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ASM Technologies Ltd.

BSE: 526433 Sector: IT
NSE: N.A. ISIN Code: INE867C01010
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VOLUME 614
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52-Week low 55.50
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Mkt Cap.(Rs cr) 39
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Sell Price 78.45
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ASM Technologies Ltd. (ASMTECHNOLOGIES) - Director Report

Company director report

To the Members

We are pleased to present the 27th Annual Report together with the Audited Accounts ofyour Company for the year ended 31st March 2019

1. Financial Results (Rs. In Mn.)
2018-2019 2017-2018
Income from Software services and Products 760.59 761.91
Other operating income 55.77 17.92
Expenses

Employee benefits expense

520.13 512.92
Finance Costs 6.45 2.21
Depreciation 9.40 12.10
Other expenses 188.07 181.19
Profit/(Loss) before tax 92.31 71.41
Current Tax 21.73 27.00
Deferred Tax Income/expense 2.55 8.04
Excess provision of earlier years (2.30)
Profit/(Loss)for the year 70.33 36.37
Other Comprehensive Income
A (i) Items that will not be reclassified to profit or loss Remeasurement of defined benefit plans 1.01 2.01
(ii) Income tax relating to items that will not be reclassified to profit or loss Deferred tax on remeasurement of defined benefit plans (0.29) (0.56)
B (i) Items that will be reclassified to profit or loss

Changes in fair value of investments in equity instruments

0.10 (1.09)
(ii) Income tax relating to items that will not be reclassified to profit or loss Deferred tax on remeasurement of defined benefit plans (0.03) 0.30
Total comprehensive income for the year 71.12 37.03

2. Results of Operation

ASM along with its subsidiaries provide world class consulting and product developmentservices in the areas of Engineering Services Product R&D Services and DigitalTransformation with successful Offshore Development with Support Centers in India andOverseas for its global clientele.

During the financial year the Company explored new growth opportunities and performedsignificantly well in both the domestic as well as international markets. The performancereflects ASM's journey to reposition itself as a unique technology solutions provider thatis committed to develop an emerging breed of platforms thus enabling its customers togain competitive advantage through the Company's future ready digital transformationinitiatives.

On the standalone front your company registered a total revenue of Rs.760.59 Mn for theyear ended 31st March 2019. Domestic sales was Rs.78.84 Mn while Export sales was Rs.681.75 Mn. EBIDTA was at Rs. 108.16 Mn and Net profit after tax was Rs.70.33 Mn.

The Consolidated total revenue for the year ended 31st March 2019 was Rs.880.25 Mn.EBIDTA was at Rs. 109.11 Mn and Net Profit after tax at Rs.70.07 Mn.

3. Dividend/ Transfer to reserves

During the year 2018-19 the company declared an Interim dividend of Rs. 3.00/- on 3rdNovember 2018. In keeping with the Dividend policy your Directors are pleased torecommend for approval of the members a final dividend of Rs.3/-per equity share of Rs10/-each for the financial year 2018-2019. The dividend amount paid/payable if approved byshareholders will be Rs.15.00 Mn interim paid Rs. 15.00 Mn while Rs. 6.17 Mn will bepaid /payable by the company towards total dividend tax and surcharge thereon.

The dividend payout for the year under review has been formulated in accordance withthe Company's policy to pay sustainable dividend linked to long term growth objectives ofthe company to be met by internal cash accruals and the shareholders' aspirations.

Your Company has not transferred any amount to reserve for the Financial Year ended31st March 2019.

The paid up Share Capital of your Company is Rs. 50 Mn divided into5000000 equityshares of Rs 10/- each. Your Company has not come out with any issue (public rights orpreferential) during the Financial Year under review.

