Aarti Pharmalabs Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

ECONOMIC REVIEW

Global Economy

Steady decline in global Inflation from the peaks of 2022 with easing out of global supplies led to a good start for 2023. The global economy grew 3.2% with high resilience of ongoing geo political tension and tight monetary policy. As per IMF, global growth in 2024 and 2025 is estimated to remain persistent at 3.2% supported by robust government and private spending in several economies. Faster pace of disinflation and steady growth could lead to easing out of financial control. In the near term, it is imperative for the central banks to manage monetary policy to ensure continued deceleration in inflation and rebuild budgetary capacity to deal with future shocks.

(Source: World Economic Outlook-IMF, April 2024)

Indian Economy

2023 was a landmark year for India as it assumed the presidency of the G20. In 2023, India remained the fastest growing large economy in the world. India has been a key growth engine for the world, contributing 16% to the global growth in 2023. Robust 10.7% growth in the construction sector and 8.5% growth in the manufacturing sector are the major contributors to the strong economic performance. The Reserve Bank of India (RBI) continued to keep tight monetary control with an aim to progressively align inflation with the 4% target.

According to RBI, sustained profitability in manufacturing and underlying resilience of services should support economic activity in FY 2024-25. It has pegged the GDP growth at 7.0% in FY 2024-25. While the outlook is positive, it is crucial to be cautious against the risks posed by geopolitical uncertainty, climate change, global indebtedness and technology disruptions.

(Source: NSO, RBI)

GLOBAL PHARMACEUTICAL INDUSTRY

With the World Health Organisation (WHO) declaring the end of the COVID-19 public health emergency in 2023, the focus of the pharma sector shifted back to prevention and treatment of other communicable and non-communicable diseases. Antibacterials, which witnessed significant disruption during the pandemic, saw modest growth in 2022 and 2023. Demand for OTC products witnessed robust growth in 2023 with inflationary pressure easing. Public healthcare spending was stepped up, which aids growth for pharmaceutical products. Certain markets including the EU, US and UK are imposing new or revised drug pricing regulations in a bid to lower state healthcare costs.

The pharmaceutical sector is rapidly adopting artificial intelligence (AI) in drug discovery, clinical trials, development processes and marketing strategies. Technology advancements are helping to accelerate the drug discovery process. The use of analytics is leading to increased use of predictive, diagnostic, prescriptive, and descriptive analytics. There is steady growth in the use of blockchain technology for drug production and distribution, to authenticate the quality of drug, and for improving safety.

In 2023, medicine use in terms of volume plateaued globally. The global medicine market, using invoice price levels, stood at US$ 1.6 trillion up from US$ 1.5 trillion in 2022. It is expected to grow to about US$ 2.2 trillion, at 5-8% CAGR through 2028 driven by robust growth in existing branded medicines in the leading ten developed markets and accelerated growth in Asian countries especially India and China.

Source: Global use of medicines 2024: Outlook to 2028 (The Global Use of Medicines 2024: Outlook to 2028 - IQVIA)

INDIAN PHARMACEUTICAL INDUSTRY

During COVID-19 pandemic, the Indian pharmaceutical industry proved its mettle on the global map as the world leader in vaccine production, producing 60% of total worldwide vaccines (including non-COVID vaccines). India contributes 40-70% of the WHO demand for Diphtheria, Tetanus and Pertussis (DPT) and Bacillus Calmette-Guerin (BCG) vaccines and 90% of the WHO demand for the measles vaccine. India is the third largest pharmaceutical market in the world in terms of volume and is the largest supplier of generic medicines. About 60,000 different generic brands are manufactured in India across 60 therapeutic categories, accounting for 20% of the global supply of generics.

India, which accounts for 3-5% of the global biotechnology industry, is among the top 12 destinations worldwide and the third largest in Asia Pacific. India boasts of having the most US FDA compliant pharmaceutical factories outside of the USA. India also has several WHO GMP compliant plants as well as plants approved by regulatory authorities of other countries. The Indian pharmaceutical industry supplies affordable and high-quality generic drugs to over 200 countries/territories with the top 5 destinations being the USA, Belgium, South Africa, UK, and Brazil.

