TransIndia Real Estate Ltd Management Discussions

Macro-economic overview

Global

The global economy has demonstrated sustained resilience, showcasing stable growth despite previous disruptions and increased inflationary pressures. In CY2023, global economic growth reached 3.2%, a momentum anticipated to persist through CY2024 and CY2025. While headline inflation has moderated globally, core and services inflation have shown slower declines, reflecting ongoing tightening in labour markets. Major central banks in advanced economies (AEs) have kept policy rates steady to align inflation with targets. The effects of tightened monetary policies are gradually materialising, with policy rates and interest rates for corporate and mortgage loans increasing. Growth in advanced economies is forecasted to rise from 1.6% in CY2023 to 1.7% in CY2024 and 1.8% in CY2025. Conversely, emerging markets and developing economies are expected to maintain stability with projected growth rates of 4.2% for both CY2024 and CY2025.

As global inflation descends from its peak, economic activity continues to grow steadily, dispelling concerns of stagflation and global recession. With global headline inflation expected to decline from 6.8% in 2023 to 5.9% in 2024 and further to 4.5% in 2025, aided by tightened monetary policy and lower international commodity prices, the global economy remains on a path of gradual recovery.

Outlook

In the global economic landscape, a delicate balance of risks persists amid ongoing uncertainties. Geopolitical tensions, exemplified by conflicts in regions such as Ukraine and Gaza, cast shadows on the horizon, potentially triggering price spikes and unsettling interest rate expectations, thus impacting asset values. Furthermore, disparate rates of disinflation across major economies may induce currency fluctuations, posing challenges to financial sectors worldwide. Additionally, the convergence of high interest rates, growing household debt, and adjustments in fixed- rate mortgages poses risks to financial stability.

Central banks worldwide will play a pivotal role as the global economy transitions toward a soft landing, requiring careful management of inflation. Moreover, there is a critical need to refocus on medium-term fiscal consolidation to create space for essential investments and ensure debt sustainability. Tailored policy responses, along with reforms aimed at enhancing supply, are imperative to address inflation, reduce debt levels, promote higher growth rates, and narrow income disparities. Multilateral cooperation is essential to tackle challenges such as geo- economic fragmentation, climate change, and debt restructuring, laying the foundation for a sustainable, inclusive economic recovery and a brighter future.

India

The Indian economy continues its impressive upward trajectory despite global economic uncertainties. With growth of 8.2% in FY 2023-24, this marks the third consecutive year of over 7% growth. This remarkable expansion is driven by robust private consumption, sustained government investment in capital expenditure, and a prevailing positive sentiment.

Strong corporate profitability and improved financial institution balance sheets have facilitated steady credit flow across sectors, further fuelling economic activity.

Crucial sectors such as construction and manufacturing have played pivotal roles in propelling economic growth. The construction sector saw a remarkable surge with a double- digit growth rate of 10.7%, while manufacturing experienced substantial growth at 8.5%. Indias external sector remained resilient, with strong performances in both merchandise and services exports. Despite moderated growth in merchandise exports due to global demand fluctuations, they still reached a significant milestone of USD 451.1 billion in FY 2023-24. Foreign investment inflows remained robust, reinforcing Indias attractiveness as an investment destination.

Amidst evolving globalisation trends and the rise of Artificial Intelligence (AI), opportunities and risks abound. Balancing energy needs with the transition to cleaner sources, addressing skill gaps, and ensuring access to healthcare are imperative for sustainable growth. Short-term risks include volatile commodity prices and geopolitical tensions, while long-term challenges revolve around demographic shifts and technological disruptions.

While economic growth remained strong, inflation emerged as a concern. Despite moderation, with retail inflation easing to 5.09% in February 2024, the Reserve Bank of India maintained a cautious stance to ensure price stability and sustainable economic growth.

The governments economic policy agenda focuses on unlocking Indias growth potential. This includes revitalising the financial sector, streamlining business conditions to stimulate economic activity, and significantly enhancing both physical and digital infrastructure to bolster connectivity and boost the competitiveness of the manufacturing sector. Guided by this vision, the government has implemented a range of economic reforms aimed at fostering a business-friendly environment, enhancing the ease of living, and fortifying governance systems and processes.

In summary, Indias economic outlook remains strong and promising. By leveraging robust private consumption, strategic government investments, and a conducive policy environment, India is well-positioned to navigate global uncertainties and sustain its growth momentum. The continued focus on key sectors, prudent monetary policy, and comprehensive reforms will be crucial in maintaining this upward trajectory and ensuring long- term prosperity.

