` 1 Working Capital Management on Cadila Healthcare Limited. Submitted to Gujarat University for the degree of Master in Commerce Faculty: Commerce Subject: Working Capital Management on Cadila Healthcare Limited. By Moin A. Panja . H. A .College of Commerce. College Seat No. 36 Year 2014. Exam Seat No. Year 2014. Under the guidance of Prof. P. C. Raval H. A. College of Commerce.
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Working Capital Management on Cadila Healthcare Limited.
Submitted to
Gujarat University for the degree of
Master in Commerce
Faculty: Commerce
Subject: Working Capital Management on Cadila Healthcare Limited.
By
Moin A. Panja .
H. A .College of Commerce.
College Seat No. 36 Year 2014.
Exam Seat No. Year 2014.
Under the guidance of
Prof. P. C. Raval
H. A. College of Commerce.
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A first for the nation...
Cadila Healthcare Limited
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H. A. College of Commerce.
Near Law Garden,
Ahmedabad
CERTIFICATE
This is to certify that Mr. Moin A. Panja has worked and completed
his Project Work for the degree of MASTER IN COMMERCE in the
faculty of COMMERCE in the subject of ACCOUNTANCY on Title
of project work to be written “ Working Capital Management on
Cadila Healthcare Limited .” under my supervision. It is his own
work and facts reported by his personal findings and investigations.
Name & Signature of Guide Date of submission:
Name & Signature of Professor in Charge/ Director/Principal of theInstitute
Stamp of the Institute with date
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Declaration by student
I the undersigned Mr. Moin A. Panja here by, declare that this
project work entitled “Working Capital Management on Cadila
Healthcare Limited “is a result of my own research work and has not
been previously submitted to any other University for any other
examination.
I here by further declare that all information of this document has
been obtained and presented in accordance with academic rules and
ethical conduct.
College Seat No . 36 Year 2014 .
Exam Seat No. 784 Year 2014 .
Date Name & Signature
Moin A. Panja
Place : Ahmedabad ResearchScholar
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PREFACE
To start any business, First of all we need finance and the success of that business
entirely depends on the proper management of day-to-day finance and the
management of this short-term capital or finance of the business is called Working
capital Management.
Working Capital is the money used to pay for the everyday trading activities carried
out by the business - stationery needs, staff salaries and wages, rent, energy bills,
payments for supplies and so on.
I have tried to put my best effort to complete this task on the basis of skill that I have
achieved during the study of M.com in the institute.
I have tried to put my maximum effort to get the accurate statistical data. However
I would appreciate if any mistakes are brought to my by the reader.
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ACKNOWLEDGEMENT
In course of M.com my college had given me opportunity to prepare financial report
on Cadila Healthcare Limited. Therefore I was asked to prepare a project report on
Working Capital Management at Cadila Healthcare Limited.. Moreover by this way I
got an opportunity to be financial management practically. While preparation of this
report many people given me help and support. I would be happy to appreciate all of
them and give my thanks to all who help and give them support during preparation of
the report.
I thankful to the faculty that provide such great opportunity to get practical knowledge
about financial management and guide us in preparation of project so I would like to
thank Prof. P.C. Raval to provide us guideline for preparation of project report .
Date : 31-03-2014 Moin A. Panja
Place: Ahmedabad
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Chapter No. Title of Chapter Page No.
Chapter :- 1 Introduction 9
1.1 History of Indian Pharmaceutical industry 10
Chapter :- 2 Introduction to Cadila Healthcare Limited 22
2.1 History and development 24
2.2 Company profile 40
2.3 Stock performance history 44
2.4 Products plants 46
2.5 Products 47
Chapter :- 3 Research Methodology 50
3.1 Research Objective 51
3.2 Scope of Research 51
3.3 Data Type 51
3.4 Data Sources 51
3.5 Research Design 51
3.6 Tools used for analysis 51
3.7 Literature review 52
3.8 Limitations for the study 52
Chapter :- 4
Theoretical Framework of Working Capital
Management 53
4.1 Working capital Management 54
4.2 Concept of Working Capital 56
4.3 Classification of working capital 57
4.4 Importance or Advantage the Working Capital 59
4.5 Factors determining the working capital requirements 60
4.6 Sources of working capital 61
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4.7 Different aspects of Working capital management 64
4.8 Working capital analysis 70
Chapter :- 5 Data Analysis and interpretation 75
5.1 Working Capital Statement 76
5.2 Liquidity position 80
5.3 Comparative balance sheet statement 81
5.4 Trend Percentage 88
5.5 Ratio Analysis 91
Findings 106
Suggestion 106
Conclusion 107
Bibliography 108
Annexure
Balance sheet for Cadila Healthcare limited. 109
Profit and loss account of Cadila Healthcare limited 111
Cash flow statement 113
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CHAPTER :- 1
INTRODUCTION :
HISTORY OF INDIAN PHARMACEUTICAL INDUSTRY
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1.1 History of Indian Pharmaceutical industry
Industry Definition:-
“The Indian pharmaceutical industry is a success story providing employment for
millions and ensuring that essential drugs at affordable prices are available to the vast
population of this sub-continent.”
Richard Gerster
The Pharmaceutical industry in India is the world's third-largest in terms of volume.
According to Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers,
the total turnover of India's pharmaceuticals industry between 2008 and September
2009 was US$21.04 billion, while the domestic market was worth US$12.26 billion.
The industry holds a market share of $14 billion in the United States.
According to Brand India Equity Foundation, the Indian pharmaceutical market is
likely to grow at a compound annual growth rate (CAGR) of 14-17 per cent in
between 2012-16. India is now among the top five pharmaceutical emerging markets
of the world.
