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Notes to Accounts of Zydus Wellness Ltd.

Mar 31, 2016

Note : 1 - Long Term Provisions:

Disclosure pursuant to Accounting Standard - 15 [Revised] "Employee Benefits":

Defined benefit plan and long term employment benefit

A General description:

Leave wages [Long term employment benefit]:

The Leave encashment scheme is administered through Life Insurance Corporation of India''s "Employees'' Group Leave Encashment-cum-Life Assurance [Cash Accumulation] Scheme". The employees of the Company are entitled to leave as per the leave policy of the Company. The liability on account of the accumulated leave as on last day of the accounting year is recognised [net of the fair value of plan assets as at the balance sheet date] at the present value of the defined obligation at the balance sheet date based on the actuarial valuation carried out by an independent actuary using projected unit credit method.

Gratuity [Defined benefit plan]:

The Company has a defined benefit gratuity plan. Every employee who has completed continuous services of five years or more, gets a gratuity on death or resignation or retirement at 15 days salary [last drawn salary] for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

Note : 2

a Effective from April 1, 2014, the Company had started providing depreciation on tangible assets on "straight line method" over the revised remaining useful lives of the tangible assets in alignment with useful lives prescribed in Schedule II to the Companies Act, 2013. Consequently, the depreciation charge for the year ended March 31, 2015 was higher by Rs. 196 Lacs. Further, an amount of Rs. 19 Lacs had been recognised in the opening balance of retained earnings which relate to the carrying amount of tangible assets whose revised remaining useful life was Nil as at April 1, 2014.

b Additionally, an amount of Rs. 7 Lacs had been recognised in the opening balance of retained earnings, which relate to the carrying amount of tangible assets of Zydus Wellness-Sikkim (the firm), whose revised remaining useful life was Nil as on April 1, 2014 and which had been adjusted against the current capital of the Company in the firm.

Note : 3

Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classifications/disclosure.


Mar 31, 2015

I. Company overview:

Zydus Wellness Limited ["the Company"] was incorporated on November 1,1994 and operates as an integrated consumer company with business encompassing the entire value chain in the development, production, marketing and distribution of health and wellness products. The product portfolio of the Company includes brands like Sugar free, Everyuth and Nutralite. The Company''s shares are listed on the National Stock Exchange of India Limited [NSE] and Bombay Stock Exchange Limited [BSE].

INR - Lacs As at March 31 2015 2014

Note : 2 - Contingent Liabilities and Commitment [to the extent not provided for]:

A Contingent Liabilities:

a Claims against the Company not acknowledged as debts 20 20

b In respect of guarantees given by Banks and/ or counter guarantees given by the Company 3 2

c Other money for which the Company is contingently liable:

i In respect of Sales Tax matters pending before appellate authorities 77 88

ii In respect of Income Tax matters pending before appellate authorities 194 193

B Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for [Net of Advances] 28 23

Note : 3 - Segment Information:

The Company operates in one segment only, namely "Consumer Products." The Company also exports its products to other countries. However the value being below threshold limit prescribed under Accounting Standard [AS] 17-"Segment Reporting", the reporting is not required.

Note : 4

a Effective from April 1, 2014, the Company has started providing depreciation on tangible assets on "straight line method" over the revised remaining useful lives of the tangible assets in alignment with useful lives prescribed in Schedule II to the Companies Act, 2013.

Consequently, the depreciation charge for the year ended March 31, 2015 is higher by Rs. 196 Lacs. Further, an amount of Rs. 19 Lacs has been recognised in the opening balance of retained earnings which relate to the carrying amount of tangible assets whose revised remaining useful life was Nil as at April 1, 2014.

b Additionally, an amount of Rs. 7 Lacs has been recognised in the opening balance of retained earnings, which relate to the carrying amount of tangible assets of Zydus Wellness-Sikkim (the firm), whose revised remaining useful life was Nil as on April 1, 2014 and which has been adjusted against the current capital of the Company in the firm.

Note : 5

Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classifications/ disclosure.


Mar 31, 2013

1. Company Overview:

Zydus Wellness Limited ["the Company"] was incorporated on November 1, 1994 and operates as an integrated consumer company with business encompassing the entire value chain in the development, production, marketing and distribution of health and wellness products. The product portfolio of the Company includes brands like Sugar free, Everyuth, Nutralite and Actilife. The Company''s shares are listed on the National Stock Exchange of India Limited [NSE] and Bombay Stock Exchange Limited [BSE]. The Registered Office of the company is situated at Zydus Tower, Satellite Cross Roads, Sarkhej-Gandhinagar Highway, Ahmedabad-380015.

