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AMITY UNIVERSITY

Summer Project
An Analysis of the Pharmaceutical Industry using Ratio Analysis.

Submitted to: Divya Goel Senior Lecturer Amity University

Submitted to: Divya Vishwanadh BBA + MBA

The above project gives a brief outlook of the pharmaceutical industry and also does an Analysis based on accounting ratios of 5 companies to understand where it stands and also make us realise its importance and its practicality in the real business world.

Acknowledgements
I would like to thank Divya Goel Maam for her immense, valuable and continuous support throughout my work without which completion of this project may not had been possible.

Contents:
Introduction Research Methodology Main Companies Chosen Company Profiles Organization Structures Current Market Share SWOT Analysis of Pharmaceutical Industry Financials of Cadillazydous Financial Analysis of Cadillazydous Financials of Cipla Financial Analysis of Cipla Financials of Dr.Reddy Financial Analysis of Dr.Reddy Financials of Panacea Biotec Financial Analysis of Panacea Biotec Financials of Sun Pharma Financial Analysis of Sun Pharma Financial Analysis ( Inter-Firm) Conclusion Bibliography 3 4 5 6-10 11-12 13 14-15 16-26 27-28 29-40 41-43 44-55 56-57 58-68 69-70 71-82 83-84 85 85 86

Introduction
The Indian Pharmaceutical Industry today is in the front rank of Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. A highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously. By playing a key role in promoting and sustaining development in the vital field of medicines, Indian Pharma Industry boasts of quality producers and many units approved by regulatory authorities in USA and UK. International companies associated with this sector have stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped to put India on the pharmaceutical map of the world. The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical companies control 70% of the market with market leader holding nearly 10% of the market share. It is an extremely fragmented market with severe price competition and government price control. The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. There are about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). These units produce the complete range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations.

Research Methodology
The objective of the project is to analyse which company in the pharmaceutical sector is financially sound on the basis of ratio analysis. Since there are 4 parameters involved, we find out which company is fulfilling all the necessary requirements to be financially sound. The research design is exploratory in nature. Secondary data has been used to do the above analysis i.e. Annual reports, company websites

Main Companies Chosen.


The main companies taken for this project are SunPharma, Cadillazydous, Dr.Reddys, Cipla and Panacea Biotech. We have chosen these companies as they have good reputation and also quite a large market share. They also contribute a lot to the Indian GDP.

Sun Pharma
They make specialty pharmaceuticals and active pharmaceutical ingredients. Their brands are prescribed in chronic therapy areas like cardiology, psychiatry, neurology, gastroenterology, and diabetology and respiratory. They have the same drive for growth that marked our early days. Sun Pharma came into existence as a startup with just 5 products in 1983. In the time since, they have crossed several milestones to emerge as a leading pharma company in India, a rank that they have now been at for more than 5 years. They have reached leadership in each of the therapy areas that they operate in, and are rated among the leading companies by key customers. Strengthening market share and keeping this customer focus remains a high priority area for the company. In the post 1996 years, they have used a combination of internal growth and acquisitions to drive growth; important mergers were those of the US, Detroit based Caraco Pharm Labs and that of the plant at Halol which is now UKMHRA and USFDA approved. Under a recent corporate development, the areas related to new molecular entities and drug delivery systems are proposed to be demerged into a separate company.

Dr. Reddys
Established in 1984, Dr. Reddys Laboratories is an emerging global pharmaceutical company. As a fully integrated pharmaceutical company, the purpose is to provide affordable and innovative medicines through their three core businesses: * Pharmaceutical Services and Active Ingredients, comprising of Active Pharmaceuticals and Custom Pharmaceuticals businesses; * Global Generics, which includes branded and unbranded generics; and * Proprietary Products, which includes New Chemical Entities (NCEs), Differentiated Formulations, and Generic Biopharmaceuticals.

Their products are marketed globally, with a focus on India, US, Europe and Russia. Dr. Reddys conducts NCE research in the areas of metabolic disorders, cardiovascular indications, anti-infective and inflammation. Their strong portfolio of businesses, geographies and products gives us an edge in an increasingly competitive global market and allows them to provide affordable medication to people across the world, regardless of geographic and socio-economic barriers.

Panacia Biotec
Panacea Biotech occupies a distinct position in the Indian pharmaceutical and biotechnology industry with its business model focusing on innovation, collaboration and brand building. The Company has endeavoured to provide research based products to fulfil the unmet medical needs. The Company has established infrastructure and capabilities in research & development, manufacturing and marketing of vaccines, pharmaceuticals and biopharmaceuticals. Panacea Biotec occupies the position of the2nd largest vaccine producer in India and has been ranked as the 3rd largest biotechnology Company. Based on the finished pharmaceutical formulations business, the Company is placed at 48th rank amongst pharmaceutical companies in India. The Company has also moved ahead towards diversification in the field of healthcare through its subsidiaries as part of its corporate vision to become a leading Health Management Company. The Company has been granted 26 product patents worldwide valid in more than 60 countries including the U.S., E.U. Member State, Russia, Japan, China, South Korea, Australia and Brazil.

Cadillazydous
Cadillazydous is an innovative global pharmaceutical company that discovers, develops, manufactures and markets a broad range of healthcare products. The groups operations range from API to formulations, animal health products and cosmeceuticals. Headquartered in the city of Ahmadabad in India, the group has global operations in four continents spread across USA, Europe, Japan, Brazil, South Africa and 25 other emerging markets. In its mission to create healthier communities globally, Cadillazydous delivers wide ranging healthcare solutions and value to its customers. With over 11,000 employees worldwide, a world-class research and development centre dedicated to discovery research and eight state-of-the-art manufacturing plants, the group is dedicated to improving peoples lives.

Cipla
Khwaja Abdul Hamied, the founder of Cipla, was born on October 31, 1898. The fire of nationalism was kindled in him when he was 15 as he witnessed a wanton act of colonial highhandedness. The fire was to blaze within him right through his life. In college, he found Chemistry fascinating. He set sail for Europe in 1924 and got admission in Berlin University as a research student of "The Technology of Barium Compounds". He earned his doctorate three years later. In October 1927, during the long voyage from Europe to India, he drew up great plans for the future. He wrote: "No modern industry could have been possible without the help of such centres of research work where men are engaged in compelling nature to yield her secrets to the ruthless search of an investigating chemist." His plan found many supporters but no financiers. However, Dr Hamied was determined to being "a small wheel, no matter how small, than is a cog in a big wheel." In 1935, he set up The Chemical, Industrial & Pharmaceutical Laboratories, which came to be popularly known as Cipla. He gave the company all his patent and proprietary formulas for several drugs and medicines, without charging any royalty. On August 17, 1935, Cipla was registered as a public limited company with an authorised capital of Rs 6 lakhs. The search for suitable premises ended at 289, Bellasis Road (the present corporate office) where a small bungalow with a few rooms was taken on lease for 20 years for Rs 350 a month. Cipla was officially opened on September 22, 1937 when the first products were ready for the market. The Sunday Standard wrote: "The birth of Cipla which was launched into the world by Dr K A Hamied will be a red letter day in the annals of Bombay Industries. The first city in India can now boast of a concern, which will supersede all existing firms in the magnitude of its operations. India has lagged behind in the march of science but she is now awakening from her lethargy. The new company has mapped out an ambitious programme and with intelligent direction and skilful production bids fair to establish a great reputation in the East. "

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Organisation Structure
Sun Pharma:
Chairman Managing Director Independent Director Whole time Director General Manager Deputy General Manager Assistant General Manager

Dr Reddys:
Chairman Vice-Chairman and CEO Managing Director Independent Director General Manager Deputy General Manager Assistant General Manager

Panacea Biotec:
Chairman Managing Director Joint Managing Director Independent Director General Manager 11

Deputy General Manager Assistant General Manager

12

Cadillazydous:
Chairman Managing Director Deputy Managing Director Independent Director General Manager Deputy General Manager Assistant General Manager

Cipla:
Chairman Managing Director Joint Managing Director Non-Executive Director General Manager Deputy General Manager Assistant General Manager

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Current Market Share:


Panacea Biotec stands with a market share of 7%. Next is Cipla with a share of 5.85% Next is Sun pharmaceutical with a market share of 5.5%. Next is Dr.Reddys with a market share of 4.3%. Last is Cadillazydous with a share of 3.59%.

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SWOT Analysis of Pharmaceutical Industry:


Strengths:

Cost effective technology. Strong and well-developed manufacturing base. Clinical research and trials. Knowledge based low- cost manpower in science & technology. Proficiency in path-breaking research. High-quality formulations and drugs. High standards of purity. Non-infringing processes of Active Pharmaceutical Ingredients (APIs). Future growth driver. World-class process development labs. Excellent clinical trial centres. Chemical and process development competencies.

Weakness:
Low Indian share in world pharmaceutical market (about 2%) Lack of strategic planning Fragmented capacities Low R&D investments Absence of association between institutes and industry Low healthcare expenditure Production of duplicate drugs

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Opportunities:
Incredible export potential Increasing health consciousness New innovative therapeutic products Globalization Drug delivery system management Increased incomes Production of generic drugs Contract manufacturing Clinical trials & research Drug molecules

Threats:
Small number of discoveries Competition from MNCs Transformation of process patent to product patent (TRIPS) Outdated Sales and marketing methods Non-tariff barriers imposed by developed countries

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Financials of Cadillazydous
INR-Millions As at 31st March 2009 S OUR E OFF CS UND : S S hareholder'sfunds : Share Capital Reserves and surplus L oan F unds : Secured loans Unsecured loans Deferred tax liability Total AP L ATIONOFF P IC UND : S F ixed As ets s : Gross Block Depreciation, Amortization and impairment Net Block Capital Work-in-Progress Inves ents tm : Net C urrent Ass , L ets oansand Advances : C urrent As ets L s , oansand Advances Inventories Sundry Debtors Cash and Bank Balances Loans and Advances L s urrent L es :C iabilitiesand P rovis ions Current Liabilites Provisions 2008

682 11646 12328 6367 1832 8199 1259 21786

628 9910 10538 5593 1796 7389 1224 19151

13585 5216 8369 1173 9542 5954

12410 4571 7839 964 8803 4427

3490 3819 256 2409 9974 2935 1053 3988 5986 304 21786

3310 2825 190 3355 9680 2776 983 3759 5921 0 19151

Foreign Currency Monetary Items Translation amt

17

Incom e S and incom fromoperation: ale e Gross Sales Less: Excise Duty Net Sales Other Income from Operations Total Other Income E xpenditure Consumption of materials and finished goods General expenses Research Expenses Interest and Financial Charges Depreciation, Amortization and Impairment Profit before tax and exceptional items less: exceptional items: Compensation under Voluntary Retirement Scheme Expenses incurred on Composite Scheme Arrangement Profit before tax less :provision for tax Profit after tax Add: Balance brought forward Add: persuant to a composite scheme of arrangement

Schedule

INR-Millions As on 31st March 2009 2008 17374 389 16985 2472 19457 595 20052 6498 7174 1582 880 826 16960 3092 0 128 128 2964 305 2659 1628 38 1666 17391 771 16420 1029 17449 491 17940 6313 6432 1350 326 734 15155 2785 48 0 48 2737 375 2362 841 0 841 3203 565 96 661 914 1575 1628

P rofit available for Appropriations : Dividends: Proposed Dividend Corporate dividend tax on proposed dividend Transfer to general Reserve Balance carried to Balance sheet 614 105 719 1576

4325

2295 2030

18

S chedule : 1- General E xpens : es Personnel expenses : Salaries, wages and bonus Company's contribution to provident & other funds Staff welfare expenses Stores and spare parts consumed Power & fuel Processing Charges Insurance Repairs : Buildings Plant and Machinery Others Rent Rates and Taxes Managing Directors' Remuneration Commission to Directors Traveling Expenses Legal and Professional Fees Loss on account of fluctuations in foreign exchange rates [ Net ] Miscellaneous Expenses Marketing, Selling & Distribution Expenses : Commission on sales Freight and forwarding on sales Sales promotion expenses Advertisements Seminar, Conference and Exhibition Representative Allowances and Incentives Bad debts written off Provision for Doubtful Debts Other marketing expenses Directors' fees [ Rs 0.30 {Previous year - Rs. 0.22 }Millions ] Loss on sale of long term Investments [ Rs 0.14 Millions ] Donations Total S chedule - 2 C urrent L iabilities Acceptances Sundry Creditors other than Micro, Small and Medium Enterprises Advances from Debtors Trade Deposits Unclaimed dividends Interest accrued but not due on loans

1600 105 101

1806 172 463 257 42

1434 127 96

1657 226 419 260 41

30 126 36

192 32 4 163 3 453 178 329 553

29 40 28

97 30 7 155 3 468 326 0 616

254 516 435 18 163 442 20 31 571

2450 0 0 77 7174

216 460 333 277 137 302 22 -3 372

2116 0 8 3 6432

0 2832 32 19 11 41 2935

235 2430 39 15 10 47 2776

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INR - millions As at 31st march S OUR E OFF CS UND : S S hareholder'sfunds : Share Capital Reserves and surplus 2008 628 9910 10538 L oan F unds : Secured loans Unsecured loans Deferred tax liability Total AP L ATION OFF P IC UND : S F ixed As ets s : Gross Block Depreciation, Amortization and impairment Net Block Capital Work-in-Progress Inves ents tm : Net C urrent As ets L s , oansand Advances : C urrent As ets L s , oansand Advances Inventories Sundry Debtors Cash and Bank Balances Loans and Advances L s urrent L es :C iabilitiesand P rovis ions Current Liabilites Provisions 12410 4571 7839 964 8803 4427 11292 3877 7415 521 7936 2928 2007 628 8195 8823

5593 1796 7389 1224 19151

3627 850 4477 1127 14427

3310 2825 190 3355 9680 2776 983 3759 5921 19151

3287 2386 124 2273 8070 3764 743 4507 3563 14427

Total

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Schedule S and incom fromoperation: ale e Gross Sales Less: Excise Duty Net Sales Other Income from Operations Total Other Income

