Directors Report of Fredun Pharmaceuticals Ltd.

Mar 31, 2023

To our Shareowners, Customers, and Employees,

It is not easy to think long-term. I believe that long-term thinking is both a requirement and an outcome of true ownership. Owners are different from renters. Over my last few communications with you, we have been emphasising our long-term view of building a compounding P&L that will generate value for years to come. We will achieve it by focusing on our long-term strategy -- sharing our economies of scale with our customers as we grow. This is a powerful approach to building trust and increasing business with them, ultimately helping us grow our business both vertically and horizontally. In the process, we are also spawning into new markets globally.

FY23 has turned out to be yet another important year as we delivered a robust performance and reported record revenues of Rs. 276 Cr. a growth of 22.29% YoY and EBITDA grew by 92.07% YoY to Rs 29.58 crores. FY23 PAT stood at Rs 10.80 crores, an increase of 70.61% YoY.

It gives me great pleasure to provide a segmenvvt-wise update to you starting with the Exports, which form the majority of our current revenues:

Generics:

In the past fiscal year, Fredun Pharmaceuticals experienced substantial growth in our export business. 65% of our exports are attributed to our own branded products -- Fredun Generics, while the remaining 35% come from OEM exports. Notably, we either jointly or fully own the registrations for products that are part of our OEM exports, which gives us a level of indirect control and effectively makes these clients captive to our business. This control has contributed to our international expansion, demonstrated by our securing over 185 product registrations globally, with an aim to reach 220 by the next fiscal year. Our government and institutional sales have also seen a significant uptick, growing approximately 75% quarter-over-quarter in the last quarter of FY23. In the same period, we secured a one-year contract worth Rs. 65 crores with a Southeast Asian country, and revenue from this contract has already started to materialise, with full execution expected by Q2FY24. Alongside this robust growth, we''re planning to roll out 39 new OEM products in categories such as Food Supplements, Nutraceuticals, Cosmetics, and Personal Hygiene. Nutraceuticals:

Nutraceutical Exports have witnessed robust growth. We expect to see a constant growth of 15% QoQ over the next two years. Revenue from Nutraceuticals and Human Feed Supplements will cross USD 2 million in FY24.

Cosmeceuticals Exports:

We have added 19 new products under the Cosmeceuticals OEM division.

In my previous annual letter, we discussed our initial steps to transition from a B2B (Business-to-Business) model to a B2BC (Business-to-Business-to-Consumer) model. Over the next three years, we plan to further transition to a B2C (Business-to-Consumer) model. This change will involve digital transformations, forming trade partnerships, and other strategic moves. We have already taken several concrete steps towards achieving this goal.

Freossi®:

In FY23, we introduced 14 new products in the pet pharmaceuticals line, with another 36 in the works. We also plan to add another 23 products by Q3FY24. We also launched 16 products in our Pet Treat and

Nutritional Supplement category and plan to add 39 more soon. We believe these new additions will significantly boost our sales. In Q4 FY23, we rolled out a new, budget-friendly Pet Grooming product line that consists of 43 products. We''ll be adding 19 more products to this line soon, and we are beginning to see therevenue from this range from the beginning of FY24. We are the only company in India with access to patented tech pertaining to Pet Surgeries which we are in the process of launching in the coming months. We are also proud to be the first company in India to offer targeted functional foods for pets. In fact, we''re the only company in India that offers a complete range of pet care products, from medication, and food, to diagnostics/surgery support and more. Our goal is to become a one-stop shop for all pet care needs. We''re also getting ready to launch a specialised Pet Care Cosmetic line in Q3FY24. Additionally, we''re expanding into the large animal segment, and have plans in place to do so within the next three quarters.

Fredun Nutrition®: We are currently developing 27 new products that we expect to launch by Q2FY24. In addition, we plan to introduce 18 more New-Age Nutraceuticals by Q4FY24. Initially, we will focus on ethically promoting these new products to a select demographic in India. After the first year, we intend to expand their availability across the entire country over a period of 18 to 24 months. Our strategy includes a phased approach to increase reach and distribution across India.

Fredun Cosmetics:

a) BeautyFred®:

In the mass-market segment we are launching our beauty and personal care brand, Beautyfred. We are in the process of launching a comprehensive array of 119 products under ''BeautyFred''. These products are being introduced in a carefully planned, phase-wise manner over an 18-month period.

b) Bird and Beauty (BnB)®:

We are promoting a specialised group of 24 products to dermatologists throughout India in an ethical manner. We plan to expand this range by launching three additional products by Q2FY24. Production has already started in our newly established, state-of-the-art lotion manufacturing unit located in Palghar, initiated with a trial order this past December. We are on schedule to have this unit fully operational and commercialised by the end of the fiscal year FY24.

Fredun Generics®:

In our Fredun Generics division, we''ve seen significant growth, going from zero sales in FY22 to Rs 8 crore in FY23. We anticipate this will increase to over Rs 35 crore in FY24 and we have ambitious plans to increase that figure to Rs 150 crore over the next three years. This projected growth includes sales from a wide range of 162 products. These will be distributed through generic channels across India, as well as sold to high-end government hospitals and other institutions. Additionally, our Balm unit is doing well. We''ve secured orders

for 19 million units that will be fulfilled by the second quarter of fiscal year 2024. The first year of the launch will be extensive sampling and free distribution across India. One of our standout products is Chuu Balm, which is currently the most potent and also the most affordable balm in the market. It''s specifically priced to ease the suffering of economically disadvantaged communities.

Fredun Mobility®:

Under our brand name ''Brace On,'' we are extending our product offerings. To capitalise on our existing distribution channels, we''ve developed a new line of over 35 mobility products. This range includes back braces, walking aids, and post-surgery support aids. We are working closely with Doctors/Physiotherapists/Trainers and other industry related experts to penetrate the market.

Looking forward:

As part of our strategy for vertical integration, our state-of-the-art Bone Graft plant in Palghar is scheduled to begin validation trials by Q2FY24. We expect the plant to be fully operational by Q3FY24, and we anticipate seeing profitability and revenues from this business segment starting around Q3 to mid-Q4 of FY24.

We''re also focusing on consolidating our Original Equipment Manufacturer (OEM) business in Africa by focusing on working only via trusted partners in the continent which should positively impact our receivables further, and consequently the operational cash flows should improve. Furthermore, we continue to invest in research and development. By Q3FY24, we plan to open Research and Formulation Development centres specifically for Veterinary Products. We''re also planning to launch a unique Nutraceutical range for Pet Healthcare. These initiatives should enhance the long-term revenue and profitability of our Freossi brand.

