Wyeth Limited (the Company) was incorporated on 20th September, 1947
as Lederle Laboratories (India) Limited and was renamed as Cyanamid
India Limited on 31st October, 1962.
On 1st January, 1998, pursuant to a Scheme of Arrangement, the Company
transferred the Agricultural Products division to Cyanamid Agro
Limited. On the same day, pursuant to a Scheme of Amalgamation, the
assets, liabilities and reserves of Wyeth Laboratories Limited, John
Wyeth (India) Limited and Wyeth (India) Private Limited were
transferred to the Company with retrospective effect from 1st April,
1996 and the name of the Company was changed to Wyeth Lederle Limited.
On 1st April, 2003, pursuant to a Scheme of Amalgamation, the assets,
liabilities and reserves of Geoffrey Manners & Co. Limited were
transferred to the Company with retrospective effect from 1st April,
2002 and the name of the Company was changed to Wyeth Limited.
On 15th October, 2009, Wyeth, USA (Wyeth) merged with Wagner
Acquisition Corp., a direct wholly-owned subsidiary of Pfizer Inc.,
through a scheme of merger effected pursuant to and as per the
prevailing laws of the United States of America. As a result of the
merger, Pfizer Inc. is now the parent Company of Wyeth and hence the
ultimate parent of the Company.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs. 63.12 lakhs (Previous period Rs.
113.89 lakhs) after adjusting advances of Rs. 252.17 lakhs (Previous
period Rs. 78.84 lakhs).
3. Contingent Liabilities
(a) Disputed claims under the Drugs (Prices Control) Order, 1979
(i) Consequent to the Honble Supreme Court Judgements dated 10th
April, 1987 and 1st May, 1987 regarding price fixation under the Drugs
(Prices Control) Order, 1979, the Government of India (the
Government) made tentative demands against Cyanamid India Limited
(CIL), now known as Wyeth Limited of Rs. 492 lakhs and against
erstwhile John Wyeth (India) Limited (JWIL) of Rs. 166.87 lakhs for the
period ended 31st December, 1983 without disclosing the basis thereof.
CIL vide its letter dated 16th December, 1987 and JWIL vide its letter
dated 1st February, 1988 had disputed these liabilities inter- alia on
the grounds that the review as directed by the Honble Supreme Court
Judgements had not been completed. Subsequently, the Government on
public record, revised the demand for the said period ended 31st
December, 1983 to Rs. 389.06 lakhs for CIL and to Rs. 133.46 lakhs for
In May 1988, the Government appointed a Price Review Committee (Murthy
Committee) to consider revision of bulk drug prices from 1984 onwards.
After considerable deliberations, the Murthy Committee accepted some of
the claims of CIL and JWIL. Based on discussions with the Murthy
Committee during the review of prices effective 1984, and having regard
to all known facts and circumstances, CIL made a provision in the
accounts for the period ended March 1989 for Rs. 200 lakhs in respect
of the period 1981 to 1987. Out of this provision, CIL to show its good
faith and bonafides and without prejudice to its rights and
contentions, deposited a sum of Rs. 100 lakhs into the Drug Prices
Equalisation Account. JWIL had also under protest and without
prejudice to its rights and contentions deposited jointly with Geoffrey
Manners and Co. Limited (GM), a total sum of Rs. 45 lakhs into the Drug
Prices Equalisation Account. JWIL was given to understand that the
payment of Rs. 45 lakhs would be in full and final settlement of the
demands against GM and JWIL for the period 1981 to May 1987. A
provision of Rs. 40.50 lakhs has been made in the books of account.
In June 1990, CIL received a tentative demand from the Government of
Rs. 536.91 lakhs for the period 1981 to 1983 which was revised by the
Government vide its letter dated 12th June, 1991 to Rs. 490.47 lakhs
and JWIL received a demand of Rs. 177.67 lakhs for the period 1981 to
1983 [including approximately Rs. 22.03 lakhs for the period October
1983 to December 1983]. Both the companies once again disputed these
liabilities inter-alia on the grounds that previous submissions on
review against the price fixation orders have not been considered by
the Government. However, the Government made a further tentative demand
of Rs. 830.06 lakhs on CIL and Rs. 299.95 lakhs on JWIL for the period
January 1984 to November 1987. CIL and JWIL along with GM, submitted
representations to the Government contesting the demands and requested
the Government to dispose of all pending review applications as
directed by the Honble Supreme Court of India and as decided by the
Government in February 1988, before requesting companies to make
payments of any amount. Both companies also urged the Government that
the liability must be determined only after disposal of the review
applications in accordance with the directions given by the Honble
Supreme Court of India, and after giving due set offs or adjustments
for the period 1984 to 1987.
