Ar 122003

FULFORD(INDIA)LIMITED
Board of Directors
MR. R. A. SHAH, Chairman (Alternate to Mr. A. M. Blanco)
MR. R. D. THAPAR
MR. D. C. SHROFF (Alternate to Mr. R. A. Kapur)
MR. A. M. BLANCO
MR. A. E. SURIJON
MR. V. G. ATHAVALE
MR. R. A. KAPUR, Vice Chairman
MR. K. D. SHAH, President & Managing Director
MR. K. J. KAUL, (Alternate to Mr. A. E. Surijon and Whole-time Director)
DR. S. H. ADVANI (Alternate to Mr. R. D. Thapar)
COMPANY SECRETARY
MRS. USHA RAMDOSS
FUNCTIONAL HEADS
MR. S. BASU, Vice President — Human Resources
MR. K. J. KAUL, Vice President — Technical
DR. NITIN MULGAONKAR, Director — Medical & Regulatory Affairs
MR. M. K. RAJAN, Vice President — Marketing & Sales
MR. R. K. RUSTAGI, Vice President — Corporate Affairs
MR. A. V. SAPRE, Vice President — Finance
MR. K. VENKATRAMAN, Vice President — Commercial
REGISTERED OFFICE
EUREKA TOWERS, 8TH FLOOR,
MINDSPACE, LINK ROAD,
MALAD (W), MUMBAI - 400 064
REGIONAL OFFICE*/C&F AGENTS

Ahmedabad, Ambala, Kolkatta, Chennai, Cuttack, Delhi*, Dehradun,
Guwahati, Hubli, Hyderabad, Indore, Jaipur, Lucknow, Ludhiana, Patna,
Raipur, Ranchi, Trivandrum, Vijayawada.
BANKERS
STATE BANK OF INDIA
CANARA BANK
LEGAL ADVISORS
CRAWFORD BAYLEY & CO.
AUDITORS
DELOITTE HASKINS & SELLS
REGISTRARS AND SHARE TRANSFER AGENTS

INTIME SPECTRUM REGISTRY LTD.
C/13, Panalal Silk Mills Compound,
LBS Marg, Bhandup (West)
Mumbai - 400 078
REQUESTS TO MEMBERS
All correspondence regarding transfer and demat of shares may be addressed to our Registrars and
Share Transfer Agents.
Members are requested to bring their copy of the Annual Report to the Meeting.
Members requiring any information about the accounts are requested to write to the Company at
least one week before the date of the meeting so that the information may be made available at
the meeting.
1
Notice
NOTICE is hereby given that the Fifty-Sixth Annual General Meeting of FULFORD (INDIA) LIMITED will be held at
M.C. Ghia Hall, Bhogilal Hargovindas Building, 2 nd Floor, 18/20, Kaikhushru Dubash Marg, Mumbai 400 001 on
Tuesday, April 20, 2004 at 11.00 a.m. to transact the following business:
ORDINARY BUSINESS
1. To consider and, if thought fit, to pass with or without modification, as a Special Resolution, the following:
“RESOLVED THAT the Balance Sheet as at December 31, 2003 and the Profit & Loss Account for the year
ended on that date together with the Directors’ and the Auditors’ Report thereon be and are hereby approved
and adopted”.
2. To appoint Directors in place of Messrs. R.D. Thapar, R. Kapur and V.G. Athavale who retire under Article 110
and being eligible offer themselves for re-appointment.
3. To consider, and if thought fit, to pass with or without modification, as a Special Resolution the following:
“RESOLVED THAT pursuant to the recommendations of the Board of Directors, a dividend at the rate of 20%
on the equity share capital of the Company for the year ended December 31, 2003 be and is hereby declared
out of the profits for that year, payable to those members whose names appear on the Company’s Register of
Members as on the 20th day of April, 2004.
”RESOLVED THAT Messrs Deloitte Haskins & Sells, Chartered Accountants, the retiring Auditors of the Company,
be and are hereby re-appointed as Auditors of the Company for the financial year ending December 31, 2004
and they shall hold office from the conclusion of this meeting until the conclusion of the next Annual General
Meeting of the Company at a remuneration to be fixed by the Board of Directors of the Company”.
SPECIAL BUSINESS
“RESOLVED THAT Mr. Alberto Surijon, who was appointed as Director of the Company (with effect from
September 1, 2001) by the Board of Directors at their meeting held on July 24, 2001 to fill in the casual vacancy
caused by the resignation of Mr. I.L. Price, be and is hereby appointed as a Director of the Company.”
“RESOLVED THAT in partial modification of the resolution passed by the Shareholders at their Annual General
Meeting held on June 21, 2002 subject to such sanctions and approvals as may be required, the consent of the
Company be and is hereby accorded to ratify, confirm and approve the remuneration paid amounting to Rs.
91,47,707/- (including the contributions towards Provident Fund, Gratuity and Superannuation Fund) to Mr.
K.D. Shah, President & Managing Director of the Company, for the period from January 1, 2003 to December
31, 2003”.
“RESOLVED THAT pursuant to the provisions of Section 163 of the Companies Act, 1956 (the Act), consent of
the Company be and is hereby granted to the Board of Directors of the Company to keep the Register of
Members, Index of Members and copies of all Annual Returns prepared under Section 159 of the said Act
together with copies of the Certificates and documents required to be annexed thereto under Section 161 of the
said Act, or any one or more of them (the documents) at the office of Intime Spectrum Registry Limited, the
Registrars and Share Transfer Agents of the Company situate at C/13, Panalal Silk Mills Compound, LBS Marg,
Bhandup (West), Mumbai 400 078 instead of their erstwhile office situated at 260, Shanti Industrial Estate,
Sarojini Naidu Road, Mulund (West), Mumbai 400 080.”
By Order of the Board of Directors
USHA RAMDOSS
Mumbai, March 5, 2004 Company Secretary
Registered Office:
8th floor, Eureka Towers,
Mindspace, Link Road,
Malad (West), Mumbai - 400 064.
2
Notice (Contd.)
NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT ONE
OR MORE PROXIES TO ATTEND AND VOTE ON A POLL ONLY INSTEAD OF HIMSELF AND SUCH
PROXY NEED NOT BE A MEMBER OF THE COMPANY.
2. The Explanatory Statement pursuant to Section 173 (2) of the Companies Act, 1956 in respect of
Special Business is annexed hereto.
3. The Register of Members and Share Transfer Books of the Company will remain closed from April 13,
2004 to April 20, 2004 (both days inclusive).
4. Members are requested to notify any change in their address immediately to the Company or to its
Registrars and Share Transfer Agents.
5. Members holding shares in demat mode may please note that, the bank details as furnished by the
respective Depositories to the Company will be mandatorily printed on their dividend warrants for the
purpose of distribution of dividend through Electronic Clearing Service (ECS) as advised by the
Securities & Exchange Board of India (SEBI). In the absence of ECS facility, the bank account details,
if available, will be printed on the dividend warrants. Instructions if any, given by them in respect of
shares held in physical mode will not be automatically applicable to the dividend paid on shares held
in demat mode. Members holding in demat mode must, therefore, give instructions regarding bank
accounts in which they wish to receive dividend, to their Depository Participants. The Company or the
Registrar and Share Transfer Agents will not act on any direct request from these Members for
change/deletion in such bank details.
6. In terms of Sections 205A and 205C of the Companies Act, 1956, the amount of dividend remaining
unpaid or unclaimed for a period of seven years from the date of transfer to the unpaid dividend
account, is required to be transferred to the Investor Education and Protection Fund. Members shall
not be able to claim any unpaid dividend from the said Fund or the Company thereafter. Members who
have not encashed the dividend warrants for the years 1997, 1998 and 2001 are requested to contact
the Registrar and Transfer Agents, Intime Spectrum Registry Ltd. Mumbai. Outstanding dividend for
the years prior to1995 have been transferred to the General Revenue Account of the Central
Government. Outstanding dividend for the year 1995 has been transferred to the Investor Education
and Protection Fund. Outstanding dividend for the year 1996 shall be transferred to the Investor
Education and Protection Fund in May 2004.
PROFILE OF DIRECTORS BEING APPOINTED/ RE-APPOINTED

INFORMATION REQUIRED TO BE FURNISHED UNDER THE LISTING AGREEMENT
As required under Clause 49 of the Listing Agreement, the particulars of Directors who are proposed to be appointed/
re-appointed is given below:
1. Mr. Alberto Surijon
Age: 50 years
Qualification: Bachelor in Marketing and Master in Business Administration
Experience:
Mr. Surijon joined Schering-Plough in 1992 as Managing Director for Argentina operations. Since then he has been
Vice President and Managing Director for Schering-Plough’s operations in Spain, Italy and heading the Regional
Operations for Far East & Australasia since September 2001.
Prior to joining Schering-Plough, he held various senior positions in Glaxo, Boehringer Ingelheim and Syncro Argentina,
S.A. (a subsidiary of Roemmers).
Mr. Surijon has vast experience in pharmaceutical industry based on his various senior management positions held
previously.
Names of Companies in which he holds directorships and committee memberships:
Sr Names Nature of Interest
1. Fulford (India) Limited, Director and member of Audit
Committee and Remuneration
Committee
2. PT Schering-Plough Indonesia Tbk, Indonesia President Commissioner
3. Plough Consumer Products (Asia) Limited, Hongkong Director
4. Essex Asia Limited, Hongkong Director
3
Notice (Contd.)
5. Schering-Plough (China) Limited, Bermuda Director & Vice President

6. SOL Limited, Bermuda Director
7. Schering-Plough (Pty) Limited, South Africa Director
8. Schering-Plough Korea Director
9. Schering-Plough Animal Health Korea Director
10. Schering-Plough Limited, Taiwan Director
11. Schering-Plough Limited, Thailand Director
12. Schering-Plough Pty Limited, Australia Director
13. Shanghai Schering-Plough Pharmaceutical Company Limited, China Vice Chairman
14. Schering-Plough Corporation, Philippines Director
15. Essex Pharmaceutical, Inc. Philippines Director
16. Plough Consumer Products (Philippines) Inc. Director
17. Schering-Plough Sdn Bhd, Malaysia Director
2. Mr. R.D. Thapar
Age: 83 years
Qualification: B.A. in English Honours and M.A.in History
Experience:
Mr. Thapar was in the Civil Service and has worked in various capacities in Ministries of Finance, Commerce, Textiles
etc. He eventually retired in the capacity of Commerce Secretary in the Central Government. During his tenure, he
continuously held positions of growth in responsibility and stature. Presently, he is on the Board of the Company and
is a member of the Remuneration Committee.
3. Mr. R. Kapur
Age: 58 yrs
Qualification: B.A. Degree in Economics from Columbia College, New York
M.B.A. Degree in Finance and International Business from Columbia University, New York
Experience:
Mr. Raman Kapur is President, Worldwide Generics for Schering-Plough Corporation, a research-based company
engaged in the discovery, development, manufacturing and marketing of pharmaceutical and healthcare products
worldwide. He is also President of Warrick Pharmaceuticals, a significant marketer of generic products in the U.S.
market. Overall, he has over 28 years of experience in the global pharmaceutical industry including both the United
States as well as various international markets.
Names of Companies in which he holds directorships and committee memberships:
Sr Names Nature of Interest
1. Fulford (India) Limited Director
2. European Generic Association Board of Directors
3. Warrick Pharmaceuticals President
4. Kenilworth Pharmaceuticals President
5. New Jersey Institute of Technology Board of Overseers
6. Princeton Day School Board of Trustees
7. Center for Advanced Study of India, University of Pennsylvania International Supervisory Board
8. World India Diabetes Federation Board of Trustees
9. Edison College Foundation Board of Trustees
4. Mr. V.G.Athavale
Age: 68 years
Qualification: Mr. V.G. Athavale is a post graduate in Commerce
Experience:
Mr. Athavale was in the service of the Reserve Bank of India (RBI) and he retired in the capacity of Chief General
Manager. During his tenure with RBI, he continuously held positions of responsibility and stature including a deputation
in 1974 for a period of 1½ years with Unit Trust of India – a Government Finance Institution. Presently, he is on the
board of the Company and is the Chairman of the Audit Committee, Shareholders & Investors’ Grievance Committee
and Remuneration Committee.
All the above Directors have given a declaration in Form DDA pursuant to the Companies (Disqualification of
Directors under Section 274(1)(g) of the Companies Act, 1956) Rules, 2003, to the effect that they are not disqualified
under the said Section 274(1)(g) to act as directors of the Company.
4
Annexure to Notice
Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956.
Item No. 5
At a meeting of the Board of Directors of the Company, held on July 24, 2001, Mr. Alberto Surijon was appointed as
Director of the Company with effect from September 1, 2001 to fill in the casual vacancy caused by the resignation of
Mr. I.L. Price. The Company has received a notice from a Member under Section 257 of the Companies Act, 1956
signifying his intention to propose Mr. Alberto Surijon as a candidate for the office of Director.
The Board recommends the Resolution at Item No. 5 of the annexed Notice for approval of the members.
Mr. Alberto Surijon may be deemed to be concerned or interested in this resolution as it concerns him.
No other Director is concerned or interested in the said Resolution.
Item No. 6
The shareholders will recall the resolutions passed at the Annual General Meeting of the Company held on June 21,
2002 approving the appointment and terms of remuneration payable to Mr. K.D. Shah, President & Managing Director
of the Company. The resolutions also approved that the remuneration be paid and perquisites be provided to Mr. K.D.
Shah, as specified, in the said resolutions, notwithstanding that the Company may incur a loss or earn inadequate
profit. The resolutions also stipulated that such remuneration and perquisites may exceed the limits prescribed in
Section II of Part II of Schedule XIII subject however to the approval of the Department of Company Affairs,
Government of India.
The Company has earned inadequate profits for the year 2003, to provide for managerial remuneration in respect of
Mr. K.D. Shah. The Company has made an application to the Department of Company Affairs for the following
remuneration paid to Mr. K.D. Shah and the perquisites provided to him including the contribution towards Provident
Fund, Gratuity & Superannuation Fund, notwithstanding that they exceed the limits prescribed in Section II of Part II
of Schedule XIII.
Salary (Net) 56,14,992
Allowances & Perks 35,32,715
TOTAL 91,47,707
The approval of the Department of Company Affairs for the aforesaid remuneration is pending.
Item No. 7
M/s Intime Spectrum Registry Limited has shifted its office from 260, Shanti Industrial Estate , Sarojini Naidu Road,
Mulund (West), Mumbai 400 080 to C/13, Panalal Silk Mills Compound, LBS Marg, Bhandup (West), Mumbai 400
078. The approval of the shareholders is being sought pursuant to the provisions of Section 163 of the Companies
Act, 1956 for keeping the Register of Members, Index of Members and copies of all Annual Returns prepared by the
Company under Section 159 together with the copies of certificates and documents required to be annexed thereto
under Section 160 and Section 161, at the new address.
By Order of the Board of Directors
USHA RAMDOSS
Mumbai, March 5, 2004 Company Secretary
Registered Office:
8th floor, Eureka Towers,
Malad (West),
Mumbai - 400 064.
5
Directors’ Report
The Directors present the Fifty-sixth Annual Report together with the audited accounts of the Company for the year
ended December 31, 2003.
FINANCIAL RESULTS
January 1, January 1,
2003 to 2002 to
December 31, December 31,
2003 2002
Rupees Rupees
Profit/(Loss) before tax for the period amounted to ........ 5,91,94,385 (7,59,61,840)
Profit/(Loss) after tax for the period amounted to ........... 5,93,56,269 (7,60,61,840)
Tax Adjustments for prior years ........................................ 21,10,148 —
Balance in Profit and Loss Account (b/f) ......................... (6,26,52,007) 1,34,09,833
Adjusted against General Reserve .................................. (6,26,52,007) — —
Amount available for appropriation .................................. 6,14,66,417 (6,26,52,007)

