ANNUAL REPORT 2019-20 Things do not change; we change. - Henry David Thoreau Dear Fellow Shareholder, On behalf of the Board of Directors of Dynamatic Technologies Limited and its subsidiaries, I take pleasure in presenting you with Audited Financial Statements for the year 2019-20. During the year under review, your Company recorded Consolidated Net Revenue of `13,212 million with Consolidated EBIDTA of `1,899 million & Profit After Tax of `298 million. UK During the past 15 years your BRISTOL Dynamatic-Oldland Aerospace®, Dynamatic Limited, UK Company has been globalising SWINDON Dynamatic Hydraulics®, Dynamatic Limited, UK its footprint with manufacturing Dynamatic-Oldland Aerospace®, Dynamatic Limited, UK facilities in India, Germany, UK and GERMANY USA. Our manufacturing capacity ERLA Eisenwerk Erla GmbH is augmented with strong design and engineering capabilities USA MILWAUKEE which are spread out across the Dynamatic US LLC SINGAPORE Organisation. JKM Global PTE Limited Today we are a vertically- integrated global supplier of INDIA highly engineered products to CHENNAI JKM Ferrotech Limited the world’s most respected COIMBATORE JKM Wind Farm, Dynamatic Technologies Ltd companies, and are focussing BANGALORE Dynamatic Hydraulics®, Dynamatic on profitable growth into the Technologies Ltd. Dynamatic Homeland Security®, Dynamatic Technologies Ltd. Aerospace and Defence Sector. Dynamatic-Oldland Aerospace®, Dynamatic Technologies Ltd. Dynamatic MedicalTM, Dynamatic Technologies Ltd. JKM Research Farm Limited The graph (below) shows the NASIK Dynamatic-Oldland Aerospace®, Dynamatic change in sales mix between the Technologies Ltd. business segments of Automotive FY’18 FY’20 & Metallurgy, Aerospace & Defence and Hydraulics. To achieve this transformation, your company had to re-train 26% 38% employees, re-configure existing 40% 52% manufacturing facilities and establish a global footprint. 22% 22% Automotive Hydraulics Aerospace & Defence Opposite page pic - Business Continuity : Production in full swing at Bangalore during the India Lockdown 1.0 During the year under review Dynamatic- Oldland Aerospace® delivered a record volume of aerostructures to its customers Airbus, Boeing, Bell and HAL, reaching key milestones with each one of them. The Robotic line for new Airbus A320 Monolithic FTBs has been commissioned at our Swindon facility and will be utilised for the entire life of the aircraft program. Dynamatic is now a sole supplier of Flap- Track-Beam Assemblies for every Airbus A318, Dynamatic delivered 125th Assembly of Boeing Chinook CH-47 in presence A319, A320, A321, A330, which account for around of Andrew Builta - VP, Chinook Programs, Suzanne Hoffman - Senior Director, BDS Supplier Management, Ashwani Bhargava - Director, India Supply Chain, 50% of all commercial jetliners produced globally. Mohandas Pillai - Senior Manager & Venkat Kandi - Supplier Delivery & Performance along with Dynamatic Senior Executives. Production for both Boeing P8 and Chinook-CH47 remained robust given the rising global investment in defence platforms. Based on excellent quality performance Boeing has started looking at sourcing other variants and configurations for their global customer base. Your Company is also trying to increase the value added content on the current products. All great changes are Dynamatic completed ‘5000th Aircraft set’ of Airbus Single Aisle Flap- Track-Beam Assemblies and delivered to Airbus in presence of Jose Maria preceded by chaos. Trujillano, Head Wing Procurement, Steve Archer, Head of Wing Leading and Trailing Edge Procurement - Deepak Chopra COVID-19 has had a destructive effect on the global economy, especially with regard to international air travel, which in turn has adversely impacted commercial jetliner sales. Your Company has always hedged its bets with almost half it’s aerostructures being produced for the defence sector. We have very rapidly switched production capabilities towards the defence market with new orders and deliveries. The deep industrial capabilities we have built-up over decades to deliver complete manufacturing solutions are an enabler for Atmanirbhar Bharat. Induction of Dassault Rafale fighter jets will provide the Indian Airforce with potent multi-role, multi-mission defence capabilities. Dynamatic is building high precision assembly and conformance jigs for Dassault under the Make-in-India initiative. Your Company is the sole supplier for major Dynamatic Hydraulics® is the world’s leading assemblies for Bell 407 Fuselage. Demand remains producer of high pressure Hydraulic Gear Pumps for stable as this helicopter has multi-role capabilities; agricultural tractors with end-to-end manufacturing Utility, Corporate, Medevac, Police, Fire-Fighting, capability in India