more convenience, speed and measurable performance without compromising the credibility of the process. “Setu®” was designed, developed and implemented by ABM in year 2000. This project was rolled out by the state Govt in the entire state after its initial success in Thane District. This project went on to win several awards at state and national level. ABM presented a comprehensive proposal, which also involved high degree of BPRs and new methods of inter-departmental collaborations for over 20 departments and agencies. It was decided to first implement first phase of the project with the help of Thane Belapur Industries Association (TBIA). This center was named as “ Udyog Setu”. ABM commissioned the center within 3 months of receiving the work order in August 2004. It provided more than 5000 services in initial 2 years period. The initial scope was limited to direct services provided by DCI and MIDC. Later 3 services of Maharashtra State Pollution Control Board (MPCB), were also added to the kitty. SETU @ THANE UDYOG SETU

Projects..:

Projects.. MCGM serves over 1.27 crore citizens. MCGM provides are almost 100+ services and it gives immense scope for ABM in near future. ABM implemented the entire solution for water billing and accounting at MCGM. Database is centralized, so consumers can make payment of AQUA bills in any of 24 wards of MCGM spread across the entire city . In near future, this solution can be in demand as others are and can be asked to replicate it over other Municipal Corporation. ABM has successfully implemented Birth & Death, Property Tax Assessment and Billing software and Water Billing modules at MBMC. For Market License, Accounts, Complaint And Redressal Monitoring (CARE) are also in demand by MCGM Around 1.5 Lakhs properties are assesses by MBMC under this e-Governance implementation. MBMC is evaluating possibility of increasing the scope of existing e-Governance solution by opting for comprehensive solution for e-Governance as implemented by KDMC (MAI Net ™ –Municipal Administration Information Network) AQUA MBMC

Projects..:

Projects.. Based on the evaluation of bids and recommendations from Delloitte, MSEDCL selected ABM Knowledgeware Ltd. in 2005, for providing the application software and for providing manpower for to operate the CFCs. ABM delivered the application software, ABM CFC ® as per the envisaged scope of CFC functioning. ABM operated the 50 pilot CFCs till March 2010. Thus, the 50 pilot CFCs were operational for varying periods, ranging from thirty six months to fifty one months. ABM is aiming at all the 500 divisions to implement its software. Major area of revenue generation for any ULB is from the property tax collected. To tap on this department UMC wanted to implement a solution for property assessment and billing. UMC has approved the project of implementation of more comprehensive scope of e-Governance as a next step and the project is under implementation under the JNNRUM scheme of Govt. of India. UMC has chosen MAI Net ™ for this project. Total properties being assessed by UMC is approximately 1.6 Lakhs UMC MSEDCL

Projects.. MAINet™ Replication :

Projects.. MAI Net ™ Replication

Slide 39:

Ingredients of ABM

Business Verticals..:

Business Verticals.. ERP practice in Govt segment has 3 distinct segments, viz. Supply of License, Implementation and Post Implementation support for extended periods for Institutionalization of ERP. In Urban Local Bodies segment, ABM is offering its ABM MAI Net & Implementation of SAP with and without integration with ABM solutions. ABM offers solutions like ABM CFC ® , ABM AQUA ® , ERP Solutions from MNCs like SAP bundled with ABM’s Subject Matter Expertise IT Services for implementation & post-implementation . These verticals are having ample of scope to penetrate and the government is on the bull to improve its services, which gives an opportunity for ABM to explore revenue and value.

Products..:

Products.. PRODUCTS MAI Net ™ Enterprise is an integrated suite of application products to manage the complete working of a typical municipal corporation of any size. This is the key product for revenue generation in coming years. ABM CARE ® is browser-based, which can be installed at a citizen/consumer interface like CFC (Citizen Facilitation Center) or on a Website for accepting complaints from citizens. For development of an economy, a citizen has to be satisfied by its government and its services . ABM MOIS 2000 ® is powerful tool which facilitates the Herculean task done by any government or semi-government organization of having to manage and work on a large number of letters and cases/files every day involving complex work-flows. CRM Solutions is similar to CFC model.

