To the Boards' Members
We are pleased to present the 30th Annual Report together with theAudited Accounts of your Company for the year ended 31st March 2022
1. Financial Results
(Rs. In Mn.)
| ||2021-2022 ||2020-2021 |
|Income from Software services and Products ||1410.71 ||1132.17 |
|Other operating income ||61.42 ||34.56 |
|Expenses || || |
|Employee benefits expense ||936.78 ||730.27 |
|Finance Costs ||31.35 ||18.93 |
|Depreciation ||18.08 ||10.07 |
|Other expenses ||300.61 ||227.86 |
|Profit/(Loss) before tax ||185.31 ||179.60 |
|Current Tax ||54.93 ||44.45 |
|Deferred Tax Income/expense ||(8.42) ||0.98 |
|Excess provision of earlier years ||7.03 ||7.64 |
|Profit/(Loss)for the year ||131.77 ||126.53 |
|Other Comprehensive Income || || |
|A (i) Items that will not be reclassified to profit or loss Remeasurement of defined benefit plans ||2.34 ||(1.45) |
|(ii) Income tax relating to items that will not be reclassified to profit or loss Deferred tax on remeasurement of defined benefit plans ||(0.59) ||0.37 |
|B (i) Items that will be reclassified to profit or loss Changes in fair value of investments in equity instruments ||26.39 ||(1.19) |
|(ii) Income tax relating to items that will be reclassified to profit or loss Deferred tax on changes in fair value of investments in equity instruments ||(6.64) ||0.30 |
|Total comprehensive income for the year ||153.27 ||124.56 |
2. Results of Operation
ASM along with its subsidiaries provide world class consulting andproduct development services in the areas of Engineering Services Product R&DServices and Digital Transformation with successful Offshore Development with SupportCenters in India and Overseas for its global clientele.
During the financial year the Company explored new growthopportunities and performed significantly well in both the domestic as well asinternational markets. The performance reflects ASM's journey to reposition itself as aunique technology solutions provider that is committed to develop an emerging breed ofplatforms thus enabling its customers to gain competitive advantage through theCompany's future ready digital transformation initiatives.
On the standalone front your company registered a total revenue ofRs.1410.71 Mn for the year ended 31st March 2022.
Domestic sales was Rs. 606.84 Mn while Export sales was Rs. 803.87Mn.EBIDTA was at Rs.234.74 Mn and Net profit after tax was Rs.131.77 Mn.
The Consolidated total revenue for the year ended 31st March 2022 wasRs.1916.73 Mn. EBIDTA was at Rs. 279.18 Mn and Net Profit after tax at Rs. 139.01 Mn.
3. Dividend/ Transfer to reserves
During the year 2021-22 the company declared an Interim dividend of Rs.1.00/- on 7th August 2021 and 2nd Interim dividend of Rs. 2.50/- on 30thOctober 2021 followed by 3rd Interim dividend of Rs.2.50/- on 1st February2022. In keeping with the Dividend policy your Directors are pleased to recommend forapproval of the members a final dividend of Rs.2.50/- per equity share of Rs 10/-each forthe financial year 20212022. The dividend amount paid/payable if approved by shareholderswill be Rs. 25.75 Mn.
The dividend payout for the year under review has been formulated inaccordance with the Company's policy to pay sustainable dividend linked to long termgrowth objectives of the company to be met by internal cash accruals and theshareholders' aspirations.
Your Company has not transferred any amount to reserve for theFinancial Year ended 31st March 2022.
The paid up Share Capital of your Company is Rs. 100 Mn divided into10000000 equity shares of Rs 10/- each. Your company had offered Right Entitlements 1Rights Equity Shares for every 10 fully paid up Equity Shares held during the financialyear under review.
4. Subsidiary Companies
The consolidated Accounts of your Company and its subsidiaries viz.ASM Digital Technologies Pte Ltd (Formely known as Advanced Synergic Pte Ltd) SingaporeASM Digital Technologies Inc (Formely known as Pinnacle Talent Inc) USA ASM TechnologiesKK Japan RV Forms & Gears LLPASM Digital Engineering Pvt Ltd. and ASM HHVEngineering Pvt Ltd( wef 21.01.2022) duly audited are presented as part of this Report inaccordance with Indian Accounting Standards ( IndAs) and the Listing Regulations with theStock Exchange wherever applicable. The statement pursuant to the provisions to Section129(3) of the Companies Act 2013 containing salient features of the financial statementof the Company's Subsidiaries in Form AOC1 is given in Annexure - II. The Accountsof the Subsidiaries audited for the purpose of consolidation shall be placed on yourCompany's website and made available for inspection by any Shareholder at theCompany's Registered Office and at the respective registered offices of theSubsidiary companies. Copies can be made available on request to the shareholders of theCompany.
