The Members,
Themis Medicare Limited
Your Directors take pleasure in presenting the 53rd Annual
Report along with the Audited Financial Statements for the financial year ended 31st
March, 2023. The Company operates only in one business segment viz.,
"Pharmaceuticals" and this report covers its Pharmaceutical business
performance.
1. FINANCIAL STATEMENTS & RESULTS: a. Financial RESuLTS:
The Company's performance during the year ended 31st March,
2023 as compared to the previous financial year, is summarized below:
Particulars |
31st Mar, 2023 |
31st Mar, 2022 |
Income |
36,582.81 |
40,115.51 |
Less: Expenses |
30,691.95 |
31,721.61 |
Profit/(Loss) before tax |
5,890.86 |
8,393.90 |
Current tax |
1,500.00 |
1,675.00 |
Deferred tax |
61.41 |
563.13 |
Profit after Tax |
4,329.45 |
6,155.77 |
b. Operations:
The Company continues to be engaged in the activities pertaining to
manufacturing of pharmaceutical products, especially in formulation and API activity.
There was no change in nature of the business of the Company, during
the year under review.
During the year under review, the Company had, vide a Special
Resolution passed through Postal Ballot resolved to transfer its Active Pharmaceutical
Ingredients Business to Themis Lifestyle Private Limited, its wholly owned subsidiary
subject to requisite consents, approvals and completion of various formalities.
c. REPORT ON PERFORMANCE OF SuBSIDIARIES, ASSOCIATES AND JOINT VENTuRE
COMPANIES:
As on the last day of the financial year, the Company had two
non-material subsidiaries namely, Artemis Biotech Limited and Themis Lifestyle Private
Limited and two overseas subsidiaries in UK namely, Carpo Medical Limited & Carpo
Investments Ltd.
The performance and financial position of each of the subsidiaries and
associates for the year ended 31st March 2023 in Form AOC-1 is attached and
marked as Annexure I and forms part of this Report.
d. DIVIDEND:
Your Directors are pleased to recommend dividend of Rs.5/- per equity
share having face value of Rs. 10/- each on 92,02,770 Equity shares, aggregating to
Rs.460.14 Lakhs. The dividend, if declared at the AGM, would be paid/ dispatched within
thirty days from the date of declaration of dividend to those Members/ Beneficial holders
as on Book Closure date fixed for the said purpose.
As per Regulation 43A of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "SEBI
Listing Regulations"), the top 1000 listed entities based on market capitalization
are required to formulate a Dividend Distribution Policy. Accordingly, your Company has
formulated its Dividend Distribution Policy, which is available on the Company's website
at https:// www.themismedicare.com/uploads/statutory/
pdf/dividend-distribution-policy-300.pdf
e. TRANSFER TO RESERVES:
Your Board has not recommended transfer of any amount of profit to
reserves during the year under review. The Company has not transferred any amount to
reserves and not withdrawn any amount from the reserves.
f. REVISION OF FINANCIAL STATEMENT:
There was no revision of the financial statements for the year under
review.
g. DEPOSITS:
The Company does not have any outstanding deposits from public.
Your Company has not accepted any deposits falling within the purview
of provisions of Section 73 of the Companies Act 2013 ("the Act") read with the
Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the
requirement for furnishing of details of deposits which are not in compliance with Chapter
V of the Act is not applicable.
h. DISCLOSURES UNDER SECTION 134(3)(l) OF THE ACT:
Except as disclosed elsewhere in this report, no material changes and
commitments which could affect the Company's financial position have occurred between the
end of the financial year of the Company and date of this report.
i. statement on declaration under section
149(6) Of THE ACT:
The Independent Directors of the Company have given the declaration and
confirmation to the Company as required under Section 149(7) of the Act and Regulation
25(8) of the SEBI Listing Regulation confirming that they meet the criteria of
independence and that they are not aware of any circumstance or situation, which exists or
may be reasonably anticipated, that could impair or impact their ability to discharge
their duties with an objective independent judgement and without any external influence.
j. STATEMENT uNDER SECTION 178 OF THE ACT:
Your Company has constituted Nomination and Remuneration Committee as
well as Stakeholders Relationship Committee as provided under section 178(1) of the Act.
The Nomination and Remuneration Committee considers that the qualifications, experience
and positive attributes of the Directors on the Board of the Company are sufficient enough
to discharge their duties as such. The remuneration is being paid to Managing and Whole
time Directors in line with Schedule V of the Act as also commission and sitting fees are
paid to other Directors for attending Board and Audit Committee meetings at present.
Policy on Nomination and Appointment of Directors/Criteria for
appointment of Senior Management and Remuneration Policy as formulated under Section
178(3) of the Act is annexed as Annexure II and forms part of this Report.
k. COMMENTS OF THE BOARD ON AuDITORS' REPORT:
i. Observations of Statutory Auditors on Accounts for the year ended 31st
March 2023:
There are no qualifications, reservations or adverse remarks or
disclaimer made by the Statutory Auditors in respect of financial
statements as on and for the year ended 31st March, 2023.
ii. Secretarial Audit Report for the year ended
31st March, 2023: Provisions of Section 204 read with
Section 134(3) of the Act, mandates to obtain Secretarial Audit Report from a Practicing
Company Secretary. M/s. SAV & Associates LLP, Practicing Company Secretaries were
appointed to conduct Secretarial Audit and issue Report for the financial year 2022-23.
