Your Directors have pleasure in presenting the 37th Annual
Report of your Company for the financial year ended 31st March, 2025.
FINANCIAL RESULTS
The financial performance of your Company for the year ended 31st
March, 2025 is summarized below:
(Rs. in million)
|
Standalone |
Consolidated |
|
Year ended 31.03.2025 |
Year ended 31.03.2024 |
Year ended 31.03.2025 |
Year ended 31.03.2024 |
Gross Income |
1077.89 |
1463.69 |
1206.4 |
1590.47 |
Earnings Before Interest, Tax,
Depreciation and Amortization (EBITDA) |
(103.34) |
(240.68) |
(86.77) |
(234.51) |
Finance Charges |
25.31 |
19.04 |
29.47 |
24.32 |
Depreciation/Amortization |
186.31 |
184.1 |
202.24 |
199.41 |
Net Profit Before Tax |
(314.96) |
(443.82) |
(318.48) |
(458.24) |
Provision for Tax |
- |
- |
(1.13) |
(3.77) |
Net Profit After Tax carried
to Balance Sheet |
(314.96) |
(443.82) |
(319.61) |
(454.46) |
OVERVIEW OF COMPANY'S FINANCIAL PERFOMANCE
On a consolidated basis for FY2025, your Company reported total revenue
of Rs. 1206.4 million as against Rs.1590.47million. EBITDA for FY2025 was Rs. (86.77)
million compared to Rs. (234.51) million in the previous year. Net profit after tax for
the group for the current year is Rs. (319.61) million as against Rs. (454.46) million in
the previous year.
Total revenue for FY2025 from operations on standalone basis is
Rs.1077.89million as against Rs.1463.69 million in the previous year. FY2025 EBITDA was
Rs. (103.34) million compared to Rs. (240.68) million in the previous year. The Profit
after Tax for the current year is Rs. (314.96) million as against Rs. (443.82) million in
the previous year.
OUTLOOK:
Business prospects may remain positive because of the growing global
demand for generics and opportunities provided by the expiry of patents in developed
markets.
MANAGEMENT DISCUSSION & ANALYSIS:
Various business aspects including market conditions, business
opportunities, challenges etc. have been discussed at length in the Management Discussion
and Analysis (MD&A), which forms part of this Annual Report.
DIVIDEND
Due to loses, the board of directors of the company have not recommend
any dividend for the year FY2025.
TRANSFER TO RESERVES:
Due to loses your Company propose to transfer loses to Reserves.
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. The paid-up share capital of the Company is Rs.16,58,27,830/- (Rupees Sixteen Crores
Fifty Eight lakhs Twenty seven thousand Eight hundred and thirty only) comprising
8,29,13,915 (Eight crores Twenty nine lakhs thirteen thousand nine hundred and fifteen
only) Equity Shares of Rs.2/- (Rupees Two Only) each.
TRANSFER TO THE INVESTOR EDUCATION &
PROTECTION FUND (IEPF):
In terms of Section 124(5) of the Companies Act, 2013 read with
Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)
Rules, 2016, unclaimed dividend amounting to Rs.68,098/- (Sixty eight thousand and ninety
eight rupees only) for the financial year 2016-2017, was transferred during the year under
review to the Investor Education and Protection Fund established by the Central
Government.
SUBSIDIARIES / ASSOCIATE COMPANIES
The statement containing the salient features of the Financial
Statements of the Company's subsidiaries/ associate companies is given in Form AOC-1,
provided in Notes to the Consolidated Financial Statements, forming part of the Annual
Report.
The highlights of performance of subsidiaries and associate companies
and their contribution to the overall performance of the Company during the financial year
is given under 'Annexure 1' to the Consolidated Financial Statements forming part
of the Annual Report.
CHANGE IN THE NATURE OF THE BUSINESS, IF ANY:
There is no change in the nature of the business of the Company or any
of its subsidiaries or associates, during the year under review.
MATERIAL CHANGES AFFECTING THE COMPANY:
There have been no material changes and commitments affecting the
financial position of the Company between the end of the financial year and date of this
report. There has been no change in the nature of business of the Company. The lead banker
of the Company (SBI) has filed petition against the Company for recovery of their dues in
DRT. The Company is negotiating one time settlement/ restructuring of loans with the
bankers.
