Komal dulam

RANBAXY LABORATORIES LIMITED Page |1

A
Project Report
On
Financial Analysis
Of

Submitted to
Global Institute of Management
Gujarat Technological University
On
10/12/2012

In Partial fulfillment of the requirements for the
Accounting for Managers course in the
Master of Business Administration Programme

Submitted By:

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

GLOBAL INSTITUTE OF MANAGEMENT


Preface

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

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

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



Acknowledgement

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

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

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

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



Executive summary

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

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

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



Index

Sr.No. Content Page no.

Chapter :1
1 5
Introduction of Company

Chapter-2:
2 10
Comparative Balance sheet and Analysis of Balance Sheet

Chapter-3:
3 15
Comparative Profit and Loss Account and Analysis of Profit & Loss Statement

Chapter-4:
4 19
Common Size Statements

Chapter 5:
5 23
Trend Analysis (Index Analysis)

Chapter 6:
6 26
Analysis of Cash flow Statement

Chapter 7:
7 27
Ratio Analysis

Chapter 9:
9 36
Contemporary Issues in Accounting of the company



CHAPTER: 1 (Company profile)

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

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

1.2Company Details:

Type - Public

Founded - 1961

Headquarters- Gurgaon, Haryana, India

Employees - 1100 in R&D

Website - www.ranbaxy.com

For enquiries contact:

M. Giridhar Venugopal
Director – Global Business Development & Acquisitions
Ranbaxy Laboratories Limited
Plot No. 90, Sector 32,
Gurgaon – 122001 (Haryana), India
E-mail: business.development@ranbaxy.com

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



1.3Products

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

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

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

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



1.4 Company History:

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

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

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

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



1.5 Board of Directors

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

Dr. Tsutomu Une Mr. Arun Sawhney Mr. Takashi Shoda
Chairman CEO & Managing Director Non Executive &
Non Executive & Non Independent Director
Non Independent Director

Dr. Kazunori Hirokawa Dr. Anthony H. Wild Mr. Rajesh V. Shah
Non Executive & Independent Director Independent Director
Non Independent Director

Mr. Akihiro Watanabe Mr. Percy K. Shroff
Independent Director Independent Director


R A N B A X Y L A B O R A T O R I E S L I M I T E D P a g e | 10

+

CHAPTER: 2 (Balance sheet 2008-2012)

Balance Sheet of Ranbaxy Laboratories of 2007-2011
------------------ in Rs. Cr. -------------------
Particulars Dec '11 Dec '10 Dec '09 Dec '08 Dec '07

Sources Of Funds
Total Share
211.00 210.52 210.21 210.19 186.54
Capital
Equity Share
211.00 210.52 210.21 210.19 186.54
Capital
Share
Application 0.67 6.60 175.85 175.66 1.18
Money
Preference
0.00 0.00 0.00 0.00 0.00
Share Capital
Reserves 1,713.16 4,915.28 3,748.54 3,330.92 2,350.68
Revaluation
0.00 0.00 0.00 0.00 0.00
Reserves
Net worth 1,924.83 5,132.40 4,134.60 3,716.77 2,538.40
Secured
229.59 195.39 175.83 162.07 365.07
Loans
Unsecured
4,103.94 4,065.33 3,172.55 3,563.30 3,137.96
Loans
Total Debt 4,333.53 4,260.72 3,348.38 3,725.37 3,503.03
Total
6,258.36 9,393.12 7,482.98 7,442.14 6,041.43
Liabilities
Application Of Funds
Gross Block 3,094.07 2,857.63 2,620.92 2,386.75 2,261.48
Less: Accum.
1,222.07 1,145.52 1,027.52 930.07 791.96
Depreciation
Net Block 1,872.00 1,712.11 1,593.40 1,456.68 1,469.52
Capital Work
222.62 330.18 414.92 428.77 327.42
in Progress
Investments 3,410.79 3,804.44 3,833.69 3,618.03 3,237.55
Inventories 1,655.23 1,489.91 1,230.48 1,198.52 976.07