Outlook

Looking ahead, Indias economic outlook remains promising, with the Reserve Bank of India projecting a growth rate of 7.2% for FY 2024-25. Private consumption and public investment, particularly in infrastructure, are anticipated to serve as primary drivers of growth, supported by conducive fiscal and monetary policies. The moderation in inflation is expected to further bolster consumption, while fiscal discipline provides room for calibrated budgetary allocations, prioritising critical sectors for sustainable development. However, to sustain growth momentum, it is imperative to navigate carefully through risks stemming from global uncertainties and domestic structural reforms. Adapting to evolving global economic dynamics and implementing prudent policy measures will be essential to capitalise on opportunities and mitigate potential challenges in the path of Indias economic growth. Strategic focus areas include enhancing infrastructure, boosting private consumption, coordinating fiscal and monetary policies, addressing structural reforms, and prioritising sustainable development. By focusing on these areas, India can maintain its growth trajectory and achieve long-term prosperity.

Indias logistics industry overview

Indias logistics industry has undergone significant changes in recent years due to factors like GST implementation, improved road infrastructure, and increased automation. These changes have boosted logistics efficiency and led to a shift towards companies restructuring and consolidating their warehousing portfolios for more effective supply chain operations. This has resulted in a growing demand for larger, Grade A warehouses tailored to meet the specific needs of logistics businesses.

The logistics industry consists of three primary components: transportation, storage, and distribution. Transportation encompasses infrastructure such as ports, roads, railways, and airports, facilitating the movement of goods. Storage involves warehouses where goods are stored before distribution, while distribution encompasses service providers like freight forwarders, multimodal operators, and 3PL (Third Party Logistics) and 4PL (Fourth Party Logistics) players, who coordinate the movement of goods from suppliers to consumers.

Logistics is a crucial factor in a companys strategy and serves as a key differentiator. Market dynamics are anticipated to change with the consolidation of supply chain networks by major industry players. Going forward, the primary focus for users will be to reduce logistics costs.

However, the surge of e-commerce in India has catalyzed a shift towards more asset-heavy models. In response to the burgeoning online retail sector, Indian logistics entities are increasingly allocating resources towards bolstering warehousing and last-mile delivery infrastructure, aligning with the escalating demand for efficient logistics solutions.

Despite challenges, the Indian logistics market boasts global prominence, valued at USD 250 billion in 2021. Projected to ascend to USD 380 billion by 2025, with a Compound Annual Growth Rate (CAGR) of approximately 10.57%, this trajectory is underpinned by various growth catalysts. These include Indias robust economic expansion, the flourishing e-commerce landscape, governmental initiatives to fortify logistics infrastructure, burgeoning foreign trade, the upsurge in domestic manufacturing, and the establishment of logistics hubs and special economic zones.

The Governments initiatives to strengthen the logistics sector, including the introduction of policies, digital systems, and effective monitoring methods, have resulted in substantial progress for India. Over the past eight years, the country has climbed sixteen places in the Logistics Performance Index (LPI), rising from 54th in 2014 to 38th in 2023.

In 2023, total logistics expenditure in India stood at around 13 - 15% of GDP, a figure notably surpassing that of developed nations like Germany and the US, where logistics spending hovers around 8% of GDP. Over the past eight years, the country has climbed sixteen places in the Logistics Performance Index (LPI), rising from 54th in 2014 to 38th in 2023. Within the logistics market, transportation and warehousing constitute the primary segments, commanding shares of approximately 70% and 15%, respectively. Despite its significant size, the Indian logistics landscape remains predominantly fragmented, with unorganised players exerting considerable dominance. However, with increasing share of organised players and recent Governments initiatives, India is planning to reduce logistics cost to 8% of GDP, aiming for a 40% reduction within five years.

Introduction of the National Logistics Policy (NLP)

Unveiled in September 2022, the overarching lighthouse initiative for logistics infrastructure in the country was designed to create a unified policy environment and an integrated institutional framework for the development of the logistics sector.

