Mar 31, 2018
The Directors have pleasure in presenting the 30th Annual Report of your Company for the financial year ended 31 March 2018.
FINANCIAL RESULTS
The financial performance of your Company for the year ended 31 March 2018 is summarized below:
(Rs. in million)
Standalone |
Consolidated |
|||
Year ended 31.03.2018 |
Year ended 31.03.2017 |
Year ended 31.03.2018 |
Year ended 31.03.2017 |
|
Gross Income |
2,633.16 |
5,785.85 |
11,952.70 |
14,699.99 |
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) |
787.97 |
2,590.58 |
2,216.14 |
4,106.27 |
Finance Charges |
518.02 |
588.39 |
794.83 |
658.71 |
Depreciation/Amortization |
181.43 |
268.32 |
564.20 |
582.79 |
Net Profit Before Tax |
88.52 |
1,733.87 |
857.11 |
2,864.77 |
Provision for Tax |
(10.15) |
470.43 |
96.21 |
725.02 |
Net Profit After Tax carried to |
||||
Balance Sheet |
98.67 |
1,263.44 |
760.90 |
2,139.75 |
Proposed Dividend amount |
33.01 |
32.79 |
- |
- |
Proposed Dividend Tax amount |
6.79 |
6.68 |
- |
- |
OVERVIEW OF COMPANY''S FINANCIAL PERFOMANCE
On a consolidated basis, your Company reported total revenue of Rs.11,952.70 million as against Rs.14,699.99 million. EBITDA for FY2018 was Rs.2,216.14 million compared to Rs.4,106.27 million in the previous year. Net profit after tax for the group for the current year is Rs.760.90 million as against Rs.2,139.75 million in the previous year.
Total revenue from operations on standalone basis stands at Rs.2,633.16 million as against Rs.5,785.85 million in the previous year. FY2018 EBITDA was Rs.787.97 million compared to Rs.2,590.58 million in the previous year. The Profit after Tax for the current year is Rs.98.67 million as against Rs.1263.43 million in the previous year.
There are no material changes and commitments affecting the financial position of your Company which have occurred between the end of the financial year FY2018 and the date of this report.
SHARE CAPITAL
The Authorised Share Capital of the Company is Rs.111,00,00,000/- (Rupees One Hundred Eleven Crores only) comprising 20,00,00,000 (Twenty crores) Equity Shares of Rs.2/- (Rupees Two Only) each, and 71,00,00 (Seven Lakh Ten Thousand only) Preference Shares of the Company with a par value of Rs.1,000/- (Rupees One Thousand only) each.
During the year under review, the Company had allotted 15,05,000 equity shares of ''2/- each to the eligible employees under ESOP Scheme, 2010. Accordingly, the share capital has increased as follows:
Paid Up Capital as on 31 March 2017 |
Movement during the year 2017-18 |
Cumulative Paid Up Capital after such movement |
8,10,18,915 equity shares of Rs.2/ -each |
Allotted 15,05,000 equity shares of Rs.2/- each 8,25,23,915 equity shares of Rs.2/- each in April & November 2017 under ESOP Scheme, 2010 |
TRANSFER TO GENERAL RESERVE
The Company proposes not to transfer funds to general reserves for the FY2018. The total Reserves & Surplus (including Capital Reserve, Securities Premium Reserve, Central Subsidy, General Reserve and Surplus) as on 31 March 2018 is ''5,509.07 million.
DIVIDEND
Your directors are pleased to recommend a dividend of Rs.0.40/on every equity share of face value Rs.2/- each (20%) for FY2018. The dividend, if approved at the 30th annual general meeting (AGM), will be paid to those shareholders whose names appear on the register of members of the company as of the end of day on 21 September 2018.
PUBLIC DEPOSITS
During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).
LOANS AND INVESTMENTS
Details of loans, guarantees and investments under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31 March 2018, are set out in the Standalone Financial Statements forming part of this report.
CONSOLIDATED ACCOUNTS
The Consolidated Financial Statements of your Company for the financial year FY2018 are prepared in compliance with applicable provisions of the Companies Act, 2013 read with the Rules issued thereunder, applicable Accounting Standards and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "Listing Regulationsâ).The consolidated financial statements have been prepared on the basis of audited/ unaudited financial statements of your Company, its subsidiaries and associate companies, as approved by the respective Board of Directors.
SUBSIDIARIES
A separate statement containing the salient features of financial statements of all subsidiaries of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (''AGM'') as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Corporate Office of your Company. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of your Company www.vivimedlabs.com.
The financial performance of each of the subsidiaries and joint venture companies included in the consolidated financial statements of your Company is set out in the Annexure-1 to this Report. Additional details of the performance and operations of the subsidiaries along with details of the investments made by your Company are set out in the Management Discussion and Analysis which also forms part of this report
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of your Company''s various businesses viz., the pharmaceuticals, Specialty chemicals, API''s business, internal controls and their adequacy, risk management systems and other material developments during the financial year FY2018.
CORPORATE GOVERNANCE
A separate section on Corporate Governance practices followed by your Company, as stipulated under Schedule V(C) of the SEBI (LODR) Regulations, 2015 is enclosed forming part of this report. The certificate of the auditors with regard to compliance of conditions of corporate governance as stipulated under Schedule V (E) of the SEBI (LODR) Regulations, 2015 is annexed to the Report on Corporate Governance.
INDUSTRIAL RELATIONS
Your Company has always considered its workforce as its valuable asset and continues to invest in their excellence and development programs. Your Company has taken several initiatives for enhancing employee engagement and satisfaction.
The industrial relations in respect of all manufacturing facilities and divisions of your Company are normal.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Retirement by Rotation and Subsequent Re-Appointment:
Shri. Manohar Rao Varalwar Director, is liable to retire by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible have offered themselves for re-appointment. Mr. Subhash Varalwar who was appointed as a Whole-Time Director of the Company w.e.f. 14 August 2015 by the Board of Directors and Members have ratified his appointment in the AGM held on 30 September 2015 has shown his willingness to act as Non-Executive Director of the company with effect from 31.03.2018. Appropriate resolutions for their re-appointment/ appointment are being placed for your approval at the ensuing AGM. The brief resume of the Directors and other related information has been detailed in the Notice convening the 30th AGM of your Company. Your Directors recommend their re-appointment as Directors of your Company.
The Independent Directors of your Company are not liable to retire by rotation. Mr.Venkata Ratnam Paluri, Director of the Company demised on 01 July 2018. The Board expressed its condolences and appreciated and put on record the valuable services rendered by Mr. Venkata Ratnam Paluri during his tenure of directorship in the Company. Dr.Venkateswarulu Peesapati, has resigned from the Board of Directors of the Company and the same was accepted by the board in its meeting held on 13 August 2018
Shri.Santosh Varalwar, Managing Director, and Shri.K.Yugandhar, Company Secretary, are the Key Managerial Personnel of your Company in accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).
DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES:
The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force). The salient aspects covered in the Nomination and Remuneration Policy have been outlined in the Corporate Governance Report which forms part of this report.
The Managing Director of your Company does not receive remuneration from any of the subsidiaries of your Company.
The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is set out in Annexure-2 to this report and is also available on the website of your Company (www.vivimedlabs.com).
BOARD MEETINGS:
The Board and Committee meetings are pre-scheduled and a tentative calendar of the meetings shall be finalized in consultation with the Directors to facilitate them to plan their schedule. However, in case of urgent business needs, approval is taken by passing resolutions through circulation. During the year under review, Seven board meetings were held. The details of the meetings including composition of various committees are provided in the Corporate Governance Report.
DECLARATION OF INDEPENDENCE:
Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16(1)(b) of Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force).
POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION:
The policy of the Company on directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters are adopted as per the provisions of the Companies Act, 2013. The remuneration paid to the Directors is as per the terms laid out in the nomination and remuneration policy of the Company.
EVALUATION OF BOARD''S PERFORMANCE:
Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force), the process for evaluation of the annual performance of the Directors/ Board/ Committees was carried out. The criteria applied in the evaluation process are detailed in the Corporate Governance Report which forms part of this report.
NUMBER OF MEETINGS OF THE BOARD AND ITS COMMITTEES
The details of the meetings of the Board of Directors and its Committees, convened during FY2018 are given in the Corporate Governance Report which forms a part of this report.
HUMAN RESOURCES:
The management believes that the competent and committed human resources are vitally important to attain success in the organization. In line with this philosophy, utmost care is being exercised to attract quality resources and suitable training is imparted on various skill-sets and behavior. Annual sports and games were conducted across the organization to enhance the competitive spirit and encourage bonding teamwork among the employees.
EMPLOYEE STOCK OPTIONS:
During the year, the Company has allotted 15,05,000 (Fifteen lakhs five thousand only) equity shares of ''2/- at a price of ''24/- per share to various eligible employees of the Company under Employee Stock Option Schemes-2010 upon exercise of their vesting rights.
The details of stock options details of the stock options stated in the notes to accounts of the financial statements also forms part of this Annual Report.
AUDITORS AND AUDITORS'' REPORT
(I) Statutory Auditors:
The Board of Directors of your Company, on the recommendation of the Audit Committee, have recommended to the members for re-appointed of M/s.P C N & Associates, Chartered Accountants, (Firm Registration No.016016S) as Statutory Auditors of the Company from the conclusion of 30th Annual General Meeting till the conclusion of the 35th Annual General Meeting, subject to ratification by the members at every Annual General Meeting to be held during the said period.
(II) Cost Auditors:
In accordance with Section 148 of the Companies Act, 2013 read with Companies (Audit & Auditors'') Rules, 2014 and the Companies (Cost Records and Audit) Amendments Rules, 2014, the Company maintains the cost records in respect of its business.
Your Board has appointed M/s.A.S.Rao & Co, Cost Accountants, (Firm Registration No.000326), as the Cost Auditors of the Company for the Financial Year 2018
19. As required by the Act, the remuneration of the Cost Auditors has to be ratified by the Members and accordingly the resolution relating to the Cost Auditors is being placed before the Members for their ratification.
(III) Secretarial Auditors & Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr.N.V.S.S.Suryanarayana Rao, Practicing Company Secretary (Certificate of Practice No.2886), to undertake the Secretarial Audit of the Company for the financial year 2017-18. The Secretarial Audit Report issued in Form MR-3 is in Annexure-3 to this Report. There are no qualifications, reservations or adverse remarks in the Secretarial Audit Report.
AUDITORS'' QUALIFICATIONS /RESERVATIONS /ADVERSE REMARKS/FRAUDS REPORTED:
There are no Auditors'' Qualifications or reservations or adverse remarks on the financial statements of the Company. The Auditors have not reported any frauds to the Audit committee as prescribed under Sec. 143(12) of the Companies Act, 2013.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS / REGULATORS:
There are no significant and material orders passed by the Courts or Regulators against the Company.
INSURANCE:
All properties and insurable interests of the Company including buildings, plant and machinery and stocks have been fully insured.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Extract of Annual Return as on 31 March 2018 in Form MGT-9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure-4 to this report.
RELATED PARTY TRANSACTIONS:
In accordance with Sec 134(h) of the Companies Act, 2013 and Rule 8(2) of Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements entered into by the Company with the Related Parties referred to in Sec.188(1) of the Act, have been provided in Form AOC-2 and attached the same as Annexure-5. The details of related party disclosures as stated in the notes to the financial statements forms part of this annual report.
VIGIL MECHANISM
Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations. employees can raise concerns regarding any discrimination, harassment, victimization, any other unfair practice being adopted against them or any instances of fraud by or against your Company.
Any incidents that are reported are investigated and suitable action taken in line with the whistle blower policy. The Whistle Blower Policy is also available on your Company''s website www.vivimedlabs.com.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
Pursuant to the provisions of Section 135 and Schedule VII of the Companies Act, 2013, CSR Committee of the Board of Directors had framed the policy on Corporate Social Responsibility and the Projects and Programs undertaken by the Company during the year under review have been provided in Annexure-6 and forms part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO:
The information required under Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8(3) of Companies (Accounts) Rules, 2014, is appended hereto as Annexure-7 and forms part of this Report.
DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
Your Company has put in place adequate internal financial controls with reference to the financial statements, some of which are outlined below.
Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Statutory Auditors.
The policies to ensure uniform accounting treatment are prescribed to the subsidiaries of your Company. The accounts of the subsidiary companies are audited and certified by their respective Statutory Auditors for consolidation.
Your Company operates in SAP, an ERP system, and has many of its accounting records stored in an electronic form and backed up periodically. The ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of account. Your Company has automated processes to ensure accurate and timely updation of various master data in the underlying ERP system.
Your Company has a robust financial closure self-certification mechanism wherein the line managers certify adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.
Your Company operates a shared service center which handles all payments made by your Company. This center ensures adherence to all policies laid down by the management.
Your Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
The Management periodically reviews the financial performance of your Company against the approved plans across various parameters and takes necessary action, wherever necessary.
Your Company has a code of conduct applicable to all its employees along with a Whistle Blower Policy which requires employees to update accounting information accurately and in a timely manner. Any non-compliance noticed is to be reported and actioned upon in line with the Whistle Blower Policy.
Your Company gets its Standalone accounts limited review every quarter by its Statutory Auditors.
