Analysis of Quarterly Results Quarter IV : 2013-14

June 16, 2014

Prepared By: Parag PitliyaInternal Audit Department

Contents at a Glance

2Internal Audit Department

Sr. No. Scheme of Presentation Slide No.

1 Overview 3

2 Types of analysis 4

3 Introduction of IPCA 5

4 Comparative Analysis 6-8

5 Ratios Analysis 9-14

6 Peer Review 15

7 Stock Market 16

8 Summary 17

Overview

Financial Statements

3Internal Audit Department

Statement of financial position( Balance Sheet)

Income Statement(Statement of Profit & Loss)

Cash flow statement

Statement of Changes in Equity

Types of Analysis

Types of Analysis

4Internal Audit Department

Comparative Analysis Ratio Analysis

• Current year’s IV Quarter to last year’s IV Quarter comparison

• IV Quarter to P.V. Year comparison

• Current year to Last year comparison

• Activity Ratio

• Profitability Ratio

• Return Ratio

• Liquidity Ratio

• Financial Ratio

• Shareholder Ratio

Introduction of IPCA

5Internal Audit Department

Comparative Analysis

6Internal Audit Department

Rs. In CroreComparison of Quarter IV from last year Quarter IV

Particulars

2012-13Quarter-IV(Audited)

2013-14Quarter-IV(Audited)

Change(In amount)

Change (in %) Remarks

Total Income from operations 671.71 749.61 77.90 11.60% Favorable

change

Total operating Expenses 551.01 593.25 42.24 7.61% Favorable

change

Foreign exchange translation gain 7.77 18.19 10.42 134.10% Favorable

change

Profit from ordinary activities before

tax

125.51 174.5 48.99 39.03% Favorable

change

Net Profit for the period after tax 75.43 137.03 61.60 81.60% Favorable

change

Earning Per Share 5.98 10.86 4.88 81.60% Favorable

change

Major Heads o

f

St.of P

rofit & Loss

Comparative Analysis

7Internal Audit Department

Comparison of Quarter IV from P.Y 2013-14 Rs. In Crore

Particulars2013-14

(Audited)2013-14

Quarter-IV(Audited)

Standard Share(In %)

Actual Share(In %)

Remarks

Total Income from operations 3234.82 749.61 25% 23.17% Reasonable

Total operating Expenses 2530.48 593.25 25% 23.44% Reasonable

Foreign exchange translation

gain

72.10 18.19 25% 25.22% Reasonable

Profit from ordinary activities

before tax

629.09 174.5 25% 27.73% Reasonable

Net Profit for the period after

tax

477.37 137.03 25% 28.70% Reasonable

Major Heads o

f

St.of P

rofit & Loss

Comparative Analysis

8Internal Audit Department

Comparison of P.Y. 2014 from P.Y. 2013 Rs. In Crore

Particulars2012-13

(Audited)2013-14

(Audited)Change

(In amount)Change

(in %) Remarks

Shareholders’

fund

1569.85 1981.61 411.76 26.22% Favorable change due to

increase in R/S by Rs 411.76cr

Non Current

Liability

509.21 454.10 (55.11) (10.88%) Company paid 75cr Long Term

Borrowing in 2013-14

Current Liability 629.69 781.39 151.70 24.09% Reasonable change

Non Current

Assets

1323.95 1633.55 309.60 33.38% Company purchased Fixed

assets amounting 365cr

Current Assets 1384.80 1583.55 198.75 14.35% Reasonable change

Major Heads o

f

Balance Sheet

Internal Audit Department 9

S. No

Name Formula -------Ratio-------2013 2014

Remarks

1 Inventory Turnover Ratio

Cost of goods sold/ Inventory

1.48 1.44 Change is unfavorable for Company, It should be Increase

2 Total Assets Turnover Ratio

Sales/ Total Assets 1.01 0.98 Change is unfavorable for Company, It should be Increase

3 Fixed Assets Turnover Ratio

Sales/ Fixed Assets 2.27 2.16 Change is unfavorable for Company, It should be increase