Out of which the following sums have been appropriated:
Proposed Dividend ............................................................ 64,00,000 —
Corporate Tax on Dividend ............................................... 8,20,000 —
General Reserve ............................................................... 47,00,000 —
Balance carried to Balance Sheet .................................... 4,95,46,417 (6,26,52,007)
DIVIDEND
The Directors recommend a Dividend of 20% for the year ended December 31, 2003.
MANAGEMENT DISCUSSION AND ANALYSIS
1. Industry structure and development
The Indian pharmaceutical market recorded a single digit growth (8.39% - IMS). The market size of Rs. 196
billion does not reflect the true picture since the market is driven by high volume, low unit price and prevalence
of spurious or counterfeit drugs that remain unaccounted. Rigours of price controls, several players, multiple
therapeutic options and branded generics as well as generics continues to push down the prices. In the last few
years, there is an urgency to launch branded generics to take advantage before the Patent Regime commences
from January 2005. With regard to GMP (Good Manufacturing Practices), the requirements are increasing to
upgrade the standard and eventually the quality of the product. While this is a welcome change from patient point
of view, it still requires substantial investment at the ground level. Low prices, high manufacturing expenses,
upgraded packaging to maintain quality and protection against counterfeit, result in low margin.
The potential of Indian pharmaceutical market is still untapped to a greater extent considering the size of
population (about 17% of world population) and current per capita spending on medicines ($3). The growth of
GDP, introduction of patent regime, opening of Insurance sector and dismantling of price control which has lost
its relevance in current era of market driven economy will definitely result in introduction of new molecules,
competitive prices and increase in the affordability level. This ultimately will help the patient to get the best quality
medicine at reasonable prices.
The Industry continues to play a very dominant role in improving the health of the nation. Discovery of new
molecules, conducting clinical trials for new inventions, medical education programs, opening of hospitals and
diagnostic centers, development of ancillary services will help the development of the Industry and eventually will
make Indian Pharmaceutical market as one of the fastest emerging market on the world map.
6
Directors’ Report (Contd.)
2. Opportunities, Threats, Risks and Concerns
The Government continues to focus on Health sector which is a positive sign for the industry as a whole as well
as for the Company.
Once the Patent law is amended to incorporate recognition to product patent, the Company would have an edge
over the generics, which continue to flood the market today. Till then, the adverse impact of generics is practically
unavoidable. Delays in grant of Exclusive Marketing Rights during the interim period denies protection to the
original research products.
Today, the Indian pharmaceutical market is highly regulated by the Government with the presence of Drugs
(Prices Control) Order (DPCO) 1995. This no doubt affects the Company as well. The claims under the Drugs
Prices Equalisation Account and the comment of the Auditors on the same is set out in note 4(vii) of the Auditors’
Report. This matter, once resolved would provide clear guidance for future cash flows.
Inflexible employment laws and high separation costs do not permit free adaptability and restructuring of operations
when circumstances warrant.
3. Internal control system and their adequacy
The Company has comprehensive internal control system that includes policies in different areas and suitable
monitoring procedures. The commitment of company funds is regulated by Approval Authorisation policy to
ensure use of funds in the best possible manner. The Internal Audit Program conducted by an external agency
and supplemented by self-assessment audit guide, covers various areas to assess and ensure conformity to
Accounting Standards, prevailing laws and Company policies. The Audit Committee appointed by the Board
reviews the adequacy and addresses the significant findings and follow-ups on such issues.
4. Material development on human resources/ industrial relations
One of the priority areas for the Company is to nurture, motivate and retain talent. This is achieved through
several measures by rewarding and recognising high calibre performance, on the job training, giving special
projects or assignments to high performers.
The Company has regular communication meetings with employees to enhance employee participation, creativity
and to thrash out blocks or barriers to business growth.
The Company has developed succession plan for potential managers and has put in place an action plan for the
development of these managers to take higher responsibilities in future. The Company continues to put thrust on
productivity improvement through effective utilization of its manpower. The total number of employees as on
December 31, 2003 was 463.
OPERATIONS
PERFORMANCE WITH RESPECT TO OPERATIONS
The Company has turned around its operations during 2003. Gross Sales for the year 2003 increased to Rs. 130.50
crores from Rs. 94.70 crores in 2002 registering a growth of 37.8%. Profit Before Tax for the year 2003 was Rs. 5.92
crores as against Loss for the year 2002 of Rs. 7.60 crores.
Despite intense competition and replacement of our brands by the competitive products during the time our brands
were not available, our sales force did a commendable job in re-establishing our brands rapidly and successfully once
the supply resumed.
All the new products in Oncology, Virology and Cardiovascular segment progressed very well and recorded handsome
growth.
The resumption of supply of the products, various initiatives taken in 2003 towards cost containment and import
substitution contributed to the profitable sales growth.
The Auditors’ comments as referred to in para 4(vi) and (vii) of the Auditor’s Report are dealt with in Note No. B10 and
Note No. B1(e) annexed to the Accounts, which are self-explanatory.
7
OUTLOOK
During 2004, the primary focus is to resume supply of tablets which is expected to commence in the first half. While
this would be the main growth driver, new products in Oncology, Virology and Cardiovascular segment would face
competition from branded generics. To improve profitability and financial position, various cost containment and
productivity improvement measures will be implemented rigorously.
DIRECTORS
Under Article 110 of the Articles of Association of the Company, the following Directors will retire at the forthcoming
Annual General Meeting and being eligible offer themselves for re-appointment :
Mr. R D Thapar, Mr. Raman Kapur and Mr. V.G. Athavale.
Mr. Alberto Surijon was appointed as Director with effect from September 1, 2001 to fill in the casual vacancy caused
by the resignation of Mr. I. L. Price. The Company has received Notice under Section 257 of the Companies Act, 1956
from a member proposing appointment of Mr. Alberto Surijon as Director of the Company.
FIXED DEPOSITS
Fixed Deposits outstanding as on December 31, 2003 amounting to Rs.0.35 lakhs have matured but remain unpaid
for want of requisite instructions from the Depositors concerned.
RELATED PARTY TRANSACTIONS
Related party transactions have been disclosed in the notes to the accounts.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956 (the Act)
Information required to be annexed to this report in accordance with clause (e) of sub-section (1) of Section 217 of the
Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given as
Annexure 1.
Information in accordance with sub-section (2A) of Section 217 of the Act read with the Companies (Particulars of
Employees) Rules, 1975 forms part of the Directors’ Report for the year ended December 31, 2003. However, as per
the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Directors’ Report and Accounts are being sent
to all shareholders of the Company, excluding the statement of particulars of employees under Section 217 (2A) of the
Act. Any shareholder interested in obtaining a copy of the Statement may write to the Secretary at the Registered
office of the Company.
In accordance with sub-section (2AA) of Section 217 of the Companies (Amendment) Act, 2000 concerning ‘Directors
Responsibility Statement’ and to the best of their knowledge and belief and according to the information and
explanation obtained by them, your Directors confirm that:
i) in the preparation of Annual accounts, the applicable accounting standards have been followed along with proper
explanation relating to material departures;
ii) they have selected such accounting policies and applied them consistently and made judgements and estimates
that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit of the Company for that period;
iii) they have exercised proper and sufficient care for the maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud
and other irregularities; and
iv) the annual accounts are prepared on a going concern basis.
AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants, retire as Auditors of the Company at the conclusion of the
ensuing Annual General Meeting and according to a Certificate received from them under Section 224(1B) of the
Companies Act, 1956, they are eligible for reappointment.
8
CORPORATE GOVERNANCE
A report on the Corporate Governance Code along with a certificate from the auditors of the Company regarding
compliance of the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement is
annexed to this Report.
SUBSIDIARY COMPANIES
Wellnex Pharmaceuticals Private Limited, currently a subsidiary of the Company, was incorporated in 1989. The
Company at that point of time had its own manufacturing operations and was receiving the Quality Control services
from Wellnex Pharmaceuticals Private Limited. Now, the Company has completely outsourced production to third
parties under loan licence and consequently, Quality Control is also undertaken by these third parties. The other
Quality Control jobs are now undertaken by Fulford’s Quality Control Laboratory. In view of the same, the services of
Wellnex Pharmaceuticals Private Limited becoming quite redundant, the Board of Directors of the Company have
decided to amalgamate Wellnex Pharmaceuticals Private Limited with the Company. The scheme of amalgamation
has been filed with The Stock Exchange, Mumbai for its approval.
Pursuant to Section 212 of the Companies Act, 1956 the annual accounts for the year ended December 31, 2003 as
also the Auditors’ and Directors’ Report in respect of (i) Schering-Plough (India) Private Limited, and (ii) Wellnex
Pharmaceuticals Private Limited, are attached to the accounts of the Company.
As per Clause 32 of the listing agreement with the Mumbai Stock Exchange the Consolidated financial statements of
the subsidiaries are also enclosed.
ACKNOWLEDGEMENT
The Directors wish to place on record their appreciation of the contribution made by the employees at all levels for
their dedication and commitment to the Company throughout the year. The Directors would also like to record their
thanks to Schering-Plough Corporation, the Company’s shareholders, bankers, medical professionals, hospitals,
vendors and all customers for their valuable support and co-operation.
For and on behalf of the Board of Directors
R.A. SHAH
Mumbai, March 5, 2004. CHAIRMAN
9
Annexure I to the Directors’ Report
Information pursuant to the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
1. Conservation of Energy
(I) Energy conservation measures taken in the recent past:
Nil
(II) Additional investments and proposals for reduction of energy consumption being implemented:
Nil
(III) Impact of measures (I) above for reduction of energy consumption and consequent impact on the cost of
production of goods:
Nil.
(IV) Total energy consumption and energy consumption per unit of production:
A. Power and Fuel Consumption
Not Applicable
B. Consumption per unit of production
Not Applicable
2. Technology absorption
The Company through Technical know-how Arrangement with Schering-Plough Corporation, U.S.A. (Schering-
Plough) gets the benefits of the research and development efforts of Schering-Plough. Most of the products
introduced by the Company in India are original research products of Schering-Plough.
The Company has also benefitted from the supply of technology from Schering-Plough. This includes training of our
personnel by Schering-Plough during short and long-term assignments and deputation of technical experts. The
said technology has been fully absorbed.
3. Foreign Exchange Earnings and Outgo
(I) Activities relating to exports, initiatives taken to increase exports, development of new export markets for
products and services and export plans.
The Company continues to explore various export markets.

(II) Total Foreign exchange earned and used Rs. in lakhs
(A) Total Foreign exchange earned 13.66
(B) Total Foreign exchange used:
(i) On import of raw materials/finished goods 3152.76
(ii) On import of capital goods, spares and components —
(iii) Expenditure in foreign currencies for business

travels, subscription, commission on exports etc. 28.15
(iv) Remittance during the year in foreign currency on

account of dividend —
(v) Royalty and Technical know-how —

3180.91
R. A. SHAH
Mumbai, March 5, 2004. Chairman
10
SHAREHOLDER INFORMATION
AGM date, time and venue : April 20, 2004 at M.C. Ghia Hall
Bhogilal Hargovindas Building, 2nd Floor,
18/20, Kaikhushru Dubash Marg, Mumbai: 400 001
at 11.00 a.m.
Financial Calendar : January to December
First Quarter results : On or before April 30
Second Quarter results : On or before July 31
Third Quarter results : On or before October 31
Audited Results for the year end : On or before March 31 of the succeeding year
Date of Book Closure : April 13, 2004 to April 20, 2004 (both days inclusive)
Dividend Payment Date : On or after April 20, 2004
Listing on Stock Exchanges : The Company’s shares are listed and traded on The Stock Exchange, Mumbai.
The Company’s shares are traded in ‘B1’ Group in the Stock Exchange,
Mumbai.
Stock Code:
The Stock Exchange, Mumbai : 506803
Demat : INE 521A01017
MARKET PRICE DATA:

The monthly high and low quotations of shares traded on the Stock Exchange, Mumbai for the year 2003 is as under:
(Amounts in Rs.)
Mumbai Stock Exchange
Month High Low
January 98.00 85.00

February 86.45 75.50
March 85.00 51.00
April 69.00 55.00
May 106.65 67.30
June 131.50 96.00
July 190.00 117.00
August 268.00 162.05
September 299.90 206.00
October 356.45 275.00
November 400.00 324.00
December 432.00 351.10
16
SHAREHOLDER INFORMATION (Contd.)
STOCK PERFORMANCE INDEXED:
500 7000
450
6000
400
350 5000
300 4000
250
200 3000
150 2000
100
1000
50
0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Fulford BSE Index
REGISTRAR AND TRANSFER AGENTS:

Intime Spectrum Registry Ltd.
C-13, Pannalal Silk Mills Compound,
L.B.S. Marg, Bhandup (West),
Mumbai 400 078.
Tel – 5555 5454 .
SHARE TRANSFER SYSTEM:
All transfers received are processed and approved by the Share Transfer Committee, which considers transfers and
other related matters once in a fortnight.
DISTRIBUTION OF SHAREHOLDING AS ON DECEMBER 31, 2003.
Share holders Share Amount
No. of Shares Number % to Total In Rs. % to Total
Upto 5000 6334 93.86 73,81,740 23.07
5001 - 10000 235 3.48 18,42,160 5.76
10001 - 20000 90 1.33 13,80,220 4.31
20001 - 30000 28 0.42 7,36,690 2.30
30001 - 40000 14 0.21 5,03,440 1.57
40001 - 50000 14 0.21 6,64,390 2.08
50001 - 100000 15 0.22 11,39,280 3.56
100001 and above 18 0.27 183,52,080 57.35
Total 6748 100.00 320,00,000 100.00
DEMAT STATUS:
As on December 31, 2003:
Mode No. of Shares %
Demat 17,13,761 53.56
Physical 14,86,239 46.44
Total 32,00,000 100.00
17
SHAREHOLDER INFORMATION (Contd.)
SHAREHOLDING PROFILE AS ON DECEMBER 31, 2003:
Category No. of %
Shares
Foreign Affiliate 12,80,000 40.00
Banks & FI’s 800 0.03
Mutual Funds 3,69,385 11.55
NRIs 57,553 1.79
Private Corporate Bodies 2,24,986 7.03
Public (including Directors) 12,51,336 39.10
Clearing Members 15,940 0.50
Total 32,00,000 100.00
REGISTERED OFFICE:
Fulford (India) Ltd.
Eureka Towers, 8th Floor,
Mindspace, Malad Link Road,
Malad (West),
Mumbai 400 064.
On behalf of the Board of Directors
R.A. Shah
Mumbai, March 5, 2004 Chairman
To,
The Members of Fulford (India) Limited
We have examined the compliance of conditions of Corporate Governance by Fulford (India) Limited for the
year ended December 31, 2003, as stipulated in Clause 49 of the Listing Agreement of the said Company with
the Stock Exchange, Mumbai.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination
was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance
of the conditions of the Corporate Governance. 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, we certify that
the Company has complied in all material respects with the conditions of Corporate Governance as stipulated
in the above mentioned Listing Agreement, except that the requirements regarding the composition and
attendance for the remuneration committee of the company have not been strictly followed on the ground that
such requirements are not mandatory under clause 49 of the Listing Agreement.
As required by the guidance note issued by the Institute of Chartered Accountants of India, we have to state
that, based on the information received from the Company’s Registrar and Share Transfer Agents and as per
the records maintained by the Investor Grievance Committee, barring certain cases pending in courts/consumer
forums, relating to disputes over the title of shares in which the company has been made a party, no investor
grievance is pending for a period exceeding one month against the Company.
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 DELOITTE HASKINS & SELLS

Chartered Accountants
N. P. Sarda
Partner
Mumbai, March 8, 2004 Membership No. 9544
18
Auditors’ Report to the Members of Fulford (India) Limited
1. We have audited the attached balance sheet of Fulford (India) Limited, as at December 31, 2003, and
also the profit and loss account and the cash flow statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the company’s management. Our
responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Statement on Companies (Auditors’ Report) Order, 2003, issued by the Central
Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we
enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that:
(i) We have obtained all the information and explanations, which to the best of our knowledge and
belief were necessary for the purposes of our audit;
(ii) In our opinion, proper books of account as required by law have been kept by the company so far
as appears from our examination of those books;
(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are
in agreement with the books of account;
(iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by
this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from directors as on December 31, 2003 and
taken on record by the Board of Directors, we report that none of the directors is disqualified as
on December 31, 2003 from being appointed as a director in terms of clause (g) of sub-section
(1) of Section 274 of the Companies Act, 1956;
(vi) Out of the remuneration paid to the Managing Director as referred to in Note No. 10 of
Schedule 18 annexed to and forming part of the financial statements, an amount of
Rs. 28,84,635/- is subject to approval of the Central Government;
(vii) Demand of Rs. 194.62 lakhs for Drug Price Equalisation Account as referred to in Note no.
B.1.(e) of Schedule 18 is contested by the company in the High Court and hence no
provision has been made in the accounts. As per the Supreme Court’s directions the
company has deposited a sum of Rs. 50 lakhs pending the disposal of the matter by the
High Court and the same has been shown under “Loans and Advances — Deposits”.
(viii) In our opinion and to the best of our information and according to the explanations given to us,
the said accounts read together with the notes thereon and subject to our remarks in paragraphs
(vi) and (vii) above, give the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the accounting principles generally
accepted in India:
(a) in the case of the balance sheet, of the state of affairs of the company as at December 31,
2003;
(b) in the case of the profit and loss account, of the profit for the year ended on that date; and
(c) in the case of cash flow statement, of the cash flows for the year ended on that date.
For Deloitte Haskins & Sells

