asm technologies ltd share price Management discussions


ASM along with its subsidiaries has been providing world class consulting and product development services in the areas of Engineering Services and Product R&D with successful Offshore Development & Support Centers in India and Overseas for its global clientele. The company is a public limited company incorporated in India and having its registered office in Bengaluru, Karnataka, India. The companys shares are listed with BSE Limited.

The Ministry of Corporate Affairs (MCA) vide notification dt February 16,2015,notified the Ind AS applicability to certain classes of companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules 2014. For ASM group Ind AS is applicable from 1st April 2017.

1. Industry Structure and Development

Coming out of the pandemic, we are witnessing gradual but steady uptick in global Engineering Research and Development (ER&D) spend. During the 2020 Pulse Survey, India were focusing on ‘ensuring business continuity and ‘ability to drive scale. However, the 2022 survey made it clear that the attention has now shifted to ‘driving innovation out of the centre. Compared with the 2021 budget, 80 percent of the surveyed companies expect their global engineering R&D spend to increase this year. 85 percent companies also indicated a continued upward trajectory in budget over the next three years. Although creating customercentric, connected products is a top investment priority for ER&D organisations, building a technology ecosystem to better engage with a large set of technology providers is next on the agenda. In addition, adopting Environmental, Social, and Governance (ESG) standards, globalising R&D footprint through new Global Capability Centres (GCCs) or Engineering Service Providers (ESPs) and tapping into a global talent pool are the other top investment priorities. Given the rapidly evolving technology and push to shorter innovation cycles and faster time to market, co-creation is emerging as the new innovation model of choice, with 70 percent of the respondent companies exploring (or already involved in) co-creation with either start-ups or ESPs About 85 percent of the surveyed organisations already leverage a GCC for their ER&D activities, with 75 percent of such centres being located in India. More companies are expected to establish or increase their India presence in the next few years owing to increasing comfort levels with decentralised/ remote ER&D teams and proven ER&D ecosystem that India offers.

2. Opportunities

Digitisation, technologies and innovation will fuel growth with new opportunities in the years ahead. Technologies such as artificial intelligence (AI), Industry 4.0, augmented reality, virtual reality, machine learning (ML), big data analytics are providing numerous new opportunities for large enterprises as much as they are aiding the start-ups in developing new products and service lines, improving efficiency, productivity, and competence levels, giving thrust to the economic growth of the country. ER&D companies have to adopt these new technologies in a big way by skilling their employees and by taking risks in building products around these technologies. the focus of the government to expand the domestic market through a focus on indigenisation and self-reliance has led to capability building among Indian organizations for future relevant domains such as Software Development, Product management and Manufacturing Engineering.

We believe in our competitive strengths and with our Global Delivery Model and core competencies consider to address the changing economic scenarios as an opportunity to provide greater value to existing clients and add new clients. Our specific industry, domain and technology expertise allows us to enable clients to transform their businesses through innovative strategies and solutions. Our process driven engineering and planning ensures in delivering quality products in the optimum time and cost. ASM is a pioneer in Semiconductor and Electronic Equipment, Automotive and Product R&D industries.

3. Outlook

This has been provided elsewhere in the Annual Report.

4. Risks and Concerns

a. Competition Risk

In this highly competitive global business environment only firms that continually upgrade their capabilities and offerings in line with emerging technologies and market imperatives can hope to survive and even prosper in this environment. Capability building and continual upgrading are essential for organizational survival and growth.

Technologies are moving rapidly from traditional technologies to Analytics, Big data, Artificial Intelligence and Robotics. The Company stays invested in enhancing the value proposition for its customers by way of deepening its domain expertise, technological capabilities and customer engagement. We compete with other technology service providers in response to requests for proposals and in certain services there is increased competition resulting in pressures in pricing. The companys capability to offer innovative and value added solutions and services by integrating its diverse domain knowledge. The unrivaled blend of engineering culture and technology skills adopted by the company and its strategic acquisitions and management resources adds to its capability to offer innovative and value added solutions and services by integrating its diverse domain knowledge experience.

b. Financial Risk.

The ER&D sector would have to re-adopt technology disruptions by reshaping enterprises and focus on technology-led platforms, as the currency volatility and innovative technologies such as artificial intelligence, automation, etc have disrupted the sectors traditional products and solutions With a significant portion of the companys revenues coming from exports, volatility in exchange rates may impact Companys business adversely. The company however mitigates the risks with robust accounts receivable management, centralised framework to control expenses and currency hedging strategies by the management. The company has a defined policy for managing its foreign exchange exposure. The company tracks the foreign exchange markets closely and takes appropriate hedging decisions from time to time if need be. The risk policy of the Board covers some of this large macro level risk and the remedial measures taken by the company to face and mitigate some of these risks.

c. New Technologies and Business Models

Engineering Research & Development continues to be the fastest growing segment, driven by global majors . India continues to be the core for digital innovation with a rich ecosystem of start-ups, tech providers and services providers engaging in global delivery and investing in IP, solutions and Centers of Excellence (CoEs). Digital became mainstream during the year, with the industry increasingly investing in digitized solutions to drive future growth opportunities The Indian ER&D companies need to speed up the process of adopting technology in order to stay future proof as today ,the Industry is fraught with challenges and. opportunities, with Artificial Intelligence ( AI), automation and machine learning having permeated every facet of a business. As a System Design House, ASM is fully equipped to handle complex Software, Electronics, Mechanical and Embedded software design and development to complete the product under one roof. Further, working prototype and manufacturing results in the entire product realization for the client. In our effort to step up non-linear growth, some of the key designs by the Engineering Services group are being prototyped and will be manufactured in limited quantities through partner companies and delivered to strategic customers. The company also regularly audits and verifies its compliance with security and disaster recovery measures. The impact of investments in Innovation and R&D has accelerated growth of ASM and has set the company into the forefront of Product Development, whilst getting a global recognition. The initiative has therefore been on developing the products of the future, to align with the changing technologies, market and customer demands.

