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 2017-18.
During the year under review your Company recorded Consolidated Net Revenue ofRs14084 million with Consolidated EBIDTA of Rs1324 million & Net Profit Before Taxof Rs73 million.
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 on the left shows the change in sales mix between the business segments ofHydraulics Automotive & Metallurgy and Aerospace & Defence. To achieve thistransformation your company had to re-train employees reconfigure existing manufacturingfacilities and establish a global footprint.
Today our sales outside India account for 73.5% of total turnover compared to only8.33% in 2007.
Your company is now an integral part of the global supply chain for leading companieslike Airbus Boeing Bell Helicopter Audi BMW Daimler Cummins John Deere Hyundai andHoneywell. Additionally we support India's major defence programs with specialisedproducts.
Dynamatic HydraulicsTM has become the world's leading producer of high pressureHydraulic Gear Pumps for agricultural tractors with end-to-end manufacturing capability inIndia and the UK. We are working closely with customers to develop other hydraulicproducts such as valves rock-shaft assemblies and power-steering pumps. By focussing onshare-of-wallet we have the opportunity to grow the hydraulic business many times over inthe coming decade. India is just entering a super-cycle of growth in infrastructure andthe need for Cast Iron Hydraulic Pumps and Valves is very large. Our backward integrationin iron casting gives us an edge over others especially during the crucial phase ofproduct development.
Dynamatic-Oldland AerospaceTM is now a Global Tier-1 Aerostructure producer for AirbusBoeing and Bell Helicopter and HAL. We produce flight critical products on a single-sourcebasis and have established a comprehensive risk mitigation system for our customers. Withadvanced AI and robotics at our Swindon and Bristol plants in the UK and artisanalcraftsmanship at our plants in Bangalore your company has developed a compellingBest-Value proposition. The company has expanded its capabilities on fighter aircraftsfrom control surfaces and wings to entire fuselage sections enabling it to build any partof the Fighter Aircraft for Make In India programs. Your company has developed aneco-system of qualified sub-suppliers who in turn are a force-multiplier. We arecontinuing to grow this business and see large opportunities here.
Dynamatic has been chosen as the supplier for Light Combat Aircraft TEJAS FrontFuselage assembly from HAL - LCA Division
Our Automotive and Metallurgy vertical consists of an advanced steel nickel and ironfoundry at Schwarzenberg Germany and iron and aluminium foundries in Chennai along witha machine shop. It also includes a captive windfarm in Coimbatore. Shareholders haverecently given the company permission to divest of its perennially loss-making aluminiumfoundry machine shop and windfarm which will free up capital for more productivepurposes. It will also enable your company to refocus the remaining metallurgicalcapabilities to support growth of its hydraulic division and to extend our German foundryinto the aerospace sector. JKM Ferrotech has seen a steep jump in demand following theboom in India's automotive sector and is expecting a smart turnaround during 2018.
Throughout the history of Dynamatic
Technologies Limited it has faced challenging times head on seeking to benefit fromthe opportunities that accompany environmental risk. It has done so by being open tochange evolving into something bigger and better each time. The leadership team atDynamatic is committed to securing the Company's market leadership technologicalcompetence and brand equity.
On behalf of our Board of Directors and Senior Management I thank you for yourcontinued support.
Chief Executive Officer & Managing Director