Ranbaxy Laboratories Limited is an international pharmaceutical company headquartered in India that serves over 150 countries. It has over 14,600 employees and reported revenues of $2.3 billion in 2013. The company develops, manufactures, and markets generic, branded generic, and over-the-counter drugs from its 21 manufacturing facilities across 8 countries. In the quarter ending June 2014, Ranbaxy reported consolidated sales of Rs. 23.7 billion with earnings before interest, taxes, depreciation and amortization of Rs. 2.4 billion.

1. Presented by:
Vibhaw
Shefali Mehra
Siddhant Tripathi
Sudhir Jha
Shweta Singh
Chatrapal Singh
Sonia

2. RANBAXY AT A GLANCE
 Ranbaxy Laboratories Limited (Ranbaxy) is a research
based international pharmaceutical company serving
customers in over 150 countries.
 For more than 50 years, the company is providing high
quality, affordable medicines trusted by healthcare
professionals and patients.
 Ranbaxy is a member of the Daiichi Sankyo Group. Daiichi
Sankyo is a leading global pharma innovator,
headquartered in Tokyo, Japan.

3.  Mission: Enriching lives globally, with quality and
affordable pharmaceuticals.
 Tag Line: Trusted Medicines. Healthier Lives
 Chairman: Dr. Tsutomu Une
 CEO & MD: Arun Sawhney
 Listed on Stock Exchanges: BSE Ltd., National Stock
Exchange of India Ltd., The Luxembourg Stock Exchange
(Global Depository Shares)

4.  Headquarters: Gurgaon, Haryana, India
 Established: 1961
 2013 Revenues: US$ 2.3 billion
 Employees: More than 14,600
 Area of Business: Develops, manufactures and markets
Generic, Branded Generic, Value-added and Over-the-
Counter (OTC) products, Anti-retrovirals (ARVs), Active
Pharmaceutical Ingredients (APIs), and Intermediates

5.  Product Portfolio: Over 500 molecules
 Global Presence: Ground operations in 43 countries,
products sold in over 150 countries
 Manufacturing: 21 manufacturing facilities spread
across 8 countries

6. FINANCIAL PERFORMANCE
 Sales for the India region for the 12 month period
ending March 2014 was Rs.22,796 million.
 Ranbaxy sales growth in the home market was slower
than the Indian pharmaceutical market sales growth,
affected by a larger part of Ranbaxy products coming
under price control (DPCO) and overall slower growth
of the acute segment, where Ranbaxy has a stronger
presence when compared to the chronic and lifestyle
segment.

7. Financial Performance for the quarter ended June
30, 2014 (Apr-Jun 2014)
 Consolidated Sales were Rs.23.7 Bn [Apr-June 2013:
Sales Rs.25.8 Bn]
 Earnings before Interest, Tax, Depreciation &
Amortization (EBITDA) was Rs.2.4 Bn.

8. GLOBAL SALES
 Consolidated sales for the Quarter were Rs.23.7 Bn as
compared to Rs.25.8 Bn during the corresponding quarter.
 North America: Sales for the Quarter were Rs.7.6 Bn.
 India: In the domestic market, sales for the Quarter were
Rs.6.1 Bn, a growth of 12% over the corresponding period.

9. FINANCIAL STATEMENT
Business and Financial
 On June 26, 2014, the Company received approval from
the Indian Food and Drug Administration to
manufacture and market Valsartan 40 mg, 80 mg, 160
mg, and 320 mg tablets on an exclusive basis. Valsartan
is indicated for the treatment of high blood pressure
and heart failure. Total annual market sales for
Diovan® were $2.19 billion (IMS – MAT: April 2014).

10.  The India business recorded 12% growth as against the
Indian PharmaMarket (IPM) growth of 10%. The
Company expects to continue the momentum in the
months ahead.

 Ranbaxy maintained its strong market share in India.
As of June 27, 2014 market share was 20%.

