Home  »  Company
Union Budget 2017-18
Enter the first few characters of Company and click 'Go'
Sorry, unable to find the company details of Fulford india

Search NSE/BSE Listed Company Details By Alphabets

 
Subscribe now to get personal finance updates in your inbox!
Directors Report of Fulford (India) Ltd. Company
Home  »  Company  »  Fulford (India)  »  Quotes  »  Directors Report
Union Budget 2017-18
Enter the first few characters of Company and click 'Go'

Directors Report of Fulford (India) Ltd.

Mar 31, 2015

Dear Members,

The Directors hereby present the Sixty-Seventh Annual Report together with the Audited Accounts of the Company for the financial year ended March 31, 2015.

FINANCIAL RESULTS (Rs in Million)

Unconsolidated April 1 2014 Janua 1 2013 to Mar 31-15 to Mar 31-14

Sales (Net) 2,170.65 2,696.36

Other Income 142.28 125.45

Total Income 2,312.93 2,821.81

Profit before tax 47.88 54.30

Less: Tax Expense (Current Tax, Deferred Tax & Fringe Benefit Tax)-net 12.91 9.96

Less/(Add): Tax adjustment for previous years 11.85 (0.32)

Profit after tax 23.12 44.66

Balance in Profit & Loss Account 363.86 331.68

Amount available for appropriation 386.98 376.34

Out of which the following sums have been appropriated:

Proposed Dividend 5.85 7.80

Corporate Tax on Dividend 1.17 1.33

General Reserve — 3.35

Balance carried to Balance Sheet 379.96 363.86

Consolidated April 1 2014 Janua 1 2013 to Mar 31-15 to Mar 31-14

Sales (Net) 2,170.65 2,696.36

Other Income 142.28 125.45

Total Income 2,312.93 2,821.81

Profit before tax 47.86 54.28

Less: Tax Expense (Current Tax, Deferred Tax & 12.91 9.96 Fringe Benefit Tax)-net

Less/(Add): Tax adjustment for previous years 11.85 (0.32)

Profit after tax 23.10 44.64

Balance in Profit & Loss Account 363.77 331.61

Amount available for appropriation 386.87 376.25

Out of which the following sums have been appropriated:

Proposed Dividend 5.85 7.80

Corporate Tax on Dividend 1.17 1.33

General Reserve — 3.35

Balance carried to Balance Sheet 379.85 363.77

Note: The figures for the previous period are for fifteen months and are not comparable with those of the current year.

dividend

The Directors recommend a dividend of Rs. 1.50/- per equity share of Rs. 10/- each for the year ended March 31, 2015. If proposed dividend is approved by the Members at the Annual General Meeting, the total dividend payout will be Rs. 5.85 million. The tax on dividend payout borne by the Company will be Rs. 1.17 million.

Transfer to Reserves

During the current year, there is no transfer to General Reserve. total income

Our total income during the year reduced to Rs. 2,312.9 million from Rs. 2,821.8 million in the previous fifteen month period, declining at 18.0% (the annualized growth is 2.5% for the comparable period), impacted by the global decision to divest certain brands and consequent loss of distribution rights.

Profit

The Operating Profit before depreciation amounted to Rs. 53.9 million (2.33% of revenue) as against Rs. 69.5 million (2.46% of revenue) in the previous fifteen month period. The net profit after tax is Rs. 23.12 million (1.00% of revenue) as against Rs. 44.7 million (1.58% of revenue) in the previous fifteen month period.

LIQUIDITY

Your Company continues to be debt-free and maintain sufficient cash to meet our objectives. As on March 31, 2015 we had cash and bank balance of Rs. 657 million.

CHANGE IN NATURE OF BUSINESS

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

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF

The company which have occurred between the end of the financial year of the

COMPANY TO wHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There is nothing to report in this regard.

DETAILS OF Significant AND MATERIAL ORDERS pASSED BY THE Regulators OR COURTS OR TRIBUNALS IMpACTING THE GOING CONCERN STATUS AND COMpANY'S OpERATIONS IN FUTURE

There is nothing to report in this regard.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details pertaining to internal financial control systems and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMpANIES

The Company has a wholly owned subsidiary company viz., Schering-Plough (India) Private Limited as on March 31,2015.

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

The Annual Accounts for the year ended March 31,2015 as also the Auditors' Report in respect of Schering- Plough (India) Private Limited are attached to the Accounts of the Company and forming part of this Annual Report.

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.

FIXED DEPOSITS

The Company has not accepted any deposits during the year ended March 31, 2015. Also, there are no fixed deposits outstanding as on that date.

AUDIT COMMITTEE

The details pertaining to composition of Audit Committee are included in the corporate governance report, which forms part of this report.

RISK MANAGEMENT

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.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

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

TRANSACTIONS WITH RELATED PARTIES

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

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

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

STATUTORY 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 for a period of five years commencing from the financial year 2015-16 pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed thereunder.

AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT

The auditors' report and the secretarial auditors' report do not contain any qualifications, reservations or adverse remarks. Report of secretarial auditor is appended as Annexure 3 to the Directors' Report.

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

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

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

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

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

Mr. Giridhar Sanjeevi was appointed as an additional director with effect from August 8, 2014. Mr. Sanjeevi offers himself for appointment as a director of the Company.

Ms. Hwee Ping Chua was appointed as an additional director with effect from January 29, 2015. Ms. Chua offers herself for appointment as a director of the Company.

Pursuant to the provisions of Section 149 of the Companies Act, 2013, which came into force on April 1, 2014, Dr. Ajit Dangi, Mr. Homi Khusrokhan and Dr. Venkat Sohoni were appointed as independent directors for five (5) consecutive years at the annual general meeting of the Company held on August 7, 2014. Terms and conditions of appointment of independent directors are as per Schedule IV of the Act.

They have submitted a declaration that each of them meets the criteria of independence as required under Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year.

Mr. Kevin Ali resigned as a director of the Company with effect from January 2, 2015.

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. Sachin Gaikwad was appointed as a Company Secretary of the Company with effect from October 16, 2014 pursuant to the provisions of Section 203 of the Companies Act, 2013.

Mr. Giridhar Sanjeevi resigned as Chief Financial Officer of the Company with effect from May 22, 2015. The Company is in the process of identifying a suitable replacement at the earliest.

NUMBER OF MEETINGS OF THE BOARD

Five meetings of the Board were held during the year. For details of the meetings of the Board, please refer to corporate governance report, which forms part of the Annual Report.

PROCESS OF AGENDA CIRCULATION

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

BOARD EVALUATION

The Board monitors and reviews the Board evaluation framework as per the Clause 49 of the Listing Agreement requirement. The Companies Act, 2013 states that a formal annual evaluation needs to be done by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors excluding, the director being evaluated. The Board shall follow and complete the requirement during this financial year.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company's policy on Directors' appointment, remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the Annual Report.

Corporate SOCIAL RESpONSIBILITY (CSR)

Pursuant to the provisions of section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules 2014, the Company has constituted a CSR Committee and has adopted a CSR Policy.

In accordance with the provisions of the Companies Act, 2013 read with CSR Rules, the Company was required to spend Rs. 114,070 (Rupees One Lakh Fourteen Thousand Seventy Only) on CSR activities. The Company has contributed Rs. 1,50,000 (Rupees Once Lac Fifty Thousand Only) to Swach Bharat Kosh launched by Government of India during financial year 2014-15.

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

In addition to above your Company's parent Company (Merck & Co. Inc. Kenilworth, N.J. USA/Merck) is committed to doing well for the community at large and has implemented the following project in India:

MSD FOR MOTHERS iN iNDiA

MSD for Mothers' is a 10 year $500 million initiative to create a world where no woman dies due to complications from pregnancy and child birth. In India, MSD for Mothers has committed US $10 million (approx Rs. 630 million) to innovative partnerships with leading non-governmental organizations. These partnerships will engage and explore the potential of local private providers and services to strengthen maternal health care in three states with particularly high rates of maternal mortality. The states in India in which Merck for Mothers work in, are Jharkhand (278 maternal deaths per 100,000 live births), Rajasthan (331 maternal deaths per 100,000 live births) and Uttar Pradesh (345 maternal deaths per 100,000 live births). The partnerships are setting out to improve the affordability, accessibility and quality of private maternal health services and reach nearly 500,000 pregnant women over three years (2013-2016).

Merck for Mothers partner Jhpiego is developing standards of quality care and helping private providers meet these standards through training, continuous quality improvement and accreditation. Jhpiego in partnership with Federation of Obstretric & Gynaecological Societies of India (FOGSI) is working with more than 120 private health facilities with high case loads in 11 cities of Uttar Pradesh and Jharkhand. These 120 private sector facilities, range from single provider obstetric practice clinics to multi-specialty hospitals. To improve quality of childbirth care, Jhpiego through multi-stakeholder consultations developed 27 standards having four sections for childbirth care-normal labor and delivery (NLD), managing complications (MC), postnatal care (PNC) and postpartum family planning (PPFP).

In Rajasthan, Hindustan Latex Family Planning Promotion Trust (HLFPPT) is developing a sustainable social franchise network, 'called Merrygold', of private hospitals and health workers to a new context so women in 19 districts of rural and peri-urban areas of Rajasthan have better access to care throughout their pregnancy. Under this network so far, HLFPPT empaneled 20 Merrygold Urban and 16 Merrygold Rural hospitals and more than 1300 community health workers to provide standardised quality assured maternal health and family planning services in turn private-providers benefit from Merrygold branching, promotion and technical support for quality improvement.