d. Geography Risk

Business environment in the past year has been volatile and uncertain given the current pandemic. The company has insulated its overall performance from the impact of market exigencies and vagaries with a domestic international spread of business and combinations of its various solutions and services. The companys well honed skills enable it to spread efficiently its business across various geographies. The company moreover derives most of the revenues from off shoring business resulting in a healthier bottom line and protection from risks from any downward spiral in any economy. The companys growth is not dependent on any specific geographic area or specified industry segment.

5. Internal Control System and their adequacy

The Internal Control System has been designed to ensure that assets and interest of the company are protected and dependability of accounting data and its accuracy are ensured with proper checks and balances. The internal control systems adopted by the company are adequate and appropriate to its operations so as to ensure uninterrupted functioning of its business. The system has been designed to ensure that assets and interest of the company are protected and dependability of accounting data and its accuracy are ensured with proper checks and balances. The existing internal control systems and their adequacy are frequently reviewed and improved upon to meet the changing business environment.

The Company has internal audit to examine and evaluate the adequacy and effectiveness of Internal Control system. The internal audit ensures that the system designed and implemented to provide adequate internal control commensurate with the size and operations of the company. The Audit Committee of the company chaired by the independent director and consisting of other non-executive independent directors, periodically review and commend the quarterly, half yearly and annual financial statement of the company. A detailed note on the functioning of the audit committee forms part of the chapter on Corporate Governance in this Report.

The management duly considers and takes appropriate action on the recommendations made by the statutory auditors, internal auditors and independent Audit Committee of the Board of Directors.

Financial Overview

a. Share Capital

The Company has at present only one class of shares. The authorized share capital is 1,50,00,000 Equity shares of Rs. 10/- each, constituting to Rs.150.00 Mn There was increase in the issued, subscribed and paid up capital of Rs. 100.00 Mn during the year under review. Company issued Bones Shares of 1:1 during the year undre review.

b. Shareholder Funds

The total shareholder funds was Rs. 714.02 Mn as at 31st March, 2022 against Rs. 650.75 Mn as of the previous year end.

c. Fixed Assets

As on 31st March 2022 the gross block of assets stood at Rs. 88.33 Mn for the standalone and Rs. 142.56 Mn for the consolidated.

d. Net Worth

The return on Net worth ( RONW) for the year ended 31st March 2021 was 1.74% for the standalone and 2.34% for the consolidated.

e. Earnings per share

Earnings per share for the year ended 31st March 2022 was Rs. 13.18 for the standalone and Rs. 12.65 for consolidated.

f. Revenue

On the standalone front the company registered a total revenue of Rs. 1410.71 Mn for the year ended 31st March 2022 compared to Rs. 1132.17 Mn, the previous year. Domestic sales at Rs. 606.84 Mn and Export sales at Rs. 803.87 Mn contributed to the revenue.

The Consolidated total revenue for the year ended 31st March 2022 was Rs. 1916.73 Mn compared to Rs. 279.18 Mn, the previous year.

g. Operating Profit (EBIDTA)

We earned an operating profit Rs. 234.74 Mn representing 16.64% of total revenues for the year ended 31st March 2022 as compared to Rs. 208.60 Mn representing 18.42% of total revenues, during the previous year.

On the consolidated front, EBIDTA was at Rs. 279.18 Mn representing 14.56% of the total revenues for the year ended 31st March 2022.

h. Net Profit after Tax

Net profit after tax was Rs. 131.77 Mn. on the standalone front and Rs. 139.01 Mn for the consolidated, for the year ended 31st March, 2022

i. Developments in Human Resources/ Industrial Relations

The total employee strength of the company, as on 31st March, 2022 was 1191 as compared to 1107 the previous year. At ASM, employees are the Companys biggest asset and the Company continuously focuses towards innovative initiatives to attract, train, retain and motivate its employees. The Companys endeavors are driven by a strong set of values imbibed in it and policies that it abides by. All the Companys policies are focused towards a healthy, happy and prosperous work environment for its employees and thereby also fulfill the aspirations of the people at work. . Your company believes that people are the primary drivers in the success of an organization and hence people and HRD remain at the forefront of its mission. In this pursuit, the Company is providing timely and cost effective recruitment system for attracting the cream of talented professionals, ensuring a clear compensation and benefit policy in tune with the latest IT market trends. Our endeavors are driven by a strong set of values imbibed in us and policies that we abide by.




We have examined the compliance of conditions of Corporate Governance by ASM Technologies Limited ("the Company"), for the purpose of certifying of the Corporate Governance under Regulation 17 to 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from the period April 01, 2021 to March 31, 2022. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of certification.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance with the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Regulations 17 to 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For BMP & Co
Company Secretaries
Pramod SM
Date : 30.05.2022 FCS 7834 / CP No. 13784
Plae : Bangalore UDIN : F007834D000431147