4. Subsidiary Companies

The consolidated Accounts of your Company and its subsidiaries viz. Advanced SynergicPte Ltd Singapore Pinnacle Talent Inc USA and RV Forms & Gears LLP duly auditedare presented as part of this Report in accordance with Indian Accounting Standards (IndAs) and the Listing Regulations with the Stock Exchange wherever applicable. Thestatement pursuant to the provisions to Section 129(3) of the Companies Act 2013containing salient features of the financial statement of the Company's Subsidiaries inFormAOC1 is given in Annexure -I1. The Accounts of the Subsidiaries audited for thepurpose of consolidation shall be placed on your Company's website and made available forinspection by any Shareholder at the Company's Registered Office and at the respectiveregistered offices of the Subsidiary companies. Copies can be made available on requestto the shareholders of the Company.

Your Company has formulated and adopted a "Policy for determining MaterialSubsidiaries" so that your company could identify such subsidiaries and formulategovernance framework for them. The Policy for determining 'material' subsidiaries isposted on Company's website : https://www.asmltd.com/policy-disclosures

During the year ASM acquired a 70% stake in RV Forms & Gears LLP a Chennai basedfirm. Forms & Gears founded in 1972 by RT Varghese a Mechanical Engineer from IITKharagpur is a pioneer in Fixture building. The company has supplied to most of theglobal automotive industry and machine makers by over 45 years. Forms & Gears hassuccessfully implemented projects all over India UAE Qatar Thailand Japan SingaporeIndonesia and Turkey. RV Forms & Gears will leverage ASM's digital expertise todevelop world class Smart Manufacturing solutions the first of which is an innovativesolution called Smart Fix 4.0. During the year under review your company also establisheda wholly owned subsidary in Kyoto Japan.

5. Future Outlook

Over the last few years ASM has invested in Product R&DDigital 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 Cyber Security.

R&D & Co-Creation

The impact of investments in Innovation and R&D has accelerated growth of ASM andhas set the company into the forefront of Product Development whilst getting a globalrecognition. The initiative has therefore been on developing the products of the futureto align with the changing technologies market and customer demands.

While investment in R&D (Research and Development) for the development of "New Products and Services" is a must for the growth and future sustainability of theorganization Co-creation is one step ahead of the R&D activities wherein the newproduct and services is jointly developed with our customers to meet specific definedopportunity. ASM's Co-creation Product Development Model fosters closer partnerships withthe customers / consumers and is achieved by the "Shared Innovation and SharedDevelopment" to develop solutions for defined " High Impact Problems".

Productivity Enhancement

Today in the world which is adapting into "Industry 4.0" and "SmartManufacturing" one of the main focus is to increase Productivity by "IncreasedYield" and "Increased Throughput". This is essentially achieved by reducingthe human intervention and automating the process using various technologies.

ASM Technologies has over the years helping customers with extensive usage ofAutomation Robotics and Digital Transformation (Dx) . This initiative has clearly been ofimmense benefit for its customers in quantitatively increasing Yield and Throughputresulting in "Improved Quality High Precision High Repeatability andReliability"

ASM with a proven experience in the Artificial Intelligence (AI) complexmanufacturing process consisting of inter- related parameters is effectively handled bycreating lot of automated data points through "application specific" Sensorsfurther processed through the IoT Gateway incorporating Sensor Fusion Algorithm to createa Big Data. Each of the Sensors are set with "Value Thresholds" for instant" Alerts"to address the Machine Behaviour outside of the Thresholds. Withefficient and smart Analytics in the cloud a wide array of data crunched output leadingto Predictive Maintenance Analysis Machine Downtime Machine Behaviour etc can lead tothe "Productivity Enhancement".

The thrust areas for ASM will continue to be in the Semiconductor Equipment MedicalDevices Hi -Tech Automotive Mobility Telecom industries. This "New ProductRevolution" has opened opportunities for companies like ASM in the space ofEngineering Services. The IoT ( Internet of Things) offers quality space for new productdevelopment and ASM is working on creating its own products as well as Co-Creation forcustomer's products. The next couple of years will be exciting in this space.