Trademarks..:

Trademarks.. Trademarks helps to protect the business and the product. It protects from piracy and duplication. Give recognition to the product and space in the market.

Slide 43:

Intellectual behind ABM

Management..:

Management.. “ KeyMan ” of the company, Mr. Prakash Rane is on the driving seat and he is planning exceptionally well for the company. He was conferred National Entrepreneurship award in 2008 by Marathi Chamber of Commerce. The Company has benefited from vast experience of over a decade in IT of Mrs. Supriya Rane . Mr. Govind is responsible for Large account acquisition, increasing account penetration and account growth and Expansion of the business in newer Geography. Project Director Mrs. Vimla is having international exposure & 28 years of experience in Business Development. Mr. M. N. Ahmed is the Chairman of Audit Committee and Shareholders Grievance & Share Transfer Committee of the Company. Since Inception the management is unchanged. This gives them better understanding of the business & future prospects of the company.

Share Holding Pattern..:

Share Holding Pattern.. Promoter holding is more than 60% in the company. More than 1% of total shares of the company are held by following entities: The Indiaman Fund (Mauritius) Ltd 3.20% Balini Properties Pvt Ltd 1.20% Lipsita Properties Pvt Ltd 6.91% Computer Digital Network Ltd 2.50% New Computer Era Ltd 5% Rosewell Group Services Ltd 2.50% Most of the above entities have been holding stocks of ABM for more than 5years which reflects their confidence in the better future and better growth prospects. The total holding (Promoter & these entities) comes nearly to 82% indicating the confidence of promoters and investors of the company. The Indiaman fund (Mauritius) Ltd recently purchased 3.2% of the total shares.

Slide 46:

Peer Comparison

Peers Comparison :

Peers Comparison There are many companies in the listed space which proclaim themselves as the companies into E-Governance sector, however most of them hardly derive any revenue from E-Governance. Vakrangee software (VS) is one of the companies which is specifically in the space of E-Governance. Comparison of both the companies will give a conclusion about the right pick . ABM is in the state of Maharashtra and recently Vakrangee Software also entered the zone but could not bag any major projects from Maharashtra. ABM commands a lower P/E, higher margins and nil debt in comparison to Vakrangee Software’s higher PE, lower margins and some Rs 60 crore debt. ABM V S CMP 84.50 195.60 MCAP 85 crore 440 crore P/E 9.70 14.50 EV/ EBITDA 4.41 4.95 NPM% 18.18% 5.74% EPS 8.71 13.48

Slide 48:

Financial Analysis

Income Statement – Last 4 years:

Income Statement – Last 4 years ABM has been a consistent performer for the last 4 years with a 24% CAGR in revenue and more than 70% CAGR in Net profit In FY 2009-10, revenue has decreased but the net profit has increased because of the cut down in expenses. Phenomenal growth in NPM over last four years (6.41% to 18.18%). Company has various orders in the Pipeline and it is expected that it will increase its revenue by 40-50 % for FY 11 over FY 10.

Income Statement – Quarterly :

Income Statement – Quarterly The imminent growth of ABM can be gauged from the fact that it has increased its revenue by 60% from Mar-10 to Jun-10. During Mar’10 quarter, the company has posted an EPS of 1.93, whereas in Jun-10 it is 2.94. almost 50% increase in EPS on QOQ basis. The Net profit margins of the company have been steady at 17-18%. Since Jun-09 company is increasing its revenue QOQ and the Sep-10 quarter is also expected to follow the increasing trend.

Balance Sheet..:

Balance Sheet.. The company has a very clean balance sheet with zero debt on it’s books. Cash balance is more than 20 crore and the company has made an investment of 1.2 crore in Mutual fund of Reliance and purchased shares of Canara bank. The investment is very much liquid. With more than Rs 20 crores in cash and liquid investments, the company has a very comfortable working capital situation. The company enjoys regular payments from the Government, as can be observed from the Sundry Debtors figure going down from Rs 18.67 crore to Rs 15.07 crore. With so much cash, the company can look at acquiring small players in various states and get a head start in various locations.