In addition to our existing facilities in Palghar, to boost the supply chain and to boost the basket of products, we''ve expanded our manufacturing capabilities to 17 different locations across India. These sites will produce products under our company''s supervision and quality standards and will serve not only as production centres but also as distribution hubs across the country. We are also in the planning and implementing stages for a dedicated pet food facility in Palghar, which we aim to have operational by Q1FY25.

As we look forward, we believe that the overall opportunity for growth in consumer markets that our company is spawning into is enormous, and FY24 will be an important year. As you may have noticed, out of our core of being a pharma business serving customers in 50 countries, we have started spawning into Pet food and Pet care, Beauty and Personal Hygiene, Generics, and Mobility, with our own consumer brands. It is still early days as we prepare to launch. Our brands are manufactured in India, for the world. We plan to invest aggressively to build the foundation of a company that obsesses over serving consumer needs with operational excellence and high efficiency.

Our plan for building our consumer brands is the following:

1. Distribution and Systems Capacity -

We intend to build a significant distribution infrastructure to ensure we can support the sales consumers'' demand, with speedy access to a deep product inventory. You can see that while we have made tremendous improvements in our receivables levels -- our receivables level has come down from 40.5% of turnover in 21-22 to 12.6% of turnover in 22-23. Meanwhile, in the same period, we have built a deep pocket of inventory. This allows us to build an anti-fragile distribution capacity that allows us to consistently supply our offline distribution and also prepare the company to launch our digital channels.

2. Brand Promise -

Our company is still small and young relative to many brands and retailers in the markets we are entering -offline as well as online. We will ensure that we build wide, strong consumer relationships during this critical period.

3. Expanded product and service offerings -

We will continue to broaden our scope of products and services as well as add new initiatives.

4. Bench strength -

We will build a strong bench strength across India by investing in teams, processes, advertising, and people development practices. Scaling this is going to be enormously challenging but at the same time will create value for our shareowners and customers.

We built economies of scale over the last half a decade by steadily investing in building the plant, and a capable management team. Although the level of forward investment that we have carried out by building capacities may have impacted us in the short term, we believe that it will provide the best end-to-end experience for consumers, and actually offer the least risky long-term value creation approach for investors. TWe at Fredun Pharmaceuticals Limited are grateful to our customers for their business and trust, to each other for our hard work, and to our shareowners for their unending trust.

Your Director''s have an immense pleasure to present the 36th Annual Report together with the Audited Financial Statements for the year ended March 31,2023. (‘F.Y.2022-23'')

FINANCIAL RESULTS:

(Rs. In Lacs)
Particulars	For the financial	For the financial
	year ended 31.03.2023	year ended 31.03.2022
Income from Business Operations	27,434.17	22,173.69
Other Income	215.58	435.25
Total Income	27,649.75	22,608.94
Total Expenditure other than Financial Costs and Depreciation	24,689.82	21,066.42
Profit/ Loss before Interest,	2959.93	1,542.52
Depreciation and Taxes
Finance Cost	928.15	466.86
Depreciation / Amortization	280.93	215.67
Profit / Loss Before exceptional items and tax	1,750.85	859.99
Exceptional Income/ Expenses	0.00	0.00
Prior period adjustments	0.00	0.00
Profit / Loss before Tax	1750.85	859.99
Total Tax expenses	670. 19	226.46
Profit/(Loss) after Tax	1080.66	633.53

STATE OF AFFAIRS OF THE COMPANY:

Your Company earned a Total Income of Rs. 27,649.75 lakhs in the Financial Year ended March 31,2023 as compared to the Total Income of Rs. 22,608.94 Lakhs for the corresponding Financial Year ended March 31, 2022. There was 18.23 % hike in the Total Income of the Company.

Your Company''s Net Profit for the Financial Year 2022-2023 was Rs. 1080.66 Lakhs as compared to the Net Profit of Rs. 633.53 Lakhs for the Previous Year i.e., 2021-2022.

Your Company is well diversified in the business ranging from Formulations to Diagnostics to Consultancy. The Company has a unique range of products, from niche formulations, anti-diabetics to the latest anti-retroviral and anti-Hypertensive products.

Your Company is associated with many Governments of different countries which have also realised the need for robust and consistent healthcare systems. Hence there is a great potential for growth in near future.

Your Company is focusing in the Southeast Asian Markets and is doing well in African Markets by adding new molecules to achieve further economics of scale. Your Company has decided to add new products like cosmeceuticals and nutraceuticals in existing as well as in new markets where the registration process is going on. Considering a good potential for growth, your Company has ventured into a separate Generic Division to market different generic products at very competitive prices.

The financial and operational performance overview and outlook is provided in detail in the Management Discussion and Analysis Statement forming part of this Annual Report.

DIVIDEND:

The Board of Directors have recommended a final dividend of 7% on the paid-up ordinary Equity Shares of the Company payable to those shareholders of the Company whose names appear in the Register of Members as on the Record date.

TRANSFER TO RESERVES:

The Company proposes to transfer an amount of Rs. 8351.66 Lakhs to reserves for its future growth and diversification.

SHARE CAPITAL:

The paid-up Share Capital of the Company as on March 31,2023 was Rs. 4,53,22,720 consisting of 45,32,272 Equity Shares of Rs. 10 each.

Issue and Allotment of Equity Shares:

• During the year under review, your Company has converted 20,136 warrants allotted to Non-Promoters into 20,136 Equity Shares having a face value of Rs. 10/- each.

• During the year under review your Company has allotted of 61,993 Equity Shares to Non-Promoters having a face value Rs. 10/- each.

• During the year under review your Company has converted 17,500 warrants allotted to Non-Promoters into 17,500 Equity Shares having a face value of Rs. 10/- each.

SUBSIDIARY COMPANY, ASSOCIATE COMPANY AND JOINT VENTURE COMPANY:

The Company doesn''t have any Subsidiary, Joint Venture or Associate company and hence doesn''t require any reporting for the same.

Pursuant to first proviso to sub-section (3) of section 129 read with Rule 5 of Companies (Accounts) Rules, 2014, Form AOC-1 is annexed to this report as “Annexure I”

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company; Mr. Fredun Nariman Medhora (DIN: 01745348) is liable to retire by rotation at the ensuing 36th Annual General Meeting and being eligible, has offered himself for re-appointment. His re-appointment is being placed for your approval at the ensuing 36th Annual General Meeting. During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declaration from all the Independent Directors under Section 149(7) of The Companies Act, 2013 in the first Board Meeting of the Financial Year 2022-23 held on April 08, 2022; stating that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (5) of the Companies Act, 2013 ("the Act"), Directors of your Company confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(i) your 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 as at March 31,2023 and its loss for the year ended on that date;

(ii) your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iii) your Directors have prepared the Annual Accounts for the financial year ended March 31,2023 on a going concern basis;

(iv) your Directors have laid down internal financial controls which are followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(v) your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF INDIVIDUAL DIRECTORS:

Pursuant to provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of the perfomance of the Board, its Committees and of individual Directors. Performance evaluation has been carried out as per the Nomination & Remuneration Policy of the Company.