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 Cycle and getting a first mover advantage by ring- fencing the IP.Theclients are equally excited to collaborate with the Engineering Service providers likeASM to leverage their capability for global regional and adjacent markets therebyoptimize the R&D Operations.

6. Management Discussion and Analysis Report

Management Discussion and Analysis Report as required under Regulation 34 of SEBI(Listing Obligations and Disclosure Requirements ) Regulations 2015 is disclosedseparately in the Annual Report.

7. Board Meetings

During the year under review the Board of Directors held 7 meetings on 24.05.201816.06.2018 02.07.2018 04.08.2018 03.11.2018 06.02.2019 and 29.03.2019. The maximuminterval between two meetings did not exceed 120 days.

8. Directors and Key Managerial Personnel

As per the provisions of Companies Act 2013 Mr. M. Lakshminarayan Director retiresby rotation and being eligible offers himself for re-appointment at the ensuing AnnualGeneral Meeting. The Board recommends his re- appointment.

9. Disclosure on compliance with Secretarial Standards

Directors confirm that the Secretarial Standards issued by the Institute of CompanySecretaries of India have been complied with.

10. Independent Directors

Mr. M R Vikram Prof. B.S Sonde and Mr. Shekar Viswanathan were appointed asIndependent Directors of the company at the AGM held on 28th June 2014 for a period offive years upto 31st March 2019. The Board of Directors at their Meeting held on the 6thof February 2019 as recommended by the Nomination and Remuneration committeereappointed Mr. M R Vikram and Mr. Shekar Viswanathan as Independent Directors for asecond term of five years from 1st April 2019 subject to the approval of the members by aspecial resolution.

In terms of the recently notified Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) (Amendment) Regulations 2018 consent of theMembers by way of Special Resolution is required for appointment of a Non-ExecutiveDirector who is aged above seventy five years and accordingly the appointment of Prof B SSonde for the second term of five years is to be placed before the members for yourapproval.

At the meeting of the Board of Directors of the company held on the 18th of April 2019the Board approved seeking approval of the members through a Postal ballot thereappointment of Mr M R Vikram and Mr Shekar Viswanathan as Independent Directors from 1stApril 2019 to 31st March 2024 for a period of five years and the appointment of Prof B SSonde as Independent Director for a period of five years from 10th June 2019 to 9th June2024.

The company has received the necessary declaration from the Independent Directors underSection 149(7) of the Companies Act 2013 and they have met the criteria of Independence aslaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

11. Director's Responsibility Statement

Pursuant to the provisions of Section 134 (5)of the Companies Act 2013 the Directorshereby confirm that:

a) in the preparation of the annual financial statements for the year ended 31st March2019 the applicable accounting standards has been followed along with proper explanationrelating to material departures:

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit or loss of the company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared annual accounts of the company on a going concern basis.

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

12. Significant and material orders passed by the regulators or courts and MaterialChanges and commitments affecting the financial position of the company.

There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the company and its future operations. There are nomaterial changes and commitments if any affecting the financial position of the companywhich occurred between the end the financial year of the company to which the financialstatements relate and the date of this report.

13. Audit Committee

The Audit committee met five times during the Financial year under review and all itsrecommendations were accepted by the Board.

Your Company has established the Vigil Mechanism an Ombuds process which is a channelfor receiving and redressing of employees complaints. This mechanism covers questionablefinancial or accounting matters and reporting fraudulent financial information to theshareholders the government or any other legal authority. This meets the requirementunder Section 177(9) and(10) of the Companies Act 2013 and Regulation 22 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

14. Nomination and Remuneration Committee and Stakeholders Relationship and ShareTransfer Committee

The Nomination and Remuneration Committee has framed a policy for selection andappointment of Directors including determining qualifications of Independent Director KeyManagerial Personnel Senior Management Personnel and their remuneration as part of itscharter and other matters provided under Section 178(3) of the Companies Act 2013. A copyof the policy forms part of this report vide Annexure- I. The Nomination and RemunerationCommittee of a company has been

obligated under Section 178 of the Act to formulate a policy for recommending to theBoard of directors of the company for setting the criteria based on which the performanceof every Director including the performance of the Board as a whole shall be assessed bythe Board of Directors of the Company.