Exports of pharmaceuticals products from India increased from US$6.23 billion in
2006–07 to US$8.7 billion in 2008–09 a combined annual growth rate of 21.25%.
According to PricewaterhouseCoopers (PWC) in 2010, India joined among the league
of top 10 global pharmaceuticals markets in terms of sales by 2020 with value
reaching US$50 billion.
The government started to encourage the growth of drug manufacturing by Indian
companies in the early 1960s, and with the Patents Act in 1970. However, economic
liberalization in 90s by the former Prime Minister P.V. Narasimha Rao and the then
Finance Minister, Dr. Manmohan Singh enabled the industry to become what it is
today. This patent act removed composition patents from food and drugs, and though
it kept process patents, these were shortened to a period of five to seven years.
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The lack of patent protection made the Indian market undesirable to the multinational
companies that had dominated the market, and while they streamed out. Indian
companies carved a niche in both the Indian and world markets with their expertise in
reverse-engineering new processes for manufacturing drugs at low costs. Although
some of the larger companies have taken baby steps towards drug innovation, the
industry as a whole has been following this business model until the present.
India's biopharmaceutical industry clocked a 17 percent growth with revenues of Rs.
137 billion ($3 billion) in the 2009–10 financial year over the previous fiscal. Bio-
pharma was the biggest contributor generating 60 percent of the industry's growth at
Rs. 88.29 billion, followed by bio-services at Rs. 26.39 billion and bio-agri at Rs.
19.36 billion.
In 2013, there were 4,655 pharmaceutical manufacturing plants in all of India,
employing over 345 thousand workers.
Pharmaceutical industry today:-
The number of purely Indian pharma companies is fairly less. Indian pharma industry
is mainly operated as well as controlled by dominant foreign companies having
subsidiaries in India due to availability of cheap labor in India at lowest cost. In 2002,
over 20,000 registered drug manufacturers in India sold $9 billion worth of
formulations and bulk drugs. 85% of these formulations were sold in India while over
60% of the bulk drugs were exported, mostly to the United States and Russia. Most of
the players in the market are small-to-medium enterprises; 250 of the largest
companies control 70% of the Indian market. Thanks to the 1970 Patent Act,
multinationals represent only 35% of the market, down from 70% thirty years ago.
Most pharma companies operating in India, even the multinationals, employ Indians
almost exclusively from the lowest ranks to high level management. Homegrown
pharmaceuticals, like many other businesses in India, are often a mix of public and
private enterprise.
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In terms of the global market, India currently holds a modest 1–2% share, but it has
been growing at approximately 10% per year. India gained its foothold on the global
scene with its innovatively engineered generic drugs and active pharmaceutical
ingredients (API), and it is now seeking to become a major player in outsourced
clinical research as well as contract manufacturing and research. There are 74 US
FDA-approved manufacturing facilities in India, more than in any other country
outside the U.S, and in 2005, almost 20% of all Abbreviated New Drug Applications
(ANDA) to the FDA are expected to be filed by Indian companies. Growth in other
fields notwithstanding, generics are still a large part of the picture. London research
company Global Insight estimates that India’s share of the global generics market will
have risen from 4% to 33% by 2007. The Indian pharmaceutical industry has become
the third largest producer in the world and is poised to grow into an industry of $20
billion in 2015 from the current turnover of $12 billion
Patent:-
As it expands its core business, the industry is being forced to adapt its business
model to recent changes in the operating environment. The first and most significant
change was the 1 January 2005 enactment of an amendment to India’s patent law that
reinstated product patents for the first time since 1972. The legislation took effect on
the deadline set by the WTO’s Trade-Related Aspects of Intellectual Property Rights
(TRIPS) agreement, which mandated patent protection on both products and
processes for a period of 20 years. Under this new law, India will be forced to
recognize not only new patents but also any patents filed after 1 January 1995. Indian
companies achieved their status in the domestic market by breaking these product
patents, and it is estimated that within the next few years, they will lose $650 million
of the local generics market to patent-holders.
In the domestic market, this new patent legislation has resulted in fairly clear
segmentation. The multinationals narrowed their focus onto high-end patients who
make up only 12% of the market, taking advantage of their newly bestowed patent
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protection. Meanwhile, Indian firms have chosen to take their existing product
portfolios and target semi-urban and rural populations.
Product development:-
Indian companies are also starting to adapt their product development processes to the
new environment. For years, firms have made their ways into the global market by
researching generic competitors to patented drugs and following up with litigation to
challenge the patent. This approach remains untouched by the new patent regime and
looks to increase in the future. However, those that can afford it have set their sights
on an even higher goal: new molecule discovery. Although the initial investment is
huge, companies are lured by the promise of hefty profit margins and has a legitimate
competitor in the global industry. Local firms have slowly been investing more
money into their R&D programs or have formed alliances to tap into these
opportunities.
Small and medium enterprises:-
As promising as the future is for a whole, the outlook for small and medium
enterprises (SME) is not as bright. The excise structure changed so that companies
now have to pay a 16% tax on the maximum retail price (MRP) of their products, as
opposed to on the ex-factory price. Consequently, larger companies are cutting back
on outsourcing and what business is left is shifting to companies with facilities in the
four tax-free states – Himachal Pradesh, Jammu & Kashmir, Uttaranchal and
Jharkhand. Consequently a large number of pharmaceutical manufacturers shifted
their plant to these states, as it became almost impossible to continue operating in
non-tax free zones. But in a matter of a couple of years the excise duty was revised on
two occasions, first it was reduced to 8% and then to 4%. As a result the benefits of
shifting to a tax free zone was negated. This resulted in, factories in the tax free zones,
to start up third party manufacturing. Under this these factories produced goods under
the brand names of other parties on job work basis.
