ABSTRACTThe Indian biotechnology industry has become an attractive destination for foreign companies largely due to the increasing amount of governmental support. The budgetary allocation to the department of biotechnology has tripled in the last five years. The department’s budget is forecasted to increase further, as the biotechnology industry is expected to help India achieve an average growth rate of 9% during its current 11th five year country plan.The project was conducted to know about the bio pharma industry in India

and to know about the Celestial Labs Ltd. The financial performance of the company is analyzed and how the company is performing in the past few years.One of the main findings was that the company having a considerable increase in total profit which shows the operating efficiency of the company. The main suggestions was the company should keep the working capital as ideal, if it is high, indicates the wastage of money otherwise inadequate working capital.

INTRODUCTIONFinance is regarded as the lifeblood of a business enterprise. The test of success of business enterprise is its ability to earn profits and continue its operation and growth. Profit earning is considered essential for the survival of business. A business needs profits not only for existence but also for its expansion and diversification. Profitability is barometer for measuring efficiency and economic prosperity of a business enterprise.

• Celestial Biolabs Ltd (CBL) is an ISO 9001-2001 certified company with a decade of experience in Insllico Drug Discovery and Development, and contract research services.

• *Celestial Biolabs is recognized by DSIR (Govt. of India ) for its R&D endeavors in the Insilco Drug Discovery software development..

• *Celestial has been providing customized solutions and services in Bio-IT as well s research services over a decade.

 company Celestial Biolabs Limited, based in Hyderabad, Andhra Pradesh, India. Celestial Biolabs Ltd is a public listed ISO 9001-2000 company, established in the year 1997. Celestial Biolabs Ltd manufactures high quality of Herbal, Nutraceuticals at its factories in Hyderabad (Andhra Pradesh) and Dehradun (Uttaranchal) and markets in India and Abroad. 

FINANCIAL STATEMENTS :

the basis for decision making by the management as well as other outsiders who are interested in the affairs of the firm such as investors, creditors, customers, suppliers, financial institutions, employees, government researchers and general public. It is a collection of data organized according to logical and consistent accounting procedures. Its purpose is to convey an understanding of some financial aspects of a business firm.

The term financial statement generally refers to two statements:1) The position statement or the balance sheet2) Income statement or the Profit and Loss Account

The primary objective of financial statement is to assist in decision

making.

Other objectives are:

1)To provide reliable financial information about resources and obligation of a business firm.

2)To provide reliable information about changes in such economic resources and obligations.

3)To provide financial information that assist in net earning potentials of business activity.

4)To provide financial information that assist in estimating the

Earning potentials of business.

5) To disclose, to the extent possible other information related to the financial statement that is relevant to the needs of the users of these statements.

FINANCIAL ANALYSIS :

Financial analysis is the process of identifying the financial strength and weakness of the firm by properly establishing relationship between the items of the balance sheet and Profit and Loss account. The management of the firm can undertake financial analysis or by other parties outside the firm like owners, creditors and other interested parties like bankers, journalists,

legislatures, politicians etc. Accounting to Myers, Financial statement analysis is largely a study of relationship among the various financial factors in a business as disclosed by the trend of these factors as shown in a series of statements.For the purpose of analyses individual items are studied; their interrelationships with other related figures established, the data is sometimes rearranged to have better understanding of the information with the help of different techniques or tools for the purpose. Analyzing financial statements is a process of evaluating relationship between component parts of financial statements to obtain a better understanding of a firm’s position and performance. The analysis is financial statements thus refers to the treatment of the information contained in the financial statements in

way so as to afford a fulldiagnosis of the profitability and financial position of the firm concerned. For this purpose financial statements are classified methodically, analyzed and compared with the figures of previous years or other similar firms.The purpose of financial analysis is to diagnose the informationcontained in financial statement so as to judge the profitability and financial soundness of the firm. Just like a doctor examines his patient by recording his body temperature, blood pressure etc., before making his conclusion regarding the illness and before giving his treatment. A financial analyst analyzes the financial health or weakness of an enterprise. The financial analyst has also to be careful, about the impact of price level changes, window dressing of

financial statements changes, in according policy of a firm, accounting concept and personal judgment.The future plan of firm should be laid down by the management in view of the firm’s financial strength and weaknesses. The nature of financial analysis will differ depending up on the purpose of the analyst. The creditors are interested to know about the liquidity position of the firm; the suppliers of the long-term debt are interested in knowing about the firm’s profitability.