GENERAL
a) Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise; and
b) Your Company have ESOP scheme for its employees/ Directors.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force), the Directors of your Company confirm that:
(a) in the preparation of the annual accounts for the financial year ended 31 March 2018, the applicable Accounting Standards and Schedule III of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force), have been followed and there are no material departures from the same;
(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31 March 2018 and of the profit and loss of the Company for the financial year ended 31 March 2018;
(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force) for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a ''going concern'' basis;
(e) proper internal financial controls laid down by the Directors were followed by your Company and that such internal financial controls are adequate and operating effectively; and proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
CAUTIONARY STATEMENT
The management of Vivimed Labs has prepared and is responsible for the financial statements that appear in this report. These are in conformity with accounting principles generally accepted in India and, therefore, may include amounts based on informed judgments and estimates. The management also accepts responsibility for the preparation of other financial information that is included in this report. Statements in this Management Discussion and Analysis describing the Company''s objectives, projections, estimates and expectations may be ''forward looking statements'' within the meaning of applicable laws and regulations. Management has based these forward looking statements on its current expectations and projections about future events. Such statements involve known and unknown risks, significant changes in political and economic environment in India or key markets abroad, tax laws, litigation, labour relations, exchange rate fluctuations, interest and other costs may cause actual results to differ materially.
POLICY ON PREVENTION OF SEXUAL HARASSMENT:
The Company has formulated and implemented a policy for Prevention of Sexual Harassment of Women at workplace.
During the year under review, the Company has not received any complaints under the policy.
The Company has many systems, processes and policies to ensure professional ethics and harmonious working environment. We follow Zero Tolerance towards Corruption and unethical conduct. These are ensured through Whistle Blower Policy, Anti-Corruption Policy, Gift Policy, Sexual Harassment Policy and Redressal Guidelines.
APPRECIATION
Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year.
Your Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their continued support.
For and on behalf of the Board
Sd/- Sd/-
Place: Hyderabad Manohar Rao Varalwar Santosh Varalwar
Date:13.08.2018 Whole-Time Director ManagingDirector
Mar 31, 2015
The Directors are pleased to present 27th Annual Report and the
Company's audited financial statements for the financial year ended
March 31, 2015.
Financial Results
The Company's financial performance, both standalone and consolidated,
for the year ended March 31, 2015 is summarised below:
(Rs. in million)
Particulars Standalone Consolidated
Year ended Year ended Year ended Year ended
March 31,
2015 March 31,
2014 March 31,
2015 March 31,
2014
Revenue from
Operations 4,301.48 4,319.93 13,800.99 13,508.33
Other Income 14.34 15.50 58.66 82.15
Total Income 4,315.82 4,335.43 13,859.65 13,590.48
Total operating
expenditure 3,244.31 3,323.28 11,632.13 11,457.79
Operating Profit
(EBITDA) 1,071.51 1,012.15 2,227.52 2,132.69
Finance cost 623.35 443.44 790.37 602.91
Depreciation and
Amortisation 205.60 180.64 661.78 661.16
Profit Before Tax 242.55 388.08 775.37 868.62
Current Tax 48.53 77.64 152.80 199.81
Deferred Tax 4.67 44.14 (97.93) 4.86
Profit After Tax 189.35 266.30 720.50 663.94
Basic EPS 11.69 16.43 44.47 40.97
Diluted EPS 11.69 16.43 44.47 40.97
Review of Operations
Consolidated Financials
During the period under review, the Company has earned revenue of
Rs.13,859.65 million.
The Company - has reported - sales of Rs.13800.99 million in the FY
2014-15 compared to net sales of Rs.13,508.33 million in FY 2013- 14,
registering growth of 2.17% in the current financial year. The
Company's growth was driven by strong performance across all
manufacturing facilities.
The EBITDA stood at Rs.2227.52 million for FY 2014-15 compared to
Rs.2,132.69 million for FY 2013-14, registering a growth of 4.45%. The
profit after tax for FY 2014-15 stood at Rs.720.50 million compared to
Rs.663.94 million for FY 2013-14, registering a growth of 8.52% in the
current financial year.
Standalone Financials
During the period under review, the Company has earned revenue of
Rs.4,315.82 million.
The Company - has reported - sales of Rs.4,301.48 million in the FY
2014-15 compared to net sales of Rs.4319.93 million in FY 2013-14.
The EBITDA stood at Rs.1071.49 million for FY 2014-15 compared to
Rs.1012.17 million for FY 2013-14, registering a growth of 5.86 %.
Dividend
Due to proposed investment in expansions and developments in future and
to conserve the available resources for the same, the board of
directors of the Company have not recommend any dividend for the year
2014-15
Transfer to General Reserves
The Company proposes not to transfer funds to general reserves for the
FY 2014-15. The total Reserves & Surplus (including Capital Reserve,
Securities Premium Reserve, Central Subsidy, General Reserve and
Surplus) as on March 31, 2015 is Rs.3577.45 million as against the Paid
up Capital of Rs.162.04 million.
Share Capital
The Authorised Share Capital of the Company is Rs.111,00,00,000/-
(Rupees One Hundred Eleven Crores only) comprising 4,00,00,000 (Four
Crores) Equity Shares of Rs.10/- (Rupees Ten Only) each, and 71,00,00
(Seven Lakh Ten Thousand only) Preference Shares of the Company with a
par value of Rs.1,000/- (Rupees One Thousand only) each,. The Paid Up
Share Capital of the Company is Rs.162037830 (rupees sixteen crores
twenty lakhs thirty seven thousand eight hundred and thirty only)
divided into 162,03,783 equity shares of Rs.10/- each as on March 31,
2015.
Management's Discussion and Analysis Statement
Management's Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges, is presented in a separate section forming part of the
Annual Report
Subsidiaries, Joint Ventures and Associate Companies
Subsidiary Companies:
The Company has five Indian Subsidiaries  Creative Healthcare Private
Limited, Klar Sehen Private Limited, Octtantis Nobel Labs Private
Limited, Finoso Pharma Private Limited and Vivimed Labs (Alathur)
Private Limited.
Hong Kong based Vivimed Holdings Limited a 100% subsidiary of the
Company is a 100% holding Company of Vivimed Labs Europe Limited, UK.
Vivimed Labs USA Inc. is a 100% subsidiary of Vivimed Labs Limited.
Mauritius based Vivimed Labs Mauritius Limited, a 100% subsidiary of
Vivimed Labs Limited is the holding company of the 5 downstream
subsidiaries as under:
1. Vivimed Labs UK Limited, UK
2. Vivimed Labs Spain S. L., Spain
3. Union Quimico Farmaceutica S.A.U, Spain
4. Holliday International Limited, UK
5. Uquifa Mexico S.A. de C.V., Mexico
In totality, as on March 31, 2015, the Company has 5 Indian and 9
foreign direct/step down wholly owned subsidiaries.
Subsidiary Companies:
- Creative Healthcare Private Limited (CHCPL)
Creative Health Care Pvt Ltd. is a company specialised in mfg
pharmaceutical formulations under CMO catering to Pharma majors like
Wockhardt, Cipla, Abbott, Lupin etc. The relationship with these
companies ranges from 3 years to 10 years and the product range is ever
increasing. The capacity utilisation is around 90%. CHCPL has recently
acquired Some pharma brands from Noel Pharma and started marketing the
products from sept., 14 onwards and showing good growth. CHCPL is
dealing in Pharmaceutical business. The Share Capital of the Company as
on March 31, 2015 isRs.25.00 million. During FY 2014-15, the Company
achieved a turnover Rs.861.10 million against the turnover of Rs.704.77
million of FY 2013-14 and the proft after tax is Rs.6448 million
against Rs.39.00 million of FY 2013-14.
- Klar Sehen Private Limited (Klar Sehen)
Klar Sehen, , a niche ophthalmic formulations Company in India has
started its journey beyond India to reach a global market, starting
with the US OTC (OPHTHALMOLOGY PRODUCTS) market, and has launched 4
products which are now stocked in the top 3 retail chains in USA.
Klar Sehen has an enviable track record of providing eye care products
for over 3 decades. Our strict adherence to quality and service has
helped in winning the trust of million of satisfied consumers.
The Company is dedicated towards providing eye care products in all the
relevant segments - Tears Substitutes, Antibiotics, Antiviral,
Mydriatics, NSAIDS, Anti allergens, Operative and so on. Klar Sehen's
products like RENICOL, DEXACORT-N, IRIGAN, etc. are trusted by
Ophthalmologists across India.
Klar Sehen is dealing in Pharmaceutical business, it is a wholly owned
subsidiary of the Company. The Share Capital of the Company as on March
31, 2015 is Rs.6.99 million. During FY 2014- 15, the Company achieved a
turnover of Rs.313.68 million against the turnover of Rs.269.88 million
of FY 2013-14 and the profit after tax is Rs.38.14 million against
Rs.21.80 million of FY 2013-14
- Finoso Pharma Pvt Ltd (FINOSO)
FINOSO.,Is a contract research organisation into FR&D, AR&D, quality
assurance, regulatory affairs, project management and stability studies
and other works related to flings for USA, Canada, Australia and other
regulatory marketscountries.
Finoso specialises in the development of formulations in Solid oral
dosage forms like tablets, capsules, and liquid orals like syrups and
suspensions. Also does stability studies as per ICH guidelines for
Canada which is approved by Health Canada, a regulatory body in Canada.
The team consisting of 35 technical core team of scientists, capable of
delivering controlled release, modified release, sustained release
formulations and ODT (oral dispersible technology) and MUPS (multi unit
particulate system) in the form of pellets and other technologies.
The clientele includes Aurobindo, DRL, and companies from USA and
Europe. The Share Capital of the Company as on March 31, 2015
isRs.30.15 million. During FY 2014-15, the Company achieved a turnover
of Rs.63.43 million against the turnover of Rs.34.95 million of FY
2013-14 and the profit after tax is Rs.0.23 million against Rs.2.53
million of FY 2013-14
- Vivimed Labs Alathur Pvt Ltd
In August 2013, as part of its global business strategy to complete its
presence across the entire health care value chain, Vivimed completed
the acquisition of a US FDA inspected Rs.1.2 billion SOD per annum
manufacturing facility at Alathur near Chennai, Tamilnadu. This
facility earlier belonged to the US pharma MNC Actavis (Watson) and has
received US FDA approval 4 times in April 2007, April 2009, Oct 2011
and most recently in Feb 2015. The plant manufacturing capacity can be
expanded to 5 billion SOD per annum. This eliminates 3 to 4 years of
lead time to build a green field project of this quality and getting
the regulatory approvals.
This strategic acquisition gives Vivimed immediate access to regulated
markets such as US and European union. US is the largest generic market
in the world. This also enables Vivimed to complete the health care
value chain by providing forward integration synergies for Vivimed's
existing API business.
With the acquisition of the Alathur facility and Finoso, Vivimed will
now develop its own formulation dossiers, DMFs and ANDAs and start
building a fling pipeline with the Alathur facility as the
manufacturing site.
Vivimed Labs (Alathur) Pvt Ltd is dealing in Pharmaceutica business,.
The Share Capital of the Company as on March 31, 2015 is Rs.501.70
million. During FY 2014-15, the Company achieved a turnover of
Rs.281.30 million against the turnover of Rs.329.06 million of FY
2013-14 and the profit after tax is Rs.(55.29) million lakhs against
Rs.(117.08) million of FY 2013-14
- Octtantis Nobel Labs Private Limited (ONPL)
Octtantis Nobel Labs Pvt. Ltd., is incorporated in April 2011 with the
vision of becoming the key player in Pharmaceutica Formulations Ethical
marketing in Indian Pharmaceutical industry.
M/s. Vivimed labs Limited has acquired the stake in M/s. Octtantis
Nobel Labs. Pvt. Ltd to make foray into Pharmaceutica formulations
marketing.
The Company has started its operations from September 2011 under the
leader ship of the directors having good experience in manufacturing
and Ethical marketing of Pharmaceutica Formulations.
The Company launched with 25 products consisting of Antibiotics,
Antidiarrhoeals, Anti infammatory, Analgesics, Dietary supplements and
Nutraceuticals etc. Out of which few brands were acquired from M/s.
Hezen Inc. - Hyderabad having a sale turnover of Rs. 7 Crores .
The Company started its marketing operations in Andhra Pradesh, Bihar,
Jharkhand, Assam, Arunachal Pradesh, Manipur, Meghalaya, Tripura,
Nagaland and Mizoram with a feld strength of 130 members marketing
team.
However, The Company transferred its business to its co- companies and
is currently not undertaking marketing of ethica formulations to save
on marketing costs to the group as a whole.
Under the leader ship of experienced Directors M/s. Octtantis Nobel
Labs Pvt. Ltd has acquired the fully operational manufacturing facility
located in Plot. No: 41 & 44 A&B in Anrich industrial Estate, Bollaram,
Jinnaram Mandal, Medak district A P. Having the manufacturing capacity
of Tablets, Capsules, Liquid Orals and Powder etc. under cGMP norms.
Such plant has been leased out to Vivimed Labs Ltd., for leveraging the
CMO experience of Vivimed labs Ltd., who entered into a manufacturing
agreement with M/s. Wockhardt Limited for some of their products.
ONPL is dealing in Pharmaceutical business. The Share Capital of the
Company as on March 31, 2015 is Rs.23.00 million.
- Vivimed Holdings Limited (VHL)
The Company was incorporated in Hong Kong as an wholly owned subsidiary
of Vivimed Labs Ltd. It is a holding company to Vivimed Labs Europe
Limited. The Share Capital of the Company as on March 31, 2015 is
Rs.0.06 million.
