Venus Remedies Ltd Management Discussions.

About our ecosystem

Global economy: Despite a steep decline in early 2020, the world economy rode a rebound that began and remains on track to surpass pre-pandemic GDP levels by the end of this year—setting the stage for strong postrecovery growth in 2021. For CY20 however, the global economy slipped with the GDP having contracted by 3.3% over the CY19.

International trade, industrial production and investments rebounded, and business confidence improved during the second half of 2020. However, emerging market economies and developing countries have been hit harder and are expected to suffer significant medium-term losses.

Prospects for the global economy have improved considerably, but to a different extent across economies.

The world economy looks brightened, as the global GDP is projected to grow at 6% in 2021 and 4% in 2022 as consumption, investment and trade are expected to gradually improve. But the recovery is likely to remain uneven and dependent on the effectiveness of vaccination programmes and public health policies adopted by different nations.

Though economies around the world suffered from the impact of Covid-19, some continue to do so even now, but global pharmaceutical sector came under the spotlight as the frontline warrior in the worlds fight against Covid-19. According to the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) the pharma industry made a significant contribution to economies across geographies.

Indian economy: Indias economic performance largely mirrored the global economy.

A sharp dip in the first half followed by an egually sharp recovery in the second.

Although India reported a contraction in its GDP by 7.3% in FY21, the heartening feature was the recovery - Indias GDP grew by 0.4% and 1.6% in the third and fourth guarterof FY21 respectively.

The agricultural sector reported healthy growth owing to good harvest, although it was a tad lower than the previous fiscal - it grew by 3% in FY21 against 4.3% in FY20.This was primarily responsible to keeping the rural economy alive. Industry and services were estimated to contract by 9.6% and 8.8% respectively during FY21

Industrial activity, which took a beating in the first half of

FY21 owing to the nationwide lockdown and the fear of the pandemic, registered a smart recovery with the phased unlocking.The Nikkei Manufacturing Purchasing Managers Index, compiled by IFIS Markit remained above the 50 mark for eight straight months ending March 2021 (it was at 55.4 in March 2021). A figure above 50 indicates expansion, while sub-50 signals contraction.

With the pick-up in manufacturing activity, GST collections crossed the Rs 1 lakh crore mark during the last five months of FY21. Net indirect tax collection in FY21 grew toRs 10.71 trillion, exceeding the previous year benchmark at Rs 9.54 trillion.

As India looked to accelerate its economic resurgence, the second wave of the pandemic hit India - this time urban and rural areas were severely

impacted. But a strong-willed nation flattened the pandemic curve in a shorter time period, albeit with considerable loss of lives and livelihoods.

With the phased unlocking by the various state governments, economic activity has resumed once again. According to a report by rating agency ICRA, the economic recovery has gained momentum after lifting of the localised lockdowns imposed in the aftermath of the second wave, but remains incomplete.

While economic growth could get impacted in the first guarter of FY22, economic opinion makers are optimistic of a double digit growth. The RBI has projected Indias FY22 gross domestic product (GDP) forecast at 10.5%.

About our business space

Global pharmaceutical sector:

The global formulation market was estimated to be around US$1,137 billion in 2020 and is expected to grow at a CAGR (2020-2026) of 3.4% to reach to about US$ 1,386 billion by 2026.This growth is largely attributed to the launch of novel therapies, expansion of existing therapies, growing demand for generic medicines, biologies and personalised medicines as well as accelerated demand for effective treatments and drugs.

Therapy trends: The global pharmaceutical industry is rapidly transforming across all value chains from manufacturers, providers and patients.

The global pharmaceutical market is segmented by two types: traditional pharmaceutical and specialty pharmaceutical.

While traditional pharmaceutical dominates the global pharma space currently, the specialty segment is gaining share owing to the increasing incidence of chronic and life-threatening conditions. Currently, about 36% of total pharmaceutical spending in the commercial market is specialty medications.

According to IMS Institute for Healthcare Informatics, about 42% of drugs in the late stage of the FDA approval process are specialty medications. Global Specialty Pharmaceuticals Market is expected to be US$568 billion by 2026.

North America dominates the global specialty pharmaceuticals market owing to heavy investments in R&D initiatives, technological expansions and integration of pioneering technologies, presence of major players and high occurrence of lifestyle- related diseases. Asia-Pacific market is expected to witness a strong growth rate majorly due to high population growth rate, growing prevalence of chronic diseases and rising adoption of advanced technologies.

As per World Health Organisation (WHO), chronic disease risks and deaths are increasing rapidly, especially in pharmerging countries. According to WHO, almost 23.6 million people will die from cardiovascular diseases, mainly from heart disease and stroke by 2030.

Indian pharmaceutical sector:

The Indian pharma industry has achieved significant growth in both domestic and global markets during the past five decades. From contributing just 5% of the medicine consumption in 1969 (95% share with the global pharma), the share of "Made in India" medicines in Indian pharma market is now a robust 80% in 2020. More importantly, during the same period, the country has also established leading position in the global generic pharmaceuticals landscape and is now known as the "Pharmacy of the World".

