1.

Cash Credit

Cash Credit is short term loan given by banks to companies to finance their requirements. It
is a short term loan and CC account has to be renew every year, it is granted on year to year
basis, it is not perpetual in nature. It is provide to fulfil day to day working expenses of a
company.

CC is given against the current assets of the company such as raw materials, work in
progress, finished goods, receivables etc. Withdrawal of money is not limited to balance in
company’s cash credit account but by a borrowing limit determined by the creditworthiness
of the company. A company can withdraw funds up to its established borrowing limit.

Bank assesses the company’s needs by credit appraisal system and limit is sanctioned which
is valid for 1 year. Company can withdraw amount from account as and when they want in
cash or in form of payment.

Credit limit is supposed to be equal to working capital requirement of a company less margin
funded by company itself. In Cash Credit Account Company has to give % margin amount to
bank for example, if borrowing limit for company is 50,00,000 and there is 20% margin by
bank then company has to give 20% of 50,00,000 that is 10,00,000 to the bank.

Interest is charged on amount utilized and not sanctioned. Interest payments made are tax-
deductible and, thus, reduce the overall tax burden on the company. It is repayable on
demand that is if the bank is not satisfied by company bank can ask for money back. When
value of assets coms down then, limit is also reduces which is called lowering of drawing
power. But even if value of goods goes up the limits stays same it won’t go above sanctioned
limit.

2. Pharmexcil

Pharmexcil is the statutory body for the promotion of pharmaceutical exports from India.
Pharmaceuticals Export Promotion Council (PHARMEXCIL) has been set up on
12/05/2004. It is the sole agency to issue Registration cum Membership Certificate (RCMCs)
to all Pharma exporters. 

The activities of the Pharmexcil are administered by Committee of Administration consisting

of representatives from Pharma Industry and National Pharma Associations like Indian Drug
Manufacturers' Association (IDMA), Bulk Drug Manufacturers Association India (BDMA),
Indian Pharmaceutical Association (IPA),  Ayurvedic Drug Manufacturers association
(ADMA) &Association of Biotechnology Led Enterprises (ABLE) and Officials from
different departments such as Department of Biotechnology, Ministry of Health , Govt. of
India etc.

Every exporter of Pharmaceutical Products is required to have valid Registration-cum-

Membership Certificate issued by Pharmexcil as per the guidelines issued by Directorate
General of Foreign Trade (DGFT).
Benefits of becoming Pharmexcil Member:
The Council help its members in many ways. It not only provides necessary trade
information and statistics but also helps companies grow technologically and financially.
Benefits include:

 Members of the Council can have the benefits of the buyer-seller meets arranged in India
or abroad.
 Marketing Development Assistance (MDA) and Market Access Initiative (MAI) schemes
run by the government of India act as a catalyst for promoting exports of pharmaceutical
companies in new markets. A Member partner can avail benefits of marketing initiatives,
market research, assistance in finding buyer/sellers in a new market
 An RCMC for pharmaceutical companies means that the registered company can get a
Certificate of Origin, if it meets certain quality criteria.
 Trade Enquiries from abroad are circulated to the members
 Interactive Sessions organized or supported by the Council on export-related issues.
 PHARMEXCIL works with the Government in evaluating and framing policies for
Pharmaceutical Exports
 Members have inherited credibility while they are applying for loans, working capital
loans, trade finance, or export credit billing

To become the member of Pharmexcil Application form is to be filled online. One copy of
the application form and three copies of RCMC duly signed and putting company’s seal
should be sent to Pharmexcil along with all required documents.

Documents are as follows:

 Large Scale Manufacturer: Import Export Code, PAN Card, Industrial License, Drug
License, Brief Profile of the Company, along with brochure. 

 Small Scale Manufacturer: Import Export Code, PAN Card, SSI Permanent Registration,
Drug License, Brief Profile of the Company, along with brochure. 

 Merchant Exporter: Import Export Code, PAN Card, Drug License, Brief Profile of the
Company, along with brochure.

Fees for RCMC:

The fees are to be paid while submitting the application form along with other necessary
documents. It can be a Demand Draft drawn in favour of “Pharmaceutical Export Promotion
Council of India” payable at Hyderabad or Mumbai, or it can be sent via NEFT/RTGS

S. No. Category of Membership Fee Entrance Fee GST 18% Total

Members
1. Large Scale Rs. 36,000/- p.a. Rs.18,000/- 9720/- Rs.
Manufacturer 63,720 /-
2. Small Scale Rs. 10,000/- p.a. Rs. 5000 /- 2700 /- Rs.
Manufacturer 17,700 /-
3. Merchant Rs. 12,000/- p.a. Rs. 6000/- 3240 /- Rs.
Exporter 21,240 /-
3. Merchant Exporters

A merchant exporter is a person who is involved in trading activity and exporting. They do
not have a manufacturing unit. They buy goods from a manufacturer-exporter and then ship
them to foreign customers.

Under GST, where a supplier is located in India, and the place of supply is outside India, it is
treated as an inter-state supply. Merchant exports are liable to GST and are compulsorily
required to obtain registration under GST.

There are two alternatives available:

 Make an export under bond/LUT, and then the unutilised input tax credit can be claimed
as a refund.
 Make an export by paying off IGST and then claim a refund of the same. But, this option
is only available if the exporter has not opted for the Special Relief Scheme of buying
goods at 0.1% GST.

Licenses required being a Pharma Merchant Exporter.

Only registered pharmaceutical companies can export medicines from India as per our

Foreign Trade Policy. First and foremost, the company must register with the Director-
General of Foreign Trade and apply for an Import Export Code. It should also have Drug
license number, Export Permit and GST identification number.

Other documents include:

1. Company PAN number
2. Incorporation Certificate
3. Bank account statement and other financial documents
4. Bankers Certificate and other customs documents 
5. IEC Number 
6. Indian Trade Classification (HS) of the product
7. Proof of ownership of business premises or rental agreement 
8. Cancelled cheque 
9. WHO: GMP certification
10. Dossier containing the following details:

 Product details
 Approved generic names
 Strength per dosage 
 Dosage form
 Visual description 
 Details regarding the packaging 
 List of countries in which the product has been approved, rejected and withdrawn 
 List of all active pharmaceutical ingredients with their properties 
 Sites of manufacture and method of synthesis
 Stability testing
 Efficacy and safety
4. Global territory Segmentation:

Pharmaceutical companies create a territory for each representative. They’re told where to go
and how often they should go. This is called Territory Alignment. This process is the most
effective way to cover the most territory and ensure that doctors are communicated. By doing
this, the territory alignment helps the pharmaceutical representatives see which doctors they
need to visit.

Geographic Segmentation:

 This is the most common type of Segmentation used in pharmaceutical companies

because it can reduce travel time and travel expenses.
 With this pharmaceutical representatives are assigned doctors based on where they are
geographical.
 Depending on how big the company is, how many representatives there are, and doctors
needed to be seen, alignment could be grouped by anything from region, state, country, or
postal code.

Global territory Segmentation in Pharma sector can be done as below:

1. North America
o U.S.
o Canada
o Mexico
2. Europe
o Germany
o France
o UK
o Italy
o Spain
o Rest of Europe
3. Asia-Pacific
o Japan
o China
o Australia
o India
o South Korea
o Rest of Asia-Pacific
4. LAMEA (Latin America, Middle East and African)
o Brazil
o Saudi Arabia
o South Africa
o Rest of LAMEA

5. Business Models in Pharmaceutical.