Tata Steel BSL Ltd Management Discussions.

Business overview

The following discussion and analysis should be read in conjunction with Tata Steel BSL Limiteds (TSBSL or Company) standalone/consolidated financial statements and related notes for the year ended March 31, 2019 included in this annual report.


Macroeconomic Conditions

Global economic growth peaked at 3.6% level during 2018 and is likely to slow down marginally to 3.5% in 2019 mainly due to US-China trade tensions coupled with softer momentum in Europe, Russia, the Middle East and North Africa region. As the economic cycle matures in developed markets, global growth will rely increasingly on emerging markets and developing economies

Global Steel Industry

According to the World Steel Association, global crude steel production reached 1808.6 MnT in 2018, up by 4.6% compared to 2017. Crude steel production increased in all regions except in the EU, which saw a 0.3% contraction. With highest ever annual production, China remained the worlds largest crude steel producer in 2018 and its crude steel production reached 928.3 MnT in 2018, up by 6.6% as against 2017. Chinas share in global crude steel production increased from 50.3% in 2017 to 51.3% in 2018. Crude steel production in India, increased by 4.9% over the previous year, making India the second largest crude steel producing country.

In March 2018, the United States (U.S.) announced trade restrictions in the form of high import tariffs (25% on steel), and the trade dynamics changed globally. To keep up with the trade restrictions, many key steel producing and consuming nations such as the European Union, Mexico, Canada and India imposed various restrictions on their steel imports due to fear of oversupply of steel in their domestic markets.

The depreciating currency of Turkey and erstwhile Russia also changed the trade dynamics, making the market overly competitive.

Indian Economy

The Indian economy witnessed a strong growth of more than 8% in Q1 FY19. However, it slowed down in Q2 and Q3 FY19, primarily due to weaker rural sector. High oil prices combined with a weakening rupee dampened the demand in general. Going forward, stable investment growth with gradual pickup in private investment would continue to support the economy. In addition, consumption growth is expected to improve on various policy measures for farmers, unorganized sector and government employees. According to the Reserve Bank of India (RBI) forecast, Indias economy is estimated to grow by 7% in FY19 and 7.3% in FY20.

Indian Steel Industry

FY18 has been a mixed year for Indian steel industry. While there was a significant improvement in the demand in H1, H2 witnessed a sharp dip due to global sentiments. Amidst all this, India became the second highest steel producer surpassing Japan. The only country ahead of India is China, which produces more than 50% of the worlds steel.

The Indian steel sector has seen many consolidations in FY19 as a result of the IBC process. This move will make the sector more stable and competitive. Going forward various Government initiatives and policies are impacting the industry in many positive ways. The Prime Ministers

vision of Make in India with an objective of nation building is encouraging domestic manufacturing.

The World Steel Association has projected Indian steel demand to grow at 7% in 2019 while globally, steel demand has been projected to grow by 1.3% in 2019.


The global real GDP growth is projected to slow down from 3.2% in 2018 to 2.9% in 2019 and 2.8% in 2020 and 2021.

The period of above-trend global growth is over. Tighter financial conditions, policy uncertainty, market volatility and event risk are all hurting business sentiment and investment. Headwinds are not sufficiently forceful to trigger a recession in 2019. Lower commodity prices also offer short-term respite (albeit not for producers), but 2020 onwards will be more vulnerable.


Budget stimulus is supportive of 2019 but further fiscal and monetary tightening will lean down the economy. Policy uncertainty is the prime concern at the moment.

Fed funds forecast to peak at 3.25% in 2020, marginally and temporarily above its estimated long-run equilibrium of 2.75%.


As per consensus, Chinas economic situation in 2019 is likely to worsen due to accumulated problems in real estate, manufacturing and financial sectors. It is expected that stimulus measures will likely be introduced to sustain the economy and cope with the trade war impact. Further, machinery output is likely to remain at mild growth.

Crude steel demand in real terms (assuming no unreported steel production) is expected to be flat in 2019 and to decline 2.0% in 2020. Upside risks remain if the stimulus measures are stronger than anticipated.

Domestic Outlook for Indian Steel Industry

As per the World Steel Association, the Indian economy would continue to grow at 7% in next couple of years. Gradual rise in investments is expected with continuation of ongoing projects, while pre-election measures will boost the consumption in FY20.

