Komal dulam

R A N B A X Y L A B O R A T O R I E S L I M I T E D P a g e | 1

AProject Report

OnFinancial Analysis

Of

Submitted toGlobal Institute of Management

Gujarat Technological UniversityOn

10/12/2012

In Partial fulfillment of the requirements for theAccounting for Managers course in the

Master of Business Administration Programme

Submitted By:

komal Dulam (16)Ronak Modi (17)Asha Desai (18)Devika Singh (19)Ketul Patel (20)

GLOBAL INSTITUTE OF MANAGEMENT


Preface

The subject matter of financial management has been changing at a rapid phase about three decades ago; the scope of financial management was circumscribed to the raising of funds, whenever needed and little significance use to attach to the financial decision making of problem solving the mid fifties, the emphasis shifted to wise utilization of funds.

The ‘modern’ thinking in the financial management gives greater importance of management and decision makes policy. Today the financial mgt is not in a passive role of a scorekeeper of the accounting information and arranging funds.

We as a student of management cannot keep ourselves isolated from this field of financial management. We need to know the practical application of or other theoretical knowledge so we have prepared a financial report on “Ranbaxy Laboratories Ltd.” and have tried to analysis each and every report of annual report of five successive years and put it in logical format as per my analysis.



Acknowledgement

We are very much thankful to Ranbaxy laboratories Ltd. for these all type of information is taken from the last five year financial statement.

We are also thankful to our Director Mr. Kishor Bhunsali who encourages us for studying the finance.

We are mostly thankful to our Prof. Dhaval Patel for helping us in our practical studies in our sem-1 (MBA) program and also very much thankful to her valuable suggestion, guidance in preparing this report.

Also thankful to our parents for providing oriented and for all encouragement.



Executive summary

Operating expenses may be defined as those that pertain to the production process, or, more generally, the process of carrying out the business. Such processes include all those pertaining to purchases, human resources, production and marketing and selling. Conventionally, expenses incurred on rising or using finances are not considered as operational expenses. There are a few more - amortization, write-offs, prior-period expenses, etc. Often, the distinction between operating and non-operating expenses is clear. But at times there is some ambiguity regarding the nature of the expense.

As a result, the basic framework of data capture at CMIE avoids the classification of expense heads as operational and non-operational. However, disclosure practices of companies often compel us to use the term "operational expenses". Expenses that can be posted without the use of such a term are posted appropriately into CMIE's detailed classification of expense items and, the remaining "operational expenses” are clubbed into one of the two data-fields: "Other operational expenses of industrial enterprises" or "Other operational expenses of non-financial services enterprises".

This data-field includes all operating expenses of an industrial enterprise that are not already covered in any of the other data field. These are likely to be industry-specific operational expenses. Examples of such expenses can be preservation expenses, laboratory expenses, testing expenses etc.



Index

Sr.No. Content Page no.

1Chapter :1

Introduction of Company5

2Chapter-2:

Comparative Balance sheet and Analysis of Balance Sheet 10

3Chapter-3:

Comparative Profit and Loss Account and Analysis of Profit & Loss Statement15

4Chapter-4:

Common Size Statements19

5Chapter 5:

Trend Analysis (Index Analysis)23

6Chapter 6:

Analysis of Cash flow Statement26

7Chapter 7:

Ratio Analysis27

9Chapter 9:

Contemporary Issues in Accounting of the company36



CHAPTER: 1 (Company profile)

1.1 Introduction of Company

Ranbaxy was started by Ranbir Singh and Gurbax Singh in 1937 as a distributor for a Japanese company Shionogi. The name Ranbaxy is a portmanteau word from the names of its first owners Ranbir and Gurbax. Bhai Mohan Singh bought the company in 1952 from his cousins Ranbir Singh and Gurbax Singh. After Bhai Mohan Singh's son Parvinder Singh joined the company in 1967, the company saw a significant transformation in its business and scale. His sons Malvinder Mohan Singh and Shivinder Mohan Singh sold the company to the Japanese company Daiichi Sankyo in June 2008.

Ranbaxy was established in 1961 and went public in the year 1973. It has global sales of US $1340 million for the year ended on 31st December, 2006. It has the largest market in USA (sales appx. US $380 million); then come Europe and BRICS (Brazil, Russia, India, China, South Africa).

1.2Company Details:

Type - Public

Founded - 1961

Headquarters- Gurgaon, Haryana, India

Employees - 1100 in R&D

Website - www.ranbaxy.com

For enquiries contact:

M. Giridhar Venugopal Director – Global Business Development & Acquisitions Ranbaxy Laboratories Limited Plot No. 90, Sector 32, Gurgaon – 122001 (Haryana), India E-mail: [email protected]

Registered Office A-41, Industrial Area Phase VIII-A, Sahibzada Ajit Singh Nagar, Mohali - 160 071 (Punjab), INDIA


http://www.ranbaxy.com/


1.3Products

Using the finest R&D and Manufacturing facilities, Ranbaxy Laboratories Limited manufactures and markets generic pharmaceuticals, value added generic pharmaceuticals, branded generics, active Pharmaceuticals (API) and intermediates.

The Company remains focused on ascending the value chain in the marketing of pharmaceutical substances and are determined to bring in increased revenues from dosage forms sales.