- Vivimed Labs Europe Limited
The Company is a wholly owned subsidiary of VHL.. The Share Capital of
the Company as on March 31, 2015 is Rs.8.17 million. During FY
2014-15, the Company achieved a turnover of Rs.1153.91 million against
the turnover of Rs.1397.29 million of FY 2013-14 and the profit after
tax is Rs.146.05 million against Rs.120.20 million of FY 2013-14
- Vivimed Labs USA INC. (VL USA)
VL USA is dealing in Pharmaceutical business,.. During FY 2014-15, the
Company achieved a turnover of 484.05 million against the turnover of
Rs.408.57 million of FY 2013-14 and the profit after tax is Rs.6.92
million against Rs.(5.01) million of FY 2013-14
- Vivimed Labs Mauritius Limited (VML)
VML was incorporated in Mauritius. It is a holding company to Vivimed
Labs UK Limited. The Share Capital of the Company as on March 31, 2015
comprises of Rs.46041 million in the form of Equity Share Capital and .
Preference share capital of Rs.639.45 million.
- Vivimed Labs UK Limited (VL UK)
VL UK was incorporated in UK as an wholly owned subsidiary of VML. It
is a holding company to Vivimed Labs Spain S.L. The Share Capital of
the Company as on March 31, 2015 is Rs.639.45 million.
- Vivimed Labs Spain S.L(VL Spain)
VL Spain was incorporated in Spain as an wholly owned subsidiary of VL
UK . It is a holding company to Union Quimico Farmaceutica S.A.U
The Share Capital of the Company as on March 31, 2015 isRs.642.78
million.
- Union Quimico Farmaceutica S.A.U (UQUIFA Spain)
Uquifa Spain is a well-established manufacturer of pharma API's and
intermediates with global coverage operating cGMP sites out of Spain.
Uquifa sells to more than 70 countries worldwide and has more than 150
active DMF´s fled and 20 COS approved. Uquifal counts amongst its
customers the major Generic and Ethica companies operating in the
Industry and continues to invest in personnel and facilities to
maintain a arrow technology offering to both the Generic Industry and
the Ethical Pharmaceutica Industry.
The Share Capital of the Company as on March 31, 2015 isRs.209.87
million. During FY 2014-15, the Company achieved a turnover of
Rs.5240.73 million against the turnover of Rs.5106.08 million of FY
2013-14 and the profit after tax is Rs.319.10 million against Rs.205.61
million of FY 2013-14
- Holiday International Limited (HIL)
HIL was incorporated in UK as an wholly owned subsidiary of VL Spain .
It is a holding company to Uquifa Mexico S.A. de C.V
The Share Capital of the Company as on March 31, 2015 is Rs.0.00
million.
- Uquifa Mexico S.A. de C.V. (Uquifa)
The Share Capital of the Company as on March 31, 2015 is Rs.133.79
million. During FY 2014-15, the Company achieved a turnover of
Rs.1806.97 million against the turnover of Rs.2103.58 million of FY
2013-14 and the profit after tax is Rs.75.96 million against Rs.78.59
million of FY 2013-14
Associate Companies :
Yantra Green Power Pvt Ltd:
Yantra Green Power (P) Ltd.,is extremely focus driven in setting up a
Captive Solar Power Plant in Telangana and wants to define the goals
and objectives in achieving the Phase I requirements of the project
under REC. This is a Grid interactive Power plant based on Solar
Photovoltaic technology using Polycrystalline modules. The power
purchase agreement has been signed with M/s Vivmed Labs Ltd for the
supply of power. The synchronisation of the plant was completed on
17/07/2015 and commercial date of operation will start on completion of
Long Term Open Access Agreement (LTOA) between Yantra Green Power,
Vivimed labs and TSCPDCL
The Policy for determining material subsidiaries as approved by the
Board may be accessed on the Company's website at the link: www.
vivimedlabs.com
However, as per the provisions of section 129 of the Companies Act,
2013 read with Companies (Accounts) Rules, 2014, a separate statement
containing the salient features of the financial statements of the
subsidiary Companies is prepared in Form AOC-1 and it forms part of the
consolidated financial statements.
Consolidated Financial Statements
The consolidated financial statements, in terms of Section 129 of the
Companies Act, 2013 and Clause 32 of the Listing Agreement and prepared
in accordance with Accounting Standard 21 as specified in the Companies
(Accounting Standards) Rules, 2006 forms a part of this annual report.
As per the provisions of Section 136 of the Companies Act, 2013, the
Company has placed separate audited accounts of its Subsidiaries on its
website www.vivimedlabs.com and copy of separate audited accounts of
its Subsidiaries will be provided to the members at their request
Director's Responsibility Statement
Pursuant to the requirement of Section 134(5) of the Companies Act,
2013 and based on the representations received from the operating
management, the Directors hereby confirm that:
a. in the preparation of the annual accounts for the year ended March
31, 2015, the applicable accounting standards read with requirements
set out under Schedule III to the Act, have been followed and there are
no material departures from the same;
b. the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2015 and of the profit of the Company
for the year ended on that date;
c. the Directors have taken proper care for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a 'going concern'
basis for the financial year ended March 31, 2015;
e) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively
Corporate Governance Report
The Company is committed to maintain the highest standards of corporate
governance and adhere to the corporate governance requirements set out
by SEBI. The report on Corporate Governance as stipulated under the
Listing Agreement forms an integral part of this Report. The requisite
certificate from the Auditors of the Company confirming compliance with
the conditions of corporate governance is attached to the report on
Corporate Governance.
Corporate Social Responsibility (CSR)
The Corporate Social Responsibility Committee (CSR Committee) has
formulated and recommended to the Board, a Corporate Social
Responsibility Policy (CSR Policy) indicating the activities to be
undertaken by the Company, which has been approved by the Board.
The Composition of the Committee is provided below.
Name Category
Prof. M. Bhagvant Rao Independent, Non- Executive
Dr. V. Peesapati Independent, Non- Executive
Dr. V. Manohar Rao Non Independent, Executive
Mr. Santosh Varalwar Non Independent, Executive
The CSR Policy may be accessed on the Company's website at the link:
www.vivimedlabs.com
The Company would undertake CSR initiatives in compliance with Schedule
VII to the Act. During the year, the Company has not spent on CSR
activities. The Company is evaluating various proposals to ensure CSR
funds are optimally utilised (Annexure I).
Nomination and Remuneration Committee
The Company's Nomination and Remuneration committee consists
Independent Directors which ensures transparency in determining the
remuneration of Directors, KMPs and other employees of the Company.
During the FY 2014-15, the composition of Nomination and Remuneration
Committee is provided below.
Name Category
Prof. M. Bhagvant Rao Independent, Non-Executive
Mr. P. V. Ratnam Independent, Non-Executive
Dr.V.Peesapati Independent, Non-Executive
Mr. Nixon Patel Independent, Non -Executive
The Performance Evaluation and Remuneration Policy framed by the
Committee and approved by the Board is directed towards rewarding
performance of Executive and Non- Executive Directors, Key Managerial
Personnel and Senior Management Personnel of the Company based on
review of achievements periodically.
Risk Management
During the year, your Directors have constituted a Risk Management
Committee which has been entrusted with the responsibility to assist
the Board in (a) Overseeing and approving the Company's enterprise wide
risk management framework; and (b) Overseeing that all the risks that
the organisation faces such as strategic, financial, credit, market,
liquidity, security, property, IT, legal, regulatory, reputational and
other risks have been identified and assessed and there is an adequate
risk management infrastructure in place capable of addressing those
risks. Your Company has proper process for Risk Management.
Internal Audit & Controls
Your Company continues to engage M/s Price Waterhouse Coopers Pvt. Ltd
as its Internal Auditors. During the year, your Company continued to
implement their suggestions and recommendations to improve the internal
controls. Their scope of work includes review of operational
deficiency, effectiveness of systems & processes, compliances and
assessing the internal control strengths in all areas. Internal
Auditors observations are discussed and suitable corrective actions are
taken as per the directions of Audit Committee on an on-going basis to
improve efficiency in operations.
The Company's internal control systems are well established and
commensurate with the nature of its business and the size and
complexity of its operations. The Audit Committee reviews adequacy and
effectiveness of the Company's internal control environment and
monitors the implementation of audit recommendations. The
recommendations/suggestions of the internal auditors are discussed in
the Audit Committee meetings periodically.
Directors and Key Managerial Personnel
In accordance with the provisions of Section 152 of the Companies Act,
2013, Mr. Srinivas Chidambaram(Non-Executive, Non- Independent
Director), Mr Sandeep Varalwar (Non Independent, Executive Director)
and Mr S Raghunandan (Non Independent, Executive Director) of the
Company, retires by rotation at the ensuing Annual General Meeting and
being eligible offers themselves for re- appointment.
Mr. Santosh Varalwar was re-appointed as Managing Director & CEO of the
Company with effect from August 14, 2010 by the Shareholders at the
22nd Annual General Meeting of the Company held on September 18, 2010.
The current term of Mr. Santosh Varalwar as Managing Director & CEO of
the Company expires on August 13, 2015. Mr. Manohar Rao Varalwar, Mr.
Subhash Varalwar, Mr. Sandeep Varalwar and Mr S. Raghunandan were
re-appointed as whole time Directors of the Company with effect from
August 14, 2010 by the Shareholders at the 22nd Annual General Meeting
of the Company held on September 18, 2010. The current term of them as
whole Time Directors of the Company expires on August 13, 2015. In view
of their consistent efforts which have contributed to the growth of the
organisation and the sincere service rendered for the better
performance of the organisation during their tenure as Managing
Director & CEO and whole time Directors, the Board of Directors on the
recommendation of the Nomination and Remuneration Committee, has
decided to re-appoint Mr. Santosh Varalwar as Managing Director & CEO
and Mr. Manohar Rao Varalwar ,Mr. Subhash Varalwar, Mr. Sandeep
Varalwar and Mr S. Raghunandan as whole time Directors of the Company
for a further period of 5 (five) years effective from August 14, 2015
under Section 196, 197, 203 read with Schedule V of the Companies Act,
2013 and rules made thereunder. The approval of the members is being
sought to the terms, conditions and stipulations for the re-appointment
of Mr. Santosh Varalwar as Managing Director & CEO and Mr. Manohar Rao
Varalwar, Mr. Subhash Varalwar, Mr. Sandeep Varalwar and Mr S.
Raghunandan as whole time Directors and the remuneration payable to
them and resolution pertaining to the same is contained in the notice
calling Annual General Meeting.
During the year under review, the members approved the appointments of
Prof. V. Bhagvant Rao ,Dr V Peesapati, Mr. Nixon Patel and Mr P V
Rathnam as Independent Directors of the Company who are not liable to
retire by rotation.
To broad base the Board and in compliance with Companies Act 2013 &
Listing agreements with stock exchanges, the Board of Directors have
appointed Mrs. Umanath Varhabotla as an Additional Director (Woman
Director) on the Board. Resolution pertaining to the appointing Ms.
Umanath Varhabotla as an Independent director is contained in the
notice calling Annual General Meeting.
During the year under review, the Company appointed Mr N M Vaidyanathan
as CFO of the Company and due to personnel reasons he resigned on
18/3/2015.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed both under the Act and Clause 49 of the
Listing Agreement with the Stock Exchanges.
The Company has devised a Policy for performance evaluation of
Independent Directors, Board, Committees and other individual Directors
which include criteria for performance evaluation of the non-executive
directors and executive directors.
The Board of Directors has complete access to the information within
the Company. Independent Directors have the freedom to interact with
the Company's management. Interactions happen during Board / Committee
meetings, when CXOs are asked to make presentations about performance
of the Company to the Board. Apart from this, they also have
independent interactions with the Statutory Auditors, the Internal
Auditors and external advisors appointed from time to time. Further,
they meet without the presence of any management personnel and their
meetings are conducted informally to enable the Independent Directors
to discuss matters pertaining to the Company's affairs and put forth
their combined views to the Board of Directors of the Company.
Employee Stock Option Plan (ESOP)
The Nomination and Remuneration Committee of the Board of Directors of
the Company, inter alia, administers and monitors the Employees' Stock
Option Plan of the Company in accordance with the applicable SEBI
Guidelines.
The applicable disclosures as stipulated under the SEBI Guidelines as
on March 31, 2015 (cumulative position) with regard to the Employees'
Stock Option Scheme (ESOS) are herein under provided.
Pursuant to clause 14 of the SEBI (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999, certificate from M/s.
P. Murali & Co, Statutory Auditors is given as Annexure II to this
report.
The details of the stock options granted / vested / exercised under the
Vivimed Labs Employee Stock Option Plan 2010 approved by the members in
22nd AGM, are given below:
Sl.
no. Description Details
(a) Options granted till date under
the scheme 500000
(b) Pricing formula More than 50% price
calculated as per SEBI
guidelines . on National
Stock Exchange (where
there was highest trading
volume)
(c) Options vested during the year 100000
(d) Options exercised during the year Nil
(e) Total number of shares arising
as a result of exercise of options Nil
(f) Options lapsed during the year Nil
(g) Options lapsed till date under
the scheme Nil
(h) Variation in terms of options Nil
(i) Money realised by exercise of
options during the year Nil
(j) Total number of options in force 500000
(k) Employee wise details of options
granted to:
(i) Senior managerial personnel
Name No. of options
1. Suresh Mishra 25000
2. Ramesh Challa 25000
3. S. P. Jain 50000
4. Paaritosh Kumar. V. 25000
5. Vivekananda 25000
6. Phanindernath 85000
7. Dayasagar Vaidya 25000
8. Kalyan 30000
9. Ravi Kiran V. 50000
10. D. Satish Chandra 25000
11. Satish Chandra Mudgade 25000
12. Ram Caesar 20000
13. Talikunda Sreekant 20000
14. Gotimukal Girish 20000
15. Sheshi Reddy 10000
16. Govardhan 10000
17. A. Raghu Ramulu 10000
18. A. S. Lahari 20000
(ii) Any other employee who receives
a grant in any one year of options
amounting to Nil
5% or more of options granted
during the year.
