WORKING CAPITAL ANALYSIS

INDUSTRY PROFILE

Biotechnology

Biotechnology is the application of scientific and engineering principles to the processing of

materials by biological agents to provide goods and services. From its inception, biotechnology has
maintained a close relationship with society. Although now most often associated with the
development of drugs, historically biotechnology has been principally associated with food, addressing
such issues as malnutrition and famine. The history of biotechnology begins with zymotechnology,
which commenced with a focus on brewing techniques for beer. By World War I, however,
zymotechnology would expand to tackle larger industrial issues, and the potential of industrial
fermentation gave rise to biotechnology. However, both the single-cell protein and gasohol projects
failed to progress due to varying issues including public resistance, a changing economic scene, and
shifts in political power.

Yet the formation of a new field, genetic engineering, would soon bring biotechnology to the
forefront of science in society, and the intimate relationship between the scientific community, the
public, and the government would ensue. These debates gained exposure in 1975 at the Asilomar
Conference, where Joshua Lederberg was the most outspoken supporter for this emerging field in
biotechnology. By as early as 1978, with the synthesis of synthetic human insulin, Lederberg's claims
would prove valid, and the biotechnology industry grew rapidly. Each new scientific advance became
a media event designed to capture public support, and by the 1980s, biotechnology grew into a
promising real industry. In 1988, only five proteins from genetically engineered cells had been
approved as drugs by the United States Food and Drug Administration (FDA), but this number would
skyrocket to over 125 by the end of the 1990s.

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The field of genetic engineering remains a heated topic of discussion in today's society with the
advent of gene therapy, research, cloning, and genetically modified food. While it seems only natural
nowadays to link pharmaceutical drugs as solutions to health and societal problems, this relationship
of biotechnology serving social needs began centuries ago.

Origin Of Biotechnology:

Biotechnology arose from the field of zymotechnology, which began as a search for a better
understanding of industrial fermentation, particularly beer. Beer was an industrial, and not just social,
commodity. In late 19th century Germany, brewing contributed as much to the gross national product
as steel, and taxes on alcohol proved to be significant sources of revenue to the government. In the
1860s, institutes and remunerative consultancies were dedicated to the technology of brewing. The
most famous was the private Carlsberg Institute, founded in 1875, which employed Emil Christian
Hansen, who pioneered the pure yeast process for the reliable production of consistent beer. Less well
known were private consultancies that advised the brewing industry. One of these, the Zymotechnic
Institute, was established in Chicago by the German-born chemist John Ewalds Siebel.

The heyday and expansion of zymotechnology came in World War I in response to industrial
needs to support the war. Max Delbruck grew yeast on an immense scale during the war to meet 60
percent of Germany's animal feed needs. Compounds of another fermentation product, lactic acid,
made up for a lack of hydraulic fluid, glycerol. On the Allied side the Russian chemist Chaim
Weizmann used starch to eliminate Britain's shortage of acetone, a key raw material in explosive, by
fermenting maize to acetone.

The industrial potential of fermentation was outgrowing its traditional home in brewing, and
"zymotechnology" soon gave way to "biotechnology."With food shortages spreading and resources
fading, some dreamed of a new industrial solution. The Hungarian Karl Ereky coined the word
"biotechnology" in Hungary during 1919 to describe a technology based on converting raw materials
into a more useful product. He built a slaughterhouse for a thousand pigs and also a fattening farm
with space for 50,000 pigs, raising over 100,000 pigs a year. The enterprise was enormous, becoming

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one of the largest and most profitable meat and fat operations in the world. In a book
entitled Biotechnology, Ereky further developed a theme that would be reiterated through the 20th
century: biotechnology could provide solutions to societal crises, such as food and energy shortages.
For Ereky, the term "biotechnology" indicated the process by which raw materials could be
biologically upgraded into socially useful products.