A Developer - Occupier Impact Perception of the Policy

Key Focus	Aim of the Policy	Impact
Digitisation	Intervention for time efficiency, accurate - time tracking and procedural compliances through E - tolling, electronic documentation, digital verification	• Developer: Develop digitally compliant spaces with in-house Command Centre • Occupier: Plan for centrally - controlled Warehousing and Cargo Movement
E-marketplace	Digital platform for MSME to provide single-window certification, transparent price recovery, and direct access to consumers, barring intermediaries	• Developer: Increased potential customer base from MSME • Occupier: Medium/Small investors avail organised space at the delivery point
E-commerce Logistics	Emphasis on E-commerce and 3PL sectors for first/last mile connectivity by strengthening transportation/ storage infrastructure, multi-modal facilities, standardising logistics chain	• Developer: As demand spreads to Tier II and Tier III cities, developers can consider taking up speculative positions. • Occupier: Bring in efficiency in cargo movement and reduced dwell time in inter and intra-state movement
Comprehensive Implementation Plan	Dedicated Logistics Wing under Ministry, Integrated National Logistics Action Plan and composite development plan amongst various Ministries and State Governments	• Developer: Sectoral consolidation leading to the development of Big - Box warehousing that escalates the demand for competent developers in the organised warehousing space • Occupier: Shifting to Big - box development enabling environment for driving efficiency and reliability with increased logistics efficiency and minimising transit losses
Impetus to Development if	International best practices and formation of Centre for Trade Facilitation and Logistics Excellence for removal of bottlenecks in the overall logistics value chain	• Developer: Need to develop facilities compliant to handle partial/ full automation and robotic technology on the infra-logistics front • Occupier: Easy access to modern technology and compliant real estate assets
Warehousing special focus lA.	Promoting organised and standardised warehousing space with modem facilities and services is focused on capacity augmentation	• Developer: Opportunity would open up in specialised storage like agri-cargo storage, cold storage, air cargo, etc. Growth in investible assets for funding and development for future expansion • Occupier: Possibility of getting ready-built spaces with desired specifications conveniently etc

One significant factor contributing to the high logistics costs relative to GDP is the underdeveloped warehousing infrastructure. The lack of modern, efficient warehousing facilities and inadequate material handling equipment results in prolonged transit times, increased inventory expenses, and reduced productivity. The sector is dominated by small-scale warehouses (less than 10,000 square feet), accounting for nearly 90% of Indias warehousing space. As of 2023, Grade A and Grade B warehouses are evenly split at 50:50 for top 8 cities in India. However, the top 10 organised players hold only 51.5% of Indias logistics market, compared to approximately 15% in the US and 7-10% in China. The largest logistics companies in the US and China are 20-30 times and 10 times larger than their Indian counterparts, respectively, with GDPs that are 8 times and 5 times greater than Indias.

Indian warehousing industry

Warehousing has emerged as a pivotal sector within Indias rapidly expanding logistics industry. With the rise of organised retail, the demand for modern warehouses to store perishable and non-perishable goods has surged, underpinning the operations of the manufacturing and e-commerce sectors. The industry is in a state of rapid evolution, driven by changes in business practices and advancements in technology. Key users of warehouses include third-party logistics (3PL) providers, e-commerce platforms, and retail chains, followed by sectors like engineering, automotive, FMCG, and electronics. While Indias 3PL market is still nascent compared to global standards, it is experiencing robust growth, attracting new entrants keen to leverage its vast potential for accessing expertise, focusing on core competencies, and expanding market reach. Despite this growth, the warehousing industry remains largely dominated by the unorganised sector.

Benefiting from Indias economic growth trajectory, the warehousing sector has witnessed significant expansion over the past five years, boasting an impressive Compound Annual Growth Rate (CAGR) of approximately 23%. Projections suggest that this growth momentum will persist, with anticipated growth rates of around 19% by FY 2025-26.

The warehousing stock in Tier I cities in India has been growing rapidly with approximately 55% of warehousing stock (in terms of million sqm) located in Mumbai and Delhi NCR region

Warehousing industry growth drivers

Infrastructure push by the Government of India: The government launched the National Infrastructure Pipeline (NIP) with a forward- looking approach, aiming to invest approximately 111 lakh crores during FY 2020-25 to provide high-quality infrastructure across the country. Currently, the NIP encompasses 8,964 projects with a total investment exceeding 108 lakh crores at various stages of implementation. Additionally, there is a proposal to integrate the NIP and Project Monitoring Group (PMG) portals to streamline project tracking and execution.

E-commerce surge: The pandemic accelerated the shift to online shopping, creating a sustained demand for storage facilities as consumers continue to embrace e-commerce.