(iii) Identified employees who
were granted option, during any
one year, equal to Nil
or exceeding 1% of the issued
capital (excluding outstanding
warrants and conversions) of the
Company at the time of grant.
(l) Diluted Earnings per share (EPS)
pursuant to issue of shares
on exercise of options Not Applicable
calculated in accordance with
Accounting Standard (AS) 20 Â
Earning per share.
(m) Where the Company has calculated
the employee compensation
cost using the intrinsic Not Applicable
value of the stock options, the
difference between the employee
compensation cost that shall have
been recognised if it had used the
fair value of the options.
(n) Weighted-average exercise prices
and weighted-average fair values
of options, whose Not Applicable
exercise price either equals or
exceeds or is less than the market
price of the stock
(o) Description of the method and
significant assumptions used
during the year to estimate Not Applicable
the fair values of options.
Auditors & their Report
Statutory Auditors
Pursuant to the provisions of Sections 139, 141 & 142 and other
applicable provisions, if any, of the Companies Act, 2013 and rules
thereon, M/s. P.Murali &Co, Chartered Accountants, Hyderabad was
re-appointed for 1 year in the last Annual General meeting. The Company
has received a certificate from the auditors to the effect that their
re-appointment if made, would be in accordance with the conditions as
specified under Section 141 of the Companies Act, 2013 read with
Companies (Audit and Auditors) Rules, 2014. The Directors recommend for
re- appointment of M/s. P.Murali &Co,, Chartered Accountants as
Statutory Auditors for the FY 2015-16 & FY 2016-17 subject to
ratification in next Annual General Meeting. A resolution proposing
re-appointment of M/s. P.Murali & Co, Chartered Accountants as the
Statutory Auditors of the Company for the FY 2015-16 & FY 2016-17
pursuant to section 139 of the Companies Act, 2013 forms part of the
Notice.
Comments of the Auditors in their report and the notes forming part of
the accounts are self-explanatory and need no comments. However, the
Auditors have not made any adverse qualifications in their report on
the accounts of the Company under review.
Cost auditors
In pursuance of Section 233B of the Companies Act, 1956 the Central
Government has ordered Cost Audit for pharma sector Accordingly, M/s
M/s. A.S. Rao & Co, Cost Accountants were appointed as Cost Auditors to
render reports to the Central Government. resolution pertaining to the
ratification of remuneration of cost auditors is contained in the
notice calling Annual General Meeting.
Secretarial Auditor
The Board has appointed M/s. N V S S S Rao, Company Secretary in
practice , to conduct Secretarial Audit for the FY 2014-15. The
Secretarial Audit Report for the financial year ended March 31, 2015 is
annexed herewith marked as Annexure III to this Report. The
Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
Contracts and Arrangements with Related Parties
All contracts / arrangements / transactions entered by the Company
during the financial year with related parties were in the ordinary
course of business and on an arm's length basis. During the year,
except with the wholly owned subsidiary, the Company had not entered
into any contract / arrangement / transaction with related parties
which could be considered material in accordance with the policy of the
Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing
with related party transactions as approved by the Board may be
accessed on the Company's website at the link: www.vivimedlabs.com.
The particulars of contracts or arrangements with related parties
referred to in section 188(1) are prepared in Form No. AOC-2 pursuant
to clause (h) of sub-section (3) of section 134 of the Act and Rule
8(2) of the Companies (Accounts) Rules, 2014 and the same is enclosed
as Annexure IV to this Report.
Disclosures
Audit Committee
The Audit Committee comprises majority Independent Directors namely Mr.
P. V. Ratnam (Chairman), Prof. V. Bhagvant Rao and Mr. Srinivas
Chidambaram as other members. All the recommendations made by the Audit
Committee were accepted by the Board.
Vigil Mechanism
The Company has a Vigil mechanism and Whistle blower policy in terms of
the Listing Agreement, under which the employees are free to report
violations of applicable laws and regulations and the Code of Conduct.
Protected disclosures can be made by a whistle blower through a
dedicated e-mail, or a letter to the Chairman of the Audit Committee.
The Policy on vigil mechanism and whistle blower policy may be accessed
on the Company's website at the link: www. vivimedlabs.com
Meetings of the Board
five meetings of the Board of Directors were held during the year under
review. For further details, please refer report on Corporate
Governance of this Annual Report.
Code of Conduct
A declaration regarding compliance with the code of conduct signed by
the Company's Managing Director & CEO is published in the Corporate
Governance Report which forms part of the annual report.
Particulars of loans given, investments made, guarantees given and
securities provided are provided in the standalone financial statement
(Please refer Notes to the standalone financial statement).
Conservation of energy, technology absorption and foreign exchange
earnings and outgo:
The particulars relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be
disclosed under the Act, are provided in Annexure V to this Report.
Extract of Annual Return
Extract of Annual Return of the Company is annexed herewith as Annexure
VI to this Report.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read with
Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, no employee of the Company except
executive directors and Key Managerial persons are drawing remuneration
in excess of the limits set out in the said rules forms part of this
Report.
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
also forms part of this Report.
Your Directors further state that, the remuneration paid to the Key
managerial Personnel and others is as per the Remuneration Policy of
the Company.
Policy on Sexual Harassment
The Company has adopted policy on Prevention of Sexual Harassment of
women at Workplace in accordance with The Sexual Harassment of women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, the Company has not received any
complaints pertaining to Sexual Harassment.
General
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme save and except ESOP referred to in this
Report.
4. Neither the Managing Director nor the Whole-time Directors of the
Company receive any remuneration or commission from any of its
subsidiaries.
6. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operations in future. (Except Rs.10 lakhs imposed by SEBI vide its
order dated 24.7.2014 for not intimating the Exact date of dividend
(for FY 2012-13) payment to stock exchanges).
Cautionary statement
The management of Vivimed Labs has prepared and is responsible for the
financial statements that appear in this report. These are in
conformity with accounting principles generally accepted in India and,
therefore, may include amounts based on informed judgements and
estimates. The management also accepts responsibility for the
preparation of other financial information that is included in this
report. Statements in this Management Discussion and Analysis
describing the Company's objectives, projections, estimates and
expectations may be 'forward looking statements' within the meaning of
applicable laws and regulations. Management has based these forward
looking statements on its current expectations and projections about
future events. Such statements involve known and unknown risks,
significant changes in political and economic environment in India or
key markets abroad, tax laws, litigation, labour relations, exchange
rate fluctuations, interest and other costs may cause actual results to
differ materially
Appreciation and Acknowledgement
Your Directors would like to express their sincere appreciation for the
assistance and co-operation received from the financial institutions,
banks, Government authorities, customers, vendors and members during
the year under review. Your Directors also wish to place on record
their deep sense of appreciation for the committed services by the
Company's executives, staff and workers.
For and on Behalf of Board of Directors
Sd/- Sd/-
Date : August 14, 2015 Dr. V. Manohar Rao Santosh Varalwar
Place : Hyderabad Whole Time Director Managing Director & CEO
Mar 31, 2014
To the Members,
The Directors are pleased to present their Twenty Sixth Annual Report
on business and operations of the Company and the accounts for the
financial year ended March 31, 2014.
The year in retrospect
The consolidated net revenue of the Company during 2013- 14 grew by
21.8% at H13,508.33 million as compared to H11,087.96 million last
year. The Company has achieved a standalone net revenue of H4,319.93
million during the year under review, as compared with H4,231.25
million during the previous year, a rise of 2.1%
Consolidated profit before tax decreased to H868.62 million, as
compared with H978.76 million in the previous year, a decrease of
(11.25)% over the last year. Standalone profit before tax decreased to
H388.07 million from H513.81 million, a decline of (2.47)% over last
year.
Consolidated profit after tax decreased to H663.94 million as compared
with H835.84 million in the previous year, a decease of (20.56)% over
the last year. The Company recorded a Standalone profit after tax of
H266.30, a decrease (27.50)%as compared with last year''s H367.36
million.
A detailed review of operations and performance of the Company is
contained in the Management Discussion and Analysis Report, which is
given as a separate chapter in the Annual Report.
Detailed summary of financial performance is given in table below:
H in millions
Particulars Standalone Consolidated
Year ended Year ended Year ended Year ended
31.03.2014 31.03.2013 31.03.2014 31.03.2013
Revenue from 4,319.93 4231,25 13,508.33 11,087.96
Operations
Other Income 15.50 33.79 82.15 118.74
Change in Inventory 14.10 75.53 73.84 241.59
Total Income 4,349.53 4,340.57 13,664.32 11,448.29
Total operating
expenditure 3,337.39 3,370.32 11,531.63 9,472.09
Operating Profit
(EBIDTA) 1,012.17 970.25 2,132.69 1,976.20
Finance Cost 443.44 284.38 602.91 409.32
Depreciation and 180.63 172.07 661.16 588.11
Amortisation
Profit Before Tax 388.08 513.81 868.62 978.76
Current Tax 77.64 102.53 199.81 183.01
Deferred Tax 44.14 103.24 4.86 19.22
Profit After Tax 266.30 367.36 663.94 835.84
Basic EPS 16.43 22.87 40.97 52.04
Diluted EPS 16.43 22.87 40.97 52.04
Standalone financials
The Ministry of Corporate Affairs (MCA) vide notification no. S.o.
447(E) dated February 28, 2011 amended the existing Schedule vI to the
Companies Act, 1956. The revised Schedule vI is applicable from
financial year commencing from April 1, 2011. The financial statements
of our Company for the year ended March 31, 2014 have been prepared in
accordance with the revised Schedule vI and accordingly, the previous
year''s figures have been reclassified/ regrouped to conform to this
year''s classification.
Consolidated financials
The Ministry of Corporate Affairs (MCA) by General Circular No. 2/2011
dated February 8, 2011, had granted an exemption to companies from
complying with Section 212 of the Companies Act, 1956, provided such
companies fulfill conditions mentioned in the said circular.
Accordingly, the Board of Directors of our Company at its meeting held
on May 29, 2014, approved the Audited Consolidated Financial Statements
for the financial year 2013-14 in accordance with the Accounting
Standard (ASÂ21) and other Accounting Standards issued by the Institute
of Chartered Accountants of India as well as Clause 32 of the Listing
Agreement, which include financial information of all its subsidiaries,
and forms part of this report. The Consolidated Financial Statements
of your Company for the financial year 2013-14, have been prepared in
compliance with the applicable Accounting Standards and where
applicable the Listing Agreement as prescribed by the Securities and
Exchange Board of India.
Changes to share capital
During the year under review the Issued, Subscribed and Paid up Capital
has increased by an amount of H160.6 million to H162.0 million. This
change in Issued, Subscribed and Paid Up Shares Capital is attributed
to allotment of Equity Shares against Acquisition of Finoso Pharama, to
its shares holders. The Authorised Share Capital of the Company Stands
at H1,110 million.
Dividend
The Board recommended a dividend of H3/- on fully paid equity shares of
H10 each for the FY 2013-14 for your approval. There will be no tax
deduction at source on Dividend Payments, but the Company will have to
bear tax on dividend @ 15.45%, inclusive of surcharge.
The dividend if approved, shall be payable to the shareholders
registered in the books of the Company to those Members, holding shares
in physical form, whose names shall appear on the Company''s Register of
Members on close of business hours on Thursday, September 25, 2014; in
respect of the shares held in dematerialised form, the dividend will be
paid to the Members whose names are furnished by the National
Securities Depository Limited and the Central Depository Services
(India) Limited as the beneficial owners as at the close of business
hours on Thursday, September 25, 2014. (the book closure from 26th
September 2014 to 30th September 2014 (both days inclusive).
Transfer to general reserves
The General Reserves, on a standalone basis, at the beginning the year
was H40.30 million. General Reserves at the end of the year are H80.71
million. our Board has decided to transfer an amount of H40.41 million
to General Reserves.
Directors
In accordance with the New Companies Act 2013 and other applicable
provisions /rules, Mr. Nixon Patel, Mr. M. Bhagvant Rao, Dr. v.
Peesapati and Mr. P. v. Ratnam are required to be appointed as
Independent Directors not liable to retire by rotation. Mr. Manohar
Rao varalwar and Mr. Subhash varalwar, whole Time Directors of the
Company being eligible, offer themselves for reappointment as directors
liable to retire by rotation.
Subsidiary companies
The Company has five Indian Subsidiaries  Creative Healthcare Private
Limited, klar Sehen Private Limited, octtantis Nobel Labs Private
Limited, Finoso Pharma Private Limted and vivimed Labs (Alathur)
Private Limited.
Hong kong based vivimed Holdings Limited a 100% subsidiary of the
Company is a 100% holding Company of vivimed Labs Europe Limited, Uk.
Vivimed Labs USA Inc. is a 100% subsidiary of vivimed Labs Limited.
Mauritius based vivimed Labs Mauritius Limited, a 100% subsidiary
vivimed Labs Limited is the holding company of the 5 downstream
subsidiaries as under:
vivimed Labs Uk Limited, Uk
vivimed Labs Spain S. L., Spain
Union Quimico Farmaceutica S.A.U, Spain
Holliday International Limited, Uk
Uquifa Mexico S.A. de C.v., Mexico
In totality, as on March 31, 2014, the Company has 5 Indian and 9
foreign subsidiaries.
