1

SUMMER TRAINING PROJECT REPORT

ON
“FINANCIAL AND RATIO ANALYSIS OF ANPHAR ORGANICS
PRIVATE LIMITED.”

FOR THE PARTIAL FULLFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF
MASTERS IN BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF: UNDER THE SUPERVISION OF:

Ms. Nishu Jain Mr. Jagdish Sharma

SUBMITTED BY:
Aviral Tripathi
MBA 2015 – 16

Babu Banarsi Das University,

Sector1, Dr. Akhilesh Das Nagar, Faizabad Road, Lucknow (UP), India
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ACKNOLEDGEMENT

The project has been prepared as a part of Summer Training Project Report required during the
completion of MBA degree at BABU BANARSI DAS UNIVERSITY, LUCKNOW.

I would like to thank Mr. Shailendra Gupta and Mr. Jagdish Sharma for their
esteemed guidance and support during Summer Internship Programme.

I would specially like to thanks our Dean Dr. Susheel Pandey, our facility
guide Ms. Nishu Jain, without those guidance and support this project would have been a distant
dream.

Aviral Tripathi
MBA 3rd semester
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DECLARATION

I, Aviral Tripathi, hereby declare that the research report project on “FINANCIAL AND RATIO
ANALYSIS OF ANPHAR ORGANICS PRIVATE LIMITED” in partial fulfillment of the
requirement for the degree of Masters in Business Administration from Babu Banarsi Das
University, Lucknow, is original piece of work by me and that the study is authentic to the best of
my knowledge and research done by me during the Summer Training Programme.
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PREFACE

As a part of my M.B.A. (Master in Business Administration) program I was asked to undergo 6

weeks summer internship programme in any organization, so as to give exposure to practical
management and to get familiar with the various activities in the organization.

I got an opportunity to undergo my Summer Internship Programme in the Anphar Organics Private
Limited (Jammu); it is a unit of one of the leading WHO-GMP Certified pharmaceutical
formulation manufacturers in India The Madras Pharmaceuticals (Chennai). In Anphar Organics
I was allowed to work on interpretation of their financial statements.

Research gives an ample opportunity to apply once academic knowledge in the field of
substantiated by ones inactive and lesion capabilities.

The basic purpose of the project is to present the subject matter in simple and easily understandable
way to assist through understanding about the actual scenario of the financial structure of small
scale pharmaceutical industries in India and their importance in the Economy of the country.

For analysis and interpretation, financial data has been taken from financial reports of the concern
and performance is evaluated by applying accounting tools.
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TABLE OF CONTENTS

 ACKNOWLEDGEMENT
 DECLARATION
 PREFACE

SERIAL PAGE
NO. TOPIC NO.

1 Executive Summary 9-14

2 Introduction of the organization 15-36

3 Literature Review 37-47

4 Research Methodology 48-56

5 Data analysis and interpretation 57-80

6 Findings 81-83

7 Conclusion 84-86

8 Suggestions 87-92

9 Limitations 93-94

10 Overall Experience 95-96

11 Bibliography 97-98

12 Appendix 99-103
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LIST OF TABLES AND GRAPHS

Serial no. Topic Page No.

1 Products Profile 25-28

2 Horizontal Analysis of Balance Sheet 58-59

3 Horizontal Analysis of Profit and Loss Statement 61-63

4 Current Ratio (Table 1.0) and (Graph 1.0) 69 & 70

5 Liquid Ratio (Table 2.0) and (Graph 2.0) 72

6 Quick Ratio (Table 3.0) and (Graph 3.0) 74

7 Debt Equity Ratio (Table 4.0) and (Graph 4.0) 76 & 77

8 Net Profit Ratio (Table 5.0) and (Graph 5.0) 78 & 79

9 Gross Profit Ratio (Table 6.0) and (Graph 6.0) 80

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EXECUTIVE
SUMMARY
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INTRODUCTION OF THE STUDY

Small Scale Industries are the life blood of Indian Economy and if we talk about Pharmaceutical
Industries they are one of the major industries in Indian. Growth of these companies are very
important for our country`s economy. So, the study is made to understand the basic financial
structure of a small scale pharmaceutical company and interpret about them on the basis of an
analysis.

Analysis of company provides an interesting outlook on a company and its success in comparison
to its industry competitors. While these types of analysis provide a quantitative methodology of
analyzing an organization, it is important to remember that qualitative factors also play a role in
understanding the organization’s well-being.

Assessing both the quantitative and qualitative factors will provide the tools necessary to conduct
an unbiased financial analysis of an organization. Capital-budgeting decisions, corporate financial
policies and informed selections of investments are all products of financial analysis. Financial
statement analysis includes the activity of providing inputs to the portfolio management process
and it is used to know whether management is exercising its best Endeavour to maximize
customer’s interest.

In the study we will study Balance Sheets and Profit and loss statement of the company and
calculate the differences and percentage on the basis of a base year, which will help us understand
the growth made by the company in comparison with previous year. It thus provide us with the
growth rate and a foundation for capital structure and company estimates of the future.
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RESEARCH DESIGN

Research design is a framework or blueprint of conducting the research project. It details the
procedure necessary for obtaining the information needed to structure and/or to solve the research
problem.

In my research report the type of research which is performed is Analytical research.

Analytical Research –

Analytical research is a specific type of research that involves critical thinking skills and the
evaluation of facts and information relative to the research being conducted. A variety of people
including students, doctors and psychologists use analytical research during studies to find the
most relevant information. From analytical research, a person finds out critical details to add new
ideas to the material being produced.

Source of Data:

The study is based on Primary data and Secondary data relating to the study was
obtained from the annual reports of the company and by interviewing company staff.

Period of Study:

The study covers a period of 2 years covering a period from 2014-2015 and 2015-
2016. It is also decided by taking into consideration of the availability of data.
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Sample of the Study:

The researcher have selected only 1 company irrespective of their size to see to what
extent they are profitable financially strength and liquid position. The selected company is
Anphar Organics Private Limited, Jammu
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FINDINGS

 During Study we found that Financial Analysis Are the most important for any type
of decision making towards investments of the company.

 Financial and Ratio Analysis are very important for management to make their
budgets.

 Forecasting of future sales are always done on the basis of past sales and increasing
trends of the product.

 The future growth and position of the company are forecasted on the basis of sales
and technical change adaptation power of the company.

 The liquidity of the company is depended upon the profitability of the company.
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CONCLUSION

 Very efficient fixed asset utilization.

 Extremely strong financial position

 Investment higher than the net worth, which means operations are being funded by
Current liabilities & some loans.

 We found Moderate negative relationship between the measures the liquidity with
corporate profitability

 There is significance relationship between the Liquidity & Profitability of Anphar

Organics
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INTRODUCTION OF
THE
ORGANISATION
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ANPHAR ORGANICS PRIVATE LIMITED

(A unit of Madras Pharmaceuticals, Chennai)

On 15th January 1987 Mr. Anil Gupta and Mr. Anand Singh Rattandeep opened a laboratory for
pharmaceutical formulation with the name of Anphar Laboratories Private Limited with a promise
to provide best quality material at a cheaper price to the pharmaceutical industry. Later they
decided to open their own manufacturing unit of pharmaceutical formulations with the name of
Anphar Organics Private Limited.

Anphar Organics Private Limited is a contract manufacturer of bulk medicines and

pharmaceutical formulations. It was incorporated on 29 November 1994. It is classified as Non-
government Company and is registered at Registrar of Companies, Jammu. Its authorized share
capital is Rs. 35,000,000 and its paid up capital is Rs. 33,878,900.