FIXED DEPOSITS:
The Company did not accept any fixed deposits.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act,
2013, Mr. Manohar Rao Varalwar (Whole Time Director) of the Company, retires by rotation
at the ensuing Annual General Meeting and being eligible offers himself for
re-appointment, the Board of Directors on the recommendation of the Nomination and
Remuneration Committee, has decided to re-appoint Mr. Manohar Rao Varalwar, Director of
the Company.
Ms. Subbarathnamma Palepu & Mr. Jarugula Siva Prasad, (appointed as
an Independent Directors (under Non-Executive category) of the Company, to hold office for
a term of five consecutive years i.e., from December 11, 2024 till December 10, 2029 and
not liable to retire by rotation) and Ms. Aparna Bidarkar, (appointed as an Independent
Director, not liable to retire by rotation and to hold office for a term of 5 (five)
consecutive years with effect from February 14, 2022 to February 13, 2027) are the
Independent Directors of your Company in accordance with the provisions of the Companies
Act, 2013 and SEBI (LODR) 2015 (including any statutory modification(s) or reenactment(s)
for the time being in force).
Mr. Subhash Varalwar (Non-executive non independent Director) of the
Company resigned on 11-12-2024 due to ill health (confirmed that there is no other
material reason other than this). The Board appreciated and put on record the valuable
services rendered by Mr. Subhash Varalwar during his tenure of directorship in the
Company.
Mr. Hari Gopal Jamalapuram, Non-Executive/ Independent Director of the
Company demised on 18-11-2024. The Board expressed its condolences and appreciated and put
on record the valuable services rendered by Mr. Hari Gopal Jamalapuram during his tenure
of directorship in the Company.
Mr. Santosh Varalwar was re-appointed as Managing Director of the
Company in 32nd Annual General Meeting held on 30th December,2020
for a period of five years w.e.f.14th August 2020. Mr. Manohar Rao Varalwar was
re-appointed as a WTD by the members in the 32nd Annual General Meeting held on
30th December,2020 for a period of five years w.e.f.14th August
2020, Mr. Sandeep Varalwar was reappointed as a WTD by the members in the 32nd
Annual General Meeting held on 30th December,2020 for a period of five years
w.e.f.14th August 2020. The current term of them as Managing Director/ whole
Time Directors of the Company expires on August 13, 2025
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 organization during their tenure as Managing Director /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 and Mr. Manohar Rao
Varalwar and Mr. Sandeep Varalwar as whole time Directors of the Company for a further
period of 5 (five) years effective from August 14, 2025 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 reappointment of
Mr. Santosh Varalwar as Managing Director and Mr. Manohar Rao Varalwar and Mr. Sandeep
Varalwar 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.
Mr. Santosh Varalwar, Managing Director, Dr. Manohar rao Varalwar,
Whole Time Director, Mr. Sandeep Varalwar, Whole Time Director, Mr.
Phaninder Nath Peta Sonti, CFO (appointed on 10.01.2025) and Mr. 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 reenactment(s) for the time being in force).
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 reenactments) for the time being in force).In the opinion of the Board,
the Independent Directors of the Company fulfil the conditions specified in the Act and
Listing Regulations and are independent of the management.
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.
BOARD EVALUATION:
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 NonExecutive Directors and Executive Directors.
Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued there
under and the Listing Regulations (including any statutory modification(s) or
re-enactment(s) for the time being in force), the process for annual evaluation of the
performance of the Board, its Committees and individual Directors was carried out in
accordance with the policies in force.
DECLARATION FROM INDEPENDENT DIRECTORS:
The independent directors have submitted the declaration of
independence stating that they meet the criteria of independence as prescribed in
sub-section (6) of Section 149 of the Companies Act, 2013 as well as under Regulation
16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
DIVIDEND DISTRIBUTION POLICY:
The web link of the Dividend Distribution Policy has been provided
below for the perusal of the shareholders. https://www.vivimedlabs .
com/other-data/
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 (7) board meetings were held. The
details of the meetings including the composition of various committees are provided in
the Report on Corporate Governance.