15. Familiarisation Programme

The Company has put in place an induction and familiarisation programme for all itsDirectors including the Independent Directors. The familiarisation programme forIndependent 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 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed BMP & Co. LLP Company Secretaries to undertake the Secretarial Audit ofthe Company. The Report of the Secretarial Audit in Form MR3 for the financial year endedMarch 31 2019 is annexed as Annexure - III to the Report. There are no qualificationsreservations or adverse marks made by Secretarial Auditor in the Report.

17. Auditor's Report

There are no qualifications reservations or adverse remarks made by M/s B K Ramadhyani& Co LLP Chartered Accountants Statutory Auditors in their report for the financialYear ended 31st March 2019. The Statutory Auditors have not reported any incident offraud under Section 143(12) of the Act and the rules made thereunder to the AuditCommittee of the company in the year under review.

18. Conservation of energy technology absorption and Foreign Exchange Outgo

The company's operations involve low energy consumption. However the efforts toconserve and optimize the use of energy through improved operational method and othermeans will continue.

The company has not imported any technology . Foreign exchange earnings and outgo

During the financial year under review 89.64 % of the revenue came from export ofsoftware services resulting in a foreign exchange inflow of Rs. 681.75 Mn and the foreignexchange outgo on account of overseas salaries traveling etc was Rs. 29.58 Mn.

19. Public Deposits

Your Company has not accepted any deposits from the public during the financial yearunder review.

20. Disclosures as required under Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013

Your Company has in place a Prevention of Sexual Harassment ( POSH) Policy in line withthe requirements of Sexual harassment of Women at Workplace ( Prevention Prohibition andRedressal) Act 2013. Your Company has through the Policy constituted a committee and hasestablished a grievance procedure for protection against victimization. Your Company iscommitted to provide a healthy environment to all employees conducive to work without thefear of prejudice and gender bias. During the year under review there were no casesfiled pursuant to the said Act.

Number of complaint filed during the financial year 2018-19 Nil
Number of complaint disposed off during the financial year 2018-19 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 to ensure a smoothfunctioning of its business. The processes and systems are reviewed constantly andimproved upon to meet the changing business environment. The Control Systems provide areasonable assurance of recording the transactions of its operations in all materialaspects and of providing protection against misuse or loss of Company's assets. TheInternal auditors periodically review the internal control systems policies andprocedures for their adequacy effectiveness and continuous operation for addressing riskmanagement and mitigation strategies.

22. Particulars of Loans guarantees or investments

During the Financial Year under review your Company had given CorporateGuarantee andsecurity of Deposits at prevailing bank lending rate to its subsidiary RV Forms &Gears LLP for meeting its working capital requirements. The balance outstanding as on 31stMarch 2019 is Rs 41.10Mn.

23. Risk Management Policy

The Risk management Policy of your company continuously evaluates the various riskssurrounding business and seeks to review and upgrade its risk management process. Tofurther the endeavour your Board constantly formulates strategies directed at mitigatingthese risks which get implemented at the Executive Management level and a regular updateis provided to the Board.

24. Corporate Social Responsibility Policy (CSR)

Your company has formulated CSR policty which is posted on the website athttps://www.asmltd.com/policy-disclosures . In pursuance to the provisions of Section 135and Schedule VII of the Companies Act 2013 the company constituted a CSR Committee of theBoard to (a) formulate and recommend a CSR policy (b) recommend the amount of expenditureto be incurred on the CSR activities and (c) monitor implementation of the CSR policy fromtime to time. The terms of reference of the CSR committee are in accordance with Section135 of the Companies Act 2013. The Annual Report on CSR in the prescribed format isenclosed to this Report as Annexure-IV.

