compant profile 2010@ Ranbaxy

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2010

Pawan Sharma PGPM/0911/033

2009-2011

Ranbaxy

International

Academy

of

Management

&

Entrepreneurship

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Ranbaxy

Topics

Introduction

Board of directors

History

Financial status

Research & development

Product

Innovation

Market

Worldwide operation

Strategy

Vision & Aspiration

SWOT analysis

People

Environmental Awards

Current event

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Just think you are having headache what is the

first thing you do? Take a tablet and feel relaxed after a

quick spam of time, right .Now think what if there wasn’t

any medicine to get relief from headache or any pain. What

would doctor’s prescribed to cure diseases .Thanks to those

who work so hard to save our world by making the medicines

.One of the company which has contributed its life is

Ranbaxy Laboratories Limited.

INTRODUCTION

Ranbaxy Laboratories Limited, India‟s largest pharmaceutical company, is an integrated, research based, international pharmaceuticals Company, producing wide range of quality, affordable generic medicines, trusted by healthcare professionals and patients across geographies. Ranbaxy exports it product to125 countries. The company is ranked amongst the top ten global generic companies and has presence in 23 of the top 25 pharama markets of the world. The company with global footprint in 49 countries, world-class manufacturing facilities in 11 & a diverse product portfolio, is rapidly moving towards global leadership, riding on its success in world‟s emerging & developed markets. The CEO of the company- Malivinder Mohan Singh. Board of Directors:- At the helm of the entire operations is the experience and able direction of the people who make it all happen. Ranbaxy acknowledges their inspiring stewardship and indefatigable work.

Board of Directors Left to Right : Mr. Ramesh L Adige, Mr. Sunil Godhwani, Dr P S Joshi, Mr. Vivek Bharat Ram,

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Dr Brian W Tempest, Mr. Gurcharan Das, Mr. Atul Sobti, Mr. Harpal Singh, Mr. Malvinder Mohan Singh, Mr. Surendra Daulet-Singh, Mr. Ravi Mehrotra, Mr. Shivinder Mohan Singh, Mr. Vinay K Kaul, Mr. Nimesh N Kampani, Mr. Vivek Mehra

HISTORY

Ranbaxy was started in by Ranjit Singh and Gurbax Singh in 1937 as a distributor for a Japanese company Shionogi. Interestingly the name Ranbaxy is a portmanteau word from the names of its first owners Ranjit & Gurbakshi Bhai Mohan Singh bought the company in1952 from his cousins Rangit Singh & Gurbax Singh. After Bhai Mohan Singh‟s son Parvinder Singh joined the company in 1967, the company saw a significant transformation in its business & scale.

Year Activity 1961 Company Incorporated 1973 Ranbaxy goes public

A multipurpose chemical plant is setup for the manufacture of Apl‟s at Mohali in India

1977 Ranbaxy „s first joint venture in Nigeria is setup 1985 Research foundation is established

Stancore ,Ranbaxy 2nd pharmaceutical marketing division starts functioning

1987 Production starts –up at the modern Apl‟s plant at Punjab makes Ranbaxy the country largest manufacturer of antibiotics

1990 Ranbaxy is granted its first us patent for Daxcyline 1992 Company enters into an agreement with Eli Lilly& Co.

Of USA for setting up a joint venture in India to market select Lilly products.

1993 Company enters into an agreement to setup a joint venture in china Ranbaxy enunclates its corporate mission “to become a research based international pharmaceutical company

1994 The new research centre at gurgaon (near Delhi ) becomes fully operational

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Established regional HQ in UK & USA

1997 Ranbaxy laboratories Ltd. Crosses a sales turnover of Rs.10, 000 million with its export reaching an all time high of 5000 million.