Sundry
3,689.95 1,292.63 1,534.65 1,024.54 882.91
Debtors
Cash and
66.90 22.44 25.56 49.86 69.38
Bank Balance
Total Current
5,412.08 2,804.98 2,790.69 2,272.92 1,928.36
Assets
Loans and
2,382.72 1,470.45 1,967.65 2,351.98 882.99
Advances
Fixed
1,871.14 2,689.85 728.56 1,885.08 111.07
Deposits
Total CA,
Loans & 9,665.94 6,965.28 5,486.90 6,509.98 2,922.42
Advances
Deferred
0.00 0.00 0.00 0.00 0.00
Credit
Current
5,157.68 2,491.08 3,082.89 3,840.11 1,177.35
Liabilities
Provisions 3,755.31 927.82 763.03 731.20 738.14
Total CL &
8,912.99 3,418.90 3,845.92 4,571.31 1,915.49
Provisions
Net Current
752.95 3,546.38 1,640.98 1,938.67 1,006.93
Assets
Miscellaneous
0.00 0.00 0.00 0.00 0.00
Expenses
Total Assets 6,258.36 9,393.11 7,482.99 7,442.15 6,041.42



Comparative Balance sheet of Ranbaxy Laboratories of 2007-2011

------------------ in Rs. Cr. -------------------
Dec
Dec Dec Dec % % % %
Particulars '11-
'10-09 '09-08 '08-07 '11-10 '10-09 '09-08 '08-07
10
Sources Of Funds
Total Share 0.22800 0.14747 0.00951 12.6782
0.48 0.31 0.02 23.65
Capital 7 2 5 5
Equity Share 0.22800 0.14747 0.00951 12.6782
0.48 0.31 0.02 23.65
Capital 7 2 5 5
Share
- - 0.10816 14786.4
Application -5.93 -169.25 0.19 174.48
89.8485 96.2468 3 4
Money
Preference
- - - - - - - -
Share Capital
-
1166.7 - 31.1251 12.5376 41.7002
Reserves 3202 417.62 980.24
4 65.1462 8 8 7
.12
Revaluation
- - - - - - - -
Reserves
-
1178.3 - 24.1329 11.2417 46.4217
Net worth 3207 997.8 417.83
7 62.4965 3 5 6
.57
17.5034 11.1243 8.49015 -
Secured Loans 34.2 19.56 13.76 -203
5 8 9 55.6058
Unsecured 38.6 0.94973 28.1407 13.5546
892.78 -390.75 425.34 -10.966
Loans 1 8 7 7
72.8 1.70886 27.2472 - 6.34707
Total Debt 912.34 -376.99 222.34
1 6 1 10.1195 7
-
Total 1910.1 1400.7 - 25.5264 0.54876 23.1850
3134 40.84
Liabilities 4 1 33.3729 6 7 7
.76
236.
Gross Block 236.71 234.17 125.27 8.27 9.03 9.81 5.54
44
Less: Accum. 76.5
118.00 97.45 138.11 6.68 11.48 10.48 17.44
Depreciation 5
Net Block 159. 118.71 136.72 -12.84 9.34 7.45 9.39 -0.87