Note : 2 - Interim Dividend:

The Board of Directors, at its meeting held on May 13, 2013, declared an interim dividend of Rs.6/- per equity share of Rs. 10/- each.

Note : 3 - Segment Information:

The company operates in one segment only, namely "Consumer Products." During the year, the Company has started exporting its products to other countries. However the value being below threshold limit prescribed under Accounting Standard (AS)-17- "Segment Reporting", the reporting is not required.

Note : 4 - Related Party Transactions:

A Name of the Related Parties and Nature of the Related Party Relationship: a Holding Company: Cadila Healthcare Limited b Partnership Firm: M/s. Zydus Wellness - Sikkim c Fellow Subsidiaries/Concerns:

Dialforhealth India Limited Zydus Pharmaceuticals (USA) Inc. [USA]

Dialforhealth Unity Limited Nesher Pharmaceuticals (USA) LLC [USA]

Dialforhealth Greencross Limited Zydus Healthcare (USA) LLC [USA]

German Remedies Limited Zydus Noveltech Inc. [USA]

Zydus Pharmaceuticals Limited Hercon Pharmaceuticals LLC [USA]

Zydus Animal Health Limited Zydus Healthcare S.A. (Pty) Ltd [South Africa]

Liva Healthcare Limited Simayla Pharmaceuticals (Pty) Ltd

[South Africa]

Zydus Technologies Limited Script Management Services (Pty) Ltd

[South Africa]

Biochem Pharmaceutical Industries Limited Zydus Nikkho Farmaceutica Ltda. [Brazil]

M/s. Zydus Healthcare, a Partnership Firm Zydus Pharma Japan Co. Ltd. [Japan]

Zydus Lanka (Private) Limited [Sri Lanka] Laboratorios Combix S.L. [Spain]

c Fellow Subsidiaries/Concerns:

Zydus International Private Limited [Ireland] Zydus Pharmaceuticals Mexico SA De CV

[Mexico]

Zydus Netherlands B.V. [the Netherlands] Zydus Pharmaceuticals Mexico Services

Company SA De C.V.[Mexico]

Zydus France, SAS [France] ZAHL B.V. [the Netherlands]

Etna Biotech S.R.L. [Italy] Bremer Pharma GmbH [Germany]

ZAHL Europe B.V. [the Netherlands] d Key Management Personnel:

Mr. Elkana Ezekiel - Managing Director

Note : 5

Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classifications/ disclosure.


Mar 31, 2012

Defined benefit plan and long term employment benefit A General description:

Leave wages [Long term employment benefit]:

The Leave encashment scheme is administered through Life Insurance Corporation of India's "Employees' Group Leave Encashment-cum-Life Assurance [Cash Accumulation] Scheme". The employees of the Company are entitled to leave as per the leave policy of the Company. The liability on account of the accumulated leave as on last day of the accounting year is recognised [net of the fair value of plan assets as at the balance sheet date] at the present value of the defined obligation at the balance sheet date based on the actuarial valuation carried out by an independent actuary using projected unit credit method.

Gratuity [Defined benefit plan]:

The Company has a defined benefit gratuity plan. Every employee who has completed continuous services of five years or more, gets a gratuity on death or resignation or retirement at 15 days salary [last drawn salary] for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

Note : 18 - Contingent Liabilities and commitment [to the extent not provided for]:

A Contingent Liabilities:

a Claims against the Company not acknowledged as debts. 20 20

b Other money for which the company is contingently liable:

i In respect of Sales Tax matters pending before appellate authorities. 55 61

ii In respect of Income Tax matters pending before appellate authorities. 165 119

c In respect of guarantees given by Banks and/or counter guarantees given by the Company. 2 2

d The company has imported certain capital equipment at concessional rate of custom duty under "Export Promotion Capital Goods Scheme" of the Central Government. The Company has undertaken an export obligation to the extent of US $ 30.29 Lacs [equivalent to Rs. 1540 Lacs approx. {Previous Reporting Period US $ 30.29 Lacs (Equivalent to Rs. 1350 Lacs)}] to be fulfilled during a specified period as applicable from the date of imports. 155 155

B Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for [Net of Advances]. 31 83

Note : 1 - Segment Information:

The company operates in one segment only, namely "Consumer Products." The Company has only one plant located in Gujarat and the company sells its products in India. Hence, there is no geographical segment also. Therefore, the segment reporting is not applicable.

Note : 2

The Revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous reporting period's figures have been regrouped/reclassified wherever necessary to correspond with the current reporting period's classifications/disclosure.


Mar 31, 2011

1 Previous year’s figures have been regrouped and rearranged wherever necessary to make it comparable with the current year’s figures.