N. P. Sarda
Partner
19
Annexure to the Auditors’ Report
(Referred to in Paragraph 3 of our report of even date)
1. In our opinion and according to the information and explanations given to us, the nature of the
company’s business/activities during the year are such that clauses xiii, xiv, xviii, xix, xx are not
applicable to the company.
2. In respect of its fixed assets:
(a) The company has maintained proper records showing full particulars, including quantitative details
and situation of fixed assets.
(b) Verification of fixed assets is being conducted in a phased programme by the management
designed to cover all assets over a period of three years, which in our opinion is reasonable
having regard to the size of the company and the nature of assets. The discrepancies noticed on
such verification were not material and have been properly dealt with in the books of account.
(c) Although some of the fixed assets have been disposed off during the year, in our opnion and
according to the information and explanations given to us, the ability of the company to continue
as a going concern is not affected.
3. In respect of its inventories:
(a) As explained to us, the inventories were physically verified by the management at reasonable
intervals during the year.
(b) In our opinion and according to the information and explanations given to us, the procedures of
physical verification of inventories followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the company has
maintained proper records of its inventories and the discrepancies noticed on such physical
verification between physical stock and book records were not material and have been adequately
dealt with in the books of account.
4. In our opinion and according to the information and explanations given to us, the company has not
granted or taken any loan secured or unsecured to / from companies, firms or other parties covered in
the register maintained under section 301 of the Companies Act, 1956.
5. In our opinion and according to the information and explanations given to us, there are adequate
internal control procedures commensurate with the size of the company and nature of its business with
regard to purchases of inventory, fixed assets and for the sale of goods.
6. In respect of transactions entered in the register maintained in pursuance of section 301 of the
Companies Act, 1956:
(a) To the best of our knowledge and belief and according to the information and explanations given
to us, transactions that needed to be entered into the register have been so entered.
(b) According to the information and explanations given to us, where each of such transactions
(excluding those reported under paragraph 4 above) is in excess of Rs. 5 lakhs in respect of any
party, the transactions have been made at prices which are prima facie, reasonable having regard
to the prevailing market prices at the relevant time; except that in respect of purchase and sale of
services, no comparison of prices could be made as the company informed us that there are no
comparable market prices/alternate source of supply.
20
7. In our opinion and according to the information and explanations given to us the company has not
accepted any deposits within the meaning Section 58A and 58AA of the Companies Act, 1956 and the
rules framed there under.
8. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants
appointed by the management have been commensurate with the size of the company and nature of
its business.
9. We have broadly reviewed the books of account and records maintained by the company relating to
the manufacture of formulations, pursuant to the Order made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 and are of the
opinion that prima facie, the prescribed records have been maintained and the prescribed accounts are
in the process of being made up.
10. According to the information and explanations given to us in respect of statutory and other dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Provident
Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income tax, Sales
tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate
authorities during the year.
(b) Disputed sales tax, income-tax and excise duty aggregating to Rs. 69,74,551/-, Rs. 1,17,86,989/-
and Rs. 1,81,89,256/- respectively have not been deposited since the matters are pending with
the revelant Sales tax, Income-tax and Excise Appellate Authorities. There were no disputed
amounts in respect of customs duty and wealth tax during the year.
11. The company does not have any accumulated losses as at the end of the financial year. The company
has not incurred cash losses during the current and the immediately preceding financial year.
12. In our opinion and according to the information and explanation given to us, the company has not
defaulted in repayment of dues to banks. The company has not obtained any borrowings from any
financial institutions or by way of debentures.
13. Based on our examination of documents and records, we are of the opinion that the company has
maintained adequate records where the company has granted loans and advances to employees on
the basis of security by way of pledge of securities. The company has not granted loans and advances
on the basis of security by way of pledge of shares, debentures and other securities.
14. In our opinion and according to the information and explanations given to us, the terms and conditions
of the guarantees given by the company for loans taken by others from banks and financial institutions,
are not prima facie prejudicial to the interests of the company.
15. The company has not obtained any term loans during the year.
16. According to the cash flow statement and other records examined by us and the information and
explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not
been used during the year for long term investment and vice versa, other than temporary deployment
pending application.
17. To the best of our knowledge and belief and according to the information and explanation given to us,
no fraud on or by the company was noticed or reported during the year.

N. P. Sarda
Partner
21
Schedules to Balance Sheet
As at December 31, 2003 As at December 31, 2002
Rupees Rupees
1. CAPITAL
Authorised:
50,00,000 Equity Shares of Rs. 10/- each .. 5,00,00,000 5,00,00,000
Issued and Subscribed:

32,00,000 Equity Shares of Rs. 10/- each fully paid-up 3,20,00,000 3,20,00,000
Of the above shares, 29,10,000 Equity Shares are allotted

as fully paid-up by way of bonus shares by capitalisation
of general reserve.
2. RESERVES AND SURPLUS
General Reserve :
Balance as per last Balance Sheet .. 10,94,82,469 10,94,82,469
Less : Debit balance in Profit & Loss Account

adjusted 6,26,52,007 —
Add : Transfer from Profit & Loss Account .. 47,00,000 —

5,15,30,462 10,94,82,469
Less : Debit balance in Profit & Loss account as

per contra .. — 6,26,52,007
Balance as per Profit & Loss Account .. 4,95,46,417 —
Total .. 10,10,76,879 4,68,30,462
3. SECURED LOANS
From banks (secured by hypothecation of inventories, — 3,57,85,534
book debts and fixed assets)
4. UNSECURED LOANS
Security deposits from C & F agents .. 6,71,42,727 11,45,42,100
Other deposits .. 35,77,779 67,88,180
Total .. 7,07,20,506 12,13,30,280
25
26
5. FIXED ASSETS GROSS BLOCK NET BLOCK
ACCUMULATED DEPRECIATION
AT COST WRITTEN DOWN
VALUE
As at As at Upto Depreciation Adjustment Upto As at December 31,

Particulars Jan 1, Additions/ (Deductions)/ Dec 31, Jan 1, for the for Sale Dec 31,
2003 Transfer Transfer 2003 2003 year 2003 2003 2002
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
Buildings .. .. .. 6,52,000 — — 6,52,000 6,51,998 — — 6,51,998 2 2

Leasehold improvements .. 35,15,636 80,275 — 35,95,911 2,20,240 3,59,481 — 5,79,721 30,16,190 32,95,396
Machinery and equipments .. 30,39,367 19,12,646 (10,633) 49,41,380 14,47,983 5,20,896 (9,261) 19,59,618 29,81,762 15,91,384
(Contd.)
Utilities .. .. .. 45,49,706 13,102 (10,608) 45,52,200 31,60,900 3,51,090 (10,607) 35,01,383 10,50,817 13,88,806
Office equipments, furniture

and fixtures . . .. .. 3,30,13,786 5,57,380 (11,75,802) 3,23,95,364 1,94,29,939 28,06,658 (9,31,812) 2,13,04,785 1,10,90,579 1,35,83,847
Vehicles .. .. .. 85,87,337 58,76,560 (34,13,789) 1,10,50,108 60,57,959 16,70,291 (31,30,007) 45,98,243 64,51,865 25,29,378
Total .. 5,33,57,832 84,39,963 (46,10,832) 5,71,86,963 3,09,69,019 57,08,416 (40,81,687) 3,25,95,748 2,45,91,215 2,23,88,813
Previous year total .. .. 5,13,23,082 1,71,40,869 (1,51,06,119) 5,33,57,832 3,96,11,070 48,32,499 (1,34,74,550) 3,09,69,019 2,23,88,813 —
Capital Work in Progress
(Including advances on Capital — 40,01,618
Account) 2,45,91,215 2,63,90,431
1. Buildings include:
Cost of flat of Rs.6,52,000 acquired in 1978 in respect of which Society/Condominium is yet to be formed and conveyance deed to be executed in its favour.
Schedules to Balance Sheet (Contd.)

Rupees Rupees Rupees Rupees
6. INVESTMENTS
LONG TERM INVESTMENTS

Trade (unquoted):
In wholly owned Subsidiary Companies
(i) 10,150 fully paid-up Equity shares of
Rs.10 each of Schering Plough (India)
Private Limited. .. .. .. .. .. 1,01,500 1,01,500
(ii) 10,200 fully paid-up Equity
shares of Rs.10 each of Wellnex Pharmaceuticals
Private Limited. .. .. .. .. 51,000 1,52,500 51,000 1,52,500
Total .. 1,52,500 1,52,500
7. INVENTORIES
Raw and packing materials on hand and
in transit .. .. .. .. .. 5,76,09,465 5,17,76,659
Work-in-process .. .. .. .. .. 33,700 4,19,480
Finished goods .. .. .. .. .. 11,29,50,523 15,00,41,463
Total .. 17,05,93,688 20,22,37,602
8. SUNDRY DEBTORS
(UNSECURED)
Debts outstanding for a period exceeding six months:
Considered good .. .. .. .. .. 2,79,040 6,89,866
Considered doubtful .. .. .. .. .. 30,47,686 30,36,713
33,26,726 37,26,579
Less: Provision for doubtful debts .. .. 30,47,686 30,36,713
2,79,040 6,89,866
Others Debts:
Considered good .. .. .. .. .. 14,13,20,522 7,31,55,006
Total .. 14,15,99,562 7,38,44,872
9. CASH AND BANK BALANCES

Cheques on hand .. .. .. .. 41,18,653 45,84,824
Balance with scheduled banks in :
Current account .. .. .. .. .. 14,73,035 11,31,071
Deposit account .. .. .. .. .. 3,76,90,000 2,35,000
Total .. 4,32,81,688 59,50,895
27

Rupees Rupees
10. LOANS AND ADVANCES
(Unsecured, considered good)
Advances recoverable in cash or in kind or for value

to be received. . . . . . . . . . . . . . . . . . 92,87,315 2,36,36,298
Deposits (See Note No. B.1 (e)) . . .. .. .. .. 1,69,34,265 1,67,76,409
Balances with excise authorities . . .. .. .. .. 34,87,471 49,63,356

Total .. 2,97,09,051 4,53,76,063
Advances recoverable in cash or in kind for value to be received includes :

a) amount recoverable from Schering Plough (India) Private Limited, a wholly owned subsidiary company Rs. Nil (Previous year
Rs. Nil); maximum amount due during the year Rs. 3,500 (Previous year Rs. 5,750).
b) amount recoverable from Wellnex Pharmaceuticals Private Limited, a wholly owned subsidiary company Rs. Nil (Previous
year Rs. Nil); maximum amount due during the year Rs. 6,01,500 (Previous year Rs. Nil).
c) amount due in respect of housing loan to a Director Rs. 10,76,571 (Previous year Rs. 12,56,000); maximum amount due
during the year Rs. 12,56,000 (Previous year Rs. 12,56,000)
11. CURRENT LIABILITIES
Sundry creditors (See note no. B. 17) .. .. .. 9,43,63,044 5,43,70,053
Unpaid Dividend .. .. .. .. .. .. .. 2,75,324 3,41,920
Unpaid matured deposits .. .. .. .. .. .. 35,000 40,000
Other liabilities .. .. .. .. .. .. .. 8,23,65,629 4,45,02,258

Total .. 17,70,38,997 9,92,54,231
12. PROVISIONS
Taxation less payments .. .. .. .. .. .. 1,17,79,596 1,05,13,946
Leave Encashment .. .. .. .. .. .. .. 1,40,76,056 1,57,58,741
Gratuity .. .. .. .. .. .. .. 1,16,98,385 —
Proposed dividend .. .. .. .. .. .. .. 64,00,000 —
Corporate tax on dividend .. .. .. .. .. .. 8,20,000 —

Total .. 4,47,74,037 2,62,72,687
13. PROFIT & LOSS ACCOUNT (DEBIT BALANCE)
Debit balance in Profit & Loss Account .. .. .. — 6,26,52,007
Less : Shown as deduction from General Reserve as

per contra .. .. .. .. .. .. .. — 6,26,52,007
Total .. — —
28
Schedules to Profit and Loss Account
Year ended Year ended
December 31, 2003 December 31, 2002
Rupees Rupees
14. OTHER INCOME
Interest on Staff Loan . . . . . . . . . . . . . . 20,354 54,698
Interest on delayed payments from customers . . . . 3,64,622 8,90,368
Interest on deposits (tax deducted at source Rs. 55,524; 2,97,758 53,860
Previous year Rs. 5,310)
Interest others (tax deducted at source Rs. 57,632;
Previous year Rs. 1,05,785). . . . . . . . . . . . 5,14,082 25,21,653
Profit on sale of fixed assets (Net) .. .. .. .. 7,34,980 3,22,17,850
Miscellaneous income .. .. .. .. .. .. 34,30,216 1,78,27,003
Total .. 53,62,012 5,35,65,432
15. COST OF MATERIALS/GOODS

Opening stocks:
Raw and packing materials .. .. .. .. .. 5,17,76,659 3,70,30,052
Work-in-process .. .. .. .. .. .. .. 4,19,480 1,12,83,778
Finished Goods. . . . .. .. .. .. .. .. 15,00,41,463 25,44,67,529
20,22,37,602 30,27,81,359
Purchases:
Finished Goods. . . . .. .. .. .. .. .. 59,64,47,567 38,85,38,295
69,87,66,911 50,43,47,803
90,10,04,513 80,71,29,162
Less : Closing stocks:
Work-in-process .. .. .. .. .. .. .. 33,700 4,19,480
Finished Goods .. .. .. .. .. .. .. 11,29,50,523 15,00,41,463
17,05,93,688 20,22,37,602
Total .. 73,04,10,825 60,48,91,560
16. PERSONNEL EXPENSES

Salaries, wages, bonus and commission .. .. .. 11,13,78,059 9,65,45,365
Contribution to provident and other funds .. .. .. 2,81,29,772 1,57,34,722
Staff welfare expenses . . .. .. .. .. .. .. 77,12,315 90,29,968
Amortisation of expenditure under V.R.S. .. .. .. — 1,05,81,533
Total .. 14,72,20,146 13,18,91,588
29
Schedules to Profit and Loss Account (Contd.)

17. OPERATING AND OTHER EXPENSES
Processing charges .. .. .. .. .. .. .. 1,51,27,739 2,68,05,150
Stores and spares .. .. .. .. .. .. .. 29,46,026 29,72,581
Power and fuel .. .. .. .. .. .. .. .. 12,93,816 28,14,231
Rent .. .. .. .. .. .. .. .. .. .. 85,95,865 67,88,823
Repairs and maintenance to:
Machinery and utilities .. .. .. .. .. .. 12,60,488 16,99,598
Buildings . . .. .. .. .. .. .. .. .. 1,08,918 3,64,074
Others .. .. .. .. .. .. .. .. .. 6,55,700 12,64,821

20,25,106 33,28,493
Insurance .. .. .. .. .. .. .. .. .. 24,87,996 33,77,345
Rates and taxes . . .. .. .. .. .. .. .. 24,81,358 33,21,859
Excise duty & sales tax. . .. .. .. .. .. .. 12,39,85,544 7,83,18,457
Freight & forwarding related expenses .. .. .. 1,39,80,579 1,58,54,062
Promotion & Information expenses .. .. .. .. 2,22,22,904 2,31,19,710
Commission to agents .. .. .. .. .. .. 2,39,32,770 2,02,59,056
Travelling & conveyance .. .. .. .. .. .. 5,49,20,507 5,08,59,724
Auditors’ remuneration:
Audit fees .. .. .. .. .. .. .. .. .. 9,22,900 9,00,750
Tax Audit fees .. .. .. .. .. .. .. .. 1,08,000 1,05,000
Out-of-pocket expenses .. .. .. .. .. .. 30,000 30,000

10,60,900 10,35,750
Directors’ sitting fees & commission .. .. .. .. 3,26,000 85,500
Bad debts written off .. .. .. .. .. .. .. 5,35,407 1,46,330
Less: Adjusted against provision for earlier years .. 5,35,407 1,46,330

— —
Provision for doubtful debts . . .. .. .. .. .. 5,46,380 —
Miscellaneous .. .. .. .. .. .. .. .. 4,40,74,228 3,98,63,808

Total .. 32,00,07,718 27,88,04,549
30
Schedules to Balance Sheet and Profit and Loss Account
18. SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
A Significant Accounting Policies

