Vivimed Labs Did Not Disclose Transfer and Sale of Business Units, Twice
Vivimed announced its limited review results of Q3 FY16-17 on 14 February 2017 and reported a revenue of Rs363 crore (O2 FY17 - Rs300 crore) and a profit after tax (PAT) of Rs52 crores (Q2 FY16-17 - Rs26 crore). The revenue included Rs73 crore of business transfer agreement (BTA) with Ordain Health Care Ltd of Klarsehen Pvt Ltd, which was a one-time sale of an entire product line, mentioned in the annual reports. There were no specific disclosures in the results.
 
This was disclosed only in the annual report, which is released six months after the year-end. As per as per the accounting standards, Vivimed should have disclosed the sale of such a product line as 'discontinuing operations' and should give a clear break up of continuing operations and discontinuing operations in its press release. 
 
It failed to make the disclosure and even auditors did not qualify their audit report for violation of accounting standards. It is price sensitive information and requires specific disclosure to the stock exchanges. Vivimed failed to disclose this to stock exchanges.
 
For Q4 FY16-17 Vivimed reported a revenue of Rs440 crore and a PAT of Rs115 crore. There was no other disclosure in the limited review results. The results gave the impression that the revenue and PAT numbers were growing and margins are expanding. 
 
However, the revenue included Rs163 crore of net consideration for the slump sale of manufacturing units located at Bonthapally, Medak District for a consideration of Rs380 crore to Clariant India Ltd. Selling of facility is price sensitive information and as per accounting standards and under SEBI (Listing Obligations and Disclosure Requirements), Vivimed should have disclosed this to the stock exchanges. Vivimed didn’t.
 
We asked Vivimed how such important disclosures were missed out. Yugandhar Kopparthi, company secretary & compliance officer, promised to reply but hasn’t even after about three weeks. As and when we receive their reply we will add to the article. It is shocking that a large listed company and its auditors can openly violate securities laws, regulations and accounting standards.
 
Vivimed Lab claims to be an integrated pharmaceutical company and manufactures of active pharmaceutical ingredient (APIs) and formulations for various therapeutic areas. The company's (API) business comprises of generic/ regulatory APIs and APIs for the contract development and manufacturing organisation (CDMO) segment. 
 
This constitutes 70% of its total pharmaceutical business and the balance is contributed by the finished dosage formulations (FDFs) segment. The company is weighed down by debt. For the June quarter, revenues were down by 5% and net profit was down by 180%.
 
Vivimed Labs closed Monday around 15% higher at Rs17.30 on the BSE, while the benchmark Sensex ended the day marginally up at 37,145.
 
  • Like this story? Get our top stories by email.

    User

    Nifty, Sensex Upmove May Continue – Monday closing report
    We had mentioned in Friday’s closing report that Nifty, Sensex were on course to head higher. The major indices ended with gains. On the NSE, there were 1,167 advances, 608 declines and 358 unchanged. The trends of the major indices in the course of Monday’s trading are given in the table below:
     
     
    Ruchi Soya stocks on the BSE were locked in upper circuit after the company said that National Company Law Tribunal (NCLT) has approved Patanjali's resolution plan of Rs4,350 crore. The order stated that, Patanjali will "infuse the amount of Rs4,350 crore in the SPV (special purpose vehicle) -- ''Patanjali Consortium Adhigrahan''-- which will be later amalgamated with Ruchi Soya. According to an exchange filing, Ruchi Soya said that Patanjali group will infuse Rs204.75 crore as equity and Rs3,233.36 crore as debt. Besides, it will infuse another Rs 900 crore through the subscription of non-convertible debentures and preference shares in the SPV. It will also provide a credit guarantee of nearly Rs11.89 crore.
     
    Skipper has received a new turnkey project of Rs524 crores from Power Grid Corporation of India for supply and Installation of 765kV, 190km hexa zebra conductor transmission line from Fatehgarh to Bhadla under TBCB bidding conducted by PFC for Green Energy Corridor projects.
     