Pathfinder International and World Health Partners, are working on a total market approach to strengthen and link the public and private sectors in 3 districts of Uttar Pradesh. Partners are adapting a health franchise network to include maternal health, linking remote providers to higher level care through referral and telemedicine, and ensuring that quality supplies reach the last mile. The project has progressed well in terms of setting up a network of private providers and creating referrals. The network's 9 private referral hospitals, 51 SKY Health Centers and 391 SKY Care Providers receive training, ongoing supportive supervision, marketing and branding support, linkages with public providers and access to SKY branded medicines. In the public sector, 916 ASHAs have been trained so far on recognition of danger signs and birth preparedness planning, and 21 ambulance emergency medical technicians (EMTs) were sensitized on the importance of timely referral, transportation and application of the non-pneumatic anti-shock Garment (NASG), 74 service providers (17 medical officers, 17 staff nurses, 40 ANMs) were trained on Clinical and Community Action to address PPH (CCA-PPH) continuum of care model, taking the total to 188 public sector providers trained. Overall, a total of 1,145 providers have been trained under the project so far in the public sector.

Till date over 300,000 women benefitted from this project, in getting improved quality of care in terms of deliveries, antenatal Services and Family Planning services.

EXTRACT OF ANNUAL RETURN

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

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 forms part of the Annual Report.

COMPLIANCE WITH THE CODE OF CONDUCT

The Company has put in place, a Code of Conduct effective February 9, 2005 which was amended on January 29, 2015, 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 and is given in Annexure 6, which forms part of this Report.

COST AUDIT

The Directors have appointed Mr. Vishesh Naresh Patani as Cost Auditor to conduct the Cost Audit for the financial year ended March 31, 2016.

WHISTLE BLOWER POLICY

The Company has formulated a Whistle Blower Policy for Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of Section 177(9) of the Act and the revised Clause 49 of the Listing Agreement with BSE Limited. This policy provides an opportunity to the employees and Directors of the Company to approach the Audit Committee in good faith, when they suspect or observe unethical or wrongful practices, malpractices, non-compliance of Company policies etc. No personnel have been denied access to the Audit Committee. The policy is available on the website of the Company at www.fulfordindia.com

PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Executive Director Ratio to median remuneration

Mr. K. G. Ananthakrishnan 131.66 Non-executive independent directors

Dr. Ajit Dangi 12.38

Dr. Venkat Sohoni 11.00

Mr. Homi Khusrokhan 11.56

* Commission for the financial year 2014-15 which forms part of remuneration will be paid in the financial year 2015-16

b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:

Name of the employee % increase in remuneration in the financial year as compared to previous period of 12 months

Mr. K. G. Ananthakrishnan 13.80

Dr. Ajit Dangi 41.94

Mr. Homi Khusrokhan* 108.64

Dr. Venkat Sohoni* 150.00

Mr. Giridhar Sanjeevi* 13.94

Mr. Sachin Gaikwad* 7.78

* Remuneration is annualized for the fifteen months period ended March 31, 2014 for comparison purpose

c. The percentage increase in the median remuneration of employees in the financial year: Median Annual Merit increase percentage effective 1st April, 2014 was 12.2% for all employees including KMP

d. The number of permanent employees on the rolls of Company: 321

e. The explanation on the relationship between average increase in remuneration and Company performance:

On an average all the employees of the Company received an annual increase of 12%. The individual increment varied from 0% to 16%.

f. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

Aggregate remuneration of key managerial personnel (KMP) in financial year 2014-15 (Rs Crore) 1.25

Revenue (Rs Crore) 231.29

Remuneration of KMPs (as % of revenue) 0.54

Profit before tax (PBT) (Rs. Crore) 4.79

Remuneration of KMP (as % of PBT) 26.11

g. variation in the market capitalization of the company, price earning ratio as at the closing date of the current financial year and previous financial year:

Particulars March 31,2015 March 31,2014 % Change

Market Capitalization (Rs Crore) 501.05 270.03 85.55%

Price earnings ratio 216.65 60.47 258.28%

h. percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the Company came out with the last public offer:

Particulars March 31,2015 October 2006 % Change (Open offer)

Market Price (BSE) 1284.75 575 123.43%

i. Average percentile increase made in the salaries of employees other than the managerial personnel in the financial year was 12% and the percentile increase in the managerial remuneration has been 12.87%. the increase in compensation has been made in line with the company's compensation philosophy, individual performance levels and contribution to the company's business objectives, and there has been no exception to Report.

j. comparison of each remuneration of the key managerial personnel against the performance of the company:

Mr. K. G. Mr. Giridhar Mr. Sachin Ananthakrishnan Sanjeevi Gaikwad

Remuneration in financial year 2014-15 (Rs. Crore) 0.65 0.41 0.19

Revenue (Rs. Crore) 231.29

Remuneration as % of revenue 0.28 0.18 0.08

Profit before tax (PBT) (Rs. Crore) 4.79

Remuneration as % of PBT 13.50 8.56 4.05

k. The key parameters for any variable component of remuneration availed by the directors:

The members have, at the AGM of the Company on August 7, 2014 approved payment commission to non-executive directors within the ceiling of 1% of the net profits of the Company as computed under the applicable provisions of the Act. The said commission is decided each year by the Board of directors and paid to the non-executive directors.

