A STUDY ON FINANCIAL PROFILE AND ANALYSIS OF FINANCIAL

STATEMENT OF JUBILANT LIFE SCIENCE LIMITED

Submitted as Summer Internship Project for the Partial Fulfillment of

the Degree of Masters in Business Administration

Under the Guidance of : Submitted By :

Alish Patel
1419MBA39
Dept. of MBA,SU

DEPARTMENT OF BUSINESS ADMINISTRATION

SAMBALPUR UNIVERSITY
Jyoti Vihar , Burla – 768019
Odisha

1
 DECLARATION

I do hereby declare that the report entitled as “A STUDY ON FINANCIAL

PROFILE AND ANALYSIS OF FINANCIAL STATEMENT OF JUBILANT
LIFE SCIENCE LIMITED” submitted to the Dept. of Business Administration,
Sambalpur University, is my own report and is not published anywhere
before.Its genuinely the true copy.

Alish Patel
1419MBA39 -2nd Semester
Dept. of MBA, Sambalpur University

2
3
 CHAPTER - 1

INTRODUCTION

4
Introduction :

“The Indian pharmaceutical & life science industry is a success story providing
employment for millions and ensuring the essentials drugs at affordable prices are
available to the vast population of this subcontinent”
--Richard Gerster

Life Science Industry in India :

The life science industry in India is the world’s largest supplier of drugs globally
by volume and eighth largest by value.
The Indian government started to encourage the growth of drug manufacturing
by Indian companies in the early 1960s and with the patent act in 1970. However
economics liberalization in 90s by the former Prime Minister P.V. Narsimha Rao
and the Finance Minister Dr. Manmohan Singh enabled the industry to become
what it today
The Indian life science industry witnessed consistent growth over the last three
decades and continuous to demonstrate a promising future. After the
liberalization in 1990s, domestic life science companies began expanding their
footprint and started focusing on development of new products and filling of
patents. The industry witnessed extensive expansion overseas as well primarily
driven through the pharmaceutical industry.

Indian life science and Pharmaceutical industry record in numbers

• Supplies over 50% global demand for various vaccines
• Supplies 40% of generic demand in US
• Supplies 25%of all medicines in UK
• Accounts for 20% of global exports in generics
• Indian pharmaceutical exports stood at USD 6.7 Billion in financial year
2020

5
Growth of the Industry :
Overall, the size of the Indian healthcare sector, one of the fastest growing sector
is expected to cross USD 133 Billon by 2022 by taken consideration to the recent
COVID-19 crisis. The Indian life science sector is expected to grow at a CAGR
of 22.4% in the near future, with the export estimates to reach the size of USD
20 Billion by 2020. The medical devices market is expected to grow to USD 55
Billion by 2020 in India.
In this Journey, the industry has achieved several successes and has contributed
significantly to the Indian economy and healthcare outcomes, in both India and
abroad. These Include:
■ Significant contributions to the Indian economy: The life sciences industry is
now the third-largest contributor to reducing India’s merchandise trade deficit.
The industry generates around USD 10 billion of trade surplus every year,
allowing it to neutralise around 4 to 5 per cent of total energy imports for India.
In addition, it also generates a significant number of jobs for India. Our estimates
indicate that around 2.5 million people are currently employed by the industry
(including some of the industries such as chemists, stockists, etc.).
■ Strong position in the global life sciences industry: India has also been able to
build a strong position across various segments of the market. In pharmaceuticals,
India is now the eighth largest country by value globally with one of the highest
growth rates. It has also been able to build a strong position in key markets such
as the US. In clinical trials, India continues to be one of the top 15 destinations
globally based on the number of trials conducted between 2003 and 2013.
■ Contributions in driving access and affordability: Indian industry has been a
driver for access and affordability in life sciences. Indian drugs are available at an
affordable price as compared to markets globally. Further, India is the primary
supplier of essential medicines for numerous diseases, helping save millions of
lives globally. India’s contribution extends to developed markets such as the US
as well, where through its position in the generics market, the industry is
significantly reducing healthcare spend.
■ World-class capabilities across the value chain: The life sciences industry has
also built strong capabilities across all parts of the value chain. In manufacturing,

6
India continues to have the highest number of FDA-approved formulation plants
outside the US. In R&D and regulatory, Indian industry has accounted for 32 %
of the ANDA (Abbreviated New Drug Applications) filings last year, second only
to the US at 44 percent. The industry is now also making some initial movement
in the innovation space.
Challenges That Industries Faces :
The journey so far has been a source of celebration, but the road ahead for the
industry is challenging. There are some positive aspects that brighten the horizon
(e.g., strengths that the industry can continue to leverage, and opportunities, if
tapped, that could help the industry grow), but new challenges and discontinuities
in the market continue to emerge. Three prominent challenges that the industry
faces:
■ Changing market dynamics: Changes in the market landscape are throwing up
new challenges for the industry. For instance, sources of growth in the market
continue to shift to areas where the industry does not have a strong presence
today (e.g., emerging markets, complex generics). Prices and margins continue to
be under pressure, driven by customer consolidation in developed markets and
evolving regulations in few emerging markets. The dynamics of doing business
are also undergoing a shift with the recent spate of mergers and acquisitions,
increase in importance of scale, and changes in regulatory guidelines, requiring
players to build new capabilities to succeed.
■ Dilution of some core drivers of success: Much of the credit for India’s success
historically goes to the advantages that India offered in terms of affordable costs,
reliability of supply, and its ability to release products rapidly in market. However,
the reality is shifting. Cost position is under threat with players in developed
markets becoming more competitive and players in developing markets moving
up the value chain. Indian players are facing an increasing number of quality
issues, especially for the US, which is affecting its supply reliability. Finally, recent
changes in the regulatory landscape are also affecting the ability of Indian players
to release products rapidly.
■ Gaps in the industry’s competitive ability: Changes in market dynamics are also
noticeable gaps in the industry’s competitiveness, which can have a considerable

7
impact on the industry’s ability to sustain its growth in the future. First, growing
dependence on imports for intermediates is a cause of concern. It could lead to
issues related to the availability of essential medicines in the country, impact the
cost position and first-to-file capability of Indian players. Second, India’s position
in the innovation space continues to be new driven by gaps across the innovation
ecosystem. Given that innovation could represent the next wave of growth for the
industry, a weak position in innovation would significantly impact growth outlook
for the industry.
These challenges can drag down an industry with immense potential. Our
estimates indicate that failing to address these issues could pull the growth rate
down to 8 to 10 per cent over the coming years, also impacting the industry’s
ability to serve the local market and maintain its hard-earned global position. It is,
therefore, important at this juncture for the industry and the government to come
together and align on a common vision that would help the industry unlock its full
potential.
Visions of the Industries :
In this context, we believe that the industry can aspire towards a vision of
“Expanding India’s global leadership and relevance, while driving domestic
access”. The industry can focus on these three goals to realise this visions.

8
By achieving this vision, the industry will continue making significant contribution
to the economy and healthcare outcomes
■ Sustained economic contribution : Under this vision, the industry will sustain its
growth trajectory of 11 to 12 percent and grow 7 to 8 times to a size of USD 190
billion to 200 billion by 2030. This growth will allow the industry to drive 5 to 6
times growth in trade balance contribution to around USD 55 billion to 60 billion
by 2030. This will help neutralise around 13 to 15 percent of the estimated
energy imports for India by 2030. The industry will also create nearly four
million new jobs for the country over the next 15 years.
■ Becoming the world’s largest and most reliable drug supplier : The Indian life
sciences industry can aspire to become the world’s largest supplier of drugs
globally by volume and third largest by value. This can be enabled by the
leadership position that the industry can secure in the US, and in other emerging
markets. Beyond value, the industry will also continue its contribution towards
saving millions of lives by maintaining the supply of essential medicines and
driving significant reduction in healthcare spend across major markets.
■ Providing every Indian access to high-quality, affordable drugs, and bringing the
latest drugs to India : The industry can work towards a goal of further deepening
drug penetration in the Indian market. We believe that by adopting innovative
models and government support, the industry can aspire to drive a 3–4 times
increase in the number of treated patients across disease areas. The industry can
also continue to play a crucial role in ensuring the availability of new upcoming
drugs to Indian patients.
■ Building a globally recognised position for India in the innovation space :
India could adopt an enterprise-led approach to drive innovation, given its strong
and dynamic local industry. Under this approach, we believe that the industry can
aspire to build a strong innovation pipeline, drive significant economic upside
(exports of around USD 16 billion to 18 billion by 2030), and deliver better
health outcomes for the country.
To achieve this vision, all the stakeholders have to act on their strengths and
provide an enabling environment for the industry to grow. In particular, we

9
believe that the industry could focus on six imperatives to enhance its
competitiveness, deepen penetration in existing and new markets, and drive a
common agenda to sustain growth:
■ Drive innovation at scale by making “smart” choices on the portfolio, building
new techno-commercial capabilities, and revamping the operating model (e.g.,
using new approaches such as adaptive trial design to optimise approach for
development)
■Expand presence in emerging markets through a focused approach and by
building a “global” supply chain and organization (e.g., focus to build 1-2 “home
markets” beyond India, re-configure the manufacturing network)
■Adopt innovative business models to enable deeper penetration and access to
drugs even in rural India (e.g., using technology to drive access and lower cost,
providing integrated care for patients)
■Upgrade quality systems and infrastructure, and enhance capabilities to maintain
India’s image of a reliable, high-quality pharmaceuticals supplier (e.g.,
preventative culture, capability building in the front-line )
■Build new-age capabilities to sustain cost and speed-to-market advantage even
across the newly emerging market segments (e.g., using automation and new
technology to lower costs; embedding Quality by Design (QbD) to ensure “first
time right” dossiers)
■Collaborate more meaningfully within the industry to support growth of the
industry (e.g., capability building of quality teams across players)

Action Can be Taken by Government :

The government could consider supporting this journey by creating a conducive
environment for the industry to undertake the above actions. In particular, the
government could look at four initiatives
■ Build an enabling regulatory environment to facilitate the “ease of doing
business” by providing clarity on guidelines in a few areas (e.g., clinical trials,
approval pathway for different product categories) .

