A

SIP AND RESEARCH REPORT ON

EFFECTIVENESS OF THE PERFORMANCE APPRAISAL SYSTEM

AT

ZYDUS CADILA HEALTHCARE LTD.

SUBMITTED BY

HIMANI KANSARA

ENROLLMENT NO 157370592014

MBA SEM-III

A REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF MBA

PROGRAMME OF

NARMADA COLLEGE OF MANAGEMENT

Faculty Guide: Organizational Gide:

Dr. Arpita Bhattacharya Ms. Neelam Rajpurohit

Plant operator, HR

1
PLAGARISUM REPORT

2
 DECLARATION

I, Himani Kansara, hereby declare that the report on Summer Internship

Training entitled A study on Effectiveness of Performance Appraisal
System at Zydus Cadila Healthcare Ltd. is a result of my own work &
my indebtedness to the work publications, references, if any, have been duly
acknowledge.

Place: Bharuch Signature

Date:
Himani Kansara

3
 Acknowledgement
I would like to give sincere thanks to Zydus Cadila Healthcare Ltd. for providing me
this golden opportunity to complete my six weeks Summer Internship Training.

I express my sincere gratitude to my faculty Guide DR. Arpita Bhattacharya and Dr.
Chetna Makwana for their guidance and support.

I would like to thank Neelam Rajpurohit (Plant Operator, HR) for associating me in
this project. And I would like to express my profound gratitude and sincere thanks to
Zydus Cadila Healthcare Ltd. for providing me relevant information and cooperation in
completing my project successfully.

4
5
 INTRODUCTION OF THE
PHARMACEUTICAL INDUSTRY
At a time when it is internationally downturn, especially its outlook for European and US pharmacy
sectors, it expects the Indian pharmacy sector to remain stable during the current year 2009. Partially,
this stability has been attributed to the very factors that have led the rating agency to forecast a
negative outlook for the matured sectors in regulated markets of developed countries. Fitch has
pointed out that the pressures arising out of weak global economic environment coupled with a
weaker rupee and a wave of mindset change in governments across the world which are now
migrating to pro-generic attitude to reduce healthcare spend will translate in higher export orders for
the low-cost Indian generic drug makers and an increased demand for low cost contract research and
manufacturing activities (CRAMS). However, warning is that profitability is likely to be weighed
down by pricing pressures, stricter regulations in developed markets, higher depreciation costs,
increased interest costs and notional losses on account of foreign exchange fluctuations. Fitch also
notes that the sector could face liquidity pressures due to longer working capital cycles.

The gestation period in the pharmacy industry is also long and returns uncertain. The average time
taken to develop a drug is still eight years and failure rate is quite high (38% in Phase I, 60% of those
remaining failed in Phase II, 40% of the remaining candidates failed in Phase III and 23% of
the remaining failed to be approved by the FDA, according to an estimate made in 2005).

Additionally, Indian companies with significant foreign currency debt would remain exposed to
refinancing risks in the medium to long term. The significant depreciation of the Indian rupee against
the US dollar (by approximately 22%, from Rs 39.26 in January 2008 to Rs 50.29 in December 2008)
has resulted in an increase in foreign currency debt, particularly foreign currency convertible bonds
(FCCBs) and foreign currency loans undertaken by some companies to fund.

"Despite the evidence of demand for Indian pharmaceutical drugs, absolute revenue growth and
profitability would remain contained due to intense competition among generic players on the pricing
front, expansion in the generic market, and stringent US Food and Drug Administration and European
Union regulations.

The inherent stability of demand for core pharmaceutical products and the likely support from global
demand for low-cost Indian generics compared to their branded counterparts will keep the Indian
pharmacy companies afloat,

India currently represents just U.S. $6 billion of the $550 billion global pharmaceutical Industry but
its share is increasing at 10 percent a year, compared to 7 percent annual Growth for the world market
overall. Also, while the Indian sector represents just 8 percent Of the global industry total by volume,

6
putting it in fourth place worldwide, it accounts for 13 percent by value and its drug exports have
been growing 30 percent annually.

The organized sector of India's pharmaceutical industry consists of 250 to 300 companies, which
account for 70 percent of products on the market, with the top 10 firms representing 30 percent.
However, the total sector is estimated at nearly 20,000 businesses, some of which are extremely
small? Approximately 75 percent of India's demand for medicines is meat by local manufacturing.
According to the German Chemicals Association, in 2005, India's top 10 pharmaceutical companies
were Ranbaxy, Cipla, Dr. Reddy's Laboratories, Lupin, Nicolas Piramal, Aurobindo Pharma, Cadila
Pharmaceuticals, Sun Pharma, Wockhardt Ltd. and Aventis Pharma. Indian-owned firms currently
account for 70 percent of the domestic market, up from less than 20 percent in 1970. In 2005, nine of
the top 10 companies in India were domestically owned, compared with just four in 1994. India's
potential to further boost its already-leading role in global generics production, as well as an offshore
location of choice for multinational drug manufacturers seeking to curb the increasing costs of their
manufacturing, R&D and other support services, presents an opportunity worth an estimated $48
billion in 2007. Over-the-Counter Medicines the Indian market for over-the-counter medicines
(OTCs) is worth about $940 million and is growing 20 percent a year, or double the rate for
prescription medicines. The government is keen to widen the availability of OTCs to outlets other
than pharmacies, and the Organization of Pharmaceutical Producers of India (OPPI) has called for
them to be sold in post offices.

Developing an innovative new drug, from discovery to worldwide marketing, now involves
investments of around $1 billion, and the global industry's profitability is under constant attack as
costs continue to rise and prices come under pressure. Pharmaceutical production costs are almost 50
percent lower in India than in Western nations, while overall R&D costs are about one-eighth and
clinical trial expenses around one-tenth of Western levels. India's long-established manufacturing
base also offers a large, well-educated, English-speaking workforce, with 700,000 scientists and
engineers graduating every year, including 122,000 chemists and chemical engineers, with 1,500
PhDs.

The main opportunities for the Indian pharmaceutical industry are in the areas of:

Generics (including biotechnology generics)

Biotechnology

Outsourcing (including contract manufacturing, information technology (IT) In addition, R&D

outsourcing).

New competitive threats have arrived, such as authorized generics produced by major drug producers,
new mid-sized players, Chinese and Eastern Europe manufacturers, and fully integrated generics

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firms, which are less reliant on Indian back-end businesses. The U.S. continues to be an attractive
market for Indian firms, despite the challenges of price erosion and the launch of authorized
generics by innovator companies, says Ranjit Shahani, vice chairman and managing director,
Novartis India Ltd, and President of the Organization of Pharmaceutical Producers of India. He does
not see any increase in non- tariff barriers there, and in fact feels that trade between India and the U.S.
is set to rev up following President George W. Bush's visit to India on March 1, 2006, with both
countries going all out to liberalize market access. The major concern of the U.S. FDA appears to be
the entry of counterfeit drugs, he says, but he does not believe this to be an obstacle for reputable
Indian manufacturers. Moreover, while the World Trade Organization (WTO) Doha Trade-Related
Aspects of Intellectual Property rights (TRIPs) national emergency/compulsory license agreement
presents an exporting opportunity for Indian firms, Shahani stresses that the firms must have anti-
diversion measures in place in order to protect their reputation.

The European generics market, he says, pointing to Dr Reddy's recent acquisition of Betapharm of
Germany for $570 million, holds more promise. Indian companies have acquired over $1 billion
worth of pharmaceutical companies overseas in the past year and a half and should increasingly look
more aggressively at countries like Brazil, Russia and the Company like Glenmark, Zydus Cadila,
Orchid, Wockhardt, and Aurobindo

Worldwide revenues for pharmaceutical industry contract manufacturing and research services
(CRAMS) totaled $100 billion in 2004 and will grow at an average annual rate of 10.8 percent to
reach $168 billion by 2009, say analysts at Frost & Sullivan. Within this total, the global market for
contract manufacturing of prescription drugs is estimated to increase from a value of $26.2 billion to
$43.9 billion, although the over-the-counter medicines and nutritional products sector will show the
fastest growth.

8
SWOT Analysis

Strengths:
Cost Competitiveness
Well Developed Industry with Strong Manufacturing Base
Access to pool of highly trained scientists, both in India and abroad.
Strong marketing and distribution network
Rich Biodiversity
Competencies in Chemistry and process development.

Weaknesses:
Low investments in innovative R&D and lack of resources to compete with MNCs for
New Drug Discovery Research and to commercialize molecules on a worldwide basis.
Lack of strong linkages between industry and academia.
Low medical expenditure and healthcare spend in the country
Production of spurious and low quality drugs tarnishes the image of industry at home and abroad.
Shortage of medicines containing psychotropic substances. There are 4000 such brands of
medicines that fall under the Narcotics Drugs and Psychotropic Substances (NDPS) Act,
1985.Under a clause of this Act, the retailer has to sign the consignment note provided by the
stockiest. The police check this note regularly to prevent these medicines being diverted to the
drug mafia and they can arrest the retailer if the signatures are under suspect. To protest against
this clause, the retailers have stopped stocking these medicines, some of which is life saving.

Opportunities:

Significant export potential.

Licensing deals with MNCs for NCEs and NDDS.
Marketing alliances to sell MNC products in domestic market.
Contract manufacturing arrangements with MNCs
Potential for developing India as a centre for international clinical trials
Niche player in global pharmaceutical R&D.
Supply of generic drugs to developed markets.

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Threats:

Product patent regime poses serious challenge to domestic industry unless it invests in research
and development
R&D efforts of Indian pharmaceutical companies hampered by lack of enabling regulatory
requirement. For instance, restrictions on animal testing outdated patent office.
Drug Price Control Order puts unrealistic ceilings on product prices and profitability and prevents
pharmaceutical companies from generating investible surplus.
Lowering of tariff protection

The new MRP based excise duty regime threatens the existence of many small scale pharma units,
especially in the states of Andhra Pradesh and Maharashtra that were involved in contract
manufacturing for the larger, established players.

10
 INTRODUCTION OF
CADILA HEALTH CARE GROUP
Healthcare at time of 1950s was the sole domain of a few Pharmaceutical giants. Coupled to this
was the enormous task fighting the myth and malady by cutting across the barriers of
communication so as to reach out to people and to ensure the most effective cure in the shortest
possible time. Under such circumstances, with tenacity of purpose and unfailing zeal to achieve
perfection in quality, Cadila was founded in 1952.

At the time of Indias independence in 1947 our late founder, Mr.Ramanbhai B. Patel was
completing his graduation at the Baroda science college. After completing his studies in
pharmaceutical sciences, he went on to join L.M College of
pharmacy, one of the oldest pharmacy colleges in India as a
Lecturer. With the India self reliant, Mr. Ramanbhai B. Patel
turned an entrepreneur, determined to contribute his share by
setting up a pharmaceutical company.

The name Zydus was chosen to reflect the cos ethos. Zydus a
phonetically powerful word combines the values of Greco-
Roman God Zeus and dawn of new era. Zydus like Zeus symbolizes the cos aspiration to
contribute to the welfare of the people and social concerns. With dedicated services, ultra modern
manufacturing processes, and quality products, Zydus Cadila is committed to make the world the
healthier place to live in.

Emerging as a modest pharmaceutical company, Cadila in the early years came out with a wide
range of innovative products. By the early 1990s, Cadila was ranked the third largest pharmaceutical
company in India (ORG- December 1991, 1992, 1993). The decade also marked the beginning of a
new economic framework and a shift in government policies. To thrive in this evolving environment,
it becomes imperative for Cadila to restructure and streamline its business operations. Thus in 1995
Cadila Laboratories emerged as Cadila Healthcare under the aegis of the Zydus group.

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For the quarter ended December 2005, the firm reported net profits up 36.1 percent at $8.8 million,
with total income ahead 17 percent at $85.5 million. The group has reported year-on-year growth of
138 percent for its exports of formulations. During the quarter, the group received approvals for
ribavirin capsules, promethazine tablets and tentative approval for gatifloxacin Tablets from the U.S.
FDA. Then on February 24, 2006, the FDA granted tentative approval for sertraline (generic version
of Pfizer's Zoloft). The company had already received approval from the French regulatory agency
to market sertraline capsules in the French market.