Pursuant to a general exemption granted by the Ministry of Corporate
Affairs under Section 212 of the Companies Act, 1956, vide its General
Circular No. 2/2011 dated February 8, 2011, the Company is not required
to annex to this Report, the Annual Reports of the above mentioned 5
Indian Subsidiaries and 9 foreign subsidiaries, for the year ended
March 31, 2014.
However if any member of the Company or its subsidiaries so desires,
the Company will make available the Annual Accounts of subsidiaries to
them on request.
Statement pursuant to Section 212 of the Companies Act, 1956, relating
to Subsidiary Companies for the financial year ended March 31, 2014 and
details of each subsidiary with respect to capital, reserves, total
liabilities, details of investment, turnover, profit before taxation,
provision for taxation, profit after taxation and proposed dividend are
given in Annexure - A of this Report.
Conservation of energy, technology absorption and foreign exchange
earnigs and outgo As required by the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988, the
relevant data pertaining to conservation of energy, technology
absorption and foreign exchange earnings and outgo is given in the
prescribed format a s Annexure - B to this Report.
Particulars of employees
Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) (Amendment) Rules, 2011, is not applicable
to the Company, hence is not being furnished with the directors report.
Human resource
our Company believes that competent human resources are the driving
force for any organisation that enables a company to grow in leaps and
bounds. The Company has been able to create a favourable work
environment that encourages continuous learning and thereby leading to
innovation. our Company has put in place a scalable recruitment and
human resources plan, devised to attract and retain high calibre
personnel.
Vivimed Labs has been fortunate in having a set of committed employees
at all levels and looks forward to nurture them and retain their
loyalty. our Company recognises the value of the committed employees
and efforts are being made to enhance the bonding between the Company
and the committed employees.
Risk management
Our Company views risk management as a value creating function,
responsible for bringing about a culture change and preparing the
organisation to face uncertain events. with this perspective, FY 2014
saw a more comprehensive risk management policy being re-launched in
vivimed which is still being implemented across all divisions and
branches, both in India and abroad. This policy strengthens ability to
better visualise enterprise, process and compliance risks, and to
proactively undertake mitigation actions to minimise such risks  and
thus increase the likelihood of business success. The policy recognises
that risk is not just about downsides or things going wrong; and that
it should be equally focused on missing out the upside or added value
that opportunities present.
Audit Committee of the Board of Directors conducts quarterly reviews
regarding adequacy of risk management.
Internal controls and their adequacy our Company believes that a strong
internal controls framework is an essential pre-requisite of growing
businesses. It has well documented policies, procedures and
authorisation guidelines commensurate with the size of the
organisation, as well as an independent internal audit system to
conduct audits of various divisions, corporate headquarters and
overseas operations.
Audit Committee of the Board is updated on significant internal audit
observations, compliance with statutes, progress of risk management and
effectiveness of working of the control systems every quarter.
Auditors
The Company''s Statutory Auditors, M/s P. Murali & Co., Chartered
Accountants, hold office up to the conclusion of the forthcoming Annual
General Meeting.
It is proposed to appoint P. Murali & Co., Chartered Accountants,
Hyderabad, as Statutory Auditors of the Company to hold office from the
conclusion of this Annual General Meeting until the conclusion of the
next Annual General Meeting of the Company. The necessary resolution
seeking approval of Statutory Auditors has been incorporated in the
notice convening the Annual General Meeting.
Cost auditors
In pursuance of Section 233B of the Companies Act, 1956 the Central
Government has ordered Cost Audit for pharma sector Accordingly, M/s
Bharthula & Associates, Cost Accountants were appointed as Cost
Auditors to render reports to the Central Government.
Fixed deposits
our Company has not accepted any fixed deposits under Section 58A of
the Companies Act, 1956 hence no amount of principal or interest was
outstanding as of the Balance Sheet Date.
Management discussion & analysis report The Management Discussion &
Analysis Report highlighting the industry structure and developments,
opportunities and threats, future outlook, risks and concerns is
furnished separately and forms part of this report.
Corporate governance report and general shareholders information
As required by clause 49(vi) of the Listing Agreement entered into by
the Company with the Stock Exchanges a detailed report on Corporate
Governance is provided in Annexure of the Directors Report. The General
Shareholders Information has been provided as Annexure which forms part
of the Directors Report. The Company is in compliance with the
requirements and disclosures that have to be made in this regard. The
Auditors Certificate on compliance with Corporate Governance
requirements by the Company is attached to Corporate Governance Report
and forms part of the Directors Report.
Directors responsibility statement The Directors would like to assure
the members that the financial statements for the year under review
conform in their entirely to the requirement of the Companies Act,
1956.
The Directors confirm that :
The Annual Accounts have been prepared in conformity with the
applicable Accounting Standards;
The Accounting policies selected and applied on a consistent basis,
give a true and fair view of the affairs of the Company and of the
profit for the financial year;
Significant care has been taken that adequate accounting records have
been maintained for safeguarding the assets of the Company, and for
prevention and detection of fraud and other irregularities;
The Annual Accounts have been prepared on a going concern basis.
Outlook
The Company has blended aggression with stability. we
would like to assure shareholders that investments in projects,
products and markets will reinforce our competitive position.
vivimed''s strategic blueprint will unfold in a phased manner and as it
does, it is confident of enhancing shareholder value on a sustained
basis over the medium to long-term.
Cautionary statement
The management of vivimed Labs has prepared and is responsible for the
financial statements that appear in this report. These are in
conformity with accounting principles generally accepted in India and,
therefore, may include amounts based on informed judgements and
estimates. The management also accepts responsibility for the
preparation of other financial information that is included in this
report. Statements in this Management Discussion and Analysis
describing the Company''s objectives, projections, estimates and
expectations may be ''forward looking statements'' within the meaning of
applicable laws and regulations. Management has based these forward
looking statements on its current expectations and projections about
future events. Such statements involve known and unknown risks,
significant changes in political and economic environment in India or
key markets abroad, tax laws, litigation, labour relations, exchange
rate fluctuations, interest and other costs may cause actual results to
differ materially.
Acknowledgement
our Directors place on record their sincere appreciation for
significant contribution made by the employees through their
dedication, hard work and commitment and of the customers for the trust
reposed on the Company. we also acknowledge the support extended to us
by bankers, government agencies, shareholders and investors at large.
we look forward to have the same support in our endeavour to attain our
vision.
For and on Behalf of Board of Directors
Sd/-
Date : 13/08/2014 Dr. V. Manohar Rao Santosh Varalwar
Place : Hyderabad Whole Time Director Managing Director & CEO
Mar 31, 2013
To the Members,
The Directors are pleased to present their Twenty Fifth Annual Report
on business and operations of the Company and the accounts for the
financial year ended March 31, 2013.
The year in retrospect
The consolidated net revenues of the Company during 2012-13 grew by
65.91% at Rs.11,087.96 million as compared to Rs.6,683.14 million last
year. The Company has achieved a standalone net revenue of Rs.4,231.25
million during the year under review, as compared with Rs.3,829.00
million during the previous year, a rise of 10.51%.
Consolidated profit before tax increased to Rs.978.76 million, as
compared with Rs.778.21 million in the previous year, an increase of
25.77% over the last year. Stand alone profit before tax increased from
Rs.513.40 million to Rs.513.81 million an increase of 0.08% over last
year.
Consolidated profit after tax increased to Rs.835.84 million as
compared with Rs.631.42 million in the previous year, an increase of
32.37% over the last year. The Company recorded a Stand alone profit
after tax of Rs.367.36 million, a Decrease 9.10% as compared with last
year''s Rs.404.15 million.
A detailed review of operations and performance of the Company is
contained in the Management Discussion and Analysis Report, which is
given as a separate chapter in the Annual Report.
Detailed summary of financial performance is given in table below:
Rs. in million
Particulars Stand alone Consolidated
Year
ended Year
ended Change Year
ended Year
ended Change
31.03.
2013 31.03.
2012 in % 31.03.
2013 31.03.
2012 in %
Revenue from 4,231.25 3,829.00 10.51% 11,087.96 6,683.14 65.91%
Operations
Other Income 33.79 4.20 706.52% 118.74 26.82 342.71%
Change in (75.53) (15.68) 381.92% (241.59) (183.53) 31.63%
Inventory
Total Income 4,189.51 3,817.52 9.74% 10,965.10 6,526.43 68.01%
Total
operating 3,370.32 3,004.63 10.85% 9,472.10 5,563.69 70.25%
expenditure
Operating 970.26 844.26 14.92% 1,976.19 1,329.80 48.61%
Profit
(EBIDTA)
Finance Cost 284.38 225.35 26.19% 409.32 283.70 44.28%
Depreciation 172.07 105.51 63.08% 588.11 267.89 119.53%
and
Amortisation
Profit Before 513.81 513.40 0.08% 978.76 778.21 25.77%
Tax
Current Tax 102.53 102.72 (0.19)% 183.01 158.90 15.17%
Deferred Tax 103.24 6.54 1479.62% 19.22 (12.11)(258.73)
%
Profit After
Tax 367.36 404.14 (9.10)% 835.84 631.42 32.38%
Basic EPS 22.87 29.00 (21.14)% 52.04 45.31 14.85%
Diluted EPS 22.87 25.16 (9.10)% 52.04 39.31 32.38%
Standalone Financials
The Ministry of Corporate Affairs (MCA) vide notification no. S.O.
447(E) dated February 28, 201 1 amended the existing Schedule VI to the
Companies Act, 1956. The Revised Schedule VI is applicable from
financial year commencing from April 1, 2011. The financial statements
of our Company for the year ended March 31, 2013 have been prepared in
accordance with the Revised Schedule VI and accordingly, the previous
year''s figures have been reclassified/ regrouped to conform to this
year''s classification.
Consolidated Financials
The Ministry of Corporate Affairs (MCA) by General Circular No. 2/2011
dated February 8, 2011, had granted an exemption to companies from
complying with Section 212 of the Companies Act, 1956, provided such
companies fulfill conditions mentioned in the said circular.
Accordingly, the Board of Directors of our Company at its meeting held
on May 30, 2013, approved the Audited Consolidated Financial Statements
for the financial year 2012-13 in accordance with the Accounting
Standard-21 and other Accounting Standards issued by the Institute of
Chartered Accountants of India as well as Clause 32 of the Listing
Agreement, which include financial information of all its subsidiaries,
which forms part of this report.
Changes in Share Capital
During the year, the Issued, Subscribed and Paid up Equity Capital has
increased from Rs.139.0 million to Rs.160.6 million due to allotment of
Equity Shares against Conversion of CCPS. The Authorised Share Capital
of the Company Stands at Rs.1110.0 million.
Dividend
The Company paid a pro rata Interim dividend @ 3.50% p.a. on fully paid
Compulsorily Convertible and Cumulative Preference Shares (CCPS''s) of
Rs.1,000 each which were converted into Equity Shares on 22nd March
2013.
The Board recommended a dividend of Rs.3/- on fully paid equity shares
of Rs.10 each for the FY 2012-13 for your approval.
The dividend if approved, shall be payable to the shareholders
registered in the books of the Company to those Members, holding shares
in physical form,whose names shall appear on the Company''s Register of
Members on close of business hours on Wednesday, September 25, 2013; in
respect of the shares held in dematerialised form, the dividend will be
paid to the Members whose names are furnished by the National
Securities Depository Limited and the Central Depository Services
(India) Limited as the beneficial owners as at the close of business
hours on Wednesday, September 25, 2013 (the book closure from 26th
September, 2013 to 30th September, 2013 (both days inclusive).
Directors
In accordance with the Company''s Articles of Association, read with
Sections 255, 256 and 262 of the Companies Act, 1956, Mr. Nixon Patel
and Mr. M. Bhagvanth Rao are retiring at the ensuing Annual General
Meeting. Mr. Nixon Patel and Mr. M. Bhagvanth Rao, being eligible,
offer themselves for re- appointment.
Mr. C. Ramakrishna and Mr. R. K. Dhar resigned during the year The
Board places on record its sincere appreciation of the services
rendered by Mr. C. Ramakrishna and Mr. R. K. Dhar during their tenure
of directorship. The Board of Directors appointed Dr. V. Peesapati as
an Additional Director effective from May 22, 2013.
Subsidiary Companies
Pursuant to a general exemption granted by the Ministry of Corporate
Affairs under Section 212 of the Companies Act, 1956, vide its General
Circular No. 2/2011 dated February 8, 2011, the Company is not required
to annex to this Report, the Annual Reports of the above mentioned 3
Indian Subsidiaries and 9 foreign subsidiaries, for the year ended
March 31, 2013. However if any member of the Company or its
subsidiaries so desires, the Company will make available the Annual
Accounts of subsidiaries to them on request.
Statement pursuant to Section 212 of the Companies Act, 1956, relating
to Subsidiary Companies for the financial year ended March 31, 2013 and
details of each subsidiary with respect to capital, reserves, total
liabilities, details of investment, turnover, profit before taxation,
provision for taxation, profit after taxation and proposed dividend are
given in Annexure - A of this Report.
Acquisition & Relevant Date
Acquisition of Finoso Pharma Pvt. Ltd. is in process. However, the
Company in its EGM conducted on 12th March, 2013 had mentioned relevant
date as 11th February,2013 However as per the instructions/advise of
stock exchanges (BSE & NSE) the Company has changed the relevant date
as 8th February, 2013 for calculation of minimum price of Equity shares
to be issued to the share holders of Finoso Pharma Pvt Ltd.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
As required by the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, the relevant data pertaining to
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the prescribed format as Annexure to
this Report.
Particulars of Employees
Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) (Amendment) Rules, 2011, is not applicable
to the Company, hence is not being furnished with the Directors Report.
