vysali pharmaceuticals ltd Management discussions

VYSALI PHARMACEUTICALS LIMITED ANNUAL REPORT 2006-2007 MANAGEMENT DISCUSSION AND ANALYSIS THE BUSINESS: Vysali Pharmaceuticals Limited is a Company promoted and developed by Technocrats and Scientists in the year 1980. Company manufactures wide range of Antibiotic Formulations and other Life Saving Drugs and exports to various Countries. Due to continued performance in the export, Star Export Houses has been earned by the Company. The Company also manufactures complete range of Injectable Penicillins Bulk Drugs and its formulations. THE COMPANY AND ITS FACILITIES: FORMULATION PLANT: The Company has its own manufacturing facilities for the manufacture of various types of Pharmaceutical Formulations such as Capsules, Dry Syrups, Tablets, Suspensions and Injections. The present facilities are capable of catering to the growing requirements of the Company in both Domestic and Export Markets. The Company is having Good Manufacturing Practices(GMP) Certificate as prescribed by World Health Organisation. BULK DRUG PLANT: Vysali is licensed to manufacture large number of Parenteral Penicillin Formulations for which the basic drugs are manufactured by the company in the Bulk Drug Plant. The Bulk Drug Unit manufactures Injectable Penicillins such as Procaine Penicillin BP, Fortified Procaine Penicillin BP, Benzathine Penicillin, Benzylpenicillin G Sodium BP and Triple Penicillin which trade the Company in a prominent position to meet the National and International requirements of formulated Injectable Penicillins and other Antibiotics. QUALITY CONTROL: The Company is having its own well equipped Quality Control Section to take care of the complete Quality Control requirements of our Bulk Drug and Formulation Plants. The section is headed by qualified experienced personnel. MARKETING AND ADMINISTRATION: The Company has Central Marketing and Administrative set up at Cochin. The marketing is carried out by our Field Managers and Representatives for marketing our products. The sales is carried out through a network of Stockists who in turn supply the various Drugs to the Chemists and Hospitals in accordance with the demand created by our Field Staff. FINANCE AND MATERIAL MANAGEMENT: Vysali has a full-fledged Finance and Materials Management Division. The entire activities of the section is computerised and data created by them are used for proper monitoring to enable the company to take corrective measures from time to time. Details of the financial performance has been reported elsewhere in the Directors Report. EXPORT SCENARIO: Direct export has been restricted to overseas customers who are giving advance payments against specific orders. Exports to regular clients in Cambodia, Phillippines and Sri Lanka against Letter of Credit are being executed through 3rd party arrangements. Export segments will be strengthened in other markets when the export working capital arrangements are in place. DOMESTIC SCENARIO: Companys products are marketed in various states in South India through a large network of stockists for the purpose of distribution. Company is participating in various State and Central Government Tenders and have been successful in getting Awards due to previous track record. OPPORTUNITIES AND THREATS/RISK AND CONCERNS: The competition in the International Market is always an all time threat. However, considering the fact that the product sold are registered in the respective countries and also accepted by the buyers, the gravity of the situation is reduced. The reduction in margin due to exchange rate fluctuations can become a threat but can be compensated by covering varied product range with varied margins. OUTLOOK: The main outlook of the Company is to establish itself in the Indian and Overseas markets with the specialised range of products with high technical esteem. Although Company had to face various constraints, we are hopeful and confident that the current status of affairs will be improved with the sincere dedicated approach and hard work from all. ACCOUNTING METHOD: The accounts that you find in the document have been presented on the accrual system of accounting. For instance, revenue is recognised as income/expenditure as soon as the transaction is recorded in the companys books even though the actual receipt/expenditure expires later. HUMAN RESOURCES/INDUSTRIAL RELATIONS: The company has during the previous period continued its unstinted record of good industrial relations with its employees. INTERNAL CONTROL SYSTEM: The Companys Internal Control Systems are well established. The Internal Controls of the Company are commensurate with the size of the Company. An Audit Committee comprised of the Companys Directors is at the apex of the system. Any change in the internal control that is recommended is studied and implemented. TECHNICAL COMMITTEE: The Technical Committee consists of Managing Director, Joint Managing Director and Directors along with Production / Quality Control Managers and Pharmacists to ascertain quality of all products manufactured by our Company and also to ensure to follow all Standard Operating Procedures (SOP) approved by the Management for implementation of the same at every level. The Committee meets frequently but at least once in a month to ensure strict compliance of all methods and procedures. CAUTIONARY STATEMENT: Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied. By Order of the Board sd/- Place : Cochin - 682 025 DR. A.D. KRISHNAN Date : 14.11.2007 Chairman & Managing Director