Dear Fellow Shareholder
India is the topmost offshoring destination for information technology (IT) companiesacross the world. Having proven its capabilities in delivering both on-shore and off-shoreservices to global clients in emerging technologies it now offers an entire new gamut ofopportunities for top IT firms in India. Notwithstanding global headwinds anduncertainties NASSCOM has projected a growth rate of 7-9 per cent for the IT industry in2018-19 in the country as against 7.8 per cent in 2017-18.
The Future is "Digital at Scale". Global Upswing in economic activity andincreasing Digital spend defining the next phase of Industry growth. While 2017 was a yearof boardroom discussions about a lot of the disruptive technologies 2018 is predicted tobe the year of action where most of the disruptive technologies will see the limelight. Asper NASSCOM exports would be at $137 billion dollars in 2018-19 as against $126 billiondollars in 2017-18. The industry is expecting to add 100000 jobs in 2018-19. NASSCOMnoted the rise of digital solutions and said that digital now forms nearly 20% of thetotal exports. Segments like blockchain and AI are seeing traction and expects digitalservices to grow 1.5-2 times the rest of businesses.
The Indian Engineering sector has witnessed a remarkable growth over the last few yearsdriven by increased investments in infrastructure and industrial production. According toNASSCOM the global (ER&D) spend was USD 1.80 trillion in 2017 a growth of 3.2%. India(ER&D) earned a revenue of USD 26.90 billion in the financial year 2018 a growth of12% reaching a market of USD 70 billion by 2025. The global trend includes companiesmoving from analog to digital offerings many non-tech companies re-branding themselves astech firms and Technologies like big data analytics (data monetisation) AI/ML(intelligent products/services) IoT (connected products) being key areas of investmentwith Domestic market likely to get a boost from Smart cities IoT Defense Electricmobility and Semiconductors. Further in the global ER&D Automotive the focus arearemains Electric Vehicles autonomous/connected cars battery technology and mobilitywhile the R&D spend in Semiconductor includes - IoT VR connectivity and transistors(10 nm/7 nm).
Globally Industry is moving rapidly in the areas of Digital Transformation (Dx)comprising of Industry 4.0 (Smart Manufacturing) Internet of Things (IoT) Big Dataleading to Artificial Intelligence (AI) Machine Learning (ML) Deep Learning (DL)Virtual Reality (VR) Augmented Reality (AR) Mixed Reality (MR) Mobile ApplicationsCloud Virtualization and related Network Security / Encryption platform.
Providing such a solution does not come without challenges. To address theseopportunities keeping in mind the challenges ASM is well poised to bring in solutions tothe industry at large. ASM is proud to be the Co-Creation Partner in these initiatives atvarious locations across continents.
The thrust areas for ASM will continue to be in the Semiconductor Equipment Hi -TechAutomotive verticals.
This "New Product Revolution" has opened opportunities for companies likeASM in the space of Engineering Services. The IoT (Internet of Things) offers qualityspace for new product development and ASM is working on creating its own products as wellas Co-Creating for customer's products. The next couple of years will be exciting in thisspace.
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 tocollaborate with the EngineeringService providers like ASM to leverage their capability for global regional andadjacent markets thereby optimize the R&D Operations.
Overall on the basis of the standalone front your company registered a total revenueof Rs. 761.91Mn for the year ended 31st March 2018.Domestic sales was Rs.64.70Mn whileExport sales was Rs.697.21Mn. EBIDTA was at Rs.85.72Mn and Net profit after tax wasRs.37.03Mn.
The Consolidated total revenue for the year ended 31st March 2018 was Rs.826.26Mn.EBIDTA was at Rs.85.72Mn and Net Loss after tax at Rs.4.29Mn.
During the year 2017-18 the company declared an Interim dividend of Rs.2.50/- perequity share of Rs. 10/- each on 4th November 2017. In keeping with the dividend policythe Directors have recommended for approval of the members; a final dividend of 2.50/- perequity share of Rs 10/- each for the financial year 2017-2018. The final dividend ifapproved by the members and paid out will be Rs. 12.50Mn interim dividend paidRs.12.50Mn amounting to a total Rs. 25 Mn for the financial year 2017-18. Rs.5.16Mn willbe paid by the company towards total dividend tax and surcharge thereon. The dividendpayout for the year under review has been formulated in accordance with the Company'spolicy to pay sustainable dividend linked to long term growth objectives of the company tobe met by internal cash accruals and the shareholders' aspirations.
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.
- Employees of the company for their valuable contribution efforts and spirit ofdedication.
- State Bank of India Overseas Branch Bangalore Karnataka India and Indian BankSingapore for their support and guidance
- Central and State Government Customs Reserve Bank of India Software TechnologyParks of India (STPI) and NASSCOM.
|Place : Bangalore ||Rabindra Srikantan |
|Date : : 29th May 2018 ||Managing Director |