PREFACE

Today is the age of competition. A lot of new firm entered in the market with new things. People everyday wants something new. So businessmen continuously do hard work and struggle to generate new ideas and to do something different from others. All this require not only theoretical knowledge but also some practical knowledge. Practice is more important for getting knowledge and experience. For getting real life experience practice, we have to do some practical work and these opportunities get in S.Y.B.B.A by preparing a financial report. From this practical study I got a very good experience and it improves my knowledge and it provides guidelines to me to do work in actual situation. Today there is scarcity of funds, so its very important for every company to make effective utilization of the funds. In these report I analyze the financial data of Cadila Healthcare Ltd. For these years and analyze the financial position of the company.

INDEX
CHAPTER SUBJECT PAGE NO.

1 2 3 4 5 6 7 8

COMPANY PROFILE RESULT OF OPERATIONS RATIO ANALYSIS ACCOUNTING POLICIES AND NOTES DIRECTORS REPORT AUDITORS REPORT COMMON SIZED STATEMENT CONCLUSION

1 7 15 45 49 54 57 60

CHAPTER: 1 COMPANY PROFILE

1.1 1.2 1.3 1.4 1.5 1.6

Name of the company Registered. Address of the company Brief introduction of the activities of the business Status in the market Awards Financial highlights

Name of the company: Cadila Healthcare Limited

tered Address:
Zydus Tower, Satellite Cross Roads, Ahmedabad-380015

Regis

Introduction Of The Activities:

The dawn of 50's ushered in an era of awakening. Having broken free from the bondage of dormant history, a need arose for the country to be self-sufficient in all spheres. Healthcare at this time was the sole domain of a few pharmaceutical giants. Coupled to this was the enormous task fighting the myth and malady by cutting across the barriers of communication so as to reach out to people and to ensure the most effective cure in the shortest possible time. Under such circumstances, with tenacity of purpose and unfailing zeal to achieve perfection in quality, Cadila was founded in 1952. At the time of India's independence in 1947 our Late Founder, Mr. Ramanbhai B. Patel was completing his graduation at the Baroda Science College. After completing his studies in pharmaceutical sciences, he went on to join L. M. College of Pharmacy, one of the oldest pharmacy colleges in India as a Lecturer. With the entire nation gearing up to make India self reliant, Mr. Ramanbhai B. Patel turned an entrepreneur, determined to contribute his share by setting up a pharmaceutical company. Emerging as a modest pharmaceutical company, Cadila in the early years came out with a wide range of innovative products.

Livirubra was a combination of intrinsic factor lipotropic factor, iron, folic acid and vitamin B12 used for treatment of Pernicious anemia. Neuroxin-12 was also a unique first-of-its-kind derivative where incompatible neurotropics B1, B6 and B12 were made compatible in a vial. Isopar was also a new product launched for the first time in the market. It was derivative of INH used in the treatment of tuberculosis. He thus set a trend for innovative healthcare solutions. By the early 1990s, Cadila was ranked the third largest pharmaceutical company in India. (ORG -December 1991, 1992, 1993). The decade also marked the beginning of a new economic framework and a shift in government policies. To thrive in this evolving environment, it became imperative for Cadila to restructure and streamline its business operations. Thus in 1995, Cadila Laboratories emerged as Cadila Healthcare under the aegis of the Zydus group. Moving beyond pharmaceuticals, the concept of total healthcare now forms the commercial heart of the group's operations and activities. Spearheading the combined activities of the group as a whole new identity, 'Zydus'. A phonetically powerful word, the name combines the ethos of the Greco-Roman God Zeus and the dawn of a new era. Zydus like Zeus also symbolizes the group's aspirations to contribute to the welfare of the people and to society at large.

Status In The Market:

Domestic Market: Zydus Cadila has a wide ranging presence in
formulations, Active Pharmaceutical Ingredients (API), diagnostics, health & dietetic foods, skin care and animal healthcare. A strong player in the domestic formulation sector, Zydus Cadila markets several need based therapies through its core divisions: Zydus Cadila, Zydus Alidac, Zydus Medica, Zydus Biogen and speciality divisions Zydus Neurosciences and Zydus Vaccicare. The company has solidified its position by launching several new products in cardiovascular, gastrointestinal, biological, pain management and anti-infective segments.

International Market: Globalization of business operations is one of

the thrust areas of the group. The initiatives undertaken on this front have resulted in high growth in both exports of branded formulations and APIs. The group exports branded formulations to 43 countries worldwide. To step up growth in exports, Zydus Cadila has been focussing on introducing new molecules. The company was the first to launch Pantodac and Zycel in Sri Lanka, Zycel in Uganda and Myanmar, Atorva in Vietnam, Pengra in Ukraine and Anti-AIDs therapy in Cambodia. Alongwith German Remedies Specialities Limited, a 100% subsidiary of GRL, it has emerged as the largest Indian group in formulation sales in Sri Lanka and is amongst the top 5 Indian Companies in Myanmar, Uganda, Vietnam, Mauritius and Singapore. The company has also identified a basket of 20 global brands, which will be registered and promoted in all existing and future markets. It has a total of 560 product registrations so far The Company's overall therapy focus with presence in cardiovasculars, gastrointestinals and pain management will drive a growth in exports. The company is also exploring possibilities of establishing a base in the larger markets like Indonesia, South Africa, Brazil and Algeria. The group markets APIs to 40 countries worldwide. The products exported include Amlodipine Besylate, Atorvastatin Calcium, Candesartan Cilexitil, Carvedilol Celecoxib, Ciprofloxacin HCL, Difloxacin, Enalapril Maleate, Enrofloxacin Famotidine, Paroxetine, Fluoxetine, Flucanazole, Loratidine, Glibenclamide Irbesartan, Itraconazol powder, Lamivudine, Lansoprazole powder Lansoprazole pellet 8.5% Loratidine (micronised) Losartan Pottasium and Meloxicam. In an industry which faces severe competition and continual price erosion, the group's focus is to maintain cost leadership and customer loyalty in both the domestic and export markets. The thrust in the coming years will be on the regulated markets of U.S.A and Europe.


ds:

Awar

At the World HRD Congress held at Mumbai, the Team HR received an award for the 'Organization with Innovative HR Practices'. Over 1,200 delegates comprising CEOs, HR professionals and consultants representing various countries in Asia, Middle East, Far East Europe and U.S. attended the Congress.

cial highlights:
CHANGE IN YEARS PROFIT PROFIT IN % 2005 1314 100.00 2006 1649 125.49 2007 2047 155.78 CHANGE IN SALES SALES IN % EPS(Rs) 10634 100 20.93 12460 117.17 26.26 14137 132.94 16.30

Finan

CHANGE IN EPS IN % 100 125.47 77.88

P ro fit
S eries 1 2500 2000 Profit in Million 1500 1000 500 0 2005 2006 ye ar 2007 1314 1649 2047