and the UK. The Government Military and Oil Services. of India has taken multiple steps to stimulate the economy post COVID-19 with specific focus on rural sector, farming sector and infrastructure growth. Your company has consolidated its Indian market share for Hydraulic Pumps on Agricultural tractors to more than 75% and has bagged new contracts with global tractor manufacturers setting up JVs in India like ITL-Yanmar, Mahindra Mitsubishi, Escorts Kubota, Tafe Iseki. These JVs will be catering to Dynamatic delivered the 100th Set of Major Assemblies for Bell 407 the requirement of tractors in India and the global helicopter to Senior Bell Executives Mike Shaw, Vice President Quality, Steve Dyer, Vice President Engineering Support and Dynamatic Senior market. Executives. On 24th March, 2020 India went into Lockdown 1.0 to control COVID-19. With Aerospace & Defence classified as critical and essential infrastructure in North America and Europe, there was a risk that your Company would shut down their production lines. We are grateful to the Governments of Karnataka and Tamil Nadu for declaring Aerospace & Defence as essential services, thereby enabling continuity of Yanmar will manufacture the Solis Tractor in partnership with International Tractors Limited. Dynamatic has developed compact supply across our supply chain. Hydraulic Pumps and Hitch Control Valves for this tractor variant. Riding on its advanced engineering and development capabilities, your company has developed several new products like Power Steering Valves, Hitch Control Valves with zero leakage, Direction Control Valves and Electronic Rockshaft Assemblies. Some of these products were officially launched during the EXCON 2019 (picture above) and generated overwhelming response from potential customers from India and overseas. We are working closely with customers to develop All parts are made from medical-grade material, other hydraulic products such as valves, rock-shaft and our processes are fully compliant to ISO 13485 assemblies and power-steering pumps. By focusing standards. on share-of-wallet, we have the opportunity to grow the hydraulic business many times over in the coming decade. India is just entering a super-cycle of growth in infrastructure, and the need for Cast Iron Hydraulic Pumps and Valves is very large. Our backward integration in iron casting gives us an edge over others, especially during the crucial phase of product development. PranaVentTM basic version PranaVentTM with remote monitoring with manometer & intervention made easy through DynaSenseTM wireless app As the pandemic hit India, we were concerned about how our country would cope with a large number of This product is the result of a confluence of corona virus patients, who needed critical care. engineering, medical science and entrepreneurship at Dynamatic Technologies Limited and represents a Quite apart from a lack of ventilators, large parts of pivot in your Company’s business towards developing rural India do not have trained medical staff, or even medical devices. In addition to the immediate electricity. So from the beginning, our mission was to humanitarian impulse, this segment has the potential develop a low-cost scalable solution, that would run to become a longer term business opportunity for your directly off an oxygen tank, much like what is used by Company. mountain climbers, divers and fighter pilots, to make medical care affordable for the common man. The leadership team at Dynamatic is committed to securing the Company’s market leadership, Our best engineers along with doctors and scientists technological competence and brand equity. worked long hours through the lockdown on On behalf of our Board of Directors and Senior developing the concept. The PranaVentTM took shape Management, I thank you for your continued from the drawing board to 3D printed prototypes in support. quick time. After extensive testing we developed tooling for mass production with an entire supply-chain ecosystem Udayant Malhoutra within a few kilometers from our facility. Our focus Chief Executive Officer & Managing Director has been scalability, should there be a sudden surge in demand. The greatest danger in times of turbulence is not the turbulence - it is to act with yesterday’s logic. - Peter Drucker Dynamatic MedicalTM Team involved in the development PranaVentTM Mechanical Resuscitator Sometimes even to live is an act of courage. COVID-19 - BUSINESS CONTINUITY - Seneca FEB 2020 MAR 2020 APR-MAY 2020 JUN-JUL 2020 AWARENESS MASS SCREENING BUSINESS CONTINUITY DURING PREPAREDNESS & LONG TERM Published Notices and Posters and awareness via all Dynamatic worked closely with the Government of LOCKDOWN PERIOD SUSTAINABILITY Social media and communication channels to bring in