Ishita Drugs & Industries Ltd Management Discussions

REPORT

GENERAL INFORMATION ABOUT THE COMPANY

The company is engaged in the business of manufacturing of various APIs (Active Pharma Ingredients) and drug intermediates. It has built up a reputation as a manufacturer of “high quality” products and is known for its ethical dealings in business. The company supplies its products to leading pharmaceutical companies of India. The products are also being exported to various countries across the world.

The Indian API industry has been facing a challenging business environment for last few years. With opening up of the Indian markets and signing of the WTO arrangement, the imported APIs and Intermediates became available at a very competitive price. This impacted the indigenous API and Intermediates manufacturers, who could not compete with the imported pricing.The Indian API industry has also been affected by stringent pollution control norms. Presently, almost 60-70% of total APIs consumed in India are imported. Over a period of time, the manufacturing capabilities & capacities for APIs in India has gone down. However, due to the COVID-19 pandemic, the present Govt. has recognized the importance of reducing dependence on China for APIs and has affirmed its commitment to encourage domestic API industry by introducing special measures for its development.

During the year under review, the Government of India amended the Schedule M of the Drugs and Cosmetics Act, 1940, in an effort to bring the nations pharmaceutical quality standards up to par with global standards. The Schedule M prescribes the Good Manufacturing Practices (GMP) and requirements of premises, plant, and equipment for pharmaceutical products. Based on the current guidelines, the Company has to comply with amended Schedule M by December 2024.

The Company will have to undertake a major renovation and upgradation of its manufacturing facility to meet the requirements of the amended Schedule M. The project will involve dismantling of some old production areas, construction of new buildings, purchase and installation of many new equipment, utilities etc. This is going to be a major challenge and threat for the Company, in terms of availability of knowledge resources, skilled manpower and funds. On account of these regulatory changes, the present business environment is quite challenging and uncertain.

However, the Board is confident that your Company would be able to comply with the requirements of the amended Schedule M in due course. Once the facility is upgraded, the Company would be able to introduce newer products as also start exporting to regulated markets. This would provide a great impetus to its growth.

The managements opinion on the future outlook for the

Company is given under the Directors Report forming part of the Annual Report of the company.

The Company has adequate and effective internal controls to provide reasonable assurance on achievement of its operational, compliance and reporting objectives.

The Company has deployed controls through its policies and procedures. It helps the Management to accomplish its objectives by bringing a systematic and disciplined approach to improve the effectiveness of risk management towards good corporate governance. The Directors handle most of the day to day functions. The Directors are regularly looking after all the key areas of the operations.

The managements view on the business operations and financial performance of the company, including export performance and earnings, is given under the Directors Report forming part of the Annual Report of the company.

The Companys operations are managed by technically and educationally qualified staff at all levels, who in turn are guided and supervised by the Directors of the Company. During the year under review, the company has increased the number of employees to better look after the various operations and to prepare for a better growth in the future.

Statement in the Management Discussion and Analysis, describing the Companys objective, projections and estimates are forward looking statements and progressive within the meaning of applicable security Laws and Regulations. Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental factors.

I hereby confirm that the Company has obtained from all the members of the Board and employees at senior management level, affirmation that they have complied with the code of conduct for Board of Directors and senior management level employees.