The pharma industry in India contributes more than 20% by volume of the global generics market and 62% of the global demand for vaccines. Popularly called the"archetype of affordable healthcare,"the industry has

significantly contributed towards improving public health outcome, both in India and across the globe.

Pharma sector & economy:

The pharma sector has been contributing significantly to Indias economic growth as one of the top 10 sectors in reducing trade deficit and attracting the Foreign Direct Investment (FDI).The drugs and pharmaceuticals sector attracted cumulative FDI inflow worth US$16.54 billion between April 2000 and June 2020. It is of prime importance also due to the trade surplus it has been generating with pharmaceuticals exports accounting for US$20.7 billion and imports at US$2.31 billion in FY20. The industry employs over 2.7 million people either directly or indirectly, and ranks third in terms of volume and 14th in terms of value globally.

Pharma & its global connect: Indian pharma exports reached US$20.7 billion in FY20 with year-on- year growth of 8.4% (exports size was US$19.1 billion in 2019). They have grown at a CAG R of 6.2% between 2015 and 2020.

This was largely driven by exports of generics drugs to >200 countries (including both developed and developing markets). India is the source of 60,000 generic brands across 60 therapeutic categories.The country accounts for 40% of the generics demand in the U1 and -25% of all medicines in the UK.

Indian pharma manufacturers export nearly half of the pharma production, both in terms of volume and value, to the US, UK, South Africa, Russic and other countries.

However, there remains a significant opportunity, largely untapped across Japan, China, Australia,

ASEAN countries, Middle East region, Latin Americas and other African countries. Some of the factors impacting lower penetration of these regions are —relatively slower paced entry strategy, long negotiations cycle, regulations emphasising on local manufacturing, volatility in the global prices, patent s recognitions, disharmony in drug registration process, lack of guidelines on regulation of bio-similars, bioeguivalence studies and delayed market approvals.

Further in the vaccine market,

 1 India exports vaccines to >150 countries. It contributes 40%-70% of the World Health Organisations (WHOs) demand for Diphtheria, Pertussis and Tetanus (DPT) and Bacillus Calmette-Guerin (BCG) vaccines, and 90% of the WHO demand for the measles vaccine.

Export performance in FY21:

Indias pharmaceutical exports grew 18.7% to US$24.44 billion in the financial year ended March 31, spurred by strong demand for the countrys generic drugs.The industry posted its best export performance in value terms despite the global pharma market shrinking by 1-2% in 2020.This was due to a surge in demand for made-in-lndia generics, owing to their guality and affordability.

Pharma & lndia:The domestic pharmaceutical market size has reached - US$42 billion in 2021.The anti-infective segment is the leading indication with -14% market share of the total domestic pharma business and continues to witness double digit growth. Other segments that are growing in double digit include diabetes, cardiovascular disease and respiratory.

Going forward: According to the Indian Economic Survey 2021, the domestic market is expected to grow 3x in the next decade. Indias domestic pharmaceutical market is estimated at US$ 42 billion in 2021 and likely to reach US$

65 billion by 2024 and further expand to reach ~US$ 120-130 billion by 2030.

Government thrust on pharma: Although India is recognised as the Pharmacy of the World, it features among those countries with the lowest public healthcare budget in the world.

Indias total healthcare spending (out-of-pocket and public), at 3.6% of GDP, as per OECD, is way lower than that of other countries. The average for OECD countries in 2018 was 8.8% of GDP. Developed nations—the US (16.9%), Germany (11.2%), France (11.2%) and Japan (10.9%)—spend even more. India spends the least among BRICS countries: Brazil spends the most (9.2%), followed by South Africa (8.1%), Russia (5.3%), China (5%). With public healthcare infrastructure stretched, out-of-pocket expenditure in urban centres is high in India.The Centre spends less as public health and sanitation are on the State list.

The Covid-19 pandemic crisis is a reminder of the importance of investing in the healthcare sector for any country. To provide the much needed boost, the Government has taken important steps. They include:

1) Announced a Production linked incentive (PLI) scheme for the pharma industry worth Rs 15,000 crore (US$2.04 billion) to promote domestic manufacturing of critical key starting materials (KSM), drug intermediates, and active pharmaceutical ingredients (APIs) making India a leading supplier.The Government has approved a total of 33 applications with a committed investment of Rs 5,082.65 crore under a separate PLI scheme for APIs

2) Increased thrust on rural health programmes, lifesaving drugs and preventive vaccines

3) Plan for a mega bulk drug parks to reduce raw material dependence on imports

4) The Union Budget 2021- 22 saw an unprecedented increase in allocation for health sector like:

• Allocated Rs 64,180crore for the Atmanirbhar Swasth Bharat Yojana for development of primary, secondary, and tertiary healthcare over a period of six years

• Announced a Rs 2,23,846 crore budget outlay for health and well-being for FY 2022, an increase of 137% over previous year

• Provided for Rs 35,000 crore towards Covid-19 vaccines and national rollout of pneumococcal vaccines to help save over 50,000 lives annually

• Budgeted Rs 6,429 crore for the health insurance scheme, Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana

About our business

Established in 1989 in Panchkula, India, Venus Remedies Limited is a research driven Indian pharmaceutical company with a presence in over 75 countries.

