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INDUSTRY STRUCTURE & DEVELOPMENT
The Global spending on medicines is expected to reach nearly US $ 1.5 trillion by 2021.The main two drivers of this growth will be introduction of new innovative products in the developed markets and increased volumes of branded generics in the emerging markets.
The growth of a countrys pharmaceutical industry closely mirrors its general economic progress. As economies of the world demonstrate widely divergent growth patterns, industry growth is also different. However, taking a macro perspective, global pharmaceutical growth depends on worldwide economic momentum, government healthcare programs and spending patterns. While R&D efforts will drive the introduction of new products in the market, challenges remain. For countries grappling with sluggish economies and limited resources, funding access to these medicines remains an uphill task.
Each country in the world is facing these challenges and addressing them in its own way. Overall, generic products will continue to be an integral part of these efforts, targeted at striking a balance between access to healthcare and ability to fund it.
DISCUSSION ON FINANCIAL PERFORMANCE W.R.T. OPERATIONAL PERFORMANCE
The Companys revenue from operations during 2017-18 amounted to 11,160.97 lakhs against 8,245.79 lakhs in the previous year, recording a growth of 35.35%. EBITDA for the year stood at 1,836.61 lakhs against 1,131.31 lakhs in previous year. Profit after tax for the year stood at 1,011.27 lakhs against 516.01 lakhs in the previous year, with growth of 95.98%.
OPPORTUNITIES AND THREATS
The pharmaceutical industry is highly competitive and the challenges are from both the Indian manufacturers who have similar production facilities as well as those abroad. Human resources with similar skills, talents and experiences in the industry are mobile between competing companies. This threat does not affect Medicamen, because of its control over raw material sourcing. The Company has been able to control its quality, improve on timelines, be competitive on its costs and has the ability to deliver at short notice. This is a unique advantage that Medicamen enjoys over other manufacturers Medicamen has worked on its speed-to-market abilities and is quick to convert product approvals into invoices. The Company has unmatched strengths to cope with the challenges of the market such as plan for product launches with supportive documentation, create products that meet regulatory norms and execute plans within tight cost and time budgets.
The Company achieved significant progress on its key priorities in 2017-18 despite a number of challenges in emerging markets and pricing pressure across the globe. For 2018-19, Company will remain focused on its agenda of superior revenue growth, cost consciousness and improving the overall margin profile of the Company. The Company expects to focus on operational efficiencies to drive strong cash flows. During the year, MBL has purchased a new facility at Haridwar which is being developed for oncology products. The plant would be operational next year. Over the last 5 years, the oncology has contributed maximum out of total healthcare business and this trend would continue in future also. A corporate R&D has also been established which will enable MBL to launch nano molecules with data integrity and stability.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has an adequate system of internal controls. Policies and procedures covering all financial and operating functions have been documented. These controls have been designed to provide a reasonable assurance with regard to maintaining proper accounting records for ensuring reliability of financial reporting, monitoring of operations, protecting assets from unauthorised use or losses and compliance with regulations. Moreover, the Company always encourages the digitalization of key process controls through the ERP systems to maximise automated control transactions across key functions.
The scope and coverage of audits include review and reporting on key process risks, adherence to operating guidelines and statutory compliances and recommending improvements for monitoring and enhancing efficiency of operations and ensuring reliability of financial and operational information. The Audit Committee monitors and reviews the significant internal audit observations, compliance with accounting standards, risk management and control systems and profitability.
Medicamen is a professionally managed company with highly competent and committed industry professionals forming a tight-knit team of dedicated colleagues. The knowledge, expertise and skills of the Medicamen team form a strong foundation of the Companys progress, and hence considerable strategic emphasis is laid at people development and leadership. The overall target is to enhance business growth by enabling engagement and performance. This is achieved by having the right people supported by participative leadership working together towards organisational goals.
Estimate and expectations stated in this Management Discussion and Analysis may be "forward-looking statement" within the meaning of applicable securities, laws and regulations. Actual result could differ materially from those expressed or implied. Important factors that could make difference to your Companys operations include economic conditions in the government regulations, tax laws, other statutes and other incidental factors.