10
■Help improve quality standards by strengthening the capacity/capability of
quality inspectors and harmonizing the quality framework with global guidelines .
■Ensure India’s self-sufficiency by helping enhance competitiveness of the local
API industry (e.g., by setting up a dedicated API/intermediate manufacturing
cluster with resource sharing and incentives) .
■Create a conducive environment for innovation by strengthening the local
talent/research base (e.g., by reviewing the curriculum in the top 10 to 12
academic institutes) and enhancing incentives for investments in R&D.

Growth Drivers :
• Pharmaceuticals
➢ Cost Efficiency (Manufacturing and R&D)
➢ Key manufacturing hub for generics
➢ Improving Government and regulatory policy framework as well as
investment environment
➢ Increased penetration of diagnostic facilities, chemists, health
insurance
• Medical Devices
➢ Demographic changes (Urbanization, Ageing population, Lifestyle
changes)
➢ Focus on R&D (Dedicated medical device labs & parks, ICMED-
indigenous quality assurance system for medical devices)
➢ Regulatory changes (100% FDI, Make in India, Patent Laws,
Favourable business environment , price control)
➢ Increased insurance coverage and penetration
• HealthCare
➢ Rising income, Ageing population, access in better healthcare
services
➢ Medical tourism
➢ Improved healthcare infrastructure, FDI
➢ Government healthcare schemes

11
SWOT Analysis:
SWOT analysis is a strategic planning tool used to evaluate the strengths,
weaknesses involved in a project or in a business venture or in any other situation
of an organization or individual requiring a decision in pursuit of an objective.
An analysis of Indian life science component would serve as an example to
diagnose the strengths, weakness for drugmakers, The SWOT analysis was
performed based on secondary data sources such as industry reports and research
paper journals.
Strengths:

• Evolving Industry : Pharmaceutical industry is booming as demand for

growth of drugs consumption each day with rising population growth. It
generates new job opportunities and adds value to the employees and
generates revenue for the country.
• Growth shifting to Asian market : With growing economy and rising
disposable income, the Asian markets are in the target of pharmaceutical
industries. Even when The European and American market have demands
for drug or any life science ingredient, the components manufacturing is
outsourced from Asian market.
• Contributions in driving access and affordability: Indian industry has been
a driver for access and affordability in life sciences. Indian drugs are
available at an affordable price as compared to markets globally. Further,
India is the primary supplier of essential medicines for numerous diseases,
helping save millions of lives globally. India’s contribution extends to
developed markets such as the US as well, where through its position in the
generics market, the industry is significantly reducing healthcare spend.

Weakness:

• Product Liability & Product Recall :Product Liability would trigger if a

defective product caused bodily injury or property damage to a third party.
Pharmaceutical product liability defects would be categorized as
manufacturing defects, design defects or labeling / failure to warn defects.

12
 A product liability case for a life sciences company could involve
defectively manufactured drugs or medical devices, design defects with a
medical device, inaccurate warning labels or defective marketing of drugs
or medical devices and so on.

Product Recall is a growing risk area for life sciences companies. Not only
have the recalls increased in quantum, they have also become very
complex and have the potential to cause serious financial and reputational
loss to pharmaceutical companies. A recall incident would involve
removing or recalling the entire contaminated batch of products from the
market, re-manufacturing the products to replace the defective batch,
potential interruption of business and a loss of profit. Large recall incidents
result in liquidated damages, including, but not restricted to, delayed
deliveries, loss of market share and loss of reputation.
• Business Interruption :In the event of physical damage to an asset of a
pharmaceutical manufacturing facility or business operation insured under
a policy, there is a likelihood of a disruption of production or business
operations, which may result in a loss of revenue and profit. While a
property damage policy will cover the physical damage to the asset, it is
very important to insure the loss of profit arising out of the temporary
shutdown of production or business operations. Even in situations where
the business isn’t generating revenue or cash flow, the organisation will still
incur fixed costs (or standing charges) to keep the business running. This is
where a business interruption policy steps in to prevent the organisation’s
potential loss of profit or fixed cost arising as a consequence of an insured
loss. The intent of the business interruption policy is to protect the profits
and cash flows of the business.

Besides the traditional loss of profit cover, the key forms of Business
Interruption that are relevant for life sciences companies are Contingent
Business Interruption, Inter-dependent Business Interruption, Non-
Damage Business Interruption and Increased & Additional Increased Cost
of Working.

13
 • Supply Chain :As Indian life sciences companies have grown and
expanded overseas, their supply chain risks have not only become complex
but also very critical. There are risks associated at every stage, starting from
the supply of raw materials to all stages of manufacturing, and then to the
final packaging and storage of finished products till the delivery to the end
customer.

Hence, it has become imperative for life sciences companies to manage

supply chain risks effectively. While some losses can be transferred to
insurance, there would be consequential risks associated with delayed
deliveries and loss of market share, which will lie uninsured on the balance
sheet of the organisation. The overseas expansion of Indian life sciences
companies has made it necessary for companies to invest in supply chain
management solutions to address a wide spectrum of risks associated with
different geographies, legs of transit and regulatory requirements.

• Low investment in innovation R&D continue to be a major weakness of

Indian pharmaceutical industry.
• Strong pricing regulations affecting the profitability of pharma companies.
• Poor all rounder infrastructure is a mojor challenge.
• Presence of more unorganized players versus the organized ones, the
resulting in an increasingly competitive environment, characterized by stiff
price competition.

Opportunities :

• Global demand for generics risings.

• Increasing in per capita income
• Increasing health insurance sector
• Increasing population with more sedentary lifestyle.
• Significant investments from MNCs.
• Cheap, Diverse clinical trials
• Global outsourcing hub due to low cost of skilled labor.

14
Threats :

• Other low cost countries affecting demand.

• Government regulations changing
• Expanding of drugs price control order
• Lack of investment in infrastructure
• Wage inflation
• R&D restricted by lack of animal testing.
• Counterfeiting threats

Objectives of the study :

➢ To show a true and fair view of financial results of business.
➢ To show a true financial position of the business.
➢ To help to the all stakeholders of business.
➢ To estimate a future growth of business.
➢ To help for deep financial analysis.

Needs of the study :

Financial statement analysis is used to identified the trends and relationships
between financial statements items. Both internal management and external users
(such as analysts, creditors and investors) of the financial statements need to
evaluate a company’s profitability, liquidity and solvency. The most common
methods used for financial statement analysis are trend analysis, common size
statement and ratio analysis. These methods include calculations and
comparisons of the results to historical company data, competitors or industry
averages to determine the relative strength and performance of the company
being analysed.

15
Scopes of the study :
The study entitled “A STUDY ON FINANCIAL PROFILE AND ANALYSIS
OF FINANCIAL STATEMENT OF JUBILANT LIFE SCIENCE LIMITED”
is to analyze the financial performance of JUBILANT LIFE SCIENCE PVT.
LIMITED for the last 5 years.
The study is based on the financial position of the firm by using Ratio analysis
and comparative statements. Financial statement helps the management to anlyze
the profit, solvency, liquidity and efficiency etc. This analysis will give the exact
picture of the company. These studies will also help the management to take
managerial decisions. These studies helps the management to understand the
new possibilities.
The study helps us to conduct researches in financial areas and it also helps us for
taking financial decisions in personal life.
Limitations of the study :
➢ The study based on historical data, so it cannot be reliable.
➢ The study has been carried out for the period of five years and it is not
sufficient enough to analyze the entire aspect of the company.
➢ The result of study cannot be generalized for other organization and we
cannot predict future financial position of the company based on the study.
➢ Changes the book keeping procedures by a firm may often mislead the
financial analysis. The changes in the price level is not considered in the
study.

16
 CHAPTER – 2

COMPANY PROFILE

17
Company Profile:
Jubilant Life Sciences Limited is an integrated global pharmaceutical and life
sciences company engaged in pharmaceuticals, life science ingredients, drug
discovery solutions and India branded pharmaceuticals. The company was
founded in the year 1978. Currently there are 11 manufacturing facilities all over
world (7 in India, 2 in Canada and 2 in USA) and employs over 8000
multicultural people. The turnover of the company for the financial year 2019-20
was US $1923 Mn* around INR 9154 Crs in Indian rupees. The company is
headquartered in Bengaluru, India.