According to CARE ratings, the India pharmaceutical market was valued at US$ 49.8 billion, up 5% YoY in FY 2022-23. The presence of a skilled workforce, high managerial and technical competence, robust investment in R&D and strong focus on compliance has aided in making India a global pharmaceutical hub. According to Economic Survey 2022-23, Indias domestic pharmaceutical market is anticipated to reach US$ 130 billion by 2030. The growing incidences of diseases, rising healthcare needs, strong government support, increasing life expectancy, multiplying population and increasing burden of chronic diseases are acting as stimulus for future market growth.

Total expenditure on healthcare increased from 79,221 Crores in FY 2023-24 to Rs.90,171 Crores in FY 2024-25. The government has announced setting up of more medical colleges by utilising the existing hospital infrastructure. Announcement of U-WIN platform for managing immunisation and intensified efforts of Mission Indradhanush to be rolled out throughout the country. New scheme of bio-manufacturing and bio-foundry to be launched with the objective to provide environment friendly alternatives such as biodegradable polymers, bio-plastics, bio-pharmaceuticals and bio-agri inputs. With increased allocations for numerous healthcare related programmes, Indias strong focus on affordable healthcare and sustainable development is evident.

pib.gov.in/PressReleaseIframePage.aspx Rs.PRID=2017942 Indian Pharmaceuticals Industry Analysis Presentation : IBEF

KEY SEGMENTS AND GROWTH DRIVERS

Active Pharmaceutical Ingredients (APIs)

Active Pharmaceutical Ingredient (API) is a crucial segment of the pharma industry, contributing to around 35% of the market. Globally, India is the third largest producer of API accounting for 8% market share with over 500 different APIs. India contributes 57% of APIs to the prequalified list of WHO. The Indian API market was estimated at US$ 18.29 billion in 2023 and is expected to grow at 7.7% CAGR over 20242030. The growth is led by the strong domestic market, China plus one strategy, advanced chemical industry, availability of skilled workforce, stringent quality and manufacturing standards, and low costs for setting up and operating a modern plant. The domestic pharmaceutical business underwent a tremendous transformation, moving from being a volume producer to a valued supplier in 2022.

The government has taken several initiatives to capitalise on its API potential like Rs.6,940 Crores production-linked incentive (PLI) scheme for the promotion of domestic manufacturing of Key Starting Materials (KSMs)/Drug Intermediaries (DIs), and APIs, Rs.3,000 Crores promotion of bulk drug park schemes, allowing 100% FDI through automatic route for Greenfield pharmaceuticals projects and implementing a new strategy for protecting IPR. Under the PLI scheme, 35 APIs, which constitute 67% of APIs and have high import dependence, are being manufactured domestically. The adoption of Promotion of Bulk Drug Parks scheme will favour bulk drug manufacturing reducing the cost of production. The Bulk Drug parks are expected to establish world-class common infrastructure facilities and increase industry competitiveness globally.

Source: Indias API Potential: Fueling Global Pharma Growth (investindia.gov.in); India Active Pharmaceutical Ingredients Market : Industry Report, 2030 (grandviewresearch.com)

Contract Development and Manufacturing Organisation (CDMO/CMO)

In FY 2022-23, the extent of outsourcing was estimated at 3540% in the Indian pharmaceutical industry. Pharmaceutical players outsource a wide range of activities from screening and lead identification to toxicology and several other processes like preclinical studies, clinical trials, manufacturing Intermediates/API/Formulations at all scales to CDMO/ CMO. The decision to outsource depends on a combination of factors such as capital outlay for manufacturing of a particular molecule, period of manufacturing of particular molecule and available capacity for manufacturing. The Indian CDMO/CMO industry was estimated at US$ 22.51 billion in 2024 and is expected to grow at 14.67% CAGR over 2024-2029. Availability of a skilled talent pool at effective cost and a large number of USFDA approved manufacturing sites in India make the Indian market a lucrative option especially given the increasing shift to the China+1 model in the Western countries. The rise in demand for injectable drugs, especially in oncology is expected to drive demand in the Indian pharmaceutical CMO market. With considerable growth seen in the sector, it is expected that uniform regulations will soon come into effect.

