ELDER PHARMACEUTICALS LTD.

(Incorporated on April 2, 1983 under the Companies Act, 1956)

Registered Office: 11-B, Dhanraj Mahal, Apollo Bunder, Mumbai- 400 001

Tel.: (022) 283 5802/ 283 5803/ 2851937 Fax: (022) 287 1868

website: www.elder-group.com

This being the first issue of the Company there has been no formal market for the securities of the Company. The issue price should not be taken to be indicative of the market price of the equity shares after the shares are listed. No assurance can be given regarding an active or sustained trading in the shares of the Company nor regarding the price at which the equity shares will be traded after listing.

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this offer unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this offering. For taking an investment decision investors must rely on their own examination of the issuer and the offer including the risk involved. The securities have not been recommended or approved by Securities and Exchange Board of India nor does Securities and Exchange Board of India guarantee the accuracy or adequacy of this document. The attention of Investors is drawn to the statement of Risk Factors on Page __ of the Prospectus.

The Company, having made all reasonable inquiries, accepts responsibility for, and confirms that this Prospectus contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Prospectus is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

1. Obsolescence of Molecules: The molecules manufactured and/ or marketed by the Company are subject to obsolescence and can affect the sales and performance of the Company.

Management Perception: The Company is alive to this situation and has been discontinuing/ substituting the molecules at appropriate time.

2. Withdrawal by Foreign Collaborators: The Company has entered into license arrangements with a number of foreign companies for manufacturing and marketing their research based molecules in India. Withdrawal by these collaborators of their license will have an adverse effect on the performance of the Company.

Management Perception - The Company has entered into Agreements with these Foreign Collaborators and has been working in accordance with the terms and conditions of the Agreements. The Company does not foresee any possibility of withdrawal by the Foreign Collaborators.

3. The building plans for the proposed bulk drugs project are yet to be submitted for approval to MIDC.

Management Perception – The plan for the building is under finalisation and will be submitted for approval to MIDC in due course.

4. The Company is yet to apply for sanction of utilities for the proposed project i.e. water and power. The Company is yet to apply for clearance from MPCB.

Management Perception – The Company proposes to make applications to the respective authorities for sanction of water and power and for clearance from MPCB at the appropriate time.

5. There are certain contingent liabilities amounting to Rs. 2732.29 lacs for outstanding Letters of Credit & Guarantees, which have not been considered in the accounts for the year ended September 30, 1999. For details, investors can refer to para ___ on page ___ of the Prospectus.

Management Perception: The Contingent Liabilities in respect of Letters of Credit are in the normal course of business of the Company and are regularly cleared. The contingent liabilities on account of Guarantees are ensured and performance against them is as guaranteed.

6. Elder Projects Ltd., an affiliate company has accumulated losses of Rs. 538.80 lacs as on March 31, 1999.

Management Perception: As a result of a series of corrective measures taken by the Management, the Company has turned around and it is expected that the accumulated losses would be wiped out in the coming years.

7. Obsolescence of Plant & Machinery: With passage of time, there is attrition of the plant & machinery and their improved versions are available in the market.

Management Perception - It is not economically viable to change the plant and machinery frequently. However, as and when required, the company purchases the machinery, which is latest in terms of technology and efficiency.

8. The Company is susceptible to foreign exchange fluctuations for the imports by the Company, and any adverse fluctuation in the value of the Rupee is likely to affect the financial performance of the Company.

Management Perception – The Company proposes to reduce its dependence on imports by manufacturing some of the import substitute bulk drugs on its own.

9. The Equity Shares of Elder Healthcare Ltd., which is an affiliate company of Elder Pharmaceuticals Ltd. are not frequently traded on either of the Stock Exchanges at Mumbai and Guwahati.

Investors may please note that in the event of oversubscription, allotment shall be made on a proportionate basis in consultation with the regional stock exchange i.e. Stock Exchange, Mumbai as per details appearing on page ___ of the Prospectus.

1. Existing profit making since 1990 and dividend paying company since 1994
2. Ranked 33^rd in terms of turnover on a monthly basis as per ORG report of September 1999
3. Ranked the 10^th fastest growing pharmaceutical Company in terms of turnover value and growth in market share in the first half of 1999 as per market review conducted by IMS Health (Source: Pharma Pulse Vol 6 No. 5 dated December 23, 1999)
4. Brands like Shelcal Tab (250/500), Eldervit 12 Injections and Chymoral Forte Tablets feature as No.1 products in therapeutics as per ORG report September 1999.
5. Technical Collaborations with internationally renowned organisations like Stafford Miller Ltd. UK, Sigma Tau, Italy and Fujisawa Company Ltd., Japan for manufacture and marketing of their research molecules under licence in India.
6. Formulations plant recognised as per World Health Organisation- Good Manufacturing Practices (WHO- GMP).
7. Bulk Drug facility provides backward integration for manufacture of semi synthetic penicillin formulations.
8. Company’s Research & Development set-up recognised by the Department of Scientific & Industrial Research, Govt. of India.
9. Diversification into sales and distribution of Heart Pacemakers and Medical Electronics etc.
10. Sole distributors for the ‘Tiger’ range of products under license of Haw Par Brothers (International) Ltd., Singapore.
11. Professional, qualified and experienced workforce.

