company profile 2018 q 3 - panbrotherstbk.com · pt teodore pan garmindo “tpg” pt berkah indo...
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COMPANY PROFILE 2018 Q 3
PT. PAN BROTHERS Tbk. & SUBSIDIARIES
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PT. Pan Brothers Tbk. & Subsidiaries
CONTENTS
COMPANY OVERVIEW 3
FINANCIAL OVERVIEW 19
APPENDIX 23
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PT. Pan Brothers Tbk. & Subsidiaries
COMPANY OVERVIEW
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PT. Pan Brothers Tbk. & Subsidiaries
PT. PAN BROTHERS Tbk.Vision:TO BE AN INTEGRATED AND WORLDWIDE APPAREL SUPPLIER
• Indonesia’s largest listed garmentmanufacturer.
• Well-established business founded in1980 and listed on the Indonesia StockExchange since 1990.
• Intense focus on exports – marketsinclude US, Europe, Asia, Canada,Australia and New Zealand.
• Long-standing relationships withnumerous top global fashion and apparelbrands, while maintaining strong workethics and CSR.
• Plants located in Banten, West Java andCentral Java with 26,626 sewingmachines and a production capacity of 90millions pcs Garment annually in 2017.
• Selective expansion in both upstream anddownstream segments.
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PT. Pan Brothers Tbk. & Subsidiaries
GROUP STRUCTURE
PT. Trisetijo ManunggalUtama27.98%
PT. Ganda SawitUtama19.86%
Public52.16%
PT. Pan Brothers Tbk
PT. Pancaprima Ekabrothers (99.91%) PT. Eco Smart Garment Indonesia (85.00%)
PT. Hollit International (51.04%) Cosmic Gear Limited (51.00%)
PT. Ocean Asia Industry (51.00%) PT. Prima Sejati Sejahtera (99.00%)
Continent 8 Pte. Ltd. (51.00%) PT. Teodore Pan Garmindo (51.00%)
PT. Apparelindo Prima Sentosa (99.00%) PT. Victory Pan Multitex (51.00%)
PT. Berkah Indo Garment (99.00%)
PB. Island Pte. Ltd. (51.00%)
PB International B.V. (100.00%)
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PT. Pan Brothers Tbk. & Subsidiaries
GROUP OVERVIEW
Business Garment Manufacturing
Group Companies
PT Pan
Brothers Tbk
“PBT”
PT Pancaprima
Ekabrothers
“PPEB”
PT Eco Smart
Garment
Indonesia
“ESGI”“PSS”
PT Teodore
Pan Garmindo
“TPG”
PT Berkah Indo
Garment
“BIG”
Brief Description
• Started in
1980.
• Manufactures
woven and
cut & sewn
knits
garments,
such as
padded and
light weight
jackets,
pants, short,
casual pants,
polo shirts,
golf shirts,
track suits,
sweat suits.
• Acquired in
2005.
• Manufactures
Technical,
Functional
and Active
Wear Jackets
and Outer
Wear suited
for Snow
Boarding,
Skiing,
Jogging,
Hiking, and
other Sports
and Outdoor
Activities
• Established in
2013 as a JV
with
Mitsubishi.
• Planned to
build 6
garment
manufacturing
facilities
• 4 Facilities
already built
in 2014.
• And expansion
of ESGI
expected to
be done in
2021.
• Manufactures
woven
garments
• Established in
2014.
• Manufactures
Technical,
Functional
and Active
Wear Jackets
and Outer
Wear suited
for Snow
Boarding,
Skiing,
Jogging,
Hiking, and
other Sports
and Outdoor
Activities
• Established in
2014.
• Manufactures
cut & sewn
knits and light
woven
garments,
such as polo
shirts, golf
shirts, track
suits, sweat
suit, board
shorts, swim
shorts.
• Established in
2016.
• Manufactures
Woven Garment
such as Casual
Shirts, Tops,
Casual Bottoms,
Casual Shorts,
Denims,
Garments
Dyeing.
