MIRA INFORM REPORT

 

 

Report Date :

17.06.2011

 

IDENTIFICATION DETAILS

 

Name :

ELDER PHARMACEUTICALS LIMITED

 

 

Registered Office :

Elder House, Plot no. C9, Dalia Industrial Estate, Off Veera Desai Road, Andheri (W), Mumbai – 400058, Maharasahtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2010

 

 

Date of Incorporation :

02.04.1983

 

 

Com. Reg. No.:

029714

 

 

Capital Investment / Paid-up Capital :

Rs. 188.872 Millions

 

 

CIN No.:

[Company Identification No.]

L24239MH1983PLC029714

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUME02504F/ MUME04606A

 

 

PAN No.:

[Permanent Account No.]

AAACE1831G

 

 

Legal Form :

A Public Limited Liability company. The company’s Share are Listed on the Stock Exchange.

 

 

Line of Business :

Manufacturing and Marketing of Pharmaceuticals in the form of Tablets, Capsules, Injectables, Ointments, Syrup/ Liquids and Powder.

 

 

No. of Employees :

3215 (Approximately)

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A (65)

 

RATING

STATUS

PROPOSED CREDIT LINE

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

 

Maximum Credit Limit :

USD 18987000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established company having fine track. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments.

 

The company can be considered good for normal business dealings at usual trade terms and conditions.

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – June 30, 2010

 

Country Name

Previous Rating

(01.04.2010)

Current Rating

(30.06.2010)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

LOCATIONS

 

Registered Office :

Elder House, Plot no. C9, Dalia Industrial Estate, Off Veera Desai Road, Andheri (W), Mumbai – 400058, Maharasahtra, India

Tel. No.:

91-22- 26730058

Fax No.:

91 -22- 26730051

E-Mail :

s.p.date@elderindia.com

corporate@elderindia.com

Website :

www.elderindia.com

 

 

Zonal Sales Offices :

Located At :

Mumbai

Pipewala Bldg., 4th Floor, ‘A’ Wing, Shahid Bhagat Singh Rd, Mumbai – 400 005.

Tel. (022) 22021878.

 

Kolkata

12-A, Rani Bhawani Road, Taki House, Kolkata - 700 026.

Tel. (033) 24668875 / 6757.

 

Chennai

158, Arcot Road, II Floor, Eastern Wing, Chennai - 600 026.

Tel. (044) 28256336

 

New Delhi

11-B/8, Pusa Road, Northern Extn. Scheme,

New Delhi - 110060. Tel. (011) 25825601 / 05.

 

Factories

1. Plot No. D-219 & D-220, T.T.C. Industrial Area, Thane- Belapur Road, Navi Mumbai - 400 706.

Tel. (022) 27672343 / 27685830.

 

2. Plot No. C-21/2 T.T.C. Industrial Area, Village Pawne, Navi Mumbai – 400 704.

Tel. (022) 27682656.

 

3. Plot No. A-36, Patalganga Industrial Area, Village - Khaire, Taluka - Khalapur, District - Raigad, Maharashtra 410 220.

Tel. (02192) 254395 / 6.

 

4. Plot No. C-11/1 Sela Qui Industrial Area, Near Dehradun, Uttarakhand Pin 248 197.

 

5. Plot No. 103, Paonta Sahib Industrial Area, Village Gondpur, Dist. Sirmour, Himachal Praadesh.

 

6. Village Charba, Tehsil - Vikasnagar, Dist.: Dehradun, Uttarakhand

 

 

DIRECTORS

As on 28.09.2010

 

Name :

Mr. J. Saxena

Designation :

Chairman and Managing Director

 

 

Name :

Mr. M. V. Thomas

Designation :

Director (Finance) (upto 30th June 2010)

 

 

Name :

Mr. Alok Saxena

Designation :

Whole Time Director

 

 

Name :

Mr. Yusuf Karim Khan

Designation :

Executive Director

 

 

Name :

Dr. R. Srinivasan

Designation :

Director

 

 

Name :

Mr. Joginder Singh Juneja

Designation :

Director

 

 

Name :

Dr. Shailendra Narain

Designation :

Director

 

 

Name :

Mr. Michael Bastian

Designation :

Director

 

 

Name :

