LTTS — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

MR. ABHISHEK – COO, · MR. RAJEEV GUPTA – CFO,

MR. RAJEEV GUPTA – CFO, MR. PINKU PAPPAN – HEAD, INVESTOR RELATIONS L&T Technology Services Q4 FY22 Earnings Call April 21, 2022

Disclaimer

Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve number of risks, and uncertainties that could cause our actual results to differ materially from those in such forward-looking statements.

L&T Technology Services Limited (LTTS) does not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.

Moderator · Conference Operator

Ladies and Gentleman, good day and welcome to the L&T Technology Services Ltd. Q4 FY22

Thank you very much, sir.

Ladies and gentlemen, we will now begin the question and answer session.

The first question is from Mukul Garg from Motilal Oswal.

Please go ahead.

Mukul Garg

Thank you for taking my question.

Amit, I think good show on winning another $100 million deal this quarter.

I just wanted to dig a bit deeper into your FY23 guidance of 13.5-15.5%.

If you look at the kind of deal flows you guys have been doing, as well as the growth which you have been delivering, it seems a little bit subpar.

If we also look at your long-term guidance around 19-20% range, this looks like quite below that.

So, if you can just help with the pulls and pushes of the revenue growth over FY23, the impact of macro and does this imply that your long-term growth will be more back-ended?

Amit Chadha

Mukul, thank you so much for that.

I take you back about 12 months when we had started with a guidance of 13 to 15 last year as well.

Mukul, there’s a mantra that we're using outside of Profitable, Sustainable, Inclusive growth and it’s very simple - commit what you can deliver and deliver what you just committed, probably do more.

So, we are confident of 13.5% to 15.5% at this stage in spite of what we're seeing coming out on a macro scale, as well as what you have been hearing about inflation, recession, etc. So, we are comfortable with that range right now.

As things change, we’ll let you know.

Number 2 is that we do see deal velocity has picked up for us through the year, and like I mentioned, our pipeline is at an all-time high.

Deal closures are there as well, but as you are aware, Mukul, there are variables that are there.

So, we do expect broad-based growth across from here on, like I’ve said, but we will continue to stay engaged, continue to try and do the best we can and take things forward.

Mukul Garg

So, Amit, sorry to push back a bit on this.

I do understand and appreciate the conservativeness which you are putting in numbers, but it would be great help if you can just kind of give some colour from different verticals perspective because over last two quarters, you have won 2 - $100M+ deals, and your vertical commentary continues to remain very-very good, but if you look at the lower end of the guidance, it does imply a very-very tepid kind of a performance throughout FY23. While it’s fine to be conservative, is this something, which you feel that is a realistic number right now?

Amit Chadha

It’s okay to push back.

There’s no problem.

We’re having a conversation here.

So, Mukul, if I look at Transportation, I do see the EACV segment as being a tailwind.

I see the differentiators L&T Technology Services Q4 FY22 Earnings Call April 21, 2022 we’ve created, the labs we’ve created, the traction we’ve got, the excellent client relationships we’ve got across U.S. and Europe plus the empanelments we’ve done, etc. Continue to be bullish on this segment in terms of growth as we move forward, and that’s in each sub-segment, it’s Auto, Trucks & Off Highway, Aero.

In the area of Plant Engineering, again, I know the market has changed in terms of people wanting smaller plants, local plants alternative from just-in-time, they’ve gone to just-in-case.

So, I do expect Plant Engineering also to continue to deliver healthy growth on an ongoing basis, don't see a problem in spite of the war, etc. Now, in the Hitech segment, Semcon will grow, but again you are aware this is the most competitive segment, red ocean if I may, for the engineering world.

We are establishing Metaverse as a vertical to get out of this red ocean part and get to a blue ocean part.

It will take some time.

So, therefore, we’re a little watchful there.

Though I’ve said that there are deals, there are closures, etc., it will take a little bit time there.

In terms of Industrial Products, last two quarters or last quarter, we’ve been tepid, and the broad reason is not that we don't have deals or we don't have people or we don't have client relationships.

It’s a function of our discrete manufacturing clients facing various headwinds in their businesses because of supply chain.

Now, I do believe short term they will overcome it, but will they come back to a great extent, etc., to be seen.

Finally, Medical, we’ve again made investments.