Chairperson and managing director Pankaj Patel is aiming for Zydus Cadila to be a top 10 global
generic company by 2010, deriving half its revenues from international business, with growth led by
Europe, the USA and then its other markets. Alliances and joint ventures with MNCs will be a
central driver of growth for the group, both internationally where it already has arrangements with
Mayne pharma, Mallinckrodt and GSK and in India, where it has tie-up with Altana, Schering AG
and Boehringer Ingelheim. Zydus Cadila has received 10 generic approvals so far and has filed a
total of 30 ANDAs and 35 DMFs.

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13
Organizational architecture of Zydus Group

Zydus Cadila -- the flagship division focusing on anti-invectives and pain management.
Zydus Alidac -- a specialty division, which focuses on the gastrointestinal segment.
Zydus Medica -- a specialty division, which focuses on the cardiovascular segment.
Zydus Biogen -- a specialty division, which focuses on the biological.
Zydus Neurosciences -- a specialty division, therapy areas include anti-depressants, anti-
consultants, anti-psychotics and tranquillizers.
Zydus Vaccicare -- a division that exclusively markets vaccines like Vac Typh and HB Vac.
Consumer Products Division -- a division that has a significant presence in OTC and Skin care,
with its basket of brands like Sugar Free (Low calorie sugar substitute), Sugar Free Dlite (low
calorie soft drink), Dietrim (Fat Soaker) and EverYuth range of skin specialties.
Zydus Pathline -- a division that manufactures and markets diagnostic reagents and instruments
for the pathological laboratories, blood banks and hospitals.
Micro Marketing Division -- a division that focuses on generic drug marketing.
Phytosurge Division -- a division that markets herbal remedies for cold and cough, liver
disorders, respiratory tract disorders, GI tract disorders and other general disabilities.
Bulk Drugs -- a key strategic business unit of Zydus Cadila that manufactures a range of modern
bulk actives in the therapeutic areas of anti-ulcerants, psycholeptic drugs, anti-depressants,
quinolones, anti-diabetics, anti-histaminic etc.
Dial for health India Limited -- a 100% subsidiary that provides forward integration in the areas
of distribution and e-commerce by setting up e-pharmacies.
Recon Healthcare Limited -- a 100% subsidiary whose main focus areas include cardiovascular
and pain management.

Form of the organization:

It is public ltd private sector company.

ZYDUS CADILA:
Ranked 5th in Indian formulations market. (ORG IMS MAT Dec-08).
Formulations exports grew by ~70% in last 4 years.
Market leader in niche consumer healthcare business with strong
Focusing on R&D spending 6-7% of revenues p.a.
Rs. Mio. FY 07-08 FY 06-07 % Growth
Consol. Revenues 23,254 18,289 27%
Consol. Operating PAT 2,527 2,063 23%3

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Present profile:
Zydus Cadila is an innovative global pharmaceutical company that discovers, develops,
manufactures and markets a broad range of healthcare products. The groups operations range
from API to formulations, animal health products and cosmeceuticals. Headquartered in the city
of Ahmadabad in India, the group has global operations in four continents spread across USA,
Europe, Japan, Brazil, South Africa and 25 other emerging markets.

In its mission to create healthier communities globally, Zydus Cadila delivers wide ranging
healthcare solutions and value to its customers. With over 9,000 employees worldwide, a world-
class research and development centre dedicated to discovery research and eight state-of-the-art
manufacturing plants, the group is dedicated to improving peoples lives.

With three multi-therapy divisions and eight specialty divisions, Zydus Cadila is one of the
leading players in the Indian healthcare industry. It is the leading player in the cardiovascular,
gastrointestinal and women's healthcare segments. The group has strong presence in respiratory,
pain management, CNS, anti-invectives, oncology, neurosciences, and dermatology and
nephrology segments. It has been able to maintain overall position and market share through
faster growing chronic / lifestyle segments. With several new product introductions and pillar
brands, Zydus Cadila is considered a tour-de-force in therapy management and brand
management. The group has several in-licensing alliances with global multinationals such as
Schering AG, Boehringer Ingelheim, Viatris, etc.

MISSION:
We are dedicated to life in all its dimensions. Our World is shaped by a passion for innovation,
commitment to partners & concern for people in an effort to create healthier communities
globally.

VISION:
One of Indias leading global healthcare players, we arm to be a leading Asian Pharma
Company by 2010. & a global research has driven Company by 2020.

We shall be a top ten global generics Co. with a strong R&D pipeline & sales in excess of
$1billion by 2010, over $ 3 billion by 2015....

Launched in JAN 2004

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 Corporate Control:

Zydus Cadila's major shareholder remains with the Patel family. Pankaj Patel (1951 - ), son of the
founder, is CEO. In2004 Pankaj Patel was included by Forbes magazine in its annual List of India's
richest people. Moreover, there is a team of 9 senior level executives - Known as The Executive
Committee, who are heads of different operations look after the overall management processes.
None of the members except Pankaj Patel is on Board of Directors.

Cadila Healthcare Limiteds parent organization Zydus Group is one of the fastest growing
integrated healthcare companies with a turnover of Rs.13 billion. Zydus Group is the 5th largest
player in the Indian domestic formulations market and also has a global presence. From nine
pharmaceutical production operations in India as well as a major R&D operation Zydus Cadila
develops and manufactures a large range of pharmaceuticals as well as diagnostics, herbal products,
skin care products and other OTC products. The company also makes EverYuth. It is also the maker
of Sugar Free, India's most popular artificial sweetener, and Nutralite, India's most popular
cholesterol-free margarine. The company operates both within India and in international markets,
exporting branded formulations to over 40 countries.

There are seven manufacturing plants in use by the company, located in the three Indian states of
Gujarat, Maharashtra and Goa, which produces formulations and active pharmaceutical ingredients
for Cadilas different sections.

The company is headquartered at Ahmadabad and makes active pharmaceutical ingredients at three
sites in India:

Ankleshwar Plants - Zydus Cadila's plant complex at Ankleshwar in Bharuch District of Gujarat
has been producing drug material since 1972. There are around 10 plants in the complex, which is
ISO 9002 and ISO 14001 certified as well as FDA Approved. Total plant capacity at Ankleshwar is
around 180 million tones.

Vadodara Plant - Zydus Cadila's plant at Dhabhasa, in Vadodara District's Padra taluka (in the
eastern part of the district) in Gujarat, was commissioned in 1997 by a company called Banyan
Chemicals, and acquired by Zydus Cadila in 2002. The plant has a 90 million tone capacity. It is an
FDA-approved facility that is also approved to WHO GMP guidelines.

Patalganga Plant - Zydus Cadila acquired an API plant at Patalganga in Maharashtra state, 70 km
from Mumbai, in the 2001 German Remedies deal. This plant operates to WHO GMP standards.

And the company operates formulation plants at six locations:

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 Moraiya plant - Zydus Cadila's formulation plant at Moraiya in Sanand taluka on the outskirts of
Ahmadabad is the largest formulation plant in India. It plant became Food and Drug Administration
(FDA)-approved in 2004/2005. The plant makes tablets, capsules, and soft gel capsules as well as
injectable drugs in both sterile liquid and lyophilized form. Zydus Cadila also runs a large R&D
operation at Moraiya;

Vatwa plant - Zydus Cadila's plant at Vatwa, an industrial suburb of Ahmadabad, makes
nutraceuticals. The plant was acquired Remedies;

Changador plant - Zydus Cadila's plant at Changodar, 20 kilometers from Ahmadabad on the
city's outskirts, manufactures fine chemicals. Zydus is current constructing a facility at Changodar
to make vaccines for hepatitis B and rabies.

Navi Mumbai Plant - This operation, at Navi Mumbai in Maharashtra, is a 50/50 joint venture
with Germany's Altana Pharma AG, makes intermediates of the drug pantoprazole.

Goa Plants - the Companys plants at Ponda in the southern Indian state of Goa do formulation
work as well as manufacture oncology drugs and an herbal laxative branded Agiolax based on
Psyllium seeds.

Baddi Plant - In 2004 Zydus commissioned at formulation plant at Baddi, in Himachal Pradesh
state of northern India. The Baddi plant makes solid oral pharmaceuticals. Plant in mumbai where
tablets are made from hands of labours.

FUTURE EXPANSION PLANS:

1.Company is planning to expand its R&D center at Dabhasa unit. To be a leading Asian global
research driven company by 2020. And recently they have shifted their R&D center from
Ankleshwar unit to Dabhasa unit in accordance with this plan.

2.Zyfine is being developed at API unit Dabhasa.

3.To get maximum benefit by getting orders from foreign countries i.e. expanding the export
through filing more DMFs.

GLOBAL PRESENCE:

Zydus Cadila has strong global operations to market both formulations and APIs. With operations
in U.S.A., Europe, Latin America, and Japan and over 40 emerging markets across the world,

17
 Zydus Cadila is a global healthcare provider. The group also manufactures and markets a wide
range of intermediates and APIs

EVENTS AND ACHIVIEMENTS:

1950-1959:
Cadila sets a trend in introducing many innovative products. In
1957 introduced Isopar, a rational formulation on INH & PAS for the treatment of tuberculosis. In
1959 introduced Neuroxin-12 which was the first of its kind product, where incompatible
neurotropics-B1,B6,B12 were made compatible in a vial.

1960-1969:
The production unit of cadila Exports, was set up in 1967 at Kandla Free Trade Zone. The unit
was inaugurated by the Late Prime Minister of India, Mrs. Indira Gandhi. A full fledged
R&D centre was set up in 1969 with recognition from the department of science and
technology, government of India.

1970-1979:
The group set up it Bulk drug manufacturing plant at Ankleshwar in 1973. Cadila develops the
process technology for the anti-diabetic drug Glibenclamide. Dexona-20 is launched for the first
time in India in 1977 to provide Dexamethasone

1980-1989:
Receive the first award from chemexcil for its export performance consecutively for two years
from 1982-1984 and the top award for export performance for the year 1985-1986. Receive the
award for excellence in Quality from Indian Drug Manufacturers Association in 1985.

1990-1999:
Ranked the second largest in the Indian pharmaceutical industry in 1993. Cadila Healthcare Ltd.
under the aegis of the Zydus Group is setup in the year 1995. In its very first year the group
launches 23 new products. Improves its ranking from the 16th position to the 9th position
amongst the top pharmaceutical companies in India .

Cadila Healthcare launches Falcigo in strategic alliance with Guilin pharma of China. This
breakthrough product in the anti-malarial Segment was launched for the first time in India in 1996.
Registers the fastest growth amongst the top 80 Indian pharma companies in 1997. In 1998,
the group enters into a joint venture with Byk Gulden of Germany, a research driven pharma
major to create a new joint venture company Zydus Byk Healthcare Ltd. The API plant at
Ankleshwar receives ISO 9002 certification in the year 1999. Cadila healthcare enters the capital
market with an IPO in February 2000.

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 2000-2009
Cadila healthcare enters the capital market with an IPO in February 2000. The manufacturing
premises at Moraiya receive MCC recognition in August 2000. South Africa has a pharma market
worth US $ 1 billion. The API plant at Ankleshwar receives ISO 14001 certification in December
2000.Zydus Cadila acquires German Remedies Ltd. In2001. It becomes the 4th largest group in the
Indian pharma industry. In August 2001 the manufacturing premises at Moraiya are
approved by the Bureau of food & Drugs (BFAD) of Philippines The manufacturing premises at
Moraiya are approved by Medicines Control Agency of U.K. in April 2002. The state-of the-art
formulations manufacturing plant at Moraiya & API plant at Dabhasa received approvals from the
US FDA. Enters the French generics market with 43 generics. ATEN becomes the 1st Zydus
brand to storm into the Top-20 pharma brand ranking. Nucoxia, the first Etoricoxib brand to
be launched in 2004 in India Became the Best launch of the year from amongst 2200 new
Brands. The other best launches from Zydus Cadila were Mifegest, Penegra, Revaldo, Levoday
and Novospar. Receives five product approvals from the USFDA to market Atenolol,
Clindamyein, Metformin EX, and Metformin ER. Receives approval from Drug Controller
General of India (DCGI) for its first Investigational New Drug (IND) application for the New
Molecular Entity (NME) ZYH1. Launches novel statin Pitavastatin under the brand name
Pitava, for the 1st time in India.