Your Company has formulated and adopted a "Policy for determiningMaterial Subsidiaries" so that your company could identify such subsidiaries andformulate governance framework for them. The Policy for determining material'subsidiaries is posted on Company's website: https://www.asmltd.com/policy-disclosures
5. Future Outlook
This has been provided in letter to the shareholders
6. Management Discussion and Analysis Report
Management Discussion and Analysis Report as required under Regulation34 of SEBI (Listing Obligations and Disclosure Requirements ) Regulations 2015 isdisclosed separately in the Annual Report.
7. Board Meetings
During the year under review the Board of Directors held 7 meetings on26.05.2021 08.07.2021 07.08.2021 30.10.2021 14.01.2022 01.02.2022 and 15.02.2022 Themaximum interval between two meetings did not exceed 120 days.
8. Directors and Key Managerial Personnel
As per the provision of companies Act 2013 Ms. Preeti Rabindra (DIN00216818) Director retires by rotation and being eligible offers herself forre-appointment at the ensuing Annual General Meeting (AGM).
The Board recommends his appointment for consideration of members ofthe Company. Brief profile of Ms. Preeti Rabindra is given in the notes to the Notice ofthe ensuing AGM.
9. Disclosure on compliance with Secretarial Standards
Directors confirm that the Secretarial Standards issued by theInstitute of Company Secretaries of India have been complied with.
10. Independent Directors
Your Company has laid down procedures to be followed for familiarizingthe Independent Directors with your Company their roles rights responsibilities in yourCompany and to impart the required information and training to enable them contributesignificantly to your Company. All the Independent Directors of the Company have givendeclarations that they meet the criteria of independence as laid down under section 149(6)of the Act and Regulation 16(1)(b) of Listing Regulations. The Independent Directors havealso confirmed that they have complied with the Company's Code of Conduct. All theIndependent Directors of the Company have given declarations that they meet the criteriaof independence as laid down under section 149(6) of the Act and Regulation 16(1)(b) ofListing Regulations.
11. Director's Responsibility Statement
Pursuant to the provisions of Section 134 (5)of the Companies Act 2013the Directors hereby confirm that:
a) in the preparation of the annual financial statements for the yearended 31st March 2022 the applicable accounting standards has been followed along withproper explanation relating to material departures:
b) the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit or loss of the company for that period;
c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
d) the Directors have prepared annual accounts of the company on agoing concern basis.
e) the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.
f) The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
12. Significant and material orders passed by the regulators or courtsand Material Changes and commitments affecting the financial position of the company.
There are no significant material orders passed by theRegulators/Courts which would impact the going concern status of the company and itsfuture operations. There are no material changes and commitments if any affecting thefinancial position of the company which occurred between the end the financial year of thecompany to which the financial statements relate and the date of this report.
13. Audit Committee
The Audit committee met four times during the financial year underreview and all its recommendations were accepted by the Board.
Your Company has established the Vigil Mechanism an Ombuds processwhich is a channel for receiving and redressing of employees complaints. This mechanismcovers questionable financial or accounting matters and reporting fraudulent financialinformation to the shareholders the government or any other legal authority. This meetsthe requirement under Section 177(9) and(10) of the Companies Act 2013 and Regulation 22of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
14. Nomination and Remuneration Committee and Stakeholders Relationshipand Share Transfer Committee
The Nomination and Remuneration Committee has framed a policy forselection and appointment of Directors including determining qualifications of IndependentDirector Key Managerial Personnel Senior Management Personnel and their remuneration aspart of its charter and other matters provided under Section 178(3) of the Companies Act2013. A copy of the policy forms part of this report vide Annexure- I. TheNomination and Remuneration Committee of a company has been obligated under Section 178 ofthe Act to formulate a policy for recommending to the Board of directors of the companyfor setting the criteria based on which the performance of every Director including theperformance of the Board as a whole shall be assessed by the Board of Directors of theCompany.
