GLOBAL ECONOMY OVERVIEW
The global economy remains in a precarious state amid the prolonged
effects of the pandemic, the Russian Federations invasion of Ukraine, and the sharp
tightening of monetary policy to contain high inflation. Over three years after the
coronavirus provoked the deepest global recession since World War II, the world economy
continues to be unstable, hence it will be necessary to make substantial progress on
global ambitions to eliminate extreme poverty, counter climate change, and replenish human
capital. Emerging Market and Developing Economies (EMDEs) today are struggling just to
manage the wherewithal to create jobs and deliver essential services to their most
vulnerable citizens.
After growing 3.1% last year, the global economy is set to slow
substantially in 2023, to 2.1%, amid continued monetary policy tightening to prevent high
inflation, before a tepid recovery in 2024, to 2.4%. Tight global financial conditions and
depressed external demand are expected to weigh on growth across EMDEs. weakened fiscal
positions for governments. Additionally, trade restrictions and growing geopolitical
tensions may further harm long-term growth by reducing technological diffusion, efficiency
of resource allocation, and market diversification.
Overall, the global economy is facing challenges from high inflation,
financial instability, climate change, and geopolitical tensions. These factors have
contributed to a rough state of the global economy, characterized by severe economic
shocks and policy misjudgments.
(Source: A World Bank Group Flagship Report)
INDIAN ECONOMY OVERVIEW
In a world ravaged by multifaceted uncertainties, India emerged as a
beacon of hope, registering a strong GDP growth of ~7.0% in FY23. While India has not been
completely immune to global volatility, strong private consumption and increased capital
creation sustained the economic momentum.
Inflation is high but expected to gradually decrease due to weaker
demand and lower commodity prices. Global financial conditions have tightened due to
interest rate hikes and recent instability, leading to unrealized losses for banks.
Further, authorities have implemented emergency measures to restore market confidence and
limit the impact on the broader financial system. However, unexpected persistence in
inflation or commodity price shocks could lead to greater monetary tightening and the risk
of another financial crisis.
The global economy is also vulnerable to the impacts of climate change,
with more frequent extreme weather events causing significant economic damage. These
events could lead to failed harvests, damaged infrastructure, disruptions to activity, and
While the Central Banks brought down spiralling inflation through
gradual monetary tightening, it cast a shadow on industrial activity which dropped
considerably. The drop was well cushioned as the agriculture and services sectors reported
strong growth in FY23.
Indias overall exports (including merchandise and services) defied the
global turmoil by registering a handsome growth of 13.84% to a record US$770.18 billion in
2022-23. Imports on the other hand also scaled by 17.38% to US$ 892.18 billion.
The Government revenue continued to scale new heights underpinned by
strong GST revenue. Gross tax collections grew 10.4% in 2022-23, but this was lower than
the nominal GDP growth of 16.1%, resulting in the gross tax-to-GDP ratio falling
marginally to 11.3% from 11.5% the previous year. This was mainly on account of lower
excise duty collections following the cuts on fuel last year.
The Budget 2023 is characterised as growth-oriented, progressive, and
prudent, with a specific focus on stability and sustainable development. The Budget
introduces various policy measures aimed at generating demand for a variety of chemicals,
including construction chemicals, emission control catalysts, thermoplastic polyurethane
materials TPUs, bio- pesticides, and more.
Additionally, changes in the Basic Customs Duty (BCD) rates for goods
such as crude glycerin, denatured ethyl alcohol, acid- grade fluorspar, and specified
chemicals for the manufacture of pre-calcined Ferrite Powder are expected to provide
impetus to increase domestic manufacturing of these products, aligning with the Make in
India initiative.
As Indias domestic demand remained steady amidst a global slowdown,
import growth in FY23 was estimated at 16.5% to US$714 billion as against US$613 billion
in FY22. Indias merchandise exports were up 6% to US$447 billion in FY23. Indias total
exports (merchandise and services) in FY23 grew 14% to a record of US$775 billion in FY23
and is expected to touch US$900 billion in FY24. Till Q3 FY23, Indias current account
deficit, a crucial indicator of the countrys balance of payments position, decreased to
US$18.2 billion, or 2.2% of GDP. (Source: Ministry of Trade & Commerce)
The Reserve Bank of India started tightening its policy stance during
the spring of 2022 to limit the damage caused by foreign capital outflows, a weakening
currency, and inflation risks. Higher financing costs slightly dented buoyant economic
activity, while over-leveraging in the corporate sector may become a factor of financial
instability.