The Government vide its Notification dated 21st March, 1994,
constituted a Three Member Committee to determine the liabilities of
drug companies on the alleged overcharged amounts between 1981 and 1987
in accordance with the recommendations of the Murthy Committee and the
line of action as determined by the Government in 1990.
CIL has had several hearings before the said Committee wherein it made
its presentations and has been repeatedly reiterating its request for
disclosure of the basis and criteria for the prices fixed in 1981 for
their bulk drugs and formulations. The Committee disclosed some
selective data in respect of the price fixation of the bulk drugs which
has been disputed by CIL as incorrect, and CIL sought disclosure in
accordance with the Honble Supreme Court Judgement dated 10th April,
1987. CIL also requested the Committee to disclose the Murthy Committee
recommendations and the line of action determined by the Government in
1990 to enable it to make effective representation. The hearings before
the Drug Prices Liabilities Review Committee (DPLRC) have been
concluded. JWIL has submitted detailed written submissions to the said
Committee relating to the price fixation of the bulk drugs in 1981 and
also had a personal hearing thereafter in October 1995.
During the year ended 31st March, 2007, the Government of India raised
a revised demand of Rs. 347.52 lakhs (net of Rs. 45 lakhs paid as
deposit earlier) [as against the earlier demand of Rs. 477.62 lakhs
(including Rs. 45 lakhs paid as a deposit)], in respect of Benzathine
Penicillin G formulations along with interest thereon of Rs. 832.47
lakhs (calculated up to 31st August, 2006). The Company fled a Writ
Petition against the said demand and interest thereon in the Honble
Bombay High Court.
During the year ended 31st March, 2008, the Government of India raised
a further demand for interest of Rs. 3186.55 lakhs for the period of
8th June, 1990 to 2nd November, 2007 on the demand of Rs. 1320.52 lakhs
less Rs. 100 lakhs deposited earlier in respect of
De-Methyl-Chloro-Tetracycline Hydrochloride (DMCTC HCL) formulations.
The Company fled a Writ Petition disputing the said demand and interest
thereon in the Honble Bombay High Court.
The Honble Bombay High Court vide its interim orders dated 10th June,
2008 and 10th July, 2008 in the matters of
De-Methyl-Chloro-Tetracycline Hydrochloride and Benzathine Penicillin G
respectively, directed the Company to deposit the principal amounts and
furnish security for the interest thereon. Accordingly, the Company has
deposited the principal amounts aggregating to Rs. 1568.03 lakhs with
the Prothonotary & Senior Master, High Court, Bombay and furnished
corporate bonds for amounts aggregating to Rs. 4019.02 lakhs for
interest thereon in favour of the Prothonotary & Senior Master High
Court, Bombay. The matters are pending adjudication before the Honble
Bombay High Court.
Having regard to all relevant facts and circumstances, the Company has
considered it not necessary to revise the provision of Rs. 200 lakhs in
respect of the period 1981 to 1987 for the demands against CIL and the
provision of Rs. 40.50 lakhs in the books for the demands against JWIL.
The amount of provision so calculated by the Company is based on the
data derived from the records of the Company and understanding by the
management during discussions from time to time with the officials of
Government of India. The management of the Company is of the opinion
that the demands in respect of these cases are disputed and would not
exceed Rs. 245 lakhs being the amount paid for and/or provided in the
accounts of CIL and JWIL. Further, JWIL took over the business from
John Wyeth and Brother Limited, India Branch, effective 1st October,
1983. The liability, if any, pertaining to the period up to 30th
September, 1983 will be to the account of John Wyeth and Brother
Limited, India Branch.
(ii) In April 1985, the Government issued a Show Cause Notice to the
Company directing it to pay into the Drug Prices Equalisation Account
(DPEA) an amount of Rs. 90.05 lakhs on the ground that the prices of
two bulk drugs, namely Dexamethasone 21 Phosphate and Dexamethasone
Pure allowed to the Company in the formulations Wymesone injections and
Wymesone tablets respectively were higher than the landed cost of
The Company replied to the said Show Cause Notice and requested for
certain clarifications. There was no response from the Government till
1996. Thereafter, the Company submitted the information called for by
the Department from time to time. A personal hearing was granted to the
Company on 2nd July, 1996 and 13th February, 1997 by the Three Member
Committee appointed by the Government.