2 The company has taken various office premises / godowns under operating lease or leave and license agreement. The lease terms in respect of such premises are on the basis of individual agreements entered into with the respective landlords. The company has given refundable interest free security deposits in accordance with the agreed terms. The lease payments are recognised in the Profit & Loss Account under “ Rent “ in Schedule -14.

3 The company has imported certain capital equipments at concessional rate of custom duty under “Export Promotion Capital Goods scheme” of the Central Government .The Company has undertaken an export obligation to the extent of US $ 30.29 Lacs [ equivalent to Rs. 1350 Lacs approx. { Previous Year US $ 30.29 Lacs ( Equivalent to Rs.1360 Lacs ) } ] to be fulfilled during a specified period as applicable from the date of imports. The liability towards customs duty payable thereon in respect of unfulfilled export obligation as on March 31, 2011 of Rs. 155 Lacs [ as at 31-03-10 : Rs.155 Lacs ] is not provided for.

4 Contingent Liabilities not provided for in respect of :

INR - Lacs Year ended March 31, 2011 2010

A Claims against the Company not acknowledged as debts 20 22

B Sales Tax matters pending in appeals 61 6 C Income Tax matters pending in appeals 119 0 D Guarantees given by a bank and counter guarantees given by the company 2 0

5 During the Year, the Company has paid to Bharatiya Janta Party, Contribution of Rs. 100 lacs, pursuan to provision of Section 293A of the Companies Act, 1956.

6 Segment Information :

The company operates in one segment only, namely “Consumer Products.” The Company has only on plant located in Gujarat and the company sells its products in India. Hence, there is no geographica segment also. Therefore, the segment reporting is not applicable.

7 Micro, Small and Medium Enterprises : A Under the Micro, Small and Medium Enterprises Development Act, 2006, [ MSMED ] which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises.

INR - Lacs Year ended March 31, 2011 2010

- Principal amount remaining unpaid to any supplier as at the year end 0 0

- Interest due thereon 0 0

- Amount of interest paid by the Company in terms of section 16 of the MSMED, along with the amount of the payment made to the supplier beyond the appointed day during the accounting year 0 0

- Amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED 0 0

- Amount of interest accrued and remaining unpaid at the end of the accounting year 0 0

B The above information has been compiled in respect of parties which could be identified as Micro, Small and Medium Enterprises on the basis of information available with the Company.

8 Related Party Transactions : A Name of the Related Party and Nature of the Related Party Relationship :

a Holding Company : Cadila Healthcare Limited [ CHL ]

b Partnership Firm : M/s. Zydus Wellness - Sikkim - a Partnership Firm [ ZWS ]

c Fellow Subsidiaries :

Liva Healthcare Limited [ LHL ]

German Remedies Limited

Zydus Technologies Limited

Dialforhealth India Limited [ DHL ]

Dialforhealth Unity Limited

Dialforhealth Greencross Limited

Zydus Pharmaceuticals Limited

Zydus Animal Health Limited [ ZAHL ]

M/s. Zydus Healthcare, Sikkim, a Partnership Firm

Zydus Healthcare Brasil Ltda [ Brazil ]

Zydus Pharmaceuticals (USA) Inc. [ USA ]

Simayla Pharmaceuticals (Pty) Ltd, [ South Africa ]

Zydus Pharmaceuticals Mexico S.A. de C.V. [ Mexico ]

Zydus Healthcare S. A. [Pty] Ltd. [ South Africa ]

Zydus International Private Limited [ Ireland ]

Zydus Pharma Japan Co. Ltd [ Japan ]

Zydus Healthcare (USA) LLC [ USA ]

Zydus France, SAS [ France ]

Zydus Noveltech Inc. [ USA ]

Zydus IntRus Limited [ Russia ]

Quimica E Farmaceutica Nikkho Do, Brasil Ltda. [Brazil]

Zydus Netherlands B.V. [ The Netherlands ]

Laboratorios Combix S.L. [ Spain ]

Etna Biotech S.R.L., [ Italy ]

Script Management Services [ Pty ] Ltd., [ South Africa ]

Zydus Pharmaceuticals Mexico Service Company S.A. de C.V. [ Mexico ]

d Key Management Personnel :

Mr. Anand Deo - Managing Director

9 A Provision for product expiry claims in respect of products sold during the year is made based on the management’s estimates considering the estimated stock lying with retailers. The company does not expect any reimbursement of such claim in future. As the provision made in previous year is considered adequate, no further provision has been made in current year.

10 Deferred Tax :

A The Net Deferred tax Liability of Rs. 113 [ Previous Year : Rs. ( 76 ) ] lacs for the year has been provided in the Profit and Loss Account.

