Global economy
Overview: The global economy was estimated to have grown at a slower
3.2% in 2022, compared to 6% in 2021 (which was on a smaller base of 2020 on account of
the pandemic effect). The relatively slow global growth of 2022 was marked by the Russian
invasion of Ukraine, unprecedented inflation, pandemic-induced slowdown in China, higher
interest rates, global liquidity squeeze and quantitative tightening by the US Federal
Reserve.
The challenges of 2022 translated into moderated spending, disrupted
trade and increased energy costs. Global inflation was 8.8% in 2022, among the highest in
decades. US consumer prices increased about 6.5% in 2022, the highest in four decades. The
Federal Reserve raised its benchmark interest rate to its highest in 15 years. The result
is that the world ended in 2022 concerned that the following year would be slower.
Performance of major economies
United States: Reported GDP growth of 2.1% compared to 5.9% in 2021
China: GDP growth is expected to contract from 8% in 2021 to 3% in 2022.
United Kingdom: GDP is expected to grow 4.1% in 2022 compared to 7.6%
in 2021 Japan: Reported growth of 1.7% in 2022 compared to 1.6% in 2021 Germany: Reported
GDP growth of 1.8% compared to 2.6% in 2021 (Source: PWC report, EY report, IMF data, OECD
data) Outlook: The global economy is projected to grow a weak 2.9% in 2023, marked by
sustained Russia-Ukraine conflict and higher interest rates. Global inflation is projected
to be 6.5% in 2023 (Source: IMF). On the positive side, the reopening of Chinas
economy after the waning of the pandemic, the decline in the European energy crisis and
robust US consumption outlook (despite high inflation) remain positives. Interestingly,
even as the global economy is projected to grow less than 3% for five years, India and
China are likely to account for half the global growth in 2023 (IMF).
Indian economy
Overview: Even as the global conflict remained geographically distant
from India, ripples comprised increased oil import bills, inflation, cautious government
and a sluggish equity market. India reported an economic growth of 7.2% in FY 2022-
23. India emerged as the second fastest-growing G20 economy in FY
2022-23. India had retained its position as the fifth-largest global economy and was seen
as a principal driver of the global economy (with China).
Growth of the Indian economy
|
FY 20 |
FY 21 |
FY 22 |
FY23 |
| Real GDP growth(%) |
3.7 |
-6.6% |
8.7 |
7.2 |
Growth of the Indian economy quarter by quarter, FY 2022-23
|
Q1 |
Q2 |
Q3 |
Q4 |
|
FY23 |
FY23 |
FY23 |
FY23 |
| Real GDP growth (%) |
13.1 |
6.3 |
4.4 |
6.1 |
(Source: Budget FY24; Economy Projections, RBI projections)
Indias exports (merchandise and services) in April-February
2022-23 were estimated to have grown 16.18 percent over the same period of the previous
year. As Indias domestic demand remained steady amidst a global slowdown, imports in
April-February 2022-23 were estimated to have grown 19.93 percent over the corresponding
period of the previous year. Indias exports in FY2021-22 were $676 billion and
likely to achieve a record $750 bn in FY23.
Till Q3, FY23, Indias current account deficit, a crucial
indicator of the countrys balance of payments position, decreased to $18.2 billion,
or 2.2% of GDP from $22.2 billion (2.7% of GDP) a year ago. Indias fiscal deficit
was estimated in nominal terms at ~ Rs 17.55 lakh crore and 6.4% of GDP for the year
ending March 31, 2023.
Indias currency weakened from H75.91 to a US dollar to H82.34 as
on 31 March 2023 due to a stronger dollar and weaker current account deficit.
The countrys retail inflation, measured by the consumer price
index (CPI) eased to 5.66% in March 2023. Infiation data on the wholesale Price Index
(which calculates the overall prices of goods before selling at retail prices) eased to
4.73% during the period. In 2022, CPI hit its highest of 7.79% in April 2022; WPI reached
its highest of 15.88% in May 2022. India moved up in the Ease of Doing Business (EoDB)
rankings from 100th in 2017 to 63rd in 2022.
In 2022-23, total receipts (other than borrowings) were estimated at
6.5% higher than the Budget estimates. Tax-GDP ratio was estimated to have improved by
11.1 percent Y-o-Y in RE 2022-23. Per capita income almost doubled in nine years to Rs
172,000 during the year under review, a rise of 15.8 percent over the previous year.