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PT. Pan Brothers Tbk. & Subsidiaries
GROUP OVERVIEW
Business
Group Companies
Brief Description
Product Development and Marketing
“Hollit”
PT Hollit
International
• Acquired in 2011.
• A product development company focusing on the development and creation of latest trends in styling, finishing and material.
• Also manages the collection and production of world renowned fashion brands.
Continent 8 Pte Ltd
“C8”
Cosmic Gear
Limited
“Cosmic”
• Incorporated in Singapore.
• Engages in sourcing activities that allow the group’s products to reach wider international markets.
• A product development company focusing on the development and creation of latest trends in styling, finishing and material.
• Incorporated in Hong Kong to help the group better cater the international market.
• Engages in product development and material sourcing.
PB Island Pte. Ltd
“PBL”
PBLPB International
B.V.
PB Fashion B.V.
“PBF”
• Incorporated in Singapore.
• Engages in sourcing activities that will allow the Group’s products to reach more international markets.
• A product development company focusing on the development and creation of latest trends in styling, finishing and material.
• Incorporated in Netherlands
• PBF is in the business as an agent and engages in garment trading activities. PBF was set up to support the group’s activities
in Europe.
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PT. Pan Brothers Tbk. & Subsidiaries
GROUP OVERVIEW
Business
Group Companies
Brief Description
Sewing &
Embroidery
Thread
PT Victory
Pan Multitex
“VPM”
• Established in 2014.
• Produces various Sewing and embroidery thread.
Fabric Supply
PT Ocean Asia
Industry“OAI”
• Started in 2012.
• Produces various kinds of knit fabrics, such as single knits and double knits (Single Jersey and Lycra Single Jersey, Pique and Lacoste, Fleece / French Terry Interloop / Lycra Interloop, Jacquard Jersey) and flat knits.
Retail & Others
PT Apparelindo
Prima Sentosa
“APS”
• Started in 2013 engage in apparel retail business
• Launched its women’s fashion brand, ZOE label and ZOE Black in 2013.
• JV men’s fashion brand : S n P, Asylum , F T L, etc. in 2015.
• Launched women’s brand Wastu in 2017.
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PT. Pan Brothers Tbk. & Subsidiaries
PBRX MILESTONES
2013
2007
1980
2005
2012
2011Established PBT (Cut &
Sewn Knit OEM Factory)
a) Expansion of PPEB at
Boyolali (Woven
Factory)
b) Expansion of PBT at
Sragen (Woven
Factory)
Acquired PPEB (Light &
Heavy Woven Jacket
Factory)
Set up OAI (Apparel
material
manufacturer)
a) Expansion of PBT at
Boyolali (Woven
Factory)
b) Expansion of PPEB at
Boyolali
(Woven Factory)
a) Set up APS (Apparel Retail &
Brand etc)
b) Set up ESGI (Woven Factory)
Set up Cosmic Gear
(Product Development)
2014
2016
a) Set up Berkah Indo Garment at
Ungaran and Demak (Woven
Factory)
b) Set up PB International BV
(Buying Agent and Marketing
Office )
c) TPG Tasik expansion
Acquired Hollit
(Product Development
Company))
Set up PB Island Pte. Ltd.
(Product Development)
2017
a) Set up TPG at Bandung
(Cut & Sewn Knit Factory)
b) Set up VPM at Bandung
(Sewing and Embroidery
thread)
c) Set up PSS at Boyolali
(Woven Factory)
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PT. Pan Brothers Tbk. & Subsidiaries10
PT. Pan Brothers Tbk. & Subsidiaries
INDUSTRY OUTLOOK
Strong Outlook Despite Global Uncertainties
• Textile and garment exports from Indonesia are expected to grow from US$11.9bn in 2016 (https://ekonomi.kompas.com/read/2017 /04/12/194441726/) to US$ 75.3bn in 2030.
• Proportion of Indonesian exports in total global demand to rise from 1.7% in 2016 to 5% in 2030.
Indonesian Government Support on Textile &
Garment Industry
• Economic Policy Packages issued for labor intensive industries providingcorporate & payroll tax incentives, electricity tariff discounts.
