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RANBAXY LABORATORIES LIMITED Page |1

A Project Report

On
Financial Analysis
Of

Submitted to

Global Institute of Management


Gujarat Technological University On
10/12/2012
In Partial fulfillment of the requirements for the Accounting 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)

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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.

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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.

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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.

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Index

Sr.No.

Content

Page no.

Chapter :1 Introduction of Company

Chapter-2: Comparative Balance sheet and Analysis of Balance Sheet

10

Chapter-3: Comparative Profit and Loss Account and Analysis of Profit & Loss Statement

15

Chapter-4: Common Size Statements

19

Chapter 5: Trend Analysis (Index Analysis)

23

Chapter 6: Analysis of Cash flow Statement

26

Chapter 7: Ratio Analysis

27

Chapter 9: Contemporary Issues in Accounting of the company

36

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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 Founded Public 1961

Headquarters- Gurgaon, Haryana, India Employees Website 1100 in R&D 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: business.development@ranbaxy.com

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

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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

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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.

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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 Une Chairman Non Executive & Non Independent Director

Mr. Arun Sawhney CEO & Managing Director

Mr. Takashi Shoda Non Executive & Non Independent Director

Dr. Kazunori Hirokawa Non Executive & Non Independent Director

Dr. Anthony H. Wild Independent Director

Mr. Rajesh V. Shah Independent Director

Mr. Akihiro Watanabe Independent Director

Mr. Percy K. Shroff Independent Director

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CHAPTER: 2 (Balance sheet 2008-2012) Balance Sheet of Ranbaxy Laboratories of 2007-2011


Particulars Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net worth Secured Loans Unsecured Loans Total Debt Total Liabilities ------------------ in Rs. Cr. ------------------Dec '11 Dec '10 Dec '09 Dec '08 Dec '07

211.00 211.00 0.67 0.00 1,713.16 0.00 1,924.83 229.59 4,103.94 4,333.53 6,258.36

210.52 210.52 6.60 0.00 4,915.28 0.00 5,132.40 195.39 4,065.33 4,260.72 9,393.12

210.21 210.21 175.85 0.00 3,748.54 0.00 4,134.60 175.83 3,172.55 3,348.38 7,482.98

210.19 210.19 175.66 0.00 3,330.92 0.00 3,716.77 162.07 3,563.30 3,725.37 7,442.14

186.54 186.54 1.18 0.00 2,350.68 0.00 2,538.40 365.07 3,137.96 3,503.03 6,041.43

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories 3,094.07 1,222.07 1,872.00 222.62 3,410.79 1,655.23 2,857.63 1,145.52 1,712.11 330.18 3,804.44 1,489.91 2,620.92 1,027.52 1,593.40 414.92 3,833.69 1,230.48 2,386.75 930.07 1,456.68 428.77 3,618.03 1,198.52 2,261.48 791.96 1,469.52 327.42 3,237.55 976.07

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Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deferred Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets

3,689.95 66.90 5,412.08 2,382.72 1,871.14 9,665.94 0.00 5,157.68 3,755.31 8,912.99 752.95 0.00 6,258.36

1,292.63 22.44 2,804.98 1,470.45 2,689.85 6,965.28 0.00 2,491.08 927.82 3,418.90 3,546.38 0.00 9,393.11

1,534.65 25.56 2,790.69 1,967.65 728.56 5,486.90 0.00 3,082.89 763.03 3,845.92 1,640.98 0.00 7,482.99

1,024.54 49.86 2,272.92 2,351.98 1,885.08 6,509.98 0.00 3,840.11 731.20 4,571.31 1,938.67 0.00 7,442.15

882.91 69.38 1,928.36 882.99 111.07 2,922.42 0.00 1,177.35 738.14 1,915.49 1,006.93 0.00 6,041.42

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Comparative Balance sheet of Ranbaxy Laboratories of 2007-2011


------------------ in Rs. Cr. ------------------Particulars Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net worth Secured Loans Unsecured Loans 0.48 0.48 0.31 0.31 0.02 0.02 0.19 417.62 417.83 13.76 23.65 23.65 174.48 980.24 0.22800 0.14747 0.00951 12.6782 7 2 5 5 0.22800 0.14747 0.00951 12.6782 7 2 5 5 0.10816 14786.4 89.8485 96.2468 3 4 Dec '1110 Dec '10-09 Dec '09-08 Dec '08-07 % '11-10 % '10-09 % '09-08 % '08-07

-5.93 -169.25 3202 .12 3207 .57 34.2 1166.7 4 997.8 19.56

31.1251 12.5376 41.7002 65.1462 8 8 7 -

1178.3 24.1329 11.2417 46.4217 7 62.4965 3 5 6 -203

38.6 1 72.8 Total Debt 1 Total 3134 Liabilities .76 Application Of Funds 236. Gross Block 44 Less: Accum. 76.5 Depreciation 5 Net Block 159.

