SLT SPEAK

Aequs Building Tomorrows Future

CONTENTS

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I wish you all a very happy and prosperous new year!As we begin 2018, we continue to experience an ever-changing global

aerospace marketplace. In September 2017, UTC (parent of UTAS) announced the purchase of Rockwell Collins for $30 billion, creating an aerospace giant with broad technical capabilities, and an extensive global supply chain. With our continually growing relationship with UTAS, this new combination could bring signifi cant new opportunities to Aequs’ doorstep. It is vital that we continue to meet our commitments to UTAS without fail.

A recent report from CBRE noted that India’s population is expected to grow by 1.5 percent annually, creating an additional demand for 10 million new jobs every year. The challenge of employing such large number of people cannot be undertaken without manufacturing playing a crucial role. We are uniquely positioned as a global manufacturing company to leverage this infl ux of workers and thereby contribute to “Make in India” success. Besides Aerospace, our company initiatives in Aequs Plastics business will also be an important part of this journey.

For Aequs, this “Make in India” journey must start here, close to home. By being a responsible corporate citizen in our local communities, we can positively infl uence the workforce of tomorrow. As part of our CSR (Corporate Social Responsibility) program, Aequs is supporting over 25 government schools and 6500 students in our region by initiating various projects in the domain of health & sanitation, science & education, and safety.

I strongly believe that 2018 will bring many more opportunities. I have confi dence that all Aequals can collectively take Aequs to newer heights.

India’s Manufacturing – Time for Growth is “Now”

VOLUME V - Q 3, FY’17

Aravind Melligeri, Chairman & CEO

Rajeev Kaul, Group CFO & Managing Director, India

Our people are the major driving force behind Aequs’ success and growth. Our achievements have pushed the industry to gain momentum, and has brought the Indian aerospace industry to light. Today we proudly say, that “every airliner has some part made in Belagavi.”

These achievements are the result of our consistency in approach, speed of execution and the right attitude as demonstrated by you all. As I always say, “success of an organization largely depends on how its employees practice and demonstrate their behavioral competencies, it outlines the desired organization’s character.”

This year, we will be completing 10 years as an organization. The initial years were focused on building a sustainable, profi table and globally competitive platform with higher supply chain effi ciency. The foundation that was laid needed to build comfort and confi dence with customers that our ecosystem is able to absorb and deliver large packages on a detailed part level. Today, we have built a legacy for the next level.

Our reputation for honesty and reliable business conduct is tested and proven in each business transaction we make. All of us who represent Aequs in any position or capacity must be personally committed to follow the letter and the spirit of our core values – Transparency, Trust and Respect. All Aequs leaders, including myself, have the additional responsibility of nurturing a culture in which compliance with our core values is constant and unwavering. It is, and must be, the way we work.

I once again wish you a very warm, healthy and prosperous 2018.

India’s Manufacturing – Time for Growth is “Now”

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Aequs bags Operational Excellence Awards @ UBS Business Transformation Summit ............. 2

AAM Receives AS9100 Rev. D Certification ............................ 2

Employee Testimonials ............ 2

Building Competitive Advantage through HR Innovation ................... 3-4

Disruption – The Only Way is... to Create the Future ......... 5-6

SAFRAN approves Aluminum Heat Treatment Line at SQuAD .............................. 7

AAIPL Begins Nose Cone Assembly .............................. 7

AAIPL Starts Supply of Skin Sub-Assemblies ......................7

State-of-the-Art NDT (Non Destructive Testing) Facilty at API .........................................7

Chinook’s ‘Long Bed’ Project Starts Operation at Aequs ..... 8

Learning & Development - Instilling Right Mindset .............. 8

Aequs Foundation .............. 9

Marketing @ Aequs .............. 9

Snippets of Aequs Values Film and Employee Testimonials Video ...................................10

Editorial Team:

Devjeet Majumdar

Biswajit Baruah

Kuldeep Rane

Sasmita Pattnaik

Dhaval Chitnis

Jeetinder Khubchandani

JUNE, 2017 2JANUARY, 2018

Aequs bags Operational Excellence Awards @ UBS Business Transformation Summit

Employee Testimonials

AAM Receives AS9100 Rev. D Certifi cation

Aequs Aero Machine (AAM) received AS9100 Rev. D/ ISO9001:2015 certifi cate in September 2017. AAM’s audit was conducted by The Registrar Company of Canada during July 25– 28, 2017. This was the 12th AS9100 audit performed at the Paris,

Texas facility since 2006 by TRC. AS9100D is the aerospace equivalent of ISO9001, with additional aerospace/space /defense requirements to supplement the ISO. AAM appreciates all the work carried out in order to achieve this certifi cation.

