Macroeconomic landscape
The projected global growth rate for the coming years indicate a
pattern of modest fluctuations. After an estimated 3.4% growth in 2022, the rate is
anticipated to moderate to 2.8% in 2023, before rebounding to 3.0% in 2024. Notably, this
projection for 2023 surpasses the initial forecast by 0.1%, signalling encouraging
prospects. However, certain challenges persist, including the impact of elevated central
bank rates aimed at curbing inflationary pressures and geopolitical tensions. On a
positive note, the recent reopening of the Chinese economy following the COVID-19
disruption has paved the way for a faster-than-expected recovery.
The global inflation outlook also merits attention, as it reflects the
dynamics that underpin economic stability. Forecasts indicate a decline in inflation rates
from 8.7% in 2022 to 7.0% in 2023, with a further decrease to 4.9% in 2024. Potential
downward risks include severe health consequences in China that could impede the ongoing
recovery, escalating tensions arising from Russias engagement in Ukraine, and the
possibility of tighter global financing conditions exacerbating debt distress.
Additionally, unforeseen shifts in financial markets, triggered by adverse inflation news,
or geopolitical fragmentation impeding economic progress, could pose challenges. On the
upside, a more substantial boost from pent-up demand in multiple economies or a more rapid
decline in inflation levels present plausible factors that could shape a more favourable
trajectory.
The projected growth rates, albeit exhibiting slight fluctuations,
underscore the delicate balance between positive and challenging factors. While inflation
is expected to moderate in the coming years, it remains higher than the pre-pandemic
period.
Industry overview
Global apparel market
The global apparel market encompasses a diverse range of clothing,
spanning from sportswear to fashion to casual to business attire, catering to various
preferences and styles. In 2022, the markets revenue reached a remarkable sum of
$1.71 trillion, with a promising projection of surpassing the $2 trillion mark by 2027,
and continuing to soar beyond in 2030. The growth trajectory is driven by several key
factors, including Chinas anticipated ascent as the largest retail apparel market by
2025, closely followed by the United States and the EU-27. Notably, India is spearheading
this growth, with its robust economy propelling the market forward at a notable rate of
10%.
The apparel landscape is characterised by the dominance of key players,
namely the United States, the European Union, and China, who consistently witness
substantial consumer expenditure on clothing. With a significant 15% share of the world
retail apparel market, the United States solidifies its position as the largest player in
2022. Within the U.S. market, womens apparel captures the lions share,
commanding nearly 60% of overall sales. Post the challenges posed by the COVID-19
pandemic, U.S. consumer spending on apparel has demonstrated a resilient recovery,
exhibiting a consistent CAGR of 2% over the past decade. As we look ahead, the apparel
market is poised to embark on a continued growth trajectory, presenting a myriad of
opportunities for industry participants.
Industry landscape
The global apparel industry is witness to a notable trend of
resilience, particularly evident in the robustness of US consumer sales. Month after
month, apparel store sales in the United States have exhibited a consistent upward
trajectory, surpassing pre-pandemic levels. However, it is important to note that this
upward momentum may encounter some deceleration in the near term, as inflationary
pressures and recessionary sentiments may temper the pace of this growth in the near
future.
Concurrently, the online segment of the apparel market continues to
demonstrate its significance, even though it experienced a temporary levelling off in
early CY23. The industrys overall retail sales performance is primarily driven by
price increases rather than a substantial surge in sales volume, as brands leverage
buoyant consumer demand and reduced discounts to capture higher prices.
Textiles and apparel trade
In CY 2021, the global textile trade amassed a substantial value of US$
871 billion, with apparel accounting for an impressive US$ 505 billion. Notably, China
assumes a commanding position, leading the world in apparel exports with a significant 33%
market share. Projections for the near future are equally compelling, as textile and
apparel trade are poised to reach the remarkable milestone of 1 trillion USD by 2025, with
apparel expected to maintain its dominant position within the industry. Furthermore, a
noteworthy CAGR of 3.6% between 2021 and 2030 signifies sustained growth and resilience.
As the industry evolves, a strategic shift towards closer proximity to raw material
centres is evident, with apparel production increasingly gravitating towards these hubs,
further augmenting its share in the global textile trade. Additionally, fabrics emerge as
the second-largest traded category, commanding a significant 17% share.
