You are on page 1of 22

For Office Use:

Grade

Managerial accounting - 1
Assignment No. 1
Analysis Report on
Ipca Laboratories Ltd.

Submitted by:-

Name: Abhishek Agrawal


Roll no: 151301
Section: C
Batch: MBA-FT (2015-17)

Institute of Management, Nirma University


Date of Submission: July 21, 2015

UNDERTAKING

To Whom It May Concern:


I, Abhishek Agrawal hereby declare that this assignment is my original work and is not copied
from anyone/ anywhere. If found similar to other sources, I shall take complete responsibility of the
action, taken thereof by, Administration.

Signature:

Name: Abhishek Agrawal


Roll no.: 151301
Section: c
Batch: MBA-FT (2015-17)
Date: July 21, 2015

1. What is the companys business? Explain in about 300 words.


Ipca Laboratories Limited, based in India, manufactures and supplies active
pharmaceutical ingredients and pharmaceutical formulations for various therapeutic segments. The
company offers formulations and ingredients in therapeutic areas of anti-hypertensive, anthelmintic,
anti-malarial, diuretic, and NSAIDs. It also provides generic and branded formulations in various
dosage forms, such as dry powders for suspension, oral solids and liquids, and various injectables.
The company provides formulations for cardiovascular, anti-diabetic, NSAIDs , cardio-diabetic,
rheumatology, orthopedics, gastro-intestinal, anti-bacterial, respiratory, neuropsychiatry, antimalarial, anti-pyretic, cough, central nervous system drugs, pain management, dermatology,
urology, and geriatric areas, as well as oral and injectable antibiotics surgical and non-surgical
needs. The company manufactures approximately 150 formulations. The company also exports its
products to approximately 120 countries worldwide and also makes some formulations for many
companies based in Europe. In April 2005, Ipca entered into a Joint Venture agreement with
Chongqing Holley Holding Co., Ltd. of China. This joint venture mainly targets malaria by use of
artemisinin and artemisinin derivatives. This joint venture supplies mainly to International
Institutions, NGOs, and Government and Semi-Government bodies across the globe. Ipca also
partnered with Ranbaxy pharmaceuticals to develop generic drugs. Ipca Laboratories Limited was
incorporated in 1949 and is based in Mumbai, India.

2. What are its main products and services? Name some of the companys brands, if any.

The company engages in producing and exporting the anti-malarial drug compounds
like Chloroquine, Amodiaquine, Primaquine, Artemether, Arteether and Artesunate and their
formulations. Company earns major part of their revenue from anti-malerial drugs. The company
also manufactures active pharmaceutical ingredients (API), such as Atenolol, Chloroquine
Phosphate, Furosemide, and Pyrantel Salts. The company also offers formulations of Hydroxy
Chloroquine Sulphate under the brand HCQS; Aceclofenac under the brand Zerodol and an
injectable anti-biotic combination under the brand Sultax in the Indian market. Ipca manufacture
approximately 150 formulations amd dosage forms include tablets, oral liquids, dry powders for
suspension, capsules and injectables (liquid & dry). Company also produces anti-hypertensives,
anti-bacterials, cardio vascular drugs, central nervous system drugs, non steroidal anti-inflammatory
drugs (NSAID) and cough preparations.it also sells propanolol in US market. Few famous products
are Lariago (anti-malarial), Perinorm (anti-emetic), Eltocin and Imox (anti-biotic).

3. Who are likely to be the companys major suppliers?


Information is not available.

4. Who are likely to be the companys major customers? Does the company export its products?
To which countries?
Break-up of Sales (` Crores) (net of excise duty & sales tax)
Break-up of sales
Domesti

(in Crore rupees ) (net of excise duty & sales tax)


2013-14
2012-13
Export
Total
Growt Domesti Export
Total Growth

Formulations

c
969.42

s
1447.57

2416.9

h
17%

c
878.10

s
1194.18

2072.2

18%

APIs &

164.54

600.23

9
764.77

15%

144.64

521.90

8
666.54

21%

Intermediates
Net Total

1133.96

2047.80

3181.7

16%

1022.74

1716.08

2738.8

19%

Sales

Ipca sells product in Indian market and also exports in other markets. Company exports
mainly to Europe, Africa and America continents. It also exports to Asia, CIS, Australia and
Newzealand.