UBS Business Transformation Summit is premier knowledge-exchange platform where members of top management from various organizations participate to get insights on aspects of business strategies, operational excellence and understand key enablers for successful

business transformation. They also share ideas, innovations and solutions that helped achieve key business results in their respective organizations.

This year, for the fi rst time, Aequs Aerospace participated in this summit to understand the key trends across industries and share about the operational excellence initiatives taking place at Aequs. Mr. Radhakrishna V., General Manager, Operational Excellence, participated and presented the 3P-Lean journey across the various units at Aequs. Aequs was also awarded with ‘Operational Excellence Leader of the Year’ for signifi cant contribution towards these operational excellence initiatives in engineering industry sector.

“I have been with Aequs for over 11 years. It gives me immense pride that I am part of Aequs, an organization that provides opportunities to learn and share.”

Christy Lawson, Shipping, AAM

“I joined Aequs in May 2017 via the French VIE Program, and being a French citizen travelling to India for 12 months had its own challenges. I had the opportunity to discover a new culture and meet people. It has been a great learning experience for me and it would defi nitely help me in my career ahead.”

Theo Lafon, VIE Finance

“I have been with Aequs for nearly 6 years. I fi nd my work interesting and equally rewarding. It has been a great journey with Aequs and I wish to continue the same for future.”

Derrick Evans, Quality, AAM

SLT SPEAK

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COVER STORY

The evolution of human resource management as a function dates back to the industrial revolution era when factories established personnel departments to look into

wages and welfare of workers.To understand the evolution of Human Resource Management, one must fi rst understand its basis:

Origins of workforce management lie in the arrangements made for the welfare of apprentices working with the master craftsmen in the “Putting out system” that prevailed during the medieval ages. The industrial revolution that led to the establishment of factories displaced the “Putting out system.”

Aequs – Building Competitive Advantage through HR Innovation

Workers in the early factories faced long work hours under extremely unhygienic conditions and mostly lived in slums. This soon resulted in labor riots, the most famous being the Ludds riots of 1811 in Nottingham, England, precipitated by low wages. The government soon intervened to provide basic rights and protections for workers. The need to comply with such statutory regulations forced factory owners to set up a formal mechanism to look into workers’ wages and welfare, and redress other issues concerning labor. This led to the emergence of Personnel Management as a distinct profession.

Employee record keeping

Policy enforcement, recruitment, training, and wage administration and also implementing medical care, housing facilities etc..

Attempting to increase productivity through wage increases and training, and enforcement of standards.

Dealing with trade unions and trying to solve industrial disputes through collective bargaining.

Conducting performance appraisals or report card of past performance to determine pay and promotions.

The Personnel Management approach tried to convince workers of the business interests, and convince management of workers interest and social obligations.

The Traditional Human Resource Approach

The latter decades of the 20th century saw the winds of change w.r.t personnel management profession. Elton Mayo’s Hawthorne Studies overtook Taylor’s Scientifi c Management approach and established that the major drivers of productivity and motivation were non-monetary factors.

Soon the transition happened from the administrative and passive Personnel Management approach to a more

dynamic Human Resource Management approach. This new approach considered workers as valuable resources, a marked improvement from the earlier approach of considering them as mere cogs.

Human Resource management began to become an increasingly line management function.

The major changes in approach from Personnel Management to Human Resource Management manifested itself in many ways, among these:

The Personnel Management ApproachThe Personnel Management approach that remained in

vogue for much of the 20th Century remained administrative in nature. Arising out of the need to enforce statutory compliance, it was primarily concerned with:

4JANUARY, 2018

The recruitment and skill enhancement of the workforce having a direct bearing on organizational profi tability, efforts increased worker’s commitment and loyalty.

Motivation took the form of a challenging work environment, free holidays, fringe benefi ts etc., besides monetary incentives.

Training acquired a new “Training and Development” dimension with the focus on behavioral training to change attitudes and develop basic skills.

Wage and Salary Administration included introduction of performance related pay, employee stock options etc.

Performance appraisal systems inducted new techniques such as Management by Objectives, 360 degree appraisals etc.