Industry landscape
1. Shifting Market Share: Geopolitical tensions and rising labour
costs are propelling a potential shift away from China as the dominant player in
textile-apparel exports. Over the past decade, Chinas market share has steadily
declined due to increased factor costs, currency appreciation, and trade barriers. This
transition creates fresh opportunities for emerging Asian countries, notably India, to
seize a larger slice of the market. As sourcing from India gains momentum, its growth
potential becomes increasingly apparent. Additionally, geopolitical risks between the
United States and China, coupled with the US prohibition of cotton products from
Chinas Xinjiang province, open doors for rival nations to capitalise on shifting
trade dynamics. Chinas own internal factors, including mounting labour costs, a
declining working-age population, enhanced social security benefits, and a shifting focus
away from low-value garment exports, further fuel this trend.
2. Diversification Strategies of Major Brands: Recognizing the need
to mitigate risks and reduce dependence on a single market, major brands are actively
diversifying their sourcing strategies and decreasing their reliance on China. This
strategic shift is expected to continue in the foreseeable future. While Chinas
strong presence across the entire textiles value chain serves as a resilient factor,
brands are proactively exploring alternative suppliers in different regions. By
cultivating relationships with these suppliers, brands aim to optimise procurement costs,
enhance supply chain resilience, and effectively manage risk.
3. Consolidation of Supplier Base and Emphasis on Sustainability: Leading
apparel brands are increasingly consolidating their supply chains, prioritising
collaboration with a select number of vertically integrated suppliers. This consolidation
trend stems from brands commitment to streamlining the end-to-end product journey
and meeting heightened expectations for quality and sustainability. By partnering with
large, vertically integrated suppliers, brands ensure better control over the supply
chain, enabling them to adapt to evolving market demands while adhering to rigorous
environmental, social, and governance (ESG) standards.
BRANDS CONSOLIDATION OF SUPPLIER BASE
Indian textile and apparel industry
The Indian textile and apparel industry has witnessed remarkable growth
in recent years, reflecting its immense potential and promising future. In 2022, the
market size soared to an impressive US$ 172.3 billion, with projections indicating an
upward trajectory. Anticipating this growth, industry experts at IMARC Group forecast the
market to reach a staggering US$ 387.3 billion by 2028, showcasing a remarkable CAGR of
14.59% between 2023 and 2028.
Several factors underpin this exceptional growth. Firstly, there is a
surging demand for premium quality clothing and footwear items, fueled by changing
consumer preferences and increasing disposable incomes. This trend has propelled the
industry forward, unlocking new opportunities for manufacturers and retailers alike.
Furthermore, the Government of India has taken proactive measures to empower weavers by
launching various schemes. These initiatives not only uplift the skilled artisans but also
contribute to the overall growth of the sector.
Moreover, the industrys commitment to ethically sourced and
sustainable materials has gained significant traction. As conscious consumerism continues
to rise, there is a growing emphasis on environmentally friendly and socially responsible
practices. Indian textile and apparel businesses have recognized this demand and are
investing in sustainable materials and production methods, aligning themselves with global
standards and contributing to a greener future.
The importance of the Indian textile and apparel industry cannot be
overstated. It contributes 2.3% to the countrys GDP and accounts for 7% of industry
output in value terms. Additionally, India holds a 5% share of the global trade in
textiles and apparel, positioning itself as a key player in the international market.
Looking ahead, the textile and apparel industry in India is poised for
further growth and success. With a projected target of reaching a business size of $250
billion by 2025, the industrys potential for expansion remains substantial. As India
continues to leverage its rich textile heritage, embrace sustainability, and nurture
skilled artisans, the Indian textile and apparel industry is set to make a lasting impact
on the global stage, contributing to economic growth, employment generation, and a
sustainable future.
Indian Apparel Exports
(In US$ BN)
Geography |
FY19 |
FY20 |
FY21 |
FY22 |
FY23 |
| EU |
6.2 |
5.7 |
4.4 |
5.6 |
4.6 |
| N. America |
4.5 |
4.6 |
3.5 |
5.7 |
5.9 |
| UAE |
2.0 |
1.5 |
1.6 |
1.8 |
1.2 |
| Others |
3.4 |
3.7 |
2.8 |
2.8 |
4.5 |
| Total |
16.5 |
15.5 |
12.3 |
16.0 |
16.2 |
Geographical Share |
FY19 |
FY20 |
FY21 |
FY22 |
FY23 |
| EU |
38% |
37% |
36% |
35% |
28% |
| N. America |
28% |
30% |
29% |
36% |
37% |
| UAE |
12% |
10% |
13% |
12% |
7% |
| Others |
21% |
24% |
22% |
18% |
28% |
Marking the India advantage
1 Cost-effective labour and abundant skilled workforce: India
benefits from a low labour cost advantage and a vast pool of skilled workers. While the
lead time may be lower in countries like Vietnam, India offers a balanced mix of cost,
skills, and textile strength. The countrys textile integration, particularly in
cotton, coupled with competitive power costs, creates a favourable manufacturing
environment.