Biosimilars

Biosimilars are biological products that are highly similar to already approved biological medicines, but they are not identical due to their complex nature and manufacturing process. These products are designed to have comparable efficacy, safety, and quality to the reference products they are based on. Biosimilars are less expensive than the patented products and generally produced in bulk. This makes biosimilars a popular alternative in cases of expensive and critical treatments, most commonly for chronic treatments.

Given the cost effectiveness of biosimilars, the government is also trying to promote the production and application of biosimilars. The existing stringent regulations are cautiously being eased and tie-ups between foreign and indigenous companies are being encouraged. A number of patents for biologic drugs have expired and some of the blockbuster drugs are further expected to witness patent protection expiry in the upcoming years. This offers huge market opportunities for the biosimilar market in India.

However, some factors, such as negative perception from physicians, lower price differential as compared to small- molecule generics, patent extensions, act as roadblocks for the growth of the biosimilars market in India.

Formulations

The Indian drug formulation market is witnessing rapid growth led by the growing prominence of India on the global map as a pharmaceutical hub. India has emerged as a major supplier of generic drugs and a key player in drug formulation. India has created a strong foundation for contract research, development of research and clinical research. Expertise in research & development led by availability of a talent pool, and cost-effective manufacturing are helping India grow. One of the significant contributors to the growth of the drug formulation market in India is the emphasis on R&D. In FY 2022-23, the Indian domestic formulation market contributed 2-3% to the total global pharmaceutical market. Over FY 2017-18 to FY 2022-23, the Indian domestic formulations market (consumption) grew at 9% CAGR and is expected to grow at 9-10% CAGR over the next five years, to reach ~ Rs.2.8-3 trillion in FY 2027-28. This growth is to be aided by strong demand because of rising incidence of chronic diseases, increased awareness and access to quality healthcare.

(Source: CRISIL MI&A research)

COMPANY OVERVIEW

Aarti Pharmalabs Limited, formerly known as Aarti Organics, boasts over two decades of experience in the pharmaceutical industry. As a pivotal entity within the Aarti Group, a diversified chemical conglomerate, we have garnered a reputation as a trusted partner for global pharmaceutical innovators and leading firms. Specialising in generic Active Pharmaceutical Ingredients (APIs), advanced pharmaceutical intermediates, and Xanthine derivatives, particularly for regulated markets, we also excel in Contract Development and Manufacturing Organisation (CDMO/CMO) services for development and production of Regulatory Starting Materials (RSMs), intermediates, and drug substances for New Chemical Entities (NCEs), spanning phases from I to III, through launch and commercialisation.

Strategically located in Western India with proximity to ports facilitating exports, we operate with technological expertise in research and development, enabling efficient scale-up and commercial production. We hold an impressive portfolio with 56 patents, manufactures over 200 products, and possesses 41 US Drug Master Files (USDMF) and 22 Certificates of Suitability (CEP). Our infrastructure includes six manufacturing units, three of which are USFDA approved, and three state-of-the-art R&D centers.

Accredited by esteemed regulatory bodies such as USFDA, EU GMP, EDQM (European Pharmacopoeia), KFDA (Korea), and COFEPRIS (Mexico), we at Aarti Pharmalabs, maintain exemplary standards in environmental health, safety, and quality across its operations. We derive a significant portion of our international revenue from regulated markets, exporting to over 500 clients in more than 50 countries worldwide, with primary markets being the USA, European Union, and Japan.