By an Order dated 27th August, 1998, the Government rejected all the
submissions made by the Company and called upon it to pay Rs. 90.05
lakhs and interest of Rs. 187.34 lakhs (calculated up to 25th August,
1998) into the DPEA. Being aggrieved with the findings/recommendations
of the Three Member Committee and the Order/demand notice issued by the
Government, the Company fled a Writ Petition in the Honble Bombay High
Court challenging the demand notice as well as findings of the said
The Honble Bombay High Court vide its Order dated 24th March, 1999
admitted the Writ Petition and granted a stay against the operation,
implementation and effect of the Government Order dated 27th August,
1998 subject to the Company depositing 50% of the principal amount of
demand (Rs. 90.05 lakhs) within 6 weeks from the date of the Order.
Accordingly, the Company has deposited Rs. 45 lakhs on 4th May, 1999.
The matter is pending final adjudication in the Honble Bombay High
(iii) The Government issued two notices dated 27th March, 1995 and 10th
October, 1995 under the Drugs (Prices Control) Order (DPCO) calling
upon the Company to pay Rs. 53.90 lakhs being the difference between
the price of the bulk drug Amoxycillin Trihydrate allowed in the
formulation prices thereof and the actual procurement price paid by the
Company during the currency of DPCO 1979.
The Organisation of Pharmaceutical Producers of India (OPPI) along with
another association, Indian Drug Manufacturers Association (IDMA) fled
a Writ Petition in 1996 in the Honble Bombay High Court challenging
the action of the Government in attempting to recover the amount for
the first time under the provisions of DPCO 1995, for the period
covered by DPCO 1979. The Honble Bombay High Court vide its Orders
dated 16th December, 1996 and 30th June, 1997 restrained the Government
from taking any action whatsoever against the members of OPPI and IDMA
relating to the implementation of such notices.
At the hearing before the Three Member Committee appointed by the
Government, the Company made representations drawing attention to the
aforesaid Orders of the Honble Bombay High Court by which the
Companys case was squarely covered.
In response to an application fled by the Company in the pending Writ
Petition fled by OPPI/IDMA, the Honble Bombay High Court vide its
Order dated 23rd December, 1998 restrained the Three Member Committee
and the Government from proceeding with the matter/hearing of the
Companys case. The matter is pending final hearing and disposal
before the Honble Bombay High Court and the Three Member Committee.
The demands stated in (i) to (iii) above aggregate to Rs. 5907.72 lakhs
(inclusive of total interest of Rs. 4206.36 lakhs) [Previous period Rs.
5907.72 lakhs (inclusive of total interest of Rs. 4206.36 lakhs)].
(b) Disputed claim under the Drugs (Prices Control) Order, 1995
National Pharmaceutical Pricing Authority (NPPA) raised a demand of Rs.
1726.35 lakhs (inclusive of interest of Rs. 134.90 lakhs) on the
Company towards the alleged non-compliance of the Order issued under
paragraph 8 of DPCO 1995 in respect of the production of Prednisolone
based formulations during the period June 2000 to March 2001 and April
2003 to August 2004. The Company has provided and paid amounts
aggregating to Rs. 1287.93 lakhs and disputed the balance demand of Rs.
438.42 lakhs (inclusive of interest of Rs. 134.90 lakhs).
During the year ended 31st March 2007, the Government of India called
upon the Company to make payment of the disputed balance amount. The
Company has disputed its liability to make such payment and has fled a
Writ Petition against the same in the Honble Bombay High Court. An ad
interim relief by way of stay has been granted by the Honble Bombay
High Court vide its Order dated 23rd January, 2007. The matter is
pending adjudication before the Honble Bombay High Court.
Note: Future cash outflows in respect of (a) to (c) above are
determinable only on receipt of judgements/decisions pending with
4. In pursuance of Accounting Standard 28 Impairment of Assets (AS
28), notified under sub-section (3C) of Section 211 of the Act, the
Company has accounted for the impairment loss of Nil (Previous period
Rs. 93.02 lakhs) on certain fixed assets situated at its erstwhile
corporate office at Mahindra Towers, Worli, Mumbai. The carrying amount
of the said assets is their net selling price which has been determined
on the basis of the current bid price.
5. Loans and Advances include due from a director Nil (Previous period
Rs. 0.74 lakhs). Maximum amount outstanding at any time during the
period Rs. 0.74 lakhs (Previous period Rs. 31.72 lakhs).
6. Materials Cost includes cost of samples distributed, free of cost
replacements and write-off of broken, damaged and date expired goods.
The above information and that given in Schedule 10 Liabilities
regarding Micro and Small Enterprises has been determined to the extent
such parties have been identified on the basis of information available
with the Company. This has been relied upon by the auditors.