Registered Office: 11-B, Dhanraj Mahal, Apollo Bunder, Mumbai- 400 001

Tel.: (022) 283 5802/ 283 5803/ 2851937 Fax: (022) 287 1868

website: www.elder-group.com

Elder Pharmaceuticals Limited (hereinafter referred to as 'Elder' or the 'Issuer' or the 'Company' is offering for public subscription 48,86,000 Equity Shares of Rs. 10 each for cash at a premium of Rs. 80 - 100 per share aggregating Rs. 43.97 crores - Rs. 53.74 crores.

The present Issue of Equity Shares is being made pursuant to the resolution passed at the Extraordinary General Meeting of Elder Pharmaceuticals Ltd. held on December 23, 1999 and Board Resolution passed on December 27, 1999.

As required, a copy of the Prospectus has been submitted to Securities & Exchange Board of India, (hereinafter referred to as SEBI) at their office in Mumbai. It is to be distinctly understood that the submission of the Prospectus to SEBI should not, in any way be deemed or construed that the same has been cleared or approved by SEBI. SEBI does not take any responsibility, either for the financial soundness of any scheme or the project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in the Prospectus. The Lead Manager, SBI Capital Markets Limited has certified that the disclosures made in the Prospectus are generally adequate and are in conformity with the SEBI Guidelines for Disclosure and Investor Protection, which are in force for the time being. This requirement is to facilitate the investors to take an informed decision for making an investment in the proposed Issue.

It should also be clearly understood that while the Issuer Company is primarily responsible for the correctness, adequacy and disclosure of all relevant information in the Prospectus, the Lead Manager concerned is expected to exercise due diligence to ensure that the Issuer discharges its responsibility adequately in this behalf and towards this purpose, the Lead Manager, SBI Capital Markets Limited has furnished to SEBI a Due Diligence Certificate dated January 4, 2000 in accordance with SEBI (Merchant Bankers) Regulations, 1992, which reads as follows:

1. We have examined various documents including those relating to litigation like commercial disputes, patent disputes, disputes with collaborators, etc., and other materials in connection with the finalisation of the Prospectus pertaining to the said Issue.
2. On the basis of such examination and the discussions with Elder Pharmaceuticals Ltd., its directors and other officers, other agencies, independent verification of the statements concerning objects of the Issue, projected profitability, price justification and the contents of the documents mentioned in the Annexure and other papers furnished by the Issuer.

WE CONFIRM that:

1. the Prospectus forwarded to SEBI is in conformity with the documents, materials and papers relevant to the Issue.
2. all the legal requirements connected with the said Issue as also the guidelines, instructions, etc. issued by SEBI, the Government and any other competent authority in this behalf have been duly complied with; and
3. the disclosures made in the Prospectus are true, fair and adequate to enable the investors to make a well informed decision as to the investment in the proposed Issue.

1. We confirm that besides ourselves, all the intermediaries named in the Prospectus are registered with SEBI and that till date such registration is valid.
2. We shall satisfy ourselves about the worth of the underwriters to fulfil their underwriting commitments.

The filing of the Prospectus does not, however, absolve the company from any liabilities under Section 63 of the Companies Act, 1956 or from the requirement of obtaining such statutory or other clearances as may be required for the purpose of the proposed issue. SEBI, further reserves the right to take up, at any point of time, with the Lead Manager(s) any irregularities or lapses in the Prospectus.

The Company accepts no responsibility for statements made otherwise than in the Prospectus or in the advertisements or other material issued by or at the instance of the Company and the Lead Managers and any one placing reliance on any other source of information would be doing so at their own risk.

1. The Company accepts no responsibility for statements made otherwise than in the Prospectus or in the advertisements or other material issued by or at the instance of the Company and the Lead Managers and any one placing reliance on any other source of information would be doing so at his own risk.
2. In the opinion of the Directors of the Company, there are no circumstances that have arisen since the date of the last financial statement disclosed in the Prospectus, that materially or adversely affect or are likely to affect performance or profitability of the Company, or value of its assets, or its ability to pay its liabilities within the next twelve months.
3. The Company declares that the Stock Exchanges to which application for official quotation has been made does not take any responsibility for the financial soundness of the Issue or for the price at which the instruments are issued or for the correctness of the statements made or opinion expressed in the Prospectus.

This Offer is made in India to persons resident in India. This Prospectus does not constitute an offer to sell or an invitation to subscribe to shares offered hereby in any other jurisdiction to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession this Prospectus comes is required to inform himself about and to observe any such restrictions. Disputes arising out of this offer will be subject to the exclusive jurisdiction of the courts at Mumbai.

A copy of the Prospectus having attached thereto the documents required to be filed under Section 60 of the Companies Act, 1956 has been delivered for registration to the Registrar of Companies, Mumbai.

Applications have been made to the, The Stock Exchange, Mumbai and the National Stock Exchange of India Limited, Mumbai for permission to deal in and for official quotation of the equity shares of the Company.

"As required, a copy of this Prospectus has been submitted to National Stock Exchange of India Limited (hereinafter referred to as NSE). NSE has given vide its letter dated ________, permission to the Issuer to use the Exchange's name in this Prospectus as one of the stock exchanges on which this Issuer's securities are proposed to be listed. The Exchange has scrutinised this Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed that the Prospectus has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Prospectus, nor does it warrant that this Issuer's securities will be listed or will continue to be listed on the Exchange; nor does it take any responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of this Issuer.

Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claims against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever."

1. warrant, certify or endorse the correctness or completeness of any of the contents of this Prospectus;
2. warrant that this Company’s securities will be listed or will continue to be listed on BSE; or
3. take any responsibility for the financial or other soundness of this Company, promoters, management or any scheme or project of this Company;

And it should not be, for any reason be deemed or construed that this Prospectus has been cleared or approved by BSE. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against BSE, whatsoever, by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated in the Prospectus or any other reason whatsoever.

As a matter of abundant caution, the attention of the investor is drawn to the provision of Section 68 (A) of the Companies Act, 1956, reproduced below:

shall be punishable with imprisonment for a term which may extend to five years", as under applicable provisions of the law.

If the Company does not receive the minimum subscription of 90% of the issue amount, on the date of closure of the Issue, or if the subscription level falls below 90% after the closure of the Issue on account of cheques having been returned unpaid or withdrawal of application, the Company shall forthwith refund the entire subscription amount received. For delay beyond 78 days, if any, in refund of such subscription, the Company shall pay interest as per Section 73 of the Companies Act, 1956.

Letters of Allotment/ Share Certificates or Refund Orders, as the case may be, will be despatched by Registered Post or as per extant postal rules at the sole risk of the applicant to the sole/ first applicant within ten weeks from the date of closing of the subscription list. In accordance with the extant postal rules the Company will ensure dispatch of refund orders of value up to Rs. 1500/- under Certificate of Posting and refund orders of value above Rs. 1500/- by Registered Post only. Further,

1. as far as possible allotment of the equity shares shall be made within 30 days of the closure of the Issue; and
2. the Company shall pay interest at the rate of 15% per annum (except to the applicants applying through Stockinvest) if the allotment has not been made and/or the Letters of Allotment/ Refund Orders have not been despatched to the investors within 30 days from the date of the closure of the Issue, for the delayed period beyond 30 days.

The Company will provide adequate funds to the Registrars to the Issue, for the purpose of despatch of Letter(s) of Allotment/ Share Certificate(s)/ Letter(s) of Regret/ Cancelled Stockinvest(s)/ Refund Order(s).

In the event of the present Issue of equity shares being oversubscribed, the basis of allotment will be finalised in consultation with The Stock Exchange, Mumbai (Regional Stock Exchange). In case of oversubscription beyond five times, a SEBI nominated public representative will be associated in the process of finalisation of the basis of allotment.

THE SUBSCRIPTION LIST WILL OPEN AT THE COMMENCEMENT OF BANKING HOURS AND WILL CLOSE AT THE CLOSE OF BANKING HOURS ON THE DATES MENTIONED BELOW:

The Issue has been fully underwritten to the extent of the net public offer. The details are given hereunder:

In the opinion of the Board of Directors of the company, the Lead Manager to the issue and, on the basis of declaration by the underwriters, the resources of the above underwriters are sufficient to discharge their respective underwriting obligations in full. All the above underwriters have entered into Underwriting Agreements with the Company.

The Board of Directors of the Company certifies that:

1. all monies received out of issue of shares to public shall be transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Companies Act, 1956;
2. details of all monies utilised out of this Issue referred to in sub-item (i) shall be disclosed under an appropriate separate head in the Annual Report of the Company indicating the purpose for which such monies had been utilised; and
3. details of all unutilised monies out of this Issue, if any, referred to in sub-item (i) shall be disclosed under an appropriate separate head in the Annual Report of the Company indicating the form in which such unutilised monies have been invested.

The Company undertakes:

1. that all the complaints received in respect of the Issue would be attended to expeditiously and satisfactorily
2. that necessary step would be taken for the purpose of getting the securities listed within the prescribed time period
3. that the funds required for despatch of refund orders/ allotment letters/ certificates by Registered Post shall be made available to the Registrars to the Issue by the Issuer and
4. that no issue of securities shall be made till the securities offered through this Prospectus are listed or application moneys refunded on account of non- listing/ undersubscription.

1. Capital Build-up: Details of the contribution to the equity share capital of the company are as under:

All shares issued since the date of incorporation of the Company have been issued for cash and are fully paid up.

• As on date of filing the Prospectus with the RoC (i.e. December 29, 1999)

• 10 days prior to RoC filing (i.e. December 29, 1999)

• Top ten shareholders 2 years prior to RoC filing (i.e. December 29, 1997)

The equity shares now being issued are subject to the provisions of the Companies Act, 1956, Securities Contract Regulation Act, 1957, Memorandum and Articles of Association of the Company, terms of this Prospectus, the application form, the guidelines for listing of securities issued by the Stock Exchanges and Government of India and/ or other statutory bodies and the guidelines for Disclosure and Investor Protection issued by the Securities and Exchange Board of India ("SEBI Guidelines") and the Depositories Act, 1996, to the extent applicable.

Pursuant to Section 81(1A) of the Companies Act 1956, the present issue of 48,86,000 equity shares has been authorised vide a special resolution passed at the Extraordinary General Meeting of Elder Pharmaceuticals Ltd. held on December 23, 1999 and Board Resolution dated December 27, 1999.

1. Right to receive dividend, if declared
2. Right to attend general meetings and exercise voting powers, unless prohibited by law
3. Right to vote personally or by proxy

The Equity Shares, now being offered, shall rank pari passu with the existing shares of the Company in all respects save and except that the holders of the Equity Shares now offered will be entitled to dividend, if any, which may be declared or paid on Equity Shares from the respective date of allotment and in proportion to the amount paid up thereon for the period during which such capital is paid up. The holders of Equity Shares, now being offered, will not be entitled to dividend, if any, which may be declared or paid prior to the date of allotment.

The Company agrees that, as far as possible, it will allot the equity shares within 30 days from the date of closure of the Issue.

The Company agrees that it shall pay interest @ 15% p.a., except to applicants applying through Stockinvests, if the allotment is not made and/ or the refund orders are not dispatched to the investors within 30 days from the date of closure of the Issue for the period of delay beyond 30 days.

Applications should be for a minimum of 100/ 50 equity shares and in multiples of 100/ 50 thereafter. The offer price of Rs. 90 to Rs. 110 per share is payable as below:

It is a condition of this issue of equity shares that non-payment of the amount due on allotment will attract interest at 18% p.a. on the allotment money due commencing from the last date appointed for payment thereof till payment. Failure to pay the amount as aforesaid shall render the allotment of equity shares liable to cancellation and amount paid liable to forfeiture. The Company shall be at liberty to re-issue the equity shares so forfeited to any person or persons, as it may in its absolute discretion deem fit.

The Memorandum Form 2 A containing the salient features of the Prospectus together with Application Forms and copies of the Prospectus may be obtained from the Registered Office of the Company, all offices of the Company, Lead Managers to the Issue, Co-Managers to the Issue, Advisor to the Issue, Registrar to the Issue and at the collection centres of the Bankers to the Issue, as mentioned on the reverse of the Application Form.

1. Minors
2. Foreign Nationals
3. Partnership firms or their nominees
4. Trusts (except as stated above)
5. HUFs (except as stated above)
6. Non- Resident Indians (NRIs)/ Overseas Corporate Bodies (OCBs) on a repartiable basis

The name of the applicant’s Bank, type of account and account number must be filled in the Application Form. This is required for applicants’ own safety and these details will be printed on the refund orders, if any. Applications without these details would be treated as incomplete and are liable to be rejected.

In case of applications under Powers of Attorney or by Companies, Bodies Corporate, Societies registered under the applicable laws, trustees of trusts, Provident Funds, Superannuation Funds, Gratuity Funds and Scientific and/ or Industrial Research Organisations, a certified copy of the Power of Attorney or the relevant authority, as the case may be, must be lodged separately at the office of the Registrars to the Issue simultaneously with the submission of the application form, indicating the serial number of the application form and the name of the Bank and the branch office where the application is submitted.

Where an application is for a total value of Rs. 50,000 or more, i.e. 550- 450 shares or more, the applicant or in case of applications in joint names, each of the applicants should mention his/ her/ their Permanent Account number (PAN) allotted under Income Tax Act, 1961 or where the same has not been allotted, the GIR Number and the IT Circle/ Ward/ District should be mentioned. In case where neither the PAN nor the GIR Number has been allotted, or the applicant is not assessed to Income Tax, the appropriate box provided for the purpose in the application form must be ticked. Applications without this will be considered incomplete and are liable to be rejected.

Application can be in single or joint names (not more than three). In the case of joint application, all payments will be made out in favour of the first applicant. All communications will be addressed to the first named applicant whose name appears in the Application form at the address mentioned therein.