Industry growth is likely to moderate marginally in FY20 due to high base, and manufacturing capacity utilization likely to remain at ~75% levels. Initiatives such as cash transfer for small and marginal farmers are likely to boost rural economy.

India is likely to remain a preferred destination for foreign direct investment (FDI) with consistent improvements in Ease of Doing Business (EoDB) ranking.


The construction sector has witnessed a consistent revival during 2018, mainly supported by government spending on infrastructure. The construction sector is likely to maintain its current momentum with gradual rise in investment. GST rate cuts in the real estate sector are expected to boost demand.

The Capital Goods sector growth has improved significantly in 2018 with rising manufacturing capacity utilization and infrastructure investments which have boosted demand for construction and earthmoving equipment. The Renewable energy segment is also witnessing strong demand with several new projects being launched due to strong government focus. The Sector is likely to witness nearly similar level of demand in the next couple of years (EME: 10-11%; MHE: ~11% in 2019; 6-7% in 2020; Transformers: ~7%; Renewables:7-8%; Heavy Machinery: 1-2%).

Consumer durables growth in 2018 was driven by segments like air- conditioners, refrigerators and furniture supported by lowering of GST and hike in import duty. Demand is likely to normalize to ~7% in coming years (Refrigerators: 8-9%; Washing Machines: 9-10%; Air Conditioners: 12- 13%; Ceiling Fans: 2-3%).

On-going freight corridor and metro rail projects will continue to support the demand in railway sector, along with the electrification of 16,540 track kms. by 2022 at an estimated outlay of 121.3 billion.


The Automotive sector grew at a healthy rate in 2018. However, demand fell recently, especially in the Passenger Vehicle segment. While research agencies are projecting 8-10% growth in next couple of years, automotive manufacturers are slightly bearish with projections of 6-7% growth.

The Packaging segment (drums and barrels) demand is expected to remain stable with continuation of exports growth.


The Company is engaged in Steel business. Brief performance of the

Company is as follows:

(Rs. crore)
Particulars FY 19 FY 18 Change
Turnover 20,891.60 17,404.43 3,487.17
PBDIT 3,931.00 2,299.94 1,631.06
Interest and Financial Charges 3,752.18 6,304.90 -2,552.72
Depreciation 1,441.74 1,785.67 -343.93
Profit / (Loss) After Tax 1,713.09 (24,813.47) 26,526.56

Further, there was an increase in revenue by 20.04% over FY18. This was largely compensated by an increase in raw material prices.

Financial Performance and State of Affairs (standalone):

During the year, the Company recorded a net profit of 1,713.09 crore (previous year: Loss of 24,813.47 crore). The basic earnings per share was at 17.45 and diluted earnings per share were at 1.05 for FY19.

The analysis of major items of the financial statements is given below:

a) Net sales and other operating income (Rs. crore)
FY 19 FY 18 Change (%)
Sale of Products 19,860 16,761 18.49
Other Operating Income 1,031 644 60.09
Total income from operations 20,892 17,404 20.04

During the year, the overall turnover was higher due to better market conditions, which led to higher sales quantity with better realizations.

b) Raw materials consumed (Rs. crore)
FY 19 FY 18 Change
Raw materials consumed :11,603 9,915 17.02

During the year, raw material consumption increased by 17% due to increase in production of crude steel by 9.5%, and increase in raw material prices.

c) Employee benefits expense (Rs. crore)
FY 19 FY 18 Change
Employee benefits expense 363 358 1.40

The employee cost has increased marginally on account of yearly increments in salaries.

d) Depreciation and amortization expense (Rs. crore)
FY 19 FY 18 Change


Depreciation and amortization expense 1,442 1,786 (19.26)

The decrease in depreciation charge of 344 crore is primarily on account of impairment charge of PPE of 18,718 crore booked during FY18. Further, such fall has been offset by an increase in depreciation on account of change in useful life estimates.

e) Other Expenses (Rs. crore)
FY 19 FY 18 Change


Other Expenses >5,399 4,556 18.50

Other expenses were higher compared to last year due to increase in production leading to higher consumption of stores and spares, high power rate and higher operating expenses. The decrease in rental expenses is on account of shifting of the corporate office and discontinuance of certain rental premises.

