MANAGEMENT DISCUSSION AND ANALYSIS
PHARMA INDUSTRY STRUCTURE AND DEVELOPMENTS
After a brief Period of sluggishness during past two years the growth momentum in the
domestic formulations market appears to be back on track. According to the Economic Survey
2011-12, the annual global spending on medicines will rise to nearly $1.2 trillion in 2016
representing a compound annual growth rate of 3-6 percent. (IMS -The Global Use of
Medicines: Outlook through 2016). Further, global spending on patented drugs is expected
to decline due to loss of exclusivity on patent expiries, there will be accelerated shift
in spending towards generics in developed markets, rising to 39% of total spend by 2015,
up from 20% in 2005. India ranks 10th globally in terms of value and 3rd in terms of
volumes. Growing population, improving medical infrastructure, rising income levels,
increasing health insurance coverage and increasing government spend on healthcare are
driving the market growth. Indian pharmaceutical market is dominated majorly by branded
generics constituting nearly 70% to 80% (Source: IMS India Pharma Report) of market.
Outlook for generics in India looks positive due to several factors The current
pipeline of the generics products that are either undergoing new process development or
have been recently launched is strong. In addition, domestic players have the opportunity
to develop new combinations and formulations of the products that are already in the
market. Generics players continue to have a wide range of options for new generics
launches.
OPPORTUNITIES
Generic segment contributed around 30% of the world pharmaceuticals market and is
expected to reach 40% of the total global Pharma spending by 2015 growing with a CAGR of
13% compared with a 1% CAGR in the patented branded market. This trend is visible not only
in developing markets but also in developed markets. The Company is well positioned to
capitalize on these growth opportunities with strong development pipeline, low R&D and
manufacturing costs and sound marketing reach and capabilities built over a period of
time.
TLPL has always been India-centric. Most of the business turnover has been from the
Indian market. With strong growth expected to continue in the Indian economy, we continue
to see healthy growth. Regular launch of new products has continuously aided your Company
in widening its therapeutic range which is our key focus area. Most of the innovator
companies are facing challenge of depleting research pipeline and losing patent protection
for their blockbuster drugs in the next few years. This has opened up opportunities to
CRAMS players from low cost destinations like India. TLPL has identified this opportunity
very early and started working on it. The company believes that it can manufacture various
products of best quality at a low cost. Many of innovator companies are outsourcing their
products to your company. Recognizing this opportunity, the company continued to take
initiatives in reducing its costs by employing lean manufacturing techniques and resource
management initiatives.
STRENGTHS AND WEAKNESSES
Being in the Pharma Sector, TLPL has following strength and weaknesses.
STRENGTHS
• Strong and elaborate network of relationships with consumers, suppliers and
external partners.
• Manufacturing on Principal to Principal and Loan License Arrangement.
• Ultramodern manufacturing facilities.
• Marketing Network across India.
• Exports to more than 40 countries.
• Listed on the Bombay Stock Exchange Ltd and the National Stock Exchange of India
Ltd.
• Good connectivity to Mumbai by rail as well as road.
• Cordial Relations with Workers.
• Experienced and dedicated staff.
• Availability of skilled and semi skilled workers to create opportunities,
replicate the successes and drive business growth..
WEAKNESSES
To remain competitive and profitable in the challenging industry environment of today,
TLPL has to increase production capacities to face the competition in the global market.
In addition to contract manufacturing, it has to concentrate on increasing its own
products range. Besides this your Company also needs to ramp up the marketing operations.
RISK MANAGEMENT
Global operations and product development for regulated markets poses significant
challenges and risks for the organization. Such risks, if not identified and addressed
properly in a timely manner could adversely impact accomplishment of the overall
objectives of the organization and its sustainability. Your Companys risk management
framework is intended to ensure that risks are identified in a timely manner. We have
implemented an integrated risk management framework to identify, assess, prioritize,
manage/ mitigate, monitor and communicate the risks across the company. These issues are
resolved at the level of Board of Directors.
TALENT MANAGEMENT
Our employees continue to be the Backbone of success in all our endeavors. During the
year, TLPL always believe in the concept of human empowerment and continued with its focus
on developing the capabilities of its workforce even further through several HR
initiatives. We have bolstered our talent recruitment drives to meet out growing business
needs. Steps have been taken to meet the challenges of retention, skill upgradation,
remuneration and the career aspirations of talent on TLPLs rolls. In the present critic!
situation this task is having supreme importance. We are confident that the measures now
being taken by TLPL will enhance the effectiveness of its talent management initiatives.
