Chapter 1

Profile of the Company

1.1

Profile of the company

We Austro Labs are one of the leading exporters of premium quality Ayurvedic,
Cosmetics, Food supplements and Allopathic Products. With Our Immense experience in
healthcare industry and professional management, we have been able to cater to the
requirements of large clientele across the world.
Our team comprises of immensely experienced marketing professionals, who work in
close co-ordination with our quality control department to lead us to the path of success.
All our Cosmetics and Ayurvedic products are highly efficient in nature & do not contain
any side effects. Moreover, our Allopathic products are in accordance to the international
standards and have been competitively priced.
We are equipped with sound infrastructure, required workforce, thorough knowledge &
immense experience of the pharma industry, which in turn has enabled us to come up
with the best possible range in all of our four categories.
1.2

Nature of the Organization

For the year 2009, Austro Labs Limited has a clear strategy to harness its growth
potential in emerging markets, rebuild the US business through a series of actions on
products and facilities; actualize significant revenue upsides through First-to-File and
Day-1 launches strengthen the product / therapeutic pipeline and look for M&A
opportunities, complementing our geographic and therapeutic basket. Our focus will be to

resolve regulatory compliance issues and continue to strengthen cGMP across all
locations. Besides this, Austro Labs Limited and Daiichi Sankyo will identify key
projects to realize synergies at both the front and back ends of the business, although,
there will be much to contend with, considering that the industry is projected to grow at
around 5% in 2009.
Austro Labs Limited is focused on increasing the momentum in the generics business in
its key markets through organic and inorganic growth routes. The Company continues to
evaluate acquisition opportunities in India, emerging and developed markets to strengthen
its business and competitiveness. Growth is well spread across geographies with focus on
emerging markets. Austro Labs Limited has forayed into new specialty therapeutic
segments like Bio-similars, Oncology, Peptides and Limuses. These new growth areas
will add significant depth to the existing product pipeline.
The Indian pharmaceutical industry is at the center stage in the global
Pharmaceutical arena and Austro Labs Limited is at the forefront in delivering the India
centric advantages to the advanced and developing countries of the world.
The Endeavour at Austro Labs Limited is to provide value. Value through pioneering
work, research & development and quality pharmaceuticals across the globe. Austro Labs
Limited keeps alive this Endeavour as it steps into the new millennium, and reaffirms its
commitment to the environment, the people and a healthier future.
Austro Labs Limited has excelled in its endeavor in drug research and manufacture,
providing quality products not only at par with global markets but also facilitating the
same.
2

Austro Labs Limited are committed to provide quality generics at affordable prices to the
patients worldwide with a view to help bring down the healthcare costs. Companies
grow from strength to strength in the global generic space in the years to come. While the
company continues to enhance the momentum of generics business in over 125 markets,
they are also accelerating drug discovery program through collaborations and alliances.
Austro Labs Limited is driven by its vision to achieve significant business in proprietary
prescription products by 2016 with a strong presence in developed markets.
1.3

Companys Vision & Mission

Mission
Enriching lives globally, with quality and affordable pharmaceuticals.
Vision and Values
Achieving customer satisfaction is fundamental to our business.
Provide products and services of the highest quality.
Practice dignity and equity in our relationship and provide opportunities for our people to
realize their full potential.
Ensure profitable growth and enhance wealth of the shareholders.
Foster mutually beneficial relations with all our business partners.
Manage our operations with high concern for safety and environment.
Be responsible corporate citizen.

1.4

Product range of the company

1.5

Size of the organization

1.51

In terms of manpower

Austro Labs current manpower is approximately around 300 and every year new
recruitments are taking place and each year the manpower is different. As on March
2014, Austro Labs has 249 employees.
1.52 In terms of Turnover:
Austro Labs has a turnover of Rs. 61,419 lacs in the financial year of 2014-2015.
1.6

Organization Structure

GM (WORKS)

HR
Dept.

QC
Dept.

PRODUCTION
Dept.

FINANCE
Dept.

