MANAGEMENT DISCUSSION AND ANALYSIS REPORT INDUSTRY STRUCTURE & DEVELOPMENTS Worldwide Gelatin consumption forecast to reach new heights, fuelled by aging population, focus on healthcare and increasing demand from end-use industries such as food & beverage, nutraceutical and pharmaceuticals. Additionally, rising standards of living, shift to vegetarian gelatin options, easy affordability and greater awareness in emerging economies such as China and India will promote further growth. However, despite the bright outlook, consumer concerns related to the safety and social aspects of using products derived from animal body parts continue to haunt industry prospects. Gelatin rebrsents an omnibrsent element in foods, drugs, and supplements used as a thickener, plasticizer, emulsifier, foaming agent, moisture retainer, texture enhancer, and binding agent. As a rich source of protein, Gelatin finds application in numerous end-use sectors including pharmaceuticals, food and beverage, photographic supplies, cosmetics, explosives, electroplating, dyes, papermaking and printing, among others. Rising standards of living, easier access to healthcare services, increase in disposable incomes and rapidly aging world population rebrsent key factors driving growth in demand for gelatin. Improving lifestyles in developing economies of India and China are also expected to promote market expansion. Lack of availability of competitive substitutes in the market makes gelatin one of the most indispensable feedstock in various end-use industries. India ranks topmost in the world in livestock holding and has the potential to utilize slaughterhouse by products to partly meet the growing requirement of animal feeds. OUTLOOK ON OPPORTUNITIES The rapid growth of the Pharmaceutical, and Health & Nutrition market in India and across the world, has resulted in stable demand for Gelatin. Your company shall seize this opportunity and increase its market sbrad. The Pharma industry meets around 70% of the Country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals & injectables. The domestic pharmaceutical market is expected to register a strong double digit growth of 15% on the back of increasing sales of generic medicines, continued growth in chronic therapies and a greater penetration in rural markets. Your Company is also planning to optimum utilization of the Capacities available in the Plant from next year. OUTLOOK ON THREATS, RISKS AND CONCERNS With the increasing demand for Gelatin in India, the last few years have witnessed an unbrcedented shortage for its key raw material i.e. crushed Bone. The impact of the global economic recession and the export of Bone/meat from the country resulted in a lower availability of crushed bones in India. This resulted in a steep increase in the raw material costs. The meat industry is now on a recovery path with the demand in the export as well as domestic markets picking up and we expect the raw material shortage situation to ease in the near term. CAUTIONARY STATEMENTS Statements in the Management's Discussion and Analysis describing the Company's projections, estimates, expectations or brdictions may be "Forward Looking Predictions" within the meaning of Applicable Securities Laws and Regulations. Actual Results may differ from such Estimates, projections. Factors which would make a significant difference to the Company's operations include achievement of better quality and good market price in market, Changes in Government Regulations and Laws, economic conditions affecting Demand/Supply and Other Environmental Factors over Which Company does not have any control. The Management has a firm belief that the strategic direction of your Company is sound and will continue to exceed the shareholders expectation, both short-term and long-term. For and on behalf of the Board (JASPAL SINGH) JOINT MANAGING DIRECTOR (JASNEET KAUR) DIRECTOR PLACE -BHOPAL DATE -01/08/2015 |