PERFORMANCE EVALUATION:
The formal annual evaluation of the performance of the Board as well as
non-independent directors was undertaken by the Nomination and Remuneration Committee. The
performance of Board Committees and of individual independent directors was undertaken by
the Board members. The manner of the evaluation of the Board and other Committees has been
determined by the Nomination and Remuneration Committee as per SEBI circulars.
RISK MANAGEMENT:
Your Company had formulated a risk management policy for dealing with
different kinds of risks that it faces in the day-to-day operations of the Company. Risk
Management Policy of the company outlines different kinds of risks and risk mitigating
measures to be adopted by the Board. The Company has adequate internal financial control
systems and procedures to mitigate the risk. The risk management procedure is reviewed by
the Risk Management Committee and Board of Directors on a regular basis at the time of
review of quarterly financial results of the Company. Further, your Company had
constituted a Risk Management Committee which lays down various risk mitigating practices
that your Company is required to implement in the Company.
CONSOLIDATED ACCOUNTS
The Consolidated Financial Statements of your Company for the financial
year FY2025 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 Regulations").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.
COMPLIANCE WITH SECRETARIAL STANDARDS:
The Company has complied with Secretarial Standards issued by the
Institute of Company Secretaries of India.
DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 134(5) of the Companies Act,
2013, with respect to the Director's Responsibility Statement, the Board of Directors of
the Company hereby confirm that:
a) in the preparation of the annual accounts for the year ended March
31, 2025, 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 31,2025
and of the profit / loss of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient 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 31,2025;
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.
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.
The nomination and remuneration policy is adopted by the Board and the
salient features of the policy are as follows:
• Non-Executive and Independent Directors ("NEDs") will
be paid remuneration by way of sitting fees and commission. The remuneration/
commission/compensation to the NEDs will be determined by the Nomination and Remuneration
Committee ("Compensation Committee") and recommended to the Board for its
approval.
• The payment of the Commission to the NEDs will be placed before
the Board every year for its consideration and approval. The sitting fee payable to the
NEDs for attending the Board and Compensation Committee meetings will be fixed, subject to
the statutory ceiling.
• The fee will be reviewed periodically and aligned to comparable
best in class companies.
• NEDs will not be eligible to receive stock options under the
existing employee stock option scheme(s) ("ESOP") of the Company.
• The compensation paid to the executive directors (including the
Managing Director) will be within the scale approved by the shareholders. The elements of
the total compensation, approved by the Compensation Committee will be within the overall
limits specified under the Act.
• The Company's total compensation for Directors and Key
Managerial Personnel as defined under the Act / other employees will consist of:
- fixed compensation
- variable compensation in the form of annual incentive
- benefits
- work related facilities and perquisites Changes made to the policy:
Nil
The Nomination and Remuneration Policy is placed on the Company's
website and the following is web address of the said policy. https://www.vivimedlabs.com/wp-content/uploads/2020/09/
REMUNERATION-POLICY.pdf
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 SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (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/ other whole time Directors 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 ).
FAMILIARISATION PROGRAMME FOR THE INDEPENDENT
DIRECTORS
In compliance with the requirements of Regulation 25(7) of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put
in place a Familiarisation Programme for the Independent Directors to familiarise them
with the Company, their roles, rights, responsibilities in the Company, nature of the
industry in which the Company operates, business model etc. The details of the
Familiarisation Programme conducted are available on the website of the Company www.vivimedlabs.com .
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.
LOANS, GUARANTEES & 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 31st March, 2025, are set out in the Standalone
Financial Statements forming part of this report.
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 noncompliance 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.
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).
CORPORATE GOVERNANCE:
The Company is committed to maintain the highest standards of corporate
governance and adhere to the corporate governance requirements set out by Securities and
Exchange Board of India (SEBI). The report on Corporate Governance as stipulated under the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral
part of this Report. The requisite certificate from the Secretarial Auditors of the
Company confirming compliance with the conditions of corporate governance is attached to
the report on Corporate Governance.
