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Directors Report of ASM Technologies Ltd.

Mar 31, 2015

To the Members,

We are pleased to present the 23rd Annual Report together with the Audited Accounts of your Company for the year ended 31st March 2015.

1. Financial Results (Rs. In lakhs) Particulars 2014-2015 2013-2014

Income from software services and Products 10941.74 10440.53

Software development expenses 8065.24 8084.50

Gross Profit 2876.50 2356.03

Administrative expenses 1211.97 821.86

Operating Profit before Interest Depreciation & Tax (EBIDTA) 1664.53 1534.17

Depreciation 157.45 117.43

Interest 389.77 234.25

Other income 167.72 213.37

Profit/-Loss before Tax (EBT) 1285.03 1395.86

Provision for Tax 484.80 418.76

Deferred Tax Income/-Expense (27.93) (11.37)

Net Profit /-Loss (PAT) 828.16 988.47

Profit & Loss bal brought forward 2337.96 1712.20

Amount available for appropriation 3166.13 2700.67

Interim Dividend 60.00 50.00

Proposed Final Dividend 40.00 90.00

Dividend Tax 20.14 22.71

Depreciation adjustment 88.04 -

Transfer to General Reserve 100.00 200.00

Balance in Profit & Loss A/c 2857.94 2337.96

2. Results of Operation

On the standalone front your company registered a total revenue of Rs. 10941.74 lakhs for the year ended 31st March 2015, a growth of 4.8% over the same period the previous year. Domestic sales was Rs. 4190.92 lakhs while Export sales was Rs. 6750.83 lakhs, EBIDTA was at Rs. 1664.53 lakhs, while Profit after tax was Rs. 828.16 lakhs.

The Consolidated total revenue for the year ended 31st March 2015 was Rs. 16,384.92 lakhs. EBIDTA was at Rs. 1676.66 lakhs while Profit after tax was Rs. 503.53 lakhs.

3. Dividend / Transfer to Reserves

With a view to augment resources for long term growth the Directors have recommended for approval of the members a final dividend of Rs. 0.80/- per equity share of Rs. 10/- each for the financial year 2014-2015.The dividend amount paid out if approved by members will be Rs. 40.00 lakhs, interim paid Rs. 60.00 lakhs, while Rs. 20.14 lakhs will be paid by the company towards total dividend tax and surcharge thereon.

The dividend payout for the year under review has been formulated in accordance with the Company's 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 proposes to transfer Rs. 100.00 lakhs to General Reserve out of the amount available for appropriations and an amount of Rs. 2857.94 lakhs is proposed to be retained in the Profit & Loss Account.

4. Subsidiary Companies

The consolidated Accounts of your Company and its subsidiaries viz., Advanced Synergic Pte Ltd, Singapore and Pinnacle Talent Inc, USA, duly audited are presented as part of this Report in accordance with Accounting standard 21 and the Listing Agreement with the Stock Exchange, wherever applicable. The statement pursuant to the provisions to Section 129(3) of the Companies Act 2013, containing salient features ofthe financial statement ofthe Company's Subsidiaries in FormAOC1 is given in Annexure - II.

During the financial year under review your Company formulated and adopted a "Policy for determining Material Subsidiaries" so that your company could identify such subsidiaries and formulate governance framework for them. Copy ofthe Policy form part of this Report in Annexure - III.

5. Future Outlook

We are in the exciting times the way business is done across the world, what with the proliferation of the Digital Technology, Mobility Apps, Social Media and the Analytics both for an enterprise and the end-users perspective.

In the cusp of this accelerated growth phase, New Technologies are changing the "Traditional" Practice to "Smart" Practice and this is accentuated by the early adoption in the Enterprises and the Government.

The stage is set for an exponential growth aided by the New Generation Entrepreneurs / Start-Ups. All of this means that there is a new wave of "innovation". There is a convergence of Engineering R&D, Hardware, Software, Telecommunication, Internet which is setting the pace. ASM is well aligned and poised to capitalise on this wave by consolidating its position as an innovative and nimble organization by offering more services to the existing clients across other geographies and in the process acquiring new clients. This steep growth phase, set in a different trajectory, will also set a platform to have more long term strategic partnerships with the customers moving up the value chain from project mode to centre of excellence to Intellectual Property (IP) oriented Innovation.

The last one year has seen a leap frog in the value add and Innovation by ASM to its customers in both IT and Engineering fields. Thus the investments made in Ideation, Engineering Design, Prototyping and Proving the Concepts thereby setting new benchmark with the elite clientele is the testimony of the re-alignment.

In the coming year, this model will get amplified with more such Innovation and also supporting on the Supply Chain.

New client acquisitions will be through addition of specialized sales and technology & delivery and specializations in more Industry Verticals which offer high growth.

6. Management Discussion and Analysis Report

Management Discussion and Analysis Report as required under clause 45 (viii)(D)(1) of the Listing Agreement is disclosed separately in the Annual Report.

7. Board Meetings

During the year under review the Board of Directors met 12 times viz, on 03.05.2014, 28.06.2014, 29.07.2014, 30.08.2014, 27.10.2014, 29.10.2014, 17.11.2014, 16.12.2014, 20.01.2015, 11.02.2015, 28.02.2015, and 28.03.2015. The maximum interval between two meetings did not exceed 120 days.