It was registered under company’s act, 1956 to carry on the business with a main
objective of manufacturing, trading, dealing, warehousing, importing and exporting of
pharmaceuticals, chemicals, insecticides, drug intermediates, basic drugs and all types of
formulations including allied products. The former directors of the company were Mr. Anil Gupta
and Mr. Anand Singh Rattandeep.

Later on in the year 2012 it was undertaken by one of the leading pharmaceutical
formulation company of India Madras Pharmaceuticals, Chennai.
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MADRAS PHARMACEUTICALS
Chennai

The Madras Pharmaceuticals is -

One of the leading WHO-GMP Certified pharmaceutical formulation manufacturers in

India. Madras Pharmaceuticals Started its manufacturing activity in 1979 with the aim of

manufacturing and marketing quality pharmaceutical formulations at affordable prices.

They Undertake contract manufacturing / activity for various leading pharmaceutical

companies in India.

Their Vision is to connect our customers with our dedicated manufacturing

facilities and provide our products that always meet the expectation of our customer .

Projected turnover of Madras Pharmaceuticals was of 45.00 million USD for the year
ended March ‘2010.

Madras Pharmaceuticals is having 6 Manufacturing facilities (all approved by

WHO GMP) located in Chennai, Pondicherry and Jammu. Which consists of 3,00,000
square feet of built up area which is dedicated to meet the manufacturing requirements of
various dosage forms. Each facility is well equipped to meet all its manufacturing and
analytical requirements
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They are having in house Research & Development Centre to develop products
as per customer requirements and to take care of all documentation requirements. And their
two Associate Companies which carry on their manufacturing functions of various
products.

PRODUCTS OFFERED

1. Tablets, Capsules, Dry Powder for Suspensions, Liquids, Ointments, Gels and Dry
Powder Inhalers
2. Products manufactured under most of the Therapeutic categories, specialized being
Antibiotics, Antifungal, Antidiabetics, Antihypertensive, Antiulcer, NSAIDs & Topical
applications
3. Improved drug delivery systems like Sustained Release, Instant Release, Bi-
Layered, Tri-Layered, Tablet in Tablet, Mouth Dissolving , Tablet in Capsules, Colored
pellets etc.
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MANUFACTURING FACILITY

 Situated at about 15 km’s from Chennai city

 Consists of 1,35,000 square feet of built up area
 Also, houses Madras Research and Analytical Laboratories (Maral), sister concern
and quality control arm of our company

PRODUCTION CAPACITY: (IN NUMBERS)

 Tablets -- 2.75 billion per annum

 Capsules – 1 billion per annum
 Ointments / Cream / Gels -- 15 million per annum
 Liquid Syrups / Suspensions -- 50 million per annum
 Dry Powder for Suspensions – 5 million per annum
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MANUFACTURING UNITS OF
MADRAS PHARMACEUTICALS

Name of the unit Location

 Anphar Organics Private Limited Jammu

 Accent Pharmaceuticals Private Limited Jammu
 Accent Pharmaceuticals Private Limited Pondicherry
 Madras Pharmaceuticals Private Limited Chennai
 Tristar Formulations Private Limited Pondicherry
 MARAL Labs Chennai

ASSOCIATE COMPANIES OF

MADRAS PHARMACEUTICALS

Name of the unit Location

 Softget Healthcare Private Limited Pondicherry

 Steril Gene Life Science Private Limited Chennai
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COMPANY PROFILE

Company Name: ANPHAR ORGANICS PRIVATE LIMITED

Form: Pharmaceuticals Formulation

SIDCO, EPIP, Kartholi, Bari Brahmana, Jammu, J&K, Pin-

Location:
181133

Company Status: Active

Registrar of Company: RoC-Jammu

Registration Number: 1409

Corporate Identification Number: U24231JK1994PTC001409

Company Category: Company limited by Shares

Company Sub Category: Non-govt company

Class of Company: Private

Date of Incorporation: 29 November 1994

Age of Company: 21 years, 8 month, 10 days

M/s Madras Pharmaceuticals Private Limited, New No. 15,

Head Office:
Gopalakrishna Road, T. Nagar, Chennai

Size: Small Scale Industry

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Annual General Meeting: Last held on 30th September 2015

i) HDFC Bank, Bari Brahmana, Jammu

Bankers:
ii) Punjab And Sind Bank, Gandhi Nagar, Jammu
Office Timing: 9:00 AM to 5:30 PM
Premises: 50,000 Square Feet (approx.)
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VISION, MOTTO AND QUALITY POLICY

MOTTO:

The main motto of Anphar Organics is to provide all the possible formulation medicines
to their customers at the cheapest cost possible and best in quality. They also focus on making their
customers satisfied by delivering their order on time with no defect with the help of best quality
of packing. Their focus is on to develop more and more customers in India and be a brand name
in the field of contract manufacturing of Pharmaceutical formulations.

VISION:

Their vision is to become a brand name in the field of Contract Manufacturing of

Pharmaceutical Formulations in India and build overseas customers all over the world. They also
target towards opening their manufacturing units overseas to meet the demands of their overseas
customers.

QUALITY POLICY:

The motivated and devoted work force of Anphar Organics is dedicated towards
providing excellent quality products to their customers. Their team doesn`t compromise in quality
of the product for profit motive. Anphar Organics provide the best quality products that’s why they
are one of the leading name in pharmaceutical formulations.
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BOARD OF DIRECTORS OF
MADRAS PHARMACEUTICALS

NAME POSITION

ALAGAPPAN DIRECTOR

KRISHNAMURTHY BALAKUMAR DIRECTOR

KANNAPPAN NAGAPPAN DIRECTOR

SIVASAMY NADAR MANOHAR DIRECTOR

SULAIMAN ABDULHAI MOHAMMED MANAGING DIRECTOR

BOARD OF DIRECTORS OF
ANPHAR ORGANICS PRIVATE LIMITED

NAME POSITION

OGRA SELVANATHAN KUMARAN DIRECTOR

SHAILENDER GUPTA WHOLE TIME DIRECTOR

SULAIMAN ABDULHAI MOHAMMED MANAGING DIRECTOR

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PRODUCTS

Category Form Generic Name

Alcohol Antagonist Capsule Seleno methionine

Anti-Inflammatory
Capsule Tramadol
/analgesic/ antipyretic

Anti-Inflammatory
Suspension Acetaminophen + Dexibuprofen
/analgesic/ antipyretic

Anti-Inflammatory
Suspension Acetaminophen
/analgesic/ antipyretic

Ant Llipedimic
Tablet ATORVASATIN

Ant Llipedimic
Tablet Atorvastatin + Ezetimbe

Ant Llipedimic
Tablet Atorvastatin + Fenofibrate

Anti Emetic
Capsule Domperidone SR CAPSULES

Anti Emetic
Tablet Mosapride

Anti Emetic
Syrup Granisetron
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Anti Inflammatory
BLT Aceclofenac 200mg
/analgesic/ antipyretic

Topical Anti-Infective Ointment Povidone + iodine

Topical Anti-Infective Ointment Silver sulfadioxide + Povidone iodine

Topical Anti-
Ointment Diclofenac gel
Inflammatory

Topical Anti-
Ointment Diclofenac diethylamine gel
Inflammatory

Topical Anti-
Ointment Diclofenac gel
Inflammatory

Topical Anti- Diclofenac, Linoleic Acid, Methyl Salicylate &

OINTMENT
Inflammatory Capsaicin Gel

ACECLOFENAC, OLEUM LINI, METHYL

Topical Rubificient Ointment SALICYLATE, CAPSAICIN, MENTHOL AND

BENZYL ALOCOHOL

Topical steroid
Ointment Fluticasone Dipropionate

Ulcer
Tablet FAMOTIDINE TABLET USP 20

Ulcer
Tablet FAMOTIDINE TABLET USP 40

Ulcer
Tablet Rabeprazole + Domperidone
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Ulcer
Tablet Rabeprazole

