1) Management Discussion and Analysis

Fredun Pharmaceuticals Ltd was established with the primary focus of producing quality drugs at affordable prices. The core business of the Company is exporting formulations as Branded Generics and introducing new formulations to meet the growing requirements of different customers globally. The Company has plans to diversify into neutraceuticals, Dietary Supplements and Veterinary products also.

2) Business Highlights

Fredun Pharmaceuticals Ltd's growth was mainly due to the revenue from exports to African and ASEAN countries. The total year on year growth was 16.90% The Company launched 75 new products and filed 40 new products for registrations and remaining are under process.

The Company has successfully launched a herbal dietary supplement in Africa and envisages imbrssive growth of the same.

Several Veterinary and aqua products registration certificates are obtained and distributors have been appointed to market these products.

3) Business Outlook

The Regulatory norms for approving pharma manufacturing units are getting tougher.

There is intense competition and pricing brssures due to Governments' interventions and promotion of generics. The branded generics account for a fifth of the global market and is expected to nearly double by 2016 with the impending patent expiries in the next 2-3 years. The generic market would reach 30% of the Global Pharmaceutical Market.

The Company expects good growth in the branded generics on a sustainable basis.

The Company has also invested in R & D machineries to build up the capabilities to produce latest generics and enter niche areas where there are good sales potential with relatively limited competition. To increase volumes of the product portfolio, the Company has been systematically investing in its productive infrastructure. It has invested more than Rs. 4 Cr in the last year to increase capacity in existing infrastructure and create new capacities in oral dosage departments.

4) Challenges

The regulatory environment for approving pharmaceutical manufacturer's processes and products are getting tougher. This is a positive development, but it also creates greater challenges for the manufacturer. The market conditions are getting seriously competitive and healthcare costs everywhere continue to rise.

5) Key Growth Segments

Due to Impending patent expiries and a number of litigations, developed markets are expected to register much lower growth and the developing markets are expected to account for a higher growth. The launch of biosimilars at relatively lower cost will be the major boost especially for the Indian Market. It is estimated that the sale of generics will be about US$400 - 430 billion by 2016.

Fredun Pharmaceuticals Ltd's growth was largely driven by new product launches in the ARV drugs segment and Psychotropic products . The Company expects to maintain robust growth due to strong capabilities, efficient processes and systematic investment on productive infrastructure to increase capacity in existing infrastructure for oral dosage formulations.

6) Financials

Revenues increased by 19.39% to • 25.84 Cr in FY 2015.

7) Risk Mitigation at the organizational level

The Company has planned a management level Risk Committee comprising of business segment heads and people from finance, legal, HR and Q.A. The Company will be reviewing the risks and steering the mitigation efforts in line with Company's risk capacity.

8) Human Resource Management at Fredun Pharmaceuticals Ltd

The Company continues to put concerted efforts in recruiting quality people and lowering work stress. Development programs and "Train the Trainer" programs remain the key focus areas for the Company. This will increase the productivity and support the Company's business plan specially in its key Emerging Markets. The Company has a positive Outlook for the next year.