89
-
Capital Work
107. -84.74 -13.85 101.35 -32.58 -20.42 -3.23 30.95
in Progress
56
-
Investments 393. -29.25 215.66 380.48 -10.35 -0.76 5.96 11.75
65
165.
Inventories 259.43 31.96 222.45 11.10 21.08 2.67 22.79
32
Sundry 2,39
-242.02 510.11 141.63 185.46 -15.77 49.79 16.04
Debtors 7.32
Cash and Bank 44.4
-3.12 -24.30 -19.52 198.13 -12.21 -48.74 -28.13
Balance 6
Total Current 2,60
14.29 517.77 344.56 92.95 0.51 22.78 17.87
Assets 7.10
Loans and 912. 1,468.9
-497.20 -384.33 62.04 -25.27 -16.34 166.37
Advances 27 9
- -
1,961.2 1,774.0 1,597.2
Fixed Deposits 818. 1,156.5 -30.44 269.20 -61.35
9 1 0
71 2
Total CA, -
2,70 1,478.3 3,587.5
Loans & 1,023.0 38.77 26.94 -15.72 122.76
0.66 8 6
Advances 8
Deferred
- - - - - - - -
Credit
Current 2,66 2,662.7
-591.81 -757.22 107.05 -19.20 -19.72 226.17
Liabilities 6.60 6
2,82
Provisions 164.79 31.83 -6.94 304.75 21.60 4.35 -0.94
7.49
Total CL & 5,49 2,655.8
-427.02 -725.39 160.70 -11.10 -15.87 138.65
Provisions 4.09 2
-
Net Current 1,905.4
2,79 -297.69 931.74 -78.77 116.11 -15.36 92.53
Assets 0
3.43
Miscellaneous
- - - - - - - -s
Expenses
-
1,910.1 1,400.7
Total Assets 3,13 40.84 -33.37 25.53 0.55 23.19
2 3
4.75



Interpretation

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

 Total liabilities have been increasing till 2011.

 Current liabilities have also been increased in 2011.

 The total assets also increase year which shows that company
Purchases investments and assets every year.

 Its shows company‟s good profitability and financial soundness.

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



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

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


Tax 6.69 415.48 488.86 -574.24 156.69
Reported Net
-3,052.05 1,148.73 571.98 -1,044.80 617.72
Profit
Total Value
4,015.82 2,355.55 2,246.33 2,462.16 2,057.93
Addition
Preference
0.00 0.00 0.00 0.00 0.00
Dividend
Equity Dividend 0.07 84.21 0.00 0.00 317.15
Corporate
-0.32 13.99 0.00 0.00 53.90
Dividend Tax
Shares in issue
4,220.00 4,210.41 4,204.17 4,203.70 3,730.71
(lakhs)
Earnings Per
-72.32 27.28 13.61 -24.85 16.56
Share (Rs)
Equity Dividend
0.03 40.00 0.00 0.00 170.00
(%)



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

------------------ in Rs. Cr. -------------------
Particulars Dec Dec Dec Dec % % % %
'11-10 '10-09 '09-08 '08-07 '11-10 '10-09 '09-08 '08-07
Income
Sales Turnover 2,021.84 889.84 121.28 331.82 35.55 18.55 2.59 7.64
Excise Duty -18.38 25.06 -8.27 -27.20 -44.87 157.61 -34.22 -52.95
Net Sales 2,040.22 864.78 129.55 359.02 36.13 18.09 2.78 8.36
- -
Other Income 4,553.02
76.79 2,073.30
2,138.77
-809.50 15.81 -130.59 -388.07

Stock
-25.71 127.47 -81.63 74.93 -15.93 375.35 -70.62 184.28
Adjustments
- -
Total Income 2,538.51
1,069.04 2,121.22
1,704.82
-39.85 20.17 66.71 -34.90

Expenditure
Raw Materials 341.86 264.64 -132.72 188.13 15.67 13.81 -6.48 10.11
Power & Fuel
62.23 23.18 0.74 18.48 46.88 21.16 0.68 20.45
Cost
Employee
236.96 25.78 109.85 52.61 38.96 4.43 23.24 12.52
Cost
Other
Manufacturing 16.01 6.74 -4.71 12.05 16.56 7.49 -4.98 14.59
Expenses
Selling and
Admin 246.67 26.45 -96.52 61.74 18.51 2.02 -6.88 4.60
Expenses
Miscellaneous
1,098.40 27.07 -225.19 259.36 593.28 17.13 -58.76 209.33
Expenses
Preoperative
Exp 0.00 0.00 0.00 0.00 - - - -
Capitalized
Total
2,002.13 373.86 -348.55 592.37 44.13 8.98 -7.73 15.11
Expenses
Operating
12.38 618.39 396.47 -158.42 0.97 94.75 154.77 -38.21
Profit
- -
PBDIT 4,540.64
695.18 2,469.77
2,297.19
-247.65 61.07 -185.49 -237.87