In fact, I would rate my own solutions in Medical to be at par with EACV, which has grown the fastest, but there are certain challenges because Medical segment by nature is a little more conservative.

So, I am bullish about my own prospects, if I may, and our own capabilities, our technologies, our engineers, but at the same time, I am mindful of the fact that we have a full year to go by.

I assure you, Mukul, that as we go through the year and when I come back and talk to you again at the end of Quarter 1, I will provide whatever updates I can as I've done in FY22. Rest assured, we are baking a lot of this plus and minus to provide you what we’ve provided.

Of course, like I always say, internal aspirations and targets are higher.

Moderator · Conference Operator

Thank you.

The next question is from Vibhor Singhal from Phillip Capital.

Please go ahead.

Vibhor Singhal

Good evening, sir.

Thanks for taking my question and congrats on great execution once again.

Just one question, I wanted to get your idea on how we are looking at the business in terms of the commodity price hike and the growing inflation.

If I see, most of our business is basically pertaining to the manufacturing industry.

You mentioned in your comments about Industrial Products that that segment is facing those headwinds.

I think at some point of time, the Transportation vertical and Plant engineering vertical too will probably start seeing the heat as well.

So, in terms of your conversation with the clients, has anything started on that front that may be the clients are expecting some kind of headwinds because the primary concern in the industry today is not what clients are looking at today, but that inflation today could lead to lower capital tomorrow, which could lead to lower IT spend day after tomorrow.

So, anything on that front that you are getting from the client in terms of your conversation, it would be really helpful.

Amit Chadha

Sure.

So, if I may share with you, recently in Europe, 3 countries, 5 days, 18 meetings, similar stuff happening in the U.S. In fact, our CBO is there, continues to travel.

In fact, there are meetings happening every day now, people are meeting.

Number 1, what we are hearing is people talk about the invasion of Ukraine, but they are yet figuring out the impact.

In fact, one L&T Technology Services Q4 FY22 Earnings Call April 21, 2022 client told me that I actually boarded up my factory in western Ukraine and I continue to work.

People go in the morning, come back in the night, and they have put blackout windows and they continue to work inside the factory.

I was surprised, but they do that.

Another customer told me that he has actually sent out food, cots, medicine to his employees in China where they are in the office for the last five days and will remain there for another two weeks, and for their families, they have been providing food, vegetables, etc. because he has to do it for his employees.

So, you think about the extent to what people are doing to continue to stay normal.

This is the new normal, unfortunately.

So, what we’re hearing is, one is invasion of Ukraine, but people are not sure where it will go.

Second, we are hearing people talk about inflation and believe me some of these guys… I was with a COO two weeks ago of a 15 billion revenue company.

Gentleman was sharing with me.

He said “I've already taken cost actions to help me with some of the commodity pricing increase I’m seeing,”.

So, there are three things that are coming out with all this.

One, clients continue to turn towards digital to take care of absenteeism at factory and workplaces, as well as for the reliability of operations and predictability of operations and people are engaging us in that.

Second, people continue to look for alternative sourcing, alternative material, alternative components to make sure that they are able to continue to deliver.

Third, we are seeing that there is a workforce gap that is there between demand and supply at this stage.

So, they continue to look at companies like ourselves to provide them with that extra talent and burst of projects to be able to take things forward.

So, if I was to look at, and I said this while I was talking to Mukul, but EACV is a tailwind right now.

I do see this carrying on for the next three years for sure.

Our digital products, digital manufacturing, both of these have not paid out yet.

I do believe that it will continue on.

Medtech is starting off, and you can see peer results, others, Medtech will grow, but it will take some time to pickup speed.

Sustainability, people are talking about alternative material, alternative sourcing, zero liquid discharge, carbon neutrality, energy storage, etc., but again this will take a little bit more time to come up.

So, I do believe that some of these are right now peaking or are at high and will continue for the next two years.

There are others that will pick up.

So, from a demand standpoint, I do feel fairly optimistic.

I have not heard of any reversals or anything, knock on wood, at this stage.

Vibhor Singhal

Got it.

Just my last question is on basically the salary hike and the margins front.

So, if you could just share plans as to when do we intend to give salary hike in this financial year?

What is expected to be the quantum and is the onsite salary hike as again we have seen across the broad, is it expected to be higher than earlier years because of the higher inflation in the US and the European countries?

