madhya prad tod Management discussions

Global growth is projected to fall from an estimated 3.5 percent in 2022 to 3.0 percent in both 2023 and 2024. While the forecast for 2023 is modestly higher than predicted in the April 2023 World Economic Outlook (WEO), it remains weak by historical standards. The rise in central bank policy rates to fight inflation continues to weigh on economic activity. Global headline inflation is expected to fall from 8.7 percent in 2022 to 6.8 percent in 2023 and 5.2 percent in 2024. Underlying (core) inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward.

The recent resolution of the US debt ceiling standoff and, earlier this year, strong action by authorities to contain turbulence in US and Swiss banking, reduced the immediate risks of financial sector turmoil. This moderated adverse risks to the outlook. However, the balance of risks to global growth remains tilted to the downside. Inflation could remain high and even rise if further shocks occur, including those from an intensification of the war in Ukraine and extreme weather-related events, triggering more restrictive monetary policy. Financial sector turbulence could resume as markets adjust to further policy tightening by central banks. Chinas recovery could slow, in part as a result of unresolved real estate problems, with negative cross-border spillovers. Sovereign debt distress could spread to a wider group of economies. On the upside, inflation could fall faster than expected, reducing the need for tight monetary policy, and domestic demand could again prove more resilient.

In most economies, the priority remains achieving sustained disinflation while ensuring financial stability. Therefore, central banks should remain focused on restoring price stability and strengthening financial supervision and risk monitoring. Should market strains materialize, countries should provide liquidity promptly while mitigating the possibility of moral hazard. They should also build fiscal buffers, with the composition of fiscal adjustment ensuring targeted support for the most vulnerable. Improvements to the supply side of the economy would facilitate fiscal consolidation and a smoother decline of inflation toward target levels.

The global recovery from the COVID-19 pandemic and Russias invasion of Ukraine is slowing amid widening divergences among economic sectors and regions.

The World Health Organization (WHO) announced in May that it no longer considers COVID-19 to be a "global health emergency." Supply chains have largely recovered, and shipping costs and suppliers delivery times are back to pre-pandemic levels. But forces that hindered growth in 2022 persist. Inflation remains high and continues to erode household purchasing power. Policy tightening by central banks in response to inflation has raised the cost of borrowing, constraining economic activity. Immediate concerns about the health of the banking sector have subsided, but high interest rates are filtering through the financial system, and banks in advanced economies have significantly tightened lending standards, curtailing the supply of credit. The impact of higher interest rates extends to public finances, especially in poorer countries grappling with elevated debt costs, constraining room for priority investments. As a result, output losses compared with pre-pandemic forecasts remain large, especially for the worlds poorest nations.

Despite these headwinds, global economic activity was resilient in the first quarter of 2023, with that resilience driven mainly by the services sector. The post-pandemic rotation of consumption backtoward services is approaching completion in advanced economies (including in tourism-dependent economies of southern Europe), and it accelerated in a number of emerging market and developing economies in the first quarter. However, as mobility returns to pre-pandemic levels, the scope for further acceleration appears more limited.

For emerging market and developing economies, growth is projected to be broadly stable at 4.0 percent in 2023 and 4.1 percent 2024, with modest revisions of 0.1 percentage point for 2023 and -0.1 percentage point for 2024. However, this stable average masks divergences, with about 61 percent of the economies in this group growing faster in 2023 and the rest—including low-income countries and three of the five geographic regions described in what follows—growing more slowly.

Growth in emerging and developing Asia is on track to rise to 5.3 percent in 2023, then to moderate to 5.0 percent in 2024, reflecting a modest (0.1 percentage point) downward revision for 2024. The forecast for China is unchanged at 5.2 percent for 2023 and 4.5 percent for 2024, but with a change in composition: Consumption growth has evolved broadly in line with April 2023 WEO projections, but investment has under performed due to the ongoing real estate downturn in that country. Stronger-than-expected net exports have offset some of the investment weakness, although their contribution is declining as the global economy slows. Growth in India is projected at 6.1 percent in 2023, a 0.2 percentage point upward revision compared with the April projection, reflecting momentum from stronger-than-expected growth in the fourth quarter of 2022 as a result of stronger domestic investment.

