A

PROJECT REPORT
ON

CONDUCTED AT
NECTAR LIFESCIENCES LTD.

SUBMITTED TO
Gautam Group Of College Hamirpur(H.P.) in the Partial Fulfillment
for the Degree of Master in Business Administration
(Session 2016-2018)-MBA 3rd Semester

Under Supervision of: Submitted By:

Dr. Ashok Kumar Bansal Sunil Kumar
(HOD) Faculty, MBA S/O Sh. Pritam Chand
Univ1601028056
Univ. Roll. No. ...

GGC HAMIRPUR

Gautam Institute Of Management & Technology

(Affiliated to Himachal Pradesh Technical University, Hamirpur & Approved
By AICTE)
Gautam Group Of Colleges, Hamirpur 177001 (H.P.)
Ph. 1972-221493. Fax: +91 1972 221635
E-mail: drpappaa1042 [email protected] om, Web Site: www.ggchamirpur.com
 CONTENTS

Sr. No. Chapter Particular Page

No.
1 Certificate from the Organization
2 Certificate from the Institute supervisor
3 Acknowledgement
4 Preface
5 Executive Summary
6 Chapter:- 1 Introduction
7 Profile of the Industry
8 Profile of Organization
9 SWOT Analysis
10 Organizational Structure
11 Profile of Study
12 Justification of Study
13 Chapter:- 2 Weekly Report
14 Chapter:- 3 Recommendations
15 Policy Implications
16 Conclusion
17 Bibliography
18 Annexure
 ACKNOWLEDGEMENT
No Task is single mans effort. Any job in this world however trivial or tough cannot be
accomplished without the assistance of others. An assignment puts the knowledge and
experience of an individual to litmus test. There is always a sense of gratitude that one
likes to express towards the persons who helped to change an effort in a success. The
opportunity that I got to work with experienced people is quite unparallel. I would hereby
take the opportunity to express my indebtedness to people who have helped me to
accomplish this task.
I deem it a proud privilege to extend my greatest sense of gratitude to my guide
MR. RAKESH KUMAR (SENIOR MANAGER FINANCE) for the keen interest,
inspiring guidance, continuous encouragement, valuable suggestions and constructive
criticism throughout the pursuance of this report.
Further words of thanks are expressed to MR. NANAK CHAND (SENIOR
MANAGER ACCOUNTS) and all other staff members without whose help it would not
possible to collect the information and data.
I am thankful to Director Sir Sh. JAGDISH GAUTAM & Principal Sir DR.
RAJNEESH GAUTAM for granting me the permission to undertake the study. I
would like to convey thanks to DR. ASHOK KUMAR BANSAL (HOD), GGC for
ready assistance, keen interest and valuable suggestions.
Last but not the least, it would be unfair if I do not extend my indebtedness to my
parents and all my friends for their active cooperation which was of great help during the
course of my training project.

SUNIL KUMAR
 PREFACE
Using a new pattern based on proper integration of formal teaching and actual practice,
the M.B.A. Program of H.P.T.U. has its course for six weeks industrial training ,after the
second semester ,so as the students could begin to have the feeling of business
environment right in the beginning. Practical training constitutes an integral part of
management studies. Training gives an opportunity to the students to expose themselves
to the industrial environment, which is quite different from the classroom teachings. The
practical knowledge is an important suffix to the theoretical knowledge. One cannot rely
merely upon theoretical knowledge. It has to be coupled with practical for it to be fruitful.
The training also enables the management students to themselves see the working
conditions under which they have to work in the future.
After Liberlization of Indian economy sense is changed because of Multi National
Companies continuously coming with their Technical Expertise and improved
management concepts. Industrial activity in India has become a thing to watch and I
really wanted to be a part of it and it is essential for me being a finance student.
I consider myself lucky to get my summer training in pharmaceutical company
NECTAR LIFESCIENCES LIMITED. I underwent six weeks of training at
Chandigarh, Head office of NLL. It really helped me to get a practical insight into the
actual business environment and provide me an opportunity to make my Financial
Management concepts more clear. The advantage of this sort of integration which
promotes guided adjustment to corporate culture, functional, social and other norms with
formal teaching are:
To bridge the gap between theory and practice.
To install feeling of belongingness and acceptance.
To cultivate proper temperament & to generate much morale.
To help students identify their strong &weak points in the following &
appreciating organizational activities.
To acquaint students with job performance standards.
I believe that this knowledgeable endeavor of mine has prepared me slowly but
surely for taking up new challenging opportunities in future.
 EXECUTIVE SUMMARY
Undertake something is Difficult,
It will do you good,
Unless you try to do something
Beyond what you have already mastered
You will never grew

RONALDE.OSBORN

I did my training in NECTAR LIFESCIENCES LTD. at Chandigarh. NECTAR

LIFESCIENCES LTD. was originally incorporated as SURYA MEDICARE LTD. On
June 27, 1995 as a public limited company following collaboration between the
promoters and Punjab State Industrial Development Corporation. On March26,2004,
company name was changed to Nectar Lifesciences Ltd. (popularly called as Neclife)
Neclife manufacture a wide range of second, third and fourth generation oral and sterile
cephalosporins such as cefixime trihydrate, cefdinir, ceftazidime sodium, cefuroxime
sodium and cefazoline sodium amongst others

