ANNUAL REPORT 2013 - 14 - Fulford India Limited · Fulford (India) Limited Fulford (India) Limited ANNUAL REPORT 2013-14 FULFORD (INDIA) LIMITED OUR VISION We make a difference in

ANNUAL REPORT 2013 - 14

Committed to improving health and well-being around the world.

vakils

At MSD, we work hard to keep the world well.

HOW?

By providing people all across the globe, with innovative prescription

medicines, vaccines, consumer care 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.See all

we’re doing for you at

msd.in

CIN NO: L99999MH1948PLC006199

www.fulfordindia.com

Fulford (India) Limited, is the subsidiary of Merck &

Co. Inc., Whitehouse Station, N.J., USA. Merck

knows as MSD across the world (except in the US

and Canada), operates in India via three separate

entities MSD Pharmaceuticals Private Limited,

Organon (India) Private Limited and Fulford (India)

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, Musculoskeletal and

Primary Care, and offers a strong and diversified

product portfolio of over 75 brands in total.

For more information visit, www.fulfordindia.com

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

Fulford (India) Limited ANNUAL REPORT 2013-14

FULFORD (INDIA) LIMITED

OUR VISION

We make a difference in the lives of

people globally through our innovative

medicines, vaccines, biologic

therapies and consumer health. 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 recognized as a great

place to work, and to provide investors

with superior rate of return.

OUR MISSION

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.

WHAT WE STAND FOR


Fulford (India) Limited ANNUAL REPORT 2013-14 1


Company OverviewFinancial Performance - Ten Year Highlights

Company Information

Business ReviewNotice

Directors’ Report

Corporate Governance Report

Auditors’ Report

Financials-StandaloneBalance Sheet

Statement of Profit and Loss

Cash Flow Statement

Notes to Financial Statements

Subsidiary Company

Statement relating to Subsidiary Company

Directors’ Report

Auditors’ Report

Financials

Consolidated Auditors’ Report

Schering-Plough (India) Private Limited

Balance Sheet

Statement of Profit and Loss

Cash Flow Statement

Notes to Financial Statements

Financials-Consolidated

02

03

04

13

27

39

44

45

46

47

68

69

72

74

79

80

81

82

84


(` in million)

Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2014@

Profit & Loss Account

Gross Sales* 1,317.95 1,518.75 1,546.59 1,738.78 1,901.34 1,844.81 1,905.13 2,145.64 2,152.81 2,696.18

Other Income 22.17 13.37 25.53 72.74 76.90 68.13 78.83 93.73 99.98 127.55

Interest Expenses (3.97) (0.65) (0.48) (0.15) (0.01) (0.09) (2.94) (0.66) (0.44) (9.49)

Profit/(Loss) before Taxation 187.36 243.98 197.53 338.81 315.90 223.14 173.93 27.01 (72.49) 54.30

Profit/(Loss) after Taxation** 117.58 150.40 127.46 218.15 197.27 134.64 120.56 18.39 (49.92) 44.66

Earnings per Share of ` 10 36.74 47.00 39.01 55.94 50.58 34.52 30.91 4.71 (12.80) 11.45

Dividend per Share of ` 10 2.50 3.00 3.66 4.00 2.00 4.50 4.50 3.50 1.00 2.00

Balance SheetFixed Assets 31.96 41.01 38.54 34.38 29.37 55.74 55.22 41.59 26.76 11.93

Investments 0.15 171.30 190.69 134.85 144.06 149.94 — — — —

Net Deferred Tax 10.45 8.82 6.25 6.45 14.21 12.04 26.67 37.05 59.62 46.76

Non Current Assets & Liabilities (Net) — — — — — — — 117.46 149.03 229.74

Net Current Assets 208.08 168.69 664.01 920.52 1,096.70 1,180.73 1,416.60 1,304.96 1,211.20 1,193.71

250.64 389.82 899.49 1,096.20 1,284.34 1,398.45 1,498.49 1,501.06 1,446.61 1,482.14

Share Capital 32.00 32.00 39.00 39.00 39.00 39.00 39.00 39.00 39.00 39.00

Reserves & Surplus 209.61 351.04 860.01 1,057.20 1,245.34 1,359.45 1,459.49 1,462.06 1,407.61 1,443.14

Loan Funds 9.03 6.78 0.48 — — — — — — —

250.64 389.82 899.49 1,096.20 1,284.34 1,398.45 1,498.49 1,501.06 1,446.61 1,482.14

* Sales before Excise Duty Charged** After prior year tax and other adjustment@ Fifteen months period

TEN YEARS HIGHLIGHTS

FINANCIAL PERFORMANCE

2004

(in

milli

on)

`

3,000

2,500

2,000

1,500

1,000

500

02005 2006 2007 2008 2009 2010 2011 2012 2014

SALES

2004

400

350

300

250

200

150

100

50

0

(50)

(100)2005 2006 2007 2008 2009 2010 2011 2012 2014

PROFIT BEFORE TAX

(in

milli

on)

`


COMPANY INFORMATIONBOARD OF DIRECTORSDR. AJIT DANGI, Chairman MR. K.G. ANANTHAKRISHNAN, President & Managing Director DR. V.S. SOHONI MR. HOMI KHUSROKHAN MR. KEVIN ALI MR. SANDEEP SHARMA

COMPANY SECRETARYMR. SACHIN GAIKWAD

COUNTRY LEADERSHIP TEAMMR. GIRIDHAR SANJEEVI – Finance MR. SAMEER TAMHANE – Human Resources MR. SHASHANK SHANBHAG – Sales & Marketing – Women's Health & Vaccines MS. ANNAPURNA DAS – Sales & Marketing – Pakistan, Sri Lanka & Bangladesh MR. GAURAV LAROIA – Sales & Marketing – SpecialtyMR. VIVEK KAMATH – Sales & Marketing – CV & MetabolicsMR. ASHIS MUKHERJEE – Public Health Initiatives and Diversified MarketMS. NEELIMA DWIVEDI – Corporate AffairsDR. SWASHRAYA SHAH – Medical AffairsMR. ANJAN SEN – 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

BANKERSCITI BANK N A STATE BANK OF INDIACANARA BANKHDFC BANK LIMITEDKOTAK MAHINDRA BANK

LEGAL ADVISORSCorporate Law Group (CLG)

AUDITORSLOVELOCK & LEWES

REGISTRARS 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 MEMBERSAll 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 our Compliance Officer at [email protected]


NOTICE

NOTICE is hereby given that the Sixty-Sixth Annual General Meeting of FULFORD (INDIA) LIMITED will be held at Exchange Plaza, NSE Auditorium, Ground Floor, Bandra-Kurla Complex, Bandra (East), Mumbai – 400 051 on Thursday, August 7, 2014 at 11.30 a.m. to transact the following business:

ORDINARY BUSINESS

1. To consider and adopt the Audited Balance Sheet as at March 31, 2014 and the Profit & Loss Account for the fifteen months period ended on that date together with the Directors’ and the Auditors’ Reports thereon.

2. To declare Dividend for the fifteen months period ended March 31, 2014.

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

4. To appoint a Director in place of Mr. Kevin Ali (holding DIN 03591543), who retires and being eligible, offers himself for re-appointment.

5. To appoint M/s. Lovelock Lewes, Chartered Accountants (Firm Registration No. 3011056E) as Statutory Auditors of the Company, to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting of the Company and to fix their remuneration.

SPECIAL BUSINESS

6. To consider and, if thought fit, to pass with or without modification, as an ordinary resolution, the following:

“RESOLVED THAT Mr. Sandeep Sharma (holding DIN 06606251), who was appointed as an Additional Director of the Company with effect from August 2, 2013 in terms of Section 260 of the Companies Act, 1956 (corresponding to Section 161(1) of the Companies Act, 2013) and whose term of office expires at the Annual General Meeting and in respect of whom the Company has received a notice in writing from a member proposing his candidature for the office of Director of the Company, be and is hereby appointed as Director of the Company, liable to retire at each Annual General Meeting.”


“RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with schedule IV to the Companies Act, 2013, Dr. Ajit Dangi (holding DIN 02270088), Director of the Company who retires at the Annual General Meeting and in respect of whom the Company has received a notice in writing from a member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office for five (5) consecutive years for a term upto March 31, 2019.”


“RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with schedule IV to the Companies Act, 2013, Dr. V. S. Sohoni (holding DIN 00012010), Director of the Company who retires at the Annual General Meeting and in respect of whom the Company has received a notice in writing from a member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office for five (5) consecutive years for a term upto March 31, 2019.”



“RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with schedule IV to the Companies Act, 2013, Mr. Homi Khusrokhan (holding DIN 00005085), Director of the Company who retires at the Annual General Meeting and in respect of whom the Company has received a notice in writing from a member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office for five (5) consecutive years for a term upto March 31, 2019.”

10. To consider and, if thought fit, to pass with or without modification, as a special resolution, the following:

“RESOLVED THAT pursuant to the provisions of Section 197 and other applicable provisions of the Companies Act, 2013 and Article 117 of the Company’s Articles of Association, the Company do hereby approve of and consent to the payment and distribution thereof of a sum not exceeding one percent of the net profits of the Company computed in accordance with the provisions of Section 198 of the Companies Act, 2013 as remuneration by way of commission over and above the sitting fees, amongst the Directors of the Company (other than Managing Director and Whole-time Director) in such amounts or proportions and in such manner as may be decided by the Board of Directors from time to time and such payments shall be made in respect of the profit for each of the five (5) financial years commencing from the year ending March 31, 2015.”


“RESOLVED THAT pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules 2014 (including any statutory modification/(s) or re-enactment thereof for the time being in force) the Board of Directors of the Company has appointed the Cost Auditors, to conduct the audit of the cost records of the Company at the remuneration of ` 80,000/- (Rupees eighty thousand only) plus out of pocket expenses for the financial year ending March 31, 2015.”

RESOLVED FURTHER THAT the Board of Directors 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

Sachin GaikwadMumbai, May 16, 2014 Company Secretary

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. The Register of Members and Share Transfer Books of the Company will remain closed from July 31, 2014 to August 7, 2014, both days inclusive.


3. Dividend, if approved by the Members at the Annual General Meeting will be paid on or before August 30, 2014 to the Members whose names appear as beneficial owners as at the close of business on July 30, 2014 and whose names appear on the Register of Members of the Company on August 7, 2014 as per details to be furnished by the Depositories, viz. National Securities Depository Limited and Central Depository Services (India) Limited.

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 view of Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited, additional information pertaining to Directors proposed for appointment/re-appointment at the Annual General Meeting is annexed hereto.

6. Members holding shares in demat mode may please note that, the bank details as furnished by the respective Depositories to the Company will be mandatorily printed on their dividend warrants/demand drafts for the purpose of distribution of dividend through Electronic Clearing Service (ECS) as advised by the Securities & Exchange Board of India (SEBI). In the absence of ECS facility, the bank account details, if available, will be printed on the dividend warrants/demand drafts. Instructions if any, given by them in respect of shares held in physical mode will not be automatically applicable to the dividend paid on shares held in demat mode. Members holding shares in demat mode must, therefore, give instructions regarding bank accounts in which they wish to receive a dividend, to their Depository Participants. The Company or the Registrar and Share Transfer Agents will not act on any direct request from these Members for change/deletion in such bank details.

7. 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 said Fund or the Company thereafter. Members who have not encashed the dividend warrants/demand drafts for the years 2006, 2007, 2008, 2009, 2010, 2011 and 2012 are requested to contact the Company's Registrar and Share Transfer Agents. Outstanding Dividend for the year 2006 shall be transferred to the Investor Education and Protection Fund in the year 2014.

8. 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.

9. Members are requested to note that as prescribed by SEBI, trading in securities of the Company is compulsorily in dematerialized form. 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.

10. 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.

11. In compliance with the provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rule 2014, the Company is pleased to provide members facility to exercise their votes at the 66th 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: Monday, July 28, 2014 from 9.00 hrs.

(b) Date and time of end of voting through electronic means beyond which voting will not be allowed: Wednesday, July 30, 2014 at 17.00 hrs.

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

(d) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Question (FAQ) and e-voting manual available at www.evoting.co.in under help section or write an email to [email protected]

(e) Instructions for e-voting are given on page nos. 10 & 11 of this notice.

(f) Details of Scrutinizer: Alwyn D’souza, Practising Company Secretary of M/s. Alwyn D’souza & Co., Company Secretaries, Mumbai.

The e-voting module shall be disabled for voting on Wednesday, July 30, 2014 at 17.00 hrs. 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 Friday, July 04, 2014.

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 e-voting process in a fair and transparent manner. The Scrutinizer shall within a period not exceeding three (3) working days from the conclusion of e-voting period unblock the votes in presence of at least two (2) witnesses not in the employment of the Company and make a Scrutinizer’s Report of the votes casted in favor or against, if any, forthwith to the Chairman of the Company. The results shall be declared on or after the AGM of the Company. The results declared along with the Scrutinizer’s Report shall be available on the Company’s website within two (2) days of passing of the resolution at the AGM of the Company and communicated to the stock exchange.

ANNEXURE TO NOTICE

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

Item No.: 6 – Appointment of Mr. Sandeep Sharma as a Non-Executive Director

Mr. Sandeep Sharma was appointed as an Additional Director on the Board of the Company with effect from August 2, 2013, and accordingly holds office up to the date of this Annual General Meeting of the Company. The Company has received a notice in writing from a Member proposing the candidature of Mr. Sandeep Sharma for the office of Director of the Company under Section 161(1) of the Companies Act, 2013.

The Board recommends the appointment of Mr. Sandeep Sharma.

Except Mr. Sandeep Sharma, being an appointee, 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. This Explanatory Statement may also be regarded as a disclosure under Clause 49 of the Listing Agreement with the Stock Exchange.


Item No.: 7 – Appointment of Dr. Ajit Dangi as an Independent Director

Dr. Ajit Dangi is a Non-Executive Independent Director of the Company and retires at this Annual General Meeting under the provisions of the erstwhile Companies Act, 1956 and the Articles of Association of the Company. Dr. Dangi being eligible and offering himself for appointment, is proposed to be appointed as an Independent Director for five (5) consecutive years for a term upto March 31, 2019. A notice has been received from a member proposing Dr. Dangi as a candidate for the office of Director of the Company.

In the opinion of the Board, Dr. Dangi fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder for his appointment as an Independent Director of the Company and is independent of the management. Copy of the draft letter for appointment of Dr. Dangi as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company during normal business hours on any working day, excluding Saturday.

The Board considers that his continued association would be of immense benefit to the Company and it is desirable to continue to avail services of Dr. Dangi as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Dr. Dangi as an Independent Director, for the approval by the Members of the Company.

Except Dr. Dangi, being an appointee, 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. 7. This Explanatory Statement may also be regarded as a disclosure under Clause 49 of the Listing Agreement with the Stock Exchange.

Item No. 8 – Appointment of Dr. V. S. Sohoni as an Independent Director

Dr. V. S. Sohoni is a Non-Executive Independent Director of the Company and retires at this Annual General Meeting under the provisions of the erstwhile Companies Act, 1956 and the Articles of Association of the Company. Dr. Sohoni being eligible and offering himself for appointment, is proposed to be appointed as an Independent Director for five (5) consecutive years for a term upto March 31, 2019. A notice has been received from a member proposing Dr. Sohoni as a candidate for the office of Director of the Company.

In the opinion of the Board, Dr. Sohoni fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder for his appointment as an Independent Director of the Company and is independent of the management. Copy of the draft letter for appointment of Dr. Sohoni as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company during normal business hours on any working day, excluding Saturday.

The Board considers that his continued association would be of immense benefit to the Company and it is desirable to continue to avail services of Dr. Sohoni as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Dr. Sohoni as an Independent Director, for the approval by the Members of the Company.

Except Dr. Sohoni, being an appointee, 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. 8. This Explanatory Statement may also be regarded as a disclosure under Clause 49 of the Listing Agreement with the Stock Exchange.

Item No. 9 – Appointment of Mr. Homi Khusrokhan as an Independent Director

Mr. Homi Khusrokhan is a Non-Executive Independent Director of the Company and retires at this Annual General Meeting under the provisions of the erstwhile Companies Act, 1956 and the Articles of Association of the Company. Mr. Khusrokhan being eligible and offering himself for appointment, is proposed to be appointed as an Independent Director for five (5) consecutive years for a term upto March 31, 2019. A notice has been received from a member proposing Mr. Khusrokhan as a candidate for the office of Director of the Company.

In the opinion of the Board, Mr. Khusrokhan fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder for his appointment as an Independent Director of the Company and is independent of the management. Copy of the draft letter for appointment of Mr. Khusrokhan as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company during normal business hours on any working day, excluding Saturday.


The Board considers that his continued association would be of immense benefit to the Company and it is desirable to continue to avail services of Mr. Khusrokhan as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Khusrokhan as an Independent Director, for the approval by the members of the Company.

Except Mr. Khusrokhan, being an appointee, 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. 9. This Explanatory Statement may also be regarded as a disclosure under Clause 49 of the Listing Agreement with the Stock Exchange.

Item No.: 10 – Remuneration to Non Whole-time Directors

In the changing scenario of globalization and highly competitive environment, the Company looks forward to the valuable guidance and immense benefit which it can derive from the experience of the non whole-time Directors.

In appreciation of the various services rendered by the non whole-time Directors of the Company and with the increasing activities of the Company and additional work involved, it is considered desirable to pay them remuneration by way of commission not exceeding the limits laid down under the provisions of Section 197 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 and Article 117 of the Articles of Association of the Company. This would be in addition to the sitting fees paid for each meeting of the Board or Committee thereof, attended by them.

It is proposed that the Board of Directors be authorized to pay them a Commission upto 1% of the net profits of the Company as mentioned in the Resolution, for a period of five (5) years commencing from financial year ending March 31, 2015.

All the Directors, except Mr. K.G. Ananthakrishnan, President & Managing Director may be deemed to be concerned or interested in the Resolution set out at Item No. 10, to the extent that Commission may be paid to them.

Item No.: 11 – Approval of remuneration of the Cost Auditor for the financial year ended March 31, 2015

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, 2015 at the remuneration of ` 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, 2015.

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. 11.

By Order of the Board of Directors

Sachin GaikwadMumbai, May 16, 2014 Company Secretary

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


Instructions for Electronic Voting (e-Voting)

E-voting Facility

Pursuant to Section 108 of the Companies Act, 2013 and applicable rules thereunder and Clause 35B of the Equity Listing Agreement, the Company is pleased to offer e-voting facility for the members to enable them to cast their votes electronically. For this purpose, the Company has signed an agreement with the Central Depository Services (India) Limited (“CDSL”) for facilitating e-voting.

The instructions for members for voting electronically are as under:-(A) In case of members receiving e-mail (i) If you are holding shares in demat form and had logged on to www.evotingindia.com and cast your

vote earlier for Electronic Voting Sequence Number (“EVSN”) of any company, then your existing login id and password are to be used.

(ii) Log on to the e-voting website www.evotingindia.com. (iii) Click on “Shareholders” tab to cast your votes. (iv) Select the EVSN along with “Fulford (India) Limited” from the drop down menu and click on Submit. (v) Now, fill up the following details in the appropriate boxes:

For Members holding shares in Demat Form

For Members holding shares in Physical Form

User-ID For NSDL: 8 Character DP ID followed by 8 Digits Client IDFor CDSL: 16 digits beneficiary ID

Folio Number registered with the Company

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

•Memberswhohave not updated theirPAN with the Company/Depository Participant are requested to use the first two letters of their name and the last 8 digits of the demat account/folio number in the PAN field.

•In case the folio number is less than8 digits, enter the applicable number of 0’s before the number after the first two characters of the name in CAPITAL letters. Eg. If your name is Ramesh Kumar with folio number 100 then enter RA00000100 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.

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.Please enter the DOB or Dividend Bank Details in order to login. If the details are not recorded with the depository or company please enter the number of shares held by you as on the cut off date in the Dividend Bank details field.


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

(vii) Members holding shares in physical form will then reach directly to the EVSN selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily change their login password in the new password field. The new password has to be minimum eight characters consisting of at least one upper case (A-Z), one lower case (a-z), one numeric value (0-9) and a special character (@ # $ % *). 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.