The Strategic Human Resource Approach

The evolution of Human Resource Management took a new turn at the end of the century. Free market competition, proliferation of technology and knowledge-based industries raised the importance of human resources. It became the most critical function of an enterprise.

Abraham Joseph, Vice President - Global People Function

The workforce, hitherto considered as “resources,” now became “assets” and a valuable source of competitive advantage. The thrust of human resource management now lies in trying to align individual goals and objectives with corporate goals and objectives, and rather than enforce rules or dictate terms, act as a facilitator and promotes a participative approach.

Focus @ Aequs…Over the last 10 years,we are continuously striving to

build a robust HR platform and create competitive advantage through HR innovation. We are committed to bring incremental changes to the status quo that improve the lives of people at work enabling them to do their best.

We are aiding engaging experiences through various structured programs around the following to build a robust and competitive workforce.

COVER STORY

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Disruption – The Only Way is... to Create the Future

analysts, bankers and even the customer-facing staff. Banks

are shrinking because of mobile banking and automation of

payment. Block-chain and crypto currencies are transforming

the traditional methods of record-keeping and money. Apps

are communicating with each other to give solutions and best

value for money, and AI is doing predictive analysis.

The aerospace and defense (A&D) is staring at major

disruptive innovation that may change the entire course of the

industry. In the present age of technological transformation,

there’s absolutely no tolerance for mediocracy in business

performance. Artifi cial intelligence (AI), robotics, machine

learning, internet of things (IoT), digitization, big data,

and augmented reality are revolutionizing production,

distribution, consumption and innovation. It’s no longer the

trend just being competitive on effi ciency in business, now, it’s

about creating disruption and disruptive innovation. There’s

no place for complacency in business as disruptive innovation

is allowing competitors to emerge unseen, and change the

rules of the game. Some of the renowned companies such as

Xerox, Kodak, Nokia, Blackberry and others have paid severe

penalties for being not disruptive enough in business.

We’re here to put a dent in the universe. Otherwise why else even be here? said Steve Jobs, co-founder of Apple Inc. In today’s challenging and

competitive world one cannot afford to do same old things, make incremental variations and demonstrate “me-too”

attitude in business. The writing on the wall is clear – “innovate or perish,” and companies who are

ignoring this mantra is increasingly at risk of fading faster than ever before. In the

fi nancial sector, algorithms are replacing stock

t r a d e r s ,

SPECIAL FEATURE

6JANUARY, 2018

In aerospace and defense, disruptive innovation can come in the form of new product, technology, material or processes that can signifi cantly change performance or

effi ciency, or new business models or service offerings. In the ‘80s, Airbus disrupted product technology when the company introduced fl y-by-wire technology through the A320 instead of the heavy, mechanical fl ight control system. The disruptive innovation in aerospace and defense industry is occurring on multiple fronts – new players and ventures such as Space Exploration Technologies (SpaceX) are challenging legacy players in space transportation and satellites. The new technologies such as additive manufacturing and new materials with ultra-lightweight aircraft seats or tools are redefi ning the product segment.

In the age of disruptive innovation, the success mantra is to disrupt oneself before somebody disrupts the industry. The companies who have acknowledged the threat of disruption and remained subservient to the progression have thrived by disrupting themselves. International Business Machine

(IBM), a global technology leader transformed itself to a software and services’ company after it dropped its traditional hardware business. Aerospace and defense industry is also expected to undergo major transformation in the next 5 to 10 years, and navigating these changes won’t be easy. In a challenging business environment, some companies may decide to leave the marketplace entirely, however, companies with competency to identify important trends and perform on

them will discover incredible opportunities to succeed in aerospace and defense industry.

The only way is... to create the future.

Devjeet Majumdar, GM, Head Marketing

SPECIAL FEATURE

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AAIPL Starts Supply of Skin Sub-Assemblies

AAIPL Begins Nose Cone Assembly

State-of-the-Art NDT (Non Destructive Testing) Facilty at API

SAFRAN Approves Aluminum Heat Treatment Line at SQuAD

AAIPL has successfully commenced assembly of the Indian Space Research Organization’s (ISRO) “Nose Cone” assembly package operations. Over 350 detail parts have been used to build the

fi rst assembly package. The deliveries for the Nose Cone assembly package are expected to start from January 2019. AAIPL successfully sourced manufacturing of detail parts and fabrication of assembly jigs, successfully completing customer inspection in November 2017. ISRO awarded the Nose Cone assembly package to AAI in March last year.