An applicant should submit only one application form (and not more than one) for the total number of equity shares applied for. Two or more applications in single or joint names will be deemed to be multiple applications if the sole and/ or first applicant is one and the same.

In case of application by Mutual Funds, a separate application must be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and that such applications will not be treated as multiple applications provided that the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application has been made.

Applications may be made by the employees in the Net Offer to Public Category also and the same shall not be treated as multiple applications.

Separate applications for electronic and physical equity shares by the same applicant shall be considered as multiple applications. The Company reserves the right to accept or reject, in its absolute discretion, any or all multiple applications.

A separate single cheque/draft/ Stockinvest must accompany each application form.

Applicants are requested to write their names and application serial number on the reverse of the instruments by which the payments are being made to avoid misuse of instruments submitted along with the applications for equity shares.

The Company has made an application to the Reserve Bank of India on January 3, 2000 for approval to FIIs to invest in the issue on a repatriable basis upto a maximum of 24% of the issue size. Applications by FIIs must be made only in the prescribed application form (blue colour) by FIIs, on a repatriable basis.

Applications by NRIs/OCBs on non-repatriation basis can be made using the Form meant for Public out of the funds held in Non Resident (Ordinary) Account (NRO). The relevant bank certificate must accompany such forms. Such applications will be treated on par with the applications made by the public.

For further instructions, please read the Application Form carefully.

1. Payment may be made by way of cash or cheque/ demand draft/ Stockinvest (money)/ postal orders will not be accepted) drawn on any Bank, including a co-operative Bank which is situated at and is a member or sub-member of the Banker’s clearing-house located at the place where the application form is submitted, i.e. at designated collection centres.
2. Outstation cheques/demand drafts drawn on Banks not participating in the clearing process will not be accepted.
3. All cheques/ demand drafts accompanying the Application Form should be marked as follows: Cheque/ bank draft must be made payable to the bankers to the issue and marked "A/c EPL– Public Issue" and crossed "A/C payee only". For e.g. "State Bank of India – A/c EPL – Public Issue"
4. All Stockinvests should be made payable to the Company i.e. "EPL" and crossed "A/C PAYEE ONLY".
5. The applications shall be made only by way of cash/ cheque/ demand draft/ Stockinvest. However, if the amount payable on application is Rs. 20,000 or more, such payment must be effected only by way of an account payee cheque/ Stockinvest or Bank draft in terms of section 269SS of the Income-Tax Act, 1961. Otherwise the applications may be rejected and application money refunded without any interest.

Applicants, being Individuals and Mutual Funds only, have the option of using the "Stockinvest" instrument for payment of application money in lieu of cash/ cheque/ demand draft. Applicants using Stockinvests should submit them along with the application form to any of the collecting centres/ Bankers to the Issue mentioned in the application form. Stockinvests should be payable at par at all the branches of the issuing Bank and as such outstation Stockinvests can be attached to the application forms. Applicants can approach the Banks concerned for obtaining Stockinvest and detailed instructions for the same.

The applicant has to fill in the following particulars:

1. Title of the Account as mentioned in the Application Form.
2. Number of equity shares applied for.
3. The amount payable on the equity shares applied for:

The instrument should thereafter be signed by the applicant. It should also bear the stamp of the Bank issuing the instrument and should be crossed "A/C Payee Only" and made payable only to "Elder Pharmaceuticals Ltd". Service charges, if any, for issuing the Stockinvest must be borne by the applicant. The applicant should not fill in the portion to be filled up by the Registrars to the Issue (right-hand portion of the instrument). The Registrars to the Issue will fill up the right-hand side of the Stockinvest indicating the equity shares allotted to the applicants, calculated as follows:

1. In case of full allotment, the number of equity shares on the right-hand side will be the same as that on the left-hand side of the instrument;
2. In case of partial allotment, the number filled up by the Registrars to the Issue on the right-hand side of the instrument will be less than the number filled up by the applicant on the left-hand side;
3. In case the allotment is nil, the number filled up by the Registrars to the Issue on the right-hand side of the instrument will be nil.

The Stockinvest should be used by the Purchaser and the name of the Purchaser/one of the Purchasers should be indicated as the first applicant in the Application Form. Thus, if the signature of the purchaser on the Stockinvest and the signature of the first applicant in the application form do not tally, the application would be treated as having been accompanied by a third party Stockinvest and is liable to be rejected.

The Stockinvest instrument should be used by the Purchaser within 10 days from the date of the issue of the instrument, failing which such applications are liable to be rejected. For the purpose of calculating the 10 days, the last date for use of the Stockinvest for submitting the Application Form to the Bankers to the Issue is indicated on the face of the Stockinvest with a notation "to be used before -------------------------".

No refund order will be issued to the applicants using Stockinvest for payment of application money. In case of non-allotment of equity shares, the cancelled Stockinvest instruments will be returned to the applicant, within 10 weeks of closure of subscription list by Registered Post/Speed Post. The applicant will have to approach the issuing Bank branch for lifting the lien.

