ASM Technologies Ltd.
|BSE: 526433||Sector: IT|
|NSE: N.A.||ISIN Code: INE867C01010|
|BSE 00:00 | 20 Jul||96.80||
|NSE 05:30 | 01 Jan||ASM Technologies Ltd|
ASM Technologies Ltd. (ASMTECHNOLOGIES) - Director Report
Company director report
To the Members
We are pleased to present the 26th Annual Report together with the Audited Accounts ofyour Company for the year ended 31st March 2018
1. Financial Results
(Rs. In Mn.)
2. Results of Operation
ASM along with its subsidiaries provide world class consulting and product developmentservices in the areas of Engineering Services and Product R&D Services (ER&D) withsuccessful Offshore Development and Support Centers in India and Overseas for its globalclientele.
On the standalone front your company registered a total revenue of Rs. 761.91 Mn. forthe year ended 31st March 2018. Domestic sales was Rs. 64.70 Mn. while Export sales wasRs. 697.21 Mn. EBIDTA was at Rs. 85.72 Mn. and Net profit after tax was Rs. 37.03 Mn.
The Consolidated total revenue for the year ended 31st March 2018 was Rs. 826.26 Mn.EBIDTA was at Rs. 43.60 Mn. and Loss after tax at 4.29 Mn.
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 paid Rs.12.50Mn amounting to a total Rs. 25 Mn for the financial year 2017-18. Rs.5.16 Mn will be paidby 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 amounts to reserve for the Financial Year ended31st March 2018.
4. Subsidiary Companies
The consolidated Accounts of your Company and its subsidiaries viz. Advanced SynergicPte Ltd Singapore and Pinnacle Talent Inc USA wholly owned subsidiaries and ESRAssociates Inc step down subsidiary duly audited are presented as part of this Report inaccordance with Accounting Standard 21 and the Listing Regulations with the StockExchange wherever applicable. The statement pursuant to the provisions to Section 129(3)of the Companies Act 2013 containing salient features of the financial statement of theCompany's Subsidiaries in FormAOCl is given in Annexure -II. The Accounts of theSubsidiaries audited for the purpose of consolidation shall be placed on your Company'swebsite and made available for inspection by any Shareholder at the Company's RegisteredOffice and at the respective registered offices of the Subsidiary companies. Copies can bemade available on request to 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 : http://bit.do//ASM-Policy
5. Future Outlook
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.
Further there is a global push for a green and sustainable environment. In thisconnection a time bound thrust is mandated to convert all automobile running on naturalresources to a more environment friendly Electric Vehicle.
On a parallel initiative there is a thrust for the ADVANCED Driver Assistance system(ADAS) which is gaining ground to build safer vehicles and infrastructures (like roadsSensor Readers) which helps in Collision Avoidance Lane Departure Warning Sending Alertsto Pedestrian Driver with Visual / Voice-Over Recommendations Signboard identification360-degree view Online Real-time Vehicle parameters Data Analytics and Reports ThirdParty GIS Information Integration. Typically the vehicles will be integrated with a hostof physical Sensors like the Radar LIDAR Cameras Night-Vision Devices that allow thevehicle to monitor and navigate with a 360-degree view in various conditions like trafficweather etc. Algorithms to manage the fusion of sensors play a key role in the safety ofthe Driver Passenger Pedestrian other vehicles in the vicinity by giving real timecontrol actuation to the vehicle or to the driver. These form the foundation blocks to theautonomous vehicles of the future.
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 MedicalDevices Hi -Tech Consumer Electronics Automotive & Aerospace and Telecomindustries.
This "New Product Revolution" has opened opportunities for companies likeASM in the space of Engineering Services.
The IoT (Internet of Things) offers quality space for new product development and ASMis working on creating its own products as well as Co-Creation for customer's products.The next couple of years will be exciting in this space.
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.
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 6 meetings on 06.05.201720.06.2017 09.09.2017 04.11.2017 08.01.2018 and 07.02.2018. The maximum intervalbetween two meetings did not exceed 120 days.
8. Directors and Key Managerial Personnel
As per the provisions of Companies Act 2013 Ms. Preeti Rabindra (DIN 00216818)Director retires by rotation and being eligible offers herself for re-appointment at theensuing Annual General Meeting. Brief profile of Ms. Preeti Rabindra is given in the notesto the Notice of the ensuing AGM.
9. Independent Directors
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.
10. 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 March2017 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.
11. 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.
12. Audit Committee
The Audit committee comprises of Mr. M.R.Vikram Chairman Mr. Rabindra SrikantanProf. B.S. Sonde Mr. M. Lakshminarayan Mr. Shekar Viswanathan and as members. Thecommittee 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.
13. Nomination and Remuneration Committee and Stakeholders Relationship and ShareTransfer Committee.
The present composition of the Nomination and Remuneration Committee includes Mr.Shekar Viswanathan Chairman Mr. M.R. Vikram Prof. B.S. Sonde and Mr. M. Lakshminarayanas its members. 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. The Nomination andRemuneration Committee of a company has been obligated under Section 178 of the Act toformulate a policy for recommending to the Board of directors of the company for settingthe criteria based on which the performance of every Director including the performance ofthe Board as a whole shall be assessed by the Board of Directors of the Company.
The Stakeholders Relationship and Share Transfer Committee comprises of Prof. B.S.Sonde Chairman Mr. Rabindra Srikantan and Mrs. Preeti Rabindra as its members.
14. 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.-
15. 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 2018 is annexed as Annexure - III to the Report. There are no qualificationsreservations or adverse marks made by Secretarial Auditor in the Report.
16. 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 thefinancial Year ended 31st March 2018. The Statutory Auditors have not reported anyincident of fraud to the Audit Committee of the company in the year under review.
17. Extract of Annual Return
As required pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of the Annual Report inform MGT 9 is annexed as Annexure - IV to this Report.
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 91.51% of the revenue came from export ofsoftware services resulting in a foreign exchange inflow of Rs. 697.21 Mn. and the foreignexchange outgo on account of overseas salaries traveling etc was Rs. 64.71 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.
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
Your company has not granted loans or corporate guarantees in the year under review.Investment during the year consists of investment in Mutual Fund (current investment) -Rs. 220.72 Mn.
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 in pursuance to the provisions of Section 135 and Schedule VII of theCompanies Act 2013 constituted a CSR Committee of the Board to (a) formulate andrecommend a CSR policy (b) recommend the amount of expenditure to be incurred on the CSRactivities and (c) monitor implementation of the CSR policy from time to time. The termsof reference of the CSR committee are in accordance with Section 135 of the Companies Act2013. The Committee comprises of Prof. B.S. Sonde Chairman Mr. M.R. Vikram Mr. RabindraSrikantan Mr. Shekar Viswanathan and Ms. Preeti Rabindra The Annual Report on CSR in theprescribed format is enclosed to this Report as Annexure-V.
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 - http://bit.do//ASM-rpt.
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- VI
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.
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 Remunerationof 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-VII.
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 certificate from M/s B M P & Co LLP firm of practisingCompany Secretaries confirming the compliance with the conditions of CorporateGovernance as stipulated under the said Regulations is attached to this report.
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 for audit of financial statement at a remuneration to bedecided by the Audit Committee of the Board of Directors in consultation with the Auditorsplus applicable service tax and reimbursement of traveling and out of pocket expensesincurred by them for the purpose of audit.
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 Overseas Branch Bangalore Karnataka India and Indian BankSingapore for their support and guidanceCentral & State Governments SoftwareTechnology Parks of India (STPI) and NASSCOM for their continued support.
For and on behalf of the Board ASM Technologies Ltd.