Ranbaxy's diverse product basket of over 5,000 SKUs available in over 125 countries worldwide encompasses a wide therapeutic mix covering a majority of the chronic and acute segments. Healthcare trends project that the chronic treatment segments will outpace the acute treatment segments, primarily driven by a growing aging population and dominance of lifestyle diseases. Their robust performance in Cardiovasculars, Central Nervous System, Respiratory, Dermatology, Orthopedics, Nutritionals and Urology segments, clearly indicates that the Company has strengthened its presence in the fast-growing chronic and lifestyle disease segments.

Top 10 Molecules (2012) • Valacyclovir• Simvastatin• Donepezil• Atorvastatin & Combinations• Co-amoxyclav & Combinations• Ciprofloxacin & Combinations• Ketorolac Tromethamine• Imipenem+Cilastatin• Ginseng+Vitamins• Loratadine & Combinations



1.4 Company History:

Ranbaxy Laboratories Ltd. is the largest pharmaceutical company in India, and one of the world's top 100 pharmaceutical companies. Long a specialist in the preparation of generic drugs, Ranbaxy is also one of the world's top 10 in that pharmaceutical category as well. Yet, with India's agreement to apply international patent law at the beginning of 2005, Ranbaxy has begun converting itself into a full-fledged research-based pharmaceutical company.

A major part of this effort has been the establishment of the company's own research and development center, which has enabled the company to begin to enter the new chemical entities (NCE) and novel drug delivery systems (NDDS) markets. In the mid-2000s, the company had a number of NCEs in progress, and had already launched its first NDDS product, a single daily dosage formulation of ciprofloxacin.

Ranbaxy is a truly global operation, producing its pharmaceutical preparations in manufacturing facilities in seven countries, supported by sales and marketing subsidiaries in 44 countries, reaching more than 100 countries throughout the world. The United States, which alone accounts for nearly half of all pharmaceutical sales in the world, is the company's largest international market, representing more than 40 percent of group sales. In Europe, the company's purchase of RPG (Aventis) S.A. makes it the largest generics producer in that market.

The company is also a leading generics producer in the United Kingdom and Germany and elsewhere in Europe. European sales added 16 percent to the company's sales in 2004. Ranbaxy's other major markets include Brazil, Russia, and China, as well as India, which together added 26 percent to the group's sales. Ranbaxy posted revenues of $1.18 billion in 2004. The company, which remains controlled and led by the founding Singh family, is listed on the National Stock Exchange of India in Mumbai.



1.5 Board of Directors

At the helm of the entire operations is the experience and able direction of the people who make it all happen. Ranbaxy acknowledges their inspiring stewardship and indefatigable work.

Dr. Tsutomu UneChairman

Non Executive & Non Independent Director

Mr. Arun SawhneyCEO & Managing Director

Mr. Takashi ShodaNon Executive &

Non Independent Director

Dr. Kazunori HirokawaNon Executive &

Non Independent Director

Dr. Anthony H. WildIndependent Director

Mr. Rajesh V. ShahIndependent Director

Mr. Akihiro WatanabeIndependent Director

Mr. Percy K. ShroffIndependent Director

+


http://www.ranbaxy.com/aboutus/Team_DispNew_.aspx?id=69&flag=









CHAPTER: 2 (Balance sheet 2008-2012)

Balance Sheet of Ranbaxy Laboratories of 2007-2011

------------------ in Rs. Cr. -------------------Particulars Dec '11 Dec '10 Dec '09 Dec '08 Dec '07

Sources Of FundsTotal Share

Capital211.00 210.52 210.21 210.19 186.54

Equity Share Capital

211.00 210.52 210.21 210.19 186.54

Share Application

Money0.67 6.60 175.85 175.66 1.18

Preference Share Capital

0.00 0.00 0.00 0.00 0.00

Reserves 1,713.16 4,915.28 3,748.54 3,330.92 2,350.68Revaluation

Reserves0.00 0.00 0.00 0.00 0.00

Net worth 1,924.83 5,132.40 4,134.60 3,716.77 2,538.40Secured

Loans229.59 195.39 175.83 162.07 365.07

Unsecured Loans

4,103.94 4,065.33 3,172.55 3,563.30 3,137.96

Total Debt 4,333.53 4,260.72 3,348.38 3,725.37 3,503.03Total

Liabilities6,258.36 9,393.12 7,482.98 7,442.14 6,041.43

Application Of Funds

Gross Block 3,094.07 2,857.63 2,620.92 2,386.75 2,261.48Less: Accum. Depreciation

1,222.07 1,145.52 1,027.52 930.07 791.96

Net Block 1,872.00 1,712.11 1,593.40 1,456.68 1,469.52Capital Work in Progress

222.62 330.18 414.92 428.77 327.42

Investments 3,410.79 3,804.44 3,833.69 3,618.03 3,237.55Inventories 1,655.23 1,489.91 1,230.48 1,198.52 976.07Sundry Debtors