WAREHOUSE
Dept.

PURCHASE
Dept.

VALIDATION
Dept.

QA
Dept.

INFOTECH
Dept.

1.7 Market Share and Position of the Company

a) Consolidated net sales at Rs. 18,884 Mn, a growth of 14% (USD 431 Mn).

b) Emerging markets portfolio achieves sales of Rs. 10,644 Mn, with a strong
growth of 20%; accounts for 56% of sales (USD 243 Mn).
c) Developed markets sales grew by 9% to Rs. 7,089 Mn (USD 162 Mn); accounts
for 38% of sales.
d) Earnings before Interest, Tax, Depreciation & Amortization (EBITDA) for the
quarter are Rs. 1,440 Mn (8%). EBITDA for the year to date is Rs. 7,253 Mn
reflecting a margin to sales of 14%.
e) Gross margin on year to date basis maintained at 51% despite adverse economic
conditions this year.
f) Over the current year there has been a consistent improvement in Working Capital
management with a result that the Companys Gross Working Capital has reduced
by 5%.
The pharmaceutical industry is characterized by rapid advances in scientific knowledge
and ability to discover new drugs. The industry is therefore led by large manufacturers
and marketers of drugs investing heavily in research &development, having clinical
testing, marketing and distributing capabilities. Some of the main competitors of Austro
Labs Limited are:
a)

Sun Pharmaceuticals Industries - It is No. 1 in India in specialty therapy areas

like psychiatry, neurology, cardiology, gastroenterology, diabetology and
respiratory. It has brands in 30 markets worldwide and also has a generic presence
in the U.S. with Caraco Pharm Labs, Sun Pharmaceutical Industries Inc

b)

Cipla - Cipla is a leader in the domestic retail pharmaceutical market. It also

exports raw materials, intermediates, prescription drugs, over-the-counter
products, and veterinary products to some 180 countries around the world.

c)

Glaxo smith Kline- It is one of the oldest pharma companies in India and with a
turnover of Rs. 1500 crore is one of the market leaders(market share) in India
with a share of 6.2 per cent Its main portfolios consists of anti- invectives,
dermatologicals and pain management drugs

d)

Dr.Reddys Laboratories It is a global pharmaceutical company with it's

headquarters in India and a presence in more than 100 countries. In India it the
biggest drug maker by sales.

Other competitors are Actavis,Sandoz International GmbH; Teva pharmaceuticals, RPG

Enterprises, East India Pharmaceutical Works Ltd, Concept Pharmaceuticals Ltd,
Khandelwal Laboratories Ltd, Dabur India Ltd.

Chapter 2
SWOT ANALYSIS

STRENGTHS

WEAKNESS

a) Low cost

a) Fragmentation

b) Large installed capacities

b) Low technology level

c) Efficient technologies

c) Non-availability of major

d) Skilled manpower

intermediaries
d) Lack of experience

e) Liberalization

e) Very low key R&D

f) Low share
g) Very low level of Biotechnology
h) Lack of experience in International
Trade
i) Low level of strategic

THREATS

OPPURTUNITIES
a) Aging of the world population
b) Growing incomes
c) Growing attention for health
d) New diagnoses and new social
diseases

a) Containment of rising health-care

cost
b) High Cost of discovering new
products and fewer discoveries
c) Stricter registration procedures

e) Spreading prophylactic approaches

d) High entry cost in newer markets

f) Saturation point of market is far

e) High cost of sales and marketing

away
g) New therapy approaches
h) New delivery systems
i) Spreading attitude for soft
medication (OTC drugs)
j) Spreading use of Generic Drugs

f) Competition, particularly from

generic products
g) More potential new drugs and more
efficient therapies
h) Switching over form process patent
to product patent

k) Globalization
l) Easier international trading
m) New markets are opening

STRENGTHS:
a) Low cost of production.
b) Large pool of installed capacities
c) Efficient technologies for large number of Generics.
d) Large pool of skilled technical manpower.

e) Increasing liberalization of government policies.