25. Related Party Transactions

The company has in place formulated a Policy on materiality of Related Partytransactions 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 referred to in Section188(1) of the Companies Act 2013 in the format specified as Form AOC2 forms part of thisReport as Annexure- V

26. Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard is required to monitor and review the Board evaluation framework. In line with theCorporate Governance Guidelines Annual Performance Evaluation is conducted for all BoardMembers as well as the working of the Board and its Committees. The Board works with theNomination and Remuneration committee to lay down the evaluation criteria for theperformance of executive/nonexecutive/independent directors through a peer evaluationexcluding the director being evaluated through a Board effectiveness survey. Thequestionnaire of the survey forms an integral part of reviewing the functioning andeffectiveness of the Board and for identifying possible paths for improvement. Each Boardmember is required to evaluate the effectiveness of the Board and its committees onvarious parameters and feed back on each Director is part of the survey. The outcome ofthe Board evaluation for the financial year 2018-19 was discussed by the Board at theirmeeting held on 29thMarch 2019.

27. Remuneration to Director and Employees

Details/Disclosures of ratio of remuneration to each Director to median employee'sremuneration as required pursuant to Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and details of remuneration paid to Employees vide Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is given as Annexure-VI

28 Corporate Governance Report

Your Company has taken adequate steps to adhere to all the stipulations as laid down inPursuant to Schedule V (C) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. As required a Report on Corporate Governance is provided elsewhere inthis Annual Report along with Auditor's Certificate on compliance thereof.

29. Auditors

At the Annual General Meeting of the company held on 20th June 2017 the shareholdersappointed M/s B K Ramadhyani & Co LLP Chartered Accountants Bangalore bearingRegistration No.002878S/S00021 with the Institute of Chartered Accountants of India asStatutory Auditors of the Company for a period of five years from conclusion of the 25thAnnual Meeting of the Company. The requirement for the annual ratification of auditors'appointment at the AGM has been omitted as per Companies (Amendment) Act 2017 notificationon May 7 2018.

Total fees for all services paid by the Company and its subsidiaries on a consolidatedbasis to the statutory auditor and all entities in the network firm/network entity ofwhich the statutory auditor is a part is given below:

Rs. in Mn.
Payment to Statutory Auditors FY 2018-19
Audit Fees 0.60
Others Service 0.00
Reimbursement of expenses 0.00
Total 0.60

30. Acknowledgments

Your Directors take this opportunity to express their gratitude to -

Our esteemed customers shareholders vendors business partners advisors andconsultants for their unstinted support. The contribution made by our employees at alllevels. Our consistent growth was made possible by their solidarity cooperation andsupport.

- State Bank of India Incube Branch Bangalore Indian Bank Singapore HSBC BankNewYork USA and First Federal Bank Ohio USA for their support and guidance

- Customs Reserve Bank of India Software Technology Parks (STPI) and NASSCOM Central& State Governments Software Technology Park (STPI) and NASSCOM for their continuedsupport.

For and on behalf of the Board of Directors ASM Technologies Ltd.
Place : Bangalore Date : 18.05.2019 M. R. Vikram Rabindra Srikantan

Chairman Managing Director

ANNEXUREI

Nomination and Remuneration Policy

1. Title

This Policy will be called "Nomination and Remuneration Policy"

2. Introduction

The company considers human resources as its invaluable assets. This Policy isformulated for the Company to attract motivate and retain high-caliber seniorexecutives/directors in a competitive market who possess the required core competenciesprofessional backgrounds and skill sets in line with the identity of the Company and itsbusiness. This Policy reflects the Company's objectives for good corporate governance aswell as sustained long-term value creation for stakeholders.