OBJECTIVES OF THE STUDY :

The objectives of the study are:-

• To evaluate the overall financial performance of CELESTIAL BIO

LAB LIMITED.

• To assess the liquidity and solvency on CELESTIAL BIO LABLIMITED.

• To get an idea about the profitability and solvency of CELESTIALBIO LAB LIMITED.

• To analyze the long-term financial position of CELESTIAL BIOLAB LIMITED.

• To make suitable suggestions for improvement, for the futurebenefit of CELESTIAL BIO LAB LIMITED.

SCOPE AND SIGNIFICANCE OF THE STUDY :

Scope of the study : -

This study concentrates on the financial performance of CELESTIALBIO LAB LIMITED

SIGNIFICANCE OF THE STUDY:-

Profitability is an indication of the efficiency with which the operations of the business are carried on. The main objective of this study is to evaluate the general financial performance CELESTIAL BIO LABLIMITED.

Financial analysis is helpful for providing guidelines to the guidelines to the management and assists them to take future decisions. This analysis helps the management to assess their financial position. This study also helps the general public to evaluate the performance of the company achieving in social objectives.

METHODOLOGY

The methodology used involves method used for collecting the data. Thedata collection involved two types of data.

1) Primary data2) Secondary data

Primary data :

Primary data is the data which is collected by the researcher directly from his observations and experiences. For example, if the researcher conducts a survey for the collected of data then it is known as primary data.

We have got the data from the employees of the company.

Secondary data :

Secondary data is data that has already been collected and collated by somebody for some reason other than the current study. It can be used to get a new perspective on the current study, to supplement or compare the work or to

use parts of it, as another study may prove costly and time consuming.Secondary data can further be divided into two parts. Qualitative data includes biographies, personal letters, diaries, records, documents, published material, computer database, policy statements, etc. Quantitative data would have market research, census, and Economic documents, planning documents or specimens. The list is endless and once the type of secondary data is identified, it becomes easy to locate the source.Here we have collected the secondary data from internet, books andReports.

LIMITATIONS OF THE STUD Y

• Since the project is done in only two months duration, we could not go in depth into all the aspects affecting the financials of the company.

• There are no companies which are matching with the exact profileof this company. Hence, comparison with peers is also a challengeto our study.

INDUSTRY PROFILE

The bio-pharma market having grown at 16.5% from 2004’s revenue of

$60.7billion was valued at $70.8 billion in the year 2005 (Vision Gain report 2005). At present, the US is dominating the biotech market. The major thrust in biotechnology is in bio-pharmaceuticals, with more than 350 products under various phases of advanced clinical trials. In the US alone, more than 90 new products have been approved by the FDA, while more than 2000 products are under development. India being on the threshold of biotech revolution has 280biotech and 180 bio suppliers contributing to the total biotech market worth$1.07billion. The Indian biotech industry in 2004-05 registered revenues of Rs.4,745 crore recording a 36% growth compared to the previous year.This sector offers good growth potential. Drug molecule development and allied services are growth areas in bio pharma

industry and successful product innovations results in company commanding good premium in the market.

These are exciting times for the Indian biotechnology industry. The industry has doubled in size within the last two years buoyed by a strong growth in biotech exports. In the year 2006-07, it passed the USD 2 billion mark in revenues and registered a 31% growth rate as compared to the fiscal year of 2005-06. The Indian biotechnology industry offers immense potential for investments thanks to its large market place, strong government support and low-cost English speaking professionals. The industry currently has around 340 companies which employ25,000

technologists and the latter is expected to double by the year 2010.The biotechnology market in India consists of agricultural biotechnology industrial biotechnology, bioinformatics, biopharmaceuticals and biotechnology related services, with the last two being the main pillars of growth.The biopharma sector leads the pack having generated 70% of the total industry’ srevenue. Domestic firms dominate this sector, accounting for fourteen of the top twenty firms.The biopharma sector is comprised of 130 companies involved mainly in the production of vaccines, therapeutic drugs, animal biologicals, statins and diagnostics. Vaccine production is the most profitable, with five of the top ten companies in the bio pharma segment dealing primarily in vaccines.

