ICFAI FOUNDATION FOR HIGHER EDUCATION

UNIVERSITY

A PROJECT REPORT
ON

“Working Capital Management on Aurobindo Pharma

Limited”

(UNDER THE GUIDANCE OF – Prof. Nityanand Tripathi)

Submitted by:-
G.V.S. Kishore
Seat no. 06
20BSPHH01C1533
 INDEX

1. Industry analysis

2. Company analysis

3. Management and discussion analysis

4. Annexures

1.
2.
 Industry analysis

India is the biggest supplier of conventional medications around the world. Indian drug area supplies over
half of worldwide interest for different antibodies, 40% of nonexclusive interest in the US and 25% of all
medication in the UK. India appreciates a significant situation in the worldwide drugs area. The nation
additionally has a huge pool of researchers and architects with a possibility to control the business ahead to
more noteworthy statures. As of now, over 80% of the antiretroviral drugs utilized worldwide to battle
AIDS (Acquired Immune Deficiency Syndrome) are provided by Indian drug firms.

Indian drug area is relied upon to develop to US$ 100 billion, while clinical gadget
market is required to develop US$ 25 billion by 2025. Drugs send out from India remained at US$ 16.3
billion in FY20. Drug trade incorporates mass medications, intermediates, drug plans, biologicals, Ayush
and home-grown items and careful. As of October 2020, India sent out drugs worth US$ 13.87 billion in
FY21. Drug trades from India remained at US$ 16.28 billion in FY20 and US$ 2.07 billion in October
2020. India's biotechnology industry involving biopharmaceuticals, bio-administrations, bio-horticulture,
bio-industry, and bioinformatics is normal develop at a normal development pace of around 30% a y-o-y to
arrive at US$ 100 billion by 2025. India's homegrown drug market turnover arrived at Rs 1.4 lakh crore
(US$ 20.03 billion) in 2019, up 9.8% y-o-y from Rs 129,015 crore (US$ 18.12 billion) in 2018.
 Company analysis

Introduction: -

Aurobindo Pharma Limited is a drug fabricating organization settled in HITEC City, Hyderabad, India. The
organization fabricates nonexclusive drugs and dynamic drug fixings. The organization's territory of action
incorporates six significant helpful/item zones: anti-microbials, against retroviral, cardiovascular items,
focal sensory system items, gastroenterological, and hostile to allergic. The organization advertises these
items in more than 125 countries. Its promoting accomplices incorporate AstraZeneca and Pfizer

Organization: -

The organization started activities in 1988–89 with a solitary unit fabricating semi-engineered penicillin
(SSP) in Puducherry. Aurobindo Pharma turned into a public organization in 1992 and recorded its offers
in the Indian stock trades in 1995. Aurobindo Pharma likewise has a presence in key helpful fragments, for
example, neurosciences, cardiovascular, against retroviral, enemies of diabetics, gastroenterology and
cephalosporins, among others.

Aurobindo Pharma highlights among the main 10 organizations in India regarding solidified incomes.
Aurobindo fares to more than 125 nations across the globe with over 70% of its incomes determined out of
worldwide activities.

In 2014, Aurobindo bought the nonexclusive tasks of Actavis in 7 Western European nations for $41
million. Aurobindo Pharma intends to grow its item portfolio with high worth items in oncology,
chemicals, biosimilars and novel medication conveyance arrangements like station infusions, inhalers, fixes
and films. It has likewise focused on geographic development in new domains like Poland, Italy, Spain,
Czech Republic, Portugal and France as conventional infiltration in these nations is low. In 2017,
Aurobindo Pharma inked a pa0ct to secure Portugal's Generis Pharmaceutical SA from Magnum Capital
Partners for a thought of €135 million. It likewise gained four biosimilar items from Swiss firm TL
Biopharmaceutical AG. assembling and supply course of action with Aurobindo to help the progressing
development plans of these organizations.
 Management and discussion analysis

Aurobindo accepts an enhanced item crate assists with developing the business reliably and constantly.
Aurobindo Company has recognized perplexing and separated items in numerous helpful regions from
where it will dispatch the following period of development. Aurobindo follows a procedure of petitioning
for select separated items and as the endorsements are gotten commercialisation prompts market extension.

Aurobindo Company is resolved to fabricate a different and powerful forte items portfolio involving
oncology and hormonal items biosimilars warehouse infusions immunizations topicals transdermal patches
inhalers nasals and complex peptide items. The new securing of immunization advances will add more
items and scale to the antibody portfolio.

The US and Europe are the critical geologies for Aurobindo Company which is focused on developing all
its business fragments. In the US more than 180 ANDAs are sitting tight for conclusive endorsement and
yearly deals according to IQVIA information is US$ 80 billion as on 31 March 2020.Apart from this more
than 350 ANDAs are being worked on including the separated pipeline.

