GOODS RETURN POLICY 2015 \ MERCK Area of Application : Dateivats tem 1 August 2015 x Applicable for 1961 Merck Lifescience Pvt Ltd. actrevesby Dr. Rajendra Pawar owner Customer Service Manish Mishra, Sanjay Shrivastava, Chinmaya Parekh, Mayuresh Reviewed by _Khandke version 1.0 ‘uve Hemalatha Shashidhara Rationale and Objective To describe the procedure for goods returns and procedure of handling the same across all the functions of Merck Millipore. Executive Summary This Standard Operating Procedure outlines the procedure for handling of Goods Retums for Merck Millipore ( Merck Life Science Private Limited). This document is applicable to all types of Goods Returns SOP CONTENT RESPONSIBILITIES It is the responsibility of Sales & Marketing, Operations (Manufacturing sites, Distribution, Quality) Customer Excellence & Finance departments to comply with this procedure as mentioned in this policy. Detailed Responsibilities are addressed in the procedure. DEFINITIONS RSM Regional Sales Manager zsM Zonal Sales Manager CFO Chief Financial Officer CNF Clearing and Forwarding Agents CWH Central Warehouse Shirwane LR Lorry ReceiptGOODS RETURN POLICY 2015 1. 14 12 1.3 aa 1 " 1! |MERCK ' PROCEDURE FOR HANDLING OF SALES RETURN MATERIALS The goods delivered to a Customer or Business partner (Distributor / Dealer) may be returned due to several reasons as Incorrect Order placement or Booking leading to Double dispatch Incorrect despatch of Goods — either Article or Grade or Both Incorrect despatch to a location, other than required (Wrong Ship to ) Batch mismatch Short delivery Late delivery Short Expiry In transit Breakages (Should be remarked behind Transporter LR copy) In transit Leakages (Should be remarked behind Transporter LR copy) Quality Complaints — several types as listed in Track wise Incorrect Price / Charges / Taxation ete. Missing or Incorrect Shipping Documents m, Others, specific if not above ( documentation to be provided ) -xvSsespa0cD The Procedure starts from the delivery of goods from the invoicing location to the customer premises (Ship to :) Customer need to confirm, if all Goods received as per his order — (Important parameter for decision making) In case of discrepancy, Customer can make a claim for Goods return based on point no. 1.1, within a period of 1 week ( other than quality complaint ) Latest within 12 weeks of Goods receipt for Quality related complaints Customer has 3 points of contact for the sales return as follows: a. Sales person b. Customer services c. _ Invoicing location (Warehouse/CNF) Note: A B. C. Distribution and Business Head's approval is necessary, if the goods retum is beyond three months from date of Invoice Damage or Opening of Original sealtape is considered as product adulterations. “Damages” referred to the physical harm that impair the value/usefulness/normal Functionality. Eg. External damages of primary box, Loss of original label (Traceability), Mis- match in product lot number, Loss of Original box, Loss of product/spare parts, Exposure to the moisture/rain making primary box weak, Stains/patches over boxes, Adhesion of non- removable commercial stickers, Breakage/Dents over product etc. makes the product non- saleable. Head of Sales, Distribution Head, Quality head, Operations head and Fianance Head approval shall be taken for all Goods return “write off ” Decontamination report to be obtained from the customer, in case of used material (Especially exposed to Bio hazard /Chemical hazard/Radiation hazard substances) - Page 2 of 9 -' t ‘ MERCK GOODS RETURN POLICY 2015 a 2. PROCEDURE FOR RETURN OF MATERIALS THROUGH CUSTOMER SERVICE 2.1 In case of any discrepancy or any reason from the above mentioned (1.1), the Customer / distributor contacts concern sales person from his region to address the same. 2.2. Sales person fills the “Goods Returns information form” with its nature of complaint and documents it with clear picture of the goods condition as per enclosed form ( annexure iD) 2.3 Concern sales person from the field ( RSM / ZSM ) sends this form to Customer Services team through email providing full reasons for their request for goods returns 2.4 Customer services team reviews the details recd from sales team books the Request / Complaint, in a tracker, before setting up an internal enquiry process and validation of the said request / complaint. 