(viii) You can also update your mobile number and e-mail ID in the user profile details of the folio which may be used for sending communication(s) regarding CDSL e-voting system in future. The same may be used in case the member forgets the password and the same needs to be reset.

(ix) For members holding shares in physical form, the password and default number can be used only for e-voting on the resolutions contained in this AGM Notice.

(x) Click on the relevant EVSN on which you choose to vote.

(xi) 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 the option NO implies that you dissent to the Resolution.

(xii) Click on the “Resolutions File Link” if you wish to view the entire Resolutions.

(xiii) 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.

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

(B) In case of members receiving the physical copy of Notice of AGM (for members whose e-mail IDs are not registered with the company/depository participant(s) or requesting physical copy):

Please follow all steps from sl no. (ii) to sl no. (xiv) above, to cast vote.

(C) Note for Institutional Shareholders

• Institutional shareholders (i.e. other than Individuals, HUF, NRI etc.) are required to log on tohttps://www.evotingindia.co.in and register themselves as Corporates.

• A scannedcopyof theRegistrationFormbearing the stampand signof the entity shouldbeemailed to [email protected].

• Afterreceivingthelogindetailstheyhavetocreateacomplianceuserwhowouldbeabletolinkthe account(s) for which they wish to vote on.

• The listof accounts shouldbemailed [email protected] accounts they would be able to cast their vote.

• AscannedcopyoftheBoardResolutionandPowerofAttorney(POA)whichtheyhaveissuedin favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.

(D) The voting period begins on, Monday, July 28, 2014 from 9.00 hrs. and ends on Wednesday, July 30, 2014 at 17.00 hrs. During this period shareholders’ of the Company, holding shares either in physical form or in dematerialised form, as on the cut-off date July 4, 2014 may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter. Once the vote on a resolution is cast by the shareholder, the shareholder shall not be allowed to change it subsequently.

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


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DIRECTORS’ REPORT

The Directors hereby present the Sixty-Sixth Annual Report together with the Audited Accounts of the Company for the fifteen months period ended March 31, 2014.

FINANCIAL RESULTS

January 1, 2013 to March 31, 2014

` in Million

January 1, 2012 to December 31, 2012

` in Million

Turnover (Net) 2,696.36 2,153.72

Profit/(Loss) before tax 54.30 (72.49)

Less: Tax (Credit)/Expense (Current Tax, Deferred Tax & Fringe Benefit Tax) 9.96 (22.57)

Add: Tax adjustment for previous years (0.32) —

Profit/(Loss) after tax 44.66 (49.92)

Balance in Profit and Loss Account 331.68 386.13

Amount available for appropriation 376.34 336.21

Out of which the following sums have been appropriated:

Proposed Dividend 7.80 3.90

Corporate Tax on Dividend 1.33 0.63

General Reserve 3.35 —

Balance carried to Balance Sheet 363.86 331.68

REVENUE

Our total income during the fifteen month period increased to ` 2,822 million from ` 2,250 million in the previous year, at a growth rate of 25.4% (the annualized growth is 20.3%).

PROFIT

The Operating Profit before depreciation amounted to ` 69.5 million (2.47% of revenue) as against ` -55.4 million (-2.46% of revenue) in the previous year. The net profit after tax was ` 44.6 million (1.58% of revenue) as against ` -49.9 million (-2.21% of revenue) in the previous year.

LIQUIDITY

Your Company continues to be debt-free and maintain sufficient cash to meet our objectives. During the fifteen months period, the internal cash flows have more than adequately covered working capital requirements and dividend payments. As on March 31, 2014 we had cash and bank balance of ` 1,297 million as against ` 1,114 million in the previous year.

DIVIDEND

The Directors recommend a dividend of ` 2/- per equity share of ` 10/- each for the fifteen months period ended March 31, 2014. If the proposed dividend is approved by the Members at the Annual General Meeting, the total dividend payout will be ` 7,800,000/-. The tax on dividend payout borne by the Company will be ` 1,325,610/-.


MANAGEMENT DISCUSSION AND ANALYSIS1. India Healthcare Environment: Current Status and Recent Developments The healthcare sector in India is expected to reach about ` 8,700 billion in 2017 from ` 3,600 billion in

2012/13, at a 19% CAGR. Total Indian health spending is conventionally estimated at a little over 4% of GDP. India currently spends only 1.2% of its GDP on publicly funded health care. Private sector’s share in healthcare delivery is expected to increase from 66% in 2005 to 81% by 2015.

Key factors influencing growth in the healthcare sector are: a) Growth in population: India's population has increased at a CAGR of 1.64% between 2001-

2011. As per Census of India projections, the population is expected to increase to 1,400 million by 2026, an annual increase of 1.2% from 2001. The proportion of working population (15-59 years) is expected to rise from 57.7% in 2001 to 64.3% in 2026, while older ages (60 and above) would more than double to 173 million in 2026.

b) Increasing incidence of diseases: Non-communicable diseases (NCDs) (such as cardio-vascular disease, chronic obstructive pulmonary disease, cancer, diabetes) account for nearly half of all deaths in India. More than 20% of Indian population has at least one chronic disease and more than 10% have more than one chronic disease. Early detection and effective control of these non-communicable diseases are among policy goals of the 12th Five Year Plan.

c) Increasing affordability: India's per capita disposable income is expected to increase by about 1.6 times to around ` 140,000 per annum by 2017. The percentage of families counted as “high income” is expected to double by 2025, up from 20% in 2010. Healthcare will inevitably see an increase in spending as families at the bottom of the pyramid move above the poverty line.

d) Rise in insurance: Health insurance premiums are expected to increase at a CAGR of 30% during the time period 2012–14. With increasing number of companies offering insurance cover to their employees, the healthcare insurance business in India is set to expand further. Health insurance penetration is expected to increase to 20% by 2015, up from 15% in 2010. This is still low but will have a real impact on both attitudes and spending when it comes to healthcare.

e) Government Schemes: Schemes backed by Central and State Governments, such as Aarogyasri in erstwhile Andhra Pradesh, are making healthcare services affordable to the large sector of Indian society below the poverty line. This is also expected to result in higher ability of hospitals to invest in infrastructure, needing only to recoup marginal costs with the certainty that the beds they provide in specialty hospitals will be filled. The Planning Commission for India instituted a High Level Expert Group (HLEG) on Universal Healthcare Coverage (UHC). Subsequently, the country’s Twelfth Five Year Plan projected an increase in public health spending to 2.5% of GDP by 2017. The Twelfth Five Year Plan focusses on providing universal healthcare, strengthening healthcare infrastructure, promoting research and development (R&D) and enacting strong regulations for the healthcare sector.

In the Twelfth Five Year Plan the central outlay for health has been increased by 200% to ` 3,000 billion compared to the actual outlay of ` 995 billion in the Eleventh Five Year Plan. This outlay will be directed towards building on the initiatives taken in the Eleventh Plan period, for extending the outreach of public health services, and for moving towards the long-term objective of establishing a system of universal health coverage. Despite efforts by the government to provide affordable access to the decentralized public health system, its expenditure on public health as a percentage of GDP is low.

The public health care system has been strengthened since the start of the 21st century by initiatives such as the National Rural Health Mission (NRHM) and the Rashtriya Swasthya Bima Yojana (RSBY). RSBY scheme provides smart card-based cashless health insurance cover of ` 30,000 per family per annum on a family floater basis to BPL families in the unorganized sector, with the premium shared on 75:25 basis by Central and State governments. In case of States of the North-Eastern region and Jammu and Kashmir, the premium is shared in the ratio of 90:10. The scheme provides for portability of smart card by splitting the card value for migrant workers.


f) Growing health awareness and precautionary treatments coupled with improved diagnostics are resulting in an increase in hospitalization. Consumption in Hospital setting will rise to a considerable 25-30% share of the Pharmaceutical Market. The nature and mix of hospitals and care delivery center will undergo major shift as a result, we expect hospital segment to grow well above 20% and reach a size of ` 840 billion.

Recent Trends in healthcare delivery include: • Telemedicine is a fast-emerging sector in India. In 2012, the telemedicine market in India was

valued at ` 450 million, and is expected to rise at a CAGR of 20 per cent, to ` 1,150 million by 2017. Telemedicine can bridge the rural-urban divide in terms of medical facilities, extending low-cost consultation and diagnosis facilities to the remotest of areas via high-speed internet and telecommunication.

• Mobile-based health delivery – Currently, there are over twenty mhealth (mobile health) initiatives in the country for spreading awareness about family planning and other ailments. Mobile health industry in India is expected to reach ` 3.7 billion by 2017.

2. Indian Pharmaceutical Market: Key Trends India's pharmaceutical market is expected to touch ` 1,424 billion in sales by 2018 from the current

` 823 billion in 2013. The market is expected to grow at a Compounded Annual Growth Rate (CAGR) of 12% over the 2013-18 period.

The once highly fragmented Indian Pharmaceutical Industry is undergoing strategic consolidations whereby as per IMS data top 20 pharmaceutical companies account for >60% of total market share. While the market continues to be dominated by Indian Pharmaceutical Companies, Multi-National Companies (MNCs) have been making inroads by launching products from their global portfolio (including innovative patented drugs) and enhancing reach through expansion of own field force or via partnerships.

The Indian Pharmaceutical market is expected to grow due to a variety of drivers: • Rapid socio-economic changes towards more disposable incomes and urbanization have

led to a rise in lifestyle diseases. The population affected by these diseases, such as obesity, cardiovascular disease, stroke, cancer and diabetes, is set to double by 2020.

• Thisincreasedburdenofdiseasewillfuelthedemandforqualityandaffordabletreatmentinthedomestic market.

• Improvements in healthcare infrastructure, improved healthcare financing due to insurancepenetration and rising disposable income levels will also contribute to driving growth in the market.

3. Opportunities and Challenges

3.1 Opportunities With an estimated CAGR of 11-12% for next five year timeframe, outlook for the Indian

Pharmaceutical Market remains largely positive. The main drivers continue to be increase in disposable income for the middle class; increase in prevalence of chronic diseases; increase in healthcare related insurance penetration; development of healthcare infrastructure in metros and smaller towns; and increase in healthcare spend by the Government.

The Government, along with participation from the private sector, is planning to invest significantly in healthcare sector and intends to make India one of the top five global pharmaceutical innovation hubs by 2020. Health has been identified as one of key focus areas by the new Government. The Government's intent, increased health insurance coverage, improved healthcare delivery and diagnostic services can help redefine the contributions of pharmaceutical sector for a healthier India.

Tier 1 cities will continue to contribute to market growth of the pharmaceutical sector. The increase in per capita income of Tier 2 and rural markets will provide companies with the

opportunity to extend geographical coverage and develop innovative business models. Patient-centric models such as Integrated Disease Management Programs, disease awareness

through the use of technology (telecom, internet) will enable pharmaceutical companies to capture opportunities in the Indian Pharmaceutical Market.


3.2 Challenges Lack of skilled healthcare providers and issues of availability and access to healthcare in the

lower town classes and rural areas continue to remain as challenges for the industry. As per WHO estimates, India has just six doctors per 10,000 people. India lags in broader measures too, most notably in health insurance – less than 20% of Indians are covered under insurance.

Further, with the population growing at about 1.3% annually, the patient pool is expected to increase by nearly 20% by the year 2020.

The market size and growth has been adversely impacted by The Government of India’s “New Pharmaceutical Policy” covering 348 essential medicines and 614 formulations. As per IMS estimates, due to this new pricing policy, the market value is expected to erode by -2% (` 15 billion), and the growth is expected to be around 12-13% in first full year of policy implementation.

In addition to price control of essential medicines, uncertainties and complexities in the regulatory and Intellectual Property environment continue to pose significant challenges to research driven global pharmaceutical companies operating in the Country. Due to stringent clinical trial guidelines and long approval lead time, launch of new innovative products is expected to be delayed in the country. Further, Intellectual Property environment for patented products has been witnessing a number of challenges around patent revoking, patent infringements and compulsory licensing.

Counterfeiting is another serious concern of the Pharmaceutical Industry and the public at large. The Company has initiated various measures to combat counterfeiting. These include: training of distributors and pharmacists, use of innovative packaging, scrambled images, printing and holographic foils on blisters, in shrink sleeves and on primary cartons.

Foreign exchange rate fluctuations have adversely impacted the profitability of your Company in 2013-2014. Your Company has taken steps to mitigate the foreign exchange risk.

Your Company has a global-standard risk management program in place that meets its specific needs of identification, assessment and monitoring of risks at different levels and ensures mitigation of the same in an appropriate manner.

4. Business Performance The Company has only one reportable business segment which is “Pharmaceuticals”.

Your Company operates in the following therapeutic areas: Dermatology, Hepatitis, Oncology, Anti-Histamine and Anti-Infectives. The Company’s product portfolio is balanced and provides therapies for both acute and chronic health conditions.

In Dermatology, key brands such as Dipsalic, Elocon and Quadriderm continued to be in leadership positions (amongst Top 5 brands) in their respective market segments. As per IMS (MAT 2014 March) data, Dipsalic, Quadriderm and Elocon are ranked No. 2, No. 2 and No. 3 brands respectively in their competing therapy areas.

In Specialty Care (Hepatitis and Oncology), your Company's key brands such as ViraferonPeg and Temodal continue to maintain market leadership in their respective segments, though there is high generic competition in these therapies.

5. Internal Control System and its 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. 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, Companies 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 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.

6. Material Development in Human Resources/Industrial Relations One of the Company's strategic priorities is to deliver a strong culture with engaged and empowered

employees by developing diverse talent and fostering innovative thinking.

We continued to strengthen our efforts towards development & wellbeing 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 certain teams, we have taken Business Unit specific modules also like Excel training for Oncology team, Session on “Power of saving lives” for Virology team, etc.

• 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 leaders 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 third 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 second 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 connect with employees. Apart from the Company town hall meetings, connect was established with employees on periodic basis through tele-calls, 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 organisation. Employee voice survey is conducted at regular intervals to collect feedback for the betterment of the organization.

The total number of employees as on March 31, 2014 was 444.


7. Financial Condition

Sources of Funds:

a. Share Capital

At present, we have only one class of shares – equity shares at par value of ` 10/- each. Our authorized share capital is ` 50 million, divided into 5 million equity shares of ` 10/- each. The issued, subscribed and paid up share capital stood at ` 39 million as at March 31, 2014.

b. Reserves & Surplus

Capital Reserve:

The capital reserves as at March 31, 2014 is ` 0.05 million same as the previous year.

Securities Premium Reserve

The balance as at March 31, 2014 is ` 395 million, same as the previous year.

General Reserve

An amount of ` 3.3 million, representing 7.5% of the net profit for the year ended March 31, 2014, was transferred to the general reserve account from the surplus. The balance as at March, 2014 amounted to ` 684 million (previous year ` 681 million)

Surplus

The balance retained in the Surplus as at March 31, 2014 amounts to ` 364 million after providing the final dividend for the year of ` 7.80 million and dividend tax of ` 1.3 million.

Shareholder’s Fund

The total shareholder’s funds increased to ` 1,482 million as at March 31, 2014 from ` 1,447 million as at December 31, 2012.

Application of Funds

a. Fixed Assets

Additions to Gross Block

During the fifteen month period, we capitalized ` 0.3 million to our gross block comprising investment in computers and office equipment.

Deductions to Gross Block

During the fifteen month period, we deducted ` 13 million from the gross block on disposal of various assets.

b. Deferred Tax Assets / Liabilities

The deferred tax assets as at March 31, 2014 amount to ` 46.7 million as against ` 59.6 million during the previous year.

Deferred tax assets primarily comprise deferred taxes on fixed assets, employees’ benefits accruals, trade receivables and other provisions which are not tax-deductible in the current year.

c. Trade Receivables

Your Company sells in cash to the trade customers. Credit is extended to the institutional customers. Trade receivables amounted to ` 31.8 million (net of provision for doubtful debts amounting to ` 8.6 million) as at March 31, 2014 compared to ` 64.5 million (net of provision for doubtful debts amounting to ` 9.2 million) as at December 31, 2012. The Days Sales Outstanding of 5 days in the current year as compared to 11 days in the previous year.

d. Cash and Cash Equivalents

Our treasury policy calls for investing cash surplus in deposits with highly rated scheduled banks and financial institutions.


e. Loans and Advances and Other Non-Current Assets

Long Term Loans and Advances and Other Non-Current AssetsIn ` Million

Particulars 2013-14 2012

Security Deposits 53.8 54.5

Other Deposits 12.0 11.4

Advance recoverable in cash 1.8 6.5

Current Taxation (Net of Provision) 205.2 117.5

Margin Money & Accrued Interest 6.7 7.6

Total 279.5 197.5

Security deposits amount to deposits with the government institutions towards earnest money deposit, deposit with sales tax authorities and rental deposits.

Short Term Loans and AdvancesIn ` Million


Advance recoverable in cash 21.1 32.1

MAT Credit Entitlement 6.1 -

Other Receivables & Accrued Interest 24.5 67.3

Total 51.7 99.4

Advance recoverable represents advances to vendors, prepaid expenses and advances to employees.

f. Liabilities

Current Liabilities and Trade PayablesIn ` Million


Trade Payables 465.2 399.9

Statutory Dues 16.8 19.9

Employee Benefits Payable 27.0 49.9

Advance from Customers 4.4 1.8

Unpaid Dividends 0.7 0.8

Total 514.1 476.3

Employee benefits payable includes accrual for leave, gratuity, provision for incentives payable to employees. Unpaid dividend represents dividends paid, but not en-cashed by the shareholders, and are represented by a bank balance of an equivalent amount. There are no amounts due for payment to the Investor Education and Protection Funds under Section 205C of the Act as at March 31, 2014.


g. Provisions

Short Term ProvisionIn ` Million

Particulars 2013-14 2012Provision for Employee Benefits 6.1 6.0Proposed Dividend 7.8 3.9Tax on Proposed Dividend 1.3 0.7Provision for Non- Sellable Returns 15.2 26.5Total 30.4 37.1

Proposed dividend represents the final dividend recommended. On approval by our Members, this will be paid after the Annual General Meeting. Employee benefits represent the provision for unavailed leaves valued on an actuarial basis.

8. Operational Performance Your Company recorded sales of ` 2,696 million and grew by 25% during the fifteen month period

ending March 31, 2014 compared to the previous year.

The growth for the fifteen months period was 25.6%, excluding the impact of relinquishment of rights of Remicade. During the fifteen month period ended March 31, 2014 growth has been achieved in key brands viz., Viraferon Peg, Quadriderm, Elocon, Noxafil and Nasonex.

Your Company has initiated several actions to accelerate growth, the result of these new initiatives should be visible in 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 has earned a profit of ` 44.6 million during the fifteen month period ended March 31, 2014 as compared to a loss of ` 49.9 million during the previous year. The profits were impacted due to relinquishment of exclusive marketing rights for Remicade, exchange impact due to extreme volatility of dollar.

9. Value Added By the Company Contribution to the Government as Taxes & Other Levies

During the fifteen month period ended March 31, 2014 the Company has contributed ` 330 million to the government by way of taxes and other levies as under:

In ` Million

Particulars 2013-14Income Tax 84.5Other Taxes and levies 244.9Tax on Dividend 0.6Total 330.0

Distribution to Shareholders as Divided

The Company has proposed a final dividend of ` 7.8 million for the year.

Payments to Employees as Remuneration The total remuneration paid to the employees including benefits during the fifteen month period

amounts to ` 505 Million.

Retention by the Company The Company has retained ` 35.5 Million from the profit of the current year.


10. Outlook The Management is cautiously optimistic about 2014-2015 and is taking various steps to improve

operational performance of the Company. 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 2014-2015. Barring unforeseen developments, the Management is hopeful of demonstrating improvement in performance of your Company.

Several of the new initiatives such as project Sambhav, geographic expansion, investments for new product launches, promotional expenses for existing key products necessitating incremental investments and outlays referred to above are designed to make your Company fit for growth, in the medium and long term.

DIRECTORS

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

Mr. Sandeep Sharma was appointed as an Additional Director with effective August 2, 2013. Mr. Sandeep Sharma offers himself for appointment as a Director of your Company.