Human Resource
Our Company believes that competent human resources are the driving
force for any organisation that enables a Company to grow in leaps and
bounds. The Company has been able to create a favourable work
environment that encourages continuous learning and thereby leading to
innovation. Our Company has put in place a scalable recruitment and
human resources plan, devised to attract and retain high calibre
personnel.
Vivimed Labs Limited has been fortunate in having a set of committed
employees at all levels and looks forward to nurture them and retain
their loyalty. Our Company recognises the value of the committed
workers and efforts are being made to enhance the bonding between the
Company and the committed employees.
Risk Management
Our Company views risk management as a value creating function,
responsible for bringing about a culture change and preparing the
organisation to face uncertain events. With this perspective, FY 2013
saw a more comprehensive risk management policy being re-launched in
Vivimed which is being implemented across all divisions and branches,
both in India and abroad. This policy strengthens ability to better
visualise enterprise, process and compliance risks, and to proactively
undertake mitigation actions to minimise such risks - and thus increase
the likelihood of business success. The policy recognises that risk is
not just about downsides or things going wrong; and that it should be
equally focused on missing out the upside or added value that
opportunities present.
Audit Committee of the Board of Directors conducts quarterly reviews
regarding adequacy of risk management.
Internal controls and their adequacy
Our Company believes that a strong internal controls framework is an
essential pre-requisite of growing businesses. It has well documented
policies, procedures and authorisation guidelines to commensurate with
the size of the organisation, as well as an independent internal audit
system to conduct audits of various divisions, corporate headquarters
and overseas operations.
Audit Committee of the Board is updated on significant internal audit
observations, compliance with statutes, progress of risk management and
effectiveness of working of the control systems every quarter.
Auditors
The Company''s Statutory Auditors M/s P. Murali & Co., Chartered
Accountants, hold office up to the conclusion of the forthcoming Annual
General Meeting.
It is proposed to appoint P. Murali & Co., Chartered Accountants,
Hyderabad, as Statutory Auditors of the Company to hold office from the
conclusion of this Annual General Meeting until the conclusion of the
next Annual General Meeting of the Company. The necessary resolution
seeking approval of Statutory Auditors has been incorporated in the
notice convening the Annual General Meeting.
Cost auditors
In pursuance of Section 233B of the Companies Act, 1956 the Central
Government has ordered Cost Audit for pharma sector Accordingly, M/s
Bharthula & Associates, Cost Accountants were appointed as Cost
Auditors to render reports to the Central Government. The Reports for
the year 2011-12 were duly submitted on and for the year 2012-13 the
reports will be submitted on or before the due date.
Fixed Deposits
Our Company has not accepted any fixed deposits under Section 58A of
the Companies Act, 1956 hence no amount of principal or interest was
outstanding as of the Balance Sheet Date.
Corporate Governance Report and General Shareholders Information
As required by clause 49(vi) of the listing agreement entered into by
the Company with the Stock Exchanges a detailed report on Corporate
Governance is provided in Annexure of the Directors Report. The General
Shareholders Information has been provided as Annexure which forms part
of the Directors Report. The Company is in Compliance with the
requirements and disclosures that have to be made in this regard. The
Auditors Certificate on Compliance with Corporate Governance
requirements by the Company is attached to Corporate Governance Report
and forms part of the Directors Report.
Directors Responsibility Statement
The Directors would like to assure the members that the financial
statements for the year under review conform in their entirely to the
requirement of the Companies Act, 1956.
The Directors Confirm that:
- The Annual Accounts have been prepared in conformity with the
applicable Accounting Standards;
- The Accounting policies selected and applied on a consistent basis,
give a true and fair view of the affairs of the Company and of the
profit for the financial year;
- Significant care has been taken that adequate accounting records
have been maintained for safeguarding the assets of the Company, and
for prevention and detection of fraud and other irregularities;
- The Annual Accounts have been prepared on a going concern basis.
Outlook
The Company has blended aggression with stability. We would like to
assure shareholders that investments in projects, products and markets
will reinforce our competitive position. Vivimed''s strategic blueprint
will unfold in a phased manner and as it does, it is confident of
enhancing shareholdervalue on a sustained basis over the medium to
long-term.
Cautionary Statement
The management of Vivimed Labs has prepared and is responsible for the
financial statements that appear in this report. These are in
conformity with accounting principles generally accepted in India and,
therefore, may include amounts based on informed judgements and
estimates. The management also accepts responsibility for the
preparation of other financial information that is included in this
report. Statements in this Management Discussion and Analysis
describing the Company''s objectives, projections, estimates and
expectations may be ''forward looking statements'' within the meaning of
applicable laws and regulations. Management has based these forward
looking statements on its current expectations and projections about
future events. Such statements involve known and unknown risks,
significant changes in political and economic environment in India or
key markets abroad, tax laws, litigation, labour relations, exchange
rate fluctuations, interest and other costs may cause actual results to
differ materially.
Acknowledgement
Our Directors place on record their sincere appreciation for
significant contribution made by the employees through their
dedication, hard work and commitment and of the customers for the trust
reposed on the Company. We also acknowledge the support and wise
counsel extended to us by bankers, government agencies, shareholders
and investors at large. We look forward to have the same support in our
endeavour to attain our vision.
For and on Behalf of Board of Directors
Sd/-
Date : 06.09.2013 Dr. V. Manohar Rao Santosh Varalwar
Place : Hyderabad Director Managing Director & CEO
Mar 31, 2012
The Directors are pleased to present their Twenty Fourth Annual Report
on business and operations of the Company and the audited accounts for
the financial year ended March 31, 2012.
The year in retrospect
The consolidated net revenue of the Company during 2011- 12 grew to
63.54% to Rs.6,893.49 million as compared to Rs.4,215.25 million last
year. The Company has achieved a stand alone net revenue of Rs.3,829.01
million during the year under review, as compared with Rs.3,098.10
million during the previous year, a rise of 23.59% .
Consolidated profit before tax increased to Rs.778.15 million, as
compared with Rs.552.62 million in the previous year, an increase of
40.64% over the last year. Stand alone profit before tax increased from
Rs.329.69 million to Rs.513.41 million an increase of 55.73% over last
year.
Consolidated profit after tax increased to Rs.631.37 million as
compared with Rs.488.31 million in the previous year, an increase of
29.30% over the last year. The Company recorded a Stand alone profit
after tax of Rs.404.15 million, an increase of 45.57% as compared with
last year's Rs.277.64 million.
A detailed review of operations and performance of the company is
contained in the Management Discussion and Analysis Report, which is
given as a separate chapter in the Annual Report.
Detailed summary of financial performance is given in table below:
(INR in million)
Particulars Stand Alone Consolidated
Year ended Year ended Change
in Year
ended Year ended Change
in
31.03.2012 31.03.2011 % 31.03. 31.03.2011 %
2012
Revenue from
Operations 3,829.00 3,098.10 23.59% 6,683.14 4,160.01 60.65%
Other Income 4.20 2.87 46.31% 26.82 10.05 166.86%
Change in
Inventory (15.68) (44.50) 64.76% 183.53 45.91 299.72%
Total Income 3,817.52 3,056.47 24.90% 6,893.49 4,215.97 63.51%
Total operating
expenditure 3,004.61 2,578.68 16.51% 5,563.69 3,340.33 66.56%
Operating Profit
(EBIDTA) 844.27 566.79 48.96% 1,329.80 875.65 51.86%
Finance Cost 225.35 176.31 27.81% 283.75 221.01 28.38%
Depreciation and
Amortization 105.51 60.79 73.56% 267.89 102.01 162.61%
Profit Before
Tax 513.40 329.69 55.72% 778.15 552.62 40.81%
Current Tax 102.72 66.56 54.32% 158.90 94.00 69.04%
Deferred Tax 6.54 (14.50) 145.10% (12.11) (29.69) 59.21%
Profit After Tax 404.15 277.63 45.57% 631.37 488.31 29.29%
Basic EPS 29.00 27.31 6.18% 45.31 48.04 (5.68%)
Diluted EPS 25.16 23.82 5.62% 39.31 41.09 (6.18%)
Standalone financials
The Ministry of Corporate Affairs (MCA) vide notification no. S.O.
447(E) dated February 28, 2011 amended the existing Schedule VI to the
Companies Act, 1956. The Revised Schedule VI is applicable from
financial year commencing from April 1, 2011. The financial statements
of our Company for the year ended March 31, 2012 have been prepared in
accordance with the Revised Schedule VI and accordingly, the previous
year's figures have been reclassified/ regrouped to conform to this
year's classification.
Consolidated financials
The Ministry of Corporate Affairs (MCA) by General Circular No. 2/2011
dated February 8, 2011, had granted an exemption to companies from
complying with Section 212 of the Companies Act, 1956, provided such
companies fulfill conditions mentioned in the said circular.
Accordingly, the Board of Directors of our Company at its meeting held
on May 30, 2012, approved the Audited Consolidated Financial Statements
for the financial year 2011-12 in accordance with the Accounting
Standard (ASÃ21) and other Accounting Standards issued by the Institute
of Chartered Accountants of India as well as Clause 32 of the Listing
Agreement, which include financial information of all its subsidiaries,
and forms part of this report. The Consolidated Financial Statements of
our Company for the financial year 2011-12, have been prepared in
compliance with applicable Accounting Standards and where applicable
Listing Agreement as prescribed by the Securities and Exchange Board of
India.
Acquisitions
Uquifa acquisition
On November 30, 2011 'Vivimed Labs Limited' acquired Uquifa, a
75-year-old manufacturer of pharma APIs and intermediates with
operations in Spain and Mexico. In a move to bring in strategic growth
into pharma segment and expand its footprints in Europe and the
Americas, the Company has taken a measured stride with the acquisition
of Uquifa.
This well considered move would strengthen the Company's current
position in pharma APIs and intermediates while significantly improving
the cost competitiveness of Uquifa. Complementing each other's needs
and growth plans, the acquisition envisages being a healthy, 'two-way
opportunity pipeline' for Vivimed. While Uquifa gets the supply side
efficiencies and knowledge base of Vivimed in pharma, Vivimed would
leverage the preeminent position of Uquifa in APIs and their robust
pipeline of filings to accelerate growth across Europe and the Americas
in the next five years.
The Company also believes that acquisition of Uquifa will add to its
multi-geographical locations, stability in operations and knowledge
base. This will fundamentally mean greater comfort levels for customers
and channel partners in addressing their needs and logistics. Uquifa
acquisition in Europe comes post a successful acquisition and
integration of James Robinson, UK ( Now Vivimed Labs Europe Limited) in
2008.
With Uquifa, Vivimed will have a footprint into LATAM and deepen
presence into Europe. Indian manufacturing efficiencies and Uquifa's
strengths will be seamlessly aligned in the new dispensation. Uquifa's
preeminent position in APIs, combined with Vivimed's supply chain
efficiencies will enhance competitiveness for Uquifa and swifter
broadening of customer base. Uquifa is now forming part of API division
of Vivimed group.
Klar Sehen acquisition
On September 29, 2011 Vivimed Labs Limited acquired the entire equity
stake in Klar Sehen Private Limited (KSL), a 30 year old Kolkata based
Pharmaceutical Company with strong marketing presence in North East,
Bihar and Andhra Pradesh. KSL Operates in niche ophthalmic segment
leveraging 50 proprietary trademarks. It has well known brands such as
Renicol, Lysicon-V Care Tears, Dexacort etc., in eye care segment.
In a research conducted by C-Marc (India) Private Limited for the
period Nov- Feb 2011, KSL for its wide range of Ophthalmic products has
bagged rank of an All India corporate No. 1 in the East Zone and bagged
a rank of No. 5 in Rest of India ( in Indian, Dist HQ & Extra- Urban
and rural markets).
KSL has cGMP compliant manufacturing facilities at Kolkata and
Hyderabad and also has arrangements to manufacture some of its products
in Uttaranchal.
Vivimed's acquisition of KSL complements its strategy to increase its
domestic presence in niche pharmaceutical areas, its extensive
knowledge and experience in manufacturing and R&D will help grow this
business to new levels.
Dividend
Board of Directors of our Company has recommended a pro rata dividend @
3.50% on fully paid Compulsorily Convertible and Cumulative Preference
Shares (CCPS's) of Rs.1,000 each and a dividend of Rs.3/- on fully paid
equity shares of Rs.10 each for the FY 2011-12 for your approval. There
will be no tax deduction at source on Dividend Payments, but the
Company will have to bear tax on dividend @ 16.97%, inclusive of
surcharge.
The dividend if approved, shall be payable to the shareholders
registered in the books of the Company as the beneficial owners as per
details furnished by the depositories, determined with reference to the
book closure from 25th September 2012 to 27th September 2012 (both days
inclusive).
Transfer to general reserves
The General Reserves, on a stand alone basis, at the beginning the year
was Rs.40.30 million. General Reserves at the end of the year are
Rs.80.71 million. Our Board has decided to transfer an amount of
Rs.40.41 million to General Reserves.
Board
Affairs of our Company are managed by a competent Board of Directors,
which comprises of eminent personalities, who possess skills and
expertise in various spheres.
The Details of the Directors being recommended for appointment and
re-appointment are contained in the accompanying notice of the
forthcoming Annual General Meeting.
Subsidiary companies
The Company has three Indian Subsidiaries à Creative Healthcare Private
Limited, Klar Sehen Private Limited and Octtantis Nobel Labs Private
Limited.
Vivimed Holdings Limited, based in Hong Kong is a 100% subsidiary of
the Company and holds 100% shareholding in Vivimed Labs Europe Limited,
UK.