Interestingly enough, even though there is a large domestic market for such products, the Indian bio pharma sector is export-driven, with exports accounting for more than 58% of revenue in 2006.Bio service is another fast-rising segment in the Indian biotechnology industry, recording a growth of 70% in revenues in 2005-06. Bio services mainly included clinical research and contract research organizations (CRO) and to some extent, custom manufacturing. There are 70 companies in the sector offering services in areas such as data management, clinical trials, site management, bio-equivalence, toxicity studies and knowledge process outsourcing for pharmaceutical companies.Nascent attractivenessThe Indian Government plans to follow the American biotechnology industry

model, where governmental investment only accounts for 20% of the industry’ stotal funding. Hence, the government has come out with a list of incentives to attract foreign direct investment into the biotechnology industry. These incentives include a 150% weighted tax deduction on R&D expenditure; a three-year excise duty waiver on patented products; and 100% foreign equity investments in the manufacturing of all drugs (except recombinant DNA products and cell targeted therapies).Currently the top three biotech hubs are located in Bangalore, Hyderabad and Pune. Bangalore today is the most popular choice for most biotech companies due to its highly developed infrastructure and networking options. More than half of biotech firms based in India can be found in and around

Bangalore. Leveraging on a well-trained talent-pool, MNC’s such as Novo Nordisk and Reametrix have setup operations there. Indian Department of Biotechnology’s budget increases threefold over last five years.India’s scientific knowledge pool stands at 3 million graduates, 700,000 post-graduates and 1,500 PhD’s. A comparison of several countries shows that these numbers are increasing in India annually at a faster rate than in other countries. India is estimated to add 690,000 graduates annually which is significantly higher than in China, Japan, the United States, or Europe.Key Indian opportunities for outsourcing are available in bio-processing, drug discovery and in clinical research. The cost differential for drug discovery between the United States and India is

around 75%. In India, a drug discovery process maybe around USD 200 million in versus USD 800 million in the US. India has now become a key destination for outsourced biotechnology R&D. Clinical trials cost30% less to carry out in India than in Australia and about 50% less than in the US.On average for 2005, the starting annual salary for an Indian PhD biotechnology scientist in India with no experience was USD 15,000, whereas a counterpart in the United States or Singapore would cost around USD 80,000 and 64,000respectively. However, the growing demand for talent against a short supply is increasing India’s labor costs. As a result, any cost advantage is dwindling fast.

There are several complications that may arise as a result of operating in India. These include operational disruptions caused by worker disputes, interrupted power supplies, and antiquated transport infrastructure in many regions. Also animal rights activists, religious and cultural barriers may disrupt operations given the Indian reverence for certain animals such as cows, monkeys and snakes.The main problems that foreign investors face include the presence of bureaucracy, corruption, the lack of precise ethical regulations and inadequate intellectual property (IP) protection and enforcement. The Indian biotechnology sector is governed by five central ministries and six state ministries which have created lot of red tape complications when it comes to ruling

decisions and new product launches. A new product launch, for example, has to clear not only the district and state ministries but by also several national regulatory bodies.

Finally, there is a lack of IP protections to guard against corporate theft and copy cats. In the past, many Indian biotech firms faced theft either from their employes, running away with vital product data, or by the hacking of their databases by external parties. In an industry where a single product can spell success, stolen ideas translate to millions of dollars. Although India has a proper English-based legal system, many employers are unwilling to take their employees to court due to the slow judiciary process. India has begun to tackle its copyright troubles with recent

changes in intellectual property regulations. For example, there has been a restructuring of patent laws to focus on product protection rather than only process protection. This allows companies to patent their final product and as well as the processes that lead up to that product. This reduces the

opportunity for copying and is

the right start in the improvement of IP regulations in India.

India’s biotechnology industry is on a roll. It has already a strong global presence, producing the fourth largest volume of products in the world. Revenues could increase to a formidable USD 25 billion by 2015. India’s vast pool of skilled manpower, huge patient base and relatively low costs drives many global biotech giants to partner, acquire or outsource to Indian companies. Likewise, some of the begun acquiring foreign entities in the Unites States and Europe, to retail their products and expand product offerings.The success of Indian companies in reducing the prices of drugs, has made most multinationals realize that it is now impossible to ignore India. A good illustration: Hyderabad-based Shantha

Bio technics, which offers a combination vaccine for Hepatitis-B for USD 2 per dose versus USD 5 per dose by MNC’s such as Chiron.Major improvements are needed for India’s biotech industry to surge. First, there needs to be more protection and enforcement of intellectual property rights. Secondly, regulations to control the testing of products on unsuspecting patients need to be put in place. Lastly, the government needs to streamline all of the biotechnology activities under one body, to simplify proceedings and to create some transparency for investors in the industry.

