Zen Technologies Ltd Management Discussions

Management Discussion and Analysis report

Global Economy

The global economy demonstrated remarkable resilience in FY24, navigating through a complex landscape of challenges and opportunities. Despite initial concerns about persistent inflation and geopolitical tensions, the world economy managed to achieve moderate growth, with global GDP expanding by an estimated 3.1% in FY24, according to the International Monetary Fund (IMF).

Advanced economies exhibited a mixed performance, with the United States showing robust growth of 2.1%, driven by strong consumer spending and a resilient labour market. The Eurozone, however, experienced more modest growth of 0.9%, grappling with energy price volatility and manufacturing sector weakness. Japans economy grew by 1.4%, benefiting from a rebound in tourism and exports.

Emerging markets and developing economies continued to be the primary engines of global growth, with Chinas economy expanding by 5.2% despite challenges in its property sector. India maintained its position as one of the fastest-growing major economies, with GDP growth of 6.3% in FY24.

Looking ahead, the global economic outlook for FY25 and beyond remains cautiously optimistic. The IMF projects global growth to strengthen slightly to 3.2% in 2024-25, with a gradual acceleration to 3.5% by 2026-27.

This outlook is predicated on the assumption of continued monetary policy tightening to combat inflation, gradual resolution of supply chain disruptions, and the absence of major geopolitical shocks.

Global Defence Industry

The global defence industry demonstrated robust growth in FY24, driven by increased geopolitical tensions, technological advancements, and a renewed focus on military modernisation across various regions. According to a report by Deloitte, the global defence market reached a value of approximately $2.1 trillion in FY24, representing a year-on-year growth of 3.8%.

SEVERAL KEY FACTORS CONTRIBUTED TO THIS GROWTH

• Heightened geopolitical tensions:

Ongoing conflicts in Ukraine and the Middle East, as well as rising tensions in the Indo-Pacific region, have prompted many countries to increase their defence budgets and accelerate military modernisation programmes.

• Technological advancements:

The rapid pace of innovation in areas such as artificial intelligence, unmanned systems, hypersonic weapons, and cyber warfare has driven investment in next- generation defence capabilities.

• Focus on interoperability and joint operations: Many countries are prioritising the development of integrated, network-centric warfare capabilities, driving demand for advanced command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) systems.

• Shift towards indigenous defence production: Several countries, including India, are emphasising self-reliance in defence manufacturing, creating opportunities for domestic defence industries and strategic partnerships with foreign companies.

• Growing importance of space and cyber domains: Increased recognition of space and cyberspace as critical warfighting domains has led to greater investment in related technologies and capabilities.

KEY TRENDS AND OUTLOOK

Looking ahead, the global defence industry is poised for continued growth, with several key trends shaping its future:

• Increased focus on multi-domain operations: Armed forces worldwide are prioritising the development of capabilities that enable seamless operations across land, air, sea, space, and cyberspace.

• Rise of autonomous and unmanned systems: The adoption of unmanned aerial vehicles (UAVs), autonomous ground vehicles, and unmanned underwater vehicles (UUVs) is expected to accelerate, driven

by their cost-effectiveness and reduced risk to human personnel.

• Emphasis on electronic warfare and directed energy weapons:

Growing investment in electronic warfare capabilities and directed energy weapons is anticipated, as militaries seek to gain an edge in the electromagnetic spectrum.

• Adoption of artificial intelligence and machine learning:

Al and ML technologies are increasingly being integrated into various defence applications, from predictive maintenance to autonomous decision-making systems.

• Focus on sustainability and green technologies: Growing environmental concerns are driving the defence industry to invest in sustainable technologies, including alternative fuels and energy- efficient systems.

• Increased importance of simulation and training systems: As military operations become more complex and expensive, there is a growing demand for advanced simulation and training systems to enhance readiness while reducing costs and environmental impact.

Market forecasts suggest that the global defence industry will continue to grow at a CAGR of 3.5-4% over the next five years, reaching a value of approximately $2.5 trillion by 2028-29, according to a report by MarketsandMarkets.

Indian Economy

The Indian economy demonstrated remarkable resilience and growth in FY24, emerging as one of the fastest- growing major economies globally. According to the Reserve Bank of India (RBI), Indias GDP grew by 7.2% in FY24, surpassing earlier projections. This robust performance was driven by strong domestic demand, a resurgent manufacturing sector, and continued momentum in services.

