Ley del impuesto al valor agregado

2004 2005 2006 2007 2008

SHARE CAPITAL 100 100.18 100.29 100.33 113.07

RESERVES

&SURPLUS 100 94.4 93.19 101.29 143.53

SECURED LOANS 100 265.4 168.17 273.72 121.52

UNSECURED

LIABILITY 100 87.67 87.07 100.29 426.3

PROVISIONS 100 81.52 102.93 145.36 143.99

Table 2

INVENTORIES 100 99.4 106.54 108.9 133.71

S. DEBTORS 100 102.8 129.19 112.52 130.57

CASH & BANK

ADVANCES 100 66.41 76.77 135.18 168.03

Table 3

Figure 1

Figure 2

TREND:The proportion of share capital in the total liabilities has been declining over the years.

A major fall was seen during the year 2006.

REASON: To fund the several inorganic growth initiatives, the company during March 2006,raised US $ 440 MN through a FCCB offering. This was by far the largest fund raising exercise in the Indian pharmaceutical sector.Debt was raised through various other modes also.

INTERPRETATION:Depicts decreasing reliance of the company on share holder’s money and deployment of the retained profits along with debt.

Figure 3

Figure 4

TREND: As depicted by the graph the percentage of resrves and surplus declined steeply during the year 2006 and remained consistent over the next to years.

REASON: A substantial decline in resrves and surplus in theyear 2006 was seen because of the augmentation,modernization and automation of manufacturing capacities and research and development involving substantial investments.

INTERPRETATION: Ranbaxy has ensured heavy internal accruals over the years to fund its operations along with expansions.

Figure 5

Figure 6

TREND: Secured loans have shown an intresting trend. Decreasing in the year 2006, then rising in the next year followed by a steep fall.

REASON:loans were raised to fund the Capex plans of the company during the year 2007, while majority of them were retired through the proceedes of the Daiichi Sankyo deal and thus resulted in the decline in both the terms as a percentage of total liablities as well as absolute value.

INTERPRETATION: Secured loans have been major component of the capital structure of Ranbaxy though their proportion has declined during the last year.

Figure 7

Figure 8

TREND: As can be seen from the graph unsecured loans rose at an unpreecedenting pace and then fell abruptly as percentage of total liabilities while the amount kept increasing througout the period.

REASON:Raising of the FCCBs along with other loans to finance the updation and modernization of various facilities lead to the increase in the proprtion of the unsecured loans.

INTERPRETATION: The continuous increase in value clearly depicts increasing reliance on debt and specifically unsecured ones might be because of the ease with which these can be raised.

Figure 9

Figure 10

TREND: Current liabilities as a proportion of total liabilities kept falling for the first three years while increased abruptly in the year 2008.

REASON: When seen in conjunction with the long term liabilities this fall can be attributed to the increase in the more than proportionate increase in the long term loans. The sudden increase in the current liabilities was because of the loss borne because of the fair valuations of the derivatives.

INTERPRETATION: The steep increase in the current liabilities is not a major cause of concern for the company because it is a consequence of factors not within the control of the company.

Figure 11

Figure 12

TREND: The value of fixed assets as a proportion of total assets has been declining over the years. This is despite extensive capital expenses being taken over by the company.

REASON: The main reason behind such a trend is huge investments being made by the company in different ventures along with the expansion of various facilities of Ranbaxy. Also Greenfield investments were made.

INTERPRETATION: Though the absolute value of fixed assets has been increasing still an increasing proportion of the assets are being locked up in the low yielding short term assets which may be a cause for concern.

Figure 13

Figure 14

TREND: A consistent fall in the work in progress can be seen in the graph as a percentage while the absolute value continuously increased.

REASON: Efforts towards reducing working capital lead to a well managed inventory situation which is clearly depicted in the graph. A substantial fall in the working capital was observed during the year 2007.

INTERPRETATION: Reduction in the proportion of capital WIP is a sign of the increasing efficiencies of the company. Also it depicts the declining importance of WIP among total assets of Ranbaxy.

Figure 15

Figure 16

TREND: Ranbaxy experienced an increase in the proportion of investments while a fall was seen in the last year. The absolute value of investments has been increasing and they form a substantial proportion of the total assets.

REASON: Acquisition of controlling stakes in entities in as well as abroad is the basic reason.

The increase is particularly high in the year 2006 in which Ranbaxy made significant acquisitions.

INTERPRETATION: Ranbaxy has been focusing on different modes of growth and expanding wings across the world. That’s why continuous endeavors are being made to control the various

Figure 17

Figure 18

TREND: Inventories as a proportion of the total assets has been declining over the years despite a slight increase in their absolute values over the years.

REASON: A concentrated effort towards reducing working capital during the year 2006 &2007 lead to a significant decline in the level of inventories, receivables which is clearly depicted in the graph. A reduction in the level of working capital has added to the efficiencies of Ranbaxy.

INTERPRETATION: Operational efficiencies of Ranbaxy have been improving which is clearly shown by this trend. Inventory is being quickly converted in to receivables and thus improving the working capital scenario.

Figure 19

Figure 20

TREND: Sundry debtors have been loosing importance as a percentage of total assets. Absolute value increased at a seep rate in the year 2006 followed by a sudden fall. A sort of revival was observed during the last year.

REASON: Sales of Ranbaxy increased at a robust pace during the year 2006 which created better receivable condition for the company .A concentrated effort towards reducing working capital during the last some years lead to a significant decline in the level of inventories, receivables which is clearly depicted in the graph. A reduction in the level of working capital has added to the efficiencies of Ranbaxy.

INTERPRETATION: The decline in the operating cycle has added on to the effectiveness of the company.

Figure 21

Figure 22

TREND: Cash levels of Ranbaxy have remained consistent except for the last year when a sharp increase in the level of cash was seen.

REASON: As a part of the Daiichi Sankyo deal the company received US $736 million which was basically responsible for the sudden increase in the level of cash.

INTERPRETATION: A constant level of cash despite the increase in the level of operations along with sales is a sure sign of efficient cash management at Ranbaxy.

Figure 23

Figure 24

TREND: Sharp fluctuations can be seen in the level of loans and advances as a percentage of total assets,while the absolute value kept on increasing.

REASON: Continous efforts towards reducing working capital , improved the current asset position conditions and thus the level of loans and advances.

INTERPRETATION: The company has turned compariritively more efficient in terms of