BOARD MEETINGS AND COMMITTEE MEETINGS:

• Eleven (11) Board Meetings were held during the Financial Year 2022-23. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report which is annexed herewith.

• Four (4) Audit Committee Meetings were held during the Financial Year 2022-23. The details of the Audit Committee Meetings and the attendance of the Directors are provided in the Corporate Governance Report which is annexed herewith.

• One (1) Nomination & Remuneration Committee Meeting was held during the Financial Year 2022-23. The details of the Nomination & Remuneration Committee Meetings and the attendance of the Directors are provided in the Corporate Governance Report which is annexed herewith.

• One (1) Stakeholders Relationship Committee Meeting was held during the Financial Year 2022-23. The details of the Committee Meeting and the attendance of the Directors are provided in the Corporate Governance Report which is annexed herewith.

• One (1) Independent Directors Committee Meeting was held during the Financial Year 2022-23. The details of the Committee Meeting and the attendance of the Directors are provided in the Corporate Governance Report which is annexed herewith.

• Two (2) Corporate Social Responsibility Committee Meeting was held during the Financial Year 2022-23. The details of the Committee Meeting and the attendance of the Directors are provided in the Corporate Governance Report which is annexed herewith.

The details of attendance of Directors at the Board Meeting and Members at the Committee Meetings are disclosed under Corporate Governance section of Annual Report.

AUDIT COMMITTEE:

The Audit Committee consists of the following members as on March 31,2023:

Sr. No.	Name	Category
1	*Dr. Chandrakant Shah	Non-Executive Independent Director
2	Mr. Fredun Medhora	Executive Director
3	Dr. Rohiton Kanga	Non-Executive Independent Director

* Mr. Chandrakant Shah has resigned from the position of Non-Executive Independent Director with effect from July 19, 2023.

During the year under review, the Board has accepted all the recommendation of the Audit Committee. The details terms of reference, meetings of committee, attendance of members at Committee meetings are available in the Corporate Governance Report and forms part of this Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors, employees and its stakeholders to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or Ethics Policy. The policy provides for adequate safeguards against victimization of employees and provides for direct access to the Chairman of the Audit Committee. The same is also available on the website of the Company at www.fredungroup.com

NOMINATION & REMUNERATION COMMITTEE:

In compliance with the provisions of Companies Act, 2013, your Company has ‘Nomination & Remuneration Committee'' with scope and functions as stipulated under the Companies Act, 2013 and SEBI (LODR) Regulations. The Nomination and remuneration Committee consists of the following members as on March 31,2023.

Sr. No.	Name	Category
1	Dr. Rohiton Kanga	Non-Executive Independent Director
2	*Dr. Chandrakant Shah	Non-Executive Independent Director
3	Dr. Aspi N. Raimalwala	Non-Executive Independent Director

* Dr. Chandrakanf Shah has resigned from the position of Non-Executive Independent Director with effect from July 19, 2023.

The terms of reference, meetings of Committee, attendance of members at Committee meetings are available in the Corporate Governance Report and forms part of this Annual Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE:

Your Company has Stakeholders Relationship Committee with enhanced scope and functioning. The Stakeholders Relationship Committee consists of the following members as on March 31,2023.

Sr. No.	Name	Category
1	*Dr. Chandrakant Shah	Non-Executive Independent Director
2	Dr. (Mrs.) Daulat N. Medhora	Executive Director
3	Dr. Aspi N. Raimalwala	Non-Executive Independent Director

* Dr. Chandrakant Shah has resigned from the position of Non-Executive Independent Director with effect from July 19, 2023.

The terms of reference, meetings of committee, attendance of members at Committee meetings are available in the Corporate Governance Report and forms part of this Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions. The Policy can be accessed on the Company''s website at www.fredungroup.com. During the year under review, all related party transactions entered into by the Company, were approved by the Audit Committee and were at arm''s length and in the ordinary course of business. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arm''s length basis. During the year under review there were no material related party contracts entered into by the Company requiring shareholders'' approval.

There were no materially significant Related Party Transactions made by the Company during the year that would fall under the scope of Section 188 of the Company Act, 2013. Disclosure in Form AOC-2 in terms of Section 134(3) (h) of The Companies Act, 2013 is annexed as “Annexure II”.

The policy on materiality of information / documents and dealing with it has been approved by the Board and the same is also available on the website of the Company at www.fredungroup.com.

CORPORATE SOCIAL RESPONSIBILITY:

During the year under review i.e., for the Financial Year 2022-23; the Company under statutory obligation was required to spend an amount of Rs.9,53,408.00/- as contribution towards the Corporate Social Responsibility activities.

Since the Company could not find any suitable projects to opportunities during the year to incur CSR expenditure, the Company has not spent the requisite amount.

The Company has a Policy on Corporate Social responsibility (CSR) duly approved by the Board and the same has been hosted on Company''s website at www.fredungroup.com.

The detailed report on CSR is enclosed as “Annexure-III” to the report.

STATUTORY AUDITORS:

In accordance with the provisions of Section 139 of the Companies Act, 2013, at the Annual General Meeting held on September 27, 2018, M/s. Savla & Associates, Chartered Accountants, (Firm Registration No. 109361W) were appointed as the Statutory Auditors of the Company for a second term of 5 consecutive years commencing from the conclusion of 31 st Annual General Meeting (AGM) till the conclusion of the ensuing 36 th AGM of the Company. Accordingly, the second term of M/s. Savla & Associates, Chartered Accountants as the Statutory Auditors is ending at the conclusion of ensuing 36 th AGM of the Company and hence they are ineligible for re-appointment.

Based on the recommendation of Audit Committee, the Board of Directors of the Company at their meeting held on May 24, 2023 approved and recommended to the members of the Company, appointment of M/s. R.H. Nisar & Co. (Chartered Accountant) (Firm Registration Number: 103659), as Statutory Auditors of the Company from the conclusion of the 36 th Annual General Meeting of the Company till the conclusion of the 41st Annual General Meeting of the Company. The resolution for the appointment of M/s. R.H Nisar & Co. Chartered Accountants, as Statutory Auditors of the Company is placed at the ensuing AGM for approval of members of the Company. The Company has received consent letter and eligibility certificate under sections 139 and 141 of the Companies Act, 2013 from M/s. R.H Nisar & Co. Chartered Accountant, confirming that they are eligible for appointment as Statutory Auditors of the Company.

AUDITORS’ REPORT:

The Auditors'' Report on Standalone Financial Statements for the year ended March 31,2023 forms integral part of this Annual Report

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Savla & Associates, in their Report dated May 24, 2023; on the Financial Statements of the Company for Financial Year 2022-23.

