It is my privilege to extend a very warm welcome to you all for the 56thAnnual General Meeting of your Company.
I take this opportunity to share the performance highlights during the year and futureoutlook for the Company.
Financial and Performance Highlights of the Year
In 2018-19 we recorded the highest ever Turnover of Rs 19704.55 Crore which is a 7.8% increase from the previous year Rs 18283.86 Crore. The Profit Before Tax saw a growthof 12% from Rs 3239.85 Crore to Rs 3627.64 Crore while the Profit After Tax (PAT)increased by 14.8 % from Rs 1987.42 Crore to Rs 2282.44 Crore. Our Order Book positionstood at a healthy Rs 58588 Crore as on 31st March 2019.
We paid an Interim Dividend of Rs 19.80 per share of Rs 10 each (198 %) for theFinancial Year 2018-19 totalling to Rs 662.09 Crore excluding Dividend Distribution Taxof Rs 136.09 Crore.
Our focus on production continues and during the year 201819 your Company produced 41new Aircraft and Helicopters. Additionally we produced 102 New Engines and Accessories. Iam proud of our initiatives to indigenise production and become self-reliant as set outby the Make in India mandate.
Your Company has witnessed several significant achievements during the year few ofwhich are highlighted as under:
The LCATejas which is a single-seat single-engine aircraft successfullycompleted mid-air refuelling trial by Wet (actual) engagement on 10thSeptember 2018.
Astra Missile was successfully test fired by the IAF on 26thSeptember 2018.
The third Prototype (PT3) of the Light Utility Helicopter (LUH) made itssuccessful maiden flight on 14th December 2018.
The Initial Operational Clearance (IOC) of the LCH Army version Helicopter wasaccorded by CEMILAC on 15th February 2019.
The Final Operational Clearance (FOC) of the LCA aircraft was received on 20thFebruary 2019 from ADA.
We successfully accomplished 100 % running of HTFE-25 core-2 Engine with InletGuide Vane (IGV) modulation in March 2019.
As always new initiatives have been a part of our endeavours and this year too wehave pursued several of them:
During Aero India 2019 the Company had displayed the Naval Utility Helicopter(NUH) with Tail Boom Folding and Main Rotor folding as a Technology Demonstrator. The NUHis a version of the Advanced Light Helicopter (ALH) Dhruv customised to meet theoperational requirements of the Navy.
The Company also unveiled the Supersonic Omni Role Trainer Aircraft (SPORT)Simulator in Aero India 2019. We have been keen to launch the indigenous development ofSPORT (Aircraft) with 4+ generation or equivalent capabilities to bridge the gap in pilottraining to command front line fighters. The SPORT aircraft will be utilised for fightertraining beyond the Advanced Jet Training stage and before inducting pilots into a frontline fighter squadron.
Moll with the Government of Arunachal Pradesh was signed in November 2018 forthe deployment of Do-228 aircraft and ALH Dhruv Helicopter for inter and intra-Stateconnectivity.
Consortium Agreement was signed with Larsen & Toubro Ltd. (L&T) Mumbaion 7th December 2018 as industry- driven prime partners to ISRO towardsmanufacturing and delivery of the Launch Vehicles. The Company and L&T will supportISRO in the integration of Launch Vehicles as per their requirement.
We have been seeing a continued increase in passenger travel and demand increasein global military expenditure. This bodes well for the global aerospace and defenceindustry. The trend is likely to continue in the coming year also. In recent timesgeopolitical security threats have intensified global tensions leading to boost in defenceexpenditure by countries such as the USA China India and Japan.
By 2025 we expect India to be the third largest aviation market with a demandforecast for over 2000 new aircraft in the next two decades a majority of these beingsingleaisle planes.
The growth of India's defence sector is expected to continue supported by anincrease in India's defence budget for 2019-20 at 9.31% over the previous year. The fundallocation for defence expenditure stands at Rs 305296 Crore. The increase in budget istowards modernising the Armed Forces to strengthen their position for better managing thegeo-political tension and potential security threats. Over the years our Government hasundertaken various initiatives to improve the business environment with policy reforms toprovide the required boost to the Indian Aerospace & Defence Industry. We can expectmore foreign investment and an increase in export opportunity.
Considering the changing economic and business environment the Company hasformulated strategies that are aligned to the Government's initiatives and market trend.We are implementing them to maximise the benefits for the Company and to support thedevelopment of Indian Aerospace and Defence Manufacturing Industry.
Research and Development (R&D)
During the year the Company continued to focus its efforts towards development of newplatform technology and activities to enhance its capability with a view to bringtechnological superiority to its products and in order to cope with the futuretechnological challenges. Towards the progress of the R&D efforts the Company hasincurred a total expenditure of Rs 1464.40 Crore for the year 2018-19 which is 7.43 % ofthe Turnover. Further an amount of Rs 214.88 Crore has been transferred to the R&Dreserve during the year.
The Company is complying with the Guidelines on Corporate Governance framed by theDepartment of Public Enterprises (DPE) and SEBI Listing Regulations. The Company hasestablished Systems and Procedures to ensure that its Board of Directors is well informedabout the Policies of the Company to enable them to discharge their responsibilities andto enhance the overall value of all stakeholders. We are constantly reviewing the Policiesand Procedures of the Company and updating them to ensure transparency in all aspects ofthe Company's working.
Corporate Social Responsibility and Sustainability Development
As always your Company is committed to social responsibility. We have undertakenvarious programmes and projects towards integrating our social and business goals and ina sustainable manner. During the year an amount of Rs 72.46 Crore has been spent on CSRactivities.
We continue and will continue to pursue global standards and I am confident that theCompany will achieve many milestones. We hope to attain all round success with thecontinued support and guidance of all our stakeholders.
I take this opportunity to extend my sincere gratitude to the Department of DefenceProduction the Defence Acquisition Council Defence Finance Department of Civil Aviationand our valuable customers viz. the Indian Air Force Army Navy Coast Guard BorderSecurity Force ISRO and other Global Aviation Companies.
I also thank DGAQA CEMILAC Principal Controller of Defence Accounts PrincipalDirector of Commercial Audit C&AG Statutory & Branch Auditors Bankers LegalAdvisors Collaborators Suppliers Shareholders and other Agencies and acknowledge theircontributions in our achievements.
I am grateful to my colleagues on the Board for their valuable guidance andacknowledge the immense contribution and dedication of the employees of the Company at alllevels.
|Place : Bengaluru ||R. Madhavan |
|Date : 29th July 2019 ||Chairman & Managing Director |