Interest 15.25 14.72 -106.36 52.40 28.14 37.29 -72.93 56.08
- -
PBDT 4,555.89
680.46 2,576.13
2,349.59
-256.05 61.93 -174.38 -269.36

Depreciation 45.73 80.15 -6.27 35.74 20.03 54.08 -4.06 30.10


Other Written
7.83 0.00 0.00 0.00 - - - -
Off
Profit Before - -
600.31 2,582.40 -297.20 63.15 -158.26 -316.54
Tax 4,609.45 2,385.33
Extra-ordinary
-6.44 -89.54 93.66 -17.70 -29.43 -80.36 527.36 -49.92
items
PBT (Post
- -
Extra-ord 4,615.89
510.77 2,676.06
2,403.03
-293.48 48.09 -165.80 -304.56
Items)
Tax -408.79 -73.38 1,063.10 -730.93 -98.39 -15.01 -185.13 -466.48
Reported Net - -
576.75 1,616.78 -365.69 100.83 -154.75 -269.14
Profit 4,200.78 1,662.52
Total Value
1,660.27 109.22 -215.83 404.23 70.48 4.86 -8.77 19.64
Addition
Preference
0.00 0.00 0.00 0.00 - - - -
Dividend
Equity
-84.14 84.21 0.00 -317.15 -99.92 - - -100.00
Dividend
Corporate
-14.31 13.99 0.00 -53.90 -102.29 - -- -100.00
Dividend Tax
Shares in issue
9.59 6.24 0.47 472.99 0.23 0.15 0.01 12.68
(lakhs)
Earnings Per
-99.60 13.67 38.46 -41.41 -365.10 100.44 -154.77 -250.06
Share (Rs)
Equity
-39.97 40.00 0.00 -170.00 -99.93 - - -100.00
Dividend (%)

Interpretation

 Total income is more than total expenditure in every year.

 Net profit has been increased in 2011 around 620%.

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



CHAPTER:4 Common size Statement of Ranbaxy ltd.

Balance Sheet of Ranbaxy Laboratories of 2007-2011
------------------ in Rs. Cr. -------------------

Sources Of Funds
Total Share
3.37149 2.241215 2.809175 2.824322 3.08768
Capital
Equity Share
3.37149 2.241215 2.809175 2.824322 3.08768
Capital
Share
Application 0.010706 0.070264 2.3499996 2.360343 0.019532
Money
Preference
0 0 0 0 0
Share Capital
Reserves 27.37394 52.32851 50.094214 44.75756 38.90933
Revaluation
0 0 0 0 0
Reserves
Net worth 30.75614 54.63999 55.253388 49.94222 42.01654
Secured
3.668533 2.08014 2.3497323 2.177734 6.042775
Loans
Unsecured
65.57533 43.27987 42.396879 47.88005 51.94068
Loans
Total Debt 69.24386 45.36001 44.746612 50.05778 57.98346
Total
100 100 100 100 100
Liabilities
Gross Block 49.43899 30.42262 35.025037 32.07071 37.43292
Less: Accum.
19.527 12.19532 13.73141 12.49733 13.10884
Depreciation
Net Block 29.91199 18.2273 21.293627 19.57338 24.32408
Capital Work
3.557162 3.51513 5.5448424 5.761373 5.419587
in Progress
Investments 54.49974 40.50245 51.232061 48.61539 53.58922
Inventories 26.4483 15.86173 16.443694 16.10449 16.1563