In order to align with the provisions of the Companies Act 2013 and the schedule V ofListing Obligations Disclosure Regulation 2015 the Board of Directors have changed thenomenclature of the "Remuneration Committee" as "Nomination andRemuneration Committee". The "Nomination and Remuneration Committee" hasformulated the "Nomination and Remuneration policy" which has also been approvedby the Board of Directors of the Company.

3. Objective

The objective of this policy is to lay down a framework in relation to remuneration ofDirectors Key Managerial Personnel and Senior Management personnel. The Key objective ofthe committee would be:

• To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.

• To guide the Board in relation to appointment and removal of Directors KeyManagerial Personnel and Senior Management.

• To recommend to the Board the Remuneration payable to the Directors KeyManagerial Personnel and Senior Management personnel.

• To retain motivate and promote talent and to ensure long term sustainability oftalented managerial personnel and create competitive advantage.

4. Applicability and Commencement

This policy is applicable to Directors Key Managerial Personnel and Senior Management.This policy will be effective from 28th March 2015.

5. Definitions

• Board means the Board of Directors of the Company.

• Company means ASM TECHNOLOGIES LIMITED.

• Director means Directors of the Company.

• Policy means "Nomination and Remuneration policy" as amended from timeto time.

• Committee means "Nomination and Remuneration Committee".

Key Managerial Personnel means

• Managing Director

• Chief Financial Officer

• Company Secretary

• such other officer as may be prescribed

Senior Management means personnel of the company who are members of its core managementteam excluding the Board of Directors comprising all members of the management one levelbelow the Executive Directors including Functional Heads.

Managing Director means a Director who is in the whole time employment of the Companyand includes a Whole time Director.

Nomination & Remuneration Committee means the Committee of the Board constituted assuch under the provisions of section 178 of the Companies Act 2013 and as per the revisedClause 49 of the Listing Agreement.

Non-Executive Director means a Director who is not in the whole time employment of theCompany and includes an Independent Director.

Independent Director means a Director referred to in section 149 of the Companies Act2013 and as per the revised Clause 49 ofthe Listing Agreement.

6. Role and Duties of the Committee

The Role and Duties ofthe committee inter alia will be as follows:

• To recommend to the Board the appointment removal of Directors Key ManagerialPersonnel and Senior Management.

• To recommend to the Board the Remuneration payable to the Directors KeyManagerial Personnel and Senior Management personnel.

• To formulate a criteria for determining qualifications positive attributes andindependence of a Director and to recommend to the Board the Policy relating toremuneration for Directors Key Managerial Personnel and Senior Management.

• Formulate criteria for evaluation of the Independent Directors and the Board andto carry out evaluation of every Director's performance.

• Ensure that level and composition of remuneration is reasonable and sufficientthe relationship of remuneration to performance is clear and meets appropriate performancebenchmarks.

• To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.

• Identify persons who are qualified to become Directors and who may be appointedin Senior Management in accordance with the criteria laid down in this policy.

• To perform such other functions as may be necessary or appropriate for theperformance of its duties.

7. Membership / Constitution of the Committee

• The Committee shall comprise of at least three (3) Directors all of whom shallbe Non-Executive Directors and at least half shall be Independent. The Committee comprisesof the following Independent Directors:

Shekar Viswanathan ; Chairman M.R.Vikram Prof. B.S.Sonde M. Lakshminarayan

• The Chairman of the Committee shall be an Independent Director.

• The Chairperson of the Company (whether executive or non-executive) may beappointed as a Member of the Committee but shall not Chair the Committee.

• In the absence of the Chairman the members of the Committee present at themeeting shall choose one amongst them to act as the Chairman.

• The Board shall reconstitute the Committee as and when required to comply withthe provisions of the Companies Act 2013 Listing Agreement and any other applicablestatutory requirement.

8. Quorum

Minimum two (2) Directors will constitute a quorum for the Committee meeting.

9. Frequency of Meetings

The meeting of the Committee shall be held at least once in a year.