Secretarial Audit Report issued by M/s. SAV & Associates LLP,
Practicing Company Secretaries, in Form MR-3 for the financial year 2022-23 forms part of
this report. The Secretarial Audit Report is annexed here with as Annexure III.
In respect of the observations made in the Secretarial Audit report,
there are no qualifications, or adverse remarks by the Secretarial Auditor in respect of
Secretarial Audit for the year ended 31st March, 2023.
l. PARTICuLARS OF LOANS, GuARANTEES, INVESTMENTS AND SECuRITIES:
Details of Loans granted, Guarantees given or Investments made during
the year under review, covered under the provisions of Section 186 of the Act are given in
the notes to the Financial Statements.
m. PARTICuLAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:
Contracts/arrangements/transactions entered by the Company during the
financial year with related parties were on an arm's length basis and in the ordinary
course of business.
All related party transactions are placed for the approval before the
Audit Committee and also before the Board and Shareholders wherever necessary in
compliance with the provisions of the Act and the SEBI Listing Regulations. The Audit
Committee had granted omnibus approval for Related Party Transactions as per the
provisions contained in the SEBI Listing Regulations.
The policy on materiality of related party transactions and dealing
with related party transactions as approved by the Board has been adopted by the Company
and uploaded on the
Company's website at the link: https://www.
themismedicare.com/uploads/statutory/pdf/ related-party-transaction-policy-25.pdf
n. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:
The Internal Financial Controls with reference to financial statements
as designed and implemented by your Company are adequate. During the year under review, no
material or serious observations were received from the Internal Auditors of the Company
for inefficiency or inadequacy of such controls.
The Internal Financial Controls followed by the Company are adequate
and commensurate with the size and nature of the business and were operating effectively
during the year under review.
Internal Audit function of the Company is carried out through
Independent Chartered Accountants Firms to test and verify the Company's Internal Control
System. The Company's assets are adequately safeguarded against significant misuse or
loss. The Company has in place, adequate Internal Financial Controls with respect to
maintenance of accounting records and financial transactions. Proper systems have been
devised to ensure compliance with the provisions of all applicable laws and that such
systems were adequate and operating effectively.
0. DISCLOSURE OF ORDERS PASSED BY
REGULATORS OR COURTS OR TRIBUNAL:
There are no orders passed by the regulators or courts or Tribunals
for/or against the Company during the year under review.
p. DISCLOSURE UNDER SECTION 43(a)(ii) Of THE ACT:
The Company has not issued any shares with differential rights and
hence no information as per provisions of Section 43(a) (ii) of the Act read with Rule
4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.
q. DISCLOSURE UNDER SECTION 54(1)(d) OF THE ACT:
The Company has not issued any sweat equity shares during the year
under review and hence no information as per provisions of Section 54(1)(d) of the Act
read with Rule 8(13) of the
Companies (Share Capital and Debenture) Rules, 2014 is furnished.
r. DISCLOSURE UNDER SECTION 62(1)(b) OF THE ACT:
As per provisions of Section 62(1)(b) of the Act read with Rule 12(9)
of the Companies (Share Capital and Debenture) Rules, 2014 and other applicable
Regulations, details of equity shares issued if any under Employees Stock Option Scheme
during the financial year under review is furnished in Annexure IV attached herewith which
forms part of this Report.
s. DISCLOSURE UNDER SECTION 67(3) OF THE ACT:
The provisions of Section 67(3) as well as disclosure under rule 16(4)
of Companies (Share Capital and Debentures) Rules 2014 are not applicable in respect of
Equity shares allotted against ESOPs granted to employees.
t. BUSINESS Responsibility AND SUSTAINIBLITY REPORT (BRSR):
In accordance with Regulation 34(2) of the SEBI Listing Regulations,
the inclusion of Business Reporting and Sustainability Report (BRSR) as a part of the
Annual Report is mandated for top 1000 listed entities based on the market capitalization.
BRSR for the financial year 202223 has been prepared in accordance with the format
prescribed by SEBI. The summary of the BRSR is appended herewith as Annexure VIII to this
Report.
2. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of the Act and the Articles of
Association of the Company, Mr. Rajneesh Anand (DIN: 00134856), Non - Executive
Non-Independent Director of the Company, retires by rotation at the ensuing Annual General
Meeting and being eligible offers himself for reappointment. The Board recommends to the
members the re- appointment of Mr. Rajneesh Anand (DIN: 00134856) as a Director in the
ensuing Annual General Meeting (AGM) of the Company.
Necessary resolution for the appointment/ reappointment of the
aforesaid Director is included in the Notice convening the ensuing AGM and details of the
proposal for appointment/re- appointment are mentioned in the Explanatory Statement to the
Notice.
Mr. Vijay Agarwal (DIN: 00058548) will be completing his second term as
an Independent Director at the ensuing AGM. Your Directors place on record their
appreciation of the services rendered by him during his tenure as Director of the Company.
During the year, Mr. Lajos Kovacs, representative of foreign
collaborator has resigned as a Non-Executive Director of the Board w.e.f. 6th
September, 2022. Your Directors place on record their appreciation of the services
rendered by Mr. Kovacs during his tenure as Director of the Company.
Mr. Hoshang Sinor (DIN: 00074905) ceased to be the Chairman and
Independent Director at the previous AGM held on 19th September, 2022 due to
completion of his second term as Independent Director. Your Directors place on record
their appreciation of the services rendered by Mr. Sinor during his tenure as Chairman and
Director of the Company.