Looking ahead, we remain dedicated to strengthening our backward integration capabilities of intermediates for the majority of APIs we manufacture. We remain committed to integrate our expertise in process chemistry with scale- up engineering to ensure maximum asset utilisation and sustainable future growth.

Products and Services

Active Pharmaceutical Ingredient (API) & Advance Intermediates

We specialise in developing and manufacturing Highly Potent Active Pharmaceutical Ingredients (HPAPIs) critical for various therapeutic segments such as Anti-cancer, Anti-Asthma, Anti-Hypertensive etc. Our USFDA-approved manufacturing facilities, alongside global approvals from the EU, Japan, Korea, Mexico, Brazil, China ensure adherence to rigorous compliance and quality standards, giving us an edge over competitors. Backward integration for most APIs ensures the steady supply of high-quality materials and data control throughout the production chain. We also offer Intellectual Property Rights (IPR) support for global markets.

We initiate the development of advanced intermediates for newly launched APIs well in advance, during the active patent period. This proactive approach supports our customers by facilitating early generic API launches. By providing comprehensive documentation and regulatory support, we become the preferred choice for our customers. This strategy enables customers to validate their APIs effectively, ensuring a streamlined pathway to market entry.

As global partners continue to launch new products, we anticipate a rising demand for existing drugs, reflecting a positive business outlook.

CDMO/CMO

Services

We are one of the leading small molecules CDMO/CMO In India offering services for drug substance projects Including NCE, API, RSM, and Intermediates, to global innovator pharmaceuticals and biotech companies. We have dedicated R&D and pilot facilities focussing on CDMO. We offer various services for each of the different phases of development of the NCEs. We are currently working with 16 innovators and big pharma companies. Our strength lies in continuous flow chemistry from lab to manufacturing scale, cryogenic reaction capabilities and HPAPIs. Our strong manufacturing expertise with rapid scale-up makes us a reliable partner for global customers, contributing to repeat business.

We function like an extended laboratory for our customers providing scientific and project teams, rapid development, superior manufacturing capabilities and strong cultural ethos. We enable our customers to achieve a quick turnaround time bringing the molecules to market faster. We focus on the creation of customised processes, their scaling up, and efficient manufacturing of API intermediates. CRAMS activity is focussed on APIs and intermediates.

We exercise stringent intellectual property protection on the services offered by signing confidentiality agreements with our customers to provide a reliable platform for rapid API development projects. All these efforts are directed towards making Aarti Pharmalabs the preferred CDMO/CMO partner and increasing our business outreach to get more customers.

Xanthine Derivatives & Allied

We are the largest Indian pharmaceutical manufacturer of Xanthine derivatives viz caffeine anhydrous, theophylline anhydrous, aminophylline anhydrous, etophylline primarily used in asthma and chronic obstructive pulmonary disease. Caffeine has diverse applications like beverages, nutraceuticals, and cosmetics as well. Two dedicated manufacturing facilities with star certifications are used for manufacturing and testing, equipped with Star Kosher, Hazard Analysis Critical Control Point (HACCP), Sedex SMETA-4Pillar, FSSC-22000 (GFSI), and GMP. We currently have a total installed capacity of 5,000+ Metric Tons (MT) per annum. We are amongst the largest global xanthine derivatives manufacturers, enjoying 15-20% global market share. We boast of high-quality products, capacities and warehouses with a global supply chain.

We also produce a variety of compounds based on sulphur and sulphonation including sulphuric acid, sulphur trioxide (SO₃), oil, dimethyl sulphate, diethyl sulphate, sodium vinyl sulfonate and dimethyl urea. Dimethyl urea & Dimethyl sulphate is a crucial basic ingredient for xanthine derivatives and Diethyl sulphate serves as alkylating agents in the production of dyes, medicines, and perfumes as well as a solvent for the extraction of aromatic hydrocarbons. Sodium vinyl sulfonate is used as a wetting agent, dispersion, and anti-static in polymerisation and surfactant. The production facility for these agents is ISO - 9901, 14001, and 45001 certified.