• FTA IA-CEPA with Australia expected to be signed in 2018 and with theEuropean Union expected to be signed in 2019.
• Government has expressed support to strengthen the domesticmanufacturing industry and reducing dependence on commodity basedexports
Key Asian Garment Suppliers Face Growth
Constraints
• China faces rising labor cost and lack of labor supply.
• India & Bangladesh are constrained by inadequate infrastructure and rising labor wages.
• Vietnam & Cambodia have smaller workforce relative to Indonesia and areconstrained by rising labor cost.
Indonesian Retail Outlook
• Indonesia has huge population of more than 260 Million People.
• In 2030, it is expected the middle class income earners will reach 141 miopeoples from 2016 was 74 mio peoples.
Source: KemenPerin; Index Valuation Division API Publication; Goverment Policy Package;PWC Outlook; Boston Consulting; BPS
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PT. Pan Brothers Tbk. & Subsidiaries
INTEGRATED BUSINESS MODEL
Raw Material Production
Textile Manufacturing
Apparel Manufacturing
Branded Apparel Players
Retailers
FibreProduction
Spinning, Fabric weaving, knitting,
finishing
Designing, cutting, sewing, buttonholing, ironing
Marketing and distribution
Retail Outlets
� � � �
Upstream expansion Garment Manufacturing Downstream expansion
• Actively pursuing JV / M&A /
collaboration in fabric mills (synthetic
woven fabric )sector.
• Joint Venture with Mitsubishi to set up
6 factories in Central Java area, with 4
factories already built in 2014, and
another 2 factories in 2021
• Set up Teodore Pan Garmindo in West
Java in 2014, expansion at Tasikmalaya
in 2016 and another expansion in 2018.
• Set up product development company.
• Established Apparelindo Prima Sentosa
to increase presence in apparel retail
business, with in-house brand, ZOE
Label and ZOE Black, SnP, FTL, Asylum
and Wastu.
• JV / M&A with some local brands and
multi-brand retailer.
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PT. Pan Brothers Tbk. & Subsidiaries
KEY PILLARS OF GROWTHUpstream – Backward Vertical integration
• Expansion into new sectors, such as:
• Fabric mills (synthetic woven fabric)
• Target route: JV or M&A or Collaboration with Fabric mills.
Manufacturing Expansion
• Domestic
• JV with Mitsubishi (ESGI) increasing capacity to another 21 million pcs with total 48 million pcs.
• TPG (Teodore Pan Garmindo) expansion at West Java
• Automation in some production process in all garment facilities
• Year 2019 total setup capacity expected 96million pcs.
• Regional
• Expansion to other countries to improveaccess to target markets and avail of local competitive advantages.
• Target countries: Vietnam and other prospect countries.
Downstream – Channel Expansion
• Continuous expansion of brands, ZOE Label/ ZOE Black, SnP, FTL, Asylum and Wastu.
• Joint venture with local and overseas partners for retail brands.
• Collaboration with global fashion brand.
• Planning to enter the e-commerce sector.
• Target route: JV or M&A
Process Optimalization
• Automation in some process.
• Increasing capability in garment embroidery facility, garment printing facility, and garment wash / laundry facility.