The Statutory Auditors of the Company have not reported any fraud under Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment for the time being in force).

SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of The Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014; the Board of Directors had appointed Ms. Kala Agarwal, Practicing Company Secretary, to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2023. The Secretarial Audit Report is annexed as “Annexure IV”.

COST AUDIT REPORT:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014; your Company with reference to its Pharma business is required to maintain the cost records as specified under Section 148 of the Companies Act, 2013 and the said cost records are also required to be audited by the Practising Cost Accountants. Your Company is maintaining all the cost records referred above.

The Board, on the recommendation of the Audit Committee, had appointed M/s. Joshi Apte & Associates, Practising Cost Accountants (Firm Registration No. 00240), as the Cost Auditors of the Company for conducting the audit of cost records made and maintained by the Company for the Financial Year 2022-23.

SEGMENT

The Company operates only in a single segment i.e. Pharmaceutical Segment.

DEPOSITS:

During the year under review, the Company has not accepted deposits covered under Sections 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. Accordingly, the Company has made necessary disclosures and reporting as required in respect of details relating to deposits.

CORPORATE GOVERNANCE REPORT:

As per Regulation 34(3) read with Schedule V of the Listing Regulations, your Company has complied with the requirements of corporate governance. A Corporate Governance Report along with Certificate from Practicing Company Secretary confirming compliance of corporate governance for the year ended March 31,2023 is provided separately and forms integral part of this Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

The Management Discussion and Analysis for the year under review, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as “Annexure V” tto this Report.

ANNUAL RETURN:

Pursuant to the provisions of Sections 134(3)(a) and 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return as on March 31, 2023, is placed on the website of the Company at www.fredungroup.com

SECRETARIAL STANDARDS:

The company has complied with all the mandatorily applicable Secretarial Standards issued by the Institute of Company Secretaries of India under Section 118(10) of the Companies Act, 2013.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

Pursuant to Section 186 of the Companies Act, 2013 disclosure on particulars relating to Loans, Advances, Guarantees and Investments are provided as part of the financial statements.

BUSINESS RISK MANAGEMENT:

The Company is exposed to inherent uncertainties owing to the sector in which it operates. A key factor in determining the Company''s capacity to create sustainable value is the ability and willingness of the Company to take risks and manage them effectively and efficiently. Many types of risks exist in the Company''s operating environment and emerge on a regular basis due to many factors such as changes in regulatory framework, economic fundamentals etc. In order to evaluate, identify and mitigate these business risks, the Company has a robust Risk Management framework.

This framework seeks to create transparency, ensure effective risk mitigation process and thereby minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The Business risks as identified are reviewed and a detailed action plan to mitigate the identified risks is drawn up and its implementation is monitored. The key risks and mitigation actions are placed before the Audit Committee of the Company.

COMPLIANCE WITH PROVISIONS OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL), 2013:

The Company is committed to uphold and maintain the dignity of Women Employees. An Internal Complaints Committee has been formed for each location of the Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has a broad and comprehensive policy in place to deal with any such situation. The Policy is available on the website of the Company at www.fredungroup.com. No case of Sexual harassment was reported to the Internal Complaints Committee during the year under review.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Your Company has heavily invested into the latest machineries for both the manufacturing and packing departments; hence it is imperative to take care of the internal systems and work culture. The Company is continuously complying as per the Pollution Regulation Control Board of Maharashtra.

The Company also conducts in-house energy audits at regular intervals with proper monitoring and maintenance of all the machines. Conservation of energy in all the departments is an on- going process which requires a proactive compliance. It is a must to have a high performing and competent Quality Control and Quality Assurance team which monitors the compliance of all the regulatory aspects of manufacturing.

Special emphasis is given on improving the manufacturing processes which will help in reducing manufacturing time, manpower and electricity consumption. Additional conveyor belts are installed to transfer the finished goods from manufacturing departments to BSR and also from BSR to the container loading bay. This has helped in reducing time, money and energy to a great extent. The newly installed automatic equipment and instruments will give higher output with less manpower and increase the productivity of the Company.

The other Integrated Systems with proper data storage gives consistent performance and lowers the cost of production. The continuous monitoring is done of existing compressors, boilers electrical heaters, pumps etc. for enhancing energy efficiency.

For the treatment of waste water, your Company has installed a bigger ETP plant which controls water pollution. The treated water is used for gardening and a green environment is well maintained and no waste water is allowed to run outside the manufacturing unit. The waste sludge is regularly monitored by MPCB Department.

With a full-fledged R&D Department, your Company has developed and launched many new molecules like antihypertensive, antidiabetic, ARVs and even narcotics. These molecules are either under patent or still not universally manufactured on a large scale. Continuous efforts are made to improve the quality of the products in respect of better bioavailability and stability.

Two new walk-in stability chambers are also installed for monitoring the stability of the products. Continuous R&D is going on for established products also to reduce the cost of manufacturing and improve the quality and stability of the products. Your Company has also installed fully automatic purified water generation and distribution system to cater to newly started ointments, creams and gels manufacturing Department along with the Department for manufacturing pellets of various APIs complying as per cGMP norms.

Foreign Exchange earnings and outgo:
Foreign Exchange Earnings:	Export of Goods- 6203.09 Lacs
Foreign Exchange Outgo:	Import of Goods- 52.66 Lacs

As per RBI Guidelines, the Company manages Foreign Exchange Risk to protect value of exposures. From time to time the Board reviews the Foreign Exchange Exposure.

PARTICULARS OF EMPLOYEES:

None of the employees of the Company fall under the limits laid down in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The details in terms of sub - section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this Report as “Annexure VI”.

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:

Your Company maintains adequate internal control system and procedures commensurate with its size and nature of operations. The internal control systems are designed to provide a reasonable assurance over reliability in financial reporting, ensure appropriate authorization of transactions, safeguarding the assets of the Company and prevent misuse/ losses and legal compliances.

DETAILS OF SIGNIFICANT MATERIAL ORDERS:

No significant and material orders were passed by the Regulatory Authorities or the Courts or Tribunals that may have an impact on the "Going Concern Status" and Company''s Operations in the future.

DETAILS OF FRAUD:

There was no fraud reported by the Auditors of the Company under Section 143 (12) of the Companies Act, 2013, to the Audit Committee or the Board of Directors during the year under review.

PREVENTION OF INSIDER TRADING:

Your Company has adopted a Code of Conduct for prevention of Insider Trading and Code of Fair Disclosure of Unpublished Price Sensitive Information to ensure prevention of Insider Trading in the Organization.

CHANGE IN THE NATURE OF BUSINESS:

There is no material change in the type of business the Company is carrying.

MATERIAL CHANGES AND COMMITMENTS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:

There were no other reportable material changes or commitment, occurred between the end of the Financial Year and the date of this report, which may have any effect on the financial position of the Company.

TRAINING AND HUMAN RESOURCE MANAGEMENT:

Your Company is working strategically to recruit, develop and utilize people - Our most valuable business resource. Your Company is actively pursuing policies for the strategic and well-planned recruitment, development and utilization of human resources who can understand and practice the Company''s Management Principles and Activity Guidelines in order to contribute broadly to society and continue creating new values. Effective recruitment, development and the utilization of globally competitive human resources are the most important issues for your Company to survive the current ever-changing business environment and achieve sustainable growth. Our concern is to ensure that each of our employees exercise their full potential in line with the business strategy of their respective departments.

PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016:

During the year there was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016.

DISCLOSURES WITH RESPECT TO SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT:
Sr. No.	Particulars	Status
1	Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year i.e. as on April 1,2022.	4000
2	Number of shareholders who approached issuer for transfer of shares from suspense account during the year 2022-23	NA
3	Number of shareholders to whom shares were transferred from suspense account during the year 2022-23	NA
4	Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year i.e March 31,2023	4000

The voting rights of the shareholders of the above shares shall remain frozen till the rightful owner claims the shares.

ACKNOWLEDGEMENT:

The Directors express their deep gratitude and thank the Central and State Governments as well as their respective Departments and Development Authorities connected with the business of the Company, Contractors and Consultants and also Banks, Financial Institutions, Debenture Trustees, Shareholders, Debenture-Holders and Employees of the Company for their continued support and encouragement and look forward for the same in future.

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Mar 31, 2018

Dear Members,

The Directors are pleased to present the 31 st Annual Report of your Company with the Audited Accounts for the year ended March 31.2018.

1. Financial Results

(Rs. In Lakhs)

Particulars	For the financial year ended 31.03.2018	For the financial year ended 31.03.2017
Income from Business Operations	5,806.73	5,669.62
Other Income	164.35	191.38
Total Income	6,971.08	6.861.00
Profit / Loss before Interest, Depreciation and Taxes	586.42	526.05
Finance Cost	193.75	187.48
Depreciation / Amortization	128.50	113.58
Profit/Loss Before tax	264.17	224.99
Exceptional Income / Expenses	-	-
Prior Period adjustments	00	2.39
Profit / Loss before Tax	264.17	222.59
Income Tax	89.08	79.85
Profit/ Loss after Tax	175.09	142.74

2. Financial Performance:

Your Company earned a total income of Rs. 5,971.08 lakhs compared to the income of Rs. 5,861 lakhs for the previous year and the net profit of Rs. 175.09 lakhs compared to the net profit of Rs 142.74 lakhs for the previous year i.e.. there was 22.66 % hike in the income of the Company.

The turnover of the Company has increased as compared to the previous year on account of increase in business activities and addition of high speed tableting machines and blister packing machines.

The aggressive steps taken by your Directors to modernize the Infrastructure of the manufacturing unit at Palghar with the modern ona updated machinery has substantial increased the existing manufacturing capacity. The addition of two different departments to manufacture ointments, creams, gels and pellets of different APIs are nearing completion. This “Business Assessment’ will define the scale of success in the near future. The focus of the Mandgement is to maintain a balance between the changing customer needs / want of customers with the increase in the profits and wealth maximization of the Company.

3. State of Affairs of the Company:

Fredun Pharmaceuticals Limited is one of the Pharmaceuticals Finished Products Manufacturing Company in India, with an increasing global presence, catering to more than 20 countries globally, mainly to Sri Lanka, Malaysia, Uganda, Philippines. Kenya, Tanzania, Nigeria, Combodia, Myanmar, Mozambique. The Company is committed to increase its productivity and profits.

4. Dividend:

The Board of Directors have recommended a Dividend of 6 % on the ordinary Equity Shares of the Company payable to those shareholders of the Company whose names appear in the Register of Members as on the Book Closure date.

5. Share Capital:

The paid-up Share Capital of the Company as on March 31, 2017 was Rs. 4,85,24,000 consisting of 23,52,400 Equity Shares of Rs. 10 each and 2,50,000 Preference Shares of Rs. 100/- each. The Equity Shares of the Company are listed on the BSE Limited since March 21, 2016.

During the F.Y. ended on March 31, 2018; there was an increase in the Capital structure of the Company. The Company had issued 5.72,735 Equity Shares of Rs. 10/- each under the Preferential Guidelines of Securities and Exchange 8oard of indta (Issue of Capital and Disclosure Requirements) Regulations, 2009 at Rs. 150/- each Including premium ol Rs. 140/-each to the Eligible Investors. The details of the Issue is available on the website of the Company via the EGM notice dated July 7, 2018 read with the Postal Ballot notice dated September 22,2018.

Further, your Company had issued 4.99,999 Equity Shares of Rs. 10/- each under the Preferential Guidelines of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 at Rs. 150/- each including premium of Rs. 140/-each to the Eligible Investors 8; Promoters. The details of the Issue is available on the website of the Company via the Postal Ballot notice dated September 22,2018.

Apart from this, considering the Business expansion and requirements of funds the Company had further proposed to issue 6,20,000 Equity Shares of Rs. 10/- each under the Preferential Guidelines of Securities and Exchange Board of India (issue of Capital and Disclosure Requirements) Regulations, 2009 at Rs. 225/- each including premium of Rs. 215/- each to the Eligible investors. Promoters and Directors of the Company. The details of the Issue is available on the website of the Company via the Postal Ballot notice dated May 24,2018.

6. Transfer to Reserves:

The Company proposes to transfer an amount of Rs. 1,871.54 Lakhs to reserves for its future growth and diversification.

7. Foreign Exchange Earnings and Outgo:

Foreign Exchange Earnings: Export of Goods-Rs. 2.311.22/-Lakhs Foreign Exchange Outgo: - Rs. 197,53/- Lakhs

In compliance with the Reserve Bank of India guidelines, the Company proactively mandges Foreign Exchange Risk to protect value of exposures. If any, with an objective to mandge financial statement volatility. Current, the Company has in place appropriate risk hedging strategy for its Imports and Exports. Foreign Exchange exposures are periodically reviewed and if necessary, hedged while avoiding trading and speculative positions. The Board periodically reviews Foreign Exchange Exposure, if any and hedges are undertaken by the Company.

8. Board Meetings and Committee Meetings:

- Twelve (12) Board meetings were held during the year. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report annexed herewith.

- Four (4) Audit Committee Meetings were heid during the year. The details of the Audit Committee Meetings and the attendance of the Directors are provided In the Corporate Governance Report annexed herewith.

- One (1) Nomination & Remuneration Committee Meeting was held during the year. The details of the Committee Meeting and the attendance of the Directors are provided in the Corporate Governance Report annexed herewith.

