Beta Drugs Ltd Management Discussions.

In terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 the Management Discussion and Analysis Report (MDAR) is structured as follows:

Industry structure and developments Opportunities & Threats

Segment-wise or product-wise performance

Outlook

Risk and Concerns Internal Control System

Financial and operational performance Material Development in Human Resources

Some Statements in this discussion may be forward looking. Future performance may however differ from those stated in the management discussion and analysis on account of various factors such as changes in Government regulations, tax regimes, impact of competition, etc.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Globally, the past 18 months were an unprecedented period with countries combating the extreme volatility, uncertainty and complexity presented by the COVID-19 pandemic. Governments across the world along with central banks have initiated massive fiscal and liquidity measures to shore up countries and economies finances battered by wide spread lockdowns imposed to contain the pandemic. The pandemic tested the resilience and agility of businesses to adapt to evolving consumer demand patterns, while tackling several challenges in the supply chain. The COVID-19 pandemic has had a very damaging impact on activity in the first half of 2020 than expected, and the recovery is forecasted to be more gradual than previously expected. In 2021 global growth is forecasted at 5.4%. Overall, this would leave 2021 GDP roughly 6.5 percentage points lower than in the pre-COVID-19 projections of January 2020. The adverse impact on low-income households is particularly acute, imperiling the significant progress made in reducing extreme poverty in the world since the 1990s.The Indian economy expanded 3.1 percent year-on-year in the first quarter of 2020, beating market forecasts of a 2.1 percent rise. Still, it is the slowest GDP growth since quarterly data became available in 2004, as the country imposed a nationwide lockdown from March 24th aiming to contain the spread of the coronavirus. However, Indian pharma has been relatively resilient to the COVID disruption, as global medicine shortages have opened about new export avenues for many Indian pharmaceutical companies.

OPPORTUNITIES & THREATS:

While the domestic and International economic conditions continue to remain challenging and are expected to remain for some more time, we expect that with wide range of products, quality standards and team efforts, your Company will be in a position to weather this situation. Your Company has continued to be the preferred supplier of many leading companies and has been successful in expanding its approval base, adding leading players from the industry. Therefore, we expect that your Company will continue to be in a position to gradually expand its market reach and improve its market share. The Company regularly insures all its assets to enable itself in case of any mis-happening. The Company has formed a risk management team which constantly monitors the Indian and international markets and guides the management of any sort of prevailing risk to the company. The commodities prices being internationally traded are affected by the global market demand and supply forces and the dollar rate. The risk management team plays a major role here. Moreover, the industry is labour oriented and business operations of the Company may be materially affected by strikes, lock outs or work stoppage.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE:

Your company has only one segment that is trading and manufacturing of pharmaceutical products.

OVERVIEW & OUTLOOK:

Indian pharmaceuticals industry is well respected worldwide and is one of the most successful industries in India contributing greatly to countrys healthcare outcomes and GDP. Top notch capabilities and advantageous market conditions over the last many years have ensured that India continues to be one of the most profitable pharma markets across the world. It remains an attractive destination for generic R&D and manufacturing of pharmaceuticals owing to its strong capabilities across the value chain. Oncology drugs market is expected to grow at a fast clip across the world primarily driven by an ageing population and lifestyle changes making population susceptible to cancer. In India the Oncology drugs market is expected market to grow in double digits for the next many years to come. Therefore, Beta Drugs being a leader in the oncology segment has long runaway ahead both in terms of opportunities and growth.

RISK AND CONCERNS:

Pharmaceutical industry is most regulated industry in whole word. Being pharmaceutical company we have to follow various government regulations. Change in regulatory norms in India or elsewhere in exporting countries shall effect the operation of Company.

INTERNAL CONTROL SYSTEM:

The Company has in place an adequate system of internal control commensurate with its size and nature of its business. These have been designed to provide reasonable assurance that all assets are safeguarded and protected against loss from unauthorized use or disposition and that all transactions are authorized, recorded and reported correctly and the business operations are conducted as per the prescribed policies and procedures of the Company. The Audit committee and the management have reviewed the adequacy of the internal control systems and suitable steps are taken to improve the same.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During the year, Revenue of the Company increased by 21.80% i.e. from Rs. 6573.62 lakhs to Rs 8006.76 lakhs.Profit before tax increased by 10.40% i.e. from Rs. 895.03 lakhs to Rs.988.11 lakhs.Profit after tax is Rs. 697.77 lakhs.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS:

Your Company firmly believes that its human resources are the key enablers for the growth of the Company and important asset. Hence, the success of the Company is closely aligned to the goals of the human resources of the Company. Taking into this account, your Company continued to Invest in developing its human capital and establishing its brand on the market to attract and retain the best talent. Employee relations during the period under review continued to be healthy, cordial and harmonious at all levels and your Company is committed to maintain good relations with the employees.

KEY FINANCIAL RATIOS

Following are ratios for the current financial year and their comparison with preceding financial year:

Ratio Description As on 31st March,2021 As on 31st March,2020
1 Debtor Turnover 0.26 0.32
2 Inventory turnover 0.10 0.09
3 Interest coverage ratio 13.79 14.98
4 Current ratio 2.39 1.73
5 Debt Equity ratio 0.07 0.14
6 Operating Profit Margin(%) 13.41% 14.68%
7 Net Profit Margin(%) 8.78% 10.87%

Analysis:-

1. Companys cash & cash equivalent were increased by Rs 4.10 crores and moreover the current liabilities were reduced by Rs 3.58 crores which led to increase in current ratio from 1.73 to 2.39.

2. Our short term borrowings as on 31.03.2020 was Rs 3.96 crores whereas it is Rs 50.08 lac in the financial year 2020-21. Further our shareholders fund increased from Rs 56.43 crores to Rs 63.41 crores , hence reducing our debt equity ratio by 50%. Return on Net worth in financial year 2020-21 is 11% whereas it was 12.58% in the previous year. This change in the return on net worth is due to the following reasons:-

a) Last year our depreciation was only Rs 2.57 crores whereas in the financial year 2020-21 the depreciation is Rs 5.27 crores, this is due to the capitalization of major block of plant & machinery in March, 2020. So the depreciation of this new block was only for 1 month in the financial year 2019-2020 whereas it was for full year in the financial year 2020-21.

b) The company has availed deduction on account of in house scientific research approved by "DSIR" in the financial year 2019-20 which was not available in the financial year 2020-21, so the company had to pay much higher taxes in the financial year 2020-21.

CAUTIONARY STATEMENT:

Statement in this Management Discussion and Analysis Report, describing the Companys objectives, estimates and expectations may constitute ‘Forward Looking Statements within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.

Dated: 31.08.2021 By Order of the Board of Directors
Place: Panchkula
sd/-
Rahul Batra
Chairman & Managing Director
(DIN: 02229234)