The Companys remedydefining formulations addressing diverse therapeutic areas are manufactured at its units in Panchkula and Baddi (in India).

The Companys units are certified with ISO 9001,

ISO 14001, OHSAS 18001 accreditations and also approved by the European GMP, Australian GMP and other leading global regulatory authorities looking into product and guality excellence standards.

The Companys subsidiary, Venus Pharma GmbH, based out of Werne, Germany, deals in Licensing, Packaging, Product Testing, Warehousing and Logistics.

Research & Development

Lor every pharmaceutical company R&D is its backbone. Because in pharma, you cannot copy a product. It has to be different, from what is already in the market, even if the difference is only a marginal. And this can be done only in the R&D lab.

What makes R&D increasingly challenging, is that the pharmaceutical industry work on Tomorrow- continuing to work on products that could be launched some anywhere between 18-60 month in the future.

R&D has been its critical strength - successfully developing niche molecules in the Anti-Microbial resistance space which has brought it under the global spotlight.

Venus Medicine Research Centre (VMRC), the R&D arm of Venus Remedies is a fully eguipped interdisciplinary drug discovery and development centre located a~ Baddi, Himachal Pradesh.

Approved by the Department of Scientific and Industrial Research (DSIR), the VMRC team comprising of research experts remain focused on developing solutions that address antimicrobial resistance, target delivery anticancer drugs and solutions for unmet medical needs in pain management.

FY21: IN RETROSPECT

Product launches

Despite the challenges that prevailed in LY21 owing to the pandemic, the R&D team successfully scaled up and launched three products which are expected to drive business growth in the current year.

Velimixin: This proprietary product under patent protection, recently introduced in the Indian market is primarily a Supra Molecular Cationic (SMC) complex of Polymyxin B, developed by Venus Medicine Research Centre with the aim of reducing drug-induced kidney injury generally known to be associated with both the clinically used generic Polymyxins, such as Polymyxin B and Polymyxin E (Colistin). The molecule is considered to be another potential blockbuster from our critical care portfolio and expected to get worldwide attention in the niche hospital care segment, which is in dire need of safe and effective newer antibiotic solutions.

Ronem Forte: Ronem Forte is high dose (2 gram) formulation of Meropenem, an antibiotic which remain the last resort therapy being extensively used for treatment of critically ill hospitalised patients, primarily due to its wide coverage of hospital pathogens and a low toxicity profile. However, with rising antimicrobial resistance, recent international guidelines recommend high dose of meropenem treatment particularly for critically ill hospitalised patients with resistant infections undergoing treatment of life threatening infections such as, Sepsis or Septic shock etc. VRL is the first pharmaceutical company to get DCGI approval for Meropenem 2 gram formulation marketing in India and is expecting to capitalise on this upcoming new category.

Cloti-Xa: Cloti-Xa containing enoxaparin sodium is another new introduction in our portfolio in the fast-growing low molecular weight heparin

market in India. Cloti-Xa offers an added advantage of NovaGuard SA Pro safety system, which is a single-use accessory for prefilled ISO standard 1 mL long staked- needle syringes. Cloti-Xa is expected to provide patients and healthcare providers with an additional advantage of safety from accidental needle stick injuries, which could lead to the spread of infections like HIV, Hepatitis B and C. Enoxaparin use has increased significantly in ICUs after it has been found useful in reducing hospitalisation and mortality in Covid-19 patients, it is expected to be a high yielding addition to VRL portfolio.

Technology absorption

VMRC has always remained at the cutting-edge of technology.This passion widens its capability matrix enabling it to develop complex product that help Venus to stand out of the competitive clutter. During FY21, the unit added four new technologies.

Hollow Fibre:This technology offers higher levels of reproducible control of both concentration and time of drug exposure in complex growth, infection, treatment, and sampling regimens.The Hollow Fiber Infection Model can provide useful data for antibiotic development and dosing.

Red device for rapid equilibrium dialysis:The RED Device has been used extensively for plasma protein binding assays.

LCMS-MS: LC-MS/MS combines the physical separation capabilities of liguid chromatography with the mass analysis capabilities of mass spectrometry (MS) in selective way. It has both gualitative and guantitative application in chemistry.

Atomic absorption spectrometry (AAS): AAS used to detects elements in either liguid or solid samples through the application of characteristic wavelengths of electromagnetic radiation from a light source.

Partnerships & alliances

VMRC is a learning unit, always seeking avenues to gather knowledge that can help them in making their research more incisive and better their capability in developing relevant products for mankind and Venus. In keeping with this ethos, the unit partnered with multiple research institution namely SEDA, UK, NORTIS, US,SINTEF, Norway and Newcells Biotech, UK for various purposes ranging from consultancy to joint experimentation and technology purchase.The benefit of these collaborations is expected to flow through over the coming years.

Filings

The VMRC team continued to build on its intellectual capital. It filed about 136 new dossiers across the globe - upon approval of a dossier, Venus will be able to market its product in that geography. During the year, the Company received Market Authorisation for 133 filings -Venus will launch products relevant to these filing in the current year, which should help it to sustain its growth momentum.

