PROJECT REPORT ON

DETAILED ANALYSIS OF A
MANUFACTURING ORGANISATION IN
RELATION TO ELDER
PHARMACEUTICALS LIMITED.

1
CONTENTS

S No Topic Page
1 Indian Pharmaceutical Market: An Overview 1
2 Introduction: Elder Pharmaceuticals Limited 2
3 History of the Company 2
4 Profile Of the Products 5
5 Mission, Objectives and Strategies of Elder 9
Pharmaceuticals Limited
Mission, Vision and Values 9
Strategic Objectives 9
Business Strategies 10
6 SWOT analysis 11
7 Significant factors for Success 13
8 Manpower Planning 17
9 Policies and Procedures Followed 18
10 Training Measures of Elder Pharmaceuticals Ltd 21
11 Product Promotional Measures 24
12 Key Result Areas and Activities of the Organization 25
13 HRD Measures 26
14 Career Planning and Promotion Policy of 27
Employees
15 Performance Appraisal System 27
16 System of Accounting Followed 28
17 Financial Highlights of the organization 28
18 Organization Design 30
19 Organisation Structure 32
20 Outlook and Future Growth Drivers 33
21 System followed for purchase of materials 34
22 Factory Layout 35
23 Scope For MBA’s In The Organisation 36
24 Conclusion 37
25 Annexure 38
26 Bibliography

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 Executive Summary

1. OBJECTIVES- To gain a clear knowledge of what is an organization and

what are the major factors that lead to structuring of the organization and
how a good organization structure will enable in achieving the objectives
effectively and efficiently.

2. METHODOLOGY- The study was done after conducting a visit to Elder

Pharmaceuticals Ltd. Herein appointments were taken with the CFO, HR-
VP, Projects- VP, Marketing- VP, Corporate Business Strategy- AGM,
Finance Manager, Training Executives. They were interviewed and their
opinions were recorded. Annual reports and HR reports were also
studied.

3. Limitations- The complete working of Elder Pharmaceuticals Ltd is

beyond the scope of this study as the organization has complex operations
and it is indeed difficult to even understand the method of work. A
sincere effort has been made to comprehensively present the working of a
manufacturing organization.

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 1. Indian Pharmaceutical Market: An Overview

The pharmaceutical industry is expanding worldwide. For some years now, it

has been benefiting from the particular dynamics of the Asian economies
growing as purchasers and producers. Indian Pharmaceutical Industry is poised
to touch US $20Bn by 2015, making it the 10th largest market in the world. Thanks
to low costs, qualified staff and extensive production and research units, India is
becoming more and more of a major pharmaceutical location. Among Asian
countries, India’s pharmaceuticals industry ranks fourth at 8%, but has lost
market share to China, as sales growth there has been nearly twice as high and
sales volume nearly four times higher than in India.
India’s pharmaceuticals industry currently comprises about 20,000 licensed
companies employing approx. 5,00,000 people. The Indian Pharma industry
produces a total of about 70,000 different drugs, which is higher than the number
produced in Germany (60,000). Affordability and medical infrastructure will
drive 75% of demand growth. Demand in India is growing markedly due to
rising population figures, the increasing number of old people and the
development of incomes. As a production location, the country is benefiting from
its wage cost advantages over western competitors in term of production of
medicines. Going by the current scenario, India is expected to see drugs sales rise
by an annual 8% to nearly 20Bn Euros between 2006 and 2015. This growth rate
is higher than that seen for Germany (+5% p.a) and the entire world (+6%).
The generic market is expected to capture benefits of patent expiry of a value of
over US $16Bn. Patents for high turnover drugs with a volume of 100Bn Euros
will expire in the next few years. Of these drugs, roughly Indian companies will
likely produce one-third. The generics market will grow in both the developed
countries and in the emerging markets. Most vital medicines are already exempt
from patent protection. The manufacture of generic drugs in that segment is
growing strongly. Growth will arise due to focus on specialty and niche products
through drug discovery and CRAMS. Generics will continue to dominate and
10% of the Indian market is likely to be patent protected by 2015. Anti-infective
and gastro-intestinal will continue to comprise half of the market. 140 Mio
Indians will move above the poverty line in the next decade. R&D spent of
Indian pharmaceutical companies has been steadily increasing in the last 3 years.
The growth of Indian companies in the International market space has led to
great opportunities in CRAMS.

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 2. Introduction: Elder Pharmaceuticals Limited

Elder Pharmaceuticals Limited (Elder Pharma) is one of the fast growing

pharmaceutical companies that:

 Is engaged in:
o Manufacturing and marketing of a wide range of pharmaceutical
products developed in-house.
o Marketing and manufacturing of diverse products through in-
licensing arrangements with international pharmaceutical
companies.
o Manufacturing of active pharmaceutical ingredients (APIs)

 Has manufacturing facilities in Nerul, Pawane and Patalganga (all in the

state of Maharashtra). At Sela Qui near Deharadun in Uttarakhand and at
Paonta Sahib in Himachal Pradesh. While Patalganga plant is US FDA
compliant, the one at Nerul is WHO approved. All the Company’s plants
conform to and follow, the most stringent quality control standards
recommended as per GMP guidelines.
 Is headquartered in Mumbai, with zonal offices in Chennai, Kolkata and
New Delhi and sales depots in almost every state in the country.
 Has an export house status, with shipments being made to African and
South Asian Countries.
 Has its shares listed on the Mumbai and National stock exchanges and
enjoys a market capitalization of Rs 750 crs (NSE) as on 31st March 2008.
 Is equipped with an international division that spearheads the Company’s
foray into global markets, with an existing global penetration of more than
35 countries.

3. History of the Company

Mr. Jagdish Saxena, 69, Managing Director of the Rs. 553 crore (Rs. 5525 billion)
company calls himself as an entrepreneur by accident. In 1988, when Apeejay
group decided to close down its pharmaceutical division, JS who had joined
them as a Marketing Manager and then went on to become the director and then
Managing Director, found himself in a position where he could either stand by as
400-odd employees lost their jobs or could venture into the treacherous waters of
entrepreneurship.

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With an existing skilled pool of pharmaceutical sales and marketing
professionals under his care, he decided to take a gigantic step of starting-up his
own venture. At his peril, he invested his entire personal savings & with loans
from banks laid the foundation for what today, is among the top 30
pharmaceutical companies in India – Elder Pharmaceuticals Ltd.
A belief to stand on: That point in time is comparable to standing on sinking
sand – for himself, his family and his employees. From having a stable monthly
income and amenities, Mr. Jagdish Saxena had to rely on his grit; perseverance
and vision to provide the wind in the sails for this newly founded company.
When registering the company, all suggested names were rejected. On a trip to
Australia, Mr. J. Saxena happened to come across a passing truck with the name
Elder Food Production and thus on returning, Elder Pharmaceuticals was
registered.
The initial phase was hard and trying and with every passing month, the future
of the company seemed unpredictable and daunting. The real break-through
came within the first year, when a large order from Russia set the ball rolling.
A glimpse into Mr. Jagdish Saxena’s vision: It was his visionary ingenuity itself
that made Shelcal, the brand it is today. He chose to launch a naturally sourced
calcium supplement in a then small but growing market and not just as a mere
OTC supplement but as a prescriptive treatment for post-menopausal
osteoporosis. In addition, the product was priced 10 times higher than available
calcium supplements in the market. Everyone assured it to be a sure failure and a
grave error on his part. But in a year’s time, given the product’s therapeutic
potential and in conjunction with strategic marketing efforts, Shelcal made a
turnover of Rs. 6 crore (Rs. 60 million). Today, Shelcal is the market leader in
calcium supplements and a brand most prescribed in this therapeutic category
by doctors All India.

3.1. Presence:

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Elder, which has it’s headquarter in Mumbai, is ably supported by branch offices
in Chennai, Kolkata and New Delhi.

 Principal Facilities: The Company has its main operations in India and
its principal facilities include six manufacturing units and one head
office. Refer appendix (Table 1).

ELDER OVER THE YEARS:

1989
 Factory commissioned in June.

1991
 R&D recognition from the government of India.

1994
 Export house recognition.

 Tie up with Haw Par, Singapore.

1998
 Tie up with Fujisawa.

2000
 IPO in February.

 Tie up with Paul Hartmann.

2003
 Patalganga Bulk Drug plant commissioned

2007
 I Forbes Asia Best Under Million Company Award

2008
 One of India’s fastest growing pharmaceutical companies currently
ranked 29th as per ORG IMS for June 2008.

 Frost & Sullivan Market Leadership Award for Shelcal

4. Profile Of the Products

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With a global sales turnover of Rs.5 Bn, Elder Pharma offers bulk drugs and
pharmaceuticals. It also offers medical devices and instrumentation;
OTC/consumer products, cardiac therapy products and wound care products.
Elder Pharma has approximate 260-275 formulation products in the market,
addressing the growing needs in women healthcare, nutraceuticals (niche
segments), cardiovascular, cerebro-vascular, pain management and anti-bacterial
segments.

