FDC Ltd Directors Report.

To,

The Members

Your Directors have pleasure in presenting the 78 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 years figures have been re-grouped/reclassified, wherever necessary to conform to this years 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 Companys 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. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The management of FDC Limited presents the analysis of division-wise performance of the Company for the financial year ended March 31, 2018 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.

A. Economic Overview:

The Growth in India is projected to increase from 6.7% in 2017 to 7.4% in 2018 and 7.8% in 2019, lifted by strong private consumption as well as fading transitory effects of the currency exchange initiative and implementation of the national goods and services tax. Over the medium term, growth is expected to gradually rise with continued implementation of structural reforms that raise productivity and incentivize private investment. (Source: World Economic Outlook- IMF April, 2018)

India has made progress on structural reforms in the recent past, including through the implementation of the goods and services tax, which will help reduce internal barriers to trade, increase efficiency, and improve tax compliance.

B. Industry structure and developments:

As per the AIOCD AWACS report, the Indian pharma market grew by 9.5% in March 2018. The total sales reported were Rs 10,029 Cr in March 2018. By 2020, India is likely to be among the top three pharmaceutical marketsby incremental growth and 6 largest market globally in absolute size.

The Indian Pharma Industry by end of March18 (Mat Mar18) touched Rs. 119,386 Crs with a growth of 5.7%. (Source : AIOCD AWACS Data Mat Mar18).

Your Company is nearly in line (5.4%) with the Industry growth .

Growth is majorly driven by volumes (3.9%) followed by New products (2.6%) while prices continued to remain soft (-0.8%) mainly due to the pricing caps on the National List of Essential Medicines (NLEM) list drug.

Indian pharma companies are capitalising on export opportunities in regulated and semi-regulated markets. In Financial Year 2017, India exported pharmaceutical products worth US$ 16.8 billion, with the number expected to reach US$ 40 billion by 2020. During April, 2017 February, 2018, India exported pharmaceutical products worth Rs. 767.17 Billion (US$ 11.90 Billion).

Indian drugs are exported to more than 200 countries in the world, with the US as the key market. India is the worlds largest provider of generic medicines; the countrys generic drugs account for 20 per cent of global generic drug exports (in terms of volumes).

C. Opportunities in healthcare.

The volumes of pharma trade could possibly keep growing due to Indias high disease burden, increasingly better access to healthcare (and hence better diagnosis rates) and greater affordability.

Increase in the size of middle class households coupled with the improvement in medical infrastructure and increase in the penetration of health insurance in the country will also influence in the growth of pharmaceuticals sector. The Ayushman Bharat is National Health Protection Scheme which is aiming to extend health insurance coverage of up to Rs. 5 Lakh per family per annum to cover the vulnerable and underprivileged sections of the society.

Another focus of pharma companies in the coming year, to grow faster and profitably, would be on increased R&D spend, but targeted spends on speciality drugs, niche molecules and complex therapies such as injectables, inhalers, controlled-release substances and biosimilars.

D. Outlook & Risks and concerns.

The Pharmaceutical Industry is facing various challenges. It is rapidly changing on the regulatory, R&D, people, technology fronts. Companies face numerous challenges such as Meeting Government policies and compliance, Increasing costs, Supply chain issues. The draft pharma policy 2017, Pricing Controls by DPCO and Uniform Code of Pharmaceuticals Marketing Practices (UCPMP) are few of the major challenges before the Industry for compliance.

Your Company has been complying and adopting various changes from time to time.

E. Financial performance and Operations review

During the year under review, your Company registered a standalone total income of Rs. 1,12,145.98 Lakhs as against Rs. 1,09,566.85 Lakhs in the previous year, thereby registering a growth of 2.35%.

The Earnings before interest and depreciation amounted to Rs. 27,034.86 Lakhs as against Rs. 28,571.39 Lakhs in the previous year. The net Profit after taxation stood at Rs. 16,831.41 Lakhs as against Rs. 18,706.74 Lakhs in the previous year.

During the year under review, your Company registered a consolidated total income of Rs. 113,405.02 Lakhs as against Rs. 110,120.14 Lakhs in the previous year, thereby registering a growth of 2.98 %.

F. Segment wise or product-wise performance

(i). Marketing

The Chronic therapies continue to grow in double digit growths viz. Cardiac, Anti Diabetes. However, the largest therapy in terms of value i.e. Anti-infectives has stagnated in terms of growths. The Gastro Intestine therapy off late has slowed down in growths and Derma continues to remain buoyant.

Your company has shifted to alternative formulae forbrands falling under DCGI Ban.