- One (I) Independent Directors’ Committee Meeting was held during the year. The details of the Committee Meeting and the attendance of the Directors are provided in the Corporate Governance Report annexed herewith.

- One (1) Stakeholders Relationship Committee Meeting was held during the year. The details of the Committee Meeting and the attendance of the Directors are provided in the Corporate Governance Report annexed herewith.

9. Directors and Key Mandgerial Personnel:

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees.

10. Director Retiring by Rotation:

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Dr. (Mrs.) Daulat Medhora (DIN: 01745277) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered herself for re-appointment. Her re-appointment is being placed for your approval at the ensuing Annual General Meeting. The Members of the Company may refer to the accompanying Notice of the Annual General Meeting of the Company, for the brief Resume of Dr. (Mrs.) Daulat Medhora.

11. Declaration by Independent Directors:

The Company had received declaration from all the independent Directors under Section 149(7) of the Companies Act 2013 in the first Board Meeting of the Financial Year 2018-19 held on May 24, 2018: stating that they meet the criteria of Independence as laid down in Section 149(6) of the Act.

12. Annual Evaluation of Board Performance and Performance of its Committees and of Individual Directors:

Pursuant to the provisions of the Act the Board of Directors hod carried out an Annual Evaluation of its own performance. Board Committees and Individual Directors.

The performance of the Board was evaluated after seeking inputs from all the Directors on the basis of criteria such as the Board Composition and structure effectiveness of Board process, participation in the long-term strategic planning, information, functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the Composition of Committees, effectiveness of Committee meetings, etc.

The Board reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the Individual Director to the Boara and Committee Meetings, preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairperson was also evaluated on the key aspects of her role by other Board members.

A separate meeting of Independent Directors was convened In the month of June 2017, to discuss the following aspects:

i. Review the performance of Non- Independent Directors and the Board as a whole;

li. Review the performance of the Chairperson of the Company, taking into account the views of Executive and Non-Executive Directors.

ii. Assess the quality, quantity and timeliness of flow of information between the Company’s Mandgement and the Board that is necessary for the Board to effectively and reasonably perform their duties.

All Independent Directors were present at the Meeting and discussed the above and expressed their satisfaction.

13. Directors’ Responsibility Statement:

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

l. In the preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departures;

ii. Appropriate accounting policies have been selected and applied consistent 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 at the end of the financial year and of the Profit of the Company for that period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Annual Accounts had been prepared on o going concern basis,

v. the Infernal Financial Controls had been laid down, to be followed by the Company and the such internal financial controls ore adequate and were operating effectively; and

vi. In order to ensure compliance with the provisions of all applicable laws, proper systems has been devised and that such systems were adequate and operating effectively.

14. Particulars of Employees:

None of the employees of the Company fall under the limits laid down in Rule 5(2) of fhe Companies (Appointment and Remuneration of Mandgerial Personnel) Rules, 2014.

15. Extract of Annual Return:

Pursuant to the provisions of Section 92 of the Act read with Rule 12 of the Companies (Mandgement and Administration) Rules, 2014; the extracts of Annual Return in Form MGT-9 is annexed as Annexure A to this Report.

16. Training and Human Resource Mandgement:

For ony organisation, the biggest challenge s maintaining consistency in performance of their star performers. Most of the Companies focus on retaining the star performers. Your Company continues to put concerted efforts in recruiting quality people, who align with the culture of the organization. Development and training programs are undertaken regularly, so that they can become potential successors of their seniors. Morale of our employees continued to be high. Focus is also being given to areas like employees’ growth and satisfaction along with employees’ relations during the year. The relationship between mandgement and employees continues to be one of mutual respect, appreciation and cordial.

17. Subsidiary Company. Associate Company and Joint Venture Company:

Your Company does not have any Subsidiaries or Associates or Joint Venture Companies.

18. Deposits:

Your Company has not accepted any deposits from public.

19. Particulars of Loans, Guarantees and Investments:

During the year, your Company has not given any new loans or made any Investments and has not provided any Guarantees except those which are already mentioned in the audited accounts of the Company.

20. Statutory Auditors:

M/s. Savla & Associates. Chartered Accountants, Statutory Auditors of the Company retire at the conclusion of the 31 st Annual General Meeting. Being eligible for re-appointment have offered themselves for re-appointment for another fresh term period.

The Board places on record its deep appreciation of the valuable contributions made by M/s. Savla & Associates, Statutory Auditors of the Company and been satisfied with the services have proposed to re-appoint them as the Statutory Auditors of the Company for another fresh term period.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Savla & Associates, in their Report dated June 18, 2018: on the Financial Statements of the Company for F.Y. 2017-18.

M/s. Savla & Associates has given a written consent to the Company for the re-appcxntment as the Statutory Auditors. M/s. Savla & Associates has also given a certificate that they satisfy the criteria prescribed in Section 141 of the Companies Act. 2013 and their re-appointment, if made, shall be in accordance with the conditions laid down under the Act and Rules.

In accordance with the provisions of Section 139 (2) of the Companies Act. 2013 which provides for rotation of Auditors and considering the certificate as provided by M/s. Savla & Associates under Section 141 of the Companies Act. 2013: the Audit Committee and the Board at their respective meetings, have unanimously recommended to the Shareholders appointment of M/s. Savla & Associates, Chartered Accountants (Firm Registration Number -109361W) as the Statutory Auditors of the Company to hold office for next 5 (five) consecutive years from the conclusion of the 31st Annual General Meeting scheduled to be heid on Thursday, September 27. 2018 till the conclusion of the 36th Annual General Meeting to be held In the year 2023.

21. Particulars of Contracts or Arrangements with Related Parties:

There were r>o material^ significant related party transactions made by the Company during the year that would fall under the scope of Section 188 of the Companies Act. 2013. Disclosure in form AOC-2 in terms of Section 134(3)(h) of the Companies Act, 2013 is annexed as Annexure B’.

The policy on materiality of information / documents and dealing with it is been approved by the Board and the same is also available on the website of the Company at www.fredungroup.com

22. Secretarial Audit Report:

Pursuant to the provisions of Section 204 ot the Act and the Companies (Appointment and Remuneration of Mandgerial Personnel) Rules, 2014; the Board of Directors had appointed M/s. Rajendra and Co.. Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the F.Y. ended March 31, 2018. The Secretarial Audit Report is annexed as ‘Annexure C’.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Rajenara and Co.. Practicing Company Secretaries, In their Secretarial Audit Report dated June 16.2018 on the Secretarial and other related records of the Company for F.Y. 2017-18.

23. Cost Audit Report:

The Cost Auditors are in the process of completing the Cost Audit for the Financial Year 2017-18 and it will be completed before the due date.

