Dear fellow Shareholders
It gives me great joy to write this very special letter to you. It was25 years ago in September 1994 that we raised our first invoice. It feels like it isonly very recently that I started the Company in the garage of my house that I stilllive-in and I cannot believe that we are at the historical milestone of 25 years. Thisyear we also reached another land mark and crossed consolidated revenue of '1000 Crores (including discontinued operations) & ' 500 Crores onStandalone basis.
I feel fortunate and blessed to be working with the amazingshareholders employees customers and partners which is the reason we are here today andcelebrating our 25th anniversary. From humble beginnings of manufacturingelectronic components to designing and developing today's complex electronic systems andsubsystems such as complex payloads for satellites control systems for missiles cockpitelectronics for civil and military aircraft and passenger information systems fortransport Centum has evolved as the leader in the ESDM sector in India. You would behappy to note that our Company from India has succeeded in leaving a deep imprint on theglobal electronics map a feat unthinkable a few years ago. The fact that we have achievedit in critical hi-tech sectors like space aerospace transportation industrial andmedical makes our accomplishment more commendable.
Long term vision well-defined strategies and impeccable execution havebeen the pillars driving the Centum's glorious story of 25 years.
Our strategic intent is to consolidate what has been achieved and driveprofitable growth. To achieve this objective we decided to move up the value chain andfocus on design develop and manufacture systems & subsystems and also move away fromthe component business. Towards this we have taken the following steps:
To strengthen our design development and technologicalcapabilities and also to increase the global footprint we acquired Adetel Group in Franceand Canada.
Created a world-class infrastructure at the Aerospace park inBengaluru to be able to handle the systems and subsystems of the future.
To bring more management focus to the above strategy we exitedthe component business of Frequency Control Products.
We are already seeing the benefit of this strategy and are working onmany opportunities in the systems and subsystems area. This year started on an auspiciousnote with the launch of EMISAT on April 1 2019 for which Centum designed engineered andmanufactured one of the most complex systems (payload) ever flown by ISRO. The otherdrivers for growth are clearly;
the proactive actions being taken by Government of India in the"Make in India" initiative
the on-going trade war between US and China wherein customersare looking to mitigate the risks of buying only from China and
our proactive actions to further increase the portfolio ofglobal customers by increasing investments in Sales & Marketing in Europe and NorthAmerica.
Considering the Orders on Hand and our confidence on the opportunitieswe are seeing we are planning an investment of ' 50 crores in the nexttwelve months. I urge you to read the Management Discussion & Analysis (Pages 18 to 24of this report) for a more detailed view of the markets and opportunities.
With the strategic intent of moving towards Industry 4.0 anddigitization of internal processes we have upgraded our ERP & implemented HRIS.
As you may be aware we had acquired a stressed asset in France whichwas making losses and I am happy to report that we have been able to turn it around andthe subsidiary is now breaking even. To improve the profitability further
we are investing in creating an India Design Center tospecifically support our subsidiaries in France and Canada.
One of the division has good potential in the future but needsinfusion of capital and will take some time to see profitability. Hence we have initiatedthe divestiture process of this division which will reflect in better profitability ofCentum Adetel Group.
One of our core values is being "Socially Responsible" andmuch before CSR was made mandatory we were actively engaged with the local communitiessuch as schools and hospitals focused on children. We continue to engage not just throughdonation of money but more importantly lot of our team members are actively involved inthese institutions.
A journey of 25 years wouldn't have been as exciting and accomplishingwithout the support and participation of all members of our leadership team andcolleagues JV partners customers vendors and friends from financial community. I feelhumbled to place on record our sincere appreciation and express my heartfelt thanks fortheir positive imprint on our journey.
Apparao V Mallavarapu