2.5 It will completely depend upon the validation of the complaint, that Next steps are initiated. 2.6 If, claim mentioned by customer / distributor is as per 1.1 (references to be given) is justified then customer service team initiates the action for such to be accepted back 2.7 Incase, the complaint is for reasons other than error from Merck, the CS team, shall set up the next steps, through a proper flow of information, with related stakeholders and based on such internal investigations, Decision on Goods returns shall be taken. 2.8 Possible action on Refusal to accept such Retums, can also be taken post such investigations 2.9 Once it is clear, that Goods have to be taken back, the CS shall activate a Sales Return procedure, through ERP / Track wise — whereby a Retum Sales order or replacement order shall be generated through the ERP 2.10 The reference Sales order number shall be communicated back to the Customer, for initiating Goods return process (the 10 digit reference number) 2.11 Reference number will include the name of the department, invoice number and date 2.12 The reference number will be informed to the respective sales person, customer and will be used here after to address that particular sales return 2.13 CS team will update ERP Module with the complete information of the sales return so that if the reference number is mentioned in module any one from warehouse/QC/Sales/CS can view the complete investigation. 2.14 De-contamination report to be obtained by the Customer Service Person - Page 3 of 9-u MERCK GOODS RETURN POLICY 2015 " 3. PROCEDURE FOR RETURN OF MATERIALS THROUGH SALES PERSON / INVOICING LOCATION / CUSTOMER SERVICE They need to process the request through CS team only — Direct the Customer accordinaly, provi ll detail 3.1. Once the reference number is informed to the customer along with that delivery address is also confirmed 3.2. The goods should be returned to the invoicing location only. The goods being returned to the central warehouse or CNF will be received by the CWH /respective CNF 3.3 All original document should be received along with Material at the receiving end. Original Document * Original Sales invoice copy * Excise invoice copy * LR copy of transporter * Challan copy of returning party stating reason of return of goods * Covering letter with the reference number allotted by the customer services. 3.4 Warehouse / C&F team at the receiving end will check all the required documents and if any document is missing will update the respective CS coordinator for the further follow-up on the missing documents. 3.5 Once the material is received back, it is blocked under Quarantine / Blocked stock, and QA, needs to give approval for such Goods to move to Unrestricted mode — post confirmation by QA — who may either release or send for further checking by QC, for its validity’ quality check - Whether goods can be taken in stock or need to be processed further 3.6 If goods clear the QC test it goes back to warehouse for relabelling and repacking to be considered in stock and accordingly is updated in SAP. 3.7 If goods are not cleared by QA then it is sent to production for reprocessing or repacking 3.8 If goods cannot be processed further, they need to be written off — following due approvals process. 3.9 Wherever possible for breakages and quality complaints, replacements of goods may be made. 3.10 In case of no replacement, the credit notes may be issued to adjust the Accounts receivables of the Customer - which are issued, by following the Standard Credit Note workflow process (followed by the respective invoicing locations or by the Accounts department) 3.11 The invoicing location should mention reference number on the credit notes issued for such retumed goods. A copy of invoice to be attached in each and every claim on CN workflow. Details along with reference number to be maintained in Text area for reasons of issue. This will help auditors facilitate link referencing at the time of audit. The Credit Note issued should be mentioned / copy attached to the relevant Invoice copy (CNF office copy) to avoid duplication subsequently. 