WEAKNESS:
a) Fragmentation of installed capacities.
b) Low technology level of Capital Goods of this section.
c) Non-availability of major intermediaries for bulk drugs.
d) Lack of experience to exploit efficiently the new patent regime.
e) Very low key R&D.
f) Low share of India in World Pharmaceutical Production
g) Very low level of Biotechnology in India and also for New Drug Discovery
Systems.
h) Lack of experience in International Trade.
i) Low level of strategic planning for future and also for technology forecasting.
OPPORTUNITY:
a) Aging of the world population.
b) Growing incomes.
c) Growing attention for health.
d) New diagnoses and new social diseases.
e) Spreading prophylactic approaches.
10

f) Saturation point of market is far away.

g) New therapy approaches.
h) New delivery systems.
i) Spreading attitude for soft medication (OTC drugs).
j) Spreading use of Generic Drugs.
k) Globalization
l) Easier international trading.
m) New markets are opening.
THREATS:
a) Containment of rising health-care cost.
b) High Cost of discovering new products and fewer discoveries.
c) Stricter registration procedures.
d) High entry cost in newer markets.
e) High cost of sales and marketing.
f) Competition, particularly from generic products.
g) More potential new drugs and more efficient therapies.
h) Switching over form process patent to product patent.

11

Chapter 3
Data Analysis and Presentation

Marketing
a) Marketing is the performance of business activities that direct the flow of goods
and services from producers to consumers."
b) Dr. Marshall says What we have is more strategic. Now it says marketing is
really something that makes the organization run."
c) The impetus to examine the official definition, with an eye on possibly rewriting
it, came from AMA CEO Dennis Dunlap. Some members had suggested it was
time for update. Also, in the late '90s and several industries thought leaders had
noted the dramatic changes underway in marketing.
In Austro Labs Limited
The companys advanced product development and manufacturing capabilities, combined
with a global sale and marketing network, make Austro Labs Limited an attractive
business partner. A key part of Austro Labs Limited business strategy is to collaborate
with partners with complementary skills a mutually beneficial strategy for both parties.
Sales and Marketing
Austro Labs Limited has set itself apart in the marketplace through the rapid expansion of
its product line and its willingness to emulate complex drug formulations. Austro Labs
12

Limited commitment to quickly expanding the breadth and depth of its product line has
been a key to its success in the marketplace.
To expand product lines with minimum investment, Austro Labs Limited provides
turnkey manufacturing services, including API and dosage form development, to allow
companies to focus on marketing and selling the product. This is an efficient way to
diversify product lines and increase profit margins, taking advantage of Austro Labs
Limited's manufacturing capabilities and expertise.
Austro Labs Limited has a commercial advantage as many of the high-profit branded
drugs with expiring patents over the next few years are in the categories where Austro
Labs Limited has proven expertise - anti-infective, gastrointestinal, cardiovascular and
analgesics.
Austro Labs Limited has a turnkey marketing group that works with other pharmaceutical
companies to co-market and co-promote a variety of chemicals and products. As a
marketing partner, Austro Labs Limited is able to meet the marketing needs of companies
while they themselves focus their efforts on a drug's development, manufacturing,
distribution and sales.
Marketing Strategies
Marketing Strategies is the department focused primarily on developing and executing
strategies for the promotion and distribution of branded, generic and OTC products for
Austro Labs Limited.

13

One of the key tasks for the department is to identify opportunities in different markets
and distribution channels and pursue those to developing and establish new relationships
in the marketplace. Managed Care and Internet marketing is couple of key areas that the
department is looking to introduce into its ever-expanding service offerings.
Human Resource Management
Introduction
a) HRM is concerned with the human beings in an organization. It reflects a new
Philosophy, a new out look, approach and strategy, which views an
organizations man power, has its resources and assets.
b) HRM is the managerial function which facilities the effective utilization of
people (manpower) in achieving the organizational and individual goals.
c) HRM is the management function that helps the mangers to recruit, select,
train and develop the organizational members for the purpose of achieving the
stated organizational goals.
d) HRM is a comprehensive managerial function, which is people, oriented, task
oriented, development oriented, future oriented, globally oriented and is a
continuous staff functions which is challenging.
e) HRM performs managerial and operative functions to effectively utilize the
available human resources by developing their competencies in tune with
organizational requirements.
f) HRM is the management of employees skills, knowledge, abilities, talents,
14

aptitudes, creative abilities etc.

