Glaxo writes down Viva, Maltova value

GlaxoSmithKline Consumer Healthcare Ltd has written down the value of Maltova and Viva, the brands it bought from Jagatjit Industries Ltd in 2000, by Rs 31.62 crore. Instead of Rs 59.64 crore, these brands are now valued at Rs 28.02 crore in the company's balance sheet.

"In line with the current sales projection for these brands and in accordance with good accounting principles, the company has decided to write down the value of Viva and Maltova in its balance sheet to reflect their true value to the company," GlaxoSmithKline informed the Bombay Stock Exchange.

The write-down would affect the free balance in the company's books by 7 per cent, GlaxoSmithKline sources told Business Standard. The decision was taken at a meeting of the company's board of directors here today.

GlaxoSmithKline had acquired the two brands for around Rs 80 crore.

The valuation was done on the basis of the brands' sales at that time as well as the projected revenue from them. However, the brands failed to deliver the projected revenue.

"After an extensive review of its nutritional products, the company decided to focus on its other brands, Horlicks and Boost, which account for the bulk of its sales. Thus, first Boost and then Horlicks were relaunched," a source said.

Maltova and Viva sales were growing 3-4 per cent per year, the sources said, adding that GlaxoSmithKline would continue to support the two brands.

"GlaxoSmithKline will continue to push sales of Viva and Maltova, and has no plans to sell or phase out the brands," the company said.

GlaxoSmithKline had bought the Viva and Maltova brands to consolidate its leadership position in the healthdrink category.