Good for you.

Zydus Wellness ltd. AnnuAl report 2016-17

Safe Harbour Statement

In this Annual Report we have disclosed forward-looking information [within the meaning of various laws] to enable investors to
comprehend our prospects and take informed investment decisions. This report and other statements – written and oral - that
we periodically make, contain forward-looking statements that set out anticipated results based on the Management’s plans and
assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’,
‘projects’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion of future performance.

We cannot guarantee that these forward-looking statements will be realized, although we believe we have been prudent in
assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown
risks or uncertainties materialize or should underlying assumptions prove inaccurate, actual results could vary materially from those
anticipated, estimated or projected. Readers should bear this in mind.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events
or otherwise.
Corporate Information

BOARD OF DIRECTORS Dr. Sharvil P. Patel COST AUDITORS M/s. Dalwadi & Associates
Chairman Cost Accountants

Tarun G. Arora SECRETARIAL AUDITORS M/s. Hitesh Buch & Associates

Whole-time Director Practicing Company Secretaries

DIRECTORS H. Dhanrajgir REGISTERED OFFICE House No. 6 & 7,

Prof. Indiraben J. Parikh Sigma Commerce Zone
Ganesh Nayak Nr. Iscon Temple,
Kulin S. Lalbhai Sarkhej Gandhinagar Highway
Ahmedabad - 380 015
www.zyduswellness.in

CHIEF FINANCIAL OFFICER Amit B. Jain

COMPANY SECRETARY Dhaval N. Soni REGISTRAR & SHARE M/s. Link Intime India
TRANSFER AGENT Private Limited,
BANKERS Bank of Baroda 506-508,
Ashram Road Branch, Amarnath Business Centre – 1,
Ahmedabad Beside Gala Business Centre,
Off C. G. Road, Ellisbridge,
HDFC Bank Limited Ahmedabad–380 006
Navrangpura Branch,
Ahmedabad
WORKS 7A, 7B & 8,
BNP Paribas, Saket Industrial Estate,
Ellisbridge Branch Sarkhej Bavla Road,
Ahmedabad
Village: Moraiya,
Taluka: Sanand,
District: Ahmedabad
STATUTORY AUDITORS M/s. Dhirubhai Shah & Doshi
Chartered Accountants

CIN L15201GJ1994PLC023490
Contents
Good for You 02 Notice 19

Chairman’s Message 14 Directors’ Report and Relevant Annexures 28

Marketing Awards and accreditations 16 Business Responsibility Report 48

Our competitive advantages 17 Corporate Governance Report 55

Management Discussion & Analysis 71 Cash Flow Statement 84

Auditors’ Report 76 Notes to Financial Statements 87

Balance Sheet 82 Consolidated Auditors’ Report 130

Statement of Profit & Loss 83 Consolidated Financial Accounts 134

 A fundamental
premise that
whatever we do
will enrich the

At Zydus world.

Wellness Limited,the

Good You!
A commitment

for that we will

make products
for the best
holistic consumer
experience.
commitment runs across
our business.
02 | Zydus Wellness Ltd.
Our brands

Sugar Free Nutralite Everyuth

Launched in 1988. More than a Nutralite offers a range of Everyuth Naturals is a pioneer
brand, Sugar Free is synonymous premium table spreads which of skincare range of products
to the sugar substitute category. are cholesterol-free, not specially meant for the face.
It is being offered to the containing any trans fats. Everyuth brand has very strong
consumers as a smarter choice. Nutralite enables homemaker “naturals” equity in the minds of
A market leader through its two to make variety of dishes consumers enabling it to enjoy
variants ‘Sugar Free Gold’ and without needing to worry about strong leadership in Scrub and
‘Sugar Free Natura’. Sugar Free health. The premium range Peel Off segments. It has recently
is a safe and ideal low calorie is fortified with Omega 3 and revamped the Face Wash range
sugar substitute. To further drive Vitamin A, D & E. They are now with relaunch of Tulsi-Turmeric
the market and address diverse available in multiple flavours. Face Wash.
consumers needs, now Sugar
Free is also offering a natural
sweet substitute through its
range of Sugar Free Green which
is made from Stevia.

Sugar Free in Everyuth Scrubs: Everyuth Face Wash

hourglass Pioneers in India in sachets
shape pack

Sugar Free Diet Sugar: Everyuth Peel-offs: Everyuth

Spoonful equivalent Pioneers in India Hydrogel Scrubs

Sugar Free Sweet Nutralite in Everyuth Golden

Drops : Sweetness in microwave-safe tubs Glow Peel-off
liquid format Later fortified with O3

Sugar Free Green: Nutralite - New

100% Natural flavoured variants

Better User Experience + Superior Benefits + Accessibility and Convenience

Annual Report 2016-17 | 03

 Widening
the goodness
basket

04 | Zydus Wellness Ltd.

Good
Growing the

for
You! product basket

At Zydus Wellness, as a consumer-centric

brand, we keep enlarging the product
basket in line with emerging consumer
needs and evolving lifestyles.
In 2016-17, we strengthened our offerings through
the following introductions:
• We have introduced Sugar Free Green with
Stevia in all major cities across the country.
• We have expanded the Nutralite range with
two new flavours (Garlic Oregano and Pudina
Coriander).
• We have also launched mayonnaise under the
Nutralite umbrella for our institutional customers.
• We re-launched the Tulsi-Turmeric face wash
(Everyuth) with superior efficacy leading to an
enhanced consumer experience.
At Zydus Wellness, a continuously-rejuvenating
product basket helped broad-base revenues in FY17
through innovations. Our intent is to significantly
enhance contribution of innovations to the business
performance by 2020.

Annual Report 2016-17 | 05

06 | Zydus Wellness Ltd.
 Good
A robust

for
You! launch pipeline

At Zydus Wellness, we are continuously

engaged in extending products, improving
and revamping packaging and opportunities
to serve evolving consumer needs.
The result is a consumer-driven innovation priority
that will help formulate differentiated products
in relatively competition-insulated spaces to be
progressively launched in three to five years. Our
R&D’s constant endeavor is to integrate latest
technology advancements with sharp consumer
insights. The innovation program at Zydus Wellness
is built on the pillars of consumer centricity, lower
turnaround time, global partnerships with reputed
technical institutions and nurturing internal talent.
Innovation is good for our consumers.

SUSTAINING What’s good

OUR for the
consumer is
GOODNESS good for the
PROMISE brands.

Annual Report 2016-17 | 07

08 | Zydus Wellness Ltd.
 'Goodness’
Enhancing

awareness

At Zydus Wellness, we don’t just develop,

manufacture and market products. We believe
in developing nascent sectoral spaces by
educating & building awareness for our products,
and their benefits.
Over the last few years, we have been working on enhancing
awareness and educating consumers through the interplay
of diverse promotion platforms and engagements:
• We have re-positioned Sugar Free as a Smarter
Sweetness Solution and also got on board
Parineeti Chopra, a health and fitness conscious
celebrity.
• Celebrity chef Sanjeev Kapoor continues to work with
both Sugar Free & Nutralite brands to help build culinary
association.
• We introduced on our websites relevant recipes using
our health products as ingredients, deepening the
relevance of our products in everyday consumer
lives and leveraged our robust digital platform to
enhance product awareness.
• We have significantly enhanced consumer
touch-points by developing the Culinary program for
Sugar Free through relevant activations that focused
on enhancing consumer engagement and experiences.
The result has been sustained market leadership.
Sugar Free has further strengthened its dominant leadership
by improving market share to 94.5%. Everyuth retained its
leadership in Scrub and Peel Off segments across with
31.6% & 90.3% market shares respectively (Source : Nielsen,
MAT March 2017) .

What’s good for consumers is good for brands.

More than
INR 2000 Million
investment
in various branding Widening
and awareness the goodness
initiatives in the basket
three years ending
2016-17
Annual Report 2016-17 | 09
 22%
Improvement in
plant efficiency Strengthening
over the last two the goodness
years leading to commitment
FY17

10 | Zydus Wellness Ltd.

 Our
Streamlining

Plant operations
At Zydus Wellness, we believe that consumer
value is best enhanced through product integrity.
In turn, product integrity is enhanced through
an investment in best-in-class manufacturing
facilities; practices benchmarked with some of
the most stringent health and food standards;
practices, processes and systems.
During the last few years, the company invested in the
following productivity and quality enhancing initiatives:

SLIM Project: This Strategic Lean Integrated Management

exercise improved person-machine productivity.

GEMBA Technique: This discipline enhanced

shopfloor efficiency in addressing production and
productivity targets.

Kaizen: This continuous improvement agenda inspired

shop-floor members to contribute to generate nearly
300 improvement suggestions, enhancing operational
efficiency.

Quality: We recorded, displayed, monitored and resolved

quality deviations through plant-team and management-
team discussions, analysis and solutions; more than half the
quality issues were permanently resolved.

Alliance: We engaged with National Institute of

Manufacturing Competitiveness to identify manufacturing
process improvement opportunities.

The result is that we increased output and quality on one

hand while optimizing costs on the other, strengthening
our overall competitiveness. We have also been recognised
with “Best Plant” across Zydus Group for implementing best
practices of SLIM (Strategic Lean Integrated Manufacturing).

What’s good for competitiveness is good for

the business.

Annual Report 2016-17 | 11

 We increased
our direct reach by ~67% in
last three years, thus enhancing
the quality of direct distribution
which in turn will support new
product launches.

SUSTAINING OUR
GOODNESS
PROMISE

What’s good
for the
consumer is
good for the
brands.

Revamping our

Go-To-
During the last few years, the company
revamped its ‘go to market’ model through
various initiatives:
• We realigned our distribution strategy in line

market
with best practices in FMCG industry.
• We strengthened the business models of
our primary customers (distributors)
by consolidating and allocating a large sales
footprint to each, widened their product
basket, created a compelling proposition
around and a fair return on investment.
model
• The result is that average throughput per
At Zydus Wellness, we have revamped our distributor increased 83% in the
go-to-market model to be able to distribute space of just three years, strengthening
products wide and deep on the one hand and their engagement and growing our trade
disperse products through the right channels partner family.
in line with evolving market needs on the Stronger distribution network improves
other hand. access of product to the consumers.

12 | Zydus Wellness Ltd.

 Vision
DNA
We Bring Wellness
To Your Life … To Build New Emergent
We Will Create New Categories With
Experiences By Our Differentiated Product
Products That Will Nourish, Propositions.
Nurture And Energize Your Philosophy Of Building
Life. We Shall Lead The Products That Are
Way Through “Good For You”.
Innovation.

Zydus Wellness Limited. A company that creates market niches with ‘good
for customer’ products. A company enjoying market-leading brands in
the health, wellness and skincare spaces.
Background across three manufacturing 8,00,000 outlets including indirect
Zydus Wellness is an integrated facilities – one in Ahmedabad and reach. The Company’s distribution
consumer company that combines one in Sikkim (ISO 22000 and ISO capability has been facilitated by
the best of health, wellness and 14001 certified, GMP certified) a proactive investment in 23 cold
skincare spaces. The result is a that are marketed pan-India. chain warehouses and 27 ambient
basket of wellness products that We have also added one more warehouses.
enrich lives. manufacturing facility at Sikkim.
The new production unit of Zydus Brands
Group and Promoters Wellness - Sikkim, the partnership The Company’s flagship brands
Zydus Wellness, a subsidiary firm commenced its commercial Sugar Free, Everyuth and Nutralite
of Cadila Healthcare Limited production during the fourth operating in health, wellness and
is the flagship company of quarter. skin care spaces enjoys visible and
the Zydus Cadila Group. market-leading positions.
Zydus Cadila is promoted by Footprint
Mr. Pankaj Patel and family. Zydus Wellness products Listing
are marketed pan-India The Company’s shares are listed on
Locations through a robust distribution the Bombay Stock Exchange and
Zydus Wellness is headquartered network comprising 1000+ the National Stock Exchange.
in Ahmedabad (Gujarat, India). The distributors and ~1000 feet-
Company manufactures its range on-street representatives, who
of health and wellness products facilitate coverage of more than

Annual Report 2016-17 | 13

 “ At Zydus Wellness,
we are optimistic
of growing faster

”
even as we
grow larger.

Dr. Sharvil Patel

Chairman, Zydus Wellness Ltd.

Dear friends,

At Zydus Wellness, we are optimistic about stepping up the pace of growth.

Optimism

Our optimism is based on a number of positive realities. While India is one of the biggest
consumption markets for sugar in the world, the sugar substitute market is highly
under-penetrated. With growing consciousness of health & wellness, this category provides
a significant opportunity to grow over a substantial period of time. Also, with consistent
education and awareness being built about the usage and versatility of sugar substitutes,
the depth of consumption also offers significant opportunities in the future.

14 | Zydus Wellness Ltd.

Similar opportunities exist in every experiential marketing marked by In the skin care space, we have
other business space in which we are tasting sessions for consumers relaunched clinicaly tested Tulsi-
present; either the penetration of the in metros during festivals and Turmeric face wash addressing
product within India lags the global regular grocery buying visits. In the the largest consumer segment in
average or a subsegment of that butter-substitute space, we have facial cleansing with first-of-its-kind
product accounts for a negligible expanded our product offering ingredients combination. Similarly
share of the product penetration. with new variants which is enabling as a market leader in face scrub, our
As a sectoral leader, Zydus Wellness’ consumers to experiment with a new campaign addresses the myths
responsibility is not only to address range of options for their families and barriers amongst the non-users
existing market size but to grow at home. The Institutional segment in the segment. We believe, Everyuth
it, in the process accounting for a also offers a significant opportunity with its superior formulation is best
disproportionately large share of the in the future; we have also widened equipped to grow the category it
market expansion. In an India that our product basket through the operates in.
is passing through unprecedented introduction of mayonnaise
increase in discretionary incomes on for institutional customers.
the one hand and enhanced lifestyle
aspirations on the other, we believe
that the market is at the cusp of
At Zydus Wellness, we have drawn out a medium-term strategic road
unprecedented brand-led growth.
map: Organic growth through pillar brands, growing our international
The reality is that Zydus Wellness presence and addressing inorganic opportunities (within and outside
is at the right place with the right India).
products in the right segments.
Organic growth: Our team has created a three-year innovation funnel. This
Growing the market comprises the development of launch of differentiated products in each
product category of our presence. We also intend to embrace contemporary
Zydus Wellness is not merely and conventional consumer communication channels, enhancing our
waiting for the market to evolve. effectiveness.
The company has embarked on International presence: We intend to extend our horizon beyond India. We
a number of initiatives to evolve have started to establish our presence in Middle East, Africa and South East
and enlarge market spaces. In the Asia. These geographies offer immense potential to grow in our existing
health products segment, where we product portfolio and their extentions.
possess long-established products Acquisitions: We are analyzing inorganic opportunities in India and outside.
like Sugar Free and Nutralite, we We will seek brands and companies with complementary capabilities to enter
are extending their relevance from new product categories and geographies, strengthening our presence in the
obesity and diabetes-centricity to health, wellness and personal care spaces. We are well-placed to make this
mass appeal products through the happen; we have virtually no debt on our books and we possess net worth of
launch of new products/variants. INR 5572 Million as on March 31, 2017.
In the sugar-substitute space, we
have drawn out a two-pronged
Overview
strategy. One, we are focusing on
new users by introducing products At Zydus Wellness, these are exciting
times. We have arrived at a critical Our ‘Smartness wali
aligned with customer aspirations.
mass; our brands continue to be Sweetness’ campaign
An example of this, is the launch of
market leaders; we will create a new featured among the three
Sugar Free Green which is targeted spark in each business category; leading advertisements
at consumers with a preference we expect to climb into new orbits. in national publications
for natural products, a trend that is In doing so, we are confident to
sustain profitable growth across the
(Source: Ipsos Research,
growing stronger Pan-India. Two,
medium-term, enhancing value for Publication - Mint).
we are building usage across a range
our stakeholders.
of culinary options through strong

Annual Report 2016-17 | 15

Awards and Accreditations
Zydus Wellness consumer and marketing work has been acknowleged by the industry through a host of awards over
the past few years.

Presentor Brand Award Category Campaign Title Type

IAMAI* Nutralite Best UGC** Campaign World’s First Healthgram Silver
Goafest- Creative Abby Nutralite Best UGC** Campaign World’s First Healthgram Bronze
*Internet and Mobile Association of India ** User generated content

Manufacturing Award
In National Award Manufacturing Competitiveness (NAMC) which was conducted by International Research Institute
of Manufacturing, our Sikkim plant was bestowed with a Silver medal with a recommendation of a special award.

Highlights, 2016-17 Shareholding pattern, 2016-17

Financial matrix

72.08% 13.80% 7.80% 6.32%

8.6% 8.5% 5.5%
Promoter
holding,
Institutional
holding, FII holding, Other holding,
Income from March 31, March 31,
EBIDTA Net Profit March 31, 2017 March 31,
operations 2017(%) 2017(%)
growth (%) growth (%) (%) 2017(%)
growth (%)

Healthy Margins in FMCG space Market Capitalization

21.4% 23.6% 20.9% 33,965

Healthy Healthy net
21.0% Market
Healthy Healthy capitalization,
EBIDTA profit ROE (%) ROCE (%) March 31, 2017
margin (%) margin (%)
(INR Million)

Zydus Wellness: The journey Zydus Wellness: Straddling the value-chain

2017
Research & Quality Supply Marketing Sales &
2014 Development manufacturing chain initiatives Distribution
focus efficiency expansion

2009
2006
2005

1991
In-house Emphasis on Managing cold as Innovations in Revamped
1988 Sugarfree
research team quality well as non-cold communication go-to-market
Green with
Restructured Stevia and developing cost saving chain cost saving and sales strategy
and Renamed
Acquisition New future products initiatives initiatives like promotion Total reach at
Zydus
Sugar Everyuth Sugar Free of Carnation Wellness Production
Free with Skincare Natura with Nutra Facility like SLIM PRISM 8,00,000 outlets
(Subsidiary of Distribution
Aspartame Range Sucralose (CANFL) CHL) Revamp at Sikkim

16 | Zydus Wellness Ltd.

Our Competitive Advantages
Product space Brands
• Differentiated product • Market-leading brands
propositions • Endorsed by business-
• Address unmet needs
• Transforming lifestyles
relevant celebrities
• Growing brand
11.4 12.4
Total Income
investments (More than EBIDTA
INR 2000 Million in three from operations
growth (%) growth (%)
years ending FY17)
[8-year CAGR] [8-year CAGR]

Distribution Network Financial Strength

• Expansive; expanding
annually across traditional
• Virtually zero-debt status
• Net cash flow from
21.0 29.8
and emerging channels Net Profit Shareholders
• Products available across operations INR 770 Million
by end of FY17 growth (%) fund growth (%)
8,00,000 touch-points
pan-India
[8-year CAGR] [8-year CAGR]
• Robust financials to drive
• Industry leading growth
distribution strength in
chemists and cosmetics
sub-channels

Shareholder value-creation

‘Good for you’ products make

‘good-for-you’ investments
Total Income from Operations* ( INR Million ) EBIDTA* ( INR Million ) Net Profit* ( INR Million )
1090
991
4626

CAGR (%) CAGR (%) CAGR (%)

11.4 12.4 21.0
1948

238
388

FY09 FY17 FY09 FY17 FY09 FY17

*FY09 financials are as per IGAAP; FY17 financials as per INDAS and hence not comparable

Annual Report 2016-17 | 17

 Shareholder funds* ( INR Million ) Market capitalisation ( INR Million ) BSE Sensex

29620
33977
5572
CAGR (%) CAGR (%) CAGR (%)
29.8 40.1 15.0

9708
2287
690

FY09 FY17 FY09 FY17 FY09 FY17

*FY09 financials are as per IGAAP; FY17 financials as per INDAS and hence not comparable

Consistent dividend payout

65% 65%
60% 60% 60%

50%
40%
33.5%
28.8% 30% 28.2% 28.4% 30.1% 28.0%
25.9%
30.2%
15%

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Dividend(%) Payout(% of NP)

Three pillars to drive future growth

Organic growth Geographic expansion Inorganic growth

Innovation pipeline SAARC, Middle East and Africa and Focus on health, wellness and skin
South East Asia care
Embrace new communication Sugar Free, a flagship brand to lead Expand business to new consumers,
channels with consumers expansion beyond India new categories and new
geographies
Expand touch points for consumer Country specific innovations to Leveraging Balance Sheet strength
acquisition adapt to local requirements and parent support

18 | Zydus Wellness Ltd.

Notice
ZYDUS WELLNESS LIMITED
[CIN–L15201GJ1994PLC023490]
Registered Office: House No. 6 & 7, Sigma Commerce Zone,
Sarkhej–Gandhinagar Highway, Ahmedabad – 380 015
Website: www.zyduswellness.in; Email ID: [email protected]
Phone No.: 079-67775888; Fax No.: 079-67775811

Notice is hereby given that the Twenty Third Annual General Act, 2013, and the Companies [Cost Records and Audit]
Meeting of the members of the Company will be held on Friday, Rules, 2014 [including any statutory modification(s) or re-
August 11, 2017 at 12.00 noon at J. B. Auditorium, Ahmedabad enactment thereof for the time being in force], the Company
Management Association, ATIRA Campus, Dr. Vikram Sarabhai hereby ratifies the remuneration of Rs. 2.25 Lakhs plus
Marg, Ahmedabad – 380 015, to transact the following business: applicable service tax and out of pocket expenses for the
financial year ending on March 31, 2018 to M/s. Dalwadi &
ORDINARY BUSINESS:
Associates, Cost Accountants [Firm Registration No. 000338]
1. To receive, consider and adopt the Audited Financial
who were appointed as Cost Auditors to conduct the audit
Statements [including consolidated financial statements] of
of cost records maintained by the Company pertaining to
the Company for the year ended on March 31, 2017 and the
product ‘Nutralite’ manufactured by the Company for the
Reports of the Board of Directors and Auditors thereon.
financial year 2017–2018.”
2. To confirm the Interim Dividend of Rs. 6.5 per share of Rs. 10
6. To regularize the appointment of Mr. Kulin Lalbhai as an
each as a final dividend for the financial year 2016-2017.
Independent Director:
3. To appoint a Director in place of Dr. Sharvil P. Patel [DIN-
To consider and if thought fit, to pass with or without
00131995], who retires by rotation and being eligible offers
modification[s], the following resolution as an Ordinary
himself for reappointment.
Resolution:
4. To ratify the appointment of M/s. Dhirubhai Shah & Doshi,
“RESOLVED THAT pursuant to the provisions of sections
Chartered Accountants [Firm Registration No. 102511W] as
149, 150 and 152 read with Schedule IV of the Companies
Statutory Auditors of the Company, who hold office from the
Act, 2013 and the Companies [Appointment and
conclusion of Twenty First Annual General Meeting until the
Qualifications of Directors] Rules, 2014 [including any
conclusion of Twenty Sixth Annual General Meeting and to
statutory modification(s) or re-enactment thereof for the
fix their remuneration.
time being in force], and Regulation 24 of the SEBI [Listing
SPECIAL BUSINESS: Obligations and Disclosure Requirements] Regulations, 2015,
5. To ratify remuneration to Cost Auditors: Mr. Kulin Lalbhai [DIN 052068786], who was appointed as an
To consider and if thought fit, to pass with or without additional Independent Director by the Board of Directors
modification[s], the following resolution as an Ordinary with effect from November 18, 2016, and in respect of whom
Resolution: the Company has received a notice in writing under section
“RESOLVED THAT pursuant to the provisions of section 148[3] 160 of the Companies Act, 2013 from a member proposing
and other applicable provisions, if any, of the Companies his candidature for the Office of Director be and is hereby

Annual Report 2016-17 | 19

 appointed as an Independent Director of the Company to filed under section 92 of the Companies Act, 2013 or any
hold office for a period of five consecutive years i.e. upto one or more of them, at the office of Company’s Registrar
November 18, 2021.” and Share Transfer Agent, viz. M/s. Link Intime India Private
Limited, 5th Floor, 506 to 508, Amarnath Business Centre – 1,
7 To maintain and keep the statutory registers required to
(ABC-1), Beside Gala Business Centre, Nr. St. Xavier’s College
be maintained under Companies Act, 2013 at a place other
Corner, Off C. G. Road, Ellisbridge, Ahmedabad – 380 009
than the Registered Office of the Company:
or at such other place as the Board may from time to time
To consider and if thought fit, to pass with or without decide instead of and/or in addition to the said registers or
modification[s], the following resolution as a Special copy of returns being kept and maintained at the Registered
Resolution: Office of the Company.
“RESOLVED THAT pursuant to the provisions of section 94(1) RESOLVED FURTHER THAT Board of Directors or any
and other applicable provisions of the Companies Act, 2013 committee thereof be and is hereby authorised to take such
read with Rule 5(2) of the Companies [Management and steps and to do all such acts, deeds, matters and things as
Administration] Rules, 2014, consent of the members of the may be required to give effect to the forgoing resolution.”
Company be and is hereby accorded to maintain and keep
By order of the Board of Directors
the Register of Members, Register of Debenture holders,
the Index of Members / Debenture holders, if any, other
statutory registers required to be maintained under section
Place: Ahmedabad Dhaval N. Soni
88 of the Companies Act, 2013 and copies of annual returns
Date: May 27, 2017 Company Secretary

NOTES:
1. The Explanatory Statements pursuant to the provisions of the Company, then such proxy shall not act as a proxy for any
section 102 of the Companies Act, 2013 [the “Act”] in respect other person or member. Proxies in order to be effective, must
of businesses under item Nos. 5, 6 and 7 of the Notice are be received at the Registered Office of the Company, not less
annexed hereto. than 48 hours before the commencement of the Annual
General Meeting i.e. by 12.00 Noon on Wednesday, August 9,
2. The Register of Members and Share Transfer Books shall
2017. A Proxy form is sent herewith. Proxy form submitted on
remain closed from July 31, 2017 [Monday] to August 11, 2017
behalf of the Companies, Societies, etc. must be supported by
[Friday] [both days inclusive].
an appropriate resolution / authority together with specimen
3. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE signature, as applicable.
MEETING IS ENTITLED TO APPOINT ONE OR MORE PROXIES
4. Corporate members intending to authorize its representatives
TO ATTEND AND VOTE INSTEAD OF HIMSELF, ON A POLL
to attend the Meeting are requested to submit to the Company
ONLY AND SUCH PROXY NEED NOT BE A MEMBER OF THE
at its Registered Office, a certified copy of the Board Resolution
COMPANY. A person can act as a proxy on behalf of members
/ authorization document authorizing their representative to
not exceeding 50 [fifty] and holding in the aggregate not
attend and vote on their behalf at the Meeting.
more than ten per cent of the total share capital of the
Company. In case a proxy is proposed to be appointed by a 5. Those members who have not encashed their dividend
member holding more than 10% of the total share capital of warrants pertaining to the following financial years are

20 | Zydus Wellness Limited

 requested to approach the Company for the payment thereof respective Depository Participant.
as the same will be transferred to the Investor Education and
7. The information of the Directors seeking appointment /
Protection Fund [IEPF] on the respective dates mentioned
reappointment at the ensuing Annual General Meeting is
thereagainst pursuant to the provisions of section 125 of
provided at Annexure–A to this Notice as prescribed under
the Companies Act, 2013 and the Rules made thereunder.
Regulation 36[3] of the SEBI [Listing Obligations and Disclosure
Members are requested to note that after such date, any
Requirements] Regulations, 2015 [the Listing Regulations].
unclaimed dividend which has been transferred to the Fund,
may apply for refund, under clause (a) of sub-section (3) of 8. Notice of the Twenty Third Annual General Meeting of the
section 125 or under proviso to sub-section (3) of section 125, Company, inter alia, indicating the process and manner of e–
as the case may be, to the authority by making an application voting along with Attendance Slip and Proxy Form is being
in the prescribed Form online available on website www.iepf. sent to the members, whose email Ids are registered with the
gov.in along with fee as may be decided by the IEPF authority. Company or Depository Participant[s] for communication
purposes unless any member has requested for a hard copy
Financial year Date of Dividend Expected date
of the same. For members who have not registered their email
ended on declaration payment of transfer
address, physical copies of the Notice of the Twenty Third
of dividend % of unpaid
Annual General Meeting of the Company, inter alia, indicating
dividend to
the process and manner of e-voting along with Attendance
IEPF Account
Slip and Proxy Form are being sent in the permitted mode.
March 31, 2010 July 16, 2010 30 July 22, 2017
March 31, 2011 June 30, 2011 40 July 6, 2018 9. Members who have not registered their e-mail address so far
March 31, 2012 July 27, 2012 50 August 2, 2019 are requested to register their e-mail address for receiving all
March 31, 2013 May 13, 2013 60 @ May 31, 2020 communications including Annual Report, Notices, Circulars,
March 31, 2014 July 14, 2014 60 July 20, 2021 etc. from the Company electronically.
March 31, 2015 July 29, 2015 60 August 4, 2022
March 31, 2016 March 4, 2016 65 @ March 9, 2023 Members may also note that the Notice of the Twenty Third
March 31, 2017 March 1, 2017 65 @ March 6, 2024 Annual General Meeting and the Annual Report will also be
@ Interim Dividend available on the Company’s website www.zyduswellness.in
for their download. The physical copies of the documents
Pursuant to the IEPF [Uploading of information regarding
will also be available at the Company’s Registered Office for
unpaid and unclaimed amount lying with the Companies]
inspection during normal business hours on working days.
Rules, 2012, the Company has uploaded the information in
Even after registering for e-communication, members are
respect of the Unclaimed Dividends as on the date of the
entitled to receive such communication in physical form,
Twenty Second Annual General Meeting held on August 3,
upon making a request for the same, by post free of cost. For
2016 on its website www.zyduswellness.in and on the website
any communication, the members may also send requests to
of Ministry of Corporate Affairs www.mca.gov.in
the Company’s email id [email protected].
6. Members holding shares in physical form are requested to
10. Voting through electronic means:
intimate Registrar and Share Transfer Agent of the Company
The business as set out in the Notice may be transacted
viz., M/s. Link Intime India Private Limited [Unit: Zydus Wellness
through electronic voting system. In compliance with the
Limited], 506 – 508, Amarnath Business Centre – 1, Beside Gala
provisions of section 108 of the Act read with the Companies
Business Centre, Ellisbridge, Off C.G. Road, Ahmedabad–380
[Management and Administration] Rules, 2014, Standard
006, changes, if any, in their registered address along with
2 of the Secretarial Standards on General Meetings and in
pin code number and relevant evidences. Members holding
compliance with Regulation 44 of the Listing Regulations,
shares in electronic form shall update such details with their

Annual Report 2016-17 | 21

NOTES: [continue)
the Company is pleased to offer the facility of voting through The remote e-voting module shall be disabled by CDSL
electronic means, as an alternate, to all its members to enable for voting thereafter.
them to cast their votes electronically. The Company has made
(ii) The members should log on to the remote e-voting
necessary arrangements with Central Depository Services
website www.evotingindia.com.
(India) Limited [CDSL] to facilitate the members to cast their
votes from a place other than venue of the AGM [remote (iii) Click on Shareholders–Login.
e-voting]. The facility for voting shall be made available at (iv) Now Enter your User ID
the AGM through polling paper and the members attending a. For CDSL: 16 digits beneficiary ID,
the Meeting who have not cast their vote by remote e-voting
b. For NSDL: 8 Character DP ID followed by 8 digits
shall be able to exercise their right at the meeting. Please note
Client ID,
that the voting through electronic means is optional for the
c. Members holding shares in Physical Form should
members.
enter Folio Number registered with the Company.
A person whose name is recorded in the Register of Members
(v) Next enter the Image Verification as displayed and Click
or in the Register of Beneficial Owners maintained by the
on Login.
depositories as on the cut-off date shall be entitled to avail
the facility of remote e-voting or voting at the AGM. Persons (vi) If you are holding shares in demat form and had earlier

who are not members as on the cut-off date should treat this logged on to www.evotingindia.com and voted on

notice for information purpose only. an earlier voting of any company, then your existing
password is to be used.
The Notice will be displayed on the website of the Company
www.zyduswellness.in and on the website of CDSL. (vii) If you are a first time user follow the steps given below:

The members who have cast their vote by remote e-voting For Members holding shares in
prior to AGM may also attend the AGM, but shall not be Demat Form and Physical Form
entitled to cast their vote again. PAN Enter your 10 digit alpha–numeric
PAN issued by Income tax Department
The Members whose names appear in the Register of
[applicable for both, members holding
Members / List of Beneficial Owners prior to commencement shares in demat mode and members
of book closure date are entitled to vote on Resolutions set holding shares in physical mode].
forth in the Notice. Eligible members who have acquired Dividend Bank Enter the Dividend Bank details or Date
shares after the dispatch of the Annual Report and holding Details of Birth (DOB) (in dd/mm/yyyy format)
shares as on the cut-off date may approach the Company for OR as recorded in your demat account or
issuance of the USER ID and Password for exercising their right Date of Birth in the Company records in order to
to vote by electronic means. (DOB) login.

Members are requested to follow the instructions below to • If both the details are not recorded
cast their vote through e-voting: with the Depository or Company,
please enter the member id / folio
(i) The remote e-voting period will commence at 9:00 a.m.
number in the Dividend Bank details
on Tuesday, August 8, 2017 and will end at 5:00 p.m. on
field as mentioned in instruction (iv).
Thursday, August 10, 2017. During this period members
of the Company, holding shares either in physical form (viii) After entering these details appropriately, click on
or in dematerialized form, as on the cut-off date i.e. “SUBMIT” tab.
August 3, 2017, may cast their vote by remote e-voting. (ix) Members holding shares in physical form will then

22 | Zydus Wellness Limited

 directly reach to the Company selection screen. However, The “m-Voting app” can be downloaded from Google
members holding shares in demat form will now reach Play Store. Please follow the instructions as prompted by
to ‘Password Creation’ menu wherein they are required the mobile app while voting on your mobile.
to mandatorily enter their login password in the new
(xix) Note for non–individual members and custodians.
password field. Kindly note that this password is also to
be used by the demat holders for voting for resolutions • Non-Individual members (i.e. other than Individuals,
of any other company on which they are eligible to vote, HUF, NRI etc.) and custodian are required to log on
provided that the respective company opts for e-voting to www.evotingindia.com and register themselves as
through CDSL platform. It is strongly recommended not Corporates.
to share your password with any other person and take • A scanned copy of the Registration Form bearing the
utmost care to keep your password confidential. stamp and sign of the entity should be emailed to
(x) For Members holding shares in physical form, the [email protected].
details can be used only for e-voting on the resolutions • After receiving the login details a compliance
contained in this Notice. user should be created using the admin login and
(xi) Click on the EVSN for ZYDUS WELLNESS LIMITED on password. The compliance users would be able to link
which you choose to vote. the account(s) for which they wish to vote.

(xii) On the voting page, you will see “RESOLUTION • The list of accounts linked in the login should be
DESCRIPTION” and against the same the option “YES/NO” mailed to [email protected] and on
for voting. Select the option YES or NO as desired. The approval of the accounts they would be able to cast
option YES implies that you assent to the resolution and their vote.
option NO implies that you dissent to the resolution. • A scanned copy of the Board Resolution and Power of
(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view Attorney (POA) which they have issued in favour of the
the entire resolution details. Custodian, if any, should be uploaded in PDF format in
the system for the scrutinizer to verify the same.
(xiv) After selecting the resolution you have decided to
vote on, click on “SUBMIT”. A confirmation box will be (xx) In case you have any queries or issues regarding
displayed. If you wish to confirm your vote, click on e-voting, you may refer the Frequently Asked
“OK”, else to change your vote, click on “CANCEL” and Questions (“FAQs”) and e-voting manual available at
accordingly modify your vote. www.evotingindia.com, under help section or write an
email to [email protected].
(xv) Once you “CONFIRM” your vote on the resolution, you
will not be allowed to modify your vote. Contact Details:
Mr. Rakesh Dalvi, Dy. Manager, CDSL
(xvi) You can also take a print of the vote cast by clicking on 16th Floor, PJ Towers, Dalal Street, Fort,
“Click here to print” option on the voting page. Mumbai–400 001
Email : [email protected]
(xvii) If demat account holder has forgotten the login
Tel: 18002005533
password then he should enter the User ID and the
image verification code and click on Forgot Password A member can opt for only one mode of voting i.e. either
and enter the details as prompted by the system. through remote e-voting or voting at the meeting. If a
member casts votes by both modes, then voting done
(xviii) Members can also cast their vote using CDSL’s mobile app
through remote e-voting shall prevail.
“m-Voting” available for android based mobile phones.

Annual Report 2016-17 | 23

The Company has appointed Mr. Dilip P. Shah, Practicing plus service tax and out of pocket expenses.
Chartered Accountants [Membership No. FCA-030492], to act as
M/s. Dalwadi & Associates, Cost Accountants have furnished
the Scrutinizer for conducting the voting and remote e-voting
certificate regarding their eligibility for appointment as Cost
process in a fair and transparent manner.
Auditors of the Company. As per the provisions of the Act read
The Scrutinizer will submit his report to the Chairman after with the Rules, the remuneration payable to the Cost Auditors
completion of the scrutiny. The result of the voting on the shall be ratified by the members of the Company.
Resolutions at the meeting shall be announced by the Chairman
Accordingly, consent of the members is sought for passing an
or any other person authorised by him immediately after the
Ordinary Resolution as set out in Item No. 5 of the Notice.
results are declared.
None of the Directors or Key Managerial Personnel of the Company
The results declared along with the Scrutinizer’s report, will be
or their relatives is in any way, concerned or interested, financially
posted on the website of the Company www.zyduswellness.in
or otherwise, in the resolution set out in Item No. 5 of the Notice.
and on the website of CDSL and will be displayed on the Notice
Your Directors recommend the passing of this resolution by the
Board of the Company at its Registered Office immediately after
members.
the declaration of the results by the Chairman or any other person
authorised by him and communicated to the Stock Exchanges. In respect of item No. 6:
Pursuant to the provisions of section 161 of the Companies Act,
REQUEST TO THE MEMBERS:
2013 [hereinafter referred to as the Act], Mr. Kulin Lalbhai was
1. Members desiring any relevant information on the accounts
appointed as an Additional Independent Director with effect from
at the meeting are requested to write to the Company at least
November 18, 2016.
seven days in advance of the date of meeting at its Registered
Office, so as to enable the company to keep the information Pursuant to the provisions of section 161[1] of the Act, Mr. Kulin
ready. Lalbhai holds office upto the date of the ensuing Annual General
Meeting of the Company. A notice has been received from a
2. Members are requested to bring their copy of the Annual
member along with a deposit of requisite amount under section
Report to the meeting.
160 of the Act proposing Mr. Kulin Lalbhai as a candidate for the
office of the Director of the Company.
Explanatory Statements pursuant to section 102[1] of
the Companies Act, 2013: Mr. Kulin Lalbhai is not disqualified from being appointed as
The following statement sets out all material facts relating to a Director in terms of section 164 of the Act and has given his
Special Business mentioned in the accompanying Notice. consent to act as an Independent Director. As per the provisions
of section 149 of the Act, an Independent Director can hold office
In respect of item No. 5:
for a term upto five consecutive years on the Board of a Company
In accordance with the provisions of section 148 of the Companies
and he shall not be included in determining the total number of
Act, 2013 [the “Act”] and the Companies [Audit and Auditors]
Directors liable to retire by rotation.
Rules, 2014, the Company is required to appoint a Cost Auditor
to audit the cost records of the Company pertaining to product The Company has received a declaration from Mr. Kulin Lalbhai that
‘Nutralite’ manufactured by the Company. he meets criteria of independence as prescribed under section
149[6] of the Act and Regulation 17 of the Listing Regulations.
On the recommendation of the Audit Committee, the Board of
Mr. Kulin Lalbhai, aged 31 years holds MBA degree from the Harvard
Directors have approved the appointment of M/s. Dalwadi &
Business School and a B. Sc. in Electrical Engineering from the
Associates, Cost Accountants [Registration Number 000338] as the
Standford University. Brief resume of Mr. Kulin Lalbhai, nature of his
Cost Auditors to conduct audit of cost records of the Company for
expertise in specific functional areas and names of the Companies
the financial year 2017-2018, at a remuneration of Rs. 2.25 Lakhs

24 | Zydus Wellness Limited

in which he holds directorships and memberships / Chairman of to be annexed thereto under section 92 of the Act, and other
the Board / Committee, shareholding and relationships between related books, are required to be maintained at the registered
Directors inter se, as stipulated under Listing Regulations with the office of the Company unless a special resolution is passed in a
stock exchanges are annexed to this notice. general meeting authorizing the keeping of the register at any
other place within the city, town or village in which the registered
In the opinion of the Board, Mr. Kulin Lalbhai fulfills the conditions
office is situated.
as specified in the Act and Rules made thereunder for his
appointment as an Independent Director of the Company. A In the interest of operational and administrative convenience, it is
copy of the draft letter of appointment of Mr. Kulin Lalbhai as an proposed to keep the Register of Members, Register of Debenture
Independent Director setting out the terms and conditions would holders, the Index of Members / Debenture holders, if any, other
be available for inspection without any fee by the members at the statutory Register required to be maintained under section 88 of
Registered Office of the Company during normal business hours the Companies Act, 2013 and copies of annual returns filed under
on any working day. section 92 of the Companies Act, 2013 or any one or more of
them, at the office of the Company’s Registrar and Share Transfer
Keeping in view of his vast experience and knowledge, the Board
Agent, M/s. Link Intime India Private Limited, 5th Floor, 506 to
considers that his association would be of immense benefit to the
508, Amarnath Business Centre – 1, (ABC-1), Beside Gala Business
Company and it is desirable to avail services of Mr. Kulin Lalbhai as
Centre, Nr. St. Xavier’s College Corner, Off C. G. Road, Ellisbridge,
an Independent Director.
Ahmedabad – 380 006, a place other than its registered office.
Save and except Mr. Kulin Lalbhai, none of the Directors and
Approval of the members is required under section 94 of the Act
Key Managerial Personnel of the Company and their relatives is
for effecting the change in the place at which the Register and
concerned or interested, financially or otherwise, in the resolution
Index of Members are to be kept.
as set out at Item No. 6 of the Notice.
The Board recommends the Special Resolution set out under Item
The Board recommends the passing of resolution as an Ordinary
No. 7 of the notice for the approval of the members.
Resolution as set out at Item No. 6 of the Notice.
None of the Directors and Key Managerial Personnel of the
In respect of Item No. 7:
Company and their relatives is concerned or interested, financially
Under the provisions of the Companies Act, 2013 [the Act]
or otherwise, in the resolution as set out at Item No. 7 of the Notice.
certain documents such as the Register of Members and Index
of Members, Register and Index of Debenture holders, register By order of the Board of Directors
and index of any other security holders, Register of Renewed
and Duplicate Shares and copies of all annual returns prepared, Place: Ahmedabad Dhaval N. Soni
together with the copies of certificates and documents required Date: May 27, 2017 Company Secretary

Annual Report 2016-17 | 25

Annexure–A
Details of Directors seeking appointment / reappointment at the forthcoming Annual General Meeting
[Pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements)], Regulations, 2015

Name of the Director Dr. Sharvil P. Patel

Age 39 years
Date of Appointment on the Board 27th April, 2009
Brief resume and nature of expertise in Dr. Sharvil P. Patel is the Joint Managing Director of Cadila Healthcare Limited, parent
functional areas Company, which is one of the leading global healthcare providers and the 4th largest
pharmaceutical company in India. With a specialisation in Chemical and Pharmaceutical
Sciences from the University of Sunderland, U.K., and a Doctorate from the same university
for his research work in Breast Cancer at John Hopkins, Bayview Medical Centre, USA,
Dr. Sharvil Patel possesses both Pharma and Research expertise.

Young and astute with a natural bias for leading new streams of thoughts and initiatives,
Dr. Sharvil P. Patel is a member of the Zydus Executive Board which oversees and reviews
the different business verticals of the group and spearheads organization-wide initiatives.
Combining ‘big picture’ thinking with a fine eye for details, Dr. Patel’s leadership inspires
people to look at an expansive canvas of thoughts and ideas while focusing on a well-
defined implementation roadmap.

