Veerhealth Care Ltd Management Discussions

Industry Structure and Outlook

Ayurveda has a long tradition behind it, having originated in India perhaps as much as 3,000 years ago. The first recorded forms of Ayurveda as medical texts evolved from the Vedas. Ayurveda developed significantly during the Vedic period and later some of the non-Vedic systems such as Buddhism and Jainism also developed medical concepts and practices that appear in the classical Ayurveda texts.

This industry has become globally competitive as it exports a significant amount of its products. Developments in Ayurveda during the past two centuries through organised production of medicine, institutionalisation of education and professionalization of clinical practice have often been parallel to developments in biomedicine in India.

SWOT Analysis

Strengths

The Company produces 100% natural products which are not tested on animals, making the range of products 100% cruelty free.

The Company carries out research extensively to introduce research based products in the market.

The Company has a strong manufacturing base having an able infrastructure.

Over the world, natural and traditional approaches are being welcomed.

The Company has an extensive range of Ayurvedic medicines.

Weaknesses

Stiff competition from existing and new entrants.

The Company does not have any direct outlets.

Building a brand image involves high cost and considerable amount of time.

Irregular supply of raw material.

Opportunities

Natural and traditional approaches are being accepted worldwide.

Use of unconventional methods of brand promotion and advertising.

Tapping opportunities in the export market.

The growth of consumer demand for ayurvedic products is increasing due to the increasing awareness of ayurvedic products.

Lifestyle changes & unhealthy food habits has led to transformation of the medical preferences.

Expansion in terms of introduction of new product line.

Threats

The allopathy players are of major threat as they invest heavily on advertising and distribution of their products through medical representatives.

Constant increase in costs in terms of raw material and packaging costs.

Lack of innovation and research and development in the segment of ayurvedic medicine.

FMCG competitors coming up with Ayurvedic product variants.

Risks

Company classifies the risks broadly into two categories, viz., External Risks and Internal Risks. The external risks mainly comprises of business risks on various fronts. The identified business risks and opportunities are deliberated in detail and thereafter considered in the business plan of the Company along with the mitigation plan. The internal risks identified by the Board are systematically addressed on a continuous basis across the locations.

Internal control systems and their adequacy

Our governance and compliance processes, which include the review of internal control over financial reporting ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized, recorded and reported. It also conducts regular internal audits to test compliance with the statutory requirements. Audits are led by professional audit managers and supported by experienced personnel drawn from across the organization. Audit results are used by management to create detailed action plans where the businesses have not yet achieved full compliance with the requirements. Key findings are reported to senior management and summary reports are considered by the Audit Committee of the Board. The nature of the industries in which the company operates means that many of its activities are highly regulated by health, safety and environmental norms while maintaining operational integrity.

Financial Performance

Veerhealth Care has been a consistent value creator for all its stakeholders. Detail regarding financial performance is published in the Annual Report.

Human Resources

The positive and motivating work environment of the company advances innovation, encourages growth and inculcates a positive spirit among the workforce. Employees are nurtured within the company, which increases their potential and growth in various matters. Working in the company has always made it an enriching experience for the multi-generational, diversified and mobile workforce.

Cautionary Statement

The statements made above may be construed as forward looking statements within the meaning of the applicable laws and regulations. Actual performance of the Company may vary substantially depending upon the business structure and model from time to time.