11. Balance Sheet as at 31 March 2014
(Rupees in millions except share data, per share data and unless otherwise
stated)
Particulars As at 31stMarch
2013
As at 31st march
2014
EQUITY AND LIABILITIES
Shareholders' funds
Share capital
Reserves and surplus
2116.60
8848.27
10,964.87
2114.57
17095.10
19,209.67

12. Share application money pending allotment
Non-current liabilities
Long-term borrowings
Other long-term liabilities
Long-term provisions
5.03
24,721.88
3,719.44
1,314.54
29,755.86
11.10
19,568.10
10,363.48
2739.04
32670.62
Current liabilities
Short-term borrowings
Trade payables
Other current liabilities
Short-term provisions
35,188.77
9,751.86
43,495.90
1,888.08
90,324.61
28,067.95
8,588.11
13,320.78
27,831.11
77,807.95

13. Total
ASSETS
Non-current assets
Fixed assets
Tangible fixed assets
Intangible fixed assets
Capital work-in-progress
Intangible fixed assets
under development
Non-current
investment
Deferred tax assets
(net)
Long-term loans and
advances
Other non-current
assets
131,050.37
19460.46
660.68
1791.80
44.53
40789.89
10779.89
1741.14
75268.59
129,699.34
19308.43
626.85
1465.37
130.59
31281.37
10107.12
215.70
63135.43

14. Current assets
Current investments
Inventories
Trade receivable
Cash and bank
balances
Short-term loans and
advances
Other current assets
18.95
16951.44
12374.65
7905.72
12732.86
5798.16
55781.78
30.32
17318.39
14358.88
28347.73
5041.48
1467.11
66563.91
Total 131050.37 129699.34

15. Statement of Profit and Loss for the fifteen months
ended 31 March 2014
(Rupees in millions except share data, per share data and unless
otherwise stated)
Particulars For the fifteen months
ended 31stMarch 2014
For the year ended 31st
December 2012
INCOME
Revenue from
operations
Sale of products (gross)
Less: Excise duty
Sale of products (net)
Other operating revenues
Other income
Total revenue
67010.59
440.20
66570.39
2078.98
68649.37
7848.90
76497.57
61403.57
279.14
61124.43
1911.01
63035.44
2571.63
66607.07

16. EXPENSES
Cost of materials
consumed
Purchases of stock-in-trade
Change in inventories
of finished goods,
work-in-progress and
stock-in-trade
Employee benefits
expenses
Finance costs
Depreciation and
impairment
Amortisation and
impairment
Other expenses
20653.28
9826.43
(1751.22)
12747.28
5470.48
2474.18
327.54
30418.44
61403.57
279.14
(492.45)
10195.89
2969.82
1610.70
250.91
25526.16

17. Total expenses 80166.41 63437.65
(Loss)/ profit before exceptional
items and tax
Exceptional items:
Profit on sale of intellectual
property rights
Settlement provision reversal
Provision in respect of non-current
investment in a subsidiary
Provision for other-than-temporary
diminution in value of noncurrent
investment in an associate
Inventory provision/ write off and
other costs
(3668.84)
4327.69
1458.05
(3050.96)
(713.11)
(3557.92)
2169.42
(1030.00)

18. Loss on foreign currency option
derivatives, net (other than on
loans)
Product recall expenses
(3279.16) (412.05)
(2370.20)
Loss before tax (8484.25) (1642.83)
Income tax expense
Current tax expense/ (benefit) 305.70 (19.44)
Loss after tax for the period (8789.95) (1623.39)
Loss per equity share [par value of
Rs. 5
(previous year Rs. 5) per equity
share]
Basic and diluted (20.79) (3.85)

19. Cash Flow Statement for the fifteen months ended 31 March
2014
(Rupees in millions except share data, per share data and unless
otherwise stated)
Particulars For the fifteen months
ended 31 March 2014
For the year ended
31 December 2012
A. Cash flow from
operating activities
Net loss before taxes
Adjustments for:
Depreciation and
impairment
Amortisation and
impairment
Fixed assets written off
Employee stock option
expense
(8848.25)
2474.18
327.54
25.58
326.59
(1642.53)
1610.70
250.91
35.34
222.47

20. Loss/ (profit) on sale of
fixed assets, net
Provision for
diminution in value of
current investments
Provision in respect of
non-current
investment in a
subsidiary
Provision for other-than-
temporary
diminution in value of
non-current
investment in an
associate
Finance costs
44.14
1.53
3050.96
713.11
5470.48
(9.54)
5.99
1030.00
2969.82

21. Provision/ write-off of
doubtful trade
receivables and loans
and advances
Non-compete fee –
Foreign exchange gain,
net (Refer to note 4
below)
Unrealised foreign
exchange gain, net on
currency options
Dividend on non-current
investments
with overseas
subsidiaries
34.44
(2729.68)
(4712.73)
(6121.32)
45.54
(210.00)
(1557.93)
(5341.23)
(10.04)