The concept of this project is to check whether NLL is performing well year after year or
lacking in performance. The performance can be evaluated by doing Financial Analysis
of Financial statements of company. The purpose of this project is to evaluate the
performance of NLL and to make comparative financial analysis of NLL with its
competitor AUROBINDO PHARMA LTD. It primarily aims at learning the various
factors that can help in evaluation process. I have tried to find out the reasons or ground
where it is lacking or gaining in comparison to AUROBINDO PHARMA LTD. I have
also tried to find out the areas of improvement.
In order to do financial analysis of Co. the various accounting tools like RATIO
ANALYSIS, COMPARATIVE FINANCIAL STATEMENTS AND TREND
PERCENTAGES have been used. In Statistical tools, I have used CORRELATION,
TIME SERIES ANALYSIS (TREND VALUES). In Hypothesis Testing, I have used
ANOVA TEST. The project also includes Objective of Study, Research Methodology,
Analysis and Interpretation, Findings, Recommendations, Limitation of Study,
Conclusion, Bibliography and Annexure.
 INDUSTRY PROFILE
The Indian Pharmaceutical Industry today is in front rank of Indias science based
industries with wide ranging capabilities in complex field of drug manufacture and
technology. A highly organized sector, the Indian Pharmaceutical Industry is estimated to
be worth $4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in third
world, in terms of technology, quality and range of medicines manufactured. From
simple headache pills to sophisticated antibiotics and complex cardiac compounds,
almost every type of medicine is now made indigenously. The pharmaceutical Industry is
one of the fast growing sectors of Indian Economy and has made rapid strides over the
years. From being an import dependent industry in the 1950s, the industry has achieved
self sufficiency and gained global recognition as a producer of low cost high quality bulk
drugs and formulations. Leading Indian companies have developed infrastructure in over
60 countries including developed markets like USA and Europe. In the last few years,
several pharmaceutical companies, including MNCs have demonstrated that they possess
the ability to engage in commercially viable research and development activities and
become significant players in the International Market.

Playing a key role in promoting and sustaining development in the vital field of
medicines, the Indian Pharmaceutical Industry boasts of quality producers and many units
approved by Regulatory Authorities in USA and UK. International companies associated
with this sector have stimulated, assisted and spearheaded this dynamic development in
the past 60 years and helped to put India on the pharmaceutical map of the world.

The Indian Pharmaceutical sector is highly fragmented with more than 20000 registered
units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical
companies control 70% of the market with market leader holding nearly 7% of the market
share. It is an extremely fragmented market with severe price competition and
government price control. The pharmaceutical Industry in India around 70% of the
countrys demand for bulk drugs, drug inter mediates, pharmaceutical formulations,
chemicals, tablets, capsules, orals and injectibles. There are about 250 large units and
about 8000 small scale units, which form the core of the pharmaceutical Industry in India
(Including 5 central public sector units). These units produce the complete range of
pharmaceutical formulations, i.e. medicines ready for consumptions by patients and about
350 bulk drugs i.e. chemicals having therapeutic value and used for production of
pharmaceutical formulations.

Although India accounts for 16% of world population, the sales of pharmaceuticals are
just 1.8% of the global sales in terms of value and 8% in terms of volume. However
globally it ranks 4th in volume and 14th in value terms. Following the delicensing of
pharmaceutical industry, industrial licensing for most of the drugs and pharmaceutical
products has been done away with. Manufactures are free to produce and drug duty
approved by the drug control authority. Technologically strong and totally self reliant the
pharmaceutical industry in India has low costs of production, low R&D costs, innovative
scientific manpower strength of national laboratories and un increasing balance of Trade.
The pharmaceutical industry, with its rich scientific talents and research capabilities,
supported by intellectual property protection regime is well set to take on the
international market.

Advantage India
Competent workforce India has a pool of personnel with high managerial and
technical competence as also skilled workforce. It has an educated workforce and English
is commonly used professional services are easily available.

Cost effective chemical synthesis Its track record of development particularly in the
area of improved cost beneficial chemical synthesis for various drug molecules is
excellent. It provides a work variety of bulk drugs and exports sophisticated bulk drugs.

Legal & Financial Framework India is a 62 year old democracy and hence has a
solid legal framework and strong financial markets. There is already an established
international industry and business community.
Information and Technology It has a good network of world class educational
institutions and established strengths in information technology.

Globalizations the country is committed to a free market economy and globalization.

Above all it has a 70 million middle class market, which is continuously growing.

The Indian pharmaceutical industry has the highest number of plants approved by US
food and drug administration (FDA) outside the US. It also has the largest number of
Drug Master Files (DMFs) filed which gives it access to the high growth generic bulk
drugs market. The Industry now produces bulk drugs belonging to all major therapeutic
groups requiring complicated manufacturing Practices (GMP) compliant facilities for the
production of different dosage forms. To facilitate the sectors growth, the Indian
government has announced exemptions from import licenses to foreign pharmaceutical
units setting up their manufacturing units in Special Economic Zones.