Registrars to the Issue have been authorised by the Company (through Resolution of the Board of Directors passed at its meeting held on December 27, 1999), to sign the Stockinvests on behalf of the Company, to realise the proceeds of the Stockinvest from the issuing Bank, or to affix non-allotment advice on the instrument, or to cancel the Stockinvest(s) of the non-allottee. Such cancelled Stockinvest(s)shall be sent back by the Registrars directly to the investors. The currency of the Stockinvest is four months.

Reserve Bank of India, vide its circular DBOD No. FSC.BC.100/24.47.001/94 dated September 2, 1994, has restricted the use of Stockinvest(s) to individual investors and Mutual Funds only. Brokers, Corporate Bodies, Banks and Financial Institutions are not allowed to invest through Stockinvest(s). A ceiling of Rs. 50,000/- per individual per Stockinvest by Banks has been imposed. The above ceiling is not applicable to Mutual Funds.

In the interest of the investors, to avoid rejection of applications on technical grounds, it is suggested that the applicant should ensure that

• The date of issue of the Stockinvest by the issuing bank is clearly mentioned on the instrument
• The instrument is duly signed by the authorised officer of the bank giving his code number
• The instrument bears the code number and the address of the issuing bank branch
• Any correction/ alteration in the date of issue, amount, the name of the issuer (i.e. Elder Pharmaceuticals Ltd.), etc. should be attested by an authorised officer of the issuing bank
• The applicant has clearly written the name of the issuer (i.e. Elder Pharmaceuticals Ltd.), the amount and signed the instrument
• Amount written in the application form to be deposited and the amount of the instrument accompanying the application form should be the same

Note: The above information is given for the benefit of investors and the Company is not liable for any modification in the terms of the Stockinvest or procedure thereof by the issuing bank.

All applications duly completed and accompanied by cash/ cheques/ demand drafts/ Stockinvests shall be submitted at the branches of the Bankers to the Issue (listed in the Application Form) before the closure of the Issue. Applications should NOT be sent to the Office of the Company or to the Lead Managers to the Issue.

Application Forms along with Bank Drafts payable at Mumbai can also be sent by registered post with acknowledgement due to the Registrars to the issue, MCS Ltd., at "Sri Venkatesh Bhavan", 27, MIDC, Andheri (E), Mumbai - 400 093, so that the same can be received before the closure of the subscription list.

No separate receipts will be issued for the application money. However, the Bankers to the Issue or their approved collecting branches receiving the duly completed application form will acknowledge receipt of the application by stamping and returning to the applicant the acknowledgement slip at the bottom of each application form.

Applications shall be deemed to have been received by the Company only when submitted to the Bankers to the Issue at their designated branches or on receipt by the Registrars as detailed above and not otherwise.

The Company reserves the right to accept or reject, any application, in whole or in part, without assigning any reason thereof. If the application is rejected in full, the whole of the application money received will be refunded by Registered Post to the applicant. If the application is accepted in part, the excess application money after adjusting for the amount payable on allotment will be refunded to the applicant. Such refund, if any, will carry interest @ 15% p.a. after 30 days from the closure of the Issue for the period of delay beyond 30 days.

The equity shares of the Company have been admitted for dematerialisation by National Securities Depository Limited (NSDL) vide a tripartite agreement dated ______, signed between the Company, NSDL and ______, the Registrar and Share Transfer Agent to the Issue, to enable all shareholders of the Company to have their shareholding in electronic form.

The Company has also entered into a tripartite agreement with Central Depository Services (India) Ltd. (CDSL) and MCS Ltd. for dematerialisation of its shares, vide a tripartite agreement dated December 29, 1999.

• Applicant has the option of seeking allotment of Shares in electronic or in physical mode.
• Separate applications for electronic and physical shares by the same applicant shall be considered as multiple applications.
• The applicant seeking allotment of shares in the electronic form must necessarily fill in the details (including the beneficiary account no. and Depository Participant’s ID no.) appearing under the heading ‘request for shares in electronic form’
• An applicant who wishes to apply for shares in the electronic form must have at least one beneficiary account with any of the Depository Participants (DPs) of NSDL or of CDSL, registered with SEBI, prior to making the application
• Shares allotted to an applicant in the electronic account will be credited directly to the respective beneficiary accounts (with the DP)
• For subscription in electronic form, names in the share application form should be identical to those appearing in the account details in the depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the depository
• Non-transferable allotment letters/ refund orders will be directly sent to the applicant by the Registrar to this Issue.
• Incomplete/ incorrect details given under the heading ‘Request for shares in electronic form’ in the application form will be assumed as an application for shareholding in physical form.
• The applicant is responsible for the correctness of the applicant’s demographic details given in the application form vis-à-vis those with his/ her DP.
• It may be noted that the electronic shares can be traded only on the Stock Exchanges having electronic connectivity with NSDL and CDSL.
• One time cost will be borne by the investors.