Activity Ratios

Ratios Analysis

Internal Audit Department 10

S. No

Name Formula -------------Ratio--------- 2013 2014

Remarks

1 Gross Profit Margin

Gross Income/ Sales

0.60 0.65 Favorable :-G.P. Ratio Increased by 8.33% in P.Y. 2013-14

2 Operating Profit Margin

Operating Income/ Sales

0.19 0.21 Favorable change in P.Y. 2013-14

Profitability Ratios

Ratios Analysis

Internal Audit Department 11

S. No

Name Formula -------------Ratio---------- 2013 2014

Remarks

1 Operating Return on Assets

Operating Income/ Total Assets

0.19 0.21 Favorable change in P.Y. 2013-14

2 Return On Assets

Net Income/ Total Assets

0.12 0.14 Favorable change in P.Y. 2013-14

Return Ratios

Ratios Analysis

12Internal Audit Department

Ratios Analysis

Liquidity Ratios

S. No

Name Formula ------------Ratio--------- 2013 2014

Remarks

1 Current Ratio Current Assets/ Current Liability

2.20 2.02 It is more than Idle Current ratio i.e. 1.33

2 Quick Ratio Quick Assets/ Current Liability

1.03 0.95 In 2014 It is lower than Idle quick ratio i.e. 1.10

3 Net Working Capital to sales Ratio

Working Capital/ Sales

0.27 0.25 Working Capital increase by 6%,Sales Increase by 16%

Internal Audit Department 13

S. No

Name Formula -------Ratio---------- 2013 2014

Remarks

1 Long Term debt to Assets Ratio

Long Term Debt/ Total Assets

0.13 0.09 Company paid 20%

Long Term borrowing

in 2013-14

2 Equity Multiplier

Total Assets/ Shareholders’ Equity

1.72 1.62 Reasonable change

Financial Ratios

Ratios Analysis

Internal Audit Department 14

S. No

Name Formula -------Ratio------ 2013 2014

Remarks

1 Earning per Share

Net Income Available to Shareholder/No. of Equity Share

26.27 37.83 EPS Increase By 45% in 2013-14

2 Dividend per Share

Dividend Paid to Share holder/No. of Equity Share

4 5 Increase in dividend per share by 20%

3 Dividend Payout Ratio

Dividend/Earning

0.15 0.13 Decrease due to less declaration of dividend in compare to Earnings

4 Price Earning Ratio

Market Price Per Share/Earning Per Share

19.60 20.83 Investor is ready to invest in company Rs. 20.83 in a expectation to earn Rs.1 from Company

Shareholder Ratios

Ratios Analysis

Peer Review

15Internal Audit Department

S. No. Company NameShare Price as

on 13/6/13Assets Sales Profit

1 Aurobindo Pharma 710 5618 5425 4962 Cadila Health 989 4517 3676 4993 Cipla 414 9833 8202 15074 Dr Reddy Labs 2438 9221 8434 12665 Glaxosmith Kline 2528 1951 2546 5026 Ipca Labs 837 2708 2778 3317 Lupin 987 5169 7123 12608 Sun Pharma 636 7765 2432 5179 Torrent Pharma 683 2061 2766 546

10 Wockhardt 614 1284 2471 623

Comparison of IPCA from its Competitors

Rank to IPCA

Stock Market

16Internal Audit Department

Share Price in 2013-14

Remarks:- Increase in price of share from Rs 530(as on 01/04/13) to Rs. 820 (as on 31/3/14) i.e. 55% in a one year

Internal Audit Department 17

Summary

Highlighted PointsS.

NoBase Observation

1 Foreign Exchange Translation Gain

It is increase by 135% in IV Quarter in comparison to last Year IV Quarter

2 Net Profit and Earning per share

Both are Increase by 81% in IV Quarter in comparison to last Year IV Quarter

3 Reserve and surplus R/S Increase by 26% In comparison to P.Y. 2012-13

4 Net Profit In 2013-14, 28% of total Profit earn in Last Quarter

5 Share Capital There is no increase in Share capital in year of 2013-14

6 Investor complaint It is decrease by 40% in comparison to last year,There is no investor complaint pending at the end of year

7 Bonus Share Basic and diluted EPS same hence there is no bonus share issued by company in year of 2013-14

8 Other Income Other Income increase by 15% In comparison to last year

18

Thank You

Internal Audit Department