Pharmaids Pharmaceuticals Ltd Management Discussions

A. Industry overview and Developments

Your Company aims to emerge as a globally competitive organization with an enthusiastic cutting-edge distinction in our business, confirming strictly to global quality standards and making a difference by creating brand value.

Your Company has stepped into a new line of business which falls within the domain of Contract Research, Development and Manufacturing Organization (CRDMO). Additionally, the company will be involved in various activities such as product discovery, research, development, manufacturing, testing, and analytical services. These services encompass non-clinical and clinical research, innovation services, and other related activities within biotechnology, pharmaceuticals, devices, nutritional products, and similar domains. The Pharmaceuticals industry is a vital component of the healthcare sector, dedicated to developing, producing, and marketing drugs for the prevention, treatment, and cure of diseases. The industry has experienced significant growth and development over the past few decades, due to several factors including advancements in technology, increased demand for healthcare services, and growing awareness and diagnosis of diseases.

The prominent pharma industry trends include an increasing focus on research and development (R&D) to create new and innovative drugs, and amalgamation of Artificial Intelligence in developing automated algorithms which will help in producing speedier, more precise, and reproducible results.

The industry is also facing challenges from emerging competitors, particularly in the form of generic drug manufacturers. Despite these challenges, the pharmaceuticals industry is projected tocontinue growing in the coming years, driven by increasing demand for healthcare services, the emergence of new markets in developing countries, and ongoing R&D efforts to develop new andmore effective drugs.

1. Enhance market presence with innovative service & product offerings.

Building upon its existing market presence, Your Company can further expand its reach by launching its business in the Good Laboratory Practices (GLP) Developmental Services, Drug Discovery & Laboratory animals services.

The growing demand for healthcare services has transformed the industry with increasing digitization, and traction of e-pharmacy and pharmacy chains. Increased healthcare coverage and better policy support are likely to boost growth whereas adverse regulation could impact in a negative way. With aging populations and increase in diseases, the demand for healthcare services, including pharmaceuticals is expected to grow. As the pharmaceuticals industry is heavily reliant on the R&D to create new and innovative drugs, by investing in R&D, our Company can create a pipeline of new products that can meet the evolving needs of the patients and healthcare providers.

2. Seek strategic partnerships for portfolio diversification.

Your Company can actively prospect with other pharmaceutical companies seeking to expand their product base in India. The Company has successfully acquired and integrated brands with Adita Bio Sys Private Limited, Siri Lab Vivio Diet Private Limited, Spring Labs and Anugraha Chemicals. Leveraging emerging opportunities and synergies across businesses, Your Company can prioritise the growth of its Contract Research, Development and Manufacturing Organization (CRDMO).

C. Global Pharma Market Performance

The global pharmaceuticals market has been performing well in recent years, with steady growthand increasing demand for healthcare products.

The market is driven by several factors, including the increasing prevalence of chronic diseases such as cancer, diabetes, and cardiovascular diseases, as well as the growing aging population. Advances in technology and innovation are also contributing to the growth of the market, with new drugs and therapies being developed to treat previously untreatable conditions.

Your Company can continue to prudently invest in R&D for introducing new chemical entities and difficult-to manufacture molecules that address unmet medical needs.

Despite the positive outlook for the pharmaceuticals market, the industry also faces challenges such as increasing regulatory scrutiny and pricing pressures, as well as the need to demonstrate thevalue and cost-effectiveness of their products. Nevertheless, pharmaceuticals companies continueto invest in research and development to drive innovation and develop new products to meet the evolving needs of their customers.

D. Pharma Outlook: Positive Factors

The New Financial Year comes with a new set of challenges. As a pharmaceuticals company, we are optimistic about the industry outlook in the coming years. The global pharmaceuticals market is expected to continue to grow, driven by an aging population, rising chronic diseases, and increased healthcare spending. We are committed to investing in innovation and R&D to developnew products and maintain our competitive edge in the industry. We see significant growth opportunities in emerging markets, where there is a large and growing population, rising incomes, and increasing healthcare spending.

In addition, we recognize the increasing importance of digital health technologies in the industry. We are actively exploring ways to incorporate these technologies into our business to improve ourstrategic goal to achieve our desired results.

In the years ahead, Your Company anticipates a robust expansion of its business operations within the domestic market as well as International market, with a special focus on CRDMO.

Your Company is confident in its ability to operate as an ethical, just and ecologically conscious firm.

The Companys diversified service offering portfolio helps to mitigate the risks associated with over-reliance on any specific product or market. As part of its transition to a science-based Company, Your Company is making substantial investments in R&D. This will position the Company favourably to develop innovative products and maintain a competitive edge. The Company is well-positioned to maintain its growth momentum, making it an attractive prospect for long-term investors.

