Parnax Lab Ltd Management Discussions.

ANNEXURE III

INDUSTRY STRUCTURE AND DEVELOPMENT:

Indian pharma industry enjoys an important position in the global pharmaceuticals industry. Industry is gearing up for the next level of growth driven by shift towards specialty products, customer centricity, focus on improving quality, operational efficiency and productivity and selective mergers & acquisitions.

With a distinct niche of a wide range of products in the veterinary markets, we are poised to take advantage of this unique opportunity available to producers in India. Our focus is not the developed markets of America, Europe and Japan but the developing markets in rest of the world. While these are price sensitive, the opportunity exists to enlarge market presence and deepen the reach. We plan to extend our reach in these markets and improve our performance by being one of the most cost competitive producers.

SEGMENTWISE PERFORMANCE:

The Company is Engaged in Trading of Pharmaceuticals, Medicinal products and this may be considered as the only segment. Therefore, the requirement of segment wise reporting is not applicable.

OPPORTUNITIES / OUTLOOK:

The Company is exploring overseas market for its products and optimistic to achieve good results. The growth in industrial output and increase in investment in core and infrastructure sector should improve the sentiments of Economy.

On the whole, your Company is optimistic for the outlook of growth in the short to medium term in terms of total revenues/ turnover and operating margins considering overall expected positive trend in Pharmaceutical industry.

THREATS:

The global markets have slowed in the past decade from double digit growth rates seen earlier to single digit growth rates. The US and European markets have slowed down even more.

The technological developments in healthcare as a whole, such as artificial intelligence and 3D printing and their impacts on business models, operations, workforce needs and cybersecurity risks need careful understanding as obsolescence can quickly steal in. Also, As the regulators and society demands on industry to minimise the footprint on environment gets stiffer, the industry needs to raise its standard and attain global standards in environment and workforce health.

RISKS AND CONCERNS:

Every company is exposed to certain risk and Parnax Lab Limited is not an exception. The Company has risk management system to mitigate the risk.

Due to non-profitable operations in the market, it could adversely affect the Companys business, operations and financial condition. This scenario poses the risk of concentration and dependence on one market. In order to reduce the concentration risk, the Company has been spreading its business and with its effective marketing strategy is also increasing sales volumes in existing markets and is making regular efforts to widen geographical spread.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

Parnax Lab Limited has an inclusive internal control system, furnished with qualified and experienced personnel in several departments. This enables smooth functioning within the Company. The internal control commensurate with its size and nature of the business. These procedures ensure efficient use and protection of the resources. It ensures reasonable assurance about the reliability and integrity of financial statements. Additionally, the internal audit process is designed in such a way, that it reviews all significant areas of the Companys operations.

HUMAN RESOURCES POLICIES:

The Company treats all its employees equally and considers them the most valuable assets. It has implemented human resource policies for effective and efficient staffing. The Companys main focus is to attract and retain its pool of scientific and managerial resources. Performance of employees are recognised individually, through a thoughtful mix of incentives & performance bonuses.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.

For and on behalf of the Board
of Parnax Lab Limited
Sd/-
Date:14 May, 2019 Prakash M. Shah
Place: Mumbai Chairman & CEO
(DIN 00440980)