Further, after completion of the financial year, Mr. Gabor Gulacsi
(DIN: 06975242), Non - Executive Non-Independent Director of the Company, has resigned
from the directorship of the Company w.e.f. 2nd May, 2023. Consequently, the
office of Mrs. Reena Patel (DIN: 00228669), Alternate Director to Dr. Gabor Gulasci also
gets vacated pursuant to section 161 of the Act and she ceases to be an Alternate Director
with effect from 2nd May, 2023. Directors have placed on record their
appreciation of the services rendered by both Directors during their tenure as Director of
the Company.
3. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:
a. BOARD MEETINGS:
A calendar of regular meetings is prepared and circulated in advance to
the Directors. Pursuant to the provisions of the Companies Act, 2013 and rules made
thereunder, the Board met four (4) times during the year, the details of which are given
in the Corporate Governance Report that forms part of this Annual Report. The intervening
gap between the meetings was within the period prescribed under the Act and the SEBI
Listing Regulations.
b. DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Act, in relation to the audited
financial statements of the Company for the year ended 31st March, 2023, the
Board of Directors hereby confirms that:
i. in the preparation of the annual accounts, the applicable accounting
standards had been followed and there is no material departure according to the accounting
standards;
ii. such accounting policies have been selected and applied
consistently and the Directors made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the Company as at 31st
March, 2023 and of the profit of the Company for that year;
iii. proper and sufficient care was taken for the maintenance of
adequate accounting records in accordance with the provisions of this Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the annual accounts of the Company have been prepared on a going
concern basis;
v. internal financial controls have been laid down to be followed by
the Company and that such internal financial controls are adequate and were operating
effectively ;
vi. Proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
c. COMMITTEES OF THE BOARD OF DIRECTORS / OTHER COMMITTEES:
In compliance with the requirement of applicable laws and as part of
best governance practices, the Company has following Committees as on 31st
March, 2023:
i. Audit Committee
ii. Stakeholders Relationship Committee
iii. Nomination and Remuneration Committee
iv. Corporate Social Responsibility Committee
v. Risk Management Committee
The details with respect to the aforesaid Committees form part of the
Corporate Governance Report.
d. VIGIL MECHANISM Policy/ WHISTLE BLOWER Policy For THE DIRECTORS AND
EMPLOYEES:
The Board of Directors of the Company has, pursuant to the provisions
of Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its
Powers) Rules, 2014, framed "Vigil
Mechanism Policy" for Directors and employees of the Company to
provide a mechanism which ensures adequate safeguards to employees and Directors from any
victimization on raising of concerns of any violations of legal or regulatory
requirements, incorrect or misrepresentation of any financial statements and reports, etc.
As per SEBI (Prohibition of Insider Trading) (Amendment) Regulation,
2018 which amends SEBI (Prohibition of Insider Trading) Regulation, 2015, the listed
company shall have a whistleblower policy and make employees aware of such policy to
enable employees to report instances of leak of unpublished price sensitive information.
Considering the above amendment in SEBI (Prohibition of Insider
Trading) Regulations, 2015, the Vigil Mechanism Policy of the Company was amended with
effect from 1st April, 2019 to enable employees to report instances of leak of
unpublished price sensitive information.
The employees of the Company have the right/ option to report their
concern/grievance to the Chairman of the Audit Committee.
The said Policy is available on the website of the Company at
https://www.themismedicare. com/uploads/statutory/pdf/vigil-mechanism-
whistle-blower-policy-31.pdf The Company is committed to adhere to the highest standards
of ethical, moral and legal conduct of business operations.
e. RISK MANAGEMENT:
We have an integrated approach to managing risks inherent in various
aspect of our business.
As per amendment prescribed under Regulation 21 of the SEBI Listing
Regulations, the Company was required to constitute a Risk Management Committee.
Accordingly a Risk Management Committee of the Company has been
constituted by the Board on 11th February, 2022 comprising four Board members
and a Senior Executive of the Company.
The composition of the Risk Management Committee of the Company is as
under:
i. Mr. Bhaskar V. Iyer |
|
ii. Ms. Manjul Sandhu |
Directors & Members |
iii. Mr. H Subramaniam |
|
iv. Dr. Sachin D. Patel |
|
v. Mr. Tushar Dalal |
Member & Chief Financial Officer |
The mandate of the Risk Management Committee is to discuss various
aspects involved in Business risks to the Company and the manner to mitigate the same.
f. CORPORATE SOCIAL RESPONSIBILITY POLICY:
As per the provisions of Section 135 of the Act read with Companies
(Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has
constituted a Corporate Social Responsibility (CSR) Committee.
Annual Report on CSR activities as required under the Companies
(Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure V and
forms an integral part of this Report.
The Company has formulated policy for CSR activities and is placed on
the website of the Company at https://www.themismedicare.com/
uploads/statutorv/pdf/csr-policv-29.pdf
During the year under the review one CSR committee meeting has been
conducted.
g. annual evaluation of directors, committee AND BOARD:
The Board of Directors has carried out an annual evaluation of its own
performance, Board , Committees and Individual Directors pursuant to the provisions of the
Act and the Corporate Governance requirements as prescribed by the SEBI Listing
Regulations.
The performance of the Board was evaluated by the Board with the help
of inputs received from all the Directors on the basis of the criteria such as the Board
Composition and structure, effectiveness of Board processes, information and functioning,
etc.
The performance of the Committees was evaluated by the Board with the
help of inputs received from the Committee members on the basis of the criteria such as
the composition of Committees, effectiveness of Committee meetings, etc. The Board
concluded that all Board Committees were discharging its functions effectively.