API eestablished a new modernized state-of-the-art Non Destructive testing facility to enhance the capacity and capability. This facility is around 176 sq. meters having

5 different stations - penetrant station, water wash station, drier, developer station and inspection station. We feel it is one of the best in the industry today, amply of the requirements are tailor made to reduce the process ideal time. We are achieving the desired output per our calculations, this has decreased the throughput time from 30 minutes to 20 minutes resulting in increased productivity with continuous fl ow.

AAI has been awarded 18 various skin sub-assemblies for ISRO’s PSLV. The scope of work includes fabrication of detail parts, jigs and fi xtures, and fi nal assembly. The size of

sub-assemblies are just under 5 meters long requiring around 100 detail parts and 7 assembly jigs. The jigs were commissioned and approved by customer HAL-ASD and end customer ISRO. Deliveries will commence from Jan-2018.

In a major win, French multinational aerospace-component and defense company, SAFRAN, has approved the Aluminum heat treatment line at SQuAD Forging. The Aluminum

and Titanium heat treatment lines have also completed their NADCAP audits and certifi cation is awaited. In other updates, the industrialization of ENGINE rotating titanium forgings (Aeronamic) and aluminium forgings has also been successfully completed under the 10K tonne hydraulic press. SQuAD has now upgraded to AS 9100 RevD and ISO 9001–2015.

JUNE, 2017 8JANUARY, 2018

Learning & Development - Instilling Right Mindset

Boeing CH-47 Chinook’s ‘Long Bed’ Project Starts Operation at Aequs

Aequs partnered with Oscar Murphy-Life Strategists to nurture and balm the emotions of the workforce to achieve a healthy organizational culture. A 2-day

intensive intervention on “Provoking Leadership Mindset”

was conducted for managers in Aequs SEZ. Cell leaders and

supervisors in shop fl oor are the threads that hold and steer the

Machining of Fokker long bed components for Boeing CH-47 Chinook helicopter is underway at Aequs facility. This state-

of-the-art facility has enhanced Aequs’ capability to machine highly complex thin section long bed components up to 3 meters. The cell was set up using the “Production”, “Preparation” & “Process” (3P) tool considering suffi cient space for long bed machines, crane movements, material movement trolley, and space for off bed tombstone

organization towards achieving its vision, “Communicate to

Unite” and was addressed to fi rst batch of 25 participants. The

importance of hiring a right employee is a crucial business

decision. “Unmasking Attitudes at Interviews,” a 2-day

program was organized for managers to make right hiring

decisions.

SLT SPEAK

Aequs Foundation organized “Project Ignite,” a Life Skills and Career orientation workshop for 10th standard students of government schools that nearby

to the Aequs SEZ, in association with ‘Youth for Seva.’ In phase one, on 4 Dec 2017 teacher’s training workshop was organized at KHPS Narsingpur, titled as Journey from “Teacher to Guru.” The workshop concentrated to motivate teachers about their role and importance of their student’s life and future. Around 18 teachers from different schools participated in the workshop, which helped them to polish their teaching skills.

This quarter, Aequs brand got signifi cant traction in creating PR value. The Visibility Index (VI) recorded more than Rs. 18 million in value for Aequs Aerospace

coverage across local, national and international media, which takes to a fi gure of Rs 80 million till date (FY17).The ‘Aequs Values’ fi lm, with our chairman emphasizing

Marketing @ Aequs

In phase two, from 5 - 7 Dec 2017, the workshop was organized on Life Skills and Career Orientation at Aequs Fire Station. Around 60 selected students and 6 teachers from three high schools around Aequs SEZ participated in the workshop. Topics such as motivation, self-awareness, social responsibility, career orientation, and motivation for girl students for higher education were covered during the workshop. The employees of Aequs also participated in the workshop and shared their experience to motivate students.

Aequs Foundation – Serving Communities with Care

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the importance of Aequs’ core values, was released. ‘Employee Testimonial’ across units captured their views and association with Aequs in a fi lm for social media. Aequs New Year calendar captured notable milestones as we did in the past.

“Our Mission, Vision and Values are the DNA of Aequs .” – Aravind Melligeri, Chairman & CEO - Aequs

10JANUARY, 2018

Aequs Employees Testimonials AV

Aequs Values…Communication AV