Product Profile- Therapeutic Segments

1) Women Healthcare: The total women healthcare market is estimated to be

roughly around Rs. 3,500 crs. Most drug companies concentrate on
reproductive illnesses with no special focus on women’s health in general.
Elder Pharma offers a plethora of products addressing ‘Complete
Women’s Healthcare’. Elder Pharma enjoys a wide therapeutic presence,
with products addressing PMS to infertility to menopause to osteoporosis
to hormonal imbalance. The range focuses on multifold indications in
pregnancy, lactation, vitamin supplements and hormones. The women’s
healthcare range of products accounted for about 30% of the Company’s
revenue in 2007-2008. This segment includes SHELCAL, DEVIRY, B-
LONG, and CARNITOR.

 SHELCAL- It is the No.1 Calcium Supplement for the last

12years. Positioned for prevention of Osteoporosis, this was a
new segment created by Elder. This is the No.1 pharmaceutical
product in Mumbai and Bangalore. It is expected to double
current sales in 5 years because of the increasing awareness of
the importance of calcium in women as well as in men and
growth in rural market. Shelcal Family comprises of Shelcal-250,
Shelcal-500, Shelcal-OS, Shelcal Syrup Megashelcal, and Shelcal-
CT.

2) Anti-Bacterials and Anti-Infectives: The Company’s portfolio comprises

of cephalosporins, aminoglycosides and amoxicillin. These help in the
treatment of range of infections, including several bacterial infections, UTI
and RTI. This segment includes FORMIC, WIDCEF, KEFBACTUM and
CEFTIZOXIME.

 FORMIC RANGE- It is the third generation anti-biotic,

Ceftriaxone and Sulfbactum. It is used for the treatment of
respiratory tract infections (RTI), urinary tract infections (UTI),
pelvic inflammatory disease, skin infections, bacterial
septicemia, bone and joint infections and meningitis. It also

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 supplements wound and pain management portfolio of Elder,
addressing acute therapy areas offering post-operative
infection.

3) Wound Care And Incontinence Segment: The range comprises Hartmann

products addressing a range of wound applications and patients with
weak urinary bladder. As the products are mainly hospital segment in
nature, Elder Pharma focuses on product awareness among doctors in
urban and semi-urban hospitals. This segment includes CHYMORAL
FORTE, SALUTYL OINTMENT, OXOFERIN SOLUTION, BANDAGES
and INCONTINENCE and BURNAID GEL.

 CHYMORAL- This product provides Elder with a strong

presence in wound care management. It is the leading anti-
rheumatic proteolytic enzyme. Its combination with NSAID will
result in growth in new segments.

4) Nutraceuticals: Elder Pharma’s range in this segment comprises vitamin-

to-vitamin combination specialized products for diabetes, cardiac
aliments, arthritis, chronic renal failure and neurological problems.
Nutraceuticals products contributed about 12-14% of the Company’s
revenue during the year under review. This segment includes ELDERVIT,
I-VIT, IMBRAN, and SAMPURE.

 ELDERVIT- It is a combination of Omega-3 fatty acids, anti-

oxidant, Vitamin B6, B12 and folic acid and is prescribed in
diabetes, cardiovascular complications, degenerative diseased
conditions, post surgery, stress and ageing. It provides Elder
with a strong presence in Combination vitamins segment of
Neutraceuticals.

5) Cardiovascular and Diabetology: Elder Pharma’s products address

growth in the fastest growing global therapeutic segments. Elder Pharma
has products addressing therapeutic categories like anti-histamine, anti-
spasmodic, nicotine replacement therapy, respiratory and incontinence.
This segment includes CARNITOR, TANATRIL, HIBOR and
PHYTOMEGA.

 CARNITOR- It is a “Metabolic Therapy” product for the

treatment of many fatal disorders like cardiovascular disorders,
post-dialysis complication, primary and secondary deficiency of
carnitine. There is an increasing awareness and acceptance of
the ‘metabolic therapy’ for cardiovascular diseases amongst
cardiologists and physicians.

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  HIBOR- It is an anti-thrombotic LMW Heparin, in licensed
from Laboratories Farmaceuticos Rovi S.A. of Spain. It is
prescribed in the prevention and treatment of thrombo-embolic
venous diseases like deep vein thrombosis and pulmonary
embolism.
 PHYTOMEGA- It is a comprehensive cholesterol reducing,
lipid management product and was introduced through an
alliance with Enzymotec, Israel. This product has strengthened
Elder’s presence in CVD therapeutic segment.

6) Wound and Pain management: Elder Pharma’s portfolio comprises

Chymoral range, gastro-intestinal range and anti-bacterial products,
which address acute therapy areas offering surgeons a complete post
operative treatment portfolio. This portfolio is supplemented by infection
control products during surgeries, targeted at hospital acquired infection
prevention. This segment includes TANTUM-Gel, Oral Rinse, ARTODAR,
and DICLOFENAC ORAL RINSE.

7) Neuro Drugs: includes SOMAZINA.

8) Urology, Diuretics: includes AMIFRU.

9) Consumer Products: includes BLISTEX LIP CARE PRODUCTS, TIGER

PRODUCT RANGE, FOLTENE and SINOMARIN.

10) Medical Equipments: includes products like OXYGEN

CONCENTRATOR, CPAP, BIPAP, NEBULISERS, SPIROMETER, PFT
LAB, CAPNOGRAPH, POLYSOMNOGRAPHY SYSTEM, NON
INVASIVE VENTILATOR, and PLUSE OXIMETER.

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MAIN BRANDS MKT SHARE CURRENT SALES COMMENTS

SHELCAL 33% Rs 808 m No.1 Calcium Supplement

CHYMORAL 80% Rs 296 m No.1 Wound Healing Enzyme

ELDERVIT 41% Rs 170 m No.1 Vit B12 injectable

SOMAZINA 26% Rs 126 m Leading Neuroprotective

AMIFRU 59% Rs 97 m Leading Anti Hypertension Product

CARNITOR 40% Rs101 m Leading Cardiovascular Product

FORMIC 3% Rs 79 m Anti Bacterial

B-LONG 65% Rs 65 m Nutritional Supplement

ENZAR 7% Rs 74 m Enzyme Solid

DEVIRY 37% Rs 54 m Leading Medroxyprogesterone

Acetate (Progestin) Product

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5. Mission, Objectives and Strategies of Elder Pharmaceuticals
Limited

 Mission

To occupy a prominent place in National and International Health Care

arena, with focus on research and global collaborations.

 Vision

To play a front ranking role in curing patients through processes and

partnerships that result in the right product for consumers at the right price
and to become Rs 10,000 Mn Company by year 2010.

 Values
 Respect for people
 Empowerment
 Team Spirit
 Commitment to the organizational goals
 Quality Performance

 Strategic objectives

Elder has been a pioneer in developing and building its own brands with the
objective of achieving market leadership in various niche therapeutic
segments. The Company has today established many strong brands. Some of
them are AMIFRU, I-VIT, B-LONG, DEVIRY, SHELCAL, ELDERVIT,
ENZAR FORTE and CARNITOR and life style therapy market. The
Company’s main objectives are:

i) Domestic Markets

 To maintain it’s dominant market position for its leading brands.

 To expand these leading brands with new products within these
therapeutic segments.
 To expand the Company’s bulk drug/formulation production
capacity in readiness to capitalize on an anticipated increase in
demand for API and Intermediates from overseas pharmaceutical
companies.
 To develop products for focused segments like women’s health
care, dermatology, wound care and pain management,
nutraceuticals and antibiotics.

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  To develop product portfolios through introduction of new
licensed molecules from international alliance partners.
 To get new facilities commissioned at the earliest.

ii) Exports:

 Focus on exports to semi-regulated markets

 Focus on contract manufacturing, primarily through alliance
partners.

Business Strategy

Elder Pharmaceuticals business strategies are as follows:

 To continue to manufacture and market products, which require long-

term prescriptions and have prolonged recalls.
 To introduce and market new molecules and APIs, which complement
each other and generate high value business.
 To expand marketing and sales team to cover the growing semi-urban,
smaller towns and rural areas.
 To improve distributions and logistics for better market penetration and
reach, establishing new export markets, regulated and unregulated,
through new product registration.
 To focus on brand building
 To enter into newer segments with products such as:
 Somazina- neurology drug
 Tobraneg- an anti bacterial drug
 Formic Range of products- Formic and Formic O
 Tanatril- anti hypertensive drug
 Ontac Plus- Muscle Relaxant
 International partnership from marketing to contract manufacturing.
 To have strong domestic presence- prudent combination of manufacturing
distribution network and brands.
 To continue to improve quality, standards and making manufacturing
facilities of international standards and increasing foreign collaborations
and licensing agreements by offering additional outsourcing research and
manufacturing capabilities.