(Source: https: / / www.imf.org/en/Publications/WEO/Issues/2023/07/10/world-economic-outlook-update-july-2023 )

India is one of the fastest growing economies of the world and is poised to continue on this path, with aspirations to reach high middle income status by 2047, the centenary of Indian independence. It is also committed to ensuring that its continued growth path is equipped to deal with the challenges of climate change, and in line with its goal of achieving net-zero emissions by 2070.

After real GDP contracted in FY20/21 due to the COVID-19 pandemic, growth bounced back strongly in FY21/22, supported by accommodative monetary and fiscal policies and wide vaccine coverage. Consequently, in 2022, India emerged as one of the fastest growing economies in the world, despite significant challenges in the global environment - including renewed disruptions of supply lines following the rise in geopolitical tensions, the synchronized tightening of global monetary policies, and inflationary pressures.

In FY22/23, Indias real GDP expanded at an estimated 6.9 percent. Growth was underpinned by robust domestic demand, strong investment activity bolstered by the governments push for investment in infrastructure, and buoyant private consumption, particularly among higher income earners. The composition of domestic demand also changed, with government consumption being lower due to fiscal consolidation.

Since Q3 FY22/23, however, there have been signs of moderation, although the overall growth momentum remains robust. The persisting headwinds - rising borrowing costs, tightening financial conditions and ongoing inflationary pressures - are expected to weigh on Indias growth in FY23/24. Real GDP growth is likely to moderate to 6.3 percent in FY23/24 from the estimated 6.9 percent in FY22/23.

Both the general government fiscal deficit and public debt to GDP ratio increased sharply in FY20/21 and have been declining gradually since then, with the fiscal deficit falling from over 13 percent in FY20/21 to an estimated 9.4 percent in FY22/23. Public debt has fallen from over 87 percent of GDP to around 83 percent over the same period. The consolidation has largely been driven by an increase in revenues and a gradual withdrawal of pandemic-related stimulus measures. At the same time, the government has remained committed to increasing capital spending, particularly on infrastructure, to boost growth and competitiveness.

(Source: https://www.worldbank.org/en/country/india/overview )

Indias GDP growth in Q1 FY24 will stand at 8.3 per cent as compared to the Reserve Bank of Indias (RBI) estimate of 7.8-8.0 per cent, noted the latest State Bank of Indias Economic Research Departments report, SBI Ecowrap. The report added that total FY24 growth will be higher than 6.5 per cent.

The International Monetary Fund (IMF) had projected Indias growth at 6.1 per cent in 2023, a 0.2 percentage point upward revision compared with the April projection, due to stronger-than-expected growth in the fourth quarter of 2022 as a result of stronger domestic investment. SBIs report noted that despite headwinds, economic activity in India remained resilient in the April-June quarter of FY24, driven mainly by the growth in the services sector.

"Gross fixed capital formation (GFCF) and industrial production have slowed sharply or contracted in major advanced economies, dragging international trade and manufacturing in emerging markets as a corollary. The balance of risks to global growth remains tilted to the downside as extreme climatic events and enhanced geopolitical tension upend the drivers of risk multifold," SBIs Ecowrap said.

The SBI composite leading indicator (CLI) Index (a basket of 43 leading indicators that includes parameters from almost all the sectors) based on monthly data shows continued positive economic activity in Q1FY24, compared to Q4FY23.

"In Q1 FY24, manufacturing is sustained as reflected in IIP, automobile sales, PMI data. Further, the agriculture sales has been strong along with a high power supply. In the service side, passenger traffic picked up in Q4 FY23 has sustained, Air cargo traffic increased," the report noted.

Earlier in the day, the Department of Economic Affairs, in its July Monthly Economic Review report, said that inflationary pressures have "re-emerged", driven primarily by global disruptions, along with domestic factors.

The report noted that the evolving inflation trends call for greater vigilance by the Centre and the RBI.

"Going forward, while domestic consumption and investment demand are expected to continue driving growth, global and regional uncertainties and domestic disruptions may keep inflationary pressures elevated for the coming months, warranting greater vigilance by Government and the RBI," it added.

The report noted that retail inflation could remain high for the next few months, but the "uneasiness in food inflation is likely to subside".

It went on to highlight that disruptions on the global front led to high inflation in India, with specific food commodities such as cereals, pulses and vegetables, mainly driving the increase. All these categories exhibited double-digit growth in July, compared to the corresponding period last year.