g) HRM is a strategic management function HRM is the central sub-system of an
organization and its permeates all type of functional management viz.,
production management, marketing management, financial management
HRM activities
a) Human Resources Planning
b) Recruitment, selection and placement
c) Orientation, Training and Development
d) Job Analysis and Design
e) Role Analysis and role Development
f) Career Planning and Career Development
g) Motivation and Communication
h) Performance Appraisal
i) Human Relations
j) Safety and Health
k) Wage and Salary Administration
l) Compensation and Reward
m) Grievance Redressal

15

n) Quality of work Life and Employee Welfare

o) Organizational Change and Development
In Austro Labs Limited
Many Indian companies that perform well in domestic markets have not yet expanded to
the International arena. Several factors such as lack of confidence, lack of technical know
how and perhaps lack of resources inhibit leading Indian groups to expand their area of
activities to other parts of the world. HRM can play a crucial role in changing the attitude
of the company and its employees in order to facilitate entry and presence in the foreign
markets. This is effectively illustrated in the case of the Indian pharmaceutical giant
AUSTRO LABS LIMITED which succeeded in expanding its business internationally
due to the single-handed determination of its past CEO, Dr. Parvinder Singh, and the
manner in which he managed to change the mindset of his employees
Austro Labs Limited inched upwards because the employees shared their CEO's belief
and dream that they were in a position to harness their resources and capabilities and to
be successful in foreign markets. Together they developed continual cross border learning
programs to enrich their ways of working and functioning. Furthermore, they invited
managers from other parts of the world to be present on their board. This step enabled
them to catalyze their globalization process. Moreover, the CEO firmly led the company
to integrate backwards, to enter new markets and to develop novel drugs. This
provided with the edge to succeed in the global marketplace.
In the knowledge driven pharmaceuticals industry, human capital plays a critical role in
the success of an organization. At Austro Labs Limited, current and future growth is
16

primarily dependent on rich global talent pool. Organization responds to changing times
and develops the continuing agility required to remain successful. To achieve this,
company work hard to ensure that workforce is enabled, enriched and energised. Values
have been the driving force that sustains efforts. These are reflected in the principles of
Trustworthiness, Customer Responsiveness, People Development, Performance Focus
and Entrepreneurial Drive espoused throughout the organization
Experienced and capable people joined the organisation, promising talent within the
Company was put through a planned development programme called LEAD. These
initiatives are designed to further strengthen our core operations and position the
Company on a stronger footing while experienced and capable people joined the
organisation, promising talent within the Company was put through a planned
development.
Other development programs are

Total Rewards Strategy

Global Appreciate Programme

Fun@Work,

Life at Austro Labs Limited

A career at Austro Labs Limited means an opportunity for ample learning & growth. It
0ffers avenues to work across the globe along side the finest minds. The company offers a
challenging assignment, a world class working environment, professional management,
competitive salaries and stock options along with exceptional rewards.
17

Opportunities
The global spread of Austro Labs Limited and the blazing growth in business provides
ample opportunities for employees to build careers in various fields. Opportunities have
never been a constraint for the deserving. The company believes in employee growth that
goes beyond vertical movements and change in designations. Potential and performance
are the pillars of career progression at Austro Labs Limited. A robust development
process supports this. Managers will generally have the opportunity to live and work in
different countries; such international experience will help them better understand our
complex business and grow both personally and professionally.
Salary and Benefits
Salaries and other benefits in Austro Labs Limited are comparable with the best in the
industry and one can expect to be rewarded highly if the performance is consistently
outstanding.
Group Life Insurance, Medical Insurance and Pension plans are a few examples of the
benefits we provide to our employees and their dependents with adequate financial
protection on long term basis.
Stock ownership
The ownership in business is fundamental to personal progression, company
encourage you to take ownership of your investment stock ownership is a part
of the compensation for managers early in their career at Austro Labs Limited
you will see the business results straight in your pay slip.