Notes: (a) Consumption of Raw Materials include consumption by third
parties under contract with the Company and consumption in respect of
(b) Components and spare parts referred to in Para 4D(c) of Part II of
Schedule VI of the Act are assumed to be those forming part of the
fnished goods produced and not those used for maintenance of plant and
* Licensed Capacity is not applicable as industrial licensing has been
abolished in respect of these products vide notification No. SO-477(E)
dated 25th July, 1991 as amended vide Press Release Note No. 4 of the
1994 series dated 25th October, 1994 issued by the Department of
Industrial Development, Ministry of Industry, Government of India.
@ Installed Capacity (formulations at Goa plant on single shift basis)
being a technical matter, is certified by the management and relied
upon by the auditors.
*Quantities are net of samples distributed, free of cost replacements
and write-off of broken, damaged and date expired goods.
*Managerial Remuneration excludes:
(a) An amount of Nil (Previous period Rs. 380 lakhs) paid to Mr. R.
R. Iyer, subsequent to his resignation as Managing Director, as
ex-gratia in recognition of his long service with the Company of over
28 years and his valuable contribution to the Company.
(b) Provision for incentive based on the price of shares of Wyeth, USA.
(c) ESOPs outstanding: 980 (Nov. 2009 : Nil) & RSUs outstanding: 196
(Nov. 2009: Nil) amounting to Rs. 1.58 lakhs (Nov. 2009: Nil). (Refer
Note 30 of Schedule 17, Notes to Accounts)
Note: There are no non-cash expenses other than Depreciation and
(a) The primary reporting of the Company is based on the business
segments. The businesses of the Company comprise of Pharmaceuticals and
Other businesses. The operational performance of the business is
reviewed by the management based on such segregation.
(i) Pharmaceuticals segment comprise of Formulations. Formulations
comprise of Oral Contraceptives, Hormone Replacement Therapy,
Antibiotics, Vaccines, Steroids and other prescription medicines.
(ii) Others comprise of OTC pharmaceuticals, Cosmetics and other allied
(b) Secondary segment reporting is based on the geographical location
of customers. Revenue is segregated into two segments namely India
(sales to customers within India) and Other Countries (sales to
customers outside India) for the purpose of reporting geographical
(d) The accounting policies adopted for segment reporting are in line
with the accounting policies adopted for the preparation of financial
statements as disclosed in Note 2 above.
7. Related Party Disclosures
(A) Enterprises where control exists
(a) Ultimate Holding Company Pfizer Inc, USA (w.e.f. 15th October,
(b) Holding Company Wyeth LLC, USA
(B) Other Related Parties with whom the Company had transactions during
(a) Fellow Subsidiaries AHP Manufacturing BV
John Wyeth & Brother Limited
Wyeth Ayerst (Thailand) Limited
Wyeth Ayerst International Inc.
Wyeth Ayerst Lederle Inc.
Wyeth Australia Pty Ltd.
Wyeth (Hong Kong) Limited
Wyeth (Malaysia) SDN BHD
Wyeth Medica Ireland
Wyeth Medica Ireland Grange Castle
Pfizer Products India Pvt. Ltd.
Pfizer Pharmaceutical India Pvt. Ltd.
Wyeth Pharmaceutical Co.
Wyeth Pharmaceuticals Inc.
Wyeth Regional Manufacturing
(Singapore) Pte. Limited
Wyeth Singapore Pte. Ltd.
Pharmaceutical Division of Wyeth
Wyeth Pharmaceuticals India Pvt. Ltd.
Wyeth (Thailand) Ltd.
(b) Key Management Personnel Kewal Handa
R.R. Iyer (upto 26th October 2009)
8. Disclosures in respect of office premises, warehouses and
residential premises taken on lease
9. The employees of the Company have been issued 28240 (Nov. 2009:
Nil) Share Options and 5648 (Nov. 2009: Nil) restricted stock units
under the Pfizer Inc. 2004 Share Option Plan by Pfizer Inc. The cost
incurred by Pfizer Inc. pursuant to the said Pfizer Inc. 2004 Share
Option Plan for the 16 months ended 31st March 2011 amounts to Rs.
27.30 lakhs (Nov. 2009 : Nil). These amounts have not been charged to
the Company by Pfizer Inc.
10. The unhedged foreign currency exposures as at 31st March 2011
aggregated Rs. 2490.31 lakhs (Nov. 2009: Rs. 2194.60 lakhs) on account
of receivables and payables in foreign currency.
11. The previous years figures relate to eight months period ended
30th November 2009, while the current periods figures are 16 months
period ended 31st March 2011. Accordingly, the current periods figures
are not comparable to those of the previous year. Previous year figures
have been regrouped where necessary.