    Lupin has received approval for its Ethacrynic Acid Tablets USP, 25 mg, from the US FDA. Lupin's Ethacrynic Acid Tablets USP, 25 mg, is the generic version of Edecrin® Tablets, 25 mg, of Bausch Health Americas, Inc. It is indicated for treatment of edema when an agent with greater diuretic potential than those commonly employed is required.
     
    The board of Kopran may consider and approve early redemption of 55,80,000 unlisted preference shares of face value of Rs10 each.
     
    IL&FS Engineering and Construction has received approval form Gujarat Metro Rail Corporation (GMRC) for the revival of the contract in respect of construction of viaduct corridor for package-l of North - South corridor for Ahmedabad Metro Project, phase 1.
    Spring Fields Infraventure has received purchase orders worth Rs42.36 lakhs from APT Power Engineering and Associated Power Tech Private.
     
    L&T Technology Services has been selected as a strategic partner by a European automotive manufacturer for its electric powertrain practice. LTTS will be responsible for the functional qualification of the ePowertrain ECUs (Electronics Control Unit). Under the multi-year engagement, LTTS will provide a real-time technology framework to evaluate the controller design of the e-Powertrain and will span from concept phase to product development till on-road testing of vehicle.
     
    The Buildings & Factories business of L&T Construction has secured a prestigious residential project from the City and Industrial Development Corporation of Maharashtra Limited (CIDCO) to construct 23,432 dwelling units with on-site infrastructure works at various locations in Navi Mumbai. The project, being part of the Pradhan Mantri Awas Yojana (PMAY), envisages construction of Economically Weaker Section (EWS) and Low-Income Group (LIG) type of dwelling units. The building configurations vary from 13 to 20 storeys.
     
    The top gainers and top losers of the major indices are given in the table below:
     
     
    The closing values of the major Asian indices are given in the table below:
     
     
  • User

    Nifty, Sensex On course to Head Higher - Weekly Closing report
    We had mentioned in last week’s closing report that Nifty, Sensex may head higher. The major indices were volatile and closed with losses this week. The trends of the major indices in the course of the week’s trading was:
     
     
    The equity markets were closed on Monday on account of Ganesh Chathurthi.
     
    On Tuesday, the major indices suffered a deep correction. On the NSE, there were 569 advances, 1,199 declines and 357 unchanged. Investor panic over the country's lower than expected GDP growth figure of 5% in the first quarter ending June, released last week, led the key market indices to decline by over 2% on Tuesday.
     
    Ashok Leyland reported a 47% decline in total commercial vehicle sales at 9,231 units in August. The company had posted sales of 17,386 units in the year-ago month, Ashok Leyland said in a statement. The medium and heavy commercial vehicle sales stood at 5,349 units last month as against 13,158 units in August 2018, down 59%. Maruti Suzuki India reported a 33.99% decline in production in August at 111,370 vehicles against 168,725 produced in the year-ago month. The company had produced 133,265 units in July, down from 178,533 units reported for the corresponding month of the last financial year (FY19). Of the total sales, domestic off-take declined nearly 36% to 94,728 vehicles. Domestic passenger vehicle sales were down 36.1% at 93,173 units from 1,45,895 vehicles during the corresponding period last year. 
     
    Steel Strips Wheels has achieved August 2019 total wheel rim sales of 10.72 lakhs Vs 14.14 lakhs in August 2018 representing a decline of 24% YoY. The August month saw continued cut in inventory and production from auto makers to further rationalize the inventory. SSWL has achieved gross turnover of Rs131.96 crore in August 2019 vs. 217.77 crore in August 2018, there by recording fall of 39.40% and achieved net turnover of Rs109.76 crore in August 2019 vs. Rs.166.41 crore in August 2018, a fall of 34%. KNR Constructions has received a work order for Rs850 crore from Megha Engineering & Infrastructures Limited, Hyderabad for construction and completion of earthen bund works which are part of Kaleshwaram Project-Formation of Sri Komuravelli Mallanna Sagar.
     
    On Wednesday, the major indices went up a bit. On the NSE, there were 914 advances, 845 declines and 359 unchanged. Maruti Suzuki has decided to shut down production of passenger vehicles in Gurugram and Manesar plants in Haryana for two days, on 7 and 9 September 2019. The company said in an exchange filing that "Both days will be observed as no production days”.
     