Low labour productivity is affecting the competitiveness of "Made
in India" goods and their participation in global value chains. Employment and wage
estimates suggest improving labour market conditions in rural areas, while export-oriented
service firms report increasing difficulties filling vacancies. Creating good jobs is the
most promising pathway to reduce poverty, which is particularly high in the female
population. Increasing investment in education and vocational training, and updating
labour laws, would help to achieve this objective.
There are green shoots of economic revival, marked by an increase in
rural growth during the last quarter, and an appreciable decline in consumer price index
inflation to less than 5% in April 2023. India is expected to grow around 6-6.5% (as per
various sources) in FY2024, catalysed in no small measure by the governments 35% capital
expenditure growth. The growth could also be driven by broad-based credit expansion,
better capacity utilisation, and improving trade deficit. (Source: IMF Data)
Hence, broad-based credit growth, improving capacity utilisation,
governments thrust on capital spending and infrastructure should bolster investment
activity. Accordingly, manufacturing, services, and infrastructure sector firms are
optimistic about their business outlook. The downside risks are protracted geopolitical
tensions, tightening global financial conditions, and slowing external demand.
GLOBAL AUTOMOBILE INDUSTRY OVERVIEW
The year 2022 witnessed considerable challenges for the global
automotive sector. Car sales for the year saw a marginal increase of 0.7%, reaching 67.2
million units largely owing to obstacles, such as disruptions in the supply chain, an
energy crisis, inflationary pressures, elevated interest rates, concerns about a potential
recession, and a scarcity of magnesium and semiconductors.
The shortage of semiconductors, also known as chips, is anticipated to
persist throughout 2023 due to disruptions in the global semiconductor industry, a
substantial gap between supply and demand, the Russia-Ukraine war, and bottlenecks in the
supply chain. Nevertheless, it is expected that semiconductor supply will gradually
stabilize in the latter half of 2023. Automotive manufacturers are actively exploring
various strategies to secure semiconductors, and they are likely to benefit from novel
procurement models and stronger collaborations among OEMs (original equipment
manufacturers), Tier 1 suppliers, and semiconductor providers.
On a global scale, the automotive industry is observing a notable surge
in the adoption of electric vehicles (EVs). This trend has led to heightened investments
in the development of EV infrastructure, aimed at accommodating the escalating demand for
electric vehicles. With increasing concerns regarding fuel costs, sustainability, and
stringent regulations aimed at curbing transportation-related emissions, a significant
decrease in the sales of fossil-fuel cars is evident. This shift has consequently driven
the widespread acceptance of electric and hybrid vehicle models.
In spite of the difficulties encountered over the past few years, the
worldwide automotive industry is anticipated to experience robust expansion in 2023 and
beyond. The global automotive aftermarket sector is set for substantial growth, with a
projected market value of USD 589.01 billion by 2030, reflecting a Compound Annual Growth
Rate (CAGR) of 4.0% from 2023 to 2030.
Outlook
Despite facing macroeconomic headwinds, the global automotive
industrys outlook remains positive, albeit with some vulnerability in the near term. This
positivity is expected to be supported by consistent production volumes, delayed order
backlogs, and low cancellation rates. Additionally, the industry is anticipated to benefit
from gradual economic recovery, the easing of the semiconductor crisis and supply chain
pressures, moderation in inflation, improved consumer demand, and the development of new
technologies in 2023 and beyond.
Projections indicate that new car sales are poised to grow by 0.9%,
while commercial vehicle (CV) sales may experience a 1.3% decline in 2023. However, the
European automotive market
is likely to witness demand softening due to ongoing geopolitical
uncertainty and the energy crisis. Despite these challenges, the electric vehicle (EV)
segment is expected to remain a bright spot, stimulating growth in the global automotive
industry. Moreover, the increasing demand for vehicles in transportation, commercial, and
tourism sectors is expected to make a substantial contribution to the industrys growth in
2023.
INDIAN AUTOMOTIVE INDUSTRY
In FY23, the Indian automobile industry displayed persistent
resilience, benefiting from the global supply chain rebalancing and the governments
vigorous promotion of domestic manufacturing. According to the Society of Indian
Automobile Manufacturers (SIAM), automobile production in FY23 surged to 25.9 million
units, a notable increase from the 23 million units recorded in FY22.