1. Basis of Accounting
The Company follows accrual method of accounting. Assets and Liabilities are recorded at historical cost.
2. Use of estimates
The presentation of financial statements in conformity with the generally accepted accounting principles require estimates and
assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the
reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates
are recognised in the period in which the results are known materialised.
3. Sales
Gross Sales in Profit and Loss Account is stated inclusive of excise duty and sales tax.
4. Fixed Assets and Depreciation
Fixed Assets are carried at cost of acquisition less accumulated depreciation. Depreciation on fixed assets acquired/sold/
discarded/demolished during the year is provided from/upto the date on which the asset is acquired/sold/discarded/demolished.
Fixed assets are depreciated on Straight Line Method over their estimated useful lives. (Depreciation (%) used: Building 5/10;
Leasehold improvements, Furniture & Fixtures 10; Machinery & Equipments, Utilities, Office Equipments 10/15/20; Vehicles
20; Computers 20/33.33). Assets costing less than Rs. 5,000/- per item are depreciated at 100% in the year of purchase.
A nominal value of Re.1/- is assigned to fully depreciated assets.
5. Investments
Investments are classified as long term & current investments. Long term investments are carried at cost. No provision is
made for decline in value of long term investments unless such decline is considered other than temporary. Current investments
are valued at lower of cost or net realisable value.
6. Inventories
Inventories are valued at lower of historical cost or net realisable value. Cost is arrived at on First in First out basis and cost
of finished goods and work-in-process includes appropriate allocation of production overheads.
7. Excise Duty
Excise Duty paid/ payable on goods manufactured by the Company and remaining in inventory at the year end is included as
a part of inventory valuation.
8. Borrowing Cost
Borrowing costs other than those that are directly attributable to the acquisition, construction or production of a qualifying
asset are recognised as an expense in the period in which they are incurred.
9. Foreign Currency Transactions
(i) Transactions in foreign currency are recorded at the exchange rate prevailing at the time of occurrence of the transaction.
(ii) All Foreign currency liabilities/assets outstanding as at year end are restated at the rates ruling on that date.
Any exchange differences arising on such transactions, are dealt with in the Profit and Loss Account (except those relating to
acquisition of fixed assets which are adjusted to the cost of the asset).
10. Treatment of Retirement Benefits
The Company has various Schemes of Retirement Benefits such as Provident Fund, Superannuation Fund and Gratuity duly
recognised by the Income Tax Authorities. Company’s contribution in respect of Superannuation, Gratuity and Provident Fund
is charged to revenue. Contribution in respect of Gratuity is paid to Life Insurance Corporation of India based on the actuarial
valuation computed by it. The Company also provides for accumulated privilege leave available on retirement to its employees
based on actuarial valuation.
11. Taxation
Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with
relevant tax regulations. Deferred tax is recognised for all timing differences between accounting income and taxable income
and is quantified using substantially enacted tax rates as at the balance sheet date.
Deferred tax assets are recognised where realisation is reasonably certain and are reviewed for the appropriateness of their
respective comparative values at each balance sheet date.
12. Lease
Rentals paid under operating leases are charged to Profit and Loss Account in accordance with Accounting Standard (AS) 19
on “Leases” issued by the Institute of Chartered Accountants of India.
31
Schedules to Balance Sheet and Profit and Loss Account (Contd.)
B. NOTES ON ACCOUNTS (Figures in Rupees unless

otherwise specified)
2003 2002
1. Contingent liabilities:
(a) Claims against the Company not acknowledged as debts .. .. .. 1,27,500 1,27,500
(b) Guarantee given by the Company to Housing Development Finance

Corporation Ltd. against housing loans to employees .. .. .. .. — 12,887
(c) Other guarantees issued by banks on behalf of the Company

(margin money issued guarantees Rs. 2,58,000; previous year Rs. 68,235) . . 14,92,722 1,70,000
(d) Guarantee given to Bank & NBFC on behalf of its subsidiary Company .. 41,58,430 87,00,000
(e) The Government of India had made a demand for payment of Rs.194.62 lacs
into the Drugs Prices Equalisation Account (DPEA) in respect of prior years
(April 1, 1979 to March 1, 1984). The Company has contested this demand. Per
the interim order of the Supreme Court a sum of Rs. 50 lacs was deposited into
the DPEA. The Company’s Writ Petition has been admitted by the High Court
and is pending for final hearing and disposal. As the demand is contested by the
Company, no provision has been made in respect thereof.
A sum of Rs.50 lacs deposited pursuant to the Supreme Court’s Order has been
shown under “Loans and Advances-Deposits”.
(f) Claims against the Company not acknowledged as debts in Excise matters . . 4,48,539 —
(g) Claims against the Company not acknowledged as debts in Sales tax matters 15,36,759 —
2. The company had received show-cause notices from excise authorities in earlier
years for matters relating to classification dispute for two of its products. The company
had disputed the show-cause notices. However, the adjudicating authority turned
down our representations and raised a demand of Rs. 1,77,40,717/- together with
penalty & interest. The Company has filed an appeal with the higher Appellate authority
against this demand for which orders are awaited. Pending outcome of the appeal,
the company has provided for Rs. 1,77,40,717 (Excise duty Rs. 99,48,231; Penalty
Rs. 25,69,665; Interest Rs. 52,22,821) in the accounts towards excise duty, penalty &
interest. These amounts have been included under the head of “Excise duty & sales
tax” in Schedule 17.
3. The company has in the current year provided for Rs. 1,34,55,235/- as additional
gratuity liability. This is based on intimation received from Life Insurance Corporation
of India due to heavy withdrawals from the fund during past few years. This amount
has been included under the head of “Contribution to provident and other funds” in
Schedule 16.
4. The Board of Directors of the company at their meeting held on October 16, 2003
decided to amalgamate Wellnex Pharmaceuticals Private Limited, a wholly owned
subsidiary of the company, with the company effective January 1, 2004. Pursuant to
this, the company has filed a scheme of amalgamation with the Stock Exchange,
Mumbai, for its approval.
5. Taxation:
a) Current tax has been provided for the year in accordance with the provision of
section 115JB of the Income Tax Act, 1961.
b) In compliance with Accounting Standard (AS) 22 “Accounting for taxes on income”,

the company has recognised net deferred credit of Rs. 81,61,884/- in the profit
32
2003 2002
Rupees Rupees
and loss account for the year. The break-up of Deferred tax assets / (liability)
into major components as at the year end is as under.
Deferred Tax Liability

Depreciation .. .. .. .. .. .. .. .. .. (64,855) —
(64,855) —
Deferred Tax Assets
Voluntary Retirement Scheme .. .. .. .. .. .. .. 28,47,094 46,66,456
Debtors provision .. .. .. .. .. .. .. .. .. 10,93,357 11,15,992
Provision for expenses .. .. .. .. .. .. .. .. 1,02,69,681 —
Others .. .. .. .. .. .. .. .. .. 15,37,438 17,38,383

1,57,47,570 75,20,831
Deferred Tax Asset (Net) .. .. .. .. .. .. .. .. 1,56,82,715 75,20,831
6. Earnings per share calculation:
Earnings/(loss) used as numerator in calculating basic/diluted Earnings per share . . 5,93,56,269 (7,60,61,840)
Number of equity shares (Face value Rs. 10/-) . . .. .. .. .. .. 32,00,000 32,00,000
Earnings per share (Basic & diluted) .. .. .. .. .. .. .. 18.55 (23.77)
7. Cost of materials/goods and operating and other expenses include cost of samples
distributed Rs. 4,99,39,657 (previous year Rs. 4,99,00,124).
Stock of samples amounting to Rs. 30,92,413 (previous year Rs. 80,45,263) are
included in stocks of finished goods.
8. The net exchange gain of Rs. 42,37,014 (previous year loss Rs. 6,88,247) has been
included in the profit & loss account for the year.
9. Past service gratuity liability has been provided for as per the actuarial valuation as at
June 1, 2003 computed by the Life Insurance Corporation of India.
The company has provided for accumulated privilege leave available on retirement to
its employees based on actuarial valuation as at the year end.
33
2003 2002
Rupees Rupees
10. Remuneration to Directors:
(a) Salaries .. .. .. .. 73,54,452 73,48,206
Perquisites .. .. .. .. 3,04,263 2,11,855
Contribution to Provident and Superannuation

Funds .. .. .. .. 16,89,031 17,64,335
Provision for Gratuity . . .. .. .. 4,45,404 5,48,224
Commission .. .. .. .. 200,000 —
99,93,150 98,72,620
(b) Computation of net profits in accordance with
Section 349 of the Companies Act, 1956.
Profit/(loss) after tax as per Profit and
Loss Account 5,93,56,269 (7,60,61,840)
Add: Provision for taxation .. .. (1,61,884) 1,00,000
Managerial remuneration .. .. 99,93,150 98,72,620
Amortisation of expenditure under V.R.S. — 98,31,266 1,05,81,532 2,05,54,152

6,91,87,535 (5,55,07,688)
Less: Profit on assets sold/scrapped u/s 350 1,02,388 2,81,53,432

Less: Income from surrender of tenancy rights — 1,00,00,000
Profit/(Loss) available for Managerial Remuneration 6,90,85,147 (9,36,61,120)
Maximum amount permissible

(under Part I or Part II of Schedule XIII)
a. Wholetime Directors .. .. .. .. 69,08,515 30,00,000
b. Non wholetime Directors .. .. .. 6,90,851 —
Managerial Remuneration paid/provided
a. Wholetime Directors .. .. .. .. 97,93,150 98,72,620
b. Non wholetime Directors .. .. .. 2,00,000 —
Note: 1) In addition, provision is made for actuarially valued liability in respect of future payment of gratuity estimated at
Rs. 15,31,389 (previous year Rs. Nil).
2) Remuneration of Managing Director is subject to approval of Central Government.
34
11 Related Party Disclosures

1. Relationships:
i) Schering Plough Corporation U.S.A., through its subsidiary Dashtag holds 40% of equity shares in the
company as at 31st December 2003.
ii) Subsidiaries of the company
Wellnex Pharmaceuticals Pvt. Ltd. and Schering Plough (India) Pvt. Ltd. are wholly owned subsidiaries
of the company.
iii) Other related parties with whom transactions have taken place during the year:
Associate Companies
a) Essex Chemie A.G., Switzerland
b) Schering Plough (Brinny) Co, Ireland
c) Schering Plough Ltd, Singapore
d) SOL Ltd., U.S.A.
e) Schering Plough Labo N.V., Belgium
f) Schering Plough Division of SOL Ltd.
g) Schering Plough Corporation, U.S.A.
iv) Key Management Personnel
Mr. K.D.Shah — Managing Director
2. Related Party Transactions

Particulars Dashtag Key
(Holding Associate Management
40% equity) Subsidiaries Companies Personnel Total
31.12.03 31.12.02 31.12.03 31.12.02 31.12.03 31.12.02 31.12.03 31.12.02 31.12.03 31.12.02
Purchase of goods — — — — 30,85,94,148 19,25,89,341 — — 30,85,94,148 19,25,89,341
Receipt of Reimbursement/
Allowance of Promotional
Expenses — — — — 74,333 28,90,900 — — 74,333 28,90,900
Rendering of services — — 14,55,000 14,55,000 — — — — 14,55,000 14,55,000
Receiving of services — — 38,40,000 38,40,000 3,89,042 25,503 — — 42,29,042 38,65,503
Dividend Paid * — 16,17,600 — — — — — — — 16,17,600
Remuneration — — — — — — 77,73,157 81,78,287 77,73,157 81,78,287
Outstandings/(Receivables) — — — — 5,69,82,202 3,97,93,740 (10,76,571) (12,56,000) 5,59,05,631 3,85,37,740
* Net of taxes.
12 Disclosure for operating lease under Accounting Standard 19 — “Leases”

The company has entered into an agreement for taking office premises on leave and license basis. The specified
disclosure in respect of this agreement is given below:
1. Lease payment recognised in the profit and loss account for the year — Rs. 84,64,440. (previous year
Rs. 54,56,421)
2. General description of the significant arrangement.
Refundable interest free deposit has been given and the agreement has a minimum lock in period of three
years with a provision for renewal with escalation clause.
3. Minimum lease payment which is non cancelable
December December
31st 2003 31st 2002
i) Not later than one year Rs. 84,64,440 Rs. 84,64,440
ii) Later than one year & not later than five years Rs. 18,43,064 Rs. 1,03,07,504
35
13. Capacities, Production, Purchases, Stocks & Turnover

(a) Capacities, Production & Purchases
Class of Production* PURCHASES

goods Units
Quantity Quantity Cost
Tablets .. .. .. .. No.in — — —
millions
Ointments/Creams . . .. .. Kilograms 44,368 1,67,013 28,34,31,507
(59,641) (84,488) (18,12,07,643)
Injectables .. .. .. .. Litres 13,729
(36,495)
Injectables .. .. .. .. MIU 2,900 2,86,24,624
(3,066) (3,02,26,343)
Injectables .. .. .. .. MG Vials 44,047 20,04,60,772
(27,646) (12,92,98,983)
Liquids .. .. .. .. Litres 76,090 1,648 18,97,087
(60,299) (826) (15,65,773)
Patches .. .. .. .. Each 1,75,000 29,25,731
(1,45,000) (29,71,492)
Capsules .. .. .. .. Each 4,33,931 7,91,07,846
(1,95,818) (4,32,68,061)
Sponge .. .. .. .. Each
Total . . 59,64,47,567
(38,85,38,295)
*Production quantities are quantities of goods manufactured by third parties on loan licences.
(b) Stocks
OPENING STOCK CLOSING STOCK

Class of
goods Units Quantity Value Quantity Value
Tablets .. .. No. in 1 15,59,567 — 1,069

millions (56) (2,05,33,879) (1) (15,59,567)
Ointments/Creams . . Kilograms 14,938 1,46,34,694 15,995 75,68,866
(16,220) (1,71,06,228) (14,938) (1,46,34,694)
Injectables. . .. Litres 12,186 2,97,31,633 1,595 2,07,50,639
(5,266) (2,52,09,871) (12,186) (2,97,31,633)
Injectables. . .. MIU 30,900 5,37,59,576 8,094 86,06,366
(73,431) (12,39,15,800) (30,900) (5,37,59,576)
Injectables. . .. MG Vials 8,973 3,00,14,830 10,618 4,08,84,239
(7,519) (3,46,18,851) (8,973) (3,00,14,830)
Liquids .. .. Litres 20,966 94,75,211 12,859 1,45,29,814
(16,368) (1,07,85,379) (20,966) (94,75,211)
Patches . . .. Each 87,311 17,74,948 1,00,651 16,22,235
(1,00,198) (16,51,440) (87,311) (17,74,948)
Capsules . . .. Each 1,74,897 90,89,223 2,88,305 1,89,87,295
(11,762) (1,87,86,275) (1,74,897) (90,89,223)
Sponge .. .. Each 1 1,781 — —
(485) (8,63,673) (1) (1,781)
Total . . 15,00,41,463 11,29,50,523

(25,34,71,396) (15,00,41,463)
36
(c) Turnover
TURNOVER
Class of goods Units Quantity Value
Tablets .. .. No. in 0.38 5,87,596

millions (5.64) (77,14,208)
Ointments/Creams. . Kilograms 1,98,442 63,98,36,171
(1,29,644) (38,36,26,105)
Injectables .. Litres 22,939 6,35,51,817
(26,837) (9,06,83,977)
Injectables .. MIU 21,647 5,88,49,492
(37,876) (10,09,39,282)
Injectables. . .. MG Vials 39,821 34,33,50,840
(24,720) (21,91,53,288)
Liquids .. .. Litres 69,683 6,38,61,029
(52,723) (5,78,26,714)
Patches . . .. Each 1,20,085 34,86,293
(1,43,198) (41,58,401)
Capsules . . .. Each 2,84,507 13,15,30,152
(28,595) (8,17,01,722)
Sponge .. Each — —
(496) (11,63,839)
Total . . 1,30,50,53,390
(94,69,67,536)
NOTES:
(1) The Company does not require industrial licence under the Industries (Development & Regulation) Act, 1951 and
hence licensed capacities are not applicable.
(2) Figures of closing stock are after adjusting difference on account of damages, excesses and shortages.
(3) Quantities have been rounded off to the nearest unit.
(4) Figures in brackets relate to the previous year.
14. Raw materials consumed:

2003 2002
Materials Quantity Value Quantity Value

in Kgs. in Kgs.
Antihistamines .. .. .. .. 6 35,47,316 8 81,02,932
Antibiotics .. .. .. .. 578 2,94,54,025 1,505 2,66,35,517
Antifungal .. .. .. .. 515 30,46,671 200 10,90,491
Anticancer .. .. .. .. — — 0.27 87,275
Analgesic/Antipyretic .. .. .. .. 6 766 36 5,213
Steroids .. .. .. .. 9 1,79,71,577 17 1,81,93,677
Solvents (Tonnes) .. .. .. .. 47 26,36,852 8 4,27,923
Sugar/Lactose (Tonnes) . . .. .. .. 7 1,76,229 33 5,36,136
Emollients & Protectives . . .. .. .. 2,966 53,74,496 2,877 50,49,712
Other raw materials .. .. .. .. 78,46,010 50,70,796
Total . . 7,00,53,942 6,51,99,672
37
2003 2002
15. Consumption of raw materials:

Amount % Amount %
Imported .. .. .. 5,30,82,102 76 5,38,34,891 83

Indigenous .. .. .. 1,69,71,840 24 1,13,64,781 17
Total . . 7,00,53,942 100 6,51,99,672 100
16. (a) CIF value of Imports:

Raw materials/Finished goods .. 31,52,75,943 21,45,71,317
Capital Goods — 16,14,822
Total . . 31,52,75,943 21,61,86,139
(b) Expenditure in Foreign Currency:

Travel .. .. .. .. 1,50,380 5,32,318
Others .. .. .. .. 26,64,301 38,20,440
Total . . 28,14,681 43,52,758
(c) Remittance in foreign currency during the year on account of dividend:

Amount remitted .. .. — 19,20,000
Number of non-resident shareholders . . — 1
Number of shares held by
non-resident on which dividends were
due .. .. .. .. — 12,80,000
Year to which dividend relates . . .. — 2001
(d) Earnings/Receipts in Foreign Exchange

Reimbursement/ Allowance of Promotion
Expenses .. .. .. 74,333 28,90,900
Re-export of Raw Material .. .. 12,91,557 —
13,65,890 28,90,900
17. Sundry Creditors include Rs. 27,30,543 (previous year Rs. 23,49,098) due to small scale industrial undertakings. Amounts
payable to Small Scale Undertakings over 30 days are Aqua Proofers Pvt. Ltd., Bhuta International, D M Roll Labels, HBR
Packagings, Laxmi Print Art, Nalanda Packaging Industries, Nilmac Packaging Ind. Ltd. Pink Packaging & Moulding P. Ltd.
Pristine Industries, Silvo Lical Chemicals Ltd., Simal Packaging Pvt. Ltd., Subhash Chemical Industries, Vigirom Chem. Pvt. Ltd.
18. Figures for the previous year have been regrouped and/or reclassified, wherever necessary, to conform with current year’s
classification.
Signatures to Schedules 1 to 18
As per our report of even date attached
R. A. SHAH Chairman
For DELOITTE HASKINS & SELLS
Chartered Accountants D. C. SHROFF
N. P. SARDA
Partner
K. D. SHAH
K. J. KAUL
} Directors
USHA RAMDOSS
Mumbai, March 8, 2004. Company Secretary Mumbai, March 5, 2004.
38
Balance Sheet Abstract and Company’s General Business Profile
Additional information pursuant to the Provisions of Part IV of Schedule VI to the Companies Act, 1956
I. Registration Details
Registration No. : 6199 of 1947-1948
State Code : 11
Balance Sheet Date : 31-12-2003
II. Capital Raised during the year (Amount in Rs. Thousands)

Public Issue : —
Rights Issue : —
Bonus Issue : —
Private Placement : —
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities : 425610
Total Assets : 425610
Sources of Funds
Paid-up Capital : 32000
Reserves & Surplus : 101077
Secured Loans : —
Unsecured Loans : 70720
Application of Funds
Net Fixed Assets : 24591
Investments : 153
Net Current Assets : 179053*
Miscellaneous Expenditure : —
Accumulated Losses : —
* Includes Deferred Tax Asset.
IV. Performance of the Company (Amount in Rs. Thousands)

Total Income : 1272862
Other Income : 5362
Total Expenditure (excluding
depreciation) : 1213322
Depreciation : 5708
Profit/(Loss) Before Tax (P.B.T.) : 59194
Profit/(Loss) After Tax (P.A.T.) : 59356
Earnings Per Share (Rs.) : 18.55
Dividend Rate (%) : 20.00
V. Generic Names of Three Principal Products/Services of the Company

(as per monetary terms)
Item Code No. (ITC Code) : —
Product Description : Antibiotic
Anti-cancer (Oncology)
Topical Ointment (Dermatology)
USHA RAMDOSS R. A. SHAH

Mumbai, March 5, 2004. Company Secretary Chairman
39
Subsidiary Companies
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956
RELATING TO SUBSIDIARY COMPANY
SCHERING-PLOUGH (INDIA) PRIVATE LIMITED
A. The Financial Year of the Subsidiary Company. . .. .. .. .. .. December 31, 2003

B. (a) Number of Shares held by Fulford (India) Limited in the Subsidiary Company at the end 10,150 Equity Shares of
of the Financial Year of the Subsidiary Company . . .. .. .. .. Rs. 10 each fully paid.
(b) Extent of holding .. .. .. .. .. .. .. 100%

C. The net aggregate of Profits or (Losses) of the Subsidiary Company so far as it concerns
the members of Fulford (India) Limited and not dealt with in the Accounts of Fulford (India) Limited:
(a) For Financial Year ended on December 31, 2003 .. .. .. .. .. Rs. (15,713)
(b) For the previous financial year . . .. .. .. .. .. .. Rs. (20,776)
D. Profit dealt with or (Losses) provided for in the Accounts of Fulford (India) Limited:
(a) For Financial Year ended on December 31, 2003 .. .. .. .. .. NIL
(b) For the previous financial year . . .. .. .. .. .. .. NIL
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956

RELATING TO SUBSIDIARY COMPANY
WELLNEX PHARMACEUTICALS PRIVATE LIMITED
A. The Financial Year of the Subsidiary Company. . .. .. .. .. .. December 31, 2003

B. (a) Number of Shares held by Fulford (India) Limited in the Subsidiary Company at the end 10,200 Equity Shares of
of the Financial Year of the Subsidiary Company. . . .. .. .. .. Rs. 10 each fully paid.
(b) Extent of holding .. .. .. .. .. .. .. 100%
C. The net aggregate of Profits or (Losses) of the Subsidiary Company so far as it concerns the
members of Fulford (India) Limited and not dealt with in the Accounts of Fulford (India) Limited:
(a) For Financial Year ended on December 31, 2003 . . .. .. .. .. Rs. (1,82,818)
(b) For the previous financial year . . .. .. .. .. .. .. Rs. (6,00,340)
D. Profit dealt with or (Losses) provided for in the Accounts of Fulford (India) Limited:
(a) For Financial Year ended on December 31, 2003 .. .. .. .. .. NIL
(b) For the previous financial year . . .. .. .. .. .. .. NIL
R. A. SHAH Chairman
}
D. C. SHROFF
USHA RAMDOSS K. D. SHAH Directors

Mumbai, March 5, 2004. Company Secretary K. J. KAUL
40
Directors’ Report
Your Directors have pleasure in presenting the Fifteenth Annual Report of the Company alongwith the
Audited Accounts for the year ended December 31, 2003.
FINANCIAL RESULTS
During the year, the Company has incurred a loss of Rs.0.16 lakhs as against the loss of Rs.0.21 lakhs in
the previous year. After adjusting against the carried forward profits of the previous year of Rs. 0.17 lakhs,
the amount available for appropriation stands at Rs. 0.01 lakhs.
DIVIDEND
The Directors do not recommend any dividend for the year ended December 31, 2003.
CURRENT YEAR AND PROSPECTS
The Directors do not expect any significant change in the position of the Company in the next year.
DIRECTORS
Mr. R. K. Rustagi retires by rotation at the forthcoming Annual General Meeting and being eligible, offers
himself for re-appointment.
FIXED DEPOSIT
The Company has not accepted any Deposits from the public during the period under review.
AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants, retire as Auditors of the Company at the conclusion of
the ensuing Annual General Meeting and according to a Certificate received from them under Section
224(1B) of the Companies Act, 1956, they are eligible for re-appointment.
PARTICULARS OF EMPLOYEES
There are no employees drawing remuneration in excess of the limits prescribed under Section 217(2A) of
the Companies Act, 1956.
INFORMATION PURSUANT TO SECTION 217(1)(e)
Information required to be annexed to this report in accordance with Section 217(1)(e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 is either nil or is not applicable to the Company.
In accordance with the sub-section (2AA) of Section 217 of the Companies (Amendment) Act, 2000 concerning
‘Directors Responsibility Statement’ and to the best of their knowledge and belief and according to the
information and explanation obtained by them, your Directors confirm that:
i) in the preparation of Annual accounts, the applicable accounting standards have been followed along
with proper explanation relating to material departures;
ii) they have selected such accounting policies and applied them consistently and made judgements and
estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the Loss of the Company for that period;
iii) they have exercised proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities; and
M. K. RAJAN
41
Auditors’ Report
AUDITORS’ REPORT TO THE MEMBERS OF SCHERING-PLOUGH (INDIA) PRIVATE LIMITED
1. We have audited the attached Balance Sheet of Schering-Plough (India) Private Limited as at December
31, 2003 and also the Profit and Loss Account of the Company for the year ended on that date,
annexed thereto. These financial statements are the responsibility of the company’s management. Our
responsibility is to express an opnion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material mis-statement. An audit includes examining, on a test
includes assessing the accounting principles used and significant estimates made by the management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a
Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 we
(i) we have obtained all the information and explanations, which to the best of our knowledge and
(ii) in our opinion, proper books of account as required by law have been kept by the Company so far
(iii) the Balance Sheet and the Profit and Loss Account dealt with by this report are in agreement with
the books of account;
(iv) in our opinion, the Balance Sheet and the Profit and Loss Account dealt with by this report comply
with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies
Act, 1956.
(v) on the basis of the written representations received from the directors as on December 31, 2003
and taken on record by the Board of Directors, we report that none of the directors is disqualified
as on December 31, 2003 from being appointed as a director in terms of clause (g) of sub-section
(vi) in our opinion, and to the best of our information and according to the explanations given to us,
the said accounts read together with the notes thereon, give the information required by the
Companies Act, 1956 in the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India.
(a) in case of the Balance Sheet, of the state of affairs of the company as at December 31,
2003; and
(b) in case of the Profit and Loss Account, of the Loss for the year ended on that date.

K. A. Katki
(Partner)
Mumbai, March 8, 2004 Membership No.38568
42

(Referred to in Paragraph 3 of our Report of even date)
1. In our opinion and according to the information and explanations given to us, the nature of the company’s
business/activities during the year are such that clauses ii, viii, xiii, xiv, xviii, xix, xx are not applicable to
the Company.
2. As the company does not have any fixed assets, the question regarding maintainance of proper records,
physical verification and disposal is not applicable.
granted or taken any loan secured or unsecured to/from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
4. There were no transactions in respect of purchase of inventory, fixed assets and sale of goods during
the year.
5. In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies
Act, 1956;
a. To the best of our knowledge and belief and according to the information and explanations given to
us, transactions that needed to be entered into the register have been so entered.
b. According to the information and explanations given to us, there were no such transactions that
needed to be entered into a register in pursuance of section 301 of the Companies Act, 1956
(excluding those reported under paragraph 3 above) in excess of Rs. 5 lakhs in respect of any party.
There were no transactions in respect of purchase and sale of goods and materials during the year.
accepted any deposits within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the
7. As the paid up capital and reserves of the company is less than Rs. 50 lakhs as at the commencement
of the financial year and the average annual turnover is less than Rs. 5 crores, the requirement of an
internal audit system is not applicable to the company.
a. The company has been regular in depositing undisputed statutory dues, including Income tax, Cess
and other statutory dues with the appropriate authorities during the year. There were no dues in
respect of Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance,
Sales Tax, Wealth Tax, Custom Duty and Excise Duty during the year.
b. Disputed sales tax aggregating to Rs. 1,49,267 have not been deposited since the matters are
pending with the relevant Sales tax Appellate Authorities. There were no disputed dues in respect of
income-tax, customs duty, wealth tax and excise duty during the year.
has incurred cash losses during the current and the immediately preceding financial year.
10. In our opinion and according to the information and explanations given to us, the company has no dues
to banks and financial institutions. The company has not obtained any borrowings by way of debentures.
11. The company has not granted loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
12. In our opinion and according to the information and explanations given to us, the company has not given
any gurantees for loans taken by others from banks and financial institutions.
13. The company has not obtained any term loan during the year.
explanations given to us, on an overall basis, the company has not raised any short term or long term
funds during the year.
15. To the best of our knowledge and belief and according to the information and explanations given to us,

K. A. Katki
(Partner)
43
Balance Sheet
as at December 31, 2003
As at As at
Schedule Rupees Rupees Rupees Rupees
SOURCES OF FUNDS
Capital .. .. .. 1 1,01,500 1,01,500
Reserves and surplus .. .. 2 1,389 17,102

Total .. 1,02,889 1,18,602
APPLICATION OF FUNDS
Current Assets, Loans and Advances
Cash and bank balances .. 3 1,30,819 1,61,792
Loans and Advances .. .. 4 7,680 6,610

1,38,499 1,68,402
Less : Current Liabilities and Provisions
Liabilities .. .. .. 5 35,610 49,800

Provisions .. .. .. — —
35,610 49,800
Net Current Assets .. .. 1,02,889 1,18,602
Total 1,02,889 1,18,602
Significant Accounting Policies and

Notes on Accounts .. .. 8
As per our report of even date attached M. K. RAJAN Chairman

A. V. SAPRE Director
K. A. KATKI
Partner
Mumbai, March 8, 2004. Mumbai, March 5, 2004.
44
Profit and Loss Account

for the year ended December 31, 2003

INCOME
Other Income .. .. .. 6 14,227 9,274
EXPENDITURE
Operating and other expenses .. 7 29,940 30,050

29,940 30,050
Loss for the year before tax (15,713) (20,776)
Provision for taxation .. .. — —

Loss for the year after tax (15,713) (20,776)
Balance of profit brought forward .. 17,102 37,878
Balance of profit carried forward .. 1,389 17,102
Basic & Diluted Earnings per Share of

Rs. 10/- each .. .. .. (1.55) (2.05)
(Refer note no. 3)

Notes on accounts .. .. 8
As per our report of even date attached M. K. RAJAN Chairman

Chartered Accountants A. V. SAPRE Director
K. A. KATKI
Partner
Mumbai, March 8, ,2004. Mumbai, March 5, 2004.
45
Schedules to Balance Sheet and Profit and Loss Account

As at As at
December 31, December 31,
2003 2002
Rupees Rupees
1. CAPITAL
Authorised:
50,000 Equity Shares of Rs. 10/- each .. .. .. 5,00,000 5,00,000

10,150 Equity Shares of Rs.10/- each fully paid-up .. .. 1,01,500 1,01,500
(All the above shares are held by the Holding

Company - Fulford (India) Limited & its nominee)
2. RESERVES & SURPLUS

Surplus as per Profit & Loss Account .. .. 1,389 17,102

Cheques on hand .. .. .. .. .. 5,775 —
With Scheduled banks on:
Current accounts .. .. .. .. .. 45,044 26,792
Deposit account .. .. .. .. .. 80,000 1,35,000

Total . . 1,30,819 1,61,792
4. LOANS AND ADVANCES

Advances recoverable in cash or kind for value to be
received .. .. .. .. .. 7,680 6,610
Total . . 7,680 6,610
Other Liabilities .. .. .. .. .. 35,610 49,800
Total . . 35,610 49,800
46

Rupees Rupees
6. OTHER INCOME
Interest on bank deposits (tax deducted at
source Rs. 1,279; previous year Rs. 1,921) 6,127 9,274
Credit balances written back .. .. 8,100 —
Total . . 14,227 9,274
7. OPERATING & OTHER EXPENSES

Rent .. .. .. .. 21,000 21,000
Miscellaneous Expenses .. .. 1,380 1,700
Auditor’s remuneration - Audit fees .. 7,560 7,350
Total . . 29,940 30,050

A. Significant Accounting Policies
(1) Basis of Accounting
The accounts have been prepared under historical cost concept on an accrual basis.
(2) Use of Estimates
The presentation of financial statements in conformity with the generally accepted accounting principles require
estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the
financial statement and the reported amount of revenues and expenses during the reporting period. Difference
between the actual result and estimates are recognised in the period in which the results are known materialised.
(3) Taxation
Current tax is determined as the tax payable in respect of taxable income for the year and is computed in
accordance with relevant tax regulations. Deferred tax is recognised for all timing differences between accounting
income and taxable income and is quantified using substantially enacted tax rates as at the Balance Sheet date.
Deferred tax assets are recognised where realisation is reasonably certain and are reviewed for the appropriateness
of their respective comparative values at each balance sheet date.
B. Notes on accounts
(1) Contingent Liabilities
Claims against the company not acknowledged as debts in respect of sales tax Rs. 1,49,267/- (previous year
Rs. Nil)
(2) Taxation
a) As the company has incurred book losses and tax losses during the year, the company does not have any
liability towards current taxation for the year.
b) The deferred tax assets arising due to carry forward losses have not been recognised, as there is no virtual
certainty supported by convincing evidence that sufficient future taxable income will be available against
which such deferred tax assets can be realised.
(3) Earning per share calculation (Figures in Rupees unless otherwise specified)
2003 2002
Loss used as numerator in calculating basic/diluted Earnings per share (15,713) (20,776)
Number of equity shares (Face value Rs. 10/-) 10,150 10,150
Earnings per share (Basic & diluted) (1.55) (2.05)
(4) Amount due to Small Scale Industrial Undertakings Rs. Nil (Previous year Rs. Nil).
(5) Disclosures required under Schedule VI - Part II - Para 4 are not applicable to the Company.
(6) Figures for the previous year have been regrouped and/or reclassified, wherever necessary, to conform with the
current year’s classification.
As per our report of even date attached Signatures to Schedules 1 to 8