18

Value and Activities

Corporate Social Responsibility (CSR)
As a global leader in pharmaceuticals Austro Labs Limited take pride not only in
providing products that enable people to live healthier and fuller lives, but also in giving
back to the society. At Austro Labs Limited, Corporate Social Responsibility and concern
for Environment, Health and Safety are a part of the corporate DNA.Reaching out to the
underserved rural communities and helping them overcome their challenges is central to
Austro Labs Limited's CSR philosophy.
Environment
As a socially responsible company, Austro Labs Limited has made an enduring
commitment to consistently set new benchmarks in environmental protection and
workplace. The Company is also deeply aware of its responsibility to deploy clean and
green technologies that help in providing a sustainable environment. This further builds
upon the already significant bond of trust and concern that it warmly shares with the
communities located in and around its operating facilities.
The Environmental Management System (EMS) at key API manufacturing facilities at
Toansa and Mohali, in Punjab, went through the annual surveillance audit, by a leading
external verifying agency both manufacturing facilities conformed to all audit
specifications and continued to remain ISO14001 complaint. Notable progress was made
towards achieving the defined environmental objectives, programs and long-term goals.
For further improving the wastewater management, an Agitated Thin Film Dryer and

19

Plate type Ultra Filtration were added as incremental safeguards, at the Toansa API
facility.
Health
Company always strives to make a meaningful impact on the quality of their lives by
bringing preventive, promotive and curative healthcare services to their doorstep. Nearly
three decades ago in 1979, Austro Labs Limited started its health care initiatives in
certain identified rural areas of Punjab. As the reach of the program grew, the Austro
Labs Limited Community Health Care Society (RCHS) was established in 1994. A novel
idea of providing mobile health care outreach service for the poor and underprivileged
was initiated. The program today benefits nearly 2 lakh people in 77 rural and urban slum
areas in Punjab, Haryana, Himachal Pradesh, Madhya Pradesh and Delhi. Today, six well
equipped mobile health care vans with teams of medics and paramedics are actively
engaged in the delivery of health care to our target population in these states. The issues
addressed include maternal-child health, family planning, reproductive health, adolescent
health, health education and AIDS awareness.
Safety
It is constant endeavour to scale up and better safety practices. A number of initiatives
were undertaken to enhance workplace safety. The emergency preparedness was ensured
through regular tabletop exercises and mock drills at all our manufacturing facilities and
R&D centres. At Toansa manufacturing facility, the 'Fire and Safety Risk Assessment' and
the 'Hazardous Area Classification' was reviewed by third party specialists. The National
Safety Council also conducted external safety audits at Toansa and Mohali. A

20

crossfunctional team of Corporate EHS, Engineering and Facility professionals along

with an external specialist further undertook external safety audits at the Corporate
Office. Extensive safety training programs were also conducted by internal and external
specialists at all manufacturing facilities, including those managed by contract.
Financial Analysis and Interpretation
Analysis of financial statement is important aid to financial analysis. The focus of
financial analysis is on key figures in the financial statements and the significant
relationships that exist between them. The analysis of financial statement is a purpose of
evaluating relationship between component parts of financial statements to obtain a better
understanding of the firm's position and performance. The first task of the financial
analyst is to select the information contained in the financial statements. The second step
involved in financial analysis is to arrange the information in a way to highlight
significant relationship. The final step is interpretation and drawing of inferences and
conclusions. In brief, financial analysis is the process of selections, relation and
evaluation.
However, it is to be noticed that there is a basic limitation of the traditional financial
statement comprising the balance sheet and the profit and loss account i.e., they do not
give all the information regarding financial operation of the firm. Accordingly ratios not
only indicate the present position, they also indicate the causes leading up to the large
extent. For instance accounts ratio may indicate not only the financial position and
precautions but also the past policies and actions they have caused.