Throughout the year, there was a noticeable enhancement in passenger
vehicle production due to the alleviation of semiconductor supply constraints. Automotive
sales maintained their robust performance across all segments. Notably, the passenger
vehicle (PV) segment achieved an unprecedented sales milestone of 3,890,114 units in FY23,
driven by sustained consumer demand, improved supplies from automakers, as well as new
launches and product upgrades from original equipment manufacturers (OEMs). Meanwhile, the
commercial vehicle (CV) segment demonstrated remarkable growth, reaching 9,62,468 units in
FY23, marking a 34% year-on-year increase. The medium and heavy commercial vehicles (MHCV)
sub-segment experienced an even more impressive growth rate of 49% in FY23.
Outlook
In the year 2022, India achieved the status of being the third- largest
automobile market globally, following China and the US. Despite facing challenges like
rising input costs, elevated ownership expenses due to regulatory concerns, and higher
inflation potentially leading to increased vehicle prices, the Indian automotive sector is
projected to maintain its growth trajectory in 2023. This projection is supported by
several factors, including enhanced consumer demand, readily available credit and
financing options, population expansion, the incorporation of wireless technology into
vehicles, and the surging popularity of electric vehicles (EVs). Additionally, the
automotive industry is expected to benefit from a substantial 10 lakh crore capital
investment in infrastructure development. Government initiatives like Make in India, the
Production Linked Incentive (PLI) scheme, the Foreign Trade Policy (FTP), and programs
such as Advance Authorization and the Export Promotion Capital Goods Scheme are
anticipated to provide a boost to automobile manufacturing and exports.
INDIAN DEFENCE INDUSTRY
The Indian defence industry is pivotal for the government and stands
out as one of the worlds fastest-growing military forces. Key sectors include military
aircraft, naval vessels, and missiles. Recent emphasis on modernization and self- reliance
has boosted the defence manufacturing sector. The government actively encourages defence
exports to enhance the economy while striving to develop indigenous technologies and
manufacturing. This aligns with the Make in India initiative, bolstered by reforms like
increased foreign investment and defence corridors in specific states. Over the past nine
years, policy initiatives and streamlined export procedures have propelled defence
exports. In FY23, the Ministry of Defences efforts led to a historic milestone, with
defence production surpassing 1 lakh crores, a 12% growth from 95,000 crores in FY22.
Budget 2023-24 allocations for the Indian defence sector
• Indian defence sector was allocated 5.94 lakh crores in Budget
2023-24, a jump of 13% over the previous year.
• Allocated 1.38 lakh crores for the Defence Pensions
• Capital outlay pertaining to modernisation & infrastructure
development of the defence sector increased to 1.62 lakh crores; 57% rise since 2019-20
• Capital budget of BRO enhanced by 43% to 5,000 crores
• Allocation to DRDO increased by 9% to stand at 23,264 crores
|
MoD (Civil) |
Pension |
defence services |
Total MoD |
| 2022-23 (BE) (INR billion) |
201.00 |
1,196.96 |
3,853.70 |
5,251.66 |
|
(4%) |
(23%) |
(73) |
(100%) |
| 2022-23 (RE) (INR billion) |
218.76 |
1,534.14 (26%) |
4,095.00 |
5,847.91 |
|
(4%) |
|
(70%) |
(100%) |
| 2023-24 (BE) (INR billion) |
226.13 |
1,382.05 |
4,327.20 |
5,935.38 |
|
(4%) |
(23%) |
(73%) |
(100%) |
| % Increase in 2021-22 (BE) over 2020-21 |
3.4 |
-9.9 |
5.7 |
1.5 |
(Source:
https://www.orfonUne.org/research/high-on-revenue-low-on-capital-indias-defence-budget-2023-24/)
[Note: BE and RE represent Budget Estimates and Revised Estimates,
respectively; Percentage figures in parentheses show the respective shares in MoDs
total.]
In FY23, India achieved an unprecedented milestone in defence exports,
with figures surging from 686 crores ($82 million) in FY14 to an impressive 16,000 crore
($1.9 billion). This 23-fold increase highlights Indias strides in global defence
manufacturing. It now exports defence equipment to 80+ countries, including Sri Lanka,
Nepal, Maldives, Italy, France, Russia, Saudi Arabia, and more. This diverse portfolio
underscores Indias growing prowess in the international defence market.