8. Directors and Key Managerial Personnel

At the last Annual General Meeting of your Company held on the 28th of June, 2014, Mr. M.R.Vikram, Prof. B.S.Sonde and Mr. Shekar Viswanathan were appointed as Independent Directors, for a specific tenure in accordance with Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

During the year under review Ms. Preeti Rabindra was appointed as an Additional Director to fulfill the requirement of appointing a Woman Director on the Board of your company and at the ensuing Annual General Meeting it is proposed to appoint her as a Director to retire by rotation.

Mr. Narsingh .L.Rathod, has been appointed as the Chief Financial Officer and also as a Key Managerial Personnel of your company with effect from 26th May, 2015.

9. Independent Directors

During the financial year under review your company has laid down the procedures to be followed for familiarizing the Independent Directors with their duties, functions , roles and responsibilities in the company. Your company has received the necessary declaration from the Independent Directors under Section 149(7) of the Companies Act 2013 and they have met the criteria of Independence as laid down in Section 149(6) of the Companies Act, 2013.

10. Director's 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 accounts, for the financial Year 2015, the applicable accounting standards has been followed along with proper explanation relating to material departures:

b) the 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.

11. Material Changes and commitments affecting the financial position of the company.

The Board in its meeting held on February 28, 2015 subject to securing the requisite approval from shareholders through Postal Ballot, approved the proposal to sell certain portion of the Company's business pursuant to the execution of a non-binding Letter of Intent dated February 28, 2015 ("Letter of Intent") to sell, transfer or caused to be sold and transferred through an asset deal, slump sale or acquisition of one or more of the subsidiaries of the company or special purpose vehicles to be incorporated to that effect or any other mode as approved by the Board, of certain assets of the company relating to its business, of enterprise application solution that provides implementation, up-gradation and support services to Alten SA, a company organized under the laws of France, having its office at avenue Andre Morizet, 92513 Boulogne-Billancourt Cedex, France by itself or through its affiliates for a consideration and other terms and conditions as set out in the Letter of Intent.

12. Audit Committee

The Audit committee comprises of Mr.M.R.Vikram, Chairman, Prof. B.S.Sonde and Mr. Shekar Viswanathan as members. The 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) and10 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

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

During the year under Review your Company has reconstituted the Nomination and Remuneration Committee and Stakeholders Relationship and Share Transfer Committee in line with the requirements of the Companies Act 2013 and the Listing Agreement with the Stock Exchange.

The present composition ofthe Nomination and Remuneration Committee includes Mr. Shekar Viswanathan, Chairman, Prof. B.S. Sonde and Mr. M.R.Vikram as its members. 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.

14. 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 Ms. Mangala Rohith, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit in Form MR3 for the financial year ended March 31,2015 is annexed as Annexure - IV to the Report.

The following qualifications were observed by the Secretarial Auditor in her Report to which the Board has shared the following explanations:

Qualification 1: Non compliance of section 152 [6] of the Act- at the last AGM held on 28.06.2014- [ No resolution for any director to retire by rotation]

Response: Based on the following constitution ofthe Board there was no scope for any Director to retire by rotation -

1. 1 Executive Director (Managing Director) not liable to retire by rotation as per Articles of Association ofthe company

2. 3 of the Independent Directors were appointed for a period of 5 years, not to retire by rotation as per provisions of Section 149 of Companies Act 2013.

Qualification 2:Non appointment of CFO as at 31st March 2015 [section 203 non compliance]

Response: In complying with the provisions of Section 203 of the Companies Act 2013 regarding appointment of CFO your company was in the process of identifying a suitable person and accordingly has appointed Mr. Narsingh Rathod as CFO ofthe company effective 26th, May 2015.

15. Auditor's Report

There are no qualifications, reservations or adverse remarks made by M/s Sudhakar Pai Associates, Statutory Auditors in their report for the financial Year ended 31st March, 2015. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

16. Extract of Annual Return

As required pursuant to Section 92(3) of the Companies Act 2013, and Rule 12(1) of the Companies (Management and Administration) Rules 2014, an extract ofthe Annual Report in form MGT 9 is annexed as Annexure - V to this Report.

17. Conservation of energy, technology absorption and Foreign Exchange Outgo:

The company's 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 during the year.

Foreign exchange earnings and outgo

During the financial year under review, 62% of the revenue came from export of software services to clients in USA, Singapore and Germany resulting in a foreign exchange inflow of Rs. 6750.83 lakhs and the foreign exchange outgo on account of overseas salaries, travelling etc was Rs. 1491.97 lakhs

18. Public Deposits

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

19. 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.

20. 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 Company's 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.

21. Particulars of Loans, guarantees or investments

Your company has not granted loans or corporate guarantees in the year under review but the balance outstanding as on 31st March 2015 in respect of those granted in the earlier years is provided in Note 28 of Notes forming part of the financial statements.

22. 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.