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As SMEs wrestled with the tax structure, they were also scrambling to meet the 1 July
deadline for compliance with the revised Schedule M Good Manufacturing Practices
(GMP). While this should be beneficial to consumers and the industry at large, SMEs
have been finding it difficult to find the funds to upgrade their manufacturing plants,
resulting in the closure of many facilities. Others invested the money to bring their
facilities to compliance, but these operations were located in non-tax-free states,
making it difficult to compete in the wake of the new excise tax.
Challenges:-
Even after the increased investment, market leaders such as Ranbaxy and Dr. Reddy’s
Laboratories spent only 5–10% of their revenues on R&D, lagging behind Western
pharmaceuticals like Pfizer, whose research budget last year was greater than the
combined revenues of the entire Indian pharmaceutical industry. This disparity is too
great to be explained by cost differentials, and it comes when advances in genomics
have made research equipment more expensive than ever. The drug discovery process
is further hindered by a dearth of qualified molecular biologists. Due to the disconnect
between curriculum and industry, pharma in India also lack the academic
collaboration that is crucial to drug development in the West and so far.
Relationship between pharmaceuticals and biotechnology:-
Unlike in other countries, the difference between biotechnology and pharmaceuticals
remains fairly defined in India. Bio-tech there still plays the role of pharma’s little
sister, but many outsiders have high expectations for the future. India accounted for
2% of the $41 billion global biotech market and in 2003 was ranked 3rd in the Asia-
Pacific region and 11th in the world in number of biotech. In 2004-5, the Indian
biotech industry saw its revenues grow 37% to $1.1 billion. The Indian biotech
market is dominated by bio pharmaceuticals; 75% of 2004–5 revenues came from bio-
pharmaceuticals, which saw 30% growth last year. Of the revenues from bio-
pharmaceuticals, vaccines led the way, comprising 47% of sales. Biologics and large-
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molecule drugs tend to be more expensive than small-molecule drugs, and India hopes
to sweep the market in bio-generics and contract manufacturing as drugs go off patent
and Indian companies upgrade their manufacturing capabilities.
Most companies in the biotech sector are extremely small, with only two firms
breaking 100 million dollars in revenues. At last count there were 265 firms registered
in India, over 75% of which were incorporated in the last five years. The newness of
the companies explains the industry’s high consolidation in both physical and
financial terms. Almost 50% of all biotech are in or around Bangalore, and the top ten
companies capture 47% of the market. The top five companies were homegrown;
Indian firms account for 62% of the bio-pharma sector and 52% of the industry as a
whole.[4,46] The Association of Biotechnology-Led Enterprises (ABLE) is aiming to
grow the industry to $5 billion in revenues generated by 1 million employees by 2009,
and data from the Confederation of Indian Industry (CII) seem to suggest that it is
possible.
Comparison with the US:-
The Indian biotech sector parallels that of the US in many ways. Both are filled with
small start-ups while the majority of the market is controlled by a few powerful
companies. Both are dependent upon government grants and venture capitalists for
funding because neither will be commercially viable for years. Pharmaceutical
companies in both countries have recognised the potential effect that biotechnology
could have on their pipelines and have responded by either investing in existing start-
ups or venturing into the field themselves. In both India and the US, as well as in
much of the globe, biotech is seen as a hot field with a lot of growth potential.
Relationship with IT:-
Many analysts have observed that the hype around the biotech sector mirrors that of
the IT sector. Biotech colleges have been popping up around the country eager to
service the pools of students that want to take advantage of a growing industry. The
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International Finance Corporation, the private investment arm of the World Bank,
called India the "centerpiece of IFC’s global biotech strategy." Of the $110 million
invested in 14 biotech projects investment globally, the IFC has given $43 million to
4 projects in India. According to Dr. Manju Sharma, former director of the
Department of Biotechnology, the biotech industry could become the "single largest
sector for employment of skilled human resource in the years to come". British Prime
Minister Tony Blair was similarly impressed, citing the success of India’s biotech
industry as the reason for his own country’s own biotech opportunities. Malaysia is
also looking to India as an example for growing its own biotech industry.
Support Indian Government:-
The Indian government has been very supportive. It established the Department of
Biotechnology in 1986 under the Ministry of Science and Technology. Since then,
there have been a number of dispensations offered by both the central government and
various states to encourage the growth of the industry. India’s science minister
launched a program that provides tax incentives and grants for biotech start-ups and
firms seeking to expand and establishes the Biotechnology Parks Society of India to
support ten biotech parks by 2010. Previously limited to rodents, animal testing was
expanded to include large animals as part of the minister’s initiative. States have
started to vie with one another for biotech business, and they are offering such
goodies as exemption from VAT and other fees, financial assistance with patents and
subsidies on everything ranging from investment to land to utilities.
Foreign investment:-
The government has also taken steps to encourage foreign investment in its biotech
sector. An initiative passed earlier this year allowed 100% foreign direct investment
without compulsory licensing from the government. In April, a delegation headed by
the Kapil Sibal, the minister of science and technology and ocean development,
visited five cities in the US to encourage investment in India, with special emphasis
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on biotech. Just two months later, Sibal returned to the US to unveil India’s biotech
growth strategy at the BIO2005 conference in Philadelphia.
Challenges:-
The biotech sector faces some major challenges in its quest for growth. Chief among
them is a lack of funding, particularly for firms that are just starting out. The most
likely sources of funds are government grants and venture capital, which is a
relatively young industry in India. Government grants are difficult to secure, and due
to the expensive and uncertain nature of biotech research, venture capitalists are
reluctant to invest in firms that have not yet developed a commercially viable product.