Further the company has selectively launched thefollowing molecules:-

Itraconazole ( Oral Antifungal ) Brand Zitran Luliconazole ( Topical Antifungal ) Brand Zocon L Apremilast ( Psoriatic arthritis ) Brand Aprotyl Cranberry extract + D Mannose ( UTI infections ) - Brand AV UTI

(ii). Research and Development

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

Formulations

The R & D Formulation team at FDC comprises of dedicated scientists engaged in focused research for the development of finished dosage forms. The team has been designing strategies to develop quality products at affordable prices. The group is committed to develop and has successfully introduced products employing newer technologies at the commercial scale. Also in the foray and designing, challenging complex generics for the regulated markets of US. Exhibit batches of ophthalmic products have been manufactured for registration in the US and UK. Several ophthalmic and solid oral products are in various stages of development for the US and UK markets.

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, Anti diabetic, Antihistaminic, Bronchodilator and New Chemical entity (NCE). The work on life cycle management of existing drug Substances 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 Non infringing processes, Usage of environment friendly chemicals, Green chemistry, Development of desired polymorphs, Usage of classical chemistry for development of chiral drugs, and to minimise effluents etc.

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, Omega3 and Omega6 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, FDC 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 as well as under developed countries of export.

Biotechnology

a. G-CSF Project

Your Company has received the CDSCO Audit report on steps to be undertaken for grant of Non Objection certificate (NOC) to manufacture clinical grade material for human trials as required under Form 29. All the necessary documentation required is under preparation which includes SOPs, Qualification documents (DQ/IQ/OQ/PQ) of all equipment, area qualification studies, process validation study, etc. to comply with FDA/CDSCO norms. Accordingly we have set up a Quality unit at R & D Biotechnology and Quality Management System (QMS) implementation is underway.

b. Third Generation Thrombolyte Project

With reference to the Companys Project on the development of Third Generation Thrombolyte, your company has obtained a refolding and purification strategy from the external party. The same is being replicated at site to check for the feasibility of the technology prior to the technology transfer of the same.

c. Microbial Testing Lab

With reference to the Companys Project on the New Chemical entity, your Company has been successful in formulating the insoluble active molecule (TNF-04) for topical application and preliminary study is in progress for determining the efficacy of the molecule in animal model.

(iii). Exports

Your Companys annual export turnover for the financial year ended March 31, 2018 for Active Pharmaceutical Ingredients and Finished Formulations was Rs. 13,269.26 Lakhs as compared to Rs. 15,576.50 Lakhs for the financial year ended March 31, 2017.

Further, your Company continues to supply Active Pharmaceutical Ingredients and Finished Formulations to its esteemed customers, worldwide.

On the Active Pharmaceutical Ingredients business front, your Company has filed USDMF for Telmisartan and Cinnarizine and has received CEP Certifications for Dorzolamide Hydrochloride and Salbutamol Sulfate. Your Company was audited by EDQM and has received EU GMP Certification for the product BromhexineHydrochloride Active Pharmaceutical Ingredients.

On the finished formulations business front, the US and UK markets have been the main contributors to the export sales turnover supported by good contributions from African and South East Asian markets. The product portfolios of Ophthalmic and Oral Rehydration Salts have been the main contributors to the export sales in this financial year. Similarly for APIs, the main contributions to the export sales turnover have come from US and European markets.

Your Company is currently working on filing additional ANDAs in the US market to support the existing product basket of ophthalmic products. The company continues to export its Anti-Diarrhoeal product range to reputed international institutions worldwide & maintains its reputation of being one of their preferred suppliers for emergency supplies.

The annual sale of FDC International Ltd, a wholly owned subsidiary of FDC Limited, India for the financial year ended March 31, 2018 was GBP 26.19 Lakhs as compared to GBP 15.00 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, 2018 was ZAR 93.43 Lakhs as compared to ZAR 113.34 Lakhs of the previous financial year.

G. 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 Companys 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.

H. Human Resources

Your Company believes that the employees are the most valuable assets and key drivers of business success and sustained growth. The Company believes in quality process, systems and compliance. Our Human Resource policies and practices are well aligned to meet our business objectives.

Your Company operates in a highly competitive environment. The Human resources attracts and retains the best talent for its operations across all locations. The company encourages and provides the platform to the individual to excel in their professional and personal goals along with the focus on a healthy work life balance. Your Company has in place a variety of initiatives to engage its employees including fitness program.