2.1 Visions:
Expanding leadership in our business through people, keeping pace with market
trends and technology.

2.2 Missions:
To make JUBILANT LIFE SCIENCES a synonym for world class organization
excelling in pharmaceutical market.

18
2.3 Values:
• Simplicity – Low profile externally and effective communication in
organization.
• Teamwork – With defined responsibility and accountability.
• Trust amongst people – Relationship with defined responsibility and
accountability.
• Customer focus – Top priority and prompt & appropriate response.
• Meeting commitment – Respect and care for all those associated.Integrity &
Ethics by having the conscience to be honest and sincere , resulting in
appropriate conduct without being overseen
• Ownership & Commitment by feeling a sense of accountability towards all
tasks undertaken and taking complete responsibility for the outcomes
• Respect & Teamwork by fostering trust among people and an appreciation for
diversity of ideas , thereby harnessing the potential of individuals and
channeling it to accomplish greater group goal
• Customer trust & Delight by meeting commitments, being sensitive to
customer needs and addressing matters with clarity and speed.
• Safe & Green by being, in all our actions, a conscientious corporate citizen
that prioritizes the safety of its people, protects the environment and
contributes to the wellbeing of society

2.4 Quality Policy:

The policy of JUBILANT LIFE SCIENCES is to achieve Total Customer

Satisfaction by delivering products and providing services that meet or exceed
their exacting requirements and expectations and to do so, on time at most
competitive prices in domestic and export market for our entire product range.

2.5 Environment/Health/Safety Policy:

Jubilant commits:
• To develop and maintain an Environment Health and Safety Management
System.

19
• Meet all applicable legislations, regulations and customer requirements.
• Conserve natural resources and energy.
• Minimize/ prevent air, noise, water, land pollution generation.
• Maintain a system for hazardous waste management.
Establish health and safety programmes to prevent ill health, injury and other
safety risk.
2.6 Promises

2.7 Business Units:

I)Life science Ingredients:
The Life Science Ingredients (LSI) business of Jubilant Life Sciences offers a
broad portfolio of high quality ingredients that find application in wide range of
industries. The LSI business’s portfolio also extends to custom research and
manufacturing for pharmaceutical and agrochemical customers on an exclusive
basis.

20
Jubilant are driven by the motive to add value to millions of lives through
innovations and cutting-edge technology. As a leader in key products we
manufacture, Jubilant take pride in being a partner of choice for our valued
customers

Industry Applications-Below are some of the key industries where the Life
Science Ingredients business provides solutions for worldwide customers

• Pharma:

Jubilant Life Sciences has a strong portfolio of bulk and fine Ingredients
that are used as intermediates in more than 280 APIs of various
therapeutic segments. Jubilant is a partner of choice to the top
pharmaceutical customers.

Jubilant being fully backward integrated in most of these products provides

cost effective, reliable and long term sustainable solutions to all its valuable
consumer.

• Human Nutritions:
Jubilant Life Sciences is a leading supplier of select range of vitamins, trace
mineral complexes and food flavouring agent built on a strong integrated
business model.

21
 In vitamins, Jubilant has a dominant global standing being the 2nd largest
producer of Vitamin B3 (Niacinamide and Niacin). It is extensively used in
dietary food supplements, enrichment of breakfast cereals and flour,
beverages and energy drinks, infant formulas, baking and confectionary.

• Animal Nutritions:

Jubilant Life Sciences is a leading provider of nutritional solutions for

Poultry, Dairy, Aqua farming & pet food industry. In feed vitamins,
Jubilant has a dominant global standing being the 2nd largest producer of
Vitamin B3 (Niacinamide and Niacin). Jubilant is also India’s largest
producer of Vitamin B4 (Choline Chloride).

In feed specialties and premixes, Jubilant offers a range of performance

enhancement and disease prevention products for integrators, feed millers,
and commercial farmers, thus helping them to continuously increase their
returns on investments.

A strong integrated business model, marketing foot print, backed by own

R&D products and strong partnerships make Jubilant’s Animal Nutrition
products widely acceptable in Poultry, Dairy, Pet Food and Veterinary
Drugs industry. The manufacturing facilities of Jubilant meet global
standards and are certified for major regulatory certifications such as
KOSHER, HALAL, FAMI-QS and cGMP regulations.

• Personal and Customer Care:

Jubilant Life Sciences has a niche portfolio of multi-purpose ingredients

having broad spectrum applications like anti-microbial action, skin barrier
function, anti-aging and wrinkle reduction to name a few.

These are widely used in anti-aging and acne skin care creams, hair care-
shampoos, conditioners and coloring treatments, Face and body
moisturizers, toiletries, toothpaste and eye creams.

22
 • Agro Chemicals:

Jubilant Life Sciences has a strong portfolio of key advance intermediates

and agro actives for Crop Science application. With established expertise
in the area of Pyridines that are extensively used in Herbicides, we also
now have integrated offerings of crop science products that are
intermediates and actives used across insecticides, fungicides , herbicides
and plant growth regulators.

Jubilant being fully backward integrated in most of these products provides

cost effective, reliable and long term sustainable solutions to all its valuable
customers.

• Other Industrial Uses:

Jubilant Life Sciences has a broad range of intermediates used as

reactants, solvents and catalysts - across several industries– electronic,
paints and coatings, sealants, adhesives, packaging, textiles, grouts and
patching compounds.

II)Pharmaceuticals:
Jubilant Pharma Limited is a global integrated pharmaceutical company offering a
wide range of products and services to customers across geographies.

• Radio Pharma:
Jubilant Radiopharma is an industry leading pharmaceutical company
specializing in Nuclear Medicine focused on developing, manufacturing,
commercializing and distributing high quality and sustainable diagnostic
and therapeutic agents for the sole purpose of IMPROVING LIVES
THROUGH NUCLEAR MEDICINE™ on a global scale. Nearly a
thousand strong and growing, the business consists of two distinct divisions;
The Radiopharmaceuticals Division and the Radiopharmacies Division.

23
Radiopharmaceuticals Division:

Jubilant’s Radiopharmaceuticals Division has a solid foundation in

developing, manufacturing and commercializing radiopharmaceuticals
used for the diagnosis and treatment of various diseases. Jubilant
continuously invest in the development of generic and new novel
diagnostic and therapeutic radiopharmaceuticals, which will enable early
and accurate diagnosis and treatment of disease leading to better patient
outcomes.

Market Leading Products:

Jubilant serve markets across the globe and are the industry market leaders
in North America. Clinical applications include diagnostic imaging for
cardiology, oncology, pulmonary, renal, neurology, thyroid and bone, as
well as radiotherapy for thyroid cancer. Their approved products include:

>RUBY-FILL® (Rubidium Rb82 Generator) (PET Myocardial Perfusion)

>HICON® Sodium Iodine I 131 Solution USP (Thyroid Radiotherapy)
>DRAXIMAGE® I-131 Diagnostic Capsules (Thyroid Diagnostic)
>SMART-FILL® (Proprietary I-131 Dispensing System)

24
 >Lyophilized kits:
1-MDP/MDP-25 (Bone imaging)
2-MAA (Lung imaging)
3-DTPA (Lung and kidney imaging)
4-Sestamibi (Cardiac imaging)
5-Gluceptate (Kidney, Brain imaging and Red Blood Cell labeling )

• Allergy Therapy Products:

Jubilant provides allergy therapy products to the allergy specialty industry

with a product offering range of over 200 different allergenic extracts and
standard allergy vaccine mixtures as well as six different insect venom
products for the treatment of allergies to insect stings.

Jubilant produce and market several products under the "HollisterStier"

brand and are among the top three players in the allergenic extract market
in the United States. Currently, Jubilant is the sole producer and supplier
of venom products for the treatment of allergies in the United States.
Jubilant have more than 200 allergenic extracts and mixes, and a line of
specialized skin test devices in the market. Jubilant market vital products
such as allergenic extracts and venom extracts in Canada, Europe,
Australia, and New Zealand through distributors

25
 Over the years, Jubilant have expanded customer base to include allergists,
primary care physicians, ENT doctors and clinics, hospitals, and
pharmacies in the USA, Australia, Canada, and many other international
markets. To simplify the treatment procedure, Jubilant provide
customized patient prescriptions to customers. Innovation is a tradition at
Jubilant Pharma, and Jubilant’s continuous focus equips jubilant with the
capability to offer healthcare providers with important treatment options to
patients suffering from the effects of allergies.

• Contract Manufacturing:

Jubilant HollisterStier is an integrated contract manufacturer of sterile

injectables, ophthalmics, otics, and ointments (sterile and non-sterile),
creams and liquids. Jubilant’s facilities in North America provide
specialized manufacturing for the pharmaceutical and biopharmaceutical
industries.