Sundry
58.96033 13.76147 20.508513 13.76672 14.61428
Debtors
Cash and
1.06897 0.238899 0.3415747 0.669968 1.148406
Bank Balance
Total Current
86.47761 29.8621 37.293782 30.54117 31.91899
Assets
Loans and
38.07259 15.65456 26.29497 31.6035 14.6156
Advances
Fixed
29.89825 28.63642 9.7362151 25.32978 1.838475
Deposits
Total CA,
Loans & 154.4484 74.15308 73.324968 87.47445 48.37306
Advances
Deferred
0 0 0 0 0
Credit
Current
82.41264 26.52029 41.198639 51.59947 19.48797
Liabilities
Provisions 60.0047 9.877666 10.19686 9.825118 12.21799
Total CL &
142.4173 36.39796 51.395498 61.42459 31.70596
Provisions
Net Current
12.03111 37.75512 21.929469 26.04986 16.66711
Assets
Miscellaneous
0 0 0 0 0
Expenses
Total Assets 100 100 100 100 100



Profit and loss account (common size statement)

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


Reported Net
-39.59 20.20 11.92 -22.34 14.2188
Profit
Total Value
52.09 41.42 46.82 52.65 47.36983
Addition
Preference
0.00 0.00 0.00 0.00 0
Dividend
Equity Dividend 0.00 1.48 0.00 0.00 7.300219
Corporate
0.00 0.25 0.00 0.00 1.240681
Dividend Tax
Shares in issue
54.74 74.03 87.63 89.90 85.8742
(laths)
Earnings Per
-0.94 0.48 0.28 -0.53 0.381181
Share (Rs)
Equity Dividend
0.00 0.70 0.00 0.00 3.913093
(%)

Analysis of Common Size Statement

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

 The contribution of total expenditure was continuous decrease year by year, but in 2011 it
Increased.

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



CHAPTER 5 (Trend analysis)

Balance sheet of Ranbaxy ltd.

particulars 2007 2008 2009 2010 2011
Sources Of Funds
Total Share Capital 100 112.6782 112.689 112.8552 113.1125
Equity Share Capital 100 112.6782 112.689 112.8552 113.1125
Share Application
Money 100 14886.44 14902.54 559.322 56.77966
Preference Share
Capital
Reserves 100 141.7003 159.4662 209.1003 72.87934
Revaluation Reserves
Net worth 100 146.4218 162.8821 202.1904 75.82847
Secured Loans 100 44.39423 48.16337 53.52124 62.88931
Unsecured Loans 100 113.5547 101.1023 129.5533 130.7837
Total Debt 100 106.3471 95.58525 121.6296 123.708
Total Liabilities 100 123.1851 123.8611 155.4784 103.5907
Gross Block 100 105.5393 115.894 126.3611 136.8162
Less: Accum.
Depreciation 100 117.439 129.7439 144.6437 154.3096
Net Block 100 99.12625 108.43 116.5081 127.3885
Capital Work in
Progress 100 130.9541 126.7241 100.843 67.99218
Investments 100 111.7521 118.4133 117.5098 105.351
Inventories 100 122.7904 126.0647 152.6438 169.5811
Sundry Debtors 100 116.0413 173.8173 146.4056 417.9305
Cash and Bank Balance 100 71.86509 36.84059 32.34361 96.42548
Total Current Assets 100 117.868 144.7183 145.4594 280.6571
Loans and Advances 100 266.3654 222.8394 166.5308 269.8468
Fixed Deposits 100 1697.2 655.9467 2421.761 1684.649
Total CA, Loans &
Advances 100 222.7599 187.7519 238.3395 330.7512
Differed Credit
Current Liabilities 100 326.1655 261.8499 211.5836 438.0753
Provisions 100 99.0598 103.372 125.697 508.7531
Total CL & Provisions 100 238.6496 200.78 178.487 465.3112
Net Current Assets 100 192.5327 162.9686 352.1973 74.7768
Miscellaneous Expenses

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



Interpretation

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

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

 Total assests was decreased in 2011.