3,689.95 1,292.63 1,534.65 1,024.54 882.91



Cash and Bank Balance

66.90 22.44 25.56 49.86 69.38

Total Current Assets

5,412.08 2,804.98 2,790.69 2,272.92 1,928.36

Loans and Advances

2,382.72 1,470.45 1,967.65 2,351.98 882.99

Fixed Deposits

1,871.14 2,689.85 728.56 1,885.08 111.07

Total CA, Loans & Advances

9,665.94 6,965.28 5,486.90 6,509.98 2,922.42

Deferred Credit

0.00 0.00 0.00 0.00 0.00

Current Liabilities

5,157.68 2,491.08 3,082.89 3,840.11 1,177.35

Provisions 3,755.31 927.82 763.03 731.20 738.14Total CL & Provisions

8,912.99 3,418.90 3,845.92 4,571.31 1,915.49

Net Current Assets

752.95 3,546.38 1,640.98 1,938.67 1,006.93

Miscellaneous Expenses

0.00 0.00 0.00 0.00 0.00

Total Assets 6,258.36 9,393.11 7,482.99 7,442.15 6,041.42



Comparative Balance sheet of Ranbaxy Laboratories of 2007-2011

------------------ in Rs. Cr. -------------------

ParticularsDec '11-10

Dec '10-09

Dec '09-08

Dec '08-07

%'11-10

%'10-09

%'09-08

%'08-07

Sources Of Funds

Total Share Capital

0.48 0.31 0.02 23.650.22800

70.14747

20.00951

512.6782

5Equity Share

Capital0.48 0.31 0.02 23.65

0.228007

0.147472

0.009515

12.67825

Share Application

Money-5.93 -169.25 0.19 174.48

-89.8485

-96.2468

0.108163

14786.44


- - - - - - - -

Reserves-

3202.12

1166.74

417.62 980.24-

65.146231.1251

812.5376

841.7002

7

Revaluation Reserves

- - - - - - - -

Net worth-

3207.57

997.8 417.831178.3

7-

62.496524.1329

311.2417

546.4217

6

Secured Loans 34.2 19.56 13.76 -20317.5034

511.1243

88.49015

9-

55.6058Unsecured

Loans38.6

1892.78 -390.75 425.34

0.949738

28.14077

-10.96613.5546

7

Total Debt72.8

1912.34 -376.99 222.34

1.708866

27.24721

-10.1195

6.347077

Total Liabilities

-3134.76

1910.14

40.841400.7

1-

33.372925.5264

60.54876

723.1850

7


Gross Block236.44

236.71 234.17 125.27 8.27 9.03 9.81 5.54

Less: Accum. Depreciation

76.55

118.00 97.45 138.11 6.68 11.48 10.48 17.44

Net Block159.89

118.71 136.72 -12.84 9.34 7.45 9.39 -0.87



Capital Work in Progress

-107.56

-84.74 -13.85 101.35 -32.58 -20.42 -3.23 30.95

Investments-

393.65

-29.25 215.66 380.48 -10.35 -0.76 5.96 11.75

Inventories165.32

259.43 31.96 222.45 11.10 21.08 2.67 22.79

Sundry Debtors

2,397.32

-242.02 510.11 141.63 185.46 -15.77 49.79 16.04


44.46

-3.12 -24.30 -19.52 198.13 -12.21 -48.74 -28.13


2,607.10

14.29 517.77 344.56 92.95 0.51 22.78 17.87

Loans and Advances

912.27

-497.20 -384.331,468.9

962.04 -25.27 -16.34 166.37

Fixed Deposits-

818.71

1,961.29

-1,156.5

2

1,774.01

-30.44 269.20 -61.351,597.2

0


2,700.66

1,478.38

-1,023.0

8

3,587.56

38.77 26.94 -15.72 122.76

Deferred Credit

- - - - - - - -

Current Liabilities

2,666.60

-591.81 -757.222,662.7

6107.05 -19.20 -19.72 226.17

Provisions2,827.49

164.79 31.83 -6.94 304.75 21.60 4.35 -0.94

Total CL & Provisions

5,494.09

-427.02 -725.392,655.8

2160.70 -11.10 -15.87 138.65

Net Current Assets

-2,793.43

1,905.40

-297.69 931.74 -78.77 116.11 -15.36 92.53


- - - - - - - -s

Total Assets-

3,134.75

1,910.12

40.841,400.7

3-33.37 25.53 0.55 23.19

InterpretationGLOBAL INSTITUTE OF MANAGEMENT


Total of the shareholder funds and liabilities increase continuously in 2009 to 2011 because of growth of the company.

Total liabilities have been increasing till 2011.

Current liabilities have also been increased in 2011.

The total assets also increase year which shows that companyPurchases investments and assets every year.

Its shows company’s good profitability and financial soundness.

The Net Block of a company was continuously increased for but in 2010 it was decreased.



CHAPTER: 3 (Profit and Loss account 2007-11)

Profit and Loss Account of Ranbaxy lab.

Particulars Dec '11 Dec '10 Dec '09 Dec '08 Dec '07IncomeSales Turnover 7,709.17 5,687.33 4,797.49 4,676.21 4,344.39Excise Duty 22.58 40.96 15.90 24.17 51.37Net Sales 7,686.59 5,646.37 4,781.59 4,652.04 4,293.02Other Income -3,990.57 562.45 485.66 -1,587.64 551.13Stock Adjustments

135.72 161.43 33.96 115.59 40.66

Total Income 3,831.74 6,370.25 5,301.21 3,179.99 4,884.81ExpenditureRaw Materials 2,523.08 2,181.22 1,916.58 2,049.30 1,861.17Power & Fuel Cost

194.98 132.75 109.57 108.83 90.35

Employee Cost 845.24 608.28 582.50 472.65 420.04Other Manufacturing Expenses

112.69 96.68 89.94 94.65 82.60

Selling and Admin Expenses

1,579.37 1,332.70 1,306.25 1,402.77 1,341.03


1,283.54 185.14 158.07 383.26 123.90

Preoperative Exp Capitalized

0.00 0.00 0.00 0.00 0.00

Total Expenses 6,538.90 4,536.77 4,162.91 4,511.46 3,919.09Operating Profit 1,283.41 1,271.03 652.64 256.17 414.59PBDIT -2,707.16 1,833.48 1,138.30 -1,331.47 965.72Interest 69.44 54.19 39.47 145.83 93.43PBDT -2,776.60 1,779.29 1,098.83 -1,477.30 872.29Depreciation 274.08 228.35 148.20 154.47 118.73Other Written Off