This catchword spread quickly after the First World War, as "biotechnology" entered German
dictionaries and was taken up abroad by business-hungry private consultancies as far away as the
United States. In Chicago, for example, the coming of prohibition at the end of World War I
encouraged biological industries to create opportunities for new fermentation products, in particular a
market for nonalcoholic drinks. Emil Siebel, the son of the founder of the Zymotechnic Institute, broke
away from his father's company to establish his own called the "Bureau of Biotechnology," which
specifically offered expertise in fermented nonalcoholic drinks.

The belief that the needs of an industrial society could be met by fermenting agricultural waste
was an important ingredient of the "chemurgic movement." Fermentation-based processes generated
products of ever-growing utility. In the 1940s, penicillin was the most dramatic. While it was
discovered in England, it was produced industrially in the U.S. using a deep fermentation process
originally developed in Peoria, Illinois. The enormous profits and the public expectations penicillin
engendered caused a radical shift in the standing of the pharmaceutical industry. Doctors used the
phrase "miracle drug", and the historian of its wartime use, David Adams, has suggested that to the
public penicillin.

Biotechnology and Industry:

With ancestral roots in industrial microbiology that date back centuries, the new biotechnology
industry grew rapidly beginning in the mid-1970s. Each new scientific advance became a media event
designed to capture investment confidence and public support. Although market expectations and
social benefits of new products were frequently overstated, many people were prepared to see genetic
engineering as the next great advance in technological progress. By the 1980s, biotechnology
characterized a nascent real industry, providing title for emerging trade organizations such as the
Biotechnology (BIO).

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The main focus of attention after insulin was the potential profit makers in the pharmaceutical
industry: human growth hormone and what promised to be a miraculous cure for viral
diseases, interferon. Cancer was a central target in the 1970s because increasingly the disease was
linked to viruses. By 1980, a new company, Biogen, had produced interferon through recombinant
DNA. The emergence of interferon and the possibility of curing cancer raised money in the
community for research and increased the enthusiasm of an otherwise uncertain and tentative society.
Moreover, to the 1970s plight of cancer was added AIDS in the 1980s, offering an enormous potential
market for a successful therapy, and more immediately, a market for diagnostic tests based on
monoclonal antibodies. By 1988, only five proteins from genetically engineered cells had been
approved as drugs by the United States Food and Drug Administration (FDA):
synthetic insulin, human growth hormone, hepatitis B vaccine, alpha-interferon, and tissue
plasminogen activator (TPA), for lyses of blood clots. By the end of the 1990s, however, 125 more
genetically engineered drugs would be approved. Ernst and Young reported that in 1998, 30% of the
U.S. soybean crop was expected to be from genetically engineered seeds. In 1998, about 30% of the
US cotton and corn crops were also expected to be products of genetic engineering. Genetic
engineering in biotechnology stimulated hopes for both therapeutic proteins, drugs and biological
organisms themselves, such as seeds, pesticides, engineered yeasts, and modified human cells for
treating genetic diseases. From the perspective of its commercial promoters, scientific breakthroughs,
industrial commitment, and official support were finally coming together, and biotechnology became a
normal part of business... Their message had finally become accepted and incorporated into the
policies of governments and industry.

Global Trends:

According to Burrell and Company, an industry investment bank, over $350 billion has been
invested in biotech since the emergence of the industry, and global revenues rose from $23 billion in
2000 to more than $50 billion in 2005. The greatest growth has been in Latin America but all regions
of the world have shown strong growth trends. By 2007 and into 2008, though, a– downturn in the
fortunes of biotech emerged, at least in the United Kingdom, as the result of declining investment in
the face of failure of biotech pipelines to deliver and a consequent downturn in return on investment.

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There has been little innovation in the traditional pharmaceutical industry over the past decade
and biopharmaceuticals are now achieving the fastest rates of growth against this background,
particularly in breast cancer treatment.

Biopharmaceuticals typically treat sub-sets of the total population with a disease whereas
traditional drugs are developed to treat the population as a whole. However, one of the great
difficulties with traditional drugs is the toxic side effects the incidence of which can be unpredictable
in individual patients.