Vivimed Labs USA Inc. is a 100% subsidiary of Vivimed Labs Limited.
Mauritius based Vivimed Labs Mauritius Limited, a 100% subsidiary of
Vivimed Labs Limited is the holding company of the:
- Vivimed Labs UK Limited, UK with its step-down subsidiaries:
- Vivimed Labs Spain S.L., Spain
- Union Quimico Farmaceutica S.A.U, Spain
- Holliday International Limited, UK
- Uquifa Mexico S.A. de C.V., Mexico
In all, as on March 31, 2012, the Company has 3 Indian and 9 foreign
subsidiaries.
Pursuant to a general exemption granted by the Ministry of Corporate
Affairs under Section 212 of the Companies Act, 1956, vide its General
Circular No. 2/2011 dated February 8, 2011, the Company is not required
to annex to this Report, the Annual Reports of the above mentioned 3
Indian Subsidiaries and 9 foreign subsidiaries, for the year ended
March 31, 2012. However if any member of the Company or its
subsidiaries so desire, the Company will make available the Annual
Accounts of subsidiaries to them on request.
Statement pursuant to Section 212 of the Companies Act, 1956, relating
to Subsidiary Companies for the financial year ended March 31, 2012 and
details of each subsidiary with respect to capital, reserves, total
liabilities, details of investment, turnover, profit before taxation,
provision for taxation, profit after taxation and proposed dividend are
given in Annexure - A of this Report.
Branch office
Vivimed Labs Europe Limited, subsidiary of Vivimed Labs Limited, has
set up a representative office in China. The Standalone financial
statements of Vivimed Labs Europe Limited include the financial
statements of its China representative office.
Conservation of energy, technology absorption and foreign exchange
earnings and outgo
As required by the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, the relevant data pertaining to
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the prescribed format as Annexure - B to
this Report.
Particulars of employees
Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) (Amendment) Rules, 2011 , is not applicable
to the Company. Hence it is not being furnished with the directors
report.
Human resource
Our Company believes that competent human resources are the driving
force for any organization that enables a Company to grow in leaps and
bounds. The Company has always nurtured a favourable work environment
that encourages continuous learning and innovation. Our Company has put
in place a scalable recruitment and human resources plan, devised to
attract and retain high calibre personnel.
Vivimed Labs Limited has been fortunate in having a set of committed
employees at all levels and looks forward to nurture them and retain
their loyalty. Our Company recognizes the value of the committed
workers and the need for bonding between the Company and committed
employees.
Risk management
Our Company views risk management as a value creating function,
responsible for bringing about a proactive approach to changes in
Buiness Environment, a culture change and preparing the organization to
face uncertain events. With this perspective, FY2011 saw a more
comprehensive risk management policy being re-launched in Vivimed which
is being implemented across all divisions and branches, both in India
and abroad. This policy strengthens ability to better visualize
enterprise, process and compliance risks, and to proactively undertake
mitigation actions to minimize such risks à and thus sustain Business
profits. The policy recognizes that risk is not just about downsides or
things going wrong and that it should be equally focused on missing out
the upside or added value that opportunities present.
Audit Committee of the Board of Directors conducts quarterly reviews
regarding adequacy of risk management.
Internal controls and their adequacy
Our Company believes that a strong internal controls framework is an
essential pre-requisite of growing businesses.
It has well documented policies, procedures and authorization
guidelines commensurate with the size of the organization, as well as
an independent internal audit system to conduct audits of various
divisions, corporate headquarters and overseas operations.
Audit Committee of the Board is updated on significant internal audit
observations, compliance with statutes, progress of risk management and
effectiveness of working of the control systems every quarter.
AUDITORS
The Company's Statutory Auditors M/s P. Murali & Co., Chartered
Accountants, hold office up to the conclusion of the forthcoming Annual
General Meeting.
It is proposed to appoint M/s Grant Thornton, Chartered Accountants,
Hyderabad, as Statutory Auditors of the Company to hold office from the
conclusion of this Annual General Meeting until the conclusion of the
next Annual General Meeting of the Company. The necessary resolution
seeking approval of Statutory Auditors has been incorporated in the
notice convening the Annual General Meeting.
Cost Auditors
In accordance with Ministry of Corporate Affairs General Circular No.
15/2011[52/5/CAB-2011] dated April 11, 2011 the Company has appointed
M/s Bharthula & Associates, Cost Accountants as Cost Auditors for the
financial year 2011-12. The due date for filing of Cost Audit Report
is September 27, 2012.
Fixed deposits
Our Company has not accepted any fixed deposits under Section 58A of
the Companies Act, 1956 and hence no amount of principal or interest
was outstanding as of the Balance Sheet Date.
Corporate governance report and general shareholders information
As required by clause 49(vi) of the listing agreement entered into by
the Company with the Stock Exchanges a detailed report on Corporate
Governance is provided in Annexure ÃC of the Directors Report. The
General Shareholders Information has been provided as Annexure ÃD which
forms part of the Directors Report. The Company is in Compliance with
the requirements and disclosures that have to be made in this regard.
The Auditors Certificate on Compliance with Corporate Governance
requirements by the Company is attached to Corporate Governance Report
and forms part of the Directors Report.
Directors responsibility statement
The Directors would like to assure the members that the financial
statements for the year under review conform in their entirety to the
requirement of the Companies Act, 1956.
The Directors Confirm that :
- The Annual Accounts have been prepared in conformity with the
applicable Accounting Standards;
- The Accounting policies selected and applied on a consistent basis,
give a true and fair view of the affairs of the Company and of the
profit for the financial year;
- Significant care has been taken that adequate accounting records have
been maintained for safeguarding the assets of the Company, and for
prevention and detection of fraud and other irregularities;
- The Annual Accounts have been prepared on a going concern basis.
Outlook
The outlook for FY 2012-13 is more positive than before. Vivimed sees
significant growth in its API business in Europe, as well as in India
and the Americas with integration of UQUIFA.
Cautionary statement
The management of Vivimed Labs has prepared and is
responsible for the financial statements that appear in this report.
These are in conformity with accounting principles generally accepted
in India and, therefore, may include amounts based on informed
judgment's and estimates. The management also accepts responsibility
for the preparation of other financial information that is included in
this report. Statements in this Management Discussion and Analysis
describing the Company's objectives, projections, estimates and
expectations may be 'forward looking statements' within the meaning of
applicable laws and regulations. Management has based these forward
looking statements on its current expectations and projections about
future events. Such statements involve known and unknown risks,
significant changes in political and economic environment in India or
key markets abroad, tax laws, litigation, labour relations, exchange
rate fluctuations, interest and other costs and may cause actual
results to differ materially.
Acknowledgement
Our Directors place on record their sincere appreciation for
significant contribution made by the employees through their
dedication, hard work and commitment and of the customers for the trust
reposed on the Company. We also acknowledge the support and wise
counsel extended to us by bankers, government agencies, shareholders
and investors at large. We look forward to have the same support in our
endeavour to attain our vision.
For and on Behalf of Board of Directors
Sd/-
Date : 30.05.2012 Dr. V. Manohar Rao Santosh Varalwar
Place : Hyderabad Whole Time Director CEO & Managing
Director
Mar 31, 2011
To the members,
The Directors have the pleasure in presenting the twenty third Annual
Report together with the Audited Accounts of the financial Year ended
on 31st march 2011.
Financial Performance
( Rs.in mn)
Stand Alone Consolidated
Particulars Year Ended Year Ended Year Ended Year Ended
Change Change
31.03.2011 31.03.2010 31.03.2011 31.03.2010
net sales 3098.10 2105.89 47.12% 4160.01 3434.86 21.11%
other income 2.87 20.08 (85.71)% 9.33 65.26 (85.70)%
increase /
(Decrease) 44.50 15.81 181.46% 45.91 24.55 87.10%
in stocks
total income 3145.47 2141.78 46.86% 4215.25 3524.66 19.59%
total operating 2578.69 1723.63 49.62% 3354.65 2819.97 18.96%
expenditure
operating profit 566.78 418.15 35.54% 860.60 704.69 22.12%
(EBIDTA)
interest 176.31 144.37 22.12% 205.96 212.28 (2.98)%
Depreciation
and 60.79 52.54 15.70% 102.01 95.96 6.30%
Amortisation
profit
Before tax 329.68 221.24 49.01% 552.63 396.45 39.39%
provision for
tax 66.55 19.68 238.18% 0.94 56.21 67.23%
Deferred tax (14.50) 36.16(140.10)% (29.69) 30.13 198.54%
profit After tax 277.62 165.40 67.85% 488.32 310.11 57.47%
Add: profit
B/f from 786.15 647.74 21.37% 1000.47 717.35 39.47%
previous Year
profit
available for 1063.77 813.14 30.82% 1488.79 1027.46 44.90%
appropriation
Appropriation
as under
transfer to
General 20.82 9.50 119.16 20.82 9.50 119.16
Reserves
proposed
Dividend 20.33 14.95 35.99 20.33 14.95 35.99
tax on Dividend 3.45 2.54 35.83 3.45 2.54 35.83
Balance carried 1019.16 786.15 29.64% 1444.18 1000.47 44.35%
forward to
next Year
Operations Review
During the financial year ended march 31st, 2011, our company has
scaled new heights and set new benchmarks in terms of income and
profitability.
Stand Alone Highlights
total income increased from Rs. 2141.78 million during the previous
year to Rs. 3145.47 million in the year under review registering a
growth of 46.86%.
operating profit, before interest and depreciation, amounted to Rs.
566.78 mllion as against Rs. 418.15 million during the previous an
increase of 35.54% on year on year basis.
During the year under review. net profit, after providing for interest,
depreciation and tax amounted to Rs. 277.62 million as against Rs.
165.40 million during the previous year, registering an increase of
67.85%.
the amount available for appropriations, including surplus from
previous year amounted to Rs. 1063.77 million. surplus Rs. 1019.16
million has been carried forward to the Balance sheet after providing
for Dividend of Rs. 20.33 million, dividend tax Rs. 3.45 million and
General Reserve of Rs. 20.82 million.
Earnings Per Share
eps was at Rs. 27.31 for the year under review as against Rs. 16.60
during the previous year. our company has recorded commendable growth
during the year under review.
Consolidated Highlights
the consolidated total income from operations in india, uK and usA
amounted to Rs. 4215.25 million and net profit, after providing for
interest, depreciation and tax amounted to Rs. 488.32 million recording
a growth of 19.59% in total income and 57.47% in net profit
respectively.
Capital Structure
changes to share capital
During the year under review the issued, subscribed and paid up capital
has increased to Rs. 101.64 million from Rs. 99.65 million as a result
of allotment of additional 199,112 equity shares of Rs. 10 each on
october 4, 2011. the Authorised share capital of the company stands at
200 million.
Dividend
our Directors recommend a Dividend of Rs. 2.00 on fully paid equity
share of Rs. 10 each for the fY2010-11 for your approval. there will be
no tax deduction at source on Dividend payments, but the company will
have to bear tax on dividend @16.97 %, inclusive of surcharge.
the dividend if approved, shall be payable to the shareholders
registered in the books of the company as the beneficial owners as per
details furnished by the depositories, determined with reference to the
book closure from september 28, 2011 to september 30, 2011 (both days
inclusive).
Transfer to Reserves
our Board has decided to transfer an amount of Rs. 20.82 million to
General Reserves.
Subsidiaries
our company has four subsidiary companies as on 31st march, 2011
- Creative Health Care Private Limited (India)
- Vivimed Holdings Limited (Hong Kong)
- Vivimed Labs Europe Limited (UK)
- Vivimed Labs USA Inc. (USA)
the consolidated financial statements, in terms of clause 32 of the
listing Agreement and in terms of Accounting standard 21 issued by the
Institute of Chartered Accountants of India (ICAI) form part of this
Annual Report.
pursuant to the provisions of section 212(8) of the companies Act, 1956
Act, the ministry of corporate Affairs vide its General circular no.
2/2011 dated february 8, 2011 has granted a general exemption subject
to certain conditions to holding companies from complying with the
provisions of section 212 of the Act which requires the attaching of
the Balance sheet, profit & loss Account and other documents of its
subsidiary companies to its Balance sheet. Accordingly, the said
documents are not being included in this Annual Report. the main
financial summaries of the subsidiary companies are provided in
Annexure A which forms part of Directors Report for further information
on these subsidiaries. Annual accounts of the subsidiary companies and
the related detailed information will be made available to the holding
and subsidiary companies investors seeking such information at any
point of time. the annual accounts of the subsidiary companies will
also be kept for inspection by any investor at its corporate offce in
hyderabad and that of the subsidiary companies concerned.
Energy, Technology And Foreign Exchange
Details of conservation of energy, technology absorption and foreign
exchange earnings and outgo in accordance with the provisions of
section 217(1)(e) of the companies Act, 1956, read with companies
(Disclosure of particulars in the Report of Board of Directors)
Rules,1988 is given in Annexure B' of the Directors Report.
Particulars Of Employees
pursuant to the provisions of section 217(2A) of the companies Act,
1956 read with companies (Particulars of Employees) Rules, 1975 as
amended; the names and other particulars of the employees are set out
in the Annexure c' to the Directors Report.
Human Resource Management
our company believes that competent human Resources are the driving
force for any organization that enables a company to grow in leaps and
bounds. the company has been able to create a favourable work
environment that encourages continuous learning and thereby leading to
innovation. with vibrant work atmosphere, our company provides an
opportunity to employees to work. our company has put in place a
scalable Recruitment and human Resources plan, devised to attract and
retain high caliber personnel.