Dr. Sharvil P. Patel has also brought in a new dimension to the consumer business – giving
it a much larger positioning in the wellness domain. He officiates as the Chairman on the
Board of Zydus Wellness Limited. The company is creating several novel experiences for
the health conscious consumers and has a basket of niche products and iconic brands
such as Sugar Free, Everyuth and Nutralite.
Relationship between directors inter-se None
Directorships held in other Listed Companies Cadila Healthcare Limited
Memberships / Chairmanships of Zydus Wellness Limited
Committees in Listed Companies Name of the Committee Position Held
Nomination and Remuneration Committee Member
Share Transfer Committee Chairman
CSR Committee Chairman

Cadila Healthcare Limited

Name of the Committee Position Held
Stakeholders’ Relationship Committee Member
Share Transfer Committee Member
CSR Committee Member
Risk Management Committee Member

Shareholding of Non-Executive Director 533 Equity Shares

26 | Zydus Wellness Limited

Name of the Director Mr. Kulin Lalbhai
Age 31 years
Date of Appointment on the Board November 18, 2016
Brief resume and nature of expertise in Mr. Kulin Lalbhai, aged 31 years holds MBA degree from the Harvard Business School
functional areas and B. Sc. in Electrical Engineering from the Standford University.

Mr. Kulin Lalbhai is currently the Executive Director of Arvind Limited, one of the reputed
Company in textile industry. He is driving new initiatives in the consumer business of
Arvind Group. Mr. Lalbhai also spearheads Arvind’s foray into e-commerce space. He
plays an active role in the overall corporate strategy for the group with particular focus
on B2C businesses.

Prior to the current position in Arvind Limited, Mr. Lalbhai worked with management
consulting firm McKinsey & Co., Mumbai.
Relationship between directors inter-se None
Directorships held in other Listed Companies 1. Arvind Limited
2. Arvind Smartspaces Limited
Memberships / Chairmanships of Zydus Wellness Limited
Committees in Listed Companies Name of the Committee Position Held
Audit Committee Member
Nomination and Remuneration Committee Member

Shareholding of Non-Executive Director Nil

Annual Report 2016-17 | 27

Directors Report

Your Directors are pleased to present Twenty Third Annual Report and the Financial Statements for the Financial Year ended on March
31, 2017.

Financial Results:
The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified
under section 133 of the Companies Act, 2013, read with Rule 7 of the [Companies Accounts] Rules, 2014. The financial statements for
the Financial Year ended on March 31, 2017 are the Company’s first Ind AS compliant annual financial statements with comparative
figures for the year ended on March 31, 2016 also under Ind AS. The date of transition is April 1, 2015.

The disclosure and effects of first time adoption of Ind AS are detailed in Note 43 of the standalone financial statements and Note 43 of
the consolidated financial statements.

The standalone and consolidated financial performance of the Company, for the Financial Year ended on March 31, 2017 are summarized
below: [INR-Lakhs]
Particulars Standalone Consolidated
For the year ended For the year ended For the year ended For the year ended
on March 31, 2017 on March 31, 2016 on March 31, 2017 on March 31, 2016
Revenue from Operations and Other Income 25,245 23,231 49,519 45,844
Profit before Finance Cost, Depreciation, 11,297 10,764 13,171 12,375
Amortisation and Impairment Expenses & Tax
[PBIDT]
Less: Finance Cost 48 6 55 14
Less: Depreciation, Amortisation and 370 355 716 681
Impairment expenses
Profit Before Tax [PBT] 10,879 10,403 12,400 11,680
Less: Tax Expenses (55) 77 1,272 1,156
Profit After Tax [PAT] 10,934 10,326 11,128 10,524
Attributable to:
Owners of the Parent 10,934 10,326 10,898 10,326
Non-Controlling Interests - - 230 198
Other Comprehensive Income / (Loss), Net of (15) (16) 21 (16)
Tax
Total Comprehensive Income 10,919 10,310 11,149 10,508
Attributable to:
Owners of the Parent 10,919 10,310 10,919 10,310

28 | Zydus Wellness Limited

Particulars Standalone Consolidated
For the year ended For the year ended For the year ended For the year ended
on March 31, 2017 on March 31, 2016 on March 31, 2017 on March 31, 2016
Non-Controlling Interests - - 230 198
Opening balance in Retained Earnings 39,438 35,035 39,482 35,034
Amount available for appropriation
Dividend:
Interim - FY 2016-17 2,540 - 2,540 -
Interim - FY 2015-16 - 2,540 - 2,540
Final - FY 2014-15 - 2,344 - 2,344
Corporate Dividend Tax on Interim/Final 517 994 517 994
Dividend
Closing Balance in Retained Earnings 47,360 39,483 47,323 39,482
Earnings Per Share [EPS] [Face Value of shares of 27.99 26.43 27.89 26.43
Rs. 10/- each]

Results of operations: (Consolidated) Regulations), the top 500 listed companies shall formulate a
During the year under review, the consolidated sales revenue dividend distribution policy. Accordingly, the Company has
grew by 8.3% to Rs. 45934 Lakhs from Rs. 42419 Lakhs in 2015-16. formulated a Dividend Distribution Policy, which is approved by
The profit before tax increased by 6.2% y-o-y to Rs. 12400 Lakhs. the Board of Directors [the Board] and is uploaded on Company’s
Net profit after tax (before OCI and after Non Controlling Interest) website www.zyduswellness.in.
increased by 5.5% y-o-y to Rs.10898 Lakhs. The net profit margin,
Transfer of Shares to Investor Education and Protection
as a % to total operating income during the current year is 23.6%.
Fund [IEPF]:
A detailed analysis of performance for the year has been included
Pursuant to the applicable provisions of the Companies Act,
in the Management Discussion and Analysis Report, which forms
2013, read with the IEPF Authority (Accounting, Audit, Transfer
part of the Annual Report
and Refund) Rules, 2016 (‘the Rules’), all unpaid or unclaimed
Interim Dividend: dividends are required to be transferred by the Company to IEPF
During the year under review, your Directors have declared and established by the Central Government, after completion of seven
paid an interim dividend of Rs. 6.50 [65%] per equity share of years. Further according to the Rules, the shares in respect of
face value of Rs. 10/- each to the shareholders holding shares in which dividend has not been paid or claimed by the shareholders
physical form and whose names were entered into the Register of for seven consecutive years or more shall also be transferred to
Members of the Company as on March 10, 2017, being the Record the demat account created by the IEPF Authority. Accordingly, the
Date fixed for the purpose. The shareholders holding shares in Company has transferred the unclaimed and unpaid dividends.
electronic form were paid dividend as per the beneficiary data Further, the corresponding shares will be transferred as per the
provided by the Depositories. Your Directors do not recommend requirements of the IEPF rules, details of which are provided on
final dividend. The dividend payout ratio for the current year our website.
[inclusive of corporate dividend tax on dividend distribution] is
Fixed Deposit:
27.96%.
The Company has not accepted any fixed deposit and, as such, no
During the year, the unclaimed dividend pertaining to the amount of principal or interest was outstanding as of the Balance
dividend for the financial year ended on March 31, 2009 was Sheet date.
transferred to Investor Education and Protection Fund.
Management Discussion and Analysis [MDA]:
As per Regulation 43A of the SEBI [Listing Obligations and MDA, for the year under review, as stipulated under Regulation
Disclosure Requirements] Regulations, 2015 (the Listing 34[2][e] of SEBI [Listing Obligations and Disclosure Requirements]

Annual Report 2016-17 | 29

Regulations, 2015 [hereinafter referred to as “the Listing for a period of five consecutive years from November 18,
Regulations”], is presented in a separate section, which forms a 2016, subject to the approval of the shareholders. Mr. Kulin
part of the Annual Report. S. Lalbhai was appointed as an Additional Independent
Director, who shall hold office up to the ensuing Annual
Consolidated Financial Statements:
General Meeting.
M/s. Zydus Wellness, Sikkim [ZWS] is under the majority control of
the Company and hence the accounts of ZWS are consolidated The Board at its meeting held on January 30, 2017 has
with the accounts of the Company in accordance with the also appointed Mr. Kulin S. Lalbhai as a member of the
provisions of Ind AS-110 on Consolidated Financial Statements Audit Committee and the Nomination and Remuneration
issued by the Ministry of Corporate Affairs and as provided under Committee.
the provisions of the Companies Act, 2013 [hereinafter referred
The terms and conditions of appointment of Mr. Kulin S.
to as “Act”] read with Schedule III of the Act and Rules made
Lalbhai are placed on the website of the Company www.
thereunder and the Listing Regulations. The audited Consolidated
zyduswellness.in.
Financial Statements are provided in the Annual Report.
ii. Retirement by rotation:
Though the Company does not have any subsidiary Company, in
In accordance with the provisions of section 152[6] of the Act
compliance of the provisions of Regulation 16[1][c] of the Listing
and in terms of Articles of Association of the Company, Dr.
Regulations, the Company has formed a policy relating to material
Sharvil P. Patel, Director [DIN–00131995] will retire by rotation
subsidiaries, which is approved by the Board and may be accessed
at the ensuing Annual General Meeting and being eligible,
on the Company’s website at the link http://www.zyduswellness.
offers himself for reappointment. The Board recommends his
in/investor/Policy%20on%20Material%20Subsidiary-May15.pdf
reappointment.
Related Party Transactions:
iii. Declaration of Independence:
All transactions entered by the Company during the financial year
The Company has received declarations of independence
with related parties were in the ordinary course of business and
as stipulated under section 149[7] of the Act and Regulation
on an arm’s length basis. During the year, the Company has not
16[b] of the Listing Regulations from the Independent
entered into any transactions with the related parties which could
Directors confirming that they are not disqualified from
be considered as material in accordance with the policy of the
continuing as an Independent Director.
Company on materiality of related party transactions.
iv. Profile of Directors seeking appointment / reappointment:
The Policy on materiality of related party transactions and dealing
As required under Regulation 36[3] of the Listing Regulations,
with related party transactions as approved by the Board may
particulars of the Directors seeking appointment /
be accessed on the Company’s website at the link: http://www.
reappointment at the ensuing Annual General Meeting
zyduswellness.in/investor/Policy%20on%20Related%20Party%20
are annexed to the notice convening Twenty Third Annual
Transactions-May15.pdf.
General Meeting.
Disclosures on related party transactions are set out in Note No. 41
v. Key Managerial Personnel:
to the financial statements.
The following persons are the Key Managerial Personnel
Directors: [KMP]:
i. Resignation / Appointment of Independent Directors: 1. Mr. Tarun G. Arora, Whole Time Director,
Dr. B. M. Hegde [DIN–00128203], an Independent Director
2. Mr. Amit B. Jain, Chief Financial Officer, and
resigned as a Director of the Company w.e.f. October 11,
3. Mr. Dhaval N. Soni, Company Secretary.
2016. Dr. B. M. Hegde also ceased to be the member of the
Committees of the Board in which he was a member. There is no change in the KMP during the year.

The Board has appointed Mr. Kulin S. Lalbhai [DIN–05206878] vi. Board Evaluation:
as an Additional Independent Director of the Company Pursuant to the provisions of the Act and Rules made

30 | Zydus Wellness Limited

 thereunder and as provided under Schedule IV of the Act and effectively, and
the Listing Regulations, the Nomination and Remuneration
vi. that the systems to ensure compliance with the provisions of
Committee / Board has carried out the annual performance
all applicable laws were in place and adequate and operating
evaluation of itself, the Directors individually as well as the
effectively.
evaluation of its committees. The manner in which the
evaluation was carried out is provided in the Corporate Board Meetings:
Governance Report, which is a part of this Annual Report. Information of meetings of the Board of Directors is given in
Corporate Governance Report, forming part of this report.
vii. Nomination and Remuneration Policy:
The Board has on the recommendations of the Nomination Audit Committee:
and Remuneration Committee [NRC], framed a Policy As provided in section 177[8] of the Act, the information about
on selection and appointment of Director(s), Senior composition of Audit Committee and other details are given in
Management Personnel and their remuneration. During Corporate Governance Report forming part of this report. The
the year, the NRC was reconstituted. The NRC comprises of Board has accepted the recommendations of Audit Committee.
Mr. Humayun Dhanrajgir, as Chairman, Dr. Sharvil P. Patel, During the year, the Audit Committee was reconstituted. The
Prof. Indiraben J. Parikh, Mr. Ganesh N. Nayak and Mr. Kulin S. Audit Committee comprises of Mr. Humayun Dhanrajgir, as
Lalbhai as members. Chairman, Prof. Indiraben J. Parikh, Mr. Ganesh N. Nayak and
Mr. Kulin S. Lalbhai as members.
The Nomination and Remuneration Policy is stated in the
Corporate Governance Report, which is a part of this Annual Composition of other Committees:
Report. Composition of other Committees and other details on the
Committees are given in the Corporate Governance Report.
Directors’ Responsibility Statement:
In terms of section 134[3][c] of the Act and to the best of their Corporate Governance:
knowledge and belief, and according to the information and The Company has complied with the Corporate Governance
explanations provided to them, your Directors hereby make the requirements under the Act and as stipulated under the Listing
following statements: Regulations. A separate section on detailed report on the
Corporate Governance practices followed by the Company under
i. that in preparation of the Financial Statements, the applicable
the Listing Regulations along with a certificate from a Practicing
accounting standards have been followed along with proper
Company Secretary, confirming the compliance forms part of this
explanation relating to material departures, if any,
Annual Report.
ii. that such accounting policies have been selected and applied
Auditors:
consistently and judgments and estimates made that are
i. Statutory Auditors and their Report:
reasonable and prudent so as to give a true and fair view of
M/s. Dhirubhai Shah & Doshi, Chartered Accountants, [Firm
the state of affairs of the Company as on March 31, 2017 and
Registration No. 102511W] were appointed as Statutory
of the profit of the Company for the year ended on that date,
Auditors from the conclusion of Twenty First Annual General
iii. that proper and sufficient care has been taken for Meeting until the conclusion of Twenty Sixth Annual General
maintenance of adequate accounting records in accordance Meeting. They have informed to the Company that their
with the provisions of the Act for safeguarding the assets of appointment, if made, would be within the limits prescribed
the company and for prevention and detection of fraud and under section 141 of the Act. They have also furnished a
other irregularities, declaration confirming their independence as well as their
arm’s length relationship with the Company and that they
iv. that the Financial Statements have been prepared on a going
have not taken up any prohibited non-audit assignments for
concern basis,
the Company.
v. that proper internal financial controls were in place and
The Board has duly reviewed the Auditor’s Report and the
that the financial controls were adequate and operating

Annual Report 2016-17 | 31

 observations and comments, appearing in the report Pursuant to the provisions of section 135 of the Act and Rules made
are self-explanatory and do not call for any further thereunder, the Board has constituted a CSR Committee under
explanation / clarification by the Board in their Report as the Chairmanship of Dr. Sharvil P. Patel. The other members of the
provided under section 134 of the Act. Committee are Mr. Ganesh N. Nayak and Prof. Indiraben J. Parikh. A
CSR Policy has been framed and placed on the Company’s website.
ii. Cost Auditors:
Other details of the CSR activities, as required under section 135 of
Pursuant to the provisions of section 148[3] of the Act read
the Act, are given in the CSR Report as Annexure–“B”.
with Companies [Cost Records and Audit] Amendment
Rules, 2014 as amended from time to time, the cost audit Business Risk Management:
records maintained by the Company in respect of its product A well-defined risk management mechanism covering the risk
‘Nutralite’ is required to be audited by a Cost Auditor. The mapping and trend analysis, risk exposure, potential impact and
Board has, on the recommendation of Audit Committee, risk mitigation process is in place. The objective of the mechanism
appointed M/s. Dalwadi & Associates, Cost Accountants [Firm is to minimize the impact of risks identified and taking advance
Registration No. 000338] to audit the cost records of the actions to mitigate them. The mechanism works on the principles
Company for the financial year ending on March 31, 2018 on of probability of occurrence and impact, if triggered. A detailed
a remuneration of Rs. 2.25 Lakhs. exercise is being carried out to identify, evaluate, monitor and
manage both business and non-business risks.
As required under the Act and Rules made thereunder, the
remuneration payable to the Cost Auditors is required to Discussions on risks and concerns are covered in the Management
be placed before the Members at a general meeting for Discussion and Analysis Report, which forms part of this Annual
ratification. Accordingly, a resolution seeking ratification of Report.
the remuneration payable to M/s. Dalwadi & Associates by the Internal Control System and their adequacy:
members is included at Item No. 5 of the Notice convening The Company has Internal Control Systems, commensurate with
Twenty Third Annual General Meeting. the size, scale and complexity of its operations. The Internal Audit
iii. Secretarial Auditors and Secretarial Audit Report: Department monitors and evaluates the efficacy and adequacy
Pursuant to the provisions of section 204 of the Act and the of internal control systems in the Company, its compliances with
Companies [Appointment and Remuneration of Managerial operating systems, accounting procedures and policies within
Personnel] Rules, 2014, the Board has appointed M/s. Hitesh the Company. Based on the report of internal audit function,
Buch & Associates, a firm of Company Secretaries in whole process owner undertake the corrective action in their respective
time practice, to undertake Secretarial Audit of the Company areas and thereby strengthen the internal controls. Significant
for the financial year ended on March 31, 2017. The Secretarial observations and corrective actions thereon are presented to the
Audit Report is attached herewith as Annexure–“A”. The Board Audit Committee from time to time.
has duly reviewed the Auditor’s Report. Internal Financial Control and their adequacy:
The Board is of the opinion that the observations and The Company has designed and implemented a process driven
comments, appearing in the report are self-explanatory and framework for Internal Financial Controls [IFC] within the meaning
do not call for any further explanation / clarification by the of the explanation to section 134[5][e] of the Act. For the year
Board in their Report as provided under section 134 of the ended on March 31, 2017, the Board is of the opinion that the
Act. Company has sound IFC commensurate with the size, scale and
complexity of its business operations. The IFC operates effectively
Business Responsibility Report:
and no material weakness exists. The Company has a process in
As per Regulation 34[2][f ] of the Listing Regulations, a separate
place to continuously monitor the same and identify gaps, if any,
section on Business Responsibility Report forms part of this
and implemented new and / or improved controls whenever the
Annual Report.
effect of such gaps would have a material effect on the Company’s
Corporate Social Responsibility [CSR]: operations.

32 | Zydus Wellness Limited

 Annual Return in the prescribed Form No. MGT-9 is attached to
this Report as Annexure–“C”.

Particulars of Employees:
Managing the risks of fraud, corruption and unethical
The information required under section 197 of the Act read with
business practices:
Rule 5[1] of the Companies [Appointment and Remuneration of
i. Vigil Mechanism / Whistle Blower Policy:
Managerial Personnel] Rules, 2014, is given in Annexure–“D”.
The Company has established vigil mechanism and framed
whistle blower policy for Directors and employees to report Energy Conservation, Technology Absorption and
concerns about unethical behavior, actual or suspected fraud Foreign Exchange Earnings and Outgo:
or violation of Company’s Code of Conduct or Ethics Policy. Information on conservation of energy, technology absorption,
Whistle Blower Policy is disclosed on the website of the foreign exchange earnings and outgo, as required to be disclosed
Company. under section 134[3][m] of the Act read with Rule 8[3] of the
Companies [Accounts] Rules, 2014, is provided in the Annexure–
ii. Zydus Business Conduct Policy:
“E” and forms part of this Report.
The Company has framed “Zydus Business Conduct Policy”.
Every employee is required to review and sign the policy General Disclosure:
at the time of joining and an undertaking has to be given Your Directors state that the Company has made disclosures in
for adherence to the Policy. The objective of the Policy is to this report for the items prescribed in section 134[3] of the Act
conduct the business in an honest, transparent and ethical read with Rule 8[3] of the Companies [Accounts] Rules, 2014 to
manner. The policy provides for anti-bribery and avoidance the extent the transactions took place on those items during the
of other corruption practices by the employees of the year.
Company.
There are no material changes and commitments affecting
Disclosure as per the Sexual Harassment of Women at the financial position of the Company between the end of the
Workplace [Prevention, Prohibition and Redressal] Act, financial year and the date of this report.
2013:
Acknowledgement:
The Company has zero tolerance towards sexual harassment
Your Directors place on record their sincere appreciation for the
at the workplace and has adopted a policy on prevention,
continued co-operation and support extended to the Company
prohibition and redressal of sexual harassment at workplace in
by the Banks. Your Directors also thank the Trade and Consumers
line with the provisions of the Sexual Harassment of Women at
for their patronage to the Company’s products. Your Directors also
Workplace (Prevention, Prohibition and Redressal) Act, 2013 and
place on record sincere appreciation of the continued hard work
the Rules thereunder.
put in by the employees at all levels. Your Directors also thank
The Company always endeavors to create and provide conducive the Company’s vendors, investors, business associates, Stock
work environment that is free from discrimination and harassment Exchanges, Government of India, State Government and various
including sexual harassment. The Company has in place a robust departments and agencies for their support and co-operation.
policy on prevention of sexual harassment at workplace. The
policy aims at prevention of harassment of employees as well For and on behalf of the Board
as contractors and lays down the guidelines for identification,
reporting and prevention of sexual harassment.
Place: Ahmedabad Dr. Sharvil P. Patel
During the Financial Year 2016-2017, the Company has not
Date: May 27, 2017 Chairman
received any complaint of sexual harassment.

Extract of Annual Return:

As per the provisions of section 92[3] of the Act, an extract of the

Annual Report 2016-17 | 33

ANNEXURE–“A” TO THE
Directors Report
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2017
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To,
The Members,
Zydus Wellness Limited

We have conducted the secretarial audit of the compliance the Securities and Exchange Board of India Act, 1992 (‘SEBI
of applicable statutory provisions and the adherence to good Act’):
corporate practices by Zydus Wellness Limited (hereinafter called (i) The Securities and Exchange Board of India (Substantial
the Company). Secretarial Audit was conducted in a manner Acquisition of Shares and Takeovers) Regulations, 2011
that provided us a reasonable basis for evaluating the corporate with regard to disclosures thereunder;
conducts/statutory compliances and expressing our opinion (ii) The Securities and Exchange Board of India (Prohibition
thereon. of Insider Trading) Regulations, 2015;
Based on our verification of the Company’s books, papers, minute (iii) The Securities and Exchange Board of India (Issue of
books, forms and returns filed and other records maintained Capital and Disclosure Requirements) Regulations, 2009;
by the Company and also the information provided by the (Not Applicable during the period)
Company, its officers, agents and authorized representatives (iv) The Securities and Exchange Board of India (Share based
during the conduct of secretarial audit, we hereby report that in Employee Benefits) Regulations, 2014; (Not Applicable
our opinion, the Company has, during the audit period covering during the period)
the financial year ended on 31st March 2017 complied with the
(v) The Securities and Exchange Board of India (Issue
statutory provisions listed hereunder and also that the Company
and Listing of Debt Securities) Regulations, 2008; (Not
has proper Board-processes and compliance-mechanism in place
Applicable during the period)
to the extent, in the manner and subject to the reporting made
(vi) The Securities and Exchange Board of India (Registrars
hereinafter:
to Issue and Share Transfer Agents) Regulations, 1993
1. We have examined the books, papers, minute books, forms
regarding the Companies Act and dealing with client;
and returns filed and other records maintained by the
(Not Applicable during the period)
Company for the financial year ended on 31st March, 2017,
according to the provisions of: (vii) The Securities and Exchange Board of India (Delisting of
(i) The Companies Act, 2013 (the Act) and the rules made Equity Shares) Regulations, 2009; (Not Applicable during
thereunder; the period) and
(ii) The Securities Contracts (Regulation) Act, 1956 and the (viii) The Securities and Exchange Board of India (Buyback of
rules made thereunder; Securities) Regulations, 1998 (Not Applicable during the
period).
(iii) The Depositories Act, 1996 and the Regulations and Bye-
laws framed thereunder; and 3. We have relied on the representation made by the Company
(iv) Foreign Exchange Management Act, 1999 and the and its Officers for the systems and mechanism formed by
rules and regulations made thereunder to the extent of the Company for compliances under other general laws and
Foreign Direct Investment, Overseas Direct Investment regulations applicable to the Company.
and External Commercial Borrowings. 4. The Company has complied with Food Safety and Standards
2. The following Regulations and Guidelines prescribed under Act, 2006 and Legal Metrology Act, 2009 which are specifically
applicable to the Company.
34 | Zydus Wellness Limited
5. We have also examined compliance with the applicable Adequate notices are given to all directors to schedule the Board
clauses of the following: Meetings, agenda and detailed notes on agenda were sent at
(i) Secretarial Standards with regard to Meeting of Board of least seven days in advance, and a system exists for seeking and
Directors (SS-1) and General Meetings (SS-2) issued by obtaining further information and clarifications on the agenda
The Institute of Company Secretaries of India and made items before the meeting and for meaningful participation at the
effective from 1st July 2015; meeting.
(ii) The Listing Agreements entered into by the Company Majority decision is carried through while the dissenting members’
with BSE Limited and National Stock Exchange of India views are captured and recorded as part of the minutes.
Limited for the period ended on 31st March, 2017; and
We further report that there are adequate systems and processes
(iii) The Listing Agreements entered into by the Company
in the Company commensurate with the size and operations of
with BSE Limited and National Stock Exchange of India
the Company to monitor and ensure compliance with applicable
Limited pursuant to Securities and Exchange Board of
laws, rules, regulations and guidelines.
India (Listing Obligations & Disclosure Requirements)
Regulations, 2015. We further report that during the audit period there were no
specific events / actions having a major bearing on the company’s
We further report that;
affairs.
The Board of Directors of the Company is duly constituted with
proper balance of Executive Directors, Non-Executive Directors For, Hitesh Buch & Associates
and the Independent Directors. The changes in the composition Company Secretaries
of the Board of Directors that took place during the period under Place : Ahmedabad Hitesh D. Buch
review were carried out in compliance with the provisions of the Date : May 27, 2017 Proprietor
Act. FCS No.: 3145
C P No.: 8195

ANNEXURE–1
To,
The Members,
Zydus Wellness Limited

Our Secretarial Audit Report of even date is to be read along with representation about the compliance of laws, rules and
this letter. regulations and happening of events etc.

Management’s Responsibility Disclaimer

1. It is the responsibility of the management of the Company to 4. The Secretarial Audit Report is neither an assurance as to
maintain secretarial records, devise proper systems to ensure the future viability of the Company nor of the efficacy or
compliance with the provisions of all applicable laws and effectiveness with which the management has conducted
regulations and to ensure that the systems are adequate and the affairs of the Company
operate effectively.
For, Hitesh Buch & Associates
Auditor’s Responsibility Company Secretaries
2. Our responsibility is to express an opinion on these secretarial
Place : Ahmedabad Hitesh D. Buch
records, systems, standards and procedures based on our
Date : May 27, 2017 Proprietor
audit.
FCS No.: 3145
3. Wherever required, we have obtained the management’s C P No.: 8195

Annual Report 2016-17 | 35

ANNEXURE–“B” TO THE
Directors Report
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY [CSR] ACTIVITIES
1. Brief outline of the Company’s CSR Policy, including 5. Details of CSR spent during the financial year:
overview of the projects or programs proposed to be i. Total amount to be spent during the financial year–
undertaken and a reference to a web-link to the CSR Policy Rs. 200.53 Lakhs
and projects or programs. ii. Amount unspent, if any: Nil
The Company has framed a CSR Policy in compliance with
iii. Manner in which the amount spent during the financial
the provisions of section 135 of the Act and the same is
year is detailed below:
placed on the website of the Company. Visit the web link
http://www.zyduswellness.in/investor/CSR%20Policy.pdf for CSR Project or Activity Healthcare and Education
more information on the CSR Policy. identified
Sector in which the project is Promoting education
The Company has outlined the following thrust areas in the covered and healthcare, including
CSR Policy: preventive healthcare
i) Swasthya–Health, Safety and Environment, Projects or Programs
ii) Shiksha and Sodh–Education, Knowledge Enhancement [1] Local area or other,
[2] Specify the state and district Ahmedabad, Gujarat
and Research, and
where projects or programs
iii) Saath–Social care, concern and outreach in times of were undertaken
emergencies. Amount outlay [Budget] Rs. 200.53 Lakhs
The Board of Directors, on the recommendation of CSR Project or Program wise
Committee, approved the CSR spending, apart from others, Amt. spent on the Projects or Rs. 200.53 Lakhs
on providing financial support for creating additional Programs
Sub-heads:
infrastructure / renovations and other assistance to a
[1] Direct expenditure on
Charitable Institution, which runs hospitals and medical
projects of programs,
college. The said institution provides hospital services to
[2] Overheads
the poor patients and carries out medical research. The
Cumulative expenditure up to Rs. 200.53 Lakhs
medical college provides education and other facilities to the
the reporting period
medical students. The objectives of the institution, amongst Amount spent: Gujarat Cancer Society
others, includes, to help and nurse the marginalized and Direct or through implementing
economically weaker section people of the society. Agency
2. Composition of the CSR Committee: a. Responsibility Statement:
Dr. Sharvil P. Patel – Chairman, The implementation and monitoring of Corporate Social
Mr. Ganesh N. Nayak – Member, and Responsibility [CSR] Policy, is in compliance with CSR
Prof. Indiraben J. Parikh – Member. objectives and policy of the Company.

3. Average net profits of the Company for the last three

financial years:
Rs. 10026.67 Lakhs. Dr. Sharvil P. Patel Tarun G. Arora
4. Prescribed CSR expenditure [2% of the amount as in item Chairman of CSR Committee Whole Time Director
No. 3 above]. Place: Ahmedabad
Rs. 200.53 Lakhs. Date: May 27, 2017
|
36 Zydus Wellness Limited
ANNEXURE–“C” TO THE
Directors Report
FORM NO. MGT–9
EXTRACT OF ANNUAL RETURN
As on Financial Year ended on March 31, 2017
[Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies
(Management and Administration) Rules, 2014]

I. Registration and other details

CIN L15201GJ1994PLC023490
Registration date November 1, 1994
Name of the Company Zydus Wellness Limited
Category / Sub–Category of the Company Public Limited Company having share capital
Address of the Registered Office and contact details House No. 6 & 7, Sigma Commerce Zone, Near Iscon Temple,
Sarkhej–Gandhinagar Highway, Ahmedabad–380 015.
Phone No.: +91-79–67775888;
www.zyduswellness.in
Whether listed Company Yes
Name, address and contact details of Registrar and Transfer Agent Link Intime India Private Limited
506 to 508, 5th Floor, Amarnath Business Center 1, Besides Gala
Business Center, Nr. St. Xavier’s College Corner, Off. C. G. Road,
Ellisbridge, Ahmedabad – 380 006
Phone and Fax No.: 079–2646 5179
Email: [email protected]

II. Principal Business Activities of the Company

All business activities contributing 10% or more of the total turnover of the Company shall be stated:
Name and Description of main Products / Service NIC Code of the Product / Service % to total turnover of the Company
Table Margarine 1517 100%

III. Particulars of Holding Company, Subsidiary and Associate Companies:

Holding /
% of Applicable
Name and address of the Company CIN Subsidiary /
shares held Section
Associate
Cadila Healthcare Limited
Registered Office:
L24230GJ1995PLC025878 Holding 72.08 2(46)
Zydus Tower, Satellite Cross Roads, Sarkhej–
Gandhinagar Highway, Ahmedabad–380 015.
The Company does not have any subsidiary or associate company.

Annual Report 2016-17 | 37

IV. SHAREHOLDING PATTERN [Equity Share Capital Breakup as percentage of total Equity]
i] Category–wise share holding
No. of shares held at the beginning of the year No. of shares held at the end of the year % change
Category of Shareholders % of total % of total during the
Demat Physical Total Demat Physical Total year
shares shares
A. Promoters
1. Indian
i. Individual / HUF 179292 - 179292 0.46 179292 - 179292 0.46 -
ii. Central Govt. - - - - - - - - -
iii. State Govt.[s] - - - - - - - - -
iv. Bodies Corporate 28164395 - 28164395 72.08 28164395 - 28164395 72.08 -
Sub–Total [A][1] 28343687 - 28343687 72.54 28343687 - 28343687 72.54 -
2. Foreign -
i. NRIs–Individuals - - - - - - - - -
ii. Other–Individuals - - - - - - - - -
iii. Bodies Corporate - - - - - - - - -
iv. Banks / FI - - - - - - - - -
v. Any other - - - - - - - - -
Sub–Total [A][2] - - - - - - - - -
Total shareholding of promoters [A]
28343687 - 28343687 72.54 28343687 - 28343687 72.54 -
= [A][1] + [A][2]
B. Public Shareholding
1. Institutions
i. Mutual Funds 411298 559 411857 1.05 787965 559 788524 2.02 0.97
ii. Banks / FI 1677434 - 1677434 4.29 1532355 - 1532355 3.92 (0.37)
iii. Central Govt. - - - - - - - - -
iv. State Govt.[s] - - - - - - - - -
v. Venture Capital Fund - - - - - - - - -
vi. Insurance Companies - - - - - - - - -
vii. FIIs / FPIs 2730917 46 2730963 6.99 3070713 46 3070759 7.86 0.87
viiii. Foreign Venture Capital Funds - - - - - - - - -
ix. Others [specify] - - - - - - - - -
Sub–Total [B][1] 4819649 605 4820254 12.34 5391033 605 5391638 13.80 1.46
2. Non–Institutions
i. Bodies Corporate
a. Indian 2108944 4553 2113497 5.41 1975666 4500 1980166 5.07 (0.34)
b. Overseas - - - - - - - - -
ii. Individuals
Individual shareholders holding
a. nominal share capital up to 2238510 267482 2505992 6.41 2091805 258651 2350456 6.02 (0.39)
Rs. 2 Lakhs
Individual shareholders holding
b. nominal share capital above Rs. 696539 - 696539 1.78 696539 - 696539 1.78 -
2 Lakhs

38 | Zydus Wellness Limited

IV. SHAREHOLDING PATTERN [Equity Share Capital Breakup as percentage of total Equity]
i] Category–wise share holding
No. of shares held at the beginning of the year No. of shares held at the end of the year % change
Category of Shareholders % of total % of total during the
Demat Physical Total Demat Physical Total year
shares shares
iii. Others [specify]
a. Non–Resident Indians 166866 71252 238118 0.61 143019 71146 214165 0.55 (0.06)
b. Clearing Member 18200 - 18200 0.05 13305 - 13305 0.03 (0.02)
c. Trusts 233 - 233 - 358 - 358 - -
d. Hindu Undivided Family 92449 - 92449 0.24 81775 - 81775 0.21 (0.03)
Sub–Total [B][2] 5564861 343287 5908148 15.12 5002467 334297 5336764 13.66 (1.46)
Total Public Shareholding [B] =
10384510 343892 10728402 27.46 10393500 334902 10728402 27.46 -
[B][1] + [B][2]
C. Shares held by Custodians for
- - - - - - - - -
GDRs & ADRs
Grand Total [A+B+C] 38728197 343892 39072089 100.00 38737187 334902 39072089 100.00 -

ii] Shareholding of Promoters

Shareholding at the beginning of the year Shareholding at the end of the year
% of shares % of shares % change in
Sr. % of total % of total
Shareholder’s Name pledged / pledged / shareholding
No. No. of shares No. of shares
encumbered encumbered during the
shares of the shares of the year
to total to total
Company Company
shares shares
1. Cadila Healthcare Limited 28163755 72.08 - 28163755 72.08 - -
2. Zydus Family Trust 174495 0.45 - 174495 0.45 - -
3. Pripan Investment Pvt. Ltd. 640 - - 640 - - -
4. Shivani Pankajbhai Patel jointly 533 - - 533 - - -
Pankaj Ramanbhai Patel
5. Pankaj Ramanbhai Patel Jointly 533 - - 533 - - -
Pritiben Pankajbhai Patel
6. Pankaj Ramanbhai Patel jointly 533 - - 533 - - -
Pritiben Pankajbhai Patel
[R. B. Patel Will Pankaj Trust]
7. Pankaj Ramanbhai Patel [HUF] 533 - - 533 - - -
8. Pankaj Ramanbhai Patel jointly 533 - - 533 - - -
Sharvil Pankajbhai Patel
[P. R. Patel Smaller Trust]
9. Pritiben Pankajbhai Patel jointly 533 - - 533 - - -
Pankaj Ramanbhai Patel
10. Pankaj Ramanbhai Patel jointly - - - 533 - - -
Sharvil Pankajbhai Patel
[Taraban Patel Family Will Trust]
11. Ramanbhai B. Patel (HUF) 533 - - 533 - - -
12. Sharvil Pankajbhai Patel 533 - - 533 - - -
13. Taraben Ramanbhai Patel jointly 533 - - - - - -
Pankaj Ramanbhai Patel
Total 28343687 72.54 - 28343687 72.54 - -

Annual Report 2016-17 | 39

iii] Change in Promoters’ Shareholding [Please specify, if there is no change]
Shareholding at the beginning of the Cumulative shareholding during the
year year
% of total shares % of total shares
No. of Shares No. of Shares
of the Company of the Company
At the beginning of the year
Date wise Increase / Decrease in Promoters’
shareholding during the year specifying the reasons
No change during the year
for increase / decrease [e.g. allotment / transfer /
bonus / sweat equity, etc.]
At the end of the year

iv] Shareholding Pattern of top ten shareholders [other than Directors, Promoters and holders of GDRs and ADRs]:
Date wise increase / decrease
Sr. Cumulative % of total
Name of the Shareholder Increase / % of total
No. Date shareholding share capital
Decrease share capital
1. Matthews India Fund At the beginning of the year 1670471 4.28
Changes in the holdings as per the beneficiary
At the end of the year 1670471 4.28
position downloaded from the Depositories.
2. Life Insurance Corporation of India At the beginning of the year 1597231 4.09
Changes in the holdings as per the beneficiary 12.08.2016 -150000 -0.39 1447231 3.70
position downloaded from the Depositories. 19.08.2016 -28640 -0.07 1418591 3.63
26.08.2016 -335 - 1418256 3.63
30.09.2016 -26590 -0.07 1391666 3.56
07.10.2016 -22167 -0.05 1369499 3.51
14.10.2016 -1165 -0.01 1368334 3.50
21.10.2016 -100478 -0.26 1267856 3.24
11.11.2016 -1082 - 1266774 3.24
02.12.2016 -27999 -0.07 1238775 3.17
At the end of the year 1238775 3.17
3. Prazim Trading and Investment Co. Pvt. Ltd. At the beginning of the year - -
Changes in the holdings as per the beneficiary 30.12.2016 238302 0.61 238302 0.61
position downloaded from the Depositories. 24.03.2017 585702 1.50 824004 2.11
At the end of the year 824004 2.11
4. Baring India Private Equity Fund III Listed At the beginning of the year 648408 1.66
Investments Limited
Changes in the holdings as per the beneficiary At the end of the year 648408 1.66
position downloaded from the Depositories.

5. Tarish Investment and Trading Co. Pvt. Ltd. At the beginning of the year - -
Changes in the holdings as per the beneficiary 30.12.2016 574917 1.47 574917 1.47
position downloaded from the Depositories. At the end of the year 574917 1.47

40 | Zydus Wellness Limited

iv] Shareholding Pattern of top ten shareholders [other than Directors, Promoters and holders of GDRs and ADRs]: [continue:]
Date wise increase / decrease
Sr. Cumulative % of total
Name of the Shareholder Increase / % of total
No. Date shareholding share capital
Decrease share capital
6. Reliance Capital Trustee Co. Ltd-A/c Reliance At the beginning of the year - -
Small Cap Fund 12.08.2016 50000 0.13 50000 0.13
Changes in the holdings as per the beneficiary 19.08.2016 100109 0.25 150109 0.38
position downloaded from the Depositories. 21.10.2016 75000 0.20 225109 0.58
28.10.2016 25000 0.06 250109 0.64
11.11.2016 6661 0.02 256770 0.66
18.11.2016 3260 0.01 260030 0.67
25.11.2016 16350 0.04 276380 0.71
02.12.2016 28900 0.07 305280 0.78
27.01.2017 12800 0.03 318080 0.81
03.02.2017 8400 0.03 326480 0.84
17.02.2017 3900 0.01 330380 0.85
24.02.2017 300 - 330680 0.85
03.03.2017 13750 0.03 344430 0.88
10.03.2017 11175 0.02 355605 0.91
17.03.2017 8750 0.02 364355 0.93
24.03.2017 30775 0.08 395130 1.01
31.03.2017 13925 0.04 409055 1.05
At the end of the year 409055 1.05
7. Parag Parikh Long Term Value Fund At the beginning of the year 371395 0.95
Changes in the holdings as per the beneficiary 30.06.2016 334 - 371729 0.95
position downloaded from the Depositories. At the end of the year 371729 0.95
8. Akash Bhanshali At the beginning of the year 364000 0.93
Changes in the holdings as per the beneficiary
At the end of the year 364000 0.93
position downloaded from the Depositories.
9. General Insurance Corporation of India At the beginning of the year 288029 0.74
Changes in the holdings as per the beneficiary
At the end of the year 288029 0.74
position downloaded from the Depositories.
10. Baring India Private Equity Fund II Limited At the beginning of the year 216221 0.55
Changes in the holdings as per the beneficiary
At the end of the year 216221 0.55
position downloaded from the Depositories.