Indias GDP per capita was 2,320 USD (March 2023), close to the magic figure of $2500
when consumption spikes across countries. Outlook: India is expected to grow 6.8% in
FY2024, catalysed by 35% capital expenditure growth by the government. The growth could
also be driven by broad-based credit expansion, better capacity utilisation and improving
trade deficits. Headline and core inflation rates could trend down. Private sector
investments could revive.
According to the World Bank April 2024 projections, Indias GDP is
projected to expand by 6.3 percent In FY24, supported by domestic demand and increased
public investment. Indias retail inflation rate could decline from 6.6 percent to
5.2 percent in FY24. The global landscape favours India: Europe is moving towards a
probable recession, the US economy is slowing, Chinas GDP growth forecast of 4.4% is
less than Indias GDP estimate of 6.8% and America and Europe are experiencing their
highest inflation in 40 years.
Indias production-linked incentive appeared to catalyse
downstream sectors. Infiation was steady. India was at the cusp of making significant
investments in renewable energy and other sectors and emerging as a suitable industrial
supplement to China. India was poised to outpace Germany and Japan and emerge as the
third-largest economy by the end of the decade.
Broad-based credit growth, improving capacity utilisation,
governments thrust on capital spending and infrastructure should bolster investment
activity. According to our surveys, manufacturing, services and infrastructure sector
firms are optimistic about the business outlook. The protracted geopolitical tensions,
tightening global financial conditions and slowing external demand are the downside risks.
Union Budget FY 2023-24 provisions
The Budget 2022-23 sought to lay the foundation for the future of the
Indian economy through projects like PM GatiShakti, Inclusive Development, Productivity
Enhancement & Investment, Sunrise Opportunities, Energy Transition and Climate Action,
as well as Financing of Investments. The capital expenditure of the Indian government
expanded 35.4% from H5.54 lakh crore to H7.50 lakh crore. An outlay of H5.25 lakh crore
was made to the Ministry of Defence (13.31% of the total Budget outlay). An announcement
of nearly H20,000 crores was made for the PM Gati Shakti National Master Plan to catalyse
the infrastructure sector. An expansion of 25,000 km was initiated for the national
highways network. An outlay of H1.97 lakh crore was announced for Production Linked
Incentive schemes across 13 sectors.
Global furniture market overview
The global furniture market is expected to grow at a CAGR of 3.76% from
2022-27 and reach USD 505.13 Bn in 2027 from USD 420 Bn in 2022.
This growth is attributed to the increasing demand for homes and rise
in disposable incomes, which is expected to enhance the demand for furniture. In addition
to this, companies have started re-opening offices which has further contributed to the
global demand.
The worldwide home furniture market size is expected to increase by USD
105.01 billion between 2022 and 2027, progressing at a CAGR of 5.34% during the period due
to the global increase in internet penetration which spurred the popularity of e-commerce.
A number of global entities have invested in their online channels on the back of the
pandemic, revolutionizing the furniture industry. The increasing number of online startups
for renting and retailing furniture is also expected to contribute to the growth of the
furniture.
The global office furniture industry was valued at approximately $60.8
billion in 2022 and is projected to grow to $77.4 billion by 2028, growing at 4.05%
annually from 2023 to 2028. The surge in new office constructions, expansion of IT parks
and commercial areas are major factors contributing to the global demand for office
furniture.
The furniture industry has seen substantial growth in Asia and North
America over the past ten years. Exports have increased in tandem with production and
imports have continued to rise, with the major importers being the United States, Germany,
France, United Kingdom and Canada.
In the United States, online furniture sales only make up a small
percentage of total sales. However, the pandemic resulted in a major increase in online
sales as a portion of the physical supply chain was disrupted.
The United States accounts for the largest share of the global
furniture market, estimated at USD 226.78 billion, followed by China and Germany followed
in second and third place, respectively, with revenues of 72.5 billion and 53.5 billion
dollars. (Source: Statista, Yahoo Finance, Globe News Wire, businesswire.in)
Indian furniture industry overview
The Indian furniture market was pegged at US$ 55 billion in 2020 and is
expected to grow at a CAGR of 12.91% between 2020-24.
The household furniture market has been thriving due to the growth of
the middle-class, increased disposable income and a rising number of urban homes. The need
for modern, adjustable furniture in urban areas, growing urbanization and the popularity
of hybrid sealing furniture have been key drivers in the Indian furniture market. By 2031,
it is estimated that 75 % of Indias population will be living in urban areas. The
trend towards online and mobile shopping is expected to further drive demand, along with
the tourism, hospitality and corporate sectors.