The Companies Act, 2013 provides for appointment of Independent Directors. Sub-section (10) of Section 149 of the Companies Act, 2013 provides that Independent Directors shall hold office for a term of up to five consecutive years on the Board of a Company; and shall be eligible for re-appointment on passing a special resolution by the shareholders of the Company. Sub-section (13) states that the provisions of retirement by rotation as defined in sub-sections (6) and (7) of Section 152 of the Companies Act, 2013 shall not apply to such Independent Directors. Therefore, Dr. Ajit Dangi, Mr. Homi Khusrokhan and Dr. V.S. Sohoni, the Non-executive Independent Directors of the Company, who are going to complete their present term at the ensuing Annual General Meeting of the Company and being eligible and seeking re-appointment, be considered by the shareholders for re-appointment for a term up to five consecutive years.

A brief resume of the Directors proposed to be appointed/re-appointed as required under Clause 49 of the Listing Agreement are provided in the Notice of the Annual General Meeting forming part of this Annual Report.

Mr. M. K. Sharma, Mr. Christopher McNamara, Ms. Hwee Ping Chua and Mr. Rajesh Marwaha resigned from the Board of Directors of the Company with effect from March 31, 2014, July 30, 2013, August 1, 2013 and June 27, 2013 respectively.

Ms. Caroline Litchfield was appointed as on Additional Director with effect from August 2, 2013. Ms. Litchfield resigned from the Board w.e.f. January 30, 2014.

Mr. Giridhar Sanjeevi was appointed as an Alternate Director to Ms. Caroline Litchfield with effect from August 2, 2013. He ceased to be the Alternate Director to Ms. Litchfield with effect from January 30, 2014 upon resignation of Ms. Litchfield from the Board of Directors of the Company.

The Board of Directors placed on record, its sincere appreciation and gratitude for the dedicated and valuable contribution made by Mr. M.K. Sharma, Mr. Christopher McNamara, Ms. Hwee Ping Chua, Mr. Rajesh Marwaha, Ms. Caroline Litchfield and Mr. Giridhar Sanjeevi.

FIXED DEPOSITS

The Company has not accepted any deposits during the period under review. Also, there are no fixed deposits outstanding as on March 31, 2014.

RELATED PARTY TRANSACTIONS

Related party transactions have been disclosed in the notes to the accounts.


INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956 (“THE ACT”)

Information required to be annexed to this report in accordance with clause (e) of sub–section (1) of Section 217 of the Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given as Annexure I.

Information in accordance with sub–section (2A) of Section 217 of the Act read with the Companies (Particulars of Employees) Rules, 1975 forms part of the Directors’ Report for the period ended March 31, 2014. However, as per the provisions of Section 219 (1)(b)(iv) of the Act the Directors’ Report and Accounts are being sent to all the Members of the Company, excluding the statement of particulars of employees under Section 217 (2A) of the Act. Any Member interested in obtaining a copy of the Statement may write to the Company Secretary at the Registered Office of the Company.

In accordance with sub–section (2AA) of Section 217 of the Companies (Amendment) Act, 2000 concerning ‘Directors Responsibility Statement’ and to the best of their knowledge and belief and according to the information and explanation obtained by them, your Directors confirm that:

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

(ii) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the period ended March 31, 2014 and of the profit of the Company for that period;

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

(iv) the annual accounts are prepared on a going concern basis.

AUDITORS

M/s. Lovelock & Lewes, Chartered Accountants, retire as Auditors of the Company at the conclusion of the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment. The Company has received a Certificate from the Auditors to the effect that their appointment, if made, would be in accordance with the provisions of Section 139 and 141 of the Companies Act, 2013. The Board recommends their re-appointment.

COST AUDIT

The Directors have appointed Mr. Vishesh Naresh Patani as Cost Auditor to conduct the Cost Audit for the year ended March 31, 2015.

The Cost Audit Report of the Company for the year 2012 was due to be filed by 30.06.2013 and the same was filed by the Company on 28.06.2013. The due date for filing the Cost Audit Report of the Company for the fifteen months period ended March 31, 2014 is 30.09.2014.

CORPORATE GOVERNANCE

A report on the Corporate Governance Code along with a certificate from the Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to this Report.

COMPLIANCE WITH THE CODE OF CONDUCT

The Company has put in place, a Code of Conduct effective February 9, 2005, for its Board Members and Senior Management personnel. Declarations of compliance with the Code of Conduct have been received from all Board Members and Senior Management personnel. A certificate to this effect from Mr. K.G. Ananthakrishnan, President & Managing Director forms a part of this Report.


CHANGE IN ACCOUNTING YEAR OF THE COMPANY

In the meeting of the Board of Directors of the Company held on August 2, 2013 it was decided to change the period of Financial Year of the Company from January – December to April – March. The Financial Year under review was accordingly extended by additional period of three months. The Financial Year under review was accordingly for a period of fifteen months starting from January 1, 2013 and ending on March 31, 2014.

DELISTING OF EQUITY SHARES OF THE COMPANY FROM BSE LIMITED

On April 25, 2014, the Board of Directors of Fulford (India) Limited (“Target Company”) received a letter from Dashtag (“Acquirer”), the promoter of the Target Company 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.

The Acquirer stated that its objective in making the Delisting Offer was inter-alia, to obtain full ownership of the Target Company, which would provide enhanced operational flexibility to the Acquirer’s business in India. Additionally, the Acquirer believed that on account of the low liquidity in the Target Company's equity shares, the Delisting Offer would provide the Public Shareholders with an ability to exit fully at an attractive price. The Board of Directors of the Acquirer approved the Delisting Offer and resolved that an acquisition of equity shares from the Public Shareholders pursuant to the Delisting Offer may be made at an indicative price of ` 1,150 (Rupees One Thousand One Hundred and Fifty Only) per equity share (“Indicative Price”). However the Indicative Price is neither a ceiling nor a maximum price for the purposes of reverse book building process under the delisting regulations, and the Public Shareholders are free to tender their equity shares at any price higher than the Floor Price of ` 701.71 (Rupees Seven Hundred One and Seventy One paise only) per equity share. The Acquirer is of the view that the Indicative Price is an attractive price for the Public Shareholders of the Target Company subject to the Acquirer’s right to accept or reject the price finally discovered pursuant to the reverse book building process under the Delisting Regulations.

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 the members of the Target Company for Delisting Offer through Postal Ballot in terms of Delisting Regulations.

The Postal Ballot notices will be dispatched to the members by May 17, 2014. In case of members who are going to vote through physical postal ballot form has to duly complete postal ballot form with assent (for) or dissent (against) and send it to scrutinizer before June 18, 2014 to be eligible for being considered, failing which, it will be strictly treated as if no reply has been received from the member. The Company is also going to offer e-voting facility to members to enable them to cast their votes electronically. E-voting facility would be available for a period of thirty days i.e. from May 19, 2014 to June 18, 2014.

SUBSIDIARY COMPANY

Pursuant to Section 212 of the Companies Act, 1956, the Annual Accounts for the period ended March 31, 2014 as also the Auditors’ and Directors’ Report in respect of Schering-Plough (India) Private Limited are attached to the Accounts of the Company.

As per Clause 32 of the Listing Agreement entered into with BSE Limited, the consolidated financial statements of the Company with its subsidiary are also enclosed.

CORPORATE SOCIAL RESPONSIBILITY

Your Company’s Parent Company is committed to doing well for the community at large and has implemented the following projects in India:

MSD for Mothers is a 10-year, half-billion-dollar Global Merck initiative to help create a world where no woman dies from complications of pregnancy and childbirth. With an investment in India, of


` 600 million (USD 10 million) over three-years, our work aims to reach nearly 500,000 pregnant women with the following partners:

1. Hindustan Latex Family Planning Promotion Trust: Organizing private providers under the Merrygold social franchise network, to provide quality, affordable maternal healthcare in Rajasthan.

2. Jhpiego with the Federation of Obstetric and Gynaecological Societies of India (FOGSI): Improving the quality of care offered by private providers through training, quality improvement, and an improved accreditation system in Uttar Pradesh and Jharkhand.

3. Pathfinder International with World Health Partners: Bringing maternal healthcare closer to women in remote areas through telemedicine and linking them to care throughout their pregnancy by integrating the public and private sectors in Uttar Pradesh.

4. White Ribbon Alliance with Gram Vaani: Designing a free phone-based system for women to rate the care they receive and strengthen the quality of maternal health services in Jharkhand.

Safe Water Network is a three-year, ` 90 million (USD 1.5 million) program to increase access to safe water and reduce the impact of water-borne disease among impoverished communities in Andhra Pradesh, India.

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., Whitehouse Station, 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.

For and on behalf of the Board of Directors

Ajit DangiMumbai, May 16, 2014 Chairman

The references used in this write-up are from:

1. Planning Commission Report of the Steering Committee on Health for the 12th Five Year Plan

2. Planning Commission Review of National Rural Health Mission

3. Ministry of Health & Family Welfare Review Report 2012-13

4. Economic Survey 2013

5. IBEF update on Indian Healthcare sector (Mar 2014) – www. Ibef.org

6. IMS

Certificate of Compliance with the Code of Conduct

I, K.G. Ananthakrishnan, President & Managing Director of the Company, hereby declare that the Company has adopted a Code of Conduct for its Board Members and Senior Management, at a meeting of the Board of Directors held on February 9, 2005 and the Board Members and Senior Management have affirmed compliance with the Code of Conduct as applicable to them for the fifteen months period ended March 31, 2014.

For Fulford (India) Limited

K.G. AnanthakrishnanMumbai, May 16, 2014 President & Managing Director


ANNEXURE 1 TO THE DIRECTORS’ REPORT

Information pursuant to the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

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

FORM A

A. Power & Fuel Consumption 2013-14 20121. 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 ApplicableQuantity (Tonnes) Total CostAverage Rate

3. Furnace Oil Not ApplicableQuantity (K. Ltrs.)Total CostAverage Rate/Litre

4. Others/Internal Generation Not ApplicableQuantityTotal CostRate/Unit

B. Consumption per unit of Production Standards (If any) 2013-14 2012Products (with details) Unit Not ApplicableElectricityFurnace OilCoal (Specify quality)Others (Specify)

2. TECHNOLOGY ABSORPTION FORM B 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. 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 improvement and product development are the major benefits derived at as a result 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: 17.23Total Foreign exchange used:

On import of raw materials/finished goods 659.28On import of capital goods, spares and components —Expenditure in foreign currencies for business travels, subscription, honorarium, participants and others

10.97

Remittance during the year in foreign currency on account of dividend 2.92Royalty and Technical know-how —


Ajit DangiMumbai, May 16, 2014 Chairman


corporate governance report

1. company’s philosophy on code of governance:

Your Company is continuously striving to have a high level of Corporate Governance. Corporate Governance Structure in your Company is established to make sure that the Company is accountable to its owners – the shareholders. Corporate Governance for your Company goes beyond the Company’s relationship to its shareholders, because it reflects its relationship to society. Your Company’s objective is to balance fiduciary duty and accountability to generate long-term shareholder value, while also considering, in a transparent manner, the concerns of other stakeholders. Corporate Governance in your Company, provides the framework for attaining Company’s objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.

In essence, we believe that good Corporate Governance consists of a system of structuring, operating and controlling a Company with integrity and to achieve the following:

a culture based on a foundation of sound business ethics

fulfilling the long-term strategic goal of the owners while taking into account the expectations of all the key stakeholders, and in particular:

• considerandcarefortheinterestsofemployees,past,presentandfuture

• worktomaintainexcellentrelationswithbothcustomersandsuppliers

• takeaccountoftheneedsoftheenvironmentandthelocalcommunity

maintaining proper compliance with all the applicable legal and regulatory requirements under which the Company is carrying out its activities.

2. Board of Directors:

• CompositionoftheBoardofDirectors(Board):

The Board has a “balanced” membership, with representation of relevant areas of experience, types of expertise and backgrounds. The Board consists of an optimal blend of Company executives and independent professionals having an in-depth knowledge of the pharmaceutical industry and/or expertise in their area of specialization. The size and composition of the Board conforms to the requirement of the Corporate Governance Code under the Listing Agreement entered into with BSE Limited. None of the Directors is a member of more than ten Board level committees of public companies in which they are Directors, nor is a Chairman of more than five such committees. The composition of the Board, summary of their other Directorships and Board Committee Memberships of each of the Directors as on March 31, 2014, are as follows:

name of the Director category of Director 2

no. of other Directorship 3

attendance at Board Meeting

attendance at last agM held on

May 8, 2013

no. of other Board committees

Memberships 4

no. of Board committees

chairmanships 4

Dr. Ajit Dangi Chairman

NED-I 1 5 Present 1 –

Mr. K.G. Ananthakrishnan President & Managing Director

ED 3 5 Present – –

Dr. V.S. Sohoni NED-I 2 3 – 1 –

Mr. M.K. Sharma (Resigned w.e.f. March 31, 2014)

NED-I 13 5 – 8 –

Mr. Homi Khusrokhan NED-I 6 3 Present 4 3

Mr. Kevin Ali NED 4 – – – –

Mr. Sandeep Sharma (Appointed w.e.f. August 2, 2013)

NED 7 1 – – –

Ms. Caroline Litchfield (Appointed w.e.f. August 2, 2013 Resigned w.e.f. January 30, 2014)

NED NA – – NA NA


name of the Director category of Director 2

no. of other Directorship 3

attendance at Board Meeting

attendance at last agM held on

May 8, 2013

no. of other Board committees

Memberships 4

no. of Board committees

chairmanships 4

Mr. Giridhar Sanjeevi 5 (Appointed w.e.f. August 2, 2013; ceased to be a Director w.e.f. January 30, 2014)

AD NA 1 – NA NA

Ms. Hwee Ping Chua (Resigned w.e.f. August 1, 2013)


Mr. Christopher McNamara (Resigned w.e.f. July 30, 2013)


Mr. Rajesh Marwaha 6 (Resigned w.e.f. June 27, 2013)

AD NA 2 Present NA NA

notes: 1. An Independent Director is a Director who satisfies the criteria stipulated as per Clause 49 of the Listing Agreement & provisions of

Companies Act, 2013. 2. ED: Executive Director, NED: Non-Executive Director, NED-I: Non-Executive Director–Independent, AD: Alternate Director. 3. Includes Alternate Directorships and Directorships in Private Companies. In case of Directors who are foreign nationals and residing

abroad, it also includes their directorships in foreign companies incorporated abroad. 4. Includes Memberships and Chairmanships of Audit Committee and Shareholders’/ Investors’ Grievance Committee of public companies. 5. Was acting in the capacity of an Alternate Director to Ms. Caroline Litchfield. 6. Was acting in the capacity of an Alternate Director to Mr. Christopher McNamara.

• Appointment/re-appointmentofDirectors: The Company has provided brief resume(s) of the Directors seeking appointment/re-appointment

at the ensuing Annual General Meeting, in the Notice attached with the Annual Report.

• BoardMeetings: The Board meets at regular intervals to review the performance of the Company. A detailed agenda

is prepared in consultation with the President & Managing Director and Chairman. During the fifteen months period ended March 31, 2014, five Board Meetings were held on 25.2.2013, 8.5.2013, 2.8.2013, 25.10.2013 and 3.2.2014.

3. committees of Board:

a. audit committee: The Board has constituted an Audit Committee of qualified and competent members, in compliance

with the Listing Agreement, consisting of the following Directors:

(1) Mr. Homi Khusrokhan, Chairman

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

(3) Dr. Ajit Dangi

The Company Secretary is the Secretary to the Audit Committee.

The terms of reference stipulated by the Board for the Audit Committee contained in Clause 49 of the Listing Agreement are as follows:

(a) Overview of the Company’s Financial Reporting process and disclosure of financial information to ensure that the financial statements are correct, sufficient and credible.

(b) Reviewing with the Management, the quarterly, half yearly and annual financial statements before submission to the Board for approval, with particular reference to:

(i) Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of Clause (2AA) of Section 217 of the Companies Act, 1956.

(ii) Changes, if any, in accounting policies and practices and reasons for the same.

(iii) Major accounting entries involving estimates based on the exercise of judgment by management.


(iv) Significant adjustments made in the financial statements arising out of audit findings.

(v) Compliance with listing and other legal requirements relating to financial statements.

(vi) Disclosure of any related party transactions.

(vii) Qualifications in the draft audit report.

(c) Reviewing the adequacy of Internal Audit function.

(d) Reviewing with the Management, performance of Statutory and Internal Auditors, the adequacy of internal control systems and procedures.

(e) Discussing with the Internal Auditors, any significant finding and follow-up on such issue.

(f) Reviewing the findings of any internal investigations by the Internal Auditors in matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature, and then reporting such matters to the Board.

(g) Discussing with Statutory Auditors before the Audit commences, on the nature and scope of audit, as well as having post-audit discussion to ascertain any area of concern.

(h) Reviewing/recommending the appointment, re-appointment and replacement or removal of Internal, Statutory and Cost Auditors of the Company, fixation of remuneration/audit fees and also approval for payments for any other services rendered by them.

(i) Reviewing substantial defaults in the payment to the depositors and shareholders (in case of non-payment of declared dividends) and creditors.

(j) Reviewing the Management Discussion and Analysis of financial condition and results of operations.

(k) Reviewing the Statement of significant related party transactions submitted by the Management.

(l) Reviewing the risk assessment and minimization procedures to ensure that executive Management controls risk through means of a properly defined framework.

(m) Reviewing and monitoring the independence of auditors and effectiveness of audit processes.

(n) Approval or any subsequent modification of transactions of the Company with related parties.

(o) Scrutiny of inter-corporate loans and investments.

(p) Valuation of undertakings or assets of the Company, wherever it is necessary.

(q) Monitoring the end use of funds raised through public offers and related matters.

The Statutory Auditors and Internal Auditors are invitees at the Audit Committee Meetings. Mr. K.G. Ananthakrishnan, President & Managing Director and Mr. Giridhar Sanjeevi, Chief Financial Officer are also invitees at the Audit Committee Meetings. During the year, five Audit Committee Meetings were held on 25.2.2013, 8.5.2013, 2.8.2013, 25.10.2013 and 3.2.2014.

• AttendanceatAuditCommitteeMeetings:

Sr. no. name of Director no. of Meetings held no. of Meetings

attended

1. Mr. Homi Khusrokhan 5 3

2. Mr. M.K. Sharma 5 5

3. Dr. Ajit Dangi 5 5

4. Mr. Giridhar Sanjeevi 5 1

5. Mr. Rajesh Marwaha 5 2


b. nomination and remuneration committee:

The Board has constituted a Nomination and Remuneration Committee to consider below mentioned terms of reference:

1. Identifying the persons who are qualified to become Directors and who may be appointed in senior management.

2. Formulating the criteria for determining qualifications, positive attributes and independence of a Director.

3. Determine on behalf of the Board and the shareholders, Company’s policy on specific remuneration packages for Executive Directors, key managerial personnel and other employees.

4. To recommend to the Board of Directors the remuneration of the President & Managing Director and one level below the President & Managing Director.

5. Determining the Key Performance Indicators including weightages of President & Managing Director and his direct reportees and monitoring their performances.

6. Perform such functions as are required to be performed by the Nomination and Remuneration Committee; and

7. Such other matters as may, from time to time, be required by any statutory, contractual or other regulatory requirements to be attended to by such Committee.

The Company Secretary of the Company acts as the Secretary to the Nomination and Remuneration Committee.

composition of nomination & remuneration committee: (1) Dr. V.S. Sohoni, Chairman

(2) Mr. Homi Khusrokhan, Alternate Chairman

(3) Dr. Ajit Dangi

remuneration policy: The remuneration policy of the Company is directed towards rewarding performance. It is aimed

at attracting and retaining high caliber management talent by valuing their performance on the basis of their contribution during the year, considering the prevailing internal and external business environment and at the same time giving weightage to the prevailing competitive market practices.

• DetailsofRemunerationtoDirectors:

(1) The details of the remuneration paid to the President & Managing Director for the fifteen months period ended March 31, 2014 is given as under:

(`)

president & Managing Director

Salary and perquisites

annual Incentive#

contribution to pF and

Superannuation@total

Mr. K.G. Ananthakrishnan 71,01,045 3,860,442 9,08,509 1,18,69,996

# Annual Incentive paid to Mr. K.G. Ananthakrishnan is for the period January 1, 2012 to December 31, 2013 and is paid on the basis of Annual Incentive Plan adopted by the Company for the year 2012 and 2013.