Being future ready is one of the key processes for sustainable growth and Company is building synergy and cultural integration through coherent Leadership program for top leaders as a part of its core initiative. The Company has in-house Training and Development to help the sales team on products, scientific knowledge, selling techniques. The Company has also conducted various programs on Managerial effectiveness to improve the individual competencies and leadership abilities for sales leadership. Your Company understands the importance of newer training technique and would be migrating from class room training to an e-learning platform for its sales team in the next financial year. The web based training will provide self paced learning through interactive ways.

In line with the requirement of SEBI listing regulations, your company has adopted a " Code of Conduct and work ethics policy and Whistle Blower Policy". The police on Whistle Blower are uploaded on the companys website.

I. 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.

7. 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.

8. 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.

9. 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.

10. 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 theCompanies 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 subsidiarycompanies and joint venture.

11. 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.

12. 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 goingconcern 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 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.

14. 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.

15. 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.

16. 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 78 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 78 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.

17. 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.

18. 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.

19. 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.

20. 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.

21. MEETINGS OF THE BOARD AND COMMITTEES THEREOF

The information has been furnished in the Corporate

Governance Report.

22. 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.

23. 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.

24. 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

25. 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

26. 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

27. 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 Companys Code of Conduct for Prevention of Insider Trading.

28. RELATED PARTY TRANSACTIONS

During the year under review, all Related Party Transactions entered into by the Company were on an arms 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.

29. 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.

30. 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 Companys existing Research & Development Centre continues to remains at Jogeshwari, Mumbai.

31. AUDITORS AND AUDIT REPORTS

a. STATUTORY AUDITORS

Auditors 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 theMembers has been set out in the Item No. 04 ofNotice of the 78 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. SECRETARIAL AUDIT

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.

32. 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.

33. 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 Companys CSR activities is appended as Annexure H to this report.

34. EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92 of the CompaniesAct, 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.

35. 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 Companys 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.

36. 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.

37. 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.

38. 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

ANNEXURE A TO DIRECTORS REPORT

DIVIDEND DISTRIBUTION POLICY OF FDC LIMITED

Introduction:

FDC Limited ("the Company") has always been committed in rewarding its shareholders by distributing its Profits via Dividend.

As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy to regulate the process of dividend declaration and its payout by the Company.

The key objectives of this policy is to ensure a regular dividend income to the shareholders and a long term capital appreciation for all stakeholders of the Company. Further, the Company shall also ensure to maintain adequate amount of Profits for its various expansion or diversification or acquisition Projects.

The dividend distribution shall be in accordance with the applicable provisions of the Companies Act, 2013, Rules framed thereunder, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other legislations governing dividends and the Articles of Association of the Company, as in force and as amended from time to time.

The Company shall always endeavour to maintain fairness, consistency and sustainability, while distributing profits to the shareholders.

Category of Dividends:

Under the Companies Act, 2013 and the Rules made thereunder, Dividend has been classified as Interim and Final Dividend. The Board of Directors ("Board") have been entrusted with the powers to recommend a final dividend to the shareholders and the same shall be approved by the shareholders at the general meeting of the Company. Further, the Board also has the absolute power to declare an interim dividend, as and when appropriate, during the financial year, as and when they consider it fit.

Declaration of Dividend:

Subject to the provisions of the Companies Act, 2013 and the Rules made thereunder, the Dividend shall be declared or paid out of the following:

(i) Current financial years profit:

(a) after providing for depreciation in accordance with law; and

(b) after transferring to reserves such amount as may be prescribed or as may be otherwise considered appropriate by the Board at its discretion.

(ii) The profits for any previous financial year(s):

(a) after providing for depreciation in accordance with law; and

(b) remaining undistributed.

(iii) out of (i) & (ii) both

In computing the above, the Board may at its discretion, subject to the provisions of the applicable laws, exclude any or all of following:

a) extraordinary charges b) exceptional charges c) one off charges on account of changes in law or rules or accounting policies or accounting standards d) provisions or write offs on account of impairment in investments (long term or short term)

e) non cash charges pertaining to amortisation or resulting from change in accounting policies or accounting standards.

The Board may, at its discretion, declare a Special Dividend under certain circumstances, on account of extraordinary profits from sale of investments.

Factors to be considered while declaring Dividend:

The decision regarding dividend pay-out is a crucial decision as it determines the amount of profit to be distributed among shareholders and the amount of profit to be retained in the business, to be used for future expansion/ diversification plans.

The Dividend payout decision of the Company depends upon certain external and internal factors such as:

(i) External Factors: a) State of the Economy- in case of uncertain or recessionary economic and business conditions, the Board will endeavour to retain larger part of the profits to build up reserves to absorb future shocks. b) Capital Markets- when the markets are favorable, dividend pay-out can be liberal. However, in case of unfavorable market conditions, Board may resort to a conservative dividend pay-out in order to conserve cash outflflows. c) Statutory Restrictions- The Board will keep in mind the restrictions imposed by the Companies Act, 2013 with regard to the declaration of dividend.