Jubilant provide a full-range of support and services to streamline the

manufacturing process such as on-site assistance from process
qualifications through product release. Jubilant offer turn-key services
including full testing, regulatory support, supply chain support, secondary
packaging, cold chain management, stability, CMC support and
serialization.

Spokane, Washington, USA facility offers sterile manufacturing services

for Clinical through commercial liquid and lyophilized vials.

Kirkland, Montreal, Canada facility has an array of sterile manufacturing

services for vials and lyophilized products, ampoules, ophthalmic and otic
solutions and emulsions filled into dropper tip bottles as well as sterile
ophthalmic ointments. In addition to sterile products, the facility has non-
sterile manufacturing services for ointments, creams, gels and liquid
products filled in tubes, bottles and pumps.

26
• Active Pharmaceutical Ingredients:

Jubilant is a preferred partner of choice across the globe for innovator and
generic pharmaceutical companies. Jubilant’s Active Pharmaceutical
Ingredients (API) business has a prominent presence in markets such as
North America, South America, Europe, Japan, Asia Pacific (APAC), and
the Middle East.

Jubilant offers one of the broadest portfolios comprising of more than 90

different APIs from various therapeutic categories such as CNS, CVS, anti-
infective and anti-diabetic.
➢ Proven expertise to operate large scale chemical operations, which is
key to better cost efficiencies
➢ Global leaders in Carbamazepine, Oxcarbazepine, Pinaverium,
Risperidone, Valsartan.
➢ Diversified & large external customer base to drive growth across
multiple regions
➢ Business sustainability & supply assurance from vertical integration
of key APIs
➢ Excellent compliance track record resulting from multiple
inspections by various regulatory bodies.

27
 ➢ World class API R&D team comprises of more than 150 synthesis
and analytical scientists including PhDs; Expertise in complex
chemistries such as Chiral separation, Low Temp reactions, Bio-
transformation, Stereo-selective synthesis, continuous flow reactions;
equipped with latest analytical instruments such as LC HRMS,
NMR, XRD, LCMS. Analytical expertise in polymorphic
characterization and contamination, Genetoxic and Carry over
studies, Impurity profiling.
➢ Dedicated DoE/QbD cell for bringing quality and process
robustness during the product development.

• Generics

Jubilant is leading formulations player engaged in the development,

manufacture, sale, and distribution of proprietary generic pharmaceutical
products principally in the United States, and with a growing presence in
Europe, Canada, Japan, Australia and the rest of the world.

The generics business is vertically integrated into our APIs business and
emphasizes on manufacturing and sale of proprietary finished dosage
formulations including CVS, CNS, GI, anti-inflammatory and anti-allergy
categories.

28
 Overview
➢ Multiple dosage form / containment capabilities
o Immediate release oral solids
o Modified release oral solids
o Steroids
o Oral powder for solution/suspension (POS)
o Potential for liquids, ointments, powders, opthalmic and injectables
o Experience in developing formulations for veterinary business
➢ A leading formulations player – development, manufacture and sale of
proprietary dosage formulations.
➢ Creating differential dosage forms with MUPS based products, ODT,
chewable tablets Powder For Oral Suspension, etc.
➢ Capability of product development for various geographies like USA, EU,
Canada, Japan, China, Australia, Brazil, and ROW Markets.
➢ In-house BA BE unit inspected by USFDA and other key regulatory
agencies.
➢ In the United States market, since we commenced operations through to
December 31, 2019, we have made a total of 98 ANDA filings for solid
dosage formulations, of which 36 are pending approval.
➢ As at December 2019, we had 56 commercialized generic solid dosage
formulations products across the United States, Europe, Canada, Australia
and the rest of the world.
➢ One of the largest exporters of oral solid formulations to Japan.
➢ Our in-house API capability provides us stable source of API supply for
availability of these products at competitive prices.

III)Drug Discovery & Development Solution:

Jubilant Biosys - Contract Research Organization in India:

Jubilant Biosys Ltd is a part of the Jubilant Life Sciences family of companies with
R&D centers in India and business offices in Asia and North America. With our
global reach, Jubilant Biosys provides comprehensive drug discovery services and
contract research services - from target discovery to candidate selection and with
flexible business models (FFS, FTE and risk shared) - in partnership with leading
worldwide healthcare.

29
IV)Indian Branded Pharmaceuticals:
India Branded Pharmaceuticals (IBP) is an Indian venture of Jubilant Life
Sciences which primarily focus on products to treat medical conditions in the
field of Cardiology and Diabetology in the Indian Pharmaceutical Market. IBP
business is strongly dedicated to delivering high-quality & innovative medicines to
healthcare professionals and patients across the country.
Through its innovative marketing campaigns, IBP has delivered best in class
services to its stakeholders thereby providing the best quality products through a
robust distribution network.

IBP business stands committed to Jubilant corporate group’s promise of Caring,

sharing, growing.

30
 CHAPTER – 3

REVIEW OF LITERATURE

31
 The review of literature guides then researcher for getting better
understanding of methodology used, limitations of various available estimation
procedures and database, and lucid interpretation and reconciliation of the
conflicting results. Besides this, the review of empirical studies explores the
avenue for future and present research efforts related to the subject matters. In
case of conflicting and unexpected results, the research can take the advantages of
knowledge of their researchers simply through the medium of their published
works. A number of research studies have been carried out on different aspects of
financial appraisal by the researchers, economists and academicians in India and
abroad. Different author have analysed working Capital and financial
performance in different perspectives. A review of these analyses is important in
order to develop an approach that can be employed in the context of the study of
textile industry.

2.1.FINANCIAL PERFORMANCE ANALYSIS:-

1.Ray Sarbapriya (2012) studies the relationship between liquidity and profitability
in the manufacturing industry. The writer has taken as a sample 311
manufacturing firms for a period of 14 years, and studied the effect of different
variables of working capital management. In this study strong adverse relationship
between measures of working capital management and corporate profitability
have been observed. In the end insignificant negative relationship between firm
size and its net operating profit ratio was detected.

2. Kushalappas &Kunder Sharmila (2012) closely study the relationship between

working capital management policies and profitability of the thirteen listed
manufacturing firms in Ghana. At the end of the study, a significantly negative
relationship between profitability and accounts receivable days is found to exist.
Profitability is significantly positively influenced by the firm’s cash conversion
cycle (CCC), current assets ratio and current asset turnover. It is also suggested
that managers can create value for the shareholders by creating incentives to
reduce their accounts receivable to 30 days.
32
3. Turan M. S., BamalSucheta, VashistBabita and Turan Nidhi (2013) attempt to
examine the relationship between working capital management and profitability
by making an inter sector comparison of two manufacturing industries i.e.
Chemical industries and Pharmaceutical industries. 50 companies from each
sector based on market capitalization and listed on BSE and 500 indices were
selected for the research for the period from 2002 to 2011. At the end of the
analysis it was concluded that in spite of similar nature of both the industries in
the manufacturing sector, working capital management variables affect
profitability indices more strongly in the chemical industry than in the
pharmaceutical industry. It was also observed that both the industries have a
significant relationship between profitability and working capital management
variables. Besides, working capital management variables affect more strongly the
profitability indices of chemical industry than those of pharmaceutical industry.

4. Akoto Richard K., VitorDadson A. and Angmor Peter L. (2013) closely study
the relationship between working capital management policies and profitability of
the thirteen listed manufacturing firms in Ghana. At the end of the study, a
significantly negative relationship between profitability and accounts receivable
days is found to exist. Profitability is significantly positively influenced by the
firm‟s cash conversion cycle (CCC), current assets ratio and current asset
turnover. It is also suggested that managers can create value for the shareholders
by creating incentives to reduce their accounts receivable to 30 days.

5. Joseph Jisha (2014) closely examines the study of working capital management
in Ashok Leyland and points out that the liquidity and profitability position of the
company is not satisfactory, and needed to be strengthened in order to be able to
meet its obligations in time.

33
6. Madhavi K. (2014) makes an empirical study of the co-relation between
liquidity position and profitability of the paper mills in Andhra Pradesh. It has
been observed that inefficient working capital management makes a negative
impact on profitability and liquidity position of the paper mills.

7. Gurumurthy N. and Reddy Jayachandra K. (2014) have conducted a study on

the working capital management of four pharmaceutical companies APSPDCL,
APEPDCL, APNPDCL and APCPDCL and have come to the conclusion that
the existing system of working capital management was not up to the mark and
needed to be improved.

2.2. PREVIOUS REVIEW

Although working capital is the concern of all firms, it is the small firms that
should address this issue more seriously. Given their vulnerability to a fluctuation
in the level of working capital, they cannot afford to starve of cash. The study
undertaken by (Peel et al., 2000) revealed that small firms tend to have a relatively
high proportion of current assets, less liquidity, exhibit volatile cash flows, and a
high reliance on short-term debt.

