FDC Directors Report

DIRECTORS'''' REPORT


To,


The Members


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


1. STANDALONE FINANCIAL RESULTS (Rupees in lakhs)



































































































































Particulars



2016-2017



2015-2016



Revenue from operations



(Net)



1,04,602.34



1,00,989.33



Other income



4,964.51



3,997.54



Profit (before finance



costs and depreciation /



amortization)



28,571.39



29,694.49



Finance costs



140.71



139.68



Depreciation and



amortization



3,452.33



3,361.14



Profit Before Tax



24,978.35



23,193.67



Less: Taxation



- Current Tax



6,800.00



6,717.20



- Deferred Tax



(334.41)



(413.75)



- Tax adjustments for



earlier years



(Current Tax)



(193.98)



-



Profit After Tax



18,706.74



16,890.22



Other Comprehensive



Income/(Loss)



for the year



(19.26)



(32.49)



Balance of Profit from



prior years



61,906.36



59,680.29



Surplus available for



appropriation



80,593.84



76,538.02



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


2. DIVIDEND


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


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


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


3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT


(A) Industry structure & developments


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


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


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


- Shift from communicable to lifestyle diseases-


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


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


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


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


(B) Outlook, Risks and Concerns


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


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


(C) Financial performance and Operations review


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


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


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


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


(D) Segment-wise or product-wise performance


(i) Marketing


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


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


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


(ii) Research and Development


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


- Formulations


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


- Synthetics


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


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


- Nutraceuticals


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


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


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


- Biotechnology


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


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


(iii) Exports


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


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


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


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


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


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


(E) Internal Financial Controls and their adequacy


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


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


(F) Human Resources


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


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


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


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


(G) Cautionary Statement


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


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


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


5. AUDITORS REPORT


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


6. CONSOLIDATED FINANCIAL STATEMENTS


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


7. SUBSIDIARIES / JOINT VENTURE AND ITS OPERATIONS


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


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


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


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


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


8. BUSINESS RESPONSIBILITY REPORT


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


9. DIRECTORS'''' RESPONSIBILITY STATEMENT


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


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


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


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


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


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


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


10. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS


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


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


11. PUBLIC DEPOSITS


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


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


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


13. DIRECTORS AND KEY MANAGERIAL PERSONNEL


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


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


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


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


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


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


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


3. Mr. Ashok A. Chandavarkar, Wholetime Director


4. Mr. Ameya A. Chandavarkar, Wholetime Director


5. Ms. Nomita R. Chandavarkar, Wholetime Director


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


7. Ms. Varsharani Katre, Company Secretary


14. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES


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


15. CORPORATE GOVERNANCE


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


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


16. RISK MANAGEMENT


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


17. NOMINATION AND REMUNERATION POLICY


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


18. MEETINGS OF THE BOARD AND COMMITTEES THEREOF


The information has been furnished in the Corporate Governance Report.


19. AUDIT COMMITTEE


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


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


20. BOARD & DIRECTORS EVALUATION


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


21. FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS


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


22. VIGIL MECHANISM/ WHISTLE BLOWER POLICY


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


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


23. CODE OF CONDUCT


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


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


24. PREVENTION OF INSIDER TRADING


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


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


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


25. RELATED PARTY TRANSACTIONS


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


2015.


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


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


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


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


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


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


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


27. CHANGE IN CORPORATE OFFICE OF THE COMPANY


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


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


28. STATUTORY AUDITORS


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


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


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


29. COST AUDITORS


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


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


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


30. SECRETARIAL AUDIT


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


31. EXTRACT OF ANNUAL RETURN


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


32. CORPORATE SOCIAL RESPONSIBILITY (CSR)


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


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


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


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


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


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


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


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


34. ENVIRONMENT, HEALTH AND SAFETY


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


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


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


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


36. ACKNOWLEDGEMENTS


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


For and on behalf of the Board


Place: Mumbai MOHAN A. CHANDAVARKAR


Date : May 26, 2017 Chairman and Managing Director

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