PRESENT PRODUCT MIX

Pharmaceutical
Diagnostics
Herbal
Skincare- EVERYUTH
Food Products-SUGARFREE, NUTRALITE

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PRESENT BRAND NAMES:

20
 BULK DRUGS/INTERMEDIALTS OF ZYDUS CADIA:

Amlodipine Amlodipine besylate

Anlodipine Besylate Atorvastatin / Calcium

Candesartan Carvedilol

Celecoxib Cerobastatin

Chloratidine Ciprofloxacin

Ciprofloxacin Base / Hcl Closarten Potasium

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Dicyclomine Hcl Difloxacin

Dontoprazole Sodium Enalapril Maleat

Enrofloxacin Enrofloxacin Base / Hcl

Famotidine Febantel

Febendazole Femotidine

Fluconazole Flucoxetine Hcl USP

Fluoxetine Fluvastatine Sodium

Glimipride Glivenclamide

Lamivudine Loratadine

Losartan Potasium Meloxicam

Norfloxacin Omeprazole

Omerprazole Pellets Omperazole Powder

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Sildenefil Citrate Tramadol Hcl

COMPETITIVE SCENARIO:

COMPETITORS NAME SALES REVENUE

(IN CRORES)

Dr. Reddys Laboratories 4162.25

Cipla 3763.72

Sun Pharma Industries 2463.59

Lupin 2215.52

Ranbaxy 25196.48

Aurobindo Pharma 2080.19

Glaxosmithkline Pharma 1773.41

23
 Aventis Pharma 983.80

Ipca laboratories 980.44

STRATEGIES FOR FUTURE GROWTH:

1. Regulates generics market APIs & Formulation in Europe & USA.

2. Efforts to Continuously Build Our Business Performance.
3. Capitalize on existing strength to drive in domestic market.

BENCHMARKING:
Zydus Cadila Healthcare Ltd wants to become Indias top company in pharmaceuticals
industry.

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DEPARTMENTAL
STUDIES

Human Resource Department

HR Philosophy:
We build people to build our business

HR Mission:
Basic to our business aspiration, we are down by a mission. To make Zydus the best company
to work for. We shall build our HR environment to be continually exciting, enriching, enabling
& empowering.

HR Vision:
We shall lead the way by transforming & building our HR environment to achieve our business
aspirations. We shall nurture our current capabilities and build new capabilities bringing in
higher levels of transparency, accountability and promoting meritocracy.

25
Departmental structure of HR:

VP ZYDUS MANAGER

GENERAL MANAGER

MANAGER

EXECUTIVE

OFFICER

TRAINEE

Details of employee files:

1. Bio-data
2. Application
3. Academics certificate
4. Offer letter
5. Appointment letter
6. Photocopy of joining letters
7. Increment letters
8. Complaint letter
9. Return of complaints
10. Punishment record

Human Resource Planning:

The process by which management determines how an organization should move from its current
manpower position to its desired manpower position through it management trying the right

26
 places, at the right time doing things which result in both the organization and the industrial
receiving maximum long range benefit.

In Zydus Cadila, HRP needs arises because of following conditions:

1. Retirement of old employees
2. Workload increase expansion of the new plant
3. Productively has to increased

Recruitment and Selection policies:

Recruitment policies:
Recruitment needs are from changes in organization & retirement policy, resignation, death,
accidental needs. After HRP is done by HR department, it recruits the employees.

HR department used following sources for recruitment:

Press Advertisement
Placement Agencies
Employment Exchanges
Labor Contractor
Campus Recruitment
Recommendations
HR department used press advertisement, labor contractor and recommendations for recruitment.
But whenever vacancy arises in organization, HR department first prefer internal sources. If HR
department not satisfied with internal sources then HR department goes for external sources.

In Zydus Cadila, if any of the above mentioned need arises then HR people performs the
recruitment procedure. And for this purpose, for each every designation Job Description and Job
Specification is pre-determined and they perform detail study on requirement of employees
competencies for Profile Match- up. This company follows Standard Recruitment procedure. It
begins when HR Department receives from any department or vacancy is highlighted in HRP.

Selection Policies:
For the selection of the candidate Zydus cadila uses the following process:

1. Receiving Application
2. Screening Application
3. Job Profile Matchup
4. Short List Candidates

27
 5. Personal Interview
6. Reference Interview
7. Reference Check
8. Offer Issue
9. Medical Check Up
10. Final Selection
11. Joining Formalities
12. Issue of Appointment Letter

And for short listing the candidates, Zydus Cadila uses written examinations, which includes
optional questions ranging from current phenomenon to the industry or quantity techniques to
comprehension English. The applicants who clear examinations with minimum marks
determine by personnel department shall be called for the personnel interview.

Leave policy:

1. Privilege Leave:
All confirmed executives/staff will be eligible for maximum 30 days PL in a financial year
(April-March).
For being eligible for PL, a minimum of 240 days of presence in case on role on 1 st April or
1/3rd days of working days available in the previous financial year is must.

2. Medical leave:
All confirmed executives/staff will be eligible for 7 days for medical leave in a financial year.

3. Casual Leave:
All confirmed executives/staff will be eligible for 7days of CL.No more than 3 days of
emergency leave is available at a time. Trainees are not eligible for any leave.

4. Maternity Leave:

28
 All females employees are eligible for the maternity leave of 12 weeks.

Other HR policies:

Canteen Facility:
Canteen facility provided to all company employees Rs.208/- per month.

Identity card:
Permanent photo identity card with emergency contact number & other details is provided
within 10 days of joining.

Attendance System:
Attendance is recorded through punching System.

Salary System
Salary is paid through bank transfer. Salary account is maintained in HDFC Bank.
In case of new joiner first month salary is paid through cheque. Salary is credited on or before
7th of every month.

There are three grades of employees working here:-

Executives level
Staff level
Worker level
HO directly transfers executives & staff level salary to their respective account within 5 th of
next month.

Companys salary structure is as below:

1. Primary (fixed) Payments:

Basic salary

2. Allowances:
Children education allowances
Transport/conveyance allowances
High cost allowances
Medical allowances
Residence allowance

3. Annual Perks:
ESIC

29
 Provident fund
Bonus
Gratuity

Uniform for employees:

Two set of uniform is provided to permanent workmen, cook, security, & contract
workmen.

Working hours:
Company is running in three shifts and general shift and the timing of the shifts are as under:
General shift - 09:00 to 5:30
First shift - 06:00 to 2:30
Second shift - 02:30 to 11:00
Third shift - 11:00 to 09:00

Training and development policies:

Training is the process of acquiring the skills necessary to do job. After the joining procedures HR
department give them a 3 days INDUCTION Training. Zydus Cadila organizes training program
regularly for their employees because Zydus Cadila Management considers training as an
investment, not expenditure. Therefore it spends corers of rupees annually on training program.

Zydus Training Objectives:

To create & update self-awareness, improving of the working skill & over coming of their
identified deficiencies.

30
 Training Program in Zydus Cadila follows SOP. First of all HR department identifies the training
needs in the organization through Performance Appraisal Feedback given by HOD of each and
every department and identifying strength and weakness of all the employees.

After doing training need identification whole years training scheduling and budgeting is being
carried out and it is approved by higher management.

Sometimes Corporate Office organizes training for Zydus as a whole.

Training Calendar is prepared by HR Department for the whole year in the beginning of April and
also Training budget is prepared at that time.

Accordingly each month schedule is prepared and informed to selected attendee.

After training program is conducted feedback form is distributed to attendees and signed by
trainer. It looks like feedback from reveals most of the employees have not understood then the
same training is reorganized.

TYPES OF TRAINING PROGRAM:

Induction Training
Internship/ Vocational Training
Employees Training

Method of imparting training:

1.Internal Training- it is generally job related training given by HOD or some Superior.
2.External Training- It is imparted by external faculty chosen by HR Department.

Training categories organized in Zydus:

Job-related
Kaizen
Technology transfer
Process Safety
Current Good Manufacturing Practices (camp)

31
 Chemical handling & Safety Aspect
Behavioral

Some of the important Training programmed frequently organized:

SAP training
Induction
How to handle Market complaints
R&D Lectures
Safety training
Technology

Average Man-days in Training:

The Zydus Cadila Healthcare Company provides training to all the employees.
An average training required 3days to train the employee in a year.

TRAINING ATTENDANCE RECORD

32
Topic: - ___________________

Date: - ___________________

Time: - ___________________ Trainer: -_________________________

Sr. Participants Employee Designation Understood/

No
Name No. Not Understood

10

(Trainer Signature)

33
 Performance Appraisal
Training needs are identified and detailed analysis strength weakness or employees is done
through performance and detailed strength weakness or employees is done through performance
appraisal and in Zydus a system of performance planning review and development has been
developed.

Self-appraisal System:

Under this system performance appraisal forms given to employees to make self-appraisal under 4
criteria- average, good, very good and outstanding for their respective predetermined KPA. And
then his/her immediate analysis & identification of his/her potentialities is done to take future
corrective measures if any deviation is found.

This system is for Staff & Executive level only.

Target Setting and Review:

Under this system of performance appraisal KPA are discussed between superior or site head and
employees along with one of the HR person and also target is reviewed and for the coming year it
is decided so that she/he can work accordingly to improve himself/herself. And also strengths and
weakness are discussed for their betterment and whole for the company. This system is mainly for
production heads and staff level.

Grievance handling and Disciplinary action practices:

Zydus Cadila has no any trade union. So, company has to solve individual problems and
grievances of employees. And for that Zydus Cadila has systematic procedure, which is as under:

First of the employee who has problem comes to HR manager and explains his/her problem.
HR manager tries to solve the problem.
And, if HR manager is unable to solve the problem the matter goes to the senior manager, i.e.
general manager.
And this way matter goes upward until it gets solved.

34
Employee Welfare Practices:
3 Uniform per year (only for worker)
Raincoat (only for worker)
Safety shoes (only for worker)
Sweater (only for worker)
Towel (only for worker)
Socks (only for worker)
Rainy shoes (only for worker)
Soap (only for worker)
Facility for storing & drying clothes (only for worker)
Locker (only for worker)
Canteen facility
First aid box facility
Ambulance
Tea/coffee/milk
Rs 5000/- cheque for long term service (25 years)
Mediclaim
Loan facility
Joining/shifting expenses
And moreover that some functions are also arranged by the Zydus Cadila for the Employees,
Employees spouse, and their children, which are as under:
Sports and games for children like: chess and carom
Zydus Got Talent
Annual Function
Uddan : spouse Zydus and Junior Zydus
Cake celebration : production & sales

HR Audit:
In Zydus Cadila HR Audit is done once in a year.

Organizational Change and Development:

The organization change in Zydus Cadila has come in terms of recruitment and selection, which
are as under:

35
 1) The first change is that the candidate can apply online on the website of the company. And
for that candidate can apply on the domain area and then he/she can be called for
psychometric test. And after clearing the test offer letter is given.
2) The second change is the Zydus Cadila is now recruiting the college trainee by tying up
with them.
Zydus Cadila attributes its success to the commitment and total involvement of its people.
To this end, the company believes that consolidating the knowledge base of the people is of
utmost importance.

To enhance the capabilities of its people and help a learning organization, the company has
a unique learning model draws on competencies from its internal pool. The knowledge
sharing forum draws subject expects from within the group to conduct training programme
on specialized areas like product management, supply chain management, credit controls
etc. besides bringing in much needed organizational perspective to the training sessions this
learning model also helps identity and motivate companys knowledge assets.

Innovative HR Practices:
Zydus Cadila has innovative HR practices in terms of Rewards and Recognition.
a) Zydus Cadila Healthcare has formulated the STAR appreciation Program to give Reward and
Recognition to their employees.

S SPECIAL
T THANKS
A AND
R RECOGNITION SYSTEM
STAR
The STAR Program include following Awards.

1) Monthly Appreciation Award:

The objective of MONTHLY APPRECIATION AWARD is

- To recognize and reward significant contribution.
- To create an atmosphere that encourages & motivates employees.

Monthly as well as quarterly Reward and Recognition is provided to the employees.

