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Project Report On Capital Structure
Project Report On Capital Structure
On
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Table of contents
Acknowledgement 02
Certificate 03
Preface 04
Abstract 07
Introduction 27-28
Literature of review on Capital Structure 29
Methodology 30
Theory and Analysis 31-38
Optimal Capital Structure for Ranbaxy 39-58
Capital expenditure: an overview 59-80
Latest balance sheet and capital structure of Ranbaxy 81-82
Recommendations and Suggestions for Industry 82-90
Conclusion 91-92
Biblography 93
The report initially begins with the company profile, followed by the
detailed analysis of company, like businesses of the company,
products offered by the company, financials of the company, etc
COMPANY PROFILE
“A company empowered by one mission –to place itself on the world
map. An enterprise propelled by one force-that synergizes its energies to
charter unexplored markets. Organizations fuelled by one dream-to
transform competition into opportunity.”
Ranbaxy Laboratories Ltd. was incorporated in June 1961, in the name of M/S
LEPITIT RANBAXY LABORATORIES LTD and it commenced its business
in MARCH 1962, in technical and financial collaboration with an international
company named LEPTIT SPA, MILAN, ITALY.
Ranbaxy Laboratories Pvt. Ltd. merged with “Leptit Ranbaxy Laboratories Pvt.
Ltd.” in 1962 Ranbaxy and company also merged with this company in 1966.
The collaboration arrangement with M/S LEPTIT was terminated in 1966; after
which Indian nationals acquired the entire share capital of the company.
Therefore the word Leptit was removed from the name of the company. The
name is known as RANBAXY LABORATORIES LIMITED. In 1973 the
company issued shares to the general public and became a full fledged PUBLIC
LIMITED COMPANY.
The company’s drive for Internationalism is guided by the well planned brand
strategy that covers some of the world emerging markets like China, cis,
Central Europe and Latin America . Its position today is in league of the Top
Ten Pharmaceutical companies of three world an decent ranking as the eleventh
largest company in the international generics space is the resounding
endorsement of its strategic mind.
It is clear that for a long time, the dominant share of revenues of the company
would continue to come from the ever expanding global generics market. Hence
the intent of Ranbaxy mission is to achieve a sustained growth rate through the
continuous pursuit of innovation phase one trials for pervasion, a compound for
treating prosthetic males have been completed. Phase 1 trials with clafrinast, an
asthma compound is an important step towards research based value creation.
This company also had success with Ciplofloxacine, an ingenious form, created
through the novel drug delivery systems research. As the demand of the bulk
drugs inside the country and abroad was increasingly rapidly a new, plant was
set up at Toansa near Ropar in 1987. This was a higher capacity plant designed
to cater to the present and future needs, initially antibiotics like Ampicillin,
Trihydrate and Doxycycline were manufactured.
Later, on the other drugs like Cephalexin monohydrate and Ranitidine were also
prepared. The plant at Toansa was designed to meet the stringent standards set
by the Food and Drug Administration (FDA) of U.S.A. This plant has been
approved by FDA and this will open up American and other newer markets for
Ranbaxy’s products
At present Ranbaxy have four plants for the manufacture of bulk drugs two at
Mohali, one at Dewas (M.P) AND Another at Toansa near ROPAR. At present,
Ranbaxy is the second most Indian company engaged in the manufacturing of
Pharmaceuticals, Bulk Drugs and Fine Chemicals.
RANBAXY’s vast range of highly pure laboratory reagent and chemicals enjoy
a place of pride in the market. IT trends, has rebuilt As a step towards
leveraging information for value creation using its information backbone
around an ERP application, along the focus on reengineering several business
processes around the internet and has putting place business solutions that
challenge existing ways of doing Business. The undying spirit of the company’s
human assets and their intensive competitive and entrepreneurial energy has
VISION: GARUDA
During the year 2002, the company has evolved a 10-year vision till 2012, for
sustaining significant growth consistent with its mission to be an international
research based Pharmaceutical Company, under the rubric ‘Vision Garuda’,
with increasing emphasis on Novel Drug Delivery Systems Research (DDR).