E. Policy Support

Governments recognize the critical role that the pharmaceutical industry plays in providing essential healthcare products and in driving economic growth, and as such, are implementing policies and initiatives to support its development.

At the national level, governments are streamlining regulatory processes and creating a favorable business environment for pharmaceutical companies through measures such as tax incentives, funding for research and development, and investments in healthcare infrastructure. These initiatives are creating opportunities for us to invest in innovation and expand our operations.

F. Review of Operations

The company has consistently grown above market in the last several years by keeping a clear focus on providing scientific, trusted products, backed by expert clinical support.

The companys position has been enhanced through consistent scientific engagement with doctors, increasing geographic penetration.

G. Increasing Investment

Increasing Investments in R&D and Acquisitions are driving the Sectors growth.

H. Risks and Concerns

As a pharmaceutical company, it is important to acknowledge the risks and concerns facing in our industry. These include regulatory changes, patent expirations, pricing pressures, competitionfrom generics, and increased scrutiny on drug pricing and marketing practices. It is essential that we continue to monitor these risks and adapt our strategies to address them, while maintaining our commitment to providing innovative and effective healthcare solutions. Our goal is to mitigate these risks and navigate the challenges facing our industry with transparency and resilience.

Another concern is the potential for legal and regulatory challenges. The pharmaceuticals industryis heavily regulated, and companies must adhere to strict guidelines and regulations related to drug development, manufacturing, and marketing. Non-compliance with these regulations can result in significant fines and penalties, as well as damage to the companys reputation. Furthermore, lawsuits related to drug efficacy, safety, and potential side effects can result in significant legal costs and settlements.

We also closely monitor policy changes and developments in the industry to stay ahead of potential challenges. Overall, we remain committed to navigating the risks and challenges of the pharmaceuticals industry while maintaining a strong focus on innovation and quality outcomes.

I. Company Overview

As a pharmaceuticals company, we understand the importance of conducting regular and thorough reviews of our operations to ensure we are meeting our commitments to our stakeholders, including customers, employees, and investors. Our overviews include evaluating our performance against industry benchmarks, identifying areas for improvement, and implementing measures to enhanceour business practices and maintain our position in the healthcare industry. We are committed to ongoing improvement and remain vigilant in our efforts to ensure the safety, efficacy, and quality of our products and services.

J. Performance and Operations Review

During F.Y. 2024-25, the revenue from operations was about Rs.234.09 lakhs. The Company reported a Loss of 727.92 lakhs during the year against loss of Rs. Rs.494.98 lakhs in the previous year. Your

Directors continue to explore new business opportunities aimed at enhancing the Companys growth and profitability. Efforts are being directed towards strengthening operations and achieving improved financial performance in the coming years.

K. Internal Control Systems and Adequacy

Your Company has established comprehensive Internal Control Systems with well-defined compliance guidelines, enabling smooth operations with a reasonable level of assurance. These internal controls serve to protect the Companys assets, monitor cost structures, ensure sound financial and accounting controls, and adhere to accounting standards.

The system incorporates continuous monitoring, routine reporting, checks and balances, purchase policies, authorization and delegation procedures, and regular audits. To support these internal controls, the Company maintains an Internal Audit Team and conducts periodic reviews under the managements supervision. The Audit Committee convenes regularly to assess the adequacy and scope of the internal audit function, discuss significant findings, and address any abnormal occurrences. The system undergoes continuous improvement and modification to align with changes in business conditions, statutory requirements, and accounting standards.

Your Company has adopted policies and procedures covering all financial, operating and compliance functions. These controls have been designed to provide reasonable assurance over:

1. Effectiveness and Efficiency of operations

2. Prevention and detection of fraud and errors

3. Accuracy and completeness of the accounting records

4. Timely preparation of reliable financial information

5. Safeguarding assets from unauthorized uses or losses

6. Compliance with applicable laws and regulations

This framework is sound in design and is continuously evaluated for effectiveness and adequacy. The management is committed to ensuring an effective internal controls environment, which provides assurance of compliance with internal policies, applicable laws, and regulations, ensures the accuracy of records, promotes operational efficiency, protects resources and assets and overall minimize the risks.

L. Material Development in Human Resources / Industrial Relations Front

The Number of Employees as on 31st March 2025 was 28 (Twenty-Eight).

The Companys growth is predominantly attributed to the competence and quality of its human resources. Our work environment fosters a challenging and performance-oriented atmosphere, acknowledging employees potential by offering ample opportunities. We have diligently refined our hiring process to ensure discipline and effectiveness. Prioritizing the acquisition and retentionof talent aligned with the Companys goals remains a key focus area.

M. Details of Significant change in the Key Financial Ratios: