Executive Summary

Receivable management is one of the m o s t i m p o r t a n t a s p e c t s o f t h e

organization, as it deals with the management of the
outstanding. The profit of the company mainly depends on the
a c c o u n t s r e c e i v a b l e s . Therefore it needs a careful analysis and proper management.
Debtors occupy an important position in the structure of current assets of a
firm. They are the outcome of rapid growth of trade credit granted by the firms
to their customers. Trade credit is the most prominent force of modern business.
It is considered as a marketing tool acting as a bridge for the movement of goods
through production and distribution stages to customers

Industry overview

Indias pharmaceutical sector has seen unwavering growth in the past few years,
going up to 23 billion USD in 2012 from 23 billion USD in 2002. Various industry reports
suggest that the pharmaceutical sector in India has been growing consistently at the rate of
13-14 % every year since the last five years. According to the consulting firm McKinsey &
Company, Indias pharmaceutical sector will touch 55 billion USD by 2020 and generics are
expected to continue to dominate the market while patent-protected products are likely to
constitute 10 per cent of the market till 2015.

Indian pharmaceutical industry companies can broadly be classified as domestic

companies and foreign companies (MNCs). Some of the major players include
GlaxoSmithKline, Cipla, Dr. Reddys Laboratories, Ranbaxy, Pfizer etc. Financial year 2013
was challenging on the domestic front and witnessed sluggish growth owing to acute
competition from unlisted players and so on. Growth in the sector is expected to be boosted
this year due to increasing consumer spending, rapid urbanization et al.

There has been a paradigm shift in the attitude of people in India towards healthcare.
Alarming rise in cases of cardiovascular problems, nervous system disorders, diabetes and
many other diseases as well as disorders has created more awareness in the growing
population about the need of improvement in medical sector. Therefore, there is a great need
for pharmaceutical companies to invest their time and resources in research and development
of new, efficient and cost effective drugs.

India has an organized pharmaceutical market of its own, which is being considered
as a potential partner by other countries. The Indian Pharma Market is ranked number 3 in
terms of volume and 10th in terms of market value. Indian pharma companies are also
proving to be global leaders in production of generics and vaccines.

According to a report by the Department of Industrial Policy and Promotion (DIPP),

India has attracted Direct Foreign Investment of US$ 11,391.03 million from April 20002013 and will see an upsurge in the years to come. Biopharmaceuticals is also increasingly
becoming an area of interest given the complexity in manufacture and limited competition.

According to a report by IMS Health, the domestic pharmaceutical market has seen a
growth of 13.5 % and recorded total sales of Rs 6,883 crore (US$ 1.12 billion) in the month
of July 2013. The major reasons for this growth can be attributed to continual growth in
prolonged therapies, increasing sales of generic medicines and strengthening hold over rural
markets.

Company Profile
Employment Trends
With the expected growth rate of 14% per annum, Indian Pharmaceutical sector is
expected to create more jobs in India in 2014 and add 45,000 fresh openings to its current
strength. Not marred by recession or inflation, the pharma sector has a competitive advantage
of prospering steadily and thus attracts lots of young professionals looking at pharmaceutical
as their prospective career option. This sector has also been responsible in creating a rich
talent pool of researchers, scientists, doctors and project managers.

The need of skilled manpower in the pharmaceutical industry ranges widely from
R&D, Quality Assurance (QA), Intellectual Property (IP), manufacturing to even sales and
marketing. What the pharma industry needs is to have better policies to retain and nurture the
existing talent and equip them with necessary skills. However, this sector is emerging as a
popular choice amongst Gen Y, since the nature of work, primarily treating patients and
research for new drug discoveries plays an integral role in meeting their key career
aspirations.

Challenges

Greater customer expectations.

Restricted discovery and developing process.

Effective product life-cycle management.

Increase in pricing policies.

Traditional management culture.

Infrastructure challenges.

Talent retention.

Road Ahead
Growing at a consistent rate, PwC-CII report titled India Pharma Inc: Gearing up for
the next level of growth suggests that the Indian pharma industry is likely to be in the top 10
global markets in value terms by 2020. The report highlighted that the driving growth in the
domestic market is due to high burden of disease, good economic growth leading to higher
disposable incomes, improvements in healthcare infrastructure and improved healthcare.

New small and medium enterprises (SMEs) are also likely to play a substantial role in
the growth of the India's pharma sector. According to the consulting firm Grant Thornton, the

Company Profile
country will also see the largest number of merger and acquisitions (M&A) in the
pharmaceutical and healthcare sector in the coming years. The domestic market is likely to
contribute 3540 per cent to the industry in terms of production with a turnover of about Rs
35,000 crore (US$ 5.70 billion).

Global players can explore opportunities in India by outsourcing research based

capabilities, licensing to establish a common platform to create a complete therapy range,
franchising and joint-ventures to associate with domestic players and use local talent and
expertise to get quick government approval and function better. Some multinational
companies such as Pfizer and Novartis are already taking advantage of the potential in India
through partially or wholly owned subsidiaries.

The global pharmaceutical market in 2013 crossed US$ 1 trillion and is expected to
reach around
US$ 1.2 trillion by 2016. The generic formulation market for the year 2013
contributed more than
US$ 300 billion and is projected to grow at 12% per annum in the coming years. By
2020, India is
expected to be amongst the top 3 pharmaceutical markets globally, in terms of
incremental growth and
the 6th largest market in absolute size. USA, Japan and Europe constitute around
34%, 24%, 12%
respectively and 70% collectively of the global pharmaceutical market. These
markets, however, are
growing at a slower rate due to loss of patent exclusivity, fewer new product
approvals and price
erosions due to generic competition. In contrast, pharmaceutical markets of emerging
economies are
growing at a much faster rate of 10% to 14% per annum, driven by improved per
capita income,
increased access to modern medicines and strengthening of healthcare infrastructure.
Indian Pharmaceutical Market (IPM) for the year 2013-14 is at ` 75,757 crores with a
growth of 6.2 %.
The acute segment at ` 53,749 crores, contributing to 71% of IPM has grown at 4.4%.
The chronic

Company Profile
Overview :

Indoco Remedies is engaged in the manufacturing and marketing of Formulations (Finished

Dosage Forms) and Active Pharmaceutical Ingredients (APIs) in India. Indoco has a strong
international presence in the Regulated and Emerging markets. The Company is striving to
place itself on a strong promising path by expanding its business strategically, strengthening
its manufacturing facilities and enhancing capabilities across the organization. The Company
is looking at various opportunities in untapped markets and association with business
partners in the global markets to boost its revenues.
As a company, Indoco remains focused on APIs & Formulations business and will be
looking to expand the same, both in the domestic as well as international markets. Indoco
today, has a well-built brand portfolio of 135 products in various therapeutic segments,
including high growth life style segments such as Anti-Diabetics, Cardiovascular, Central
Nervous System, Musculo-Skeletal, Nutrition and Dental care.

Global Footprint :

Indoco has built a visible presence across all it's markets in Europe, USA, Asia, Africa, Latin
America and other CIS countries. A number of its products have emerged as brand leaders in
the Indian and in International markets. Indoco has made significant investments to build
capabilities in API manufacturing and R & D services to enhance its visibility. As of today,
the company operates in over 35 countries globally for Formulations and APIs. With
approval of its Finished Dosage facilities by the US - FDA, Darmstadt Germany, TGA
Australia, MCC-South Africa and UK - MHRA, Indoco has emerged as the most suitable
partner and provider of Contract Research and Manufacturing Services (CRAMS) to its
customers globally. With a sizeable basket of own Dossiers in CTD format, Indoco is all set
to offer the full range of services including APIs with DMFs/CoS and CTD Dossiers with
supply of Finished Dosages.
segment at ` 22,008 crores, contributing to 29% of IPM has grown at 10.9%. Pharma
exports from India
aggregated to USD 14.84 billion during the year 2013-14. As structural growth drivers
remain favourable,
the Indian pharmaceutical industry will continue to experience strong growth.