7.83 0.00 0.00 0.00 0.00

Profit Before Tax -3,058.51 1,550.94 950.63 -1,631.77 753.56Extra-ordinary items

15.44 21.88 111.42 17.76 35.46

PBT (Post Extra-ord Items)

-3,043.07 1,572.82 1,062.05 -1,614.01 789.02



Tax 6.69 415.48 488.86 -574.24 156.69Reported Net Profit

-3,052.05 1,148.73 571.98 -1,044.80 617.72

Total Value Addition

4,015.82 2,355.55 2,246.33 2,462.16 2,057.93

Preference Dividend

0.00 0.00 0.00 0.00 0.00

Equity Dividend 0.07 84.21 0.00 0.00 317.15Corporate Dividend Tax

-0.32 13.99 0.00 0.00 53.90

Shares in issue (lakhs)

4,220.00 4,210.41 4,204.17 4,203.70 3,730.71

Earnings Per Share (Rs)

-72.32 27.28 13.61 -24.85 16.56

Equity Dividend (%)

0.03 40.00 0.00 0.00 170.00



Comparative Profit and loss account of Ranbaxy ltd. 2007-2011

------------------ in Rs. Cr. -------------------

Particulars Dec '11-10

Dec '10-09

Dec '09-08

Dec '08-07

%'11-10

%'10-09

%'09-08

%'08-07

IncomeSales Turnover 2,021.84 889.84 121.28 331.82 35.55 18.55 2.59 7.64

Excise Duty -18.38 25.06 -8.27 -27.20 -44.87 157.61 -34.22 -52.95

Net Sales 2,040.22 864.78 129.55 359.02 36.13 18.09 2.78 8.36

Other Income -4,553.02

76.79 2,073.30 -2,138.77

-809.50 15.81 -130.59 -388.07

Stock Adjustments

-25.71 127.47 -81.63 74.93 -15.93 375.35 -70.62 184.28

Total Income -2,538.51

1,069.04 2,121.22 -1,704.82

-39.85 20.17 66.71 -34.90

ExpenditureRaw Materials 341.86 264.64 -132.72 188.13 15.67 13.81 -6.48 10.11

Power & Fuel Cost

62.23 23.18 0.74 18.48 46.88 21.16 0.68 20.45

Employee Cost

236.96 25.78 109.85 52.61 38.96 4.43 23.24 12.52

Other Manufacturing Expenses

16.01 6.74 -4.71 12.05 16.56 7.49 -4.98 14.59


246.67 26.45 -96.52 61.74 18.51 2.02 -6.88 4.60


1,098.40 27.07 -225.19 259.36 593.28 17.13 -58.76 209.33


0.00 0.00 0.00 0.00 - - - -

Total Expenses

2,002.13 373.86 -348.55 592.37 44.13 8.98 -7.73 15.11

Operating Profit

12.38 618.39 396.47 -158.42 0.97 94.75 154.77 -38.21

PBDIT -4,540.64

695.18 2,469.77 -2,297.19

-247.65 61.07 -185.49 -237.87

Interest 15.25 14.72 -106.36 52.40 28.14 37.29 -72.93 56.08

PBDT -4,555.89

680.46 2,576.13 -2,349.59

-256.05 61.93 -174.38 -269.36

Depreciation 45.73 80.15 -6.27 35.74 20.03 54.08 -4.06 30.10



Other Written Off

7.83 0.00 0.00 0.00 - - - -

Profit Before Tax

-4,609.45

600.31 2,582.40 -2,385.33

-297.20 63.15 -158.26 -316.54

Extra-ordinary items

-6.44 -89.54 93.66 -17.70 -29.43 -80.36 527.36 -49.92

PBT (Post Extra-ord Items)

-4,615.89

510.77 2,676.06 -2,403.03

-293.48 48.09 -165.80 -304.56

Tax -408.79 -73.38 1,063.10 -730.93 -98.39 -15.01 -185.13 -466.48

Reported Net Profit

-4,200.78

576.75 1,616.78 -1,662.52

-365.69 100.83 -154.75 -269.14


1,660.27 109.22 -215.83 404.23 70.48 4.86 -8.77 19.64

Preference Dividend

0.00 0.00 0.00 0.00 - - - -

Equity Dividend

-84.14 84.21 0.00 -317.15 -99.92 - - -100.00

Corporate Dividend Tax

-14.31 13.99 0.00 -53.90 -102.29 - -- -100.00


9.59 6.24 0.47 472.99 0.23 0.15 0.01 12.68


-99.60 13.67 38.46 -41.41 -365.10 100.44 -154.77 -250.06

Equity Dividend (%)

-39.97 40.00 0.00 -170.00 -99.93 - - -100.00

Interpretation

Total income is more than total expenditure in every year.

Net profit has been increased in 2011 around 620%.

In 2011 the earning per share shows in negative change. It represent losses, non beneficial to the company.



CHAPTER:4 Common size Statement of Ranbaxy ltd.