The government has addressed the problem of educated but unqualified candidates in
its Draft National Biotech Development Strategy. This plan included a proposal to
create a National Task Force that will work with the biotech industry to revise the
curriculum for undergraduate and graduate study in life sciences and biotechnology.
The government’s strategy also stated intentions to increase the number of PhD
Fellowships awarded by the Department of Biotechnology to 200 per year. These
human resources will be further leveraged with a "Bio-Edu-Grid" that will knit
together the resources of the academic and scientific industrial communities, much as
they are in the US.
Development In India :-
The Indian Pharmaceutical Industry today is in the front rank of India’s science-based
industries with wide ranging capabilities in the complex field of drug manufacture and
technology.
Facts about the Role of Pharmaceutical Industry in Indian Gross Domestic Product
(GDP):
Indian Pharmaceutical Industry ranks fourth in the world, pertaining to the volume of
sales.
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The estimated worth of the Indian Pharmaceutical Industry is US$ 6 billion.
The growth rate of the industry is about 13% per year.
Almost most 70% of the domestic demand for bulk drugs is catered by the Indian
Pharma Industry.
The Pharma Industry in India produces around 20% to 24% of the global Generic
drugs.
The Indian Pharmaceutical Industry is one of the biggest producers of the Active
Pharmaceutical Ingredients (API) in the international arena.
The Indian Pharma sector leads the science-based industries in the country.
Around 40% of the total pharmaceutical produce is exported.
55% of the total exports constitute of formulations and the other 45% comprises of
bulk drugs.
The Indian Pharma Industry includes small scaled, medium scaled, large scaled
players, which totals nearly 300 different companies.
As per the present growth rate, the Indian Pharma Industry is expected to be a US$ 20
billion industry by the year 2015.
The Indian Pharmaceutical sector is also expected to be among the Top Ten Pharma
based markets in the world in the next ten years
The sales of the Indian Pharma Industry would worth US$ 43 billion within the next
decade.
The multinational companies, investing in research and development in India may
save up to 30% to 50% of the expenses incurred
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The cost of hiring a research chemist in the US is five times higher than its Indian
counterpart.
The manufacturing cost of pharmaceutical products in India is nearly half of the cost
incurred in US.
The cost of performing clinical trials in India is one tenth of the cost incurred in US.
The cost of performing research in India is one eighth of the cost incurred in US.
Following the de-licensing of the pharmaceutical industry, industrial licensing for
most of the drugs and pharmaceutical products has been done away with.
Manufacturers are free to produce any drug duly approved by the Drug Control
Authority. Technologically strong and totally self-reliant, the pharmaceutical industry
in India has low costs of production, low R&D costs, innovative scientific manpower,
strength of national laboratories and an increasing balance of trade. The
Pharmaceutical Industry, with its rich scientific talents and research capabilities,
supported by Intellectual Property Protection regime is well set to take on the
international market.
ADVANTAGE IN INDIA :-
Competent workforce: India has a pool of personnel with high managerial and
technical competence as also skilled workforce. It has an educated work force and
English is commonly used. Professional services are easily available.
Cost-effective chemical synthesis: Its track record of development, particularly in
the area of improved cost-beneficial chemical synthesis for various drug molecules is
excellent. It provides a wide variety of bulk drugs and exports sophisticated bulk
drugs.
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Legal & Financial Framework: India has a 53 year old democracy and hence has a
solid legal framework and strong financial markets. There is already an established
international industry and business community.
Information & Technology: It has a good network of world-class educational
institutions and established strengths in Information Technology.
Globalization: The country is committed to a free market economy and globalization.
Above all, it has a 70 million middle class market, which is continuously growing.
Consolidation: For the first time in many years, the international pharmaceutical
industry is finding great opportunities in India. The process of consolidation, which
has become a generalized phenomenon in the world pharmaceutical industry, has
started taking place in India.
THE GROWTH SCENARIO:-
India's US$ 3.1 billion pharmaceutical industry is growing at the rate of 14 percent
per year. It is one of the largest and most advanced among the developing countries.
Over 20,000 registered pharmaceutical manufacturers exist in the country. The
domestic pharmaceuticals industry output is expected to exceed Rs260 billion in the
financial year 2002, which accounts for merely 1.3% of the global pharmaceutical
sector. Of this, bulk drugs will account for Rs 54 bn (21%) and formulations, the
remaining Rs 210 bn (79%). In financial year 2001, imports were Rs 20 bn while
exports were Rs87 bn.
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The above graph shows the percentage of pharmaceutical products export by various
countries.
(SOURCE Competitiveness of the Indian pharmaceutical industry in the new product
patent regime a report by FICCI)
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CHAPTER :- 2
INTRODUCTION TO CADILA HEALTH CARE
LIMITED
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A first for the nation...
Cadila Healthcare Limited
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2.1 History and Development :-
The company history sections lists out major chronological events that happened to
the company.
1995The Company was incorporated as Cadila Healthcare Private Ltd. on May 15, under
the company act, 1956 and subsequently the Company was converted into a public
company and then renamed as Cadila Healthcare Ltd. effective from Juy 17, 1996.
The name "Cadila" shall be used only for "Cadila Healthcare Limited" (Zydus
Cadila), "Cadila Pharmaceuticals Limited" (CPL) and "Cadila Laboratories Limited"
(CLL).
The Company is flagship company of Zydus Cadila Group.
The Company's operations include pharmaceuticals (human formulations, veterinary
formulations and bulk drugs); diagnostics, herbal products, skin care products and
other OTC products.
- The Company has 6 subsidiaries Indon Healthcare Ltd., Zydus Pharmaceuticals Ltd.,
and Zydus Healthcare S.A. (Pvt) Ltd., South Africa.