KEY FACTORS CONTRIBUTING TO THIS GROWTH INCLUDE

• Infrastructure push:

The governments focus on infrastructure development, particularly through initiatives like the National Infrastructure Pipeline, boosted economic activity and job creation.

• Digital transformation:

Rapid digitalization across sectors enhanced productivity and opened new avenues for growth, particularly in fintech, e-commerce, and digital services.

• Manufacturing revival:

The Production Linked Incentive (PLI) scheme attracted significant investments in manufacturing, supporting the Make in India initiative.

• Services sector strength:

IT, financial services, and tourism showed strong recovery, contributing significantly to overall growth.

• Domestic consumption:

Rising middle-class incomes and urbanisation fueled consumer spending, a key driver of economic growth.

Looking ahead, the RBI projects Indias GDP growth to moderate slightly to 6.8% in FY25, still maintaining its position as a global growth leader.

This outlook is supported by continued structural reforms, favourable demographics, and increasing integration into global value chains.

However, challenges remain, including inflationary pressures, global economic uncertainties, and the need for job creation to match the growing workforce. The governments focus on fiscal consolidation, while maintaining growth-supportive policies, will be crucial in navigating these challenges and sustaining Indias economic momentum.

GOVERNMENT INITIATIVES AND POLICY FRAMEWORK:

Atmanirbhar Bharat and Make in India: These flagship initiatives aim to reduce dependence on imports and promote indigenous defence manufacturing. The Defence Acquisition Procedure (DAP) 2020 introduced the Indigenously Designed, Developed, and Manufactured (IDDM) category, prioritising procurement from Indian vendors.

Defence Production and Export Promotion Policy (DPEPP) 2020:

This policy aims to achieve a turnover of $25 Billions in defence manufacturing by 2025, including $5 Billions in defence exports. It focuses on enhancing selfreliance, promoting exports, and creating a robust defence industrial base.

Strategic Partnership Model:

This model encourages collaboration between Indian private sector companies and foreign Original Equipment Manufacturers (OEMs) to establish manufacturing capabilities in India.

Positive Indigenisation List:

The government has notified four positive indigenisation lists, comprising 411 items that will be procured only from domestic industry, providing a significant boost to indigenous manufacturing.

Defence Industrial Corridors:

Two defence industrial corridors in Uttar Pradesh and Tamil Nadu are being developed to foster an ecosystem of defence manufacturing and innovation.

BUDGET ALLOCATIONS AND MARKET SIZE

The Indian government has significantly increased its defence budget to support modernisation and capability enhancement. In the Union Budget 2024-25, the defence allocation was Rs.6.21 Lakh Crores ($74.9 Billions), representing a 13% increase over the previous year. This includes Rs.1.72 Lakh Crores ($20.7 Billions) for capital outlay, aimed at acquiring new weapons, platforms, and infrastructure development.

The overall Indian defence market is estimated to reach $70 Billions by 2030, driven by the governments focus on modernisation and indigenization. The domestic defence production is projected to exceed $25 Billions by 2025, creating significant opportunities for both public and private sector players.

EXPORT OPPORTUNITIES

Indias defence exports have witnessed substantial growth, driven by the governments focus on promoting exports and establishing India as a global defence manufacturing hub. According to the Ministry of Defence, Indias defence exports reached an all-time high of Rs.15,920 Crores ($1.95 Billions) in FY24, marking a 54% increase over the previous year.

Key export markets include Southeast Asia, the Middle East, and Africa. The government has set an ambitious target of achieving $5 Billions in defence exports by 2025, supported by policy measures such as simplified export procedures, lines of credit for foreign countries, and marketing support to domestic companies.

KEY TRENDS

• Shift to Simulator-Based Training:

The Indian armed forces are increasingly adopting simulator- based training to enhance operational readiness while reducing costs and environmental impact. This trend is creating opportunities for companies specialising in advanced simulation technologies.

• Rise of Anti-Drone Systems:

The proliferation of drones has emerged as a significant security threat, necessitating the development of advanced anti-drone systems. This has led to increased investment and innovation in counter-drone technologies.

• Artificial Intelligence and Robotics: The integration of AI and robotics in defence applications is gaining traction, with focus areas including autonomous systems, predictive maintenance, and decision support systems.

• Cybersecurity and Electronic Warfare: With the increasing digitisation of warfare, there is a growing emphasis on developing robust cybersecurity solutions and advanced electronic warfare capabilities.