The Board andtheNominationandRemuneration Committee reviewed the
performance of the Individual Directors on the basis of the criteria such as the
contribution of the Individual Director to the Board and Committee meetings like ability
to contribute and monitor our corporate governance practices, meaningful and constructive
contribution in the issues discussed in meetings, etc. In addition, the Chairman was also
evaluated on the key aspects of his role.
In a separate meeting of Independent Directors, performance of
Non-Independent Directors, performance of the Board as a whole and performance of the
Chairman was evaluated, taking into account the views of Executive Directors and
Non-Executive Directors. The same was discussed in the Board meeting that followed the
meeting of the Independent Directors, at which the performance of the Board, its
Committees and individual Directors was also discussed. Performance evaluation of
Independent Directors was done by the entire Board, excluding the Independent Director
being evaluated.
The Board was overall of the opinion that the Independent Directors
have contributed through the process of Board and Committee meeting of which they are
members in effective manner as per as their expertise in their field and needs of the
organization. The suggestions and contributions of the Independent Directors in the
working of the Board\Committee were satisfactory and the value addition made by such
Independent Directors individually and as a team is commendable.
Also, the Company had provided facility of performance evaluation to
Directors through online platform for convenience of the Board members.
h. DISCLOSURE UNDER SECTION 197(12) OF THE ACT AND OTHER DISCLOSURES AS
PER RULE 5 Of COMPANIES (APPOINTMENT & REMuNERATION) RuLES, 2014:
The ratio of the remuneration of each Director to the median
remuneration of the employees of the Company for the financial year under review has been
marked as Annexure VI.
i. particulars of employees
The information required under Section 197
of the Act read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules 2014 is appended as Annexure VI to this
report.
The statement containing names of employees in terms of remuneration
drawn and the particulars of employees as required under Section 197(12) of the Act read
with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules 2014 is provided in a separate annexure forming part of this report.
Further, the report and the accounts are being sent to the Members excluding the aforesaid
annexure. In terms of Section 136 of the Act the said annexure is open for inspection and
any Member interested in obtaining a copy of the same may write to the Company Secretary
at sangameshwar.iyer@themismedicare.com.
j. PAYMENT OF remuneration / COMMISSION TO DIRECTORS FROM HOLDING OR
SuBSIDIARY COMPANIES:
None of the managerial personnel i.e. Managing Director and Whole time
Directors of the Company is in receipt of remuneration/ commission from any Subsidiary
Company of the Company.
k. DECLARATION OF INDEPENDENCE
The Company has received declarations from all the Independent
Non-Executive Directors of the Company confirming that they meet the criteria of
independence as prescribed under Section 149(6) of the Act and the SEBI Listing Regulation
as amended.
4. AuDITORS' REPORTS:
a. APPOINTMENT OF AuDITORS:
M/s Krishaan & Co., were appointed as Statutory Auditors of the
Company at the 52nd Annual General Meeting of the Company to hold office from
the conclusion of the said meeting till the conclusion of the 57th Annual
General Meeting.
b. MAINTENANCE OF COST RECORDS :
Maintenance of cost records is required as specified by the Central
Government under sub-section (1) of section 148 of the Act, and accordingly such accounts
and records are made and maintained.
c. COST AuDITORS:
Pursuant to the provisions of Section 148 of
the Act read with the Companies (Cost Records and Audit) Rules, 2014,
the Board of Directors on recommendation of the Audit Committee, appointed M/s. B. J. D.
Nanabhoy & Co., Cost Accountants as the Cost Auditors of the Company for the financial
year 2023-24 for the applicable Product(s).
Pursuant to Section 148 of the Act read with the Companies (Audit and
Auditors) Rules, 2014, appropriate resolution seeking your ratification to the
remuneration of the said Cost Auditors is appearing in the Notice convening the 53rd
AGM of the Company.
d. SECRETARIAL AUDITORS:
The Board of Directors of the Company had appointed M/s. SAV &
Associates LLP, Practicing Company Secretaries, Mumbai, to conduct Secretarial Audit for
the financial year 2022-23.
The Secretarial Audit Report does not contain any qualifications,
reservations or adverse remarks.
The Secretarial Audit Report and the Secretarial Compliance Report
forms a part of this report.
5. other disclosures
Other disclosures as per provisions of Section 134 of the Act read with
Companies (Accounts) Rules, 2014 are furnished as under:
a. ANNuAL RETuRN:
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the
Annual Return as on 31st March, 2023 will be available on the Company's website
on https://www.themismedicare.com.
b. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND Foreign EXCHANGE
EARNINGS AND OuTGO:
The particulars as required under the provisions of Section 134(3) (m)
of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in
respect of conservation of energy, technology absorption, foreign exchange earnings and
outgo etc. are furnished in Annexure VII which forms part of this Report.
c. CORPORATE GOVERNANCE:
Report on Corporate Governance and Certificate of Practicing Company
Secretary regarding compliance of the Conditions of Corporate Governance as stipulated in
regulation 17 to
27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 of the
SEBI Listing Regulations with the Stock Exchanges, are enclosed as a separate section and
forms part of this report.
d. PREVENTION OF SEXuAL HARASSMENT:
We have zero tolerance for sexual harassment at the workplace and have
adopted a Policy on prevention, prohibition and redressal of sexual harassment at the
workplace in line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention
and redressal of Complaints of Sexual Harassment at the workplace.
During the financial year ended 31st March, 2023, your
Company has not received any complaint relating to sexual harassment.
