ASM Technologies Ltd Directors Report.

To the Boards Members,

We are pleased to present the 29th Annual Report together with the Audited Accounts of your Company for the year ended 31st March 2021

1. Financial Results (Rs. In Mn.)
2020-2021 2019-2020
Income from Software services and Products 1132.17 838.40
Other operating income 34.56 39.00
Expenses
Employee benefits expense 730.27 596.56
Finance Costs 18.93 9.98
Depreciation 10.07 22.41
Other expenses 227.86 224.06
Profit/(Loss) before tax 179.60 24.39
Current Tax 44.95 7.64
Deferred Tax Income/expense 0.98 7.66
Profit/(Loss)for the year 126.53 10.90
Other Comprehensive Income
A (i) Items that will not be reclassified to profit or loss Remeasurement of defined benefit plans (1.45) (2.07)
(ii) Income tax relating to items that will not be reclassified to profit or loss Deferred tax on remeasurement of defined benefit plans 0.37 0.52
B (i) Items that will be reclassified to profit or loss Changes in fair value of investments in equity instruments (1.19) (1.35)
(ii) Income tax relating to items that will be reclassified to profit or loss 0.30 Deferred tax on changes in fair value of investments in equity instruments 0.31
Total comprehensive income for the year 124.56 8.31

2. Results of Operation

ASM along with its subsidiaries provide world class consulting and product development services in the areas of Engineering Services, Product R&D Services and Digital Transformation with successful Offshore Development with Support Centers in India and Overseas for its global clientele.

During the financial year, the Company explored new growth opportunities and performed significantly well in both the domestic as well as international markets. The performance reflects ASMs journey to reposition itself as a unique technology solutions provider that is committed to develop an emerging breed of platforms, thus enabling its customers to gain competitive advantage through the Companys future ready digital transformation initiatives.

On the standalone front your company registered a total revenue of Rs.1132.17 Mn for the year ended 31st March 2021. Domestic sales was Rs.281.28 Mn while Export sales was Rs. 850.89 Mn. EBIDTA was at Rs. 208.60 Mn and Net profit after tax was Rs.126.53 Mn.

The Consolidated total revenue for the year ended 31st March 2021 was Rs.1373.88 Mn. EBIDTA was at Rs. 201.49 Mn and Net Profit after tax at Rs.86.01 Mn.

3. Dividend/ Transfer to reserves

During the year 2020-21 your company declared an Interim dividend of Rs. 2.00/- on 4th August, 2020 followed by a Special 2 Interim dividend of Rs. 2.00/- on 4th November, 2020. In keeping with the Dividend policy your Directors are pleased to recommend for approval of the members a final dividend of Rs.3.00/- per equity share of Rs.10/- each for the financial year 2020-2021. The dividend amount paid/payable if approved by shareholders will be Rs.30.00 Mn.

The dividend payout for the year under review has been formulated in accordance with the Companys policy to pay sustainable dividend linked to long term growth objectives of the 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 ended 31st March, 2021.

The paid up Share Capital of your Company is Rs. 100 Mn divided into 100,00,000 equity shares of Rs 10/- each. Your Company has issued bonus share of 1:1 during the Financial Year under review.

4. Subsidiary Companies

The consolidated Accounts of your Company and its subsidiaries viz., Advanced Synergic Pte Ltd, Singapore, Pinnacle Talent Inc, USA, ASM Technologies KK, Japan and RV Forms & Gears LLP and ASM Digital Engineering Pvt Ltd., India duly audited, are presented as part of this Report in accordance with Indian Accounting Standards ( IndAs) and the Listing Regulations with the Stock Exchange, 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 the Companys Subsidiaries in Form AOC1 is given in Annexure -II. The Accounts of the Subsidiaries audited for the purpose of consolidation shall be placed on your Companys website and made available for inspection by any Shareholder at the Companys Registered Office and at the respective registered offices of the Subsidiary companies. Copies can be made available on request, to the shareholders of the Company.