Chartered Accountants M. K. RAJAN Chairman
A. V. SAPRE Director
K. A. KATKI
Partner
47

Additional information pursuant to the Provisions of Part IV of Schedule VI to the Companies Act, 1956.
Registration No. : 53509 of 1989
State Code : 11

Public Issue : —
Rights Issue : —
Bonus Issue : —

Total Assets : 138
Sources of Funds
Secured Loans : —
Unsecured Loans : —
Net Fixed Assets : —
Investments : —
Net Current Assets : 102

Total Income : 14
Total Expenditure : 30
Profit/(Loss) Before Tax : (16)
Profit/(Loss) After Tax : (16)
Earnings Per Share (Rs.) : (1.55)
Dividend Rate (%) : —
V. Generic Names of Principal Products/Services of the Company

Item Code No. : —
Product Description : —
M. K. RAJAN
48
Directors’ Report
Your Directors have pleasure in presenting the Fifteenth Annual Report of the Company alongwith the
Audited Accounts for the year ended December 31, 2003.
FINANCIAL RESULTS
During the year, the Company incurred a loss of Rs. 1.83 lakhs as against the loss of Rs. 6.00 lakhs in the
previous year.
DIVIDEND
The Directors do not recommend any dividend for the year ended December 31, 2003.
AMALGAMATION WITH FULFORD (INDIA) LIMITED
The Company was incorporated in 1989 and was rendering quality control services to Fulford (India)
Limited, which had its own manufacturing operations at that point of time. Now, Fulford has fully outsourced
production to third parties under loan licence and consequently, quality control is undertaken by these third
parties. The other quality control jobs are being undertaken by Fulford’s Quality Control Laboratory. In view
of the same, the services of the Company are redundant and therefore the Board of Directors of the
Company have decided to amalgamate the Company with Fulford (India) Limited.
The scheme of amalgamation has been filed by Fulford (India) Limited with The Stock Exchange, Mumbai
for its approval.
DIRECTORS
During the year Dr. S. Menon, Director resigned from the services of the Company. The Board places on
record its appreciation and gratitude for the dedicated and valuable contribution made by Dr. S. Menon
during his tenure as Director.
Mr. K. Venkatraman retires by rotation at the forthcoming Annual General Meeting and being eligible, offers
himself for re-appointment.
FIXED DEPOSIT
The Company has not accepted any Deposits from the public during the period under review.
AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants, retire as Auditors of the Company at the conclusion of
the ensuing Annual General Meeting and according to a Certificate received from them under Section
224(1B) of the Companies Act, 1956, they are eligible for re-appointment.
PARTICULARS OF EMPLOYEES
There are no employees drawing remuneration in excess of the limits prescribed under Section 217(2A) of
the Companies Act, 1956.
INFORMATION PURSUANT TO SECTION 217(1)(e)
Information required to be annexed to this report in accordance with Section 217(1)(e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 is either nil or is not applicable to the Company.
In accordance with the sub-section (2AA) of Section 217 of the Companies (Amendment) Act, 2000 concerning
‘Directors Responsibility Statement’ and to the best of their knowledge and belief and according to the
information and explanation obtained by them, your Directors confirm that:
i) in the preparation of Annual accounts, the applicable accounting standards have been followed along
with proper explanation relating to material departures;
ii) they have selected such accounting policies and applied them consistently and made judgements and
estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the loss of the Company for that period;
iii) they have exercised proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities; and

K. VENKATRAMAN
49
Auditors’ Report
AUDITORS’ REPORT TO THE MEMBERS OF WELLNEX PHARMACEUTICALS PRIVATE LIMITED
1. We have audited the attached balance sheet of Wellnex Pharmaceuticals Private Limited as at December
31, 2003 and also the profit and loss account of the company for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the company’s management. Our
responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. Those
the financial statements are free of material mis-statements. An audit includes examining, on a test
Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we
(i) we have obtained all the information and explanations, which to the best of our knowledge and
(ii) in our opinion, proper books of account as required by law have been kept by the company so far
(iii) the balance sheet and the profit and loss account dealt with by this report are in agreement with
the books of account;
(iv) in our opinion, the balance sheet and the profit and loss account dealt with by this report comply
with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies
Act, 1956.
(v) on the basis of the written representations received from the directors, as on December 31, 2003
and taken on record by the Board of Directors, we report that none of the directors is disqualified
as on December 31, 2003 from being appointed as a director in terms of clause (g) of sub section
(vi) in our opinion, and to the best of our information and according to the explanations given to us,
the said accounts read together with the notes thereon, give the information required by the
Companies Act, 1956, in the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India.
(a) in the case of the balance Sheet, of the state of affairs of the company as at December 31,
2003; and
(b) in the case of the profit and loss account, of the loss for the year ended on that date.

K. A. Katki
(Partner)
50

(Referred to in Paragraph 3 of our Report of even date)
1. In our opinion and according to the information and explanations given to us, the nature of the company’s
business/activities during the year are such that clauses ii, viii, xiii, xiv, xviii, xix, xx are not applicable to
the Company.
2. In respect of its fixed assets :
a. The Company has maintained proper records showing full particulars, including quantitative details
and situation of fixed assets.
b. Verification of fixed assets is being conducted in a phased programme by the management designed
to cover all assets over a period of three years, which in our opinion is reasonable having regard to
the size of the company and the nature of assets. The discrepancies noticed on such verification
were not material and have been properly dealt with in the books of account.
c. None of the fixed assets have been disposed off during the year.
granted or taken any loan secured or unsecured to / from companies, firms or other parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations given to us, there are adequate internal
control procedures commensurate with the size of the company and nature of its business with regard to
purchases of fixed assets. There were no transactions in respect of purchase of inventory and sale of
goods during the year.
5. In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies
Act, 1956;
a. To the best of our knowledge and belief and according to the information and explanations given to
us, transactions that needed to be entered into the register have been so entered.
b. According to the information and explanations given to us, there were no such transactions that
needed to be entered into a register in pursuance of section 301 of the Companies Act, 1956
(excluding those reported under paragraph 3 above) in excess of Rs. 5 lakhs in respect of any party.
There were no transactions in respect of purchase and sale of goods and materials during the year.
accepted any deposits within the meeting of Section 58A and 58AA of the Companies Act, 1956 and the
7. As the paid up capital and reserves of the company is less than Rs. 50 lakhs as at the commencement
of the financial year and the average annual turnover is less than Rs. 5 crores, the requirement of an
internal audit system is not applicable to the company.
a. The company has been regular in depositing undisputed statutory dues, including Income tax, Sales
tax, Cess and other statutory dues with the appropriate authorities during the year. There were no
dues in respect of Provident Fund, Investor Education and Protection Fund, Employees’ State
Insurance, Wealth Tax, Custom Duty and Excise Duty during the year.
b. There were no disputed dues in respect of sales tax, income-tax, customs duty, wealth tax and
excise duty during the year.
has not incurred cash losses during the current and the immediately preceding financial year.
defaulted in repayment of dues to banks and financial institutions. The company has not obtained any
borrowings by way of debentures.
11. The company has not granted loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
12. In our opinion and according to the information and explanations given to us, the company has not given
any gurantees for loans taken by others from banks and financial institutions.
13. The company has applied term loans taken for the purpose for which they were taken.
explanations given to us, on an overall basis, the company has not raised any short term or long term
funds during the year.
15. To the best of our knowledge and belief and according to the information and explanations given to us,
K. A. Katki
(Partner)
51
Balance Sheet
As at As at
SOURCES OF FUNDS
Shareholders’ Funds
Capital .. .. .. 1 102,000 102,000
Reserves and Surplus . . .. .. 2 1,795,753 1,978,571
1,897,753 2,080,571
Loan Funds
Secured loans .. .. .. .. 3 1,128,313 1,730,776
Lease Obligation . . .. .. .. 1,375,638 1,844,604

(Payable within a year Rs. 5,44,605;
previous year Rs.4,68,966)
Deferred Tax Liability (Net). . .. .. 80,171 63,872
Total .. 4,481,875 5,719,823
Fixed Assets 4
Gross Block .. .. .. .. 5,803,230 5,803,230
Less: Depreciation. . .. .. .. 2,408,762 1,412,850
Net Block .. .. .. .. 3,394,468 4,390,380
Current Assets, Loans and Advances

Cash and bank balances. . .. .. 5 49,089 355,630
Loans and advances . . .. .. 6 1,107,323 1,034,563
1,156,412 1,390,193
Less: Current Liabilities & Provisions
Liabilities .. .. .. .. 7 69,005 60,750
Provisions .. .. .. .. — —
69,005 60,750
Net Current Assets .. .. .. 1,087,407 1,329,443
Total .. 4,481,875 5,719,823

Notes on Accounts 11
As per our report of even date attached K. VENKATRAMAN Chairman

For DELOITTE HASKINS & SELLS S. BASU Director
K. A. KATKI
Partner
52

For the year ended For the year ended

INCOME
Income from services rendered .. 3,840,000 3,840,000
Other income .. .. .. 8 — 10,125

3,840,000 3,850,125
EXPENDITURE
Operating and other expenses .. 9 2,576,748 2,807,806
Depreciation .. .. .. 995,912 995,912
Interest .. .. .. 10 433,859 576,102

4,006,519 4,379,820
PROFIT/(LOSS) BEFORE TAX (166,519) (529,695)
Provision for tax
Current tax .. .. — —
Deferred tax (net) .. .. 16,299 70,645

16,299 70,645
PROFIT/(LOSS) AFTER TAX (182,818) (600,340)
Balance of profit brought forward .. .. 2,029,571 2,629,911

Balance carried forward .. .. 1,846,753 2,029,571
Basic & Diluted Earnings per Share of Rs. 10/- each (17.92) (58.86)
(Refer note no. 5)

Notes on Accounts . . .. .. 11
As per our report of even date attached K. VENKATRAMAN Chairman

For DELOITTE HASKINS & SELLS S. BASU Director
K. A. KATKI
Partner
53
Schedules to Balance Sheet & Profit & Loss Account

As at As at
Rupees Rupees
1. CAPITAL
Authorised:
50,000 Equity Shares of Rs. 10/- each .``. .. .. 500,000 500,000
10,200 Equity Shares of Rs. 10/- each fully paid-up .``. .. 102,000 102,000
Of the above shares, 5,100 Equity shares are allotted as fully paid-up
by way of bonus shares by capitalisation of surplus in profit & loss account
(All the above shares are held by the
Holding Company — Fulford (India) Limited & its nominee)
2. RESERVES & SURPLUS
Surplus as per Profit and Loss Account:
Balance as per last balance sheet .. .. .. 1,978,571 2.629,911
Less: Capitalised towards issue of bonus shares — 51,000
1,978,571 2,578,911
Add: Deficit as per Profit & Loss Account .. .. .. (182,818) (600,340)
1,795,753 1,978,571
3. SECURED LOANS
From bank (secured by hypothecation of machinery) .. .. 1,128,313 1,730,776
4. FIXED ASSETS
GROSS BLOCK NET BLOCK

AT COST ACCUMULATED DEPRECIATION WRITTEN DOWN
VALUE
As at As at Upto Depreciation Upto As at
January 1st, Additions December 31st, January 1st, for the year December 31st, 31st December,
Particulars 2003 2003 2003 2003 2003 2002
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
Owned Assets :
Machinery and
equipments 3,289,172 — 3,289,172 577,126 493,376 1,070,502 2,218,670 2,712,046
Assets acquired under
Finance Lease :
Machinery and
equipments 2,514,058 — 2,514,058 8,35,724 502,536 1,338,260 1,175,798 1,678,334
Total 5,803,230 — 5,803,230 1,412,850 995,912 2,408,762 3,394,468
Previous year total 5,803,230 — 5,803,230 416,938 995,912 1,412,850 4,390,380

With Scheduled bank in
Current Account .. .. .. .. .. 49,089 355,630
49,089 355,630
6. LOANS AND ADVANCES — (Unsecured, Considered good)
Advances recoverable in cash or in kind or for value to be received 222,235 228,835
Deposits .. .. .. .. .. 386,940 386,940
Advance tax paid (net of provisions) .. .. .. 498,148 418,788
1,107,323 1,034,563
Advances recoverable in cash or in kind for value to be received includes:

a) amount recoverable from Fulford (India) Ltd., a holding company,
Rs. Nil (previous year Rs. Nil)
maximum amount due during the year Rs. 1,93,940 (Previous year Rs. 4,01,000)
Other Liabilities .. .. .. .. .. 69,005 60,750
69,005 60,750
54

Rupees Rupees
8. OTHER INCOME
Insurance Claims .. .. .. .. .. — 10,125
— 10,125
9. OPERATING & OTHER EXPENSES
Electricity .. .. .. .. .. .. 336,000 336,000

Rent (Including Lease Rental) .. .. .. .. 1,221,988 1,222,128
Insurance .. .. .. .. .. .. 21,009 49,740
Deputation .. .. .. .. .. .. 900,000 900,000

Water .. .. .. .. .. .. 18,000 18,000
Professional Services .. .. .. .. .. — 201,985

Sales Tax on Lease Rent . . .. .. .. .. 59,544 59,548
Miscellaneous Expenses . . .. .. .. .. 6,707 7,280

Auditors’ remuneration - Audit Fees . . .. .. .. 13,500 13,125
2,576,748 2,807,806
10. INTEREST
Lease .. .. .. .. .. .. 261,442 325,691
Term Loan .. .. .. .. .. .. 172,417 250,411

433,859 576,102

A. Significant Accounting Policies
(1) Basis of Accounting

The accounts have been prepared under historical cost concept on an accrual basis.
(2) Use of estimates

The presentation of financial statements in conformity with the generally accepted accounting principles require estimates
and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial
statement and the reported amount of revenues and expenses during the reporting period. Difference between the actual
result and estimates are recognised in the period in which the results are known materialised.
(3) Fixed Assets and Depreciation

discarded/demolished during the year is provided from/upto the date on which the asset is acquired/sold/discarded/
demolished. Fixed assets are depreciated on Straight Line Method over their estimated useful lives. (Depreciation (%)
used: Machinery & Equipments 15). Assets costing less than Rs. 5,000/- per item are depreciated at 100% in the year of
purchase. A nominal value of Re. 1/- is assigned to fully depreciated assets.
Cost of Assets acquired under finance lease after April 1, 2001 is amortised over the period of lease.
55

(4) Borrowing Cost
(5) Foreign Currency Transactions
(i) Transactions in foreign currency are recorded at the exchange rate prevailing at the time of occurrence of the
transaction.
Any exchange differences arising on such transactions, are dealt with in the Profit and Loss Account (except those
relating to acquisition of fixed assets which are adjusted to the cost of the asset.)
(6) Lease
In case of assets taken on lease prior to April 1, 2001, lease rent paid is charged to profit & loss account. Assets taken
on finance lease after April 1, 2001, have been capitalised in accordance with AS-19 issued by the Institute of Chartered
Accountants of India.
(7) Taxation
Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance
with relevant tax regulations. Deferred tax is recognised for all timing differences between accounting income and taxable
income and is quantified using substantially enacted tax rates as at the balance sheet date.
Deferred tax assets are recognised where realisation is reasonably certain and are reviewed for the appropriateness of
their respective comparative values at each balance sheet date.
B. Notes on Accounts
(1) Contingent liabilities:
Claims against the company not acknowledged as debts pertaining to interest on lease Rs. 86,494 (previous year Rs. Nil)
(2) The Board of Directors of the company at their meeting held on October 20, 2003 decided to amalgamate the company with
its holding company - Fulford (India) Limited, effective January 1, 2004. Pursuant to this, Fulford (India) Limited has filed a
scheme of amalgamation with the Stock Exchange, Mumbai, for its approval.
(3) Reconciliation of Minimum Lease Payments and their Present Value as at the balance sheet date.
2003 2002
Rupees Rupees
Minimum Lease Payments 1,654,250 2,378,299
Less: Present Value of Minimum Lease Payments 885,342 1,393,002
Unexpired Finance Charges 768,908 985,297
2003 2002
Minimum Present Minimum Present
Lease Value Lease Value
Payments Payments
Not later than one year 724,049 429,287 724,049 507,660
Later than one year and not later than five years 930,201 456,055 1,654,250 885,342
Later than five years — — — —
(4) Taxation:
a) As the company has incurred book losses and tax losses during the year, the company does not have any liability
towards current taxation for the year.
b) In compliance with Accounting Standard (AS) 22 “Accounting for taxes on income”, the company has recognised net
deferred tax of Rs. 16,299/- in the profit and loss account for the year. The break-up of Deferred tax asset/(liability) into
major components as at the year end is as under.
2003 2002
Rupees Rupees
Lease accounting effect (Deferred Tax Asset) 88,119 75,594
Less: Book/Tax depreciation difference (Deferred Tax Liability) 168,290 139,466
(80,171) (63,872)
56