Profit and loss account (Trend analysis)

Income 2007 2008 2009 2010 2011
Sales Turnover 100 107.6379 110.4295 130.912 177.4511
Excise Duty 100 47.05081 30.95192 79.73525 43.95562
Net Sales 100 108.3629 111.3806 131.5244 179.0485
Other Income 100 -288.07 88.12077 102.054 -724.071
Stock
100 284.2843 83.52189 397.0241 333.7924
Adjustments
Total Income 100 65.09956 108.5244 130.4094 78.44195
Expenditure
Raw Materials 100 110.1082 102.9772 117.1962 135.5642
Power & Fuel
100 120.4538 121.2728 146.9286 215.8052
Cost
Employee Cost 100 112.525 138.6773 144.8148 201.2285
Other
Manufacturing 100 114.5884 108.8862 117.046 136.4286
Expenses
Selling and
Admin 100 104.6039 97.40647 99.37884 117.7729
Expenses
Miscellaneous
100 309.3301 127.5787 149.427 1035.948
Expenses
Preoperative
Exp Capitalized
Total Expenses 100 115.115 106.2213 115.7608 166.8474

Operating
100 61.78876 157.4182 306.5752 309.5613
Profit
PBDIT 100 -137.873 117.8706 189.8563 -280.326
Interest 100 156.0848 42.24553 58.00064 74.32302
PBDT 100 -169.359 125.9707 203.9792 -318.312
Depreciation 100 130.1019 124.821 192.3271 230.8431
Other Written
Off
Profit Before
100 -216.541 126.1519 205.8151 -405.875
Tax
Extra-ordinary 100 50.0846 314.2132 61.70333 43.54202


items
PBT (Post
Extra-ord 100 -204.559 134.6037 199.3384 -385.677
Items)
Tax 100 -366.482 311.9918 265.1605 4.269577
Reported Net
100 -169.138 92.59535 185.9629 -494.083
Profit
Total Value
100 119.6426 109.1548 114.4621 195.1388
Addition
Preference
Dividend
Equity
100 0 0 26.5521 0.022072
Dividend
Corporate
100 0 0 25.95547 -0.59369
Dividend Tax
Per share data
(annualized)
Shares in issue
100 112.6783 112.6909 112.8581 113.1152
(lakhs)
Earnings Per
100 -150.06 82.18599 164.7343 -436.715
Share (Rs)
Equity
100 0 0 23.52941 0.017647
Dividend (%)
Book Value
100 123.8641 138.4502 179.0031 67.04896
(Rs)

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

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

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



CHAPTER 6: (Cashflow Statement)

Cash Flow of Ranbaxy Laboratories in Rs. Cr.
Particulars. Dec '11 Dec '10 Dec '09 Dec '08 Dec '07
1565.2
Net Profit Before Tax -3048.67 1061.92 -1619.08 774.41
5
1168.8
Net Cash From Operating Activities 138.14 -665.43 -599.22 685.77
9
-
Net Cash (used in)/from
1094.73 2067.8 86.12 -462.91 -708.18
Investing Activities
0
Net Cash (used in)/from Financing Activities -1268.98 991.48 -214.14 2817.20 132.19
Net (decrease)/increase In Cash and Cash
-35.13 92.57 -793.46 1755.07 109.78
Equivalents
Opening Cash & Cash Equivalents 161.83 69.26 862.39 172.14 62.36
Closing Cash & Cash Equivalents 126.70 161.83 68.93 1927.21 172.14

Interpretation:
 It shows the cash inflow and outflow of the company.

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

 There is a major difference between the financing activities of the year
2007 & 2008 because of company issue shares more than last year

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

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



Chapter 6 (Ratio analysis)

6.1- CLASSIFICATION OF RATIO
As per requirement of various users the ratio may be classified in following groups.