1998 Ranbaxy enters USA, world largest pharmaceutical‟s market with product under its own name.

Ranbaxy filled its First Investigational New Drug (IND) application with the drug controller general of India (DCGI) for approval to conduct Phase I clinical trials

1999 Bayer AG ,Germany & Ranbaxy sign an agreement where Bayer obtains exclusive development & worldwide marketing rights to an oral once daily formulation of Cipro Floxacin, originally developed by Ranbaxy

2000 Ranbaxy files its second IND application in India Ranbaxy forays into brazil ,the largest pharmaceutical market in south America

2001 Ranbaxy US crosses Sales of US$ 100 million, fastiest growing company in the US.

2002 Ranbaxy files its 3rd IND application in India 2003 Ranbaxy receive The Economics Times Award for

corporate excellence for the company of the year Ranbaxy & Glaxo smith kline (GSK)enter into a global alliance for drug discovery & development

2004 Ranbaxy began operation in France as a top 10 generic company, after acquiring a wholly owned subsidiary The company joined the Elite club of billion dollar companies, achieving global sales of US$ 1bm in February 2004.

2005 Ranbaxy‟s antimalaria molecule successfully completes proof of concept phase It launches operation in Canada. Ranbaxy receive India‟s first approve from USFDA for an anti-retroviral (ARV) drug under the U.S. president emergency plan for AIDS relief (PE$PFAR)

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FINANCIAL

Ranbaxy was incorporated in 1961 & went public in 1973.For the year 2007, the companyglobal sales at US$ 1619MN reflecteda growth of 21%profit after tax at US$ 190Mn registered an increase of 67% over the previous year. The company has balanced mix of revenues from developed & emerging markets & is well offered by these markets. For the year 2007, North America, the company largest market contributed sales of US$ 419 Mn, contributing 26% of total sales followed by Europe garnering US$ 365Mn, The company‟s business in Asia was head by a strong performance in India that clocked sales of US$ 301 Mn with market leadership backed by its strong brand –building skills. Financials

Balance Sheet

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Ten Years Status

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(Rscrore) 2007 2006 2005 2004

Total income 4,376 4,005 3,612 3,732

PBT 993 639 303 764

PAT 623 386 231 547

Equity capital 187 186 186 186

Eps (Rs) 16.71 10.37 6.22 29.47

1) Sales turn over

Year 2004 2005 2006 2007 2008

amount(cr) 3,865.86 3,727.05 4,218.98 4,344.39 4,676.21 Interpretation

In the above table, Amount (Crores) is the sales turnover achieved by the company during the last five years.

The sales Turnover has increased from 3, 865.86 in the year 2004 to 4,676.21 in the year 08. When we compare the years 05, 06, 07 – the year2005 has the least turnover i.e., 3,727.05 & 2008 has the highest turnover 4,676.21

2) Current ratio

Year 2004 2005 2006 2007 2008

Ratio 1.31 0.92 0.96 0.83 1.16

Interpretation In the above table, Current Ratio of the company for five years is

depicted.

sales turnover

0.00 1,000.0

0

2,000.0

0

3,000.0

0

4,000.0

0

5,000.0

0

2004

2005

2006

2007

2008

year

amou

nt

sales turnover

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Quick ratio

0.75

0.8

0.85

0.9

0.95

1

1.05

2004 2005 2006 2007 2008

Quick ratio

Current ratio=current assets/current liabilities The Ideal Current Ratio is 2:1 If the company has ideal current ratio then it is assumed that its current

assets are sufficient to meet its current liabilities or its working capital is adequate.

3) Quick ratio

year 2004 2005 2006 2007 2008

ratio 0.92 0.98 1.03 0.97 0.86 Interpretation

In the above table, Quick Ratio of the company for five years depicted

Quick ratio = liquid assets / current liabilities.

The Ideal Quick Ratio is assumed 1:1. The higher of the ratio shows the better ability of the company to

discharge its short term liabilities When required ratio provides more stringent test of short term

solvency because liquid asset is more liquid than the current liabilities

current ratio

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2004 2005 2006 2007 2008

year

ratio current ratio

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4) Debt–Equity ratio

year 2004 2005 2006 2007 2008


In the above table, Debt–Equity ratio of the company for five years is depicted

Debt–Equity ratio=External Equities or Debts/Internal Equities or Equities The Ideal Debt–Equity ratio is assumed 1:1 Debt–Equity ratio is taken as an indicator of the degree of protection

enjoyed by the outside creditors. The lower debt-Equity ratio expresses that there is greater claim of

the share holders over the assets of the company which is considered good from the point of view of the company.