Throughout the year, both the local and export markets have shown steady performance for us. There has been a notable increase in order volumes from existing customers, reflecting their satisfaction with our commitment to quality and efforts in backward integration.

FINANCIAL PERFORMANCE

Pursuant to the Scheme of Arrangement {Scheme}, the Pharma Business Undertaking of Aarti industries Limited was demerged into Aarti Pharmalabs Limited during FY 2022-23. The said Scheme was approved by Honble National Company Law Tribunal, Ahmedabad Bench on September 21, 2022. The Scheme became effective on October 17, 2022 and operational from July 1,2021.

			In Rs. Crores
Particulars	FY 2023-24	FY 2022-23	FY 2021-22 (9 months)
Total income	1,857.5	1,947.6	1,202.5
cogs	1,020.7	1,169.8	725.1
employee costs	138.4	129.7	85.2
other expenses	307.4	303.7	182.7
EBITDA	391.0	344.4	209.5
EBITDA margin	21.0	17.7	17.4
Depreciation	73.2	62.5	42.1
EBIT	317.8	281.8	167.3
EBIT margin	17.1	14.5	13.9
finance costs	17.2	21.1	12.0
PBT	300.5	260.8	155.4
Tax	83.6	67.3	32.0
PAT	216.9	193.5	123.4
PAT margin	11.7	9.9	10.3

During FY 2023-24, the consolidated revenue has remained almost flat YoY at Rs.1,857.5 Lakhs. Decline in raw material prices & effective cost saving initiatives have led to strong EBITDA growth of 13.5% YoY to Rs.391 Lakhs in FY 2023-24. EBITDA margin expanded 325 basis points to a healthy 20.8% in FY 2023-24 as compared to 17.6% in FY 2022-23.

Profit after tax {PAT} grew 12.1% YoY to Rs.216.9 Lakhs in FY 2023-24 as compared to Rs.193.5 Lakhs in FY 2022-23. PAT margin expanded 176 bps to 11.7%.

Total equity as on March 31, 2024 stood at Rs.1,757 Crores against Rs.1,558 Crores as on March 31, 2023. Total net debt to equity stood at a healthy 0.14.

We have been assigned rating, CRISIL A+/Stable, for our working capital limits from banks.

BUSINESS OUTLOOK

Aarti Pharmalabs is achieving great strides in the pharmaceutical space with unique business propositions. We aim to further strengthen our position in the market to ensure long term robust operational growth. In future, we expect the following:

• Fortify our market leading position in the Xanthine segment by brownfield capacity expansion

• Augment API & Intermediates business with continuous innovation and portfolio expansion

• Strengthen CDMO segment by introducing more value- added products and acquiring new customers

• EBITDA growth of approximately 10-12% in FY 2024-25 and 15%+ over next 2-3 years

We are continuously expanding relationships with several large corporations for supply of Xanthine derivatives. We have strategised to enhance our production capacity of Xanthine derivative units by purchasing additional land parcels. This expansion will increase our total production capacity to 9000 MT per annum.

Our project at Atali, primarily focussing on CDMO/CMO and Intermediates manufacturing, is progressing as per plan and is expected to be commissioned by Q4 FY 2024-25.

In FY 2024-25, a semi commercial block at the USFDA intermediate manufacturing site at Vapi is expected to become operational.

We are also setting up a solar power plant in Akola, Maharashtra which will meet one third of its power requirement and reduce the overall manufacturing cost. This project will aid the achievement of our sustainability goals by reducing the carbon footprint.

KNOWLEDGE MANAGEMENT

Our intellectual Property (IP) framework confers ISO 27001:2013 standards consisting of rigorous terms for access control, information sharing and authorised disclosure. Comprehensive confidentiality of our processes and knowledge is ensured.