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 6. SWOT Analysis

 Strengths

o New focus on self-developed drugs and contract research and/or

production for Western drug companies, following changes in
India’s drug patents legislation.
o Expansion of capacities by Indian companies, making the country
by and large self-sufficient.
o Growing population: According to UN estimates, the population
total looks set to rise from 1.1 Bn at present to 1.4 Bn in 2020. By
2025, India will probably have overtaken China as the world’s most
populous country. Already today, nearly 60 Mn people in India’s
middle class, with disposable incomes of 3,500 Euros to 17,000
Euros p.a., can afford Western produced medicines. Until 2025 their
number looks set to rise to approx.580 m (+12%p.a), according to
McKinsey estimates.
o Highly skilled work force that enables the Pharma industry to offer
quality products at competitive prices.
o Competitive advantages, such as low wages costs, over traditional
drugs manufacturers in Western industrial countries.
o Patent non-infringing strategy- Elder strictly follows non-
infringement strategy, which will help to leverage established
relationships and enter into in-licensing alliances.
o Widening distribution network- Elder has over 3000 stockists,
which make it a preferred choice in marketing alliances.
o Focus on Growth Segments-
 Women’s Health Care
 Wound Care
 Nutraceuticals
o Focus on high growth lifestyle segments
 Pharmaceuticals products
 FMHG segments.

 Weakness

o With total sector sales of roughly 10 Bn Euros, India commands less

than 2% share in the world’s pharmaceuticals market. This puts the
country in 12th place internationally, even behind Korea, Spain and
Ireland and before Brazil, Belgium and Mexico.
o Indian companies’ strategic reorientation away from generics to
original preparation is still in its infancy, resulting in lower sales
growth and volume.

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 o Shortcomings in infrastructure and insufficient energy supply.

 Opportunities

o Profitable business opportunities in contract production for

international Pharma groups, as a result of availability of sufficient
production capacities following the massive expansion of plants for
generic manufacture.
o Existence of strong incentive to move production for Western firms as
building a pharmaceutical plant in India is about 40% cheaper than in
Europe or the US, and manufacturing costs for pharmaceuticals are
markedly lower.
o In the coming years, Indian drug markers will likely continue to look
to foreign countries to expand their operations. According to PWC,
about half of all larger Indian drug makers are looking to expand
abroad through take-overs, whereas less than 20% of their Chinese
competitors pursue that strategy. Targeted markets are still the US and
Europe.

 Threats

o Competition from western pharmaceutical companies in the field of

patent protected drugs.
o In the course of increasing contract production and low-cost
manufacture of proprietary medicines, exports are expected to receive
a major boost in future. However, competition between Indian firms
and Western drug makers will probably be much fiercer as the
companies from Asia are increasingly seeking to tap the global
markets.

7. Significant Factors For Success

The significant factors for success adopted by Elder Pharmaceuticals Ltd are as
follows:

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# NURTURING HEALTHY GROWTH:
1) Through Strategic Acquisitions
- 51% Acquisition in Biomeda Group of Bulgaria
 Negotiated a 51% stake in Bulgaria’s Biomeda Group for 3.12 Mn
Euros in an all cash deal.
 Biomeda is amongst Bulgaria’s top 10pharmaceuticals distributors
and has a formulation plant for tablets, and the activities presently
generate revenues of 7-10 Mn Euros p.a.

-21% Strategic stake in Neutra Health PLC of UK

 Finalized a 21% strategic stake in Neutra Health PLC, an AIM listed
company in the United Kingdom. This entails an investment of
Sterling Pounds 5.63 Mn (apporx. Rs46-47crs) in respect of
351,97,026 equity shares having a face value of 10 pence at 16 pence
per share.
 Neutra Health PLC has three subsidiaries which market and
distribute a range of neutraceuticals products, such as vitamins,
specialized health supplements, over the counter medicines and ‘
detox in a box’ health treatments, as well as Travel Guard range of
travel related health products.
 Neutra Health has a turnover of 23 Mn Sterling Pounds and a
market capitalization of close to 16.8 Mn Sterling Pounds as at 31 st
December 2007.

2) Through In-licensing Arrangements

-With Cymbiotics Inc, USA
 Entered into an agreement with Cymbiotics, California, U based bio
pharma company for in-licensing arrangement for marketing six of
their patented pharmaceuticals formulations for diabetes, chronic
pain, skin care, etc.
 Under the arrangements, the Company will market six patented of
this California based bio pharma company.

-With Gnosis, Italy

 Entered into licensing arrangements with an Italy based research
oriented biotech company by the name Gnosis S.p.a, for marketing
and distribution of an anti-arthritic product, S-Adenosyl-L-
Methionine Disulphatep-Toluensulfonate (SAMe) in India.
Additionally Gnosis has the following products in their portfolio,
which have been included in the licensing arrangements:
o Anti- osteoporotic
o Anti- oxidant

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 o Cardiac care.

3) Through Launch Of New Products/ Brands

-Launch of Phytomega, a soft gelatin capsule, in the domestic market to

reduce the lipid levels in the body as well as triglycerides.
 A patented conjugation of Phytosterols, Eicoicosapentaenoic Acid,
Docosahexaenoic Acid, is marketed under license from leading
Biotech firm Enzymotec, Israel, with the brand name “Phytomega”.
 Launched in India in February 2008, it has an existing market size is
Rs700+ crs, which is primarily covered by Elder Pharma’s indirect
competitors.
 This product has been given a new ingredient status by USFDA
and also won the Excellence Award for its efficacy, safety,
innovativeness, and scientific merit.
o As a part of therapeutic lifestyle changes in cases with risk
factors for coronary heart disease, diabetes, hypertension,
obesity, metabolic syndrome and symptomatic carotid artery
disease.
o As an adjunct to statin or fibrate therapy

-Launch of Shelcal CT for patients with severe established osteoporosis

with a pre-existing fracturez.
 Launched in January 2008, it is indicated for patients with severe
established osteoporosis with a pre-existing fracture. Such a condition
is widely seen in elderly or menopausal women, where the concern is
the decreased levels of Calcitriol.
 Calcitriol is the active form of Vitamin D, which is required absorption
of calcium and there is sufficient evidence to prove that in old age,
Calcitriol levels decreased; hence the need to supplement.
 The total anti-osteoporotic market is Rs 180 crs, growing at 27%, while
the Calcitriol segment is worth Rs 114 crs, growing at 36%.

-Launch of Hibor (Bemiparin Sodium) thromboembolic diseases, deep

vein thrombosis, prevention of clotting during hemodialysis
 Launched in January 2008, it is a second generation low-molecular
weight heparin which is indicated for:
o Prophylaxis of venous thromboembolic diseases
o Treatment of deep vein thrombosis

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 o Prevention of clotting during hemodialysis
 It is a research product of M/s. Rovi Pharmaceuticals Laboratories,
Spain and has been licensed to Elder Pharma to be marketed in India.
 Hibor has a global acceptance:
o Bemiparin Sodium is available in 32 countries worldwide
o 2.5 Mn patients exposed to Bemiparin Sodium worldwide
o More than 10,000 patients worldwide, enrolled in Bemiparin
Sodium clinical stidies
 The total market for Hibor is Rs 120 crs growing at 27%, excluding the
hospital segment.

4) Through Geographical Expansion

 Elder Pharma currently exports its products to countries like Nigeria,

Vietnam, Mexico, Mauritius, Sri Lanka and Brazil.
 With investment in Neutra Health (UK), Biomeda (Bulgaria), Vincom
Pharmaceuticals (Ghana), and Elder Universal (Nepal), the Company
aims to enter the semi-regulated markets.
 Besides domestic formulation business, Elder Pharma exports bulk
drugs and formulations to CIS, African and SAARC
 Elder has become a preferred manufacturing and marketing partner
for foreign firms, given its strong sales force of over 1,600 people
spread across the country, and wide network of 31 C and F agents and
over 3,000 stockists.
 The Company has plans to strengthen its presence in major regulated
markets with a focus on Europe, Asia Pacific and Latin America, for
which it is in talks with various pharmaceutical firms for possible joint
marketing tie-ups across various geographies.
 It further plans to enter newer therapies and ramping up of marketing
operations.

5) Through Awards and Accolades

- Elder received numerous awards during 2007-08 fir its excellent
performance in various spheres. These includes:
 2007- IMM Award for Excellence as Top Organization
 2007- Forbes Asia Best Under Pillion Company Award
 2008- Amity Corporate Excellence Award
 2008- Frost and Sullivan Market Leadership Award for “Shelcal”

Elder Pharma has been named in the most recent Forbes list of ‘Asia’s 200 Best
under a billion’, having been honoured in this list for its consistent profitability
and growth over a period of three years.