Annual Report 2016-17 | 41

v] Shareholding of Directors and Key Managerial Personnel:
A. Directors [other than KMP]:
Dr. Sharvil Ganesh N. Humayun Kulin S. Prof. Indira
Particulars
P. Patel Nayak Dhanrajgir Lalbhai J. Parikh
At the beginning of the year:
• Number of Shares 533 6550 - - -
• % of total shares held - 0.017 - - -
Date wise increase / decrease in shareholding: - - - - -
At the end of the year:
• Number of Shares 533 6550 - - -
• % of total shares held - 0.017 - - -

B. Key Managerial Personnel:

Amit B. Jain,
Tarun G. Arora, Dhaval N. Soni,
Particulars Chief Financial
Whole Time Director Company Secretary
Officer
At the beginning of the year:
• Number of Shares 200 - -
• % of total shares held - - -
Date wise increase / decrease in shareholding: - - -
At the end of the year:
• Number of Shares 200 - -
• % of total shares held - - -

V] INDEBTEDNESS
Indebtedness of the Company including interest outstanding / accrued but not due for payment [INR-Lakhs]
Secured Loans Unsecured Total
Name and Address of the Company Deposits
excluding deposits Loans Indebtedness
Indebtedness at the beginning of the financial year
i. Principal Amount - - - -
ii. Interest due but not paid - - - -
iii. Interest accrued but not due - - - -
Change in indebtedness during the financial year
i. Addition - 2500 - 2500
ii. Reduction - - - -
Net Change - 2500 - 2500
Indebtedness at the end of the financial year
i. Principal Amount - 2500 - 2500
ii. Interest due but not paid - - - -
iii. Interest accrued but not due - 8 - 8
Total [i+ii+iii] - 2508 - 2508

42 | Zydus Wellness Limited

VI] REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing / Whole Time Director: [INR-Lakhs]
Sr. Tarun G. Arora,
Particulars of Remuneration
No. Whole Time Director
1. Gross Salary
a. Salary as per provisions contained in section 17[1] of the Income Tax Act, 1961. 219.96
b. Value of perquisites u/s 17[2] of the Income Tax Act, 1961. 0.29
c. Profits in lieu of salary under section 17[3] of Income Tax Act, 1961. -
2. Stock Option -
3. Sweat Equity -
4. Commission -
- as % of profit
- others, specify
5. Others, please specify -
Total [A] 220.25
Ceiling as per the Act 555.00

B. Remuneration to other Directors:

1. Independent Directors: [INR-Lakhs]
Name of Directors
Sr.
Particulars of Remuneration Humayun Total
No. B. M. Hegde Indira J. Parikh Kulin S. Lalbhai
Dhanrajgir
1. Fee for attending Board & Committee Meetings 8.00 2.50 7.50 0.50 18.50
2. Commission 5.00 5.00 5.00 5.00 20.00
3. Others, please specify - - - - -
Total [B] [1] 13.00 7.50 12.50 5.50 38.50

2. Non–Executive Directors: [INR-Lakhs]

Name of Directors
Sr.
Particulars of Remuneration Dr. Sharvil Ganesh Total
No.
P. Patel N. Nayak
1. Fee for attending Board & Committee Meetings 5.00 8.50 13.50
2. Commission - - -
3. Others, please specify - - -
Total [B] [2] 5.00 8.50 13.50
Total [B][1] + [B][2] 52.00

Annual Report 2016-17 | 43

C. Remuneration to Key Managerial Personnel other than Managing Director / Manager / Whole Time Director [INR-Lakhs]
Sr. Key Managerial Personnel
Particulars of Remuneration Total
No. Amit B. Jain, CFO Dhaval N. Soni, CS
1. a. Salary as per provisions contained in section 17[1] of the Income
32.46 12.08 44.54
Tax Act, 1961.
b. Value of perquisites u/s 17[2] of the Income Tax Act, 1961. 2.40 0.02 2.42
c. Profits in lieu of salary under section 17[3] of Income Tax Act,
- - -
1961.
2. Stock Option - - -
3. Sweat Equity - - -
4. Commission - - -
- as % of profit - - -
- others, specify - - -
5. Others, please specify - - -
Total [C] 34.86 12.10 46.96

VII] PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:

Details of
Section of the penalty / Authority Appeal made,
Brief
Type Companies punishment / [RD / NCLT / if any [give
Description
Act compounding Court] details]
fees imposed
A. Company
Penalty
None
Punishment
Compounding
B. Directors
Penalty
None
Punishment
Compounding
C. Other officers in default
Penalty
None
Punishment
Compounding

For and on behalf of the Board

Place: Ahmedabad Dr. Sharvil P. Patel

Date: May 27, 2017 Chairman

44 | Zydus Wellness Limited

 ANNEXURE–“D” TO THE
Directors Report
Details pertaining to remuneration as required under section 197[12] of the Companies Act, 2013 read with Rule 5[1] of the
Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014.

a. The ratio of remuneration of each Director to the median remuneration of the employees of the Company for the financial year:
Name of the Director Ratio of each Director to the median remuneration of the employee
Dr. Sharvil P. Patel Not applicable as no Managerial Remuneration was paid.
Mr. Humayun Dhanrajgir 111.11%
Dr. B. M. Hegde 111.11%
Prof. Indiraben J. Parikh 111.11%
Mr. Ganesh N. Nayak Not applicable as no Managerial Remuneration was paid.
Mr. Tarun G. Arora 12%
Mr. Kulin Lalbhai* Not applicable
* appointed as an Additional Director [Independent] w.e.f. November 18, 2016.

b. The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary in the financial year:
Name of the Director, Chief Financial Officer and % increase in the remuneration in the financial year
the Company Secretary
Dr. Sharvil P. Patel Not applicable as no Managerial Remuneration was paid.
Mr. Humayun Dhanrajgir 11.11%
Dr. B. M. Hegde 11.11%
Prof. Indiraben J. Parikh 11.11%
Mr. Ganesh N. Nayak Not applicable as no Managerial Remuneration was paid.
Mr. Tarun G. Arora 12%
Mr. Kulin Lalbhai* Not applicable
Mr. Amit B. Jain, Chief Financial Officer 21%
Mr. Dhaval N. Soni, Company Secretary 9%
* appointed as an Additional Director [Independent] w.e.f. November 18, 2016.

c. The percentage increase in the median remuneration of employees in the financial year was 18.90%.

d. There were 264 permanent employees on the roll of the Company as on March 31, 2017.

e. The profits before tax on a like-to-like basis, for the financial year ended on March 31, 2017 increased by 4.58% and the average
increase in remuneration of employees was 11.7%.

f. The profits before tax on a like-to-like basis, for the financial year ended on March 31, 2017 increased by 4.58% and the remuneration
of Key Managerial Personnel, viz. [1] Whole Time Director, [2] Chief Financial Officer, and [3] Company Secretary increased by 12%,
21% and 9% respectively.

g. The market capitalization of the Company was Rs. 3,39,654 Lakhs as on March 31, 2017 as against Rs. 2,90,364 Lakhs as on March 31,
2016.

Whereas, Price Earnings Ratio of the Company was 31.06 as on March 31, 2017 as against 28.55 as on March 31, 2016.
Annual Report 2016-17 | 45
h. The Company came out with Initial Public Offer in October, 1995 at a price of Rs. 10/- per share. The market price of the share as on
March 31, 2017 was Rs. 869.30 on BSE Limited and Rs. 871.35 on the National Stock Exchange of India Limited. The increase in price
is 8693%, apart from the dividend received by the shareholders.

i. The average annual increase in the salaries of the employees, other than managerial personnel was 11.70%, whereas the average
increase in the managerial remuneration was 14% for the financial year.

j. The members have, at the Annual General Meeting of the Company held on July 29, 2015 approved the payment of commission
to the Independent Directors within the ceiling of 1% of the Net Profits of the Company, subject to maximum of Rs. 100 Lakhs in
aggregate, as computed under the applicable provisions of the Act. The said commission is decided each year by the Board of
Directors and distributed amongst the Independent Directors.

k. There was no employee receiving remuneration higher than the highest paid Director during the financial year.

l. The Company affirms remuneration is as per the Nomination and Remuneration Policy of the Company.

m. 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 a separate annexure forming part of this
report. In terms of section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any
shareholder interested in obtaining a copy of the same may write to the Company Secretary.

46 | Zydus Wellness Limited

ANNEXURE–“E” TO THE
Directors Report
Information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as provided
under section 134[3][m] of the Companies Act, 2013 read with Rule No. 8 of the Companies [Accounts] Rules, 2014

A. Conservation of Energy:
1. Steps taken or impact on conservation of energy None
2. Steps taken for utilization of alternate sources of energy Use of Biomass Briquettes instead of Wood as boiler fuel.
3. Capital Investment on energy conservation equipments Nil

B. Technology absorption:
1. Efforts made towards technology absorption Not Applicable
2. Benefits derived Not Applicable
3. Details of technology imported in last three years
a. Details of technology imported Nil
b. Year of import Not Applicable
c. Whether the technology been fully absorbed Not Applicable
d. If not fully absorbed, areas where absorption has not taken
Not Applicable
place, and the reasons thereof
4. Expenditure incurred on Research and Development Rs. 109.83 Lakhs

C. Foreign exchange earnings and outgo:

During the year, the foreign exchange in terms of actual outflows was Rs. 36 Lakhs.

For and on behalf of the Board

Place: Ahmedabad Dr. Sharvil P. Patel

Date: May 27, 2017 Chairman

Annual Report 2016-17 | 47

Business Responsibility Report
The Directors present the Business Responsibility Report of the Company for the financial year ended on March 31, 2017.
Section A [General Information about the Company]:
1. Corporate Identity Number (CIN) of the Company L15201GJ1994PLC23490
2. Name of the Company Zydus Wellness Limited
3. Address of the Registered Office of the Company House No. 6 & 7, Sigma Commerce Zone,
Sarkhej-Gandhinagar Highway,
Ahmedabad – 380 015
4. Website www.zyduswellness.in
5. Email id [email protected]
6. Financial year reported 2016-17
7. Sector(s) that the Company is engaged in (industrial activity code-wise):
Group Class Sub Class Description
1517 Manufacturing and Marketing of Margarine and Table Spread.
8. Key products / Services The Company manufactures and markets health and wellness products.
9. Locations where business activity is undertaken by The Company’s business and operations are based at Ahmedabad,
the Company where the manufacturing is carried out, details whereof are provided in
this annual report. Details of business performance in Indian markets as
well as International markets are reported as a part of the Management
Discussion and Analysis Report, which forms part of this Annual Report.
10. Markets served by the Company – Local / State/ As a strong player in health and wellness space in India.
National

Section B [Financial Details of the Company]:

Paid-up Capital (INR) 3,907 Lakhs
Total turnover (INR) 11,477 Lakhs*
Total profit after taxes (INR) [After OCI] 10,919 Lakhs
*Net of sales promotions.

List of activities in which expenditure on CSR has been incurred and total spending as a percentage of profits after tax:
The Company has spent Rs. 200.53 Lakhs towards Corporate Social Responsibility [CSR], being 2% of average net profit for previous three
years, computed as prescribed under the Companies Act, 2013 on education and healthcare, including preventive healthcare. Annual
Report on CSR activities is attached to the Directors’ Report.
The Company is a strong player in health and wellness space in India.
Section C [Other Details]:
Sr. No. Details Information
1 Does the Company have any Subsidiary Company/Companies? No
2 Do the Subsidiary Company / Companies participate in the BR initiatives of the parent Company? If yes, Not applicable
then indicate the number of such subsidiary company (ies).
3 Do any other entity/entities (e.g. suppliers, distributors, etc.) that the Company does business with, No
participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities
(less than 30%, 30-60%, more than 60%

48 | Zydus Wellness Limited

Section D [BR Information]:
1. Details of Director / Directors responsible for BR:
a) Details of the Director / Directors responsible for implementation of the BR Policy / policies:
Sr. No. Particulars Details
1 DIN Number (if applicable) 07185311
2 Name Mr. Tarun G. Arora
3 Designation Whole Time Director

b) Details of the BR head:

Sr. No. Particulars Details
1 DIN Number (if applicable) Not Applicable
2 Name Mr. Dhaval N. Soni
3 Designation Company Secretary and Compliance Officer
4 Telephone Number 079 – 268 68 100
5 E-mail ID [email protected]

2. Principle-wise (as per NVGs) BR Policy / Policies:

Alignment to National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs)

NVG Principle Chapter in BR Report Page No. Details in Annual

Report
Business should conduct and govern themselves with Corporate Governance 52 Yes
Ethics, Transparency and Accountability. Structure
Business should provide goods and services that are Quality Principles and Credo 52 Yes
safe and contribute to sustainability throughout their for Value Creation
life cycle.
Businesses should promote the well-being of all Building people to build our 52 Yes
employees. business
Businesses should respect the interest of, and be Zydus Shrishti 53 Yes
responsive towards all stakeholders, especially those
who are disadvantaged, vulnerable and marginalized.
Businesses should respect and promote human rights. Human Rights 53 Yes
Businesses should respect, protect, and make efforts to Green Impact 53 Yes
restore the environment.
Business, when engaged in influencing public and Policy advocacy 53 Yes
regulatory policy, should do so in a responsible manner.
Business should support inclusive growth and Zydus Shrishti 53-54 Yes
equitable development.
Business should engage with and provide value to their The Zydus Way manufacturing 54 Yes
customers and consumers in a responsible manner. and marketing of consumer
products

Annual Report 2016-17 | 49

3. Principle-wise [as per NVGs] BR Policy / Policies:
a) Details of compliance [Reply in Y/N]:
No. Questions

Product Responsibility

Customer Relations
Engagement & CSR
Business Ethics

Human Rights

Environment
Wellbeing of

Public Policy
Stakeholder
Employees

CSR
P1 P2 P3 P4 P5 P6 P7 P8 P9

1 Do you have a policy /

Y Y Y Y Y1 Y N Y Y
policies for?
2 Has the policy been
formulated in consultation
Y Y Y Y Y Y - Y Y
with the relevant
stakeholders?
3 Does the policy conform to
The Company is abiding by the various laws and while framing the policies, the Company takes into
any national / international
account the best practices and national standards.
standards?
4 Has the policy been
approved by the Board?
If yes, has it been signed
Y Y2 Y3 Y N Y N Y Y4
by MD / Owner / CEO
/ appropriate Board
Director?
All statutory policies are approved by the Board of Directors, whereas other policies are signed by the Chairman or the respective
business head.
5 Does the Company have
a specified committee
of the Board / Director
Y Y Y Y Y Y N Y Y
/ Official to oversee the
implementation of the
policy?
The policies are implemented and being reviewed regularly by the respective business head.
6 Indicate the link for the
www.zyduswellness.in
policy to be viewed online?
7 Has the policy been Yes, all the policies are communicated to the employees via internal portal, where each employee
formally communicated has an access and the external stakeholders through Company’s website www.zyduswellness.in
to all relevant internal and
external stakeholders?

50 | Zydus Wellness Limited

 No. Questions

Customer Relations
Engagement & CSR
Business Ethics

Human Rights
Responsibility

Environment
Wellbeing of

Public Policy
Stakeholder
Employees
Product

CSR
P1 P2 P3 P4 P5 P6 P7 P8 P9

8 Does the Company have

in-house structure to
Y Y Y Y Y Y - Y Y
implement the policy /
policies?
9 Does the Company have Yes, respective Head of the Department attends to any grievances pertaining to their department
a grievance redressal and address the grievances. The Company has formed a Investors’ / Stakeholders’ Relationship
mechanism related to the Committee to redress any grievances of shareholders and investors. Company also has a dedicated
policy / policies to address Customer Relationship Cell to address customer related grievances.
stakeholders’ grievances
related to the policy /
policies?
10 Has the Company carried The Company regularly carries out an independent audit on working of policy on Environment.
out independent audit/ CSR expenditure is also audited by the Company’s statutory auditors.
evaluation of the working
of this policy by an internal
or external agency?

1. The Policy is embedded in the Company’s Code of Conduct, HR policies and various other HR practices.
2. The Policy is embedded in the Company’s Quality and Environmental Policies, which interalia relate to safe and sustainable
products.
3. The policies for the wellbeing of employees are for internal circulation to the employees and approved by the Board of Directors.
4. The Company fulfills the requirements by introducing innovative products and services. The Company has a customer complaint
redressel system.

b) If answer to the questions at serial number 1 against any principle, is “No”, please explain why:
In the table under [a] above, the Company does not have policy under Principle 7 with respect to public policy, though the
Company understand the principle, but the Company indirectly raises its voice through FICCI, Industry Associations, etc.

4. Governance related to BR:

a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of
the Company. Within 3 months, 3-6 months, Annually, more than 1 year.
The BR performance of the Company is regularly monitored by the Company and reviewed by the Chairman and respective
departmental heads.

b) Does the Company publish BR or sustainability Report? What is the hyperlink for viewing this report? How frequently it is
published?
The BR Report has become applicable to the Company from this financial year only. The Company shall publish BR Report as a
part of Annual Report. The BR Report is posted on the Company’s website www.zyduswellness.in

Annual Report 2016-17 | 51

Section E [Principle-wise Performance]: The waste generated in the Company’s manufacturing operations
Principle 1: [Business should conduct and govern themselves is either reuse/recycled, wherever possible or disposed of safely.
with Ethics, Transparency and Accountability]: Company’s manufacturing facility has its own Effluent Treatment
The Company firmly believes and adheres to transparent, fair and Plant, which ensures discharge of waste below the norms
ethical governance practices. prescribed by the pollution control board.

The Board of Directors has approved a Code of Business Important raw materials and solvents are recovered and reused.
Conduct and Ethics, which is applicable to all Board Members It is a part of operational management.
and employees of the Company. This is reviewed and reported
Principle 3: [Businesses should promote the well-being of all
annually. The company also has a Whistle Blower Policy / Vigil
employees]:
Mechanism approved by the Board and is applicable to all
1. Please indicate the total number of employees and the
employees / Directors of the Company. Further, our major
number of contractual employees, woman employees and
suppliers are also required to agree and to conform to the code of
permanent employees with disabilities:
responsible business conduct. The Company has also prescribed
a Code of Ethics for its employees, which is very detailed and The Company does not discriminate among existing
every employee has to sign and affirm its compliance. Though employees or during the process of recruitment on the
the Code of Business Conduct and Ethics for Directors and Senior grounds of religion, race, color, gender and disability. The
Management Personnel is posted on the Company’s website, the Company provides equal opportunities to all employees. Key
internal code of conduct is available on internal portal, which is employee data as on March 31, 2017 is provided in the below
accessible to all employees. table.
Sr. Category of Employees No. of
Details relating to shareholders’ complaints are provided in
No. Employees
Corporate Governance Report, which is a part of this Annual
1 Management staff 69
Report. However, there was no stakeholder complaint in the
2 Marketing field staff 127
reporting period with regard to ethics, bribery and corruption.
3 Others 68
Principle 2: [Businesses should provide goods and services that
4 Total 264
are safe and contribute to sustainability throughout their life
5 Contractual employees 202
cycle]:
6 Permanent Woman employees 4
The Company’s manufacturing facility is accredated by the
7 Permanent employees with disabilities 0
leading agencies in India. The accreditation were given after a
thorough audit of standard operating procedures and protocols. 2. The Company does not have a recognised employees
Hence utmost care is taken to ensure that products conform association. The Company has not received any complaint
to stringent quality standards and stability of products is also relating to child labour, forced labour, involuntary labour and
submitted during the periodic audits. sexual harassment during the year gone by.

The Company has identified approved vendors for procuring 3. The permanent and contractual employees at the Company’s
materials and a Standard Operating Procedure is in place manufacturing site and corporate office are provided training
for sourcing raw materials. This includes sample approvals, on relevant Environment, Health and Safety aspects. Further
performance trials, plant audit and regulatory clearances. Majority all other employees are given soft skills up-gradation training
procurement of materials is from the approved manufacturers. to improve their skills as may be relevant to the respective
functions. 127 employees were imparted training for skill
The Company procures goods and services from the local and
development, EHS, etc. from the total strength.
small producers for its manufacturing premises and offices. It
improves operational efficiency and helps save on transportation
costs, inventory management and helps in risk mitigation.

52 | Zydus Wellness Limited

Principle 4: [Business should respect the interests of, and be been complying the relevant requirements prescribed under
responsive towards all stakeholders, especially those who are the environmental laws. Though, the Company’s manufacturing
disadvantaged, vulnerable and marginalized]: facility does not consume more energy, the Company has
The Company has mapped its internal and external stakeholders. Effluent Treatment Plant, which treats the polluted waste and
The Company recognizes its employees, business associates, dispose of such waste within the norms prescribed by the
suppliers, vendors, NGOs, communities, shareholders / investors, Pollution Control Board. The Company follows all the standards
regulatory authorities and other governmental bodies and for Employees’ Health and Safety as may be prescribed for a
intermediaries as our key stakeholders. group. There is a centralized EHS Cell, both at a group level and
at a Plant. The Company harvests the rain water and implements
The Company has also identified disadvantaged, vulnerable
energy efficient techniques towards its contribution for green
and marginalized stakeholders. The Company works actively
environment. At a group level, there is a dedicated portal on
to enhance the employability of youth, leading to income
“Emmplyees’ Health and Safety” for stringent monitoring. All
generation and economic empowerment in the marginalized
documents are required to be posted on the portal and are being
section of the communities.
vouched from compliance perspective. Various guidelines, SOPs,
The Company invests in shop floor workers’ skill development checklists, etc. are regularly posted for updating the emplyees.
and upgradation, health check-ups and ensures other quality of Further, at regular intervals, the seminars, group meetings, etc. are
life parameters. The Company has processes in place to ensure organized for awareness amongst the employees.
upholding of the rights of its employees and protect them
Principle 7: [Businesses, when engaged in influencing public
against any form of discrimination.
and regulatory policy, should do so in a responsible manner]:
Principle 5: [Businesses should respect and promote human The Company and group is a member of following Chambers
rights]: and Associations:
The Company is committed to promote the human rights
A. Federation of Indian Chambers of Commerce and Industry
and is adhered to it in spirit and deed. This extends to all areas
(FICCI), and
of business operations and various stakeholder groups. The
B. Gujarat Chamber of Commerce & Industry,
Company is also committed to provide equal opportunities at
all levels, safe and healthy workplaces and protecting human The Company interacts with Government / Regulatory Authorities
health and environment. The Company strives to provide a on any public policy framework through above institutions.
non-discriminatory and harassment-free workplace for all its The Company puts forth its views whenever new standards or
employees and contractual staff. The Factories Act, 1948 provides regulatory developments pertaining to the areas concerning
the overarching framework for the Company’s policy on human access to the best practices, corporate governance, corporate
rights for the employees working at Company’s factory. The social responsibility, etc.
Company provides equal opportunities to all its employees to
Principle 8: [Businesses should support inclusive growth and
improve their skills and capabilities. The company also has a policy
equitable development]:
in place to foster a professional, open and trusting workplace and
The Company follows CSR initiatives of the holding Company,
safeguard the interests of its women employees. The Company
that are spearheaded by Ramanbhai Foundation. Zydus
provides help to its neighboring communities to improve their
Shrishti encourages employee volunteerism and is completely
education, cultural, economic and social well-being.
an in-house effort. The team carries out initiatives in the field
There were no stakeholder complaints in the reporting period of education, health and research. The focus through these
pertaining to human rights. programs is to develop communities which we are a part of,
inclusive education and creating knowledge platforms for the
Principle 6: [Business should respect, protect and make efforts
research community.
to restore environment]:
The Company is committed to protect the environment and has In line with its policy, the Company has contributed towards

Annual Report 2016-17 | 53

 education, healthcare and social outreach programs and a Principle 9: [Businesses should engage with and provide value
majority of its CSR spending in the previous financial year has to their customers and consumers in a responsible manner]:
been in these areas. The Company has contributed to the GCS The Company displays all product information on the product
Medical College, Hospital and Research Centre which has been label, which is mandatory and as may be required for the use of
set up in public private partnership by the Gujarat Cancer the products by the consumers.
Society (GCS) and the Government of Gujarat. GCS has been
The Company never engages in any unfair trading practices,
providing comprehensive cancer care and treatment over
irresponsible advertising or anti-competitive behavior. The
the last five decades to the less privileged and economically
Company has various checks and balances to ensure that the
disadvantaged sections of the society. This makes it one of the
business of the Company is done in a fair and responsible manner.
most comprehensive and self-sustaining healthcare centers of
world class standards. GCS’ mission is to provide integratedly The Company carries out the customer satisfaction survey to
cancer care encompassing prevention, diagnosis, prognosis, measure the satisfaction among its customers.
treatment, education, rehabilitation, clinical research and after-
care at one location. A report in the prescribed format on CSR
activities carried out by the Company forms a part of this Annual
Report.

54 | Zydus Wellness Limited

Corporate Governance Report
Company’s Philosophy on Corporate Governance Code: reporting mechanism and accountability and decision
Zydus Wellness Limited believes in continuous good corporate making process to be followed.
governance and always strives to improve performance at all
Under the overall supervision and control of the Board, the
levels by adhering to corporate governance practices, such as
Whole Time Director is accountable for the overall working
managing its affairs with diligence, transparency, responsibility
of the Company. The Board gives strategic directions, lays
and accountability. We have, therefore, designed our systems and
down the policy guidelines and the Whole Time Director
action plans to enhance performance and stakeholders’ value
ensures the implementation of the decisions of the Board
in the long run. To create a culture of good governance, your
and its Committees.
Company has adopted practices that comprise of performance
accountability, effective management control, constitution The governance system encourages the entrepreneurship,
of Board Committees as a part of the internal control system, risk taking and growth orientation with an objective to lead
fair representation of professionally qualified, non-executive full accountability enabled by appropriate empowerment.
and independent Directors on the Board, adequate and 2. Board of Directors:
timely compliance, disclosure of information on performance, The Whole Time Director looks after the day-to-day business
ownership and governance of the Company and payment of affairs of the Company, the Board reviews the overall business
statutory dues. The Compliance Report on Corporate Governance operations at least once in a quarter based on updates on
herein signifies compliance of all mandatory requirements of the Company’s performance provided by the Whole Time
Corporate Governance of SEBI [Listing Obligations and Disclosure Director.
Requirements] Regulations, 2015 [the Listing Regulations].
a. Composition of the Board:
1. Governance Structure: The Composition of the Board, with reference to the
Governance structure of the Company comprises of the number of Executive and Non-Executive Directors,
Board of Directors [the Board] and the Committees of the meets with the requirements of the Code of Corporate
Board at the top level and the internal governance structure Governance. The Board is headed by the Non-Executive
at the operational level. The responsibility of the Board is Chairman, Dr. Sharvil P. Patel, who is also a promoter
to determine the overall corporate objectives and give Director. As on March 31, 2017, your Company’s Board
direction and freedom to the management to achieve those comprised of six Directors, which includes one Executive
objectives within a given framework. The organizational and Director and five Non-Executive Directors, including
governance structure enables an environment for value three Independent Directors, who have considerable
creation through sustainable and profitable growth. experience in their respective fields. As required under
The governance structure is based on the principles of the provisions of section 149[1] of the Companies Act,
freedom to the executive management within a given 2013 and Rules made thereunder and Regulation 17 of
framework to ensure that the powers vested in the the Listing Regulations, the constitution of Board meets
executive management are exercised with due care and with the requirements stated therein. Non-Executive
responsibilities. and Independent Directors have expert knowledge in
the fields of finance, HR, legal and industry. Thus, the
The primary role of the Board is to protect the interest and
Board represents a balanced mix of professionals, who
enhance the value for all the stakeholders. It conducts the
bring the benefits of their knowledge and expertise.
overall strategic supervision and control by setting policies,
b. Board Meetings / Directors’ Particulars:

Annual Report 2016-17 | 55

 In compliance with Regulation 17 of the Listing Committee members.
Regulations and as required under the Companies Act,
The Board has complete access to the information
2013, the Board meets at least once in each quarter
within the Company, which inter alia includes –
and the gap between any two Board meetings was not
1. Annual revenue and capital expenditure plans /
more than 120 days. During the year under review, five
budgets,
Board meetings were held on May 12, 2016, August 2,
2016, October 25, 2016, January 30, 2017 and March 1, 2. Quarterly financial results and results of operations
2017. of the Company,
3. Minutes of the meetings of the Board of Directors
The Board periodically reviews the items required to be
and Committees of the Board,
placed before it and in particular reviews and approves
quarterly / half yearly unaudited financial statements 4. Quarterly report on fatal or serious accidents or
and the audited annual financial statements, corporate dangerous occurrences, any material effluent or
strategies, business plans, annual budgets, projects pollution problems,
and capital expenditure, compliance with applicable 5. Substantial non-payment for goods sold or services
laws and regulations. It monitors overall performance rendered, if any,
of the Company. The Agenda for the board meeting 6. Any issue, which involves possible public or product
covers items set out as guidelines in Regulation 17 liability claims of substantial nature, including
of the Listing Regulations to the extent the same are any Judgment or Order, if any, which may have
applicable and relevant. All agenda items are supported strictures on the conduct of the Company, and
by relevant information, documents and presentations
7. Compliance or non-compliance of any regulatory,
to enable the Board to take informed decisions.
statutory nature or listing requirements and
The meetings of the Board are scheduled well in investors’ service such as non-payment of dividend,
advance and usually held in Ahmedabad, where the delay in transfer of shares, etc.
Registered Office of the Company is situated. The
The Independent Directors play an important role in the
Chief Financial Officer and the Company Secretary
deliberations in Board Meetings and bring with them
in consultation with the Chairman prepare detailed
rich expertise in the field of consumer goods, industry,
agenda for the meetings. Directors are also free to bring
marketing, accountancy, finance, HR and other laws.
up any matter for discussion at the Board Meetings with
the permission of the Chairman. While constituting the Committee of Directors, the
requirements that a Director shall not be a member of
The draft minutes of the meetings approved by the
more than 10 committees and Chairman of more than 5
Chairman are circulated to all the Directors within
committees have been ensured and complied with. None
fifteen days after the conclusion of the meetings.
of the Independent Directors serves as an Independent
Decisions taken at Board / Committee meetings
Director in more than seven listed companies.
are communicated to the concerned departments
promptly for actions and an Action Taken Report of the
status on the decisions taken at the Board / Committee
meetings is placed for the information to the Board /

56 | Zydus Wellness Limited

 The following table provide details of the attendance of the Directors at the Board meetings of the Company and also the
number of other Directorships held in Indian Public Limited Companies [other than the Company] and Chairmanship /
membership in Board Committees of Public Limited Companies as at March 31, 2017.

Member [Chairman]1 of Other

Whether attended last AGM
No. of Board
Meeting

Board Committees 2

Directorships held
Number of other
[Yes / No]
Name of the Directors Category and Position

Attended
Held
Dr. Sharvil P. Patel Non-Executive Chairman 5 5 Yes 3 [2] 4
Mr. Humayun Dhanrajgir Non-Executive and Independent Director 5 5 Yes 9 [2] 7
Dr. B. M. Hegde3 Non-Executive and Independent Director 5 3 Yes 1 2
Prof. Indiraben J. Parikh Non-Executive and Independent Woman
5 4 Yes 7 8
Director
Mr. Ganesh N. Nayak Non-Executive Director 5 5 Yes 2 [1] 2
Mr. Tarun G. Arora Whole Time Director 5 5 Yes - -
Mr. Kulin Lalbhai 4 Additional Director [Independent] 5 1 N.A. 2 4
1 Figures in [ ] indicate the number of Board Committees of which a Director is a Chairman.
2 Other Board Committees mean Audit Committee and Stakeholders’ Relationship Committee.
3 Resigned as a Director of the Company w.e.f. October 11, 2016
4 Appointed as an Additional Director [Independent] w.e.f. November 18, 2016.
c. Familiarization Programme: Directors and the Chairman of the Board. The Board has
At the time of appointment of an Independent evaluated the composition of Board, its committees,
Director, a formal letter of appointment is given to experience and expertise, performance of specific
him / her, which inter alia explains the role, functions, duties and obligations, governance matters, etc.
duties and responsibilities expected from him / her as Performance of individual Directors and the Board
a Director of the Company. All our Directors are aware Chairman was also carried out in terms of their
and also updated, whenever required, of their role, respective attendance at Board / Committee meetings,
responsibilities, liabilities and obligations under the contributions at the meetings, circulation of sufficient
provisions of the Companies Act, 2013 and Rules made documents and information to the Directors, timely
thereunder and Regulation 25 of the Listing Regulations. availability of the agenda, etc. Directors were satisfied
with the evaluation on different criteria.
Familiarization programme is posted on the website of
the Company and any member can visit the Company’s 3. Committees of the Board:
website by clicking the link -http://www.zyduswellness. The Board currently has the following Committees:
in/investor/Policy%20on%20Familiarization%20 A) Audit Committee,
Programme%20for%20Independent%20Directors.pdf.
B) Share Transfer Committee,
d. Evaluation: C) Investors’ / Stakeholders’ Relationship Committee,
During the year, the Nomination and Remuneration
D) Nomination and Remuneration Committee,
Committee / Board have carried out evaluation of
E) Corporate Social Responsibility [CSR] Committee, and
its own performance and the performance of the
committees of the Board of Directors, individual F) Committee of Directors.

Annual Report 2016-17 | 57

 The terms of reference of the Board Committees are 11. Review and recommend to the Board the
determined by the Board from time to time. The Board is appointment / reappointment of the Statutory
responsible for constituting, assigning and co-opting the and Cost Auditors after due consideration of their
members of the Committees. The meetings of the Board independence and effectiveness,
Committees are convened by the respective Committee 12. Approving the payment towards additional
Chairman. services rendered by the Statutory Auditors except
A. Audit Committee: those enumerated in section 144 of the Companies
I. Terms of Reference: Act, 2013,
The role of the Audit Committee includes the following: 13. Recommending to the Board the remuneration of
1. Oversight of the Company’s financial reporting the Statutory and Cost Auditors,
process and disclosure of financial information to 14. Review of Cost Audit Report submitted by the Cost
ensure that the financial statements are correct, Auditors,
sufficient and credible, 15. Approval of the appointment, removal and terms
2. Reviewing with the management the quarterly / of remuneration of Internal Auditors, and
annual unaudited / audited financial statements 16. Approval of the Related Party Transactions and
and Limited Review Report / Audit Reports of the granting omnibus approvals for certain related
Statutory Auditors before recommending approval party transactions, which are in the ordinary course
by the Board of Directors, of business and at an arm’s length basis.
3. Reviewing changes in the accounting policies,
II. Composition, meetings held and attendance at the
major accounting estimates based on exercise
meetings during the year:
of judgment by the management, significant
The Audit Committee held four meetings during 2016-
adjustments made in the financial statements, etc.,
17 on May 12, 2016, August 2, 2016, October 25, 2016
4. Review of Management Discussion and Analysis of and January 30, 2017. The time gap between any two
financial and operational performances, meetings was less than 120 days. The composition of
5. Review of inter-corporate loans and investments, if the Audit Committee as at March 31, 2017 and details
any, of the attendance of the members of the committee at
6. Review of the adequacy and effectiveness of the meetings of the Committee are as under:
internal financial controls and systems, No. of Meetings
Name of the Member Category
Held Attended
7. Review and discuss with the management major
Mr. Humayun Non–Executive / 4 4
financial risk exposures and steps taken to monitor
Dhanrajgir, Chairman Independent
and control them,
Mr. Kulin Lalbhai* Non–Executive / 4 0
8. Overseeing and review the functioning of vigil Independent
mechanism [implemented by the Company as Prof. Indiraben J. Parikh Non–Executive / 4 4
Whistle Blower Policy], Independent
Mr. Ganesh N. Nayak Non–Executive 4 4
9. Review the scope of the Internal Auditors and
Dr. B. M. Hedge** Non–Executive / 4 2
Audit Plan to ensure reasonable coverage of
Independent
different areas of operations,
* Appointed as a member of the Audit Committee w.e.f. January 30,
10. Review, discuss and monitor the observations
2017.
reported by Statutory / Internal Auditors and their
** Ceased to be a member of the Audit Committee w.e.f. October 11,
compliance,
2016.

58 | Zydus Wellness Limited

 All the members of the Audit Committee have requisite III. Meetings held and the attendance of members at the
qualification for appointment on the Committee and meetings:
possess sound knowledge of accounting practices, The Committee meets on a need basis at least twice
financial and internal controls. in a month to ensure the regular process of transfers
The Chairman of the Audit Committee attended the / transmission of shares, split, consolidation, demat /
Annual General Meeting of the Company held on remat and issuance of duplicate Share Certificates.
August 3, 2016 to respond to the shareholder’s queries.
C. Investors’ / Stakeholders’ Relationship Committee:
III. Invitees at the Audit Committee Meetings:
In compliance with the provisions of section 178 of the
The representative of the Statutory Auditors is regularly
Companies Act, 2013 and Regulation 20 of the Listing
invited and he has attended all the Audit Committee
Regulations, the Board has formed an “Investors’ /
meetings during the year. The representative of the Cost
Auditors attends the Audit Committee meeting, where Stakeholders’ Relationship Committee”.
the Cost Audit Report is tabled for discussion. Whole I. Terms of reference:
Time Director, Chief Financial Officer and Management
The Investors’ / Stakeholders’ Relationship
Auditor are invited to attend and participate in these
Committee reviews the redressal of grievances of
meetings. The Company Secretary acts as a secretary to
stakeholders pertaining to the requests / complaints
the Committee.
of the shareholders related to transfer of shares,
The Company continues to derive benefit from the
dematerialization of shares, non-receipt of annual
deliberations of the Audit Committee meetings as
accounts, non-receipt of dividend or revalidation of
the members are experienced in the areas of finance,
expired dividend warrants, recording the change of
HR, corporate laws and industry. It ensures accurate
and timely disclosures that maintain the transparency, address, nomination, etc.
integrity and quality of financial control and reporting. The role of the Stakeholders’ Relationship Committee
B. Share Transfer Committee: has been specified in Part D of the Schedule II of the
I. Terms of reference: Listing Regulations.
The Committee is empowered to perform all the
II. Composition:
functions of the Board in relation to approval and
monitoring of transfers, transmission, dematerialization, The composition of the Committee as on March 31,
rematerialization, issue of duplicate share certificates, 2017 and details of attendance of the Committee
splitting and consolidation of shares issued by the members at the meetings are given in the following
Company. The Committee also oversees the functions table. The Committee met four times during the year.
of the Registrar and Share Transfer Agent. The Board has
No. of No. of Meetings
delegated the powers to approve the transfer of shares Name of the Member
Meetings held Attended
to the Committee.
Mr. Ganesh N. Nayak,
II. Composition: 4 4
Chairman
As on March 31, 2017, the Share Transfer Committee Mr. Humayun Dhanrajgir 4 4
comprises the following members: Mr. Tarun G. Arora 4 4
1. Dr. Sharvil P. Patel, Chairman
The Company Secretary acts as the Secretary to the
2. Mr. Ganesh N. Nayak, Member, and
Committee, who is designated as Compliance Officer
3. Mr. Tarun G. Arora, Member. pursuant to Regulation 6 of the Listing Regulations.
The Company Secretary acts as the Secretary to the
The Committee ensures that the shareholders’ /
Committee.
investors’ grievances and correspondence are attended

Annual Report 2016-17 | 59

 and resolved expeditiously. During the year under 2. To recommend to the Board, the appointment and
review, 20 investor grievances were received and all removal of the Director[s] and evaluation of each
of them have been resolved. There was no investor Director’s performance,
grievance remaining unattended and pending as on 3. To formulate criteria for determining qualifications,
March 31, 2017. positive attributes and independence of a Director,
13305 equity shares remained in the in-transit account 4. To review on annual basis the compensation
with National Securities Depository Limited and Central to the Non-Executive Directors, Key Managerial
Depository Services [India] Limited as at March 31, 2017. Personnel and Senior Management Personnel and
recommend to the Board the remuneration and
III. Number of requests / complaints:
incentive payable to each of them,
During the year, the Company has resolved investor
grievances expeditiously. The Company and / or 5. Ensure that level and composition of remuneration
its Registrar and Transfer Agents have received the is reasonable and sufficient, its relationship with
following requests / complaints from SEBI / Stock performance is clear and meets appropriate
Exchanges and also directly from the shareholders, performance benchmarks, and
which were resolved within the time frames laid down 6. To develop and review the succession plan for the
by SEBI. Board.

Opening II. Composition and Meetings:

Particulars Received Resolved Pending
Balance The composition of the Committee as on March 31, 2017
Complaints:
and details of attendance of the Committee members
SEBI / Stock Exchange 1 3 4 0
at the meetings are given in the following table. The
Shareholders 0 17 17 0
Shareholder queries / Committee met twice during the year. All members of
requests: the Committee are Non-Executive Directors and except
Dividend Related 36 36 36 - Dr. Sharvil P. Patel and Mr. Ganesh N. Nayak, other
Transfer / transmission 14 14 14 - members are Independent Directors.
Demat / Remat 32 32 32 -
No. of No. of Meetings
Changes [address / Name of the Member
21 21 21 - Meetings held Attended
bank mandates]
Mr. Humayun Dhanrajgir,
2 2
D. Nomination and Remuneration Committee: Chairman
In compliance with the provisions of section 178 of the Dr. Sharvil P. Patel 2 2
Companies Act, 2013 and Regulation 19 of the Listing Mr. Kulin Lalbhai* 2 0
Prof. Indiraben J. Parikh 2 2
Regulations, the Board has constituted a Nomination
Mr. Ganesh N. Nayak 2 2
and Remuneration Committee [NRC]. The Terms of Dr. B. M. Hedge** 2 1
reference of the said NRC is specified in clause A of Part * Appointed as the member of NRC w.e.f. January 30, 2017.
D of Schedule II of the Listing Regulations which are ** Ceased to be a member of the NRC w.e.f. October 11, 2016.
mentioned hereunder:
The Company Secretary acts as the Secretary to the
I. Terms of reference: Committee.
The functions of NRC, inter alia, include the following:
III. Nomination and Remuneration Policy and details of
1. To identify the persons, who are qualified to remuneration paid / payable to the Directors for the
become Directors of the Company or who may be year ended March 31, 2017:
appointed in Senior Management, The Board of Directors approved the Nomination

60 | Zydus Wellness Limited

 and Remuneration Policy on the recommendation of reinforce the principles of collective responsibility
Nomination and Remuneration Committee. The salient of the Board.
aspects of the Policy are outlined below: iv) An Independent Director is also reimbursed the
a. Objectives: expenses incurred by him for attending the Board
1. To guide the Board in relation to appointment and and / or Committee of Board meetings.

removal of Directors, Key Managerial Personnel v) Apart from the above, there are no materially
and Senior Management Personnel, significant related party transactions, pecuniary
transactions or relationships between the
2. To evaluate the performance of the members of
Company and its Directors except those disclosed
the Board and provide necessary report to the
in the financial statements for the year ended on
Board for further evaluation of the Board, and March 31, 2017.
3. To recommend to the Board on remuneration c. Remuneration to Whole Time Director:
payable to the Directors, Key Managerial Personnel Mr. Tarun G. Arora is the Whole Time Director on the
and Senior Management Personnel. Board. On the recommendation of the Nomination
and Remuneration Committee, the Board decide and
The Company follows a policy on remuneration of
approve the remuneration payable to Mr. Tarun G.
Directors and Senior Management Employees.
Arora within the ceiling fixed by members as per the
b. Remuneration to the Independent / Non- resolution passed at the Annual General Meeting held
Executive Directors: on July 29, 2015.
i) An Independent / Non-Executive Director is paid As per the recommendation of the Nomination and
sitting fees for each meeting of the Board or Remuneration Committee, Mr. Tarun G. Arora, Whole
Committee of the Board attended by him, of such Time Director was paid remuneration of Rs. 220.25
sum as may be approved by the Board within the Lakhs by way of salary and allowances for the financial
overall limits prescribed under the Companies year ended on March 31, 2017.
Act, 2013 and the Companies [Appointment and The Company has entered into an agreement with
Remuneration of Managerial Personnel] Rules, Mr. Tarun G. Arora, Whole Time Director for employment
2014. The Board has approved the payment of for a period of five years. Either party to an agreement is
sitting fees at Rs. 50,000/- to each Independent / entitled to terminate the agreement by giving not less
Non-Executive Director towards each of the Board than 3 months’ notice in writing to the other party.
/ Committee meetings attended by them.
d. Remuneration to Senior Management Employees:
ii) An Independent Director is also paid commission The Whole Time Director with the help of HR-Head
on an annual basis, of such sum as may be approved carry out the individual performance review based
by the Board. The total commission payable to the on the standard appraisal matrix and after taking into
Independent Directors shall not exceed 1% of the account the appraisal score card and other factors
net profit of the Company and subject to the limits like–Key Performance Area v/s initiatives, balance
approved by the members. between fixed and variable pay, fixed components and
iii) In determining the quantum of commission perquisites and retirement benefits, criticality of roles
payable to the Independent Directors, the and responsibilities, industry benchmarks and current
Nomination and Remuneration Committee compensation trends in the market. Further, any
considers the overall performance of the Company promotion at a senior level management is approved
and the onerous responsibilities required to be by the Management based on predetermined process
shouldered by the Independent Directors. The after assessing the candidate’s capability to shoulder
commission is being paid on uniform basis to higher responsibility.

Annual Report 2016-17 | 61

 e. Details of the commission / sitting fees paid to the Independent / Non-Executive Directors for the year 2016-17 are given below:
[INR Lakhs]
Sitting fees

Relationship Committee
Investors/ Stakeholders’
Committee Meetings
Commission @

Audit Committee

Other Meetings *
CSR Committee
Name of the Independent /

Total
Meetings

Meetings

Meetings

Meeting
Board
Non-Executive Directors

NRC
Dr. Sharvil P. Patel - 2.50 - 1.50 1.00 - - 5.00
Mr. Humayun Dhanrajgir 5.00 2.50 2.00 - 1.00 2.00 0.50 13.00
Dr. B. M. Hegde 5.00 1.00 1.00 - 0.50 - - 7.50
Prof. Indiraben J. Parikh 5.00 2.50 2.00 1.50 1.00 - 0.50 12.50
Mr. Ganesh N. Nayak - 2.00 2.00 1.50 1.00 2.00 - 8.50
Mr. Kulin Lalbhai 5.00 0.50 - - - - - 5.50
@ The Board of Directors, based on the performance of the Company, has decided the payment of Commission to the Independent
Directors.
* Other Meetings include Meeting of Committee of Directors and Meeting of Independent Directors.

f. Stock Option:
The Company does not have any stock option scheme for its Directors or employees. Moreover, there is no separate provision
for payment of severance fees to the Directors.