24. Details of Significant Material Orders:

No significant and material orders were passed by the Regulatory Authorities or the Courts or Tribunals that may have an impact on the going concern status and Company’s Operations in foreseeable future.

25. Internal financial control system and their adequacy:

Company has established Internal Financial Control over financial reporting in current financial year 2017-18.

26. Corporate Social Responsibility:

Your Company does not fall under the criteria of Corporate Social Responsibility as laid down under Section 135 of the Companies Act. 2013.

27. Vigil Mechanism /Whistle Blower Policy:

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Dilectors, employee’s and its stakeholders to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company s Code of Conduct or Ethics Policy. The policy provides for adequate safeguards against victimization of employees who avail the mechanism and also provides for direct access to the Chairman of the Audit Committee.

28. Conservation of Energy. Technology, Absorption:

The Company is continuously complying with the Pollution Control Regulations as are applicable m the state of Maharashtra.

Unlike other Industries where R & D investment is a small portion of the total sales, it approaches about 10-20% in the Pharma Industry and hence the Industry has to pay an enormous sum for a new drug patent. To make such innovator products available to the poor, generic drugs are allowed to be manufactured and marketed where the innovators patent is not applicable. Your Company has set up a complete R & D Department to develop such new formulations with proper process and andlytical method validations. A consistent attempt is made to improve the existing manufacturing processes and economise the cost of production.

As regulatory standards in APIs Increase, techniques to achieve solubilisation of sparmgty soluble drugs is a top priority for the drug manufacturer. Technologies that offer functional solutions to improve bioavailability, productivity and controlled release formulations will be in demand. Your Company is now working on solutions to improve the bioavailability, maintain solid stable dispersions and inhibit APIs crystallizations of insoluble APIs. Emphasis is also put on delivery options to facilitate controlled release tablets to optimize performance of the medicines.

Your Company has been successful in exporting recentty out of patent costly molecules as their generic versions. Since the opportunities are huge, your Company is in the process of registering such more pharmaceutical formulations and increase the exports. Companies with vision, values and focus will only succeed and hence the mandgement has decided to spend more on R&D with strong commitment and Mil to achieve this goal.

The Company also conducts In- House Energy Audit at regular intervals with proper monitoring and maintenance of all the machines.

29. Compliance with provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company is committed to uphold and maintain the dignity of Women Employees and an Internal Complaints Committee has been formed for each location of the Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act. 2013.

No case of Sexual harassment was reported to the Internal Complaints Committee during the year under review.

30. Particulars of Directors / Key Mandgerial Personnel / Employees:

Details pertaining to remuneration as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Mandgerial Personnel) Rules. 2014; the details of remuneration of Directors. Key Mandgerial Personnel and the employees and the percentile change in the remuneration; as required under the Rules are furnished hereunder.

The Company’s policy on Directors’ appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of this report.

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the Financial Year 2017-18:

Name	Designation	Total Remuneration (in Rs.)	Ratio of Remuneration of Director to the Median Re -muneration of Employees
Dr. (Mrs.) Daulat Med hora	Chairperson & Jt. Mandging Director	12,00,000	5.27:1
Mr. Fredun Medhora	Mandging Director	24.00,000	10.54:1
Mr Nariman Medhora	Executive Director	13.20,000	5 80:1

The Independent - Non-Executive Directors of the Company are only getting sitting fees.

(ii) The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary in the Financial Year 2017-18:

Name	Designation	Total Remuneration (in Rs.)	% increase! (decrease) in remuneration in the Financial Year
Dr. (Mrs.) Daulat Medhora	Chairperson & Jt Mandging Director	12,00.000	NIL
Mr. Fredun Medhora	Mandging Director	24.00.000	NIL
Mr. Nariman Medhora	Executive Director	13.20.000	NIL

The Independent - Non-Executive Directors of the Company are only getting sitting fees.

(iii) The percentage increase in the median remuneration of employees in the Financial Year:

The percentage increase in the median remuneration ot employees in the Financial Year 2017-18is24%

Explandtion: For calculation ot median remuneration, the employee count taken for the Financial Year 201 7-18 and 2016-17. comprise employees (excluding workmen) who have served for the whole of the respective Financial Years.

(iv)The number of Permanent Employees on the rolls of the Company:

There were 174 permanent employees as on March 31.2018. (inclusive of workmen)

(v) Average percentile increase already made in the salaries of the employees other than the Mandgerial Personnel in the last financial year and its comparison with the percentile increase in the mandgerial remuneration and justification thereof and point out if there any exceptional circumstances for increase in the mandgerial remuneration:

Average Percentile Increase for other than mandgerial personnel: 20.39 Average Percentile Increase for Mandgerial Personnel: NIL

The average increase in the salaries of employees excluding Mandgerial Personnel during Financial Year 201 7-18 was 20.39%. The increase in the remuneration of employees was based on Company’s Performance and their Individual Performance.

(vi) Affirmation that the remuneration is as per the remuneration policy of the Company:

It is affirmed that the remuneration paid during the period under review is as per the remuneration policy of the Company.

31. Acknowledgement:

The 8oard of Directors place on record their sincere thanks to its bankers, business associates, consultant, and various Government Authorities for their continued support extended to your Company during the year under review. The Directors gratefully acknowledge the support and confidence reposed by the shareholders of the Company.

By Order of the Board

For Fredun Pharmaceuticals Limited

Sd-

Dr. (Mrs.) Daulat Medhora

Place: Mumbai DIN: 01745277

Date: June 18, 2018 (Chairperson cum Jt. Mandging Director)

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Mar 31, 2015

The Directors are pleased to present the Twenty Eighth Annual Report of your Company with the Audited Accounts for the year ended March 31, 2015.

FINANCIAL RESULTS

FINANCIAL PERFORMANCE AND FUTURE PROSPECTS:

Amount in Rs,

March 51st 2015 March 51st 2014

Sales Income 253,575,494 212,847,624

Other Income 4,864,147 3,602,337

Total Income 258,439,641 216,449,961

Profit/Loss before Interest & Depreciation 214,23,056 179,02,682

Finance Cost 10,477,908 8,106,593

Depreciation / Amortization 5,463,802 5,256,233

Profit/Loss before taxes 5,481,546 4,539,856

Exceptional Income/Expenses (2,89,724) -

Prior Period items (500) -

Profit/Loss before Taxes 5,191,122 4,539,856

Income Tax 2,634,137 2,117,720

Profit/Loss after Taxes 2,556,985 2,422,136

Your Company posted a total income of Rs. 258,439,642/- compared to the income of Rs. 216, 449,961/- for the previous year and the net profit of Rs.2,556,985/-compared to the net profit of Rs. 2,422,136/- for the previous year. The Turnover of the Company has increased as compared to the previous year on account of increase in the business activities; however the net profit for the year increased only marginally compared to that of the previous year on account of additional expenses incurred for the expansion of the current manufacturing facilities at Palghar. Your Directors are taking aggressive steps to increase the business activities of the Company and they are sure, that the Company will be able to show better results in the current year.

