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Directors Report of FDC Ltd.

Mar 31, 2023

Your Directors take pleasure in presenting the 83rd Annual Report together with the Audited Accounts of FDC Limited (“the Company/your Company") for the year ended March 31, 2023 (“the Year").

1. FINANCIAL RESULTS

(Rs. in Lakhs)

Particulars

Standalone

Consolidated

FY 202223

FY 202122

FY 202223

FY 2021-22

Revenue from Operations

1,77,703.21

1,51,896.51

1,78,375.02

1,52,791.95

Other income

5,391.16

7,873.35

4,985.56

7,609.49

Total Income

1,83,094.37

1,59,769.86

1,83,360.58

1,60,401.44

Profit (before finance costs and depreciation/ amortization)

30,848.73

32,557.98

30,082.99

32,978.17

Finance costs

403.86

304.79

408.72

308.95

Depreciation and amortization

3,875.76

3,708.11

3,893.94

3,730.21

Profit Before tax

26,569.11

28,545.08

25,780.33

28,939.01

Less: Taxation

-Current Tax

6,900.00

6,800.00

6,902.05

6,854.71

-Deferred Tax

(427.53)

(218.48)

(504.53)

467.81

Profit After Tax

20,096.64

21,963.56

19,382.81

21,616.49

Other

Comprehensive Income/(Loss) for the year

72.04

764.62

84.58

699.70

Total

Comprehensive Income/(Loss) for the year

20,168.68

22,728.18

19,467.39

22,316.19

Earnings per equity share (Basic & Diluted) (Face value ''1)

12.09

13.01

11.66

12.81

2. COMPANY''S PERFORMANCE

On a consolidated basis, your Company achieved a total income of '' 1,83,360.58 Lakhs for FY 2022-23 as against total income of '' 1,60,401.44 Lakhs in the previous year. Your Company reported a net profit of '' 19,382.81 Lakhs for FY 2022-23 against a net profit of '' 21,616.49 Lakhs for the previous financial year.

On a standalone basis, your Company achieved a total income of '' 1,83,094.37 Lakhs for FY 2022-23 as against total income of '' 1,59,769.86 Lakhs in the previous year. Your Company reported a net profit of '' 20,096.64 Lakhs for FY 2022-23 against a net profit of '' 21,963.56 Lakhs in the previous financial year.

3. TRANSFER TO RESERVES

During the year, the Company had transferred the amount of ''50,000 Lakhs from Retained Earnings to General Reserves.

4. CHANGE IN NATURE OF BUSINESS:

During the year, there is no change in nature of business of the Company.

5. SHARE CAPITAL

The paid up Equity Share Capital of the Company as on March 31,2023 is as follows:

Subscribed and Paid-up share

March 31,

March 31,

capital :

2023

2022

16,59,10,084 (Previous year

16,59,10,084

16,88,10,084

16,88,10,084) Equity shares of

'' 1 each, fully paid-up

(During the year the Company had Bought back its 29,00,000 Equity Shares through Stock Exchange. The buyback was approved by board of directors at their meeting held on February 09,2022 and Completed on May 12, 2022).

6. DIVIDEND

The Company has not declared Dividend during the financial year ended March 31,2023.

The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") is available on the Company’s website at https://www.fdcindia.com/pdf/ policies/DIVIDEND DISTRIBUTION POLICY OF FDC LIMITED.pdf.

The Management of the Company presents the analysis of the Company’s performance for the financial year ended on March 31, 2023, and its outlook for the future. This outlook is based on an assessment of the current business environment. It may vary due to future economic and other developments, both in India and abroad.

WORLD ECONOMIC OUTLOOK, APRIL 2023: A ROCKY RECOVERY

The baseline forecast is for growth to fall from 3.4% in 2022 to 2.8% in 2023, before settling at 3.0% in 2024. Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7% in 2022 to 1.3% in 2023. In a plausible alternative scenario with further financial sector stress, global growth declines to about 2.5% in 2023 with advanced economy growth falling below 1%. Global headline inflation in the baseline is set to fall from 8.7% in 2022 to 7.0% in 2023 on the back of lower commodity prices but underlying (core) inflation is likely to decline more slowly. Inflation’s return to target is unlikely before 2025 in most cases.

(Source: World economic outlook, IMF report as per April 2023 Report)

INDIAN ECONOMY OVERVIEW

As per the World Bank, India’s growth continues to be resilient despite some signs of moderation. The update notes that although significant challenges remain in the global environment, India maintains its position as one of the fastest-growing economies in the world. The overall growth remains robust and is estimated to be 6.9% for the full year, with real GDP growing 7.7% year-on-year during the first three quarters of FY 2022-23. There were some signs of moderation in the second half of FY 2022-23. Growth was underpinned by strong investment activity bolstered by the Government’s capex push and buoyant private consumption, particularly among higher income earners. Inflation remained high, averaging around 6.7% in FY 2022-23 but the current-account deficit narrowed in Q3 on the back of strong growth in service exports and easing global commodity prices.

ECONOMIC OUTLOOK

After real GDP contracted in FY 2020-21 due to the COVID-19 pandemic, growth bounced back strongly in FY 2021-22, supported by accommodative monetary and fiscal policies and wide vaccine coverage. Consequently, in 2022, India emerged as one of the fastest-growing economies in the world, despite significant challenges in the global environment - including

renewed disruptions of supply lines following the rise in geopolitical tensions, the synchronized tightening of global monetary policies, and inflationary pressures.

In FY 2022-23, India’s real GDP expanded by an estimated 6.9%. Growth was underpinned by robust domestic demand, strong investment activity bolstered by the Government’s push for investment in infrastructure, and buoyant private consumption, particularly among higher income earners. The composition of domestic demand also changed, with Government consumption being lower due to fiscal consolidation.

Since Q3 FY 2022-23, however, there have been signs of moderation, although the overall growth momentum remains robust. The persisting headwinds - rising borrowing costs, tightening financial conditions and ongoing inflationary pressures - are expected to weigh on India’s growth in FY 2023-24. Real GDP growth is likely to moderate to 6.3% in FY 2023-24 from the estimated 6.9% in FY 2022-23.

Both the general government fiscal deficit and public debt to GDP ratio increased sharply in FY 2020-21 and have been declining gradually since then, with the fiscal deficit falling from over 13% in FY 2020-21 to an estimated 9.4% in FY 2022-23. Public debt has fallen from over 87% of GDP to around 83% over the same period. The consolidation has largely been driven by an increase in revenues and a gradual withdrawal of Covid-19 pandemic-related stimulus measures. At the same time, the Government has remained committed to increasing capital spending, particularly on infrastructure, to boost growth and competitiveness.

(Source: IMF data Analysis as updated on July 12, 2023)

GLOBAL PHARMACEUTICALS INDUSTRY ANALYSIS AND TRENDS 2023

The global pharmaceutical market is expected to grow in the upcoming years despite recent slowdowns in key markets across the globe. This is attributed to the aging and growing population, rising income levels, emerging medical conditions, and the emergence of new diseases.

As per the research, the global pharmaceutical industry will be worth US$ 1.57 Trillion by 2023. The growth in this market is predicted on the basis of various factors like market drivers, current and upcoming trends, the current growth pattern, and market challenges.

In 2023, North America is expected to retain its leading position in the global pharmaceuticals market, with a market share of 45.33%, demonstrating an increase in its market share as compared to 2017. Europe, on the contrary, is expected to see a decline in its market share compared to 2017 and be worth 20.24% of the global pharma industry in 2023. The Asia-Pacific region''s pharmaceuticals market is expected to retain its second position with a market share of 24.07% in 2023. Latin America and the Middle East, and Africa (MEA) are expected to retain 7.53% and 2.96% market share of the global pharmaceuticals market in 2023.

(Source: ReportLinker.com Mar’ 23)

INDIAN PHARMACEUTICAL INDUSTRY

The Indian pharmaceutical market has grown by 7.9% in FY 2022-23 with a turnover of '' 2,005 Billion. In the last nine years, the Indian Pharma sector has grown steadily at a CAGR of 9.43%. India’s domestic pharmaceutical market stood at US$ 25 Billion in FY 2022-23. It is likely to reach ~US$ 120 Billion by 2030. According to the Indian Economic Survey 2021, the domestic market is expected to grow three times in the next decade. The pharma sector has been consistently earning trade surplus. The pharmaceutical exports from the country have seen a growth of 3.25% at US$ 25.39 Billion during FY 2022-23, as compared to US$ 24.59 Billion in the previous fiscal year. The Indian ayurvedic products market size reached '' 626 Billion in 2022. Looking forward, IMARC Group expects the market to reach '' 1,824 Billion by 2028, registering a CAGR of 19.3% during FY 2023-28. The increasing prevalence of medical disorders, rising health consciousness among consumers, and the easy availability of ayurvedic products through online and offline distribution channels represent some of the key factors driving the market. Transformed over the years as a vibrant sector, presently the Indian pharma ranks third in pharmaceutical production by volume. The Indian pharmaceutical industry also plays a significant role globally. India has the highest number of USFDA-compliant pharma plants outside of USA. There are 500 API manufacturers contributing about 8% to the global API industry. In supplying generic medicines, India has a 20% share of the global supply, manufacturing 60,000 different generic brands across 60 therapeutic categories.

(Source: Department of Pharmaceuticals, PwC, McKinsey, AIOCD AWACS, IQVIA, CII, Annual Report 2021-22 of Govt of India DoP)

INDIAN PHARMACEUTICAL EXPORTS

The pharmaceutical exports from the country have seen a growth of 3.25% at US$ 25.39 Billion during FY 2022-23, as compared to US$ 24.59 Billion in the previous fiscal year.

India’s exports to the world rose 2.37 times in Apr-Feb FY 2022-23. The exports during the year, however, have registered a higher percentage of growth compared to the less than 1% growth in the previous fiscal year. For the month of March, the Indian pharma firms exported US$ 2.48 Billion as compared to US$ 2.38 Billion exports reported in the same month of last year, registering a growth of 4.19% last year.

It may be noted that the Government has earlier fixed a target of US$ 27.4 Billion for pharmaceuticals exports for FY 2022-23 even though the global market have various challenges which has an impact on the exports. The Government is targeting an 11% growth during FY 2022-23, from a commendable growth in exports at US$ 24.4 Billion achieved during FY 2021-22.

On the other hand, the imports of medicinal and pharmaceutical products during FY 2022-23 registered a decline of 10.58%, at US$ 8.11 Billion as compared to US$ 9.07 Billion in the previous fiscal year.

During March, 2023, the pharma imports were at US$ 706.02 Million as compared to US$ 792.44 Million in the same month last year.

The Economic Survey FY 2022-23, released ahead of the Union Budget 2023, has said that pharma exports have performed well to report growth in the recent past, despite the global trade disruptions and drop in demand for Covid-19 pandemic-related treatments.

(Source: Pharmabiz)

INDUSTRY VISION 2025 Road Ahead

The Indian pharmaceutical market is expected to grow to US$ 100 Billion by 2025, driven by increasing consumer spending, rapid urbanization, and raising healthcare insurance, among others.

Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases, such as cardiovascular, anti-diabetes, anti-depressants, and anticancer that are on the rise.

The Indian Government has taken many steps to reduce costs and bring down healthcare expenses. The speedy introduction of generic medicines into the market has remained in focus and is expected to benefit Indian pharmaceutical companies. In addition, the thrust on rural health programs, lifesaving medicines, and preventive vaccines also augurs well for pharmaceutical companies.

(Source: Consolidated FDI Policy, Department of Industrial Policy & OTC Growth

Promotion (DIPP), Press Information Bureau (PIB), Media Reports, Pharmaceuticals Export Promotion Council)

FACTORS DRIVING INNOVATION AND GROWTH IN PHARMACEUTICAL INDUSTRY Research and Development (R&D)

R&D is vital to most industries, but it is a priority for the pharmaceutical industry. It allows companies to make new medicines to address evolving, complex, and specialized disorders. Many new drugs are being introduced into the market. As a result, these drugs are highly purchased by the people, providing further growth to the industry. Thus, R&D generates income for the companies but also saves lives. We are witnessing new vaccines being developed for the constantly mutating COVID-19 pandemic virus.

Government Regulations

Government regulations play a significant role in determining the profitability of the pharmaceutical industry. It includes safety standards, certifications, and drug-related laws. It also controls aspects such as pricing, advertisements, and a check on the production of unlicensed drugs.

Each successive Government administration controls the pharmaceutical industry to a different degree. Complying with the strict rules of the regulating bodies cost the pharmaceutical industry Millions of dollars annually.

Consumer Demand

Consumer demand is an essential factor affecting growth in the pharmaceutical sector. Customers are now more educated and have access to accurate drug information. That is why the consistent demand for affordable drugs is rapidly increasing, affecting the pharmaceutical industry''s growth directly and indirectly. Consumer demand for pharmaceuticals as maintenance therapy and ''lifestyle'' medications that enhance one''s health and well-being has grown tremendously. This increase is a significant driver of industry growth. Tailored therapy is becoming a more significant portion of the pharmaceutical market share as genetic testing allows for new, highly targeted therapies for many conditions.

Managed Care and Insurers

Pharmacists in managed care perform functions, including drug distribution, patient safety monitoring, clinical program development, business operations, and cost management. The price of prescription drugs is often paid by healthcare organizations and third-party insurers as consumers. It helps third-party payers negotiate prices for drugs. In this way, the price rates are lowered, thus depressing pharmaceutical industry profit margins.

Branded Drugs and Speciality Medicines

Branded drugs and speciality medicines drive innovation and growth in the pharmaceutical sector. The portion of branded drugs is 75% of the spending on speciality drugs.

Off Patent Drugs

Healthcare reforms help increase the use of generic medicine to facilitate an increase in market size, contributing to the growth of the pharmaceutical sector.

OTC Growth

With an aging population and a trend to buy drugs over the counter without visiting a doctor, the pharmaceutical sector has witnessed significant growth in sales. It is observed that many drugs are re-classified, shifting from prescription-only medications to over-the-counter medications. As that happens, there is an increase in the market size of generic medication.

Innovations in Oncology, Autoimmune Diseases, such as Diabetes

Innovations in oncology, autoimmune, and diabetes treatment in the international pharmaceutical market ensure advancement in treatments and prevention will drive market growth.

Changing Lifestyles

We live in a highly competitive world where life is swift and stressful. Unhealthy eating habits and a lack of daily exercise have resulted in high obesity rates, increased incidences of heart-related diseases, depression, and other physical problems. Today''s generation is increasingly resorting to health supplements. It increased the consumption of vitamins and minerals, which is a great growth driver.

Increased Income and Chronic Diseases

With the increase in the middle-class population, both emerging and developed markets mean more disposable income and the expectation of better healthcare solutions. With the growth and digitalization of the pharmaceutical industry, the drivers of growth are easily identified to support the emerging markets with accrued trends across the globe.

(Source: Worldhealthcarepharma.com)

(Source: BMI, India Biz, Nicholas Hall & Company, IQVIA)

OPPORTUNITIES IN HEALTHCARE

Healthcare Infrastructure: An additional three Million beds will be needed for India to achieve the target of three beds per 1,000 people by 2025. Also, India will have one doctor for every 800 patients by 2030. An additional 1.54 Million doctors and 2.4 Million nurses will be required to meet the growing demand for healthcare. By 2025, 58,000 job opportunities are expected

to be generated in the healthcare sector, while over US$ 500 Billion is anticipated to be spent on medical infrastructure by 2030. India has made strategic interventions in the National Health Mission and the national disease control programs over the years, to ensure quality and affordable healthcare for all.

Medical Devices: The medical devices market is expected to reach US$ 13 Billion by 2025, backed by a rising geriatric population, growth in medical tourism, and the declining cost of medical services

Health Tech: Compared to its physical counterparts, e-pharmacy has emerged in recent years as a superior and more practical strategy for addressing consumer problems and delivering excellent customer solutions. It is anticipated to register a CAGR of 22.20% from 2022 to 2027, when it is expected to reach '' 89.47 Billion

(Source: BMI, Drug Controller General of India, www. researchandmarkets.co)

COMPANY OVERVIEW

FDC Limited (referred to as ''FDC’ or ''The Company’) is an established player in the pharmaceutical industry and a pioneer in developing specialized formulations. The Company holds a leading position in the oral rehydration salt category, along with its ophthalmic range of solutions. The Company’s R&D facility is the backbone of its affordable and highly efficient products across various categories. FDC operates actively in India as well as internationally. During FY 2022-23, FDC earned a revenue from operations of '' 1,777.03 Crore, out of which revenue from export stood at '' 324 Crore.

COMPANY GROWTH

FDC grew by 16%, against domestic industry growth of 7.9%. The Company has crossed '' 2,000 Crore mark for the first time in history in IQVIA secondary sales data. Electral has crossed '' 400 Crore, sales while Zifi achieved '' 350 Crore sales mark and Enerzal reached '' 170 Crore. During the year, the Company’s anti-infective, gastro-intestinal, vitamins / minerals / nutrients, ophthal and derma segments performed well, registering growth of 16%, 33%, 20%, 19% and 19%, respectively. In FY 2022-23, the incremental value measuredly came from antiinfective, gastro-intestinal and vitamins / minerals / nutrients As per IQVIA data, FDC ranks as the second-fastest growing company among the top 25 corporations on an annual basis.

(Source: IQVIA Secondary Sales Audit March 2023)

EXPORTSUSA

Second to the domestic market, FDC derives its majority of revenues from the US market. The Company’s U.S. sales have exhibited significant growth over the past financial year, and

the sales are gradually inching back to pre-Covid-19 pandemic levels. The Company’s partners in the US market have successfully revived the sales post-Covid-19 pandemic of key products like Timolol 0.5% ophthalmic solution, Ciprofloxacin 0.3% ophthalmic solution, Ofloxacin 0.3% ophthalmic solution & Dorzolamide 2%, Timolol 0.5% ophthalmic solution. FDC has also benefited from the support extended by the operations team in increasing the production cycles and batch sizes of Dorzolamide 2%, Timolol 0.5% ophthalmic solution 10 ml to support the increasing volume requirements of the US customers.

The US Generic Market pricing has been under pressure due to higher competitive intensity in the form of a rise in the number of drug approvals, increasing interest rates, market consolidation, and an increase in competition with each passing year. Cost pressures will remain in the near-term, and the Company will endeavor to optimize its supply chain by increasing the production batch sizes wherever possible to stabilize the price pressure in the base business of generic ophthalmic product sales. FDC is confident of sustained growth in the US market, despite the challenges of price deflation and the continually changing market scenario among stricter regulatory controls.

UK

FDC International UK, the 100% subsidiary of FDC Limited, India, generated a total revenue of GBP 1.06 Million through sales of key products like Sodium Cromoglicate 2% Eye drops 13.5 ml, Chloramphenicol 0.5% Eye drops 10 ml & Timolol 0.5% Eye drops 5 ml against the revenue of GBP 1.46 Million of the last financial year.

The sales were affected owing to high inventory of competitor stocks for Sodium Cromoglicate 2% Eye drops 13.5 ml, one of the top selling products in the UK market. Also, significant unforeseen delays in getting batch releases from the UK testing laboratory, facing issues with their personnel, have affected sales in FY 2022-23. Corrective measures have been taken swiftly, and additional labs have been actioned and approved by the UK technical team.

Additional products in the ophthalmic space are being filed in FY 2023-24. Apart from this, certain non-ophthalmic products are also being evaluated to be included into the UK basket.

FDC continues to supply its anti-diarrheal and ophthalmic products to reputed global NGOs. These NGOs include UNICEF-Denmark, MSF-France/Belgium, and WHO. Additionally, the Company supplies its products to local NGOs and Government bodies in Africa & Southeast Asia, and Oceania, thus maintaining its reputation of being one of the preferred suppliers for emergency supplies worldwide.

New product registrations have been received in ROW countries,

and there are several other products in the pipeline awaiting registration.

Asia

In FY 2022-23, FDC experienced significant growth and success in the Asia region. The Company’s total business in Asia reached approx. '' 38.38 Crore, reflecting an impressive growth rate of 83% compared to the previous financial year.

Among the countries in the Asia region, Malaysia, New Zealand, Myanmar, Australia, and Hong Kong emerged as the key contributors, accounting for approximately 88% of FDC’s business in Asia. Malaysia stood out as the highest contributor, with a remarkable growth rate of 247% over the last year.

New Zealand’s market continued to be a consistent major contributor to the Company’s Asia business. This year, FDC achieved '' 10.8 Crore in New Zealand, demonstrating a growth rate of 63% compared to the previous year.

The Company’s sales turnover in Myanmar reached '' 5.2 Crore, with its flagship brand ''Electral’ experiencing exceptional growth at a rate of 149% over the previous year.

Ophthalmic and ORS remain the prime categories that drive FDC’s export business in the region. Among the Company’s top 10 products, which collectively contributed to 70% of the total business in Asia, notable brands include the Electral range, Salmodil syrup, Latanoprost 0.005% Eye Drops, and Chloramphenicol 0.5% Eye Drops.

Additionally, the Company is pleased to announce the successful registration of I Lube Eye Drops - Polyvinyl Alcohol BP 1.4% w/v Povidone BP 0.6% w/v in Malaysia. This marks a significant milestone for FDC as it takes its first step into the medical devices segment in Asia.

In line with FDC’s strategic growth initiatives, it successfully launched its business in Uzbekistan by introducing four products from our ophthalmic range, expanding its reach and strengthening its presence in the CIS region.

As FDC advances, it remains committed to pursuing growth opportunities, by establishing its products in Southeast Asia & CIS region. This includes both finished formulations and medical devices. With a solid foundation in the Asia region, the Company is well-positioned to capitalize on emerging markets and expand its global footprint.

Africa

In FY 2022-23, the Africa region registered a business of '' 38.20 Crore, a growth of 49% over the previous year and contributing 22% to overall exports.

FDC’s presence is in 21 countries, with the top countries contributing (Ethiopia/Tanzania/Zimbabwe/Botswana / Uganda) to 82% of regional sales.

With the successful launch of the electral zinc kit (9.2 Crore) registered and commercialized in ten African countries (Ethiopia/Tanzania/Uganda/Botswana/Mauritius/ Congo/ Guinea/Senegal, and Mauritania/Lesotho), further with the launch of Electral Ready to Drink & Electral Z powder in single sachets, will further propel the segment to '' 16 Crore.

RESEARCH AND DEVELOPMENT Formulations

The R&D formulations team at FDC Limited is committed to developing quality products at affordable prices at a faster pace. The team constantly innovates to develop top-quality pharmaceutical products for both domestic and global markets. The scientists are engaged in developing new, simple and complex products using innovative technologies and robust development strategies. A stimulating work environment provides the impetus to deliver quality products within the stipulated timelines. There is a constant thrust to address patient needs and efforts to develop products for their treatment. The team has successfully developed and transferred challenging, technology intensive complex products from the laboratory to the commercial level. Many products are ready to be developed at R&D and await slots for technology transfer and commercialization.

Key Highlights

• ANDA exhibits batch execution of Bimatoprost Ophthalmic Solution 0.03% and Moxifloxacin Ophthalmic Solution 0.5%

• Exhibit batch execution of Atropine Sulphate ED 1% for the UK market

• ANDA filing of Olopatadine ophthalmic solution 0.1% and 0.2%

• Improvement in process efficiency and yield for ZIFI 200, ZIFI CV and Amodep AT products

• DCGI approval for ORS with Zinc sachets of 4.38g and 21.9g

SYNTHESIS AND ANALYTICAL

FDC’s R&D center located at Kandivali (Mumbai) engages in the process of developing niche products, particularly in the areas of ophthalmic, anti-hypertensive, anti-fungal, anti-diabetic, anti-histaminic, bronchodilator and anti-bacterial new chemical entity (NCE). Currently, the Company is also focused on the development of API for COPD, for example, Glycopyrrolium bromide. The work on life cycle management of existing drug substances and the synthesis of generic peptide molecules for treatment of leucoderma (skin pigmentation), osteoporosis and anti-diabetic is also being carried out. These initiatives are aimed at cost effectiveness, backward integration, and meeting

regulatory requirements to attain accreditation from various World Drug Regulatory Authorities.

The other highlights of the process of developing generic drug molecules are:

• The R&D center is equipped with a new state-of-the-art peptide development laboratory with advanced equipment

• Development of non-infringing processes

• Usage of environment friendly chemicals

• Analytical method development is performed using UPLC systems

• Application of green chemistry principles for protection of the environment and to reduce aqueous effluents

• Development of desired polymorphs utilizing ultramodern instruments like XRD, LCMS and GCMS systems

• Use of classical chemistry for the development of chiral drugs using advanced parallel synthesizer equipment

• Advanced state-of-the-art new flash and preparative chromatography technique for enhancing purity and yield on a commercial scale

• Implementation of electronic laboratory notebook software with 21 CFR compliance for recording daily experiments. Moving towards state-of-the-art 21 CFR compliant R&D center

• Scale up and technology transfer activities ensure overall chemical safety and the protection of inventions through intellectual property rights. R&D obtained three Indian patents for innovative process development

• Life cycle management of existing products from a green chemistry point of view, yield improvement and cost reduction

• Selective enzymatic process for a single required isomer NUTRACEUTICALS

R&D foods majorly formulate nutraceutical products, such as non-carbonated water-based beverages and other food products that offer additional health benefits besides their basic nutritional value. Nutraceuticals are derived from natural sources and contain scientifically proven active ingredients that promote health. The demand for nutraceuticals and dietary supplements has been steadily increasing in recent years, due to consumer awareness of the importance of preventive healthcare and as they are seeking natural and alternative ways to improve their well-being. In the global market, nutraceuticals and functional foods have become one of the fastest-growing

segments, driving the R&D team to constantly deliver market research and develop new formulations in line with ongoing trends. This enables them to create innovative products that cater to diverse consumer needs and preferences, while ensuring cost-effective solutions.

KEY HIGHLIGHTS

• Enerzal Zero Powder launched

• Zefrich RTD 10gm launched

• Infant milk substitute formulation for MumMum 1, MumMum 2, Simyl MCT, and Simyl LBW trials were completed to match the specifications and requirements as per the Foods for Infant Nutrition Regulation of the FSSAI, and additional changes were made according to market trends by completely removing sugar from the product launched

• Immunity boosting drink R5 launched

• Enerzal Powder fortification with Natural Vitamin C, Ginseng & Zinc; a trial completed product under stability

• AV-Uti formulation frozen; trials scheduled

• Other products such as, Enerzal with juice concentrate in all RTD format, Simyl MCT Oil fortification, MumMum 1 fortification, and Humyl reformulation, among others, are under development

a) G-CSF PROJECT

We have successfully renewed the Test license in Form 29 (No 201538805 dated July 12, 2023 Valid till July 11, 2026) to manufacture Filgrastim bulk product in our GMP approved bioprocess facility for clinical trial purpose.

The necessary SOPs as well as the QMS system have been reviewed and updated and the process validation documentation finalized. We are proceeding with the batches for process validation shortly. There was a holdup due to non-availability of chromatography resins from the supplier which is required for the purification process of G-CSF. The same has been resolved and we have received the said in the last week of July.

As we are proceeding with batches for clinical trial material generation, it was decided to replace old major equipment such as the steam generator & AKTA purification System (both procured almost 20 years back). The task has been completed with both equipments installed and qualified.

We shall now be proceeding with 3-5 batches of Filgrastim to obtain bulk API for process validation studies. These

shall be characterized and then filling will be done in DCGI approved facility for the finished dosage form (pre-filled syringe facility) and these same batches will be taken for the stability studies & clinical trials.

b) THIRD GENERATION THROMBOLYTE PROJECT

As informed earlier we have signed a master service agreement with an external party to develop the purification strategy.

The party has completed the fourth milestone i.e optimized intermediate scale up process condition for further scale up and production. The purified sample obtained by the party are being analyzed for activity and then the feasible process will be transferred to our R & D facility at Jogeshwari.

Lab scale upstream processing (10L capacity) was conducted at our R & D bioprocess facility and the cell paste and inclusion bodies required in large quantities by the external party for scale up studies were submitted for final processing.

We are procuring the necessary consumables and reagents for technology transfer of purification strategy by the external party, once the final milestone is completed and selected process is validated by them. The technology shall then be transferred to FDC and necessary training / demonstration will be provided by an external party.

c) Ranibizumab

Due to rising interest in monoclonal antibody segment, the management was keen on Ranibizumab molecule that is related to ophthalmics and used for age-related macular degeneration. In this regard we had scouted and then shortlisted few external parties with technology for the project Ranibizumab. Proposals have been obtained from parties after discussion and the same has been submitted to the management for their review and consideration.

MICROBIAL TESTING LAB

The R&D MTL lab has performed screening of the promising NCEs synthesized in large quantities to ensure that the efficacy observed in primary screening is consistent and reproducible.

Acute oral toxicity studies were conducted on three shortlisted NCEs (HY-27, TNF-18, and HY-13) in Sprague Dawley rats at M/s Vivo Biotech. The report shows that all three moieties are non-toxic and classified as Category 5 or unclassified as per GHS. These molecules, in large quantities, have been handed over to the R&D formulation department for further development into oral as well as topical multi-dosage forms.

FINANCIAL PERFORMANCE HIGHLIGHTS

In FY 2022-23, FDC registered a standalone total income of '' 1,83,094.37 Lakhs compared to '' 1,59,769.86 Lakhs in the previous year. The earnings before interest and depreciation amounted to '' 30,848.73 Lakhs in FY 2022-23 as compared to '' 32,557.98 Lakhs in the previous year. The net profit after taxation stood at '' 20,096.64 Lakhs in FY 2022-23 as compared to '' 21,963.56 Lakhs in the previous year. On a consolidated basis, the Company registered a total income of '' 1,83,360.58 Lakhs in FY 2022-23 as compared to '' 1,60,401.44 Lakhs in the previous year.

Financial

Ratios

FY

2022-23

FY

2021-22

Difference

%

Change

Debtors’ Turnover Ratio (days)

14.66

19.06

(4.4)

23.10%

Inventory Turnover Ratio (days)

1.74

1.93

(0.19)

(9.84%)

Interest Coverage Ratio (times)

0

0

0

0

Current Ratio

3.29

3.65

(0.36)

(9.96%)

Debt Equity Ratio

0.00005

0.00011

(0.00006)

(48.92%)

EBIDTA Margin (%)

17%

20%

(15%)

Net Profit Margin (%)

15%

18%

(17%)

INTERNAL FINANCIAL CONTROL AND ADEQUACY

FDC believes that internal control is a prerequisite of governance and that action emanating from agreed-upon business plans should be exercised within a framework of checks and balances. The Company has a well-established internal control framework that continuously assesses the adequacy, effectiveness, and efficiency of financial and operational controls. The Management is committed to ensuring an effective internal control environment that aligns with the size and complexity of the business. This framework guarantees compliance with internal policies, applicable laws, regulations that safeguards FDC’s resources and assets.

The Company has an internal audit department that conducts audits throughout the year. The Management considers the recommendations made by the department and takes appropriate actions accordingly.

HUMAN RESOURCE

FDC is fully committed to providing a safe, secure, and healthy working environment for its employees. The Company

consistently aims to outperform industry benchmarks, both external and internal, in terms of employee performance and productivity. The goals and philosophies of the organization are intimately related to the professional ambitions of individuals and teams at all levels, providing a clear sense of direction and purpose. FDC places significant emphasis on developing a culture of inclusiveness and respect, making sure the workplace is safe, concentrating on developing skills and careers, and defending human rights as its main areas for driving HR initiatives. One of the essential elements of sustainable growth is being future-ready. As part of its core goal, the Company is creating synergy and cultural integration through well-coordinated leadership programs for top leaders. To assist the sales force with products, scientific knowledge, and selling strategies, it has an internal training and development team. Additionally, FDC runs several programs on management effectiveness to enhance personnel skills and leadership potential for sales leadership. The Company is planning to transition its sales team to an e-learning platform in the upcoming fiscal year after seeing the value of contemporary training methods. Self-paced learning will be offered through interactive approaches in the web-based training. In line with the requirements of SEBI listing regulations, FDI has adopted a ''Code of Conduct and Work Ethics Policy and a Whistle Blower Policy’. The policy on whistle blower is uploaded on the Company’s website, i.e., www.fdcindia.com.

CAUTIONARY STATEMENT

The statements, forming a part of this Report, may contain certain forward-looking remarks with the meaning of applicable Securities Law and Regulations. The Company’s actual results, performances, or achievements may differ significantly from any projected results, performances, or achievements due to a variety of variables. Economic conditions on a national and worldwide level, changes to Government laws, the tax system, and other statutes are all significant variables that could have an impact on the Company’s operations.

8. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR

No material changes and commitments affecting the financial position of the Company have been occurred between the end of the financial year to which financial statements relates and the date of this report.

9. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

As per Regulation 34 of the SEBI Listing Regulations, with effect from the financial year 2022-23, the top one thousand listed entities based on market capitalization required to submit a Business Responsibility and Sustainability Report ("BRSR"). Hence, a BRSR of the Company for

Financial year ended March 31, 2023 containing basic information about the Company’s sustainability practices is annexed as "Annexure - A".

10. CONSOLIDATED FINANCIAL STATEMENT

The consolidated financial statements for the year ended March 31, 2023 pursuant to Section 129(3) of the Companies Act, 2013, form part of this Annual Report.

11. SUBSIDIARIES AND ITS OPERATIONS

The Company has 2 (Two) wholly owned Subsidiaries namely FDC Inc., USA and FDC International Limited, UK and 1 (One) Subsidiary, namely Fair Deal Corporation Pharmaceutical SA (Pty) Limited at South Africa. The Financials of the Subsidiary Companies are disclosed in the Consolidated Financial Statements, which forms a part of this Annual Report.

During the year, the Board of Directors has reviewed the affairs of the subsidiaries. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 ("The Act") and the Rules made thereunder a statement containing salient features of the Financial Statements of Subsidiary Companies in the prescribed Form No. ‘AOC-1'' is annexed to this Report as "Annexure - B"

In accordance with the provisions of Section 136 (1) of the Act, the following information has been uploaded on the website of the Company i.e. on https://www.fdcindia. com/financial-result

(a) Annual Report of the Company, containing therein its Standalone and the Consolidated Financial Statement; and

(b) Audited Financial Statement pertaining to the Subsidiary Companies.

The Company does not have any material subsidiary. The Company’s Policy for determining material subsidiaries is available on the Company''s website at https:// www.fdcindia.com/pdf/policies/Policy on Material Subsidiaries.pdf

12. DIRECTORS'' RESPONSIBILITY STATEMENT

As stipulated in Section 134 of the Act (including any statutory modification(s) and/or re-enactment(s) there-off for the time being in force), your Directors subscribe to the "Directors’ Responsibility Statement" and to the best of their knowledge and ability, hereby confirm that:

(a) In the preparation of Annual Accounts for the year ended March 31, 2023, the applicable Accounting Standards have been followed along with proper explanations relating to material departures, if any;

(b) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2023 and of the profit of the Company for the year ended on that date;

(c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) They have prepared the annual accounts on a going concern basis;

(e) They have laid down proper Internal Financial Controls to be followed by the Company and they were adequate and operating effectively; and

(f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

13. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of loans, guarantees and investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, outstanding as on March 31, 2023, are set out in Notes to the financial statements of the Company.

During the year, your Company has not given any Loans or Guarantees or Investments in contravention of the provisions of Section 186 of the Act.

14. AUDITORS AND AUDIT REPORTS:

• Statutory Auditor:

M/S. B S R & Co. LLP Chartered Accountants (Firm Registration No. 101248W/W-100022), were appointed as Statutory Auditors of the Company at the 82nd AGM held on September 22, 2022 to hold office till the conclusion of the 87th AGM.

M/S. B S R & Co. LLP has confirmed that they are not disqualified from continuing as Auditors of the Company.

The Statutory Auditors has given unmodified opinion on the financial statements of the Company i.e. for the year ended March 31,2023. Hence, the Statutory Auditors’ report for Financial Year 2022-23 does not contain any other qualification, reservation or adverse remarks which calls for any explanation from the Board of Directors. The Auditors’ report is

enclosed with the financial statements in the Annual Report.

• Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Act and the Rules made thereunder, the Board of Directors of the Company, on the recommendation made by the Audit Committee, have appointed M/s. Sanjay Dholakia & Associates, Practicing Company Secretary (Certificate of Practice No. 1798), as the Secretarial Auditor to conduct an audit of the secretarial records for the financial year 2023-24, based on consent received from Mr. Sanjay Dholakia.

The Secretarial Audit Report for the financial year 2022-23 is set out in ‘Annexure - C'' to this Report.

The Secretarial Compliance Report received from M/s. Sanjay Dholakia & Associates, for the financial year 2022-23, in relation to compliance of all applicable Securities and Exchange Board of India ("SEBI") Regulations/Circulars/Guidelines issued thereunder, pursuant to requirement of Regulation 24A(2) of the SEBI Listing Regulations, is set out in ‘Annexure - D'' to this Report.

The Secretarial Audit Report for Financial Year 202223 does not contain any qualification, reservation, or adverse remark.

• Cost Auditor:

Pursuant to Section 148(1) of the Act and the Companies (Cost Records and Audit) Rules, 2014, the cost records are required to be maintained by the Company and the same are required to be audited. The Company accordingly maintains the required cost accounts and records.

The Board of Directors on recommendation of the Audit Committee had re-appointed M/s. Sevekari Khare & Associates (Firm Registration No. 000084) Cost Accountants, Mumbai as the "Cost Auditors" of the Company for the Financial Year 2022-23.

Further, the Board of Directors has, upon recommendation of the Audit Committee have reappointed M/s. Sevekari Khare & Associates (Firm Registration No. 000084) Cost Accountants, Mumbai as the "Cost Auditors" of your Company for the Financial Year 2023-24, subject to ratification of their remuneration at the ensuing 83rd (Eighty Third) Annual General Meeting. The said Auditors confirmed their eligibility for appointment and provided their consent to act as the Cost Auditors.

As required under the Act and Rules made thereunder, the requisite resolution for ratification of remuneration of Cost Auditors by the Members has been set out in the Notice of the 83rd Annual General Meeting of the Company.

15. PUBLIC DEPOSITS

The Company has not accepted any deposits falling under the ambit of Section 73 and 76 of the Act and the Rules framed thereunder during the year.

16. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to energy conservation, technology absorption, foreign exchange earnings and outgo, pursuant to Section 134(3)(m) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, is annexed as "Annexure - E" to this Report.

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In the opinion of the Board, all Independent Directors possess the integrity, expertise and experience including the proficiency required for Independent Directors of the Company, fulfill the conditions of independence as specified in the Act and the SEBI Listing Regulations and are independent of the management and have also complied with the Code for Independent Directors as prescribed in Schedule IV of the Act.

During the year, there were no appointments/re-appointments/resignations of any Board Members of the Company except following:

Appointment of Directors:

Appointment of Mr. Vijay Maniar (DIN: 00750905) as a Non-Executive Independent Director for first term of five (5) years effective from August 04, 2022 to August 03, 2027.

Mr. Vijay Maniar is a fellow member of the Institute of Chartered Accountant of (ICAI) who carries 35 years of experience. He was with the assurance practice of S R Batliboi (member firm of EY) for 22 years. Mr. Maniar has extensive experience of managing audits of listed and unlisted corporates (Indian & Multinational) across a multitude of sectors including retail, pharmaceuticals, chemicals, packaging, Hospitality, other manufacturing and real estate.

With his exemplary skillset and knowledge, your Board believes that he will broaden the board’s experience and will be an asset in the growth of the Company.

Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board approved the

Appointment of Mr. Vijay Maniar (DIN: 00750905) for a first term of Five (5) years effective from August 04, 2022 to August 03, 2027. The Shareholders in the Annual General Meeting held on September 22, 2022 had approved Appointment of Mr. Vijay Maniar (DIN: 00750905) as the Non-Executive Independent Director of the Company for a period of 5 (Five) years with effect from August 04, 2022 not liable to retire by rotation.

The Board is of the opinion that Mr. Vijay Maniar possesses relevant experience, expertise and integrity for holding the position of the Independent Director on the Board.

Change in Designation of Directors:

Change in Designation of Ms. Nomita R. Chandavarkar (DIN: 00042332) from Executive Director to NonExecutive Director with effect from April 01, 2022.

Ms. Nomita R. Chandavarkar was re-designated from the position of the Executive Director to Non-Executive & NonIndependent Director of the Company with effect from April 01, 2022. She continues to be on the Board of the Company as Non-Executive & Non-Independent Director.

Retirement by Rotation:

In accordance with provisions of the Act and the Articles of Association of the Company, Mr. Ashok A. Chandavarkar, Executive Director, retires by rotation at the 83rd Annual General Meeting and being eligible, has offered himself for re-appointment. The Profile of Director seeking reappointment pursuant to Regulation 36 of the SEBI Listing Regulations is included in the Notice of the 83rd Annual General Meeting and the statement annexed thereto.

Key Managerial Personnel:

During the year, there were no appointments/re-appointments/resignations of any Key Managerial Personnel of the Company took place.

However, after the year end and up to the date of this Report, Mr. Sanjay B. Jain, ceased to be Chief Financial Officer of the Company w.e.f. April 06, 2023 and Mr. Vijay Dharmadatt Bhatt was appointed as Chief Financial Officer of the Company w.e.f. April 06, 2023.

18. REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT

The remuneration paid to the Directors, Key Managerial Personnel and Senior Management is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 read with Schedule II of the SEBI Listing Regulations.

Disclosure required under provisions of Section 197(12) of the Act read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended is annexed as ‘Annexure-F'' to this report.

Further, the information pertaining to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, i.e. the names and other particulars of employees is available for inspection at the Corporate office of the Company during business hours and pursuant to the second proviso to Section 136(1) of the Act, the Report and the accounts are being sent to the members excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary & Compliance Officer either at the Corporate Office address or by email to investors@ fdcindia.com.

19. CORPORATE GOVERNANCE

Your directors reaffirm their continued commitment to good corporate governance practices. Your Company fully adheres to the standards set out by the Securities and Exchange Board of India for Corporate Governance practices. Your Company has also implemented best governance practices. Your Company also endeavors to enhance long-term shareholder value and respect minority rights in all our business decisions. The report on Corporate Governance as per Regulation 34 (3) read with Para C of Schedule V of the SEBI Listing Regulations is annexed herewith as ‘Annexure - G''. Certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is also attached to the report on Corporate Governance.

20. RISK MANAGEMENT

The Risk Management Committee of the Company has been entrusted by the Board with the responsibility of reviewing the risk management process in the Company and ensuring that the risks are brought within acceptable limits.

The Board of Directors of the Company on the recommendation of the Risk Management Committee has developed Risk Management Policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company and which articulates the Company’s approach to address the uncertainties in its endeavor to achieve its stated and implicit objectives. The details of the Risk Management Committee are included in the Corporate Governance Report.

The Risk Management Policy is placed on the website of the Company at https://www.fdcindia.com/pdf/policies/ Risk Management Policy.pdf

21. NOMINATION AND REMUNERATION POLICY

Pursuant to the provisions of Section 178 of the Act and Regulation 19 of SEBI Listing Regulations and on the recommendation of the Nomination & Remuneration Committee, the Board has adopted the Nomination & Remuneration Policy for selection and appointment of Directors, Senior Management including Key Managerial Personnel (KMP) and their remuneration. The Policy lays down the process and parameters for the appointment and remuneration of the KMPs and other senior management personnel and the criteria for determining qualifications, highest level of personal and professional ethics, positive attributes, financial literacy, and independence of a Director. The details of Remuneration Policy are stated in the Corporate Governance Report. The Nomination & Remuneration Policy is placed on the website of the Company at https://www.fdcindia.com/pdf/policies/ Nomination and Remuneration Policy.pdf.

22. MEETINGS OF THE BOARD AND COMMITTEES THEREOF

During the year, four (4) meetings of the Board of Directors were held. The maximum interval between any two meetings did not exceed 120 days, as prescribed under the Act and the SEBI Listing Regulations. The details of the meetings and attendance of directors are furnished in the Corporate Governance Report which forms part of this Annual Report attached as ‘Annexure - G'' to the Director''s Report.

23. COMMITTEES

As on March 31,2023, The Board has Five (5) mandatory committees under the applicable provisions of the Act and SEBI Listing Regulations namely:

1. Audit Committee

2. Nomination & Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

During the year, all the recommendations of the above Committee’s have been accepted by the Board. A detailed update on the Board, its Committees, its composition, detailed charter including terms of reference of various Board Committees, number of board and committee meetings held and attendance of the directors at each meeting is provided in the Corporate Governance Report, which forms part of the Annual Report.

24. BOARD & DIRECTORS EVALUATION

Pursuant to the provisions of the Act and SEBI Listing Regulations, an evaluation process was carried out to evaluate performance of the Board and its committees, the Chairman of the Board, and all Directors, including Independent Directors. The evaluation was aimed at improving the effectiveness of all these constituents and enhancing their contribution to the functioning of the Board.

In a separate meeting of the Independent Directors, performance of the Non-Independent Directors, and the Board as a whole was also discussed. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report.

25. FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS

All Independent Directors are familiarized with the operations and functioning of the Company at the time of their appointment and on an ongoing basis. The details of the training and familiarization program of Independent Directors are provided in the Corporate Governance Report and is also available on the website of the Company at https://www.fdcindia.com/pdf/ familiarisationprogramme/Familiarisation Programmes for Independent Directors 2022-23.pdf.

26. DECLARATION FROM INDEPENDENT DIRECTORS

The Company has received declarations from all Independent Directors confirming that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations, they have complied with the Code for Independent Directors prescribed in Schedule IV of the Act and they have registered themselves with the Independent Director''s Database maintained by the Indian Institute of Corporate Affairs. During FY 2022-23, there has been no change in the circumstances affecting their status as Independent Directors of the Company.

27. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has a vigil mechanism in place as required under Section 177 of the Act and the SEBI Listing Regulations, for Directors and employees to report their genuine concerns about unethical behavior, actual or suspected fraud, or violation of the Company''s code of conduct, the details of which are given in the Corporate Governance Report.

There were no allegations/ disclosures/ concerns received during the year, in terms of the vigil mechanism

established by the Company. During FY 2022-23, no person was denied access to the Chairperson of the Audit Committee.

The Policy on Vigil Mechanism and Whistleblower is available on the website of the Company and can be accessed through the following web link: https://www. fdcindia.com/pdf/policies/Whistle Blower Policy FDC. pdf

28. CODE OF CONDUCT

The Company has in place a Code of Conduct for Board Members and Senior Management Personnel of the Company. The Code of Conduct lays down the standard of conduct which is expected to be followed by the Directors and the Senior Management Personnel and the duties of Independent Directors towards the Company.

The Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct applicable to them, during the year ended March 31, 2023. A Certificate duly signed by the Mr. Mohan A. Chandavarkar Managing Director and Mr. Ashok A. Chandavarkar, Executive Director, on the compliance with the Code of Conduct is also attached to the report on Corporate Governance. The said Code is available on the website of the Company i.e. https://www.fdcindia.com/pdf/policies/ Code of Conduct of FDC Limited.pdf

29. PREVENTION OF INSIDER TRADING

The Company has in place a Policy on the Code of Conduct for Prevention of Insider Trading with a view to regulate the trading in securities by the Promoters, Directors and the Designated Employees of the Company.

The same has also been uploaded on the website of the Company i.e. https://www.fdcindia.com/pdf/policies/ Code of Conduct for Prevention of Insider Trading.pdf

The Promoters, Directors and the Designated Employees have affirmed compliance with the Company''s Code of Conduct for Prevention of Insider Trading.

30. RELATED PARTY TRANSACTIONS

During the year, all Related Party Transactions entered into by the Company were on an arm''s length basis and in the ordinary course of business. During the year, your Company had not entered into any arrangement / transaction / contract/agreement with its related parties which could be considered material and required approval of the Members. However, the disclosure required under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, is furnished in

"Annexure - H" attached to this report as good disclosure practice.

The Company had adopted policy on Related Party Transactions in compliance with regulation 23 of SEBI Listing Regulations duly approved by board of directors and can be access on website of the Company i.e. at https://www.fdcindia.com/pdf/policies/Policy on Related Party Transactions.pdf

The transactions entered by the Company with its related parties were in compliance with the RPT Policy and in the best interest of the Company. A statement giving details of all Related Party Transactions is placed before the Audit Committee and the Board on a quarterly basis. Omnibus/ Prior approval is also obtained from the Audit Committee on an annual basis for repetitive transactions.