E. Corporate Social Responsibility [CSR] F. Committee of Directors:

Committee: Committee of Directors comprises of three members
The terms of reference of CSR Committee includes, to namely; [1] Dr. Sharvil P. Patel, [2] Mr. Tarun G. Arora;
frame the CSR Policy and review it from time to time and [3] Mr. Ganesh N. Nayak. The Committee looks
to make it more comprehensive so as to indicate the after the businesses, which are administrative in nature
activities to be undertaken by the Company as specified and within the overall board approved directions
in schedule VII of the Companies Act, 2013 and Rules and framework. The Company Secretary acts as the
made thereunder and to provide guidance on various Secretary to the Committee.
CSR activities to be undertaken by the Company and to 4. Independent Directors’ Meeting:
monitor its progress. During the year under review, a separate meeting of

The composition of the CSR Committee as at March 31, Independent Directors was held on January 30, 2017, inter
alia, to discuss:
2017 and the details of members’ participation at the
meetings of the Committee are as under. 1. Evaluation of performance of Non-Independent
Directors and the Board of Directors as a whole,
No. of No. of Meetings
Name of the Member
Meetings held Attended 2. Evaluation of performance of the Chairman of the
Dr. Sharvil P. Patel, Chairman 3 3 Company, taking into account the views of the
Mr. Ganesh N. Nayak 3 3 Executive and Non-Executive Directors, and
Prof. Indiraben J. Parikh 3 3

62 | Zydus Wellness Limited

 3. Evaluation of the quality, content and timelines of of Insider Trading, the Company has framed a Code of
flow of information between the Management and Conduct to avoid any insider trading and it is applicable
the Board and that is necessary to effectively and to all the Directors, Officers and such employees of
reasonably perform its duties. the Company who are expected to have access to
the unpublished price sensitive information relating
The Independent Directors were present at the
to the Company. The Code lays down guidelines,
meeting.
which advises them on procedure to be followed and
5. Disclosures: disclosures to be made, while dealing in the shares of
A. Related Party Transactions: the Company.
All transactions entered into with the Related Parties
Shares held by the Directors as at March 31, 2017:
as defined under the Act and Regulation 23 of the
Listing Regulations during the financial year were in the No. of Details of shares
ordinary course of business and on an arm’s length basis Name of the Director shares bought [+] / sold [-]
and do not attract the provisions of section 188 of the held during 2016–17
Act. There were no materially significant transactions Dr. Sharvil P. Patel 533 Nil
with the related parties during the financial year which Mr. Humayun Dhanrajgir 0 Nil
were in the conflict of interest of the Company. Suitable Prof. Indiraben J. Parikh 0 Nil
disclosures as required by the Accounting Standard Mr. Ganesh N. Nayak 6,550 Nil
[Ind AS 24] have been made in the notes to the Financial Mr. Tarun G. Arora 200 Nil
Statements. Mr. Kulin S. Lalbhai 0 Nil

The Board has approved a policy for related party D. Whistle Blower Policy:
transactions which has been uploaded on the website The Company has a whistle blower policy to deal
of the Company. with any instance of fraud and mismanagement. The
employees of the Company are free to report violations
B. Code of Conduct:
of any laws, rules, regulations and concerns about
The Company has laid down a Code of Conduct for all
unethical conduct to the Audit Committee under this
Board members and Senior Management Personnel.
policy. The policy ensures that strict confidentiality
The Code of Conduct is available on the website of the
is maintained whilst dealing with concerns and also
Company www.zyduswellness.in. All Board Members
that no discrimination is done with any person for a
and the Senior Management Personnel have affirmed
genuinely raised concern.
compliance with the Code of Conduct for the year
under review. The declaration of Whole Time Director is E. Management:
given below: i. Management Discussion and Analysis Report:
Management Discussion and Analysis Report is set
To the shareholders of Zydus Wellness Limited
out in a separate section included in this Annual
Sub.: Compliance with Code of Conduct Report and forms a part of this Report.
I hereby declare that all the Board Members and ii. Disclosure of material financial and commercial
Senior Management Personnel have affirmed transactions:
compliance with the Code of Conduct as adopted by As per the disclosures received from senior
the Board of Directors. management, no material financial and
Place: Ahmedabad Tarun G. Arora commercial transactions that may have a potential
Date: May 27, 2017 Whole Time Director conflict with the interest of the Company at large
were reported to the Company during the year
C. Prohibition of Insider Trading:
under report.
In compliance with the SEBI Regulations on Prevention

Annual Report 2016-17 | 63

 F. Disclosure regarding reappointment of Directors: and Analysis, Report on Corporate Governance and
The particulars about the brief resume and other Audited Financial Statements.
information for the Directors seeking reappointment as
ii) The Annual General Meeting is a platform for face-to-
required to be disclosed under this section are provided
face communication with the shareholders, where
as annexure to the notice convening the Twenty Third
the Whole Time Director makes presentation on the
Annual General Meeting.
performance, operating and financial results of the
G. Compliance by the Company: Company. The Chairman, Whole Time Director and
The Company has complied with all the mandatory other Key Managerial Personnel also respond to the
requirements of the Listing Agreement with the Stock specific queries of the shareholders.
Exchanges, regulations and guidelines of SEBI. Further,
iii) The Company also intimates to the Stock Exchanges all
during last three years, no penalties or strictures are
price sensitive matters which in its opinion are material
imposed on the Company by the Stock Exchange or
and of relevance to the shareholders and subsequently
SEBI or any statutory authority, on any matter related to
issues a Press Release on such matters, wherever
capital markets.
necessary.
H. CEO / CFO Certification:
iv) The quarterly and half yearly results are published in
The requisite certification from the Whole Time Director
widely circulating national and local dailies such as
and the Chief Financial Officer required to be given
“Financial Express” in English and Gujarati respectively.
under regulation 17(8) read with Part B of Schedule II of
The results are also posted on the website of the
the Listing Regulations, was placed before the Board of
Company www.zyduswellness.in and the same are not
Directors of the Company.
sent individually to the shareholders.
I. Unclaimed Shares:
v) The Company holds meetings and makes presentations
As per the notification issued by the Ministry of
to the institutional investors and analysts. The copies of
Corporate Affairs, 972 Equity shareholders holding
such presentations and the transcripts of the phone
57813 equity shares will be transferred to Suspense
calls are also made available on the Company’s web-
Account for which the Company has complied with the
site.
necessary requirements.
vi) The Company files with the Stock Exchanges the
6. Means of Communication:
updated Investors’ Presentation and copy thereof is also
i) The Company has 34,553 shareholders as on March
posted on the website of the Company. Information to
31, 2017. The main channel of communication to the
the Stock Exchanges is filed online on NEAPS for NSE
shareholders is through Annual Report, which includes
and BSE Online Portal for BSE.
inter alia, the Directors’ Report, Management Discussion

7. General Body Meetings:

I. Details of last three Annual General Meetings held are provided hereunder:
Year Date and Time Venue
2015-2016 22nd AGM on August 3, 2016 J. B. Auditorium, Ground Floor, Ahmedabad Management Association [AMA],
at 10:00 a.m. ATIRA Campus, Dr. Vikram Sarabhai Marg, Ahmedabad–380 015.
2014-2015 21st AGM on July 29, 2015 at J. B. Auditorium, Ground Floor, Ahmedabad Management Association [AMA],
10:00 a.m. ATIRA Campus, Dr. Vikram Sarabhai Marg, Ahmedabad–380 015.
2013–2014 20th AGM on July 14, 2014 at J. B. Auditorium, Ground Floor, Ahmedabad Management Association [AMA],
10:00 a.m. ATIRA Campus, Dr. Vikram Sarabhai Marg, Ahmedabad–380 015.

64 | Zydus Wellness Limited

 II. Special Resolutions passed in the previous three Annual General Meetings:
The shareholders of the Company have passed the following special resolutions in the previous three Annual General Meetings.
Sr. No. Nature of Special Resolution Passed Relevant provisions AGM details
1. Alteration in Articles of Association Section 14 of the Act 20th AGM held on July 14, 2014

III. Postal Ballot:

During the year, the Company has not sought shareholders’ approval through Postal Ballot.

8. General Shareholder Information:

i. Annual General Meeting [AGM]:
Date and time of 23rd AGM August 11, 2017 at 12:00 Noon
Venue of 23rd AGM J B Auditorium, Ahmedabad Management Association [AMA], ATIRA Campus, Dr.
Vikram Sarabhai Marg, Ahmedabad–380 015
Financial Year April 1, 2016 to March 31, 2017
Date of Book Closure July 31, 2017 to August 11, 2017
Registered Office Address House No. 6 & 7, Sigma Commerce Zone, Near Iscon Temple, Sarkhej–Gandhinagar
Highway, Ahmedabad–380 015
Dividend Payment Date No final dividend proposed
Compliance Officer Mr. Dhaval N. Soni, Company Secretary
Website www.zyduswellness.in

ii. Tentative financial calendar:

First Quarter Results On or before August 14, 2017
Half Yearly Results On or before November 14, 2017
Third Quarter Results On or before February 14, 2018
Audited Results for the year 2017-18 On or before May 30, 2018

iii. Listing of shares:

The Equity Shares of the Company are listed on BSE Limited [BSE] and National Stock Exchange of India Limited [NSE].

iv. Listing Fees:

The Company has paid annual listing fees for the financial year 2017–18 to the above Stock Exchanges.

v. Stock Code:
Name of the Stock Exchange Stock Code Closing Price as on March 31, 2017 [INR]
BSE Limited 531335 869.30
National Stock Exchange of India Limited ZYDUSWELL 871.35

Annual Report 2016-17 | 65

 vi. Stock Price and BSE Sensex data:
BSE Limited National Stock Exchange of India Limited
BSE
Month High Low Av. Volume High Low Av. Volume
Sensex
(Rs.) (Rs.) (In Nos.) (Rs.) (Rs.) (In Nos.)
Apr., 16 25606.62 768.00 711.50 1444.50 769.50 710.00 5129.17
May, 16 26667.96 848.80 745.00 4947.64 849.55 740.00 24790.41
Jun., 16 26999.72 850.40 751.00 4980.64 852.00 701.00 18457.82
Jul., 16 28051.86 810.00 790.00 863.95 824.00 771.00 5304.60
Aug., 16 28452.17 900.00 806.00 4425.09 920.00 780.20 25469.09
Sept., 16 27865.96 918.00 870.00 1535.65 920.90 866.20 7502.50
Oct., 16 27930.21 917.75 854.85 2747.68 918.80 855.00 13745.05
Nov., 16 26652.81 858.50 777.50 877.00 888.00 762.10 8847.24
Dec., 16 26626.46 926.25 820.00 12124.32 928.00 820.00 31910.91
Jan., 17 27655.96 899.75 845.10 732.90 916.00 845.40 4300.62
Feb., 17 28743.32 889.00 816.00 1064.05 879.95 816.20 4994.26
Mar., 17 29620.50 894.95 845.00 1277.27 898.70 828.70 6552.00

vii. Chart “A” Stock Performance: Zydus Wellness Limited [ZWL]:

ZWL Daily Share Price Vs Sensex

STOCK PRICE SENSEX

950 30000
29000
900
28000

850 27000
Price (in Rs.)

Sensex

26000
800 25000
24000
750
23000
700 22000
11/01/2017
26/01/2017
10/02/2017
25/02/2017
12/03/2017
27/03/2017
01/04/2016
16/04/2016
01/05/2016
16/05/2016
31/05/2016
15/06/2016
30/06/2016
15/07/2016
30/07/2016
14/08/2016
29/08/2016
13/09/2016
28/09/2016
13/10/2016
28/10/2016
12/11/2016
27/11/2016
12/12/2016
27/12/2016

Trading days

66 | Zydus Wellness Limited

viii. Registrar and Share Transfer Agent:
For lodgment of transfer deeds and other documents or any grievances / complaints, investors may contact the Company’s
Registrar and Share Transfer Agent at the following address:

Link Intime India Private Limited,

506-508, Amarnath Business Centre – 1, (ABC Complex)
Beside Gala Business Centre, Off C. G. Road,
Ellisbridge, Ahmedabad–380 006
E-mail: [email protected]
Phone: 079–2646 5179; Fax: 079–2646 5179

ix. Share Transfer System:

A Committee of Directors has been constituted to approve the transfers, transmission, issue of duplicate shares, etc. The
Company’s Share Transfer Agent, Link Intime India Private Limited has adequate infrastructure to process the above matters.

A predetermined process cycle at regular interval ensures the transfer of shares (in physical form) within the stipulated time
limit.

As per the requirements of Regulation 40 (9) of the Listing Regulations, a Company Secretary in Practice has certified due
compliance of share transfer formalities on a half yearly basis.

x. Reconciliation of Share Capital Audit:

A practicing Company Secretary carried out secretarial audit in each of the quarters in the financial year 2016-17, to reconcile
the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited
(CDSL) and total issued and listed capital. The audit reports confirm that the total issued / paid up capital is in agreement with
the total number of shares in physical form and the total number of dematerialized shares held with depositories.

xi. Distribution of shareholding of Equity Shares as at March 31, 2017:

No. of Equity Shares No. of Folios % of total folios No. of Shares % of shareholding
1 to 500 33,868 98.0175 17,90,909 4.5836
501 to 1000 373 1.0795 2,79,935 0.7165
1001 to 2000 157 0.4544 2,28,599 0.5851
2001 to 3000 49 0.1418 1,20,853 0.3093
3001 to 4000 24 0.0695 84,602 0.2165
4001 to 5000 21 0.0608 95,649 0.2448
5001 to 10000 20 0.0579 1,42,494 0.3647
10001 & above 41 0.1187 3,63,29,048 92.9795
Grand total 34,553 100.00 3,90,72,089 100.00
Shareholders in Physical Mode 4,396 12.72 3,34,902 0.86
Shareholders in Demat Mode 30,157 87.28 3,87,37,187 99.14
Grand Total 34,553 100.00 3,90,72,089 100.00

Annual Report 2016-17 | 67

 xii. Shareholding Pattern as at March 31, 2017:
No. of Shares held % of
Category Total shares
Physical Electronic shareholding
Promoter’s holding 0 2,83,43,687 2,83,43,687 72.54
Mutual Funds 559 7,87,965 7,88,524 2.02
Banks, FIs and Insurance Companies 0 15,32,355 15,32,355 3.92
Foreign Institutional Investors / Foreign 46 30,70,713 30,70,759 7.86
Portfolio Investor
NRIs / Foreign National 71,146 1,43,019 2,14,165 0.55
Other Corporate Bodies 4,500 19,88,971 19,93,471 5.10
Indian Public / HUF / Trusts 2,58,651 28,70,477 31,29,128 8.01
Total 3,34,902 3,87,37,187 3,90,72,089 100.00

xiii. Dematerialization of Shares and Liquidity: xvi. Outstanding GDRs/ADRs/Warrants or any convertible
The Company’s equity shares are required to be instruments, conversion date and likely impact on
compulsorily traded on the Stock Exchanges in equity:
dematerialized form. Approximately 99.14% of the The Company has not issued any GDRs/ADRs, warrants
equity shares have been dematerialized. ISIN number or any convertible instruments.
for dematerialization of the equity shares of the
xvii. Details of non–compliance:
Company is INE768C01010.
There was no non-compliance during the year and no
xiv. Location of the Company’s manufacturing plant: penalties were imposed or strictures passed on the
The Company’s manufacturing plant is located at 7A, Company by the Stock Exchanges, SEBI or any other
7B & 8, Saket Industrial Estate, Sarkhej–Bavla Highway, statutory authority. A Practicing Company Secretary
Moraiya, Tal.: Sanand, Dist.: Ahmedabad. has certified the compliance of the conditions of
Corporate Governance and annexed the certificate
xv. Address for correspondence:
with the Directors’ Report and sent the same to all the
Shareholders’ correspondence should be addressed to
shareholders of the Company. The certificate shall also
the Company’s Registrar and Share Transfer Agent at
be sent to all the concerned Stock Exchanges along
the address mentioned above.
with the annual reports filed by the Company.
Shareholders may also contact the Company Secretary,
9. Non-Mandatory requirements of regulation 27 (1) &
at the Registered Office of the Company for any
Part E of Schedule II of the Listing Regulations:
assistance.
i. The Company has a Non–Executive Chairman.
Mr. Dhaval N. Soni,
ii. The quarterly / half yearly results are not sent to the
Company Secretary and Compliance Officer
Tele. Nos. 079 – 26868100 - Extension–338 shareholders. However, the same are published in the
newspapers and also posted on the Company’s website.
[email protected] is a special e-mail
ID for Investor’s complaints and other communications. iii. The Company’s financial statements for the financial
year 2016–2017 do not contain any audit qualification.
Shareholders holding shares in the electronic mode
should address all their correspondence to their iv. The internal auditors report to the Audit Committee.

respective depository participants.

68 | Zydus Wellness Limited

Whole Time Director and
Chief Financial Officer Certification
To,
The Board of Directors
Zydus Wellness Limited
Re: Certificate in compliance with Regulation 17[8] of SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015
[Listing Regulations]

Dear Sirs / Madam,

In compliance with Regulation 17[8] of the Listing Regulations read with schedule II of part B of the Listing Regulations, we hereby
certify that

(a) We have reviewed financial statements and the cash flow statement for the year and that to the best of our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might
be misleading;

(ii) these statements together present true and fair view of the Company’s affairs and are in compliance with existing accounting
standards, applicable laws and regulations.

(b) There are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are
fraudulent, illegal or in violation of the Company’s Code of Conduct.

(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated
the effectiveness of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the
auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware
and the steps taken or proposed to take to rectify these deficiencies.

(d) We have indicated to the auditors and the Audit Committee;

(i) significant changes in internal control over financial reporting during the year,

(ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial
statements, and

(iii) that there are no instances of significant fraud of which we have become aware and the involvement therein of the
management or an employee having a significant role in the Company’s internal control system.

TARUN G. ARORA AMIT B. JAIN

Whole Time Director Chief Financial Officer

Place: Ahmedabad
Date: May 27, 2017

Annual Report 2016-17 | 69

Corporate Governance Compliance
Certificate
To
The Members of
Zydus Wellness Limited

We have examined the compliance of the conditions of Corporate Governance by Zydus Wellness Limited, for the year ended on March
31, 2017 as stipulated in SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015.

The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to the
review of the procedures and implementation thereof adopted by the Company for ensuring compliance with the conditions of the
Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression of opinion on the financial statements of
the Company.

In our opinion and to the best of our information and according to the explanations given to us and based on the representations made
by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as
stipulated in Regulation 17 to 27 & part E of Schedule II of the Listing Regulations.

We state that in respect of the investor grievances received during the year ended March 31, 2017, no such investor grievances remained
unattended/pending for more than 30 days.

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

For, HITESH BUCH & ASSOCIATES

Company Secretaries

Hitesh Buch
Place: Ahmedabad Proprietor
Date: May 27, 2017 FCS No. 3145
CP No. 8195

70 | Zydus Wellness Limited

Management Discussion
and Analysis – 2016-17
Overview, 2016-17 Indian’s daily needs, created aspirational brands, provided
State of the Indian economy emotional fulfillment, remained at the forefront of innovation,
provided best-in-class products at affordable prices and
As per the latest Advanced Estimate (AE) of the Central Statistics
expanded to remotest parts.
Office (CSO), growth in India’s GDP at constant market prices
(2011-12) was estimated at 7.1 per cent in 2016-17, slowing down The key ingredients of success for some of the leading brands /
from 7.9 per cent in the previous financial year. The reason was companies that have increased penetration and outperformed
a sharp slowdown in investment to 1.7 per cent (5.6 per cent in their competitors have been:
the previous year). This negated the strong 8.7 per cent growth
• Consumer engagement
in private consumption (6.1 per cent in 2015-16). Strong growth
momentum was seen in other segments as well – government • Connecting with consumer/shopper at various touch points
consumption (20.8 per cent), exports (4.5 per cent) and imports • Range productivity
(2.3 per cent). Growth in India’s GVA (Gross Value Added)
The Indian FMCG Industry continues to demonstrate attractive
at constant (2011-12) basic prices for the year 2016-17 was
potential over the next decade. Various industry sources indicate
estimated to be 6.7 per cent, as compared to 7.8 per cent in 2015-
that a nominal GDP growth rate of roughly 12% over the next
16. At the sectoral level, agriculture, industry and services sectors
three years could signal an FMCG growth rate ranging from a
grew at 4.4 per cent, 5.8 per cent and 7.9 per cent respectively
low of 9% to a high of 15% depending on player action. As the
in 2016-17. The average Wholesale Price Index (WPI) Inflation
Indian FMCG industry looks to reignite consumer growth in an
rate for 12 months (April 2016 to March 2017) was 3.7 per cent
increasingly cluttered environment, the success of brands and
compared to -2.5 per cent during the corresponding period in
companies is likely to be defined by their ability to plan and
2015-16. (Source: Monthly Economic Report, Ministry of Finance,
execute brand penetration and consumption strategies over the
Govt. of India)
long term.
Remonetization impact is visible in the latest estimates
HEALTH & WELLNESS FOODS
notwithstanding statistical revisions. The short-term negative
impact of remonetization seems to be largely behind the Indian consumers consider fortified foods with incremental
country; a consumption recovery is expected on account of an nutrients like protein, fiber, vitamins, calcium and minerals to
anticipated normal monsoon and higher rural wages. However, be an important purchase consideration. In a survey by Nielsen,
2017-18 prospects also depend on a successful roll-out of GST as when asked what tips the scales in favour of certain packaged
States agreed on 1st July 17 as the roll-out date. foods, respondents picked the promise of all-natural ingredients,
high protein and high fiber content. The message in this survey
The International Monetary Fund released an update in which
for brands is to spell out auxiliary health benefits rather than
India’s growth was expected to rebound to 7.2 per cent in 2017-
merely tagging products as ‘healthy’.
18 and 7.7 per cent in 2018-19.
Consumers driving the move to fortified foods are conscious
FAST MOVING CONSUMER GOODS (FMCG) market
about brands and labels on packaged foods. The four distinctive
The fast moving consumer goods (FMCG) industry has been the traits that characterize these consumers comprise:
bellwether of Indian corporations and the Indian economy for
• They are loyal to trusted brands; they buy only from
years. The industry remained resilient and delivered consistent
producers they trust.
business growth. It has successfully addressed almost every

Annual Report 2016-17 | 71

• They read labels for nutrition content, believe health further. It was launched in table-top and culinary formats to drive
claims and follow portion guidance. the family consumption (including children) of beverages and
desserts. Sugar Free Green has immense potential and is likely to
• They are willing to pay a premium for foods that meet their
approval. grow the sugar substitute category going forward.

• They monitor food intake and diet, and are willing to * “Sugar Free Green”
sacrifice taste for health.

(Source: Nielsen report ‘India acquires a taste for health and

wellness’, August 2016)

Zydus Wellness Ltd., an emerging consumer health player

Zydus Wellness is a strong and emerging player in the health

and wellness space in India. The focus for the year under review
was to revive growth on the back of volume-led initiatives in all
segments of presence. As the year progressed, the company
reported an improvement in the growth rates of all flagship
brands viz. Sugar Free, EverYuth & Nutralite. Its flagship portfolio
maintained leadership across respective categories in 2016-17.
The focus will remain to continue to recruit new users and invest
Sugar Free – India’s largest selling low calorie sweetener
in consumer education as well as continue to engage consumers
through various activations. The company also intends to
increase investments and efforts in digital space to complement
conventional touch points.

Everyuth – ‘Pure Skin, Happy Har Din’

*Range of Sugar Free products

Sugar Free maintained its leadership position in the sugar

substitute category with a market share of 94.5%, an increase
of 80 basis points over the previous year (Source: Nielsen, MAT
March 2017). Both variants of Sugar Free (Sugar Free Gold and
Sugar Free Natura) continued to lead their respective segments.

The sugar substitute category growth improved to 9.3% from

6.0% a year ago, primarily driven by various category-building
initiatives like the promotion for culinary stock keeping units with *Range of Everyuth products

Kheer Bowl and other popular touch-points like festival-linked In 2016-17, the skin cleansing category was led by improvement
consumer activations viz.Durga Puja and Christmas. in the growth rates of all segments in which the company

Another 2016-17 highlight was the launch of new Sugar Free operates.

Green towards the end of the financial year. This 100% natural In the Peel Off segment, Everyuth maintained its leadership
variant, made from Stevia, is expected to drive category growth position with market share of 90.3% (Source: Nielsen, MAT March

72 | Zydus Wellness Limited

2017). Continued support through various media activities and *Everyuth Tulsi Turmeric Face wash with new packaging
TV campaign helped drive category penetration.

*Everyuth Peel Off range

Going forward, the focus will be on a series of new product

launches backed by strong marketing investments across each
key segment, reinforcing the Everyuth franchise position ahead
of the category.

Nutralite – ‘Aap happy, apki health happy’

In the Scrub segment, Everyuth maintained its leadership
position with a market share of 31.6% (Source: Nielsen, MAT
March 2017). In 2016-17, the Scrub range was re-launched with
new packaging and campaign to build on the ‘natural’ equity and
drive category penetration.

*Everyuth scrub range

During 2016-17, Nutralite reported strong volume growth

versus subdued category growth rates over the last few years.
This growth rate was largely led by the institutional segment.
Progress was also seen in the retail segment during the last
quarter. The focus was to widen the reach with various regional
media campaigns in select cities and on- ground activations to
drive trials and strengthen Nutralite credentials. During the last
quarter of the financial year, the Nutralite premium range was
re-launched with new packaging and improved taste. Two new
flavoured variants in the premium range were also launched.

In the Face Wash segment, Everyuth reported growth revival Going forward, a multi-media campaign will further strengthen
following the re-launch of the Face Wash range with fresh, new Nutralite’s taste and health credentials while enhancing
and contemporary looking packaging. During the last quarter of awareness of new flavours.
the financial year, the ‘Tulsi Turmeric’ Face wash was re-launched More exciting new innovative products will be introduced over
with improved product and packaging. The initiative was the next few quarters.
supported by a 360-degree awareness building campaign.

Annual Report 2016-17 | 73

*Nutralite Premium range The profit before tax and exceptional items increased 6.2% y-o-y
to Rs. 1240 Mio. PBT margin before exceptional items as % of total
operating income was 26.8%.

Net profit after tax increased 5.5% y-o-y to Rs. 1090 Mio. Net profit
margin as a % of the total operating income was 23.6%.

Net worth

Go to Market - Capacity and capability building The net worth as on 31st March 2017 was Rs. 5572 Mio., higher by
16.4 % from the previous year. Retained earnings of Rs. 784 Mio.
The company strengthened the distribution system during the
(net profit less interim dividend) contributed to this rise.
last financial year. The company rolled out a program named
“EnReach 2.0” to drive the next wave of distribution expansion The Book Value per share increased to Rs. 143 as at 31st March
focused on enhancing quality of direct reach. Through this 2017 from Rs. 122 in the previous year. The return on adjusted
program, a channel-wise thrust helped strengthen brand net worth (RONW = Net Profit excluding exceptional items of
presence across the general trade, modern trade and Hotel tax / Average net worth adjusted for deferred expenses and
/ Restaurants / Caterers (HORECA) segments. The company exceptional items) stood at 21.0 % for 2016-17.
is building capacity and capability to support new initiatives Fixed Assets and Capital Expenditure
including online sales.
The gross block (including capital work in progress) at the end of
The company strengthened its learning and development 2016-17 was Rs. 1445 Mio. Capital expenditure in 2016-17 was Rs.
program ‘Passion’ for the field force, linking it with classroom 280 Mio. The new production unit of Zydus Wellness-Sikkim, the
and on-the-job training modules, strengthening field force partnership firm, commenced commercial production in Sikkim
engagement and in-market execution. during the fourth quarter.
Building international presence GST transition
To build the international business, the Company entered new On the GST front, the company is gearing up for the new tax
markets like Saudi Arabia, Qatar, Oman and Myanmar. Going regime, working closely with its business partners for a smooth
forward, the company intends to expand to at least five more transition.
countries, widening the product portfolio in existing and new
Risk identification, Risk mitigation and Internal controls
geographies.
The company’s business comprises manufacturing and marketing
Consolidated financial highlights
of consumer wellness products. Its presence in these segments
Sales & Income from operations exposes it to various risks which are explained below.
The total income from operations of the company increased 8.6% Risk of fluctuations in prices of key inputs
y-o-y to Rs. 4,625 Mio. from Rs. 4,260 Mio. in 2015-16.
Prices of the key ingredients used in the products manufactured
Profit and margins and marketed by the company remain volatile due to several
The EBITDA (Earnings before interest, tax, depreciation and market factors, including changes in government policies and
amortization) increased 8.5% to Rs. 991 Mio from Rs. 913 Mio in fluctuations in the foreign exchange rates. However, the company
2015-16. EBIDTA margin as% of the total operating income was keeps a close watch on the prices and enters into long term
21.4% in 2016-17. contracts, wherever feasible, to minimise the risk of fluctuations
in the input prices.

74 | Zydus Wellness Limited

Risk of competition and price pressure Having strong brand equity in each of the segments, the company
faces the risk of unauthorized and illegitimate use of its brand
Though the company’s products enjoy leading positions in
names, packaging designs and other intellectual properties
their respective categories, the risk of competition from existing
related to its products by other players. The company ensures
players as well as from new entrants remains high. However,
protection of its intellectual property through appropriate
the company’s strength in the market place, coupled with its
registrations and other legal means.
continuous thrust on improving quality of its products and
offering newer products in the wellness segment provide it an Risk management and Internal Control Systems
edge over competition. The company supplies its products in
The company has established a well-defined process of risk
both retail as well as institutional segments. Both segments
management, wherein the identification, analysis and assessment
have their own nuances in terms of customer expectations,
of the various risks, measuring of the probable impact of such
competition and pricing. However, the company is well focused
risks, formulation of risk mitigation strategy and implementation
on increasing its share in all segments through sound marketing
of the same takes place in a structured manner. Though the
strategy and a balanced approach.
various risks associated with the business cannot be eliminated
Risk of litigation related to quality of products, intellectual completely, all efforts are made to minimize the impact of such
properties and other litigation risks on the operations of the company. Necessary internal
control systems are also put in place by the Company on various
Being in the consumer healthcare and wellness segment, the
activities across the board to ensure that business operations are
company’s products and their manufacturing and supply chain
directed towards attaining the stated organizational objectives
processes are required to maintain high quality standards. Any
with optimum utilization of the resources. Apart from these
deviation from prescribed regulations or any variation in quality
internal control procedures, a well-defined and established
from standards laid down by regulatory authorities can lead to
system of internal audit is in operation to independently review
actions from these authorities or litigation from its customers.
and strengthen these control measures, which is carried out by a
The company also faces the risk of litigation from its competitors
reputed firm of Chartered Accountants. The Audit Committee of
or customers on claims it makes for values which its’ products
the company regularly reviews the reports of the internal auditors
offer. The company always strives to ensure the highest standard
and recommends actions for further improvement of operations
of quality for its products and processes, and continuously works
in general and financial controls in particular.
on improving quality. It also maintains a high level of accuracy in
the area of product claims.

Annual Report 2016-17 | 75

Independent Auditor’s Report

To the Members of
Zydus Wellness Limited

Report on the Standalone Ind AS Financial Statements required to be included in the audit report under the provisions
We have audited the accompanying standalone Ind AS financial of the Act and the Rules made thereunder.
statements of Zydus Wellness Limited (‘the Company’), which
We conducted our audit in accordance with the Standards on
comprise the balance sheet as at March 31, 2017, the Statement
Auditing specified under Section 143(10) of the Act. Those
of Profit and Loss (including other comprehensive income), and
Standards require that we comply with ethical requirements and
the Statement of Cash flows and the Statement of changes in
plan and perform the audit to obtain reasonable assurance about
equity for the year then ended, and a summary of significant
whether the standalone Ind AS financial statements are free from
accounting policies and other explanatory information (herein
material misstatement.
after referred to as “standalone Ind AS financial statements”).
An audit involves performing procedures to obtain audit evidence
Management’s Responsibility for the Standalone Ind AS about the amounts and the disclosures in the standalone Ind
Financial Statements AS financial statements. The procedures selected depend on
The Company’s Board of Directors is responsible for the matters the auditor’s judgment, including the assessment of the risks
stated in Section 134(5) of the Companies Act, 2013 (“the Act”) of material misstatement of the standalone Ind AS financial
with respect to the preparation and presentation of these statements, whether due to fraud or error. In making those risk
standalone Ind AS financial statements that give a true and fair assessments, the auditor considers internal financial control
view of the financial position, financial performance including relevant to the Company’s preparation of the standalone Ind
other comprehensive income cash flows and changes in equity AS financial statements that give a true and fair view in order to
of the Company in accordance with the accounting principles design audit procedures that are appropriate in the circumstances.
generally accepted in India, including the Indian Accounting An audit also includes evaluating the appropriateness of
Standards (Ind AS) specified under Section 133 of the Act, read the accounting policies used and the reasonableness of the
with Rule 7 of the Companies (Accounts) Rules, 2014. accounting estimates made by the Company’s Directors, as well
as evaluating the overall presentation of the standalone Ind AS
This responsibility also includes maintenance of adequate
financial statements.
accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing We believe that the audit evidence we have obtained is sufficient
and detecting frauds and other irregularities; selection and and appropriate to provide a basis for our audit opinion on the
application of appropriate accounting policies; making standalone Ind AS financial statements.
judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal Opinion
financial controls, that were operating effectively for ensuring the In our opinion and to the best of our information and according
accuracy and completeness of the accounting records, relevant to the explanations given to us, the aforesaid standalone Ind
to the preparation and presentation of the standalone Ind AS AS financial statements give the information required by the
financial statements that give a true and fair view and are free Act in the manner so required and give a true and fair view in
from material misstatement, whether due to fraud or error. conformity with the accounting principles generally accepted in
India including the Ind AS, of the state of affairs of the Company
Auditor’s Responsibility as at March 31, 2017, and its profit including other comprehensive
Our responsibility is to express an opinion on these standalone income, its cash flows and the changes in equity for the year
Ind AS financial statements based on our audit. ended on that date.

We have taken into account the provisions of the Act, the

Report on Other Legal and Regulatory Requirements
accounting and auditing standards and matters which are
1. As required by the Companies (Auditor’s Report) Order, 2016

76 | Zydus Wellness Limited

 (“the Order”) issued by the Central Government of India in our opinion and to the best of our information and
terms of sub-section (11) of section 143 of the Act, we give according to the explanations given to us:
in the Annexure A, a statement on the matters specified in
i. The Company has disclosed the impact of pending
the paragraph 3 and 4 of the order.
litigations on its financial position in its standalone
2. As required by Section 143 (3) of the Act, we report that: Ind AS financial statements – Refer Note 27 to the
standalone Ind AS financial statements;
a. We have sought and obtained all the information and
explanations which to the best of our knowledge and ii. The company did not have any long-term
belief were necessary for the purposes of our audit; contracts including derivatives contracts for which
there were any material foreseeable losses;
b. In our opinion, proper books of account as required by
law have been kept by the Company so far as it appears iii. There has been no delay in transferring amounts,
from our examination of those books; required to be transferred to the Investor Education
and Protection Fund by the Company;
c. The Balance Sheet, the Statement of Profit and Loss, the
Cash Flow Statement and the Statement of Changes in iv. The company had provided requisite disclosures
Equity dealt with by this Report are in agreement with in its financial statements as to holdings as well as
the books of account; dealings in Specified Bank Notes during the period
from November 8, 2016 to December 30, 2016
d. In our opinion, the aforesaid standalone Ind AS financial
and the same are in accordance with the books of
statements comply with the Accounting Standards
accounts maintained by the company.
specified under Section 133 of the Act, read with Rule 7
of the Companies (Accounts) Rules, 2014;

e. On the basis of written representations received from

the directors as on March 31, 2017, and taken on record
by the Board of Directors, none of the directors is
disqualified as on March 31, 2017, from being appointed
as a director in terms of Section 164(2) of the Act;
For Dhirubhai Shah & DoShi
f. With respect to the adequacy of the internal financial Chartered Accountants
controls over financial reporting of the Company and Firm’s Registration Number: 102511W
the operating effectiveness of such controls, refer to
our separate report in “Annexure B”; and KauShiK Shah
g. With respect to the other matters to be included in Ahmedabad Partner
the Auditor’s Report in accordance with Rule 11 of May 27, 2017 Membership number: 016502
the Companies (Audit and Auditors) Rules, 2014, in

Annual Report 2016-17 | 77

annexure - a to the auditors’ report

The annexure referred to in independent auditors’ report to the members of the Company on the standalone ind aS financial
statements for the year ended March 31, 2017, we report that:

i. (a) The Company has maintained proper records showing v. The Company has not accepted any deposits from the
full particulars, including quantitative details and public.
situation of fixed assets.
vi. The Central Government has prescribed maintenance
(b) The Company has a regular program of physical of cost records under section 148(1) of the Act. We have
verification of its fixed assets. In accordance with this broadly reviewed the accounts and records of the Company
program, fixed assets were verified during the year in this connection and are of the opinion that prima facie,
and no material discrepancies were noticed on such the prescribed accounts and records have been made and
verification. In our opinion, this periodicity of physical maintained. We have not, however, carried out a detailed
verification is reasonable having regard to the size of examination of the same.
the Company and the nature of its assets.
vii. (a) The Company is regular in depositing undisputed
(c) According to the information and explanations given to statutory dues including provident fund, employees’
us and on the basis of our examination of the records of state insurance, income tax, sales tax, value added tax,
the Company, the title deeds of immovable properties duty of customs, service tax, cess and other statutory
are held in the name of the Company. dues with the appropriate authorities.

ii. The inventory has been physically verified at reasonable According to the information and explanations given
intervals. No material discrepancies were noticed on such to us, no undisputed amounts payable in respect of
verification. income tax, sales tax, value added tax, custom duty,
service tax, excise were in arrears, as at March 31, 2017
iii. The Company has not granted any loans, secured or
for a period of more than six months from the date they
unsecured to companies, firms, limited liability partnerships
become payable.
or other parties covered in the register maintained under
section 189 of the Companies Act, 2013 (‘the Act’), and (b) According to the information and explanations given
therefore, the provisions of clauses (iii)(a), (iii)(b) & (iii)(c) of to us, the particulars of dues of Sales Tax as at March
the Order are not applicable to the Company. 31, 2017, which have not been deposited on account of
any dispute, are as follows:
iv. In our opinion and according to the information and
explanations given to us, the Company has complied with
the provisions of sections 185 and 186 of the Act, with
respect to the loans and investments made.

