Fulford (India) Limited · Fulford (India) Limited, MSD Pharmaceuticals Private Limited and Organon (India) Private Limited. Since its existence in India, the Company has moved quickly

Fulford (India) LimitedANNUAL REPORT2015 -16

Committed to improving

health and well-being around the

world.

w w w . f u l f o r d i n d i a . c o m

From developing new therapies that treat and prevent disease to helping people in need, we’re committed to improving health and well-being around the world.

Fulford (India) Limited, is the subsidiary of Merck & Co. Inc., Kenilworth, N.J., USA. Merck is known as MSD across the world (except in the US and Canada), operates in India via three separate entities Fulford (India) Limited, MSD Pharmaceuticals Private Limited and Organon (India) Private Limited.

Since its existence in India, the Company has moved quickly in laying the foundation for a business that is differentiated by its focus on putting patients first and through launching innovative products relevant to India.

MSD in India currently operates in various therapeutic areas in human health, including Metabolics, Cardiovascular, Vaccines, Critical Care, Immunology, Virology, Oncology, Women’s Health, Dermatology, Respiratory and Primary Care, and offers a strong and diversified product portfolio of over 65 brands in total. For more information visit, www.fulfordindia.com

Fulford (India) Limited ANNUAL REPORT 2015-16

Fulford (India) Limited

Fulford (India) Limited ANNUAL REPORT 2015-16 1

COMPANY INFORMATIONBOARD OF DIRECTORSDR. AJIT DANGI, Chairman MR. K.G. ANANTHAKRISHNAN, President & Managing Director DR. V.S. SOHONI MR. HOMI KHUSROKHAN MR. SANDEEP SHARMA (Resigned w.e.f. September 3, 2015)MR. GIRIDHAR SANJEEVIMS. HWEE PING CHUA

COMPANY SECRETARYMR. SACHIN GAIKWAD (Resigned w.e.f. October 14, 2015)

COUNTRY LEADERSHIP TEAMMR. GIRIDHAR SANJEEVI – Finance

MR. SAMEER TAMHANE – Human Resources

MS. JYOTSNA GHOSHAL – Corporate Affairs

DR. SWASHRAYA SHAH – Medical Affairs

MR. SHASHANK SHANBHAG - Sales & Marketing – Hospital, Specialty & Fertility Business

MR. VIVEK KAMATH – Sales & Marketing – CVM, PHI & Market Access

MS. ANNAPURNA DAS – Vaccines & Neighbouring Markets

MR. ANJAN SEN – DVB, Strategy & Commercial Operations

REGISTERED OFFICEPlatina, 8th FloorPlot No. C-59, G-BlockBandra-Kurla ComplexBandra (East)Mumbai-400098, IndiaTel: 022-67898888Fax: 022-67898889

CIN : L99999MH1948PLC006199

CARRYING & FORWARDING AGENTSAhmedabad, Ambala, Kolkata, Chennai, Delhi, Guwahati, Bangalore, Hyderabad, Indore, Jaipur, Lucknow, Patna, Cochin, Bhiwandi, Coimbatore, Zirakpur, Noida.

DISTRIBUTORSCuttack, Ranchi, Goa, Nagpur, Mumbai, Uttaranchal, Jammu & Kashmir, Vijaywada

BANKERSCITIBANK N A STATE BANK OF INDIACANARA BANKHDFC BANK LIMITEDKOTAK MAHINDRA BANKING VYSYABANK OF AMERICAB N P PARIBASDEUTSCHE BANK

LEGAL ADVISORSCORPORATE LAW GROUP (CLG)

AUDITORSLOVELOCK & LEWES

REGISTRAR AND SHARE TRANSFER AGENTSLINK INTIME INDIA PVT. LTD.C/13, Pannalal Silk Mills Compound,L.B.S. Marg, Bhandup (West),Mumbai-400 078Tel: 022-25946970-78Fax: 022-25946969

REQUESTS TO MEMBERS

All correspondence regarding transfer and demat of shares may be addressed to our Registrar and Share Transfer Agents.

Members are requested to bring their copy of Annual Report to the Meeting.

Members requiring any information about the accounts are requested to write to the Company at least one week before the date of the meeting so that the information may be made available at the meeting.

Members can address their grievance to our Registrar and Share Transfer Agents at [email protected] and to us at [email protected]

2

CONTENTS

Business Review

Notice 03

Directors’ Report 08

Auditors’ Report 32

Financials – Standalone

Balance Sheet 38

Statement of Profit and Loss 39

Cash Flow Statement 40

Notes to Financial Statements 41

Subsidiary Company

Schering-Plough (India) Private Limited (SPIPL)

Directors’ Report 61

Auditors’ Report 70

Financials 74

Consolidated Auditors’ Report 79

Financials – Consolidated

Balance Sheet 84

Statement of Profit and Loss 85

Cash Flow Statement 86

Notes to Financial Statements 88



NOTICE

NOTICE is hereby given that the Sixty-Eighth Annual General Meeting of the Members of FULFORD (INDIA) LIMITED will be held at Exchange Plaza, NSE Auditorium, Ground Floor, Bandra-Kurla Complex, Bandra (East), Mumbai – 400 051 on Tuesday, August 2, 2016 at 11.30 a.m. to transact the following business:

ORDINARY BUSINESS1. To receive, consider and adopt the Audited Financial Statements (including Consolidated Financial

Statements) of the Company for the Financial Year ended March 31, 2016, the Reports of the Board of Directors and Auditors thereon.

2. To appoint a Director in place of Mr. K. G. Ananthakrishnan (holding DIN 00019325), who retires and being eligible, offers himself for re-appointment.

3. To appoint a Director in place of Mr. Giridhar Sanjeevi (holding DIN 06648008), who retires and being eligible, offers himself for re-appointment.

4. To appoint a Director in place of Ms. Hwee Ping Chua (holding DIN 02930545), who retires and being eligible, offers herself for re-appointment.

5. Ratification of Appointment of Auditors

To consider and, if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for time being in force), the Company hereby ratifies the appointment of M/s. Lovelock & Lewes, Chartered Accountants (Firm Registration No. 301056E), as the Auditors of the Company, to hold office from the conclusion of this Annual General Meeting (AGM) till the conclusion of the Sixty-Ninth AGM of the Company to be held in the year 2017 to examine and audit the accounts of the Company at such remuneration as may be mutually agreed between the Board of Directors of the Company and the Auditors.”

SPECIAL BUSINESS6. Approval of remuneration of the Cost Auditor for the financial year ended March 31, 2017 To consider and, if thought fit, to pass with or without modification(s), the following resolution as an

Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 148(3) and other applicable provisions of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force), the remuneration of INR 80,000/- (Rupees Eighty Thousand Only) plus applicable service tax and reimbursement of out of pocket expenses for the Financial Year ending March 31, 2017, as approved by the Board of Directors of the Company payable to Mr. Vishesh Naresh Patani, Cost Accountant (Firm Registration No. 101108) for conducting the Cost Audit of the records maintained by the Company, be and is hereby ratified.

RESOLVED FURTHER THAT any Director or Company Secretary of the Company, be and is hereby authorized to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”

By Order of the Board of Directors

K. G. Ananthakrishnan President & Managing DirectorMumbai, May 30, 2016 DIN 00019325

Registered Office:8th Floor, Platina, Plot No. C-59, G-Block, Bandra-Kurla Complex,Bandra (East), Mumbai: 400 098.CIN: L99999MH1948PLC006199www.fulfordindia.com


NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT ONE OR MORE PROXIES TO ATTEND AND VOTE INSTEAD OF HIMSELF, ON A POLL ONLY AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. However, Proxy Forms duly stamped, completed and signed, should be deposited at the Registered Office of the Company not less than 48 hours before the Meeting.

2. In terms of Section 105 of the Companies Act, 2013 read with Rule 19 of the Companies (Management and Administration) Rules, 2014, a person can act as proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. A member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other shareholder.

3. Corporate Members intending to send their authorized representative(s) to attend the Annual General Meeting are requested to forward a certified copy of Board Resolution authorizing their representative to attend and vote at the Annual General Meeting either to the Company in advance or submit the same at the venue of the Annual General Meeting.

4. Members are requested to notify any change in their address immediately to the Company or to Link Intime India Private Limited, Mumbai, the Company’s Registrar and Share Transfer Agents.

5. In terms of Sections 124 and 125 of the Companies Act, 2013, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the date of transfer to the unpaid dividend account, is required to be transferred to the Investor Education and Protection Fund. Members shall not be able to claim any unpaid dividend from the Company thereafter. Members who have not encashed the dividend warrants/demand drafts for the years 2009, 2010, 2011, 2012, 2013-14 and 2014-15 are requested to contact the Company's Registrar and Share Transfer Agents. Outstanding Dividend for the year 2008 was transferred to the Investor Education and Protection Fund in June 2016.

6. Members can avail of the facility of nomination in respect of shares held by them in physical form pursuant to the provisions of Section 72 of the Companies Act, 2013. Members desiring to avail this facility may send their nomination in the prescribed Form SH 13 duly filled in to the Company’s Registrar and Share Transfer Agents. The prescribed form in this regard may also be obtained from the Company’s Registrar and Share Transfer Agents. Members holding shares in electronic form are requested to contact their Depository Participant directly for recording their nomination.

7. The Company has already executed tripartite agreements with both the depositories viz. Central Depository Services (India) Limited (CDSL) and National Securities Depository Limited (NSDL) and Link Intime India Private Limited, the Company’s Registrar and Share Transfer Agents. Accordingly, the equity shares of the Company can be held in an electronic form with any Depository Participant (DP) with whom the Members have their Depository Account. The ISIN No. allotted to the equity shares of the Company is INE521A01017. In view of the numerous advantages offered by the Depository System, members who are yet to dematerialize their shares are requested to avail of the facility of dematerialization.

8. The Ministry of Corporate Affairs (MCA) has taken a “Green Initiative in Corporate Governance” allowing paperless compliances through electronic mode. Companies are now permitted to send various notices/documents to its Members through electronic mode to their registered email addresses. This move by the Ministry is welcome since it will benefit the society at large through reduction in paper consumption and contribution towards a Greener Environment. We propose to send all documents to Members like General Meeting Notices (including AGM), Audited Financial Statements, Directors’ Report, Auditors’ Report, etc. in electronic form, to the email address provided by them and made available to us by the Depositories. The physical copies of the Annual Report will also be available at our Registered Office in Mumbai for inspection during office hours and the same is also displayed on the website of the Company www.fulfordindia.com.

9. In compliance with the provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is pleased to provide


members facility to exercise their votes at the 68th AGM by electronic means and the business may be transacted through e-voting as per instructions given below:

(a) Date and time of commencement of voting through electronic means: July 30, 2016 from 9.00 a.m.

(b) Date and time of end of voting through electronic means beyond which voting will not be allowed: August 1, 2016 at 5.00 p.m.

(c) Details of Website: www.evotingindia.com

(d) The e-voting module shall be disabled for voting on August 1, 2016 at 5.00 p.m. Once the vote on a resolution is casted by the shareholder, the shareholder shall not be allowed to change it subsequently. The voting right of shareholders shall be in proportion to their share in the paid up equity share capital of the Company as on the cut-off date (record date) as on July 26, 2016.

(e) Mr. Alwyn D’souza, Practising Company Secretary of M/s. Alwyn D’souza & Co., Company Secretaries, Mumbai, has been appointed as the Scrutinizer to scrutinize the voting and remote e-voting process in a fair and transparent manner.

(f) The facility for voting, either through electronic voting system or polling paper shall also be made available at the meeting and Members attending the meeting who have not already cast their vote by remote e-voting shall be able to exercise their right at the meeting.

(g) The Members who have cast their vote by remote e-voting prior to the meeting may also attend the meeting but shall not be entitled to cast their vote again.

10. The instructions for e-voting are as under:

(i) The voting period begins on July 30, 2016 at 9.00 a.m. and ends on August 1, 2016 at 5.00 p.m. During this period, shareholders of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date (record date) of July 26, 2016 may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

(ii) The shareholders should log on to the e-voting website www.evotingindia.com.

(iii) Click on Shareholders.

(iv) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,

b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

c. Members holding shares in Physical Form should enter Folio Number registered with the Company.

(v) Next enter the Image Verification as displayed and Click on Login.

(vi) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any Company, then your existing password is to be used.

(vii) If you are a first time user follow the steps given below:

For Members holding shares in Demat Form and Physical Form

PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders)

Members who have not updated their PAN with the Company/Depository Participant are requested to use the sequence number which is printed on Attendance Slip indicated in the PAN field.

DOB Enter the Date of Birth as recorded in your demat account or in the company records for the said demat account or folio in dd/mm/yyyy format.


For Members holding shares in Demat Form and Physical Form

Dividend Bank Details

Enter the Dividend Bank Details as recorded in your demat account or in the Company records for the said demat account or folio.

• PleaseentertheDOBorDividendBankDetails inorderto login. Ifthe details are not recorded with the depository or Company please enter the member id/folio number in the Dividend Bank details field as mentioned in instruction (iv).

(viii) After entering these details appropriately, click on “SUBMIT” tab.

(ix) Members holding shares in physical form will then directly reach the Company selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other Company on which they are eligible to vote, provided that Company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

(x) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

(xi) Click on the EVSN for the relevant <Company Name> on which you choose to vote.

(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(xiv) After selecting the resolution, you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xvi) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xvii) If Demat account holder has forgotten the same password, Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.

(xviii) Note for Non-Individual Shareholders and Custodians

• Non-Individualshareholders(i.e.other than Individuals,HUF,NRIetc.)andCustodianarerequired to log on to www.evotingindia.com and register themselves as Corporates.

• AscannedcopyoftheRegistrationFormbearingthestampandsignoftheentityshouldbe emailed to [email protected].

• AfterreceivingthelogindetailsaComplianceusershouldbecreatedusingtheadminloginand password. The Compliance user would be able to link the account(s) for which they wish to vote on.

• [email protected] and on approval of the accounts they would be able to cast their vote.

• A scanned copy of theBoardResolution andPower of Attorney (POA)which they haveissued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.

(xix) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com, under help section or write an email to [email protected].


ANNEXURE TO NOTICE

Explanatory Statement pursuant to Section 102 of the Companies Act, 2013:

Item No.: 6 – Approval of remuneration of the Cost Auditor for the financial year ended March 31, 2017

The Board of Directors on the recommendation of the Audit Committee has approved the appointment and remuneration of Mr. Vishesh Naresh Patani, the Cost Auditor, to conduct the audit of the cost records of the Company for the financial year ending March 31, 2017 at a remuneration of INR 80,000/- (Rupees Eighty Thousand only) plus out of pocket expenses.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor has to be ratified by the members of the Company.

Accordingly, consent of the members is sought for passing this resolution as an Ordinary Resolution for ratification of the remuneration payable to the Cost Auditor for the financial year ending March 31, 2017.

None of the Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in the resolution set out at Item No. 6.

By Order of the Board of Directors

K G Ananthakrishnan President & Managing DirectorMumbai, May 30, 2016 DIN 00019325

Registered Office:8th Floor, Platina, Plot No. C-59, G-Block, Bandra-Kurla Complex,Bandra (East), Mumbai: 400 098.CIN: L99999MH1948PLC006199www.fulfordindia.com


DIRECTORS’ REPORT

The Directors hereby present the Sixty-Eighth Annual Report together with the Audited Accounts of the Company for the financial year ended March 31, 2016.

FINANCIAL SUMMARY(` in Million)

Unconsolidated ConsolidatedApril 1, 2015 to

March 31, 2016

April 1, 2014 to

March 31, 2015

April 1, 2015 to

March 31, 2016

April 1, 2014 to

March 31, 2015

Sales (Net) 1577 2341 1577 2341Other Income 62 142 62 142

Total Income 1639 2483 1639 2483

(Loss)/Profit before tax (211) 48 (211) 48Less: Tax Expense (Current Tax, Deferred Tax & Fringe Benefit Tax)-net (70) 13 (70) 13Less/(Add): Tax adjustment for previous years — 12 — 12(Loss)/Profit after Tax (141) 23 (142) 23Balance in Profit & Loss Account 380 364 380 364Amount available for appropriation 239 387 238 387Out of which the following sums have been appropriated:Proposed Dividend — 6 — 6Corporate Tax on Dividend — 1 — 1General Reserve — — — —

Balance carried to Balance Sheet 239 380 238 380

DIVIDEND

The Board of Directors of your Company has not recommended any dividend for the year ended March 31, 2016 considering the absence of profits for the year under review.

TRANSFER TO RESERVES

No amount was transferred to the General Reserve during the year.

TOTAL INCOME

Your Company’s total income during the year reduced to ` 1639 million from ` 2483 million in the previous twelve month period, at a negative growth rate of 34%.

PROFIT/LOSS

The Operating loss before depreciation amounted to ` 209 million (12.77% of revenue) as against Profit of ` 53.9 million (2.17% of revenue) in the previous Financial Year. The net loss after tax was ` 141 million (8.63% of revenue) as against Profit of ` 23.1 million (1.00% of revenue) in the previous Financial Year.

LIQUIDITY

Your Company continues to be debt-free and maintain sufficient cash to meet its objectives. As on March 31, 2016, your Company had cash and bank balance of ` 746 million as against ` 657 million in the previous Financial Year.


TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the financial year 2015-16, an amount of ` 117,372/- (Rupees One Lac Seventeen Thousand Three Hundred and Seventy-two only) lying to the credit of the Company’s Unpaid Dividend Account 2007 was transferred to Investor Education and Protection Fund.

CHANGE IN THE NATURE OF BUSINESS

There was no change in Business of the Company during the year under review.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There is nothing to report in this regard.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

During the period under review, there were no orders passed by the regulators or courts or tribunals against the Company impacting its status as a going concern and its operations.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Compliance with integrity is a core value of your Company. Your Company has been following a comprehensive internal control system and has well defined Standard Operating Procedures and Policies for identifying and mitigating the risk across various divisions within the Company. The Company’s funds/expenses are effectively regulated by appropriate Grants of Authority Policy. The Grant of Authority based execution management ensures compliance with the aforesaid procedures and policies on an ongoing basis in the operations of your Company.

Your Company has designed such internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and preparation of the financial statements for external purposes in accordance with Generally Accepted Accounting Principles (GAAP) in India.

An external agency conducts the Internal Audit Program for the Company, covering all key areas on periodic basis in order to assess and ensure conformity to applicable laws, Accounting Standards, Company's Policies and protection of the Company’s assets and interest. This audit is supplemented by an internal global audit which is conducted twice a year as part of the internal compliance program. There were no deficiencies in the design or operation of internal controls, that could adversely affect the Company’s ability to record, process, summarize and report financial data, and there have been no material weaknesses in internal controls over financial reporting including any corrective actions with regard to deficiencies. There were no significant changes in internal controls during the year.

Further, the Audit Committee appointed by the Board of Directors of your Company reviews the findings and recommendations of internal auditors as well as the auditors appointed by the Members. It also reviews the action plan to identify and address areas of improvement, thereby focusing on strengthening the system.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Company has a wholly owned subsidiary company viz., Schering-Plough (India) Private Limited as on March 31, 2016.

The Statement containing the salient features of the financial statements of subsidiary company, in the prescribed form AOC 1 is appended as Annexure 1 to the Directors’ Report.

The Annual Accounts for the year ended March 31, 2016 as also the Auditors’ Report in respect of Schering-Plough (India) Private Limited are attached to the Accounts of the Company and forming part of this Annual Report. The consolidated financial statements of the Company with its subsidiary are also enclosed.


FIXED DEPOSITS

The Company has not accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

RISK MANAGEMENT

The Company has in place, risk assessment and mitigation procedures which are periodically reviewed by the Audit Committee and the Board of Directors of the Company. These procedures ensure that Management controls risk through an efficiently defined framework.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the standalone financial statements.

TRANSACTIONS WITH RELATED PARTIES

All related party transactions are reported to and approved by the Audit Committee and the Board of Directors in accordance with the provisions of the Companies Act, 2013. All related party transactions entered into by the Company during the financial year were at an arm’s length and were so entered in the ordinary course of business of the Company and were accordingly approved by the Board of Directors.

The Board has adopted a policy on related party transactions which is available on the Company’s website at: www.fulfordindia.com

All details of the related party transactions entered into by the Company during the year are provided in Form AOC-2 appended as Annexure 2 to this report.

OPERATIONAL PERFORMANCE

Your Company recorded sales of ` 1577 million and a negative growth by 32.64% during the year ended March 31, 2016.

Performance during the year has been impacted due to worsening trade conditions of Viraferonpeg and divestment of Consumer Care business.

Your Company has initiated several actions to accelerate growth, the result of these new initiatives should be visible in the years to come. Your Company has identified geographical expansion, improving market access and accelerated public market initiatives as key business drivers.

Your Company is also planning to launch new products and some brands for life cycle management of existing products. Your Company’s focus is also on robust expense management and improving cost efficiencies.

Your Company incurred a loss of ` 141.4 million during the year ended March 31, 2016 as compared to profit of ` 23.1 million during last year. The profits were impacted due to worsening trade conditions of Viraferonpeg and divestment of Consumer Care business.

STATUTORY AUDITORS

M/s. Lovelock & Lewes, Chartered Accountants, were appointed as statutory auditors, to hold office for a period of five years which commenced from the Financial Year 2015-16, at the previous Annual General Meeting of the Company held on August 10, 2015 ("said AGM"), subject to ratification of appointment by members at every Annual General Meeting held after the said AGM. The Proposal for ratification of term of appointment of M/s. Lovelock & Lewes as Statutory Auditors of the Company to hold office from the conclusion of ensuing AGM till the conclusion of next AGM for the financial year ended March 31, 2017 would be placed before the shareholders at the ensuing AGM. A resolution seeking approval of the Members of the Company for ratification of term of appointment of M/s. Lovelock & Lewes has been incorporated in the notice of ensuing AGM of the Company.


AUDITORS’ REPORT

There are no qualifications, reservations, adverse remarks and disclaimers in the Audit Report issued by the Statutory Auditor of the Company.