17.5034 11.1243 8.49015 5 8 9 55.6058 0.94973 28.1407 13.5546 892.78 -390.75 425.34 -10.966 8 7 7 1.70886 27.2472 6.34707 912.34 -376.99 222.34 6 1 10.1195 7 1910.1 4 40.84 1400.7 25.5264 0.54876 23.1850 1 33.3729 6 7 7

236.71 118.00 118.71

234.17 97.45 136.72

125.27 138.11 -12.84

8.27 6.68 9.34

9.03 11.48 7.45

9.81 10.48 9.39

5.54 17.44 -0.87

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Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deferred Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets

89 107. 56 393. 65 165. 32 2,39 7.32 44.4 6 2,60 7.10 912. 27 818. 71 2,70 0.66 2,66 6.60 2,82 7.49 5,49 4.09 2,79 3.43 3,13 4.75

-84.74

-13.85

101.35

-32.58

-20.42

-3.23

30.95

-29.25 259.43

215.66 31.96

380.48 222.45 141.63 -19.52 344.56 1,468.9 9

-10.35 11.10 185.46 198.13 92.95 62.04 -30.44

-0.76 21.08 -15.77 -12.21 0.51 -25.27 269.20

5.96 2.67 49.79 -48.74 22.78 -16.34 -61.35

11.75 22.79 16.04 -28.13 17.87 166.37 1,597.2 0 122.76 226.17 -0.94 138.65 92.53 -s 23.19

-242.02 510.11 -3.12 14.29 -24.30 517.77

-497.20 -384.33

1,961.2 1,774.0 1,156.5 9 1 2 1,478.3 3,587.5 1,023.0 8 6 8 2,662.7 6 -6.94 2,655.8 2

38.77 107.05 304.75 160.70 -78.77 -33.37

26.94 -19.20 21.60 -11.10 116.11 25.53

-15.72 -19.72 4.35 -15.87 -15.36 0.55

-591.81 -757.22 164.79 31.83

-427.02 -725.39

1,905.4 -297.69 931.74 0 1,910.1 2 40.84 1,400.7 3

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Interpretation
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 company Purchases investments and assets every year. Its shows companys good profitability and financial soundness. The Net Block of a company was continuously increased for but in 2010 it was decreased.

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


Profit and Loss Account of Ranbaxy lab.
Particulars Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalized Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extraord Items) Dec '11 7,709.17 22.58 7,686.59 -3,990.57 135.72 3,831.74 2,523.08 194.98 845.24 112.69 1,579.37 1,283.54 0.00 6,538.90 1,283.41 -2,707.16 69.44 -2,776.60 274.08 7.83 -3,058.51 15.44 -3,043.07 Dec '10 5,687.33 40.96 5,646.37 562.45 161.43 6,370.25 2,181.22 132.75 608.28 96.68 1,332.70 185.14 0.00 4,536.77 1,271.03 1,833.48 54.19 1,779.29 228.35 0.00 1,550.94 21.88 1,572.82 Dec '09 4,797.49 15.90 4,781.59 485.66 33.96 5,301.21 1,916.58 109.57 582.50 89.94 1,306.25 158.07 0.00 4,162.91 652.64 1,138.30 39.47 1,098.83 148.20 0.00 950.63 111.42 1,062.05 Dec '08 4,676.21 24.17 4,652.04 -1,587.64 115.59 3,179.99 2,049.30 108.83 472.65 94.65 1,402.77 383.26 0.00 4,511.46 256.17 -1,331.47 145.83 -1,477.30 154.47 0.00 -1,631.77 17.76 -1,614.01 Dec '07 4,344.39 51.37 4,293.02 551.13 40.66 4,884.81 1,861.17 90.35 420.04 82.60 1,341.03 123.90 0.00 3,919.09 414.59 965.72 93.43 872.29 118.73 0.00 753.56 35.46 789.02

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Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Shares in issue (lakhs) Earnings Per Share (Rs) Equity Dividend (%)