Your Company has formulated and adopted a "Policy for determining Material Subsidiaries" so that your company could identify such subsidiaries and formulate governance framework for them. The Policy for determining ‘material subsidiaries is posted on Companys website: https://www.asmltd.com/policy- disclosures.

During the year ASM acquired Semcon India Pvt. Ltd. (Now known as ASM Digital Engineering Pvt. Ltd.)

5. Future Outlook

Were pleased to announce that we executed well on our predictions in last years Future Outlook. Knowing that we managed to meet all the goals we set for ourselves validates our journey, and encourages us to make some predictions this year as well.

At this time last year, we were already exploring new opportunities in several key business areas. We will continue to do so in the coming year and at a much larger scale.

This edition of ASMs Future Outlook is a result of the confidence and sense of hope we carry with us into the future.

The World and ASM After COVID

The entire world is caught within the COVID-19 quagmire. This global pandemic has not only increased the healthcare burden on many countries, but also directly impacted multiple industries. This, in turn, has affected the socio-economic fabric of human society. To put it mildly, COVID-19 is an unprecedented adversity for businesses, governments, and individuals alike.

At ASM, we have always believed that every adversity has opportunities hidden within it. We only need to look past the challenges, find the opportunities and then take the right actions to leverage them in meaningful and profitable ways. In the recent past, we have relied on these belief as guideposts to inform our strategic direction and business decision-making. Our consistent successes in a challenging business landscape are a testament to the rightness of our convictions and choices.

In the post-COVID "new normal", ASM will continue to focus on opportunities, rather than challenges. We have identified many such growth areas, especially in Digital Engineering . In fact, we foresee an accelerated global push towards these developments, which will have a huge positive impact on both industry, and human society.

Scaling Up Digital Engineering Initiatives

In future, Digital Engineering will be a key business imperative across everything we do, whether its in Product R&D, Engineering Services, Design led manufacturing engineering or any of our other lines of business. We are increasing our focus on Internet of Things (IoT), Big Data, Artificial Intelligence (AI), Machine Learning (ML), Virtual Reality (VR), Augmented Reality (AR), Mixed Reality (MR), Mobile Applications, Cloud, Virtualization, Networking, Cybersecurity and Industry 4.0 (Smart Manufacturing . We believe that were in an excellent position to take advantage of these opportunities, not only to improve our own prospects, but to better serve the customers and stakeholders who rely on our capabilities.

In the coming years, ASM will also scale up its investments in many other cutting-edge technologies where we foresee strong demand including: Product R&D, Engineering Services, and Design-led Manufacturing.

We see continued demand from the massive Digital Transformation around the around, this has resulted in increased demand in our industry verticals - Semiconductor Engineering, Networking, Cybersecurity, Wireless and Automotive.

SmartFix 4.0 Wins CII Industrial Innovation Award 2020

ASM has launched its own patent-pending solution SmartFix 4.0 - a one-of-a-kind solution for the manufacturing industry.

SmartFix 4.0 is an industrial AI solution offering a potent combination of world-class hardware, software and data analytics to increase manufacturing yield and throughput. With a robust global client base and a host of strategic partnerships with multiple OEMs, SmartFix is set to deliver value over the next two years.

ASM Ventures

Through its investment arm ASM Ventures, ASM is increasing its strategic investments in several emerging technology companies. At the same time, we are co-creating several products and solutions in the fastgrowing areas of Cloud, Network, Cybersecurity, Electric Vehicles, Autonomous Vehicles, and more.

We see enormous business potential in these areas, and are determined to stay at the forefront of these cutting edge technologies and innovations. To this end, we are continuously evaluating new opportunities in technology, manufacturing and boutique service/product companies, and looking to expand our investments in these and other areas.

The future looks bright in the Engineering Services Outsourcing (ESO) space. There are many driving forces at play here, particularly around customers needs to reduce the product development lifecycle, and get a first mover advantage by ring-fencing their intellectual property. These are two reasons why so many companies are excited to collaborate with the best Engineering Service providers like ASM. By partnering with us, they can effectively leverage our capabilities to grow in global, regional and adjacent markets, thereby optimizing R&D Operations for mutually-beneficial growth.