23. Corporate Social Responsibility Policy (CSR)

Your has in pursuance to the provisions of Section 135 and Schedule VII of the Companies Act 2013 constituted during the year 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 Committee comprises of Mr. M.R.Vikram, Mr. Rabindra Srikantan, Prof. B.S. Sonde and Mr. Shekar Viswanathan. The Annual Report on CSR in the prescribed format is enclosed to this Report as Annexure-VI

24. Related Party Transactions

During the financial year under review, in line with the requirements of the Listing Agreement entered with the Stock Exchange your company has formulated a Policy on materiality of Related Party transactions for dealing with such transactions. A copy of the Policy forms part of this Report as Annexure- VII

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 ofthis Report as Annexure- VIII

25. Board Evaluation

Pursuant to the provisions of the Companies Act 2013, Clause 49 of the Listing Agreement peer evaluation of all Board members, annual performance evaluation of its own performance, as well as the evaluation of the working of the Committees of the Board was conducted. This evaluation was led by the Chairman of the Board and Nomination and Remuneration Committee with focus on the performance and effective functioning of the Board. The evaluation process also considered the time spent by each of the Board members, core competencies, personal characteristics, accomplishment of specific responsibilities and expertise.

26. Remuneration to Director and Employees

Details/Disclosures of ratio of remuneration to each Director to median employee's 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- IX

27. Listing with Stock Exchanges

Your company is current with regard to payment of Annual Listing fees with BSE where the shares of the company are listed .

28. Corporate Governance Report

Your Company has taken adequate steps to adhere to all the stipulations as laid down in Clause 49 of the Listing Agreement. As required, a Report on Corporate Governance is provided elsewhere in this Annual Report along with Auditor's Certificate on compliance thereof.

29. Auditors

M/s. Sudhakar Pai Associates, Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment. They have expressed their willingness to accept office if re-appointed .

30. Acknowledgements

Your Directors take this opportunity to express their gratitude to

- Our esteemed customers, employees, shareholders, vendors, business partners, advisors and consultants for their unstinted support.

- State Bank of India, Overseas Branch, Bengaluru, Indian Bank, Singapore, State Bank of India, San Jose, DBS Bank Ltd, Bengaluru, Bank ofBaroda, Bengaluru, for their support and guidance.

- Central & State Governments, Software Technology Park (STPI) and NASSCOM for their continued support.

For and on behalf of the Board

Place : Bengaluru M. R. Vikram Rabindra Srikantan Date : 26th May, 2015 Chairman Managing Director


Mar 31, 2013

To the Members,

The are pleased to present the 21st Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2013.

1. Financial Results

(Rs. In lakhs)

2012-13 2011-12

Income from software services and products 9061.81 7114.17

Software development expenses 6977.62 5638.06

Gross Profit 2084.19 1476.11

Administrative expenses 704.82 401.23

Operating Profit before Interest Depreciation & Tax (EBIDTA) 1379.37 1074.88

Depreciation 99.31 71.87

Interest 219.36 178.60

Other income 181.94 178.14

Profit/-Loss before Tax (EBT) 1242.64 1002.55

Provision for Tax 350.43 272.26

Deferred Tax Income/-Expense 2.22 2.75

Net Profit /-Loss (PAT) 889.99 727.54

Profit & Loss bal brought forward 1267.49 985.23

Amount available for appropriation 2157.48 1712.77

Interim Dividend 60.00

Proposed Final Dividend 65.00 125.00

Dividend Tax 20.27 20.27

Transfer to General Reserve 300.00 300.00

Balance in Profit & Loss A/c 1712.21 1267.49

2. Results of Operation

On the standalone front the company registered a total revenue of Rs.9061.81 lakhs for the year ended 31st March 2013,a growth of 27.38 % over the sa me period the previous year. Domestic sales was Rs.3562.44 lakhs while Export sales was Rs. 5499.37 lakhs an increase by 47% to that of the previous year. EBIDTA was at Rs. 1392.58 lakhs, up 26.73% YoY while Profit after tax increased by22.32 % YoY to Rs.889.99 lakhs.

The Consolidated total revenue of Rs.17520.54 lakhs for the year ended 31st March 2013 registered a growth of 20.36% over the same period the previous year. EBIDTA was at Rs. 1792.24 lakhs while Profit aftertax was Rs. 1065.62 lakhs.

3. Dividend

With a view to augment resources for long term growth of the company the Directors have recommended for approval of the members a final dividend of Rs.1.30 per equity share of Rs 10/-each for the financial year 2012-2013. The dividend amount paid out if approved by members will be Rs.65.00 lakhs, interim paid Rs. 60.00 lakhs , while Rs.20.28 lakhs will be paid by the company towards total dividend tax and surcharge thereon.

The dividend payout for the year under review has been formulated in accordance with the Company`s 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.

4. Transfer to Reserves

The company proposes to transfer Rs.300.00 lakhs to General Reserve out of the amount available for appropriations and an amount of Rs. 1712.21 lakhs is proposed to be retained in the Profit & Loss Account.

5. Subsidiaries

Advanced Synergic Pte Ltd - achieved a gross revenue of Rs.2937.57 lakhs for the year ended 31st March, 2013 and registered a pre tax profit of Rs 241.65 lakhs for the year under review.

Pinnacle Talent Inc, USA- achieved a gross revenue of Rs.2188.06 lakhs and a pre tax profit of Rs.3.59 lakhs for the year ended 31st March 2013.