The all permanent employees are eligible for the nomination of this system.
Department Head gives the nomination of the employees.

36
 Nominations are approved by VICE PRESIDENT Manufacturing, General Manager-
HR.
The total number of awardees not to exceed 10.
The award will be in kind.
A certificate of Appreciation is also given to the winner employee.
The award is given on completion of task, such as -
Innovative & Creative idea,
Enhencing customer relation,
Task completion before time,
Saving time and money,
To create culture of Zydus family.

2) Best People Manager Award:

It is an employee engagement initiative.
The objective of Best People Manager Award is
-To recognize people management skill of Line Manager.
-To encourage Line Manager to increase bonding with the team.
-Employees who has completed minimum 1 year with the company are eligible
for this award nomination.
b) Buddy card:
Buddy card is a system of Zydus Cadila to express thankfulness to the employee who has
helped other employee.
In past this card is in the form of paper but now it is available as an electronic card. So,
employee can send card through mail also.
And card contains quote of thanks with the name the person to whom it is to be send and also
the reason why this card is given.
And at the end of the year the person who gets maximum card will be awarded.
It may be intra-department or inter-department

c) Near miss:
Near miss is taken care by safety department in Zydus Cadila
The employee who fined maximum near-miss will be rewarded.

d) Innovative Idea:
The innovative idea of any employee to reduce cost or increase efficiency is rewarded
And also some ideas are displayed on board or banner.

Types of Communication Channel:

The different types of communication channel used in Zydus Cadila healthcare are like horizontal,
vertical, top to bottom, bottom to top for the purpose of communication media like:

37
 a) Telephone
b) Mobile phones
c) Internet facility
d) Lotus notes software
e) Notice board
f) E-mail facilities

IT interfaces:
HR Department mostly carries out HR functions through:
SAP (ERP Software)
MS-office
Lotus notes

Marketing department
Activity of Marketing Department:
As such in Zydus Cadila all the activities of the marketing are handled from Ahmadabad Zydus
tower, corporate office. At Ankleshwar unit there is no marketing department.

The main activities of the marketing department are as follows:

To make visit to the customer &know their requirement.
To obtain the orders & convey to the units.
To create export orders.
To issue dispatch instruction to unit.
To send intend to excise department through SAP.
To obtain all the information about the product and also be in contact with regulatory
affairs department

List of Competitors:
Dr. Reddys Laboratories
Ranbacks
Lupin
Sun Pharma Industries
Aventies Pharma

38
 IPCA Laboratories
Aurobindo Pharma
Glaxomithkline Pharma

Brands Available the Market:

Zydus Cadila is the Flagship division and has a product portfolio of active brands that includes
brand leaders in various product categories. It primarily markets therapies in the anti-infective and
pain-management. Zydus Cadila has the major contribution to the overall turnover of the
company. Nearly 50% of the total turnover comes from the Zydus Cadila.

Top Five Brands

Ciprobid
Oxalgin
Ocid
Oriprim
Dexona

Present Product Mix:

Pharmaceutical
Diagnostics
Herbal
Skincare- EVERYUTH
Food Products-SUGARFREE, NUTRALITE

Distribution Channel:
In this Zydus Cadila Healthcare ltd, the finishing goods goes from factory to Narol. Then it will
send goods to respective clearing and forwarding agents then they sent the finished products to
the main stockiest. After it, they send it to the retailers Zydus group has 1500 medical
representative, 10 main branch-officers, 1500 main stockiest.

The distribution channel of Cadila Healthcare Ltd is as follows:

CHL- MANUFACTURES

ZYDUS DISTRIBUTORS

39
 AGENTS OF STATE AND CITY

STOCKIEST

RETAILERS

Zydus

Artificial Nutrition
Skin Care Medicare
sweetner Care

Everyuth
Sugar Free NUtralite Peel Off Atrova E
Masks

Sugar Free Everyuth

Actilife Dulcoax
Gold Facewash

Sugar Free Everyuth

Amlodac
D-LIte Scrub

40
Product Line: 4

Product Length: 4

Product Depth: 12

Promotion Mix:

a) Advertising:
Advertising means any paid form of non-personal presentation and promotion of ideas, goods
or services by an identified sponsor.

The Company advertises its advertises its product through press media the advertisement
objectives should be based on past decision about target market, positioning and marketing
mix advertising help the organization increases the sales.

The advertisement is given by the ways:

1. Print Media:
In print media, they give their advertisement in newspaper, maganizines and other local
newspapers.

2. T.V. Media
Last some years back they give their advertisement on TV also. The future plan for
advertisement might goods back to T.V advertisement again.

Zydus Cadila Healthcare ltd. also advertised their products on the internet at the different
websites whose name is www.info@zydusCadila.com

Advertising Tools:
Advertising by publishing articles in medical journals regarding novel innovations news
product, research result etc
By placing poster at hospitals and other institutes
By publishing achievements in print media as well as television
By putting latest information on websites and internet
By Patient benefit programs

41
 By Mass Screening
By specialized camps
By participating medical conference
By social welfare programs

b) Sales Promotion:
Schemes to benefit retailers
Put POP for display
Cash Discounts and favorable payments terms for dealers
Quantity discounts as well as free samples
Gifts articles to retailer, doctors stockiest and medical institutes
Attractive incentives schemes for MRs to motivate then to achieve their targets

Publicity Method:
TV Advertisement
Radio spot
Magazine Advertisement
To increase the market share

Competitive approach:
At Zydus Cadila, hold the view that continuously improving operating efficiency translates into a
business edge that continuously improving efficiency translates into a business edge that keeps
the company competitive across therapeutic segments, across geographies at time.

For this a PRISM programme was launched to sustain the competitive scenario.

Cost Saving Letters In PRISM:

Improving Purchase Efficiency
Improving process efficiency
Standardization & Optimization
Outsourcing
Using Cost Effective Technology

42
 A project SLIM (Strategic lean Integrated Manufacturing) was launched to continually improve
the companys competitiveness & sustainability while offering products that are most efficiency
manufactured at the most competitive costs.

Production Department:

NAME OF THE MAIN PRODUCTS

Products
Amlodipine besilate Atorvastatin calcium
Clopidogrel bisulphatt Carvedilol
Duloxetine hydrochloride Fluconazole
Famotadine Gliben clamide
Glimepiride Lamivudine
Losartan potassium Omeprazole magnesium
Paroxetinehydrochloride hemihydrates Ranolazine
Zaleplon API
Tramadol hydrochloride

RAW MATERIAL USED:

1. Formaldehde
2. Methanol

43
 3. Toluene
4. Monomethyle Amine
5. NAOH, KOH, HCL, H2SO4
6. Acetic Acid
7. Sodium Hydride
8. Sodium Borohydride
9. Acetone
10. Cyclohaxanone
11. Isopropyl alcohol
12. Sodium Methoxide

TYPES OF MATERIAL HANDLING EQUIPMENT USED:

1. Funnel
2. Pallet trolley
3. Hand trolly
4. Pipes
5. Plastic jug
6. Plastic bucket
7. Liquid store tank
8. Fork lift
9. Straiter

INVENTORY MANAGEMENT FOR RAW MATERIAL AND FINISHED

MATERIAL

FOR RAW MATERIALS

Company has raw material purchased department at Ahmedabad and every month production target
is decided on the basis of market requirement.

Production target report is being given to raw material department and based on this report they plan
monthly material purchased. At the same time raw material stock position is given from store
department to purchase department on daily bases through SAP.

FOR FINISHED MATERIALS

44
Here marketing department, which is at Ahmedabad take all the decisions pertaining to finished
goods.

CO-ORDINATION BETWEEN:

STORES AND PRODUCTON

Stores and production department are internally linked and their activities are co-related with each
other. When the production department needs raw material they send MRS to store department.
Production department translates raw material into finished good. When production department
produce finished API the send it to finished goods store after approval of the QA department. If the
requisition of the production is available in the story, they send raw material to the production
department.

PURCHASE AND PRODUCTION

When the production department needs any material and if the material and if the material is not
available in the store then they send PR online to purchase department. Then purchase department
forwards this PR to HO. The role-played by purchase department is very important to smoothen the
production process.

PRODUCTION AND DISPATCH

When production department completes the production of products then inform to the dispatch
department. Dispatch department dispatches products as per the instruction to the production
department related to finished goods.

PRODUCTION AND ENGINEERING

Production department checks maintenance activities periodically and if they found any they inform
engineering department.

QUALITY ASSURANCE MEASURE

To ensure the quality of the product Quality Assurance (QA) department is designed which is fully
authorized to realize and reject the products. For the production of same quality of products are
followed by;

45
Validation records (product validation, Cleaning validation, Quality of products) are periodically
checked by QA department. From plant they submit in process sample for analysis. In process sample
is analysis as per pre-determined parameters and the result is being convened to plant in charged.

Finance Department

STRUCTURE

Chairman & Managing Director

President API-DIV

General
GeneralManager
Manager

Deputy Manager
Deputy Manager

46
 Office assistance

ACTIVITIES OF FINANCE DEPARTMENT

Maintaining Petty cash

Prepared report
Coordinate between Ho and unit level account
Day to day cash transaction
Bank reconciliation (To tally cash and bank balance)
Send voucher to Head Office

ACCOUNTING METHOD SYSTEM

At this unit, Single Entry System or Petty cash is used i.e. accounting related to Miscellaneous
expenses is only recorded.

At HO, Double Entry System is used.

Ratio Analysis
Financial Analysis is the process of identifying the financial strengths and weakness of the firm by
properly establishing relationships between the items of the balance sheets and the profit and loss
account..

Ratio analysis is a very powerful analytical tool useful for measuring performance of an organization.
The ratio analysis helps the management to analyze the past performance of the firm and to make
further projection.

A ratio is the mathematical relationship between two quantities in the form of a fraction or
percentage.

Current Ratio:

47
 2015-16 2014-15 2013-14 2013-12 2011-12
Current Assets 4187.30 2993.30 2590.70 2309.20 1977.60
Current
1581.30 1548.80 1202.00 993 1066.30
Liabilities
Current ratio 2.6480 1.9327 2.1553 2.3255 1.8546
Liquid Ratio:

2015-16 2014-15 2013-14 2013-12 2011-12

Current Assets -
3529.80 2189 1927.20 1722 1476.40
inventories
Current
1581.30 1548.80 1202.00 993 1066.30
Liabilities
Liquid ratio 2.23 1.41 1.60 1.73 1.38

48
 3

2.64

2.5
2.32
2.15

1.93
2 1.85

2.23
current ratio
1.5
liquid ratio

1.41 1.73
1
1.38

1.6
0.5

0
2015-16 2014-15 2013-14 2012-13 2011-12

Interpretation:
It can be interpreted that Zydus Cadila has good condition in maintaining working capital.
Standard current is 2 and comparing to that Zydus Cadila current ration nearer to 2 except in year
2015-16 that is 2.64. And it can also be seen that Liquid ratio is less in the comparison to current
ratio. So, it can be said that there is high investment in inventories.

49
Net Profit Ratio

Particular 2015 2014 2013 2012 2011

N.P 19773 9831 9903 6869 5948

Sales 70353 42960 40996 34464 33550

28.10 22.88 24.16 19.90 17.73

Series 1

28.10%
30.00%
24.16%
25.00% 22.88%
19.90%
20.00% 17.73%

15.00%

10.00%

5.00%

0.00%
2015-16 2014-15 2013-14 2012-13 2011-12

Interpretation:
It can be interpreted that Zydus Cadilas net profit is not much fluctuating. It is increasing from
17.73% in 2011-12 to 24.16% in 2013-14. But in 2014-15 it goes down to 22.88%. But in 2015-16
it does to 28.10%

50
Earning Per Share

Particular 2015-16 2014-15 2013-14 2012-13 2011-12

PAT( in cores) 19773 1271.10 903.60 498.60 657.50

No. of shares(
10237.43 2047.49 2047.49 2047.49 2047.49
in lakes)

EPS 19.31 62.08 44.13 24.35 32.11

EPS
70
62.08
60

50
44.13
40
32.11
30 24.35
19.31
20

10

0
2015-16 2014-15 2013-14 2012-13 2011-12

Interpretation:

Zydus Cadilas EPS is increasing till 2014-15 from 24.35 to 62.08 in 2014-15. But in 2015-16 it
goes down to 19.31 from 62.08. It can be said that the company has weaker position in Earning per
Share.