This trend, triggered by lockdown restrictions, has reshaped consumer habits, driving the need for more storage spaces to support online marketplaces. According to a report by the investment promotion and facilitation agency Invest India, Indias e-commerce landscape is poised for monumental growth, with forecasts predicting a substantial surge to $325 billion by 2030.

Growing manufacturing sector:

Indias emergence as a manufacturing hub, fueled by initiatives like Make in India and Atmanirbhar Bharat and the "China+1" strategy adopted by businesses, has attracted substantial investments. The Production Linked Incentive (PLI) scheme has further incentivised domestic manufacturing across sectors such as food processing, pharmaceuticals, and automobile components.

Sustainability mandates: The logistics industry is actively adopting eco-friendly practices to remain competitive on the global stage. Consequently, the Indian warehousing and logistics sector is embracing sustainability through measures like recycling packaging materials, utilising renewable energy sources like solar power and incorporating electric vehicles (EVs) for transportation.

Foreign direct investment in the logistics sector: There are significant opportunities for foreign investment as international companies look to tap into Indias growing logistics market. The government has facilitated this by allowing 100% foreign direct investment in logistics parks and warehouses, making it easier for foreign companies to invest in the sector.

Investment in technology: Technology is transforming Indias logistics and warehousing industry, driven by e-commerce growth and the need for efficient supply chains. Advanced tech adoption addresses visibility, transparency, and inefficiencies, significantly improving operations, reducing costs, and enhancing customer satisfaction. Promoting digital technologies like data analytics, robotic process automation, AI-driven analytics, and IoT boosts the logistics sector by streamlining operations, gaining real-time insights, optimising routes, enhancing warehouse management, and improving overall efficiency. Well-organised data provides deep insights into consumer trends, while sorting robots and Al-driven analytics optimise tasks and processing, enhancing logistics operations.

Growth in tier-2 and tier-3 cities:

The expanding penetration of online retail in smaller cities, driven by factors like internet accessibility and rising disposable incomes, is fueling demand for logistics and warehousing facilities outside metro areas. E-commerce expansion into these cities necessitates the acquisition of warehousing spaces for efficient last- mile deliveries.

Key Government policies and initiatives driving growth

Infrastructure status for logistics:

Granting infrastructure status to the logistics sector has enabled access to long-term credit at competitive rates, which facilitates growth and development. This status allows access to funds from insurance and pension funds, as well as External Commercial Borrowings (ECB), supporting the sectors expansion.

State-level logistics policies: Several states, including Maharashtra, Gujarat, Karnataka, Haryana, West Bengal, Telangana, Uttar Pradesh, and Assam, have formulated their own logistics policies. These policies address regional needs and contribute to the overall growth of the logistics sector by providing tailored solutions.

PM Gati Shakti initiative: The PM

Gati Shakti initiative aims to develop modern infrastructure and promote logistics synergy in India. With an estimated investment of US$ 1,316 billion, the project integrates various infrastructure connectivity projects, including the establishment of four multi-modal logistics parks and the expansion of the national highway network.

Dedicated freight corridor project:

The Dedicated Freight Corridor Project involves creating high-speed rail corridors dedicated to freight movement. Currently, two corridors are under construction, with three announced and one in the planning stage. These corridors enhance freight transportation efficiency and reduce transit times.

Bharatmala programme: The Bharatmala Programme is a nationwide initiative focused on optimising passenger and freight movement and addressing critical infrastructure gaps in the road network. This programme aims to improve road connectivity and efficiency, thereby boosting the logistics sector.

Multi-modal logistics parks: The creation of multi-modal logistics parks is designed to integrate different transportation modes, including road, rail, and waterways, to optimise logistics operations. These parks enable efficient cargo handling, lower transportation costs, and enhance supply chain management, ultimately strengthening the overall logistics infrastructure.

Green energy corridors: The Green Energy Corridors initiative aims to incorporate renewable energy sources into the national grid by establishing dedicated transmission corridors for green energy. This effort facilitates the logistics sectors shift to sustainable energy practices, enhancing environmental sustainability and reducing the carbon footprint associated with logistics operations.

Emerging trends in the warehousing sector

Indian cities among the largest urban centres globally -

Urban population in India in 2020 at 34.9% is expected to double by 2050 as per United Nations projections.

Urban Logistics

Type of Urban Logistics spaces	Size (Sqm)
Sort Centres	4,000 - 15,000
Dark Stores	250-2,000
Micro Fulfilment Centres	800-1,200
Cloud Kitchens	50-100
Hybrid Retail stores	NA

In addition to the increase in quality warehouse spaces, the Indian warehousing market has witnessed several notable trends:

• Increase in global investors: Indias evolving logistics and industrial sector has been attracting significant interest from global investors. As the countrys economy grows and its logistics infrastructure improves, foreign investors see great potential in investing in this sector.