SECRETARIAL AUDIT REPORT

A requirement of attaching Secretarial Audit Report with the Board’s Report is no longer applicable to your Company as it is not fulfilling any of the criteria prescribed by the provisions of Section 204 of the Companies Act, 2013 as well as Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) they 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 at the end of the financial year and of the profit and loss of the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis; and

(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to Article 110 of the Articles of Association of the Company, the Directors – Mr. K G Ananthakrishnan, Mr. Giridhar Sanjeevi and Ms. Hwee Ping Chua retire and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting of the Company.

Pursuant to the provisions of Section 149 of the Companies Act, 2013, which came into force on April 1, 2014, Dr. Ajit Dangi, Mr. Homi Khusrokhan and Dr. V.S. Sohoni were appointed as independent directors for five (5) consecutive years at the Annual General Meeting of the Company held on August 7, 2014. Their term of appointment is valid upto March 31, 2019. Terms and conditions of appointment of independent directors are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and there has been no change in the circumstances which may affect their status as independent director during the year.

Mr. Sandeep Sharma resigned as a Director of the Company with effect from September 3, 2015.

Mr. Sachin Gaikwad resigned as Company Secretary of the Company with effect from October 14, 2015.

PARTICULARS OF EMPLOYEES

A statement containing the names of every employee employed throughout the financial year and in receipt of remuneration of ` 60 lakhs or more, or employed for part of the year and in receipt of ` 5 lakhs or more per month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure 3 to the Directors’ Report.


POLICY ON PREVENTION OF SEXUAL HARASSMENT

The Company has in place a policy on ‘Prevention of Sexual Harassment’, which is in line with the requirements of law on ‘The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013’. An Internal Complaints Committee (ICC) has been set up for redressal of complaints pertaining to sexual harassment. During the year under review, one complaint was received and the same was investigated and closed by the ICC.

PROCESS OF AGENDA CIRCULATION

A detailed agenda for the meeting of the Board of Directors is prepared and circulated, at least seven days before the date of the meeting, in physical form/electronic form to the Board of Directors.

BOARD OF DIRECTORS

The Board has a balanced composition, with representation of relevant areas of experience, types of expertise and backgrounds. The Board has an optimal constitution of both executive and independent non-executive directors having an in-depth knowledge of the pharmaceutical industry with expertise in their respective areas of specialization.

The Board meets at regular intervals to review the performance of the Company. During the year ended March 31, 2016 four Board Meetings were held on 25.05.2015, 10.08.2015, 06.11.2015 and 18.02.2016.

• CompositionandAttendanceattheBoardMeeting:

Sr. No.

Name of Director Category of Director Number of meetings held

Number of meetings attended

1. Dr. Ajit Dangi (Chairman) Non-Executive Independent Director

4 4

2. Dr. V. S. Sohoni Non-Executive Independent Director

4 3

3. Mr. Homi Khusrokhan Non-Executive Independent Director

4 3

4. Mr. K. G. Ananthakrishnan Executive Director, President and Managing Director

4 4

5. Mr. Giridhar Sanjeevi Non-Executive Director 4 46. Ms. Hwee Ping Chua Non-Executive Director 4 1

BOARD EVALUATION

The Companies Act, 2013 states that a formal annual evaluation needs to be done by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors excluding, the director being evaluated. The Board shall follow this requirement and complete the same during this financial year.

AUDIT COMMITTEE

The Board has constituted an Audit Committee of qualified and competent members, in compliance with Section 177 of the Companies Act, 2013, consisting of the following Directors:

(1) Mr. Homi Khusrokhan, Chairman

(2) Dr. V. S. Sohoni, Alternate Chairman

(3) Dr. Ajit Dangi

The Statutory Auditors and Internal Auditors are invitees at the Audit Committee Meetings. Mr. K.G. Ananthakrishnan, President & Managing Director and Mr. Giridhar Sanjeevi, Non-Executive Director are also invitees at the Audit Committee Meetings. During the Financial Year 2015-16, four Audit Committee meetings were held on 25.05.2015, 10.08.2015, 06.11.2015 and 18.02.2016.


• AttendanceattheAuditCommitteeMeetings:

Sr. No.

Name of Director Number of meetings held


1. Mr. Homi Khusrokhan 4 3

2. Dr. V. S. Sohoni 4 3

3. Dr. Ajit Dangi 4 4

NOMINATION AND REMUNERATION COMMITTEE

The Board has constituted a Nomination and Remuneration Committee to consider the criteria regarding qualification and appointment of directors and senior management personnel and such other matters as are provided in Section 178 of the Companies Act, 2013, consisting of following directors as members:

(1) Dr. V. S. Sohoni, Chairman

(2) Mr. Homi Khusrokhan, Alternate Chairman

(3) Dr. Ajit Dangi

During the Financial Year 2015-16, two meetings of the Nomination and Remuneration Committee were held on 25.05.2015 and 18.02.2016.

• AttendanceattheNominationandRemunerationCommitteeMeetings:

Sr. No.



1. Dr. V. S. Sohoni 2 2

2. Mr. Homi Khusrokhan 2 1

3. Dr. Ajit Dangi 2 2

POLICY ON REMUNERATION

Company’s group Compensation Philosophy emphasizes on being competitive with other top - tier organizations in the market, ensuring consistency in earning levels and potential within the Organization and providing a comprehensive package of compensation and benefits that supports the needs of its business and its employees.

COMPENSATION PROCESS

The compensation decisions are driven by the Company's overall group Compensation Philosophy. Robust internal systems, tools and processes are used to make pay decisions which are aligned to group compensation policy.

INVESTOR GRIEVANCE AND STAKEHOLDERS RELATIONSHIP COMMITTEE

The Board of Directors has formed the Investors Grievance and Stakeholders Relationship Committee (“IGSR Committee”) to look into and ensure redressal of shareholders’ and investors’ grievance. Below is a composition of IGSR Committee:

(1) Dr. Ajit Dangi, Chairman

(2) Mr. K.G. Ananthakrishnan

(3) Mr. Homi Khusrokhan


During the Financial Year 2015-16, a meeting of IGSR Committee was held on November 6, 2015.

• AttendanceattheIGSRCommitteeMeeting:

Sr. No.



1. Dr. Ajit Dangi 1 12. Mr. K.G. Ananthakrishnan 1 13. Mr. Homi Khusrokhan 1 —

A Statement of the various complaints received and cleared by the Company during the year April 01, 2015 to March 31, 2016 is hereunder:

Sr. No.

Nature of Complaint Received Resolved

1. Non-receipt of Dividend 4 42. Non-receipt of Annual Report 3 3

Total 7 7

The Company and its Registrar and Share Transfer Agents (RTA) are making conscious attempts to ensure expeditious redressal of shareholder's grievances. Shareholders can address their requests/grievances to the Company at [email protected] and to its RTA at [email protected]. Members can also contact our RTA on 022-25946970-78 in this connection.

SHARE TRANSFER COMMITTEE

In addition to above, the Board has also formed a Share Transfer Committee. Below is a composition of Share Transfer Committee:




(4) Dr. V. S. Sohoni

The Board of Directors has given a Power of Attorney to its RTA to deal with matters relating to transfer/transmission/transposition/consolidation/ split of Folios/issue of Share Certificates in exchange for sub-divided/consolidated/defaced Share Certificates/re-materialization/issue of duplicate Share Certificates/unclaimed shares etc. The Committee takes a note of the above matters that are handled by its RTA at regular interval.

The Board of Directors note the Minutes of the Share Transfer Committee meetings at subsequent Board Meetings.

UNCLAIMED SHARES

No. of shareholders identified as holders of the unclaimed shares at the beginning of the year 13No. of shares lying in the unclaimed shares at the beginning of the year 1150No. of shareholders who approached for the transfer 2No. of shareholders to whom shares were transferred 1No. of shareholders identified as holders of the unclaimed shares at the end of the year 12No. of shares lying in the unclaimed shares at the end of the year 1100


CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014, the Company has constituted a Corporate Social Responsibility Committee (“CSR Committee”) and has adopted a CSR Policy. Below is a composition of CSR Committee:




During the financial year 2015-16, a meeting of the CSR Committee was held on 18.2.2016.

• AttendanceattheCSRCommitteeMeeting:

Sr. No.



1. Dr. Ajit Dangi 1 12. Mr. Homi Khusrokhan 1 13. Mr. K.G. Ananthakrishnan 1 1

In accordance with the provisions of the Companies Act, 2013 read with CSR Rules, the Company was required to spend ` 199,417/- (Rupees One Lac Ninety-nine Thousand Four Hundred and Seventeen Only) on CSR activities. The Company has contributed ` 200,000/- (Rupees Two Lacs Only) to Swach Bharat Kosh launched by Government of India during financial year 2015-16.

In addition to above, your Company’s parent Company (Global Merck) is committed to doing well for the community at large and has implemented following project in India:

MSD for Mothers in India

MSD for mothers is a 10 year $500 million initiative to create a world where no woman dies from complications from pregnancy and child birth. Drawing on our history of discovering innovative, life-saving medicines and vaccines, we are applying our scientific and business expertise — as well as our financial and human resources — to reduce maternal mortality around the world. We are focused on access to quality, affordable care, product innovation, and awareness and advocacy.

Maternal Mortality in India

India has come a long way in reducing maternal mortality due to a range of government-led efforts. The National Rural Health Mission and initiatives like the Janani Suraksha Yojana and Rashtriya Swasthya Bima Yojana have helped lower the number of women who die from complications of pregnancy and childbirth in India from an estimated 148,000 deaths in 1990 to 50,000 in 2013. However, India has more maternal deaths than any other country in the world i. Women in rural villages and urban slums are disproportionately affected by maternal mortality. Maternal mortality remains too big and complex an issue for one sector to shoulder alone – it requires a coordinated effort among the government, nonprofits, and the private health sector.

Programs and Partners

MSD for Mothers has committed $10 million to innovative partnerships with leading non-governmental organizations. These partnerships will engage and explore the potential of local private providers and health businesses to strengthen maternal healthcare in three states with particularly high rates of maternal mortality: Jharkhand (278 maternal deaths per 100,000 live births), Rajasthan (331 maternal deaths per 100,000 live births), and Uttar Pradesh (345 maternal deaths per 100,000 live births)ii. The partnerships are setting out to improve the affordability, accessibility and quality of private maternal health services and reach nearly 500,000 pregnant women over the next three years.

i Trends in Maternal Mortality: 1990 to 2013 apps.who.int/iris/bitstream/10665/112682/2/9789241507226_eng.pdf?ua=1ii Planning Commission (Government of India). Twelfth Five Year Plan – 2012 – 2017. (New Delhi, 2013)


PARTNERS AND ACTIVITIES TO IMPROVE THE MATERNAL HEALTHCARE IN INDIA INCLUDE:

Hindustan Latex Family Planning Promotion Trust (Rajasthan):

• Expanding the “Merrygold”networkofmaternalhealthclinicsandhospitals tohelpwomen receivematernal healthcare and family planning in semi-urban and rural areas

• Generatingdemandformaternalhealthservicesthrougheducationandcommunityoutreach.

Jhpiego in partnership with the Federation of Obstetric and Gynecological Societies of India (Jharkhand, Uttar Pradesh):

• Improvingthequalityofmaternalcareandfamilyplanninginurbanareasbytrainingprivateproviderson safe birthing practices and use of cutting-edge technologies.

• Introducinglow-cost,easy-to-usetechnologiestoimprovecareandkeepitaffordable.

• Developing and implementing quality standards to help private providers qualify for Governmentprograms that subsidize the cost of maternal health services.

Pathfinder International in Partnership with World Health Partners (Uttar Pradesh)

• Improving access to care for women in hard-to-reach communities through telemedicine andtelediagnostics (the remote treatment and diagnosis of patients through phones and internet)

• Establishinglinksbetweenpublicandprivateproviderstoofferacontinuumofservices.

• Bringinghighquality,low-costmedicinestoruralvillagesthroughanetworkofdeliveryagents.

White Ribbon Alliance for Safe Motherhood in partnership with Gram Vaani (Jharkhand)

• Designing a free, phone-based service for women to rate the care they receive and hold privateproviders accountable for delivering high quality services.

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure 4 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company at www.fulfordindia.com

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure 5 in the prescribed Form MGT-9, which forms part of this report.

COST AUDIT

The Directors have appointed Mr. Vishesh Naresh Patani as Cost Auditor to conduct the Cost Audit for the financial year ended March 31, 2017.

WHISTLE BLOWER POLICY

The Company has formulated a Whistle Blower Policy for Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of Section 177(9) of the Companies Act, 2013. This policy provides an opportunity to the employees and Directors of the Company to approach the Audit Committee in good faith, when they suspect or observe unethical or wrongful practices, malpractices, non-compliance of Company policies etc. No personnel have been denied access to the Audit Committee. The policy is available on the website of the Company at www.fulfordindia.com


MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS

One of the Company's strategic priorities is to deliver results by building strong culture. This is achieved by engaged and empowered employees. Your Company focuses on developing diverse talent and fostering innovative thinking to succeed in markets. We continued to strengthen our efforts towards development & well-being of our employees. A number of customized interventions were designed to cater to development needs across various levels. Employees have undergone the following training programs:

• Connect to Learn: Web based training to enhance the capability of frontline sales team. It helps us in developing our employees and making them more effective in doctor’s clinics. Based on needs of the teams, we have taken Business Unit specific approach and designed customized modules.

• Learn to WIN: Developing First Line Managers to take up the next level roles. Focus is not only in developing our Business Managers but it also improves the retention rate.

• Spandan: A regular connect program by HR to reach out to newly joined employees so as to ensure that they are assimilating well into the culture of your Company.

• LEAD (Learning Enabler Accelerate Development) program – A full year future leader’s development plan for key talent to groom them into leaders by focusing on specific skills.

• EMFL (Emerging Markets Futures Leaders) program – A program for select senior leaders from Emerging Markets to help them train for next leadership level roles. The program is conducted in association with Harvard University.

• HR for Non HR: Training for managers to enhance their people management skills. It also helps them in becoming more effective in managing Industrial Relations.

Top performers were recognized through Reward & Recognition program for the fourth consecutive year. The top performers from Sales division have also been recognized and provided with a sponsored “Mini MBA” program from IIM Lucknow. For some of the exemplary performance in support function, employees were also felicitated in Town hall meetings with both cash and non-cash rewards.

Starting from the year 2012, your Company has rolled out Summer Internship Program. Through this program, your Company has further strengthened relations with various management institutes and universities. The program continued for third year, wherein we had management students who worked on live industry projects during their summer internship.

Employee engagement was also ensured via periodic communications and connects with employees. Apart from the Company town hall meetings, connect was established with employees on periodic basis through tele-calls and personal meetings. The focus of these sessions was to keep all colleagues informed about key developments and strategy, and enhance their participation in driving growth of the organization. Employee feedback is sought at periodic intervals for improving the culture & betterment of the organization.

We continued to invest in Employee health & wellbeing under Flagship ‘Live IT’ program. We continued our focus on Diversity and won the award from WILL for gender sensitive leadership. We launched India Millennial Network. The payroll also got integrated with HR IT system called HtR.

The total number of employees as on March 31, 2016 was 279.

DELISTING OF EQUITY SHARES OF THE COMPANY FROM BSE LIMITED

On April 25, 2014, the Board of Directors of Fulford (India) Limited (“the Target Company”) received a letter from Dashtag, the promoter of the Target Company (“Acquirer”) notifying the Acquirer’s intention to make a voluntary delisting offer (“Delisting Offer”) to the public shareholders of the Target Company in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (“Delisting Regulations”) to acquire 976,763 equity shares, representing 25.05% of the paid up equity share capital of the Target Company held by the public shareholders of the Target Company (“Public Shareholders”)


and consequently delist the equity shares of the Target Company from BSE Limited (“BSE”). The Board of Directors of the Target Company approved the Delisting Offer on April 26, 2014. It was also decided to seek the approval of members of the Target Company for Delisting Offer through Postal Ballot in terms of Delisting Regulations. The said Postal Ballot Resolution was passed pursuant to Section 110 of the Companies Act, 2013, and all other applicable provisions, if any, read with applicable rules framed under the Companies Act, 2013 relating to passing of resolution by postal ballot and Regulation 8(1) (b) of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 or any other applicable regulation of Delisting Regulations, as amended from time to time. The said Special Resolution was approved by the members on June 20, 2014. Subsequent to that, all the regulatory approvals were obtained in this regard. Vide a public announcement dated May 29, 2015 and offer letter dated May 29, 2015, the Acquirer made the Delisting Offer to the public shareholders. The public shareholders of the Target Company were invited to submit bids pursuant to a Reverse Book Building process made available through the electronic system of the BSE from June 3, 2015 to June 9, 2015. Vide a public announcement dated July 17, 2015; the Acquirer accepted the discovered price of ` 2,400 per Share (“Exit Price”). Pursuant to the Successful Offer Announcement, the Acquirer acquired 625,928 Shares from public shareholders of the Target Company at the Exit Price. On July 30, 2015, the Acquirer, made a public announcement, informing the Residual Shareholders of the terms and conditions of the Exit Offer. The Exit Offer period opened on August 7, 2015 and will close on August 6, 2016. Following the closure of the Delisting Offer and in accordance with the Delisting Regulations, the Company applied for the delisting of its Shares from BSE and pursuant to the same, the Shares of the Company were delisted from BSE with effect from August 7, 2015 and no longer traded on BSE with effect from July 31, 2015 (as per notice of BSE bearing no. 20150727-4 dated July 27, 2015). The Acquirer has successfully acquired a total of 805,535 shares from public shareholders of the Company till April 30, 2016. Total Shareholding of acquirer in Target Company as on April 30, 2016 was 3,728,772 shares constituting 95.61% of paid-up share capital of Target Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

1. CONSERVATION OF ENERGY

(i) Energy conservation measures taken in the recent past: Nil

(ii) Additional investments and proposals for reduction of energy consumption being implemented: Nil

(iii) Impact of measure (i) and (ii) above for reduction of energy consumption and consequent impact on the cost of production of goods: Nil

(iv) Total energy consumption and energy consumption per unit of production: Nil

A. Power & Fuel Consumption 2015-16 2014-15

1. Electricity

(a) Purchased Not Applicable

Units

Total Amount

Rate/Unit

(b) Own Generation Not Applicable

(i) Through Diesel Generator

Units

Units per ltr. of Diesel Oil

Cost/Unit



(ii) Through Steam Turbine/generator

Units

Units per ltr. of fuel oil/gas

Cost/Unit

2. Coal (Specify quality and where used) Not Applicable

Quantity (Tonnes)

Total Cost Average

Rate

3. Furnace Oil Not Applicable

Quantity (K. Ltrs.)

Total Cost

Average Rate/Litre

4. Others/Internal Generation Not Applicable

Quantity

Total Cost

Rate/Unit

B. Consumption per unit of Production Standards (If any) 2015-16 2014-15

Products (with details) Unit Not Applicable

Electricity

Furnace Oil

Coal (Specify quality)

Others (Specify)

2. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

Research & Development (R&D):

(a) Specific areas in which R&D carried out by the Company: The Company gets the benefits of the Research and Development done by its Parent Company. Most of the products introduced by the Company in India are original research products of its parent Company.

(b) Benefits derived as a result of the above R&D: The Company has also benefited from the supply of technology from its parent Company. This includes training of Company’s personnel by it during short and long–term assignments and deputation of technical experts.

(c) Future Plan of action: Since the Company in India is not involved in any R&D activities, there is no defined future plan of action but the Company will continue to receive support from its parent Company in terms of sharing necessary information on R&D activities and would strive hard to improve its operational efficiency.

(d) Expenditure on R&D:

(i) Capital – Nil

(ii) Recurring – Nil

(iii) Total – Nil

(iv) Total R&D expenditure as a percentage of total turnover – Nil


Technology Absorption, Adaptation and Innovation

1. Efforts, in brief, made towards technology absorption, adaptation and innovation:

The Company on continuous basis interacts with its Parent Company for gaining technical expertise for pharmaceutical formulations. The Company also works hard towards bringing innovation in its operations. The Company on continuous basis interacts with its Parent Company for gaining technical expertise for pharmaceutical formulations. The Company also works hard towards bringing innovation in its operations.

2. Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc.:

Company has benefited to a great extent as a result of the above efforts. Product development & Product improvement are the major benefits derived as a results of the above efforts.

3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:

a. Technology Imported: N.A.

b. Year of Import: N.A.

c. Has technology been fully absorbed: N.A.

d. If not fully absorbed, areas where this has not taken place, reasons thereof and future plans of action: N.A.

3. FOREIGN EXCHANGE EARNINGS AND OUTGO

(i) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans.

Presently, the Company does not export any of the products and there are no significant foreign exchange earnings.

(ii) Total Foreign exchange earned and used ` in Million

Total Foreign exchange earned: 27

Total Foreign exchange used: 170

On import of raw materials/finished goods 160

On import of capital goods, spares and components —

Expenditure in foreign currencies for business travels, subscription, honorarium, participants and others 5

Remittance during the year in foreign currency on account of dividend 5

Royalty and Technical know-how —

OUTLOOK

The Company shall focus on driving growth of existing products, launching new products and line extensions, strong expense management and prioritizing its investment for better operational performance in financial year 2016-2017. Your Company’s focus on the Hepatitis business going forward will be reduced in the short term on account of the changing trend in treatment of the disease. However, the Dermatology, Oncology and Anti-infective businesses will continue to be growth drivers for the Company. There are various plans to maintain the strong leadership position in these segments through several new initiatives such as geographic expansion, sales force effectiveness, newer business models and scientific initiatives. The anti-infective business will witness the launch of newer line extensions going forward. Barring unforeseen developments,


the Management is hopeful of demonstrating improvement in performance of your Company. Several of the new initiatives for existing key products necessitating incremental investments and outlays referred to above are designed to make your Company continue to grow in the medium and long term.

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation of the contribution made by the employees at all levels and for their dedication and commitment to the Company throughout the year. The Directors would also like to record their thanks to Merck & Co., Inc., Kenilworth, N.J., U.S.A., the Company’s shareholders, bankers, medical professionals, hospitals, vendors, distributors, pharmacists and all customers for their valuable support and co-operation.