- Zydus Cadila signed an agreement with Anda Biologicals, France, for Marketing
and distribution of diagnostic kits. Anda to appoint a max. of two distributors in India.
1996
- Zydus Cadila signed an agreement with Centeon L.L.C., USA and Centeon Pharama
GMBH, Germany for Exclusive rights to sell and distribute plasma products in India
and Nepal.
- In May, Zydus Cadila signed an agreement with Acta Services Srl., Rome for
distribution of Diagnostic instrument Acto 1 Analyser manu. By Acta.
- In June, Zydus Cadila signed an agreement with China Resources Gulin Pharma,
Works, China, for exclusive supply of Artesunate Granules to Zydus Cadila.
- In July, Zydus Cadila signed an agreement with Shimizu Chemical Corporation,
Japan, for Marketing of specified products by Zydus Cadila in India.
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1997
- A Scheme of Arrangement and Amalgamation was sanctioned by honorable High
Court of Gujarat by order passed on May 2 issued on August 16th.
- Zydus Cadila would issued 1,48,423 fully paid-up equity shares of Rs 10/- each to
the shareholders of Patel Group in exchange for the assets transferred to them of
Transferor companies.
- Zydus Cadila has also tied-up with Regional Research Laboratory Jammu, to
develop Enzymatic Resolution for Paroxetine HCL and some other Enzymatic
products.
1998
- In February, Zydus Cadila signed an agreement with Apotex SA Pty. Ltd. for
manufacturer of Amoxycillin, Ampicillin, Co - trimoxazole, paracetamol.
- Zydus Cadila has also entered into a joint venture with Korea Green Cross
Corporation, Korea, to manufacture and market recombinant Hepatitis B vaccine in
India.
1999
- In April, Zydus Cadila signed an agreement with Ethical Holdings Plc, Beta Pharma,
and Ethical Pharma South America S.A. for Know-how Licence Agreement to
manufacture, marketing and sell transdermal pharmaceutical formulations.
- In September, Zydus Cadila signed an agreement with Cherry Valley Farms Ltd.,
UK for supply of vaccine eggs.
- Zydus Cadila has entered into a 50:50 joint venture with Byk Gulden of Germany, a
renowned, research-oriented Pharma company of Germany and the world-wide patent
holder of the novel proton pump inhibitor, "Pantoprazole".
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- During the year under report, the Company had issued 2,00,000 12% Cumulative
Redeemable Preference shares of Rs. 100/- each fully paid to the members of the
Company, which are redeemable at par on 1st July, 2001.
- During the year under report, Indon Healthcare Limited and Zydus Aqrovet Limited,
have become wholly owned subsidiaries of the company.
- During the year under report, the Company has undertaken to set up a new project
for manufacturing the bulk drug-Losartan at Ankleshwar.
- The Company laid the foundation for a new feed supplement plant, at Vatwa. The
feed supplement for poultry and cattle has been developed by tie company's R & D
bio-tech department.
- The Company has set up a joint venture company to manufacture the break-through
molecule Pantoprazole. The Company is also undertaking discovery research projects
with Byk Gulden as a pan of the Joint Venture.
- The Company has entered into a technical-cum-marketing tie-up with the Swiss
Serum and Vaccine Institute, Berne, Institute to launch a range of vaccines in India.
- The Company has entered into a joint venture with the Haffkine institute to
undertake research in the field of human vaccine and equine sera.
- A new State-of-Art Research & Development centre being set-up with the capital
cost of approximately Rs. 25.00 crores in the Village: Moraiya. Taluka:Sanand, Dist.:
Ahmedabad.
- During the year under report the Company has launched several new products in the
market : Vac Typh, HB Vac, Xylodac, Losartan, Losacar was the first to be launched
in India & Matergam P.
- The Company has set up manufacturing premises to manufacture the feed
supplement - Improval at GIDC Vatwa.
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- Shir Pranlal Bhogilal was appointed as an additional Director of the Company with
effect from 15th December, 1998 pursuant to Section 260 of the Companies Act,
1956.
- Shri Mukesh M. Patel Director of the Company retires by rotation and he is eligible
for reappointment.
- A new welfare policy has been introduced for employees of the Company.
2000
- The Company is setting up wholly owned subsidiaries abroad and plans to acquire
overseas companies to market products.
- The Company has entered into License Agreement for phased manufacture and
technical know-how transfer with Swiss Serum and Vaccine Institute, Switzerland for
the manufacture of Purified Cuck Embroy Vaccine.
- The Country's fifth largest pharmaceutical company, is considering offering stocks
to its employees through an employees' stock option scheme.
- The Company has launched two drugs for the treatment of human
immunodeficiency virus.
- The Bulk Drugs at Ankleshwar in Gujarat has an ISO 9002 certification for the
manufacture and supply of a number of molecules.
- Public Issue of 1,48,86,000 No. of Equity shares ("Issue") of Rs 5/- each issued for
cash at a premium of Rs [] per share aggregating Rs [] million. The Issue includes a
Book Built Portion of 1,33,97,400 No. of equity shares and a Fixed price portion of
14,88,600 No. of Equity Shares.
- Authorised share capital of the Company is Rs 500 million divided into 9,00,00,000
No. of Equity Shares of Rs 5/- each and 5,00,000 Preference Shares of Rs 100/- each.
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- During the year under report, the Company has been recognise as a "Prestigious
Unit" and granted adhoc eligibility for Sales Tax deferment by the Industries
Commissionerate, Gandhinagar, under New Incentive Policy - Capital Investment
Incentive to Premier/ Prestigious unit scheme 1995-2000.
- During the year under report Zydus Pharmaceuticals Limited and Zoom Properties
Limited have become Wholly Owned Subsidiaries of the Company.
