Polar Pharma India Ltd Management Discussions

POLAR PHARMA INDIA LIMITED ANNUAL REPORT 2011-2012 MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY STRUCTURE & DEVELOPMENT India is one of the largest and most populated countries in the world, with over one billion inhabitants. Of this number, its estimated that around 2.4 million people are currently living with HIV. With this number in mind Government of India have initiated various social awareness programmes regarding family planning and prevention of spreading of HIV which in turn have increased the demand for condoms in India. The Company believes that business projections have an inherent element of uncertainty owing to unknown factors and presumed that managing risks is a paramount need for ensuring present and future growth plan. Over the years, the Company has encountered several risks and concerns during the process of its business. In keeping with problem solving approach that characterized the Company, it has taken several steps to counter and mitigate these, while simultaneously pursuing every possible risk. OPPORTUNITIES & THREATS Increased demand in market owing to various reasons has considerably raised the demand for the product in both local and international market. As a result, your Company is trying to optimize this opportunity to its level best by bagging the orders of Government. Large numbers of players have entered the market therefore creating huge competition and also threat to the business. Moreover hike in the price of indigenous product is also a matter of concern. However, your Company is confident to pass all the hurdles of the time and ready to face all the threats and at the same time rationally use the opportunities. SEGMENT-WISE/ PRODUCT-WISE PERFORMANCE As the Company is dealing only in latex prophylactics there is no other identifiable business segment. FUTURE OUTLOOK Outlook of the Company appears optimistic and your Company expects to get orders from Government of India as well as trying to get orders from international markets also. Future outlook seems to be very good. RISKS & CONCERNS The analysis presented in the Industry Scenario and Opportunities and Threats section of this Report throws light on the unavoidable risks and concerns faced by your Company. Steps are taken to minimize such risks. Safety is the core concern for your Company and is an important part of any business decision. In compliance with the revised Clause 49 of the Listing Agreement, steps are being taken to improve the existing Risk Management System. INTERNAL CONTROL SYSTEM & ADEQUACY The Company remains committed to ensure the prevalence of an effective internal control environment commensurate with its size and nature of business that provides reliable financial and operational information ensure compliance of corporate policies and applicable statutory regulations and safeguards Companys assets. Your Company in relation to internal controls intends to offer reasonable promise regarding the success of the following objectives: 1. Effectiveness & Efficiency of operations; 2. Adequacy in safeguard of assets & 3. Reliability of financial controls. The Audit Committee has been vested with wide powers to review any transaction and has been empowered with the term of reference as mandated by amended Clause 49 of the Listing Agreement. CORPORATE SOCIAL RESPONSIBILITY Your Company firmly believes that any progressive activity cannot be carried out in a society that fails. In line with this vision, the focus of all activities is sustainable development and inclusive growth in the periphery and engagement of local community in a positive manner. The Corporate Social Responsibility (CSR) activities are carried out by the Company in a systematic manner with the involvement of its team of dedicated professionals. The various activities are undertaken after proper need assessment and implementation is made effective with the involvement of employees, voluntary organizations and local representatives. Some of the initiatives taken by your Company during the period under review for the benefit of the people in the locality as well as society at large pertain to: 1. Skill development and Employment Generation 2. Health care initiatives and improvement of Health infrastructure 3. Assistance to needy people The CSR activities taken up by your Company have a focus on continuity and gradually the emphasis is more on the basic requirements in the area like Environmental Protection, birth control etc. TECHNOLOGY The primary concern of your Company is always cost reduction and Quality improvement which is only possible by adoption of new technology. Technological improvement is the need of the hour in the brutally competitive and dynamic contraceptive industry. Skilled employees as well as proper planning have enabled your Company to attain an edge over its competitors. Your Company succeeds to ensure frequent development in quality and range of its products. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE During the year under review, the Company has posted a turnover of Rs 1605.88 lakhs owing to receipt of orders from Ministry of Health & Family Welfare (MHFW), Government of India as against Rs.1085.67 lakhs in the previous fiscal. However, your Company has witnessed operating loss of Rs. 181.88 in the current year under review. HUMAN RESOURCES/ INDUSTRIAL RELATIONS Your Company has always tried to maintain healthy and harmonious professional environment at its manufacturing unit at Baleshwar and healthy and cordial employee relations in all its offices. Efforts are constantly made to attract, develop, train, motivate and retain the best talent. Team work and Ownership are respected values and system for knowledge and experience sharing has been made to create a learning organization. As part of the overall HR Strategy, training programmes were undertaken for enhancement of employee skills and talents at all levels through both internal and external faculties during the year under review, putting forth health and safety of all its employees as its priority. CAUTIONARY STATEMENT Statement in the Managements Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predications may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied in this report. Important factors that would make a difference to the Companys operations include global and Indian demand/supply conditions, raw materials prices, feed stock availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations/policies, tax regimes, economic developments within the country and other factors such as litigation and labour negotiations. The Company assumes no responsibility to modify or revise any forward-looking statements on the basis of any future events or new information. Actual results may differ from those mentioned in the report.