6. MANAGEMENT DISCuSSION & Analysis: Cautionary Statement:
The statements in the "Management Discussion and Analysis
Report" describe your Company's objectives, projections, estimates and expectations
which may be "forward-looking statements" within the meaning of the applicable
laws and regulations. The actual results could differ materially from those expressed or
implied, depending upon the economic and climatic conditions, government policies,
taxation and other laws and other incidental factors. financial Overview:
The financial performance of the Company for the financial year ended
31st March, 2023, is as follows: Total consolidated revenue from operations
stood at Rs. 354.32 Crores for the year ended 31st March, 2023, as against Rs.
394.61 Crores for the corresponding previous period, a decrease of 10.21%, FY22 includes
one-time COVID related export order.
The total cost of raw materials rendered for the financial year ended
31st March, 2023 was Rs. 118.36 Crores as against Rs. 148.14 Crores for the
corresponding previous period.
The EBIDTA (earnings before interest, depreciation and tax, excluding
other income) was Rs. 67.45 Crores for the year ended 31st March, 2023, as
against Rs. 95.64 Crores for the corresponding previous period, a decrease of 29.47%.
The finance cost for the financial year ended 31st March,
2023 was Rs. 9.56 Crores as against Rs. 8.77
Crores for the corresponding previous period.
The PAT (profit after tax) was Rs. 56.90 Crores for the year ended 31st
March, 2023, as against Rs. 72.88 Crores for the corresponding previous period, a decline
of 21.93%.
Resources and Liquidity:
The cash and cash equivalents at the end of 31st March, 2023
were Rs. 12.55 Crores. The total debt to equity ratio of the Company stood at 0.27 as on
31st March, 2023.
Business category wise performance:
The Company operates in one segment i.e. pharmaceuticals. The results
of the Company under review depict business growth during the period. The Company is
presently manufacturing formulations and API.
Risk & Concerns:
The business of the Company is exposed to certain risks. Risks,
liabilities and losses are part and parcel of any industry and need to be tackled through
well forecasted strategies and actions.
unfavorable Policy Changes
In the past few years, the Government of India has made frequent
changes in the drug pricing and other laws impacting the operations of the Company.
Further adverse changes in government policies with respect to essential medicines and
pricing with respect to the products may impact margins of the Company. The Government
policies are creating new risks for domestic market by including new molecules to the
price control umbrella and also by issuing ban on various Fixed Dose Combinations.
Credit Risk
To manage its credit exposure, Themis Medicare has determined a credit
policy with credit limit requests and approval procedures. The Company does its own
research of a counterparty's financial health and business prospects. Timely and rigorous
process is followed up with clients for payments as per schedule. The Company has suitably
streamlined the process to develop a focused and aggressive receivables management system
to ensure timely collections.
Interest Rate Risk
The Company has judiciously managed the debt- equity ratio. It has been
using a mix of loans and internal cash accruals. Themis Medicare has well
managed the working capital to maintain the overall interest cost at
reasonable levels.
Competition Risk
Like in most other industries, growth opportunities lead to a rise in
competition. We face different levels of competition, from domestic as well as
multinational companies. Themis Medicare has created strong differentiators in execution,
quality and delivery which make it resilient to competition. Furthermore, the Company
continues to invest in R&D and its people to maintain a competitive edge. Stable and
long-standing client relationships further help maintain a strong order book and insulate
the Company from this risk. We also mitigate this risk with the quality of our
infrastructure, our product portfolio and specialized formulation methodologies, coupled
with prudent financial and human resources management and better control over costs.
Input Cost Risk
Our profitability and cost effectiveness may be affected due to change
in the prices of raw materials, power and other input costs.
opportunities & THREATS Opportunities
India is the largest provider of generic drugs globally and is known
for its affordable vaccines and generic medications. The Indian Pharmaceutical industry is
currently ranked third in pharmaceutical production by volume after evolving over time
into a thriving industry growing at a CAGR of 9.43% since the past nine years. India has
the most number of pharmaceutical manufacturing facilities that are in compliance with the
US Food and Drug Administration (USFDA) and has 500 API producers that make for around 8%
of the worldwide API market.
Indian pharmaceutical sector supplies over 50% of global demand for
various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK. The
domestic pharmaceutical industry includes a network of 3,000 drug companies and ~10,500
manufacturing units. The country also has a large pool of scientists and engineers with a
potential to steer the industry ahead to greater heights. Over 80% of the antiretroviral
drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by
Indian pharmaceutical firms. India is rightfully known as the "pharmacy of
the world" due to the low cost and high quality of its medicines.
Source: https://www.ibef.ora/industrv/ pharmaceutical-india
Threats
Adoption of cost control policies along with tightening of rules by
governments in key markets are expected to affect the growth prospect of the global
pharmaceuticals industry. Pharmaceuticals companies are forced to reduce their research
and development (R&D) spending due to slowdown of growth in last few years, which is
also expected to hamper growth of the global pharma market as new drugs revenue form large
part of pharma firm's revenue due to exclusivity of the drug. Apart from this generics
pharma market is facing decreasing return on investment due to price erosion in key
markets which is forcing many firms to look for other avenues and markets to sustain
growth.
Source: https://www.globenewswire.com/
news-release/2020/01/17/1972092/0/en/ Global-Pharmaceuticals-Industry-Analysis-and-
Trends-2023.html
Internal control system and adequacy:
The Company ensures the orderly and efficient conduct of its business,
including adherence to Company's 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. This involves the timely and accurate communication of financial
and operational information to stakeholders, both internal and external. The company
identifies and asses the risks it faces and develop necessary strategies to mitigate or
manage those risks.