Vivimed labs ltd has been fortunate in having a set of committed
employees at all levels and looks forward to nurture them and retain
their loyalty. our company recognizes the value of the committed
workers and efforts are being made to enhance the bonding between the
company and the committed employees.
Risk management
our company is in the process of developing a risk management framework
that enables active monitoring of the business environment and
identification, assessment and mitigation of potential internal or
external risks.
our company promotes strong ethical values and high levels of integrity
in all its activities, which in itself is a significant risk mitigator.
Directors
mr. p V Rathnam and mr. D.hanumantha Rao, retire by rotation at the
ensuing Annual General meeting scheduled to be held on 30th september,
2011 and being eligible offers himself for reappointment.
Auditors
the statutory Auditors of the company m/s p. murali & co., chartered
Accountants, retire at the ensuing Annual General meeting and have
confirmed their eligibility and willingness to accept office of
Auditors, if reappointed. the Audit committee of the Board of Directors
recommended reappointment of m/s p. murali & co. as statutory Auditors
of the company for the financial year 2011-12 for shareholders
approval.
Group
pursuant to intimations from promoters, names of promoters and
companies comprising the Group' as defined in monopolistic and
Restrictive trade practices ('mRtp') Act, 1969 have been disclosed in
Annexure D' to this report.
Fixed Deposits
our company has not accepted any fixed deposits under section 58A of
the companies Act, 1956 hence no amount of principal or interest was
outstanding as of the Balance sheet date.
Management Discussion and Analysis
the management Discussion and Analysis Report of the company has been
provided in Annexure e' which forms part of the Directors Report.
Corporate Governance Report and General Shareholders Information
As required by clause 49(Vi) of the listing agreement entered into by
the company with the stock exchanges, a detailed report on corporate
Governance is provided in Annexure f' of the Directors Report. the
General shareholders information has been provided as Annexure G' which
forms part of the Directors Report. the company is in compliance with
the requirements and disclosures that have to be made in this regard.
the auditors' certificate on compliance with corporate governance
requirements by the company is attached to corporate Governance Report
and forms part of the Directors Report.
Directors Responsibility Statement
pursuant to section 217 (2AA) of the companies Act, 1956, the Directors
confirm that -
1. in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures;
2. they have, in selection of the Accounting policies, consulted the
statutory Auditors and have applied them consistently and made
judgments and estimates that are reasonable and prudent so that they
give a true and fair view of the state of affairs of the company at the
end of the financial year and of the profit of the Company for that
period;
3. they have taken proper and sufficient care to the best of their
knowledge and ability for the maintenance of adequate accounting
records in accordance with the provisions of the companies Act, 1956,
for safeguarding the assets of the company and for preventing and
detecting fraud and other irregularities.
4. they have prepared the annual accounts on a going concern basis.
Acknowledgement
our Directors place on record their sincere appreciation for
significant contribution made by the employees through their
dedication, hard work and commitment and of the customers for the trust
reposed on the company.
we also acknowledge the support and wise counsel extended to us by
bankers, government agencies, shareholders and investors at large. we
look forward to have the same support in our endeavor to attain our
vision.
for and on Behalf of Board of Directors
sd/-
Santosh Varalwar
ceo & managing Director
Date : 03.09.2011
place : hyderabad
Mar 31, 2010
The Directors have pleasure in presenting twenty second Annual Report
together with the Audited Accounts of the Financial year ended on 31st
march 2010.
Financial Performance
Rs. million
Standalone Consolidated
Particulars
2009-10 2008-09 2009-10 2008-09
Total income 2,141.78 1,570.57 3,524.66 2,904.29
Operating Expenses 1,723.63 1,252.85 2,81997 2,423.33
Operating Profit
(EBITDA) 418.15 317.71 704.69 480.96
interest 144.37 95.70 212.28 172.73
Depreciation &
Amortisation 52.54 39.08 95.96 77.09
Profit Before tax 221.24 182.93 396.11 231.14
Profit After tax 165.40 145.99 310.11 193.52
Dividend (%) 15% 15% 15% 15%
OPERATIONS REVIEW
During the financial year ended march 31, 2010, your Company has scaled
new heights and set new benchmarks in terms of income and
profitability.
Standalone Highlights
Total income increased from Rs 1570.57 million during the previous year
to Rs 2141.78 million in the year under review, registering a growth of
36.37%.
Operating Profit, before interest and depreciation, amounted to Rs
418.15 million as against Rs 317.71 million during the previous year,
an increase of 31.61%.
Net Profit, after providing for interest, depreciation and tax amounted
to Rs 165.40 million as against Rs 145.99 million during the previous
year, registering an increase of 13.30%.
The amount available for appropriations, including surplus from
previous year amounted to Rs 813.14 million. A surplus of Rs 786.15
Million has been carried forward after providing for Dividend of Rs
14.95 Million, dividend tax Rs 2.54 Million and transfer to General
Reserve of Rs 9.50 Million.
Consolidated Highlights
The Consolidated total income from operations in India, UK and USA
amounted to Rs 3524.66 million and Net Profit, after providing for
interest, depreciation and tax amounted to Rs 310.11 Million recording
a growth of 21.36% in total income and 60.25% in Net Profit
respectively.
The brake up of sales revenues between the two segments is as under:
Specialty Chemicals Rs 2614.88 million (76.13%) Pharma Rs 819.98
Million (23.87%).
Earnings Per Share
EPS: Rs 31.87 for the year under review as against Rs 20.58 during the
previous year.
CAPITAL STRUCTURE
Changes to Share Capital
During the year under review the issued, subscribed and Paid up Capital
has increased by Rs. 5.64 million due to allotment of Equity shares on
Conversion of Foreign Currency Convertible Bonds (FCCBÃs). the
Authorised share Capital of our Company stands at Rs. 150 million.
Foreign Currency Convertible Bonds
Your Company issued Foreign Currency Convertible Bonds as under:
Year of Number and Size of
Particulars
Issue Denomination
of Bonds Issue
1% Coupon Unsecured
Foreign Currency 2007 15000 Bonds of Us $ 15 million
Convertible
Bonds Due 2012 Us$ 1000 each
CONVERSION AND BUY BACK DETAILS
Particulars Details
Conversion Period 2nd May 2007 to 19th
January 2012
Number of Bonds converted
during the year 2,500
Conversion Price Per Equity share Rs. 185
Number of Equity shares issued on
Conversion 563,918
Number of Bonds Bought and cancelled 12,500
Number of Bonds Outstanding Nil
DIVIDEND
Your Directors recommend a Dividend of Rs 1.50 on fully paid equity
share of Rs 10 each for the Fy2009-10 for your approval. there will be
no tax deduction at source on Dividend Payments, but our Company will
have to bear tax on dividend @16.995%, inclusive of surcharge and cess.
The dividend if approved, shall be payable to the shareholders
registered in the books of our Company as the beneficial owners as per
details furnished by the depositories, determined with reference to the
book closure from September 14, 2010 to September 18, 2010 (both days
inclusive).
TRANSFER TO RESERVES
The Board has decided to transfer an amount of Rs 9.50 million to
General Reserves.
SUBSIDIARIES
The Company has four subsidiary Companies including one step down
subsidiary as on 31st March, 2010
- Creative Health Care Private Limited
- Vivimed Holdings Limited (Hong Kong)
- Vivimed Labs Europe Limited (UK) {Previously Known as James Robinson
Limited}
- Vivimed Labs USA Inc. (USA)
The consolidated financial statements, in terms of Clause 32 of the
Listing Agreement and in terms of Accounting standard 21 issued by the
institute of Chartered Accountants of India (ICAI) form part of Annual
Report.
The ministry of Corporate Affairs, Government of India has granted
exemption under section 212(8) of the Companies Act, 1956 from
attaching the balance sheet, profit and loss account and other
documents of subsidiary companies to the balance sheet of the holding
Company. the members may refer to the statement under section 212 of
the Companies Act, 1956 and summary information on the financials of
the subsidiaries, in terms of the said approval of ministry of
Corporate Affairs, appended to the above statement under section 212 of
the Companies Act, 1956 in Annexure ÃA which forms part of this Report
for further information on these subsidiaries. Annual accounts of the
subsidiary companies and the related detailed information will be made
available to the holding and subsidiary companies investors seeking
such information at any point of time. the annual accounts of the
subsidiary companies are kept for inspection by any investor at its
Corporate Office in Hyderabad.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Details of energy conservation and research and development activities
undertaken by our Company along with the information in accordance with
the provisions of section 217(1)(e) of the Companies Act, 1956, read
with Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is given in Annexure ÃBÃ of this Report.
PARTICULARS OF EMPLOYEES
Pursuant to the provisions of section 217(2A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended; the names and other particulars of the employees are set out
in the Annexure ÃC to this Report.
HUMAN RESOURCE MANAGEMENT
Our Company has a forward looking human resource development strategy,
which focuses on talent management and strengthening the talent pool.
systems are aligned to foster excellence, empower and enrich employees,
recognize creativity, innovation and reward performance.
HRD Strategy focuses on integration of diverse work cultures to
strengthen the Vivimed management philosophy and style that Synergizes
the skill sets across the board to maximize fulfillment of individual
aspirations and value addition to the company.
RISK MANAGEMENT
Our Company is in the process of implementing a risk management
framework that enables active monitoring of the business environment
and identification, assessment and mitigation of potential internal or
external risks.
Our Company promotes strong ethical values and high levels of integrity
in all its activities, which in itself is a significant measure of
control of risk.
DIRECTORS
Dr. M. Bhagvanth Rao, retires by rotation at the ensuing Annual General
meeting scheduled to be held on 18th September, 2010 and being eligible
offers himself for reappointment.
Board of Directors appointed Mr. Nixon Patel as an Additional Director
on the Board of our Company on 28th June, 2010. he will hold office
till the forthcoming Annual General meeting scheduled to be held on
18th September, 2010. Notice under section 257 of the Companies Act,
1956 has been received from a member of our Company proposing his
appointment. the resolution for the same has been included in the
notice of Annual General meeting scheduled to be held on 18th
September, 2010.
Tenure of Appointment of Mr. Santosh Varalwar and Mr. Subhash Varalwar
is completed and they being eligible offer themselves for
reappointment.
Dr. V. Manohar Rao has been acting as director retiring by rotation,
being eligible he offers himself for reappointment as Director who
shall not be liable to retire by rotation.
Mr. Sandeep Varalwar, Dr. R.K.Dhar and Mr. S. Raghunandan were
appointed as whole time directors at the Annual General meeting of our
Company held on 27th September, 2008 their tenure is being further
extended for a period of five years and they being eligible offer
themselves for reappointment.
AUDITORS
Statutory Auditors of our Company M/s P. Murali & Co., Chartered
Accountants, retire at the ensuing Annual General meeting and have
confirmed their eligibility and willingness to accept office of
Auditors, if reappointed. the Board of Directors recommended
reappointment of M/s P. Murali & Co. as statutory Auditors of our
Company for the financial year 2010-11 for shareholders approval.
GROUP
Individuals and Companies comprising the ÃGroupà as defined in
monopolistic and Restrictive trade Practices (ÃmRtPÃ) Act, 1969 are
disclosed in Annexure ÃDÃ to this report.
FIXED DEPOSITS
Our Company has not accepted any fixed deposits under section 58A of
the Companies Act, 1956 hence no principal or interest was outstanding.
MANAGEMENT DISCUSSION AND ANALYSIS
The management Discussion and Analysis Report of our Company has been
provided in Annexure ÃEÃ which forms part of this Report.
CORPORATE GOVERNANCE REPORT AND GENERAL SHAREHOLDERS INFORMATION
As required by Clause 49(Vi) of the listing agreement entered into by
our Company with the stock exchanges, a detailed report on Corporate
Governance is provided in Annexure ÃFÃ of this Report. Auditors
Certificate on compliance with Corporate Governance requirements is
given in Annexure ÃGÃ to this report. Declaration of the Managing
Director and CEO in terms of Clause 49(1)(d)(iii) of Listing Agreement
relating to compliance with code of conduct by Board members is given
in Annexure ÃHÃ of this Report. the General shareholders information
has been provided as Annexure ÃIÃ which forms part of this Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to section 217 (2AA) of the Companies Act, 1956, the Directors
Confirm that -
1. They followed applicable accounting standards in preparation of
annual accounts and that there are no material departures except
elimination of interest on inter Company loans within the group as per
As-11 to the tune of Rs. 18.11 million shown under other income and
financing charges.
2. They consulted statutory Auditors in selection of the accounting
policies and applied policies consistently and made judgments and
estimates that are reasonable and prudent so that they give a true and
fair view of the state of affairs of our Company at the end of the
financial year and of the profit of our Company for that period;
3. They took proper and sufficient care to the best of their knowledge
and ability for maintenance of adequate accounting records in
accordance with provisions of the Companies Act, 1956, for safeguarding
the assets of our Company and for preventing and detecting fraud and
other irregularities.
4. They prepared the annual accounts on a going concern basis.
ACKNOWLEDGEMENT
Your Directors place on record their sincere appreciation of
significant contribution made by our employees through dedication, hard
work and commitment and thank our customers for the trust reposed on
us.
Your Directors acknowledge the support and wise counsel extended to us
by bankers, government agencies, shareholders and stake holders at
large and look forward to have the same support in our endeavor to
attain our vision.
For and on Behalf of Board of Directors
Sd/-
Date : 14.08.2010 Dr. V. Manohar Rao Santosh Varalwar
Place : Hyderabad Chairman Managing Director
& CEO
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