Vision-2012
Aspirations-2012
ALLIED BUSINESSES
Ranbaxy Animal Health
The Animal Health division saw an encouraging growth despite the prevailing
poor market conditions. The division grew at twice the growth rate recorded in
the industry. On the basis of having a vast dome satiated animal population, the
livestock, poultry business and pets business are among the fastest growing
sectors in India. A vast infrastructure of veterinary colleges, agricultural
institutes, technologists and researchers are helping farmers to source healthy,
cost effective products. In conjunction with the present scenario, the AHC
division of Ranbaxy Laboratories Limited has introduced several latest
generation products.
Diagnostics
The Dade Behring segment has increased its installation base by 60% in leading
hospitals and laboratories. Plans are afoot for the introduction of more
parameters for the ‘Point of Care’ market and the launch of Special
Chemistries, a range of drug assays, plus an entry into automated microbiology
in both the Base and Dade Behring business areas.
The company has also witnessed significant milestones in the area of Novel
Drug Delivery Systems (NDDS). The company has entered into strategic
business arrangements with companies such as Bayer AG, Glaxo-Wellcome,
Eli-Lilly etc. for production and co-marketing operations. Many innovative
developments have been taking place in recent times. The company’s research
In order to expand and promote global growth, the company opened several
new markets during the year, notably in Brazil, where 25 filings were
undertaken in a span of 2-3 months.
The company has planned to build and protect intellectual property with the
help of IPC, which addresses all matters pertaining to patents. CQA supervises
the implementation of standard operating procedures (SOP) and ensures
compliance to corporate quality assurance policy in all technological operations
of the organization. The company is committed to invest 6% of the sales in R
and D by 2003, of which 7% of the expenditure will be earmarked for research
on New Drug Discovery and Novel Drug Delivery Systems. There will be
continuous emphasis on augmenting R and D performance and productivity
with advanced scientific and technological tools.
.
1. Chemical Division
2. Diagnostic Division
3. Stan care Division
4. Curradia Division
5. International Division
6. Pharmaceutical Division
7. Technical Division
8. Corporate Division
9. Animal Health Care Division
In the chemical division, various bulk drugs are manufactured. The chemical
division had three units in Punjab. One is located at Toansa, two are located at
Mohali and one unit is located at Dewas near Indore in Madhya Pradesh, where
Ciprofloxacine is manufactured. In the plant of the chemical division, various
drugs like Antibiotics, Anti-malarial, Antibacterial and Anti-ulcer are
manufactured. One of the older plants of Ranbaxy was closed after the accident
in June 2003.the second one is still working
The 1991, the Toansa plant started functioning in 1992 and the Dewas plant
started functioning in 1999. Various plant heads independently manage all these
plants.
In each unit, separate facilities with respect to the manufacture of drugs, along
with their manufacturing areas have been provided. This is required to reduce
the chances of any cross contamination under the drug laws and to comply with
good manufacturing practices.
At Mohali plant, separate blocks have been provided for the preparation of each
drug .The Toansa, Mohali and Dewas plants are planned in such a way that
their system, facilities, manufacturing practices and standards meet the
requirements of FDA. Mohali Plant also mainly in the manufacturing of Active
Pharmaceutical Ingredients (API). The Plant is divided into two plant areas A8
and A9
The basic function of the human resource department in the modern corporate
world is knowledge management. The HR department strives to maintain
cohesiveness among employees. It also ensures interdepartmental cooperation
in achieving targets. The appraisal system is also taken care by this department.
The HR department delves deep into the employee’s psyche to analyze the
positives and negatives of each employee, so that a proper system of delegation
and / or empowerment can be evolved.