Continent-wise export
Formulation

Europe
Africa
America
Asia
CIS
Australasia
Total

2013-14
APIs and

Intermediates

378.46
529.83
254.20
66.88
165.82
52.38
1447.57

215.08
36.25
165.46
175.48
4.41
3.55
600.23

Total

593.54
566.08
419.66
242.36
170.23
55.93
2047.80

In crore rupees
% to exports

29%
28%
20%
12%
8%
3%
100%

The Company markets branded formulations in countries like Uganda, Ghana, Ivory
Coast, Burkina Faso, Zimbabwe, Sudan, Tanzania, Kenya, Ethiopia and Nigeria through dedicated
field force. The Company exports its APIs to USA, Canada and South American countries and

formulations to USA, Canada, Panama, West Indies and few South American countries in this subcontinent.
5. How many employees does it have? Why is this information important?
According to a report published in July,2014 it has 12,127 employees including 6219 in
marketing and distribution. The number of employees of a company is a useful measure of the
growth of the company. It tells us that the company is working on various new products or trying to
revamp its existing products and the employees are dedicated towards this task.

6.

Read the Contents page. Mark the items that relate to financial statements as FS (Financial

Statement) and the rest as NFS (Non-Financial Statement). What information does the company
provide in items that you have marked as NFS? Is this information useful? How? Who is the
intended audience? Will they be able to understand the information? Give highlights of ANY
THREE major NFS items.
Following items fall under Non-Financial statement category:
1.
2.
3.
4.
5.

Management
Contacts
Notice
Report on corporate governance
Proxy form/ Attendance slip
Following items fall under Financial statement category:

1.
2.
3.
4.
5.

Auditors Report
Standalone Accounts
Auditors Report on Consolidated Accounts
Consolidated Accounts
Details of Subsidiaries
Items that fall under Non-financial statement category provides information

related to the working of the company.


1. Management provides information about the Board of directors, corporate management
team, Company secretary and auditors.
2. Contacts provide the address and contact details of Registered office, Corporate office,
Research and development center, registrar and share transfer agents.
3. Notice provides the information related to Annual General Meeting and the issues to be
discussed in the Annual General Meeting. It also provides the information about the new
directors to be appointed.

4. Report on corporate governance describes about the companies philosophy on corporate


governance and the details about the board of directors, audit committee, stakeholders
relationship committee, general body meetings.
5. proxy form/ attendance slip this is meant to be used for Annual General Meeting. If
someone is attending the meeting then he can record his presence thru the Attendance slip or
else he can ask someone else to attend the meeting thru proxy form.

This information is intended to be used by shareholders and it is written in simple


language so they will be able to understand, what is going to be discussed in the meeting and if they
need more information about the company whom they should contact.

7. When was the annual general meeting to be held? What were the items to be discussed?
64th ANNUAL GENERAL MEETING of Ipca Laboratories Limited will be held at Shri
Bhaidas Maganlal Sabhagriha, Swami Bhaktivedanta Marg, J.V.P.D. Scheme, Vile Parle (W),
Mumbai 400 056 on Thursday, 31st July, 2014 at 3.30 p.m.. following issues were to be discussed:
1. To receive, consider and adopt the Balance Sheet of the Company as at 31st March, 2014
and the Statement of Profit & Loss for the year ended on that date and the Reports of the
Directors and Auditors thereon.
2. To declare / confirm payment of dividend on equity shares.
3 To appoint a Director in place of Mr. Ajit Kumar Jain (DIN 00012657) who retires by rotation
and being eligible, offers himself for re-appointment.
4. To appoint a Director in place of Mr. Pranay Godha (DIN 00016525) who retires by rotation
and being eligible, offers himself for re-appointment.
5.