51
 Dividend per Share:

2014-15 2013-14 2012-13 2011-12

Dividend (in lakes) 24570 18430 15340 15330

No. of Share( in 2047.49 2047.49 2047.49 2047.49

lakes)
DPS 12 9 7.5 7.5

DPS
14

12

10

6 12 DPS

4 9
7.5 7.5
2

0
2014-15 2013-14 2012-13 2011-12

Interpretation:
It can be seen from the chart that dividend per share is increasing as in 2011-12 and 2012-13 it is
7.5 and 2014-15 it increased to 12. So it can be said that company is giving more dividend
compared to previous year. And it shows good financial condition.

52
Return on capital Employed:

2015-16 2014-15 2013-14 2012-13 2011-12

Profit before Tax
and Interest 2455.90 1507.40 988.20 642.40 798.70

Total capital-
employed 6403.60 5262.80 4518.30 3964.00 3306.30

ROCE 38.35% 28.64% 21.87% 16.21% 24.16%

ROCE
45.00%

40.00% 38.35%

35.00%

30.00% 28.64%
24.16%
25.00% 21.87%
20.00%
16.21%
15.00%

10.00%

5.00%

0.00%
2015-16 2014-15 2013-14 2012-13 2011-12

Interpretation:
The chart shows that in 2011-12 return on capital employed is 24.16% but it goes down to 16.21%
in 2012-13. And then it goes up in 2013-14, 2014-15 and in 2015-16 it is 38.35%
So, it can be said that company is getting high return on investment in the comparison to past years

53
Debt- Equity Ratio:

2015-16 2014-15 2013-14 2013-12 2011-12

Debt
1034.30 1263.20 1411.20 1645.50 1095.80

Equity
6137.40 4525.40 3629.90 2911.50 2557.10

Debt-equity
0.1685 0.2791 0.3888 0.5652 0.4285
ratio

0.5652
0.6

0.5 0.4285
0.3888
0.4
0.2791
0.3

0.1685
0.2

0.1

0
2015-16 2014-15 2013-14 2012-13 2011-12

Interpretation:
It can be interpreted that company has strong position against debt as its debt-equity ratio is going
down. Only in 2012-13 company has debt equity ratio of 0.56. But after then it continuously
decreasing and in 2015-16 it was 0.17.

54
 COSTING OF THE MAIN PRODUCT
At Zydus Cadila, Costing of the main Product includes all the factors of production (direct/
indirect) within the premises such as:

1. Manufacturing cost

2. Manpower charges

3. Manufacturing related taxes

4. Raw Material charges

WORKING CAPITAL MANAGEMENT

OPERATING CYCLE
In 2007-08 and 2008-09 Operating Cycle of the company was 93 days and 101 days
respectively. The increase was attribute to higher levels of inventories require for export
business.

INVENTORY MANAGEMENT
The importance of keeping the right level of inventory lies in the fact that a maximum
proportion of the working capital remains blocked in the inventory until it is completely sold
off and debtors realized.

Maintaining optimum level of inventory also has other benefits like:

Meeting the market demand when it arises

Meeting the unexpected demand when it arises
Handling seasonal or cyclical fluctuations
Customer Satisfaction
Minimizing cost of sales so that affordability of sales remains.

Thus the objective of inventory management is to maintain an optimum level of

inventory at right place with minimum of cost to avoid stock out situation

55
TAXES

Income Tax
Sale Tax
Service Tax
Excise duty
Value Added Tax
Professional tax

56
 PURCHASE AND STORE DEPARTMENT

DEPARTMENTAL STRUCTURE AND ACTIVITIES

STRUCTURE

Chairman & Managing

Director
President

General Manager

Manager

ACTIVITIES OF PURCHASE DEPARTMENT

This department does all the purchase activities basically for unit-1, unit-2 and R&D.
In the previous year there was the in-house system but all the activities regarding purchase are
done through SAP system.
The warehouse prepares a raw material requirement sheet & sends it to the purchase department
by SAP system so that purchase department knows that the raw material is required.
Purchase department received the requirement of the raw material from different department &
as per their needs the order has to be released to the specific vendor.
If any time the company wants to add new vendor in their list vendor has to fill up standard
form and they have to spend their terms and condition to the company and by consider all the
information of that vendor the company add that vendor to their list.

57
 The activities regarding purchase of the raw material and packaging material are done through
the centralized office which is located in Ahemdabad.
Only the order of the lab raw material like acidic, methanol and other basic material which is
require in the R & D is released from the department.
Whenever company wants to purchase the raw material again the previous bill has to be sending
to the head office and then head office makes the payment of that bill and then after the new
order has to be released.

Company has made the policy regarding the purchase for every department. The company has
made the limit of purchase and if any time company wants to purchase beyond that limit then
the company has to take the permission from the head office.

PURCHASE PROCEDURE
If any user department requires any material, they prepare Material Requisitions and send to Stores
Department. If material is not available in the Stores then they inform purchase they inform
purchase department and from here purchase procedure starts.

58
 Purchase
Department
Recognition of need of an item by user department

Approved by Department Head

Receiving Purchase Requisition online

Stock Verification In Stores Department

Identification of kind of material needed

If it is raw material centrally If required material is

purchased and then requirement decentralized purchased
is send to Head Office

Accordingly order is placed Placement of order

to Pre Approved Vendor according to type of material

Regular Follow-Up

59
DEPARTMENTAL STRUCTURE OF STORE DEPARTMENT

Chairman & Managing Director

President

General Manager

Manager (store)

Sr. Executive

Office supervisor Workman 2

Sr.Office Assist
Office Assistant 3

SUPERVISOR

60
TYPES OF STORES
Zydus Cadila has three types of stores: -
Raw material store
Hazardous raw material store.
Finished goods store
Engineering store
In this company different type of material are stored according to their respective nature.

RAW MATERIAL STORE

All type of raw material, which are used in finished goods, are store in raw material store. All types
of packing material are also store in raw- material store like drums, plastic bags.

HAZARDOUS RAW MATERIAL STORE

Here, all type of hazardous material like charcoal, hyflo super cell, etc is stored.

FINISHED GOODS STORE

All type of finished goods after packing, testing by QC & approved by QA are store & are sealed in
finished goods store.

ENGINEERING STORE
All types of engineering item are stored in this store. There are different types of sections in
engineering store like electrical, bearing & Glass, Vbelt & oil seal, maintenance, project.

61
62
 STORE LAYOUT
1. Receiving Bay
2. De-dusting Area
3. Weighing Room
4. Rejected R.M Storage Room
5. Quarantine Room
6. Sampling Room
7. AC Quarantine Room
8. Powder Dispatch Room
9. Washing Room
10. Office
11. Approved R.M Room
12. AC Approved R.M Room
13. Hazardous R.M Room
14. R.M Exit

MATERIAL HANDLING STORES

There are two types of material handling equipment.
1. FIXED PATH EQUIPMENT
Pipeline
Gravity

2. VARIABLE PATH EQUIPMENT

Straiter
Hand trolley
Fork lift

STORES PROCEDURE:

RECEIPT
Security personnel will inform stores personnel regarding receipt.
Stores personnel shall collect papers and verify the purchase order available with them.
After verification of papers, stores personnel shall instruct to allow the transport vehicle inside the premises.
They shall make necessary arrangements for unloading material from vehicle to unloading and de-dusting
area.
Necessary cleaning certificate from the supplier shall be checked on the receipt of tanker.
Documents available with material shall be verified by store personnel to ensure followings:

63
 No. Of container / packages.
Quality per package.
Condition of container.
Seal verification.

Store department prepares MR (Material Receipt) and send to QC department.

And then, from here samples are taken by QC for testing from sampling room.
And samples are tested by QC department.

STORAGE:
According to the testing report, if the raw materials are not as per the requirement, raw materials
will go to rejected raw materials storage room. Otherwise it will go to Approved raw materials
storage area.
There are 3 types of Approved raw materials room: AC Approved raw materials room, where
temperature is checked twice in a day, Non-AC Approved raw materials room and Solvent room.
Those raw materials which require cool temperature are stored in AC Approved raw materials
room.
In storage area, materials are stored according to their respective specifications.

ISSUE:
One receipt of the Material Requisition (MR) slip, stores personnel issue the material to the
concerned department.
The stores personnel should ensure that material being as per the MR slip. Generally, raw material
is issued on FIFO basis
If the raw material is not available in store then Store department informs to the Purchase
department, otherwise Store department issue raw material as much required by user.

MATERIAL CODING SYSTEM

IN Zydus Cadila m is based on tagging system. In this system they user only numerical code.
Alphabets are not used Material Coding System. Specific number is used for specific raw material. So
function of storing and issuing become easily.

INVENTORY MANAGEMENT SYSTEM

FIFO (First in First Out) system is used for Inventory management.

STOCK VERIFICATION
Company does stock verification regularly. All the types of stock material are verified at the end of
month manually and list of material are cross-checked with SAP entry.

64
 QUALITY ASSURANCE (QA) & QUALITY CONTROL (QC)
DEPARTMENT

DEPARTMENT STRUCTURE AND ACTIVITIES

DEPARTMENT STRUCTURE OF QA

Chairman & Management Director

Sr. Manager

Sr. executive 2

Executive 2

Sr. Chemist 4

Chemist 9

65
ACTIVITIES OF QC DEPARTMENT
QA unit can approve or reject all components raw material and packing material, labeling in
process material, intermediates and finished API.
QA is responsible for quality compliance in plants.
In process testing & testing of intermediates is also carried out by QA department.
For maintaining quality, equipments are analyzed and their qualification is done.
Process validation is done when a new process is given by R & D department before its
implication.
Stability is approved by testing under varying temperature and condition QA department.
Out of specialization QA department also handles case of the product.
QA department handles market complaints.
In case of market complaints, QA department is responsible for product recall.
QA department is responsible in detail as to proper documentation.
Certified of analysis is issued by QA without which sealing of finished goods cannot be done.
Without QA departments approval finished goods cannot be dispatched.
QA department is responsible for training CGMP & Quality maintenance and recording detail
of training program.
QA department handles internal and external audits.
QA department handles change control mechanism.

ACTIVITIES OF QC DEPARTMENT
QC department inspect and tests all components of raw material and packing material,
labeling in process material, finished and intermediaries API.
QC department is responsible in detail as to proper documentation and endorsement of various
record, procedure forms, stickers etc throughout this manual.

QC department is commissioned to cover all aspects of manufacturing processing and

packaging to carry out various stages of operations.
QC department is responsible to review specification, sampling instruction test methods and
quality control methods.
QC department is responsible for testing and release of vendor samples.
QC department is responsible for analysis of ETP (Effluent Treatment plant) samples and R
&D samples.

66
TYPES OF INSTRUMENTS USED
HPLC
GC
IR
UV
XRD
Balance
Polari meter
Hot Air Oven

METHODS OF CALIBRATION
NAME OF THE INSTRUMENTS CALIBRATION PERIOD

UV 6 Months

X-ray Diffractomener 6 months

Micro Balance Monthly

Analytical Balance AUX220 Daily

Polari meter Daily

Vacuum Guages Yearly

Potential Meter 6 months

TLC Cabinet 6 months

Stability Chamber Yearly

Stop Watch Yearly

Particle size analyzer 6 months (outside party)

Thermo gravimetric analyzer Yearly

Differential scanning calorimeter Yearly

67
PARAMETER TESTED IN THE LAB

Description
Solibliting
Practical size
Water content
Melting point
UV spectroscopy
Residual Solvents
Tapped density
Polymorphism

68
 EXCISE DEPARTMENT

ACTIVITY OF EXCISE DEPARTMENT

Basically this department is involved in the matter of exercise as its name suggest.
The main function of excise department is to issue excise invoice when the goods is send
outside to the company.
This excise invoice includes all the information about material like name of the material,
manufacturing date, manufacturing cost, traffic rate which is fixed for each product etc.
In excise invoice the company also include amount of the insured stock.
The rate of the VAT is 5%. Apart from additional 1% is added as education and more 1% is
added as Higher Education.
The Department is also involved in the activities of exports.
Whenever company want to export the material then this department issue the excise invoice
but in this invoice no excise duty is mentioned because government want to promote the export
so company gets benefits of exports but company has to give proof to government that real
export are made by the company because many companies manipulate the government by
showing the wrong exports.
The department has to make the monthly excise return from ER-1 and the form has to submit
in the excise office or particular bank before the every 10 date of the each month.
If any time the company makes a late submission of the excise invoice then the registration of
the company can be cancelled.