Finance Department
The finance department takes care of the regular financial needs of the company
it ensures proper allocation of funds and takes care of the working capital
requirements. It verifies capital raised by different departments and sends them
for approval to the higher authorities.
Stores Department
The function of this department is to provide adequate and proper storage and
preservation of various items to meet the demand of various other departments
by proper issues and maintaining accounts of consumption. It also keeps a track
of stock accumulation and abnormal consumption.
As the name suggests, this department identifies new projects and helps in
erecting them. This department also undertakes major modifications of
equipment.
ERP Department
ERP department helps to integrate the entire enterprise starting from the
supplier to the customer, covering financial and human resources. This will
enable the enterprise to increase productivity by reducing costs. It also ensures a
single solution to the information needs of the whole organization.
Engineering Department
Purchase Department
The purchase department provides material to the factory without which the
wheels of machines cannot move. The various functions performed by this
department include: Securing good vendor performance, including prompt
deliveries of supplies of acceptable qualities.
1. To develop satisfactory sources of supply and maintaining good
relationships with the suppliers.
2. To pay reasonably low prices.
Ranbaxy’s therapeutic width covers five of the top six categories including
Anti-infective, Gastrointestinal, Nutritionals, Cardiovascular, Central Nervous
System, Respiratory, Dermatological and others. While anti-infective contribute
56% of the total sales, Ranbaxy’s other brands like Simvotin and Storvas in the
cardiovascular segment, Serlift in CNS and Revital and Riconia in Nutritionals,
are on their way to success in multiple markets.
During Jan - Dec 2000, amongst the top products of Ranbaxy, Sporidex
(Cephalexin) was the Number 1 brand, closely followed by Cifran
(Ciprofloxacin).
Anti - Infectives
Anti- infective has been the main driver of Ranbaxy’s sales. The important
brands in this category are Cifran (Ciprofloxacin), Sporidex (Ciphalexin),
Enhancin (Amoxyclav), Crixan (Clarithromycin), Vercef (Cefaclor), Oframax
(Ceftriaxone), Cepodem (Cefpodoxime Proxetil), Zanocin (Ofloxacin),
Ceroxim (Cefuroxime Axetil), and Loxof (Levofloxacin).
Cifran (Ciprofloxacin) is the key brand in the anti- infective portfolio, with
estimated sales of US $ 32 Mn, currently being marketed in 15 countries.
Development of Ciprofloxacin once a day has been an important landmark
achieved by Ranbaxy. The product has been licensed to Bayer. Cifran continues
to be a dominant player in the quinolones market in India, China and Russia.
Cardiovasculars
The Central Nervous Segment is one of the important focus areas identified by
Ranbaxy, with Serlift being the key brand. In India, Serlift is number 1 amongst
Sertraline brands. New product introductions will be drivers of growth in this
category.
Gastrointestinal
Rheumatologicals
Nutritonals
Dermatologicals
Balance sheets of only 3 years have been studied but the company is
in operation for so many years.
Only specific tools (i.e. ratio analysis) have been used for data
analysis, while so many other tools are also there.
Organizational rules & regulations.
BOODHOO Roshan
ASc Finance, BBA (Hons) Finance, BSc (Hons) Banking & International Finance
(Email: roshanboodhoo@intnet.mu ; Tel: +230-7891888)
The secondary data as it has always been important for the completion of
any report provides a reliable, suitable equate and specific knowledge. The
annual reports, the fixed asset register and the Capex register provided the
knowledge and information regarding the relevant subjects.
V = value of firm
Operating Contribution
Leverage = EBIT
Financial Leverage
This ratio indicates the effects on earnings by rise of fixed cost funds.
It refers to use the use of debt in the capital structure. Financial
leverage arises when a firm deploys debt funds with fixed charge. The
ratio is calculated with the following:
Earnings before interest and tax / Earnings after interest –
The higher the ratio, the lower the cushion for paying interest on
Financial EBIT
Leverage = EBT
Firm U Firm L
Both firms have same operating leverage, business risk, and EBIT of
3,000. They differ only with respect to use of debt.