To appoint Auditors to hold office until the conclusion of the next Annual General Meeting
and to fix their remuneration.

8. Identify the companys reporting entities.


The Shareholders, employees, potential Investors, bankers, creditors, and the
subsidiaries are the companys reporting entities.

9. How is the information in the notes to the financial statements useful? Give five examples of
how the notes explain the items in the financial statement.

Notes provide the information related to the meeting. Examples:


1. It states that a member entitled to attend and vote at the meeting is entitled to appoint a
proxy to attend and vote instead of himself and a proxy need not be a member of the
Company.
2. The Register of Members and Share Transfer Books of the Company will remain closed
from Tuesday, 22nd July, 2014 to Thursday, 31st July, 2014.
3. It provides the information that if a dividend is declared then who will be eligible to get
benefit.
4. It also says what will happen to the shares (which were owned by the directors) after the
retirement of the director.
5. Explanatory statement under Section 102 of the Companies Act, 2013 in respect of special
business is also attached in the annexure to the notes.
10. Identify ANY THREE matters covered by the accounting policies/estimates and write their
current year ending balances.

ITEMS

AMOUNT(IN CRORES)

FIXED ASSETS

1471.01

INVESTMENTS

.15

DEPRECIATION & AMORTIZATION

100.89

INVENTORIES

838.30

EMPLOYEE BENEFOT EXPENSES

477.86

EXCISE DUTY

32.04

FOREIGN EXHANGE EXPENSES

72.10

BORROWING COST

30

TAXATION

151.72

CASH AND CASH EQUIVAENTS

69.48

EARNING PER SHARE

37.83

PROVISIONS

14.49

CONTINGENT LIABILITY

147.11

GRAND TOTAL

3442.98

11. Who is/are responsible for the information in the financial statements? Write names(s).

Board of directors and the corporate management team is responsible for the
information in the financial statements.
Premchand Godha
Ajit Kumar Jain
Pranay Godha
Prashant Godha
Babulal Jain
Anand T. Kusre
Dev Parkash Yadava
Dr. Ramakanta Panda
Harish P. Kamath

Chairman & Managing Director


Joint Managing Director
Executive Director
Executive Director
Director
Director
Director
Director
Company secretary

12. Think of information that you think would be useful but not disclosed in the financial statements.
Why do you think the information is not disclosed?
The information that is crucial to decision making has not been mentioned in detail in the
financial statements. That is because of it can affect their market, customers and suppliers.

13. Think of information not reported in the financial statements but would be available internally.
Any merger or acquisition that the company is planning in the future is not available in
the financial statement but may be available thru internal sources to the share holder.
14. Who are the companys auditors?
Auditors - Natvarlal Vepari & Co., Chartered Accountants
Cost Auditors - ABK & Associates, Cost Accountants
15. To whom is the auditors report addressed? Why?
Auditors report is addressed to the members of Ipca laboratories ltd. to generate confidence
in the members of the company and the share holders at large.

16. List the main items on which the auditors report. Give details of three items that significantly affect
the financial statements.

Auditors report mainly on the following items:

Balance Sheet,

Statement of Profit and Loss

Cash Flow Statement

Accounting Policies

Other explanatory information.

Items that affect the financial statement:

Income statement summarizes revenue and expenses.

Cash flow summarizes cash receipts and cash payments.

Balance sheet lists a business's assets, liabilities and equity.

17. How much was the auditors remuneration? Give the detailed breakup of the same.

Auditors remuneration
As Statutory Audit
As Tax Auditors
For Certification
Out of Pocket expenses
Total

For the Year


For the Year
Ended 31st March, Ended 31st March,
2014 (in Rs.
2013 (in Rs.
Lakhs)
Lakhs)
34
34
6
7
8
6
3
53
45

18. Highlight the concerns raised by the auditors in their report. Give details of such items.

In the auditors opinion and to the best of their information and according to the
explanations given to the auditors, the financial statements give the information required by the