The recent work of Howorth and Westhead (2003), suggest that small companies
tend to focus on some areas of working capital management where they can
expect to improve marginal returns. For small and growing businesses, an
efficient working capital management is a vital component of success and survival;
i.e both profitability and liquidity (Peel and Wilson, 1996). They further assert
that smaller firms should adopt formal working capital management routines in
order to reduce the probability of business closure, as well as to enhance business
performance. The study of Grablowsky (1976) and others have showed a
significant relationship between various success measures and the employment of
formal working capital policies and procedures. Managing cash flow and cash
conversion cycle is a critical component of overall financial management for all

34
firms, especially those who are capital constrained and more reliant on short-term
sources of finance (Walker and Petty, 1978; Deakins et al, 2001).

Given these peculiarities, Peel and Wilson (1996) have stressed the efficient
management of working capital, and more recently good credit management
practice as being pivotal to the health and performance of the small firm sector.
Along the same line, Berry et al (2002) finds that SMEs have not developed their
financial management practices to any great extent and they conclude that owner-
managers should be made aware of the importance and benefits that can accrue
from improved financial management practices. The study conducted by De
Chazal Du Mee (1998) revealed that 60% enterprises suffer from cash flow
problems. Narasimhan and Murty (2001) stress on the need for many industries
to improve their return on capital employed (ROCE) by focusing on some critical
areas such as cost containment, reducing investment in working capital and
improving working capital efficiency. The pioneer work of Shin and Soenen
(1998)

and the more recent study of Deloof (2003) have found a strong significant
relationship between the measures of WCM and corporate profitability. Their
findings suggest that managers can increase profitability by reducing the number
of day’s accounts receivable and inventories. This is particularly important for
small growing firms who need to finance increasing amounts of debtors.

Flash back almost three years ago, to the "technical" end of the Great Recession in
June of 2009. The depth of the financial crisis was just beginning to be felt, and
banks were tightening the reins on credit, which resulted in a credit crunch that
made it nearly impossible for many businesses to obtain the capital they needed
to grow, much less keep their operations going.

35
In this environment, cash conservation became the name of the game for many
CFOs. To try to squeeze more cash out of their supply chains, businesses focused
on tightening collection of receivables, stretching out their payables and reducing
inventory.

2.3. A DIFFERENT SCENARIO

Now, fast forward to today. According to the data revealed in the 2011 CFO/REL
Working Capital Scorecard, U.S. businesses are now flush with cash. As a result,
the emphasis on wringing every dollar out of working capital seems to have
dissipated somewhat.

For example, the scorecard revealed a paltry 2% decrease in days working capital
(DWC). Meanwhile, days sales outstanding (DSO) declined by just 0.1% and
days inventory outstanding (DIO) and days payable outstanding (DPO) both rose
by just 1.1%.

These modest improvements in working capital performance seem to indicate

that the emphasis by U.S. businesses has shifted from working capital
improvements to sales growth and profit enhancement. "The energy and focus
have now been placed much more on the profit-and-loss statement," noted Mark
Tennant, a principal with REL, which co-sponsored the research. "There isn't a
continuous focus on cash flow and working capital."

Meanwhile, business lending activity appears to be on the rise. Data recently

released by the FDIC reveals that overall commercial and industrial (C&I)
lending by banks increased during each of the five quarters preceding third-
quarter 2011 after declining steadily since early 2008. And the growth rate in
borrowing among small businesses (as measured by the Thomson
Reuters/PayNet Small Business Lending Index) increased by double digits over
the previous year for the 15th consecutive month in October, rising by 20 percent
after a 14 percent rise in September.
36
A NEW MINDSET ?

So, do improved corporate balance sheets, a brighter business lending picture

and an improving economy mean that CFOs should adopt a new mindset when it
comes to working capital management? My answer: Not necessarily. In fact,
statistics like those noted here could lead CFOs to adopt a false sense of security.

In the article posted on CFO.com reporting on the results of Working Capital

Scorecard, Stephen Payne, Americas leader of working capital advisory services at
Ernst & Young, stated that corporate balance sheets may not be nearly as
impervious as they seem. Despite an impressive recent comeback in corporate
productivity, high unemployment continues to plague the economy, Payne noted.
To produce sustainable growth, companies will "have to hire people and invest via
capex, and that's going to start depleting their cash hoards," he said.

I would add that, while there have been recent signs of improvement in the U.S.
economy, we're by no means out of the woods yet. While positive, economic
growth remains anemic, especially compared to most other post-recession
rebounds. And unemployment remains stubbornly high, despite some recent
improvements in the employment picture.

Finally, while the Small Business Lending Index points to positive signs for
business lending, more FDIC data paints a different long-term picture: The
overall volume of small business loans (defined as loans of $1 million or less) has
been shrinking since 2008 and was down 15 percent from its peak as of
September 30, 2011. There were just 1.5 million small business loans outstanding
at this time, the smallest number since 1999, according to the FDIC.

37
Now, contrast these figures with the latest Asset-Based Lending Index, which is
published quarterly by the Commercial Finance Association. There was a 1.5%
increase in total committed credit lines in the third quarter of 2011 from the
previous quarter, which was the fourth consecutive quarterly increase in asset-
based credit lines.

Total asset-based credit commitments grew by 5% compared to the third quarter

of 2010, and new commitments were up by more than 26%. Half of asset-based
lenders reported an increase in new credit commitments and 70% reported an
increase in total commitments, while utilization of asset-based lenders' credit lines
increased for the third consecutive quarter, to 40.5%.

UNCERTAINTY & OPPORTUNITY

The presidential election this November will probably add to, rather than subtract
from, the uncertainty that has plagued the economy since the financial crisis
began more than three years ago. Given this, CFOs would be wise not to get too
complacent about working capital management.

Meanwhile, this uncertainty could mean opportunity for asset-based lenders in

2012. If the economy continues to pick up steam, small business credit demand
will certainly rise. But many small businesses still won't qualify for bank financing,
making them good candidates for non-traditional and asset-based loans.

38
 CHAPTER – 4

RESEARCH DESIGN
&
METHODOLOGY

39
Research methodology is a way to systematically solve the research problem. It
may be understood as a science of studying now research is done systematically.
In that various steps, those are generally adopted by a researcher in studying his
problem along with the logic behind them.

The procedure by which researchers go about their work of describing,

explaining and predicting phenomenon are called methodology”.

TYPE OF RESEARCH:-

This project “A STUDY ON FINANCIAL PROFILE AND ANALYSIS OF

FINANCIAL STATEMENT OF JUBILANT LIFE SCIENCE LIMITED’’Is
considered as an analytical research.
Analytical Research is defined as the research in which, researcher has to use
facts or information already available, and analyze to make a critical evaluation of
the facts, figures, data or material.

SOURCES OF RESEARCH DATA:-

There are mainly two sources through which the data required for the research is
collected.

1)PRIMARY DATA

This consists of original information, which is collected first hand, and for first
time which is original in nature. It can be collected in following ways-

• Observation
• Focus group
• Survey

In the study the primary data has been collected from personal interaction with
finance manager and other staff members.

40
2)SECONDARY DATA :

Researchers usually start by gathering secondary data through the company’s

internal data base, which provides a good starting point. However, the company
can also tap a wide assortment of external information sources ranging from
company public and libraries to government business and publications.

The secondary data are those which have already collected and stored.
Secondary data easily get those secondary data from record, annual report of the
company etc. It will save time, money and efforts to collect the data.

The major sources of data for this project was collected,

• From the annual report maintained by the JUBILANT LIFESCIENCES.

• Data are collected from the JUBILANT LIFESCIENCES website.
• Books and journal pertaining to the topic.
• Some more information collected from internet.

SAMPLING DESIGN :

• Sampling unit: Financial statements

• Sampling size: last five years financial statements

Financial statement analysis:-

Financial statement analysis allows analysts to identify trends by comparing ratios

across multiple periods and statement types. These statements allow analysts to
measure liquidity, profitability, company-wide efficiency, and cash flow. There are
three main types of financial statements: the balance sheet, income statement and
cash flow statement. The balance sheet is a snapshot of the company's assets,
liabilities, and shareholders' equity at a specific period. Analysts use the balance
sheet to analyze trends in assets and debts. The income statement begins with
sales and ends with net income.

41
It also provides analysts with the gross profit, operating profit, and net profit.
Each of these is divided by sales to determine gross profit margin, operating profit
margin, and net profit margin, respectively. The cash flow statement provides an
overview of the company's cash flows from operating activities, investing activities,
and financing activities.

Each financial statement provides multiple years of data. Used together, analysts
track performance measures across financial statements using several different
methods for financial statement analysis, including vertical, horizontal, and ratio
analyses. An example of vertical analysis is when each line item on the financial
statement is listed as a percentage of another. Horizontal analysis compares line
items in each financial statement against previous time periods. In ratio analysis,
line items from one financial statement are compared with line items from
another. For example, many analysts like to know how many times a company
can pay off debt with current earnings. Analysts do this by dividing debt, which
comes from the balance sheet, by net income, which comes from the income
statement. Likewise, return on assets (ROA) and the return on equity (ROE)
compare company net income found on the income statement with assets and
stockholders' equity found on the balance sheet.

FINANCIAL RATIO ANALYSIS :-

When investors and analysts talk about fundamental or quantitative analysis, they
are usually referring to ratio analysis. Ratio analysis involves evaluating the
performance and financial health of a company by using data from the current
and historical financial statements.

