MANAGEMENT DISCUSSION ANALYSIS REPORT OVERVIEW: The Indian Pharmaceutical Industry (IPI) is globally the 3rd largest in terms of volume and 13th largest in terms of value. The total market size of Rs. 1,233bn includes domestic consumption market of Rs. 600bn (contributing approx 48.6%) and the exports market being Rs. 633bn (contributing approx 51.4%).The industry grew at a CAGR of approx 12.5% during the past five years and is expected to growth at a robust CAGR of 15.1% during FY 2012-17 given huge export potential coupled with steady growth in the domestic formulation market. Gujarat has contributed significantly through acquisitions of foreign assets and by having export-led business models which has reflected in rising share in India's pharmaceutical exports as well as industry turnover, reveals the ASSOCHAM. OPPORTUNITY AND THREAT: With rising population and new health concerns is likely to promote the Pharmaceutical industry. The growth chances lye with all the companies with huge fund investment. However constant increase in the R & D cost is a crucial issue for small scale pharmaceutical companies. MNCs in pharmaceutical companies are also taking over the market which is also material threat for the domestic industry. RISK FACTORS: The risk factor is but naturally involved in any type of industry including natural risk. During the last few years, the promotion measures undertaken by other states of India, has also diverted the pharmaceutical business out of Gujarat. The corporate with obsolete technologies are likely to close down the business. FUTURE OUTLOOK: Due to increased demand of medical and drugs products, there are prospective opportunities for trading in industry. The company sees some better chances of growth in trading of industry goods with best distribution system and network. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY: The Internal Control System comprises of exercising control at various stages and is established in order to provide reasonable assurance for: I. Safeguarding Assets and their usage, II. Maintenance of Proper Accounting Records and, III. Adequacy and Reliability of the information used for carrying on Business Operations. The Directors handle most of the day-to-day functions. The Directors are regularly looking after all the key areas of the operations. Additionally the Audit Committee is reviewing all Audit Plans with significant control over all the matters and issues, internal control etc. |