• Shift in warehousing demand: The demand for warehousing space from 3PL (third-party logistics) and E-Commerce sectors is undergoing a transformation. With advancements in technology and automation, these industries are now seeking larger storage spaces to accommodate their growing operations efficiently.

• Rise of quick commerce: The quick commerce sector, driven by consumer demand for ultra-fast delivery services, is significantly impacting warehousing. This trend necessitates the development of micro-fulfilment centres and smaller, strategically located warehouses within urban areas to ensure rapid order processing and delivery, enhancing customer satisfaction and competitiveness.

• Emergence of urban logistics: The

urban logistics sector is becoming increasingly attractive in Tier 1 cities. As the market shifts towards on- demand solutions, there is a growing need for warehousing and distribution centres located strategically in urban areas to facilitate faster deliveries and meet customer expectations.

• Transformation of Warehouses into Fulfilment Centres: Omni-channel retailing has been reshaping the warehousing landscape in India. Traditional warehouses are evolving into fulfilment centres that cater to various sales channels, such as brick- and-mortar stores, online platforms, and more. This transformation enables higher optimisation of inventory management and order fulfilment processes.

Furthermore, Tier 2 and 3 cities in India, including Rajpura, Anantapur, Sri City, Coimbatore, Nagpur, Lucknow, Siliguri, Jaipur, Bhubaneswar, Guwahati, Hosur, and others, are attracting investments from institutional investors and developers. These cities are witnessing increased interest as they expand their logistics and industrial footprints across the country, offering potential growth opportunities for stakeholders in the warehousing sector. The total supply in Tier 2 and 3 cities stood at 15.8 million sq ft in 2023, with absorption at 12.4 million sq ft, marking an approximate 23% year-over-year increase in both compared to 2022.

About Transindia Real Estate

Transindia Real Estate stands as a leading force in the warehousing and other real estate assets, specialising in investing in and developing logistics assets essential for businesses to streamline their global and domestic supply chains.

Our solutions includes cutting-edge logistics parks, advanced engineering facilities, Container Freight Stations, Inland Container Depots and other real estate assets. By continually expanding our logistics investments and assets, we play a pivotal role in driving the nations growth and progress. By continually expanding their logistics investments and assets, they play a pivotal role in driving the nations growth and progress.

Setting themselves apart with an unwavering commitment to quality and adherence to international standards, Transindia Real Estate prioritises environmentally conscious and sustainable construction practices. We leverage the latest digital tools and technology to ensure the delivery of top-tier services, while strategically identifying and developing assets in locations that offer substantial advantages.

As part of the Allcargo Group, Transindia Real Estate benefits from synergies that enable seamless, end-to-end logistics solutions across various verticals. Their association grants access to a vast global network spanning 180 countries, facilitating comprehensive logistics solutions for our clientele.

Strategically positioned across high-potential geographies

Transindia Real Estate Limited has established a strong presence in major cities across India. We have successfully developed and exited Grade A projects in Delhi NCR (Farukhnagar), Bengaluru (Malur), Hyderabad (Patancheru), and Goa (Venkatpura). Our existing projects include Koproli (JNPT) and Hosur (Chennai). Additionally, we have acquired strategic land parcels in Bhiwandi (Mumbai), Hoskote (Bengaluru) and Mubarikpur (Delhi NCR) for development of industrial and logistics parks and other real estate assets.

These industrial and logistics parks serve as prime locations for leading players in sectors such as e-commerce, retail, 3PL, FMCG, and manufacturing. With our upcoming industrial and logistics parks, Transindia Real Estate Limited is well-positioned to meet the demands of emerging consumption centres, further expanding our footprint and reach across the nation.

Operational review

We have strategically acquired land parcels in prime locations, including Bhiwandi (Mumbai), Hoskote (Bengaluru) and Mubarikpur (Delhi NCR). Our goal is to develop logistics parks, Inland Container Depots (ICDs), and other essential real estate assets.

We have leased Veritas Logistics our state-of-the-art Koproli Warehousing Park, where the company has occupied 60,000 sq ft facility at JNPT.

Allcargo Supply Chain Private Limited, (3PL) service provider, has occupied a 150,000 sq ft warehousing facility at JNPT.