Setting up a plant is 40% cheaper in India compared to developed countries and the cost
of bulk drug production is 60-70 percent less. The strength of Industry is in developing
cost effective technologies. The Indian pharmaceutical Industry ranks 17th in terms of
Export value of bulk activities and dosage forms. The pharmaceutical exports increased
at 22.6% during the period for FY 2004-2014. Factors such as the Industrys cost
competitiveness, the established quality of its products and its internationally approved
manufacturing facilities have enabled the industry to make a place for itself in the
international market. During the year 2014 exports stood at Rs.1668114 lacs. Indian
exports are destined to more than 200 countries around the globe including highly
regulated markets of US, Europe, Japan and Australia.

Indian Pharma Industry: From 2009-2014. It is often said that the Pharma sector has no
cyclical factor attached to it. Irrespective of whether the economy is in a downturn or in
an upturn, the general belief is that demand for drugs is likely to grow steadily over the
long-term true in some sense.

Lets look a little back in the industrys last six years performance. The Industry is a
largely fragmented and highly competitive with a large number of players having interest
in it. The following chart shows the breakup of the growth (YoY) of Indian
Pharmaceutical industry in last six years.

*Volume growth of existing products

The Indian Pharmaceutical Industry: Beyond 2015

The pharmaceutical industry is a lifeline industry that plays a very crucial role in building
a strong human capital of the country and is very essential for economic growth and
development. Today, it is at the top end of Indias science based industries with wide
ranging capabilities in the complex field of drug manufacture and technology. The
contribution of the pharmaceutical industry towards the nations growth cannot be
undermined.
The Indian Pharmaceutical industry supplies essential drugs to its consumers at much
lower rates than any of its counterparts in the world. For E.g. prices of cardiovascular
drugs in India such as Atenolol and Enalapril are 20-30 times less than the US prices.
This fact is particularly significant in a country where availability of inexpensive
medicines is crucial to health care masses. The pharmaceutical industry in India being
highly fragmented has a wide range of over 100,000 drugs, (which includes vitamins,
antibiotics, antibacterial, cardiovascular drugs etc.). Nearly 80% of the manufacturers
have sales less than 100 crores. The top ten companies in the industry control around 31
per cent of the market.

SWOT ANALYSIS OF PHARMACEUTICAL INDUSTRY

A Company empowered by ONE mission to place itself on the world map. An

enterprise propelled by ONE force - those synergies its energies to charter
unexplored markets. An organization fuelled by ONE dream to
transform competition into opportunity.

The SWOT analysis of the industry reveals the position of the Indian Pharma industry in
respect to its internal and external environment:-
Strengths:

1. India with a population of over a billion is a largely untapped market. In fact the
penetration of modern medicine is less than 30% in India. To put things in
perspective, per capita expenditure on health care in India is US$ 93 while the
same for countries like Brazil is US$ 453 and Malaysia US$189.
2. The growth of middle class in the country has resulted in fast changing lifestyles
in urban and to some extent rural centers. This opens a huge market for lifestyle
drugs, which has a very low contribution in the Indian markets.
3. Indian manufacturers are one of the lowest cost producers of drugs in the world.
With a scalable labor force, Indian manufactures can produce drugs at 40% to
50% of the cost to the rest of the world. In some cases, this cost is as low as 90%.
4. Indian Pharmaceutical industry posses excellent chemistry and process
reengineering skills. This adds to the competitive advantage of the Indian
companies. The strength in chemistry skill helps Indian companies to develop
processes, which are cost effective.

Weakness:
1. The Indian Pharma companies are marred by the price regulation. Over a period
of time, this regulation has reduced the pricing ability of companies. The NPPA
(National Pharma Pricing Authority), which is the authority to decide the various
pricing parameters, sets prices of different drugs, which leads to lower
profitability for the companies. The companies, which are lowest cost producers,
are at advantage while those who cannot produce have either to stop production or
bear losses.
2. Indian Pharma sector has been marred by lack of product patent, which prevents
global Pharma companies to introduce new drugs in the country and discourages
innovation and drug discovery. But this has provided an upper hand to the Indian
Pharma companies.
3. Indian Pharma market is one of the least penetrated in the world. However,
growth has been slow to come by. As a result, Indian majors are relying on
 exports for growth. To put things in to perspective, India accounts for almost 16%
of the world population while the total size of industry is just 1% of the global
Pharma industry.
4. Due to very low barriers to entry, Indian Pharma industry is highly fragmented
with about 300 large manufacturing units and about 18,000 small units spread
across the country. This makes Indian Pharma market increasingly competitive.
The industry witnesses price competition, which reduces the growth of the
industry in value term. To put things in perspective, in the year 2013, the industry
actually grew by 10.4% but due to price competition, the growth in value terms
was 8.2% (prices actually declined by 2.2%)

Opportunities:
1. The migration into a product patent based regime is likely to transform industry
fortunes in the long term. The new patent product regime will bring with it new
innovative drugs. This will increase the profitability of MNC Pharma companies
and will force domestic Pharma companies to focus more on R&D. This
migration could result in consolidation as well. Very small players may not be
able to cope up with the challenging environment and may succumb to giants.
2. Large number of drugs going off-patent in Europe and in the US between
2015to2019 offers a big opportunity for the Indian companies to capture this
market. Since generic drugs are commodities by nature, Indian producers have the
competitive advantage, as they are the lowest cost producers of drugs in the
world.
3. Opening up of health insurance sector and the expected growth in per capita
income are key growth drivers from a long-term perspective. This leads to the
expansion of healthcare industry of which Pharma industry is an integral part.
4. Being the lowest cost producer combined with FDA approved plants; Indian
companies can become a global outsourcing hub for Pharmaceutical products.

