MANAGEMENT DISCUSSION AND ANALYSIS REPORT: (a) Industry structure and developments Agrochemical the Industry continues to grow in size, due to increase in use of Agro chemicals by farmers due to awareness, but due to decrease in farms gate prices of produce the industry remarked state in 2014, but for exports. Also now India is becoming an aggressive player in export market second to China, and exports are continuously growing to adjoining Countries, middle east etc. However, due to global warming and changing weather, erratic monsoon the industry trend becomes uncertain at times. Biotechnology JV Life Sciences market has been very slow, as Research funding by Government was delayed and old research project had been completed. Start of new R&D funding and projects will start in 2015 only, till then the life Science R&D market remained dull. For Molecular Diagnostic Market its in the nascent stage in India and lot needs to be done to put molecular diagnosis in the routine diagnostic protocol, like awareness, development of infrastructure etc. Currently, the molecular diagnostic market is dominated by multinationals and highly metro centric. But with launch of cheaper indigenous kits and setting up of new PCR diagnostic centers in smaller towns, the reach to people will increase along with awareness, which will spark huge growth potential in coming years. (b) Outlook & Opportunities Industry offer good opportunity for growth, due to increase in use of Agro chemicals by farmers and due to intensive farming of Pest prone crops like cotton, Chili, Paddy, Soyabean etc. Good export potential to adjoining countries exists, which has to be tapped and company is continuously getting new products registered in these countries to encash this opportunity. Life Sciences market offer good opportunity with increased emphasis on research by Govt, and also private companies, the molecular research market shall continue to expand, as we are way below the desired R&D expenditure in percentage terms vis-a-vis developed countries, with fresh funds released in R&D in 2015. For Molecular Diagnostic Market it is in the nascent stage in India and lot needs to be done to put molecular diagnosis in the routine diagnostic protocol, like awareness, development of infrastructure etc. Currently, the molecular diagnostic market is dominated by multinationals and highly metro centric. But with launch of cheaper indigenous kits and putting of new PCR diagnostic centers in smaller towns, the reach to people will increase along with awareness, which will spark huge growth potential in coming year. Company is developing several disease parameter PCR kits, from infectious to oncology which are being well accepted by customers. (c) Segment-wise or product-wise performance Segment wise performance is not applicable as total revenue from any other segment apart from Agrochemical is not more than 10% this year. (d) Risk and concerns The Industry is depended on monsoon and pest attack. With global warming weather pattern is becoming unbrdictable. Agrochemical sector is monsoon dependent, but as your company is covering a wide geographic area and multiple crop products this vagary is warded off to quite a lot extent. To some extent the ill effect can be ward off by focusing on irrigated areas, institutional business / warehousing corporation /public health program / exports. Development of Molecular diagnostic market / Life Sciences is a slow process, as it requires investments to create new set ups / convince existing customers with free samples to switch there supplier and brand establishing by word of mouth. Thus, one need to survive for a long time period in this market to reap the rewards. (e) Internal control Systems and their adequacy: The company has an elaborate system of internal controls to ensure optimal utilization of company's resources and protection thereof, facilitating accurate and speedy compilation of accounts and management information reports and compliance with laws and regulations. The company has a well defined organization structure, authority levels and internal guidelines and rules for conducting business transactions. The internal Auditors' and company's internal audit department conduct regular audits to ensure adequacy of internal control system, adherence to management instruction and compliance with laws and regulations of the country as well as to suggest improvements. (f) Discussion on financial performance with respect to operational performance This year due to less than average rainfall and falling agri-commodity prices the sales were lower at 19.58 Crs, as compared to 23.24 Crs, and like wise the PBT at 28.42 lacs Vs 43.87 lacs. To ward off the risk of monsoon and droping agri-products prices company has been increasing efforts on Exports and the results will be seen in future. The Export registrations are being undertaken in Egypt, Sudan apart from increasing customer base in Baggladesh. These efforts shall show result in current year. Comapny is also increasing its market area in other States apart from its main stay at Central India. The JV is scaling up well, it's a bit slow initially, as it is very strongly R&D driven, however, the JV has made a wide range of diagnostic kits ranging from infectious diseases to oncology, which are being accepted by big names customers in diagnostic market. In times to come this J V would become a market leader in the molecular diagnostic sector. And these collective efforts will improve comapny's top line and bottom line and bottom line coming times. (g) Human Resources The Company firmly believes that Human Resources and knowledge capital are vital for business success and creating value for stakeholders. The Company recognizes the fact that people drive business success, strengthening its efforts to build leadership at all levels.The industrial relations at both the units have remained quite cordial with total dedicated efforts from employees. The total number of employees as on 31 st March, 2015 were 56. for and on behalf of the Board of Directors R.K. DUBEY CHAIRMAN & MANAGING DIRECTOR Place: Bhopal Date :29th May, 2015 |