Company Profile
History :
In 1945, a Goan entrepreneur Mr. Govind Ramnath Kare, who was in the business of
wholesale and retail trade of pharmaceuticals, started a firm which he named Indo
Continental Trading Company.
The principal business of this firm was to import pharmaceutical formulations from Europe
and distribute them in Western India.
However in 1947, after India became independent, the new Government in its bid to
encourage indigenous manufacturing of medicines banned import of several formulations.
Mr. G.R. Kare instead of being discouraged decided to venture into manufacturing of
pharmaceuticals.
Accordingly, on 23rd August 1947, a week after India's independence, a new Company was
founded with the intent to manufacture and sell pharmaceutical formulations.
Thus, Indo Continental Trading Company became Indoco Remedies Limited.

Departments and manufacturing process

Departments
A] Finance Department

Finance and banking

Accounts Department
Credit Control Department
Costing Department
Internal Audit department
Treasury Department

B] Marketing Department

Marketing Department
Sales and administration department
Marketing and product management team

C] Personnel and HR department

D] Distribution Department

Company Profile
E] Purchase department
F] Research and Development Department
Quality Control Department
Regulatory Affairs
G] International Business Department
H] Operational Department/ Manufacturing Department
1) Formulation
a) Tablet
b) Liquid
c) Cream
2) API

Manufacturing Process
Shifter

Planetary

Multi

Fluid

Mixer

Mill

Bed Dryer

Compression
machine
Coating and
Stripping
Packing

Company Profile
Important Statistical Information
Companys performance in its respective fields

Gross Sales

Gross Sales
80000
70000
60000
50000
40000
30000
20000
10000
0

Export

Export
30000
25000
20000
15000
10000
5000
0

R&D Expenditure

Export

Company Profile
R&D Expenditure
3000
2500
2000
1500

R&D Expenditure

1000
500
0

Net Profit

Net profit
7000
6000
5000
4000
3000
2000
1000
0

Net profit

Company Profile
Net Profit Margin

Net Profit Margin

14
12
10
8
Net Profit Margin

6
4
2
0

Return on Net Worth

Return on Net Worth

20
18
16
14
12
10
8
6
4
2
0

Return on Net Worth

Company Profile

Working Capital

Working Capital
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0

Working Capital

Margins and Ratios

Margins and
Ratios
EBITDA
Margins on
Net Sales
(%)
PAT Margins
on Net Sales
(%)
Debt to
Equity
(times)
Interest
Coverage
(times)
Return on

20062007
20.05

20072008
19.95

20082009
16.86

Duration
20092010
16.94

20102011
17.09

2012012
17.03

20122013
16.82

20132014
18.75

12.90

11.46

8.97

10.57

10.68

8.27

6.81

8.07

0.15

0.13

0.20

0.21

0.15

0.12

0.07

0.03

9.26

9.32

6.38

15.49

22.28

8.92

6.07

7.18

18.08

11.86

11.30

13.56

14.60

12.20

10.30

12.70

Company Profile
Net Worth
(%)
Return on
Capital
Employed

14.56

9.71

8.81

10.50

10.74

10.90

9.80

13.70

Management of trade credit is commonly known as Management of Receivables.

Receivables are one of the three primary components of working capital, the other being
inventory and cash, the other being inventory and cash. Receivables occupy second important
place after inventories and thereby constitute a substantial portion of current assets in several
firms. The capital invested in receivables is almost of the same amount as that invested in
cash and inventories. Receivables thus, form about one third of current assets in India. Trade
credit is an important market tool. As, it acts like a bridge for mobilization of goods from
production to distribution stages in the field of marketing. Receivables provide protection to
sales from competitions. It acts no less than a magnet in attracting potential customers to buy
the product at terms and conditions favourable to them as well as to the firm. Receivables
management demands due consideration not financial executive not only because cost and
risk are associated with this investment but also for the reason that each rupee can contribute
to firm's net worth.