Orchid Chemicals and Pharmaceuticals has suffered setback during the third quarter ended June 2014 and its net loss increased to Rs.60.14 crore from Rs.54.50 crore in the corresponding period of last year despite net sales growth of 12.1 per cent to Rs.278.63 crore as against Rs.248.46 crore. Its depreciation provision increased significantly to Rs.56.73 crore from Rs.41.94 crore. Due to higher depreciation its EBDITA worked out to Rs.41.54 crore as compared to Rs.43.02 crore in the same quarter of last year.
K Raghvendra Rao, managing director, said, “With the implementation of the approved Corporate Debt Restructuring (CDR) and availability of working capital consequent to completion of the business transfer to Hospira in July 2014, the company is on track to regain its position in the market.”
The auditors' pointed out in their report that Orchid Chemicals has given advances amounting to Rs.596.27 crore to various parties and are outstanding as on June 30, 2014. The company has not received major materials/capital goods from the time these specific advances were given. The company is not able to take delivery of materials due to financial constraints. Due to this auditors have not express any opinion on the recoverability of these amounts.
Further, the company has investments of s Rs.94.82 crore and loans of Rs.34.25 crore in a wholly owned subsidiary Bexel Pharmaceuticals Inc. The subsidiary has not been spending any money on the research on the molecule during the current period as no financial support is given by Orchid and it has not allotted any funds or the future development. Auditors have stated that no information is not available with Orchid regarding the value that can be recovered from the sale of rights over the molecule possessed by the subsidiary.
Auditors stated that the debt restructuring process has been approved. The company has not received final confirmation of balances from banks/institution relating to the loan and interest payable to them. As per financial advisor for CDR credit of interest amounting to Rs.41.97 crore has been taken during the quarter and subject to effect of final reconciliation and confirmation of all banks.
The business transfer agreement entered on August 29, 3012 has been implemented and completed on July 4, 2014 and will be accounted for in the next quarter.
For the nine months ended June 2014, Orchid's net sales amounted to Rs.1,096 crore and its net loss reached at Rs.195 crore.
The previous year was of 18 months period ended September 2013 and net sales were at Rs.1,850 crore and it incurred net loss of Rs.530 crore.