INR-Millions As on 31st March 2008 2007 17391 771 16420 996 17416 399 17815 6313 6432 1350 201 734 15030 2785 48 0 48 2737 375 2362 841 0 841 15014 877 14137 482 14619 522 15141 5249 5439 1291 176 667 12822 2391 0 0 0 2391 272 2119 2381 0 2381 4500 502 85 587 3000 3587 913

Consumption of materials and finishesd goods General expenses Research Expenses Interest and Financial Charges Depreciation, Amortization and Impairment Profit before tax and exceptional items less: exceptional items: Compensation under Voluntary Retirement Scheme Expenses incurred on Composite Scheme Arrangement Profit before tax less :provision for tax Profit after tax Add: Balance brought forward Add: persuant to a composite scheme of arrangement

P rofit available for Appropriations : Dividends: Proposed Dividend Corporate dividend tax on proposed dividend Transfer to general Reserve Balance carried to Balance sheet 565 96 661 914

3203

1575 1628

21

S chedule : 1- General Expens : es Personnel expenses : Salaries, wages and bonus Company's contribution to provident & other funds Staff welfare expenses Stores and spare parts consumed Power & fuel Processing Charges Insurance Repairs : Buildings Plant and Machinery Others Rent Rates and Taxes Managing Directors' Remuneration Commission to Directors Traveling Expenses Legal and Professional Fees Loss on account of fluctuations in foreign exchange rates [ Net ] Miscellaneous Expenses Marketing, Selling & Distribution Expenses : Commission on sales Freight and forwarding on sales Sales promotion expenses Advertisements Seminar, Conference and Exhibition Representative Allowances and Incentives Bad debts written off Provision for Doubtful Debts Other marketing expenses Directors' fees [ Rs 0.30 {Previous year - Rs. 0.22 }Millions ] Loss on sale of long term Investments [ Rs 0.14 Millions ] Loss on assets sold/discarded Donations Total S chedule - 2 C urrent L iabilities Acceptances Sundry Creditors other than Micro, Small and Medium Enterprises Advances from Debtors Trade Deposits Unclaimed dividends Interest accrued but not due on loans

1434 127 96

1657 226 419 260 41

1355 88 82

1525 208 343 212 49

29 40 28

97 30 7 155 3 468 326 0 616

22 39 23

84 21 4 124 2 348 172 45 432

216 460 333 277 137 302 22 -3 372

2116 0 8 0 3 6432

186 363 299 251 102 263 3 17 343

1827 0 0 27 16 5439

235 2430 39 15 10 47 2776

399 3625 40 19 10 31 4124

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Ratios
C urrent R atio:
Current Liablities includes deferred tax liability Current Assets Current Liabilities

20 09 9542.0 5247.0 1.82

20 08 9680.0 4983.0 1.94 3015.0 4983.0 0.61 7389.0 10538.0 0.70 18,483.0 7,389.00 2.50 10,538.0 18,483.0 0.57 802.5 3,287.00 0.24

Liquid Assets Current Liquid Assets (Cash, Debtors and Other current asset) Liabilities

QuickR atio:

4075.0 5247.0 0.78

Debt E quity R atio


Debt includes bothsecured & Unsecured loans Equity includes shareholder's funds

Debt Equity

8199.0 12328.0 0.67 19,516.0 8,199.0 2.38 12,328.0 19,516.0 0.63 859.4 3,400.00 0.25

Total Assetsto Debt R atio


Debt includes bothsecured & Unsecured loans Total Assets include fixed and Current Assets

Total Assets Debt

Proprietery R atio

Shareholder's funds Total Assets

S tockTurnover R atio
Cost of goods sold include all factory expenses i.e

Cost of Goods Sold Average Stock

Stores and spare parts consumed Power & fuel Processing Charges Insurance Repairs : Buildings Plant and Machinery Others Rent

100% 60% 100% 40% 10% 100% 10% 10%

172.0 277.8 257.0 16.8 3.0 126.0 3.6 3.2 859.4

226.0 251.4 260.0 16.4 2.9 40.0 2.8 3.0 802.5 16,985.00 3,322.00 5.11 16,420.00 2,605.50 6.30 16,420.00 3,027.50 5.42 16,420.00 5,921.00 2.77

DebtorsTurnover R atio
(average a/c recievables include sundry debtors)

Net Sales Average A/c Recievables

C reditorsturnover ratio
(average a/c payables include sundry creditors)

Net Sales Average A/c Payables

16,985.00 2,631.00 6.46

Net Sales Net Working (Working Capital =Current Assets-Current Liabilities) Capital

W orkingC apital Turnover R atio

16,985.00 5,986.00 2.84

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F e A s tsT rn e R tio ix d s e u ov r a

Net S ales Net Fix ed Assets

1 6,985 .00 9,54 0 2.0 1 .78

1 20 6,4 .00 8,803.0 0 1 .87 1 20 6,4 .00 9,680.0 0 1 .70 1 17 5,6 .50 1 20 6,4 .00 95 % .11 2,737.0 0 1 20 6,4 .00 16 % .67 2,362.0 0 1 20 6,4 .00 14 % .38

C rre t A s tsT rn v r R tio u n se u o e a

Net S ales C urrent Assets

1 6,985 .00 9,97 0 4.0 1 .70 x10 0 1 6,125 .60 1 6,985 .00 94 % .94 2,96 0 4.0 1 6,985 .00 17 % .45 2,65 0 9.0 1 6,985 .00 15 % .65

G sP ro s rofit R tio a
(G ross Profit =S ales- C of G ost oods S old)

G ross Profit Net S ales

N t P fit R tio e ro a

Net Profit Net S ales

x10 0 (PB T)

(PAT) C of g ost oods sold+ irect D E penses x Net S ales

O e tin R tio p ra g a
(D irect E penses include O x ffice and Adm inistration, Marketingand S ellingE penses) x

x10 0

5,19 0 9.6

4,626.7 0

1 6,985 .00 30 % .61

1 20 6,4 .00 28 % .18

D irect E penses: x Insurance B uilding s O thers R ent R ates and Tax es Mana ingD g irectors' R uneration em C m om ission to D irectors TravelingE penses x Leg and Professional Fees al Losson account of fluctuations in foreig ex ng n cha e rates [ Net ] Miscellaneous E penses x Marketing S , elling& D istributionE penses : x C m om ission on sa les Freig and forwardingon sales ht S ales prom otion ex penses Advertisem ents S inar, C em onference and E hibition x R epresentative Allowances and Incentives B debts written off ad Provision for D oubtful D ebts O ther m arketingex penses D irectors' fees [ R 0.30{Previous year - R 0.2 } s s. 2 Millions] Losson sale of longtermInvestm ents [ R 0 s .14 Millions] D onations Tota l

42 27 32.4 28.8 4 16 3 3 45 3 17 8 32 9 55 3 254 516 435 18 163 442 20 31 571 216 460 333 277 137 302 22 -3 372

41 29 2 5.2 27 7 155 3 468 326 0 616

245 0 0 0 77 434 0.2

2116 0 8 3 38 .2 24

R tu o In e tm n e rn n v s e t
(PB is Profit B ITD efore Interest, taxand D idend) iv

PB ITD C apita l E ployed m

x 100

2,08 0 4.0 2 0,527 .00 10 % .15

2,459.0 0 1 27 7,9 .00 13 % .72

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Rt s a io
C r e tR t : u r n a io
C rre t L b u n ia litiesin lu e d ferre ta lia ility c ds e d x b C rre t As ts u n se C rre t u n L bilitie ia s

20 07

8 7 .0 00 4 0 .0 57 1 9 .7

Q ic R t : u k a io
L uidAs ets(C s , D torsa dO e c rren a se iq s a h eb n th r u t s t)

L u As ets iq id s C rre t u n L bilitie ia s

2 1 .0 50 4 0 .0 57 0 6 .5

D b E u yR t e t q it a io
D bt inc de b s ure &Un c re loa s e lu s oth ec d se u d n E u in lud ss re q ity c e ha hold r'sfu ds e n

D t eb Eu q ity

4 7 .0 47 8 2 .0 83 0 1 .5 1 ,0 6 6 0 .0 4 7 .0 ,4 7 3 8 .5 8 2 .0 ,8 3 1 ,0 6 6 0 .0 0 5 .5 1 5 .1 66 3 8 .0 ,2 7 0 0 0 .5

T t lA s t t D b R t o a s e s o e t a io
D bt inc de b s ure &Un c re loa s e lu s oth ec d se u d n T l As e in lud fix da C rren As e ota s ts c e e nd u t s ts

T lA e ota ss ts D t eb

P o rie e yR t r p t r a io

Sa h h re olde r's fu d ns T lA e ota ss ts

So kT rn v rR t t c u o e a io
C t of g os oodss in lu ea fa torye pe s i.e old c d ll c x n es O e E p ne th r x e s s S toresa ds a p rtsc um n p re a ons ed Pow r &fue e l Proc s gC a e es in h rg s In ura c s ne R p irs: ea Person l E p s s ne x en e B ild g u in s Pla t a dMa h e n n c in ry O ers th Rn et

C of G s ost ood S old Av ra eS k e g toc

6% 0

28 0 25 0 .8 22 1 4 9 95 1 2 .2 3 9 2 3 2 .1 1 5 .1 66

6% 0 1% 0

1% 0

D b o sT rn v rR t e t r u o e a io
(a e g a re ie a le in lud s d d b ) v ra e /c c v b s c e un ry e tors

Ne S le t a s Av ra eA/c e g R ie a les ec v b

1 ,1 7 0 4 3 .0 2 8 .0 ,3 6 0 5 2 .9

C e it rst rn v rra io rd o u oe t
(a e g a pa a lesin lud sun ryc d v ra e /c y b c e d re itors )

Ne S le t a s Av ra eA/c e g Pa a le yb s

1 ,1 7 0 4 3 .0 3 2 .0 ,6 5 0 3 0 .9

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Net Sales Net Working (Working Capital =Current Assets-Current Liabilities) Capital

W orkingC apital Turnover R atio

14,137.00 3,563.00 3.97

F ixed AssetsTurnover R atio

Net Sales Net Fixed Assets

14,137.00 4,427.00 3.19

C urrent AssetsTurnover R atio

Net Sales Current Assets

14,137.00 8,070.00 1.75 x 100 12,480.90 14,137.00 88.29% 2,215.00 14,137.00 15.67% 2,119.00 14,137.00 14.99%

Gros Profit R s atio


(Gross Profit =Sales - Cost of Goods Sold)

Gross Profit Net Sales

Net Profit R atio

Net Profit Net Sales

x 100 (PBT)

(PAT)

26

OperatingR atio
(Direct Expenses include Office and Administration, Marketing and Selling Expenses)

Cost of goods sold+ Direct x 100 Expenses Net Sales

5,371.50

14,137.00 38.00%

Direct E xpens : es Personnel Expenses Rent Insurance Repairs : Buildings Others Rates and Taxes Managing Directors' Remuneration Commission to Directors Traveling Expenses Legal and Professional Fees Loss on account of fluctuations in foreign exchange rates [ Net ] Miscellaneous Expenses Marketing, Selling & Distribution Expenses : Commission on sales Freight and forwarding on sales Sales promotion expenses Advertisements Seminar, Conference and Exhibition Representative Allowances and Incentives Bad debts written off Provision for Doubtful Debts Other marketing expenses Directors' fees Loss on sale of long term Investments Loss on assets sold/discarded Donations Total

610 18.9 49 19.8 20.7 4 124 2 348 172 45 432 186 363 299 251 102 263 3 17 343

1827 0 0 27 16 3715.4 x100 2,536.00 17,927.00 14.15% 27

R eturn on Investm ent


(PBITD is Profit Before Interest, tax and Dividend)

PBITD Capital Employed

Financial Analysis (Intra-firm)


CADILLAZYDUS
Current Ratio: In 2007-08, the current ratio has increased from 1.79 to 1.94. But the ratio has declined from 1.94 to 1.82 during 2008-09. This has happened due to an increase in current liabilities and a decrease in current assets. Since the ideal current ratio is 2:1, the ratio for this company is slightly lower than the standard. Quick Ratio: In 2007-08, the quick ratio has increased from 0.56 to 0.61. The ratio has again increased from 0.61 to 0.78 during 2008-09. This has happened due to an increase in current liabilities and in liquid assets. Since the ideal liquid ratio is 1:1, the ratio for this company is slightly lower than the standard. Debt-Equity Ratio: In 2007-08, the current ratio has increased from 0.56 to 0.70. But the ratio has declined from 0.70 to 0.67 during 2008-09. This has happened due to an increase in debt and in equity. Since the ideal current ratio is 2:1, the ratio for this company is slightly lower than the standard. Total Assets to Debt ratio: In 2007-08, the Total asset to debt ratio has decreased from 3.58 to 2.50. It has again declined from 2.50 to 2.38 during 2008-09. This has happened due to an increase in debt and in total assets. Proprietary Ratio: In 2007-08, the proprietary ratio has increased from 0.55 to 0.57. The ratio has again increased from 0.57 to 0.63 during 2008-09. This has happened due to an increase in Shareholders Funds and in total assets. Stock Turnover Ratio: In 2007-08, the stock turnover ratio has declined from 0.50 to 0.24. But the ratio has increased from 0.24 to 0.25 during 2008-09. This has happened due to an increase in average stock and a decrease in cost of goods sold. Debtors turnover ratio: In 2007-08, the debtors turnover ratio has increased from 5.92 to 6.30. But the ratio has declined from 6.30 to 5.97 during 2008-09. This has happened due to an increase in Net Sales and slight increase in Average Account Receivables. Creditors turnover ratio: In 2007-08, the creditors turnover ratio has increased from 3.90 to 5.42. But the ratio has again increased from 5.42 to 6.46 during 2008-09. This has happened due to an increase in net sales and a decrease in creditors. Working capital turnover ratio: In 2007-08, the working capital turnover ratio has decreased from 3.97 to 2.77. But the ratio has increased from 2.77 to 2.84 during 2008-09. This has happened due to an increase in Net sales. Current Assets turnover ratio: In 2007-08, the Current asset turnover ratio has decreased from 1.75 to 1.70. But the ratio has remained the same during 2008-09. This has happened due to an increase in current assets and a slight increase in net sales.