Biotechnology Industry In India:

Introduction:

The Indian biotechnology sector is one of the fastest growing knowledge-based sectors in India
and is expected to play a key role in shaping India's rapidly developing economy. With numerous
comparative advantages in terms of research and development (R&D) facilities, knowledge, skills, and
cost effectiveness, the biotechnology industry in India has immense potential to emerge as a global key
play The Indian biotech industry registered 18.5 per cent growth in FY12; total industry size stood at
US$ 4.3 billion by the end of the financial year. The industry is expected to increase in size to US$
11.6 billion by 2017, driven by a range of factors including growing demand, intensive R&D activities
and strong Government initiatives.

This exceptional growth has been facilitated by the robust performance of all the sub-sectors of
the Indian biotechnology industry, namely, bio-pharmaceuticals, bio-services, agri-biotech, bio-
industrial, and bio-informatics. Bio-pharmaceuticals is the largest sub-sector of the industry, whereas
agri-biotech is the fastest growing. Out of the top 10 biotech companies in India (by revenue), six
specialize in bio-pharmaceuticals and four specialize in agri-biotech.

Market Size:

The bio-pharmaceutical sector accounted for the largest chunk of the biotech industry, with a
share of 62 per cent in total revenues in FY12. In the same year, bio-services and the bio-agri segments
followed the bio-pharmaceutical segment with shares of 18.3 per cent and 14.9 per cent, respectively.

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Growth was fastest in the bio-agri segment (23 per cent in FY12), followed by bio-pharma
(19.0 per cent) and bio-services (15.5 per cent). Domestic bio-services sector grew an astounding 102
per cent in FY12 to US$ 109.3 million. The domestic bio-pharma sector, which accounts for more than
61 per cent of the domestic biotech industry, registered a 26.6 per cent growth in FY12; in comparison,
the growth in domestic bio-informatics sector was 24 per cent. Biotech export revenue reached US$
2.1 billion in FY12, nearly half (48 per cent) of total industry revenue. Over the years, export revenue
has grown considerably from US$ 0.4 billion in FY05 to US 2.1 billion in FY12 (a CAGR of 25.6 per
cent)
Investments:

Investments, along with outsourcing activities and exports, are key drivers for growth in the
biotech sector. Foreign direct investment (FDI) up to 100 per cent is permitted through the automatic
route for manufacturers of drugs and pharmaceuticals. According to data released by the Department
of Industrial Policy and Promotion (DIPP), the drugs and pharmaceuticals sector has attracted FDI
worth Rs 45,980.03 crore (US$ 8.47 billion) between April 2000 and December 2012.

Some of the major investments in the sector are as follows:

Biocon has entered into an agreement with Mylan for the global development and
commercialization of Biocon's generic insulin analog products (long lasting insulins), which has a
global addressable market of US$ 11.5 billion/Biomax Fuels has formed a 50:50 joint venture (JV)
with the Jeddah-based Middle East Environment Protection Co. to set up the first bio-fuel plant in
Saudi Arabia/Eli Lilly and Strides Arco lab have inked a pact to increase delivery of cancer medicines
in emerging markets.

Agile Specialties, the specialties division of Strides Arco lab, will make cancer medicines and
Eli Lilly will market them in emerging geographies-India's biotechnology company Biocon has
entered into an agreement with the US-based Bristol-Myers Squibb (BMS) to further develop its IN-
105, an oral insulin product/VayuGrid has signed a memorandum of understanding (MoU) to create a
biofuel cluster for its VayuSap—high-yield Pongamia—in Ethiopia.

The cluster will create US$ 2.5 million biofuel investment opportunity/GE Capital has picked
up 7.69 per cent stake in Syngene, a subsidiary of Biocon, for Rs 125 crore (US$ 23.03 million).
Syngene, a contract research organisation, is into drug discovery and development services.
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COMPANY PROFILE

The company has its roots in the herbal medicines. It was in 1905 Mr. Chenna Reddy (great
grandfather of the present MD B.Sudhakar Reddy) was a legendary figure who used to treat paralysis
patients successfully. He shared his knowledge to a number of people. Today many village people in
this area know how to treat paralysis. The treatment cost is less than 1000/-. Treatment for jaundice
and for women fertility was also a tradition followed by generation in the family.