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PT. Pan Brothers Tbk. & Subsidiaries
GARMENT MANUFACTURINGProduction and distribution spread across key Asian markets
Marketing Office
Rep offices
Plants
Indonesia
Singapore
Hong Kong
Taiwan
Indonesia
Tangerang
BoyolaliSragen
UngaranDemak
Vietnam
Manufacturing Garment Capabilities in Indonesia years 2017
CategoryTotal Machines
(Units)Manufacturing
Capacity (‘000pcs)
Mix catagories (Technical , Woven Garment and Cut & Sewn Knit)
26,626 90,000
The largest garment manufacturing capabilities in Indonesia
Key production facilities
Indonesia production facilities are situated across Tangerang in Banten; Bandung and Tasikmalaya in West Java; Boyolali, Sragen, Demak, Ungaran in Central Java
Strategically positioned throughout Asia with offices in Taiwan, Singapore and Hong Kong to serve customers in regional & global markets
Maintains close proximity to both customers’ regional offices in Hong Kong and Singapore as well as key fabric suppliers in Taiwan
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Fully support by secondary process such as: Garment Embroidery facility, Garment Printing facility, Garment Wash / Laundry facility
Support by Fabric mills producing various kinds of knit fabrics; and Sewing and Embroidery Thread. factory
PT. Pan Brothers Tbk. & Subsidiaries
ACCREDITATIONS ACCREDITATIONS
�ISO 9001:2015
�ISO 14001
�WRAP
�GSV
�SA 8000
�OHSAS
�C-TPAT
�BWI
�EDGE
SA 8000 ISO 14001:2004 ISO 9001:2015
Note:
ISO 9001 : Quality Management System
ISO 14001 : Environment Management System
WRAP : Workplace Environment Management System
GSV similar to C-TPAT : Global Security Verification Program
SA 8000 : Social Accountability Management System
OHSAS 18001 : Occupational Health & Safety Management System
Member of Better Work Indonesia (BWI): On improving working conditions in the
garment industry.
EDGE : Gender Equality Certification
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EDGE GENDER EQUALITY
PT. Pan Brothers Tbk. & Subsidiaries
AWARDSAWARDS
I Asia Corporate
Excelence & Sustainablility2017
Green Industry Award 2017
Top 5 GCG in Textile & Garment Award 2018
The Top 50 Companies2017
The Best Indonesian TPT Public Company 2018
Enterprise Risk Management 2018
TOP CSR 2018on Garment and Textile Industry
Human Capital Award 2018
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The Most Innovative Material Design Award 2018
Indonesia Export Award 2018
PT. Pan Brothers Tbk. & Subsidiaries17
• Providing sewing Trainers to Vocational Training Center
• Conducting Science and Technology Olympics regularly
• Awarding Scholarships to 3000 high performing High School
students from Central Java
• Awarding Scholarships to 100 University of Indonesia Students for
the bachelor degree program (2017 - 2021)
• Organizing Employment programs on Synergy investment in
association with Madrasahs and PonPes
• Receiving students on internships both technical and
management.
• Sponsoring medical trip to Papua organized by “The HOPE”
• Organizing health education through awareness programs for
cancer, HIV, etc
• Donation to victims of natural disaster in Central Java, Lombok
and Palu Sulawesi .
• Organizing blood donor camps on regular basis.
CORPORATE SOCIAL RESPONSIBILITY
PT. Pan Brothers Tbk. & Subsidiaries18
CORPORATE SOCIAL RESPONSIBILITY
Organizing blood donation camps on a regular basis
Awarding PT Pan Brothers Tbkas TOP CSR 2018
Awarding Scholarships to 3000 high performing students from Central Java High Schools (2014 – 2017)
Awarding Scholarships to 100 University of Indonesia Students for the bachelor’s degree program (2017 – 2021)
Organizing employment programs on Synergy investment in association with Madrasahs and PonPes
Sponsoring medical trip to Papua organized by “The Hope”