Threats:
1. There are certain concerns over the patent regime regarding its current structure.
It might be possible that the new government may change certain provisions of
the patent act formulated by the preceding government.
2. Threats from other low cost countries like China and Israel exist. However, on the
quality front, India is better placed relative to China. So, differentiation in the
contract manufacturing side may wane.
3. The short-term threat for the Pharma industry is the uncertainty regarding the
implementation of VAT. Though this is likely to have a negative impact in the
short-term, the implications over the long-term are positive for the industry.

COMPANY PROFILE

MR. SANJIV GOYAL Chairman cum Managing Director is the main promoter of
company. He is responsible for the incorporation of company. A commerce and law
graduate, Mr. Sanjiv Goyal started his career by setting up a proprietary concern by the
name of M/s Surya Narrow Fabris in Chandigarh in 1987. Mr. Sanjiv Goyal established
our company in 1995 and has been the managing director ever since. The company
became fully operational in April 1997. He has been conferred with Young Innovative
Entrepreneur of the year 2000 This LMA Trident Award was conferred upto by
Ludhiana Management Association. He has been conferred with Young Innovative
Entrepreneur of the year 2000 This LMA Trident Award was conferred upto by
Ludhiana Management Association. He has also been conferred the prestigious
Outstanding Entrepreneurship Award-2014 by a global Non Government Organization
(NGO) for Entrepreneurship, Enterprise Asia. The prestigious Asia
Pacific Entrepreneurship Awards is a world-class awards recognizing and honouring
business leaders who have shown outstanding performance and tenacity in developing
successful businesses. Organized by Enterprise Asia, an NGO promoting the
development of entrepreneurship, the awards aim to band leading entrepreneurs across
the region to spur greater innovation, fair practices and growth in entrepreneurship. It
hopes to be a platform to encourage continued leadership towards sustainable economic
development for the region.

MRS. RAMAN GOYAL, is the co-promoter of Nectar Lifesciences Limited. She started
her career in 1990 from the partnership concern of m/s Kala Elastic. From 1992 to 1997,
she was a Director in Surya Pharmaceutical Limited. Mrs. Goyal has been director in
Neclife.

INTRODUCTION
NECTAR LIFESCIENCES LTD. was originally incorporated as SURYA
MEDICARE LTD. On June 27, 1995 as a public limited company following
collaboration between the promoters and Punjab State Industrial Development
Corporation. On March 26,2004, company name was changed to Nectar Lifesciences Ltd.
(popularly called as Neclife) and in June 2005 came out with a public issue company is
currently listed on the Bombay Stock Exchange and the National Stock Exchange.
Companys wholly owned subsidiary Chempharma was incorporated in Sri Lanka on
October 18, 2002 with the objective of manufacturing API intermediated. Headquartered
at Chandigarh, Nectar Lifesciences manufactures Eutrod starling.

Nectar Lifesciences Ltd. (Nurturing bonds to enrich lifesciences and caring for better
human health) popularly known as Neclife (Nurtring, Enriching, caring for life). Neclife
is amongst the few life saving Active Pharmaceutical ingredients manufacturing
companies.

Oral and Sterile Semi Synthetic Peni cillins (SSP) and cephalosporins at its plants in
Derabassi (Unit 1). An additional cephalosporin unit and non antibiotic plant is being set
up at Derabassi (unit2) which is near the existing facility. The formulates unit is being set
up at Baddi, which enjoys backward integrated and excise duty benefits. The company is
also having ultra modern R&D and quality control centre. Nectar possesses versatile
nature of manufacturing plants in which various products of complex chemistry and
multiple steps can be manufacture. Currently, the company manufactures 14-15 different
products in SSP and cephalosporin range m which essentially are multi staged products.

Company is one of the few companies in India having facilities to manufacture Oral and
Sterile bulk drugs. They are an established manufacturer of SSP and cephalosporin range
of Oral and Sterile Bulk drugs. NLL has been awarded recognition as an Export
House by the Director General of Foreign Trade, Ministry of commerce, Government of
India in April 2003. Nectar Lifesciences has been awarded as Outstanding Exports
Performance Award 2015 by Pharmexcil which is a joint body of Government of India
and Indian Pharmaceutical Industry in Hyderabad on 23.09.2015. Company has also
received WHO-GMP certificates for some products like cefataxime Sodium (Sterile),
Ceftriaxone Sodium (Sterile), cefazolin sodium (Sterile), Cefuroxime Sodium (Sterile),
chloramphenicol Sodium succinate (Sterile), ceftazidim for injection (Sterile) and
cefepime for injection (Sterile).
NLL has been involved in the manufacture and sale of off patented drugs and that the
TRIPS provisions on product patents which became effective from January 2005 does not
have any impact on the performance.

