PROJECT REPORT ON

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

CONTENTS

1
S No Topic Page
1 Indian Pharmaceutical Market: An 1
Overview
2 Introduction: Elder Pharmaceuticals 2
Limited
3 History of the Company 2
4 Profile Of the Products 5
5 Mission, Objectives and Strategies of 9
Elder 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 21
Pharmaceuticals Ltd
11 Product Promotional Measures 24
12 Key Result Areas and Activities of the 25
Organization
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 34

materials
22 Factory Layout 35
23 Scope For MBA’s In The Organisation 36
24 Conclusion 37
25 Annexure 38
26 Bibliography

2
 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.

3
 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.

4
 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)

5
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.
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,

6
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:

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.

7
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

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

8
 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 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

9
 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.
 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

10
 LAB, CAPNOGRAPH, POLYSOMNOGRAPHY SYSTEM, NON INVASIVE
VENTILATOR, and PLUSE OXIMETER.

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

11
 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

12
  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.
 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.

13
 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.

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

14
  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.
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

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

15
 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:

# 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 31st December 2007.

2) Through In-licensing Arrangements

16
 -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
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.

17
 • 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
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.

18
 • 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.

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

19
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:

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.

20
 • 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
• 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.

21
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

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

22
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:
 Job Sites
 Placement Consultants
 Advertisements
• The New profiles received are then short listed and sent to the
user department.

23
 • 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 exigencies of work, the management
also reserves the right to change the working hours/ weekly holidays.

24
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 conducted out of the city limits. It is usually

25
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).

26
  Test papers are conducted on daily basis.
 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

27
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.
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

28
  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 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

29
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.
• 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.

30
 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
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

31
 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.

17. Financial Highlights of the organization

Past Performance – Profit & Loss

Figures in INR Cr.

32
 • 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.
• 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.

Parameters
Past Performance – Key Ratios

EBIDTAMargin
(%)
33
 18. Organization Design

Strategic
Planning

Gets Input
Sales and
Ready with
Marketin
product
g
Research
and
Developm
ent
Inventor Distributi Finan
Master
Pla
nni
ng

QA/Q
C Procureme
n
t

Production
Assess
ment

Organisation Design Factors

The factors that influence the organization design are:

34
 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
 Cross-licensing agreements – offices in
Kampuchea, Myanmar, Kenya, Ghana and Nigeria

35
  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
VP- Human AGM (HRD)
Resource

Mr. Kanhik
Dr. Rajan
Danania
Quality
Manager
Assurance
Domesti
Bulgari
Mr. Debanjan a
Hazra Internatio
Ghan
Corporate Business
Strategy Nepal
Corporate
affairs/
Dubai
Legal Affairs

Dr. Anuj Saxena

International
Business
Jagdish Mr. Kishan Rao (Sr.
Mr.Yusuf Karim Khan
Saxena VP)
(Executive Director); Mr. M
Chairman Finance
V Thomas (Director)
Finance
Mr. Alok Saxena
Whole Time
36 Director
 Mr. Naveen
Khanna
Ms. Shalini Kumar Vice President.
(Director)
Sales and Marketing Mr. Ajit Kumar
International
Dr. M.D. Khubchandani Marketing
(Sr. VP)
R&D- Formulations
Mr. Tarun
Mr. P. Balagopal Kumar
(Sr. VP)
Projects Mr. S N
Kureshi
Dr. Bhavesh Kotak (VP)-
20. Outlook and Future Growth Drivers
CMEs;
Dr. Amit Bhargava (VP)-
Chemical Trial
Indian Pharmaceutical industry is poised to reach USD 20 billion by
Medical Services
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

37
so as to enhance production capacities. The Company’s initiatives
would aid in emerging 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.

38
 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.

39
  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.
 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 (Carton Packing for
packing for medicine bottles and
tablets) strips.

The primary Secondary Packing is then

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

The packed
goods are kept as Quarantine for QA.

40
 Finished Goods
(Dispatched to
Central Warehouse)

23. Scope For MBA’s In The Organisation

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 10th 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.

41
 • 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 31st 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. 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

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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

Navi Mumbai 400 704 capsule factory

A-36, Patalganga Industrial Area,

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

C-11/1, Industrial Area, Selaqui,

Near Dehradun, Formulation Factory
Uttaranchal

Plot No.103, Industrial Estate,

Bh. District Industrial Estate, Cosmetic Formulations
Phase-II
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

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 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
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.

44
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 29th 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

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

45
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,” 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

46
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.
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

47
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
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

48
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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