21

Meaning and definition

Ratio Analysis is a powerful tool of financial analysis. A ratio is defined in the Webster's
new college Dictionary as "The indicated quotation of two mathematical expressions and
as the relationship between two or more things". In financial analysis a ratio is used as an
index or yardstick for evaluating the financial position and performance of a firm.
The three basic financial statements viz. the balance sheet. the profit and loss account and
the statement of changes in financial position are playing a significant role and most,
management uses the information carried in these statement

is used by most,

management, creditors, Investors and Debtors to evaluate about the past performance and
current position in order to predict future performance and position of the firm
Interested group in ratio analysis
Users of the financial ratio analysis are many they are concerned with the economic
situation of the firm and predicting its future course basing on which decisions are taken.
The major groups of users are:
Management
Management can get an overall view of the financial operations and conditions of the
company, which enables them to plan and control the company's activities more
effectively. They are able to spot weakness of the company's operations and can take
correct action. Further more, it tends to restrain management, as they are under pressure
to maintain a favorable financial position.

22

Investors
Investors are concerned with the safety of their investment and the ability of the company
to earn profit and in turn the dividend they earn on their investment. The Investor forms
their own opinion as to the soundness of increasing in a company. One way the investor
from their opinion of the companys earning capacity is by computing earning per share.
Creditors
Creditors are interested in the company's ability to meet its financial obligations. Those
who have lent. the money for short period are more interested in the company ability to
repay the debt as and when it becomes due. In other words, they are interested in the
liquid position of the company, which can be broadly measured by computing current
ratio and quick ratio.
The long-term creditors are not only interested in company's ability to repay but also in
the ability of the company to realize profit on the capital employed.
A creditor will be interested in ascertaining whether the company can employ the funds
loaned to it in such a way that it will able to meet current interest obligation and repay the
loan when it falls due. If a company earn less than what is paid in the form of interest, it
is not safe to lend money to the company.
Labours
Labour has an interest in the operating results and the financial strength of a company.
The remuneration of the worker must be generated from the company revenues: Thus,
the workers' wages, to a great extent, depend up on the success of the firm. Frequently,

23

labour unions use the information presented in the financial statement as a basic for their
demand for increase in wages. The past operating performance of the firm, as well as its
current financial position, is often studied to measure the ability of the Firm to meet new
wage commitments.
Various accounting ratios can be classified as follows
A) Traditional classification or statement ratio
Traditional classification or classification according to the statements from which these
ratios are calculated is as follows:
g) Balance sheet or position statement ratios:
Balance ratios deal with the relationship between two balance sheet items,
example; the ratio of current assets to current liabilities or the ratio of proprietors
funds to fixed assets. Both the items must, however, pertain to the same balance
sheet. The various balance sheet ratios have been named in the chart classifying
statement ratios.

24

h) Profit & loss a/c or Revenue/income statement ratios:

These ratios deals with the relation ship between two profit & loss account items,
example; the ratios of Gross profit to sales, or the ratio of net profit to sales. Both
the items must how ever, belongs to the same profit & loss account; commonly
used, are named in the chart classifying statement ratios.
i) Composite/ mixed ratios or inter statement ratios:
These Ratios exhibit the relation between a profit and loss or in come statement
item and a balance sheet item, e.g., stock turnover Ratio, or the Ratio of total
assets to sales.
B) Functional classification or classification according to test:
In view of the financial management or according to the tests satisfied, various Ratios
have been classified as below:
Liquidity Ratios:
These are the Ratios which measure the short term solvency or financial position of a
firm. These Ratios are calculated to comment up on the short term paying capacity of a
concern or the firms ability to meet its current obligations. The various liquidity Ratios
are current Ratio, liquidity Ratio and absolute liquid Ratio. Further to see the efficiency
with which the liquid resources have been employed by a firm, debtors turnover and
creditors turnover Ratios are calculated.