The details of other expenses are as below: (Rs. crore)
FY 19 FY 18 Change
Consumption of stores and spares 1,307.45 809.03 61.61
Packing material consumed 75.21 63.98 17.55
Power and fuel 1,176.38 972.29 20.99
Rent 817.50 917.17 -10.87
Repairs and Maintenance 74.32 99.00 -24.93
Selling and Distribution 926.38 875.16 5.85
Allowance for expected credit losses 59.55 112.41 -47.02
Contractual manpower costs 334.24 235.72 41.79
Other Expenses 627.78 470.85 33.32
Total Other Expenses 5,398.81 4,555.61 18.50


f) Finance costs and Net Finance Costs (Rs. crore)
FY 19 FY 18 Change
Finance Costs 3,752 6,305 -40.49
Net Finance Costs 3,639 6,276 -42.02

The corporate insolvency resolution process (CIRP Process) under the Insolvency and Bankruptcy Code, 2016 was initiated against the Company in FY18. Total amount of loans (including interest) which were outstanding during FY18 were approximately 58,000 crore with an interest rate varying from 9% to 20% including penal interest.

Tata Steel Limited acquired the Company through its wholly- owned subsidiary Bamnipal Steel Limited (BNPL) on May 18, 2018 (Acquisition).

The existing debts of the Company were settled by paying 35,200 crore. Therefore, the loan amount has decreased significantly YoY resulting in decline in finance cost.

g) Exceptional Items (Rs. crore)
FY 19 FY 18 Change
Exceptional Items (2,976) (23,345) 112.7

Exceptional items in FY19 include the following: -

Pursuant to the CIRP Process and implementation of the resolution plan, there has been a gain of 3,159.27 crore

Provision for impairment on property, plant and equipment and other assets: 183.26 crore.

Exceptional items in FY18 include an impairment charge of 20,997.35 crore against property, plant and equipment and other assets. It also includes prior period items of 2,019.11 crore.

h) Fixed Assets (Rs. crore)
FY 19 FY 18 Change
Property, Plant and Equipment (PPE) 29,154 30,362 -3.98
Capital work-in-progress 1,154 1,180 -2.20
Other Intangible assets 0.17 0.11 54.55

During the year, PPE were impaired by 52.19 crore and the depreciation is 1,441.74 crore. Further, during the year there is an addition of 287.28 crore out of which 274.24 crore were capitalized from CWIP.

i) Investments (Rs. crore)
FY 19 FY 18 Change
Investment in Subsidiary, JVs and Associates 0.15 0.15 -
Other non-current Investments 1.01 1.08 -6.48
Current investments 1,594.90 - 100.00
Total Investments 1,596.06 1.23 99.92

During the year, the Company has made fresh investments in mutual funds. As at March 31, 2019, the balance of investments in mutual funds amounted to 1,594.90 crore.

j) Inventories (Rs. crore)
FY 19 FY 18 Change
Raw Material 1,700 1,691 0.53
Finished Goods and WIP 1,963 1,726 13.73
Stores, Spares and consumables 919 608 51.15
Total Inventory 4,582 4,025 13.84

Increase in raw material inventory was due to increase in commodity prices in FY19 and increase in volumes was due to production ramp up. Further, stores and spares inventory has increased on account of planned repairs & maintenance in plant and machinery.

k) Trade Receivables (Rs. crore)
FY 19 FY 18 Change
Gross Debtors 880 1,390 -36.69
Less: Provision for doubtful 183 170 7.65
Net Debtors 697 1,220 -42.87

The decrease in sundry debtors in FY19 as compared to FY18 is mainly due to introduction of channel financing facilities to the retail customers and receivable purchase programs across other segments. Further, the Company has remodeled its credit management policies resulting to reduction in the credit period extended to the customers and credit sales.

l) Cash Flow (Rs. crore)
FY 19 FY 18 Change
Net Cash Flow from Operating Activities 5,800 1,789 224.20
Net Cash Flow from investing Activities -1,617 -645 150.70
Net Cash Flow from financing Activities -4,500 -675 566.67
Net increase / (decrease) in cash and cash equivalents -317 469 -167.59

The cash operating profit before working capital changes and direct taxes was 3,900 crore as compared to 2,373 crore during the previous year.

The cash outflow from investing activities was 1,617 crore as compared to 645 crore during the previous year. The outflow during the year broadly represents investment in mutual funds.