EMPLOYEES' STOCK OPTION SCHEMES
The Company has granted 25,00,000 options to eligible employees under
the Vivimed Labs ESOP 2017 at Rs.35/- per option (exercise price) in FY2019. The shares
covered by such options are 25,00,000 equity shares of Rs.2/- each(face value).
Pursuant to regulation 13 of Securities and Exchange Board of India
(Share Based Employee Benefits) Regulations, 2014, certificate from NVSS Suryanarayana
Rao, the practicing company secretary is given as Annexure-3 to the Board's report.
Disclosure with respect to the Employees' Stock Option Scheme in
compliance with Securities and Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014 is available on the Company's website.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the regulators
or courts or tribunals which impact the going concern status and Company's operations in
future.
INSURANCE:
All properties and insurable interests of the Company including
buildings, plant and machinery and stocks have been fully insured.
AUDITORS AND AUDITORS' REPORT
AUDITORS
(I) STATUTORY AUDITOR
Pursuant to the provisions of Section 139(8), 141 and 142 of the Act
and the Companies (Audit and Auditors) Rules, 2014, M/s.SVRL & Co., Chartered
Accountants, as Statutory Auditors of the Company, for a second term of five (5)
consecutive years from the conclusion of 36th AGM till the conclusion of 41st
AGM of the Company, subject to the approval of the Members in the ensuing AGM (for
conducting audit from FY2025 to FY2029).
They have confirmed their eligibility and qualification required under
the Act for holding the office, as Statutory Auditors of the Company.
The Auditor's Report for the financial year ended March 31, 2025, has
been issued with an modified opinion, by the Statutory Auditors.
During the year under review, there were audit qualifications on your
Company's financial statements.
STATEMENT OF IMPACT OF AUDIT QUALIFICATIONS (FOR
AUDIT REPORT WITH MODIFIED OPINION) SUBMITTED ALONG WITH ANNUAL AUDITED FINANCIAL RESULTS
- STANDALONE BASIS - VIVIMED LABS LIMITED
Statement of Impact of Audit Qualifications for the Financial Year
Ended March 31, 2025 (Regulation 33 / 52 of the SEBI (LODR) (Amendment), Regulations, 2016
(Rupees in Millions)
S . Particulars
No. |
Audited Figures (as
reported before adjustment) |
Adjusted Figures |
1. Turnover/ Total Income |
1,077.89 |
1,077.89 |
2. Total Expenditure |
1,392.85 |
1,967.29 |
3. Net Profit / (Loss) |
(314.96) |
(889.40) |
4. Earnings Per Share |
(3.80) |
(10.73) |
5. Total Assets |
6,389.52 |
6,389.52 |
6. Total Liabilities |
5,804.61 |
6,379.05 |
7. Net Worth |
584.91 |
10.47 |
8. Any Other Financial Items (as
felt appropriate by the Management) |
Nil |
Nil |
II Audit Qualification:
1 a. Details of Audit Qualification:
As disclosed in Note 3 to the statement, the Company has not recognized
interest expense of approximately Rs.574.44 million on an accrual basis, citing
non-availability of bank confirmations as of March 31,2025. This is not in compliance with
Indian accounting standards, which require accrual-based accounting and recognition of
borrowing costs when accrued. Consequently, the reported loss is understated by the said
amount. The Company is also in ongoing discussions with its bankers for settlement, which
have not yet concluded. Due to the uncertainty and lack of finalized terms, the impact of
such settlement, if any, has not been accounted for and remains unquantified.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of Qualification : 2nd time
d. For Audit Qualification(s) where the impact is quantified by the
Auditor, Management's Views:
The Company is engaged in the negotiations with its Bankers for a
settlement and is confident for settlement with Banks. Hence, the company has not recorded
interest on outstanding loan for the year 2024-25.