22. Profit on disposal/ sale
of non-current
investment
Unclaimed balances/
excess provision
written back
Interest income
(169.71)
(296.50)
(1390.22)
(2951.61)
(13.76)
(26.76)
(2236.64)
(3235.13)
Operating cash flow
before working capital
changes
Adjustments for:
Decrease/ (increase) in
inventories
Decrease in trade
receivables
(11435.86)
366.95
2076.95
(766.08)
24500.39
520.58

23. (Increase)/ decrease in
loans and advances and
other assets
Increase/ (decrease) in
trade payables, other
liabilities and
provisions
1193.28
(639.27)
(12272.32)
(11982.57)
Cash (used in)/
generated from
operations before taxes
Income taxes paid
Net cash (used in)/
provided by operating
activities
(12075.13)
(95.84)
(12170.97)
7104.61
(483.81)
6620.80

24. B. Cash flow from
investing activities
Purchase of fixed assets
Proceeds from sale of
fixed assets
Investments in
overseas subsidiaries
Decrease/ (increase) in
deposit accounts
(having original
maturity of more than
three months)
Proceeds from disposal
of non-current
investment
Increase in loans and
advances to
subsidiaries/ associate
(3478.99)
70.25
(12,200.74)
24627.50
179.55
(7384.96)
(2701.17)
74.27
(16038.18)
(34.48)

25. Interest received
Tax deducted at source
on interest income
Dividend on non-current
investments
with overseas
subsidiaries
Tax deducted at source
on dividend income
1709.88
(117.68)
6121.32
(305.70)
1980.63
(208.40)
10.04
Net cash provided by/
(used in) investing
activities 9220.43 (16917.29)

26. C. Cash flow from
financing activities
Proceeds from issue of
equity share capital
(including share
application money and
securities premium)
Increase in other short
term bank borrowings
(net)
Proceeds from long-term
bank borrowings
Long-term borrowings
from redeemable non-convertible
debentures
Re-payment of long-term
borrowings (Refer
to note 5 below)
72.75
972.03
5651.00
(486.88)
159.33
3270.37
5196.38
5000
(3241.67)

27. Proceeds from issue of
commercial papers
Re-payment of
commercial papers
Finance costs paid
(including premium
paid on derivative
instruments relating to
borrowings)
22366.93
(17803.11)
(3599.96)
3879.93
(9800)
(1318.84)
Net cash provided by
financing activities
Increase/ (decrease) in
cash and cash
equivalents
Cash and cash
equivalents at the
beginning of the period
7172.76
4222.22
665.71
3145.50
(7150.99)
7811.93

28. Effect of exchange gain
on cash and cash
equivalents
Cash and cash
equivalents at the end
of the period
(8.64)
4879.29
4.77
665.71

29. CAPITAL STRUCTURE
Every company has to have a balanced capital
structure, means should be balance of equity and debt
in the company’s capital formation. Traditionally firms
have looked at certain ratios to assess whether they
have A satisfactory capital structure. The commonly
used ratios are- interest coverage ratio, cash flow
coverage ratio, debt service coverage ratio and fixed
asset coverage ratio.

30. CAPITAL STRUCTURE OF RANBAXY
Period
From To
Instrument Authorized
capital
Rs cr.
Issued capital
Rs cr.
Paid up
Face value Capital
2013 2014
2012 2012
2011 2011
2010 2010
2009 2009
2008 2008
2007 2007
2006 2006
2005 2005
Eq. Share
Eq. Share
Eq. Share
Eq. Share
Eq. Share
Eq. Share
Eq. Share
Eq. Share
Eq. Share
299
299
299
299
299
299
299
299
299
211.66
211.46
211
210.52
210.21
210.18
186.54
186.34
186.22
5 211.66
5 211.46
5 211
5 210.52
5 210.21
5 210.18
5 186.54
5 186.34
5 186.22

31. CHANGES IN CAPITAL STRUCTURE
 Allotment of shares on exercise of Stock Options by
the Employees
During the period, the ESOPs Allotment Committee
allotted Equity Shares pursuant to exercise of stock
options granted prior to 2011 under the old ESOP Schemes
as summarised below:
 Date of Allotment No. of Shares
January 11, 2013 93,050
April 15, 2013 94,136

32. July 10, 2013 28,520
October 11, 2013 12,273
January 10, 2014 37,281
The Allotment Committee of Directors on December
11, 2013, allotted 600,000 Equity Shares of Rs.5 each for
cash at par to Ranbaxy ESOP Trust (Trust), set up to
administer Ranbaxy Employee Stock Option Plan-2011
(ESOP-2011). The Trust allocates the shares to the
employees of the Company and of its subsidiaries on
exercise of stock options from time to time under
ESOP-2011.