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. 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.
Outlook on Indian Pharmaceutical Industry:
The pharmaceutical industry in India is a significant part of the
nation's foreign trade and
offers lucrative potential for investors. Millions of people around the
world receive affordable and inexpensive generic medications from India, which also runs a
sizable number of plants that adhere to Good Manufacturing Practices (GMP) standards set
by the World Health Organization (WHO) and the United States Food and Drug Administration
(USFDA).
Among nations that produce pharmaceuticals, India has long held the top
spot. Medicine spending in India is projected to grow 9-12% over the next five years,
leading India to become one of the top 10 countries in terms of medicine spending. Going
forward, better growth in domestic sales would also depend on the ability of companies to
align their product portfolio towards chronic therapies for diseases such as such as
cardiovascular, antidiabetes, anti-depressants and anti-cancers, which are on the rise.
In addition, the Indian pharmaceutical industry placed a high value on
research and development. By expanding its R&D ecosystem and increasing pharmaceutical
exports, India has emerged as a global medical giant in 2022. The COVID-19 pandemic has
altered public perception of pharmaceutical research. It has demonstrated the significance
of investigating novel therapeutic modalities, conducting complex clinical studies, and
cultivating specialized knowledge and abilities to navigate the drug research and
development process.
According to the EY FICCI report, the Indian pharmaceutical market is
expected to reach $130 billion in value by the end of 2030, as there has been a growing
consensus on providing new innovative therapies to patients. Meanwhile, the global market
for pharmaceutical products is expected to exceed $1 trillion by 2023. This is due in part
to the thousands of compounds that are currently in the final stages of clinical
development, as well as hundreds of new products that are expected to be approved in 2023
and beyond. This concentration of pharmaceutical products is unusual and has not been seen
in over a decade.
India is working to develop a policy framework that includes
intellectual property and technology commercialization, government procurement,
scientificresearch,education, andskilldevelopment, as well as ease of doing business,
regulatory legislation, and tax and financial incentives. These
regulatory changes will allow for additional private- sector investment
in pharmaceutical R&D.
Speedy introduction of generic drugs into the market has remained in
focus and is expected to benefit the Indian pharmaceutical companies. In addition, the
thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs
well for the pharmaceutical companies.
Themis Medicare is prepared to seize the opportunity because to its
extensive experience in the field of producing APIs and medicinal formulations. It is
present in a number of drug delivery systems and is thinking about extending its portfolio
in this area as well.
The long-term market outlook for hospitals in India is stable, with
annual revenues likely to grow robustly over the next few years on account of rising
domestic demand for healthcare as well as medical tourism.
While metropolitan cities like Delhi, Mumbai, Chennai, and Kolkata host
super specialty hospital groups (Apollo, Fortis, Max, etc.) with world class
infrastructure, healthcare players are now looking to expand in Tier-2 and Tier-3 cities,
such as Nashik (Maharashtra), Indore (Madhya Pradesh), Visakhapatnam (Andhra Pradesh),
Jaipur (Rajasthan), Mohali (Chandigarh), Surat (Gujarat), and Dehradun (Uttarakhand).
The hospital industry in India offers huge investment opportunities for
both global and domestic investors. At present, there are 582 investment opportunities
worth US$32.16 billion in the medical infrastructure sector.
Source: https://www.ibef.org/industrv/ pharmaceutical-india
https://www.livemint.com/companies/news/what-
pharmaceutical-india-has-accomplished-in-2022-
what-to-expect-in-2023-11672160844579.html
Government Initiatives
The government has a role in boosting research and manufacturing
capacities, as well as expanding the PLI scheme so that more local manufacturers can
access incentives and support needed to play in the API sector. Additionally, the center's
recent decision to make the QR code mandatory on the packaging label of the top 300 drug
formulations is a much-needed and well-thought-out step by the government. It will likely
curb the sale of spurious
and counterfeit drugs in India.
The Indian Government has taken many steps to reduce costs and bring
down healthcare expenses. The National Health Protection Scheme, which aims to offer
universal healthcare, the ageing population, the rise in chronic diseases, and other
government programmes, including the opening of pharmacies that offer inexpensive generic
medications, should all contribute to boost the Indian pharmaceutical industry.
Source: https://www.ibef.ora/industry/ pharmaceutical-india
https://www.livemint.com/companies/news/what-
pharmaceutical-india-has-accomplished-in-2022-
what-to-expect-in-2023-11672160844579.html
As per the Union Budget 2022-23:
Rs. 3,201 crore (US$ 419.2 million) has been set aside for research and
Rs. 83,000 crore (US$ 10.86 billion) has been allocated for the Ministry of Health and
Family Welfare.
Rs. 37,000 crore (US$ 4.83 billion) has been allocated to the 'National
Health Mission'. Rs. 10,000 crore (US$ 1.28 billion) has been allocated to Pradhan Mantri
Swasthya Suraksha Yojana.
The Ministry of AYUSH has been allocated Rs. 3,050 crore (US$ 399.4
million), up from Rs. 2,970 crore (US$ 389 million). In March 2022, under the
Strengthening of Pharmaceutical Industry (SPI) Scheme, a total financial outlay of Rs. 500
crore (US$ 665.5 million) for the period FY 2021-22 to FY 2025-26 were announced.