l. there are no employee's drawing remuneration in excess of the highest compensation paid to any managerial personnel.

m. Affirmation that the remuneration is as per the remuneration policy of the company:

The Company affirms that the remuneration is as per the remuneration policy of the group Company.

n. The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in Annexure 7 forming part of this Report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo:

1. conservation of energy

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

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

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

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

1. Electricity

(a) Purchased Not Applicable Units

Total Amount Rate/Unit

(b) Own Generation Not Applicable

(i) Through Diesel Generator Units

Units per ltr. of Diesel Oil Cost/Unit

(ii) Through Steam Turbine/generator Units

Units per ltr. of fuel oil/gas Cost/Unit

2. coal (specify quality and where used) Not Applicable

Quantity (Tonnes)

Total Cost Average Rate

3. Furnace oil Not Applicable

Quantity (K. Ltrs.)

Total Cost Average Rate/Litre

4. others/lnternal Generation Not Applicable

Quantity

Total Cost Rate/Unit

2. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

Research & Development (R&D):

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

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

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

(d) Expenditure on R&D:

(i) Capital - Nil

(ii) Recurring - Nil

(iii) Total - Nil

(iv) Total R&D expenditure as a percentage of total turnover - Nil Technology Absorption, Adaptation and innovation

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

The Company on continuous basis interacts with its Parent Company for gaining technical expertise for pharmaceutical formulations. 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. I n 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.

ACKNOWLEDGEMENT

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

For and on behalf of the Board of Directors

Ajit dangi Chairman DIN: 02270088

Mumbai, May 25, 2015


Mar 31, 2014

Dear Members,

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 January 1, 2012 to March 31, 2014 December 31, 2012 Rs. in Million Rs. 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 Rs. 2,822 million from Rs. 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 Rs. 69.5 million (2.47% of revenue) as against Rs. -55.4 million (-2.46% of revenue) in the previous year. The net profit after tax was Rs. 44.6 million (1.58% of revenue) as against Rs. -49.9 million (-2.21% of revenue) in the previous year.

LIQUIDITY

Your Company continues to be debt-free and maintain suffcient 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 Rs. 1,297 million as against Rs. 1,114 million in the previous year.

DIVIDEND

The Directors recommend a dividend of Rs. 2/- per equity share of Rs. 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 Rs. 7,800,000/-. The tax on dividend payout borne by the Company will be Rs. 1,325,610/-.

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

Mr. Giridhar Sanjeevi was appointed as an Alternate Director to Ms. Caroline Litchfeld with effect from August 2, 2013. He ceased to be the Alternate Director to Ms. Litchfeld with effect from January 30, 2014 upon resignation of Ms. Litchfeld 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 Litchfeld 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 suffcient 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 Certifcate 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 fled by 30.06.2013 and the same was fled by the Company on 28.06.2013. The due date for fling 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 certifcate 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 certifcate 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 fexibility 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 Rs. 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 Rs. 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 Rs. 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. Pathfnder 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, Rs. 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 Dangi

Mumbai, May 16, 2014 Chairman


Dec 31, 2012

The Directors hereby present the Sixty-Fifth Annual Report together with the Audited Accounts of the Company for the year ended December 31, 2012.

FINANCIAL RESULTS

January 1, 2012 to January 1, 2011 December 31, 2012 December 31, 2011 Rs. in Millions Rs. in Millions

Turnover (Net) 2150.23 2142.03

(Loss)/Profit before tax (72.49) 27.01

Less: Tax (Credit)/Expense (Current Tax, Deferred Tax & Fringe Benefit Tax) (22.57) 9.62

Add: Tax adjustment for previous years - 0.99

(Loss)/Profit after tax (49.92) 18.38

Balance in Profit and Loss Account 386.13 385.45

Amount available for appropriation 336.21 403.83

Out of which the following sums have been appropriated:

Proposed Dividend 3.90 13.65

Corporate Tax on Dividend 0.63 2.21

General Reserve - 1.84

Balance carried to Balance Sheet 331.68 386.13

DIVIDEND

The Directors recommend a Dividend of Rs. 1/- per equity share of Rs. 10/- each for the year ended December 31, 2012 even in the absence of profits for the year from and out of amount available for appropriation both as an investor friendly measure and to reflect a measure of confidence in future. If the proposed dividend is approved by the Members at the Annual General Meeting, the total dividend payout will be Rs. 3,900,000/-. The tax on dividend payout borne by the Company will be Rs. 632,678/-.

DIRECTORS

Pursuant to Article 110 of the Articles of Association of the Company, the Directors - Mr. K.G. Ananthakrishnan, Dr. V.S. Sohoni, Mr. M.K. Sharma, Dr. Ajit Dangi, Mr. Homi Khusrokhan, Ms. Hwee Ping Chua, Mr. Christopher McNamara and Mr. Kevin Ali retire and being eligible, offer themselveg for re-appointment at the ensuing Annual General Meeting of the Company. A brief resume of the Directors proposed to be re-appointed forms part of the Notice of the Annual General Meeting.