33. WORKING CAPITAL
“Working capital includes the current assets and
current liabilities areas of the balance sheet. Working
capital can be called by it’s alternative name – Net
current assets.”
Working capital management is the process of
planning and controlling the level and mix of current
assets of the firm as well as financing these assets.
“It is also regarded as the life of business”

34. Working capital management of Ranbaxy
Defining the problem
Areas of working capital has different problems and
these are discussed as follows:-
Stock Control
Problem:-
If too much stock is held, the organisation wastes
money through a variety of factors

35. Debtor control
Problem:-
“ It is better to have cash in your bank account than in
your customers”
Cash flow management
Cash flow managent is about achieving maximum
effectiveness of cash receipts and payment
Creditor control
Creditor control is managing your relationship with
organisations or people you owe money e.g. suppliers

36. LOAN
 Ranbaxy Laboratories, are going to raise loans if cash
outflow from additional forex loss continues this
fiscal.
 "In 2008, cash outgo on forex losses cancelled all the
operating profit. With very little operating profit
expected this year, forex losses are likely to deliver a
significant cash outflow, even if there is a marginal
gain because of the appreciating rupee. The company
may have to raise more debt to settle these losses.

37.  Ranbaxy recorded a loss of about Rs 2,670 crore ($540
million) on forex contracts in 2008. This was booked
under current liabilities, implying that the cash
outflow may happen this fiscal. But amendment to the
accounting norms made this year allows companies
not to book forex losses in their books.
 If the rupee dollar exchange rate stays at Rs 57 ,the
company may actually make a forex gain of over $100
million this quarter." As much as 80% of Ranbaxy's
$1.6 billion sales comes from overseas markets, making
it vulnerable to forex swings.

38.  Ranbaxy scrip rose 1.05% to close at Rs 177.50 at the
Bombay Stock Exchange. At present, Ranbaxy has a
cash reserve of around $300 million, largely
representing the balance from the $735 million
preferential allotment made to Daiichi Sankyo
 Commenting on the business results for the Quarter,
Arun Sawhney, CEO & Managing Director, Ranbaxy,
said, “We continue to work towards growing our base
business with focus on emerging markets, while at the
same time, restoring the business on growth trajectory
in our traditional markets such as India.”

39. AGENCY PROBLEM
 During 2004–2005, Dinesh Thakur and Rajinder
Kumar, two Indian employees of Ranbaxy, blew the
whistle on Ranbaxy's fabrication of drug test reports.
Thakur's office computer was soon found tampered
with. Ranbaxy then accused Thakur of visiting graphic
websites using his office computer, forcing him to
resign in 2005. Thakur escaped from India to the USA
and contacted the FOOD and Drug Administration
which started investigating his claims.

40.  As a result, on 16 September 2008, the Food and Drug
Administration issued two warning letters to Ranbaxy
Laboratories Ltd. and an Import Alert for generic
drugs produced by two manufacturing plants in
India. By 25 February 2009 the US Food and Drug
Administration said it halted reviews of all drug
applications including data developed at
Ranbaxy's Paonta Sahib plant in India because of a
practice of falsified data and test results in approved
and pending drug applications.

41.  On 8 February 2012, three batches of the proton-pump
were recalled in the Netherlands due to the presence
of impurities.
 On 9 November 2012, Ranbaxy halted production and
recalled forty-one lots of atorvastatin due to glass
particles being found in some bottles. Also in 2012, an
apparent dosage mistake was reported in which 20 mg
tablets were found in a bottle of atorvastatin labeled as
containing 10 mg tablets; this led in 2014 to the
voluntary recall in the United States of some 64,000
bottles.

42.  In September 2013, further problems were reported,
including apparent human hair in a tablet, oil spots on
other tablets, toilet facilities without running water,
and a failure to instruct employees to wash their hands
after using the toilet. Ranbaxy is prohibited from
manufacturing FDA-regulated drugs at the Mohali
facility until the company complies with U.S. drug
manufacturing requirements.