Tonira Pharma Ltd merged Management Discussions

TONIRA PHARMA LIMITED ANNUAL REPORT 2010-2011 MANAGEMENT DISCUSSION AND ANALYSIS Industry Scenario and Developments: Indian Pharmaceutical Industry is one of the fast growing sector of the Indian Economy clocking double digit growth consistently over the few years. India is preferred cost effective manufacturing location for pharmaceuticals. Comparatively low cost of Active Pharmaceuticals Ingredients (APIs), robust manufacturing capabilities, existence of regulatory approved manufacturing facilities for APIs and formulations and availability of abundant skilled manpower are the main driving factors for healthy growth of Indian pharma industry. For Indian API manufacturers, opportunities are present in two forms -one export of non patented APIs to regulated market of US, Europe and Japan and another the contract manufacturing of patent-protected APIs for patent/license holders. Introduction: Tonira Pharma Limited is a Star Export House company engaged in manufacturing and marketing of Active Pharmaceutical Ingredients (APIs). The Companys manufacturing units situated at Nandesari and Ankleshwar are inspected and approved by PMDA Japan. With the recent US FDA approval of the Nandesari manufacturing unit, the Company will now have access to regulated markets of US for its APIs. SWOT Analysis: Strengths: 1. Tonira is a quality producer of APIs and Intermediates for its customers as per their specific requirements. 2. Its Nandesari manufacturing unit is USFDA approved and ISO 9002 certified. Both Nandesari and Ankleshwar manufacturing units are PMDA, Japan accredited. 3. Tonira has a state-of-the-art R & D Center at Nandesari, Dist. Vadodara. The Center is engaged in developing manufacturing process for newer APIs through innovative and cost effective processes. 4. Tonira has capability to provide Contract Research and Manufacturing services to its customers. 5. The Company has also filed few Drug Master Files in CTD format. Risk and Concerns: The growing competition, foreign exchange fluctuation, increasing energy and solvent costs are few causes of concern. Opportunities and threats: All pharmaceutical companies which have succeeded in achieving manufacturing excellence over the years and have developed cost-effective synthesis routes have scope for partnering with other companies for contract manufacturing and research services i.e. CRAMS. With the state-of the art R&D Center and regulatory compliant manufacturing facilities, the Company is geared up to encash the business opportunities available in this space. Internal Control and its Adequacy: For effective inter departmental communications and follow up process, networks for communication have been installed. The system of internal control provides updated accounting records and the necessary financial information essential for running business. The Company has a clearly defined organization structure and delegation authority. Sufficient control is exercised through monthly, quarterly and annual business reviews by the management. Financials: The detailed financial analysis of the Companys operations for the year is given in the Directors Report and therefore, the same is not repeated. Human Resources: Human Resource being the most significant of the factors contributing to the success of the Company in achieving its objectives. The Company has been following a proactive policy for Human Resource Management. Suitably qualified and trained team has been engaged and continuously developed to facilitate smooth and efficient functioning of all departments. New recruitments have been made to keep pace with increasing requirement of skilled and experienced technical personnel for new projects and expansion. Initiatives to develop a team capable of functioning in ever changing technology have been taken. The Company has total 151 Employees as of 31st March, 2011. Outlook and Future Strategy: With the new DMFs getting filed and manufacturing facilities approved by PMDA Japan and USFDA, the Company is confident of good growth in exports in the coming year. The Company is focusing on core business of manufacturing and marketing of APIs and Intermediates. Research and Development has been put on fast track for cost competitiveness and to comply with the requirements of regulatory market. Cost rationalization and management control at all levels are practiced to ensure operational efficiencies in the sphere of manufacturing and marketing. Armed with strong resource base and a vision to be a leading manufacturer of APIs in selected therapeutic areas, Tonira is poised to unleash its true potentials to meet the challenges and exploit the growth opportunities ahead. Cautionary Statement: Statement in the Management Discussion and Analysis describing the Companys objectives, projections, expectations and estimates regarding future performance may be forward looking statements and are based on currently available information and current scenario. The management believes these to be true to the best of its knowledge at the time of preparation of this report. However, these statements are subject to certain future events and uncertainties which could cause actual results to differ materially from those that may be indicated in such statements.