Mr. Saleem Shervani

Designation :

Director

 

 

Name :

Dr. S. Jayaram

Designation :

Director

 

 

Name :

Mr. Peter Bibby

Designation :

Director (Upto 29th April 2009)

 

 

Name :

Mr. Edoardo Carlo Richter

Designation :

Director

 

 

Name :

Mrs. Urvashi Saxena

Designation :

Directors (w.e.f. 29th April 2009)

 

 

KEY EXECUTIVES

 

Name :

Mr. S. P. Date

Designation :

Company Secretary

 

 

Name :

Mr. M.V. Thomas

Designation :

Chief financial Officer

 

 

Audit committee :

 

Mr. Michael Bastian, Chairman (w.e.f. 29th April 2009)

Dr. Joginder Singh Juneja, Chairman

Dr. R. Srinivasan

Dr. Sailendra Narain

 

 

Shareholders’ / Investors’

Grievances Committee :

 

Dr. R. Srinivasan, Chairman

Dr. S. Jayaram

Mr. Alok Saxena (w.e.f. 27th July 2010)

 

 

Remueration Committee :

 

Dr. R. Srinivasan, Chairman

Dr. S. Jayaram

Mr. J. Saxena

 

 

Compensation Committee :

 

Dr. Joginder Singh Juneja, Chairman

Mr. Saleem Shervani

Mr. J. Saxena

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2011

 

Names of Shareholders

No. of Shares

Percentage of Holding

(A) Shareholding of Promoter and Promoter Group

 

 

(1) Indian

 

 

Individuals / Hindu Undivided Family

1,665,111

8.11

Bodies Corporate

6,233,988

30.36

Sub Total

7,899,099

38.46

(2) Foreign

 

 

Total shareholding of Promoter and Promoter Group (A)

7,899,099

38.46

(B) Public Shareholding

 

 

(1) Institutions

 

 

Financial Institutions / Banks

580,240

2.83

Insurance Companies

1,115,319

5.43

Foreign Institutional Investors

3,975,888

19.36

Sub Total

5,671,447

27.62

(2) Non-Institutions

 

 

Bodies Corporate

1,537,633

7.49

Individuals

 

 

Individual shareholders holding nominal share capital up to Rs. 0.100 Millions

1,324,529

6.45

Individual shareholders holding nominal share capital in excess of Rs. 0.100 Millions

329,722

1.61

Any Others (Specify)

3,774,506

18.38

Foreign Corporate Bodies

2,619,000

12.75

Non Resident Indians

17,072

0.08

Trusts

1,108,778

5.40

Clearing Members

14,656

0.07

Foreign Nationals

15,000

0.07

Sub Total

6,966,390

33.92

Total Public shareholding (B)

12,637,837

61.54

Total (A)+(B)

20,536,936

100.00

(C) Shares held by Custodians and against which Depository Receipts have been issued

-

-

(1) Promoter and Promoter Group

-

-

(2) Public

-

-

Sub Total

-

-

Total (A)+(B)+(C)

20,536,936

-

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing and Marketing of Pharmaceuticals in the form of Tablets, Capsules, Injectables, Ointments, Syrup/ Liquids and Powder.

 

 

PRODUCTION STATUS (As on 31.03.2010)

 

Particulars

Unit

Licensed Capacity

Installed Capacity

Actual Production

Tablets

LACS

NA

29908.32

11846.43

Capsules

LACS

NA

4808.40

532.68

Injectables

LACS

NA

1560.00

379.37

Ointments

TONNES

NA

1255.20

260.49

Syrups/ Liquids

KILO LTRS

NA

8616.00

736.69

Powders/ Active Pharmaceuticals

Ingredients and Drug Intermediates

TONNES

NA

233.40

91.58

 

NOTE:

1. The Installed Capacity is as certified by the management and not verify by auditors, this being a technical matter.

2. Actual Production Includes:

i) Sample Production.

ii) Production at Loan Licences locations.

iii) Production of goods for Captive consumption.