6.69 -3,052.05 4,015.82 0.00 0.07 -0.32 4,220.00 -72.32 0.03

415.48 1,148.73 2,355.55 0.00 84.21 13.99 4,210.41 27.28 40.00

488.86 571.98 2,246.33 0.00 0.00 0.00 4,204.17 13.61 0.00

-574.24 -1,044.80 2,462.16 0.00 0.00 0.00 4,203.70 -24.85 0.00

156.69 617.72 2,057.93 0.00 317.15 53.90 3,730.71 16.56 170.00

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


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

Particulars

Dec '11-10

Dec '10-09
889.84 25.06 864.78 76.79 127.47 1,069.04 264.64 23.18 25.78

Dec '09-08
121.28 -8.27 129.55 2,073.30 -81.63 2,121.22 -132.72 0.74 109.85

Dec '08-07
331.82 -27.20 359.02 2,138.77 74.93 1,704.82 188.13 18.48 52.61

% '11-10
35.55 -44.87 36.13 -809.50 -15.93 -39.85 15.67 46.88 38.96

% '10-09
18.55 157.61 18.09 15.81 375.35 20.17 13.81 21.16 4.43

% '09-08
2.59 -34.22 2.78 -130.59 -70.62 66.71 -6.48 0.68 23.24

% '08-07
7.64 -52.95 8.36 -388.07 184.28 -34.90 10.11 20.45 12.52

Income Sales Turnover 2,021.84 -18.38 Excise Duty 2,040.22 Net Sales Other Income Stock Adjustments Total Income
4,553.02 -25.71 2,538.51

Expenditure Raw Materials 341.86 Power & Fuel 62.23 Cost Employee 236.96 Cost Other Manufacturing 16.01 Expenses Selling and 246.67 Admin Expenses Miscellaneous 1,098.40 Expenses Preoperative 0.00 Exp Capitalized Total 2,002.13 Expenses Operating 12.38 Profit PBDIT Interest PBDT Depreciation
4,540.64 15.25 4,555.89 45.73

6.74

-4.71

12.05

16.56

7.49

-4.98

14.59

26.45

-96.52

61.74

18.51

2.02

-6.88

4.60

27.07

-225.19

259.36

593.28

17.13

-58.76

209.33

0.00

0.00

0.00

373.86 618.39 695.18 14.72 680.46 80.15

-348.55 396.47 2,469.77 -106.36 2,576.13 -6.27

592.37 -158.42 2,297.19 52.40 2,349.59 35.74

44.13 0.97 -247.65 28.14 -256.05 20.03

8.98 94.75 61.07 37.29 61.93 54.08

-7.73 154.77 -185.49 -72.93 -174.38 -4.06

15.11 -38.21 -237.87 56.08 -269.36 30.10

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Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Shares in issue (lakhs) Earnings Per Share (Rs) Equity Dividend (%)

7.83 4,609.45 -6.44 4,615.89 -408.79 4,200.78 1,660.27 0.00 -84.14 -14.31 9.59 -99.60 -39.97

0.00 600.31 -89.54

0.00 2,582.40 93.66

0.00 2,385.33 -17.70 2,403.03 -730.93 1,662.52 404.23 0.00 -317.15 -53.90 472.99 -41.41 -170.00

-297.20 -29.43

63.15 -80.36

-158.26 527.36

-316.54 -49.92

510.77 -73.38 576.75 109.22 0.00 84.21 13.99 6.24 13.67 40.00

2,676.06 1,063.10 1,616.78 -215.83 0.00 0.00 0.00 0.47 38.46 0.00

-293.48 -98.39 -365.69 70.48 -99.92 -102.29 0.23 -365.10 -99.93

48.09 -15.01 100.83 4.86 0.15 100.44 -

-165.80 -185.13 -154.75 -8.77 -0.01 -154.77 -

-304.56 -466.48 -269.14 19.64 -100.00 -100.00 12.68 -250.06 -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.