28

Fixed Assets turnover ratio: In 2007-08, the fixed asset turnover ratio has decreased from 3.19 to 1.87. The ratio has again declined from 1.87 to 1.78 during 2008-09. This has happened due to an increase in fixed assets and a slight increase in net sales. Gross Profit ratio: In 2007-08, the gross profit ratio has increased from 88.5% to 95.11%. But the ratio has declined from 95.11% to 94.94% during 2008-09. This has happened due to an increase in gross profit and in net sales. Net Profit ratio: In 2007-08, the net profit ratio before tax has increased from 14.67% to 15.67%. The ratio has again increased from 15.67% to 17.45% during 2008-09. This has happened due to an increase in net profit and net sales. In 2007-08, the net profit ratio after tax has decreased from 14.99% to 14.38%. But the ratio has increased from 14.38% to 15.65% during 2008-09. This has happened due to an increase in net profit and in net sales. Operating Ratio: In 2007-08, the operating ratio has decreased from 38% to 28.18%. But the ratio has increased from 28.18% to 30.61% during 2008-09. This has happened due to a slight variation in operating cost and an increase in net sales. Return on Investment: In 2007-08, the return on investment has decreased from 14.15% to 13.72%. The ratio has again declined from 13.72% to 10.15% during 2008-09. This has happened due to an increase in capital employed and a decrease in Profit before Interest, Tax and Dividend.

29

Financials of Cipla
Rupees in million As on 31st March Schedule S OUR E OFF CS UNDS : S hareholder'sfunds: Share Capital Reserves and surplus L oan F unds : Secured loans Unsecured loans Deferred tax liability Total AP L ATION OFF P IC UNDS : F ixed As ets s : Gross Block Less:Depreciation Net Block Capital Work-in-Progress Inves ents: tm Net C urrent As ets L s , oansand Advances : C urrent As , L sets oansand Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances L s urrent L es :C iabilitiesand P rovis ions Current Liabilites Provisions 2009 2008

155.5 4195.3 4350.8 2.8 937.5 940.2 164.2 5455.1

155.5 3600.4 3755.8 17.0 563.6 580.5 149.2 4485.5

2693.3 700.8 1992.5 366.3 2358.8 81.3

2201.8 540.4 1661.4 233.1 1894.5 94.8

1398.3 1837.2 53.0 23.5 1107.7 4419.6 2 1012.9 391.7 1404.6 3015.0 5455.1

1120.5 1393.9 79.3 34.5 1115.8 3744.0 830.9 416.8 1247.7 2496.3 4485.5

Total

30

Schedule Incom e Gross Sales Less: Excise Duty Net Sales Other Income

INR-Millions As on 31st March 2009 2008 5021.6 4088.6 61.0 90.7 4960.6 3997.9 366.2 340.3 5326.8 4338.2 2347.4 271.3 239.1 1147.4 235.5 32.5 0.4 151.8 4425.5 901.3 101.0 15.0 8.5 2042.7 214.0 194.1 716.9 204.6 10.7 0.6 116.3 3499.9 838.4 94.0 36.5 6.4 701.4 390.4 1091.8 155.5 26.4 400.0 509.9 1091.8

Expenditure

Material Cost Employee Cost Manufacturing Expenses Other Expenses Research and Development Expenses Interest - Fixed period - Others Depreciation P rofit before Tax Provision for Tax: - Current Tax - Deferred Tax - Fringe Benefit Tax P rofit after Tax Surplus brought forward from last Balance Sheet Profit available for Appropriation

124.5 776.8 509.9 1286.7 155.5 26.4 150.0 954.8 1286.7

136.9

Appropriations Proposed Dividend Tax on Dividend Transferred to General Reserve Surplus carried forward

31

S H DUL S C E E S chedule1- Other E xpens es Stores & Spares Power & Fuel Rent Rates & Taxes Insurance Repairs & Maintenance: Machinery Buildings Others Printing & Stationery Conveyance & Vehicle Expenses Remuneration to Auditors Audit Fees Tax Audit Fees Cost Audit Fees Other Services Professional Fees Telephone, Postage & Telegram Selling Expenses Freight & Forwarding Travelling Expenses Donations Commission on Sales Bank & Other Financial Charges Directors Sitting Fees Miscellaneous Expenses Provision for Doubtful Debts Bad Debts written off Exchange Loss (Net) Loss on sale/discard of Fixed Assets (Net) 0.3 0.0 0.0 0.0 23.5 37.3 12.2 52.2 91.7 7.7 8.9 3.9 15.3 33.8 13.2 48.5 74.7 4.0 6.5 11.6

73.1 16.6 8.5

62.3 13.6 8.9

0.4 79.8 18.3 108.6 47.2 72.8 1.2 219.8 19.3 0.1 50.0 34.0 1.6 228.4 3.6 1147.4

0.3 0.0 0.0 0.0

0.3 65.0 16.7 91.2 31.7 66.8 0.8 159.4 6.2 0.1 37.1 10.6 1.2 0.0 0.0 716.9

S chedule - 2L iabilities Sundry Creditors: Micro and Small Enterprises Others Trade Deposits from Customers Unclaimed Dividend Advances Received Unclaimed Preference Share Capital Interest Accrued but not due Other Liabilities

0.8 455.8 21.3 9.2 142.9 0.0 3.6 379.3 1012.8

456.6

0.0 533.5 20.6 8.3 74.3 0.0 1.3 232.9 870.9

533.5

32

Rupees in million As on 31st March 2008 S OUR E OFF CS UNDS : S hareholder'sfunds : Share Capital Reserves and surplus L oan F unds : Secured loans Unsecured loans Deferred tax liability Total AP L ATIONOFF P IC UND : S F ed As ets ix s : Gross Block Less:Depreciation Net Block Capital Work-in-Progress Inves ents tm : Net C urrent As ets L s , oansand Advances : C urrent As ets L s , oansand Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances L s urrent L es :C iabilitiesand P rovis ions Current Liabilites Provisions 2007

155.5 3600.4 3755.8 17.0 563.6 580.5 149.2 4485.5

155.5 3080.8 3236.3 7.3 116.3 123.6 112.7 3472.5

2201.8 540.4 1661.4 233.1 1894.5 94.8

1799.7 411.6 1388.1 73.2 1461.3 117.8

1120.5 1393.9 79.3 34.5 1115.8 3744.0 830.9 416.8 1247.7 2496.3 4485.5

978.6 1028.8 131.5 24.8 671.0 2834.7 528.1 413.1 941.3 1893.4 3472.5 33

Total

Schedule Incom e Gross Sales Less: Excise Duty Net Sales Other Income

INR-Millions As on 31st March 2008 2007 4088.6 3533.2 90.7 94.9 3997.9 3438.2 340.3 230.6 4338.2 3668.8 2042.7 214.0 194.1 716.9 204.6 10.7 0.6 116.3 3499.9 838.4 94.0 36.5 6.4 701.4 390.4 1725.6 184.6 173.3 667.0 0.0 4.8 2.1 103.4 2860.8 808.0 121.8 14.7 3.5 668.0 304.2 972.2 155.5 26.4 400.0 390.4 972.2

E penditure x

Material Cost Employee Cost Manufacturing Expenses Other Expenses Research and Development Expenses Interest - Fixed period - Others Depreciation P rofit before Tax Provision for Tax: - Current Tax - Deferred Tax - Fringe Benefit Tax P rofit after Tax Surplus brought forward from last Balance Sheet Profit available for Appropriation

136.9

140.0

1091.8 155.5 26.4 400.0 509.9 1091.8

Appropriations Proposed Dividend Tax on Dividend Transferred to General Reserve Surplus carried forward

34

S H DUL S C E E S chedule 1- Other E pens x es Stores & Spares Power & Fuel Rent Rates & Taxes Insurance Repairs & Maintenance: Machinery Buildings Others Printing & Stationery Conveyance & Vehicle Expenses Remuneration to Auditors Audit Fees Tax Audit Fees Cost Audit Fees Other Services Professional Fees Telephone, Postage & Telegram Selling Expenses Freight & Forwarding Travelling Expenses Donations Commission on Sales Bank & Other Financial Charges Directors Sitting Fees Miscellaneous Expenses Provision for Doubtful Debts Bad Debts written off Exchange Loss (Net) Loss on sale/discard of Fixed Assets (Net) 0.3 0.0 0.0 0.0 15.3 33.8 13.2

48.5 74.7 4.0 6.5 11.6 13.2 34.7 18.7

60.0 86.7 6.9 6.6 7.3

62.3 13.6 8.9

66.5 14.2 6.0

0.3 65.0 16.7 91.2 31.7 66.8 0.8 159.4 6.2 0.1 37.1 10.6 1.2 0.0 0.0 716.9

0.3 0.0 0.0 0.0

0.3 57.4 14.3 42.6 28.3 39.3 1.8 155.2 4.2 0.1 58.1 11.2 667.0

S chedule - 2L iabilities Sundry Creditors: Micro and Small Enterprises Others Trade Deposits from Customers Unclaimed Dividend Advances Received Unclaimed Preference Share Capital Interest Accrued but not due Other Liabilities

0.0 533.5 20.6 8.3 74.3 0.0 1.3 232.9 870.9

533.5

305.9 20.4 5.7 33.1 0.0 162.9 528.1

305.9

35

R to ai s
C r e tR to ur n ai :
C rre tL b sin lu e d fe dta lia ility u n ia litie c d s e rre x b C rre t A s ts u n se C rre t u n L b s ia ilitie

20 09 4 1 .6 49 1 6 .7 58 2 2 .8

20 08 3 4 .0 74 1 9 .9 36 2 8 .6

Q ic R to u k ai :
L u A s ts( a h D b rsa dO e c rre t iq id s e C s , e to n th r u n a s t) se

L u A s ts iq id s e C rre t u n L b s ia ilitie

1 1 .6 93 1 6 .7 58 1 2 .2

1 0 .7 57 1 9 .9 36 1 8 .0 50 8 .5 3 5 .8 75 0 5 .1 5 3 .5 ,6 8 50 3 8 .5 9 1 .7 3 5 .8 ,7 5 5 3 .5 ,6 8 0 7 .6 2 1 .3 ,7 2 1 4 .5 ,0 9 5 2 8 .5

D b E ut R t e t q i y aio
D b in lu e b th e u d&U s c re lo n e t c d s o s c re neu d a s E u in lu e s a h ld r'sfu d q ity c d s h re o e ns

Db et Eu q ity

90 4 .2 4 5 .8 30 0 2 .2 6 7 .4 ,7 8 90 4 .2 7 1 .2 4 5 .8 ,3 0 6 7 .4 ,7 8 0 4 .6 3 3 .8 07 1 5 .4 ,2 9 1 2 1 .4

T t lAs t t D b R to oa ses o e t ai
D b in lu e b th e u d&U s c re lo n e t c d s o s c re neu d a s T ta A s tsin lu efix da dC rre tA s ts o l se c d e n u n se

T ta A s ts o l se Db et

Po reeyR to r pi t r ai

S a h ld r's h re o e fu d ns T ta A s ts o l se

So kT r o e R t t c un v r aio
C s o g o ss ldin lu ea fa to e p n e i.e o t f o d o c d ll c ry x e s s

Cs o Go s ot f o d S ld o Ae g S c v ra e to k

M te l C s a ria o t E p y eC s m lo e o t M n fa tu gE p n e a u c rin x e s s O e Ep ne th r x e s s S re &S a s to s p re P w r &F e o e ul Rn et In u n e s ra c R p irs&M in n n e ea a te a c : M c in ry ah e B ild g u in s O e th rs D p c tio e re ia n

10 0% 6% 0 10 0% 10 0% 10 0% 1% 0 4% 0 10 0% 1% 0 1% 0 7% 5

2 4 .4 37 12 6 .8 29 3 .1 5 .2 2 9 .7 1 0 .8 1 .5 2 .5 3 3 .7 1 .2 13 1 .8 3 3 .8 07

2 4 .7 02 18 2 .4 24 1 .0 24 0 .6 1 .7 0 0 .1 4 .7 1 .3 5 3 .4 1 .3 8 .2 7 2 1 .3 ,7 2 4 6 .6 ,9 0 0 1 1 .5 ,6 5 3 3 7 .0 3 9 .9 ,9 7 0 1 1 .3 ,2 1 5 3 0 .3 3 9 .9 ,9 7 0 49 2 1 .7 9 3 .5

D bosT r o e R to e t r un v r ai
(a e g a re ie a le in lu es n ryd b rs v ra e /c c v b s c d u d e to )

N t S le e a s Ae g A v ra e /c Rc vb s e ie a le

Ce i ost r o e r t r dt r un v r aio
(a e g a p y b sin lu es n ryc d rs v ra e /c a a le c d u d re ito )

N t S le e a s Ae g A v ra e /c Pyb s a a le

4 6 .6 ,9 0 0 45 7 9 .0 1 .0 0 2

36

W orkingC apital Turnover R atio


(Working Capital =Current Assets-Current Liabilities)

Net Sales Net Working Capital

4,960.60 3,015.01 1.65

3,997.90 2,496.27 1.60 3,997.90 1,661.36 2.41 3,997.90 3,743.98 1.07

F ixed Assets Turnover R atio

Net Sales Net Fixed Assets

4,960.60 1,992.49 2.49

C urrent AssetsTurnover R atio

Net Sales Current Assets

4,960.60 4,419.57 1.12 x 100

GrossProfit R atio
(Gross Profit =Sales - Cost of Goods Sold)

Gross Profit Net Sales

1,381.75 2,712.29 4,960.60 3,997.90 27.85% 67.84% 901.31 838.36 4,960.60 3,997.90 18.17% 20.97% 776.81 701.43 4,960.60 3,997.90 15.66% 17.54%

Net Profit R atio

Net Profit Net Sales

x 100 (PBT)

(PAT)

37

OperatingR atio

Cost of goods sold+ Direct Expenses

x 100

4,027.93

3,304.64

(Direct Expenses include Office and Administration, Net Sales Marketing and Selling Expenses)