5) Inventory Turnover Ratio

year 2004 2005 2006 2007 2008


In the above table, Inventory Turnover Ratio of the company for five years is depicted

Inventory (stock) Turnover Ratio = Net Sales/ Average Inventory.

Debt equity ratio

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2004 2005 2006 2007 2008

year

ratio Debt equity ratio

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Gross profit margin

0

2

4

6

8

10

12

14

16

18

2004 2005 2006 2007 2008

year

ratio Gross profit margin

Inventory turnover Ratio indicates the efficiency of the firm in producing and selling its product. Or the inventory/ stock turnover indicates the efficiency of the firms inventory management.

From the above analysis of the stock turnover ratio, stock Turnover to the business is less comparing to the previous year turn over turnover of RLL the present scenario is better utilization of stock in to business.

6) Gross Profit Margin Ratio

year 2004 2005 2006 2007 2008


In the above table, Gross profit margin of the company for five years is depicted

Gross profit ratio= Gross profit /Net sales *100. Higher the gross profitability ratio, higher the profit of business From the above analysis of Gross Profit ratio, gross profit ratio is

less compared to the previous year If the gross profit ratio is declining that may put the management in

difficulty

Inventory turnover ratio

3.8

3.9

4

4.1

4.2

4.3

4.4

4.5

2004 2005 2006 2007 2008

Year

ratio Inventory turnover ratio

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7) Net Profit Margin Ratio

year 2004 2005 2006 2007 2008

ratio 13.81 5.78 9.07 14.33 -22.02 Interpretation

In the above table, Net profit margin of the company for five years is depicted

Net Profit Ratio=Net Profit/Net sales*100

The Net profit ratio reveals the operational efficiency and in efficiency of the management of business

From the above analysis of Net Profit ratio, net profit ratio is less compared to the previous years

Since net profit ratio is declining that shows the inefficiency of management

8) Earnings per share

year 2004 2005 2006 2007 2008

EPS 28.38 5.69 10.21 16.56 -24.85 Interpretation

In the above table, EPS (Earnings per Share) of the company during the five years depicted.

EPS = Earnings after tax - Preference dividend / No. of equity shares

Net profit margin

-25

-20

-15

-10

-5

0

5

10

15

20

2004 2005 2006 2007 2008

year

ratio Net profit margin

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EPS is calculated by dividing the Earnings after Income Tax (EAIT), which is available to Equity Share Holders, with the Number of Equity Shares. EPS is used to measure the Profit to Equity Share Holders on „Per‟ Share Basis.

The year 2008 has the least EPS -24.85& 2004 has the highest EPS 28.38

Research & Development

Ranbaxy views its R&D capabilities as a vital component of its business strategy that will provide the company with a sustainable, Long –term competitive advantage .The Company today has pool of over 1,200 scientists engaged in path-breaking research. Ranbaxy is among the few Indian pharmaceuticals companies in India to have initiated its research program in the late 70‟s. To support its global ambition, a first of its kind world class R&D centre was commissioned in 1994. Today, the Company‟s multi-disciplinary R&D center at Gurgaon, in India, houses dedicated facilities for generics research & innovative research. The company‟s robust R&D environment for both drug discovery &development reflects the company‟s commitment to be a leader in the generics space & offer value added formulations based on its Novel Drug Delivery System (NDDS) & New Chemical Entity (NCE) research outcomes. The first research activity at Ranbaxy was initiated way back in the year 1973. Later when Ranbaxy drew its ambitious global plans, it embarked on R&D in a significant way by establishing its first R&D centre in 1994. The prowess of Indian scientist is widely acknowledge today & it is