Product pipeline

VMRC is working on a pipeline of 13 products which are under various stages of the development cycle addressing multiple therapeutic areas namely Anti-infectives, Oncology, Herbal, Heamostatic and Anti-coagulant. Some of these products will be launched in the next 18-24 months.

BLUEPRINT FOR FY22

The VMRC team has drawn a comprehensive blueprint for the current year. Key elements of this strategy paper includes

• Working on STN and Renal Guard technology-based products

• Clotixa Clinical Trials

• Launch ofR3SET

Plant

operations

Venus Remedies has three manufacturing facilities at Panchkula and Baddi in India and Werne in Germany that manufacture products catering to critical care segments such as Anticancer, Anti-infective, Neurology, Skin and Wound Care and Pain Management

Its facilities are certified by ISO 9001, ISO 14001 and OHSAS18001, European CMP and 14 other international regulatory authorities which make its products acceptable across the globe.

The Company ranks 10th among global dosage injectable manufacturers which cater to high-growth therapeutic segments.

FY21: IN RETROSPECT

Covid-19 management

The pandemic and the nationwide lockdown to contain its spread impacted the business as plant operations remained shut fora month.On resumption of business operations, the Company focused on ensuring that Government mandated protocols were strictly followed. For this, the Company initiated the following measures

• Provided transport to employees who were called to work, made healthy food arrangements and ensured that they maintained social distancing at all times

• Temperature check was put in place at all entrances, sanitising the workplace at periodic intervals every day was institutionalised

• Freguent temperature and basic parameter checks for all working employees was undertaken

• Onboarded a paramedic to conduct the health check of every single person in the workplace twice a day; arrangements were also made for an on-call doctor to monitor the health of employees

• Organised accommodation for the staff, close to the place of work to avoid the need to go back home

A Covid committee was created to provide support to families of those staying in the Company, including making arrangements for basic amenities like gas, vegetables etc for them or getting family members checked by doctors whenever reguired.

Cost management

In the aftermath of the first wave of the pandemic and the resultant business loss, the Company sharpened its focus on optimising costs Towards this end, the Company implemented important measures:

• Installed a New Automatic Plunger machine in one unit to optimise manpower reguirement

• Installed a new high capacity lyophiliser in one unit

• Changed the pack sizes for productivity enhancement

• Changed the artwork for ease in printing - it avoided duplication of work

• Increased guarantine storage capacity increased (inventory Management) for semi-finished goods; also created sheds for storage of goods received in odd hours

• Replaced DHS on oncology lyo line with tunnel to meet increasing demand with fulfillment of cGMP reguirements

Power and utility

The Company undertook necessary steps to reduce power and utility which help them a good amount of savings in energy segment.

• Shifted retro fitting belt pulley-based blower with efficient power saving blower of AH U motors to high energy saving ones

• Worked on power saving & replace the DX based unit with chilled water coil

Productivity improvement

The Company implemented important initiatives to boost productivity. It included increasing asset utilisation, increase in batch size, reduction/aIteration in process chemistry and introducing automation solutions. In doing so, the Company increased the production of key products.

Packaging

The company changed the packaging of general products in government supplies from N1 to N2/N5, which help us in increase of Productivity with less Manpower.

Capital investment

The Company invested in sophisticated eguipment improve its productivity and product guality.

• Installed a New Chiller of 253 TR for maintaining the temp & RH in the production area - it helped in maintaining an ambient working environment which reducing electricity consumption

• Installed a new lyo, which helped to increase capacity

• Invested in fabricating a new shed augmenting storage capacity which facilitated ease in classifying the material as per reguirement

BLUEPRINT FOR FY22

• Replace low margin products with high value products

• Automation of Spine system and reduction of Manual procedures

• Harmonisation of Packaging sizes

• Aggressively encourage skill development on the shop floor

Business development

Venus, over its decades-long business journey, has carefully established a wide global footprint across more than 70 nations which includes its home country India.

Its niche products which include injectables for mission-critical segments like antimicrobial resistance and anticancer have put a stamp of respectability on the Company and its products across its marketing footprint.

The Company has adopted a dual strategy. For the domestic market, the field force primarily focuses on institutional business from hospitals, government agencies and other institutions. For the international business, the Company has forged strategic partnerships with some of the global margues in the domain to sale its products in its identified markets.

INTERNATIONAL

MARKETING

The Companys strategic alliances with leading pharma marketing company has enabled it to establish a strong presence in more than 75 nations globally, majority of which are developing nations. The Company has 11 marketing offices outside India to cater to the overseas business reguirements. Exports account for more than 75% of the Companys Total Revenue.

Growth drivers in the International market

• A strong presence in certain important products namely Meropenem, Imipenem Cilastatin, Enoxaparin, Vancomycin, Pipracilin,Tazobactum

• A strong position in certain fast growing markets namely select African nations, Far East Asia and some European nations

FY21: Key business achievements

Venus, despite the challenges owing to the pandemic and the resultant restrictions, executed large export orders.

In addition, the Company won some institutional tenders in Saudi Arabia, Peru, Mexico, among other nations. It was also able to increase private market business.