Amit Chadha

Let me take a part of the question and then I will handover to our CFO Rajeev to answer the other part.

One, I want to tell you that we did do some positive corrections because somebody told me when we say correction, they may think of negative.

Negative doesn't work in our industry, it’s only positive.

So, we did positive corrections in January for critical talent in the Company because that was required and the margins that you see are after that correction.

Number 2, our regular hike cycle, increment cycle, is July.

We are right now in the middle of working out all those details and taking that forward, but we will make sure we are looking at ring fencing talent, we're looking at various options and various ways to do it and we will L&T Technology Services Q4 FY22 Earnings Call April 21, 2022 continue to do that because finally we have to look at a sustainable ongoing growth enterprise rather than worry about really just a short-term.

With that said, Rajeev, you want to add this please.

Rajeev Gupta

I think you also talked about the margins part and I think as most of you would have seen, we have improved on the EBIT margins over the last five quarters and in quarter 4, we have held at the same level as quarter 3.

Now, like I said in my opening commentary, we will have headwinds and tailwinds to manage.

The tailwinds will continue to be growth and quality of revenues.

Second, if you look at some of the operational metrics, we did hire close to about 3,000 freshers during the year.

You have seen that utilization has come down in Q4. We believe many of these freshers will become billable as we enter into FY23. Operational efficiencies, I think, we talked about sustainable operating model.

A large part of FY22 really has been about building fresher talent and improving on the pyramid.

Our C&B cost as a percentage of revenue has indeed come down.

So, we feel that is going to be another lever that should play in our favor.

So, these are some of the tailwinds.

While I talk about the tailwinds, of course, I should also talk about the headwinds.

So, we believe that you will see savings that we had in FY21 and FY22 with COVID almost settling down now, travel will start.

It’s almost begun to show up as Amit talked about.

Most of our sales folks are travelling, meeting clients.

So, we expect that it will almost normalize in FY23. Attrition and intermittent wage hikes that will be another headwind that we will have to manage and last but not the least, we will continue to invest both in organic and inorganic growth, but all in all, our aspirations will be to maintain at 18% plus margin levels going forward in FY23 as well.

Moderator · Conference Operator

Thank you.

The next question is from Nitin Padmanabhan from Investec.

Please go ahead.

Nitin Padmanabhan

Good evening.

Thanks for the opportunity.

First, on the large deal, is it possible to give the rough tenure for these deals and second is the number of large deals seems to be accelerating and you also mentioned that the pipeline also looks very strong.

So, just wanted your sense.

If you just compare may be the last many-many years, I think last year and this year, the last two years you have actually seen a lot more large deals and your commentary suggests that it’s picking up, so from a growth perspective fundamentally, if we think longer-term, does this add a lot more predictability for you when you think about it, just wanted your thoughts on both these please.

Amit Chadha

Number 1, on the large deal, this is USD 100M+ deal, as we have explained and in fact the press release has details on it, USD 120M+ that’s there and generally these aircraft design cycles are across 6 to 8 years and that’s the period that this deal will run through starting up sometime in Q2, as we start.

So, that is number 1.

Now, in terms of traction, there are three things that we have fundamentally tried to change here.

Number 1 is that, as we look at solutioning, we actually step back always and see what are the white spaces that we should be investing in and spending time on.

For example, if I look at the EACV space, we worked on developing in-house EV components.

We also worked on creating our own integrated e-axle solutions.

If I look at medical technologies, we worked on creating a cuffless non-invasive BP algorithm.

We created our own chest rAI.

I can go on and on, but broadly what I am trying to explain is that we look at the white spaces, we look at the technology, we do a buildup.

What that does is that rather than being L&T Technology Services Q4 FY22 Earnings Call April 21, 2022 known as a commodity supplier, we end up trying to gain mindshare before we gain market share, and once you've gained mindshare, then market share becomes a byproduct of that.

In addition to that, while we do that with our CTO team and our practice teams that we are doing, our CSO/CBOs have actually got a large deals engine full-time focused, which has got finance participation, delivery participation, etc., it’s a cross-functional team working 18/7 globally to continue to seed new ideas, create new ones, answer, etc. So, knock on wood, I do have confidence that the momentum is there, and like I said again, blessed to have a team that continues to think every day on newer ideas, newer things on how we can add value to customers.