- The Company has formed a JV Company in the name of Zydus Byk Healthcare
Limited with an equal participation in collaboration with Byk Gulden Lomberg
Chemische Fabrik GmbH, Germany, for manufacturing of Bulk Drugs, Formulations
and R & D.
- The Company has also formed a JV Company in the name of Sarabhai Zydus
Animal Health Ltd. in collaboration with Ambalal Sarabhai Enterprises Ltd., Baroda,
with an equal participation to carry on the business of animal health segments.
- The company has also entered into a technical collaboration with Ethical Holdings
of U.K. to manufacture and market transdermal patches in India.
- The Company launched block-buster molecules Atorvastatin (Atorva), Lamivudine
(Lamidac 100) and Celecoxib (Zycel), Meloxicam (Mel-OD) and Carvedilol (Carvil)
during the year.
- The company was the first to launch the anti-hypertensive drug Losartan in India.
- Currently ranked 6th largest pharmaceutical company in India, Cadila Healthcare is
one of the fastest growing pharmaceutical companies in the country.
- It has also entered into a technical collaboration with Ethical Holdings of the UK to
manufacture and market transdermal patches in India.
- Zydus Cadilla has also entered into a technical collaboration with Ethical Holdings
of the UK to manufacture and market transdermal patches in India.
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- Cadlia Healthcare (CHL) has signed an MoU with Rs 54 crore Recon Limited,
whereby it will acquire all the 8 formulation brands of the Bangalore based comapny,
as well as its distribution network.
- The new company, `Recon Healthcare Ltd' is now a subsidiary of Zydus Cadila with
Zydus holding 90 per cent stake.
- Cadila Healthcare Ltd is setting up wholly owned subsidiaries abroad and plans to
acquire overseas companies to market products.
- Cadila also launched zidovudine, which is imported and marketed under the brand
name Zydowin. Zidovudine, commonly called AZT, is an AIDS-retardant drug made
by Glaxo Wellcome.
- Zydus Alidac, the marketing arm of Cadila Healthcare Ltd., has launched
www.penegra.org.
-The Ahmedabad-based Cadoila Healthcare has completed the phase-III clinical trials
and the bioequivalence study of the wonder drug sildenafil citrate (Viagra).
2001
- Cadila Healthcare has signed a three year collaborative R&D agreement with Danish
biotech company Pantheco in the field of anti-bacterials.
- The neurosciences division launched by the company has introduced anxiolytic
paroxetine for the first time in the country.
- Cadila Healthcare Ltd has posted a 14.75 per cent increase in net profit at Rs 21.86
crore for the quarter ended September 30, 2001.
2002
-Cadila Healthcare Ltd has informed BSE that at the meeting of the Board of
Directors of the company held on August 20, 2002 it has been decided to issue/allot
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Secured Redeemable Non Convertible Debentures for an aggregate face value of Rs
700 million by private placement basis at an interest rate of 8.40% p.a.
2003
-Mr.UpenShah has been designated as the Company Secretary and Compliance
Officer of Cadila Healthcare Ltd.
-Zydus Cadila, the ahmedabad based healthcare has bagged global marketing rights of
an anti-rabies vaccine of vaxirab a swiss company Berna Biotech.
-Cadila Healthcare receives Mumbai High court approval for the scheme of
amalgamation with German Remedies Ltd and Zoom Properties Ltd.
-Cadila Healthcare Ltd has acquired US base Alpharma Inc's French Subsidiary
Alpharma SAS France for a consideration of Euro 5.5 million.
-Mr.H.K.Bilpodiwala, Mr.H.Dhanarajgir and Mr.A.S Diwanji have been appointed as
the additional directors on the board of the company.
-Zydus Cadila Healthcare Ltd has signed a pact with Schering AG, Germany which
allows the Indian Pharmaceuticals major to market Schering's patented products in
India.
-Duphar Interfran, a subsidiary of Fermenta Biotech Ltd signed an agreement with
Cadila Ltd for the sale of FBL's global patents of Chiral Building blocks and process
teechnology for the manufacture of Lisinopril and Benazepril.
-Zydus forges marketing pact with Schering
2004
-Zydus Cadila sets up Zydus Pharmaceuticals USA, Inc
-Zydus Cadila inks strategic pact with Boehringer Ingelheim
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-Zyndus Altana Healthcare - the JV between Altana Pharma AG and Zyndus Cadila,
has been accredited with the ISO 9001-2000 certificate.
2005
- Zydus Cadila receives approval from the USFDA to market the anti-hypertensive
drug, Atenolol, and an anti-infective drug, Clindamycin on 31 Jan and 1 Feb.
-Zydus Cadila unveils 'Pitavastatin' to control cholesterol on February 21, 2005
-Cadila ties up with Tyco unit to sell generic drugs in US
- Launches NuPatch - India's first indigenously manufactured Diclofenac transdermal
patch for pain relief.
-Cadila Healthcare & Mayne signs agreement to set up JVC to manufacture specialty
oncology products
-Cadila Healthcare - German Remedies launches Fludara Oral for Lymphocytic
Leukaemia
-Zydus Cadila receives tentative approval for Divalproex Sodium DR Tablets from
US FDA
-Cadila Healthcare receives approval for Promethazine Tablets from USFDA
-Cadila Healthcare enters into JV with BSVL
2006
-Zydus Cadila forges alliance with French firm
-Zydus Cadila receives USFDA approval for Simvastatin Tablets
-Zydus Cadila to acquire Nutralite - India's largest selling cholesterol-free margarine
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-Sarabhai Zydus to roll out immuno-diagnostics kits
-Cadila Healthcare has given the Bonus in the Ratio of 1:1
2007
-Cadila Healthcare Ltd on April 19, 2007 has announced the acquisition of Nippon
Universal Pharmaceutical Ltd.