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 disclosed separately in the Annual Report.

7. Board Meetings

During the year under review the Board of Directors held 7 meetings, on 02.06.2020, 10.07.2020, 04.08.2020, 30.10.2020, 04.11.2020, 30.12.2020 and 13.02.2021 The maximum interval between two meetings did not exceed 120 days.

8. Directors and Key Managerial Personnel

As per the provision of Companies Act 2013 Mr. Ramesh Radhakrishnan (DIN 02608916) Director, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting (AGM). The Board recommends his appointment for consideration of members of the Company. Brief profile of Mr. Ramesh Radhakrishnan is given in the notes to the Notice of the ensuing AGM.

9. Disclosure on compliance with Secretarial Standards

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

10. Independent Directors

Your Company has laid down procedures to be followed for familiarizing the Independent Directors with your Company, their roles, rights, responsibilities in your Company and to impart the required information and training to enable them contribute significantly to your Company. All the Independent Directors of the Company have given declarations 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 have also confirmed that they have complied with the Companys Code of Conduct. All the Independent Directors of the Company have given declarations 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.

11. Directors Responsibility Statement

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

a) in the preparation of the annual financial statements for the year ended 31st March 2021 the applicable accounting standards has been followed along with proper explanation relating to material departures:

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

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets 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 the Company and that such internal financial controls are adequate and were operating effectively.

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

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

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the company and its future operations. There are no material changes and commitments, if any, affecting the financial position of the company which occurred between the end the financial year of the company 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 under review and all its recommendations were accepted by the Board.

Your Company has established the Vigil Mechanism, an Ombuds process which is a channel for receiving and redressing of employees complaints. This mechanism covers questionable financial or accounting matters and reporting fraudulent financial information to the shareholders, the government or any other legal authority. This meets the requirement under Section 177(9) and(10) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

14. Nomination and Remuneration Committee and Stakeholders Relationship and Share Transfer Committee

The Nomination and Remuneration Committee has framed a policy for selection and appointment of Directors including determining qualifications of Independent Director, Key Managerial Personnel, Senior Management Personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013. A copy of the policy forms part of this report vide Annexure- I. The Nomination and Remuneration Committee of a company has been obligated under Section 178 of the Act to formulate a policy for recommending to the Board of directors of the company for setting the criteria based on which the performance of every Director including the performance of the Board as a whole shall be assessed by the Board of Directors of the Company.

15. Familiarisation Programme

The Company has put in place an induction and familiarisation programme for all its Directors including the Independent Directors. The familiarisation programme for Independent Directors in terms of provisions of Regulation 46(2)(i) of Listing Regulations, 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 has appointed BMP & Co., LLP, Company Secretaries, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit in Form MR3 for the financial year ended March 31, 2021 is annexed as Annexure - III to the Report. Further, in accordance with Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021, the material subsidiary of the Company - ASM Digital Engineering Pvt Ltd undertook secretarial audit for the FY 2020-21 and Form MR-3 (Secretarial Audit Report) is annexed with this annual report. There are no qualifications, reservations or adverse marks made by Secretarial Auditor in the Report.

17. Auditors Report

There are no qualifications, reservations or adverse remarks made by M/s B K Ramadhyani & Co, LLP, Chartered Accountant Statutory Auditors, in their report for the financial Year ended 31st March, 2021. The Statutory Auditors have not reported any incident of fraud under Section 143(12) of the Act and the rules made thereunder to the Audit Committee of the company in the year under review.

18. Conservation of energy, technology absorption and Foreign Exchange Outgo

The companys operations involve low energy consumption. However the efforts to conserve and optimize the use of energy through improved operational method and other means will continue.

The company has not imported any technology.

Foreign exchange earnings and outgo

During the financial year under review 75.16 % of the revenue came from export of software services resulting in a foreign exchange inflow of Rs. 850.90 Mn and the foreign exchange outgo on account of overseas salaries, traveling etc was Rs. 31.11 Mn.

