suryalakshmi cotton mills ltd Management discussions


Economic overview

Global economy

The global economy has been dealing with multiple crises for the past two years, including liquidity issues caused by global bank crises. Even though the impact has been limited, these uncertainties have shaken the confidence of consumers and businesses, leading to lower spending and affecting economic growth. The most significant factors affecting the future economy include the risk of a Covid-19 resurgence, the Russian-Ukrainian conflict, and the climate crisis. The International Monetary Fund (IMF) estimates that the global growth rate, which was 3.4% in CY2022, will decrease to 2.7% in CY2023, which could lead to a recession for many people. However, the IMFs recent update no longer predicts a global recession but a small decline in global growth in CY2023, followed by a rebound to 3.1% in CY2024. China, Russia, the US, Germany, and Italy are among the countries whose GDP forecasts for CY2023 have risen, while the UKs forecast has been lowered by almost 1%. Its essential to keep monitoring and predicting the economy and for policymakers to be flexible and alert to emerging challenges and risks.1

The global economy is facing uncertainty due to various challenges such as the conflict in Ukraine, which has caused supply disruptions and high prices for basic goods. This has also led to higher inflation. However, there is some good news from the International Monetary Fund (IMF), which predicts that global inflation will decrease from 8.8% in CY2022 to 6.6% in CY2023 and 4.3% in CY2024. This is due to two reasons: first, interest rates are increasing worldwide, which lowers the demand for goods and services, thereby slowing down inflation. Second, the demand for different commodities has gone down, resulting in a decrease in price. It looks like the world has come out of the shadow of the pandemic and has, in fact, learned to live with it. However, geopolitical crises, supply chain reorientations, global inflation, and tight monetary policy conditions will weigh on the outlook. Its important for governments to balance boosting the economy while keeping inflation under control. This can be done through effective communication and coordination among central banks to manage inflation expectations.

Indian economy

Recently, India became the worlds fifth-largest economy by overtaking the United Kingdom. India is set to be the third-largest economy by FY2029 as per the SBI research report. The economic growth of India has even surpassed that of China in recent years. India has been able to successfully jump up ranks in various indexes.

The New Trade Policy has made it extremely easy for traders to carry out imports and exports. The trade of all items barring a restricted few has been allowed. Also, the tax on many items has been abolished, while for others, the amount has been visibly minimised. In 2022, it was Russias invasion of Ukraine that largely determined the fate of Indias economy. Indias food and energy subsidies prevented a major downfall.

Higher tax collections are good and bode well for the current financial year. It is another sign of a good recovery. The growth in real GDP during 2022-23 is estimated at 7.2 per cent as compared to 9.1% in 2021-22.2 Investments will be crucial for Indias growth over the next two years, in addition to consumption-driven growth. While India has a large and growing population with high spending potential, sustained economic growth will require investment momentum. We expect investments to see a turnaround and thrust the economy into sustainable growth.

Goldman Sachs predicts that Indias growth in FY2024 will have two halves: a slower first half as the boost from reopening fades and monetary tightening affects domestic demand, followed by faster growth in the second half as global growth recovers, drag from net exports decreases, and the investment cycle picks up.

According to the IMF, India will remain the worlds fastest-growing major economy in FY2023 and FY2024. Despite external headwinds, Indias resilient domestic demand will help it maintain growth, although it will slow down from 6.8% in FY2022 to 5.9% in FY2023 before recovering to 6.3% in FY20243. The Reserve Bank of Indias aggressive rate hikes to tackle high inflation levels, as well as a slowdown in exports and consumer demand, have contributed to slower GDP growth. In addition to these factors, the slowdown in exports and consumer demand has also contributed to bringing down the numbers. The Real GDP growth for FY2023-24 is projected at 6.4 % with Q1 at 7.8%, Q2 at 6.2%, Q3 at 6% & Q4 at 5.8%.4

Industry overview

Indian textile industry

The textile and clothing market in India is worth more than USD 150 billion, with over USD 40 billion coming from exports. A report predicts that by 2025-26, the global textile and clothing market will be worth USD 1,000 billion, with Indias market reaching USD 250 billion. To reach the goal of a USD 250 billion market and create a sustainable textile industry, Indian companies should utilise government support programs such as PLI, PM MITRA, and export incentives. This will help them invest in new products, expand their operations, and enhance their competitiveness. 5