Earning per share

-30

-20

-10

0

10

20

30

40

2004 2005 2006 2007 2008

year

rati

o

Earning per share

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believed that the cost of developing a new drug in India can be one third to one fifth of doing the same, in the developed world. It is a long term objective of Ranbaxy to build proprietary prescriptions, based on its prowess in NDDS & NCE research. PRODUCT Using the finest R&D and Manufacturing facilities, Ranbaxy Laboratories Limited manufacture & market generic pharmaceuticals, value added generic pharmaceuticals, branded generics, active pharmaceuticals,(API)and intermediates. The company remained focused on ascending the value chain in the marketing of pharmaceutical substance and is determined to bring increased revenues from dosage forms sales. Ranbaxy‟s diverse product basket of over 5000 SKUs available in over 125 countries worldwide encompasses a wide therapeutic mix covering a majority of chronic & acute segment. Ranbaxy‟s top 10 products, ranging from Anti-invectives to dermatological, account from revenues of over US $600 Mn INNOVATION The new Drug research areas at Ranbaxy include anti-invectives, inflammatory / respiratory, metabolic diseases, oncology, urology & anti-malaria. Presently, the company has 8-10 programs compromising one anti-malaria molecule in phases-II clinical trials. The company has two programs in phase-I & the remaining in the pre-clinical stage. This includes a collaborative research program with GSK. The company‟s NDDS focus is mainly on the development of New Drug Applications (NDA) /Abbreviated New Drug Applications (ANDAs) of oral controlled-release products for the regulated markets. The company‟s first significant international success using the NDDS technology platform came in September 1999, when Ranbaxy out-licensed its first once- a-day formulation to a multinational company. Ranbaxy‟s in-house NDDS programs are primarily focused on the oral segment. Inhalation (patented devices) & tr5ans-dermal (patented adhesive polymers) programs are also being pursued through collaborations. In the oral NDDS space, Ranbaxy has already developed four platform technologies namely Gastro Retentive, Modified matrix, Multiparticulate & Aerogel, Several products leveraging these technologies have been successfully developed.

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Market analysis

In 1998, Ranbaxy entered the United States of America, the world‟s largest pharmaceuticals market & now the biggest market of Ranbaxy, accounting for 28% of Ranbaxy‟s sales in 2005. For the twelve months ending on December 31st,2005,the company‟s global sales were at US$1,178 million with overseas market accounting for 75% of global sales (USA: 28%,Europe :17%,Brazil,Russia & China:29%).For the 12 months ending on December 31,2006,the company‟s global sales were at US$1,300 million. Most of Ranbaxy‟s products are manufactured by license from foreign pharmaceuticals developers, though a significant percentage of there products are off-patent drugs that are manufactured & distributed without licensing from the original manufacturer because the patents on such drugs have expired. In December 2005, Ranbaxy‟s share was hit hard by a patent disallowing production of its version of Pfizer‟s cholesterol –cutting drugs Lipitor, which has annual sales of more than $10 billion. On June 23, 2006, Ranbaxy received from the U.S. Food & Drugs Administration a 180 day exclusivity period to sell simvastatin (Zocor) in the U.S. as a generic drug at 80mg strength. Ranbaxy presently competes with the maker of brand-name Zocor, Merck & Co.; Teva Pharmaceuticals Industries, which has 180-day exclusivity at strengths other than 80mg; & Dr. Reddy‟s Laboratories, also from India, whose authorized generic version is exempt from exclusivity.

Market Price Data

Month Bombay Stock

Exchange

National Stock

Exchange

(High) (Low) (High) (Low)