Ulcer
Tablet RABEPRAZOLE SODIUM TABLET

Urology
Tablet Torsemide+spironolactone

V.D
Tablet Secnidazole + Fluconazole + Azithromycine

Vertigo
Tablet Betahistine Dihydrochloride Tablets

Vitamin supplement Tablet METHYLCOBALAMIN

THIAMINE

Vitamin supplement capsule MONONITRATE+RIBOFLAVINE+PYRIDOXINE

HYDROCHLORIDE + LAB

Vitamin supplement Capsule Multivitamin

Vitamin supplement Capsule ALA + MCBM + FA + Vit B6 + benfothiamine

Vitamin supplement Capsule MCBM + ALA + Biotin + FA

Vitamin supplement Capsule Biotin + Vit E + Vit C

Vitamin supplement Syrup Mecobalamin + FA

Vitamin supplement Tablet Biotin + Vitamins

Vitamin supplement Tablet Folic acid

Vitamin supplement Capsule Benfo+GLA+MCBM+ALA

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Vitamin supplement Capsule Multivitamin

Vitamin supplement Tablet Mecobalamin + Pyridoxine HCl

Vitamin supplement Tablet Mecobalamin + ALA + FA + B6

Vitamin supplement Capsule Mecobalamin + ALA + FA + B6

Vitamin supplement Tablet Mecobalamin + Pyridoxine HCl

L-CYSTINE , L-METHIONINE AND

Vitamin supplement Capsule
MULTIVITAMINES CAPSULE

Vitamin supplement Capsule MCBM+ALA+Benfo+GLA

Vitamin supplement Syrup Multivitamin

Vitamin supplement Tablet Biotin + Vitamins

Vitamin supplement Tablet Folic Acid Tablets IP 5mg

Mecobalamin, Alphalipoic Acid and Folic Acid

Vitamin supplement Tablet
Tablets

Vitamin supplement Tablet Antioxidant, Multivitamins & Multiminerals Tablets

And many more products……..

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LIST OF OUR
CUSTOMERS

 Alkem Laboratories
 Aristo Pharmaceuticals
 Biocon India Limited
 Hetero Drugs
 Lupin Laboratories
 Macleoids
 Mankind Pharma
 Micro Labs
 Piramal India Limited
 Ranbaxy Laboratories
 Systopic Laboratories
 Unichem Laboratories
 Zydus Cadila

And many more.....

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LIST OF OUR
EXPORTS

 Benin
 Bolivia
 Cambodia
 Costa Rica
 Ghana
 Gambia
 Kenya
 Lebanon
 Malawi
 Malaysia
 Myanmar
 Namibia
 Nigeria
 Peru
 Philippines
 Sri Lanka
 Ukraine
 Uganda
 Vietnam
 Zambia
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LIST OF COMPETITORS OF
ANPHAR ORGANICS

 FIN OILS CHEMICALS PRIVATE LIMITED

 GRAVITY BITUMEN SOLUTIONS PRIVATE LIMITED

 SIDDANTH ORGANICS PRIVATE LIMITED

 TAWI FORMULATIONS PRIVATE LIMITED

 TBA OSNAR CHEMICAL PRIVATE LIMITED

 TRUEVET ANIMAL NUTRITION PRIVATE LIMITED

ETC...
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OBJECTIVE OF THE COMPANY

 To carry on any other business, whether manufacturing or otherwise which may seem to
the company capable of being conveniently carry on.

 To carry on business of manufacturers, traders, dealers, warehouses, importers and

exporters of pharmaceuticals, chemicals, insecticides, drug intermediates, basic drugs and
all type of formulation including allied products.

 To expand the companies activities by opening branches and/or by appointing agents in

India and/any foreign country.

 To start agencies, shops in different parts of India and foreign country for the sale and
distribution of products.

 To provide the best quality product to their customers so as to win their trust and make
themselves a brand name in pharmaceutical formulations.

 To acquire other similar firms which are dealing in same type of products to grow their
manufacturing capacities.

 To appoint large number of agents, dealers, distributors, retailer with motive to easy flow
of sales channel and provide working opportunities with Anphar Organics.

 To provide welfare of the employees or ex-employees of the company and their families,
dependents either by grant of money, pension, allowance or in any other manner
whatsoever.

 To provide their products to customers at the best quality possible at the cheapest rates.
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SWOT ANALYSIS

STRENGTH:

 Able for large capacity of production to meet the demands of the customers at any time.

 Latest tools and equipment technologies available to produce every type of pharmaceutical
formulations.

 Large premises of company helps in cost saving in context to storage of produced goods.

 Highly skilled labors for manufacturing of products effectively and efficiently to provide
best quality products at cheaper rates.

WEAKNESS:

 Cheap prices of products hits the profitability structure and growth structure of the
company.

 Presence of more unorganized players versus the organized ones, resulting in an

increasingly competitive environment.

 Poor all-round infrastructure as compare to other large scale industries is a major challenge.
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 Insufficient availability of resources in the nearby market leads to increase in cost of the
products.

OPPORTUNITIES:

 Global demand for medicines are rising day by day.

 Availability of Public – Private Partnerships for strengthening infrastructure of the

company.

 India, a potentially preferred global outsourcing hub for pharmaceutical formulations due
to low cost of skilled labors.

 Opening of agencies and appointing of more skilled employees to increase sales and market
value of the firm.

 Larger demand for quality diagnostic services.

 Increased penetration in the non - metro markets.

THREATS:

 Wage inflation.

 Government Expanding the Umbrella of the Drug Price Control Order (DPCO).
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 Other low-cost countries such as China and Israel affecting outsourcing demand for Indian
pharmaceutical products.

 Entry of Foreign companies with well-equipped technology based products into Indian
markets.
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ORGANIZATIONS STRUCTURE OF
DEPARTMENTS

MANAGING
DIRECTOR

DIRECTOR
DIRECTOR
OF FINANCE

MANAGER FINANCE
MANAGER
SALES & MANAGER
HR & ADMIN
OPERATIONS

SENIOR
PURCHASE SALES MAINTENANCE SENIOR
EXECUTIVE
EXECUTIVE EXECUTIVE INCHARGE EXECUTIVE
HR

EXECUTIVE PURCHASE ACCOUNTS

OFFICER HR OFFICER OFFICER

ACCONTANT
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LITERATURE
REVIEW
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Management of funds is a critical aspect of financial management. Management of funds acts as

the foremost concern whether it is in a business undertaking or in an education institution.
Financial management, which is simply meant dealing with management of money matters.

Financial management is that managerial activity which is concerned with the planning &
controlling of the firm financial resources.

All the other departments of the organization strongly depend upon the finance department
to carry on their departmental activity efficiently. Hence it is the responsibility of the finance
functions with proper care, adequate financial availability in time in the organization would lead
to organization success & the failure manager finance will lead to in efficiency.