Profitability Ratio:-
1. Gross profit ratio.
2. Net profit ratio
3. Return on capital employs ratio
4. Return on share holders fund
5. Return on equity share holders fund
6. Operating ratio
7. Expenses ratio
8. Earnings per share
9. Dividend per share
10. Price Earnings ratio

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

Leverage ratio:-
1. Debt equity ratio
2. Proprietary ratio
3. Capital gearing ratio
4. Long term fund to fixed assets

Activity ratio:-
1. Sales turnover ratio
2. Total assets turnover ratio
3. Debtor ratio
4. Creditor ratio
5. Book value per share
6. Working capital turnover ratio

Coverage ratio:-
1. Debt service coverage ratio
2. Interest coverage ratio



Profitability ratio

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

Year 2007 2008 2009 2010 2011
Gross
profit
3,094.07 2,857.63 2,620.92 2,386.75 2,261.48
Sales 7,709.17 5,687.33 4,797.49 4,676.21 4,344.39
Profit 40.13493 50.24555 54.63107 51.04027 52.05518
margin%

Gross profit
60
54.63107
51.04027 52.05518
50.24555
50
40.13493
40

30
Profit
20

10

0
2007 2008 2009 2010 2011

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



2. Net profit ratio = Net profit ×100
Sales

Year 2007 2008 2009 2010 2011
Net profit 1,872.00 1,712.11 1,593.40 1,456.68 1,469.52
Sales 7,709.17 5,687.33 4,797.49 4,676.21 4,344.39
Profit
24.2828 30.1039 33.2132 31.1509 33.8257
margin%

Net profit
40
33.2132 33.8257
35
30.1039 31.1509
30
24.2828
25

20
profit
15

10

5

0
2007 2008 2009 2010 2011

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

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



3. Operating ratio = Operating exps ×100
Sales

Years 2007 2008 2009 2010 2011s
Operating exps 6,538.90 4,536.77 4,162.91 4,511.46 3,919.09
Sales 7,709.17 5,687.33 4,797.49 4,676.21 4,344.39
Operating 84.82 79.77 86.77 96.48 90.21
ratio%

Operating ratio
120

100 96.48
90.21
84.82 86.77
79.77
80

60
Operating ratio
40

20

0
2007 2008 2009 2010 2011

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



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

Years 2007 2008 2009 2010 2011
Earnings per
share
-72.32 27.28 13.61 -24.85 16.56
Share
holders fund
1,924.83 5,132.40 4,134.60 3,716.77 2,538.40
E.P.S ratio -3.76 0.53 0.329 -0.67 0.65

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

2007 2008 2009 2010 2011
E.B.I.T -3,058.51 1,550.94 950.63 -1,631.77 753.56
Net worth 1,924.83 5,132.40 4,134.60 3,716.77 2,538.40
Return on
capital 22.99 43.90 29.69
158.90 30.22
employs
ratio

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

Years 2007 2008 2009 2010 2011
equity dividend 0.07 84.21 0.00 0.00 317.15
Pref, share 211.00 210.52 210.21 210.19 186.54
Dividend ratio 0.033 40 0 0 170.017s



Liquidity ratio:-

1. Current ratio = Current Assets
Current liabilities

Years 2007 2008 2009 2010 2011
Current assests 5,412.08 2,804.98 2,790.69 2,272.92 1,928.36
Current
liabilities 5,157.68 2,491.08 3,082.89 3,840.11 1,177.35
Ratio 1.05 1.13 0.90 0.59 1.64

Current ratio
1.8
1.64
1.6
1.4
1.2 1.13
1.05
1 0.9

0.8 Current ratio
0.59
0.6
0.4
0.2
0
2007 2008 2009 2010 2011

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



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

Years 2007 2008 2009 2010 2011
Current
assests –
(stock-
prepared 5,276.36 2,643.55 2,756.73 2,157.33 1,887.70
exps).