How do you unlock because once you unlock value for customers, what we get is a byproduct of that.

So, with that said, I do believe that the momentum will continue.

One thing I will tell you that we learnt last time and I was sharing with some of you that we now realize that USD 9.5 million deal should not be done, it should be a USD 10 million deal.

A USD 20 million deal should not be done, we should aspire for USD 25 million.

So that whole feeling in the Company is to do bigger, better, more and we’ll continue to strive towards that.

Nitin Padmanabhan

So, just as a follow up, are you suggesting that this is something that’s more LTTS driven, focused in terms of the large deal engine or is it that the market itself has more large deals by nature or is it both?

Amit Chadha

My first answer is, it’s only us and nobody can do it, but here is where we are.

I do believe that deals are being done across the board.

The engineering segment itself is seeing more mature traction.

I, however, do believe the differentiator LTTS brings is the CrossPollinnovation that we talk about and the proactive nature of trying to bake proactive ideas.

So, that I believe is a differentiator, but I do think the engineering industry overall stands to benefit.

Moderator · Conference Operator

Thank you.

The next question is from Salil Desai from Marcellus Investment Managers.

Please go ahead.

Salil Desai

Sir on the DSO days, when you look back at the year and the target versus what the actual numbers are, what are the specific areas where the mix happened and how will that change in the next one year for you to go back to the target.

Rajeev Gupta

Let me take this one.

So, clearly if you look at DSO, our focus is that we should be in the 95 day range, both for billed and unbilled.

As I mentioned in my opening commentary, we have come down in terms of unbilled DSO to 15 days compared to where it was 21 days in previous quarter.

So, that's an additional six days, what eventually it does is, it adds to the DSO billed.

Having said that, yes at about 102, we continue to work upon it, but despite the fact that DSO is where it is, our free cash flows are at 89-90% of PAT.

So, it has clearly been an area of focus we want to ensure the free cash flows continue to improve.

It also helps us to build the war chest for inorganic growth in future, but having said that Salil, our focus continues to be to improve DSO and you will see that over the coming quarters, we will bring more stability in the DSO.

Salil Desai

Sir, the miss last year, was it something specific, some events, some particular clients, which give you confidence that things will not recur next year for you to achieve the target?

Was there L&T Technology Services Q4 FY22 Earnings Call April 21, 2022 any specific areas where you think things will improve this year for you to achieve the target or was there something one off?

Rajeev Gupta

We did talk about in our commentary back in quarter 1 and also followed through in quarter 2.

We have been through systems implementation during this year.

Clearly, the idea is to bring more efficiency in the whole chain in the order to cash cycle.

We believe that should be an area, which would help us to improve DSO in the coming quarters.

There is nothing in specific that I will communicate either as a cause of concern or as a miss.

Moderator · Conference Operator

Thank you.

The next question is from Kawaljeet Saluja from Kotak.

Please go ahead.

Kawaljeet Saluja

Hi, everyone.

My question is on profitability or rather trying to understand the employee cost, Rajeev.

When I look at your blended employee cost, that is down 13% compared to where it was six months back and this is happening at a time wherein your onsite mix in revenues has gone up from 40.3% to maybe 45%.

I am just trying to reconcile how this has been achieved.

Now I understand that you have recruited freshers, but still the disconnect in numbers is quite sharp.

So, can you just help me with the same?

Rajeev Gupta

Hi, Kawaljeet.

So, I think two points, and I will also have our Chief Operating Officer, Abhishek add to it.

So, we did talk about the fact that we have hired close to 3,000 freshers during the year and I would have to step back, Kawaljeet, to really unfold the story.

In FY21, it being a COVID year, we did not hire employees and that clearly led to the pyramid bloating.

FY22 gave the opportunity to course correct on the pyramid.

It also gave us the opportunity with the growth to build for future capability.

We hired close to 3,000 freshers, which is what led to the reduction in the C&B as a percentage of revenue.

Your point around the growth in onsite, of course, and also trying to add back to the reduction in C&B, the fact being that the growth in onsite is more of a Q4 phenomenon and that’s more because some of the deals have started in Q4, you will see the follow through and growth in offshore happening over the subsequent quarters.