@ In addition to above, Mr. K.G. Ananthakrishnan is eligible for gratuity as per the Payment of Gratuity Act, 1972 and encashment of vested leave as per the Company policy at the time of cessation from services.

Further, either party can terminate the contract of service by giving three months’ notice in writing. The severance fees payable will be decided as per the Company policy adopted from time to time.


(2) The remuneration to Non-Executive Directors comprises of sitting fees and commission. The Articles of Association of the Company have been amended vide special resolution passed by the shareholders at the Annual General Meeting held on June 16, 2000, permitting the Board to determine the Sitting Fees subject to the limits, if any, prescribed under the Companies Act, 1956. Overall limits in Commission payable has been approved by the shareholders vide special resolution passed at the Annual General Meeting held on April 27, 2009. The Company does not have any Stock Option Scheme.

The details of sitting fees, commission paid/payable to Non-Executive Directors towards Board and Committee Meetings for the fifteen months period ended on March 31, 2014 (excluding applicable taxes) are given below:

Non-ExecutiveDirectors Sitting Fees (in`)

commission (in`)*

Dr. Ajit Dangi 385,000 150,000

Mr. M.K. Sharma 270,000 150,000

Mr. Homi Khusrokhan 190,000 150,000

Dr. V.S. Sohoni 120,000 150,000

Due to absence of profits for the year ended December 31, 2012, no commission was paid to Non-Executive Directors in previous year.

* Provision made in the Accounts, will be paid during the financial year 2014-15.

• DetailsofsharesheldbyDirectors

None of the Directors hold any shares in the Company.

No payments have been made or transactions of a pecuniary nature have been entered into by the Directors with the Company.

c. Investors grievance and Stakeholders relationship committee:

The Board has formed the Investors Grievance and Stakeholders Relationship Committee earlier known as the Investors’ Grievance Committee to look into and ensure redressal of shareholders’ and investors’ grievances.

Composition of Committee as on March 31, 2014:

(1) Dr. Ajit Dangi, Chairman

(2) Mr. K.G. Ananthakrishnan

(3) Mr. Homi Khusrokhan

The Company Secretary is the Compliance Officer.

A Statement of the various complaints received and cleared by the Company during the period January 1, 2013 to March 31, 2014 is hereunder:

Sr. no. nature of complaint received resolved

1. Non-receipt of Dividend 12 122. Complaint received from Securities and Exchange Board of India

(SEBI) 1 13. Non-receipt of Share Certificates 2 24. Non-receipt of Annual Report 2 25. Non-receipt of DRF 2 2

total 19 19


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.

d. Share transfer committee:

In addition to the above, the Board has also formed a Share Transfer Committee. Composition of Committee as on March 31, 2014:

(1) Dr. Ajit Dangi, Chairman

(2) Mr. K.G. Ananthakrishnan

(3) Mr. Homi Khusrokhan

(4) Dr. V.S. Sohoni

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

4. general Body Meetings:

The last three years General Meetings were held as under:

Year Date time Location type of Meeting

2011 April 29, 2011 11.30 a.m.NSE Auditorium,

MumbaiAnnual General Meeting2012 April 25, 2012 11.30 a.m.

2013 May 8, 2013 11.30 a.m.

In all the above meetings, only those resolutions which were statutorily required to be passed as Special Resolutions were passed as such.

During the last year, there was no agenda item under Section 192A of the Companies Act, 1956, which required conduct of Postal Ballot.

During current financial year the Company is proposing to pass a Special Resolution for obtaining the approval of the members for Voluntary Delisting of Equity Shares of the Company from BSE Limited through Postal Ballot 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.



5. Disclosures:

a. There were no related party transactions made by the Company with its Directors or the Management, their subsidiaries, relatives, etc. which are of such nature to have a potential conflict of interest with the Company at large. Transactions with related parties are disclosed in Note No. 44 to the standalone financial statements and Note No. 34 to the consolidated financial statements in the Annual Report.

b. There has not been any significant change in the Accounting Policies during the year.

c. Keeping in line with the philosophy of Open Communication and Transparency practiced by the Company, a Whistle Blower Policy for vigil mechanism has been formulated. 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.

d. Adoption/Non-Adoption of the Non-mandatory requirements:

(i) The Chairman, Dr. Ajit Dangi is President & CEO of Danssen Consulting, a consultancy firm specializing in pharmaceuticals, life sciences and healthcare. His office is located in Mumbai and therefore, he has not sought maintenance of the Chairman’s Office at the Registered Office of the Company.

Further, the Company has not adopted the non-mandatory requirement of Independent Directors tenure not to exceed a period of nine years on the Board of the Company.

(ii) The Company does not send its half-yearly results to each household of shareholders since they are published in the newspapers and also posted on the website of the Company.

(iii) The Statutory Auditors have issued an unqualified opinion on the financial statements of the Company for the fifteen months period ended on March 31, 2014.

(iv) The Board of Directors of the Company consists of an optimal blend of Company Executives and Independent professionals having an in-depth knowledge of the Pharmaceutical Industry and/or expertise in their area of specialization.

Presentations are made at the Board Meetings on various functional aspects of the Company as well as on major developments and changes which act as a good training tool.

(v) At present, the Company does not have a mechanism for evaluating its Non-Executive Directors by peer group.

e. The Company has in place, risk assessment and minimization 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 a properly defined framework.

f. 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 promoter Dashtag, U.K. Out of this amount, ` 40,998,830/- was utilized towards geographical business expansion up to March 31, 2014. The balance amount of ` 361,501,170/- continues to be invested in fixed deposits with various banks. The Audit Committee reviews quarterly, the use/application of fund raised through preferential issue.

g. In terms of the requirement of Clause 49(V) of the Listing Agreement, the President & Managing Director and the Chief Financial Officer have made a certification to the Board of Directors in the prescribed format for the period under review, which has been reviewed by the Audit Committee and taken on record by the Board of Directors of the Company.


h. Disclosure of names of persons constituting ‘Group’ pursuant to Regulation 3(1)(e)(i) of the SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997:

(i) Merck & Co., Inc., Whitehouse Station, NJ, USA

(ii) Dashtag, U.K.

(iii) Organon Participations BV, Netherlands

(iv) Organon (India) Private Limited, India

i. Change in Accounting year of the Company:

In the meeting of the Board of Directors of the Company held on August 2, 2013 it was decided to change the period of Financial Year of the Company from January – December to April – March. The Financial Year under review was accordingly extended by additional period of three months. The Financial Year under review was accordingly for a period of fifteen months starting from January 1, 2013 and ending on March 31, 2014.

j. Delisting of equity shares of the Company from BSE Limited:

On April 25, 2014, the Board of Directors of Fulford (India) Limited (“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.

The Acquirer stated that its objective in making the Delisting Offer was inter-alia, to obtain full ownership of the Target Company, which would provide enhanced operational flexibility to the Acquirer’s business in India. Additionally, the Acquirer believed that on account of the low liquidity in the Target Company’s equity shares, the Delisting Offer would provide the Public Shareholders with an ability to exit fully at an attractive price. The Board of Directors of the Acquirer approved the Delisting Offer and resolved that an acquisition of equity shares from the Public Shareholders pursuant to the Delisting Offer may be made at an indicative price of ` 1,150 (Rupees One Thousand One Hundred and Fifty Only) per equity share (“Indicative Price”). However the Indicative Price is neither a ceiling nor a maximum price for the purposes of reverse book building process under the Delisting Regulations, and the Public Shareholders are free to tender their equity shares at any price higher than the Floor Price of ` 701.71 (Rupees Seven Hundred and One and Seventy One paise) per equity share. The Acquirer is of the view that the Indicative Price is an attractive price for the Public Shareholders of the Target Company subject to the Acquirer’s right to accept or reject the price finally discovered pursuant to the reverse book building process under the Delisting Regulations.

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 the members of the Target Company for Delisting Offer through Postal Ballot in terms of Delisting Regulations.



k. Subsidiary Companies:

Schering-Plough (India) Private Limited is the only subsidiary of the Company.

l. Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification:

As required by Clause 49(V) of the Listing Agreement, the CEO and CFO certification of the Financial Statements, the Cash Flow Statement and the Internal Control Systems for financial reporting has been obtained from Mr. K.G. Ananthakrishnan (President & Managing Director) and Mr. Giridhar Sanjeevi (CFO).

m. Code of Conduct for Prevention of Insider Trading:

The Company had adopted a Code of Conduct for Prevention of Insider Trading pursuant to the requirement of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992. This code is applicable to all Directors and such identified employees of the Company who are expected to have access to unpublished price sensitive information relating to the Company.

6. communication:

The quarterly, half-yearly and entire year results are published in newspapers namely, The Financial Express (English) and Loksatta (Marathi).

The profile of the Company, Financial Results, Code of Conduct for Board Members and Senior Management of the Company as also the Shareholding Pattern are posted on the Company’s website addressed at www.fulfordindia.com.

Management Discussion and Analysis Report forms a part of the Directors’ Report.

7. Unclaimed Shares:

In accordance with Clause 5A.II of Listing Agreement, the Company has transferred the unclaimed shares to unclaimed suspense account and is in the process of getting these shares dematted.

Status of unclaimed shares lying in the unclaimed suspense Account:

1. Aggregate number of shareholders who have been identified as holders of unclaimed shares at the beginning of the year

15

2. Aggregate number of shares lying in the unclaimed suspense account at the beginning of the year

1250

3. Number of shareholders who approached issuer for transfer of shares from suspense account during the year

2

4. Number of shareholders to whom shares were transferred from suspense account during the year

2

5. Aggregate number of shareholders who have been identified as holder of unclaimed shares at the end of the year

13

6. Aggregate number of shares lying in the unclaimed suspense account at the end of the year 1150

8. general Shareholder Information:

The general shareholder information is provided separately in this Annual Report.


ajit DangiMumbai, May 16, 2014 Chairman


Shareholder Information

agM date, time and venue : August 7, 2014, 11.30 a.m. at the Exchange Plaza, NSE Auditorium, Ground Floor, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051

Financial calendar : April to March

First Quarter results : On or before August 14

Second Quarter results : On or before November 14

third Quarter results : On or before February 14

audited results for the year end : On or before May 30th of the succeeding year

Date of Book closure : July 31, 2014 to August 7, 2014 (both days inclusive)

Dividend payment Date : On or before August 30, 2014

ListingonStockExchange : The Company’s shares are listed and traded on BSE Limited. The Company’s shares are traded under the Category “B” Group.

Stock code : 506803

Demat : INE 521A01017

MarKet prIce Data

The monthly high and low quotations of shares traded on BSE Limited for the year 2013-14 are as under:

(Per share Amt. in `)

Month

BSe Limited

High Low

January 2013 850.00 790.00

February 2013 942.00 750.00

March 2013 799.00 664.00

April 2013 725.00 604.00

May 2013 685.00 606.20

June 2013 630.00 581.00

July 2013 603.00 460.35

August 2013 518.80 450.00

September 2013 500.00 458.90

October 2013 554.00 460.25

November 2013 630.00 539.95

December 2013 723.00 585.05

January 2014 900.00 686.00

February 2014 775.00 655.00

March 2014 758.00 619.95


StocK perForMance InDeX:

25000

20000

15000

10000

5000

0

1200

1000

800

600

400

200

0

Jan-

13

Jan-

14

Feb-1

3

Feb-1

4

Mar-13

Mar-14

Apr-13

May-1

3

Jun-

13

Jul-1

3

Aug-1

3

Sept-1

3

Oct-13

Nov-1

3

Dec-1

3

FULFORD

FULF

OR

D

BSE SENSEX HCI

BS

E S

EN

SE

X /

HC

I

regIStrar anD tranSFer agentS:Link Intime India Private LimitedC-13, Pannalal Silk Mills Compound,L.B.S. Marg, Bhandup (West), Mumbai 400 078.Tel:022-25946970-78 • Fax:022-25946969Mail: [email protected]

SHare tranSFer SYSteM:

Share Transfer formalities have been attended to by the Registrar & Share Transfer Agents of the Company once in a week from the date of receipt of valid applications for transfer and are subsequently noted by the Share Transfer Committee of the Company.

DIStrIBUtIon oF SHareHoLDIng aS on MarcH 31, 2014:

Shareholding of nominal value of `

Shareholders Share amount

number % to total In ` % to totalUpto 5000 4601 96.1949 3827580.00 9.8143

5001 – 10000 99 2.0698 761410.00 1.952310001 – 20000 42 0.8781 613850.00 1.574020001 – 30000 12 0.2509 275660.00 0.706830001 – 40000 5 0.1045 169940.00 0.435740001 – 50000 4 0.0836 193100.00 0.4951

50001 – 100000 5 0.1045 358000.00 0.9179100001 and above 15 0.3136 32800460.00 84.1037

total 4783 100.0000 39000000.00 100.0000

DeMat StatUS aS on MarcH 31, 2014:

Mode no. of shareholders no. of Shares % to totalDemat 4275 3829642 98.20Physical 508 70358 1.80

total 4783 3900000 100.00


certificate from a practising company Secretary regarding compliance of conditions of corporate governance

TotheMembersofFulford(India)Limited

We have examined all relevant records of Fulford(India)Limited(the Company) for the purpose of certifying compliance of the conditions of Corporate Governance under Clause 49 of the Listing Agreement with BSE Limited for the financial year ended March 31, 2014. We have obtained all the information and explanations to the best of our knowledge and belief were necessary for the purpose of this certification.

The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to the procedure and implementation thereof.

On the basis of our examination of the records produced, explanations given to us and information furnished, we certify that the Company has complied with all the mandatory conditions of the said Clause 49 of the Listing Agreement.

We further state that such compliance is neither an assurance as to future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

Place : MumbaiDate : May 16, 2014

Office Address:Annex-103, Dimple Arcade,Asha Nagar, Kandivli (E),Mumbai 400101.

For Alwyn D’souza & Co., Company Secretaries

(Alwyn P D’souza FCS.5559)(Proprietor)

Certificate of Practice No. 5137

SHareHoLDIng proFILe aS on MarcH 31, 2014:

category no. of Shares % to totalForeign Promoter- Dashtag, U.K. 2923237 74.95Banks & FII’s 2331 0.06Mutual Funds and UTI 148244 3.80NRIs 6650 0.17OCBs 300 0.01Other Corporate Bodies 123439 3.17Public 664561 17.04Clearing Members & Insurance Companies 31213 0.80Trusts 25 0.00total 3900000 100


ajit DangiMumbai, May 16, 2014 Chairman

regIStereD oFFIce:Fulford (India) LimitedPlatina, 8th Floor, Plot No. C-59, G-Block, Bandra-Kurla Complex,Bandra (East), Mumbai: 400 098Tel:022-67898888•Fax:022-67898889CIN: L99999MH1948PLC006199www.fulfordindia.com

Fulford (India) Limited ANNUAL REPORT 2013-14 39Fulford (India) Limited ANNUAL REPORT 2013-14 PB

Report on the Financial Statements

1. We have audited the accompanying financial statements of Fulford (India) Limited (the ‘company’), which comprise the Balance Sheet as at 31st March, 2014 and the Statement of Profit and Loss and Cash Flow Statement for the period 1st January, 2013 to 31st March, 2014 and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management’s Responsibility for the Financial Statements

2. The company’s management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the Accounting Standards notified under the Companies Act, 1956 of India (the ‘Act’) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 of India. This responsibility includes the design, implementation and maintenance of internal control 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’ Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. 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.

4. 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 control relevant to the company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the accompanying 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:

(a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit for the period ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

Independent AudItORS’ RepORt to the Members of Fulford (India) Limited

Fulford (India) Limited ANNUAL REPORT 2013-14 41Fulford (India) Limited ANNUAL REPORT 2013-14 40

Report on Other Legal and Regulatory Requirements

7. As required by ‘The Companies (Auditor’s Report) Order, 2003’, as amended by ‘The Companies (Auditor’s Report) (Amendment) Order, 2004’, issued by the Central Government of India in terms of sub-section (4A) of Section 227 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 a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. As required by Section 227(3) of the Act, we report that:

(a) We have 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 appears from our 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 account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 of India;

(e) On the basis of written representations received from the directors as on 31st March, 2014 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

For Lovelock & LewesFirm Registration No. 301056E

Chartered Accountants

Himanshu GoradiaPartner

Mumbai, 16th May, 2014 Membership No. 45668

Independent Auditors’ Report (contd.)


Annexure to Independent Auditors’ Report

[Referred to in paragraph 7 of the Independent Auditors’ Report of even date to the members of Fulford (India) Limited on the financial statements as of and for the period ended 31st March, 2014]

1. (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 period and no material discrepancies have been noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the period.

2. (a) The inventory has been physically verified by the management during the period. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. In our opinion, the discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of Clause 4(iii)(b) to 4(iii)(d) of the Order are not applicable to the company.

(b) The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of Clause 4(iii)(f) and 4(iii)(g) of the Order are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that except for certain items of inventory purchased which are of special/proprietary nature for which suitable alternative sources do not exist, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanations given to us, in respect of the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the period, we are unable to comment whether these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time as there are no comparable market prices available since these transactions are of specialised/proprietary nature.

6. The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.


Annexure to Independent Auditors’ Report (contd.)

7. In our opinion, the company has an internal audit system commensurate with its size and the nature of its business.

8. We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act 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.

9. (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 sales tax and tax deducted at source though there has been a delay in a few cases and is regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, wealth tax, service tax, customs duty, excise duty 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 wealth tax, service tax and excise duty which have not been deposited on account of any dispute. The particulars of dues of income-tax, sales tax and customs duty as at 31st March, 2014 which have not been deposited on account of a dispute, are as follows –

Name of the statute

Nature of dues

Amount* `

Period to which the amount relates

Forum where the dispute is pending

The Income-tax Act, 1961

Income-tax including interest, as applicable

226,741,508 Assessment Years 2006-2007, 2007-2008 and 2010-2011

Dispute Resolution Panel

137,417,049 Assessment Years 1997-1998, 1999-2000, 2002-2003, 2004-2005, 2005-2006, 2008-2009 and 2009-2010

Tribunal

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

Sales tax including interest and penalty, as applicable

2,668,394 Several demands pertaining to the period 1992-1993 to 1995-1996, 2000-2001, 2003-2004, 2007-2008 and 2009-2010

Appellate Authority – up to Commissioner’s level

177,152 Several demands pertaining to the period 2001-2002 and 2004-2005

Tribunal

The Customs Act,1962

Customs Duty 536,200 2005 Tribunal

*Net of amounts paid including under protest.


10. The company has no accumulated losses as at the end of the financial period and it has not incurred any cash losses in the financial period ended on that date but has incurred cash losses in the immediately preceding financial year.

11. As the company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at the Balance Sheet date, the provisions of Clause 4(xi) of the Order are not applicable to the company.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of Clause 4(xii) of the Order are not applicable to the company.

13. As the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company, the provisions of Clause 4(xiii) of the Order are not applicable to the company.

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the company.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the period. Accordingly, the provisions of Clause 4(xv) of the Order are not applicable to the company.

16. The company has not raised any term loans. Accordingly, the provisions of Clause 4(xvi) of the Order are not applicable to the company.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the period. Accordingly, the provisions of Clause 4(xviii) of the Order are not applicable to the company.

19. The company has not issued any debentures during the period and does not have any debentures outstanding as at the beginning of the period and at the period end. Accordingly, the provisions of Clause 4(xix) of the Order are not applicable to the company.

20. The company has not raised any money by public issues during the period. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the company.

21. 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 on or by the company, noticed or reported during the period, nor have we been informed of any such case by the management.

For Lovelock & LewesFirm Registration No. 301056E

Chartered Accountants



Annexure to Independent Auditors’ Report (contd.)