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Annexure 2 – Particulars of contracts/arrangement made with related parties


Information as per Rule 5(2) of Chapter XIII, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Employee Name Designation Educational qualification

Age Experience (in years)

Date of joining

Gross remuneration

paid (`)

Previous employment

and designation

K.G. ANANTHAKRISHNAN PRESIDENT & MANAGING

DIRECTOR

B.Sc. Masters in Marketing

Management

59 38 8-Dec-06 6,019,937 Pfizer Limited

NITIN S. MULGAONKAR REGIONAL MEDICAL

DIRECTOR - ASIA PACIFIC

MBBS, MD 46 19 26-Aug-02 14,318,258 German Remedies Ltd

Annexure 3 – Particulars of Employees


(Pursuant to Section 135 of the Companies Act, 2013)

Corporate Social Responsibility (CSR) for us is our commitment to discovering innovative solutions to the world’s greatest health challenges while growing our business in a sustainable way. Our Company’s parent Company viz., Merck/MSD is committed to doing well for the community at large and has implemented a CSR related project in India. CSR is embedded in all that we do. It informs our decisions and focuses the daily effort of thousands of Merck/MSD colleagues around the world as we strive to make a difference.

• CSRCommittee:

We have a Board committee (CSR Committee) that provides oversight of CSR policy execution to ensure that the CSR objectives of the Company are met. Our CSR Committee comprises:

Dr. Ajit Dangi, Chairman

Mr. K. G. Ananthakrishnan

Mr. Homi Khusrokhan

• Financialdetails:

Average net profit of the Company during last three financial years: ` 9,970,829

Prescribed CSR expenditure (2% of average net profit) : ` 199,417

Manner in which the amount was spent during the financial year 2015-16 is detailed below:

CSR activity undertaken

Sector in which the project is covered

Projects or programs (1) local area or other (Specify the state or district where the projects or programs was undertaken)

Amount outlay (budget) Project or programs Sub heads (1) Direct Expenditure on the projects of programs (2) Overheads

Cumulative expenditure upto the reporting period

Amount Spent: Direct or through implementing agency*

Amount contributed in Swach Bharat Kosh

Health-Maintenance of quality of water

The amount has been contributed to the fund set up by the Central Government in its initiative 'clean the Ganga'

` 200,000 ` 200,000 ` 200,000

* Amount contributed in Swach Bharat Kosh

• OurCSRresponsibilities

We hereby affirm that the CSR policy, as proved by the Board, has been implemented and the CSR Committee monitors the implementation of the CSR activities in compliance with our CSR objectives.

Annexure 4 – Annual report on CSR activities


Annexure 5 – Extract of Annual Return

Form No. MGT – 9

EXTRACT OF ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED MARCH 31, 2016

[Pursuant to Section 92(3)of the Companies Act, 2013 and Rule 12(1)of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i. CIN L99999MH1948PLC006199ii. Registration Date March 2, 1948iii. Name of the Company Fulford (India) Limitediv. Category/Sub-Category of the Company Public Company Limited by Shares/Indian

Non-Government Companyv. Address of the Registered office and contact

detailsPlatina, 8th Floor, Plot No. C-59, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 098 [email protected]

vi. Whether listed company Novii. Name, Address and Contact details of

Registrar and Transfer Agent, if anyLink Intime India Private Limited

C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (W), Mumbai 400 078

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the Company shall be stated:-

Sr. No.

Name and Description of main products/services

NIC Code of the Product/service

% to total turnover of the company

1 Wholesale of pharmaceutical and medical goods

46497 99%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES AS ON MARCH 31, 2016

Sr. No.

Name and Address of the Company

CIN Holding/ Subsidiary/Associate

% of shares

held

Applicable Section

1 Schering-Plough (India) Private LimitedAddress: Platina, 8th Floor, Plot No. C-59, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 098

U24230MH1989PTC053509 Subsidiary Company 100% 2(87)

2 DashtagAddress: West Hill, Hertford Road, Hoddesdon, Hertfortshire EN119BU

Holding Company 94.57% 2(46)


IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) AS ON MARCH 31, 2016

i. Category-wise Shareholding

Category of Shareholders

No. of Shares held at the beginning of the year (31.3.2015)

No. of Shares held at the end of the year (31.3.2016)

% Change during

the yearDemat Physical Total % of

Total Shares

Demat Physical Total % of Total

SharesA. Promoter1) Indiana) Individual/HUF 0 0 0 0 0 0 0 0 0b) Central Govt 0 0 0 0 0 0 0 0 0c) State Govt(s) 0 0 0 0 0 0 0 0 0d) Bodies Corp 0 0 0 0 0 0 0 0 0e) Banks/FI 0 0 0 0 0 0 0 0 0f) Any Other 0 0 0 0 0 0 0 0 0

Sub-total(A)(1):- 0 0 0 0 0 0 0 0 02) Foreigng) NRIs-Individuals 0 0 0 0 0 0 0 0 0h) Other-Individuals 0 0 0 0 0 0 0 0 0i) Bodies Corp. 2912804 10433 2923237 74.95 3677830 10433 3688263 94.57 –j) Banks/FI 0 0 0 0 0 0 0 0k) Any Other…. 0 0 0 0 0 0 0 0

Sub-total(A)(2):- 2912804 10433 2923237 74.95 3677830 10433 3688263 94.57 –B. Public Shareholding1. Institutionsa) Mutual Funds 98432 300 98732 2.53 0 300 300 0.007 (2.52)b) Banks/FI 0 450 450 0.01 0 450 450 0.01 0c) Central Govt 0 0 0 0 0 0 0 0 –d) State Govt(s) 0 0 0 0 0 0 0 0 –e) Venture Capital Funds 0 0 0 0 0 0 0 0 –f) Insurance Companies 100 0 100 0.00 100 0 100 0.002 0g) FIIs 0 0 0 0 00 0 0 0 0h) Foreign Venture Capital

Funds 0 0 0 0 0 0 0 0 0i) Others (specify)- UTI 0 600 600 0.01 0 600 600 0.01 0

Sub-total(B)(1) 98532 1350 99882 2.56 100 1350 1450 0.037 (2.25)2. Non Institutionsa) Bodies Corp.

(i) Indian 90077 100 90177 2.31 7105 100 7205 0.18 (2.13)(ii) Overseas 0 300 300 0.01 0 300 300 0.01 0

b) Individuals(i) Individual

shareholders holding nominal share capital upto ` 1 lakh 356788 53550 410338 10.52 121237 48751 169988 4.36 (6.16)

(ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh 305184 0 305184 7.82 27085 0 27085 0.69 (7.13)

c) Others (Specify) 70882 0 70882 1.82 5709 0 5709 0.15 1.67Sub-total (B)(2) 822931 53950 876881 22.48 161136 49151 210287 5.39 Total Public Shareholding (B)=(B)(1)+(B)(2) 921463 55300 976763 25.05 161236 50501 211737 5.42 –

C. Shares held by Custodian for GDRs & ADRs 0 0 0 0 0 0 0 0 –Grand Total (A+B+C) 3834267 65733 3900000 100 3839066 60934 3900000 100 –


V. Shareholding of Promoters

Sr. No.

Shareholder’s Name

Shareholding at the beginning of the year (31.3.2015)

Shareholding at the end of the year (31.3.2016)

No. of Shares

% of total Shares

of the company

% of Shares Pledged/

encumbered to total shares

No. of Shares*

% of total Shares

of the company

% of Shares Pledged/


% change in share holding

during the year

1. Dashtag 2923237 74.95 – 3692531 94.68 – 19.73

Total 2923237 74.95 – 3692531 94.68 – 19.73

* Out of these shares 4268 shares acquired by Dashtag were lying in Fulford Delisting Share Escrow Account by Morgan Stanley as on March 31, 2016, pending transfer.

VI. Change in Promoters’ Shareholding (please specify, if there is no change:

Sr. No

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares % of total shares of the Company


1. At the beginning of the year 2923237 74.95 2923237 74.95

2. Date wise Increase/Decrease in promoters Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc.

*769,294 19.73 – 19.73

3. At the end of the year 3692531 94.68 3692531 94.68

* These shares were acquired by Dashtag pursuant to the Delisting offer made to the public shareholders. Out of these shares 4268 shares acquired by Dashtag were lying in Fulford Delisting Share Escrow Account by Morgan Stanley as on March 31, 2016, pending transfer.

VII. Shareholding Pattern of top ten Shareholders (other than Directors, Promoters & Holders of GDRs & ADRs)

Sr. No.

Shareholding at the beginning of the year (01.04.2015)

Cumulative Shareholding at the end of the year (31.03.2016)

For Each of the Top 10 Shareholders No. of shares % of total shares of the Company


1. Bharat Jayantilal Patel 68279 1.75 27085 0.6945

2. Madhav Haridas Asher

Sandeep Haridas Asher

Nalinkant Chaturbhuj Asher 5369 0.1377 5369 0.1377

3. Bharat Hayagriyan Iyer 1800 0.0462 1800 0.0462

4. Dhruv Lalit Mehta 1500 0.0385 1500 0.0385

5. Mahesh Jhaveri

Ranjan Jhaveri 1600 0.0410 1500 0.0385

6. Sathya Narayana H R 1425 0.0365 1425 0.0365

7. Gitesh R Shah

Pranati G Shah 1200 0.0308 1200 0.0308

8. Patel Vijaykumar S

Patel Dharmendrakumar S 1200 0.0308 1200 0.0308

9. Banoo Adi Kanga

Adi Dorab Kanga

Khushroo Sam Dadyburjor 900 0.0231 900 0.0231

10. Darius Cavasji Shroff

Shirin Darius Shroff 900 0.0231 900 0.0231


VIII. INDEBTEDNESS

There are no secured/unsecured Loans and Deposits outstanding as on 31st March, 2016.

(` in INR)

Secured Loans excluding deposits

Unsecured Loans Deposits

Total Indebtedness

Indebtedness at the beginning of the financial year (01.04.2015)

i) Principal Amount – – – –

ii) Interest due but not paid – – – –

iii) Interest accrued but not due – – – –

Total (i+ii+iii) – – – –

Change in Indebtedness during the financial year

Addition – – – –

Reduction – – – –

Net Change – – – –

Indebtedness at the end of the financial year (31.03.2016)

i) Principal Amount – – – –

ii) Interest due but not paid – – – –

iii) Interest accrued but not due – – – –

Total (i+ii+iii) – – – –

IX. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager(` in INR)

Sr. No.

Particulars of Remuneration Name of MD/WTD/Manager (Mr. K. G. Ananthakrishnan)

Total Amount

1. Gross salary

(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961 8,729,535

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 28,800

(c) Profits in lieu of salary under Section 17(3) Income- tax Act, 1961 433,204

2. Stock Option –

3. Sweat Equity –

4. Commission

– as % of profit –

– others, specify… –

5. Others, please specify – LTA 61,601

6. Total (A)* 9,253,140

Ceiling as per the Act NIL

* The remuneration paid is within the limits approved by shareholders in the 64th Annual General Meeting of the Company.


B. Remuneration to other directors:(` in INR)

Sr. No.

Particulars of Remuneration Name of MD/WTD/Manager Total Amount

Dr. Ajit Dangi Mr. Homi Khusrokhan

Dr. V.S. Sohoni

Independent Directors

– Fee for attending board committee meetings 512,500 362,500 340,000 1,215,000

– Commission (for F.Y. 2015-16) NIL NIL NIL NIL

– Others, please specify – – – –

Total (1) 512,500 362,500 340,000 1,215,000

Other Non-Executive Directors

– Fee for attending board committee meetings – – – –

– Commission – – – –

– Others, please specify – – – –

Total (2)

Total (B)=(1+2)

Total Managerial Remuneration 512,500 362,500 340,000 1,215,000

Overall Ceiling as per the Act (@1% of profits calculated under Section 198 of the Companies Act, 2013) – NIL since there is no profit for the year

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD(` in INR)

Sr. No.

Particulars of Remuneration Key Managerial Personnel

CEO Company Secretary

CFO Total

1. Gross salary – Sachin Gaikwad* Giridhar Sanjeevi** –

(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961 – 1,126,665 819,912 –

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 – – – –

(c) Profits in lieu of salary under Section 17(3) Income- tax Act, 1961 – – – –

2. Stock Option – – – –

3. Sweat Equity – – – –

4. Commission

– as % of profit – – – –

– others, specify… – – – –

5. Others, please specify – Assignment completion bonus – 416,000 – –

6. Total – 1,542,665 819,912 –

* Resigned as Company Secretary with effect from October 14, 2015

** Resigned as Chief Financial Officer with effect from May 22, 2015


X. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES:

There were no penalties, punishment or compounding of offences during the year ended March 31, 2016.

TypeSection of the

Companies ActBrief

Description

Details of Penalty/ Punishment/

Compounding fees imposed

Authority [RD/NCLT/COURT]

Appeal made, if any

(give details)

A. COMPANY

Penalty

NonePunishment

Compounding

B. DIRECTORS

Penalty

NonePunishment

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

NonePunishment

Compounding

For and on behalf of the Board of Directors

Dr. Ajit DangiChairman

Mumbai, May 30, 2016 DIN: 02270088


INDEPENDENT AUDITORS’ REPORT

To the members of Fulford (India) Limited

Report on the Standalone Financial Statements1. We have audited the accompanying standalone financial statements of Fulford (India) Limited (the

“company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements2. The company’s Board of Directors is responsible for the matters stated in Section 134(5) of the

Companies Act, 2013 (the “Act”) with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility3. Our responsibility is to express an opinion on these standalone financial statements based on our

audit.

4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the company’s preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the company’s Directors, as well as evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion8. In our opinion and to the best of our information and according to the explanations given to us, the

aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the company as at 31st March, 2016 and its loss and its cash flows for the year ended on that date.


Independent Auditors’ Report (contd.)

Report on Other Legal and Regulatory Requirements9. As required by “The Companies (Auditor’s Report) Order, 2016”, issued by the Central Government of

India in terms of sub-section (11) of Section 143 of the Act (hereinafter referred to as the “Order”), and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the company so far as it appears from our examination of those books, except that the back-up of the books of accounts and other books and papers maintained in electronic mode has not been maintained on servers physically located in India.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our comment in paragraph (b) above that the backup of the books of accounts and other books and papers maintained in electronic mode has not been maintained on servers physically located in India.

(g) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in Annexure A.

(h) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

(i) The company has disclosed the impact, if any, of pending litigations as at 31st March, 2016 on its financial position in its standalone financial statements – Refer Note 19(a);

(ii) The company has long-term contracts as at 31st March, 2016 for which there were no material foreseeable losses. The company did not have any derivative contracts as at 31st March, 2016; and

(iii) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the company during the year ended 31st March, 2016.

For Lovelock & Lewes

Firm Registration No. 301056EChartered Accountants

Himanshu GoradiaPartner

Mumbai, 30th May, 2016 Membership No. 45668


Referred to in paragraph 10(g) of the Independent Auditors’ Report of even date to the members of Fulford (India) Limited on the standalone financial statements for the year ended 31st March, 2016

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Act1. We have audited the internal financial controls over financial reporting of Fulford (India) Limited (the

“company”) as of 31st March, 2016 in conjunction with our audit of the standalone financial statements of the company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls2. The company’s management is responsible for establishing and maintaining internal financial controls

based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors’ Responsibility3. Our responsibility is to express an opinion on the company’s internal financial controls over financial

reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting6. A company’s internal financial control over financial reporting is a process designed to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised

ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT


acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting7. Because of the inherent limitations of internal financial controls over financial reporting, including the

possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion8. In our opinion, the company has, in all material respects, an adequate internal financial controls

system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2016 based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.







ANNEXURE B TO INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 9 of the Independent Auditors’ Report of even date to the members of Fulford (India) Limited on the standalone financial statements as of and for the year ended 31st March, 20161. (a) The company is maintaining proper records showing full particulars, including quantitative details

and situation of fixed assets. (b) The fixed assets are physically verified by the management according to a phased programme

designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

(c) The company does not own any immovable properties as disclosed in Note 9 on fixed assets to the financial statements. Accordingly, the provisions of Clause 3(i)(c) of the Order are not applicable to the company.

2. The physical verification of inventory has been conducted at reasonable intervals by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of Clause 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable to the company.

4. The company has not granted any loans or made any investments or provided any guarantees or security to the parties covered under Section 185 and 186 of the Act. Accordingly, the provisions of Clause 3(iv) of the Order are not applicable to the company.

5. The company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

6. Pursuant to the rules made by the Central Government of India, the company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues in respect of provident fund and income-tax, though there has been a slight delay in a few cases and is regular in depositing undisputed statutory dues including employees’ state insurance, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of service-tax, duty of customs or duty of excise which have not been deposited on account of any dispute. The particulars of dues of income-tax, sales tax and value added tax as at 31st March, 2016 which have not been deposited on account of a dispute, are as follows:

Name of the statute

Nature of dues

Amount Rupees*

Period to which the amount relates

Forum where the dispute is pending

The Income-tax Act, 1961

Income-tax including interest, as applicable

361,626,917 Assessment Years 1997-1998, 1999-2000, 2002-2003, 2004-2005, 2006-2007, 2007-2008 and 2009-2010 to 2011-2012

Tribunal


Name of the statute

Nature of dues

Amount Rupees*

Period to which the amount relates

Forum where the dispute is pending

The Central Sales Tax Act, 1956 and Local Sales Tax Acts

Sales tax and value added tax including interest and penalty, as applicable

183,923,259 Several demands pertaining to the period 1992-1993 to 1995-1996, 2000-2001, 2002, 2003-2004, 2007-2008, 2009-2010 and 2010-2011

Appellate Authority – up to Commissioner’s level

457,199 Several demands pertaining to the period 2001-2002 and 2004-2005

Tribunal

* Net of amounts paid including under protest.

8. As the company does not have any loans or borrowings from any financial institution or bank or Government, nor has it issued any debentures as at the Balance Sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the company.

9. The company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the company.

10. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of material fraud by the company or on the company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the management.

11. The company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

12. As the company is not a Nidhi company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the company.

13. The company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

14. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the company.

15. The company has not entered into any non-cash transactions with its directors or persons connected with them. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the company.

16. The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the company.







Balance Sheet as at 31st March, 2016

Note As at

31st March, 2016 As at

31st March, 2015 ` ` ` `

Equity and LiabilitiesShareholders' Funds

Share Capital 3 39,000,000 39,000,000 Reserves and Surplus 4 1,317,792,637 1,459,234,467

1,356,792,637 1,498,234,467 Non-Current Liabilities

Long-term Provisions 5 52,622,309 51,676,309

Current LiabilitiesTrade Payables 6 Total Outstanding Dues of Micro and

Small Enterprises; and 2,748,266 2,302,646 Total Outstanding Dues of Creditors

other than Micro and Small Enterprises 207,870,011 216,502,862

210,618,277 218,805,508 Other Current Liabilities 7 68,428,082 87,205,709 Short-term Provisions 8 97,874,274 53,338,656

376,920,633 359,349,873 Total 1,786,335,579 1,909,260,649

AssetsNon-Current Assets

Fixed Assets 9 Tangible Assets 11,417,214 6,218,883 Intangible Assets 1 1

11,417,215 6,218,884 Non-Current Investments 10 – – Deferred Tax Assets (Net) 11 131,544,589 61,985,249 Long-term Loans and Advances 12 471,983,102 340,880,637 Other Non-Current Assets 13 11,223,939 10,468,522

626,168,845 419,553,292 Current Assets

Inventories 14 270,365,370 559,562,541 Trade Receivables 15 90,671,522 202,099,825 Cash and Bank Balances 16 746,341,751 657,335,777 Short-term Loans and Advances 17 33,462,165 50,787,285 Other Current Assets 18 19,325,926 19,921,929

1,160,166,734 1,489,707,357 Total 1,786,335,579 1,909,260,649

The accompanying notes are an integral part of these Financial Statements.


In terms of our report of even date For and on behalf of the Board

For Lovelock & Lewes Ajit Dangi ChairmanFirm Registration No. 301056EChartered Accountants K. G. Ananthakrishnan Managing Director

Himanshu GoradiaPartnerMembership No. 45668

Mumbai, 30th May, 2016 Mumbai, 30th May, 2016


Statement of Profit and Loss for the year ended 31st March, 2016

NoteYear ended

31st March, 2016Year ended

31st March, 2015

` ` ` `

RevenueRevenue from Operations (Gross) 22 1,578,046,380 2,342,310,361 Less: Excise Duty 810,721 1,228,835 Revenue from Operations (Net) 1,577,235,659 2,341,081,526 Other Income 23 61,672,849 142,283,280 Total Revenue 1,638,908,508 2,483,364,806

ExpensesCost of Materials Consumed 24 19,994,312 11,160,739 Purchases of Stock-in-Trade 530,408,319 1,351,098,261 Changes in Inventories of Finished Goods and Stock-in-Trade 25 286,978,556 (193,666,385)Employee Benefits Expense 26 410,517,588 480,947,356 Finance Costs 27 485,333 1,864,052 Depreciation and Amortisation Expense 1,725,732 6,003,150 Other Expenses 28 599,799,838 778,080,149 Total Expenses 1,849,909,678 2,435,487,322 (Loss)/Profit before Tax (211,001,170) 47,877,484 Tax Expense For the year Current Tax – 16,788,739 Deferred Tax (69,559,340) (3,883,333)

(69,559,340) 12,905,406 For earlier years Current Tax – 17,111,998 Minimum Alternate Tax Credit

Entitlement written off – 6,088,792 Deferred Tax – (11,343,853)

– 11,856,937

(69,559,340) 24,762,343 (Loss)/Profit for the year (141,441,830) 23,115,141 (Loss)/Earnings per Share - Basic and Diluted (36.27) 5.93 (` per Equity Share of ` 10 each) [Refer Note 45]

The accompanying notes are an integral part of these Financial Statements.