Indias first ever furniture park was inaugurated in Thoothukudi,
Tamil Nadu with 33 companies signing the Memorandum of Understanding(MoU) with H4,755
crore investment.
This park expects to address 70-80 per cent of the raw material demand
and effectively bring down production costs and enhance competitiveness. The first phase
of the park, with H1,500-1,800 crore investment, generating employment for 1.1-1.5 lakh
people, is expected to operational in the next four to five years, while the second phase
is expected to be operational in eight to ten years with H3,500 crore-4,500 crore
investment, generating employment for 3-3.50 lakh people. The Indian government has
recognized the furniture industry as a significant player in promoting ‘Make in
India products globally, with India emerging as one of the fastest growing economies
of the world. The government is planning to bring the furniture industry under the PLI
scheme, which is expected to boost further growth and play a vital role in India becoming
the worlds largest furniture consumer market by 2030.
(Source: ibef.org, Statista, The Hindu Businessline)
Global laminates market overview
The global decorative laminates market was US$ ~8 billion by revenue in
2021 and is expected to grow at a 4.55% CAGR to reach US$ ~10 billion in 2030. Decorative
laminates, which are especially designed laminated sheets used for furniture surfaces and
wall paneling, are growing in popularity due to their large variety, durability,
a_ordability, long shelf life and aesthetic appeal. The rising standards of consumer
living and growing demand for ready-to-assemble furniture and cabinets are driving the
growth of this market. Moreover, there has been a marked shift in consumer behavior who
are choosing quality over price sensitivity and are willing to pay extra bucks for.
Laminates are a cost-e_ective option as they are moisture-proof, abrasion- and
impact-resistant and require little to no maintenance.
Additionally, decorative laminates are widely used in various
commercial spaces such as hotels, hospitals, shopping malls, airports and educational
institutions due to their wide range of design options and versatility.
(Source: imarcgroup.com, Globalnewswire)
Global veneers market overview
Veneer is a durable and versatile material that can be used in numerous
ways to give a natural and aesthetically pleasing look to surfaces of furniture, cabinets
and walls. The market for decorative veneers reached a value of US$6,843 million in 2020
and is projected to reach US$7,545.8 million by 2027. The demand for decorative veneers is
on the rise due to several factors including their wide range of available options,
durability, and their eco-friendly nature as a sustainable alternative to hardwood. The
Asia-Pacific is expected to dominate the veneer market in the coming years with India
being at the forefront in terms of demand growth in residential, leisure parks, retail,
office etc.
In the construction industry, veneer sheets find extensive applications
for paneling, cladding, and furniture purposes. Therefore, traction in the construction
industry will directly harness the demand for veneers. The global construction industry
recorded a value of US$9.7 trillion in 2022, with a projected growth to US$13.9 trillion
by 2037. This growth is driven by prominent countries such as China, the US, and India,
among others.
(Source: marketwatch.com, Data Bridge, Oxford Economics)
Global engineered wooden flooring market
The global engineered wooden flooring market was valued at US$ 6681.9
million in 2020 and expected to grow to US$ 9355.6 million by 2026, growing at a CAGR of
4.9% during 2021-2026. This growth is driven by large collection, dimensional stability,
polished and attractive appearance, ease of installation and ability to with stand high
volumes of foot tra_c in various settings.
The demand for flooring products is primarily centered in countries
such as the US, Japan, China, the UK, Germany and France. The Asia-Pacific region is the
quickest growing segment, influenced by urbanization, real estate growth and the growing
demand for tropical wood flooring. There has been a rise in the usage of flooring products
in developing Asian economies like India, due to the traction from industrial and
residential sectors.
(Source: Mordor Intelligence, MarketWatch, globalnewswire)
Globalengineeredwoodendoorsmarket
Engineered doors are becoming increasingly popular worldwide, primarily
because they can be produced in large quantities with factory finishes in a short amount
of time. Additionally, they can be fabricated off-site and precisely machined to the
required specifications. The use of engineered wood in the manufacturing of doors is on
the rise, which is contributing to making home a_ordability, reconstruction, renovation
and remodeling of older buildings more accessible.