The net cash outflow from financing activities was 4,500 crore as compared to 675 crore during previous year, broadly due to net repayment of borrowings and interest paid in FY19.


The details of changes in the key financial ratios as compared to previous year are stated below:-

FY 19 FY 18 Change
Debtors Turnover1 (Days) 16.74 28.78 -42%
Inventory Turnover (Days) 138.62 132.32 5%
Interest Coverage Ratio2 (Times) 0.66 0.08 713%
Current Ratio3 (Times) 1.91 0.11 1694%
Debt Equity Ratio (Times) 0.93 -* -*
Net Debt Equity (Times) 0.83 -* -*
Return on Net Worth % 9.35 -* -*
EBITDA Margin4 % 18.18 12.67 44%
Net Profit Margin5 % 8.20 -142.57 -106%

*The debt-equity ratio/ net debt equity ratio/ return on net worth of FY18 have been marked "-" as the Company was under the CIRP Process, the ratios are not comparable.

1. Debtor Turnover Ratio - The fall is primarily on account of introduction of channel financing facilities across the distributor segment and discounting arrangements across the other segments. Further, the fall is on account of higher sales in FY19.

2. Interest Coverage Ratio - Improved primarily on account of higher operating profits and reduction of finance cost on account of reduction in external borrowings.

3. Current Ratio - Improved primarily on account of reduction in the current liabilities due to reduction in current portion of long term borrowings and short term borrowings (due to repayments).

4. EBITDA Margin - Improved primarily on account of higher operating profits.

5. Net Profit Margin - Improved primary on account of exceptional gains (compared to exceptional losses in FY18), higher operational profits and reduced depreciation and finance cost.


Steel manufacturing is a complex value chain with performance dependency on multiple external and internal factors - starting from the quality of raw-material to converting them into high-quality steel and ensuring seamless supply to the customers across the globe. Therefore, long term sustainability of the company requires structured and accelerated operational excellence and synergies with Tata Steel Limited (the ultimate parent company of TSBSL) and other group companies.

The Company has adopted three-tier integration strategy i.e., excellence, elevate, and expand. In Phase 1, the Company is working towards stabilization of the plant, debottlenecking of existing facilities, raise it to the best demonstrated performance, and realize synergies. In Phase 2, the company plans to achieve benchmark performance in all areas to achieve rated capacity and generate strong cash flows. In Phase 3, the Company plans to initiate strategic capital investments to ensure sustainable returns for the stakeholders.

In view of this, within one and half months of the Acquisition in July 2018, the Company launched an accelerated performance improvement plan and named it "Be1: Alag Pehchan, Uchi Udan" to achieve benchmark levels in operational excellence and customer focus with a deep change management agenda encompassing employee engagement and capability build. The most important objective of the program was to ensure execution certainty and quicker value delivery, without losing focus on long term objectives. To do this, the IMPACT Centre (IC) methodology along with the D0-D4 stage gate approach (based on degree of hardness) was leveraged to drive this program. This methodology provides a structured mechanism to approach improvement initiatives, while aiming to ensure program rigor, visibility and ownership. This methodology also takes the improvement agenda to the shop-floor, thus increasing employee involvement in improvement activities and thereby driving change bottom-up.

The program started with focus on engagement, with 50+ Aspiration Driven Transformation and Awareness workshops conducted across the departments. 1000+ employees were engaged in these workshops to create a collective vision for the program and company. Under the program, 13 ICs were rapidly setup and stabilized across the entire value chain laying down the culture for continuous improvement, ownership, and drive. In the 9 months since launch, these ICs are working on more than 500 ideas including synergy initiatives across the value chain.


The Company has no other segments apart from steel business, details of which have been included in the financial performance. Hence, no separate details segment wise are being reported.

Post the Acquisition, many improvement projects have been undertaken at TSBSL. The Company produced 4.14 MTPA of crude steel which is higher than 10% over FY18. Further there are plans to sweat all the assets and reach higher levels of capacity utilization. The other thrust areas are

i) To produce value added grades;

ii) Develop new customers and markets;

iii) Value creation through synergy initiatives with parent organization.

Automotive and Industrial Products and Projects

TSBSL grew its presence in the automotive segment by increasing the customer base and initiating commercial supplies to additional Auto OEMs. In order to deliver value to its key customers, the Company developed steel for outer panel applications using hot rolled steel from its Integrated Steel Plant at Angul. The Company successfully developed value added and High Strength steels, thereby increasing its product portfolio and offerings to its customers.

