Themis Medicare Ltd Management Discussions.

(a) Industry structure and developments:

Indian pharmaceutical sector is reported to accounts for about 2.4 per cent of the global pharmaceutical industry in value terms and 10 per cent in volume. India accounts for 20 per cent of global exports in generics. In FY16, India exported pharmaceutical products worth USD16.89 billion, with the number expected to reach USD40 billion by 2020. The countrys pharmaceutical industry is expected to expand at a CAGR of 12.89 per cent over 2015-20 to reach USD55 billion. India has become the third largest global generic API merchant market by 2016, with a 7.2 per cent market share. The Indian pharmaceutical industry accounts for the second largest number of Abbreviated New Drug Applications(ANDAs), is the worlds leader in Drug Master Files (DMFs) applications with the US.

(b) Opportunities and Threats. :

Pharma business being associated with basic human needs, introduction of newer and cost effective medicines in different therapeutic groups enjoys maximum opportunities in a densely populated country like India.

The share of generic drugs is expected to continue increasing; Due to their competence in generic drugs, growth in this market offers a great opportunity for Indian firms. Generic drug market is expected to grow in the next few years, with many drugs going off-patent in the US and other countries

Availability of sub-standards products in the market, fierce competition as well as Govt. intervention in the pricing policies are major threats to the business stability for a small size Company like ours. However, the management is taking all necessary steps and continuously adopting the strategy not only to stand in the market but to perform impressively under the current scenario. YourCompanysstrong foothold on R&D has contributed for introduction of many new products over the years. The present thrust in mainly in introduction of marketing of differentiated injectables in India and abroad. Indian pharma companies will face competition from big pharma companies, backed by huge financial muscle . Generic drugs offer a cost effective alternative to drugs innovators and significant savings to customers.

(c) Segment-wise or product-wise performance.

The Company operate in single segment i.e. pharmaceuticals. However, the Company has given more thrust for last many years on Formulations SKUs as compared to API. The results of the Company under review also depicts that Formulation business has grown at much faster rate than APIs.

(d) Outlook: Your Companys capabilities are in introduction of new and differentiated pharmaceutical formulations. Fully aware of its strength the Company is going ahead with hand holding strategy with Indian and International Pharmaceutical majors. This strategy has paid well in the recent past with introduction of the differentiated Pain management injections with support of an international major pharma company in India. The Company is also finding new avenues in the international market also and the work in this area is in advanced stage.

(e) Risks and concerns. Risks, liabilities and losses are part and parcel of any industry and need to be tackled through well forecasted strategies and actions. To mitigate and avoid risks in the current scenario, the Company is focusing on shifting API to Formulation business and also improving its market access for the existing products.

Besides, the risks in Domestic market there are various risks in the International markets as well, an important one being regulatory risk, Plant inspections, vendor approvals etc.

(f) Internal control systems and their adequacy. :

The Company ensures the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. The statutory auditors while conducting the statutory audit, review and evaluate the internal controls and their observations are discussed with the Audit committee of the Board. Internal Financial Control Audit is also conducted on continuous basis to plug the loop holes in the system, if any. Other statutory requirements especially, in respect of pharmaceutical business are also vigorously followed in order to have better internal controls over the affairs of the Company.

(g) Discussion on financial performance with respect to operational performance.

The operational performance during the year under review was one of the best in recent past. Shift of business focus to Formulation activity has started showing positive operational performance results. The financial performance is getting improved due to better margins, control over cost as well as reduction of interest cost in view of repayment of term loan installments and Public Deposits. Your Company has wiped off past losses and expects to continue with good operational results in the years to come.

(h) Material developments in Human Resources / Industrial Relations front, including number of people employed: The core of the Human Resource philosophy at Themis is empowering human resources towards achievement of company aspirations. Your Company has a diverse mix of youth and experience which nurtures the business. As on March 31, 2017 the total employee strength was 1273. Our objective to build organizational capability through skill development across levels ensures that we invest in training and enhancing people skills in line with the dynamic business needs. The Companys industrial relations continued to be harmonious during the year under review. In our endeavour to be employee centric, your Company revamped existing HR policies to be more people friendly and offered them a better work life balance. We continued to rely on technology to reach out to employees and improve efficiencies by automating policies and work flows. During the current year, HR would focus on enabling change to deliver the desired business outcomes. The objective is to create an HR organisation focusing on responding to business challenges of tomorrow.

7. ACKNOWLEDGEMENTS AND APPRECIATION:

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/associates, collaborators, employees, financial institutions and Central and State Governments for their consistent support and encouragement to the Company.

For and on behalf of the Board of Directors

SD/- SD/-
Dr. Sachin D. Patel Mr. H. Dhanrajgir
Managing Director & CEO Independent Director
DIN - 00033353 DIN - 00004006

Place: Mumbai

Dated: 10th May, 2017