e. For Audit Qualification(s) where the impact is not quantified by the
Auditor: NIL
2 a. Details of Audit Qualification:
We were unable to obtain direct external confirmations in respect of
the Company's current and non-current bank borrowings total amounting to Rs.3744.56 (as
referred in note 16a, 16b). Consequently, we are unable to comment on the completeness,
accuracy, and existence of these borrowings. As a result, we are unable to determine
whether any adjustments may be necessary in respect of these balances.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of Qualification : 1st time
d. For Audit Qualification(s) where the impact is quantified by the
Auditor, Management's Views:
The Company has defaulted in repayment of dues to banks and Financial
Institution and all the loan accounts outstanding are classified as NPA by the banks. The
balance confirmations from Lenders are not forthcoming. Further, the Company is engaged in
the negotiations with its Bankers for a settlement and is confident for settlement with
Banks.
e. For Audit Qualification(s) where the impact is not quantified by the
Auditor: NIL
3 a. Details of Audit Qualification:
The Company has disclosed related party transactions in the statement,
including items such as investments, receivables, payables, advances, purchases, and
sales. Further, balances pertaining to creditors, debtors, other current assets and bank
accounts are subject to external confirmation. While we note that the Company has
initiated the process of obtaining these confirmations, the confirmations have not yet
been received. In the absence of these confirmations, we are unable to comment on the
accuracy, completeness, and validity of the reported balances and related party
transactions.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of Qualification : 2nd Time
d. For Audit Qualification(s) where the impact is quantified by the
Auditor, Management's Views:
The Company has the system of periodical reconciliation of balances
with vendors, customer and related parties. The statutory auditors requested for balance
confirmation letters from all. We have requested for the balance confirmation letters. On
receipt of the same we will submit them to statutory auditors.
e. For Audit Qualification(s) where the impact is not quantified by the
Auditor: NIL
4 a. Details of Audit Qualification:
The Company has not identified parties covered under the Micro, Small
and Medium Enterprises Development Act, 2006. Consequently, disclosures required under
Section 22 of the MSMED Act, 2006 and Section 134 of the Companies Act, 2013, including
provision for interest on delayed payments, have not been made Due to the absence of
relevant data and confirmations, the financial impact of nonprovision of such interest is
not ascertainable.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of Qualification : 1st Time
d. For Audit Qualification(s) where the impact is quantified by the
Auditor, Management's Views:
The company has initiated the process of obtaining the confirmations
and relevant documents regarding MSME certificates from Vendors. However, no such
confirmations have been received so far.
e. For Audit Qualification(s) where the impact is not quantified by the
Auditor: NIL 5.
a. Details of Audit Qualification:
The Company's investments in subsidiaries and associates amounting to
Rs.587.83million have not been assessed for impairment, despite the presence of indicators
for impairment. However, in the absence of independent valuer reports or sufficient
appropriate evidence, we are unable to derive the impact, if any, on these investments.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of Qualification : 1st Time
d. For Audit Qualification(s) where the impact is quantified by the
Auditor, Management's Views:
The Company is anticipating certain business opportunity in coming
years in its subsidiaries. The company has assessed based on projected business plans that
impairment provision is not required at present.
e. For Audit Qualification(s) where the impact is not quantified by the
Auditor: NIL
STATEMENT OF IMPACT OF AUDIT QUALIFICATIONS (FOR
AUDIT REPORT WITH MODIFIED OPINION) SUBMITTED ALONG WITH ANNUAL AUDITED FINANCIAL RESULTS
- CONSOLIDATED BASIS - VIVIMED LABS LIMITED
Statement of Impact of Audit Qualifications for the Financial Year
Ended March 31, 2025 (Regulation 33 / 52 of the SEBI (LODR) (Amendment), Regulations, 2016
(Rs. in Millions)
Sr. No. Particulars |
Audited Figures (as reported
before adjustment) |
Adjusted Figures |
1. Turnover/ Total Income |
1,206.40 |
1,206.40 |
2. Total Expenditure |
1,526.01 |
2,100.45 |
3. Net Profit / (Loss) |
(319.61) |
(894.05) |
4. Earnings Per Share |
(3.85) |
(10.78) |
5. Total Assets |
9,208.34 |
9,208.34 |
6. Total Liabilities |
9,560.03 |
10,134.47 |
7. Net Worth |
(351.69) |
(926.13) |
8. Any Other Financial Items (as
felt appropriate by the Management) |
Nil |
Nil |
II Audit Qualification:
1 a. Details of Audit Qualification:
As disclosed in Note 3 to the statement, the Company has not recognized
interest expense of approximately Rs.574.44 million on an accrual basis, citing
non-availability of bank confirmations as of March 31,2025. This is not in compliance with
Indian accounting standards, which require accrual-based accounting and recognition of
borrowing costs when accrued. Consequently, the reported loss is understated by the said
amount. The Company is also in ongoing discussions with its bankers for settlement, which
have not yet concluded. Due to the uncertainty and lack of finalized terms, the impact of
such settlement, if any, has not been accounted for and remains unquantified.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of Qualification : 2nd time
d. For Audit Qualification(s) where the impact is quantified by the
Auditor, Management's Views:
The Company is engaged in the negotiations with its Bankers for a
settlement and is confident for settlement with Banks. Hence, the company has not recorded
interest on outstanding loan for the year 2024-25.