S a le s
15000 12500 Sales in Million 10000 7500 5000 2500 0 2005 2006 ye ar 2007 10634 14137 12460

10

CHAPTER: 2 RESULTS OF OPERATIONS

2.1 Profit of 3 years 2.2 Importance of cash profit 2.3 Calculation of cash profit

11

 GROSS PROFIT
(Rs. in Million)

YEAR 2006-07 2005-06 2004-05

GROSS PROFIT 8888 7370 6323

GROSS PROFIT

10000 Rs.(In Million ) 8000 6000 4000 2000 0

8888 7370 6323

2007

2006

2005 Year

NET PROFIT
(Rs. in Million)

YEAR 2006-07 2005-06 2004-05

NET PROFIT

NET PROFIT 2047 1649 1314

2500
PAT (IN LAKHS )

2047 1649 1314

2000 1500 1000 500 0 2007

2006

2005 Years
12

 EBIT
(Rs. in Million)

YEAR 2006-07 2005-06 2004-05

EBIT 2143 1683 1302

EBIT
2500 2143 1683 1302

PBT (In lakhs )

2000 1500 1000 500 0 2007

2006

2005

Years

EBT
YEAR 2006-07 2005-06 2004-05
EBT
2500 PBT (In lakhs ) 2000 1500 1000 500 0 2007 2006
13

EBT 2319 1888 1504

2319 1888 1504

2005 Years

 EAT
(Rs. in Million)

YEAR 2006-07 2005-06 2004-05

EAT 2047 1649 1314

EAT
2500 PBT (In lakhs ) 2000 1500 1000 500 0 2007 2006 2005 Years 2047 1649 1314

14

 IMPORTANCE OF CASH PROFIT

The statement of changes in financial position is a supplementary statement in addition to balance sheet and profit and loss account or income or revenue statement.

Relevance of Cash Profit

The Cash Profit is in an important measure of profitability as well as liquidity. When the Cash Profit differs from the profit shown in Profit and Loss Account or Profit and Loss Statement it indicates the impact on NonCash Expenses &Incomes. The cash profit is arrived at by adjusting depreciation, amortization of capital Expenses etc. The Cash profit is much less or negative compared to the profit declared in the profit and Loss Account. It indicates illiquidity and signals for appropriate Cash Management. The Net Cash fro operation can be calculated through adjustment of Non-Cash items like depreciation, changes in inventory &receivables and payables and all other items for which cash affects the investing and financing activities.

15

Cash Flow Statement

A Cash Flow Statement provides information that enables users to evaluate the changes in the assets of an enterprise, its financial structure and its ability to affect the amounts and timing of cash flows in order to adapt to changing circumstances. The Cash Flow Statement should report cash flows during the period classified by operating, investing and financial activities. Cash Flow Statement is concerned only with the change in cash and Fund Flow Statement is concerned with Changes in working capital.

CASH FLOW
31stMarch, 2005 (Rs.In Million) 31stMarch, 2006 (Rs.In Million) 31stMarch, 2007 (Rs.In million)

Cash inflow/(outflow) arising from operating activities Cash inflow/(outflow) arising from investing activities Cash inflow/(outflow) arising from financing activities Net increase/(Decrease) in cash/cash equivalents Add : Balance at the beginning of the year Cash/Cash equivalents at the close of the year

1221

557

2106

(563)

(985)

(1711)

(766)

187

(294)

(108) 372 264

(241) 264 23

101 23 124

16

 CASH FLOW STATEMENT ANALYSIS

Cash flow statement is divided into three major parts.

1. Cash inflow or out flow from operating activities In the year 2006 the cash flow from operating activities is lowest and after that in the year 2007 the companys out flow is highest. 2. Cash inflow or out flow from investment activities There is a high change in the year 2006 compare to 2005 I.E. 422 and in the year 2007 compare to 2006. I.e. 726 that means the company invest its money in investment. It is good for company because through it company get interest. 3. Cash flow from financing activities In the year 2005 the net cash flow from financing activities is 766 and after that it becomes positive. And after that it is decreasing to 294.
4.

Net increasing or decreasing in cash or cash equivalent

Whatever the increase or decrease in cash flows from the separate activities but the overall net increase in cash/ cash equivalents in the year 2005 is 108 Millions (Rs.), but in the year 2006 net decrease is 241 millions (Rs.) and in the year 2007 it is an increase to 101 millions (Rs.). So, it shows that as per cash flow statement the years 2007 is better than the year 2006 & 2005.

17

18

CHAPTER: 3 RATIO ANALYSES

3.1 Meaning & Importance of Ratio 3.2 Classification of Ratio 3.3 Functional classification

19

 MEANING OF RATIO ANALYSIS

Ratio is financial form should the comparison
1500000 1000000 500000 0 Year 2004

between two financial terms". It relationship between various related items in these financial statements is established, they can provide useful clues to judge accurately the financial health and ability of business to maximize the profit. This relationship between related items of financial is thus, one number expressed in form of return on paid up capital the net profit of the business is dividend by the paid up share capital. The figure so obtain is the ratio. It the same is multiplied by 100 a percentage rate of return on paid up capital is obtained.

EXPRESSION
In the form of percentage In the form of proportion of the value In the form of number of times

20

 IMPORTANCE OF RATIO ANALYSIS

Importance of Ratios:
In application to studying the rupee amount shown in the financial statements, relationships between different items may be established by computing various ratios. The relation between two related items of financial statement is known as Ratio. A ratio is thus, one number expressed in terms of other Ratios are particularly useful in comparing one years performance with other years, as well as one companys performance with anothers. In many cases the average ratios relating to companies in particular industries are available, and an individual companys ratio may be compared with such an average. Ratios help to make qualitative judgments depending upon the calculations made which are quantitative judgments. The ratio analysis involves comparison for a useful interpretation of the financial statements. A single ratio in itself does not indicate favorable or unfavorable condition. It should be compare with some standard. Standard of comparison may decided by the company or firm itself.

IMPORTANCE/UTILITY:
1) Profitability: Useful information about the trend of profitability is

available from profitability ratios. The gross profit ratio, net profit ratio of return on investment give a good idea of the profitability of business. On the basis of these ratios, investors get an idea about the overall efficiency of business, the management gets an idea about the efficiency of managers and bank as well as other creditors draws useful conclusions about repaying capacity of the borrowers.
2) Liquidity: In fact, the use of ratios was made initially to ascertain the

liquidity of business. The current ratio, liquid ratio and acid test ratio will tell whether the business will be able to meet its current liabilities as and when they mature. Banks and other leaders will be able to conclude from these ratios whether the firm will be able to pay regularly the interest & loan installments.
3) Efficiency: The turnover ratios are excellent guides to measure the

efficiency of managers. E.g. the stock turnover will indicate how efficiently the sale is being made, the debtors turnover will indicate the efficiency of collection department and assets turnover shows the efficiency with which the assets are used in business. All such ratios related to sales present a good picture of the success or otherwise of the business.
21

4) Inter firm comparison: The absolute ratios of a firm are not of much use,

unless they are compared with similar ratios of other firms belonging to the same industry. This is interring firm comparison, which shows the strength and weakness of the firm as compared to other firms and will indicate corrective measures.

