AXISCADES has emerged as a strategic product engineering partner to some of the world'slargest companies and OEMs which include Fortune 500 companies. This manifests ourgrowing competencies and readiness to provide next- generation digital engineeringservices. Your Company is now pushing its boundaries and looking towards opportunities inthe era of Industry 4.0. Assisting us in this journey will be Mr. Mritunjay Singh whotook over the helm as the CEO and ED of the Company from January 2018. His decades richexperience and proven record of taking customer-centric technology companies to the nextlevel of growth will be crucial in making AXISCADES a bigger and stronger company.
Review of the year gone by
Our revenue from operations for the year increased by 6.7% to ' 5192 million ascompared to Rs. 4868 million in FY 201617. This was primarily driven by the acquisitionof Mistral Solutions in December 2017 the full impact of which will be reflected in thenext fiscal year. However a one-off event to the tune of Rs. 128 million towardsprovisioning of receivables from two start-up companies in the US and an increase in costdue to organisational restructuring impacted our profitability. Our operating incomedeclined by 38.8% to Rs. 327 million with a margin of 6.1% as compared to 10.6% in theprevious year. These were just temporary blips and the important thing is we have alreadytaken cost reduction initiatives.
We continue to expand our operations globally. We expanded our footprints in EuropeNorth America and the Asia-Pacific in aerospace business. We opened an office inColumbus Indiana in USA and in Asia-Pacific region we signed an engineering servicescontract with Chinese subsidiary of European Aerospace Company.
During the year we witnessed significant traction in our business as well. We wereselected as a supplier across divisions for a Fortune 500 energy company a global partnerfor a large European defence player and as the main supplier to re-engineer andmanufacture critical parts for a global automotive OEM. Two new customers were added inthe medical and semiconductor segment.
In the energy vertical we expanded scope from wind to conventional and nuclear energyadding a large global OEM. While in product lifecycle management we won our first orderfrom a US-based customs air conditioning OEM.
We will focus on extending service offerings to newer areas like Product Life CycleManagement forming alliances with innovative companies to multiply competencies andenhancing defence business to capitalise on the offset opportunity.
The defence business saw positive momentum with multiple domestic contracts gettinginto production stage across various labs. Our pilot with a North American OEM on vehicleautomation facilitated in enhancing our embedded and electronics capabilities.
Evolving amidst mega industry trends
The industry we operate in is witnessing an interesting evolution and three megatrendsare emerging which will create new opportunities. One the rising use of digitaltechnology is leading to a significant change in manufacturing product creation andaftermarket mechanism. It is ultimately revolutionising the way products are madeconsumed and serviced. Two massive amounts of data and information is becoming readilyavailable unfolding an entirely new dimension to meaningfully consuming them. And threeIndia's rising prominence as an economic powerhouse is creating an urgent need tostrengthen defence which the Government intends to achieve through its push for Make inIndia and indigenising defence technologies. This is creating tremendous marketopportunity for being Offset partners and building products in-house.
While these trends are reshaping the industry we at AXISCADES have envisioned our wayforward to create more opportunities. We will focus on extending service offerings tonewer areas like PLM (Product Life Cycle Management) forming alliances with innovativecompanies to multiply competencies and enhancing defence business to capitalise on theoffset opportunity. We have engaged the entire leadership team and defined key metrics toensure the success of this transformational journey. It will be important to be innovativein approach strengthen capabilities around software embedded in products and tactfullyextend presence to newer sectors and geographies that offers growth.
Defence I believe will be an area where we must think long-term. And for this wehave acquired Mistral Solutions and allied with AERACCESS and French-based SIDES all ofwhich have diverse competencies in the defence and aerospace. These will enable us toaddress large defence business opportunities in India and with global OEMs and takeadvantage of Government's Make in India initiative. It will position us as a significantplayer in the defence offset and digital technologies.
We have formed a joint venture (JV) with Assystem Engineering and Operations ServicesSAS (France) to collaborate in the energy and nuclear space. This JV is modelled on ourearlier partnership that was formed to cater Airbus Group's requirements. Our earlieracquisition of ACATL had helped us build capability around electronics and simulationsoftware.
We will continue to look for inorganic growth opportunities focussed on acquiring nichetechnologies or customers that add value to our product solution portfolio. This willstrengthen our position as one of the leading Products and Engineering Solutions Company.
I believe this is an exciting time to be in business. While we have envisioned a greatfuture by building comprehensive strategies to deliver in this new ecosystem it will beimportant to remain agile and keep moving up the learning curve to ensure its success.
Globally the rising protectionist and nationalist stances are posing challengesgiving way to non-commercial trade barriers. This has necessitated the adoption of along-term strategy. In line with this thought our focus will be on creating a differentjob profile where people would train machines and ensure more local resources are hired.
Looking forward to a better tomorrow I thank each stakeholder for continued support. Iwould like to thank our commercial partners the Board of Directors and the Companymanagement for their continued guidance and support that has helped us move ahead andembrace transformation that is continuous and consistent our employees who with theirtalent and skills have facilitated in strengthening our brand. The future is bright and wewill continue to build value for each stakeholder.
Dr. Vivek Mansingh