Currently, India has a 4% share of the global textile and clothing market worth USD 840 billion and is in fifth place. India scaled its highest-ever exports tally at USD 44.4 billion in Textiles and Apparel (T&A) including Handicrafts in FY 2021-22, indicating a substantial increase of 41% and 26% over corresponding figures in FY 2020-21 and FY 2019-20, respectively. The market growth of the apparel industry is expected to be driven by the increasing demand for fashion apparel and the growth of e-commerce platforms. 6

The textile industry is very important to India. Indias domestic apparel and textile industry contributes 2% to the countrys GDP and 7% of industry output. India holds a 4% share of global trade in textiles and apparel, and its share of textile, apparel, and handicrafts in total exports was 11.4% in FY2020-21. India is a major producer of cotton and jute. The Indian textile industry is the second-largest employer in India, employing 100 million people in supporting sectors in addition to 45 million workers directly.

India is the second largest producer of silk in the world, and 95% of all hand-woven fabric comes from India. India is also the largest producer of cotton and jute in the world. The Indian technical textiles segment is estimated at USD 16 billion, approximately 6% of the global market. Technical textiles are functional fabrics used in various industries like automobiles, civil engineering, construction, agriculture, healthcare, and industrial safety for protection purposes.

The Indian textile industry is poised to reach a business size of USD 250 billion by FY2025. It is a significant contributor to the countrys export earnings, accounting for 12%. India has a 5% share in the global trade of textiles and apparel. The export of cotton textiles alone has been on the rise, reaching USD 17.2 billion with a 39% share. There has been a growth of 54% and 67% during FY2021-22 over FY 2020-21 and FY 2019-20, respectively. Indias readymade garment exports are to see a CAGR of 12-13% and surpass $ 30 Bn by 2027.7

FDI in sectors to the extent permitted under automatic route does not require any prior approval either by the Government of India or the Reserve Bank of India (RBI). The Ministry of Textiles has set up FDI Cell to attract FDI in the textile sector in the country. From FY2017 to FY 2022, the textile industry in India received USD 1522.23 million in FDI. The rise in investment was due to international apparel leaders setting up their operations in the country.9

The Indian textiles and apparel industry is diverse, covering the entire value chain from fibre to apparel. It includes traditional handloom and handicrafts as well as modern, capital-intensive manufacturing for mass production. The Indian Textile Industry has several factors that support its growth, including a raw material base, cheap labour, and strong entrepreneurial skills.

The small size of manufacturing in the apparel industry allows for greater flexibility to service smaller and specialized orders, while the countrys rich cultural diversity and heritage inspire designers. Rising income levels, increasing urbanization, and a growing purchasing population are natural demand drivers that also fuel domestic demand.

Upcoming trend

The Indian Government is promoting zero-discharge plants in textile manufacturing to reduce water pollution. The mandate is set for FY2030 and will take time for organizations to adapt to the new regulations. Because after the oil industry, the textile industry is claimed to be the worlds biggest polluter. The demand for sustainable natural fibres such as cotton, silk, and linen has surged, driven by a new generation of customers willing to pay a premium. This demand is a positive development as it will encourage organizations to become more sustainable, in addition to regulatory efforts. By FY2030- FY2035, most of the organised sector textile manufacturers are expected to adopt a sustainable business model. Tamil Nadu, a state in India, could serve as a model for the industry as most of the manufacturers there use 100% green energy and have implemented zero liquid discharge in processing.

Augmented and virtual reality (AR/VR) is revolutionizing the shopping experience in the fashion industry by providing customers with an exciting alternative to traditional in-person shopping. AR/VR technology offers in-store navigation, interactive display screens, virtual try-on, virtual fitting rooms, virtual tailors, and virtual makeovers, keeping customers engaged, and enhancing loyalty. This technology also helps convert visitors into customers by spreading awareness and providing a unique shopping experience. This technology allows customers to choose from various options of prints, colours, and designs without having to produce the garment, which saves time and resources. This is hardly surprising, especially considering that the era of COVID-19 has spurred the development of new in-home experiences. VR technology could help make the fashion industry more sustainable. Augmented reality not only impacts consumers visually but also psychologically, as studies have shown it can trigger pleasure receptors in the brain. More specifically, it could help reduce the environmental impact of garment production.

