Colinz Laboratories Ltd Management Discussions.

This Report includes Management Discussion and Analysis as appropriate, so that duplication and overlap between Directors Report and Management Discussion and Analysis is avoided. The entire material is thus provided in a composite and comprehensive document.

1) CAUTIONARY STATEMENT

Some of the statement in this report may be forward looking and are stated as required by the 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. Prime factors that may make a difference to the Company’s performance include market conditions, input costs, interest costs, the price control measures, economic development within/outside the Country, and the vagaries of monsoon.

2) COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE

The Company follows fair, ethical and transparent governance practice by adopting high standard of professionalism, honesty, integrity and ethical behavior. The Company has a well defined set of guidelines for its internal governance based on business ethics, Legal Compliance and professional conduct. The Company also has an adequate internal control system.

The Company has complied with the provisions of Clause 49 of the Listing Agreement with Bombay Stock Exchange which deals with the compliance of Corporate Governance requirement.

A) THE PHARMACEUTICAL BUSINESS

Colinz Laboratories Ltd. is engaged in the manufacturing and marketing of pharmaceutical formulations particularly in gynaecological sector. The Indian pharmaceutical market is highly competitive and also still fragmented with over 20,000 players comprising of foreign multinationals, Indian multinationals, mid-size and small scale companies. Your Company falls under the MSME sector. However, the company has established reputation as a quality supplier of medicines in the domestic market, wherever the company has operation.

B) OPPORTUNITIES, THREATS AND CONCERNS

The Company’s products are enjoying a good Brand image, particularly among gynaecologists. The Company has a potential to grow in future considering the fact that it is yet to open up its marketing operations in many states of the country, Due to paucity of working capital, the company is unable to expand its marketing activities, to unrepresented areas.

Your company, no doubt is focusing on those off patented products, and these products will have extended shelf life in the market, due to lesser discoveries of new molecules, considering the investment to be made, time and expenditure involved in developing such new molecules.

The price controls on NLEM and price increase band on non scheduled category of formulations were imposed by the Government on both controlled items and non controlled items, are of great concern.

There is concern with regard to the top line and bottom line of the forth coming Financial Year in view of the de-stocking of the goods by the trade channel due to implementation of GST which has affected both the pharma and FMCG sector. There is also a concern with regard to the Governments move to introduce generic medicines in all segments of therapy, since company is marketing Branded Medicines.

C) OUT LOOK

Barring unforeseen deterrents and the issues outlined above, the Company does not foresee any major threats in its survival. However, the margins are likely to be under heavy pressure due to high inflation prevailing in the country resulting in increase in all inputs/costs, and the cap on selling prices on account of Drug Price Control Order 2013.

D) FINANCE

The financial management and cash flow have been satisfactory, during the year under review.

E) INTERNAL CONTROLS

The Company has proper and adequate internal control system, in respect of efficiency of operations, financial reporting and compliance with applicable laws and regulations etc. There are adequate controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposal and that all transactions are authorized, recorded and reported correctly.

F) HUMAN RESOURCES

Human resources are highly valued asset for any industry particularly in pharmaceutical selling. Therefore the Company seeks to attract and retain expert technical and marketing staff. The Company also recognizes the importance of human assets and ensures that proper encouragement is extended to the employees to motivate them. The total number of permanent employees as on 31-03-2017 was 55. The Company enjoyed excellent relationship with its employees during the year under review.