COMPANY PROFILE

CELESTIAL BIO LABS LIMITED was incorporated as a Private Limited Company on November 19, 1997 as "Celestial Technologies Private Limited". The subscribers to the memorandum were Mr. Rajani Kanth Katragadda and Mr. Vijay Marur. The company was later converted into a Public Limited Company under the name "Celestial Technologies Limited" on December 6, 1999 and has been subsequently renamed as "CELESTIAL BIO LABS LIMITED" effective from February 13, 2004. The present promoter of the company is Mr. Aditya Narayan

Singh. The Original promoters sold their holding to the present promoter on7.11.1998.CELESTIAL BIO LABS LIMITED is a Hyderabad based ISO 9001-2000 certified company. It has been providing customized enterprise solutions, bio informatics services and also involved in development of biopharmaceuticals and industrial enzymes. CELESTIAL BIO LABS is in contact with Centre for Cellular &Molecular Biology (CCMB) under the aegis of Council for Scientific and Industrial Research, Ministry of Science and Technology, Government of India and Indian Institute of Chemical Technology (IICT), premier chemical and Biological Institutions in Hyderabad to work on collaborative research projects to be funded by Department of Science and Technology New Delhi. The

in-house research and development centre of CELESTIAL BIO LABS is recognized by the Department for Scientific and Industrial Research, Ministry of Science and Technology, New Delhi.

Major Events in the history of the Company are given below:In the Year 1997 company is incorporated. In the year 1999 Conversion of Private Limited Company to Public Limited Company and Change of Management has taken place. 2004 ISO Certification 2004 Development of a de novo drug design tool" CELSUITE" 2004 Change of name from Celestial Technologies Limited to Celestial Labs Limited 2004 Developed a bio-molecule to treat Vitiligo 2005Designed a bio- molecule to treat multi cancer.

The company has developed a de novo drug design tool "CELSUITE" to aid the pharma industry in discovering new molecules for curing different diseases. This tool will enable the company not only to design new molecules for its own purpose but also to provide the bio-informatics services to the various pharma and biotech companies. This tool has filed for protection of the IPR under the Copy Right Actvide Dairy no 147-151 /05 on 20.06.2005 to the department.Based on the company's in silico expertise (applying bioinformatics tools), the company has developed therapeutic molecules to treat Leucoderma and multiple cancers. The cloned molecules are being subjected for purification by the wet lab procedures at the company's collaborative Institute, Department of

Microbiology, Osmania University, Hyderabad.In the industrial biotechnology area, the company has signed the technology transfer agreement with IMTECH Chandigarh (a very reputed Council of Scientific& Industrial Research organization) for the manufacture of two industrial enzymes- alpha Amylase and alkaline Protease. Initially these would be marketed in India and later overseas.The company has initiated setting up of a biotechnology facility to develop its drug molecules and manufacture industrial enzymes. This facility would also include there search laboratories for carrying out further R & D activities to develop new related products for reducing wrinkles / stretch marks and acceleration of wound healing from the same chemical structure of vitiligo. The

proposed facility will beset up at Shapoorji Pallonji Biotech Park in Genome Valley at Hyderabad in Andhra Pradesh.The company has also plans to cater to the laboratory process outsourcing by using innovative platform technologies/services in the field of analytical laboratory andbio-computational systems. The company is positioned to drive innovations and support activities in post genome advancements via clinical trials (CT) and laboratory process outsourcing (LPO) to be a significant player in personalized medicine in select disease areas.2009- Celestial BIO Labs Ltd has informed that the Board of Directors of the Company by a resolution passed by circulation has appointed Mr. Subhash C

Srivastava as an Additional Director of the Company w.e.f. April 15, 2009.

VISSION N MISSION:

To be leading global life science company integrated with technology solutions.

By providing cost – effective integrated Bio –IT and bio services to hasten .

Drug Discovery and Development.