Cash Flow Statement for the year ended 31st March, 2016

Year ended 31st March, 2016


` ` ` `A. Cash flow from operating activities

Net (Loss)/Profit before Tax (211,001,170) 47,877,484 Adjustments for –Depreciation and Amortisation Expense 1,725,732 6,003,150 Interest Income (49,378,683) (84,070,804)Profit on Sale/Disposal of Fixed Assets (Net) (800,000) (6,222)Liabilities no longer required written back (10,888,598) (6,692,191)Consideration for Transfer of Business – (43,073,100)Bad Debts and Advances written off – 724,768 Provision for Doubtful Debts and Deposits (Net) 1,329,787 18,933,207 Finance Costs 485,333 1,864,052 Unrealised Exchange (Gain)/Loss (Net) (46,029) 1,958

(57,572,458) (106,315,182)Operating loss before working capital changes (268,573,628) (58,437,698)Adjustments for –Trade and Other Receivables 127,236,629 (226,000,907)Inventories 289,197,171 (201,571,339)Trade and Other Payables 36,205,938 (174,603,108)

452,639,738 (602,175,354)Cash generated from/(used in) operations 184,066,110 (660,613,052)Direct Taxes paid (Net of refund of taxes) (127,942,280) (95,644,220)Net cash from/(used in) operating activities 56,123,830 (756,257,272)

B. Cash flow from investing activitiesPurchases of Fixed Assets (including advances for capital expenditure) (6,924,063) (296,922)Proceeds from Sale of Tangible Assets 800,000 6,224 Investment in Deposits with Banks with maturity of more than 3 months (Net) (350,180,637) (871,999)Consideration for Transfer of Business [Refer Note 50] – 43,073,100 Interest received 46,253,681 88,907,277Net cash (used in)/from investing activities (310,051,019) 130,817,680

C. Cash flow from financing activitiesInterest paid (485,333) (1,864,052)Dividend paid (5,630,924) (7,883,858)Tax paid on Dividend (1,169,656) (1,325,610)Net cash used in financing activities (7,285,913) (11,073,520)Net decrease in cash and cash equivalents (261,213,102) (636,513,112)Cash and Cash Equivalents – Opening Balance 656,710,239 1,293,223,351 Cash and Cash Equivalents – Closing Balance 395,497,137 656,710,239

Notes:1. The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard – 3 on Cash Flow

Statements, notified under sub-section (3C) of Section 211 of the Companies Act, 1956 [Refer Note 2(a)].2. Previous year figures have been regrouped where necessary.







Notes forming part of the Financial Statements as at and for the year ended 31st March, 2016

1. Background Fulford (India) Limited (the ‘company’) was incorporated as C. E. Fulford (India) Limited on 2nd March, 1948. The name of the

company was subsequently changed to C. E. Fulford (India) Private Limited on 7th August, 1968, Fulford (India) Private Limited on 15th January, 1981 and Fulford (India) Limited on 17th August, 1981. The company is engaged in the business of manufacturing and trading of Pharmaceuticals. The company is a subsidiary of Merck & Co., Inc., USA.

2. Significant Accounting Policies (a) Basis of Preparation

These financial statements are prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to Section 133 of the Companies Act, 2013 (the ‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, till the Standards of Accounting or any addendum thereto are prescribed by the Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements are prepared to comply in all material aspects with the Accounting Standards notified under sub-section (3C) of Section 211 of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Act.

All assets and liabilities are classified as current or non-current as per the company’s normal operating cycle and other criteria set out in Schedule III to the Act. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.

(b) Fixed Assets

(i) Tangible Assets

Tangible assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working condition for its intended use, less accumulated depreciation/amortisation and impairment losses, if any.

Depreciation is provided on Straight Line Method, pro-rata to the period of use, over the useful lives of the assets which are lower than the useful lives based on rates prescribed under Schedule II to the Act in order to reflect the actual usage of assets. The estimates of useful lives of the assets, based on the management evaluation, have not undergone a change on account of transition to the Act. The useful lives of the assets are as follows:

Description Estimated Useful LifePlant and Equipment 6.67 or 10 yearsFurniture and Fixtures 10 yearsVehicles 5 yearsOffice Equipment 5 or 6.67 yearsComputers 3 or 5 yearsLeasehold Improvements 5 years

(ii) Intangible Assets

Intangible assets are amortised on straight line basis over their estimated useful lives. The useful lives of the assets are as follows:

Description Estimated Useful LifeComputer Software 3 years

Fixed assets costing ` 5,000 or less are fully depreciated/amortised in the year of acquisition. A nominal value of Re. 1 is assigned to fully depreciated/amortised assets.

Assessment is carried out at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. Impairment loss is provided to the extent the carrying amount of assets exceed their recoverable amount. Recoverable amount is the higher of an asset’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.


(c) Investments

Long-term Investments are stated at cost. Provision is made to recognise a decline, other than temporary, in the value of Long-term Investments. Current Investments are stated at lower of cost and fair value.

(d) Inventories

Inventories are valued at lower of cost and net realisable value. Cost is determined on First In First Out basis. Cost of work-in-progress and finished goods includes manufacturing overheads, where applicable. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(e) Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment or realisation. Monetary items denominated in foreign currency as at the Balance Sheet date are converted at the exchange rates prevailing on that date. Exchange differences are recognised in the Statement of Profit and Loss.

(f) Revenue Recognition

Sale of Products are recognised when the significant risks and rewards of ownership in the goods are transferred to the customers as per the terms of the contract and are recognised net of excise duty, sales tax, rebates and trade discounts.

Provision is made for the non-sellable returns of goods from the customers estimated on the basis of historical data of such returns. Such provision for non-sellable sales returns is reduced from sales for the year.

Sale of Services are recognised on the basis of contractual arrangements and are net of service tax.

Interest Income is recognised on a time proportion basis taking into account the amounts invested and the rate of interest.

(g) Employee Benefits

(i) Defined Contribution Plans

The company has Defined Contribution Plans for post employment benefits in the form of Provident Fund, Superannuation Fund, Employees’ State Insurance Scheme and Employees’ Deposits Linked Insurance Scheme which are administered through Government of India. Provident Fund, Superannuation Fund, Employees’ State Insurance Scheme and Employees’ Deposits Linked Insurance Scheme are classified as Defined Contribution Plans as the company has no further obligation beyond making the contributions. The company’s contributions to Defined Contribution Plans are charged to the Statement of Profit and Loss as incurred.

(ii) Defined Benefit Plan

The company has Defined Benefit Plan for post employment benefits in the form of Gratuity. Gratuity schemes of the company are administered through Life Insurance Corporation of India (LIC). Liability for Defined Benefit Plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit method. The obligations are measured as the present value of estimated future cash flows discounted at rates reflecting the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. The expected rate of return of plan assets is the company’s expectation of the average long-term rate of return expected on investments of the fund during the estimated term of the obligations. Plan assets are measured at fair value as at the Balance Sheet date.

(iii) Other Employee Benefit

The employees are also entitled to Other Long-term Benefit in the form of Compensated Absences as per the company’s policy. The liability for Compensated Absences is provided on the basis of valuation, as at Balance Sheet date, carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit method.

(iv) Termination benefits are recognised as an expense as and when incurred.

(v) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised in the Statement of Profit and Loss in the period in which they arise.

Notes forming part of the Financial Statements as at and for the year ended 31st March, 2016 (contd.)


(h) Taxes on Income

Current tax is determined as the amount of tax payable in respect of estimated taxable income for the year.

Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. In situations where the company has unabsorbed depreciation and/or carry forward of tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable income.

Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income-tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit entitlement asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income-tax during the specified period.

(i) Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight line basis over the period of lease.

(j) Provisions and Contingent Liabilities

The company recognises a provision when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote, no provision or disclosure is made.

(k) Use of Estimates

The preparation of financial statements in accordance with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities as at the Balance Sheet date and the results of operations during the reporting period. The actual results could differ from these estimates. Any revision to such accounting estimates is recognised in the accounting period in which such revision takes place.

As at 31st March, 2016

As at

31st March, 2015

` `3. Share Capital

Authorised5,000,000 Equity Shares of ` 10 each 50,000,000 50,000,000 Issued, Subscribed and Paid-up3,900,000 Equity Shares of ` 10 each fully paid-up 39,000,000 39,000,000


As at

31st March, 2015

No. of Shares ` No. of Shares `(a) Reconciliation of Number of Shares

Number of shares outstanding as at the beginning of the year 3,900,000 39,000,000 3,900,000 39,000,000 Number of shares outstanding as at the end of the year 3,900,000 39,000,000 3,900,000 39,000,000

(b) The company has only one class of shares i.e. Equity Shares having a face value of ` 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

(c) Of the above, 3,688,263 (Previous year - 2,923,237) shares are held by Dashtag, UK, the holding company.

(d) List of shareholders holding more than 5% shares as at the Balance Sheet date.



Name of the Shareholder As at

31st March, 2016 As at

31st March, 2015

No. of Shares % of holding No. of Shares % of holding

Dashtag, UK 3,688,263 94.57 2,923,237 74.95


As at

31st March, 2015

` ` ` `

4. Reserves and Surplus

Capital Reserve 51,000 51,000

Securities Premium Reserve 394,849,452 394,849,452

General Reserve 684,374,143 684,374,143

Surplus in Statement of Profit and Loss

Balance as at the beginning of the year 379,959,872 363,864,387

(Loss)/Profit for the year (141,441,830) 23,115,141

238,518,042 386,979,528

Less: Appropriations

Proposed Dividend – 5,850,000

Tax on Proposed Dividend – 1,169,656

Balance as at the end of the year 238,518,042 379,959,872

1,317,792,637 1,459,234,467

5. Long-term Provisions

Provision for Employee Benefits - Provision for Compensated Absences [Refer Note 41(C)] 29,205,000 28,259,000

Provision for Fringe Benefits Tax [Net of Payments of ` 33,393,000 (Previous year ` 33,393,000)] 1,561,164 1,561,164

Provision for Demand under the Drugs (Prices Control) Order, 1979 [Refer Note 29] 19,462,000 19,462,000

Provision for Sales Tax [Refer Note 29] 2,394,145 2,394,145

52,622,309 51,676,309




As at

31st March, 2015

` ` ` `

6. Trade Payables

Total Outstanding Dues of Micro and Small Enterprises [Refer Note 48]; and 2,748,266 2,302,646

Total Outstanding Dues of Creditors other than Micro and Small Enterprises 207,870,011 216,502,862

210,618,277 218,805,508

7. Other Current Liabilities

Unpaid Dividends* 844,614 625,538

Statutory Dues 19,398,103 29,191,459

Employee Benefits Payable 19,508,198 23,667,968

Advances from Customers 19,077,167 30,767,803

Other Payables 9,600,000 2,952,941

68,428,082 87,205,709

*There are no amounts due for payment to the Investor Education and Protection Fund under Section 205C of the Companies Act, 1956 as at the year end. Section 125 of the Act which corresponds to Section 205C of the Companies Act, 1956 has not yet been enforced.

8. Short-term Provisions

Provision for Employee Benefits

Provision for Gratuity [Refer Note 41(B)] 24,247,000 11,875,000

Provision for Compensated Absences [Refer Note 41(C)] 4,428,000 4,886,000

28,675,000 16,761,000

Proposed Dividend – 5,850,000

Tax on Proposed Dividend – 1,169,656

Provision for Non-Sellable Sales Returns [Refer Note 29] 69,199,274 29,558,000

97,874,274 53,338,656



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As at31st March, 2015

` ` ` `

10. Non-Current Investments

(Long-term, Trade, at cost, Unquoted) Investment in Equity Instruments of wholly owned

Subsidiary 10,150 fully paid-up Equity Shares of ` 10 each of

Schering-Plough (India) Private Limited 101,500 101,500 Less: Provision for Diminution in the Value 101,500 101,500

– –

11. Deferred Tax Assets (Net)

Deferred Tax Assets Depreciation/Amortisation 8,186,163 10,112,263 Provision for Doubtful Debts and Deposits 10,325,486 9,885,818 Provision for Employee Benefits 19,136,864 14,884,963 Provision for Non-Sellable Sales Returns 22,879,356 9,772,762 Provision for Diminution in the Value of Long-term

Investment 33,559 33,559 Unabsorbed Depreciation and Tax Loss 55,024,984 6,767,766 Others 15,958,177 10,528,118

131,544,589 61,985,249 Less: Deferred Tax Liability – –

131,544,589 61,985,249

12. Long-term Loans and Advances

(Unsecured, Considered Good unless otherwise stated)

Security Deposits Considered Good 62,787,340 60,685,990 Considered Doubtful 532,595 3,446,763

63,319,935 64,132,753 Less: Provision for Doubtful Deposits 532,595 3,446,763

62,787,340 60,685,990

Other Deposits Considered Good 12,667,445 11,403,610 Considered Doubtful 20,149,923 18,900,052

32,817,368 30,303,662 Less: Provision for Doubtful Deposits 20,149,923 18,900,052

12,667,445 11,403,610

Advances recoverable in cash or in kind or for value to be received 1,574,652 1,779,652

Current Taxation [Net of Provision of ` 732,312,548 (Previous year ` 732,312,548)] 394,953,665 267,011,385

471,983,102 340,880,637





` ` ` `

13. Other Non-Current Assets

Margin Money Deposits with more than 12 months maturity 9,285,899 9,105,262

Interest accrued but not due on Deposits 1,938,040 1,363,260

11,223,939 10,468,522

14. Inventories (At lower of cost and net realisable value)

Raw Materials 6,902,047 8,907,290

Finished Goods 18,207,856 6,164,824

Stock-in-Trade [including in transit - Nil (Previous year ` 20,616,707)] 244,693,657 543,715,245

Packing Materials 561,810 775,182

270,365,370 559,562,541

15. Trade ReceivablesOutstanding for a period exceeding six months from the date they were due for payment

Unsecured, Considered Good 1,184,869 1,032,492

Unsecured, Considered Doubtful 10,547,212 7,553,128

11,732,081 8,585,620

Less: Provision for Doubtful Debts 10,547,212 7,553,128

1,184,869 1,032,492

Others

Unsecured, Considered Good 89,486,653 201,067,333

90,671,522 202,099,825

16. Cash and Bank BalancesCash and Cash Equivalents

Balances with Banks

Current Accounts 25,929,994 16,102,476

Deposit Accounts (less than 3 months maturity) 369,000,000 640,145,893

394,929,994 656,248,369

Cheques on Hand 567,143 461,870

395,497,137 656,710,239

Other Bank Balances

Long-term Deposits with maturity more than 3 months but less than 12 months 350,000,000 –

Unpaid Dividend Accounts 844,614 625,538

350,844,614 625,538

746,341,751 657,335,777





` ` ` `

17. Short-term Loans and Advances(Unsecured, Considered Good)

Advances recoverable in cash or in kind or for value to be received 33,462,165 50,787,285

18. Other Current AssetsOther Receivables from Related Parties 9,717,323 12,863,548

Interest accrued but not due on Deposits 9,608,603 7,058,381

19,325,926 19,921,929

19. Contingent Liabilities(a) Claims against the company not acknowledged

as debts

Income-tax Matters – Matters decided against the company in respect of which the company has preferred an appeal 711,749,121 477,180,401

Fringe Benefits Tax Matter 128,412 128,412

Sales tax Matters 1,794,910 1,794,910

Employee related Matters 7,164,291 7,356,925

Others 277,500 277,500

(b) Guarantees issued by Banks on behalf of the company 13,040,304 15,955,097

Notes:(i) Future cash outflows in respect of (a) above are determinable only on receipt of judgements/decisions pending with various

authorities/forums and/or final outcome of the matters.(ii) Future cash outflows in respect of (b) above are dependent on the future performance of the obligations by the company

and/or other parties.

20. Commitments (a) Estimated amount of contracts remaining to be executed on capital account and not provided for ` 24,800 (Previous year

` 1,225,398).

(b) Estimated amount of contracts remaining to be executed for Purchases of Stock-in-Trade ` 522,943,798 (Previous year - Nil).



` ` ` `

21. Proposed DividendProposed Dividend – 5,850,000

Number of shares outstanding as at the end of the year 3,900,000 3,900,000

Dividend per Share (` per Equity Share of ` 10 each) – 1.50





` ` ` `

22. Revenue from OperationsSale of Products 1,425,928,174 2,154,995,218 Sales of Services 152,118,206 187,315,143

1,578,046,380 2,342,310,361 Less: Excise Duty 810,721 1,228,835 Revenue from Operations (Net) 1,577,235,659 2,341,081,526

23. Other IncomeInterest Income 49,378,683 84,070,804 Profit on Sale/Disposal of Fixed Assets (Net) 800,000 6,222 Net Gain on Foreign Currency Transactions and Translation 112,648 – Liabilities no longer required written back 10,888,598 6,692,191 Consideration for Transfer of Business [Refer Note 50] – 43,073,100 Miscellaneous Income [including - Nil (Previous year ` 8,367,460) for prior periods] 492,920 8,440,963

61,672,849 142,283,280

24. Cost of Materials ConsumedRaw Materials Consumed

Opening Stock 8,907,290 974,453 Add: Purchases 13,295,193 15,345,017

22,202,483 16,319,470 Less: Closing Stock 6,902,047 8,907,290

15,300,436 7,412,180 Packing Materials Consumed

Opening Stock 775,182 803,065 Add: Purchases 4,480,504 3,720,676

5,255,686 4,523,741 Less: Closing Stock 561,810 775,182

4,693,876 3,748,559

19,994,312 11,160,739

25. Changes in Inventories of Finished Goods and Stock-in-TradeOpening Stock

Finished Goods 6,164,824 15,359,322 Stock-in-Trade 543,715,245 340,854,362

549,880,069 356,213,684 Closing Stock

Finished Goods 18,207,856 6,164,824 Stock-in-Trade 244,693,657 543,715,245

262,901,513 549,880,069

286,978,556 (193,666,385)





` ` ` `

26. Employee Benefits ExpenseSalaries and Bonus 338,993,699 401,215,002 Contribution to Provident and Other Funds [Refer Note 41(A)] 34,268,651 44,267,063 Gratuity [Refer Note 41(B)] 16,090,000 12,019,000 Compensated Absences 5,890,604 5,405,000 Staff Welfare Expenses 15,274,634 18,041,291

410,517,588 480,947,356

27. Finance CostsInterest on Income-tax – 1,463,328 Others 485,333 400,724

485,333 1,864,052

28. Other ExpensesConsumption of Stores 3,346,261 4,476,991 Electricity 2,908,848 4,387,400 Rent [Refer Note 44] 39,452,038 45,254,915 Repairs and Maintenance

Buildings 4,420,111 2,736,666 Plant and Equipment 41,109 51,814 Others 1,665,056 1,771,210

6,126,276 4,559,690 Insurance 761,404 897,423 Rates and Taxes

Excise Duty – 256,451 Sales tax 11,491,503 21,359,317 Others 255,984 5,512,151

11,747,487 27,127,919 Manufacturing Charges 794,840 895,204 Quality Control and Quality Assurance 546,282 1,244,209 Legal and Professional Charges 61,731,905 60,061,673 Auditors’ Remuneration [Refer Note 36] 4,003,503 4,635,938 Directors’ Commission and Sitting Fees 1,351,948 2,038,967 Travelling and Conveyance 67,344,316 82,489,183 Printing and Stationery 1,328,338 1,501,083 Postage and Telephone 12,855,459 16,174,112 Advertisement and Sales Promotion 107,195,576 198,859,231 Freight and Forwarding 23,759,143 37,246,165 Warehousing Charges 97,585,127 88,176,404 Cash Discount 13,728,482 20,257,867 Commission on Sales 11,478,170 26,601,082 Bad Debts and Advances written off – 724,768 Provision for Doubtful Debts and Deposits (Net) [including - Nil (Previous year ` 8,367,460) for prior periods] 1,329,787 18,933,207 Net Loss on Foreign Currency Transactions and Translation – 81,185 Expenditure towards Corporate Social Responsibility (CSR) Activities [Refer Note 47] 200,000 150,000 Services Availed from Group Companies 122,689,522 122,274,120 Miscellaneous Expenses 7,535,126 9,031,413

599,799,838 778,080,149



Provision for Non-Sellable Sales Returns

Provision for Demand under the Drugs (Prices Control) Order, 1979

Year ended 31st March,

2016


2015


2016


2015

` ` ` `

29. Movement in ProvisionsBalance as at the beginning of the year 29,558,000 15,183,000 19,462,000 19,462,000 Provision made during the year 69,199,274 29,558,000 – – Amounts used during the year 29,558,000 15,183,000 – – Balance as at the end of the year 69,199,274 29,558,000 19,462,000 19,462,000

Provision for Sales Tax



` `

Balance as at the beginning of the year 2,394,145 1,194,145 Provision made during the year – 1,200,000 Amounts used during the year – – Balance as at the end of the year 2,394,145 2,394,145

30. Excise duty relating to difference between closing stock and opening stock and other adjustments is included in Note 28 - Other Expenses. Excise duty relating to Sale of Products is reduced from Gross Sale of Products.

31. Consumption of Raw MaterialsYear ended

31st March, 2016 Year ended

31st March, 2015

` ` Steroids 11,054,828 4,056,146 Emollients & Protectives 107,542 37,060 Others 4,138,066 3,318,974

15,300,436 7,412,180

% ` % `

Imported 72.25 11,054,828 54.72 4,056,146 Indigenous 27.75 4,245,608 45.28 3,356,034

100.00 15,300,436 100.00 7,412,180 Note:Consumption of Raw Materials represents consumption by third parties under contract with the company and consumption in respect of samples.

32. Sale of ProductsYear ended


31st March, 2015

` `Formulations

Creams and Ointments 987,895,414 999,965,223 Injectables 123,242,466 612,903,529 Tablets – 145,714,908 Capsules 105,864,342 145,089,209 Liquids 208,925,952 251,322,349

1,425,928,174 2,154,995,218





` `

33. Purchases of Stock-in-TradeFormulations

Creams and Ointments 341,616,889 403,224,103

Injectables 15,518,070 626,823,670

Tablets – 30,559,633

Capsules 87,687,646 141,286,583

Liquids 85,585,714 149,204,272

530,408,319 1,351,098,261

34. Opening Stock of Finished Goods and Stock-in-TradeFormulations


Injectables 260,526,405 164,275,437

Tablets 1,696,116 6,914,306

Capsules 55,730,258 34,475,536

Liquids 50,512,952 27,914,064

549,880,069 356,213,684

35. Closing Stock of Finished Goods and Stock-in-Trade@Formulations


Injectables 5,060 260,526,405

Tablets 8,699 1,696,116

Capsules 29,290,285 55,730,258

Liquids 35,808,299 50,512,952

262,901,513 549,880,069

@ Net of date expired stocks, damages, in-transit breakages, etc.