• Space and Satellite Technologies:

The defence sector is witnessing increased focus on space-based assets and satellite technologies for communication, surveillance, and navigation purposes.

CHALLENGES AND OPPORTUNITIES

While the Indian defence industry is on a growth trajectory, it faces challenges such as long procurement cycles, need for increased R&D investment, and competition from established < jl< >ba players. However, these challenges also present opportunities for innovation, collaboration, and strategic partnerships.

The Indian defence industry is at an nflect on po nt, po sed for sign flcant growth and transformation The governments push for self-reliance, coupled w th ncreas ng defence budgets and export opportunities, creates a conducive environment for both domestic and international players to contribute to Indias defence manufacturing ecosystem.

The Increasing Role of Simulator-Based Training in Armed Forces

The adoption of simulator-based training in armed forces worldwide is gaining significant momentum, driven by advancements in technology, cost-effectiveness, and the need for enhanced combat readiness. This shift is transforming military training paradigms, offering numerous benefits over traditional training methods.

TECHNOLOGICAL ADVANCEMENTS AND INTEGRATION

One of the primary drivers of the increasing role of simulator-based training is the rapid advancement in simulation technologies. Modern simulators incorporate cutting-edge technologies such as virtual reality (VR), augmented reality (AR), and mixed reality (MR), providing highly immersive and realistic training environments. According to a report by Marketsand Markets, the globa military simulation and training market is projected to reach USD 21 94 Billions by 2033, growing at a CAGR of 4 91% from 2023 to 2033

These technologies enable trainees to experience a wide range of scenarios, from basic drills to complex combat operations, without the risks associated with live training. For instance, VR headsets can simulate battlefield conditions, allowing soldiers to practise manoeuvres and tactics in a controlled environment

COST-EFFECTIVENESS AND RESOURCE EFFICIENCY

Simulator-based training offers significant cost savings compared to traditional live training exercises. Live training involves substantial expenses related to fuel, ammunition, maintenance, and wear and tearon equipment. In contrast, simulators reguire only the initial investment and periodic updates, making them a more economical option in the long run.

A study conducted by The Energy and Resources Institute (TERI) with the support provided by Zen Technologies revealed that the adoption of crew gunnery simulators could lead to potential financial savings of Rs.381 Crores over 30 years, while preventing the emission of 3,6761C0₂ eg within the same timeframe

ENHANCED TRAINING EFFECTIVENESS

Simulator-based training provides a safe and controlled environment where soldiers can repeatedly practise and refine their skills. This repetitive practice is crucial for muscle memory development and proficiency in complex tasks. Moreover, simulators replicate a wide range of scenarios, including rare and extreme conditions that may be difficult or dangerous to recreate in live training.

The use of data analytics and art iIh i,i it ilc llh :ence (Al) in simulators further enhances training effectiveness. Real-time monitoring and feedbackallow for immediate correction of mistakes, while data analytics can identify patterns and areas for improvement This data- driven approach ensures thattraining is tailored to individual needs, maximising learning outcomes.

FLEXIBILITY AND ACCESSIBILITY

Simulators offer unparalleled flexibility in training schedules and locations. Unlike live training, which requires specific terrains and conditions, simulators can be used anytime and anywhere This flex s ity s part eularly benefit: al for armed forces with diverse geographical deployments

Additionally, simulators can be used to train mu t pleun tss multaneous y, ensuring that all personnel receive cons stent and standard sed tra n ng Th s scalab ty is essential for large m tary organisations a m ogtoma nta nah gh level of readiness across all units

ENVIRONMENTAL AND SAFETY BENEFITS

Simulator-based tr; hi ling significant ly reduces the environmental impact associated with live training exercises. Traditional training often involves the use of live ammunition and heavy machinery, leading to pollution and habitat destruction. Simulators eliminate these issues, providing a more sustainable training solution. Safety is another critical advantage of simulators. Live training exercises carry inherent risks of injury or death, particularly in high-stress combat scenarios Simulators allow soldiers to train in a risk-free environment, ensuring the safetywh ilesti providingrea stic and challenging experiences

GLOBAL ADOPTION

Several countries have already recognised the benefits of: simulator-based training and are investing heavily in this technology The United States Department of Defense has integrated advanced simulators into its training programs, focusing on VR and AR technologies to enhance soldier readiness.