- Cadila Healthcare Ltd has announced that its second overseas acquisition this year,
the Company signed an agreement to acquire 100% stake in Quimica e Farmaceutica
Nikkho do Brasil Ltda.
-Zydus Cadila acquires Nippon Universal, strengthens its presence in Japan
-Zydus Cadila, the first to launch revolutionary anti-obesity drug Slimona in India
-Zydus Cadila acquires Brazilian Company Nikkho
2008
-Zylus Cadila, Karo Bio to jointly develop new drugs
-Zydus Cadila & Karo Bio of Sweden sign research agreement for a novel drug to
treat inflammatory diseases
-Zydus Cadila acquires Etna Biotech, a subsidiary of Crucell N.V.
-Zydus scores with first day launch of Venlafaxine Hydrochloride in the US
2009
-Zydus Cadila announces research collaboration to discover and develop new
cardiovascular medicines
-Zydus Research Centre Receives AAALAC Accreditation
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2010
-CHL announces Bonus Shares in the ratio of 1:2
- India unveiled its first indigenous H1N1 vaccine, which was developed by drug firm
Cadila Healthcare and this vaccine will provide immunity from the H1N1 virus strain
for one year.
2011
-Company has signed an Agreement with Bayer HealthCare to set up 50:50 Joint
Venture Company in the name of "Bayer Zydus Pharma
-Cadila gets USFDA nod for diabetes drug trial
-Cadila Health acquires Bremer Pharma from ICICI Venture
2012
-"Cadila Healthcare enters into a settlement and license agreement with Somaxon for
Silenor"
-Cadila Healthcare gets USFDA nod for Aripiprazole orally disintegrating tablets
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2.2 COMPANY PROFILE :-
Founder :- Late Mr. Raman Bhai B. Patel .
Key Executives :-
Chairman & Managing Director :- Pankaj R Patel
Deputy Managing Director :- Sharvil P Patel
Director :- Mukesh M Patel
Director :- H Dhanrajgir
Board Of Directors:-
Chairman & Managing Director :- Pankaj R Patel
Deputy Managing Director :- Sharvil P Patel
Director :- Mukesh M Patel
Director :- H Dhanrajgir
A S Diwanji
Company Secretary :- Upen H Shah
Director :- Nitin Raojibhai
Desai
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Bankers :-Bank of Baroda BNP Paribas Citibank N A Credit Agricole Cor & Inv Export-Import Bk of India HDFC Bank Ltd ICICI Bank Ltd IDBI Bank Standard Chartered Bank State Bank of India
Registrars:Sharepro Services India P LtdSamhita ComplexPlot No 13 ABSaki Naka Andheri(E)Mumbai-400072
Mission :-
A mission to create healthier communities
Zydus Cadila is dedicated to life…
In all its dimensions. Our world is shaped by a passion for innovation, commitment to partners and concern for people in an effort to create healthier communities, globally.
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Vision :-
A vision that unleashes value
To be a leading global healthcare provider with a robust product pipeline; Stepping beyond the billion, we shall achieve sales of over $3bn by 2015 and be a research-driven pharmaceutical company by 2020.
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Logo :-
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2.3 Stock performance history :-
Last one year stock performance of Cadila healthcare limited and comparison with Ranbaxy and sun pharma .
Stock performance Cadila healthcare limited of last one year and compare it with ranbaxy lab and sun pharma Cadila Health care has give completely upside of stock performance in last one year .
As performance wise Cadila Healthcare limited is on 4th rank from other competitors .Peer Competition :-Company Name Net Sales (Rs. Cr ) Net Profit (Rs. Cr ) Total Assets (Rs. Cr)Dr Reddys Labs 8,434.00 1,265.47 9,372.50Cipla 8,202.42 1,507.11 9,835.33Lupin 7,122.51 1,260.43 5,402.00Ranbaxy Labs 6,303.54 -1,776.85 6,685.68Aurobindo Pharm 5,425.10 495.99 5,714.06Cadila Health 3,675.70 466.64 4,557.00Sun Pharma 2,432.14 133.25 7,832.01
-4000
-2000
0
2000
4000
6000
8000
10000
12000
Net Sales
Net Profit
Total Assets
Above Chart showing Cadila health care is stable in competition to other compeititor and net profit is also higher than others by considering net assets and net sales . It is sign of good and efficient management of Cadila Healthcare limited .
Dividend
Year End Dividend Per Share Dividend(%) Remark
11-Jun-13 7.5 150.0 Interim
26-Jul-12 7.5 150.0 Final
07-Jul-11 6.3 125.0 Final
15-Jul-10 5.0 100.0 Final
16-Jul-09 4.5 90.0 Final
10-Jul-08 4.5 90.0 Final
12-Jul-07 4.0 80.0 Final
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14-Jul-05 0.0 120.0 Final
BonusDate Ratio
05-Apr-10 1:2
30-Aug-06 1:1
2.4 Products plants :-
From nine pharmaceutical production operations in India as well as a Zydus Cadila
develops and manufactures a large range of pharmaceuticals as well as diagnostics,
herbal products, skin care products and other OTC products.
The company makes active pharmaceutical ingredients at three sites in India:
Ankleshwar plants – Zydus Cadila's plant complex at Ankleshwar in Bharuch
District of Gujarat, has been producing drug material since 1972. There are around 12
plants in the complex, which is ISO 9002 and ISO 14001 certified approved by the
U.S. Food and Drug Administration (FDA). Total plant capacity at Ankleshwar is
around 180 million tonnes.