The Company continued to be the supplier of choice for appliance makers, growing its market share to 50%. The Company successfully increased its market presence in value added and niche products such as Hardened and Tempered Steel, capturing close to 55% of domestic market share. New segments such as solar helped to increase Galume sales by 70% over FY18. Color coated sales increased by 30% through new product development such as food grade PPGI for cold storage and opening of new geographies. 20% of LPG cylinders manufactured in the country used steel from Tata Steel BSL Limited.


Sales under the distribution vertical grew in FY19 over the previous year.

For the first time, an organized distributor network was setup with appointment of distributors for each product category

Marketing and Sales processes of Tata Steel were imbibed and embedded along with interaction and training of people.

Post product improvements and operating philosophy alignment, segment specific brands like Tata Steelium, Tata Shaktee and Tata Kosh were launched. This helped the Company in value creation and also lent enhanced reach through established 2 Tier distribution network.

E-Platforms, like MJunction were used for thefirsttimefor auctioning arising material which led to higher operational efficiency and transparency along with improved realizations.

Tubes and Large Dia Pipes

TSBSL has maintained its leadership position in Precision Tubes business for Automotive segment with 25% Share of Business (SOB). To enable growth in FY20, emphasis for the next year is on building capacity in high end precision tubes, enhancing the service center capacity and increasing Share of Business in Passenger Vehicles and Light and Medium Commercial Vehicles.

TSBSL has been focusing on Oil and Gas segment and water pipe line projects in domestic and exports market to improve its share in the Pipe segment.

TSBSL has launched specific brands likeTata Structura and Tata Pipes in order to improvise its distributorship stratergies across the tubes and pipe segments.


TSBSL has developed a network of long-term customers and markets across the globe and has been consistently exporting upstream products like, Hot Rolled Coils and downstream products like Galvanized, Galume, Color Coated, Tubes and Pipes, Hardened

and Tempered steel across the globe. In FY20, the Company will be focusing on downstream exports by increasing its presence in Europe, Africa, South East Asia and Latin America, and creating market for high-end HRC exports like structural steel. In this journey, successful approval from SIRIM, Malaysia has opened a new market for the Company for structural grade Hot Rolled Coils.

The Company has a policy of exporting approximately 10% of its sales volume across various products to its strategic key customers and international markets.

Depending on the market conditions, i.e. the demand and supply, international steel prices and requirements, the Company flexes its volume throughout the year


In FY19, TSBSL has taken a step ahead by developing high-end products for its customers viz;

i) 11 skin panels approved from indigenous Hot Rolled Coils at one of its major automotive customers;

ii) Color coated for export, Galvanize for HVAC, HandT and HTSS;

iii) Product approval for API X 70 for line pipe segment;

iv) Increase in production of value added grades (Scarfing grades, MC, HC, peritectic) as per requirement of the market.


As a responsible steel producing company, TSBSL is totally committed to the environment. With improved environmental practices, compliance with key statutory committments has increased considerably with further plans to achieve the level of industry standards. TSBSL is committed to building a culture of zero tolerance on environmental degradation. This is supported by various key initiatives with capital investments on projects like Commissioning of Coke Dry Quenching (CDQ) #2, dedusting cars of Coke Oven Battery (COB) 1, Electrostatic Precipitators of sinter plants, control of SOx and NOx at power plants, revamping of bag filters, and commissioning of Effluent Treatment Plant (ETP) 3.


As a Tata Steel Group company, The Company is committed to "ZERO FATALITY". With this goal in mind, TSBSL ensured that there is 100 % usage of PPEs, resulting in a sharp drop in First aid incidents.

Other initiatives taken to inculcate the importance of safety were: Usage of specialized Personal Protective Equipments like fire resistant jackets, competency building across various levels by imparting the safety leadership training, introduction of key policies on safety and their implementation, and formation of safety governance committees and sub-committees at all locations.

It is always imperative to minimize safety risks, and this is being done by introduction of specialized vendors for scaffolding, working at heights, and elimination of hydra cranes; Contractors safety management (Contract Leaders Awareness Program on Safety); imparting training to employees; Implementation of Positive Isolation; establishment and awareness of road safety management and development of heavy vehicles parking places.