The Related Party Transactions as required under Accounting Standard are reported in the notes to financial statement. Pursuant to Regulation 23(9) of the SEBI Listing Regulations, the Company had filed to the stock exchanges the details of related party transactions on half yearly basis.

31. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is committed to providing a workplace in which the dignity of every individual is respected. The Company has zero tolerance policy for any incident of sexual harassment or inappropriate behavior.

The Company has in place a Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The objective of the policy is to prohibit, prevent or deter the commission of acts of sexual harassment at workplace and to provide procedure for the redressal of complaints pertaining to sexual harassment. The said Policy is available on the website of the Company and can be accessed at https://www.fdcindia.com/pdf/ policies/Sexual Harassment Policy.pdf .

The Company has constituted an Internal Committee to redress the complaints received regarding sexual harassment. There were no complaints received during the financial year ended on March 31,2023.

32. COMPLIANCE WITH SECRETARIAL STANDARD ON BOARD AND GENERAL MEETINGS

Pursuant to the provisions of Section 118 of the Act, the Company has complied with all the applicable provisions of the Secretarial Standard - 1 and Secretarial Standard

- 2 relating to ''Meetings of the Board of Directors’ and ''General Meetings’ respectively.

33. INTERNAL FINANCIAL CONTROLS

The Company has put in place an adequate Internal Financial Control (IFC) system, to ensure compliance with various policies, practices, and statutes. The Company ensures that such IFC systems are commensurate with the size and complexity of our business and are adequate and operating effectively on an ongoing basis.

The Company is complying with all the applicable Indian Accounting Standards (Ind AS) and periodically following all the applicable Indian Accounting Standards for properly maintaining the books of account and reporting Financial Statements. The details in respect of your Company’s IFC and their adequacy are included in the Management Discussion and Analysis Report.

34. DETAILS OF FRAUD REPORTED BY THE AUDITORS

During the year, the Statutory Auditors, Secretarial Auditors and Cost Auditors have not reported any instances of fraud committed in the Company by its officers or employees under section 143(12) of the Act read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.

35. CORPORATE SOCIAL RESPONSIBILITY (CSR)

In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee. The details such as Constitution, Terms of reference, etc. of the Committee and the meetings held during the year are detailed in the Corporate Governance Report, which forms a part of the Annual Report of the Company. The contents of the CSR Policy of the Company as approved by the Board on the recommendation of the CSR Committee are available on the website of the Company and can be accessed through the following web link: https://www.fdcindia.com/pdf/policies/Corporate Social Responsibility.pdf

In accordance with the provisions of Section 135 of the Act, A brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in an "Annexure - I" to this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

36. EXTRACT OF ANNUAL RETURN

In compliance with Section 92(3) and Section 134(3) (a) of the Act and Rules made thereunder, a copy of your Company’s Annual Return as on March 31, 2023, is available on the website of the Company at https://www. fdcindia.com/stock-exchange-compliances

37. TRANSFER OF UNPAID AND UNCLAIMED DIVIDEND AMOUNTS AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In terms of Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force) dividend, if not paid or claimed for a period of 7 (seven) years from the date of transfer to Unclaimed Dividend Account of the Company, is liable to be transferred to the Investor Education and Protection Fund ("IEPF") established by the Government of India. Further, according to the Act read with the IEPF Rules, all the shares in respect of which dividend has not been paid or claimed by the shareholders for 7 (seven) consecutive years or more shall also be transferred to the demat account of the IEPF Authority.

During the year 2022-23, the Company has transferred total unclaimed and unpaid Final dividend of '' 17,25,797/-for the FY 2014-15 to IEPF Authority. Further 32,009 corresponding shares on which dividend were unclaimed for seven consecutive years were transferred to IEPF Authority as per the requirements of the IEPF Rules. The procedure to claim the shares transferred to IEPF accounts is also available on website of the Company at https://www.fdcindia.com/unpaid-divident.

In the interest of the shareholders, the Company sends periodical reminders to the shareholders to claim their dividends in order to avoid transfer of dividends/shares to IEPF Authority. Notices in this regard are also published in the newspapers and the details of unclaimed dividends and shareholders whose shares are liable to be transferred to the IEPF Authority, are uploaded on the Company’s

website i.e. at https://www.fdcindia.com/unpaid-divident. The members, who have not encashed their dividend pertaining to Final Dividend FY 2016-17 and onwards are advised to write to the Company Immediately for claiming dividends declared by the Company.

38. ENVIRONMENT, HEALTH AND SAFETY

The Environment, Health and Safety are a part of the Management responsibilities and concerns. The Company has been providing various kinds of medical assistance to the employees and their families. Periodic health checkups are carried out for all the employees. Employees are also educated on safety and precautionary measures to be undertaken on their job.

39. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant or material orders passed by any regulatory, tribunal or court that would impact the going concern status of the Company and its future operations.

40. ACKNOWLEDGEMENTS

The directors of your Company would like to record by gratitude and appreciation for the continued co-operation and support received from the Medical fraternity, our stakeholders, including the Central and State Government Authorities, Stock Exchanges, Financial Institutions, Bankers, Analysts, Advisors, Local Communities, Customers, Vendors, Business Partners, Shareholders, and Investors forming part of the Company. Let us also take this opportunity to thank our employees, whose enthusiasm, energy, and passion, help us progress along our vision. Your faith and vote of confidence motivate us in pursuing greater opportunities, responsible growth and enhanced delivery on our strategy


Mar 31, 2022

The Board of Directors have pleasure in presenting the 82nd Annual Report together with the Audited Accounts for the year ended March 31,2022.

1. STANDALONE FINANCIAL RESULTS

('' in Lakhs)

Particulars

FY 2021-22 |

FY 2020-21

Revenue from Operations

1,51,896.51

1,32,544.91

Other income

7,873.35

9,714.59

Total Income

1,59,769.86

1,42,259.50

Profit (before finance costs and depreciation / amortization)

32,557.98

42,147.58

Finance costs

304.79

340.22

Depreciation and amortization

3,708.11

3,762.33

Profit before tax

28,545.08

38,045.03

Less: Taxation

-Current Tax

6,800.00

8,451.58

-Deferred Tax

(218.48)

144.49

Profit After Tax

21,963.56

29,448.96

Other Comprehensive Income/ (Loss) for the year

764.62

605.99

Total Comprehensive Income/ (Loss) for the year

22,728.18

30,054.95

Earnings per equity share (Basic & Diluted)

(Face value Re.1)

13.01

17.32

During the year under review your company registered consolidated total income of '' 160401.44 lakhs as compared to '' 143022.90 lakhs in the previous year.

2. BUYBACK OF SHARES

The Board of Directors, at their meeting held on February 09, 2022 had approved a proposal of the Company to buy-back its 29,00,000 fully paid-up equity shares having face value of Re. 1 each from the eligible equity shareholders of the Company who have validly tendered their shares. The buy-back was offered to all eligible equity

shareholders of the Company on proportionate basis through the "Tender offer" route in accordance with SEBI (Buy-back of Securities) Regulations, 2018. The Buyback of equity shares through the stock exchange commenced on April 12, 2022 and was completed on April 27, 2022 and the Company bought back and extinguished a total of 29,00,000 equity shares at a price of '' 475/- per equity share, comprising of 1.71% of pre-buyback paid up equity share capital of the Company. The buyback resulted in a cash outflow of '' 13,775 Lakhs excluding transaction cost, viz. brokerage, applicable taxes such as securities transaction tax, service tax, stamp duty, etc., cost for the intermediaries appointed for the buyback and other incidental costs.

3. DIVIDEND

The Company has not declared Dividend during the Period under review.

The Company has formulated Dividend Distribution Policy which is annexed as "Annexure A" and it is also uploaded on the website of the Company i.e. www.fdcindia.com.

4. SHARE CAPITAL

During the year under review, the paid up Equity Share Capital of the Company as on March 31, 2022 is as follows:

Subscribed and Paid-up share capital :

March 31, 2022 |

March 31, 2021

16,88,10,084 (Previous year 16,88,10,084) Equity shares of Re. 1 each, fully paid-up

16,88,10,084

16,88,10,084

Total:-

16,88,10,084

16,88,10,084

(*The Company had approved Buy Back of 29,00,000 equity shares in the Board Meeting held on February 09, 2022 which was completed on May 09, 2022.)

5. Management Discussion and Analysis

The Management of the Company presents the analysis of the Company’s performance for the financial year ended March 31, 2022, and its outlook for the future. This outlook is based on assessment of the current business environment. It may vary due to future economic and other developments, both in India and abroad.

GLOBAL ECONOMIC OVERVIEW

The economic developments have been encouraging, despite the uncertainties surrounding resurgence of the pandemic and the possible hazards. In 2021, the global economy saw 6.1% GDP growth backed by reduction of infection rates, commercialization and adoption of multiple vaccines, rise in economic activities across regions, resumption of global trade & travel, along with the general rise in public morale. The developing nations witnessed a GDP growth of 6.8% in 2021, while the advanced economies grew by 5.2%.

(Source: World Economic Outlook April, 2022, World Economic Overview 2022)

GLOBAL PHARMACEUTICAL INDUSTRY

The Global Pharmaceuticals market was grew from US$ 1,454.66 billion in 2021 to US$ 1,587.05 billion in 2022, at a CAGR of 9.1%. The growth is mainly due to the companies rearranging their operations and recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach US$ 2,135.18 billion in 2026, at a CAGR of 7.7%.

Global pharmaceutical companies are investing more in development of personalized medicines to offer drugs for customized individual treatment for various diseases. Personalized medicine (also referred to as precision medicine) aims to provide medical care according to the patient’s individual characteristics and genetic makeup. Precision therapies are increasingly being adopted as organizations let go of the one-size-fits-all model for common medical conditions.

(Source: ReportLinker.com Mar’ 22)

INDIAN ECONOMY OVERVIEW

India''s GDP rose to 8.7% in FY 2021-22 after shrinking by 7.3% the previous fiscal year. This has been possible due to widespread vaccination, benefits of supply-side reforms and

regulatory liberalization, sustained export growth, and a boost in capital spending as a consequence of fiscal support.

According to IMF, India is expected to remain the fastest growing major economy in the world during FY 2021-24. This prediction is a result of increased vaccination rates and reduced impact of the pandemic. Increased foreign investments, as well as Government initiatives like Aatmanirbhar Bharat and Production-Linked Incentive (PLI) programs, have provided the economy a much-needed boost, allowing it to recover. India''s GDP is expected to increase by 7.2% in FY 2022-23, according to the Reserve Bank of India (RBI). However, uncertainties regarding the impacts of rising inflation, potential COVID-19 outbreak and geopolitical crisis still remain.

INDIAN PHARMACEUTICAL INDUSTRY

The Indian pharmaceutical market has grown by 18.2% in FY 2021-22 with turnover of '' 1,854 billion. In the last nine years, Indian Pharma sector has grown steadily by CAGR of 9.43%. India’s domestic pharmaceutical market stood at US$ 42 billion in 2021. It is likely to reach US$ 65 billion by 2024 and further expand to reach ~US$ 120 billion by 2030. According to the Indian Economic Survey 2021, the domestic market is expected to grow 3 times in the next decade. Pharma sector has been consistently earning trade surplus. Indian pharmaceutical exports totalled US$ 22.21 billion in FY 2021-22 through February 2022, down from US$ 24.44 billion in FY 202021. The India ayurvedic products market reached a value of '' 515.5 billion in 2021. Looking forward, IMARC Group expects the market to reach '' 1,536.9 billion by 2027, exhibiting a CAGR of 19.78% during FY 2022-27. Indian Pharmaceutical industry is known for its generic medicines and low-cost vaccines globally. Transformed over the years as a vibrant sector, presently the Indian Pharma ranks third in pharmaceutical production by volume. Indian pharmaceutical industry also plays significant role globally. India has the highest number of USFDA-compliant Pharma plants outside of USA. There are 500 API manufacturers contributing about 8% in the global API Industry. In supplying generic medicines India has 20% share in the global supply, manufacturing 60,000 different generic brands across 60 therapeutic categories.

(Source: Department of Pharmaceuticals, PwC, McKinsey, AIOCD AWACS, IQVIA, CII, Annual Report 2021-22 of Govt of India DoP)

COVID-19 Impact Fightback from the Indian Pharmaceutical Industry

The Indian Pharma industry played an important role in meeting the challenges for mitigation of the infection in COVID-19 pandemic. This industry worked in close collaboration with the Government and academic institutes among others to quickly develop and refine manufacturing processes which helped to ensure a consistent supply of medicines needed for the management of COVID-19 (e.g., Remdesivir, Ivermectin, Hydroxychloroquine, Dexamethasone, Tocilizumab, and Favipiravir, among others). Indian drug supplies throughout the pandemic provided relief to over 120 countries for Hydroxychloroquine (HCQ), 20 countries for Paracetamol and about 96 countries for vaccines across the world.

(Source: Annual Report 2021-22 of Govt of India DoP)

Vaccination: As of March 21,2022, more than 181.52 Crore of COVID-19 vaccine doses have been administered across the country. On September 17, 2021, India set a record with 2.5 Crore COVID-19 jabs in one day. In March 2022, a Hyderabad based pharmaceutical company applied for Emergency Use Authorization (EUA) for its COVID-19 vaccine named Corbevax, suitable for 5 to 12 years age group. In September 2021, a Russian-origin vaccine, Sputnik Light, was approved for commencing its Phase 3 trials in India. In January 2022, India''s first intranasal vaccine against COVID-19, developed by Bharat Biotech in association with Washington University School of Medicine in St Louis (the US), began its Phase 3 trials.

Government Initiatives: Union Government agreed/decided to streamline and fastrack the regulatory system for COVID-19 vaccines that have been approved for restricted use by the US FDA, EMA, UK MHRA, PMDA Japan or those listed in the WHO Emergency Use Listing (EUL). This decision is likely to facilitate quicker access to foreign vaccines by India, and encourage imports.

Indian Pharmaceutical Exports

• India is the world’s largest provider of generic medicines and contributes 20% of global generic drug exports (in terms of volumes). Indian drugs are exported to more than 200 countries in the world, with the US being the key market.

• India is the 12th largest exporter of medical goods in the world, including bulk drugs, intermediates, drug formulations, biologicals, AYUSH & herbal products and surgical products, valued at US$ 16.28 billion in FY 202120. India’s drugs and pharmaceuticals exports stood

at US$ 24.44 billion in FY 2020-21 and US$ 22.2 billion between April 2021 to February 2022.

• North America ranked as the largest market for India’s pharma exports in FY 2020-21, with a 34% share and exports to the U.S., Canada and Mexico, recording a growth of 12.6%, 30% and 21.4%, respectively.

• According to a report released in September 2021 by the global consulting firm Kearney in collaboration with the Confederation of Indian Industry (CII), India''s vaccines industry could grow from US$ 2 billion to US$ 5 billion in the next decade, as new Indian and Global Pharmaceutical Companies have started including vaccines as a key part of their portfolios.

• The World Health Organization (WHO), which co-leads COVAX, has been pushing India to resume supplies for the program, particularly after it sent 4 Million doses to neighbours and allies in October 2021.

(Source: Department of Commerce India, Department of Pharmaceuticals, India Business News, Global Trade Atlas, KPMG US-India Dynamic June 2018, Pharmexcil)

Cost Efficiency: Low cost of production and R&D boosts efficiency of Indian pharma companies, leading to competitive exports. Indian drugs and pharmaceuticals exports reached US$ 5.78 billion between April 2021 and June 2021. India’s ability to manufacture high quality, low-priced medicines, presents a huge business opportunity for the domestic industry.

Economic Drivers: Economic prosperity improves drug affordability and increasing penetration of health insurance is expected to drive expenditure on medicine. With increasing penetration of pharmacies, especially in rural India, OTC drug will be readily available to most people.

Policy Support: Government of India approved Production Linked Incentive (PLI) scheme for the pharmaceuticals sector from FY 2020-21 to FY 2028-29. The scheme is expected to attract investments of '' 15,000 Crore (US$ 2.07 billion) into the sector. It is also expected to lead to incremental sales of '' 2,94,000 Crore (US$ 40.63 billion) and exports of '' 1,96,000 Crore (US$ 40.63 billion) between FY 2022-23 and FY 202728. Announced by Finance Minister an additional outlay of '' 197,000 Crore (US$ 26,578.3 Million) to be utilized over five years for the pharmaceutical PLI scheme in 13 key sectors, such as active pharmaceutical ingredients, drug intermediaries and key starting materials.

Industry Growth Drivers

Demand Side Drivers

• Accessibility: New business models are expected to penetrate tier-2 and 3 cities. Over 160,000 hospital beds - expected to be added each year in the next decade. Accounting for 20% of global exports in terms of volume, India’s generic drugs sector is the largest provider of generic medicines, globally.

• Acceptability: Rising levels of education to increase acceptability of pharmaceuticals. Patients to show greater propensity to self-medicate, boosting the OTC market. Acceptance of biologics and preventive medicines to rise. Furthermore, medical tourism is expected to witness a demand surge due to increased patient inflow from other countries

• Epidemiological Factors: The number of patients is likely to increase over 20% in the next 10 years (until 2030), mainly due to higher population. Moreover, a changed lifestyle resulting in diseases, mostly unknown, are expected to infuse demand in the pharmaceutical industry.

(Source: ICRA Report on Indian Pharmaceutical Sector, Pharmaceutical Industry: Developments in India- Deloitte, Mckinsey Pharma Report 2020)

Supply Side Drivers

• Medical Infrastructure: Pharma companies are spending more on tapping rural markets and developing better medical infrastructure. The market size of the hospitals is likely to increase by US$ 200 billion by 2024. India’s medical devices market stood at US$ 10.36 billion in FY 2019-20. This market is predicted to increase at a CAGR of 37% from 2020 to 2025, reaching US$ 50 billion.

• Scope in Generic Market: India’s generic drugs account for 20% of global exports in terms of volume, making it the largest provider of generic medicines, globally. The generics drug market accounts for around 70% of the India pharmaceutical industry. India supplies more than 40% generics to the US market.

• OTC: India’s OTC drugs market stood at US$7.62 billion in 2021 and is estimated to grow at a CAGR of 19.4% to reach US$ 18.49 billion in 2026, driven by a shift in consumer attitudes towards self-medication, product advancements and pharmaceutical preferences for OTC drugs over prescription drugs.

• Patent Expiry: Over the next decade, approximately 120 drugs are expected to go off-patent with a forecasted worldwide revenue of between US$ 80 to US$ 250 billion.

(Source: BMI, India Biz, Nicholas Hall & Company, IQVIA) Opportunities in Healthcare

• Healthcare Infrastructure: Additional three Million beds will be needed for India to achieve the target of 3 beds per 1,000 people by 2025. Also, India will have one doctor to every 800 patients by 2030. Additional 1.54 Million doctors and 2.4 Million nurses will be required to meet the growing demand for healthcare. By 2025, 58,000 job opportunities are expected to be generated in the healthcare sector, while over US$ 500 billion is expected to be spent on medical infrastructure by 2030. India has made strategic interventions in National Health Mission and the national disease control programs over the years, to ensure quality and affordable healthcare for all.

• Health Tech: India currently holds the fourth position in attracting VC funding to the health-tech sector, with investments of US$ 4.4 billion between 2016 and 2021, with US$ 1.9 invested in 2021 alone. A start-up named HealthifyMe, garnered a total user base of 30 Million people, is adding half a Million new users every month and crossed US$ 40 Million ARR in January 2022. In June 2021, Tata Digital Limited, a 100% subsidiary of Tata Sons Private Limited, announced that it will acquire a majority stake in the digital health company ''1mg’.

• Clinical Trial Market: India is among the leaders in the clinical trial market. Due to a genetically diverse population and availability of skilled doctors, India has the potential to attract huge investments to its clinical trial market. In October 2021, an Indian company launched a Clinical Data and Insights (CDI) division to further strengthen its global presence and manage data-related aspects of its clinical trials. In November 2021, US-based company announced that it will start the clinical trial of its second generation COVID-19 vaccine ''AKS-452’ in India soon.

• Crams: The Contract Research and Manufacturing Services industry (CRAMS) is expected to reach US$ 20 billion by 2024 and is expected to grow at a CAGR of 12%. Presently, this market has a presence of more than 1,000 players.

(Source: BMI, Drug Controller General of India)

Industry Risks and Outlook

According to the Economic Survey, spending on the health sector increased by approximately 73% from '' 2.73 Lakhs Crore in FY 2019-20 (pre-COVID-19) to '' 4.72 Lakhs Crore (BE) in FY 2021-22 (Source: https://economictimes.indiatimes. com/news/india/economic-survey-govt-spending-on-public-

healthcare-rose-73-last-year/articleshow/89257199.cms). The Government has been taking initiatives to drive the growth of the pharmaceutical market in India. Several steps have also been taken by the Government to reduce costs and bring down healthcare expenses. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. Additionally, the thrust on rural health programs, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies. Finally, the Indian pharmaceutical industry has been relatively resilient to the COVID-19 disruption and is poised to gain from favourable currency tailwinds and stable outlook for India and US business.

COMPANY OVERVIEW

FDC Limited is an established player in the pharmaceutical industry and a pioneer in developing specialized formulations. The Company is a market leader in the Oral Rehydration Salt category along with ophthalmic range of solutions. The Company’s R&D facility is the backbone of its affordable and highly efficient products across categories. It enjoys active operational base in India as well as abroad. During FY 202122, FDC Limited earned a total revenue of '' 1597.69 Crore out of which revenue from export stood at '' 210 Crore.

SEGMENT WISE / PRODUCT WISE PERFORMANCE DOMESTIC

FDC Limited grew by 19%, where leader’s Zifi & Electral crossed '' 300 Crore. Barrier & Enerzal reached '' 125 Crore while Zathrin grew significantly by 51%. During the year, the Company’s Anti Infective, Gastro-Intestinal, Vits/ Mins/ Nutri, Ophthal and Cardiac segments performed well, registering growth of 35%, 19%, 22% and 11%, respectively. In FY 202021, the incremental value measuredly came from Anti Infective, Gastro-Intestinal & Vits/Mins/Nutri.

The Indian Pharma Market has grew by 18% in FY 2021-22. The growth was sharper in April 2021 and May 2021 at 61% and 53% respectively. All Therapies have grown double digit except Anti Diabetic. However from June 2021 onwards, the IPM maintained double digit growth till January 22.

Due to 2nd wave of the pandemic in Q1 21-22 Anti-Viral Market had grown but suddenly dropped down from Q2 due to slow down of COVID-19 cases.

Brand Electral Completed 50 years in the market and maintains 1st position and touched Rs. 300 Crores in IPM & grew at 21%.

(Source: IQVIA Secondary Sales Audit Mar’ 22)

EXPORTS

USA

The Company is more focused on the US market, which is the largest market for generics products. FDC’s US business derives benefit of vertical integration with most of the business’s commercial formulations integrated with in-house APls supplied from its USFDA-approved Roha plant. This helps the Company to reduce the costs and maintain optimal efficiency. In the Company’s US generics business, it witnessed pricing pressure in some of the product categories despite which in FY 2021-22, the United States continued to be the single-largest pharmaceutical market in international business. During the year, the Company received ANDA-approval of Ofloxacin Otic solution 5 ml & 10 ml, which it plans to launch in the US market in FY 2023-24. With the market scenario slowly stabilizing in the US, FDC is confident of sustaining the momentum in the world’s largest pharmaceutical market.

UK

The Company has its own subsidiary in the UK market with stable sales over the past years.

LATIN AMERICA & MIDDLE EAST

The business is gradually expanding in emerging markets like Latin America & the Middle East, which grew significantly by 22% in FY 2021-22.

The UAE market successfully opened in FY 21-22, with export of its flagship product ''Electral’, after securing registration from the Ministry of Health and Prevention of UAE.

It also commercialized Gentamicin 0.3% Eye Drops in own label of a marketing company in Peru market. Its growth will be driven by new dossier filings and product launches in these key markets.