10. Appointment and Removal of Directors Key Managerial Personnel and SeniorManagement

10.1 Appointment Criteria and Qualifications:

• The person should possess adequate qualification expertise skills andexperience for the position he / she is considered for appointment. The Committee has thediscretion to decide whether qualification expertise and experience possessed by a personare sufficient / satisfactory for the concerned position.

• Before appointment the Company shall identify and ascertain the integrityqualification expertise and experience of the person for appointment as Director KeyManagerial Personnel and Senior Management Personnel.

• The Committee shall approve the remuneration as well as the appointment made bythe HR Department/ Company of the Senior Management personnel and put forward it theBoard. The same shall be done after considering the integrity qualification expertiseand experience of the person appointed.

• The Committee may call and seek the help of the head of HR Department or anyother Company Official including the recommender or a Key Managerial Personnel whileapproving the appointment.

10.2 Term / Tenure

a) Managing Director/Whole-time Director/Executive Director/Manager:

• The Company shall appoint or re-appoint any person as its Managing DirectorExecutive Chairman or Executive Director or Whole Time Director for a term not exceedingfive years at a time or as applicable by the respective provisions of the Companies Act2013. No re-appointment shall be made earlier than one year before the expiry of term.

• The Company shall not appoint or continue the employment of any person asManaging Director/ Executive Chairman/ Whole-time Director/Manager who has attained theage of seventy years. Provided that the term of the person holding this position may beextended beyond the age of seventy years with the approval of the shareholders by passinga special resolution based on the explanatory statement annexed to the notice for suchmotion indicating the justification for extension of appointment beyond seventy years.

b) Independent Director:

• An Independent Director shall hold office for a term up to five consecutiveyears on the Boardof the Company and will be eligible for re-appointment on passing of aspecial resolution by the Company in this regard.

• No Independent Director shall hold office for more than two consecutive termsbut such Independent Director shall be eligible for appointment after expiry of threeyears of ceasing to become an Independent Director of the Company. Provided that anIndependent Director shall not during the said period of three years be appointed in orbe associated with the Company in any other capacity either directly or indirectly.However if a person who has already served as an Independent Director for 5 (Five) yearsor more in the Company as on 1st October 2014 or such other date as may be determined bythe Committee as per regulatory requirement he shall be eligible for appointment for onemore term of 5 (Five) years only.

• At the time of appointment of an Independent Director it should be ensured thatnumber of Boards on which such Independent Director serves is restricted to seven Listedcompanies as an Independent Director and three Listed companies as an Independent Directorin case such person is serving as a whole-time Director in any Listed company.

c) Key Managerial Personnel and Senior Management:

• A whole-time KMP of the Company cannot hold the office in any other companyexcept in its subsidiary at the same time. However a Managing Director of the Company canhold office in one another company provided such appointment is approved by a resolutionpassed at a meeting of the Board of Directors with the consent of all the Directorspresent at the meeting and of which meeting and of all the resolutions to be movedthereat specific notice has been given to all the Directors there in India.

• The tenure and terms of appointment of Key Managerial Personnel and SeniorManagement will be as per the prevailing HR policy of the Company or as per the applicableprovisions of the Companies Act 2013.

10.3 Evaluation

• The Committee shall diligently carry out annual evaluation of performance ofevery Director KMP and SMP on the basis of the criteria(s) laid down by the Committee orthe Company or under the Act or as per SEBI Regulations.

10.4 Removal

• Due to reasons for any disqualification/misconduct/fraud mentioned in the Act orunder any other applicable Act rules and regulations there under the Committee mayrecommend to the Board with reasons recorded in writing removal of a Director KeyManagerial Personnel or Senior Management Personnel subject to the provisions andcompliance of the said Act rules and regulations.

10.5 Retirement

• The Director KMP and Senior Management Personnel shall retire as per theapplicable provisions of the Companies Act 2013 and in accordance with the applicablepolicy of the Company .