FIXED DEPOSITS

Your Company has not accepted any deposits during the year under review. Also, there are no fixed deposits outstanding as on December 31, 2012.

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 year ended December 31, 2012. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, 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 at the end of the financial year 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 limits specified under Section 224(1 B) of the Companies Act, 1956. The Board recommends their re-appointment.

COST AUDIT

The Directors have, subject to the approval of the Central Government, appointed M/s. S.S. Mani & Co. as Cost Auditors to conduct the Cost Audit for the year ended December 31, 2013.

The Cost Audit Report of the Company for the year 2011 was due to be filed by January 31, 2013 and the same was filed by the Company on December 26, 2012. The due date for filing the Cost Audit Report of the Company for the year 2012 is June 30, 2013.

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.

INCREASE IN SHAREHOLDING BY THE PROMOTER

During the year 2012, the promoter of the Company, Dashtag, U.K. along with Merck & Co. Inc., had in pursuance of the relevant provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, made a Voluntary Open Offer for acquiring up to 821,913 equity shares (representing 21.07% of the equity share capital) from the existing shareholders at a price of Rs. 1000/- per equity share. Dashtag, U.K. acquired 820,150 shares constituting 21.03% of the post-open offer capital of the Company. Current holding of Dashtag, U.K. is 2,923,237 equity shares constituting 74.95% of the paid-up share capital of the Company. Out of the total shares acquired by Dashtag, U.K., 809,717 shares are lying in ''LIIPL Fulford India Open Offer Escrow Demat Account'' and are in the process of being transferred to Dashtag, U.K.

SUBSIDIARY COMPANY

Pursuant to Section 212 of the Companies Act, 1956, the Annual Accounts for the year ended December 31, 2012 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:

Merck for Mothers is a 10-year, US$ 500 million (Rs. 27,500 million) initiative to address maternal mortality from complications experienced during pregnancy and childbirth. Working closely with Governments, international organizations, health experts, and those on the front lines, our goal is to help women across the world be well. The focus areas will be to enhance access, establish quality accreditation mechanisms to link private providers with Government reimbursement schemes and innovative technologies to connect remote geographical areas with mainstream healthcare facilities.

Join My Village® is an innovative click-to-commit social change initiative that gives individuals the power to unlock charitable donations from companies like General Mills and MSD in India to women and girls in India, through CARE. Every "Like" on the Join My Village® Facebook page will trigger a US$ 1 (Rs. 55) donation from General Mills and The Merck Company Foundation to CARE''s programs in India. In India, the funds generated by this program will help build on current successful CARE India programs by enhancing CARE bridge programs that promote learning at Government-run Kasturba Gandhi Balika Vidhyalaya (KGBV) boarding schools. Additionally, donations will help to provide training, education and support for maternal and infant health to pregnant women in Uttar Pradesh and to expand CARE''s accelerated learning school program, Udaan, which has operated in Uttar Pradesh for 11 years, to Haryana.

Support My School campaign is a corporate responsibility initiative by MSD, Coca-Cola, NDTV, UN-HABITAT, Charities Aid Foundation (CAF) India and Sulabh International to reach over 50,000 students in more than 100 rural and semi-urban schools across India to provide ''Water, Sanitation and Hygiene'' (WASH) education. The initiative was launched in September, 2011 in Bhopal in the presence of school children, local non-governmental organizations and representatives from the partners. As part of this initiative, MSD will fund the revitalization of eight schools in Bhopal, paving the way for the holistic improvement of hygiene conditions in rural and semi-urban schools across Madhya Pradesh.

Safe water network: During March, 2012, MSD and safe water network announced the launch of a three- year, US$ 1.5 million (Rs. 82.5 million) partnership to increase access to safe water and reduce the impact of water-borne disease among impoverished communities in Andhra Pradesh, India. Safe water network is a not-for-profit organization committed to developing locally owned and operated water-purification systems that achieve lasting health impact. This initiative addresses a critical need in India where an estimated 70-80% of the total burden of disease is related to water contamination and poor sanitation, and where more than 120,000 children under the age of five die each year from rotavirus diarrhea alone.

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 Dangi

Mumbai, February 25, 2013 Chairman


Dec 31, 2009

The Directors hereby present the Sixty-Second Annual Report together with the audited accounts of the Company for the year ended December 31, 2009.

FINANCIAL RESULTS

January 1, 2009 to January 1, 2008 to December 31, 2009 December 31, 2008 Rupees Rupees

Turnover (Net) 1,947,003,231 1,867,443,266

Profit before tax for the period amounted to 223,183,676 315,899,813

Profit after tax for the period amounted to 136,974,771 197,271,326

Tax Adjustments for prior years -

Balance in Profit and Loss Account 196,810,526 23,474,810

Amount available for appropriation 331,447,730 220,746,136

Out of which the following sums have been appropriated:

Proposed Dividend 17,550,000 7,800,000

Corporate Tax on Dividend 2,982,623 1,325,610

General Reserve 13,500,000 14,810,000

Balance carried to Balance Sheet 297,415,107 196,810,526

DIVIDEND

The Directors recommend a Dividend of Rs. 4.50/- per equity share of Rs. 10 each for the year ended December 31, 2009. If the proposed dividend is approved by the shareholders at the Annual General Meeting, the total dividend payout will be Rs. 17,550,000/-. The tax on dividend payout borne by the Company will be Rs. 2,982,623/-.