(Source: Coherentmarketinsights.in)
Indian market overview
Laminates
The Indian decorative laminates market is valued at 12,000 crore and is
growing attractively. This growth is due to factors such as increasing urbanization,
adoption of higher living standards and shifting preference for modern home furnishings.
The possibility of the government of India bringing the laminates sector under the PLI
scheme in the near future is further expected to contribute to its growth. (Source: The
Hindu Business Line)
Decorative veneers
Consumers are increasingly opting for decorative veneers due to their
durability, elegant finish and environmentally-friendly nature. sustainable nature. Going
forward, the demand for veneers is expected to be propelled by the increasing demand for
luxury homes, higher disposable income and the growth of upscale shopping malls, premium
retail stores, hotels and other establishments arising from the increasing pace of
urbanization.
(Source: imarcgroup.com, futuremarketinsights.com)
Flooring and doors
The market demand for engineered wood flooring and doors is projected
to grow due to their increasing popularity as an affordable alternative to hardwood
flooring. Engineered woods high durability and low maintenance requirements are also
significant factors contributing to its rising demand. Furthermore, the expanding
population and the growing need for housing are expected to drive the demand for wooden
flooring and doors even higher.
(source: grandviewresearch.com)
Growth drivers
Rising population: In April 2023, India has overtaken China as the
worlds most populous country with a population of 1.4286 billion. This is expected
to lead to a greater demand in the construction industry for the building of homes and
public infrastructure. Urbanisation: As of 2020, around one-third of Indias
population was likely living in cities. By 2031, 75% of Indias national income is
expected to come from cities.
Growing middle class income: India is expected to form 23% of the
global middle class, leading to an increase in households earning between USD10,000 and
USD50,000 per year, expanding the wallet share for spending on home or office interiors
Demographic dividend: In 2022, the average age of an Indian was 28.7
years. More than half of Indias population is under 25 years of age, fostering
demand for ready-made furniture compared to traditional carpentry
Rise in demand for houses: The Indian real estate market is expected to
reach a value of US$ 30 trillion by 2030. This will, in turn, drive the demand for Indian
furniture.
Medical tourism: The medical tourism sector is predicted to increase at
a CAGR of 21.1% from 2020-27 with a greater number of people coming into India from
foreign places to avail treatment of major diseases at a reasonable cost.
Hospitality sector demand: The travel market in India is projected to
reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20. International
tourist arrivals are expected to reach 30.5 million by 2028.
Traction in commercial space: Over 60 million square feet of office
space will be occupied in both metro and non-metro cities in 2023 with top occupants being
consulting, e-commerce, business process management and IT.
(Source: Population U, Business Standard, Indian Retailer, Statista,
India.com, Business Today.in)
Company overview
Greenlam Industries Limited is a comprehensive provider of surfacing
products and has become the largest producer of laminates in Asia and one of the top three
globally, as well as Indias leading decorative veneer brand. It is also the sole
manufacturer of engineered wooden flooring and the first organized manufacturer of
engineered wooden doors in India. With an annual production capacity of 19.2 million
sheets for laminates, 4.20 million square meters for decorative veneer, 1.00 million
square meters for engineered wooden flooring and 0.12 million doors and frames, the
company operates cutting-edge manufacturing facilities in Behror, Rajasthan Nalagarh,
Himachal Pradesh and Prantij, Gujarat. Greenlams products not only transform the
spaces but also improve lifestyles.
Laminates and allied segment
Manufacturing facilities: Behror, Rajasthan, Nalagarh, Himachal Pradesh
and Prantij, Gujarat Installed capacity: 19.02 million sheets per annum as on March 31,
2023 Leading brands: Greenlam, New Mika, Greenlam Clads and Greenlam Sturdo Production
during FY2022-23: 17.40 million sheets Production growth over FY 2021-22: 3.7% Capacity
utilisation: 99% Sales volume, FY2022-23: 17.03 million sheets Sales volume growth over
FY2021-22: 3.2%
Revenues, FY2022-23: H1677.7 crore
Segment contribution to total revenues, FY2022-23: 90.6% Revenue
growth, FY 2021-22: 18.6% 9000H cr, total size of the domestic market in India 3000H cr,
total exports from India 3000 Hcr, share of the unorganized market in India 6000H cr,
share of the organized market in India
Overview
Greenlam retained its position as the leading brand in the decorative
laminates segment, recognised for its ability to bring a variety of best laminates to the
market.