11. Remuneration of Directors key Managerial Personnel and Senior Management

a) Remuneration to Managing Director/Whole-time Director/Executive Director/Manager:

• The Remuneration/ Compensation/ Commission etc. to be paid to Managing Directorshall be governed as per provisions of the Companies Act 2013 and rules made there underor any other enactment for the time being in force.

b) Remuneration to Non- Executive / Independent Director:

• The Non-Executive Independent Director may receive remuneration / compensation/commission as per the provisions of Companies Act 2013. The amount of sitting fees shallbe subject to ceiling/ limits as provided under Companies Act 2013 and rules made thereunder or any other enactment for the time being in force

c) Remuneration to Key Managerial Personnel and Senior Management:

• The Remuneration/Compensation /Commission payable to the Key ManagerialPersonnel and Senior Management shall be as per the prevailing HR policy of the Company oras per the provisions of the Companies Act 2013 and rules made there under or any otherenactment for the time being in force.

d) For continual long term engagement and to enhance their standard of living of KMPand Senior Management

Personnel where the Committee extends benefits/welfare facilities such as groupmediclaim insurance policy or

indemnify them against liability premium paid on such insurance shall not be treatedas part of the remuneration

payable of such personnel.

12. Review and Amendments

• The Committee or the Board may review the policy as and when it deems necessary.

• The Board of Directors or the Committee or the Company Secretary shall have thepower to amend any of the provisions of this Policy substitute any of the provisions withnew provisions or replace this Policy entirely with a new Policy.

ANNEXURE -II

Statement containing salient features of the financial statement ofsubsidiaries/associate companies / joint ventures

(Pursuant to first provisio to sub-section(3) of Section 129 read with rule 5 ofCompanies ( Accounts) Rules 2014- Form AOC-1)

Part "A" : Subsidiaries

(Rs. in Mn.)

Sl. Particulars

No.

Advanced Synergic Pte Ltd Singapore (WOS) Pinnacle Talent Inc USA (WOS) ASM

Technologies KKJapan ( WOS )

ESR Associates Inc USA (Step

downsubsidiary)

RV Forms & Gears LLP Indian Subsidiary
1. Reporting period for the subsidiary concerned if different from the holding

company1s reporting period

01-04-2018 to 31-03-2019 01-04-2018 to 31-03-2019 28-12-2018 to 31-03-2019 01-04-2018 to 31-03-2019 05-07-2018 to 31-03-2019
2. Reporting Currency SGD USD YEN USD INR
3. Exchange rate as on the last date of the relevant financial year in case of foreign subsidiaries Rs.51.12 Rs.69.32 Rs. 0.61 Rs. 69.32 Rs 1.00
4. Share Capital 51.12 10.41 0.61 6.93 18.11
5. Reserves & Surplus (71.78) (70.41) (0.36) (51.16) NIL
6. Total Assets 8.62 88.99 0.25 40.88 129.77
7. Total Liabilities 29.28 148.99 - 5.11 111.66
8. Investments 2.78 - - - -
9. Turnover 17.80 30.06 - - 108.42
10. Profit/(Loss) before taxation (3.22) (6.76) (0.36) (0.48) 2.51
11. Provision for taxation - - - - (0.78)
12. Profit/( Loss) after taxation (3.22) (6.76) (0.36) (0.48) 1.73
13. % of shareholding 100 100 100 100 70

Notes:

1. ESR Associates Inc is a wholly owned subsidiaries of Advanced Synergic Pte Ltd theWOS of the company.

Proposed dividend from any subsidiary is "NIL"

Part "B": Associates and Joint Ventures

Statement pursuant to Section 129(3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures.

There are no associate companies and joint ventures during the current financial year.

For and on behalf of the Board of Directors ASM Technologies Ltd.

Place : Bangalore Date : 18.05.2019 M. R. Vikram

Chairman

Rabindra Srikantan

Managing Director