MANAGEMENT DISCUSSION AND ANALYSIS

Industry Structure and Developments

India Health Care Environment: Structure and Recent Developments

The Governments Healthcare policy continues to focus on broadening basic healthcare access and improving quality of public healthcare delivery system. Public healthcare spending is estimated to increase and move to 2% of GDP in the medium term.

The Governments commitment to raise the Healthcare spending is well reflected through the effective roll- out of flagship program of National Rural Health Mission (NRHM), which aims at providing valuable healthcare services to rural households all over the country focusing on 18 states. NRHM was launched by Government in 2005 with the aim to improve the availability of and access to quality health care by people, especially for those residing in rural areas, the poor, women and children. Since then several encouraging architectural changes have been witnessed in the healthcare delivery system in rural areas.

The Government has also increased the outlay towards healthcare expenditure in the Union Budget 2010, which is yet another step for improving health status of the populace at large.

Indian Pharmaceutical Market: Kev Trends

The Indian Pharmaceutical Market witnessed a turnover of INR 400 Billion MAT December 2009 and grew by 17% over MAT December 2008. New introductions were in Antibiotics, Cardiovascular and Diabetes therapeutic areas. Chronic disease areas like Cardiovascular, Diabetes, Central Nervous System and Cancer continue to supersede the growth rates of acute segments and the overall market. During the year 2009 growth from new introductions was 7.7% with a volume growth of 8.6% and price growth of 0.7% (Source: IMS SSA December 2009).

According to McKinsey estimates, the Indian Pharmaceutical Market is expected to touch USD 20 billion with a Compounded Annual Growth Rate (CAGR) of 12.3% by 2015. The key drivers to this are growth in income, rising prevalence of chronic diseases, growth in medical infrastructure, increase in health insurance coverage, aggressive market creation by players leveraging treatment discontinuities and increased government focus.

During 2009, National Pharmaceutical Pricing Authority mandated downward price revisions of several medicines such as antibiotic tablets, multi-vitamin formulations, eye-drops, insulin and painkillers which impacted the growth of the industry.

The Government is expected to take a decision on the National Pharmaceutical Policy which has been pending since 2002. As a measure to expedite the whole process, the Central Government has formed a new Group of Ministers to decide the National Pharmaceutical Policy.

Global Pharmaceutical Market Overview & Kev Trends

The Global Pharmaceutical Market witnessed a slowdown in the growth rate from 7.2%-4.8% during 2005- 2008. Year 2009 witnessed a marginal improvement with year-on-year growth touching 5% (IMS MIDAS December 2009).

IMS forecasts Global Pharmaceutical Market growth of 4-6% in 2010 and predicts 4-7% growth through 2013. Most of this growth would be fuelled by emerging markets like Asia, Commonwealth of Independent States and Latin America. Developed markets like the US, EU and Japan are expected to witness subdued growth.

Opportunities, Threats, Risks and Concerns

The Pharmaceutical Industry in India is estimated to grow at around an average of 12-14% over the next 5 years. The key drivers are increased healthcare awareness, improved per capita income, increased incidence of both acute and chronic diseases, emergence of insurance, growth in rural areas and emergence of corporate hospitals which offer opportunity to bring valuable treatment options to the patients. Price controls, increasing costs and exchange rate fluctuations could impact the performance of the industry at large.

India as a part of its TRIPS obligations adopted Product Patent Regime in 2005. However, there are some areas of concern to the innovative Pharmaceutical Industry such as patents for incremental innovations, pre and post grant opposition mechanism, regulation on data protection, etc.

Counterfeiting poses a major problem for the Industry. In order to combat counterfeit a multi-pronged strategy has to be adopted with a sustained and concentrated action backed jointly by the Government, the Pharmaceutical Industry and Consumer Action Groups.

The Pharmaceutical companies are adopting various measures such as training its consumers, drug procurement agencies and use of anti-counterfeit measures like holographic products in a variety of forms such as full coverage labels, holographic foils on blisters, in-shrink sleeves and on primary cartons and also usage of innovative packaging with attractive and unique color combinations and scrambled images printing as a means to combat counterfeiting.

Segment-wise performance

The Company has recorded moderate growth rate vis-a-vis industry. All core brands outpaced respective therapeutic category growth rate and gained market share except dermatology portfolio which underperformed. The Companys product portfolio is balanced and provides therapies for both acute and chronic health conditions. The Company continues to maintain leadership position in key market segments. New products introduced in the last few years have performed well. The variations in Foreign Exchange rates and competition from generics have affected the performance of the Company for the year 2009.