Balance Sheet as at 31st March, 2014

note As at

31st March, 2014 As at

31st December, 2012 ` ` ` `

equity and LiabilitiesShareholders' Funds

Share Capital 3 39,000,000 39,000,000 Reserves and Surplus 4 1,443,138,982 1,407,608,489

1,482,138,982 1,446,608,489 Non-Current Liabilities

Other Long-term Liabilities 5 – 1,678,994 Long-term Provisions 6 49,910,309 46,867,277

49,910,309 48,546,271 Current Liabilities

Trade Payables 7 465,169,148 399,903,615 Other Current Liabilities 8 49,052,065 76,375,090 Short-term Provisions 9 30,396,610 37,080,338

544,617,823 513,359,043 Total 2,076,667,114 2,008,513,803

AssetsNon-Current Assets

Fixed Assets 10 Tangible Assets 11,925,113 26,711,942 Intangible Assets 1 44,481

11,925,114 26,756,423 Non-Current Investments 11 – – Deferred Tax Assets (Net) 12 46,758,063 59,616,286 Long-term Loans and Advances 13 272,977,236 189,971,535 Other Non-Current Assets 14 6,677,605 7,612,962

338,338,018 283,957,206 Current Assets

Inventories 15 357,991,202 446,992,230 Trade Receivables 16 31,847,356 64,588,310 Cash and Bank Balances 17 1,296,769,054 1,113,580,138 Short-term Loans and Advances 18 27,150,788 32,109,660 Other Current Assets 19 24,570,696 67,286,259

1,738,329,096 1,724,556,597 Total 2,076,667,114 2,008,513,803

The Notes are an integral part of the 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 Goradia Giridhar Sanjeevi Chief Financial OfficerPartnerMembership No. 45668 Sachin Gaikwad Company Secretary

Mumbai, 16th May, 2014 Mumbai, 16th May, 2014



Statement of profit and Loss for the period 1st January, 2013 to 31st March, 2014

note period ended

31st March, 2014 Year ended

31st December, 2012

` ` ` `

RevenueRevenue from Operations (Gross) 23 2,698,278,157 2,156,295,927 Less: Excise Duty 1,919,922 2,580,791 Revenue from Operations (Net) 2,696,358,235 2,153,715,136 Other Income 24 125,448,553 96,486,859 Total Revenue 2,821,806,788 2,250,201,995

expensesCost of Materials Consumed 25 27,165,122 31,628,796 Purchases of Stock-in-Trade 1,256,438,234 1,150,267,512 Changes in Inventories of Finished Goods and Stock-in-Trade 26 66,872,777 1,311,148 Employee Benefits Expense 27 505,039,302 450,914,673 Finance Costs 28 9,490,008 443,531 Depreciation and Amortisation Expense 15,154,751 17,041,390 Other Expenses 29 887,346,578 671,083,926 Total Expenses 2,767,506,772 2,322,690,976 Profit/(Loss) before Tax 54,300,016 (72,488,981)Tax Expense For the period/year Current Tax 15,876,652 – Less: Minimum Alternate Tax Credit

Entitlement 6,088,792 – Net Current Tax 9,787,860 – Deferred Tax 171,872 (22,571,831)

9,959,732 (22,571,831) For earlier years Current Tax (13,002,170) – Deferred Tax 12,686,351 –

(315,819) – 9,643,913 (22,571,831)

Profit/(Loss) for the period/year 44,656,103 (49,917,150)

Earnings/(Loss) per Share – Basic and Diluted 11.45 (12.80)(` per Equity Share of ` 10 each) [Refer Note 46]

The Notes are an integral part of the Financial Statements.






Cash Flow Statement for the period 1st January, 2013 to 31st March, 2014

period ended 31st March, 2014

Year ended 31st December, 2012

` ` ` `A. Cash flow from operating activities

Net Profit/(Loss) before Tax 54,300,016 (72,488,981 )Adjustments for –Depreciation and Amortisation Expense 15,154,751 17,041,390 Interest Income (107,146,890) (87,810,257)Profit on Sale/Disposal of Fixed Assets (Net) (19,385) (198,360)Finance Costs 9,490,008 443,531 Unrealised Exchange Loss/(Gain) (Net) 11,244 (21,472,362)

(82,510,272) (91,996,058)Operating loss before working capital changes (28,210,256) (164,485,039)Adjustments for –Trade and Other Receivables 85,643,146 (5,854,258)Inventories 89,001,028 127,199 Trade and Other Payables 27,999,834 (65,752,491)

202,644,008 (71,479,550)Cash generated from/(used in) operations 174,433,752 (235,964,589)Direct Taxes paid (Net of refund of taxes) (84,461,565) (30,227,077)Net cash from/(used in) operating activities 89,972,187 (266,191,666)

B. Cash flow from investing activitiesPurchases of Fixed Assets (including advances for capital expenditure) (326,213) (2,212,848)Sale of Fixed Assets 22,156 207,066 (Investment in)/Receipt of Deposits with Banks with maturity of more than 3 months (Net) (1,668,199) (2,075,475)Interest received 106,505,422 88,786,232 Net cash from investing activities 104,533,166 84,704,975

C. Cash flow from financing activitiesInterest paid (9,490,008) (443,531)Dividend paid (3,965,029) (13,611,999)Tax paid on Dividend (632,678) (2,214,371)Net cash used in financing activities (14,087,715) (16,269,901)Net increase/(decrease) in cash and cash equivalents 180,417,638 (197,756,592)Cash and Cash Equivalents – Opening Balance 1,112,805,713 1,310,562,305 Cash and Cash Equivalents – Closing Balance 1,293,223,351 1,112,805,713

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 3(C) of Section 211 of the Companies Act, 1956 [Refer Note 2(a)].2. During the period, the company has changed its accounting year end to 31st March, 2014. Accordingly, the figures for the current period

are for the fifteen months’ period from 1st January, 2013 to 31st March, 2014 and are not comparable with those of the previous year.3. Previous year figures have been regrouped where necessary.







notes forming part of the Financial Statements as at and for the period 1st January, 2013 to 31st March, 2014

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 General Circular 15/2013 dated 13th September, 2013 read with General Circular 08/2014 dated 4th April, 2014, till the Standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 (the ‘Act’) 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 Act 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 VI 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

Fixed 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 and impairment loss.

Depreciation is provided on Straight Line Method, pro-rata to the period of use, at the rates specified in Schedule XIV of the Act or the rates based on useful lives of the assets as estimated by the management, whichever are higher. The rates based on useful lives of the assets in the following categories are estimated to be higher than those specified in Schedule XIV of the Act:

Description Estimated Useful Life

Tangible Assets

Plant and Equipment 6.67 years

Furniture and Fixtures 10 or 12 years

Vehicles 5 years

Office Equipment 5 or 6.67 years

Computers 3 or 5 years

Leasehold Improvements 5 years

Intangible Assets

Computer Software 3 years

Fixed assets costing ` 5,000 or less are fully depreciated/amortised in the period/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 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

Sales 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 period/year.

Service income is recognised on the basis of contractual arrangements and are net of service tax.

Dividend income is recognised when the right to receive dividend is established.

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 period 1st January, 2013 to 31st March, 2014 (contd.)


(h) Taxes on Income

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

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) 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.

(j) 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, 2014

As at

31st December, 2012

` `

3. Share CapitalAuthorised

5,000,000 Equity Shares of ` 10 each 50,000,000 50,000,000

Issued, Subscribed and Paid-up

3,900,000 Equity Shares of ` 10 each fully paid-up 39,000,000 39,000,000


As at

31st December, 2012

no. of Shares ` No. of Shares `

(a) Reconciliation of Number of Shares

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

Number of shares outstanding as at the end of the period/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, 2,923,237 (Previous year - 2,113,520) shares are held by Dashtag, UK, the holding company [Refer Note 52].

(d) List of shareholders holding more than 5% shares as at the Balance Sheet date [Refer Note 52].



Name of the Shareholder As at

31st March, 2014 As at

31st December, 2012

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

Dashtag, UK 2,923,237 74.95 2,113,520 54.19


As at

31st December, 2012

` ` ` `

4. Reserves and Surplus

Capital Reserve 51,000 51,000

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

General Reserve

Balance as at the beginning of the period/year 681,024,935 681,024,935

Add: Transfer from Surplus in Statement of Profit and Loss 3,349,208 –

Balance as at the end of the period/year 684,374,143 681,024,935

Surplus in Statement of Profit and Loss


Profit/(Loss) for the period/year 44,656,103 (49,917,150)

376,339,205 336,215,780

Less: Appropriations

Proposed Dividend 7,800,000 3,900,000

Tax on Proposed Dividend 1,325,610 632,678

Transfer to General Reserve 3,349,208 –


1,443,138,982 1,407,608,489


As at

31st December, 2012

` `

5. Other Long-term Liabilities

Accrued Rent – 1,678,994




As at

31st December, 2012

` `

6. Long-term provisions

Provision for Employee Benefits – Provision for Compensated Absences [Refer Note 42(C)] 27,693,000 23,508,000

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 30] 19,462,000 19,462,000

Provision for Sales Tax [Refer Note 30] 1,194,145 2,336,113

49,910,309 46,867,277

7. trade payables

Micro and Small Enterprises [Refer Note 48] 1,240,859 707,145

Others 463,928,289 399,196,470

465,169,148 399,903,615

8. Other Current Liabilities

Unpaid Dividends* 709,396 774,425

Statutory Dues 16,873,167 19,892,549

Accrued Rent – 4,029,573

Employee Benefits Payable 27,031,808 49,924,726

Advances from Customers 4,437,694 1,753,817

49,052,065 76,375,090

*There are no amounts due for payment to the Investor Education and Protection Fund under Section 205C of the Act as at the period/year end.

9. Short-term provisions

Provision for Employee Benefits – Provision for Compensated Absences [Refer Note 42(C)] 6,088,000 6,011,000

Proposed Dividend 7,800,000 3,900,000

Tax on Proposed Dividend 1,325,610 632,678

Provision for Non-Sellable Sales Returns [Refer Note 30] 15,183,000 26,536,660

30,396,610 37,080,338



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As at31st December, 2012

` ` ` `

11. 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

– –

12. deferred tax Assets (net)

Deferred Tax Assets Depreciation/Amortisation 10,191,244 7,757,070 Provision for Doubtful Debts, Advances and

Deposits 3,727,594 3,568,501 Provision for Employee Benefits 11,482,162 9,577,440 Provision for Non-Sellable Sales Returns 5,160,702 8,609,819 Provision for Diminution in the Value of Long-term

Investment 34,500 32,932 Unabsorbed Depreciation and Tax Loss – 12,025,866 Others 16,161,861 18,044,658

46,758,063 59,616,286 Less: Deferred Tax Liability – –

46,758,063 59,616,286

13. Long-term Loans and Advances (Unsecured, Considered Good unless otherwise

stated) Security Deposits Considered Good 53,865,358 54,484,828 Considered Doubtful 1,689,285 1,171,329

55,554,643 55,656,157 Less: Provision for Doubtful Deposits 1,689,285 1,171,329

53,865,358 54,484,828 Other Deposits Considered Good 12,020,824 11,404,642 Considered Doubtful 616,199 616,199

12,637,023 12,020,841 Less: Provision for Doubtful Deposits 616,199 616,199

12,020,824 11,404,642 Advances recoverable in cash or in kind or for value to

be received 1,823,152 6,490,038 Current Taxation [Net of Provision of ` 698,411,811

(Previous year ` 695,537,329)] 205,267,902 117,592,027

272,977,236 189,971,535





` ` ` `

14. Other non-Current AssetsMargin Money Deposits with more than 12 months maturity 6,444,854 7,612,962 Interest accrued but not due on Deposits 232,751 –

6,677,605 7,612,962

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

Raw Materials 974,453 21,596,412 Finished Goods 15,359,322 13,856,930

Stock-in-Trade [including in transit ` 1,057,373 (Previous year - Nil)] 340,854,362 409,229,531 Packing Materials 803,065 2,309,357

357,991,202 446,992,230

16. trade ReceivablesOutstanding for a period exceeding six months from the date they were due for payment Unsecured, Considered Good 2,919,439 19,480,699 Unsecured, Considered Doubtful 8,661,252 9,211,089

11,580,691 28,691,788 Less: Provision for Doubtful Debts 8,661,252 9,211,089

2,919,439 19,480,699 Others Unsecured, Considered Good 28,927,917 45,107,611

31,847,356 64,588,310

17. Cash and Bank BalancesCash and Cash Equivalents

Balances with Banks

Current Accounts 38,484,658 61,756,621

Deposit Accounts (less than 3 months maturity) 1,253,032,243 1,048,773,501

1,291,516,901 1,110,530,122

Cheques on Hand 1,706,450 2,275,591

1,293,223,351 1,112,805,713

Other Bank Balances

Unpaid Dividend Accounts 709,396 774,425

Margin Money Deposits up to 12 months maturity 2,836,307 –

3,545,703 774,425

1,296,769,054 1,113,580,138





` ` ` `

18. Short-term Loans and Advances(Unsecured, Considered Good)Advances recoverable in cash or in kind or for value to be received 21,061,996 32,055,006 Balances with Government Authorities – 54,654 Minimum Alternate Tax Credit Entitlement 6,088,792 –

27,150,788 32,109,660

19. Other Current AssetsOther Receivables from Related Parties 12,593,231 55,717,511 Interest accrued but not due on Deposits 11,977,465 11,568,748

24,570,696 67,286,259

20. 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 465,435,659 210,142,188 Fringe Benefits Tax Matter 128,412 128,412 Sales tax Matters 1,794,910 17,787,124 Customs Duty Matter 536,200 536,200 Employee related Matters 7,745,017 7,674,418 Others 427,500 388,994

(b) Guarantees issued by Banks on behalf of the company 11,595,694 12,719,648

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 dependant on the future performance of the obligations by the company

and/or other parties.

21. Commitments (a) Estimated amount of contracts remaining to be executed on capital account and not provided for – Nil (Previous year

` 39,900). (b) Estimated amount of contracts remaining to be executed for Purchases of Stock-in-Trade ` 312,431,773 (Previous year

` 18,672,283).



` ` ` `

22. proposed dividendProposed Dividend 7,800,000 3,900,000 Number of shares outstanding as at the end of the period/year 3,900,000 3,900,000 Dividend per Share (` per Equity Share of ` 10 each) 2.00 1.00





` ` ` `

23. Revenue from OperationsSale of Products 2,696,175,376 2,152,807,371 Sales of Services 2,102,781 3,488,556

2,698,278,157 2,156,295,927 Less: Excise Duty 1,919,922 2,580,791 Revenue from Operations (Net) 2,696,358,235 2,153,715,136

24. Other IncomeInterest Income 107,146,890 87,810,257 Profit on Sale/Disposal of Fixed Assets (Net) 19,385 198,360 Net Gain on Foreign Currency Transactions and Translation 701,708 –Liabilities and Provisions no longer required written back 15,645,040 7,471,466 Miscellaneous Income 1,935,530 1,006,776

125,448,553 96,486,859

25. Cost of Materials ConsumedRaw Materials Consumed

Opening Stock 21,596,412 19,068,763 Add: Purchases 1,908,776 47,643,739

23,505,188 66,712,502 Less: Sale of Raw Materials (at cost) 159,080 16,564,385

23,346,108 50,148,117 Less: Closing Stock 974,453 21,596,412

22,371,655 28,551,705 Packing Materials Consumed

Opening Stock 2,309,357 3,653,057 Add: Purchases 3,287,175 1,733,391


4,793,467 3,077,091 27,165,122 31,628,796

26. Changes in Inventories of Finished Goods and Stock-in-tradeOpening Stock

Finished Goods 13,856,930 15,159,017 Stock-in-Trade 409,229,531 409,238,592

423,086,461 424,397,609 Closing Stock

Finished Goods 15,359,322 13,856,930 Stock-in-Trade 340,854,362 409,229,531

356,213,684 423,086,461

66,872,777 1,311,148





` ` ` `27. employee Benefits expense

Salaries and Bonus 510,304,838 416,344,393 Contribution to Provident and Other Funds [Refer Note 42(A)] 59,030,951 42,728,203 Gratuity [Refer Note 42(B)] 17,624,154 12,783,000 Compensated Absences 8,929,074 10,226,000 Staff Welfare Expenses 24,142,313 27,022,190

620,031,330 509,103,786 Less: Reimbursement of Salary and Benefits shared by/with Group Companies (Net) (114,992,028) (58,189,113)

505,039,302 450,914,673

28. Finance CostsInterest on Income-tax 539,808 172,187 Interest to a Supplier 7,096,068 – Others 1,854,132 271,344

9,490,008 443,531

29. Other expensesConsumption of Stores 3,316,915 6,287,285 Electricity 5,975,786 3,295,017 Rent [Refer Note 45] 73,331,038 62,894,870 Repairs and Maintenance

Buildings 5,533,094 2,535,887 Plant and Machinery 464,813 2,834,585 Others 5,394,306 3,481,691

11,392,213 8,852,163 Insurance 627,566 753,421 Rates and Taxes

Excise Duty 621,765 1,085,487 Sales tax 20,864,103 10,966,337 Others 10,380,972 520,134

31,866,840 12,571,958 Manufacturing Charges 3,269,308 2,624,635 Quality Control and Quality Assurance 1,349,284 6,076,753 Legal and Professional Charges 85,500,813 39,054,202 Auditors’ Remuneration [Refer Note 37] 5,294,088 3,427,439 Directors’ Commission and Sitting Fees 1,680,285 609,562 Travelling and Conveyance 138,811,935 150,751,494 Printing and Stationery 3,447,154 3,580,338 Postage and Telephone 19,880,803 17,335,398 Advertisement and Sales Promotion 289,796,214 198,636,532 Freight and Forwarding 48,860,508 41,129,070 Warehousing Charges 99,890,672 68,118,092 Cash Discount 24,714,288 17,474,801 Commission on Sales 20,929,266 4,079,199 Bad Debts and Advances written off 826,878 1,382,339 Provision for Doubtful Debts, Advances and Deposits (Net) 93,119 4,876,087 Net Loss on Foreign Currency Transactions and Translation – 5,711,094 Miscellaneous Expenses 16,491,605 11,562,177

887,346,578 671,083,926



provision for non-Sellable Sales Returns

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

period ended 31st March,

2014

Year ended 31st December,

2012


2014


2012

` ` ` `

30. Movement in provisionsBalance as at the beginning of the period/year 26,536,660 21,891,933 19,462,000 19,462,000 Provision made during the period/year 15,183,000 37,015,940 – – Amounts used during the period/year 26,536,660 32,371,213 – – Balance as at the end of the period/year 15,183,000 26,536,660 19,462,000 19,462,000

provision for Sales tax



` `Balance as at the beginning of the period/year 2,336,113 3,043,837 Provision made during the period/year – – Amounts used/written back during the period/year 1,141,968 707,724 Balance as at the end of the period/year 1,194,145 2,336,113

31. Excise duty relating to difference between closing stock and opening stock and other adjustments is included in Note 29 – Other Expenses. Excise duty relating to Sale of Products is reduced from Gross Sale of Products.

32. Consumption of Raw Materials period ended


31st December, 2012

` ` Antibiotics 19,967,405 28,298,476 Others 2,404,250 253,229

22,371,655 28,551,705 % ` % `

Imported 89.25 19,967,405 99.11 28,298,476 Indigenous 10.75 2,404,250 0.89 253,229

100.00 22,371,655 100.00 28,551,705

Notes:Consumption of Raw Materials represents consumption by third parties under contract with the company and consumption in respect of samples.