We executed a strategic transaction to optimise our portfolio. As part of this move, we divested our logistics park in Jhajjar, Haryana, to funds managed by Blackstone for an enterprise value of 625 crores. Additionally, we sold our remaining 10% stakes in other logistics parks, including Malur Logistics & Industrial Parks Pvt Ltd, Venkatapura Logistics & Industrial Parks Pvt Ltd, Kalina Warehousing Pvt Ltd, Panvel Warehousing Pvt Ltd, and Allcargo Logistics & Industrial Park Pvt Ltd, for an equity consideration of Rs 60 crores. The total cash proceeds from these divestments exceed 400 crores. These funds will be strategically utilised to fuel growth initiatives, expand operations across various locations, enhance the companys financial capabilities, and pave the way for fresh investments in emerging business opportunities.

Key Financial Ratios

Particulars	March 31, 2024	March 31, 2023
Current ratio	11.04	2.28
Net Debt - Equity ratio	0.05	0.11
Debt service coverage ratio	0.48	1.04
Return on Equity ratio	3.09%	2.15%
Trade Receivables turnover ratio (in times)	0.19	0.15
Trade payables turnover ratio (in times)	0.06	0.08
Net capital turnover ratio	4.73	3.39
Net profit ratio	39%	5%
Return on Capital employed	5%	4%
Return on Investment	4% - 8%	4% - 7%

Strength & Opportunities

STRENGTHS

• Extensive expertise: With a track record of delivering approximately 5.5 million square feet of warehouse spaces nationwide, the company demonstrates profound domain expertise and a keen understanding of local intricacies across various industries and regions.

It has also forged robust partnerships with global entities, leveraging global expertise.

• Integrated solutions: The company adopts an integrated approach, offering comprehensive solutions encompassing land acquisitions, approvals, and compliance, along with bespoke product development through a built-to-suit model. Additionally, it provides property management services.

• Global standards: All parks developed by the company strictly adhere to global standards embraced by institutional players, ensuring compliance with international specifications and incorporating green energy practices.

• Customer-centric approach:

Prioritising customer satisfaction, the company offers flexible and scalable spaces tailored to meet dynamic demand-supply requirements. It upholds stringent compliance policies, ensuring seamless operations for clients.

OPPORTUNITIES

• Growth potential: With projected transaction volumes expected to rise, the company has significant growth prospects in the warehousing sector, driven by increasing demand from E-commerce and third-party logistics (3PL) players.

• Supply chain evolution: Shifting consumption patterns have led to a transformation in supply chain dynamics, with increased demand for industrial and logistics spaces near consumption hubs, favouring the hub- and-spoke model.

• Expansion in Tier II & III Cities: Tier 2 and 3 cities are witnessing increased investment from E-commerce and

3PL players, making them attractive destinations for Grade A warehouse developments.

• Global supply chain diversification:

The decentralisation of global supply chains, fueled by factors such as the PLI scheme and PM Gati Shakti, presents opportunities for the company to cater to evolving global supply chain needs.

Human Resources

The company is committed to fostering a dynamic and growth-oriented workplace culture that prioritises the development and well-being of its employees. Through various learning and development programs conducted throughout the year, employees are provided with ample opportunities to enhance their skills and stay abreast of industry trends. Additionally, initiatives such as fitness programs are implemented to promote the overall physical and mental well-being of employees.

The Human Resource department plays a crucial role in driving the organisations growth by ensuring that employees are adequately supported and engaged. Their active involvement in fostering employee satisfaction and development makes HR a key facilitator of the companys overall success.

Internal Financial Control System and their Adequacy

The Board of the company has implemented Internal Financial Controls that are deemed appropriate for the nature and scale of their business. These controls are integrated into all processes across the various functions within the organisation. Regular reviews are conducted, and modifications or redesigns are implemented as needed to enhance efficiency, effectiveness, and overall control.

An annual internal audit plan, approved by the Audit Committee, ensures that all processes and systems undergo internal audits. Internal Auditors and Statutory Auditors support these efforts by validating the accuracy and fairness of financial reporting and confirming the effectiveness of the controls in place.

Through the implementation of the Internal Financial Controls framework, collaboration with Internal Auditors, Statutory Auditors, and external consultants, the company is capable of preventing and detecting fraud or errors. Moreover, it ensures the accuracy and completeness of accounting records and enables the timely preparation of reliable financial disclosures. These measures contribute to the companys overall integrity and financial transparency.