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CHAPTER:4 Common size Statement of Ranbaxy ltd. Balance Sheet of Ranbaxy Laboratories of 2007-2011
Particulars Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net worth Secured Loans Unsecured Loans Total Debt Total Liabilities ------------------ in Rs. Cr. ------------------Dec '11 Dec '10 Dec '09 Dec '08 Dec '07

3.37149 3.37149 0.010706 0 27.37394 0 30.75614 3.668533 65.57533 69.24386 100

2.241215 2.241215 0.070264 0 52.32851 0 54.63999 2.08014 43.27987 45.36001 100

2.809175 2.809175 2.3499996 0 50.094214 0 55.253388 2.3497323 42.396879 44.746612 100

2.824322 2.824322 2.360343 0 44.75756 0 49.94222 2.177734 47.88005 50.05778 100

3.08768 3.08768 0.019532 0 38.90933 0 42.01654 6.042775 51.94068 57.98346 100

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories 49.43899 19.527 29.91199 3.557162 54.49974 26.4483 30.42262 12.19532 18.2273 3.51513 40.50245 15.86173 35.025037 13.73141 21.293627 5.5448424 51.232061 16.443694 32.07071 12.49733 19.57338 5.761373 48.61539 16.10449 37.43292 13.10884 24.32408 5.419587 53.58922 16.1563

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Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deferred Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets

58.96033 1.06897 86.47761 38.07259 29.89825 154.4484 0 82.41264 60.0047 142.4173 12.03111 0 100

13.76147 0.238899 29.8621 15.65456 28.63642 74.15308 0 26.52029 9.877666 36.39796 37.75512 0 100

20.508513 0.3415747 37.293782 26.29497 9.7362151 73.324968 0 41.198639 10.19686 51.395498 21.929469 0 100

13.76672 0.669968 30.54117 31.6035 25.32978 87.47445 0 51.59947 9.825118 61.42459 26.04986 0 100

14.61428 1.148406 31.91899 14.6156 1.838475 48.37306 0 19.48797 12.21799 31.70596 16.66711 0 100

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Profit and loss account (common size statement)


Particulars Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalized Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extrarod Items) Tax Dec '11 100.00 0.29 99.71 -51.76 1.76 49.70 32.73 2.53 10.96 1.46 20.49 16.65 0.00 84.82 16.65 -35.12 0.90 -36.02 3.56 0.10 -39.67 0.20 -39.47 0.09 Dec '10 100.00 0.72 99.28 9.89 2.84 112.01 38.35 2.33 10.70 1.70 23.43 3.26 0.00 79.77 22.35 32.24 0.95 31.29 4.02 0.00 27.27 0.38 27.65 7.31 Dec '09 100.00 0.33 99.67 10.12 0.71 110.50 39.95 2.28 12.14 1.87 27.23 3.29 0.00 86.77 13.60 23.73 0.82 22.90 3.09 0.00 19.82 2.32 22.14 10.19 Dec '08 100.00 0.52 99.48 -33.95 2.47 68.00 43.82 2.33 10.11 2.02 30.00 8.20 0.00 96.48 5.48 -28.47 3.12 -31.59 3.30 0.00 -34.90 0.38 -34.52 -12.28 Dec '07 100 1.182444 98.81756 12.68602 0.93592 112.4395 42.84077 2.079694 9.668561 1.901303 30.86809 2.851954 0 90.21036 9.543112 22.22913 2.15059 20.07854 2.73295 0 17.34559 0.816225 18.16181 3.60672

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Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Shares in issue (laths) Earnings Per Share (Rs) Equity Dividend (%)

-39.59 52.09 0.00 0.00 0.00 54.74 -0.94 0.00

20.20 41.42 0.00 1.48 0.25 74.03 0.48 0.70

11.92 46.82 0.00 0.00 0.00 87.63 0.28 0.00

-22.34 52.65 0.00 0.00 0.00 89.90 -0.53 0.00

14.2188 47.36983 0 7.300219 1.240681 85.8742 0.381181 3.913093

Analysis of Common Size Statement


The contribution of net sales in total income was nearly same in all the year It was near about 98 to 100%. The contribution of total expenditure was continuous decrease year by year, but in 2011 it Increased. So that from the above common size statement we can easily find out that Company is at a growing stage.

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CHAPTER 5 (Trend analysis) Balance sheet of Ranbaxy ltd.


particulars Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net worth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Differed Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 2007 2008 2009 2010 2011

100 112.6782 100 112.6782

112.689 112.8552 113.1125 112.689 112.8552 113.1125 559.322 56.77966

100 14886.44 14902.54

100 141.7003 159.4662 209.1003 72.87934 100 100 100 100 100 146.4218 44.39423 113.5547 106.3471 123.1851 162.8821 48.16337 101.1023 95.58525 123.8611 202.1904 53.52124 129.5533 121.6296 155.4784 75.82847 62.88931 130.7837 123.708 103.5907

