Roopa Industries Ltd Management Discussions.

Company overview:

Roopa Industries was incorporated in the year 1985 and operates in the segment of manufacturing and marketing of bulk drugs and intermediaries.

Indian Pharma Industry:

Indian Pharmaceutical market has witnessed growth in both acute and chronicdieses segments. The major reason for the growth is increase in the incident of the chronicdiseases and its early detection, but still the acute disease segment dominates market share in the Indian pharmaceutical industry.Increasing urbanization, lifestyle changes and stress are responsible for the higher incidents of Chronic deceases.

Demand outlook:

The key drivers of growth include:

• Rising healthcare awareness leading to an increase in spending on medicines

• Changing life-styles leading to growing incidence of chronic ailments

• Improving health insurance coverage driven by various measures being planned/ implemented by the Indian government to bring 80% of the population under health insurance cover.

• The company is focusing on brand building and customized marketing to suit to different customers and segments especially with its main product as TPP.

Risks and concerns:

The key challenges for the Indian pharmaceutical industry include the following:

• Ensuring compliance with global GMP standards; this will involve continuous improvement in the systems and processes as well as training of the workforce.

• Government-mandated price controls on pharmaceutical products

• Increasing competition from new entrants and expanding large/medium industries.

• Credit sales demanding more working finance.

• Maintaining inventories to meet sudden & urgent requirements by buyers, thus flooring available resources.

• Continuous R & D for company effectiveness as the competition is from domestic players as well as global market such as China.

The company manages the risk through careful market research for selection of product and by continuous monitoring. The Company has consistently supported Research & Development (R&D) for sustainable value creation.

MANUFACTURING FACILITIES

The Companys key priority is to ensure world-class quality in process and operations in all its manufacturing facilities. The Company has engaged professional and technical persons in the key positions and ensuring quality production and timely delivery of goods.

The Company focussed its core business on TPP and some intermediaries. During the year the Company recorded a sale turnover of Rs.32.82 Crores.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has adequate Internal Control Systems and Procedures with regard to purchase of Stores, Raw Materials including Components, Plant and Machinery, equipment, sale of goods and other assets. The company has clearly defined roles and responsibilities for all managerial positions and all operating parameters are monitored and controlled. The Company designs and maintains accounting and internal control systems to provide reasonable assurance at reasonable cost that assets are safeguarded against loss from unauthorized use or disposition, and that the financial records are reliable for preparing financial statements and maintaining accountability for assets. These systems are augmented by written policies, an organizational structure providing division of responsibilities, careful selection and training of qualified personnel, and a program of internal audits. The company has an Internal Audit System commensurate with its size and nature of business. Our Internal Auditors of the Company give periodic reports. Internal Auditors are reviewed in the meeting of the Audit Committee of the Board. Compliance with laws and regulations is also ensured and confirmed by the Internal Auditors of the Company. Standard operating procedures and guidelines are issued from time to time to support best practices for internal control.

FINANCIAL PERFORMANCE & OPERATIONAL PERFORMANCE:

A. FINANCIAL HIGHLIGHTS: Capital Structure:

The Authorised Share Capital of the Company is Rs. 9,00,00,000/- comprising of 90,00,000 Equity Shares of Rs.10/- each.

The Paid up Capital of the Company is Rs. 7,86,55,200/- comprising of 78,65,520 Equity Shares of Rs.10/- each.

Other Equity:

The Other Equity of the Company as on 31.03.2019 stand at Rs.2,55,64,985 /- as compared to Rs. 1,95,03,535/- in the previous year.

Property, Plant & Equipment:

During the year, the Company has added Fixed Assets amounting to Rs.2,70,10,344/-making the gross fixed assets as on 31.03.2019 to Rs.17,30,01,572/-.

Inventories:

Inventories, as on 31st March, 2019, is Rs.10,64,86,152/- as against Rs.9,26,15,952/- in the previous year.

Trade Receivables:

Trade Receivables decreased to Rs.11,06,56,394/- as on 31st March, 2019 as against Rs.12,24,18,529/-in the previous year. These receivables are considered good and realizable.

Cash and Cash Equivalents:

Cash and Cash Equivalents stood to Rs.17,27,019/- as against Rs. 5,84,110/- in the previous year and the balances deposited with banks as Security stood at Rs.58,05,993/ - as on 31st March, 2019 and Rs.53,90,901/- in the previous year.

Loans:

Non current Loans decreased to Rs.34,06,208/- as against Rs. 38,64,487/- in the previous year. Current Loans decreased to Rs.2,37,51,440/- as against Rs. Rs.3,61,40,472/- in the previous year.

Current Liabilities:

Current liabilities for the F.Y. 2018-19 is Rs.15,61,10,287/- as against Rs. 14,70,46,698/-in the previous year.

B. OPERATIONAL RESULTS:

Turnover:

During the year 2018-2019, the turnover of the Company is Rs.30,14,99,552/- as compared to Rs.19,53,98,735/- in the previous year.

The Income from other sources as on 31st March, 2019 is Rs.28,25,282/- as compared to Rs. 4,64,60,845/- in the previous year.

Depreciation:

The Company has provided a sum of Rs.57,24,979/- towards depreciation for the year as against Rs.52,47,814/- in the previous year.

Provision for Tax:

The Company has provided a sum of Rs.14,77,871/- towards Income Tax provision for the current year.

Profit after Tax:

The Profit of the Company after tax is Rs.60,41,238/- as against Rs.53,94,611/- in the previous year.

The total comprehensive income for the year stood at Rs.60,61,437/- as compared to Rs.45,35,367/- in the previous year.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS:

The Company has a team of able and experienced staff and executives and the relation with the employees remained cordial throughout the year. Its management training schemes strive to develop business managers of tomorrow. In house training is given to the employees to induce contribution for enhanced productivity and development programmes for all levels of employees are being given as the company considers human resources are invaluable asset. As on 31st March 2019 the company has a total strength on 58 employees.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Companys objective, 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, among others, 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 incidental factors.

By order of The Board of Directors
Sd/-
T.G. RAGHAVENDRA
Place : Hyderabad Chairman and Managing Director
Date : 14th August, 2019 (DIN : 00186546)