(Source: https://www.businesstoday.in/latest/economy/story/indias-gdp-growth-in- ql-fy24-to-touch-83-as-compared-to-rbis-estimate-of-78-sbi-ecowrap-395118-2023-08-22)

INDUSTRY OVERVIEW

The Print Newspapers & Magazines market includes revenues from physical publications that are distributed periodically. Revenues in this category derive from publications financed by advertising, newsstand sales, and subscriptions (circulation and advertising revenue). Digital content available online (ePapers and eMagazines) is excluded. Newspapers refer to publications covering a wide variety of current topics (i.e., politics, sports, entertainment) and may have one of several formats (i.e., broadsheet, tabloid, or Berliner). Newspapers may be delivered or sold at convenience stores, grocery stores, newsstands, or bookstores. Purchases may be conducted periodically, by subscription, or as one-time transactions. Newspapers can be distributed on a daily or weekly basis, and some are free of charge. Magazines refer to consumer publications that focus on general interest topics and cover a broad range of categories including business, family, entertainment, and fashion. Trade magazines are excluded. Magazines may be distributed by mail or purchased from newsstands or bookstores. Magazine purchases may be carried out on a per-issue basis or by subscription.

The Importance of peoples access to information cannot be underestimated in a country like India. The Print Media is one of the most important pillars of democratic system in India, which is the largest democracy in the world.

Print newspapers distributed by delivery or sold at convenience stores, grocery stores, newsstands, or bookstores. The purchase may be carried out periodically, via a subscription model, or as a one-time transaction from newsstands. Print magazines distributed by mail or via bookstores, newsstands, or in conjunction with special events. The purchase of magazines may be conducted on a per-issue basis or by subscription. Print magazine advertising (in consumer-focused magazines only). Print newspaper advertising (in daily and weekly newspapers, which may also be free of charge)

Print Media has responded appropriately to the new changes and challenges with its modern approach. It has embraced Information Technology, which resulted in better coverage with great speed and affordable price. The readership of the print media is also witnessing a growth. Statistics show that there is great affinity towards the regional language publications among readers and that is why such publications are venturing out to bring editions from other cities where there is sizeable population of the people knowing respective languages.

Key Highlights:

• Revenue in the Print Newspapers & Magazines market is projected to reach US$4.00bn in 2023.

• Revenue is expected to show an annual growth rate (CAGR 2023-2027) of 2.18%, resulting in a projected market volume of US$4.36bn by 2027.

• In the Print Newspapers & Magazines market, the number of readers is expected to amount to 219.4m users by 2027.

• User penetration will be 17.7% in 2023 and is expected to hit 14.9% by 2027.

• The average revenue per user (ARPU) is expected to amount to US$15.92.

• In global comparison, most revenue will be generated in the United States (US$26.55bn in 2023).

• In the year 2021 a share of 39.6% of users is in the high income group.

• In the year 2021 a share of 56.0% of users is male.

While the newspaper industry is dwindling worldwide, India is one of the few countries where print media is not only dominant, but also growing in all aspects including circulation, readership and sales. Print newspapers in India have been seeing a significant surge in revenue, making it the largest global market for the industry.

As per IBEF, The print industry was worth Rs. 190 billion (US$ 2.31 billion) in 2020 and is expected to reach Rs. 279 billion (US$ 3.39 billion) by 2025. According to the EY report (2021), growth in the print segment would be driven by publications by increasing the utility and highlighting that legitimate news comes at a cost.

The market is also expected to witness growing subscription revenues through micro- market segmentation and bundling. The growth would also be driven via creation of sector specific advertising solutions.

FDI inflows in the information and broadcasting sector (including print media) stood at US$ 10.4 billion between April 2000-December 2022.

IndiasnewspapersandconsumermagazinesindustryisexpectedtoreachRs.29,945crore(U S$3.756billion)by2026.

India will see an increase in total newspaper revenue at a 2.7% CAGR from INR 26,378Cr in 2021 to INR 29,945Cr in 2026. India, which will leapfrog both France and the UK to become the fifth-biggest newspaper market by 2026, will also be the only country to grow total newspaper print revenue consistently across the five-year forecast period. India will also be the only country in the world to grow daily print newspaper copy sales (by volume) during the forecast period. The increase at a 1.3% CAGR - to an average of 139mn daily average print newspaper sales in 2026, one-third of the global daily total - will mean that India will overtake China as the biggest world market for print edition readership in 2025.

Source:https://www.pwc.in/industries/entertainment-and-media/global-entertainment-and-media-outlook-2022-2026.html )

The print media segment is on a strong rebound as the two mainstay revenue streams — subscription and advertisements (ads) — recover, but could take beyond this fiscal to reach pre-pandemic levels.

Unlike western countries, print media remains popular in India despite rapid ingress of digitalisation. Besides low cover price and the convenience of home delivery, it benefits from the ability to provide original and credible content, and peoples habit of reading physical newspapers.

Despite the pandemic, physical subscription of newspapers has held ground for Hindi and regional language newspapers because of their strong roots in the hinterland.

For English dailies, on the other hand, the shift in consumer preference towards digital news from physical newspapers has been more pronounced given their higher share in metros and Tier-1 cities, where digital adoption is also higher.

Indeed, notwithstanding a gradual recovery as offices reopen and working people return to cities, subscription would still be 12-15% lower than pre-pandemic levels.

That being said, subscription revenue accounts for only ~30% of the sectors topline, while the bulk comes from ads.

Ad revenue, on its part, has a strong correlation with economic activity. It rebounded sharply post the second wave and, in fact, reached ~85% of the pre-pandemic level in the third quarter of last fiscal, aided by the festive season and state elections. The third wave had a mild impact and only lasted until January.

In line with improving economic activity, we expect print media companies to log a 25% growth in ad revenue in fiscal 2023, on a low base. Ad volumes are expected to recover to pre-pandemic levels, but ad yield will take longer.

Net-net, this fiscal, print media revenue is expected to grow ~20% on-year to ~Rs 27,000 crore from an estimated Rs 22,500 crore in the last, but still fall short of the pre- pandemic (fiscal 2019) mark of over Rs 32,000 crore

PRINT INDUSTRY

At a time when fake news is more in circulation, readers have appreciated much more than ever before the importance of newspaper and the efforts of its journalists who even taking risk of life have worked hard to present the facts before them. This is why, despite several roadblocks in the way of delivery of newspapers, circulation started increasing quickly after initial drop to a record low level immediately after the first and Second lockdown.

Circulation continues to be less than normal due to continued restrictions but once lockdown is lifted, it will not take much time to reach where it was. This phase is also fortifying the fact that readers do not pay for number of pages in a copy of newspaper. They pay for the content. Reduction in pages per copy in absence of advertisement is not deterring readers from paying the cover prices. Publishers should take note of it, stop commoditizing the newspaper and focus on improving content if they have to recover right price of content.

Print advertising is one of the oldest and most widespread forms of media, which includes newspapers and consumer magazines. It is a creative, engaging, versatile and readily available form of advertising easily accessible to most people across the globe. In addition, it offers numerous advantages, such as in-depth analysis, coverage of events and mass circulation of quick, inexpensive, and tangible news and advertisements. As a result, it is widely preferred by advertisers worldwide. As far as current year is concerned, print industry is likely to record the highest ever de-growth in revenues but the comfort is that it should be in position to mitigate the impact to a large extent from saving in newsprint cost due to moderated newsprint prices which are likely to remain stable and saving in pages per copy. Besides this, austerity measures being applied to reduce fixed cost will immensely help.

There is no denying the fact that none of us may have seen time like this in our life time but at the same time these difficult times are also offering ample opportunity in many ways to improve sustainability of our businesses. Some of these areas to be looked at closely are increasing cover prices to level where selling newspaper itself makes business profitable, pricing the online content whether to be used by publisher on his own platform or by others on their platforms and sustaining most of the cost savings achieved now for future.

Print media companies are taking cover price hikes and rationalising newsprint consumption to combat the situation. Still, their operating margins are expected to shrink to 6.0-6.5% this fiscal, from 9.0-9.5% last fiscal, according to the assessment of CRISIL-rated print media companies that account for 40% of the sectors revenues.

(Source: https:/ / www.crisil.com/en/home/our-analysis/crisil-blogs/2022/04/the-print-run.html)

COMPANY OVERVIEW

Madhya Pradesh Today Media Limited Published its newspaper called "Pradesh Today" remained Madhya Pradesh Third most-widely read morning newspaper with highest readers across the Madhya Pradesh. It remained the undisputed leader in Madhya Pradesh, as it retained its No.1 position as the leading Hindi daily evening newspaper. The newspaper is published from different cities and has supplements for respective cities. Pradesh Today is Madhya Pradesh & Chhattisgarh most emerging Hindi daily. The newspaper spins out 11 editions.

The print industry in India continues to grow, riding on the back of demographic and socio-economic factors, rising literacy levels, improved penetration and hyper- localisation of news. The readership of the print medium is increasing at a slower pace with the global expansion of digital medium.

The diverse cultures and languages in the country ensure a strong depth in regional language readership. Vernacular newspaper covers more local news and serves as a medium to express grievances and aspirations of its readers. Moreover, localisation has led to the publishing of multi-edition newspapers, combining national content with regional news and expanding their content diversity with supplements. This hyper localization has helped in adding more local advertisers to the overall pie.

Availability of good quality newsprint, advanced printing technology and equipment has made growth of vernacular newspapers commercially viable. This is leading to the constant expansion of newspapers even into small cities and towns. Indias newspaper distribution chain is unique and multi-tiered. Newspapers are sold through an extensive network of agents and vendors who offer door-to-door delivery services to the readers.

FINANCIAL PERFORMANCE FY22 REVENUE

The Companys Total Revenue of Rs. 2181.37 Lakhs in the FY 2022-23 as against Rs. 2003.74 Lakhs in the FY 2021-22, was registering a8.86% increase over the Previous Year.

NET PROFIT BEFORE TAX

The Companys Net Profit Before Tax decreased to Rs. 346.54 Lakhs in the FY 2022-23 as against Rs. 416.98Lakhs in the FY 2021-22 registering a -16.89% decline over the Previous Year.

NET PROFIT AFTER TAX

The Companys Net Profit after Tax decreased to Rs. 243.88 Lakhs in the FY 2022-23 as against Rs. 300.79Lakhs in the FY 2021-22, registering a -18.92% decline over the Previous Year.

DIVIDEND

During the year under review, the Company has not issued any dividend to its Members of the Company.

OUR STRENGTHS

Ratio Analysis and its elements

Ratio	Numerator	Denominator	March 31,2023	March 31, 2022	% Change	Reason for variance
Current Ratio	Current Assets	Current Liabilities	2.71	2.32	16.77%	-
Debt-Equity Ratio	Total Debt	Shareholders Equity	0.02	0.04	-43.90%	It is improved by way of retained earnings
Debt Service Coverage ratio	Earnings for debt service = net profit after taxes + non-cash operating expenses+ Int. on TL	Debt services = Interest & Lease payments + Principal Repayments	3.35	2.88	16.61%
Return on Equity ratio	Net Profits after TAXES-PREFERENCE dividend	Average Shareholders Equity	0.06	0.09	-24.79%
Inventory Turnover Ratio	Cost of Goods Sold	Average Inventory	1.88	2.09	-10.42%
Trade Receivable Turnover ratio	Net Credit Sales= Gross Credit sales-sales return	Average Trade receivables	1.73	1.74	-0.86%
Trade Payable Turnover ratio	Net Credit Purchases= Gross Credit Purchases- Purchase return	Average Trade Payables	8.80	6.26	40.53%
Net Capital Turnover Ratio	Net Sales=Total Sales-Sales return	Working Capital=Current Assets-Current Liabilities	1.52	1.74	-12.64%
Net Profit Ratio	Net Profit	Net Sales= Total Sales- Sales Return	0.11	0.15	-25.52%	-
Return on Capital Employed	Earnings before interest and taxes	Capital Employed= Tangible Net Worth+ Total Debt + Deferred Tax Liability	0.12	0.15	-18.06%

RISK GOVERNANCE FRAMEWORK

The Company has a robust risk management framework to manage and mitigate risks arising from external and internal factors. A risk identification exercise is carried out periodically to identify various strategic, operational, financial and compliance-related risks and these are evaluated for their likelihood and potential impact.

Few risks and uncertainties that can affect the business are adverse macroeconomic conditions influencing revenue growth, technological changes impacting media consumption patterns, Supply chain.

Potential risks are reviewed periodically and are managed as an integral part of decision-making. To sustain its competitive edge and to stay ahead of the curve, the Company has taken various initiatives. These initiatives include enhancing the existing technological capabilities and digital properties, training and empowering employees, expanding geographic presence and continue investing in print facilities.