5) Indicate trend: The ratios of the last three to five years will indicate the

trend in the respective fields. For example, the current ratios of a firm are lower than the industry average, but if the ratios of last five years show an improving trend, it is an encouraging trend. Reverse may also be true. A particular ratio of a company for one year may compare favorably with industry average but, of its trend shows a deteriorating position, if is not desirable. Only ratio analysis will provide this information.

6) Useful for Budgetary Control: Regular budgetary reports are prepared in

a business where the system of budgetary control is in use. If various ratios are presented in these reports, if will give a fairly good idea about various aspect of financial position.
7) Useful for Decision making: Ratio guide the management in making

some of the importation show an unsatisfactory position, the management may decide to get additional liquid funds. Even for capital expenditure decisions, the ratio of return on investment will guide the management can be judged on the basis and efficiency of each department can thus be determined.

22

 CLASSIFICATION OF RATIO:
Accounting ratio is generally classified as follows:
1) Traditional classification 2) Functional classification

(A) Traditional classification:

The ratio is grouped in to three categories on the basis of the statement from which the figures are taken for computing the ratio. It is well-known traditional classification and has been grouped since the advent of ratio analysis. The ratio according to this classification is: a. Revenue Statement Ratio b. Balance Sheet Ratio c. Composite Ratio

(B) Functional Classification:

Ratio is also grouped in accordance with certain tests. On this basis there are four categories of ratios:

PROFITABILITY RATIO:

Useful information about the trend of profitability is available from profitability ratio the gross profit ratio. Net profit ratio and ratio on return on investment give a good idea of a profitability of business on the basis of these ratios investors get and idea about the overall efficiency of business the management gets and idea about the efficiency of managers. 1. 2. 3. 4. 5. 6. Gross profit ratio Net profit ratio Operating ratio Return on capital employed Return on share holder fund ratio Debt services coverage ratio
23

TURNOVER RATIOS:

The turnover ratios are excellent guide to measure the efficiency of managers. The stock turnover ratio will indicate how efficiency sale is being. The debtors turnover will indicate the efficiency of collection department and assets turnover shows efficiency with which the assets are used in business. All such ratio related to sales present a good picture of success or otherwise of the business.

1. 2. 3. 4.

Debtors' Turnover Ratio Creditors Turn over Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio LIQUIDITY RATIO:

In fact the use of ratio was made initially to ascertain the liquidity of business. The current ratio, liquid ratio, and acid test ratio will tell whether the business will be able to meet its current liabilities and when the nature banks and lenders will be able to pay regularly the interest and loan installment

1. 2. 3.

Current Ratio Liquid Ratio Acid test ratio LEVERAGE RATIO:

It indicates the total capital of the company & its division into own funds & borrowed fund.

1. 2. 3. 4.

proprietary Ratio Debt Equity Ratio Long term Loan to Fixed Assets Ratio Capital Gearing Ratio OTHERS: 1. Long term fund to fixed assets
24

PROFITABILITY RATIO

GROSS PROFIT RATIO

(A) MEANING:This ratio measures the relationship between gross profit & net sales.

(B) OBJECTIVE:-

The main objective of computing this ratio is to determine the efficiency with which the production & or purchase operations are carried on.

(C) COMPONENTS:-

There are two components of this ratio.

1. Gross profit which is the excess of net sales of over cost of goods sold. 2. Net sales which is gross sales (both cash & credit)-sales return.

(D) CALCULATION:-

This ratio is calculated by dividing the gross profit by net sales. It is expressed as percentage. Form of formula of this ratio may be expressed as

Gross profit ratio

Particulars Gross Profit Sales Gross Profit Ratio
63 62 61 60 59 58 57

Gross profit = -------------------Sales

2007 8888 14137 62.87%
62.87 59.46

x 100
(Rs. in million)

2006 7370 12460 59.15%

2005 6323 10634 59.46%

Percentage(%)

59.15

2007

2006 Year 25

2005

(E) INTERPRETATION:-

In 2006 the percentage was low, it indicates that the cost of sales was high & purchase was not efficient. In the year 2005 and 2007 the percentage increased which showed satisfactory position of the company.

26

 Net Profit Ratio

A) MEANING:This ratio measures the relationship between net profit & net sales.

(B) OBJECTIVES:OBJECTIVES

The main objective of computing this ratio is to determine the overfull profitability due to various factors such as operational efficiency trading on equity, etc.

(C) COMPONENTS:1 Net profit 2 Net sales

There are two components of this ratio.

(D) CALCULATION:-

This ratio is computed by dividing the net profit by the net sales. It is expressed in percentage. In the form of the formula, this ratio may be expressed as under

Net profit ratio

Net Profit -------------------Sales

x 100

(Rs. in million)

Particulars Net Profit Sales Net Profit Ratio

2006-07 2047 14137 14.48%

14.48
Percentage

2005-06 1649 12460 13.23%

13.23 12.36

2004-05 1314 10634 12.36%

13 9 5 1 2007

2006

2005

Year

27

(E) INTERPRETATION:-

In the given financial year the net profit is very low in compare to the sales of the company. In 2005, 2006, 2007 the percentages of the net profit were 12.36%, 13.23%, and 14.48% respectively. This is not satisfactory for the companys management.

28

 Expenses Ratio
(A) MEANING:This ratio measures the relationship between expenses & net sales.

(B) OBJECTIVES:OBJECTIVES

To identify the causes of variations in the operating ratio, following expenses ratio can be calculated.

(C) COMPONENTS:1 Expense 2 Net sales

There are two components of this ratio.

(D) CALCULATION:-

This ratio is computed by dividing the expenses by the net sales. It is expressed in percentage. In the form of the formula, this ratio may be expressed as under

Expenses ratio

Expense -------------------Net Sales

2007 12872 14137 90.70%

x 100
(Rs. in million)

Particulars Expenses Sales Expenses Ratio

93 Rs in lakhs 92 91 90 89 88 2007 90.7

2006 11217 12460 90.02%

2005 9791 10634 92.07%

92.07 90.02

2006 Year

2005

29

(E) INTERPRETATION:-

In all three year the expenses are above 90% it very high which can be observed by Ratios which reduce the profit of the company which is not good for the organization.

30

 Operating Ratio
(A) MEANING:This ratio measures the relationship between cost of goods sold, operating expense & net sales.