MANAGEMENT :

* Dr. A . N. Singh Chairman & managing director* Dr. D. C. Sastry Director

* Smt. Padma Singh Director

* Mr. B. Siva Kumar Director

* Dr. Jeetainder Roy Gour Director

PACKAGED TOOLS AND SERVICES

Informatics : Celestial has developed its own ERP that has been packaged and integrated with SAP and Microsoft focussed on Biopharmaceutical and Healthcare industry in the verticals of pharma, chemicals, bulk drugs, biotechnology, hospitals and medical retail chains

Bioinformatics :

Celestial has developed inhouse bioinformatics toosl like Celsuite , CLLtox, DNA Kutter, Gene annotator and PDC database (Plant Disease and Chemicals Database). Celestial provides customized services to Biotechnology / Pharmaceutical industries and Medical Research centres in the area of New Drug Molecule development,Iinsilico Toxicity Prediction and Molecular modeling by utilizing the tools developed by Celestial.       

IT Enabled Services :-

Bio and Health Care segment are one of the main objectives at Celestial Biolabs Limited to serve the Medical & Health Care fraternity.CELESTIAL represents a comprehensive suite of Pharma, Bio-pharma and Biotech manufacturing with customized IT solutions and variety of IT Enabled Services that are offered to companies engaged in health care services including Hospitals, Clinics and Medi-claim Insurance.

Technology At Celestial, technology is at the forefront of business. Our state-of-the-art hardware, software, database systems and telecommunication networks enable the delivery of efficient and accurate solutions.

Having international quality systems, world class infrastructure and expert human resources, today Celestial is the preferred choice for many market leaders across the globe.

Human ResourcesThe strength & spirit at Celestial is personified by its talented employees. ‘Team Celestial’ consists of trained & motivated employees, who are honed by continuous skill up gradation. A friendly informal atmosphere, task ownership and empowerment, enable even the youngest of employees to contribute towards converting the most arduous activities into smooth, efficient and robust processes.

Focus Our current team strength is 60 FTE and in the process of scaling it up by 300 FTE in an year’s time.

Our StrengthCELESTIAL has good delivery capabilities in the following areas of ITes: 

       Medical

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  Training

The training requirements for the employees are identified by the employee, Team Leader and the Training Manager. These training programmes will then be incorporated with employee work schedule.

The employee training requirements are classified as mandatory, optional and good to know depending upon the skill set of the employee and project requirements.

The employee training is incorporated with the employee review system.

Our CustomersCELESTIAL is geared to provide scalable services that meet the volume-intensive processing & Customer Care needs of it's clients located across the globe.

Our satisfied and growing customer list stand testimony to the quality of services offered at CELESTIAL.PricingPricing for our services is project based. Depending on the nature and complexity involved our pricing models vary.

HERBAL FORMULATIONS :    

Celestial has a strong research team that formulates & developes the different herbal products, analyze by using accredited labs approved by Ayush. After getting the analysis report from the agencies approved by Ayush, Celestial gets clinical trails and reports by a team of senior practicing doctors and submits to Ayush for approvals.Celestial has already been licenced 55 herbal products for manafucturing.

     

Biovita granules C-kaps  Herbal drink for Health and Intellect   New horizon in

the treatment of neuro muscular & cerebrovascular disorders

Cel-digest tablets Gynocel syrup  Indigestion, acidity, & burning sensation   Effective in all

kinds of gynecological disorders

Cel-clear syrup Bioliv syrup  Blood purifier   A complete

liver tonic

Dermacel capsules Cel-dstres capsules

  Adjuvant in allergic dermatitis   Manages stress & anxiety naturally

Ventilair tablets Haemoplus syrup

  Effective in Bronchitis & Bronchial Asthma

  A Natural Haematinic Syrup

Turmek capsules Relifin capsules  Natural antioxidant formulation   For sinusitis ,

UTRI & Fever

Bio-Dnorm capsules Bio-power tablets

  For Diarrhoea, Dysentery & Amoebiasis   For Vigour & Vitality

Glucocel tablets Bio-sleep tablets

  For Type I & II Diabetes Mellitus   A Non Habit Forming Natural Tranquilizer.

Cel-lax syrup Ashwagandha Lehya

  A Non Habit Forming Laxative   For power, Stamina, Health & Longevity

Ratnapurush Lehya Dhatu pearls capsules

  For Sexual power, Stamina, Health & Longevity

  Herbal Aphrodisiac

Lactocel granules Healthone syrup  As galactagogue it stimulates lactation   A health

promoter fortified with dry fruits

Cel-digest syrup Pamasulfin  Natural digestive syrup   Effective in

fungal infections

 

SYNTHETIC FORMULATIONS :-

Celestial Biolabs Limited has established the new standards of health assistance by catering the Pharmaceutical Medicines in global markets. Our state-of-the-art manufacturing facilities strategically located at Dehradun, Uttaranchal is WHO-GMP Compliant and ISO-9001-2000 certified. The company is primarily engaged in manufacturing, contract manufacturing, exporting of

wide range of pharmaceutical products like ointments, creams, syrup, tablets, capsules in beta and non beta lactum categories.