ESR Associates Inc,. USA - achieved a gross revenue of Rs732.37 lakhs and a pre tax loss of Rs.61.89 lakhs for the year ended 31st March, 2013.

Abacus Business Solutions Inc- achieved a gross revenue of Rs.5544.56 lakhs for the period ended 31st March, 2013 and regis- tered a pre tax profit of Rs.44.02 lakhs for the above said period.

In ac cordance with the general circular No.2/2011 dt. 8th February, 2011 issued by the Ministry of Corporate Affairs, Govern- ment of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

6. Future Outlook

There are headwinds in the Global Economic Trend which will have an impact on the IT/Engineering spends by some of the indus- try verticals. While this would not lead to a recessionary outlook, it will be a challenge to meet the client & market expectations without much increase in the budgets.

ASM will continue to consolidate and grow by increasing service offerings to the existing client base across existing and new ge- ographies along with new client acquisitions. The efforts of working towards a strategic relationship with key clients has yielded results, some of this will result in additional revenues during this fiscal.

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.

ASM has been developing some products as co-development with key technology companies, some of these technologies will mon- etize during this fiscal.

Geographical Areas of Operation

ASM has increased focus on Europe and is expanding into some of the African countries as well.

New Initiatives in Engineering Services

The Engineering Services has been expanded to design prototypes for some of the new product initiatives. These key product de- signs will also be manufactured through partner companies and delivered to our strategic customers.

New Initiatives in Enterprise Applications

During the year ASM signed an agreement to work with Oracle to co-develop Oracle Fusion Value Chain Planning applications. ASM, a Gold level member of Oracle Partner Network (OPN), is one of several members of OPN that will provide engineering and functional resources to assist in the development of the next generation of Oracle Fusion Value Chain Planning applications. Under this initiative, ASM will work on two separate co-development projects for the next release of Oracle Fusion Value Chain Planning applications. This is a significant investment in Oracle Fusion, benefiting, both Oracle and preparing our consulting team with the depth of knowledge they require to deploy these new products.

7. Awards

During the year the company was awarded the Winner for the category "Best Exporter- Services (Small)" at the ''ECGC - D&B Indian Exporters'' Excellence Awards 2012''.

8. Corporate Social Responsibility

During the year the company made a contribution to American Cancer Society. The company also donated 15 desk tops to Agastya International Foundation, a Bangalore-based education trust seeking to transform and stimulate the thinking of rural children and teachers

9. Management Discussion and Analysis Report

The Report on Management''s Discussion and Analysis covering matters listed inter alia in Clause 49 of the Listing Agreement for the year under review is attached to this Report.

10. Directors Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act 1956, the Directors based on all representations received from the operating management confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards has been followed along with proper explanation relating to material departures:

2. The Company had selected the 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;

3. The Company had 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;

4. The annual accounts of the company are prepared on a going concern basis.

11. Corporate Governance Report

As required vide Clause 49 of the Listing Agreement , a Report on Corporate Governance is provided elsewhere in this Annual Report along with Auditor" s Certificate on compliance thereof.

12. Secretarial Audit Report

As a measure of good corporate governance practice, the company appointed Mr. M.R. Gopinath, Practicing Company Secretary, to conduct Secretarial Audit of records and documents of the Company. The Secretarial Audit Report for the financial year ended March, 31st 2013, is provided in the Annual Report. The Secretarial Audit Report confirms that the company has complied with all the applicable provisions of the Companies Act, 1956, Depositories Act, 1996,Listing Agreements with the Stock Exchanges and all the Regulations and Guidelines of the Securities and Exchange of India ( SEBI). A copy of the report is provided elsewhere in the Annual Report.

13. Directors

The year 2012-2013 saw the sad demise of the senior most Director on the Board , Dr. R.P.Shenoy. The Directors place on record their sincere appreciation of the valuable services , advice and guidance given by Dr. R.P.Shenoy, during his long tenure on the Board.

As per Article 131 of the Articles of Association of the company Mr. M.R.Vikram, Director, retires by rotation and is eligible for reappointment.

Brief profile of the Director proposed for re-appointment is given after the Notice to the ensuing AGM.

14. Particulars of employees

Information as per Section 217 (2A) of the Companies Act 1956 read with Companies (Particulars of Employees) Rules, 1975- Expenditure on employees employed for the year/part of the year who were in receipt of remuneration which in the aggregate is not less than Rs. 5,00,000 per month is not applicable for the year 31st March 2013. This is in view of the Notification dated 31.3.2011by the Ministry of Corporate Affairs raising the limit of employee`s salary to be disclosed in Directors Report. It is fur- ther clarified vide General Circular No.23/2011 dt. 3.5.2011 of the Ministry of Company Affairs that the above said notification is applicable to all Directors Report under Section 217 of the Companies Act 1956, approved by the Board on or after 1st of April, 2011, irrespective of the accounting year of the annual accounts being approved by the Board.

15. Conservation of energy, technology absorption:

The company''s 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 during the year.

Foreign exchange earnings and outgo

During the year, the Foreign Exchange earned was Rs. 5499.37 lakhs and Foreign Exchange used was Rs 1588.47 lakhs.

16. Fixed Deposits

The Company has not accepted any deposits from the public during the year.

