MANAGEMENT DISCUSSION & ANALYSIS

A.INDUSTRY STRUCTURE &DEVELOPMENT :

The Indian pharmaceutical market (IPM) was valued at INR 75,000 crores approximately as at March 2014. The Pharma industry is showing a slow growth rate of 5.2% recorded over the brvious five years. Demographic trends will act as a significant driver of global demand for pharmaceuticals in the next five years: increase in diagnosis and treatment of chronic conditions and an aging population could drive growth in the developed markets, while population growth coupled with improved access to healthcare could drive emerging market growth. Most countries could experience increased pharmaceutical spending per capita by 2018. Global spending growth is expected to stabilize between 4-7% through 2018. Higher spending is expected on specialty medicines over the next five years, particularly in developed markets - about 40% of total global growth will come from these medicines.

There are more than 32000 pharmaceutical companies brsently operating in the Indian market, either as sole manufacturer or as marketers or both, and the number is growing day by day because of the ever growing demand, for medicines to cater to the extreme rural areas of our country.

B.OPPORTUNITIES, THREATS, RISKS &CONCERNS :

India is emerging as a key player in the pharmaceutical industry. The growth of middle class in the country has resulted in fast changing lifestyles in urban and lately in the rural areas. There is now a huge market for lifestyle drugs, which has a very low contribution in the Indian markets. Indian manufacturers are one of the low cost producers of drugs in the world and can produce quality drugs at 40% to 50% of the cost to the rest of the world.

There is opportunity to tap rural market where buying capacity has increased in view of health consciousness. In fact, the company's focus is on rural and semi urban markets as, the multinationals and big Indian brands have occupied maximum space in the urban and metro markets where the volumes are high. Working capital has become a major issue as the Pharmaceutical Industry is working capital intensive and in order to streamline our working, we are in the process of negotiating with Banks for Working Capital Requirements as the Company as of today does not enjoy any Working Capital limits from any financial institution or Banks.

C.PRODUCT WISE PERFORMANCE:

The Company's main product is Formulation Marketing. The Company has drawn up different strategies for Marketing the Products locally and Anti Inflammatory Analgesic & Cold formulations were selected for executing its plans.

The Company has drawn up a strategy to get its products manufactured in various locations & will position itself as a low-cost manufacturer of various high class Finished dosage forms and therapeutic products.

D.COMPANY'S OUTLOOK & CONCERNS:

In line with our stated philosophy and strategy, we will continue to pursue various options to achieve growth. With increase in the cost of raw material, adverse government policies and pricing guidelines, lack of modernized infrastructure and equipment, working capital constraints, inadequate cash flows and above all, huge competition from multinationals and big brands on one side and unorganized Pharma sector on the other side, the company's growth chart is not satisfactory and the management is trying to reduce the cost and focus more on rural market.

E.INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company believes that Internal auditing is a catalyst for improving an organization's governance, risk management and management controls by providing insight and recommendations based on analyses and assessments of data and business processes.

Your Company has adequate internal control systems commensurate with the size of its operations for the purpose of exercising adequate controls on day to day operations of the Company. and internal audit is conducted at regular intervals.

F.FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The Manufacturing Licence of the Company has attained the maturity period and your company had applied for Renewal of its Manufacturing facilities which is pending with the Govt authorities and Stop Production Orders is issued by the concerned authorities hence Product wise income from operations for the financial year 1st April 2014 to 31st March 2015 is also negligible at Rs.9.63 Lakhs.

The details of the financial performance of the Company are comprised in the Balance Sheet, Profit and Loss Account and other financial statements which are annexed hereto along with the Directors and the Auditors Report for the financial year 2014-15.

G.HUMAN RESOURCES:

By virtue of reduction in the operations, the man power requirement has come down There is a conscious effort by the Company to build diversity in the workforce..

Disclaimer

Some of the statements in this Management Discussion & Analysis, describing the Company's objectives, projections, estimates and expectations may be "forward looking statement" within the meaning of applicable laws and regulations. Actual results might differ substantially from those exbrssed or implied. Important developments that could affect the Company's operation including changes in the industry structure, significant changes in political and economic environment in India, tax laws, import duties, litigation and labour relations.