By analysing data sets, algorithms can forecast the response to the latest or upcoming fashion line, helping designers understand what type of clothing will trend. Tracking purchasing history of the customer by e-commerce platforms helps them send personalized messages and offers based on a recommendation system to the customers. Smart clothes are the next big thing in wearable technology. Experts predict that new materials, including sustainable polyester and organic materials, will be used in the production of fashion clothes. Data science is transforming the fashion industry by collecting, processing, identifying, and analysing data to convert it into valuable insights.

Customers in the future will be more concerned about the experience provided by clothing rather than just the appearance. As a result, fashion industry players must be more customer-focused and offer solutions that enhance lifestyles. This will be a shift from focusing solely on aesthetics. The Indian government has launched initiatives such as TUFS and ATUFS to provide financial assistance to textile manufacturers for adopting advanced technologies and upgrading machinery.

Opportunities

Abundant Availability of Raw Material: India is a leading cotton producer and the worlds second-largest producer of polyester, accounting for 27% and 8% of global output respectively. India is also the third-largest producer of viscose10 . India has high self-sufficiency for raw materials particularly natural fibres. Indian textile Industry produces and handles all types of fibres.

Availability of cheap skilled labour: Around 62.5% of Indias working-age population is aged between 15 and 59 years, ensuring that India will have a demographic advantage all the way to 205511 . presents an advantage for the textile and apparel industry. The country is composed to lead as a producer of labour-intensive products, and efforts are being made by the government to develop a skilled workforce to meet the industrys demand for quality. the central government has launched the SAMARTH scheme under the Ministry of Textile and has developed 65 clusters for skill development.

Availability of end-to-end value chain: Indias advantage lies in its complete and integrated textile value chain, allowing for efficient production of textiles at every stage from fibre to finished goods. it has large-scale producers present throughout the value chain, from yarn to finished goods. These enterprises have significant manufacturing capacity, are recognized by international buyers, and have established setups for producing high-quality goods. In contrast, other countries like Bangladesh, Vietnam, and Sri Lanka have fragmented value chains, with a focus on end-products and importing raw materials like fabric and yarn.

Existence of Established Infrastructure: Indias textile and garment manufacturing infrastructure is spread across various clusters. concentrated in regions like Gujarat, Maharashtra, Tamil Nadu, Uttar Pradesh, and West Bengal. the government establishing new virtual clusters in the form of textile and apparel parks under the PM-MITRA scheme in seven states 12.

Expansive and Increasing Local Demand: Natural demand drivers including rising income levels of the middle class, increasing urbanization and growth of the purchasing population drive domestic demand. Indias textile industry is set to reach USD 250 billion by FY2025-26 with the governments Production-Linked Incentive (PLI) Scheme worth USD 1.42 billion for setting up 7 mega textile parks and boosting production and exports of man-made fibres 13.

Indian denim industry

Denim is a durable and versatile cotton fabric, popular worldwide due to its durability, comfort, and classic style. The distinctive blue colour of denim is obtained through the indigo dye used in the twill weave fabric. Denim clothing items like jeans, jackets, shirts, skirts, and dresses are long-lasting and can withstand repeated washing and wear, making them a sustainable fashion choice. The denim industry is constantly evolving with new designs, textures, washes, cuts, and embellishments, which keeps consumers interested and demand high. Innovation begins with the spinning process and continues throughout the supply chain, with the fabric playing a significant role.

The Indian denim industry is growing steadily, but the per capita consumption of denim apparel is lower than in other countries. However, with the introduction of new technologies and changing trends, the industry is poised for growth. The recent growth in cotton production indicates the potential for the denim industry in India.

Indias denim industry has grown significantly over the past decade, with over 50 denim fabric mills currently in operation in the organized segment. India has the second-largest installed capacity for denim fabrics in the world, with an annual capacity of over 1600 million meters, second only to China. A large portion of the denim fabric produced in India is consumed domestically, including for the production of local jeans for export, with the remainder being exported to countries such as Bangladesh, Colombia, Venezuela, Egypt, and Sri Lanka.

Denim is the fastest-recovering market segment post-pandemic and the global market for jeans is projected to grow at a CAGR of 4.7% from 2020 to 2027, reaching a value of USD 87.4 billion. India is a leader in denim fabrics, and the domestic jeans market has been growing faster than the global growth rate, with an expected average CAGR of 8-9% for the next few years. The Indian domestic market for denim is projected to reach USD 12.27 billion by 202814. Denim is a versatile industry thats always in demand due to its classic style. Soft and stretchable denim made with spandex is currently in high demand, leading to lighter and more comfortable denim thats fashionable for everyday wear.