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 6) Elder Pharmaceuticals not only focuses on the customer relationship but
also gives equal importance to the employee needs and wants. Elder
pharma provides it’s employees with various facilities and benefits like
Leave Travel Allowance/ Reimbursements, Medical Reimbursements,
bonus, annual health check up, Elder Information Center (library) etc. This
encourages the employee to be loyal to the Company, which results in the
progress of the company.

# NURTURING HEALTHY PRODUCT PORTFOLIO

With a global sales turnover of Rs.5 Bn, Elder Pharma offers bulk drugs and
pharmaceuticals. It also offers medical devices and instrumentation;
OTC/consumer products, cardiac therapy products and wound care products.
Elder Pharma has approximate 260-275 formulation products in the market,
addressing the growing needs in women healthcare, nutraceuticals (niche
segments), cardiovascular, cerebro-vascular, pain management and anti-bacterial
segments.

# NURTURING HEALTHY SEGMENT-WISE PRESENCE

Elder Pharmaceuticals Ltd has a sizeable focused portfolio of ethical brands and
growth driving brands in FMHG segment. This has helped Elder Pharma to
create a strong presence in the market and also in brand building. The various
segments and the products it covers are given in the appendix (Table 2).

8. Manpower Planning

Policy Administration Human Resources

Purpose:

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The purpose of this policy is to ensure transparency in the recruitment and
joining process. It also tries to ensure that the right person selected for the right
job. This policy covers all the procedures of recruitment and joining at all levels.

Procedure:

Recruitment procedure starts at beginning of the financial year with manpower

budgeting for all levels across the country.

Recruitment:

 A duly approved manpower Requisition form is submitted along with

Role Profile (Refer Appendix) to the H.R. department (the role profile is a
detailed description of the job position). This detailed job description
helps H.R. to hunt the right person for the right job.
 HR has a data bank of resumes for all levels. After exhausting all the
resumes from the data bank, HR Shares the job opening to outside
agencies like:
 Job Sites
 Placement Consultants
 Advertisements
 The New profiles received are then short listed and sent to the user
department.
 The profiles are then thoroughly screened by the hiring department and
sent back to HR for scheduling.
 HR schedules the candidates, and an interview panel consisting of Hiring
Manager, HR and HOD (if the level requires) meets the candidates, and
selects the right person.
 The short listed candidate needs to provide a copy of his/her pay slip, so
as to match the existing salary.
 An offer letter is exchanged with the candidate and date of joining is
requested not later than one month from the date of offer letter issued.

9. Policies and Procedures Followed

i) Dress Code Policy

Objective
 To portray an image of PROFESSIONALISM

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  To maintain decorum in the office

Applicability
 This policy is applicable to all employees.

Guidelines
All employees are expected to dress professionally in:
Business Formals from Monday to Friday and Smart Casuals (Denims/T-shirts)
on Saturday.

General Information
 Employees who have to interact with clients/vendors/consultants will be
required to wear formal attire even outside the office premises
irrespective of their level and day of the week.
 Slippers, chappals and floaters are not allowed.

MALE EMPLOYEES
- DO’s
 A light coloured shirt (full sleeves recommended), and trousers.
 Need to shave daily.
 Need to wear Tie irrespective of their level.

-DON’Ts
 Floral prints/gaudy coloured shirts/sweat shirts/jogging pants are not
allowed.
 Clothing with inappropriate slogans or artwork is not allowed.

LADY EMPLOYEES
-DO’s
 Formal Indian outfits/saris/salwar kameezes or
 Formal Western outfits/trousers/skirts (knee length)/blouses (need to be
of appropriate length).

-DON’Ts
 Mini skirts, jogging pants, capris/ three-forth, leggings, spaghetti straps,
tube and tank tops are not allowed at all.
All the employees in the Company are expected to adhere to the dress code
policy. The management will take corrective actions if the above code is not
adhered to. This dress code policy is applicable only to those employees who
work in the office. There is a separate dress code policy for the factory workers as
the management provides the workers with uniforms.

ii) Travel Policy

21
Employees are required to get all business travel within and outside Mumbai
pre-authorized by the Department head. All travel Reports are required to be
approved by the respective Department Heads. Employees are required to route
all their bookings of business air tickets. Through the company approved travel
agent via the call coordinator. All travel expenses are required to be accounted
for the Travel Report, which would then be forwarded to the Accounts
Department for reimbursement. Department heads are responsible for reviewing
employee travel expenses and ensuring compliance with the company’s policy.
The purpose of travel and/ or entertainment is required to be fully described.
Description such as “office visit”, “soliciting business”, “calls and meeting”,
“prospecting” and the like are not sufficient. Travel reports duly approved must
be received by the Accounts Department not later than ten working days after
returning from the trip and/or incurring the expenditure. Travel reports
received after the expiry of the period will not be reimbursed, unless valid
reasons for the delay are provided. Travel Report form can be obtained from
each department secretary. The executive committee must approve extraordinary
expenses. Gifts to be given on behalf of the company must be authorized by the
Department head. Expenses incurred on account of alcohol will not be
entertained. In case of unavoidable circumstances and approval from the
Department head/ Head Human Resources is essential.

iii) Recruitment Policy

Policy Administration Human Resources

Purpose:
The purpose of this policy is to ensure transparency in the recruitment and
joining process. It also tries to ensure that the right person selected for the right
job. This policy covers all the procedures of recruitment and joining at all levels.

Procedure:
Recruitment procedure starts at beginning of the financial year with manpower
budgeting for all levels across the country.

Recruitment:

 A duly approved manpower Requisition form is submitted along with

Role Profile (Refer Appendix) to the H.R. department (the role profile is a
detailed description of the job position). This detailed job description
helps H.R. to hunt the right person for the right job.
 HR has a data bank of resumes for all levels. After exhausting all the
resumes from the data bank, HR Shares the job opening to outside
agencies like:

22
  Job Sites
 Placement Consultants
 Advertisements
 The New profiles received are then short listed and sent to the user
department.
 The profiles are then thoroughly screened by the hiring department and
sent back to HR for scheduling.
 HR schedules the candidates, and an interview panel consisting of Hiring
Manager, HR and HOD (if the level requires) meets the candidates, and
selects the right person.
 The short listed candidate needs to provide a copy of his/her pay slip, so
as to match the existing salary.
 An offer letter is exchanged with the candidate and date of joining is
requested not later than one month from the date of offer letter issued.

iv) Quality Policy

It is the vision at Elder Pharmaceuticals Ltd to strive to achieve complete

customer satisfaction at all times. As a manufacturer of pharmaceuticals products
the Company needs to remain amongst the market leaders with respect to the
quality of products and services. The endeavor to provide quality products can
only come through continuous technological development and improvements in
products, processes and services, constant upgradation in techniques and a
trained, motivated and committed workforce. This in turn requires management
and employees to work together as a team, define objectives to support this
quality initiative and continually review the performance to ensure achievement
of all the objectives. The Company has reiterate their strong commitment to
adhere to the requirement of various regulatory norms and standards including
ISO 9001:2000 both in letter and in spirit.

v) Accounting Policy

The Company’s accounts are prepared as per the Generally Accepted Accounting
Principles in India and in accordance with the applicable accounting standards
and the requirements of the Companies Act, 1956. The Company follows the
accrual system of accounting, recognizing income as soon as it earns irrespective
of its time of receipt. The Company is conservative in its interpretation and
application of accounting policies.

vi) Leave Policy

9/10 holidays in a year will be selected out of the list of holidays declared by the
State Government and will be displayed on the Notice board. The management
reserves the right to change the pre-declared holidays. Depending upon the

23
exigencies of work, the management also reserves the right to change the
working hours/ weekly holidays. Elder Pharmaceuticals Ltd have a 5-day work
culture and grants leave for 52 days a year.

10. Training Measures of Elder Pharmaceuticals Ltd

Pharmaceutical industry is dynamic in nature. Therefore, Elder Pharma focuses

on training, as it considers it to be knowledge providing platform required for
the smooth functioning of the organization. The three major segments covered in
a training module are:

# Product Knowledge- product is non-reactive or inert in nature. Product

knowledge covers:
i) Product Therapy and
ii) Disease Management

# Customer Knowledge- customers are reactive in nature. Therefore specialized

training is required to deal with them. Training is provided on the basis of:
i) Qualification
ii) Knowledge
iii) Social behaviour
iv) Specialization

# Market Knowledge- market is neither reactive nor non reactive. It responds

through the behaviour of the economy. Therefore it is essential to provide
information on market and it’s behaviour.

Training department of Elder Pharmaceuticals Ltd focuses on mainly on the

Sales department. Training is provided for three levels of sales officers as given
below:
i) New Recruits/ Employees
ii) First line managers
iii) Senior Sales Officers

Training for the first and second set of officers are already implemented in the
organization whereas training for Senior sales officers is just a proposal which
would be implemented by the current year end.