Asia

In the Financial Year 2021-22, the business from Asia was majorly from New Zealand, Australia, Hong Kong and Malaysia. New Zealand market has been a major contributor for FDC’s Asia business over the period of years & also in FY 2021-22.

FDC has generated Finished Formulation growth of 92% in Myanmar with its flagship brand Electral. To accelerate the growth, the Company is also investing in marketing and brand promotion activities of Electral in Myanmar.

Over 70% of the total business in Asia was contributed by the top 10 products. Ophthalmic, followed by ORS, are the two prime categories on which FDC’s export business thrives on.

The top 10 products comprise of Ophthalmic category products like Latanoprost Eye drops, Dorzolamide Eye drops

& Olopatadine Eye Drops . In the ORS category comes FDC’s flagship brand Electral and Flunarin in OSD category. Going forward, for the first time, the Company is also planning to establish its business into niche segments of CE mark Ophthalmic Medical Devices in Malaysia and Australia. In addition, the Company is gradually expanding in emerging markets of CIS region such as Uzbekistan, Russia, Ukraine and Moldova.

Africa

In FY 2021-22, Africa region registered a business of '' 25.66 Crore, contributing 26% to overall exports. This region is growing at CAGR of 41% (FY 2016-17 to FY 2021-22). FDC’s Presence is in 21 countries, with the top countries contributing (Ethiopia/Tanzania/Zimbabwe/Botswana/ Uganda) 84% of regional sales. The successful launch of Electral Zinc kits enabled the Electral brand to register a CAGR of 66% (FY 201617 to FY 2021-22).

RESEARCH AND DEVELOPMENT Formulations

The objective of the R&D Formulations team at FDC limited is to develop quality products at affordable prices. The team constantly innovates to develop top-quality pharmaceutical products for the domestic and global markets. The scientists are engaged in developing new products using innovative technologies and robust development strategies. A stimulating work environment provides the impetus to deliver the best. There is a constant thrust to address patient needs, and efforts to develop products for their treatment are undertaken and delivered with utmost priority. The team has successfully developed and transferred challenging complex products from the laboratory to the commercial level.

Key highlights:

• Commercialization of challenging MUPS (Multi unit particulate systems) at plant scale

• Improvement in process efficiency and yield for Cephalosporin range of products at Baddi, using more advanced technique and machinery - Zifi 200, Zefu 250/500, Zipod 200, Zipod CV 200, Zefu CV 500

• ANDA Exhibit Batches of Pilocarpine Ophthalmic Solution 2%, Pilocarpine Ophthalmic Solution 4%, Olopatadine Ophthalmic Solution 0.2% and Cefpodoxime Proxetil Tablets 100mg and 200mg (as part of CMO)

• ANDA approval for Ofloxacin Otic 0.3%

Synthetics

The Research and Development centre located at Kandivali

(Mumbai) engages in process development of niche products, particularly in area of Ophthalmic, Antihypertensive, Antifungal, Anti diabetic, Antihistaminic, Bronchodilator, Antibacterial and New Chemical entity (NCE).

The work on synthesis of generic Peptide molecules for treatment of Leukoderma (skin Pigmentation), Osteoporosis and Anti diabetic are also being carried out. These initiatives are aimed at cost effectiveness, backward integration and meeting regulatory requirement, to attain accreditation from various World Drug Regulatory Authorities.

Other highlights of the process developments of generic drug molecules are:

• Non-infringing processes

• Usage of environment-friendly chemicals

• Application of green chemistry principles for protection of environment and reduces aqueous effluents

• Development of desired polymorphs

• Usage of classical chemistry for development of chiral drugs

• Advanced state-of-the-art new flash and preparative chromatography technique for enhancing purity and yield on commercial scale

• Implementation of electronic laboratory notebook software with 21 CFR compliance for recording daily experiments; moving towards state-of-the-art 21 CFR compliant R&D centre

• Scale-up and technology transfer activities, ensuring overall chemical safety and protection of inventions through intellectual property rights, i.e., patents

• Life-cycle management of existing products from green chemistry point of view, yield improvement and cost reduction

• Selective enzymatic process for single required isomer Nutraceuticals

R&D foods, majorly formulates Nutraceuticals products which include liquid and other food products derived from food sources that offer additional health benefits besides their basic nutritional value. There is growing recognition of the potential role for nutraceuticals and dietary supplements in helping to reduce health risks and improve health quality. In the global market, nutraceuticals and functional foods have become one of the fastest-growing segments. Hence, the R&D team constantly delivers market research, and new formulation according to ongoing trend, with cost effective solutions.

Key highlights:

• Enerzal Blitz launched

• Enerzal Zero in powder format trial & Stability completed

• Zefrich RTD 10gm protein trial completed, product stable launch activity initiated

• Infant Milk substitute formulation for MumMum 1, MumMum 2, Simyl MCT, Simyl LBW Trials completed to match the specifications and requirements as per Foods for Infant Nutrition Regulation of FSSAI, also addition changes done according to market trend by completely removing sugar from product

• Immunity Boosting drink trials completed

• Zefrich Advance trial completed with DHA and new flavour vendor developed for Milk masala

• Artwork revision for Enerzal, Zefrich, IMS, Humyl, Zefrich RTD for all SKU’s completed as per new packaging and Labelling regulation

• Other products such as, Enerzal Powder Fortification with Natural Vitamin C & ZINC, Enerzal Colour Incorporation, Enerzal & Enerzal Zero Carbonation, and Simyl MCT Oil fortification, among others, under development

Biotechnology

Third Generation Thrombolyte Project

The Company has signed a master service agreement with new external party to develop the Purification strategy for Reteplase molecule. It performed the upstream processing on few batches at lab scale (10L capacity) in its R&D Bioprocess facility and forwarded the cell paste and inclusion bodies to the external party for further processing. The party has completed the first and second milestone i.e., Literature search, and feasibility analysis and solubility screening studies at shake flask level. The party is getting positive response in the third milestone i.e., solubility screening study at Bio-reactor level, to obtain the best process condition for soluble expression and scale-up at Bioreactor level. This will simplify the purification strategy way-forward and hence, economise the process.

Microbial Testing Lab

MTL has completed the testing of racemic mixture and single polymorph sample of NCEs TNF-18 and HY-27. The single polymorph samples showed activity better than the racemic mixture NCEs. The large quantity samples of single polymorph NCEs - TNF-18 and HY-27, were handed over to R & D Formulation for further formulation activity after reconfirmation

of the anti-fungal activity. Excipient compatibility and BCS solubility studies for both these molecules are underway at R&D formulation department.

FINANCIAL PERFORMANCE HIGHLIGHTS

In FY 2021-22, the Company registered a standalone total income of '' 1,59,769.86 Lakhs compared to '' 1,42,259.50 Lakhs in the previous year. The Earnings before Interest and Depreciation amounted to '' 32,557.98 Lakhs in FY 2021-22 as compared to '' 42,147.58 Lakhs in the previous year. The Net Profit after Taxation stood at '' 21,963.56 Lakhs in FY 2021-22 as compared to '' 29,448.96 Lakhs in the previous year. On a consolidated basis, the Company registered a total income of '' 1,60,401.44 Lakhs in FY 2021-22 as compared to '' 1,43,022.90 Lakhs in the previous year.

Financial Ratios

FY 2020-21

FY 2021-22

Difference

% Change

Debtors Turnover Ratio (days)

30

19

(11)

(36)

Inventory Turnover Ratio (days)

59

73

14

24

Interest Coverage Ratio (times)

124

107

(17)

(14)

Current Ratio

4.57

3.65

(1)

(20)

Debt Equity Ratio

-

0.01

0

0

EBIDTA Margin (%)

32

21

(0)

(33)

Net profit Margin (%)

22

14

(0)

(34)

INTERNAL FINANCIAL CONTROL AND ADEQUACY

The Company believes that internal control is a prerequisite of governance and that action emanating out of agreed business plans should be exercised within a framework of checks and balances. The Company has a well- established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls. The Management is committed to ensuring an effective internal control environment, commensurate with the size and complexity of the business, which provides an assurance on compliance with internal policies, applicable laws, regulations and protection of resources and assets.

The Company has an internal audit department which carries out audits throughout the year and appropriate actions are taken by the Management based on their recommendations.

HUMAN RESOURCE

We are fully committed to giving its employees a safe, secure, and healthy working environment. It consistently aims to

outperform both external and internal benchmarks set by the industry in terms of employee performance and productivity. The goals and philosophies of the organization are intimately related to the professional ambitions for individuals and teams at all levels. This communicates and gives all employees a sense of direction and purpose. The Company places a lot of emphasis on developing a culture of inclusiveness and respect, making sure the workplace is safe, concentrating on developing skills and careers, and defending human rights as its main areas for driving HR initiatives. One of the essential elements of sustainable growth is being future ready. As part of its core goal, the Company is creating synergy and cultural integration through well-coordinated leadership programs for top leaders. For the purpose of assisting the sales force with products, scientific knowledge, and selling strategies, the Company has an internal training and development team. Additionally, the Company runs a number of programs on management effectiveness to enhance personnel skills and leadership potential for sales leadership. FDC is planning to transition its sales team to an e-learning platform in the upcoming fiscal year after seeing the value of contemporary training methods. Self-paced learning will be offered through interactive approaches in the web-based training. In line with the requirement of SEBI listing regulations, the Company has adopted a ''Code of Conduct and work ethics policy and Whistle Blower Policy’. The policy on Whistle Blower is uploaded on the Company’s website i.e., www.fdcindia.com.

CAUTIONARY STATEMENT

The statement, forming a part of this Report, may contain certain forward-looking remarks with the meaning of applicable Securities Law and Regulations. The Company''s actual results, performances, or achievements may differ significantly from any projected results, performances, or achievements due to a variety of variables. Economic conditions on a national and worldwide level, changes to government laws, the tax system, and other statutes are all significant variables that could have an impact on the Company''s operations.

6. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which financial statements in this report relates and the date of this report.

7. AUDITORS REPORT

The report given by B S R and Co. LLP Statutory Auditors

on the Financial Statement of the Company for the year ended March 31, 2022 is a part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in the said audit Report.

8. CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statement of the Company forms part of this Annual Report. This statement has been prepared on the basis of Audited Financial Statement received from the subsidiary companies as approved by their respective Board of Directors.

9. SUBSIDIARIES AND ITS OPERATIONS

The Company has 2 (Two) wholly owned Subsidiaries namely FDC Inc., USA and FDC International Limited, UK and 1 (One) Subsidiary, namely Fair Deal Corporation Pharmaceutical SA (Pty) Limited, South Africa. The Financials of the Subsidiary Companies are disclosed in the Consolidated Financial Statements, which forms a part of this Annual Report.

A statement containing salient features of the Financial Statements of Subsidiary Companies is annexed to this Report as "Annexure B" pursuant to the provisions of Section 129 of the Companies Act, 2013 and the Rules made thereunder in the prescribed Form No. AOC-1 and hence, the same is not repeated for the sake of brevity.

In accordance with the provisions of Section 136 (1) of the Companies Act, 2013, the following information has been uploaded on the website of the Company i.e., www. fdcindia.com

(a) Annual Report of the Company, containing therein its Standalone and the Consolidated Financial Statement; and

(b) Audited Financial Statement pertaining to the Subsidiary Companies.

10. BUSINESS RESPONSIBILITY REPORT

As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report is annexed as "Annexure C". Further, the report on Environmental and Social matters across the Company is annexed thereto.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors state that:

(a) In the preparation of Annual Accounts for the year

ended March 31, 2022, the applicable Accounting Standards have been followed along with proper explanations relating to material departures, if any;

(b) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31,2022 and of the profit of the Company for the year ended on that date;

(c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) They have prepared the annual accounts on a going concern basis;

(e) They have laid down proper Internal Financial Controls to be followed by the Company and they were adequate and operating effectively; and

(f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

12. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantees and Investments made by the Company are given in the notes to the Financial Statement.

Your Company has not given any Loans or Guarantees or Investments in contravention of the provisions of Section 186 of the Companies Act, 2013.

13. PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposits from the Public and as such no amount of principal or interest on deposits from Public was outstanding as on the date of the Balance Sheet.

14. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to energy conservation, technology absorption, foreign exchange earnings and outgo, pursuant to Section 134 of the Companies Act,

2013 and the Rules made there under, is annexed as "Annexure D" to this Report.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under review, there were no appointments/ resignations of any Board Members of the Company.

Re-appointment of Directors:

The Shareholders in the Annual General Meeting held on September 29, 2021 had approved re-appointment of CA Uday Kumar Gurkar as the Independent Director of the Company for a further period of 5 (Five) years with effect from April 01,2021.

Appointment of Chairman of the Board:

CA. Uday Kumar Gurkar continues to be the Chairman of the Board pursuant to his re-apointment.

Appointment and Resignation of Directors:

During the year under review, there were no new Appointments or Resignation of Directors.

Ms. Nomita R. Chandavarkar has stepped down from the position of the Executive Director to Non-Executive Director of the Company with effect from April 01,2022. She continues to be on the Board of the Company as Non-Executive Non-Independent Director and hence Ms. Nomita Chandavarkar was re-designated as NonExecutive Non-Independent Director of the Company with effect from April 01,2022.

Retirement by Rotation:

In accordance with provisions of the Companies Act, 2013 and the Articles of Association of the Company, Ms. Nomita R. Chandavarkar, Non-Executive NonIndependent Director, retires by rotation at the 82nd Annual General Meeting and being eligible, has offered herself for re-appointment. The Profile of Director seeking reappointment pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Notice of the 82nd Annual General Meeting and the statement annexed thereto.

Key Managerial Personnel:

In terms of Section 203 of the Act, the following are the Key Managerial Personnel (KMP) of the Company as on March 31,2022:

1. Mr. Mohan A. Chandavarkar, Managing Director

2. Mr. Sanjay B. Jain, Chief Financial Officer

3. Ms. Varsharani Katre, Company Secretary & Compliance Officer

During the year, no KMP has been appointed or has retired or resigned.

16. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Information pursuant to Rule 5(1), (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as "Annexure E".

17. CORPORATE GOVERNANCE

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance along with a Compliance Certificate issued by the Statutory Auditors of the Company, forms part of the Annual Report.

18. RISK MANAGEMENT

The Risk Management Committee identifies and evaluates the business risks, in addition to overseeing the Risk Management Policy of the Company, from time to time. The details of the Risk Management Committee are included in the Corporate Governance Report.

The Risk Management Policy is placed on the website of the Company through web link http://www.fdcindia.com/ admin/images/Risk_Management_Policy.pdf

19. NOMINATION AND REMUNERATION POLICY

Your Company has in place, a Nomination and Remuneration Policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Team.

The details of this Policy are provided in the Corporate Governance Report and the same is also available on the website of the Company through:

http://www.fdcindia.com/admin/images/Nomination_&_

Remuneration_Policy.pdf

20. MEETINGS OF THE BOARD AND COMMITTEES THEREOF

The information has been furnished in the Corporate Governance Report.

21. AUDIT COMMITTEE

The Audit committee reviews all the information that

is required to be mandatorily reviewed by it under the Corporate Governance and other matters as per terms of reference to Audit Committee, inter-alia, covers all the matters specified under Section 177 of the Companies Act, 2013 and also all the matters listed under Part C of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Audit Committee of the Board as on March 31,2022 comprises 2 (Two) Non- Executive Independent Directors and 1 (One) Executive Director. CA. Swati S. Mayekar is the Chairperson of the Committee. CA. Uday Kumar Gurkar and Mr. Mohan A. Chandavarkar are the other members of the committee. The Company Secretary acts as the Secretary to the Committee. The CFO is the permanent invitee to the Committee meeting. The Internal Auditor and the concerned partners/ authorized representatives of Statutory Auditors are regular invitees of the Committee meetings.

The Powers and Role of the Audit Committee are provided in the Corporate Governance Report. All recommendations made by the Audit Committee were accepted by the Board of Directors.

22. BOARD & DIRECTORS EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the Annual Performance, Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and Compliance Committees, based on the evaluation parameters formulated by the Nomination and Remuneration Committee. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report.

23. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

The Independent Directors are familiarized with their roles, rights, responsibilities of the Company, the business model of the Company, etc., through various programmes on a continuous basis.

24. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has in place a Whistle Blower Policy for reporting genuine concerns or grievances on fraud and mismanagement. The said Policy is explained in detail in the Corporate Governance Report.

The Company has not denied any person from accessing the Audit Committee. There were no allegations/ disclosures/ concerns received during the year under review, in terms of the vigil mechanism established by the Company. The said Policy is also uploaded on the website of the Company: http://www.fdcindia.com/ admin/images/Whistler_Blower_Policy.pdf

25. CODE OF CONDUCT

The Company has in place a Code of Conduct for Board Members and Senior Management Personnel of the Company. The Code of Conduct lays down the standard of conduct which is expected to be followed by the Directors and the Senior Management Personnel and the duties of Independent Directors towards the Company.

The Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct applicable to them, during the year ended March 31, 2022. A Certificate duly signed by the Managing Director and Mr. Ashok A. Chandavarkar, Executive Director, on the compliance with the Code of Conduct is given in the Corporate Governance Report. The said Code is available on the website of the Company i.e. http://www.fdcindia. com/admin/images/Code_of_Conduct_of_FDC_Limited. pdf

26. PREVENTION OF INSIDER TRADING

The Company has in place a Policy on the Code of Conduct for Prevention of Insider Trading with a view to regulate the trading in securities by the Promoters, Directors and the Designated Employees of the Company.

The same has also been uploaded on the website of the Company i.e. http://www.fdcindia.com/admin/images/ Code_of_Conduct_for_Prevention_of_ Insider_Trading.pdf

The Promoters, Directors and the Designated Employees have affirmed compliance with the Company''s Code of Conduct for Prevention of Insider Trading.

27. RELATED PARTY TRANSACTIONS

During the year under review, all Related Party Transactions entered into by the Company were on an arm''s length basis and in the ordinary course of business. Your Company has not entered into any contract, arrangement or transaction with any Related Party which would be considered as the material under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board has also approved a policy on Related Party

Transactions and the same has been uploaded on the Website of the Company i.e. http://www.fdcindia.com/admin/images/ Policy_on_Related_Party_Transactions.pdf

A statement giving details of all Related Party Transactions is placed before the Audit Committee and the Board on a quarterly basis. Omnibus prior approval was also obtained from the Audit Committee and the Board on an annual basis for repetitive transactions.

The Related Party Transactions as required under Accounting Standard are reported in the notes to financial statement The particulars as required under Section 134(3)(h) of the Companies Act, 2013 are furnished as “Annexure - F" to this report.

28. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN OF WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a Policy on the Prevention, Prohibition and Redressal of Sexual harassment at workplace in line with the requirements of The Sexual Harassment of Women of Workplace (Prevention, Prohibition and Redressal) Act, 2013. The said Policy is available on the website of the Company.

An internal Sexual Harassment Committee has also been set up to redress the complaints received regarding sexual harassment. The Company has not received any complaints during the year under review.

29. AUDITORS AND AUDIT REPORTS

a. STATUTORY AUDITORS

The Auditor''s report for the year under review does not contain any qualifications, reservations or adverse remarks.

The existing Statutory Auditors of the Company i.e. M/s. BSR & Co. LLP hold office upto the ensuing 82nd Annual General Meeting and are eligible for re-appointment thereafter, under the provisions of Section 139 of the Companies Act, 2013, as they had completed the tenure of Five (5) years.

The Board recommended the re-appointment of BSR & Co. LLP Chartered Accountants., as the Statutory Auditors at the ensuing Annual General Meeting, to hold office for a period of 5 (Five) years, from the conclusion of the 82nd Annual General Meeting till the conclusion of the 87th Annual General Meeting of the Company to be held in the year 2027.

b. COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audits) Rules, 2014, the Board of Directors on the recommendation of the Audit Committee have re-appointed M/s. Sevekari Khare & Associates (Firm Registration No. 000084) Cost Accountants, Mumbai, as Cost Auditors of the Company, to carry out the audit of cost records of the Company, to carry out the audit of cost records of the Company. The said Auditors confirmed their eligibility for appointment as Cost Auditors.

As required under the Companies Act, 2013 and Rules made thereunder, the requisite resolution for ratification of remuneration of Cost Auditors by the Members has been set out in the Notice of the 82nd Annual General Meeting of the Company.

The Cost Audit Report for the Financial Year ended March 31, 2022 was filed with the Ministry of Corporate Affairs within the prescribed time.

c. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, the Company had appointed M/s. Sanjay Dholakia and Associates (PCS No.1798), Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended March 31, 2022. The Secretarial Audit Report is annexed as "Annexure G" to this Report. There is no qualification, reservation, adverse remark or disclaimer in the said Report.

30. COMPLIANCE WITH SECRETARIAL STANDARD ON BOARD AND GENERAL MEETINGS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on Board and General Meetings.

31. DETAILS OF FRAUD REPORTED BY THE AUDITORS

During the year under review, the Statutory Auditors, Secretarial Auditors and Cost Auditors have not reported any instances of fraud committed in the Company by its officers or employees to the Audit Committee under section 143(12) and Rule 13 of the Companies (Audit and Auditors) Rules, 2014 of the Companies Act, 2013.

32. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has always been a socially responsible corporate citizen who is well aware and sensitive to the needs of the underprivileged people around it. During the year under review, the Company has undertaken various socio-economic activities such as organizing Nutritional Programmes, environmental awareness, improving water resources/ structure in the villages surrounding Plant sites, Constructing Toilets at Schools/Backward regions, etc. directly as well as through Trust and NonGovernmental Organization.

Your Company is doing its best to undertake various needs based activities in compliance with Schedule VII to the Companies Act, 2013.

The CSR policy is available on the website of the Company i.e. http://www.fdcindia.com/admin/images/Corporate_ Social_Responsibility.pdf.

In accordance with the provisions of Section 135 of the Companies Act, 2013, an abstract on the Company''s CSR activities is appended as "Annexure H" to this report.

33. EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92 of the Companies Act, 2013 and the amendment made thereunder, the form MGT 9 shall be provided through web-link. and the same is available on the Website of the Company. i.e. www. fdcindia.com

34. TRANSFER OF UNPAID AND UNCLAIMED DIVIDEND AMOUNTS AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company has been sending reminders to those Members having unpaid/unclaimed dividends before transfer of such dividend(s) to IEPF. Details of the unpaid/ unclaimed dividend are also uploaded on the Company''s website i.e. www.fdcindia.com.

The Members, who have not encashed their dividend pertaining to Final Dividend FY 2014-15 and onwards, are advised to write to the Company immediately for claiming dividends declared by the Company.

In view thereof, after complying with the prescribed procedure, 49,223 shares on which dividend remained unclaimed for 7 (Seven) consecutive years, were transferred to IEPF account in the financial year 202122. Your Company has uploaded the details of such Shareholders whose shares are transferred to IEPF

account on the website of the Company i.e. www.fdcindia. com. The procedure to claim the shares transferred to IEPF account has also been uploaded on the website.

35. ENVIRONMENT, HEALTH AND SAFETY

The Environment, Health and Safety are a part of the Management responsibilities and concerns. The Company has been providing various kinds of medical assistance to the employees and their families. Periodic health checkups are carried out for all the employees. Employees are also educated on safety and precautionary measures to be undertaken on their job.

36. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant or material orders passed by any regulatory, tribunal or court that would impact the going concern status of the Company and its future operations.

37. ACKNOWLEDGEMENTS

Your Directors would like to express and place on record their sincere appreciation for the continued co-operation and support received from the Medical fraternity, Government Authorities and Agencies, Stock Exchanges, Financial Institutions, Investors, Bankers, Consumers, Vendors and Members, during the year under review. Your Directors also place on record their appreciation for the hard work and contribution of all the employees of the Company.


Mar 31, 2018

To,

The Members

The Directors have pleasure in presenting the 78th Annual Report together with the Audited Accounts for the year ended March 31, 2018.