U: NI = Rs.1,800.
Taxes paid:
U: Rs.1,200; L: Rs.720.
Now consider the fact that EBIT is not known with certainty.
Determining the impact of uncertainty on stockholder profitability
and risk for Firm U and Firm L
Firm U: Unleveraged
Economy (Fig.
in Rs’000)
U L
Profitability Measures:
E(BEP) 15.0% 15.0%
E(ROIC) 9.0% 9.0%
E(ROE) 9.0% 10.8%
Risk Measures:
sROIC 2.12% 2.12%
sROE 2.12% 4.24%
In a stand-alone risk sense, Firm L’s stockholders see much more risk
than Firm U’s.
U: sROE = 2.12%.
L: sROE = 4.24%.
0% -
20% 8.0%
GJ-IMT,MOHALI ANUJ KUMAR SRIVASTAVA Page 34 of 90
30% 8.5%
40% 10.0%
50% 12.0%
0% 0 Rs.201,899,750.00
20% Rs.42, 430,770.58 Rs.169,723,082.31
30% Rs.64, 737,394.79 Rs.151,053,921.18
40% Rs.85, 309,753.52 Rs.127,964,630.28
50% Rs.102, 227,721.52 Rs.102,227,721.52
Wealth of Shareholders
Value of the equity declines as more debt is issued, because debt is
used to repurchase stock.
But total wealth of shareholders is value of stock after the recap plus
the cash received in repurchase, and this total goes up (It is equal to
Corporate Value on earlier slide).
P = S + (D – D0)
n0
P = Rs.169,723,082.31+ (Rs. 42,430,770.58– 0)
225,557,810
P = Rs.94.06 per share.
# Repurchased = (D - D0) / P
# Rep. = (Rs.42,430,770.58 – 0) / Rs.94.06
= 45,116.
# Remaining = n = S / P
n = Rs.169,723,082.31 / Rs.94.06
= 1,804,462.
0% Rs.89.51 0 2,255,578
20% Rs.94.06 451,116 1,804,462
30% Rs.95.67 676,673 1,578,905
40% Rs.94.55 902,231 1,353,347
50% Rs.90.64 1,127,789 1,127,789
MM Theory: No Taxation
The debt is less expensive than equity. An increase in debt will
increase the required rate of return on equity. With the increase in the
levels of debt, there will be higher level of interest payments affecting
the cash flow of the company. Then equity shareholders will demand
for more returns. The increase in cost of equity is just enough to
offset the benefit of low cost debt, and consequently average cost of
capital is constant for all levels of leverage as shown in Figure 1.
Cost of
Cost of Capital
r Equity
Average cost of
Capital
Cost of
Debt
Level of leverage
M M Theory: Proposition I
M&M
Traditional
B
E
M M Theory: Proposition II
Traditional
RA
B
E
MM Theory: Proposition II
M M Theory: Proposition III
MM theory’s third proposition asserts that the cut-off rate for new
investment will in all cases be average cost of capital and will be un
affected by the type of security used to finance the investments.
M M Theory: Arbitrage
The cost of equity will rise by an amount just sufficient to offset any
possible saving or loss. The lenders determine the supply of debt. The
optimal level is simply the maximum amount of debt which lenders
are prepared to subscribe in any given circumstances e.g. level of
inflation, rate of economic growth, level of profits etc. the investors
will exercise their own leverage by mixing their own portfolio with
debt and equity. The investors call this the arbitrage process. Under
these conditions of investment the average cost of capital is constant.
If two different firms with same level of business risk but different
levels of gearing sold for different values, then shareholders would
move from over valued firm to the under value firm and adjust their
level of borrowing through the market to maintain financial risk at the
same level. The shareholders would increase their income through
this method while maintaining their net investment and risk at the
same level. This process of arbitrage would drive the price of the two
firms to a common equilibrium total value.