78 | Zydus Wellness Limited

 Financial period to act Nature of Dues Forum where dispute is pending amount
which it relates (iNr-Lakhs)
2003-04 APVAT Act, 2005 Sales tax High Court of Andhra Pradesh 1.70
2004-05 APVAT Act, 2005 Sales tax High Court of Andhra Pradesh 2.77
2009-10 APVAT Act, 2005 Sales tax The Appellete Dy. Commissioner 9.32
2009-10 APVAT Act, 2005 Sales tax The Appellete Dy. Commissioner 19.40
2010-11 APVAT Act, 2005 Sales tax The Appellete Dy. Commissioner 20.19
2011-12 APVAT Act, 2005 Sales tax High Court of Andhra Pradesh 1.44
2012-13 UPVAT Act, 2008 Sales tax Dy. Commissioner of Commercial Tax 0.73
2009-10 KVAT Act, 2003 Sales tax Dy. Commissioner (Appeals) 12.31
2009-10 MVAT Act, 2005 Sales tax Joint Commissioner (Appeals) 341.40
2010-11 MVAT Act, 2005 Sales tax Joint Commissioner (Appeals) 261.21

viii. In our opinion and according to the information and applicable and details of such transactions have been
explanations given to us, the Company has not defaulted in disclosed in the standalone Ind AS financial statements as
repayment of loans to bank. The company has not borrowed required by the applicable accounting standards.
or raised any money from debenture holders.
xiv. According to the information and explanations given to
ix. The Company did not raise any money by way of initial public us and based on our examination of the records of the
offer or further public offer (including debt instruments) and Company, the Company has not made any preferential
term loans during the year. Accordingly, paragraph 3 (ix) of allotment or private placement of shares or fully or partly
the Order is not applicable. convertible debentures during the year.

x. According to the information and explanations given to us, xv. According to the information and explanations given to
no material fraud by the Company or on the Company by its us and based on our examination of the records of the
officers or employees has been noticed or reported during Company, the Company has not entered into non-cash
the course of our audit. transactions with the directors or persons connected with
them. Accordingly, paragraph 3(xv) of the Order is not
xi. According to the information and explanations given to
applicable.
us and based on our examination of the records of the
Company, the Company has paid/provided for managerial xvi. The Company is not required to be registered under section
remuneration in accordance with the requisite approvals 45-IA of the Reserve Bank of India Act, 1934.
mandated by the provisions of section 197 read with
Schedule V to the Act.

xii. In our opinion and according to the information and

explanations given to us, the Company is not a Nidhi For Dhirubhai Shah & DoShi
company. Accordingly, paragraph 3(xii) of the Order is not Chartered Accountants
applicable. Firm’s Registration Number: 102511W

xiii. According to the information and explanations given to

KauShiK Shah
us and based on our examination of the records of the
Ahmedabad Partner
Company, transactions with the related parties are in
May 27, 2017 Membership number: 016502
compliance with sections 177 and 188 of the Act where

Annual Report 2016-17 | 79

annexure - b to the auditors’ report

report on the internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies act, 2013 (“the act”)

We have audited the internal financial controls over financial system over financial reporting and their operating effectiveness.
reporting of Zydus Wellness Limited (“the Company”) as of March Our audit of internal financial controls over financial reporting
31, 2017 in conjunction with our audit of the standalone Ind AS included obtaining an understanding of internal financial
financial statements of the Company for the year ended on that controls over financial reporting, assessing the risk that a material
date. weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed
Management’s responsibility for internal Financial Controls risk. The procedures selected depend on the auditor’s judgment,
The Company’s management is responsible for establishing and including the assessment of the risks of material misstatement of
maintaining internal financial controls based on the internal the standalone Ind AS financial statements, whether due to fraud
control over financial reporting criteria established by the or error.
Company considering the essential components of internal
We believe that the audit evidence we have obtained is sufficient
control stated in the Guidance Note on Audit of Internal Financial
and appropriate to provide a basis for our audit opinion on
Controls over Financial Reporting issued by the Institute of
the Company’s internal financial controls system over financial
Chartered Accountants of India (‘ICAI’). These responsibilities
reporting.
include the design, implementation and maintenance of
adequate internal financial controls that were operating effectively
Meaning of internal Financial Controls over Financial reporting
for ensuring the orderly and efficient conduct of its business,
A company’s internal financial control over financial reporting is a
including adherence to company’s policies, the safeguarding of
process designed to provide reasonable assurance regarding the
its assets, the prevention and detection of frauds and errors, the
reliability of financial reporting and the preparation of financial
accuracy and completeness of the accounting records, and the
statements for external purposes in accordance with generally
timely preparation of reliable financial information, as required
accepted accounting principles. A company’s internal financial
under the Companies Act, 2013.
control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that,
auditors’ responsibility
in reasonable detail, accurately and fairly reflect the transactions
Our responsibility is to express an opinion on the Company’s
and dispositions of the assets of the company; (2) provide
internal financial controls over financial reporting based on our
reasonable assurance that transactions are recorded as necessary
audit. We conducted our audit in accordance with the Guidance
to permit preparation of financial statements in accordance
Note on Audit of Internal Financial Controls over Financial
with generally accepted accounting principles, and that receipts
Reporting (the “Guidance Note”) and the Standards on Auditing,
and expenditures of the company are being made only in
issued by ICAI and deemed to be prescribed under section
accordance with authorizations of management and directors
143(10) of the Companies Act, 2013, to the extent applicable to
of the company; and (3) provide reasonable assurance regarding
an audit of internal financial controls, both applicable to an audit
prevention or timely detection of unauthorized acquisition, use,
of Internal Financial Controls and, both issued by the Institute
or disposition of the company’s assets that could have a material
of Chartered Accountants of India. Those Standards and the
effect on the financial statements.
Guidance Note require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance
inherent Limitations of internal Financial Controls over
about whether adequate internal financial controls over financial
Financial reporting
reporting was established and maintained and if such controls
Because of the inherent limitations of internal financial controls
operated effectively in all material respects.
over financial reporting, including the possibility of collusion
Our audit involves performing procedures to obtain audit or improper management override of controls, material
evidence about the adequacy of the internal financial controls misstatements due to error or fraud may occur and not be

80 | Zydus Wellness Limited

detected. Also, projections of any evaluation of the internal by the Company considering the essential components of
financial controls over financial reporting to future periods are internal control stated in the Guidance Note on Audit of Internal
subject to the risk that the internal financial control over financial Financial Controls Over Financial Reporting issued by the Institute
reporting may become inadequate because of changes in of Chartered Accountants of India.
conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
For Dhirubhai Shah & DoShi
opinion Chartered Accountants
In our opinion, the Company has, in all material respects, an Firm’s Registration Number: 102511W
adequate internal financial controls system over financial
reporting and such internal financial controls over financial KauShiK Shah
reporting were operating effectively as at March 31, 2017, based Ahmedabad Partner
on the internal control over financial reporting criteria established May 27, 2017 Membership number: 016502

Annual Report 2016-17 | 81

balance Sheet as at March 31, 2017
INR-Lakhs
Particulars Note No. as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
aSSETS:
Non-Current assets:
Property, Plant and Equipment 3 1,739 1,998 2,154
Capital Work-in-Progress 9 7 0
Goodwill 4 2,282 2,282 2,282
Other Intangible Assets 4 10 15 6
Financial Assets:
Investments 5 245 245 245
Loans 6 36 45 49
Other Financial Assets 7 3 3 3
Other Non-Current Assets 8 34 31 32
Asset for Current Tax [Net] 9 602 545 528
4,960 5,171 5,299
Current assets:
Inventories 10 626 368 411
Financial Assets:
Investments 11 25,163 20,681 9,782
Trade Receivables 12 46 27 33
Cash and Cash Equivalents 13 1,103 724 600
Bank Balance Other Than Cash and Cash Equivalents 14 28,375 22,706 28,881
Loans 15 131 65 58
Other Current Assets 16 69 34 35
Total 60,473 49,776 45,099
EQuiTY aND LiabiLiTiES:
Equity:
Equity Share Capital 17 3,907 3,907 3,907
Other Equity 18 51,812 43,950 39,518
55,719 47,857 43,425
Liabilities:
Non-Current Liabilities:
Financial Liabilities:
Other Financial Liabilities 19 54 42 21
Provisions 20 15 11 12
Deferred Tax Liabilities [Net] 21 68 122 160
137 175 193
Current Liabilities:
Financial Liabilities:
Borrowings 22 2,500 0 0
Trade Payables 23 1,543 1,146 960
Other Financial Liabilities 24 337 380 325
4,380 1,526 1,285
Other Current Liabilities 25 181 182 173
Provisions 26 56 36 23
4,617 1,744 1,481
Total 60,473 49,776 45,099
Significant accounting Policies 2
Notes to the Financial Statements 1 to 44

As per our report of even date For and on behalf of the Board
For Dhirubhai Shah & Doshi
Chartered Accountants
Firm Registration Number: 102511W
Kaushik D. Shah Dr. Sharvil P. Patel
Partner Chairman
Membership Number: 016502
Place: Ahmedabad amit b. Jain Dhaval N. Soni Tarun G. arora
Dated: May 27, 2017 Chief Financial Officer Company Secretary Whole Time Director

82 | Zydus Wellness Limited

Statement of Profit and Loss for the year ended March 31, 2017
INR-Lakhs
Particulars Note No. Year ended Year ended
March 31, 2017 March 31, 2016
Revenue from Operations 29 22,790 20,219
Other Income 30 2,455 3,012
Total income 25,245 23,231
EXPENSES:
Cost of Materials Consumed 31 7,161 5,860
Purchases of Stock-in-Trade 32 33 36
Changes in Inventories of Finished goods, Work-in-progress and Stock-in-Trade 33 (164) 14
Excise duty on sales 271 244
Employee Benefits Expense 34 1,990 1,803
Finance Costs 35 48 6
Depreciation, Amortisation and Impairment expenses 36 370 355
Other Expenses 37 4,657 4,510
Total Expenses 14,366 12,828
Profit before Tax 10,879 10,403
Less: Tax Expense:
Current Tax (1) 115
Deferred Tax 21 (54) (38)
(55) 77
Profit for the year 10,934 10,326
oThEr CoMPrEhENSiVE iNCoME: 38
Items that will not be reclassified to profit or loss:
Re-measurement gains/(losses) on post employment defined benefit plans (15) (16)
Income tax effect 0 0
Other Comprehensive Income for the year, [Net of Tax] (15) (16)
Total Comprehensive income for the year [Net of Tax] 10,919 10,310
Net profit attributable to:
Owners 10,934 10,326
other Comprehensive income attributable to:
Owners (15) (16)
Total Comprehensive income attributable to:
Owners 10,919 10,310
Basic & Diluted Earning per Equity Share [EPS] [in Rupees] 39 27.99 26.43
Significant Accounting Policies 2
Notes to the Financial Statements 1 to 44

As per our report of even date For and on behalf of the Board
For Dhirubhai Shah & Doshi
Chartered Accountants
Firm Registration Number: 102511W
Kaushik D. Shah Dr. Sharvil P. Patel
Partner Chairman
Membership Number: 016502
Place: Ahmedabad amit b. Jain Dhaval N. Soni Tarun G. arora
Dated: May 27, 2017 Chief Financial Officer Company Secretary Whole Time Director

Annual Report 2016-17 | 83

Cash Flow Statement for the year ended March 31, 2017
INR-Lakhs
Particulars Year ended March 31, 2017 Year ended March 31, 2016
a. Cash flows from operating activities:
Profit before Tax 10,879 10,403
Adjustments for:
Depreciation, Impairment and Amortisation
expenses 370 355
Loss on sale of assets [Net] 4 0
Profit on sale of investments [Net] (55) (28)
Interest income (2,398) (2,845)
Fair value gain on financial instrument at fair value (2) (140)
through statement of profit and loss
Interest expenses 48 5
Bad debts written off 0 0
Re-measurement of Employees benefits (Net) 1 (6)
Provisions for probable product expiry claims and
return of goods 8 2
Total (2,024) (2,657)
Operating profit before working capital changes 8,855 7,746
Adjustments for:
[Increase] in trade receivables (27) (5)
[Increase] in Non Current Financial Assets -Deposits 0 0
[Increase] / Decrease in Other Non Current Assets (1) 0
[Increase] / Decrease in inventories (258) 42
Decrease in Non Current Financial Assets-Loan 10 0
[Increase] / Decrease in Current Financial Assets (66) 7
Increase in Other Current Assets (20) (7)
Increase / [Decrease] in Other Current Financial (19) 186
Liabilities
Increase in trade payables 382 27
Increase in other Non Current Financial Liablities 11 22
Total 12 272
Cash generated from operations 8,867 8,018
Direct taxes paid [Net of refunds] (56) (132)
Net cash from operating activities 8,811 7,886
b. Cash flows from investing activities:
Purchase of fixed assets (138) (211)
Proceeds from sale of fixed assets 17 0
[Purchase]/Sale of current investments (10,898) (1,482)
Investment in Mutual Funds (Net) 6,469 (9,248)
Investment in Fixed Deposit (Net) (5,070) 6,239
Interest received 1,802 2,779
Net cash used in investing activities (7,818) (1,923)

84 | Zydus Wellness Limited

Cash Flow Statement for the year ended March 31, 2017
INR-Lakhs
Particulars Year ended March 31, 2017 Year ended March 31, 2016
C. Cash flows from financing activities:
Proceeds from Short Term Borrowings 2,500 0
Interest paid (48) (5)
Dividends paid (2,549) (4,840)
Tax on dividends paid (517) (994)
Net cash used in financing activities (614) (5,839)
Net increase in cash and cash equivalents 379 124
Cash and cash equivalents at the beginning of the year 724 600
Cash and cash equivalents at the end of the year 1,103 724

1 All figures in brackets are outflows.

2 Previous year’s figures have been regrouped wherever necessary.
3 Cash and cash equivalents comprise of: As at March 31 As at April 1
2017 2016 2015
a Cash on Hand 3 3 597
b Balances with Banks 1,100 721 3
c Total 1,103 724 600

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

For Dhirubhai Shah & Doshi

Chartered Accountants
Firm Registration Number: 102511W

Kaushik D. Shah Dr. Sharvil P. Patel

Partner Chairman
Membership Number: 016502

Place: Ahmedabad amit b. Jain Dhaval N. Soni Tarun G. arora

Dated: May 27, 2017 Chief Financial Officer Company Secretary Whole Time Director

Annual Report 2016-17 | 85

Statement of Change in Equity for the year ended March 31, 2017
a Equity Share Capital:
No. of Shares iNr-Lakhs
Equity Shares of iNr 10/- each, issued, Subscribed and Fully Paid-up:
As at April 1, 2015 3,90,72,089 3,907
As at March 31, 2016 3,90,72,089 3,907
As at March 31, 2017 3,90,72,089 3,907

b other Equity: INR-Lakhs

Particulars reserves and Surplus items of oCi Total
General reserve retained FVToCi
Earnings reserve
as at april 1, 2015 4,500 35,035 (17) 39,518
Add: Profit for the year 0 10,326 0 10,326
Add [Less]: Other Comprehensive income 0 0 (16) (16)
Total Comprehensive income 4,500 45,361 (33) 49,828
Transactions with Owners in their capacity as owners:
Dividends 0 (4,884) 0 (4,884)
Corporate Dividend Tax on Dividend 0 (994) 0 (994)
as at March 31, 2016 4,500 39,483 (33) 43,950
Add: Profit for the year 0 10,934 0 10,934
Add [Less]: Other Comprehensive income 0 0 (15) (15)
Total Comprehensive income 4,500 50,417 (48) 54,869
Transactions with Owners in their capacity as owners:
Dividends 0 (2,540) 0 (2,540)
Corporate Dividend Tax on Dividend 0 (517) 0 (517)
as at March 31, 2017 4,500 47,360 (48) 51,812

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

For Dhirubhai Shah & Doshi

Chartered Accountants
Firm Registration Number: 102511W

Kaushik D. Shah Dr. Sharvil P. Patel

Partner Chairman
Membership Number: 016502

Place: Ahmedabad amit b. Jain Dhaval N. Soni Tarun G. arora

Dated: May 27, 2017 Chief Financial Officer Company Secretary Whole Time Director

86 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 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 and Nutralite. The Company’s shares are listed
on the National Stock Exchange of India Limited [NSE] and BSE Limited [BSE].The registered office of the company is located at House
no. 6 & 7, Sigma Commerce Zone, Near Iscon Temple, Sarkhej-Gandhinagar Highway, Ahmedabad, Gujarat - 380015. These financial
statements were authorised for issue in accordance with a resolution of the directors on May 27, 2017.

Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS:

A The following notes provides list of the significant accounting policies adopted in the preparation of these financial statements.
These policies have been consistently applied to all the years presented unless otherwise stated.

1 basis of preparation:

A The financial statements have been prepared in accordance with Indian Accounting Standards [Ind AS] notified under the
Companies [Indian Accounting Standards] Rules, 2015, as amended and other relevant provisions of the Companies Act, 2013.

B For all periods up to and including the year ended March 31, 2016, the Company has prepared its financial statements in
accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with
paragraph 7 of the Companies [Accounts] Rules, 2014 [Indian GAAP]. The Company has adopted Ind AS as per Companies
[Indian Accounting Standards [Ind AS]] Rules, 2015 as notified under Section 133 of the Companies Act, 2013 for these Financial
statements beginning April 1, 2016. As per the principles of Ind AS 101, the transition date to Ind AS is April 1, 2015 and hence
the comparatives for the previous year ended March 31, 2016 and balances as on April 1, 2015 have been restated as per the
principles of Ind AS, wherever deemed necessary. Reconciliations and descriptions of the effect of the transition from previous
GAAP to Ind AS have been summarized in note 43 and note 44.

C The financial statements have been prepared on historical cost basis, except for the following assets and liabilities which have
been measured at fair value or revalued amount:
i Derivative financial instruments,
ii Certain financial assets and liabilities measured at fair value [refer accounting policy regarding financial instruments],
iii Defined benefit plans.

2 use of Estimates:
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and
assumptions.These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts
of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported
amounts of income and expenses during the period. Application of accounting policies that require critical accounting estimates
involving complex and subjective judgments are provided below. Accounting estimates could change from period to period.
Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of
changes in circumstances surrounding the estimates. Changes in estimates are reflected in the consolidated financial statements
in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

Critical estimates and judgments

a income Taxes:
Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid /
recovered for uncertain tax positions.
b Property, Plant and Equipment:
Annual Report 2016-17 | 87
Notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS: (contd.)
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect
of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual
value at the end of its life. Management reviews the residual values, useful lives and methods of depreciation of property,
plant and equipment at each reporting period end and any revision to these is recognised prospectively in current and future
periods. The lives are based on historical experience with similar assets as well as anticipation of future events, which may
impact their life, such as changes in technology.

c Employee benefits:

Significant judgments are involved in making estimates about the life expectancy, discounting rate, salary increase, etc. which
significantly affect the working of the present value of future liabilities on account of employee benefits by way of defined
benefit plans.

d Product warranty and expiry claims:

Significant judgments are involved in determining the estimated stock lying in the market with product shelf life and estimates
of likely claims on account of expiry of such unsold goods lying with stockist.

e impairment of assets and investments:

Significant judgment is involved in determining the estimated future cash flows from the investments, Property, Plant and
Equipment and Goodwill to determine its value in use to assess whether there is any impairment in its carrying amount as
reflected in the financials.

3 Foreign Currency Transactions:

The Company’s financial statements are presented in Indian Rupees [INR], which is the functional and presentation currency.

A The transactions in foreign currencies are stated at the rates of exchange prevailing on the dates of transactions.

B Foreign Exchange gains and losses resulting from settlement of such transactions and from the translation of monetary assets
and liabilities denominated in foreign currencies at the year end exchange rates are recognised in the Statement of Profit and
Loss.

C Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of Profit and Loss
within finance costs. All the other foreign exchange gains and losses are presented in the statement of Profit and Loss on a
net basis.

4 revenue recognition:

A Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue
can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the
consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or
duties collected on behalf of the government and is shown net of returns, trade allowances, rebates, value added taxes and
volume discounts.

B Excise duty is a liability of the Company as a manufacturer, which forms part of the cost of production, irrespective of whether
the goods are sold or not. Therefore, the recovery of excise duty flows to the Company on its own account and hence revenue
includes excise duty.

C Sales tax / Value Added Tax [VAT] is not received by the Company on its own account. Rather, it is tax collected on value added

88 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS: (contd.)
to the Goods by the Company on behalf of the government. Accordingly, it is excluded from revenue.

D The specific recognition criteria described below must also be met before revenue is recognised.

a Sale of Goods:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have
passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the
consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. The goods are
often sold with volume discounts / pricing incentives and customers have a right to return damaged or expired products.
Revenue from sales is based on the price in the sales contracts / MRP, net of discounts. Historical experience is used to
estimate and provide for damage or expiry claims. No element of financing is deemed present as the sales are made with
the normal credit terms as per prevalent trade practice and credit policy followed by the Company.

b Service income:

Service income is recognised as per the terms of contracts with the customers when the related services are performed
or the agreed milestones are achieved and are net of service tax, wherever applicable.

c interest income:

For all debt instruments measured either at amortised cost or at fair value through other comprehensive income [OCI],
interest income is recorded using the effective interest rate [EIR]. EIR is the rate that exactly discounts the estimated future
cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the
gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective
interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial
instrument [for example, prepayment, extension, call and similar options] but does not consider the expected credit
losses.

d Dividend:

Dividend income is recognised when the Company’s right to receive the payment is established, which is generally when
shareholders approve the dividend.

e other income:

Other income is recognised when no significant uncertainty as to its determination or realisation exists.

5 Taxes on income:

Tax expenses comprise of current and deferred tax.

a Current Tax:

a Current tax is measured at the amount expected to be paid on the basis of reliefs and deductions available in accordance
with the provisions of the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that
are enacted or substantively enacted, at the reporting date.

b Current tax items are recognised in correlation to the underlying transaction either in P&L, OCI or directly in equity.

b Deferred Tax:

Annual Report 2016-17 | 89

Notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS: (contd.)
a Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes at the reporting date.

b Deferred tax liabilities are recognised for all taxable temporary differences.

c Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and
any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, the carry forward of unused tax credits and unused tax
losses can be utilized.

d The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.

e Deferred tax assets and liabilities are measured at the tax rates [and tax laws] that have been enacted or substantively
enacted at the reporting date and are expected to apply in the year when the asset is realised or the liability is settled.

f Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

g Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities.

C MaT Credit Entitlement:

a Minimum Alternate Tax [MAT] paid in a year is charged to the Statement of Profit and Loss as current tax.

b The company recognizes MAT credit available as an asset based on historical experience of actual utilisation of such
credit and only when and to the extent there is a convincing evidence that the company will pay normal income tax
during the specified period i.e., the period for which MAT credit is allowed to be carried forward. Such asset, if any
recognised, is reviewed at each balance sheet date and the carrying amount is written down to the extent there is no
longer a convincing evidence that the company will be liable to pay normal tax during the specified period.

6 Property, Plant and Equipment:

A Freehold land is carried at historical cost. All other items of Property, Plant and Equipment are stated at historical cost of acquisition
/ construction less accumulated depreciation and impairment loss. Historical cost [Net of Input tax credit received / receivable]
includes related expenditure and pre-operative & project expenses for the period up to completion of construction / assets are
ready for its intended use, if the recognition criteria are met and the present value of the expected cost for the decommissioning
of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. The carrying
amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance
costs charged to the statement of profit and loss during the reporting period in which they are incurred, unless they meet the
recognition criteria for capitalisation under Property, Plant and Equipment. On transition to Ind AS, the Company has elected
to continue with the carrying value of all its Property, Plant and Equipment recognised as at April 1, 2015 measured as per the
previous GAAP and use that carrying value as the deemed cost of the Property, Plant and Equipment.

B Where components of an asset are significant in value in relation to the total value of the asset as a whole, and they have
substantially different economic lives as compared to principal item of the asset, they are recognised separately as independent
items and are depreciated over their estimated economic useful lives.

C Depreciation on tangible assets is provided on “straight line method” based on the useful lives as prescribed under Schedule

90 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS: (contd.)
II of the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair
approximation of the period over which the assets are likely to be used. However, management reviews the residual values,
useful lives and methods of depreciation of Property, Plant and Equipment at each reporting period end and any revision to
these is recognised prospectively in current and future periods.

D Depreciation on impaired assets is calculated on its residual value, if any, on a systematic basis over its remaining useful life.

E Depreciation on additions / disposals of the fixed assets during the year is provided on pro-rata basis according to the period
during which assets are put to use.

F Where the actual cost of purchase of an asset is below INR 10,000/-, the depreciation is provided @ 100%.

G Capital work in progress is stated at cost less accumulated impairment loss, if any.

H An item of Property, Plant and Equipment and any significant part initially recognised is derecognised upon disposal or when
no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset
[calculated as the difference between the net disposal proceeds and the carrying amount of the asset] is included in the
income statement when the asset is derecognised.

7 intangible assets:

A Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at
cost less any accumulated amortisation and accumulated impairment losses.

B Internally generated intangibles are not capitalised and the related expenditure is reflected in statement of profit and loss in
the period in which the expenditure is incurred.

C Goodwill arising on acquisition of business is assessed at each balance sheet date for any impairment loss.

D Trade Marks, Technical Know-how Fees and other similar rights are amortised over their estimated economic life.

E Capitalised cost incurred towards purchase / development of software is amortised using straight line method over its useful
life of four years as estimated by the management at the time of capitalisation.

F Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at
the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life
continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

G An item of intangible asset initially recognised is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on de-recognition of the asset [calculated as the difference between
the net disposal proceeds and the carrying amount of the asset] is included in the income statement when the asset is
derecognised.

8 research and Development Cost:

A Expenditure on research and development is charged to the Statement of Profit and Loss of the year in which it is incurred.

B Capital expenditure on research and development is given the same treatment as Property, Plant and Equipment.

9 borrowing Costs:

Annual Report 2016-17 | 91

Notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS: (contd.)
A Borrowing costs consist of interest and other borrowing costs that are incurred in connection with the borrowing of funds.
Other borrowing costs include ancillary charges at the time of acquisition of a financial liability, which is recognised as per EIR
method.

B Borrowing costs that are directly attributable to the acquisition/ construction of a qualifying asset are capitalised as part of the
cost of such assets, up to the date, the assets are ready for their intended use.

10 impairment of assets:

The Property, Plant and Equipment and intangible assets are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal
and value in use. For the purposes of assessing impairment, the assets are grouped at the lowest levels for which there are separately
identifiable cash flows which are largely independent of the cash inflows from other assets or groups of assets [cash generating
units]. Non-financial assets other than goodwill that suffered an impairment loss are reviewed for possible reversal of impairment
at the end of each reporting period. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset
is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the
estimate of recoverable amount.

11 inventories:

Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location
and condition are accounted for as follows:

A Raw Materials, Stores & Spare Parts, Packing Materials, Finished Goods, Stock-in-Trade and Works-in-Progress are valued at
lower of cost and net realisable value.

B Cost [Net of CENVAT and Input tax credit availed] of Raw Materials, Stores & Spare Parts, Packing Materials, Finished Goods &
Stock-in-Trade is determined on Moving Average Method.

C Costs of Finished Goods and Works-in-Progress are determined by taking material cost [Net of CENVAT and Input tax credit
availed], labour and relevant appropriate overheads based on the normal operating capacity, but excluding borrowing
costs.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
the estimated costs necessary to make the sale. Write down of inventories to net realisable value is recognised as an expenses
and included on “Changes in Inventories of Finished goods, Work-in-progress and Stock-in-Trade” and “Cost of Material
Consumed” in the relevant note in the Statement of Profit and Loss.

12 Cash and Cash Equivalents:

Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances,
demand deposits with banks where the original maturity is three months or less.

13 Leases:

as a lessee:

The determination of whether an arrangement is [or contains] a lease is based on the substance of the arrangement at the
inception of the lease. Lease under which the Company assumes potentially all the risk and rewards of ownership are classified
as finance lease. When acquired, such assets are capitalised at fair value or present value of the minimum lease payment at the
inception of the lease, whichever is lower. Lease payments under operating leases are recognised as an expenses on straight line
|
92 Zydus Wellness Limited
Notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS: (contd.)
basis in Net Profit in the statement of profit and loss over the lease term, unless the payments are structured to increase in line with
expected general inflation to compensate lessor’s expected inflationary cost increases.

as a lessor:

Lease income from operating leases where the Company is lessor is recognised in income on a straight line basis over the lease term
unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary
cost increases. The respective leased assets are included in the balance sheet based on their nature.

14 Provisions, Contingent Liabilities and Contingent assets:

A Provisions are recognised when the Company has a present obligation as a result of past events and it is probable that
the outflow of resources will be required to settle the obligation and in respect of which reliable estimates can be made.
A disclosure for contingent liability is made when there is a possible obligation, that may, but probably will not require an
outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision/ disclosure is made. Provisions and contingencies are reviewed at each balance sheet
date and adjusted to reflect the correct management estimates. Contingent assets are not recognised but are disclosed
separately in financial statements.

B If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability.

15 Provision for Product Expiry Claims:

Provisions for product expiry related costs are recognised when the product is sold to the customer. Initial recognition is based on
historical experience. The initial estimate of product expiry claim related costs is revised annually.

16 Employee benefits:

a Short term obligations:

Liabilities for wages and salaries, including leave encashments that are expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service are recognised in respect of employees’ services up to
the end of the reporting and are measured by the amounts expected to be paid when the liabilities are settled. The liabilities
are presented as current employee benefit obligations in the balance sheet.

b Long term employee benefits obligations:

a Leave Wages and Sick Leave:

The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months period after the end
of the period in which the employees render the related service. They are therefore, measured at the present value of
expected future payments to be made in respect of services provided by employees upto the end of the reporting period
using the projected unit credit method, as determined by actuarial valuation, performed by an independent actuary. The
benefits are discounted using the market yields at the end of reporting period that have the terms approximating to the
terms of the related obligation. Gains and losses through re-measurements are recognised in statement of profit and loss.

b Defined benefit Plans:

Gratuity:

Annual Report 2016-17 | 93

Notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS: (contd.)
The Company operates a defined benefit gratuity plan with contributions to be made to a separately administered fund
through Life Insurance Corporation of India through Employees Group Gratuity Plan. The Liability or asset recognised in
the balance sheet in respect of defined benefit gratuity plan is the present value of the defined benefit plan obligation
at the end of the reporting period less the fair value of the plan assets. The Liabilities with regard to the Gratuity Plan are
determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the projected
unit credit method.
The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated
future cash outflows by reference to the market yields at the reporting period on government bonds that have terms
approximating to the terms of the related obligation.
The net interest cost in calculated by applying the discounting rate to the net balance of the defined benefit obligation
and the fair value of plan assets. Such costs are included in employee benefit expenses in the statement of Profit and
Loss.
Re-measurements gains or losses arising from experience adjustments and changes in actuarial assumptions are
recognised immediately in the period in which they occur directly in “other comprehensive income” and are included in
retained earnings in the statement of changes in equity and in the balance sheet. Re-measurements are not reclassified
to profit or loss in subsequent periods.
The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of
profit and loss:

i Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non routine
settlements;

ii Net interest expense or income.

c Defined Contribution Plans - Provident Fund Contribution:

Eligible employees of the Company receive benefits from a provident fund, which is a defined contribution plan. Both
the eligible employee and the company make monthly contributions to the provident fund plan equal to a specified
percentage of the covered employee’s salary. Amounts collected under the provident fund plan are deposited in a
government administered provident fund. The companies have no further obligation to the plan beyond its monthly
contributions. Such contributions are accounted for as defined contribution plans and are recognised as employees
benefit expenses when they are due in the statement of profit and loss.

C Employee Separation Costs:

The compensation paid to the employees under Voluntary Retirement Scheme is expensed in the year of payment.

17 Dividends :

The final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded
as liability on the date of declaration by the Company’s Board of Directors.

18 Excise Duty:

Excise duty is accounted at a concessional rate as per Notification No. 1/2011-CE without availing CENVAT credit.

19 Financial instruments:
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
another entity.

94 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS: (contd.)
a Financial assets:

a initial recognition and measurement:

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through
profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial
assets that require delivery of assets within a time frame established by regulation or convention in the market place
[regular way trades] are recognised on the settlement date, i.e., the date that the Company settle to purchase or sell the
asset.

b Subsequent measurement:

For purposes of subsequent measurement, financial assets are classified as follows:

Investment in mutual funds instruments at fair value through profit or loss [FVTPL]:

FVTPL is for investment in mutual funds instruments. Any such instruments, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Such instruments included within the FVTPL
category are measured at fair value with all changes recognized in the P&L.

c Derecognition:

A financial asset is primarily derecognised when:

i The rights to receive cash flows from the asset have expired, or

ii The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and
either [a] the Company has transferred substantially all the risks and rewards of the asset, or [b] the Company has
neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the
asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the
Company continues to recognise the transferred asset to the extent of the Company’s continuing involvement. In
that case, the Company also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Company has retained. When the Company has
transferred the risk and rewards of ownership of the financial asset, the same is derecognised.

d impairment of financial assets:

In accordance with Ind AS 109, the Company applies expected credit loss [ECL] model for measurement and recognition
of impairment loss on the following financial assets and credit risk exposure:

a Financial assets that are debt instruments, and are measured at amortised cost

b Trade receivables or any contractual right to receive cash or another financial asset

c Financial assets that are debt instruments and are measured as at FVTOCI

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on Point c provided

Annual Report 2016-17 | 95

Notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS: (contd.)
above.The application of simplified approach require the company to recognise the impairment loss allowance
based on lifetime ECLs at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that
whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly,
lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer
a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss
allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a
financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are
possible within 12 months after the reporting date. ECL is the difference between all contractual cash flows that are
due to the Company in accordance with the contract and all the cash flows that the entity expects to receive [i.e., all
cash shortfalls], discounted at the original EIR.
ECL impairment loss allowance [or reversal] recognized during the period is recognized as income/ expense in the
statement of profit and loss. The balance sheet presentation for various financial instruments is described below:

a Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables: ECL is presented
as an allowance which reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not
reduce impairment allowance from the gross carrying amount.

b Financial guarantee contracts: ECL is presented as a provision in the balance sheet, i.e. as a liability.

For assessing increase in credit risk and impairment loss, the Company combines financial instruments on the basis of shared
credit risk characteristics.

b Financial liabilities:

a initial recognition and measurement:

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All
financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.

b Subsequent measurement:

Subsequently all financial liabilities are measured as amortised cost except for Loans and borrowings, as described below:

Loans and borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the
EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the
EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of
profit and loss.

c Derecognition:

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of
96 | Zydus Wellness Limited
Notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS: (contd.)
an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement
of profit and loss.

d Embedded derivatives:
An embedded derivative is a component of a hybrid [combined] instrument that also includes a non-derivative host contract –
with the effect that some of the cash flows of the combined instrument vary in a way similar to a standalone derivative. Derivatives
embedded in all other host contracts are accounted for as separate derivatives and recorded at fair value if their economic
characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or
designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value
recognised in profit or loss, unless designated as effective hedging instruments.

C reclassification of financial assets:

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification
is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a
reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model
are expected to be infrequent.The Company’s senior management determines change in the business model as a result of external
or internal changes which are significant to the Company’s operations. Such changes are evident to external parties. A change in the
business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the
Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of
the immediately next reporting period following the change in business model as per Ind AS 109.

D offsetting of financial instruments:

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities
simultaneously.

20 Fair Value Measurement:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability
takes place either:

a In the principal market for the asset or liability, or

b In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account
a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs. All assets and liabilities for which fair value
is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level
input that is significant to the fair value measurement as a whole:
a Level 1 - Quoted [unadjusted] market prices in active markets for identical assets or liabilities
b Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly

Annual Report 2016-17 | 97

Notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SigNifiCaNt aCCouNtiNg poliCieS: (contd.)
observable

c Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For
assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have
occurred between levels in the hierarchy by re-assessing categorisation [based on the lowest level input that is significant to the fair value
measurement as a whole] at the end of each reporting period.

21 Earnings per Share:

Basic earnings per share are calculated by dividing the net profit or loss [excluding other comprehensive income] for the year attributable to
equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity
shares outstanding during the year is adjusted for events such as bonus issue, bonus element in a right issue, shares split and reserve share
splits [consolidation of shares] that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss [excluding other comprehensive income] for the year
attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of
all dilutive potential equity shares.

b Standards issued but not yet effective:

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017,
notifying amendments to Ind AS 7 “Statement of cash flows” and Ind AS 102 “Share-based payment”. These amendments are in
accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7 “Statement of cash flows”
and IFRS 2 “‘Share-based payment”, respectively. The amendments are applicable to the Company from April 1, 2017.

amendment to ind aS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in
liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion
of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet
the disclosure requirement.
The Company is evaluating the requirements of the amendment and its effect on the financial statements.
amendment to ind aS 102:
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards
and awards that include a net settlement feature in respect of withholding taxes. It clarifies that the fair value of cash-settled awards
is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting
conditions are reflected in the “fair values”, but non-market performance conditions and service vesting conditions are reflected in the
estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled
share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the
transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that include a net
settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority
is treated as if it was part of an equity settlement. This amendment does not apply to the Company.

98 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017

Note: 3 - property, plaNt aNd equipmeNt: INR-Lakhs

Freehold Leasehold buildings Plant and Furniture Vehicles office Total
Land Land Equipment and Equipment
Fixtures
Gross block:
as at april 1, 2015* 49 3 520 3,033 227 110 120 4,062
Additions 0 0 9 93 22 59 14 197
Disposals 0 0 0 (4) 0 0 0 (4)
Other adjustments 0 0 0 0 0 0 0 0
as at March 31, 2016 49 3 529 3,122 249 169 134 4,255
Additions 0 0 0 91 2 29 5 127
Disposals 0 0 0 (8) 0 (35) 0 (43)
Other adjustments 0 0 0 0 0 0 0 0
as at March 31, 2017 49 3 529 3,205 251 163 139 4,339
Depreciation and Impairment:
as at april 1, 2015* 0 3 152 1,583 53 35 82 1,908
Depreciation for the year 0 0 17 286 21 16 12 352
Impairment for the year 0 0 0 0 0 0 0 0
Disposals 0 0 0 (3) 0 0 0 (3)
as at March 31, 2016 0 3 169 1,866 74 51 94 2,257
Depreciation for the year 0 0 17 293 23 19 13 365
Impairment for the year 0 0 0 0 0 0 0 0
Disposals 0 0 0 (7) 0 (15) 0 (22)
as at March 31, 2017 0 3 186 2,152 97 55 107 2,600
Net block:
as at april 1, 2015* 49 0 368 1,450 174 75 38 2,154
as at March 31, 2016 49 0 360 1,256 175 118 40 1,998
as at March 31, 2017 49 0 343 1,053 154 108 32 1,739

Annual Report 2016-17 | 99

Notes to the Financial Statements for the year ended March 31, 2017
Note: 4 - iNtaNgible aSSetS: INR-Lakhs
other intangible assets
Goodwill brands/ Computer Commercial Technical Total
Trademarks Software rights Know-how
Gross block:
as at april 1, 2015* 2,282 5 7 10 2 24
Additions 0 0 12 0 0 12
Disposals 0 0 0 0 0 0
Other adjustments 0 0 0 0 0 0
as at March 31, 2016 2,282 5 19 10 2 36
Additions 0 0 0 0 0 0
Disposals 0 0 0 0 0 0
Other adjustments 0 0 0 0 0 0
as at March 31, 2017 2,282 5 19 10 2 36
Amortisation and Impairment:
as at april 1, 2015* 0 5 3 9 1 18
Amortisation for the year 0 0 2 1 0 3
Impairment for the year 0 0 0 0 0 0
Disposals 0 0 0 0 0 0
as at March 31, 2016 0 5 5 10 1 21
Amortisation for the year 0 0 5 0 0 5
Impairment for the year 0 0 0 0 0 0
Disposals 0 0 0 0 0 0
as at March 31, 2017 0 5 10 10 1 26
Net block:
as at april 1, 2015* 2,282 0 4 1 1 6
as at March 31, 2016 2,282 0 14 0 1 15
as at March 31, 2017 2,282 0 9 0 1 10
• Represents deemed cost on the date of transition to ind as, Gross block & accumulated depreciation from the previous GAAP have been disclosed for the purpose of better
understanding of the original cost of assets.

Note: 5 - NoN CurreNt fiNaNCial aSSet - iNveStmeNtS:

as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
Long Term Investments:
Investment in the Fixed Capital of a Partnership Firm [*] 245 245 245
Total [Aggregate Book Value of Investments] 245 245 245
[*] The Company is a partner in Zydus Wellness - Sikkim, relevant details
of which are as under:
Fixed Capital 250 250 250
Current Capital 23,212 12,123 10,463
Total Capital of the Firm 23,462 12,373 10,713
Name of Partners and their Profit Sharing Ratio:
Zydus Wellness Limited 98% 98% 98%
Zydus Wellness Staff Welfare Trust 2% 2% 2%

100 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 6 - loaNS: INR-Lakhs
as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
[Unsecured, Considered Good unless otherwise stated]
Security Deposits 33 38 36
Others:
Considered good 3 7 13
Total 36 45 49

Note: 7 - otherS fiNaNCial aSSetS:

as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
[Unsecured, Considered Good unless otherwise stated]
Deposits 3 3 3
Total 3 3 3

Note: 8 - other NoN-CurreNt aSSetS:

as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
[Unsecured, Considered Good unless otherwise stated]
Balances with Statutory Authorities 32 31 31
Capital Advances 2 0 1
Total 34 31 32

Note: 9 - aSSet for CurreNt tax [Net]:

as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
[Unsecured, Considered Good unless otherwise stated]
Advance payment of Tax [Net of provision for taxation of INR 285 Lakhs 602 545 528
{as at March 31, 2016: INR 1214 Lakhs, (as at April 1, 2015: INR 3818
Lakhs)}]
Total 602 545 528

Annual Report 2016-17 | 101

Notes to the Financial Statements for the year ended March 31, 2017
Note: 10 - iNveNtorieS: INR-Lakhs
as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
[The Inventory is valued at lower of cost and net realisable value]
Classification of Inventories:
Raw Materials 160 86 89
Work-in-progress 0 1 0
Finished Goods 407 226 246
Stock-in-Trade 4 15 9
Others:
Packing Materials 55 40 67
Total 626 368 411
The above includes Goods in transit as under:
Finished Goods 27 13 0

Note: 11 - CurreNt fiNaNCial aSSetS - iNveStmeNtS:

Nos. as at as at as at
[*] March 31, 2017 March 31, 2016 april 1, 2015
Investment in Current Capital of a Partnership Firm [*] 22,162 11,265 9,782
Investment in Mutual Funds [Quoted] [Valued at fair
value through profit or loss]:
ICICI - Liquid - Direct Plan - Growth 1246890.57 3,001 0 0
Axis Liquid Fund-Direct Growth[*] [301727.19] 0 5,067 0
HDFC Liquid Fund-Direct Growth[*] [111859.55] 0 3,345 0
Tata Money Market Fund Direct Growth[*] [42032.91] 0 1,004 0
3,001 9,416 0

Total 25,163 20,681 9,782

A i Aggregate amount of quoted investments 3,001 9,416 0
ii Market value of quoted investments 3,001 9,416 0
Aggregate amount of unquoted investments 22,162 11,265 9,782
B Explanations:
In “Nos. [*]” figures of previous year are stated in [ ].

Note: 12 - trade reCeivableS:

as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
Unsecured Considered good 46 27 33
Total 46 27 33

102 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 13 - CaSh aNd CaSh equivaleNtS: INR-Lakhs
as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
Balances with Banks - in Current Accounts 1,100 721 597
Cash on Hand 3 3 3
Total 1,103 724 600
In accordance with MCA notification G.S.R. 308 (E) dated March 30,
2017 details of Specified Bank Notes [SBN] and Other Denomination
Notes [ODN] held and transacted during the period from November 8,
2016 to December 30, 2016 are given below :
Particulars Total SbN oDN
Closing cash on hand as on November 8, 2016 0.50 0.21 0.29
Permitted receipts 2.92 0.00 2.92
Permitted payments (2.87) 0.00 (2.87)
Amount deposited in banks (0.30) (0.21) (0.09)
Closing cash on hand as on December 30, 2016 0.25 0.00 0.25

Note: 14 - baNk balaNCe other thaN CaSh aNd CaSh equivaleNtS:

as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
Earmarked balances with bank for :
Unpaid dividend 78 87 43
Fixed Deposit with banks 28,297 22,619 28,838
Total 28,375 22,706 28,881

Note: 15 - CurreNt fiNaNCial aSSetS :

as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
[Unsecured, Considered Good]
Advances recoverable in cash or in kind or for value to be received 131 65 58
Total 131 65 58

Note: 16 - other CurreNt aSSetS:

as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
[Unsecured, Considered Good]
Balances with Statutory Authorities 39 23 28
Advances to Suppliers 15 0 0
Prepaid Expenses 15 11 7
Total 69 34 35

Annual Report 2016-17 | 103

Notes to the Financial Statements for the year ended March 31, 2017
Note: 17 - equity Share Capital: INR-Lakhs
as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
authorised:
4,50,00,000 [as at March 31, 2016: 4,50,00,000 {as at April 1, 2015:
4,50,00,000}] Equity Shares of INR 10/- each 4,500 4,500 4,500
Total 4,500 4,500 4,500
issued, Subscribed and Paid-up:
3,90,72,089 [as at March 31, 2016: 3,90,72,089 {as at April 1, 2015:
3,90,72,089}] Equity Shares of INR 10/- each fully paid up 3,907 3,907 3,907
Total 3,907 3,907 3,907
A There is no change in the numbers of equity shares at the
beginning and end of the year.
Number of shares at the beginning and end of the year 3,90,72,089 3,90,72,089 3,90,72,089
B The Company has only one class of equity shares having a
par value of INR 10/- each per share. Each holder of equity share
is entitled to one vote per share. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders
in the Annual General Meeting, except in the case of interim
dividend. In the event of liquidation of the Company, the
equity shareholders shall be entitled to proportionate share
of their holding in the assets remaining after distribution of all
preferential amounts.
C Details of Shareholder holding more than 5% of aggregate
Equity Shares of INR 10/- each
[as at March 31, 2016: INR 10/- {as at April 1, 2015: INR 10/-} each],
fully paid:
Cadila Healthcare Limited
Number of Shares 2,81,63,755 2,81,63,755 2,81,63,755
% to total share holding 72.08% 72.08% 72.08%
D Number of Shares held by Holding Company
Cadila healthcare Limited 2,81,63,755 2,81,63,755 2,81,63,755

104 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 18 - other equity: INR-Lakhs
as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
General reserve: [*]
Balance as per last Balance Sheet 4,500 4,500 4,500
Fair Value through other Comprehensive income [FVToCi] reserve:
Balance as per last Balance Sheet (33) (17) 0
Add: Adjusted from Retained Earnings on transition to Ind AS 0 0 (17)
[Less]/ Add: [Debited]/ Credited during the year (15) (16) 0
(48) (33) (17)
retained Earnings:
Balance as per last Balance Sheet 39,483 35,035 24,149
Less: Additional depreciation upon revision in useful lives of tangible
assets 0 0 (26)
Add: Adjusted to FVTOCI reserve on transition to Ind AS 0 0 17
Less: Adjusted to reserve on transition to Ind AS 0 0 0
Add: Profit for the year 10,934 10,326 10,895
50,417 45,361 35,035
Less: Dividends:
Dividends 2,540 4,884 0
Corporate Dividend Tax on Dividend 517 994 0
3,057 5,878 0
Balance as at the end of the year 47,360 39,483 35,035
Total 51,812 43,950 39,518
[*] General Reserve can be used for the purposes and as per guidelines
prescribed in the Companies Act, 2013.

Note: 19 - other fiNaNCial liabilitieS:

as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
Trade Deposits 22 6 8
Others 32 36 13
Total 54 42 21

Note: 20 - proviSioNS:
as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
Provision for Employee Benefits 15 11 12
Total 15 11 12

Annual Report 2016-17 | 105

Notes to the Financial Statements for the year ended March 31, 2017
Note: 20 - proviSioNS: (contd.)

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 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 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.