OUTBREAK OF PANDEMIC COVID-19:

The COVID-19 declared a pandemic by WHO has caused socio economic disruption to the extent that the economic activities have come to grinding halt since the nationwide lockdown. Imposition of lockdown and its restrictions which include prohibition of even movement, are being modified gradually with the commencement of economic activities which are expected to be normalised at least in the near future.

This has created an unprecedented environment which will result in significant de- growth in revenues, moderate to significant loss of profit or even loss and impairment of organisations liquidity. Even post lockdown, industries like media industry which are dependent on discretionary spend will find it hard to come back to their normal level of operations, revenues, profits and liquidity. Accordingly, the pandemic poses a great threat to the existence of media & entertainment industry more than any other. We also expect this crisis may trigger consolidation in the industry.

LOCATIONS:

Our offices situated in different cities i.e. Bhopal, Indore, Jabalpur, Rewa, Katni, Raipur, Delhi, Ahmadabad, Jaipur, and many more cities of the India. Some of the offices have been taken on Lease and Rental; These offices are situated in different cities, which is our Strength and contributing in company growth. We are receiving day to day feedback from these offices and getting updated news from these offices. These offices are supporting in following manner:

I. Receiving day to day feedback;

II. Getting updated news of cities through our strong editorial team;

III. Quick & Easy approach to manage work on the spot.

IV. Workload can be balanced upon demand;

V. Coordination and communication between customers and stakeholders;

VI. Quicker response to customer request;

VII. Healthy competition among divisions that boost overall business;

VIII. Focus on customers needs and preferences;

IX. Promotes self-management by employees (greater job satisfaction because of more involvement);

X. Faster decision making, reduced cycle time and improved responsiveness to customers;

XI. Enables organization to use its resources efficiently (provides flexibility to assign staff to project requirements and reassign as needed);

XII. Provides individuals an opportunity to work with different skills and expertise.

We have following Offices including Unit Office all over India:

S. No.	Office Type	Location
01	Registered Office	Bhopal
02	Corporate Office	Indore
03	Unit Office	Jabalpur
04	Unit Office	Indore
05	Unit Office	Gwalior
06	Unit Office	Rewa
07	Unit Office	Katni
08	Unit Office	Raipur
09	Unit Office	Delhi
10	Unit Office	Mumbai
11	Unit Office	Ahmedabad
12	Unit Office	Jaipur
13	Unit Office	Ujjain
14	Unit Office	Chhindwara
15	Unit Office	Sagar

INTERNAL CONTROL

The Company has an effective system of internal control corresponding with its size, nature of business and complexity of operations. It ensures accurate, reliable and timely compilation of financial and management information reports and optimum utilisation of organisation resources. The internal control mechanism comprises a well-defined organisational structure with clearly defined authority levels and documented policies, guidelines and procedures covering all business areas and functions.

These systems have been designed to safeguard the assets and interests of the Company, and also ensure compliance with the Companys policies, procedures and applicable regulations.

The internal control system is supplemented with an extensive program of internal audits and their reviews by the management. The in-house internal audit function supported by professional external audit firms conducted comprehensive risk focused audits across locations and functions to maintain a proper system of control.

HUMAN RESOURCE

Pradesh Today considers employees as its most vital and valuable assets and major strength. The employees are trained for necessary soft and hard skills on a regular basis.

Pradesh Today values performance and employees are paid basis their performance

throughout the year. The Company has in place, strict policies for womens safety in the workplace. It is fully compliant with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Companys formulated policy in this regard is available company website www.pradeshtoday.com

Pradesh Today has created a logical and necessary workforce plan for each function. It is based on each role and requirements of each function. The Company engaged external consultants for the purpose. This has helped the Company acquire an optimum Manpower Plan for the year under review.

Pradesh Today identified a framework for key competencies required at every work level. This helped to recognise key print functions including media marketing (ad sales), circulation, marketing, finance and HR. This Framework was used for the development of employees to take over larger roles.

CAUTIONARY STATEMENT

Statement in the Managements Discussion and Analysis describing the Companys objectives, projections, estimate, expectations on a go "forward - looking statements" are within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments within the country, demand and supply conditions in the industry, input prices, changes in government regulations, tax laws and other factors such as litigation and industrial relations.