Balance Sheet of Ranbaxy Laboratories of 2007-2011

------------------ in Rs. Cr. -------------------Particulars Dec '11 Dec '10 Dec '09 Dec '08 Dec '07

Sources Of FundsTotal Share

Capital3.37149 2.241215 2.809175 2.824322 3.08768

Equity Share Capital

3.37149 2.241215 2.809175 2.824322 3.08768

Share Application

Money0.010706 0.070264 2.3499996 2.360343 0.019532


0 0 0 0 0

Reserves 27.37394 52.32851 50.094214 44.75756 38.90933Revaluation

Reserves0 0 0 0 0

Net worth 30.75614 54.63999 55.253388 49.94222 42.01654Secured

Loans3.668533 2.08014 2.3497323 2.177734 6.042775

Unsecured Loans

65.57533 43.27987 42.396879 47.88005 51.94068

Total Debt 69.24386 45.36001 44.746612 50.05778 57.98346Total

Liabilities100 100 100 100 100


Gross Block 49.43899 30.42262 35.025037 32.07071 37.43292Less: Accum. Depreciation

19.527 12.19532 13.73141 12.49733 13.10884

Net Block 29.91199 18.2273 21.293627 19.57338 24.32408Capital Work in Progress

3.557162 3.51513 5.5448424 5.761373 5.419587

Investments 54.49974 40.50245 51.232061 48.61539 53.58922Inventories 26.4483 15.86173 16.443694 16.10449 16.1563



Sundry Debtors

58.96033 13.76147 20.508513 13.76672 14.61428


1.06897 0.238899 0.3415747 0.669968 1.148406


86.47761 29.8621 37.293782 30.54117 31.91899

Loans and Advances

38.07259 15.65456 26.29497 31.6035 14.6156

Fixed Deposits

29.89825 28.63642 9.7362151 25.32978 1.838475


154.4484 74.15308 73.324968 87.47445 48.37306

Deferred Credit

0 0 0 0 0

Current Liabilities

82.41264 26.52029 41.198639 51.59947 19.48797

Provisions 60.0047 9.877666 10.19686 9.825118 12.21799Total CL & Provisions

142.4173 36.39796 51.395498 61.42459 31.70596

Net Current Assets

12.03111 37.75512 21.929469 26.04986 16.66711


0 0 0 0 0

Total Assets 100 100 100 100 100



Profit and loss account (common size statement)

Particulars Dec '11 Dec '10 Dec '09 Dec '08 Dec '07IncomeSales Turnover 100.00 100.00 100.00 100.00 100Excise Duty 0.29 0.72 0.33 0.52 1.182444Net Sales 99.71 99.28 99.67 99.48 98.81756Other Income -51.76 9.89 10.12 -33.95 12.68602Stock Adjustments

1.76 2.84 0.71 2.47 0.93592

Total Income 49.70 112.01 110.50 68.00 112.4395ExpenditureRaw Materials 32.73 38.35 39.95 43.82 42.84077Power & Fuel Cost

2.53 2.33 2.28 2.33 2.079694

Employee Cost 10.96 10.70 12.14 10.11 9.668561Other Manufacturing Expenses

1.46 1.70 1.87 2.02 1.901303


20.49 23.43 27.23 30.00 30.86809


16.65 3.26 3.29 8.20 2.851954


0.00 0.00 0.00 0.00 0

Total Expenses 84.82 79.77 86.77 96.48 90.21036Operating Profit 16.65 22.35 13.60 5.48 9.543112PBDIT -35.12 32.24 23.73 -28.47 22.22913Interest 0.90 0.95 0.82 3.12 2.15059PBDT -36.02 31.29 22.90 -31.59 20.07854Depreciation 3.56 4.02 3.09 3.30 2.73295Other Written Off

0.10 0.00 0.00 0.00 0

Profit Before Tax -39.67 27.27 19.82 -34.90 17.34559Extra-ordinary items

0.20 0.38 2.32 0.38 0.816225

PBT (Post Extra-rod Items)

-39.47 27.65 22.14 -34.52 18.16181

Tax 0.09 7.31 10.19 -12.28 3.60672GLOBAL INSTITUTE OF MANAGEMENT


Reported Net Profit

-39.59 20.20 11.92 -22.34 14.2188


52.09 41.42 46.82 52.65 47.36983

Preference Dividend

0.00 0.00 0.00 0.00 0

Equity Dividend 0.00 1.48 0.00 0.00 7.300219Corporate Dividend Tax

0.00 0.25 0.00 0.00 1.240681

Shares in issue (laths)

54.74 74.03 87.63 89.90 85.8742


-0.94 0.48 0.28 -0.53 0.381181

Equity Dividend (%)

0.00 0.70 0.00 0.00 3.913093

Analysis of Common Size Statement

The contribution of net sales in total income was nearly same in all the yearIt was near about 98 to 100%.

The contribution of total expenditure was continuous decrease year by year, but in 2011 itIncreased.

So that from the above common size statement we can easily find out thatCompany is at a growing stage.