In the Europe nonexclusive entrance keeps on improving in nations like Italy Spain Portugal and France.
Aurobindo Company will keep on growing its portfolio through dispatches of focused Day 1 items in the
oncology chemicals injectables and orals fragments. Aurobindo Company has a pipeline of more than 250
items a work in progress. Going ahead Aurobindo will begin providing Eugia Pharma's items in Europe.
Aurobindo Company will zero in on driving top line development and keeping up solid spotlight on
improving net revenues.

Aurobindo sloped up its ARV limits in line with market take-up accordingly accomplishing a prevailing
piece of the pie in Dolutegravir portion. Greater part of the nations are quickly changing over to TLD first-
line routine and this is required to develop this market in the coming years. Generally speaking,
Aurobindo's solid presence in the worldwide HIV space has been developing at a predictable speed and
Aurobindo Company is on target to surpass its goal of aiding treat more patients across the globe. In its API
business Aurobindo will keep on zeroing in on complex items with changing volumes and constant
improvement in assembling measures. Aurobindo Company has reliably expanded creation volumes and
hopes to improve further in the coming years. In R&D Aurobindo Company will keep up spotlight on hard
to fabricate separated items with conceivable low-serious pressing factor. Documenting force is in
accordance with the procedure of moving towards complex/forte items. In monetary execution Aurobindo
Company will zero in on improving EBITDA edge driven by operational greatness and scale. Aurobindo
Company plans to reinforce income and reliably pay off past commitments.
 STANDALONE BALANCE SHEET

(All amounts are in Indian Rupees in millions, except for share data and where otherwise stated)

I ASSETS
Non - Current Assets
(a) Property, plant and equipment 3 33,929.7 32,116.2
(b) Capital work-in-progress 3 11,002.3 8,783.1
(c) Intangible assets under development 3 437.5 286.7
(d) Financial assets
(i) Investments 4(A) 16,819.3
(ii) Trade receivables 5(A) 19,674.8 -
(iii) Loans 6(A) - 463.6
(iv) Other financial assets 7(A) 132.6 807.4
(e) Deferred tax assets (net) 8 964.1 0.8
(f) Non-current tax assets (net) 9 - 579.6
(g) Other non-current assets 10(A) 826.0 1,339.0
Total non-current assets 1,159.4 61,195.7
Current assets 68,126.4
(a) Inventories 11 34,092.3 24,336.2
(b) Financial assets
(i) Investments 4(B) 0.2
(ii) Trade receivables 5(B) 0.2 37,736.3
(iii) Cash and cash equivalents 12 44,774.4 336.4
(iv) Loans 6(B) 2,459.0 102.5
(v) Other financial assets 7(B) 97.6 165.8
(c) Other current assets 10(B) 30.9 6,356.1
Total current assets 8,399.2 69,033.5
TOTAL ASSETS 89,853.6 130,229.2
II. EQUITY AND LIABILITIES 157,980.0
Equity
(a) Equity share capital 13 585.9 585.9
(b) Other equity 14 99,239.9 83,775.9
Total equity 99,825.8 84,361.8
Liabilities
Non-current liabilities
(a) Financial liabilities
(i) Borrowings 15(A) 1,189.0
(b) Provisions 16(A) - 208.7
(c) Deferred tax liability (net) 8 336.0 -
Total non-current liabilities 234.8 1,397.7
Current liabilities 570.8
(a) Financial liabilities
(i) Borrowings 15(B) 36,538.3 27,512.7
(ii) Trade payables 17 16,334.0 12,176.0
(iii) Other financial liabilities 18 2,526.5 3,364.6
(b) Other current liabilities 19 1,439.2 801.4
(c) Provisions 16(B)
Total current liabilities 745.4 615.0
TOTAL EQUITY AND LIABILITIES 57,583.4 44,469.7
157,980.0 130,229.2
Summary of significant accounting policies 2.2
As at As at 31
Notes 31 March 2018 March 2017
STANDALONE STATEMENT OF PROFIT AND LOSS
(All amounts are in Indian Rupees in millions, except for share data and where otherwise stated)

Year ended Year ended

Note 31 March 2018 31 March 2017

I INCOME
Revenue from operations 20 103,031.5 97,812.1
Other income 21 806.5 1,359.5
TOTAL INCOME (I) 103,838.0 99,171.6