Slope = TC
VL
PV of Tax Shield
VU M&M Value
B
MM Theory: Corporate Taxation
Under the assumption of tax relief being available on debt interest,
the total market value of the company is increasing function of the
level of gearing.
MM theory cost of equity formula for a geared company:
Kg = Ku + (1 – T) (Ku – Kd)
MM theory assumes that the value of the geared company will always
be greater than an ungeared company with similar business risk but
only by the amount of debt – associated tax saving of the geared
company. Value of geared company:
Vg = Vu + DT
When corporation taxation is introduced, the tax deductibility of debt
interest creates value for shareholders via the tax shield, but this is a
wealth transfer from taxpayers. The value of a geared company equals
the value of an equivalent ungeared company’s shareholders is less
than that in the all equity company, reflecting the tax benefits. A
further effect of corporate taxation is to lower WACC, which falls
continuously as gearing increases.
The assumption is that when firm has very high level of borrowing
they are more likely to run into the cost of final distress and cost of
bankruptcy. When the leverage of the firm is extremely high then it is
very likely that at some stage it will not be able to make annual
interest payments and loan repayments. Dividends for shareholders
can be bypassed but failure to pay interest on loans often gives the
lender the right to claim on the firms operating assets thereby
preventing the firm’s continuity of activity.
The following illustrative list of activities which may cause increase
in cost of the firm.
Successive borrowings beyond the company’s target debt –
equity ratio.
Borrowing higher levels of interest
Skip off or cut in dividend which may cause the fall of market
rate of shares.
Loss of trade credit from suppliers
Distress sale of highly profitable instruments.
GJ-IMT,MOHALI ANUJ KUMAR SRIVASTAVA Page 47 of 90
Abandonment of promising new projects.
Reduced credit period resulting in loss of business.
Corporate image may be tarnished.
Demand for withdrawal of loans made to the firm previously.
Reduction in stock levels result in reduction in sales etc.
Bankruptcy Costs
V = X + DT – BC
R
Where,
V = Value of leverage firm
X = Anticipated net operational cash flows
R = Capitalisation Rate
D = Market Value of Debt
T = Corporate tax rate
BC = Anticipated costs of bankrupting
PV of Tax Shield
VU
Cost of Equity
Optimum Capital
Structure
B
The existence of tax benefit for modest amounts of debt, and the need
to avoid the costs of financial distress, suggest that there is an optimal
capital structure as illustrated in figure which shows that there is an
optimal capital structure at the point where the market value of the
firm is maximized, that is where (DT – BC) is maximized.
PVBC + PVAC
V
PV of Tax Shield
VU
Signaling Theory
Factors Of Capex
Operational Factors
I. To meet future requirements based on market forecast.
II. To maintain coordination with the vision of the
company as Ranbaxy vision Garuda states to be top
five generic players in the world by 2012 and achieve
sales of 5 billion. To achieve this target company has
to incur heavy expenditure on acquisition of fixed
assets.
III. To increase market penetration.
IV. To maintain, renew, expand, upgrade existing physical
assets that helps to facilitate and enhance revenue-
generating capacity.
V. To create, acquire and develop revenue generating
activities/ capacities that is imperative for an
organization’s healthy growth and existence.
Financial Factors
In deciding which assets to create, acquire or develop, the
benefits to be gained from the expenditure have to be weighed
against the costs that will be incurred. While costs can always
be expressed in financial terms, the benefits may or may not be
similarly quantifiable. Nevertheless, an attempt must be made
GJ-IMT,MOHALI ANUJ KUMAR SRIVASTAVA Page 54 of 90
to express the benefits expected, in a manner that facilitates
comparison with costs and helps formulate a rational basis for
the decision making process. Following are the financial tools
that are taken into account for approving capital expenditure.