Celestial Biolabs invites contract manufacturing from reputed Pharma Companies in India and overseas. Integrated drug development services at Celestial Biolabs help our customers with greater flexibility, speed and cost effectiveness whilst minimizing supplier complexity.

BIO-VITA   (SEA WEED - BIO ORGANIC GROWTH REGULATOR)

                With Vitamins C,B1,B2,B12,D3,E,K +   Seaweed    

 

 ©All rights reserved. Shalimar Group, Dubai, UAE. 

Bio-vita is nourishing mixture formed from useful bio-ingredients, which are necessary for growth of crops in proportionate quantity.

Bio-vita is an Herbal concentrate made out of Seaweed and herbal extracts.

Seaweed Fertilizers contain a comprehensive range of nutrients and other organic compounds making them suitable for all plants and crops. Seaweed extract products can improve plant growth, vigour and yields because it contains plant nutrients and microelements together with diverse range of organic compounds.

A wide range of vitamin C, B1, B2, B12,D3, E, & K. Niacin,

Pantothenic, Folic and Folinic acids also occur in algae.

Speciality for this product as it contains stimulatory and anti-biotic elements. The application of Bio-Vita results in higher resistance to fungal, bacterial and insect attack. Anti bacterial activity, anti viral activity and anti fungal activity are enhanced and the harmful effects of some pathogens can be reduced.

Bio-vita stimulates physiological activities in plants and accelerates production of Cytokine in the root zone of plant. The growth of plant is enhanced. Also L-Cystene stops flower drop and fruit bearing is increased. The quality of crop is improved because of the addition of vitamins.

Advantages:

Bio-vita is useful for leaf size enlargement and berry bearing development. For nourishment of plants the available nutrients from soil and hormones constitutes the elements. Among them, the balanced nutrients are contained in Bio-vita. Due to the application of Bio-vita the physiological process of plants, photosynthesis enhances and intensifies. As a result, the vegetative growth increases and plants grow fully.

Dosage: Spray Bio-vita @ 5 ml/ lit of water. 2-3 sprays every 14 days works effectively.

Spraying should be done either before sunrise or after sunset.

Packing 50ml, 100ml, 250ml, 1000ml & bulk.

Previous

Benefits of the product :-

HERBAL PRODUCT CALLED BIOVITA

It is useful for students, office executives and businessmen, who suffer from stress and mental pressure.

It improves logical memory, learning

process and treats general debility.

It improves short term memory, intermediate & long term memory.

It reduces senile dementia, anxiety and insomnia.

It also boosts immunity.

R & D Activities :-

Celestial will continue to upgrade packaged ERP and Bioinformatics’ tools to meet the latest requirement of various clients. Celestial is in advance stage of clinical trials of new bio peptide molecules applicable for the treatment of

Vitilogo Psoriasis Wound healing Anti wrinkles Wrinkles and skin aging Skin tan

Celestial is in the process of developing formulations particularly bytaking the molecules that has become of patatents combining with newherbal and enzyme ingredients to improve the efficacy and reduce theside effects of new combination drugs.

Major strengths:

Technical expertise Process adherence Domain knowledge Quality policies Better ROI Market competence

Modules of SAP been implemented :

Financial Accounting

Customer Relationship management

Sales & distribution

Global trade services

Supply chain management

Material management

Work flow

Industry solutions for public sector

FINANCIAL ANALYSIS OVERVIEW

Nature of Financial Statements

Financial statements are prepared for the purpose of presenting a periodical review or report by the management and deal with the state of investment in business and result achieved during the period under review. They reflect a combination of recorded facts, accounting conventions and personal judgements. Only those facts, which are recorded in the business books, will be reflected in the financial statements. For example, fixed assets are recorded in the books at cost price and shown in the balance sheet

at cost price irrespective of their market and realizable price. Again, financial statements are prepared by following certain principles, which are in use from a long time. For example, the conservatism principles indicates that all the anticipated losses are to be provided whereas all the anticipated profits are to betaken into account while preparing financial statements. Such conventions will not reflect the true position of the business, as the actual position of the business will definitely be better as compared to the position depicted from the financial statements.