The proficient Knowledge Management team uses adequate databases to effectively undertake chemical searches in the perspective of Freedom-to-Operate/Non-Infringed Process development. The accreditation requirements of integrity, confidentiality and availability are implemented and monitored by the Knowledge Management team.

RESEARCH AND DEVELOPMENT (R&D)

Our strong research capabilities aided the transformation journey from a vendor to a preferred partner.

	Deep knowledge
Research	Vast experience
Capabilites	Strong technical prowess
	Adequate resources
	Specific chemistry knowledge
	Analytical capabilities
	Synthesis and process development laboratories
Expertise	Process chemistry infrastructure
	Proficient team of scientists - 7 PhDs and 70+ scientists
	50+ APIs commercialised
	56 Process patents filed
Achievements	25 Patents granted
	Process for 150+ intermediates developed and manufactured on kilo-lab scale

We are equipped with three state-of-the-art R&D facilities located at Nerul and Dombivali in Maharashtra, and Vapi in Gujarat. On an on-going basis, the facilities conduct Route Scouting and Design, New Product/process Development, Process Optimisation and Scale-up and Life Cycle Technology Management.

A strategic programme management system enables us to have an efficient work flow throughout the product lifecycle, from new enquiry to commercialisation, for every R&D project.

RISKS AND MITIGATION

Our comprehensive Risk Management framework ensures safeguarding the business from various foreseeable potential internal and external risks. The framework effectively monitors, maps and mitigates the various risks to business operations. The Risk Management Committee constituted by the Board of Directors is responsible for managing various organisational risks. The Committee devises and executes adequate mitigation plans in response to any risks. The Committee keeps a close watch on the emergence of a new threat /risk by observing changes in both internal and external environments.

Risk	Mitigation measure
Regulatory Risk: Being a part of the pharmaceutical industry, we have to ensure strict adherence to multiple compliances governing different markets. Non-compliance/misinterpretation/delayed compliance of any new/existing regulation can lead to inadequate observance.	Our comprehensive internal control system is equipped with adequate policies and review mechanisms which keep in check complete adherence to all applicable rules and regulations including new ones and any modifications in existing ones.
R&D Risk: With evolution in science and technology, we need to upgrade and invest in R&D to remain relevant. Insufficient or delayed R&D may affect business operations.	Understanding the importance of R&D, we have invested in world-class R&D units and have a proficient team of scientists working on innovation and R&D. We are committed to R&D and strive to remain relevant with advancements in technology.
Competition Risk: Rise in competitive pressure from domestic and/or international peers may impact revenue and margin.	Vast experience, wide product and services portfolio, robust brand equity, commitment to quality and compliance and a strong connect with all stakeholders - employees, customers and vendors, creates a differentiated position for us in the market. Unwavering focus on R&D and backward integration, coupled with an accomplished management team, enables us to stay ahead of competition.
Raw Material Risk: Unavailability or limited availability of raw materials and/or price volatility may have an impact on margin.	We have established strong connections with our suppliers leading to steady flow of inventory at competitive rates. To insulate ourselves from volatility in pricing, we follow a RM-plus pricing mechanism.
Quality Risk: Along with our vendors, we must comply with GxP (Good Laboratory Practices, Good Manufacturing Practices, and similar standards) across the product value chain to ensure quality commitment is met with. Any non-compliance may be dealt with regulatory penalties and sanctions impeding brand equity.	A dedicated group of quality experts ensure highest quality performance at every manufacturing site. "RIGHT THE FIRST TIME" approach is to be strictly followed and the team is to ensure that all sites are audit-ready at all times. Quality assurance and quality control processes are further strengthened by the use of latest information technology systems to streamline and optimise crucial procedures. We are committed to deliver the highest quality. We maintain a consistent quality improvement and training programme to address historical quality concerns and prepare for prevention. Any non-conformity is properly investigated and Corrective and Preventive Action (CAPA) plans are implemented immediately to rectify the situation and prevent recurrence.
Health, Safety & Environment Risk: Safety is of prime importance being a part of the healthcare industry as self-compliance and regulatory compliance. Incidents related to Health, Safety, and Environment (HSE) present significant risks to regulatory compliance, reputation, and business continuity, affecting the long-term sustainability of the organisation.	We are committed to the well-being of all our people across the supply chain and to minimise practices having a negative environmental impact. The HSE team oversees safety and operational exposures to ensure standardised corporate Health, Safety and Environment (HSE) guidelines are maintained across manufacturing sites. We ensure strict compliance to industry-leading safety standards and applicable local regulations. Our robust HSE management system helps in timely risk identification and mitigation. We conduct periodic internal audits and external audits following ISO 14001 and ISO 45001 standards, as well as specialist external audits that focus on specific HSE aspects. In addition, we conduct Hazard Study Checklist (design stage of product life cycle), Hazard Identification and Risk Assessment, as well as HAZOP Studies throughout product life cycle and operation. HSE campaigns focussing on different priority elements are run on a monthly basis to spread awareness and encourage a safer working environment.