19. Public Deposits

Your Company has not accepted any deposits from the public during the financial year under 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 with the requirements of Sexual harassment of Women at Workplace ( Prevention, Prohibition and Redressal) Act 2013. Your Company has through the Policy constituted a committee and has established a grievance procedure for protection against victimization. Your Company is committed to provide a healthy environment to all employees conducive to work without the fear of prejudice and gender bias. During the year under review , there were no cases filed pursuant to the said Act.

Number of complaint filed during the financial year 2020-21 Nil

Number of complaint disposed off during the financial year 2020-21 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 smooth functioning of its business. The processes and systems are reviewed constantly and improved upon to meet the changing business environment. The Control Systems provide a reasonable assurance of recording the transactions of its operations in all material aspects and of providing protection against misuse or loss of Companys assets. The Internal auditors periodically review the internal control systems, policies and procedures for their adequacy, effectiveness and continuous operation for addressing risk management and mitigation strategies.

22. Particulars of Loans, guarantees or investments

During the Financial Year under review, your Company had given Corporate Guarantee and security 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 31st March, 2021 is Rs 128.65Mn.

23. Risk Management Policy

The Risk management Policy of your company continuously evaluates the various risks surrounding business and seeks to review and upgrade its risk management process. To further the endeavour your Board constantly formulates strategies directed at mitigating these risks which get implemented at the Executive Management level and a regular 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, if any: NA

25. Annual Return.

In accordance with the Companies Act, 2013, the annual return in the prescribed format is available at https://www.asmltd.com/financials/

26. Corporate Social Responsibility Policy (CSR)

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

27. Related Party Transactions

The company has in place formulated a Policy on materiality of Related Party transactions for dealing with such transactions in line with the requirements of the Listing Regulations with the Stock Exchange. . The policy on related party transactions is available on the Companys website at -https://www.asmltd.com/ policy-disclosures.

Particulars of contracts or Arrangements with related parties referred to in Section 188(1) of the Companies Act 2013 in the format specified as Form AOC2 forms part of this Report as Annexure- V

28. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, 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 as well as the working of the Board and its Committees. The Board works with the Nomination and Remuneration committee to lay down the evaluation criteria for the performance of executive/non-executive/independent directors through a peer evaluation, excluding the director being evaluated through a Board effectiveness survey. The questionnaire of the survey forms an integral part of reviewing the functioning and effectiveness of the Board and for identifying possible paths for improvement. Each Board member is required to evaluate the effectiveness of the Board and its committees on various parameters and feed back on each Director is part of the survey. The outcome of the Board evaluation for the financial year 2020-21 was discussed by the Board at their meeting held on 13th February 2021.

29. Remuneration to Director and Employees

Details/Disclosures of ratio of remuneration to each Director to median employees remuneration as required pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 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

30. Corporate Governance Report

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

31. Auditors

At Annual General Meeting of the Company held on 20th June 2017 the shareholders appointed M/s B K Ramadhyani & Co, LLP, Chartered Accountants, Bangalore, bearing Registration No.002878S/S00021 with the Institute of Chartered Accountants of India, as Statutory Auditors of the Company for a period of five years from conclusion of the 25th Annual 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 notification on May 7 2018.

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

Rs. in Mn.
Payment to Statutory Auditors FY 2020-21
Audit Fees 0.85
Others Service 0.00
Reimbursement of expenses 0.00
Total 0.85

32. Acknowledgments

Your Directors take this opportunity to express their gratitude to -

Our esteemed customers, shareholders, vendors, business partners, advisors and consultants for their unstinted support. The contribution made by our employees at all levels. Our consistent growth was made possible by their solidarity, cooperation and support.

- State Bank of India, (India), HSBC Bank Ltd (India), ICICI Bank Ltd., (India), Indian Bank, (Singapore), HSBC Bank, (USA) and First Federal Bank, (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 continued support.

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

Place : Bangalore M. R. Vikram Rabindra Srikantan
Date : 26.05.2021 Chairman Managing Director