100 105.5393

115.894 126.3611 136.8162

100 117.439 129.7439 144.6437 154.3096 100 99.12625 108.43 116.5081 127.3885 100 100 100 100 100 100 100 100 130.9541 111.7521 122.7904 116.0413 71.86509 117.868 266.3654 1697.2 126.7241 118.4133 126.0647 173.8173 36.84059 144.7183 222.8394 655.9467 100.843 117.5098 152.6438 146.4056 32.34361 145.4594 166.5308 2421.761 67.99218 105.351 169.5811 417.9305 96.42548 280.6571 269.8468 1684.649

100 222.7599 187.7519 238.3395 330.7512 100 326.1655 261.8499 211.5836 438.0753 100 99.0598 103.372 125.697 508.7531 100 238.6496 200.78 178.487 465.3112 100 192.5327 162.9686 352.1973 74.7768

100 123.1854 123.8614 155.4785 103.5909 100 125.796 129.8756 137.3781 148.01 100 123.8641 138.4502 179.0031 67.04896
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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 Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalized Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary 2007 100 100 100 100 100 100 100 100 100 100 2008 107.6379 47.05081 108.3629 -288.07 2009 110.4295 30.95192 111.3806 88.12077 2010 130.912 79.73525 131.5244 102.054 397.0241 130.4094 117.1962 146.9286 144.8148 117.046 2011 177.4511 43.95562 179.0485 -724.071 333.7924 78.44195 135.5642 215.8052 201.2285 136.4286

284.2843 83.52189 65.09956 108.5244 110.1082 102.9772 120.4538 121.2728 112.525 138.6773

114.5884 108.8862

100 100

104.6039 97.40647 309.3301 127.5787

99.37884 149.427

117.7729 1035.948

100 100 100 100 100 100

115.115 61.78876 -137.873 156.0848 -169.359 130.1019

106.2213 157.4182 117.8706 42.24553 125.9707 124.821

115.7608 306.5752 189.8563 58.00064 203.9792 192.3271

166.8474 309.5613 -280.326 74.32302 -318.312 230.8431

100 100

-216.541 50.0846

126.1519 314.2132

205.8151 61.70333

-405.875 43.54202

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items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualized) Shares in issue (lakhs) Earnings Per Share (Rs) Equity Dividend (%) Book Value (Rs)

100 100 100 100

-204.559 -366.482 -169.138 119.6426

134.6037 311.9918 92.59535 109.1548

199.3384 265.1605 185.9629 114.4621

-385.677 4.269577 -494.083 195.1388

100 100

0 0

0 0

26.5521 25.95547

0.022072 -0.59369

100 100 100 100

112.6783 -150.06 0 123.8641

112.6909 82.18599 0 138.4502

112.8581 164.7343 23.52941 179.0031

113.1152 -436.715 0.017647 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.

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CHAPTER 6: (Cashflow Statement)


Cash Flow of Ranbaxy Laboratories Particulars. Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents in Rs. Cr. Dec '08 Dec '07 -1619.08 -599.22 -462.91 2817.20 1755.07 172.14 1927.21 774.41 685.77 -708.18 132.19 109.78 62.36 172.14

Dec '11 -3048.67 138.14 1094.73 -1268.98 -35.13 161.83 126.70

Dec '10 1565.2 5 1168.8 9 2067.8 0 991.48 92.57 69.26 161.83

Dec '09 1061.92 -665.43 86.12 -214.14 -793.46 862.39 68.93

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 year 2007 & 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 of debtors or sales of goods and services. It shows from the last five year analysis that cash flow is in increasing and decreasing mood.

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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:1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Liquidity ratio:1. Current ratio 2. Liquid ratio Leverage ratio:1. 2. 3. 4. Activity ratio:1. 2. 3. 4. 5. 6. Coverage ratio:1. Debt service coverage ratio 2. Interest coverage ratio Sales turnover ratio Total assets turnover ratio Debtor ratio Creditor ratio Book value per share Working capital turnover ratio Debt equity ratio Proprietary ratio Capital gearing ratio Long term fund to fixed assets Gross profit ratio. Net profit ratio Return on capital employs ratio Return on share holders fund Return on equity share holders fund Operating ratio Expenses ratio Earnings per share Dividend per share Price Earnings ratio

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Profitability ratio
1. Gross profit ratio.= Gross profit *100 Sales Year Gross profit Sales Profit margin% 2007 2008 2009 2010 2011