INR-Lakhs
as at March 31, 2017 as at March 31, 2016
Medical Leave Leave Wages Gratuity Medical Leave Leave Wages Gratuity
b Change in the present value of
the defined benefit obligation:
Opening defined benefit obligation 12 120 159 12 117 119
Interest cost 1 9 13 1 8 9
Current service cost 2 18 27 3 17 24
Benefits paid 0 (45) (30) 0 (36) (7)
Actuarial [gains] / losses on obligation 1 11 13 (4) 14 14
Closing defined benefit obligation 16 113 182 12 120 159
C Change in the fair value of plan assets:
Opening fair value of plan assets 0 114 143 0 106 121
Expected return on plan assets 0 9 11 0 9 11
Adjustment of Opening fund 0 0 0 0 0 0
Return on planned assets 0 0 (2) 0 0 (2)
Contributions by employer 0 0 20 0 0 20
Benefits paid 0 0 (30) 0 0 (7)
Actuarial [losses] /gains 0 1 0 0 (1) 0
Closing fair value of plan assets 0 124 142 0 114 143
Total actuarial [losses] / gains to be
recognised (1) (10) (15) (4) 15 16
D actual return on plan assets:
Expected return on plan assets 0 9 9 0 9 9
Actuarial [losses] / gains on plan 0 1 0 0 (1) 0
assets

106 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 20 - proviSioNS: (contd.)
Actual return on plan assets 0 10 9 0 8 9
INR-Lakhs
as at March 31, 2017 as at March 31, 2016
Medical Leave Leave Wages Gratuity Medical Leave Leave Wages Gratuity
E amount recognised in the balance sheet:
Liabilities / [Assets] at the end of the year 16 113 182 12 120 159
Fair value of plan assets at the end of the
year 0 (124) (142) 0 (114) (143)
Difference 16 (11) 40 12 6 16
Liabilities / [Assets] recognised in the
Balance Sheet 16 (11) 40 12 6 16
F Expenses / [incomes] recognised in the
Statement of Profit and Loss:
Current service cost 2 18 27 3 17 24
Interest cost on benefit obligation 1 9 13 1 8 9
Expected return on plan assets 0 (9) (11) 0 (9) (11)
Net actuarial [gains] / losses in the year 1 11 0 (4) 15 0
Net expenses / [benefits] 4 29 29 0 31 22
G Movement in net liabilities recognised in
balance Sheet:
Opening net liabilities 12 6 16 12 11 (2)
Expenses as above [P & L Charge] 4 29 29 0 31 22
Amount recognised in OCI 0 0 15 0 0 16
Contribution to plan assets 0 0 (20) 0 0 (20)
Benefits Paid 0 (45) 0 0 (36) 0
Liabilities / [Assets] recognised in the
Balance Sheet 16 (10) 40 12 6 16
h Principal actuarial assumptions
for defined benefit plan and long term
employment benefit plan:
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015
Discount rate [*] 6.95% 7.80% 7.80%
Annual increase in salary cost [#] 12% for 1st 4 years, 9% 12% for 1st 5 years, 9% 7.50% for all years
thereafter thereafter
[*] The rate of discount is considered based on market yield on Government Bonds having currency and terms in consistence
with the currency and terms of the post employment benefit obligations.
[#] The estimates of future salary increases are considered in actuarial valuation, taking into account inflation, seniority, promotion
and other relevant factors such as supply and demand in the employment market.
i The categories of plan assets as a % of
total plan assets are:
Insurance plan 0.00% 100.00% 100.00% 0.00% 100.00% 100.00%

Annual Report 2016-17 | 107

Notes to the Financial Statements for the year ended March 31, 2017
Note: 20 - proviSioNS: (contd.)

J amount recognised in current and previous four years: INR-Lakhs

as at as at as at as at as at
March 31, 2017 March 31, 2016 March, 31, 2015 March, 31, 2014 March, 31, 2013
Gratuity:
Defined benefit obligation 182 159 119 88 87
Fair value of Plan Assets 142 143 121 110 123
Deficit / [Surplus] in the plan 40 16 (2) (22) (36)
Actuarial Loss / [Gain] on Plan Obligation 13 14 16 (2) 32
Actuarial Loss / [Gain] on Plan Assets 0 0 (2) (3) 0
The expected contributions for Defined Benefit Plan for the next financial year will be in line with FY 2016-17.

Sensitivity analysis:
a quantitative sensitivity analysis for significant assumption as is as shown below:

a Medical Leave:
as at March 31, 2017 as at March 31, 2016
Assumption Discount rate
Sensitivity Level - Discount Rate 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] (2) 0 (1) 0
Assumption Annual increase in salary cost
Sensitivity Level- Salary Growth 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] 0 (2) 0 (1)

b Leave Wages:
as at March 31, 2017 as at March 31, 2016
Assumption Discount rate
Sensitivity Level - Discount Rate 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] (3) 4 (10) (4)
Assumption Annual increase in salary cost
Sensitivity Level- Salary Growth 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] 4 (3) (3) 4

108 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 20 - proviSioNS: (contd.)

C Gratuity: INR-Lakhs
as at March 31, 2017 as at March 31, 2016
Assumption Discount rate
Sensitivity Level - Discount Rate 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] (7) 6 (5) 5
Assumption Annual increase in salary cost
Sensitivity Level- Salary Growth 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] 6 (6) 4 (5)

The following payments are expected contributions to the defined benefit plan in future years:
as at March 31, 2017 as at March 31, 2016
Within the next 12 months [next annual reporting period] 46 58
Between 2 and 5 years 120 114
Between 5 and 10 years 124 112
Total expected payments 290 284

Note: 21 - deferred tax:

a break up of Deferred Tax Liabilities and assets into major components of the respective balances are as under:
as at Charge for as at Charge for as at
april 1 2015 the previous March 31 2016 the current March 31 2017
year year
Deferred Tax Liabilities:
Depreciation 173 (22) 151 (48) 103
Deferred Tax Assets:
Employee benefits 11 15 26 4 30
Provision for Expiry and Breakages 2 1 3 2 5
Total 13 16 29 6 35
Net Deferred Tax Liabilities 160 (38) 122 (54) 68
b The Net Deferred Tax Liabilities of INR (54) [Previous Year: INR (38)] Lakhs for the year has been provided in the Statement of Profit
and Loss.

C The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current
tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Annual Report 2016-17 | 109

Notes to the Financial Statements for the year ended March 31, 2017
The major components of income tax expense for the years ended March 31, 2017 and March 31, 2016 are :

Statement of profit and loss: INR-Lakhs

as at March 31, 2017 as at March 31, 2016
Profit or loss section:
Current income tax:
Current income tax charge (1) 115
Adjustments in respect of current income tax of previous year 0 0
Deferred tax:
Relating to origination and reversal of temporary differences (54) (38)
income tax expense reported in the statement of profit and loss (55) 77

reconciliation of tax expense and accounting profit multiplied by india’s domestic tax rate for March 31, 2017 and March 31,
2016:
as at March 31, 2017 as at March 31, 2016
Accounting profit before tax 10,879 10,403
at india’s statutory income tax rate of 30.9% (March 31, 2016: 33.063%) 3,362 3,440
Adjustments in respect of current income tax of previous years (1) (1)
Utilisation of previously unrecognised tax losses 0 (72)
Effect of Special tax deductions (like CSR) (47) (49)
Effect of MAT Credit not accounted for 33 38
Adjustments on accounts of IndAS provisions 44 (52)
Adjustments in respect of income exempt from tax (3,490) (3,200)
(Share of profit from partnership firm)
Effect of Non-deductible expenses for tax purposes:
Other non-deductible expenses 5 5
Other 39 (32)
at the effective income tax rate of 27% (March 31, 2016: 0.75%) (55) 77
Income tax expense reported in the statement of profit and loss (55) 77

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax
liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. The Company
has tax losses which arose in India of INR 357 Lakhs (March 31, 2016: INR Nil, April 1, 2015 INR 218 Lakhs) that are available for offsetting
for eight years against future taxable profits of the companies in which the losses arose. Majority of these losses are allowed to be carry
forward for indefinite period.

Deferred tax assets have not been recognised in respect of these losses as they may not be used to offset taxable profits elsewhere in
the Company and there are no other tax planning opportunities or other evidence of recoverability in the near future. If the Company
was able to recognise all unrecognised deferred tax assets, the profit would increase by INR 110 Lakhs and MAT credit not recognised as
at March 31, 2017 is INR 78 Lakhs eligible for set-off upto 15 years from the year in which the same arises.

110 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 22 - CurreNt fiNaNCial liablitieS -borrowiNgS: INR-Lakhs
as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
Loans repayable on Demand:
Working Capital Loans from Banks [Unsecured] [*] 2,500 0 0
Total 2,500 0 0
[*] Working capital loan which is repayable on demand, is availed at the
interest rate of T-bill rate plus 5 bps. The outstanding amount of loan
as at March 31, 2017 is INR 2500 (as at March 31, 2016 INR Nil) Lakhs

Note: 23 - trade payableS:

as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
Micro, Small and Medium Enterprises [*] 14 18 0
Others 1,529 1,128 960
Total 1,543 1,146 960
[*] Disclosure in respect of Micro, Small and Medium Enterprises:
A Principal amount remaining unpaid to any supplier as at year end 0 18 0
B Interest due thereon 0 0 0
C Amount of interest paid by the Company in terms of section 16 of 0 0 0
the MSMED Act, along with the amount of the payment made to
the supplier beyond the appointed day during the year
D Amount of interest due and payable for the year of delay in making 0 0 0
payment [which have been paid but beyond the appointed day
during the year] but without adding the interest specified under
the MSMED Act
E Amount of interest accrued and remaining unpaid at the end of 0 0 0
the accounting year
F Amount of further interest remaining due and payable in 0 0 0
succeeding years
The above information has been compiled in respect of parties to the
extent to which they could be identified as Micro, Small and Medium
Enterprises on the basis of information available with the Company.

Note: 24 - other fiNaNCial liabilitieS:

as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
Interest accrued but not due on borrowings 8 0 0
Payable to Employees 251 293 282
Unpaid Dividends [*] 78 87 43
Total 337 380 325
[*] There are no amounts due and outstanding to be credited to
Investor Education and Protection Fund.

Annual Report 2016-17 | 111

Notes to the Financial Statements for the year ended March 31, 2017
Note: 25 - other CurreNt liabilitieS: INR-Lakhs
as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
Advances from customers 46 54 65
Others 4 21 11
Payable to Statutory Authorities 131 107 97
Total 181 182 173

Note: 26 - proviSioNS:
as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
Provision for Employee Benefits 40 27 17
Provision for claims for product expiry and return of goods [*] 16 9 6
Total 56 36 23
[*] Provision for claims for product expiry and return of goods:
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 retailer. The Company does
not expect such claims to be reimbursed by any other party in future.
b The movement in such provision is stated as under:
i Carrying amount at the beginning of the year 9 6 9
ii Additional provision made during the year 16 9 6
iii Amount used 9 6 9
iv Carrying amount at the end of the year 16 9 6

Note: 27 - CoNtiNgeNt liabilitieS aNd CommitmeNtS [to the exteNt Not provided for]:
as at as at as at
March 31, 2017 March 31, 2016 april 1, 2015
a Contingent Liabilities:
a Claims against the Company not acknowledged as debts 0 20 20
b In respect of guarantees given by Banks and/or counter 1 3 3
guarantees given by the Company
c Other money for which the company is contingently liable:
i In respect of Sales Tax matters pending before appellate 670 680 77
authorities
ii In respect of Income Tax matters pending before appellate 0 66 194
authorities
b Commitments:
Estimated amount of contracts remaining to be executed on capital 36 15 28
account and not provided for

Note: 28 - iNterim divideNd :

The Board of Directors at its meeting held on March 1, 2017 declared and paid interim dividend of INR 6.50/- per equity share of INR
10/- each.

112 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 29 - reveNue from operatioNS: INR-Lakhs
as at as at
March 31, 2017 March 31, 2016
Sale of Products 11,477 10,524
Other Operating Revenues:
Share of Profit from a Partnership Firm 11,294 9,678
Miscellaneous Income 19 17
11,313 9,695
Total 22,790 20,219

Note: 30 - other iNCome:

as at as at
March 31, 2017 March 31, 2016
Interest Income on Financial Assets measured at Amortised Cost 2,398 2,843
Gain on Sale of Investments 55 27
Fair value gain on financial instrument at fair value through statement of profit and loss 2 142
Total 2,455 3,012

Note: 31 - CoSt of materialS CoNSumed:

as at as at
March 31, 2017 March 31, 2016
Raw Materials :
Stock at commencement 86 89
Add: Purchases 6,230 4,875
6,316 4,964
Less: Stock at close 159 86
6,157 4,878
Packing Materials consumed 1,004 982
Total 7,161 5,860

Note: 32 - purChaSeS of StoCk-iN-trade:

as at as at
March 31, 2017 March 31, 2016
Purchases of Stock-in-Trade 33 36
Total 33 36

Annual Report 2016-17 | 113

Notes to the Financial Statements for the year ended March 31, 2017
Note: 33 - ChaNgeS iN iNveNtorieS: INR-Lakhs
as at as at
March 31, 2017 March 31, 2016
Stock at commencement:
Work-in-progress 1 0
Finished Goods 226 246
Stock-in-Trade 15 9
242 255
Less: Stock at close:
Work-in-progress 0 1
Finished Goods 407 226
Stock-in-Trade 4 15
411 242
(169) 13
Differential Excise Duty on Opening and Closing stock of Finished Goods 5 1
Total (164) 14

Note: 34 - employee beNefitS expeNSe:

as at as at
March 31, 2017 March 31, 2016
Salaries and wages 1,824 1,656
Contribution to provident and other funds [*] 102 87
Staff welfare expenses 64 60
Total 1,990 1,803
[*] The company’s contribution towards the defined contribution plan 76 67

Note: 35 - fiNaNCe CoSt:

as at as at
March 31, 2017 March 31, 2016
Interest expense [*] 46 1
Bank commission & charges 2 5
Total 48 6
[*] The break up of interest expense into major heads is given below:
On working capital loans 46 0
Total 46 0

Note: 36 - depreCiatioN, amortiSatioN aNd impairmeNt expeNSeS:

as at as at
March 31, 2017 March 31, 2016
Depreciation 365 352
Amortisation 5 3
Total 370 355

114 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 37 - other expeNSeS: INR-Lakhs
as at as at
March 31, 2017 March 31, 2016
Consumption of Stores and spare parts 24 16
Power & fuel 171 151
Labour Charges 182 152
Rent [*] 258 249
Repairs to Buildings 25 48
Repairs to Plant and Machinery 54 48
Repairs to Others 22 14
Insurance 25 18
Rates and Taxes 98 101
Whole Time Directors' Remuneration 232 262
Commission to Directors 20 14
Traveling Expenses 187 180
Legal and Professional Fees 225 188
Commission on sales 456 421
Freight and forwarding on sales 620 561
Advertisement and Sales promotions 1,011 1,117
Representative Allowances 159 166
Other marketing expenses 262 226
Bad debts written off 0 0
Directors' fees 32 12
Net Loss on disposal of Fixed Asset 4 0
Miscellaneous Expenses [**] 590 566
Total 4,657 4,510
[*] The Company has taken various residential / office premises / godowns under operating 104 91
lease or leave and license agreement with no restrictions and are renewable / cancellable at
the option of either of the parties. There are no sub-leases. The lease payments recognised
under “Rent Expenses” are:
[**] Miscellaneous Expenses include:
a Expenditure on Corporate Social Responsibility [CSR] Activities as required u/s 135 of 201 198
the Companies Act, 2013
b Payment to the Statutory Auditors [including Service Tax]:
i - As Auditor 8 8
- For Other Services 0 0
- Total 8 8
ii Cost Auditor’s Remuneration including fees for other services 2 2

Annual Report 2016-17 | 115

Notes to the Financial Statements for the year ended March 31, 2017
Note: 38 - CompoNeNtS of other CompreheNSive iNCome [oCi]: INR-Lakhs
as at as at
March 31, 2017 March 31, 2016
Re-measurement gains [losses] on defined benefit plans (15) (16)
Total (15) (16)

Note: 39 - CalCulatioN of earNiNgS per equity Share [epS]:

as at as at
March 31, 2017 March 31, 2016
The numerators and denominators used to calculate the basic and
diluted EPS are as follows:
A Profit attributable to Shareholders INR - in Lakhs 10,934 10,326
B Basic and weighted average number of Numbers 3,90,72,089 3,90,72,089
Equity Shares outstanding during the year
C Nominal value of equity share INR 10 10
D Basic & Diluted EPS INR 27.99 26.43

Note: 40 - SegmeNt iNformatioN:

Segment Information has been given in the Consolidated Financial Statements of the Company. Hence, as per Ind AS-108 “Operating
Segments” issued by the Institute of Chartered Accountants of India, no separate disclosure on segment information is given in these
financial statements.

Note: 41 - 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: Zydus Wellness - Sikkim

c Fellow Subsidiaries/ Concerns:

Dialforhealth India Limited Nesher Pharmaceuticals (USA) LLC [USA]
Dialforhealth Unity Limited Zydus Healthcare (USA) LLC [USA]
Dialforhealth Greencross Limited Zydus Noveltech Inc. [USA]
Zydus Healthcare Limited [ZHL] Hercon Pharmaceuticals LLC [USA]
Liva Pharmaceuticals Limited Zydus Healthcare S.A. (Pty) Ltd [South Africa]
Zydus Technologies Limited Simayla Pharmaceuticals (Pty) Ltd [South Africa]
Alidac Pharmaceuticals Limited Script Management Services (Pty) Ltd [South Africa]
Alidac Pharmaceuticals (Myanmar) Limited [Myanmar] Zydus France, SAS [France]
Zydus Lanka (Private) Limited [Sri Lanka] Zydus Nikkho Pharmaceutica Ltda. [Brazil]
Zydus Healthcare Philippines Inc. [Philippines] Laboratorios Combix S.L. [Spain]
Zydus International Private Limited [Ireland] Zydus Pharmaceuticals Mexico SA De CV [Mexico]

116 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 41 - related party traNSaCtioNS: (contd.)

Zydus Netherlands B.V. [the Netherlands] Zydus Pharmaceuticals Mexico Services Company SA De C.V. [Mexico]
ZAHL B.V. [the Netherlands] Etna Biotech S.R.L. [Italy]
ZAHL Europe B.V. [the Netherlands] Zydus Worldwide DMCC [Dubai]
Bremer Pharma GmbH [Germany] Zydus Discovery DMCC [Dubai]
Zydus Pharmaceuticals (USA) Inc. [USA] Sentynl Therapeutics Inc., USA

d Directors:
Dr. Sharvil P. Patel Chairman
Mr. Ganesh N. Nayak Non-Executive Director
Prof. Indiraben J. Parikh Independent Director
Mr. Kulin S. Lalbhai Independent Director
Mr. Humayun R. Dhanrajgir Independent Director

e Key Managerial Personnel:

Mr. Tarun G. Arora Whole Time Director
Mr. Amit B. Jain Executive Officer [Chief Financial Officer]
Mr. Dhaval N. Soni Executive Officer [Company Secretary]

f Enterprises significantly influenced by Directors and/or their relatives:

Cadmach Machinery Company Private Limited Western Ahmedabad Effluent Conveyance Company Private Limited
Zydus Hospitals and Healthcare Research Private Limited Zandra Infrastructure LLP
Zydus Hospitals (Vadodara) Private Limited Zydus Hospital LLP
Zydus Hospitals (Rajkot) Private Limited C. M. C. Machinery
MabS Biotech Private Limited Cadam Enterprises
Zydus Infrastructure Private Limited Zandra Herbs and Plantations LLP
Cadila Laboratories Private Limited
Pripan Investment Private Limited

Annual Report 2016-17 | 117

Notes to the Financial Statements for the year ended March 31, 2017
b Transactions with related Parties:
The following transactions were carried out with the related parties in the ordinary course of business:
a Details relating to parties referred to in Note 41-a [a, b & c] INR-Lakhs
holding Company Partnership Firm/ Fellow
Subsidiaries/ Concerns
Nature of Transactions Year ended as at Year ended as at
March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016
investments:
Capital Contribution in a Partnership Firm [Including
retained Share of Profit]
Zydus Wellness - Sikkim 0 0 10,896 1,482
Dividend Paid:
Cadila Healthcare Limited 1,831 3,520 0 0

b Details relating to persons referred to in Note 41-A [e] 2017 2016

above:
remuneration:
Mr. Tarun G. Arora- Whole Time Director 232 262
Commission and Sitting Fees to 52 25
Non Executive/ independent Directors

outstanding payable: 39 34

118 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNaNCial iNStrumeNtS:

Financial instruments

(i) Fair values hierarchy:

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of
a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as
follows:

Level 1 : quoted prices (unadjusted) in active markets for financial instruments.

Level 2 : The fair value of financial instruments that are not traded in an active market is determined using valuation techniques
which maximise the use of observable market data rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Financial assets and liabilities measured at fair value - recurring fair value measurements:
INR-Lakhs
as at March 31, 2017
Level 1 Level 2 Level 3 Total
Financial assets
investments at FVTPL
Mutual fund 3,001 0 0 3,001
Total financial assets 3,001 0 0 3,001

as at March 31, 2016

Level 1 Level 2 Level 3 Total
Financial assets
investments at FVTPL
Mutual fund 9,416 0 0 9,416
Total financial assets 9,416 0 0 9,416

as at april 1, 2015
Level 1 Level 2 Level 3 Total
Financial assets
investments at FVTPL
Mutual fund 0 0 0 0
Total financial assets 0 0 0 0

Annual Report 2016-17 | 119

Notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNaNCial iNStrumeNtS: (contd.)

(iii) Fair value of instruments measured at amortised cost:

Financial assets and liabilities measured at amortised cost for which fair values are disclosed.

Financial assets:

The carrying amounts of borrowings, interest accured but not due, investment, trade receivables, trade payables, capital creditors,
Security Deposits and cash and cash equivalents are considered to be the same as their fair values.

Financial Liabilities:

Fair values of loans from banks, other financial liabilities and trade payables are considered to be approximately equal to the
carrying values.

120 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNaNCial iNStrumeNtS: (contd.)

1 Financial risk management

(i) Financial instruments by category:

INR-Lakhs
Particulars as at March 31, 2017
Financial assets FVTPL FVoCi amortised Cost Total
Investments 0 0 22,407 22,407
Mutual funds 3,001 0 0 3,001
Trade receivables 0 0 46 46
Loans & advances 0 0 134 134
Security deposit 0 0 33 33
Fixed deposit 0 0 28,378 28,378
Cash and cash equivalents 0 0 1,103 1,103
Total 3,001 0 52,101 55,102
Financial liabilities
Borrowings 0 0 2,500 2,500
Interest accrued but not due on borrowings 0 0 8 8
Payable to Employees 0 0 251 251
Trade payable 0 0 1,543 1,543
Security deposit 0 0 54 54
Unpaid dividend 0 0 78 78
Total 0 0 4,434 4,434

Particulars as at March 31, 2016

Financial assets FVTPL FVoCi amortised Cost Total
Investments 0 0 11,510 11,510
Mutual funds 9,416 0 0 9,416
Trade receivables 0 0 27 27
Loans & advances 0 0 72 72
Security deposit 0 0 38 38
Fixed deposit 0 0 22,709 22,709
Cash and cash equivalents 0 0 724 724
Total 9,416 0 35,080 44,496
Financial liabilities
Borrowings 0 0 0 0
Interest accrued but not due on borrowings 0 0 0 0
Payable to Employees 0 0 293 293
Trade payable 0 0 1,146 1,146
Security deposit 0 0 42 42
Unpaid dividend 0 0 87 87
Total 0 0 1,568 1,568

Annual Report 2016-17 | 121

Notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNaNCial iNStrumeNtS: (contd.) INR-Lakhs
Particulars as at april 1, 2015
Financial assets FVTPL FVoCi amortised Cost Total
Investments 0 0 10,027 10,027
Mutual funds 0 0 0 0
Trade receivables 0 0 33 33
Loans & advances 0 0 71 71
Security deposit 0 0 36 36
Fixed deposit 0 0 28,884 28,884
Cash and cash equivalents 0 0 600 600
Total 0 0 39,651 39,651
Financial liabilities
Borrowings 0 0 0 0
Interest accrued but not due on borrowings 0 0 0 0
Payable to Employees 0 0 282 282
Trade payable 0 0 960 960
Security deposit 0 0 21 21
Unpaid dividend 0 0 43 43
Total 0 0 1,306 1,306
(ii) Risk Management

The company’s activities expose it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity
is exposed to and how the entity manages the risk and the related impact in the financial statements.

The Company’s risk management is managed in close cooperation with the board of directors and focuses on actively securing the
Company’s short to medium-term cash flows by minimizing the exposure to volatile financial markets. Long-term cash flows by
minimizing the exposure to volatile financial markets. Long-term financial investments are managed to generate lasting returns.

The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The
most significant financial risks to which the Company is exposed are described below:

a Credit risk

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The company is
exposed to credit risk from trade receivables, bank deposits and other financial assets. The Company periodically assesses the
financial reliability of the counter party taking into account the financial condition, current economic trends, analysis of historical
bad debts and ageing of accounts receivable. Individual customer limits are set accordingly.

bank deposits: The company maintains its Cash and cash equivalents and Bank deposits with reputed and highly rated banks
Hence, there is no significant credit risk on such deposits.

Trade receivable: The Company trades with recognized and credit worthy third parties. It is the Company’s policy that all customers
who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on
an on-going basis with the result that the Company’s exposure to bad debts is not significant. Also the company does not enter
into sales transaction with customers having credit loss history. There are no significant credit risks with related parties of the
Company. The Company is exposed to credit risk in the event of non-payment by customers. Credit risk concentration with respect
to trade receivables is mitigated by the Company’s large customer base. Adequate expected credit losses are recognized as per the
assessments.

122 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNaNCial iNStrumeNtS: (contd.)

The history of trade receivables shows an allowance for bad and doubtful debts of INR 0.3 Lakhs as at March 31, 2017. The Company
has made allowance of INR Nil [Previous Year- INR Nil], against trade receivables of INR 46 Lakhs [Previous year - INR 27 Lakhs].

b Liquidity risk

a Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding
through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business,
the Company maintains flexibility in funding by maintaining availability under committed facilities.

b Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of
expected cash flows. The Company account the liquidity of the market in which the entity operates. In addition, the Company’s
liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets
necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and
maintaining debt financing plans.

Maturities of financial liabilities :

The tables below analyse the company’s financial liabilities into relevant maturity groupings based on their contractual
maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash
flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

INR-Lakhs
Particulars as at March 31, 2017
< 1 year 1-2 years 2-3 years > 3 years Total
Non-derivatives
Borrowings 2,500 0 0 0 2,500
Interest accrued but not due on 8 0 0 0 8
borrowings
Trade payable 251 0 0 0 251
Security deposit 0 0 0 54 54
Payable to Employee 1,543 0 0 0 1,543
Unpaid dividend 78 0 0 0 78
Total 4,380 0 0 54 4,434

Annual Report 2016-17 | 123

Notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNaNCial iNStrumeNtS: (contd.) INR-Lakhs
Particulars as at March 31, 2016
< 1 year 1-2 years 2-3 years > 3 years Total
Non-derivatives
Borrowings 0 0 0 0 0
Interest accrued but not due on 0 0 0 0 0
borrowings
Trade payable 1,146 0 0 0 1,146
Security deposit 0 0 0 42 42
Payable to Employee 293 0 0 0 293
Unpaid dividend 87 0 0 0 87
Total 1,526 0 0 42 1,568

Particulars as at april 1, 2015

< 1 year 1-2 years 2-3 years > 3 years Total
Non-derivatives
Borrowings 0 0 0 0 0
Interest accrued but not due on 0 0 0 0 0
borrowings
Trade payable 960 0 0 0 960
Security deposit 0 0 0 21 21
Payable to Employee 282 0 0 0 282
Unpaid dividend 43 0 0 0 43
Total 1,285 0 0 21 1,306
C Foreign currency risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US
Dollar. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company’s
functional currency. The company’s operations in foreign currency is insignificant and hence there is no material risk.

a Foreign currency risk exposure:

Sensitivity

The sensitivity of profit or loss and equity to changes in the exchange rates arises mainly from foreign currency denominated financial
instruments.
Particulars as at March 31, 2017 as at March 31, 2016
Movement in Impact on PAT Movement in Impact on PAT
Rate Rate
USD 4.00% 4 4.92% (0.21)
USD -4.00% (4) -4.92% 0.21

124 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNaNCial iNStrumeNtS: (contd.)

b interest rate risk

assets

The company’s fixed deposits are carried at amortised cost and are fixed rate deposits. They are therefore not subject to interest
rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in
market interest rates.

c Price risk

(a) Exposure

The company’s exposure to price risk arises from investments in equity and mutual fund held by the company and classified in
the balance sheet as fair value through OCI and at fair value through profit or loss respectively to manage its price risk arising from
investments in equity securities and mutual fund, the company diversifies its portfolio. Diversification of the portfolio is done in
accordance with the limits set by the company.

(b) Sensitivity-Mutual Fund

The table below summarises the impact of increases / decreases of the index on the company’s equity and profit for the period.
The analysis is based on the assumption that the price of the instrument has increased by 2% or decreased by 2% with all other
variables held constant.
INR-Lakhs
as at March 31, 2017 as at March 31, 2016
Particulars impact on PaT impact on PaT
Mutual Funds [Quoted]
Increase 2% 60 185
Decrease 2% (60) (185)

2 Capital management
The Company’ s capital management objectives are
- to ensure the Company’s ability to continue as a going concern
- to provide an adequate return to shareholders
- to maintain an optimal capital structure to reduce the cost of capital

Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure while
avoiding excessive leverage. This takes into account the subordination levels of the Company’s various classes of debt. The
Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the
risk characteristics of the underlying assets. The company has sufficient Cash and Cash Equivalents and Short Term Fixed Deposit
available against the debt.

Loan covenants

The Company has taken loan for working capital requirement and as at March 31, 2017, the ratio of net finance cost to EBITDA was 0.42%
(March 31, 2016 0.05%).

Annual Report 2016-17 | 125

Notes to the Financial Statements for the year ended March 31, 2017
Note: 43 - firSt time adoptioN of iNd aS:
The accounting policies set out in the note here have been applied in preparing the financial statements for the year ended March 31,
2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of
an opening Ind AS balance sheet at April 1, 2015 [the Company’s date of transition].

In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements
prepared in accordance with the accounting standards notified under Companies [Accounting Standards] Rules, 2006 [as amended]
and other relevant provisions of the Act [Indian GAAP]. An explanation of how the transition from previous GAAP to Ind AS has affected
the Company’s financial position, financial performance and cash flows is set out in the following notes.

Exemptions and exceptions availed:

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from Indian GAAP
to Ind AS.

a Deemed cost:

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as
recognised in the financial statements as at the date of transition to Ind AS, measured as per the Indian GAAP and use that as its
deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can
also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has elected to measure all of
its property, plant and equipment and intangible assets at their Indian GAAP carrying values.

b Leases:

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind
AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to
make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is
expected to be not material. The Company has elected to apply this exemption for such contracts / arrangements.

C Designation of previously recognised financial instruments:

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at
the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments [other
than investment in subsidiary].

D Estimates:

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for
the same date in accordance with Indian GAAP [after adjustments to reflect any difference in accounting policies], unless there is
objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with Indian GAAP. The
Company made estimates in accordance with Ind AS at the date of transition as these were not required under Indian GAAP.

E Classification and measurement of financial assets:

As per the requirement of Ind AS 101, the Company has assessed the classification of financial assets on the basis of facts and
circumstances that existed at the date of transition to Ind AS.

F De-recognisition of financial assets and liabilities:

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions
occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition

126 | Zydus Wellness Limited

Notes to the Financial Statements for the year ended March 31, 2017
Note: 43 - firSt time adoptioN of iNd aS: (contd.)
requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply
Ind AS 109 to financial assets or financial liabilities derecognised as a result of past transactions was obtained at the time of initially
accounting for those transactions. The Company has elected to apply the de-recognition provision of Ind AS 109 prospectively
from the date of transition to Ind AS.

Note: 44 - reCoNCiliatioN with iNdiaN gaap [igaap]: INR-Lakhs

Particulars as at as at
March 31, 2016 april 1, 2015
a reconciliation of equity:
1 Equity as per IGAAP 43,809 36,697
2 Add [Less]: Adjustments:
a Fair Valuation adjustments for financial assets 1 142 0
b Proposed Dividend including Corporate Dividend Tax 2 0 2,821
c Other adjustments (0.51) (0.37)
d Total 141 2,820
3 Equity as per ind aS 43,950 39,517
b reconciliation of Net Profit for the year ended March 31, 2016:
1 Net profit as per IGAAP 10,169 10,895
2 Add [Less]: Adjustments in statement of profit and loss
a Fair Valuation adjustments for financial assets 1 142 0
b Actuarial loss on employee defined benefit plan recognised in OCI 3 16 (17)
c Other adjustments (0.82) (0.36)
d Total 157 (17)
3 Net profit before oCi as per ind aS 10,326 10,878
4 add [Less]: adjustments in oCi
Actuarial loss on defined benefit plan transferred from statement of profit and loss 3 (16) 17
5 Total Comprehensive income as per ind aS 10,310 10,895

1 fair valuation adjustments for financial assets and fair valuation of investments in mutual funds
Under IGAAP, security deposit given to landloard for operating lease are shown at transaction price. Under Ind AS, such transactions
are discounted to their present value using incremental borrowing rate applicable to the borrower entity. The difference between
the carrying value of the security deposit and its present value is accounted as deffered rental expenditure grouped under loans
& advances. The unwinding of discount from the date of security deposit to the transition date is shown as rental expense and
recognised in “Retained earnings”. Under previous GAAP, investment in mutual funds, being current investments, were accounted
at the lower of cost or fair value. Under Ind AS, mutual funds are not equity instruments and the cash flows do not represent solely
payments for principal and interest and hence are to be accounted at fair value through profit and loss.

2 proposed dividend including Corporate dividend tax: U n d e r

previous GAAP, dividend on equity shares recommended by the Board of Directors after end of the reporting period but before the
date of approval of financial statements was considered as an adjusting event and consequently, provision for proposed dividend
was recognised as a liability in the financial statements in the reporting period relating to which dividend was proposed. Under
Ind AS, such dividend is recognised in the reporting period in which the same is approved by the members in a general meeting.
Consequently, the impact of INR 2,821 Lakhs has been recognised in retained earnings at the transition date.
3 actuarial loss on defined benefit plan:

Annual Report 2016-17 | 127

Notes to the Financial Statements for the year ended March 31, 2017
Note: 44 - reCoNCiliatioN with iNdiaN gaap [igaap]: (contd.)
Under previous GAAP, remeasurement of defined benefit plans (gratuity), arising primarily due to change in actuarial assumptions
was recognised as employee benefits expense in the Statement of Profit and Loss. Under Ind AS, such remeasurement (excluding
the net interest expenses on the net defined benefit liability) of defined benefit plans is recognised in OCI. Consequently, the
related tax effect of the same is also recognised in OCI. For the year ended March 31, 2016, remeasurement of gratuity liability
resulted in a actuarial loss of INR 16 Lakhs which has now been reduced from employee benefits expense in the Statement of Profit
and Loss and recognised separately in OCI. The above changes do not affect Equity as at date of transition to Ind AS and as at March
31, 2016.

others:

Sale of goods:

Under The IGAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods
is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of
expenses.

other comprehensive income:

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a
standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the
statement of profit and loss as other comprehensive income include remeasurements of defined benefit plans and fair value gains
or (losses) on FVOCI equity instruments and corresponding tax impact thereon. The concept of other comprehensive income did
not exist under previous GAAP.

Statement of cash flows:

The transition from IGAAP to Ind AS has not had a material impact on the statement of cash flows.

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

For Dhirubhai Shah & Doshi

Chartered Accountants
Firm Registration Number: 102511W

Kaushik D. Shah Dr. Sharvil P. Patel

Partner Chairman
Membership Number: 016502

Place: Ahmedabad amit b. Jain Dhaval N. Soni Tarun G. arora

Dated: May 27, 2017 Chief Financial Officer Company Secretary Whole Time Director

128 | Zydus Wellness Limited

Consolidated
Financial
Statements

Annual Report 2016-17 | 129

Independent Auditor’s Report

To the Members of
Zydus Wellness Limited

Report on the Consolidated Ind AS Financial Statements Auditor’s Responsibility

We have audited the accompanying Consolidated Ind AS Our responsibility is to express an opinion on the consolidated
Financial Statements of Zydus Wellness Limited (“the Company”) Ind AS financial statements based on our audit. While conducting
and Zydus Wellness-Sikkim, a partnership firm (the Company the audit, we have taken into account the provisions of the Act,
& firm are collectively referred to as “the Group”), comprising the accounting and auditing standards and matters which are
of the Consolidated Balance Sheet as at March 31, 2017, the required to be included in the audit report under the provisions
Consolidated Statement of Profit and Loss (including other of the Act and the Rules made thereunder. We conducted our
comprehensive income), the Consolidated Statement of cash audit in accordance with the Standards on Auditing specified
flows and the Consolidated Statement of Changes in Equity for under section 143(10) of the Act. Those standards require that we
the year ended, and a summary of the significant accounting comply with ethical requirements and plan and perform the audit
policies and other explanatory information (hereinafter referred to obtain reasonable assurance about whether the consolidated
to as “the Consolidated Ind AS Financial Statements”). Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence

Management’s Responsibility for the Consolidated Ind AS
about the amounts and the disclosures in the consolidated Ind
Financial Statements
AS financial statements. The procedures selected depend on
The Company’s Board of Directors is responsible for the
the auditor’s judgment, including the assessment of the risks
preparation of these Consolidated Ind AS Financial Statements
of material misstatement of the consolidated Ind AS financial
in terms of the requirements of the Companies Act, 2013
statements, whether due to fraud or error. In making those risk
(“the Act”) that give a true and fair view of the consolidated
assessments, the auditor considers internal financial control
financial position, consolidated financial performance including
relevant to the Company’s preparation of the consolidated Ind
other comprehensive income, consolidated cash flows, and
AS financial statements that give a true and fair view in order to
consolidated changes in equity of the Company in accordance
design audit procedures that are appropriate in the circumstances.
with the accounting principles generally accepted in India,
An audit also includes evaluating the appropriateness of
including the Accounting Standards (Ind AS) specified under
the accounting policies used and the reasonableness of the
Section 133 of the Act read with Rule 7 of the Companies
accounting estimates made by the Company’s Board of Directors,
(Accounts) Rules, 2014. The Board of Directors of the Company
as well as evaluating the overall presentation of the consolidated
are responsible for maintenance of adequate accounting records
Ind AS financial statements.
in accordance with the provisions of the Act for safeguarding
of the assets of the Company and for preventing and detecting We believe that the audit evidence obtained by us is sufficient
frauds and other irregularities; the selection and application and appropriate to provide a basis for our audit opinion on the
of appropriate accounting policies; making judgments and consolidated Ind AS financial statements.
estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal financial Opinion
controls, that were operating effectively for ensuring the In our opinion and to the best of our information and according
accuracy and completeness of the accounting records, relevant to the explanations given to us, the aforesaid consolidated Ind
to the preparation and presentation of the consolidated Ind AS AS financial statements give the information required by the
financial statements that give a true and fair view and are free Act in the manner so required and give a true and fair view in
from material misstatement, whether due to fraud or error, conformity with the accounting principles generally accepted
which have been used for the purpose of preparation of the in India including the Ind AS, of the consolidated state of affairs
consolidated Ind AS financial statements by the Directors of the of the group, as at March 31, 2017, and their consolidated profit
Company, as aforesaid. including other comprehensive income, their consolidated cash

130 | Zydus Wellness Limited

flows and the consolidated changes in equity for the year ended g. With respect to the other matters to be included in
on that date. the Auditor’s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in
Report on Other Legal and Regulatory Requirements our opinion and to the best of our information and
1. As required by sub-section 3 of Section 143 of the Act, we according to the explanations given to us:
report, to the extent applicable, that:
i. The group has disclosed the impact of pending
a. We have sought and obtained all the information and litigations on its consolidated financial position
explanations which to the best of our knowledge and in its financial statements – Refer Note 26 to the
belief were necessary for the purposes of our audit of consolidated Ind AS financial statements;
the aforesaid consolidated Ind AS financial statements;
ii. The group did not have any long-term contracts
b. In our opinion, proper books of account as required by including derivatives contracts for which there
law relating to preparation of the aforesaid consolidated were any material foreseeable losses.
Ind AS financial statements have been kept so far as it
iii. There has been no delay in transferring amounts,
appears from our examination of those books;
required to be transferred to the Investor Education
c. The Consolidated Balance Sheet, the Consolidated and Protection Fund by the Company.
Statement of Profit and Loss, the Consolidated
iv. The group had provided requisite disclosures in
Statement of Cash flows and Consolidated Statement
its financial statements as to holdings as well as
of Changes in Equity dealt with by this Report are in
dealings in Specified Bank Notes during the period
agreement with the books of account;
from November 8, 2016 to December 30, 2016
d. In our opinion, the aforesaid consolidated Ind AS and the same are in accordance with the books of
financial statements comply with the Accounting accounts maintained by the company.
Standards specified under Section 133 of the Act, read
with Rule 7 of the Companies (Accounts) Rules, 2014;
For DhIRubhAI ShAh & DOShI
e. On the basis of written representations received from Chartered Accountants
the directors as on March 31, 2017, and taken on record Firm’s Registration Number: 102511W
by the Board of Directors, none of the directors is
disqualified as on March 31, 2017, from being appointed KAuShIK ShAh
as a director in terms of Section 164(2) of the Act; Ahmedabad Partner
May 27, 2017 Membership number: 016502
f. With respect to the adequacy of the internal financial
controls over financial reporting of the group and the
operating effectiveness of such controls, refer to our
separate report in “Annexure A”; and

Annual Report 2016-17 | 131

Annexure - A to the Auditors’ Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

In conjunction with our audit of the consolidated Ind AS financial Our audit involves performing procedures to obtain audit
statements of the Company as of and for the year ended March evidence about the adequacy of the internal financial controls
31, 2017, we have audited the internal financial controls over system over financial reporting and their operating effectiveness.
financial reporting of Zydus Wellness Limited (“the Company”) Our audit of internal financial controls over financial reporting
and of the entity M/s. Zydus Wellness Sikkim, a Partnership Firm, included obtaining an understanding of internal financial
as of that date (the Company & firm are collectively referred to as controls over financial reporting, assessing the risk that a material
“the Group”). weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed
Management’s Responsibility for Internal Financial Controls risk. The procedures selected depend on the auditor’s judgment,
The Board of Directors of the Company is responsible for including the assessment of the risks of material misstatement of
establishing and maintaining internal financial controls based on the financial statements, whether due to fraud or error.
the internal control over financial reporting criteria established
We believe that the audit evidence we have obtained is sufficient
by the Company considering the essential components of
and appropriate to provide a basis for our audit opinion on
internal control stated in the Guidance Note on Audit of Internal
the Company’s internal financial controls system over financial
Financial Controls over Financial Reporting issued by the Institute
reporting.
of Chartered Accountants of India (“ICAI’). These responsibilities
include the design, implementation and maintenance of
Meaning of Internal Financial Controls over Financial Reporting
adequate internal financial controls that were operating effectively
A company’s internal financial control over financial reporting is a
for ensuring the orderly and efficient conduct of its business,
process designed to provide reasonable assurance regarding the
including adherence to company’s policies, the safeguarding of
reliability of financial reporting and the preparation of financial
its assets, the prevention and detection of frauds and errors, the
statements for external purposes in accordance with generally
accuracy and completeness of the accounting records, and the
accepted accounting principles. A company’s internal financial
timely preparation of reliable financial information, as required
control over financial reporting includes those policies and
under the Companies Act, 2013.
procedures that (1) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the transactions
Auditors’ Responsibility
and dispositions of the assets of the company; (2) provide
Our responsibility is to express an opinion on the Company’s
reasonable assurance that transactions are recorded as necessary
internal financial controls over financial reporting based on our
to permit preparation of financial statements in accordance
audit. We conducted our audit in accordance with the Guidance
with generally accepted accounting principles, and that receipts
Note on Audit of Internal Financial Controls over Financial
and expenditures of the company are being made only in
Reporting (the “Guidance Note”) issued by ICAI and the Standards
accordance with authorizations of management and directors
on Auditing, issued by ICAI and deemed to be prescribed under
of the company; and (3) provide reasonable assurance regarding
section 143(10) of the Companies Act, 2013, to the extent
prevention or timely detection of unauthorized acquisition, use,
applicable to an audit of internal financial controls, both issued
or disposition of the company’s assets that could have a material
by the Institute of Chartered Accountants of India. Those
effect on the financial statements.
Standards and the Guidance Note require that we comply with
ethical requirements and plan and perform the audit to obtain
Inherent Limitations of Internal Financial Controls over
reasonable assurance about whether adequate internal financial
Financial Reporting
controls over financial reporting was established and maintained
Because of the inherent limitations of internal financial controls
and if such controls operated effectively in all material respects.
over financial reporting, including the possibility of collusion