Financial management was considered a branch of knowledge with focus on the

procurement of funds. Instruments of financing, formation, merger & restricting of firms, legal &
institutional frame work invaded therein occupied the prime place in this traditional approach.
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ORGANIZATION STRUCTURE OF
FINANCE DEPARTMENT

MANAGING
DIRECTOR

DIRECTOR OF
FINANCE

FINANCE
MANAGER

SENIOR
EXECUTIVE

ACCOUNTS
OFFICER

ACCONTANT
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OBJECTIVE OF FINANCIAL MANAGEMENT

Efficient financial management requires the existence of some objectives, which are
as follows:

 Profit maximization:

The objective of financial management is the same as the objective of a company which is to earn
profit. But profit maximization alone cannot be the sole objective of a company. It is a limited
objective. If profits are given undue important then problems may arise as discussed below:

 The term profit is vague & it involves much more contradictions.

 Profit maximization must be attempted with a realization of risks involved. A positive
relationship exists between risk & profits. So both risk & profit objectives should be
balanced.
 Profit maximization fails to take into account the time pattern of returns.
 Profit maximization does not take into account the social consideration.

 Wealth maximization:

It is commonly understood that the objective of a firm is to maximize value of a firm is represented
by the market price of the company‘s stock. The market price of a firm‘s stock represents the
assessment of all market particular firms. It takes into account present & prospective future
earnings per share, the timing & risk of these earnings, the dividend policy of the firm & many
other factors that bear upon the market price of the stock. Market price acts as the performance
index or report card of the firm‘s progress & potential.
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 PROCESS:

In Financial Management, process following points is considered:

 Financial Analysis
 Financial Decision-Making
 Financial Planning
 Financial Control
Finance department is that managerial activity concerned with the planning and
controlling of the firm‘s financial resources. Among all the 5Ms, i.e. man, money, machine,
material, and market, money plays a vital role in the organization. Finance is the lifeblood
for the success of an organization. For the organization to grow and develop on an even
basis, availability of finance on adequate basis is the prime requirement.

 FINANCE FUNCTION:

The financial management involves critical decisions on which the very survival of the
organization depends. The main financial decisions are as follows:

 Investment Decision
 Financing Decision
 Dividend Decision

Financial decisions are thus very crucial and important decisions for the firm.
The main function of finance department is to tackle the day-to-day financial requirement
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and other short term and long-term expenses, which an organization might quite often
incur.
All the other departments of the organization strongly depend upon the
finance department to carry on their departmental activity efficiently. Hence, it is the
responsibility of the finance manager to manage the finance function with proper care.
Timely availability of finance in the organization would lead to organizational success and
the failure to do accurately manage finance will lead to inefficiency.

 IMPORTANCE:

Proper finance is the real key to the success of any business enterprise. Without proper finance,
a business can neither survive nor expand and modernize. It is the finance, which works like a
lubricant, which keeps the organization dynamics running smoothly and efficiently. The
following are the points, which highlight the importance of finance:
 Finance for business promotion
 Finance management for optimum use of the firm
 Useful in decision-making
 Determinant of business success
 Measurement of performance
 Basis of planning, co-operation and control
 Useful to shareholders and investors

 SOURCE OF CAPITAL:

Source of Capital of Anphar Organics are:

 Sales of their products are the major source of finance for Anphar Organics Private
Limited.
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 Fixed deposits in bank like HDFC, Punjab and Sind Bank, etc.

 Share capital of Anphar Organics, which is not listed in market because it is not for public.
It is only for the members of firm.

 ACCOUNTING POLICIES:

 METHOD OF ACCOUNTING:

1) The firm follows Indian Accounting Standards in the preparation of accounts.

2) The financial statements are prepared on the historical cost convention and in
accordance with the generally accepted accounting principles.

 FIXED ASSETS:

Fixed assets are valued at cost. The cost of assets comprises purchase price and any directly
attributable cost in bringing the assets to its present condition or intended use.
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 INVENTORIES:

1) Raw materials, packing materials, semi packed goods and goods in transit are valued
at cost on FIFO basis.

2) Stores and Spares are valued at cost on FIFO basis.

3) Excise duty is applicable on finished goods stock has been included in the valuation
of finished goods.

 INVESTMENTS:

Investments are primarily meant to be held over a long term period as such are stated at
cost.

 EXCISE DUTY:

The provision has been made for the excise duty applicable on the finished goods stock in
the excise expense.
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OBJECTIVES OF STUDY

 Primary objective:

The objective of study of financial statement is to know information about the financial position
& performance of an enterprise with the help of analytical tools.

 Examining the trends in the profits of the Pharmaceutical industry in India and identifying
the reasons for the low profits of the industry

 Analyzing the financial performance of the Pharmaceutical Companies due to the structural
changes in Finance.

 Analyzing the sources of finance in Pharmaceutical Industry and studying how far the low
profitability and high pay-out ratios are responsible for the fall of internal sources

 Studying the capital structure of the Pharmaceutical industry and its impact on the
profitability and liquidity.

 Suggesting suitable measures for the efficient and effective functioning of Pharmaceuticals
in general and selected companies in particular with special reference to problems of
Profitability, Liquidity and Finance.
 46

 Secondary objectives:

Based on this information, objective of analyzing them is to evaluate:

1) The adequacy of the profits earned by the company

2) The adequacy of its financial strength

3) Its ability to generate enough cash & cash equivalents, timing & certainly of their
Generation.

4) The future growth outlook of the company.

5) To know the financial performance evaluation of the company.

6) To give suggestion on the basis of Liquidity, Profitability, Efficiency and Leverage

analysis

7) To know the Market Position by taking Market Value Ratios

8) To know the tradeoff between Liquidity & Profitability.

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 Objectives of horizontal analysis:

1) To compare the figures of the current period with that of the past period.

2) To analyze the performance and find out areas of improvement.

 Objectives of ratio analysis:

1) To compare the actual ratios with the budgeted ratios.

2) To find out deviation in targeted and achieved results.

3) It helps in planning the future activities.

4) Comparison with Competitor Company helps in developing competitive strategy.

5) Comparison with Industry ratio, give picture about company‘s growth.

 48

RESEARCH
METHODOLOGY
 49

“Research is the systematic approach of identification, collection, analysis, dissemination and use
information for the purpose of improving decision making and problem solving.”

The research is designed to study the financial statements of Anphar Organics

Private Limited and make analysis on the basis of the study so as to make interpretation about the
growth structure and financial position of the company. Which can be used for the purpose of
future forecasting of financial requirements and sources to meet those requirements.

 METHOD OF DATA COLLECTION:

Data required for the research work can be made available from the different sources that can
be classified as-

1. Primary data

2. Secondary data

1. Primary data-

Primary data are information collected by a researcher specifically for a research

assignment. Primary data are information that a company must gather because no one has
compiled and published the information in a forum accessible to public. Primary data are
original in nature and directly related to the issues or problems and are current data. Primary
 50

data is collected by the researcher through different techniques, some of them are as
follows:
 Interview
 Questionnaires
 Surveys

2. Secondary data-

Secondary data refers to data that was collected by someone other than the user. It is refer
to the data, which have already been collected and analyzed by someone else for its own
use and later the same data is used by different user or person. The source of data is called
secondary because this data have already been collected and presented in some form by
someone else for some purpose. Secondary data is collected from sources like:

 Information collected through censuses or government departments like housing,

social security, electoral statistics, tax records
 Internet searches or libraries
 Progress reports
 51

 DATA SOURCE:

The sources of data in this research report are primary and secondary data.

 Primary data-
The primary data was collected through interview with company’s members.