I) New/ Fresh Recruits – Sales Officers

Every year Elder Pharmaceuticals Ltd conducts training for atleast 14-15 batches
with 30-35 employees per batch. The training session last for 10-12 days and is

24
conducted out of the city limits. It is usually conducted in a hotel or resort in
Lonavala, Panvel, and Khandala etc, which has a serene environment.

Objectives of training
 To give the new recruits a total perspective of the pharmaceutical
industry and that of Elder Pharmaceuticals Ltd.
 To make the employees identify the growth drivers and the potential for
growth in this industry. This will help to reduce the attrition level of the
new employees in the company to an extent.
 Product Knowledge- it is essential for new employees to have complete
knowledge of all the company products and services. In a
pharmaceutical company one needs to have an in-depth knowledge
about the various drugs, tablets, capsules, dosage, and composition etc
inorder to sell their products. The employees also need to possess soft
skills including presentation skills, communication skills and teamwork
etc inorder to convince their customers. This requires intensive training.
 Competitors- it is important to have a clear idea about the competitors,
their products, business strategies, area of business etc. This will help the
new employees to foresee and plan strategies accordingly.
 Market- every employee must have thorough idea about the market and
its behaviour. This will help the new employees to position their
products in the right place at the right time in the right amount. It is
necessary to know what product is in demand, in which market and in
what amount.
 Training helps in identifying the selling skills and needs of the
employees and focus on the benefits. This will help in providing the right
type of training required for the employees. This in turn leads to the
organizational development.

How training is done?

 Role-play- in role-playing the main focus is to create a realistic situation,

as in case study, and then have the trainees assume the parts of specific
personalities in the situation. For example, the trainer may assume the
role of an orthopedist and the trainee may assume the role of a sales
officer. Then, both are given a typical work situation and asked to
respond as they expect others to do. This helps in making a better
understanding among the individuals and also promotes interpersonal
relations.
 Detailing- trainees are given a detailed lecture on the different drugs and
medicines using visual aids (See Appendix).
 Test papers are conducted on daily basis.

25
  The employees are then rated on the basis of selling skills,
communication, product knowledge, enthusiasm and initiativeness, basic
attitude and over all job clarity.
 Then, they are rewarded on the basis of the rating and are provided with
certificates for those who completed the training successfully.

II) Managerial Orientation Programme (MOP)

It is conducted for the first line managers. In this training module the Company
focuses on discussing the role and responsibilities of the first line managers. They
also provide the officers with case studies to solve, inorder to improve their
analytical and identifying skills. In this training module, they also talk about the
difference between a manager and leader, managerial behaviour, do’s and
don’t’s of a manger etc. It is basically like a Workshop.

III) Refreshment Courses

This training module is just a proposal and would be implemented by the

current year-end. This training module is conducted for the Senior Sales Officers.
The objective of this training programme would be:
- To identify the skills, attitudes and behaviours.
- Product Refreshment- in the course of a year, the Company must have
introduced a variety of new products and services. Therefore it is essential to
update the employees about the same. Knowledge on technical aspects and new
scientific data available are provided in this module.
- It is also important to refresh their skills, attitude and behaviuor and develop
the officers to take higher responsibilities.
- It is necessary to motivate the old employees since many of them remain in the
same position for a long period. It is very important to boost the employee
morale inorder to increase their work efficiency.

Each training batch costs around Rs 4 – 5 Lakhs and the Company has a full-
fledged training faculty. 80 – 90% of the training module is covered by the
faculty members itself and the medical and marketing department covers the
rest. The Company’s Divisional Heads also takes lecture for 2 hours per batch.

11. Product Promotional Measures

Elder Pharmaceuticals Ltd has different types of promotional materials as given

below and the marketing expenditure of the Company is 14 -18% of the total
costs.

26
 1) Free Sampling- free samples of drugs and medicines are provided
to doctors inorder to make them familiarize the company products.
This method will help to reach out to the markets.
2) Literature- these are basically handouts with all drug information.
These literatures are used by the Company sales representative to
give out information on various drugs to the doctors. These
handouts contains information on drug composition, dosage etc.
3) Continued Medical Education (CME)- it is basically a conference
having authorities on the subject speaking to the doctors. There are
in-house as well as outside speaker who conducts CMEs. In CME
they share patient success reports etc.
4) Retail Campaign- free bonus of drugs and medicines are provided
to the doctors and chemists who push Elder Pharmaceutical
products. The doctors and chemists are also gifted with the
Company Diaries, prescription pads and other small gifts.
5) Patient Camps- it is basically an awareness programme where
doctors, chemists and the Company comes together and provides
the public with free check-ups, treatments and free sampling. This
strategy is adopted to create awareness about the Company
products. It is usually done in Societies, clubs, NGOs etc.
6) Medical Journals- these are company magazines that are issued
monthly with all the details about the Company’s recent launches,
products, Company news, healthy recipes etc. The Company also
uses these journals to advertise their products and is given to the
doctors and chemists. Refer Annexure.

12. Key Result Areas and Activities of the Organization

 Research and Development Productivity- As a forward-looking

company, Elder Pharmaceuticals Ltd strengthened its focus on the
manufacture of molecules developed by its R&D center through the
upgradation of its API facility. Elder’s investment in R&D is growing
steadily. The result of this growing investment is reflected in the
development of leading brands like Amifru, Shelcal range, Flavospas,
Venex, B-long, and the Eldervit range. In 1991, Elder’s research and
development facility in Nerul was recognized by the Department for

27
 Scientific and Industrial Research, New Delhi. The Company now
specializes in modern technology and innovative chemistry-driven
research, leading to the discovery of non-infringing API and drug
intermediate routes leading to the creation of intellectual property. The
R&D team comprises 40 scientists working towards following objective:

# Development of new products

# Revision of existing products
# Analytical method development
# Customer assistance
# Documentation
# Creation of intellectual property

 Sales and Marketing- Global sales forecasting is usually done by using

Country Forecasts, based on trend lines and input from Market
Intelligence, Strategic Plans etc. The processes of forecasting are as
follows:
# Strategic Planning- 5years
# Financial Planning
# Marketing Plans
# New Product Planning
# Resource Allocation
# Supply Planning
Sales Performance Evaluation- sales evaluation is done by comparing the
budgeted sales with the actual sales. Then the performance% is found out:
Performance% = Actual Sales /Target Sales x 100.
Secondary sales are then evaluated and tabulated. The aim of sales performance
evaluation is to achieve a balance between Sales, growth & Contribution Index.
Marketing activities will facilitate product and brand acceptance. The right kind
of strategic move is very important. Elder Pharmaceutical Ltd focuses on
selecting newer key markets (countries) as their target markets. Then the focus is
on strengthening the brand. The Company’s power brand strategy helps it to
protect existing recall and create new brands. This makes it possible for the
Company to create a number of successful extensions around its successful
Shelcal, Eldervit and Chymoral brands, which reduces the time-to-market and
related costs. The Company also focuses on strengthening brand equity and
establishing brand names so as to gain easy access to doctors.

13. HRD Measures

1) Leave Travel Allowance/ Reimbursements

 All confirmed employees are entitled to one month’s basic salary as leave
travel assistance in a year subject to the rules applicable.

28
  Minimum period of privilege leave qualifying for leave travel assistance
claim shall be five continuous days.
 Carry over travel assistance will be permissible to the extent of one year’s
entitlement
 This is subject to income tax applicability.

2) Medical Reimbursements
 All confirmed employees who are not covered under Employees State
Insurance Corporation (ESIC) would be entitled to reimbursement of
actual medical expense for himself and family members up to a maximum
equivalent to one month’s basic salary annually.
 Unutilized amount will be carried forward and can be accumulated up to
months basic salary.
 This is subject to Income Tax applicability.

3) Bonus
 Bonus will be paid as per the payment of bonus act.

4) Provident Fund- As per the provisions of Provident Fund Act

5) Gratuity- As per the provisions of Gratuity Act
6) Annual Health Check Up- The objective is to ensure good health and well
being of the employee. All employees can undergo medical check up (as
prescribed) every year at approved Diagnostic Center by the company. The
company will suggest the type of the test and the expenses incurred for this
medical examination will be borne by the company.

14. Career Planning and Promotion Policy of Employees

Elder Pharmaceuticals Ltd do not have any career planning activities for their
employees. The Company focuses on making the employees aware of the growth
potentials of the pharma industry and that of Elder Pharmaceuticals Ltd.

The promotion policy followed by the Company is different for the factory/field
and for that of the office. In factory, the workers are promoted on the basis of
their fieldwork efficiency, speed, skills, basic knowledge etc whereas in the case
of the office, the employees are promoted on the basis of their efficiency, attitude,
skills, willingness to take responsibilities, behaviuor, potential etc. it is very
important for the Company to choose the right kind of people because higher the

29
position of the employee, higher the level of responsibilities. The HR department
prepares a PRMOTION JUSTIFICATION FORM (Refer Annexure), which is to
be accompanied with Performance Appraisal forms that are duly filled. In the
form various details of the employees are mentioned which would help to
choose employees for promotion accordingly.