I will also have Abhishek share in terms of the operational aspects around the C&B.

MR. ABHISHEK – COO, · MR. RAJEEV GUPTA – CFO,

I think, Rajeev, you have covered it all.

We clearly saw a few quarters back, at least more than a year back, I would say, that the way the industry is moving, including the attrition part, if we do not invest in the freshers, we will not be able to have the right kind of operational excellence and also the engine we have built on training these freshers because we are not just hiring them and then hoping that they will start delivering.

We start engaging with the freshers at least six months before they join us while they are in their colleges.

So, when they come into the Company, the quality of freshers, the quality of training is to the liking of our businesses and customers, if I may, and I think that strategy has really paid off for us and the fact that we started this more than a year back is what is showing the results now.

Kawaljeet Saluja

Okay, thank you.

If I may ask a follow-on question and that is for Amit.

I am just trying to understand the guidance philosophy because you have given out a guidance of 13.5% to 15.5% and at the same time, you have implied in many different ways that the guidance is conservative.

Now, I am just trying to understand that at a philosophical level, do you think the guidance L&T Technology Services Q4 FY22 Earnings Call April 21, 2022 should be always based on the way you see the demand or do you think that we should try and guess every year what’s the kind of cushion that you have built into your revenue growth assumption and how does that change every year?

Amit Chadha

So, Kawaljeet, when we set up guidance and then we go through, we always look at all the positives and negatives that are there, the certainties, the deals won, the executions cycle, the supply side, we look at macroeconomics etc., it’s a fairly intense exercise that we do.

There’s an algorithm that we leverage internally to do that.

So, with that said, like I was explaining earlier also that in some of the segments, I’m fairly comfortable, confident, I can see it.

I have plans right up to the end of the year, believe me.

There are certain areas which I think are spotty at this stage from a variability standpoint, not our capability but variability standpoint, things could change, etc. So, that's where the guidance is coming from, but believe me Kawaljeet, we will continue to work on this on a continuous ongoing basis and continue to provide an update to you.

I, in fact, didn't say it, but I am truly thankful to everybody on the call that has worked with us through this last year, it has not been easy.

So, thank you.

Moderator · Conference Operator

Thank you.

The next question is from Abhishek Shindadkr from InCred Capital.

Please go ahead.

MR. ABHISHEK – COO, · MR. RAJEEV GUPTA – CFO,

Hi.

Thanks for the opportunity and congrats on good execution.

So, one question and partly answered by Abhishek in the previous answer, but it seems like our guidance, it seems like there is no challenge on the demand, but it is more on supply, and you alluded to the fact that you start training people six months ahead or when they are part of college, but just trying to understand that are they kind of billable immediately when they join or there is still a second level of training once they join and is there another way to get them billable early or if you can explain this process that could be really helpful.

Thanks for the question.

The way it works is, yes while we start engaging with them while they are in their colleges, we also engage with the faculty of the colleges so that they also train them in the areas what industry needs.

When they join us, we have them go through a more structured training process in our academy.

Do understand that while they are in colleges, still online virtual training, but we insist on these students working from our Mysore, Baroda campuses and do more in-person training because we are engineers, the work we do is hardcore.

They have to apply what they learn.

We have all these investment labs we have created.

We make them go through the labs that we have.

Our practice heads, practice managers engage with them and show them the kind of projects we do.

It’s a lot of hands-on training that we do while in the first many months that they are with us.

There is no specific timeline or something where we say they join in and in the next month, they will get billable, but it varies from technology to technology, customer to customer and that's the way it works, but yes, there is a lot of investment after they join, in them, before they can get into billable work.

Amit Chadha

And more than billable, if I may add, the philosophy is, we are doing engineering and technology work.

It's not a lot of commoditized work.

So, you are working on products, you working on designing a plant, you're working on a digital twin concept, etc., so unless we are satisfied that the work product will be beyond defect, will be super skilled, we don't want to deploy the people L&T Technology Services Q4 FY22 Earnings Call April 21, 2022 out.

So, at times, we will ask them to do a little bit more re-training in a certain area.

So, we want to make sure that our customers love us for the work that we do because growth will happen, profits will happen if clients love the work that we do.

If we get into delivery issues and all, it will be a mess for us.