1. STANDALONE FINANCIAL RESULTS

(Rupees in lakhs)

Particulars

2017-2018

2016-2017

Revenue from operations

(Net)

1,07,021.23

1,04,602.34

Other income

5,124.75

4,964.51

Profit (before finance

costs and depreciation

/amortization)

27,034.83

28,571.39

Finance costs

140.26

140.71

Depreciation and

amortization

3,503.90

3,452.33

Profit Before Tax

23,390.67

24,978.35

Less: Taxation

- Current Tax

6780.00

6,800.00

- Deferred Tax

(220.74)

(334.41)

- Tax adjustments for

earlier years

(Current Tax)

-

(193.98)

Profit After Tax

16,831.41

18,706.74

Other Comprehensive

Income/(Loss)

for the year

(27.61)

12.55

Total Comprehensive

Income/(Loss)

for the year

16,803.80

18,719.29

Earnings per equity share

(Basic & Diluted)

(Face value Re.1)

9.47

10.52

The previous year’s figures have been re-grouped/reclassified, wherever necessary to conform to this year’s financial statements prepared in accordance with Ind AS (Indian Accounting Standards).

2. DIVIDEND

In order to conserve the resources of the Company and to build up reserves and considering the business plans of the Company, your Board of Directors do not recommend payment of Dividend on the Equity Shares, for the Financial Year 2017 - 2018.

As per Regulation 43A of the SEBI Listing Regulations, the Company has formulated a Dividend Distribution Policy which is annexed as Annexure A and is also uploaded on the website of the Company i.e. www.fdcindia.com.

3. SHARE CAPITAL

During the year under review, the paid up Equity Share Capital of the Company as on March 31, 2018 is Rs. 174,403,084/- comprising of 174,403,084 equity shares of Re. 1/- each. Details of changes in the paid-up share capital after Buyback of equity share capital are as under:

Sr. No.

Particulars

No. of Equity Shares of Re.1 each

1.

No. of Equity Shares as on March 31, 2017 (Pre - Buyback)

177,833,084

2.

Less: Shares Bought back (during February 07, 2018 to March 29, 2018)

3,430,000

3.

No. of Equity Shares as on March 31, 2018 (Post - Buyback) (i.e. 1-2)

174,403,084

4. BUYBACK OF SHARES

The Board of Directors of FDC Limited in their meeting held on February 07, 2018 had given their approval for Buy Back of the Company’s fully paid-up equity shares of Re. 1 each from the Tender offer through Stock Exchange route, of upto 3,430,000 (Thirty Four Lakh Thirty Thousand only) fully paid up equity shares of face value of Re. 1 each of the Company at a price of Rs. 350/- (Rupees Three Hundred Fifty only) per Share payable in cash for an aggregate Buyback consideration not exceeding Rs. 120.05 Crores (Rupees One Hundred Twenty Crores Five Lakhs Only) excluding transaction cost, viz. brokerage, applicable taxes such as securities transaction tax, service tax, stamp duty, etc., cost for the intermediaries appointed for the buyback and other incidental costs.

The Board of Directors are pleased to inform that in line with the said approval, the Company completed the extinguishment of 3,430,000 Equity Shares comprising of (i) 3,429,951 Equity Shares in dematerialized form on March 28, 2018 and (ii) 49 equity shares in physical form on March 29, 2018 which were accepted pursuant to the aforesaid Buyback. Consequently after said extinguishment of equity shares, the issued & paid-up capital of the Company stands reduced to Rs.174,403,084/- consisting of 174,403,084 equity shares (i.e. 177,833,084 equity shares minus 3,430,000 equity shares) as on March 31, 2018.

5. GOODS AND SERVICE TAX (GST)

The Government of India has introduced a single tax regime for both goods and services for the entire country with the roll out the Goods and Services Tax (GST) with effect from July 01, 2017. The GST is a comprehensive consumption based tax on supply of both goods and services and subsumes the majority of indirect taxes into a single tax. The motto of the GST regime was ‘one tax one market’, which aims at providing a cohesive tax approach across India. In view of the majority of indirect taxes being merged into one tax, most of the business was impacted at initial stage to some extent.

Your company used this precise reform as an opportunity to upgrade the systems and also configured with the GST requirements and the operations of the Company in the GST regime.

6. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which financial statements in this report relates and the date of this report.

7. AUDITORS REPORT

The Report given by B S R and CO LLP Statutory Auditors on the financial statements of the Company for the year ended March 31, 2018 is a part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in the said audit Report.

8. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company forms a part of this Annual Report. These statements have been prepared on the basis of audited financial statements received from the subsidiary companies as approved by their respective Board of Directors.

9. SUBSIDIARIES / JOINT VENTURE AND ITS OPERATIONS

Your Company has 2 (Two) wholly owned Subsidiaries namely FDC Inc., USA and FDC International Ltd, UK and 1 (One) Joint Venture business, namely Fair Deal Corporation Pharmaceutical SA (Pty) Ltd. at South Africa. The Financials of the Subsidiaries and Joint Venture Company are disclosed in the Consolidated Financial Statements, which forms a part of this Annual Report.

A statement containing salient features of the financial statements of Subsidiary Companies/ Joint Ventures is annexed to this Report as Annexure B pursuant to the provisions of Section 129 of the Companies Act, 2013 and the Rules made thereunder in the prescribed Form No. AOC-1 and hence, the same is not repeated for the sake of brevity.

In accordance with the provisions of Section 136 (1) of the Companies Act, 2013, the following information has been uploaded on the website of the Company i.e. www.fdcindia.com:

(a) Annual Report of the Company, containing therein its Standalone and the Consolidated Financial Statement; and

(b) Audited annual accounts of each of the subsidiary companies and joint venture.

10. BUSINESS RESPONSIBILITY REPORT

As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report is annexed as Annexure C.

11. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Companies Act, 2013, your Directors state that:

(a) In the preparation of annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

(b) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

(c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) They have prepared the annual accounts on a going concern basis;

(e) They have laid down proper internal financial controls to be followed by the Company and they were adequate and operating effectively; and

(f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

12. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantees and Investments made by the Company are given in the notes to the Financial Statements.

Your Company has not given any Loans or Guarantees or Investments in contravention of the provisions of Section 186 of the Companies Act, 2013.

13. PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposits from the Public and as such no amount of principal or interest on deposits from Public was outstanding as on the date of the balance sheet.

14. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to energy conservation, technology absorption, foreign exchange earnings and outgo, pursuant to Section 134 of the Companies Act, 2013 and the Rules made thereunder, is annexed as Annexure D to this Report.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors on recommendation of the Nomination and Remuneration Committee, have approved re-appointment of Mr. Mohan A. Chandavarkar as Chairman and Managing Director of the Company for a period of five years with effect from April 01, 2019, subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

In accordance with provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ashok A. Chandavarkar, Whole time Director, retires by rotation at the 78th Annual General Meeting and being eligible, has offered himself for re-appointment. The Profile of Director seeking reappointment pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Notice of the 78th Annual General Meeting and the statement annexed thereto.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Based on disclosures provided by Directors, none of them are disqualified from being appointed as Directors under section 164 of the Companies Act, 2013.

In terms of Section 203 of the Companies Act, 2013, the following are the Key Managerial Personnel (KMP) of the Company:-

1. Mr. Mohan A. Chandavarkar, Chairman and Managing Director

2. Mr. Sanjay B. Jain, Chief Financial Officer

3. Ms. Varsharani Katre, Company Secretary

During the year, no KMP has been appointed or has retired or resigned.

16. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Information pursuant to Rule 5(1), 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure E.

17. CORPORATE GOVERNANCE

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance along with a Compliance Certificate issued by the Statutory Auditors of the Company, forms a part of the Annual Report.

18. RISK MANAGEMENT

The Risk Management Committee identifies and evaluates the business risks, in addition to overseeing the Risk Management Policy of the Company, from time to time. The details of the Risk Management Committee are included in the Corporate Governance Report.

19. NOMINATION AND REMUNERATION POLICY

Your Company has in place, a Nomination and Remuneration Policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Team. The details of this Policy are provided in the Corporate Governance Report.

20. MEETINGS OF THE BOARD AND COMMITTEES THEREOF

The information has been furnished in the Corporate Governance Report.

21. AUDIT COMMITTEE

The Audit Committee comprises of 4 (Four) Independent Non-Executive Directors and 1 (One) Executive Director. CA. Swati S. Mayekar is the Chairperson of the Committee. Dr. Rahim H. Muljiani, CA Vinod G. Yennemadi, CA. Uday Kumar Gurkar and Mr. Mohan A. Chandavarkar are the members of the Committee.

The Powers and Role of the Audit Committee are provided in the Corporate Governance Report. All recommendations made by the Audit Committee were accepted by the Board of Directors.

CA. Uday Kumar Gurkar was appointed as Audit Committee Member w.e.f November 10, 2017.

22. BOARD & DIRECTORS EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance, evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and Compliance Committees, based on the evaluation parameters formulated by the Nomination and Remuneration Committee. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report.

23. FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS

The Independent Directors are familiarized with their roles, rights, responsibilities of the Company, the business model of the Company, etc., through various programmes on a continuous basis. Details of the familiarization program of Independent Directors are disclosed on the website of the Company i.e. http://www.fdcindia.com/admin/images/Familiarisation_ Programme_2017-18.pdf

24. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Your Company has in place a Whistle Blower Policy for reporting genuine concerns or grievances on fraud and mismanagement. The said Policy is explained in detail in the Corporate Governance Report.

The Company has not denied any person from accessing the Audit Committee. There were no allegations /disclosures/concerns received during the year under review, in terms of the vigil mechanism established by the Company. The said Policy is also uploaded on the website of the Company. i.e. http://www.fdcindia.com/admin /images/Whistler_Blower_Policy.pdf

25. CODE OF CONDUCT

Your Company has in place a Code of Conduct for Board Members and Senior Management Personnel of the Company. The Code of Conduct lays down the standard of conduct which is expected to be followed by the Directors and the Senior Management Personnel and the duties of Independent Directors towards the Company.

The Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct applicable to them, during the year ended March 31, 2018. A Certificate duly signed by the Managing Director, on the compliance with the Code of Conduct is given in the Corporate Governance Report. The said Code is available on the website of the company i.e. http://www.fdcindia.com/admin/images/Code_of_Condu ct_of_FDC_Limited.pdf

26. PREVENTION OF INSIDER TRADING

Your Company has in place a Policy on the Code of Conduct for Prevention of Insider Trading with a view to regulate the trading in securities by the Promoters, Directors and the Designated Employees of the Company.

The same has also been uploaded on the website of the Company i.e. http://www.fdcindia.com/admin/images /Code_of_Conduct_For_Prevention_of_Insider_Trading. pdf

The Promoters, Directors and the Designated Employees have affirmed compliance with the Company’s Code of Conduct for Prevention of Insider Trading.

27. RELATED PARTY TRANSACTIONS

During the year under review, all Related Party Transactions entered into by the Company were on an arm’s length basis and in the ordinary course of business. Your Company has not entered into any contract, arrangement or transaction with any Related Party which would be considered as the material under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board has also approved a policy on Related Party Transactions and the same has been uploaded on the Website of the Company i.e. http://www.fdcindia.com /admin/images/Policy_on_Related_Party_Transactions.pdf

A statement giving details of all Related Party Transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis. Omnibus prior approval was also obtained from the Audit Committee and the Board on an annual basis for repetitive transactions.

Related Party Transactions as required under Accounting Standard are reported in the notes to financial statement. The particulars as required under Section 134(3)(h) of the Companies Act, 2013 are furnished as Annexure F to this report.

28. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN OF WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a Policy on the Prevention, Prohibition and Redressal of Sexual harassment at workplace in line with the requirements of the Sexual Harassment of Women of Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The said Policy is available on the website of the Company i.e. http://www.fdcindia.com/admin/images /Sexual_Harassment_Policy.pdf

An internal Sexual Harassment Committee has also been set up to redress the complaints received regarding sexual harassment. The Company has not received any complaints during the year under review.

29. NEW OFFICE OF THE COMPANY TAKEN ON LEAVE & LICENSE BASIS

During the year, your Company has shifted to premises situated at C-3 SKYVISTAS, Near Versova Police Station, 106A, J. P. Road, Andheri (West), Mumbai - 400 053 on Leave and License basis, until the new Corporate Office is fully developed and ready for occupation. However, the Company’s existing Research & Development Centre continues to remains at Jogeshwari, Mumbai.

30. AUDITORS AND AUDIT REPORTS

a. STATUTORY AUDITORS

Auditor’s Report for the year under review does not contain any qualifications, reservations or adverse remarks.

b. COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audits) Rules, 2014, the Board of Directors on the recommendation of the Audit Committee have reappointed M/s. Sevekari Khare & Associates (Firm Registration No. 000084) Cost Accountants, Mumbai, as Cost Auditors of the Company, to carry out the audit of cost records of the Company. The said Auditors have confirmed their eligibility for appointment as Cost Auditors.

As required under the Companies Act, 2013 and Rules made thereunder, the requisite resolution for ratification of remuneration of Cost Auditors by the Members has been set out in the Item No. 04 of Notice of the 78th Annual General Meeting of your Company.

The Cost Audit Report for the year ended March 31, 2017 was filed with the Ministry of Corporate Affairs on September 04, 2017 within the prescribed time.

c. SECRETARIALAUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, the Company has appointed M/s. Sanjay Dholakia and Associates (PCS No.1798), (Company Secretaries in Practice) to undertake the Secretarial Audit of the Company for the year ended March 31, 2018. The Secretarial Audit Report is annexed as Annexure G to this Report. There is no qualification, reservation, adverse remark or disclaimer in the said Report.

31. DETAILS OF FRAUD REPORTED BY THE AUDITORS

During the year under review, the Statutory Auditors, Secretarial Auditors and Cost Auditors have not reported any instances of fraud committed in the Company by its officers or employees to the Audit Committee under section 143(12) and Rule 13 of the Companies (Audit and Auditors) Rules, 2014 of the Companies Act, 2013.

32. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has always been a socially responsible corporate citizen who is well aware and sensitive to the needs of the underprivileged people around it. During the year under review, the Company has undertaken various socio-economic activities such as Nutritional Programmes, environmental awareness, water resources / structure in the villages surrounding our Plants, Construction of Toilets at Schools / Backward regions, Rehabilitation programmes for street children, etc. through registered trust, Non-Governmental Organisation and directly by the Company.

Your Company is doing its best to undertake various needs based activities in compliance with Schedule VII to the Companies Act, 2013.

The CSR policy is available on the website of the Company i.e. http://www.fdcindia.com/admin/images /Corporate_Social_Responsibility_Policy.pdf

In accordance with the provisions of Section 135 of the Companies Act, 2013, an abstract on the Company’s CSR activities is appended as Annexure H to this report.

33. EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92 of the Companies Act, 2013 and the Amendment made thereunder, the Form MGT 9 providing an extract of the Annual Return is annexed as Annexure I to this report.

34. TRANSFER OF UNPAID AND UNCLAIMED DIVIDEND AMOUNTS AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

a. Pursuant to the provisions of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, declared dividends which remained unpaid or unclaimed for a period of 7 (Seven) years have been transferred by the Company to the IEPF, which has been established by the Central Government.

Your Company has been sending reminders to those Members having unpaid/unclaimed dividends before transfer of such dividend(s) to IEPF. Details of the unpaid/unclaimed dividend are also uploaded on the Company’s website i.e. www.fdcindia.com.

Members, who have not encashed their dividend pertaining to Final Dividend 2010-2011 and onwards, are advised to write to the Company immediately for claiming dividends declared by the Company.

b. In view thereof, after complying with the prescribed procedure, 200,997 shares on which dividend remained unclaimed for 7 (Seven) consecutive years, were transferred to IEPF account in the year 2017. Your Company has uploaded the details of such Shareholders whose shares are transferred to IEPF account on the website of the Company i.e. www.fdcindia.com. The procedure to claim the shares transferred to IEPF account has also been uploaded on the website.

35. ENVIRONMENT, HEALTH AND SAFETY

Environment, Health and Safety are a part of the Management responsibilities and concerns. Your Company has been providing various kinds of medical assistance to the families of its employees. Periodic health checkups are also carried out for all the employees. Employees are also educated on safety and precautionary measures to be undertaken on their job.

36. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant or material orders passed by any regulatory, tribunal or court that would impact the going concern status of the Company and its future operations.

37. ACKNOWLEDGEMENTS

Your Directors would like to express and place on record their sincere appreciation for the continued co-operation and support received from the Medical fraternity, Government Authorities and Agencies, Stock Exchanges, Financial Institutions, Investors, Bankers, Consumers, Vendors and Members, during the year under review. Your Directors also place on record their appreciation for the hard work and contribution of all the employees of the Company.

For and on behalf of the Board

Place : Mumbai MOHAN A. CHANDAVARKAR

Date : May 25, 2018 Chairman and Managing Director


Mar 31, 2017

DIRECTORS'' REPORT

To,

The Members

The Directors have pleasure in presenting the 77th Annual Report together with the Audited Accounts for the year ended March 31, 2017.

1. STANDALONE FINANCIAL RESULTS (Rupees in lakhs)

Particulars

2016-2017

2015-2016

Revenue from operations

(Net)

1,04,602.34

1,00,989.33

Other income

4,964.51

3,997.54

Profit (before finance

costs and depreciation /

amortization)

28,571.39

29,694.49

Finance costs

140.71

139.68

Depreciation and

amortization

3,452.33

3,361.14

Profit Before Tax

24,978.35

23,193.67

Less: Taxation

- Current Tax

6,800.00

6,717.20

- Deferred Tax

(334.41)

(413.75)

- Tax adjustments for

earlier years

(Current Tax)

(193.98)

-

Profit After Tax

18,706.74

16,890.22

Other Comprehensive

Income/(Loss)

for the year

(19.26)

(32.49)

Balance of Profit from

prior years

61,906.36

59,680.29

Surplus available for

appropriation

80,593.84

76,538.02

The previous year''s figures have been re-grouped/reclassified, wherever necessary to conform to this year''s financial statements prepared in accordance with Ind AS (Indian Accounting Standards).

2. DIVIDEND

Your Board of Directors are pleased to recommend the payment of a final dividend of Rs. 2.25/- (225%) per equity share of Re.1 each, for the financial year ended March 31, 2017. The dividend, if approved by the Shareholders at the 77th Annual General Meeting will be paid to all the Shareholders of the Company whose names appear in the Register of Members as on the date of Book Closure.

As per Regulation 43A of the SEBI Listing Regulations, the Company has formulated a Dividend Distribution Policy which is annexed as Annexure A and is also

uploaded on the website of the Company i.e. www.fdcindia.com.

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

(A) Industry structure & developments

The Indian Pharmaceutical Market (IPM) grew by 10.3% to reach the market size of Rs. 1,11,135 Crores, during the year ended March 31, 2017. Around 3,297 products were introduced during the year (Source: AIOCD Pharmas ofttech AWACS Private Limited- Moving Annual Total Turnover-March 2017).

The Cardiac, Gastrointestinal and Ant diabetics segments have grown significantly and would continue to do so due to changing lifestyles and rising disposable incomes. Whereas, the anti-infective, the ruling segment in the Industry, has been growing at a slower pace due to antibiotic resistance awareness, banning of fixed dose combinations by the Government and absence of new molecules on the horizon.

Due to various emerging changes in the Industry, it is likely that there would be notable trends in the Healthcare sector such as :

- Shift from communicable to lifestyle diseases-

With increasing urbanization and problems related to modern-day living in urban settings, currently, about 50 per cent of spending on in-patient beds is for lifestyle diseases; this has increased the demand for specialized care.

- Expansion of Tier II & Tier III cities - There is substantial demand for high-quality & specialist healthcare services in Tier-II & Tier-III cities. In order to encourage the Private sector to establish hospitals in these cities, the Government has relaxed the taxes on these hospitals for the First 5 (Five) years.

- Emergence of Telemedicine - Telemedicine is a fast-emerging sector in India. It can bridge the rural-urban divide in terms of medical facilities, extending low-cost consultation & diagnosis facilities to the remotest of areas via high-speed internet & telecommunication.

- Technological Initiatives (e-Prescriptions) - Digital Health Knowledge Resources, Electronic Medical Record, Mobile Healthcare, Electronic Health Record, Hospital Information System, Technology-enabled care, and Hospital Management Information Systems are some of the technologies gaining wide acceptance in the sector.

(B) Outlook, Risks and Concerns

The year 2016-2017 was full of challenges & chaos in terms of fixed dose combination ban, Price erosion (downward price revisions) for a couple of products, Non supply of codeine based formulations, Impact of demonetization - impact on purchasing behavior and Seasonal impact on acute therapies.

Your Company has undertaken various measures to minimize the risk impact to the best possible extent.

(C) Financial performance and Operations review

During the year under review, your Company registered a Standalone total income of Rs.1,09,566.85 lakhs as against Rs.1,04,986.87 lakhs in the previous year, thereby registering a growth of 4.36%.

The Earnings before interest and depreciation amounted to Rs. 28,571.39 lakhs as against Rs. 29,694.49 lakhs in the previous year. The Net Profit after taxation stood at Rs. 18,706.74 lakhs as against Rs. 16,890.22 lakhs in the previous year.

During the year under review, your Company registered a consolidated total income of Rs.1,10,120.14 lakhs as against Rs.1,05,640.48 lakhs in the previous year, thereby registering a growth of 4.24%.

Your Company has been able to maintain a steady profitable growth, through its increase in operations, cost control measures and a healthy working capital cycle.

(D) Segment-wise or product-wise performance

(i) Marketing

FDC as a Corporate is ranked at 26th position, recording a growth of 3.7% and attaining a market share of 0.89% (Source: AIOCD Pharmasofttech AWACS Private Limited- Moving Annual Total Turnover- March 2017).

Your Company''s top brands namely “ELECTRAL” and “ZIFI” continues to feature in the list of Top 300 brands.

During the year under review, your Company has launched various Products in the market such as Ten DC & Ten DCM, Vitcofol Hb, Zocon KZ Shampoo, etc. Your Company has also aligned itself in terms of portfolios & priorities, in order to maintain its finest performance.

(ii) Research and Development

The Research & Development (R & D) Centres located at Jogeshwari & Kandivali (Mumbai), Goa Unit III and Roha (Dist. Raigad) are duly recognized by the Department of Science and Technology. Your Company carries out its various R & D activities in the following areas:

- Formulations

The Research & Development (R & D) centers located at Jogeshwari (Mumbai) and Goa Unit III cater to the design and development of a diverse variety of dosage forms. The laboratories are equipped with state of the art instruments and equipments to enable development of conventional and complex products. A team of dedicated scientists works to develop formulations for various geographical markets viz. India, ROW and the regulated markets of US and Europe. Our R & D centers are also actively involved in capability building and transferring the technical knowhow of novel drug delivery systems at the Plants, accredited by World Regulatory Authorities such as US-FDA, UK-MHRA, Medsafe New Zealand, TGA Australia, PICs Malaysia, and other rest of the world authorities like MCAZ Zimbabwe, PPB Kenya, NDA Uganda, TFDA (Tanzania), etc. Our ANDA''s, MA''s and our manufacturing Plant accreditations enable us to take care of sizable world exports.

- Synthetics

The Research and development centers located at Kandivali (Mumbai) and Roha (Dist. Raigad) are engaged in process development of niche products, particularly in area of Ophthalmic, Antihypertensive, Antifungal and New Chemical entity (NCE). The work on life cycle management of existing drug products is also being carried out with the aim of Cost effectiveness, backward integration and meeting regulatory requirement from drug authorities, which enables to attain accreditation from various World Regulatory Authorities. The other highlights of the process developments of new molecules are No infringing processes, Usage of environment friendly chemicals, Development of desired polymorphs, Usage of classical chemistry for development of chiral drugs, etc.

The main highlights of R&D process development are Process development of Bimatoprost, Scale up of Latanoprost process and filling of USDMF, Process development of Polymorph II and III for Flucanazole and commercial batches at plant, achievements in cost reduction of existing drug products, Filling of CEP for Flucanazole, work on New Chemical Entities (NCE) in the area of Antifungal.

- Nutraceuticals

During the year, your Company has launched the Enerzal 500 ml in pet bottle as well as 1 Litre in Tetrapak with Orange and Apple flavour.

To extend the product categories of Infant Milk Substitute (IMS), the division is working on development for range of Simyl MCT with some added micro nutrients like Nucleotides, Amino Acids and Omega3,O6 and also has developed MUM MUM 2 as a follow up formula which is under stability study.

Trials and validation of IMS at Sinnar Plant is successfully completed, which completes the commissioning activity at Sinnar Plant. With this, we will be ready to supply current market requirement of IMS with spare capacity, which shall help us in launching new range of products under IMS and complimentary foods for infants.