Vadodara plant – Zydus Cadila's plant at Dhabhasa, in Vadodara District's Padra
taluka (in the eastern part of the district) in Gujarat, was commissioned in 1997 by a
company called Banyan Chemicals, and acquired by Zydus Cadila in 2002. The plant
has a 90 million tonne capacity. It is approved by the U.S. FDA and is also approved
to World Health Organization (WHO) good manufacturing practice (GMP)
guidelines.
Patalganga plant – Zydus Cadila acquired an API plant at Patalganga in Maharashtra
state, 70 km from Mumbai, about 859 km from Nagpur, in the 2001 German
Remedies deal. This plant operates to WHO GMP standards.
Others
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Navi Mumbai plant – This operation, at Navi Mumbai in Maharashtra, is a 50/50
joint venture with Nycomed Pharma of US, makes intermediates of the drug
pantoprazole.
Mumbai Business Office – This office houses Business Unit India - 2 or German
Remedies. This office belonged to German Remedies (I) Ltd. This company was
acquired in 2000. This was the biggest takeover in the History of Indian
Pharmacological Industry. German Remedies is now a Registered Trademark of
Cadila Healthcare Ltd.
Goa plants – The company's plants at Ponda in the southern Indian state of Goa do
formulation work as well as manufacture oncology drugs and a herbal laxative
branded Agiolax based on Psyllium seeds. These Plants belonged to German
Remedies (I) Ltd. too and now are part of Business Unit - Manufacturing of the
Company.
Baddi plant – In 2004 Zydus commissioned at formulation plant at Baddi, in
Himachal Pradesh state of northern India. The Baddi plant makes solid oral
pharmaceuticals.
Sikkim plant – In 2008 Zydus commissioned at formulation plant at Majhitar, in
Sikkim state of eastern India. The Sikkim plant makes solid oral pharmaceuticals and
hormones. This plant now caters almost all Domestic Formulation needs of the
Company.
In Gujarat, India
Dabhasa plant – Zydus Cadila's API/Bulk Drug Plant in a village about 20
kilometers South from Vadodara houses one of the largest process research (API)
centers in the country. This plant belonged to Banyan Chemicals which was acquired
by Zydus in 2003
Vatwa plant – Zydus Cadila's plant at Vatwa, an industrial suburb of Ahmedabad,
makes products for Animal Health care division of the company.
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Zyfine plant (Changodar) – Zydus Cadila's plant at Changodar, 20 kilometres from
Ahmedabad on the city's outskirts, manufactures fine chemicals. Zydus is current
constructing a facility at Changodar to make vaccines for hepatitis B and rabies.
Zydus Research Centre (ZRC) (Changodar) – Zydus's NCE, NME, MBE research
facility is the largest of its kind in Indian, with more than 500 post graduate scientists
it is working towards the prosperous future of the company and Indian Pharmaceutical
This ratio is also known as absolute liquid ratio. This ratio will reveal how much
percentage of current liabilities is held in cash. 3% or 0.03 is considered as ideal. In
the year 2010 company’s cash ratio was 0.014, In the year 2011, it slightly increased
to 0.02. In 2012 and 2013 is 0.13 and 0.12
Company’s cash ratio is satisfactory and is stable. Improvement was seen.
ACTIVITY RATIOS :-
WORKING CAPITAL TURNOVER RATIOWorking Capital Turnover Ratio indicates the velocity of utilization of net working
capital. It indicates the number of times net W.C., is turned over in the course of a
year. It is a measure of the firm’s efficiency to utilize its working capital. A higher
ratio indicates efficient utilization of working capital and a low ratio indicates
otherwise. However a very high ratio is not a good situation for any firm and hence
care must be taken while interpreting the ratio.
Particulars Formula 2009-10 2010-11 2011-12 2012-13Working Capital Turnover Ratio
Sales/ 1,885.60
2,179.10
3,152.20
3,675.70
Working Capital 522.8 684.8 888.3 1,316.20
Ratios 3.6 3.18 3.54 2.79
0
0.5
1
1.5
2
2.5
3
3.5
4
2009-10 2010-11 2011-12 2012-13
Working Capitalturnover Ratio
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Interpretation :-
This ratio indicates the velocity of utilization of net working capital. The main
purpose of computing this ratio is to find out to what extent the working capital is
rotated in the business with in a period of one year. In the year 2010, this ratio was
3.60. But in the year 2011, it has decreased to 3.18. In the year 2012, it marginally
increased to 3.54 and in the year 2013 it further decreased to 2.79 times.
It indicates the firm’s ability to generate sales per rupee of working capital. In
general, higher the ratio, the more efficient the management and utilization of
working capital.
Management Efficiency Ratios
Inventory Turnover Ratio :-A ratio showing how many times a company's inventory is sold and replaced over a
period. The days in the period can then be divided by the inventory turnover formula
to calculate the days it takes to sell the inventory on hand or "inventory turnover
days."
Although the first calculation is more frequently used, COGS (cost of goods sold)
may be substituted because sales are recorded at market value, while inventories are
usually recorded at cost. Also, average inventory may be used instead of the ending
inventory level to minimize seasonal factors.
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This ratio should be compared against industry averages. A low turnover implies poor
sales and, therefore, excess inventory. A high ratio implies either strong sales or
ineffective buying.
High inventory levels are unhealthy because they represent an investment with a rate
of return of zero. It also opens the company up to trouble should prices begin to fall.
Things to Remember A low turnover is usually a bad sign because products tend to
deteriorate as they sit in a warehouse. Companies selling perishable items have very high turnover. For more accurate inventory turnover figures, the average
inventory figure, ((beginning inventory + ending inventory)/2), is used when computing inventory turnover. Average inventory accounts for any seasonality effects on the ratio.