The Company achieved healthy revenue growth in

existing countries like Mexico, Namibia, Elonduras, Swaziland, Peru, Jamaica, Malaysia, Ethiopia.

Venus established a footprint in new geographies namely Mozambigue, Uzbekistan, Singapore, South Africa,

Ghana, Libya, Kazakhstan, Maldives, Chile, Irag, Bahamas. The Company forged four new marketing alliance in FY21 - these factors are expected to create growth opportunities in FY22.

Going forward

Venus has drawn a blueprint for growing its international business which comprises of

• Sharpen focus on tender participation

• Increasing customer base.

• Opening up more territories.

• Aggressive promotional activities

DOMESTIC

MARKETING

Patient and persistent efforts by the domestic marketing team over the years has helped Venus established an entrenched presence in the domestic market. The Companys network comprises of 1,500 stockists and 50,000 retail outlets.The marketing team has, through its consistent efforts, established considerable brand recall among the doctor and patient community. In doing so, revenue from the domestic market has increased steadily over the years.

Growth drivers in the Domestic market

• Efficient manpower allocation and effective utilisation of human resources

• Realignment of business development strategies in keeping with dynamic marketplace changes

• Aggressive brand promotion to strengthen awareness of products and brands

FY21: Key business achievements

Venus continued to gain ground in the domestic marketplace with important brands namely Supime,

Clindol, Pisa, Ronem (Therapy: Antibiotics) and Megaparin, Coguperin (Therapy: Anti- Coagulants) making healthy contributions to the Company growth.

During the year, the Company successfully registered itself with the Indian Railways.

This breakthrough allows it to supply its products to all the 16 zones of the Indian Railways - it should generate heartening volumes over the coming years.

Additionally, Venus widened its product basket - it launched : Vancoplus Combi, Liracetam,

Mucomelt LS.Ventaful, Ventaful-OD,Ventaful-A, Nervolize-MN, Ivermectin, Ceeven, Sterloc, Swachh Guard.These products gained healthy traction in FY21 and are expected to generate higher volumes in the current year.

Further, the Company has participated in a number of tenders floated by government agencies and institutions.

Success in any of these tenders will create interesting growth opportunities.

Going forward

In the current year, the domestic team is planning to launch a new Consumer Health Division with a few products like Sterloc, Reset Emulsion, Reset Gel, Reset Spray, Reset Tab.

Information Technology

The Covid-19 pandemic brought a paradigm shift in the working style of all companies. Almost overnight, there was a transition to the remote format of working.

And "Work From Flome (WFH)" became mainstream.

With a pharmaceutical company that functions in manufacturing, Venus was swift in its adoption of technology, starting with virtual workplace and video interactions. Especially during the first few months of a nationwide lockdown, the entire company operated remotely.

To ensure seamless and secure connectivity between the employees in India and in offices across the globe, and to make employees accustomed to the new format of working, the Companys hardware and software infrastructure were upgraded. Venus renewed its cabling network and set up the fiber optics network through manageable switches and Cisco routers across all units. In addition, the data transmission speeds were increased five folds to ensure seamless connectivity.

For secure data transmission, the Company installed Palo-Alto firewalls across its units, with policies in place to monitor network traffic and ensure data safety. On the software front, Venus implemented Microsoft 365 company-wide, allowing data management on the cloud and centralised chat functionality for the office and field force through Microsoft Teams.

An integrated ecosystem of apps brought by Microsoft allowed the Company to collaborate and stay informed regardless of their physical location. For users working remotely, the Company also set up Virtual Private Networks (VPNs) to connect them to the Company LAN and access their files remotely.

At the heig ht of the pa ndemic, the Company realised that in addition to an infrastructure upgrade, there was a need for an experience upgrade for its customers and stakeholders.

Hence, Venus started the "Customer Delight Online" project with the vision to provide a delightful customer experience for its customers in India and elsewhere abroad. Under that direction, the structure was laid out for online ordering, order tracking, payment reconciliation, mobile interactions, live chat support, and other suites of products, exclusively for the customers ofVenus Remedies Limited.

For centralised monitoring, Tableau was more deeply integrated with the Companys SpineBMS ERP, ensuring the inventory, finances, and workforce were optimised and efficient And, to leverage the potential of the digital, the Company formally constituted the Digital and Social Media division, with the vision to identify the strength of Indian research and skilled talent in Venus.

In FY 21, Venus invested close to 1% of its turnover in IT spending, and it plans to increase its investment for the next financial year substantially. Venus is looking forward to exciting projects related to the technological setup as the Company launches its Consumer Healthcare division (CHD) next year. CHD would be an online ecosystem and data-driven personalisation for its end consumers.

For the future of Customer Delight, the Company plans to onboard the Salesforce CRM. And, for efficient delivery, the Company plans to set up Venus Fulfilment Centers (VFC). Venus is optimistic about its progress with the adoption of bleeding-edge technology in its research, manufacturing processes, and communication infrastructure - striving to become technology-first in the pharmaceutical sector.

As the Company proceeds into the next financial year, it would continue to work towards its vision of augmenting human skill through technology, ready for the fourth industrial revolution.