Growth prospects and triggers

Convenience: Denim is a tough and comfortable fabric that is easy to take care of. Unlike formal wear, denim doesnt require much maintenance and can be worn for almost any occasion.

Organised Retail Sector and E-Commerce: The demand for denim in the organized retail sector has significantly increased due to the proliferation of shopping malls and the emergence of online shopping portals. Online shopping has become a popular choice among Indian youngsters because of the convenience it offers. The ability to order denim online, along with flexible return policies and the cash-on-delivery payment system, has made it easier for them to purchase denim without leaving their homes. As a result, the online denim market has experienced a surge in sales and has become a key player in the denim industry.

Rising fashion consciousness: The rise in fashion consciousness among Indian consumers has resulted in a surge in demand for denim clothing. Its popularity can be attributed to its versatility, durability, and style. Furthermore, the availability of a diverse range of denim styles, along with the growth of the fashion industry and e-commerce, as well as the influence of social media, have further fuelled its appeal. Denims affordability and fashionable appeal have made it a preferred choice, particularly among the younger generation. It is anticipated that the demand for denim clothing in India will continue to grow in the foreseeable future.

Purpose: Denim has transformed from a workwear fabric to a fashion staple worn by people worldwide. It is no longer limited to casual wear and has become a popular choice for formal and semi-formal settings. Denim jeans can be dressed up or down, making them versatile. In addition to classic indigo and black, denim is available in a range of colours, patterns, and finishes, giving customers numerous options to choose from. Its versatility has made it more cost-effective than other types of bottoms, as a good pair of jeans can be worn on multiple occasions with various tops and accessories. As a result, denim has become a popular choice for all ages and demographics, whether for a casual outing, formal event, or weekend brunch. export: Denim is in high demand worldwide with an annual growth rate of about 6%. Indias resources, skilled labour, and technology could make it a major global denim exporter. The rupees depreciation gives Indian exporters an advantage. price: Denim caters to customers with varying affordability. The price depends on factors such as material quality, texture, comfort, cut, and wash. Cheaper denim with fewer design elements is used for low-cost everyday jeans, while premium quality denim with intricate designs is used for high-end luxury denim. Brands and retailers have different pricing strategies for denim. Some offer affordable options for price-sensitive customers, while others position themselves as high-end luxury brands. Manufacturing, brand reputation, and marketing expenses also affect pricing. Denim products are available at different price points, suitable for every customers budget and needs. Denim offers a wide range of options for everyday wear or special occasions. westernisation of lifestyle: In India, the Westernization of lifestyle has increased the demand for denim clothes. Its versatility, durability, and style make it a popular choice for both casual and formal occasions. The rise of the Indian middle class and the increased spending power of consumers have also contributed to the popularity of denim clothing.

Opportunities

• India has been a leader in the denim fabric manufacturing industry for a long time. Despite new players and competition from Pakistan and Bangladesh, India remains competitive thanks to its access to raw materials, advanced technology, and product development skills. Additionally, India has unique strengths such as large domestic consumption, favourable demographics, and indigenous raw materials, which position it for continued growth and leadership in the denim industry.

• India has a strong presence in the denim fabric manufacturing industry around 65% of denim production in India is consumed in the domestic market, including both Indian brands and garment exports. The remaining 35% is exported globally, with Bangladesh and Turkey being the main markets. However, emerging export markets for Indian denim fabrics include South America and several African countries. 15

• The denim wears market in India is experiencing growth on the domestic front as young Indians are turning to denim as a staple in their daily wardrobe. This trend is driven by the middle class, who prefer mid-priced denim with quality and value for money. The rise of globalisation has contributed to this trend, as well as increased disposable incomes and the westernisation of work culture. Denim jeans are now being worn as business casual attire, further boosting the market. This expansion is being driven by the middle class, which is a key factor in the great Indian consumer story.