The Existing and Proposed Expansion would increase the presence of company in the
cephalosporins segment, enable to enter into non antibiotic and formulations segment
along with providing unit at Baddi with forward integration strategy which supply the
final product, as a one step further value added to the customers.
It has developed sustainable production system to manufacture highest quality
pharmaceutical products meeting diverse requirements fits customer base in over 45
countries worldwide.
 EXCELLENT INFRASTRUCTURE

Located in the foothills of Himalayas, Nectar has sound infrastructure that enable us to
produce best quality products for international market. Right from production to
packaging, our products pass through stringent quality control tests in distinct units

The manufacturing capacity of the factory is Menthol Crystals 250 MT per month,
Menthol Flakes 150 MT per month and additionally Menthone, various grades of
peppermint oil, Distilled-Menthol Oil etc.
 VISION, MISSION AND OBJECTIVE OF COMPANY

VISION

To become an integrated international pharmaceutical company offering

excellence in product quality standards, services and commitments.

MISSION

To establish ourselves as one of the worlds premier companies in the Pharma

field having strong international competitiveness.
To achieve market leadership in India through ensuring customer satisfaction by
supplying internationally competitive products and services.

OBJECTIVES OF COMPANY

To encourage the modernization of Indian Industry.

To globalize the operations by developing a mix of mix of International
markets.
To ensure a satisfactory return on capital employed.
To produce and offer best quality Menthol products.
Responsive customer services.
Regular and Committed supplies.
To achieve long term perspective for Menthol business and Contacts.
 PRODUCT RANGE
Neclife manufacture a wide range of second, third and fourth generation oral and sterile
cephalosporins such as cefixime trihydrate, cefdinir, ceftazidime sodium, cefuroxime
sodium and cefazoline sodium amongst others.
ACTIVE PHARMACEUTICAL INGREDIENTS

Cephalosporins SSPs and Others

Cephalothin Sodium Cloxacillin Sodium

Cefazolin Sodium Dicloxacillin Sodium
Cefprozil Flucloxacillin Sodium
Cefuroxime Axetil Oxacillin Sodium
Cefuroxime Sodium Chloramphenicol Sodium
Cefdinir Sulbactum Sodium
Cefixime Trihydrate Clarithromycin
Cefpodoxime Proxetil Azithromycin Dihydrate
Cefoperzone Sodium Tazobactum + Piperacillin
Cefotaxime Sodium Meropenem
Ceftriaxone Sodium
Ceftazidime
Cefepime
Products in Pipeline
Cefcapene Pivoxil
Cefditoren Pivoxil
Cefoxitin Sodium
Cefonicid Sodium
 MANUFACTURING EXPERTISE
Company has put in place a dedicated facility to manufacture Cephalosporins
and SSP with an installed capacity of 550 mts per annum.
Granted Export House Status Nectars manufacturing facilities adhere to
existing environment regulations and have received WHO-GMP certification
from the state Drugs Controlling Authority, Directorate of Health and Family
Welfare, Punjab for various products manufactured by company.
Companys leadership position in cephalosporins enables company to offer newer
products to its customers by leveraging existing in house research capabilities and
by building stronger relationships with its suppliers.
Company possess hi-tech infrastructure a research facilities and co. continuous
focus on research and development has enabled co. to develop new drugs and
innovate and cost effective process as that require shorter time span.
MANUFACTURING Units:

Finished Dosage Facility

API & Sterile Units

 RESEARCH AND DEVELOPMENT CAPABILITIES

Nectars R&D efforts focus primarily on upgrading existing manufacturing

facilities, increase process efficiencies and developing new drug molecules. To
support these R&D efforts, co. has set up well equipped laboratories with a focus
on engine:
Improving manufacturing efficiency and lowering cost of products through
optimum raw material sourcing, process reengineering and improvising on
production techniques.
Developing newer high and range of cephalosporins and patent non infringing
process for our product range and innovating on one manufacturing technology
currently used in order to manufacture superior products that address changing
customer needs. Over the last three years, Nectar has developed and
commercialized the following technologies:
- Ceftazidime Buffered With Sodium.
- Cefepime Hydrochloride Buffered With Agrinine
- Cefpodoxime Proxetil
- Cefuroxime Axetil Amorphous
- Cefixime Trihydrate
- Cefprozil Monohydrate

Nectar set up a new ultra Modern R&D and Quality Control Centre at Derabassi. This
new centre has six strategic units, each established to perform a specific function

Active Pharmaceutical Ingredients Group

Product Development
 Analytical Development Group
Regulatory Affairs Group
Packaging Development Group

SALES AND MARKETING NETWORK

Having been in the business of manufacturing pharmaceutical products in India for the
last eight years co. has built up a strong presence in the domestic and international
markets. Companys marketing and distribution teams are organised on the basis of
targeted markets and further subdivided on the basis of product segments.

DOMESTIC NETWORK
Over the years, significant investments has been made to develop and strengthen
the domestic distribution network comprising both the agents network and the
companys direct selling network.
Sales agents are appointed at strategic locations like Mumbai, Chennai and
Kolkata to reach out to customers in these areas.
The entire range of products is being sold to about 300 customers thus reducing
client concentration risks.
Emphasis on time bound delivery schedules and quality standards helps retain
customers.
The sales team remains in constant touch with the customers to understand their
needs, estimate future inventories and provide in time supplies.
Contract manufacturing has emerged as an important focus area for the company
with clients comprising most of Indias leading pharmaceutical companies.