Companies Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2014;
(b) In the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flow for the year ended on that date.
They did not audit the financial statements of:
(a) Subsidiaries whose financial statements reflect total assets of 141.79 crores as at 31st March,
2014 and total revenue of 84.30 crores for the year then ended;
(b) Joint Venture whose financial statement reflect total assets of 16.02 crores as at 31st March,
2014 and total revenue of 15.27 crores for the year then ended, the Companys share of such joint
venture in the total asset being 7.85 crores and in the total revenue being 2.63 crores for the period
1st December, 2013 to 31st March, 2014

19. What are the companys major items of revenues? How these items have changed in percentage
terms as compared to the previous financial year?

Domestic Branded Formulations - Therapeutic Contribution


Therapeutic segment
2013-14
Non steroidal anti-inflammatory drugs (NSAID)
35%
Cardiovasculars & Anti-diabetics
24%
Anti-malarials
14%
Anti-bacterials
6%
Gastro Intestinal (G I) products
5%
Cough Preparations
4%
Dermatology
4%
Neuro Psychiatry
3%
Neutraceuticals
2%
Urology
1%
Others
2%
Total
100%

Therapeutic Group

Formulation Exports - Therapeutic Contribution


2013-14

2012-13
32%
25%
17%
6%
6%
5%
3%
3%
1%
1%
1%
100%

2012-13

Anti-malarials
Cardiovasculars & Anti-diabetics
Non steroidal Anti-inflammatory drugs (NSAID)
Anti-bacterials
Anthelmintics
Gastro Intestinal (G.I) products
Cough Preparations
Central Nervous System (CNS) products
Others
Total

35%
31%
17%
10%
3%
1%
1%
1%
1%
100%

37%
29%
17%
9%
4%
1%
1%
1%
1%
100%

Formulation Exports - Therapeutic Contribution

Branded Formulations Thera


20. State the revenue recognition policy of the company for sales revenue.
Revenue is recognised to the extent that it is probable that the economic benefits will
flow to the company and the revenue can be reliably measured.Revenue from sale of goods is
recognised when significant risks and rewards in respect of ownership of products are transferred to
the customers. Revenue from domestic sales is recognised on delivery of products to customers
from the factories of the company. Revenue from export sales is recognised when the significant
risks and rewards of ownership are transferred to the customers, which is based upon the terms of
the applicable contract. Revenue from product sales is stated exclusive of returns, sales tax and
applicable trade discounts and allowances.

21.

Identify the sources of companys gains and other non-operating income. What is the

proportion of these items in relation to the total income and Net Profit After Tax?

Gains/Non-operating Income
Interest income
Dividend income from current investments
Net gain on foreign currency transactions and translations
Total Income
Net Profit After Tax
Proportion to Total Income
Proportion to Net Profit After Tax

2013-14
2012-13
13.17
8.54
0.01
1.31
72.10
63.28
3256.25
2797.08
477.37
331.39
0.026189
0.026145
0.178645
0.220676

22. Locate any references to accounting principles related to revenues in the financial statements
and related information. Write the details of the same.

The financial statements have been prepared in accordance with the generally accepted
accounting principles in India under the historical cost convention on an accrual basis to comply in
all material respects with the notified Accounting Standards by the Companies (Accounting
Standards) Rules, 2006, other pronouncements of the Institute of Chartered Accountants of India,
the relevant provisions of the Companies Act, 2013 and also the guidelines issued by the Securities
and Exchange Board of India (SEBI). The accounting policies have been consistently applied by the
Company and are consistent with those used in the previous year. The financial statements are
presented in Indian rupees.
23. When does the company recognize revenue from services? Why?
Service income is recognised as per the terms of the contracts with customers when the
related services are performed or the agreed milestones are achieved.
24. When does the company recognize dividend income? Why?
Dividend on shares held by the company is recognised when the right of the company to
receive the same is established.
25. What are the major items of expenses? How these items have changed in percentage terms as
compared to the previous financial year?