INFORMATION TECHNOLOGY

Given the nature of the industry, information technology is a crucial aspect of business. We strive to achieve maximum level of data privacy, cybersecurity, and data security. With advancements in technology, it is mandatory for us to stay equipped to address the accompanying challenges. Since we deal with sensitive information, we require to safeguard data privacy to ensure confidentiality and integrity. To protect our business from malicious attacks and unauthorised access, we have in place appropriate cybersecurity measures.

Strong focus on data security enables us to handle critical data storage and transmission with ease. This enhances our decision-making capabilities and prevents the occurrence of losses. To ensure strict adherence with the information security management system, we have implemented robust procedures, controls and governance, assigning responsibilities to all stakeholders including our employees, contractors, customers, vendors, suppliers and visitors. We also strive to safeguard the personal data of all our stakeholders. Our seamless Business Continuity and Disaster Recovery plan ensures any negative event has minimum possible impact and there is rapid recovery in restoration of operations.

QUALITY ASSURANCE

Aim

• Improve Quality of its products and services

• Surpass customers & relevant stakeholders needs & expectations

• Upgrade manufacturing technologies and quality standards to achieve and maintain quality leadership, with trust on eco-friendly processes

Effort

• Robust quality systems to manufacture and deliver superior quality products

• Ensure compliance to high quality standards

• Safety, quality and efficacy global standards maintained at all our facilities

• Adhere to "RIGHT THE FIRST TIME" approach in planning and execution of all the process, products and services through a life cycle approach

• Seek constant customer feedback for product and process improvements

• Strict compliance to various national and international standards

Result

• A motivated team with a world-class competency to achieve the aims

• Superior quality products and services delivered to customers with Right Time First

• Delivered more than the customer ask

• Stay ahead of curve by understanding customer needs and market trends

INTERNAL CONTROLS, SYSTEMS AND ADEQUACY

Our comprehensive internal control framework has been designed to fit the size, nature of complexity of our business operations. Aimed at safeguarding assets, restricting unauthorised use or disposition, and ensuring strict adherence to all applicable rules and regulations, our internal control system guarantees complete and correct authorisation, recording and reporting of all business transactions. Our internal control system enhances operational efficiency and productivity by ensuring optimum utilisation of resources.

For effective risk mitigation, we have devised a Compliance Management System. It has unique features like a readily available comprehensive list of applicable laws at any given point of time, user-friendly alerts/escalations, customised reporting and mechanism to deal with timely regulatory updates. Hence, the Compliance Management System enables us to practise good governance across all our business locations.

CAUTIONARY STATEMENT

Aarti Pharmalabs may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with Bombay Stock Exchange and National Stock Exchange, and the reports to our shareholders. Aarti Pharmalabs does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of us. All information contained in this report has been prepared solely by us. Aarti Pharmalabs does not accept any liability whatsoever for any loss, howsoever, arising from any use or reliance on this Annual Report or its contents or otherwise arising in connection therewith.