3.12 The warehouse/ CNFs shall mention the relevant workflow approval number during the preparation of the credit note through SAP, 3.13 The warehouse/ CNFs should never amend the invoices. Any corrections, subsequently required, should be made either through a debit note or a credit note as the case may be. - Page 4 of 9-|. MERCK GOODS RETURN POLICY 2015 LL 3.14 Consolidated list of pending credit note claims should be sent to HO to the attention of concerned Manager at the end of every month 3.15 This list should give details such as name of the party, reason for the credit note claim and why pending and claim value. 3.16 The authority for issue of credit notes for adjusting the amounts (per transaction) for reasons indicated above, may be given by the following officials, depending upon the amounts through workflow process MM Lab CREDIT NOTE 4. PROCEDURE FOR DESTRUCTION OF SALES RETURN GOODS AT THE LOCATION OTHER THAN MANUFACTURING AND CENTRAL WAREHOUSE 4.1 In case of extreme rare case if there is no possibility that sales material can be brought back to Manufacturing location or Central Warehouse due to following reasons * Material is in leaking / breakage condition and it is unsafe to bring back * Material / Outer packing completely damage * Customer agrees to destroy the material at his end as he refuse to return the material as per his SOP * Due to some commercial reasons like Taxation, SEZ Premises, Excise, Bond etc 42. In such case, it is Mandatory to provide pictorial evidences of goods which are claimed for destroy at locations. Frontline sales person validates this claims and provides enough documentation like Photos, Commercial Invoices, Customer communication etc to get Approval. There are hierarchy level approval needs to be obtained from sales organisation, logistics Head and Quality Head before issuing the Credit note in the enclosed format. Refer below Destruction Approval form (Annexure I! ) - Page 5 of 9-GOODS RETURN POLICY 2015 Cord EM COT ova) our Cetra! Tag Hemalatha Shashidhara Head ~ Customer Service Manish Mishra Head - Customer Excellence ‘Sanjay Shrivastava Head - Distribution Chinmaya Parekh Director - Accounting & Finance Mayuresh Khandke Head - Lab Consumables Sales Dr Rajendra Pawar Head — EQ, India - Page 6 of 9-\ MERCK GOODS RETURN POLICY 2015 WORKFLOW for Goods Return Policy was [posse of Sse ma ems oe [iets eam sar) | | Mate Pom st ; homes ceecng ar fceen) ve [scmrtaoe. Ong Farmer ators rece seta a cermin Foe ate i ‘Sena res aaa oe it rene ON pee oncom wate lecoamer aan Desructionst se peal atom denon tr ame ae [Series oe RRL rersnman Chinottor tow cha' MERCK GOODS RETURN POLICY 2015 ' ‘Annexure | Goods Return Detail information FORM et ox Twiasueese fase TE aie TERE — or _ faa ai ate os = ae a RTS om — aor a fennel Rta (Sot On obec meee) = Tacorrect Order placement or Booking leading to Dowie ‘+ -ncorrect Gespaich oF Goods ~ either Artxle or Grade or Bath mn Score GST WS RIGA han aural | + BR RESTA (reg she) ere EES [—-ssteey Sse aaa Sa oar Ta ee = T TE SRSRT HSRC TSS HOTS TTS tre EE reap TST Ea SS SO ao as ST EDS SST Comment a Elwes on: (ind ate pem hc nv adn gts mam) Yeu We Note: Alabove deta ar mandatary fhe further process of goats rtm SIGNATURE OF CustemeDispibtor Nam of Sales Person Terry Name Regor emats/ Suggesions am ty Sales Parson, {Foe Customer Savice Departmen’ Use Cn) pare Curtomee Series comments = Page 8 of 9-! w " MERCK GOODS RETURN POLICY 2015 u ANNEXURE I! "DESTRUCTION APPROVAL FORM Criiating Dat Ste Zoe: Manatacting Locton: TTEMDESCRIPTION | MATERIAL CODE | UNIT | QUANTITY "REASONREMARKS "Batch No. cost INITIATED BY "APPROVED BY "APPROVED BY [APPROVED BY ‘APPROVED BY vero Seon ter te - Page 9 of 9-