(ii) Internal Factors:

Apart from the various external factors aforementioned, the Board will take into account various internal factors while declaring Dividend, which inter alia will include:

a) Profits earned during the year; b) Present & future Capital requirements of the existing businesses; c) Brand/ Business Acquisitions; d) Expansion/ Modernization of existing businesses; e) Additional investments in subsidiaries/associates of the Company; f) Fresh investments into external businesses; and g) Any other factor as deemed fit by the Board.

After taking into consideration the above factors, the Board shall endeavour to take a uniform decision with an objective to enhance shareholders wealth and retaining substantial amount of Profit for the future plans of the Company.

Commitment towards distribution of Dividend to Shareholders:

The Company stands committed to deliver sustainable value to all its stakeholders. The Company shall strive to distribute an optimal and appropriate level of the profits earned, through its core business activities, to the shareholders, in the form of dividend.

In case the Board proposes not to distribute the profit; the grounds thereof and information on utilisation of the undistributed profit, if any, shall be disclosed to the shareholders in the Annual Report of the Company.

For and on behalf of the Board
Place : Mumbai MOHAN A. CHANDAVARKAR
Date : May 25, 2018 Chairman and Managing Director

ANNEXURE B TO DIRECTORS REPORT

(Pursuant to first proviso to Sub-Section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014)

Pursuant to the general exemption granted under Section 129 of the Companies Act, 2013 by the Ministry of Corporate Affairs, Government of India, the Company is publishing the Standalone and Consolidated Financial Statements of FDC Limited and its subsidiaries. The Financial Statements and Auditors reports of the individual Subsidiaries are available for inspection by the Shareholders at the registered office of the Company.

Part "A" - Subsidiaries
(Rupees in lakhs)
Particulars
Reporting Period for the Subsidiary 31 March, 2018 31 March, 2018
% of Shareholding 100% 100%
Reporting Currency UK Pounds US Dollars
Exchange Rate as on 31 March, 2018 90.46 63.81
1. Share capital 3.38 31.91
2. Reserves and surplus 1,554.57 20.22
3. Total Assets 1,962.60 53.08
4. Total Liabilities 1,962.60 53.08
5. Investments (other than in subsidiaries) - -
6. Turnover 2,383.50 -
7. Profit/ (Loss) before taxation 835.78 (0.78)
8. Provision for taxation 160.09 0.32
9. Profit/ (Loss) after taxation 675.69 (1.10)
10. Proposed / Interim Dividend - -
(Rupees in lakhs)
Particulars
1. Latest Audited Balance Sheet Date 31 March, 2018
2. No. of Shares of Joint Venture held by the Company on the year end 159,250
3. Amount of Investment in Joint Venture 11.30
4. Extent of Holding % 49%
5. Description of how there is significant There is significant influence influence due to percentage of Shareholding in the Joint Venture
6. Reason why the Joint Venture is not consolidated N.A.
7. Networth attributable to Shareholding as per latest audited Balance Sheet (107.58)
8. Profit/ Loss for the year considered in Consolidation 47.72
9. Profit/ Loss for the year not considered in Consolidation 49.67

Notes:

(i) Names of Subsidiaries/ Joint Ventures which are yet to commence operations: None

(ii) Names of Subsidiaries/ Joint Ventures which have been liquidated or sold during the year: None

For and on behalf of the Board of Directors
MOHAN A. CHANDAVARKAR ASHOK A. CHANDAVARKAR
Chairman and Managing Director Director
SANJAY JAIN VARSHARANI KATRE
Chief Financial Officer Company Secretary
Place : Mumbai
Date : May 25, 2018

ANNEXURE D TO DIRECTORS REPORT

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

Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, for the year ended March 31, 2018.

A) CONSERVATION OF ENERGY

(i) Steps taken or impact on conservation of energy:

Maintained the unity power factor at all locations.

New equipments selected at various locations to minimize the energy/ operational cost with more productivity.

(ii) Steps taken by the Company for utilising alternate sources of energy:

50KVA roof top solar system made operational for Bhiwandi warehouse Installation of 530KVA roof top solar system at Waluj plant.3 Internal furnace Agro waste fired boiler installed at Roha plant.

(iii) Capital investment on energy conservation equipments: Rs. 2.32 Crores

B) TECHNOLOGY ABSORPTION

Research and Development ( R&D):

(i) Efforts made towards technology absorption:

Synthesis of new chemical entities and lead compounds.