4,960.60 81.20%

3,997.90 82.66%

Direct Expenses: Power & Fuel Rent Rates & Taxes Insurance Repairs & Maintenance: Buildings Others Printing & Stationery Conveyance & Vehicle Expenses Remuneration to Auditors Professional Fees Telephone, Postage & Telegram Selling Expenses Freight & Forwarding Travelling Expenses Donations Commission on Sales Directors Sitting Fees Miscellaneous Expenses Provision for Doubtful Debts Bad Debts written off Exchange Loss (Net) Loss on sale/discard of Fixed Assets (Net)

40% 90% 100% 60% 90% 90% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

36.68 6.89 8.93 2.31 33.6 11.0 16.55 8.52 0.37 79.81 18.34 108.57 47.19 72.77 1.16 219.83 0.10 49.96 33.95 1.62 228.37 3.62 990.12 x100 868.37 5,290.99 16.41%

29.88 3.58 6.53 6.98 30.38 11.90 13.55 8.86 0.33 64.95 16.73 91.15 31.66 66.81 0.76 159.40 0.09 37.06 10.55 1.21 592.36 827.02 4,336.35 19.07%

R eturn on Investm ent


(PBITD is Profit Before Interest, tax and Dividend)

PBITD Capital Employed

38

Rto a s i
Cret ao u nR i : r t
Cr etAs t ur n ses Cr et ur n L bi i s i i te al

20 07 23. 84 7 91 4. 3 31 . 0

Qi k ao u Rt : c i
L u As t ( ahDbos n O e cr i i ses Cs , et r ad t r ut qd h as t se)

L u As t i i ses qd Cr et ur n L bi i s i i te al

18. 15 1 91 4. 3 16 . 2

D t qi y ao e Eu Rt b t i
Dbi c ds oheue & neue l as et nl e bt s c r d Us c r don u Eu ynl ds hr hl e' f ns qi i c e s aeo rs ud t u d

Db et Eu y qi t

13 2. 6 33. 26 3 04 . 0

Tt lA e t D t ao o s t o e Rt a ss b i
Dbi c ds oheue & neue l as et nl e bt s c r d Us c r don u Tt lAs t i c d fxd n CretAs t oa sesnl ei e ad ur n ses u

Tt lAs t oa ses Db et

4 9. , 5 2 9 13 6 2. 5 3. 7 4 7

P pe r Rt r r t y ao oi e i

Saeo e' hr hl rs d f ns ud Tt lAs t oa ses

3 3. , 6 2 3 4 9. , 5 2 9 05 . 7 2 2. , 1 2 3 98 0 7. 6 27 . 2

S c Tr oeR i t k u vr ao o n t
Cs o go s o i c d a f coy xes s ot f od s l nl e l at r epne d u l ie .

Cs o Go s ot f o d Sl o d Aeae t c vr g S k o

Mt raCs a i l ot e E p ye ot moe Cs l Mnf cui g xess au t rn Epne a S r s Sae t e & pr s o Dpei to er c i n a P wr& ul o e Fe Rn et I s r ne nuac Rpi s Mi t nne ea & a eac: r n Mc i ey ah r n Bi d g u i s l n O es t r h

12. 75 6 10 1. 8 13 7. 3 6. 0 0 7. 7 5 5. 2 0 0 . 7 2 . 9 1. 3 2 3 . 5 1 . 9 22. 21 3

D t r Tr oeRt e o u vr ao b s n i
( vr g a r c vb snl d s nr aeae /c ei al i c e udy e e u dbos et r )

NtSl s e a e Aeae /c vr g A Rc vb s ei al e e

3 3. 4 , 8 4 2 1 2. 8 , 8 0 7 34 . 3

C do t r oer t r i r u vr ao et s n i
( vr g a pyb snl d s nr cei os aeae /c aal i c e udy r d r ) e u t

NtSl s e a e Aeae /c vr g A Pyb s aal e

3 9. 0 , 7 9 9 35 3 0. 9 1. 7 3 0

39

W orkingC apital Turnover R atio


(Working Capital =Current Assets-Current Liabilities)

Net Sales Net Working Capital

3,997.90 1,893.42 2.11

F ixed AssetsTurnover R atio

Net Sales Net Fixed Assets

3,997.90 3,080.81 1.30

C urrent AssetsTurnover R atio

Net Sales Current Assets

3,997.90 1,799.71 2.22 x 100 2,221.34 3,997.90 55.56% 807.98 3,997.90 20.21% 668.03 3,997.90 16.71%

Gros Profit R s atio


(Gross Profit =Sales - Cost of Goods Sold)

Gross Profit Net Sales

Net Profit R atio

Net Profit Net Sales

x 100 (PBT)

(PAT)

40

OperatingR atio
(Direct Expenses include Office and Administration, Marketing and Selling Expenses)

Cost of goods sold+ Direct Expenses Net Sales

x 100

2,653.92

3,997.90 66.38%

Direct Expenses: Rent Rates & Taxes Insurance Repairs & Maintenance: Buildings Others Printing & Stationery Conveyance & Vehicle Expenses Remuneration to Auditors Professional Fees Telephone, Postage & Telegram Selling Expenses Freight & Forwarding Travelling Expenses Donations Commission on Sales Bank & Other Financial Charges Directors Sitting Fees Miscellaneous Expenses Provision for Doubtful Debts Bad Debts written off

6.2 6.6 7.3 31.2 18.7 14.2 6.0 0.3 57.4 14.3 42.6 28.3 39.3 1.8 155.2 4.2 0.1 58.1 11.2 432.6

R eturn on Investm ent


(PBITD is Profit Before Interest, tax and Dividend)

PBITD Capital Employed

x100

801.03 4,336.35 18.47%

41

Cipla:
Current Ratio: In 2007-08, the current ratio has decreased from 3.01 to 2.68. But the ratio has increased from 2.68 to 2.81 during 2008-09. This has happened due to an increase in current liabilities and in current assets. Since the ideal current ratio is 2:1, the ratio for this company is slightly higher than the standard. Quick Ratio: In 2007-08, the quick ratio has decreased from 1.26 to 1.08. But the ratio has increased from 1.08 to 1.22 during 2008-09. This has happened due to an increase in current liabilities and in liquid assets. Since the ideal liquid ratio is 1:1, the ratio for this company is slightly higher than the standard. Debt-Equity Ratio: In 2007-08, the current ratio has decreased from 0.04 to 0.15. The ratio has again increased from 0.15 to 0.22 during 2008-09. This has happened due to an increase in debt and in equity. Since the ideal current ratio is 2:1, the ratio for this company is lower than the standard. Total Assets to Debt ratio: In 2007-08, the Total asset to debt ratio has decreased from 34.77 to 9.71. It has again declined from 9.71 to 7.21 during 2008-09. This has happened due to an increase in debt and in total assets. Proprietary Ratio: In 2007-08, the proprietary ratio has decreased from 0.75 to 0.67. The ratio has again decreased from 0.67 to 0.65 during 2008-09. This has happened due to an increase in Shareholders Funds and in total assets. Stock Turnover Ratio: In 2007-08, the stock turnover ratio has increased from 2.27 to 2.58. But the ratio has decreased from 2.58 to 2.51 during 2008-09. This has happened due to an increase in average stock and in cost of goods sold. Debtors turnover ratio: In 2007-08, the debtors turnover ratio has decreased from 3.34 to 3.30. The ratio has again declined from 3.30 to 3.07 during 2008-09. This has happened due to an increase in Net Sales and slight increase in Average Account Receivables. Creditors turnover ratio: In 2007-08, the creditors turnover ratio has decreased from 13.07 to 9.52. But the ratio has again increased from 9.52 to 10.02 during 2008-09. This has happened due to an increase in net sales and in creditors. Working capital turnover ratio: In 2007-08, the working capital turnover ratio has decreased from 2.11 to 1.60. But the ratio has increased from 1.60 to 1.65 during 2008-09. This has happened due to an increase in Net sales and working capital. Current Assets turnover ratio: In 2007-08, the Current asset turnover ratio has decreased from 2.22 to 1.07. But the ratio has increased from 1.07 to 1.12 during 2008-09. This has happened due to an increase in current assets and a slight increase in net sales. Fixed Assets turnover ratio: In 2007-08, the fixed asset turnover ratio has increased from 1.30 to 2.41. The ratio has again increased from 2.41 to 2.49 during 2008-09. This has happened due to a decrease and then an increase in fixed assets and a slight increase in net sales. 42

Gross Profit ratio: In 2007-08, the gross profit ratio has increased from 55.56% to 67.84%. But the ratio has declined from 67.84% to 27.85% during 2008-09. This has happened due to a decrease in gross profit and increase in net sales. Net Profit ratio: In 2007-08, the net profit ratio before tax has increased from 20.21% to 20.97%. But the ratio has decreased from 20.97% to 18.17% during 2008-09. This has happened due to an increase in net profit and net sales. In 2007-08, the net profit ratio after tax has increased from 16.71% to 17.54%. But the ratio has decreased from 17.54% to 15.66% during 2008-09. This has happened due to an increase in net profit and in net sales. Operating Ratio: In 2007-08, the operating ratio has increased from 66.38% to 82.66%. But the ratio has decreased from 82.66% to 81.20% during 2008-09. This has happened due to an increase in operating cost and in net sales. Return on Investment: In 2007-08, the return on investment has increased from 18.47% to 19.07%. But the ratio has declined from 19.07% to 16.41% during 2008-09. This has happened due to an increase in capital employed and Profit before Interest, Tax and Dividend.

43

S OUR E OFF CS UND : S S hareholder'sfunds : Share Capital Reserves and surplus L oan F unds : Secured loans Unsecured loans Deferred tax liability Total AP L ATIONOFF P IC UND : S F ixed As ets s : Gross Block Depreciation, Amortization and impairment Net Block Capital Work-in-Progress

In rupees millions, except share data and where stated otherwise. As at 31st March 2009 2008 842 841 51749 47277 52591 48118 26 6377 6403 904 59898 34 4589 4623 869 53610

21573 9465 12108 4112 16220

17502 7682 9874 2465 12339 19306

Inves ents tm : Net C urrent As ets L s , oansand Advances : C urrent As ets L s , oansand Advances Inventories Sundry Debtors Cash and Bank Balances Loans and Advances L s urrent L es :C iabilitiesand P rovis ions Current Liabilites Provisions

17038

7351 14197 3844 13085 38477 10502 1335 11837 26640 59898

6409 8977 5367 8922 29675 6809 901 7710 21965 53610

Total

44

Schedule Incom e Sales, gross Less: Excise duty on sales Sales, net License fees, net Service income Other income Material costs Conversion charges Excise duty Personnel costs Operating and other expenses 1 Research and development expenses Provision for decline in the value of long-term investments Finance charges Depreciation and amortisation P rofit before taxation Income tax expense P rofit after taxation Balance in profit and loss account brought forward Am ount available for appropriation Appropriations: Proposed dividend on equity shares Tax on proposed dividend Dividend of previous years Transferred to General Reserve Balance carried forward

E xpenditure

INR-Millions As on 31st March 2009 2008 40419 33865 422 558 39997 33307 1600 216 379 426 1003 1911 42979 35860 14699 12535 299 558 387 287 4133 3686 10086 7868 3847 3219 112 133 185 102 1936 1620 35684 30008 7295 5852 1686 1089 5609 4763 16575 13036 22184 17799

1053 178 1 561 20391 22184

631 107 1 475 16575 17789

45

SHD E C E UL S S chedule 1- Other E pens x es Power and fuel Repairs and maintenance Buildings Plant and machinery Others Rent Rates and taxes Insurance Travelling and conveyance Communication Advertisements Commission on sales Carriage outwards Other selling expenses Printing and stationery Donations Legal and professional charges Bad debts written-off Provision for doubtful debts, net Advances written off Provision for doubtful advances, net Foreign exchange loss, net Directors sitting fees Directors remuneration Auditors remuneration Bank charges Loss on sale of fixed assets Sundry expenses 74 760 397 900 53 745 395 771

1231 128 56 186 515 160 159 329 1331 2668 81 139 664 119 -8 0 486 363 0 189 8 89 0 293 10086

1193 112 57 181 407 104 86 211 1102 2355 77 125 539 0 33 0 6 0 0 184 8 45 3 269 7868

S chedule - 2C urrent liabilities Sundry creditors Payable to subsidiary companies, assocoiates and joint venture Interest accrued but not due on loan Unclaimed dividends Trade deposits Other Liabilities

7800 2577 10 14 37 64 10502

6133 492 5 14 38 127 6809

46

In rupees m illions, except share data and where stated otherwise. As at 31st March 2008 2007 S a h e fu d : h re old r's n s S hare Capital R eserves and surplus L nF n s oa u d : S ecured loans Unsecured loans D eferred taxliability Total A P IC T NO F N S P L A IO F U D : F e A s ts ix d s e : Gross Block D epreciation, Am ortization and im pairm ent Net B lock C apital Work-in-Progress 841 47277 48118 34 4589 4623 869 53610 840 42894 43734 19 3280 3299 577 47610

17502 7628 9874 2465 12339 19306

12912 6092 6820 2806 9626 8302

In e tm n : v s e ts N t C rre t A s ts L n a dA v n e : e u n s e , oa s n d a c s C rre t A s ts L n a dA v n e u n s e , oa s n d a c s Inventories S undry D ebtors Cash and Bank B alances Loans and Advances L s :C rre t L b e s u n ia ilitie a dP is s s n rov ion C urrent Liabilites Provisions

6409 8977 5367 8922 29675 6809 901 7710 21965 53610

4876 10557 14567 7044 37044 6334 1028 7362 29682 47610

Total

47

Schedule Incom e Sales, gross Less: Excise duty on sales Sales, net License fees, net Service income Other income Material costs Conversion charges Excise duty Personnel costs Operating and other expenses 1 Research and development expenses Provision for decline in the value of long-term investments Finance charges Depreciation and amortisation P rofit before taxation Income tax expense P rofit after taxation Balance in profit and loss account brought forward Am ount available for appropriation Appropriations: Proposed dividend on equity shares Tax on proposed dividend Dividend of previous years Transferred to General Reserve Balance carried forward