3,094.07 7,709.17
40.13493

2,857.63 5,687.33
50.24555

2,620.92 4,797.49
54.63107

2,386.75 4,676.21
51.04027

2,261.48 4,344.39
52.05518

Gross profit
60 50.24555 50 40.13493 40 30 20 10 0 2007 2008 2009 2010 2011 54.63107 51.04027 52.05518

Profit

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

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2. Net profit ratio

= Net profit 100 Sales

Year Net profit Sales Profit margin%

2007 1,872.00 7,709.17 24.2828

2008 1,712.11 5,687.33 30.1039

2009 1,593.40 4,797.49 33.2132

2010 1,456.68 4,676.21 31.1509

2011 1,469.52 4,344.39 33.8257

Net profit
40 35 30.1039 30 25 20 15 10 5 0 2007 2008 2009 2010 2011 24.2828 33.2132 33.8257 31.1509

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.

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3. Operating ratio = Operating exps 100 Sales

Years Operating exps Sales Operating ratio%

2007 6,538.90 7,709.17 84.82

2008 4,536.77 5,687.33 79.77

2009 4,162.91 4,797.49 86.77

2010 4,511.46 4,676.21 96.48

2011s 3,919.09 4,344.39 90.21

Operating ratio
120 100 84.82 80 60 40 20 0 2007 2008 2009 2010 2011 86.77 79.77 96.48 90.21

Operating ratio

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

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4. Earnings per share = Earning per share *100 Share holders fund Years Earnings per share Share holders fund E.P.S ratio 2007 2008 2009 2010 2011

-72.32 1,924.83
-3.76

27.28 5,132.40
0.53

13.61 4,134.60
0.329

-24.85 3,716.77
-0.67

16.56 2,538.40
0.65

5. Return on capital employs Ratio =

E.B.I.T 100 Net worth

2007 E.B.I.T Net worth Return on capital employs ratio

2008

2009

2010

2011

-3,058.51 1,924.83
158.90

1,550.94 5,132.40
30.22

950.63 4,134.60
22.99

-1,631.77 3,716.77
43.90

753.56 2,538.40
29.69

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

Years equity dividend Pref, share Dividend ratio

2007

2008

2009

2010

2011

0.07 211.00
0.033

84.21 210.52
40

0.00 210.21
0

0.00 210.19
0

317.15 186.54
170.017s

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Liquidity ratio:1. Current ratio = Current Assets Current liabilities

Years Current assests Current liabilities Ratio

2007 5,412.08

2008 2,804.98

2009 2,790.69

2010 2,272.92

2011 1,928.36

5,157.68
1.05

2,491.08
1.13

3,082.89
0.90

3,840.11
0.59

1,177.35
1.64

Current ratio
1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2007 2008 2009 2010 2011 0.59 1.05 1.13 0.9 Current ratio 1.64

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

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

Current liabilities. Years


Current assests (stockprepared exps).

2007

2008

2009

2010

2011

5,276.36

2,643.55

2,756.73

2,157.33

1,887.70

Current liabilities. Ratio

5,157.68 1.023

2,491.08 1.06

3,082.89 0.89

3,840.11 0.56

1,177.35 1.60

Liquid ratio
1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2007 2008 2009 2010 2011 1.023 1.06 0.89 Liqui ratio 0.56 1.6

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

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Leverage ratio:-

1. Debt equity ratio = Long term debt Share holders fund Year Long term debt Share holders fund Ratio 2007 2008 2009 2010 2011

4,333.53 1,924.83
2.25

4,260.72 5,132.40
0.83

3,348.38 4,134.60
0.81

3,725.37 3,716.77
1.00

3,503.03 2,538.40
1.38

Debt ratio
2.5 2.25

1.5 1 1 0.83 0.81

1.38 debt ratio

0.5

0 2007 2008 2009 2010 2011

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

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2. Proprietary ratio= Share holders fund Total assets Years 2007 Share holders 1,924.83 fund Total assets 6,258.36 Ratio 0.31 2008 2009 2010 2011

5,132.40 9,393.11
0.55

4,134.60 7,482.99
0.55

3,716.77 7,442.15
0.50

2,538.40 6,041.42
0.42

Proprietary ratio
0.6 0.5 0.42 0.4 0.31 0.3 0.2 0.1 0 2007 2008 2009 2010 2011 Proprietary ratio 0.55 0.55 0.5

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

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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 companys act 1956.

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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 fianc 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.
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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.

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Bibliography (References): 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/

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