To achieve self-reliance and minimize import dependency in the
country's essential bulk drugs, the Department of Pharmaceuticals initiated a PLI scheme
to promote domestic manufacturing by setting up greenfield plants with minimum domestic
value addition in four separate 'Target Segments' with a cumulative outlay of Rs. 6,940
crore (US$ 951.27 million) from FY21 to FY30. Source: https://www.ibef.org/industrv/
pharmaceutical-india
Outlook on Global Pharmaceutical Industry
Global pharmaceutical market is expected to grow in the upcoming years
despite recent slowdown in key markets across the globe. The reasons are simple: aging and
growing population, rising
income levels, and emerging medical conditions and emergence of new
diseases.
The global pharmaceutical industry will worth USD
1.57 trillion by 2023. The growth in this market is predicted on the
basis of various factors like market drivers, current and upcoming trends, current growth
pattern, and market challenges.
North America is expected to retain its leading position in the global
pharmaceuticals market with market share of 45.33% in 2023 improving on its market share
compared to 2017. Europe on the contrary is expected to see a decline in its market share
compared to 2017 and be worth 20.24% of global pharma industry in 2023.
Asia Pacific pharmaceuticals market is expected to retain its second
position with a market share of 24.07% in 2023. Latin America and Middle East and Africa
(MEA) are expected to retain 7.53% and 2.96% market share of global pharmaceuticals market
in 2023. This growth is fueled by the growing and ageing population in key markets.
As per World Population Prospects by United Nations, the worldwide
population is likely to cross 9.3 billion by 2050 and around 21% of this population is
expected to be aged 60 and above. Apart from ageing and rising population the improvements
in purchasing power and access to quality healthcare and pharmaceuticals to poor and
middle-class families worldwide also is driving the growth of global pharma industry.
The active pharmaceutical ingredients (API) market was valued at
approximately USD 177.05 billion in 2021, and it is expected to reach USD 258.60 billion
by 2027, registering a CAGR of nearly 7.50% during the forecast period 2022-2027. The API
market has traditionally been dominated by drugs, such as anti- infectives and diabetes,
cardiovascular, analgesics, and pain management drugs. However, as per the R&D trends,
the demand is shifting toward developing complex APIs used in novel formulations,
targeting niche therapeutic areas. The key factors boosting the growth of the active
pharmaceutical ingredients market are the rising drug research and development activities
for drug manufacturing, the increasing importance of generics, and the increasing uptake
of biopharmaceuticals. However, the unfavourable drug price control policies across
various nations and high manufacturing costs are expected to hinder the market's growth.
The global sales of the critical care drugs market are
projected to grow at a steady CAGR of around 5% to 6% between 2022 and
2032, generating substantial revenues by the end of the forecast period. Growth in the
market is attributable to the increasing prevalence of various chronic diseases across the
world along with the rising need for better pain management during complex surgeries.
Another aspect, which is leading this growth, is rising focus of
pharmaceuticals companies to tap the rare and speciality diseases market. Innovations in
advanced biologics, nucleic acid therapeutics, cell therapies and bioelectronics &
implantables has attracted investments in the industry by even non-pharma companies like
Facebook, Qualcomm etc. which is also driving the global pharmaceuticals industry growth.
Source: https://www.alobenewswire.com/
news-release/2020/01/17/1972092/0/en/ Global-Pharmaceuticals-Industry-Analysis-and-
Trends-2023.html
https://www.mordorintelliaence.com/industry-
reports/alobal-active-pharmaceutical-inaredien ts- api-market
https://www.futuremarketinsiah ts.com/reports/
critical-care-druas-market
Indian & Global Hospital Sector
The long-term market outlook for hospitals in India is stable, with
annual revenues likely to grow robustly over the next few years on account of rising
domestic demand for healthcare as well as medical tourism.
While metropolitan cities like Delhi, Mumbai, Chennai, and Kolkata host
super specialty hospital groups (Apollo, Fortis, Max, etc.) with world class
infrastructure, healthcare players are now looking to expand in Tier-2 and Tier-3 cities,
such as Nashik (Maharashtra), Indore (Madhya Pradesh), Visakhapatnam (Andhra Pradesh),
Jaipur (Rajasthan), Mohali (Chandigarh), Surat (Gujarat), and Dehradun (Uttarakhand).
The hospital industry in India offers huge investment opportunities for
both global and domestic investors. At present, there are 582 investment opportunities
worth US$32.16 billion in the medical infrastructure sector.
In recent years, the hospital sector has undergone significant changes
due to technological advancements, changes in healthcare policy, and
increasing patient demands. The COVID-19 pandemic has also had a
profound impact on the hospital sector, leading to changes in healthcare delivery and a
shift towards virtual care.
Despite these challenges, the hospital sector is expected to grow in
the future. According to a report by Grand View Research, the global hospital market is
projected to reach USD 7.1 trillion by 2028, with a compound annual growth rate (CAGR) of
8.9% from 2021 to 2028. The growing demand for healthcare services, increasing prevalence
of chronic diseases, and technological advancements in medical devices and equipment are
some of the key factors driving this growth.
Source:
https://www.india-briefina.com/news/indias-healthcare-ecosvstem-kev-seaments-market-arowth-
prospects-26225.h tml/
Key Developments during the year:
Central Licensing Authority conveyed a no objection to the
Company for manufacturing and marketing a key product, i.e. Diclofenac Injection 75mg/ml
which the Company had stopped manufacturing and marketing pursuant to a directive from the
State Food and Drug Administration authorities
Received approval from Drug Controller General of India (DCGI)
for import & marketing of Remifentanil 1 mg/2mg Powder for Injection. Remifentanil
Hydrochloride is a potent opioid analgesic used for pain management in critically ill
patients
Launched a new product - Lenzetto Global brand of Estradiol
Novel Drug Delivery System for treatment of Menopausal symptoms"
Entered into a partnership to develop NFL-101 with NFL
BIOSCIENCES, a biopharmaceutical company developing botanical drugs for the treatment of
addictions, the company's drug candidate for smoking cessation, for the Indian market.