15. Performance Appraisal System

Performance appraisal is defined as the assessment of an employee’s

performance in a systematic way, the performance being measured against
factors such as job knowledge, quality and quantity of output, initiative,
leadership abilities, judgment, versatility etc. Assessment should not be confined
to past performance alone. Potentials of the employee for future performance
must also be assessed. The process of Elder Pharmaceutical’s performance
appraisal is as follows:
1) Objectives of performance appraisal are identified (Refer Annexure- Goal
Setting).
2) Role Profile is defined in order to understand what is the primary purpose
and overall objective of the job, context of the job, main responsibilities,
major challenges, key accountabilities and key performance indicators etc.
(Refer Annexure- Role Profile).
3) Parameters for the performance appraisal are established. (Refer
Annexure- Parameters).
4) The HR department fills goal Setting and Quarterly Review form for the
business year to assess the performance of the employees. (Refer
Annexure- Goal Setting and Quarterly Review form for the business
year)
5) Employees are given a form called Employee Self-Assessment form and
the manager also adds his comments to this form. (Refer Annexure-
Employee Self-Assessment form).
6) Then the collected data is used for appropriate purposes such as for
promotion etc.

16. System of Accounting Followed

The Company’s accounts are prepared as per the Generally Accepted Accounting
Principles in India and in accordance with the applicable accounting standards
and the requirements of the Companies Act, 1956. The Company follows the
accrual system of accounting, recognizing income as soon as it earns irrespective
of its time of receipt. The Company is conservative in its interpretation and
application of accounting policies.

30
 17. Financial Highlights of the organization

Past Performance – Profit & Loss

Figures in INR Cr.

 EBITDA margins consistently improving - Up over 650 basis points

over the last 3 years.
 Cutting edge new products set to offer margin enhancement.
 Shifting to low cost and excise free locations expected to drive profit
margins.

Balance Sheet perspective

Figures in INR Cr.

 Debt of ~ Rs. 100 Crore raised towards setting up of facilities in

Uttaranchal and Himachal.

31
  Unit at Langa Road (Uttaranchal) set to be operational by Jan ‘09 and
expected to
 contribute about 10% to sales on an annual basis, which can be scaled up
gradually.
 Going forward, CAPEX expected to be largely funded by combination of
internal accruals & debts.
 Presently, debt on books is at Rs. 350 Crore.

Past Performance – Key Ratios

Parameters 2007-08 2006-07 2005-06 2004-05 2003-04

EBIDTA Margin
(%) 20.6 18.9 18.74 16.97 15.46

PAT Margin (%) 12.45 11.75 10.34 7.14 6.4

Debt-Equity Ratio 0.68 0.74 0.73 0.93 1.40

Current Ratio 4.38 3.33 2.29 1.88 1.74

Inventory 6.23 Master

4.63Planning 3.77 3.59 3.67
Turnover Ratio
Return on Capital
Employed 16.15 15.13 15.56 15.11 15.42

Return on Net
worth 13.74 18.23 16.16 13.45 16.68
Rate of Growth-
Net Sales (%) 22.70 18. Organization
26.61 Design
24.35 10.68 16.60
Rate of Growth-
EBIDTA (%) 33.20 28.45 37.37 21.44 29.69
Rate of Growth-
PAT (%) 30.09 Strategic
43.79Planning 79.99 23.65 100.85

Gets Input

Ready with product Sales and

Marketing
Research and
Development

Inventory Distribution Finance

32
QA/QC
Production
Procurement
Assessment
Organisation Design Factors

The factors that influence the organization design are:

 Business Strategies:
a) To Enhance Awareness-
 By focusing on brand building in India.
 By having a prudent combination of manufacturing distribution
network and brands.
 Using Scientific Promotion rather than Product Promotion.
 Leverage international tie-ups and partnership.
b) Domestic Market
 Enlarge presence in therapeutic categories.
 Developing product portfolios: introduction of new licensed
molecules from international alliance partners.
 Commissioning new facilities at the earliest
 In-licensing product raw materials bought from parent
company to maintain originality and effectiveness
c) Sales Force Development
 Comprehensive understanding of product and market.
 Strong relationships with doctors and medical practitioners.
 Introduction of international domain experts.
 Size of team: 1600.
d) In-Licensing
 Tie up with original manufacturer key differentiator
 Over 30 in licensing products at present
 Introducing novel medications at affordable prices
 Leveraging relationships to include further offerings
e) International Markets
 Focus on exports to semi-regulated markets where presence
is established
 Contract manufacturing for alliance partners

33
  Cross-licensing agreements – offices in Kampuchea,
Myanmar, Kenya, Ghana and Nigeria

 Forecasting
 Marketing
 Budgeting and Reviewing
 Auditing
 QA/QC
 Research and Development
 Supply Chain Management

19. Organisation Structure

Ms. Aradhana
Mr. Milind Thakur Mr. Dalvi Manager (HRD)
VP- Human Resource AGM

Mr. Kanhik Danania

Dr. Rajan
Manager
Quality Assurance
Domestic Bulgaria
Mr. Debanjan Hazra
Corporate Business Strategy International Ghana

Nepal
Corporate affairs/
Legal Affairs
Dubai

Dr. Anuj Saxena

International Business

Jagdish Saxena
Mr.Yusuf
Mr.Karim Khan
Kishan Rao(Executive
(Sr. VP)
Chairman
Director); Mr.
Finance M V Thomas
(Director)
Finance

34
 Mr. Alok Saxena
Whole Time Director
Mr. Naveen Khanna
Vice President.
Ms. Shalini Kumar (Director)
Sales and Marketing
Mr. Ajit Kumar
International Marketing
Dr. M.D. Khubchandani (Sr. VP)
R&D- Formulations
Mr. Tarun Kumar
Mr. P. Balagopal (Sr. VP)
Projects
Mr. S N Kureshi

Dr. Bhavesh Kotak (VP)- CMEs;

Dr. 20.
AmitOutlook
Bhargavaand Future
(VP)- Growth Drivers
Chemical
Trial
Medical Services
Indian Pharmaceutical industry is poised to reach USD 20 billion by 2015 – the
10th largest market in the world.
Elder Pharma with an array of acknowledged brands has established itself as a
fast growing pharmaceutical company. While existing brands are contributing to
its revenues, its three new launches- Shelcal CT, Phytomega and Hibor have also
been a runaway success. Going ahead the company plans to introduce six-seven
new products in the Indian market in FY09. The Company’s thrust on in-licensed
products continues and deals for new in-licensed products are in the offering.
Besides this the Company has plans to enter newer therapies and also ramp up
their marketing operations. The Company’s vision is to consolidate its position in
India. Going forward, the Company wants to launch brands that will become
large players in the Indian market. Elder Pharma is also focusing to develop new
product portfolios and new in-licensing agreements with international partners.
Exports are gradually being ramped up. It is presently ~ 15% of revenues. Export
emphasis and increased returns from Ghana are also expected to continue. The
Company’s efforts in the field of CRAMS continue and the developments are
expected to add to the revenues and profitability. The Company plans to
commence CRAM activities at Paonta Sahib plant by the end of the current fiscal
year. The Company is striving to meet market demand for its own products.
They are also expanding the manufacturing capacities through Brownfield,
Greenfield and inorganic expansions. Elder Pharma is in the process of
commissioning a new plant in Uttaranchal, which is an excise free zone so as to
enhance production capacities. The Company’s initiatives would aid in emerging

35
as one of the fastest growing companies in the India’s mid-cap pharmaceutical
sector.

New Offerings - To be launched in FY09

 New product in collaboration with a Japanese company for improving

immunity in patients undergoing chemotherapy/radiotherapy, as well as
in patients with low immunity levels like those suffering from HIV,
Hepatitis, etc - enhances immunity levels to a considerable extent.
 New product to supply nutritional requirements of elderly population &
patients suffering from chronic disorders like T.B, Arthritis, etc & where
amino acid levels are depleted.
 New product in collaboration with an Italian company as the most potent
antioxidant product. In addition, this product also offers hepatoprotective
benefits.
 A topical gel preparation in collaboration with a Switzerland based
company for treatment of scars & keloids.