(B) OBJECTIVES:OBJECTIVES

the main objective of calculating this ratio is to determine the operational efficiency with which production and purchase and selling operations are carried on. There are two components of this ratio.

(C) COMPONENTS:-

1 operating cost, which comprises: (a) Cash of goods sold (b) Operating expenses (office & administrative expenses, selling & distribution expenses, discount, bad debts, interest on short term loans etc) 2 Net sales: This means gross sales-sales return.

(D) CALCULATION:-

This ratio is computed by dividing the operating cost by the net sales. This ratio is expressed as a percentage. In the form of the formula this ratio is expressed as under

Operating Ratio

COGS + Operating Exp ---------------------------------- x 100 Net Sales

(Rs. in million)

Particulars Cost of good sold + Operating expenses Sales Operating Ratio

2007 12155 14137 85.90%

2006 10601 12460 85.08%

2005 9225 10634 86.75%

31

87 86.5 86 85.5 85 84.5 84

86.75 85.98 85.08

Percentage(%)

2007

2006 Year

2005

(E) INTERPRETATION:-

In the given financial year COGS very high in compare to the sales of the company. In 2005, 2006, 2007 the percentages of COGS were 86.75%, 85.08%, and 85.98% respectively. This is not satisfactory for the companys management.

32

 Return on Capital Employed

(A) MEANING:This ratio measures a relationship between net profit before interest & tax & capital employed.

(B) OBJECTIVES:OBJECTIVES

The objective of calculating this ratio is to find out the efficiency of the management. To invest a long term fund supplied by the bankers & share holders.

(C) COMPONENTS:(i)

There are two components of this ratio which are as under

Net profit before interest and tax. (ii)Capital employed which refers to long term funds supplied by the share holders and bank.

(D) CALCULATION:-

This ratio is calculated by dividing net profit before tax and interest by the capital employed.

EBIT Return on Capital Employed = ------------------------ x 100 Capital Employed

(Rs. In Million) 2004-05 1302 9784 13.31%

Particulars EBIT Capital Employed Return on Capital Employed

2006-07 2143 13300 16.11%

2005-06 1683 11735 14.34%

33

Percentage (% )

20 16.11 15 10 5 0 2007

14.34

13.31

2006 Year

2005

(E) INTERPRETATION:-

It is the most important ratio form the view point of management because success of the enterprise is judge with the help of this ratio. The ratio was lowest in 2005 but in 2006the percentage increase and again in 2007 also increase. So this situation indicates good situation of company. So they must try to increase their capital employed or to increase their profit.

34

 Returns on Shareholders Funds

(A) MEANING:This ratio measures a relationship between net profit after interest & tax & shareholders fund.

(B) OBJECTIVES:OBJECTIVES

The objective of calculating this ratio is to find out how efficiently the funds supplied by the share holders have been used.

(C) COMPONENTS:-

There are two components of this ratio which are as under

1) Net profit after interest and tax.

2) Shareholders fund This means equity share + preference share + reserves & surplus + p&L (cr.) preliminary expense

(D) CALCULATION:-

This ratio is calculated by dividing net profit after interest, tax by the shareholders fund. Net Profit after int. & tax ----------------------------------------- x 100 Shareholders Fund
(Rs. In Million)

Return on Shareholders Funds =

Particulars Net Profit (PAT) Shareholders Funds Return on shareholders Funds

24 23 22 21 20

2006-07 2047 8823 23.20%

2005-06 1649 7363 22.40%

2004-05 1314 6069 21.65%

Percentage (% )

23.2

22.4 21.65

2007

2006 Year

2005

35

Higher this ratio more benefits to shareholders because it shows what amount of dividend may given on shares. It indicates whether the return on proprietor funds is enough in relation to the risks that they undertake. In 2005 the percentage was lower but in 2006, the percentage increased. But again in 2007 the percentage increased. We can see that they are using their funds efficiently and they need to be used efficiently.

(E) INTERPRETATION:-

36

 Returns on Equity Share Capital

(A) MEANING:This ratio measures a relationship between net profit after interest, tax, preference share, dividend & equity shareholders fund.

(B) OBJECTIVES:OBJECTIVES

The objective of calculating this ratio is to find out how efficiently the funds supplied by the equity share holders have been used.

(C) COMPONENTS:-

There are two components of this ratio which are as under

1) Net profit after interest and tax & preference share dividend.

2) Equity share shareholders fund This means equity share + reserves & surplus + p&L (cr.) preliminary expense

(D) CALCULATION:-

This ratio is calculated by dividing net profit after interest, tax & preference share dividend by the shareholders fund.

N.P. (after int. & tax &pref.dividend) Return on Equity Share Capital = ----------------------------------------------Equity Capital
(Rs. In Million)

x 100

Particulars N.p.after int. tax&pref.dividend Share Capital Return on Equity shareholders Funds
Percentage (% ) 24 23 22 21 20 23.2

2006-07 2047 8823 23.20%

2005-06 1649 7363 22.40%

2004-05 1314 6069 21.65%

22.4 21.65

2007

2006 Year

2005

37

Higher this ratio more benefits to company because it shows what amount of capital. This ratio increases year to year it is more beneficial for the company. In 2005 it was 21.65% but in 2006 it was increase at 22.4% and again in 2007 it was increase to 23.2%.

(E) INTERPRETATION:-

38


(A) MEANING:-

Earning Per Share

This ratio measures a relationship between earnings available to an equity shareholder on a per share basis.

(B) OBJECTIVES:OBJECTIVES

The objective of calculating this ratio is to measure the profitability of the firm on per share basis.

(C) COMPONENTS:-

There are two components of this ratio which are as under

1) Net profit after interest and tax & preference share dividend.

2) Number of equity share

(D) CALCULATION:-

This ratio is calculated by dividing net profit after interest, tax & preference share dividend by no. of equity shares. Profit after int., tax& preference share dividend = ---------------------------------------------------------- x No. Equity Share
(Rs in Million)

Earning Per Share 100

Particulars Net profit After Tax No. of Equity Shares Earning Per Share(Rs.)

2006-07 2047 125613708 16.30

2005-06 1649 62806854 26.26

2004-05 1314 62806854 20.93

39

30 Rupees 25 20 15 10 5 0 2007 16.3

26.26 20.93

2006 Year

2005

The Earning per Share of the company increases in 2006 comparatively to 2005. It is beneficial to shareholders because more earning Per Share more dividends to shareholders and higher value of share.

(E) INTERPRETATION:-

40

 Dividend per Share

(A) MEANING:This ratio measures a relationship between earnings available to an equity shareholder on a per share basis.

(B) OBJECTIVES:OBJECTIVES

The objective of calculating this ratio is to find out the net distributed profit after interest, tax & preference share dividend belong to equity share holder.