e. For Audit Qualification(s) where the impact is not quantified by the
Auditor: NIL
2. a. Details of Audit Qualification:
We were unable to obtain direct external confirmations in respect of
the Company's current and non-current bank borrowings total amounting to Rs.3744.56 (as
referred in note 16a, 16b). Consequently, we are unable to comment on the completeness,
accuracy, and existence of these borrowings. As a result, we are unable to determine
whether any adjustments may be necessary in respect of these balances.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of Qualification : 1st time
d. For Audit Qualification(s) where the impact is quantified by the
Auditor, Management's Views:
The Company has defaulted in repayment of dues to banks and Financial
Institution and all the loan accounts outstanding are classified as NPA by the banks. The
balance confirmations from Lenders are not forthcoming. Further, the Company is engaged in
the negotiations with its Bankers for a settlement and is confident for settlement with
Banks.\
e. For Audit Qualification(s) where the impact is not quantified by the
Auditor: NIL
a. Details of Audit Qualification:
3
The Company has disclosed related party transactions in the
statement, including items such as investments, receivables, payables, advances,
purchases, and sales. Further, balances pertaining to creditors, debtors, other current
assets and bank accounts are subject to external confirmation. While we note that the
Company has initiated the process of obtaining these confirmations, the confirmations have
not yet been received. In the absence of these confirmations, we are unable to comment on
the accuracy, completeness, and validity of the reported balances and related party
transactions.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of Qualification : 2nd Time
d. For Audit Qualification(s) where the impact is quantified by the
Auditor, Management's Views:
The Company has the system of periodical reconciliation of balances
with vendors, customer and related parties. The statutory auditors requested for balance
confirmation letters from all. We have requested for the balance confirmation letters. On
receipt of the same we will submit them to statutory auditors.
e. For Audit Qualification(s) where the impact is not quantified by the
Auditor: NIL
4 a. Details of Audit Qualification:
The Company has not identified parties covered under the Micro, Small
and Medium Enterprises Development Act, 2006. Consequently, disclosures required under
Section 22 of the MSMED Act, 2006 and Section 134 of the Companies Act, 2013, including
provision for interest on delayed payments, have not been made Due to the absence of
relevant data and confirmations, the financial impact of nonprovision of such interest is
not ascertainable.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of Qualification : 1st Time
d. For Audit Qualification(s) where the impact is quantified by the
Auditor, Management's Views:
The company has initiated the process of obtaining the confirmations
and relevant documents regarding MSME certificates from Vendors. However, no such
confirmations have been received so far.
e. For Audit Qualification(s) where the impact is not quantified by the
Auditor: NIL
(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.J K & Co, Cost Accountants, (Firm
Registration No. 004010), as the Cost Auditors of the Company for the Financial Year
2025-26. 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.
(IN) 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 2024-25. The Secretarial Audit Report issued in Form MR-3
is in Annexure -4 to this Report. There are no qualifications, reservations or
adverse remarks in the Secretarial Audit Report.
