MANAGEMENT DISCUSSION AND ANALYSIS The Indian Pharmaceutical Industry currently tops amongst India's science based industry with a wide ranging capabilities in the complex field of drug manufacture and technology. The value of india's Pharmaceutical Market is US$ 32 billon and set to grow to US$ 50-60 billion market by 2020. Globally India ranks 4th largest in volume and 12th in value and is among the top five Pharma emerging markets globally. The Pharmaceutical Sector in India is highly fragmented with more than 20000 registered units. Over two decades Pharmaceutical Industry has expanded drastically. The exports made by Pharmaceutical Industry in India is estimated at about Rs. 90,318 crores. The formulation industry in India is the largest exporter for formulations with 14% market share and ranks 12th in the world in terms of Export value. The generic markets in India is expected to grow to US$ 26.1 billion from US $ 17 billion today. India's Generic Drugs account for 20% of global exports in terms of volume, making the country the largest provider of generic medicines globally. India is expected to be the third largest global market for APIS by 2016. India is expected to rank amongst the top three Pharmaceutical Markets in terms of incremental growth by 2020. The Government of India has aimed at making India a Global Leader in end-to-end drug manufacture. It has reduced approval time for new facilities to boost investments. Though the pharmaceutical Industry has a lot of growth prospects, but also has many challenges to overcome. OPPORTUNITIES, THREATS, RISKS AND CONCERNS OPPORTUNITIES The Company's Research and Development (R & D) Department has developed many new formulations including lyophilized formulations, new molecules and novel drug delivery system. The lyophilized products are well accepted in the market and many renowned Companies have shown interest in our Lyophilized products. The Company has therefore planned expansion of its lyophilized plant so as to cater to the increase in demand. The Company has also introduced cosmetological and dermatological products which have better margin. Lyka BDR International Limited (LBDR) is likely to register nearly 50 dossiers in the international market in the financial year 2015 - 2016. This will help to boost the Export Sales of LBDR and thereby increase the consolidated sales and profitability of the Company. THREATS The contract manufacturing activities, including principal to principal manufacturing, is facing fierce competition, especially from the manufacturing units located in Excise Free Zones. RISKS AND CONCERNS The Companies situated in Tax Free Zones are enjoying tax benefits, as a result, the price offered by them is comparatively lower than the price charged by us. As a result, the Company's business of P2P and job work gets affected. Competition in the international market and fluctuation in the exchange rate might affect sales and profitability of its subsidiary LBDR, which in turn might affect the consolidated sales and profitability of the Company. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company maintains a system of internal control, including suitable monitoring procedures in various functional areas. The system is reviewed from time to time to update the same with changing requirement. Internal Audit of Company's financial accounts and related records is conducted by independent firms of Chartered Accountants. CAUTIONARY STATEMENT Statements in the "Management Discussions and Analysis" describing the Company's objectives, estimates, expectations or projections may be "forward looking statements", within the meaning of applicable laws and regulations and the actual results could differ materially from those exbrssed or implied. Important factors that could make a difference to the Company's operations include Government regulations, patent laws, tax regimes, economic developments within India and countries in which the Company exports its products, litigation and other such factors, besides the normal business hazards. |