INTERNATIONAL NETWORK
Company has established a strong global presence with their products being supplied to
customers in China, Korea, HongKong, South East Asia, Europe and in African and
South American countries.
The Company undertook initiatives to create awareness about its products (mainly SSP
and cephaloporins) through customer contact programme in the process of getting
products registered in the regulated markets to earn higher margins. Company
participates in exhibitions and events to showcase the companys entire product range.
CONTRACT MANUFACTURING
Companys manufacturing plants can produce a wide range of products through a
synergy of processes. Company versatile manufacturing set up, which can be upgraded
through a minimal amount of investment, helps the company respond to changing
customer demands, ensuring a profitable relationship for both the company and
customers who do not have to spend on manufacturing. As a result, today company
provides contract manufacturing services to some of the Indias leading pharmaceutical
companies. Companys R & D focus on process improvements, lowering manufacturing
costs and improving process reengineering capabilities has enabled company to undertake
large and complex manufacturing contracts with the company current order book. The
companys total revenue are going forward, company expects this business to generate
revenue of Rs. 70 mn. by 2018 year.
NECTAR RENDERS THE FOLLOWING CONTRACT
MANUFACTURING SERVICES:
Lab scale quantities from gram to kilogram that meet customer
satisfaction.
Tailored services by qualified and experienced staff including briefing of
day to day progress.
Scaling up of processes through pilot to plant stages.
Adhering to ISO 9001 and CGMP standards through the development of
processes.
Confidentiality and transparency of all developments strict conformance to
timeliness up to product delivery.
Auditors Datta Singla & Co., Chartered Accountants
SCO No. 2935-36, Ist Floor, Sector
22-C, Chandigarh

Bankers Punjab National Bank, Sector 16D,

Chandigarh, State Bank of India,
Specialized commercial Branch, Sector
17B, Chandigarh

Registered Office Village Saidpura, Tehsil Derabassi Distt.

Mohali (Punjab) India
Ph: 01762-308000, 308001

Corporate Office SCO 38-39

Sector 9-D, CHD,
160009(U.T.) India
Ph: 0172-3047777
Fax: 0172-3047753
 ISSUE DETAILS OF (NLL)

The company came out with its IPO in July 2005 and offered equity shares at Rs.
240 per share. The IPO was oversubscribed by over 15 times.

Offer Price Band Rs.200-240

Face Value Rs.10

Shares offered 3870000

Type Fresh Issue

Promoter Mr. Sanjiv Goyal and Mrs. Raman Goyal

Listing(Stock Exchange) NSE & BSE

Offer open date June 22,2005

Offer close date June 28,2005

Shareholding Pattern Preoffer Post offer

Promoters & Groups 89.1 65.9

Others 10.9 8.1

Public & Others 26

Minimum Application 25 Equity shares and in Multiples of 25 equity shares

thereafter Max. Retail Bid Amt. Rs.1 lac.
 SWOT ANALYSIS

STRENGTHS

Highly motivated workers and dedicated officers no industrial relation problem.

An internal audit system commensurate with size and nature of its business.
Co. has complete infrastructure viz modern plant & machinery with qualified staff
and adequate finance facilities
Neclife has been conferred with Export House Status with more than 28% of its
total revenues accruing from exports.
Focus on employee welfare together with programmers reinforcing the team spirit
and values of employees in the organization.
Co. has been regulatory working on modernization and development of its
existing technological system and development of new product & processes.
Experienced promoters with established track record.
No Preference Share Capital.

WEAKNESS

Ineffective promotional and advertising activities.

Co. was dealing only in bulk drugs, now it has entered into formulations, Menthol,
EHGC, Generics & Diagnostics etc. so as such till now; there are no reportable
business segments.
OPPORTUNITIES

As per latest report on pharmaceutical industry, there is immense potential to

become dominant player in antibiotic drugs industry in Indian markets having
fairly large capacities.
Non-antibiotic drugs have vast growing markets.
The size of Indian Pharma market itself is set to grow many times will open a
wide spectrum opportunities for existing players.
Entrance and expansion of formulation segment.
Strong presence in cephalosporin segment.
Co. has set up and ultra modern R&D and quality control centre which will help it
to get competitive edge over its competitors.
Preference Share Capital can be issued.

THREATS

Company faces a stiff competition from competitors in domestic as well as

international market.
Co.s revenue growth is the result of growth in the sales of cephalosporin based
drugs in India. Significant additional competition in the markets where the co.
sells its cephalosporin based drugs and other APIs could erode market shares and
result in reduced prices, which would have an adverse effect on companys
revenue and profitability.
Government regulation may create threat for company.
Threat from natural calamities because if any of its manufacturing facilities were
to be damaged as a result of fire or other natural calamities, it would temporarily
reduce manufacturing capacity and harm the co.
Exchange Rate fluctuations: The company is particularly affected by fluctuations
in the exchange rate between the US dollar and rupee. Any significant fluctuation
in exchange rate may harm the co.
 JUSTIFICATION OF STUDY

In order to win a war, proper armory is required. Similarly in order to run a business
successfully proper and adequate finance is required. Finance is defined as the provision
of money at the time when it is required. Every enterprise whether big or small need
finance to carry on and expand its operations.