Similarly, the Indian Army has adopted simulator-based training for various apt >li( ations, includif ig tank gunnery, 1 light simulation, and anti-drone operations. In the Asia-Pacific region, which is expected to be the fastest-growing market for military simulation and training, countries ike China, Japan, and South Korea are also making significant investments in simulation technologies. These investments are driven by the need to modernise their armed forces and improve combat readiness in response to evolving security threats.

FUTURE OUTLOOK

the future of simulator-!>;ise?d trair line i inarmedf<>r< eslookspr<>mising,with i ontinued advancements in te< hnology

and inci easing re jr lition of its benefits.

Key trends shaping the future of military simulation include:

Mixed-Reality Training: The integration ofVR, AR, and MR technologies will i reate me >re immersive and realistic training envire >nments

AI and Data Analytics: The use of

Al at id data analytics will enhance training effectiveness by providing personalised feedback and identifying areas for improvement.

Real-Time Monitoring: Advanced monitoring systems will enable real-time assessment of trainee performance, ensuring immediate correction of mistakes.

Cost-Effective Solutions: The focus on cost effective training solutions will drive theadof >tion < >1 simu il; itors, reducing the Ini;it ii i;il burden < >1 live? I raining exercises.

Sustainability: the enviriinmental benefits i >1 simulate >rs will align with global effi >rtstoredui e< arbon footprints and [ >i i >mote sustainable practices

Big Opportunity in Counter-Drone Technologies

The proliferal i< >n of unmanned aeria vehicles (UAVs) or drones has emerged as a significant security challenge globally creating a pressn ig need for effective counter-drone solutions This trend has opened up substanl ial <ipportunitiesfor compar lies likeZenTechm >logiesthat specialise in counter-drone technologies

Accordn ig to a report by Global Market Insights, the counter-drone marketwas valued atapproximately USD 19 Bi ons in 2023, with a strong growth forecast reaching USD 15 3 Billions by 2032 at a CAGR of 26% This rapid growth is driven by the increasing incidents of security breaches by unidentified drones and the rising adoption of counter-drone measures by defence organisations worldwide.

In India, the counter-drone market is experiencing significant growth, driven by government initiatives and increasing security concerns. This growth is supported by the governments focus on indigenous defence production and the increasing adoption of drones across various sectors.

Recent geopi >litk al events have further underscored the urgency of developing robust counter-drone capabilities.

11 le ongcsing coni lict in Ukraine has demonstrated the strategic importance of drones n i modern warfare, with both sides extensivi ?ly u:;irig UAVs for reconnaissance and offerr .ive operations According to a report by the Royal United Services Institute (RUSI), the widespread use of drones n i this coni lict has "fundamentally changed the nature of warfare"

About the Company

/on Technolog es Limited, founded in 1993, is a leading provider of defence training & counter drone solutions and anti-drone systems Headquartered in Hyderabad, India, the company has estab shed tselfas a pioneer in the development of advanced e mulators and counter-drone technolog es Zen Technolog os n i ss on s to enhance the combat read ness of armed forces through innovative, cost-effective, and sustainable training solutions. The companys product portfolio includes a wide range of simulators, such as tank, driving, gunnery, and flight simulators, as well as comprehensive anti-drone systems designed to detect, track, and neutralise hostile drones.

Zen Technologies has a strong focus on research and development (R&D), with over 75 patents granted to date The companys commitment to innovation is refected in its continuous investment in R&D, which has enabled it to develop cutting-edge technologies that meet the evolving needs of defence forces globally Zen Technologies productsare indigenously desk ined and developed aligning with the lmiian government s Make in India¹ and Atmanirbhar Bharat¹ initiatives, whit:h aim to promote self- reliance ? it i defence manufacturing.

Financial Performance

The company achieved a revenue of Rs.430 Crores, representing a remarkable year-on-year growth of 167% This robust performance was driven by strong demand for both simulators and antidrone systems, as well as the successful execution of large orders.

Zen Technologies EBITDA for F Y24 stood atTI91 Crores, with an impressive EBITDA margin of 43%. This strong margin reflects the scalability and efficiency of the companys operations, underpinned by its asset-light business model. The companys focus on intellectual property creation, rather than capital-intensive manufacturing, has enabled itto maintain high profitability even as it scales up operations

1 he company achieved a record revenue of 3430 Crores, representing a year-on- year growth of 167% EBITDA margins rem; lined healthy at 43%. The profit after

I ax (PAT) stood at Rs.l29 Crores, recording a 243% growth overthe previousyear.