REWARDS AND RECOGNITION
Rewards and Recognition program was initiated and Every year along with annual
increments, employees are rewarded on completion of their service for 5 years, 10 years,
15 years, 20 years and 25 years in TLPL. The Reward and Recognition program has had a very
positive impact on colleagues to be a strong motivational input.
CORPORATE SOCIAL RESPONSIBILITY
Good governance demands adherence of social responsibility coupled with creation of
value in the larger interest of the general public. Corporate Social Responsibility forms
an integral part of TLPLs corporate principles and business philosophy. TLPLs CSR
function is led by the vision to enrich lives to create a healthy and a happier world and
We are Committed to being a socially responsible organization. As regards environment
care, TLPL continued to maintain well designed effluent treatment plants at its factories.
TLPL regularly undertakes various innovative measures to conserve energy, reduce wastage
and optimize consumption.
HEALTH & SAFETY POLICY
The environmental policy of your Company emphasizes at being a caring company, which
shall protect and promote the environment by complying with up applicable environmental
regulations and preventing pollution in all its operations. TLPL has kept up high
standards of occupational health and safety practices at all its manufacturing units. TLPL
continuously reviews safety measures at its premises all over India. No efforts have been
spared to ensure safety in the operation of the Plants, to promote health and protect the
environment. Health of the employees is continuously monitored and environment improvement
measures in and around the Plant area have been given due care and attention. TLPL has in
place Occupational Health and Safety Policy which focuses on People, Technology and
Facilities supported by Management commitment as the prime driver.
FINANCIAL PERFORMANCE
Performance of TLPL during the financial year 2013- 14 was severely affected due to
liquidity crunch and due to inability of TLPL to infuse additional funds. As a cumulative
effect of all these factors TLPL could not honour its financial commitments in terms of
servicing of interest and repayment of loans. Bankers of TLPL classified its account as
NPA and have initiated legal proceedings for the recovery of their dues.
Management of TLPL is making efforts to review the present Situation.
Management has taken in principal decision to disposes off certain non-core assets and
accordingly negotiations are at advanced stage. Management is identifying some strategic
investor who will infuse funds in the company by way of equity. Management is taking
several steps to cut the expenses and to trimme its size without affecting the performance
of the Company. On these factors management is of view that it continues to operate as a
going concern and have ability to fully meet its financial obligations.
Financial Highlights
Consolidated Sales/Income from operations (Net) stood at Rs. 3150.44 Lacs as compared
to Rs. 33839.49 Lacs in the previous year, registering a decrease of 91%. Standalone
Sales/Income from operations (Net) stood at Rs.3150.44 Lacs as compared to Rs. 33749.98
Lacs in the previous year, registering a decrease of 91%.
INTERNATIONAL BUSINESS DIVISION (IBD)
Due to acute liqidity crunch the performance of this division has been severely
affected. TLPL has established good network of its brands in SeveraI countries. This
division has good potential. With infusion of funds the performance of this division will
improve substantially. Efforts are being made to make available required funds to this
division.
INTERNAL CONTROL SYSTEMS
The Companys Internal Control systems complement the nature and size of the business.
Internal Controls have been designed to prevent fraud and misuse of Companys resources
protecting in turn shareholder interest. The internal audit team constantly monitors the
controls and any feedback, whether positive or negative is communicated directly to the
management. All the fixed assets, finished goods, semi-finished goods, raw materials,
packing materials and other goods and assets of the Company lying at different locations
and in-transit have been insured against fire, burglary, transit and allied risks. The
internal control systems are further supplemented by internal audit carried out by an
independent firm of Chartered Accountants and periodical review by management. The Audit
Committee of the Board addresses issues raised by Internal Auditors and Statutory
Auditors.
CAUTIONARY STATEMENT
Statement made in the Management Discussion &Analysis describing the Companys
objectives, projections, estimates, expectations may be "Forward-looking
statements" within the meaning of applicable securities laws & regulations.
Actual results could differ from those expressed or implied. Important factors that could
make a difference to the Companys operations include economic conditions affecting demand
supply and price conditions in the domestic & overseas markets in which the company
operates, changes in the government regulations, tax laws & other statutes & other
incidental factors
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