COMPANY OVERVIEW
Established in 1989, Balu Forge Industries Ltd (BFIL) specializes in
the manufacturing and supply of finished and semi-finished forged crankshafts and
precision engineering components. The company boasts the capability to produce components
in compliance with the latest emission regulations and energy vehicle standards. Operating
as a fully integrated forging and machining unit, BFIL offers an extensive product range,
catering to customers with forging requirements ranging from 1 Kg to 500 Kgs. The facility
is equipped with closed die forging hammers and presses, collectively possessing a monthly
production capacity of 5,000 tons. Impressively, the company has the capacity to
manufacture 3.6 lakh crankshafts annually. With a global distribution network spanning
over 80 countries, BFIL serves both domestic and international markets. Its clientele
encompasses renowned suppliers and manufacturers across diverse industries including
prototypes, vehicles, commercial vehicles, off-highway vehicles, ships, locomotives,
aerospace, defense, oil and gas, railway, marine, and others.
Over the years, BFIL has amassed an extensive knowledge and technology
base, which serves as a strong foundation for outpacing competitors and maintaining a
leading position in the market. The company has proactively embraced the integration of
the latest technologies, resulting in an enhanced product offering, remarkable efficiency
improvements, cost reductions, and the creation of new markets for their products.
Our growth drivers
• Machining capacity to increase by ~15,000 tonnes post Mercedes
Benz Plant commercialization
• Developing solutions across the entire spectrum of New Energy
Component
• Developing components for railway and defence industry
• Developing Powertrain sub-assemblies which will be used in the
production of engines
• Expanding the wheel production capacity to 48,000 wheels per
year
• Integrating Precision Engineering with Forging to provide
end-to-end capabilities and increase EBITDA margin sharply
Our core strengths
Understanding client needs: BFIL is committed to grasping and
addressing evolving customer needs. We collect feedback consistently and listen
attentively to suggestions, enabling us to adapt our offerings to remain pertinent.
Research focused: Adapting to change and fostering innovation are
vital. BFIL invests in an R&D facility to develop products, services, and solutions
for emerging trends and challenges.
Product portfolio: The product portfolio comprises niche products
assuring integration and synergy in operating facilities.
Strong brand name: BFIL stands out with a robust brand identity
that sets it apart from rivals, emphasizing alignment with customer values and emotions.
Cost-competitive: BFIL focuses on periodical assessment of business
processes, products, and services to drive continual enhancements, ensuring long-term
competitiveness and relevance.
research and development
BFILs dynamic R&D center of excellence upholds innovation and
quality to fuel our business aspirations. We drive innovation, optimize processes, enhance
product ingenuity, and boost manufacturing efficiency in line with our values. This strong
R&D commitment supports flawless business strategy execution.
Our R&D drives progress across diverse product segments, pioneering
new technologies, product engineering, and additive manufacturing. Our experienced team
thrives at the heart of R&D, supported by top-notch infrastructure for specialized
products, including in-house tools, labs, design, and testing capabilities.
Key focus areas of our R&D
• Exploring the use of new materials, such as lightweight alloys
or advanced composites, to enhance the product offering.
• Investigating cutting-edge manufacturing methods, such as
additive manufacturing (3D printing) or advanced Machining, to achieve higher precision
and tighter tolerances.
• Analysing and optimizing product designs using computer
simulations and finite element analysis to maximize performance and minimize stress
concentrations.
• Building a robust platform for the product expansion into the
Railway & Defence Industry by way rapid prototyping & increase the speed of New
product development
• Successful Prototyping of some key components for the New Energy
Mobility sphere to ensure the long-term vision of building strong capabilities in Fuel
Agnostic solutions.
• Investigating new heat treatment methods to enhance the strength
and fatigue resistance of our products.
QUALITY ASSURANCE
We maintain an integrated system to standardise manufacturing processes
and ensure strict adherence to quality parameters. Minimising defects through quality
management tools has not only helped us grow our continuously but has also helped customer
trust.
All our manufacturing facilities are ISO certified for quality,
environment, health, and safety. We have implemented six sigma, quality check mechanism
and effect analysis, along with other quality tools to easily identify defects and improve
processes across various disciplines. With the aim to become a zero-defect organisation,
we are developing training and development programmes to set stringent safety standards
and minimises deviation from norms.
The core focus of our company centers around delivering excellence in
quality, service, and unwavering commitment. Our relentless dedication lies in
consistently exceeding the expectations, adhering to specifications, and fulfilling the
unique requirements of our esteemed customers. This dedication drives us to uphold these
principles across all our operations, ensuring unwavering stability in both quality and
service. As a result, our ultimate goal is to achieve nothing short of complete customer
satisfaction.