BUSINESS ACTIVITIES:

Your Directors are now focusing on increasing the production as the expansion of the current manufacturing facilities of the Palghar unit is nearing completion. Three new granulation departments have been added to the existing two departments. This will substantially increase the production and profits of your Company. A new Q.C laboratory has been set up as per the WHO CGMP norms. This will help the process of strengthening the compliance and regulatory systems.

Since a lot of drugs are going to go off-patent in the coming years; Indian pharmaceutical companies are well positioned to get the benefits of the same. Your Company has also the capability and technological expertise to manufacture products of quality and reliability.

DIVIDEND

To conserve the funds your directors do not recommend any dividend for the year ended March 31 2015.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars required to be stated as per the provisions of Section 134(3) (m) of The Companies Act, 2013 relating to conservation of energy and technology absorption is provided as under:

ENVIRONMENT PROTECTION

The Company has been complying with the requirements of the Pollution Control Regulations- in the State of Maharashtra.

CONSERVATION OF ENERGY

The Company conducts In-House energy audit at regular intervals with proper monitoring and maintenance of all the machineries. Low energy lighting and high efficiency meters have been installed to yield significant investment benefits and additional savings.

TECHNOLOGY ABSORPTION & RESEARCH AND DEVELOPMENT

A patented drug is the result of research and innovation and a generic drug is only a continuance of the same at a low price. World Health Organization (WHO) defines a generic drug as "pharmaceutical product, usually intended to be interchangeable with an innovator product that is manufactured without a license from the innovator Company and marketed after the expiry date of the patent or other exclusive rights". Our Company has set up a complete R & D Department to develop new formulations with proper process and analytical method validations. Improvements in existing manufacturing processes are continuously carried out to economize the cost of production and improve the quality of the formulation.

FOREIGN EXCHANGE EARNINS AND OUTGO:

Foreign Exchange Earnings:

Export of Goods - Rs. 1618.01 lakhs

Foreign Exchange Outgo: - Rs. 123.35 Sakhs

DEPOSITORY SYSTEM:

Details of the Depository System are given in the section ''Additional Information'' which forms a part of the Corporate Governance Report and is attached with the Annual Accounts.

DIRECTORS:

Mr. Fredun Medhora was originally appointed as the Whole Time Director of the Company up to 31 March 2015 and he was subsequently appointed as the Managing Director of the Company for the period of three years.

Mr. Nariman Medhora the Managing Director of the Company had resigned from the Board with effect from 15th October 2014

Dr. Rohinton Kaga and Mr. Nariman Medhora were appointed as the Independent Director and Executive Director respectively on 05th May 2015 and their appointments will be subject to the approval of the members at the Ensuing Annual General Meeting

All the Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149 (6) of the Act and Clause 49 of the Listing Agreement entered into with the Stock Exchanges. In the opinion of the Board, they fulfill the conditions of Independence as specified in the Act and the Rules framed there under and are independent of the management.

ANNUAL EVALUATION OF BOARD PERFORM ANCE AND PERFORMANCE OF COMMITTEES AND OF INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreements, the Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure effectiveness of Board process, participation in the long-term strategic planning, information, functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of committees, effectiveness of Committee meetings, etc

The Board reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the Individual Director to the Board and committee meetings, preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

TRAINSNG AND HUMAN RESOURCE MANAGEMENT:

Morale of our professionals continued to be high. The Company continued to put concerted efforts in recruiting quality people .Development programs and ''Train the Trainer'' programs were other key focus areas during the year. The relationship between management and employees is without any dispute and cordial.

AUDITORS

The Auditors M/s. Savla & Associates Mumbai Chartered Accountants (ICAI Registration No.: 109361W) hold the office until the conclusion of the ensuing Annual General Meeting and they are eligible for reappointment as the Auditors. Members are requested to consider their re-appointment and to fix their remuneration for the year ending on 31 March 2016. Their appointment will be as per the provisions of Section 139 of The Companies Act, 2013

The Company has received a confirmation from M/S. Savla & Associates to the effect that their appointment, if made, will comply with the eligibility criteria in terms of Section 141 (3) of The Companies Act, 2013.

SECRETARIAL AUDIT

In terms of Section 204 of the Act and Rules made there under, Mr. Rajendra Vaze of M/s. Rajendra And Co Practicing Company Secretaries, have been appointed as Secretarial Auditors of the Company. The report of the Secretariat Auditors is annexed as Annexure I to this Report. The report is self-explanatory and does not call for any further comments.

DETAILS OF SIGNIFICANT MATERIAL ORDERS

No significant and material orders were passed by the regulators or the courts or tribunals impacting the going concern status and Company''s operations in future

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92(3) of the Act and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return in Form MGT 9 is annexed as Annexure II to this Report

DIRECTOR''S RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, and Secretarial Auditors and External consultant(s) and the reviews performed by management and the relevant Board committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2014-15

Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(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 at the end of the financial year and of the profit of the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act 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 internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company has not given any loans or any guarantee and has not done any Investments during the year.

RELATED PARTY TRANSACTIONS

All related party transactions entered into during the financial year were on an arm''s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Agreement. The details of the transactions with related parties are provided in the accompanying financial statements.

There were no materially significant related party transactions made by the Company during the year that would have required members approval under Clause 49 of the Listing Agreement. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board has been adopted by the Company and uploaded

The details of the transactions with related parties are provided in the accompanying financial statements.

VIGIL MECHANISM/ WHISTLEBLOWER POLICY

The Company has adopted a Whistleblower Policy, to provide a formal mechanism to the Directors, employees and its stakeholders to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or Ethics Policy. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee

MANAGEMENT DISCUSSION AND ANALYSIS AND REPORT OF THE DIRECTORS ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, the Management Discussion and Analysis and the Corporate Governance Report, as required under Clause 49 of the Listing Agreement, is presented in a separate section forming part of the Annual Report.

ACKNOWLEDGMENTS :

The Company would like to acknowledge all its stakeholders, Shainrao Vithal Co-operative Bank Ltd and its customers, key partners for their support and all its employees for their dedication and hard work.

The Directors appreciate the continued guidance received from various Regulatory Authorities including RBI, SEBI, Ministry of Corporate Affairs, The Registrar of Companies, The Stock Exchange, Mumbai, Excise Authorities, Income Tax and Sales Tax Authorities,

On Behalf of the Board of Directors

Dr. (Mrs.) D. M. Medhora

Chairperson

Place: Mumbai

Date : 30th May 2015