Omkar Pharmachem Ltd Management Discussions.

Statements in the Management Discussion & Analysis Report which seek to describe the Companys objectives, projections, estimates, expectations or predictions may be considered to be "forward-looking statements" and are stated as required by applicable laws and regulations. Actual results may differ materially from those expressed or implied. Many factors including global and domestic demand-supply conditions, prices, raw-materials availability, technological changes, changes in Government regulations, tax laws and other statutes may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook.

Financial Performance and other details has already been mentioned in Director report under State of affairs of company heading.

Industry structure and development

The global Pharma industry has fared well amidst the past economic downturns. In light of todays volatile marketplace, which is faced with economic, political and social challenges, this industry is faced with reform-driven pricing pressures and increased demand for value in innovation. Significant global unmet needs, aided by favourable demographic trends, make it likely that this industry would enjoy long term growth. Driven by the recent wave of innovative therapies approved by regulators, reports suggest that the global drug spending could be in trillions by 2022.

Globally, spending on healthcare correlates well with general economic strength of a country. Given the high contribution of the USA, Russia, and Brazil in global growth of healthcare spending, coupled with pricing pressures in the United States and the unstable economic conditions in large emerging markets have led to a slowdown in the global marketplace. Strict measures taken by the governments with regards to health care budgets and/ or reductions in out- of-pocket expenditures in these countries have impacted the spending. Aging populations, rise of chronic diseases and the introduction of innovative and frequently expensive treatments (e.g., for cancer and Hepatitis C) are some of the main factors, which would continue to drive growth in health care spending.

However, many countries have taken steps to contain health care costs that includes price control, value-based pricing and reimbursement along with pro-generic and pro-biosimilar policies. Companies are responding to the current changing market dynamics and are trying to position themselves for continued growth through portfolio transformation, mergers and acquisitions (M&A), cost-cutting, sharpened focus on high-performing therapeutic areas (TAs) and on key geographic markets.

Opportunities, Threats, Risk and Concern

The Company as being hit by financial crisis and due to lack of suitable business opportunities in past few years, company was unable to carry on any business activity. Any slowdown in the growth of Indian economy or any volatility in global market, could also adversely affect the business.

However, Company is exploring some new business opportunities to get itself back on track, keeping in mind the same, company has accorded boards approval for adding some new business activity in its main object also which is subject to approval of members of the company.

Outlook

While the economic outlook still looks uncertain, some signs of revival are visible. With most market participant expecting the coming of decade to represent after subbed environment for both, financial return and transaction activity, the industrial growth is positive on years of double digit returns/ volume.

Adequacy of Internal Controls

The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition, and that transaction are authorized, recorded and reported correctly. The internal control system is designed to ensure that the financial and other records are reliable, for preparing financial statements and other data, and for maintaining accountability of assets.

Segment wise Reporting

As there is neither segments nor has different products, requirement of presentation of segment wise performance is not applicable to the company.

Human Resource Development

The company intends to give required training to its personnel to have personnel development of the employees contributing to the growth and development of the company, as and when required.

Details of significant changes in key financial ratios alongwith explanation

In compliance with the requirement of the Listing Regulations, the key financial ratios of the Company alongwith explanation for significant changes (i.e., for change of 25% or more as compared to the immediately previous financial year will be termed as ‘significant changes), has been provided hereunder:

S.N. Particulars 2018-19 2019-20 Changes (%) Explanation
1 Debtors Turnover 0.00 6.67 - As there is no sale and so ratio being 0 for 2018-19, any change in % will be infinitive. So % change can not be calculated.
2 Inventory Turnover 0.00 0.00 0.00% NA
3 Interest Coverage Ratio -10.32 -3.88 62.37% The reason of change is decrease in loss. The main reasons of decrease is generation of revnue during the year to the tune of Rs. 450000 as against nil in earlier year; decrease in employee cost of Rs. 379100 and there was bad debts written off during last year amounting to Rs. 763920.
4 Current Ratio 0.033 0.064 96.05% 1. There is increase in current borrowing by an amount of Rs. 2881924/- contributing to 96.80% change in current liabilities. Others are minor changes
2. The change in ratio is only of 0.031 only. But total current assets and total current liabili- ties being low in terms of rupees, minor changes in rupee terms shows higher change in percentage.
5 Debt Equity Ratio 0.07 0.11 34.35% 1. There is increase in current borrowing by an amount of Rs. 2881924/- contributing to 96.80% change in total liabilities.
2. The change in ratio is only of 0.0375 But total liabilities being very low in terms of rupees, minor changes in rupee terms shows higher change in percentage.
6 Operating Profit Margin (%) 0.00 -4.59 - As there is no revenue and so ratio being 0 for 2018-19, any change in % will be infinitive. So % change can not be calculated.
7 Net profit Margin (%) 0.00 -5.77 - As there is no revenue and so ratio being 0 for 2018-19, any change in % will be infinitive. So change can not be calculated.
8 Return on Net worth -4.83 -3.08 36.32% The increase in Profit to Net Worth Ratio is the result of increase in revenue of the company during the year.