(C) COMPONENTS:-

There are two components of this ratio which are as under

1) dividend paid to the equity share holder 2) Number of equity share

(D) CALCULATION:-

This ratio is calculated by dividing dividend paid to the equity share holder by no. of equity shares. Dividend per Share = Total Dividend -----------------------No. of Shares x 100

(Rs in Million)

Particulars Total Dividend No. of Shares Dividend Per Share(Rs.)

6 5 4 3 2 1 0

2006-07 502 125613708 4

6 6

2005-06 377 62806854 6

2004-05 377 62806854 6

Rupees

2007

2006 Year 41

2005

The Dividend per Share of the company was same in 2005 & 2006. But in 2007 it was decrease. It is not beneficial to shareholders because less dividend Per Share less dividends to shareholders and lower value of share.

(E) INTERPRETATION:-

42

 Price Earning Ratio

(A) MEANING:This ratio measures a relationship between market value of equity share and earning per share.

(B) OBJECTIVES:OBJECTIVES

The objective of calculating this ratio is to find out the expected rate of return in equity shares. There are two components of this ratio which are as under

(C) COMPONENTS:-

3) Market value per share 4) Earning per share

(D) CALCULATION:-

This ratio is calculated by dividing market value per equity share by earning per share. Market value per share ----------------------------------Earning per share
(In Rs.)

Price Earning Ratio

Particulars Market value Per Equity Share. Earning Per Share Price Earning Ratio (times)
24 23 22 21 20 19 18 17

2006-07 315.5 16.30 19.36

2005-06 608.2 26.26 23.16

2004-05 446.73 20.93 21.34

23.16 21.34 19.36

Time

2007

2006 Year

2005

43

(E) INTERPRETATION:-

In 2005-06the percentages increased which show satisfactory level but in 2006-07 the percentage decreases. It may because of high fluctuation in Market Price of shares of the company or due to little bit high earning per Share.

44

TURNOVER RATIOS

Fixed Assets Turnover Ratio

(A) MEANING:of the firm. This ratio measures a relationship between net sales and fixed assets

(B) OBJECTIVES:OBJECTIVES

The objective of calculating this ratio is to point out the efficiency of the firm in the use of fixed assets.

(C) COMPONENTS:3) Net sales.

There are two components of this ratio which are as under

4) Net fixed assets.

(D) CALCULATION:assets.

This ratio is calculated by dividing net sales by fixed Sales = -------------------Fixed assets
(Rs. In Million)

Fixed Assets Turnover Ratio

Particulars Net Sales Net Fixed Assets Fixed Assets Turnover Ratio (times)

2006-07 14137 7936 1.78

2005-06 12460 7449 1.67

2004-05 10634 7184 1.48

45

2 1.5 Time 1 0.5 0

1.78

1.67

1.48

2006-07

2005-06

2004-05

Year

(E) INTERPRETATION:-

The Ratio shows a increasing in 2006 compare with 2005. It is good for the company and again in 2007 increase. It shows higher efficiency and upward position of the company.

46

 Debtors Turnover Ratio

(A) MEANING:This ratio establishes a relationship between net credit sales and average trade debtors.

(B) OBJECTIVES:OBJECTIVES

The objective of calculating this ratio is to determine a efficiency with which the trade debtors are manage.

(C) COMPONENTS:-

There are two components of this ratio which are as under

5) Net credit sales=gross credit sales sales return. 6) Average trade debtors (including bills receivable)

Opening balance + closing balance ---------------------------------------------------2

(D) CALCULATION:average trade debtors

This ratio is calculated by dividing net credit sales by

Debtors Turnover Ratio

Credit Sales -----------------------Average Debtors

(Rs. In Million)

Particulars Credit Sales Average Debtors Debtors turnover Ratio

(times)

2006-07 14137 2386 5.92

2005-06 12460 1851 6.73

2004-05 10634 1088 9.77

47

10 8 6 4 2 0

9.77 5.92 6.73

2006-07

2005-06

2004-05

Year

(E) INTERPRETATION:In 2004-05 the ratio was high which shows effective collection policy. But in 2005-06 the ratio goes down. This shows the companys collection policy had ineffective. Again in 2006-07 the ratio decreases and company has not improved on the collection policy.

48

 Debtors Ratio
(A) MEANING:This is an average period for which the credit sales remain outstanding and measures the quality of debtors. It indicates the rapidity or slowness with which the money is collecting from debtors

(D) CALCULATION:debtors turn over ratio

This ratio is calculated by dividing 356 days by

Debtors Ratio

365days ---------------------------------Debtors turn over ratio

(Rs. In Million)

Particulars No. of working days Debtors turn over ratio Debtors Ratio
(days)

2006-07 365 5.92 62

2005-06 365 6.73 54

2004-05 365 9.77 37

80 60 40 20 0

62

64 37

2006-07

2005-06

2004-05

Year

(E) INTERPRETATION:-

49

 Creditors Ratio
(A) MEANING:The Creditors Ratio gives us the number of days within which the amount due for credit Purchase is payment. Similarly the number of days within which we payment to our creditors for Credit Purchase is obtained from Creditors Velocity Creditors Ratio = Creditors + B\p ------------------------------Average Daily Purchase
(Rs. In Million)

Particulars Creditors Average daily Purchases Creditors Ratio

187

2006-07 3265 17.43 187

2005-06 1619 14.41 117

2004-05 1501 12.76 118

200 150 100 50 0

117

118

2007

2006 Year

2005

(E) INTERPRETATION:-

In year 2005 the payment was made within 118 days which reduce to 117 days in 2006 but still increase to 187 days in 2007. The Ratio indicates that the company does not make speedier payments in 2007. * Bills Payable is not given in the report.

50

 Creditors Turnover Ratio

(A) MEANING:-

This ratio establishes a relationship between net credit purchase and average trade creditors.

(B) OBJECTIVES:OBJECTIVES

The objective of calculating this ratio is to determine an efficiency with which the trades creditors are manage.

(C) COMPONENTS:-

There are two components of this ratio which are as under

7) Net credit purchase=gross credit purchase purchase return. 8) Average trade creditors (including bills payable)

Opening balance + closing balance ---------------------------------------------------2

(D) CALCULATION:by average trade creditors.

This ratio is calculated by dividing net credit purchase

Creditors Turnover Ratio

Net credit purchase ---------------------------------Average creditors

(Rs. In Million)

Particulars No. of Days Creditors Ratio

Creditors turnover Ratio (times)

2006-07 365 187 1.95

2005-06 365 117 3.11

2004-05 365 118 3.10

51

4 3 2 1 0 2006-07 1.95

3.11

3.1

2005-06

2004-05

Year

52

 Stock Turnover Ratio

The number of times the average Stock is turned over the year is known as stock Turnover. It is computed by dividing the Cost of Good Sold by the average Stock in business. Average Stock is the average of opening and closing stock of the year. If however the monthly figures of the stocks are available, the average monthly stock will give a better Turnover Ratio.