2 Rich in raw materials: India stands as one of the largest
producers of cotton and jute worldwide. Additionally, it holds the distinction of being
the second-largest producer of silk and home to 95% of the worlds hand-woven fabric.
With an abundance of raw materials and cost-effective labour, India enjoys a competitive
edge in terms of manufacturing costs compared to many other countries.
3 Strong port connectivity and government support: India boasts
robust port connectivity, ranking second along with Vietnam. Although there may be a
slight lag in general infrastructure, the governments proactive approach and support
for the industry, along with geopolitical uncertainty, create a favourable scenario. The
Indian government actively promotes policies encouraging businesses to diversify their
sourcing strategies and potentially benefiting the industry in the long run hence taking
advantage of China+1 opportunities.
4 Growing young population: India possesses one of the
worlds largest young populations, with a median age estimated around 28 years,
making it younger than many other large countries. This demographic segment represents a
significant consumer group for textiles and apparel, thus driving consumer sentiments and
fueling demand.
5 Rise of e-commerce: India has experienced a notable surge in
online shopping and e-commerce, offering strong growth patterns in this segment. The
advent of e-commerce enables the industry to reach a larger base of consumers effectively.
Today, consumers prioritise convenience, a wide range of options, attractive discounts,
and easy return policies when making their shopping choices.
Favourable government initiatives
1 Boosting exports through strategic partnerships: The Indian
government is actively pursuing bilateral trade agreements to enhance the countrys
exports. Successful free trade agreements (FTAs) have been concluded with the UAE and
Australia, while discussions with the UK are in the final stages, expected to be completed
in 2023. The government is also exploring trade discussions with diverse nations including
the European Union, the United States of America, Canada, and South Korea, aiming to
create new avenues for trade and expand market access.
2 Continuation of RoSCTL scheme: To provide substantial relief
to export companies and ensure policy stability, the government has announced the
continuation of the Rebate of State and Central Taxes and Levies (RoSCTL) scheme until
2024. This decision offers a sense of certainty to Indian exporters, encouraging them to
increase their investments and generate employment opportunities across the country.
3 Empowering the man-made fibre (MMF) sector: Recognizing the
global significance of MMF and technical textiles, the government has introduced the
Production Linked Incentive (PLI) Scheme targeted at these segments. With an estimated
outlay of H10,683 crore, this initiative aims to strengthen Indias dominance in MMF,
which accounts for 70% of global textile fibre consumption. By incentivizing investments
and promoting technological advancements, the government seeks to bolster the
countrys position in the global market.
4 Fostering textile infrastructure and innovation: The Mega
Integrated Textile Region and Apparel (MITRA) Parks Scheme has been announced in the Union
Budget 2021-22 to establish seven state-of-the-art parks over three years. These parks
will feature cutting-edge facilities, shared utilities, and research and development
laboratories, creating an enabling environment for textile manufacturing. This initiative
aims to attract investments, drive innovation, and support the development of a robust
textile ecosystem within the country.
5 Promoting technology adoption and modernization: The
government plans to introduce the Textiles Technology Development Scheme (TTDS) as a
successor to the earlier scheme of Technology Upgradation Fund Scheme (TUFS). With an
allocation of H16,635 crore over five years, TTDS aims to promote integrated manufacturing
facilities and technology adoption in the textile sector. The funding will be utilised for
textile machinery, technology upgrades for existing units, integrated manufacturing,
clearing TUFS arrears, and administrative expenses. However, beneficiaries of the PLI
scheme for textiles will not be eligible for benefits under TTDS.
Company and its product overview
Gokaldas Exports Limited is a prominent player in the Indian fashion
industry, specialising in the manufacturing and export of a diverse range of high-quality
readymade garments. With a strong foothold in the global market, the Company caters to the
demands of renowned international fashion brands and retailers across more than 50
countries. The Companys success can be attributed to its deep understanding of
garment specifications, a keen awareness of customer preferences, and its unwavering
commitment to delivering products that consistently meet stringent quality and compliance
standards. Gokaldas Exports Limited has fostered long-standing relationships with its key
customers, which have been instrumental in driving its growth and sustaining its market
position. The Companys customer base spans regions including North America, South
America, Europe, Africa, Oceania, and various Asian countries. With its dedication to
excellence and a customer-centric approach, Gokaldas Exports Limited continues to be a
trusted and preferred partner in the global fashion landscape.