33. Sale of productsperiod ended


31st December, 2012

` `Formulations

Creams and Ointments 1,053,086,462 919,088,987 Injectables 1,028,740,041 768,835,325 Tablets 166,762,415 156,529,129 Capsules 169,819,298 131,894,776

Liquids 277,767,160 176,459,154

2,696,175,376 2,152,807,371





` `

34. purchases of Stock-in-tradeFormulations

Creams and Ointments 421,898,072 338,674,811

Injectables 551,465,756 563,851,873

Tablets 32,717,059 32,059,205

Capsules 120,547,050 95,575,311

Liquids 129,810,297 120,106,312

1,256,438,234 1,150,267,512

35. Opening Stock of Finished Goods and Stock-in-tradeFormulations


Injectables 237,818,391 258,633,778

Tablets 5,051,151 9,379,635

Capsules 42,684,577 43,693,217

Liquids 46,411,558 20,892,236

423,086,461 424,397,609

36. Closing Stock of Finished Goods and Stock-in-trade@Formulations


Injectables 164,275,437 237,818,391

Tablets 6,914,306 5,051,151

Capsules 34,475,536 42,684,577

Liquids 27,914,064 46,411,558

356,213,684 423,086,461

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

37. Auditors’ RemunerationAudit Fees 2,668,550 1,404,500

Tax Audit Fees 1,018,263 814,610

Other Services 1,348,320 1,011,240

Reimbursement of Expenses 258,955 197,089

5,294,088 3,427,439

38. CIF Value of ImportsRaw Materials – 41,388,688

Stock-in-Trade 659,284,900 666,279,763





` `

39. expenditure in Foreign CurrencyTravelling 3,586,213 5,427,347

Advertisement and Sales Promotion 5,997,357 5,848,938

Others 1,384,653 277,341

40. earnings in Foreign exchange

Income from Services Rendered 17,228,993 8,574,241

41. Remittance of dividend to non-Resident Shareholders

Number of Shareholders 1 1

Number of Equity Shares held 2,923,237 2,103,087

Amount remitted (`) 2,923,237 7,360,805

Year to which the dividend related 31st december, 2012 31st December, 2011


2014


2012

` `

42. employee Benefits

(A) Defined Contribution Plans

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

(i) Contribution to Provident Fund 27,994,353 20,197,387

(ii) Contribution to Superannuation Fund 30,764,144 22,284,726

(iii) Contribution to Employees’ State Insurance Scheme 37,865 45,218

(iv) Contribution to Employees’ Deposits Linked Insurance Scheme 234,589 200,872

59,030,951 42,728,203

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) 9.25% 8.50%

(b) Rate of increase in Compensation Levels 8.00% 7.00%

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

(d) Normal Retirement Age 60 60

(e) Expected average remaining working lives of employees in number of years 22 25



2014


2012

Gratuity Gratuity

` `

(i) Changes in the Present Value of Obligation(a) Opening Present Value of Obligation 63,315,645 53,789,645 (b) Interest Cost 6,023,000 4,167,000 (c) Past Service Cost – – (d) Current Service Cost 7,117,000 4,511,000 (e) Curtailment Cost/(Credit) – – (f) Settlement Cost/(Credit) – – (g) Benefits Paid (9,829,000) (9,539,000)(h) Actuarial Loss 3,536,000 10,387,000 (i) Closing Present Value of Obligation 70,162,645 63,315,645

(ii) Changes in the Fair Value of Plan Assets(a) Opening Fair Value of Plan Assets 68,974,799 62,684,799 (b) Expected Return on Plan Assets 8,098,846 5,799,000 (c) Actuarial (Loss)/Gain (1,076,000) 483,000(d) Employers’ Contributions 11,965,000 9,547,000 (e) Benefits Paid (9,829,000) (9,539,000)(f) Closing Fair Value of Plan Assets 78,133,645 68,974,799

(iii) Percentage of each Category of Plan Assets to total Fair Value of Plan Assets as at the period/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 period/year end 70,162,645 63,315,645 (b) Fair Value of Plan Assets as at the period/year end 70,162,645 68,974,799 (c) Asset recognised in the Balance Sheet* – (5,659,154)(d) Experience (Loss)/Gain adjustments on Plan Liabilities (8,029,000) 288,000 (e) Experience Gain adjustments on Plan Assets – 213,000 (f) Actuarial Gain due to change of assumptions 4,113,000 1,483,000

*The excess of fair value of plan assets over present value of obligation as at 31st March, 2014 of Rs. 7,971,000 has not been recognised since the plan assets are in an Income Tax Approved Irrevocable Trust Fund.

Year ended 31st december,2011 2010 2009

Gratuity Gratuity Gratuity ` ` `

(a) Present Value of Obligation as at the year end 53,789,645 48,621,645 43,561,645

(b) Fair Value of Plan Assets as at the year end 62,684,799 52,845,799 40,430,799

(c) (Asset)/Liability recognised in the Balance Sheet (8,895,154) (4,224,154) 3,130,846

(d) Experience (Loss)/Gain adjustments on Plan Liabilities (3,593,000) 4,929,000 Not Applicable

(e) Experience Gain adjustments on Plan Assets 164,000 54,000 Not Applicable

(f) Actuarial Gain/(Loss) due to change of assumptions 942,000 (804,000) Not Applicable




2014


2012

Gratuity Gratuity

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

(a) Current Service Cost 7,117,000 4,511,000 (b) Past Service Cost – – (c) Interest Cost 6,023,000 4,167,000 (d) Expected Return on Plan Assets (8,098,846) (5,799,000)(e) Curtailment Cost/(Credit) – – (f) Settlement Cost/(Credit) – – (g) Net Actuarial Loss 4,612,000 9,904,000 (h) Employees’ Contribution – – (i) Total Expenses recognised in the Statement of Profit and

Loss@ 9,653,154 12,783,000 @ 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 (including ` 5,659,154 for earlier years) on account of excess contribution made by the company.

(C) Other Long-term Employee Benefit

The liability for Compensated Absences as determined by independent actuary as at the Balance Sheet date is ` 33,781,000 (Previous year ` 29,519,000).

43. 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.

44. 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 period/year(a) Fellow Subsidiaries Essex Chemie AG, Switzerland

MSD International GMBH, SingaporeMSD Pharmaceuticals Private Limited, IndiaOrganon (India) Private Limited, IndiaMerck Sharp & Dohme Corp., USA Shanghai Schering-Plough Pharmaceuticals Co. Ltd., China*SOL Limited (Singapore Branch), Singapore*SOL Limited, Bermuda*Merck Sharp & Dohme (Australia) Pty Ltd., AustraliaMerck Sharp & Dohme (Asia) Limited, Hong KongMerck Sharp & Dohme (I.A.) Corp., PhilippinesMerck Sharp & Dohme (Malaysia) SDN. BHD., MalaysiaMSD (Thailand) Limited, Thailand*Merck Sharp & Dohme B. V., Netherlands

(b) Key Management Personnel K. G. AnanthakrishnanGiridhar Sanjeevi (from 22nd July, 2013)*Rajesh Marwaha (Up to 26th June, 2013)*No transactions during the current period



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

period ended31st March, 2014

Year ended31st December, 2012

` ` ` `

(a) Holding Company

Dividend paid 2,923,237 7,360,805

(b) Fellow Subsidiaries

Purchases of Stock-in-Trade

Essex Chemie AG 178,088,549 666,279,763

Merck Sharp & Dohme B. V. 481,196,351 –

659,284,900 666,279,763 Purchases of Raw Materials

MSD International GMBH – 13,293,288

SOL Ltd. – 28,095,400

– 41,388,688

Services Rendered

Merck Sharp and Dohme Corp. 1,723,085 –

MSD Pharmaceuticals Private Limited 23,442,889 33,840,407

Organon (India) Private Limited 77,862,317 21,480,505

MSD International GMBH 15,505,908 8,574,241

118,534,199 63,895,153

Services AvailedMSD Pharmaceuticals Private Limited 2,024,879 4,608,481

Recovery of Expenses

MSD Pharmaceuticals Private Limited 4,244,810 4,070,264

Organon (India) Private Limited 10,390,367 12,264,760

Merck Sharp & Dohme Corp. 25,961,493 20,665,977

MSD International GMBH 11,219,017 20,247,605

Merck Sharp & Dohme (Australia) Pty Ltd. 94,680 – Shanghai Schering-Plough Pharmaceuticals Co. Ltd.

– 1,414,072

SOL Limited (Singapore Branch) – 3,624,132

Merck Sharp & Dohme (I.A.) Corp. – 208,588

Merck Sharp & Dohme (Asia) Limited – 175,456

MSD (Thailand) Limited – 166,871

Merck Sharp & Dohme (Malaysia) SDN. BHD. – 41,590

51,910,367 62,879,315

Reimbursement of ExpensesMerck Sharp & Dohme (Asia) Ltd. 10,048 –MSD Pharmaceuticals Private Limited 15,769,620 6,761,452 Organon (India) Private Limited 4,889,721 3,503,053

20,669,389 10,264,505





` ` ` `Balances as at the period/year end – Outstanding Receivables

Essex Chemie AG – 6,381,531 Merck Sharp & Dohme (I.A.) Corp. – 206,010 Merck Sharp & Dohme (Malaysia)

SDN. BHD. – 41,202 Merck Sharp and Dohme (Asia) Ltd. – 173,818 Merck Sharp and Dohme Corp. 1,300,620 6,370,264 MSD International GMBH 3,926,907 14,607,563 MSD Pharmaceuticals Private

Limited – 4,054,052 Organon (India) Private Limited 7,359,404 22,477,403 Shanghai Schering-Plough

Pharmaceuticals Co. Ltd. – 1,400,868 12,586,931 55,712,711

Outstanding Payable Essex Chemie AG – 252,908,783 Merck Sharp & Dohme B. V. 319,409,497 – MSD Pharmaceuticals Private

Limited 5,445,373 – Merck Sharp & Dohme (Asia)

Limited 10,048 –

(c) Subsidiary Company 324,864,918 252,908,783 Rent Income 1,500 1,200 Balance as at the period/year end – Outstanding Receivable 6,300 4,800

(d) Key Management PersonnelRemuneration $

K. G. Ananthakrishnan 11,869,996 7,319,708 Rajesh Marwaha@ 2,024,879 4,608,481

13,894,875 11,928,189 @ Represents amount reimbursed to MSD Pharmaceuticals Private Limited by way of cross charging arrangement.$ Excludes Provision for Employee Benefits and Stock Options.


2014


2012 ` `

45. disclosures for Operating Leases(a) Lease payments recognised in the Statement of Profit and Loss 73,331,038 54,955,949 (b) Significant Leasing Arrangements

The company has significant operating leases for office premises, warehouses, laptops, printers, office equipment and vehicles. These lease arrangements range for a period between 11 months and 5 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 25,755,222 63,295,011 (ii) Later than one year and not later than five years – 26,833,763 (iii) Later than five years – –



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

by the weighted average number of equity shares outstanding during the period/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. Earnings/(loss) per share has been computed as under:


2014


2012

Profit/(Loss) for the period/year (`) 44,656,103 (49,917,150)

Weighted average number of Shares 3,900,000 3,900,000

Earnings/(Loss) per Share (` per Equity Share of ` 10 each) – Basic and Diluted 11.45 (12.80)

47. 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, 2014 As at 31st December, 2012

Particulars

Amount inForeign

CurrencyAmount in

`

Amount inForeign

CurrencyAmount in

`

(A) Receivables

USD 86,667 5,227,527 337,464 18,538,925

EURO – – 11,046 805,923

THB – – 83,685 149,992

(B) Payables

USD 3,122 188,315 27,956 1,535,763

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

period ended31st March,

2014


2012

` `

(a) The principal amount and the interest due thereon remaining unpaid to suppliers (i) Principal 462,615 344,750 (ii) Interest due thereon 778,244 362,395

1,240,859 707,145

(b) (i) The delayed payments of principal amount paid beyond the appointed date during the entire accounting period/year 17,343,209 –

(ii) Interest actually paid under Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 – –

(c) (i) Normal Interest accrued during the period/year, for all the delayed payments, as per the agreed terms – –

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

(d) (i) Total Interest accrued during the period/year 415,849 –

(ii) Total Interest accrued during the period/year and remaining unpaid 415,849 –

(e) Included in (d) above is – Nil (Previous year – Nil) being interest on amounts outstanding as at the beginning of the accounting period/year.



The above information and that given in Note 7 – 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 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 ` 40,998,830 (Previous year ` 16,111,593) towards business expansion up to 31st March, 2014. The remaining amount of ` 361,501,170 continue to be invested in fixed deposits with banks pending utilisation of the same.

50. The company has appointed independent consultants for conducting a transfer pricing study for the year ended 31st March, 2014 to determine whether the transactions with associate enterprises were undertaken at “arms length basis”. Adjustments, if any, arising from the transfer pricing study shall be accounted for, as and when the study is completed. The management confirms that all international transactions with associate enterprises are undertaken at negotiated contracted prices on usual commercial terms. The transfer pricing report for the year ended 31st March, 2013 has been obtained and there are no adverse comments requiring adjustments in the financial statements for the current period.

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. Morgan Stanley India Company Private Limited, on behalf of Dashtag, UK , the holding company (Promoter) which is an indirect wholly owned subsidiary of Merck & Co., Inc., USA, announced a voluntary open offer to acquire 821,913 equity shares of the company on 25th July, 2012. The tendering period closed on 28th September, 2012 and Dashtag, UK received approval of Foreign Investment Promotion Board on 25th October, 2012 and subsequently, 593 shareholders holding 820,150 shares who had validly tendered their shares during the tendering period between 14th September, 2012 and 28th September, 2012 were paid by Dashtag, UK on 29th October, 2012 and their shares were accepted by Dashtag, UK under the open offer. Out of these 820,150 shares,10,433 shares in physical form acquired under the voluntary open offer were already transferred to the account of Dashtag, UK. Remaining 809,717 shares which were lying in ‘LIIPL Fulford India Open Offer Escrow Demat Account’ were the shares acquired under the voluntary open offer in dematerialised form have been transferred to the account of Dashtag, UK during the current period. Consequently, the shareholding of Dashtag, UK has increased to 74.95%.

53. On 25th April, 2014, the promoter of the company, Dashtag, UK (“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. Subject to approval of the proposed Delisting



Offer by way of a special resolution by the shareholders of the company and receipt of applicable regulatory approvals, the Acquirer may make a delisting offer in accordance with the Delisting Regulations.

54. During the period, the company has changed its accounting year end to 31st March, 2014. Accordingly, the figures for the current period are for the fifteen months’ period from 1st January, 2013 to 31st March, 2014 and are not comparable with those of the previous year.

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

Signatures to Notes 1 to 55






Fulford (India) Limited ANNUAL REPORT 2013-14 PBFulford (India) Limited ANNUAL REPORT 2013-14 68

A. The Financial Year of the Subsidiary Company March 31, 2014

B. (a) Number of Shares held by Fulford (India) Limited in end of the Financial Year of the Subsidiary Company

10,150 Equity Shares of ` 10 each fully paid.

(b) Extent of holding 100%

C. The net aggregate of Profits or (Losses) of the Subsidiary Company so far as it concerns the members of Fulford (India) Limited and not dealt with in the Accounts of Fulford (India) Limited:

(a) For Financial Year ended on March 31, 2014 ` (16,224)

(b) For the Previous Financial Year ended on December 31, 2012 ` (22,261)

D. Profit dealt with or (Losses) provided for in the Accounts of Fulford (India) Limited:

(a) For Financial Year ended on March 31, 2014 NIL

(b) For the Previous Financial Year ended on December 31, 2012 NIL

Statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Company Schering-plough (India) private Limited


Ajit dangi Chairman

K. G. Ananthakrishnan Managing Director

Giridhar Sanjeevi Chief Financial Officer

Sachin Gaikwad Company Secretary

Mumbai, May 16, 2014


Schering-Plough (India) Private Limited ANNUAL REPORT 2013-14 69

Your Directors present the Twenty-Fifth Annual Report of the Company along with the Audited Accounts for the fifteen months period ended March 31, 2014:

FINANCIAL RESULTSDuring the year, the Company incurred a loss of ` 0.02 million as against loss of ` 0.02 million in the period under consideration.

DIVIDENDThe Directors do not recommend any dividend for the fifteen months period ended March 31, 2014.

CURRENT YEAR AND PROSPECTSThe Company would continue to explore business opportunities during the financial year 2013-14.

DIRECTORSDuring the year, Mr. Rajiv Sharda (holding DIN 06606793) was appointed as an Additional Director w.e.f. June 17, 2013. Mr. Sharda resigned w.e.f. August 13, 2013.

Mr. Giridhar Sanjeevi (holding DIN 06648008) was also appointed as an Additional Director w.e.f. August 12, 2013.

The Board welcomes Mr. Giridhar Sanjeevi and is confident that he will provide valuable guidance for the progress of the Company.

Mr. Giridhar Sanjeevi offers himself for appointment at the ensuing Annual General Meeting of the Company.

Mr. P. Suresh (holding DIN 02748206) resigned from the Board of the Company w.e.f. June 19, 2013.

The Board places on record its appreciation and gratitude for the dedicated and valuable contribution made by Mr. P. Suresh and Mr. Rajiv Sharda during their tenure as Directors.

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

FIXED DEPOSITThe Company has not accepted any Deposits from the public during the period under review.

AUDITORSM/s. K.J. Sheth & Associates, retire as Auditors of the Company at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a Certificate from the Auditors to the effect that their appointment, if made, would be in accordance with the provisions of Section 139 and 141 of the Companies Act, 2013. The Board recommends their re-appointment.

PARTICULARS OF EMPLOYEESThere are no employees drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956 (THE ACT)Information required to be annexed to this report in accordance with clause (e) of sub-section (1) of Section 217 of the Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given as Annexure 1.In accordance with sub-section (2AA) of Section 217 of the Companies (Amendment) Act, 2000 concerning ‘Directors Responsibility Statement’ and to the best of their knowledge and belief and according to the information and explanation obtained by them, your Directors confirm that:(i) in the preparation of Annual accounts, the applicable accounting standards have been followed along with proper

explanation relating to material departures;(ii) 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 loss of the Company for that period;

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

(iv) the annual accounts are prepared on a going concern basis.


Sameer TamhaneMumbai, May 12, 2014 Chairman

DIRECTORS’ REPORT


Information pursuant to the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

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:

FORM A

A. Power & Fuel Consumption 2013-14 2012

1. Electricity

(a) Purchased Not Applicable– Units – Total Amount– Rate/Unit

(b) Own Generation Not Applicable(i) Through Diesel Generator

UnitsUnits per ltr. of Diesel OilCost/Unit (`)

(ii) Through Steam Turbine/generator Not Applicable UnitsUnits per ltr. of fuel oil/gasCost/Unit

2. Coal (Specify quality and where used) Not Applicable Quantity (Tonnes)Total CostAverage Rate

3. Furnace Oil Not ApplicableQuantity (K. Ltrs)Total CostAverage Rate/Litre

4. Others/Internal Generation Not Applicable QuantityTotal CostRate/Unit

B. Consumption per unit of Production Standards (If any) 2013-14 2011-12

Products (with details) Unit Not Applicable ElectricityFurnace OilCoal (Specify quality)Others (Specify)

ANNEXURE I TO THE DIRECTORS’ REPORT



2. TECHNOLOGY ABSORPTION

FORM B 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: (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: 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 Million

(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


Sameer TamhaneMumbai, May 12, 2014 Chairman


INDEPENDENT AUDITORS’ REPORT

To the Members of Schering-Plough (India) Private Limited

Report on the Financial Statements

1. We have audited the accompanying financial statements of Schering-Plough (India) Private Limited (the ‘Company’), which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit & Loss and Cash Flow Statement for the period January 1, 2013 to March 31, 2014 and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management Responsibility for the Financial Statements

2. The Company’s management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the Accounting Standards notified under the Companies Act, 1956 of India (the ‘Act’) read with General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 of India. This responsibility includes the design, implementation and maintenance of internal control 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’ Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. 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.

4. 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 material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the Auditors consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.


Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the accompanying 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:

(a) In the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) In the case of Statement of Profit and Loss, of the loss for the period ended on that date; and

(c) In the case of Cash Flow Statements, of the cash flows for the period ended on that date.



Report on Other Legal and Regulatory Requirements

7. The requirements of ‘The Companies (Auditor’s Report) Order, 2003’, as amended by ‘The Companies (Auditor’s Report) (Amendment) Order, 2004’, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act (hereinafter referred to as the ‘Order’) do not apply to the company.