The data retrieved from the statements is used to compare a company's

performance over time to assess whether the company is improving or
deteriorating, to compare a company's financial standing with the industry
average, or to compare a company to one or more other companies operating in
its sector to see how the company stacks up.

42
Ratio analysis can be used to establish a trend line for one company's results over
a large number of financial reporting periods. This can highlight company
changes that would not be evident if looking at a given ratio that represents just
one point in time.

Comparing a company to its peers or its industry averages is another useful

application for ratio analysis. Calculating one ratio for competitors in a given
industry and comparing across the set of companies can reveal both positive and
negative information.

Since companies in the same industry typically have similar capital structures and
investment in fixed assets, their ratios should be substantially the same. Different
ratio results could mean that one firm has a potential issue and is
underperforming the competition, but they could also mean that a certain
company is much better at generating profits than its peers. Many analysts use
ratios to review sectors, looking for the most and least valuable companies in the
group.

➢ Ratio analysis compares line-item data from a company's financial

statements to reveal insights regarding profitability, liquidity, operational
efficiency, and solvency.

➢ Ratio analysis can be used to look at trends over time for one company or
to compare companies within an industry or sector.

➢ While ratios offer several types of insight, other types of information and
analysis are usually needed to form a complete picture of a company's
financial position.

43
TYPES OF FINANCIAL RATIO:-

1. CURRENT RATIO :-

The current ratio is a liquidity ratio that measures a company's ability to pay
short-term obligations or those due within one year. It tells investors and analysts
how a company can maximize the current assets on its balance sheet to satisfy its
current debt and other payables.

To calculate the ratio, analysts compare a company's current assets to

its current liabilities. Current assets listed on a company's balance sheet include
cash, accounts receivable, inventory and other assets that are expected to be
liquidated or turned into cash in less than one year. Current liabilities include
accounts payable, wages, taxes payable, and the current portion of long-term debt.

Current Assets
Current Ratio = ———————————
Current Liabilities

A current ratio that is in line with the industry average or slightly higher is
generally considered acceptable. A current ratio that is lower than the industry
average may indicate a higher risk of distress or default. Similarly, if a company
has a very high current ratio compared to their peer group, it indicates that
management may not be using their assets efficiently.

2. QUICK RATIO :-

The quick ratio is an indicator of a company’s short-term liquidity position and

measures a company’s ability to meet its short-term obligations with its most
liquid assets. Since it indicates the company’s ability to instantly use its near-cash
assets (that is, assets that can be converted quickly to cash) to pay down its current
liabilities, it is also called the acid test ratio

44
 Quick Assets
Quick Ratio = ————————————
Current Liabilities

Quick Assets = Current Assets – (Inventories + Prepaid Expenses)

Locate each of the formula components on a company's balance sheet in

the current assets and current liabilities sections. Plug the corresponding balance
into the equation, and perform the calculation.

While calculating the quick ratio, double-check the constituents you're

using in the formula. The numerator of liquid assets should include the assets
that can be easily converted to cash in the short-term (within 90 days or so)
without compromising on their price. Inventory is not included in the quick ratio
because many companies, in order to sell through their inventory in 90 days or
less would have to apply steep discounts to incentivize customers to buy quickly.
Inventory includes raw materials, components, and finished products.

3. ABSOLUTE LIQUID RATIO :-

Absolute liquid ratio may be defined as the relationship between absolute

liquid assets and current liabilities .This ratio, also known as cash.

It is calculated by dividing the Absolute liquid assets by total of the current

liabilities.

Absolute liquid Assets

Absolute liquid Ratio = ———————————————
Current Liabilities

Absolute liquid assets are equal to liquid assets minus accounts receivable
and bills receivable. These assets usually include cash, cash equivalents, bank
balances and marketable securities etc.

45
4. INVENTORY TURNOVER RATIO :-

Inventory turnover ratio may be defined as the relationship between cost of

good sold and the amount of average inventory. This ratio, also known as stock
turnover ratio, it indicates the firm efficiency of the firm in producing and selling
its product

It is calculated by dividing the net sales by inventories.

Inventories x 365
Inventory Turnover Ratio = ———————————
Sales

5. CURRENT ASSETS TO NET ASSETS RATIO :-

It should be worthwhile to observe that how much of that portion of net assets
is occupied by the current assets, as current assets are essentially involved in
forming working capital and also take an active part in increasing liquidity.is
calculated by dividing the current assets by net assets.

Current Assets
Current Assets to Net Assets = —————————
Net Assets

ASSETS

An asset is a resource with economic value that an individual, corporation or

country owns or controls with the expectation that it will provide a future benefit.
Assets are reported on a company's balance sheet and are bought or created to
increase a firm's value or benefit the firm's operations. An asset can be thought of
as something that, in the future, can generate cash flow, reduce expenses, or
improve sales, regardless of whether it's manufacturing equipment or a patent.

46
TYPES OF ASSETS

The two main types of assets are current assets and non-current assets. These
classifications are used to aggregate assets into different blocks on the balance
sheet, so that one can discern the relative liquidity of the assets of an organization.

Assets can also classify into two major classes: tangible assets and intangible
assets. Tangible assets contain various subclasses, including current assets and
fixed assets.

I) CURRENT ASSETS:-

Current assets are important because they indicate how much cash a
company essentially has access to within the next 12 months outside of third-party
sources. It is indicative of how the company funds its ongoing, day-to-day
operations, and how liquid a firm is.

Current assets are the assets which are expected to be converted to

cash within a year. Current Assets commonly include the following line items:

• Cash and cash equivalents

• Marketable securities
• Prepaid expenses
• Accounts receivable
• Inventory
• Debtors

47
II) FIXED ASSETS :-

Fixed assets are of a fixed nature in the context that they are not
readily convertible into cash. They require elaborate procedure and time for their
sale and converted into cash. Other names used for fixed assets are non-current
assets, long-term assets or hard assets. Generally, the value of fixed assets
generally reduces over a period of time known as depreciation.

Assets which are purchased for long-term use and are not likely to
be converted quickly into cash , such as land , buildings, and equipment.
Common Fixed assets are:

• Land
• Building
• Plant
• Machinery
• Equipment
• Furniture

III) INTANGIBLE ASSETS :-

An intangible asset is an asset that is not physical in nature. Intangible assets

cannot be seen, felt or touched physically by us. Some examples of intangible
assets are:

• Goodwill
• Franchise Agreements
• Patents
• Copyrights
• Brands
• Trademarks

48
LIABILITIES

Liabilities are legal obligations or debt owed to another person or

company. In other words, liabilities are future sacrifices of economic benefits that
an entity is required to make to other entities as a result of past events or past
transactions.

Liability is a present obligation of the enterprise arising from past events,

the settlement of which is expected to result in an outflow from the enterprise of
resources embodying economic benefits.

A liability is defined as Any type of borrowing from persons or banks for

improving a business or personal income that is payable during short or long
time.

TYPES OF LIABILITIES

There are three types of liabilities: current, non-current, and contingent liabilities.

I) CURRENT LIABILITIES

Current liabilities, also known as short-term liabilities, are debts or obligations

that are due within one year. Current liabilities are closely watched by
management to make sure that the company possesses enough liquidity from
current assets to ensure that the debts or obligations can be paid off.

Examples of current liabilities:

• Accounts payable
• Interest payable
• Income taxes payable
• Bills payable
• Bank account overdrafts
• Accrued expenses
• Short-term loans

49
II) NON-CURRENT LIABILITIES :-

Non-current liabilities, also known as long-term liabilities, are debts or

obligations that are due in over a year time. Long-term liabilities are an important
source of a company’s long-term financing. Companies take on long-term debt to
acquire immediate capital to fund the purchase of capital assets or invest in new
capital projects.

Long-term liabilities are crucial in determining a company’s long term

solvency. If companies are unable to repay their long-term liabilities as they
become due, the company will face a solvency crisis.