M/s S.S. Khandelwal & Co., Chartered Accountants, have advised Elder Pharmaceuticals Limited vide their letter dated December 3, 1999 that according to the current provisions of the Income Tax Act, 1961 and various other tax laws currently in force, the following tax benefits and deductions will, inter alia, be available to Elder Pharmaceuticals Ltd., and its members.

1. The Company will be entitled to a deduction of one-fifth of the expenses for the issue of shares over a period of five successive years subject to the limits and conditions laid down in Section 35D of the Income Tax Act, 1961.
2. Dividend Income received from the other domestic company will be exempt from Income Tax in the hands of the Company as per the provisions of Section 10(33) of the Income Tax Act, 1961.
1. In accordance with the subject to the conditions specified in Section 80 HHC of the Income Tax Act, 1961, the Company will be entitled to deduction on the profits derived from the exports of goods subject to the provisions of the said Section.

1. Dividend received from the Company will be exempt from Income Tax in the hands of the shareholder as per the provisions of Section 10(33) of the Income Tax Act, 1961.
1. Under Section 112 (1) of the Income Tax Act, Capital Gain arising on transfer of shares held for a period of at least Twelve months (hereinafter referred to as Long Term Capital Gains) shall be computed in the manner provided in the Act, i.e. after indexation of cost of acquisition under proviso to Section 48 at flat rate of Income Tax @ 20% of Capital Gains plus 10% surcharge. However, if such gain exceeds 10% of the Capital Gains plus surcharge, computed without indexation of cost of acquisition, then the lower of the two may be considered for calculating the tax liability.
2. As per the provisions of Wealth Tax Act, 1957 the shares held will not be included in the assets of the assessee.

1. Under Section 115AC(1)(b) (ii) income by way of Long Term Capital Gain arising from the transfer of shares will be taxable, subject to terms and conditions mentioned therein @ 10%
2. Under Section 115E of the Income Tax Act, 1961 the amount of Income Tax calculated on the income by way of Long Term Capital Gain referred to in clause (b), included in the Total Income, at the rate of 10% and in respect of Investment income as referred in clause (a) shall be taxed at the rate of 20% subject to other provisions of the Act
3. Under Section 115I, a Non- Resident Indian, if he elects not to be governed by the above mentioned special provision of the chapter XII-A, then this total Income shall be charged in accordance with other provisions of the Income Tax Act, 1961.

• Land: These plants are proposed to be set up at Patalganga. Plot no. A-36 in the MIDC, located in the Raigad District of Maharashtra, measuring 4000 sq. meters has been selected for the purpose and is owned by EPL.
• Building: Building measuring 34500 sq. feet with platforms will be constructed on the site. The Company is in the process of selecting the civil contractors for the construction for which tenders will be invited.
• Plant & Machinery: The Company proposes to install indigenous machinery which is easily available.
• Water & Power: the Company shall make applications for the required utilities at the appropriate time.
• Pollution Control Clearance: the Company proposes to make an application to MPCB for the environment clearance at the appropriate time.

Means of finance

The Company proposes to finance the entire fund requirements of Rs. 4397 lacs/ Rs. 5374 lacs out of the proceeds of the proposed Public Issue.

Besides the above, the Company has availed of term loans from Industrial Development Bank of India (IDBI) and Karnataka Bank Ltd. for margin money towards working capital. The Company has also availed a term loan from the Saraswat Co-operative Bank Ltd. for purchase of new office premises at Andheri and for furnitures and fixtures of the said office.

The key terms of sanction of the term loans are as follows:

Promoted by Mr. Jagdish Saxena, the Company was incorporated as a Private Limited Company on April 2, 1983 in the State of Maharashtra, in the name and style of ‘Elder Pharmaceuticals Private Ltd.’ The Company started its activities in 1987 by initiating acquisition of land and commercial activities were started in 1988 with production on loan basis. Elder started its own production at its factory in Navi Mumbai in June 1989. In the year 1990 based on the turnover criteria the Company became a deemed public Company. Because of applicability of provisions of Section 43A(1A) of the Companies Act, 1956, the word ‘Private’ was deleted from its name and in the 14^th AGM held on December 15, 1997, it was decided to change the status of the Company from ‘deemed limited’ to ‘limited’. It was converted into a Public Limited Company w.e.f. August 11, 1998, through a Certificate of change of name issued by the office of the Registrar of Companies, Maharashtra Mumbai.