8. As required by Section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief and 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 Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 of India;

(e) On the basis of written representations received from the Directors as on March 31, 2014 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

For K. J. Sheth & AssociatesChartered Accountants

Firm Registration No.: 118598W

Kirit ShethProprietor

Membership No.: 37824

Place : MumbaiDate : May 12, 2014


NoteAs at

March 31, 2014As at

December 31, 2012

` ` ` `

EqUITY AND LIABILITIESShareholders’ Funds

Share Capital 2 101,500 101,500

Reserve and Surplus 3 (196,970) (180,746)

(95,470) (79,246)

Current Liabilities

Other Current Liabilities 4 100,031 84,486

TOTAL 4,561 5,240

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

Current Assets

Cash and Bank Balances 6 – 679

TOTAL 4,561 5,240


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

Kirit Sheth Giridhar Sanjeevi DirectorProprietor

Membership No. 037824

Mumbai, May 12, 2014 Mumbai, May 12, 2014

Balance Sheet as at March 31, 2014

SCHERING-PLOUGH (INDIA) PRIVATE LIMITED



NotePeriod ended

March 31, 2014Year ended

December 31, 2012

` ` ` `

EXPENSES

Other Expenses 7 16,224 22,261

Total Expenses 16,224 22,261

Loss before tax (16,224) (22,261)

Loss for the period / year (16,224) (22,261)






Statement of Profit and Loss for the period January 1, 2013 to March 31, 2014


Period ended March 31, 2014 Year ended December 31, 2012

` ` ` `

A. Cash Flow from Operating Activities

Operating Loss before tax (16,224) (22,261)

Adjustment for:

Trade and other receivables – –

Trade and other payables 15,545 12,230

15,545 12,230

Cash used in operations (679) (10,031)

Direct taxes paid – –

Net Cash used in operating activities (679) (10,031)

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) (679) (10.031)

Cash and Cash Equivalents opening 679 10,710

Cash and Cash Equivalents closing 0 679

Net decrease in cash and cash equivalents (679) (10.031)

Cash Flow Statement for the period January 1, 2013 to March 31, 2014

As per our report of even date attached For and on behalf of the Board








1. Significant Accounting Policies (a) Basis of Preparation

The accounts have been prepared under historical cost concept on an accrual basis.2. Share Capital

As at March 31, 2014 As at December 31, 2012` `

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 March 31, 2014 As at December 31, 2012No. of Shares ` No. of Shares `

(a) Reconcilliation 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 March 31, 2014 As at December 31, 2012

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

As at March 31, 2014 As at December 31, 2012` `

3. Reserves and SurplusSurplus in Statement of Profit and Loss Balance as at the beginning of the year (180,746) (158,485) Profit/(Loss) for the year (16,224) (22,261)

Balance as at the end of the year (196,970) (180,746)

4. Other Current LiabilitiesStatutory Audit Fees 14,045 11,030Others 85,986 73,456

100,031 84,486

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 – 679

– 679

Notes forming part of the Financial Statements as at and for the period January 1, 2013 to March 31, 2014


Period ended March 31, 2014

Year ended December 31, 2012

` `7. Other Expenses

Rent 1,500 1,200 Auditors’ Remuneration 14,045 11,030Bank Charges 679 10,031

16,224 22,261

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. (Loss)/Earning Per Share Period endedMarch 31, 2014

Year endedDecember 31, 2012

Loss used as numerator in calculating Basic / Diluted Earnings Per share(Loss)/Profit for the period/year (`) (16,224) (22,261)Number of Equity Share 10,150 10,150(Loss)/Earning Per Share (` per Equity Share of ` 10 each) – Basic and Diluted (1.60) (2.19)

11. Related Party DisclosureRelationshipSchering-Plough (India) Ltd., is wholly owned subsidiary of Fulford (India) Limited

Related Party TransactionRent paid to Fulford 1,500 1,200

Balance at the period endPayable 6,300 4,800Fulford (India) Limited

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. During the period, the company has changed its accounting year end to March 31, 2014. Accordingly, the figures for the current period are for the fifteen months’ period from January 1, 2013 to March 31, 2014 and are not comparable with those of the previous year.

15. Figures for the previous year have been regrouped/reclassified wherever necessary.

Signatures to Notes 1 to 15.



Kirit Sheth Giridhar Sanjeevi DirectorProprietorMembership No. 037824



Notes forming part of the Financial Statements as at and for the period January 1, 2013 to March 31, 2014 (Contd.)


To the Board of Directors of Fulford (India) Limited

1. We have audited the accompanying consolidated financial statements (the ‘Consolidated Financial Statements’) of Fulford (India) Limited (the ‘company’) and its subsidiary; hereinafter referred to as the ‘Group’ (Refer Note 1 to the attached consolidated financial statements) which comprise the consolidated Balance Sheet as at 31st March, 2014 and the consolidated Statement of Profit and Loss and the consolidated Cash Flow Statement for the period 1st January, 2013 to 31st March, 2014 and a summary of significant accounting policies and other explanatory information which we have signed under reference to this report.

Management’s Responsibility for the Consolidated Financial Statements2. The company’s management is responsible for the preparation of these consolidated financial statements

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. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated 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 consolidated financial statements based on our audit.

We conducted our audit in accordance with the Standards on Auditing and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards 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.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgement, 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 auditors consider internal control relevant to the company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.


Opinion6. We report that the consolidated financial statements have been prepared by the company’s management in

accordance with the requirements of Accounting Standard (AS) 21 - Consolidated Financial Statements notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

7. Based on our audit and on consideration of report of other auditors on separate financial statements and on the other financial information of the component of the Group and to the best of our information and according to the explanations given to us, in our opinion, the accompanying consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2014;

(b) in the case of the consolidated Statement of Profit and Loss, of the profit for the period ended on that date; and

(c) in the case of the consolidated Cash Flow Statement, of the cash flows for the period ended on that date.

For Lovelock & Lewes

Firm Registration No. 301056EChartered Accountants



InDepenDenT AuDITORS’ RepORT



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



Consolidated Balance Sheet as at 31st March, 2014

noteAs at

31st March, 2014As at

31st December, 2012` ` ` `

equity and LiabilitiesShareholders’ Funds Share Capital 3 39,000,000 39,000,000 Reserves and Surplus 4 1,443,043,512 1,407,529,243

1,482,043,512 1,446,529,243

Non-Current Liabilities Other Long-term Liabilities 5 – 1,678,994 Long-term Provisions 6 49,910,309 46,867,277

49,910,309 48,546,271

Current Liabilities Trade Payables 7 465,262,879 399,983,301 Other Current Liabilities 8 49,052,065 76,375,090 Short-term Provisions 9 30,396,610 37,080,338

544,711,554 513,438,729 Total 2,076,665,375 2,008,514,243

AssetsNon-Current Assets Fixed Assets 10 Tangible Assets 11,925,113 26,711,942 Intangible Assets 1 44,481

11,925,114 26,756,423 Deferred Tax Assets (Net) 11 46,758,063 59,616,286 Long-term Loans and Advances 12 272,981,797 189,976,096 Other Non-Current Assets 13 6,677,605 7,612,962

338,342,579 283,961,767

Current Assets Inventories 14 357,991,202 446,992,230 Trade Receivables 15 31,847,356 64,588,310 Cash and Bank Balances 16 1,296,769,054 1,113,580,817 Short-term Loans and Advances 17 27,150,788 32,109,660 Other Current Assets 18 24,564,396 67,281,459

1,738,322,796 1,724,552,476 Total 2,076,665,375 2,008,514,243

The Notes are an integral part of the Consolidated Financial Statements.



Consolidated Statement of profit and Loss for the period 1st January, 2013 to 31st March, 2014

noteperiod ended

31st March, 2014Year ended

31st March, 2012` ` ` `

RevenueRevenue from Operations (Gross) 22 2,698,278,157 2,156,295,927 Less: Excise Duty 1,919,922 2,580,791 Revenue from Operations (Net) 2,696,358,235 2,153,715,136 Other Income 23 125,447,053 96,485,659 Total Revenue 2,821,805,288 2,250,200,795

expensesCost of Materials Consumed 24 27,165,122 31,628,796 Purchases of Stock-in-Trade 1,256,438,234 1,150,267,512 Changes in Inventories of Finished Goods and Stock-in-Trade 25 66,872,777 1,311,148 Employee Benefits Expense 26 505,039,302 450,914,673 Finance Costs 27 9,490,008 443,531 Depreciation and Amortisation Expense 15,154,751 17,041,390 Other Expenses 28 887,361,302 671,104,987 Total Expenses 2,767,521,496 2,322,712,037 Profit/(Loss) before Tax 54,283,792 (72,511,242)Tax Expense For the period/year Current Tax 15,876,652 – Less: Minimum Alternate Tax

Credit Entitlement 6,088,792 Net Current Tax 9,787,860 –

Deferred Tax 171,872 (22,571,831)

9,959,732 (22,571,831) For earlier years Current Tax (13,002,170) – Deferred Tax 12,686,351 –

(315,819) –

9,643,913 (22,571,831)Profit/(Loss) for the period/year 44,639,879 (49,939,411)Earnings/(Loss) per Share - Basic and Diluted 11.45 (12.80)(` per Equity Share of ̀ 10 each)[Refer Note 36]The Notes are an integral part of the Consolidated Financial Statements.






Consolidated Cash Flow Statement for the period 1st January, 2013 to 31st March, 2014



` ` ` `

A. Cash flow from operating activities

Net Profit/(Loss) before Tax 54,283,792 (72,511,242)

Adjustments for –

Depreciation and Amortisation Expense 15,154,751 17,041,390

Interest Income (107,146,890) (87,810,257)

Profit on Sale/Disposal of Fixed Assets (Net) (19,385) (198,360)

Finance Costs 9,490,008 443,531

Unrealised Exchange Loss/(Gain) (Net) 11,244 (21,472,362)

(82,510,272) (91,996,058)

Operating loss before working capital changes (28,226,480) (164,507,300)

Adjustments for –

Trade and Other Receivables 85,644,646 (5,853,058)

Inventories 89,001,028 127,199

Trade and Other Payables 28,013,879 (65,741,461)

202,659,553 (71,467,320)

Cash generated from/(used in) operations 174,433,073 (235,974,620)

Direct Taxes paid (Net of refund of taxes) (84,461,565) (30,227,077)

Net cash from/(used in) operating activities 89,971,508 (266,201,697)

B. Cash flow from investing activities

Purchases of Fixed Assets (including advances for capital expenditure) (326,213) (2,212,848)

Sale of Fixed Assets 22,156 207,066

(Investment in)/Receipt of Deposits with Banks with maturity of more than 3 months (Net) (1,668,199) (2,075,475)

Interest received 106,505,422 88,786,232

Net cash from investing activities 104,533,166 84,704,975



Consolidated Cash Flow Statement for the period 1st January, 2013 to 31st March, 2014 (contd.)



` ` ` `

C. Cash flow from financing activities

Interest paid (9,490,008) (443,531)

Dividend paid (3,965,029) (13,611,999)

Tax paid on Dividend (632,678) (2,214,371)

Net cash used in financing activities (14,087,715) (16,269,901)

Net increase/(decrease) in cash and cash equivalents 180,416,959 (197,766,623)

Cash and Cash Equivalents – Opening Balance 1,112,806,392 1,310,573,015

Cash and Cash Equivalents – Closing Balance 1,293,223,351 1,112,806,392

Notes:

1. The above Consolidated 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 3(C) of Section 211 of the Companies Act, 1956 [Refer Note 2(a)].

2. During the period, the company has changed its accounting year end to 31st March, 2014. Accordingly, the figures for the current period are for the fifteen months’ period from 1st January, 2013 to 31st March, 2014 and are not comparable with those of the previous year.

3. 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 notified under the Companies Act, 1956 (the ‘Act’) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. 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 General Circular 15/2013 dated 13th September, 2013 read with General Circular 08/2014 dated 4th April, 2014, till the Standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Act 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 Act 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 VI 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 Fixed 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 and impairment loss. Depreciation is provided on Straight Line Method, pro-rata to the period of use, at the rates specified in Schedule XIV of the Act

or the rates based on useful lives of the assets as estimated by the management, whichever are higher. The rates based on useful lives of the assets in the following categories are estimated to be higher than those specified in Schedule XIV of the Act:

Description Estimated Useful Life

Tangible Assets Plant and Equipment 6.67 years Furniture and Fixtures 10 or 12 years Vehicles 5 years Office Equipment 5 or 6.67 years Computers 3 or 5 years Leasehold Improvements 5 years

Intangible Assets Computer Software 3 years

Fixed assets costing ` 5,000 or less are fully depreciated/amortised in the period/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.

Notes forming part of the Consolidated Financial Statements as at and for the period 1st January, 2013 to 31st March, 2014


(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

Sales 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 period/year.

Service income is recognised on the basis of contractual arrangements and are net of service tax.

Dividend income is recognised when the right to receive dividend is established.

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 Benefits

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 period 1st January, 2013 to 31st March, 2014 (contd.)


(h) Taxes on Income Current tax is determined as the amount of tax payable in respect of estimated taxable income for the period/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.

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) 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.

(j) 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 at31st March, 2014


` `

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 period/year 3,900,000 39,000,000 3,900,000 39,000,000 Number of shares outstanding as at the end of the period/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, 2,923,237 (Previous year - 2,113,520) shares are held by Dashtag, UK, the holding Company [Refer Note 42].(d) List of shareholders holding more than 5% shares as at the Balance Sheet date [Refer Note 42].

Name of the ShareholderAs at

31st March, 2014As at

31st December, 2012

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

Dashtag, UK 2,923,237 74.95 2,113,520 54.19





` ` ` `4. Reserves and Surplus

Capital Reserve 51,000 51,000 Securities Premium Reserve 394,849,452 394,849,452 General Reserve

Balance as at the beginning of the period/year 681,024,935 681,024,935 Add: Transfer from Surplus in Statement of

Profit and Loss 3,349,208 –Balance as at the end of the period/year 684,374,143 681,024,935

Surplus in Statement of Profit and LossBalance as at the beginning of the period/year 331,603,856 386,075,945 Profit/(Loss) for the period/year 44,639,879 (49,939,411)

376,243,735 336,136,534 Less: Appropriations Proposed Dividend 7,800,000 3,900,000 Tax on Proposed Dividend 1,325,610 632,678 Transfer to General Reserve 3,349,208 –Balance as at the end of the period/year 363,768,917 331,603,856

1,443,043,512 1,407,529,243

5. Other Long-term LiabilitiesAccrued Rent – 1,678,994

6. Long-term ProvisionsProvision for Employee Benefits - Provision for Compensated Absences [Refer Note 32(C)] 27,693,000 23,508,000 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] 1,194,145 2,336,113

49,910,309 46,867,277

7. Trade PayablesMicro and Small Enterprises [Refer Note 38] 1,240,859 707,145 Others 464,022,020 399,276,156

465,262,879 399,983,301

8. Other Current LiabilitiesUnpaid Dividends* 709,396 774,425 Statutory Dues 16,873,167 19,892,549 Accrued Rent – 4,029,573 Employee Benefits Payable 27,031,808 49,924,726 Advances from Customers 4,437,694 1,753,817

49,052,065 76,375,090

* There are no amounts due for payment to the Investor Education and Protection Fund under Section 205C of the Act as at the period/year end.

9. Short-term ProvisionsProvision for Employee Benefits - Provision for Compensated Absences [Refer Note 32(C)] 6,088,000 6,011,000 Proposed Dividend 7,800,000 3,900,000 Tax on Proposed Dividend 1,325,610 632,678 Provision for Non-Sellable Sales Returns [Refer Note 29] 15,183,000 26,536,660

30,396,610 37,080,338



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` ` ` `11. Deferred Tax Assets (Net)

Deferred Tax AssetsDepreciation/Amortisation 10,191,244 7,757,070 Provision for Doubtful Debts, Advances and Deposits 3,727,594 3,568,501 Provision for Employee Benefits 11,482,162 9,577,440 Provision for Non-Sellable Sales Returns 5,160,702 8,609,819 Provision for Diminution in the Value of Long-term Investment 34,500 32,932 Unabsorbed Depreciation and Tax Loss – 12,025,866 Others 16,161,861 18,044,658

46,758,063 59,616,286 Less: Deferred Tax Liability – –

46,758,063 59,616,286 12. Long-term Loans and Advances

(Unsecured, Considered Good unless otherwise stated)Security Deposits

Considered Good 53,865,358 54,484,828 Considered Doubtful 1,689,285 1,171,329

55,554,643 55,656,157 Less: Provision for Doubtful Deposits 1,689,285 1,171,329

53,865,358 54,484,828 Other Deposits Considered Good 12,020,824 11,404,642

Considered Doubtful 616,199 616,199 12,637,023 12,020,841

Less: Provision for Doubtful Security Deposits 616,199 616,199 12,020,824 11,404,642

Advances recoverable in cash or in kind or for value to be received 1,823,152 6,490,038 Current Taxation [Net of Provision of ` 698,411,811 (Previous year ` 695,537,329)] 205,272,463 117,596,588

272,981,797 189,976,096 13. Other Non-Current Assets

Margin Money Deposits with more than 12 months maturity 6,444,854 7,612,962 Interest accrued but not due on Deposits 232,751 –

6,677,605 7,612,962 14. Inventories

(At lower of cost and net realisable value)Raw Materials 974,453 21,596,412 Finished Goods 15,359,322 13,856,930 Stock-in-Trade [including in transit ` 1,057,373 (Previous year - Nil)] 340,854,362 409,229,531 Packing Materials 803,065 2,309,357

357,991,202 446,992,230




` ` ` `15. Trade Receivables

Outstanding for a period exceeding six months from the date they were due for payment

Unsecured, Considered Good 2,919,439 19,480,699 Unsecured, Considered Doubtful 8,661,252 9,211,089

11,580,691 28,691,788 Less: Provision for Doubtful Debts 8,661,252 9,211,089

2,919,439 19,480,699 Others

Unsecured, Considered Good 28,927,917 45,107,611 31,847,356 64,588,310

16. Cash and Bank BalancesCash and Cash Equivalents

Balances with Banks Current Accounts 38,484,658 61,757,300 Deposit Accounts (less than 3 months maturity) 1,253,032,243 1,048,773,501

1,291,516,901 1,110,530,801 Cheques on Hand 1,706,450 2,275,591

1,293,223,351 1,112,806,392 Other Bank Balances

Unpaid Dividend Accounts 709,396 774,425 Margin Money Deposits up to 12 months maturity 2,836,307 –

3,545,703 774,425 1,296,769,054 1,113,580,817

17. Short-term Loans and Advances(Unsecured, Considered Good)Advances recoverable in cash or in kind or for value to be received 21,061,996 32,055,006 Balances with Government Authorities – 54,654 Minimum Alternate Tax Credit Entitlement 6,088,792 –

27,150,788 32,109,660

18. Other Current AssetsOther Receivables from Related Parties 12,586,931 55,712,711 Interest accrued but not due on Deposits 11,977,465 11,568,748

24,564,396 67,281,459

19. 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 465,435,659 210,142,188 Fringe Benefits Tax Matter 128,412 128,412 Sales tax Matters 1,794,910 17,787,124 Customs Duty Matter 536,200 536,200 Employee related Matters 7,745,017 7,674,418 Others 427,500 388,994

(b) Guarantees issued by Banks on behalf of the Company 11,595,694 12,719,648

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 dependant on the future performance of the obligations by the Company

and/or other parties.

Notes forming part of the Consolidated Financial Statements as at and for the pe-riod 1st January, 2013 to 31st March, 2014 (contd.)



20. Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for - Nil (Previous year ` 39,900).

(b) Estimated amount of contracts remaining to be executed for Purchases of Stock-in-Trade ` 312,431,773 (Previous year ` 18,672,283).