36. Auditors’ RemunerationAudit Fees 2,719,375 2,668,550

Tax Audit Fees 830,125 814,610

Other Services 342,000 1,011,240

Reimbursement of Expenses 112,003 141,538

4,003,503 4,635,938

37. CIF Value of ImportsRaw Materials 8,753,893 8,273,104

Packing Materials 3,222,870 1,530,308

Stock-in-Trade 148,242,830 802,070,930





` `

38. Expenditure in Foreign CurrencyTravelling 3,850,701 3,756,041

Advertisement and Sales Promotion 737,241 4,823,767

Others – 131,524

39. Earnings in Foreign ExchangeSale of Services 27,260,920 23,474,734

40. Remittance of Dividend to Non-Resident Shareholders

Number of Shareholders 1 1

Number of Equity Shares held 3,548,715 2,923,237

Amount remitted (`) 5,323,073 5,846,474

Year to which the dividend related 31st March, 2015 31st March, 2014


2016


2015

` `

41. Employee Benefits(A) Defined Contribution Plans

The company has recognised the following amounts in the Statement of Profit and Loss for the year:

(i) Contribution to Provident Fund 15,746,239 20,959,690

(ii) Contribution to Superannuation Fund 18,248,303 23,024,138

(iii) Contribution to Employees’ State Insurance Scheme 7,293 14,115

(iv) Contribution to Employees’ Deposits Linked Insurance Scheme 266,816 269,120

34,268,651 44,267,063

Gratuity Gratuity

(B) Defined Benefit Plan

Valuation in respect of Gratuity has been carried out by independent actuary, as at the Balance Sheet date, based on the following assumptions:

(a) Discount Rate (per annum) 7.80% 7.80%

(b) Rate of increase in Compensation Levels 10.00% 9.00%

(c) Rate of Return on Plan Assets 8.35% 9.25%

(d) Normal Retirement Age 60 60

(e) Expected average remaining working lives of employees in number of years 21 21



2016


2015

Gratuity Gratuity

` `

(i) Changes in the Present Value of Obligation(a) Opening Present Value of Obligation 80,460,645 70,162,645 (b) Interest Cost 5,600,000 5,935,000 (c) Past Service Cost – – (d) Current Service Cost 6,216,000 6,194,000 (e) Curtailment Cost/(Credit) – – (f) Settlement Cost/(Credit) – – (g) Benefits Paid (17,327,000) (12,011,000)(h) Actuarial Loss 7,476,000 10,180,000 (i) Transfer Out (52,000) – (j) Closing Present Value of Obligation 82,373,645 80,460,645

(ii) Changes in the Fair Value of Plan Assets(a) Opening Fair Value of Plan Assets 68,585,645 78,133,645 (b) Expected Return on Plan Assets 5,715,000 6,679,000 (c) Actuarial Loss (2,513,000) (4,360,000)(d) Employers’ Contributions 3,718,000 144,000 (e) Benefits Paid (17,327,000) (12,011,000)(f) Transfer Out (52,000) – (g) Closing Fair Value of Plan Assets 58,126,645 68,585,645

(iii) Percentage of each Category of Plan Assets to total Fair Value of Plan Assets as at the year end

Administered by Life Insurance Corporation of India 100% 100%

(iv) Amount recognised in the Balance Sheet(a) Present Value of Obligation as at the year end 82,373,645 80,460,645 (b) Fair Value of Plan Assets as at the year end 58,126,645 68,585,645 (c) Liability recognised in the Balance Sheet 24,247,000 11,875,000 (d) Experience (Loss)/Gain adjustments on Plan Liabilities (1,098,000) 3,702,000 (e) Experience Gain adjustments on Plan Assets (2,513,000) (4,360,000)(f) Actuarial Loss due to change of assumptions (6,378,000) (13,882,000)

Period ended 31st March,

Year ended 31st December,


2014 2012 2011Gratuity Gratuity Gratuity

` ` `

(a) Present Value of Obligation as at the period/year end 70,162,645 63,315,645 53,789,645

(b) Fair Value of Plan Assets as at the period/year end 70,162,645 68,974,799 62,684,799

(c) Asset recognised in the Balance Sheet – (5,659,154) (8,895,154)

(d) Experience (Loss)/Gain adjustments on Plan Liabilities (8,209,000) 288,000 (3,593,000)

(e) Experience Gain adjustments on Plan Assets – 213,000 164,000

(f) Actuarial Gain/(Loss) due to change of assumptions 4,113,000 1,483,000 942,000




2016


2015

Gratuity Gratuity

` `(v) Expenses recognised in the Statement of Profit and Loss

(a) Current Service Cost 6,216,000 6,194,000

(b) Past Service Cost – –

(c) Interest Cost 5,600,000 5,935,000

(d) Expected Return on Plan Assets (5,715,000) (6,679,000)

(e) Curtailment Cost/(Credit) – –

(f) Settlement Cost/(Credit) – –

(g) Net Actuarial Loss 9,989,000 14,540,000

(h) Employees’ Contribution – –

(i) Total Expenses recognised in the Statement of Profit and Loss@ 16,090,000 19,990,000

@ Previous year - Excluding the effect of excess of fair value of plan assets over Present Value of Obligation as at 31st March, 2014 of ` 7,971,000 on account of excess contribution made by the company in the period ended 31st March, 2014

(C) Other Long-term Employee Benefit

The liability for Compensated Absences as determined by independent actuary as at the Balance Sheet date is ` 33,633,000 (Previous year ` 33,145,000).

42. The company has only one reportable business segment which is “Pharmaceuticals” and one reportable geographical segment which is “within India”. Accordingly, no separate disclosures of segment information are required.

43. Related Party Disclosures

(A) Enterprises where control exists

(a) Ultimate Holding Company Merck & Co., Inc., USA(b) Holding Company Dashtag, UK (c) Subsidiary Company Schering-Plough (India) Private Limited, India

(B) Other Related Parties with whom the company had transactions during the year

(a) Fellow Subsidiaries MSD International GMBH, SingaporeMSD Pharmaceuticals Private Limited, IndiaOrganon (India) Private Limited, IndiaMerck Sharp & Dohme Corp., USA Merck Sharp & Dohme Asia Pacific Services Pte. Limited, SingaporeMerck Sharp & Dohme (Asia) Limited, Hong Kong*Merck Sharp & Dohme B. V., NetherlandsMSD Korea Limited, Korea*Merck Sharp & Dohme (New Zealand) Limited, New Zealand*MSD-Sun FZ LLC, UAE*

(b) Key Management Personnel K. G. Ananthakrishnan - Managing DirectorGiridhar Sanjeevi (up to 22nd May, 2015) - Chief Financial Officer

*No transactions during the current year



(C) Disclosure of transactions between the company and related parties and outstanding balances as at the year end:

Year ended31st March, 2016


` ` ` `

(a) Holding Company

Dividend paid 5,323,073 5,846,474

(b) Fellow Subsidiaries

Purchases of Stock-in-Trade

Merck Sharp & Dohme B. V. 148,242,830 802,070,930

Purchases of Raw Materials

MSD International GMBH 8,753,893 8,273,104

Services Rendered

Merck Sharp and Dohme Corp. 4,312,382 8,028,271

MSD Pharmaceuticals Private Limited 37,114,167 60,015,874

Organon (India) Private Limited 87,743,119 103,824,535


MSD-Sun FZ LLC – 2,814,799

152,118,206 187,315,143

Services Availed



122,689,522 122,274,120

Recovery of Expenses

Merck Sharp & Dohme Corp. 3,444,317 1,703,305

MSD International GMBH 428,689 1,597,296

Merck Sharp & Dohme Asia Pacific Services Pte. Limited 13,265 –

Merck Sharp & Dohme (New Zealand) Limited – 203,650

MSD Korea Limited – 203,650

3,886,271 3,707,901

Reimbursement of Expenses

Merck Sharp & Dohme (Asia) Limited – 92,079





` ` ` `Balances as at the year end -

Outstanding Receivables



MSD Pharmaceuticals Private Limited – 2,945,383



9,708,623 12,856,048

Outstanding Payable


MSD Pharmaceuticals Private Limited 2,307,822 –

54,620,886 58,607,726

(c) Subsidiary Company

Rent Income 1,200 1,200

Balance as at the year end -

Outstanding Receivable 8,700 7,500

(d) Key Management Personnel

Remuneration$

K. G. Ananthakrishnan 9,570,900 10,101,506

Giridhar Sanjeevi@ 819,912 7,328,040

10,390,812 17,429,546

Sale of Fixed Asset

K. G. Ananthakrishnan 900,000 –

$ Excludes Provision for Employee Benefits and Stock Options.@ Represents amount reimbursed to MSD Pharmaceuticals Private Limited by way of cross charging arrangement.

This amount is also included under ‘Services Availed’ in Note 43(C)(b).


2016


2015 ` `

44. Disclosures for Operating Leases(a) Lease payments recognised in the Statement of Profit and Loss 39,452,038 45,254,915

(b) Significant Leasing Arrangements

The company has significant operating leases for office premises and vehicles. These lease arrangements range for a period between 4 years and 9 years, which include both cancellable and non-cancellable leases. Most of the leases are renewable for further period on mutually agreeable terms and also include escalation clauses.

(c) Future minimum lease payments under non-cancellable agreements

(i) Not later than one year 35,760,757 34,057,864

(ii) Later than one year and not later than five years 97,168,954 132,929,710



45. (Loss)/Earnings per Share Basic (loss)/earnings per share has been calculated by dividing (loss)/profit for the year attributable to equity shareholders by the

weighted average number of equity shares outstanding during the year. The company has not issued any potential equity shares and accordingly, the basic earnings per share and diluted earnings per share are the same. (Loss)/Earnings per share has been computed as under:


2016


2015(Loss)/Profit for the year (`) (141,441,830) 23,115,141 Weighted average number of Shares 3,900,000 3,900,000 (Loss)/Earnings per Share (` per Equity Share of ` 10 each) - Basic and Diluted (36.27) 5.93

46. The foreign currency outstanding balances that have not been hedged by any derivative instrument or otherwise as at the Balance Sheet date are as follows:

As at 31st March, 2016 As at 31st March, 2015

Particulars

Amount inForeign

CurrencyAmount in

`

Amount inForeign

CurrencyAmount in

`Receivables

USD 95,051 6,324,671 114,892 7,171,306

47. Expenditure towards Corporate Social Responsibility (CSR) ActivitiesYear ended31st March,

2016


2015` `

(a) Gross amount required to be spent by the company during the year – – (b) Amount spent during the year on: 200,000 150,000

Year ended 31st March, 2016 Year ended 31st March, 2015` ` ` `

Particulars In cashYet to be paid

in cash In cashYet to be paid in

cash(i) Construction/acquisition of any asset – – – –(ii) On purposes other than (i) above 200,000 – 150,000 –

48. Disclosures as required by the Micro, Small and Medium Enterprises Development Act, 2006 are as under:

Year ended31st March,

2016


2015` `

(a) The principal amount and the interest due thereon remaining unpaid to suppliers (i) Principal 1,320,911 1,291,729 (ii) Interest due thereon 1,427,355 1,010,917

2,748,266 2,302,646 (b) (i) The delayed payments of principal amount paid beyond the appointed date

during the entire accounting year 5,593,371 13,076,071 (ii) Interest actually paid under Section 16 of the Micro, Small and Medium Enterprises

Development Act, 2006 – – (c) (i) Normal Interest accrued during the year, for all the delayed payments, as per the

agreed terms – – (ii) Normal Interest payable for the year of delay in making payment, as per the

agreed terms – – (d) (i) Total Interest accrued during the year 416,438 232,673

(ii) Total Interest accrued during the year and remaining unpaid 416,438 232,673 (e) Included in (d) above is ` 291,609 (Previous year ` 21,639) being interest on amounts outstanding as at the beginning of the

accounting year. The above information and that given in Note 6 - Trade Payables regarding Micro and Small Enterprises has been determined to

the extent such parties have been identified on the basis of information available with the company.



49. In the year ended 31st December, 2006, the company had raised ` 402,500,000 by issuing 700,000 equity shares of ` 10 each at a premium of ` 565 per share to its promoters, Dashtag, UK. Of the aforesaid balance, the company has utilised ` 138,813,974 (Previous year ` 109,286,718) towards business expansion up to 31st March, 2016. The remaining amount of ` 263,686,026 continue to be invested in fixed deposits with banks pending utilisation of the same.

50. On 1st October, 2014, the company entered into a ‘Business Transfer Agreement’ with Bayer Pharmaceuticals Private Limited (“Bayer”), consequent to which the Consumer Care Business and Rx Product Business comprising of Alaspan, Polaramine and Tinaderm were transferred to Bayer with effect from 1st January, 2015 for a consideration of ` 43,073,100.

51. Disclosures for Employee Share based Payments. The Institute of Chartered Accountants of India has issued a Guidance Note on “Accounting for Employee Share based Payments”,

which is applicable to employee share based payment plans, the grant date in respect of which falls on or after 1st April, 2005. Some of the employees of the company are entitled to an option to purchase certain shares of the ultimate holding company, Merck & Co., Inc., USA under an option agreement entered into between the ultimate holding company and the employee. The stock option scheme of the ultimate holding company is being managed and administered by the ultimate holding company for its own benefit and the company is not compensating its ultimate holding company for the grants made to the employees and accordingly, there are no costs being reflected in the financial statements. The details of employee share based payments are not readily available with the company and hence, the same are not disclosed.

There are two schemes under which employees are granted stock options: (A) A stock option scheme (‘ESOP’) as per which the employee has the right to purchase a fixed number of shares of the ultimate

holding company at a fixed price for a fixed period of time. The incentive to the employee is the value employee realises from a stock option and is dependent on the current value of the stock being higher than the option price.

(B) Restricted Stock Award Unit (‘RSU’) is a grant valued in terms of the ultimate holding company stock, but the ultimate holding company stock is not issued at the time of the grant. After a recipient of a unit satisfies the vesting requirement, the ultimate holding company will distribute shares or the cash equivalent of the number of shares used to value the unit. No payment is required under the restricted stock award.

52. On 25th April, 2014, the promoter of the company, Dashtag (“Acquirer”), notified the company of its intention to make a voluntary delisting offer (“Delisting Offer”) to the public shareholders of the company in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (“Delisting Regulations”) to acquire 976,763 equity shares, representing 25.05% of the paid-up equity share capital of the company held by the public shareholders of the company and consequently delist the equity shares of the company from the BSE Limited. The Acquirer, vide letter dated on 1st December, 2014, had informed the company that on account of the abnormal spurt in the share price, the Acquirer has decided not to make the public announcement of the Delisting Offer at this time.

In the current year, vide public announcement dated 29th May, 2015 and offer letter dated 29th May, 2015, the Acquirer made the Delisting Offer to the public shareholders. The public shareholders of the company were invited to submit bids pursuant to a Reverse Book Building process made available through the electronic system of the BSE Limited from 3rd June, 2015 to 9th June, 2015. Vide a public announcement dated 17th July, 2015, the Acquirer accepted the discovered price of ` 2,400 per Share (“Exit Price”). Pursuant to the successful offer announcement, the Acquirer acquired 625,928 shares from public shareholders of the company at the Exit Price. On 30th July, 2015, the Acquirer, made a public announcement, informing the Residual Shareholders of the terms and conditions of the Exit Offer. The Exit Offer period opened on 7th August, 2015 and will close on 6th August, 2016. Following the closure of the Delisting Offer and in accordance with the Delisting Regulations, the company applied for the delisting of its Shares from the BSE and pursuant to the same, the shares of the company were delisted from with effect from 7th August, 2015 and no longer traded on the BSE with effect from 31st July, 2015 as per notice of BSE Limited dated 27th July, 2015. The Acquirer has successfully acquired a total of 805,535 shares from public shareholders of the company till 30th April, 2016.

53. Previous period figures have been regrouped where necessary.

Signatures to Notes 1 to 53






Schering-Plough (India) Private Limited

Schering-Plough (India) Private Limited ANNUAL REPORT 2015-16 61

The Directors hereby present the Twenty-Seventh Annual Report together with the Audited Accounts of the Company for the financial year ended March 31, 2016.

OPERATIONS AND FINANCIAL RESULTS

During the year under review, the expenses incurred by the Company amounted to a loss of ` 15,575/- as against a loss of ` 15,245/- in the previous year and the accumulated loss as of the year end stands at ` 227,790/-.

CHANGE IN NATURE OF BUSINESS

During the year, there was no change in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments, affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

CURRENT YEAR AND PROSPECTS

The Company would continue to explore business opportunities during the financial year 2016-17.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY’S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Company does not have any subsidiary/joint venture/associate companies.

FIXED DEPOSIT

The Company has not accepted any deposits from the public during the year under review. Also, there are no fixed deposits outstanding as on that date.

AUDITORS’ REPORT

The Auditors’ Report contains an observation on Note 8 forming part of financial statements of the Company for the year ended March 31, 2016 (“said note”). The said note states that the accumulated losses have exceeded the net worth of the Company.

With regard to above observation, the Board of Directors would like to clarify that the holding Company Fulford (India) Limited is interested in keeping the Company running and in the opinion of the Board of Directors, the Company thereby continues to be a going concern.

The Auditors’ Report also states that the financial statements of the Company have been prepared on a going concern basis for the aforesaid reasons given by the Board of Directors.

LOANS, GUARANTEES OR INVESTMENTS

The Company has not provided any guarantee or made any investment during the year under review.

TRANSACTIONS WITH RELATED PARTIES

The information as required under Section 134 of the Act read with Companies (Accounts) Rules, 2014 in respect of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 is annexed herewith and forms a part of this report as Annexure 1.

RISK MANAGEMENT POLICY

The Company is governed by the risk management policy of the holding Company.

MANAGERIAL REMUNERATION

None of the directors is in receipt of any remuneration from the Company.

DIRECTORS’ REPORT


EMPLOYEE REMUNERATION

There are no employees on the payroll of the Company and hence there is nothing to report under this section.

STATUTORY AUDITORS

M/s. K. J. Sheth & Associates, Chartered Accountants, were appointed as statutory auditors to hold office for a period of five years commencing from the Financial Year 2014-15 subject to ratification of appointment by members at every Annual General Meeting held thereafter. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed thereunder, it is proposed to ratify the appointment of M/s. K. J. Sheth & Associates, Chartered Accountants to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General meeting for the financial year ended March 31, 2017.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) they 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 at the end of the financial year and of the profit and loss of the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS

There were no executive directors serving on the Board of Directors of the Company during the year under review.

Mr. Sameer Tamhane (DIN: 02748108) retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 4 (Four) times on the below mentioned dates viz., May 19, 2015August 10, 2015November 6, 2015February 17, 2016

Details of Directors as on March 31, 2016 and their attendance at the Board meetings and Annual General Meeting (“AGM”) during the financial year ended March 31, 2016 are given below:

Name of the Director No. of Meetings held No. of Meetings attended Attendance at the AGM

Mr. Giridhar Sanjeevi 4 4 Yes

Mr. Sameer Tamhane 4 4 Yes

PROCESS OF AGENDA CIRCULATION

A detailed agenda for the meeting of the Board of Directors is prepared and is circulated in physical form to the Board of Directors.

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure 2 in the prescribed Form MGT-9, which forms part of this report.



1. CONSERVATION OF ENERGY

(i) Energy conservation measures taken in the recent past: Nil

(ii) Additional investments and proposals for reduction of energy consumption being implemented: Nil

(iii) Impact of measure (i) and (ii) above for reduction of energy consumption and consequent impact on the cost of production of goods: Nil

(iv) Total energy consumption and energy consumption per unit of production:


1. Electricity

a. Purchased Not Applicable –— Units –— Total Amount–— Rate / Unit

b. Own Generation Not Applicable

i. Through Diesel Generator

Units

Units per ltr. of Diesel Oil

Cost / Unit (`)

ii. Through Steam

Turbine/generator Not Applicable

Units

Units per ltr. of fuel oil / gas

Cost / Unit

2. Coal (Specify quality and where used) Not Applicable

Quantity (Tonnes)

Total Cost

Average Rate

3. Furnace Oil Not Applicable

Quantity (K. Ltrs)

Total Cost

Average Rate / Litre

4. Others / Internal Generation Not Applicable

Quantity

Total Cost

Rate / Unit

B. Consumption per unit of Production Standards (If any)

2015-16 2014-15

Products (with details) Unit Not Applicable

Electricity

Furnace Oil

Coal (Specify quality)

Others (Specify)

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO


2. TECHNOLOGY ABSORPTION Research & development (R&D) (a) Specific areas in which R&D carried out by the Company : Nil

(b) Benefits derived as a result of the above R&D: N.A.

(c) Future Plan of action: Nil

(d) Expenditure on R&D:

(a) Capital – Nil

(b) Recurring – Nil

(c) Total – Nil

(d) Total R&D expenditure as a percentage of total turnover – Nil

Technology absorption, adaptation and innovation 1. Efforts, in brief, made towards technology absorption, adaptation and innovation: Nil

2. Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc.: N.A.

3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:

a. Technology Imported: N.A.

b. Year of Import: N.A.

c. Has technology been fully absorbed: N.A.

d. If not fully absorbed, areas where this has not taken place, reasons thereof and future plans of action: N.A.

3. FOREIGN EXCHANGE EARNINGS AND OUTGO (i) Activities relating to exports, initiatives taken to increase exports, development of new export markets for

products and services and export plans.

Presently, the Company does not export any of the products and there are no significant foreign exchange earnings.