TSBSL has chosen IT as the key enabler to take the Safety journey forward, by Introduction of "Ensafe" - an online platform to monitor the overall safety progress of the organization.


Global Steel Demand after a contraction of -3.0% reported in 2015, is continuously growing and in 2019 the demand for steel is expected to remain on the positive side. While the robustness of steel demand recovery seen in 2017 was carried forward to 2018, risks have also increased. Rising trade tensions and volatile currency movements are increasing uncertainty in the global steel industry. For year 2019, it is forecasted that the global steel demand will grow by 1.3% reaching to 1,735 MnT in 2019.

Imports and export remained steady where India remains a net importer of 1Mn T. Higher imports will further put pressure on domestic prices. The significant rise in thermal coal production does support the rising steel production in the country, which particularly finds application in Sponge Iron industry. However, its availability to the steel sector has also been scarce, as the government continues to prioritize power plants for their supplies. There has been an upsurge in imported coal sourcing. The coal- based steel, power and aluminum plants continue to face supply-related issues due to unavailability of adequate railway rakes. The government is also taking measures to resolve the logistic issue for smooth supply of raw materials.

The announcement of trade war truce between the Unites States and China eased the trade tensions between the two countries in the short term. For now, US will postpone rising tariffs on Chinese imports for a fixed period of time while China pledged to purchase more US goods among others making trade war truce a win-win situation for both countries.

A recent World Steel Association study of India, conducted in collaboration with the Indian Steel Association and the support of Indian member companies, identifies the construction sector as a pan-India steel demand driver on the back of strong infrastructure development and housing demand, especially affordable housing. Projects like industrial corridors (connecting existing industrial cities and develop manufacturing sectors) and Sagarmala (connecting states through waterways) will increase Indias connectivity, reducing logistical costs of transportation across Indian states. The Smart Cities initiatives will further boost urban infrastructure investment.

In FY19, TSBSL focused on stabilizing operations, logistics and streamlining raw material sourcing, enabling best ever performance across all product lines. Through better financial prudence in working capital and credit management, the Company saw significantly strong business performance in all quarters.

During the year under review, your Company was under the CIRP Process until May 18, 2018 and a resolution professional was appointed by the NCLT to manage the Companys operations as a going concern. A new management was appointed on May 18, 2018. In accordance with the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the new management has on best effort basis and considering the complexity of the operations, including challenges in implementing the Resolution Plan, put in place a framework of risk management to identify and mitigate risks to the strategic objectives of the Company.


The Board of Directors of the Company is responsible for ensuring that Internal Financial Controls have been laid down in the Company and that such controls are adequate and operating effectively. The foundation of Internal Financial Controls (IFC) lies in the Tata Code of Conduct (TCoC), policies and procedures adopted by the Management, corporate strategies, annual business planning process, management reviews, management system certifications and the risk management framework.

During the year under review, the Company was under the CIRP Process until May 18, 2018 and a resolution professional was appointed by the NCLT to manage the Companys operations as a going concern. A new management was appointed on May 18, 2018. The new management has on best effort basis and considering the complexity of the operations, including challenges in implementing the Resolution Plan, put in place a framework for Internal Financial Controls.


With an employee strength of ~ 5700, the Company strives to become an "Employer of Choice". To achieve this goal, the Companys HR Policies and Practices are being geared up. Safety is of utmost importance and deployment of safe practices has been done with a view to develop safe behavior as well as safe workplace. The leadership has been a role model and has provided all the support to develop good HR practices, so that employees are nurtured well and are positively engaged.

In order to bring about Transparency, Uniformity and Consistency, several policies have been developed for the employees, which have been well received and have provided an empowered environment to employees. A cadre of professionals is being built for which recruitment has been done from several institutions of repute. For social security, all employees have been covered under insurance and contractor employees have been provided "Suraksha Scheme". Employees are now being evaluated through a Performance Monitoring System (PMS) and accordingly rewarded. This has brought about fairness and transparency.

For enhancing data integrity and providing better employee experience, a cloud based HR Information System with Employee Self Service has been put in place.

Industrial Relations during the year were harmonious. The Company is in the process of cultural integration in which good policies of the Organization are encouraged and retained while best policies are being formulated.


Statements in the Management Discussion and Analysis describing the Companys estimates and expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.