Cost of materials consumed


Employee benefit Expenses
Tax Expense

2013-14

2012-13

% change

1097.51
477.86
151.72

1044.75
376.57
129.98

5.05 %
26.89%
16.72%

26. Identify the companys losses and other non-operating expenses. What is the proportion of these
items in relation to the total expenses and Net Profit After Tax?
Source of companys gains is Sales of goods,sales of service. Proportion of these items in
relation to the total income and Net Profit After Tax is 0.99.
27. What was the total amount spent on employees? What is the percentage change in this amount
as compared to the previous year?

The total amount spent on employees was 477.86 crores for the year 2013-14.
Percentage change in this amount as compared to 2012-13 is 26.89%.

28. How much did the company spend on advertising, sales promotion and general marketing?
What is the proportion of these items in relation to the total expenses, Net Profit After Tax and sales
Revenues?
The company spent 107.22 crores on sales promotion,marketing. Proportion of these
items related to total expenses is 0.04 i.e. 4%. Proportion of these items related to Net Profit after
Tax is 0.22 i.e. 22.46%.Proportion of these items related to sales revenue is 0.032 i.e 3.2 %.
29. What is the absolute amount and proportion of finance costs to the total revenues? What is the
change in this absolute amount and proportion as compared to the previous year?
Absolute amount of financial costs is 24.58 crores. Proportion of finance costs to total
revenues is 0.0075. Change in absolute amount as compared to previous year is -21.47%. Change in
proportion as compared to previous year is -31%.
30. Identify the top three weighing expense-heads in relation to the sales revenues.What are the
accounting policies pertaining to these three heads of expenses?
The top three weighing expense-heads in relation to the sales revenues are cost of
material consumed,employee benefit expenses,power fuel and water charges.
Employee Benefits:
i) Retirement benefit in the form of provident fund is a defined contribution scheme and
contributions are charged to the Statement of Profit and Loss for the year/period when the
contributions are due.
ii) Gratuity being a defined benefit obligation is provided on the basis of an actuarial valuation
made at the end of each year/period using the projected unit credit method.
iii) Leave encashment is recognised on the basis of an actuarial valuation made at the end of each
year.
iv) Actuarial gains/losses are immediately taken to Statement of Profit and Loss and are not
deferred.

v) Leave Travel Assistance (LTA) liability has been provided on the basis of actual accumulated
obligation.
Cost of raw materials consumed
Cost is determined as given below:
Raw Materials and PackingMaterialsa) At Cost net of CENVAT/VAT computed on First-in-First-out method.
b) API produced for captive consumption are valued at cost.
Work-in-process and Finished Goods- At cost including material cost net of CENVAT, labour cost
and all overheads other than selling and distribution overheads. Excise duty is considered as cost for
finished goods wherever applicable.
Stores and Spares - Stores and spare parts are valued at purchase cost computed on First-in-First-out
method.
31.

What is the percentage of depreciation/amortization expense in relation to the gross block

value of the fixed assets and total expenses? What is the depreciation method and accounting
estimates involved in charging depreciation in fixed assets?
Percentage of depreciation expense in relation to the gross block value of the fixed assets
and total expenses is 2.44 %. Depreciation on fixed assets of the Company is charged on straight
line method over the useful life of assets estimated by the management.
Assets
Leasehold Land
Buildings
Plant and Machinery and R&D Equipments
Computers
Furniture and Fixtures
Vehicles
Leasehold Improvements

Estimated useful life (Years)


Period of Lease
28 to 58
9 to 20
6
10
6
Period of Lease

32. List three assets having highest proportion in the total assets of the company.Write their
percentage weight in the total assets.
Following assets have the highest proportion;
1. Plant and machinery -1135.07 crores , % weight in total assets = 35.28%
2. Inventories -838.20 crores , % weight in total assets = 26.05%
3. Trade receivables- 448.49 crores , % weight in total assets =13.94%

