Cian Healthcare Ltd Management Discussions

Management Discussion and Analysis Report

a) Industry Structure and Development

The Company was originally incorporated as "Cian Healthcare Private Limited" at Pune, Maharashtra as a Private Limited Company under the provisions of Companies Act, 1956 vide. Certificate of Incorporation dated January 07, 2003 bearing Corporate Identification Number

U24233PN2003PTC017563 issued by Registrar of Companies, Pune, Maharashtra.

Subsequently, our Company was converted into a Public Limited Company pursuant to special resolution passed by the shareholders at the Extraordinary General Meeting held on November 19, 2018 and fresh certificate of incorporation consequently upon change of name was issued by Registrar of Companies, Pune, Maharashtra dated November 30, 2018 and name of our Company was changed to Cian Healthcare Limited. The Corporate Identification Number is L24233PN2003PLC017563.

The Indian healthcare sector is expected to reach US$ 372 billion by 2022. Rising income level, greater health awareness, increased precedence of lifestyle diseases and improved access to insurance would be the key contributors to growth. The sector is expected to generate 40 million jobs in India by 2030. 100,000 jobs are expected to be created from Ayushman Bharat, the National Health Protection Scheme. As of November 14, 2018, number of sub-centres reached 167,961 and number of Primary Health Centres (PHCs) increased to 33,137. The hospital industry in India stood at ?4 trillion (US$61.79 billion) in FY17 and is expected to reach ?8.6 trillion (US$ 132.84 billion) by FY22.

The private sector has emerged as a vibrant force in Indias healthcare industry, lending it both national and international repute. It accounts for almost 74 per cent of the country?s total healthcare expenditure. Telemedicine is a fast-emerging trend in India; major hospitals (Apollo, AIIMS, and Narayana Hrudayalaya) have adopted telemedicine services and entered into a number of public private partnerships (PPP). Further, presence of world-class hospitals and skilled medical professionals has strengthened India?s position as a preferred destination for medical tourism.

The Government of India aims to develop India as a global healthcare hub. It has created the Intensified Mission Indradhanush for improving coverage of immunisation in the country and reaches every child under two years of age and all the pregnant women who have not been part of the routine immunisation programme. In March 2018, Union Cabinet approved budget support of ^85,271 crore (US$ 13.16 billion) for the period of April 2017- March 2020 under the National Health Mission to encourage medical infrastructure in India. In August 2018, the Ministry of Health and Family Welfareset up national Resource Centre for EHR Standards (NRCeS) to facilitate adaptation of notified HER standards, at an estimated cost of ^23.59 crore (US$ 3.52 million).

b) Opportunities and Threats:

Opportunities	Threats
• Entry in the market of Govt., Supply and Exports where own Mfg. is a pre-requisite	Changes in Government policies Supply chain disruption
• Reduction in Inventory holding coupled with improved quality and timely delivery	> Excessive lead times in case of more contract work
• Capitalization on the marketing setup by backward integration thereby reducing the dependency on • contract manufacturers •	> Inventory float and the difficulty of tracking it > Imports and regulatory structure > Slowdown in rural demand
• Due to increased health awareness in India, the setting up of number of hospitals / clinics with laboratories are expected to increase every year, which is expected to gives boost to market company?s products	> Presence of chemicals and other toxic elements in soaps can damage skin texture or trigger allergies, in some people
• Global market is lucrative
• Can take help of expertise from technical persons to curb competition
• Large domestic market
• Export potential
• Increasing income levels is estimated to result in faster revenue growth
• Indian government?s Swachh Bharat mission
• GST lowered duty
• Increasing purchasing power and premiumisation of soaps has created a growing need for premium, feature-rich products, suchas herbal soaps

c) Segment - wise performance:

The company operating in Five sectors i.e. Export, Government Supplies, Merchant Export, Own Brand Franchise Business and Third Party/ Contract manufacturing, The details of segment wise performance is as under:

(amount in Crores)

Segment	Net Sales
Export	9.65
Government Supplies	5.24
Merchant Export	1.90
Own Brand Franchise Business	11.17
Third Party	39.57
Other	0.03
Total	67.56

d) Outlook:

Your Company?s estimates for future business development are based both on its customer?s forecasts and on the Company?s own assessments.

e) Risk and Concern:

The Company is responsible for handling risks, which forms a part of good corporate governance. As part of our group values, adequate risk management ensures that risks are identified early and mitigation process is defined.

Various types of risks that can be categorized into external risks and internal risks impact the Company.

• External Risks:

Industrial risks like change in government regulations or their implementation could disrupt our operations,unethical marketing, dishonest advertising, questionable pricing practices, inaccurate claims with regards to safety and efficacy of the product,Political instability,Natural calamities,Terroristattacks, civil unrests etc.

• Internal Risks:

The Company can improve operational performance and create long-term value for shareholders on the back of superior consumer innovation as well as persistent focus on profitable growth and cost efficiency. The internal departments of the Company proactively monitor and manage the operational risks at various levels.

f) Internal Control:

Commensurate with size, scale and complexity of its operation, the Company has well defined and adequate internal controls, throughout the year, the internal controls operated effectively.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

Key Ratio	2022-23 2021-22 (%) (%)	Variance	Comments for Variation in ratio above 25%
Current Ratio	1.18 1.21	(2.75) %	-
Debt Equity Ratio	0.21 0.31	32.25%	Due to decrease in debt
Debtors Turnover	0.81 0.87	(7.11)%	Due to increase in turnover and credit period of debtors
Creditors Turnover	3.53 3.23	9.41%	-
Working Capital	1024.81 1191.41	(14.06)%	Due to increase in stock and other current assets.
Gross Profit ratio	0.39 0.40	(2.38)%	-
Net Profit Ratio	0.02 (0.04)	(147.89)%	Due to Increase in turnover and in operational Efficiency
Return on Investment	0.02 (2.96)	(100.55)%	Due to Increase in net profit
Return on Equity	0.02 (3.94)	(100.50)%	Due to Increase in net profit
EPS	0.43 (0.96)	144.87%	Due to Increase in net profit

g) Discussion on financial performance with respect to operational performance

During the year the performance of the Company has substantially increased compared to the previous year.

a) Total turnover for the year was Rs. 6756.13 Lakh as compared to Rs. 6410.29 Lakh in previous year, Increased by 05.39%

b) Profit/(Loss) before Tax for the year was Rs. 120.04 Lakh as compared to Rs. (237.52) Lakh Increased by 135.56%.

c) Profit after Tax for the year was Rs. 107.64 as compared to Rs. (227.58) Lakh Increased by 147.29 %.

g) Human Resource Management:

To build a talent pool, it becomes necessary for the human resources function to partner with the various business segments so as to create a work ecosystem that shall have on board, the right talent and therefore nurture them to deliver superior performances. As an organization committed towards motivating its employees, the Company believes in recognizing and rewarding its employees for their extra-ordinary contributions through quarterly and annual rewards programs. It also recognizes employees who have contributed to the organization. Your company is focused on building a high performance culture with a growth mindset. Developing and strengthening capabilities of all employees has remained on ongoing priority.

Cautionary Statement:

Cautionary Statement Statements in this report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in this statement because of many factors like economic condition, availability of labour, price conditions, domestic and international market, changes in Government policies, tax regime, etc. The Company assumes no responsibility to publicly amend, modify or revise any statement on basis of any development, information and event.