Stock Turnover Ratio

COGS ----------------------Average Stock

(Rs. In Million)

Particulars Cost of Goods Sold Average Stock

Stock Turnover Ratio (times)

2006-07 5249 2707.5 2.22

2005-06 5090 2033.5 2.5

2004-05 4311 1939 1.94

2.5 2 Times 1.5 1 0.5 0

2.22

2.5 1.94

2006-07

2005-06

2004-05

Year

(E) INTERPRETATION:-

In 2005 the ratio was lower which is not profitable for the company. In 2006 it increases it may be because of high quality of goods, which was a better signal to the management. In the year 2007 this ratio also increase which is profitable for company.

53

LIQIDITY RATIOS

Current Ratio
(A) MEANING:-

This ratio establishes a relationship between current assets and current liabilities.

(B) OBJECTIVES:OBJECTIVES

The objective of calculating this ratio is to measure the ability of the firm to meet its short term obligation.

(C) COMPONENTS:1. Current assets 2. Current liabilities

There are two components of this ratio which are as under

(D) CALCULATION:Current Ratio = Current Assets ----------------------------Current Liabilities

(Rs. In Million)

Particulars Current Assets Current Liabilities Current Ratio

2006-07 8070 4507 1.79

2005-06 6088 2596 2.35

2004-05 4663 2419 1.93

54

2.5 2 1.5 1 0.5 0

1.79

2.35

1.93

Times

2006-07

2005-06

2004-05

Year

(E) INTERPRETATION:-

The Current Ratio shows that liquidity position of the company is satisfactory. In 2005-06 the ratio higher than other years it may because of excessive or idle inventories or may be low sales.

55

 Liquid Ratio
(A) MEANING:liabilities.

This ratio establishes a relationship between quick assets and current

(B) OBJECTIVES:OBJECTIVES

The objective of calculating this ratio is to measure the ability of the firm to meet its short term obligation as and when without relying on the realization of stock.

(C) COMPONENTS:-

There are two components of this ratio which are as under

1. quick assets 2. Current liabilities

(D) CALCULATION:Liquid Ratio = Liquid Assets ----------------------------Liquid Liabilities

(Rs. In Million)

Particulars Liquid Assets Liquid Liabilities Liquid Ratio

2006-07 4783 4507 1.06

2005-06 3960 2596 1.53

2004-05 2724 2419 1.13

2 Times 1.5 1 0.5 0 2006-07 1.06

1.53

1.13

2005-06

2004-05

Year

56

(E) INTERPRETATION:If the liquid assets are equal to or more than liquid liabilities, the condition may be considered as satisfaction. In this ratio asset is decreasing trend compare to last two year. It is not for company. It can also be liability neither increasing nor decreasing but over all ratios is decreased compared to last two years.

57

LEVERAGE RATIOS

Proprietary Ratio
Proprietary Ratio Proprietary Funds = ------------------------------ * 100 Net Assets

(Rs. In Million)

Particulars
Proprietary Funds

Net Assets Proprietary Ratio

2006-07 8823 14427 61.16%

2005-06 7363 12792 57.56%

2004-05 6144 10871 56.52%

62 61 60 59 58 57 56 55 54

61.16

Times

57.56 56.52

2006-07

2005-06 Year

2004-05

(E) INTERPRETATION:The ratio keeps on increasing in 2007. The higher the ratio, the stronger the financial position of the enterprise. But here the ratio is law in 2005-06 compared to previous years. It shows weaker financial position of company

58

 Debt Equity Ratio

Debt Equity Ratio

Long Term Liabilities -----------------------------Share Holders Fund

2006-07 3627 8823 41.11% 2005-06 2874 6144 46.78%

100

(Rs. In Million)

Particulars Total Long Term Debts Shareholder Funds Debt Equity Ratio

2004-05 3125 7363 42.44%

48 46
Times

46.78 42.44 41.11

44 42 40 38 2006-07 2005-06

2004-05

Year

(E) INTERPRETATION:-

In year 2006-07 the ratio was lower compared to the year 2005-06 and 2004-05. This indicates that the company has taken a good benefit of trading on equity in year 2005-06 and 2004-05 but in 2006-07 it was very low because the long term debt of the company is very low compare to their shareholders funds.

59

OTHERS Long Term Funds to Fixed Assets

Long Term Funds to Fixed Assets = Long Term Fund --------------------------Fixed Assets
(Rs. In Million)

Particulars Long Term Funds Fixed Assets Long Term Funds to Fixed Assets
2 1.5
Times

2006-07 12450 7415 1.68

2005-06 10488 6860 1.53

2004-05 9018 6784 1.33

1.68

1.53

1.33

1 0.5 0 2007 2006 Year 2005

(E) INTERPRETATION:Every year the ratio keeps on increasing. It is more than 1:1 which shows an satisfactory position.

60

61

ACCOUNTING POLICIES AND NOTES 1. ACCOUNTING POLICIES

A. a)

FIXED ASSETS AND DEPRECIATION

(I) All tangible fixed assets are stated at their historical cost less

accumulated depreciation. Depreciation on fixed assets, except on leasehold land, EO Derivative unit and Catalysts, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the companies Act, 1956. Depreciation on fixed assets of EO Derivative unit is provided on written down value method (WDV) at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on catalyst is provided on straight line method (SLM) over the technically assessed useful life. Depreciation on additions/disposal is provided with reference to the month of addition/disposal. (ii) Certain Plant and Machinery considered as continuous process plant based on technical evaluation. (iii) Leasehold land is amortized over the period of lease. (iv) Depreciation on increase/decrease in value due to foreign exchange fluctuation is provided on straight line method over the residual life of the assets. Intangible assets: Computer Software are accounted for at their cost of acquisition and amortized over the estimated useful life not exceeding six years.

b)

B.

EXPENDITURE DURING CONSRUCTION

Expenditure during construction period is being included under capital work-in progress and the same is allocated to fixed assets on completion of installation / construction.

C.INVESTMENTS
Long term investments are stated at cost. When there is a decline other than temporary in their value, the carrying amount is reduced on individual investment basis and is charged to Profit & Loss Account. Current Investment is valued at lower of cost or fair value.

62

D.VALUATION OF INVENTORIES
Inventories are valued at lower of cost and net realizable value except stock of residual products and scrap which are valued at net realizable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, labor, related overheads and duties thereon.

E.FOREIGN EXCHANGE TRANSACTIONS

Foreign currency transactions are recorded at the rate of exchange prevailing at the date of transaction. Foreign Currency Assets and Liabilities are converted at the exchange rates prevailing at the year end except those covered under firm commitment which are stated at contracted rate. The increase/decrease in liability outside India is adjustable to the cost of fixed assets and in respect of others is charged to the revenue account.