E xpenditure

INR-Millions As on 31st March 2008 2007 33865 38261 558 779 33307 37482 216 1745 426 447 1911 1169 35860 40843 12535 11216 558 1132 287 117 3686 2798 7868 7177 3219 2457 133 472 102 480 1620 1335 30008 27184 5852 13659 1089 1890 4763 11769 13036 3196 17799 14965

631 107 1 475 16575 17789

630 107 0 1176 13051 14964

48

S H UL C ED ES S chedule 1- Other E xpens es Power and fuel Repairs and maintenance Buildings Plant and machinery Others Rent Rates and taxes Insurance Travelling and conveyance Communication Advertisements Commission on sales Carriage outwards Other selling expenses Printing and stationery Donations Legal and professional charges Bad debts written-off Provision for doubtful debts, net Advances written off Provision for doubtful advances, net Foreign exchange loss, net Directors sitting fees Directors remuneration Auditors remuneration Bank charges Loss on sale of fixed assets Sundry expenses 74 760 397 900 79 424 290 578

1231 128 56 186 515 160 159 329 1331 2668 81 139 664 119 -8 0 486 363 0 189 8 89 0 293 10086

793 92 32 194 317 83 33 205 987 2009 81 79 660 7 42 0 198 0 0 374 8 40 0 365 7177

S chedule- 2C urrent liabilities Sundry creditors Payable to subsidiary companies, assocoiates and joint venture Interest accrued but not due on loan Unclaimed dividends Trade deposits Other Liabilities

6133 492 5 14 38 127 6809

5985 211 1 13 40 84 6334

49

Rto ai s
C r e tRto ur n ai :
C r e tL b ie in lu e d fer dt xlia ilit ur n ia lit s c d s e r e a b y C r e tA s t ur n s es Cre t ur n L b ie ia ilit s

20 09 347 8 7 .0 187 1 3 .0 35 .2

20 08 265 9 7 .0 7 1 .0 70 35 .8 134 4 4 .0 7 1 .0 70 16 .8 4 2 .0 63 418 8 1 .0 00 .1 4 , 1 .0 20 4 46 3 0 , 2 .0 99 .0 4 , 1 .0 81 8 4 , 1 .0 20 4 15 .1 1 , 2 .2 72 5 48 6 0 , 7 .0 33 .5

Q i k ai : uc Rto
L u A s t ( ah Dbosa dOh rc r e t iq id s es C s , e t r n t e ur n as t s e)

L u As t iq id s es Cre t ur n L b ie ia ilit s

101 8 4 .0 187 1 3 .0 12 .5

Db E u yRto e t q i ai t
Db in lu e b t s c r d&U s c r dlo n e t c d s oh e ue n e ue a s E u yin lu e s ae o e'sfu d q it c d s h r h ld r n s

Db et Eu y q it

6 0 .0 43 551 2 9 .0 02 .1

T t lAs t t Db Rto oa ses o e t ai


Db in lu e b t s c r d&U s c r dlo n e t c d s oh e ue n e ue a s T t l As t in lu efix da dC r e tAs t oa s es c d e n ur n s es

T t l As t oa s es Db et

5 , 9 .0 46 7 64 3 , 0 .0 84 .5

Po reeyRto r pi t r ai

S ae o e's h r h ld r fu d ns T t l As t oa s es

5 , 9 .0 25 1 5 , 9 .0 46 7 06 .9 190 9 9 .7 68 0 0 , 8 .0 21 .9

Sok un v rRto t c T r o e ai
C s o g o ss ldin lu ea fat r e p ne o t f o d o c d ll coy x e s s i.e

Cs o Go s ot f o d S ld o A ea eSo k vr g t c

P w ra dfu l oe n e R p ir a dmine a c e a s n a t n ne B ild g u in s P n a dmc in r la t n ah ey Oh r t es Rn et Dpe iaio a da ot aio e r c t n n mr is t n M t r l c ss aeia o t P r o n l C ss es n e o t

6% 0 1% 0 10 0% 1% 0 1% 0 7% 5 10 0% 6% 0

50 4 7 .4 70 6 3 .7 9 1 .8 2 15 42 169 49 2 7 .8 49 190 9 9 .7

42 6 .6 5 .3 75 4 3 .5 9 1 .2 1 11 25 155 23 2 1 .6 21 1 , 2 .2 72 5 0

Dbos un v rRto e t r T r o e ai
( v r g a r c v b sin lu es n r d bos a ea e /c e ie a le c d u dy e t r )

N tS le e as A ea eA v r g /c Rc v b s e ie a le

3 , 9 .0 99 7 0 1 , 8 .0 15 7 0 35 .4

3 , 0 .0 33 7 0 97 7 0 , 6 .0 31 .4 3 , 0 .0 33 7 0 60 9 0 , 5 .0 50 .5

Ce i os un v rr to r d r t r o e ai t
( v r g a p y b sin lu es n r ce it r ) a ea e /c a a le c d u dy r d os

N tS le e as A ea eA v r g /c Pyb s a a le

3 , 9 .0 99 7 0 69 6 0 , 6 .5 54 .7

50

W orkingC apital Turnover R atio


(Working Capital =Current Assets-Current Liabilities)

Net Sales Net Working Capital

39,997.00 26,640.00 1.50

33,307.00 21,965.00 1.52 33,307.00 12,339.00 2.70 33,307.00 52,591.00 0.63

F ixed AssetsTurnover R atio

Net Sales Net Fixed Assets

39,997.00 16,220.00 2.47

C urrent AssetsTurnover R atio

Net Sales Current Assets

39,997.00 38,477.00 1.04

Gros Profit R s atio


(Gross Profit =Sales - Cost of Goods Sold)

Gross Profit Net Sales

x 100

20,006.30 16,081.80 39,997.00 33,307.00 50.02% 48.28% 7,295.00 5,852.00 39,997.00 33,307.00 18.24% 17.57% 5,609.00 4,763.00 39,997.00 33,307.00 14.02% 14.30%

Net Profit R atio

Net Profit Net Sales

x 100 (PBT)

(PAT)

51

OperatingR atio

Cost of goods sold+ Direct Expenses

x 100

28,729.60

23,437.60

(Direct Expenses include Office and Net Sales Administration, Marketing and Selling Expenses)

39,997.00 71.83%

33,307.00 70.37%

Direct Expenses: Power and fuel Repairs and maintenance Buildings Others Rent Rates and taxes Insurance Travelling and conveyance Communication Advertisements Commission on sales Carriage outwards Other selling expenses Printing and stationery Donations Legal and professional charges Bad debts written-off Provision for doubtful debts, net Advances written off Provision for doubtful advances, net Foreign exchange loss, net Directors sitting fees Directors remuneration Auditors remuneration Bank charges Loss on sale of fixed assets Sundry expenses

360 66.6 357.3 128 56 186 515 160 159 329 1331 2668 81 139 664 119 -8 0 486 363 0 189 8 89 0 293 8738.9 x100 7,110.00 58,994.00 12.05%

308.4 47.7 355.5 112 57 181 407 104 86 211 1102 2355 77 125 539 0 33 0 6 0 0 184 8 45 3 269 6212.4 5,750.00 52,741.00 10.90% 52

PBITD Capital (PBITD is Profit Before Interest, tax and Dividend) Employed

R eturn on Investm ent

R atios
C urrent R atio:
Current Liablities includes deferred tax liability Current Assets Current Liabilities

2 7 00 37044.0 7362.0 5.03

QuickR atio:
Liquid Assets (Cash, Debtors and Other current asset)

Liquid Assets Current Liabilities

25124.0 7362.0 3.41

Debt E quity R atio


Debt includes bothsecured & Unsecured loans Equity includes shareholder's funds

Debt Equity

3299.0 43734.0 0.08

Total Ass to D R ets ebt atio


Debt includes bothsecured & Unsecured loans Total Assets include fixed and Current Assets

Total Assets Debt

46,670.0 3,299.0 14.15

Proprietery R atio

Shareholder's funds Total Assets

43,734.0 46,670.0 0.94 14713.0 4,876.00 3.02

S tockTurnover R atio
Cost of goods sold include all factory expenses i.e

Cost of Goods Sold Average Stock

Power and fuel Repairs and maintenance Buildings Plant and machinery Others Rent Depreciation and amortisation Material costs Personnel Costs

60% 10% 100% 10% 10% 75% 100% 60%

346.8 7.9 424 29 9.2 1001.25 11216 1678.8 14713.0

Net Sales Average A/c (average a/c recievables include sundry debtors) Recievables

DebtorsTurnover R atio

37,482.00 10,557.00 3.55

C reditors turnover ratio


(average a/c payables include sundry creditors)

Net Sales Average A/c Payables

37,482.00 5,985.00 6.26

53

W orkingC apital Turnover R atio


(Working Capital =Current Assets-Current Liabilities)

Net Sales Net Working Capital

37,482.00 29,682.00 1.26

F ixed AssetsTurnover R atio

Net Sales Net Fixed Assets

37,482.00 29,682.00 1.26

C urrent AssetsTurnover R atio

Net Sales Current Assets

37,482.00 37,044.00 1.01 x 100 22,769.05 37,482.00 60.75% 13,659.00 37,482.00 36.44% 11,769.00 37,482.00 31.40%

Gros Profit R s atio


(Gross Profit =Sales - Cost of Goods Sold)

Gross Profit Net Sales

Net Profit R atio

Net Profit Net Sales

x 100 (PBT)

(PAT)

54

OperatingR atio

Cost of goods sold+ Direct Expenses

x 100

21,082.25

(Direct Expenses include Office and Net Sales Administration, Marketing and Selling Expenses)

37,482.00 56.25%

Direct Expenses: Power and fuel Repairs and maintenance Buildings Others Rent Rates and taxes Insurance Travelling and conveyance Communication Advertisements Commission on sales Carriage outwards Other selling expenses Printing and stationery Donations Legal and professional charges Bad debts written-off Provision for doubtful debts, net Advances written off Provision for doubtful advances, net Foreign exchange loss, net Directors sitting fees Directors remuneration Auditors remuneration Bank charges Loss on sale of fixed assets Sundry expenses

231.2 71.1 261 92 32 194 317 83 33 205 987 2009 81 79 660 7 42 0 198 0 0 374 8 40 0 365 6369.3 x100 13,179.00 47,033.00 28.02%

PBITD Capital (PBITD is Profit Before Interest, tax and Dividend) Employed

R eturn on Investm ent

55

Dr. Reddy:
Current Ratio: In 2007-08, the current ratio has decreased from 5.03 to 3.85. The ratio has further declined from 3.85 to 3.25 during 2008-09. This has happened due to an increase in current liabilities and a decrease in current assets. Since the ideal current ratio is 2:1, the ratio for this company is higher than the standard. Quick Ratio: In 2007-08, the quick ratio has decreased from 3.41 to 1.86. But the ratio has further decreased from 1.86 to 1.52 during 2008-09. This has happened due to a decrease and then an increase in current liabilities and an increase in liquid assets. Since the ideal liquid ratio is 1:1, the ratio for this company is slightly higher than the standard. Debt-Equity Ratio: In 2007-08, the current ratio has increased from 0.08 to 0.10. The ratio has further increased from 0.10 to 0.12 during 2008-09. This has happened due to an increase in debt and in equity. Since the ideal current ratio is 2:1, the ratio for this company is lower than the standard. Total Assets to Debt ratio: In 2007-08, the Total asset to debt ratio has decreased from 14.15 to 9.09. It has again declined from 9.09 to 8.54 during 2008-09. This has happened due to an increase in debt and in total assets. Proprietary Ratio: In 2007-08, the proprietary ratio has increased from 0.94 to 1.15. But the ratio has decreased from 1.15 to 0.96 during 2008-09. This has happened due to an increase in Shareholders Funds and a decrease and then an increase in total assets. Stock Turnover Ratio: In 2007-08, the stock turnover ratio has increased from 3.02 to 3.53. But the ratio has decreased from 3.53 to 2.91 during 2008-09. This has happened due to an increase in average stock and in cost of goods sold. Debtors turnover ratio: In 2007-08, the debtors turnover ratio has decreased from 3.55 to 3.41. But the ratio has increased from 3.41 to 3.45 during 2008-09. This has happened due to a decrease and then an increase in Net Sales and in Average Account Receivables. Creditors turnover ratio: In 2007-08, the creditors turnover ratio has decreased from 6.26 to 5.50. But the ratio has increased from 5.50 to 5.74 during 2008-09. This has happened due to a decrease and then a decrease in net sales and an increase in creditors. Working capital turnover ratio: In 2007-08, the working capital turnover ratio has increased from 1.26 to 1.52. But the ratio has decreased from 1.52 to 1.50 during 2008-09. This has happened due to an increase and then a decrease in Net sales and working capital. Current Assets turnover ratio: In 2007-08, the Current asset turnover ratio has decreased from 1.01 to 0.63. But the ratio has increased from 0.63 to 1.04 during 2008-09. This has happened due to an increase and then a decrease in current assets and a decrease and then an increase in net sales. Fixed Assets turnover ratio: In 2007-08, the fixed asset turnover ratio has increased from 1.26 to 2.70. The ratio has again declined from 2.70 to 2.47 during 2008-09. This has happened due to a decrease and then an increase in fixed assets and in net sales. 56

Gross Profit ratio: In 2007-08, the gross profit ratio has decreased from 60.75% to 48.28%. But the ratio has increased from 48.28% to 50.02% during 2008-09. This has happened due to a decrease and then an increase in gross profit and net sales. Net Profit ratio: In 2007-08, the net profit ratio before tax has decreased from 36.44% to 17.41%. The ratio has increased from 17.41% to 18.24% during 2008-09. This has happened due to a decrease and then an increase in net profit and net sales. In 2007-08, the net profit ratio after tax has decreased from 31.40% to 14.30%. The ratio has further decreased from 14.30% to 14.02% during 2008-09. This has happened due to a decrease and then an increase in net profit and net sales. Operating Ratio: In 2007-08, the operating ratio has increased from 56.25% to 70.37%. The ratio has further increased from 70.37% to 71.83% during 2008-09. This has happened due to an increase in operating cost and a decrease and then an increase in net sales. Return on Investment: In 2007-08, the return on investment has decreased from 28.02% to 10.90%. But the ratio has increased from 10.90% to 12.05% during 2008-09. This has happened due to an increase in capital employed and a decrease and then an increase in Profit before Interest, Tax and Dividend.