Contd..:

Contd.. The company has been able to grow it's revenue from Rs 5.55 crore at the end of Mar'06 to Rs 38 crore at the end of Mar'10. The company has seen an exponential growth in it's bottom-line from Rs 0.24 crore at the end of Mar'06 to Rs 6.87 crore at the end of Mar'10. In the first quarter ending Jun'10, ABM has come out with a stellar performance. The revenue for the quarter ending Jun'10 stands at Rs 17 crore, a 57% increase on QOQ basis and 107% increase on YOY basis. The net profit for the quarter ending Jun'10 stands at Rs 2.94 crore which is a 52% increase on QOQ basis and 167% increase on YOY basis. The company maintains a cash reserve of Rs 21 crore which brings down the enterprise value of the company down to Rs 45-46 crore approximately. The EV/EBITDA multiple of the company is around 4.5 which is one of the lowest across the industry.

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Investment Rationale

Near Lifetime high…:

Near Lifetime high… The stock is in the uptrend phase & is looking strong on charts as it is making new (top) highs. As illustrated in the chart , the stock price of ABM Knowledgeware Ltd was dull & underperformed for a long period of time. The recent highs scaled by the company have been backed by larger volumes, thus validating the recent upward move. We expect the rally to continue on account of undervaluation and the upcoming Projects & Future Earnings. Strong support @ 60 Large volume

Investment Rationale..:

Investment Rationale.. The company is one of the few companies in the E-Governance space and has already established a name for itself. The Government of India has planned an outlay of Rs 40,000 crore for the E-Governance sector. ABM being a renowned player will be a big beneficiary of the same. ABM's product for computerization of mid-sized urban local bodies has been adopted by Ministry of Urban Development, Government of India for recommendation to other ULBs in India. The same shall help ABM to procure orders from other state governments besides Maharashtra. The recent recognition of the company by NASSCOM shall help it bag further orders in consortium with the larger players. ABM is available at a PE multiple of 5.5 based on it's annualized forward earnings, while the other listed company like Vakrangee Software's Ltd is available at a PE multiple of 15. The management has been maintaining their stake in excess of 60%, while we believe that they hold another 10% through indirect holding. THE INTELLIGENT WAY TO INVEST IN YOUR FUTURE

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Some Key Issues..

Some Key Issues..:

Some Key Issues.. Issues:- The following are the key issues involved with the E-Governance & thus with ABM Funding – Funding for the projects that are already underway is secured. But for large scale roll out of e-Gov, funding can become a foremost issue. The e-governance initiatives can be funded either through the government sector or through the private sector. Private sector funding is possible for certain project that have the feasibility of creating a service that is chargeable to citizen. Privacy – The privacy of the citizen also needs to be ensured while addressing the issues. Whenever a citizen gets into any transaction with a government agency, he shells out lot of Personal Information, which has possibility of misuse by any vested interest. Thus, the citizen should be ensured that the information flow would pass through reliable channels. Delay in Decisions – ABM is largely dependent on government projects and government decisions can be delayed due to election or change in government. Standardization – Defining the standards for the various Government services is another issue that needs to be addressed. The standards need to be worked out not only for the technologies involved but also for issues like naming of websites to creating E-Mail addresses.

Disclaimer..:

Disclaimer.. I don’t want 2 read this!! This document is not for public distribution and has been furnished to you solely for your information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. This material is for the personal information of the authorized recipient only. The recommendation made herein does not constitute an offer to sell or solicitation to buy any of the securities mentioned. No representation can be made that recommendation contained herein will be profitable or that they will not result in loss. Information obtained is deemed to be reliable but do not guarantee its accuracy and completeness. Readers using the information contained herein are solely responsible for their action. HBJ Capital, or its representative will not be liable for the recipient’s investment decision based on this report. HBJ Capital, officers, directors, employees or its affiliates may or may not hold positions in the companies /stocks mentioned herein.

Slide 59:

From, HBJ CAPITAL

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