List of non-current liabilities:

• Bonds payable
• Long-term notes payable
• Deferred tax liabilities
• Mortgage payable
• Capital lease

III) CONTINGENT LIABILITIES :-

Contingent liabilities are liabilities that may occur depending on the outcome of a
future event. Therefore, contingent liabilities are potential liabilities. In
accounting standards, a contingent liability is only recorded if the liability is
probable and the amount is reasonably estimates .List of contingent liabilities:
Product warranties

50
 CHAPTER – 5

ANALYSIS
&
INTERPRETATION

51
 BALANCE SHEET OF JUBILANT LIFESCIENCES LIMITED
FROM 2014 TO 2019

(Amounts in Millions)

2014-15 2015-16 2016-17 2017-18 2018-19

ASSETS
Non-current Assets
Property, Plant and Equipment 14410.95 14111.72 14173.85 14331.36 14879.08
Capital work-in-progress 200.17 348.28 646.22 1153.17 2838.21
Other Intangible Assets 71.50 40.66 37.63 46.53 34.34
Intangible Assets under Development ------ 8.52 7.78 ------ ------
Financial Assets
• Investments 17685.02 17019.04 16999.36 17063.01 17638.90
• Loans 460.51 250.73 29.54 32.03 32.92
• Other Financial Assets 4.49 ------ 9.55 4.03 5.01
Deferred tax Assets (net) 197.87 234.74 93.99 ------ ------
Income tax Assets (net) 306.11 298.68 180.97 36.76 129.62
Other non-current Assets 318.60 303.95 289.89 319.44 266.36
Total non-current Assets 33655.22 32616.32 32468.78 32986.53 35824.56
Current Assets
Inventories 5127.62 4752.63 4544.30 5855.80 4919.39
Financial Assets
• Investments ------ 73.50 97.00 ------ ------
• Trade Receivables 3634.66 3412.95 3856.66 4936.61 4805.24
• Cash and Cash equivalents 1367.35 382.94 759.86 364.67 186.98
• Other Bank Balance ------ 27.54 6.70 10.40 160.44
• Loans 899.78 46.41 181.09 205.76 31.77
• Other Financial Assets 4938.66 1005.25 823.75 398.39 598.18
Other Current Assets 798.18 974.75 1173.73 1487.24 2109.69
Total Current Assets 16766.25 10675.97 11443.09 13258.87 12811.69
TOTAL ASSETS 50421.47 43292.29 43911.87 46245.40 48636.25
EQUITY AND LIABILITIES
Equity
Equity Share Capital 159.30 159.30 159.30 159.30 159.30
Other Equity 19666.24 19978.02 20263.77 22334.52 23243.80
Total Equity 19825.54 20137.32 20428.07 22493.82 23403.10

52
 2014-15 2015-16 2016-17 2017-18 2018-19
Liabilities
Non-current Liabilities
Financial Liabilities
• Borrowings 17273.91 11148.31 13870.17 10593.81 11395.73
Provisions 438.50 454.39 506.88 573.71 619.55
Deferred Tax liabilities (net) ------ ------ ------ 199.25 240.52
Total non-current Liabilities 17712.41 11602.70 14377.05 11366.77 12255.80
Current Liabilities
Financial liabilities
• Borrowings 3851.33 4539.42 1770.75 1906.41 4627.12
• Trade Payables 5075.70 3644.87 4869.11 7491.78 5960.52
• Other financial Liabilities 2431.40 2938.79 1950.11 2473.40 1961.30
Other current Liabilities 1383.47 228.48 293.21 229.03 181.46
Provisions 108.44 145.23 133.88 183.49 267.75
Current Tax liabilities (net) 33.18 55.48 89.69 100.70 39.20
Total Current Liabilities 12883.52 11552.27 9106.75 12384.81 12977.35
Total Liabilities 30595.93 23154.97 23483.80 23751.58 25233.15
TOTAL EQUITY AND 50421.47 43292.29 43911.87 46245.40 48636.25
LIABILITIES

53
 STATEMENT OF PROFIT AND LOSS
OF JUBILANT LIFESCIENCES LIMITED FROM 2014-2019

(Amounts in Millions)

2014-15 2015-16 2016-17 2017-18 2018-19

INCOME
Revenue From Operations 33295.54 27909.52 26229.85 33430.07 34386.11
Other Income 1064.19 617.41 518.95 462.12 780.01
TOTAL INCOME 34359.73 28526.93 26748.8 33892.19 35166.12
EXPANCES
Cost of Materials Consumed 16631.98 13483.15 12443.45 16444.51 18745.97
Purchases of Stock-in-trade 1980.53 1171.91 1196.94 1540.52 1314.74
Changes in inventories of finished 738.87 113.92 570.15 181.04 467.41
goods, stock-in-trade and work-in-
progress
Excise Duty on Sales 1532.50 1348.03 1317.65 366.83 ------
Employee benefits expense 2408.28 2161.83 2263.08 2644.15 2657.09
Financial Cost 2270.96 2006.55 1742.55 1351.71 1289.62
Depreciation and Amortization expense 1074.14 869.81 811.28 825.95 864.83
Other Expense 7241.72 6735.66 6398.79 7222.62 7992.15
TOTAL EXPANSES 33878.98 27663.02 25603.59 30215.25 33331.81
Profit And (Loss) Before 480.75 863.91 1145.21 3676.94 1834.31
Exceptional Items & Taxes
Exceptional Items ------ ------ ------ ------ ------
PROFIT AND (LOSS) BEFORE 480.75 863.91 1145.21 3676.94 1834.31
TAX
LESS: Tax Expenses
− Current Tax 96.15 184.54 205.73 753.67 310.79
− Minimum alternate Tax (MAT) ------ (80.15) (81.53) ------ ------
Credit Entitlement
− Deferred Tax Charge 22.90 29.49 229.07 288.85 42.22
Total Tax Expenses 119.05 133.88 353.27 1042.52 358.01
PROFIT AND (LOSS) AFTER 361.7 730.03 791.94 2634.42 1476.30
TAX

54
 RATION ANALYSIS:-

1. CURRENT RATIO:-

Current ratio may be defined as the relationship between current

assets and current liabilities. This ratio, also known as working capital ratio, is a
measure of general liquidity and is most widely used to make the analysis of a
short-term financial position or liquidity of firm.

It is calculated by dividing the total of current assets by total of the current

liabilities.

Current Assets
Current Ratio = ———————————
Current Liabilities

(Amounts in Millions)

2014-15 2015-16 2016-17 2017-18 2018-19

Current Assets 16799.25 10675.97 11443.09 13258.87 12811.69

Current Liabilities 11883.52 11552.27 9106.75 12384.81 12977.35

Current Ratio 1.41 0.92 1.25 1.07 0.98

55
 CURRENT RATIO
1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2014-15 2015-16 2016-17 2017-18 2018-19

CURRENT RATIO

ANALYSIS
• The Standard norm of current ratio is 2:1, i.e., Current assets double the
current liabilities is considered to be satisfactory.

• This ratio is an indicator of the firm’s commitment to meet its short – term
liabilities.

• From the table it is clear that, During the year 2014-15 the current ratio
was 1.41 and during the year 2015-16 the ratio was decreased to 0.92 and it
has increased to 1.25 in the year 2016-17 then decreased to 1.07 in 2017-
18 and it has decreased to 0.98 in the year 2018-19.

• The current ratio is an indication of a firm's Liquidity. Acceptable current

ratios vary from industry to industry. In many cases, a creditor would
consider a high current ratio to be better than a low current ratio, because a

56
 high current ratio indicates that the company is more likely to pay the
creditor back. Large current ratios are not always a good sign for investors.
If the company's current ratio is too high it may indicate that the company
is not efficiently using its current assets or its short-term financing facilities.

• If current liabilities exceed current assets the current ratio will be less than
1. A current ratio of less than 1 indicates that the company may have
problems meeting its short-term obligations.[3] Some types of businesses can
operate with a current ratio of less than one, however. If inventory turns
into cash much more rapidly than the accounts payable become due, then
the firm's current ratio can comfortably remain less than one. Inventory is
valued at the cost of acquiring it and the firm intends to sell the inventory
for more than this cost. The sale will therefore generate substantially more
cash than the value of inventory on the balance sheet. Low current ratios
can also be justified for businesses that can collect cash from customers
long before they need to pay their suppliers.

2. QUICK RATIO:-
Quick ratio may be defined as the relationship between quick/liquid assets
and current or quick liabilities. This ratio, also known as Liquid ratio, is a more
rigorous test of liquidity than the current ratio.

It is calculated by dividing the total of quick assets by total of the current

liabilities.
Quick Assets
Quick Ratio = ————————————
Current Liabilities

Quick Assets = Current Assets – (Inventories + Prepaid Expenses)

57
 (Amounts in Millions)

2014-15 2015-16 2016-17 2017-18 2018-19

Quick Assets 11638.63 5923.34 6898.79 7403.07 7892.30

Current Liabilities 11883.52 11552.27 9106.75 12384.81 12977.35

Current Ratio 0.97 0.51 0.60 0.55 0.61

QUICK RATIO
1.2

0.8

0.6

0.4

0.2

0
2014-15 2015-16 2016-17 2017-18 2018-19

QUICK RATIO

58
ANALYSIS

• The Standard norm of quick ratio is 1:1 as a rule of thumb. This ratio
helps the management to measure short-term solvency.

• From the table it is clear that, During the year 2014-15 the quick ratio was
0.97 and during the year 2015-16 the ratio was 0.51 and it has slightly
increased to 0.60 in the year 2016-17 then decreased to 0.55 in 2017-18
and it has increased to 0.61 in the year 2018-19.

• Hence, the ratio above is less than the standard norm in all year. So the
Company’s liquidity is not satisfactory.

• The quick ratio, also known as the acid-test ratio is a type of liquidity ratio,
which measures the ability of a company to use its near cash or quick assets
to extinguish or retire its current liabilities immediately. It is defined as
the ratio between quickly available or liquid assets and current liabilities.
Quick assets are current assets that can presumably be quickly converted to
cash at close to their book values.

• Thus the Quick Ratio shows that the current liabilities was not fully
secured by liquid assets because the liquid assets were less than the current
liabilities.