MODE OF DISPATCH AND LOGISTICS

There are basically three basic mode of dispatch

1. By road
2. By air
3. By sea

SOURCES OF THE MODE DISPATCH

Every year they call quotation for transport of raw material and finished goods and contract is made
for transportation. Here, they dont have their own transport. They give contract for transportation to
external parties like Tirupati transportation.

69
MINI REPORT

70
 INTRODUCTION OF RESEARCH STUDY

PERFORMANCE APPRAISAL:
Performance appraisal is defined as the process of assessing the performance and progress of an employee
or a group of employees on a given job and their potential for future development. It consists of all formal
procedures used in working organizations and potential of employees.

Performance appraisal is the process of gathering, analyzing and recording information about the relative
worth of an employee. The focus of the performance appraisal is measuring and improving the actual
performance of the employee and also the future potential of the employee. Its aim is measure what an
employee does.

DEFINATION:
Performance appraisal is the systematic description of an employees job relevant strengths and
weaknesses.
-Wayne Cascio

Performance appraisal is the systematic, periodic and an important rating of an employees excellence
in matters pertaining to his present job and his potential for a batter job.
-Flippo

Performance Appraisal is the systematic evaluation of the performance of employees and to understand
the abilities of a person for further growth and development. Performance appraisal is generally done in
systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans.

2. The supervisor analyses the factors behind work performances of employees.

3. The employers are in position to guide the employees for better performance.

Characteristics:
Performance appraisal is a process.
It is the systematic examination of the strengths and weakness of an employee in terms of his job.
It is scientific and objective study. Formal procedures are used in the study.
It is an ongoing and continues process wherein the evaluations are arranged periodically according to
a definite plan.
The main purpose of performance appraisal is to secure information necessary for making objective
and correct decision for an employee.

71
Process:

The process of performance appraisal:

1) Establishing performance standards.
2) Communicating the standards.
3) Measuring performance.
4) Comparing actual with the standards.
5) Discussing the appraisal.
6) Taking corrective action.

Features of Effective Performance Appraisal system:

The objective of performance appraisal should be clear, specific, timely and open.
Appraisal system should provide consistent, reliable and valid information and date. Appraisals
should measure what they are supposed to measure.
The appraisal form, procedures and rules should be standardized. There should be well-defined
performance criteria and standards.
Evaluators should be given training in procedures and principles of appraisal.
Is should provide information on job related activities and areas.
Before introducing the appraisal system, a climate of mutual trust, cooperation and confidence should
be created in the organization
The rating should be communicated to both the employees and the ratter and it should be open and
participative.

Objectives of Performance Appraisal:

Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage structure, salaries raises,
etc.
2. To identify the strengths and weaknesses of employee to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and development.
4. To provide a feedback to employees regarding their performance and related status.
5. It serves as basic for influencing working habits of the employees.
6. To review and retain the promotional and other training programmes.

72
Advantages of Performance Appraisal:
The advantages of performance appraisal system are as follows:

Measures an employees performance.

Helps in clarifying, defining, redefining priorities and objectives.
Motivates the employee through achievement and feedback.
Facilitates assessment and agreement of training needs.
Plays an important role in personal career and succession planning.
Clarifies team roles and facilitates team building.
The systematic procedure of performance appraisal helps the supervisors to frame training policies
and programmes. It helps to analyze strengths and weaknesses of employees so that new jobs can be
designed for efficient employees.
Performance appraisal helps the supervisors to carry out the promotion programmes for efficient
employees. In this regards, inefficient workers can be dismissed or demoted in case.
Improves understanding and relationship between the employee and the reporting manager and also
helps in resolving confusions and misunderstandings.
Merit rating is possible through PAS. Compensation packages which include bonus, high salary
rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The
criteria should be merit rather than seniority.
Performance appraisal helps the supervisors to understand the validity and importance of the
selection procedure.
Through performance appraisal, communication can be sought for in the following ways:
The employers can understand and accept skills of subordinates.
0The subordinates can also understand and create a trust and confidence in superiors.
It helps in maintaining cordial and congenial labour management relationship.
Develop the spirit of work and boosts the morale of employees.
It develops the spirit of work and boosts the morale of employees.
Helps in counseling and feedback.

73
Method of Performance Appraisal System:
a) Traditional Method:
Essay Appraisal Method
Straight Method
Paired Comparison
Critical Incidents Method
Field Review
Checklist Method
Graphic Rating Scale
Forced Distribution

b) Modern method:
MBO
360 Degree Appraisal
Assessment Centers
Behaviorally Anchored Rating Scales
Hr Accounting

74
Literature Review:

1. Abhinanda Gautam (2014), a study on the performance appraisal system practiced in sugar mills,
and its impact on employees motivation. The researcher had used questionnaire for data collection.
The study with the sample size of 42 middle level managers and executives revealed that the
performance appraisal has a significant impact on employees motivation, and several parameters like
clarity incentives employee productivity etc. were taken into consideration. It is found that
performance appraisal system being practiced in SSL assess key result areas of their employees,
workers and supervisors. The performance is measured on the methods of BARS, behavioural
parameter and performance scorecard based on set KRAs. The better performing employee gets the
majority of available merit pay increases, bonuses and promotions.
2. D.B.Bagul (2014), a study of employees performance management system. The main objectives of
the research are to study of performance management systems in L&T, to examine the importance of
appraisal system, to study existing appraisal system, to determine the satisfaction level of the
appraise. For primary data collection questionnaire used and interviews are used. And for secondary
data magazines and other industrial documents are used. Total population is 65 and sample size is 50.
For sampling random sampling is used. It is found that 30% employee are satisfied with p.a. system,
32% are unknown about objectives of p.a., 100% employee say that they are not given the chance to
rate their own performance and they are satisfied with MBO. It is concluded that manager and staff
should discuss post and present issues and as both appraise and appraiser expects same from
performance appraisal are the same-promotion and salary benefit.
3. Dr. A. Tharmalingam M, T.Manimegalai (May 2013), a study on the role of performance appraisal
system in HRD. The objective of the study the effectiveness of performance appraisal system in State
Bank of India and to study role of performance appraisal system in HRD in SBI fir the data collection
a questionnaire is used. In SBI key performance area is basis of PAS. Most important use of PAS is to
identify the training needs. It is concluded that in SBI all the employees believe that there is a link
between the efforts and work. The performance, reward and satisfaction are also related. This leads to
motivation and it leads to enriches the knowledge of the employees through career planning and
career develpoment.PAS adopting in SBI have been effective and tries to thrive the organizational
capabilities to serve better in future.
4. Dr. S. Jansirani, R. Hatrikrishna, Jaya Kani, A.saisathya (2013), a study on performance
appraisal system at Wipro Infrastructure Engineering Pvt Ltd. The primary objective is to identify the
actual performance of the employees and performance appraisal program. The research type is
descriptive and for sampling stratified sampling method is used. For primary data collection field
surveys is used and for secondary data magazines, books, journals and records maintain by HR
department are used. Sample size is taken 100 from the population of 700. It is found that 40%
respondent are agree that safety adopted in organization is helpful for their work activities, 37%
respondent are agree that comments and suggestion are considered during appraisal. It is suggested
that the company should introduce new methods to provide good services promptly and efficiently at

75
 the time of employees measures. It is concluded that appraiser and appraise should realize the
principle and use tool of appraisal system in a constructive way for the prosperity of the organization.
5. Dr.Gangwani (2012), the employee survey on performance appraisal system. The objectives of the
research are to study the existing performance appraisal system being undertaken in BHEL, to know
the perception of the employees for the effectiveness of existing system of performance appraisal in
BHEL, Bhopal and to discuss at length with cross section of the employee satisfaction level regarding
the setting of target & KRAs, guidance provided by the superior, and the process of identification of
training needs in BHEL. The research type is descriptive and quantitative and the sampling method is
random sampling. Sample size is 50. Data are collected by questionnaire. It was found that the
performance appraisal system followed by the organization is very effective, system of organization
has helped employees in identifying their strengths and weakness and employees are satisfied with
the existing system of performance appraisal. It is concluded that the employees perform their duties
well and performance appraisal continuously, motivate the employees to achieve their goals indirectly
helping the organization to achieve its goals.
6. Dr.Lalita Mishra (Feb 2013), a research study on employee appraisal system (case of Hong Kong
and Shanghai banking corporation). The major objective of the research study is to study the overall
system of performance management and appraisal system for the HSBC Bank. For the primary data
collection interviews are used and for secondary data publication, journals, news paper and
government records are used. In this case, HSBC requires an appropriate coordination between the
training and development and HRM so as to achieve the purpose of research study. He founds that the
PAS is carried out for the benefits of management at the same time it also motivates employees for
the action required by the management of the organization. It is concluded that it plays a very vital
role in the organization in achieving the goals of the organization.
7. Dr.Prohit (2014), a study on the performance appraisal system of co-operative banks in Pune- Its
implication to employees performance. The study examined the status of the performance appraisal
system of cooperative banks and its implication to employees performance. The study is qualitative
and quantitative. The purposive sampling technique is used in selection of 35 respondents. For the
data collection interviews, questionnaire and focus group discuss are used. It is found that
performance appraisal system of cooperative banks has brought about positive and negative impact
on the employees performance. And it is suggested that employees should be evaluated on the basis
of the requirements of their job, their duties and responsibility.
8. Dr.Sevarasu, Sastry (2014), a study of impact on performance appraisal on employees engagement
in an organization. The purpose of this research is to explore the relationship between perception of
performance appraisal fairness and employee engagement in the business organization context. It is
found that many companies find it challenging to measure engagement and tie its impact to financial
results. It is concluded that majority of compensation professional do not necessarily consider how
total rewards program affect employee engagement in the design of rewards structure, policies and
programs.
9. Ishaq, Iqbal, Zaheer (2009), a study on the effectiveness of performance appraisal: its outcomes and
determinants in Pakistani organization. The research aims at studying outcomes of performance

76
 appraisal and exploring factors that can make harm to the PA effectiveness in the perspective of
Pakistani public and private sector organization. Data are collected through survey by questionnaire
of 127 managers and employees. The research revealed that in Pakistani public and private sector
organization awareness level about outcomes of effective performance appraisal is more than factors
that can make harm to the effectiveness of performance appraisal.
10. Kamencu (2011), a study on the effect of performance appraisal system on employees in Kenya tea
development agency (survey on selected tea factories in Meru County- Kenya). The purpose of the
study is to investigate the effectiveness of performance appraisal system in Kenya tea development
agency with focus on, Githongo, Imenti tea factory, Kiegoi and Miciimikuru tea factories in Meru
County in Kenya. The research type is descriptive research design. Sample are selected from
population of 348 possible respondent using stratified random sampling by taking 20% of the target
population. So, 70 respondents are taken for as sample and for data are collected by questionnaire.
The research revealed that competence, assessment and development, management by objective,
performance based pay and employee training all had an effect on employee performance in Kenya
tea development agency.
11. Nimitha Aboobaker (2015), the study on the performance appraisal system at Dabur India Ltd. It is
found that employee with outstanding performance gets promoted, with good performance employee
are sent to training programme to improve their skill and with below average performance employee
gets terminated from work. It is recommended that remedial measures taken may include job rotation
and training programme, the feedback needs to be increased and job descriptions need to be provided
to the employees with more clarity.
12. P. Zvavahera (2013), an evaluation of the effectiveness of performance management system on
service delivery in the Zimbabwean civil service. The main objective of the research is to evaluate the
effectiveness of results based management system on service delivery in Zimbabwean civil service.
The methodology employed document analysis, open-ended questions and face to face interviews. It
concluded that the current performance management system was not enhancing. It was found that
89% respondent indicate that the performance information was partially being used to identify
performance gaps so that proper training programmes could be put in place and 79% respondent
indicate that the performance information was partially being used for financial rewards,
advancement, and promotions. It concluded that the current performance management system was not
enhancing the provision of quality service in the civil service because employees did not see any
merit in its application.
13. P.Suresh, Mohideen (2013), a study on performance appraisal of Automobile industries, at Chennai,
Tamilnadu. This researchs objectives are to study the performance appraisal system in Automobile
industries, to measure the effectiveness of performance appraisal in the organization, to measure the
satisfaction level of employees with present method of performance appraisal, to study the
satisfaction level of communication of feedback by appraiser. The research type is descriptive. The
data are collected by personal interview of employee. Both probabilities sampling and convince
sampling is used for sampling. It is found that 44% respondent were provided with adequate to
feedback for their performance, 82% respondent feel that performance appraisal increases the

