Beryl Drugs Ltd Management Discussions.

CAUTIONARY STATEMENT

Some of the statements in the report may be forward looking and are stated as required by applicable laws & regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook. The Companys Performance is dependent on several external factors such as performance of monsoons, government policy, fluctuation of prices of raw material and finished products and also their availability etc. which could adversely affect the operations of the Company.

OVERVIEW:

Indian pharmaceutical industry can be defined as a success story providing employment for millions and ensuring that essential drugs are available at affordable prices to the vast population of Indian subcontinent.

The pharmaceutical industry remained largely unaffected by the economic slowdown, especially critical therapies. The Company diversified its global presence, regulated and emerging economies, making it possible to sustain growth despite short-term slowdowns in any geography. Besides, the Company focus on commercializing products in emerging areas translated into industry out-performance. The Company focused on widening its product basket and increasing product registrations, as a result of which growth is expected to accelerate.

There has been no occurrence of any event or circumstance since the date of the last financial statements that may materially and adversely affect or is likely to affect the trading or profitability of our Company or the value of our assets or our ability to pay our liabilities.

INDUSTRY STRUCTURE & DEVELOPMENT:

The Indian Pharmaceutical Market has been witnessing double digit growth over the last five years. However, the growth showed down last year to adjust for interventions such as demonetization and the introduction of the new GST structure. IMS estimates that the Indian Pharmaceutical Market size is at nearly Rs. 1,200 billion growing at 5.4% over the previous year. The market is expected to return to higher growth and the IMS Prognosis Report September 2017 projects the market growth at ~9% (+/-3%) per annum over the next five years. This growth will be driven by factors such as improving healthcare access,

Increasing awareness around non-communicable diseases, rapid urbanization and expansion of insurance coverage, However traditional business models will be challenged in the content of price controls, stricter regulations on marketing practices and emergence of digital alternatives.

In one of Indias biggest tax reforms, a comprehensive Goods and Services Tax (GST) has replaced the complex multiple indirect tax structure from 1st July 2017. During the implementation of GST, the operations of the Company were temporarily impacted due to down stocking in the trade channels in anticipation of GST regime. The introduction of GST is also expected to bring changes in pharmaceutical distribution

GLOBAL ECONOMY:

The global Pharma industry is under serious pressure from a large number of innovator molecules facing patent expiration, a thin pipeline of new drugs, regulatory challenges and pricing pressures. Indian Pharma industry expects over 40% of the global Pharma industrys incremental growth over the next decade to come from emerging markets.

INDIAN ECONOMY:

Indian policy makers have been boosting growth at the cost of macro stability risks, reflected in high inflation, a widening current account deficit and tight inter-bank liquidity due to low deposit growth. Overall macro conditions will remain vulnerable over the next 4-5 months. Inflation, while moderating, will remain above the RBIs comfort zone; while we believe the current account deficit will also stay relatively high.

There is additional risk of pass through of agricultural and commodity prices.

RISKS & CONCERNS:

The business of the company totally depends upon the changes taking place in the economy either it be relating to fluctuations in stock and capital market, regulations governing such markets, government policies, taxation policies, changes taking place in global economies, etc. The growth of industry provides necessary opportunities for the company to grow. However the company is under constant pressure due to steep competition from unorganized sector and industrial scenario in the nearby area.

The companys strength is built around domestic and international marketing network. The company has a network of 3 marketing offices in India as well as over 30 corporate customers and over 3 channel partners as a part of its domestic network which is comprised from various industry segments, allowing the company to de-risk its business.

The company does face threats from imports and other new emerging players in these product lines.

SEGMENT-WISE PERFORMANCE:

The operation of the company consists of the single statement. Hence, Accounting Standard on Segment Reporting (AS-17) issued by The Institute of Chartered Accountants of India does not apply.

FUTURE OUTLOOK:

The companys future plans are based on experience and ongoing market research for future growth in demand of our key products in the domestic and international markets. Our objective is to concentrate on better margin yielding products and exploit growing market opportunities for these products. For this we are planning for new strategies to be laid down in near future which would help the Company to achieve higher growths and establishment.

Also, we are committed to deliver quality products on a consistent basis and at competitive prices. Our strategy has been to develop strong customer relationship and to be a customer driven Company.

Commodities prices have maintained high volatility, making it difficult to take long-term view on prices continue affect the fuel prices. The appreciation of Rupee against dollar has further been a cause of concern for exporters.

Factors that may affect results of the operations:

Financial conditions and results of operations of the company are affected by numerous factors inter alia-

• Growth of unorganized sector and threat from local regional players

• Change in freight and forwarding charges

• General economic and business conditions

• Companys ability to successfully implement our growth strategy

• Prices of raw materials the company consume and the products it manufacture

• Changes in laws and regulations relating to the industry in which the company operates

• Changes in political and social conditions in India

• Any adverse outcome in the legal proceedings in which the company is involved

• The loss or shutdown of operations of our Company at any time due to strike or labor unrest or any other reason.

Results of Operations:

During the year the Company has achieved a turnover of Rs. 129598426/- compared to Rs. 152487079/-. Profit before exceptional and extraordinary items and tax in 2018-19 is at 7962944/- compared to Rs. 12734950 /- in the previous financial year. Net profit after tax stood at 5907386/-, as against Rs. 9929284/- in the previous fiscal year.

INTERNAL CONTROL AND ADEQUACY:

The Company has a defined organization structure and has developed well policy guidelines with predefined authority levels. An extensive system of internal controls to ensure optimal utilization of resources and accurate reporting of financial transactions and strict compliance with applicable laws and regulations has also been implemented. The Company has put in place sufficient systems to ensure that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are authorized, recorded and reported correctly. Also, the company has an exhaustive budgetary control system to monitor capital related as well as other costs, against approved budgets on an ongoing basis.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT:

The Companys human resources philosophy is to establish and build a strong performance driven culture with greater accountability and responsibility at all levels. To that extent the Company views performance and capability as a combination of the right people in the right jobs, supported by the right processes, systems, structure and metrics.

The Industrial relations remained normal at all locations and there were no significant labor issues outstanding or remaining unresolved during the year. The Board of Directors and the Management wish to place on record their application of the efforts put in by all employees to achieve record performance. The ultimate aim of the management is to create a dependable work force that will play a key role in transforming this Company into a global player in the industry.

The industrial relations climate of the Company remained cordial during the year and continues to be focused towards improving quality and capability.

CONCLUSION:

The Company dwells on chalking out the best possible future plans and policies so as to avoid the pitfalls and following the best course in the long run. In business, a focus on assets utilization, earning maximization, continuous growth and relentless strengthening of the internal efficiencies will enable the Company to deliver superior value for its shareholders on a sustained basis in future.