The stock has moved miles in last one year or so and promoters have tried to pose good picture for retail investors by sharing dividends etc... The company has significantly improved its top line & bottom line both. But still questions are being asked regarding promoters political involvement and its impact on long term future. Recent news from unconfirmed sources is that Income Tax authorities have raided their office in certain old tax disputes on 15-16 Dec 2015. Long term investors may need to evaluate its impact in upcoming quarterly results as if management has done some mischievous acts in the past then they may reserve some funds to overcome the litigation. I shall welcome views of trusted old knowledgeable investors on this.

Seafood imports from Thailand may be banned after shrimp products were traced to slave labor
http://www.ibtimes.com/shrimp-slaves-boycott-thailand-slave-labor-controversy-sparks-call-ban-seafood-2228049

Disc: Invested. >10% of PF

Sumit,
Imho, equity raising was very prudent decision. Had they taken debt, thought interest on debt is tax deductible, but along with interest principal will also have be to repaid in due course, that would take away minimum 300 crores (200 cr debt and 100 cr approx. interest) from balance sheet of suven. And in case of failure, this would be too huge burden.

Think it in other way, though as per accounting practice they will be debiting this research expense in PL, but actually it is not being paid from profits of suven. They have issue fresh equity of Rs. 200 crores and this is being used. Thus there is not strain on Balance sheet for that expense.

Another interesting way to boost earnings by massaging accounts, courtesy Valeant.

Suppose you have Company A that has to incur heavy R&D expenses for drug discovery purposes. GAAP requires these to be expensed in earnings. But suppose the same company does not do any R&D and acquires another company that does exactly the R&D it wants and pays up for it by exactly the amount spent. In such a case the amount will be shown as an intangible assets and amortised over a long period of time which period would be far longer than the expense period. This is allowed as per GAAP.

The net effect is that you take a far lower amortisation every year and thus smoothen earnings.

This tactic was learnt in a fantastic article in WSJ link behind a pay wall - Valeant an accounting pioneer too.

It says " Valeant’s approach to research and development also leads to favorable accounting treatment.

When drug companies spend on research in-house, they record quarterly expenses that eat into profits. But research gained through acquisitions is treated as an intangible asset that can sit on companies’ balance sheets indefinitely at full value.

That means that by buying, rather than creating, most of its drugs, Valeant can avoid recording big quarterly R&D expenses, thus lifting its earnings."

Thanks,