II ns strong performance resulted from the operating k verage built into the business model. The companys asset- light modi?l, focused oi i int<ilkictua property creat i< )n rather than capita intensive manufacturing, allowed itto maint; sin high profitability even as it grew ra: >kily

Zen Technologies order book as of March 31, 2024, stood atan all I ime hit:h of more than -31,402 Crores, providing strong visibility for future growth I he order book im ludes significant order:. in both the:.imi ilator and aril drone segments, with a he. ilthy mix of domestic and export orders. The export component of the order book now stands atapproximately 31%, refiectn ig l lie growing < jl< >ba recogr 111 ion of Zen lechnol. ><jies product:.

POSITIONING OF THE COMPANY AND OUTLOOK

Zen Technolog es s strategically positioned to capitalise on the growing opportunities in the defence training and counter-drone markets. The companys strong focus on R&D and innovation has enabled it to develop a diverse portfolio of advanced simulators and anti-drone systems, which are highly relevant in the current geopolitical context.

The Indian governments emphasis on self-reliance in defence manufacturing, througn n t at ves such asMake in Ind a and Atmanirbhar Bharat, has created a conducive environment for companies like Zen Technologies. The introduction ofthelncl genously Designed, Developed and Manufactured (IDDM) category in the Defence Acguisition Procedure (DAP) 2020 has further strengthened the companys competitive position, p or t s ng procurementfrom Indian vendors with indigenous content

The shift towards simulator-based training in the armed forces is another key trend that Zen Technologies is well positioned to benefit from. The companys advanced simulation

I (ichnologies provide a safe, cost- effective, and environmentally friendly alternative to traditiona live training exercises This trend is expected to drive sk :i lificant demand for Zen Technologies sir nulators in the coming years.

the increasing threat of drones and

II is need for effective counter-drone s< dutions present another significant opportunity for Zen Technologies. The companys cutting-edge anti-drone systems are designed to detect, track, and neutralise hostile drones, addressing a critical security challenge. Zen technologies strong focus on R&D and its growing portfolio of patents underscore its commitment to maintaining a eadership position in this rapidly evolving market.

Looking ahead, Zen Technologies is well-positioned to continue its growth trajectory, driven by strong industry tailwinds, a robust order book, and a focus on innovation and sustainability. The company has set an ambitious target of achieving significant growth in revenue for FY25

DESCRIPTION	MITIGATION STRATEGY
Escalating competition and aggressive pricing strategies by international competitors may threaten Zen Technologies market share it i Ini li;i These firms might significantly drop their prices to secure a larger market share.	Zen Technologies continually strives to offer superior quality products and innovative solutions, enhancing its value proposition. The company also leverages its strong, long-term relationships with clients, focusing on their specific needs and requirements.
Unfavourable macroeconomic conditions, such as a pandemic, could pose a risk to the company In such circumstances, governments may shift their focus to immediate concerns and possil >ly def >r tort 1 tse defence training.	Zen Technologies maintains a flexible business model, enabling it to adapt to changing macroeconomic conditions. Furthermore, diversification into new geographies helps mitigate this risk.
Much of Zen Technologies simulator production is based on specific clientfeedback, with no guaranteed purchase of the end product. This scenario places the company at substantia financial i isk.	Zen Technologies ensures clear and upfront agreements with clients, focusing on client engagement and maintaining transparent communication about product and service expectations and terms
The standard governmental policy of procurement from the lowest bidder could pose a threat to Zen Technologies. Occasionally, other vendors, having already amortised their development costs, can offer cheaper solutions due to their larger capacity.	Zen Technologies maintains a relentless focus on cost-efficiency and innovation in its operations, enabling it to compete effectively even in a low-bid scenario.
Disruptions in the supply chain can lead to production delays, increased costs, and customer dissatisfaction	Zen Technologies maintains a diversified supplier base, conducts regular risk assessments, and establishes contingency plans to mitigate supply chain disruptions. Collaborative relationships with suppliers and real-time monitoring also contribute to timely responses to potential disruptions
Rapid advancements in technology could render Zen Technologies products obsolete, impacting its market position and profitab ty	The company invests heavily in R&D to stay ahead of technological trends and continuously innovate its product offerings. Regularly updating and upgrading products ensures they remain relevant and competitive
As a technology company dealing with sensitive data, the risk of cybersecurity breaches and data privacy violations can lead to legal ab ties, reputational damage, and financia losses	Zen Technologies implements robust cybersecurity measures, conducts regular security audits, and complies with data protection regulations to safeguard against cybersecurity threats and data breaches.
Attracting and reta n ngsk ed and talented employees is crucial for the companys growth and success High employee turnover can lead to increased recruitment costs and loss of valuable expertise.	Zen Technologies offers competitive compensation packages, career development opportunities, and fosters a positive work culture to attract and retain top talent.