15. Familiarisation Programme
The Company has put in place an induction and familiarisation programmefor all its Directors including the Independent Directors. The familiarisation programmefor Independent Directors in terms of provisions of Regulation 46(2)(i) of ListingRegulations is uploaded on the website of the Company.-https://www.asmltd.com/policy-disclosures
16. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed BMP & Co. LLP Company Secretaries to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit in Form MR3 for thefinancial year ended March 31 2022 is annexed as Annexure - III to the Report.There are no qualifications reservations or adverse marks made by Secretarial Auditor inthe Report.
17. Auditor's Report
There are no qualifications reservations or adverse remarks made byM/s B K Ramadhyani & Co LLP Chartered Accountants Statutory Auditors in theirreport for the financial Year ended 31st March 2022. The Statutory Auditors have notreported any incident of fraud under Section 143(12) of the Act and the rules madethereunder to the Audit Committee of the company in the year under review.
18. Conservation of energy technology absorption and Foreign ExchangeOutgo
The company's operations involve low energy consumption. Howeverthe efforts to conserve and optimize the use of energy through improved operational methodand other means will continue.
The company has not imported any technology. Foreign exchange earningsand outgo
During the financial year under review 56.98% of the revenue came fromexport of software services resulting in a foreign exchange inflow of Rs. 803.87 Mn andthe foreign exchange outgo on account of overseas salaries traveling etc was Rs. 122.31Mn.
19. Public Deposits
Your Company has not accepted any deposits from the public during thefinancial year under review.
20. Disclosures as required under Section 22 of Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013
Your Company has in place a Prevention of Sexual Harassment ( POSH)Policy in line with the requirements of Sexual harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. Your Company has through the Policyconstituted a committee and has established a grievance procedure for protection againstvictimization. Your Company is committed to provide a healthy environment to all employeesconducive to work without the fear of prejudice and gender bias. During the year underreview there were no cases filed pursuant to the said Act.
|Number of complaint filed during the financial year 2021-22 ||Nil |
|Number of complaint disposed off during the financial year 2021-22 ||Nil |
|Number of complaint pending as end of the financial year ||Nil |
21. Details of Adequacy of Internal Financial Controls
Your Company has deployed adequate Internal Control Systems in place toensure a smooth functioning of its business. The processes and systems are reviewedconstantly and improved upon to meet the changing business environment. The ControlSystems provide a reasonable assurance of recording the transactions of its operations inall material aspects and of providing protection against misuse or loss of Company'sassets. The Internal auditors periodically review the internal control systems policiesand procedures for their adequacy effectiveness and continuous operation for addressingrisk management and mitigation strategies.
22. Particulars of Loans guarantees or investments
During the Financial Year under review your Company had givenCorporate Guarantee to its subsidiary RV Forms & Gears LLP and ASM DigitalEngineering Pvt Limited and loan to RV forms and Gears LLP at prevailing bank lending ratefor meeting its working capital requirements. The balance outstanding as on 31st March2022 is Rs 254.13 Mn.
23. Risk Management Policy
The Risk management Policy of your company continuously evaluates thevarious risks surrounding business and seeks to review and upgrade its risk managementprocess. To further the endeavour your Board constantly formulates strategies directed atmitigating these risks which get implemented at the Executive Management level and aregular update is provided to the Board.
24. Credit rating of securities:
(a) credit rating obtained in respect of various securities: NA
(b) name of the credit rating agency; NA
(c) date on which the credit rating was obtained: NA
(d) revision in the credit rating: NA
(e) reasons provided by the rating agency for a downward revision ifany: NA
25. Corporate Social Responsibility Policy (CSR)
Your company has formulated CSR policy which is posted on the websiteat https://www.asmltd.com/policy- disclosures. In pursuance to the provisions of Section135 and Schedule VII of the Companies Act 2013 the company constituted a CSR Committee ofthe Board to (a) formulate and recommend a CSR policy (b) recommend the amount ofexpenditure to be incurred on the CSR activities and (c) monitor implementation of the CSRpolicy from time to time. The terms of reference of the CSR committee are in accordancewith Section 135 of the Companies Act 2013. The Annual Report on CSR in the prescribedformat is enclosed to this Report as Annexure-IV.
26. Related Party Transactions
The company has in place formulated a Policy on materiality of RelatedParty transactions for dealing with such transactions in line with the requirements of theListing Regulations with the Stock Exchange. . The policy on related party transactions isavailable on the Company's website at -https://www.asmltd.com/ policy-disclosures.