 Secondary data-
The secondary data was collected through browsing different websites,
Companies Memorandum and Article of Association and financial reports of the company.

i) For Horizontal analysis data has been taken from 2014-15 to 2015-16 that is two years
data.
ii) For cash flow statement analysis data has been taken from 2014-15 to 2015-16 that is
two years data.
iii) For Ratio analysis data has been taken from 2014-15 to 2015-16 that is two years data.
 52

HYPOTHESIS TESTING

Since the objective of this study is to examine the relationship between Profitability &
Liquidity, the study makes a Financial Performance through testable hypothesis.

Hypothesis:

H0: There is no positive relationship between the Liquidity & Profitability of Anphar Organics
Private Limited.

H1: There is positive relationship between the Liquidity & Profitability of Anphar Organics
Private Limited.

 DETAIL OF STUDY & TOOLS TO BE USED:

Financial statement analysis seeks to evaluate the performance, financial strength, ability to
generate enough cash & the growth outlook of a company. It determining the money needs in a
business can be a tough task. The analyses of the accounts and the economic prospects of a firm
require skilled and experienced professionals to carry out the task. But the returns are as beneficial
and profitable as much as the effort involved.
 53

Financial analysis is the process of identifying the financial strength &

weaknesses of the firm by properly establishing relationship between the items of the balance sheet
& profit & loss account. Financial analysis is the starting point for the making plans, before using
any sophisticated forecasting & planning procedures. A number of tools are available in the tool
kit of the analyst for the purpose certain tools are:

1) Horizontal analysis

2) Ratio analysis

 Horizontal analysis:

Horizontal analysis is very simple tool. It facilitates a quick review of the current year‘s
performance & financial position of a business over the previous year. The methodology is to work
out increase or decrease in each item of the balance sheet & profit & loss account of the current
year over those of the last year & to express this as a percentage of the last year‘s figure. The
horizontal analysis is the financial statements of a company of successive years presented side-by-
side.

Advantages:

1) The first column gives the difference between the past period and the current period, while the
percentage column shows what percentage of the past figure is the figure denoting the change.

2) It places the facts very simply in front of the shareholder and makes the job of analyzing the
improvements or the lack of it very simple for the shareholder.
 54

 Ratio analysis:

The most important task of a financial manager is to interpret the financial information in such a
manner, that it can be well understood by the people, who are not well versed in financial
information figures. The technique, by which it is to be calculated, is known as ‘Ratio Analysis’.

1) Percentage

2) Rate

3) Proportion Ratio

Analysis is an important technique of financial analysis. It depicts the efficiency or

shortfall of the organization in the form of trend Analysis. Different ratio appeal to different people
managements, having the task of running business efficiency, will interest in all ratios. A Supplier
of goods on credit will be partially interested in liquidity ratios, which indicate the ability of the
business to pay its bills. Existing and future shareholders will indicate the ability of business to
purchase.

Existing and future shareholders will interest in investment ratios, which indicate the
level of return that can be expected on an investment in business. Major customers, intent on
having a continuing source of supply, will be interested in the financial stability, as reveled by the
capital structure, liquidity and profitability ratios. Debenture and loan stock holders will be
interested in ability of a business will be interested in the ability of a business to pay interest, and
ultimately to repay capital. A banker, gibing only short-term loans, will be interested mainly in the
liquidity of the business, and its ability to repay those loans.
 55

 STEPS IN RATIO ANALYSIS:

1) Collection of information, which are relevant from the financial statements and then to
Calculate different ratios accordingly.

2) Comparison of computed ratios of the same organization or with the industry ratios.

3) Interpretation, drawing of the inference and report-writing.

 Advantages:

1) Inter-firm comparison, because absolute figure comparison will lead to nowhere.

2) Intra-firm comparison for the same reason.

3) Comparison against industry benchmarks.

4) Analysis of chronological performance over a long period.

5) Cannot depend on only one ratio

 56

LIMITATIONS OF THE STUDY:

In order to facilitate uniformity in data, years have been readjusted and the data have been recast
as on 31st March of each year. The figure taken from the annual reports have been rounded off to
two decimals of rupees in lakh.

The data available in financial statements have been translated in to a

pre-designed structure format so that a meaningful interpretation could be made through inter-firm
and intra firm comparisons. The format in which the data have been classified is selected after
careful consideration of the operation in Anphar Organics private limited.

Nevertheless, the limitations do in no way act as a deterrent in drawing

effective and meaningful inferences from the study.
 57

DATA ANALYSIS
AND
INTERPRETATION
 58

 Horizontal Analysis of Profit and Loss Statement of

the company:

S. no Particulars 2015-16 2014-15 Increase/Decrease

Rs.P Rs.P Value Percentage

I. Revenue from operations 2969.41 2602.1 367.31 14.12%

II. Other income 4.02 5.51 -1.49 -27.04%

III. Total Revenue (I + II) 2973.43 2607.61 365.82 14.03%

IV. Expenses:

Cost of materials consumed 1820.44 1589.1 231.34 14.56%

Purchases of Stock-in-Trade 0 0

Changes in inventories of finished goods, work-in-

19.31 -13.57 32.88 -242.30%
progress and Stock-in-Trade

Employee benefits expense 170.21 130.1 40.11 30.83%

Finance costs 36.97 44.74 -7.77 -17.37%
Depreciation and amortization expense 103.67 101.08 2.59 2.56%
Other expenses 324.12 320.19 3.93 1.23%

Total expenses 2474.71 2171.62 303.09 13.96%

Profit before exceptional and extraordinary items

V. 498.72 435.98 62.74 14.39%
and tax (III-IV)
 59

Exceptional items - Preliminary Expenses Written

VI.
Off - - -

VII. Profit before extraordinary items and tax (V - VI) 498.72 435.98 62.74 14.39%

VIII. Extraordinary Items

- - -

IX. Profit before tax (VII- VIII) 498.72 435.98 62.74 14.39%

X Tax expense:

(1) Current tax 16.81 0 16.81 16.81%

(2) Deferred tax 130.18 29.71 100.47 338.17%

Profit (Loss) for the period from continuing

XI 351.73 406.28 -54.55 -13.43%
operations (IX-X)

XII Profit/(loss) from discontinuing operations

- - - -

XIII Tax expense of discontinuing operations

- - - -

Profit/(loss) from Discontinuing operations (after

XIV
tax) (XII-XIII) - - - -

XV Profit (Loss) for the period (XI + XIV) 351.73 406.28 -54.55 -13.43%
XVI Earnings per equity share:

(1) Basic 0 0

(2) Diluted 0 0
 60

Percentage are hereby calculated by taking 2014 – 2015 as the base year.

For example:

Revenue from Operations = 367.31*100 = 36731

Revenue from Operations = 36731/2602.1
Revenue from Operations = 14.11%
 61

 Horizontal Analysis of Balance Sheet of the company:

2015-16 2014-15 Increase/Decrease

S. no. Particulars
Rs.P Rs.P Value Percentage

I. EQUITY AND LIABILITIES

1 Shareholders’ funds

(a) Share capital 318.79 318.79 0

(b) Reserves and surplus 312.17 7.03 305.14 4340.54%

(c) Money received against share warrants 0 0

2 Share application money pending allotment 0 0

3 Non-current liabilities

(a) Long-term borrowings 235.17 542.17 -307 -56.62%

(b) Deferred tax liabilities (Net) 0 0 0

(c) Other Long term liabilities 0 0 0

(d) Long-term provisions 0 0 0

4 Current liabilities

(a) Short-term borrowings 240.5 297.96 -57.46 -19.28%

(b) Trade payables 448.21 290.15 158.06 54.48%

(c) Other current liabilities 72.78 73.76 -0.98 -1.33%

 62

(d) Short-term provisions 13.46 2.05 11.41 556.59%

TOTAL 1641.08 1531.91 109.17 7.13%

II. ASSETS

1 Non-current assets

(a) Fixed assets

(i) Tangible assets 681.97 372.48 309.49 83.09%

(ii) Intangible assets 0 0 0

(iii) Capital work-in-progress 25.11 188.16 163.05 -86.65%

(iv) Intangible assets under development 0 0 0

(b) Non-current investments 0 0 0

(c) Deferred tax assets (net) 0 130.18 130.18 -100.00%

(d) Long-term loans and advances 66.7 1.4 65.3 4664.29%

(e) Other non-current assets 0 0 0

2 Current assets

(a) Current investments 0 0 0

(b) Inventories 240 238 2 0.84%

(c) Trade receivables 470 481.78 -11.78 -2.45%

(d) Cash and cash equivalents 13.5 21 -7.5 -35.71%

 63

(e) Short-term loans and advances 1.5 19.5 -18 -92.31%

(f) Other current assets 142.3 79.4 62.9 79.22%

TOTAL 1641.08 1531.9 109.18 7.13%

 64

 RATIO ANALYSIS:

The most important task of a financial manager is to interpret the financial

information in such a manner, that it can be well understood by the people, who are not
well versed in financial information figures. The technique, by which it is to be calculated,
is known as ‘Ratio Analysis’.

1) Percentage
2) Rate
3) Proportion

Ratio Analysis is an important technique of financial analysis. It depicts the

efficiency or shortfall of the organization in the form of trend Analysis.

Different ratio appeal to different people managements, having the task of

running business efficiency, will interest in all ratios.

A ratio analysis is powerful tools of financial analyses. A ratio is defined as “the

indicted quotient of two mathematical expressions” and as “the relationship between two
or more things”. In financial analyses, a ratio is used as benchmark for evaluating the
financial position and performance of the firm.
 65

Types of Ratios:

 Liquidity Ratios
 Leverage Ratios
 Activity Ratios
 Profitability Ratios
 Equity Ratios

Liquidity Ratios

Liquidity ratios measure the firm‘s ability to make current obligations. The most
common ratios which indicate the extent of liquidity or lack of it are:

 Current Ratio
 Quick Ratio
 Liquid Ratio

Leverage Ratios

Leverage ratio shows the proportions of debt and equity in financing the firm‘s assets.
The short term creditors like bankers and suppliers of raw materials are more concerned
with the firm‘s the current debts paying ability. The leverage ratios are as:

 Debt ratio
 Debt equity Ratio
 66

Profitability Ratios

Profitability measure overall performance and effectiveness of the firm. They are as:

 Gross Profit ratio

 Net Profit ratio
 Operating ratio
 Operating Exp. ratio

Activity Ratios

Activity ratio is employed to evaluate the efficiency with which the firm‘s manages
and utilizes its assets. This ratio is also called turnover ratio assets because they indicate
the speed with which assets are being converted or turn over in to sales. The activity
ratios are as:

 Assets turn over

 Net turn over
 Inventory turnover
 Debtor‘s turnover
 Collection Period
 Creditor turnover
 Payment Period
 Profitability Ratio
 67

Equity Ratios

 Dividend per share

 Earnings per share
 Book value per share
 Payout ratio
 Dividend yield ratio
 Earning yield ratio

Importance of ratio analysis

The ratio analyses are the most important tool of the analyses. The various groups
of people having different investors are interested in analyzing the financial information.
The importance of the ratio can be summarized for the various groups vested with
diversified interest as follow:

 For short term creditors

 For long term creditors
 For management
 For Investor
 68

Steps in ratio analysis

 Collection of information, which are relevant from the financial statements and then to
calculate different ratios accordingly.

 Comparison of computed ratios of the same organization or with the industry ratios.

 Interpretation, drawing of the inference and report-writing

Limitation of the ratio analysis

The major limitation of the ratio analyses are summarized as follows:

 Only quantities analysis and not qualitative analyses

 Historical analysis

 Only symptoms not cure

 69

Ratio analysis at Anphar Organics:

1) Liquid Ratio:

a) Current Ratio:

Current ratio is calculated by dividing current assets by current liabilities. Current assets
include cash and those assets that can be converted into cash within a year, such as marketable
securities, debtors and inventories. Current liabilities include creditors, bills payable, accrued
expenses, short-term bank loan, income tax liability and long term debt maturing in the current
year. The current ratio is a measure of the firm‘s short-term solvency. It indicates the availability
of current assets in rupees for every one rupee of current liability. A ratio is greater than one means
that the firm has more current assets than current claims against them.

Current Assent
Current Ratio: ---------------------
Current Liability

Current ratio 2014-2015 (in lakh) 2015-2016 (in lakh)

Current Assets 839.68 867.3

Current liability 663.92 774.95

Result 1.264731 1.119169

 TABLE 1.0
 70

Current Ratio

1.3
1.25
1.2
1.15
1.1
1.05
1
2014-2015 2015-2016

 GRAPH 1.0

INTERPRETATION:

A current ratio of 2:1 considered to be a satisfactory ratio. On the basis of these

traditional rules, if the current ratio is 2 or more, it means that the firms is adequately liquid and
has the ability to meet its currents obligation but if the current ratio is less than 2 it means that the
firm has difficulty in meeting in its current obligations. Higher the ratio, greater the margin of
safety for short term creditors and vice a versa

In the Anphar Organics, the current ratio of the year 2014-15 is 1.264731 and 2015-16 is 1.119169.
The ratio is Decreasing 2015-16 it is less than the ideal ratio.
 71

b) Liquid Ratio

Liquidity Ratio is a relationship of liquid assets with current liabilities and is computed to
assess the short- term liquidity of the enterprise in its correct form.

A variant of current ratio is the liquid ratio which is designed to show the amount of cash available
to meet immediate payment. If the liquid assets are equal to or more than liquid liability the
condition may be considered as satisfactory.

Liquid Ratio = Liquid Assets / Liquid Liabilities

Liquid Assets = Current Assets – Stock

Liabilities = Current Liabilities

Liquid Assent
Liquid Ratio: ---------------------
Liquid Liability

So, Liquid Asset for 2014-2015 = 839.68-238= 601.68

And, for 2015-2016 = 867.3-240 = 627.3

 72

Liquid Ratio 2014-2015 (in lakh) 2015-2016 (in lakh)

Liquid Assets 601.68 627.3

Liquid liability 663.92 774.95

Result 0.809472 0.906254

 TABLE 2.0

Liquid Ratio

0.95

0.9

0.85

0.8
Current Ratio
0.75
2014-2015 2015-2016

 GRAPH 2.0
 73

INTERPRETATION:

For satisfactory position Liquid ratio is 1:1. In the Anphar Organics, the
Liquid ratio of the year 2014-15 is 0.809472, 2015-16 is 0.906254 in every financial year but it is
just a little less than the ideal ratio.

c) Quick Ratio:

Quick ratio, also called Acid test ratio, establishes a relationship between quick or liquid
assets and current liabilities. An asset is liquid if it can be converted into cash immediately or
reasonably soon without a loss of value.

Quick Assent
Quick Ratio: ---------------------
Quick Liability

Quick Asset = Current Assets – Inventory

Quick Asset for 2014-2015 = 839.68-238= 601.68

And, for 2015-2016 = 867.3-240 = 627.3

 74

Quick Ratio 2014-2015 (in lakh) 2015-2016 (in lakh)

Quick Assets 601.68 627.3

Quick liability 663.92 774.95

Result 0.809472 0.906254

 TABLE 3.0

Liquid Ratio

0.95

0.9

0.85

0.8
Current Ratio
0.75
2014-2015 2015-2016

 GRAPH 3.0
 75

INTERPRETATION:

A quick ratio of 1:1 is usually considered favorable, since for every rupee of current liabilities,
there is a rupee of current assets.