Donating to Lombok Earthquake 2018 Donating to Palu Sulawesi 2018 Eartquake and Tsunami
Donating to victims of natural disasters in Central Java
PT. Pan Brothers Tbk. & Subsidiaries19
FINANCIAL OVERVIEW
PT. Pan Brothers Tbk. & Subsidiaries20
GLOBAL PRESENCE – BY SALES
2013 2014 2015 2016 2017
30.46% 25.47%28.29%
26.40% 26.00%
30.43%
28.97% 19.88% 16.83% 16.78%
38.78%44.44%
50.79%55.70% 52.63%
0.33% 1.12% 1.05% 1.07% 4.59%
OTHERS
ASIA
EUROPE
USA
PT. Pan Brothers Tbk. & Subsidiaries21
FINANCIAL HIGHLIGHTS
SALES (US$m) GROSS PROFIT (US$m) / SALES
338.5 418.6
482.2 549.4
447.1
2014 2015 2016 2017 Q3 2018
39.6 53.6
65.3 76.6
62.1
2014 2015 2016 2017 Q3 2018
(%) 11.7% 12.8% 13.5% 13.9%
EBITDA (US$m) / SALES NET PROFIT (US$m) / SALES
21.7 28.5
38.9 42.2 40.6
2014 2015 2016 2017 Q3 2018
9.3 8.6
13.3
7.8
12.1
2014 2015 2016 2017 Q3 2018
(%) 6.4% 6.8% 8.1% 7.7% 9.1% (%) 2.8% 2.1% 2.8% 1.4% 2.7%
13.9%
PT. Pan Brothers Tbk. & Subsidiaries22
FINANCIAL HIGHLIGHTS
TOTAL DEBT & CASH (US$m) DEBT / EQUITY (x)
95.4
140.4
205.4
240.0 276.6
127.8
73.6 78.4 79.6 78.9
2014 2015 2016 2017 Q3 2018
0.5
0.7
0.9 1.0
1.1
2014 2015 2016 2017 Q3 2018
Total Cash
Total Debt
TOTAL ASSETS (US$m) OUTSTANDING SHARES (mn shares)
367.3
442.8
519.5 573.4
603.6
2014 2015 2016 2017 Q3 2018
6,478.30 6,478.30 6,478.30 6,478.30 6,478.30
2014 2015 2016 2017 Q3 2018
PT. Pan Brothers Tbk. & Subsidiaries23
APPENDIX
PT. Pan Brothers Tbk. & Subsidiaries24
SUMMARY – Income Statement(US$m) 2014 2015 2016 2017 Q3 2018
Net sales 338.5 418.6 482.2 549.4 447.1
% growth 99.6 123.6 115.2 113.9
COGS (299) (365) (416.9) (472.7) (385.0)
% of sales (88.3) (87.2) (86.4) (86.1) (86.1)
Gross profit 39.6 53.6 65.3 76.6 62.1
% margin 11.7 12.8 13.5 13.9 13.9
Selling expenses (5.3) (8.5) (13.3) (17.3) (9.2)
% of sales (1.6) (2.0) (2.7) (3.2) (2.1)
G&A (20.8) (28.0) (29.9) (31.3) (22.9)
% sales (6.1) (6.7) (6.2) (5.7) (5.1)
Operating profit 13.4 17.1 22.0 28.0 30.0
% margin 3.9 4.1 4.5 5.1 6.7
% growth 74.0 127.5 112.2 127.4
Net interest expense (0.9) (3..8) (6.3) (15.5) (14.8)
Other income (expenses) 1.5 (1.8) 2.6 (1.6) (0.6)
Profit before tax 12.9 11.5 18.3 11.0 15.8
Income tax expense (3.6) (2.9) (4.9) (3.1) (3.7)
Profit for the year 9.3 8.6 13.3 7.8 12.1
% margin 2.7 2.0 2.8 1.4 2.7
% growth 96.7 92.4 154.1 58.8
Net Profit (Loss) attributable to equity holders
9.6 9.4 14.6 9.3 11.2
% margin 3.0 2.2 3.1 1.7 2.5
PT. Pan Brothers Tbk. & Subsidiaries25
SUMMARY – Balance Sheet
(US$m) 2014* 2015 2016 2017 Q3 2018
Cash and bank balances 127.8 73.6 78.3 79.6 78.9
Trade receivables 51.8 65.7 80.5 95.6 105.1
Inventories 67.4 88.6 101.6 119.4 130.1
Other current assets 37.2 82.6 126.2 144.4 157.5
Total current assets 284.2 310.6 386.6 439.0 471.6
Tangible assets 75.8 122.9 123.4 121.3 118.8
Intangible assets 3.2 3.1 4.9 5.1 5.1
Other 4.1 6.3 4.6 7.9 8.0
Total non-current assets 83.0 132.3 132.9 134.3 132.0
Total assets 367.3 442.8 519.5 573.4 603.6
Short-term borrowings 12.4 5.5 15.9 1.8 1.9
Trade payables 48.8 60.4 57.9 59.2 48.4
Other current liabilities 13.2 20.4 28.9 34.9 27.7
Total current liabilities 74.4 86.3 102.7 95.8 78.0
Long-term borrowings (Syndication, Bonds, Etc) 82.9 134.9 182.2 237.0 273.6
Other long-term liabilities 8.5 5.7 6.9 5.7 5.3
Total non-current liabilities 91.4 140.6 189.1 242.7 278.9
Total liabilities 165.8 226.9 291.8 338.6 356.9
Shareholders' funds
Total shareholders' funds 186.2 197.0 210.7 220.3 231.9
Non-controlling interest 15.3 18.9 16.9 14.5 14.8
* As restated on PSAK No.24 (Revised 2013)
PT. Pan Brothers Tbk. & Subsidiaries26
RETAIL
Z O E label
ZOE label side with STYLE over trends, thinkTIMELESS is never outdated. ZOE label don’tbelieve MINIMALISM as underdressed – ZOElabel is confident to let our personality shinesand use our clothes to enhance it. For us, thecharm is in the MIX. The essence isEFFORTLESS CHIC.