Particulars of contracts or Arrangements with related parties referredto in Section 188(1) of the Companies Act 2013 in the format specified as Form AOC2 formspart of this Report as Annexure- V
27. Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and the ListingRegulations the Board is required to monitor and review the Board evaluation framework.In line with the Corporate Governance Guidelines
Annual Performance Evaluation is conducted for all Board Members aswell as the working of the Board and its Committees. The Board works with the Nominationand Remuneration committee to lay down the evaluation criteria for the performance ofexecutive/nonexecutive/independent directors through a peer evaluation excluding thedirector being evaluated through a Board effectiveness survey. The questionnaire of thesurvey forms an integral part of reviewing the functioning and effectiveness of the Boardand for identifying possible paths for improvement. Each Board member is required toevaluate the effectiveness of the Board and its committees on various parameters and feedback on each Director is part of the survey. The outcome of the Board evaluation for thefinancial year 2021-22 was discussed by the Board at their meeting held on 15thFebruary 2022.
28. Remuneration to Director and Employees
Details/Disclosures of ratio of remuneration to each Director to medianemployee's remuneration as required pursuant to Section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and details of remuneration paid to Employees vide Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is given as Annexure-VI
29 Corporate Governance Report
Your Company has taken adequate steps to adhere to all the stipulationsas laid down in Pursuant to Schedule V (C) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. As required a Report on Corporate Governance is providedelsewhere in this Annual Report along with Auditor's Certificate on compliance thereof.
M/s. B K Ramadhyani & Co. LLP Chartered Accountants wereappointed as Statutory Auditors of the Company at the 25th Annual General Meeting(AGM') held on June 20 2017 for a period of 5 years up to the conclusion of30th AGM. M/s. B K Ramadhyani & Co. LLP are eligible for re-appointment for a furtherperiod of 5 years. M/s. B K Ramadhyani & Co. LLP have given their consent for theirre-appointment as Statutory Auditors of the Company and has issued certificate confirmingthat their re-appointment if made will be within the limits prescribed under theprovisions of Section 139 of the Companies Act 2013 (the Act') and the rulesmade thereunder. M/s. B K Ramadhyani & Co. LLP have confirmed that they are eligiblefor the proposed appointment under the Act the Chartered Accountants Act 1949 and therules or regulations made thereunder. As confirmed to Audit Committee and stated in theirreport on financial statements the Auditors have reported their independence from theCompany and its subsidiary according to the Code of Ethics issued by the Institute ofChartered Accountants of India (ICAI') and the ethical requirements relevant toaudit. Based on the recommendations of the Audit Committee and the Board of Directors itis hereby proposed to re-appoint M/s. B K Ramadhyani & Co. LLP Chartered Accountantshaving registration No.0028785/S200021 as the Statutory Auditors of the Company for thesecond and final term of five consecutive years who shall hold office from the conclusionof this 30th AGM till the conclusion of the 35 th AGM of the Company. The requirement forthe annual ratification of auditors' appointment at the AGM has been omitted as perCompanies (Amendment) Act 2017 notification on May 7 2018.
Total fees for all services paid by the Company and its subsidiarieson a consolidated basis to the statutory auditor and all entities in the networkfirm/network entity of which the statutory auditor is a part is given below
| ||Rs. in Mn. |
|Payment to Statutory Auditors ||FY 2021-22 |
|Audit Fees ||1.15 |
|Others Service ||0.09 |
|Reimbursement of expenses ||0.00 |
|Total ||1.24 |
Your Directors take this opportunity to express their gratitude to -
Our esteemed customers shareholders vendors business partnersadvisors and consultants for their unstinted support. The contribution made by ouremployees at all levels. Our consistent growth was made possible by their solidaritycooperation and support.
- State Bank of India (India) HSBC Bank Ltd (India) Axis Bank Ltd.(India) Indian Bank (Singapore) HSBC Bank (USA) and First Federal Bank (USA) fortheir support and guidance.
- Customs Reserve Bank of India Software Technology Parks (STPI) andNASSCOM Central & State Governments Software Technology Park (STPI) and NASSCOM fortheir continued support.
| ||For and on behalf of the Board of Directors |
| ||ASM Technologies Ltd. |
|Place : Bangalore ||M. R. Vikram ||Rabindra Srikantan |
|Date : 30.05.2022 ||Chairman ||Managing Director |