1. To carry on all or any of the business, in India or elsewhere of manufacturers, processors, packers, importers, exporters, distributors, buyers, sellers and wholesale and retail dealers in drugs, pharmaceuticals, medicines, cosmetics, restoratives, foods milk products, disinfectants, laboratory chemicals and their allied products or their raw materials and excipients whether Allopathic, Ayurvedic, Homeopathic, Unani or other kind whatsoever and as general chemists and druggists and with a view thereto enter into and carry into effect agreement and execute all necessary deeds instruments and assurances for completion such acquiring and taking over.
2. To carry on business of manufacturers, importers, exporters, distributors and buyers and sellers and wholesale and retails dealers in laboratory equipments of all types and descriptions and establish run maintain laboratories and carry on business as analyst and testers of chemicals, drugs, pharmaceuticals, medicines, cosmetics, restoratives, foods, milk products, disinfectants and the raw materials.

The promoters of the Company are Mr. Jagdish Saxena and Akshaya Holdings Pvt. Ltd. As on December 21, 1999, Jagdish Saxena along with friends, relatives and associates, and Akshaya Holdings Pvt. Ltd. together hold 24,04,904 equity shares of the Company i.e. 39.33%of the equity capital.

Mr. Jagdish Saxena promoted Elder Pharmaceuticals Private Limited in 1983 along with a group of professionals with an aim of participative management adopting the motto of ‘Professional People in Pursuit of Public Health’.

The Board of Directors of the Company is as under:

Mr. Mavara Varkey Thomas, an Associate Member of the Institute of Chartered Accountants of India is the first Director of the Company. Aged 49 Years, he joined Walter Bushnell Pvt. Ltd. in 1978 and was promoted to Director – Finance & Accounts. From 1987 he is associated with Elder Pharmaceuticals Limited as a working Director. Mr. Thomas has over the years acquired vast knowledge and experience in the fields of Finance, Accounts, Costing, Budgeting & Budgetary Controls, Taxation etc.

Mr. Ajit Kumar Hamlai, aged 52 years, an NRI, having Omani Nationality, have been carrying out diverse activities under the umbrella "Ajay Group of Companies" having trading/ manufacturing interests like air - freshners, perfumes, jewellery items, aerosol chemicals, processing of agricultural produce etc. Mr. Hamlai’s father established a trading house in the name if M/s Haridas Lalji Trading LLC in the Sultanate of Oman, which is now a part of the Ajay Group of Companies.

Dr. R. Srinivasan started his career in 1949 in National Bank of India (now known as ANZ Grindlays Bank) and then moved to Andhra Bank. Thereafter he joined a private sector bank and rose to become its Chairman & Managing Director. Dr. Srinivasan joined Allahabad Bank as its CMD and then became the CMD of Bank of India. He was responsible for the entry of Bank of India into various businesses like Mutual Funds, Credit Cards etc.

Aged 59 years, Mr. V. J.Carrasco is a graduate in the Science faculty from Mumbai. Starting his career as a Medical Representative in the then Merck Sharp Dhome Ltd. he has about 36 years experience in the pharmaceutical industry. He has worked with Tata Fison Ltd., Richardson Hindustan Ltd., Searle (I) Ltd., Roche Products Ltd., in various capacities including all India Sales Manager, Director (Business Development) etc. From 1995 onwards he is associated with Elder Pharmaceuticals Ltd. and has been its Whole Time Director in charge of sales.

Aged 62, Mr. Juneja is an MBA from University of Oregaon, USA and a Ph.D. in Applied Economics from University of Mumbai. He is also a national and international consultant and a renowned author. Dr. Juneja has been conferred with the coveted International Legion of Honour award for 1993-95 by WASME at the international conference held at Cairo in 1995. He has also been the recipient of 1992 IMM Top Professional Manager of the Year Gold Award, Shiromani Award (1987), Udyog Ratan Award (1986) amongst numerous other awards.

Save and except as mentioned under the head "outstanding litigations, default, adverse events and material developments", there are no pending criminal/ civil litigations against any of the above mentioned directors.

The Company is led by professionally qualified people with rich experience. The key functionaries of the Company are as under:

The Lead Managers to the Issue, SBI Capital Markets Ltd. have also verified the appointment of the above key functionaries of the Company.

Change in Key Management Personnel during the last one-year (from July 1, 1998 onwards) are as follows:

The Company does not have any subsidiary company within the meaning of Section 4 of the Act.

Elder Health Care Limited (EHCL) was incorporated as a Private Limited Company on March 21, 1988 and was converted into Public Limited Company with effect from July 29, 1992 as per the Certificate of change of name obtained from the Registrar of Companies, Maharashtra, Mumbai.

EHCL is listed on the Stock Exchange, Mumbai and has a paid-up share capital of Rs. 400.00 lacs. This dividend paying Company of the group is engaged in the pharmaceutical business. They have their formulation plant in the Patalganga Industrial Area of MIDC, in the Raigad district of Maharashtra with manufacturing facilities for creams, ointments, balms and external liquids.

EHCL is the licensee of the ‘Tiger’ range of products, which presently comprise Tiger Balm, Tiger Oil and Tiger Muscle Rub since 1995.