3. ABSOLUTE LIQUID RATIO:-

Absolute liquid ratio may be defined as the relationship between absolute
liquid assets and current liabilities. This ratio, also known as cash.

59
 It is calculated by dividing the Absolute liquid assets by total of the current
liabilities.

Absolute liquid Assets

Absolute liquid Ratio = ———————————————
Current Liabilities

Absolute liquid assets are equal to liquid assets minus accounts

receivable and bills receivable. These assets usually include cash, cash
equivalents, bank balances and marketable securities etc.
(Amounts in Millions)

2014-15 2015-16 2016-17 2017-18 2018-19

Absolute liquidity 8003.97 2510.39 3042.13 2403.07 3087.66

Assets

Current Liabilities 11883.52 11552.27 9106.75 12384.81 12977.35

Absolute Liquid 0.67 0.21 0.33 0.19 0.23

Ratio

60
 ABSOLUTE LIQUID RATIO
0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
2014-15 2015-16 2016-17 2017-18

ABSOLUTE LIQUID RATIO

ANALYSIS

• The Standard norm of absolute liquid ratio is 1:2.

• From the table it is clear that, During the year 2014-15 the absolute liquid
ratio was 0.67 and during the year 2015-16 the ratio was 0.21 and it has
slightly increased to 0.33 in the year 2016-17 then decreased to 0.19 in
2017-18 and it has decreased to 0.23 in the year 2018-19.

• Hence, the ratio above is less than the standard norm in all year except
2014-15. So the cash positions of the Company is not satisfactory.

• Thus the Absolute Liquid Ratio shows that the JUBILANT

LIFESCIENCES has not keep sufficient cash & bank balances required to
meet out the current liabilities.

61
 • If the ratio is considerably more than the standard norm, the absolute
liquid ratio represents enough funds in form of cash in order to meet its
short-term obligation in time.

4. INVENTORY TURNOVER RATIO:-

Inventory turnover ratio may be defined as the relationship between
cost of good sold and the amount of average inventory. This ratio, also known as
stock turnover ratio, it indicates the firm efficiency of the firm in producing and
selling its product.
It is calculated by dividing the net sales by inventories.
Inventories
Inventory Turnover Ratio= ———————×365
Sales

(Amounts in Millions)

2014-15 2015-16 2016-17 2017-18 2018-19

Sales 31763.04 27909.52 24911.87 33063.24 34386.11

Inventories 5127.62 4752.63 4544.30 5855.80 4919.39

Inventory Turnover 6.19 5.58 5.48 5.64 6.98

Ratio

62
 INVENTORY TURNOVER RATIO
8

0
2014-15 2015-16 2016-17 2017-18 2018-19

INVENTORY TURNOVER RATIO

ANALYSIS

• This ratio indicates whether investment in inventory is efficiently used or

not and whether the investment is within proper limits.

• From the table it is clear that, During the year 2014-15 the inventory
turnover ratio was 6.19 times and during the year 2015-16 the ratio was
5.58 times and then the ratio was 5.48 times in the year 2016-17 then
increased to 5.64 times in 2017-18 and again increased to 6.98 times in the
year 2018-19

• Inventory Turnover Ratio increased from year to year that is company

production may also increased. Subsequently sales are also increased.

• Hence the efficiency of inventory control in JUBILANT LIFESCIENCES

shows a satisfactory position.

63
 5. CURRENT ASSETS TO NET ASSETS RATIO:-

It should be worthwhile to observe that how much of that portion of net

assets is occupied by the current assets, as current assets are essentially involved in
forming working capital and also take an active part in increasing liquidity.

It is calculated by dividing the current assets by net assets.

Current Assets
Current Assets to Net Assets = ——————————
Net Assets

(Amounts in Millions)

2014-15 2015-16 2016-17 2017-18 2018-19

Current Assets 16799.25 10675.97 11443.09 13258.87 12811.69

Net Assets 50421.47 43292.29 43911.87 46245.40 48636.25

Current Assets
To Net Assets 0.33 0.24 0.26 0.28 0.26

64
 CURRENT ASSETS TO NET ASSETS
0.35

0.3

0.25

0.2

0.15

0.1

0.05

0
2014-15 2015-16 2016-17 2017-18 2018-19

CURRENT ASSETS TO NET ASSETS

ANALYSIS
• It indicates the extent of total funds invested for the purpose of working
capital and throws light on the importance of current assets of a firm.

• From the table it is clear that, During the year 2014-15 the current assets to
net assets ratio was 0.33 and during the year 2015-16 the ratio was 0.24 and
then the ratio was 0.26 in the year 2016-17 and slightly increase in 2017-18
to 0.28 then slightly decreased to 0.26in the year 2018-19.

COMPARISONS
Comparisons of JUBILANT LIFESCIENCES With its 11 manufacturing
Facilities

65
 The data are taken from the annual report of respective companies with
respective years.
FINANCIAL PERFORMANCE ANALYSIS:-

2014-15 2015-16 2016-17 2017-18 2018-19

Current Ratio 1.41 0.92 1.25 1.07 0.98

Quick Ratio 0.97 0.51 0.60 0.55 0.61

Absolute Liquidity 0.67 0.21 0.33 0.19 0.23

Ratio

Inventory Turnover 6.19 5.58 5.48 5.64 6.98

Ratio

Current Assets to 0.33 0.24 0.26 0.28 0.26

Net Assets Ratio

66
 Chart Title
8

0
2014-15 2015-16 2016-17 2017-18 2018-19

Current Ratio QUICK RATIO

ABSOLUTE LIQUIDITY RATIO INVENTORY TURNOVER RATIO
CURRENT ASSETS TO NET ASSETS

ANALYSIS
➢ The current ratio is good as compare to current assets to net assets.

➢ The quick ratio of all is satisfactory AS compared to current assets to net

assets ratio .

➢ JUBILANT LIFESCIENCES had a positive trend on absolute liquid ratio

with respect to another.

➢ Inventory turnover ratio of JUBILANT LIFESCIENCES is satisfied

67
 CHAPTER – 6

FINDINGS
AND
CONCLUSIONS

68
FINDINGS:-

• Current Ratio shows that the company has not much funds to meet its
short-term obligations.

• The company’s Quick Ratio shows some satisfactory trend as it increasing

in regular basis

• As the company having high low of quick ratio. Quick assets would meet
all its quick liabilities with some difficulties.

• The company is not much success in keeping sufficient cash and bank
balances.

• The efficiency of inventory control in JUBILANT LIFESCIENCES shows

a satisfactory position.
• The Current Assets to Net Assets Ratio implies that JUBILANT
LIFESCIENCES is maintaining a considerable level of Current Assets in
proportion to Net Assets

CONCLUSIONS:-
▪ From the above analysis of the company’s financial statement its conclude
that the company’s financial position is good because the company’s
leverage, activities and profitability positions are good and increasing in
regular basis.

▪ The Financial performance Analysis done on the financial position of the

company has provided a clear view on the activities of the company. The
use of the ratio analysis and other financial management helped in this
study to find out the financial soundness of the company.

69
 ▪ This project was very useful for the judgment of the financial status of the
company from the management point of view. This evaluation proved a
great deal to the management to make a decision on the regulation of the
funds to increase the sales and bring profit to the company.

LIMITATIONS:-
1. The study duration is limited to 05 years.

2. The study is restricted only to JUBILANT LIFESCIENCES LIMITED.

Being a case study, the findings cannot be generalized.

3. The study is limited to the analysis of the Financial performance analysis of the
companies.

4. The findings of the study are based on the information retrieved by the annual
reports of the companies.

5. The study takes into account only the quantitative data and the qualitative
aspects were not taken into account.

70
BIBLIOGRAPHY

71
BOOKS

• I.M Pandey, Financial management, Ninth Edition, Vikas publishing house

pvt Ltd.

• R.K Sharma & Gupta, Management Accounting, Kalyani Publisher.

REPORTS

• Annual Report of 2014-15

• Annual Report of 2015-16
• Annual Report of 2016-17
• Annual Report of 2017-18
• Annual Report of 2018-19

WEBSITES

• www.investopedia.com/

• www.Wikipedia.com/

• http://financialanalysishub.com/

• https://www.jubl.com

• https://www.jubl.com/investrors/financials/annual-reports

• https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.onlin
ejournal.in/IJIRV3I7/010.pdf&ved=2ahUKEwi43f3I0t_iAhUIinAKHTihC
F4QFjALegQIAxAB&usg=AOvVaw1St5GoFtmh6UlqeznVNtUA

72
• https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.resea
rchgate.net/publication/326463036_A_Study_on_financial_reports_in_Pha
rmaceuticals_Sector_of_India&ved=2ahUKEwi43f3I0t_iAhUIinAKHTih
CF4QFjANegQIARAB&usg=AOvVaw3ftRWYYdNugEvuYApoyLOs
• https://www.google.com/url?sa=t&source=web&rct=j&url=http://www.educa
tionjournal.org/download/482/3-1-52-

• https://libguides.bc.edu/edpaper/sections

73