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of free reserves. Of the total equity
capital, the promoters held 39.43% as at
March 31, 2009.
Reserves
The reserves increased by 6% from Rs403
crores to Rs429 crores during the year.
The net addition to reserves was owing
to profits earned during the year.
Loan funds
The reliance on external funds decreased
by 14 % to Rs368 crores. Focused
approach to realise funds blocked with
the Government and in inventories and
debtors helped in reducing debt. Secured
loans constituted 89% of the total loans.
Of the secured loans, 15% was for
funding working capital requirements,
the balance being used in projects.
Foreign currency loans constituted 27%
of the total debt. The Company remained
reasonably geared with the ratio of total
debt to total equity at 0.77:1.
Interest
Interest cost during the year increased
by 25% during the year owing to
higher interest rates and increase in
debt. The average debt cost stood at
8.70% p.a. on March 31, 2009
compared with 8.04% p.a. at the
same time in the previous year.
Year
2004-05
2005-06
2006-07
2007-08
2008-09
Debt-equity ratio
1.61
1.20
1.17
0.95
0.77
Interest coverage ratio
Year
2004-05 2005-06 2006-07 2007-08 2008-09
Interest Coverage
2.98
2.48
2.96
3.06
2.89
Gross block
During the year, gross block increased by
9% to Rs951 crores. Addition to plant
and machinery accounted for Rs72 crores
(77% of the total addition) whereas
addition to buildings accounted for Rs14
crores (15% of the total addition). The
investment in plant and machinery was
owing to the addition of balancing
equipment
(for
de-bottlenecking
capacities) in different Divisions and DDS
project
in
Pharmaceuticals
&
Intermediates Division resulting in
enhanced production.
Depreciation
Depreciation cost increased by 8% over
the previous year, corresponding to the
increase in plant, machinery and
building. Cumulative depreciation as a
part of total gross block was 55%.
Investments
The Company invested its operational
surplus in its business. Other investments
remained more or less unchanged at
Rs65 crores.
Working capital
Working capital outlay decreased from
Rs356 crores at the end of the previous
year to Rs313 crores during the year
mainly due to:
Focussed decrease in the stock of raw
materials by the different businesses,
improved systems, support to maintain
an optimum level of inventories and
introduction of better inventory
management tools
Decrease in debtors through the credit
period reduction and emphasising
timely collection
The efficiency in working capital
management was reflected in an
important fact – despite a significant
growth in business volumes, working
capital outlay as a proportion of the
total employed capital decreased from
41% to 37% during the year. Liquidity
ratios remained at the level of the
previous year, indicating stable short-
term liquidity.
Liquidity ratios
Year
2007-08 2008-09
Current ratio
2.44
2.45
Quick ratio
1.26
1.17