Jan-09 257.70 161.15 257.70 165.10

Feb-09 244.00 159.65 244.00 159.25

Mar-09 169.00 133.15 168.85 133.10

Apr-09 202.20 160.00 202.00 160.00

May-09 286.40 167.60 286.45 167.50

Jun-09 311.80 242.70 312.30 242.55

Jul-09 289.95 236.00 298.60 236.00

Aug-09 348.00 257.00 346.00 257.40

Sep-09 417.80 312.10 418.60 312.20

Oct-09 419.40 362.05 419.50 362.05

Nov-09 460.75 374.00 461.80 374.10

Dec-09 538.00 454.00 538.45 455.10

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Worldwide Operations

Global Pharma Companies are experiencing an ever changing landscape ripe with challenges and opportunities. In this challenging environment Ranbaxy is enhancing its reach leveraging its competitive advantages to become a top global player. Driven by innovation and speed to market we focus on delivering world-class generics at an affordable price. Our people have consistently risen above all challenges maximized opportunities and positioned Ranbaxy as a leader in the global generics space. Ranbaxy‟s global footprint extends to 49 countries embracing different locales and cultures to form a family of 51 nationalities with an intellectual pool of some of the best minds in the world.

STRATEGY

Ranbaxy is focused on increasing the momentum in its key markets through organic & inorganic growth routes. It continues to evaluate acquisition opportunities in India, emerging & developed market to accentuate its business & competitiveness. The company growth is well speed across geographies with near equal focus on developed & emerging markets. Ranbaxy has entered into new specialty therapeutic segments like Bio-similars, oncology, peptides & limuses .These new growth areas will add significant depth to its existing product pipeline. The novel drug delivery systems (NDDS) research at Ranbaxy focuses on maximizing the overall therapeutic & commercial value of commonly prescribed pharmaceutical formulation by enhancing there performance & reducing their adverse event profile . Such innovation also helps to improve the overall patient convenience & compliance.

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PEOPLE

The company‟s business philosophy based on delivering value to its stakeholders constantly inspires its people to innovate, achieve excellence & set new global benchmark. Driven by its own vision to become a global leader the company reinvents itself to achieve sustained growth & leadership. Driven by the passion of its over 12,000 strong multicultural workforce comprising 50 nationalities , Ranbaxy continues to aggressively pursue its mission to become a Research-based International Pharmaceutical Company & attain a true global leadership position.

SWOT Analysis

Strengths Low cost of production. Large pool of installed capacities Efficient technologies for large number of generics. Large pool of skilled technical manpower. Increasing liberalization of government policies.

Weakness Fragmentation of installed capacities. Low technology level of capital goods of this section. Non-availability of major intermediaries for bulk drugs. Lack of experience to exploit efficiently the new patent regime. Very low key r&d Low share of india in world pharmaceutical production Very low level of biotechnology in india and also for new drug

discovery systems. Lack of experience in international trade. Low level of strategic planning for future and also for technology

forecasting.

Opportunities

the global spread of ranbaxy and the blazing growth in business provides ample opportunities for our employees to build careers in various fields. Opportunities have never been a constraint for the deserving. We believe in employee growth that goes beyond vertical movements and change in designations. Potential and performance are the pillars of career progression at ranbaxy. A robust development process supports this

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Vision & Aspiration

The company is driven by its vision to achieve significant business in proprietary prescription products by 2012 with a strong presence in developed markets. It aspires to be amongst the top 5 global generic players & aims at achieving global sales of U.S $5Bn by 2012.

Mission & Values

Impact of services

RCHS operates in two types of service areas:

Twilight Areas

Intensive Areas

Twilight Areas (old service areas)

The twilight areas are the old service areas taken up as early as in 1998. These areas comprise of 26 villages having a population of 61703. After an initial period of intensive interventions, RCHS is continuing to provide supportive services in these areas with the active participation of trained community resources established by RCHS over the years in all the villages.

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RCHS programme in the twilight areas had a very positive outcome. As is evident from the graph below, there is a steady reduction of birth rate from 23 in 1998 to 15.1 per 1000 population in 2007. The infant and maternal mortality rates have also declined substantially from 44.5 in 1998 to 20.7 per 1000 live births in 2007 and from 4.5 in 1998 to nil per 1000 live births in 2007 respectively. There results do not just speak about the effectiveness of the programme but also about the sustainability of its positive impact over a long period.