Preservative free oral suspension.

Development of Generic APIs and their intermediates

(ii) Benefits derived:

Reduction in Cost

Preservative free oral suspension

(iii) Information regarding imported technology (imported during the last 3 (Three) years reckoned from the beginning of the financial year)- None

(iv) Expenditure incurred on Research and Development.

(Rupees in lakhs)

2017-2018 2016-2017
a. *Capital 322.63 260.35
b. Recurring 2,487.02 2,543.08
c. Total 2,809.65 2,803.43
d. Total R&D expenditure
as a percentage of total
turnover *Including
C.W.I.P. 2.63% 2.68%

C) FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of foreign exchange earnings and outgo are given in the Notes to the accounts.

For and on behalf of the Board
Place : Mumbai MOHAN A. CHANDAVARKAR
Date : May 25, 2018 Chairman and Managing Director

ANNEXURE E TO DIRECTORS REPORT

A. PARTICULARS UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND RULE 5(1) OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.

(i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year 2017-2018:

Name Designation Ratio
Mr. Mohan A. Chandavarkar Chairman and Managing Director 88:1
Mr. Nandan M. Chandavarkar Joint Managing Director 73:1
Mr. Ashok A. Chandavarkar Wholetime Director 62:1
Mr. Ameya A. Chandavarkar Wholetime Director 51:1
Ms. Nomita R. Chandavarkar Wholetime Director 25:1
Dr. Rahim H. Muljiani Independent Director -
Dr. Satish S. Ugrankar Independent Director -
CA. Vinod G. Yennemadi Independent Director -
CA. Swati S. Mayekar Independent Director -
CA. Uday Kumar Gurkar Independent Director -

Note: The remuneration to Independent Directors consists of Sitting fees and commission only.

(ii) The percentage increase / decrease in the remuneration of each Director, Chief Financial Officer and Company Secretary or Manager in the Financial Year:

Name Designation % Increase/(Decrease)
Mr. Mohan A. Chandavarkar Chairman and Managing Director 5.71
Mr. Nandan M. Chandavarkar Joint Managing Director 7.34
Mr. Ashok A. Chandavarkar Wholetime Director 8.64
Mr. Ameya A. Chandavarkar Wholetime Director 7.19
Ms. Nomita R. Chandavarkar Wholetime Director 0.32
Mr. Sanjay B. Jain Chief Financial Officer 20.79
Ms.Varsharani Katre Company Secretary 9.97
Dr. Rahim H. Muljiani Independent Director -
Dr. Satish S. Ugrankar Independent Director -
CA. Vinod G. Yennemadi Independent Director -
CA. Swati S. Mayekar Independent Director -
CA. Uday Kumar Gurkar Independent Director -

(iii) The percentage increase in the median remuneration of employees in the Financial Year: 9.13%

(iv) The number of permanent employees on the rolls of the Company :

There were 5531 employees on the rolls of the Company as on March 31, 2018.

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof:

Average increase in managerial remuneration is 11.80% & for other than Managerial Personnel is 13.23%.

B. INFORMATION AS PER RULE 5 (2) & (3) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.

i) Employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than one crore and two lakh rupees as per clause (i) of Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Date of Joining Gross Remuneration (Rs.) Nature of Employment Educational Qualification Age (Yr.) Experience (Year) Last employment Designation Whether any such employee is a relative of any director or manager of the company and if so, name of such director or manager
1. 11,735,772 Permanent Msc (Tech) 64 38 Indoco Remedies Ltd. President (Technical & Operations) No

ii) None of the employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than eight lakh and fifty thousand rupees per month as per clause (ii) of Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

iii) Employees mentioned above are neither relatives of any directors or managers of the Company, nor hold 2% or more of the paid-up equity share capital of the Company as per Clause (iii) of sub-rule (2) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

For and on behalf of the Board
Place : Mumbai MOHAN A. CHANDAVARKAR
Date : May 25, 2018 Chairman and Managing Director

ANNEXURE F TO DIRECTORS REPORT

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8 (2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub - Section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto:

1. Details of contracts or arrangements or transactions not at arms length basis:

The Company has not entered into any transaction with related parties which were not on an arms length basis.

2. Details of material contracts or arrangement or transactions at arms length basis:

The Company has not entered into any material contracts or transactions with related parties during the financial year 2017-18.

For and on behalf of the Board
Place : Mumbai MOHAN A. CHANDAVARKAR
Date : May 25, 2018 Chairman and Managing Director