17. Auditors

M/s. Sudhakar Pai Associates, Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meet- ing and are eligible for re-appointment. They have expressed their willingness to accept office if re-appointed and the company received certificate from them confirming that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such appointment, within the meaning of Sub-sections (3) and (4) of Section 226 of the Companies Act, 1956.

18. Acknowledgements

Your Directors take this opportunity to express their gratitude to

- Our esteemed customers, employees, shareholders, vendors, business partners, advisors and consultants for their unstinted support.

- State Bank of India, Overseas Branch, Bangalore, DBS Bank Ltd, Bangalore, Bank of Baroda, Bangalore, Indian Bank , Singapore and State Bank of India San Jose for their support and guidance

- Central & State Governments, Software Technology Park (STPI) and NASSCOM for their continued support.

For and on behalf of the Board

Place : Bangalore M.R. Vikram Rabindra Srikantan

Date : 11th May, 2013 Chairman Managing Director


Mar 31, 2012

The are pleased to present the 20th Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2012.

1. Financial Results

(Rs. In lakhs) 2011-1012 2010-11

Income from software services and products 7114.17 6232.74

Software development expenses 5638.06 4904.34

Gross Profit 1476.11 1328.40

Administrative expenses 401.23 327.73

Operating Profit before Interest 1074.88 1000.67

Depreciation & Tax (EBIDTA)

Depreciation 71.87 61.00

Interest 178.60 146.24

Other income 178.14 40.17

Profit/-Loss before Tax (EBT) 1002.55 833.60

Provision for Tax 272.26 166.82

Deferred Tax Income/-Expense 2.75 14.83

Net Profit /-Loss (PAT) 727.54 651.94

Profit & Loss Balance brought forward 985.23 549.89

Amount available for appropriation 1712.77 1201.84

Dividend 125.00 100.00

Dividend Tax 20.27 16.61

Transfer to General Reserve 300.00 100.00

Balance in Profit & Loss A/c 1267.49 985.23

2. Results of Operation

Considering the uncertain global economic environment the performance of the company during 2011-2012 has been very gratifying with a consolidate revenue growth of 30% Year-on-Year.

On a standalone basis the company registered a total revenue of Rs.7114.17 lakhs for the year ended 31st March 2012,a growth of 14.14% over the same period the previous year. Domestic sales was Rs.3372.34 lakhs while Export sales was Rs.3741.83 lakhs an increase by 34.50% to that of the previous year. EBIDTA was at Rs.1074.88 lakhs while Profit after tax increased by 11.59 % to Rs. 727.53 lakhs.

On a Consolidated basis the company registered a total revenue of Rs.14557.00.lakhs for the year ended 31st March 2012,a growth of 30 % over the same period the previous year. EBIDTA was at Rs.1721.41 lakhs while Profit after tax increased by 83.90% to Rs.1154.66 lakhs.

3. Dividend

Based on the Company's performance, the Directors are pleased to recommend for approval of the members a dividend of Rs. 2.50 per equity share of Rs 10/-each for the financial year 2011-2012. The total dividend amount paid out if approved by members will be Rs.125 lakhs while Rs. 20.27 lakhs will be paid by the company towards dividend tax and surcharge thereon.

The dividend payout for the year under review has been formulated in accordance with the Company's 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.

4. Transfer to Reserves

The company proposes to transfer Rs.300.00 lakhs to General Reserve out of the amount available for appropriations and an amount of Rs. 1267.49 lakhs is proposed to be retained in the Profit & Loss Account.

5. Subsidiaries

Advanced Synergic Pte Ltd - achieved a gross revenue of Rs. 3337.65 lakhs for the year ended 31st March, 2012 as against Rs. 1628.01 lakhs for the same period last year, a growth of 105%. The Company registered a pre tax profit of Rs 412.82 lakhs for the year under review.

Pinnacle Talent Inc, USA- achieved a gross revenue of Rs.2040.45 lakhs and a pre tax profit of Rs.82.08 lakhs for the year ended 31st March 2012.

ESR Associates Inc,. USA - achieved a gross revenue of Rs 954.47 lakhs and a pre tax loss of Rs.46.08 lakhs for the year ended 31st March, 2012.

Abacus Business Solutions Inc- achieved a gross revenue of Rs. 5160.91 lakhs for the period ended 31st March, 2012 and registered a pre tax profit of Rs.66.14 lakhs for the above said period.

In accordance with the general circular No.2/2011 dt. 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

6. Future Outlook

The Global Economic Trend is up against strong headwinds this year and may slow down the growth, decision and spending process. While this would not lead to a recessionary outlook, it will be a challenge to meet the client & market expectations without much increase in the budgets. One of the ways to address this is to provide value based solutions to the customers and thereby provide a platform to innovate in better processes and products. With such an approach, the IT industry, which will be the driver for value based solutions, can consolidate its relationships with the customer on a sustained basis.

ASM will leverage this phase in consolidating and growing the organization by offering more services to the existing clients across other geographies and new client acquisitions. This phase will also set a platform to have more long term strategic partnerships with the customers moving up the value chain from project mode and center of excellence.

In view of meeting the global customer's current and future requirements ASM has embarked on a set of initiatives to meet the changing demands. One of the key initiatives is the creation of ARISE (ASM Research and Innovation Step for Excellence) with a mission to creation of New Products, Processes for long term growth and sustenance.