77
 confidence level of employee. It is concluded that most of the respondents satisfaction is not high
with the current appraisal method.
14. Payne, Horner, Boswell, Schroeder and Stine-Cheye (2008), the study comparison of online and
traditional performance appraisal systems. The purpose of the study is to compare employee reaction
to the use of an online performance appraisal system to the traditional paper and pencil approach.
Quasi-experimental research design is used for research. It is found that Employee rate with the
online version reported significantly higher levels of ratter accountability and employee participation
than employees rate with the traditional instrument. It is concluded that there is no difference in
perceived security of the ratings, or satisfaction with the PA.
15. Reddy, Dr. S Thiyagarajan, Dr. Viswanathan (2014), a study on the impact of performance
Appraisal system on organizational growth- A study with special reference to ITES sector. The study
aims to analyze the factors which hinder the effective performance appraisal system in organization
and also to examine the impact of effective performance appraisal with regards to organizational
growth and development. The research methodology descriptive and for sampling non-probability
sampling (convince) method is done. And 318 employees are chosen as sample from 10 software
and 10 BPO companies. Questionnaire is chosen for data collection. The study concluded that there
is a need for effective performance appraisal system to be practiced in reality. It is also felt that to
make the performance appraisal effective there is a need for continuous monitoring system.
16. Renganayaki (2013), a study on the effectiveness of performance appraisal in G.B engineering
Enterprises (p) Ltd., Thuvakudi, Tamilnadu. This research attempts to evaluate the performance of
the employee in G.B Engineering Enterprise (p) Ltd. The research design is of the study is
descriptive. For sample random sampling is used and 150 employees out of 500 employees are
randomly selected. For primary data collection observation, personal interview and questionnaire are
used and for secondary data collection books and internet are used. It is found that performance
appraisal helps in job promotion, training and development, giving feedback, selection and
classification of workers. It is concluded that appraisal of performance must be done carefully and
continuously and it is beneficial not only for the organizational but also for employees.
17. S. F. Chandra Sekhar (Sep, 2007), the study is based on PAS scale development and its usage. He
said that this scale could be used to diagnose the effectiveness and evaluation of the effectiveness
PAS. There are seven components of the system that develop the scale to assess the effectiveness of
the system. Therefore each of the components should be examined using this scale. It could be used
to make inter-organizational and intra-organizational comparisons of the perceptions of wider
constituents of the work system raging from public private to the nonprofits, besides the executives.
18. Seniwoliba (2014), the study on assessing the performance appraisal concept of the local government
service in Ghana. The study seeks to investigate the assertion that staff performance appraisal was not
being effectively implemented in the local government service of Ghana. For research qualitative
research method is used. The data for investigation were collected using questionnaire and interviews.
The questionnaires were of two sets: for appraisers and for appraises. For sampling non-probability
sampling method i.e. purposive and convince. The research revealed that the graphic rating scale
appraisal system was the one still invoke with only one type of appraisal form for both junior and

78
 senior staff as all 50 staff members indicated. It is concluded that improving any performance
appraisal system is a complex proposition that requires developing sound appraisal procedure and
motivated as well as skilled ratters. The study reveals that most of the respondent lacked the needed
knowledge about performance appraisal.
19. Sing, Dr.Vadivelu (2013), a study on the performance appraisal in India. The paper is aimed at
providing a review on the various performance appraisal technique practiced in Indian economy and
also highlights on effective of PA system in various Indian Industries. It is concluded that PA is
important tool for getting information to take many critical human resource decision.
20. V.K.Singh, Bani Kochar, Sedat Yuksel (2010), an empirical study on the efficiency of
performance appraisal system in Oil and Natural Gas Commission, India. The objective of the study
is to analyze the significance of existing system of performance appraisal and the causes for its
ineffectiveness if any. For research exploratory research type is used. For the sampling stratified
sampling method is used and 100 sample size is taken from 1539 executives. For the primary data,
data are collected from questionnaire, interview and discussion with respondents and for secondary
data collection journal, internet and annual reports are used. It is concluded that executives were
oblivious and unclear of the nature of the sources from where the information is extracted to judge
their performance. Also, it is suggested that inefficiency inherent in the system can be solved by
introducing a modern approach.
21. Virani (2012), an analytical study of performance appraisal system of the selected information
technology enabled services (ites) companies. The researcher has made an attempt in this work to
gather and critically examine the valuable inputs from various representative ITES companies and
carry out a deductive/inductive analysis of the qualitative and quantitative data for arriving at desired
results. In this present paper, with the help of questionnaire analysis, the existing performance
appraisal systems of the selected ITES companies have been evaluated on the basis of criteria
considered for appraisal, process of communicating standards, feedback mechanism, and
performance review process, Clarity of performance appraisal process and transparency of
performance appraisal process. It appears that the respondents of the majority of selected ITES
companies are in agreement with their existing performance appraisal system.

79
 Research Methodology:
Title of the study:
A study on effectiveness of the Performance Appraisal System at Zydus Cadila Healthcare Ltd.

Statement of the problem:

It is necessary for any organization to get proper output from employees for growth and target
achievement. Performance appraisal system rates employees performance and appraise employee with
motivation and compensation for better future of employee and organization. For this purpose study of
effectiveness of performance appraisal system at Cadila Health Care Ltd. is adopted.

Objective of study:
Primary Objectives:
1) To study the existing Performance Appraisal system of Cadila Health Care Ltd.
2) To know the perception of the employees for Performance Appraisal system in Cadila Health Care
Ltd.

Secondary Objectives:
1) To study the effectiveness of Performance Appraisal System in Cadila Health Care Ltd.
2) To determine the factors that influence performance appraisal system in Cadila Health Care Ltd.
3) To offer suggestions based on finding of the study

Scope of the Study:

The present study is confined to Performance Appraisal System adopted by Cadila Health Care Ltd.,
Ankleshwar. The study aimed to find out effectiveness of Performance Appraisal System at Cadila Health
Care Ltd.

Research Design:
Research design is descriptive.A detailed outline of how an investigation will take place. A research
design will typically include how data is to be collected, what instruments will be employed, how the
instrument will be used and the intended means for analyzing data collection.

Sample Design:
Sample Technique: Non-probability convince sampling
Sample size: 80

80
Sampling Area: Zydus Cadila HealthCare Ltd., Ankleshwar.

Sampling Units: Sampling units comprise of staff employees from various departments; it includes both
male and female

Sources of Data:
The study is based on primary and secondary data.

Primary data: For primary data, research work has been collected through structured questionnaire

Secondary data: Secondary data has been collected from Earlier records from journals, magazines and
websites other sources.

Limitations:

The study will limited to a company- Zydus Cadila Healthcare Ltd.

The study will limited to 80 Respondents (employees of the company).
We will assume that respondents are honest and true in Expressing and filling questionnaires.

Tool used for analysis:

Rank and rating scale
Likert scale

81
 Data Analysis and Interpretation:

Section A:

Q: 1 Gender Profile employees

Gender Frequency Percentage

Male 74 92%

Female 6 8%
Total 80 100%

Gender

8%

Male
Female

92%

Interpretation:
The above table and chart shows that 92% of the respondents are male and 8% are Female. So, it can
be interpreted that more male employees are working in the Zydus Cadila than female.

82
Q: 2 Age Group of employees:

Age Group Frequency Percentage

20 - 30 15 19%
30 -40 41 51%
40 -50 21 26%
50 above 3 4%
Total 80 100%

Age

55%
50%
45%
40%
35%
30% 51%
25%
20%
15% 19% 26%
10% 4%
5%
0%
20 - 30 30 -40 40 -50 50 above

Series1

Interpretation:
It is found that 19% employees belong to the age group of 20-30. And 51% of the employees are from
30-40. In age group of 40-50 there are 26% employees. 3 employees constituting 4% are above age of
50.

83
Q: 3 Marital status employees:
frequency Percentage

Single 13 16%

Married 67 84%

Total 80 100%

Marital Status

16%

single
married

84%

Interpretation:

It can be seen from the table and pie-chart that from 80 respondent 84% employees are married and
16% employees are single. There are more married employees working in the Zydus Cadila.

84
Q: 4 Designations of employees:

Designation Frequency Percentage

Technical 52 65%
HR/Admin 13 16%
Non- technical 11 14%
Other 4 5%
Total 80 100%

Designation
70%

60%

65%
50%

40%

percentage
30%

20%

10% 16%
14% 5%

0%
Technical HR/Admin Non- technical Other

Interpretation:

As shown in the table and chart 65% of 80 respondents are from technical position and 14% are from
non-technical position. 16% are from HR and admin position. 5% are from other position, which
include

85
Q: 5 Department of employees:

Department Frequency Percentage

Admin/HR 7 9%
Production 50 62%
Finance/ Acc. 5 6%
Other 18 23%
Total 80 100%

Department
70%

60%

50%
62%
percentage

40%

30%

20%

10% 6% 23%
9%
0%
Admin/HR Production Finance/ Acc. Other

Interpretation:
The above table shows that 9% respondent is from HR and Admin department. And major respondent
are from production department that is 62% which means 50 respondents. And also 6% respondents are
from finance and account department. Moreover that, 23% respondent is from other department that is
Engineering, Quality assurance, Quality control, Purchase.

86
Q: 6 Education of eemployees:

Education Frequency Percentage

Under Graduate 0 0%
Graduate 32 40%
Post Graduate 45 56%
Other 3 4%
Total 80 100%

Education
0%
4%

Under Gratuate
40%
Gratuate
Post Gratuate
56% Other

Interpretation:
It can be shown in the table and pie-chart that there is on one who is Undergraduate amongst the 80
respondent. 40% responded employees are graduate, and 56% respondents are Post-graduate. And only
3 respondents are from other category.

87
 Section B

Q: 1 Does your organization operate formal performance management system?

Frequency Percentage
Yes 80 100%
No 0 0
Total 80 100%

100%
90%
100%
80%
70%
60%
percentage

50%
40%
30%
20%
10% 0

0%
Yes No

Interpretation:
It is shown from that chart that 100% respondent is agreed that the company is operating
performance appraisal system.

88
Q: 2 Which of the following groups of employees do these processes apply to?

Frequency Percentage
Senior Manager 80 100%
Other Manager 0 0
Technical 0 0
Professional 0 0
Other Manager 0 0
Total 80 100%

Person doing Performance Appraisal

100%
90%
80% 100%

70%
60%
50%
40%
30%
20%
10% 0 0 0 0
0%
Senior Manager Other Manager Technical Professional Other Manager

percentage

Interpretation:
It is found that senior manager of the employees is doing performance appraisal in Cadila
Healthcare Ltd.

89
Q: 3 How frequent performance appraisal system conducted in Cadila Healthcare
Ltd?

Frequency Percentage
Frequently 0 0%
Once in a year 80 100%
Rarely 0 0%
Not at all 0 0%
Total 80 100%

Frequncy of PAS
120%

100%

80%

60%
100%
40%

20%

0% 0% 0% 0%
Frequently Once in a year Rarely Not at all
percentage

Interpretation:
It is found that performance appraisal is carried out yearly by the company.