CHAPTER 5 (Trend analysis)

Balance sheet of Ranbaxy ltd.

particulars 2007 2008 2009 2010 2011Sources Of Funds

Total Share Capital 100 112.6782 112.689 112.8552 113.1125Equity Share Capital 100 112.6782 112.689 112.8552 113.1125

Share Application Money 100 14886.44 14902.54 559.322 56.77966


Reserves 100 141.7003 159.4662 209.1003 72.87934Revaluation Reserves

Net worth 100 146.4218 162.8821 202.1904 75.82847Secured Loans 100 44.39423 48.16337 53.52124 62.88931

Unsecured Loans 100 113.5547 101.1023 129.5533 130.7837Total Debt 100 106.3471 95.58525 121.6296 123.708

Total Liabilities 100 123.1851 123.8611 155.4784 103.5907Application Of Funds Gross Block 100 105.5393 115.894 126.3611 136.8162Less: Accum. Depreciation 100 117.439 129.7439 144.6437 154.3096Net Block 100 99.12625 108.43 116.5081 127.3885Capital Work in Progress 100 130.9541 126.7241 100.843 67.99218Investments 100 111.7521 118.4133 117.5098 105.351Inventories 100 122.7904 126.0647 152.6438 169.5811Sundry Debtors 100 116.0413 173.8173 146.4056 417.9305Cash and Bank Balance 100 71.86509 36.84059 32.34361 96.42548Total Current Assets 100 117.868 144.7183 145.4594 280.6571Loans and Advances 100 266.3654 222.8394 166.5308 269.8468Fixed Deposits 100 1697.2 655.9467 2421.761 1684.649Total CA, Loans & Advances 100 222.7599 187.7519 238.3395 330.7512Differed Credit Current Liabilities 100 326.1655 261.8499 211.5836 438.0753Provisions 100 99.0598 103.372 125.697 508.7531Total CL & Provisions 100 238.6496 200.78 178.487 465.3112Net Current Assets 100 192.5327 162.9686 352.1973 74.7768Miscellaneous Expenses

Total Assets 100 123.1854 123.8614 155.4785 103.5909Contingent Liabilities 100 125.796 129.8756 137.3781 148.01Book Value (Rs) 100 123.8641 138.4502 179.0031 67.04896



Interpretation

Net worth was rapidly increasing from last 3 years but it has decreased in 2011.

Net block of the balance sheet has been increasing from 2008 to 2011 rapidly.

Total assests was decreased in 2011.

Profit and loss account (Trend analysis)

Income 2007 2008 2009 2010 2011Sales Turnover 100 107.6379 110.4295 130.912 177.4511

Excise Duty 100 47.05081 30.95192 79.73525 43.95562Net Sales 100 108.3629 111.3806 131.5244 179.0485

Other Income 100 -288.07 88.12077 102.054 -724.071Stock

Adjustments100 284.2843 83.52189 397.0241 333.7924

Total Income 100 65.09956 108.5244 130.4094 78.44195Expenditure

Raw Materials 100 110.1082 102.9772 117.1962 135.5642Power & Fuel

Cost100 120.4538 121.2728 146.9286 215.8052

Employee Cost 100 112.525 138.6773 144.8148 201.2285Other

Manufacturing Expenses

100 114.5884 108.8862 117.046 136.4286

Selling and Admin

Expenses100 104.6039 97.40647 99.37884 117.7729


100 309.3301 127.5787 149.427 1035.948


Total Expenses 100 115.115 106.2213 115.7608 166.8474

Operating Profit

100 61.78876 157.4182 306.5752 309.5613

PBDIT 100 -137.873 117.8706 189.8563 -280.326Interest 100 156.0848 42.24553 58.00064 74.32302

PBDT 100 -169.359 125.9707 203.9792 -318.312Depreciation 100 130.1019 124.821 192.3271 230.8431

Other Written Off

Profit Before Tax

100 -216.541 126.1519 205.8151 -405.875

Extra-ordinary 100 50.0846 314.2132 61.70333 43.54202



itemsPBT (Post Extra-ord

Items)100 -204.559 134.6037 199.3384 -385.677

Tax 100 -366.482 311.9918 265.1605 4.269577Reported Net

Profit100 -169.138 92.59535 185.9629 -494.083


100 119.6426 109.1548 114.4621 195.1388

Preference Dividend

Equity Dividend

100 0 0 26.5521 0.022072

Corporate Dividend Tax

100 0 0 25.95547 -0.59369

Per share data (annualized)


100 112.6783 112.6909 112.8581 113.1152


100 -150.06 82.18599 164.7343 -436.715

Equity Dividend (%)

100 0 0 23.52941 0.017647

Book Value (Rs)

100 123.8641 138.4502 179.0031 67.04896

Interpretation

Total income of the company is decreased in 2011 as compared to last four years.

Expenditure is increased in 2011, which is loss for a company.

Earnings per share were increasing till 2010, but it went to negative in 2011.



CHAPTER 6: (Cashflow Statement)

Cash Flow of Ranbaxy Laboratories in Rs. Cr.

Particulars. Dec '11 Dec '10 Dec '09 Dec '08 Dec '07

Net Profit Before Tax -3048.67 1565.25

1061.92 -1619.08 774.41

Net Cash From Operating Activities 138.14 1168.89

-665.43 -599.22 685.77

Net Cash (used in)/fromInvesting Activities 1094.73

-2067.8

086.12 -462.91 -708.18

Net Cash (used in)/from Financing Activities -1268.98 991.48 -214.14 2817.20 132.19Net (decrease)/increase In Cash and Cash Equivalents

-35.13 92.57 -793.46 1755.07 109.78

Opening Cash & Cash Equivalents 161.83 69.26 862.39 172.14 62.36Closing Cash & Cash Equivalents 126.70 161.83 68.93 1927.21 172.14

Interpretation:

It shows the cash inflow and outflow of the company.