Product Category |
FY22-23 |
FY21-22 |
| Women |
51% |
46% |
| Men |
42% |
47% |
| Kids |
6% |
6% |
| Others |
1% |
1% |
Product Mix |
FY22-23 |
FY21-22 |
| Jackets |
35% |
42% |
| Pants |
16% |
14% |
| Tops/Shirts |
48% |
42% |
| Others |
1% |
2% |
Financial performance
The financial statements have been prepared in compliance with the
requirements of the Companies Act. 2013, and in conformity with the Indian Accounting
Standards (IndAS) prescribed under section 133 of the Act, read with Companies (Indian
Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment
Rules 2016, as amended and other accounting principles generally accepted in India.
Analysis of the Profit and Loss statement of consolidated financial
statments
The Companys total income was H2247.23 crore in FY2022- 23
compared to H1,801.00 crore in FY2021-22. Revenues from operations reported a 24.12%
growth from H1,790.32 crore in FY2021-22 to reach H2222.20 crore in FY2022-23. The
Companys ability to effectively balance capacity with orders on hand and execution
excellence played very well in delivering such revenue growth. Other incomes of the
Company accounted for a 1.11% share of the Companys revenues, reflecting the
Companys dependence on its core business operations.
Companys total income in FY2022- 23 compared to _1,801.00 crore
in FY2021-22
Expenses
Total expenses (excluding interest and depreciation) of the Company
increased by 23.13% from H1,584.82 crore in FY2021- 22 to H1,951.42 crore in FY2022-23.
Raw material costs, accounting for a 52.38% share of the Companys revenues,
increased by 32.54% from H888.20 crore in FY2021-22 to H1177.17 crore in FY2022-23, owing
to increase in the operational scale of the Company after evident market recovery from
COVID-19 pandemic. Employee expenses increased by 14.95%, rising from _538.78 crore in
FY2021-22 to _619.32 crore in FY2022-23. This was due to expanded capacity in production
units to match the scale of operations and an increase in the minimum wage revision for
workmen in Karnataka. Also, the Company has witnessed consistent improvement in the
operating margin which has increased by 1.2% from 12% in the year 2021-22 to 13.2% in FY
2022-23. It has delivered a net profit after tax of H172.97 crore witnessing a commendable
growth of about 47.73% compared to H117.08 crore in FY2021-22.
Analysis of Balance sheet
The Companys capital employed has decreased by 3.0% from H625.97
crore as on 31st March, 2022 to H607.26 crore as on 31st March,
2023. While the Company did major investments during the year towards modernisation and
upgradation of technology, plant and machineries at factories and investment towards
setting up of new manufacturing units in Bhopal, Madya Pradesh and Perundurai, Tamil Nadu,
such decline was majorly attributed to reduction in the working capital investments as of
the balance sheet date. The capital employed is comprising of two key components that are
non-current assets and working capital investment while it does not include certain
components like the mutual fund investments, lease assets and liabilities, and borrowings
of the Company.
The net worth of the Company increased by 25.15% from H708.18 crore as
on 31st March, 2022 to H886.25 crore as on 31st March, 2023, owing
to an increase in profit as well as an increase in hedge reserves, arising from effective
portion of gain and loss on hedging instruments from mark to market.
The Company had raised funds aggregating to H300 crore through
Qualified Institutional Placement on 7th October, 2021. As on 31st
March, 2023, the amount raised has been fully utilized towards repayment or prepayment of
borrowings, financing working capital requirements, which are in line with the objectives
of which the funds were raised.
During the year under review the Company has not taken any major long
term loan. The short-term borrowing of the Company is reduced by 57.48% from H60.69 crore
as on 31st March, 2022 to H25.81 crore as on 31st March, 2023. Net
debt-equity ratio of the Company stood at (0.28) in FY2022-23 (i.e., net cash) compared to
net debt of 0.05 in FY2021-22. Net Debt to equity represents average net debt to average
equity.
Finance costs of the Company decreased by 36.04% from H40.21 crore in
FY2021-22 to H25.72 crore in FY2022-23 despite increase in scale of operations. The
Companys interest cover increased from 3.9x in FY2021-22 to 8.71x in FY2022-23.
