Overview
ASM along with its subsidiaries has been providing world class
consulting and product development services in the areas of Engineering Services and
Design led manufacturing 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
Technology is transforming businesses in every industry around the
world in a profound and fundamental way. In fiscal 2023, we saw emerging technologies,
like Generative AI, 5G, Low Code No Code, shape the future of industries. Responsible
business approaches, including embracing ESG, have gained traction. We continued to
witness businesses attempting to reimagine their cost structures, increase business
resilience and agility, personalize experiences for customers and employees, and launch
new and disruptive products and services
2. Opportunities
Digitisation 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 Engineering Services and Design led manufacturing.
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. 103.00 Mn during
the year under review.
b. Shareholder Funds
The total shareholder funds was Rs. 849.35 Mn as at 31st March, 2023
against Rs. 714.02 Mn as of the previous year end.
c. Fixed Assets
As on 31st March 2023 the gross block of assets stood at Rs. 74.65 Mn
for the standalone and Rs. 312.72 Mn for the consolidated.
d. Net Worth
The return on Net worth ( RONW) for the year ended 31st March 2023 was
1.76% for the standalone and 3.16% for the consolidated.
e. Earnings per share
Earnings per share for the year ended 31st March 2023 was Rs. 15.06 for
the standalone and Rs. 6.94 for consolidated.
f. Revenue
On the standalone front the company registered a total revenue of Rs.
1391.50 Mn for the year ended 31st March 2023 compared to Rs. 1410.71 Mn, the previous
year. Domestic sales at Rs. 577.63 Mn and Export sales at Rs. 813.87 Mn contributed to the
revenue.
The Consolidated total revenue for the year ended 31st March 2023 was
Rs. 2204.08 Mn compared to Rs. 1916.73 Mn, the previous year.
g. Operating Profit (EBIDTA)
We earned an operating profit Rs.281.04 Mn representing 18.78% of total
revenues for the year ended 31st March 2023 as compared to Rs. 234.74 Mn representing
16.64% of total revenues, during the previous year.
On the consolidated front, EBIDTA was at Rs. 273.37 Mn representing
12.40% of the total revenues for the year ended 31st March 2023.
h. Net Profit after Tax
Net profit after tax was Rs. 155.09 Mn. on the standalone front and Rs.
71.45 Mn for the consolidated, for the year ended 31st March, 2023
i. Developments in Human Resources/ Industrial Relations
The total employee strength of the company, as on 31st March, 2023 was
1163 as compared to 1191 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.
j. Debtor turnover, Inventory turnover, Interest coverage ratio,
Current ratio, Debt Equity ratio, Net profit margin, forms part of financials.
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