Pursuant to the Regulation 24A & other applicable provisions of the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("SEBI Listing Regulations") read with provisions of Section
204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and other applicable provisions of the Companies Act, 2013, if any
("the Act"), the Audit Committee and the Board of Directors at their respective
meetings held on 13.08.2025 have approved subject to approval of Members, appointment of
Mr. NVSS Suryanarayana Rao, Peer Reviewed Company Secretary in Practice as Secretarial
Auditors for a term of 5(Five) consecutive years from April 1, 2025 till March 31, 2030.
The approval of the members is being sought to the terms, conditions and stipulations for
the appointment of Mr. NVSS Suryanarayana Rao, Peer Reviewed Company Secretary in Practice
as Secretarial Auditors and the remuneration payable to them and resolution pertaining to
the same is contained in the notice calling Annual General Meeting.
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.
DISCLOSURES:
AUDIT COMMITTEE
The Audit Committee comprises majority of Independent Directors namely
Mr. Jarugula Siva Prasad Ms. Aparna Bidarkar, Mr. Sandeep Varalwar and Ms. Subbarathnamma
Palepu as members. During the year all the recommendations made by the Audit Committee
were accepted by the Board.
VIGIL MECHANISM
The Company has a Vigil mechanism and a Whistle - blower policy in
accordance with provisions of the Act and Listing Regulations, 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: www.vivimedlabs.com
CODEOF CONDUCT
A declaration regarding compliance with the code of conduct signed by
the Company's Managing Director is published in the Corporate Governance Report which
forms part of the annual report.
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 -5 to the Board's Report.
ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act, 2013 and
rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended), a
copy of the Annual Return of the Company shall be placed on the Website of the Company at https://www.vivimedlabs . com/other-data/.
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, as amended thereof, a statement showing the names and other
particulars of the employees 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 also forms part of this Report.
MAINTENANCE OF COST RECORDS SPECIFIED BY THE
CENTRAL GOVERNMENT UNDER SECTION 148 OF THE COMPANIES ACT, 2013
The Company has complied with the provisions relating to maintenance of
Cost Records as specified by the Central Government under Section 148 of the Companies
Act, 2013 during the year under review.
POLICY ON SEXUAL HARASSMENT AND CONSTITUTION OF INTERNAL COMPLAINTS
COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013
The Company has a Policy on"Prevention of Sexual Harassment of
Women at Workplace" for the matters connected therewith or incidental thereto
covering all the aspects as contained under the "The Sexual Harassment of Women at
Workplace (Prohibition, Prevention and Redressal) Act, 2013" and constituted an
Internal Complaints Committee under 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.
The Company regularly conducts awareness programs for its employees.
DECLARATION FROM INDEPENDENT DIRECTORS:
The independent directors have submitted the declaration of
independence stating that they meet the criteria of independence as prescribed in
sub-section (6) of Section 149 of the Companies Act, 2013 as well as under Regulation
16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
GENERAL
Your Directors state that no disclosure or reporting is required in
respect of the following matters as there were no transactions on these items during the
year under review:
• Details relating to deposits covered under Chapter V of the Act.
• Issue of equity shares with differential rights as to dividend,
voting or otherwise.
• Issue of shares (including sweat equity shares) to employees of
the Company under any scheme save and except Employee Stock Option Scheme referred to in
this Report.
• The Company does not have any scheme of provision of money for
the purchase of its own shares by employees or by trustees for the benefit of employees.
• 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.
• No fraud has been reported by the Auditors to the Audit
Committee or the Board.
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-6. The details
of related party disclosures as stated in the notes to the financial statements forms part
of this annual report.
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 - 7 and forms part of
this Report.
ACKNOWLEDGEMENTS
Your Directors wish to thank all stakeholders, employees and business
partners, Company's bankers, medical professionals and business associates for their
continued support and valuable cooperation.
The Directors also wish to express their gratitude to investors for the
faith that they continue to repose in the Company.
For and on behalf of the Board
Place: Hyderabad |
Sd/- |
Date: 13.08.2025 |
Santosh Varalwar |
|
Managing Director |
|
DIN:00054763 |
|
Sd/- |
|
Manohar Rao Varalwar |
|
Chairman cum Whole time
Director |
|
DIN:00059815 |