A high liquidity ratio compared to current ratio may indicate under stocking while a low liquidity
ratio while a low liquidity ratio indicated overstocking.

For satisfactory position Quick ratio is 1:1. In the Anphar Organics, the
Quick ratio of the year 2014-15 is 0.809472, 2015-16 is 0.906254 in every financial year but it is
just a little less than the ideal ratio.
 76

2) Leverage Ratio

 Debt - Equity Ratio

It is clear that from the total debt ratio that lenders have contributed more fund
than owners, these is relationship describing the lenders `contribution from each rupees of the
owners` contributed is called debt equity ratio. Debt equity ratio is directly computed by dividing
total debt by net worth.

All long Term fund Borrowed

Debt - Equity Ratio: ------------------------------------
Equity Fund

Debt-equity Ratio 2014-2015 (in lakh) 2015-2016 (in lakh)

Long Term Fund Borrowed 542.17 235.17

Equity Fund 318.79 318.79

Result 1.700712 0.737696

 TABLE 4.0
 77

Debt - Equity Ratio

1.5

0.5

0
2014-2015 2015-2016

 GRAPH 4.0

INTERPRETATION:

This ratio is significant to access the soundness of long –term financial

position. It also indicates the extent to which firm depends upon outsiders for its existence. It
portrays the proportion of total funds acquired by a firm by way of loans.

In Anphar Organics, the debt-equity ratio for the year 2014-15 is 1.700712 and 2015-16 is
0.737696. The debt-equity ratio is very near to the ideal ratio.
 78

3) Profitability ratio:

 Net profit ratio:

Essentially the net profit ratio tells us about how the company's profits relate to their sales.
Different industries have fundamentally different net profit ratios. The net profit ratio can tell us
about the nature of the industry the company is operating in as well as serving to compare past
performances of a company.

Net Profit
Net Profit Ratio: -------------- * 100
Sales

Net Profit Ratio 2014-2015 (in lakh) 2015-2016 (in lakh)

Net Profit 406.28 351.73

Sales 2602.1 2969.41

Result 15.61354 % 11.84511 %

 TABLE 5.0
 79

Net Profit Ratio

20

15

10

0
2014-2015 2015-2016

 GRAPH 5.0

 Gross profit ratio:

The gross profit ratio tells us how the company's gross profits relate to
their sales. Different industries have fundamentally different gross profit ratios. The gross profit
ratio can tell us about the nature of the industry the company is operating in as well as serving to
compare past performances of a company.
 80

Gross Profit
Gross Profit Ratio: ---------------- * 100
Sales

Gross Profit Ratio 2014-2015 (in lakh) 2015-2016 (in lakh)

Gross Profit 435.98 498.72

Sales 2602.1 2969.41

Result 16.755 % 16.795 %

 TABLE 6.0

Gross Profit Ratio

16.8

16.78

16.76

16.74

16.72
2014-2015 2015-2016

 GRAPH 6.0
 81

FINDINGS
 82

Some findings were found out in the study period. They are:

 Profitability:

The efficiency of a business concern is measured by the amount of profits earned. The
larger the profits, the more efficient and profitable the business becomes. Profitability has
been considered to a great extent one of the main criteria to judge the extent to which the
management has been successful in efficiently utilizing the funds at its disposal, or in other
words, how far the management has been successful in maximizing its profits or
minimizing its losses.

 Finances of the Industry:

The important sources of finance for Pharmaceutical industry in India are Share capital,
equity and preference, debentures, public deposits, loans from commercial banks and term
lending institutions, trade dues and other current liabilities, depreciation provision and
retained earnings.
 83

 Capital Structure and Its Impact on Profitability &Liquidity:

The decision of evolving a proper ratio for debt-equity is not merely academic as the
consequences flowing from it are vital and have a direct bearing on the profitability of the
industries. A high equity proportion or a high loan proportion is not desirable, since both
the extremities result in some inherent disadvantages to the enterprises. Hence there is a
need to strike balance between debt and equity. The academic people as well as the
institutions in the western countries paid good attention in the area of capital structure in
the financial management of the under takings. Little work was done in India in this
particular area.
In India, the controller of capital issues while giving permission for raising the
capital generally insists on debt equity ratio of 2:1.

 Liquidity Position:

The maintenance of adequate liquidity is vital to the success of any company. Measured in
terms of either technical liquidity or operational liquidity the position of the Pharmaceutical
industry was not much eroded over the period of the study. The analysis of the current
ratio, quick ratio and absolute liquidity ratio of Pharmaceuticals reveals that these ratios
were below the accepted norms. In fact there was a decline in some of these ratios during
some years.
 84

CONCLUSION
 85

CONCLUSION OF HORIZONTAL ANALYSIS:

 PAT growth is higher than sales growth. It shows margins are under control.

 Need to contain material cost.

 Very efficient fixed asset utilization.

 Investment higher than the net worth, which means operations are being funded by
Current liabilities & some loans.

 Extremely strong financial position.

 86

CONCLUSION OF RATIO ANALYSIS:

 By analyzing the results we conclude that the Anphar Organics is able to reduce the
liquidity, then the Anphar Organics is efficient in managing their profitability.

 We found Moderate negative relationship between the measures the liquidity with
corporate profitability.

 Anphar Organics is maintaining 80 to 90 percentage liquidity from other sources not

from profit.

 The Liquidity & Profitability have “Moderate Negative Correlation” that means liquidity
is dependent on Profitability.

 So here, we conclude that ―There is significance relationship between the Liquidity &
Profitability of Anphar Organics
 87

SUGESSTIONS
 88

There is no comprehensive study which recommended measures for the financial

management of the industry. It is in this context the following suggestions are offered:

1. Need for Increasing Profitability:

 Reducing Total Costs

 Increase of Retained Earnings

 Price Control

2. Need For The Increasing Of The Internal Sources:

 Increasing of Share capital

 Increasing of Provisions

3. Need To Reduce The Dependence upon External Sources:

 Issue of Shares
 89

 Public Deposits

 Bank Borrowings

4. Efficient Management Of Working Capital:

 Managing current assets Structure properly

 Changing Structure of Current Liabilities

 Increasing Working Capital Turn over

5. Need For Maintaining Balanced Capital Structure:

Excessive dependence on external sources leads to imbalanced capital structure. The

present debt-equity ratio is no doubt below the norm of 2:1. But with the present
profitability the industry was unable to maintain the situations. The financial risk of the
industry has been fluctuating. In this context the industry should strive to arrive at a
balanced capital structure from two counts: Firstly, there is an urgent necessity for
increasing the profitable of the industry somehow. Secondly, the industry should try to
secure fresh investment in the form of equity and preference or convertible debentures.
 90

6. Improving Liquidity Position:

The inadequate liquidity position of the industry is paying the way to so many troubles and
disadvantages. The industry, therefore should strive hard to increase the liquidity position.
This may be possible by immediately selling the excess lands that the industries own in the
cities. However, in the long run the liquidity position of the industry can be improved only
when the industry is made to stand on its own legs.

7. Investment Opportunities Should Rise In Indian

Pharmaceutical Services:

Not too many folks consider India when thinking of pharmaceutical services. That is
changing. The pharmaceutical service sector had been somewhat late to the outsourcing
party compared to the IT sector. But it is expanding quite well.