Themis Medicare will purchase from NFL Biosciences NFL-101 Active Pharmaceutical
Ingredient (API). And NFL will also receive double digit royalties on sales
Company's Strategy
Company's focus continuous to be on the Hospital business and expand
its presence throughout the country. We see many opportunities in the hospital business
backed by a strong product offering. TML is among top 3 players in the country and offers
complete range of products for Anesthesia which is favorable for Hospital business.
Critical care and Intensive care are other divisions in the Hospital business which forms
part of the long term growth strategy.
For API, currently, three products are in validation, which are
expected to go into commercial production by second half of this year. With strong R&D
pipeline, the Company is confident to take two exhibit batches per quarter of current
financial year and typically it takes about six months for exhibit batch or validation
batch to reach commercial launch. Forward integration of in-house APIs is also implemented
in certain important FDFs to be used in Hospital business.
As part of our strategy to concentrate on both the API and the Hospital
Business, the Company recently demerged and transferred the API segment of the Company,
including both the API production facilities, to a 100% owned subsidiary company, Themis
Lifestyle Private Limited.
Outlook
Over the next five years, India's medical spending is expected to
increase by 9-12%, making it one of the top 10 countries in the world. The ability of
company to orient its product portfolio towards chronic therapies for diseases like
cardiovascular, anti-diabetes, anti-depressants, and anti-cancers, which are on the rise,
will also play a role in future domestic sales growth. The quick entry of generic
medications into the market has remained a priority and is anticipated to help the
company.
A lot of opportunities are foreseen in the hospital business backed by
strong product offering. Themis's expertise in Anaesthesia makes it one of the top players
in the country and a complete range of portfolio gives the company an additional benefit
for entering the hospital segment. Other segments of the hospital business where TML has a
presence and is expanding, including critical care and intensive care, are included
in the long-term growth strategy. The company has also planned few new
product launches to make sure a complete product portfolio for generics support its
incremental penetration into the Hospitals.
The Company is also infusing CapEx towards R&D to enhance
capabilities by adding more skilled manpower to the existing team, establishing new
R&D lab at Baroda and making investments in Hyderabad facility.
The Indian API (Active Pharmaceutical Ingredient) market is expected to
grow at a compound annual growth rate (CAGR) of around 8-9% between 2021 and 2026. This
growth can be attributed to factors such as increasing demand for generic drugs, rising
prevalence of chronic diseases, and the government's initiatives to promote domestic
manufacturing of APIs. Themis Medicare will continue on investing in the R&D facility
for in-house API development, which will help the business to reach new heights. Three
products under API segment are currently undergoing validation and should enter commercial
production by the second half of this year.
As part of its recent strategy, change to focus more on the hospital
business, the board recently decided to demerge and transfer the company's API sector,
including both API production facilities, to a 100% owned subsidiary company, Themis
Lifestyle Private Limited. The company will be able to strategically focus on both the API
and the Hospital Business by doing this.
Due to its considerable experience in the field of creating APIs and
pharmaceutical formulations, Themis Medicare is prepared to take advantage of the
opportunity prevailing in the Indian Pharmaceutical sector. It is present in many drug
delivery systems and is considering expanding its product line in this sector as well.
c) Segment-wise or product-wise performance:
The Company operates in single segment i.e., pharmaceuticals. The
results of the Company under review depict business growth during the period.
d) Discussion on financial performance with respect to operational
performance
In the previous fiscal year, FY22, the Company experienced a notable
order directly influenced by the Covid pandemic within the hospital segment. Therefore,
when reviewing the financials for the current year under consideration, it is essential to
consider the impact of this extraordinary order.
The consolidated Net Profit after Tax decreased by 22.16% compared to
previous year. The production capacity was utilized to the maximum level during the year.
e) Material developments in Human Resources / Industrial Relations
front, including number of people employed
The core of the Human Resource philosophy at Themis Medicare Ltd. 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 31st March, 2023
the total employee strength was 996.
f) Details of significant changes in key financial ratios (i.e. change
of 25% or more as compared to the immediately previous financial year):
Sr. No. Particulars |
2022-23 |
2021-22 |
1 Debtors Turnover ( in days) |
150 days |
93 days |
2 Inventory Turnover (in days) |
213 days |
150 days |
3 Interest Coverage Ratio |
7.16 : 1 |
10.57 : 1 |
4 Current Ratio |
1.71 : 1 |
1.76 : 1 |
5 Debt Equity Ratio |
0.37 : 1 |
0.38 : 1 |
6 Operating Profit Margin (%) |
19% |
23% |
7 Net Profit Margin (%) |
12% |
16% |
g) Details of any change in Return on Net Worth as compared to the
immediately previous financial year along with a detailed explanation thereof.:
Financial year |
2022-23 |
2021-22 |
Return on net worth (%) |
17% |
29% |
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 |
Vijay Agarwal |
Managing Director & CEO |
Independent Director |
DIN:00033353 |
DIN:00058548 |
Place: Mumbai |
|
Dated: 13th May, 2023 |
|
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