(5) Earnings per share calculation: (Figures in Rupees unless otherwise specified)
2003 2002
Loss used as numerator in calculating basic/diluted Earnings per share (182,818) (600,340)
Number of equity shares (Face value Rs. 10/-) 10,200 10,200

Earnings per share (Basic & diluted) (17.92) (58.86)
(6) Expenditure in foreign currency: Professional Fees Rs. Nil (previous year Rs. 1,96,595/-).
(7) Amount due to Small Scale Industrial Undertakings Rs. Nil (Previous year Rs. Nil)
(8) Disclosures required under Schedule VI - Part II - Para 4 are stated to the extent applicable to the company.
(9) Figures for the previous year have been regrouped and/or reclassified, wherever necessary, to conform with the current year’s
classification.
As per our report of even date attached Signatures to Schedules 1 to 11

K. VENKATRAMAN Chairman
K. A. KATKI
Partner S. BASU Director
57

Additional information pursuant to Provisions of Part IV of Schedule VI to the Companies Act, 1956
Registration No. : 53893 of 1989
State Code : 11

Public Issue : —
Rights Issue : —
Bonus Issue : —

Total Assets : 4551
Sources of Funds
Secured Loans : 1128
Unsecured Loans : —
Net Fixed Assets : 3394
Investments : —
Net Current Assets : (368)*
* Includes Deferred Tax Asset — (80)

* Includes Lease Obligation — (1376)

Total Income : 3840
Total Expenditure : 4007
Profit Before Tax (P.B.T.) : (167)
Profit After Tax (P.A.T.) : (183)
Earnings Per Share (Rs.) : (17.92)
Dividend Rate (%) : —
V. Generic Names of Principal Products/Services of the Company

Item Code No. : —
Product Description : Analytical services
K. VENKATRAMAN
58
Consolidated Financial Statements of Fulford (India) Limited Group
Auditors’ Report
To The Board of Directors of Fulford (India) Limited
on the Consolidated Financial Statements of Fulford (India) Ltd. Group
1. We have audited the attached consolidated balance sheet of Fulford (India) Limited Group as at
December 31, 2003, and also the consolidated profit and loss account and the consolidated cash flow
statement for the year ended on that date annexed thereto. These financial statements are the
responsibility of Fulford (India) Limited’s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those
the financial statements are free of material misstatement. An audit includes examining, on a test
3. We report that the consolidated financial statements have been prepared by Fulford (India) Limited’s
management in accordance with the requirements of Accounting Standard (AS) 21, Consolidated
Financial Statements, issued by the Institute of Chartered Accountants of India.
4. Ouf of the remunerafion paid to the Managing Director of the company as referred to in Note
No. 10 of Schedule 18 annexed to and forming part of the holding company’s financial statements,
an amount of Rs. Rs.28,84,635/- is subject to approval of the Central Government.
5. Demand of Rs. 194.62 lakhs for Drug Price Equalisation Account as referred to in Note no.
B.1.(e) of Schedule 18 annexed to and forming part of the holding company’s financial statements,
is contested by the company in the High Court and hence no provision has been made in the
accounts. As per the Supreme Court’s directions the company has deposited a sum of Rs. 50
lakhs pending the disposal of the matter by the High Court and the same has been shown
under “Loans and Advances - Deposits”.
6. In our opinion and to the best of our information and according to the explanations given to us, and
subject to our remarks in paragraphs 4 and 5 above, the consolidated financial statements give a true
and fair view in conformity with the accounting principles generally accepted in India:
a. in the case of the consolidated balance sheet, of the state of affairs of Fulford (India) Limited
Group as at December 31, 2003;
b. in the case of the consolidated profit and loss account, of the profit for the year ended on that
date and
c. in the case of the consolidated cash flow statement, of the cash flows for the year ended on that
date.

N. P. Sarda
(Partner)
Mumbai, March 8, 2004 Membership No.: 9544
59
Balance Sheet
SOURCES OF FUNDS
Shareholders’ Funds
Capital .. .. .. 1 32,000,000 32,000,000
Reserves and surplus .. .. 2 102,925,021 48,877,135
134,925,021 80,877,135
Loan Funds
Secured loans .. .. .. 3 1,128,313 37,516,310
Unsecured loans . . .. .. 4 70,720,506 121,330,280
71,848,819 158,846,590
Lease Obligation .. .. .. 1,375,638 1,844,604
(Payable within one year Rs. 5,44,605;
previous year Rs. 4,68,966)
Total 208,149,478 241,568,329
Fixed assets .. .. .. 5
Gross block .. .. .. 62,990,193 59,161,062
Less: Depreciation .. .. 35,004,510 32,381,869
Net block .. .. .. 27,985,683 26,779,193
Add: Capital Work in Progress (Including — 27,985,683 4,001,618 30,780,811
advances on Capital Account)
Deferred tax assets (net) .. .. 15,602,544 7,456,959
Current assets, loans and advances

Inventories .. .. . . 6 170,593,688 202,237,602
Sundry debtors . . .. . . 7 141,599,562 73,844,872
Cash and bank balances . . . . 8 43,461,596 6,468,317
Loans and advances .. . . 9 30,325,906 45,998,448
385,980,752 328,549,239
Less: Current liabilities and provisions
Liabilities .. .. .. 10 177,143,612 99,364,781
Provisions .. .. .. 11 44,275,889 25,853,899
221,419,501 125,218,680
Net current assets 164,561,251 203,330,559
Profit & Loss Account. . .. .. 12 — —
(Debit Balance)
Total 208,149,478 241,568,329


R. A. SHAH Chairman
}
D. C. SHROFF
N. P. SARDA K. D. SHAH Directors
Partner
K. J. KAUL
Usha Ramdoss
Mumbai, March 8, 2004. Company Secretary Mumbai, March 5, 2004
60

Year ended December 31, 2003 Year ended December 31, 2002
INCOME
Sales (Gross) .. .. .. 1,305,053,390 946,967,536
Less: Excise Duty .. .. .. 32,191,230 35,009,999
Sales (Net) .. .. .. 1,272,862,160 911,957,537
Other income .. .. .. 13 5,376,239 53,584,831
1,278,238,399 965,542,368
EXPENDITURE
Cost of materials/goods .. .. 14 730,410,825 604,891,560
Personnel expenses .. .. .. 15 148,120,146 132,791,588
Operating and other expenses .. .. 16 317,874,406 276,902,405
Depreciation .. .. .. 6,704,328 5,828,411
Interest .. .. .. 16,116,541 21,640,715
1,219,226,246 1,042,054,679
PROFIT/(LOSS) BEFORE TAX .. .. 59,012,153 (76,512,311)
Provision for Tax

Current tax .. .. .. 8,000,000 100,000
Deferred tax credit (net) .. .. (8,145,585) 70,645
(145,585) 170,645
PROFIT AFTER TAX .. .. .. 59,157,738 (76,682,956)
Tax adjustments for prior years . . .. 2,110,148 —
Balance of (loss)/profit brought forward .. (60,605,334) 16,077,622
Less: Adjusted against General Reserve .. (60,605,334) —
— 16,077,622
AMOUNT AVAILABLE FOR APPROPRIATION . . 61,267,886 (60,605,334)
APPROPRIATIONS
Proposed dividend .. .. .. 6,400,000 —
Corporate tax on dividend .. .. 820,000 —
Transfer to general reserve .. .. 4,700,000 —
Balance carried forward. . .. .. 49,347,886 (60,605,334)
Total 61,267,886 (60,605,334)
Basic & Diluted Earnings Per Share of Rs. 10/- each 18.49 (23.96)
(See note no. B. 6 in schedule 17)

R. A. SHAH Chairman
}
D. C. SHROFF
Partner
K. J. KAUL
Usha Ramdoss
Mumbai, March 8, 2004 Company Secretary Mumbai, March 5, 2004
61
Cash Flow Statement for the year ended December 31, 2003
A Cash flow from operating activities :
Net Profit before tax and Extraordinary items 59,012,153 (76,512,311)
ADJUSTMENTS FOR
Depreciation . . .. .. .. .. .. .. 6,704,328 5,828,411
Interest Paid . . .. .. .. .. .. .. 16,116,541 21,640,715
(Profit)/loss on sale of assets .. .. .. .. (734,980) (32,217,850)
22,085,889 (4,748,724)
Operating Profit before working Capital . . .. .. .. 81,098,042 (81,261,035)
Adjustment for
(Increase)/decrease in Trade and Other Receivables . . (52,082,148) 53,154,293
(Increase)/decrease in Inventories . . .. .. .. 31,643,914 100,543,757
(Increase)/decrease in Deferred Miscellaneous Expenditure — 10,581,533
Lease Obligation .. .. .. .. .. .. (468,966) (403,833)
Increase/(decrease) in Trade and Other Payables .. 87,794,531 66,887,331 (63,947,565) 99,928,185
Cash generated from Operations . . .. .. .. .. 147,985,373 18,667,150
Direct Taxes paid/ (received) .. .. .. .. .. 4,703,562 (3,823,750)
Net Cash from operating activities .. .. .. .. 143,281,811 22,490,900
B Cash Flow from investing activities
Purchase of fixed assets . . .. .. .. .. .. (4,438,345) (21,142,487)
Sale of fixed assets. . .. .. .. .. .. .. 1,264,125 33,849,419
Net Cash used in investing activities .. .. .. .. (3,174,220) 12,706,932
C Cash flow from financing activities
Repayment of secured loans .. . . . . . . . . (36,387,997) (10,095,592)
Unsecured Loans . . .. .. . . . . . . . . (50,609,774) 682,358
Dividend paid. . .. .. .. . . . . . . . . — (4,800,000)
Interest paid . . .. .. .. . . . . . . . . (16,116,541) (21,640,715)
Net Cash used in Financing activities .. .. .. .. (103,114,312) (35,853,949)
Net increase/(decrease) in cash and cash equivalents (A+B+C) 36,993,279 (656,117)
Cash and cash equivalents as at 01.01.03 .. .. .. 6,468,317 7,124,434

Cash and cash equivalents as at 31.12.03 .. .. .. 43,461,596 6,468,317
Net increase/(decrease) in cash and cash equivalents .. 36,993,279 (656,117)
Note: The above cash flow statement has been prepared under the “Indirect Method” as set out in Accounting Standard 3 on Cash
Flow Statements issued by the Institute of Chartered Accountants of India.

R. A. SHAH Chairman
}
D. C. SHROFF
Partner
K. J. KAUL
Usha Ramdoss
Mumbai, March 8, 2004 Company Secretary Mumbai, March 5, 2004
62

Rupees Rupees
1. CAPITAL
Authorised:
50,00,000 Equity Shares of Rs. 10/- each. . 50,000,000 50,000,000

32,00,000 Equity Shares of Rs.10/- each fully paid-up 32,000,000 32,000,000
Of the above shares, 29,10,000 Equity Shares are allotted

as fully paid-up by way of bonus shares by capitalisation
of general reserve.
2. RESERVES AND SURPLUS

General Reserve :
Balance as per last Balance Sheet .. .. 109,431,469 109,482,469
Less : Debit balance in Profit & Loss Account adjusted 60,605,334 —
Less : Transfer to Consolidation Reserve — 51,000
Add : Transfer from Profit & Loss Account .. 4,700,000 —
53,526,135 109,431,469
Consolidation Reserve :
Balance as per last balance sheet .. .. 51,000 —
Add: Transfer from General Reserve .. .. — 51,000
51,000 51,000
Balance as per Profit & Loss Account .. .. 49,347,886 —
Less: Debit balance in Profit & Loss account
as per contra (Schedule 12) .. .. — 60,605,334
102,925,021 48,877,135
3. SECURED LOANS
From banks (secured by hypothecation of

inventories, book debts and fixed assets) 1,128,313 37,516,310
4. UNSECURED LOANS
Security deposits from C & F agents .. .. 67,142,727 114,542,100

Other deposits .. .. 3,577,779 6,788,180
70,720,506 121,330,280
63
64
5 FIXED ASSETS GROSS BLOCK
ACCUMULATED DEPRECIATION NET BLOCK
WRITTEN DOWN
AT COST VALUE
As at As at Upto Depreciation Adjustment Upto As at
January 1st, Additions/ (Deductions)/ December 31st January 1st for the for Sale December 31st December 31st
Particulars 2003 Transfer Transfer 2003 2003 year 2003 2003 2002
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
Buildings .. .. .. 652,000 — — 652,000 651,998 — — 651,998 2 2
Leasehold improvements. . .. 3,515,636 80,275 — 3,595,911 220,240 359,481 — 579,721 3,016,190 3,295,396
Machinery and equipments .. 6,328,539 1,912,646 (10,633) 8,230,552 2,025,109 1,014,272 (9,261) 3,030,120 5,200,432 4,303,430
Utilities .. .. .. 4,549,706 13,102 (10,608) 4,552,200 3,160,900 351,090 (10,607) 3,501,383 1,050,817 1,388,806
Office equipments,
furniture and fixtures .. .. 33,013,786 557,380 (1,175,802) 32,395,364 19,429,939 2,806,658 (931,812) 21,304,785 11,090,579 13,583,847
Vehicles .. .. .. 8,587,337 5,876,560 (3,413,789) 11,050,108 6,057,959 1,670,291 (3,130,007) 4,598,243 6,451,865 2,529,378
Assets acquired under
Finance Lease:
Machinery and equipments .. 2,514,058 — — 2,514,058 835,724 502,536 — 1,338,260 1,175,798 1,678,334
Total .. .. .. 59,161,062 8,439,963 (4,610,832) 62,990,193 32,381,869 6,704,328 (4,081,687) 35,004,510 27,985,683 26,779,193
(Contd.)
Previous year total .. .. 57,126,312 17,140,869 (15,106,119) 59,161,062 40,028,008 5,828,411 (13,474,550) 32,381,869 26,779,193 —
Capital Work in Progress (Including

advances on Capital Account) — 4,001,618
27,985,683 30,780,811
1. Buildings include:
a) Cost of flat of Rs.6,52,000 acquired in 1978 in respect of which Society/Condominium is yet to be formed and conveyance deed to be executed in its favour.

