sangam health care products ltd Management discussions


1. ECONOMY REVIEW AND OUT LOOK:

The year gone by was a challenging one for the Indian Pharmaceutical Industry as it faced couple of challenges during the year impacting its growth. National Pharmaceutical Pricing Authority (NPPA) announced reduction in the prices of more drugs in the beginning of the financial year affecting the pricing of such drugs adversely. As a result of this, portfolio of products under the National List of Essential Medicines (NLEM) de-grew in value terms though it registered value growth during the year.

2. OPPORTUNITIES & THREATS:

The pharmaceutical industry is highly competitive and the challenges are from both the Indian manufacturers who have similar production facilities as well as those abroad. Human resources with similar skills, talent and experiences in the industry are mobile between competing companies. Price pressures from foreign players are expected to stay. Going forward, there is a risk of inability to maintain current margins on its products. Price sensitivities get tested in a crowded market where price tends to sag while volume business gets done. Competing pharmaceutical companies have several similar bio-equivalent products in the same market manufactured at facilities that have been approved by the highest regulatory authorities. All of them stay focused in the same markets resulting in price elasticity being tested and margins eroding.

3. SEGMENT WISE / PRODUCT WISE PERFORMANCE:

The Company manufactures IV sets, Disposable Syringes and Disposable Needles. The Annual Capacity of IV sets is 40 millions, Disposables Syringes is 264 Millions and Disposable Needles is 135 Millions per Annum. As the Company has completed the de-bottlenecking of the IV sets, Capacity is increased to 40 millions from July 07 onwards.

4. OUTLOOK:

Healthcare should be extended to the people at an affordable cost and the industry needs to set its priorities straight by treating healthcare activity as a service activity rather than a business activity.

Our Company has emerged as one of the leaders in the Medical Disposables market and its continuous efforts for a strong presence in the domestic market. There has been growing awareness among the end users about the threats posed while using Low Quality

Infusion sets produced and marketed by the Unorganized Sector. There were conscious efforts from the government which helped the cause more. The share of unorganized sector is falling drastically and there was a corresponding spurt in the demand for quality products in addition to the normal increase in demand.

The Company is making all efforts to meet the increase in demand for our products.

5. RISKS:

There is no visible silver lining in the job market yet. With government extending price controls over the medical devices and proposing generic prescriptions, healthcare industry foresee millions of employees losing jobs in the next two years.

6. INTERNAL CONTROL SYSTEMS:

The Company has sound and adequate internal control systems commensurate with its size and nature of business. We constantly upgrade our systems for incremental improvements, because we firmly believe that ‘change is the only permanent thing. The

Audit Committee of the Board periodically reviews these systems. These systems ensure protection of assets and proper recording of transactions and timely reporting.

7. FINANCIAL PERFORMANCE:

The financial performance of the company has been discussed in detail in Auditors report attached to it.

8. HUMAN RESOURCES:

Sangam is a professionally managed company with high competent and committed industry professionals forming a tight-knit team of dedicated colleagues. The corporate promises to focus on performing and delivering on patient safety.

The knowledge, expertise and skills of the team form a strong foundation of the Companys progress, and hence considerable strategic emphasis is laid at people development and leadership. The overall target is to enhance business growth by enabling engagement and performance. This is achieved by having the right people supported by leadership of able management working together towards organizational goals. Appreciation for the support and co-operation that the company received from the customers, auditors, consultants and all other associated with the company.

The company always looked upon them as partners in its progress and has happily shared the rewards of growth. It will be the companys endeavour to build and nurture strong links with trade based on mutuality, respect and co-operation.

9. DETAILS OF ANY CHANGE IN RETURN OR NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR:

RATIOS
Particulars 2020-21 2019-20
KEY PROFITABILITY RATIOS
OPERATING PROFIT MARGIN -27.16% 2.29%
NET PROFIT MARGIN -24.10% 18.57%
PAT / NETWORTH (ROE) -15.46% 2.73
KEY CAPITAL STRUCTURE
RATIOS
NET DEBT / EQUITY 1.59 1.94
CURRENT RATIO 0.144 0.236
DEBT SERVIC E COVERAGE RATIO -34.90 14.03
INTEREST COVERAGE RATIO -17.50 2.69
DEBTORS TURNOVER RATIO 7.21 43.52
STOCK TURNOVER RATIO 1.93 5.87