Intellectual capital

FY21 presented the world with additional responsibilities and unforeseen considerations. With the first and second waves of the pandemic, the healthcare and pharmaceutical sectors strived to keep up with the need of the hour - providing medication to the ailing fellow countrymen. They assumed the role of frontline warriors against an extremely potent, and fatal yet invisible enemy.

Venus was an active participant in this engagement. At the onset of the Covid-19 pandemic, the organisation adhered to the Central and State Government guidelines. Taking all points into consideration, the company drafted its Standard Operating Procedure (SOP) listing the Covid-19 appropriate protocols.These included complete sanitisation of the place, use of face masks by the staff and visitors, provision of reguired training to the frontline workforce, and maintenance of proper social distancing.

Additionally, the Company made provisions for Rapid

Antigen Testing of employees, checking RTPCR reports for visitors or employees returning from leaves, disinfectant dispensers at entry points, thermal scanning for body temperatures, and vaccination camps inside the premises.

\/enus, to facilitate business operations, adopted the Work from Home policy for its employees, encouraged virtual meetings with fellow staff or clients. Remaining cognizant of mental pressure of working from home and being locked indoors, the Company undertook great efforts, through interesting engagement initiatives, to keep its employees boosted and motivated.

With the lockdown restrictions in place and scarcity of active resources, the HR acguisition division took initiatives to maintain employee strength. This helped Venus to keep its total head count to 837. While adding recruits, Venus also witnessed a declining attrition rate from 2.8% in 2018 to 1.9% in 2020.

The facilitation of work from home during the pandemic, timely remuneration, growth & learning opportunities, and reguisite health & safety measures were the chief factors encouraging the lasting association of employees with the compa ny.

The challenges posed by the pandemic directed Venus to focus its efforts on building a stronger foundation for its employees. The Skill Development division of the organisation took initiatives to provide composure and intellectual growth to the employees. Starting from self-awareness, the division covered the aspects of empathy and user interaction by targeting communication. Employees were given a thrust of positivity with regular blogs and self-improvement tips. Internal trainings were conducted that focused on five elements of personal transformation, i.e., Intelligence Quotient, Emotional Quotient, Social Quotient, Image Quotient, and Spiritual Quotient.

An "English Vinglish Club" was formed to help employees gain command and confidence in the language. TheVenusians also benefited from various self-awareness and meditation courses.The collaboration with Tenet Health Edutech Pvt. Ltd. provisioned the Post Graduate Certificate Program in Drug Safety and Medical Review for Physicians. Faculty from Confederation of Indian Industry (CM) obliged to speak about Supply Chain Optimisation Strategies and CycleTime & Manpower Productivity Management in Manufacturing with the Venusians.

Along with the intellectual development of its employees, Venus took initiatives for the financial and administrative assistance of the employees and their families during Covid-19. Considering every Venusian as a family member, the company made sure that every employee remains physically, emotionally, and financially eguipped to fulfill the expectations of the healthcare and pharmaceutical industry.

Safety, Health & Environment

Venus believes in operating sustainably, responsibly and in a way that enables it to create a positive impact for all its two important stakeholders - Employees & the Earth.

The Company takes utmost care to maintain health, safety. This was aptly demonstrated in the extraordinary times faced by humanity across the world.

Asa responsible corporate, Venus continues to be mindful of not increasing its burden on the Earth even as it aspires to move to a higher orbit in term of growth and profitability.

Safety

Venus believes thata safe and healthy workplace not only protects employees from injury and illness, it elevates the employee morale.

Venus Remedies is certified under the OEISAS standards and its safety policies for its employees are structured in sync.

The Company continued to introduce small yet relevant automation solutions in labour-centric processes with the objective reducing operator fatigue.

It introduced globally- accepted tools namely 5S and Lean management across the organisation. Although introduced recently, these practices have helped in improving safety standard within the organisation.

In recent year, the Company made significant investments in raising the safety standards for people working at its laboratories and in other sections where use of various chemicals pose a threat to their health. The organisation hosted training sessions, seminars and workshops to educate its people on various safety parameters.

The Company made it mandatory for every employee to undertake 20 mandays of training in the year on various safety aspects.

Health

Venus works towards ensuring health and safety of its employees, promoting access to healthcare, and doing all thats possible to touch the lives of people.

The Company runs a campaigr called, PLEA (Preserving Life of Existing Antibiotics), as part of its commitment to antibiotic stewardship. PLEA volunteers reach out to more than 50,000 healthcare professionals in India and spread awareness on the judicious use of antibiotics and on maintaining a sanitary hospital ecology. PLEAs social media campaigns collectively reached out to people globally.

FY21, was critical from the health perspective owing to the pandemic and the nationwide lockdowns.The Compan> took special measures to secure the physical health and mental wellbeing of its people and their families (details of which are mentioned in plant operations section).

As part of the its regular health program, the Company undertakes health check-ups of all its employees during the year. To protect its people from the virus, the Company organised the RTPCR test for employees who showcased some symptoms. It also organised vaccination camps for its employees - ensuring that they remain protected from the severity of the virus.