RathnaBioteck is backed by Rathna Packaging India Pvt. Ltd. at Hosur established in 1999
by Mr. B.G. Reddy B.E (Honours) and Mr. B. Sudhakar Reddy B.Tech., Polymer. Rathna
Packaging India Pvt. Ltd. is one of the leading packaging companies in south India with more than 125
Cr. of turnover / year. Its products are exported to a number of countries across the globe.

1999-2003:
Mrs. B. Rathnareddy Director of the company established an herbal park with over 400
medicineplans.
2006:
Herbal extraction plant to separate the active ingredients was started with 2 nos 3KL extractors.
2010:
License with GMP Certification obtained to make over 23 nos Ayurvedic drugs.
2011:
Medicines launched in AP and Karnataka. Modern lab with Analytical, Microbiology
department established HPLC & other sophisticated instruments installed. The Manufacturing
activities are brought directly under qualified Ayurvedic doctors, MD in Ayurveda.

Vision:
To reach the markets AP, Karnataka, T.N, Kerala, and Odissa in the year 2012 & to penetrate
actively complete Indian market by 2013.
"To provide high quality, high efficacy R&D based 100% natural products for curing ailments
of the modern world all around the globe in a socially responsible manner."

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Mission:

Establish Rathnabioteck as a science-based, problem-solving, head-to-heel brand, harnessed

from nature's wealth and characterized by trust and healthy lives.
Develop markets India wide with an in-depth and long-term approach, maintaining at each step the
highest ethical standards.

Respect, collaborate with and utilize the talents of each member of the Rathnabioteck family
and the local communities where Rathnabioteck products are developed and/or consumed, to drive
our seed-to-shelf policy and to rigorously adopt eco-friendly practices Ensure that each Rathnabioteck
employee strongly backs the Rathnabioteck promise to exceed the expectations of the consumer, each
time and every time. Nothing less is acceptable.

"To become the #1 Health & Wellness Company in the world based on the highest number of
patients, highest level of customer satisfaction and most satisfied, motivated, happy and successful
Employee Family."

Manufacturing Facilities:

The factory is setup in 6 Acres of land with a built up area of over 15000 sft. A modern storage
yard of 20000 sift is being built to store 1000 Tons of various herbs used by the company.

Extraction Plant:

Phyto extraction and separation is done in the extraction process house with a built in capacity
of 3 Ton of raw herbs/day.

Pharmacy:

A well equipped pharma manufacturing plant to manufacturer, Capsules, Liniments, and

Syrups, creams / ointments & Suspension is in position with modern facilities.

Laboratory:

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Microbiology lab, Analytical lab & HPLC instrument lab are well equipped and staffed by Post
Graduates in science.

Quality:

With GMP Certification in hand the company is gearing up to train people in the
implementation of HAACP and WHOGMP.

Personnel:

The factory is under the Direct supervision of an Ayurvedic doctor (MD in Ayurveda),
Analytical, Micro lab of pharma processing are headed by PG Qualified persons.

Products:

Many of our products are poly herbal formulation without any side effects. They do not have
any steroids or harmful chemicals. They are very well accepted by the doctors.

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Organizational Structure:

MANAGING DIRECTOR

GENARAL MANAGER

R & D Manager Finance Manager HR Manager

Production & Marketing

Operation Manager Manager

DIRECTORS OF THE COMPANY:

1. Mrs. B. Rathna Reddy. Managing Director.

2. Mr. B.G. Reddy. B.E. (Hons) M.E. PGDM. Executive Director.
3. Mr. B. Sudhakar. B.Tech (Polymer) Director Marketing.
4. Mrs. B. Geetha. Director.