• Indias textile value chain, from cotton production to garment manufacturing, offers a range of benefits to denim manufacturers. Indias skilled workforce produces high-quality products at low prices, making it a cost-effective option. The countrys demographics, including rising purchasing power and modern fashion sense, support the sectors growth. India has been rated as one of the top places to invest in retail among 30 global emerging economies. The "Make in India" initiative is expected to benefit the Indian denim sector significantly, potentially changing the industrys perception and Indias position in the global denim landscape.

Company overview

Suryalakshmi Cotton Mills Ltd. is an Indian textile company that produces cotton yarn and fabrics. It was founded in

1962 and has become a major player in the industry. The Company is a top Indian company that produces premium yarns and denim. With 50 years of experience and cutting-edge technology, they have become the original denim manufacturers for leading global and domestic brands. They have a dominant market share in the premium denim sector and export to 29 countries worldwide. Their presence across the entire value chain from yarn to denim cloth gives them a competitive edge and helps them predict the industrys cyclical demand-supply situation.

The company exports high-quality products worldwide and is committed to sustainable practices. The company aims to grow profitably while also maintaining responsible business practices. They achieve this by utilizing automation and measurement-based controls that are ready for the future.

The company today is a successful end-to-end clothing company - integrating robust backend spinning leading to premium yarn production and fabric manufacturing for a superior denim value chain. With state-of-the-art spinning mill production facilities in Telangana and Maharashtra, India, we leverage efficient sourcing across our operations. we ensure manufacturing compliance with the highest levels of health, safety and environment (HSE) regulations to protect communities and the environment. The companys mission is "To be one of the Top Global Players in the specialized denim and premium yarn sector, bringing inspiration and innovation to every fabric and garment we create."

Core strengths

Certifications: the company maintains high standards in manufacturing and has earned certifications in ISO 14001:2015, ISO 9001:2015, Oeko-Tex, Better Cotton Initiative, Higg Index Certified, GOTS, OCS, GRS & RCS and Regenagri, CleanKore, Indigood. These reflect the companys commitment to responsible and sustainable practices. It also ensures compliance with social and environmental assessment audits by third-party auditors as a part of the conformance procedures for USA and European customers like VF Corporation and Levis.

Robust R&D department: the company developed a host of functional finished fabrics like antimicrobial, anti-viral, smart temp, etc. It has used specialised yarns like Dual Fx, T400, Modal, Lyocell, Viscose, Spun Poly, Indigo Dyed Weft, etc. Knit, dobbies with some magnificent over-dyed shades plus an in-house peach finish are some of the very interesting fabrics in its product mix 17.

Key buyers: In denim fabric, 55% of its sales are exported and the remaining 45% is in the domestic market.

Globally its key customers are Lee, Wrangler, Wal-Mart, Dickies, Amazon, Zara and Timberland. In domestic our key customers are Lee, Wrangler, Pepe, Spykar, West-Side, Reliance Trends and Killer Jeans.18 Design Strategy: the company focuses on the latest fashion trends and customer preferences to design its denim apparel. This strategy enables them to manufacture innovative and unique denim products with different styles, textures, materials, and finishes. By doing so, the company aligns its product development efforts with the consumers needs and preferences. This dynamic design approach has helped the company to cater to the constantly changing fashion industry and offer products that stand out in the market.

High-value products: The Companys unwavering goal is to satisfy customer needs by focusing on developing high-quality products that align with changing customer tastes and preferences. The Company produces value-added denim fabrics and polyesters, which has helped it create a competitive edge and collaborate with global multinationals.

Product portfolio

The company has a diverse product portfolio that includes premium yarns and denim fabrics. They specialise in specialized denim variants and offer over 3000 high-quality denim products. Their yarn range includes cotton, polyester, viscose, modal, and blends of various fibres. The company offers a wide range of denim fabrics, including regular, stretch, and bi-stretch denim, as well as denim fabrics with different weights, colours, and textures. They also offer denim fabrics with various finishes, such as enzyme wash, acid wash, and over-dye, to create unique and trendy looks. The company partners with leading global and domestic brands to provide cutting-edge designs and trend-setting yarns, denim fabrics, and end-to-end clothing solutions. Pioneering in denim production improvements has given the company a competitive advantage in both domestic and international markets.