 

 

GENERAL INFORMATION

 

No. of Employees :

3215 (Approximately)

 

 

Bankers :
  • State Bank of India
  • Syndicate Bank
  • Development Credit Bank Limited
  • Axis Bank Limited
  • Canara Bank
  • DBS Bank Limited
  • The Bank of Rajasthan Limited

 

 

Facilities :

Secured Loan

As on

31.03.2010

(Rs. in

Millions)

As on

31.03.2009

(Rs. in

Millions)

Loans from Banks

 

 

Long Term Loans

2415.047

866.476

Loans from Banks for Working Capital

1094.131

900.127

External Commercial Borrowing

531.595

794.065

Others

0.085

0.658

Total

4040.858

2561.326

(A) Long Term Loans and External Commercial Borrowing from Banks are secured by –

1. A first mortgage and charge on all the immovable and movable fixed assets both present and future ranking pari-passu with the existing charge holders for their term loans and also secured by second charge over current assets of the company.

2. Irrevocable and unconditional personal guarantees of two of the Directors.

 

(B) Loans from Banks for Working capital are secured by first pari passu charge by hypothecation of stocks-in-trade and Book Debts and second charge over all the immovable and movable fixed assets both present and future of the company and also personal guarantees of some of the Directors.

 

(C) Other loans are secured by hypothecation of the assets acquired.

 

Unsecured Loan

As on

31.03.2010

(Rs. in

Millions)

As on

31.03.2009

(Rs. in

Millions)

Fixed Deposits

398.769

163.955

Trade Deposits

127.150

94.000

From Banks

775.000

945.000

Others

215.000

237.100

Total

1515.919

1440.055

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

S. S. Khandelwal and Company

Chartered Accountant

Address :

Fountain Chambers, Nanabhai Lane, Mumbai - 400 023. Maharasahtra, India

 

 

Cost Auditors :

 

Sevekari, Khare and Associates

Chartered Accountant

Address :

A-4, Hari Nivas, 1st Floor (Rear Side), L.J. Road, Mumbai - 400 028. Maharasahtra, India

 

 

Associates/Subsidiaries :
  • Elder International FZCO Dubai, UAE
  • Somerta Holdings Co. Limited, Cyprus
  • Elder Health Care Limited.
  • Elder Projects Limited.
  • Elder Instruments Private Limited.
  • Maveer Prints Private Limited
  • E W F Pharmaceuticals Private Limited.
  • Redle Pharmaceuticals Private Limited
  • Akshaya Holdings Private Limited.
  • Anjay Prints
  • Ansul Printers

 

 

CAPITAL STRUCTURE

As on 31.03.2010

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

30000000

Equity Shares

Rs.10/- each

Rs. 300.000

Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

18857486

Equity Shares

Rs.10/- each

Rs. 188.574

Millions

 

Add: Forfeiture of Shares

 

Rs. 0.298 Millions

 

Total

 

Rs. 188.872

Millions

 

 

As on 28.09.2010

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

30000000

Equity Shares

Rs.10/- each

Rs. 300.000

Millions

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

20536936

Equity Shares

Rs.10/- each

Rs. 205.369

Millions

 

 

 

 

 

 

 

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2010

31.03.2009

31.03.2008

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

188.872

188.872

188.219

2] Share Application Money

0.000

0.000

13.652

3] Reserves & Surplus

4557.839

3964.426

3647.643

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

4746.711

4153.298

3849.514

LOAN FUNDS

 

 

 

1] Secured Loans

4040.858

2561.326

1704.334

2] Unsecured Loans

1515.919

1440.055

1711.550

TOTAL BORROWING

5556.777

4001.381

3415.884

DEFERRED TAX LIABILITIES

38.132

50.249

51.780

 

 

 

 

TOTAL

10341.620

8204.928

7317.178

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

4653.068

1712.613

1691.736

Capital work-in-progress

657.409

2521.513

1633.557

 

 

 

 

INVESTMENT

196.775

39.275

618.876

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
1425.556

881.052

836.752

 

Sundry Debtors
1932.446

1776.269

1395.512

 

Cash & Bank Balances
773.099

637.918

667.118

 

Other Current Assets
34.577

25.770

41.690

 

Loans & Advances
1878.415

1745.647

1293.208

Total Current Assets
6044.093

5066.656

4234.280

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Sundry Creditors
378.666

322.976

327.071

 

Other Current Liabilities
579.091

525.997

299.044

 