Intensive Areas

The intensive areas are the new areas taken up in 2004 with house to house monitoring under the computerized Management Information System (MIS). These areas comprise of 18 villages having a population of 28665. These areas are visited once a week on a regular basis. As evident from the bar charts given below, there is a significant improvement in the general health profile of the community during the last three years in respect of immunization, vitamin A, family planning status, tetanus toxiod, coverage for delivered cases and malnutrition. As far as vital indicators in the intensive area are concerned, the infant mortality has declined from 48.9 in 2004 to 34.5 per thousand live births in 2007. The maternal mortality rate has also come down from 6.3 per thousand live births in 2005 to nil in 2007.

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Environmental Awards

Ranbaxy has not only proved them financially but with they proved that they are also concerned with the Environment and the concerned area was they perform. Due to which they have stolen awards such as:

National Award for „Excellence in Water Management‟ from CII as an „Excellent Water Efficient Unit‟ – for Toansa plant in year 2005.

National Award for „Excellence in Water Management‟ from CII as „Most Useful Presentation‟ – for Toansa plant in the year 2005.

National Award for „Excellence in Energy Management‟ from CII as an „Excellent Energy Efficient Unit‟ for Toansa plant in the year-04

Kirt Shiromani Award for „Best Safety Suggestion‟ by employees, from Government of Punjab – for Mohali plant in the years 2004 and 2003.

„Greentech Environment Excellence Silver Award‟ from Greentech Foundation – for Toansa plant in the year 2003.

National Award for „Outstanding Performance in Industrial Safety‟ as Runner-Up in achieving „Lowest Average Frequency Rate‟ – for Toansa plant in the year 2003

ShramVeer Award for Best suggestion regarding safety improvement, from Ministry of Labour, Government of India – for Mohali plant in the year 2003.

National Award for „Excellence in Energy Management‟ from CII as an Excellent Energy Efficient Unit – for Toansa plant in the year 2002.

National Safety Award for 1st position for „Accident Free Period‟ –

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for Mohali plant in the year 2002.

Merit Certificate for Largest Reduction in Frequency Rate of Accidents in Chemical Industry (More than 5 Lakh man-hours category) from Government of Punjab – for Mohali plant in the year 2002.

Current EVENT

On June, 2008, Japan‟s Daiichi Sankyo Co., agreed to take a majority (50.1 %) stake in Ranbaxy, with a deal valued at about $4.6 billion. DAIICHI and SANKYO have a long history in Europe. TAKASHI SHODA is the president & CEO of the company. KIYOSHI MORITA is the representative director & chairperson at DAIICHI SANKYO. Malvinder Singh is still the CEO of the company even after transaction. The existing management will still continue under CEO and MD, Malvinder Singh. Singh also became a member of the senior global management of Daiichi. Malvinder Singh also said this was a strategically deal & not a sell out. Daiichi Sankyo, Japan‟s the second largest drug maker acquired more than 50.1% of Ranbaxy for 737 rupees a share.

Conclusion

Ranbaxy recorded global sales of US$ 1,682 Mn in 2008, a 4% growth over last year. Dosage Form sales constituted 93% of global sales during the year as against 94% in 2007. Overseas markets constituted 80% of the total sales of the Company

Consistent depreciation of the rupee in 2008 and large exposure of the Company‟s business to the international markets has resulted in substantial foreign exchange losses of Rs.10,856 Mn on forward covers and loans.

As a prudent measure to stay current in its accounting practices, the Company adopted from October 1, 2008, Accounting Standard 30 on “Financial Instruments: Recognition and Measurement” issued by the Institute of Chartered Accountants of India. As a result, a net loss of Rs. 7,702 Mn was recognized during the year basis the fair value measurement principle suggested in the Standard.

The total number of employees of the Company and its subsidiaries as on December 31, 2008 stood at 12,174.

In view of the losses incurred by the Company, no dividend has been declared for the year ended December 31, 2008.

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Suggestions

The company has incurred loss in current fiscal year; company has to make future plans in such a way that it is not repeated.

The company has expanded globally but the company should take care of the domestic market also.

Investment plan has to be made keeping in mind the objective of the company.

compant profile 2010@ Ranbaxy

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