16 Disclosure pursuant to Accounting Standard - 15 [ Revised ] ‘Employee Benefits’ :

A Defined benefit plan and long term employment benefit :

a General description :

Gratuity [ Defined benefit plan ] :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary [ last drawn salary ] for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

Privilege Leave [ Long term employment benefit ] :

The Leave encashment scheme is administered through Life Insurance Corporation of India’s “Employees’ Group Leave Encashment-cum-Life Assurance [ Cash Accumulation ] Scheme”. The employees of the Company are entitled to leave as per the leave policy of the Company. The liability on account of the accumulated leave as on last day of the accounting year is recognised [ net of the fair value of plan assets as at the balance sheet date ] at the present value of the defined obligation at the balance sheet date based on the actuarial valuation carried out by an independent actuary using projected unit credit method.


Mar 31, 2010

1 Previous years figures have been regrouped and rearranged wherever necessary.

2 During February, 2010, a fire broke out at one of the warehouse of the company. The company is in the process of lodging a claim with the Insurance company, amounting to Rs. 46.42 lacs as estimated by the company. Pending the final settlement, this has been shown as an "Insurance Claim Receivable" under "Loans & Advances. The difference, if any, on settlement of claim will be effected in Profit and Loss account.

3 Contingent Liabilities not provided for:

INR- Lacs Year ended March 31, 2010 2009 A Claim against the Company not acknowledged as debts 28 0

B The company has imported certain capital equipments at concessional rate of custom duty under "Export Promotion Capital Goods scheme" of the Central Government. The Company has undertaken an incremental export obligation to the extent of US$24.33 Lacs { equivalent to Rs. 992.64 Lacs approx.} [Previous Year US $ 24.33 Lacs { Equivalent to Rs.992.64 Lacs ] to be fulfilled during a specified period as applicable from the date of imports. The liability towards custom duty payable thereon in respect of unfulfilled export obligation as on 31st March,2010 of Rs.124.08 Lacs [as at 31-03-09-Rs.124.08 Lacs] is not provided for as the time has yet to expire for fulfilling such export obligation. 124 124

152 124

4 Segment Information :

The company operates in one segment only, namely "Consumer Products." The Company has only one plant located in Gujarat and the company sells its products in India. Hence, there is no geographical segment also. Therefore, the segment reporting is not applicable.

5 Related Party Transactions :

A Name of the Related Party and Nature of the Related Party Relationship : a Holding Company : Cadila Healthcare Limited b Fellow Subsidiaries:

Liva Healthcare Limited Zydus Healthcare S. A. [Pty] Limited. [South Africa]

German Remedies Limited Zydus International Pvt. Limited. [Ireland]

Zydus Technologies Limited Nippon Universal Pharmaceutical Company Limited [Japan]

Dialforhealth India Limited Zydus Healthcare (USA) LLC [USA]

Dialforhealth Unity Limited Zydus France SAS [France]

Dialforhealth Greencross Limited Zydus Noveltech Inc. [USA]

Zydus Pharmaceuticals Limited Zydus IntRus Limited, [ Russia ]

Zydus Animal Health Limited Quimica E Pharmaceutica Nikkho Do, Brasil Ltda.

[Brazil]

M/s Zydus Healthcare, Sikkim Zydus Netherlands B. V. [The Netherlands]

- a Partnership Firm

Zydus Healthcare Brasil Ltda [Brazil] Laboratories Combix S.L. [Spain]

Zydus Pharmaceuticals USA Inc. [USA] Etna Biotech S.R.L., [Italy]

Simayla Pharmaceuticals (Pty.) Limited, ZC Pharma Services Pty. Ltd. South Africa [South Africa ]

6 A Provision for product warranty claims in respect, of products sold during the year is made on the basis of managements estimations of probable claims of customers in respect thereof considering the estimated stock lying with retailers. The company does not expect any reimbursement of such claim in future.

7 Deferred Tax:

A The Net Deferred tax Assets of Rs. 76 [ Previous Year - Liabilities of Rs. 79 ] Lacs for the year has been reversed in the Profit and Loss Account.

8 Disclosure pursuant to Accounting Standard -15 [ Revised ] Employee Benefits:

A Defined benefit plan and long term employment benefit

a General description :

Gratuity [ Defined benefit plan j ;

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy

Privilege Leave [ Long term employment benefit ]

The Leave encashment scheme is administered through Life Insurance Corporation of Indias "Employees Group Leave Encashment-cum-Life Assurance (Cash Accumulation) Scheme". The employees of the Company are entitled to leave as per the leave policy of the Company. The liability on account of the accumulated leave as on last day of the accounting year is recognised (net of the fair value of planned assets as at the balance sheet date) at the present value of the defined obligation at the balance sheet date based on the actuarial valuation carried out by an independent actuary using projected unit credit method.