- Biotechnology

With regards to recombinant Granulocyte Colony Stimulating Factor, inspection was conducted by Central Drugs Standard Control Organization (CDSCO) along with Local Food, Drug and Authority (FDA) in consideration to our application to grant No objection Certificate for manufacturing the clinical grade material. Your Company is undertaking all the necessary actions, for complying with FDA/CDSCO observations.

With reference to your Company''s Project on the development of Third Generation Thrombolytic, your Company has obtained the Test License from Local FDA. Downstream processing, Purification and validation trials of the said molecule is being performed at an external party and once the purification strategy is finalized the technology shall be transferred to the Company.

(iii) Exports

Your Company''s annual export turnover for the financial year ended March 31, 2017 of API and Finished formulations was Rs 15,576.50 lakhs as compared to Rs. 14,524.60 lakhs for the financial year ended March 31, 2016.

FDC is a fully integrated, research-oriented pharmaceutical company engaged in the manufacturing and marketing of Formulations (Finished Dosage Forms) and Active Pharmaceutical Ingredients (APIs).

Your Company has built a visible presence in the Regulated and Emerging markets. It is striving to place itself on a strong promising path by expanding its business strategically, strengthening its manufacturing facilities and enhancing capabilities across the organization.

Your Company is looking at various opportunities in untapped markets and association with business partners in the global markets to boost its revenues.

The Annual sale of FDC International Limited, a wholly owned subsidiary of FDC Limited, India for the financial year ended March 31, 2017 was GBP 15.00 lakhs as compared to GBP 15.93 lakhs of the previous financial year.

The Annual sale of FDC SA Pty Limited, a Joint Venture Company of FDC Limited, India for the financial year ended March 31, 2017 was ZAR 113.34 lakhs compared to ZAR 59.36 lakhs of the previous financial year.

(E) Internal Financial Controls and their adequacy

Your Company has in place a robust internal financial control commensurate with the size, scale and complexity of its operations. These controls ensure that the transactions are recorded and reported diligently, adhere to the Company''s policies & systems, safeguard the assets, prevent and detect the frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

Your Company has an internal audit department which carries out audits throughout the year and appropriate actions are taken by the management based on their recommendations.

(F) Human Resources

Your Company strongly believes that our quality process, systems, compliance and business performance are due to the competent Human resources of the organization. Our Human Resource policies and practices are aligned to meet our business objectives.

Your Company attracts competent professionals, who are committed to deliver exceptional performance and also explores ways for hiring and retaining the best talents. We strive to provide our employees the freedom to excel in their professional and personal goals along with a focus on a healthy work-life balance. We also ensure that our employees are aligned with the organizational culture and values.

The Training & Development initiatives undertaken by the Company help our employees to learn the latest developments, which helps to maximize their potential both individually and collectively as a team, to deliver the business objectives. Your Company would be providing an e-learning platform to the sales employees on Medical and product knowledge in order to facilitate self paced learning through interactive ways.

Your Company believes in healthy cordial industrial relations and has continued to maintain and strengthens it. As on March 31, 2017, there were 5,338 permanent employees, out of which 3,732 employees are engaged in the sales and marketing activities.

(G) Cautionary Statement

Certain statements in respect to Management Discussion and Analysis Report may be forward looking and are stated as required by the applicable laws and regulations. The future results of the Company may be affected by many factors, which could be different from what the Directors envisage in the terms of future performance and outlook.

4. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which financial statements in this report relates and the date of this report.

5. AUDITORS REPORT

The Report given by S R B C & CO LLP, Statutory Auditors on the financial statements of the Company for the year ended March 31, 2017 is a part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in the said audit Report.

6. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company form part of this Annual Report. These statements have been prepared on the basis of audited financial statements received from the subsidiary companies as approved by their respective Board of Directors.

7. SUBSIDIARIES / JOINT VENTURE AND ITS OPERATIONS

Your Company has 2 (Two) wholly owned Subsidiaries namely FDC Inc., USA and FDC International Ltd, UK and 1 (One) Joint Venture business, namely Fair Deal Corporation Pharmaceutical SA (Pty) Ltd. at South Africa. The Financials of the Subsidiaries and Joint Venture Company are disclosed in the Consolidated Financial Statements, which forms a part of this Annual Report.

A statement containing salient features of the financial statements of Subsidiary Companies/ Joint Ventures, is annexed to this Report as Annexure B pursuant to the provisions of Section 129 of the Companies Act, 2013 and the Rules made there under in the prescribed Form No. AOC-1 and hence, the same is not repeated for the sake of brevity.

In accordance with the provisions of Section 136 (1) of the Companies Act, 2013, the following information has been uploaded on the website of the Company i.e. www.fdcindia.com:

(a) Annual Report of the Company, containing therein its Standalone and the Consolidated Financial Statement; and

(b) Audited Annual Accounts of each of the subsidiary companies.

8. BUSINESS RESPONSIBILITY REPORT

As per Regulation 34 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report is annexed as Annexure C.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors state that:

(a) in the preparation of annual accounts for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down proper internal financial controls to be followed by the Company and they were adequate and operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

10. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantees and Investments made by the Company are given in the notes to the Financial State ments.

Your Company has not given any Loans or Guarantees or Investments in contravention of the provisions of Section 186 of the Companies Act, 2013.

11. PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposits from the Public and as such no amount of principal or interest on deposits from Public was outstanding as on the date of the balance sheet.

12. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information relating to energy conservation, technology absorption, foreign exchange earnings and outgo, pursuant to Section 134 of the Companies Act, 2013 and the Rules made there under, is annexed as Annexure D to this Report.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

At the Annual General Meeting of the Company held on September 17, 2016, CA. Uday Kumar Gurkar was appointed as an Non-Executive and Independent Director of the Company in terms of Section 149 of the Companies Act, 2013, to hold office for a period of 5 (Five) years with effect from April 01, 2016.

CA. Girish C. Sharedalal has resigned as a Director of the Company with effect from April 01, 2017. The Board of Directors wishes to place on record its appreciation for the valuable guidance received through him, from time to time.

In accordance with provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ameya A. Chandavarkar, Whole time Director, retires by rotation at the 77th Annual General Meeting and being eligible, has offered himself for re-appointment. The Profile of Director seeking reappointment pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Notice of the 77th Annual General Meeting and the statement annexed thereto.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year under review, the following persons were the Key Managerial Personnel:

1. Mr. Mohan A. Chandavarkar, Chairman and Managing Director

2. Mr. Nandan M. Chandavarkar, Joint Managing Director

3. Mr. Ashok A. Chandavarkar, Wholetime Director

4. Mr. Ameya A. Chandavarkar, Wholetime Director

5. Ms. Nomita R. Chandavarkar, Wholetime Director

6. Mr. Sanjay B. Jain, Chief Financial Officer

7. Ms. Varsharani Katre, Company Secretary

14. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company forms part of this Annual Report. In terms of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to the Members and others entitled thereto. The said information is available for inspection at the Registered Office of the Company during working hours up to the date of the forthcoming Annual General Meeting. Any Member interested in obtaining a copy of the same may write to the Company Secretary in this regard.

15. CORPORATE GOVERNANCE

In terms of Regulation 34 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate

Governance along with a Compliance Certificate issued by the Statutory Auditors of the Company, forms part of the Annual Report.

16. RISK MANAGEMENT

The Risk Management Committee identifies and evaluates the business risks, in addition to overseeing the Risk Management Policy of the Company, from time to time. The details of the Risk Management Committee are included in the Corporate Governance Report.

17. NOMINATION AND REMUNERATION POLICY

Your Company has in place, a Nomination and Remuneration Policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Team. The details of this Policy are provided in the Corporate Governance Report.

18. MEETINGS OF THE BOARD AND COMMITTEES THEREOF

The information has been furnished in the Corporate Governance Report.

19. AUDIT COMMITTEE

The Audit Committee comprises of comprises of 3 (Three) Independent Non-Executive Directors and 1 (One) Executive Director. CA. Swati S. Mayekar is the Chairperson of the Committee. Dr. Rahim H. Muljiani, CA Vinod G. Yennemadi and Mr. Mohan A. Chandavarkar are the other members of the Committee.

The Powers and Role of the Audit Committee are provided in the Corporate Governance Report. All recommendations made by the Audit Committee were accepted by the Board of Directors.

20. BOARD & DIRECTORS EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance, evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and Compliance Committees, based on the evaluation parameters formulated by the Nomination and Remuneration Committee. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report.

21. FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS

The Independent Directors are familiarized with their roles, rights, responsibilities of the Company, the business model of the Company, etc., through various programmes on a continuous basis. Details of the familiarization program of Independent Directors are disclosed on the website of the Company i.e. http://www.fdcindia.com/familiarisation-programme.php

22. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Your Company has in place a Whistle Blower Policy for reporting genuine concerns or grievances on fraud and mismanagement. The said Policy is explained in detail in the Corporate Governance Report.

The Company has not denied any person from accessing the Audit Committee. There were no allegations/ disclosures/concerns received during the year under review, in terms of the vigil mechanism established by the Company. The said Policy is also uploaded on the website of the Company i.e. http://www.fdcindia.com/admin /images/Whistler_Blower_Policy.pdf

23. CODE OF CONDUCT

Your Company has in place a Code of Conduct for Board Members and Senior Management Personnel of the Company. The Code of Conduct lays down the standard of conduct which is expected to be followed by the Directors and the Senior Management Personnel and the duties of Independent Directors towards the Company.

The Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct applicable to them, during the year ended March 31, 2017. A Certificate duly signed by the Managing Director, on the compliance with the Code of Conduct is given in the Corporate Governance Report. The said Code is available on the website of the company i.e. http://www.fdcindia.com/admin/images/Code_of_ Conduct_of_FDC_Limited.pdf

24. PREVENTION OF INSIDER TRADING

Your Company has in place a Policy on the Code of Conduct for Prevention of Insider Trading with a view to regulate the trading in securities by the Promoters, Directors and the Designated Employees of the Company.

The same has also been uploaded on the website of the Company i.e. http://www.fdcindia.com/admin/images/ CODE_OF_CONDUCT_FOR_PREVENTION_OF_INSI DER_TRADING.pdf

The Promoters, Directors and the Designated Employees have affirmed compliance with the Company''s Code of Conduct for Prevention of Insider Trading.

25. RELATED PARTY TRANSACTIONS

During the year under review, all Related Party Transactions entered into by the Company were on an arm''s length basis and in the ordinary course of business. Your Company has not entered into any contract, arrangement or transaction with any Related Party which would be considered as the material under SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015.

The Board has also approved a policy on related party transactions and the same has been uploaded on the website of the Company i.e. http://www.fdcindia.com/ admin/images/Policy_on_Related_Party_Transactions. pdf

All the Related Party Transactions are placed before the Audit Committee as well as the Board for their approval. Omnibus approval was also obtained from the Audit Committee and the Board on an annual basis for repetitive transactions.

Related Party Transactions are disclosed in the notes to the financial statements. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable to your Company.

26. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN OF WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a Policy on the Prevention, Prohibition and Redressal of Sexual harassment at workplace in line with the requirements of The Sexual Harassment of Women of Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The said Policy is available on the website of the Company i.e. http://www.fdcindia.com/admin/ images/Sexual_Harassment_Policy.pdf

An internal Sexual Harassment Committee has also been set up to redress the complaints received regarding sexual harassment. The Company has not received any complaints during the year under review.

27. CHANGE IN CORPORATE OFFICE OF THE COMPANY

Your Company is intending to carry out development activities in the presently occupied Corporate Office situated at Jogeshwari (West), Mumbai, after demolishing the existing structure. The Building wherein the Corporate Office is situated is an old structure and needs to be re- developed.

Accordingly, your Company has taken a Premises situated at C-3 SKYVISTAS, Near Versova Police Station, 106A, J.P. Road, Andheri (West), Mumbai - 400 053 on Leave and License basis for a period of 5 (Five) years, until the existing Corporate Office is fully developed and ready for occupation.

28. STATUTORY AUDITORS

As per Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the 10 (Ten) year term of S R B C & CO LLP (ICAI Firm Registration No. 301003E),Chartered Accountants, Mumbai, as the Statutory Auditors of the Company expires at the conclusion of the 77th Annual General Meeting of the Company.

The Board of Directors of the Company, on the recommendation of the Audit Committee, has proposed the appointment of B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022), as the Statutory Auditors of the Company by the Members at the 77th Annual General Meeting of the Company for an initial term of 5(Five) years. Your Company has received their written consent and a certificate that they satisfy the criteria provided under Section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and the Rules made there under.

Accordingly, a resolution proposing the appointment of B S R & Co. LLP, Chartered Accountants, as the Statutory Auditors of the Company for a term of 5 (Five) consecutive years i.e. from the conclusion of the 77th Annual General Meeting till the conclusion of the 82nd Annual General Meeting of the Company pursuant to Section 139 of the Companies Act, 2013, forms part of the Notice of the 77th Annual General Meeting of the Company.

29. COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audits) Rules, 2014, the Board of Directors on the recommendation of the Audit Committee have re-appointed M/s. Sevekari Khare & Associates (Firm Registration No. 000084) Cost Accountants, Mumbai, as Cost Auditors of the Company, to carry out the audit of cost records of the Company. The said Auditors have confirmed their eligibility for appointment as Cost Auditors.

As required under the Companies Act, 2013 and Rules made there under, the requisite resolution for ratification of remuneration of Cost Auditors by the Members has been set out in the Notice of the 77th Annual General Meeting of your Company.

The Cost Audit Report for the year ended March 31, 2016 was filed with the Ministry of Corporate Affairs on August 30, 2016.

30. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under, the Company has appointed M/s. Sanjay Dholakia and Associates (PCS No.1798), Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended March 31, 2017. The Secretarial Audit Report is annexed as Annexure E to this Report. There is no qualification, reservation, adverse remark or disclaimer in the sand Report.

31. EXTRACT OF ANNUAL RETURN

Form MGT 9 providing an extract of the Annual Return in terms of the provisions of Section 92 of the Companies Act, 2013 and the Rules made there under is annexed as Annexure F to this Report.

32. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has always been a socially responsible corporate citizen who is well aware and sensitive to the needs of the underprivileged people around it. During the year under review, the Company has undertaken various socio-economic activities such as Nutritional Programmes, environmental awareness through supply of cloth bags through Non-Governmental Organisation, improving water resources/ structure in the villages surrounding our Plants, Construction of Toilets at Schools/ Backward regions, Rehabilitation programmes for street children, etc.

Your Company is doing its best to undertake various needs based activities in compliance with Schedule VII to the Companies Act, 2013.

The CSR policy is available on the website of the Company i.e. http://www.fdcindia.com/admin/images/ Corporate_Social_Responsibility_Policy.pdf

In accordance with the provisions of Section 135 of the Companies Act, 2013, an abstract on the Company''s CSR activities is appended as Annexure G to this report.

33. TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, declared dividends which remained unpaid or unclaimed for a period of 7 (Seven) years have been transferred by the Company to the IEPF, which has been established by the Central Government.

The above referred rules now mandate the transfer of dividends lying unpaid and unclaimed for a period of 7 (Seven) years as well as the underlying equity shares to IEPF. Your Company has published the requisite advertisement in the newspaper and issued individual notices to the shareholders, whose equity shares are liable to be transferred to IEPF, advising them to claim their dividend on or before 31st May 2017.

The Company has uploaded the details of unpaid and unclaimed dividend on the website of the Company i.e. www.fdcindia.com.

34. ENVIRONMENT, HEALTH AND SAFETY

Environment, Health and Safety are a part of the Management responsibilities and concerns. Your

Company has been providing various kinds of medical assistance to the families of its employees. Periodic health checkups are also carried out for all the employees. Employees are also educated on safety and precautionary measures to be undertaken on their job.

35. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant or material orders passed by any regulatory, tribunal or court that would impact the going concern status of the Company and its future operations.

36. ACKNOWLEDGEMENTS

Your Directors would like to express and place on record their sincere appreciation for the continued co-operation and support received from the Medical fraternity, Government Authorities and Agencies, Stock Exchanges, Financial Institutions, Investors, Bankers, Consumers, Vendors and Members, during the year under review. Your Directors also place on record their appreciation for the hard work and contribution of all the employees of the Company.

For and on behalf of the Board

Place: Mumbai MOHAN A. CHANDAVARKAR

Date : May 26, 2017 Chairman and Managing Director


Mar 31, 2014

Dear Members,

The Directors are pleased to present their report on the business and operations of your Company for the year ended March 31, 2014.

1. FINANCIAL PERFORMANCE

Your Company''s net sales have increased by 9.2% as compared to the last financial year. Your Company continues its efforts to deliver long term sustainable profitable growth by initiating various steps. The various measures undertaken by the Company has helped in maintaining working capital cycle and efforts for improving the same is an ongoing exercise. Cost controls across all levels of functions are a continuous exercise.

2013-2014 2012-2013 Rupees in lacs Rupees in lacs

Revenue from operations (Net) 83,701.84 76,459.51

Other income 3,816.37 4,756.08

Profit (before finance costs & depreciation/amortisation) 24,454.87 23,007.86

Finance costs 301.38 151.05

Depreciation and amortisation 2,454.35 2,751.19

Profit Before Tax 21,699.14 20,105.62

Less: Taxation

- Current Tax 6,000.00 4,100.00

- Deferred Tax 7.11 163.15

- MAT credit entitlement - -

- Tax adjustments for earlier years (current tax) 2,250.00 9.30

Profit After Tax 13,442.03 15,833.17

Balance of profit from prior years 40,568.18 34,460.00

Surplus available for appropriation 54,010.21 50,293.17

Appropriations:

Transfer to general reserve 5,000.00 5,000.00

Final dividend proposed 4,001.24 4,038.63

Tax on dividend 680.01 686.36

Reversal of excess provision of dividend (43.71) -

Balance carried to Balance Sheet 44,372.67 40,568.18

54,010.21 50,293.17

Previous year''s figures have been re-grouped/re-classified, wherever necessary to conform to this year''s classification.

2. DIVIDEND

Your Board of Directors are pleased to recommend a final dividend of Rs. 2.25/- (225%) per equity share of Re.1 each for the financial year ended March 31, 2014. The same, if declared at this annual general meeting will be paid to those shareholders'' whose names stand registered in the register of members as on August 09, 2014. This dividend is tax free in the hands of the shareholders.

3. SOCIAL RESPONSIBILITIES

Your Company has always been a socially responsible corporate citizen who is well aware and sensitive to the needs of the underprivileged people around it.

Your Company has been contributing towards the development of society through various charitable trusts helping the needy people for their education, medical, healthcare etc. Your Company''s Education initiatives include scholarships for deserving and needy students, and allowing greater access to quality education.

4. DIRECTORS

Mr. Mohan A. Chandavarkar has been re-appointed as the Managing Director of the Company for a period of five years with effect from April 01, 2014 and Mr. Nandan M. Chandavarkar has been re-appointed as the Joint Managing Director of the Company for a period of five years with effect from March 01, 2014, subject to the approval of the shareholders at the ensuing Annual General Meeting.

At the Board meeting held on May 29, 2014, Ms. Nomita R. Chandavarkar is appointed as an Additional Director of the Company with effect from June 02, 2014, to hold office upto the ensuing annual general meeting, at which she shall be eligible for appointment as a Director, liable to retire by rotation.

In terms of the Articles of Association of the Company and the relevant provisions of the Companies Act, 2013, Mr. Ameya A. Chandavarkar, Director will retire by rotation in the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Pursuant to Sections 149 and 152 of the Companies Act, 2013 and the Rules made thereunder, your Board of Directors seek appointment of CA Girish C. Sharedalal, Dr. Rahim H. Muljiani, Dr. Nagam H. Atthreya, Dr. Satish S. Ugrankar and CA Vinod G. Yennemadi, as Independent and Non Executive Directors, at the ensuing Annual General Meeting for a term of five consecutive years. Details of the proposal for their appointment are mentioned in the Explanatory statement of the Notice of the 74th Annual General Meeting. Further, these Independent Directors will not be liable to retire by rotation.

5. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors based on the information and documents made available to them, confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended March 31, 2014 and of the Statement of Profit and Loss for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis.

6. CORPORATE GOVERNANCE

As required by the existing clause 49 of the listing agreements entered into with the stock exchanges, a separate report on corporate governance is given as a part of the annual report alongwith the auditors'' statement on its compliance.

7. AUDITORS REPORT

With reference to Point no. (vii) in the Annexure of the Companies (Auditors Report) Order, 2003, the Company is taking effective steps for enlarging the scope and coverage of internal audit activities to make it commensurate with the size and nature of the business of the Company.

8. STATUTORY AUDITORS

The existing statutory auditors of the Company, M/s.S.R. Batliboi & Co. LLP, Chartered Accountants, Mumbai have communicated to the Company their unwillingness to be re-appointed as the statutory auditors of the Company and hence are not offering themselves for re-appointment at the ensuing Annual General Meeting.

The Board of Directors recommend the appointment of M/s. S R B C & Co. LLP, Chartered Accountants, as the statutory auditors of the Company in place of the retiring auditors, from the conclusion of the ensuing Annual General Meeting.

The Company has also received a certificate pursuant to provisions of Section 139 and 141 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules 2014, from M/s. S R B C & Co. LLP, certifying their eligibility for appointment as statutory auditors of the Company.

Both, M/s. S R B C & Co. LLP and M/s. S.R.Batliboi & Co. LLP are part of the same network of firms.

9. COST AUDITORS

The Audit Committee has recommended and the Board of Directors have appointed Shri. Prakash A. Sevekari, Cost Auditor, to conduct the Cost Audit for any of the Products covered under Cost Audit for the financial year ending March 31, 2015, subject to the approval of Central Government. The requisite applications for approval of his appointment will be submitted to the Central Government.

10. PUBLIC DEPOSITS

During the year under review, the Company has not accepted any fixed deposits.

11. SUBSIDIARIES AND ITS OPERATIONS

Your Company''s wholly owned subsidiary Anand Synthochem Limited has reported a loss of Rs.4.66 lacs.

Your Company''s wholly owned subsidiary at USA, namely FDC Inc., reported a loss of USD 1,510 (i.e. profit of Rs. 4.28 lacs on account of exchange gain on currency translation).

Your Company''s wholly owned subsidiary at UK, namely FDC International Ltd., has reported a profit of £ 171,828 (Rs. 219.25 lacs).

Your Company''s joint venture business at South Africa namely Fair Deal Corporation Pharmaceutical SA (Pty) Ltd., has reported a loss of ZAR 22,81,820 (i.e. loss of Rs. 140.02 lacs on account of difference in rates taken for Stock & Deferred tax).

As per the directions of the Central Government vide its general notification dated February 08, 2011, the financial data of the subsidiaries have been furnished under “Notes to the Consolidated Financial Statements”.

Also, as directed by the Central Government, annual accounts of the subsidiaries and the related detailed information will be made available to the holding and subsidiary company investors, on request and the same is available for inspection by the members at the registered office of the Company, between 10.00 a.m. to 12.00 noon on all days except Friday and holidays, till this Annual General Meeting and will also be placed before the said meeting.

Any shareholder interested in obtaining a copy of the annual accounts of the subsidiary companies may write to the secretarial department at the corporate office of the Company. The annual accounts of the individual subsidiary companies are also available on the Company''s website-www.fdcindia.com.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information pursuant to 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 annexed as Annexure A to this report.

13. ACKNOWLEDGEMENTS

Your Directors take this opportunity to place on record their gratitude for the continued support and co-operation extended to the Company by the medical fraternity, trade, Government agencies, financial institutions, investors, bankers, consumers and employees.

For and on behalf of the Board

Place: Mumbai

MOHAN A. CHANDAVARKAR

Date : May 29, 2014 Chairman and Managing Director


Mar 31, 2013

The directors are pleased to present their report on the business and operations of your Company for the year ended March 31, 2013.