Environment

At Venus, we respect the environment as an important stakeholder in our progress.

As such, we care for the environment by adopting technologies and processes that utilise resources efficiently. We complement that by recycling of waste in everything we undertake.

We aim to go a step higher. Through our systematic and process-oriented approach, reinforced by the spirit of entrepreneurship, we continually endeavour to make a positive impact to the environment where we operate.

The Company lined up a host of initiatives for cleaning validation, spillage control and reduced rejection rate.

It also took steps on water recycling in line with the governments water resource management norms. It reduced consumption of fresh water in purposes other than drinking. Process water is treated through its ETP/STP plant which is then used for gardening purpose.

The Company also uses condensate of WFI plant as feed water for its boiler - optimising the consumption of fresh water.

On the energy front, the Company replaced conventional lights, Halogen lights with LED lamps. It monitored and optimised the running hours of all electrical instruments running hours as per reguirement. Further, the use of the Air Conditioning systems and lights was optimised to reduce energy consumption without compromising on the working environment.

The Company replaced the ordinary motor blower with energy efficient EC blowers for all the facilities. Additionally, it replaced all pumps motors with IE4 energy saving motors. These measures have made a significant contribution in optimising energy consumption.

The Company introduced a host of measures towards emission control at boilers to cut down on air pollution and noise pollution. The Company has put in place wet scrubbers to minimise air pollution through its boiler. Also, the HEPA filter in the Vacuum cleaner assists in reducing air pollution.The Company has put in place a canopy type DC set, which eliminates noise pollution - in its otherwise noiseless plant operations.

Venus is committed towards the upkeep of ecological balance by extending the green cover, keeping the surroundings clean and managing wastes. Wide stretches of land within its manufacturing facilities are home to many shrubs, herbs and decorative plants. It also created an herbarium at its Baddi unit comprising medicinal plants. Venus also undertook tree plantations drive.

Analysis of Financial Statements

A demanding fiscal drew out the best from a passionate anc charged team that fought its way to deliver stellar results.

Revenue from operations increased from Rs 33,933.43 lakh in FY20 to Rs 54,812.35 lakh in FY21 .This jump was contributed by growing domestic sales and increasing exports.

In the domestic turf, growing traction for its medication used in Covid-19 treatment at hospitals made a healthy contribution to the domestic sales. Growth in exports was owing to increased sale of Meropenem and large institutional orders from pharmerging markets.

Cost of material consumed increased owing to increased volumes, steep hike in prices of raw material together with an increase in logistics cost owing to pandemic related disruptions. For similar reasons the selling expenses also increased in FY21 over the previous year.

Aligned with the revenue growth, EBITDA increased fron Rs 4612.63 lakh in FY20 to Rs 7340.68 lakh in FY21.

The finance cost stood at Rs 1,301.93 lakh in FY21 against Rs 1,333.74 lakh in FY20. This cost is expected to drop significantly in FY22 as the Company has repaid all its secured debt towards the close of FY21.

The Company turned around - it reported a Net Profit of Rs 6,176.54 lakh in FY21 against a Net Loss of Rs 999.93 lakh in FY20.The Earnings per share stood at Rs 50.04 in FY21 against Rs (8.10) in FY20.

Plough back of business surplus increased the Companys Networth from Rs 32,337.01 lakh as on March 31.2020 to Rs 40,028.37 as on March 31,2021 even as eguity capital at Rs 1,234.20 lakh remained unchanged over the previous year balance.

Secured borrowing have dropped significantly as the Company prudently deployed cash from operations to reduce its debt burden.

Current assets declined from Rs 29,400.42 lakh as on March 31.2020 toRs 23,159.52 lakh as on March 31,2021.This drop was primarily on account of sale of its one of brands to the tune ofRs 5,200 lakh.

Current liabilities also dropped from Rs 22,457.91 lakh as on March 31,2020 to Rs 9,744.51 lakh as on March 31.2021 - due to a reduction in working capital loans and a long-term loans. As such the current ratio improved from 1.32 as on March 31,2020 to 2.38 as on March 31,2021.

Business liquidity increased significantly in FY21. Net cash flow from operating activities increased from Rs 7,760.43 lakh in FY20 to Rs 13,261.44 lakh in FY21. Moreover, the Company had a cash and bank balance of Rs 2,897.92 lakh as on March 31,2021 againstRs 212.50 lakh as on March 31,2020.

Internal Control & its adequacy

Venus maintains a system of well-established policies and procedures for internal control of operations and activities. It continuously strives to integrate the entire organisation - from strategic support functions like finance, human resource and regulatory affairs to core operations like research, manufacturing and supply chain management.

The internal audit function is further strengthened in consultation with statutory auditors for monitoring statutory and operational issues.The Company has appointed Independent agencies as internal auditors. The prime objective of this audit is to test the adequacy and effectiveness of all internal control systems and suggest improvements. Significant issues are brought to the attention of the audit committee for periodical review.

