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The Management Discussion and Analysis given below covers the key issues concerning the business carriedon by the Company with respect to Industry Overview, Outlook, Trends, Opportunities, Threats & Risks.
Industry Structure and Developments: An Overview of the company
Vanta Bioscience is an emerging, full service preclinical contract research organization, operating out of Chennai, India. Vanta Bioscience is established as a center of excellence for GLP toxicology and safety assessment.
Indian economy is one of the largest and fastest growing economies in the world. The Food &Agri industry is among the top three sectors in India that propel the Indian economy, which is predicted to experience further robust growth in the coming years. The pharmaceutical industry too is one of the primary economic drivers in India which currently is facing headwinds due to increased regulatory scrutiny and a slowdown in the US and a few other leading pharmaceutical markets globally. However undeterred, the Indian pharmaceutical industry shows a trend of increased spending on outsourcing compliance related testing needs and also an increased R&D spending to develop new drugs. Whether it be the increasing focus on food safety and quality in the country, driven by FSSAI and quality conscious manufacturers and customers, or the regulatory challenges being faced by the Indian pharmaceutical industry, these trends create huge opportunities for food and pharmaceuticals testing and research services (both routine and sophisticated). Like in any business, these opportunities come along with challenges such as increased competition from more local and global players and insufficient number of skilled and trained human resources. Added to this is the unlevel playing field amongst the competition in terms of quality of services and the perceived value ofthe same by the customers. Healthcare spending is globally high, more now than ever, due to an increasing demand for more and newer medicines in emerging economies. Globally, the pharmaceutical industry continues to be under pressure to get more out of every dollar spent on new product development, and reduce the time between the concept to the product. Given the slow and low returns on investments, the companies look to focus more and more on specialty healthcare segments and products. Therefore, there is an increased demand for cost effective and quick R&D and manufacturing processes. Although India doesnt currently seem to be among the most preferred destination for outsourcing new R&D activities, the cost efficiencies it can deliver to the global pharmaceutical industry is undeniable.
Our Companys activities are guided by the principles of quality services, safety of its employees and business prudence. The Company would put all its efforts to achieve good results within its ambit. The Company regularly focuses on increasing productivity and efficiency, cutting expenses, innovating services and profitable streams of Business. The Company endeavors to use its resources optimally and work persistently towards its set goals.
Internal Control System and their adequacy:
The Company has a well-defined internal control system that is adequate and commensurate with the size and nature of its business. Internal Audit department is put in place and adequate internal controls are established to ensure that all assets are safeguarded and protected against any loss from unauthorized use or disposition and all the transactions are authorized, recorded and reported correctly. ERP based controls are in place.
The following are the opportunities:
Strengthening FSSAIs oversight on food safety and quality.
Global regulatory bodies emphasis on GLP, NABL, MHRL etc., compliance.
Indian Health care sector, one of the fastest growing industry, is expected to advance at a CAGR of 22.87% during 2015-20 to reach $ 280 billion.
The pharmaceuticals industry is expected to expand at a CAGR of 12.89 % over 2015-20 to reach $ 55 billion.
The following are the threats:
Facilities are subject to client inspections and quality audits and any failure to meet theirexpectations or to comply with the quality standards set out in contractual arrangements, could result inthe termination of contracts and adversely affects business, results of operations, financial conditionand cash flows.
Significant disruptions of information technology systems or breaches of data security.
Foreign exchange risks that could adversely affect results of operations.
Political, economic or other factors that are beyond control may have an adverse effect on business and results of operations.
Changing laws, rules and regulations and legal uncertainties in India, including adverse application ofcorporate and tax laws.
Challenges, Risks and Concerns:
Risks are inherent to any business. The opportunities compound challenges and vice versa. Risks are managed by your Company through a risk management process of risk identification, risk mitigation through risk reduction strategies & plans and continuous monitoring of the effectiveness of the risk mitigation measures to control them. Your company continues to strive to stay ahead on the competition curve through creation of new service opportunities, and its uncompromising commitment to quality, regulatory compliance and customer service.
Discussion on Financial Performance with respect to Operational Performance: AccountingTreatment and Financial Performance
The financial statements are prepared in compliance to the Accounting Standards as laid down under the provisions of section 133oftheCompaniesAct,2013. Gross revenue for the year 2017-18 is Rs. 403.87 Lakhs. The Net profit stood at Rs.2.73 lakhs.FY 2017 is the first financial year of our company and we have not carried any operations during the period ended March, 31 2017. Hence no comparisons have been drawn.
Segment-wise or Product-wise Performance
The Company is providing services of Testing and Contract Research in the fields of Clinical Research, Pre-Clinical Research, Biopharma services, Analytical Testing & Research and Environmental studies. Since the inherent nature of all these services are inter related and governed by similar set of risks and returns and operating in the same economic environment, segment reporting is not applicable. Accordingly, for reporting purposes, all these services are treated as single business and geographical segment. The said treatment is in accordance with Accounting Standard-17 Segment Reporting.
Human Resources Development and Industrial Relations:
Human Resource is one of the key strength of the Company. At the end of the financial year 31.03.2018, the Company had 48 employees including; 7 PhDs and 21 scientists, 3engineers, 3technicians and 14 other research supporters and administrative staff.
Statements in this Management Discussion and Analysis describing the Companys objective, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations. Certain observations made on the industry and other players also reflect on opinion by the management and the management accepts no liability on such opinions. Actual results might differ materially from those either expressed or implied.