Dear Fellow Shareholder
The global information technology IT) market surpassed $3.7 trillion in 2015 and is ontrack to reach $3.8 trillion in 2016 (constant currency). IT Industry executives are mostbullish on cloud applications cloud infrastructure security mobility and dataanalytics. Strong customer demand for expertise in integrating optimizing and managingtheir ever-expanding technology portfolios should help propel IT services to higher thanaverage growth.
India is the topmost offshoring destination for IT companies across the world. Havingproven its capabilities in delivering both on-shore and off-shore services to globalclients emerging technologies now offer an entire new gamut of opportunities for top ITfirms in India. Social mobility analytics and cloud (SMAC) are collectively expected tooffer a US$ 1 trillion opportunity. Cloud represents the largest opportunity under SMACincreasing at a CAGR of approximately 30 per cent to around US$ 650-700 billion by 2020.The social media is the second most lucrative segment for IT firms offering a US$ 250billion market opportunity by 2020. The Indian industry continues to develop capabilitiesaround traditional and emerging markets verticals and customer segments expand globaldelivery presence and increase focus on high value services including productdevelopment.
Engineering services landscape is undergoing rapid shifts from the perspective of rangeand nature of services. The global outsourced Engineering services market currently standsat $26 Billion with players from US Europe and India having an almost equal share. Indianservice providers lead the pack amongst the global service providers. As of 2014 theIndian service providers deliver $6.9 Billion worth of services which is 27% of theaddressed outsourced services market. The study estimates that by 2020 the Indianoutsourced ER&D services market will reach $15 Billion growing at a CAGR of 13%. Thisgrowth will be primarily driven by addressing the increasing demand for embedded systemsand software needs across all verticals.
On the standalone front your company registered a total revenue of Rs. 10147.95 lakhsfor the year ended 31 March 2016. Domestic sales was Rs. 3446.71 lakhs while Export saleswas Rs. 6701.24 lakhs. EBIDTA st was at Rs. 688.18 lakhs and Net profit after tax was Rs.1352.11 lakhs.
The Consolidated total revenue for the year ended 31 March 2016 was Rs. 17815.27 lakhs.EBIDTA was at st Rs. 428.22 lakhs and Net Profit after tax at Rs. 605.70 lakhs.
During the year 2015-16 the company declared an Interim dividend of Rs. 1.80/- on 15 thOctober 2015 followed by a Special 2 nd Interim dividend of Rs. 6/- on 15 th March 2016and Rs.79.39 lakhs was paid towards dividend tax and surcharge thereon.
With the maturity of Globalization of Engineering and Digital &Mobile Technology over the last few years there is an intense race to rapidlycreate new products across the world causing a New Product Revolution. Thethrust areas are in the Semiconductor Equipment Medical Devices Hi Tech ConsumerElectronics Automotive& Aerospace and telecom industries.
This New Product Revolution has opened opportunities for companies likeASM in the space of Engineering Services.
Cashing in on this opportunity ASM through the initiative of ARISE (ASM Research andInnovation Step for Excellence) has seen remarkable success in the Co-Creation of IPled Product Innovation and Platform Services for its clients. As a System DesignHouse ASM is fully equipped to handle complex Electronics Mechanical and Embeddedsoftware design and development to complete the product under one roof. Further workingprototype and manufacturing results in the entire product realization for the client.
The future looks exciting and upbeat in the R&D Products and Engineering ServicesOutsourcing (ESO)space. There are lot of drivers for the clients like Reducing ProductDevelopment Life Cycles Global Competition and getting a first mover advantage byring-fencing the IP. The clients are equally excited to collaborate with the EngineeringService providers like ASM to leverage their capability for global regional andadjacent markets thereby optimize the R&D Operations.
ASM has achieved significant growth in the past few years and in order to succeed in afast paced techno world software firms need to grow and evolve rapidly. I am pleased toshare that in the last quarter of 2016 our Enterprise Business unit was acquired by ALTENCalsoft Labs a group company of Alten France. This acquisition will help the Companyfocus on Engineering and R&D Services for existing and new customers.
The company continued to sustain its profitability despite a volatile and challengingexternal environment during the year under review with the unstinted support of itsdedicated committed and competent employees. We attribute our success to an experiencedmanagement team and to a customer- oriented organization that is dedicated to excellence.Steered by the talent of our people and vesting faith in the resilience of our businessmodel we look forward to overcoming challenges that lie ahead of us.
On behalf of the management of the company and on my behalf I take this opportunity tothank
- Our esteemed customers shareholders vendors business partners advisors andconsultants for their support
- Valuable employees of the company for their valuable contribution efforts and spiritof dedication
- State Bank of India Overseas Branch Bangalore Axis Bank Bangalore and IndianBank Singapore for their support and guidance.
- Central and State Government Customs Reserve Bank of India Software TechnologyParks (STPI) and NASSCOM.
|Place : Bangalore ||Rabindra Srikantan |
|Date : 11.05.2016 ||Managing Director |