33. How does the company measure its fixed assets? What is the amount of fixed assets purchased
during the year? What is the proportion in total assets? Is this proportion significant? Why?
Tangible / Intangible assets are recorded at cost of acquisition or construction. Cost of
acquisition comprises its purchase price including import duties and other non-refundable taxes or
levies and any directly attributable cost of bringing the asset to its working condition for its
intended use; any trade discount and rebates are deducted in arriving at the purchase price.
Revalued assets are recorded at revalued amounts.
Amount of fixed assets purchased during the year is 328.91crores. The proportion in
total assets is 21.57 %. Yes, the proportion is significant because fixed assets form a major
proportion of assets.
34. What is the amount of fixed assets sold/discarded during the year? What is its proportion in the
total assets? Is this proportion significant? Why?
The amount of fixed assets sold/discarded during the year is 5.38 crore. The proportion
in total assets is 0.004. This proportion is not significant as it accounts to just 0.4% of total assets.
35. What is the amount of capital work in progress finished and transformed to the fixed assets
during the year?
The amount of capital work in progress finished and transformed to the fixed assets
during the year is 41.48 crores.
36. What is the proportion of intangible assets in the total assets of the company? How does the
company measure intangible assets? Give two examples of the companys intangible assets.
Proportion of intangible assets in the total assets of the company is 2.09%. Examples
of the companys intangible assets are Goodwill, Software and Know how. Intangible Assets are
recorded at cost of acquisition or construction.
37. What is the proportion of long term investments in the total assets? What is the change in this
proportion compared to previous year?
Proportion of long term investment in the total assets is 0.0131. The change in this
proportion compared to previous year is 0.0008.

38. List three most significant investments venues. What is the book value and market value of
these investments?
Three most significant investments venues are:
1. Ipca Pharmaceuticals, Inc. USA ; face value- no par value
2. Trophic Wellness Pvt. Ltd.
; Face value- Rs 10.
3. Ipca Laboratories (U.K.) Ltd. U.K. ; face value- STG 1
39. What is the proportion of investments in subsidiary companies in the total investments? Is there
any change in the amount of investment in subsidiary companies as compared to previous year?
Proportion of investment in subsidiary companies is 51.37%. Yes, there is a
change.In 2012-13,the proportion was 62.69%.
40. What is the proportion of current assets in the total assets? What is the change in this proportion
compared to previous year?
Proportion of current assets in the total assets is 0.49 (49.22%). Change in this
proportion compare to previous year is -1.90 %.
41. What is the proportion of cash in total assets? What is the change in this proportion compared
to previous year? Is there any cash in transit? How much?
Proportion of cash in the total assets is 0.02. Change in this proportion compare to
previous year is 0.00136.
42. What is the proportion of accounts receivables in relation to the credit sales of the company?
What percentage of the companys receivables is classified as doubtful? What is the change in this
proportion compared to previous year?
Percentage of the companys receivables is classified as doubtful is 0.02%. There
were no receivables classified as doubtful in 2013.

43. What percentage of the companys receivables is due for more than six months? What is the
change in this proportion compared to previous year?
Percentage of the companys receivables is due for more than six months is
2.84%. The change in this proportion compared to previous year 0.26.
44. What is the proportion of inventories in the total assets? What is the change in this proportion
compared to previous year?
Proportion of inventories in the total assets is 0.26 (26.05 %).
Change in this proportion compared to previous year is -0.01.
45. How does the company measure its inventories? Is there any change in the inventory
measurement as compared to previous year? If yes, give details.
Raw Materials and Packing Materials:
a) At Cost net of CENVAT/VAT computed on First-in-First-out method.
b) API produced for captive consumption is valued at cost.
Work-in-process and Finished Goods:
At cost including material cost net of CENVAT, labour cost and all overheads
other than selling and distribution overheads. Excise duty is considered as cost for finished goods
wherever applicable.
Stores and Spares:
Stores and spare parts are valued at purchase cost computed on First-in-Firstout method. No, there is no change.
46. What is the absolute amount and proportion in relation to sales revenue of raw materials
consumed during the year? What is the change in such amount and proportion as compared to
previous year?