21. System followed for purchase of materials

The prices of input raw materials and final bulk drugs to be used for
formulations are not tracked through a formal mechanism. Price tracking is
important for:
 Make-buy decisions, since typically bulk drug prices are high (when
introduced) at the time of pharma development. Thereafter the prices fall
within 6-7 months of introduction.
 Feasibility of annual rate contracts for any RM purchased (at present, no
product is under annual contracts).
Large proportion of materials used at Paonta Sahib comprises of purchased bulk
drugs; the capacity and capability for these could potentially exist at Nerul plant.
For example, Sodium Pantaprazole, which has reduced costs. There is a
difference in tax structure of suppliers. In some cases the suppliers equate the
overall prices by increasing the base price
 2 suppliers for Lisinopril - Hetero Drug and Lupin
 Lupin increases the basic rate to equalise on the landed price
It is essential for the Company to evaluate feasibility of having annual rate
contracts for selected items and also incorporate processes to evaluate in-house
cost versus outsource cost for bulk drugs (Bulk Drug Manufacturing Strategy).
Elder Pharma should also prepare supplier cost sheet to track changes in basic
rates on an on-going basis.

36
 22. Factory Layout

The steps involved in Elder Pharma’s manufacturing unit are as follows:

 Receiving Bay: this is the place where raw materials and packing
materials are received.
 De-Dusting: in this stage, dust and dirt particles are removed from the
raw materials and packing materials by vacuum cleaning.
 Segregation: the raw materials are separated from packing materials
inorder to continue the process smoothly.
 Quality Approval: the materials are kept for the quality approval. The
materials with required standard are given approval whereas the others
are rejected. The rejected materials are moved to the Rejected materials
stores. Materials that wait for quality approval are known as
QUARANTINE. From this stage onwards, the raw materials and packing
materials are handled separately.
 Sampling Room (RAW MATERIALS): a sample of quarantine (raw
material) is taken to the sampling room for testing. If the quality is
approved then the raw material is moved to the Approved Raw Material
Store. If rejected then it goes to the Rejected materials stores. The rejected
materials room is completely isolated from the main building inorder to
avoid any harm to the production facilities.
 Dispensing Room: in this room, workers divide the approved raw
materials into batches inorder to make the production easier. For example:
calcium IP (100grms), fenofibrate BP (500grms) etc is kept in one batch.
 Day Store Room: in this room, the number of batches required for a day’s
production is kept safely. The production workers take the required
batches from this room.

37
  Production: the materials are then used for the production of the drugs
and medicines. The stages involved in the production are: work-in-
progress (WIP) and finished goods (FG). The finished goods are then
taken for packaging.
 Packaging Process: The packing materials are of two types- Primary
Packing and Secondary Packing. ( See Annexure – Store Layout).

Packing Material

Primary Packing Secondary Packing

(Foil strip packing for (Carton Packing for medicine
tablets) bottles and strips.

The primary packing is Secondary Packing is then done.

Kept as Quarantine for QA
handled in a clean and Eg: Bulk Packing.
conditioned area.

The packed goods are

kept as Quarantine for QA.

Finished Goods
(Dispatched to Central Warehouse)

23. Scope For MBA’s In The Organisation

38
Elder Pharmaceuticals Ltd has a number of MBA’s in the Company in various
post and departments. The Scope for MBA students is wide in the Company as it
has various departments like IT, Marketing, Human Resource, Finance,
Operations etc. As Elder Pharma is a family run business, most of the top
management executives are family members, friends, relatives etc. MBAs are
employed as senior managers, AGM, and top line managers. Some of the MBAs
in currently working in the organization are:
Mr. Alok Saxena, Whole time Director
Mr. Debanjan Hazra, Asst. General Manager, Corporate Business Strategy
Mr. Rohan Arte, Business Development Manager
Mrs. Aradhna Mathur, Manager, HR

Trade Union- there is no trade union activities practiced in the organization.

24. Conclusion

The pharmaceutical industry is expanding worldwide. Indian Pharmaceutical

Industry is poised to touch US $20Bn by 2015, making it the 10 th largest market in
the world.
Elder Pharmaceuticals Ltd was promoted by Mr. Jagdish Saxena and it was
incorporated as a private limited company on 2nd April 1983. Elder is one of
India’s leading and well established pharmaceutical company, engaged in the
manufacturing and selling of bulk drugs, formulations, herbal healthcare, and
consumer products together with the distribution of medical instruments and
electronic devices. A majority of Elder’s products are prescription drugs targeted
at the niche long-term chronic therapy and “lifestyle” disease care and treatment
market segments. The Company’s primary market is the domestic urban market.
Business Areas:
The Company is primarily engaged in:
 Manufacturing and marketing of a wide range of pharmaceutical products
developed in-house.
 Manufacturing and marketing of diverse products through in-licensing
agreements with international pharmaceutical companies.
 Manufacturing of active pharmaceutical ingredients (API).

The Company is headquartered in Mumbai, with zonal offices in Mumbai,

Chennai, Kolkata and New Delhi and a strong sales field force spread all across
the country. Elder Pharma has its shares listed on the Mumbai and National
Stock Exchanges and enjoys a market capitalization of Rs. 750 crs (NSE) as on 31 st
March 2008. Elder Pharmaceuticals Ltd has a sizeable focused portfolio of ethical
brands and growth driving brands in FMHG segment. This has helped Elder
Pharma to create a strong presence in the market and also in brand building. The
Company derives majority of its revenues through its domestic operations.

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However, it is important to emphasize that Elder’s key international alliances
brought about through in-licensing arrangements have further enhanced growth
and added value to the business. Elder’s successful alliances with several Italian
Pharmaceuticals have led to the introduction of some of the most innovative
products in crucial therapeutic markets. Some of these products are currently
amongst the top recommended brands in their respective therapeutic segments
in India.

ANNEXURE

Table 1: Principal Facilities

Elder House
C-9, Dalia Industrial Estate,
Off Veera Desai Road Head and registered Office
Andheri west,
Mumbai 400 053

D-219, D-220, TTC Industrial Area,

Thane Belapur Road, Formulation factory and R&D
Navi Mumbai 400 706

C-21/2, TTC Industrial Area, Pawne, Bulk drug and betalactum capsule
Navi Mumbai 400 704 factory

A-36, Patalganga Industrial Area,

Khaire, Taluka Khalapur, Bulk drug factory and Formulations
District Raigad,
Maharashtra 410 220

C-11/1, Industrial Area, Selaqui, Formulation Factory

Near Dehradun,
Uttaranchal

Plot No.103, Industrial Estate, Cosmetic Formulations

Bh. District Industrial Estate, Phase-II

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 Paonta Sahib, H.P.- 173 025

Elder Pharmaceuticals Ltd, Formulation Factory

Oppo. Liberty Shoes Ltd, Langa Road,
Dehradun- Paonta Sahib Road,
Dehradun, Uttarakhand

Table 2: Segment-Wise Presence

SEGMENT PRODUCTS
Wound Care Oxoferin
Bandages and Incontinence
Burnaid Gel and Bandages
Pain Management Tantum- gel, oral rinse
Artodar
Diclofenac oral rinse
Cardiovascular Carnitor
Tanatril
Hibor
Phytomega
Anti-Infectives Ceftizoxime
Nutraceuticals Imbran, NKCP
Sampure, GSH
Neuro Drugs Somazina
Consumer Products Blistex Lip Care Products
Tiger Product Range
Foltene
Sinomarin
Others Fluimucil
Dermatology
Zadaxin
Macmirror, Polimod
Medical Equipments Oxygen Concentrator
CPAP
Bipap
Nebulisers
Spirometer
PFT Lab
Capnograph

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 Polysomnography System
Non Invasive Ventilator
Pluse Oximeter

Promotional Material about the Company

Elder Pharmaceuticals Ltd. Lalit Doshi Memorial Award:
(Source: Hindustan Times dated 22nd Sept, 2008.)

Elder Pharmaceuticals Ltd has been selected for the Lalit Doshi Memorial Award
as the best SICOM assisted unit for the year 2007-08. The award is jointly given
by Lalit Doshi Memorial Foundation and SICOM Limited, every year. This
award was instituted thirteen years ago, in the memory of Late Shri Lalit Doshi
who was then Secretary (Industries), Government of Maharashtra and the
Managing Director of SICOM Limited, from June 1990 to August 1992.

The award is presented with an objective of encouraging first generation

entrepreneurs. Elder Pharmaceuticals Ltd (EPL) incorporated in April, 1983, is
engaged in the manufacture of Pharmaceutical Formulations, Bulk Drugs,
Consumer Products and Medial devices like calcium supplementations, wound,
neutraceuticals, dermatology, etc.
           