57

In rupees millions As at 31st March S OUR ESOFF C UNDS : S hareholder'sfunds : Share Capital Reserves and surplus L oan F unds : Secured loans Unsecured loans Deferred tax liability Total AP L ATIONOFF P IC UNDS : F ixed As sets: Gross Block Less:Depreciation and Amortization Net Block Capital Work-in-Progress Inves ents tm : F oreig C n urrency Monetary ItemTrans lation D ifference Am ount Net C urrent As ets, L s oansand Advances : C urrent As , L sets oansand Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances L s urrent L es :C iabilitiesandP rovisions Current Liabilites Provisions Net C urrent As ets s Mis callaneousE xpenditure Total 2009 67 6085 6152 4386 2167 6553 334 13489 2008 67 6905 6972 2070 1912 3982 595 11549

7411 2170 5241 1698 6939 2166 96

4568 1476 3092 2162 5254 2049 0

4478 1239 595 54 1304 7670 1528 1858 3386 4284 4 13489

2116 1482 1412 30 405 5445 1078 216 1294 4151 5 11459

58

Schedule INC OME Turnover (Gross) Less: Excise Duty Other Income Total E P ND X E ITUR E Purchases of Traded Goods Raw and packing material consumed Operating and other expenses (Increase)/ Decrease in inventories Personnel Expenses Selling and Distribution Expenses Research and Development Expenses Financial Expenses Depreciation/ Amortisation Miscellaneous Expenditure written off during the year Total P rofit / (L s before tax os ) Provision for Income Tax Deferred Income Tax (Credit)/ Charge Provision for Fringe Benefit Tax P rofit / (L s after Tax os ) Add : Balance brought forward fromprevious year Profit available for Appropriations AP R R P OP IATIONS Dividend: Equity Shares - Proposed (not liable to TDS) Dividend Distribution Tax Transfer to General Reserve Balance carried to Balance Sheet

As on 31st March 2009 2008 7753 19 7734 260 7994 156 2952 3351 -447 916 435 670 347 536 2 8918 -924 0 -261 28 -691 2846 2155 8342 38 8304 372 8676 173 3464 745 22 925 451 542 150 299 2 6773 1903 330 211 31 1331 1725 3056

0 0 0 2155

67 11 133 2845

59

SHD E C E UL S S chedule 1- Other E xpens es Processing Charges Analytical Testing & Trial Charges Stores & Spare Parts consumed Power & Fuel Repair & Maintenance -Buildings -Plant & Machinery -Others Rent Royalty Directors Sitting Fees Printing & Stationery Postage & Communication expenses Insurance Travelling & Conveyance expenses Books & Periodicals Legal & Professional charges Vehicle Running & Maintenance Auditors Remuneration -Statutory Audit Fee -Limited Review Fees -Out of pocket expenses -Others Rates & Taxes Donation Subscription Staff Training & Recruitment Bad Debts & Advances written off Provision for Doubtful Debts & Advances Wealth Tax Foreign Exchange Fluctuation Loss Provision for Loss on Open Derivative Contracts Provision for Permanent Diminution in the value of investments Miscellaneous expenses 3 2 0 0 17 23 28 35 7 58 112 19 23 26 6 11 46 97

68 53 15 0 40 45 41 103 2 109 17

68 52 4 0 31 39 43 101 2 72 15

5 15 3 14 31 0 116 1 558 1703 168 29 3348

3 1 0 0

4 9 7 12 30 0 27 1 0 41 0 26 744

S chedule - 2 C urrent L iabilities i) Acceptances ii) Sundry Creditors a) Dues to Micro & Small Enterprises b) Dues to other than Micro & Small Enterprises iii) Payable to Subsidiary Company iv) Advances from Customers v) Deposits from C & F Agents vi) Unpaid dividend on Equity Shares vii) Other Liabilities viii) Interest accrued but not due on Loans / Deposits 1 358 359 0 5 15 2 31 0 1527 1 631 632 3 8 15 2 81 0 1078 1115 337

60

In rupees millions As on 31st March S OUR E OFF CS UND : S S hareholder'sfunds : Share Capital Reserves and surplus L oan F unds : Secured loans Unsecured loans Deferred tax liability Total AP L ATIONOFF P IC UNDS : F ixed As ets s : Gross Block Depreciation, Amortization and impairment Net Block Capital Work-in-Progress Inves ents tm : Net C urrent As ets L s , oansand Advances : C urrent As ets L s , oansand Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances L s urrent L es :C iabilitiesand P rovis ions Current Liabilites Provisions Net C urrent As ets s Mis calleneousE xpenditure Total 2008 67 6905 6972 2070 1912 3982 595 11549 2007 66 5325 5391 0 2134 2134 384 7909

4568 1476 3092 2162 5254 2049 2116 1482 1412 30 405 5445 1078 216 1294 4151 5 11459

3826 1053 2773 1363 4136 229 2082 929 1571 23 469 5074 1397 140 1537 3537 7 7909

61

Schedule INC OME Turnover (Gross) Less: Excise Duty Other Income Total E P ND X E ITUR E Purchases of Traded Goods Raw and packing material consumed Operating and other expenses (Increase)/ Decrease in inventories Personnel Expenses Selling and Distribution Expenses Research and Development Expenses Financial Expenses Depreciation/ Amortisation Miscellaneous Expenditure written off during the year Total P rofit / (L s) before tax os Provision for Income Tax Deferred Income Tax (Credit)/ Charge Provision for Fringe Benefit Tax P rofit / (L s) after Tax os Add : Balance brought forward from previous year Profit available for Appropriations AP R R P OP IATIONS Dividend Equity Shares - Proposed (not liable to TDS) Dividend Distribution Tax Transfer to Capital Redemption Reserve Transfer to General Reserve Balance carried to Balance Sheet

INR-Millions As on 31st March 2008 2007 8342 38 8304 372 8676 173 3464 745 22 925 451 542 150 299 2 6773 1903 330 211 31 1331 1725 3056 8398 82 8316 299 8615 100 3642 626 118 788 327 505 170 245 3 6524 2091 463 137 22 1469 649 2118

67 11 0 133 2845

86 14 145 147 1726

62

S H DUL S C E E S chedule 1 - Other E xpens es Processing Charges Analytical Testing & Trial Charges Stores & Spare Parts consumed Power & Fuel Repair & Maintenance -Buildings -Plant & Machinery -Others (increase)/decrease in excise duty provision Rent Royalty Directors Sitting Fees Printing & Stationery Postage & Communication expenses Insurance Travelling & Conveyance expenses Books & Periodicals Legal & Professional charges Vehicle Running & Maintenance Auditors Remuneration -Statutory Audit Fee -Limited Review Fees -Out of pocket expenses -Others Rates & Taxes Donation Subscription Staff Training & Recruitment Bad Debts & Advances written off Provision for Doubtful Debts & Advances Wealth Tax Foreign Exchange Fluctuation Loss Provision for Loss on Open Derivative Contracts Provision for Permanent Diminution in the value of investments Loss on sale of fixed assets Miscellaneous expenses 19 23 26 6 11 46 97 13 16 27 20 8 41 94

68 0 52 4 0 31 39 43 101 2 72 15

56 2 58 1 0 31 36 97 97 2 41 14

3 1 0 0

4 9 7 12 30 0 27 1 0 41 0 0 26 744

3 0 0 0

3 5 4 15 19 0 6 0 0 0 0 1 35 686

S chedule - 2 C urrent L iabilities i) Acceptances ii) Sundry Creditors a) Dues to Micro & Small Enterprises b) Dues to other than Micro & Small Enterprises iii) Payable to Subsidiary Company iv) Advances from Customers v) Deposits from C & F Agents vi) Unpaid dividend on Equity Shares vii) Other Liabilities viii) Interest accrued but not due on Loans / Deposits 1 631 337 0 690 540

632 3 8 15 2 81 0 1078

690 4 3 13 1 149 0 1400

63

Rt s aio
C r e tR t : u r n a io
C rre t L b sin lu e d fe dta lia ility u n ia litie c d s e rre x b C rre t A s ts u n se C rre t u n L b ia ilitie s

20 09

20 08

7 7 .0 60 3 8 .0 36 2 7 .2

5 4 .0 45 1 9 .0 24 4 1 .2 2 2 .0 94 1 9 .0 24 2 6 .2 3 8 .0 92 6 7 .0 92 0 7 .5 1 ,6 9 0 9 .0 3 8 .0 ,9 2 0 2 9 .6 6 7 .0 ,9 2 1 ,6 9 0 9 .0 0 5 .6 5 7 .0 ,3 6 7 6 .0 ,3 2 0 0 3 .7 13 7 36 44 75 4 2 2 55 5 24 5 2 .2 6 1 1 4 6 9 7 1 .9 2 3 2 .6 5 .2 5 7 .9 35 5

Q ic R t : u k a io
L u A s ts(C s , D b rsa dO e c rre t a s t) iq id s e a h e to n th r u n s e

L u A s ts iq id s e C rre t u n L b ia ilitie s

1 8 .0 88 3 8 .0 36 0 6 .5

D b E u yR t e t q it a io
D b in lu e b th e u d&U s c re lo n e t c d s o s c re neu d a s E u in lu e s a h ld r'sfu d q ity c d s h re o e ns

Db et Eu q ity

6 5 .0 53 6 5 .0 12 1 7 .0

T t lAs t t D b R t o a s es o e t aio
D b in lu e b th e u d&U s c re lo n e t c d s o s c re neu d a s T ta A s tsin lu efix da dC rre t A s ts o l se c d e n u n se

T ta A s ts o l se Db et

1 ,6 9 4 0 .0 6 5 .0 ,5 3 2 3 .2

Po r t r R t r p ie e y a io

S a h ld r's h re o e fu d ns T ta A s ts o l se

6 5 .0 ,1 2 1 ,6 9 4 0 .0 0 2 .4 7 0 .3 27 7 3 .0 ,7 4 0 0 3 .9 16 5 25 92 35 31 -4 7 4 59 4 .6 42 0 3 5 7 5 8 12 1 1 .7 2 3 1 .7 5 .3 7 0 .3 27

So kT r o e R t t c u n v r aio
C s o g o ss ldin lu ea fa to e p n e i.e ot f o d o c d ll c ry x e s s

Cs o Go s ot f o d S ld o Ae g S c v ra e to k

P rc a e o T d dG o s u h s s f ra e o d R wa dp c in m te l c n u e a n a k g a ria o s m d O e tin a do e e p n e p ra g n th r x e s s (In re s )/ D c a einin e to s c a e e re s v n rie P rs n e E p n e e onl xess D p c tio / A o a n e re ia n m rtis tio P c s in C a e ro e s g h rg s A a tic l T s g&T l C a e n ly a e tin ria h rg s S re &S a P rtsc n u e to s p re a o s m d P w r &F e o e ul R p ir &Ma te a c ea in n n e -B ild g u in s -P n &Ma h e la t c in ry -O e th rs Rn et

6% 0 7% 5

D bo sT r o e R t e t r u n v r aio
(a e g a re ie a le in lu es n ryd b rs v ra e /c c v b s c d u d e to )

N t S le e a s Ae g A v ra e /c Rc vb s e ie a le

7 3 .0 ,7 4 0 1 6 .5 ,3 0 0 5 8 .6

8 0 .0 ,3 4 0 1 8 .0 ,7 2 0 4 6 .6 8 0 .0 ,3 4 0 61 0 6 .0 1 .5 2 6

Ce it r t r o e r t r d o s u n v r a io
(a e g a p y b sin lu es n ryc d rs v ra e /c a a le c d u d re ito )

N t S le e a s Ae g A v ra e /c P yb s a a le

7 3 .0 ,7 4 0 45 0 9 .5 1 .6 5 1

64

W orkingC apital Turnover R atio


(Working Capital =Current Assets-Current Liabilities)

Net Sales Net Working Capital

7,734.00 4,284.00 1.81

8,304.00 4,151.00 2.00 8,304.00 5,254.00 1.58 8,304.00 5,445.00 1.53 2,928.05 8,304.00 35.26% 1,903.00 8,304.00 22.92% 1,331.00 8,304.00 16.03%

F ixed AssetsTurnover R atio

Net Sales Net Fixed Assets

7,734.00 6,939.00 1.11

C urrent AssetsTurnover R atio

Net Sales Current Assets

7,734.00 7,670.00 1.01 x 100 526.70 7,734.00 6.81% 924.00 7,734.00 (PBT) (PAT) -11.95% 691.00 7,734.00 -8.93%

GrossProfit R atio
(Gross Profit =Sales - Cost of Goods Sold)

Gross Profit Net Sales

Net Profit R atio

Net Profit Net Sales

x 100

65

OperatingR atio
(Direct Expenses include Office and Administration, Marketing and Selling Expenses)

Cost of goods sold+ Direct x 100 Expenses Net Sales

10,360.60 7,734.00 133.96%

5,967.25 8,304.00 71.86%

Direct Expenses: Power & Fuel Repair & Maintenance -Buildings -Others Rent Royalty Directors Sitting Fees Printing & Stationery Postage & Communication expenses Insurance Travelling & Conveyance expenses Books & Periodicals Legal & Professional charges Vehicle Running & Maintenance Auditors Remuneration Rates & Taxes Donation Subscription Staff Training & Recruitment Bad Debts & Advances written off Provision for Doubtful Debts & Advances Wealth Tax Foreign Exchange Fluctuation Loss Provision for Loss on Open Derivative Contracts Provision for Permanent Diminution in the value of investments Miscellaneous expenses 15.3 25.2

44.8 17.1 23.4

38.8

40.5 53 15 0 40 45 41 103 2 109 17 5 15 3 14 31 0 116 1 558 1703 168 29 3153.3

40.5 52 4 0 31 39 43 101 2 72 15 4 9 7 12 30 0 27 1 0 41 0 26 591.3

R eturn on Investm ent


(PBITD is Profit Before Interest, tax and Dividend)

PBITD Capital Employed

x100

- 1,725.00 12,705.00 -13.58%

1,753.00 10,954.00 16.00%

66

R atios
C urrent R atio:
Current Liablities includes deferred tax liability Current Assets Current Liabilities