Raw material
Total sales
Proportion

2013-14
333.16
3,181.76
0.10470

2012-13
301.52
2,738.82
0.11009

Absolute amount of raw materials has increased in one year but sales increased more
so the proportion value has dropped over the year
47. What is the amount of short term investment? What is the percentage change in short term
investment as compared to previous year? How does the company measure short term investment?
List three venues of short term investments for the company.
Short term investment is 0.15 crore. Percentage change in short term investment as
compared to previous year is 0. Short term Investments are stated at cost or fair value whichever is
lower. Short term investment was made in Aurobindo Pharma Ltd.
48. What is the proportion of current liabilities in total liabilities? What is the change in proportion
as compared to previous year ?
The proportion of current liabilities in total liabilities is 0.63. The change in
proportion as compared to previous year is 0.077.
49. List three most significant current liabilities. What is the percentage change in these current
liabilities as compared to previous year?
Three most significant current liabilities are: Trade payables (337.36), Short term
borrowings (137.96), current maturities of non-current liabilities (164.42). Percentage change in
these liabilities as compared to previous year is 27.08%, -12.2%, 75.72% respectively.
50. What is the proportion of trade payables in total liabilities? What is the change in this
proportion as compared to previous year?
The proportion of trade payables in total liabilities is 0.273. The change in this
proportion as compared to previous year is 0.039.
51. What is the companys contingent liability?
Contingent liabilities are liabilities that may be incurred by an entity depending on
the outcome of uncertain future event such as a court case. Contingent liability is 549.71 crores.

52. What is the proportion of long term liabilities in total liabilities? What is the change in this
proportion as compared to previous year? List three most significant source of long term liability.
The proportion of long term liabilities in total liabilities is 0.367. The change in this
proportion as compared to previous year is -0.080. Three most significant source of long term
liabilities are: long-term borrowings, deferred tax liabilities, long term provisions.
53. What is the proportion of share capital in the total liability? Is there any change in the amount
of share capital as compared to previous year? What is the source of this change?
Proportion of share capital in the total liability is 0.0078. No, there is no change.
54. What is the face value of the equity share? Has the company issued any shares for services or
non cash assets? If yes, give details.
Face value of equity shares is Rs. 2.00. No, company has not issued any shares for
services or non cash assets.
55. What is the proportion of reserves in total liabilities? What is the change in this proportion as
compared to previous year?
The proportion of reserves in total liabilities is 0.6081. The change in this
proportion as compared to previous year is 0.0285.
56. How much is the basic and Diluted EPS and dividend per share?
Basic EPS and Diluted EPS is same in this case. Basic EPS is Rs 37.83. Dividend
per share is Rs. 5.
57. Give details of three most significant items mentioned in Corporate Governance Report.
The report on corporate governance briefly explains companys philosophy
towards corporate governance, information about the current board of directors and code of conduct
for directors, gives dates on which board meetings were held, and also tells us about the
composition and category of the board of directors who attended the meetings.

1. Companys philosophy of Corporate Governance is to ensure:


i) That the Board and top management of the Company are fully appraised of the affairs of the
Company that is aimed at assisting them in the efficient conduct of the Companys business so as to
meet Companys obligation to the stakeholders.
ii) That the Board exercises its fiduciary responsibilities towards shareholders and creditors so as to
ensure high accountability.
iii) That all disclosure of information to present and potential investors is maximised.
iv)That the decision making process in the organisation is transparent and are backed by
documentary evidences.
2. Board of Directors:
This point gives the details about the meeting held in the past and also describes
about each of the director. It also gives details about the work experience of the director, how many
meetings they have attended, how many companies they are handling as director.
3. Audit Committee:
This point gives the details about the Name of Members and Chairman of the audit
committee. Also throws light on Terms of Reference & Composition. The Audit Committee of the
Company currently comprises of Mr. Babulal Jain, Chairman of the Committee, Mr. Anand T.
Kusre, Dr. V. V. Subba Rao and Mr. Dev Parkash Yadava (appointed w.e.f 29th May, 2014), all
being Independent Directors with independent judgment in the deliberation and decisions of the
Board as well as Audit Committee and Mr. Prashant Godha, Executive Director. All members of the
Audit Committee have knowledge on financial matters and the Chairman of the Audit Committee is
a senior Chartered Accountant in practice having accounting and financial management expertise.
Dr. V. V. Subba Rao resigned as the member of the Board / Committees w.e.f. close of business
hours on 29th May, 2014.
58. Give details of three most significant items mentioned in Business Responsivity Report