Yarn

Suryalaxmi cotton mills produce high-quality yarns using top-notch machinery and advanced technology. We specialize in creating specialized and functional yarns using cotton, polyester, and blends. Our R&D team stays up-to-date with the latest trends to meet the denim industrys changing needs. Our quality team ensures that every length of yarn meets international quality standards. We also source cotton and other raw materials responsibly, ensuring fair practices and sustainability. We have modern spinning units in Telangana, Nagpur, and Maharashtra, with a total capacity of 87,000 spindles19 , and we produce value-added and fancy yarns specially used for denim manufacturing.

Denim

Suryalakshmi Cotton Mills manufactures speciality denim fabrics with a focus on customization to meet the unique needs of global fashion markets. With a fully integrated fabric manufacturing facility in Ramtek (Nagpur, Maharashtra), we have a production capacity of 40 million meters per annum20 . Our denim fabrics range from 5 oz to 15 oz21 , catering to diverse end-product needs. We conduct ongoing research to develop new colours, grains, and finish attributes, and our products undergo stringent quality procedures to ensure high performance. Our commitment to sustainability is reflected in our near-zero environmental impact and safe, green technologies.

Financial overview

Particulars FY 2022-23 FY 2021-22 YoY change (%)
Revenue from 85,104.89 77,807.99 9.4%
operations
EBDITA 6075.84 9,025.74 -32.7%
PAT 1,040.11 21.64 4706%

 

Ratios FY 2022-23 FY 2021-22
Debtors Turnover (in times) 5.68 5.37
Inventory Turnover (in times) 5.02 4.75
Interest Coverage Ratio (in times) 0.82 1.76
Current Ratio (in times) 1.33 1.43
Total Debt Equity Ratio (in times) 0.75 1.06
Operation Profit margin (in %) 4.75 3.40
Net Profit margin (in %) 1.21 0.03
Return on Net worth (in %) 3.95 0.09

Internal control

Suryalakshmi Cotton Mills has implemented a robust system of internal control to ensure efficient and effective operations, accurate financial reporting, and compliance with laws and regulations. The company has established policies and procedures for all key business processes, including financial management, human resources, procurement, and inventory management. Regular audits are conducted by internal auditors to monitor compliance with these policies and procedures and to identify areas for improvement. The company also maintains a system of checks and balances, with segregation of duties and clear lines of authority and responsibility. Through these measures, The Company aims to minimise the risk of fraud, errors, and other financial irregularities, and to promote transparency and accountability throughout the organization.

Corporate social responsibility

The Company is committed to corporate social responsibility, focusing on education, skill development, health, environment, and sustainability in the communities it operates in. It spends at least 2% of its average net income over the previous three years on CSR projects, as required by the Companies Act of 2013. It offers solutions that address changing demands and environmental changes and emphasizes the importance of CSR in all its activities. The CSR Committee develops and recommends a CSR Policy for the Company in accordance with Schedule VII of the Companies Act, 2013. It also proposes the amount of money to be spent on CSR operations and oversees their implementation.

Risk management

Risk management is an integral part of the companys operations. The company has established a robust risk management framework to identify, assess, and mitigate risks across various areas of the business. The risk management framework includes regular risk assessments, monitoring of key risk indicators, and mitigation plans for identified risks. The company has also established a Risk Management Committee, which comprises senior management personnel, to oversee the risk management framework. The committee regularly reviews the risk management policies and procedures and provides guidance to the management team on risk-related matters. With a focus on sustainability, the company also evaluates environmental, social, and governance risks to ensure responsible and sustainable business practices. By proactively managing risks, the Company is able to mitigate potential negative impacts and enhance its ability to achieve its strategic objectives.

Human resources

The Company values its human resources greatly, recognising them as the key to its success. The company has a dedicated HR department responsible for all aspects of human capital management, including recruitment, employee engagement, performance management, and training and development. The HR team works closely with other departments to ensure that the company has the right talent to achieve its strategic objectives. The company fosters an inclusive and diverse work environment, providing a safe and conducive workplace. It invests in employee training and development programs to enhance the skills and capabilities of its workforce, improving operational excellence and customer satisfaction.

Cautionary statement

This report on Management Discussion and Analysis includes forward-looking statements, which are predictions, expectations, projections, or estimates about the Companys objectives. These statements are based on certain assumptions and expectations of future events. However, actual results may differ from these statements due to various factors such as changes in government regulations, tax laws, and other statutes. Additionally, unforeseen events such as force majeure could affect the actual result. It is important for readers to understand the context in which these statements are made and that they may not reflect future outcomes accurately.