Period ended 31st March, 2014


` ` ` `

21. Proposed DividendProposed Dividend 7,800,000 3,900,000 Number of shares outstanding as at the end of the period/year 3,900,000 3,900,000 Dividend per Share (` per Equity Share of ` 10 each) 2.00 1.00

22. Revenue from OperationsSale of Products 2,696,175,376 2,152,807,371 Sale of Services 2,102,781 3,488,556

2,698,278,157 2,156,295,927 Less: Excise Duty 1,919,922 2,580,791

Revenue from Operations (Net) 2,696,358,235 2,153,715,136

23. Other IncomeInterest Income 107,146,890 87,810,257 Profit on Sale/Disposal of Fixed Assets (Net) 19,385 198,360 Net Gain on Foreign Currency Transactions and Translation 701,708 –Liabilities and Provisions no longer required written back 15,645,040 7,471,466 Miscellaneous Income 1,934,030 1,005,576

125,447,053 96,485,659

24. Cost of Materials ConsumedRaw Materials Consumed Opening Stock 21,596,412 19,068,763 Add: Purchases 1,908,776 47,643,739

23,505,188 66,712,502 Less: Sale of Raw Materials (at cost) 159,080 16,564,385


22,371,655 28,551,705 Packing Materials Consumed Opening Stock 2,309,357 3,653,057 Add: Purchases 3,287,175 1,733,391


4,793,467 3,077,091

27,165,122 31,628,796





` ` ` `

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

Opening Stock

Finished Goods 13,856,930 15,159,017

Stock-in-Trade 409,229,531 409,238,592

423,086,461 424,397,609

Closing Stock

Finished Goods 15,359,322 13,856,930

Stock-in-Trade 340,854,362 409,229,531

356,213,684 423,086,461

66,872,777 1,311,148

26. Employee Benefits Expense

Salaries and Bonus 510,304,838 416,344,393

Contribution to Provident and Other Funds [Refer Note 32(A)] 59,030,951 42,728,203

Gratuity [Refer Note 32(B)] 17,624,154 12,783,000

Compensated Absences 8,929,074 10,226,000

Staff Welfare Expenses 24,142,313 27,022,190

620,031,330 509,103,786

Less: Reimbursement of Salary and Benefits shared by/with Group Companies (Net) (114,992,028) (58,189,113)

505,039,302 450,914,673

27. Finance Costs

Interest on Income-tax 539,808 172,187

Interest to a Supplier 7,096,068 –

Others 1,854,132 271,344

9,490,008 443,531





` ` ` `

28. Other ExpensesConsumption of Stores 3,316,915 6,287,285

Electricity 5,975,786 3,295,017

Rent [Refer Note 35] 73,331,038 62,894,870

Repairs and Maintenance

Buildings 5,533,094 2,535,887

Plant and Machinery 464,813 2,834,585

Others 5,394,306 3,481,691

11,392,213 8,852,163

Insurance 627,566 753,421

Rates and Taxes

Excise Duty 621,765 1,085,487

Sales tax 20,864,103 10,966,337

Others 10,380,972 520,134

31,866,840 12,571,958

Manufacturing Charges 3,269,308 2,624,635

Quality Control and Quality Assurance 1,349,284 6,076,753

Legal and Professional Charges 85,514,858 39,065,232

Auditors' Remuneration [Refer Note 31] 5,294,088 3,427,439

Directors' Commission and Sitting Fees 1,680,285 609,562

Travelling and Conveyance 138,811,935 150,751,494

Printing and Stationery 3,447,154 3,580,338

Postage and Telephone 19,880,803 17,335,398

Advertisement and Sales Promotion 289,796,214 198,636,532

Freight and Forwarding 48,860,508 41,129,070

Warehousing Charges 99,890,672 68,118,092

Cash Discount 24,714,288 17,474,801

Commission on Sales 20,929,266 4,079,199

Bad Debts and Advances written off 826,878 1,382,339

Provision for Doubtful Debts, Advances and Deposits (Net) 93,119 4,876,087

Net Loss on Foreign Currency Transactions and Translation – 5,711,094

Miscellaneous Expenses 16,492,284 11,572,208

887,361,302 671,104,987


Provision for Non-Sellable Sales Returns

Provision for Demand under the Drugs (Prices Control)

Order, 1979

Period ended 31st March,

2014


2012


2014


2012

` ` ` `

29. Movement in Provisions

Balance as at the beginning of the period/year 26,536,660 21,891,933 19,462,000 19,462,000

Provision made during the period/year 15,183,000 37,015,940 – –

Amounts used during the period/year 26,536,660 32,371,213 – –

Balance as at the end of the period/year 15,183,000 26,536,660 19,462,000 19,462,000

Provision for Sales Tax


2014


2012

` `


Provision made during the period/year – –

Amounts used/written back during the period/year 1,141,968 707,724


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. Auditors' Remuneration

Audit Fees 2,668,550 1,404,500

Tax Audit Fees 1,018,263 814,610

Other Services 1,348,320 1,011,240

Reimbursement of Expenses 258,955 197,089

5,294,088 3,427,439





2014


2012

` `

32. Employee Benefits(A) Defined Contribution Plans The Company has recognised the following amounts in the Statement of

Profit and Loss for the period/year: (i) Contribution to Provident Fund 27,994,353 20,197,387 (ii) Contribution to Superannuation Fund 30,764,144 22,284,726 (iii) Contribution to Employees’ State Insurance Scheme 37,865 45,218 (iv) Contribution to Employees’ Deposits Linked Insurance Scheme 234,589 200,872

59,030,951 42,728,203

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) 9.25% 8.50% (b) Rate of increase in Compensation Levels 8.00% 7.00% (c) Rate of Return on Plan Assets 9.25% 9.25% (d) Normal Retirement Age 60 60 (e) Expected average remaining working lives of employees in number of years 22 25

Gratuity Gratuity

` ` (i) Changes in the Present Value of Obligation

(a) Opening Present Value of Obligation 63,315,645 53,789,645 (b) Interest Cost 6,023,000 4,167,000 (c) Past Service Cost – – (d) Current Service Cost 7,117,000 4,511,000 (e) Curtailment Cost/(Credit) – – (f) Settlement Cost/(Credit) – – (g) Benefits Paid (9,829,000) (9,539,000) (h) Actuarial Loss 3,536,000 10,387,000 (i) Closing Present Value of Obligation 70,162,645 63,315,645

(ii) Changes in the Fair Value of Plan Assets (a) Opening Fair Value of Plan Assets 68,974,799 62,684,799 (b) Expected Return on Plan Assets 8,098,846 5,799,000 (c) Actuarial (Loss)/Gain (1,076,000) 483,000 (d) Employers’ Contributions 11,965,000 9,547,000 (e) Benefits Paid (9,829,000) (9,539,000) (f) Closing Fair Value of Plan Assets 78,133,645 68,974,799

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

Administered by Life Insurance Corporation of India 100% 100%




2014


2012

` ` (iv) Amount recognised in the Balance Sheet (a) Present Value of Obligation as at the period/year end 70,162,645 63,315,645 (b) Fair Value of Plan Assets as at the period/year end 70,162,645 68,974,799 (c) Asset recognised in the Balance Sheet* – (5,659,154) (d) Experience (Loss)/Gain adjustments on Plan Liabilities (8,029,000) 288,000 (e) Experience Gain adjustments on Plan Assets – 213,000 (f) Actuarial Gain due to change of assumptions 4,113,000 1,483,000 * The excess of fair value of plan assets over present value of obligation

as at 31st March, 2014 of ` 7,971,000 has not been recognised since the plan assets are in an Income Tax Approved Irrevocable Trust Fund.

Year ended 31st December,2011 2010 2009

Gratuity Gratuity Gratuity ` ` `

(a) Present Value of Obligation as at the year end 53,789,645 48,621,645 43,561,645 (b) Fair Value of Plan Assets as at the year end 62,684,799 52,845,799 40,430,799 (c) (Asset)/Liability recognised in the Balance Sheet (8,895,154) (4,224,154) 3,130,846 (d) Experience (Loss)/Gain adjustments on Plan

Liabilities (3,593,000) 4,929,000 Not Applicable (e) Experience Gain adjustments on Plan Assets 164,000 54,000 Not Applicable (f) Actuarial Gain/(Loss) due to change of

assumptions942,000 (804,000) Not Applicable


2014


2012

` ` (v) Expenses recognised in the Statement of Profit and Loss (a) Current Service Cost 7,117,000 4,511,000 (b) Past Service Cost – – (c) Interest Cost 6,023,000 4,167,000 (d) Expected Return on Plan Assets (8,098,846) (5,799,000) (e) Curtailment Cost/(Credit) – – (f) Settlement Cost/(Credit) – – (g) Net Actuarial Loss 4,612,000 9,904,000 (h) Employees' Contribution – – (i) Total Expenses recognised in the Statement of

Profit and Loss @ 9,653,154 12,783,000 @ 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 (including ` 5,659,154 for earlier years) on account of excess contribution made by the Company.

(C) Other Long-term Employee Benefit The liability for Compensated Absences as determined by independent actuary as at the Balance Sheet date is

` 33,781,000 (Previous year ` 29,519,000).

33. 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.



34. 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 period/year(a) Fellow Subsidiaries Essex Chemie AG, Switzerland

MSD International GMBH, SingaporeMSD Pharmaceuticals Private Limited, IndiaOrganon (India) Private Limited, India

Merck Sharp & Dohme Corp., USA Shanghai Schering-Plough Pharmaceuticals Co. Ltd., China*SOL Limited (Singapore Branch), Singapore*SOL Limited, Bermuda*Merck Sharp & Dohme (Australia) Pty Ltd., AustraliaMerck Sharp & Dohme (Asia) Limited, Hong KongMerck Sharp & Dohme (I.A.) Corp., PhilippinesMerck Sharp & Dohme (Malaysia) SDN. BHD., MalaysiaMSD (Thailand) Limited, Thailand*Merck Sharp & Dohme B. V., Netherlands

(b) Key Management Personnel K. G. AnanthakrishnanGiridhar Sanjeevi (from 22nd July, 2013)*Rajesh Marwaha (Up to 26th June, 2013)* No transactions during the current period

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



` ` ` ` (a) Holding Company Dividend paid 2,923,237 7,360,805

(b) Fellow Subsidiaries Purchases of Stock-in-Trade Essex Chemie AG 178,088,549 666,279,763 Merck Sharp & Dohme B. V. 481,196,351 –

659,284,900 666,279,763

Purchases of Raw Materials MSD International GMBH – 13,293,288 SOL Limited – 28,095,400

– 41,388,688 Services Rendered Merck Sharp & Dohme Corp. 1,723,085 – MSD Pharmaceuticals Private Limited 23,442,889 33,840,407 Organon (India) Private Limited 77,862,317 21,480,505 MSD International GMBH 15,505,908 8,574,241

118,534,199 63,895,153 Services Availed MSD Pharmaceuticals Private Limited 2,024,879 4,608,481





` ` ` ` Recovery of Expenses MSD Pharmaceuticals Private Limited 4,244,810 4,070,264 Organon (India) Private Limited 10,390,367 12,264,760 Merck Sharp & Dohme Corp. 25,961,493 20,665,977 MSD International GMBH 11,219,017 20,247,605 Merck Sharp & Dohme (Australia) Pty Ltd. 94,680 – Shanghai Schering-Plough

Pharmaceuticals Co. Ltd. – 1,414,072 SOL Limited (Singapore Branch) – 3,624,132 Merck Sharp & Dohme (I.A.) Corp. – 208,588 Merck Sharp & Dohme (Asia) Limited – 175,456 MSD (Thailand) Limited – 166,871 Merck Sharp & Dohme (Malaysia) SDN.

BHD. – 41,590 51,910,367 62,879,315

Reimbursement of Expenses Merck Sharp & Dohme (Asia) Ltd. 10,048 – MSD Pharmaceuticals Private Limited 15,769,620 6,761,452 Organon (India) Private Limited 4,889,721 3,503,053

20,669,389 10,264,505 Balances as at the Period/year end - Outstanding Receivables Essex Chemie AG – 6,381,531 Merck Sharp & Dohme (I.A.) Corp. – 206,010 Merck Sharp & Dohme (Malaysia) SDN.

BHD. – 41,202 Merck Sharp & Dohme (Asia) Ltd. – 173,818 Merck Sharp & Dohme Corp. 1,300,620 6,370,264 MSD International GMBH 3,926,907 14,607,563 MSD Pharmaceuticals Private Limited – 4,054,052 Organon (India) Private Limited 7,359,404 22,477,403 Shanghai Schering-Plough

Pharmaceuticals Co. Ltd. – 1,400,868 12,586,931 55,712,711

Outstanding Payable Essex Chemie AG – 252,908,783 Merck Sharp & Dohme B. V. 319,409,497 – MSD Pharmaceuticals Private Limited 5,445,373 – Merck Sharp & Dohme (Asia) Limited 10,048 –

324,864,918 252,908,783

(c) Key Management Personnel Remuneration $ K. G. Ananthakrishnan 11,869,996 7,319,708 Rajesh Marwaha @ 2,024,879 4,608,481

13,894,875 11,928,189

@ Represents amount reimbursed to MSD Pharmaceuticals Private Limited by way of cross charging arrangement.

$ Excludes Provision for Employee Benefits and Stock Options.



2014


2012

` `

35. Disclosures for Operating Leases

(a) Lease payments recognised in the Statement of Profit and Loss 73,331,038 54,955,949

(b) Significant Leasing Arrangements

The Company has significant operating leases for office premises, warehouses, laptops, printers, office equipment and vehicles. These lease arrangements range for a period between 11 months and 5 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 25,755,222 63,295,011

(ii) Later than one year and not later than five years – 26,833,763

(iii) Later than five years – –

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

by the weighted average number of equity shares outstanding during the period/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. Earnings/(loss) per share has been computed as under:


2014


2012

Profit/(Loss) for the period/year (`) 44,639,879 (49,939,411)

Weighted average number of Shares 3,900,000 3,900,000

Earnings/(Loss) per Share (` per Equity Share of ` 10 each) – Basic and Diluted 11.45 (12.80)

37. 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, 2014 As at 31st December, 2012

Particulars

Amount in Foreign

CurrencyAmount in

`

Amount inForeign

CurrencyAmount in

`

(A) Receivables

USD 86,667 5,227,527 337,464 18,538,925

EURO – – 11,046 805,923

THB – – 83,685 149,992

(B) Payables

USD 3,122 188,315 27,956 1,535,763




2014


2012

` ` 38. Disclosures as required by the Micro, Small and Medium

Enterprises Development Act, 2006 are as under:(a) The principal amount and the interest due thereon remaining unpaid to suppliers

(i) Principal 462,615 344,750

(ii) Interest due thereon 778,244 362,395

1,240,859 707,145

(b) (i) The delayed payments of principal amount paid beyond the appointed date during the entire accounting period/year 17,343,209 –

(ii) Interest actually paid under Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 – –

(c) (i) Normal Interest accrued during the period/year, for all the delayed payments, as per the agreed terms – –

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

(d) (i) Total Interest accrued during the period/year 415,849 –

(ii) Total Interest accrued during the period/year and remaining unpaid 415,849 –

(e) Included in (d) above is - Nil (Previous year - Nil) being interest on amounts outstanding as at the beginning of the accounting period/year.

The above information and that given in Note 7 - 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 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 ` 40,998,830 (Previous year ` 16,111,593) towards business expansion up to 31st March, 2014. The remaining amount of ` 361,501,170 continue to be invested in fixed deposits with banks pending utilisation of the same.

40. The Company has appointed independent consultants for conducting a transfer pricing study for the year ended 31st March, 2014 to determine whether the transactions with associate enterprises were undertaken at “arm's length basis”. Adjustments, if any, arising from the transfer pricing study shall be accounted for, as and when the study is completed. The management confirms that all international transactions with associate enterprises are undertaken at negotiated contracted prices on usual commercial terms. The transfer pricing report for the year ended 31st March, 2013 has been obtained and there are no adverse comments requiring adjustments in the financial statements for the current period.

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. Morgan Stanley India Company Private Limited, on behalf of Dashtag, UK , the holding Company (Promoter) which is an indirect wholly owned subsidiary of Merck & Co., Inc., USA, announced a voluntary open offer to acquire 821,913 equity shares of the Company on 25th July, 2012. The tendering period closed on 28th September, 2012 and Dashtag, UK received approval of Foreign Investment Promotion Board on 25th October, 2012 and subsequently, 593 shareholders holding 820,150 shares who had validly tendered their shares during the tendering period between 14th September, 2012 and 28th September, 2012 were paid by Dashtag, UK on 29th October, 2012 and their shares were accepted by Dashtag, UK under the open offer. Out of these 820,150 shares, 10,433 shares in physical form acquired under the voluntary open offer were already transferred to the account of Dashtag, UK. Remaining 809,717 shares which were lying in ‘LIIPL Fulford India Open Offer Escrow Demat Account’ were the shares acquired under the voluntary open offer in dematerialised form have been transferred to the account of Dashtag, UK during the current period. Consequently, the shareholding of Dashtag, UK has increased to 74.95%.

43. On 25th April, 2014, the promoter of the Company, Dashtag, UK (“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. Subject to approval of the proposed Delisting Offer by way of a special resolution by the shareholders of the Company and receipt of applicable regulatory approvals, the Acquirer may make a delisting offer in accordance with the Delisting Regulations.

44. During the period, the Company has changed its accounting year end to 31st March, 2014. Accordingly, the figures for the current period are for the fifteen months’ period from 1st January, 2013 to 31st March, 2014 and are not comparable with those of the previous year.

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

Signatures to Notes 1 to 45






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 2013-2014

To be handed over at the entrance of Meeting HallI hereby record my presence at the 66th ANNUAL GENERAL MEETING of the Company at Exchange Plaza, NSE Auditorium, Ground Floor, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051 on Thursday, August 7, 2014 at 11.30 a.m.

Name of the Member:

Folio/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

66th ANNUAL GENERAL MEETING – AUGUST 7, 2014

Name of the Member(s)

Registered Address

E-mail ID

Folio No / Client ID

DP ID

I/We, being the member(s) of shares of the above named Company, 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 66th Annual General Meeting of the Company, to be held on Thursday, August 7, 2014 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:

PROxY FORM[Pursuant to Section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

Item No Resolutions

Vote (optional see Note 2)

No. of Shares**

I/We assent to the

Resolution (FOR)

I/We dissent to the

Resolution (AGAINST)

1. To consider and adopt the Audited Balance Sheet as at March 31, 2014 and the Profit & Loss Account for the fifteen months period ended on that date together with the Directors’ and the Auditors’ Reports thereon. (Ordinary Resolution)

2. To declare Dividend for the fifteen months period ended March 31, 2014. (Ordinary Resolution)

3. To appoint a Director in place of Mr. K. G. Ananthakrishnan, who retires and being eligible, offers himself for re-appointment. (Ordinary Resolution)

4. To appoint a Director in place of Mr. Kevin Ali, who retires and being eligible, offers himself for re-appointment. (Ordinary Resolution)

5. To appoint M/s. Lovelock Lewes, Chartered Accountants (Firm Registration No. 3011056E) as Statutory Auditors of the Company, to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting of the Company and to fix their remuneration. (Ordinary Resolution)

6. To appoint Mr. Sandeep Sharma as a Non-Executive Director. (Ordinary Resolution)

7. To appoint Dr. Ajit Dangi as a Non-Executive Independent Director. (Ordinary Resolution)

8. To appoint Dr. V. S. Sohoni as a Non-Executive Independent Director. (Ordinary Resolution)

9. To appoint Mr. Homi Khusrokhan as a Non-Executive Independent Director. (Ordinary Resolution)

10. To approve payment of remuneration to Non Whole-time Directors. (Special Resolution)

11. To approve the remuneration of the Cost Auditor for the financial year ended March 31, 2015. (Ordinary Resolution)

** Each share shall have one vote.

Signed this day of 2014.

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. 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, is the subsidiary of Merck &

Co. Inc., Whitehouse Station, N.J., USA. Merck

knows as MSD across the world (except in the US

and Canada), operates in India via three separate

entities MSD Pharmaceuticals Private Limited,

Organon (India) Private Limited and Fulford (India)

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, Musculoskeletal and

Primary Care, and offers a strong and diversified

product portfolio of over 75 brands in total.

For more information visit, www.fulfordindia.com

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

OUR VISION

We make a difference in the lives of

people globally through our innovative

medicines, vaccines, biologic

therapies and consumer health. 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 recognized as a great

place to work, and to provide investors

with superior rate of return.

OUR MISSION

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.

WHAT WE STAND FOR


ANNUAL REPORT 2013 - 14

Committed to improving health and well-being around the world.

vakils

At MSD, we work hard to keep the world well.

HOW?

By providing people all across the globe, with innovative prescription

medicines, vaccines, consumer care 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.See all

we’re doing for you at

msd.in

CIN NO: L99999MH1948PLC006199

www.fulfordindia.com

Documents

ANNUAL REPORT 2013 - 14 - Fulford India Limited · Fulford (India) Limited Fulford (India) Limited ANNUAL REPORT 2013-14 FULFORD (INDIA) LIMITED OUR VISION We make a difference in