FINANCE REVIEW
Consolidated financial Performance
I. Total Revenue: During the Financial Year 2022-23, the total
revenue of the Company is increased by 15% from 29,460.54 Lakhs to 33,928.48 Lakhs as
compared to the previous Financial Year 2021-22. The revenue has increased mainly on
account of the expansion of our product range and a rising demand for our key offerings
across diverse industries.
II. Cost of material consumed: During the year, cost of material
consumed (including a change in inventory has decreased by 7% from 22,027.09 Lakhs in FY
2021-22 to 22,679.74 Lakhs in current FY 2022-23. Decrease in cost of material consumed
was largely on account of a decrease in commodity price and better negotiations with the
vendors.
III. Employee benefits expenses: During the year under review,
the Employee benefits expenses increased by 52% from 523.63 Lakhs to 797.78 Lakhs as
compared to the previous Financial Year. The key reason for the increase is increase if
workforce and annual increments.
IV. finance Cost: The finance cost increased by 101% to
1,053.16 Lakhs in FY 2022-23 from 523.37 Lakhs as compared to the previous FY 2021-22
mainly owing to the increase in both interest rates and the amount of bank borrowings.
V. other Expenses: Other expenses increased by 79% from
2,352.04 Lakhs to 4,208.61 Lakhs as compared to the previous FY 2021-22 mainly on
account of increase in allowance for expected credit loss and loss on account of foreign
exchange fluctuations.
VI. Net Profit after tax: During the year, we recorded our
highest-ever profit of 3,891.29 Lakhs as compared to a net profit of 2,984.43 Lakhs in
the previous FY 2021-22 on account of improved operational margins and various cost
reduction initiatives undertaken by the company.
VII. Non-Current Liabilities: The non-current liabilities have
increased by 44% from 870.68 Lakhs to 1,253.14 Lakhs as compared to the previous FY
2021-22 owing to increase in bank borrowings.
VIII. current Liabilities: The current liabilities have
increased by 37% from 11,709.96 Lakhs to 16,059.56 Lakhs as compared to the previous FY
2021-22.
IX. Non-Current Assets: The non-current assets have increased by
44% from 4,981.71 Lakhs to 7,189.67 Lakhs as compared to the previous FY 2021-22 on
account of addition to Property Plant and Equipments and Capital advance given to vendors.
X. Current Assets: The current assets have increased by 27% from
23,461.67 Lakhs to 29,886.03 Lakhs as compared to the previous FY 2021-22.
Export business overview
Revenue contribution from the domestic market stood at 12% while 88%
came in from exports. The Company witnessed robust demand from key end-user industries.
Steady demand in key export geographies resulted in higher export revenues.
Domestic revenues for FY23 stood at 3,766.64 Lakhs, compared to
1,391.33 Lakhs in FY22.
Revenue contribution from exports stood at 28,897.25 Lakhs, up by
6.18% compared to 27,216.59 Lakhs in the previous financial year.
Steady revival in economic activity, combined with cost excellence
initiatives undertaken by the Company, helped increase market share in the international
markets.
Details of Key Financial Ratios:
In compliance with the requirement of the listing regulations, the key
financial ratios were examined and the ratios with significant changes of 25% or more as
compared to the immediately previous financial year have been provided hereunder along
with the explanation for the changes, if any.
|
FY 2022-23 |
FY 2021-22 |
reason for significant change, if any |
| Inventory Turnover Ratio (in days) |
43 |
39 |
Inventory days increased on account of the
increase in inventory. |
| Interest Coverage Ratio (times) |
7.45 |
4.15 |
Ratio improved due to an increase in
profitability. |
| Current Ratio (times) |
1.86 |
2.00 |
Current ratio improved due to better working
capital management. |
| Debt-Equity Ratio (times) |
0.26 |
0.29 |
Ratio improved due to an increase in
profitability. |
| Net Profit Margin |
11.91% |
10.43% |
improved operational margins and various
cost reduction initiatives undertaken by the company. |
| Return on Net Worth (RoNW) |
20% |
19% |
Ratio improved due to an increase in
profitability. |
RISK MANAGEMENT
A thorough risk-management framework allows us to pre-emptively monitor
risks emanating from the internal and external environment. As a result, we have been able
to consistently create value for all our stakeholders, despite industry cycles and
economic headwinds.