II EXPENSES
Cost of materials consumed 22 48,932.7 46,041.9
Purchases of stock-in-trade 37.2 112.1
Changes in inventories of finished goods, stock-in-trade and work-in-progress 23 (3,341.8) 313.2
Employee benefits expense 24 11,316.4 9,273.0
Finance costs 25 528.9 451.6
Depreciation expense 26 3,548.3 2,861.7
Other expenses 27 19,386.9 18,332.4
TOTAL EXPENSES (II) 80,408.6 77,385.9
III PROFIT BEFORE TAX (I-II) 23,429.4 21,785.7
IV TAX EXPENSE : 28
Current tax 5,053.4 4,620.6
Tax credit - Minimum Alternate Tax (MAT) (433.2) (642.8)
Deferred tax 681.5 740.3
TOTAL TAX EXPENSE (IV) 5,301.7 4,718.1
V PROFIT FOR THE YEAR (III-IV) 18,127.7 17,067.6
VI OTHER COMPREHENSIVE INCOME (OCI)
Items that will not to be reclassified subsequently to profit or loss:
(a) Re-measurement of defined benefit liability (34.5) (85.7)
(b) Income-tax relating to items that will not be reclassified to profit or loss 12.7 29.7
TOTAL OTHER COMPREHENSIVE INCOME FOR THE YEAR (NET OF TAX) (VI) (21.8) (56.1)
VII TOTAL COMPREHENSIVE INCOME FOR THE YEAR (NET OF TAX) (V+VI) 18,105.9 17,011.5
VIII EARNINGS PER EQUITY SHARE 29
Basic (in `) 30.94 29.16
Diluted (in `) 30.94 29.16
Nominal value per equity share 1.00 1.00
Summary of significant accounting policies 2.2
 C O N S O LID A T E D B A L A N C E S H E E T
(All amounts are in Indian Rupees in millions, except for share data and where otherwise stated)

Note As at As at
31 March 2019 31 March 2018
I ASSETS
Non-current assets

(a ) Property, plant and equipment 3 56,936.5 47,365.6

(b ) Capital work-in-progress 3 13,419.4 13,995.4
(c ) Goodwill 4 8,325.1 8,165.5
(d ) Other intangible assets 5 19,486.9 9,675.7
(e ) Intangible assets under development 5 3,265.2 1,835.0
2,475.6 2,307.9
( f) Investments accounted for using the equity method 6(A)
(g ) Financial assets
1,126.4 807.3
(i ) Investments 6(B) 64.6 54.4
(i i) Loans 7(A) 11.9 -
(i ii) Trade receivables 8(A) 893.8 868.3
(iv ) Other financial assets 9(A) 1,832.9 1,588.0
(h ) Deferred tax assets (net) 10(A) 1,381.1 825.9
( i) Non-current tax assets (net) 11(A) 1,679.2 1,739.8
( j) Other non-current assets 12(A) 110,898.6

Total non-current assets 72,456.0 89,228.8

Current assets
0.2
(a ) Inventories 13 34,137.8 58,584.1
(b ) Financial assets 18,837.0
(i ) Investments 6(C) 734.8 0.2
(i i) Trade receivables 8(B) 102.6 30,802.0
(iii) Cash and cash equivalents 14(A) 13,634.6 12,140.0
(iv ) Bank balances other than (iii) above 14(B) 345.6 482.5
(v ) Loans 7(B) 13,396.5 86.6
153,645.1 7,942.0
(v i) Other financial assets 9(B)
264,543.7 645.5
(c ) Current tax assets (net) 11(B)
11,098.7
(d ) Other current assets 12(B)

Total current assets 585.9 121,781.6

TOTAL ASSETS 138,321.9 211,010.4
II EQUITY AND LIABILITIES 138,907.8
Equity 15.9
138,923.7
(a ) Equity share capital 15 585.9
(b ) Other equity 16 116,218.3
Equity attributable to owners of the Parent Company 116,804.2
1,799.5
( c ) Non-controlling interest 465.4 18.2
Total equity 2,813.1 116,822.4
Liabilities 113.0
Non-current liabilities 5,191.0
( a ) F in a n c ia l lia b ilitie s
Borrowings 17(A) 4,512.0
(b ) Provisions 18(A) 65,732.1 558.6
(c ) Deferred tax liabilities (net) 10(B) 2,352.8
336.1 105.7
(d ) Other non-current liabilities 2 1 (A )
26,435.2
Total non-current liabilities 16,614.6 7,529.1
Current liabilities 8,839.5
( a ) Financial liabilities 1,808.8
662.7
(i) Borrowings 17(B) 120,429.0 40,313.4
(ii) Trade payables 19 264,543.7
( A ) total outstanding dues of micro enterprises andsmall enterprises and 308.3
( B ) total outstanding dues of creditors other than micro enterprises and small enterprises 23,420.7
(iii) Other financial liabilities 20 15,045.2
4,629.0
(b ) Other current liabilities 21 (B)
1,972.8
(c ) Provisions 18(B)
969.5
(d ) Current tax liabilities (net) 22

Total current liabilities 86,658.9

TOTAL EQUITY AND LIABILITIES 211,010.4

Summary of significant accounting policies 2.3

 C O N S O L I D A T E D S T A T E M E N T O F P R O F IT A N D L O S S
(All amounts are in Indian Rupees in millions, except for share data and where otherwise stated)