Provisions
251.968

286.156

235.156

Total Current Liabilities
1209.725

1135.129

861.271

Net Current Assets
4834.368

3931.527

3373.009

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

10341.620

8204.928

7317.178

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2010

31.03.2009

31.03.2008

 

SALES

 

 

 

 

 

Income

7027.914

6200.218

5511.962

 

 

Other Income

76.310

81.384

75.925

 

 

TOTAL                                     (A)

7104.224

6281.602

5587.887

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Materials Cost

3310.135

3015.130

2659.133

 

 

Other Expenses

2377.825

2135.141

1769.974

 

 

Research and Development Expenditure

46.344

41.544

29.601

 

 

Exchange Loss/ (Gain) (Net)

47.557

14.715

0.000

 

 

TOTAL                                     (B)

5781.861

5206.530

4458.708

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

1332.363

1075.072

1129.179

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

507.828

373.934

237.282

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

814.535

701.138

891.897

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

167.736

115.233

106.108

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                               (G)

646.799

585.905

785.789

 

 

 

 

 

Less

TAX                                                                  (I)

92.883

79.470

99.331

 

 

 

 

 

 

PROFIT AFTER TAX (G-I)                                  (J)

553.916

506.435

686.458

 

 

 

 

 

Less

TAX FOR EARLIER YEARS

0.000

15.000

(10.519)

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

1735.430

1599.151

1007.330

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Transfer to General Reserve

300.000

300.000

50.000

 

 

Dividend

56.572

47.144

47.144

 

 

Tax on Dividend

9.396

8.012

8.012

 

BALANCE CARRIED TO THE B/S

1923.378

1735.430

1599.151

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

Export of Goods on F.O.B Basis

174.567

144.474

233.094

 

TOTAL EARNINGS

174.567

144.474

233.094

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials/ Finished Goods

298.428

552.478

455.727

 

TOTAL IMPORTS

298.428

552.478

455.727

 

 

 

 

 

 

Earnings Per Share (Rs.) (Basic)

29.37

26.86

36.74

 

Earnings Per Share (Rs.) (Diluted)

29.37

26.86

36.61

 

 

QUARTERLY / SUMMARISED RESULTS

 

PARTICULARS

 

30.06.2010

30.09.2010

31.12.2010

31.03.2011

 

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Net Sales

1912.510

2042.500

2097.150

2219.400

Total Expenditure

1517.390

1606.130

1652.080

1734.330

PBIDT (Excl OI)

395.120

436.370

445.070

485.070

Other Income

20.590

11.880

17.810

8.360

Operating Profit

415.710

448.250

462.890

493.430

Interest

137.320

141.760

152.910

187.980

Exceptional Items

(10.100)

(13.790)

(12.500)

(13.480)

PBDT

268.290

292.700

297.480

291.980

Depreciation

49.500

73.850

74.330

74.870

Profit Before Tax

218.790

218.850

223.150

217.110

Tax

30.000

57.500

42.500

35.000

Provisions and contingencies

0.000

0.000

0.000

0.000

Profit After Tax

188.790

161.350

180.650

182.110

Extraordinary Items

0.000

0.000

0.000

0.000

Prior Period Expenses

0.000

0.000

0.000

0.000

Other Adjustments

0.000

0.000

0.000

0.000

Net Profit

188.790

161.350

180.650

182.110

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2010

31.03.2009

31.03.2008

PAT / Total Income

(%)
7.80

8.06

12.28

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
9.20

9.45

14.26

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
6.05

8.64

13.26

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.14

0.14

0.20

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
1.42

1.24

0.20

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
5.00

4.46

4.92

 

LOCAL AGENCY FURTHER INFORMATION

 

INDUSTRY DEVELOPMENTS

Global pharmaceutical industry

 

The global pharmaceutical marked is expected to grow 4% to 6% in 2010 to USD 825 billion. Over the five years ending 2013, the global market is expected to expand 4% to 7%. The US market is expected to strengthen in the near term, due to a boost in pharmacy stocking levels in 2009. Also, price increases for protected products are continuing at a good rate. In other parts of the world, the impact of the economic downturn depends on the severity of the recession in the particular country and the structure of funding for pharma companies. The “pharmerging markets” (a term coined by IMS) are expected to continue to grow 12% to 14% next year, and 13% to 16% over the next five years.