8. Strategies Should Play In Coverage Of Manufacturing

Costs:

There are two general strategies for product manufacture at reduced prices for developing
countries. One is to work with the major pharmaceutical firms, either by requiring them to
provide products at near-production cost to patients in developing countries or by
purchasing products from them at developed-world market cost and distributing them in
the developing world at a subsidized price. It is probably not in the drug industry’s
economic interest to price differentially, but the industry could be persuaded to do so on
 91

the basis of its own sense of public service, especially if combined with specific legislation
or with the threat of compulsory licensing.

The alternative approach is to produce the products under compulsory license either in a
private-sector generic industry, whose fixed costs are distributed over a fairly large market,
or in a public-sector generic industry, whose fixed costs are covered by the public. This
approach offers competition as a way to lower prices, rather than necessarily requiring
dependence on an administrative determination of an appropriate price. Moreover, it might
offer new opportunities for production within the developing world, something that would
be extremely popular politically with economic leaders of developing countries.

9. Excess Of Liquidity To Be Invested:

The present liquidity position of the industry is low and the inadequate liquidity position
of the industry is paving the way to so many troubles and disadvantages. The industry,
therefore, should strive hard to increase the liquidity position.

10. Others:

 To Over Come The Delays In Launch Of New Drugs

 To Overcome The Impact of Globalization on the Indian Pharmaceutical Industry

 Pharmaceutical Firms should turn to Rural Areas

 92

 Pharma Majors should Line up Plans for Retail Business

 Research and Development

 Industry Should Seek for Product Quality

 To beware of Production of Duplicate Drugs

 93

LIMITATIONS
 94

 As data provide to us, has been taken from the secondary source, it is not sure that collected
data is perfectly accurate.

 Companywide factors.—only use of numerical or accounting information [avoid best

human resource, automation in production such a non-account factors are ignored.]

 Study based on historical data & records.

 Fail to indicate what the entity‘s normal or benchmark position is

 Be heavily influenced by the choice of the base fiscal period

 Cash flow statement is based on cash basis of accounting; it ignores the basic accounting
concept of accrual basis.

 Since the companies follow different approaches in computing the data and defining the
concepts, there may be certain discrepancies in the interpretation of data

 While calculating the liquidity, profitability and solvency ratios of the organization
theoretical approach is adopted. Hence there may be some discrepancies between ratios of
research scholar and the data furnished in the reports.
 95

OVERALL
EXPERIENCE
 96

Working with Anphar Organics Private Limited was a good experience and
was a great opportunity to learn various aspects of working in finance department. The
industrial guide was very helping and also taught me various tactics of financial and ratio
analysis. I got opportunity to work with dedicated mentors from the company on real world
industrial problems related to drug discovery and development as well as to participate in
the other training activities organized by the company for interns.

During Summer Internship I came to learn the various techniques which is

used to create financial Budget, Sales Budget and also came to learn about various
forecasting techniques. This internship helped me in developing my personal skills and
understanding and solving the real world problems faced by the company in various
aspects.

During the internship I got an opportunity to attend the meeting organized

by the finance department and was carried by the Director of Finance to discuss the various
aspects to manage financial problems and discovering various methods for credit control.
I also got opportunity to spend a day with Director of Finance and learn various
management techniques and problems faced by the upper level management and the way
to solve these problems.

Overall this Summer Internship was a great learning experience and was a
great opportunity to work in practical environment and learn the various tactics which are
used by the companies during their day to day workings.
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BIBLIOGRAPHY
 98

BOOKS
 Pandey I M, Financial Management

 Kothari C.R, Research Methodology

NEWSPAPER & MAGZINES

 Journal of Pharmaceutical Industry

 Business Today

 The Pharma Times

WEBSITES
 www.madraspharma.com

 www.anphar.com

 www.medindia.com

 www.zaubacorp.com

 www.google.com

 www.wikipedia.com
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APPENDIX
 100

APPENDIX 1

BALANCE SHEET OF ANPHAR ORGANICS PRIVATE

LIMITED

Balance sheet of previous financial year 2014-2015 and current year 2015-2016

Note
Particulars 2015-16 2014-15
No.
1 2 15 15
Rs.P Rs.P
I. EQUITY AND LIABILITIES

1 Shareholders’ funds
(a) Share capital 2 318.79 318.79
(b) Reserves and surplus 3 312.17 7.03
(c) Money received against share warrants .00 .00

2 Share application money pending allotment .00 .00

3 Non-current liabilities
(a) Long-term borrowings 4 235.17 542.17
(b) Deferred tax liabilities (Net) .00 .00
(c) Other Long term liabilities .00 .00
(d) Long-term provisions .00 .00

4 Current liabilities
(a) Short-term borrowings 5 240.50 297.96
(b) Trade payables 6 448.21 290.15
(c) Other current liabilities 7 72.78 73.76
(d) Short-term provisions 8 13.46 2.05

TOTAL 1 641.08 1 531.91

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II. ASSETS

1 Non-current assets
(a) Fixed assets
(i) Tangible assets 9 681.97 372.48
(ii) Intangible assets .00 .00
(iii) Capital work-in-progress 10 25.11 188.16
(iv) Intangible assets under development .00 .00
(b) Non-current investments .00 .00
(c) Deferred tax assets (net) .00 130.18
(d) Long-term loans and advances 11 66.70 1.40
(e) Other non-current assets .00 .00

Current
2 assets
(a) Current investments .00 .00
(b) Inventories 12 240.00 238.00
(c) Trade receivables 13 470.00 481.78
(d) Cash and cash equivalents 14 13.50 21.00
(e) Short-term loans and advances 15 1.50 19.50
(f) Other current assets 16 142.30 79.40

TOTAL 1 641.08 1 531.90

.00 .00
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APPENDIX 2

PROFIT AND LOSS STATEMENT OF ANPHAR ORGANICS

PRIVATE LIMITED

Profit and Loss Statement of previous financial year 2014-2015 and current year
2015-2016

Particulars Note 2015-16 2014-15

No.
Rs.P Rs.P

I. Revenue from operations 17 2 969.41 2 602.10

II. Other income 18 4.02 5.51

III. Total Revenue (I + II) 2 973.43 2 607.61

IV. Expenses:

Cost of materials consumed 19 1 820.44 1 589.10

Purchases of Stock-in-Trade .00 .00

Changes in inventories of finished goods, work-in-
20 19.31 - 13.57
progress and Stock-in-Trade

Employee benefits expense 21 170.21 130.10

Finance costs 22 36.97 44.74

Depreciation and amortization expense 9 103.67 101.08

Other expenses 23 324.12 320.19

Total expenses 2 474.71 2 171.62

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Profit before exceptional and extraordinary items and

V. 498.72 435.98
tax (III-IV)

VI. Exceptional items - Preliminary Expenses Written Off - -

VII. Profit before extraordinary items and tax (V - VI) 498.72 435.98

VIII. Extraordinary Items - -

IX. Profit before tax (VII- VIII) 498.72 435.98

X Tax expense:

(1) Current tax 16.81 -

(2) Deferred tax 130.18 29.71

Profit (Loss) for the period from continuing operations

XI 351.73 406.28
(IX-X)

XII Profit/(loss) from discontinuing operations - -

XIII Tax expense of discontinuing operations - -

Profit/(loss) from Discontinuing operations (after tax)

XIV - -
(XII-XIII)

XV Profit (Loss) for the period (XI + XIV) 351.73 406.28

XVI Earnings per equity share:

(1) Basic .00 .00

(2) Diluted .00 .00