F. MANAGEMENT OF RAW MATERIAL (GUAR GUM) PRICES

Risk associated with fluctuation in the price of Guar Gum (Raw Material) is mitigated by hedging on futures/option market. The results of this hedging contract/transaction are recorded upon their settlement as part of Raw Material cost. Portion of Cash flow of the extent of underlying transactions having not been completed is carried forward as receivable/payable.

G. RETIREMENT BENEFITS
The Superannuation Scheme is a defined benefit plan which has been funded and the annual contribution to the fund is expensed. The Gratuity Scheme is a define benefit plan, which is funded and the liability of accrued gratuity based on actuarial valuation as confirmed is accounted for on actuarial basis as at the year end.

H. GOVERNMENT GRANTS
Grants in the nature of Project Capital Subsidy and credited to Capital Reserves. Other Government grants are deducted form the related expenses.
I.

BORROWING COST

Interest and other costs in connection with the borrowing of funds are capitalized up the date where such qualifying assets are ready for its intended use and other borrowing costs are charged to profit and loss account.

63

J.

PROVISION FOR CURRENT TAX AND DEFERRED TAX

Provision for current tax has been made on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961. Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act,1961 is accounted for, at the enacted/ substantially enacted rate of Tax , to the extent that the timing differences are expected to crystallize. Deferred tax assets are recognized only to the extent that there is a reasonable / virtual certainly that sufficient future taxable profits will be available against which such deferred tax assets can be realized.

K.

IMPAITMENT

Where the recoverable amount of fixed assets is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

L. USE OF ESTIMATES AND ASSUMPTIONS

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates are recognized in the period in the results are known / materialized.

M. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements

64

65

DIRECTOR'S REPORT
Twelfth annual General meeting to the members. Yours directors take pleasure in presenting 12th annual Report on the business and operations of the company together with the audited accounts for the ended 31st March 2007.

FINANCIAL RESULTS:
(Rs.In Million)

Particulars
Sales and other income
Operating Profit Less: Depreciation Profit before Interest & Tax and extra ordinary item Less: Interest Less: Extra Ordinary Items Profit before Tax Less: Provision for Tax Profit After Tax Add: Profit brought forward from the previous year Profit available for appropriation Earning per Share in Rs. Before Extra Ordinary items After Extra Ordinary items

2006-07

2005-06 Growt h (%)

13216 2820 -616 2204 -205 -111 1888 -239 1649 +1490 3139 14.01 13.13 14.57 12.13 -8.28 13.20 (14.15) (100) 22.83 -13.81 24.14 +59.80 41.06

15141 3162 -667 2495 -176 0 2319 -272 2047 +2381 4428 16.30 16.30

66

 OPERATION & BUSINESS PERFORMANCE

During the year under review, the Company achieved sales of Rs. 15014 mn, showing a growth of 14.76% Compared to the previous year. The PBIDT increased by 12.13% to Rs. 3162 mn. The Profit before Tax was higher 22.83 % to Rs. 2319 mn. The Profit after Tax increased to Rs. 2047 mn up 24.14% compared to Rs. 1649 mn in 2005-06. The Company achieved EPS (After Extraordinary items) of Rs. 16.30 compared to Rs. 13.13 in 2005-06, calculated on the enhanced capital after bonus of 1:1.

DIVIDEND Directors are pleased to recommend a dividend of Rs. 4/- per equity share on 12, 56, 13,708 equity shares of Rs. 5/- each for the financial year ended 31st March, 2007. The dividend, if approved by the shareholders, will be paid to the eligible shareholders within the period stipulated by the Companies Act, 1956. The Dividend Payout ratio for the current year (inclusive of corporate tax on dividend distribution) will be 28.68%.

ISSUE OF BONUS SHARE

The company has issued of bonus shares in the ratio of one equity share for every one existing equity share of the Company held by the members on 31st Aug, 2006 record date to be fixed by the Board. The bonus shares rank pari passu in all respects with the existing fully paid up equity shares of the Company, including any dividend declared for the financial year 2006-07

ACQUISITION The Company has entered into share purchase agreement to acquired 97.95% stake in LIVA Healthcare Ltd, a closed held public company from its promoters LIVA is carrying on business of manufacturing and marketing of formulations and is focused on Derma Segment. As on the date of 31st March,2007, the transaction is completed in the company has taken over charge of the management of LIVA.

67

 PERFORMANCE OF SUBSIDIARIES COMPANY

The performance of subsidiaries and joint ventures as per the audited accounts of the respective subsidiary / joint venture companies are summarized hereunder. The audited accounts for the foreign subsidiaries are as on December 2006 / February 2007. The January / February to March 2007 accounts are subjected to limited review. DIRECTORS Mr. Sharvil P. Patel and Mr. Apurva S. Diwanjir, Directors of the Company retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment. The Board recommends the reappointment of Mr. Sharvil P. Patel and Mr. Apurva S. Diwanjir, who have offered themselves for re-appointment. In accordance with stipulation under Clause 49 of the Listing Agreement, brief resume of Mr. Sharvil P. Patel and Mr. Apurva S. Diwanjir, together with nature of their expertise in specific functional areas and names of the companies in which they hold office of a Director and/or the Chairman/Membership of Committees of the Board, is given in the Notice of the Annual General Meeting.
DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956 and to the best of their knowledge and belief, and according to the information and explanations provided to them, your Directors hereby state that: (a)The Annual Accounts for the year ended 31st March 2007 are prepared on going concern basis. (b)In preparation of the Annual Accounts, all the applicable accounting standards have been followed. Necessary explanations are given for material departures, if any; (c) Sound accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as on 31st March, 2007 and of the profit of the Company for the year ended on that date;

68

(d)Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the companies Act, 1956 for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities;

CORPORATE GOVERANCENCE The Company complies with the mandatory provisions of Corporate Governance as prescribed in Clause 49 of the Listing Agreement. The Board of Directors of the Company had evolved and adopted a Code of Conduct which is available on the website of the Company www.zyduscadila.com. AUDITORS The Audit Committee of the Board of Directors of the Company has recommended the re-appointment of M/s. R. R. Patel & Company and M/s. Mukesh M. Shah & Company, both Chartered Accountants, as joint auditors of the Company, who retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment as statutory auditors.

ACKNOWLEDGEMENT

Directors place on record their deep sense of appreciation of the contribution made by the employees at all levels, including that of subsidiaries and joint ventures for their dedicated service, enabling the Company to achieve good performance during the year under review. Directors also take this opportunity to place on record the valuable co-operation and continued support extended by the financial institutions, Company's bankers, medical professionals, foreign collaborators, business associates and investors. .