6 INVENTORIES
Raw and packing materials on hand and in transit 57,609,465 51,776,659

Work-in-process .. .. .. .. .. 33,700 419,480
Finished goods .. .. .. .. .. 112,950,523 150,041,463

Total .. 170,593,688 202,237,602
7 SUNDRY DEBTORS
(UNSECURED)
Debts outstanding for a period exceeding six months:
Considered good .. .. .. .. .. 279,040 689,866
Considered doubtful. . .. .. .. .. 3,047,686 3,036,713

3,326,726 3,726,579
Less: Provision for doubtful debts . . .. 3,047,686 3,036,713
279,040 689,866
Others Debts:
Considered good .. .. .. .. 141,320,522 73,155,006
Total .. 141,599,562 73,844,872
8 CASH AND BANK BALANCES

Cash (including cheques on hand) .. .. 4,124,428 4,584,824
Balances with scheduled banks in :

Current account .. .. .. .. .. 1,567,168 1,513,493
Deposit account .. .. .. .. .. 37,770,000 370,000

Total .. 43,461,596 6,468,317
9 LOANS AND ADVANCES

(Unsecured, Considered good)
Advances recoverable in cash or in kind or for

value to be received. . .. .. .. .. 9,517,230 23,871,743
Deposits (See Note No. B.1(e)) . . .. .. 17,321,205 17,163,349

Balance with excise authorities .. .. .. 3,487,471 4,963,356
Total .. 30,325,906 45,998,448
Advances recoverable in cash or in kind for value to be received includes:

amount due in respect of housing loan to a Director Rs.10,76,571 (Previous year Rs.12,56,000); maximum amount due during the
year Rs.12,56,000. (Previous year Rs.12,56,000).
65

Rupees Rupees
10 CURRENT LIABILITIES
Sundry creditors .. .. .. .. .. .. .. 94,363,044 54,370,053

Unpaid dividend .. .. .. .. .. .. .. 275,324 341,920
Unpaid matured deposits . . .. .. .. .. .. 35,000 40,000

Other liabilities .. .. .. .. .. .. .. 82,470,244 44,612,808
Total .. 177,143,612 99,364,781
11 PROVISIONS
Taxation less payments .. .. .. .. .. .. 11,281,448 10,095,158
Leave encashment . . .. .. .. .. .. .. 14,076,056 15,758,741

Gratuity .. .. .. .. .. .. .. .. 11,698,385 —
Proposed dividend . . .. .. .. .. .. .. 6,400,000 —

Corporate tax on dividend . . .. .. .. .. .. 820,000 —
Total .. 44,275,889 25,853,899
12. PROFIT & LOSS ACCOUNT (DEBIT BALANCE)
Debit balance in Profit & Loss account . . .. .. .. — 60,605,334

Less: Shown as deduction from General Reserve as per contra
(Schedule 2) . . .. .. .. .. .. .. — 60,605,334
Total .. — —
66
Schedules to Profit and Loss Account

Rupees Rupees
13. OTHER INCOME
Interest on Staff Loan .. .. .. .. .. .. 20,354 54,698
Interest on delayed payments from customers . . .. .. 364,622 890,368
Interest on deposits (tax deducted at source Rs. 56,803; .. 303,885 63,134
Previous year Rs. 7,231)
Interest others (tax deducted at source Rs. 57,632; .. .. 514,082 2,521,653
Previous year Rs. 1,05,785)
Profit on sale of fixed assets (net) .. .. .. .. 734,980 32,217,850
Miscellaneous income .. .. .. .. .. .. 3,438,316 17,837,128
Total .. 5,376,239 53,584,831
14. COST OF MATERIALS/GOODS

Opening stocks:
Raw and packing materials . . .. .. .. .. 51,776,659 37,030,052
Work in process. . .. .. .. .. .. .. 419,480 11,283,778

Finished Goods. . .. .. .. .. .. .. 150,041,463 254,467,529
202,237,602 302,781,359
Purchases:
Finished Goods .. .. .. .. .. .. 596,447,567 388,538,295
698,766,911 504,347,803
901,004,513 807,129,162
Less: Closing stocks:

Work in process .. .. .. .. .. .. 33,700 419,480
Finished Goods. . .. .. .. .. .. .. 112,950,523 150,041,463
170,593,688 202,237,602
Total .. 730,410,825 604,891,560
15. PERSONNEL EXPENSES
Salaries, wages,bonus and commission . . .. .. .. 112,278,059 97,445,365

Contribution to provident and other funds .. .. .. 28,129,772 15,734,722
Staff welfare expenses .. .. .. .. .. .. 7,712,315 9,029,968

Amortisation of expenditure under V.R.S. .. .. .. — 10,581,533
Total .. 148,120,146 132,791,588
67
Schedules to Profit and Loss Account (Contd.)
16. OPERATING AND OTHER EXPENSES

Processing charges. . .. .. .. .. 15,127,739 26,805,150
Stores and spares . . .. .. .. .. 2,946,026 2,972,581
Power and fuel .. .. .. .. .. 1,629,816 3,150,231
Rent .. .. .. .. .. 9,838,853 8,031,951
Repairs and maintenance to :
Machinery and utilities. . .. .. .. 1,260,488 1,699,598
Buildings .. .. .. .. .. 108,918 364,074
Others .. .. .. .. .. 655,700 1,264,821
2,025,106 3,328,493
Insurance .. .. .. .. .. 2,509,005 3,427,085
Rates and taxes .. .. .. .. .. 2,481,358 3,321,859
Excise duty and sales tax . . .. .. .. 124,045,088 78,378,005
Freight and forwarding related expenses. . .. 13,980,579 15,854,062
Promotion and information expenses .. .. 22,222,904 23,119,710
Commission to agents .. .. .. .. 23,932,770 20,259,056
Travelling & conveyance . . .. .. .. 54,920,507 50,859,724
Auditors’ remuneration:
Audit fees .. .. .. .. .. 943,960 921,225
Tax audit fees . . .. .. .. .. 108,000 105,000
Out-of-pocket expenses .. .. .. 30,000 30,000
1,081,960 1,056,225
Directors’ sitting fees & commission .. .. 326,000 85,500
Bad debts written off: .. .. .. .. 535,407 146,330
Less: Adjusted against provision for earlier years 535,407 146,330
— —
Provision for doubtful debts .. .. .. 546,380 —
Miscellaneous .. .. .. .. .. 40,260,315 36,252,773
Total .. 317,874,406 276,902,405
68

17 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
A Significant Accounting Policies
1 Basis of Consolidation
(i) Basis of preparation
The consolidated financial statements are prepared in accordance with Accounting Standard 21 on Consolidated Financial
Statements issued by the Institute of Chartered Accountants of India.
(ii) Principles of consolidation
The consolidated financial statements comprise the financial statements of Fulford (India) Limited and its 100% owned
subsidiaries incorporated in India viz. Schering Plough (India) Pvt. Ltd. and Wellnex Pharmaceuticals Pvt. Ltd. The
financial statements of all the three companies are prepared according to uniform accounting policies, in accordance with
generally accepted accounting principles in India. The effects of inter-company transactions between the above mentioned
companies are eliminated on consolidation.
2 Basis of Accounting
The Company follows accrual method of accounting. Assets and Liabilities are recorded at historical cost.
3 Use of estimates
The presentation of financial statements in conformity with the generally accepted accounting principles require estimates and
assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the
reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates
are recognised in the period in which the results are known materialised.
4 Sales
Gross Sales in Profit and Loss Account is stated inclusive of excise duty and sales tax.
5 Fixed Assets and Depreciation
discarded/demolished during the year is provided from/upto the date on which the asset is acquired/sold/discarded/demolished.
Fixed assets are depreciated on Straight Line Method over their estimated useful lives. (Depreciation (%) used: Building 5/10;
Leasehold improvements, Furniture & Fixtures 10; Machinery & Equipments, Utilities, Office Equipments 10/15/20; Vehicles
20; Computers 20/33.33). Assets costing less than Rs. 5,000/- per item are depreciated at 100% in the year of purchase. A
nominal value of Re. 1/- is assigned to fully depreciated assets.
6 Lease
In accordance with Accounting Standard (AS) 19 on “Leases” issued by the Institute of Chartered Accountants of India, rentals
paid under operating leases are charged to Profit and Loss Account and Assets taken on finance lease after April 1, 2001,
have been capitalised.
7 Inventories
Inventories are valued at lower of historical cost or net realisable value. Cost is arrived at on First in First out basis and cost
of finished goods and work-in-process includes appropriate allocation of production overheads.
8 Excise duty
Excise Duty paid/ payable on goods manufactured by the Company and remaining in inventory at the year end is included as
a part of inventory valuation.
9 Borrowing Cost
10 Foreign Currency Transactions
(i) Transactions in foreign currency are recorded at the exchange rate prevailing at the time of occurence of the transaction.
Any exchange differences arising on such transactions, are dealt with in the Profit and Loss Account (except those
relating to acquisition of fixed assets which are adjusted to the cost of the asset)
11 Treatment of Retirement Benefits
The Company has various Schemes of Retirement Benefits such as Provident Fund, Superannuation Fund and Gratuity duly
recognised by the Income Tax Authorities. Company’s contribution in respect of Superannuation, Gratuity and Provident Fund
is charged to revenue. Contribution in respect of Gratuity is paid to Life Insurance Corporation of India based on the actuarial
valuation computed by it. The company also provides for accumulated privilege leave available on retirement to its employees
based on actuarial valuation.
12 Taxation
Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with
relevant tax regulations. Deferred tax is recognised for all timing differences between accounting income and taxable income
and is quantified using substantially enacted tax rates as at the balance sheet date.
Deferred tax assets are recognised where realisation is reasonably certain and are reviewed for the appropriateness of their
respective comparative values at each balance sheet date.
69

(Figures in Rupees
B NOTES ON ACCOUNTS : unless otherwise specified)
December 31st, December 31st,
2003 2002
1 Contingent liabilities:
(a) Claims against the Company not acknowledged as debts. . .. .. .. .. 127,500 127,500
(b) Guarantee given by the Company to Housing Development Finance Corporation Ltd.
against housing loans to employees. . .. .. .. .. .. .. .. — 12,887
(c) Other guarantees issued by banks on behalf of the Company (margin money issued
guarantees Rs. 2,58,000; previous year Rs. 68,235) .. .. .. .. .. 1,492,722 170,000
(d) Guarantee given to Bank & NBFC on behalf of its subsidiary company . . .. .. 4,158,430 8,700,000
(e) The Government of India had made a demand for payment of Rs.194.62 lacs into the Drugs Prices Equalisation Account (DPEA) in
respect of prior years ( April 1,1979 to March 1,1984 ). The Company has contested this demand. Per the interim order of the Supreme
Court a sum of Rs. 50 lakhs was deposited into the DPEA. The Company’s Writ Petition has been admitted by the High Court and is
pending for final hearing and disposal. As the demand is contested by the Company, no provision has been made in respect thereof.
The sum of Rs.50 lacs deposited pursuant to the Supreme Court’s Order has been shown under “Loans andAdvances-Deposits”.
(f) Claims against the Company not acknowledged as debts in Excise matters .. .. 448,539 —
(g) Claims against the Company not acknowledged as debts in Sales tax matters . . .. 1,686,026 —
(h) Claims against the company not acknowledged as debts pertaining to interest on lease . . 86,494 —
2 The company had received show-cause notices from excise authorities in earlier years for matters relating to classification dispute for two of its
products. The company had disputed the show-cause notices. However, the adjudicating authority turned down our representations and raised
a demand of Rs. 1,77,40,717/- together with penalty & interest. The company has filed an appeal with the higher Appellate authority against
this demand for which orders are awaited. Pending outcome of the appeal, the company has provided for Rs. 1,77,40,717 (Excise duty Rs.
99,48,231; Penalty Rs. 25,69,665; Interest Rs. 52,22,821) in the accounts towards excise duty, penalty & interest. These amounts have been
included under the head of “Excise duty & sales tax” in Schedule 16.
3 The company has in the current year provided for Rs. 1,34,55,235/- as additional gratuity liability. This is based on intimation received from Life
Insurance Corporation of India due to heavy withdrawals from the fund during past few years. This amount has been included under the head
of “Contribution to provident and other funds” in Schedule 15.
4 The Board of Directors of the company and Wellnex Pharmaceuticals Private Limited, have at their meetings held on October 16, 2003 and
October 20, 2003 respectively, decided to amalgamate Wellnex Pharmaceuticals Private Limited with the company, effective January, 1 2004.
Pursuant to this, the company has filed a scheme of amalgamation with the Stock Exchange, Mumbai, for its approval.
5 Taxation:
a) Current tax has been provided for the year in accordance with the provision of section 115JB of the Income Tax Act, 1961.
b) In compliance with Accounting Standard (AS) 22 “Accounting for taxes on income”, the company has recognised net deferred credit of
Rs. 81,61,884/- In the profit and loss account during the current period. The break-up of Deferred tax assets/(liability) into major
components as at the year end is as under.
Deferred Tax Liability
Depreciation (233,145) (139,466)
(233,145) (139,466)
Deferred Tax Assets
Voluntary Retirement Scheme 2,847,094 4,666,456
Debtors provision 1,093,357 1,115,992
Provision for expenses 10,269,681 -
Others 1,625,557 1,813,977
15,835,689 7,596,425
Deferred Tax Asset (Net) 15,602,544 7,456,959
6 Earnings per share calculation:

Earnings/(Loss) used as numerator in calculating basic/diluted Earnings per share 59,157,738 (76,682,956)
Number of equity shares (Face value Rs. 10/-) 3,200,000 3,200,000
Earnings per share (Basic & diluted) 18.49 (23.96)
7 The net exchange gain of Rs. 42,37,014 (previous year loss Rs 6,88,247) has been included in the profit & loss account for the year.
8 Past service gratuity liability has been provided for as per the actuarial valuation as at June 1, 2003 computed by the Life Insurance
Corporation of India.
The company has provided for accumulated privilege leave available on retirement to its employees based on actuarial valuation as at the year
end.
9 Figures for the previous year have been regrouped and / or reclassified, wherever necessary, to conform with current year’s classification.
As per our report of even date attached Signature to Schedules 1 to 17
For DELOITTE HASKINS & SELLS R.A. SHAH Chairman
N. P. SARDA
Partner
USHA RAMDOSS
D.C. SHROFF
K.D.SHAH
K.J.KAUL } Directors
Mumbai, March 8, 2004. Company Secretary Mumbai, March 5, 2004.
70
Fulford (India) Limited

Registered Office:
Attendance Slip
Eureka Towers, 8th Floor,
Malad (W), Mumbai - 400 064.
Ph.: 5698 3800, Fax: 5699 6375
PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE
OF THE MEETING HALL.
I hereby record my presence at the Fifty-sixth ANNUAL GENERAL MEETING held on Tuesday,,
20th April, 2004 at 11.00 a.m.
(IN BLOCK LETTERS)
NAME OF THE SHAREHOLDER/PROXY
SIGNATURE OF THE SHAREHOLDER/PROXY
Ledger Folio No./Client ID No. ........................ No. of Shares held ........................................

✁
TEAR HERE ✁
Fulford (India) Limited
Registered Office:
Eureka Towers, 8th Floor, Proxy
Malad (W), Mumbai - 400 064.
Ph.: 5698 3800, Fax: 5699 6375
Ledger Folio No./Client ID No. ..............................
I/We ..............................................................................................................................
of ............................................................................................................................................. being
a Member/Members of FULFORD (INDIA) LIMITED hereby appoint.........................................
of ................................................ (or failing him ..................................................................
of ................................................ or failing him ........................................................................
of ................................................ ) as my/our Proxy to attend and vote for me/us and
on my/our behalf at the Fifty-sixth Annual General Meeting of the Company to be held on
Tuesday, 20th April, 2004, at 11.00 a.m. and at any adjournment thereof.
AS WITNESS my/our hand/hands this ........................ day of .............................................. 2004.
Signed by the said................. Revenue ..............................................................

Stamp
Note: The Proxy must be deposited at the Registered Office of the Company at
Eureka Towers, 8th Floor, Mindspace, Link Road, Malad (W), Mumbai - 400 064.
not less than 48 hours before the time for holding the Meeting.
41

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FULFORD(INDIA)LIMITED

REGIONAL OFFICE*/C&F AGENTS

REGISTRARS AND SHARE TRANSFER AGENTS

By Order of the Board of Directors

PROFILE OF DIRECTORS BEING APPOINTED/ RE-APPOINTED

5. Schering-Plough (China) Limited, Bermuda Director & Vice President

Amount available for appropriation .................................. 6,14,66,417 (6,26,52,007)

2. Opportunities, Threats, Risks and Concerns

3. Internal control system and their adequacy

4. Material development on human resources/ industrial relations

Mr. R D Thapar, Mr. Raman Kapur and Mr. V.G. Athavale.

RELATED PARTY TRANSACTIONS

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

For and on behalf of the Board of Directors

3. Foreign Exchange Earnings and Outgo

The Company continues to explore various export markets.

(A) Total Foreign exchange earned 13.66

(B) Total Foreign exchange used:

(i) On import of raw materials/finished goods 3152.76

(ii) On import of capital goods, spares and components —

(iii) Expenditure in foreign currencies for business

(iv) Remittance during the year in foreign currency on

(v) Royalty and Technical know-how —

For and on behalf of the Board of Directors

Financial Calendar : January to December

First Quarter results : On or before April 30

Second Quarter results : On or before July 31

Third Quarter results : On or before October 31

Dividend Payment Date : On or after April 20, 2004

MARKET PRICE DATA:

Mumbai Stock Exchange

Month High Low

January 98.00 85.00

Fulford BSE Index

REGISTRAR AND TRANSFER AGENTS:

Demat 17,13,761 53.56

Physical 14,86,239 46.44

Total 32,00,000 100.00

FOR DELOITTE HASKINS & SELLS

For Deloitte Haskins & Sells

2. In respect of its fixed assets:

3. In respect of its inventories:

For Deloitte Haskins & Sells

Issued and Subscribed:

Of the above shares, 29,10,000 Equity Shares are allotted

2. RESERVES AND SURPLUS

Less : Debit balance in Profit & Loss Account

Add : Transfer from Profit & Loss Account .. 47,00,000 —

Less : Debit balance in Profit & Loss account as

Total .. 10,10,76,879 4,68,30,462

As at As at Upto Depreciation Adjustment Upto As at December 31,

Buildings .. .. .. 6,52,000 — — 6,52,000 6,51,998 — — 6,51,998 2 2

Office equipments, furniture

As at December 31, 2003 As at December 31, 2002

LONG TERM INVESTMENTS

Total .. 1,52,500 1,52,500

9. CASH AND BANK BALANCES

As at December 31, 2003 As at December 31, 2002

(Unsecured, considered good)