  Elder Pharmaceuticals has set up six mfg. units in India of which two are in
Maharashtra (Patalganga & Nerul, Navi Mumbai). EPL has strong brands –
Shell-Cal, Eldervit, Chymoral, etc. The company reported a turn over of about
Rs. 551 Crs. with a net profit of about Rs. 69 Crs. The award will be presented to
Elder Pharmaceuticals Ltd, in a special function on 29 th September, 2008 at 6.00
p.m. at Y.B. Chavan Centre Auditorium, General Jagannathrao Bhosle Marg,
Near Sachivalaya Gymkhana, Mumbai – 400 021. On this occasion Dr Rajendra
K. Pachauri Chairman, Intergovernmental Panel on Climate Change (IPCC) &
Director General,  The Energy and Resources Institute (TERI) will deliver the
fourteenth Lalit Doshi Memorial Lecture on “Implications of Climate Change for
Indian Society”.
Elder Pharma to market Cymbiotics drugs in India
22 Jul, 2008, 0007 hrs IST,Rajesh Unnikrishnan, ET Bureau

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MUMBAI: The California-based bio-pharmaceutical company, Cymbiotics, has
signed an in-licensing deal with Elder Pharmaceuticals to market six of its
patented products in India.

As per the agreement, Elder will market Cymbiotics products in pain

management, diabetics, dermatology, besides OTC products. Cymbiotics
develops disease-specific formulations in pain management, cardiovascular,
urinary incontinence and other inflammation management-related conditions.
Initially, Elder will market Cymbiotics’ arthritis drug Flexasur and diabetic drug
Diaperin.

Cymbiotics CEO Raj Barathur said, “The deal will strengthen our presence in the
Indian market.”
Source:  http://economictimes.indiatimes.com/News

Elder Pharma to step up focus on generics

Priyanka Gollikeri : Friday, May 30, 2008  03:05 IST
MUMBAI: Elder Pharmaceuticals, the drugs division of the Mumbai-based Elder
Group, is looking at doubling its presence in the active pharmaceutical
ingredient (API) space.

API is the substance in the drug that makes it pharmaceutically active.

Currently, Elder’s formulation business accounts for as much as 90% of the

company’s total turnover of Rs 580 crore while API contributes less than 5%, said
Alok Saxena, director (international division). Elder Pharma is growing at 20%
annually.

“The share of API would be more than doubled to 10-12% in the next three years
with an investment of Rs 20-25 crore,” he said.
To achieve this target, the company will expand capacity at its API units in
Rabale, Patalganga and Vashi, on the outskirts of Mumbai, by over 70% in three
years. At present, the total capacity stands at 350 metric tonne per annum.
Elder’s API basket covers anti-bacterial, anti-hypertension, anti-diabetic and anti-
epileptic segments.
The API market in India, estimated at Rs 11,500 crore now, is seeing a boom. It is
expected to hit Rs 19,500 crore by 2010, say analysts. Players such as Ranbaxy, Dr
Reddy’s Laboratory, Zydus Cadila and Dishman Pharmaceuticals are the key
manufacturers of APIs.
According to Saxena, it is the sheer scale of the API market that has led Elder to
increase focus on this segment. “India is developing as a major hub for API
sourcing, which is growing at 16%. It makes good business sense to increase our
capacity. The international market also provides huge scope in terms of exports,”

43
he said. The global API market is at Rs 304,000 crore and is expected to grow at
10% annually.
Elder is looking at exporting 60% of its API. The remaining 40% would be used
both for the domestic market and in—house products.
Source: http://www.dnaindia.com
In-licensing deals will help sustain growth
Ujjval Jauharri: Monday, May 12, 2008  03:45 IST
Elder Pharmaceutical Ltd (EPL), with an array of acknowledged brands such as
Shelcal, Fairone and others, has established itself as a fast growing
pharmaceutical company.

While existing brands are contributing to its revenues, its three new launches—
Shelcal CP, Phyto Omega and Hibor—have also been a runaway success. EPL
plans to introduce six-seven new products in the Indian market in FY09.
Besides this, it is planning entry into newer therapies and ramping up of
marketing operations. EPL’s business model envisages introduction of in-
licensed products and new in-licensing deals. Its recent European acquisitions
augur well for both domestic and export markets. An excellent growth
momentum, coupled with a healthy operating margin, makes it an attractive buy.
Business
EPL has business interests in pharmaceuticals (both branded and generic) and
manufacture of consumer healthcare products. It also has interests in active
pharma ingredients (API). EPL’s successful brand basket has names like
Chymoral Forte,
Eldervit, Shelcal, and Amrifru, among others.
As part of its expansion plans, it launched three new brands during the third
quarter of FY08. These were Phyto Omega, Hibor, Shelcal CP and Fairone, all of
which were received well in the market.
With more than 140 products, the generics division has a lot of significance in the
post patent arena. In this segment, EPL prefers in-licensed manufacture of
generics of patented products and has around 30 in-licensing agreements in
place.
The emphasis on in-licensed products over manufacture of generic versions of
patented molecules increases the credibility of the company. Looking at the
attractive margins in the generics segment and the India market’s potential, it
had launched the Elenza division to market generics in 2004. As for the API
business, EPL had set up a plant in Patalganga for the manufacture of APIs for
both captive use and marketing.
For surgical and hygiene products supplied to hospitals and nursing homes, EPL
has a collaboration with Hartman (Germany).
The company also has interests in industrial and medical electronics and
equipment like nebulisers and oxygen concentrators. EPL’s Ellife division has
products that address lifestyle-related disorders.

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EPL manufactures and markets all kinds of dosages. It has manufacturing
facilities in Nerul, Pawane and Patalganga, all in Maharashtra.
The company also has four topical cream injectibles and lotions manufacturing
plants in Himachal Pradesh and Uttarakhand.
These include the newly commissioned facility for semi-solid dosages in
Himachal Pradesh. EPL is planning another injectibles plant in Uttarakhand by
June.
EPL exports bulk drugs and formulations to CIS, African and Saarc countries and
has joint ventures in Ghana, where it is eyeing good growth. Elder has become a
preferred manufacturing and marketing partner for foreign firms, given its
strong sales force of over 1,600 spread across the country and a wide network of
31 C&F agents and 3,000 stockists.
Investment rationale
EPL has shown strong revenue growth and had reported a growth of 22% in its
topline in FY08. The growth momentum seems to continue with both existing
and new products. It reported an impressive OPM of around 20% for both
Q4FY08 and FY08. Elder has always been an India-centric company. Most of the
business turnover has been from the Indian market. Therefore, the company has
chalked its growth plans keeping the market in mind.
EPL’s director Alok Saxena says that the company’s vision is to consolidate its
position in India. “Going forward, we want to launch brands that will become
large players in the Indian market,” he says.
The increase in its OPM is mainly due to the fact that EPL’s Himachal Pradesh
and Uttarakhand facilities are in excise-free zones. More than 40% of the
company’s output is from these facilities. EPL wants these facilities to contribute
as much as 70% to the total production. So the OPM is expected to remain firm in
the coming years.
According to Saxena, EPL has plans to launch six-seven new products in FY09.
The company’s thrust on in-licensed products continues and deals for new in-
licensed products are in the offing.
Export emphasis and increased returns from Ghana are also expected to
continue. EPL entered the Europe market with the acquisition of UK- based
Neutra Health and a 51% stake in Bulgaria-based Biomeda.
The distribution and marketing network of Neutra Health will help EPL as will
the planned production and marketing of some Neutrahealth products in India
and other countries. EPL will also promote Biomeda products in CIS and other
European countries.
EPL’s efforts in the field of contract research and manufacturing services
(CRAMS) continue and the developments are expected to add to the revenues
and profitability.
Valuation: At the current market price of Rs 362.5, the stock is available at 7.9x its
FY09 earnings and 6.2x its FY10 earnings. Valuations seem attractive given its
strong growth opportunities offered by in-licensing agreements, new launches
and CRAMS. Financial estimates do not include the Biomeda acquisition and any

45
future acquisitions. Export opportunities and tax advantage on account of shifted
manufacturing facilities will benefit overall profitability. It is a good long-term
bet.
Source: http://www.dnaindia.com/report.
Elder has a strong international growth strategy in place.
Business Daily from THE HINDU group of publications
Sunday, Jan 13, 2008: Kumar Shankar Roy
Elder Pharmaceuticals has charted out an aggressive scheme of acquisitions, in-
licensing of products and selective forays into niche therapeutic areas such as
woundcare, women’s healthcare and nutraceuticals. The mid-sized pharma
company recently came into the spotlight after acquiring Biomeda in Bulgaria
and a significant stake in Neutralhealth in the UK. For a company that derives
over 95 per cent of revenues from India, it was as much a leap of strategy as faith.
“We envision being a Rs 1,000-crore company by 2010. Organic growth alone
cannot deliver these numbers. Inorganic growth will contribute to nearly 20-30
per cent of our turnover by 2010,” said Mr Alok Saxena, Director, International
Operations, Elder Pharmaceuticals.

Bibliography

1) Annual Report, Elder Pharmaceuticals Ltd- 2006-08.

2) Human Resources- Elder Pharmaceuticals
3) Human Resource Management, K Aswathappa
4) http://www.dnaindia.com/report
5) http://economictimes.indiatimes.com/News
6) Datamonitor, KPMG, McKinsey

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