VERONICA LABORATORIES LIMITED
ANNUAL REPORT 2003-2004
MANAGEMENT DISCUSSION AND ANALYSIS
Consequent upon incurring huge expenditure for development of "Herbovera"
in the last financial year, the Company has spent further amounts towards
conducting clinical trials of "Herbovera" at R.A. Podar Medical College &
Hospital, Worli, Mumbai. The clinical trials are being conducted under the
able supervision and guidance of Dr. Geeta Parulkar, M.D. (Kayachikitsa)
who is a Senior Lecturer at R.A. Podar Medical College.
The Company has also tied up with SRL Ranbaxy Limited, a Special Reference
Laboratory (SRL), to carry out initial clinical investigations in HIV +
patients. SRL Ranbaxy Limited is approved by American College of Pathology
and offers highly specialized tests like HIV Monitor, CD4 count etc.
Subsequently such investigations will be carried out by SRL Ranbaxy Limited
every 3 months to monitor the effects of "Herbovera" on the patients
selected for clinical trials.
It may not be out of place to mention that the initial results of the
clinical trials being conducted at R.A. Podar Medical College & Hospital,
Mumbai are quite encouraging. Looking at encouraging initial results, the
Company is all set to commence Multi-centric clinical trials shortly. The
Company has short-listed premier hospitals from metro cities like
Bangalore, Delhi, Hyderabad etc. to start Multi-centric clinical trials as
per the global standards.
The Company has entered into a Memorandum of Understanding (MOU) with M/s
Hakeem Food Products Private Limited, Navi Mumbai in May 2003 for purchase
of their factory unit at R-29, Rabale MIDC. Navi Mumbai. The Company has
agreed to exercise its option to purchase the said unit at the cost of Rs.
500 lacs on or before 31st March 2005. It has been further agreed that till
such time the Company exercises the option of purchasing the unit, the same
would be taken on lease @ Rs. 10.00 lacs per month with effect from 1st May
The aforesaid unit is located at Rabale MIDC having a plot area of 2200 sq.
mts. and built up area of 1500 sq. mts. The Company has started work for
setting up of formulation unit at Rabale by initiating alterations in the
existing structure. The Company intends to start manufacture of herbal
ayurvedic formulations that are presently being developed by the Company.
The details of the products that would be introduced shortly are as under:
Sleepex Capsules containing Tagar Gath, Jatamansi, Jaiphal etc.
Detoxin Capsules containing Pushkarmool, Kutki, Amalki and Manjislitha
Shape-it Cream containing Mahamasa Tel, Shatavari, Ashwagandha etc.
As development and consequent introduction of new products as well as
making foray in the new areas is a costly affair. the Company's profits
have gone down a little in this year. However, the profitability will go up
in the next year once we create a niche for our new products in the market.
The Company in its efforts to streamline the operations, reduce the
interest burden and take the Company to the "Debt-free" regime convinced
its major creditor. M/s Hakeem Auto Limited to convert its unsecured loan
of Rs. 225 lacs into equity. M/s Hakeem Auto Limited has agreed to convert
about Rs. 150.00 lacs unsecured loan into equity as a first step at Rs.
11.35 per share worked out as per SEBI formula. Accordingly, the
shareholders passed suitable resolutions in the EGM held on 6th October
The Company had submitted an application with The Stock Exchange, Mumbai
for listing of 13,25,000 shares equivalent to Rs. 1,50,38,750/- @ Rs. 11.35
per share in December 2003 which has been rejected by the Exchange. The
Company has preferred an appeal before the Securities Appellate Tribunal
(SAT) against the said order of the Exchange, which is yet to come up for