Financial Statements are prepared primarily for decision-making. They play a dominant
role in setting the framework of managerial decisions. But the information in the financial
statement is not an end in itself as no meaningful can be drawn from these statements
alone.

The information provided in the financial statement is of immense use in making

decisions through analysis and interpretation of financial statements. The financial
analysis is the process of identifying the financial strength and weaknesses of the firm by
properly establishing relationship between the items of the balance sheet and P/L a/c.

The purpose of financial analysis is to diagnose the information contained in financial

statements so as to judge the profitability and financial soundness of the firm. The
analysis and interpretation of financial statements is essential to bring out the mystery
behind the figures in financial statements.

Financial statement analysis is an attempt to determine the significance and meaning of

financial statement data so that forecast may be made of the future earning, ability to pay
interest and debt maturities and profitability of a sound dividend policy.
 WEEKLY REPORT

RECOMMENDATIONS

Forward Exchange Contracts- A major part of Co. revenue is from Exports.

As rupee is appreciating so Co. is facing danger of decrease in revenues. So Co.
should enter into Forward Exchange Contract in order to reduce its danger arising
from Rupee Appreciation.

Conversions of Stock- Most of funds are blocked in stocks so proper

concentration should be given to conversion of stock into sales.

Operating Expenses- Co. should pay more concentration on its operating

expenses because a major part of Gross Profit is used in doing operating expenses.

Training Centre-Co. is not having any training centre for providing training to
its employees. If there will be training centre then risk which arises during
manufacturing can be reduced.

Stability in Dividend-Co. is following a stable dividend policy. Co. should

make provisions in order to maintain this policy even in the year of crisis.

Risk Management Control System at its Manufacturing Locations-Due

to the use of flammable material at its manufacturing unit there is remaining a risk
of fire. So Risk Management control system should be at its manufacturing
locations.
 Advertising Budget- Advertising Budget of Co. is not up to the mark.
Marketing efforts of Co. is not sufficient. Co. should focus on its Promotional
activities.

Insurance Expenditure- As there may arise a problem to Co. due to flammable

material used at its manufacturing units. If fire occurs to any of its unit then Co.
may have to face huge losses. But the amount of Insurance to cover these losses
is very less. So Co. should focus on increase its Insurance Expenditure.

Debt Capital: Company should reduce its debt capital because debt capital is
very large than equity capital.

Supervision: There should be proper supervision of employees by any senior

officer.

Credit Policy- Policy regarding providing credit to debtors should be improved.

Before granting credit proper checking of creditworthiness should be done.
 POLICY IMPLICATIONS
I suggested various policies to organization, which I think, that if they will implement
them in the right manner it will lead to increase the earnings of the firm which in turn
increases the goodwill of the firm. If the goodwill of firm is good in the market, then it
will be able to raise funds at low interest rates.
The various policies that should be applied in an organization on the basis of my study of
financial analysis of organization are as follows:
1. Firstly, I suggested that there should be proper supervision in the company. This
suggestion was accepted in between my training. V. P. (finance) himself take this
responsibility and started taking one round in each department of company in
order to reduce time wastage done by employees.

2. Training should be provided to the employees about using of machinery in order

to avoid risk of flammable material used at manufacturing units.

3. Rather than giving importance to lenient debt policy, they should focus on quick
collection of amount from debtors.

4. Average payment period to creditors should be decreased

5. Operating expenses play an important role in profitability of concern. So there
should be proper record of operating expenses and try to control them.

6. In order to increase its sales, rather than just going for Contract manufacturing,
Co. should also go for Personal Selling, Advertising Media also.

7. Amount of Debt Capital should be reduced because it is very large than share
capital. Co. is more dependent on debt capital rather than equity capital.

8. In order to avoid loss from Foreign Exchange Fluctuation, Co. should go for
Forward Exchange Contract.
I got a good response from them for suggestions given by me. V.P.(finance) said to me
that there are some loopholes which we want to remove but time is very important factor.
Some solutions can be applicable in long term only. It is difficult to implement them in
shorter time period. He has appreciated my efforts and on my behalf, he discusses
suggestions given by me with other officials.

The management replied that they will think over the suggestions offered by me in
effectively operation of company and implementation of policy on the related issues
depends upon the result of discussion among the top executives of Company.
 CONCLUSION

After all study of the project of COMPARATIVE FINANCIAL ANALYSIS in Nectar

Life sciences limited, the result which I found in this study are as follow:-

1. The company has satisfactory liquidity position.

2. Companys operating expenses are not satisfactory.
3. Although Co. is behind Aurobindo Pharma but rate of growth of company is more
than Aurobindo Pharma.
4. Co. is having high growth prospects in Non-Antibiotic segment.
5. Co. is more dependent on debt capital .So Co. should make efforts to reduce its
debt capital.
6. Co. is following stable dividend policy.
7. Co. is more focusing on retention of profits rather than distributing them as
dividend.
8. Profits and sales of NLL show an increasing trend while of Aurobindo Pharma
shows fluctuations.
9. There is a positive high degree of correlation between profits and sales of NLL
but low degree of correlation between sales and profits of Aurobindo Pharma.
 BIBLIOGRAPHY
Books:
1) Kothari C.R., Quantitative Techniques, ed 2005,Vikas publishing house Pvt.
Ltd,. New Delhi.
2) Gupta S.P., Business Statistics, 31st edition, 2005, Sultan chand & sons.
3) Mittal.R.K. Management Accounting & Financial Management, V.K. (India)
Enterprises, New Delhi.
4) Gupta S.K.Accounting for managerial decisions, ed. 2004, Kalyani Publishers,
New Delhi.
5) Jain T.R, Statistics for MBA, second ed. 2006-07, V.K.(India) Enterprises.

