benzo petro international ltd Management discussions
BENZO PETRO INTERNATIONAL LIMITED
ANNUAL REPORT 2011-2012
MANAGEMENT DISCUSSION AND ANALYSIS
INDUSTRY STRUCTURE AND DEVELOPMENT, GLOBAL AND DOMESTIC:
The global pharmaceutical market is changing rapidly and growing more
complex. Annual global spending on medicines is expected to rise from $956
billion in 2011 to nearly $1.2 trillion in 2016as per the IMS Institute for
Healthcare Informatics report,
According to a study by IMS Healthcare, the global pharmaceutical market
has grown at a 7% CAGR over the past six years to reach a size of USD $880
million. Agrowth rate of 5% has been forecasted by IMS Health over the next
four years to reach a size of USD $ 1,100mn by 2015E.
Generics market has been the key player in this growth story for
pharmaceuticals on a global basis. The generics market has grown at a much
faster pace of 13.8% CAGR over the period, driven by large-scale patent
expiries and global demand for lower-cost drugs.
The recent spate of turbulence experienced in the Indian market has
resulted in high inflation levels, volatile industrial output and escalated
interest rates and have collectively caused a downward revision in the GDP
growth rates from 8% to 6.9%.
India, being the third largest market in the world pharmaceutical scenario,
in terms of volume, it is gaining its position as a global leader clearly
topping the charts among the Indian science based industries with
significant expertise in the complex field of drug manufacture and
technology.
Indias pharmaceutical market has registered a strong growth of 16% in
2012. This has been the highest growth in the past three years (Source:
Edelweiss Monthly, April 2012).
PERFORMANCE AND OPERATIONS OVERVIEW:
During the period under review, the operations of the Company witnessed
increase in Operational Revenue to Rs. 9278.83 Lakhs from Rs. 7187.54
Lakhs.
There has been a sharp decline in Other income amounting to Rs. 487.83
Lakhs in the last financial year to Rs. 162.01 Lakhs in the current
financial year.
During the year the Company has registered a Loss of Rs. 738.02 Lakhs
against a Profit before Tax amounting to Rs. 95.64 Lakhs in the last
financial year.
RISKS AND CONCERNS:
The Pharmaceutical industry works in a dynamic environment. Compared with
other industries, the risk and compliance profile span the full
pharmaceutical product life cycle.
Your Company lays emphasis on risk management and has an enterprise wide
approach to risk management, which plays a key role in identifying and
managing key operational and strategic risks.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has a widespread system of internal controls with the objective
of safeguarding the Companys assets, ensuring that transactions are
properly authorized, and provide significant assurance at reasonable cost,
of the integrity, objectivity and reliability of financial information.
HUMAN RESOURCES/INDUSTRIAL RELATIONS:
The Company continues to focus on its core values of knowledge, action and
care, which are also reflected in the behavior of the employees. There has
been no other material development in the Company, as far Human Resources
are concerned.
CAVEAT:
Shareholders are cautioned that certain data and information external to
the company is included in this section. Though these data and information
are based on sources believed to be reliable, no representation is made on
their accuracy or comprehensiveness. The management of the Company has
prepared and is responsible for the financial statements that appear in
this report. These financial statements are in conformity with accounting
principles generally accepted in India and therefore include amounts based
on informed judgments and estimates. The management also accepts
responsibility for the preparation of other financial information that is
included in this report. The management has based these forward-looking
statements on its current expectations and projections about future events.
Such statements involve known and unknown risks, uncertainties and other
factors that may cause actual results to differ materially. These factors
include, but are not limited to, changes in local and global economic
conditions, the Companys ability to successfully implement its strategy,
the markets acceptance of and demand for its products, growth and
expansion, technological change and exposure to market risks. By their
nature, these expectations and projections are only estimates and could be
materially different from actual results in the future. The Company
undertakes no obligation to publicly update or revise any of the opinions
or forward-looking statements expressed in this section, consequent to new
information, future events or otherwise.