Outlook
The Company plans to strengthen relationships with trade influencers
such as carpenters, architects and interior designers, increase the percentage of premium
laminates in its product portfolio, improve its visibility on social media platforms and
enhance trade confidence through the use of QR codes on its products.
Decorative veneers business
Manufacturing facilities: Behror, Rajasthan
Installed capacity: 4.20 million square meters per annum Brand:
Decowood Production during FY2022-23: 1.24 million square meters Production growth over
FY2021-22: 11.5% Capacity utilisation: 29.0% Sales Volume, FY2022-23: 1.21 million square
meters Sales volume growth over FY2021-22: 11.4% Revenues, FY2022-23: H106.7 crore Segment
contribution to total revenues, FY2022-23: 5.8% Revenue growth, FY2022-23: 27.5%
Overview
Greenlam retained its position as the leading manufacturer of veneer in
India with an installed capacity of 4.20 million square meters per annum. The market is
being propelled by two main factors, namely the growth in afluence and income levels.
Additionally, there is an increase in demand from the residential and hospitality
segments, which is providing a further boost to this sector.
Outlook
By utilizing its extensive product range, the Company is expecting to
enhance its phygital (physical and digital) engagement and expand product access and
demand. The Company has plans to grow its veneers business through retail and brand
outreach programs, with the goal of achieving attractive growth in this segment.
Engineered wooden floors business
Manufacturing facilities: Behror, Rajasthan
Installed capacity: 1.00 million square meters per annum Brand: Mikasa
Production during FY2022-23: 0.11 million square meters Production de-growth over
FY2021-22: 4.5% Capacity utilisation: 11% Sales Volume, FY2022-23: 0.11 million square
meters Sales volume de-growth over FY2021-22: 3.0% Revenues, FY2022-23: H42.4 crore
Segment contribution to total revenues, FY2022-23: 2.3% Revenue growth, FY2022-23: 19.5%
Overview
Engineered wooden floors offer several advantages such as a premium
aesthetic appeal and easy installation. Greenlam is the sole manufacturer of this product
in India, with a manufacturing capacity of 1.00 million square meters per annum. The
Company witnessed a value growth in terms of realisations even if there was a de-growth in
terms of quantity. The Companys products are designed to withstand the typical
climatic changes in the country. The Companys Mikasa brand provides customers with a
unique selling proposition, a wide range of products, support with installation and
warranties of up to 30 years, thereby offering peace of mind to consumers.
Outlook
The Indian wooden flooring market is expected to witness significant
growth, driven by the expansion of the hospitality sector in the country. Greenlam plans
to introduce new products and collections while focusing on consistent communication about
its offerings.
Engineered wooden doors business
Manufacturing facilities: Behror, Rajasthan Installed capacity: 0.12
million doors per annum Brand: Mikasa Production during FY2022-23: 18388 units Production
de-growth over FY2021-22: 14.0% Capacity utilisation: 15% Sales Volume, FY2022-23: 16916
units Sales volume de-growth over FY2021-22: 22.1% Revenues, FY2022-23: H24.3 crore
Segment contribution to total revenues, FY2022-23: 1.3% Revenue de-growth, FY2022-23: 4.9%
Overview
The Indian doors segment is experiencing significant growth, driven by
factors such as increasing urbanization and growth in middle-class income. In a market
dominated by traditional _ush doors, Greenlam introduced a revolutionary concept with its
Mikasa doors and frames. These doors and frames are an upgraded version of traditional
carpentry and they offer superior quality. Additionally, they are delivered in a
ready-to-install integrated set, making them a convenient and efficient option for
customers
Outlook
The traction in the real estate sector is expected to boost the demand
of this segment.
Financial overview
Revenue from operations of the Company grew 18.7% from H1559.2 crore in
FY 2021-22 to H1851.1 crore in FY 2022-23. The EBITDA margin of the Company improved 20
basis point from 10.4% in FY2021-22 to 10.6% in FY2022-23.
Key ratios
Particulars |
FY 2022-23 |
FY 2021-22 |
| Gross Debt-equity ratio1 |
0.35 |
0.52 |
| Net Debt-equity ratio2 |
0.11 |
0.25 |
| Return on net worth (%)3 |
13.1% |
13.8% |
| Book value per share (Rs.) |
73.63 |
51.36 |
| Debtors Turnover (days) |
25 |
29 |
| Inventory Turnover (days) |
89 |
104 |
| Interest Coverage Ratio4 |
10.27 |
17.10 |
| Current Ratio |
1.61 |
1.66 |
| Operating Profit Margin (%) |
10.6% |
10.4% |
| Net Profit Margin (%) |
6.6% |
5.5% |
Note:
1. Decrease in Gross Debt-equity ratio was largely due to increase in
equity base on account of increase in capital via preferential issue of equity shares.