1. FINANCIAL RESULTS

2012-2013 2011-2012 Rupees in lacs Rupees in lacs

Revenue from operations (Net) 76,459.51 69,924.16

Other income 4,756.08 2,782.00

Profit (before finance costs and depreciation / amortisation) 23,007.86 18,954.99

Finance costs 151.05 132.35

Depreciation and amortisation 2,751.19 1,805.00

Profit before tax 20,105.62 17,017.64

Less: Taxation

- Current tax 4,100.00 3,450.00

- Deferred tax 163.15 328.15

- Tax adjustments for earlier years (current tax) 9.30 (29.56)

Profit after tax 15,833.17 13,269.05

Balance of profit from prior years 34,460.00 28,430.05

Surplus available for 50,293.17 41,699.10 appropriation

Appropriations:

Transfer to general reserve 5,000.00 3,000.00

Final dividend proposed 4,038.63 3,658.41

Tax on dividend 686.36 593.48

Reversal of excess provision of dividend - (12.79)

Balance carried to Balance Sheet 40,568.18 34,460.00

50,293.17 41,699.10

Previous year''s figures have been re-grouped/re-classified, wherever necessary to confirm to this year''s classification.

2. DIVIDEND

Your board of directors recommend a final dividend of Rs. 2.25 (225%) per equity share of Re.1 each for the financial year ended March 31, 2013. The same, if declared at this annual general meeting will be paid to those shareholders whose names stand registered in the register of members as on August 31, 2013. This dividend is tax free in the hands of the shareholders.

3. BUYBACK OF EQUITY SHARES

Pursuant to the approval of shareholders for buyback of its fully paid-up equity shares of Re. 1 each upto a quantity not exceeding 6,250,000 at a price not exceeding Rs. 110 per equity share vide postal ballot voting on August 17, 2012, the Company has bought back 2,087,432 equity shares of Re.1 each upto March 31, 2013 and all the shares bought back in the buyback offer upto March 31, 2013 have been extinguished as on date. Further 1,338,538 equity shares of Re.1 each were bought back as on date of this report.

4. BUSINESS REVIEW

The Indian Pharmaceutical Market grew by 11.9% to touch the market size of Rs. 70,529 crores, during the year ended March 31, 2013. Around 2,194 products were introduced during the year (Source: AIOCD Pharmasofttech AWACS Private Limited).

The Indian Pharmaceutical Market is well poised for growth and is projected to grow at a Compounded Annual Growth Rate of 12% to 14%. Service oriented segments such as hospitals and medical insurance are slowly gaining prominence. The key drivers have been increase in household income level, increase in lifestyle related diseases, growing population, improving healthcare infrastructure, delivery systems, rapid urbanization and growth in the rural markets.

Pharma emerging markets such as China, Brazil, India & Russia to name a few, have a prominent role to play in the global pharmaceutical market. India is seen as the third largest pharma market in the world. This market is expected to further strengthen by more drugs going off patent by the year 2015.

The much awaited The National Pharmaceuticals Pricing Policy, 2012 (NPPP-2012) is notified by the Government. The policy aims at having a regulatory framework for pricing of 348 drugs, to ensure availability of essential drugs at reasonable prices.

As per the policy, all medicines and dosages specified in the National List of Essential Medicines, 2011 will be under price control. The Drugs (Prices Control) Order 2013 has been notified on May 15, 2013. The National Pharmaceuticals Pricing Policy, 2012 is expected to impact the logistics, sales and profitability of many pharmaceutical companies including yours. Your Company would be taking effective steps to reduce the impact of the same.

Compulsory licensing, patent oppositions and litigations, increasing regulations and compliances, infrastructure development and menace of counterfeit drugs are seen as major hurdles in the Industry.

Against the above market background, we give below a brief review of various functions of your Company:

a. Marketing:

Total revenue from operations of your Company has increased by 9.35% as compared to the last year. Your Company is ranked at 25th position, attaining a market share of 1.12% (Source: AIOCD Pharmasofttech AWACS Private Limited- Moving Annual Turnover- March 2013).

Your Company has initiated various steps to improve its performance. The same is witnessed by growth and profit, your Company has achieved, which is given under the head financial performance. The steps initiated are expected to yield results over a period of time and this year''s performance is a beginning towards the above goal.

Your Company launched an extension of its well established ophthalmic brand "IOTIM-B", with unique drop assist application strips for the first time in Indian market. The above uniqueness of the brand will help your Company to regain its lost strong foothold in ophthalmology segment and will reinforce the world class quality standard products of the Company.

"ZIFI AZ", a brand extension product of your Company''s flagship brand "ZIFI", has become the fastest growing brand in the antibiotic segment. Another extension to the brand "ZIFI", namely "ZIFI TURBO" has achieved the accolade of being "The Best Launch of the Year 2012-13".

Your Company''s paediatric segment was further strengthened by the introduction of a unique combination of calcium and phosphorous for healthy bones and teeth along with yummy peppermint and lemon flavour under the brand name "CALYUMM-P".

b. Financial Performance:

Your Company''s profits have increased by 19.32%. Various steps initiated by the Company have started yielding results which is evident from current year''s performance. Your Company continues its efforts to improve the performance through operational efficiencies and incremental business. Cost controls across all levels of functions are a continuous and ongoing exercise. The Company''s internal control procedures are commensurate with the nature of its operations.

c. Exports:

The annual export turnover for the year ended March 31, 2013 was Rs. 9,541.05 lacs with a marginal growth of 9.88% as compared to the year ended March 31, 2012 which stood at Rs. 8,682.93 lacs. Although, FDC continues to supply APIs worldwide to its esteemed customers, the improved export performance resulted from sales of finished dosage forms mainly Oral Rehydration Salts range to Africa and Ophthalmic range to UK and US.

The Company''s manufacturing facilities of Ophthalmic/ liquids/ powders and tablet dosage forms at Waluj and Goa are approved by international authorities namely US FDA and UK MHRA respectively. In view of the Company''s core capabilities, number of opportunities in European and US markets are opening up, for out-licensing of dossiers/ANDA''s/ DMF/COS.

5. RESEARCH & DEVELOPMENT

a. Formulations:

Your Company''s main focus has been on development of value added drug products at affordable price and development of niche generic products for export to highly regulated markets of US and Europe. A state of art research facility for development and validation of nano-technology based formulation has been made functional. Three nano-technology based products were developed for Ophthalmic and otic use. To protect the novel drug delivery technologies, both India and PCT applications were filed. Four generic products got approval from European regulatory agencies.

b. Synthetics:

Your Company''s main focus is on the development of cost effective processes for generic APIs, based on patent expiry. A non infringing new process for Rupatadine Fumarate, an antihistamine and a PAF antagonist, to treat allergies was developed. The process was successfully transferred to Roha Pilot Plant where the process has been validated and commercialised.

Process developed at R&D for Olopatadine hydrochloride, antihistamine and mast cell stabilizer was transferred to the Roha plant where the process has been validated and commercialised.

c. Nutraceuticals:

Your Company''s balanced ideal energy drink namely "ENERZAL" became the drink provider for the Mumbai Marathon 2013. Your Company is aggressively promoting this product through various sports events held across major metros of India. In addition, your Company has partnered with a local football club which scouts for talent in Mumbai schools wherein your Company aims to promote its product "ENERZAL".

d. Biotechnology:

As reported to you earlier, with regard to the license technology agreement signed by your Company with an Israel based company, for production and purification of recombinant protein licensed to FDC, we are now awaiting a reply from Department of Biotechnology, granting us permission for going ahead with human clinical trails.

6. PERSONNEL

The overall industrial and employee relations remained healthy. Information as per Section 217(2A) of the Companies Act, 1956, read with Companies (Statement of Particulars of Employees) Rules, 1975, forms a part of this report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, this report and the accounts are being sent to all shareholders excluding the particulars of employees under Section 217(2A). Any shareholder interested in obtaining a copy of the statement may write to the secretarial department at the corporate office of the Company.

7. SOCIAL RESPONSIBILITIES

In discharge of its social obligations, your Company regularly contributes to trusts formed for charitable purposes. FDC also assists several organisations in medical camps conducted all over the Country.

8. DIRECTORS

In accordance with Article 60 of the Articles of Association and the relevant provisions of the Companies Act, 1956, Dr. Satish S. Ugrankar and Dr. Rahim H. Muljiani, retire by rotation at this annual general meeting and being eligible, offer themselves for re-appointment.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

Your directors confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended March 31, 2013 and of the Statement of Profit and Loss for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the directors have prepared the annual accounts on a going concern basis.

10. CORPORATE GOVERNANCE

As required by the existing clause 49 of the listing agreements entered into with the stock exchanges, a separate report on corporate governance is given as a part of the annual report alongwith the auditors'' statement on its compliance.

11. AUDITORS

The auditors of your Company S.R. Batliboi & Co. LLP (Formerly known as M/s. S.R.Batliboi & Co.) Chartered Accountants, Mumbai, retire at the ensuing annual general meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

12. COST AUDITORS

The directors have appointed Shri. Prakash A. Sevekari, Cost Auditor, to conduct the cost audit for any of the products covered under cost audit for the financial year ending March 31, 2014. The requisite applications for approval of his appointment will be submitted to the Central Government.

13. PUBLIC DEPOSITS

During the year under review, the Company has not accepted any fixed deposits.

14. PARTICULARS OF SUBSIDIARIES AND ITS OPERATIONS

Your Company''s wholly owned subsidiary Anand Synthochem Limited has reported a loss of Rs.4.48 lacs.

Your Company''s wholly owned subsidiary at US, namely FDC Inc., reported a loss of USD 1,517 (i.e. Profit of Rs.2.28 lacs on account of exchange gain on currency translation).

Your Company''s wholly owned subsidiary at UK, namely FDC International Ltd., has reported a loss of £ 103,980 (Rs. 91.72 lacs).

Your Company''s joint venture business at South Africa namely Fair Deal Corporation Pharmaceutical SA (Pty) Ltd., has reported a profit of ZAR 305,627 (i.e. Loss of Rs. 14.94 lacs on account of difference in rates taken for Stock & Deferred tax).

As per the directions of the Central Government vide its general notification dated February 08, 2011, the financial data of the subsidiaries have been furnished under "Notes to the Consolidated Financial Statements".

Also, as directed by the Central Government, annual accounts of the subsidiaries and the related detailed information will be made available to the holding and subsidiary company investors, on request and the same is available for inspection by the members at the registered office of the Company, between 10.00 a.m. to 12.00 noon on all days except Friday and holidays, till this annual general meeting and will also be placed before the said meeting.

Any shareholder interested in obtaining a copy of the annual accounts of the subsidiary companies may write to the secretarial department at the corporate office of the Company. The annual accounts of the individual subsidiary companies are also available on the Company''s website - www.fdcindia.com.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING ANDOUTGO

The information pursuant to 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 annexed as Annexure A to this report.

16. ACKNOWLEDGMENTS

Your Directors take this opportunity to place on record their gratitude for the continued support and co-operation extended to the Company by the medical fraternity, trade, Government agencies, financial institutions, investors, bankers, consumers and employees.

For and on behalf of the board

Place: Mumbai MOHAN A. CHANDAVARKAR

Date : May 24, 2013 Chairman and Managing Director


Mar 31, 2012

The directors are pleased to present their report on the business and operations of your Company for the year ended March 31, 2012.

1. FINANCIAL RESULTS

2011-2012 2010-2011 Rupees in lacs Rupees in lacs

Revenue from operations (Net) 69,924.16 70,036.26

Other income 2,782.00 2,783.78

Profit (before finance costs and depreciation / amortisation) 18,954.99 19,119.35

Finance costs 132.35 133.98

Depreciation and amortisation 1,805.00 1,698.54

Profit before tax 17,017.64 17,286.83

Less: Taxation

- Current tax 3,450.00 3,450.00

- Deferred tax 328.15 120.38

- MAT credit entitlement - (1,330.00)

- Tax adjustments for earlier years (current tax) (29.56) 171.86

Profit after tax 13,269.05 14,874.59

Balance of profit from prior years 28,430.05 20,842.48

Surplus available for 41,699.10 35,717.07 appropriation

Appropriations:

Transfer to general reserve 3,000.00 3,000.00

Final dividend proposed 3,658.41 3,688.63

Tax on dividend 593.48 598.39

Reversal of excess provision of dividend (12.79) -

Balance carried to Balance Sheet 34,460.00 28,430.05

41,699.10 35,717.07

Previous year's figures have been re-grouped/re-classified, wherever necessary to conform to this year's classification.

2. DIVIDEND

Your Board of Directors recommend a final dividend of Rs.2 (200%) per equity share of Re.1 each for the financial year 2011-2012. The same, if declared at this annual general meeting will be paid to those shareholders, whose names stand registered in the register of members as on August 17, 2012. This dividend is tax free in the hands of the shareholders.

3. BUYBACK OF EQUITY SHARES

Your Company concluded the ongoing buyback of it's fully paid-up equity shares of Re.1 each, on January 25, 2012. During the said period, the Company has bought back 3,358,102 equity shares of Re.1 each and the total outlay for the buyback was Rs.3,251.48 lacs. All the equity shares bought back in the buyback offer have been extinguished as on January 31, 2012.

As a continuing effort towards providing liquidity to shareholders, the Board of Directors at its meeting held on May 26, 2012, have approved the buyback of its fully paid-up equity shares of Re.1 each upto a quantity not exceeding 6,250,000 (Maximum Offer Shares) at a price not exceeding Rs.110 per equity share (Maximum Offer Price). The board has earmarked a maximum limit of Rs.5,000 lacs (Maximum Offer Size) for the buyback which is less than 25% of the existing paid-up equity share capital and free reserves. The said buyback will be made through open market operations on the stock exchanges and will be subject to the approval of the shareholders through the postal ballot, the results of which will be announced at the ensuing annual general meeting.

4. BUSINESS REVIEW

The Indian Pharmaceutical Market (IPM) is destined to be one of the fastest growing Industry. It has been the front runner in a wide range of specialties involving complex drugs manufacture, development and technology. The IPM is on the threshold of becoming a major global market by 2020. The IPM grew by 16% to touch the market size of Rs.62,904.12 crores, during the year ended March 2012. Around 2,638 products were introduced during the year (Source: AIOCD AWACS).

The key drivers have been increase in household income level, increase in lifestyle related diseases, growing population, improving healthcare infrastructure/ delivery systems and rising penetration in smaller towns and rural areas, have contributed to the long term growth of the Industry.

The life style segments such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers have continued to be lucrative and fast growing owing to increased urbanisation and changing lifestyle patterns. After the anti-diabetic segment, the cardiac segment is considered to be the 2nd largest in the chronic therapy which has a CAGR of 19%. This is further boosted due to the rise in affluent consumers demanding innovative drugs for the treatment of chronic illness associated with their changing life styles. High growth in domestic sales in the future will depend on the growing chronic disease segment.

A large untapped opportunity is seen in the rural markets. However, these markets have their own share of challenges like awareness, modern health care facilities, affordability and investments in infrastructure. The MNC's too are augmenting their portfolio in these rural areas. Even though challenges are manifold to penetrate in these markets, host of opportunities are available which can be achieved by adopting untraditional methods like tying up with Government organisations, insurance, diagnostic providers, NGOs, increasing patient awareness and literacy campaigns.

The IPM is adopting various strategies for their R&D efforts like entering into collaboration and partnership agreements with innovator companies and out-licensing their molecules for milestone payments.

Over the last five years focus, investments are seen in the emerging markets namely China, India, Brazil and Russia. Due to India's demographics, rising income levels and changing attitude towards health and lifestyle, India will increasingly become an important market.

Mergers & Acquisitions, collaborations and in-licensing will continue to see significant activities, mainly due to expert technical staff, excellent infrastructure in terms of clinical trial laboratories, contract manufacturing and readily available world class accredited state of the art manufacturing facilities in India.

The new price control policy is still pending review by the Government. Compulsory licensing, patent oppositions and litigations, increasing regulatory requirements and compliances, infrastructure development and menace of counterfeit drugs are seen as major hurdles in the Industry.

Against the above market background, we give below a brief review of various functions of your Company:

a. Marketing:

Your Company registered a market growth of 3.2% in the financial year April 2011 to March 2012. Your Company is ranked at 26th position, attaining a market share of 1.20% (Source: AIOCD AWACS March 2012).

Your Company does not find this performance satisfactory. However, following steps have been taken to improve the performance:

i. Online reporting system is under implementation in the field to monitor the work carried out in the field.

ii. Web based online sales information system is introduced to enable the managers to follow-up on sales growth and targets on day to day basis.

iii. Appraisal systems at field have been improvised to reward good performance and identify the areas of improvement.

iv. Training of field has been intensified to improve the performance, particularly of 1st and 2nd line managers. This is expected to reduce the impact of attrition in territories under the managers.

v. Incentive and salary levels in the field are substantially revised to reduce attrition, considering current opportunities in the industry.

vi. Territory rationalisation and introduction of specialised marketing field force is on cards to avail various opportunities.

vii. Number of new innovative products are in the R&D pipeline.

viii. Your Company is in the process of finalising innovative products for in-licensing.

The above steps are expected to yield results over a period of time.

b. Financial Performance:

Your Company's sales & profit stagnated due to attrition in the field and increased employees' cost respectively. The treasury income has been moderate due to fluctuating markets. The Company continues its efforts to improve the performance through operational efficiencies and incremental business. Cost controls across all levels of functions are a continuous and ongoing exercise. The Company's internal control procedures commensurate to the extent and nature of its operations.

c. Exports:

The annual export turnover for the year ended March 31, 2012 was Rs.8,682.93 lacs with a growth of 24% as compared to year ended March 31, 2011 which stood at Rs.7,019.10 lacs. Although FDC continues to supply APIs worldwide to its esteemed customers, the improved export performance resulted from sales of finished dosage forms mainly Ophthalmic & ORS range to UK, USA & Latin America and support of various international NGOs.

The Company's manufacturing facilities of Ophthalmic/ liquids/powders and tablet dosage forms at Waluj and Goa are approved by international authorities namely US FDA and UK MHRA respectively. In view of the Company's core capabilities, number of opportunities in European and US markets are opening up, for out-licensing of dossiers/ANDA's/ DMF/COS.

In view of emerging economic markets in CIS countries, your Company is exploring a business alliance for marketing its various products.

5. RESEARCH & DEVELOPMENT

a. Formulations:

Your Company as reported earlier has launched products in the various therapeutic areas. The Company has developed formulations as collaboration projects with overseas Companies and the dossiers of products have been submitted for registration. Cost reduction exercise was completed on products which would result in cost savings besides being environmental friendly and solvent free process.

The Company has developed novel drug delivery technologies and patents for Gastro retention dosage form, multilayer tablets, floating suspensions and matrix system were filed during the current year.

b. Synthetics:

Your Company's main focus is on the development of cost-effective processes for generic APIs, based on patent expiry. Process development and improvement for the existing range of products such as dorzolamide, brimonidine tartrate, fluconazole and famciclovir was undertaken during the year. Non-infringing route for the synthesis of fluconazole was developed and successfully transferred to Roha. QP audit and WHO GMP inspection was performed for latanoprost manufacturing facility at Jogeshwari, Mumbai and the WHO GMP certificate was received.

In collaboration with National Chemical Laboratory, Pune, New Chemical Entities with antifungal activity have been developed. Few of those have shown promising results and are in the process of patenting.

During the year, your Company has filed 4 Patents and 5 Patents have been granted for dorzolamide, duloxetine and NCE Series. Two new DCP's were submitted for Ophthalmic products.

c. Nutraceuticals:

Your Company's reputed energy drink, "Enerzal" powder was introduced in attractive zip-pack pouch. During the year, the Company has also launched Simyl MCT and Prosoyal with milk fat. The formulation of Simyl MCT and Prosoyal has been certified by BIS (Bureau of Indian Standards).

After the successful launch of its infant milk substitute, MUM-MUM 1, your Company is in the process of launching MUM-MUM 2, a specially developed infant milk substitute for infants between six months to one year taking into account the nutritional needs of the infants.

The Company has successfully completed ISO 22000:2005, re-certification audit and HACCP surveillance audit for Roha plant.

d. Biotechnology:

As reported to you earlier, with regard to the license technology agreement signed by your Company with an Israel based company, for production and purification of recombinant protein licensed to FDC, five consistency batch data dossier alongwith animal toxicity studies protocol was submitted to the Department of

Biotechnology (DBT). DBT has granted permission to conduct preclinical toxicity studies of FDC's recombinant product. The results of the efficacy studies are found to be promising and are in consonance with the international standard samples.

On completion of the toxicity trials, the entire pre-clinical study data shall be submitted to DBT for evaluation. Once the permission is granted, FDC will be proceeding with human clinical trials.

6. PERSONNEL

The overall industrial and employee relations remained healthy. Information as per section 217(2A) of the Companies Act, 1956, read with Companies (Statement of Particulars of Employees) Rules, 1975, forms a part of this report. However, as per the provisions of section 219(1)(b)(iv) of the said Act, this report and the accounts are being sent to all shareholders excluding the particulars of employees under section 217(2A). Any shareholder interested in obtaining a copy of the statement may write to the secretarial department at the corporate office of the Company.

7. SOCIAL RESPONSIBILITIES

In discharge of its social obligations, your Company regularly contributes to trusts formed for charitable purposes. FDC also assists several organisations in medical camps conducted all over the Country.

8. DIRECTORS

Mr. Vinod G. Yennemadi is appointed as an additional director of the Company w.e.f. June 08, 2012, to hold office until the ensuing annual general meeting, at which he shall be eligible for appointment as a director retiring by rotation. As required under section 257 of the Companies Act, 1956, the Company has received notice from a member signifying his intention to propose Mr. Vinod G. Yennemadi for the office of director along with a deposit of Rs. 500 with the notice. In accordance with article 60 of the articles of association and the relevant provisions of the Companies Act, 1956, CA Girish C. Sharedalal and Mr. Ashok A. Chandavarkar, retire by rotation at the ensuing annual general meeting and being eligible, offer themselves for re-appointment.

9. DIRECTORS' RESPONSIBILITY STATEMENT

Your directors confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended March 31, 2012 and of the statement of profit and loss for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the directors have prepared the annual accounts on a going concern basis.

10. CORPORATE GOVERNANCE

As required by the existing clause 49 of the listing agreements entered into with the stock exchanges, a separate report on corporate governance is given as a part of the annual report alongwith the auditors' statement on its compliance.

11. AUDITORS

The existing statutory auditors of the Company, M/s. S.R. Batliboi & Associates, Chartered Accountants, Mumbai, have communicated to the Company their unwillingness to be re-appointed as the statutory auditors of the Company and hence are not offering themselves for re-appointment in the ensuing annual general meeting.

The Company has received a special notice under the provisions of section 225 of the Companies Act, 1956, proposing the appointment of M/s. S.R. Batliboi & Co., Chartered Accountants, as the statutory auditors of the Company in place of the retiring auditors. The Company has also received a certificate pursuant to section 224(1B) of the Companies Act, 1956, from M/s. S.R. Batliboi & Co., certifying their eligibility for appointment as statutory auditors of the Company.

12. COST AUDITORS

The directors have appointed Shri. Prakash A. Sevekari, Cost Auditor, to conduct the cost audit of bulk drugs and formulations for the financial year ending March 31, 2013.The requisite applications for approval of his appointment has already been submitted to the Central Government by this date.

13. PUBLIC DEPOSITS

During the year under review, the Company has not accepted any fixed deposits.

14. PARTICULARS OF SUBSIDIARIES AND ITS OPERATIONS

Based on valuation of independent valuers, the Board of Directors, at its meeting held on October 15, 2011, had resolved to purchase 100% equity shares of Anand Synthochem Limited (ASL), a related, unlisted Public Company, from its erstwhile shareholders, for a total consideration of Rs.644.58 lacs (including a loan of Rs.38.42 lacs), thereby making ASL, a Wholly Owned Subsidiary(WOS) of FDC Limited w.e.f. October 17, 2011. Though ASL does not have any substantial operations, it owns a property at Dombivali, Maharashtra, admeasuring 81,855 sq.ft. which FDC proposes to use for its business operations. ASL has reported a loss of Rs. 2.09 lacs (The loss is during the period October 17, 2011 to March 31, 2012).

Your Company's WOS at USA, namely FDC Inc., reported a loss of USD 1,440 (i.e. Profit of Rs.5.28 lacs on account of exchange gain on currency translation).

Your Company's WOS at UK, namely FDC International Ltd., has reported a profit of £ 230,946 (Rs.196.76 lacs).