 

Indian pharmaceutical industry

 

During the current year 2009-10, Pharma was among the few sectors that managed to expand its revenues despite global recession and financial crises. Strong domestic demand, growing preference for generics worldwide and favourable rupee-dollar exchange rate helped the Indian pharmaceutical sector.

 

The Indian pharmaceutical sector is poised for robust growth, from a market size of USD 6.3 billion in 2005, the Indian pharmaceuticals market will grow to about USD 20 billion by 2015. This implies a compounded annual growth rate of 12.3%.

 

Six trends that are likely to influence the growth of the Indian pharmaceuticals market over the next decade: doubling of disposable incomes and the number of middle-class households, expansion of medical infrastructure, greater penetration of health insurance, rising prevalence of chronic diseases, adoption of product patents, and aggressive market penetration driven by the relativelysmaller companies.

 

In terms of scale, the Indian pharmaceutical market is ranked 14th in the world. By 2015, it will rank among the top 10 in the world, overtaking Brazil, Mexico, South Korea and Turkey. More importantly, the incremental market growth of USD 14 billion over the next decade is likely to be the third largest among all markets. The US and China are expected to add USD 200 billion and USD 23 billion respectively. India, Japan, Canada and the UK are expected to be the next in line, with growth expectations in the range of USD 13–14 billion during this timeframe.

 

Subject with its well entrenched domestic presence is geared to capitalise on the prevailing opportunities.

 

Sector outlook

 

The domestic pharma market has grown at a 14% CAGR over the past 18 years. However, drug consumption per capita in India is still among the lowest globally. Even adjusting for India having the lowest prices in the world, the per capita consumption volumes are lower than in the US and Japan. Moreover, large swathes of India consume far lower than the national average, indicating a significant scope for growth. A state-wise breakdown suggests per capita consumption is linked to income, literacy rate and the availability of medical infrastructure. Along with rising income levels, we expect the share of healthcare in consumption to rise, driving strong demand for pharmaceuticals.

 

COMPANY OVERVIEW

 

Incorporated in 1989, the Company is engaged in the manufacture of a variety of pharmaceutical-based intermediaries, formulations and bulk drugs, with intense focus on extensive research and development programs undertaken in collaboration with various foreign companies. Subject with an array of acknowledged brands has established itself as a fast growing pharmaceutical company with a presence in niche therapeutic segments. Besides this, it is planning entry into newer therapies and ramping up of marketing operations.

 

 

Financial overview

 

In 2009-10, the sales of Subject increased by 13.09% to Rs. 7104.200 Millions from Rs. 6281.600 Millions in the previous fiscal. The Company’s net profit after tax stood at Rs. 553.900 Millions as compared to Rs. 506.400 Millions.

 

 

Segment analysis

 

All the Company’s key business divisions have maintained their growth trajectory and managed to register encouraging revenues.

 

Subject witnessed a robust performance in the Women’s Healthcare division. This division has been displaying a consistent growth trend since the year of its launch and continues to be a leading growth driver amongst all other business divisions. The recently introduced extension of Shelcal named Shelcal CT is gaining traction, thus further strengthening performance from this division. Shelcal CT has featured amongst the most successful launches in recent times since its inception and is making noteworthy contribution to the Company’s revenues.

 

The Nutraceuticals business division maintained its leadership position in the domestic Nutraceuticals segment. The Company’s own brand ‘Eldervit’ was the key contributor to this division’s performance. ‘Eldervit-12 Injection’ is being marketed in the semi-urban and rural market through the Rural Marketing Team Elvista as these regions are seeing substantial demand for this drug. Phytomega, an in-licensed brand has been wellaccepted in the domestic market and is garnering healthy growth. The in-licensing pact with Daiwa, Japan for Imbran is also gaining momentum. The newly launched Pepamino, Phytomega are expected to boost sales in this division going further.

 

The Pain Management division has witnessed a healthy growth. The Company’s own brand ‘Chymoral’ continues to remain the key revenue driver with a robust 86% market share in its category.

 

The Company has recorded an encouraging performance in the Anti-infectives division. The Company’s alliance with Chemische Fabrik Dr Weigert GmbH & Co KG for marketing of infection control products in the country to the medical, veterinary, environmental and Government sectors has strengthened this business division.