R886.25 cr
Net worth of the Company increased by 25.15% from I708.18 crore as on
31st March, 2022 to I886.25 crore as on 31st March, 2023
8.71X
Companys interest cover increased from 3.9x in FY2021-22 to 8.71x
in FY2022-23
Applications of funds
Fixed assets (gross) of the Company increased by 9.72% from H263.38
crore as on 31st March, 2022 to H288.98 crore as on 31st March,
2023, owing to an increase in investment on plant and machinery. Additionally, the Company
also invested H85.78 crore on the new manufacturing facilities in Madhya Pradesh and Tamil
Nadu which are under capital work in progress as on 31st March 2023.
Depreciation on fixed assets (Excluding Right of use assets) increased by 20.59% from
H31.55 crore in FY2021-22 to H38.05 crore in FY2022-23, owing to an increase in fixed
assets during the year under review.
R288.98 cr
Fixed assets (gross) of the Company increased by 9.72% from I263.38
crore as on 31st March, 2022 to I288.98 crore as on 31st March, 2023
Working capital management
Current assets of the Company increased by 6.15% from H828.85 crore as
on 31st March, 2022 to H879.79 crore as on 31st March 2023. The
current asset includes investment in the mutual funds which was increased by H189.54 crore
over the previous year. The current and quick ratios of the Company was 2.12 and 1.01,
respectively in FY2021- 22 and 2.54 and 1.70, respectively in FY2022-23. Inventories
including raw materials, work-in-progress and finished goods among others decreased by
32.43% from H433.62 crore as on 31st March, 2022 to H292.99 crore as on 31st
March, 2023. Trade receivables have increased by 47.33% from H92.19 crore as on 31st
March, 2022 to H135.83 crore as on 31st March, 2023.
Key ratios |
|
|
Particulars |
2022-23 |
2021-22 |
| Debt turnover ratio |
18.12 |
12.27 |
| Inventory turnover ratio |
5.69 |
4.82 |
| Interest coverage ratio |
8.71 |
3.91 |
| Current ratio |
2.54 |
2.12 |
| Net Debt / (Net Cash) |
(0.28) |
0.05 |
| equity ratio# |
|
|
| Operating profit margin |
10.0% |
8.7% |
| (EBIT to Total Income) |
|
|
| Net profit margin |
7.70% |
6.5% |
| Return on net worth |
21.7% |
23.5% |
# Net Debt equity
ratio is Average Net Debt / Average Equity |
|
Outlook FY 2024
The retail apparel sales in the US is expected to witness good traction
starting from H2FY24. However, the demand has faced challenges due to high inflation
resulting from the unresolved war conflict between Russia and Ukraine. The sharp hikes in
interest rates by central banks across economies to contain high inflation are expected to
weigh on consumers disposable income, thereby impacting consumer demand. Brands, on
the other hand, continue to liquidate their high inventory holdings and are planning to
moderate their purchase plans to align with market demand conditions which may continue in
the next two quarters. This has resulted in lower imports by major importing countries
like the US and EU, consequently impacting apparel exports from major apparel-exporting
nations.
Nevertheless, the long-term industry structure remains positive, with
increasing emphasis by brands on the China plus one sourcing strategy, suppliers
consolidation, and partnerships with ESG-compliant suppliers.
Risk management
External risk factors
1. Currency Fluctuations and International Currency Risks: Gokaldas
Exports Limited faces exposure to foreign exchange rate fluctuations as a significant
portion of its revenue is derived in U.S. Dollars and Euros. Additionally, the Company
relies on imported raw materials, which further exposes it to international currency
risks. While the Company employs hedging measures to moderately mitigate these risks,
adverse movements in exchange rates could have a material impact on profitability.
2. Regulatory Changes and Government Incentives: : Any changes in
regulations or applicable government incentives could have a substantial and adverse
effect on the Companys business and profitability. The Indian government has
provided production and export-related incentives to the textile sector, such as RoSCTL,
EPCG, and duty drawback credit. However, these incentives are subject to potential
modifications or removal, which could negatively impact the Companys operations.
3. Competitive Disadvantage in the European Market: Most Asian
countries have established free trade agreements with the European Union, making them more
competitive than India in terms of exports to the EU. This poses a challenge for Gokaldas
Exports Limited in accessing the European market and may require strategic measures to
enhance competitiveness in this region.
4. Input Cost Volatility: Fabric represents the largest component
of the Companys input costs. Any increase in the prices of inputs such as cotton,
yarn, or fabric, as well as rising wage costs and inflation, could potentially lead to a
decline in the Companys profitability. To mitigate the impact of these risks, the
Company proactively prepares and implements adequate plans well in advance.