For and on behalf of the Board.

Pankaj R. Patel Chairman

69

70

71

AUDITORS REPORT
To the members of the Cadila Healthcare LTD. The attached balance sheet of Cadila Healthcare Limited, as at 31 march 2007, the profit and loss on that date annexed there too. This financial statement .Our re-mints based on our audit.
st

We conducted our audit in accordance with the auditing standards generally accepted in India. That standard requires that we plan and perform the audit to obtain reasonable as-surface about whether the financial statements are free of materials misstatement. An audit includes examine, on test basic, evidence supporting the amounts and disclosures in the financial statements. An audit includes assessing made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 1.as required by the companies order 2003 issued by the central government of India in terms of section 227 of the companies Act, 1956 we enclose in the an annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. 2. Further to our comments in the annexure referred to in paragraph 1 above, we report that: (a) We have obtained all the information and explanations, which to the best our knowledge and belief were necessary for the purpose of our audit; (b) in our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books; (c) The balance sheet, profit & loss account and cash flow statement dealt with by this report are in agreement with the books of account; (d) in our opinion, the balance sheet, profit & loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in section 211 (3C) of the companies act,1956; (e) As per the information and explanations given to us, none of the director of the company is disqualified from being appointed as a director under clause (f) Of the section (1) of the section companies act, 1956;
72

(g)In our opinion and to the best of our information and according to the explanations given to us , the said accounts read together with notes thereon, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :
i.

In the case of balance Sheet, of the state of affairs or the company as at 31st March 2007;

ii. In the case of the profit & Loss Account, of the profit for the year ended on the date and iii. In the case of Cash Flow Statement, of the Cash Flows for the year ended on the date.

For R.R. Patel & CO., (Chartered Accountants)

Accountants)

For Mukesh Shah & CO., ( Chartered Mukesh M.

Partner

(R.R. Patel) Shah

Proprietor

Membership No.:-7871 30190 Ahmedabad 26th May, 2007

Membership No.:-

73

74

COMMON SIZE STATEMENTS

Profit and Loss Account

PARTICULARS 2006-07 % 2005-06 % 2004-05 %

INCOME
Sales & Inc. from Operating

Gross Sales Less: Excise duty Net sales Incomes from operation Other Income
TOTAL EXPENDITURE

15014 -877 14137 +482 +522 15141

106.20 -6.20 100 +3.41 +3.69 107.10

13082 -622 12460 +377 +379 13216

104.99 -4.99 100 +3.02 +3.04 106.06

11253 -619 10634 +313 +3472 11419

105.82 -5.82 100 +2.94 +4.44 107.38

Consumption of Materials & Finished Goods General Expenses Research Expenses Int.& Financial Charges Depreciation
TOTAL PR0FIT BEFORE EXTRA ORDINARY ITEMS & TAX

5249 5439 1291 176 667 12822

2319 0.00 2319 272 2047 2381 4428

37.13 38.47 9.13 1.24 4.72 91.12

16.40 0.00 16.40 1.92 14.46 16.84 31.32

5090 4489 817 205 616 11217

1999 -111 1888 239 1649 1490 3139

40.85 36.03 6.56 1.64 4.94 90.02

16.04 0.89 15.15 1.92 13.23 11.96 25.19

4311 4002 710 202 566 9791

1628 124 1504 190 1314 1064 2378

40.54 37.62 6.68 1.90 5.34 92.07

15.32 1.17 14.14 1.79 12.36 10.01 22.37

Less: Extra Ordinary Item

PROFIT BEFORE TAX Less: Provision For Taxation PROFIT AFTER TAX Add: Balance brought Forward PROFIT available for appro. APPROPRIATION:

Proposed Dividend Corporate Tax on Dividend Transfer to General Reserve TOTAL

502 85 3000
3587

3.55 0.60 21.22

25.37

377 53 328
758

3.02 0.43 2.63

6.08

377 53 458
888

3.54 0.50 4.31

8.35

NET PROFIT

841

5.95

2381

19.11

1490

14.01

75

Balance Sheet.
PARTICULARS 2006-07 % 2005-06 % 2004-05 %

Source of Funds
1.Share Holders Fund

Capital Reserve & Surplus

2.Loan Fund

628 8195

4.35 56.80

314 7049

2.45 55.10

314 5830

2.89 53.63

8823
3627 850 4477 13300
1127

61.16
25.14 5.89 31.03 92.19
7.81

7363
3125 1207 4332 11695
1097

57.56
24.43 9.44 33.86 91.42
8.58

6144
2784 841 3625 9859
1012

56.52
25.61 7.34 33.35 90.69
9.31

Secured Loan Unsecured Loan

3.Deferred Tax Liability

TOTAL

14427

100 12792

100

10871

100

Application of Funds
1.Fixed Assets
Gross Block Less: Depreciation 11292 -3877 78.27 -26.87 10151 -3291 79.35 -25.73 9505 -2721 87.43 -25.03

Net Block
Capital work-in-progress Preope. & Project Exp.

7415
521 0.00

51.40
3.61 0.00

6860
589 0.00

53.63
4.60 0.00

6784
396 4.00

62.40
3.64 0.04

TOTAL 2.Invesment 3.Current Assets

Inventories Sundry Debtors Cash & Bank Balance Loan & Advances

7936 2928
10864

55.01 20.30
75.30

7449 1852
9300

58.23 14.47
72.70

7184 1368
8552

66.08 12.58
78.67

3287 2386 124 2273 8070 3764 743 4507

22.78 16.54 0.86 15.76 55.94 26.09 5.15 31.24

2128 1851 23 2086 6088 1999 597 2596

16.63 14.47 0.18 16.31 47.59 15.63 4.67 20.29

1939 1088 264 1372 4663 1844 575 2419

17.84 10.01 2.43 12.62 42.89 16.96 5.29 22.25

Less: Current Liabi.

Liabilities Provision

Net Current Assets 4. Miscellaneous Exp.

3563 0.00

24.70 0.00

3492 0.00

27.30 0.00

2244 75

20.64 0.69

TOTAL

14427

100 12792

100

10871

100

76

77

FINDINGS

Annual Report of Cadila Healthcare LTD.

12th Annual Report 2006-2007 11th Annual Report 2005-2006

1) 2)
3)

B.S. Shah of S.Y.B.B.A Financial Management - M.Y. Khan & P.K. Jain. Financial management P.V.Kulkarni

78

CONCLUSION
From the analysis of three years published data of Cadila Healthcare Ltd. find that it is professionally well-managed company. It has enough experience of business when I read the annual report of three years of the company and after analysis the figures of three years I find that current year is best for the company compared to last two years. In this year, company has get more benefit so that it paid more dividends to its shareholder at quite more that last two year for lifetime but company tries to increase the dividend rate by good efforts.

79