Internal control system and its adequacy

The Company has a comprehensive internal control system that includes well-defined policies and appropriate monitoring procedures. Compliance, with integrity, is a core value of the Company. The Companys funds/ monies are effectively regulated by Approval Authorisation policy. The Internal Audit Program conducted by an external agency covers all key areas on periodic basis to assess and ensure conformity to Applicable Laws, Accounting Standards, Company Policies and protection of the Companys assets and interests. The

Audit Committee appointed by the Board reviews the findings and recommendations of internal auditors as well as auditors appointed by Members and also reviews the action plan to address the areas of improvement and thereby strengthen the system continuously. The Global Internal Audit team conducted Financial and Business Integrity and Assurance audit of the Company during the year. The processes are in place to comply with the recommendation of the Global Internal Audit team.

Material development in Human Resources/ Industrial Relations

Our people are the driving force for developing and implementing Company strategy. The Companys Human Resources (HR) strategy is based on the firm foundation of the following principles or people management practices including: attracting talent, developing employees, managing ongoing performance and rewarding performance. The HR agenda includes having the right people at the right place and maintaining a focus on critical talent at all levels. The web enabled Performance Management Program (myPMP) ensures that we follow a globally consistent process for recognizing and rewarding performance. The Company has a strategic commitment to develop talent and executes multiple learning and development related initiatives. These initiatives include a structured induction program for all new joinees based on the Global Curriculum, Management Development Programs, Situational Coaching Programs and Selling Skills Programs. There is a state of the art e-leaming platform which covers a wide area of topics and ensures continued education and inputs to our colleagues. In addition to this, there were several Change Management related programs which were launched in 2009 to ensure enhanced change readiness of employees at all levels.

Keeping in mind the organizational goals, the compensation and benefits too have been made market competitive to attract and retain talent. Also, aligned with Company strategy of business growth and market competitiveness, several assessment & development centres were conducted for field colleagues in 2009, which enabled skill development and offered career progression.

The Company had open communication meetings at regular intervals to keep all colleagues informed about key developments and to enhance their participation in decision making and effective implementation.

The total number of employees as on December 31, 2009 was 445.

Operational Performance

The Company recorded sales of INR 1948 millions in the year 2009, and grew by 4.34% over 2008.

Continuing with success of new launches like AZUMA (Azithromycin) and SICASTAT (Feracrylum); high- science activities conducted for Virology, Hepatitis, Cancer is pivotal focus for the Company. AZUMA and SICASTAT continue to gain market share and rank over 2008, ALASPAN (Loratadine) demonstrated a continued good performance and improved by the rank from 15th to 7th position.

The Company engaged Key Opinion Leaders and global experts for key therapeutic areas like Ovarian Cancer, Brain Tumor, and Hepatitis-C; to facilitate scientific meetings and symposiums. With these initiatives the Company continues to fortify its commitment for high-science and knowledge dissemination activities, and collaborate with clinicians to appreciate and adopt best clinical practices.

Response to HEPBEAT (Disease Management program for Hepatitis C/B) has been successful and encouraging, as it saw a manifold increase in patients getting registered to this program. World Hepatitis Day (May 19th) is another milestone where the company reinforced its "patient centric" policy with added emphasis on early diagnosis to combat hepatitis.

A dedicated team, the Institutions Business Team was launched in Quarter 1 of 2009 to focus on major institutions. The Institution Business Team thrives to maximize access of quality and innovative medicines to patients in key hospitals across India. The team launch adds a new realm to our business.

The Company rolled out high quality training programs across field force to fortify science and business acumen. Sales Force Automation system was improved and new processes were implemented. Full migration to SAP system was ensured and the process was rolled out and adopted Company-wide.

The Company continues to focus on conducting business with the highest standards of business ethics and integrity. All employees are provided extensive compliance training during induction program.

Outlook

The year 2010 holds a new promise as the Company plans to strengthen its efforts to launch new global and local products and provide high quality scientific support - all these with a core focus on "patient comes first" approach. Key economic indicators, overall confidence in economy and increase in government expenditure on health are expected to have positive impact on healthcare industry.



DIRECTORS

Dr. S.H. Advani resigned from the Board of the Company w.e.f. July 28, 2009.

Mr. Rodney Unsworth, Mr. Rohan Abayasekara and Mr. Ashley Morris resigned from the Board of the Company w.e.f. February 5, 2010.

The Board places on record its sincere appreciation and gratitude for the valuable contribution made by Dr. S.H. Advani, Mr. Rodney Unsworth, Mr. Rohan Abayasekara and Mr. Ashley Morris during their respective tenure as Directors.

Pursuant to Article 110 of the Articles of Association of the Company, Mr. K.G. Ananthakrishnan, Dr. V.S. Sohoni, Mr. M.K. Sharma and Dr. Ajit Dangi retire and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting of the Company.

Mr. Homi Khusrokhan was appointed as a Non-Executive Independent Director on the Board of your Company with effect from July 27, 2009 to fill in the casual vacancy caused by the cessation of Dr. S.H. Advani. As per Section 262 of the Companies Act, 1956, Mr. Homi Khusrokhan holds office as a Director only till the date of the ensuing Annual General Meeting.