25

Long Term Solvency And Leverage Ratios:

Long term solvency Ratios conveys a firms ability to meet the interest costs and
repayments schedules of its long term obligations e.g.: debt equity Ratio and Interest
coverage Ratio and leverage Ratio.
Activity Ratios:
Activity Ratios are calculated to measure the efficiency with

which assets are being

turned over into sales, e.g.; Debtors turnover Ratio.

Profitability Ratios:
These Ratios measure the result of business operations or overall performance and
effectiveness of the firm, e.g.; Gross profit Ratio, operating Ratio or return on capital
employed.
The various profitability Ratios have been given in the chart exhibiting the classifications
of Ratios according to test. Generally, profitability Ratios is calculated. 1) In relation to
sales, and 2) in relation to investments.
C) Classification according to significance or importance
The Ratios have also been classified according to the significance or importance. Some
Ratios are more important than others and the firm may classify then as primary and
secondary Ratios.
The British Institute of management has recommended the classification Ratios according
to importance for inter-firm comparisons. For inter-firm comparisons the Ratio may be

26

classified as primary Ratios and secondary Ratios. The primary Ratio is one, which is of
the prime importance to a concern; Return on capital employed is named as primary
Ratio. The other Ratios e.g. the relationship of operating profit to sales or the relationship
of sales to total assets of the firm.
1) Sales turn over

Year
Amount(cr)

2010

2011

2012

2013

2014

3,865.86

3,727.05

4,218.98

4,344.39

4,676.21

Interpretation
a) In the above table, Amount (lacks) is the sales turnover achieved by
the company during the last five years.
b) The sales Turnover has increased from 3, 865.86 in the year 2010 to
4,676.21 in the year 08. When we compare the years 11, 12, 13 the

27

year2014 has the least turnover i.e., 3,727.05 & 2014 has the highest
turnover 4,676.21
2) Current ratio

Year

2010

2011

2012

2013

2014

Ratio

1.31

0.92

0.96

0.83

1.16

Interpretation
a) In the above table, Current Ratio of the company for five years is depicted.
b) Current ratio=current assets/current liabilities
c) The Ideal Current Ratio is 2:1
d) 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.

28

29

3) Quick ratio

Year

2010

2011

2012

2013

2014

Ratio

0.92

0.98

1.03

0.97

0.86

Interpretation
a) In the above table, Quick Ratio of the company for five years is
depicted
b) Quick ratio = liquid assets / current liabilities.
c) The Ideal Quick Ratio is assumed 1:1.
d) The higher of the ratio shows the better ability of the company to
discharge its short term liabilities

30

e) When required ratio provides more stringent test of short term

solvency because liquid assets are more liquid than the current
liabilities
4) DebtEquity ratio
Year

2010

2011

2012

2013

2014

Ratio

0.05

0.43

1.35

1.38

1.05

Interpretation
a) In the above table, DebtEquity ratio of the company for five
years is depicted
b) DebtEquity ratio=External Equities or Debts/Internal Equities or Equities
c) The Ideal DebtEquity ratio is assumed 1:1

31

d) DebtEquity ratio is taken as an indicator of the degree of protection enjoyed

by the outside creditors.
e) 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.

32

5) Inventory Turnover Ratio

Year

2010

2011

2012

2013

2014

Ratio

4.26

4.11

4.39

4.42

4.07

Interpretation
a) In the above table, Inventory Turnover Ratio of the company for
five years is depicted
b) Inventory (stock) Turnover Ratio = Net Sales/ Average Inventory.
c) 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.

33

d) 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 Austro labs Ltd. the present scenario is better utilization of stock in
to business.