INTRODUCTION
The term 'Capital expenditure' refers to expenditure intended
to yield returns over a period of time, usually exceeding one
year. This basically implies that any expenditure, which results
in the creation of a new asset or substantially increases the
capacity/benefits of an existing asset and is of a "long term"
nature, should be classified as Capital expenditure.
Initiation of business
8) Information Technology
Expenditure on procurement of IT infrastructure (Hardware)
and/or application software. Financial evaluation/benefits from
such expenditure may to the extent quantifiable, be provided.
9) Others
This includes office buildings, vehicles, furniture, office
equipment, InfoTech related equipment and utilities, and all
such assets, which provide infrastructures support. This also
includes any capital expenditure not explicitly covered in the
above classifications.
1] Employee entitlements
Capital expenditure necessary to meet the commitments in
respect of provision of assets to the employees in terms of
personnel policies. Financial evaluation of such expenditure is
not required. Assets purchased by employees against their
hard/soft furnishing entitlements do not fall within the scope of
GJ-IMT,MOHALI ANUJ KUMAR SRIVASTAVA Page 59 of 90
this manual and hence, will not be included here as they are per
policy.
Date Of Capitalisation
Date of Capitalisation would be the date when the assets is
certified by the concerned Engineering / E&F Department as
ready to use or GRN date in case of assets which do not need
commissioning (that is computers, furniture, fixtures etc.).
Authority for fixing date of capitalisation would be with E&F
department.
Lead-time between certification and Commencement of
commercial production will not normally exceeds 30 days
In case of lead-time exceeding 30 days to take specific
approvals from the Plant Head.
Capex Numbering
The numbering scheme is as under
Entity/Division/Cost Center No./ Year/ Serial No. of
CEP raised by that RCC/ Running Serial No. of Capex of the
Division/ Plant, to be given by the Accounts department. In
case of Head Office, H.O will appear against division's name.
CAPITAL EXPENDITURE
Regulation
GMP (Goods Manufacturing Practices)
EHS (Environment Health Safety)
Replacement
Capacity
Upgradation
Additional
REVENUE EXPENDITURE
Operating Expenses
Stores
Repairs Building
Capital Expenditure
When top authorities approve the Capex requirement then an
internal order number is created by Plant department. After the
creation of internal order number finance department inform
respective accounts department about the same. On receipt of
the IO, indenter will create the purchase requisition that
subsequently go to purchase department. Purchase department
will float enquires and prepare comparative charts for at least 3
vendors. After selecting the vendor, purchase department will
place a purchase order (PO) on the vendor for supply of the
asset. In case, as per the terms of the PO, any advance is to be
given to vendor, the same is released by accounts department,
after passing the necessary entries in the vendor account under
respective business area (BA). The purchase department while
preparing the PO would ensure to mention complete name as
“RANBAXY LABORATORIES LIMITED, API
MANUFACTURING” and address/ location of delivery of the
asset. On receipt of the goods, the
Stores department will arrange to prepare the GRN and get the
same approved by the user department. On approval of the
GRN, the stores department will send the bill to accounts for
invoice verification. The accounts department will verify the
invoice with PO and release the balance payment to vendor.
Revenue Expenditure
Apart from material, to carry on the API MANUFACTURING,
certain expenses will be incurred under various accounting heads.
These expenses either may be incurred directly by API
MANUFACTURING, or may be incurred by other locations. The
accounting of these expenses would be made as under:
The manpower i.e. lab technician and other supporting staff
working for the API MANUFACTURING should be identified.
All direct & indirect expenses incurred in connection with
recruitment, salaries, allowances and other benefits related the said
manpower be charged to the cost center for API
MANUFACTURING e.g. Repairs & maintenance of building,
AMC’s housekeeping, Horticulture, Books & Periodicals,
Conference & Meeting, training, traveling lab assistant, Gifts &
presents etc, should be charged to the cost center of API
MANUFACTURING.