Our risk management process
Our risk mitigation plan
The Board takes the following steps as a part of its risk management
and mitigation plan:
• Defines the roles and responsibilities of the Risk Management
Committee
• Participates in major decisions affecting the organizations
risk profile
• Integrates risk-management reporting with the Boards overall
reporting framework
The Company functions under a well-defined organization structure. Flow
of information is well defined to avoid any conflict or communication gap between two or
more departments. Second-level positions are created in each department to continue the
work without any interruption in case of nonavailability of functional heads. Proper
policies are followed in relation to maintenance of inventories of raw materials,
consumables, key spares and tools to ensure their availability for planned production
programmes. Effective steps are being taken to reduce the cost of production on a
continuing basis, taking various changing scenarios in the market.
OUR ESG FOCUS AREAS
BFIL aims to substantially lower its absolute greenhouse gas emissions
stemming from its operations, ultimately striving to achieve Carbon Neutrality by the year
2030. This positive change can be attributed to enhanced productivity and efficiency
measures.
Furthermore, BFIL is committed to a significant 30% reduction in
absolute water consumption between 2021 and 2030. This water conservation goal aligns with
the companys dedication to responsible resource management.
As part of its comprehensive environmental policy, BFIL is actively
implementing a sustainable waste management system. This initiative is geared towards
minimizing the companys environmental impact and optimizing resource utilization. Through
the integration of energy-saving techniques and efficiency-enhancing measures, BFIL aims
to not only reduce its environmental footprint but also make a positive contribution to
its sustainability objectives.
HUMAN RESOURCE
Our businesss core asset is our intellectual capital, and the
satisfaction of our employees greatly influences our success. BFIL believes that our
people are the driving force behind the company, and our prosperity hinges on their
growth. We are dedicated to fostering personal development in a secure and inviting
environment, while valuing diversity and individual contributions. Our ability to
identify, onboard, and retain talent has fueled our expansion. Human capital plays a
pivotal role in shaping our Companys future and ensuring smooth operations.
Collaborative teamwork defines our strength as a group. Training and
skill development are vital for individual and organizational growth. Through training
sessions, we empower our workforce to reach their full potential. Our transparent
communication structure encourages employees to share their views with management. These
efforts enhance recruitment and retention of top talent, nurturing a committed and
satisfied human capital base. Effective HR initiatives and people management practices
have been implemented, and BFILs workforce has exceeded 700 employees as of March 31,
2023 (includes workforce on contract basis).
HEALTH AND SAFETY MEASURES
The well-being and safety of our personnel is our utmost priority. We
understand that a secure and healthy work environment is not only crucial for our
employees welfare but also vital for the sustainable success of our Company. With this in
mind, we have established comprehensive health and safety policies and procedures,
accompanied by regular training and awareness programs for all our staff. We actively
strive to identify and minimize any potential occupational health and safety risks across
our operations. By placing a strong emphasis on occupational health and safety, we are
cultivating a safety- centric culture that enhances the well-being of our employees.
To effectively identify and address health and safety hazards while
elevating our performance in these areas, we have implemented a range of safety measures
throughout our corporate office and manufacturing facilities.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
The Company has established Internal Financial Controls tailored to its
operations size, scale, and complexity. The Board of Directors ensures their adequacy and
effectiveness. These controls aim to ensure accurate financial and operational
information, legal compliance, asset protection, proper transaction authorization, and
policy adherence. The Companys internal financial control framework aligns with the
Companies Act, 2013, and suits its size and operations. Standard Operating
Procedures guide functions, overseen by business heads for compliance.
The Internal Audit function is defined, reporting directly to the Audit
Committees Chairman for objectivity. Annually, the team creates an approved audit plan
based on business risk. The Audit Committee monitors its compliance, effectiveness, and
sufficiency in evaluating internal control systems, operating and accounting procedures,
and policies. Corrective actions are taken based on Internal Audit reports to enhance
controls.
CAUTIONARY STATEMENT
The MDA section contains forward-looking statements concerning the
Companys future prospects. These statements entail various known and unknown risks and
uncertainties that could significantly impact actual results. Additionally, the Company
faces unforeseen and ever-evolving risks in its operating environment. The reports
assumptions rely on both internal and external information, forming the basis for specific
facts and figures. However, it is crucial to acknowledge that these assumptions may change
over time, leading to corresponding adjustments in the estimates. These forward-looking
statements represent the Companys current intentions, beliefs, or expectations and are
applicable as of their original date. Please note that the Company is under no obligation
to revise or update these forward-looking statements, regardless of any new information,
future events, or changing circumstances.
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