a) Industry Outlook: The Indian Pharmaceutical market is the third largest in terms of volume and thirteenth largest in terms of value and is expected to grow over 4-5 percent per annum. The steadily increasing demand for innovative drugs has thus triggered a significant rise in R&D investment in the pharmaceutical industry.

b) Financial Performance: The company generated a revenue of Rs.5959.42 lacs during the financial year and earned a profit of Rs.773.96 lacs after taxes, in the past few years our company have witnessed losses due to extra resources required in Unit-II of the company which were jeopardizing the business of Unit-I. by considering the various factors company decided to sale the unit and concentrate on Unit-I to generate the more value to the stakeholders. company is on rock path to achieve the vision to become a big leader in pharmaceutical sector and will be seen in future.

c) Income: Income of a company has tremendously rise from (139.68) to Rs.773.96 lacs, it can be clearly demonstrated that company is putting full efforts to maintain the company into profit making and make a better use of resources

d) Expenses: Company is regularly reviewing the cost sheet with variance report and identified the major factors affecting the cost to the company, we have kept all necessary controls to maintain the cost as targeted in the beginning of the year and it is witnessed during the financial year that major expenses is slightly controlled by implementing Cost Control over the expenses.

e) Employee benefits expenses:

i) Gratuity: The company accounts for its gratuity liability, a defined retirement benefit plan covering eligible employees. The gratuity plan provides for a lump sum payment to employees as per the conditions mentioned in Gratuity Act, 1972 based on the respective employees salary and tenure of the employment

ii) Provident Fund: The eligible employees of the company are entitled to receive the benefits of Provident fund, a defined contribution plan, in which both employees and the company make monthly contributions at a specified percentage of the covered employees salary (Currently at 12% of the basic salary) which are charged to profit and loss account on accrual basis.

iii) Other employee benefits: other employee benefits includes incentives and welfare expenses incurred to the benefit of the employees

f) Segmental Reporting: The Company operates in a single segment of Drugs and Chemicals which is the primary reportable segment as per Accounting Standards AS-17 and the same is also given in Notes to th financial statements.

g) Manufacturing Facilities: The company has a state of the art WHO-GMP certified manufacturing facilitity at Pigdamber,Indore that manufactures a wide range of dosage forms like Injections,Tablets,Ointments and Capsules.At Present the company is tapping the domestic market and export markets.The company also has a state of the art testing laboratory at this site.

h) Internal control systems and their adequacy: The company has reasonable system of internal controls in power, supervision, checks, policies and procedures, which are being tested on routine basis by the management. Moreover the company continuously upgrades these systems in line with the best accounting practices. The Audit Committee also review the adequacy of internal controls systems and the compliance thereof. Further, the annual financial statements of the company are reviewed and recommended by the audit committee for the consideration and approval of the board of directors. The committee also reviews internal controls systems, significant accounting policy, major accounting entries, related party transactions, etc..

i) Coverage of Risks: The company assets are adequately insured against the loss of fire and other risk factors which are considered necessary by the management from time to time.

j) Foreign Exchange Fluctuations: The company derives substantial portion of its revenue in foreign currency , exposing it to fluctuations in currency movements. Such a scenario makes earning volatile, the company regularly reviews a foreign exchange risk and takes a suitable measure to minimize the risk at minimal level.

k) Regulatory Risk: The company operation subject it to compliance with a broad range of decrees and regulatory controls on the development, manufacturing, testing, approval, distribution and marketing of its pharmaceutical products. The company works in complex legal and regulatory requirements that could be differ among jurisdictions, the company has implemented several mechanism to monitor and support compliance with the legal an regulatory requirements

l) Competition Risk: The Companys products face intense competition from products of other pharma companies in India and abroad and launching of new products by competitors may impair the companys competitive advantage and would result erosion of revenues.

l) Business Strategy: The company has its vision towards optimizing shareholders value. The company has consolidating its wide range to a more efficient range which has resulted in a higher profit for most products. The company is deriving its strength from diverse capability, established client relationship.


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