2 7 00 5074.0 1537.0 3.30

QuickR atio:
Liquid Assets (Cash, Debtors and Other current asset)

Liquid Assets Current Liabilities

2523.0 1537.0 1.64

Debt E quity R atio


Debt includes bothsecured & Unsecured loans Equity includes shareholder's funds

Debt Equity

2134.0 5391.0 0.40 9,210.0 2,134.0 4.32 5,391.0 9,210.0 0.59 5366.3 2,099.00 2.56 100 3642 626 118 472.8 224.25 20 8 41 94 1.3 16 2.7 0.2 5366.25

Total As setsto Debt R atio


Debt includes bothsecured & Unsecured loans Total Assets include fixed and Current Assets

Total Assets Debt

Proprietery R atio

Shareholder's funds Total Assets

S tockTurnover R atio
Cost of goods sold include all factory expenses i.e Purchases of Traded Goods Raw and packing material consumed Operating and other expenses (Increase)/ Decrease in inventories Personnel Expenses Depreciation/ Amortisation Processing Charges Analytical Testing & Trial Charges Stores & Spare Parts consumed Power & Fuel Repair & Maintenance -Buildings -Plant & Machinery -Others Rent

Cost of Goods Sold Average Stock

60% 75%

10% 10% 10%

DebtorsTurnover R atio
(average a/c recievables include sundry debtors)

Net Sales Average A/c Recievables

8,316.00 2,082.00 3.99

C reditorsturnover ratio
(average a/c payables include sundry creditors)

Net Sales Average A/c Payables

8,316.00 690.00 12.05

67

W orkingC apital Turnover R atio


(Working Capital =Current Assets-Current Liabilities)

Net Sales Net Working Capital

8,316.00 3,537.00 2.35

F ixed Ass Turnover R ets atio

Net Sales Net Fixed Assets

8,316.00 1,363.00 6.10

C urrent AssetsTurnover R atio

Net Sales Current Assets

8,316.00 5,074.00 1.64 x 100 2,949.75 8,316.00 35.47% 2,091.00 8,316.00 25.14% 1,469.00 8,316.00 17.66%

Gros Profit R s atio


(Gross Profit =Sales - Cost of Goods Sold)

Gross Profit Net Sales

Net Profit R atio

Net Profit Net Sales

x 100 (PBT)

(PAT) Cost of goods sold+ Direct x 100 Expenses Net Sales

OperatingR atio
(Direct Expenses include Office and Administration, Marketing and Selling Expenses)

6,069.70 8,316.00 72.99%

Direct Expenses: Personnel Expenses Selling and Distribution Expenses Depreciation/ Amortisation

315.2 327 61.25 703.45

R eturn on Investm ent


(PBITD is Profit Before Interest, tax and Dividend)

PBITD Capital Employed

x100

1,921.00 7,962.00 24.13%

68

Panacea Biotech:
Current Ratio: In 2007-08, the current ratio has increased from 3.30 to 4.21. But the ratio has declined from 4.21 to 2.27 during 2008-09. This has happened due to an increase in current assets and a decrease and then an increase in current liabilities. Since the ideal current ratio is 2:1, the ratio for this company is higher than the standard. Quick Ratio: In 2007-08, the quick ratio has increased from 1.64 to 2.26. The ratio has decreased from 2.26 to 0.56 during 2008-09. This has happened due to a decrease and then an increase in current liabilities and an increase and then a decrease in liquid assets. Since the ideal liquid ratio is 1:1, the ratio for this company is slightly lower than the standard. Debt-Equity Ratio: In 2007-08, the current ratio has increased from 0.40 to 0.57. The ratio has further increased from 0.57 to 1.07 during 2008-09. This has happened due to an increase in debt and in equity. Since the ideal current ratio is 2:1, the ratio for this company is slightly lower than the standard. Total Assets to Debt ratio: In 2007-08, the Total asset to debt ratio has decreased from 4.32 to 2.69. It has again declined from 2.69 to 2.23 during 2008-09. This has happened due to an increase in debt and in total assets. Proprietary Ratio: In 2007-08, the proprietary ratio has increased from 0.59 to 0.65. But the ratio has decreased from 0.65 to 0.42 during 2008-09. This has happened due to an increase and then a decrease in Shareholders Funds and an increase in total assets. Stock Turnover Ratio: In 2007-08, the stock turnover ratio has declined from 2.56 to 0.73. But the ratio has increased from 0.73 to 0.93 during 2008-09. This has happened due to an increase in average stock and in cost of goods sold. Debtors turnover ratio: In 2007-08, the debtors turnover ratio has increased from 3.99 to 4.66. The ratio has further increased from 4.66 to 5.68 during 2008-09. This has happened due to a decrease in Net Sales and an increase and then a decrease in Average Account Receivables. Creditors turnover ratio: In 2007-08, the creditors turnover ratio has increased from 12.05 to 12.56. The ratio has again increased from 12.56 to 15.61 during 2008-09. This has happened due to a decrease in net sales and creditors. Working capital turnover ratio: In 2007-08, the working capital turnover ratio has decreased from 3.97 to 2.77. But the ratio has increased from 2.77 to 2.84 during 2008-09. This has happened due to an increase in Net sales. Current Assets turnover ratio: In 2007-08, the Current asset turnover ratio has decreased from 1.64 to 1.53. The ratio has further decreased from 1.53 to 1.01 during 2008-09. This has happened due to an increase in current assets and decrease in net sales. Fixed Assets turnover ratio: In 2007-08, the fixed asset turnover ratio has decreased from 6.10 to 1.58. The ratio has again declined from 1.58 to 1.11 during 2008-09. This has happened due to an increase in fixed assets and decrease in net sales. 69

Gross Profit ratio: In 2007-08, the gross profit ratio has decreased from 35.47% to 35.26%. The ratio has further declined from 35.26% to 6.81% during 2008-09. This has happened due to a decrease in gross profit and in net sales. Net Profit ratio: In 2007-08, the net profit ratio before tax has decreased from 25.14% to 24.92%. The ratio has further decreased from 22.92% to -11.95% during 2008-09. This has happened due to a decrease in net profit and net sales. In 2007-08, the net profit ratio after tax has decreased from 17.66% to 16.03%. The ratio has further decreased from 16.03% to -8.93% during 2008-09. This has happened due to a decrease in net profit and in net sales. Operating Ratio: In 2007-08, the operating ratio has decreased from 72.99% to 71.86%. But the ratio has increased from 71.86% to 133.96% during 2008-09. This has happened due to increase in operating cost and decrease in net sales. Return on Investment: In 2007-08, the return on investment has decreased from 24.30% to 16%. The ratio has again declined from 16% to -13.58% during 2008-09. This has happened due to an increase in capital employed and a decrease in Profit before Interest, Tax and Dividend.

70

In rupees millions As on 31st March S OUR E OFF DS CS UN : S hareholder'sfunds : Share Capital Reserves and surplus L oan F unds : Secured loans Unsecured loans Deferred tax liability Total AP L ATION OFF P IC UND : S F ed As ets ix s : Gross Block Depreciation, Amortization and impairment Net Block Capital Work-in-Progress Inves ents tm : Net C urrent As ets L s , oansand Advances : C urrent As ets L s , oansand Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances L s urrent L es :C iabilitiesand P rovis ions Current Liabilites Provisions 2009 1035.6 50478.6 51514.2 236.0 0 236.0 1174.2 52924.4 2008 1035.6 41040.6 42076.2 228.8 796.4 1025.2 1129.4 44230.8

10619.0 3626.4 6992.6 759.5 7752.1 26945.9

9350.3 3049.9 6300.4 334.3 6634.7 19431.2

4867.4 6800.3 12654.7 381.3 2674.6 27378.3 5730.9 3421.0 9151.9 18226.4 52924.4

3896.3 10554.4 9728.7 257.8 3618.7 28055.9 7263.1 2627.9 9891 18164.9 44230.8

Total

71

INC OME Incom fromOperations e Gross Sales Less: Excise Duty Net Sales Other Operating Income Other Income E P ND X E ITUR E Cost of Materials / Goods Indirect Taxes Personnel Cost Operating and Other Expenses Research and Development Expenditure Depreciation / Amortisation / Impairment PROFIT BEFORE TAXATION Provision for Taxation

Schedule

INR-Millions As on 31st March 2009 2008 28336.5 639 27697.5 10918 24273.5 617.1 23656.4 7834.1

38615.5 1821.2 40436.7

31490.5 1276.2 32766.7

19098.8 817.2 1483.1 4205.6 1289.3 588.6 241 44.8 15.4 12652.9 11287.9 23940.8

27482.6 12954.1

15267.4 648.7 1202 3255.1 1310.4 561.1 330.9 36.2 14.5 10140.4 6708.4 16848.8

22244.7 10522

- Current Tax - Deferred Tax - Fringe Benefit Tax

PROFIT AFTER TAX BALANCE OF PROFIT BROUGHT FORWARD AMOUNT AVAILABLE FOR APPROPRIATION AP R R P OP IATIONS Proposed DividendEquity Shares Dividend on Preference Shares Corporate Dividend Tax Proposed Dividend and Dividend and distribution tax written back Transfer to General Reserve Transfer to Capital Redemption Reserve BALANCE OF PROFIT CARRIED TO BALANCE SHEET

2847.9 0 484 -117 4500 0 16225.9

2174.7 0.5 372 0 3000 13.7 11287.9

72

S H DUL S C E E S chedule1- Other E xpens es Stores and Spares Consumed Manufacturing Charges Power and Fuel Rent Rates and Taxes Insurance Selling and Distribution Commission and Discount Repairs Building Plant and Machinery Others Printing and Stationery Travelling and Conveyance Overseas Travel and Export Promotion Communication Provision for Doubtful Debts Sundry Balances/Bad Debts written off (Net) Less : Adjusted out of Provision of earlier years Professional and Consultancy Donations Loss on Sale of Fixed Assets (Net) Excise duty on stock Auditors Remuneration (net of service tax ) As Auditor Other Services Out of Pocket Expenses Miscellaneous expenses 38.4 191.6 64.2 282.3 247.7 504.4 6.5 13.6 28.9 1280.9 272.6 22.2 156.7 48.9 204.9 195.4 373.6 4.3 9.7 15.7 1033.6 215.7

294.2 22.2 93.6 681.6 38.7 9.5 22.9 302.1 0.1 4.7 -49

227.8 22.7 91.3 602.4 36.8 26.4 0 97.3 10.3 0.7 -28.7

59.9 37

0 0

6 0.1 0.1

6.2 141.9 4205.6

5.1 0.1 0.1

5.3 109.9 3255.1

S chedule 2- C urrent L iabilities Sundry Creditors Due to Micro, Small and Medium Enterprises Others Advance from Customers Security Deposits Investor Education and Protection Fund shall be credited by Unclaimed Dividend (not due) Other Liabilities Interest accrued but not due on Loans Provisions Provision for Fringe Benefit Tax Proposed Dividend- Equity Shares Corporate Dividend Tax Provision for employee benefits

2.1 4775.8

4777.9 104.6 18.4 19.5 810.5 0

0 6464.8

6464.8 62 19.3 14.4 685 17.6

0.6 2847.9

2848.5 484 88.5 9151.9

1 2174.7

2175.7 369.6 82.6 9891

73

In rupees millions As on 31st March S OUR E OFF CS UND : S S hareholder'sfunds : Share Capital Reserves and surplus L oan F unds : Secured loans Unsecured loans Deferred tax liability Total AP L ATION OFF P IC UND : S F ed As ets ix s : Gross Block Depreciation, Amortization and impairment Net Block Capital Work-in-Progress Inves ents tm : Net C urrent As ets L s , oansand Advances : C urrent As ets L s , oansand Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances L s :C e s urrent L iabilitiesand P rovis ions Current Liabilites Provisions 2008 1035.6 41040.6 42076.2 228.8 796.4 1025.2 1129.4 44230.8 2007 980.7 23514.2 24494.9 203.9 10477.6 10681.5 1093.2 36269.6

9350.3 3049.9 6300.4 334.3 6634.7 19431.2

8387.0 2494.1 5892.9 319.1 6212.0 10574.9

3896.3 10554.4 9728.7 257.8 3618.7 28055.9 7263.1 2627.9 9891.0 18164.9 44230.8

3333.8 3100.0 12026.8 327.0 3086.8 21874.4 2314.7 77.0 2391.7 19482.7 36269.6

Total

74

INC OME Incom fromOperations e Gross Sales Less: Excise Duty Net Sales Other Operating Income Other Income E P ND X E ITUR E Cost of Materials / Goods Indirect Taxes Personnel Cost Operating and Other Expenses Research and Development Expenditure Depreciation / Amortisation / Impairment PROFIT BEFORE TAXATION Provision for Taxation

Schedule

INR-Millions As on 31st March 2008 2007 24273.5 617.1 23656.4 7834.1 17221.3 595.7 16625.6 5806.2 1608.4 24040.2 11579.8 516.3 988.7 2551.1 1536.2 462.7 17634.8 6405.4 56.3 48.8 11 6289.3 3902.7 10192

31490.5 1276.2 32766.7

15267.4 648.7 1202 1 3255.1 1310.4 561.1 22244.7 10522 - Current Tax - Deferred Tax - Fringe Benefit Tax 330.9 36.2 14.5 10140.4 6708.4 16848.8

PROFIT AFTER TAX BALANCE OF PROFIT BROUGHT FORWARD AMOUNT AVAILABLE FOR APPROPRIATION AP R R P OP IATIONS Proposed DividendEquity Shares Dividend on Preference Shares Corporate Dividend Tax Proposed Dividend and Dividend and distribution tax written back Transfer to General Reserve Transfer to Capital Redemption Reserve BALANCE OF PROFIT CARRIED TO BALANCE SHEET