59. Give details of three most significant items mentioned in Corporate Social Responsibility
Report.

The Company is committed to good corporate citizenship. As a part of its


corporate social responsibility, the Company continues to undertake a range of activities in respect
of healthcare and education to improve living conditions of people living in the neighbourhood of
its manufacturing facilities. During the year under report, the Company has also supported
healthcare and educational projects undertaken by charitable institutions and organizations. The
Company considers safety, environment and health as the management responsibility. Regular
employee training programmes are carried out in the manufacturing facilities on safety and
environment.
60. Give details of three most significant items mentioned in MDA.
The three most significant items mentioned in the management discussion analysis
are:
a) Industry Structure and Development:
The global pharmaceutical market is now estimated to be US $960 billion and is
growing at a rate of about 3% per annum. US, Japan and Europe constitute about 75% of the global
pharmaceutical market and are growing at a slower annual rate mainly due to loss of exclusivity,
lesser new product approvals and price erosions due to generics competition.
In contrast, pharmaceutical market of emerging economies like India are growing
at a much faster rate of 10% 12% per annum driven by improved per capita income, increased
access and rising awareness of modern medicines and strengthening of healthcare infrastructure.
Out of the global pharmaceutical market, generic formulations contribute about US$ 150 billion and
are growing at about 8% per annum. US is the largest market contributing 45% and Canada, Japan
and Europe collectively contributing another 35% of the world generic formulation business.
b) Outlook, Risks and Concerns:
Though in the world pharmaceutical market, India has a negligible share by value,
India is recognized as one of the leading global players with large number of drug master files and
dossier registrations for Active Pharmaceutical Ingredients (APIs) and formulations with
manufacturing facilities approved by regulatory authorities of the various countries.
Indian companies are focusing on global generic and API business, R & D activities
and contract research and manufacturing alliances. India is also fast emerging as a preferred
pharmaceuticals manufacturing location.

Several large selling drugs going off patent over next few years and increasing use
of pharmaceutical generics in developed markets to reduce healthcare cost will provide attractive
growth opportunities to generics manufacturers and thus Indian pharmaceutical industry is poised
for an accelerated growth in the coming years.
However, poor public healthcare funding and infrastructure, low per capita
consumption of medicines in developing and under developed countries including India, currency
fluctuations, inflation and resultant all round increase in input costs are few causes of concern.
c) Financial Performance and Operations Review:
The Company had another successful financial year with a net total income of Rs.
3256.25 crores as against Rs. 2797.08 crores in the previous year, a growth of 16%. The Company's
focus on formulations business resulted into increase in overall formulation sales to Rs. 2416.99
crores, an increase of 17% over previous year formulations sales of Rs. 2072.28 crores. The
Company further expanded its coverage with introduction of new formulations, both in the domestic
and export markets, especially in the fast growing life style related therapeutic segments. The
Active Pharmaceutical Ingredient (API) business also increased by 15% to Rs. 764.77 crores.
During the financial year under report, the Earnings before interest, depreciation and foreign
exchange transactions / translation loss increased by 29% to Rs. 826.66 crores as against Rs. 639.95
crores in the previous financial year. The operations have resulted in a net profit of Rs. 477.37
crores during the financial year under report as against Rs. 331.39 crores in the previous financial
year, an increase of 44%. Due to steep depreciation of Indian Rupee visavis major currencies,
during the financial year under report, the Company incurred a foreign exchange
translations/transactions loss of Rs. 72.10 crores (previous year loss of Rs. 63.28 crores