(ii) Total Foreign exchange earned and used ` in Lakhs (a) Total Foreign exchange earned: Nil (B) Total Foreign exchange used: (i) On import of raw materials / finished goods Nil (ii) On import of capital goods, spares and components Nil (iii) Expenditure in foreign currencies for business travels, subscription, honorarium,

participants and others Nil (iv) Remittance during the year in foreign currency on account of dividend Nil (v) Royalty and Technical know-how Nil

INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial controls in place.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act as well as Companies (Corporate Social Responsibility) Rules, 2014 are not applicable to the Company.

VIGIL MECHANISM

The provisions of Section 177(9) regarding establishment of vigil mechanism are not applicable to the Company.

ACKNOWLEDGEMENT

The Directors place on record their appreciation for the co-operation received from the holding Company.

For and on behalf of the Board of Directors

Sameer Tamhane Chairman

Mumbai, May 20, 2016 DIN: 02748108



Annexure 1 – Particulars of contracts / arrangement made with related parties

(Pursuant to Clause (h) of Sub-section (3) of Section 134 of the Companies Act, 2013, and Rule 8(2) of the Companies (Accounts) Rules, 2014 – AOC – 2)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in Sub-section (1) of Section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arm’s length basis:

There were no contracts or arrangements or transactions entered in to during the year ended March 31, 2016, which were not at arm’s length basis.

2. Details of material contracts or arrangement or transactions at arm’s length basis:

The Details of material contracts or arrangement or transactions at arm’s length basis for the year ended March 31, 2016 are as follows:

Name of related party

Nature of relation

Nature of contracts / arrangement /transactions

Duration of contracts/ arrangement /transactions

Salient terms of contracts / arrangement /transactions

Value of transactions `

Date of approval by the Board, if any

Amount paid as advance, if any


Holding Company

No Agreement One Year Reimbursement of rent expenses

1,200 May 19, 2015

—

ANNEXURES TO THE BOARD’S REPORT


Annexure 2 – Extract of Annual Return

Form No. MGT – 9

EXTRACT OF ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED ON MARCH 31, 2016

[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i. CIN U24230MH1989PTC053509ii. Registration Date September 15, 1989iii. Name of the Company Schering-Plough (India) Private Limitediv. Category / Sub-Category of the Company Company Limited by shares /

Indian Non-Government Companyv. Address of the Registered office and contact details Platina, 8th Floor, Plot No. C-59,

G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai [email protected]

vi. Whether listed company Novii. Name, Address and Contact details of Registrar and

Transfer Agent, if anyN.A.

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

Sr. No.

Name and Description of main products/services

NIC Code of the Product/service

% to total turnover of the Company

Not Applicable — —

There was no business transacted during the year under review.

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

Sr. No.

Name and Address of the Company

CIN/GLN Holding / Subsidiary /Associate

% of shares held

Applicable Section

1. Fulford (India) LimitedAddress: Platina, 8th Floor, Plot No. C-59, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai 400098

L99999MH1948PLC006199 Holding Company

100% 2(87)

IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY) AS ON MARCH 31, 2016:

The Company is wholly owned by Fulford (India) Limited which holds the entire outstanding shares including one share in the name of a nominee to fulfill minimum member requirement under the Companies Act, 2013.

i) Category-wise Shareholding




% change during the year


Shares


Shares

A. Promoters (1) Indian 0 0 0 0 0 0 0 0 0 0a) Individual/HUF 0 0 0 0 0 0 0 0 0 0b) Central Govt. or State

Govt.0 0 0 0 0 0 0 0 0 0

c) Bodies Corporate - 10150 10150 100 - 10150 10150 100 - -d) Bank/FI 0 0 0 0 0 0 0 0 0 0e) Any other 0 0 0 0 0 0 0 0 0 0

SUB TOTAL: (A)(1) 0 10150 10150 100 0 10150 10150 100 0 0






% change during the year


Shares


Shares(2) Foreigna) NRI-Individuals 0 0 0 0 0 0 0 0 0 0b) Other Individuals 0 0 0 0 0 0 0 0 0 0c) Bodies Corp. 0 0 0 0 0 0 0 0 0 0d) Banks/FI 0 0 0 0 0 0 0 0 0 0e) Any other… 0 0 0 0 0 0 0 0 0 0SUB TOTAL: (A)(2) 0 0 0 0 0 0 0 0 0 0Total Shareholding of Promoter (A)=(A)(1)+(A)(2)

0 10150 10150 100 0 10150 10150 100 0 0

B. PUBLIC SHAREHOLDING

(1) Institutions a) Mutual Funds 0 0 0 0 0 0 0 0 0 0b) Banks/FI 0 0 0 0 0 0 0 0 0 0c) Central Govt. 0 0 0 0 0 0 0 0 0 0d) State Govt. 0 0 0 0 0 0 0 0 0 0e) Venture Capital Fund 0 0 0 0 0 0 0 0 0 0f) Insurance Companies 0 0 0 0 0 0 0 0 0 0g) FIIS 0 0 0 0 0 0 0 0 0 0h) Foreign Venture

Capital Funds0 0 0 0 0 0 0 0 0 0

i) Others (specify) 0 0 0 0 0 0 0 0 0 0SUB TOTAL: (B)(1):(2) Non Institutions a) Bodies corporate i) Indian 0 0 0 0 0 0 0 0 0 0ii) Overseas 0 0 0 0 0 0 0 0 0 0b) Individuals i) Individual

shareholders holding nominal share capital upto ` 1 lakhs

0 0 0 0 0 0 0 0 0 0

ii) Individuals shareholders holding nominal share capital in excess of ` 1 lakhs

0 0 0 0 0 0 0 0 0 0

c) Others (specify) 0 0 0 0 0 0 0 0 0 0SUB TOTAL: (B)(2) 0 0 0Total Public Shareholding (B)=(B)(1)+(B)(2)

0

C. Shares held by Custodian for GDRs & ADRs

0 0 0

Grand Total (A+B+C) 0 10150 10150 100 0 10150 10150 100 0 0

ii) Shareholding of Promoters

Sr. No.

Shareholder’s Name Shareholding at the beginning of the year (31.03.2015)

Shareholding at the end of the year (31.03.2016)

% change in shareholding

during the year

No. of Shares

% of total Shares of the

Company

% of Shares Pledged /


No. of Shares

% of total Shares of the

Company



1. Fulford (India) Limited 10150 100% — 10150 100% — —Total 10150 100% — 10150 100% — —

iii) Change in Promoters’ Shareholding

Sr. No.

Shareholding at the beginning of the Year


No. of Shares % of total shares of the Company

No of shares % of total shares of the Company

At the beginning of the year

There was no change in promoter’s shareholding during the financial year

Date wise increase/decrease in Promoters Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc)At the end of the year


iv) Shareholding Pattern of Top Ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs)

Sr. No.



At the beginning of the year No. of shares % of total shares of the Company


Date wise increase/decrease in Promoters Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc)

The Company is wholly owned by Fulford (India) Limited which holds the entire outstanding shares including one share in the name of a nominee to fulfill

minimum number requirement under the Companies Act, 2013At the end of the year (or on the date of separation, if separated during the year)

v) Shareholding of Directors and Key Managerial Personnel

Sr. No.



No. of Shares % of total shares of the Company


At the beginning of the year

Not Applicable

Date wise increase/decrease in Promoters Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc.)At the end of the year

V. INDEBTEDNESS There are no secured/unsecured Loans and Deposits outstanding as on 31st March, 2016.

Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the financial year (01.04.2015)i) Principal Amount – – – –ii) Interest due but not paid – – – –iii) Interest accrued but not due – – – –Total (i+ii+iii) – – – –Change in Indebtedness during the financial yearAddition – – – –Reduction – – – –Net Change – – – –Indebtedness at the end of the financial year (31.03.2016)i) Principal Amount – – – –ii) Interest due but not paid – – – –iii) Interest accrued but not due – – – –Total (i+ii+iii) – – – –

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager: There were no executive directors as well as Managing Director serving on the Board of Directors of the

Company during the year under review. Also, no Manager appointed/serving as per the provisions of the Companies Act, 2013

Sr. No.

Particulars of Remuneration Total Amount

1 Gross Salary(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961 NIL(b) Value of perquisites under Section 17(2) Income Tax Act, 1961 NIL(c) Profits in lieu of salary under Section 17(3) Income Tax Act, 1961 NIL

2 Stock Options NIL3 Sweat Equity NIL4 Commission

– as % of profit NIL– others, specify…. NIL

5 Others, please specify NILTotal (A) NIL



B. Remuneration to other Directors:

1. Independent Directors

Particulars of Remuneration Name of Director Total Amount

Fee for attending Board/Committee Meetings

Not Applicable– Commission

– Others, please specify

Total (B)(1)

2. Other Non-Executive Directors

Particulars of Remuneration Name of Director Total Amount

Fee for attending Board/Committee Meetings

Not Applicable

– Commission

– Others, please specify

Total (B)(2)

Total (B)=(B)(1)+(B)(2)

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD:

Sr. No.

Particulars of Remuneration Key Managerial Personnel Total Amount

CEO Company Secretary

CFO Total

1 Gross Salary

Not Applicable

(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961.

(b) Value of perquisites u/s 17(2) of the Income Tax Act, 1961

(c) Profits in lieu of salary under Section 17(3) of the Income Tax Act, 1961

2 Stock Option

3 Sweat Equity

4 Commission

as % of profit

others, specify

5 Others, please specify

Total

VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES:

Type Section of the Companies Act

Brief Description

Details of Penalty /

Punishment / Compounding fees imposed

Authority [RD / NCLT /

COURT]

Appeal made, if any (give

details)



A. COMPANY

Penalty

NonePunishment

Compounding

B. DIRECTORS

Penalty

NonePunishment

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

NonePunishment

Compounding



To the Members of Schering-Plough (India) Pvt. Ltd.

Report on the Financial Statements1. We have audited the accompanying financial statements of Schering Plough (India) Pvt. Ltd. (the

‘company’), which comprise the Balance Sheet as at 31st March, 2016 and the Statement of Profit and Loss, and the Cash Flow Statement for the year 1st April, 2015 to 31st March, 2016 and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the

Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements to give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standard specified under the Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgement and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken in account the provisions of the Act, the accounting and audit standards and matter which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

6. An Audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal financial control relevant to the Company’s preparation of the financial statement that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion whether the company has in place adequate internal financial controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company’s Directors’, as well as evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.


aforesaid financial statements give the information required by the Act in the manner so required and



give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.

Emphasis of Matters9. We draw attention to the following matters in the Notes to the financial statements:

(a) Note 8 in the financial statements which indicates that the company has accumulated losses and its net worth has been fully/substantially eroded, the company has incurred a net loss/net cash loss during the current and previous years and, the Company’s current liabilities exceeded its current assets as at the balance sheet date. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note.

Report on Other Legal and Regulatory Requirements10. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief are necessary for the purpose of the audit;

(b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of written representations received from the directors as on 31st March, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164(2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A;

(g) With respect to the matters to be included in the Auditor’s report in accordance with Rule 11 of the Companies (Audit & Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanation given to us:

(i) The company has no pending litigation at 31st March, 2016 on its financial position in its financial statements;

(ii) The company has no long-term contracts as at 31st March, 2016. The Company did not have derivative contracts as at 31st March, 2016; and

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2016.

For K. J. Sheth & AssociatesFirm Registration No. 118598W

Chartered Accountants

Kirit ShethProprietor




Referred to the Independent Auditors’ Report of even date to the members of Schering Plough (India) Pvt. Ltd. on the standalone financial statements for the year ended 31-03-2016

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act1. We have audited the internal financial controls over financial reporting of Schering Plough (India)

Pvt. Ltd. (“the Company”) as of 31st March,2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls2. The Company’s management is responsible for establishing and maintaining internal financial controls

based on the [internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India (ICAI).] These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors’ Responsibility3. Our responsibility is to express an opinion on the Company’s internal financial controls over financial

reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the“Guidance Note”) and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.


5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.


reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company;



and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.



Opinion8. In our opinion, the Company has, in all material respects, an adequate internal financial controls

system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31-03-2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For K. J. Sheth & AssociatesFirm Registration No. 118598W

Chartered Accountants

Kirit ShethProprietor



NoteAs at

31st March, 2016As at

31st March, 2015

` ` ` `

EQUITY AND LIABILITIES

Shareholders’ Funds

Share Capital 2 101,500 101,500

Reserves and Surplus 3 (227,790) (212,215)

(126,290) (110,715)

Current Liabilities

Other Current Liabilities 4 130,851 115,276

TOTAL 4,561 4,561

ASSETS

Long-term Loans and Advances 5 4,561 4,561

Current Assets

Cash and Bank Balances 6 – –

TOTAL 4,561 4,561


For K. J. Sheth & AssociatesFirm Registration No. 118598WChartered Accountants Sameer Tamhane Chairman

Kirit Sheth Giridhar Sanjeevi DirectorProprietor

Membership No. 037824

Mumbai, May 20, 2016 Mumbai, May 20, 2016

Balance Sheet as at 31st March, 2016

SCHERING-PLOUGH (INDIA) PRIVATE LIMITED



NoteYear ended


31st March, 2015

` ` ` `

EXPENSES

Other Expenses 7 15,575 15,245

Total Expenses 15,575 15,245

Loss Before Tax (15,575) (15,245)

Loss for the year (15,575) (15,245)






Statement of Profit and Loss for the year ended on 31st March, 2016


Year ended 31st March, 2016 Year ended 31st March, 2015

` ` ` `

A. Cash Flow from Operating Activities

Operating Loss before tax (15,575) (15,245)

Adjustment for –

Trade and other receivables – –

Trade and other payables 15,575 15,245

15,575 15,245

Cash used in operations – –

Direct taxes paid – –

Net Cash used in operating activities – –

B. Cash Flow from Investing Activities

Net cash used in Investing Activities – –

C. Cash Flow from Financing Activities

Net cash used in Financing Activities – –

Net decrease in Cash and Cash Equivalents (A+B+C) – –

Cash and Cash Equivalents Opening – –

Cash and Cash Equivalents Closing – –

Net decrease in cash and cash equivalents – –

Cash Flow Statement for the year ended on 31st March, 2016









1. Significant Accounting Policies

(a) Basis of Preparation

The accounts have been prepared under historical cost concept on an accrual basis.

2. Share CapitalAs at 31st March, 2016 As at 31st March, 2015

` `Authorised50,000 Equity Shares of ` 10/- each 500,000 500,000

Issued, Subscribed and Paid-up10,150 Equity Shares of ` 10/- each fully paid-up 101,500 101,500

As at 31st March, 2016 As at 31st March, 2015No. of Shares ` No. of Shares `

(a) Reconciliation of Number of Shares Number of shares outstanding as at the beginning of

the year 10,150 101,500 10,150 101,500

Number of shares outstanding as at the end of the year 10,150 101,500 10,150 101,500

(b) The Company has only one class of shares i.e. Equity Shares having a face value of ` 10 each. Each shareholder is eligible for one vote per share held.

(c) The total shares 10,150 are held by Fulford (India) Limited, the holding company.(d) List of shareholders holding more than 5% shares as at the Balance Sheet date.

Name of the ShareholderAs at 31st March, 2016 As at 31st March, 2015

No. of Shares % of holding No. of Shares % of holding Fulford (India) Limited 10,150 100.00 10,150 100.00

As at 31st March, 2016 As at 31st March, 2015` `

3. Reserves and SurplusSurplus in Statement of Profit and Loss Balance as at the beginning of the year (212,215) (196,970) (Loss) for the year (15,575) (15,245)

Balance as at the end of the year (227,790) (212,215)

4. Other Current LiabilitiesLiabilities for expenses 130,851 115,276

5. Long-term Loan and Advances(Unsecured, Considered Good unless otherwise stated)Advance Tax Considered Good 4,561 4,561 Considered Doubtful – –

4,561 4,561

6. Cash and Bank BalancesCash and Cash Equivalents Current Accounts – –

– –

Notes forming part of the Financial Statements as at and for the year ended on 31st March, 2016


As at 31st March, 2016 As at 31st March, 2015` `

7. Other Expenses

Rent 1,200 1,200

Auditors’ Remuneration 14,375 14,045

15,575 15,245

8. Accumulated losses have exceeded the net worth of the Company. However, the holding Company Fulford (India) Limited is interested in keeping the Company running. In the opinion of the Directors, the Company thereby continues to be a going concern.

9. Taxation (a) The Company has incurred book tax losses during the year, the Company does not have any liability towards current taxation

for the year.

(b) The deferred tax assets arising due to carry forward losses have not been recognized, as there is no virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which deferred tax assets can be realised.

10. Earning per Share Calculation Year ended31st March, 2016


Loss used as numerator in calculating Basic / Diluted Earnings per share (15,575) (15,245)

Number of Equity Share 10,150 10,150

Earning per Share (1.53) (1.50)

11. Related Party Disclosure

Relationship

Schering Plough (India) Ltd., is wholly owned subsidiary of Fulford (India) Limited

Related Party Transaction

Rent paid to Fulford (India) Limited 1,200 1,200

Balance at the period end

Payable 8,700 7,500


12. Amount due to Small Scale Industrial Undertakings ` Nil (Previous year ` Nil)

13. Disclosures required under Schedule VI - Part II - Para 4 are not applicable to the Company.

14. Previous year figures have been regrouped/reclassified where necessary.




Kirit Sheth Giridhar Sanjeevi DirectorProprietorMembership No. 037824



Notes forming part of the Financial Statements as at and for the year ended on 31st March 2016



To the members of Fulford (India) Limited

Report on the Consolidated Financial Statements1. We have audited the accompanying consolidated financial statements of Fulford (India) Limited

(“hereinafter referred to as the holding company”) and its subsidiary (the holding company and its subsidiary together referred to as “the Group” – Refer Note 1 to the attached consolidated financial statements), comprising of the consolidated Balance Sheet as at 31st March, 2016, the consolidated Statement of Profit and Loss, the consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information prepared based on the relevant records (hereinafter referred to as “the Consolidated Financial Statements”).

Management’s Responsibility for the Consolidated Financial Statements2. The holding company’s Board of Directors is responsible for the preparation of these consolidated

financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as the “Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with accounting principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. The holding company’s Board of Directors is also responsible for ensuring accuracy of records including financial information considered necessary for the preparation of consolidated financial statements. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which has been used for the purpose of preparation of the consolidated financial statements by the Directors of the holding company.

Auditors’ Responsibility3. Our responsibility is to express an opinion on these consolidated financial statements based on our

audit. While conducting the audit, we have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

4. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the holding company’s preparation of the consolidated financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the holding company’s Directors, as well as evaluating the overall presentation of the consolidated financial statements.

6. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph 8 of the Other Matter paragraph below,



is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.


aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31st March, 2016 and their consolidated loss and their consolidated cash flows for the year ended on that date.

Other Matter8. We did not audit the financial statements of subsidiary whose financial statements reflect total assets

of ` 4,561 and net assets of ` (126,290) as at 31st March, 2016 and total revenue of ` Nil, net loss of ` 15,575 and net cash flows amounting to ` Nil for the year ended on that date, as considered in the consolidated financial statements. These financial statements have been audited by other auditors whose report has been furnished to us by the management and our opinion on the consolidated financial statements insofar as it relates to the amounts and disclosures included in respect of this subsidiary and our report in terms of sub-section (3) of Section 143 of the Act insofar as it relates to the aforesaid subsidiary, is based solely on the report of the other auditors.

Our opinion on the consolidated financial statements and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matter with respect to our reliance on the work done and the report of the other auditors.

Report on Other Legal and Regulatory Requirements9. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.

(b) In our opinion, proper books of account as required by law maintained by the holding company and its subsidiary included in the group incorporated in India including relevant records relating to preparation of the consolidated financial statements have been kept so far as it appears from our examination of those books and records of the holding company and the report of the other auditors, except that the back-up of the books of accounts and other books and papers of the holding company maintained in electronic mode has not been maintained on servers physically located in India.

(c) The consolidated Balance Sheet, the consolidated Statement of Profit and Loss and the consolidated Cash Flow Statement dealt with by this report are in agreement with the relevant books of account maintained by the holding company and its subsidiary included in the Group incorporated in India including relevant records relating to the preparation of the consolidated financial statements.

(d) In our opinion, the consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors of the holding company as on 31st March, 2016 taken on record by the Board of Directors of the holding company and report of the statutory auditors of its subsidiary company incorporated in India, none of the directors of the Group companies is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our comment in paragraph (b) above that the backup of the books of accounts and



other books and papers of the holding company maintained in electronic mode has not been maintained on servers physically located in India.

(g) With respect to the adequacy of the internal financial controls over financial reporting of the holding company and its subsidiary company incorporated in India and the operating effectiveness of such controls, refer to our separate report in Annexure A.

(h) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The consolidated financial statements disclose the impact, if any, of pending litigations as at 31st March, 2016 on the consolidated financial position of the Group – Refer Note 18(a) to the consolidated financial statements;

(ii) The Group has long-term contracts as at 31st March, 2016 for which there were no material foreseeable losses. The Group did not have any derivative contracts as at 31st March, 2016; and

(iii) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the holding company and its subsidiary company during the year ended 31st March, 2016.







Referred to in paragraph 9(g) of the Independent Auditors’ Report of even date to the members of Fulford (India) Limited on the consolidated financial statements for the year ended 31st March, 2016

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Act1. In conjunction with our audit of the consolidated financial statements of the company as of and for the

year ended 31st March, 2016, we have audited the internal financial controls over financial reporting of Fulford (India) Limited (hereinafter referred to as “the holding company”) and its subsidiary company, which are companies incorporated in India, as of that date.

Management’s Responsibility for Internal Financial Controls2. The respective Board of Directors of the holding company and its subsidiary company, which are

companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors’ Responsibility3. Our responsibility is to express an opinion on the company’s internal financial controls over financial

reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the ICAI and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Companies Act, 2013 to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.


5. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their report referred to in the Other Matter paragraph below is sufficient and appropriate to provide a basis for our audit opinion on the company’s internal financial controls system over financial reporting.


reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect


Annexure A to Independent Auditors’ Report (contd.)

the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.