The following points reflect truly the nature of the financialstatements of the business entities

i. These are reports or summarized review about the performance,achievements and weakness of the business.

ii. These are prepared at the end of the accounting period so that the various parties may take decisions of their future action in respect of the relationship with the business.

iii. The reliability financial statements depend on the reliability ofaccounting data. These statements can not be said true and fair representatives of the strength or profitability. There are numerous frauds and defalcations in accounts.

iv. The figures in the financial statements are a combination of recorded facts. There may be certain development and factors which may be very important for the business, are not taken into account, as these are not recorded in the routine of the accounting. More over, fixed assets are recorded values without taking into consideration the change in their value due to the fluctuations.

v. These statements are to be prepared as per accounting standards

and conventions.

vi. These statements are influenced by personal judgement of the accountant though he is expected to be more objective in his approach. These judgements may relate to valuation of inventory, depreciation of their fixed assets and while making distinction between capital and reserves.

TYPES OF FINANCIAL ANALYSIS:

A distinction between various types of analysis on the basis of:

A. Material useB. Objectives of analysisC. According to the modus operandi of the analysis

ON THE BASIS OF MATERIAL USE

1. EXTERNAL DATA –

This analysis is done by the outsiders who do not have access to the detailed informal accounting records of the

business firm. The outsiders include investors, creditors, potential government agencies and the general public. The position of the external analyst has been improved in recent times owing to government

regulations requiring business undertaking to mate availabledetailed information to the public through audited accounts.

2. Internal Analysis :

The internal analysis is accomplished by those who have access to the books of accounts and all other information relate to the business analysis for managerial purpose is the internal type of analysis and is conducted by employees and

executives of the enterprise as well as governmental and cost agencies, which mayhave a major regulatory and jurisdiction over the business

On the basis of objectives of analysis :-

1. Short term analysis :

This analysis is mainly concerned with the working capital analysis. In the short run, a company must have ample funds readily available to meet its currents needs and sufficient borrowing capacity to meet the contingencies. In short term analysis current assets and current liabilities are analysed and liquidity is determined.

2. Long term analysis :

In long term analysis, a company must earn a minimum amount sufficient to

maintain a reasonable rate of return on the company and to beat the cost capital. Thus in the long term analysis, the long run stability and earning potentiality of the company is analysed

On the basis of modus operandi of analysis :

Thrre are 2 types of financial analysis on modus operandi.

1. Horizontal Analysis –it refers to comparison of financial data of a company for several years.

2. Vertical Analysis (static analysis)- it refers to study of various items to thefinancial statements one accounting period.

TOOLS OF FINANCIAL ANALYSIS

The analysis and interpretations of financial statements is used to determinethe financial position and results of operation as well.

1. Comparative statement-These are statements of different periods of timeIt showsa. Absolute figures of comparing yearsb. Changes in absolute figurec. Absolute data in terms of percentages

I. Comparative balance sheet - it is study of the trend of items and computed items in two or more in balance sheets ofthe same business enterprise on different dates.

II. Comparative income statement- it gives the results of theoperation of a business and progress of business over a periodof time.

1. Trend analysis-The financial statements may be analyzed by computing trends of series information. It determines the direction upwards or downwards and involves the computation of percentage relationship that each statement items bears to the same item I base year.

2. Common size statement-These are shown in analytical percentages. The figures are shown as

percentages of total assets, total liability and total sales.

a. Common size balance sheet – a statement in which balance sheet areexpressed as the ratio each asset to total asset and the ratio eachliability to total liabilities.b. Common size incomes statement -the items in income statement canbe shown as percentage of sales to show the relation of each item tosales

1. Funds flow statement-The funds flow statement is designed to analyze the change in thefinancial

condition of business enterprise between two periods. One word‘fund’ is use to denote working capital.

2 Cash flow statement-It is a statement of changes in financial position of firm on cash basis.a. It enumerates net effects of the various business transactions on cashand takes in to account receipts and payment of cashb. It summarizes the causes of changes in cash position of a businessenterprise between dates of balance sheets.

1.Ratio analysis-A ratio is an expression of the quantitative relationship between twonumbers.

a. It is technique of analysis and interpretations of financial statements.b. It is the process establishing an interpreting various ratios for helpingin making certain decisions.