The existing clients will be offered cross solutions across various technologies thus moving from a Technology Competency to Industry Vertical Specialization relationship thus aligning more deeply with the Client's business. This model will be extended to the New Clients as the relationship progresses.

New client acquisitions will be through addition of specialized sales and delivery professionals across geographies, through new company acquisitions and specializations in more Industry Verticals which offer high growth.

Geographical Areas of Operation

The company has increased its presence in US to 4 offices, apart from India, Singapore and UK.

Expansion Areas

More Industry Specific Applications

ASM has embarked on deploying multi-solutions for the Industry Specific needs to address the Enterprise Solutions, Engineering and Technology Solutions. The focused sectors being Hi - Tech , Consumer Products , Process Industry, Clean Power Industry and Services Industry.

Paradigm Change in the way the Global Markets communicate

- Enterprise Mobility Solution: Enterprises are looking at various ways to meet their customer's needs and excel in operations leading to higher productivity. With growing deep penetration and adaptation of the mobile devices, ASM is working with customers in various Mobile Applications for the Enterprise, in a secure environment, which will empower them and their customers on near real time basis in achieving their objectives.

- Cloud Computing : ASM is working on cloud computing, which will be an inclusive solution program and change the way the Industries / Business communicate with their internal and external stakeholders across multiple geographies. This solution will further be refined for Specialized Industry Verticals.

Additional offerings to Enterprise Applications

- Development of Next Generation Products: ASM is a partner of choice for Co- Development of Products for the Fortune 500 Companies. The products under development are in the Integrated Enterprise Applications and Social Network Solutions for the Enterprise.

- Development of Adaptors for Enterprise Solutions: With diverse applications used by various clients based on their business needs, ASM has embarked on Development of Adaptors in partnership with ERP ISVs ( Independent Software Vendors) which will seamlessly integrate multiple Enterprise Applications.

7. Corporate Social Responsibility

An essential component of our Corporate Social Responsibility is to care for the community. In recognizing the imperative need the company has continued its contribution for the year 2011-12 by donating a sum of Rs.1.41 lakhs to the Akshaya Patra Foundation (ISCKON) towards providing Free Midday Meal for under privileged children in School, Rs. 1.00 lakhs to Agastya International Foundation a Bangalore-based education trust seeking to transform and stimulate the thinking of rural children and teachers ,Rs.0.35 lakhs to the Bale Mane Trust , which provides shelter and education to girls between the age of 6 and 18 and Rs. 0.24.lakhs to the SOS villages of India which helps build families for children in need and enables them shape their own futures.

8. Management Discussion and Analysis Report

The Report on Management's Discussion and Analysis covering matters listed inter alia in Clause 49 of the Listing Agreement for the year under review is attached to this Report.

9. Directors Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act 1956, the Directors based on all representations received from the operating management confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards has been followed along with proper explanation relating to material departures:

2. The Company had selected the 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;

3. The Company had 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;

4. The annual accounts of the company are prepared on a going concern basis.

10. Corporate Governance Report

As required vide Clause 49 of the Listing Agreement , a Report on Corporate Governance is provided elsewhere in this Annual Report along with Auditor's Certificate on compliance thereof.

11. Secretarial Audit Report

As a measure of good corporate governance practice, the company appointed Mr. M.R. Gopinath, Practicing Company Secretary, to conduct Secretarial Audit of records and documents of the Company. The Secretarial Audit Report for the financial year ended March, 31st 2012, is provided elsewhere in the Annual Report. The Secretarial Audit Report confirms that the company has com- plied with all the applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreements with the Stock Exchanges and all the Regulations and Guidelines of the Securities and Exchange of India ( SEBI).

12. Directors

As per Article 131 of the Articles of Association of the company Prof.B.S. Sonde, Director, retires by rotation and is eligible for reappointment.

Brief profile of the Directors proposed for re-appointment/appointment is given after the Notice to the ensuing AGM.

13. Particulars of employees

Information as per Section 217 (2A) of the Companies Act 1956 read with Companies (Particulars of Employees) Rules, 1975- Expenditure on employees employed for the year/part of the year who were in receipt of remuneration which in the aggregate is not less than Rs. 5,00,000 per month is not applicable for the year 31st March 2012. This is in view of the Notification dated 31.3.2011by the Ministry of Corporate Affairs raising the limit of employee's salary to be disclosed in Directors Report. It is fur- ther clarified vide General Circular No.23/2011 dt. 3.5.2011 of the Ministry of Company Affairs that the above said notification is applicable to all Directors Report under Section 217 of the Companies Act 1956, approved by the Board on or after 1st of April, 2011, irrespective of the accounting year of the annual accounts being approved by the Board.

14. Conservation of energy, technology absorption:

The company's 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 during the year.

Foreign exchange earnings and outgo

During the year, the Foreign Exchange earned was Rs. 3741.83 lakhs and Foreign Exchange used was Rs 1006.61 lakhs.

15. Fixed Deposits

The Company has not accepted any deposits from the public during the year.