 

 

Expenditure analysis:

 

(Rs. in Millions)

FY 10

FY 09

% shift

Staff Cost

943.400

865.500

9.00

Interest Cost

517.800

373.900

38.48

 

 

There was considerable increase in overall expenditure of the Company owing to newly undertaken initiatives across the organization. Employee cost was higher as a result of commissioning of the Rural Marketing Team Elvista. The Company has also incremented the existing manpower at the R&D facility at Nerul. Interest costs were higher primarily due to the Company’s borrowings attributed to expansion and upgradation of existing manufacturing facilities, commissioning of Langha Road facility as well as marketing and distribution activities in Biomeda, Bulgaria.

 

(Rs. in Millions)

FY 10

FY 09

% shift

PBT

646.700

585.900

10.37

PAT

553.900

506.400

9.37

EPS (Rs.)

293.700

268.600

9.34

 

Despite the sharp rise in attributed to sharp rise in interest cost the Company posted robust results. This growth can be attributed on account healthy contribution from the Company’s key business divisions.

 

Business performance

 

In-licensing agreements In-licensed products have maintained the Company’s growth trajectory. Subject has a strong in-licensing model coupled with newly signed pacts that strictly adheres to a patent non-infringement strategy which is the key to its progress in striking new relationships. The Company has various new products in the pipeline through inlicensing arrangements with strategic foreign partners. These launches are expected to further strengthen the product portfolio and enable growth as well as increase market share in niche therapeutic areas. Subject  inlicensed products have been well accepted and gaining traction in the markets.

 

Brand performance

 

The Company has plans for launching various new products in the domestic formulations segments in therapeutic areas where it is already entrenched. The Company’s own formulations brands have proven their sustainability especially Shelcal Group, Chymoral and Eldervit. 6 of the Company’s brands are market leaders in their respective segments. Shelcal is the 33rd largest brand in the Indian pharmaceutical industry

 

MANUFACTURING FACILITIES

 

Subject has established its manufacturing prowess through the establishment of its manufacturing units, coupled with a state-ofthe- art facility for research & development, thus placing it attractively to leverage the immense opportunities unfolding in the global pharmaceutical marketplace. The Company’s manufacturing units are equipped for manufacture of various dosage forms like tablets, capsules, syrups, injectibles, topical creams and ointments.

 

Subject is in the process of shifting its manufacturing facilities to excise free zones as well as the existing facilities are being upgraded in order to cater to the growing demand in the domestic market. A detailed account of the same is as follows:

 

 

  1. Langha Road (Uttarakhand)

 

Subject commissioned the Langha Road facility is FY 10 with a trial run. The Company is aiming for USFDA compliance and WHO approvals for this plant as it is being set up strictly as per the required standards and guidelines of these certification societies. The plant will assist the Company in meeting the market demand in the European Union and CIS countries. Trial runs for this plant are already underway. This plant is being equipped for manufacture of formulations in injectibles in liquid ampoules form, oral liquids, tablets and Soft Gelatin dosage forms.

 

  1. Paonta Sahib (Himachal Pradesh)

 

Subject completed the construction of the Paonta Sahib facility in Himachal Pradesh during FY 09 and has become operational at 30% load presently. It is catering to the growing demand for tropical formulations like creams, lotions, ointments and personal care products. The facility is equipped with state-of-the-art equipment working towards getting globally recognised certification. The facility would cater to the growing needs of the domestic and developing markets.

 

  1. Selaqui (Uttarakhand)

 

Subject is expanding its production capacity at this unit which is currently running at 75% load following which, the plant will be in a position to address growing product demand for solid dosage (Tablets and Capsules) in developing markets. Rising quality consciousness resulted in an investment in state-of-the-art equipment to enhance productivity and upgrade this plant to international regulatory requirements of WHO. The Company has carried out expansion in this manufacturing unit recently. The plant is now being upgraded as per UK MHRA specifications.

 

      4. Patalganga (Maharashtra)

 

Patalganga unit consists of 2 plants for API and formulations and was upgraded according to ICH Q7A guidelines for the manufacture of products for markets in US and UK. The plant’s certifications – ISO 9001:2000, WHO- GMP and filed COS with the European Directorate for Quality of Medicine make it possible for Elder to cater to the demanding needs of the regulated markets. These approvals will enable the Company to export Clarithromycin to Europe and file a USDMF for Clarithromycin. Elder strengthened its position as a viable CRAMs partner for European and US alliances.