Opinion8. In our opinion, the holding company and its subsidiary company, which are companies incorporated

in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2016 based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Other Matter9. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness

of the internal financial controls over financial reporting insofar as it relates to subsidiary company, which is the company incorporated in India, is based on the corresponding report of the auditors of such company incorporated in India. Our opinion is not qualified in respect of this matter.






Consolidated Balance Sheet as at 31st March, 2016

NoteAs at


31st March, 2015` ` ` `

Equity and LiabilitiesShareholders’ Funds Share Capital 3 39,000,000 39,000,000 Reserves and Surplus 4 1,317,666,347 1,459,123,752

1,356,666,347 1,498,123,752 Non-Current Liabilities Long-term Provisions 5 52,622,309 51,676,309 Current Liabilities Trade Payables 6 Total Outstanding Dues of Micro

and Small Enterprises; and 2,748,266 2,302,646 Total Outstanding Dues of

Creditors other than Micro and Small Enterprises 207,992,162 216,610,638

210,740,428 218,913,284 Other Current Liabilities 7 68,428,082 87,205,709 Short-term Provisions 8 97,874,274 53,338,656

377,042,784 359,457,649 Total 1,786,331,440 1,909,257,710

AssetsNon-Current Assets Fixed Assets 9 Tangible Assets 11,417,214 6,218,883 Intangible Assets 1 1

11,417,215 6,218,884 Deferred Tax Assets (Net) 10 131,544,589 61,985,249 Long-term Loans and Advances 11 471,987,663 340,885,198 Other Non-Current Assets 12 11,223,939 10,468,522

626,173,406 419,557,853 Current Assets Inventories 13 270,365,370 559,562,541 Trade Receivables 14 90,671,522 202,099,825 Cash and Bank Balances 15 746,341,751 657,335,777 Short-term Loans and Advances 16 33,462,165 50,787,285 Other Current Assets 17 19,317,226 19,914,429

1,160,158,034 1,489,699,857 Total 1,786,331,440 1,909,257,710

The accompanying notes are an integral part of these Consolidated Financial Statements.







Consolidated Statement of Profit and Loss for the year ended 31st March, 2016

NoteYear ended


31st March, 2015` ` ` `

RevenueRevenue from Operations (Gross) 21 1,578,046,380 2,342,310,361 Less: Excise Duty 810,721 1,228,835 Revenue from Operations (Net) 1,577,235,659 2,341,081,526 Other Income 22 61,671,649 142,282,080 Total Revenue 1,638,907,308 2,483,363,606

ExpensesCost of Materials Consumed 23 19,994,312 11,160,739 Purchases of Stock-in-Trade 530,408,319 1,351,098,261 Changes in Inventories of Finished Goods and Stock-in-Trade 24 286,978,556 (193,666,385)Employee Benefits Expense 25 410,517,588 480,947,356 Finance Costs 26 485,333 1,864,052 Depreciation and Amortisation Expense 1,725,732 6,003,150 Other Expenses 27 599,814,213 778,094,194 Total Expenses 1,849,924,053 2,435,501,367 (Loss)/Profit before Tax (211,016,745) 47,862,239 Tax Expense For the year Current Tax – 16,788,739 Deferred Tax (69,559,340) (3,883,333)

(69,559,340) 12,905,406 For earlier years Current Tax – 17,111,998 Minimum Alternate Tax Credit

Entitlement written off – 6,088,792 Deferred Tax – (11,343,853)

– 11,856,937

(69,559,340) 24,762,343 (Loss)/Profit for the year (141,457,405) 23,099,896 (Loss)/Earnings per Share – Basic and Diluted (36.27) 5.92 (` per Equity Share of ̀ 10 each)[Refer Note 35]

The accompanying notes are an integral part of these Consolidated Financial Statements.






Consolidated Cash Flow Statement for the year ended 31st March, 2016



` ` ` `

A. Cash flow from operating activities

Net (Loss)/Profit before Tax (211,016,745) 47,862,239

Adjustments for –

Depreciation and Amortisation Expense 1,725,732 6,003,150

Interest Income (49,378,683) (84,070,804)

Profit on Sale/Disposal of Fixed Assets (Net) (800,000) (6,222)

Liabilities no longer required written back (10,888,598) (6,692,191)

Consideration for Transfer of Business – (43,073,100)

Bad Debts and Advances written off – 724,768

Provision for Doubtful Debts and Deposits (Net) 1,329,787 18,933,207

Finance Costs 485,333 1,864,052

Unrealised Exchange (Gain)/Loss (Net) (46,029) 1,958

(57,572,458) (106,315,182)

Operating loss before working capital changes (268,589,203) (58,452,943)

Adjustments for –

Trade and Other Receivables 127,237,829 (225,999,707)

Inventories 289,197,171 (201,571,339)

Trade and Other Payables 36,220,313 (174,589,063)

452,655,313 (602,160,109)

Cash generated from/(used in) operations 184,066,110 (660,613,052)

Direct Taxes paid (Net of refund of taxes) (127,942,280) (95,644,220)

Net cash from/(used in) operating activities 56,123,830 (756,257,272)

B. Cash flow from investing activities

Purchases of Fixed Assets (including advances for capital expenditure) (6,924,063) (296,922)

Proceeds from Sale of Tangible Assets 800,000 6,224

Investment in Deposits with Banks with maturity of more than 3 months (Net) (350,180,637) (871,999)

Consideration for Transfer of Business [Refer Note 50] – 43,073,100

Interest received 46,253,681 88,907,277

Net cash (used in)/ from investing activities (310,051,019) 130,817,680



Consolidated Cash Flow Statement for the year ended 31st March, 2016 (contd.)



` ` ` `

C. Cash flow from financing activities

Interest paid (485,333) (1,864,052)

Dividend paid (5,630,924) (7,883,858)

Tax paid on Dividend (1,169,656) (1,325,610)

Net cash used in financing activities (7,285,913) (11,073,520)

Net decrease in cash and cash equivalents (261,213,102) (636,513,112)

Cash and Cash Equivalents – Opening Balance 656,710,239 1,293,223,351

Cash and Cash Equivalents – Closing Balance 395,497,137 656,710,239

Notes:

1. The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard – 3 on Cash Flow Statements, notified under sub-section (3C) of Section 211 of the Companies Act, 1956 [Refer Note 2(a)].

2. Previous year figures have been regrouped where necessary.






1. Background (a) Fulford (India) Limited (the ‘company’) was incorporated as C. E. Fulford (India) Limited on 2nd March, 1948. The name of

the company was subsequently changed to C. E. Fulford (India) Private Limited on 7th August, 1968, Fulford (India) Private Limited on 15th January, 1981 and Fulford (India) Limited on 17th August, 1981. The company is engaged in the business of manufacturing and trading of Pharmaceuticals. The company is a subsidiary of Merck & Co., Inc., USA.

(b) The consolidated financial statements have been prepared in accordance with Accounting Standard (AS) 21 – Consolidated Financial Statements under sub-section (3C) of Section 211 of the Companies Act, 1956 [Refer Note 2(a)]. The particulars in respect of subsidiary considered in the consolidated financial statements are as follows –

Name of the Company Country of Incorporation Percentage of OwnershipSchering-Plough (India) Private Limited India 100%

2. Significant Accounting Policies (a) Basis of Preparation These consolidated financial statements are prepared in accordance with the generally accepted accounting principles in

India under the historical cost convention on accrual basis. Pursuant to Section 133 of the Companies Act, 2013 (the ‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, till the Standards of Accounting or any addendum thereto are prescribed by the Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these consolidated financial statements are prepared to comply in all material aspects with the Accounting Standards notified under sub-section (3C) of Section 211 of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Act.

All assets and liabilities are classified as current or non-current as per the company’s normal operating cycle and other criteria set out in Schedule III to the Act. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.

(b) Fixed Assets (i) Tangible Assets Tangible assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working

condition for its intended use, less accumulated depreciation/amortisation and impairment losses, if any. Depreciation is provided on Straight Line Method, pro-rata to the period of use, over the useful lives of the assets which

are lower than the useful lives based on rates prescribed under Schedule II to the Act in order to reflect the actual usage of assets. The estimates of useful lives of the assets, based on the management evaluation, have not undergone a change on account of transition to the Act. The useful lives of the assets are as follows:

Description Estimated Useful Life Plant and Equipment 6.67 or 10 years Furniture and Fixtures 10 years Vehicles 5 years Office Equipment 5 or 6.67 years Computers 3 or 5 years Leasehold Improvements 5 years

(ii) Intangible Assets Intangible assets are amortised on straight line basis over their estimated useful lives. The useful lives of the assets are

as follows:

Description Estimated Useful Life Computer Software 3 years

Fixed assets costing ` 5,000 or less are fully depreciated/amortised in the year of acquisition. A nominal value of ` 1 is assigned to fully depreciated/amortised assets.

Assessment is carried out at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. Impairment loss is provided to the extent the carrying amount of assets exceed their recoverable

Notes forming part of the Consolidated Financial Statements as at and for the year ended 31st March, 2016


amount. Recoverable amount is the higher of an asset’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

(c) Investments Long-term Investments are stated at cost. Provision is made to recognise a decline, other than temporary, in the value of

Long-term Investments. Current Investments are stated at lower of cost and fair value.

(d) Inventories Inventories are valued at lower of cost and net realisable value. Cost is determined on First In First Out basis. Cost of work-

in-progress and finished goods includes manufacturing overheads, where applicable. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(e) Foreign Currency Transactions Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Gains and losses

arising out of subsequent fluctuations are accounted for on actual payment or realisation. Monetary items denominated in foreign currency as at the Balance Sheet date are converted at the exchange rates prevailing on that date. Exchange differences are recognised in the Statement of Profit and Loss.

(f) Revenue Recognition Sale of Products are recognised when the significant risks and rewards of ownership in the goods are transferred to the

customers as per the terms of the contract and are recognised net of excise duty, sales tax, rebates and trade discounts. Provision is made for the non-sellable returns of goods from the customers estimated on the basis of historical data of such

returns. Such provision for non-sellable sales returns is reduced from sales for the year. Sale of Services are recognised on the basis of contractual arrangements and are net of service tax. Interest Income is recognised on a time proportion basis taking into account the amounts invested and the rate of interest.

(g) Employee Benefits

(i) Defined Contribution Plans The company has Defined Contribution Plans for post employment benefits in the form of Provident Fund,

Superannuation Fund, Employees’ State Insurance Scheme and Employees’ Deposits Linked Insurance Scheme which are administered through Government of India. Provident Fund, Superannuation Fund, Employees’ State Insurance Scheme and Employees’ Deposits Linked Insurance Scheme are classified as Defined Contribution Plans as the company has no further obligation beyond making the contributions. The company’s contributions to Defined Contribution Plans are charged to the Statement of Profit and Loss as incurred.

(ii) Defined Benefit Plan The company has Defined Benefit Plan for post employment benefits in the form of Gratuity. Gratuity schemes of

the company are administered through Life Insurance Corporation of India (LIC). Liability for Defined Benefit Plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit method. The obligations are measured as the present value of estimated future cash flows discounted at rates reflecting the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. The expected rate of return of plan assets is the company’s expectation of the average long-term rate of return expected on investments of the fund during the estimated term of the obligations. Plan assets are measured at fair value as at the Balance Sheet date.

(iii) Other Employee Benefit The employees are also entitled to Other Long-term Benefit in the form of Compensated Absences as per the company’s

policy. The liability for Compensated Absences is provided on the basis of valuation, as at Balance Sheet date, carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit method.

(iv) Termination benefits are recognised as an expense as and when incurred.

(v) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised in the Statement of Profit and Loss in the period in which they arise.

Notes forming part of the Consolidated Financial Statements as at and for the year ended 31st March, 2016 (contd.)


(h) Taxes on Income Current tax is determined as the amount of tax payable in respect of estimated taxable income for the year. Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences,

being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. In situations where the company has unabsorbed depreciation and/or carry forward of tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable income.

Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income-tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit entitlement asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income-tax during the specified period.

(i) Leases Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are

classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight line basis over the period of lease.

(j) Provisions and Contingent Liabilities The company recognises a provision when there is a present obligation as a result of a past event, it is probable that an

outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote, no provision or disclosure is made.

(k) Use of Estimates The preparation of financial statements in accordance with the generally accepted accounting principles requires the

management to make estimates and assumptions that affect the reported amounts of assets and liabilities as at the Balance Sheet date and the results of operations during the reporting period. The actual results could differ from these estimates. Any revision to such accounting estimates is recognised in the accounting period in which such revision takes place.



` `

3. Share CapitalAuthorised5,000,000 Equity Shares of ̀ 10 each 50,000,000 50,000,000 Issued, Subscribed and Paid-up3,900,000 Equity Shares of ̀ 10 each fully paid-up 39,000,000 39,000,000



No. of Shares ` No. of Shares `

(a) Reconciliation of Number of SharesNumber of shares outstanding as at the beginning of the year 3,900,000 39,000,000 3,900,000 39,000,000 Number of shares outstanding as at the end of the year 3,900,000 39,000,000 3,900,000 39,000,000

(b) The company has only one class of shares i.e. Equity Shares having a face value of ` 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

(c) Of the above, 3,688,263 (Previous year - 2,923,237) shares are held by Dashtag, UK, the holding company.

(d) List of shareholders holding more than 5% shares as at the Balance Sheet date



Name of the ShareholderAs at


31st March, 2015No. of Shares % of holding No. of Shares % of holding

Dashtag, UK 3,688,263 94.57 2,923,237 74.95



` ` ` `4. Reserves and Surplus

Capital Reserve 51,000 51,000 Securities Premium Reserve 394,849,452 394,849,452 General Reserve 684,374,143 684,374,143 Surplus in Statement of Profit and Loss

Balance as at the beginning of the year 379,849,157 363,768,917 (Loss)/Profit for the year (141,457,405) 23,099,896

238,391,752 386,868,813 Less: Appropriations Proposed Dividend – 5,850,000 Tax on Proposed Dividend – 1,169,656 Balance as at the end of the year 238,391,752 379,849,157

1,317,666,347 1,459,123,752

5. Long-term ProvisionsProvision for Employee Benefits - Provision for Compensated Absences [Refer Note 31(C)] 29,205,000 28,259,000 Provision for Fringe Benefits Tax [Net of Payments of ` 33,393,000 (Previous period ` 33,393,000)] 1,561,164 1,561,164 Provision for Demand under the Drugs (Prices Control) Order, 1979 [Refer Note 28] 19,462,000 19,462,000 Provision for Sales Tax [Refer Note 28] 2,394,145 2,394,145

52,622,309 51,676,309 6. Trade Payables

Total Outstanding Dues of Micro and Small Enterprises [Refer Note 38]; and 2,748,266 2,302,646 Total Outstanding Dues of Creditors other than Micro and Small Enterprises 207,992,162 216,610,638

210,740,428 218,913,284 7. Other Current Liabilities

Unpaid Dividends* 844,614 625,538 Statutory Dues 19,398,103 29,191,459 Employee Benefits Payable 19,508,198 23,667,968 Advances from Customers 19,077,167 30,767,803 Other Payables 9,600,000 2,952,941

68,428,082 87,205,709

* There are no amounts due for payment to the Investor Education and Protection Fund under Section 205C of the Companies Act, 1956 as at the year end. Section 125 of the Act which corresponds to Section 205C of the Companies Act, 1956 has not yet been enforced.

8. Short-term ProvisionsProvision for Employee Benefits Provision for Gratuity [Refer Note 31(B)] 24,247,000 11,875,000 Provision for Compensated Absences

[Refer Note 31(C)] 4,428,000 4,886,000 28,675,000 16,761,000

Proposed Dividend – 5,850,000 Tax on Proposed Dividend – 1,169,656 Provision for Non-Sellable Sales Returns [Refer Note 28] 69,199,274 29,558,000

97,874,274 53,338,656



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` ` ` `10. Deferred Tax Assets (Net)

Deferred Tax AssetsDepreciation/Amortisation 8,186,163 10,112,263 Provision for Doubtful Debts and Deposits 10,325,486 9,885,818 Provision for Employee Benefits 19,136,864 14,884,963 Provision for Non-Sellable Sales Returns 22,879,356 9,772,762 Provision for Diminution in the Value of Long-term Investment 33,559 33,559 Unabsorbed Depreciation and Tax Loss 55,024,984 6,767,766 Others 15,958,177 10,528,118

131,544,589 61,985,249 Less: Deferred Tax Liability – –

131,544,589 61,985,249 11. Long-term Loans and Advances

(Unsecured, Considered Good unless otherwise stated)Security Deposits

Considered Good 62,787,340 60,685,990 Considered Doubtful 532,595 3,446,763

63,319,935 64,132,753 Less: Provision for Doubtful Deposits 532,595 3,446,763

62,787,340 60,685,990 Other Deposits Considered Good 12,667,445 11,403,610

Considered Doubtful 20,149,923 18,900,052 32,817,368 30,303,662

Less: Provision for Doubtful Deposits 20,149,923 18,900,052 12,667,445 11,403,610

Advances recoverable in cash or in kind or for value to be received 1,574,652 1,779,652 Current Taxation [Net of Provision of ` 732,312,548 (Previous year ` 732,312,548)] 394,958,226 267,015,946

471,987,663 340,885,198

12. Other Non-Current AssetsMargin Money Deposits with more than 12 months maturity 9,285,899 9,105,262 Interest accrued but not due on Deposits 1,938,040 1,363,260

11,223,939 10,468,522

13. Inventories(At lower of cost and net realisable value)Raw Materials 6,902,047 8,907,290 Finished Goods 18,207,856 6,164,824 Stock-in-Trade [including in transit – Nil (Previous year ` 20,616,707)] 244,693,657 543,715,245 Packing Materials 561,810 775,182

270,365,370 559,562,541




` ` ` `14. Trade Receivables

Outstanding for a period exceeding six months from the date they were due for payment

Unsecured, Considered Good 1,184,869 1,032,492 Unsecured, Considered Doubtful 10,547,212 7,553,128

11,732,081 8,585,620 Less: Provision for Doubtful Debts 10,547,212 7,553,128

1,184,869 1,032,492 Others

Unsecured, Considered Good 89,486,653 201,067,333 90,671,522 202,099,825

15. Cash and Bank BalancesCash and Cash Equivalents

Balances with Banks Current Accounts 25,929,994 16,102,476 Deposit Accounts (less than 3 months maturity) 369,000,000 640,145,893

394,929,994 656,248,369 Cheques on Hand 567,143 461,870

395,497,137 656,710,239 Other Bank Balances

Long-term Deposits with maturity more than 3 months but less than 12 months 350,000,000 – Unpaid Dividend Accounts 844,614 625,538

350,844,614 625,538 746,341,751 657,335,777

16. Short-term Loans and Advances(Unsecured, Considered Good)Advances recoverable in cash or in kind or for value to be received 33,462,165 50,787,285

17. Other Current AssetsOther Receivables from Related Parties 9,708,623 12,856,048 Interest accrued but not due on Deposits 9,608,603 7,058,381

19,317,226 19,914,429

18. Contingent Liabilities(a) Claims against the Company not acknowledged

as debtsIncome-tax Matters – Matters decided against the Company in respect of which the Company has preferred an appeal 711,749,121 477,180,401 Fringe Benefits Tax Matter 128,412 128,412 Sales tax Matters 1,794,910 1,794,910 Employee related Matters 7,164,291 7,356,925 Others 277,500 277,500

(b) Guarantees issued by Banks on behalf of the Company 13,040,304 15,955,097

Notes:(i) Future cash outflows in respect of (a) above are determinable only on receipt of judgements/decisions pending with various

authorities/forums and/or final outcome of the matters.(ii) Future cash outflows in respect of (b) above are dependent on the future performance of the obligations by the company

and/or other parties.