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

Ratio 1.023 1.06 0.89 0.56 1.60

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

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



Leverage ratio:-

1. Debt equity ratio = Long term debt

Share holders fund

Year 2007 2008 2009 2010 2011
Long term debt 4,333.53 4,260.72 3,348.38 3,725.37 3,503.03

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

Ratio 2.25 0.83 0.81 1.00 1.38

Debt ratio
2.5
2.25

2

1.5 1.38

1 debt ratio
1 0.83 0.81

0.5

0
2007 2008 2009 2010 2011

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



2. Proprietary ratio= Share holders fund

Total assets

Years 2007 2008 2009 2010 2011
Share
holders 1,924.83 5,132.40 4,134.60 3,716.77 2,538.40
fund
Total
assets 6,258.36 9,393.11 7,482.99 7,442.15 6,041.42
Ratio 0.31 0.55 0.55 0.50 0.42

Proprietary ratio
0.6 0.55 0.55
0.5
0.5
0.42
0.4
0.31
0.3
Proprietary ratio
0.2

0.1

0
2007 2008 2009 2010 2011

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



ACCOUNTIG POLICES AND NOTES

Significant accounting polices:-
Schedule ‘N’:-
a. Basis preparation of financial statement:-
The financial statement are prepared under the historical cost conventional accept for certain
fixed assets which are revalued in accordance with the generally accepted accounting
principles in India. And the provisions of the companies act 1956.
b. Use of estimates :-
The preparation of financial statements requires estimates and assumptions to be made that
affect the reported amount of assets and liabilities on the date of the financial statements and
the reported amount of revenues and expense during the accounting period.
c. Own fixes assts:-
Fixed assets are stated at cost net of value added tax. And includes amounts added on
revaluations less accumulated depreciation and impairment loss if any all cost including
financial cost in commencement of commercial product net charges on foreign exchange
contract arising from exchange rate variations attribute table to the fixed assets are
capitalized.

d. Leased assts:-
 Operating leases rentals are expensed with reference to lease terms and other considerations.
 I. finance leases prior to 1st April, 2001: rentals are expensed with reference to lease terms and other
consideration.

II. Financial leases on or after 1st April. 2001: the lower of the value of the assets and present value of the
minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability. The
principal component in the lease rental is adjusted against the lease liability and the interest component is
charged to profit and loss account.

e. Intangible assets:-
Intangible assets are stated at cost of acquisition less accumulated amortiosation.
f. Depreciation:-
Depreciation on fixes assets is provided to the extent of depreciable amount on written down
value method at rates and in the manner prescribed in the company‟s act 1956.



Depreciation is provided on straight line method over their useful life. 100% depreciation is
provided in the year of additions, on additions forming an integral part of existing plans
including incremental cost arising on account of translation of foreign currency liabilities for
accusation of fixed assets. Depreciation is provided as aforesaid over the residual life of the
assets as certifies by values on assets acquired under fiancé lease from 1st April 2001.
Depreciation is provided over the lease term.
g. Foreign currency transactions:-
 Transactions denominated in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction.
 Monitory items denominated in foreign currency at year and are restated at year end
rates in case of items which are covered by forward exchange contracts.
 Nonmonetary currency items are carried at cost.

h. Inventories:-
Items of inventories are measured at lower of the cost and net realizable value after providing
for obsolescence if any. Cost of inventories comprises of cost of purchase, cost of conversion
and other cost incurred in bringing them to their respective present location and condition.

i. Employee benefits:-
 Short term employee benefits are recognize as an expense at the undiscounted amount
in pal account of the year in which the rendered services is rendered.
 In respect of employees stock options the excess of fair price on the date of grant over
the exercise price is recognized as differed compensation cost amortized over the
vesting period.

j. Provision for current differed tax:-
Provision for tax is made after taking in to consideration benefits admissible under the
provisions of the income tax act 1961. Differed tax resulting from timing difference between
taxable and accounting income is accounted for using the tax rates and laws that are in acted
as on the balacesheet date.
k. Provisions contingent liabilities and assts:-
Provisions involving substantial degree of estimation in measurement are recognized when
there is a present obligation is a result of past events. Contingent liabilities are not recognized
but are disclosed in the notes. Contingent assets are neither recognized not disclosed.



Conclusion

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

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

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

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



Bibliography (References):

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

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

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


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