16. Auditors

M/s. Sudhakar Pai Associates, Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment. They have expressed their willingness to accept office if re-appointed and the company received certificate from them confirming that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such appointment, within the meaning of Sub-sections (3) and (4) of Section 226 of the Companies Act, 1956.

17. Acknowledgements

Your Directors take this opportunity to express their gratitude to

- Our esteemed customers, employees, shareholders, vendors, business partners, advisors and consultants for their unstinted support.

- State Bank of India, Overseas Branch, Bangalore, SBI Global Factors Ltd. Bangalore, Bank of Baroda, Bangalore, Indian Bank, Singapore, State Bank of India, Chicago and San Jose for their support and guidance

- Central & State Governments, Software Technology Park (STPI) and NASSCOM for their continued support.

For and on behalf of the Board

Place : Bangalore M.R. Vikram Rabindra Srikantan

Date : 11th May, 2012 Chairman Managing Director


Mar 31, 2010

We are pleased to present the 18th Annual Report together with the Audited Accounts of the Company for the year ended March 31,2010.

Financial Results (Rs.in millions)

2009-2010 2008-2009

Gross Revenue 427.92 462.30

Profit before Interest Depreciation &Tax (EBIDTA) 53.19 58.57

Other Income 2.50 2.15

Interest 11.47 11.75

Depreciation 3.00 2.80

Profit /-Loss before Tax (EBT) 41.22 46.17

Provision for Tax 8.22 7.13

Deferred Tax Income /-Expense (1.28) 1.26

Net Profit /-Loss (PAT) 34.28 37.78

Amount available for appropriation 67.00 43.58

Dividend 6.00 5.00

Dividend Tax 1.01 0.85

Transfer to General Reserve 5.00 5.00

Balance in Profit &Loss A/c 54.99 32.73

In the year under review the Company Registered a total revenue of Rs.427.92 million.Domestic-sales was Rs.261.69 million while Export sales was Rs.166.22 million an increase bv 26.62%to that of the previous year.EBIDTA was at Rs.53.19 million while Net Profit was Rs.34.28 million.

Dividend

In sustaining the Companys policy to reward shareholders, the Directors of the Company are pleased to recommend for approval of the members, a dividend of Rs. 1.20 per share (12% on the par value of Rs. 10/-) for the financial year 2009-10. The dividend ,if declared as above would involve an outflow of Rs.6.00 million towards dividend and Rs. 1.01 million towards dividend tax , resulting in a total outflow of Rs. 7.01 million.

Subsidiaries

Advanced Synergic Pte Ltd., - achieved a gross revenue of Rs. 106.57 million for the year ended 31st March, 2010 as against Rs. 95.44 million for the same period last year. The Company registered a pre tax profit of Rs. 1.24 million for the year under review .

Pinnacle Talent Inc, USA- achieved a gross revenue of Rs.257.77 million for the year ended 31st March 2010, as against Rs. 417.11 million for the same period last year. The Company registered a pre-tax profit of Rs. 1.48 million for the year under review.

ESR Associates Inc,. USA - achieved a gross revenue of Rs. 85.14 million for the year ended 31st March, 2010

The statement of Accounts of the Subsidiary Companies viz., M/s Pinnacle Talent Inc., USA , Advanced Synergic Pte Ltd. Singapore and Enterprise Software Resources Associates, Inc. for the year ended 31st March 2010 along with the Report of the Board of Directors thereon are attached as per the provisions of the Section 212 of the Companies Act 1956.

Future Outlook

With the global economy showing signs of recovery , the future looks set for a spring back to a reasonable growth and maturity in the coming years for the industry.

ASM will leverage this phase in consolidating and growing the relationship with the existing clients, delivering value and offering more services across geographies. Further, new client acquisition will be the thrust for this year. For ASM this is an opportunity to provide greater value to existing clients and add new clients with its global delivery model. ASM looks to garner more work from the US and other region markets by leveraging on the offshore work delivery and thereby reducing the Total Cost of Ownership and Operating Costs to the clients.

Geographical Areas of Operation

The Company continues to strengthen its market initiatives in India, Asia and US.

? Current Areas :

This year the Company has strengthened its core areas of

1. Enterprise Application - Packaged ERP implementation, Application Maintenance and Support (AMS), Database Support and Custom Enterprise Apps

2. Application Development Integration

3. Technology Service & Product Engineering Services - System Software, Embedded Software and Firmware.

4. Engineering Services

New offerings last year:

- Launched Industry Specific Solution for the Sugar Industry (ACMS) to run on any ERP ( SAP, Oracle eic)

- Launched an unique Remote Database Support Services (YoDBA.com) on "pay per incident / ticket model" addressing the mid and the small enterprises globally. This is supported by a dedicated 24X7 Offshore Support Center in India and connecting remotely to the client servers through secure connectivity thereby addressing issues like optimization, enhancing speed, data cleansing applying patches etc.

- Launched e-Learning tool (ePrism) for collaborative learning, creating client specific Knowledge Portal.

- Expanded the GRC initiatives (Governance Risk and Compliance) offerings - launched Digital Forensics offerings for the BFSI space

? Future Expansion Areas :

More Industry Specific ERP Applications :

The need to quickly deploy the ERP Solutions specifically designed for the different industry sectors is gaining momentum. ASM is addressing the needs of the Agriculture Based Industry, Process Industry, Consumer Products, Hi-Tech Industry and Services Industry. These Industry Specific solutions configured to the Global ERPs will ensure rapid implementation and the clients can reap the benefits of a integrated information system.