19. Commitments (a) Estimated amount of contracts remaining to be executed on capital account and not provided for ` 24,800 (Previous year

` 1,225,398). (b) Estimated amount of contracts remaining to be executed for Purchases of Stock-in-Trade ` 522,943,798 (Previous year -

Nil). Year ended


31st March, 2015 ` ` ` `

20. Proposed DividendProposed Dividend – 5,850,000 Number of shares outstanding as at the end of the year 3,900,000 3,900,000 Dividend per Share (` per Equity Share of ` 10 each) – 1.50



` ` ` `21. Revenue from Operations

Sale of Products 1,425,928,174 2,154,995,218 Sale of Services 152,118,206 187,315,143

1,578,046,380 2,342,310,361 Less: Excise Duty 810,721 1,228,835

Revenue from Operations (Net) 1,577,235,659 2,341,081,526

22. Other IncomeInterest Income 49,378,683 84,070,804 Profit on Sale/Disposal of Fixed Assets (Net) 800,000 6,222 Net Gain on Foreign Currency Transactions and Translation 112,648 – Liabilities no longer required written back 10,888,598 6,692,191 Consideration for Transfer of Business [Refer Note 40] – 43,073,100 Miscellaneous Income [including - Nil (Previous year ` 8,367,460) for prior periods] 491,720 8,439,763

61,671,649 142,282,080

23. Cost of Materials ConsumedRaw Materials Consumed Opening Stock 8,907,290 974,453 Add: Purchases 13,295,193 15,345,017

22,202,483 16,319,470 Less: Closing Stock 6,902,047 8,907,290

15,300,436 7,412,180 Packing Materials Consumed Opening Stock 775,182 803,065 Add: Purchases 4,480,504 3,720,676

5,255,686 4,523,741 Less: Closing Stock 561,810 775,182

4,693,876 3,748,559

19,994,312 11,160,739





` ` ` `

24. Changes in Inventories of Finished Goods and Stock-in-Trade

Opening Stock

Finished Goods 6,164,824 15,359,322

Stock-in-Trade 543,715,245 340,854,362

549,880,069 356,213,684

Closing Stock

Finished Goods 18,207,856 6,164,824

Stock-in-Trade 244,693,657 543,715,245

262,901,513 549,880,069

286,978,556 (193,666,385)

25. Employee Benefits Expense

Salaries and Bonus 338,993,699 401,215,002

Contribution to Provident and Other Funds [Refer Note 31(A)] 34,268,651 44,267,063

Gratuity [Refer Note 31(B)] 16,090,000 12,019,000

Compensated Absences 5,890,604 5,405,000

Staff Welfare Expenses 15,274,634 18,041,291

410,517,588 480,947,356

26. Finance Costs

Interest on Income-tax – 1,463,328

Others 485,333 400,724

485,333 1,864,052





` ` ` `

27. Other ExpensesConsumption of Stores 3,346,261 4,476,991

Electricity 2,908,848 4,387,400

Rent [Refer Note 34] 39,452,038 45,254,915

Repairs and Maintenance

Buildings 4,420,111 2,736,666

Plant and Equipment 41,109 51,814

Others 1,665,056 1,771,210

6,126,276 4,559,690

Insurance 761,404 897,423

Rates and Taxes

Excise Duty – 256,451

Sales tax 11,491,503 21,359,317

Others 255,984 5,512,151

11,747,487 27,127,919

Manufacturing Charges 794,840 895,204

Quality Control and Quality Assurance 546,282 1,244,209

Legal and Professional Charges 61,746,280 60,075,718

Auditors’ Remuneration [Refer Note 30] 4,003,503 4,635,938

Directors’ Commission and Sitting Fees 1,351,948 2,038,967

Travelling and Conveyance 67,344,316 82,489,183

Printing and Stationery 1,328,338 1,501,083

Postage and Telephone 12,855,459 16,174,112

Advertisement and Sales Promotion 107,195,576 198,859,231

Freight and Forwarding 23,759,143 37,246,165

Warehousing Charges 97,585,127 88,176,404

Cash Discount 13,728,482 20,257,867

Commission on Sales 11,478,170 26,601,082

Bad Debts and Advances written off – 724,768

Provision for Doubtful Debts and Deposits (Net) [including - Nil (Previous year ` 8,367,460) for prior periods] 1,329,787 18,933,207

Net Loss on Foreign Currency Transactions and Translation – 81,185

Expenditure towards Corporate Social Responsibility (CSR) Activities [Refer Note 37] 200,000 150,000

Services Availed from Group Companies 122,689,522 122,274,120

Miscellaneous Expenses 7,535,126 9,031,413

599,814,213 778,094,194


Provision for Non-Sellable Sales Returns

Provision for Demand under the Drugs (Prices Control)

Order, 1979


2016


2015


2016


2015

` ` ` `

28. Movement in Provisions

Balance as at the beginning of the year 29,558,000 15,183,000 19,462,000 19,462,000

Provision made during the year 69,199,274 29,558,000 – –

Amounts used during the year 29,558,000 15,183,000 – –

Balance as at the end of the year 69,199,274 29,558,000 19,462,000 19,462,000

Provision for Sales Tax


2016


2015

` `

Balance as at the beginning of the year 2,394,145 1,194,145

Provision made during the year – 1,200,000

Amounts used during the year – –

Balance as at the end of the year 2,394,145 2,394,145

29. Excise duty relating to difference between closing stock and opening stock and other adjustments is included in Note 27 - Other Expenses. Excise duty relating to Sale of Products is reduced from Gross Sale of Products.



` `

30. Auditors’ Remuneration

Audit Fees 2,719,375 2,668,550

Tax Audit Fees 830,125 814,610

Other Services 342,000 1,011,240

Reimbursement of Expenses 112,003 141,538

4,003,503 4,635,938





2016


2015

` `31. Employee Benefits

(A) Defined Contribution Plans The Company has recognised the following amounts in the Statement of

Profit and Loss for the year: (i) Contribution to Provident Fund 15,746,239 20,959,690 (ii) Contribution to Superannuation Fund 18,248,303 23,024,138 (iii) Contribution to Employees’ State Insurance Scheme 7,293 14,115 (iv) Contribution to Employees’ Deposits Linked Insurance Scheme 266,816 269,120

34,268,651 44,267,063

Gratuity Gratuity (B) Defined Benefit Plan Valuation in respect of Gratuity has been carried out by independent actuary, as

at the Balance Sheet date, based on the following assumptions: (a) Discount Rate (per annum) 7.80% 7.80% (b) Rate of increase in Compensation Levels 10.00% 9.00% (c) Rate of Return on Plan Assets 8.35% 9.25% (d) Normal Retirement Age 60 60 (e) Expected average remaining working lives of employees in number of years 21 21

Gratuity Gratuity

` ` (i) Changes in the Present Value of Obligation (a) Opening Present Value of Obligation 80,460,645 70,162,645 (b) Interest Cost 5,600,000 5,935,000 (c) Past Service Cost – – (d) Current Service Cost 6,216,000 6,194,000 (e) Curtailment Cost/(Credit) – – (f) Settlement Cost/(Credit) – – (g) Benefits Paid (17,327,000) (12,011,000) (h) Actuarial Loss 7,476,000 10,180,000 (i) Transfer Out (52,000) – (j) Closing Present Value of Obligation 82,373,645 80,460,645

(ii) Changes in the Fair Value of Plan Assets (a) Opening Fair Value of Plan Assets 68,585,645 78,133,645 (b) Expected Return on Plan Assets 5,715,000 6,679,000 (c) Actuarial Loss (2,513,000) (4,360,000) (d) Employers’ Contributions 3,718,000 144,000 (e) Benefits Paid (17,327,000) (12,011,000) (f) Transfer Out (52,000) – (g) Closing Fair Value of Plan Assets 58,126,645 68,585,645

(iii) Percentage of each Category of Plan Assets to total Fair Value of Plan Assets as at the year end

Administered by Life Insurance Corporation of India 100% 100%




2016


2015

Gratuity `

Gratuity `

(iv) Amount recognised in the Balance Sheet (a) Present Value of Obligation as at the year end 82,373,645 80,460,645 (b) Fair Value of Plan Assets as at the year end 58,126,645 68,585,645 (c) Liability recognised in the Balance Sheet 24,247,000 11,875,000 (d) Experience (Loss)/Gain adjustments on Plan Liabilities (1,098,000) 3,702,000 (e) Experience Gain adjustments on Plan Assets (2,513,000) (4,360,000) (f) Actuarial Loss due to change of assumptions (6,378,000) (13,882,000)

Period ended 31st March,

2014


2012


2011Gratuity Gratuity Gratuity

` ` ` (a) Present Value of Obligation as at the period/year

end 70,162,645 63,315,645 53,789,645 (b) Fair Value of Plan Assets as at the period/year end 70,162,645 68,974,799 62,684,799 (c) Asset recognised in the Balance Sheet – (5,659,154) (8,895,154) (d) Experience (Loss)/Gain adjustments on Plan

Liabilities (8,209,000) 288,000 (3,593,000) (e) Experience Gain adjustments on Plan Assets – 213,000 164,000 (f) Actuarial Gain due to change of assumptions 4,113,000 1,483,000 942,000


2016


2015

` ` (v) Expenses recognised in the Statement of Profit and Loss (a) Current Service Cost 6,216,000 6,194,000 (b) Past Service Cost – – (c) Interest Cost 5,600,000 5,935,000 (d) Expected Return on Plan Assets (5,715,000) (6,679,000) (e) Curtailment Cost/(Credit) – – (f) Settlement Cost/(Credit) – – (g) Net Actuarial Loss 9,989,000 14,540,000 (h) Employees' Contribution – – (i) Total Expenses recognised in the Statement of

Profit and Loss @ 16,090,000 19,990,000

@ Previous year - Excluding the effect of excess of fair value of plan assets over Present Value of Obligation as at 31st March, 2014 of ` 7,971,000 on account of excess contribution made by the company in the period ended 31st March, 2014

(C) Other Long-term Employee Benefit

The liability for Compensated Absences as determined by independent actuary as at the Balance Sheet date is ` 33,633,000 (Previous year ` 33,145,000).

32. The company has only one reportable business segment which is “Pharmaceuticals” and one reportable geographical segment which is “within India”. Accordingly, no separate disclosures of segment information are required.



33. Related Party Disclosures(A) Enterprises where control exists

(a) Ultimate Holding Company Merck & Co., Inc., USA

(b) Holding Company Dashtag, UK

(B) Other Related Parties with whom the Company had transactions during the year

(a) Fellow Subsidiaries MSD International GMBH, Singapore

MSD Pharmaceuticals Private Limited, India

Organon (India) Private Limited, India

Merck Sharp & Dohme Corp., USA

Merck Sharp & Dohme Asia Pacific Services Pte. Limited, Singapore

Merck Sharp & Dohme (Asia) Limited, Hong Kong*

Merck Sharp & Dohme B. V., Netherlands

MSD Korea Limited, Korea*

Merck Sharp & Dohme (New Zealand) Limited, New Zealand*

MSD-Sun FZ LLC, UAE*

(b) Key Management Personnel K. G. Ananthakrishnan - Managing Director

Giridhar Sanjeevi (upto 22nd May, 2015) - Chief Financial Officer

* No transactions during the current year

(C) Disclosure of transactions between the company and related parties and outstanding balances as at the year/period end:



` ` ` `

(a) Holding Company

Dividend paid 5,323,073 5,846,474

(b) Fellow Subsidiaries

Purchases of Stock-in-Trade


Purchases of Raw Materials


Services Rendered






152,118,206 187,315,143

Services Availed



122,689,522 122,274,120





` ` ` `

Recovery of Expenses


MSD International GMBH 428,689 1,597,296

Merck Sharp & Dohme Asia Pacific Services Pte. Limited 13,265 –

Merck Sharp & Dohme (New Zealand) Limited – 203,650

MSD Korea Limited – 203,650

3,886,271 3,707,901

Reimbursement of Expenses

Merck Sharp & Dohme (Asia) Limited – 92,079

Balances as at the year end -

Outstanding Receivables



MSD Pharmaceuticals Private Limited – 2,945,383



9,708,623 12,856,048

Outstanding Payables


MSD Pharmaceuticals Private Limited 2,307,822 –

54,620,886 58,607,726

(c) Key Management Personnel

Remunerations $

K. G. Ananthakrishnan 9,570,900 10,101,506

Giridhar Sanjeevi @ 819,912 7,328,040

10,390,812 17,429,546

Sale of Fixed Asset

K. G. Ananthakrishnan 900,000 –

$ Excludes Provision for Employee Benefits and Stock Options. @ Represents amount reimbursed to MSD Pharmaceuticals Private Limited by way of cross charging

arrangement. This amount is also included under ‘Services Availed’ in Note 43(C)(b).



2016


2015

` `

34. Disclosures for Operating Leases

(a) Lease payments recognised in the Statement of Profit and Loss 39,452,038 45,254,915

(b) Significant Leasing Arrangements

The company has significant operating leases for office premises and vehicles. These lease arrangements range for a period between 4 years and 9 years, which include both cancellable and non-cancellable leases. Most of the leases are renewable for further period on mutually agreeable terms and also include escalation clauses.

(c) Future minimum lease payments under non-cancellable agreements

(i) Not later than one year 35,760,757 34,057,864

(ii) Later than one year and not later than five years 97,168,954 132,929,710

35. (Loss)/Earnings per Share Basic (loss)/earnings per share has been calculated by dividing (loss)/profit for the year attributable to equity shareholders by

the weighted average number of equity shares outstanding during the year. The company has not issued any potential equity shares and accordingly, the basic earnings per share and diluted earnings per share are the same. (Loss)/Earnings per share has been computed as under:


2016


2015

(Loss)/Profit for the year (`) (141,457,405) 23,099,896

Weighted average number of Shares 3,900,000 3,900,000

(Loss)/Earnings per Share (` per Equity Share of ` 10 each) – Basic and Diluted (36.27) 5.92

36. The foreign currency outstanding balances that have not been hedged by any derivative instrument or otherwise as at the Balance Sheet date are as follows:

As at 31st March, 2016 As at 31st March, 2015

Particulars

Amount in Foreign

CurrencyAmount in

`

Amount inForeign

CurrencyAmount in

`

Receivables

USD 95,051 6,324,671 114,892 7,171,306




2016


2015

` `

37. Expenditure towards Corporate Social Responsibility (CSR) Activities(a) Gross amount required to be spent by the company during the year – – (b) Amount spent during the year on: 200,000 150,000

Year ended 31st March, 2016 Year ended 31st March, 2015

` ` ` `

In cash Yet to be paid

in cash In cash Yet to be paid

in cash (i) Construction/acquisition of any asset – – – – (ii) On purposes other than (i) above 200,000 – 150,000 –


2016


2015

` `

38. Disclosures as required by the Micro, Small and Medium Enter-prises Development Act, 2006 are as under:(a) The principal amount and the interest due thereon remaining unpaid to suppliers (i) Principal 1,320,911 1,291,729 (ii) Interest due thereon 1,427,355 1,010,917

2,748,266 2,302,646

(b) (i) The delayed payments of principal amount paid beyond the appointed date during the entire accounting year 5,593,371 13,076,071

(ii) Interest actually paid under Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 – –

(c) (i) Normal Interest accrued during the year, for all the delayed payments, as per the agreed terms – –

(ii) Normal Interest payable for the year of delay in making payment, as per the agreed terms – –

(d) (i) Total Interest accrued during the year 416,438 232,673 (ii) Total Interest accrued during the year and remaining unpaid 416,438 232,673

(e) Included in (d) above is ` 291,609 (Previous year ` 21,639) being interest on amounts outstanding as at the beginning of the accounting year.

The above information and that given in Note 6 - Trade Payables regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the company.

39. In the year ended 31st December, 2006, the company had raised ` 402,500,000 by issuing 700,000 equity shares of ` 10 each at a premium of ` 565 per share to its promoters, Dashtag, UK. Of the aforesaid balance, the company has utilised ` 138,813,974 (Previous year ` 109,286,718) towards business expansion up to 31st March, 2016. The remaining amount of ` 263,686,026 continue to be invested in fixed deposits with banks pending utilisation of the same.




40. On 1st October, 2014, the company entered into a ‘Business Transfer Agreement’ with Bayer Pharmaceuticals Private Limited (“Bayer”), consequent to which the Consumer Care Business and Rx Product Business comprising of Alaspan, Polaramine and Tinaderm were transferred to Bayer with effect from 1st January, 2015 for a consideration of ` 43,073,100.

41. Disclosures for Employee Share based PaymentsThe Institute of Chartered Accountants of India has issued a Guidance Note on “Accounting for Employee Share based Payments”, which is applicable to employee share based payment plans, the grant date in respect of which falls on or after 1st April, 2005. Some of the employees of the company are entitled to an option to purchase certain shares of the ultimate holding company, Merck & Co., Inc., USA under an option agreement entered into between the ultimate holding company and the employee. The stock option scheme of the ultimate holding company is being managed and administered by the ultimate holding company for its own benefit and the company is not compensating its ultimate holding company for the grants made to the employees and accordingly, there are no costs being reflected in the financial statements. The details of employee share based payments are not readily available with the company and hence, the same are not disclosed.

There are two schemes under which employees are granted stock options:

(A) A stock option scheme (‘ESOP’) as per which the employee has the right to purchase a fixed number of shares of the ultimate holding company at a fixed price for a fixed period of time. The incentive to the employee is the value employee realises from a stock option and is dependent on the current value of the stock being higher than the option price.

(B) Restricted Stock Award Unit (‘RSU’) is a grant valued in terms of the ultimate holding company stock, but the ultimate holding company stock is not issued at the time of the grant. After a recipient of a unit satisfies the vesting requirement, the ultimate holding company will distribute shares or the cash equivalent of the number of shares used to value the unit. No payment is required under the restricted stock award.

42. On 25th April, 2014, the promoter of the company, Dashtag (“Acquirer”), notified the company of its intention to make a voluntary delisting offer (“Delisting Offer”) to the public shareholders of the company in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (“Delisting Regulations”) to acquire 976,763 equity shares, representing 25.05% of the paid-up equity share capital of the company held by the public shareholders of the company and consequently delist the equity shares of the company from the BSE Limited. The Acquirer, vide letter dated on 1st December, 2014, had informed the company that on account of the abnormal spurt in the share price, the Acquirer has decided not to make the public announcement of the Delisting Offer at this time.

In the current year, vide public announcement dated 29th May, 2015 and offer letter dated 29th May, 2015, the Acquirer made the Delisting Offer to the public shareholders. The public shareholders of the company were invited to submit bids pursuant to a Reverse Book Building process made available through the electronic system of the BSE Limited from 3rd June, 2015 to 9th June, 2015. Vide a public announcement dated 17th July, 2015, the Acquirer accepted the discovered price of ` 2,400 per Share (“Exit Price”). Pursuant to the successful offer announcement, the Acquirer acquired 625,928 shares from public shareholders of the company at the Exit Price. On 30th July, 2015, the Acquirer, made a public announcement, informing the Residual Shareholders of the terms and conditions of the Exit Offer. The Exit Offer period opened on 7th August, 2015 and will close on 6th August, 2016. Following the closure of the Delisting Offer and in accordance with the Delisting Regulations, the company applied for the delisting of its Shares from the BSE and pursuant to the same, the shares of the company were delisted from with effect from 7th August, 2015 and no longer traded on the BSE with effect from 31st July, 2015 as per notice of BSE Limited dated 27th July, 2015. The Acquirer has successfully acquired a total of 805,535 shares from public shareholders of the company till 30th April, 2016.

43. Previous period figures have been regrouped where necessary.







Notes

FULFORD (INDIA) LIMITEDCIN: L99999MH1948PLC006199

Registered Office: Platina, 8th Floor, Plot No. C-59, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400098www.fulfordindia.com • Tel: 022-6789 8888 • Fax: 022-67898889

ATTENDANCE SLIPAnnual General Meeting 2015-2016

To be handed over at the entrance of Meeting HallI hereby record my presence at the 68th ANNUAL GENERAL MEETING of the Company at Exchange Plaza, NSE Auditorium, Ground Floor, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051 on Tuesday, August 2, 2016 at 11.30 a.m.

Name of the Member:

Folio/DP ID No. /Client ID No.

Name of the Proxy/Representative (in Block Letters)(To be filled in if the Proxy/Representative

attends instead of the Member)

Signature of the Member or Proxy/Representative

FULFORD (INDIA) LIMITEDCIN: L99999MH1948PLC006199

Registered Office: Platina, 8th Floor, Plot No. C-59, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400098www.fulfordindia.com • Tel: 022-6789 8888 • Fax: 022-67898889

68th ANNUAL GENERAL MEETING – AUGUST 2, 2016

PROXY FORM[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]

Name of the Member(s)

Registered Address

E-mail ID

Folio No / Client ID

DP ID

I/We, being the holder(s) of shares of Fulford (India) Limited, hereby appoint:

Name : Email:

Address :

Signature:

or failing him / her

Name : Email:

Address :

Signature:

or failing him / her

Name : Email:

Address :

Signature:

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 68th Annual General Meeting of the Company, to be held on Tuesday, August 2, 2016 at 11.30 a.m. at Exchange Plaza, NSE Auditorium, Ground Floor, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 and at any adjournment thereof in respect of such resolutions as are indicated overleaf:

Item No

Resolutions

Vote (optional see Note 3)

No. of Shares**

I/We assent to the

Resolution (FOR)

I/We dissent to the

Resolution (AGAINST)

1. To receive, consider and adopt the Audited Financial Statements (including Consolidated Financial Statements) of the Company for the Financial Year ended March 31, 2016, the Reports of the Board of Directors and Auditors thereon. (Ordinary Resolution)

2. To appoint a Director in place of Mr. K.G. Ananthakrishnan (holding DIN 00019325), who retires and being eligible, offers himself for re-appointment. (Ordinary Resolution)

3. To appoint a Director in place of Mr. Giridhar Sanjeevi (holding DIN 06648008), who retires and being eligible, offers himself for re-appointment. (Ordinary Resolution)

4. To appoint a Director in place of Ms. Hwee Ping Chua (holding DIN 02930545), who retires and being eligible, offers herself for re-appointment. (Ordinary Resolution)

5. To ratify the appointment of M/s. Lovelock & Lewes, Chartered Accountants (Firm Registration No. 3011056E) as Statutory Auditors of the Company. (Ordinary Resolution)

6. To approve the remuneration of the Cost Auditor for the financial year ended March 31, 2017. (Ordinary Resolution)

** Each share shall have one vote.

Signed this day of 2016.

Signature of the member Signature of the proxy holder(s)

Notes:

1. This form, in order to be effective should be duly stamped, completed, signed and deposited at the Registered office of the Company, not less than 48 hours before the commencement of the meeting.

2. Those Members who have multiple folios with different joint holders may use copies of this Attendance slip/Proxy Form.3. It is optional to indicate your preference. If you leave the for, against column blank against any or all resolutions, your proxy will be entitled to

vote in the manner as he/she may deem appropriate.

Affix Revenue Stamp

FULFORD (INDIA) LIMITED

OUR VISION

OUR MISSION

WHAT WE STAND FOR

We make a difference in the lives of people globally through our innovative medicines, vaccines and biologic therapies. MSD also has strong presence in Animal Health, via Intervet India Private Limited. We aspire to be the best healthcare Company in the world and are dedicated to providing leading innovations and solutions for tomorrow.

To provide innovative, distinctive products and services that save and improve lives and satisfy customer needs, to be recognised as a great place to work, and to provide investors with the superior rate of return.

Excellence in science and healthcare innovation, with an emphasis on addressing unmet medical needs.

Focus on patients and anticipating customers’ needs.

Commitment to expand access to our medicines and vaccines, and to improve global health.


vaki

ls

HOW?By providing people all across the globe, with

innovative prescription medicines, vaccines and animal health products. We also provide

healthcare solutions that make a difference. And we do it by

listening to patients, physicians and our other partners and

anticipating their needs.

At MSD, we work hard to keep the world well.

See all we’re doing for you at

msd.inFulford (India) LimitedA subsidiary of Merck & Co., Inc., Kenilworth, NJ, USACIN : L99999MH1948PLC006199

Regd. Office : 8th Floor, Platina, Plot No. C-59, G-Block,Bandra-Kurla Complex, Bandra (E), Mumbai - 400 098.www.fulfordindia.com

Documents

Fulford (India) Limited · Fulford (India) Limited, MSD Pharmaceuticals Private Limited and Organon (India) Private Limited. Since its existence in India, the Company has moved quickly