34

6) Gross Profit Margin Ratio

Year

2010

2011

2012

2013

2014

Ratio

16.9

4.9

14.39

7.51

2.07

Interpretation
a) In the above table, Gross profit margin of the company for five
years is depicted
b) Gross profit ratio= Gross profit /Net sales *100.
c) Higher the gross profitability ratio, higher the profit of business
d) From the above analysis of Gross Profit ratio, gross profit ratio is less
compared to the previous year
e) If the gross profit ratio is declining that may put the management in difficulty

35

7) Net Profit Margin Ratio

Year

2010

2011

2012

2013

2014

Ratio

13.81

5.78

9.07

14.33

-22.02

Interpretation
a) In the above table, Net profit margin of the company for five
years is depicted
b) Net Profit Ratio=Net Profit/Net sales*100
c) The Net profit ratio reveals the operational efficiency and in
efficiency of the management of business
d) From the above analysis of Net Profit ratio, net profit ratio is less
compared to the previous years

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e) Since net profit ratio is declining that shows the inefficiency of

management
8) Earning per share

Year

2010

2011

2012

2013

2014

EPS

28.38

5.69

10.21

16.56

-24.85

Interpretation
a. In the above table, EPS (Earnings per Share) of the company
during the five years depicted.
b. EPS = Earning after tax - Preference dividend / No. of equity
shares

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c. 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.
d. The year 2014 has the least

EPS -24.85& 2010 has the

highest EPS 28.38

I.T Department
SAP maintains a central database for all the departments of an enterprise and all SAP
modules are interconnected and hence real time reporting becomes possible unlike in
legacy systems where lack of interconnection among different applications result in time
lag. SAP R/3 is the latest in ERP software. Austro Labs Limited runs SAP R/3 ERP
software.
Vendor Management: this is to provide for conducting assessment and planning,
performing and reporting on site audits if necessary for 3 rd party organization supplying
software and computer systems used to automate certain regulated business processes.
Electronic records and electronic signature guidelines: it to fulfill companys requirement
for the use of computerized systems i.e acquire, analyze, record, store, or summarize data
and store employee electronic records.
Risk Management: is to define a proactive approach to identify, analyze and mitigate any
potential risks during the life cycle or project. This process allows the team to know the

38

risks during and after the project providing justification/ validation to be taken to support
the system implementation at the same time.

39

Chapter-4:
Summary & Conclusions

4.1 Findings
a) Austro Labs Limited recorded global sales of US$ 1,682 Mn in 2014, a 4%
growth over last year. Dosage Form sales constituted 93% of global sales during
the year as against 94% in 2013. Overseas markets constituted 80% of the total
sales of the Company
b) Consistent depreciation of the rupee in 2014 and large exposure of the Companys
business to the international markets has resulted in substantial foreign exchange
losses of Rs.10,856 Mn on forward covers and loans.
c) As a prudent measure to stay current in its accounting practices, the Company
adopted from October 1, 2014, 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.
d) The total number of employees of the Company and its subsidiaries as on
December 31, 2014 stood at 12,174.

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4.2 Lessons Learnt

My Internship in Austro Labs started on 17th June 2015. I grabbed the opportunity to meet
different people from diverse backgrounds and occupations to discuss on bank related
topics. Working in prudent cas has helped me to gain lots of experience in the each field.
The main contribution of an employee to its organization is to perform its responsibilities
given with 100% effort and honesty.
My major responsibility was to sell the product and analyze the performance of the
investment team by comparing the portfolio performance for the organization. For the
goodwill of the company I was always honest to tell all the facts and benefits of the
product to the customer and convince them for the right product that best suited them.
After login their forms I called them and do a formal call that whether they received their
documents or not and if some complication occurred with the document.
Investment department is performing very well and company is able to provide good
returns to the customers. I am very much satisfied with the level of work; I have done for
the company. I have also flab information about how to deal with superiors & customers.
This will help me through my professional carrier ahead. Various functional areas are also
seen by me and how they work accordingly.

4.3 Suggestions
a) The company has incurred loss in current fiscal year; company has to make
future

plans

in

such

way

that

it

is

not

repeated.

41

b) The company has expanded globally but the company should take care of the
domestic

market

also.

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

d) Austro Labs Limited being a pharmaceutical company in India.

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