Mr. Ramesh Subrahmanian, Mr. Christopher McNamara and Ms. Hwee Ping Chua were appointed as Additional Directors with effect from February 2, 2010. As per provisions of Section 260 of the Act, they will hold office upto the date of ensuing Annual General Meeting of the Company.

The Company has received notices under Section 257 of the Act together with the requisite deposit, in respect of the above persons proposing their appointment as Directors of the Company. Resolution(s) seeking approval of the members for the appointment of Mr. Homi Khusrokhan, Mr. Ramesh Subrahmanian, Mr. Christopher McNamara and Ms. Hwee Ping Chua as Directors of the Company have been incorporated in the Notice of the ensuing Annual General Meeting together with their brief resume(s).

Mr. Sanjiv Navangul, Mr. Rajesh Marwaha and Dr. Naveen Rao were appointed as Alternate Directors to Mr. Ramesh Subrahmanian, Mr. Christopher McNamara and Ms. Hwee Ping Chua respectively with effect from February 16, 2010.

The Board welcomes Mr. Homi Khusrokhan, Mr. Ramesh Subrahmanian, Mr. Christopher McNamara, Ms. Hwee Ping Chua, Mr. Sanjiv Navangul, Mr. Rajesh Marwaha and Dr. Naveen Rao and is confident that they will provide valuable guidance to steer the Companys operations to greater heights.

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.

FIXED DEPOSITS

The Company has not accepted any deposits during the year under review. Also, there are no fixed deposits outstanding as on December 31, 2009.

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 a part of the Directors Report for the year ended December 31, 2009. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Directors Report and Accounts are being sent to all shareholders of the Company, excluding the statement of particulars of employees under Section 217 (2A) of the Act. Any shareholder 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 at the end of the financial year 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. Deloitte Haskins & Sells, Chartered Accountants, retiring Auditors of the Company, have informed the Company that they do not wish to seek re-appointment at the ensuing Annual General Meeting. The Company has thereafter received a Notice from a Member proposing the appointment of M/s. Price Waterhouse, Chartered Accountants (PW) in place of the retiring Auditors. The Company has received a Certificate from PW to the effect that their appointment, if made, would be in accordance with the limits specified under Section 224(1 B) of the Companies Act, 1956. The Board recommends the appointment of PW as the Statutory Auditors of the Company for the financial year 2010 and to hold office until the conclusion of the Annual General Meeting of the Company for the financial year ended December 31, 2010.

COST AUDIT

The Directors have, subject to the approval of the Central Government, appointed M/s. S.S. Mani & Co. as Cost Auditors to conduct the Cost Audit for the financial year ended December 31, 2010.

CORPORATE GOVERNANCE

A report on the Corporate Governance Code along with a certificate from the auditors of the Company 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.

PARENT COMPANY

Schering-Plough Corporation ("Schering-Plough") and Merck & Co., Inc., entered into an Agreement and Plan of Merger ("Merger Agreement") on March 8, 2009. On November 3, 2009, Merck & Co., Inc. ("Old Merck") and Schering-Plough completed their previously-announced merger (the "Merger") pursuant to and as per the prevailing laws of United States of America. In the process of Merger, Schering-Plough acquired all of the shares of Old Merck, which became a wholly-owned subsidiary of Schering-Plough. Schering-Plough continued as the surviving public company and as on the effective date of merger was renamed as Merck & Co., Inc. ("New Merck"). Schering-Plough Corporation, the ultimate parent company of Fulford (India) Limited, prior to the Merger, continues to be the ultimate parent company of Fulford (India) Limited, after the Merger with a new name. New Merck is known as Merck Sharp & Dohme (MSD) in all parts of the world except the United States of America and Canada.

SUBSIDIARY COMPANY

Pursuant to Section 212 of the Companies Act, 1956, the annual accounts for the year ended December 31, 2009 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 with the Bombay Stock Exchange Limited, the consolidated financial statements of the Company with its subsidiary are also enclosed.

CORPORATE SOCIAL RESPONSIBILITY

While we continuously work on bringing improved medicines for patients to enhance quality of their health and lives, we also participate in overall community support and development.

We support and care for our society through various initiatives. Not only as an organization, but our colleagues also work at individual levels for the community where we live and work.

In India, one of the key Company initiatives is our patient assistance programs in serious life disabling diseases like Hepatitis C & B, Rheumatoid Arthritis and Brain Tumor. Your Company also provides lifesaving and other drugs through its compassionate program to under privileged patients.

We share the miseries and the pain of millions of people who get impacted by several natural or man made calamities in our country every year in some form or the other. We are committed to hold up the interest of our fellow citizens and society.

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 Schering-Plough Corporation, Merck & Co., Inc., the Companys 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 Dangi

Mumbai, February 23, 2010 Chairman



 
Subscribe now to get personal finance updates in your inbox!