1.Marginal costing-The institute of cost and management accountants London has defined “the ascertainment of marginal costs and of the effect on profit of changes in volume or type of input”.

2. Standard costing-a. A predetermined cost which is calculated from management’sstandards of efficient operation and the relevant necessary expenditure

b. A technique of cost accounting which compares the standard cost of each product or service with actual cost to determine the efficiency of the operation

so that any remedial action may be taken immediately.

COMPANY FINANCIAL PERFORMANCE

Celestial Bio labs Ltd. announced unaudited earnings results for thefourth quarter and full year ended March 31, 2010. For the quarter, thecompany reported net profit from ordinary activities after tax of INR3.68 million or INR 0.31 per diluted share on net sales/income fromoperations of INR 51.45 million against net profit from ordinaryactivities after tax of INR 14.64 million or INR 1.31 per diluted share onnet sales/income from operations of INR 54.47 million in the sameperiod of last year. Profit from operations before interest and tax wasINR 4.36 million against INR 15.30 million in the same

period of lastyear. Profit before tax was INR 4.13 million against INR 14.80 millionin the same period of last year. For the full year ended March 31, 2010,the company reported net profit from ordinary activities after tax of INR59.27 million or INR 4.94 per diluted share on net sales/income fromoperations of INR 246.21 million against net profit from ordinaryactivities after tax of INR 53.10 million or INR 4.74 per diluted share onnet sales/income from operations of INR 192.51 million in the sameperiod of last year. Profit from operations before interest and tax wasINR 71.37 million against INR 60.53 million in the same period of lastyear. Profit before tax was INR 70.98 million against INR 59.87 millionin the same period of last year.

COMPARATIVE BALANCE SHEET

According to the available data, the industry rivals like Sun Pharma, Cipla, Ranbaxy, Dr. Reddy etc. are well established players in the market. On comparison with Celestial Biolabs,

which is a small player in the industry, but highly diversified in the field of Pharma, Bio-technology, Software etc. shows acommendable performance in the past years.One of the point to be noted is that the other rivals have invested substantialamount in investment compared nil to Celestial Biolabs.Another major aspect of the analysis would be the comparison of current liabilities to provisions in different firms. Celestial Biolabs has provided a significant amount for provisions compared to liabilities when compared to Cipla and Ranbaxy.On the whole, Celestial Biolabs has a long way to go in the industry and need toestablish strong based to compete with the fellow peer members of the industry.

FINDINGS : -

Celestial Bio lab has shown credible performance in the past. Atpresent the company shows potential for a higher performance.The company has to work on its pricing policies and competitivestrategies to stand out of the herd.

The most impressive aspect about Celestial Bio labs is its strength to with stand the global financial turmoil. Even in the times of credit crunch and global crisis, Celestial Biolabs performed extremely well on financial aspects.• According to the, operating profit margin, the firm shows a slightlyhigher financial risk in the short term.• The gross profit margin also depicts that in the recent times therehas not been effective utilization of resources.• The net profit margin shows a lower safety of margin, resulting inchallenging pricing policy during the short term.• Even return on net worth gives a graph of lower shareholderequity, hence opening opportunity for fresh equity investments.

• The current ratio provides a very positive sign for the firm. It notonly confirms dynamic cash flow but also an opportunity to growin the longer term.• Quick ratio is higher than the standards and hence is favorable innature.• Interest Coverage ratio, depicts a lower ability to pay interest onlong term borrowings and dividends on preference shares.• As of now there is a lower ability to generate sales in the shorterrun, but has a growth option in future, according to fixed assetsturnover ratio.

SUGGESTIONS :-

Celestial Bio labs has established itself as an effective player in the market. In order to maintain the present status and increase its financial performance, it should concentrate on generating more sales by enforcing competitive pricing, which is only possible with a higher fixed asstes.As for now, company need not worry about its payment of interest on long term borrowings and dividend payments

as it has a bright future and a strong financial base.

CONCLSION

Celestial Bio labs is established by renowned scientist from ICRISAT,Dr. A.N. Singh, and can be valued very high on its intellectual capital.The company’s share price movements shows a corrective formation which is also supported by Earnings per share value. As EPS has for media base and has provided strong support for the company.There is a constant increase in the book value which depicts a constantgrowth in company’s financials.

The final conclusion would state that Celestial Biolabs, is an attractive investment opportunity for long term, but investors should be cautious in investing with a short term objective.