ZOE label is an INDONESIAN BRAND, but ZOElabel source our fabrics from around theworld. Our design, sourcing & productionteams serve not us only, but also well-knowninternational brands. ZOE label take pride inour VALUE & QUALITY.
� Website: www.zoelabel.com
� Instg: @ zoethelabel
PT. Pan Brothers Tbk. & Subsidiaries27
RETAIL
Founded in 2017, Wastu is an Indonesian
brand specializing in the elegantly
understated piece and crafted from the ideas
of an Indonesian fashion designer, Auguste
Soesastro. Taken from Javanese Sanskrit,
Wastu means 'Architecture', which has been
Auguste's interest and has inspired him to
harmonize architectural lines, geometry, and
structures into wearable items. Wastu
embodies a way of life in stylish collections
affordable for any budget.
� Website: www.shopwastu.com
� Instg: @wastu_studio
PT. Pan Brothers Tbk. & Subsidiaries28
RETAIL
Salt n Pepper is a contemporary men casualbrand for upper middle class.
Inspired by designs and trends in the USA andEurope, Salt n Pepper is tailored to bring thelatest trends in a perfect fitting for Asian sizes.
It’s a catchy brand, unisex, global meaning andeasy for people to remember
Just like how food is tasteless without salt andpepper, we believe that clothes need to havedetails added to make it look great
Other brands are FTL and Asylum
Website: http://saltnpepperstore.com/
Instg: @saltnpepper_id and @asylumintl
PT. Pan Brothers Tbk. & Subsidiaries29
GARMENT MAKING PROCESS
Warehouse Fabric Inspection Lab Test
CuttingSewing
Inspection Metal Detection Embroidery/Print
PT. Pan Brothers Tbk. & Subsidiaries30
PT. Pan Brothers Tbk.Address : Jl. Siliwangi No. 178, Jatiuwung, Tangerang 15133, Indonesia
Phone : 6221-5900 718 Fax : 6221-5900 717
Email : [email protected]/ [email protected]/ [email protected]
Website : www.panbrotherstbk.com
PT. Pan Brothers Tbk. & Subsidiaries31
STRICLY PRIVATE AND CONFIDENTIALDISCLAIMERThis document is intended to be general information for discussion purposes only and does not create any legally binding obligations on the part of PBRX. The informationcontained in this document is based on materials we believe to be reliable, however we do not represent that it accurate, current, complete, or error free. Information inthis document constitute our judgment as of the period of preparing the document and are subject to change without notice. Any opinion in this information may notnecessarily represent the opinion of PBRX or any entity in the PBRX and Group. Any person and entity receiving this information shall treat the information as confidentialand not misuse, copy, disclose, or distribute, in whole or in part, without PBRX express written permission. PBRX disclaims all liability for any direct, indirect, consequentialor other losses or damages incurred by anyone that may arise from any reliance on this document or for the reliability, accuracy, completeness or timeliness thereof.