2. Decrease in Net-Debt equity ratio was largely due to increase in
equity base on account of increase in capital via preferential issue of equity shares and
higher cash and cash equivalents.
3. Decrease in Return on Net worth was largely attributable to increase
in equity base on account of increase in capital via preferential issue of equity shares.
4. Decrease in Interest coverage ratio was largely attributable to
higher interest rates on account of increase in interest cost of borrowings and higher
average debt during the year.
Risks and concerns
Competition risk: Increasing competition may lead to reduction in the
Companys market share.
Mitigation: Greenlam has a vast network of distribution and a wide
range of products such as laminates, veneers, engineered wooden floors and doors
categories, allowing the Company in deepening its market penetration. Moreover, emphasis
on product quality and innovation is expected to growth across the market cycle.
Product risk: The Companys products may become redundant and
decelerating business growth, leading to an excess in the inventory and a revenue erosion.
Mitigation: Greenlam considers not only current but also future trends while manufacturing
its products. The company prioritizes product usability, quality, aesthetic appeal and
price-value proposition. Furthermore, Greenlam offers a comprehensive range of products,
including decorative laminates, veneers, engineered wooden floors and doors, positioning
itself as a complete home decor solution provider. Finance risk: The Companys
inability to manage its debt could have a negative impact on the sustainability of its
operations.
Mitigation: With the help of a robust receivable and payable management
mechanism, the Greenlams cash and liquid investment position as on 31 March, 2023
stood at H223.52 crore, ensuring an optimal financial stability. Moreover, the Company
also benefits from a debt-service ratio of 4.55 and a healthy interest cover of 10.27
times.
Quality risk: Poor-quality product may have a severe impact on the
products sales and brand image. Mitigation: The Company has state-of-the-art
facilities manufacturing best quality products with national and international
certification to ensure maximising of resource utilisation and minimisation of wastage.
Distribution risk: An ine_cient distribution network may restrict the Companys
geographical expansion. Mitigation: Greenlam has over 23,000 dealers, distributors and
retailers spread throughout India, which helps in maintaining a wide and robust logistics
network, further helping in addressing the customer needs faster. Besides, the
Companys presence in over 100 countries across the globe allows it to cater to a
wide customer base.
Technology risk: Redundancy of technology could end up being a major
bottleneck to the Companys competitiveness.
Mitigation: Greenlam has upgraded its IT infrastructure to the latest
edition of SAP HANA as well as CRM and DMS to help enhance decision-making, improving
efficiencies and ensuring access to real-time information.
Human resources
Greenlam Industries Limiteds human resource policies have
reinforced its market leadership. The company invests in formal and informal training,
on-the-job learning and creates a positive work environment with challenging job profiles
and open communication with management. This has led to a high employee retention rate,
promoting internal leadership and enhancing future prospects. As of March 31, 2023, the
companys total number of payroll employees was 2249.
Opportunities
Greenlam Industries Limited is expected to benefit from the change in
consumer behavior where there is a greater preference for superior quality rather than
lowest price available. This is expected to drive consumers from the unorganized sector to
the organized sector. With its commitment to quality, innovation and customer
satisfaction, Greenlam is well-positioned to emerge as a leading player in the industry,
both locally and internationally.
Threats
Imports raw materials from neighboring countries may face regulatory
restrictions, which could pose a challenge in a deeply price-competitive market and
passing the entire increased costs to consumers may not be feasible.
Internal control systems and their adequacy
The Company has strong internal control procedures in place that are
commensurate with its size and operations. The Board of Directors, responsible for the
internal control system, sets the guidelines and verifies its adequacy, effectiveness and
application. The Companys internal control system is designed to ensure management
efficiency, measurability and verifiability, reliability of accounting and management
information, compliance with all applicable laws and regulations and the protection of the
Companys assets. This is to timely identify and manage the Companys risks
(operational, compliance-related, economic and financial).
Cautionary statement
This statement made in this section describes the Companys
objectives, projections, expectation and estimations which may be ‘forward-looking
statements within the meaning of applicable securities laws and regulations.
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