90
 Factor Analysis:
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling
.701
Adequacy.
Approx. Chi-Square 521.358
Bartlett's Test of Sphericity df 190
Sig. .000

Total Variance Explained

Component Initial Eigen values Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 4.868 24.339 24.339 4.868 24.339 24.339
2 2.443 12.213 36.552 2.443 12.213 36.552
3 1.590 7.950 44.502 1.590 7.950 44.502
4 1.448 7.242 51.744 1.448 7.242 51.744
5 1.288 6.439 58.183 1.288 6.439 58.183
6 1.034 5.171 63.355 1.034 5.171 63.355
7 1.001 5.006 68.361 1.001 5.006 68.361
8 .925 4.623 72.984
9 .832 4.160 77.143
10 .683 3.415 80.559
11 .621 3.107 83.666
12 .524 2.620 86.285
13 .510 2.548 88.834
14 .472 2.360 91.194
15 .438 2.190 93.384
16 .373 1.866 95.251
17 .303 1.513 96.764
18 .272 1.362 98.126
19 .226 1.130 99.257
20 .149 .743 100.000
Extraction Method: Principal Component Analysis.

91
 Component Matrix
Component
1 2 3 4 5 6 7
s-1 -.302 .238 -.591 .283 -.016 .255 .160
s-2 .281 .653 -.289 .218 .041 .028 -.161
s-3 -.252 -.039 .659 .018 .325 -.227 .238
s-4 -.237 .196 .418 .163 .561 .362 -.104
s-5 .241 .373 .197 .456 -.402 -.162 -.355
s-6 -.583 -.059 .063 .521 -.133 -.208 .195
s-7 -.627 .223 .064 .336 -.199 -.123 .127
s-8 .438 .499 -.167 -.080 .264 -.144 .293
s-9 .602 -.241 -.091 -.002 -.045 .150 .385
s-10 .748 -.032 .138 -.073 -.157 .214 .261
s-11 -.483 .529 .035 -.346 -.141 .127 .263
s-12 .639 .024 .121 .288 .115 .176 .015
s-13 .254 -.452 -.153 .656 .290 -.020 .124
s-14 -.092 .339 .409 .158 -.354 .075 .456
s-15 .426 .588 .072 -.085 -.131 -.172 -.079
s-16 -.070 .663 .018 .052 .470 -.001 -.074
s-17 .777 .154 -.002 .061 .048 -.096 .057
s-18 .875 .021 .017 .091 -.064 .096 .072
s-19 -.495 .074 -.473 -.022 .180 -.116 .278
s-20 -.398 .070 .094 .098 -.177 .705 -.097
Extraction Method: Principal Component Analysis.

Factor 1: the performance appraisal not effective

S6 Performance appraisal is a good tool to appreciate the work done by other.
S7 It helps to differentiate good performance from poor performance.
S9 It is very lengthy.
S10 Performance appraisal is too complex.
S12 Performance appraisal seems to be a punishment tool.
S17 Performance appraisal is subjective.
S18 The documentation associated with performance management is unclear & unhelpful
S19 Performance management is a two-way process, with both manager & employee expressing
their views.

92
Factor 2 Organizational
S-2 Performance appraisal needs are correctly identified by Cadila Health Care Ltd
S-8 It should be well planned and implemented with sincerity.
S-11 It is used as a tool for reward.
S-15 Performance appraisals give constructive criticism in a friendly and positive
manner
S-16 Organization helps me to my performance through training and development

Factor 3: Importance
S1 Performance appraisal helps people set and achieve meaning full goal.
S3 Performance appraisal helps to improve employees productivity.

Factor 4: Behavioural
S5 Performance appraisal helps to change behaviour of employees.
S13 It lacks time discipline.

Factor 5: Motivation

S4 Performance appraisal improves motivation and job satisfaction.

Factor 6: Nature of performance appraisal

S20 Performance appraisal helps the company in identified any
bottleneck/Challenges in performance

Factor 7:
S14 It helps aligned individual performance to organizational goals.

93
Q: 5 Rate the following elements from 1 to 5 (5 is most important and 1is less
important) according to their importance for performance appraisal.

1 2 3 4 5 Weighted
score

Discipline 0 2 21 34 23 318

Attendance 0 0 11 47 22 331

Job Satisfaction 0 1 4 27 48 362

Relationship 1 18 43 13 5 243
with
Employees

Plan of Work 1 0 6 46 27 338

Decision 0 8 23 32 17 298
Making

Guidance 15 26 12 17 10 221

performance 1 2 1 14 62 374

Absenteeism 34 21 18 6 1 159

Dependency 17 34 20 9 0 181

Integration 0 10 44 26 0 256

94
 400
374
362
350 331 338
318
298
300
256
243
250
221

200 181
159
150

100

50

Interpretation:
It can be shown in the chart that performance has weighted score. So, it can be interpreted that
respondent believe that performance is most important for performance appraisal. Then respondent
believe that job satisfaction is most important with the weighted score 362. Then Plan of work,
attendance, and discipline with weighted score 338,331 and 318 respectively. Absenteeism and
dependency is least important according to respondent with the weighted score 181 and 159
respectively.

95
Q: 6 Rank the following elements of Cadila Healthcare Ltd. according to their
importance as a business strategy
Reduction in
Cost Increase Expand Improve
Rating Production
Reduction Productivity Market Quality
Time
5 9 15 9 14 33
4 18 22 7 15 19
3 22 19 7 21 10
2 23 21 9 15 13
1 8 3 48 15 5
Weighted
score 237 265 160 238 302

350
302
300
265
250 237 238

200
160
150

100

50

0
Cost Reduction Increase Expand Market Reduction in improve Quality
Productivity Production Time

Interpretation:
It can be seen from the above chart and table that improve quality is most important as a business
strategy with highest weighted score 302. And then increase in productivity is important with the
weighted score 265. And according to the respondents reduction in cost and production time is
important with weighted score 237 and 238. And at last with 160 weighted score expand market is
important.

96
Q: 7 What are the techniques that are used in your organization for assessing the
performance?
Techniques Frequency Percentage
Observation 0 0%

Assessment & Development Centers

0 0%
Checklist 80 100%
Other 0 0%
Total 80 100%

Techniques of Pas
100%

1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1 0% 0% 0%
0
Observation Assesment & Checklist Other
Development
Centres

Interpretation:
It can be seen from the table and chart that company is using checklist as a technique for doing
performance appraisal. A form is given to the employees for doing performance appraisal.

97
Q:8 Which the following methods of performance appraisal from a part of the system?

Method Frequency Percentage

360 Degree appraisal 0 0%
Rating Scales 0 0%
Self-appraisal 80 100%
Paired comparison 0 0%
Other 0 0%
Total 80 100%

Method of Performance appraisal

100%

1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
360 Degree Rating Scales Self-appraisal Paired Other
appraisal comparision

Interpretation:
It is found that company is doing performance appraisal by self-appraisal method and also they are not
using other methods of performance appraisal. But for giving appraisal senior managers are taken into
consideration.

98
Q: 9 What are the factors which affect job performance in Cadila Healthcare Ltd.?

Frequency Percentage
Organizational Culture 31 39%
Technology 6 7%
Competency of Employees 36 45%
Attitude 7 9%
Total 80 100%

Factors affecting Pas

0.45

0.4

0.35

0.3 45%
0.25 39%

0.2

0.15

0.1 7%

0.05 9%
0
Organizational Technology Competency of Attitude
Culture Employees

Interpretation:
It can be revealed from the chart and table that 39% of the respondent believe that organizational
culture is affecting the Performance Appraisal. Whereas, 7% believe that technology is affecting the
Pas. And major respondent with 45% believe that competency of the employees affects the Pas. And
remaining few 9% respondent believe that attitude of the person is affecting Performance appraisal
system.

99
Q: 10 What is your opinion regarding current performance appraisal system at Cadila
Healthcare Ltd.

Frequency Percentage
Highly Beneficial 26 33%
Beneficial 44 55%
Neutral 10 12.50%
Tend to be Inflated 0 0%
Not Beneficial at all 0 0%
Total 80 100%

Opinion regarding current PAs

60%

50%

40% 55%
30% 33%
20%

10% 12.50%
0% 0%
0%
Higly Benificial Neuatral Tend to be Not
Beneficial Inflated Beneficial at
all

Interpretation:
It is found that 33% respondent is believed the current performance appraisal is highly beneficial. And
above half of the respondent that is 55% feels that existing current performance appraisal system is
beneficial. And there is only 12.50% is opinion of neutral. So, it is reveals that overall most of the
respondent is feels that existing performance appraisal is beneficial.

100
Q: 11 Rate your satisfaction with current performance appraisal system of Cadila
Healthcare Ltd?

Frequency Percentage
Fully Satisfied 21 26%
Satisfied 48 60%
No of Opinion 8 10%
Partially Satisfied 3 4%
Dis-satisfied 0 0%
Total 80 100%

Satisfaction with current PAS

70%

60%

50%

40%
60%
30%

20%
26%
10% 10%
4% 0%
0%
Fully Satisfied Satisfied No of Opinion Partially Dis-satisfied
Satisfied

Interpretation:
It is revealed that 26%b of the respondent are fully satisfied. And maximum respondent that is 60% are
satisfied with the current performance appraisal system. And few respondents that is 10% are of no of
opinion. And only 4% respondent are partially satisfied with the current performance appraisal system.

Q: 12 Do you receive any increment in salary after performance appraisal?

101
 Frequency Percentage
Yes 80 100%
No 0 0%
Total 80 100%

Salary increment after PA

100%

80%

60%
100%
40%

20%

0% 0%
Yes
No

Interpretation:
Company is giving increment in salary after the performance appraisal. And can be seen in the
table and chart as all the respondent had answer positively for the increment after performance
appraisal.

Findings

102
Part -2
It is found that there is 51% employees are in age group of 30-40.
It is found that 9% employees from HR and Admin department. And major respondent are from
production department that is 62% which means 50 respondents. And also 6% respondents are from
finance and account department. Moreover that, 23% respondent is from other department that is
Engineering, Quality assurance, Quality control, Purchase.
Most of the employees of Zydus Cadila are Graduate and Post- Graduate.
The study reveals that Zydus Cadila is operating performance appraisal and senior manager is doing the
performance appraisal.
The performance appraisal is carried once in a year in Zydus Cadila.
The study reveals that according to the employees of the company performance and Job Satisfaction is
very important for the performance appraisal. Also absenteeism and dependency is less important
It found that according to the employees improving quality is most important as a business strategy
with highest weighted score 302. And then increase in productivity is important.. And at last with
160 weighted score expand market is important.
So the following rank can be given to the elements:

Rank Elements

1 Improving Quality

2 Increase in productivity

3 Reduction in production time

4 Reduction in cost

5 Expand market

It is found that Zydus Cadila follows Self-appraisal system and for that checklist is being use by the
company. A form is given to the employees to be filled for performance appraisal.
The study reveals that 39%employees believes that organizational culture affects the performance, 45%
employees believes that competency of the employees affects performs. And few employees 7% and
9% believes that technology and attitude of the employees affect the performance.
It is found that 33% employees find the current performance appraisal highly beneficial. And 55% find
it beneficial.
Most of the employees (60%) of the Zydus Cadila is satisfied with the existing performance
appraisal.26% are fully satisfied.
It is found that employee receives increment in salary after the performance appraisal.

103
 Suggestion
Zydus Cadila can conducted performance appraisal more than once in a year. So that employees are
evaluated frequently and performance can be increased by that. And also Zydus Cadila may conduct
performance appraisal by other method also like: 360 Degree appraisal, rating scale. So that employees
can be evaluated by all the parameters. Zydus Cadila is using Checklist as a technique of the performance
appraisal. But it can use other techniques also like: Observation, Assessment Centre. So that employees
can be rated by all looking to all the aspect. Employees of the Zydus Cadila have rated Performance and
Job-Satisfaction as a most important element for Performance Appraisal. So, appraiser may take that
element while apprising the employee.

Conclusion
All the result observed and achieved during research clearly indicates the importance and need of
performance appraisal in the organization. The study reveals that the employees perform their duties
well and performance appraisal continuously motivate the employees to achieve their goals
indirectly helping the organization to achieve its goals.

Performance appraisal needs are correctly identified by Zydus Cadila. And current Performance
Appraisal System is beneficial to the employees of the company. Most of the employees are satisfied
with existing performance appraisal system in Zydus Cadila. It can be also concluded that
Performance Appraisal System helps to build a good relationship between the management and
employees which helps to increase organizations productivity and employees job satisfaction.

104