Key Financial Ratios

PARTICULARS	FY24	FY23	% CHANGE	REMARKS
CURRENT RATIO	2.26	2.33	-3.14%	-
DEBT EQUITY RATIO	-	0.02	-100%	Reduction in Debt and Increase in shareholders equity
DEBT SERVICE COVERAGE RATIO	23.28	6.13	279.67%	Due to repayment of borrowings related to debt component of Compulsory Convertible Debentures (CCDs) which were issued during the FY 2021-22, there is a decrease in Debt service coverage ratio in current year.
RETURN ON EQUITY	33.47%	12.32%	171.59%	Improved due to increase in PAT on account of increase in Revenue from operations, relatively lower fixed overheads
INVENTORY TURNOVER RATIO	1.57	1.48	6.46%	-
TRADE RECEIVABLES TURNOVER RATIO	3.66	3.77	-2.93%	-
TRADE PAYABLES TURNOVER RATIO	20.27	32.79	-38.18%	During the year, there has been a significant increase in average trade payables and with higher sales, material consumption for the year has also increased resulting into an decrease in the trade payable turnover ratio.
NET CAPITAL TURNOVER RATIO	1.34	0.97	38.20%	Revenue growth along with higher efficiency on working capital improvement has resulted in an improvement in the ratio.
NET PROFIT RATIO	30.04%	23.31%	28.83%	Due to new orders, favourable market conditions which resultant to increase in revenue from operations with better operation performance leads to increase in net profits during the year.
RETURN ON CAPITAL EMPLOYED	40.03	1733	131.06%	Due to increase in profit before interest and tax during the year because of revenue is recognised after performing obligations under contracts.

Human Resource Development and Industrial Relations

At Zen Technologies, we firmly believe that our employees are central to our accomplishments and progress. Throughout FY24, we have steadfastly invested in the skill enhancement of our workforce through a myriad of training programmes and workshops, paving the way for their professional development. Alongside this, we have been proactive in attracting and preserving top talent within our ranks.

Throughout the year, we have maintained productive and collaborative relationships with diverse stakeholders, such as suppliers, partners, customers, and of course, our own team members. As of March 31, 2024, we had a workforce of over 342 individuals.

Internal Control Systems and Their Adequacy

At Zen Technologies, we have established a comprehensive system of internal controls, tailored to align with the size and scope of our operations. Weve laid down a clear organisational structure with defined delegations of authority across our corporate functions. These are supported by documented policies and procedures that highlight our objectives and operational benchmarks.

Our internal controls are structured to provide reasonable assurance of operational effectiveness and efficiency, safeguard our assets from unauthorised use or losses, ensure the reliability of financial controls, and maintain compliance with applicable laws and regulations.

The Audit Committee, consisting of Zen Technologies Board of Directors, regularly monitors the adequacy of the internal control systems. They do this by consistently reviewing audit findings and supervising the implementation of internal audit recommendations.

A summary of the critical elements of the internal controls includes routine reviews by the Audit Committee comprising Independent Directors, regular examinations by an independent internal audit team, and continuous reiteration of Zen Technologies Code of Conduct across the organisation.

The Board is responsible for the overall process of risk management for the Company. In FY24, we evaluated the effectiveness of our internal financial control over financial reporting and have instituted adequate internal financial controls with reference to financial statements, commensurate with the size, scale, and complexity of our operations. During the year, such controls were tested, and no reportable material weaknesses in design or operation were observed.

Cautionary Statement

The assertions presented in this section outline the Companys objectives, projections, expectations, and estimations, which might be construed as forward-looking statements under the applicable Securities Laws and Regulations. Such forward-looking statements are constructed upon certain presumptions and projections of forthcoming circumstances.

The Company cannot assure that these presumptions and projections accurately reflect future outcomes.

The actual results could significantly deviate from those mentioned or suggested in the statements due to the impact of external factors that are beyond the Companys control. The Company is not obligated to make public alterations, adjustments, or revisions to any forward-looking statements based on the occurrence of any later developments, information, or events.