Significant changes i.e. change of 25% or more in the key financial ratios

In accordance with the amendments notified by

SEBI in Regulation 17 of the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015 on 9th May, 2018, the details of significant changes i.e. change of 25% or more in the key financial ratios as compared to the immediately previous financial year along with detailed explanations are reported here under:

DebtorTurnover Ratio 17.11 11.13 5.98 Increase in sales
Inventory Turnover ratio 4.57 2.42 2.15 Decrease in inventory and increase in sales
Interest Coverage ratio 2.93 1.06 1.87 Decrease in interest liability
Current Ratio 2.38 1.32 1.06 Decrease in liability
Debt Equity Ratio 0.12 0.42 (0.30) Decrease in loans
Operating Profit margin% 6.96 4.13 2.83 Increase in sales margin
Net Profit Margin % 11.27 (2.93) 14.20 Increase in sales margin
Return on Net Worth % 15.43 (3.09) 18.52 Increase in sales margin

Managing business uncertainties

Uncertainties refer to risks in business parlance.The risk management framework is an integral part of the business model at the Company and focuses on making the organisation stronger that yields profitable growth. It is devised to proactively predict, identify and mitigate the existing and emerging risks.

Growth risk: A robust pipeline of relevant products is key to sustaining success.

Minimising the risk: The Company has created multiple growth levers which promise healthy momentum over the coming years

• New products launched in FY21 which will continue to gain traction in the current year

• Market authorisations received in FY21 which will start yielding results from FY22

• A robust product pipeline (at various stages of development and approval) which will sustain growth over the medium-term.

Funding risk: Financing future business growth could be an issue.

Minimising the risk: Having reduced their debt burden significantly in FY21, the Company can leverage its financial stability to garner adeguate low-cost funds if reguired. For day-to-day business operations the Company has a comfortable cash balance as on March 31,2021 that covers up of its fixed expenses. Also expanded business operations generate a health cash flow, part of which can be deployed in capital projects.

MMJ.

Innovation risk: Sustained investments in research is critical for strengthening its innovation capability.

Minimising the risk: R&D has been a key strength for Venus. The success of Elores, a niche molecule developed by the Company, bears testimony to its ability to undertake challenging products.The Company continues to imbibe new technology and strengthen its capabilities to develop niche and relevant products that widen its business horizon.

Uncertainty risk:

Unprecedented challenges such as the pandemic could abruptly stop business progress.

Minimising the risk: Being critical to mankind, the pharmaceutical sector needs to continue business operations against all odds.

The Covid-19 pandemic clearly highlights the statement.

Venus continued business operations through this challenging period even as it strictly adhered to government protocols. It took immense care of its people, who in turn took care of business operations. Having navigated through these difficult roadblock with considerable success, the Company is future-ready for other such uncertainties.

People risk: Venus would reguire skilled people to manage business growth.

Minimising the risk: Venus has focused on nurturing talent through its people-centric policies and practices.This was most aptly demonstrated during the pandemic and lockdown period. The Company continues to upskill its people through engaging training programs. Additionally, it has structured a leadership program for star performers to fast track them into taking higher responsibilities.

Environment risk:

Reducing its burden on the environment is critical for sustaining business operations.

Minimising the risk: Venus respects the environment as an important stakeholder in its progress. As such, it cares for the environment by adopting technologies and processes that utilise resources efficiently. In addition to recycling and reusing water, the Company has also invested in replenishing the water table at its manufacturing facilities. The Company continues to optimise energy consumption by replacing conventional eguipmentand lighting solutions with contemporary variants. Additionally, the Company continues to extend its green cover to maintain ecological balance in the area.

Profitability risk: The

Company needs to maintain a keen eye on optimising its cost sheet.

Minimising the risk: Cost management is a continuous effort at Venus. The Company invests considerable time and effort in optimising costs which include improving man-machine productivity, stringent monitoring of guality across the process, investing in automation solutions and optimising the consumption of utilities. In addition, a determined effort to reduce the external debt has helped in reducing interest cost for the Company. These factors have and will continue to reflect in an improved cost sheet. Making the Company more competitive against peers.

Corporate Social Responsibility

Venus Army is a force of highly dedicated members of the Organization who have pledged to selflessly uphold the Values, Ethics and Culture of the Organization.

The aim of the "VENUS ARMY"to build a battalion of soldiers who really have strong bonds between them & can work together for a specific purpose/cause effectively to meet both external & internal challenges & goals cohesively by converting their words/sayings into action. It also serves as the outpost for our corporate social responsibility activities to name few as follow:

1. Manav Uthaan Yojna:

Under Manav Uthaan Yojana , Venus is contributing financial assistance per month Manna at the Desert Society, a Jaipur-based welfare society and Tek Chand Sud memorial Trust, which is taking care of special children. Further under Griha Lakshmi Yojana, Venus distributes grocery or other household items to its workers on every 10th day of every

2. Social Uthaan Yojna:

Under social Welfare Yojana, the Company organised various festival celebrations which provided a platform to connect its people socially.

3. Environment Uthaan Yojna: Under Environment Uthaan Yojna, Venus is donating 1000Trees every month through Isha Trust - Cauvery Calling thereby donating one tree on behalf of each Venusiansevery month besides other plantation activities are undertaken from time to time on regular basis.