 

 

OUTLOOK

 

Subject is a key player in the niche segment has a very good presence in the domestic market especially in the sectors viz. Women’s health care, Nutraceuticals and Wound care. The Anti-infectives division is also making its presence felt in the domestic market and is contributing substantially to the Company’s revenues. Though the company has limited presence in the international market, it’s the risk from foreign exchange fluctuations is minimised. The Company aims to persistently increase its market presence in domestic as well as international market through new launches and international alliances.

 

 

OPERATIONS:

 

The Company achieved sales Turnover of Rs. 7027.900 Millions during the year which represents an increase of Rs.827.700 Millions representing 13.35% increase over the previous year. However, in view of the economic pressures the pre and post tax profits were under pressure and did not show as much increase as in Sales Turnover. The profit before tax for the year was Rs.646.800 Millions whereas profit after tax was Rs.553.900 Millions. During the year the Company introduced a number of new products in the market like Pepamino, a research based nutritional supplement from a Norwegian company, Flavospas – O, for treatment of Urinary Tract infections, Tazomust, an Antiinfective having wide range of indications and applications and Somazina OD for the management of cerebral strokes. During the current accounting year the Company has introduced products like NRT Pastilles, a Nicotine replacement therapy with unique German delivery system and Ecozyne, a nutritional supplement for management of male infertility.

 

The Company has plans for launching various new products, both own and in-licensed, in therapeutic areas where it is already entrenched. These launches are expected to further strengthen the product portfolio and enable growth as well as increase market share in niche therapeutic areas.

 

All the products of the Company including new introductions have been well accepted by the medical fraternity in India. The main therapeutic area of interest to the Company continues to be Women’s healthcare, Wound care, Neutraceuticals / Vitamin Supplements, Life Style & Diabetes, Dermatology, Antibiotics and CNS.

 

The Directors are pleased to inform that during the year the formulation facilities of the Company set up as per the US FDA requirements at Village Charba, Langha Road, Tehsil Vikas Nagar, District Dehradun, in the State of Uttarakhand for manufacture of injectibles in liquid ampoule form, oral liquids, tablets and capsules dosage forms, have commenced commercial production. The said unit is eligible for incentives such as the Central Excise exemption for a period of ten years from the year of commencement of commercial production, Income Tax exemption, Central Subsidy, etc.

 

The other two units of the Company in North India, one at Sela Qui near Dehradun in Uttarakhand and the other at Paonta Sahib in Himachal Pradesh have been enjoying the Central Government’s excise and income tax incentives. The production capacities have been expanded at the Sela Qui unit in Uttarakhand. The said unit is being upgraded to meet UK MHRA accreditation. This accreditation will help the Company cater to some of the export markets.

 

During the previous year the Ministry of Corporate Affairs, New Delhi (MCA) had commenced an investigation on the Company under Section 235 of the Companies Act, 1956. The investigation report was forwarded to the Company for its comments thereon. After receipt of Company’s comments the investigating agency issued a show cause notice to the Company and some of its Directors / officers relating only to alleged violations of certain provisions of the Companies Act, 1956 which the Company has replied. The Company reckons that the matter is concluded as the investigating agency has since issued the last letter dated 4th February 2010 in the matter only warning the Company to be particular in future in complying with the provisions of Section 154 of the Companies Act, 1956.

 

 

JOINT VENTURES / SUBSIDIARIES / INVESTMENTS:

 

During the accounting year 2006-07 the Company established a wholly owned subsidiary in the Jebel Ali Free Trade Zone, Dubai, U.A.E. called ‘ELDER INTERNATIONAL FZCO’. The Company was issued a trading license in March 2007 for ‘para pharmaceuticals marketing’. The Company has, through this Dubai subsidiary made investments in NeutraHealth PLC, U.K., and Elder Biomeda AD, Bulgaria, a step down subsidiary in which it has 61% interest. Elder Biomeda AD holds 100% interest in Elder Bulgaria EOOD, a manufacturing company and Biomeda 2000 EOOD, a distribution company. Bulgaria being a part of European Union now offers an excellent opportunity for the Company to enter Eastern European as well as CIS countries. The manufacturing unit in Bulgaria will soon be upgraded and expanded for manufacturing products for the Eastern European and CIS markets. The distribution business in Bulgaria has started picking up and is slowly gaining the lost ground. As reported in the last year’s report the logistic support business has been merged with the distribution company in Bulgaria during the accounting year.