Note Year ended Year ended

31 March 2019 31 March 2018

I IN C O M E
Revenue from operations 23 1 9 5 ,6 3 5 . 5 1 6 4 ,9 9 8 .3
Other income 24 1 ,5 5 3 . 2 1 ,0 1 9 .8
TOTAL INCOME (I) 1 9 7 ,1 8 8 . 7 1 6 6 ,0 1 8 .1
II EXPENSES
Cost of materials consumed 25 7 4 , 4 4 9 .9 5 6 ,2 9 3 .8
Purchases of stock-in-trade 1 9 , 4 3 2 .0 1 6 ,0 5 8 .8
Changes in inventories of finished goods, stock-in-trade and work-in-progress 26 (6 ,7 5 5 .5 ) (4 , 8 2 5 .2 )
Employee benefits expense 27 2 5 , 8 4 8 .7 2 1 ,3 0 8 .4
Finance costs 28 2 ,6 2 6 . 0 7 7 7 .2
Depreciation and amortisation expense 29 6 ,6 7 9 . 5 5 ,5 7 9 .7
Other expenses 30 4 3 , 1 4 1 .0 3 8 ,4 4 5 .0
TOTAL EXPENSES (II) 1 6 5 ,4 2 1 . 6 1 3 3 ,6 3 7 .7
I I I PROFIT BEFORE SHARE OF PROFIT OF JOINT VENTURES, EXCEPTIONAL ITEMS 3 1 ,7 6 7 .1 3 2 , 3 8 0 .4
AND TAX (I-II)
IV Share of profit of joint ventures (net of tax) 2 7 .0 3 1 .4
V PROFIT BEFORE EXCEPTIONAL ITEMS AND TAX (III+IV) 3 1 , 7 9 4 .1 3 2 ,4 1 1 .8
VI Exceptional items 48 8 8 0 .6 -
VII PROFIT BEFORE TAX (V-VI) 3 0 , 9 1 3 .5 3 2 ,4 1 1 .8
VIII TAX EXPENSE 31
Current tax 7 ,1 2 0 . 7 7 ,1 2 3 .0
Tax credit - Minimum Alternate Tax (MAT) (5 1 0 .0 ) (4 3 3 .2 )
Deferred tax 6 5 7 .8 1 ,4 9 2 .9
TOTAL TAX EXPENSE (VIII) 7 ,2 6 8 . 5 8 ,1 8 2 .7
IX PROFIT FOR THE YEAR (VII-VIII) 2 3 , 6 4 5 .0 2 4 ,2 2 9 .1
X OTHER COMPREHENSIVE INCOME
(A) Items that will not to be reclassified subsequently to profit or loss:
(i) Re-measurement of defined employee benefit liability (2 6 . 1 ) (3 6 .7 )
(ii) Income-tax relating to items that will not be reclassified to profit or loss 1 0 .7 1 3 .1
(B) Items that will be reclassified subsequently to profit or loss:
(i) Exchange differences on translating the financial statements of foreign operations (2 6 . 6 ) 1 ,5 1 9 .1
(ii) Income-tax on items that will be reclassified subsequently to profit or loss - -
TOTAL OTHER COMPREHENSIVE INCOME FOR THE YEAR (NET OF TAX) (X) (4 2 . 0 ) 1 ,4 9 5 .5
XI TOTAL COMPREHENSIVE INCOME FOR THE YEAR (NET OF TAX) (IX+X) 2 3 , 6 0 3 .0 2 5 ,7 2 4 .6
Attributable to:
Owners of the Parent Company 2 3 , 6 0 5 .3 2 5 ,7 2 7 .2
Non-controlling interest (2 .3 ) (2 . 6 )
OUT OF THE TOTAL COMPREHENSIVE INCOME ABOVE,
Profit for the year attributable to:
Owners of the Parent Company 2 3 , 6 4 7 .3 2 4 ,2 3 1 .7
Non-controlling interest (2 .3 ) (2 . 6 )
Other comprehensive income attributable to:
Owners of the Parent Company (4 2 . 0 ) 1 ,4 9 5 .5
Non-controlling interest - -
X I I EARNINGS PER EQUITY SHARE: 34
(i ) B a s i c (i n ` ) 4 0 .3 6 4 1 .3 6
(i i ) D i l u t e d (i n ` ) 4 0 .3 6 4 1 .3 6
Nominal value per equity share 1 .0 0 1 .0 0
Summary of significant accounting policies 2.3
Consolidated Balance Sheet
(All amounts are in Indian Rupees in millions, except for share data and where otherwise stated)
Consolidated Statement of Profit and Loss
(All amounts are in Indian Rupees in millions, except for share data and where otherwise stated)