MR. ABHISHEK – COO, · MR. RAJEEV GUPTA – CFO,

Just one last point.

We also put many of them through internal practice projects that we run, which creates technology assets on one hand, also in the process they get trained.

So, that’s the way it works.

This is really helpful and the second question is more about captives, so with the challenges especially in the Eastern European part, based on your conversation with customers from Europe, is there any heightened conversation about heading up incrementally or making India as probably an alternate destination right now, which may not be in their current setup?

Amit Chadha

So, there is data available across Russia, Ukraine and Belarus, there is about 275,000 engineering jobs that have gone offline, if I may, and that therefore has people moving, some of those to Lat- Am, some of those to India, some of those to other parts of Europe.

We continue to work with our key clients to support them through this difficult time.

There are certain areas we have started to work with them.

We have also established center in Poland last quarter.

So, we are working with and engaging with people that are moving from these countries into Krakow where we can offer them employment as well.

So, we are working on various parameters in this area.

I don't want to comment on one specific area or another.

I also want to behave like a good corporate citizen where I don't want to try and do this in the wrong way, but we are working with our clients, strategic clients to help them, some of them have their own centers there, which are no longer operational.

So, we are supporting them on some of the programs, so we continue to engage.

I don't want to put a number to it yet, but yes there is stuff that is happening in that area.

Moderator · Conference Operator

Thank you.

Ladies and Gentleman, we take the last question from the line of Sandip Agarwal from Edelweiss.

Please go ahead.

Sandip Agarwal

Good evening, thanks for taking my question, and congrats on good execution.

So, I had just one question on the supply side, while you have given a lot of detail on that front, but the key aspect, which I wanted to understand is how much is the difference between recruiting fresher to get them on billing in our ER&D industry versus the services industry.

Is that gap a couple of weeks or it is almost similar or it is higher?

Amit Chadha

So, look at it this way, answer will potentially vary in terms of the areas we are putting them on.

Some of the best analytical brains we are getting actually are people that are Masters that are coming out in specific areas in some places, some PhDs.

Now they will immediately get deputed to projects in very short term.

There are others, where do build plans with them, getting them up to speed, etc., so there is no one answer.

What I can definitely tell you because I have played both sides of this, I have been in IT industry and now in the engineering industry for more than a decade, it takes a little bit more, but it varies depending on vertical, skill set, technology area, L&T Technology Services Q4 FY22 Earnings Call April 21, 2022 that we have got but we do want engineers, we do need people with Masters, so the technology, the engineering pedigree, etc. is very important, can't do it with just bachelors, etc. that's a fact.

Sandip Agarwal

Sir, if I can ask one more question, we are hearing that some of these companies, which have got impacted because of the geopolitical situation have become very aggressive in recruiting from some of the key supply cities in India, has it impacted us or you are also seeing the same trend or you don't think it is something to be called out yet?

Amit Chadha

So, we have got centers in six cities.

Our primary focus to grow will be Chennai, Mysore, and Baroda with secondary focus on Mumbai, Hyderabad, Bangalore, and then Pune as needed.

So, we have centers in these places.

We are fairly diverse from that standpoint.

Yes, there is a talent war out there and we do believe it will take some time to shake out, but the only answer here is to go through with it and you know two things, one if we can offer a differentiated technology career path, road map, projects to our employees and our associates or people joining us, they will be excited, so kind of projects, etc. we have them do.

The second thing is that can we be inclusive, can we offer them opportunities outside of what they are doing right now.

That is why I mentioned go up to our website, look at the mission, vision, values, that we are doing now.

So, we are working on various parameters to see how we can get the excitement up.

Moderator · Conference Operator

Thank you.

Ladies and Gentleman, that was the last question.

I now hand the conference over to Mr. Pinku Pappan for closing comments.

Pinku Pappan

Thank you everyone for joining us on this call today.

We hope we were able to answer most of your questions.

Please reach out to me in case you have follow up questions.

Well, here's wishing you great and safe time and hope to meet you soon in person.

Thank you.

Have a good day.

Moderator · Conference Operator

Thank you very much, sir.

Ladies and Gentleman, on behalf of L&T Technology Services Limited, that concludes this conference.

We thank you all for joining us and you may now disconnect your line.

Note

This transcript has been lightly edited for clarity and accuracy.