WEBSITES:
1. http://www.neclife.com/research_development.htm
2. http://www.neclife.com/businessfocus.htm
3. http://www.aurobindo.com/companyhistory.htm
4. http://www.aboutus.org/NecLife.com
5. http://www.aurobindo.com/api.htm
6. http://www.neclife.com/investor_relations.htm
7. http://www.neclife.com/contract_manufacturing_research.htm
8. http://www.neclife.com/snapshots.htm
9. http://en.wikipedia.org/wiki/Nectar_Lifesciences
10. http://www.neclife.com/subsidiaries.htm

Others:
Annual Report of NLL for the year 2013-14, 2014-15 and 2015-16.
Auditors Report of NLL for the year 2013-14, 2014-15 and 2015-16.

ANOVA
ANOVA is essentially a procedure for testing the difference among different groups of
data for homogeneity.
Let us take the null hypothesis that there is no significant difference between the
variables.

YEAR PROFIT BEFORE PROFIT AFTER

TAX(mn) TAX(mn)

2012 99 86

2013 107 92

2014 174 136

2015 185 148

2016 327 280

TOTAL 892 742

MEAN OF SAMPLES
Mean of PBT = M1 = 178.4
Mean of PAT = M2 = 148.4

M12 = 178.4+148.4/2 =163.4

SS BETWEEN
n( M1 M12 )2 + n( M2 M12 )2
5(178.4 163.4)2 + 5(148.4 163.4 )2
= 2310.8

SS WITHIN
 ( 99 178.4 )2 + (107 178.4 )2 + ( 174 178.4 )2 +
(185 178.4 )2 + ( 327 178.4)2
=33547.2
( 86 148.4 )2 + ( 92 148.4 )2 + ( 136 148.4 ) +
(148 148.4 )2 + ( 280 148.4)2
= 24547.2
= 58904.4
TOTAL VARIANCE = SS BETWEEN + SS WITHIN
= 2310.8 + 58094.4
= 60405.2
Source of variation SS DF MS

Between sample 2310.8 2-1=1 2310.8

Within sample 58094.4 4+4=8 7261.8

F ratio
2310.8 / 7261.8= 0.3182
F (1, 8) = 5.32
The above table shows that the calculated value of F is 0.3182 which is less than the
table value of 5.32 at 5% significant level.
So, null hypothesis is accepted and we can say that there is no significance difference
between PBT and PAT.

INTERPRETATION
According to above graph the null hypothesis is accepted that there is not so
Much variation between PAT and PBT.
This simply means company is not paying so much tax.
It is very good for the company that there is a very low rate taxes.

XLSTAT 7.1 - Linear Regression - 9/28/2007 at 2:12:33 PM

 Dependent variable(s) workbook = Book1 / sheet = Sheet1 / range = $E$11:$E$15 / 5 rows and 1 column
Uniform weighting (default)
Quantitative variables: workbook = Book1 / sheet = Sheet1 / range = $F$11:$F$15 / 5 rows and 1 column
No missing values
Type I SS, III SS
Confidence interval (%): 95.00

Modeling variable PBT:

Summary for the dependent variable:

No. of
Total no. of No. of values values
Variable values used ignored Sum of weights Mean
PBT 5 5 0 5 178.400

Summary for the quantitative variables:

Standard
Variable Mean deviation
PAT 148.400 78.338

Goodness of fit coefficients:

R (coefficient of correlation) 0.996

R (coefficient of
determination) 0.993
Radj. (adjusted coefficient
of determination) 0.990
SSR 250.435
Evaluating the information brought by the variables (H0 = Y=Moy(Y)):

Sum of Mean
DF squares square Fisher's F Pr > F
33296.76
Model 1 33296.765 5 398.868 0.000
Residuals 3 250.435 83.478
Total 4 33547.200

Model analysis (Type I SS):

Sum of Mean
Source DF squares square Fisher's F Pr > F
33296.76
PAT 1 33296.765 5 398.868 0.000

Model analysis (Type III SS):

Sum of Mean
Source DF squares square Fisher's F Pr > F
33296.76
PAT 1 33296.765 5 398.868 0.000

Model parameters:

Standard Student's Lower bound

Parameter Value deviation t Pr > t 95 %
Intercept 5.564 9.570 0.581 0.602 -24.892
PAT 1.165 0.058 19.972 0.000 0.979
The equation of the model writes: PBT = 5.56410507104684 + 1.16466236475036*PAT
Predictions, residuals, and confidence intervals:

Observations Weights PAT PBT PBT (Model) Residuals

Obs1 1 86.000 99.000 105.725 -6.725
Obs2 1 92.000 107.000 112.713 -5.713
Obs3 1 136.000 174.000 163.958 10.042
Obs4 1 148.000 185.000 177.934 7.066
Obs5 1 280.000 327.000 331.670 -4.670
Durbin-Watson statistic: d = 1.581