132 | Zydus Wellness Limited

or improper management override of controls, material over financial reporting criteria established by the Company
misstatements due to error or fraud may occur and not be considering the essential components of internal control stated
detected. Also, projections of any evaluation of the internal in the Guidance Note on Audit of Internal Financial Controls Over
financial controls over financial reporting to future periods are Financial Reporting issued by the ICAI.
subject to the risk that the internal financial control over financial
reporting may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate. For DhIRubhAI ShAh & DOShI
Chartered Accountants
Opinion Firm’s Registration Number: 102511W
In our opinion, the group has, in all material respects, an adequate
internal financial controls system over financial reporting and such KAuShIK ShAh
internal financial controls over financial reporting were operating Ahmedabad Partner
effectively as at March 31, 2017, based on the internal control May 27, 2017 Membership number: 016502

Annual Report 2016-17 | 133

Consolidated balance Sheet as at March 31, 2017
INR-Lakhs
Particulars Note No. As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
ASSETS:
Non-Current Assets:
Property, Plant and Equipment 3 7,944 5,899 6,151
Capital Work-in-Progress 13 19 24
Goodwill 4 2,282 2,282 2,282
Other Intangible Assets 4 27 26 7
Financial Assets:
Loans 5 70 77 57
Others 6 57 18 18
Other Non-Current Assets 7 503 57 125
Asset for Current Tax [Net] 8 6,164 5,104 3,629
17,060 13,482 12,293
Current Assets:
Inventories 9 3,188 2,400 2,599
Financial Assets:
Investments 10 3,001 9,416 0
Trade Receivables 11 404 276 148
Cash and Cash Equivalents 12 2,147 2,278 1,922
Bank Balance Other Than Cash and Cash Equivalents 13 41,869 28,175 31,978
Loans 14 162 110 113
Other Current Assets 15 851 640 1,737
51,622 43,295 38,497
Total 68,682 56,777 50,790
EQuITY AND LIAbILITIES:
Equity:
Equity Share Capital 16 3,907 3,907 3,907
Other Equity 17 52,868 44,813 40,203
56,775 48,720 44,110
Liabilities:
Non-Current Liabilities:
Financial Liabilities:
Other Financial Liabilities 18 55 44 21
Provisions 19 74 58 43
Deferred Tax Liabilities [Net] 20 433 406 458
562 508 522
Current Liabilities:
Financial Liabilities:
Borrowings 21 2,500 0 0
Trade Payables 22 6,650 6,320 5,025
Other Financial Liabilities 23 554 486 401
Other Current Liabilities 24 1509 624 670
Provisions 25 132 119 62
11,345 7,549 6,158
Total 68,682 56,777 50,790
Significant Accounting Policies 2
Notes to the Consolidated Financial Statements 1 to 45

As per our report of even date

For Dhirubhai Shah & Doshi For and on behalf of the Board
Chartered Accountants
Firm Registration Number: 102511W

Kaushik D. Shah Dr. Sharvil P. Patel

Partner Chairman
Membership Number: 016502

Place: Ahmedabad Amit b. Jain Dhaval N. Soni Tarun G. Arora

Dated: May 27, 2017 Chief Financial Officer Company Secretary Whole Time Director

134 | Zydus Wellness Limited

Consolidated Statement of Profit and Loss for the year ended March 31, 2017
INR-Lakhs
Particulars Note No. Year ended Year ended
March 31, 2017 March 31, 2016
Revenue from Operations 28 46,255 42,602
Other Income 29 3,264 3,242
Total Income 49,519 45,844
EXPENSES:
Cost of Materials Consumed 30 13,598 11,886
Purchases of Stock-in-Trade 31 51 121
Changes in Inventories of Finished goods, Work-in-progress and Stock-in-Trade 32 (392) 65
Excise duty on sales 3,198 2,934
Employee Benefits Expense 33 4,546 3,937
Finance Costs 34 55 14
Depreciation, Amortisation and Impairment expenses 35 716 681
Other Expenses 36 15,347 14,526
Total Expenses 37,119 34,164
Profit before Tax 12,400 11,680
Less: Tax Expense:
Current Tax 20 1,245 1,208
Deferred Tax 20 27 (52)
1,272 1,156
Profit for the year 11,128 10,524
OThER COMPREhENSIVE INCOME: 37
Items that will not be reclassified to profit or loss:
Re-measurement gains/(losses) on post employment defined benefit plans 21 (16)
Income tax effect 0 0
Other Comprehensive Income for the year, net of tax 21 (16)
Total Comprehensive Income for the year [Net of Tax] 11,149 10,508
Net profit attributable to:
Owners of the Parent 10,898 10,326
Non-Controlling Interests 230 198
Other Comprehensive Income attributable to:
Owners of the Parent 21 (16)
Non-Controlling Interests 0 0
Total Comprehensive Income attributable to:
Owners of the Parent 10,919 10,310
Non-Controlling Interests 230 198
basic & Diluted Earning per Equity Share [EPS] [in Rupees] 38 27.89 26.43
Significant Accounting Policies 2
Notes to the Consolidated Financial Statements 1 to 45

As per our report of even date

For Dhirubhai Shah & Doshi For and on behalf of the Board
Chartered Accountants
Firm Registration Number: 102511W

Kaushik D. Shah Dr. Sharvil P. Patel

Partner Chairman
Membership Number: 016502

Place: Ahmedabad Amit b. Jain Dhaval N. Soni Tarun G. Arora

Dated: May 27, 2017 Chief Financial Officer Company Secretary Whole Time Director

Annual Report 2016-17 | 135

Consolidated Cash Flow Statement for the year ended March 31, 2017
INR-Lakhs
Particulars Year ended March 31, 2017 Year ended March 31, 2016
A. Cash flows from operating activities:
Profit before Tax 12,400 11,680
Adjustments for:
Depreciation, Amortisation and Impairment 716 681
[Profit] / Loss on sale of assets [Net] 18 0
Interest income (3,139) (3,060)
Fair value gain on financial instrument at fair value
through statement of profit and loss (3) (142)
Re-measurement of Employees benefits (net) 30 32
Interest expenses 55 13
Bad debts written off 1 0
Provisions for probable product expiry claims and
return of goods 19 21
Total (2,303) (2,455)
Operating profit before working capital changes 10,097 9,225
Adjustments for:
Increase in trade receivables (66) (184)
[Increase] / Decrease in inventories (788) 199
[Increase] / Decrease in other current assets (75) 1,140
Increase in Current Financial Assets-Loan (52) (7)
Increase in Non Current Financial Assets-Loan (1,438) (1,285)
[Increase] / Decrease in Non Current Financial
Assets-Others (39) 0
Increase in other non current assets (93) (6)
Increase in trade payables 192 1,267
Increase in other current liabilities 839 50
Increase in other Non Current Financial Liablities 11 23
Change in Non-Controlling Interest (38) (20)
Total (1,547) 1,177
Cash generated from operations 8,550 10,402
Direct taxes paid [Net of refunds] (855) (1,416)
Net cash from operating activities 7,695 8,986
b. Cash flows from investing activities:
Purchase of fixed assets (3,084) (374)
Proceeds from sale of fixed assets 17 2
Investment in Fixed Deposit (net) (13,694) 3,803
Investment in Mutual Funds (net) 6,415 (9,274)
Interest received 3,141 3,060
Net cash used in investing activities (7,205) (2,783)

136 | Zydus Wellness Limited

Consolidated Cash Flow Statement for the year ended March 31, 2017
INR-Lakhs
Particulars Year ended March 31, 2017 Year ended March 31, 2016
C. Cash flows from financing activities:
Proceeds from Short Term Borrowings 2,500 0
Interest paid (55) (13)
Dividends paid (2,549) (4,840)
Tax on dividends paid (517) (994)
Net cash used in financing activities (621) (5,847)
Net (Decrease) / Increase in cash and cash equivalents (131) 356
Cash and cash equivalents at the beginning of the year 2,278 1,922
Cash and cash equivalents at the end of the year 2,147 2,278

1. All figures in brackets are outflows.

2. Previous year’s figures have been regrouped wherever necessary.
3. Cash and cash equivalents comprise of: As at March 31 As at April 1
2017 2016 2015
a. Cash on Hand 3 3 5
b. Balances with Banks 2,144 2,275 1,917
c. Total 2,147 2,278 1,922

As per our report of even date

For Dhirubhai Shah & Doshi For and on behalf of the Board
Chartered Accountants
Firm Registration Number: 102511W

Kaushik D. Shah Dr. Sharvil P. Patel

Partner Chairman
Membership Number: 016502

Place: Ahmedabad Amit b. Jain Dhaval N. Soni Tarun G. Arora

Dated: May 27, 2017 Chief Financial Officer Company Secretary Whole Time Director

Annual Report 2016-17 | 137

Statement of Change in Consolidated Equity for the year ended March 31, 2017
a Equity Share Capital:
No. of Shares INR-Lakhs
Equity Shares of INR 10/- each, Issued, Subscribed and Fully Paid-up:
As at April 1, 2015 3,90,72,089 3,907
As at March 31, 2016 3,90,72,089 3,907
As at March 31, 2017 3,90,72,089 3,907

b Other Equity: INR-Lakhs

Particulars Reserves and Surplus Items of OCI Non Total
General Retained FVTOCI Controlling
Reserve Earnings Reserve Interests
As at April 1, 2015 4,500 35,034 (17) 686 40,203
Add: Profit for the year 0 10,326 0 178 10,504
Add [Less]: Other Comprehensive income 0 0 (16) 0 (16)
Total Comprehensive Income 4,500 45,360 (33) 864 50,691
Transactions with Owners in their capacity as owners:
Dividends 0 (4,884) 0 0 (4,884)
Corporate Dividend Tax on Dividend 0 (994) 0 0 (994)
As at March 31, 2016 4,500 39,482 (33) 864 44,813
Add: Profit for the year 0 10,898 0 0 10,898
Add [Less]: Other Comprehensive income 0 0 21 193 214
Total Comprehensive Income 4,500 50,380 (12) 1,057 55,925
Transactions with Owners in their capacity as owners:
Dividends 0 (2,540) 0 0 (2,540)
Corporate Dividend Tax on Dividend 0 (517) 0 0 (517)
As at March 31, 2017 4,500 47,323 (12) 1,057 52,868

As per our report of even date

For Dhirubhai Shah & Doshi For and on behalf of the Board
Chartered Accountants
Firm Registration Number: 102511W

Kaushik D. Shah Dr. Sharvil P. Patel

Partner Chairman
Membership Number: 016502

Place: Ahmedabad Amit b. Jain Dhaval N. Soni Tarun G. Arora

Dated: May 27, 2017 Chief Financial Officer Company Secretary Whole Time Director

138 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 1 - Group Overview:

The consolidated financial statements comprise financial statements of Zydus Wellness Limited [“the Parent”] and its partnership firm
[collectively, “the Group”] for the year ended March 31, 2017. The Group operates as an integrated consumer Group with business
encompassing the entire value chain in the development, production, marketing and distribution of health and wellness products. The
product portfolio of the Group includes brands like Sugar free, Everyuth and Nutralite. The Parent’s shares are listed on the National Stock
Exchange of India Limited [NSE] and BSE Limited. The registered office of the Parent is located at House no. 6 & 7, Sigma Commerce
Zone, Near Iscon Temple, Sarkhej-Gandhinagar Highway, Ahmedabad, Gujarat - 380015. These financial statements were authorised for
issue in accordance with a resolution of the directors on May 27, 2017.

Note: 2 - Significant Accounting Policies:

A The following note provides list of the significant accounting policies adopted in the preparation of these financial statements.
These policies have been consistently applied to all the years presented unless otherwise stated.

1 basis of preparation:

A The financial statements have been prepared in accordance with Indian Accounting Standards [Ind AS] notified under the
Companies [Indian Accounting Standards] Rules, 2015, as amended and other relevant provisions of the Companies Act, 2013.

B For all periods up to and including the year ended March 31, 2016, the Group has prepared its financial statements in
accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with
paragraph 7 of the Companies [Accounts] Rules, 2014 [Indian GAAP]. The group has adopted Ind AS as per Companies [Indian
Accounting Standards [Ind AS]] Rules, 2015 as notified under section 133 of the Companies Act, 2013 for these financial
statements beginning April 1, 2016. As per the principles of Ind AS 101, the transition date to Ind AS is April 1, 2015 and hence
the comparatives for the previous year ended March 31, 2016 and balances as on April 1, 2015 have been restated as per the
principles of Ind AS, wherever deemed necessary. Reconciliations and descriptions of the effect of the transition from previous
GAAP to Ind AS have been summarized in note 43 and note 44.

C The financial statements have been prepared on historical cost basis, except for the following assets and liabilities which have
been measured at fair value or revalued amount:

i Derivative financial instruments

ii Certain financial assets and liabilities measured at fair value [refer accounting policy regarding financial instruments]

iii Defined benefit plans

2 basis of consolidation:  

A The consolidated financial statements comprise the financial statements of the Parent and its partnership firm as at March 31,
2017. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if
and only if the Group has:

a Power over the investee [i.e. existing rights that give it the current ability to direct the relevant activities of the investee]

b Exposure, or rights, to variable returns from its involvement with the investee,

c The ability to use its power over the investee to affect its returns, and

d The size of the group’s holding of voting rights relative to the size and dispersion of the holdings of the other voting rights
holders.

Annual Report 2016-17 | 139

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)
B Consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in
similar circumstances. If a member of the group uses accounting policies other than those adopted in the consolidated
financial statements for like transactions and events in similar circumstances, appropriate adjustments are made to that group
member’s financial statements in preparing the consolidated financial statements to ensure conformity with the group’s
accounting policies.

C The financial statements of all entities used for the purpose of consolidation are drawn up to same reporting date as that
of the Group, i.e., year ended on March 31. When the end of the reporting period of the parent is different from that of a
subsidiary, the subsidiary prepares, for consolidation purposes, additional financial information as of the same date as the
financial statements of the parent to enable the parent to consolidate the financial information of the subsidiary.

3 use of Estimates:

The preparation of the consolidated financial statements in conformity with Ind AS requires management to make estimates,
judgments and assumptions.These estimates, judgments and assumptions affect the application of accounting policies and the
reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements
and reported amounts of income and expenses during the period. Application of accounting policies that require critical accounting
estimates involving complex and subjective judgments are provided below. Accounting estimates could change from period to
period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes
aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the consolidated financial
statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the consolidated
financial statements.

Critical estimates and judgments  

a Income Taxes:

Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid /
recovered for uncertain tax positions.

b Property, plant and equipment:

Property, plant and equipment represent a significant proportion of the asset base of the Group. The charge in respect of
periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual
value at the end of its life. Management reviews the residual values, useful lives and methods of depreciation of property,
plant and equipment at each reporting period end and any revision to these is recognised prospectively in current and future
periods. The lives are based on historical experience with similar assets as well as anticipation of future events, which may
impact their life, such as changes in technology.

c Employee Benefits:

Significant judgments are involved in making estimates about the life expectancy, discounting rate, salary increase, etc. which
significantly affect the working of the present value of future liabilities on account of employee benefits by way of defined
benefit plans.

d Product warranty and expiry claims:

Significant judgments are involved in determining the estimated stock lying in the market with product shelf life and estimates
of likely claims on account of expiry of such unsold goods lying with stockist.

140 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)
e Impairment of assets and investments:

Significant judgment is involved in determining the estimated future cash flows from the investments, Property, Plant and
Equipment and Goodwill to determine its value in use to assess whether there is any impairment in its carrying amount as
reflected in the financials.

4 Foreign Currency Transactions:  

The Group’s consolidated financial statements are presented in Indian Rupees [INR], which is the functional currency of the Parent
Company. For each entity, the Group determines the functional currency and items included in the financial statements of each
entity are measured using that functional currency.

A The transactions in foreign currencies are translated into functional currency by the Groups’ entities at their respective
functional currency rates of exchange prevailing on the dates of transactions.

B Foreign Exchange gains and losses resulting from settlement of such transactions and from the translation of monetary assets
and liabilities denominated in foreign currencies at the year end exchange rates are recognised in the Statement of Profit and
Loss.

C Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of Profit and Loss
within finance costs. All the other foreign exchange gains and losses are presented in the statement of Profit and Loss on a
net basis.

5 Revenue Recognition:

A Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the
consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or
duties collected on behalf of the government and is shown net of returns, trade allowances, rebates, value added taxes and
volume discounts.

B Excise duty is a liability of the Group as a manufacturer, which forms part of the cost of production, irrespective of whether
the goods are sold or not. Therefore, the recovery of excise duty flows to the Group on its own account and hence revenue
includes excise duty.

C Sales tax / Value Added Tax [VAT] is not received by the Group on its own account. Rather, it is tax collected on behalf of the
government on value added to the Goods by the Group. Accordingly, it is excluded from revenue.

D The specific recognition criteria described below must also be met before revenue is recognised.

a Sale of Goods:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to
the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration
received or receivable, net of returns and allowances, trade discounts and volume rebates. The goods are often sold with
volume discounts / pricing incentives and customers have a right to return damaged or expired products. Revenue from sales
is based on the price in the sales contracts / MRP, net of discounts. Historical experience is used to estimate and provide for
damage or expiry claims. No element of financing is deemed present as the sales are made with the normal credit terms as
per prevalent trade practice and credit policy followed by the Group.

Annual Report 2016-17 | 141

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)

b Service Income:

Service income is recognised as per the terms of contracts with the customers when the related services are performed as per
the stage of completion or on the achievement of agreed milestones and are net of service tax, wherever applicable.

c Interest Income:

For all debt instruments measured at amortised cost, interest income is recorded using the effective interest rate [EIR]. EIR is the
rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or
a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial
liability. When calculating the effective interest rate, the Group estimates the expected cash flows by considering all the
contractual terms of the financial instrument but does not consider the expected credit losses.

d Dividend:

Dividend income is recognised when the Group’s right to receive the payment is established, which is generally when
shareholders approve the dividend.

e Other Income:

Other income is recognised when no significant uncertainty as to its determination or realisation exists.

6 Government Grants:  

A Government grants are recognised in accordance with the terms of the respective grant on accrual basis considering the
status of compliance of prescribed conditions and ascertainment that the grant will be received.

B Government grants related to revenue are recognised on a systematic and gross basis in the Statement of Profit and Loss over
the period during which the related costs intended to be compensated are incurred.

C Government grants related to assets are recognised as income in equal amounts over the expected useful life of the related
asset.

D When loans or similar assistance are provided by governments or related institutions, with an interest rate below the current
applicable market rate, the effect of this favorable interest is regarded as a government grant. The loan or assistance is initially
recognised and measured at fair value and the government grant is measured as the difference between the initial carrying
value of the loan and the proceeds received. The loan is subsequently measured as per the accounting policy applicable to
financial liabilities. However, in accordance with the exemption as per Ind AS 101, for such loans that existed on April 1, 2015
the Group uses the previous GAAP carrying amount of the loan at the date of transition as the carrying amount of loan.

7 Taxes on Income:

Tax expenses comprise of current and deferred tax.

A Current Tax:

a Current tax is measured at the amount expected to be paid on the basis of reliefs and deductions available in accordance with
the provisions of the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted, at the reporting date.

b Current tax items are recognised in correlation to the underlying transaction either in Statement of Profit and Loss, OCI or
directly in equity.

142 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)

B Deferred Tax:

a Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes at the reporting date.

b Deferred tax liabilities are recognised for all taxable temporary differences.

c Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any
unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, the carry forward of unused tax credits and unused tax losses can be
utilized.

d The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognised
deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that
future taxable profits will allow the deferred tax asset to be recovered.

e Deferred tax assets and liabilities are measured at the tax rates [and tax laws] that have been enacted or substantively enacted
at the reporting date and are expected to apply in the year when the asset is realised or the liability is settled.

f Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

g Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against
current tax liabilities.

C MAT / AMT Credit Entitlement:

a Minimum Alternate Tax [MAT] / Alternate Minimum Tax [AMT] paid in a year is charged to the Statement of Profit and Loss as
current tax.

b The Group recognizes MAT / AMT credit available as an asset based on historical experience of actual utilisation of such
credit and only when and to the extent there is a convincing evidence that the Group will pay normal income tax during the
specified period i.e., the period for which MAT / AMT credit is allowed to be carried forward. Such asset, if any recognised, is
reviewed at each balance sheet date and the carrying amount is written down to the extent there is no longer a convincing
evidence that the Group will be liable to pay normal tax during the specified period.

8 Property, Plant and Equipment:  

A Freehold land is carried at historical cost. All other items of Property, Plant and Equipment are stated at historical cost of
acquisition / construction less accumulated depreciation and impairment loss. Historical cost [Net of Input tax credit
received / receivable] includes related expenditure and pre-operative & project expenses for the period up to completion of
construction / assets are ready for its intended use, if the recognition criteria are met and the present value of the expected
cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for
a provision are met. The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
All other repairs and maintenance costs charged to the statement of profit and loss during the reporting period in which they
are incurred, unless they meet the recognition criteria for capitalisation under Property, Plant and Equipment. On transition
to Ind AS, the Group has elected to continue with the carrying value of all its Property, Plant and Equipment recognised as at
April 1, 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the Property, Plant and
Equipment.

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Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)

B Where components of an asset are significant in value in relation to the total value of the asset as a whole, and they have
substantially different economic lives as compared to principal item of the asset, they are recognised separately as independent
items and are depreciated over their estimated economic useful lives.

C Depreciation on tangible assets is provided on “straight line method” based on the useful lives as prescribed under Schedule
II of the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair
approximation of the period over which the assets are likely to be used. However, management reviews the residual values,
useful lives and methods of depreciation of Property, Plant and Equipment at each reporting period end and any revision to
these is recognised prospectively in current and future periods.

D Depreciation on impaired assets is calculated on its residual value, if any, on a systematic basis over its remaining useful life.

E Depreciation on additions / disposals of the Property, Plant and Equipment during the year is provided on pro-rata basis
according to the period during which assets are used.

F Where the actual cost of purchase of an asset is below INR 10,000/-, the depreciation is provided @ 100%.

G Capital work in progress is stated at cost less accumulated impairment loss, if any.

H An item of Property, Plant and Equipment and any significant part initially recognised is derecognised upon disposal or when
no future economic benefits are expected from its use or disposal.Any gain or loss arising on de-recognition of the asset
[calculated as the difference between the net disposal proceeds and the carrying amount of the asset] is included in the
income statement when the asset is derecognised.

9 Intangible Assets:  

A Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at
cost less any accumulated amortisation and accumulated impairment losses.

B Internally generated intangibles are not capitalised and the related expenditure is reflected in statement of profit and loss in
the period in which the expenditure is incurred.

C Goodwill arising on acquisition of business is assessed at each balance sheet date for any impairment loss.

D Trade Marks, Technical Know-how Fees and other similar rights are amortised over their estimated economic life.

E Capitalised cost incurred towards purchase / development of software is amortised using straight line method over its useful
life as estimated by the management at the time of capitalisation.

F Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at
the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life
continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

G An item of intangible asset initially recognised is de-recognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on de-recognition of the asset [calculated as the difference between
the net disposal proceeds and the carrying amount of the asset] is included in the statement of profit and loss when the asset
is de-recognised.

10 Research and Development Cost:  

A Expenditure on research and development is charged to the Statement of Profit and Loss of the year in which it is incurred.

144 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)

B Capital expenditure on research and development is given the same treatment as Property, Plant and Equipment.

11 borrowing Costs:  

A Borrowing costs consist of interest and other borrowing costs that are incurred in connection with the borrowing of funds.
Other borrowing costs include ancillary charges at the time of acquisition of a financial liability, which is recognised as per EIR
method.

B Borrowing costs that are directly attributable to the acquisition/ construction of a qualifying asset are capitalised as part of the
cost of such assets, up to the date the assets are ready for their intended use.

12 Expenditure during the Construction Period:

The expenditure incidental to the expansion/ new projects are allocated to Property, Plant and Equipment in the year of
commencement of the commercial production.

13 Impairment of Assets:

The Property, Plant and Equipment and intangible assets are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal
and value in use. For the purposes of assessing impairment, the assets are grouped at the lowest levels for which there are separately
identifiable cash flows which are largely independent of the cash inflows from other assets or groups of assets [cash generating
units]. Non-financial assets other than goodwill that suffered an impairment loss are reviewed for possible reversal of impairment
at the end of each reporting period. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset
is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the
estimate of recoverable amount.

14 Inventories:

Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location
and condition are accounted for as follows:

A Raw Materials, Stores & Spare Parts, Packing Materials, Finished Goods, Stock-in-Trade and Works-in-Progress are valued at
lower of cost and net realisable value.

B Cost [Net of CENVAT and Input tax credit availed] of Raw Materials, Stores & Spare Parts, Packing Materials, Finished Goods &
Stock-in-Trade is determined on Moving Average Method.

C Costs of Finished Goods and Works-in-Progress are determined by taking material cost [Net of CENVAT and Input tax credit
availed], labour and relevant appropriate overheads based on the normal operating capacity, but excluding borrowing costs.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the
estimated costs necessary to make the sale. Write down of inventories to net realisable value is recognised as an expense and
included on “Changes in Inventories of Finished goods, Work-in-progress and Stock-in-Trade” and “Cost of Material Consumed” in
the relevant note in the Statement of Profit and Loss.

15 Cash and Cash Equivalents:  

Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand
deposits with banks where the original maturity is three months or less.

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Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)

16 Leases:  

As a lessee:

The determination of whether an arrangement is [or contains] a lease is based on the substance of the arrangement at the inception
of the lease. Lease under which the Group assumes potentially all the risk and rewards of ownership are classified as finance lease.
When acquired, such assets are capitalised at fair value or present value of the minimum lease payment at the inception of the
lease, whichever is lower. Lease payments under operating leases are recognised as an expense on straight line basis in Net Profit
in the statement of profit and loss over the lease term, unless the payments are structured to increase in line with expected general
inflation to compensate lessor’s expected inflationary cost increases.

As a lessor:

Lease income from operating leases where the Group is lessor is recognised in income on a straight line basis over the lease term
unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary
cost increases. The respective leased assets are included in the balance sheet based on their nature.

17 Provisions, Contingent Liabilities and Contingent Assets:

A Provisions are recognised when the Group has a present obligation as a result of past events and it is probable that the
outflow of resources will be required to settle the obligation and in respect of which reliable estimates can be made. A
disclosure for contingent liability is made when there is a possible obligation, that may, but probably will not require an
outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision / disclosure is made. Provisions and contingencies are reviewed at each balance sheet
date and adjusted to reflect the correct management estimates. Contingent assets are not recognised but are disclosed
separately in financial statements.

B If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability.

18 Provision for Product Expiry Claims:

Provisions for product expiry related costs are recognised when the product is sold to the customer. Initial recognition is based on
historical experience. The initial estimate of product expiry claim related costs is revised annually.

19 Employee benefits:

A Short term obligations:

Liabilities for wages and salaries, including leave encashments that are expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service are recognised in respect of employees’ services up to
the end of the reporting and are measured by the amounts expected to be paid when the liabilities are settled. The liabilities
are presented as current employee benefit obligations in the balance sheet.

B Long term employee benefits obligations:

a Leave Wages and Sick Leave:

The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months period after the end of
the period in which the employees render the related service. They are therefore, measured at the present value of expected
future payments to be made in respect of services provided by employees upto the end of the reporting period using the

146 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)

projected unit credit method, as determined by actuarial valuation, performed by an independent actuary. The benefits are
discounted using the market yields at the end of reporting period that have the terms approximating to the terms of the
related obligation. Gains and losses through re-measurements are recognised in statement of profit and loss.

b Defined Benefit Plans:

Gratuity:

The Group operates a defined benefit gratuity plan with contributions to be made to a separately administered fund through
Life Insurance Corporation of India through Employees Group Gratuity Plan. The Liability or asset recognised in the balance
sheet in respect of defined benefit gratuity plan is the present value of the defined benefit plan obligation at the end of the
reporting period less the fair value of the plan assets. The Liabilities with regard to the Gratuity Plan are determined by actuarial
valuation, performed by an independent actuary, at each balance sheet date using the projected unit credit method.

The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future
cash outflows by reference to the market yields at the reporting period on government bonds that have terms approximating
to the terms of the related obligation.

The net interest cost in calculated by applying the discounting rate to the net balance of the defined benefit obligation and
the fair value of plan assets. Such costs are included in employee benefit expenses in the statement of Profit and Loss.

Re-measurements gains or losses arising from experience adjustments and changes in actuarial assumptions are recognised
immediately in the period in which they occur directly in “other comprehensive income” and are included in retained earnings
in the statement of changes in equity and in the balance sheet. Re-measurements are not reclassified to profit or loss in
subsequent periods.

The Group recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and
loss:

i Service costs comprising current service costs, past service costs, gains and losses on curtailments and non routine
settlements.

ii Net interest expense or income.

c Defined Contribution Plans - Provident Fund Contribution:

Eligible employees of the Group receive benefits from a provident fund, which is a defined contribution plan. Both the eligible
employee and the Group make monthly contributions to the provident fund plan equal to a specified percentage of the
covered employee’s salary. Amounts collected under the provident fund plan are deposited in a government administered
provident fund. The Group have no further obligation to the plan beyond its monthly contributions. Such contributions are
accounted for as defined contribution plans and are recognised as employees benefit expenses when they are due in the
statement of profit and loss.

C Employee Separation Costs:

The compensation paid to the employees under Voluntary Retirement Scheme is expensed in the year of payment.

20 Dividends :  

The final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are
recorded as liability on the date of declaration by the Parent’s Board of Directors.

Annual Report 2016-17 | 147

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)
21 Excise Duty:  

Excise duty is accounted at a concessional rate as per Notification No. 1/2011-CE without availing CENVAT credit in Zydus Wellness
Limited, whereas in the Partnership Firm same is accounted net of recredit benefits and CENVAT is availed on inputs, capital goods
and eligible services.

22 Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
another entity.

A Financial assets:

a Initial recognition and measurement:

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through
profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial
assets that require delivery of assets within a time frame established by regulation or convention in the market place [regular
way trades] are recognised on the settlement date, i.e., the date that the Group settle to purchase or sell the asset.

b Subsequent measurement:

For purposes of subsequent measurement, financial assets are classified as follows:

Investment in mutual funds instruments at fair value through profit or loss [FVTPL]:

FVTPL is for investment in mutual funds instruments. Any such instruments, which does not meet the criteria for categorization
as at amortized cost or as FVTOCI, is classified as at FVTPL.Such instruments included within the FVTPL category are measured
at fair value with all changes recognized in the P&L.

c De-recognition:

A financial asset [or, where applicable, a part of a financial asset] is primarily de-recognised [i.e. removed from the Group’s
balance sheet] when:

i The rights to receive cash flows from the asset have expired, or

ii The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either [a] the Group
has transferred substantially all the risks and rewards of the asset, or [b] the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement,
it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to
recognise the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also recognises
an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and
obligations that the Group has retained. When the Group has transferred the risk and rewards of ownership of the financial
asset, the same is de-recognised.

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Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)
d Impairment of financial assets:

In accordance with Ind AS 109, the Group applies expected credit loss [ECL] model for measurement and recognition of impairment
loss on the following financial assets and credit risk exposure:

a Financial assets that are debt instruments, and are measured at amortised cost

b Trade receivables or any contractual right to receive cash or another financial asset

c Financial assets that are debt instruments and are measured as at FVTOCI

The Group follows ‘simplified approach’ for recognition of impairment loss allowance on Point c provided above. The application of
simplified approach does not require the Group to track changes in credit risk. Rather, it requires the Group to recognise the impairment
loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Group determines that whether there has been a
significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12 month ECL is used to provide
for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period credit quality of the
instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to
recognising impairment loss allowance based on 12 month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument.
The 12 month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the
reporting date ECL is the difference between all contractual cash flows that are due to the Group in accordance with the contract and
all the cash flows that the entity expects to receive [i.e., all cash shortfalls], discounted at the original EIR.

ECL impairment loss allowance [or reversal] recognized during the period is recognized as income/ expense in the statement of profit
and loss. The balance sheet presentation for various financial instruments is described below:

Financial assets measured as at amortised cost and contractual revenue receivables: ECL is presented as an allowance, i.e., as an integral
part of the measurement of those assets in the balance sheet, which reduces the net carrying amount. Until the asset meets write off
criteria, the Group does not reduce impairment allowance from the gross carrying amount.

For assessing increase in credit risk and impairment loss, the Group combines financial instruments on the basis of shared credit risk
characteristics.

B Financial liabilities:

a Initial recognition and measurement:

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised
initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

b Subsequent measurement:

Subsequently all financial liabilities are measured as amortised cost except for Loans and borrowings, as described below:

Loans and borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method.

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Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)
Gains and losses are recognised in profit or loss when the liabilities are de-recognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part
of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

c De-recognition:

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of
a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

d Embedded derivatives:

An embedded derivative is a component of a hybrid [combined] instrument that also includes a non-derivative host contract with the
effect that some of the cash flows of the combined instrument vary in a way similar to a standalone derivative. Derivatives embedded
in all other host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks
are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value through
profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss, unless
designated as effective hedging instruments.

C Reclassification of financial assets:

The Group determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification
is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a
reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model
are expected to be infrequent. The Group’s senior management determines change in the business model as a result of external or
internal changes which are significant to the Group’s operations. Such changes are evident to external parties. A change in the business
model occurs when the Group either begins or ceases to perform an activity that is significant to its operations. If the Group reclassifies
financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next
reporting period following the change in business model as per Ind AS 109.

D Offsetting of financial instruments:

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities
simultaneously.

23 Fair Value Measurement:  

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:

a In the principal market for the asset or liability, or

b In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account
a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances

150 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)

and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

a Level 1 — Quoted [unadjusted] market prices in active markets for identical assets or liabilities

b Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable

c Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have
occurred between levels in the hierarchy by re-assessing categorisation [based on the lowest level input that is significant to the fair value
measurement as a whole] at the end of each reporting period.

24 Segment Reporting:  

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker
(CODM) of the Group.

25 Earnings per Share:  

Basic earnings per share are calculated by dividing the net profit or loss [excluding other comprehensive income] for the year attributable to
equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity
shares outstanding during the year is adjusted for events such as bonus issue, bonus element in a right issue, shares split and reserve share
splits [consolidation of shares] that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss [excluding other comprehensive income] for the year
attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of
all dilutive potential equity shares.

b Standards issued but not yet effective:  

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying
amendments to Ind AS 7 “Statement of cash flows” and Ind AS 102 “Share-based payment”. These amendments are in accordance with the
recent amendments made by International Accounting Standards Board (IASB) to IAS 7 “Statement of cash flows” and IFRS 2 “Share-based
payment”, respectively. The amendments are applicable to the Group from April 1, 2017.

Amendment to Ind AS 7:  

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in
liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a
reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure
requirement.

The Group is evaluating the requirements of the amendment and its effect on the financial statements.

Amendment to Ind AS 102:  

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and
awards that include a net settlement feature in respect of withholding taxes. It clarifies that the fair value of cash-settled awards is determined

Annual Report 2016-17 | 151

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 2 - SiGNificANt AccOuNtiNG POlicieS: (contd.)
on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected
in the “fair values”, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards
expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified
with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the
modification. Further, the amendment requires the award that include a net settlement feature in respect of withholding taxes to be treated as
equity-settled in its entirely. The cash payment to the tax authority is treated as if it was part of an equity settlement. This amendment does not
apply to the Group.

152 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 3 - PrOPerty, PlANt ANd equiPmeNt: INR-Lakhs
Freehold Leasehold buildings Plant and Furniture Vehicles Office Total
Land Land Equipment and Equipment
Fixtures
Gross block:
As at April 1, 2015* 49 570 1,679 6,110 253 150 167 8,978
Additions 0 0 36 289 22 65 15 427
Disposals 0 0 0 (5) 0 0 0 (5)
Other adjustments 0 0 0 0 0 0 0 0
As at March 31, 2016 49 570 1,715 6,394 275 215 182 9,400
Additions 0 0 1,480 1,240 2 44 17 2,783
Disposals 0 0 0 (45) 0 (35) 0 (80)
Other adjustments 0 0 0 0 0 0 0 0
As at March 31, 2017 49 570 3,195 7,589 277 224 199 12,103
Depreciation and Impairment:
As at April 1, 2015* 0 31 297 2,281 65 48 105 2,827
Depreciation for the year 0 6 53 550 23 21 25 678
Impairment for the year 0 0 0 0 0 0 0 0
Disposals 0 0 0 (4) 0 0 0 (4)
As at March 31, 2016 0 37 350 2,827 88 69 130 3,501
Depreciation for the year 0 6 57 572 24 26 19 704
Impairment for the year 0 0 0 0 0 0 0 0
Disposals 0 0 0 (31) 0 (15) 0 (46)
As at March 31, 2017 0 43 407 3,368 112 80 149 4,159
Net block:
As at April 1, 2015* 49 539 1,382 3,829 188 102 62 6,151
As at March 31, 2016 49 533 1,365 3,567 187 146 52 5,899
As at March 31, 2017 49 527 2,788 4,221 165 144 50 7,944
*Represents deemed cost on the date of transition to Ind AS. Gross block and accumulated depreciation from the previous GAAP have
been disclosed for the purpose of better understanding of the original cost of assets.

Note: 4 - iNtANGible ASSetS:

Other Intangible Assets
Goodwill brands/ Computer Commercial Technical Total
Trademarks Software Rights Know-how
Gross block:
As at April 1, 2015* 2,282 5 8 10 2 25
Additions 0 0 22 0 0 22
Disposals 0 0 0 0 0 0
Other adjustments 0 0 0 0 0 0
As at March 31, 2016 2,282 5 30 10 2 47
Additions 0 0 13 0 0 13
Disposals 0 0 0 0 0 0
Other adjustments 0 0 0 0 0 0
As at March 31, 2017 2,282 5 43 10 2 60
Amortisation and Impairment:
As at April 1, 2015* 0 5 3 9 1 18
Amortisation for the year 0 0 2 1 0 3
Impairment for the year 0 0 0 0 0 0
Disposals 0 0 0 0 0 0
Annual Report 2016-17 | 153
Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 4 - iNtANGible ASSetS: (contd.) INR-Lakhs
Other Intangible Assets
Goodwill brands/ Computer Commercial Technical Total
Trademarks Software Rights Know-how
As at March 31, 2016 0 5 5 10 1 21
Amortisation for the year 0 0 12 0 0 12
Impairment for the year 0 0 0 0 0 0
Disposals 0 0 0 0 0 0
As at March 31, 2017 0 5 17 10 1 33
Net block:
As at April 1, 2015* 2,282 0 5 1 1 7
As at March 31, 2016 2,282 0 25 0 1 26
As at March 31, 2017 2,282 0 26 0 1 27

*Represents deemed cost on the date of transition to Ind AS. Gross block and accumulated depreciation from the previous GAAP have
been disclosed for the purpose of better understanding of the original cost of assets.

Note: 5 - lOANS:
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
[Unsecured, Considered Good unless otherwise stated]
Security Deposits 67 70 43
Others:
Considered good 3 7 14
Total 70 77 57

Note: 6 - Other fiNANciAl ASSetS:

As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
[Unsecured, Considered Good unless otherwise stated]
Deposits 57 18 18
Total 57 18 18

Note: 7 - Other NON-curreNt ASSetS:

As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
[Unsecured, Considered Good unless otherwise stated]
Balances with Statutory Authorities 145 53 47
Capital Advances 358 4 78
Total 503 57 125

154 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 8 - ASSet fOr curreNt tAx [Net]: INR-Lakhs
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
[Unsecured, Considered Good unless otherwise stated]
Advance payment of Tax [Net of provision for taxation] 99 488 281
Alternative Minimum Tax Credit Entitlement 6,065 4,616 3,348
Total 6,164 5,104 3,629

Note: 9 - iNveNtOrieS:
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
[The Inventory is valued at lower of cost and net realisable value]
Classification of Inventories:
Raw Materials 779 564 703
Work-in-progress 33 45 27
Finished Goods 1,877 1,278 1,257
Stock-in-Trade 16 35 35
Others:
Packing Materials 483 478 577
Total 3,188 2,400 2,599

Note: 10 - curreNt fiNANciAl ASSetS - iNveStmeNtS:

Nos. As at As at As at
[*] March 31, 2017 March 31, 2016 April 1, 2015
Investment in Mutual Funds [Quoted] [Valued at fair value
through profit or loss]:
ICICI - Liquid - Direct Plan - Growth 1246890.57 3,001 0 0
Axis Liquid Fund-Direct Growth[*] [301727.19] 0 5,067 0
HDFC Liquid Fund-Direct Growth[*] [111859.55] 0 3,345 0
Tata Money Market Fund Direct Growth[*] [42032.91] 0 1,004 0
Total 3,001 9,416 0
A i Aggregate amount of quoted investments 3,001 9,416 0
ii Market value of quoted investments 3,001 9,416 0
B Explanations:
In “Nos. [*]” figures of previous year are stated in [ ].

Annual Report 2016-17 | 155

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 11 - trAde receivAbleS: INR-Lakhs
As at As at As at
March 31, 2017 March,31, 2016 April 1, 2015
Unsecured - Considered good: 404 276 148
Total 404 276 148

Note: 12 - cASh ANd cASh equivAleNtS:

As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Balances with Banks - in Current Accounts 2,144 2,275 1,917
Cash on Hand 3 3 5
Total 2,147 2,278 1,922
In accordance with MCA notification G.S.R. 308 (E) dated March 30,
2017 details of Specified Bank Notes [SBN] and Other Denomination
Notes [ODN] held and transacted during the period from November 8,
2016 to December 30, 2016 are given below:
Particulars Total SbN ODN
Closing cash on hand as on November 8, 2016 1.68 0.83 0.85
Permitted receipts 5.82 0 5.82
Permitted payments (5.51) 0 (5.51)
Amount deposited in banks (0.92) (0.83) (0.09)
Closing cash on hand as on December 30, 2016 1.07 0 1.07

Note: 13 - bANk bAlANce Other thAN cASh ANd cASh equivAleNtS:

As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Earmarked balances with bank for :
Unpaid dividend 78 87 43
Fixed Deposit with banks 41,791 28,088 31,935
Total 41,869 28,175 31,978

Note: 14 - Other curreNt fiNANciAl ASSetS:

As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
[Unsecured, Considered Good]
Others 162 110 113
Total 162 110 113

Note: 15 - Other curreNt ASSetS:

As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
[Unsecured, Considered Good]
Balances with Statutory Authorities 563 559 1,705
Advances to Suppliers 186 49 17
Other Receivable 55 0 0
Export Incentive Receivable 12 0 0
Prepaid Expenses 35 32 15
Total 851 640 1,737

156 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 16 - equity ShAre cAPitAl: INR-Lakhs
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Authorised:
4,50,00,000 [as at March 31, 2016: 4,50,00,000 {as at April 1, 2015:
4,50,00,000}] Equity Shares of INR 10/- each 4,500 4,500 4,500
4,500 4,500 4,500
Issued, Subscribed and Paid-up:
3,90,72,089 [as at March 31, 2016: 3,90,72,089 {as at April 1, 2015:
3,90,72,089}] Equity Shares of INR 10/- each fully paid up 3,907 3,907 3,907
Total 3,907 3,907 3,907
A There is no change in the numbers of equity shares at the
beginning and end of the year
Number of shares at the beginning and end of the year 3,90,72,089 3,90,72,089 3,90,72,089
B The Group has only one class of equity shares having a par value
of INR 10/- each per share. Each holder of equity share is entitled
to one vote per share. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the
Annual General Meeting, except in the case of interim dividend. In
the event of liquidation of the Group, the equity shareholders shall
be entitled to proportionate share of their holding in the assets
remaining after distribution of all preferential amounts.
C Details of Shareholder holding more than 5% of aggregate
Equity Shares of INR 10/- each
[as at March 31, 2016: INR 10/- {as at April 1, 2015: INR 10/-} each],
fully paid:
Cadila Healthcare Limited
Number of Shares 2,81,63,755 2,81,63,755 2,81,63,755
% to total share holding 72.08% 72.08% 72.08%
D Number of Shares held by Holding Company
Cadila healthcare Limited 2,81,63,755 2,81,63,755 2,81,63,755

Annual Report 2016-17 | 157

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 17 - Other equity: INR-Lakhs
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
General Reserve: [*]
Balance as per last Balance Sheet 4,500 4,500 4,500
Non Controlling Interest:
Balance as per last Balance Sheet 864 686 686
Add/ [Less]: Credited/ [Debited] during the year 193 178 0
1,057 864 686
Fair Value through Other Comprehensive Income [FVTOCI] Reserve:
Balance as per last Balance Sheet (33) (17) 0
Add: Adjusted from Retained Earnings on transition to Ind AS 0 0 (17)
[Less]/ Add: [Debited]/ Credited during the year 21 (16) 0
(12) (33) (17)
Retained Earnings:
Balance as per last Balance Sheet 39,482 35,034 24,149
Less: Additional depreciation upon revision in useful lives of
tangible assets 0 0 (26)
Add: Adjusted to FVTOCI reserve on transition to Ind AS 0 0 17
Less: Adjusted to reserve on transition to Ind AS 0 0 (1)
Add: Profit for the year 10,898 10,326 10,895
50,380 45,360 35,034
Less: Dividends:
Dividends 2,540 4,884 0
Corporate Dividend Tax on Dividend 517 994 0
3,057 5,878 0
Balance as at the end of the year 47,323 39,482 35,034
Total 52,868 44,813 40,203
[*] General Reserve can be used for the purposes and as per guidelines
prescribed in the Companies Act, 2013.