The highest cash equivalents in the year 2008 in last five years.

There is a major difference between the financing activities of the year2007 & 2008 because of company issue shares more than last year

Cash generated from operating activities is also highest in the 2010 as compare to the last five years. It may be because of high collection ofdebtors or sales of goods and services.

It shows from the last five year analysis that cash flow is in increasing and decreasing mood.



Chapter 6 (Ratio analysis)

6.1- CLASSIFICATION OF RATIO

As per requirement of various users the ratio may be classified in following groups.

Profitability Ratio:-Profitability Ratio:-1. Gross profit ratio.2.2. Net profit ratio

3. Return on capital employs ratio4. Return on share holders fund5. Return on equity share holders fund6. Operating ratio7. Expenses ratio8. Earnings per share9. Dividend per share10. Price Earnings ratio

Liquidity ratio:-Liquidity ratio:-1. Current ratio2. Liquid ratio

Leverage ratio:- Leverage ratio:- 1. Debt equity ratio2. Proprietary ratio3. Capital gearing ratio4. Long term fund to fixed assets

Activity ratio:-Activity ratio:-1.1. Sales turnover ratio2.2. Total assets turnover ratio3.3. Debtor ratio4.4. Creditor ratio5.5. Book value per share6.6. Working capital turnover ratio

Coverage ratio:-Coverage ratio:-

1. 1. Debt service coverage ratio 2. Interest coverage ratio



Profitability ratio

1. Gross profit ratio.= Gross profit *100 Sales

Year 2007 2008 2009 2010 2011

Gross profit 3,094.07 2,857.63 2,620.92 2,386.75 2,261.48

Sales 7,709.17 5,687.33 4,797.49 4,676.21 4,344.39Profit

margin%40.13493 50.24555 54.63107 51.04027 52.05518

2007 2008 2009 2010 20110

10

20

30

40

50

60

40.13493

50.245550000000154.63107

51.04027 52.05518

Gross profit

Profit

Interpretation: Profit is increased in 2009 because of more production. It is in 2007 is very less as

compare to other.



2. Net profit ratio = Net profit ×100 Sales Sales

Year 2007 2008 2009 2010 2011

Net profit 1,872.00 1,712.11 1,593.40 1,456.68 1,469.52

Sales 7,709.17 5,687.33 4,797.49 4,676.21 4,344.39

Profit margin%

24.2828 30.1039 33.2132 31.1509 33.8257

2007 2008 2009 2010 20110

5

10

15

20

25

30

35

40

24.2828

30.103933.2132

31.150933.8257

Net profit

profit

Interpretation: Net profit is increased in the 2011 by 33.83% while it is less in the

2007 by 24.28%. It because of increasing in more selling of products.



3. Operating ratio = Operating exps ×100Sales

Years 2007 2008 2009 2010 2011sOperating exps 6,538.90 4,536.77 4,162.91 4,511.46 3,919.09Sales 7,709.17 5,687.33 4,797.49 4,676.21 4,344.39Operating ratio%

84.82 79.77 86.77 96.48 90.21

2007 2008 2009 2010 20110

20

40

60

80

100

120

84.8279.77

86.7796.48

90.21

Operating ratio

Operating ratio

Interpretation: In the ratio exps is 96.48% in the 2010 it decrease the profit of the company.



4. Earnings per share = Earning per share *100 Share holders fund

Years 2007 2008 2009 2010 2011

Earnings per

share -72.32 27.28 13.61 -24.85 16.56

Share

holders fund 1,924.83 5,132.40 4,134.60 3,716.77 2,538.40

E.P.S ratio -3.76 0.53 0.329 -0.67 0.65

5. Return on capital employs Ratio = E.B.I.T ×100

Net worth

2007 2008 2009 2010 2011

E.B.I.T -3,058.51 1,550.94 950.63 -1,631.77 753.56Net worth 1,924.83 5,132.40 4,134.60 3,716.77 2,538.40Return on capital employs ratio

158.90 30.22 22.99 43.90 29.69

6. Dividend per share = equity dividend ×100 Pref, share

Years 2007 2008 2009 2010 2011

equity dividend 0.07 84.21 0.00 0.00 317.15Pref, share 211.00 210.52 210.21 210.19 186.54

Dividend ratio 0.033 40 0 0 170.017s

Liquidity ratio:-Liquidity ratio:-

1. Current ratio = Current Assets Current liabilities



Years 2007 2008 2009 2010 2011Current assests 5,412.08 2,804.98 2,790.69 2,272.92 1,928.36Current liabilities 5,157.68 2,491.08 3,082.89 3,840.11 1,177.35

Ratio 1.05 1.13 0.90 0.59 1.64

2007 2008 2009 2010 20110

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

1.051.13

0.9

0.59

1.64

Current ratio

Current ratio

Interpretation: ration is increased by 1.05 in the 2007 while it is 1.64 in last year so it is good for company

2. Liquid ratio = Current assests –(stock-prepared exps).Current liabilities.



Years 2007 2008 2009 2010 2011

Current assests –(stock-prepared exps).

5,276.36 2,643.55 2,756.73 2,157.33 1,887.70

Current liabilities. 5,157.68 2,491.08 3,082.89 3,840.11 1,177.35

Ratio 1.023 1.06 0.89 0.56 1.60

2007 2008 2009 2010 20110

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

1.023 1.060.89

0.56

1.6

Liquid ratio

Liqui ratio

Interpretation: In the year 2011 it is 1.6 so reduces the liabilities.