Utilities cost such as Electricity, Water, Power, and Stream etc,
incurred for API MANUFACTURING, based upon the actual bills
received from the supplier. In case the utilities are provided by any
of the existing manufacturing facilities, the supply should be
monitored by separate meter/sub meter etc, and charges for the
same based upon the actual units consumed should be debited to
the cost center of API MANUFACTURING.
Organization structure
Client
GJ-IMT,MOHALI ANUJ KUMAR SRIVASTAVA Page 70 of 90
Company code
Business Area
Plant
Controlling area
Operating concern
Cost center
Plant
A plant is an organizational unit within a company. A plant
produces goods; render services, or makes goods available for
distribution. A plant can be one of the following types of locations
Controlling Area
This is organizational controlling unit. Transactions within
Controlling area is possible
Operating Concern
Cost Center
Cost center is the smallest unit in Phase I. In SAP for handling
various costs, there are different types of cost centers. Examples,
Personal Cost Center, Amoxy Cost Center, Utility Cost Center.
For Financial purposes Cost Center are classified into various
heads such as administrative cost center, works cost center, Utility
/ Production cost center.
SAP Route
SAP functioning in the system begins by creating internal order.
Internal order number is created by finance department by using
SAP command is
RFQ type
Language key
RFQ date
Quotation deadline
RFQ
Organizational data
Purchase organization
Purchasing group
Default data for items
Item category
Delivery date
Plant
Material Group
Storage location.
Dec ' 08 Dec ' 07 Dec ' 06 Dec ' 05 Dec ' 04
Sources of funds
Owner's fund
Equity share capital 210.19 186.54 186.34 186.22 185.89
Share application money 175.66 1.18 0.88 0.28 2.83
Preference share capital - - - - -
Reserves & surplus 3,330.92 2,350.68 2,162.79 2,190.80 2,320.79
Loan funds
Secured loans 162.07 365.07 224.29 353.49 133.37
Unsecured loans 3,563.30 3,137.96 2,954.31 676.31 2.49
Total 7,442.14 6,041.42 5,528.61 3,407.10 2,645.38
Uses of funds
Fixed assets
Gross block 2,386.75 2,261.48 2,133.57 1,799.32 1,402.79
Less : revaluation reserve - - - - -
Less : accumulated depreciation 930.07 791.96 699.54 599.35 525.21
Net block 1,456.68 1,469.52 1,434.03 1,199.97 877.58
Capital work-in-progress 428.77 327.42 301.88 432.84 264.16
Investments 3,618.03 3,237.55 2,679.95 762.78 679.07
Net current assets
Current assets, loans & advances 6,509.97 2,922.42 2,620.99 2,409.08 2,366.89
Less : current liabilities & provisions 4,571.31 1,915.49 1,508.24 1,397.56 1,542.33
Total net current assets 1,938.67 1,006.93 1,112.76 1,011.52 824.57
Miscellaneous expenses not written - - - - -
Total 7,442.14 6,041.42 5,528.61 3,407.10 2,645.38
Notes:
Book value of unquoted investments 3,372.60 3,106.69 2,659.94 762.77 679.07
Market value of quoted investments - 280.46 14.27 0.01 0.01
Contingent liabilities 252.85 201.00 159.40 202.40 307.95
Number of equity sharesoutstanding (Lacs) 4203.70 3730.71 3726.87 3724.42 1858.91
Do Market Audit
The company should carryout an audit of all its activities. This
activity analyses different marketing activities and suggest the bench
mark for the company. This is a self supportive study as the
marketing audit gives lot of avenues in streamlining the operations
and cutting the cost. It also helps to remove unnecessary activities,
which may be redundant for tomorrow. This gives also an insight to
the future scenario.
Optimization of Resources
Resources available today are becoming scarce. Therefore, for turning
around the company, optimization of resources does play a very
important role. The activities like rationalizing of tour programme,
defining the head quarters working norms, proper planning of input
plans like samples, gifts based on contribution, core doctors visit
analysis, application of ACE approach and input-output model led to
increase in profitability.