158 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 18 - Other fiNANciAl liAbilitieS: INR-Lakhs
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Trade Deposits 21 6 8
Others 34 38 13
Total 55 44 21

Note: 19 - PrOviSiONS:
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Provision for Employee Benefits 74 58 43
Total 74 58 43

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 Group are entitled to leave as per the leave policy of the
Group. The liability on account of 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 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 Group 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.

Annual Report 2016-17 | 159

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 19 - PrOviSiONS: (contd.) INR-Lakhs
As at March 31, 2017 As at March 31, 2016
Medical Leave Leave Wages Gratuity Medical Leave Leave Wages Gratuity
b Change in the present value of the defined benefit obligation:
Opening defined benefit 26 201 250 21 177 191
obligation
Interest cost 2 14 19 2 12 14
Current service cost 3 36 46 6 34 40
Benefits paid 0 (61) (34) 0 (56) (21)
Actuarial [gains] / losses on
obligation 2 18 (24) (3) 34 26
Closing defined benefit
obligation 33 208 257 26 201 250
C Change in the fair value of plan assets:
Opening fair value of plan assets 0 143 217 0 133 194
Expected return on plan assets 0 11 16 0 11 18
Adjustment of Opening fund 0 0 0 0 0 0
Expenses deducted from the 0 0 (2) 0 0 (2)
fund
Contributions by employer 0 0 46 0 0 32
Benefits paid 0 0 (34) 0 0 (21)
Actuarial [losses] /gains 0 1 (1) 0 (1) (4)
Closing fair value of plan assets 0 155 242 0 143 217
Total actuarial [losses] / gains to
be recognised (2) (17) (23) 3 (35) (30)
D Actual return on plan assets:
Expected return on plan assets 0 11 16 0 11 18
Actuarial [losses] / gains on plan
assets 0 1 (1) 0 (1) (4)
Actual return on plan assets 0 12 15 0 10 14
E Amount recognised in the balance sheet:
Liabilities / [Assets] at the end of
the year 33 208 257 26 201 250
Fair value of plan assets at the
end of the year 0 (155) (242) 0 (143) (217)
Liabilities / [Assets] recognised
in the Balance Sheet 33 53 15 26 58 33

160 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 19 - PrOviSiONS: (contd.)
INR-Lakhs
As at March 31, 2017 As at March 31, 2016
Medical Leave Leave Wages Gratuity Medical Leave Leave Wages Gratuity
Current service cost 3 36 46 6 34 40
Interest cost on benefit 2 14 19 2 12 14
obligation
Expected return on plan assets 0 (11) (16) 0 (11) (18)
Net actuarial [gains] / losses in
the year 2 17 0 (3) 35 0
Net expenses / [benefits] 7 57 49 5 70 36
G Movement in net liabilities recognised in balance Sheet:
Opening net liabilities 26 58 33 21 44 (3)
Expenses as above [P & L
Charge] 7 57 49 5 70 36
Contribution to plan assets 0 0 (46) 0 0 0
Amount recognised in OCI 0 0 (23) 0 0 0
Benefit paid 0 (61) 0 0 (56) 0
Liabilities / [Assets] recognised
in the Balance Sheet 33 54 14 26 58 33
h Principal actuarial assumptions for defined benefit plan and long term employment plan:
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015
Discount rate [*] 6.95% 7.80% 7.80%
Annual increase in salary cost [#] 12% for 1st 4 years, 12% for 1st 5 years, 7.50% for all years
9% thereafter 9% thereafter
[*]The rate of discount is considered based on market yield on Government Bonds having currency and terms in consistence
with the currency and terms of the post employment benefit obligations.
[#]The estimates of future salary increases are considered in actuarial valuation, taking into account inflation, seniority, promotion
and other relevant factors such as supply and demand in the employment market.
I The categories of plan assets as a % of total plan assets are:
Insurance plan 0.00% 100.00% 100.00% 0.00% 100.00% 100.00%

Annual Report 2016-17 | 161

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 19 - PrOviSiONS: (contd.)

J Amount recognised in current and previous four years: INR-Lakhs

As at As at As at As at As at
March 31, 2017 March 31, 2016 March 31, 2015 March 31, 2014 March 31, 2013
Gratuity:
Defined benefit obligation 257 250 191 153 144
Fair value of Plan Assets 242 217 194 173 172
Deficit / [Surplus] in the plan 15 33 (3) (20) (28)
Actuarial Loss / [Gain] on Plan Obligation (24) 26 17 0 36
Actuarial Loss / [Gain] on Plan Assets (1) (4) (2) (3) 0
The expected contributions for Defined Benefit Plan for the next financial year will be in line with FY 2016-17.

Sensitivity analysis:
A quantitative sensitivity analysis for significant assumption as is as shown below:

A Medical Leave:
As at March 31, 2017 As at March 31, 2016
Assumption Discount rate
Sensitivity Level 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] (2) 1 (1) 2
Assumption Annual increase in salary cost
Sensitivity Level 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] 1 (2) 1 (1)

b Leave Wages:
As at March 31, 2017 As at March 31, 2016
Assumption Discount rate
Sensitivity Level 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] (5) 6 (12) (1)
Assumption Annual increase in salary cost
Sensitivity Level 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] 6 (5) (1) 2

162 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 19 - PrOviSiONS: (contd.)
C Gratuity:
As at March 31, 2017 As at March 31, 2016
Assumption Discount rate
Sensitivity Level 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] (9) 8 (9) 6
Assumption Annual increase in salary cost
Sensitivity Level 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
Impact on defined benefit obligation [INR-Lakhs] 8 (9) 6 (9)

The following payments are expected contributions to the defined benefit plan in future years: INR-Lakhs
As at March 31, 2017 As at March 31, 2016
Within the next 12 months [next annual reporting period] 83 93
Between 2 and 5 years 207 199
Between 5 and 10 years 189 194
Total expected payments 479 486

Note: 20 - deferred tAx:

A break up of Deferred Tax Liabilities and Assets into major components of the respective balances are as under: INR-Lakhs
As at Charge for As at Charge for As at
April 1 2015 the previous March 31 2016 the current March 31, 2017
year year
Deferred Tax Liabilities:
Depreciation 496 0 496 45 541
Deferred Tax Assets:
Employee benefits 29 45 74 10 84
Provision for Expiry and Breakages 9 7 16 8 24
Total 38 52 90 18 108
Net Deferred Tax Liabilities 458 (52) 406 27 433
b The Net Deferred Tax Liabilities/(Assets) of INR 27 [Previous Year: INR (52)] Lakhs for the year has been provided in the Statement of
Profit and Loss.

C The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax
liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

The major components of income tax expense for the years ended March 31, 2017 and March 31, 2016 are :

Annual Report 2016-17 | 163

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Statement of profit and loss: INR-Lakhs
As at March 31, 2017 As at March 31, 2016
Profit or loss section:
Current income tax:
Current income tax charge 1,245 1,208
Adjustments in respect of current income tax of previous year 0 0
Deferred tax:
Relating to origination and reversal of temporary differences 27 (52)
Income tax expense reported in the statement of profit and loss 1,272 1,156

Reconciliation of tax expense and accounting profit multiplied by India’s domestic tax rate for March 31, 2017 and March 31,
2016:
As at March 31, 2017 As at March 31, 2016
Accounting profit before tax 12,400 11,680
At India’s statutory income tax rate 4,307 4,037
Adjustments in respect of current income tax of previous years 5 13
Utilisation of previously unrecognised tax losses 0 (72)
Effect of Special tax deductions (like CSR) (47) (49)
Effect of Special tax deductions (like 80IE) (4,079) (3,728)
Effect of MAT/AMT Credit not accounted for 992 1,037
Adjustments on accounts of Ind AS provisions 43 (58)
Non-deductible expenses for tax purposes:
Other non-deductible expenses 7 6
Others 44 (30)
At the effective income tax rate of 10.26% (March 31, 2016: 9.90%) 1,272 1,156
Income tax expense reported in the statement of profit and loss 1,272 1,156
The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax
liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. The Group has
tax losses which arose in India of INR357 Lakhs (March 31, 2016: INR Nil , April 1, 2015 INR 218 Lakhs) that are available for offsetting for
eight years against future taxable profits of the Group in which the losses arose. Majority of these losses are allowed to be carry forward
for indefinite period.

Deferred tax assets have not been recognised in respect of these losses as they may not be used to offset taxable profits elsewhere in
the Group eligible for set off upto 15 years from the year in which the same arises, and there are no other tax planning opportunities
or other evidence of recoverability in the near future. If the Group was able to recognise all unrecognised deferred tax assets, the profit
would increase by INR 110 Lakhs and MAT credit not recognised as at March 31, 2017 is INR 78 Lakhs in Zydus Wellness Limited and AMT
credit not recognized as at March 31, 2017 is INR 3760 Lakhs in Zydus Wellness Sikkim.

164 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 21 - curreNt fiNANciAl liAblitieS -bOrrOwiNGS: INR-Lakhs
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Loans repayable on Demand:
Working Capital Loans from Banks [Unsecured] [*] 2,500 0 0
Total 2,500 0 0
[*]Working capital loan which is repayable on demand, is availed at the
interest rate of T-bill rate plus 5 bps. The outstanding amount of loan
as at March 31, 2017 is INR 2500 [as at March 31, 2016: INR NIL] Lakhs.

Note: 22 - trAde PAyAbleS:

As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Trade Payables 6,650 6,320 5,025
Total 6,650 6,320 5,025

Note: 23 - Other fiNANciAl liAbilitieS:

As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Interest accrued but not due on borrowings 8 0 0
Payable to Employees 468 399 358
Unpaid Dividends 78 87 43
Total 554 486 401

Note: 24 - Other curreNt liAbilitieS:

As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Payable to Statutory Authorities 564 432 400
Advances from Customers 224 162 216
Others 721 30 54
Total 1,509 624 670

Note: 25 - PrOviSiONS:
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Provision for Employee Benefits 62 68 32
Provision for claims for product expiry and return of goods [*] 70 51 30
Total 132 119 62
[*] Provision for claims for product expiry and return of goods:
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 retailer.The Group
does not expect such claims to be reimbursed by any other party in
future.
b The movement in such provision is stated as under:
i Carrying amount at the beginning of the year 51 30 35
ii Additional provision made during the year 70 51 30
iii Amount used 51 30 35
iv Carrying amount at the end of the year 70 51 30

Annual Report 2016-17 | 165

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 26 - cONtiNGeNt liAbilitieS ANd cOmmitmeNtS [tO the exteNt NOt PrOvided fOr]: INR-Lakhs
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
A Contingent Liabilities:
a Claims against the Company not acknowledged as debts 0 20 20
b In respect of guarantees given by Banks and/or counter
guarantees given by the Company 258 18 17
c Other money for which the company is contingently liable:
i In respect of Sales Tax matters pending before appellate
authorities 2,094 2,036 77
ii In respect of Income Tax matters pending before appellate 0 66 194
authorities
iii In respect of the demands raised by the Central Excise, State 320 41 0
Excise & Service Tax Authority
iv In respect of custom duty liablity under EPCG 8 0 0
scheme
v Letters of Credit for Imports 0 16 0
b Commitments:
Estimated amount of contracts remaining to be executed on 423 43 148
capital account and not provided for

Note: 27 - iNterim divideNd :

The Board of Directors at its meeting held on March 1, 2017 declared and paid intrim dividend of INR 6.50/- per equity share of INR
10/- each.

166 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 28 - reveNue frOm OPerAtiONS: INR-Lakhs
As at As at
March 31, 2017 March 31, 2016
Sale of Products 45,934 42,419
Other Operating Revenues:
Net Gains on foreign currency transactions and translation 19 3
Miscellaneous Income 302 180
Total 46,255 42,602
Note: 29 - Other iNcOme:
As at As at
March 31, 2017 March 31, 2016
Interest Income on Financial Assets measured at Amortised Cost 3,139 3,060
Gain on Sale of Investments 122 40
Fair value gain on financial instrument at fair value through statement of profit and loss 3 142
Total 3,264 3,242
Note: 30 - cOSt Of mAteriAlS cONSumed:
As at As at
March 31, 2017 March 31, 2016
Raw Materials :
Stock at commencement 564 703
Add: Purchases 9,753 7,761
10,317 8,464
Less: Stock at close 779 564
9,538 7,900
Packing Materials consumed 4,060 3,986
Total 13,598 11,886
Note: 31 - PurchASeS Of StOck-iN-trAde:
As at As at
March 31, 2017 March 31, 2016
Purchases of Stock-in-Trade 51 121
Total 51 121
Note: 32 - chANGeS iN iNveNtOrieS:
As at As at
March 31, 2017 March 31, 2016
Stock at commencement:
Work-in-progress 45 27
Finished Goods 1,278 1,257
Stock-in-Trade 35 35
1,358 1,319
Less: Stock at close:
Work-in-progress 33 45
Finished Goods 1,877 1,278
Stock-in-Trade 16 35
1,926 1,358
(568) (39)
Differential Excise Duty on Opening and Closing stock of Finished Goods 176 104
Total (392) 65

Annual Report 2016-17 | 167

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 33 - emPlOyee beNefitS exPeNSe: INR-Lakhs
As at As at
March 31, 2017 March 31, 2016
Salaries and wages 4,222 3,634
Contribution to provident and other funds 189 172
Staff welfare expenses 135 131
Total 4,546 3,937

Note: 34 - fiNANce cOSt:

As at As at
March 31, 2017 March 31, 2016
Interest expense [*] 46 2
Bank commission & charges 9 12
Total 55 14
[*] The break up of interest expense into major heads is given below:
On working capital loans 45 0
Others 10 14
Total 55 14

Note: 35 - dePreciAtiON, AmOrtiSAtiON ANd imPAirmeNt exPeNSeS:

As at As at
March 31, 2017 March 31, 2016
Depreciation 704 678
Amortisation 12 3
Total 716 681

168 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 36 - Other exPeNSeS: INR-Lakhs
As at As at
March 31, 2017 March 31, 2016
Consumption of Stores and spare parts 197 198
Power & fuel 402 343
Labour Charges 714 691
Rent [*] 324 311
Repairs to Buildings 47 65
Repairs to Plant and Machinery 114 105
Repairs to Others 36 20
Insurance 83 58
Rates and Taxes 393 404
Whole Time Directors' Remuneration 232 262
Commission to Directors 20 14
Traveling Expenses 445 380
Legal and Professional Fees 313 478
Commission on sales 1,070 966
Freight and forwarding on sales 1,022 945
Advertisement and Sales promotions 7,664 6,918
Representative Allowances 480 558
Other marketing expenses 768 887
Bad debts written off 1 0
Directors' fees 32 12
Net Loss on disposal of Fixed Asset 18 0
Donation 5 0
Miscellaneous Expenses [**] 967 911
Total 15347 14526
[*] The Group has taken various residential / office premises / godowns under operating
lease or leave and license agreement with no restrictions and are renewable / cancellable at
the option of either of the parties. There are no sub-leases. The lease payments recognised
under “Rent Expenses” are: 171 153
[**] Miscellaneous Expenses include:
a Expenditure on Corporate Social Responsibility [CSR] Activities as required u/s 135 of 201 198
the Companies Act, 2013.
b Payment to the Statutory Auditors [including Service Tax]:
i - As Auditor 12 12
- For Other Services 0 0
- Total 12 12
ii Cost Auditor’s Remuneration including fees for other services 2 2

Annual Report 2016-17 | 169

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 37 - cOmPONeNtS Of Other cOmPreheNSive iNcOme [Oci]: INR-Lakhs
As at As at
March 31, 2017 March 31, 2016
Re-measurement gains [losses] on defined benefit plans 21 (16)
Total 21 (16)

Note: 38 - cAlculAtiON Of eArNiNGS Per equity ShAre [ePS]:

As at As at
March 31, 2017 March 31, 2016
The numerators and denominators used to calculate the basic and diluted EPS are as follows:
A Profit attributable to Shareholders INR - in Lakhs 10,898 10,326
B Basic and weighted average number of Equity Shares Numbers 3,90,72,089 3,90,72,089
outstanding during the year
C Nominal value of equity share INR 10 10
D Basic & Diluted EPS INR 27.89 26.43

Note: 39 - SeGmeNt iNfOrmAtiON:

The Chief Operating Decision Maker [CODM] reviews the group as a single “Consumer” segment. The group operates in one segment
only, namely “Consumer Products”. The Group also exports its products to other countries. However the value being below threshold
limit “Segment Reporting”, is not required.

Note: 40 - 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 Nesher Pharmaceuticals (USA) LLC [USA]
Dialforhealth Unity Limited Zydus Healthcare (USA) LLC [USA]
Dialforhealth Greencross Limited Zydus Noveltech Inc. [USA]
Zydus Healthcare Limited [ZHL] Hercon Pharmaceuticals LLC [USA]
Liva Pharmaceuticals Limited Zydus Healthcare S.A. (Pty) Ltd [South Africa]
Zydus Technologies Limited Simayla Pharmaceuticals (Pty) Ltd [South Africa]
Alidac Pharmaceuticals Limited Script Management Services (Pty) Ltd [South Africa]
Alidac Pharmaceuticals (Myanmar) Limited [Myanmar] Zydus France, SAS [France]
Zydus Lanka (Private) Limited [Sri Lanka] Zydus Nikkho Pharmaceutica Ltda. [Brazil]
Zydus Healthcare Philippines Inc. [Philippines] Laboratorios Combix S.L. [Spain]
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]
ZAHL B.V. [the Netherlands] Etna Biotech S.R.L. [Italy]

170 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 40 - relAted PArty trANSActiONS: (contd.)

ZAHL Europe B.V. [the Netherlands] Zydus Worldwide DMCC [Dubai]

Bremer Pharma GmbH [Germany] Zydus Discovery DMCC [Dubai]
Zydus Pharmaceuticals (USA) Inc. [USA] Sentynl Therapeutics Inc., USA

d Directors:
Dr. Sharvil P. Patel Chairman
Mr. Ganesh N. Nayak Non-Executive Director
Prof. Indiraben J. Parikh Independent Director
Mr. Kulin S. Lalbhai Independent Director
Mr. Humayun R. Dhanrajgir Independent Director

e Key Managerial Personnel:

Mr. Tarun G. Arora Whole Time Director
Mr. Amit B. Jain Executive Officer [Chief Financial Officer]
Mr. Dhaval N. Soni Executive Officer [Company Secretary]

f Enterprises significantly influenced by Directors and/or their relatives:

Cadmach Machinery Company Private Limited Western Ahmedabad Effluent Conveyance Company Private Limited
Zydus Hospitals and Healthcare Research Private Limited Zandra Infrastructure LLP
Zydus Hospitals (Vadodara) Private Limited Zydus Hospital LLP
Zydus Hospitals (Rajkot) Private Limited C. M. C. Machinery
MabS Biotech Private Limited Cadam Enterprises
Zydus Infrastructure Private Limited Zandra Herbs and Plantations LLP
Cadila Laboratories Private Limited
Pripan Investment Private Limited

Annual Report 2016-17 | 171

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 40 - relAted PArty trANSActiONS: (contd.)

b Transactions with Related Parties:

The following transactions were carried out with the related parties in the ordinary course of business:
a Details relating to parties referred to in Note 40 - A [a, b & c]
Value of the Transactions [INR - Lakhs]
holding Company Fellow Subsidiaries
Nature of Transactions Year ended Year ended Year ended Year ended
March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016
Services:
Cadila Healthcare Limited 6 3 0 0
Dividend Paid:
Cadila Healthcare Limited 1,831 3,520 0 0

Details relating to persons referred to in Note 40-A [e] above: 2017 2016
Remuneration:
Mr. Tarun G. Arora- Whole Time Director 232 262
Commission and Sitting Fees: 52 25
Outstanding remuneration payable: 39 34

172 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 41 - diSclOSureS AS required by iNd AccOuNtiNG StANdArd (iNd AS) 112 diSclOSure Of iNtereSt iN Other
eNtitieS:
material Non-controlling interests
INR-Lakhs

Name of Partnership Firm Principal place of Proportion of Proportion of Proportion of

business/Country interest held by interest held by interest held by
of incorporation/ Non-Controlling Non-Controlling Non-Controlling
Registration Entities as at Entities as at Entities as at
March 31, 2017 March 31, 2016 April 1, 2015
Zydus Wellness Sikkim INDIA 2% 2% 2%

Summarised Statement of Profit and Loss:

Zydus Wellness Sikkim
INR - Lakhs
2016-17 2015-16
Post tax profit/(loss) 11,487 9,893
Other Comprehensive Income 36 (16)
Total Comprehensive Income 11,523 9,877
Attributable to non-controlling interest 230 198

Summarised balance Sheet:

Zydus Wellness Sikkim
INR - Lakhs
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Current Assets 18,270 9,955 8,479
Non-Current Assets 12,846 8,612 7,488
Current Liabilities 7,229 5,863 4,926
Non-Current Liabilities 425 331 328
Total Equity 23,462 12,373 10,713
Attributable to:
Equity Holders of Parent 22,993 12,126 10,499
Non-Controlling Interest 469 247 214

Annual Report 2016-17 | 173

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNANciAl iNStrumeNtS:

Financial instruments

(i) Fair values hierarchy:

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels
of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as
follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2 : The fair value of financial instruments that are not traded in an active market is determined using valuation techniques
which maximise the use of observable market data rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Financial assets and liabilities measured at fair value - recurring fair value measurements:
INR-Lakhs
As at March 31, 2017
Level 1 Level 2 Level 3 Total
Financial assets
Investments at FVTPL
Mutual fund 3,001 0 0 3,001
Total financial assets 3,001 0 0 3,001

As at March 31, 2016

Level 1 Level 2 Level 3 Total
Financial assets
Investments at FVTPL
Mutual fund 9,416 0 0 9,416
Total financial assets 9,416 0 0 9,416

As at April 1, 2015
Level 1 Level 2 Level 3 Total
Financial assets
Investments at FVTPL
Mutual fund 0 0 0 0
Total financial assets 0 0 0 0

(iii) Fair value of instruments measured at amortised cost:

Financial assets and liabilities measured at amortised cost for which fair values are disclosed:
Financial assets:
The carrying amounts of trade receivables and other financial assets [other than derivatives], cash and cash equivalents are considered
to be the approximately equal to the fair values.

Financial Liabilities:

Fair values of loans from banks, other financial liabilities and trade payables are considered to be approximately equal to the carrying
values.
174 | Zydus Wellness Limited
Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNANciAl iNStrumeNtS: (contd.)

1 Financial risk management

(i) Financial instruments by category:

INR-Lakhs
As at March 31, 2017
Financial assets FVTPL FVOCI Amortised Cost Total
Mutual funds 3,001 0 0 3,001
Trade receivables 0 0 404 404
Loans & advances 0 0 162 162
Security deposit 0 0 70 70
Fixed deposit 0 0 41,926 41,926
Cash and cash equivalents 0 0 2,147 2,147
Total 3,001 0 44,709 47,710
Financial liabilities
Borrowings 0 0 2,500 2,500
Interest accured but not due on borrowings 0 0 8 8
Payable to Employees 0 0 468 468
Trade Payables 0 0 6,650 6,650
Security deposit 0 0 55 55
Unpaid dividend 0 0 78 78
Total 0 0 9,759 9,759

As at March 31, 2016

Financial assets FVTPL FVOCI Amortised Cost Total
Mutual funds 9,416 0 0 9,416
Trade receivables 0 0 276 276
Loans & advances 0 0 110 110
Security deposit 0 0 77 77
Fixed deposit 0 0 28,193 28,193
Cash and cash equivalents 0 0 2,278 2,278
Total 9,416 0 30,934 40,350
Financial liabilities
Borrowings 0 0 0 0
Interest accured but not due on borrowings 0 0 0 0
Payable to Employees 0 0 399 399
Trade Payables 0 0 6,320 6,320
Security deposit 0 0 44 44
Unpaid dividend 0 0 87 87
Total 0 0 6,850 6,850

Annual Report 2016-17 | 175

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNANciAl iNStrumeNtS: (contd.)

INR-Lakhs
As at April 1, 2015
Financial assets FVTPL FVOCI Amortised Cost Total
Mutual funds 0 0 0 0
Trade receivables 0 0 148 148
Loans & advances 0 0 113 113
Security deposit 0 0 57 57
Fixed deposit 0 0 31,996 31,996
Cash and cash equivalents 0 0 1,922 1,922
Total 0 0 34,236 34,236
Financial liabilities
Borrowings 0 0 0 0
Interest accured but not due on borrowings 0 0 0 0
Payable to Employees 0 0 358 358
Trade Payables 0 0 5,025 5,025
Security deposit 0 0 21 21
Unpaid dividend 0 0 43 43
Total 0 0 5,447 5,447

(ii) Risk Management:

The Group’s activities expose it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity is
exposed to and how the entity manages the risk and the related impact in the financial statements.

The Group’s risk management is managed in close cooperation with the board of directors and focuses on actively securing the
Group’s short, medium and long-term cash flows by minimizing the exposure to volatile financial markets. Long-term financial
investments are managed to generate lasting returns. The Group does not actively engage in the trading of financial assets for
speculative purposes nor does it write options. The most significant financial risks to which the Group is exposed are described
below:

A Credit risk:

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The Group is exposed
to credit risk from trade receivables, bank deposits and other financial assets. The Group periodically assesses the financial reliability
of the counter party taking into account the financial condition, current economic trends, analysis of historical bad debts and
ageing of accounts receivable. Individual customer limits are set accordingly.

Bank deposits : The Group maintains its Cash and cash equivalents and Bank deposits with reputed and highly rated banks. Hence,
there is no significant credit risk on such deposits.

Trade Receivable: The Group trades with recognized and credit worthy third parties. It is the Group’s policy that all customers who
wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an on-
going basis with the result that the Group’s exposure to bad debts is not significant. There are no significant credit risks with related
parties of the Group. The Group is exposed to credit risk in the event of non-payment by customers. Credit risk concentration with
respect to trade receivables is mitigated by the Group’s large customer base. Adequate expected credit losses are recognized as
per the assessments.

176 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNANciAl iNStrumeNtS: (contd.)
The history of trade receivables shows an allowance for bad and doubtful debts of INR 0.57 Lakhs as at March 31, 2017. The
Group has made allowance of INR Nil [Previous Year- INR Nil], against trade receivables of INR 404 Lakhs [Previous year - INR 276
Lakhs].

b Liquidity risk

a Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding
through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business,
the Group maintains flexibility in funding by maintaining availability under committed facilities.

b Management monitors rolling forecasts of the Group’s liquidity position and cash and cash equivalents on the basis of
expected cash flows. The Group account the liquidity of the market in which the entity operates. In addition, the Group’s
liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets
necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and
maintaining debt financing plans.

Maturities of financial liabilities :

The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities
for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.
Balances due within12 months equal their carrying balances as the impact of discounting is not significant.

INR-Lakhs
Particulars As at March 31, 2017
< 1 year 1-2 years 2-3 years > 3 years Total
Non-derivatives
Borrowings 2,500 0 0 0 2,500
Interest accrued but not due on
borrowings 8 0 0 0 8
Trade payable 6,650 0 0 0 6,650
Security deposit 0 0 0 55 55
Payable to Employee 468 0 0 0 468
Unpaid dividend 78 0 0 0 78
Total 9,704 0 0 55 9,759

Annual Report 2016-17 | 177

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNANciAl iNStrumeNtS: (contd.)

INR-Lakhs
Particulars As at March 31, 2016
< 1 year 1-2 years 2-3 years > 3 years Total
Non-derivatives
Borrowings 0 0 0 0 0
Interest accrued but not due on
borrowings 0 0 0 0 0
Trade payable 6,320 0 0 0 6,320
Security deposit 0 0 0 44 44
Payable to Employee 399 0 0 0 399
Unpaid dividend 87 0 0 0 87
Total 6,806 0 0 44 6,850

Particulars As at April 1, 2015

< 1 year 1-2 years 2-3 years > 3 years Total
Non-derivatives
Borrowings 0 0 0 0 0
Interest accrued but not due on
borrowings 0 0 0 0 0
Trade payable 5,025 0 0 0 5,025
Security deposit 0 0 0 21 21
Payable to Employee 358 0 0 0 358
Unpaid dividend 43 0 0 0 43
Total 5,426 0 0 21 5,447

C Foreign currency risk

The Group is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar, Euro
and GBP. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Group’s functional
currency. The Group’s operations in foreign currency is insignificant and hence there is no material risk.

178 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNANciAl iNStrumeNtS: (contd.)
a Foreign currency risk exposure:

The Group’s exposure to foreign currency risk at the end of the reporting period expressed as follows:

Sensitivity

The sensitivity of profit or loss and equity to changes in the exchange rates arises mainly from foreign currency denominated financial
instruments. INR-
Lakhs
As at March 31, 2017 As at March 31, 2016
Movement in Impact on PAT Movement in Impact on PAT
Rate Rate
USD 4.00% 4.02 4.92% 2.07
USD -4.00% (4.02) -4.92% (2.07)
EUR 8.00% (0.09) 11.86% 0
EUR -8.00% 0.09 -11.86% 0
Others 5.00% 0 5.00% 0
Others -5.00% 0 -5.00% 0

b Interest rate risk

Assets

The Group’s fixed deposits are carried at amortised cost and are fixed rate deposits. They are therefore not subject to interest rate
risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in
market interest rates.

c Price Risk

(a) Exposure

The Group’s exposure to price risk arises from investments in equity and mutual fund held by the Group and classified in the
balance sheet as fair value through OCI and at fair value through profit or loss respectively ‘To manage its price risk arising from
investments in equity securities and mutual fund, the Group diversifies its portfolio. Diversification of the portfolio is done in
accordance with the limits set by the Group.

Annual Report 2016-17 | 179

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 42 - fiNANciAl iNStrumeNtS: (contd.)

(b) Sensitivity- Mutual Fund

The table below summarises the impact of increases / decreases of the index on the Group’s equity and profit for the period.
The analysis is based on the assumption that the price of the instrument has increased by 2% or decreased by 2% with all other
variables held constant.
INR-Lakhs
As at March 31, 2017 As at March 31, 2016
Impact on PAT Impact on PAT
Mutual Funds [Quoted]
Increase 2% 60 185
Decrease 2% (60) (185)

2 Capital management
The Group’ s capital management objectives are
- to ensure the Group’s ability to continue as a going concern
- to provide an adequate return to shareholders
- maintain an optimal capital structure to reduce the cost of capital.
Management assesses the Group’s capital requirements in order to maintain an efficient overall financing structure while avoiding
excessive leverage. This takes into account the subordination levels of the Group’s various classes of debt. The Group manages
the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the
underlying assets. The Group has sufficient Cash and Cash Equivalents and Short term Fixed Deposit available against the debt and
not exposed to any long term debts.

The Group has taken loan for working capital requirement and as at March 31, 2017, the ratio of net finance cost to EBITDA was
0.42% (March 31, 2016 0.11%).

180 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 43 - firSt time AdOPtiON Of iNd AS:
The accounting policies set out in the note here have been applied in preparing the financial statements for the year ended March 31,
2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of
an opening Ind AS balance sheet at April 1, 2015 [the Group’s date of transition].

In preparing its opening Ind AS balance sheet, the Group has adjusted the amounts reported previously in financial statements prepared
in accordance with the accounting standards notified under Companies [Accounting Standards] Rules, 2006 [as amended] and other
relevant provisions of the Act [Indian GAAP]. An explanation of how the transition from previous GAAP to Ind AS has affected the
Group’s financial position, financial performance and cash flows is set out in the following notes.

Exemptions and exceptions availed:

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from Indian GAAP
to Ind AS.

A Deemed cost:

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as
recognised in the financial statements as at the date of transition to Ind AS, measured as per the Indian GAAP and use that as its
deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can
also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Group has elected to measure all of its
property, plant and equipment and intangible assets at their Indian GAAP carrying values.

b Leases:

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind
AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to
make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is
expected to be not material. The Group has elected to apply this exemption for such contracts / arrangements to be not material.
The Group has elected to apply this exemption for such contracts / arrangements.

C Designation of previously recognised financial instruments:

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at
the date of transition to Ind AS. The Group has elected to apply this exemption for its investment in equity investments [other than
investment in subsidiary].

D Estimates:

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for
the same date in accordance with Indian GAAP [after adjustments to reflect any difference in accounting policies], unless there is
objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with Indian GAAP. The
Group made estimates in accordance with Ind AS at the date of transition as these were not required under Indian GAAP.

E Classification and measurement of financial assets:

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances
that exist at the date of transition to Ind AS.

Annual Report 2016-17 | 181

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 43 - firSt time AdOPtiON Of iNd AS: (contd.)

F De-recognisition of financial assets and liabilities:

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions
occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition
requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind
AS 109 to financial assets or financial liabilities derecognised as a result of past transactions was obtained at the time of initially
accounting for those transactions. The Group has elected to apply the de-recognition provision of Ind AS 109 prospectively from
the date of transition to Ind AS.

Note: 44 - recONciliAtiON with iNdiAN GAAP [iGAAP]: INR-Lakhs

As at As at
March 31, 2016 April 1, 2015
A Reconciliation of equity:
1 Equity as per IGAAP 43,809 36,697
2 Add [Less]: Adjustments:
a Fair Valuation adjustments for financial assets 1 142 0
b Proposed Dividend including Corporate Dividend Tax 2 0 2,821
c Other adjustments (0.69) (0.56)
d Total 141 2,820
3 Equity as per Ind AS 43,950 39,517
b Reconciliation of Net Profit for the year ended March 31, 2016:
1 Net profit as per IGAAP 10,169 10,895
2 Add [Less]: Adjustments in statement of profit and loss
a Fair Valuation adjustments for financial assets 1 142 0
b Actuarial loss on employee defined benefit plan recognised in 3 16 (17)
OCI
c Other adjustments (0.13) 0
d Total 157 (17)
3 Net profit before OCI as per Ind AS 10,326 10,878
4 Add [Less]: Adjustments in OCI
Actuarial loss on defined benefit plan transferred from statement 3 (16) 17
of profit and loss
5 Total Comprehensive Income as per Ind AS 10,310 10,895

1 Fair Valuation adjustments for financial assets and Fair valuation of investments in Mutual Funds

Under IGAAP, security deposit given to landloard for operating lease are shown at transaction price. Under Ind AS, such transactions
are discounted to their present value using incremental borrowing rate applicable to the borrower entity. The difference between
the carrying value of the security deposit and its present value is accounted as deffered rental expenditure grouped under loans
& advances. The unwinding of discount from the date of security deposit to the transition date is shown as rental expense and
recognised in “Retained earnings”. Under previous GAAP, investment in mutual funds, being current investments, were accounted
at the lower of cost or fair value. Under Ind AS, mutual funds are not equity instruments and the cash flows do not represent solely
payments for principal and interest and hence are to be accounted at fair value through profit and loss.

182 | Zydus Wellness Limited

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 44 - recONciliAtiON with iNdiAN GAAP [iGAAP]: (contd.)

2 Proposed Dividend including Corporate Dividend Tax:

Under previous GAAP, dividend on equity shares recommended by the Board of Directors after end of the reporting period but
before the date of approval of financial statements was considered as an adjusting event and consequently, provision for proposed
dividend was recognised as a liability in the financial statements in the reporting period relating to which dividend was proposed.
Under Ind AS, such dividend is recognised in the reporting period in which the same is approved by the members in a general
meeting. Consequently, the impact of INR 2,821 Lakhs has been recognised in retained earnings at the transition date.

3 Actuarial loss on defined benefit plan:

Under previous GAAP, remeasurement of defined benefit plans (gratuity), arising primarily due to change in actuarial assumptions
was recognised as employee benefits expense in the Statement of Profit and Loss.Under Ind AS, such remeasurement (excluding
the net interest expenses on the net defined benefit liability) of defined benefit plans is recognised in OCI. Consequently, the
related tax effect of the same is also recognised in OCI. For the year ended March 31, 2016, remeasurement of gratuity liability
resulted in a actuarial loss of INR 16 Lakhs which has now been reduced from employee benefits expense in the Statement of Profit
and Loss and recognised separately in OCI. The above changes do not affect Equity as at date of transition to Ind AS and as at March
31, 2016.

Others:

Sale of goods:

Under The IGAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods
is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of
expenses.

Other comprehensive income:

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a
standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the
statement of profit and loss as other comprehensive income’ include remeasurements of defined benefit plans and fair value gains
or (losses) on FVOCI equity instruments and corresponding tax impact thereon. The concept of other comprehensive income did
not exist under previous GAAP.

Statement of cash flows:

The transition from IGAAP to Ind AS has not had a material impact on the statement of cash flows.

Annual Report 2016-17 | 183

Consolidated notes to the Financial Statements for the year ended March 31, 2017
Note: 45 - GrOuP iNfOrmAtiON:

Consolidated Financial Statements as at March 31, 2017 comprise the Financial Statements [FS] of Zydus Wellness Limited and its‘
partnership firm, which are as under:

Name Principal Country of Status of FS as at % of Share of Interest

activities incorporation/ March 31, 2017
Registration
March 31, 2017 March 31, 2016 April 1, 2015
Zydus Wellness Sikkim Consumer India Audited 98.00 98.00 98.00
- Partnership Firm Health and
Wellness

As per our report of even date

For Dhirubhai Shah & Doshi For and on behalf of the Board
Chartered Accountants
Firm Registration Number: 102511W

Kaushik D. Shah Dr. Sharvil P. Patel

Partner Chairman
Membership Number: 016502

Place: Ahmedabad Amit b. Jain Dhaval N. Soni Tarun G. Arora

Dated: May 27, 2017 Chief Financial Officer Company Secretary Whole Time Director

184 | Zydus Wellness Limited

 ZYDUS WELLNESS LIMITED AttendAnce Slip
[CIN:L15201GJ1994PLC023490]
Registered Office: House No. 6 & 7, Sigma Commerce Zone,
Nr. Iscon Temple, Sarkhej–Gandhinagar Highway, Ahmedabad–380 015
Email: [email protected] Website: www.zyduswellness.in
Phone: +91 79 6777 5888, Fax +91 79 6777 5811

tWentY tHiRd AnnUAl GeneRAl MeetinG

2017
I/We hereby record my/our presence at the twenty third Annual General Meeting of the Company at J B Auditorium, Ahmedabad Management Association,
Dr. Vikram Sarabhai Marg, Ahmedabad – 380 015 on Friday, August 11, 2017 at 12.00 Noon.

Member’s Folio / DPID-Client ID No. Member’s/Proxy’s Signature Member’s/Proxy’s Signature

Note:
1. Please complete the Folio / DP ID-Client ID No. and name, sign this Attendance Slip and hand it over at the Attendance Verification Counter at the ENTRANCE
OF THE MEETING HALL.
2. Electronic copy of the Annual Report for the financial year 2016–2017 and Notice of the Annual General Meeting (AGM) along with Attendance Slip
and Proxy Form are being sent to all the members whose email address is registered with the Company/Depository Participant unless any member has
requested for a hard copy of the same. Members receiving electronic copy and attending the AGM can print copy of this Attendance Slip.
3. Physical copy of the Annual Report for the Financial Year 2016–2017 and Notice of the AGM along with Attendance Slip and Proxy Form is sent in the
permitted mode(s) to all members whose email address is not registered or who have requested for a hard copy.

ZYDUS WELLNESS LIMITED FoRM no. MGt-11

[CIN:L15201GJ1994PLC023490] PROxY FORM
Registered Office: House No. 6 & 7, Sigma Commerce Zone, [Pursuant to section 105(6) of the Companies Act, 2013 and
Nr. Iscon Temple, Sarkhej–Gandhinagar Highway, Ahmedabad–380 015 Rule 19(3) of the Companies (Management and
Email: [email protected] Website: www.zyduswellness.in Administration) Rules, 2014]
Phone: +91 79 6777 5888, Fax +91 79 6777 5811

Name of the Member(s):

Registered Address:

Email-Id:

Folio No./Client ID: DP ID:

I/We being the member(s) holding ……………….. shares of the above named Company hereby appoint:

1. Name: …………………………………………………… Address:………………………………………………………………………………………....

E-mail Id: ……………………………………………........... Signature………………………………..................................................……………, or failing him/her;

2. Name: …………………………………………………… Address:………………………………………………………………………………………....

E-mail Id: ……………………………………………........... Signature………………………………..................................................……………, or failing him/her;

3. Name: …………………………………………………… Address:………………………………………………………………………………………....

E-mail Id: ……………………………………………........... Signature………………………………..................................................…………………, or failing him;

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the twenty third Annual General Meeting of the Company, to be

held on Friday, August 11, 2017 at J B Auditorium, Ahmedabad Management Association, Dr. Vikram Sarabhai Marg, Ahmedabad–380 015 and at any

adjournment thereof in respect of such resolutions as are indicated below:

 RoUte MAp oF tHe AGM venUe

Resolution Particulars of Resolution Optional

No. Ordinary Business For Against
1 To adopt the Financial Statements [including consolidated Financial Statements] for the year ended on March 31, 2017.
2 To confirm the interim dividend declared and paid as final dividend.
3 To reappoint Dr. Sharvil P. Patel, Director retiring by rotation.
4 To ratify appointment of Statutory Auditors and fix their remuneration.
Special Business
5 To ratify remuneration to Cost Auditors.
6 To regularize the appointment of Mr. Kulin Lalbhai as an Independent Director
7 To maintain and keep the statutory registers at a place other than the registered office of the company

Signed this…………………………… day of……………… 2017

Affix
Revenue
Signature of member :................................................................. Stamp not
Less than
` 0.15

Signature of Proxy holder(s) ...................................................................

Notes:
1. This form of proxy in order to be effective, should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement
of the Meeting.
2. For the Resolutions, Explanatory Statement and Notes, please refer to the Notice of the Twenty Third Annual General Meeting.
3. It is optional to put a ‘X’ in the appropriate column against the Resolutions indicated in the Box. If you leave the ‘For’ or ‘Against’ column blank against any or all Resolutions, your
Proxy will be entitled to vote in the manner as he/she thinks appropriate.
4. Please complete all details including details of member(s) in above box before submission.
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Snapshots from our brand campaigns
Zydus Wellness Ltd. House No. 6 & 7, Sigma Commerce Zone, Nr. Iscon Temple, S.G. Highway, Ahmedabad 380 015. India.
Phone : +91-79-67775888 (20 Lines), www.zyduswellness.in
CIN : L15201GJ1994PLC023490