2174.7 0.5 372 0 3000 13.7 11287.9

1301.1 0.8 182.5 0 2000 0.2 6707.4

75

S H DUL S C E E S chedule1- Other E xpenses Stores and Spares Consumed Manufacturing Charges Power and Fuel Rent Rates and Taxes Insurance Selling and Distribution Commission and Discount Repairs Building Plant and Machinery Others Printing and Stationery Travelling and Conveyance Overseas Travel and Export Promotion Communication Provision for Doubtful Debts Sundry Balances/Bad Debts written off (Net) Less : Adjusted out of Provision of earlier years Professional and Consultancy Donations Loss on Sale of Fixed Assets (Net) Excise duty on stock Auditors Remuneration (net of service tax ) As Auditor Other Services Out of Pocket Expenses Miscellaneous expenses S chedule 2- C urrent L iabilities Sundry Creditors Due to Micro, Small and Medium Enterprises Others Advance from Customers Security Deposits Investor Education and Protection Fund shall be credited by Unclaimed Dividend (not due) Other Liabilities Interest accrued but not due on Loans Provisions Provision for Fringe Benefit Tax Proposed Dividend- Equity Shares Corporate Dividend Tax Provision for employee benefits 0 6464.8 6464.8 62 19.3 14.4 685 17.6 1 2174.7 0.8 0 0 674.5 674.5 69.4 18.4 29.5 1502.1 20.8 22.2 156.7 48.9 204.9 195.4 373.6 4.3 9.7 15.7 1033.6 215.7 21 121.3 31.3 150.9 129.5 311.4 3.9 9.2 22 711 203.2

227.8 22.7 91.3 602.4 36.8 26.4 0 97.3 10.3 0.7 -28.7

173.6 19.6 73.9 463.5 38.2 29.8 0.4 54.8 0.5 0 0

0 0

0.4 0

5.1 0.1 0.1

5.3 109.9 3255.1

4.7 0.1 0.1

4.9 150.3 2550.6

2175.7 369.6 82.6 9891

0.8 0 76.2 2391.7

76

Ratios
C urrent R atio:
Current Liablities includes deferred tax liability Current Assets Current Liabilities

20 09 27378.3 9151.9 2.99

2008 28055.9 9891.0 2.84 26400.2 9891.0 2.67 1025.2 42076.2 0.02 34,690.6 1,025.20 33.84 42,076.2 34,690.6 1.21 16,619.8 3,615.05 4.60 15267.4 204.9 195.4 224.16 0.43 6.28 721.2 16619.77

QuickR atio:
Liquid Assets (Cash, Debtors and Other current asset)

Liquid Assets Current Liabilities

19836.3 9151.9 2.17

Debt E quity R atio


Debt includes bothsecured & Unsecured loans Equity includes shareholder's funds

Debt Equity

236.0 51514.2 0.005

Total As etsto Debt R s atio


Debt includes bothsecured & Unsecured loans Total Assets include fixed and Current Assets

Total Assets Debt

35,130.4 236.0 148.86

Proprietery R atio

Shareholder's funds Total Assets

51,514.2 35,130.4 1.47 20833.5 4,381.85 4.75

S tockTurnover R atio

Cost of Goods Sold

Cost of goods sold include all factory expenses i.e Average Stock

Cost of Materials / Goods Stores and Spares Consumed Manufacturing Charges Power and Fuel Rent Insurance Personnel Cost

60% 10% 40% 60%

19098.8 282.3 247.7 302.64 0.65 11.56 889.86 20833.51

Net Sales Average A/c (average a/c recievables include sundry debtors) Recievables

DebtorsTurnover R atio

27,697.50 8,677.35 3.19

23,656.40 6,827.20 3.47 23,656.40 3,569.65 6.63

C reditorsturnover ratio
(average a/c payables include sundry creditors)

Net Sales Average A/c Payables

27,697.50 5,621.35 4.93

77

W orkingC apital Turnover R atio


(Working Capital =Current Assets-Current Liabilities)

Net Sales Net Working Capital

27,697.50 18,226.40 1.52

23,656.40 18,164.90 1.30 23,656.40 6,634.70 3.57 23,656.40 28,055.90 0.84

F ixed AssetsTurnover R atio

Net Sales Net Fixed Assets

27,697.50 7,752.10 3.57

C urrent AssetsTurnover R atio

Net Sales Current Assets

27,697.50 27,378.30 1.01

Gros Profit R s atio


(Gross Profit =Sales - Cost of Goods Sold)

Gross Profit Net Sales

x 100

6,863.99 7,036.63 27,697.50 23,656.40 24.78% 29.75% 12,954.10 10,522.00 27,697.50 23,656.40 46.77% 44.48% 12,652.90 10,140.40 27,697.50 23,656.40 45.68% 42.87%

Net Profit R atio

Net Profit Net Sales

x 100 (PBT)

(PAT)

78

OperatingR atio

Cost of goods sold+ Direct x 100 Expenses

23,986.81

17,211.07

(Direct Expenses include Office and Net Sales Administration, Marketing and Selling Expenses)

27,697.50 86.60%

23,656.40 72.75%

Direct Expenses: Power & Fuel Repair & Maintenance -Buildings -Others Rent Royalty Directors Sitting Fees Printing & Stationery Postage & Communication expenses Insurance Travelling & Conveyance expenses Books & Periodicals Legal & Professional charges Vehicle Running & Maintenance Auditors Remuneration Rates & Taxes Donation Subscription Staff Training & Recruitment Bad Debts & Advances written off Provision for Doubtful Debts & Advances Wealth Tax Foreign Exchange Fluctuation Loss Provision for Loss on Open Derivative Contracts Provision for Permanent Diminution in the value of investments Miscellaneous expenses 15.3 25.2

44.8 17.1 23.4

38.8

40.5 53 15 0 40 45 41 103 2 109 17 5 15 3 14 31 0 116 1 558 1703 168 29 3153.3

40.5 52 4 0 31 39 43 101 2 72 15 4 9 7 12 30 0 27 1 0 41 0 26 591.3

PBITD Capital (PBITD is Profit Before Interest, tax and Dividend) Employed

R eturn on Investm ent

x100

12,954.10 51,750.20 25.03%

10,522.00 43,101.40 24.41%

79

R atios
C urrent R atio:
Current Liablities includes deferred tax liability Current Assets Current Liabilities

2007 21874.4 2391.7 9.15

QuickR atio:
Liquid Assets (Cash, Debtors and Other current asset)

Liquid Assets Current Liabilities

15453.8 2391.7 6.46

Debt E quity R atio


Debt includes bothsecured & Unsecured loans Equity includes shareholder's funds

Debt Equity

10681.5 24494.9 0.44

Total Assetsto Debt R atio


Debt includes bothsecured & Unsecured loans Total Assets include fixed and Current Assets

Total Assets Debt

28,086.4 10,681.5 2.63

Proprietery R atio

Shareholder's funds Total Assets

24,494.9 28,086.4 0.87 12999.2 3,333.80 3.90

S tockTurnover R atio
Cost of goods sold include all factory expenses i.e

Cost of Goods Sold Average Stock

Cost of Materials / Goods Stores and Spares Consumed Manufacturing Charges Power and Fuel Rent Insurance Depreciation / Amortisation / Impairment Personnel Cost

60% 10% 40% 75% 60%

11579.8 150.9 129.5 186.84 0.39 11.56 347.025 593.22 12999.24 16,625.60 3,100.00 5.36

DebtorsTurnover R atio
(average a/c recievables include sundry debtors)

Net Sales Average A/c Recievables

C reditorsturnover ratio
(average a/c payables include sundry creditors)

Net Sales Average A/c Payables

16,625.60 674.50 24.65

80

W orkingC apital Turnover R atio


(Working Capital =Current Assets-Current Liabilities)

Net Sales Net Working Capital

16,625.60 19,482.70 0.85

F ixed AssetsTurnover R atio

Net Sales Net Fixed Assets

16,625.60 18,164.90 0.92

C urrent AssetsTurnover R atio

Net Sales Current Assets

16,625.60 21,874.40 0.76 x 100 3,626.37 16,625.60 21.81% 6,405.40 16,625.60 38.53% 6,289.30 16,625.60 37.83%

Gros Profit R s atio


(Gross Profit =Sales - Cost of Goods Sold)

Gross Profit Net Sales

Net Profit R atio

Net Profit Net Sales

x 100 (PBT)

(PAT)

81

OperatingR atio
(Direct Expenses include Office and Administration, Marketing and Selling Expenses)

Cost of goods sold+ Direct Expenses Net Sales

x 100

15,780.59

16,625.60 94.92%

Direct Expenses: Power and Fuel Rent Rates and Taxes Personnel Cost Depreciation / Amortisation / Impairment Insurance Selling and Distribution Commission and Discount Repairs Building Plant and Machinery Others Printing and Stationery Travelling and Conveyance Overseas Travel and Export Promotion Communication Provision for Doubtful Debts Sundry Balances/Bad Debts written off (Net) Less : Adjusted out of Provision of earlier years Professional and Consultancy Donations Loss on Sale of Fixed Assets (Net) Excise duty on stock Auditors Remuneration (net of service tax ) As Auditor Other Services Out of Pocket Expenses Miscellaneous expenses 21 121.3 31.3

311.4 3.9 9.2 395.48 115.7 22 711 203.2

173.6 19.6 73.9 463.5 38.2 29.8 0.4 54.8 0.5 0 0

0.4 0

4.7 0.1 0.1

4.9 150.3 2781.355 6,405.40 35,176.40 18.21% 82

R eturn on Investm ent


(PBITD is Profit Before Interest, tax and Dividend)

PBITD Capital Employed

x100

Sun Pharma:
Current Ratio: In 2007-08, the current ratio has decreased from 9.15 to 2.84. But the ratio has increased from 2.84 to 2.99 during 2008-09. This has happened due to an increase and then decrease in current liabilities and in current assets. Since the ideal current ratio is 2:1, the ratio for this company is slightly higher than the standard. Quick Ratio: In 2007-08, the quick ratio has decreased from 6.46 to 2.67. The ratio has further decreased from 2.67 to 2.17 during 2008-09. This has happened due to an increase and then decrease in current liabilities and liquid assets. Since the ideal liquid ratio is 1:1, the ratio for this company is higher than the standard. Debt-Equity Ratio: In 2007-08, the current ratio has decreased from 0.44 to 0.02. The ratio has further declined from 0.02 to 0.005 during 2008-09. This has happened due to an increase in equity and decrease in debt. Since the ideal current ratio is 2:1, the ratio for this company is very low than the standard. Total Assets to Debt ratio: In 2007-08, the Total asset to debt ratio has increased from 2.63 to 33.84. It has further increased from 33.84 to 146.86 during 2008-09. This has happened due to an increase in total assets and a decrease in debt. Proprietary Ratio: In 2007-08, the proprietary ratio has increased from 0.87 to 1.21. The ratio has again increased from 1.21 to 1.47 during 2008-09. This has happened due to an increase in Shareholders Funds and in total assets. Stock Turnover Ratio: In 2007-08, the stock turnover ratio has increased from 3.90 to 4.60. The ratio has further increased from 4.60 to 4.75 during 2008-09. This has happened due to an increase in average stock and cost of goods sold. Debtors turnover ratio: In 2007-08, the debtors turnover ratio has decreased from 5.36 to 3.47. The ratio has further declined from 3.47 to 3.19 during 2008-09. This has happened due to an increase in Net Sales in Average Account Receivables. Creditors turnover ratio: In 2007-08, the creditors turnover ratio has decreased from 24.65 to 6.63. The ratio has again decreased from 6.63 to 4.93 during 2008-09. This has happened due to an increase in net sales and in creditors. Working capital turnover ratio: In 2007-08, the working capital turnover ratio has increased from 0.85 to 1.30. The ratio has further increased from 1.30 to 1.52 during 2008-09. This has happened due to an increase in Net sales and an increase and then decrease in working capital. Current Assets turnover ratio: In 2007-08, the Current asset turnover ratio has increased from 0.76 to 0.84. The ratio has further increased from 0.84 to 1.01 during 2008-09. This has happened due to an increase in net sales and an increase and then a decrease in current assets. Fixed Assets turnover ratio: In 2007-08, the fixed asset turnover ratio has increased from 0.92 to 3.57. The ratio has remained same from 3.57 to 3.57 during 2008-09. This has happened due to an increase in fixed assets and in net sales. 83

Gross Profit ratio: In 2007-08, the gross profit ratio has increased from 21.81% to 29.75%. But the ratio has declined from 29.75% to 24.78% during 2008-09. This has happened due to an increase and then decrease in gross profit and an increase in net sales. Net Profit ratio: In 2007-08, the net profit ratio before tax has increased from 38.53% to 44.48%. The ratio has again increased from 44.48% to 46.77% during 2008-09. This has happened due to an increase in net profit and net sales. In 2007-08, the net profit ratio after tax has increased from 37.83% to 42.87%. The ratio has increased further from 42.87% to 45.68% during 2008-09. This has happened due to an increase in net profit and in net sales. Operating Ratio: In 2007-08, the operating ratio has decreased from 94.92% to 72.75%. But the ratio has increased from 72.75% to 86.60% during 2008-09. This has happened due to an increase in net sales and operating cost. Return on Investment: In 2007-08, the return on investment has increased from 18.21% to 24.41%. The ratio has further increased from 24.41% to 25.03% during 2008-09. This has happened due to an increase in capital employed and in Profit before Interest, Tax and Dividend.

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Financial Analysis (Inter-firm)


On Basis of Liquidity:
On basis of liquidity, Cipla is the company which is financially sound as compared to other companies.

On Basis of Solvency:
On basis of solvency, Sun Pharma is the company which is financially sound as compared to other companies.

On Basis of Profitability:
On basis of profitability, Sun Pharma is the company which is financially sound as compared to other companies.

On Basis of Turnover:
On basis of turnover, Cadillazydous is the company which is financially sound as compared to other companies.

Conclusion
From the above analysis, it is seen that Sun Pharma is the company that is financially sound in all parameters be it profitability, solvency or any other parameter.

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Bibliography
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http://www.zyduscadila.com/financials.html (Cadillazydous) http://www.cipla.com/whatsnew/financials.htm (Cipla) http://www.drreddys.com/investors/annual_reports.html (Dr.Reddy) http://www.panacea-biotec.com/report.html (Panacea Biotech) http://www.sunpharma.com/sunpharma-investor/annual-report.php (Sun Pharma)

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