 

During the accounting year it was decided to withdraw from Ghana joint venture and the joint venture agreement with Vincom Pharmaceuticals Limited, Ghana, was terminated. The Company, however, continues to hold it’s stake in the Nepal Joint Venture company.

 

Mr. J. Saxena, Chairman and Managing Director of the Company continues to be a Director on the Board of Neutrahealth PLC.

 

The Company had incorporated a wholly owned subsidiary in Cyprus by the name ‘Somerta Holdings Co. Limited’. From inception no activity was carried out in the said subsidiary. The Directors in their last report, had informed the shareholders that the said Cyprus subsidiary would shortly be closed. Accordingly, application was made for closing the Cyprus subsidiary. The Directors would like to inform the shareholders that the Registrar of Companies, Nicosia has issued a Certificate dated 5th May 2010 certifying that the name of Somerta Holdings Co. Limited has been struck off the Register under the Companies Law Cap. 113, Section 327 on the 28th April 2010. However, since the closure has taken place after the close of the accounting year the accounts of the said Cyprus subsidiary are attached as a part of annual accounts and are included in the Consolidated Accounts of the Company for the year ended 31st March 2010.

 

 

Fixed Assets:

 

  • Land (Freehold and Leasehold)
  • Building
  • Plant and Machinery
  • R and D Building
  • Plant and Machinery
  • Furniture and Fixture
  • R and D Furniture and Fixture
  • Motor Vehicles

 

Intangible

 

  • Trademarks
  • Technical Know - How

 

 

Contingent Liability:

                                                                                                                                                          (Rs. in Millions)

Particulars

31.03.2010

31.03.2009

Letters of Credit

293.374

220.839

Bank Guarantees

18.039

22.208

Corporate Guarantees to Subsidiary

0.000

1398.670

Disputed liability in respect of:

 

 

Income Tax

7.379

26.314

Sales Tax

1.756

0.861

Customs Duty

4.950

4.950

Excise Duty

1.255

0.794

Total

357.984

1705.8669

 

 

Website Details:

 

INTRODUCTION

 

Subject ranked as the 28th (ORG-IMS) largest pharmaceutical company commenced operations in 1989.It is rated as the third fastest growing company, by revenue, in the pharmaceutical industry in FY 2010 in India.

 

Subject’s principal activities include the manufacturing and marketing of prescription pharmaceutical brands, surgical and medical devices. Shelcal Elder’s No.1 brand is one of the top brands in the Indian Pharmaceutical industry. We believe that we are one of the leading players in the pharmaceutical formulation market in India, being a market leader in three therapeutic segments - Women’s Healthcare, Wound Care and Nutraceuticals.

Our strategic alliances with a number of international pharmaceutical entities for marketing their products in India and overseas international acquisitions have strengthened and enabled us to become a true-global pharmaceutical company.

 

Internationally benchmarked plants

 

Elder manufactures API and formulations across 6 manufacturing plants in India and one in Nepal possessing a capability to manufacture various dosage forms like tablets, capsules, syrups, injectibles, topical creams and ointments.

 

Over the years, Elder upgraded its capacities in line with international standards to cater to the requirements of a wider patient community. Even as it upgraded its facilities, it also invested in capacity expansion through investments in internationally benchmarked greenfield facilities.

 
CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                              None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.44.90

UK Pound

1

Rs.72.54

Euro

1

Rs.63.39

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

7

PAID-UP CAPITAL

1~10

7

OPERATING SCALE

1~10

7

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

8

--PROFITABILIRY

1~10

8

--LIQUIDITY

1~10

7

--LEVERAGE

1~10

7

--RESERVES

1~10

8

--CREDIT LINES

1~10

6

--MARGINS

-5~5

 

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

YES

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

65

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

RATING EXPLANATIONS

 

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

-

NB

                                       New Business

-

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.