Leverage ratio:- Leverage ratio:-

1. Debt equity ratio = Long term debt

Share holders fund

Year 2007 2008 2009 2010 2011



Long term debt 4,333.53 4,260.72 3,348.38 3,725.37 3,503.03 Share holders fund 1,924.83 5,132.40 4,134.60 3,716.77 2,538.40

Ratio 2.25 0.83 0.81 1.00 1.38

2007 2008 2009 2010 20110

0.5

1

1.5

2

2.52.25

0.830000000000001 0.81

1

1.38

Debt ratio

debt ratio

Interpretation: In the year 2007 it is 2.25 while it is1.38 in the 2011.

2. Proprietary ratio= Share holders fund

Total assets

Years 2007 2008 2009 2010 2011Share 1,924.83 5,132.40 4,134.60 3,716.77 2,538.40



holders fundTotal assets 6,258.36 9,393.11 7,482.99 7,442.15 6,041.42

Ratio 0.31 0.55 0.55 0.50 0.42

2007 2008 2009 2010 20110

0.1

0.2

0.3

0.4

0.5

0.6

0.31

0.55 0.550.5

0.42

Proprietary ratio

Proprietary ratio

Interpretation: In the 2008 & 2009 it is 0.55 while it is in the 2007 by 0.31.

ACCOUNTIG POLICES AND NOTES

Significant accounting polices:-



Schedule ‘N’:-

a. Basis preparation of financial statement:-

The financial statement are prepared under the historical cost conventional accept for certain

fixed assets which are revalued in accordance with the generally accepted accounting

principles in India. And the provisions of the companies act 1956.

b. Use of estimates :-

The preparation of financial statements requires estimates and assumptions to be made that

affect the reported amount of assets and liabilities on the date of the financial statements and

the reported amount of revenues and expense during the accounting period.

c. Own fixes assts:-

Fixed assets are stated at cost net of value added tax. And includes amounts added on

revaluations less accumulated depreciation and impairment loss if any all cost including

financial cost in commencement of commercial product net charges on foreign exchange

contract arising from exchange rate variations attribute table to the fixed assets are

capitalized.

d. Leased assts:-

Operating leases rentals are expensed with reference to lease terms and other considerations.

I. finance leases prior to 1st April, 2001: rentals are expensed with reference to lease terms and other

consideration.

II. Financial leases on or after 1st April. 2001: the lower of the value of the assets and present value of the

minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability. The

principal component in the lease rental is adjusted against the lease liability and the interest component is

charged to profit and loss account.

e. Intangible assets:-

Intangible assets are stated at cost of acquisition less accumulated amortiosation.

f. Depreciation:-

Depreciation on fixes assets is provided to the extent of depreciable amount on written down

value method at rates and in the manner prescribed in the company’s act 1956.

Depreciation is provided on straight line method over their useful life. 100% depreciation is

provided in the year of additions, on additions forming an integral part of existing plans

including incremental cost arising on account of translation of foreign currency liabilities for

accusation of fixed assets. Depreciation is provided as aforesaid over the residual life of the



assets as certifies by values on assets acquired under fiancé lease from 1st April 2001.

Depreciation is provided over the lease term.

g. Foreign currency transactions:-

Transactions denominated in foreign currencies are recorded at the exchange rate

prevailing on the date of the transaction.

Monitory items denominated in foreign currency at year and are restated at year end

rates in case of items which are covered by forward exchange contracts.

Nonmonetary currency items are carried at cost.

h. Inventories:-

Items of inventories are measured at lower of the cost and net realizable value after providing

for obsolescence if any. Cost of inventories comprises of cost of purchase, cost of conversion

and other cost incurred in bringing them to their respective present location and condition.

i. Employee benefits:-

Short term employee benefits are recognize as an expense at the undiscounted amount

in pal account of the year in which the rendered services is rendered.

In respect of employees stock options the excess of fair price on the date of grant over

the exercise price is recognized as differed compensation cost amortized over the

vesting period.

j. Provision for current differed tax:-

Provision for tax is made after taking in to consideration benefits admissible under the

provisions of the income tax act 1961. Differed tax resulting from timing difference between

taxable and accounting income is accounted for using the tax rates and laws that are in acted

as on the balacesheet date.

k. Provisions contingent liabilities and assts:-

Provisions involving substantial degree of estimation in measurement are recognized when

there is a present obligation is a result of past events. Contingent liabilities are not recognized

but are disclosed in the notes. Contingent assets are neither recognized not disclosed.

Conclusion

The RANBAXY Project has documented substantial differences in the treatment of student and faculty in the College of Medicine. Current objectives are to



1) continue with analysis of the data collected, particularly the ethnographic interviews with faculty and department chairs, and

2) Continue to meet with faculty and administration to identify additional strategies for solving the problems identified.

The ultimate goal of the project is to achieve parity for student and faculty in an environment of academic excellence.

Bibliography (References):

www.google.com GLOBAL INSTITUTE OF MANAGEMENT

http://www.google.com/


http://www.moneycontrol.com/financials/ranbaxylaboratories/balance-sheet/RL#RL

www.ranbaxy.com

International Directory of Company Histories, Vol. 70. St. James Press, 2005.

http://www.fundinguniverse.com/company-histories/ranbaxy-laboratories-ltd-history/


http://www.fundinguniverse.com/company-histories/ranbaxy-laboratories-ltd-history/

Economy & Finance

Komal dulam