Dear Fellow Shareholder
On behalf of the Board of Directors of Dynamatic Technologies Limited and itssubsidiaries I take pleasure in presenting you with Audited Financial Statements for theyear 2018-19.
During the year under review your Company recorded Consolidated Net Revenue of &$2352;15003million with Consolidated EBIDTA of &$2352;1752 million & Profit Before Tax of &$2352;537million.
A decade ago your company ventured outside India for the first time with theacquisition of manufacturing facilities in Swindon UK. This was followed over the nextfew years with investments in Bristol UK and Schwarzenberg Germany and theestablishment of a marketing and service office in Milwaukee USA. In addition we havesuccessfully established design and engineering capabilities which are spread out acrossthe Organisation.
Till then your company was a small domestic player producing high precision parts fortractors and passenger cars. We also had a modest presence in India's nascentprivate-sector aerospace industry.
With shareholder consensus we started to focus on transforming the company into aglobal supplier of highly engineered products for the world's most respected companies. Aspecial thrust was reserved for growth into the Aerospace and Defence Sector.
The graph (Graphic A) shows the change in sales mix between the businesssegments of Automotive & Metallurgy Aerospace & Defence and Hydraulics. Toachieve this transformation your company had to re-train employees reconfigure existingmanufacturing facilities and establish a global footprint.
Today our current year sales outside India account for 73% of total turnover comparedto 8% in 2007.
Your Company has been a supplier of critical parts to leading automotive companies fromwhom it has absorbed global best practices such as Lean 6 Sigma Kaizen and APQPmethodology for the past three decades. These practices are slowly finding their way intothe aerospace industry and Dynamatic-Oldland Aerospace with mature capabilities hasbeen able to successfully deploy these into its new programs with Airbus Boeing Bell andHAL.
During the year under consideration your Company was recognised by its customers forexcellence in new product development industrialization engineering and quality systems.
Dynamatic-Oldland Aerospace worked closely with Airbus and Spirit AeroSystems indeveloping a Monolithic Evolution of the A320 Flap-Track-Beam where the number of partswould go down from over 200 to under 20 per assembly.
This is a significant achievement and positions Dynamatic as an elite supplier capableof engineering new iterations of flight-critical class-1 aerostructures for global OEMs.Moreover it increases your Company's work-share per aircraft as we will be machining100% of these monolithic parts in-house. Dynamatic is sole supplier worldwide for AirbusA318 A319 A320 and A321 Flap-Track-Beam Assemblies.
Your Company delivered the 100th Aircraft shipset of Airbus A330 Flap-Track-BeamAssemblies (opposite page) from it's new facility at Dynamatic Aerotropolis(adjacent to Bengaluru International Airport). We are now the sole supplier to Airbus onthe A330 program as well delivering products with Zero Concession and at 6 Sigma Qualitylevels.
Your Company has also continued its successful manufacturing programs for BoeingDefense Systems including the Main Pylon and Ramp for the CH-47 Chinook and Power andMission Cabinets for P-8 Poseidon as a global sole supplier. We recently signed a 5-yearcontract extension for the Chinook program.
Your Company remains a major partner in India's Defence Production. As we enter thesunset years of Sukhoi-30 MKI production we start anew with a production ramp-up of theMain Fuselage for HAL's TEJAS Light Combat Aircraft (LCA)
The global aerospace industry is facing an acute shortage of certified castings andforgings a trend which will continue for at least a decade. Your Company owns one of theworld's finest Automotive foundries and currently produces complex castings for BMWAudi Daimler Porsche and Maserati. Our customers have expressed enthusiasm at theprospect of developing aerospace-grade casting and forging capability in Germany and withour experience in converting automotive facilities and retraining employees we havestarted the process of changing Erla into an aerospace supplier.
Dynamatic HydraulicsTM is the world's leading producer of high pressure Hydraulic GearPumps for agricultural tractors with end-to-end manufacturing capability in India and theUK. We are working closely with customers to develop other hydraulic products such asvalves rock-shaft assemblies and power-steering pumps. By focussing on share-of-walletwe have the opportunity to grow the hydraulic business many times over in the comingdecade. India is just entering a super-cycle of growth in infrastructure and the need forCast Iron Hydraulic Pumps and Valves is very large. Our backward integration in ironcasting gives us an edge over others especially during the crucial phase of productdevelopment.
During the year under review your Company divested off it's loss-making JKM Automotivedivision in Chennai. In addition to reducing drag on profit margins this event alsoreduced capital employed in the business.
The process of shrinking capital employed (and debt) along with a focus on highervalue-added sales will continue. We have already announced monetisation plans for otherassets. These are well under way and will optimize shareholder value in the near future.
Transforming a complex global business is truly difficult and I thank you for yourpatience. The mix of sales by business segments and by geography is now visible and ourcustomers are excited with the capabilities built up.
The leadership team at Dynamatic is committed to securing the Company's marketleadership technological competence and brand equity. On behalf of our Board of Directorsand Senior Management I thank you for your continued support.
Chief Executive Officer & Managing Director