Additional offerings to Enterprise Applications:

Development of Adaptors for Enterprise Solutions: With diverse applications used by various clients based on their business needs, ASM has embarked on Development of Adaptors in partnership with ERP ISVs (Independent Software Vendors) which will seamlessly integrate multiple Enterprise Applications.

Business Intelligence and Data Warehousing: With large amount of data getting generated across enterprises, the need for providing meaning to the data is imperative. Hence a separate practice is built around market leading tools on the Business Intelligence and Data Warehousing.

Product Lifecycle Management (PLM): With new product development activities / initiatives across the world gaining high momentum, there is a need to provide scientific ways of managing the Product Lifecycle and the Company is moving towards building expertise and practice in providing PLM solutions tightly integrated with the Enterprise Applications.

Eco and Energy Initiatives: With a good awareness to conserve energy and to develop a green eco-system, ASM is building a vertical to address the energy conservation, monitoring and controlling software for the Enterprise. This would substantially benefit the customers with a high ROI and also champion the cause of the Corporate Social Responsibility.

Convergence Technologies: With good experience in both the Enterprise Applications and the Technology solutions, there is a great client need to converge on the two. In this regard, initiatives and expertise is being built for providing RFID (Radio Frequency Identification) mobility solutions for the Enterprise Applications for large Corporations.

Expand on the GRC initiatives - Digital Forensics offering currently for BFSI to be expanded to other industry verticals Retail, Brokerages, Manufacturing, HR.

Engagement Models

Various Client Engagement Models to meet the requirement of the sound delivery system with a distinct cost advantage has been effected. Blended Onsite - Offshore model, Offsite support and Development Center and Offshore Development Center (ODC) are the current trends which will continue with more volumes in the coming years.

Technology

The Company will continue to focus on Enterprise Applications, Engineering Services and Technology Solutions. The drive will be to develop more industry focused solutions for quick deployment of the applications.

Corporate Social Responsibility

An essential component of our Corporate Social Responsibility is to care for the community. In recognizing the imperative need the company has continued its contribution for the year 2009-10 by donating a sum of Rs. 1,25,000/- to the Akshaya Patra Foundation (ISCKON) towards providing Free Midday Meal for under privileged children in School, and also contributed a sum of Rs. 1,00,000/- towards Chief Ministers Flood Relief Fund- Listing Fees

The Annual Listing fees for the year under review has been paid to Bombay Stock Exchange Limited and Bangalore Stock Exchange Ltd ,where your Companys shares are listed.

Management Discussion and Analysis Report

The Report on Managements Discussion and Analysis covering matters listed inter alia in Clause 49 of the Listing Agreement for the year under review is attached to this Report.

Directors Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act 1956, the Directors based on all representations received from the operating management confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards has been followed along with proper explanation relating to material departures:

2. The Company had selected the 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;

3. The Company had 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;

4. The annual accounts of the company are prepared on a going concern basis.

Corporate Governance Report

As required vide Clause 49 of the Listing Agreement, a Report on Corporate Governance is provided elsewhere in this Annual Report along with Auditors Certificate on compliance thereof.

Statutory Compliances

Your company has continued to comply with the procedures of Software Technology Parks of India, NASSCOM and other statutory bodies. The licenses, approvals and clearances are current.

Directors

During the year Mr. M. R. Vikram was appointed as the Chairman of the Board.

Dr. R. P. Shenoy, Director, retires by rotation and is eligible for reappointment.

Brief profile of the Director proposed for re-appointment is given after the Notes of the Notice to the ensuing AGM.

Particulars of employees

Information as per Section 217 (2A) of the Companies Act 1956 read with Companies (Particulars of Employees) Rules, 1975, forming part of this report - Expenditure on employees employed for the year/part of the year who were in receipt of remuneration which in the aggregate is not less than Rs. 2,00,000 per month is give in an Annexure forming part of this report.,

Conservation of energy, technology absorption :

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 during the year.

Foreign exchange earnings and outgo

During the year, the Foreign Exchange earned was Rs 107.68 million and Foreign Exchange used was Rs 149.84 million.

Fixed Deposits

The Company has not accepted any deposits from the public during the year.

Auditors

M/s. Sudhakar Pai Associates, Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment. They have expressed their willingness to accept office if re-appointed and the company received certificate from them confirming that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such appointment, within the meaning of Sub-sections (3) and (4) of Section 226 of the Companies Act, 1956.

Acknowledgements

The Directors take this opportunity to express their gratitude to

# Our esteemed customers, employees, shareholders, vendors, business partners, advisors and consultants for their unstinted support.

# State Bank of India, Overseas Branch, Bangalore, SBI Global Factors Ltd. Bangalore ,SBI Chicago and Indian Bank, Singapore for their support and guidance

# Central & State Governments, Software Technology Park (STPI) and NASSCOM. for their continued support.



For and on behalf of the Board Place :Bangalore Date :29.05.2010 M.R.Vikram Chairman Rabindra Srikantan Managing Director

 
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