Internal risk factors
1. Adaptability to Changing Fashion Trends and Customer Preferences: Gokaldas
Exports Limited faces the risk of being unable to respond effectively to rapidly changing
fashion trends and evolving consumer preferences. The Company relies on a limited number
of customers for a significant portion of its export revenues. The loss of one or more key
customers could lead to reduced production and sales, adversely impacting the
Companys business and financial position. However, Gokaldas Exports Limited
addresses this risk by prioritising excellence in customer relationships, delivering
high-quality products, and ensuring timely dispatch of goods, thereby mitigating potential
adverse effects.
2. Timely Receipt of Raw Materials: The Companys operations
depend on the timely receipt of raw materials from overseas markets. Any delays in the
arrival of raw materials could have a negative impact on delivery timelines and overall
production efficiency. To mitigate this risk, Gokaldas Exports Limited has built enduring
relationships with suppliers over the years, fostering better retention and credit
management. The Company further engages in block booking of materials, ensuring a steady
supply chain and minimising the risk of material shortages.
3. Anticipation of Market Changes and Consumer Preferences: The
apparel manufacturing market is highly dynamic, and success hinges on the ability to
anticipate shifts in consumer preferences and industry trends. Gokaldas Exports Limited
possesses the necessary capabilities to identify and respond quickly to these changes,
both in terms of product offerings and market strategies. By closely monitoring customer
preferences and keeping a vigilant eye on market dynamics, the Company ensures successful
implementation of product changes aligned with evolving consumer demands. This proactive
approach serves as a robust mitigation strategy for this internal risk.
Human resources and industrial relations
At the core of Gokaldas Exports Limiteds success lies its
unwavering belief in the power of its workforce. The Company recognizes that its people
are instrumental in driving its competitive advantage. With a diverse pool of talent,
enriched expertise, cross-sectoral experience, and technological knowledge, the employees
at Gokaldas Exports Limited provide invaluable support to the Companys operations.
The organisational structure is thoughtfully designed to break away from traditional
hierarchies, fostering an environment that promotes competitiveness and individual growth.
Every decision made by the Company is aligned with the personal and professional goals of
its employees, ensuring an ideal work-life balance and fostering a sense of pride among
the workforce. As of March 31, 2023, Gokaldas Exports Limited proudly employed a dedicated
team of 26,424 individuals.
The Companys commitment to human resources extends beyond mere
employment figures. Gokaldas Exports Limited strives to create an inclusive and empowering
work culture, nurturing an environment where employees are encouraged to reach their full
potential. Gokaldas Exports Limited recognizes that its people are the driving force
behind its achievements, and it continues to invest in their growth and well-being to
sustain its position as a leading player in the textile and apparel industry.
Internal control systems and their effectiveness
Gokaldas Exports Limited places great emphasis on maintaining robust
internal control systems to ensure effective financial reporting and operational
oversight. The Company has implemented comprehensive policies and procedures that clearly
define the delegation of authority, thereby promoting transparency and accountability. To
ensure independent monitoring and evaluation of these controls, an external internal
auditor has been appointed. This auditor operates independently and reports directly to
the audit committee, which comprises entirely of independent directors. On a quarterly
basis, the internal auditor conducts audits across key business areas as per a
predetermined plan. These audits encompass a thorough review of systems, procedures, and
compliance measures. The findings, along with the managements response, are
presented to the audit committee, ensuring transparent reporting of significant
observations and subsequent actions. The Board diligently reviews the minutes of the audit
committee, further reinforcing the Companys commitment to maintaining effective
internal control systems.
Through the diligent efforts of the independent internal auditor, the
Company continuously evaluates the functioning of its control mechanisms and identifies
areas for improvement. The commitment to comprehensive internal audits allows for timely
identification and rectification of any deficiencies in internal control processes. This
proactive approach not only ensures the integrity of financial reporting but also
mitigates the risks associated with non-compliance.
Cautionary statement
Investors are cautioned that this discussion contains statements that
involve risks and uncertainties. Words like anticipate, believe, estimate, intend, will,
expect and other similar expressions are intended to identify such forward looking
statements. The Company assumes no responsibility to amend, modify or revise any forward
looking statements on the basis of any subsequent developments, information or events.
Besides, the Company cannot guarantee that these assumptions and expectations are
accurate, or will be realised as actual results, since performance or achievements could
differ materially from those projected in any such forward- looking statements.
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