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INTRODUCTION

FINANCE:
Finance may be defined as the provision of money at the time when it is required. Finance
refers to the management of flows of money through an organization.
DEFINITION:
“Finance may be defined as the provision of money at the time it is wanted”.
According to F.W. Paish
MEANING OF FINANCE:
In our present day economy “FINANCE” is defined as the provision of money at the time
when it is required. Every enterprise, whether big, medium of small needs finance to carry on its
operations and to achieve its targets.
“Finance” is the life blood and nerve system of any business organization. Just as circulation of
blood, is necessary in the human body to maintain life. Finance is necessary in the business
organization for smooth running of the business. Since finance to purchase of machinery and raw
materials, to pay salaries and wages also for day-to-day expenses.
Nature of finance:
 Financial needs have to be identified before any plan can be formulated.
 Finance requires a general knowledge of the environment in which it is needed.
 Finance is a specialised operation, it is an inseparable part of business administration.
 It includes maney, banking and credit of different types and classes.
 Finance is a part of nervous system of a business.
 The finance manager is therefore, concerned with all financial activities of planning, raising,
allocating and controlling the funds.
 Finance manager handle some financial problems i.e., incorporation, liquidation,
reorganisation.

CLASSIFICATION OF FINANCE:
There are two types of the classification of finance
 Public finance
 Private finance

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PUBLIC FINANCE:
Public finance deals with the requirements, receipts and disbursements of funds in the
 Government institutions
 States
 Local self governments
 Central governments

PRIVATE FINANCE:
Private finance is concerned with requirements and receipts of funds in the case of
 Personal finance
 Business finance
A. Sole-proprietary finance
B. Partnership firms finance
C. Company of corporation finance
 Finance of non-profit organizations.

IMPORTANCE OF FINANCE:
 Ensure that there are adequate funds available to acquire the resources needed to help the
organization to achieve its objectives.
 Ensure costs are controlled.
 Ensure adequate cash flows.
 Establish and control profitability levels. One of the major roles of the finance department is to
identify appropriate financial information prior to communicating this information to managers
and decisions makers in order that they may make informed judgments and decisions.

FINANCIAL MANAGEMENT:
Financial management involved managerial activities concerned with the procurement and
utilization of funds for business purpose the finance functions does with procurement of money taking
into consideration of today as well as future needs. Finance is required to purchase of machinery raw
material to pay salaries and wages also day to day expenses.

DEFINITION OF FINANCIAL MANAGEMENT:

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Financial management refers to the efficient and effective management of money (funds) in
such manner as to accomplish the objectives of the organization. It is the specialized function directly
associated with the top management.
......... James Van Horne.

OBJECTIVIES OF FINANCIAL MANAGEMENT:

 To ensure regular and adequate supply of funds to the concern.
 To ensure adequate returns to the shareholders this will depend upon the earning capacity,
market price of the share, expectations of the shareholders.
 To ensure safety on investment, i.e., funds should be invested in safe ventures so that adequate
rate of return can be achieved.

FUNCTIONS OF FINANCIAL MANAGEMENT:

 Estimation of capital requirement.
 Determination of capital composition.
 Choice of sources of funds.
 Investment of funds.
 Financial controls
 Management of cash.

IMPORTANCE OF FINANCIAL MANAGEMENT:

 Helps setting clear goal.
 Helps efficient utilization of resources.
 Helps deciding sources of financing.

 Helps making dividend decision.

RESEAECH METHODOLOGY

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 RESEARCH
Research is the process of systematic and in depth study for any particular topic subject area
of investigation, collection, presentation and interpretation of data. Research is also a
systematic search for a answer to question or a solution to a problem is called research.
 Research design
The term research design is defined as the way and methods that are followed in analysing the
data available. The study had conducted based upon the financial statements/ annual report of
the firm which are published annually by the company.
 Sources of data
There are two sources of data collection .They are:
 Primary data: Primary data are those which are collected fresh and for first time, and thus
happened to be original in character.
 Secondary data: The secondary data are already present one and it is secondary hand
information.
 The present study purely depends on secondary data only .The various sources of secondary
data are books, journals, magazines, newspapers and annual reports of the company etc.

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