Your Company's joint venture business at South Africa namely Fair Deal Corporation Pharmaceutical SA (Pty) Ltd., reported a profit of ZAR 229,912 (Rs.20.94 lacs).

As per the directions of the Central Government vide its general notification dated February 08, 2011, the financial data of the subsidiaries is disclosed in the annual report in compliance with the said circular.

Also, as directed by the Central Government, annual accounts of the subsidiaries and the related detailed information will be made available to the holding and subsidiary company investors, on request and the same is available for inspection by the members at the registered office of the Company, between 10.00 a.m. to 12.00 noon on all days except Friday and holidays, till this annual general meeting and will also be placed before the said meeting.

Any shareholder interested in obtaining a copy of the annual accounts of the subsidiary companies may write to the secretarial department at the corporate office of the Company. The annual accounts of the individual subsidiary companies are also available on the Company's website - www.fdcindia.com.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information pursuant to 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 annexed as Annexure A to this report.

16. ACKNOWLEDGMENTS

Your Directors take this opportunity to place on record their gratitude for the continued support and co-operation extended to the Company by the medical fraternity, trade, Government agencies, financial institutions, investors, bankers, consumers and employees.

For and on behalf of the board

Place: Mumbai MOHAN A. CHANDAVARKAR

Date : June 08, 2012 Chairman and Managing Director


Mar 31, 2011

Dear Members,

The directors are pleased to present their report on the business and operations of your Company for the year ended March 31, 2011.

1. FINANCIAL RESULTS

Year ended Year ended 31.03.2011 31.03.2010 Rupees in lacs Rupees in lacs

Sales (gross) 70,710.49 63,128.66

Other income 3,189.23 3,172.47

Gross profit (before finance expenses & depreciation) 19,119.35 19,559.16

Deductions:

Finance expenses 133.98 131.99

Depreciation 1,698.54 1,448.03

Profit before taxation 17,286.83 17,979.14

Provision for taxation 2,240.38 2,872.43

Provision for taxation - earlier years written off 171.86 224.78

Profit after taxation 14,874.59 14,881.93

Brought forward profit 20,842.48 12,736.11

Amount available for appropriation 35,717.07 27,618.04

Appropriations:

Final dividend - proposed 3,688.63 3,259.87

Dividend tax 598.39 541.42

Transfer to general reserve 3,000.00 3,000.00

Reversal of excess provision of dividend – (25.73)

Balance carried over to next year 28,430.05 20,842.48

35,717.07 27,618.04

Previous year's figures have been re-grouped/ re-classified, wherever necessary to confirm to this year's classification.

2. DIVIDEND

Your board of directors recommend a dividend of Rs.2 (200%) per equity share of Re.1/- each for the year 2010-2011. The same, if declared at the forthcoming annual general meeting will be paid to those shareholders' whose names stand registered in the register of members as on September 24, 2011. This dividend is tax free in the hands of the shareholders.

3. BUYBACK OF EQUITY SHARES

As a policy of constantly rewarding and enhancing the shareholders value, your Company vide a board resolution dated January 27, 2011, has approved the buyback of its fully paid up equity shares from the stock exchange operations, at a price not exceeding Rs. 135/- per share upto an amount of Rs. 50 crores being less than 10% of the total paid up capital and free reserves based on audited accounts for the year ended March 31, 2010. The buyback commenced on February 18, 2011. The Company has bought back 1,708,828 equity shares upto March 31, 2011 and all the shares bought back in the buyback offer upto March 31, 2011 have been extinguished as on date. Further 1,38,062 equity shares were bought back as on the date of this report.

4. BUSINESS REVIEW

The Indian economy remained relatively insulated from the impact of the worst global recession. The Indian Pharmaceutical Market (IPM) grew by 14.8 % to touch the market size of Rs.54,174 crores, during the year ended March 2011 (Source: AIOCD AWACS ). This reflects a robust CAGR of around 15% in the past five years. It is expected that IPM will continue to grow at 15-17% in the next five years. The key drivers have been growth in Gross Domestic Product (GDP), urbanization, increase in health awareness, penetration to smaller towns and wider health insurance coverage. The Government has also shifted its focus on extending healthcare services to the poor and the underprivileged.

The Chronic disease segment, namely the cardio-vascular, anti-diabetic, anti-hypertensives and oncology continued to dominate the Pharma market. Acute therapies and chronic therapies are growing at 13.8% and 16.7% respectively (Source: AIOCD AWACS ). Further, increasing population in the ageing group, will boost the demand for the typical age related diseases as stated above.

Around 3,939 products were introduced in the current year April 2010 to March 2011.

India is seen as the third largest generic pharma market in the world. By 2020, it is expected that half of the generic market will be between India, China and USA. Globally the generic market has shown a robust growth and this is expected to further strengthen by more drugs going off patent by the year 2015.

The Indian Pharma Industry still has to face some great challenges. The much awaited Drug Pricing Policy, which is expected to rope in many products under price control, is yet to see the light of the day. Even though the same remains to be an area of uncertainty, it is hoped that the representation from industry associations will help the Government to frame the policy in the best interest of all the concerned.

The Pharma Industry continues to comply with the strict quality regulations set by various international authorities across the world. Failure to comply with these regulations may result in severe consequences leading to prohibition to sale/or export. With many products going off patent, competition and patent litigation is expected to increase. Spurious products continue to remain a major threat to reputed brands.

Against the above market background, we give below a brief review of various functions of your Company:

Marketing:

Your Company registered a market growth of 13.4% in the current year April 2010 to March 2011. Your Company is ranked at the 24th position, attaining a market share of 1.3% (Source: AIOCD AWACS March 2011).

Your Company's flagship antibiotic brand "ZIFI" with all its brand extensions continued to show outstanding performance. ORS leadership continues with your brand "ELECTRAL" in the domestic market. Few openings for the brand are getting good recognition in several countries. Our effort continues aggressively in the chronic segment with the introduction of latest molecules in the market.

We are in the process of building marketing organisation based on knowledge, training and performance of our representatives in the doctors' chambers, specially with the current restrictions and codes introduced by medical council, across the country and accepted by the industry association.

b. Financial Performance:

Your Company's turnover increased by 12%. However, the profits stagnated due to increased employees' cost and higher manufacturing/marketing costs. The treasury income has been moderate due to fluctuating markets. The Company continues its efforts to improve the performance through operational efficiencies and incremental business. Cost controls across all levels of functions is a continuous and ongoing exercise. The Company's internal control procedures commensurate to the extent and nature of its operations.

c. Exports:

The annual export turnover for the year ended March 31, 2011 was Rs. 7,019.10 lacs as compared to year ended March 31, 2010 which stood at Rs. 5,707.54 lacs. The improved export performance resulted from API sales to USA, Japan and from sales of finished dosage forms to CIS, UAE, Cuba & Africa.

Major NGO's continued to endorse their faith in Company's competence & reliability in delivering quality products. The Company is one of the preferred sources for procurement of Oral Rehydration Salts, ReSoMal & Zinc Sulphate dispersible tablets, by the leading NGO's for their emergency procurement plans.

5. RESEARCH & DEVELOPMENT

a. Formulations:

Your Company as reported earlier, has launched products in the various therapeutic groups. Number of new dosages in New Drug Delivery Systems are in R&D pipeline. Cost reduction exercise was completed on products which would result in cost savings besides being environmental friendly and solvent free process.

In the month of April 2011, your Company's active pharmaceutical ingredient facility at Roha, Raigad, Maharashtra, was inspected and awarded US FDA accreditation with no 483. Various patent applications and dossier filings were undertaken during the current year.

b. Synthetics:

Technology for preparation of Polymorph III of Fluconazole has been transferred to Roha Plant successfully. Laboratory development work for various ophthalmic products are under active development and some have reached near completion. In collaboration with National Chemical Laboratory, Pune, several New Chemical Entities with antifungal activity have been developed. Few of those have shown promising results and are in the process of patenting.

c. Nutraceuticals:

The start of the financial year '2010-2011' saw the launch of a bigger 100 gms. sachet of your Company's reputed energy drink, " Enerzal" powder. This gave a significant boost to the Enerzal sales.

Your Company's reputed ORS brand "Electral" as a ready to serve drink, is the only innovative World Health Organisation (WHO) recommended Oral Rehydration Salt (ORS) in tetra pack. Ever since its launch, this brand has shown significant growth and has been well accepted by pediatricians for its rationale osmolarity (245mOsmol/L).

d. Biotechnology:

As reported to you earlier, with regard to the license technology agreement signed by your Company with an Israel based company, for production and purification of recombinant protein licensed to FDC, five consistency batch data dossier from seed to final formulated product is ready for submission to The Department of Biotechnology. These data also includes the protocol for conducting preclinical animal toxicity studies of FDC's recombinant product. Once the permission is granted, FDC will be proceeding with the animal toxicity.

6. PERSONNEL

The overall industrial and employee relations remained healthy. Information as per Section 217(2A) of the Companies Act, 1956, read with Companies (Statement of Particulars of Employees) Rules, 1975, forms a part of this report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, this report and the accounts are being sent to all shareholders excluding the particulars of employees under Section 217(2A). Any shareholder interested in obtaining a copy of the statement may write to the secretarial department at the corporate office of the Company.

7. SOCIAL RESPONSIBILITIES

In discharge of its social obligations, your Company regularly contributes to trusts formed for charitable purposes. FDC also assists several organisations in medical camps conducted all over the Country.

8. DIRECTORS

In accordance with Article 60 of the Articles of Association and the relevant provisions of the Companies Act, 1956, Mr. Ameya A. Chandavarkar and Dr. Nagam H. Atthreya, retire by rotation at the ensuing annual general meeting and being eligible, offer themselves for re-appointment.

9. DIRECTORS' RESPONSIBILITY STATEMENT

Your directors confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended March 31, 2011 and of the Profit and Loss Account for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the directors have prepared the annual accounts on a going concern basis.

10. CORPORATE GOVERNANCE

As required by the existing clause 49 of the listing agreements entered into with the stock exchanges, a separate report on corporate governance is given as a part of the annual report alongwith the auditors' statement on its compliance.

11. AUDITORS

The auditors of your Company M/s. S.R. Batliboi & Associates, Chartered Accountants, Mumbai, retire at the ensuing annual general meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

12. COST AUDITORS

The directors have appointed Shri. Prakash Sevekari, Cost Auditor, to conduct the cost audit of bulk drugs and formulations for the financial year ending March 31, 2012. The requisite applications for approval of his appointment will be submitted to the Central Government.

13. PUBLIC DEPOSITS

During the year under review, the Company has not accepted any fixed deposits.

14. PARTICULARS OF SUBSIDIARIES AND ITS OPERATIONS

Your Company's Wholly Owned Subsidiary (WOS) at USA, namely FDC Inc., reported a loss of USD 1,471 (Rs. 1.19 lacs) for the year ended March 31, 2011.

Your Company's WOS at UK, namely FDC International Limited, has reported a profit of £154,434 (Rs. 116.26 lacs) for the year ended March 31, 2011.

Your Company's joint venture business at South Africa namely Fair Deal Corporation Pharmaceutical SA (Pty) Limited, reported a profit of ZAR 1,289,127 (Rs. 88.92 lacs) for the year ended March 31, 2011.

Central Government vide its general notification dated February 08, 2011 has granted general exemption to Companies from attaching the accounts of the subsidiaries. However, as per the directions of the Central Government, in its notification, the financial data of the subsidiaries have been furnished under "Notes to the Consolidated Financial Statements".

Also, as directed by the Central Government, annual accounts of the subsidiaries and the related detailed information will be made available to the holding and subsidiary company investors, on request and the same is available for inspection by the members at the registered office of the Company, between 10.00 a.m. to 12.00 noon on all days except Fridays and holidays, till the date of the forthcoming meeting and will also be placed before the said meeting.

Any shareholder interested in obtaining a copy of the annual accounts of the subsidiary company and the detailed information with the financial statement of the said subsidiaries may write to the secretarial department at the corporate office of the Company. Also details of accounts of the individual subsidiary companies are available on the Company's website www.fdcindia.com

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information pursuant to 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 annexed as Annexure A to this Report.

16. ACKNOWLEDGEMENTS

Your Directors take this opportunity to place on record their gratitude for the continued support and co-operation extended to the Company by the medical fraternity, trade, Government agencies, financial institutions, investors, bankers, consumers and employees.

For and on behalf of the board

Place : Mumbai MOHAN A. CHANDAVARKAR

Date : May 26, 2011 Chairman and Managing Director


Mar 31, 2010

The directors are pleased to present their report on the business and operations of your Company for the year ended March 31, 2010.

1. FINANCIAL RESULTS

Year ended Year ended 31.03.2010 31.03.2009 (Rupees in lacs) (Rupees in lacs)

Sales (gross) 65,999.75 59,297.98

Other income 3,172.47 1,164.71

Gross profit (before finance expenses & depreciation) 19,559.16 1,1904.83

Deductions:

Finance expenses 131.99 146.04

Depreciation 1,448.03 1,273.31

Profit before taxation 17,979.14 10,485.48

Provision for taxation - 2,872.43 2,107.56 current year

Provision for taxation - earlier years 224.78 35.00

Profit after taxation 14,881.93 8,342.92

Brought forward profit 12,736.11 9,643.17

Amount available for appropriation 27,618.04 17,986.09

Appropriations:

Final dividend - proposed 3,259.87 2,350.51

Dividend tax 541.42 399.47

Transfer to general reserve 3,000.00 2,500.00

Reversal of excess provision of dividend (25.73) -

Balance carried over to next year 20,842.48 12,736.11

27,618.04 17,986.09



Previous years figures have been re-grouped/re-classified, wherever necessary to confirm to this years classification.

2. DIVIDEND

Your board of directors recommend a dividend of Rs.1.75 (175%) per equity share of Re.1/- each for the year 2009-2010. The same, if declared at the forthcoming annual general meeting will be paid to those shareholders whose names stand registered in the register of members as on August 21, 2010. This dividend is tax free in the hands of the shareholders.

3. BUYBACK OF EQUITY SHARES

The shareholders vide a postal ballot resolution dated December 21, 2009, approved the buyback of 86,50,000 fully paid up equity shares having a face value of Re. 1/- each, through the stock exchanges, at a price not exceeding Rs. 65/- per share, upto an amount of Rs. 5,600 lacs.

The buyback of shares commenced on April 12, 2010. The Company has however not been able to buyback any shares in the buyback offer, since the current market price is higher than the maximum offer price, stipulated in the buyback offer.

4. BUSINESS REVIEW

The world economy witnessed signs of recovery from one of the worst global recession. Even though India experienced the tremors of the global economic melt down, the impact was not that severe. It is expected that by the year 2015, the Indian Pharmaceutical Market (IPM) will be valued at US $20 billion. Many factors will lead way to a healthy growth in the pharma sector. Generics are seen as the future markets, wherein India and China are expected to play key roles.

The Indian Pharma market looks bright, with loads of opportunities for growth. The increasing disposable income, the growing health awareness, the increase in the lifestyle related diseases, the easy availability of modern medicinal amenities and affordable medical insurance will increase the demand for the domestic and allopathic medicines. Further, the increasing population in the ageing group, will boost the demand for the typical age related diseases such as cardio- vasculars, diabetics, hypertensives and oncology.

The IPM grew by 17.7% to touch the market size of Rs. 41,701 crores during the year ended March 2010. Around 2,100 products were introduced in the current year 2009-2010. Indian Companies continued to lead the IPM as compared to the multinationals. Indian Companies outgrew the market at 15.9%, while multinationals registered a growth of 15%. Acute segment continued to dominate the market.

The Indian Pharma Industry still has to face some great challenges. The new price control policy is still pending review by the Government. Compulsory licensing, patent oppositions and litigations, increasing regulations and compliances, infrastructure development and menace of counterfeit drugs are seen as major hurdles.

Against the above market background, we give below a brief review of various functions of your Company:

a. Marketing

Your Company registered a growth of 12.8% as against the IPM growth of 17.7%. Your Company is ranked at the 23rd position, attaining a market share of 1.68%. [Source: Organisation Research Group (ORG) March, Moving Annual Total (MAT) 2010]

In 2009, the Companys top brand “ELECTRAL” was launched in a ready to serve tetra pack. This brand has registered a robust growth and is the only innovative World Health Organisation (WHO) recommended Oral Rehyderation Salt (ORS) in tetra pack for the first time in the country. This brand has been well accepted by pediatricians for its rationale osmolarity.

Gutrite, with its aggressive performance in the pre- probiotic combination market has done impressively well and has been very well appreciated by pediatricians.

Your Company introduced various products during the year 2009-2010 which are being aggressively promoted in various therapeutic categor ies. The performance of the new products are encouraging.

With a view to improve the doctor coverage, the Company has launched a new division with a primary focus on coverage of pediatricians. The new division will have a pan India presence in the current year.

b. Financial Performance

Your Companys turnover and net profits increased by 11.30% and 78.38% respectively over the previous year.

The measures initiated by the Company in terms of investments in the field / new product pipeline and cost control have resulted in better sales and profitability.

As you are aware, the Companys treasury operations suffered a set back in the previous year due to extreme market volatility. However, with the new Government in place during the current year, the markets have stabilised and have yielded good returns during the current year.

On international front your Company was not much affected by foreign exchange fluctuations, due to less dependence on exports.

Cost controls across all levels of functions is a continuous and ongoing exercise.

The Companys internal control procedures commensurate to the extent and nature of its operations. The internal audit reports are regularly placed before the audit committee for its review.

c. Exports

The annual export turnover of your Company for the year ended March 31, 2010 was Rs. 5,587.74 lacs as compared to Rs. 5,064.39 lacs for the year ended March 31, 2009. The improved performance resulted from products exported to USA, UK, South America, Ukraine, Myanmar and Afghanistan. New product registrations were received in the UK, Ukraine, Malaysia, Vietnam, Kenya, Lithuania, Chile, Ethiopia and Mozambique. Opportunities for markets in USA, UK and rest of the world are being explored.

Major NGOs continued to endorse their faith in Companys competence and reliability in delivering quality products. The Company is a preferred source for procurement of ORS, ReSomal and Zinc Sulphate tablets by the leading NGOs for their emergency procurement plans.

5. RESEARCH & DEVELOPMENT

a. Formulations

Your Company as reported earlier, has launched products in the various therapeutic groups. R&D is in the pipeline for various other products. Cost reduction exercise was completed on products which would result in cost savings besides being environmental friendly and solvent free process.

Your Company recently commissioned NOVEL DRUG DELIVERY RESEARCH LABORATORY,(NDDR) for increasing overall therapeutic and commercial value of commonly prescribed drugs, by enhancing their performance and reducing adverse effect profile, thereby improving patient convenience and compliance. The current focus of the NDDR is on the selected therapeutic segments like anti-infectives, respiratory and anti-inflammatory agents.

Various patent applications and dossier filing were undertaken during the current year.

b. Synthetics

Laboratory process development for the synthesis of Famciclovir was developed and technology was successfully transferred to Roha Plant.

Backward integrated APIs in Dermatology and Ophthalmology segments are under active development. In collaboration with National Chemical Laboratory, Pune, several compounds with antifungal activity have been developed. Few of those compounds have shown promising results.

Seven process patents have been filed. Three Patents have been granted for improved process for Dorzolamide and manufacture of Flurbiprofen, respectively. U.S. Drug Master File submissions for Latanoprost is in the final stage.

c. Nutraceuticals

Your Company successfully launched brand extension to its well established and recognised energy drink “ENERZAL” Orange and Lime flavour.

After the successful launch of its infant milk substitute, MUM-MUM 1, your Company is in the process of launching MUM-MUM 2, a specially developed infant milk substitute for infants between 6 months to 1 year taking into account the nutritional needs of the infants.

d. Biotechnology

As reported to you earlier, with regard to the license technology agreement signed by your Company with an Israel based Company, for production and purification of recombinant protein licensed to FDC, your Company has received the test license from Daman Food and Drug Administration, for containerisation of the recombinant product in the pre-filled syringes from an external party. Compilation of data for consistency batch dossier is underway. The consistency batch data will be submitted to the Department of Bio-technology, for obtaining permission to conduct pre-clinical trials of the recombinant product.

6. PERSONNEL

The overall industrial and employee relations remained healthy. Information as per section 217(2A) of the Companies Act, 1956, read with Companies (Statement of Particulars of Employees) Rules, 1975, forms a part of this report. However, as per the provisions of section 219(1)(b)(iv) of the said Act, this report and the accounts are being sent to all shareholders excluding the particulars of employees under section 217(2A). Any shareholder interested in obtaining a copy of the statement may write to the secretarial department at the corporate office of the Company.

7. SOCIAL RESPONSIBILITIES

In discharge of its social obligations, your Company regularly contributes to trusts formed for charitable purposes. FDC also assists several organisations in conducting medical camps all over the country.

8. DIRECTORS

In accordance with Article 60 of the Articles of Association and the relevant provisions of the Companies Act, 1956, Dr. R.H. Muljiani and Dr. S.S. Ugrankar, retire by rotation at the ensuing annual general meeting and being eligible, offer themselves for re-appointment.

Mr. Ameya A. Chandavarkar was appointed as a whole- time director of the Company for a period of five years, w.e.f. from November 01, 2009, subject to the approval of the Central Government. His appointment was approved by the shareholders vide a postal ballot special resolution dated December 21, 2009. Necessary application for seeking approval of the Central Government is already submitted .

9. DIRECTORS RESPONSIBILITY STATEMENT

Your directors confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended March 31, 2010 and of the profit and loss account for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the directors have prepared the annual accounts on a going concern basis.

10. CORPORATE GOVERNANCE

As required by the existing clause 49 of the listing agreement entered into with the stock exchanges, a separate report on corporate governance is given as a part of the annual report alongwith the auditors statement on its compliance.

11. AUDITORS

The auditors of your Company M/s. S.R. Batliboi & Associates, Chartered Accountants, Mumbai, retire at the ensuing annual general meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

12. COST AUDITORS

The directors have appointed Shri. Prakash Sevekari, Cost Auditor, to conduct the cost audit of bulk drugs and formulations for the financial year ending March 31, 2011. The requisite applications for approval of his appointment will be submitted to the Central Government.

13. PUBLIC DEPOSITS

During the year under review, the Company has not accepted any fixed deposits.

14. PARTICULARS OF SUBSIDIARIES AND ITS OPERATIONS

Your Companys Wholly Owned Subsidiary (WOS) at USA, namely FDC Inc., reported a loss of USD 1,260 (Rs. 6.19 lacs) for the year ended March 31, 2010.

Your Companys WOS at UK, namely FDC International Ltd., has reported a profit of GBP 219,748 (Rs.150.16 lacs) for the year ended March 31, 2010.

Your Companys joint venture business at South Africa namely Fair Deal Corporation Pharmaceutical SA (Pty) Ltd., reported a loss of ZAR 1,990,094 (Rs. 118.82 lacs) for the year ended March 31, 2010.

In terms of section 212(8) of the Companies Act, 1956, the Company has received exemption from Government of India, Ministry of Company Affairs, New Delhi, from attaching the accounts of its subsidiaries viz. FDC International Limited, UK and FDC Inc., USA, for the financial year ended March 31, 2010. However, as directed by the Central Government, the financial data of the subsidiaries have been furnished under “Notes to the Consolidated Financial Statements”.

Also, as directed by the Central Government, annual accounts of the subsidiaries and the related detailed

information will be made available to the holding and subsidiary Companys investors, on request and the same is available for inspection by the members at the registered office of the Company, between 10.00 a.m. to 12.00 noon on all days except Fridays and holidays, till the date of the forthcoming meeting and will also be placed before the said meting.

Any shareholder interested in obtaining a copy of the annual accounts of the subsidiaries and the detailed information with the financial statement of the said subsidiaries, may write to the secretarial department at the corporate office of the Company. Also details of accounts of the individual subsidiary companies are available on the Companys website www.fdcindia.com

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information pursuant to 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 annexed as Annexure A to this Report.

16. ACKNOWLEDGMENTS

Your Directors take this opportunity to place on record their gratitude for the continued support and co-operation extended to the Company by the medical fraternity, trade, Government agencies, financial institutions, investors, bankers, consumers and employees.

For and on behalf of the board

Place : Mumbai MOHAN A. CHANDAVARKAR

Date : May 29, 2010 Chairman and Managing Director

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