    The Board of Canara Bank will meet on 13 September to consider the amalgamation of Syndicate Bank into Canara Bank. The board will consider capital infusion up to Rs9,000 crore by Government of India by way of preferential issue of equity shares subject to necessary approvals. Gujarat Alkalies and Chemicals may consider the proposal for split/sub-division of its equity shares of the face value of Rs10/- each of the Company. ICRA has revised the long term rating of Indoco Remedies to A from A+. The outlook on the long-term rating is negative. The short term rating has been revised to A2 from A1. 
    On Thursday, the major indices opened high but ended with losses over Tuesday’s close. On the NSE, there were 1,129 advances, 631 declines and 356 unchanged. Wipro secured a $300-million (Rs2,156 crore) seven-year deal from ICICI Bank through Vara Infotech for providing a suite of services. The bank contract generated Rs221.5 crore business for Vara in the fiscal 2018-19.
     
    Force Motors has reported total sales of 1,971 units during August 2019, as compared to 2551 units in July 2019 and 2083 units in August 2018, a month-on-month drop of 22.74% and YoY drop of 5.38%. The NCLT bench has approved the resolution plan submitted by JSW Steel in respect of the corporate insolvency resolution process of Bhushan Power and Steel Limited. The written order containing the details and terms of such approval, if any, are awaited.
     
    ECL Finance of Edelweiss group and State Bank of India have signed a co-origination agreement to increase access to credit for micro, small and medium enterprises (MSMEs). Pursuant to Reserve Bank of India's (RBI) guidelines on co-origination of loans by banks and NBFCs, the alliance aims to leverage combined reach in tier II and tier III markets to ensure timely disbursal of credit to MSMEs. Bajaj Finance Ltd has allotted 14,000 Secured redeemable non-convertibles debentures of face value of Rs10 lakhs each aggregating to Rs1,400 Crores. The instrument has rating of "CRISIL AAA / Stable" by CRISIL Limited.
     
    On Friday, the major indices rallied. On the NSE, there were 1,190 advances, 616 declines and 106 unchanged. Indian stocks opened higher on Friday in line with gains in the global markets over hopes of a trade truce between US and China.
     
    Following the recapitalisation of public sector banks (PSBs), now public sector insurance companies -- National Insurance, Oriental Insurance and United India Insurance -- are going to be infused with funds worth Rs12,000 crore to boost their capital base and meet regulatory norms, sources said. The Budget had provisioned Rs70,000 crore for PSB recapitalisation and last week a Rs55,250-crore infusion was announced in several PSBs for regulatory and growth requirements. The nodal Department of Financial Services has approved the Rs12,000 crore capital infusion plan in the three state-run general insurance companies as their financial conditions are very weak. 
     
    J Kumar Infraprojects has received letter of acceptance from City and Industrial Development Corporation of Maharashtra Limited (CIDCO) for design & construction of coastal Road from Amra Marg to MTHL junction including Airport Link at Navi Mumbai for Rs681 crore.
     
    Capacit'e Infraprojects Limited, has received maiden order from City & Industrial Development Corporation of Maharashtra (CIDCO), for a contract value of Rs4,502 Crore (excluding GST) for construction of approximately 21,346 dwelling units with development of commercial area and onsite infrastructure works at Navi Mumbai.
     
    Bharat Heavy Electricals Limited (BHEL) has secured an order for emission control equipment for 2x250 MW Bhilai expansion power project in Chhattisgarh. Valued at around Rs450 Crore, the order has been placed on BHEL by NTPC-SAIL Power Company. The order involves supply and installation of Flue Gas Desulphurization (FGD) system. CRISIL has re-affirmed the rating as CRISIL A1+ for the short term debt and commercial paper instruments of Sundram Fasteners Ltd.
  • User

    We are listening!

    Solve the equation and enter in the Captcha field.
      Loading...
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email

    BUY NOW

    online financial advisory
    Pathbreakers
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 3 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)